OBLIGATIONS AND CONTRACTS

ART. 1156 An Obligation is a juridical necessity to give, to do or not to do.

A legal relation established between one person and another, whereby the latter is bound to the fulfillment of a prestation which the former may demand of him Manresa

Juridical relation created by virtue of certain facts between 2 or more persons whereby one of them, known as the creditor or obligee, may demand of the other, known as the debtor or obligor, a definite prestation.

Juridical tie between persons

The right to demand the object of the obligation is a credit, and the duty to give, to do or not to do is a debt.

ELEMENTS/REQUISITES of an Obligation

1. ACTIVE SUBJECT

has the power to demand prestation

oblige or creditor

has the juridical capacity given by law

2. PASSIVE SUBJECT

Bound to perform the prestation

Obligor/creditor

Has the capacity to act

3. OBJECT/PRESTATION

Fact, prestation or service

4. JURIDICAL TIE/EFFICIENT CAUSE

binds the parties to the obligation which may arise from either bilateral or unilateral acts of persons

5. FORM*

In which obligation is manifested (not essential)

REQUISITES OF PRESTATION

1. It must be possible, physically and juridically

2. It must be determinate or at least determinable (sufficiently identifiable) according to pre-established elements or criteria

3. It must have possible equivalent in money

If they do not have economic value in themselves (an object of purely moral interests), the law attributes to them that value, following a criterion of ideal justice;

Otherwise, many obligations contracted everyday in our social life would be carried into the juridical field although nobody ever thinks of making them effective through judicial action

EFFICIENT CAUSE/JURIDICAL TIE

The vinculum which may either be a relationship established:

1. By law

2. By bilateral acts

3. By unilateral acts

If you cant point the source of obligation, there is no cause of action

ART. 1423 Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the following articles.

Obligations without a sanction, susceptible of voluntary performance, but not through compulsion by legal means;

Whereas, civil obligations are based on positive law, and are enforceable in court

ART. 1424 When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what has been delivered or the value of the service he has rendered.

ART. 1425 When without the knowledge or against the will of the debtor, a third person pays a debt which the obligor is not legally bound to pay because the action thereon has prescribed but the debtor latterly voluntarily reimburses the third person, the obligor cannot recover what has been paid.

ART. 1426 and ART. 1427 are obsolete.

ART. 1428 When, after an action to enforce a civil obligation has failed, the defendant voluntarily performs the obligation, he cannot demand the return of what he has delivered or the payment of the value of the service he has rendered.

ART. 1429 When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the property which he received by will or by the law of intestacy from the estate of the deceased, the payment is valid and cannot be rescinded by the payer.

ART. 1430 When a will is declared void because it has not been executed in accordance with the formalities required by law, but one of the intestate heirs, after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable.

ART. 1106 By prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.

ART. 1144 The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.(n)

ART. 1145 The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract.(n)

ART. 1146 The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year.(As amended by PD No. 1755, Dec. 24, 1980.)

ART. 1147 The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation.(n)

ART. 1148 The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147 are without prejudice to those specified in other parts of this Code, in the Code of Commerce, and in special laws.(n)

ART. 1149 All other actions whose periods are not fixed in this Code or in other laws must be brought within five years from the time the right of action accrues.(n)

ART. 1150 The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought.(1969)

ART. 1151 The time for the prescription of actions which have for their object the enforcement of obligations to pay principal with interest or annuity runs from the last payment of the annuity or of the interest.(1970a)

ART. 1152 The period for prescription of actions to demand the fulfillment of obligation declared by a judgment commences from the time the judgment became final.(1971)

ART. 1153 The period for prescription of actions to demand accounting runs from the day the persons who should render the same cease in their functions.

The period for the action arising from the result of the accounting runs from the date when said result was recognized by agreement of the interested parties.(1972)

ART. 1154 The period during which the obligee was prevented by a fortuitous event from enforcing his right is not reckoned against him.(n)

ART. 1155 The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.(1973a)

ART. 1157 Obligations arise from:

1. Law

2. Contracts

3. Quasi-contracts

4. Acts or omissions punished by law

5. Quasi-delicts

LAW

ART. 1158 Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this book.

Only those expressly determined in the Civil Code or in special laws are demandable

These obligations shall be regulated by the precepts of the law which establishes them, and as to what has not been foreseen, by the provisions of Book IV of the Civil Code (laws on obligations).

In the birth or generation of an obligation, there is always a concurrence between the law which establishes or recognizes it and an act or condition upon which the obligation is based or predicated.

According to Manresa, when the law establishes the obligation and the act or condition upon which it is based is nothing more than a factor for determining the moment when it becomes demandable, then the law itself is the source of the obligation.

However, when the law merely recognizes or acknowledges the existence of an obligation generated by an act which may constitute a contract, a quasi-contract, criminal offense or quasi-delict and its only purpose is to regulated such obligation, then the act itself is the source of the obligation and not the law.

CONTRACTS

ART. 1159 Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

ART. 1305 A 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. (1254a)

A contract is a meeting of minds between 2 persons whereby one binds himself, with respect to the other, to give something or to render some service.

Agreement on the declaration of a common will

A bilateral legal transaction to create, modify or terminate a legal tie between parties

Restrictive definition: excluding cases of reciprocal prestations

Sanchez Roman: A juridical convention manifested in legal form, by virtue of which one or more persons bind themselves in favor of another or others, or reciprocally, to the fulfillment of a prestation to give, to do or not to do.

As a rule, contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all of the consequences which according o their nature may be in keeping with good faith, usage and law. (consensual contracts)

As a consensual relation, a contract must be shown to exist as a fact, clearly and convincingly

Once the contract is perfected, the valid contract has the force of law binding the parties to comply therewith in good faith, where neither one may renege therefrom without the consent of the other.

1. A contract created obligations which are more particular, concrete and transitory, because it establishes a relation which is more limited by reason of persons, effects and importance

2. In contract, the freedom to stipulate predominates over the necessity of the act; in other words, the intention of the parties is the determining factor in contracts, while the meeting of the minds is merely secondary in the other acts.

3. The law is the principal source of rights and obligations in the other acts mentioned but in contracts the law has only a suppletory effect.

PERFECT PROMISE merely tends to assure and pave the way for the celebration of a contract in the future

IMPERFECT PROMISE also designated as policitation, constitutes a mere unaccepted offer

PACT a special part of the contract, sometimes merely incidental and separable from the principal agreement

STIPULATION similar to a pact; when the contract is in an instrument, stipulation refers to the essential and dispositive part, as distinguished from the exposition of the facts and antecedents upon which it is based.

