661

661

Art. 7448
A]|t. 7449

661
661

Allt.

Art.
Art.
Art.
Ari.
Art.

662
662
662

1451

1452

t453
t454
1455

tut. 1456

..................

Article Applied...
Idem; Prescriptibility ofactions to enforce trust ...
Idem; id. Period of prescription...... ....................... .
ldem; Laches maY bar aclit-rn...
Idem; Acquisition of property by trustee
through prescription.......... ..........
Idem; Illustrative cases....... ........

Lrt.

1457

663
663
663
663
663
664
665

BOOK IV
OBLIGATIONS AND CONTRACTS
TITLE

666
667

I-

OBLIGATIONS

CHAPTER

677

GENERAL PROVISIONS

Article 1156. An obligation

give, to do or not to do.'

is a juridical necessity to

Concept of Obligations. - Evidently, the above definition of

an obligation is adopted from Sanchez Roman's classic definition of
an obligation as "thejuridical necessity to comply with a prestation."'
Manresa, on the other hand, defines it as 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."'

It must

be observed, however, that obligations may be either

civil or natural.n A civil obligation is one which has a binding force in
law, and which gives to the obligee or creditor the right ofenforcing it
against the obligor or debtorin a court ofjustice. This is the obligation
which is defined in At. 1156 of the Code. A natural obligation, on
the other hand, is one which cannot be enforced by action, but which
is binding on the party who makes it in conscience and according to

Iloman 5ll.
lvl,i'!lr H,,,5th ljd., llk. I,1r.2l.
rAl'l l,l:l:t. ('rvil ( lxl'.

'/4 Srrrrchcz

tB

GENER{

ORI,I(}ATIONS

Art. 1156

the natural law.o Thus, when an action has prescribed in accordance

with the statute of limitations, a natural obligation still subsists,
although the civil obligation is extinguished. This may be illustrated
by the following example: IfA has a right of action, evidenced by
a promissory note, to collect one thousand pesos from B, and such

promissory note prescribes after the expiration of ten years from

the time it accrues,o although the latter is no longer bound to pay
the obligation in accordance with the statute of limitations, he is
still bound to pay in accordance with equity and natural law.' It is,
therefore, clear that a civil obligation and a natural obligation may
be distinguished from each other as follows:

(1)

A civil obligation is based on positive law, while a natural

obligation is based on equity and natural law; and

(2) The former is enforceable in courts ofjustice, while the

latter is not.'
Requisites ofObligations.
requisites. They are:

An obligation has four essential

(1) A juridical or legal tie, which binds the parties to the

obligation, and which may arise from either bilateral or unilateral
acts of persons;
(2)

An active subject known as the obligee or creditor, who

can demand the fulfillment of the obligation;

(3) A passive subject known as the obligor or debtor, against

whom the obligation is juridically demandable; and
(4)

The fact, prestation or service which constitutes the object

ofthe obligation.'
The form in which the obligation is manifested is sometimes
added as a lifth requisite. As a general ru1e, however, it cannot be
considered as essential. Obligations arising from law, quasi-contracts, acts or omissions punished by law, and quasi-delicts do not
require any form whatsoever, yet there can be no question regard-

Bouvier's l,aw Dicti{)nllry, 2:i{}4 2i11)1,.

6Art. I14,1, Civil (lxl{
?Agoncillo vs. Javrcr, ilt{ l'1,,1 .l:1.1. Vrllrrrrrl vs llslrrrrLr.

rArl.

livil lin|,
"()\n[i,'l\\nu th lB(tl,ltrlrt"r',
142:1. (

ing their validity or binding force. It is only in obligations arising

from certain contracts that it becomes essential. Thus, in a contract involving a donation of personal property whose value exceeds
P5,000.00, the law requires that the donation and the acceptance
shall be made in wdting;'' in a contract of sale ofa piece of land or
any interest therein through an agent, the law requires that the
authority of the latter shall be in w ting;" in a contract of simple
loan or mutuum, the Iaw requires that any agreement with rcspect
to interest shall be expressly stipulated in writing;" in a contract of
antichresis, the law requires that the amount of the principal and
of the interest shall be specified in writing;' in a contract involving
a donation of immovable property, the law requires that the donation shall be made in a public document, while the acceptance shall
be made either in the same deed ofdonation or in a separate public
document;', in a contract of partnership where immovable property
or real rights are contributed to the common fund, the law requires
that the contract shall be in a public instrument to which an inventory of the propefty or real rights, sigrred by the partners, must be
attached;'' in a contract of chattel mortgage, the law requires that
the personal property which is the subject matter of the contract
shall be recorded in the Chattel Mortgage Register as a security
lbr the performance of an obligation;'' and in a contract involving
the sale or transfer of large cattle, the law requires that the sale or
transfer shall be registered.,' Non-compliance with such formalities
would have the effect ofrendering the contract or agreement void or
inexistent.

Classification ofObligations.
classification of obligations under

(1)
(2)
(3)

- The following
the Civil Code:

With a period (Arts. 1193-1198).

Alternative and facultative (Arts. 1199-1206).

21:i4.

(livil

(lodo.

rrArt. 749, (livil (ixk'.

7l l'hil,ll)

\','l I I, lll . il ( ,rs|"".7ll' l,i,l . 1, :l{l

hArlr l7?1, l?7:], (livil (irrL.

I'L/\rl

:a

is the

Pure and conditional (Arts. 1179-1192).

"'Art. ?48. Civil Code.

rrArt. 1874. Civil Code.
rrArt. 1956, Civil Code.

"Art.

53

Art. 1156

PROVISIONS

1,1{1.

(:ivil

l{'(1.

,S.n 1l:l A(tN,,. ll47i

Arl li,8l.( rvrllixi,

primary

(4)
(5)
(6)

Joint and solidary (Arts.

1207 -1222).

Divisible and indivisible (Arts. 7223-1225).

With a penal clause (Arts.1226-1230)

There are, however, other classifications of a secondary character which can be gathered from scattered provisions of lhe Civil
Code, such as:

(1)
(2)
(3)
(4)
(5)
(6)
(7)

Legal, conventional and penal;''

Real and personal;'o

Positive and negative;'

Unilateral and bilateral;"

Individual and collectivef"
Accessory and principal."

obligations according to Sanchez Roman:'u

As

to

(a)

juridical qualitY:
Natural

natural law.

(b)

Civil

positive 1aw.

(c)

when the obligation is in accordance with

when the obligation is in accordance with

Mixed

when the obligation is in accordance with

both natural and positive law.

''Arts. 1163-1168, Civil

Code.

Civil Codc.

(livil (lodo.
'?rAlts. 11G7-l16tt.
"Arts I I69- l l9l. ((livil ('rrl
'iv'l (',xli'.
'?:rArts. 1207, 122:1,
fi^rl.H. I l{j(;. l2.Lti, tt srr , ('rvrl I
7"r'l S,'rr'1r.1 ll,,Dur!r :lll llr

Art.

1156

As to perties:

(a)

Unilateral and bilateral - unilateral, where only

one party is bound, and bilateral, where both parties are mutually or reciprocally bound.
(b) Individual and collective - individual, where there

is only one obligor, and collective, where there are several obligors. The latter may be joint, when each obligor is liable only
for his proportionate share of the obligation, or solidary, when
each obligor may be held liable for the entire obligation.
As to object:

(a)

Determinate and generic

determinate, when the

object is specific; generic, when the object is designated by its

class or genus.

(b)

Simple and multiple - simple, when there is only

one undertaking; multiple, when there are several undertakings. Multiple obligations may be conjunctive, when all of the
undertakings are demandable at the same time, or distributive, when only one undertaking out of several is demandable.
Distributive obligations, on the other hand, may be alternative, when the obligor is allowed to choose one out of several
obligations which may be due and demandable, or facultative,
when the obligor is allowed to substitute another obligation for
one which is due and demandable.

(c) Positive and negative - positive, when the obligor

is obliged to give or do something; negative, when the obligor
must refrain from giving or doing something.
(d)

Real and personal - real. when the obligation consists in giving something; personal, when the obligation consists in doing or not doing something.

(e) Possible and impossible - possible, when the obligation is capable of fulfillment in nature as well as in law;
impossible, when the obligation is not capable of fulfillment
either in naturc or in law.

r3Ads. 1158-1162, Clivil Code.

:oArrts. 1163-1166.

2.

3.

Determinate and generic;'u

The following, on the other hand, is the classification of

(1)

GENI.]RAI, PROVISIONS

OBLIGATIONS

Art. 115ti

(fl
\ri'

l)ivisible rnd indivisiblc

divisible, when the obli-

girt.iorr is strsccptiblc ol pitrl,iirl pt'rlortnttnctr; indivisible, when

llrr, olrligrr l,iorr is ttol. sttst r'pl ilrlt' ol prtrl.iirl pt'r'litrmance.

Art.

OBI,ICATIONS

1157

(g)

Principal and accessory - principal, when it is the

main undertaking; accessory, when it is merely an undertaking
to guarantee the fulfillment of the principal obligation.

4.

As to perfection and extinguishment:

(a)

Pure - when the obligation is not subject to any

condition or term and is immediately demandable.

(b) Conditional - when the obligation is subject to a

condition which may be suspensive, in which case the happening or fulfiilment of the condition results in the birth of the
obligation, or resolutory, in which case the happening or fulfillment of the condition results in the extinguishment of the
obligation.
(c)

With a term or period ( a plazo) when the obligation

is subject to a term or period which may be suspensive or from
a day certain, in which case the obligation is demandable only
upon the expiration ofthe term, or resolutory or to a day certain,
in which case the obligation terminates upon the expiration of
the term.

Art,

1157.

l.
2.
3,
4,
5,

Law;

Obligations arise from:

Contracts;
Quasi-contracts;
Acts or omissions punished by law; and

Quasi-delicts."
Sources of Obligations. - ln Roman law, the sources of
obligations are'. (7) contractu; (.2) quasi-contro.ctu; (3) maleftcio;
and. (4) quasi-maleficio.2, These sources are preserved in the Civil
Code with the addition of law or ftrge.* The addilion of lege as an
independent source of obligations, however, has been criticized as
theoretically erroneous. Thus, according to the Supreme Oourt:

(iivil ( l,!k.. il ,,",,,",1'!l Ii,r',,

'dArt. 1089. Spttnish
M:rnr()sr,
5th
[i!.,
I]k l. 1r :15
'j?8

lr^rl

ll'7, ( liv'l ('rrl

GENERAL PROVISIT)NS

Art.

1158

"This enumeration of the sources of obligations supposes that

quasi-contractual
obligation and the obligation imposed by
the
types.
The learned Italian jurist, Jorge Giorgi,
law are of different
and
says that the classification embodied
criticizes this assumption
His conclusion is that one
erroneous.
in the Code is theoretically
have
been suppressed and
categories
should
or the other of these
(Giorgi,
Spanish
Teorio
de
las
ObLigaciones,
merged in the other.
is,
we
think,
the
criticism
The
validity
of
Ed., VoL 5, Arts. 5, 7, 9)
common
law
makes
to
note
that
the
it
is
of
interest
self-evident and
no distinction between the two sources ol liability. The obligations
which in the Code are indicated as quasi-contracts, as well as those
arising e.r lege, are in the common law system merged into the
category of obligations imposed by law, and all are denominated
implied contracts."'"

Art. 1158. Obligations derived from law are not presurned. Only those expressly determined in this Code or in
special laws are demandable, and shall be regulated by the
precepts of the low which establishes them; and as to what
has not been foreseen, by the provisions of this Book.'o
Obligations Arising from Law.

other obligations,
- UnlikeConsequently,
presumed.
only
never
be
those derived from law can
in
laws
are
Civil
Code
or
special
in
the
those expressly determined
precepts
regulated
by
the
shall
be
demandable. These obligations
of the law which establishes them, and as to what has not been
foreseen, by the provisions of Book IV of the Civil Code.''

How can we determine whether an obligation ariscs from

law or from some other source, such as a contract, quasi-contract,
criminal offense or quasi-delict? It must be noted that 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
"r'lllrr11 ltorr vs. O'llrion,lln I'hil llt2
"'Arl llrlll), Sprnish (livil ( l!L
'LA'l Ill'8 ('rvil ( (xll

Arf

(iENERAI, PRoVISI()NS
I

I l-r9

itsell is the source ol the obligation; however, when the law merely
recognizes or acknowledges the existence of an obligation generated
by an act which may constitute a contract, quasi-contract, criminal

oflense or quasi-delict and its only purpose is to regulate such

obligation, then the act itself is the source of the obligation and not
the law.,'Thus, ifA loses a certain amount to B in a game ofchance,
according to Art. 2014 ofthe Civil Code, the former may recover his
loss from the latter, with legal interest from the time he paid the
amount lost. It is evident that in this particular case the source of
the obligation of B to rel'und to A the amount which he had won from
the latter is not a contract, quasi-contract, criminal offense or quasidelict, but the law itself.,'The same can also be said with regard to
the obligation of the spouses to support each other,* the obligations
of employers under the Labor Code,,'the obligations ofthe owners of
the dominant and servient estates in legal easements,.'and others
scattered in the Civil Code and in special laws.

Art. 1159. Obligations arising frorn contracts have the

force of law between the contracting parties and should be
complied with in good faith,,'
Obligations Arising from Contracts. - A contract is a
meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something ortorendersome service..s
As a rule, contracts are perfected by mere consent, and from that
momcnt the parties are bound not only to the fulfillment of what
has lrcen expressly stipulated but also to all of the consequences
whiclr according to their nature may be in keeping with good faith,
usage and law."' These contracts are commonly called consensual
contracts. Once the contract is perfected, the valid contract has the
force of law binding the parties to comply therewith in good faith,
where neither onc may renege therefrom without the consent of the
olher. (Tiu Peck us. CA 221 SCRA 618 t19931) There are certain
3'?8

Arl.

I 160

OBI,(IATIONS

Manresa. Sth Ed., Bk. 1. p.48.

""Leung Ben vs. O'Brien. 38 Phil. 182.
lArt 291. (livil (l.rdc; Il'layo vs. liruron. 12 I'hil.45;1.
ilr'l}rutista vs. l]('rlomr\). :ll-) S( llt^ I lll
r,rArls 6iJ4 (iu? (livi1 ('rxk.
';Arl 1091. Sp"nisl' ('rtil ( inl,.. r' lr,rlilirrl lirrnr
l;l{15. ( ivrl (',r1,.
"Arl
r'rArl lrl lt ('ivrl (',r1,.

contracts, however, called real contracts, such as deposil, pledge

and commodatum, which are not perfected until lhe delivery of the
object ofthe obligation."' Whether the contract is consensual or real,
the rule is that from the moment it is perfected, obligations which
may be either reciprocal or unilateral arise. Reciprocal obligations
are those where the parties are mutually or reciprocally obliged to
do or to give something; unilateral obligations, on the other hand,
are those where only one of the parties, the obligor, is obliged to do
or to give something.

Unlike other kinds of obligations, those arising from contracts

are governed primarily by the agreement of the contracting parties.
This is clearly deducible not only from the nature of contracts, but
also from Art. 1169 of the Code which declares that such obligations
have the force of law between the contracting parties and should
be complied with in good faith. "Compliance in good faith" means
performance in accordance with the stipulations, clauses, terms
and conditions of the contract. Consequently, the Code recognizes
the right of such contracting parties to establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order or
public policy..' Good faith must, therefore, be observed to prevent
one party from taking unfair advantage over the other party. In
the case of Royal Lines, Inc. us. Court of Appeals, 143 SCRA 608
(1986), it was ruled that evasion by a party of legitimate obligations
afier receiving the benefits under the contract would constitute
unjust enrichment on his part. However, in default ofan agreement,
the rules found in the Civil Code regulating such obligations arc
applicable.0

Art. f160. Obligations derived from quasi-contracts

shall be subject to the provisions of Chapter
thie Book.,''

1,

Title XVII, of

Obligations Arising from Quasi-Contracts. - Quasicontracts are those juridical relations arising from lawful, voluntary
ioArt. 1316. (livil (10d(l.

'rArt
'lArl

l:l{)6. (livil (lxl('.

l:ll15, r/ srrl ,(livil

tirk,

Arr I1fiI

OBI,IGATIONS

GF]NI]RAI, PROVISIONS

and unilateral acts, by virtue of which the parties become bound

to each other, based on the principle that no one shall be unjustly
enriched or benefited at the expense ofanother." The most important
of these juridical relations which are recognized and regr-rlated
by the Civil Code are negotiorum gestion' ar'd. solutio indebiti.*
Negotiorum gestio is the juridical relation which arises whenever a
person voluntarily takes charge ofthe agency or management ofthe
business or property ofanother without any power or authority from
the latter.'r In this type of quasi-contract, once the gestor or officious
manager has assumed the agency or management ofthe business or

Preliminary Title, on Human Relations, and of Title XVIII of

this Book, regulating damages,5i
Obligations Arising from Criminal Offenses. - As a rule,

lfil

property, he shall be obliged to continue such agency or management

until the termination ofthe affair and its incidents," exercising such
rights and complying with such obligations as provided for in the
Code." Solullo indebiti, on the other hand, is the juridical relation

which arises whenever a person unduly delivers a thing through

mistake to another who has no right to demand it.'" In this type of
quasi-contract, once the delivery has been made, the person to whom
the delivery is unduly made shall have the obligation to return the
property delivered or the money paid.''

The Civil Code provides other instances of quasi-contract.

Examples are those found in Articles 2159, 2164 to 217 5.
In the case ofPerez us. Palomar,2 Phil. 682, it was significantly
noted that in a quasi contract where no express consent is given by
the other party, the consent needed in a contract is provided by law
through presumption (presumptive consent). Presumptive consent
gives rise to multiple juridical relations resulting in obligations for
delivery of the thing and rendering of service.

Art. 116l. Civil obligations arising from offenses shall

be governed by the penal laws, subject to the provisions of
Article 2177, and of the pertinent provisions of Chapter 2'
11Art. 2142.

Civil

Code.

'5Art. 2144. Civil Code.

'6Art. 2154. Civil Code.
a?Art. 2144. Civil Codc.

*Ibid.
ilArts.2144 2152. (livil (lrrl,
roArl 2154. (livil (i'd'

every person liable for a felony is also civilly liable." This principle
is based on the fact that, generally, a crime has a dual aspect - the
criminal aspect and the civil aspect. Although these two 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 ofthe
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.
Please note, however, that there are offenses and special crimes

without civil liability. Examples are crimes of treason, rebellion,

illegal possession of firearm and gambling. But a person who is not
criminally liable may still be civilly liable.

Idem; Enforcernent of civil liability. - In general and

prior to the Revised Rules of Criminal Procedure 2000, the following
rules are obserwed in the enforcement or prosecution ofcivil liability
arising from criminal offenses:

(l)

Institution of criminal q.nd ciuiL octions. - 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 (i) expressly waives
the civil action, or (ii) reserves his right to institute it separately, or
(iii) institutes the civil action prior to the criminal action.

(2) Independent ciuil action. - In the cases provided in

Articles 31, 32,33,34 and,2177 ofthe Civil Code ofthe Philippines,
an independent civil action entirely separate and distinct from the
criminal 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 ofthe criminal prosecution,
and shall require only a preponderance of evidence.
zArl

I(X)2, SpaDish (livil (ixir,, irr rrrrrIrd, rl Iirrm

r':r^r{ l(X). Itovisod I1'nrrl (ixI'l'hisrrrlr',h,,wov.r,issrrbj,'cltofh{'rulesstated
in Arlx lol, l02 and ll);i, It,'vir{rl l'(''url (lxl".

lo

Afi

Art. 1l6l

ORI,ICA'IIONS

GEN!]RAI, PROVISIONS

G) Other ciuil ections arising lfint ollenses. -.ln all cases

not included in the preceding rules, the fbllowing rules are observed:

be instituted separately or whose proceeding has been suspended

1161

(a)

Criminal and civil actions arising fiom 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;

(b) Ifthe civil action has been filed ahead ofthe criminal
action, and the criminal action is subsequently commenced, 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 iointlv;

(c)

Extinction of the penal action does not carry with

it extinction of the civil, unless the extinction proceeds from a
declaration in a finaljudgment 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.

Pursuant to Sec. 2, Rule III of the Revised Rules of Criminal

Procedure 2000, however, it is stated that except for civil actions
provided for in Arlicles 32, 33, 34 and 2176 of the Civil Code, the
civil action which has been reserved cannot be instituted until final
judgrnent has been rendered in the criminal action. 'lhe action
contemplated, as pointed out by Justice Oscar Herrtrra in his
Treatise on Criminal Procedure, is a civil action irrising frttm tt crime
ifreserved or filed separately and it trintinitl cirsc is lilotl il il hirs trr
be suspended to await finrrl .lrrdgntt'ttl itt l.ltt't ritttittitl itcl.iort.
The rule clrrrifit's Lltrrl,, 'l)rrlrrr11 llrr' pr'1trlr'ttcv rrl l.ltl clitttitt:tl
action, thr' ltorirtrl ol lrtcrctilrltotr ol llrl lrvil ttcliotr wlticlt cttttttol

l:l

shall not run." Otherwise stated, the period ol prescription of the

civil actions under Section 3 ofthe aforementioned rules shall not be
suspended because they can be instituted separately. This refers to
civil actions arising from the oflense charged which have not been
reserwed or civil actions that have been filed ahead r-rf the criminal
action but have been suspended. r'& stice Oscar M. Hetera, Treatise
on Historical Deuelopment ancl Highlights of AntencLment of Rules
on Criminal Procedure, February 2001).
(4) Judgment in ciuil action not a bor. - A linal judgment
rendered in a civil action absolving the defendant from civil liability
is no bar to a criminal action.
(5) Suspension by reason ol prejudiciuL questirtn. - A petition
for suspension of the criminal action based upon the pendency of
a prqjudicial 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.
Section 7 of the Revised Rules of Criminal Procedure 2000
provides for the elements of a prejudicial question. They are: (a) the
previously instituted civil action which involves an issue similar or
intimately related to the issue raised in the subsequent criminal
action, and (b) the resolution of such issue determines whether or
not the criminal action may proceed.
Section T limits a prejudicial question to a "previously instituted civil action" in order to minimize possible abuses by the subsequent filing of a civil action as an after thought fbr the purpose of
suspending the criminal action. (Justice Oscar M. Herrera, Treatise
on CriminqL Procedure, February 2001)

At a glance, therefore, the following are lhe salient

changes

broughl about by the Revised Rules of Criminal Procedure 2000,

as rnore specifically discussed hereunder by Justice Herrera in L'is
'l'reatise on Crimintrl Proccdure:
a. The rule changes thc 191J5 rulc as:rmended in 1988.
llndor tht: l9lt5 Rtrlc, tht'it<t.ion Iirr rrt'ttvcry ol civil liability
;rrising lronr crirnt' inclttrling lhc civil lirrhilitv rrnder Articles
:12, :lil, lt4 rrrrd 217(i of t.lrr, ( liv il ( lork' ol l hr' l)hililrpincs irrising
l;r

Art.

(]FJNI.]Il-dI, PROVISI()NS

OBI,IGATTONS

1161

from the same act or omission are deemed impliedly instituted

with the criminal action unless the oflended party waives the
civil action, reserves his right to institute it separately, or
institutes the civil action prior to the criminal action.
Under the present rl.le, only the civil liability arising from
the offense charged is deemed instituted with the criminal
unless the offended party waives the civil action, reserves his
right to institute it separately, or institutes the civil action
prior to the criminal action-

b.

Under the former rule, a waiver ofany of three civil

actions extinguishes the others. The institution o{ or the reservation of the right to file any of said civil actions separately
waives the others. This is no longer provided for. The reservation and waiver refers only to the civil action for the recovery
of civil liability arising fiom the offense charged. This does not
include recovery of civil liability under Articles 32, 33, 34 and
2176 ofthe Civil Code ofthe Philippines arising from the same
act or omission which may be prosecuted separately even with-

out a reservation.

c. The rulings in Shafer us. Judge, RTC of Olongapo

City, 167 SCRA 376, allowing a third-party complaint, and the
ruling in Jauier us. Intermediate Appellate Court, 171 SCRA
376, as well as Cabaero us. Cantos allowing a counterclaim are
no longer in force. Under the 2000 Rules, these pleadings are
no longer allowed. Any claim which could have been the subject
thereof may be litigated in a separate civil action.
d. The rule also incorporated Circular 57-97 on the
filing of actions for violation of Batas Pambansa Blg. 22
mandating the inclusion of the corresponding civil action for
which the filing fee shall be paid based on the amount of the
check involved. In other cases, no filing fees shall be required
for actual damages.

Iden; Id. - Effect of acquittal. - If thc

accused

in

l.l

1161

on the same act ol omission may still be instituted." ln such case,

mere prepondcrance of evidence shall bc suf{icient in order that
the plaintiff will bo able to recover fiom the defendant.uu On the
other hand, if thc acquittal is based on the ground that he did not
commit the offense charged, or what amounts to the same thing, if
the acquittal proceeds from a declaration in a final judgment that

the fact from which the civil liability rnight arise did not exist, the
subsequent institution ol a civil action to recover damages is, as a
general rule, no longer possible.'"

Idem; id. - Effect of independent civil actions. - As a

rule, the civil action to recover damages from the person criminally
iiable 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 ofthe criminal action, while
in the second, once the criminal action is instituted, the action to
recover damages shall be suspended." There are, however, certain
exceptional cases or instances under the Civil Code where the civil
action to recover damages is entirely separate and independent from
the criminal action, although the act or omission which is the basis
thereof may be a criminal offense. They are: first, where the civil
action is based on an obligation pot arising from the act or omission
complained ofas a criminal offense or felony;" and.second, 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.nn As
a matter of fact, we can even go to the extent of saying that these
cases or instances also constitute the exceptions to the rule that if
the accused in the criminal action is acquitted on the ground that he
did not commit the offense charged, the subsequent institution of a
civil action is no longer possible.

criminal action is acquitted oflhe offense chargcd, cirn a civil rrction

for damages based on the same ac:t or ornission still hc insl,i|utcd'?
This question requires a tlualificd irrrswor. Il l.hr' ;rcrlrril,Lrl of't.ho
accused is bascd on thc grorrrr<l llrrrt. lris grrilt. lrirs rrol. lx'r'rr provcrl
beyond roirsorrrlrll rLrrrlrl., ir r'rvil rrclrorr Lr) rr,(()vr'r rlrrrrrrrgr,s lrrrstrl

Art.

"rArt. 29. Civil Code.

*Ihrtl.
;.S.c.:l((), Itulc I I l, Nt w ltrrl s ol (lorrrl
r''S'\' :l(l'r. liuk. lll. N' s lt,,l, s,'l (i)'rrl.

"'A'l! lll. I?'/. ('ivil (ixl'

''Ar 1,, ;l:1. ll:1, ;1,1, l'rvrl ( l,!1,,

ll'

Art t 16l

With regard to the first, it must be noted that where the civil
action is based on an obligation not arising {iom 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."' It is evident that in such case the basis of the
civil action may be an obligation arising from the law, contract,
quasi-contract, or quasi-delict. Thus, a postmaster, who has been
charged criminally for malversation of government funds under
his custody, may still be made a defendant in a civil case for the
recovery of the funds, not on the ground of malversation, but on
the ground that under Sec. 633 ofthe Revised Administrative Code,
he can be held accountable therefor.o' The basis of the civil action
in such case is not the obligation arising from the criminal offense
of malversation, but the obligation arising from the law. Similarly,
if a passenger in a certain bus institutes a civil action to recover
damages from the operator of the bus line for injuries sustained in
an accident, such action is separate and distinct from the criminal
prosecution ofthe driver for criminal negligence and may, therefore,
be continued regardless of the result of the latter. Consequently,
he can still recover damages even if the driver is acquitted in the
criminal action. because it is clear that the action in such case is
based on culpa contractuol and not on the act or omission of the
driver complained ofas felony.d, The same principle is also applicable
if the offense charged constitutes what is known as culpa aquiliana
or quasi-delict under the Civil Code.u' In such case, the injured party
can always institute a civil action to recover damages independently
of the criminal action and regardless of the result of the latter. This
is so even granting that the accused is acquitted in the criminal
action either on the ground of reasonable doubt or on the ground
that he did not commit the offense charged. The reason for this is
that the basis of the civil action is no longer the criminal liability of
the defendant, but a quasi-delict or tort.o'

1161

With regard to the second, it must be observed that there are

five exceptional cases or instances, in addition to that which is stated
in Art. 31 of the New Civil Code, where the law itself expressly
grants to the injured party the right to institute a civil action which
is entirely separate and distinct from the criminal action. They
are: (1) interferences by public officers or employees or by private
individuals with civil rights and liberties," (2) defamation,* (3)
fraud,"' (4) physical injuries,* and (5) refusal or neglect of a city or
municipal police officer to render aid or protection in case of danger
to life or property.6, In all of these cases or instances, although the
act or omission may constitute a criminal offense in accordance
with our penal laws, the injured party may institute a civil action
to recover damages which is entirely separate and distinct from the
criminal action. Once the action is instituted, then it may proceed
independently of the criminal action, and shall require only a
preponderance of evidence.'o

Idern; id.; id.

Effect of failure to make reservation.

Section 2 ofRule 111 ofthe New Rules ofCourt states: "In the cases
provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of

the Philippines, an independent civil action entirely separate and

distinct from the criminal action, may be brought by the injured
party during the pendency of the criminal case, provided that the
right is reserved as required in the preceding section." 'lhe insertion
in the foregoing provision ofthe phrase provided the right is reserved
as required in the preceding section, resulted in a debate among
academicians which lasted for more than twenty years.
Finally, interpreting the above provision, the Supreme Court,
in Carcia us. Florido, declared:
"As we have stated at the outset, the same negligent act
causing damages may produce a civil liability arising from crime

or create an action for quasi-delict or culpa extra-contractual.

"5Art. :12. Civil Code.

sArt. 33. Civil Code.

6oArt.31, Civil Code.

G'Tolentino vs. Carlos,39 OU. (laz., N,, (i,p. l2l

6'San Pedro Bus Line vs. Nrvlrr('. l),1 l'hil. 8.1{)i lnirDrld(
Co.. ? SCRA 2?6.

63Art.217fi, cl srr7., { ltvil

Art

GF:NERAT, PROVISIONS

OBT,I(}ATIoNS

"iIbid.

r vs. li,lrrl Ltttul 'l\ tttts

'"lbttl.
d"Art

"'Art.217?, (livil (irL: llrrllr,rL' r,r t;,,r rr irrrl Al'r'r'r',,,'/ll l'lrl l;lr'/. l)yoxr vB
Yatco, l{)O l'hrl. lol},i,, ( rrl', rrr I'r'r,r1\,. lolr l'l'rl l ll2, Slr"r!r! vr' li'r'. lrr'/ l'l'rl ll)11

lr;

:14.

(iivil (ixl{

r"Arls.:12, il:1, l).1, (livil

irl

(ixl(.

rL5:ls('laA,lto'lhrs.rsr.wrrsrrlsocrlrrl rrrrl rlrrrlr'tl in Mt'ttdoztt

s(

ItA I ti

Ii

vs.

Arriclit.9l

Ad.

1161

OBLIGATIONS

The former is a violation ol the criminal law, rvhile the latter is

a distinct and independcnt ncgligence, having always had its
own foundation and individuality. Sorne legal writers are of the
view that in accordance with Article 31. tht: civil action based
upon quasi-delict, may proceed independently of the criminal
procecding frrr criminal negligence and regardlcss of the result
of the latter. Hence, 'the proviso in Section 2 of Rulc 111 with
reference to Articlcs 32, 33 and 34 of the Civil Code is contrary

to the letter and spirit of the said articles, for these articles
were dralted and are intended to constitute as exceptions to
the general rule stated in what is now Section I of llule 111.
The proviso, which is procedural, may also bc regarded as an
unauthorized amcndment ofsubstantivc law-'x x x"
Again, in AbeLlano us. Merobe,,, the Supreme Court declared:
"The restrictive interpretation x x x does not only result
in its emasculation but also gives rise to a serious constitutional
doubt. Article 33 is quite clear: 'In case ofx x x physical injuries,
a civil action for damages entirely separate and distinct from the
criminal action, may be brought by the injured pafty. Such civil
action shall proceed independently of the criminal prosecution,
and shall require only preponderance of evidence.' That is a
substantive right not to be frittered away by a construction
that would render it nugatory, if through oversight, the
offended parties failed at the initial stage to seek recovery for
damages in a civil suit. x x x The g"ant of power to this Court
both in the present Constitution and under the 1935 Charter
does not extend to any diminution, increase or modification of
substantive right. It is a well-settled doctrine that a court is to
avoid construing a statute or legal norm in such a manner as
would give rise to a constitutional doubt. x x x The law as an
instrument ofsocial control will fail in its function ifthrough an
ingenious construction sought to be fastened on a legal norm,
particularly a procedural rule, there is placed an impediment to
a litigant being given an opportunity of vindicating an alleged

right."

