GENERAL PROVISIONS Kinds of Obligation

Article 1156. An obligation is a juridical 1. Real Obligation (obligation to give) – is

necessity to give, to do, or not to do. a thing which the obligor must deliver
to the obligee.
EXPLANATION EXAMPLE
2. Personal Obligation – an act to be done
When a person is If Ana borrows ₱5,000
or not to be done
bound by an obligation, from Bea, Ana has the
Two Kinds of Personal Obligation:
the law requires them obligation to give back
to fulfill it, and if they the money. a. Positive personal obligation or
fail, they can be obligation to do or to render
compelled by the court If a carpenter promises service.
to perform or pay for to build a table for b. Negative personal obligation is
damages. There are Maria, he has the obligation not to do,
three kinds of obligation to do.
obligations: (1) to give
something, (2) to do If Pedro promises not Article 1157. Obligations arise from:
something, and (3) not to block Maria’s
to do something. driveway, he has the 1. Law;
obligation not to do. 2. Contracts;
3. Quasi-contracts;
4. Acts or omissions punished by law; and
OBLIGATION
5. Quasi-delicts.
• is derived from the Latin word obligatio
EXPLANATION:
which means tying or binding,
This means that there are five sources from
Essential Requisites of An Obligation
which obligations can originate. A person
1. A passive subject (debtor or obligor) – becomes legally bound to perform an obligation
the person who is bound to the depending on these causes.
fulfillment of the obligation, he who
The Five Sources of Obligations
has a duty.
2. An active subject (creditor or obligee) 1. Law – when they are imposed by law itself.
– the person who is entitled to demand
the fulfillment of the obligation, he Example:
who has a right. Obligation to pay taxes; obligation to support
3. Object or prestation (subject matter) – one's family.
the conduct required to be observed
by the debtor.
4. A juridical or legal tie (efficient use) – 2. Contracts – when they arise from the
that which binds or connects the stipulation of the parties.
parties to the obligation Example:

The obligation to repay a loan or indebtedness

by virtue of an agreement.
3. Quasi-contracts (not real contract) – when EXPLANATION EXAMPLE
they arise from lawful, voluntary and Obligations that come from The law expressly
unilateral acts which are enforceable to the law must be clearly stated or requires parents to
end that no one shall be unjustly enriched provided by law itself. They support their children and
or benefited at the expense of another. In a cannot be assumed or implied requires taxpayers to pay
sense, these obligations may be considered unless a specific law says so. In taxes. These are
as arising from law. other words, a person cannot obligations derived from
be forced to perform an law. However, if there is
Example: obligation just because no law stating a specific
someone believes the law duty, then a person
The obligation to return money paid by mistake requires it—there must be a cannot be forced to do it.
or which is not due. clear legal basis for that
obligation.
4. Crimes or acts or omissions punished by
law – when they arise from civil liability
which is the consequence of a criminal
offense. Article 1159. Obligations arising from contracts
have the force of law between the contracting
Example: parties and should be complied with in good
faith.
A thief who steals a phone must return it and
pay for any damage done. EXPLANATION EXAMPLE
Once two or more parties if Ana agrees to sell her
enter into a valid contract, laptop to Bea for ₱15,000,
5. Quasi-delicts or torts – when they arise the agreement becomes as Ana is obliged to deliver the
from damage caused to another through an binding as the law between laptop, and Bea is obliged to
act or omission, there being fault or them. Each party must fulfill pay the ₱15,000. Neither of
negligence, but no contractual relation what they have promised them can back out or
because the contract itself change the agreement
exists between the parties.
has legal power. The law without the other’s consent.
Example: expects both parties to If one fails to comply, the
perform their obligations other may go to court to
If a driver carelessly hits a pedestrian, the driver honestly, sincerely, and enforce the contract or
must pay for the victim’s medical expenses faithfully — this is what “in claim damages.
good faith” means.

