OBLICON PRELIM LESSON 3 Flashcards
___. ____. 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. (1101)
Art. 1170.
___. ____. Responsibility arising from fraud is demandable in all
obligations. Any waiver of an action for future fraud is void. (1102a)
Art. 1171.
___. ____. 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. (1103)
Art. 1172.
4 GROUNDS FOR LIABILITY TO BE ENTITLED FOR DAMAGES
- FRAUD
- NEGLIGENCE (Fault or Culpa)
- DELAY (Mora)
- CONTRAVENTION OF THE TERMS OF THE OBLIGATION
- -signify the money compensation awarded to a party for loss or injury
resulting from breach of contractual obligation by the other.
Damages
As to the intention to cause damage:
- There is deliberate intention to cause damage
FRAUD
As to the mitigation of liability:
- Liability cannot be mitigated
FRAUD
As to the waiver of future fraud:
- The waiver of future fraud Waiver for future fraud is void.
FRAUD
As to the intention to cause damage:
- There is no deliberate
intention to cause damage
or injury even if the act
was done voluntarily
NEGLIGENCE
As to the mitigation of liability:
- Liability may be mitigated
NEGLIGENCE
As to the waiver of future fraud:
- GR: Waiver for future
negligence may be
allowed in certain cases.
XPN: Nature of the
obligation or public policy
requires extraordinary
diligence. (e.g. common
NEGLIGENCE
- It is a deliberate or intentional evasion of the faithful performance of
the obligation (8 Manresa 72). - Malice or dishonesty; bad faith
FRAUD (Deceit or Dolo)
Nature:
- This is the essential cause of
the consent without which
the party would not have
agreed to enter into the
contract (NCC, Art. 1338)
Dolo causante (causal fraud)
Effect:
- It renders the contract voidable
Dolo causante (causal fraud)
Remedy:
- Annulment with damages.
Dolo causante (causal fraud)
Nature:
- This is the essential cause of
the consent without which
the party would not have
agreed to enter into the
contract (NCC, Art. 1338)
Dolo incidente (incidental fraud)
Effect:
- It does not affect the validity of the contract
Dolo incidente (incidental fraud)
Remedy:
- Contract remains valid. Remedy is claim for damages only.
Dolo incidente (incidental fraud)
- ___. ____. The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons,
of the time and of the place. When negligence shows bad faith, the
provisions of Articles 1171 and 2201, paragraph 2, shall apply. - If the law or contract does not state the diligence which is to be observed in
the performance, that which is expected of a good father of a family shall be
required. (1104a)
Art. 1173.
- 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. (Picart v. Smith, G.R. No. L-12219, March 15, 1918
Test of negligence
Factors to be considered
- Nature of the obligation
- Circumstances of the person
- Circumstances of time
- Circumstances of the place
- Stipulation of the parties
- In the absence of stipulation, that required by law in the particular
case (like the extraordinary diligence required of common carriers);
and
- In the absence of stipulation, that required by law in the particular
- If both the contract and law are silent, then the diligence expected
of a good father of a family.
- If both the contract and law are silent, then the diligence expected
Kinds of diligence required (Art.1173)
- ___. ____. Except in cases expressly specified by the law, or when it
is otherwise declared by stipulation, or when the nature of the
obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which,
though foreseen, were inevitable. (1105a)
Art. 1174.
- An occurrence or happening which could not be foreseen, or even if
foreseen, is inevitable (NCC, Art. 1174)
FORTUITOUS EVENT
- Cause of breach is independent of the will of the debtor;
- The Event is unforeseeable or unavoidable;
- Occurrence renders it absolutely impossible for the debtor to
fulfill his obligation in a normal manner - impossibility must be
absolute not partial, otherwise not force majeure; and
- Occurrence renders it absolutely impossible for the debtor to
- Debtor is free from any participation in the aggravation of the
injury to the creditor.
- Debtor is free from any participation in the aggravation of the
Requisites to be a Fortuitous Event
Effects of fortuitous events
- On determinate obligation – The obligation is extinguished.
- On generic obligation – The obligation is not extinguished (genus
nun quam peruit – genus never perishes).
- On generic obligation – The obligation is not extinguished (genus
The obligation is extinguished.
- On determinate obligation
The obligation is not extinguished (genus
nun quam peruit – genus never perishes).
- On generic obligation
- ___. ____. Usurious transactions shall be governed by special laws. (n)
Art. 1175.