GENF]RAI, PROVISIONS

Art. 1162

ofintent to kill, coupled with a mistake' the Supreme

despite
the lhct that the plaintiffs (who are the parents
Court held,
because oflack

of the alleged victim) failed to make a reservation of their right

to institute the civil action separately, that such acquittal of the
defendant in the criminal case has not extinguished his liability
for quasi-delict under Al1. 2176 of the Civil Code; hence, that
acquittal is not a bar to lhe civil action against him. The same
ruling was applied in Mendoza us. Arrieta.'n IL effect, the procedural
requirement provided for in Section 2 of Rule 111 ofthe New Rules
of Court is not mandatory.
Rernoval of Reservation Requirement For Independent

Civil Actions
Accordingly, Section 2 of the New Rules of Court was likewise
amended to read as:
"SEC. 3. When ciuil action moy proceed independ'ently.
In the cases provided in Articles 32, 33, 34 and 2176 of the
Civil Code of the Philippines, the independent civil action may
be brought by the offended party. It shall proceed independently
ofthe criminal action and shall require only a preponderance of
evidence. In no case, however, may the offended party recover
damages twice for the same act or omission charged in the
criminal action." (8etised. Rules of Criminal Prccedure 2000).

Under the former rule, the foregoing actions may only be

ifthere is a reservation, or were filed ahead ofthe criminal
action. (Justice Oscar M, Herrera, Treatise on Criminal Procedure,

allowed

February 2001).

Art. 1162. Obligations derived from quasi-delicts shall

be governed by the provisions of Chapter 2, Title XVII of the
Book, and by special laws.?i

it is used
- Asrefers
to all
the
term
"quasi-delicts""
in this part of the Civil Code,
quasilaw,
contracts,
not
arise
from
of those obligations which do
Obligations Arising from Quasi-Delicts.

Thus, in Elcano us. FIi1l,., where the first defcndant had

with the criminal oflcnsc of'homicide and
subsequently acquitted on thc ground t.hirl his rrct. is not crintinal,

been previously charged

191 S('Rn l !3.

rr'Arl. lollil, S1) rish (livil (ixL . irr rrnr, ntli'rl lirrrn

257 SCIiA r(x;

;r?7 s{ tta^ 9r{

;"ln S;rrrrrrslr lirw. i rtrrst ./,'//r,,s

tulp

lll

trrfur

t.,tt, tttNl.

's

so'r), lrrrr( s

lt)

kll,,wn I's \atl/t dquilia a rt

Art

11ri2

OBLIGATIONS

(IENERAL PROVISIoNS

contracts, or criminal offenses.?? Thus, using Art. 217ti of the Civil

Code and decided cases as bases or anchors, it may be defined as the
fault or negligence ofa person, who, by his act or omission, connected
or unconnected with, but indcpendent from, any contractual relation,
causes damage to another pcrson. It is, therefore, lhe equivalent of
the term "tort" in Anglo-American law.'n

observed all the diligence of a good father of a family to prevent

damage."

Idem; Persons liable. - Obligations arising from quasidelicts are demandable not only from the person directly responsible
for the damage incurred,', but also against the following:

(1) The father and, in case of his death or incapacity, the

mother, with respect to damages causcd by the minor children who
live in their company;
(2)

Guardians, with respect to damages caused by the minors

or incapacitated persons who arc under their authority and who live
in their company;

(3) The owners and

managers of an establishment or
enterprise, with respect to damages caused by their employees in
the service of the branches in which the latter are employed or on
the occasion of their functions:

(4)

Employers with respect

to

damages caused by their

Arl.

1162

Idem; R.equisites of liability. - In actions based on quasidelicts, before the person injured can recover damages {rom the
defendant, it is necessary that he must be able to prove the following
lacts:

(1)
(2)
(3)

The fault or negligence ofthe defendant;

The damage suffered or incurred by the plaintiff; and

The relation of cause and effect between the fault or

of the defendant and the damage incurred by the

negligence
plaintiff.*,

Idem; Quasi-delicts and crimes. - Quasi-delicts and criminal offenses are sometimes difficult to distinguish from each other.
However, they may be distinguished from each other in the following ways:

(1)

Crimes affect the public interest, while quasi-delicts are

only of private concern;

(2) The Penal Code punishes or corrects the criminal act,

while the Civil Code, by means of indemnification, merely repairs
the damages incurred;

employees and household helpers acting within the scope of their

assigned tasks, even though the forrner are not engaged in any
business or industry;

(3) Generally, there are two liabilities in crime: criminal and

civil. In quasi-delict, there is only civil liability; and

(5) The State, when it acts through a special agent; but not
when the damage has been caused by the oflicial to whom the task
done properly pertains; and

(4) Crimes are not as broad as quasi-delicts, because the

fbrmer are punished only if there is a law clearly covering them,
while the latter include all acts in which any kind of fault or

(6)

Lastly, teachers or heads of establishments of arts and

trades, with respect to damages caused by their pupils and students
or apprentices, so long as they remain in their custody.*u

It must be noted, however, that the responsibility of the above

persons or entities shall cease if they can prove that they have
?'Report of tho (l{trli' (lornnrissi('r.
t)
l'See Elcanoand lllcrrno vs. llrll,'rxl

l'Art. 2l?(;. ( livil ( iri'

iA

2l80, (livrl ( ,r1,.

llil
llrll. /;S( lt^

negligence intervenes.'''

Idem; Scope of quasi-delicts. ln Elcano us. 1{rll {G.R. No.

L-243O3, May 26, 1977), the Supreme Court held that quasi-delicts
include acts which are criminal in character or in violation of the
penal law, whether voluntary or negligent. Using the exact language

of the Court, "it is 'more congruent with the spirit of law, equity
andjustice, and more in harmony with modern progress,'to hold, as

l)t{

"/'lirylr,r vs M,rrril:r l,llrrlr'ir (ir, lr; I'l,il I

"'ll,'r',,,1,, vs (ilri',r lr)rl Alrnr,, /ilI'hrl (i07

:ll

OBT,TCATIONS

(}ENERAI PROVISIONS

we do hold, that Article 2776, where it refers to lault or negli5;ence,

covers not only acts not punishable by laut but also acts criminal in
character, whether intentional or voluntary or negligent."

also intentionrrlcriminal acts, such as assault and battel1, false

imprisonmont rrnd deceit. In the general plan of the Philippine
legal system, irrtentional and malicious acts are governcd by
the Penal Orxft', rrlthough certain exceptions are made in the

Art. 1162

The above pronouncement of the Supreme Court is

startling. It expands the coverage of quasi-delicts beyond what
was originally contemplated by thc larwmaker.

Under the general plan ofour law on obligations, the scope

of obligations arising from the law, contracts, quasi-contracts,
and acts or omissions punished by law is well-defined. Their
boundaries are clearly delineated and drawn with precision. It
is only with respect to obligations arising from quasi delicts that
there is a problem and this is natural because ofthe very nature
ofsuch obligations. Under our system ofliabilities, quasi-delicts
must necessarily be a sort of"dumping ground" or "garbage can"
for all kinds of actionable wrongs not falling within the puryie\4.
of the four sources of obligations. As we look at it, the original
plan envisaged by the lawmaker is as follows:

The coverage of quasi-delicts which do not overlap with

crimes under the Revised Penal Code and special laws (and
which we can very well call the general rule) are: ifrst, negligenl
acts or omissions not punishable as criminal offenses; secozd,
intentional quasi-delicts or torts, such as those regulated by
Arts. 19, 21, 22,26,27,28 and 1314 of the Civil Code; and
third., lhe so-called strict liability torts where there is neither
negligence nor intent to cause damage or injuqf, such as in the
case contemplated in Art. 23 of the Civil Code or in the case of
actionable nuisances undcr Arts. 694 and 705 of the Civil Code.

The coverage of quasi-delicts which overlap with acts

or omissions punishable under the Revised Penal Code (and
which we can very well call the exceptions) are: ,/trst, criminal

negligence; aod second, acts or omissions punishable as crimes

under the Revised Penal Code but the Civil Code expressly
declares that the civil action rLrising therefrom is separate and
independent from the criminal action. (Arts. 31, 32, 33 and 34 of
the Civil Code)
We believe that the above arrangemcnt was deliberately
planned. Thus, according to the (bde Commission in its ll(lport:
"The Commission also thoughl. of llrr' lxrssibilil.v of irrlopting
the word'tod'from Anglo Anrr.ricrrrr l;rw. lhrl '1.('rl rrntl.r l.hrri.
system is much br(rr(icr Llrrrn llrl Sp;rrrrslr-l'hilippirrc corl.r.pl
of obligations arisitrll li,rrrr rrorr lorrIlrrtIrrrrI rrlgliglrrcr. 'lirrl. irr
Anglo-Anrcrictrtr jrrlrsgrrrlr.rrr'r.rrrr lrtr|l,s rrol orrly rrrlllrglrrtr,. Irul.

Art. 1162

Project." (Rr1xrrt. pp. 161-162)

us. Roble.s,* in his
- In Padua
is by now beyond
"It
.Iustice
Barredo
declared:
concurring opinion,
jurisprudence,
that a
all cavil, as to dispense with the citation of
gives
rise
to at
negligent act, such as that committed in this case,
(1)
the civil
least two separate and independent liabilities, namely

Idem; Character of remedy.

liability arising from crime or culpa criminol and (2) the liability
arising from civil negligence or the so-called culpa aquiliana.
These two concepts of faults are so distinct from each other that

exoneration from one does not result in exoneration from the other'
Adjectively and substantively. they can be prosecuted separately
and independently of each other, although Lt'ticle 2177 of the Civil
Code precludes recovery of damages twice for the same negligent
act or omission, which means that should there be varying amounts
awarded in two separate cases, the plaintiff may recover, in effect,
only the bigger amount. That is to say, if the plaintiff had already
been ordered paid an amount in one case and in the other case the
amount adjudged is bigger, he shall be entitled in the second case
only to the excess over lhe one fixed in the first case, but if he had
already been paid a bigger amount in the first case, he may not
recover anyrnore in the second case."

The above opinion was conlirmed in Elceno us. I1ill." Thus,

according to the Supreme Court: "Consequently, a separate civil
action lies against the offender in a criminal act, whether or not he
is criminally prosecuted and found guilty or acquitted, provided that
the offended party is not allowed, ifhe is actually charged criminally,
to recover damages on both scores, and would be entitled in such
eventuality only to the bigger award of the two assuming that the
awards made in the two cases vary. In other words, the extinction of
the civil liability refened to in Par. (e) ofSection 3, Rule 111, refers
exclusively to civil liability founded on Article 100 of the Revised
Penal Code, whereas the civil liability for the same act considered
-{;{i S1'laA ,tltl')
"?7 S|kn 98

OBLIGATIONS

(}ENERAI PRO\ISIONS

as a quasi-delict only and not as a crime is not extinguished even by

a declaration in the criminal case that the criminal act charged has

the sentence of the lower court in the criminal case. Severino

Garcia and'Iimotea Almario, parents ofthe deceased on March
7, 1939, brought an action in the Court of First Instance of
Manila against Faustino Barredo as the sole proprietor of the
Malate Taxicab and employer of Pedro Fontanilla. On July 8,
1939, the Court of First lnstance of Manila awarded damages
in favor of the plaintills for P2,000 plus legal interest from the
date ofthe complaint. This decision was modified by the Court of
Appeals by reducing the damages to P1,000 with legal interest
from the time the action was instituted. It is undisputed that

Art.

'l '162

not happened or has not been committed by the accused."

However, in Mendozaus. Arrietq,"" amore recent case, there was
return to the old doctrine of selection ofremedies. In this case, the
Supreme Court categorically held that since the offended or injured
party had chosen the remedy ofproceeding under the Revised Penal
Code by allowing the civil action to be impliedly instituted in the
criminal action, and sinc the court had expressly declared that the
fact from which the civil liability did not exist, therefore, the civil
action for damages subsequently commenced by said injured party
against the defendant has already been extinguished in consonance
with Sec. 3(c), Rule 111 ofthe Rules of Court. And even if plaintiffs
cause of action against defendant is nol ex-delicto, the end result
would be the same, it being clear from the judgment in the criminal
case that defendant's acquittal was not based upon reasonable
a

doubt.
Thus, the problem is still very much with us. The debate rages
on.

Barredo vs. Garcia and Atnario

73 Phil. 60?
This case come up from the Court of Appeals which held

the petitioner herein, Fausto Barredo, liable in damages for

the death of Faustino Garcia caused by the negligence of Pedro
Fontanilla, a taxi driver employed by said Fausto Barredo.

At about half past one in the morning of May 3, 1936,

on the road between Malabon and Navotas, Province of Rizal,
there was a head-on collision between a taxi of the Malate
Taxicab driven by Pedro Fontanilla and a carretela guided by
Pedro Dimapilis. "the carretela was overturned, and one of its
passengers, 16-year-old Faustino Garcia, sulfered injuries from
which he died two days later. A criminal action was filed against
Fontanilla in the Court of First Instance of Rizal, and he was
convicted and sentenced to an indeterminate sentence of one
year and one day to two years ofprlslon correccional. Thc court
in the criminal case granted the pctition that the right to bring ir
scparatc civil action bo n.sr.rvrrl. 'l'lrr' ( i rrr rl. of Aplx'rrls rrllirrnrrl

Art.

Fontanilla's negligence was the cause of the mishap, as he was

driving on the wrong side of the road, and at high speed. As to
Barredo's responsibility, the Court ofAppeals found:
"* * * Itis admitted that defendant is Fontanilla's employer.
There is no proofthat he exercised the diligence ofa good father
of a family to prevent the damage. (See p. 22, appellant's brief.)
In fact it is shown he was careless in employing Fontanilla who
had been caught several times for violation of the Automobile
Law and speeding (Exnibit A) - violations which appeared in
the records ofthe Bureau ofPublic Works available to the public
and to himself. Therefore, he must indemnify plaintiffs under
lhe provisions ofArticle 1903 ofthe Civil Code."

The main theory of the defense is that the liability of

Fausto Barredo is governed by the Revised Penal Code; hence,
his liability is only subsidiary, and as there has been no civil
action against Pedro Fontanilla, the person criminally liable,
Barredo cannot be held responsible in this case. The petitioner's
brief states on page 10:
"* * * The Court ofAppeals holds thatthe petitioneris being
sued for his failure to exercisc all the diligence of a good father
of a family in the selection and supervision of Pedro Fontanilla
to prevent damages suffered by the respondents- In other words,

the Court of Appeals insists on applying in this case Article

1903 ofthe Civil Code. Article 1903 ofthe Civil Code is found in
Chapter 11, Title 16, Book IV ofthe Civil Code. Ttris fact makes
said article inapplicable to a civil liability arising from a crime
as in the case at bar simply bccause Chapter II of Title 16 of
Book lV ofthe Civil Code, in precise words ofArticle 1903 ofthe
Civil Cod itself, is applicable only to "those (obligations) arising
from wrongful or negligent acts or omissions not punishable by
'l'he gist ofthc rlccision ol thr' ( lorrrt ol Appoals is trxpressed
I

{dgl s( ILA I t:t

:l l

hrH:

',,.|'

1162

Art

ORI,ICA'l'IONS

GENERAL PROVISIONS

(* )k * We cannot agree to the dolilndant's contention.

The liability sought to be imposed upon him in this action is
not a civil obligation arising from a felony or a misdemeanor
(the crime of Pedro Fontanilla), but an obligation imposed in
Article.1903 ofthe Civil Code by reason ofhis negligence in the

or culpa extra-contractual. 'lhe same negligent act causing

damages may produce civil liability arising from a crime under
Article 100 of the Revised Penal Code, or create an action for

Art. 1162

cu.tsi-d.elito ot culpd ertra-conttactu(tl under Articles 1902-1910

ofthe Civil

Code.

selection or supervision ofhis servant or employt)e."

xxx

Speaking through Justice Bocobo, the Supreme Court held:

"The pivotal question in this case is whether the plaintiffs
may bring this separate civil action against Fausto Barredo,
thus making him primarily and directly responsible under
Article 1903 (nou Art. 2180, New Civil Code) ofthe Civil Code as
an employer ofPedro Fontanilla. The defendant maintains th:rt
Fontanilla's negligence being punishable by the Penal Code,
his (defendant's) liability as an employer is only subsidiary,
according to said Penal Code, but Fontanilla has not been sued
in a civil action and his property has not been exhausted. To
decide the main issue, we must cut through the tangle that has,
in the minds of many, confused and jumbled together delilos
and czasi delitos. or crimes under the Penal Code and fault or
negligence under Articles 1902-1910 (now Arts. 2176 to 2794,
New Civil Code) ofthe Civil Code.

"Authorities support the proposition thal a quasi-delict ot

"culpa aquiliana" is a separate legal institution under the Civil
Code, with a substantivity all its own, and individuality that is
entirely apart and independent from a delict or crime. Upon this
principle, and on the wording and spirit of Article 1903 of the
Civil Code, the primary and direct respr.rnsibility of employers
may be safely anchored.

xxx
"It will thus be seen that while the terms ofArticle.1902
of the Civil Code seem to be broad enough to cover the driver's
negligence in the instant case, nevertheless Article 1093 limits
cuasi-d,elitos to acts or omissions "not punishable by law." But
inasmuch as Article 365 of the Revised Penal Code punishes
not only reckless but even simple imprudence or negligence,
the fault or negligence under Article 1902 of the Civil Code has
apparently been crowded out. It is this overlapping tlrat makos
the "confusion worse confoundt'd." However, a clrsor study
shows that such a eoncttrroncc ol srrrlx' in rogllrd t{) lll.glig('lll
acts does not dcst.roy lhc rlislirtcliorr lx'lwrttr llrl civil Iirrlrilill

arising lirrnr

crirr(, llr{l tlrI rIslrrrrsilrililv lin

:l{i

tt:tt

,hlrkn

The foregoing authorities clearly demonstrat the separate

individuality ofcuo si-delitos or culpa aquiliana under the Civil

Code. Specifically they show that there is a distinction between
civil liability arising from criminal negligence (governed by the
Penal Code) and responsibility for fault of negligence under
Articles 1902 to 1910 of the Civil Code, and that the same
negligent act may produce either a civil liability arising from
a crime under the Penal Code, or a separate responsibility for
fault or negligence under Articles 1902 to 1910 of the Civil
Code. Still more concretely, lhe authorities above cited render
it inescapable to conclude that the employer - in this case the

defendant-petitioner is primarily and directly liable under

Article

1903 of the

Civil

Code.

The legal provisions, authors, and cases already invoked

should ordinarily be suJficient to dispose of this case. But

inasmuch as we are announcing doctrines that have been little
understood in the past, it might not be inappropriate to indicate
their foundations-

"Firstly, the Revised Penal Code in Article 366 punishes

not only reckless but also simple negligence. If we were to hold
that Artictes 1902 to 1910 ofthe Civil Code refer only to fault or
negligence not punished by law according to the literal import
of Article 1093 of the Civil Code, the legal institution of culpa
aquiliana would have very little scope and application in actual
life. Death or injury to persons and damage to property through
any degree of negligence - even the slightest would have to
be indemnified only through the principle ofcivil liability arising
from a crime. In such a state ofaflairs, what sphere would remain
for cuasi-delito or culpa aquiliana? We are loath to impute to
the lawmaker any intention to bring about a situation so absurd
and anomalous. Nor are we, in the interpretation of the laws,
disposed to uphold the letter that killeth rather than the spirit
that giveth life. We will not use the literal meaning of the law
to smoiher and render almost lifeless a principle ofsuch ancient
origin and such lull-grown dt'velopment as culpa aquiliana or
crtrrsi rltli t, which is const'rvctl and madt' onduring in Articles
M)2 li, M lO r)l l.hl Spnnirh ( livil (ixlc.
2't

1162

Art

"Secondly, to find the accused guilty in a criminal case,

proof of guilt beyond reasonable doubt

is required, while in
is sullicicnt to make

a civil casc, preponderance of evidence

thc defendant pay in damages. There are numerous cases of
criminal ncgligence which can not be shown beyond reasonable
doubt, but can be proved by a preponderance of t:vidence. In
such cascs, the defendant can and should be madc responsible
in a civil action under Articles 1902 to 1910 of the Civil Code.
Otherwise, there would be many instances of unvindicated civil
wrongs. U6i ju.s ibl remedium.
"Thirdly, to hold that there is only one way to make defendanl's liability cffective, and that is, to sue the driver and
cxhaust his (the latter's) property first, would be tantamount
to compelling the plaintiff to follow a devious and cumbersome
method of obtaining reliei True, there is such a remedy under our laws, but thcre is also a more expeditious way, which
is based on the prirnary and direct responsibility of the defendant under Article. 1903 ofthe Civil Code. Our view ofthe law
is more likely to facilitate remedy for civil wrongs, because the
procedure indicated by the defendant is wasteful and productive
of delay, it being a matter of common knowledge that professional drivers of taxis and similar public conveyances usually
do not have sufficient means with which to pay damages. Why,
then, should the plaintiff be required in all cases to go through
this roundabout, unnecessary, and probably useless procedure?
In construing the laws, courts have endeavored to shorten and
facilitate the pathways ofright and justice.

base this primary responsibility ofthe employer on the principle

of representation of the principal by the agent. 'Ihus, Oyuelos

says in the work already cited (Vol. 7 , p. 7471 lhat beforc third
persons the employer and employee 'lienen a ser conto una sola
personalid.atL, por refuntlicionde La del dependiente en la rle quien
le emplea y utiliza" ("become as one personality by the merging
of the person of the employee in that of him who employs and

utilizes him.") All these observations acquire a peculiar force

and significance when it comes to motor accidents, and there is

need of stressing and accentuating the responsibility of owners
of motor vehicles.

"Fourthly, because ofthe broad sweep ofthe provisions of

both the Penal Code and the Civil Code on this subject, *'hich
has given rise to the overlapping or concurrence of spheres
already discussed, and for lack ofunderstanding ofthe character
and effrcacy of the action fot culpa oquiliana, there has grown
up a common practice to seek damages only by virtue of the
civil responsibility arising from a crime, forgetting that there
is another remedy, which is by invoking Articles 1902-1910 of
the Civil Code. Although this habitual method is allowed by
our laws, it has nevertheless rendered practically useless and
nugatory the more expeditious and effective remedy based on
culpo aquiliana ot ertra-coitractudl.

"In view of the foregoing, the judgment of the Coud of

Appeals should be and is hereby alfrrmed, with costs against the

defendant-petitioner."

"At this juncture, it should be said that the primary

and direct responsibility of employers and their presumed

Dlcano vs.

and employees should be carefully chosen and supervised in

order to avoid injury to the public. It is the masters or employers
who principally reap the prolits resulting from the services of
these servants and employees. It is but right that they should
guarantee the latter's careful conduct for the personal and
patrimonial safety of others. As Theilhard has said, "they
should rcproach themselves, at least, some for their weakness,
others for their poor selection and all for their negligence." And
according to Manresa, "It is much morc equitable and jusi that
such responsibility should fall upon the principal or direcl,or
who could have chosen a carofirl :rnd prudent ernploycc, and not
upon the injurod pcrson who corrkl nrrl. cxr'rcisc srrclt sr.kx.l.ion
and who uscd such r,rrrgrl,'ycr. lx.r'rrttsc ol his conlirlcncr, irr thr.
rrr

dirrr{rr

"

Vol

:,|.

It

ll'.).2,

2t

l )rl. )

Mrrrry irrr.rxl x rrlso

Hill

77 SCRA 98

negligence are principles calculated to prolect society. Workmen

principrl

Ar1. 1162

GI]NI]RAT, PROVISIoNS

OBLIGATrcNS

I I {;2

This is an appeal fiom an order of the Court of First

Instance of Quezon City dismissing the complaint of plaintiffs
for recovery of damages from defendant Reginald Hill, a minor,
married at the time of occurrence, and his father, defendant
Marvin Hill, with whom he was living and getting subsistence,
for the killing by Reginald of the son of the plaintiffs, of which
when criminally prosecuted, the said accused was acquitted
on the ground that his act was not criminal, because of lack of
intent to kill, coupled with

a mistakc. According to the Supreme

Coud, speaking through Justit! Barrcdo:

"As Wc view the lirn.going background ofthis case, the two
d{'cisivc issucs proscnltrl lirr ( )rtr rcsolution rlrt':

ls l.lrr, l)r('sr.ri ( ivil rrllirrrr lirl rlrrrrrrrgcs lrrrrrt'rl

,.).lt

lrl

l.ltc

Art.

Art. 1162

OBLIGATIONS

GENERAL PROVISIONS

acquittal ol Reginald in the criminal case whcrein the action for

which was enacted after the Garcia doctrine, no longer uses the
term, 'not punishable by law," thereby making it clear that the
concepl of culpa aquiliana includes acts which are criminal in
character or in violation of the penal law, whether voluntary or

1162

civil liability was not

reser-ved?

2. May Article 2180 (2nd and last paragraphs) of the

Civil Code be applied against Atty. Hill, notwithstanding the
undisputed fact that at the time ofthe occunence complained of,
Rcginald, though a minor, living with and getting subsistence
from his father, was already leg. ly married?
"'lhe first issue presents no more problem than the need
for a reiteration and further clarification of the dual character,
criminal and civil. of fault or negligence as a source ofobligation
which was firmly established in this jurisdiction in Banedo us.
Garcia,73 I'hiL.607. In that case, this Court postulated, on the
basis ofa scholarly dissertalion by Justice Bocobo on the nature
of culpa aquiliana in relation to cuLpa crimirwl or delito ar'd
mere c&lpo or fault, wilh pertinent citation of decisions of the
Supreme Court of Spain, the works of recognized civilians, and
earlier jurisprudence of our own, that the same given act can
result in civil liability not only under the Penal Code but also
under the Civil Code.

"Contrary to an immediate impression one might gct upon

a reading of x x x Garcia - that the concurrence of the Penal
Code and thc

Civil Code therein referred to contemplate only

acts of negligence and not intentional voluntary acis - deeper

reflection would revcal that the thrust of the pronouncements
therein is not so limited, but that in fact it actually extends to
fau.It or cul.pa. This can be secn in the relerence made therein to
the Sentence ofthe Supreme Court ofSpain ofFebruary 14, 1919,
srpro, which involvcd a case of fraud or estafa, not a negligent
act. Indeed, Articlr: 1093 ofthe Civil Code ofSpain, in force here
at the time of Garcia. provided textually that obligations which
are derived from acts or omissions, in which fault or negligence,
not punisho,ble bt ld.r., inter-vene shall be the subject of Chapter
II, Title XV ofthis book (which refers to qzasl-delicls.)" And it is
precisely the underlined qualification, "not punishable by law,"
that Justice Bocobo emphasized could lead to an undesirable

construction or interpret.rtion of the letter of the law that

"killeth, rather than the spirit that giveth life" hence, the ruling
that "(W)e will not use the literal meaning ofthe law to smothcr
and render almost lifeless a principlc ol such ancient origin and
such full-pgown developmcnt ls lrl,pxr rrquiliona or cuasi rltlito,
which is conserved and rnrrrl'r'rrrlrrritrA in Articlcs 1902 l.rt l!)10

ofthe Spanish Civil (ixir'." Arrrl so, lx,r':rttso Jrrsl.iuc lixolxr wus
Chairman ol llrr' (lrL. ('otrrtrrrrrrrtotr llrrrl rllrrllr'<l Ilrc oligirrrrl
toxtof l.hlrrr,w(livil { ixlr'. rl lr lo lr rrollrl llrrrl. llrlsrrirl (ixL',
ll0

negligent. Thus, ihe corresponding provision to said Article 1093

in the new code, which is Article 1162, simply says, "Obligations
derived from quasi'deLi.cts shall be governed by the provisions
of Chapter 2, Title XVll of this Book kn quasi delicts), and bv
special laws." More precisely, a new provision, Article 2177 of
the new code provides:

"ART.2177. Responsibility for fault or negligence

underthe preceding article is entirely separate and distinct
from the civil liability arising from negligence under the
Penal Codc. But the plaintiff cannot recover damages
twice for the same act or omission ofthe defendant."
According to the Code Commission: "The foregoing provision (Article 2177) though at first sight startling, is not so novel
or extraordinary when we consider the exact nature ofcriminal
and civil negligence. The former is a violation of the criminal
law, while the latLer is a culpa aquiliana or quasi'delict, of an'

cient origin, having always had its own foundation and individuality separate from criminal negligence. Such distinction
between criminal negligence and culpo ertrQ'.:ontftictual ot: cu'

asi-d,elito hasbeen sustained by decisions of the Supreme Court

of Spain and outstanding Spanish jurists. Therefore, under the
proposed Article 2177, acquittal from an accusation of criminal
negligence, whether on reasonable doubt or not, shall noi be
a bar to a subsequent civil action, not lbr civil liability arising
from criminal negligence, but for damages due to a quasi<lelict
or culpa aquiliana. But said article forestalls a double recovcry."
(Report ofthe Code Commission, p. 162.)

Although, again, this Article 2177 does seem to literally

refer to only acts of negligencc, the same argument of Justice
Bocobo about construction that upholds "thc spirit that giveth
life" rather than that which is literal that killeth the intent of
the lawmaker should be observed in applying the same. And
considcring that the preliminary chapter on human relations of
the new Civil Code dcfinitely establishes the separability and
independencc ol liability in a civil action for acts criminal in
charrrcter (undcr Artick's .29 to:l2) from lhe civil responsibility
rrrising fnrnr crinx' {ixcrl bv Arl.icle 100 of the Revised Penal

(lorl', rrtrrl, in tt st'trsr'. thl ltrrlls rrl (lorrrt., ttnrltrr Scctions 2 and
:llr.l, lirl{' lll, r'orrlcnrplrrl.r'rrlso lltc s:tntt'st'pitritlrilit.v, il is "morrr

:ll

Art. 1162

OBI,IGATIONS

GFJNERAL PROVISIONS

congment with the spirit of law, equity and justice, and more
in harmony with modern progress," to borrow the felicitous
relevant language in /?oAes us. Atlantic Gulf and Paciftc Co.,7
Phil. 359, to hold, as We do hold, that Article 2176, where it refers
to "fault or negligence," covers not only acts "not punishable by
law" but also acts criminal in character, whether intentional
and voluntary or negligent. Consequently, a separate civil action
lies against the offender in a criminal act, whether or not he is
criminally prosecuted and found guilty or acquitted, provided
that the offended party is not allowed, if he is actually charged
also criminally, to recover damages on both scores, and would
be entitled in such eventuality only to the bigger award of the
two, assuming the awards made in the two cases vary. In other
words, the extinction of civil liability referred to in Par. (e) of
Section 3, Rule III, refers exclusivcly to civil liability founded on
Article 100 ofthe Revised Penal Code, whereas the civil liability
for the same act considered as a quasi-deLict only and not as a
crime is not extinguished even by a declaration in the criminal
case that the criminal act charged has noi happened or has not
been committed, by the accused. Briefly stated, We here hold, in
reiteration of Garcia, that t:ulpa aquiliana includes voluntary
and negligent acts which may be punishable by law.

Now, underArticle 2180, "The obligation imposed by Article

2176 is demandable not only for one's 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." In the insiant case, it is not controverted
that Reginald, although narried, was living with his father and
getting subsistence from him at the time of the occurrence in
question. Factually, therefore, Reginald was still subservient to
and dependent on his father, a situation which is not unusual.

Art. 1162

It results, therefore, that the acquittal of Reginald Hill in

the criminal case has not extinguished his liability for quasitlelict, hence that acquittal is not a bar to the instant action
against him.

Coming now to the second issue about the effect of

Reginald's emancipation by marriage on the possible civil
liability ofAtty. Hill, his father, it is also Our considered opinion
that the conclusion of appellees that Atty. Hill is already free
from responsibility cannot be upheld.
While it is true that parental authority is terminated upon
emancipation of the child (Article 327 , Civil Code), and under
Article 397, emancipation takes place "by the marriagc of thc
rninor (child)," it is, however, also clear that pursuant to Afticle
399, emancipation by marriage of the minor is not really full
or absolute. Thus "Emancipation by marriage or by voluntary
concession shall terminate parental aulhority over the child's
person. It shall enable the minor to administer his propcrty ls
though he were ofage, but hc crrnnol brrrrrrw tnont'y {)r rtliolrltl.('
or encumbcr rcal properl.y wil horrl I hI r'orrscnl ol his lirl lr0r or
mother, or guardirtn. IL'crrrr srrr. rrrrrl lx sttr'<l itt cottrl otrlv wit.lt
the assistance ol his lirllrcr. rrroIIrll or'11rrrrlrIirrrr.
:t:t

"It must be borne in mind that, according to Manresa, the

reasonbehind thejointand solidaryliability of parents withtheir
offending child under Article 2180 is that it is the obligation of
the parent to supervise their minor children in order to prevent
them frorn causing damage to third persons. On the other hand,
the clear implication of Article 399, in providing that a minor
emancipated by marriage may not nevertheless, sue or be sued
without the assistance ofthe parents, is that such emancipation
does not cafif/ with it freedom to enter into transactions or do
any act that can give rise to judicial litigation. (See Manresa,
id., Vol. II, pp. 766-767,776.) Ard surely, killing someone else
invites judicial action. Otherwise stated, the marriage of a
minor child does not relieve the parents of the duty to see to
it that the child, while still a minor, does not give cause to any
litigation, in the same manner that the parents are answerable
for the borrowing of money and alienation or encumbering of
real property which cannot be done by their minor married child
without their consent. (Art. 399; Manresa, supra.)
"Accordingly, in Our considered view, Article 2180 applies
to Atty. Hill notwithstanding the emancipation by marriage of
Reginald. However, inasmuch as it is evident that Reginald is
now of age, as a matter of equity, the liability of Atty. Hill has
become merely subsidiary to that ofhis son.