DEAD PARTY no contract

CORP. W/O LEGAL EXISTENCE no contract

HUSBAND AND WIFE cannot sell to each other to protect conjugal partnership; can enter into a contract of agency

AUTO-CONTRCATS

validity is generally accepted

effective element is not in the formation of the will but in its declaration

2 declarations made by the same person

As long as there are distinct patrimonies

When a person, in his capacity as representative of another, contracts with himself

When as a representative of 2 different persons, he brings about a contract between his principals by contracting with himself

CONTRACT OF ADHESION No suppression

CHARACTERISTICS OF CONTRACTS

1. Obligatory force

2. Mutuality

3. Autonomy of contracts

4. Relativity

STAGES OF CONTRACT

1. PREPARATION, CONCEPTION OR GENERATION period of negotiation, bargaining, ending at the moment of agreement

2. PERFECTION OR BIRTH OF CONTRACT the moment when the parties come to agree on the terms of contract

3. CONSUMMATION OR DEATH the fulfillment or performance of the terms agreed upon in the contract

CLASSIFICATION OF CONTRACTS:

1. According to degree of dependence: principal, preparatory, accessory

2. According to perfection: consensual, real

3. According to solemnity or form: common/informal, special/formal

4. According to purpose: transfer of ownership, conveyance of use, rendition of service

5. According to subject matter: things, service

6. According to nature of obligation: unilateral, bilateral

7. According to their cause: onerous, gratutitous/lucrative

8. According to risk: commutative, aleatory

9. According to their names/norms that regulate them: nominate, innominate

ELEMENTS OF CONTRACTS

1. ESSENTIAL (Common, special, extraordinary)

Those without which there can be no contract: consent, subject matter, cause, and complete offer and acceptance

Offer + acceptance = juridical tie

Offer must be: certain, definitive, determinable, physically possible and complete with specifics, i.e., stipulations

Advertisement: incomplete, not an offer

Acceptance (consent) must be: absolute and unconditional

2. NATURAL

Those which exist as part of the contract even if the parties do not provide for them, because the law, as suppletory to the contract, creates them; the warranty against eviction in the contract of purchase and sale is an example

3. ACCIDENTAL

Those which are agreed upon by the parties and which cannot exist without being stipulated

ART. 1306 The contracting parties may establish such stipulations, causes, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Freedom to contract is both a conditional and statutory right; not absolute

QUASI-CONTRACTS

ART. 1160 Obligations derived from quasi-contracts shall be subject to the provisions of Chapter I, Title XVII of this Book

ART. 2142 Certain lawful, voluntary, and unilateral acts give rise to juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.

ART. 2143 The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may come within the purview of the preceding article. (n)

Based on the presumed will or intent of the obligor dictated by equity and the principles of absolute justice

Agrees to that which benefits him

Nobody wants to be enriched at the expense of others

In accordance to the Golden Rule

Juridical relation which arises from certain acts that are:

Lawful (against crimes)

Voluntary (against quasi-delict which is based on negligence and lack of foresight)

Unilateral (just one party)

KINDS OF QUASI-CONTRACT

1. NEGOTORIUM GESTIO (officious management)

ART. 2144 Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. This juridical relation does not arise in either of these instances:

1. When the property or business is not neglected or abandoned;

2. If in fact the manager has been tacitly authorized by the owner

In the first case, the provisions of Art. 1317, 1403, No. 1, and 1404 regarding unauthorized contracts shall govern.

In the second case, the rules on agency in Title X of this Book shall be applicable.

CONDITIONS:

1. That it relate to determined things or affairs, and that there be no administrator or representative of the owner who is charged with the management thereof;

2. That it be foreign to all idea of express tacit mandate on the part of the owner, for it very often may happen even without his knowledge; and

3. That the actor be inspired by the beneficient idea of adverting losses and damages to the owner or to the interested party because of the abandonment of the things that belong to him or of the business in which he may be interested, that is, that thee administrator shall not undertake the matter in the hope of obtaining profit, or, as stated in the Partidas, with the avaricious idea of gain.

Necessary that the business should already be in existence at the time of the officious management

Gestor should not be acting under the mistake that the business or property is his

Does not arise when the owner prohibited management, if management is however assumed in spite of the prohibition, and beneficial effects are derived therefrom, gestor must be reimbursed only to the extent that the owner was benefited

ART. 2145 The officious manager shall perform his duties with all the diligence of a good father of a family, and pay the damages which through his fault or negligence may be suffered by the owner of the property or business under management.

The courts may, however, increase or moderate the indemnity according to the circumstances of each case.

ART. 2146 If the officious manager delegates to another person all or some of his duties, he shall be liable for the acts of the delegate, without prejudice to the direct obligation of the latter toward the owner of the business.

The responsibility of 2 or more officious managers shall be solidary, unless the management was assumed to save the thing or business from imminent danger.

ART. 2147 The officious manager shall be liable for any fortuitous event:

1. If he undertakes risky operations which the owner was not accustomed to embark upon

2. If he has preferred his own interest to that of the owner

3. If he fails to return the property or business after demand by the owner

4. If he assumed the management in bad faith

ART 2148 Except when the management was assumed to save the property or business from imminent danger, the officious manager shall be liable for fortuitous events:

1. If he is manifestly unfit to carry on the management

2. If by his intervention he prevented a more competent person from taking up the management

ART. 2149 The ratification of the management by the owner of the business produces the effects of an express agency, even if the business may not have been successful.

ART. 2150 Although the Officious management may not have been expressly ratified, the owner of the property or business who enjoys the advantage of the same shall be liable for obligations incurred in his interest, and shall reimburse the officious manager for the necessary and useful expenses and for the damages which the latter may have suffered in the performance of his duties.

The same obligation shall be incumbent upon him when the management had for its purpose the prevention of an imminent and manifest loss, although no benefit may have been derived.

Gestor must make an accounting of his management to the owner, which is necessary to determine the amounts to be reimbursed to him, and the indemnities for which he may be liable.

The obligation imposed upon the owner by this article is applicable to a minor. A minor, although usually incapable of contracting or binding himself, cannot disavow the efficacy of the contracted obligation when it redounds to his benefit, because the principle that no one may enrich himself to the prejudice of another.

ART. 2151 Even though the owner did not derive any benefit and there has been no imminent and manifest danger to the property or business, the owner is liable as under the 1st paragraph of the preceding article, provided:

1. The officious manager has acted in good faith; and

2. The property or business is intact, ready to be returned to the owner.

ART. 2152 The officious manager is personally liable for contracts which he has entered into with 3rd persons, even though he acted in the name of the owner, and there shall be no right of action between the owner and 3rd persons. These provisions shall not apply:

1. If the owner has expressly or tacitly ratified the management; or

2. When the contract refers to things pertaining to the owner of the business.

ART. 2153 The management is extinguished:

1. When the owner repudiates it or puts and end thereto;

2. When the officious manager withdraws from the management, subject to the provisions of Art. 2144.

3. By the death, civil interdiction, insanity or insolvency of the owner or the officious manager.

2. SOLUTIO INDEBITI (payment not due)

ART. 2154 If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.

REQUISITES:

1. Where a payment is made when there exists no binding relations between the payor, who has no duty to pay, and the person who received the payment.

2. The payment is made through mistake, and not liberality or some other cause

CAUSES:

1. Debt of conscience

2. Natural obligation

If there has been no receipt of a thing, there is no solution indebiti.

ART. 2155 Payment by reason of a mistake in the construction or application of a doubtful or difficult question of law may come within the scope of the preceding article.

Whether the question is doubtful or difficult or not, must be determined by the actual knowledge of law of the person who made the payment. Even if the law would be very clear to a lawyer, but is actually unknown to the payor, then the payee would still derive unjust enrichment and should return what he has received.

ART 2156 If the payor was in doubt whether the debt was due, he may recover if he proves that it was not due.

ART. 2157 The responsibility of 2 or more payees, when there has been payment of what is not due, is solidary.

ART. 2158 When the property delivered or money paid belongs to a 3rd person, the payee shall comply with the provisions of Art. 1984.

ART. 2159 Whoever in bad faith accepts an undue payment, shall pay legal interest if a sum of money is involved, or shall be liable for fruits received or which should have been received if the thing produces fruits.

He shall furthermore be answerable for any loss or impairment of the thing from any cause and for damages to the person who delivered the thing, until it is recovered.