ARTICLE 1158. Obligations derived from law

are not presumed. Only those expressly CONTACT
determined in this Code or in special laws are • Is a meeting of minds between two or
demandable, and shall be regulated by the more persons whereby one binds
precepts of the law which establishes them; himself, with respect to others, to give
and as to what has not been foreseen, by the something or to render some service.
provisions of this Book.
Compliance in Good Faith – means compliance
or performance accordance with the
stipulations or terms of the contract.
Article 1160. Obligations derived from quasi- 2. Solutio indebiti – is the juridical relation
contracts shall be subject to the provisions of which is created when something is
Chapter 1, Title XVII of this Book. received when there is no right to demand
it and it was unduly delivered through
EXPLANATION EXAMPLE
mistake.
This means that when an If Pedro
obligation comes from a accidentally Example:
quasi-contract, the rules that pays Maria’s
apply are found in the part of water bill, even Carla mistakenly sends ₱1,000 to Leo’s GCash
the Civil Code that discusses though the bill is account, thinking it was her friend Mia’s
quasi-contracts (specifically in not his, Maria number.
Title XVII). A quasi-contract becomes
happens when a person obliged to • Leo is legally bound to return the ₱1,000 under
benefits from another without reimburse solutio indebiti.
a valid agreement, but Pedro because
fairness and justice require she benefited
that the benefited person from his Article 1161. Civil obligations arising from
must return or compensate payment. This is criminal offenses shall be governed by the
what was received. an example of a penal laws, subject to the provisions of Article
quasi-contract, 2177 of this Code; and the extinction of the
In simple terms, even though specifically penal action does not carry with it the
there was no formal contract, called solutio
extinction of the civil, unless the extinction
the law creates an obligation indebiti
proceeds from the declaration that the fact
to prevent one person from (payment not
being unjustly enriched at the due). from which the civil might arise did not exist.
expense of another. EXPLANATION EXAMPLE
When a person commits a crime, If a thief steals ₱10,000
they not only face criminal from someone, he
Kinds of Quasi-Contracts liability (punishment under penal commits a crime (theft)
1. Negotiorum gestio – is the voluntary laws) but also have a civil and also has a civil
management of the property or affairs of obligation to repair or pay for the obligation to return
damage caused. The rules for the ₱10,000 and
another without the knowledge or consent
these obligations are mainly possibly pay damages.
of the latter
found in penal laws but may also Even if he is later
Example: be affected by certain provisions pardoned or forgiven,
of the Civil Code. he still needs to return
Ana goes on vacation abroad. Her neighbor, the money because
Ben, notices that Ana’s roof is leaking during a Even if the criminal case is that is his civil
storm. Without being asked, Ben hires workers dismissed or the offender is responsibility.
to fix the roof to prevent damage. pardoned, the civil obligation to
pay for the damage or loss does
➢ Here, Ben acted as the negotiorum gestor, not automatically disappear,
and Ana must reimburse him for the unless the court declares that the
necessary expenses. act or incident never really
happened.
Article 1162. Obligations derived from quasi- required is that of a “good father She cannot use it
delicts shall be governed by the provisions of of a family” — meaning a carelessly or neglect it
Chapter 2, Title XVII of this Book, and by reasonably careful and because she is obliged
special laws. responsible person who takes to take care of it as a
care of things as if they were his good and responsible
EXPLANATION EXAMPLE own. person would. If the car
When an obligation comes If a driver carelessly is damaged due to her
from a quasi-delict (also runs over a However, the law or the negligence, she must
called a tort), the rules that pedestrian because agreement between the parties pay for the damages.
apply are found in the Civil he wasn’t paying can require a higher or lower
Code under Chapter 2, attention, even level of diligence depending on
Title XVII, and in other though there was the situation.
special laws that deal with no contract or
damages or negligence. crime, he is still
civilly liable to pay SPECIFIC OR DETERMINATE THING
A quasi-delict happens for the pedestrian’s
• A thing that particularly designated or physically
when a person causes medical expenses
harm or injury to another and damages. This segregated from others of the same class.
through fault or is a quasi-delict GENERIC OR INDETERMINATE THING
negligence, even if there is because it resulted
no contract or criminal from negligence, • A thing when it refers only to a class or genus to
intent involved. In this not from an which it pertains and cannot be pointed out with
case, the person who agreement or a particularity.
caused the damage must criminal act.
pay or repair the harm
done.
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
NATURE AND EFFECT OF OBLIGATIONS delivered to him.
Article 1163. Every person obliged to give EXPLANATION EXAMPLE
something is also obliged to take care of it with when a person (the debtor) If Ana sells a mango orchard
the proper diligence of a good father of a is obliged to deliver to Bea, Bea becomes
family, unless the law or the stipulation of the something to another (the entitled to the fruits
parties requires another standard of care. creditor), the creditor (mangoes) from the time
becomes entitled to the their contract becomes
EXPLANATION EXAMPLE fruits or benefits of that effective. But Bea does not
when a person has the If Ana borrows thing from the moment the yet own the orchard or the
obligation to give Bea’s car and obligation to deliver arises. fruits until the orchard has
something (for example, to promises to return However, the creditor does been formally delivered to
deliver a thing or property), it, Ana must take not yet own the thing or her.
they must also take good care of the car have a real right over it until
care of it before delivering properly while it is it has actually been
it. The standard of care in her possession. delivered.
Different Kinds of Fruits