"WHEREFORE, the order appealed from is reversed and

the trial court is ordered to proceed in accordance with the

foregoing opinion. Costs against appellees."

Mendoza vs. Arrieta

9r scRA 113
The records show that a three-way vehicular accident
rxrrrrred involving ir Mcrcedt's Benz owned and driven by
lilgrrrdo Mt'ndozt, :r privrl.r'.i(\rp owncd and drivcn by Rodolfo
Srrlrrzrrr irnd rr srrnrl rrntl gt rrvll Lrrtck rrwnr'tl by l'clipino 'limbol

Art.

ORI,TGATTONS

GI]NERAL PROVISIONS

and driven by Freddie Montoya. As a consequence ofthe mishap,

no idenlity of cause of action between Crrminal Case No. SM22? and Civil Case No. 80803. Obvious is the lact that in said
criminal case truck-driver Montoya was not prosecuted for
damage to petitioncr's car but for damage to the jeep. Neither
was truck-owner Timbol a party in said case. In fact as the
trial Court had put it. "the owner of the Mercedes Benz cannot
recover any damages from the accuscd Freddie Montoya, he
(Mendoza) being a complainant only against Rodolfo Salazar
in Criminal Case No. SM-228." And more importantly, in the
criminal cases, the cause of action was the enforcement of the

Ar1 1162

two separate criminal actions for damage to property through

reckless imprudence were instituted. The first was instituted
by Mcndoza against Salazar, while the second was instituted
by Salazar against Montoya. There was no reservation made
by both complainants of their right to institut a civil action
separately. After hearing the two cases jointly, the court
rendered judgment acquitting Salazar on the ground that his
jeep was bumped from behind by the truck causing it to collide
with the Mercedes Benz. Montoya, on lhe other hand, was
convicted on the ground that his guilt was established beyond
reasonablc doubt. He was ordered to pay to Salazar the amount
of P972.50 for actual damages to the latter's jeep. After the
termination of the criminal cases. Mendoza filed a civil case.
against both Salazar and'fimbol, either in the alternative or
in solidum, for indemnilication lbr damages. Upon motions of
both defendants, the respondent court dismissed the case. The
plaintiff. as a consequence, went up to the Supreme Court by
means of a petition for certiorari seeking a review of the orders
of dismissal. Speaking through Justice Herrera, the Supreme
Court held:

"We shall first discuss the validity of the Order, dated

September 12, 1970, dismissing petitioner's Complaint against
truck-owne' Timbol.

"In

dismissing the complaint against the truck-owner,

respondent Judge sustained Timbol's allegations thnt the civil

suit is ban'cd by thc prior joilt judgment in Criminal Cases Nos.
SM 22? and SNI 228. whercin no reservation to filc a separate
civil case was made by petitioner and where the latter actively
participaled in the trial and tricd to prove damages against

jeep-driver Salazat only; and that the Complaint does not

slate a cause of action against truck-owner Timbol inasmuch
.Ls petitioner prosecuted jeep-owner-driver Salazar as the one

civil liability arising fron criminal negligence under Article

'100 of the Revised Penal Code. whereas Civil Case No. 80803 is
based on quasi-d,elict under Article 2180, in relation to Article
2176 ofthe Civil Code. As held in llorretkt us GarLia,et al.:

"The foregoing authorities clearly demonstrai,e the

separate individualiLy ol cuasi-tleLitos or: culpa aquiliana
under the Civil Code. Specifically thcy show thai there is
a distinction between civil liability arising from criminal
negligence (governed by the Penal Code) and responsibility
for fault or negligence under Articles 1902 to 1910 of
the Civil Code, and that the same negligent act may
produce either a civil liability arising from a crime under
the Penal Code, or a separate responsibilitY for fault or
negligence under Articles 1902 to 1910 of the Civil Code.
Still more concretely, the authoritics above cited render
it inescapable to conclude that the employer, in this case

the defendant-petitioner, is primarily and directly liable

under Article 1903 ofthe Civil Code "

"The petitioner's cause of action against Timbol in the Civil

case is based on quasi delict is evident from the recitals in the

complaint, to wit: that while petitioner was driving his car along

MacArthur Highway at Marilao, Bulacan, a jeep owned and

"ll. is tnnct'drrl thrrl l lr. lit rl llrrr.r'rlrlrtisil.r'solrrslrrr/rrrrlrr

arc l)r{,s('u1.. llowr'vr.t. wr. rryrrr' wrllr 1x.l.iliotrr.t llrrrl llrr.r'r. ir

driven by Salazar suddenly swerved to his (petitioner's) lane and

collided with his car; that the sudden swerving of Salazar's jeep
was caused either by the negligonce and lack of skill of l'reddie
Montoya, Timbol's employee, who was then driving a gravel-andsand truck in the same direction as Salazar's jeep; and that as a
consequence of the collision, petitioner's car suffered extensive
damage amounting to P12,248.20 and lhat he likewise incurred
actual and moral damages, litigation expenses and attorney's
fees. Clearly, therefore, thc two lactors that a cause of action
must consist of, nrrmr:ly: tl ) plaintilt's primary right, i.e, that
hc is thc owncr ol a Mcrcrrdr:s lJcnz; irtrd (2) delcndants' delict
or wronglirl ;rt1. or rrnttssiott wlriclt violrrt.rtl plrrinl,ilfs primary
rglri, r.r'., tht trr11li1lr'rrrt ol l:rck ol skill citlrlr ol .jt'cp-owncr

t.l

:ll,

sololy responsible ftrr the damage suffered by his car.

"Wcll-settled is the rule that for a prior judgment to

constitute a bar to a subsequent case, the following requisites
rnust concur: (l) it must be a linal judgment; (2) it must have
been rendered by a Court having jurisdiction over the subjcct
matter and over the partiesi (3) it must be a.judgment on the
merits; and (4) there must be, betwcen thc llrst and sccond
actions, identity of partics, id('nlil.v ol slrbt(!ct. mli.tor rn(l

identity of causc ofacl,ion.

1162

Art. I162

OBT,IGATIONS

Salazar or of Timbol's employee, Montoya, in driving the truck,

causing Salazar's jeep to swerve and collide with pctitioner's
car, were alleged in the Cnmplaint.
"Conscqucntly. pctitioner's cause of action being based on
(luasi-delict, tespondent Judge commiited reversible error when
he dismissed the civil suit against the truck<rwner, as said case
may proceed independently of the criminal proceedings and
regardless ofthe result ofthe latter.

"Art. 31. When the civil action is based on an obligation not arising from the act or omission complained of as
a felony, such civil action may proceed independently of
the criminal proceedings and regardless of the result of
the latter."

"But it is truck-owner Timbol's submission (as well as

that of jeep-owner-driver Salazar) that petitioner's failure to
make a reservation in the criminal action of his right to file an
independent civil action bars the institution of such separate
civil action, invoking Section 2, Rule 111, Rules ofCourt, which
says:

"Section 2. Independent civil action- - In the cases

provided for in Articles 31, 32, 33, 34 and 2177 of the
Civil Code of the Philippines, an independent civil action
entirely separate and distinct from the criminal action
may be brought by the injured party during the pendency
of the criminal case, provided the right is reserved as
required in the preceding section, Such civil action shall
proceed independently of the criminal prosecution, and
shall require only a preponderance of evidence."

"Interpreting the above provision, this Court, in Garcio us.

Florido , said:.
"As we have stated at the outset, the same negligent
act causing damages may produce a civil liability arising
from crime or create an action for quasi-d,elict or culpa
extra-contractual. The former is a violation ofthe criminal

law, while the latter is a distinct and indepcndent

negligence, having always had its own loundation and

individuality. Some legal writers arc ol thc view l,hat in

accordance with Article lJl, ther civil action bast'd upon
quasi,-d.elict rnay proc'r'd inrlcpcndcntly rrl (hc criminul
proceeding liom crinritrrrl rrr'(liglnrr. rttrrl rcgardL'ns ol'
the result ol th(' lrtl( r. ll('trrr', 'llrr' lrroviso irt Sr.Clion 2
of Rrrl' lll wilh tr.li.r'r.rrcr. lo x r x ArlicL's il2. ilil rrrrrl
jl4 ol l.lrr,(livil (irrlr.
lo tlrr' Ir.llr.r rrrrrl npiril

'g,rrrllirrv
ilri

(}I]NFJRAT, PROVISI0NS

Art.

of the said articles. lbr lhese articles were drafted x x x

and are intended to constitute as exceptions to the general
rule stated in what is now Section I of Rule 111. The
proviso, which is procedural may also be regarded as an
unauthorized amendment of substantive law, Articles 32,
33 and 34 of the Civil Code, which do not provide for the
reservation required in the proviso.' x x x"

"In his concurring opinion in the above case, Mr. Justice

Artonio Barredo further observed that inasmuch as Articles
2176 and 2177 of the Civil Code crcatc a civil liability distinct
and differeni from the civil action arising from the offense of
negligence under the Revised Penal Code, no reservation,
therefore, need be made in the criminal case; that Section 2 of
Rule 111 is inoperative, "it being subslantive in character and
is not within the power of the Supreme Court to promulgate;
and even ifit were not substantive but adjective, it cannot stand
because of its inconsistency with Article 2177, an enactment of
the legislature superseding the Rules of 1940."

"We declare, tberefore, thal in so far as truck-owner

Timbol is concerned, Civil Case No. i10803 is not barred by the
fact that petitioner failed to reserve, in the criminal action, his
right to file an independent civil action based on quasi-delict.
"The case as against jeep-owner-driver Salazar, who was
acquitted in Criminal Case No. SM-228, prcsents a different
picture altogether.

"At the outset it should be clarified that inasmuch as civil

liability co-exists with criminal responsibility in negligence
cases, the offended party has the option between an action for

enforcement of civil liability based on cul,pa criminal wdet

Article 100 ofthe Revised Penal Code, and an action for recovery
of damages based on culpa aquiliana under Article 2777 of the
Civil Code. The action for enforcement of civil liability based on
culpa criminal rtnder Section 1 ofRule 111 ofthe Rules ofCourt
is deemed simultaneously instituted with the criminal action,
unless expressly waived or reserved for separate application by
the offended party.
"The circumstances attendant to the criminal case yields
the conclusion that pclilioner had opled to base his cause of
action against.ieepr)wner-driv{!r Salazar on culpa criminal and
not on (:rlpo oquiliont, rrs cvitlt'nurtl bv his active participation
llnd intcrvontiol irr t.he grrrrs0crrt.ion ol l.hc criminal suit against
nrrid Srrlnzrrr.'l'hc hrl.lcr's civil lirrbili{y contirrrrrtl Lo lx'involvtxl
irr I lrr, r'r'irrr irrrrl rrcl irrrr r r rrl il il s lr.rnl r ntl i()n. Sttclr lx'ittg i.ht' citst',

:ll

1162

ORT,TGATIoNS

GENERAL PROVISIONS

there was no necd for petitioner io havc reserved his right to file
a separate civil action as his aciion for civil liability was deemed
impliedly instituted in Criminal Case No. SM-228.

is acquitted on the ground that his guilt has not

Art. 1162

"Art.

driven by Rodolfo Salazar and the car owned and driven

by Edgardo Mendoza was the result of lhe hitting on the
rear of the jeep by the truck driven by Freddie Montoya,
this Court bclieves that accused Rodolfo Salazar cannot
be held liable frrr the damages sustained by Edgardo
Mendoza's car."

"Crystal clear is the trial court's pronouncement that

under the facts of the case, jeep-owner-driver Salazar cannot
be held liable for the damagcs sustained by petitioner's car. In
other words, "the fact frorn which the civil might arise did not
exist." Accordingly, inasmuch as petitioner's cause of action
as against jeep-owner-driver Salazar is er-tlelictu, founded on
Article 100 of the Revised Penal Code, the civil action must be
held to have been extinguished in consonance with Section 3(c),
Rule 111 ofthe Rules ofCourt which provides:

ll. Other civil actions arising from offenses.

cases not included in the preceding section the
following rulcs shall be observed:
"Sec.

In all

xxx

(c)

Extinction of the penal action does not carry

with it extinction of the civil. unless the

proceeds from a dcclaration

extinction

in a linal judgment that the

fact liom which the civil might arise did not exist. x x x"

"And even if petitioncr's cause of action as against jrr:powner-driver Salazar were not er-(l"li u, tlrc end result would
be the same, it being clcar frotn t.hr' .jrrdr{m('nt in thrr criminol
case that Salazar's acrltrit.t.rtl wrrs rrrrl. lrrrscd ltlton rt'ttsolrblrr
doubt, consequcntly, rr civil rrclrrrrt lirl tlttntrtgcrr ctttt no lrtttgor
be instit.utod.'l'his is cxplrcillv plovrrl, rl lirl irr Arlicl'2{l ol thc

Civil Codc

rlttol.r.rl Irllr,rrrrrlr'r'

29. When the accused in a criminal prosecution

case the judgment of acquittal is

based upon reasonable doubt, thc court shall so declare.
In the absence of any declaration to that effect, it may be

"If in a criminal

"In view of what has been proven and established

during the trial, accused Freddie Montoya would be held
liable for having bumped and hit the rear portion of the
"Considering that the collision between the jeep

1162

been
proved beyond reasonable doubt, a civil action for damages
for the same act or omission may be instituted. Such action
requires only a preponderance of evidence. x x x

"Neither would an independent civil action lie. Noteworthy

is the basis of thc acquittal ofjeep-owner-driver Salazar in the
criminal case, expounded by the Trial Couri in this wise:

jeep drivcn by the accused Rodolfo Salazar.

Art.

inferred from the text of the decision whether or not the

acquittal is due to that ground."

"In so far as the suit against jeep-owner-driver Salazar

is concerned, therefore, we sustain respondent Judge's Order
dated January 30, 1971 dismissing the complaint, albeit on
different grounds.
"WHEREFORE, 1) the Order dated September 12, 1970
dismissing Civil Case No.80803 against private respondent
Felipino Timbol is set aside, and respondent Judge, or his
successor, is hereby ordered to proceed with the hearing on the
merits; 2) but the Orders dated January 30, 1971 and February
23, 1971 dismissing the Complaint in Civil Case No.80803
against respondent Rodolfo Salazar are hereby upheld."

As discussed by Justice Herrera in his Treatise on Criminal

Procedure:

The Revised Rules on Criminal Procedure 2000 is a

virtual return to the 1940 Rules of Court which deemed as
instituted with the criminal action only the civil liability arising
from the offense charged. The civil liability is deemed instituted
- not merely "impliedly" instituted with the institution of the
criminal action. The amendment modified the recommendation
ofthe Committee on the Revision of the Rules ofCourt to deem
as impliedly instituted only the civil liability ofthe accused from
all sources of obligation arising from the same act or omission.
The purpose ofthe Committee was to limit the civil liability to be
instituted with the criminal action to that ofthe accused and not
the employer. The court, however, went furtber by limiting the
civil action that is deemed instituted with the crirninal only to
the civil liability arising from the offense charged. Ai,L decisions
to the contrary are no longer controlling. Thc independent civil
actions under Articlcs 32, 3ll, 34 and 2176 an: no longt:r deemed
or implicdly inst.itrrtcd wii.h tltc criminitl ttcl.ion or considcrod as
wrivcrl r,vcn il tlrcrc is rr, r(,s(,t'v:rlir)r).'l'lll r{'s('lvrll.ion rlpDlios

iI)

Art

Art

OBLIGATIONS

GF]NI]RAT, PROVISI()NS

only to the civil liability arising from the offense charged. The
employer may no longer be held civilly liable for quasi-delict in
the criminal action as ruled in Maniago (infra.); San lklefonso
Lines (infra.) and the pro ftac ulce decision tn Rafoel Reyes
Truching Corporation (infra.), and all other similar cases, since
quasi d,elict is not deemed instituted with the criminal. If at
all, the only civil liability ofthe employer in the criminal action
would be his subsidiary liability under the Revised Penal Code.
The rule has also done away with third-party complaints and
counterclaims in criminal actions. These claims must have to be
ventilated in a separate civil action."

civil liability referred to in par. (c), Sec. 2 of Rule 111, refers exclusively to civil li.rbility arising from crime; whereas, the civil
liability for the same act considered as a qaosi-delicl only and
not as a crime is not extinguished even by a declaration in the
criminal case that the criminal act charged has not happened or
has not been committed by the accused. Both actions may proceed separately; the only limitation is the prohibition to recover

1162

The Revised Rules of Criminal Procedure 2000 "is similar

to the original rule in Rule 107 ofthe Rules of Court."

"Rule 107 contemplates a case where the offended party

desires to press his right to demand indemnity from the accused
in the criminal case which he may assert either in the same
criminal case or in a separate action. Under this rule, a waiver
from failure to reserve does not include a cause of action not
arising from civil liability involved in the criminal case but llom
culpa contractual, such as a civil case is based on alleged czlpa
contractual fr,oorred by the Philippine Air Lines, Inc. because of
its failure to carry safely the deceased passenger to his place of
destination. The criminal case involves the civil liability of the
accused, who bear no relation whatsoever with said entity and
are complete strangers to it. The accused are complete sirangers

to the respondent company. The latter is not in any way

involved therein. Plaintiffis concerned with the civil liability of
the latter, regardless of the civil liability of the accused in the
criminal case. The failure, therefore, on the part ofthe plaintiff
to reserve her right to institute the civil action in the criminal
case cannot in any way be deemed as a waiver on her part ofthe
right to institute a separate civil action against the respondent
company based on its contractual liability, or ot culpa aquiliana
under Articles 1902 to 1910 to ofthe Civil Code. The two actions
are separate and distinct and should not be confused one with
the other." (Porher uE. P@nlilio,97 Phil. 1 t19521)

"The rule has abandoned Mani,ago us. Court of AppeaLs,

253 SCRA 174 ancl San lld.efonso Lines rts. (Iturt rtf Appeals,
G.R. No. 119771,

April24, 1998,289

SCRA 568, which dccmt:d

the employer's liability on quari doli{t rs irrstil.ul.(ld with th{'

criminal action in the rtbntnct ol tr rt,scrvrrtion. 'l'ht' prescnl
rule virtually rrdrrpt.rrl tltl lrrlirrg irr /f/r'rrrr,, * Ilill,77 s(:llA
98(1977), whorr,il wrrx r,rprlrrrly lrllrl llrrrt lltc lxlirrclirrrr ol llrr'
.lr

1162

damages twice based on the same act or omission."

Finally, in his Treatise on Criminal Procedure, Justice Herrera

discussed the effect of death on the civil liability of the accused
during the pendency ofthe criminal action as follows:
Death of Accused on Appeal
"Thc death of the accused after arraignment and during
the pendency of the criminal action shall extinguish the civil

liability arising from the delict.

The original proposal of the Committee was to require
th criminal court to proceed with the determination ofthe civil
liability that is deemed impliedly instituted with the criminal
action other than the civil liability arising from the crime to
modify the ruling in Bdyord.s us. Court of Appeals, which then

held that since death extinguished the civil liability of the

accused and the corresponding ciwil liability arising from a
crime, the offended party should file a separate civil action to
recover civil liability arising from other sources ofcivil liabilityThe ruling was then criticized. Since the civil liability arising
from other sources were deemed impliedly instituted with the
criminal action unless there is a waiver, reservation or separate
civil, then the same should be resolved in the same proceedings
despite the death of the accused. Since, however, The Revised
Rules on Criminal Procedure limited the civil liability to what
is deemed impliedly instituted with the criminal action to civil
liability arising from crime, there would have been no need for
the amendment as death of the accused would only extinguish
such civil liability. The rule was, however, retained by the court
to apply to the civil actions under Section 3 of the Rule. The
rule would, however, apply only ifany ofthe civil actions under
Section 3 is consolidated with the criminal action, otherwise,
since thc actions undcr Str:tion i] are purely civil actions, the
cllitts ol ticrrth ol ir prrrtv rrrc lo bt' govt'rncd hy the Rules on
('ivil l)rrxtrlrrrr'." 1Rrrlr,.?, S'r,r'n. 16, l7 ond 20, 1997 RCP)

,lr

NATURE AND El'FllCT OF

Obligations To Give.

OULI(IA]']0NS Arts. 1163 1166

An obligation to give a thing may

It is determinate when the object

is particularly designated or physically segregated lrom all others
of the same class.5 It is generic or indeterminate when the object
is designated merely by its class or genus without any particular
designation or physical segregation from all others oflhe same class.
ln other words, in the first the object is a concrete, particularized
bc either determinate or generic.

CHAPTER 2
NATURE AND EFFECT OF OBLIGATIONS

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.r

Art.

1163.

Art. 1164. The creditor has a right to the fruits of the

thing from the tirne the obligation to deliver it arises.
However, he shall acquire no real right over it until the same
has been delivered to him.'

Art. 1165. When what is to be delivered is a determinate

thing, the creditor, in addition, to the right granted hirn by
Article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that
the obligation be cornplied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the
same thing to two or more persons who do not have the same
interest he shall be responsible for any fortuitous event until
he has effected the delivery."

Art. 1166. The obligation to give a determinate thing

includes that of delivering all its accessions and accessories,
even though they may not have been mentioned.a

1Art. 1094, Spanish

'Art. 1095, Spanish
iArt. 109{i, Sprrnish
tA11.. lO1)?,

(iivil (irrll , ir ,',rl,ln,l li'rD,

tlivrl {ixl,

{'iril(irlr.

ttr trrrrltriIrl l,,ttrr

Irrr l. { rvrl { ,r1,,

l:l

thing, indicated by its own individuality, while in the second the

object is one whose determination is confined to that of its nature
1.o the genus to which it pertains, such as a horse or a chair.6 Thus,
when the obligor or debtor binds himself to deliver to the obligee or
t:reditor the white horse which won the Senior Grand Derby in 1979,
l.he object of the obligation is said to be determinate. Since it has
irlready been individually determined, the obligor cannot I'ulfill his
obligation by delivering another horse as a substitute,T On the other
hand, when the obligor or debtor binds himself to deliver "a horse" or
''len horses," the object of the obligation is said to be indeterminate
or generic. Since the horse or horses have not yet been particularly
riesignated or physically segregated from all others of the same
class, the obligor can fulfill his obligation by delivering any horse or
horses which are neither of superior nor inferior quality.3

Idem; Nature of right of creditor, - In obligations to give,

or creditor has a right to the thing which is the object
ol the obligation as well as i,he fruits thereof from the time the
obligation to deliver it arises. This is evident liom the provision of
Art. 1164 of the Code. The question, however, is - when does the
obligation to deliver the thing and the fruits arise? The answer to
lhis question depends upon the nature of the obligation itself. In
crrse of obligations arising from the law, quo.si-atntracls, criminal
rrllenses, and. quasi-delicts, the obligation to deliver arises t'rom the
lrrne designated by the provisions of the Civil Code or of special
lrrws creating or regulating them. ln case ofobligations arising frorn
crrntracts, the obligation to deliver arises, as a general rule, from the
rrroment ol the perfection ol the contract. The basis lbr the latter rule
, rrn be found in Art. 15117 ofthe Code which states that the vendor is
lround to delivcr the thing sold and its accessions trnd accessories in
l.he obligee

'A11 I1{iO, prrr l. ( 'i! rl

i!l(,

'Si'rirrrn vs I)r'lrrrrr. lll Oll (1,,1 :l:lli 8Il:,n11\ir.5llr l,l(l llk l, t)

Arl l:r l.l t r!rl(irl,.

"Arl Illlt; ( ,!,1 {i 1,,

lit

102

Arts. l l63-l166

the condition in which they were upon the perlection ofthe contract.
According to Manresa, the principle declared in Art. 1164 is merely
an extension of that declared in Art. 1537 considering the fact that
an obligation arising from a contract of sale is the prototype of all

contractual obligations.e Generalizing the provision of the latter

article, we can, therefbre, say that the obligor or debtor is bound to
deliver the thing which is the objcct of the obligation as well as the
fruits thereof from the moment the contract is perfected. In other
words, with respect to the thing itself, the obligation to deliver arises
from the time of perfection ol the contract; with respect to the fruits,
the obligation to deliver also arises from the time of the perfection
of the contract. It rnust be noted, however, that these rules are not
absolute in character. In case there is a contrary stipulation of the
parties with respect to the time when the thing or fruits shall be
delivered, such stipulation shall govern. Hence, if the obligation
is subject to a suspensive condition, the obligation to deliver the
thing as well as the fruits shall arise only from the moment of the
fulfillment of the condition, and if it is subject to a suspensive term
or period, the obligation to deliver arises only upon the expiration of
the designated term or period.

If the creditor has a right to the thing as well as to the fruits

thereof from the time the obligation to deliver it arises, what is the
nature of such right? Before answering this question, we must first
know the meaning ofpersonal and real right. Accordingto an eminent
Spanish commentator, a personal right is "a right pertaining to a
person to demand from another, as a delinite passive subject, the
Iulfillment of a prestation to give, to do or not to do." It is a jus ad
rem, a right enforceable only against a definite person or group of
persons, such as the right of a creditor to demand from the debtor
the delivery of the object of the obligation after the perfection of the
contract. A real right, on the other hand, is a "right pertaining to a
person over a specific thing, without a passive subject individually
determined against whom such right may be personally enlbrced."10
It is ajus in re, a right enforceable against the whole world, such
as the right of ownership, possession, usufrucl or oasemcnt. It is
clear from these definitions that bt.frrrc dt:livcry, thc credil.or, in
obligations to give, has mcnrly ir pr.rsonirl righl, irgirinsl. l,hc dchl.or

"U

Mrnr{'s:r. sth I'l,l . llk

NA'I'tlRE ANI) EFFECT OIr

OBLIGATIONS

l.l,t, l,/

lrlr

I.l

OBl.l(iAI'IONS Afl's

1163-1166

right to ask for delivery ol the thing and thtr fruits thereoll Once
the thing and the fruits are delivered. then he acquires a real right
over them, a right which is enforceahle against the whole world'
'l'his explains why according to Art. I 164 of the Code, although the
creditor acquires a right to the fruits of the thing liom the time the
obligation to deliver it arises, he does not acquire any real right over
it until the same has been dclivered to him. Thus, ifA and.B enter
into a written agreement whereby the lbrmer promises to deliver a
parcel of land to the latter for a price of Pl00,000, the obligations
to deliver the land on the part ol thc former and the purchase price
of P100,000 on the part of the latter arise only from the moment of
the perfection of the contract. As far as B is concerned, although
he is entitled to all of the fruits of the land from the moment of the
perfection of the contract, at most, he has only a personal right to
urmpel A to deliver the land and such fiuits in case he, himself, is
irlso ready to comply with what is incumbent upon him.rr In other
words, he does not acquire a real right or right ofownership over the
land and over the fruits thereof, until the same have been delivered
to him. That is why, according to Art. 1477 of the Civil Code, the
ownership of the thing sold shall be transferred to the vendee only
upon the actual or constructive delivery thereof

Idem; Rights ofcreditor in determinate obligations' - If

the obligation to give is determinate, the rights ofthe creditor are as
lollows:

(1) To compel specific performance. This right is expressly

rccognized by the first paragraph of Art. 1165 of the Code which
states that the creditor may compel the debtor to make the delivery
It is complemented by the first paragraph of Ar1.7244 which states
l.hat the debtor of a thing cannot compel the creditor to receive a
rlifferent one, although the latter may be ofthe same value as, or more
valuable than that which is due. Consequently, ifthe debtor does not
tomply with his obligation at the time when the obligation to deliver
rrrises or if he insists on delivering a different one, the remedy of
lhe creditor is to file an action against the debtor to compel specific
pcrlirrmance. In such case, the debtor cannot even plead pecuniary
irnpossibility of performance. It is an undisputed principle ofequity
,(rrrzrrrto vs. Ilrrsios rrrrrl I,I\i.IIL |.:II l'hrl l/: srt rrlso t'i,l lrt.r ;rrrrl l)('posit (1,.
vr Wilror.iil'hil 5lt(|rrrhrl0r'r'rrrrrr AlrrrrrIr.{'A ls()ll (;rr7:t'1:12:l,rrndb.r'ivs
I|rr.rr!.0,( A inr{tll (lrr7 Ir'li

.ti,

Arts. 1163-1166

OtsLIGATIONS

NA'l'trRll AND IIFFEO'I' Ol' OBLI(

jurisprudence, and this is also true in lhis jurisdiction,

that mere
pecuniary inability to fulfill an engagement does not discharge
the
obligation, nor does it constitute any defense to a decree for specific
performance.r2

. 12_) To recover damages for breach of the obligation. Besides

the right to compel specific performance, the creditir has also the
rig-ht to recover damages from the debtor in case of breach of
the
obligation through delay, fraud, negligence or contravention of
the
tenor thereof.rrj
It will be observed that the above remedies are not incompatible
with each other. Hence, the creditor may file an action against the
99!!or f9r specific perlbrmance under the first pu.ugrufrf, of ert.
1_165 and, at the same time, avail ofthe action
for dariages against
the said debtor under Art. 11Z0.ra
Idem; Rights of creditor in generic obligations. _ If the
obligation to give is generic, the righis ofthe c.edf,or a.e as follows:

, (1) To ask for performance ofthe obligation. Whetherthe object

ofan obligation to give is deterrninate or generic, it is undeniable
that
the creditor has the right to ask for the performance ofthe
obiigation.
The only difference is that in determinate obligations to gi;e,
the
creditor can compel specific performance, while in indeterriinate or
generic obligations to give, he can only ask for the delivery
ofa thing
or object belonging to the class or genus stipulated which must be
neither of superior nor inferior quality.rs Thus, if the aettor Uinas
himself to deliver ten horses to the creditor, the form".
-.rJ"o-pty
with the obligation by delivering to the latter any ten horses
which
must be neither of the highest nor poorest quality. The creditor
in
such case-cannot compel specific performance by demanding
the
delivery often horses of superior qualitv.
(2)

To ask that the obligation be complied with at the

If the debtor refuses or ii unable to comply

expense of the debtor.

with his obligation, the creditor can even ask that the obligation be
complied with at the expense of such debtor.r6 Thus, if the
debtor

rvith the obligation after demand was made, the creditor can then
order the delivery of ten horses which must be neither of superior
nor inferior quality from any third person and all expenses incurred
shall be charged against him.

(3) To recover damages for breach of the obligation. In case

of Iailure of the debtor to comply with his obligation, or in case of
brcach by reason of fraud, negligence, delay or contravention of the
tcnor of the obligation, the creditor can demand for indemnification
fbr damages. Although Art. 1165 is silent with respect to the
applicability of Art. 1170 to indeterminate or generic obligations,
the scope ofthe article is broad enough to apply even to such class of
ohligations.r?

Idem; Obligations of debtor in deterrninate obligations.

If the obligation to give is determinate, the obligations of the
debtor are as fbllows:

(1) To perform the obligation specifically. In obligations to

give a determinate thing, the obligor or debtor binds himself to
deliver to the obligee or creditor a thing or object which is particularly
designated or physically segregated from all others ofthe same class.
llence, he cannot comply with his obligation by delivering a thing
which is diffcrent from that which is designated although belongng
Lo the same class or genus. This is so cven though the thing delivered
rnay be of superior quality.t' Thus, if he binds himself to deliver to
the creditor a certain 80 Toyota Corona specifically described in the
( ontract, he must deliver the specified car and no other.
(2)

To take care of the thing with the proper diligence of a

good father of a family. This accessory obligation which is expressly
irnpused upon the debtor by the provision of Art. 1163 ofthe Code
rrnd which is applicable only to determinale obligations and not to
gcneric oncs,rlr is es&rblished merely for the purpose of insuring the

cllicacy and performance of the obligation. As a general rule, the

st.andard ofcare which must bc exercised for the preservation ofthe

Repide vs. Afz{lius. :t1} I,hil l:l{}

1. and I l7{). (.,v,1 (irl,,

'6Arl.. I | 65,

p:rr

2,

t' ll:t

( iv'l ( ixt',

'r't

Mr"'r,

s,r,1-)lh l,i,l ,

r"Arl l:f.l l. ('ivil (ix|l,

.ll

Arts. 116:l-1166

had pron,ised to delivcr ten horses lo the creditor at a specific date,

and upon the arrivnl of the stipulated date he was unable to comply

"Gutierrez
lArts.
1165, par.