ART. 2160 He who in good faith accepts an undue payment of a thing certain and determinate shall only be responsible for the impairment or loss of the same or its accessories and accessions insofar as he has thereby been benefited. If he has alienated it, he shall return the price or assign the action to collect the sum.

ART. 2162 He shall be exempt from the obligation to restore who, believing in good faith that the payment was being made of a legitimate and subsisting claim, destroyed the document, or allowed the action to prescribe, or gave up the pledges, or cancelled the guarantee for his right. He who paid unduly may proceed only against the true debtor or the guarantors with regard to whom the action is still effective.

Arbitrarily saves the creditor from the effects of his own error, and heaps all the advantageous consequences upon the person who paid by mistake, giving him only some kind of legal subrogation, which in most cases may prove illusory as when the action against the true debtor and his sureties has lapsed.

ART. 2163 It is presumed that there was a mistake in the payment of something which had never been due or had already been paid was delivered; but he from whom return is claimed may prove that the delivery was made out of liberality or of any other just cause.

Cause is used to refer to some reason for the payment, which bars an action to recover, such as a debt of conscience or a natural obligation.

OTHER QUASI-CONTRACTS:

ART. 2164 When without the knowledge of the person obliged to give support, it is given by a stranger, the latter shall have a right to claim the same from the former, unless it appears that he gave it out of piety and without intention of being repaid.

ART. 2165 When funeral expenses are borne by a 3rd person, without the knowledge of those relatives who were obliged to give support to the deceased, said relatives shall reimburse the 3rd person, should the latter claim reimbursement.

ART. 2166 When the person obliged to support an orphan, or an insane or other indigent person unjustly refuses to give support to the latter, any 3rd person may furnish support to the needy individual, with right of reimbursement from the person obliged to give support. The provisions of this article apply when the father or mother of a child under 18 years of age unjustly refuses to support him.

ART. 2167 When through an accident or other cause a person is injured or becomes seriously ill, and he is treated or helped while he is not in a condition to give consent to a contract, he shall be liable to pay for the services of the physician or other person aiding him, unless the service has been rendered out of pure generosity.

ART. 2168 When during a fire, flood, storm, 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. 2169 When the government, upon the failure of any person to comply with health or safety regulations concerning property, undertakes to do the necessary work, even over his objection, he shall be liable to pay the expenses.

ART. 2170 When by accident or other fortuitous event, movables separately pertaining to 2 or more persons are commingled or confused, the rules on co-ownership shall be applicable.

ART. 2171 The rights and obligations of the finder of lost personal property shall be governed by Arts. 719 and 720.

ART. 2172 The right of every possessor in good faith to reimbursement for necessary and useful expenses is governed by Art. 546

ART. 2173 When a 3rd person, without the knowledge of the debtor, pays the debt, the rights of the former are governed by Arts. 1236 (recover what has been beneficial to debtor) and 1237 (cannot compel creditor to subrogate payor in his rights).

ART. 2174 When in a small community, a nationality of the inhabitants of age decide upon a measure for protection against lawlessness, fire, flood, storm, or other calamity, any one who objects to the plan and refuses to contribute to the expenses but is benefited by the project as executed shall be liable to pay his share of said expenses.

ART. 2175 Any person who is constrained to pay the taxes of another shall be entitled to reimbursement from the latter.

ACTS OR OMISSIONS PUNISHED BY LAW (Ex-delicto, Ex-maleficio, Culpa Criminal)

ART. 1161 Civil obligations arising from criminal offense shall be governed by penal laws, subject to the provisions of ART. 2177, and of the pertinent provisions of Chapter 2, Preliminary Title on Human Relations and of Title XVIII of this Book, regulating damages.

ART. 2177 Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant.

ART. 100, RPC Every person criminally liable is also civilly liable.

As a rule, every person liable for a felony is also civilly liable although these 2 aspects are separate and distinct from each other in the sense that one affects the social order and the other, private rights, so that the purpose of the first is to punish or correct the offender, while the purpose of the second is to repair the damages suffered by the aggrieved party, it is evident that the basis of the civil liability is the criminal liability itself.

There are offenses and special crimes without civil liability such as: treason, rebellion, illegal possession of firearm, and gambling. But a person who is not criminally liable may still be civilly liable.

Reason: Commission of crimes case not only moral but also material damage.

ART. 12, RPC Exempting circumstances do not incur criminal liability:

Imbecile or insane person, unless acting in a lucid interval

Person under 9 years of age

Person over 9 years of age and under 15, unless acting with discernment

Acting under compulsion of an irresistible force

Acting under impulse of an uncontrollable fear of an equal or greater injury

Exceptions (Crimes without civil liability)

Criminal Contempt

Gambling

Traffic Violations

Subsidiary liability for crime:

Innkeepers, tavernkeepers, and any other persons or corporations shall be civilly liable for crimes committed in their establishment, in all cases where a violation of municipal ordinances or some general or special police regulation shall have been committed by them or their employees.

Also applicable to employers, teachers, persons and corporations engaged in any kind of industry for felonies committed by their servants, pupils, apprentices, or employees in the discharge of their duties.

To hold employers subsidiarily liable for crime of an employee: committed in the performance of the duties or functions of the employee.

But if action is based on contract, and not upon previous conviction of an employee for a crime, employers liability is primary and independent, not merely subsidiary.

Extent of Civil Liability

ART. 104, RPC What is included in civil liability

1. Restitution the thing itself is restored (ART. 105, RPC)

2. Reparation of damage caused court determines amount of damage (ART. 106, RPC)

3. Indemnification for consequential damages not only caused the 3rd party but also those suffered by his family or by a 3rd person by reason of the crime (ART. 107, RPC)

Civil liability for crimes is extinguished the same causes provided in the Civil Code for the extinguishment of other obligations.

General rule: criminal action vars civil action for the same offense

Civil action for recovery of civil liability arising from the offense is impliedly instituted with the criminal action

EXCEPTIONS:

Offended party reserves the right to institute it separately

The law provides for an independent civil action

Obligations arising from act or omission claimed to be criminal (Art. 31)

Violations of constitutional rights and liberties of individuals (Art. 32)

Defamation, fraud, or physical injuries (Art. 33)

Refusal or failure of members of police force to render protection to life or property ( Art. 34)

Enforcement of Civil Liability:

Institution of criminal and civil actions when a criminal action is instituted, the civil action for recovery of civil liability arising from the offense charged is impliedly instituted with the criminal action unless the offended party:

Expressly waives civil action

Reserves his right to institute it separately

Institutes the civil action prior to the criminal action

Independent Civil action may be brought by the injured party during the pendency of the criminal case, provided the right is reserved. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence.

Other civil actions arising from offenses in all cases not included in the preceding rules, the following rules are observed:

Criminal and civil actions arising from the same offense may be instituted separately, but after the criminal action has been commenced, the civil action cannot be instituted until final judgment has been rendered in the criminal action;

If the civil action has been filed ahead of the criminal action, and the criminal action is subsequently commences, the civil action shall be suspended in whatever stage before final judgment it may be found, until final judgment in criminal action has been rendered. However, if no final judgment has been rendered by the trial court in the civil action, the same may be consolidated with the criminal action upon application with the court trying the criminal action. If the application is granted, the evidence prevented and admitted in the civil action shall be deemed automatically reproduced in the criminal action, without prejudice to the admission of additional evidence that any party may wish to present. In case of consolidation, both the criminal and the civil action shall be tried and decided jointly.

Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. In other cases, the person entitled to the civil action may institute it in the jurisdiction and in the manner provided by law against the person who may be liable for restitution of the thing and reparation or indemnity for the damage suffered.