1. Natural Fruits – are the spontaneous same kind and quality, and the promises to deliver a
products of the soil, and the young and creditor may ask that the obligation car, she may choose
other products of animals. (Grass) be fulfilled at the debtor’s expense any car of the same
2. Industrial Fruits – are those produced by if he fails to do so. kind. If Ana delays
lands of any kind through cultivation or and her car is later
labor. (Sugar cane, Vegetable, Rice) Furthermore, if the debtor delays destroyed in an
the delivery or promises the same accident, she will still
3. Civil Fruits – are those derived by virtue of a
thing to multiple people, he be responsible for it
juridical relation. (Rent of Buildings)
becomes liable even for fortuitous because of her
Personal right – is the right or power of a events (accidents or unavoidable delay.
person (creditor) to demand from another circumstances) until the thing is
(debtor), as a definite passive subject, the actually delivered.
fulfillment of the latter's obligation to give, to
do, or not to do. Right against a person In a specific real obligation, the creditor may
Real right – is the right or interest of a person exercise the following remedies:
over a specific thing (like ownership, • Demand specific performance.
possession, mortgage), without a definite • Demand rescission or cancellation.
passive subject against whom the right may be • Demand payment of damages only.
personally enforced. Right against everyone

In a generic real obligation, it can be performed

Article 1165. When what is to be delivered is a by a third person.
determinate thing, the creditor, in addition to
the right granted him by Article 1170, may
compel the debtor to make the delivery. Article 1166. The obligation to give a
determinate thing includes that of delivering
If the thing is indeterminate or generic, he may all its accessions and accessories, even though
ask that the obligation be complied with at the they may not have been mentioned.
expense of the debtor.
EXPLANATION EXAMPLE
If the obligor delays, or has promised to deliver This means that when a If Ana sells her car to Bea,
the same thing to two or more persons who do person is obliged to deliver a Ana must also deliver the car
not have the same interest, he shall be specific or determinate keys, spare tire, and tools
responsible for any fortuitous event until he thing, they must also deliver that come with it, even if
has affected the delivery. everything that naturally or these were not mentioned in
legally belongs to it — these their contract. Similarly, if
EXPLANATION EXAMPLE are called accessions and Ana sells a piece of land with
If the thing to be delivered is If Ana promises to accessories — even if these a mango tree, she must also
specific, the creditor has the deliver her were not specifically stated deliver the fruits and
right to compel the debtor specific red car to in the agreement. improvements found on that
to deliver that exact thing. Bea, Bea can land.
However, if the thing is demand that
generic, the debtor may exact car. But if
deliver any item of the Ana only
ACCESSIONS Article 1168. When the obligation consists in
not doing, and the obligor does what has been
• Are the fruits of a thing or additions to
forbidden him, it shall also be undone at his
or improvements upon a thing (the
expense.
principal).
• House or trees on a land, air conditioner EXPLANATION EXAMPLE
in a car, rents of a building. When a person has an If Pedro promises not to
obligation not to build a wall that blocks
ACCESSORIES dosomething — that is, to Ana’s driveway but still
refrain from performing a builds it, the court can order
• Are things joined to or included with
specific act — and still that the wall be demolished
the principal thing for the latter’s
performs the forbidden act, at Pedro’s expense. This
embellishment, better use, or the law requires that what ensures that the obligation
completion. has been done must be “not to do” is properly
• Key of a house, frame of a picture, undone or removed. The respected and restored to its
machinery in a factory, bow of a violin. person who violated the original state.
obligation must also bear
the cost of undoing it.
Article 1167. If a person obliged to do
something fails to do it, the same shall be Article 1169. Those obliged to deliver or to do
executed at his cost. This same rule shall be something incur in delay from the time the
observed if he does it in contravention of the obligee judicially or extrajudicially demands
tenor of the obligation. Furthermore, it may be from them the fulfillment of their obligation.
decreed that what has been poorly done be
undone. However, the demand by the creditor shall not
be necessary in order that delay may exist:
EXPLANATION EXAMPLE
When a person is obliged If Ana hires Pedro to (1) When the obligation or the law expressly
to do something and fails paint her house blue, so declares;
to perform it, the creditor but Pedro fails to
may have the act done by paint it, Ana can hire (2) When from the nature and the
another person but at the another painter to circumstances of the obligation it appears that
expense of the debtor do the job and make the designation of the time when the thing is
The same rule applies if Pedro pay for the to be delivered or the service is to be rendered
the debtor performs the cost. If Pedro paints was a controlling motive for the establishment
act improperly or against the house red of the contract; or
the agreement. instead of blue, Ana
can also demand that (3) When demand would be useless, as when
In addition, if the debtor the incorrect work the obligor has rendered it beyond his power
performs the task poorly be redone or to perform.
or incorrectly, the court removed at Pedro’s
In reciprocal obligations, neither party incurs in
may order that the work expense.
be undone or corrected, delay if the other does not comply or is not
ensuring that the creditor ready to comply in a proper manner with what
receives the proper result is incumbent upon him. From the moment one