- ___. ____. The receipt of the principal by the creditor without
reservation with respect to the interest, shall give rise to the
presumption that said interest has been paid. - The receipt of a later installment of a debt without reservation as to prior
installments, shall likewise raise the presumption that such installments
have been paid. (1110a)
Art. 1176
is contracting for or receiving interest in excess of the amount
allowed by law for the loan or use of money, goods, chattels or
credits.
USURY
- ___. ____. Every obligation whose performance does not depend
upon a future or 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. (1113)
Art. 1179.
- An obligation whose performance does not depend upon a future or
uncertain event, or upon a past event or upon a past event unknown
to the parties, demandable at once (NCC, Art. 1179).
Pure Obligation
- An obligation subject to a condition and the effectivity of which is
subordinated to the fulfillment or non-fulfillment of a future and
uncertain event, or upon a past event unknown to the parties
(Pineda, 2000).
Conditional obligation
- A condition is an event which is future and uncertain, upon which the
efficacy or extinguishment of an obligation depends. - It has two requisites: first, futurity; and second, uncertainty.
- A condition must not be impossible (Art.1183)
Condition
- An uncertain but past event itself can never constitute a condition
because in order to be classified as a condition, the requisites of
futurity and uncertainty are required. Neither can it constitute a term
or period because in order to be classified as a term or period, the
requisites of futurity and certainty are required. But the proof or
ascertainment of the fact or event, as distinguished from the fact or
event itself may either constitute a condition or a term depending
upon the circumstances of each case (Jurado, 2009).
Past but Unknown
Two Principal Kinds of Condition
- SUSPENSIVE CONDITION
- RESOLUTORY CONDITION
the happening or fulfillment of which
will give rise to an obligation (or right). The demandability of the
obligation is suspended until the happening of the uncertain event
which constitutes the condition.
- SUSPENSIVE CONDITION
the happening or fulfillment of which will extinguish an obligation.
- RESOLUTORY CONDITION
Effect of fulfilment:
- Obligation arises or
becomes effective
SUSPENSIVE
CONDITION
Effect of nonfulfillment:
- If not fulfilled, no
juridical relation is
created.
SUSPENSIVE
CONDITION
When rights are acquired:
- Rights are not yet
acquired, but there is
hope or expectancy
that they will soon be
acquired.
SUSPENSIVE
CONDITION
Effect of fulfilment:
- Obligation is
extinguished.
RESOLUTORY
CONDITION
Effect of nonfulfillment:
- If not fulfilled, juridical
relation is
consolidated.
RESOLUTORY
CONDITION
When rights are acquired:
- Rights are already
vested, but subject to
the threat or danger of
extinction.
RESOLUTORY
CONDITION
Obligations which are demandable at once are:
- Pure
- Obligations with a resolutory condition; and
- Obligations with a resolutory term or period [NCC, Arts. 1179 (2)
and 1193 (2)]
- Obligations with a resolutory term or period [NCC, Arts. 1179 (2)
- ___. ____. When the debtor binds himself to pay when his means
permit him to do so, the obligation shall be deemed to be one with
a period, subject to the provisions of Article 1197. (n)
Art. 1180.
- Obligations for whose fulfillment a day certain has been fixed, shall
be demandable only when that day comes (NCC, Art. 1193). - Term or period
- A certain length of time which determines the effectivity or the
extinguishment of the obligations.
Obligation with a period or a term
Requisites of a valid period or term
- Future;
- Certain; and
- Possible, legally, and physically (Paras, 2008).
- ___. ____. In conditional obligations, the acquisition of rights, as
well as the extinguishment or loss of those already acquired, shall
depend upon the happening of the event which constitutes the
condition. (1114)
Art. 1181
in obligations subject to a suspensive
condition, the acquisition of rights by the creditor depends upon
the happening of the event or condition.
a. Acquisition of rights
in obligations subject to a
resolutory condition, the happening of the event which constitutes
the condition produces the extinguishment or loss of rights already
acquired.
b. Loss of rights already acquired
- ___. ____. When the fulfillment of the condition depends upon the
sole will of the debtor, the conditional obligation shall be void. If it
depends upon chance or upon the will of a third person, the
obligation shall take effect in conformity with the provisions of this
Code. (1115)
Art. 1182.
- A condition which depends upon the will of one of the contracting
parties (NCC, Art. 1182). - Depends on sole will of DEBTOR – the conditional obligation is VOID.
- Eg. “I will pay you when I want.” “I will pay you upon sale of my house.”