"8 Manresa. 5th 0d.. ltk. I,

tsArt. l246. aivil (i,,li,

]A'fIONS

llk l,I' llrl

t'l

Arts. 1163-1166

OBLIGATIONS

NATLIRE AND EFFIICT O!' Olll,l(;41'l(

thing must be the diligence of a good father of a family.ro This rule,

however, is subject to two exceptions. The first is ifthe
law requires
another standard ofcare. Thus, Art. l?33 ofthe Civil Code provides
that common carriers, from the nature of their business'and for
reasons ofpublic policy, are bound to observe extraordinary
diligence
in the vigilance over the goods, and for the safety of the
i""...rg.."
transported by thern, according to all of the circumstances
ot. each
case. The second is if the parties stipulate another standard
ofcare.
Thus,
parties may agree that the standard to be folowed by
.the
the debtor in taking care ofthe thing pending its delivery or
in the
delivery itself shall be either extr"o.di.rury
or slight"care.
"u-."

(3)

To deliver all accessions and accessories ofthe thing,

even
though they rnay not have been mentioned. This acc"""o.y
obiigrfio.,

is- expressly imposed upon the debtor by the provision

ofe.t. ffOO
ofthe Code. The term ,,accessions" sigrrifies aliofthose things which
are prod"red by the thing which is the object ofthe obligatioi
as well
as all of those which are naturally or artificially attacied
thereto.,,
Consequently, it comprehends all ofthe different kinds ofa""e""ions

which- are defined and regulated by the provisions ofa"t.

ofthe Civil Code, such as occesidn discreta (natural,

475

ali

to

ert.

industrial
and civil fruits) as well as accesi6n ind.ustrial (building, planting
and sowing), qccesi6n netural (alluvion, al.ulsion, ilirao.r"a
river beds, and islands formed in non-navigable o. ,rorr_flout"Utu
rivers) and accession with respect to movable property (adjunction
or conjunction, confusion or commixtion, -and specidcation).
"Accessories," on the other hand, must be understood 1.,
it"
ard popular-sense. It signifies all of those things which have
",r.r"rrt
for
their- object the embellishment, use or preservation of another
thing
which is more important and to whichthey are not lrr"o.po.ut"d
o.
attached. In other words, it includes all ol those things ihich
are
necessary or convenient for the perfection of another thing,
such as
the equip-meat of a factory, the spare parts and tools of
a machine,
the key ofa house, and others ofa similar nature.2,
It musr be noted that under the old law, .accessions,, were not
included, in view ofwhich, according ttr tllr Srrprtmr, Oorrrt
of..Spain,
)nArl. I 163. {
( inl.,, H,r. tt,\t!,t,,,t .t,,r,,
'v'l( rxl..
:rArt. 44{). ( ivrl
'zr8

Mrnrfsfl,,i)th l,ld, lJk t,I,t, tlllr

ll

l8

v..

l),. l,'

l,,

r'. Zl;

)NS

Arts. 1163'1166

il a piece of land is sold without mentioning the house thereon, the

sale does not include the house because it is not an'accessory," but
irn "accession." However, the Code Commission, considering that
when a piece ofland is sold, ordinarily all the improvements thereon
are intended as included in the sale. inserted the word 'accessions."23

In the case of Pormellosa us. Lantl Tenu.re Adm,inistration,

SCRA 375 (1961), it was ruled that a sale of the house and
improvements upon a land is not sufficient to convey title or any
right to the land, thus enunciating the rule that an obligation to
deliver the accessions or accessories of a thing does not include the
thing unless otherwise stipulated.

(4) To be liable for damages in case ofbreach ofthe obligation

by reason of delay, fraud, negligence or contravention of the tenor
thereof. This obligation is expressly imposed upon the debtor by
the provision of Art. 1170 of the Code. It must be noted, however,
that this liability does not arise if the breach is due to a fortuitous
cvent.2{ In other words, such liability extends only to a breach which
is voluntary in character, and not to one which is involuntary. Thus,
i{ the debtor binds himself to deliver to the creditor a

specified

rrutomobile by the end ofNovember, 1980, and said automobile was

destroyed when the garage in which it was kept was gutted by a
lire of accidental origin before the date of delivery, the obligation is
extinguished. There can, therefore, be no liability of the debtor for
breach of the obligation.

It must also be noted that under the third paragraph of Art.

it is provided that if the obligor delays, or has promised to

I 165,

rleliver the same thing to two or more persons who do not have the
slme interest, he shall be responsible for any fortuitous event until
hc had effected the delivery. It is evident that this rule is applicable
rrnlv to obligations to give a determinate thing. This is so because
only a determinate thing can be destroyed by a fortuitous event. An
indeterminate or generic thing, on the other hand, can never perish.
Il is also evident that the two cases mentioned in the provision are
cxceptions expressly specified by law to the rule that there can be
rro liability in case of fortuitous events. In both cases, when the
rlt'tcrminatc thing which is thc ollect of the obligation is lost or

l,hrl I.l.l
''(lrt'r'ilr"rr', (lrvrl (ixl., llllnl lil . V,,l jl, I'

/Arl IIi l l

rerl (,r1,.

.t$

ll

Arts. 1163-l166

NATURE AND EFFECT OF

destroyed before the date of lhe delivery, the obligor or debtor shall
be liable to the creditor.

Idem; Obligations of debtor in generic obligations.

- If
the obligation to give is innominate or generic, the obligations ofthe
debtor are as follows:

(1)

To deliver a thing which is neither ofsuperior nor inferior

quality.'?s Consequently,

the creditor cannot demand a thing of

superior quality; neither can the debtor deliver a thing of inferior
quality. However, in the determination of the quality of the thing
which is to be delivered, the purpose of the obligation and other
circumstances shall have to be taken into consideration.r(r

(2) To be liable for damages in case ofbreach ofthe obligation

by reason of delay, fraud, negligence or contravention of the tenor
thereol'.2? 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 third person to perform the
obligation at the expense of the debtor.13 It must be noted, however,
that the doctrine enunciated in Art. 11?4 of the Code, by virtue of
which the obligation is extinguished in case the object thereofis lost
or destroyed through a fortuitous event, is not applicable to this
type ofobligation. This is clearly deducible from the provision ofArt.
1263 of the Civil Code which states 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. This precept is based on the maxim that
the genus of a thing can never peri sh ( genus nunquam peruit). Thus,
if a certain company agreed to pay a pension to any ofits employees
who may have completed 20 years of service and who may have
attained the age of 50, the fact that heary losses were incurred by
said company during the war does not exempt it from liability on the
gnound that such obligation to pay is generic and, consequently, is
not extinguished.,, Similarly, ifa certain person promised to deliver

1163-1166

5,700 cavans ofrice to another

within

a stipulated period, but due to

Huk depredations in Central Luzon he was unable to comply fully

with the terms of the contract, he can still be held liable.3o
Problem - A bound himself to deliver to B a 2l-inch
1983 model TV set, and the 13 cubic feet White Westinghouse
refrigerator, with Motor No. WERT-385, which B saw in A's
store, and to repair B's piano A did none ofthese things
May the court compel A to deliver the TV set and the
refrigerator and repair the piano? Why? If not, what relief may
the court grant B? WhY? (1983)
Answer - B cannot compel A to deliver the 21-inch
1983 model TV set. The reason is obvious. The obligation is a
generic obligation because the object is designated merely by its
class or genus without any particular desigaation or physical
segregation from others ofthe same class. An action for specific
performance is, therefore, legally and physically impossible'
i)onsequently, the remedy ofB is to ask for the delivery ofa 21inch 1983 model TV set which must be neither of superior nor
inferior quality. This is explicitly recognized by the New Civil
Code. As a matter offact, he can even ask that the obligation be
complied with at the expense ofA Additionally, he can ask for
damages. These remedies are also explicitly recognized by the
New Civil Code.
Inthe case ofthe refrigerator, the situation is different The
court may compel A to comply with the obligation specifically'
The reason is obvious. The obligation is detrminate Under
the New Civil Code, if the debtor or obligor refuses or is unable
to comply with his obligation, assuming that the obligation is
a determinate obligation to give, the remedy of the creditor or
obligee is to bring an action against the debtor or obligor for
specific performance. Additionally, he can recover damages.

On the other hand, the court cannot compel A to repair

the piano. The reason is also obvious. The obligation of A is an
obligation to do. In this tlpe of obligation, the law recognizes
the individual's freedom to choose between doing that which
he has promised to do and not doing it. It falls within what
commentators call a pcrsonal act, of which courts may not
compel compliance as il is an act ofviolence to do so. The remedy,
therefore, ol B is to hrrvc t h{' obligation exccuted at the expense

i5Art. 1246. Civil Code.

,l;Jbid.

'zJArt. I170. (livil (lil,

,3Art. 11tis, prrr 2, (livil(\ni,,

r"PhilippinI ln)'lg l)rstIId.t ,' \ , .l..tlir]'ir. 1|/ I'hrl /8 sr!.r,1s,, R,.v|s

vr (

tcx. 47 OlIl

OUI,IGATIONS Arts

OBLIGATIONS

(i:'7 llllil

r,t

''Si'rr"r, vs l)r'l/1nr. l8()ll (l'r/

:l:1'll'

5t
l,l

Art. I

16?

OBI,I(IATIONS

NATIIItI.] AND EFF!]CT Ot.. 0I]I,I(]A1'I()NS

ol A. Additionally, hc can recover damagcs lrorn A. (Nore. The

availed ofwhen such prestation consists of an act where the personal

nnd special qualification of the obligor is the principal motive for
the esiablishment of lhe obligation, as firr instance, the talent and
prestige of an artist. ln such case, there is no other remedy of the
obligel except to proceed against the obligor for damages under Art

Art. I167

itbove answcr is based on Arts. I 165,

Civil

Codc.

prr.

1, I 167 and 11 70, New

Art. f167. If a person obliged to do something fails to do

it, the sa.me 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.'Jr
Obligations To Do; Effects ofBreach. - ln obligation to do
(positive personal obligations), if the obligor fails to do that which
he has obligatcd himself to do, the obligee can have the obligation
performed or executed at the expense of the former,3'? and, at the
same time, demand for damages by reason of thc breach."'r

Unlike obligations to givc, in obligations to do the

obligee

does not possess the power to compel the obligor to comply with
his obligation. In this type of obligation the law recognizes the
individual's freedom or liberty to choose between doing that which
he has promised to do and not doing it. It falls within what Spanish
commentators have called a personal acl (acto personalisimo), of
which courts may not compel compliance as it is considered an act of
violence to do so.'r' Consequently, since compliance or fulfillment can
only be voluntary, the Code in the first 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.rr' Thus, if A has an
obligation to construct a garage for B lbr P5,000 and he fails or
refuses to construct it within the period specified in the contract,
B has a right to ask another contractor to perform the undertaking
even for a higher price. In such case, he can recover the difference
from A.

It must be observed, however, that the right ol'the obligee to

have the prestation executed at the expt:nsc ol the obligor cannot br:
riLArt. 1098, Spanish Civil (\,(l{
"!Art. 1167, par 2, (livil (irl,,

:r'Art. I170. (livil (',xl'

"Woodhousr. vs I1,,lil, lr:r l'l)rl r'l't; (t,r"l,llr]
'rlt Mann.srr,1'rlh l.l,l . llk ll. t't' llri lt,
I

rll

llrSi,r'\,'l,r l:ls. l;ll l:l:l

1170 of the Code.36

On the other hand, if there has been a performance of the

obligation, but in contravention of the tenor thereof, the following
righ"ts are available to the obligee: 11) To have.-the obligation
p"".for-ed or executed at the expense of the-obligor;'rt {2)to ask that
(3) to recover damages
what has been poorly done be undone;''" and
because ofbreach of the obligation.sl'
Pnthlem

An.su:er

"O." lot owner, contracted with "8"'builder'

to build a multi-storcy building designed by "A"'architecl "A'

was paid a fee to supervise lhe constmction and executi<ln ofhis
desii-n. Whcn co-pieted, "O" accepted the work and occupied the
builiing, but within one year, it collapsed in an erarthquake.that
destroyed <.rnly lhe building and not the surrounding buildings'
Constiuction was faulty The building cr'rst P3,000'000 00' but
reconstruction cost would reach PL0'000,000'00'
What are lhe rights of "O" against "A"
Question No I
and "B"? Explain briefly. t 1981 Bar Problem )

"O" can hold "A" and "B" solidarily liable for

is clear liom the Civil Code, which dcclares

that t"he contractor is liable (br darrtages if within fifteen years
damages. This

liom the completion ofthe edifice or structure, the samc should

collapse on account ofdefects in the construction

lfthe engineer

or architect who drew up the plans and specifications of the

building supervises the construction, he shall be solidarily liable
with thJ contractor. Acceptance ofthe building, after completion'
does not imply waiver ofthe cause ol action However, the aclion
must bo brought within ten yearrs {trllorving thc collapst' of the
building.
(No/r':'l'he alxrve answel is bascd on Art l?23 ofthe Civil
Crde

.)

ll;'i. I'rrr I,( r!rl (irl,'

l{i/. t,r'r :1. ( r!rl l 'nl'
I1lr.( rvrl ( irl,

Art.

1r 68

NA'f Ultll AND

OBLIGATIONS

El'!'llcT Ol' Ollr,tGA'r'loNS

Art

I{i9

Question No,2 - Could "O', demand reconstruction ofthe

building? On what ground? Amplifu. (1981 Bar problem)

is fulfilled or realized so long as that which is forbidden is not done

by the obligor. llthe obligor does what has been lbrbidden him, two

Answer
- "O" can demand recolstruction of the buildino
The obligation of both "A,, and "B,, is a"
;l;-a;;;_
quently, Art. 1167 of the Civil Code is applicable.
"blig"ti; According to
this article, ifa person obliged to do someiiring does lt in conira_
vention ofthe tenor ofthe obligation, the same shall be executcd
at his cost. It is obvious that the builder,,B" and the archiilct
"A" performed theirjobs in contravention ofthe tenor ofthe obli_
gation. As a mattr offact, had the building not collapsed,
under
the same article, it may even be decreed-that *t ut t * 1"""

expense of the obligor in accordance with Art. I 168 and to ask for
damages in accordance with Art. 1170. Thus, ifthe obligor obligated
himself not to construct his house beyond a certain height in order not
to obstruct the view from the house ofthe obligee, and subsequently,
he adds another story beyond the stipulated height, the obligee has
the right to demand lbr the demolition ofthe additional storey at the
expense of the obligor. In addition, he can also demand indemnity
for damages.

poorly done be undone. Consequently, ,,C,' can now

a"-unJ

fu.
the reconstruction of the building by ,,A" u"d "n,, o" Uy .rroih""
at their cost.
(,ly'oter

The above answer is based on Art. 116? ofthe Civil

Code and on Manresa, vol. g, pp. 116-112.)

Problem
- X delivered a play station to y for repair, y did
not finish thejob. Finally, despite repeated reminders ofi for y
to finish thejob, y returned the play station with his job undone
and-whete some parts were missing. Z then repair; the
station. Z charged X the amount of p500.00 foithe reoalr ;i;;
ana
the amount of P300.00 for the missing parts. The fo*""
y
ruled that should pay only p300.00.
"o""t

remedies are available to the obligee

to have

it

undone at the

The first remedy is logical because it is the only way by which the
end or object ofthe obligation may be effectively realized since what
is demanded is not the performance of an act but an omission. With
respect to the second remedy, it must be noted that in obligations
ofthis type (not to do), delay or mora is not possible unlike positive
obligations. This is so because in negativc obligations. the obligation
is either ful{illed or not lulfilled.al

Code for the missing parts considering that y failed to

Jurn
the play station in the same condition as when it *."
(Tanguilig as. Court ofAppeats,266 SCRA78
tlgg7t.) "";r"j.

There are, however, certain cases where the remedy provided

for in Art. 1168 is not available. In the first place, 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 obligee 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. In the second place, there are
those cases where it would be physically or legally impossible to
undo what has been done because ofthe very nature ofthe act itself,
or because of a provision of the law, or because of conflicting rights
,rf third persons. Hence, in these cases, the only remedy available
to the obligee would be to proceed against the obligor for damages
under Art. 1170 ofthe Code.a'

Art. 1168. \trhen the obligation consiats in not doing, and

the obligor does what has been forbidden him, it shall aiso be
undone at his expense.do

Art. 1169. Those obliged to deliver or to do something

incur in delay from the time the otrligee judicially or
extrajudicially demands flom them the fulfillment of their

Question - Is
amount of P300.00?

y liable

also for the cost ofthe repair or the

Answer
Since y failed to repair the play station,
- Yes. parts,
y contravenld th" ;";" ;i'h;*
with some missing
obligation. Y is liable for such contravention under ert. ffOi of
the Civil Code. considering that the obligation ofy wu" to
the play station. He is likewise iiable under Art. l l?0 "uo"i"
of the

Obligations Not To Do; Effects of llreach. In obligations

not to do (negative personal obligrrl.ions), l.hc objrtl ol'l.hc obligution
{'Art.

o9!}, Ssrrrnr*h {.rvrt

\it,,. ,,, ,r!rt,tr,,t

n,t

t,,, ,,,

obligation.
lrlt Mrnr,.sri.l''lh l,il.,
"lhul . p l,t:t

ltk l, pt, l2l l2ll

r,5

Arts. 11?0-11?3

NATURE AND EFFECT Ol'OULIGATIONS Arts. 1170-1173

OBI,ICATTONS

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

(1) \ hen the obligation or the law expressly so de-

claresl or

(2)

When from the nature and the circumstances of the

obligation it appears that the desigrration 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 demand would be useless, as when the obligor

has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay
does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. Frorn the
moment one of the parties fulfills his obligation, delay by the

if the other

other begins,arl

Art. 1170. Those who in the performance of their

obligations sre guilty of fraud, negligence, or delay, and
those who in any manner contravene the tenor thereof, are
liable for damages.aa
Art, 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future
fraud is void.as
Art. 1172, Responsibility arising from negligence in the
perforrnance of every kind of obligation is also dernandable,
but such liability may be regulated by the courts, according
to the circumstances.'16

Art, f173. 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 tirne and of the place. r hen
negligence shows bad faith, the provisions of Articles ll71

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 farnily shall tre required.a'
Breach of Otrligations. - In general, the breach of an obligation may be either voluntary or involuntary. It is voluntary if
the debtor or obligor in the performance ofhis obligation is guilty of
defarit (mora), or fra:ud, (dolo), or negligence (culpa), or in any manner contravenes the tenor thereof.48 It is involuntary if he is unable
to comply with his obligation because of an event which cannot be
foreseen, or which, though foreseen, was inevitable.as In the first he
is liable for damages, in the second he is not.
The first
-Civil
the
Code
regulated
by
kind ofvoluntary breach ofan obligation
Default
or
or
rnorct.
is that which takes place by reason of default
of
an
obligation
rnoro sigrrifies the idea of delay in the fulfiIlment
with respect to time.

Voluntary Breach Through Default or Mora.

There are three kinds of default or mora. They are'.

(l)

Mora soluendi or the delay of the obligor or debtor to

perform his obligation. This delay is called mora soluendi ex re when

the obligation is an obligation to give or mora soLuendi ex persono
when the obligation is an obligation to do.

(.2) Mora accipiendi or the delay

rrccept the delivery

of the obligee or creditor to

ofthe thing which is the object ofthe obligation.

(3)

Compensatio morae or th'e delay ofthe parties or obligors

i n reciprocal obligations.50

There are three requisites which should be present in order

that the obligor or debtor may be considered in default. They are:
(1)

The obligation is demandable and already liquidated;

(2)

The obligor or debtor delays performance; and

and 2201, paragraph 2, shall apply.

a3Art. 1100, Spanish
l{Art. 1101, Spanish

Civil (lxlt, in rrrrrcrrrlrrl fi,rnr

(livil (ixl,

'5Art. 1 102, Splnistr { liv il ( ,!l' . r', rrrrrlrlirrl lir

ariArt. I l0;), St)r'r"rl' (
( ,n1,.

'\''l

h{i

rrr

104, Spru'iNh (livil(l(ri,

l?(1. (:ivrl (irll..
174. (:rvil ( l,!1,.

rrrorrr. ir{h

irr rrrrrndcd fornr.

I'il ,llk l.1r l:ft

A-rts. 1170-1173

OI]I,IGATIONS

(3)

The creditor requires the performance iudicially or extrajudicially. (Aerospace Chemical Irudustries, Inc. us. CA, 315 SCRA
94.)

In the case rf Brichtoutn Deut. Corp. us. Antor Tierra Deut.

Corp.,239 SCh4 126 (1994),l}re Court ruled that a 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 requirejudicial or extrajudicial demand before default
can arise. When unconditionally confened, it is effective without
further need of demand either for the pavment of the obligation or
for honoring the right.
Idem; Default in positive obligations. In obligations
to grve or to do (positive obligations), the obligor or debtor incurs
in delay from the time the obligee or creditor demands from him
the fulfillment of the obligation.s' This demand may be judicial or
extrajudicial. It is judicial ifthe creditor files a complaint against the
debtor ibr the fulfillment of the obligation; it is 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 per-forrn his
obligation, he isinmora soluendi, and therefore, liable for'.iamages.
The significance of this rule may be illustrated by the ibllowing
problem:
On October I, 1976, A bonowed Pl0,000 from B evidenced by
a promissory note whereby he undertook to pay the indebtedness on
October 1, 1978. On October 1, 1980, B brought an action against
A for the payment of the obligation as well as legal interest {rom
the date of maturity by way of damages. There is no evidence that
any demand for payment was ever made prior to the presentation of
the complaint. From what time shall the legal interest be computed
- shall it be computed from October 1, 1978, when the obligation
became due and demandable, or from October 1, 1980, whcn the
complaint was filed? According to the decided cases, thc interest
shall be computed from October 1, 1980. whcn thc complaint was
filed, because it was only then that thc delrt,or hrrd incurrt'd in dt'lay.f'7
trArt. 1169, par. l. Civil

NATURE AND EFFECT OF OBLIGATIONS Arts. 11?0-1173

'lhe result would be different had the creditor made an extrajudicial

demand upon the debtor on October 1, 1978, when the obligation
became due and demandable, or soon thereafter' In such case, the
legal interest would have to be computed from such date.

Idem; id.

When demand is not necessary. - However,

in order that delay may

demand by the creditor is not necessary

exist in the following cases:

(1) When the obligation or the law expressly so declares.s3

Attention must be called to the fact that what the law means is
l.hat the obligation or the law itself must expressly declare that
the demand is not necessary in order that the debtor shall incur in
delay. This may be illustrated by the following examples:
Let us assume that D borrowed P20,000 from C on Dec. 5, 1976.
lle executed a promissory note promising to pay the indebtedness on
I)ec. 5, 1978. Upon the arrival of the designated date for payment,
is it necessary that C shall make a demand upon D for pa).ment

in order that the latter shall incur in delay? Evidently, such

demand is necessary. In order that the exception stated in No. 1 of

the second paragraph of Art. 1169 shall apply, it is indispensable
t.hat the obligation itself must expressly declare that "demand is not
rrecessary in order that D shall incur in delay" or that "D shall incur

in delay if he does not pay the obligation upon the arrival of the
rlesignated date for payment."5o

Let us, however, assume thatA and B entered into a contract

ol partnership for the purpose of buying and selling textbooks, with
llrc former as capitalist partner and the latter as industrial partner.
ll was agreed that A shall contribute P20,000 to the common fund
on January 5, 1980. Upon the arrival of the designated date for
l)lyment, is demand necessary in order that A shall incur in delay?
I n this case, such a demand is not necessary in order that A shall
rncur in delay. According to Art. 1788 of the Civil Code, where one
rrl the partners who has undertaken to contribute a sum of money
lo thc common fund at a specified date fails to do so, he becomes
rr rlt'btor of'thc partnership not only lbr the amount which he has

(lx|

!'Compania (lcncral

do'l'rrhr** !,, Arrzr. / l'l,rl f,l'i Vcl('i,) rs l,i,rrtlrros,r, l;t

Phil.?9rBay:rlavs.SiLrt'tj'l\'rlli((i,./itl'llll i,l',.A(lr"t, !s (itrrt 'n At,t!'rlrr.lti
Oftl (iaz. l42l

"'Arl Ill;ll. No l, (livil {i,rll'

'l!rvrrlrrvs Srlrrrrx 'l'r'llii (,,, /;l I'lrrl l,5i,Arlrrrrlcvs {irrrrtrnAlplrrls.49Off
(i,rz. l.l)ll. rl Mr"'r,u.I'llt l,il .ltk l. 1, l:f'l
lrll

Arts. 1170-1173

OBLI(;ATIONS

promised to contdbute but also for interest and damages from the
time he should have complied with his obligation.

(2)

When Irom the nature and the circumstances of the

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.55 The basis
of this exception is the fact, that the designation of the time is of
such fundamental importance in the fulfillment of the obligation
that it would be logical to assume that the intention of the parties
was to make fullillment of the obligation upon the arrival of such
designated time an essential part ofthe contract. In other words, the
time element for the fulfillment of the obligation is of the essence of
the contract. Therefore, it must be established that the designation
ofthe time when the obligation shall be fulfilled was a controlling
motive for the execution of the contract. This can be inferred from
the nature and circumstances of the obligation.56 Thus, where in
the contract of sale entered into between plaintiif and defendant
there is a stipulation that the machinery which is the object of the
sale was already on the way from the United States to Manila, but
it is established that it was actually shipped several days after
the execution of the contract and, as a consequence, plaintiff was
unable to deliver it within a reasonably short time to the defendant,
it was held that the plaintiff has already incurred in delay since,
undoubtedly, the representation that such machinery was already
on the way was one of the determining elements of the contract.
Consequently, the subsequent refusal ofthe defendant to accept the
delivery is justified.s'
obligation

(3)

When demand would be useless, as when the obligor has

rendered it beyond his power to perform.ss Thus, ifA, for instance,
has promised to deliver his automobile to B on the 15th day of
Novembcr, 1980, but a lew days before such date, the automobile
was completely destroyed through his fault, and the fhct of its
destruction was known to B, demand by the latter would be useless.

NA'I LJRU AND EFFECT OF Olll.l( lA l

l'hil 71,5
tuA.t Il{;l}.|Ir :).N,,:t ( r\rt(irl,.

Beam.4{)

(io

Arts. 1 170-1173

In such case, A will incur in delay without the need of any demand
from B.

Idem; Default in negative obligations. 'Ihe obligor can

not possibly incur in delay in negative obligations (not to do). According to Manresa, 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
noro. This peculiarity is what differentiates this class ofobligations
fiom positive obligations (to give and to

do).5e

Idem; Default in reciprocal obligations' Reciprocal obligations are 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. These obligations are conditional in the sense that fulfillment of an obligation by one party
depends upon the fullillment ofthe obligation by the other. Thus, in
a contract of sale ofan automobile for P54,000, the vendor is obliged
to deliver the automobile to the vendee, while the vendee is obliged
l,o pay the price of P54,000 to the vendor. It is clear that the vendor
will not deliver the automobile to the vendee unless the latter will
pay the price, while the vendee will not pay the price to the vendor
trnless the latter wilL deliver the automobile. Hence, in reciprocal obligations, the general 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 first paragraph in Art. 1 169 shall apply.60
The rule then is that in reciprocal obligations, 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
l)ropcr manner with what is incumbent upon him.6tIf neither party

crrrnplies or is ready to comply with what is incumbent upon him,

I hc default of one compensates for the default of the other. In such

thcre can be no legal delay. These rules may be illlustrated

lrv l.lre lirllowing example: A sold his automobile to B for P30,000.
'l'lrry irgrccd that dcljvcry tnd payntent shall bc made on the 15th
crrsr,,

rtArt. 1169, par.2, N,).2. (livil( (xl,

568
Manresa. 5th Iril.. llk. I . t,r, titT tlts
5jSolervs (lhcsL v,
'1:l I'lril 5:l1r'li'tl! si rrr.r,flir1:l|:rrr|,rrrs llrrusscrrrrrnrrnrl

lONS

'n M,r"r.s,,, sll, l,irl., llk. l,1r

"'//r,/ . p;, l:l:l lil.l
' A'l lll;lr. t!'r il ( rvrl ( \ri,'

r;l

NATIiRE AND BFFIICT Ol' ( )lll,l(

Arts. 1l70-1173

of November, 1980. On that date, A was not ready to deliver the

automobile, neither was B ready to pay. In such case, neither party
has incurred in delay. If A, however, delivered or was ready to
deliver the automobile, but B did not pay or was not ready to pay,
then B is said to have incurred in delay.62

Idem; id. - Effect of default. - Once the obligor or debtor

has incurred in delay, he can be held liable by the obligee or creditor
for damages.6s This liability subsists even if the thing which constitutes the object of the obligation may have been lost or destroyed
through a fortuitous event.6a

Ifthe obligation consists in the payment ofa sum ofmoney, 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.65
Interest due shall earn legal interest from the time it is judicially
demanded, although the obligation may be silent upon this point.tr

In Malayan Insurance Co., Inc. us. IAC, 146 SCr?A 45, the
Supreme Court reiterated the rule that a debtor who is in delay
(default) is liable lbr damages, in the form of interest.
The Supreme Court ruled in the case of Llorente, Jr. us.
Sandiganbayan, 287 SCRA 382 (1998) that the provisions under
Title XV of the Civil Code on Damages govern in determining the
measure of recoverable damages. It is fundamental in the law on
Damages that one who is injured by a breach ofa contract, or by a
wronpful act or omission, shall have a fair and just compensation
commensurate to the loss sustained as a consequence of the
defendant's act.

Voluntary Breach Through Fraud or Dolo. - The second

kind ofvoluntary breach ofan obligation regulated by the Civil Code
is that which takes place by reason of fraud or dolo. According to
Manresa. liaud or dolo consists in the conscious and intentional
6'zFor

iATIC)NS Ats.

1170-1173

OBLIGATIONS

illustrative cases see Martincz vs. ('r'vivcs, 25 l'hil 5ul; {larrsing

drArt. 1165, par.:1,

{livilt'rrl.
6i'Art.2201,,(livil(lri,srtl{r'lirrrrrNs l"tr!!'l. lllllS('lt^2{i(l,wrlhftIrtrrl l{,1[,
mcaning ol loglll irlr,r'!l
'r'Arl 221l?. ( rvrl ( irI
ri:l

follows:

(1) The first is present only during the performance of a preexisting obligation, while the second is present only at the time of
the birth of thc obligation.
(2)

The first is employed tbr the purpose of evading the

normal fulfillment ofan obligation, while the second is employed for

the purpose of securing the consent of the other party to enter into
1.he contract.

(3)

The first results in the nonfullillment or breach of the

obligation, while the second, if it is the reason for the other party
upon whom it is employed for entering into the contract, results in
the vitiation ol his consent.

(4) The first gives rise to a right of the creditor or obligee to

rccover damages from the debtor or obligor, while the second gives
rise to a right ol the innocent party to ask for the annulment of the
contract ifthe fraud is causal or to recover damages if it is incidental.
Thus, ifA engages to tow a launch belonging to B from Iloilo
Manila, using a steamer for that purpose, and on the way the
lirunch is cast adrift and lost, Art. 1170, in relation to Art. 1171, is
rrpplicable. B can hold A liable fbr damages.?0 On the other hand, if
rr ccrtain applicarnt for an insurance substitutes another person for
lrirnself during the medical examination, it is evident that there has
lx'cn causal fraud or tlol.ct crntsa.nte in securing lhe consent of the
I.o

vs.

Bencer, 37 Phil.417.

"rArt. 1170, Civil Codc.

proposition to evade the normal fulfillment of an obligation.dT

This type of fraud, which is present during the performance of
an obligation, must not be confused with the causal or incidental
Iraud, which is present at the time of the birth of an obligation.
Under our legal system, fraud in gcncral may be classified into civil
and criminal fraud. Civil fraud, in turn, may be classified into the
following: i1rsi, the fraud ordolo in the performance ofan obligation;63
and second, the fraud or clokt in the constitution or establishment of
an obligation.ce The two may bc distinguished from each other as

' 8 Manrosa,,',th lld.,llk. l. p. l{;il.