of the obligation. of the parties fulfills his obligation, delay by
the other begins.
E This means that a person who is obliged DELAY
X to give or do something is considered in
P delay (default) only when the creditor 1. Ordinary Delay – is merely the failure
L demands the performance of the to perform an obligation on time.
A obligation — either judicially (through 2. Legal Delay (default/mora) – is the
N court) or extrajudicially (outside of failure to perform an obligation on time
A court) — and the debtor still fails to which failure constitutes a breach of the
T comply. obligation.
I
O However, there are three exceptions Kinds of Delay or Default
N where no demand is needed for delay to 1. Mora solvendi – the delay on the part
exist:
of the debtor to fulfill his obligation.
1. When the law or contract
2. Mora accipiendi – the delay on the part
specifically says that delay will
begin automatically. of the creditor to accept the
2. When the time of performance performance of the obligation.
is the main reason for the 3. Compensatio morae – the dela of the
agreement (for example, if the obligors in reciprocal obligations. Both
service must be done on a parties are delay.
specific date).
3. When making a demand is
useless, such as when the debtor Article 1170. Those who in the performance of
can no longer perform the their obligations are guilty of fraud,
obligation.
negligence, or delay, and those who in any
manner contravene the tenor thereof, are
In cases of reciprocal obligations (where
both parties have duties to each other), liable for damages.
neither side is considered in delay if the EXPLANATION EXAMPLE
other has not yet performed or is not If a person (the debtor) if Pedro agrees to repair Ana’s
ready to perform their part. Delay only fails to properly perform car within three days but
begins when one party has already what is required in their intentionally delays it for a
fulfilled their obligation and the other obligation — whether by week, causing Ana to miss work,
fails to do so. fraud, negligence, delay, Pedro is liable for damages due
or by violating the terms to delay. Similarly, if he uses
E If Ana agrees to deliver furniture to Bea of the agreement — they cheap materials instead of the
X on July 1, and Bea has already paid, Ana are responsible for agreed quality parts, that would
A is in delay if Bea demands delivery and paying damages to the be a contravention of the
M Ana fails to deliver. But if the contract other party (the creditor). terms.
P states that the furniture must be
L delivered exactly on July 1, Ana is
E automatically in delay if she fails to Four Grounds for Liability
deliver that day, even without Bea’s
demand. 1. Fraud (deceit or dolo) – it is the
deliberate or intentional evasion of the
normal fulfillment of an obligation.
2. Negligence (fault or culpa) – it is any
voluntary act or omission, there being
 no bad faith or malice, which prevents Waiver of action for future fraud void.
the normal fulfillment of an obligation.
• A waiver of an action for future fraud id
3. Delay (mora) – when the debtor does
void as being against the law and public
not perform the obligation on time
policy.
after being required to do so.
4. Contravention of the terms of the • “Maria agrees not to hold Juan liable for
obligation - this is the violation of the any future fraud he might commit in
terms and conditions stipulated in the relation to this loan.”
obligation without justifiable excuse or Waiver of action for past fraud valid.
reason.
• A past fraud can be the subject of a
valid waiver because the waiver can be
Article 1171. Responsibility arising from fraud considered as an act of generosity and
is demandable in all obligations. Any waiver of magnanimity on the pat of the party
an action for future fraud is void. who is the victim of the fraud.
• “I forgive Pedro and will no longer file
E If a person commits fraud (or dolo) while any case related to his
X performing an obligation, they are always misrepresentation.”
P liable for it — no exceptions. Fraud happens
L when someone intentionally deceives
A another or acts in bad faith to avoid fulfilling
Article 1172. Responsibility arising from
N an obligation.
A The second part of the article says that any negligence in the performance of every kind of
T agreement or waiver that excuses a person obligation is also demandable, but such
I from being liable for future fraud is not liability may be regulated by the courts,
O valid. This is because the law does not allow according to the circumstances.
N anyone to plan or excuse future dishonesty
in advance. The law always protects the EXPLANATION EXAMPLE
innocent party from intentional deceit. If a person fails to perform their If Bea asks a delivery
However, a waiver for past fraud (meaning obligation properly because of driver to bring her
fraud that has already happened and is later negligence (or lack of proper care), fragile vases, but the
forgiven) may be valid, because the injured they are still responsible and can driver accidentally
party has the choice to forgive after knowing be required to pay for damages. breaks one because he
what happened. Negligence occurs when someone drove carelessly, he is
E If Pedro borrows ₱10,000 from Ana and lies fails to do what a reasonably liable for damages
X about his purpose to get the money, he careful person would have done in due to negligence. But
A commits fraud, and Ana can sue him for the same situation. if the accident
M damages. If their contract says that Ana happened because of
P “waives Pedro’s liability for any future However, the article also gives the an unexpected road
L fraud,” that part of the contract is void courts the power to adjust the hazard beyond his
E because it allows deceit in the future. liability depending on the control, the court may
situation. This means that if the reduce his liability
negligence is minor or if there are since the negligence
valid reasons that reduce the was not severe.
person’s fault, the court may
lessen the damages to make the