Judgment in civil action not a bar a final judgment in a civil action absolving the defendant from civil liability is no bar to a criminal action.

Suspension by reason of prejudicial question a petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the fiscal (prosecutor) or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any time before the prosecution rests.

Elements:

The previously instituted civil action which involves an issue similar or intimately related to the issue raised in the subsequent criminal action; and

The resolution of such issue determines whether or not the criminal action may proceed.

Effect of acquittal if acquittal of the accused is based on the ground that his guilt has not been proved beyond reasonable doubt, a civil action to recover damages on the same act or omission may still be instituted (preponderance of evidence to recover from defendant). On the other hand, if the acquittal is based on the ground that he did not commit the offense charged, or what amounts to the same things, if the acquittal proceeds from a declaration in a final judgment that the fact from which the civil liability might arise did not exist, the subsequent institution of a civil action to recover damages is, as a rule, no longer possible.

Effect of independent civil actions as a rule, the civil action to recover damages from the person criminally liable is not independent from the criminal action. This is true even where it has, to a certain extent, been separated by the injured party from the criminal proceedings either by reserving his right to file a separate civil action or by commencing the action to recover damages ahead of the criminal action.

In the first, the right to file a civil action shall depend upon the result of the criminal action, while in the second, once the criminal action is instituted, the action to recover damages shall be suspended.

Exceptions:

1st, where the civil action is based on an obligation not arising from the act or omission complained of as a criminal offense or felony such action may proceed independently of the criminal action and regardless of the result of the latter (obligations arising from law, contract, quasi-contract, quasi-delict.)

2nd, where the law grants to the injured party the right to institute a civil action which is entirely separate and distinct from the criminal action. Five instances:

Interferences by public officers or employees or by private individuals with civil rights and liberties

Defamation

Fraud

Physical injuries

Refusal or neglect of a city or municipal police officer to render aid or protection in case of danger to life or property

QUASI-DELICTS (Quasi Ex-delicto, Quasi Ex-maleficio, Culpa Aquilana, Tort)

ART. 2176 Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done, such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this chapter.

ART. 1162 Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book and by special laws.

REQUISITES:

That there exists a damage or injury, which must be proved by the person claiming recovery

That there exists a wrongful act or omission imputable to the defendant by reason of his fault or negligence

That there be a direct relation of cause and effect between the damage or injury and the fault or negligence

That there must be no pre-existing contractual relation between the parties

The existence of a contract between the parties does not bar the commission of a quasi-delict, which may be independent of the contract or not in relation to it.

Basis: undisputable principle of equity; fault or negligence cannot prejudice anyone else besides its author and in no case should its consequences be borne by him who suffers the harm produced by such fault or negligence.

Man is responsible not only for his voluntary willful acts, but also for those acts performed with lack of foresight, care and diligence, which cause material harm to society or to other indivifuals

Covers all wrongful acts provided they do not constitute contractual breach or acts punishable as crimes, and it is extensive enough to include any rational conception of liability for tortuous acts likely to be developed in any society.

Fault or negligence which constitutes breach of contract are governed by Arts. 1170 to 1174, while fault or negligence constituting crimes, are governed by the ROC.

However, the same negligent act causing damages may produce civil liability arising from a crime under the RPC, or create an action for quasi-delict or culpa extra-contractual under the Civil Code, and the party seeking recovery is free to choose which remedy to enforce

Concept of Fault there is fault when a person acts in a manner contrary to what should have been done. The acts, the necessary care and precaution vary according to the matter involved; and even with respect to the same matter, according to the time. Only juridical fault, but not moral fault, gives rise to liability for damages. Lack of charity or altruism, constituting moral fault, does not constitute a quasi-delict. But while the law does not require charity or altruism, it requires prudence and care, considering the attendant circumstances.

Concept of Negligence Negligence 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 other person suffers injury. It is a relative or comparative, and not an absolute term and its application depends upon the situation of the parties and the reasonable degree of care and vigilance which the surrounding circumstances reasonably impose.

Mere intoxication is not negligence, nor does the mere fact of intoxication establish a want of ordinary care. If a persons conduct is characterized by a proper degree of care and prudence, it is immaterial whether he is drunk or sober.

Test of Negligence Would a prudent man, in the position of the person to whom negligence is attributed foresee harm to the person injured as a reasonable consequence of the course about to be pursued? If so, the law imposes a duty on the actor to refrain from that course or to take precaution against its mischievous results, and the failure to do so constitutes negligence. Reasonable foresight of harm, followed by the ignoring of the admonition born of his prevision, is the constitutive fact of negligence.

Not determined by the personal judgment of the actor in a given situation but by the law.

Elements of Negligence:

Duty on the part of the defendant to protect the plaintiff from injury of which the latter complains

Failure to perform such duty

An injury to the plaintiff through such failure

Kinds of Negligence:

Culpa aquilana or culpa extra-contractual; negligence as a source of obligation, a quasi-delict

Culpa contractual negligence in the performance of a contract

Culpa criminal criminal negligence

Burden of proving Negligence Before judgment for damages can be entered in actions on negligence; the fact of negligence must be affirmatively established by competent evidence. The person who alleges the negligence must prove it, because the general presumption is that men act with care and prudence. If no negligence is proved, the action must be dismissed.

Liability for Inanimate Objects the liability of owners or possessors of inanimate objects for injuries caused by such objects, may be based on any of the ff principles:

That the owner or possessor is liable, if he is proved to be negligent

That the liability of the owner springs from his right of ownership, without regard to his negligence

That the liability exists by the reversal of the burden of proof, or that the owner is liable, unless he proves that he is free from negligence

That there is an assumed risk whenever a person uses an object which can cause injury, and the resulting liability for the injury cannot be avoided by proof that there was no fault or negligence on his part.

No hard and fast rule with respect to liability for inanimate objects

Defects of things There is negligence when a person fails to remedy the defects of a thing owned or used by him, or omits to take the precautions necessary to avoid their consequences, and he cannot exempt himself from liability by alleging that the thing was already in such condition when he acquired it.

When Damages are not recoverable:

When the conduct is not anti-juridical, as when there is a justification, like the state of necessity;

When there is no imputability, as when the damages are caused by an insane person;

When the injured party is at fault;

When the cause of damage is a fortuitous event;

When the act is in the performance of a duty or in the exercise of a right, unless there is abuse;

When the act is for the benefit of the injured or pursuant to his express presumed will (negotiorium gestio, emergency surgical operations);

When by an excusable error, the actor believed his act to be lawful;

When the actor is wanting in intelligence or freedom of will.

For the defense of force majeure to prosper, the accident must be due to natural causes and absolutely without human intervention.

CULPA AQUILANA VS CULPA CONTRACTUAL

CULPA AQUILANA

(culpa extra-contractual)

CULPA CONTRACTUAL

Governed by Art. 2176 to 2194

Governed by Art. 1179 et sequel

Negligence as a source of obligation

Negligence in the performance of a contract

Fault or negligence which constitutes an independent source of obligation between parties not previously bound

Fault or negligence of the debtor as an incident in the fulfillment of an existing obligation

Negligence of defendant should be the proximate cause of damage if liability is to attach

QUASI-DELICTS VS CRIMES

AS TO

QUASI-DELICT

CRIMES

Nature of right violated

An obligation can arise from both crime and quasi-delict at the same time (e.g. physical injuries) but can only recover damages once

Private Rights; wrong against the individual

Public Rights; wrong against the state

Condition of mind

Criminal intent is not necessary. Possible that there is no criminal charge but only civil liability for damages arising from quasi-delict

Criminal intent is necessary for the existence of liability, without it, there can be no crime.