"A.ts I I70. I l?1, (livil (irL'
"'Arls. lllilll lll,l,l. ('rvrl (ir|
''(irrzrlrrrr r:, ln.lrrr. M|y|r'& 1 ,, 1r l'l,rl Il:l

Arts. 11?0'1173

NA'l'LlRll AND EFFECT OF ORLIGATIONS A:rts. 1170-1173

OBLIGATIONS

insurance company which will entitle the latter to ask fbr annulment

ofthe contract.Tr
Idem; Effect of fTaud.

is a breach or non-fulfill- If there

fraud or dolo on the part of the

ment of the obligation by reason of

obligor or debtor, he can be held liable for damages. As a ground
for darnages, malice or dishonesty is implied. It cannot cover cases of mistake and errors ofjudgment made in good faith. Fraud or
dolo is synonyrnous to bad faith. (O'leary Macondray & Co.,45 Phil.
812 t19241) The liability is expressly recognized by the provisions
ofArts. 11?0 and 1171 ofthe Code. It is also a rule that the liability cannot be waived or renounced. It must be noted, however, that
what is prohibited is the waiver or renunciation which is made in
advance or in anticipation ofthe fraud, and not that which is made
after the fraud has already been committed. In other words, under
fut. 11?1, what is prohibited is the renunciation of the action for a
fraud which has not yet been committed.?'z

Thus, waiver for future fraud is contrary to law and public

policy. As such, said waiver is void. But waiver for a past fraud is
valid since such waiver can be deemed an act ofgenerosity. Further,
what is renounced is the effect of fraud, more particularly the right
of the party to indemnity.
What is the extent ofdamages which the obligee or creditor can
recover from the obligor or debtor in case ofbreach or nonfulfillment
of the obligation by reason of fraud or dolo? According to the law on
damages in the Civil Code, it shall comprehend all damages which
may be reasonably attributed to the breach or nonfulfillment of the
obligation, regardless of whether such consequences are natural or
unnatural, probable or improbable, foreseeable or unforeseeable.T3
In addition to such damages, the obligee or creditor can also recover
moral and exemplary damages.?4 Moral damages may be recovered
in addition to other damages. (Far East Benh & Trust Co. Ds. Court
of Appeals, 59 SCAD 253, 241 SCRA671 [1995].)

Voluntary Breach Through Negligence or Culpa. The

third kind ofvoluntary breach ofan ohligation rcgulalt'd bv t,htr Civil
itEzuaras vs. Clrcat Eustcrr)

l,ili Ass ( i' . il:l |hil

7'z8 Manresa, Sth l')rl
,ltk I,yr l'lti
?3Art. 2201, prrr. 2, ('ivil ( rri
?aArl.s 2220 r"rl 2:l;l:l ( rvrl t ,rI
ri.l

Code is that which takes place by reason of the negligence or calpo

of the debtor or obligor. It consists in the omission of that diligence

which is required by the nature of the obligation and corresponds

with the circumstances ofthe persons, ofthe time and ofthe place.is
From this definition, it is evident that negligence is simply the
absence of due care required by the nature of the obligation.To It is
a relative or comparative, not an absolute term, and its application
depends upon the situation ofthe parties and the degree ofcare and
vigilance which the circumstances reasonably require. Where the
danger is great, a high degree ofcare is necessary, and the failure to
observe it is a want ofordinary care under the circumstances.?? It is in
each case practically a question offact whether the proper deg:'ee of
care has been exercised taking into consideration what a reasonable
and prudent man would have done under the circumstances.T3
Thus, according to the second parag:raph of Art. 1173, 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 ofa family shall be required. Hence, the law has adopted the
standard supposed to be supplied by the imaginary conduct of the
drscreet pater famllios of the Roman Law.7s

It is, therefore, clear that the degree of care that must be

observed by the obligor in the performance of his obligation shall
depend not only upon the nature ofthe obligation, but also upon the
circumstances of persons, time and place. In other words, there are
as many degrees of care as there are obligations.
Idern; Kinds of negligence. - Negligence or culpo may be
either civil or criminal. The first is governed by Arts. 1170, 1172,
1173, and other provisions of the New Civil Code, while the second
is governed by Art. 365 ofthe Revised Penal Code.

Civil negligence, in turn, may be either culpa contractual

or culpa aquiliana (quasi-delicts). Using the general definition of
negligence enunciated in Art. 1173 as basis, the first may be defined
rrs the fault or negligence of the obligor by virtue of which he is
Lrnable to perform his obligation arising from a pre-existing contract,
'tArt.

I 173.

Civil

Code.

"Picllrl. vs. Sn)ith.:17 Phil 8(Xl.

'tl.S. vs Jurrnill{).21} I'hil. 212

'^l'xrrrl vs. S ril.h.li? l'l!'t. 8l)l)

t;5

Arts. 117{I1173

0BI,I(}A'fIONS

is required by the
nature of the obligation and corresponds with the circumstances
of the persons, of the time and of the place. The second, on the
other hand, may be defined as 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 conespond with the
circumstances of the persons, ol the time and of the place, causes
because of the omission of the diligence which

damage to another.

From the above definitions, it is clear that whether the negligence is c:ulpc contractuql or culpa aquilionn, the provision of Art.
1173 ol the Civil Code applies. The negligence of the defendant in
both cases is characterized by the omission of that diligence which
is required by the nature of the obligation and corresponds with the
circumstances ofthe persons, ofthe time and ofthe place. The similarity, however, ends there. They are dillerent with respect to antecedents and consequences. They may be distinguished from each
other as lbllows:

(1)

As regardsthe character ofthe negligence ofthe defendant:

In culpa contractuul, the negligence of the defendant is merely an

incident in the performance of an obligation; rn culpa ctquiliana it is
substantive and independent.

NATfIRE AND EFFECT OF OIll.l(;A'I

IONS

,\rts. 1l70-1173

obligation ofD and ofhis employer to P and to Y. and the detense

available to the employer. (1977 Bar Problem)

Ansuer - There are three overlapping sources of the

obligation of D and ofhis employer. They are:

(1) Under th,e Reuised I'encl Cbdc: 'lhe heirs of I' and Y
may proceed against D and his employer undel the Pcnal Code.
In this case, the source ofthe liability ofD :rnd ofhis cmploycr is
the crime committed by D lcrz lpa criminal). Thc liability of D is
direct and primary (Art. 100, RPC); the liability ofhis employer
is subsidiary (Arl. 103,RPC). 'l'he latter urnnot relieve himself
ofliability by proving due diligence of a good f:rthcr of a f:rmily.
This is so because ofthe very nature ofhis obligntion.
(2)
(a)

Urtder tlrc Citti,l (\xJe:

Heirs of P: The heirs of pedestrian P may ploceed

against both D and his employer, or against the latter only. In
this case, the source ofthe liability of [) and his employer is the
quasi-delict (culpo oquiliana) cotnrntll,cd, by D ( Arts. 2176, 2180,
CC). The liability of both is direct and primary. D's employer
can relieve himself of liability by proving due diligence oI a good
father of a family in the selection and super-r''ision ofhis drivers

(Art.2180,

CC).

(2)

(b) Heirs of Y: On the other hand. the heirs of Y may

proceed against D's employer only. The source of tho liability
of D's employer, in this case, is the breach of his contract of
carriage with Y (culpa contractuall. His liability is direct and

(3)

primary. He cannot relieve himself of liabilitv by proving due

As regards the relationship of the parlies: In the first

there is always a pre-existing contractual relation; in the second
there may or may not be a pre-existing contractual relation.
As re6lards the source of the obligation: In the flrst the
source of the obligation of the defendant to pay damages to the
plaintifTis the breach or nonfulfillment ofthe contract; in the second
thc source is the defendant's negligent act or omission itself.

(4)

As regards the proofrequired for recovery: In the first proof

of the existence of the contract and of its breach or nonfulfillment

is sufficient prima lacie to warrant a recovery; in the second the
negiigence of the defendant must be proved.

(5)

As regards the availability of duc diligcnce as a defensc:

In the first proof ol diligence in thc selcction

an<l supervision of'

in
employces is not available as a clt'fi'rrsr.;
l.hc sccond it is.

'l':rxi rllivcl l), rlliving rllklr.ssly, killtl

I'ntbltnt
l' rrrrrl lris lrrsrcnlt r Y l)iscrrss llrc sorrrlr. ol lh.

pcrlestriatr

ri{i

diligence ofa good father ol a family (Arl. 1759, CC). This is so

because under our law on common carriers. we do not adhere to
the principle of res'pontleat superior; we adhere to the principle

that there is always an implied duty ol a common carrier to

carry the passenger safely to his placc of dcstination. However,
although not available as a defense, such proof of duc diligence
may serve to mitigate the employer's li.rbilitv.

Idem; Negligence distinguished from fraud. - Negligence

or cuLpa, especially in relation to obligations, signifies an act or
ornission which is voluntary in chtrracter by virtue of which another
1x:rson sufTers damage or iniury duc to a firilure to observe the
rliligence which is required by thc ntturc ol thc obligation and which
rtllrsl, corrcspond with th(' circurrsl.iui( ('s ol pcrsorrs. tirn<' and place.
ll. should lx'rlislingrrishctl lirrrrr li;rurl or r/r,/,r ulriclr is l.lrc consr:ious
rurtl irrLr.rrIrorrirI ylolxrsil.iorr lo lrrrrlc llrt' nolrrr;rl lirl(illrrcrl. ol l.lrc

Arts. 1170-11?:l

NA'f tJRll AND IIFFECT OF

UBI,IGATIONS

obligation. The distinguishing element, therefore, is the element

of intention. If there is intent to cause damage or injury, there is
dolo; if there is merely abandonment, inattention, carelessness, or
lack ofdiligence, there is calpo.30 It must be observed, however, that
when negligence shows bad taith the rules on fraud or dolo shall
govern.3l In other words, when the negligent act or omission rfthe
obligor while perfbrming his obligation is so gross that it amounts
to a wanton attitude on his part, the laws governing the liability
of an obligor in case of fraud shall then apply. In such a case, the
boundary line between negligence and fraud practically disappears.

Idem; Test of negligence.

The test by which we can

determine the existence of negligence in a particular case may be
stated as follows: 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. The law here in eflect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet
pater familias of the Roman Law.3'?

Phil. 763
The records show that plaintiff, who was a passenger in
a train belonging to the defendant companyJ alighted from the
said train while it was still moving before coming to a complete
stop. In so alighting, he stepped upon a sack of watermelons
and as a result he fell violently on the platform. Because of
the violence of his fall, he rolled from the platform and was
drawn under the moving car, as a result of which his right arm
was badly crashed and lacerated. In this action for damages
38

commenced by the plaintiffagainst the defendant company, the

former contends that the proximate cause of the accident was
the negligence of the latter in allowing the sack of watermelons
to be placed in its platforrn where passcngers mav alight, while
the latter contends that thc proximattr cause was lhe ncgligence

of the former in alighting while thc train was still moving.

Granting that the defendant comprtny wrrs ncgligtrnl. in rtllowitrg

the sack of watermt:lons to lx' pl:rct'tl irr i(s plitllirltrr, was

l.hc

308

*'11'icnrt

vr S|lrrth :l'l Ilrl Elrlr l Irt1| v,

r;r1

l\'!,Irrlrr llrrrl|rrrrl t

IONS

AIts. 1170

plaintiff also negligent in alighting from the train while it was

still moving?

Held: "'lhe test by *'hich to deterrnine whether the

passenger has ber:n guilty of negligencc in attempting to alight

from a moving railway train, is th:it of ordinary or reasonable

care. It is to be considered whether an ordinarily prudent
person, of the age, sex and condition of the passcngcr, would
have acted as the passenger acted under the circumstances
disclosed by the evidence. This care has been defined to be
not the care which may or should be used by the prudent man
generally, but the care which a man ol ordinary prudence would
use, under similar circumstances, to avoid injury. (Thompson,
Commentaries on Negligcnce, Vol. 3, Sec. 2010. ) Or, if we prefer
the mode of exposition used by this court in Picorl us. Smith
(3? Phil. Rep. 809), we may say that the test is this: Was there
anJthing in the circumst.tnces surrounding the plaintiff et the
time he alighted from the train which would have admonished
a person of average prudence that to get off the train under
the conditions then existing was dangerous? If so, the plaintiff
should have desisted from alighting; and his failure to so desist
was contributory negligence.

"As the case now before us presents itself, the only

Cangco vs. Manila Railroad Co.

Manrcsd, Sl.h l'il., llk I. t, l$ll

srArt ll7;1,|rrr I ( rvrl tirir'

olll.l(lA'f

,'.:ltt l'htl

fact from which a conclusion can be drawn to thc effect that

the plaintiff was guilty of contributory negligence is that he
stepped off the car without being able to discern clearly the
condition of the platform and while the train was yet slowly
moving. In considering the situation thus presented, it should
not be overlooked that plaintiff was ignorant of the lact of the
obstruction which was caused bv the sacks of watermelons
piled on the platform. The place was dark, or dimly lighted.
Furthermore, the plaintiffwas possessed ofthe vigor and agility
ofyoung rnanhood, and it was by no means so risky for him to get
o{I while the train $'as yet moving as the same act would have
been in an aged or feeble person. In determining the question of
contributory negligence in performing such act that is to say,
whether the passenger acted prudently or recklessly
- the age,
sex and physical condition of the passenger are circumstances
nccessarily allecting the safety of the passenger, and should
be considcred- Women, it has bccn observed! as a general rule,
arc krss capable than mcn of alighting with safety under such
conditions, as the nflturo of thcir wearing apparel obstructs
lhc lito movcnrcnt ol thc lirnbs- Again, it may be noted that
Lhr,pl:rr.wrrs pr.rlitllv lrrrlili:rr 1.rr l.ht'plrrintill as it was his
rIrily crrslorrr lrr 11r.t rrn rrrrl oll llrr'lrllirr t Ihis st.irl.irl .'l'here

rrrrlri. IIrr.r'r'IirIr,

l'.

,ro rrrrrl,rlrirrlv irr his nrirrrl wilh

r;1t

r.r'glrrd

11?3

Arts.

1170-117i1

ORI,TCATIoNS

NATIIRII AND lll'FECl' Ol' ORLI(IA'IIONS Arts. 1170-l173

either to tho length of the step which he was required to take

or thc charactel ol the plaifbrm where he was alighting. Our
conclusion is thut tht: conduct of thc plaintiff in undertaking
to alight u'hile thc train was yet slightlv under way was not
charactcrizcd b] imprudcnce and that, therefore, he was not

liability ofthe carrier to an agreed valuation unless the shipper

declares a higher value and pays a highcr rate of freight.
According to an almost uniform weight ofauthority the first and
second kinds of stipulations are is valid as being corrtrary to
public policy, but the third is valid and enforceable."

guilty of contributoly ncgligence."

Idem; Effects of negligence. - If the debtor or obligor

is unable to comply with his obligation because of his fault or
negligence. the creditor or obligee can hold him liable for damages.s3
This liability subsists even jf he has been acquitted in a criminal
action charging him with a criminal offense based on his negligent
act or omission.sl

It must be observed. howevcr, that Art. 1172 which enunciates

the principle of the dcmandability of the responsibility of the
obligor in case of negligence is different from Art. 1171 which also
enunciates the same principle in case of fraud in the sense that
in the former, nothing is said with regard to the renunciation or
waiver of the action, while in the latter, it is stated that any waiver
of an action for future tiaud is void. Consequently, may an action
for negligence be waived? There is no question that if the action is
based on a negligent act or omission which has already happened,
the action may be waived since it can also be done in the case offraud
and negligence is certainly not as serious as fraud. The question is
wilh respect to an action for future negligence. Can it be waived?
Authoritics agree that it can be waived, unless the nature of the
obligation and puhlic policy should require extraordinary diligence
as in the case of common carriers.s5 Thus, the Supreme Court in the
case of Heucoch us. Macondra3r & Co.,36 stated:
"Thrce kinds of slipulation havc often been made in a bilL
of lading. Thc first is one exempting the carrier from any and
all liability for loss or damage occasion{'d by its own negligence.
The second is one providing for an unqualified limitation ofsuch
liability to an agreed valuation, and the third is onc limiting the

'rArt. t l?0. Civil Oodci It.rer, Si'tri,'r & (i, vs (i'r'rp:tnrrt

Guzman vs. Bchn, M.vcr & (i,..1) I'hil ll2
"'San I'edro llus Lincs vs. Nrr!irrrr'. lrl l'lrrl sl{i: stt Arl

Mrrrilinrl

{i

I'hil 2l'rr

lll (lvrl (ixl(

l7;]:|. (livil (,|(L'rsi,'rrlr,'Arti I/15. l/'111. l/ln),( rvrl (inlt

-(;421'hil 205 11r:i, \,, r1,1,, 1r,,,,, 11r"r,,"k v,, M,rrlrrrlrrrv rs rrrw rrrrrlrlrrl hv llrr'
provisiorrs,,l Art., l,l1r 1,, l/lnr,'l ll" Ni \r Lul ( rrl'
35Art-

ltt

In the case of Southeastern College, Inc., us. Court ol Appeals,

,Iuanita de Jesus Vda. De Dimaano, et al., lJdy 10, 1998, 292
SCRA 422), the Supreme Court observed that at the outset, it bears
emphasizing that a person claiming darnages for the negligence
of another has the burden of proving the existence of fault or
negligence causative of his injury or loss. The facts constitutive of
negligence must be affirmativcly cstablished by competent evidence,
not merely by presumptions and conclusions without basis in lact.
Private respondents, in establishing the culpability ol petitioner,
merely relied on the aforementioned report submitted by a team
which made an ocular inspection ofpetitioner's school building after
l.he typhoon. As the term imparts, an ocular inspection is one that
is conducted by means of actual sight or viewing. What is visual to
the eye though, is not always reflective of the real cause behind.
I.'or instance, one who hears a gunshot and then sees a wounded
person, cannot always definitely conclude that a third person shot
t.he victim. It could have been self-inflicted or caused accidentally by
rr stray bullet. The relationship of cause and effect must be clearly
shown.

Idem; id. - Regulatory power ofthe courts. - Under Art.

liability arising from negligence in the performance of every
kind of obligation may be regulated by the courts. Consequently,
I Ir(! court may increase or decrease the liability of the party at fault
rlcpending upon the circumstances of each case. Thus, the court
rrriry take into consideration the good or bad faith of the obligor
trk'fendant) or the conduct ofthe obligee (plaintiffl when the damage
wirs incurred.
| 172,

Idem; id,; id. - Effect of good faith. - If the debtor or

olrligor has acted in good faith, he shall be liable only for natural
;rrrrl probable consequences ofthe breach ofthe obligation and which
llrc parlies have foreseen or could have reasonably foreseen at the
lirnt' lhe obligtrtir)n was con sl,it,u tcd.fr
M,,rrrlrr

't

l,llr,lIir ( o..1r) l'hil

7(J6.

Arrs l1?0-l173

NATt-rItFl ANI) IiFFECT OF

OBLIGATIONS

Idem; id.; id.

Effect of bad faith.

- If the negligence of
provision ofArt. 1173,

the obligor shows bad faith, then, by express

the provisions ofArts. 1171 and 2201, par. 2, shali apply. It is in this
case that the boundary line, at least with regard to effects, between
negligence and fraud disappears altogether. Hence, the obligor
can be held responsible for all damages which may be reasonably
attributed to the nonperformance of the obligation.33 Furthermore,
any waiver or renunciation which is made in anticipation of such
Iiability is null and void.3s

Idern; id.i id. - Effect of contributory negligence. - If

there was contributory negligence of the obligee or creditor, the
effect is to reduce or mitigate the damages which he can recover
from the obligor or debtor as a result ofthe breach ofthe obligation.
This doctrine has always been consistently upheld by the Supreme
Court.eo Attention, however, must be called to the fact that if the
negligent act or omission ofthe obligee concurred with the negligent
act or omission of the obligor in causing the injury complained o{
in other words, if the negligent act or omission of the obligee was
a proximate cause of the event which led to the damage or injury
complained of, he cannot recover. It is, therefore, of the utmost
importance to determine whether the negligence of the obligee or
creditor was a proximate cause ofthe accident or event which led to
the injury or merely contributory to his own injury. The test is given
in the following case:
R.akes vs.

Atlantic Gulf and Pacific Co,

7 Phil. 359

This is an action to recover damages- The plaintiff, one

of a gang of eight Negro laborers in the employment of the
defendant, was at work transporting rails from a barge in the
harbor to the company's yard near the Malecon in Manila. Thc
rails lay upon two crosspieces secured to the cars, but without
sidepieces or guards to prevent them from slipping ofll At a
certain spot at or near the water's cdgc the trttck saggcd, th(r tio
33Art.2201, par.2. ( liv il {ltxk.
3'gArt. 1171.

Civil ('(xl'..

sRakcs vs. AlLrnlir'. (lrrll rrrrl llrr rlir ( ,,. / l'lIl ;Jl,ll, ( rrt3!, vs l\'ltttttltt lltttl
road Co.,;]{; I'l,il 7riri. li,,rmrrit vr Mrrrrrl,r lllrlrrrrrl ( o. l1 I'l',1 l{;l', 1)r'l I'rrrl,r vr
Mrrrrilrr l,lIr'l Irr' { ir . i,:l l'l'rl 1x)lr

ORLIGATIONS Arts.

1170-1173

broke, the car canted, the rails slid ofl and caught the plaintiff,
breaking his leg, which was afterwards amputated at about the
knee. The cause ofthe sagging of the track is admitted to be the
dislodging of the crosspiece under thtl stringer by the water of
the bay raised by a recent typhoon. The superintendent of the
company attributed it to the giving way of the block laid in the
sand. No eflbrt was made to repair the injury at the time ofthe
occurrence. According to the plaintiffs witnesses, a depression
of the track was apparent to the eye, and a fellow workman of
the plaintiffswears that the day bcforc thc accident he called the
attention ofthe foreman to it and asked him to have it repaired.
lt is also admitted that there was a prohibition imposed by the
defendant company against walking by the side of the car and
that the plaintilT was walking by the side of the car when the
rails slid off. The question now is - what effect is to be given to
such act of contributory negligence?

Ileld: "Difficulty seems to be apprehended in deciding

which acts of the injured party shall be considered immediate
causes of the accident. The test is sirnple. Distinction must be
made between the accident and the injury, bctween the event
itself, without which there could have been no accident, and
those acts of lhe victim not entering into it, but contributing
to his own proper hurt. For instance, the cause of the accident
under review was the displacement of the crosspiece or the
failure to replace it. This produced the event giving occasion for
damages that is the sinking of the track and the sliding of the
iron rails. To this event, the act of the plaintiff in walking by
the side ofthe car did not contribute although it was an element
of the damage which came to himsell Had the crosspiece been
out ofplace wholly or partly through his act or omission ofduty,
that would have been one of the determining causes of the
event or accident, for which he would have been responsible.
Whcre he contributes to the principal occurrence, as one ofits
determining factors, he cannot recover. Where, in conjunction
with the occurrence, he contributes only to his own injury, he
trray recover the amount that the defendant responsible for the
cvent should pay for such injury, less a sum deemed a suitable
,.r1rrrr;rltnl frrr his own imprudence.

"Accepting, though with some hesitation, the judgment

ol l.hc l,rial ururt, lixing tht' damage incurred by the plaintiff
rrl 5.{X)0 1x'sos, tlrc lrlrriv;rlonl o1 2,500 dollars, United States
rr()nr.r-, w( rl'rlrrcl Ilrr.rr.liorrr 2,5(X) pcsos, the amount fairly
rrllrrlrrrl.r.rl lo his rrIglr11r.rlfr', rrrrrl rlilIr't .jll(lgnnrnl to bc entered
in llr vor ol l lrr, lrlrr rrrl rll lirl I lrr. r'r.rrr ll irrg su rrt ol 2,!r(X) gx'sos, with
r

ill

\
Art 1 l74

costs to both instanccs and ten dnys theroaller let tht: case be

rcmanded to the court below for proper acti(,n-"

Idem; id.;

id. - Other circumstances. - Besides the

preceding sections, the courts may

circumstances referred to in the

also equitably mitigate the damages in the following instances:

(1) Where the plaintiffhimself has contravened the terms of

the contracl:
(2)

Wherc the plaintiffhas derived somc benefit as a result of

the contract:

(3) In cascs where exemplary damages are to be awarded,

where the defendant acted upon the advice of counsel;
(4)
(5)

\TURE AND EFFE(.T OF

ORI,I(]ATIONS

Where the loss would have resulted in any cvenl; and

Where upon the filing of the action, the defendant has

done his best to lessen the plaintiffs loss or injury.er

Voluntary Breach Through Contravention of Tenor

of Obligation. - Under Art. 1170 of the Civil Code, not only
debtors guilty of fraud, negligence or default in the performance
of obligations are decreed liable; in general, every debtor who fails

in the performance of his obligations is bound to indemnify the

creditor for the damages caused thercby. The phrase "in any manner
contravene the tenor" of the obligation includes not only any illicit
act which impairs the strict and faithful lulfillment ol the obligation,
but also every kind of del'ective performance.!2

Art. 1174. Except in cases expressly specified by the law'

or Ishen 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.l'i
Concept of Fortuitous Event. According to the ;rbovtr
article, fortuitous event may be defined as an event which could
not be foreseen, or which, though forcsccn, wrts incvil,lrbll:. Il is
'g'Art.2215, (livil

lrrl

lr,Arri(,tll vs. Nlti0,ll,l l{r{(,r,r'.1 ( ,,rl r r,'t,. l0ll{ llA /ll

'"Arl ll)l;. St,:rnrsl' ( rrrl { ,rl. ri ',,', r',1,,l l,'rr"

'i1

'

j
'ItI II;A II')N

Art.

1174

clear from this definition that the prescnce of eithcr the element
of unforeseability or inevitability would be sufficienl to classify
the event as fortuitous in character. Hencc, even if thc event was
not inevitable if it could not have been foreseen. or cven if it could
have been foreseen if it was inevitable, it would be considered as a
fortuitous event. It is evident, therefore. that the definition is broad
enough to comprehend "acts ol God" or those which are absolutely
independent of human intervention, such as rains, tvphoons, floods,
cyclones, earthquakes or any other similar calamily brought about
by natural forces. It is also broad enough to lnclrnde force mayur.:
or events which arise from legitimate or illegitimate acts of persons
other than the obligor, such as commotions, riots, wars, robbery, and
similar acts.

The antecedent of fortuitous event or (:a!to fortuito is found

in the Partidqs which defines it as "an event which takes place by
accident and could not have been foreseen." Escriche elaborates it as

"an unexpected event or act of God which could neither be fbreseen

nor resisted." Civilist Arturo M. Tolentino adds that "lflortuitous
cvents may be produced by two general causes: r,7.,) by nature, such as
carthquakes, storms, floods, epidemics, fires, etc. and (2) by the act
of man, such as an armed invasion, attack by bandits, govcrnmental
prohibitions, robbery, etc." (South.eastern College, Inc. us. Court of
Appeals, JuIy 10, 1998, 292 SCRA 122.)

Classification. - Fortuitous events may be classified into

lbrtuitous event proper (act of God) and lbrce majeure (fuerza mayor)
tlepending upon whether there is human intervention or not. The
first refers to an event which is absolutely independent of human
intervention, while the second refers to an event which arises fiom
lcgitimate or illegitimate acts of persons other than the obligor.r!
'l'he distinction, however, is merely technical. Essentially, there is
rro substantial difference between the two: both refer to an event or
crruse which is independent of the will of the obligor.ri
As to foreseeability, fortuitous events may also be classified into
rrldinary and extraordinary fortuitous event. The first refers to an
cvcnt which usually happens or which could have been reasonably
lirrcseen, while the second refcrs to an event which does not usuallv

"t{ MrI)r.sir,5llr l,il.,

'' llDrv.rsrlr,)l SIltr)

llk l, g, :lttt
li'rr',, !,, 1r,,,!,rl:

:l11

l'l,rl :ltii

Art.

ORI,T(]ATIONS

1174

happen and which could not have been reasonably foreseen, such as
fire, war, pestilence, unusual flood, locust, earthquake' and othets of
a

similar nature.l'6

Effect upon Obligation. Ifthe obligor is unable to comply

with his obligation by reason ofa fortuitous event, the general rule is
that he is exempterl from any liability whatsoever.lr? In other words,
his obligation is extinguished.'gN
Thus, where the obligor is unable to surrender his revolver to
the government upon demand because it was lost during a storm,ss
or to return some photographic negatives that were entrusted to him
b5, the obligee because of a fire of accidental origin which destroyed
his place ol business,r00 or to deliver cerlain animals which he had
contracted to give to the obligee at a speci{ied date because they dies
of natural causes or were killed during an epidemic before he could
deliver them to such obligee,rol it was held that since the breach of
the obligation is due to a lortuitous event, it is thereby extinguished;
consequently, he cannot be held liable for damages.
The application of this rule is even more evident in motor vehicle accidents. Thus. where it was established that the defendant's
bus was bumped by another bus which caused the driver to swerve it
to the left so as to prevent it from falling into a canal and as a result
it struck a tree, which led the bus to skid and capsize, it was held
that since the injury can be attributed or imputed only to an inevitable accident and not the misconduct or negligence of the operator
or ofthe driver, there can be no possible recovery of damages'r02 But
where the accident is due to a defect c'f an equipment or of an appliance purchased from a manufacturer, it is clear that such a defect
cannot be considered a lbrtuitous event within the meaning of the
law. This doctrine is very well illustrated in the case of Necesito us'
Paras.1"'\ In this case, it was proved that the bus, where one of the
1"rArt.
'q

l6ll0. 0ivil Code.

Art. 11?4. Civil

Code.

e"See

Arts. 1262. 1266, Civil Code.

r'jGovernment vs- Bingham, 13 l'hil 185 but s({'(iovernrnenl vs Amechuzrrrrrr'
l0 Phil.637.
i'Brownvs. Roblrrt,40 I'hil 1)1)l)i l,rzrrr':'"' ll'rrr;r(2. 11ll'hil 1)1Jl
rnPotaciov! Surlrr|io, ? I'ltrl ;a?r' ( rrrIrIvr] (:"r)zirrl:r. lr) l'hil l;l{j
,',iAmpt]ng vs ( I r r i r , r r r , (,, l] l,l,,l lo8:'
.

,r 10,1 I,tr

il

I r

' I

75

/l;

NATIIRE AND EFFECT OF oRI,I(iATIONS

Art.

1174

plaintiffs and his mother were riding as passengers, was on its regular run when all of a sudden the steering knuckle broke, as a result
of which the driver lost control of the wheel, causing the bus to fall
into a ditch. The aforesaid plaintiff was injured, while his mother
was killed. Subsequently, an action to recover damages was brought
directly against the operator of the bus. Defendant now claims that
the cause of the accident is a fcrrtuitous event. Refusing to accept
this defense, the Supreme Court declared:
"The preponderance of authority is in favor ofthe doctrine
that a passenger is entitlcd to recover damages from a carrier
for an injury resulting from a defect in an appliance purchased
from a manufacturer, whenever it appears that the defect would

ifit had exercised the degree

of care which under the circumstances was incumbent upon ii'
with regard to the inspection and application of thc necessary
test. For the purposes of this doctrine, the manufacturer is
considcred as being in law the agcnt or scrvant ofthe carrier, as
far as the work of constructing the appliance. According to this
theory, the good repute of the manufacturcr will not relieve the
carrier from liability. (10 Am. Jur. 205, s. 1324; and cases cited
therein.) The rationale ofthe carrier's liability is the fact that the
passenger has neither choice nor control over the carrier in the
selection and use ofthe equipment and applianccs in use by the

have been discovered by ihe carricr

carrier. Having no privity whatever with the manufacturer or

vendor ofthe defective equipment, the passenger has no remedy
against him, while the carrier usually has. It is but logical,
therefore, that the carrier, while not an insurer of the safoty of
his passengers, should ncvertheless be held to answcr for the
flaws ofhis equipment if such flaws were at all discoverable.
"In the case at bar. the record is to the effect that the only
test applied to the steering knuckle in question was a purely
visual inspeclion every 30 days, to see if any crack developed'
It nowhere appears that either the manufacturer or the carrier
at anltime tested the sleering knuckle to ascertain whether its
strength was up to standard, or that it had no hidden flaws that
would impair that strength. This pcriodical visual inspection
of the steering knuckle as practised by the carrier's agents
did not measure up to the required legal standard of 'utmost
diligence ofvery cautious persons' . .'as far as human care and
foresight can provide.'Thorefore the knuckle's failure can not
be considered a fortuitous cvcnt that would cxcmpt the carrier

liom responsibility. ll'dsalrt t's. Sntith, 16 Phil 657: &tt

(lebu Att ints (It.1' 61a)at, A' rtl JO. l:)51 )"

us

OBI,IGATIONS

NA,tURE AND EFFE( f OF I 'Rl,tr iATIONS

The above doctrine was also applied in a much more recent

- the case of .Lo Mallorca us. De Jesus.'oa Although there is
authority to the effect that a tire blowout as a proximate cause for
a motor vehicle accident can be classified as a fortuitous event,lot
nevertheless, where it was established that the bus involved in the
accident was running quite fast immediately before said accident,
and that the cause of the blowout was a mechanical defect of the
conveyance or of its equipment which could easier have been
discovered if the bus had been subjected to a more thorough or rigid
check-up before its use, it was held that the plea ofcoso fo rtuito ir

Avenue in Makati, Rizal, going northwards At the intersection

ol Ayala Avenue and Makati Avenue, lRayandayanl was going
to turn left on Makati Avenue but he stopped to wait for the
left-turn signal and because a jeep in liont of him was also at
a stop {' * *. While in that stop position, the lHolden] car was

{rt.1174

case

such case cannot be entertained.rm

In connection with the doctrine enunciated in the above cases,

the following decision penned by ChiefJustice Enrique Fernando is
interesting.
TUgade vs. Court of Appeals
85 SCnA 226

There is nothing impressive about this petition seeking

justify a review of a decision of respondent Court ofAppeals
on the ground that instead of relying on what counsel considers
applicable rulings of respondent Court, the judgment was
based on a case decided by this Tribunal. Moreover, counsel for
petitioner ignored earlier doctrines of this Court consistently
holding that a mishap caused by defective brakes could not
be considered as fortuitous in character and thus called for an
to

acquittal ofthe driver ifsubsequently haled to court. This Court,

nonetheless, was persuaded to give due course to the petition
primarily for clarifying the state of the law and thus hopefully

avoid any further lurking doubt on the matter.