decision fair.
Kinds of Negligence According to the Source of
Obligation
When the law or contract does not specify the kind of
1. Contractual Negligence (culpa diligence required, the person must act with the care
contractual) – This kind of negligence is expected of a “good father of a family” (or a
not a source of obligation. It merely reasonably prudent person). This means being
makes the debtor liable for the responsible, careful, and acting in good faith in
damages in view of his negligence in the performing one’s obligations.
fulfillment of a pre-existing obligation. E If a warehouse owner is tasked to keep a client’s goods
X safe but fails to lock the doors properly and the goods
2. Civil Negligence (culpa aquiliana) – a
A are stolen, he is negligent because he did not act with
negligence which by itself is the source
M the diligence of a good father of a family. However, if
of an obligation between the parties P he purposely ignored security knowing theft was likely,
not so related before by any pre- L that would be bad faith and treated like fraud.
existing contract. E
3. Criminal Negligence (culpa criminal) – a
negligence resulting in the commission
of a crime. Damages – signify the money compensation
awarded to a party for loss or injury resulting
from breach of contact.
Article 1173. The fault or negligence of the Diligence – is the attention and care required of
obligor consists in the omission of that a person in a given situation.
diligence which is required by the nature of the
obligation and corresponds with the
circumstances of the persons, of the time and Article 1174. Except in cases expressly specified
of the place. When negligence shows bad faith, by the law, or when it is otherwise declared by
the provisions of Articles 1171 and 2201, stipulation, or when the nature of the
paragraph 2, shall apply. If the law or contract obligation requires the assumption of risk, no
does not state the diligence which is to be person shall be responsible for those events
observed in the performance, that which is which could not be foreseen, or which, though
expected of a good father of a family shall be foreseen, were inevitable.
required.
EXPLANATION EXAMPLE
E This means that fault or negligence happens A person is not liable for the If Ana promises to deliver a
X when a person fails to use the proper care or non-performance of an shipment of goods to Bea
P attention that the situation requires. The obligation if the failure was but a sudden earthquake
L level of care (called diligence) depends on: caused by an event that could destroys the goods before
A • the nature of the obligation, not be foreseen or avoided. delivery, Ana is not liable
N • the circumstances of the person, These events are called because the event was
A • the time, and fortuitous events or acts of unforeseeable and
T • the place involved. God. unavoidable. But if Ana
I If the negligence is so serious that it shows Exceptions: failed to secure the goods
O bad faith (meaning it’s almost intentional or 1. The law says otherwise. properly knowing a storm
N done with dishonesty), then the rules on 2. The contract says was coming, she may still
fraud (from Articles 1171 and 2201) will apply otherwise be liable because her
— which means stricter liability and great 3. The obligation itself negligence contributed to
damages. requires taking risk. the loss.
FORTUITOUS EVENT Usury – is contracting for or receiving interest in
excess of the amount allowed by law for the
• Is any event which cannot be foreseen,
loan or use of money, goods, chattels or credits.
or which, though foreseen, is inevitable.
• A fortuitous event may be an act of man
(war, fire, robbery, murder) or an act of
Article 1176. The receipt of the principal by the
God (earthquake, flood, rain, lightning).
creditor, without reservation with respect to
Kinds of Fortuitous Events the interest, shall give rise to the presumption
that said interest has been paid.
Ordinary fortuitous event – those events which
are common and which the contracting parties The receipt of a later installment of a debt,
could reasonably foresee (e.g., rain). without reservation as to prior installments,
shall likewise raise the presumption that such
Extra-ordinary fortuitous event – those events installments have been paid.
which are uncommon and which the
contracting parties could not have reasonably EXPLANATION EXAMPLE
foreseen (e.g., earthquake, fire). When a creditor (the one owed) receives If Ana owes Bea
payment of the principal amount (the ₱10,000 with
original debt) without mentioning any ₱1,000 interest,
unpaid interest, the law presumes that and Bea accepts
Article 1175. Usurious transactions shall be
the interest has already been paid. the ₱10,000
governed by special laws.
Similarly, when a creditor accepts a later without saying
EXPLANATION EXAMPLE installment of a debt without saying that anything about
Any transaction involving If Pedro lends the earlier ones are still unpaid, it is the interest, the
usury — or the charging of ₱10,000 to Ana presumed that the earlier installments law presumes
excessively high interest but demands have already been paid. These are only that Ana
rates on loans — is not ₱10,000 interest legal presumptions, meaning they can be already paid the
directly governed by the Civil every month, this proven otherwise if there is evidence interest.
Code but instead by special is usurious or that the interest or earlier installments
laws created specifically to unconscionable. were indeed unpaid.
regulate and control such Even though
practices. Usury happens parties may freely
PRESUMPTION
when a lender demands agree on interest
unreasonably high interest rates, the court • Is meant the inference of a fact not
from a borrower. The law can declare the actually known arising from its usual
protects borrowers from rate invalid if it is connection with another which is
being exploited by limiting or clearly abusive or
known or proved.
regulating how much unjust.
interest can be charged. Two Kinds of Presumption