Legal basis of liability

Actionable in any act or omission wherein fault or negligence intervenes

Not as broad as quas-delict, can be punished only when there is a penal law clearly penalizing it

Liability for damages

Liability for damages to the injured party

Certain crimes do not have civil liability e.g. contempt, gambling, violations of ordinances and traffic regulations when nobody is injured

Forms of redress

Reparation of the injury suffered by the injured party: compensation, indemnification

Fine (accruing to public treasury), imprisonment or both; punishment

Amount of evidence

Preponderance of evidence

Beyond reasonable doubt

Compromise

Can be compromised as any other civil liability

Can never be compromised

SIMILARITIES:

1. Fault/Negligence

2. Unlawful acts

3. Voluntary in nature

4. Results to damage

DOCTRINE OF PROXIMATE CAUSE

Such adequate and efficient cause as, in the natural order of events, under the particular circumstance surrounding the cause, would necessarily produce the event

NATURAL AND PROBABLE CAUSE

Either when it acts directly producing the injury, or sets in motion other causes so producing it and forming a continuous chain in natural sequence down to the injury

CONCURRENT CAUSE

If 2 causes operate at the same time to produce a result which might be produced by either independently of the other, each of them is a proximate cause

When the plaintiffs own negligence was the immediate and proximate cause of his injury, he cannot recover damages.

But if negligence is only contributory, the immediate and proximate cause of the injury is defendants lack of due care, the plaintiff may recover damages, the court shall mitigate the damages to be awarded. (ART. 2179)

LIABILITY FOR FAULT OF OTHERS Obligation arising from quasi-delict is demandable not only for ones own acts or omissions, but also for those persons for whom one is responsible.

ART. 2180 The obligation imposed by Art. 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible.

The father, and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company.

Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company.

The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

The state is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task properly pertains, in which case what is provided in Art. 2176 shall be applicable.

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody.

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.

Special (Substitute) Parental Authority

ART. 218, Family Code The school, its administrators and teachers, or the individual, entity or institution engaged in child shall have special parental authority and responsibility over the minor child while under their supervision, instruction or custody.

Authority and responsibility shall apply to all authorized activities whether inside or outside the premises of the school, entity or institution.

ART. 219, Family Code those given the authority and responsibility under the preceding article shall be principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor. The parents, judicial guardians or the persons exercising substitute parental authority over said minor shall be subsidiarily liable.

The respective liabilities of those referred to in the preceding paragraph shall not apply if it is proved that they exercised the proper diligence required under the particular circumstances.

All other cases not covered by this and the preceding article shall be governed by the provisions of the Civil Code on Quasi-delicts.

DILIGENCE OF EMPLOYERS An employer may be held civilly liable for the quasi-delict or crime of his employee.

LIABILITY OF EMPLOYERS FOR EMPLOYEES QUASI-DELICT (ART. 2180, CC)

LIABILITY OF EMPLOYERS FOR EMPLOYEES CRIME (ART. 103, RPC)

Primary, can be sued directly by the injured party and after he has paid the damages to such injured party, he can recover from his employee amount paid by him

Subsidiary, employee must have first been convicted and sentenced to pay civil indemnity and it must be shown that he is insolvent in order that employee may be liable

Employer can avoid liability by proving that he exercised the diligence of a good father of a family to prevent damage

Liability is absolute and cannot avail of the defense by proof of such diligence

All employers, whether they are engaged in some enterprise or not, are liable for the acts of their employees including house helpers

Employer is liable only when he is engaged in some kind of business or industry (during performance of duty)

Chapter 2

NATURE AND EFFECT OF OBLIGATIONS

Classification of Obligations:

REAL

Obligation to give

PERSONAL

Obligation to do, not to do

To do

Positive Personal

Not to do

Negative Personal

REAL OBLIGATIONS:

Specific or Determinate

When the object is particularly designated or physically segregated from all others of the same class.

Generic or Indeterminate

When the object is designated merely by its class or genus without any particular designation or physical segregation from all others of the same class (genus does not perish).

Limited Generic

When the generic objects are confined to a particular class, the class considered in itself a determinate object

Specific

Generic

Limited Generic

Art. 1244

Art. 1246

-

Art. 1163

N/A

-

Art. 1166

IBID

-

Art. 1164

(Arts. 440, 441, 442, 443; 1537)

Art. 1165

-

REAL SPECIFIC OBLIGATIONS

ART. 1244 The debtor of a thing cannot compel the creditor to receive a different one, although the latter may be of the same value as, or more valuable than that which is due.

In obligations to do or not to do, an act or forbearance cannot be substituted by another act or forbearance against the obligees will.

The 2 rules stated in Art. 1244 are logical consequences of the nature of specific or determinate obligations

If the obligation is to give, and the object is a thing which is specific or determinate, the debtor cannot fulfill his obligation by delivering a thing which is different from that which is due. This is so although the thing which is delivered may be of the same value or even more valuable than that which is due.

If the obligation is to do or not to do and the object is an act or forbearance which is specific or determinate, the obligor cannot fulfill his obligation by substituting another act or forbearance.

In both cases, the creditor or obligee cannot be compelled to accept the delivery of the thing or the substitution of the act or forbearance.

However, if he accepts the delivery or substitution, such acceptance shall give to the delivery or substitution the same effect as a fulfillment or performance of the obligation.

ART. 1163 Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care.

DOAGFOAF, obligation to give and to do

Standards of Care, Quantum of Diligence (Arts. 1172, 1173)

Extraordinary Diligence (Common Carriers)

Ordinary Diligence

Applicable only to determinate obligations, not generic ones which may be substituted.

For the purpose of insuring the efficacy and performance of the obligation.

As a general rule, the standard of care which must be exercised for the preservation of the thing must be the diligence of a good father of a family.

This rule, however, is subject to 2 exceptions:

If the law requires another standard of care, i.e., Art. 1733 on Common Carriers extraordinary diligence

If the parties stipulate another standard of care

ART. 1166 The obligation to give a determinate thing includes that of delivering all its successions and accessories, even though they may not have been mentioned.

ACCESSIONS

(fruits)

Signifies all those things which are produced by the thing which is the object of the obligation as well as those which are naturally or artificially attached thereto.

ACCESSORIES

Signifies all those things which have for their object the embellishment, use or preservation of another thing which is more important and to which they are not incorporated or attached. Attached; not expressly excluded

ART. 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 delivered to him.

Principle of Accession ART. 440 The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially.

ART. 441 To the owner belongs:

1. Natural Fruits

2. Industrial Fruits

3. Civil Fruits

ART. 442 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 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.

ART. 443 He who receives the fruits has the obligation to pay the expenses made by a 3rd person in their production, gathering and preservation.

Accesion discreta (natural, industrial, civil fruits); accesion industrial (building, planting and sowing); accession natural (alluvion, avulsion, abandoned river beds, etc.)

Considering that when a piece of land is sold, ordinarily all improvements thereon are intended as included in the sale as Accessions.

CONTRACTS OF SALE

ART. 1537 The vendor (debtor) is bound to deliver the thing sold and its accessions and accessories in the condition in which they were upon the perfection of the contract.

All the fruits shall pertain to the vendee (creditor) from the day on which the contract was perfected.

Exception: Suspensive conditions

REAL GENERIC OBLIGATIONS

ART. 1246 When the obligation consists in the delivery of an indeterminate or generic thing, whose quality and circumstances have not been stated, the creditor cannot demand a thing of superior quality. Neither can the debtor deliver a thing of inferior quality. The purpose of the obligation and other circumstances shall be taken into consideration.