It is quite

evident that a reversal of the decision sought to be reviewed is

notjustified.
The decision of respondent Court, with Justice Juliano
Agrava as ponente, set forth the relevant facts thus: "At
about 9:15 o'clock in the morning of January 4, 19?2, Rodolfo
IRayandayan] was driving a Holden Kingwood car (the IHolden I
car), bearing Plate No. 52-19V (L,Rizal'71), owned by the Sta.
Ines Mining Corp. and assigned for use ofits manager, on Ayala

'M1? SCRA 23.

lo5Rodriguez vs. Red Lin{' Trnns
('4,51
Mallorca
vr.
l)r,
J0g,re.
l7
S(:llA
1.1:l
'6La

(i',

(XI (i'rz

ll(XX;

A-rt. 1174

bumped from behind by Blue Car Taxi, bearing Plate No 55?1R (TX-QC '?1) and driven by Inocencio lTugadel causing
damage to the lHo]denl car, the repairs of which cost P778.10
* * * [Tugade] was then charged with Reckless Imprudence
Resulting in Damage to Property. He pleaded not guilty and
while admitting that the collision was caused by faulty brakes
ofhis taxicab, sought to exculpate himself with the explanation
that this fault could not and should not be traced to him. Afier
trial, the lower court held: 'lAccordinglyl, the Court finds
that accused Inocencio Tugade was guilty beyond reasonable
doubt of the crime of reckless imprudence resulting in damage
to property and hereby sentences him to pay a lline of one
thousand (P1,000.00) pesosJ, with subsidiary imprisonment in
case of insolvency in accordance with the provisions of Article
39 ofthe Revised Penal Code, as amended, to indemnify the Sta.
Ines Mining Corporation in the amount of P778.10 by way of
actual damages; and to pay the costs.' While fTugade] admitted
the facts ofthe case as set out above, he, nevertheless, appealed
from the judgment reiterating that 'the malfunctioning of the
brakes at the time of the accident was due to a mechanical
defect which even the cxercise ofdue diligence ofa good father of
a family cannot have prevented.'As the lower court had found:

'this witness (lTugadel) testilied that after the accident,

he

admitted that his taxicab bumped the car on his front because
the brakes of his vehicle malfunctioned; and that the document

* x x is the handwritten statement he prepared to this effect.' "

Respondent Court ofAppeals, after stating that upon review of
the record, it agreed with the trial court, rendered ils decision
a{firming ia toto the judgment appealed from.
As noted at the outset, pctitioner is not entitled to
acquittal. His plea firr the reversal of thc decision reached by
respondent Court is not impressed with merit. At the most' as
was likewise previously mentioned, the fine imposed could be
rcduced.

1 Counsel for petitioner vigorously contends that

respondent Court of Appeals ought not to have applied the
pronouncement in I'a Mtl.lorcu 2\ttd ltompanqa Bus Co. us
1)c.,/t,o^as on thc grortntl t.hrrl. it was t)bitar diti nL That is not
thc casc at rll. A littlc tttotc litttI rrntl rtl.t.trntion in thtr study of
thc alxrvc dccisiorr cortkl lrrrvc rlsrrllcrl ill iis r!)lr(\'l rrpprlrislrl

'ltl

Art.

1174

OBI,ICATIONS

He would have realized then that respondent Court

NATURE AND EFFEOT OF OIJLIGATIoNS

acted

correctly.- This Tribunal passed squarely on the specific issue

reised. The opinion penned by the then Justice, later Chief

Justice Makalintal is categorical: "petitioner maintains that a
tire blow-out is a fortuitous event and gives rise to no liability
for.negligence, citing the rulings of the Court of Appeals ii
Rodriguez us. Red Line Tronsportdtion Co.. CA.G.R. Ijo. gtSA,
D:ccn!:r,2-2, 1954, and Peopte us. palapat. CA-C.R. No. I84BO,
June 27,-1958. These rulings, however, not only are not binding
on this Court but were based on considerations quite differeni
from those that obtain in the case at bar." The above doctrine
is
controlling. The reference to the Court ofAppeals decisions is of
no moment. r07 Itmay be pointed out that they were nol ignored
in the opinion of Justice Agrava, six of its nine p^g""-b"i.rg
devoted to distinguishing them. Even without tf," L."fr,f.ff.i"i
ruling then, the decision of respondent Court sought to be
reviewed can stand the test ofstrict scrutiny. It is this"Tribunal,
not respondent Court ofAppeals, that speaks authoritatively.

2.

Respondcnt Court of Appeals really was devoid of

It could not have ruled in any other way on the
legal question raised. This Tribunal having spoken, its duty was
to obey. It is simple as that. There is relevance to this excefi
ftom Barrera us, Barrera:roa "The delicate task of ascertaining
the significance that attaches to a constitutional or statutory
ptovision, an executive order, a procedural norm or a municipj
ordinance. is committed to the judiciary. It thus discharges
a role no less crucial than that appertaining to the other ivo
any choice at all.

to defer and to submit."10e The ensuing paragraph ofthe opinion

in Barrera further emphasizes the point: "Suci a thought was
reiterated in an opinion of Justice J.B.L. Reycs and hrther

I"?The cases follow:

People vs. HattoD, CA-(;lt No ltJt{) lt, l.(,b. I l. lgl,,J; I1\,
_
ple vs. Oligan, CA-G.R. No. 05b83,CR, Aug. t?, [)67: Il,r,pt.
p,,f,,i,"i
r; H.
"". 2r,iiii.ti, i;n
y^o:^18180-9r., June 27, tsss; people vs 8an<lonil, (.A (; ri N,,
M,," 2it,
1959; People vs. Aralar, CA-(lR No. ot1,.)t (:r., N,,v,,nrh.r 21,, trx;:r;
rrrrrt i,r.opt{' vs
Buenaventura, CA-c.R No.0(Xj2(; (.r, At,rrl :i{), llt(i,l
'4L31589, Julv :]1. 1970, :tn s('tt^ l[]
t@Ibid.,lO7 'I'ho opinx,h .'t J,rntrrr.
t,,rrrr,.t rrr t,,alt,t,, v{ V,.rr. r;1., t,t,rt t,r; , llrjr7)

1174

emphasized in these words: 'Judge Gaudencio Cloribel need not

be reminded that the Supremc Court, by tradition and in our
system ofjudicial administralion, has the last word on whal, the
law is; it is the final arbiter ofanyjustifiable controversy. There
is only one Supreme Court whose decisions all other courts
should take their bearings.' "rro

3.

The lack ofmerit in this petition becomes even more

it is recalled that the Zo Mallorco decision did not
enunciate a new principle. As far back aa Lasam us. Smillr,lrl
promulgated more than half a century ago, in 1924 to be exact,
this Court has been committed to such a doctrine. Thus: "As
will be seen, these authorities agree that some extraordinary
obvious when

circumstance independent of the will of the obligor, or of his

employees, is an essential element of a caso fortuito. Turning
to the present case, it is at once apparent that this element is
lacking. It is not suggested that the accident in question was
due to an act of God or to adverse road conditions which could
not have been foreseen. As far as the record shows, the accident
was caused either by defects in the automobile or else through
the negligence ofits driver. That is not acaso fortuito."rr2 Lasam
was cited with approval in the iwo subsequent cases of Son us.
Cebu Autobus Co.rl3 and Necesifo ls. Poros.lrr

WHEREFORE, The decision

of

respondent Court of

Appeals of December 15, 1977 is affirmed. No costs.

The following decision penned by Justice Gutierrez, Jr. is
equally interesting:

departments in the maintenance of the rule of law. To a"su."

stability in legal relations and avoid confusion, it has to speak

with one voice. It does so with finality, logrcally, and rig'htty,

!lt-uC.h t!9 highest judicial organ, this Cou"t. Wf,ut it'"aj"
then should be definitive and authoritative, binding on thole
occupying the lower ranks in the judicial hierarchy. They have

Art.

.tuntilla

v8. FontaDar

136 SCRA 625

This is a petition for review, on questions of law, of the

decision of the Court of First lnstance of Cebu which reversed

the decision of the City Court of Cebu and exonerated the

respondents from any liability arising from a vehicular accident.
The background facts which led to the filing ofa complaint
for breach ofcontract and damages against the respondents are
summarized by the Court of First Instance ofCebu as follows:
r"ilbid., Justice J.B.L. Reyes spoke thus in Albert vs. Court ofFirst Instance of
lvlrnila (Br. \1), L-26364, May 29, 1961t, 23 SCRA 948, 961.
,,,45 Phil.657.
'. tbk|..661-662.

t'hil. 892 ( 1954r.

irtlt)4 Phil 7l-r t l95llt
'L'1).1

nl

Art.11'14

Art. 1174

OBI,ICATIONS

NATURE AND EFFECT OI.' OBI,I(;ATIONS

"The facts established after trial show that the plaintiff

was a passenger of the public utility jeepney bearing plate No.
PUJ-71-? on the course ofthe trip from Danao City to Cebu City.

The respondents appealed to the Court ofFirst Instance of

Cebu Branch XfV.

The jeepney was driven by defendant Berfol Camoro. It was

registered under the franchise ofdefendant Clemente Fontanar
but was actually owned by defendant Fernando Banzon. When
the jeepney reached Mandaue City, the right rear tire exploded
causing the vehicle to lurn turtle. In the process, the plaintiff
who was sitting at the front seat was thrown out ofthe vehicle.
Upon landing on the ground, the plaintiff momentarily lost
consciousness. When he came to his senses, he found that he
had a lacerated wound on his right palm. Aside from ihis, he
suffered injuries on his left arm, right thigh and on his back.
(Exh. "D") Because of his shock and injurics, he went back to
Danao City but on the way, he discovered that his'Omega'wrist
watch was lost. Upon his arrival in Danao City, he immediately
entered the Danao City Hospital to attend to his injuries, and
also requested his father-inlaw to proceed immediately to the
place of the accident and look for the watch. In spite of the
efforts ofhis father-in-law, the wrist watch, which he bought for
P852.70 (Exh. "B") could no longer be lbund."

xxx

x1<x

xxx

Petitioner Roberto Juntilla filed Civil Case No. R-17378

for breach of contract with damages before the City Court of
Cebu City, Branch I against Clemente Fontanar, Fernando
Banzon and Berfol Camoro.

Judge Leonardo B. Caiares reversed the judgment of the

City Court of Cebu upon finding that th accident in question

was due to a fortuitous event. The dispositive portion of the
decision reads:
"WHEREFORE, judgment is hereby rendered exonerating

the defendants from any liability to the plaintiff without

pronouncement as to costs."

A motion for reconsideration was denied by the Court of

First Instance.

The petitioner raises the following alleged enors

committed by the Court ofFirst Instance ofCebu on appeal

"a. The Honorable Court below committed grave

abuse of discretion in failing to take cognizance of the fact
that defendants and/or their employee failed to exercise

'utmost and/or extraordinary diligence' required of common

carriers contemplated under Art. 1755 of the Civil Code of the
Philippines.

"b. The Honorable Court below committed grave abuse

of discretion by deciding the case contrary to the doctrine laid
down by the Honorable Supreme Court in the case ofNecesilo,
et al. ns. Paras, et al."
We find the petition impressed with merit.

The respondents filed their answer, alleging inter alia

that the accident that caused losses to the petitioner was beyond
the control of the respondents taking into account that the tire
that exploded was newly bought and was only slightly used at
the time it blewout.

After trial,.Iudge Romulo R. Senining the City Court of

Cebu rendered judgment in favor of the petitioner and against
the respondents. 'l'he dispositive portion of the decision reads:
"WHEREFORE, judgment is hereby rendered in
favor of the plaintiff and .rgainst the defendant.s and thc
latter are hereby ordered, jointly and severally, to pay
the plaintiff thc sum of P750.(X) as rcimhurscrncnt li)r l.ho
lost Omega wrist watch, thc sunr ol l'246.64 ;rs unrculizcrl
salary of thc plrintilT liorrr his cnrploycr, Ih('litrl.h('r sum
ofPl00.(X) li)r llrr'(lrr'l.or's li'r's irrrrl rrr(.(Ii{ ir){,.:rr) rrrItIiLiorrrrI
sum ol I)ill){).1)O I('r rll"r'Dr.v's litx rrrrrl llrr.rrrsls '

The City Court and the Court of First Instance of Cebu

found that the right rear tire ofthe passenger jeepney in which
the petitioner was ridingblewout causingthe vehicle to fall on its
side. The petitioner questions the conclusion of the respondent
court drawn from this finding of fact.
The Court of First Instance ofCebu erred when it absolved
the carrier from any liability upon a findingthat the tire blowout
is a fortuitous event. The Court of First Instance of Cebu ruled

that:

"After reviewing the records of the case, this Court

finds that the accident in question was due to a fortuitous
event. A tirc blowout, such as what happened in the case
al bar, is an inevitahlc Accidont that exempts the carrier
from liability, tht'rc ht'ing Irbscncc ofa showing that there
was mis()ndu(l ot tt|gligcncr'on l.ho pllrt ofthe opcrator
in thc opcrrrliorr rrrrrl trlrttrll( rlltttcl ol lhc vchick'involvcd

AIt.

1174

OBI,IGATIONS

NA'I'IIRE AND EFFECT OI.' 0III,I(;AlIONS

tut.

The fact that tho right rear tire exploded, despite being
brand new, constitutes a clear casc of c:ctso fortuito wltich
can be a proper b2isis fbr cxonerating the defendants from
liability. x x x"

While it may be true that the tire that blewout was still
good because the grooves of the tire were still visible, this fact
alone does not make the explosion of the tire a fortuitous event.
No evidence was presented to show that the accident was due to

The Court of [.'irsl Instance relied on the ruling of the

Court of Appeals in Rodrtguez us. Red Line Trdnsportation
Co., CA G.R. No. 8136, Decernber 29, 1951. where the Court of

adverse road conditions or l,hat precautions were taken by the

jeepney driver to compensate fbr any conditions liable to cause
accidents. The sudden blowing out, lherefbre, could have been
caused by too much air pressure injected into tbe tire coupled
by the fact that the jecpney was overloaded and speeding at the
time ofthe accident.

Appeals ruled that:

"A tirc blowout does not constitute negligence unless
thc tire was already old and should not h:rve been used at
all. Indeed, this would be a clear case offortuitous event.,'

The foregoing conclusions of the Court of First Instance

of Cebu are based on a rnisapprehension of overall facts frorn

which a conclusion should be drawn. The reliance of the Court

of First Instance on lhe Rodri.guez case is not in order. In Zo
Mallorca arul Pampanga Rus Co. l..s. De Jestts, e/.r1. (1? SCRA
23). we held that:

"Petitioner maintains that a tire blowout, is a

fortuitous event and givcs rise to no liability for negligence,
citing the rulings ofthe Court ofAppeals in Rodriquez as.
Red Line Transpt,rtotion ('o.. CA.G.R. No.8136, Dccembr

29, 1951, and People us. Palapad, CAG.R. No. 18180,

June 27, 1958. These rulings, bowever, not only are not
binding on this Court but were based on considerations

quite different from those obtained in the case at bar. The

appellate court there made no findings of any specific acts
of negligence on the part of the defendants and confined
itself to the question of whether or not a tire blowout by
itself alone and without a showing as to the causative
factors would generate liability. x x x"

In the case at bar, there arc specific acts of negligence on

the part ofl he respondonts. The re(ords show thal the passcnger

jeepney turned turtle and r'umped into a ditch immediately

after its right rear tire exploded. The evidence shows that the
passenger jeepncy was running at a very fast spced bcfore thc
accident. We agree with the observation of thc pctitioncr that zr
public utility jeep running at a regul:rr and safc spced will not
jump into a ditch when its right rcar tirt blows up. 'l'hcrt, is ulso
evidence to show that thc p:rsslngcr _jrtpncy wirs ovcrloirrft,d
at the time of thc arrr.idcnl. 'l'lrr' 1x'liliorrcr sl:rt({l t.hll llt(,r(,
were three (3) pitss('ng( rs in llrl' li.rr l s(,irl iln(l li)llrlr,(,ll tl4)
Passeng('rs irr

lrI

rr'rrr-

R.l

I^

Lasom us. Srnith (45 Phil. 657), we laid down the

cQso fbrtuito:

fbllowing essential characteristics of

xxx

xxx

t x x'In

a legal sense and, consequently, also in

a ca!;o fi)rtuito ptesents the following
to
contracls,
relation
essential charactcristics: (ll The cause of the unforeseen
and unexpected occurrence, or of the failure of ihe debtor
to comply with his obligation, must be independent ofthe
human will; (2) Il must be impossible to foresee the event
which constitutes the caso fortui.to, or if it can be foreseen,
it must be impossible to avoid; (3) The occurrence must be
such as to render it irnpossible for the debtor i,o fulfill his
obligation in a normal manner; and (4) The obligor (debtor)
must be free from any participation in the aggravation
of the injury resulting to the crcditor.' (5 Encyclopeclia

J uritlic o E s panola, 309.)"

In the

case

at bar, the

cause of the unforeseen and

unexpected occuuence was not independent of the human will.

'l'he accident was caused either through the negligence of the

driver or because of mechanical defects in the tire. Common
cirrriers should teach their drivers not to ovcrload their vehicles,
not to exceed safe and legal speed limits, and to know the
correct measures to take when a tire blows out thus insuring
Llx.snfcty ofpassengers at all times. Relative to thc contingency
rrl rncchanical defects. we held in Necesito, et al. us. Pdras, et al.
( 102 I'hil. 75). that:
"x x x The preponderance of authority is in favor of
doctrine th:rt rt passengcr is entitled to recover damages
Irrrnr :r cirrrir.r lirr itrr irrjurY rcsulting from a defect in an

t.hc

rrpplirrntr' lrrrrr'lrrrslri lionr rr nranufacturer, whenever it

rrl)lx'rrr$ lhrl llrcrlr'litl u,'rrlrl h;rvc hrtn discovcred bythe
crrrrill il rl hrrl t rlllrrrlrl (lrc ri';1rrt ol can'which undcr
IIrl r.ilr.rrrrrrrIrrrrr'r'rr wrlr rrrr'rrrrrlr'rrI rtlx)n il., wilh rr'tiltrd t.o

1r7 4

Arl.1174

OBI,IGATIONS

NATURE AND EFFECT OI.' ()I]I,I(;ATIONS

The lacl that th', righl rear lire r.xploded, desDtte beins
brand new. conslitutcs a clear casc ,,f,rtso Sortiit,, whicfi

can be a proper basis lbr exonerating thc defendants from

liability. x x x"

The Court of Firsl Instance relied on the ruling of the

Court of^Apneals in Rodriguez tts. Red Line Transpirtation

Co., CA.G.R. No. 8136, Detember 29, 1954, where the Court of
Appeals ruled that:
"A tire blowout does not constitute negligence unless
thc tire was already old and should not h:rve leen used at

all. Indeed, this would be a cle:rr

case

offortuitous event.,,

The foregoing conclusions of the Court of First Instance

of Cebu are based on a misapprehension of overall facts frore
which a conclusion should be drawn. The reliance of the Court
of First lnstance on the Rodriguez case is not in order. In Za
Mallorca arul Pampanga Rus Co. L,s. De Jesus, el c1. Oi SCRA
23), we held that:

"Petitioner maintains that

a tire blowout is

Iortuitous evenl and gives rise to no liability for negligence,

citing the rulings ofthe Court ofAppeals in nod.igiez ts'.
Red. Line Transportation Co., CA-G.R. No. 8156. iecemhr
2.9. 1954. and Peoplc us. polapod, CA-C.R. No. 18480,
.!u. n:.27, 1958. These rulings, however,
not orrly u"" .rot
binding on this Court but were based on consiierations
quite different from those obtained in the case at bar. The
appellate court there made no 6ndings of any specific acts
of negligence on the part of the defendants ani confined
itself to the question of whether or not a tire blowout bv
itself alone and without a showing as lo the causativl
factors would generate liability. x x x.

- In the case at bar, there are specific acts of negligence on

the part ofthe respondents. The records show that the passenge.
je^epney turned turtle and jumped into
a ditch immediat-ely

after its right rear tire exploded. The evidence o*" tt ut lnl
passengerjeepncy was running at a very fast spced
"t befirre the
accident. We agree with the observation of the pirtitioncr that a
public utility jeep running at a regul:rr and *aii, spcud will
noi
jump into a ditch when its right rerr tire blows up.
Thcrc is irlso
erridence lo show that lhr, pirsslnglr
.jrr.pncv w:rs rrvlrhr:rdr.d
at the time of thc accidcnt. 'l'hr, gx.t.it.ioricr slrrtorl thrrt tlrt.re
were three {3) p:rsscDg|rs irr ilrr. lrrrrrl slitt ltn(l li)ltrL\,D {14)
passengcrs ilt I lr0 rr.rrr-

Art. 1174

While it may be true lhat the tire that blewout was still
good because the grooves of the tire were still visible, this fact
alone does not make the explosion of the tire a fortuitous event.
No evidence was presented to show thal the accident was due to
adverse road conditions or that precautions were taken by the
jeepney driver to compensate lor any conditions liable to cause
accidents. The sudden blowing out, therefore, could have been
caused by too much air pressure injected into the tire coupled
by the fact lhat the jeepney was overloaded and speeding at the
time of the accident.

ln Lasam

us.

Snith (45 Phil. 6ii7). we laid down

the

following essential characterislics of coso lbrtuito:

xxx

xxx

xxx

x x x 'In a legal sense and, consequently, also in

relation to contracts, acaso fottuito presents the following
essential characteristics: ( 1) The cause of the unforeseen
and unexpected occurrence, or of the failure of the debtor
to comply with his obligation, must bc independent of the
human will; (2) It must be impossiblc to foresee the event
which constitutes the <oso fortuilo, or ifit can be foreseen,
it must be impossible to avoid; (3) The occurrence must be
such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and (4 ) Tbe obligor (debtor)
must be free from any participation in the aggravaiion
of the injury resulting to the creditor.' (5 Encyclopedia

Jurid.ica

E s pa fi.ola, 3O9.)"

In the case at bar, the

cause

of the unforeseen and

ofthe human will.

'l'he accident was caused either through the negligence of the
driver or because of mechanical defects in the tire. Common
('arriers should teach their drivers not to overload their vehicles,
not to exceed safe and legal speed limits, and to know the
c(,rrect measures to take when a tire blows out thus insuring
I lrr. safety ofpassengers at all times. Relative to thc contingency
ol tnrthanical defects, we held in Necesik\ et al. us. Paras, et al.
I l02 Phil. 7l-)). th.rt:
rrnexpected occurrence was not independent

"x x x The preponderance ol authorily is in favor of

th(] doctrine th:lt a l)asscngcr is entitled to recoverdamages

lionr :r carrir.r lirr rrn injury resulting from a defect in an

rrpplirrncc prrrr'hrr*ri Ironr rr nranufacturer, whenever it
rrppcrrrs thrrl. llrl rL'li,r'l worrlrl hrrvo hcon discovcred by the
crrrrir,r il rl hnrl ,.xlrcr'r,.rl Ilrr.rL,grco ol carr.which under
llr, cirrrrtrxlnrx r,r. wnl t r r I r I rrlxrn il., wit.h roglrrl to
r

r' r

8.1

Xfr

rr

Art. 11?4

NA'I'I]RE AND NFFECT O!' OItI,I( iATIONS

OBLIGATIONS

xxx"

It is sufficient to reiterate that the source of a common

carrier's legal liability is the contract ofcarriage, and by entering
into the said contract, it binds itself to carry the passengers

safely as far as human care and foresight can provide, using the
utmost diligence ofa very cautious person, with a due regard for
all the circumstances. The records show that this obligation was
not met by the respondents.
The respondents likewise argue that the petitioner cannot
recover any amount for failure to prove such damages during

the trial. The respondents submit that if the petitioner was

really injured, why was he treated in Danao City and not in
Mandaue City where the accident took place. The respondents
argue that the doctor who issued the medical certificate was not
presented during the trial, and hence not cross-examined. The
respondents also claim that the petitioner was not wearing any
wrist watch during the accident.

It should

be noted that the City Court of Cebu found lhat

the petitioner had a lacerated wound on his right palm aside

from injuries on his left arm, right thigh and on his back and
that on his way back to l);rnao (jil.y, hr discovercd thst his
"Omega" wrist watch wirs l(,i{i. 'l'lrr.sc rrrc lindings rrl lircts ol thc

City Court ol (jcltrr whiclr wc lirrrl rro

so whcn wr.corrsrrlr.r

llrl' lrl.l llrll

t{i

rlislrrrh Molc
lhr'(:olrrl. r)l l"irsl Irslrrnc(.
r'{yrs(}n l.o

. I174

of Cebu impliedly concurred in these matters I'hen it confined

itself to the question of whether or not lhe tire blowout was a

inspection and application of the necessary tests. For the

purposes of this doctrine, the manufacturer is considered
as being in law the agent or servant ofthe carrier, as far as
regards the work of constructing the appliance. According
to this theory, the good repute of the manufacturer will
not relieve the carrier from liability.'(10 Am. Jur. 205, s.
1324; see also Pennsylvania R. Co. vs. Roy, 102 U.S. 451;
20 L. Ed. 141; Southern R. Co- vs. Hussey, 74 AI-R 1172,
42 Fed. 2d 70; and Ed. Note, 29 ALR 788; Ann. Cas. 1916E
929\
The rationale of the carrier's liability is the fact that the
passenger has neither choice nor control over the carrier in the
selection and use ofthe equipment and appliances in use by the
carrier. Having no privity whatever with the manufacturer or
vendor of the defective equipment, the passenger has no remedy against him, while the carrier usually has. It is but logical,
therefore, that the carrier, while not an insurer of the safety of
his passengers, should nevertheless be held to answer for the
flaws of his equipment if such flaws were at all discoverable.

fortuitous event.
WHEREFORE, the decision of the Courl ofFirst Instance
of Cebu, Branch IV appealed fiom is hereby REVERSED and
SET ASIDE, and the decision of the City Court of Cebu, Branch

I is RIIINSTATED. with the modilication that the damages

shall earn interest at 127., per annum and the attorney's fees
are increased to SIX HUNDRED PESOS (P600 00). Damages
shall earn interest from January 27, 1975.
SO ORDERED-

Further, in the case of Southeastern College, Inc. us. Court of

Appeals (J:uly 10, 1998, 292 SCRA 422), t]ne Supreme Court ruled

lh.rt in order that a fortuitous event may exempt a person from

liability, it is necessary that he be free from any previous negligence
,rr misconduct by reason of which the loss may have been occasioned.

An act of God cannot be invoked ftrr the protection of a person who

lras been guilty of gross negligence in not trying to forestall its
lx)ssible adverse consequences. When a person's negligence concurs
with an act of God in producing damage or injury to another, such
1x'rson is not exempt fiom liability by showing that the immediate
,rr proximate cause ofthe damage or injury was a fortuitous event.
When the effect is found to be partly the result ofthe participation of
nrirn whether it be from active intervention, or neglect, or failure
lr) act the whole occunence is hereby humanized, and removed
li om the rules applicable to acts of God.
Moreover, in the aforementioned case of Southeastern College,
Court ofAppeols, the Supreme Court also ruled that there is
rro tyuestion that a typhoon or storm is a fortuitous event, a natural
,xl lrrrence which may be foreseen but is unavoidable despite any
;rrrrount of foresight, diligence or care. In order to be exempt from
lrrrlrility arising from any adverse consequence engendered thereby,

tttt.

us.

llrcrc should have been no human participation amounting to a

rrr.gligcnt act. In other words, the person seeking exoneration from
lrrrbility must not be grriltv of ncgligence. Negligence, as commonly
rrrrrl,rst.rxxl, is condtttt. wltich nrrltrrrrlly or reasonably creates undue
r rsk or lrirrrrr t,o otlrcrs ll rrr:rf- lx' l.lrc firilurt: to obscrve that de63ee

,,l cirrr., lrrrtir

,lcrrr;rrrd, r,r'

tt

t, ttnrl vtlltlttttcc rvlticlr Ilrtl circumst,ltnctls.justly

(,rrrsNrlrt l. rl. rrorrtlllritrg whith ir Irttrlt'nt ltltd

ti<tt

1.h1'

r/

Ar1. 1174

NATTIRE AND EFI'ECT OF OBLICIATIONS

OBI,IGATTONS

reasonable man, guided by considerations which ordinarily regulate

the conduct of human affairs, would do.

It

must be observed, however, that the general rule stated

1174 can be applied only to determinate obligations and
not to generic ones.L'5 Consequently, where the obligation consists
in the payment of money,,,6 or in the delivery of any generic or
indeterminate thing, such as several cavans of rice,r? or several
piculs of sugar,,u or several tons of copra,,'s the fact that the obligor
was unable to comply with his obligation by reason of a fortuitous
event will not constitute a valid defense; he can still be held liable.

in Art.

Strpreme Court declared:

"An act of God cannot be urged for the protection of a

person who has been guilty of gross negligence in not trying
to avert its result. One who has accepted responsibility to pay
cannot weakly fold his hand and say he was prevented from
meeting that responsibility by an act of God when the exercise
or ordinary care and prudence would have averted the results
flowing from the act. One who has placed the property ofanother,
entrusted to his care, in an unseawotthy craft, upon dangerous
waters, cannot absolve himself by crying 'an act of God' when
every effect which a typhoon produced upon that property could
have been avoided by the exercise of common care and prudence.
When the negligence of the carrier concurs with an act of God
in producing a loss, the carrier is not exempted from liability by
showing that the immediate cause of the damage was the act
of God; or, as it has been expressed, 'when the loss is caused by
the act ofGod, ifthe negligence of the carrier mingles with it as
an active and cooperative cause, he is still liable.'The loss and
damage to perishable articles in consequence ofthe weather will
not excuse the carrier if it could have been prevented by due
care and diligence. The carrier must not only show that it did all
thzrt was usual, but all that was necessary to be done under the
circunrstances. To be exempt from liability for loss because ofan
act ol God. the common carrier must be free from any previous
ncgligence or misconduct by which the loss or damage may have
lxtn occasioned. For, although the immediate or proximate
cirtrst' of a loss in any given instance may have been what is
tt'rrncd an act of God, yet if thc carrier unnecessarily exposed
l.h(' propcrty to such accirlorrt bv a culpable act or omission ofhis
own hc is nrrl. r'xcuserl. Irr thc crrsc ol Wdl rts. Ameriutn Express

Hence, if the negligence of the obligor or debtor concurred

with the fortuitous event in bringing about the injury complained
of, the obligation is not extinguished. In other words, if the loss or
destruction of the object of the obligation was caused by an act of

Irhilir)pino lnr)g I)istrnco (l(,. vr. Jol.L'n.,',,

97 Phit. 781.

"rsoriano vs. De L{:on, 18 Otl: (;r', 224,.'

'tYuTekCo. vs. (ionzllIrN,2l) I'hrl :ltt,li Inr(so vF l)inz,4/Ott.(;lu j:j?
"'gBunje ftrr'p. vr l,il'.r'r' ( i' r'.|1,'rt' & ( i', t8 ()ll (;,'z :t:t/'/

t'ztJ5l')ntteloyitt,lurtlt,rl,)1rtn,,l,t llt)l)ot,rl rrl,'x,'r'r vr:jrlth

.ti,

l'tlt lIXt

117 4

God, with the negligence of the obligor or debtor mingling with it

as an active and cooperative cause, such obligor or debtor is still
responsible. In order to relieve such obligor or debtor of any liability,
the act of God or fortuitous event must not only be the proximate
cause of the loss or destruction, but the better opinion is that it
must be the sole cause. This doctrine, which is well established in
American law, was enunciated by the Supreme Court in the cases of
'!'an Chiong Siqn us. Incheusti & Co.121 and. Limpangco t)s. Ydngco
Steamship Co.r22 and the latest of which is in NakpiL & Sons, et al.
ls. CA, et ol., (144 SCRA 596). Thus, in the Tan Chiong case, the

Idem; Essential conditions.

- There are several essential
conditions which must concur in order that the general rule stated
in Art. 1174 can be applied. These conditions are: ;trsl, that the event
must be independent ofthe will ofthe obligor; second, that the event
must be either unforeseeable or inevitable; lhird, that the event must
be of such a character as to render it impossible for the obligor to
fulfill his obligation in a normal m anner; and fourth, that the obligor
must be free from any participation in the aggravation ofthe injury
resulting to the obligee or creditor.12o In other words, there must
be an entire exclusion ofhuman agency from the cause ofinjury or
loss (Virginia Real us. Sisenando H- BeIo, G.R. No.146224, Jan. 26,
2007). In the Virginia Real us. Sisenando case, the Court held that
it is established by evidence that the fire originated from leaking
fumes from the LPG stove and tank installed at petitioner's fastfood
stall and her employees failed to prevent the fire from spreading
and destroying the other fastfood stalls. Such circumstances do not
support the petitioner's theory of fortuitous event.