1. Conclusive presumption – one which

Simple loan or mutuum – is a contract whereby cannot be contradicted.
one of the parties delivers to another, money or 2. Disputable presumption – one which
other consumable thing, upon the condition can be contradicted by presenting
that the same amount of the same kind and proof.
quality shall be paid.
Article 1177. The creditors, after having Article 1178. Subject to the laws, all rights
pursued the property in possession of the acquired in virtue of an obligation are
debtor to satisfy their claims, may exercise all transmissible, if there has been no stipulation
the rights and bring all the actions of the latter to the contrary.
for the same purpose, save those which are
E The rights that come from an obligation can generally
inherent in his person; they may also impugn
X be transferred or passed on to another person, unless
the acts which the debtor may have done to
P the law or the contract says otherwise.
defraud them. L In other words, when a person (the creditor) has a
E If a debtor (the person who owes) does not A right to demand something from another (the debtor),
X pay what they owe, the creditor (the one N that right does not automatically end with the death
P owed) can use certain legal remedies to A or change of the creditor or debtor. It can usually be
L protect their right to collect the debt. T inherited, assigned, or transferred to another person
A I — for example, to an heir, successor, or assignee — as
N The creditor must first go after the debtor’s O long as it is not a personal right.
A own property to satisfy the claim. But if the N
T debtor tries to avoid payment or hides However, there are exceptions:
I assets, the creditor has other options: • If the law prohibits the transfer (such as
O 1. The creditor may exercise the certain government benefits).
N rights of the debtor — such as • If the contract specifically states that the right
collecting money owed to the cannot be transferred.
debtor by another person — except • If the right is personal in nature (for example,
for rights that are personal in an obligation to paint a portrait because it
nature (like the right to marry or depends on the artist’s personal skill).
the right to vote). EX. If Ana lends ₱50,000 to Bea and Bea dies before
2. The creditor may invalidate payment, Ana can still collect the money from Bea’s
(impugn) any fraudulent acts done heirs because the obligation is transmissible. But if
by the debtor to avoid paying, such Ana hired Bea to sing at her event, that obligation
as transferring property to others cannot be transferred to someone else, since it is
just to hide it from creditors. personal and based on Bea’s unique talent.