Rule is based on equity and justice; 2 ways of delivery.

If there is no precise declaration in the obligation with regard to the quality and circumstances of the indeterminate thing which constitutes its object, the creditor cannot demand a thing of the best quality; neither can the debtor deliver a thing of the worst quality.

The obligation can only be fulfilled by the delivery of a thing which is neither of superior nor inferior quality.

Hence, it becomes actually a question of relative appreciation: if there is disagreement between the parties, the law steps in and declares whether the obligation has been complied with or not, depending upon the purpose of such obligation and other circumstances.

ART. 1165 When what is to be delivered is a determinate thing, the creditor, in addition, to the right granted him by Art. 1170, may compel the debtor to make the delivery.

If the thing is indeterminate or generic, he may ask that the obligation to be complied with at the expense of the debtor. (Remedy)

If the obligor delays, or has promised to deliver the same thing to 2 or more persons who do not have the same interest he shall be responsible for any fortuitous event until he has effected the delivery.

Rights of Creditor:

To ask for performance of the obligation pursuant to Art. 1246

To ask that the obligation be complied with at the expense of the debtor the creditor can order the delivery of the object (which must be neither of superior nor inferior quality) from any 3rd person and all expenses incurred shall be charged against him.

To recover damages for breach of the obligation in case of failure of the debtor to comply with his obligation, or in case of breach by reason of fraud, negligence, delay or contravention of the tenor of the obligation, the creditor can demand for indemnification for damages.

Although Art. 1165 is silent with respect to the applicability of Art. 1170 to indeterminate or generic obligations, the scope of the article is broad enough to apply even to such class of obligations.

Obligations of Debtor:

To deliver a thing which is neither of superior nor inferior quality

To be liable for damages in case of breach of the obligation by reason of delay, fraud, negligence or contravention of the tenor thereof

This liability includes the obligation to reimburse all expenses incurred by the creditor in those cases where the latter avails himself of the right to ask a 3rd person to perform the obligation at the expense of the debtor.

It must be noted, however, that the doctrine enunciated in Art. 1174 of the code, by virtue of which the obligation is extinguished in case the object thereof is lost or destroyed through a fortuitous event, is not applicable to this type of obligation.

This is clearly deducible from the provision of Art. 1263 of the CC which provides that: In an obligation to deliver a generic thing, the loss or destruction of anything of the same class or genus as that which constitutes the object thereof shall not extinguish the obligation.

The genus of a thing can never perish (genus nunquam peruit)

DELIVERY IN THE CONTEXT OF THE CIVIL CODE

ART. 1497 The Thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee.

ART. 1498 When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.

ART. 1499 The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it in his possession for any other reason.

ART. 1500 There may also be tradition constitutum possessorium.

POSITIVE PERSONAL OBLIGATIONS

-may be performed ONLY by the debtor

ART. 1167 If a person obliged to do something fails to do it, the same shall be executed at his cost.

The same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone.

If the obligor fails to do that which he has obligated himself to do, the obligee can have the obligation performed or executed at the expense of the former, and at the same time, demand for damages by reason of the breach.

In obligations to do, the obligee does not possess the power to compel the obligor to comply with his obligation.

The law recognizes the individuals freedom or liberty to choose between doing that which he has promised to do and not doing it.

Falls within what Spanish commentators have called a personal act (acto personalismo), of which courts may not compel compliance as it is considered an act of violence to do so.

Consequently, since compliance or fulfillment can only be voluntary, the code in the 1st paragraph of Art. 1167 has granted a remedy to the obligee to have the obligation performed or executed at the expense of the obligor, a remedy which, although irregular, is most analogous to fulfillment.

The right of the obligee to have the prestation executed at the expense of the obligor cannot be availed of when such prestation consists of an act where the PERSONAL and SPECIAL qualification of the obligor is the principal motive for the establishment of the obligation.

If there has been a performance of the obligation but in contravention of the tenor thereof, the following rights are available to the oblige:

To have the obligation performed or executed at the expense of the obligor

To ask that what has been poorly done be undone

To recover damages because of breach of obligation

JAVIER SECURITY WATCHMAN CO. case

NEGATIVE PERSONAL OBLIGATIONS

ART. 1168 When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be undone at his expense.

If the obligor does what has been forbidden him, 2 remedies are available:

To have it undone at the expense of the obligor pursuant to Art. 1168 (not against debtor: third party)

To ask for damages pursuant to Art. 1170

The first remedy is logical because it is the only way by which the end or object of the obligation may be effectively realized since what is demanded is not the performance of an act but an omission.

Whit respect to the 2nd remedy, it must be noted that in obligations of this type (not to do), delay or mora is not possible unlike positive obligations. This is so because negative obligations are either fulfilled or not fulfilled.

There are certain vases where the aforementioned remedy is not available, as there are those cases where the effects of the act which is forbidden are definite in character, in which case, even if it is possible for the oblige to ask that the act be undone at the expense of the obligor, consequences contrary to the object of the obligation will have been produced which are permanent in character.

There are those cases where it would be physically or legally impossible to undo what has been done because of the very nature of the act itself, or because of a provision of the law, or because of conflicting rights of 3rd persons.

In such cases the only remedy available to the obligee is Art. 1170.

If undoing will prejudice the 3rd party, resort to Art. 1170

BREACH OF OBLIGATIONS

In general, the breach of an obligation may be either voluntary or involuntary

VOLUNTARY

If the debtor or obligor in the performance of his obligation is guilty of default (mora), or fraud (dolo), or negligence (culpa), or in any manner contravenes the tenor thereof. (Liable)

INVOLUNTARY

If the debtor or obligor in the performance of his obligation is unable to comply because of an event which cannot be foreseen, or which, though foreseen, was inevitable. (Not Liable)

VOLUNTARY BREACH BY DEFAULT (MORA)

ART. 1169 Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. (mora solvendi)

However, the demand by the creditor shall not be necessary in order that delay may exist:

1. When the obligation or the law expressly so declares; (that demand is no longer necessary)

2. When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or

3. When the demand would be useless, as when the obligor has rendered it beyond his power to perform(there is presumption of good faith that debtor will perform unless 1174 intervened and prevented from payment; not exclusive to impossibility: when debtor denies obligation)

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. (only 1 incurs delay)

REQUISITES of delay in reciprocal obligations:

1. Reciprocal Obligation

2. Simultaneously due and demandable

3. Due and demandable

4. One party performs

5. The other does not

If no.2 is lacking, apply mora solvendi

LEGAL DELAY needs to be proven before a cause of action for damages obligation, due and demandable, delay, extra/judicial demand

Credit card contract to process with dispatch

ART. 1170 CANNOT BE ALLEGED.

Default or mora signifies the idea of delay in the fulfillment of an obligation. There are 3 kinds:

MORA SOLVENDI

(delay of the obligor or debtor to perform his obligation) this delay is called mora solvendi ex re when the obligation is to give or mora solvendi ex persona when the obligation is to do

MORA ACCIPIENDI

(delay of the oblige or creditor to accept the delivery of the thing which is the object of the obligation)

COMPENSATIO MORAE

(or the delay of the parties or obligors in reciprocal obligations)

3 requisites which should be present in order that the obligor or debtor may be considered in default:

The obligation is demandable and already liquidated

The obligor or debtor delays performance

The creditor requires the performance judicially or extrajudically

Grace period is not an obligation of the debtor but a right.