"5See supra.
116Reyes vs.
Caltex,47 OfI. Caz. I l1):];

Art.

'

lrhrl ll',:l
t.t |,h rt r,rt,i

'i;l ll

,,

Art.

1174

NATLTRE AND EFFECT

OBLIGATlONS

Co., 13 Mo., 121, Wagner, J., said: "lhe act of God which excuses
the carrier must not only be the proximate cause ofthe loss; the
better opinion is that it must be thc sole cause. And where the
carrier mingles with it as an activc and cooperative cause, he is
still responsible.' (Ames vs. Stevens, 1 Stra., 128.)"

ArL.1l74

is secured in the criminal action would prejudice the latter case,

or would result in inconsistency should the accused obtain an
acquittal or should the criminal case be dismissed lt must be
realized that a court finding that a robbery has happened would
not necessarily mean that those accused in the criminal action
would be found guilty ofthe crime; nor would a ruling that those

actually accused did not commit the robbery be inconsistent

with a finding that a robbery did take place. The evidence to

Auatria vs. Court of Appeals

39 SCRA 527

establish these facts would not necessarily be the sam.

Defendant received from plaintiff a pendant with diamonds lo be sold on commission basis or to be returned on demand. In the evening of Feb. 1, 1961, while walking homtl, two
men snatched her purse containing the pendant. Subsequently,
the snatchers were apprehended and charged. During the pendency of the criminal case, plaintiff brought an action against
defendant for recovery of the pendant or of its value and damages. The latter interposed the defcnse of fortuitous cvent, but
the former contended: (a) that the defense is untenable because
there was negligence on the part of the defendant; and (b) that
if the defense is tenable, nevertheless, there must bc a prior
conviction for robbery before it can be availed ol

Ileldr Defendant is not liable. To constitute

OI'OBLIGATIONS

a caso

&rtairo

that would exempt a person from responsibility, it is necessary

(1) that the event must be independent ofthe will ofthe debtor;

(2) that it must be either unforeseeable or unavoidable; (3) that

the occurrence must render it impossible fbr the dcbtor to fullill
the obligation in a normal manner; and (4) that the debtor must
be free of participation in, or aggravation of, the injury to the
creditor.

AII of the abovc requisites or conditions are present in

this case. It. is undeniable that in order to completcly exonerate
the debtor by reason of a fortuitous event, such debtor must,
in addition to the c@s&s itsell be free of any concurrent or
contributory fault or negligence. We believe, howcvcr, that
her act in traveling alone in the evening, carrying jewelry of
considerable value, cannot be considered as cither concurrent or
contributory negligence. While it may lrc so considcrcd now, wc
are not persuaded that the samc rule shoulcl obtain tcn yoars
previously when the robbery in quosl.ion l.ix)k plau'. lirr irt tlrrrt
time criminality had not by firl lr.rrr:lrrrl thc lcvcls :rllrrirrcd in
the present day.

'lherc is Iikr.wisr. lo rr( ll rr IIrr'(.(,III{ IIIir)Ir llrrrt to rrllow

tht: fircl ol roblx'ry lo lrr. r'rtol,rrrzlrl rrr llrrs lrrsl lr'lirr.r' r.r'rrvir'tirrrr

Vasquez vs. Court of APPeals

r38 SCR"A 553

Plaintiffs Pedro Vasquez and Soledad Ortega are the

parents of Alfonso Vasquez; plaintiffs Cleto Bagaipo and
Agustina Virtudes are the parents of Filipinas Bagaipo; and
plaintiffs Romeo Vasquez and Maximina Cainay are the parents
of the child, Mario Marlon Vasquez. They seek the recovery of
damages due to the loss ofAlfonso Vasquez, Filipinas Bagaipo
and Mario Marlon Vasquez during said voyage.

At the pre-trial, the defendant admitted its contract of

carriage with Alfonso Vasquez, Filipinas Bagaipo and Mario
Marlon Vasquez, and the fact of the sinking of the MV 'Pioneer
Cebu.'The issues ofthe case were limited to the defenses alleged
by the defendant that the sinking of the vessel was caused
by force majeure, and that the defendant's liability had been
extinguished by the total loss ofthe vessel.

The evidence on record as to the circumstances ofthe last

voyage ofthe MV'Pioneer Cebu'came mainly, ifnot exclusively,

fiom the defendant. The MV'Pioneer Cebu' was owned and

operated by the defendant and used in the transportation of
goods and passengers in the inter-island shipping. Scheduled to
leave the Port of Manila at 9:00 p.m. on May 14, 1966, it actually

left port at 5:00 a.m. the following day, May 15, 1966 It had

passenger capacity of three hundred twenty-two (322) including

the crew. It undertook the said voyage on a special permit issued
by the Collector ofCustoms inasmuch as, upon inspection, it was
found to be without an emergency electrical power system. The
speci?rl permit authorized the vessel to carry only two hundred

sixl.y (260) passengers due to the said deficiency and for lack
rrl sali'ty dcvices lirr li22 pirsst'ngers (Exh. 2)- A headcount was
rn&dc ol thc prrssengcrr on b,rttrrl, rrrsttlting on the tallying of 168
lrlull.s rrtrd 20 nrinrlrs, rrll.lrorrglr llrc l)ilssengers maniftrst on)y
li'rl{'rl l(Xi lxrss( ngIrs ll lrrrr lx'r'rr rr(lrrrill(\1. howcvcr, l.hrrl l.hr'
1r I

Art. 1 174

OBLI(iATTONS

headcounl is not reliable inasmuch as

man on borlrd the vessel

NATI

it

IRFJ

AND EFFECT OI.' oBLIGATIONS

Art.

174

On appeal, respondent Court reversed the aforementioned

was only done by one

judgmeni and absolved private respondent tiom .rny and all

liability.

When thc vessel left Manila, its officers were already

aware of the typhoon lCoring building up somewhere in
Mindanao. Thcre being no typhoon signals on the route from
Manila to Cebu, nnd the vessel having been clcared by the
Customs authorities, the MV'Pioneer Ccbu'left on its voyage
lo Cebu despite the typhoon. When it reached Romblon island.
it was decided not to seek shclter thereat, inasmuch as the
weather condition was still good. After passing Romblon and
while near Jintotolo island, the barometer still indicated the
existence ofgood weather condition and this continued until the
vessel approached Tanguingui island. Upon passing the latter
island, however, the weather suddenly changed and heavy
rains fell. Fearing that due to zero visibility, the vessel might
hit the Chocolate island group, the captain ordered a reversal
of the course so that the vessel could 'weather out' the typhoon
by facing the winds and the waves in the open. Unfortunately,
at about noontime on May 16, 1966, ihe vessel struck a reef

Hence. this Petition for Review on Certiorori, the basic

issue being the liability fbr damages of privatc respondent for
the presumptive death of petitioners' children.

The Trial Court found the defense of can lbrtuito

untenable due to various decisive factors, thus:

"x x x It is an admitted fact that even before tbe

vessel left on its last voyage, its olficers and crew were
already aware of the typhoon brewing somewhere in the
same general direction to which the vessel was going. The
crew ofthe vessel took a calculated risk when il proceeded
despite the typhoon advisory. This is quite evident from
the fact that the officers of the vessel had to conduct
conferences amongst themsclves to decide whether or not
to proceed.'lhe crew assumed a greater risk when, instead
ofseeking shelter in Romblon and other islands the vessel
passed enroute, they decided to take a chance on the
expected continuation of the good weather the vessel wers
encountering, and the possibility that the typhoon would
veer to some other dircctions. The eagerness of the crew
of the vessel to proceed on its voyage and to arrive at its

near Malapascua Island, sustained leaks and eventually sunk,

bringing with her Captain F)or Yap who was in command ofthe
vessel."

Due to the loss of their children, petitioners sued for

ofFirst Instance of Manila (Civil Case

No. 6?139). Respondent defendcd on the plea of force majeure,
and the extinction ofits liability by the actual total loss ofthe
damages before the Court

destination is readily understandable. It is undeniably

lamentable, however, that they did so at the risk of the
lives ofthe passengers on board."

AJter proper proceedings the Trial Court awarded

Contrariwise, respondent Appellate Court believed that

the calamity was caused solely and proximately by fortuitous
event which not even extraordinary diligence of the highest
degree could have guarded against; and that there was no
negligence on the parl ofthe common carrier in the discharge of

damages, thus:
WHERFJFORE, judgment is hereby rendered ordering the defendant to pay:

(a) Plaintiffs Pedro Vasquez and Soledad Ortega

the sums of P15,000.00 for the loss of earning capacity of
the deceased Alfonso Vasquez; P2,100.00 for support; and

its duties.
lJpon thc evidence and the applicable law, we sustain the
'l'rial (lourt. "To constitute a caso fortuilo that would exempt
ir person frorn responsibility, jt is nocessary th.rt: (1) lhe event
must bc indcpcndcnl ol the hum:rn willl (2) the occurrence
nrrrst rcnrlcr it. irnpossible lbr the dcbtor to lirlfill the obligation
in rr norrnal nr:rnncr; itntl l.hlrl. (j]) thc obligor must be fiee of
1rirll.i< i1rrrI iorr irr, or rrggr:rvrrt.iotr ol. l.hc ilrjulv to thc crcditor."r23

P10,000.00 for moral damages;

(b) Plainliffs Cleto B. Bagaipo and Agustina

Virtudes the sum ofP17,000.00 for loss ofearning capacity
of deceased Filipinas Bagaipo; and t,10,000.00 for moral
damages; and

(c)

Plairrl.illi. ltorrrco VrrsrJrrcz irrrrl Mirxirrrinl

Cainay thc sllln ol l)lll,{XXl lXl lrv wiry ol rrrorrrl riirrrrrrgr.s

hy rcitson ol lhr. rlr.rrlh ol Mrrtrrr Mrrr'Lrrr Vtrsrlrrr,z.

lt')

li',rtl'r !,, S!rllr. l5 l'l,rl riJ't. li{;l ll)lllr, Ausltlr' !s (i'rrrt ,)l Al)tnrls,;lS)

r;r

'lt^ a,l/ { ll)'/ lr

t)il

Art.

Art. 1174

OBLIGATIONS

NATI]RE AND EFFECT OF OBLIGATIONS

In the language ofthe law, the event must have been impossible
to foresee, or if it could be foreseen, must have been impossible
to avoid.r2a There must be an entire exclusion ofhuman agency
from the cause of injury or loss.r25

were taking as they hopped from island to island from Romblon

up to Tanguingui. They held frequent conferences, and oblivious
of the utmost diligence required of very cautious persons,r3r
they decided to take a calculated risk. In so doing, they failed to
observe that extraordinary diligence required ofthem e*plicitly
by law for the safety ofthe passengers transported by them with
due regard for all circumstancesl32 and unnecessarily exposed
the vessel and passengers to the tragic mishap. They failed to
overcome that presumption of fault or negligence that arises in
case of death or injuries to passengers-I33

:11?4

Turning to this case, before they sailed from the port of

Manila, the officers and crew were aware of typhoon "Klaring"
that was reported building up at 260 kms. east of Surigao. In
fact, they had lashed all the cargo in the hold before sailing in
anticipation ofstrongwinds and rough waters.126 They proceeded

on their way, as did other vessels that day. Upon reaching

Romblon, they received the weather report that the typhoon
was 154 kms. east southeast of Tacloban and was moving west

northwest.l27 Since they were still not within the radius of

the typhoon and the weather was clear, they deliberated and
decided to proceed with the course. At Jintotolo Island, the
typhoon was already reported to be reaching the mainland of
Samar.r23 They still decided to proceed noting that the weather
was still "good" although, according to the Chief Forecaster of
the Weather Bureau, they were already within the typhoon
zone.l2e At Tanguingui Island, about 2:00 A.M. of May 16, 1966,
the typhoon was in an area quite close to Catbalogan, placing
Tanguingui also within the typhoon zone. Despite knowledge of
that fact, they again decided to proceed relying on the forecast
that the typhoon would weaken upon crossing the mainland
of Samar.r3o After about half an hour of navigation towards
Chocolate Island, there was a sudden fall of the barometer

While the Board of Marine Inquiry, which investigated

the disaster, exonerated the captain from any negligence, it was

because it had considered the question of negligence as "moot
and academic," the captain having "lived up to ihe true tradition
of the profession." While we are bound by the Board's factual
findings, we disagree with its conclusion since it obviously had

not taken into account the legal responsibility of a common

carrier towards the safety ofthe passengers involved.

With respect to private respondent's submission that the

total loss of the vessel extinguished its liability pursuant to
Article 587 of the Code of Commercel34 as construed in Yangco
us. Lasetncl, 73 Phil. 330 ( 1941), suffice it to state that even in
the cited case, it was held that the liability of a shipowner is
limited to the value of the vessel or to the insurance thereon.
Despite the total loss of the vessel therefore, its insurance
answers for the damages that a shipowner or agent may be held
liable for by reason ofthe death of its passengers
WHEREFORE, the appealed judgment is hereby
RE\aERSllD and the iudgment of the then Court of First

accompanied by heavy downpour, big waves, and zero visibility.

The Captain ofthe vessel decided to reverse course and face the
waves in the open sea but because the visibility did not improve
they were in total darkness and, as a consequence, the vessel
ran aground a reefand sank on May 16, 1966 around 12:45 P.M.
near Malapascua island somewhere north ofthe island ofCebu.

Instance of Manila, BranchV, in Civil Case No.67139, is hereby

reinstated. No costs.
SO ORDERED.

Under the circumstances, while, indeed, the typhoon was

an inevitable occurrence, yet, having been kcpt posted on the
course of the typhoon bv weather bulletins at intervals of six
hours, the captain and crew werc well aware of the risk they
r?aArt. 1174, Civil Code; Lasan
vs. Smith,45 l,hil. {;5? (lt}24).
r'?5Tolentino, Commentaries on
thc ('ivil t'rxir', Vol V, p 2,.r2
''?dT.s.n, August 8, 196'7. p.22.
r2?Domestic tsulletin No l(i,,1 l.lrc Wcrrllrll
llrlcrrrr.
r'?3Domestic Rrrll'lin, No li

''eT.s.n., Dcccrrlr.r 15, llX;/. t, :ll

lri"lhnrsl il llrll, l r" N,, lri

"'Arts.

t"Art.

17r-'(;.

Civil Code.

Ilil

'l'h| shiP:rgcrrt shrrll nlsri lx civilL- liable for the indemnities in fa-

v,'r 0l lhixt yr|rsrrrs wlrich nll'y rtrisf Ii1)rrr I hr' (rrrdrr.t ol th(- captain in the vigilanoe

ov|r'llr. grrxh whith llrr,vcsgrl ,rrri'!|. I'rrl lr nrrrv cxcrnpt himself therefiom by
,rlrrrrrrlrnirs lh vr.*sr,l willr rrll lr.r rrlrrilrrrll'rrls,rrrrl lhI lr.ighl h. rnrrv hnvc carned
'lrrnllx

1r1

1755. 1756,

tt'ArL. 17:lil,Ihil.

lln. vi'vrrH'

'

llr

Art.

1174

AA. It74

OBLICATIONS

NATI]RE AND EFFECT OF OBI,IGATIONS

Idem; Exceptions. - There are, however, exceptions to the

rule that the obligor or debtor cannot be held liable in case of his
inability to comply with his obligation by reason of a fortuitous
event. They are: first, where such liability is expressly specified by
law1. second, where it is declared by stipulation of the parties; and
/hird, where the nature ofthe obligation requires the assumption of

offortuitous event. but the former contends: (a) that the defense
offortuitous event is untenable because there was negligence on
the part of the defendant; and (b) that if the defense is tenable,

risk.r35

The first exception may be illustrated by provisions ofthe Civil

Code, such as those found in Arts. 552, par. 2, 1165, par. 3, 1268,
7942, 7979, 2147 , 2L48, and 2159.

Assumption of risk, on the other hand, ordinarily requires

knowledge and appreciation of the risk and a voluntary choice
to encounter it. As applied to obligations, it refers to a situation
in which the obligor or debtor, with full knowledge of the risk
voluntadly enters into some relation with the obligee or creditor.
It is based on the doctrine of uolenti non ftt injuria no wrong
is done to one who consents.l36 Hence, if the obligor- enters into
an obligation which by its very nature involves the assumption
of risks, he shall be liable to the obligee for breach even in case of
fortuitous events. This is illustrated by obligations arising from
insurance contracts and workmen's compensation acts. To a certain
extent, it is also illustrated by obligations ofcomrnon carriers. t The
liability of a common carrier which is for public service, however,
should be limited to those risks which are typical of the business;
it cannot extend to those which are not typical, such as lightning or
earthquake causing injury to a passenger.rir8
Problem - A received from X a pendant with diamonds
valued at P4,500 to be sold on commission basis or to be returned on demand. In the evening of Feb. 1, 1961, while walking
home to her residence, two men snatched her purse containing
the pendant and ran away. Subsequcntly, the snatchers were
apprehended and charged. During the pendencv ofthe criminal
case, X brought an action against A for recovery of thc pcndant.
or of its value and damages. The lattcr interposed the defense

r:i5Art. 1174- Civil Code

r36Prosser on Torts, pp. :l'7 7':17 I
t3?Art. 1733, et s..i,., (livil (ixl'.

r3s4Tolentinr),(livil (l,nl'. lllSt;

l.il. r' l:ttt

1Xi

nevertheless, there must be a prior conviction for robbery before

it can be availed of. Decide the case.

Answer The factual setting of the above problem is

identical to that ofA&slrio us. CA 39 SCRA 527. In that case,
the Supreme Court held that defendant is not liable.
To constitute a caso fortuito that would exempt a person
from responsibility, it is necessary: (1) that the event must
be independent of the will of the debtor; (2) that it must be
either unforeseeable or unavoidable; (3) that the occurrence
must render it impossible for the debtor to fulfill the obligation
in a normal manner; and (4) that the debtor must be free of
participation in, or aggravation ofthe injury to the creditor.

All of the above requisites or conditions are present in

this case. It is undeniable that in order to completely exonerate
the debtor by reason of a fortuitous event, such debtor must,
in addition to the casus itself, be free of any concurreni or
contributory fault or negligence. We believe, however, that
her act in travelling alone in the evening, carrying jewelry of
considerable value, cannot be considered as either concurrent or
contributory negligence. While it may be so considered now, we
are not persuaded thal the same rule should obtain ten years
previously when the robbery in question took place, for at that
time criminality had not by far reached the levels attained in
the present day.
There is likewise no merit in the contention that to allow
the fact of robbery to be recognized in this case before conviction
is secured in the criminal action, would prejudice the latter case,
or would result in inconsistency should the accused obtain an
acquittal or should the criminal case be dismissed. It must be
realized that a court finding that a robbery has happened would
not necessarily mean that those accused in the criminal action
would be found guilty ofthe crime; nor would a ruling that those
actually accused did not commit the robbery be inconsistent
with a finding that a robbery did take place. The evidence to
establish these facts would not necessarily be the same.

Probltm A bargo lx'longing to the Luzon Stevedoring

(lrrporrrtiorr, whikr passing und(.r the Nagtahan Bridge in
Mrrrrilrr, rrrnrnrr.rl thc lrrirlgr. srrplxrrl.s r:rrusing damagc thereto.
ln t.lris rrr'l ion lirr dnnrlllr.d irHl ll lrlr{l lry I.hr. ( lovcrnnrctrt rtgltinst
t.

Irr

rIr.I

rrrIrrrr

rr)r'lxrrrl

ior, I lrr.

It

lrr

lt

r.r inl.r'r;xrscrl

lrl

dcli'nsc

Art. 1174

OBLIGATIONS

NATIIRE AND EFFECT OI' OI]I,IC;ATIONS

that there was no negligence or fault on its part and that the
proximate cause of the accident was a fortuitous event. Decide

is a tire blowout, that will not make a difference in my answer

so long as it can be established that the bus involved in the
accident was running fast immediately before the accident and
that the cause of the blowout could have been discovered if the
bus had been subjected to a more rigid check-up before its use.
This was the doctrine enunciated in La Mallorca L's. De Jesus

Art. 1174

the case.

Ansuter

As far as the negligence of the defendant

it is clear that the doctrine ofres lpso
loquitur is applicable. It is undeniable that the unusual event
corporation is concerned,

that the barge, exclusively controlled by defendant, rammed the

bridge supports raises a presumption of negligence on the part
of defendant or its employees manning the barge or the tugs
that towed it. In the ordinary course ofevents, such a thing does
not happen ifproper care is used.
As far as the defense offortuitous event is concerned, coso
fitrtuito by definition refers to those extraordinary events not
foreseeable or avoidable, "events that could not be foreseen.
or which though foreseen, were inevitable." (Art. 1174, NCC.)
It is, therefore, not enough that the event could not have been
foreseen or anticipated, as is commonly believed, but it must
be one impossible to foresee or to avoid, The mere di{ficulty to
foresee the happening is not impossible to foresee the same.
Hence, the proximat cause of the accident cannot be classified
as a fortuitous event. Consequently, defendant is liable. (,Bep. o/
the Phil. os. Luzon Steuedoring Corp., 21 SCRA 279.)

Problem - A was injured while he was a passenger in

a bus operated by X Co. The proximate cause of the accident
was the failure of the steering knuckle to work causing the
driver to lose control of the wheel as a result of which the bus
fell into a ditch. Oan the operator now relieve itself of liability
by claiming that the real cause of the accident was a fortuitous
event? Suppose that the proximate cause of the accident was a
tire blowoul, would that make a different in your answer?
Answer -'lhe operator cannot relieve itself ofliability by
claiming that the real cause of the accident was a fortuitous

event. The weight of authority sustains the view that a

passenger is entitled to recover damages from the can'ier for
an injury resulting from a defect in an equipment purchased
from a manufacturer, unless extraordinary diligence has
been exercised with regard to inspection and applicution
of the necessary tests. For the purpose of this doctiine, the
manufacturer is considered in law thc.rgcnt ol the carricr.'l'hc
rationale of the carrier's lilbility is thtrt t.hc pturlenger hts n(t

privity with thc manrrlircl,rrrcr rrrrri, l.hcrr.lirrr', hlrF rro rr'nlxiy

whatever against ltitrr. whik, llrr'crrrrir.r rrnrrrrlly lurr. lNr'rr'._r/o
us. Par(^, lO,1 I'htl. 7[t ) ll l.h(, l)r'r)xilurk' orrr*, ol l,lrr. rrr.r.rrk'rrl.

ltt

(17 SCRA 23).

(Noler The question of whether or not a defective part of
a vehicle, such as a defective brake, or a tire blowout can be
classified per .se as a fortuitous event was again taken up by
the SC in Tugade us. CA ,85 SCRA 226. In this case, a Holden
car was badly damaged when it was bumped from behind by a
Blue Car Taxi driven by petitioner. The latter admits that the
accident was caused by the faulty brakes of the taxicab but he
contends that the sudden malfunctioning of the brakes at that
particular moment before the accident was something which
even the due diligence of a good father of a family could not
have prevented. Consequently, the cause of the accident is a
fortuitous event. He then invokes a long line of dccisions of the
CA in order to support his theory.

Speaking through Justice inow deceased Chief Justicel

Fernando, the SC declared that the primary reason why the
petition was given due course was to clarify the state of the
law and thus hopefully avoid any further lurking doubt on the
matter.
Speaking of the decisions of lhe CA cited by petitioner in
support of his theory, the SC reminded the petitioner of what
Justice J.B.L. Reyes once said that "thc SC, by tradition and in
our systern ofjudicial administration, has thc last word on what
the law is; it is the final arbiter of any justiciable controversy.
There is only one SC from whose decisions all other courts
should take their bearings."
Speaking of the merits of the theoly of petitioner, the SC
finally held that the doctrine enunciated in La Mallorca t's. De
,lesus [17 SCRA 23], La$arn us. Smith 145 Phil. 6571, Son us.
Ne.esiro us. Paras [104
Cebu Autobus Co. 194 I'hil. 8921,

tire blowouts and others of

I'htl. 751 conftols. Defective brakes,^\d
a similar nature cannot bc classified as lbduitous events per se
within thc mcaning ol th(' lrw-

I'n tlcrtt

Whal

hy rr.rrrorr

rrt

Lh'

r'xc( l)tions

to thc rulc t.lrat the

lrllrllrl lirrlrL lirllrltrrchol tlrcrrlrligrttion

ol rr lrrllrril.orrr lvlrrl / lllrrrtr';rll

olrligrrrolrk'lrlorcrrrrrrot

{rt.1174

NATTJRE AND EFFFJCT ()F ()R1,I(}ATTONS

OBI,IGATIONS

Answer - The exceptions to the rule that the obligor

or debtor cannot be held liable for breach of the obligation by
reason of a fortuitous event are as follows:

(1) Where such liability is expressly specified by the

law. This may be illustrated by provisions of the NCC, such as
those found in Arts. 552, par. 2, 1165, par. 3, 1268,7942, 1979,
2147,2748, and 2159, NCC.

(2) Where such liability is declared by stipulation ofthe

parties. Thus, ifthe contracting parties expressly agree that the
debtor can be held liable even in case offortuitous events, such
an agreement shall be binding.
(3) Where the nature of the agreement requires the
assumption of risk. This is an aspect of what is known as the
doctrine ofassumption ofrisk. As applied to obligations, it refers
to a situation in which the obligor or debtor, with full knowledge
ofthe risk, voluntarily enters into some obligatory relation with
the creditor or obligee. It is based on the principle of uolenti
non fit injuria
- no wrong is done to one who consents. This is
illustrated by obligations arising from insurance contracts and
workmen's compensation acts.

Problem - Cite three instances where a person is made

civilly liable for failure to comply with his obligations although
he was prevented from doing so by a fortuitous event. (1983)

Ansruer

the following instances, a person is still civilly

to comply with his obligation although he was
prevented from doing so by a fortuitous event:

-In
liable for failure

(1)

When by law, the debtor is liable even for fortuitous

events;

(2)

When by stipulation of the parties, the debtor is

liable even for fortuitous events:

(3)

When the nature of the obligation requires the

assumption of risk;

@) When the object ofthe obligation is lost and the loss

is due partly to the fault ofthe debtor;
(5) When the object ofthe obligation is lost and the loss
occurs after the debtor has incurred in delay;

(8)

(7)

Whcn tho obligrrl.iorr

Lo

offensel on(l

l(II

rl'livr.r rrliscr lrorrr rr o inrinrrl

1175

When the obligation is generic.

(Nole.'.A,ny 3 ofthe 8 should be a correct answer. Nos. 1, 2

and 3 are based on Arts. ll74 and \262. NCC; Nos. 4, 5, and 6
are based on Arts. 1165 and 1262. NCC: while Nos. 7 and 8 are
based on Arts. 1268 and 1263. NCC. )

Problem - Jacinto Tanguilig constructed a windmill system for Vicente Herce, Jr. for P60,000 with a one'year guaranty.
Herce made a downpayment ofP30,000 and an installment payment of P15,000, leaving a balance of P15,000. He refused to
pay the balance because the windmill system collapsed after a
strong wind hit the place. Is Tanguilig exempt from liability due
to fortuitous event?

Ansuer

No. In order for a party to claim exemption from

liability due to fortuitous event, one requisite is that the event

must be either unforeseeable or unavoidable. A strong wind in
this case cannoi be fortuitous, unforeseeable, or unavoidable.
On the contrary, a strong wind should be present in places
where windmills are constructed, otherwise the windmills will
not turn. Given the newly-constructed windmill system, the
same would not have collapsed had there been no inherent
defect in it which could only be attributable to Tanguilig. When
the windmill failed to function properly, it became incumbent
upon Tanguilig to repair it in accordance with his guaranty and
bear the expenses lherefot. (Tanguilig os. CA and Herce, G.E.
No. 117190, Jdn. 2, 1997).)

Art.

1175.

Usurious transactions shall be governed by

apecial larPs.lne

Usurious Transactions. - Usury may be defined as

contracting for or receiving something in excess of the amount
irllowed by law for the loan or forbearance of money, goods or
chattels. It is the taking of more interest for the use ofmoney, goods
rrr chattels or credit than the law allows.rao
The special laws referred to in Art. 1175 are the Usury Law
tAct No. 2655) and the different laws amending it.rar

(6)

When the debtor promist:d to dclivcr thc sanrc thing

to two or more persons who do nol. hlv(' l,ho sitnl(. intcr(lst;

Art.

I"'Nlw I'rovisnn
''''li'1,."1r",' vs. (;(rr7,rl, H.5{r I'lrl i,18

''r$\. ( or"r, rlr llll,l'.r

Ar

I llljl.,,/,,,

lol

*L1177

ORT,IGATTONS

NATURE AND EFFECT OF OtsLIGATIONS

No/e; Prior to January 1, 1983 and under the Treasury Laws,

no person shall receive a rate of interest, including commissions,
premiums, fines and penalties, higher than 127, per annum or the
maximum rate prescribed by the Monetary Board for a loan secured
by a mortgage upon real estate the title to which is duly registered.
Under Central Bank (CB) Circular No. 905, which became effective
on Jan. 1, 1983, whereby the Monetary Board is authorized to fix
interest rates, the ceiling rates under the Usury law [Act No. 2655,
as amended by P.D. No. 1161 have been abolished.

to prior installments, there also arises a disputable presumption

that such prior installments have already been paid. This rule is
in conformity with the rule stated in Rule 131, Sec.5, subsec. (i),
of the New Rules of Court. Thus, in the case of a lease of a certain
property, such as, let us say, an apartment, if the lessor gives a
receipt to the lessee acknowledgrng payment of the rental for the
month of November without any reservation as to the rentals for

Art.

1176

It should be noted that Circular No. 905 did not repeal nor
in any way amend the Usury Law but simply suspended the
latter's effectivity. The legislation of usury is wholly the creature of
legislation. A CB Circular cannol, repeal a law. Only a law can repeal
another law. Thus, retroactive application of a CB Circular cannot,
and should not, be presumed . (DeueLopment Bank of the Philippines
us. Perez, G.E. No. 148541, Nou. 11,2004.)

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.

The receipt of a later installrnent of a debt without

reservation as to prior installments, shall likewise raise the
presumption that such installments have been paid.ra2
Extinguishment of Interests and Prior Installments.

According to the first paragraph ofArt. 1176, ifthe debtor is issued a

receipt by the creditor and on the face ofthe 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. This is in conformity with the rule that if the
debt produces interest, payment ofthe principal shall not be deemed
to have been made until the interests have been covered.r{3

According to the second paragraph, if the debtor is issued

receipt by the creditor acknowledging payment of a latter
installment of a specified debt without any reservation with respect

(livil (lrrl , rn l,rrlrlirrl llrrrn

rajArt. l253,Civil (ixL illrll v. V, l"|{l,.:tII'l,il l(;l)rV(lr.rlo()r{Nurci)vH (:rlnrl

the months ofSeptember and October which are not yet paid, there
arises a presumption that such rentals have already been paid.
This presumption, however, can be properly rebutted by competent
evidence to the contrary.

Art. lU7. The creditors, after having pursued the property in possession of the debtor to satisfy their claims, rnay
exercise all the rights and bring all the actions of the latter
for the same purpose, save those which are inherent in his
personl they may also impugn the acte which the debtor may
have done to defraud thern.laa

Remedies of Creditor To Protect Credit.

0:l

Under Art.

him. The second and third, however, are subsidiary to the first.

Idern; Exhaustion of debtor's property.

The principal

remedy ofthe creditor to protect and enforce his credit is to exhaust

all properties in the possession of the debtor. This remedy is in
conformity with the rule stated in Art. 2236 ofthe Civil Code which
states that the debtor is liable with all his property, present and
{uture, for the fulfillment ofhis obligations subject to the exemptions
provided by law. The exemptions referred to are found in Sec. 12,
Itule 39 ofthe New Rulcs ofCourt, Sec. 118 ofthe Public Land Law
((lom. Act No. 141), anrl in scattered provisions of the Civil Code,
srrch as Arts. 223,232,243,302 and 1708.

t{'?Art. 1110, Spanish

uando. 105 Phil. l2{i2.

1177, there are three general remedies which are available to the
creditor for the protection and enforcement of his right against the
debtor. They are: first, to exhaust the property in possession of the
d.ebtor; second, to be subrogated to all of the rights and actions of
the debtor save those which are inherent in his person; a\d third,
to impugn all ofthe acts which the debtor may have done to defraud

It{Arl

lll

l. Stnl'riHlr ( ivrl {i(1,.

li)lt

Art. I178

OBLIGATIONS

NATTIRE AND EFFECT OF OBLIGATIONS

Idem; Accion subrogatoria. - Actually, the debtor may

defeat the right ofthe creditor by mere omission or inaction. In other
words, he may simply fail, or neglect, or refuse to collect any credit
which he may have against a third person. In order to prevent this,
the law expressly grants to the creditor the right to exercise all of
the rights and bring all of the actions which the debtor may have
against third persons. This right or remedy is sometimes known
in Spanish law as accion subrogatoria. It must be noted that the
property of the debtor which can be attached or exhausted for the
payment of his debts may consist of corporeal as well as incorporeal
properties. It may happen, however, that his corporeal or tangible
properties may not be sufficient to pay all of his debts, but his

er, subject to one very important exception. Rights which are purely
personal in the sense that they are inherent in the person of the
debtor, such as rights arising from purely personal or family relations or those which are public or honorary in character, cannot be
included within the scope ofthis remedy.ras

Art.