This article basically prevents debtors from

cheating their creditors by disposing of or
hiding their assets. It ensures that the DIFFERENT KINDS OF OBLIGATIONS
creditor can still be paid by using legal
means to reach the debtor’s property or SECTION 1 – PURE AND CONDITIONAL
rights. OBLIGATION
EX. If Pedro owes Ana ₱100,000 but transfers
his house to his friend to avoid payment,
Ana can go to court to invalidate that Article 1179. Every obligation whose
transfer because it was made to defraud performance does not depend upon a future or
her. uncertain event, or upon a past event unknown
to the parties, is demandable at once. Every
obligation which contains a resolutory
condition shall also be demandable, without
prejudice to the effects of the happening of the
event.
 EXPLANATION EXAMPLE Two Principal Kinds of Condition
When an obligation does If Ana promises to
not depend on any pay Bea ₱5,000 1. Suspensive condition – one the
condition or uncertain next week, that is a fulfillment of which will give rise to an
event, it is called a pure pure obligation, obligation.
obligation, and it is because it doesn’t 2. Resolutory condition – one the
demandable at once. In depend on fulfillment of which will extinguish an
other words, the creditor anything uncertain obligation already existing.
can immediately require — Bea can demand
the debtor to perform the payment when the
obligation because there is time comes. Article 1180. When the debtor binds himself to
no uncertainty about
pay when his means permit him to do so, the
whether it should be But if Bea allows
obligation shall be deemed to be one with a
fulfilled. Ana to live in her
period, subject to the provisions of Article
The article also mentions house until Bea
resolutory conditions, gets married, that 1197.
which are different. An is an obligation EXPLANATION EXAMPLE
obligation with a resolutory with a resolutory
When a person (the debtor) If Pedro tells Ana,
condition is effective condition, because
promises to fulfill an obligation “I’ll pay you ₱20,000
immediately, but it will it is effective now “when his means permit him to do when I have the
end or be extinguished but ends once Bea so” or “when he is able,” the law means,” this is not
once a certain event gets married.
considers that obligation as one with conditional (since it
happens.
a period (a time limit) — not a doesn’t depend on
condition. uncertainty), but
with a period that
PURE OBLIGATION
This is because the obligation will depends on Pedro’s
• Is one which is not subject to any surely be performed, but the exact financial ability. If
conditions and no specific date is time depends on when the debtor years pass and Pedro
mentioned for its fulfillment and is, becomes financially capable. still hasn’t paid, Ana
thereof, immediately demandable. However, this does not mean the may go to court, and
debtor can delay payment forever. If the judge can set a
CONDITIONAL OBLIGATION too much time passes and the deadline for Pedro
debtor still doesn’t pay, the court to pay.
• Is one whose consequences are subject may fix a definite period for
in one way or another to the fulfillment payment.
of a condition.

CONDITION Period – is a future and certain event upon the

arrival of which the obligation subject to it
• Is a future and uncertain event, upon
either arises or is extinguished.
the happening of which, the acquisition
or extinguishment of an obligation
subject to it depends.
Article 1181. In conditional obligations, the
Characteristics of A Condition acquisition of rights, as well as the
extinguishment or loss of those already
1. Future and uncertain
acquired, shall depend upon the happening of
2. Past but unknown
the event which constitutes the condition.
 EXPLANATION EXAMPLE E If Ana says, “I’ll pay Bea ₱10,000 if I feel like
In a conditional Suspensive: If Ana X it,” this is void, because the fulfillment
obligation, the promises to give Bea A depends only on Ana’s will.
effect or ₱10,000 if Bea passes the M
performance of the exam, Ana’s obligation P But if Ana says, “I’ll pay Bea ₱10,000 if it
obligation depends starts only if Bea passes. L rains tomorrow,” this is valid, because it
on a condition — a E depends on chance.
future and uncertain Resolutory: If Bea lets
event. The obligation Ana live in her house Or if Ana says, “I’ll pay Bea ₱10,000 if Carlos
becomes effective until Bea leaves for agrees,” this is also valid, since it depends on
only when the abroad, the right to stay a third person.
condition happens. ends when Bea leaves.