It must not be likened to an obligation the non-payment of which under Art. 1169 would generally still require judicial or extrajudicial demand before default can arise.

When unconditionally conferred, it is effective without further need of demand either for the payment of the obligation or for honoring the right.

DEFAULT IN (+) OBLIGATIONS

Obligor or debtor incurs in delay from the time the oblige or creditor demands from him the fulfillment of the obligation, which may be judicial or extrajudicial.

JUDICIAL

If the creditor files a complaint against the debtor for the fulfillment of the obligation

EXTRAJUDICIAL

If the creditor demands from the debtor the fulfillment of the obligation either orally or in writing

Whether the demand is judicial or extrajudicial, if the obligor or debtor fails to fulfill or perform his obligation, he is in mora solvendi.

DEFAULT IN (-) OBLIGATIONS

The obligor cannot possibly incur in delay in (-) obligations

Manresa maintains that these obligations have a peculiarity of their own which the law does not show but which is evident from their special nature.

Fulfillment and violation are possible, but not default or mora. This peculiarity is what differentiates this class of obligations from (+) obligations.

DEFAULT IN RECIPROCAL OBLIGATIONS

RECIPROCAL OBLIGATIONS

Those which are created or established at the same time, out of the same cause, and which result in mutual relationships of creditor and debtor between the parties

Reciprocal in the sense that fulfillment of an obligation by one party depends upon the fulfillment of the obligation by the other

The rule is that fulfillment by both parties should be simultaneous or at the same time. There are, however, cases in which different dates for performance or fulfillment of the reciprocal obligations may be fixed by the parties in which case, the rule stated in the 1st paragraph of Art.1169 shall apply (judicial/extrajudicial demand).

The rule then is that, one party incurs in delay from the moment the other party fulfills his obligation, while he himself does not comply or is not ready to comply in a proper manner with what is incumbent upon him.

If neither party complies or is ready to comply with what is incumbent upon him, the default of one compensates for the default of the other. In such case, there can be no legal delay.

EFFECT OF DELAY

Once the debtor or obligor has incurred in delay, he can be held liable by the obligee or creditor for the damages.

This liability subsists even if the thing which constitutes the object of the obligation may have been lost or destroyed through a fortuitous event.

If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest.

Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point. (Art. 2212)

ART. 2209 If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is 6% per annum.

RULES ON PRESUMPTION

A presumption is a fact in law.

ART. 1176 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. (Interest must be in writing; incomplete)

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.

Presumption on Extinguishment both prima facie (disputable presumption)

Justification principle of estoppel, however disputable

IMPLIED from circumstances (leads us to other conclusions)

PRESUMED from circumstances not necessarily leading to another (conclusion); declaration of law

PRIMA FACIE disputable

CONCLUSIVE evidence beyond reasonable doubt

ART. 1956 No interest shall be due unless it has been expressly stipulated in writing. (1755a) (Conclusive)

Extinguishment of Interests and Prior Installments

If the debtor is issued a receipt by the creditor and on the face of the receipt it is shown that the principal has been paid without any reservation with respect to the interest, there arises a disputable presumption that the interest has also been paid.

Such is in conformity with the rule that if the debt produces interest, payment of the principal shall not be deemed to have been made until the interests have been covered.

If the debtor is issued a receipt by the creditor acknowledging payment of a latter installment of a specified debt without any reservation with respect to prior installments, there also arises a disputable presumption that such prior installments have already been paid

These presumptions may be rebutted by competent evidence to the contrary

ART. 1235 When the obligee accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with. (and extinguished)

1176, 1956, 1235 1431

ART. 1275 The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person.

CONFUSION

The merger of the characters of creditor and debtor in one and the same person by virtue of which the obligation is extinguished

Sanchez Roman meeting in one and the same person of the qualitiesof creditor and debtor with respect to one and the same obligation

Confusion or merger of rights will necessarily result in the extinguishment of the obligation because of the impossibility of enforcing it since it would certainly be absurd for a person to enforce a claim against himself.

The purpose or end for which the obligation is constituted is realized when the qualities of creditor and debtor are merged in one and the same person.

Requisites:

That the merger of the characters of creditor and debtor must be in the same person

That it must take place in the person of either the principal creditor or the principal debtor; and

That it must be complete and definite does not mean that the extinguishment of the obligation should be complete or total in character, it merely means that whether the merger refers to the entire obligation or only a part thereof, it must be of such a character that there will be a complete and definite meeting of all of the qualities of creditor and debtor in the obligation or in the part or aspect thereof which is affected by the merger.

Kinds:

As to cause or constitutions: Inter vivos or mortis causa inter vivos, when it is constituted by agreement of the parties, mortis causa, when it is constituted by succession

As to extent or effect: Total or partial total, if it results in the extinguishment of the entire obligation, partial, if it results in the extinguishment of only a part of the obligation first, when the confusion or merger refers only to a part of the obligation; and second, when the obligation is joint

ART. 1431 THROUGH ESTOPPEL AN ADMISSION OR REPRESENTATION IS RENDERED CONCLUSIVE UPON THE PERSON MAKING IT, AND CANNOT BE DENIED OR DISPROVED AS AGAINST THE PERSON RELYING THEREON (Conclusive presumption)

ESTOPPEL

A condition or state by virtue of which an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon

ESTOPPEL IN PAIS

(or by conduct) that which arises when one by his acts, representations or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, as a consequence of which he would be prejudiced if the former is permitted to deny the existence of such facts

ESTOPPEL BY SILENCE

(or inaction) refers to a type of estoppels in pais which arises when a party, who has a right and opportunity to speak or act as well as a duty to do so under circumstances, intentionally or through culpable negligence induces another to believe certain facts to exist and such other relies and acts on such belief, as a consequence of which he would be prejudiced if the former is permitted to deny the existence of such facts (Art. 1437)

ESTOPPEL BY ACCEPTANCE OF BENEFITS

A type of estoppels in pais which arises when a party by accepting benefits derived from a certain act or transaction, intentionally or through culpable negligence induces another to believe certain facts to exist and such other relies and acts on such belief, as a consequence of which he would be prejudiced if the former is permitted to deny the existence of such facts (Art. 1438)

ESTOPPEL BY DEED OR BY RECORD

By deed type of technical estoppels by virtue of which party to a deed and his privies are precluded from asserting as against the other party and his privies any right or title in derogation of the deed, or from denying any material fact asserted therein

By record a type of technical estoppels by virtue of which a party and his privies are precluded from denying the truth of matters set forth in a record whether judicial or legislative

ESTOPPEL BY JUDGMENT

Type of estoppels by virtue of which the party to a case is precluded from denying the facts adjudicated by a court of competent jurisdiction (not res judicata)

ESTOPPEL BY LACHES

Laches in general, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should, within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.

TENDER OF PAYMENT AND CONSIGNATION (TOPAC)

Tender of payment is the manifestation by the debtor of a desire to comply with or pay an obligation. If refused without just cause, the tender of payment will discharge the debtor of the obligation to pay but only after a valid consignation of the sum due shall have been made with the proper court.32 Consignation is the deposit of the [proper amount with a judicial authority] in accordance with rules prescribed by law, after the tender of payment has been refused or because of circumstances which render direct payment to the creditor impossible or inadvisable.33 Tender of payment, without more, produces no effect.34 [T]o have the effect of payment and the consequent extinguishment of the obligation to pay, the law requires the companion acts of tender of payment and consignation.

VOLUNTARY BREACH THROUGH FRAUD OR DOLO

According to Manresa, fraud or dolo consists in the conscious and intentional proposition to evade the normal fulfillment of an obligation.