- Depends on sole of CREDITOR – valid
Potestative Condition
It is the performance or the fulfillment of the condition which depends
upon chance and/or the will of a third person.
- Causal condition
It is the performance or fulfillment of the condition which depends
partly upon the will of a party to the obligation and partly upon
chance and/or the will of a third person.
- NOTE: Casual and mixed conditions are valid, unlike purely
potestative conditions
- Mixed condition
- ___. ____. Impossible conditions, those contrary to good customs or
public policy and those prohibited by law shall annul the obligation
which depends upon them. If the obligation is divisible, that part
thereof which is not affected by the impossible or unlawful
condition shall be valid. - The condition not to do an impossible thing shall be considered as not
having been agreed upon. (1116a)
Art. 1183.
Two Kinds of Impossible Conditions
- Physically impossible conditions
- Legally impossible conditions
when they, in nature of things,
cannot exist or cannot be done.
- Physically impossible conditions
when they are contrary to law,
morals, good customs, public order, or public policy.
- Legally impossible conditions
- ___. ____. The condition that some event happen at a determinate
time shall extinguish the obligation as soon as the time expires or if
it has become indubitable that the event will not take place. (1117)
Art. 1184.
- ___. ____. The condition that some event will not happen at a
determinate time shall render the obligation effective from the
moment the time indicated has elapsed, or if it has become evident
that the event cannot occur. - If no time has been fixed, the condition shall be deemed fulfilled at such
time as may have probably been contemplated, bearing in mind the nature
of the obligation. (1118)
Art. 1185.
- ___. ____. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment. (1119)
Art. 1186.
- ___. ____. The effects of a conditional obligation to give, once the
condition has been fulfilled, shall retroact to the day of the constitution
of the obligation. Nevertheless, when the obligation imposes reciprocal
prestations upon the parties, the fruits and interests during the pendency
of the condition shall be deemed to have been mutually compensated. If
the obligation is unilateral, the debtor shall appropriate the fruits and
interests received, unless from the nature and circumstances of the
obligation it should be inferred that the intention of the person
constituting the same was different. - In obligations to do and not to do, the courts shall determine, in each case, the
retroactive effect of the condition that has been complied with. (1120)
Art. 1187.
- GR: Retroacts to the day of the constitution of the obligation.
- XPNs: There is no retroactive effect with respect to the fruits and
interest: - In reciprocal obligations, the fruits and interests shall be deemed to
have been mutually compensated; and
- In reciprocal obligations, the fruits and interests shall be deemed to
- In unilateral obligations, the debtor appropriates the fruits and
interest received before the fulfillment of the condition unless
contrary to the intention of the parties (NCC, Art. 1187). 2
- In unilateral obligations, the debtor appropriates the fruits and
- Real obligations
the court determines the retroactive effect of
the condition fulfilled (NCC, Art. 1187).
- Personal obligations
- ___. ____. The creditor may, before the fulfillment of the condition,
bring the appropriate actions for the preservation of his right. - The debtor may recover what during the same time he has paid by mistake
in case of a suspensive condition. (1121a)
Art. 1188.
May bring the appropriate actions for the preservation of his
right (NCC, Art. 1188), such as:
* a. Action for prohibition/restraining the alienation of the thing pending the
happening of the suspensive condition;
* b. Petition for the annotation of the creditor’s right with the proper
registry;
* c. Action to demand security if the debtor has become insolvent;
* d. Action to set aside alienations made by the debtor in fraud of creditors;
or
* e. Action against adverse possessors to interrupt the running of
prescriptive period
Creditor
May recover what, during the same time, he has paid by
mistake in case of a suspensive condition (NCC, Art. 1188).
Debtor
- ___. ____. When the conditions have been imposed with the intention of
suspending the efficacy of an obligation to give, the following rules shall
be observed in case of the improvement, loss or deterioration of the
thing during the pendency of the condition: - (1) If the thing is lost without the fault of the debtor, the obligation shall be
extinguished; - (2) If the thing is lost through the fault of the debtor, he shall be obliged to pay
damages; it is understood that the thing is lost when it perishes, or goes out of
commerce, or disappears in such a way that its existence is unknown or it cannot
be recovered; - (3) When the thing deteriorates without the fault of the debtor, the impairment is
to be borne by the creditor; - (4) If it deteriorates through the fault of the debtor, the creditor may choose
between the rescission of the obligation and its fulfillment, with indemnity for
damages in either case; - (5) If the thing is improved by its nature, or by time, the improvement shall inure to
the benefit of the creditor; - (6) If it is improved at the expense of the debtor, he shall have no other right than
that granted to the usufructuary. (1122)
Art. 1189.