Effect of happening of condition Classification of Conditions

1. Acquisition of right Conditions may be classified as follows:

2. Loss of rights already acquired
1. As to effect:
a. Suspensive - the happening of which
gives rise to the obligation; and
Article 1182. When the fulfillment of the b. Resolutory - the happening of which
condition depends upon the sole will of the extinguishes the obligation.
debtor, the conditional obligation shall be void.
If it depends upon chance or upon the will of a 2. As to form:
third person, the obligation shall take effect in a. Express - the condition is clearly
conformity with the provisions of this Code. stated; and
E if a condition in an obligation depends b. Implied - the condition is merely
X entirely on the will of the debtor, the inferred.
P obligation is void — meaning it has no legal
L effect. This is because the debtor could 3. As to possibility
A simply choose never to fulfill the condition, a. Possible - the condition is capable of
N making the obligation meaningless. fulfillment, legally and physically; and
A b. Impossible - the condition is not
T However, if the condition depends on chance capable of fulfillment, legally or
I (something uncertain, like luck or nature) or physically.
O on the will of a third person, the obligation is
N valid. This is because the outcome does not
4. As to cause or origin:
depend only on the debtor’s decision.
a. Potestative - the condition depends
There are two kinds of conditions based on upon the will of one of the
who controls them: contracting parties;
1. Potestative Condition (Debtor’s b. Casual - the condition depends upon
Will) – Invalid if it depends solely on chance or upon the will of a third
the debtor. person; and
2. Casual or Third-Person Condition –
Valid because it depends on chance
or someone else’s decision.
 c. Mixed - the condition depends partly
upon chance and partly upon the will
on something that cannot happen, impossible. If Ana
of a third person.
is against good promises to pay Bea
Morals, or violates the law. ₱5,000 if Bea steals a
5. As to mode: car, that is void
a. Positive - the condition consists in the However, if the obligation can be because it is against
performance of an act; and divided and only one part of it is the law and morals.
b. Negative - the condition consists in impossible or illegal, the valid part But if Ana promises
the omission of an act. remains enforceable. Also, if the not to fly without
condition is simply not to do wings, that condition
6. As to numbers: something impossible, the law is ignored, since it is
a. Conjunctive - there are several treats it as if that condition was impossible from the
conditions and all must be fulfilled; never included in the first place. start.
and
b. Disjunctive - there are several Two Kinds of Impossible Condition
conditions and only one or some of
them must be fulfilled. 1. Physically impossible conditions –
when they, n nature of things, cannot
7. As to divisibility: exist or cannot be done.
a. Divisible - the condition is susceptible 2. Legally impossible conditions – when
of partial performance; and they are contrary to law, morals, good
b. Indivisible - the condition is not customs, public order, or public policy.
susceptible of partial performance.

Article 1184. The condition that some event

Article 1183. Impossible conditions, those happen at a determinate time shall extinguish
contrary to good customs or public policy and the obligation as soon as the time expires or if
those prohibited by law shall annul the it has become indubitable that the event will
obligation which depends upon them. If the not take place.
obligation is divisible, that part thereof which
EXPLANATION EXAMPLE
is not affected by the impossible or unlawful
When an obligation depends on If Ana promises to give
condition shall be valid. The condition not to the happening of an event within Bea ₱10,000 if Bea
do an impossible thing shall be considered as a specific time, the obligation will passes the exam within
not having been agreed upon. end once that time has passed — this year, then Bea must
or if it becomes certain that the pass before the year
EXPLANATION EXAMPLE
event will not happen. ends. If the year ends
If an obligation depends on If Ana promises
In other words, the obligation is and Bea did not pass, or
a condition that is to give Bea
valid only while there is still a if Bea is expelled before
impossible, illegal, or ₱10,000 if Bea
chance for the event to occur. she could take the
immoral, the whole can touch the
Once the deadline passes or the exam, the obligation is
obligation becomes void or moon, the
event becomes impossible, the extinguished because
without effect. The law obligation is void,
obligation is extinguished (no the event can no longer
does not recognize because the
longer valid) happen.
obligations that are based condition is
physically
POSITIVE CONDITION

• The happening of an event at a

determinate time.