This type of fraud, which is present during the performance of an obligation, must not be confused with the causal or incidental fraud, which is present at the time of the birth of the obligation.

Under our legal system, fraud in general may be classified into civil and criminal fraud.

Civil fraud, in turn, may be classified into the following: 1.) fraud or dolo in the performance of an obligation; and 2.) fraud or dolo in the constitution or establishment of an obligation.

Fraud or dolo in the performance of an obligation

- Present only during the performance of a pre-existing obligation

- Employed for the purpose of evading the normal fulfillment of an obligation

- Results in the non-fulfillment or breach of the obligation

- Gives rise to a right of the creditor or oblige to recover damages from the debtor or obligor

Fraud or dolo in the constitution or establishment of an obligation

- Present only at the time of the birth of the obligation

- Employed for the purpose of securing the consent of the other party to enter into the contract

- If it is the reason for the other party upon whom it is employed for entering into the contract, results in the vitiation of his consent

- Gives right to a right of the innocent party to ask for the annulment of the contract if the fraud is causal (Dolo Causante) or to recover damages if it is incidental (Dolo Incidente)

*CATHAY PACIFIC VS VASQUEZ COTTOTOH; breach/change of tenor

ART. 1171 Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for an action for future fraud is void.

ART. 1334 Mutual error as to the legal effect of an agreement when the real purpose of the parties is frustrated may vitiate consent. (n)

ART. 1338 There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without the, he would not have agreed to.

Fraud in the perfection of a contract (Art. 1338)

Fraud in the performance of an obligation (Art. 1170)

Fraud or dolo which is present or employed at the time of the birth or perfection of a contract may be subdivided into dolo causante and dolo incidente:

DOLO CAUSANTE

(Or causal fraud) refers to those deceptions or misrepresentations of a serious character employed by one party without which the other party would not have entered the contract. (Art. 1338)

Serious, induces the party upon whom it is employed upon entering the contract, renders contract voidable

DOLO INCIDENTE

Those deceptions or misrepresentations which are not serious in character and without which the other party would not have entered the contract.

Not serious, not the cause, renders the party who employed it liable for damages

Requisites: (DOLO CAUSANTE)

Fraud or insidious words or machinations must have been employed by one of the contracting parties;

The fraud or insidious words or machinations must have been serious;

The fraud or insidious words or machinations must have induced the other party to enter into the contract; and

The fraud should not have been employed by both of the contracting parties or by 3rd persons

ART. 1344 In order that fraud may make a contract voidable, it should be serious and should not have been employed by both contracting parties.

Incidental fraud only obliges the person employing it to pay damages.

EFFECT OF FRAUD

If there is a breach or non-fulfillment of the obligation by reason of fraud or dolo on the part of the debtor or obligor, he can be held liable for damages.

As a ground for damages, malice or dishonesty is implied.

Cannot cover cases of mistake and errors of judgment made in good faith

Fraud or dolo is synonymous to bad faith

Expressly recognized by Arts. 1170 and 1171

Rule: liability cannot be waived or renounced

What is prohibited is the waiver or renunciation which is made in advance or in anticipation of fraud, and not which is made after the fraud has already been committed

Under Art 1171, renunciation of the action for a fraud which has not yet been committed is prohibited

Waiver for future fraud is contrary to law or public policy (void)

Waiver for a past fraud is valid since such waiver can be deemed an act of generosity

What is renounced is the effect of fraud, more particularly the right of the party to indemnity

Extent of damages recoverable According to Civil Code: ALL damages which may be reasonably attributed to the breach or non-fulfillment, regardless of whether such consequences are natural or unnatural, probable or improbable, foreseeable or unforeseeable; may also recover moral and exemplary damages

VOLUNTARY BREACH THROUGH NEGLIGENCE OR CULPA

It consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place.

If the law or contract does not state the diligence which is to be observed in the performance of the obligation, that which is expected of a good father of a family shall be required.

The law has adopted the standard supposed to be supplied by the imaginary conduct of the discreet pater familias of the Roman law.

Kinds: Civil or Criminal

CULPA CONTRACTUAL

The fault or negligence of the obligor by virtue of which he is unable to perform his obligation arising from a pre-existing contract because of the omission of the diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place.

Negligence of defendant is merely an incident in the performance of the obligation

There is always a pre-existing contractual relation

Source of liability is the breach or non-fulfillment of the contract

Proof of contract and breach are prima facie evidence to warrant recovery

Proof of diligence in the selection and supervision of employees is not available as a defense

CULPA AQUILANA (Quasi-delicts)

The fault or negligence of a person, who, because of the omission of the diligence which is required by the nature of the obligation and which must correspond with the circumstances of the persons, of the time and of the place, causes damage to another.

Substantive and independent negligence

There may or may not be a pre-existing contractual relation

Source is defendants act or omission itself

Negligence of defendant must be proved

Diligence in selection and supervision is a defense

*Only suit for damages (no performance)

Art. 1172/1173 culpa contractual (in the fulfillment of an obligation an act of negligence is committed thus, breach) 1. Performance, if possible 2. Damages

Art. 2176 culpa aquilana (no pre-existing contractual obligation); Tolentino diligence in actions

ART. 1172 Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to their circumstances.

ART. 1276 Merger which takes place in the person of the principal debtor or creditor benefits the guarantors. Confusion which takes place in the person of any of the latter does not extinguish the obligation.

EFFECT OF NEGLIGENCE

Obligor/debtor may be held liable for damages

Liability subsists even if he has been acquitted in a criminal action charging him with a criminal offense based on his negligent act/omission

May be waived for present or future negligence, unless the nature of the obligation and public policy should require extraordinary diligence as in the case of common carriers.

The court may increase/decrease the liability of the party at fault depending upon circumstances; may take into consideration the good or the bad faith of the obligor (defendant) or the conduct of the oblige (plaintiff) when the damage was incurred

Good faith Obligor liable only for natural and probable consequences of the breach of obligation and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted

Bad faith Obligor held responsible for all damages which may be reasonably attributed to the non-performance of the obligation

Contributory Negligence effect is to reduce or mitigate the damages which may be recovered from the breach. If, however, if the negligence of creditor/oblige was the proximate cause of the damage/injury, the same cannot recover.

OTHER CIRCUMSTANCES

The courts may also equitably mitigate damages in the ff instances:

Plaintiff himself has contravened the terms of the contract

Plaintiff derived some benefit as a result of the contract

In awarding exemplary damages, where the defendant acted upon the advice of a counsel

Upon filing the action, defendant has done his best to lessen the plaintiffs loss or injury

VOLUNTARY BREACH THROUGH CONTRAVENTION OF TENOR OF OBLIGATIONS

Includes not only illicit act which impairs the strict and faithful fulfillment of the obligation, but also every kind of defective performance

Delay, fraud, negligence (COTTOTOHS) but not all (D,F,N)

FORTUITOUS EVENTS

ART. 1174 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.

Definition by Civil Code

FORTUITOUS EVENT PROPER (Act of God)

Refers to an event which is absolutely independent of human intervention

FORCE MAJEUR (Fuerza Mayor)

Refers to an event which arises from legitimate or illegitimate acts of persons other than the obligor

No substantial difference, both refer to an event or cause which is independent of the obligors will

As to foreseeability:

ORDINARY

Event which usually happens or which could have been reasonably foreseen

EXTRAORDINARY

Event which does not usually happen and which could not have been reasonably foreseen (war, pestilence, unusual flood, etc.)

EFFECT UPON OBLIGATION

If the obligor is unable to comply with his