- ___. ____. When the conditions have for their
purpose the extinguishment of an obligation
to give, the parties, upon the fulfillment of
said conditions, shall return to each other
what they have received. - In case of the loss, deterioration or improvement
of the thing, the provisions which, with respect to
the debtor, are laid down in the preceding article
shall be applied to the party who is bound to
return. - As for the obligations to do and not to do, the
provisions of the second paragraph of Article 1187
shall be observed as regards the effect of the
extinguishment of the obligation. (1123)
Art. 1190.
A. The parties shall return to each other what they have received
(mutual restitution);
B. Obligation is extinguished;
C. In case of loss, deterioration or improvement of the thing, NCC, Art.
1189, with respect to the debtor, shall be applied to the party who is
bound to return (NCC, Art. 1190).
- Real obligations
The courts shall determine, in each case, the
retroactive effect of the condition that has been complied with. (NCC,
Art. 1187; NCC, Art. 1190).
- Personal obligations
- ___. ____. The power to rescind obligations is
implied in reciprocal ones, in case one of the
obligors should not comply with what is
incumbent upon him. - The injured party may choose between the fulfillment
and the rescission of the obligation, with the payment
of damages in either case. He may also seek rescission,
even after he has chosen fulfillment, if the latter
should become impossible. - The court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period. - This is understood to be without prejudice to the
rights of third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the
Mortgage Law. (1124)
Art. 1191
- The cancellation of the contract or reciprocal obligation in case of
substantial and material breach on the part of one, which breach is
violative of the reciprocity between the parties. This is properly called
resolution.
RESCISSION (RESOLUTION) (NCC, ART. 1191)
* The cancellation of the contract or reciprocal obligation in case of
substantial and material breach on the part of one, which breach is
violative of the reciprocity between the parties. This is properly called
resolution.
- Rescission or resolution is applicable in reciprocal obligations, since it
is implied therein.
Applicability
- ___. ____. In case both parties have
committed a breach of the obligation, the
liability of the first infractor shall be equitably
tempered by the courts. If it cannot be
determined which of the parties first violated
the contract, the same shall be deemed
extinguished, and each shall bear his own
damages. (n)
Art. 1192.
- ___. ____. Obligations for whose fulfillment a day certain has been
fixed, shall be demandable only when that day comes. - Obligations with a resolutory period take effect at once, but terminate upon
arrival of the day certain. - A day certain is understood to be that which must necessarily come,
although it may not be known when. - If the uncertainty consists in whether the day will come or not, the
obligation is conditional, and it shall be regulated by the rules of the
preceding Section. (1125a)
Art. 1193.
- A certain length of time which determines the effectivity or the
extinguishment of the obligations.
Term or period
- ___. ____. In case of loss, deterioration or
improvement of the thing before the arrival of
the day certain, the rules in Article 1189 shall be
observed. (n)
Art. 1194.
- ___. ____. Anything paid or delivered before the
arrival of the period, the obligor being unaware
of the period or believing that the obligation has
become due and demandable, may be recovered,
with the fruits and interests. (1126a)
Art. 1195.
- ___. ____. Whenever in an obligation a period is
designated, it is presumed to have been
established for the benefit of both the creditor
and the debtor, unless from the tenor of the
same or other circumstances it should appear
that the period has been established in favor of
one or of the other. (1127)
Art. 1196.
- ___. ____. If the obligation does not fix a
period, but from its nature and the
circumstances it can be inferred that a period
was intended, the courts may fix the duration
thereof. - The courts shall also fix the duration of the period
when it depends upon the will of the debtor. - In every case, the courts shall determine such
period as may under the circumstances have been
probably contemplated by the parties. Once fixed
by the courts, the period cannot be changed by
them. (1128a)
Art. 1197.
- ___. ____. The debtor shall lose every right to
make use of the period: - (1) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or
security for the debt; - (2) When he does not furnish to the creditor the
guaranties or securities which he has promised; - (3) When by his own acts he has impaired said
guaranties or securities after their establishment, and
when through a fortuitous event they disappear,
unless he immediately gives new ones equally
satisfactory; - (4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period; - (5) When the debtor attempts to abscond. (1129a)
Art. 1198.