1177

incorporeal or intangible properties may be more than sufficient.

Such properties may be in the form of rights and actions against
third persons. Because of his inaction or his failure to proceed
against such third persons, his own creditors are prejudiced. Hence,
in order to prevent this, the law expressly recognizes the right of a
creditor to proceed against such third persons invested as it were
with the personality of the debtor.la5 But certain conditions must
be present before the creditor can avail of this remedy. In the first
place, the debtor to whom the right or action properly pertains must
be indebted to the creditor; in the second place, the latter must be
prejudiced by the inaction or failure ofthe debtor to proceed against
the third person; and in the third place, the creditor must have first
pursued or exhausted all ofthe properties ofthe debtor which are not
exempted from execution. When all ofthese conditions are present,
the creditor can then proceed directly against the third person in
place ofthe debtor.la6

Attention must be called to the fact that this right is different

from legal and conventional subrogations which will be taken up in a
subsequent chapter. The latter involves a change of creditors, while
the former does not.ln accion subrogatoriq, tl\e credrtor merely acts
in the name and for the account of the debtor after exhausting all of
the assets of the latter.ra?
The right of the creditor to exercise all of the rights and to
bring all ofthe actions ofthe debtor against third pcrsons is, howev-

Idem; Accion pauliana.

by alienations or convcyances of property made by the debtor to

third persons in fraud ofcreditors. According to Lrt. 1777, such acts
can be impugned or attacked directly by means ofa rescissory action
at the instance of the creditors who are prejudiced.lae This action is
sometimes known as accion pouliano in Spanish law. As in the case
of accion subroga.toria, it is based on the principle that the property
of the debtor, whether present or future, stands as a guaranty for
the payment of the obligation or credit. Accion pauliana, therefore,
refers to the right available to the creditor by virtue of which he can
secure the rescission of any act of the debtor which is in fraud and
to the prejudice of his rights as a credilor. By its very nature, it is
subsidiary in character.r5o In other words, it can only be availed of
in the absence of any other legal remedy to obtain reparation for the
injury.l5l

Art. 1178, Subject to the laws, all rights acquired in

virtue of an obligation are transmissible, if there has been
no stipulation to the contrary.r52
Transrnissibility of Rights. Rights of obligations or
lhose rights which are acquired by virtue of an obligation are as
rule transmissible in character. Consequently, they may
lxr alienated or assigned to third persons. There are, however,
rr general

slveral exceptions to this rule. They arel first, where they are
rrot transmissible by their very nature, such as in the case of a
;rrrrcly pcrsonal right; second, where there is a stipulation of the
;r;rrtics that they are not transmissible; and. third, where they
r"8 N{anrrsr'.5th lld.. l}k. l. p.2{i7.

'atcastan, ?th Fld., pp.Il:l l74,',).l), 1tr'|loil5

jt ( r'slr"'. /ll' l'll . p1, l/5 I'/{i
'462 De l)nrgo,:t5-:16i

r{r3Castrn, ?th

Iil ,I l/.1.8 MI[i',r'.1,lh l'il .ltk l,|:r'll]

lll.l

Another method by which the

debtor may defeat the right ofthe creditor is by means ofa positive act
whereby the latter is defrauded or prejudiced. This may be illustrated

1r'l'his r.scrsso|v rrcl!,n rs r.l]uli'lr{l I'v Ar'1s l:}lJO l:llJ!}. (livil (lode
' 'Arl l:lr'lil. ('ivrl { i,(l{
r'
:l l ,k I,', il/ i18

" ArI Illll

St!rnrsh

('ivrl(',rI

t{)t,

Art.

1178

OBLIGATIONS

are not transmissible by operation of law.r53 It must be observed,

however, that intransmissibility by stipulation of the parties, being
exceptional and contrary to the general rule, should not be easily
implied, but must be clearly established, or at the very least, clearly
inferable from the provisions ofthe contract itself.lsa

CHAPTER 3
DIFFERENT KINDS OF OBLIGATIONS

Section l.

Pure and. Conclitional Obligations

Aft. f 179. Every obligation whose perforrnance 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 dernandable, without prejudice to the effects of
the happening of the event.r

Art. 1180. 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, sutrject to the provisions of Article
t197.2

Pure Obligations. - The effects as well as the concept of

pure obligations are contained in the formula which is given in the
lirst paragraph of Art. 1179, although, as Castan says, the concept
is incomplete because it only excludes the condition and not the
tcrm.3 Using the provision as a basis and bearing in mind this
criticism, we can, therefore, define a pure obligation as one whose
r'{Iectivity or extinguishment does not depend upon the fulfillrnent
or nonfulfillment of a condition or upon the expiration of a term or
pcriod, and which, as a consequence, is characterized by the quality
ol immediate demandability.
The distinctive characteristic of a pure obligation is its immerlirrtc demandability. This quality, however, must not be understood

l17ll, l:]l l, (l'v'l (l(x1,.

!'iEstaleol H0rnnrrdoz vs l,'rr(tr'S'ri.tv ('r!, l(X) l'hrl. :l8tl

LArt. lll:1, Sp,'nish (livil

(ixl{'

153Arts.

l{xi

':l

(ll''llIr','/ll' l,il

, t). l(]4.

Ir)7

Alts.

1179-1180

I)IFFERENI' KINDS OF

OBLIGATIONS

in such a way as to lead to absurd interpretations which would literally require the obligor or debtor to comply immediately with his
obligation. A distinction must be made between the immediate demandability of the obligation and its perfbrmance or fulfillment by
the obligor or debtor. Although the obligee or creditor can demand
the performance of the obligation immediately, the quality of immediate demandability is not infiinged or violated when a reasonable
period is granted for performance.l Thus, where the debtor had executed a simplc and unconditional promissory note promising to pay
a certain indebtedness to the creditor without fixing any particular
date for payment, it was held that the obligation is pure and that,
although the creditor can demand for the payment of the same immediately, a reasonable period ofgrace, which in this case was fixed
at ten days after the obligation was contracted, should be given to
the debtor within which to pay.s

Conditional Obligations, In its juridical sense, a condition may be defined as a future and uncertain fact or event upon
which an obligation is subordinated or made to depend. A conditional obligation may, therefore, be defined as one whose effectivity
is subordinated to the fulfillment or nonfulfillment of a future and
uncertain fact or event.6

Although the first paragraph of Art. 1179 would seem to

indicate that either the requisite of futurity or uncertainty would be
sufficient in order that the event upon which the performance ofthe
obligation shall depend will be considered a condition, it is, however,
essential that both requisites must concur, In other words, the event
must not only be future, but it must also be uncertain. The reason
why the disjunctive term is used is that said paragraph is intended
primarily as a definition of a pure obligation using the process of
exclusion. Hence, it must exclude not only conditional obligations,
but also obligations with a term.7
From the literal text of the first paragraph of Art. 1179, it
seems that a past but uncertain event is also considered a condilion.
'8 N{anresa, 5th Ed., I}k 1. pp. ;105 ll0{;
'Floriano vs. Delsadi,, I I I'hil I5l, li,r ,'llrt r |r's, s r{ l'(,llr"s ILrllk vs
Odom,6'1Phil. 1211,(irrlrrlrs ls,rsr.Alrrrrrr (lrrlrr.( 4. l7()ll (irrz {iil'11
'i8 Manrt srr.5th l'il llk I. l, illrll
;//,t./ , trt) ;ll)ll il l(r
l

orl

O[ll,l(iiYl'loNS Arts 1179-1180

Pure and Conditional Obligations

This is not, however, accurate. The event ilselt can never constitute
a condition because in order that it can be classified as such, the
requisites oflu/a rity ar,ld. uncertttint] must be present But the proof
or ascertainment ofthe fact or event, as distinguished from the fact
or event itself, may constitute cither a condition or a term depending
upon the circumstances of each case.

Thus, if the proof or ascertainment of the fact or event will

surely come to pass, although it may not bc known when, it is clear
that it constitutes a term or period, such as when A promises to pay
B a certain sum ofmoney ifthe latter can prove by proper authorities
that the Civil Code ofthe Philippines took elfect on Aug. 30, 1950. In
such case, the requisites oflLturily and <:ertaintl irr order that a fact
or event shall constitute a term or period are certainly present. On
the other hand, ifthe past event is unknown to the parties as well as
to the whole world, so that the proofor ascertainment thereofmay or
may not happen or come to pass, it is also clear that it constitutes a
condition, such as when A promises to pay I a cerlain sum ofmoney
il'the latter can prove by proper evidence that Rizal did not retract
I.'reemasonry, or that a priest broke the seal ol the confcssional in
order to reveal the secret of the Katipunan.
However. when the debtor binds himself to pay when his means

pcrmit him to do so, the obligation shall be deemed to be one with

rr period, subject to the provisions of Art. 1197.3 Consequently, the
courts shall determine such period as may under the circumstances
h:rve been probably contemplated by the parties. Once fixed bv the
courts, the period cannot be changed by them.e Thus, it has been
hclcl thnt if it is stipulated by the contracting parties that the debtor
shrrll pay "as soon as he has the money," the creditor's remedy is
lo resort to the coufts for the determination of the duration of the
lrcriod in accordance with the provisions ofArt 1197 ofthe Code.r'r

Idem; Classification of conditions.

t

rir<lit,ionally classified as follows:

I ir. SrisTrensluc

Conditions are

when the fulfillment ol the condition results

in t,ho acquisition ofrights arising out ofthe obligation-

Art Il1r'/ ( lrrl( ,!l('

'Ar I lll]lr I r!rl(',x1,'
" I'Ilr,rrlI r , i )rrtlir, llr ( )li ( i,'/ l8l{i
l

0tl

Arts. 11?9 1180

OBI,IGATIONS

I)IFFERENl' KTNDS OF OI]I,I(iATIONS

Art.

1181

Purc and Conditional Obligalions

b.
(2) a.

ResoLutory - when the fulfillment of the condition

results in the extinguishment of rights arising out of the
obligation.

Potestdtiue

when the fulfillment of the condition

will ofa party to the obligation.

depends upon the

b.

C.tsual - when the fulfillment of the condition depends

upon chance and/or upon the will of a third person.

c.

Mised - when the fulfillment of the condition depends

partly upon the will ofa party to the obligation and partly
upon chance and,/or the will of a third person.

(3) a.

Possible - when the condition is capable of realization

according to nature, law, public policy or good customs.

b.

Impossible - when the condition is not capable of

realization according to nature, law, public policy or good
customs,

(4)

(5)

a.

Positiue - when the condition involves the performance

ofan act.

b.

Negatiue
an act.

a.

Diuisible

when the condition involves the omission of

when the condition is susceptible of partial

realization.

(6)

(.7)

b.

Indiuisible - when the condition is not susceptible of

partial realization.

Conjunctiue - when there are several conditions, all of

which must be realized.

b.

Alternatiue - when there are several conditions, but only

one must be realized.

a.

Express

when the condition is stated expressly.

b.

Implied

when the condition is tacit.rl

r'8 Manrcsa.l'{.h

lil . ltk I t't, il:l:t llll.l

ll0

Art. fl8l. 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.L
Suspensive and Resolutory Conditions. - A suspensive
condition (condition precedent) is a future and uncertain event
upon the happening or fulflllment of which rights arising out
of the obligation are acquired. Stated in another way, it signifies
a future and uncertain event upon the fulfillment of which the
obligation becomes effective. Hence, when the obligation depends
upon a suspensive condition, the acquisition of rights by the obligee
or creditor is subordinated to the fulfillment of the event which
constitutes the condition. In other words, the birth or effectivity of
the obligation is suspended until the happening or fulfillment ofthe
cvent which constitutes the condition. Thus, ifA obligates himself
to give to B P100,000 if the latter gets married to C, the condition is
suspensive in character. In such case, B cannot acquire the P100,000
unless he gets married to C. IfX obligates himself to give to Y a
certain house and lot if the latter passes the bar examinations in
his first attempt, the condition is also suspensive in character. He
cannot acquire the housc and lot unless the condition is fulfilled.
It is, therefore, evident that when the obligation is subject to a
suspensive condition, its birth or effectivity can take place only if
and when the event which contitutes the condition happens or is
lulfilled. Thus, the Supreme Court, in the case of .,Iouler us. Court
o/ Appeals (183 SCRA 172) held that when a contract is subject to
ir suspensive condition, its birth or effectivity can take place only if
;rnd when the event which constitutes the condition happens or is
lirlfilled. If the suspensive condition does not take place, the parties
would stand as if the conditional obligation had never existed.
A resolutory condition(condition subsequent), on the otherhand,
future and uncertain event upon the happening or fulfillment of
which rights which are already acquired by virtue of the obligation
rrrt'extinguished or lost. Hence, when the obligation is subject to a
r-r'solutory condition, the juridical relation which is established as a
rlsrrlt of thc obligation is subject to the threat ofextinction. Thus, if
rr 1x'rson donatcs a pirrcel of land to the Oity of Manila subject to the
rs a

L)Arl llll

lilrrrrr,lr{ rrI
t

Art.

Art.

OBLIGATIONS

DIFFERENT KINDS OF OBI,I(]A'IIONS

Pure and Conditional Obligattons

condition that the City shall transform it into a public park within
a period of one year from the time of the perfection of the donation,
the condition which is imposed is resolutory in character. Ifthe City
fails to transform the land into a public park within the stipulated
period, the rights which it acquired over the land as a result of the
donation are resolved or extinguished altogether. The same is true
in case a person sells a parcel ofland with right ofrepurchase. Once
the sale with pocto de retro is perfected, the vendee o relro becomes
the owner of the property. However, his right is not absolute in
character because it may be extinguished or lost if the vendor o
relro exercises his right ofrepurchase within the legal or stipulated
period of redemption.

to a resolutory condition. If the vendor rr relro exercises his right ol'

repurchase within the period of redemption, the right of the vendee
ct retro over the property is extinguished; if he does not, the right is

1181

Idem; Effects. - It is, therefore, clear from what had been

if an obligation is subject to a suspensive condition, the
acquisition ofrights shall depend upon the happening or fulfillment
ofthe fact or event which constitutes the condition.13 In other words,
the obligation shall become effective only upon the fulfillment of
the condition. Consequently, what is acquired by the obligee or
stated that

creditor upon the constitution of the obligation is only a mere hope

it is
protected by the law.la

or expectancy. Unlike other hopes or expectancies, however,

On the other hand, if the obligation is subject to a resolutory

condition, it becomes demandable immediately after its establishment

or constitution. This is evident from the provision of the second

paragraph of Art. 1179. Consequently, unlike an obligation with a
suspensive condition, rights arising out ofthe obligation are acquired
irnmediately and vested in the obligee or creditor.r5 However, this
is without prejudice to the happening or fulfillment of the event
which constitutes the condition. In other words, although rights are
immediately vested in the obligee or creditor upon the constitution of
the obligation, such rights are always subject to the threat or danger
of extinction. Thus, in the case of a sale wrth pact<t de retro, the
vendee o rtro becomes the owner ofthe property which is sold once
it is delivered to him. This right of ownership, however, is subject

'3Ait. 1181, Civil Code; l(,r illustfi'liv".r's' s, s(.(' Wis( & (l(, vs K( llv, ;i? l,hil.

696; Santiago vs. Millar,6lt I'hil il1)i I'l'rl NII ltIDk vs l'lrl 'l\.ust
Panganiban vs- Batrngrs'l'r'rrrrs { i' . ( '4. .ll; ( lll (:r., jlll;i'

''Art.

118fJ,

(livil ('rxl l l'lrrl

riArt. I l8l. ( livil (irl'.

lu,rrr:

(i'.

(i8

I'hil

1t{:

consolidated.t6

Problem On June 5, 1960, DP delivered possession of

his house and lot in the Poblacion ofPolo, Bulacan to AB who in
turn delivered to the former possession ofhis 2-hectare rice land.
Both properties were unregistered. They executed a document
entitled "Barter" which, among others, provided that both
parties shall enjoy the material possession of their respective
properties:

that neither party shall

encumber, alienate or

dispose of their respective properties as bartered without the

consent of the other; and that DP shall be obliged to return
the property to AB when the latter's son shall attain majority
and decide to retum DP's property. After AB's death and his
son S attained rnajority in 1977, the latter demanded for the
return of the 2 hectares of rice land whicb had then increased
tremendously in value. DP refused and so S filed an action for
recovery of the land. Will the action prosper? Why? (1979 Bar
Problem)

Ansuer - Yes, ihe action will prosper. The stipulations

in the barter agreement are clear. AII that the parties intended
was to transfer the material possession and use of the subject
properties to the other. There was, therefore, no conveyance of
their right ofownership. In fact, the parties retained their rights
to alienate their right ofownership, a right which is one element
ofownership. What was, therefore, transferred was merely their
right of usufruct. But then, the document also says that DP
shall be obliged to return the property to AB when the latter's
son shall attain majority and decide to return DP's property.
The mutual agreement, therefore, was subject to a resolutory
condition the happening ofwhich would extinguish or terminate
their right of usufruct over the subject properties. The facts are
clear. Said condition has already been fulfilled. (Baluraa us.
Nauarro, 79 SCRA 309.)

It is, therefore, evident that a resolutory condition affects the

obligation to which it is attached in a manner which is diametrically
,pposcd to l,hat ofa suspensive condition. Ifthe suspensive condition
rs l rr llilled, thc obligrrtion arises or lrccomcs cflective; ifthe resolutory

I,|LLrr,'r'( ,, !! ,l,.lr"rrr. 1l/ I'l'rl lrtll

'rAIt lti L,/r1l.('vrl

I L'.

1181

t 'rli,

u:r

Art.

Art. 1182

OBLIGATIONS

DIFFERENT KINDS OF OBLIGATIONS

Pure and Conditional Obligations

condition is fulfilled, the obligation is extinguished. Ifthe first is not

fulfilled, no juridical relation is created; if the second is not fulfilled,
the juridical relation is consolidated. In other words, in the first,
rights are not yet acquired, but there is a hope or expectancy that
they will soon be acquired; in the second, rights are already acquired,
but subject to the threat of extinction.rT

of which cannot be effected except when the right rs deemed

1181

These distinctions between a suspensive and

condition are illustrated in the following case:

a resolutory

Parks vs. Province of Tarlac

49 Phil. r42
Plaintiff bought the land which is the subject matter of
this litigation from Concepcion Cirer and James Hill, who,
several years ago, prior to the sale, had donated the land to
the municipality of Tarlac subject to the condition that it will
be used absolutely and exclusively for the er.ection of a central
school and a public park, the work to commence within a period
ofsix months from the date ofratification ofthe donation by the
padies. The question now is: has the plaintiffa right ofaction to
recover the parcel of land from the municipality ofTarlac on the
ground that the condition imposed is suspensive, and therefore,
the said municipality had never acquired a right thereto since
the condition was never performed?

Held: "'lhe appellant contends that a condition precedent

having been imposed in the donation and the same not having
been complied with, the donation never became effective. We
find no merit in this contention. The appellant refers to the
condition imposed that one of the parcels donated was to be
used absolutely and exclusively for the erection of a central
school and the other for a public park, the work to commence
in both cases within the period of six months from the date of
the ratification by the parties of the document evidencing the
donation. lt is true that this condition has not been complied
with. The allegation, however, that it is a condition precedent
is erroneous. The characteristic of a condition precedent is that
the acquisition ofthe right is not effected whilc said condition is
not complied with or is not deemed complied with. Meanwhile,
nothing is acquired and there is only rn cxprrtancy ol'rightConsequently, when a conrlition is irrrposed, thc r:omplirrncc

rrF

M:rnr, sr'.

5ll' ll,l .lll\ Il

acquired, such condition cannot be a condition precedent. In the

present case, the condition that a public school be erected and
a public park made on lhe donated land, work on the same to
commence within six months from thc date ofthe ratification of
the donation by the parties, could not be complied with except
after giving effect to the donation. The donee could not do any
work on the donated land if the donation had not really been
effected, because it would be an invasion of another's title, for
the land would have continued to belong to the donor so long
as ihe condition imposed was not complied with- The condition,
therefore, was a condition subsequent."ts

Art. 1182. IYhen the fulfiIlment of the condition depends

upon the sole will of the debtor' the conditional obligation
sha 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.re
Potestative, Casual and Mixed Conditions. - As regards
the cause upon which its fulflllment depends, a condition may be
either potestative, casual or mixed. A purely potestative condition
is one whose fulfillment depends exclusively upon the will of either
one ofthe parties to the obligation. A casual condition is one whose
fulfillment depends exclusively upon chance and/or upon the will of
a third person. A mixed condition is one whose fulfillment depends
.jointly upon the wiil ofeither one ofthe parties to the obligation and
upon chance antyor the will of a third person.

Idem; Effect of potestative conditions.

Although the law is silent with regard to potestative conditions

fulfillment depends exclusively upon the will of the creditor,
it. is undeniable that it cannot have the effect of nullifying the

whose

r-l,i'r,r Hrr"rlIr .r'it, \rt. l)r$l', vH (l'tr'7{,'r {

"'Arl llll'. Sl,,rrrr*h {'rvrl {ix|

lll
I l.t

- A distinction

must be made between the effects of a potestative condition whose

lulfillment depends exclusively upon the will of the creditor and the
cfTects of one whose fulfillment depends exclusively upon the will of
the debtor. In the first the condition as well as the obligation is valid,
while in the second not only the condition, but even the obligation
itself. is void.

l,

rlv.1}1)

l'hil

l)l')g

Art. I182

ORT,TGATIONS

DIFI.'I]RI]NT KINDS OI' oIJI,I(IATIONS

Art. 1182

Pure :rnd Cc,nditional Obligat ions

obligation to which it is attached.'fhis is so because the creditor

is naturally interested in the fulfillment of the condition since it is
only by such fulfillment that thc obligation can become effective.
Furthermore, the prchibition directed against potestative conditions
which can be clearly infcrred from the provision ofArt. I 182 extends
only to those which are potestative to the debtor and not to those
which are potestative to the creditor.'l
On the other hand, the Iaw expressly states that thc conditional
obligation shall be void if it is subject to a potestative condition
whose fulfillment depends exclusively upon the will of the debtor.rr
The reason behind this precept is evident. To allor. conditions whose
fulfillment depends exclusively upon the will ofthe debtor would be
equivalent to sanctioning obligations which are illusory.,2 Besides, it
would be in direct contravention of the principle announced in Art.
1308 ofthe Oode that the validity and fulflllment ofcontracts cannot
be left to the will of one of the contracting parties. Thus, where the
obligor subscribed to 200 shares of capital stock to a certain college
with a par value of P100.00 each subject to the condition that she
will pay as soon as she had harvested fish fron her fishpond, it was
held that even granting that the college had accepted the condition,
the obligation would still be void in accordance with Art. 1182 ofthe
Code, since the fulfillment ofthe condition depends exclusively upon
the will of the obligor.2s

It must be noted, however, that the precept contained in

the lirst sentence of Art. 1182 is applicable only to a suspensive
condition. Ilence, if the condition is resolutory and, at the same
time, potestative, the obligation, as well as the condition, is valid
even though the fulfillment ofthe condition is made to depend upon
the sole will of the obligor or debtor. This is logical because it is
but natural that the debtor is interested in the fulfillment of the
resolutory condition since it is only by such fulfillment that he can
reacquire the rights which have already been vested in the obligee or
creditor upon the constitution ofthe obligation.,l In other words, the
posilion of the debtor when the condition is resolutory is t:xactly tht'

sth Ed., Bk. I. p. ;i27

'1Art. 1182. Civil Oodc.
"'8 Manresa. 5th Hrl . Ilk l. t, jl:l I
'u8 Manresa.

'''l'rillana

vs. ()Lrr.z,,n

'?lAfl. I l1|0.

('ivil ( ixI

(i'l|!!

r,.

sarne as the position ol the creditor when the condition is suspenslve

Hence, to make the fulfillment of the resolutory condition depend

upon the debtor's will does not render the obligation illusory. Thus,
in the case of T(rtlor us. Ul Tieng,"^ where plaintiff and defendant
agreed that should the machinery, which the latter had ordered from
the United States, not arrivc in I\{anila within six months for any
reason whatsoever, he can then cancel the contract at his option, the
Supreme Court, although admitting the potestative character ofthe

condition, declared:

"In Spanish jurisprudence :r condition like that under

discussion is design:tted by Manresa a lacultativc condition
(Vol- ?, p.611), and we gather from his comment on Articles
1115 and 1119 (zr.,a Arts. 1182 antl 1186) of the Civil Code that
a condition, facultalive as to the debtor, is obnoxious to the {irst

1Il5 lnou Art. ll82) and tenders

the whole obligation void (Vol. {}, p. 131). That statement is
no doubt correct in the sense intended by the learned author,
but it must be remembered that he evidently has in mind
thc suspensive condition, such as is contemplated in Article
L775 (now Art. 1182). Said article can have no application to
the resolutory condition, the validity of which is recog'nized in
Article 1113 (runt Arl1179) oflhe Civil Code ln other words. a
sentence contained in Articlt:

condition at once facultativc and resolutory may be valid though

the condition is made to dcpend upon thc will ol the obligor."

It must also be noted that the rule that the conditional

obligation shall be void is applicable only to an obligation which
dcpends for its perfection upon a condition which is potestative to
l.he debtor and not to a pre-existing obligation. Thus, if the debtor
binds himself to deliver to the creditor a certain automobile by the
cnd of December, 1980, provided that he is in the mood to do so,
l.lre obligation is void; in this case it is evident that the obligation
rlcpcnds for its perfection upon the fullillment ofa condition which is
gxrtestative. If the debtor, however, binds himself lo pay a previous
irrdebtedness ofP2,000 to the crcditor by the end ofDecember, 1980,
plovidcd that he is in the mood to do so, althouSlh the condition is
voirl on the ground that its fullillmtint depcnds exclusively upon the
w ill ol thc debtor, the obligrrtion it,sr:ll is not void since it refers to a
pn' t'xist.itrg itttlclrtt'ritrt'ss.

!rl l'l,rl ;ls.l

'.1;l I'lr

I l{;

l |,:l

Art.

Art.

1182

OBLIGATIONS

I)IFFERENT KINDS OF OBI,I(}ATIONS

Pure and Conditional (]blig:rtions

Osmeia vs. Rarna

14 Phil. 99

is subject to the condition that the premises shall be vacated by the

occupant and that the vendee shall see to it that said premises shall
be vacated, it was held that the fulfillment ofthe condition depends

1182

This is an action commenced by the plaintiffin the Court

of First Instance of Cebu for the collection of an indebtedness
evidenced by a promissory note, signed by the defendant. Under
this note, defendant stated: "I promise, in the presence of two
witnesses, that, ifthe house ofstrong materials in which I live is
sold, I will pay my indebtedness to Don Tomas Osmeia x x x." Is
the condition potestative within the meaning of the prohibition
in what is now Art. 1182 ofthe Civil Code or not?

Held: "'lhe only questions raised by the appellant were

questions of fact. lt was suggested during the discussion of the
case in this court that, in the acknowledgment above-quoted
of the indebtedness made by the defendant, she imposed the

condition that she would pay the obligation if she sold her
house. If that statement found in her acknowledgment of
the indebtedness should be regarded as a condition, it was a
condition which depended upon her exclusive will and this is,
therefore, void."26

Iden; Effect of casual conditions. When the fulfillment

of the condition depends upon chance and./or the will of a third
person, the obligation including such condition shall take effect.2?
Thus, ifthe obligor promises to deliver his automobile to the obligee
if a certain candidate is elected to the position of President of the
Philippines in 1969, the obligation is valid because it is evident that
the fulfillment ofthe condition to which it is subject depends upon
the will of others. The same is true if the obligor promises to give
P10,000 to the obligee after the lapse of two years, provided that
during such period war shall not break out between Russia and the
United States.
Idem; Effect of mixed conditions. When the fulfillment
of the condition depends partly upon the will of a party to the
obligation and partly upon chance and,/or the will of a third person,
the obligation including such condition shall take effect. Thus, where
the payment of the balance of the purchase price of a house and lot

"nln Hermosa vs. Longar:r (9:J

I'hil l)71 r, I' llllx.h rrton r'!r.'rt fllsr., thc Srrprenrr

wr. rrr'ly lrr rrlurrl,lr"' r"'rl Ihc srri'r,wrd

Court declared that the abov" rrrlrrrg

not the actual ruling ol lhc c,'s'
(livi1 ( irL
'?Art. I182,

lltt

partly upon the will of the debtor and partly upon the will of a
third person, and therefore, the contract is valid and enforceable.'z3
Similarly, where the debtor promises to pay his debts to the creditor
as soon as he shall have received funds derived from the sale of his
house, it was held that the fulfillment ofthe condition depends partly

upon the will ofthe debtor and partly upon the will ofthird persons,
as a consequence of which it is perfectly valid and enforceable.'e But
where the debtor promises to pay his debts "if he decides to sell his
house" or "ifhe likes to pay the sums advanced," the condition would
be void, since its fulfillment would then depend exclusively upon his
will.so

Smith' Belt & Co. vs. Sotelo Matti

44 Phil. 875
In August, 1918, during the first World War, plaintiff and
defendant entered into several contracts whereby the former
agreed to sell, and the latter lo purchasc, two steel tanks for
P21,000, the same to be shipped from New York and delivered
in Manila "within three or four months," two expellers at
P25,000 each, which were to be shipped from San Francisco
in "september, 1918, or as soon as possible," and two electric
motors, approximate delivery of which was to be made "within
ninety days, although not guaranteed." Because of the war that
was going on, there was a stipulation in all of the contracts
that delivery ofthe machineries shall be subject to govetnment
regulations, embargoes and other requirements. Upon their
arrival in Manila, defendant refused to acccpt the machineries
on the ground that plaintiff had incurred in delay. As a result,
the latter brought this action against the former for specific
performance. llolding that the defendant can still be compcllcd
to comply with the obligation, the Supreme Court declared:
"Considering these contracts in the light of the civil
law, we cannot but conclude that thc term which the parties
attempted to fix is so unccrtain that one cannot telljust whether,
as a matter of fact, thesc articles could be brought to Manila or
'1rr" i'rl,' vN ('hIr lnng,('4,"15{)lI
'"ll,.r'rrr,rq, r', Ii,r{rrni, !l:j I'l,tl lr'/l

(lrr/

l19

21}l{l

Art.

1182

not. If that is the case, as we think it is, the obligation must be

regarded as conditional.
"And as the export of the machinery in question was, as
stated in the contract, contingent upon the sellers obtaining
a certificate of priority and permission of the United States
Government, subject to the rules and regulations, as well as the
railroad embargoes, then the delivery was subject to a condition
the fulfillment ofwhich depended not only upon the effort ofthe
herein plaintiff, but upon the will ofthird persons who could not
be compelled to fulfill the condition. In cases like this, which are
not expressly provided for, but impliedly covered by the Civil
Code, the obligor will be deemed to have sufnciently performed
his part of the obligation, if he has done all that was in his
power, even ifthc condition has not been fulfilled in reality."

Problem

Give the effects of potestative, casual and

mixed conditions upon I he obligat ion.

Ansaer Ifthe condition is potestative in the sense that

its fulfillment depends exclusively upon the will of the debtor,
the conditional obligation shall be void. (Art. 1182, NCC.)
Ifthe conditionis potestativein the sensethat its fulfillment
depends exclusively upon the will ofthe creditor, the conditional
obligation shall be valid. This is so because the provision ofthe
first sentence of Art. 1182 extends only to conditions which
are potestative to the obligor or debtor. Besides, the creditor is
naturally interested in the fulfillment of the condition since it
is only by such fulfillment that the obligation arises or becomes
effectrve. (Art. 1181, NCC; 8 Manresa,
Ed., Bh. 1, p. 327)

If the condition is casual in the

'th

sense

Art.

DIFFERENT KINDS OF OBLIGATIONS

Pure and Conditional Obligations

OBLIGATIONS

that its fulfillment.

depends upon chance and/or upon the will ofa third person, the
obligation shall be valid. (Art. 1182, NCC.)

its fulfillment depends not only upon the will of the

debtor but also upon the concunence of other factors, such as
the acceptability of the price and other conditions of the sale,
as well as the presence of a buyer, ready, able and willing to
because

purchase the property.

Problem - Suppose that in the above problem, the debtor

promised to pay his obligation if a house belonging to him is
sold, will that make a difference in your answer?

Answer - It will not make a difference in my answer.

The condition is still mixed because its fulfillment depends not
only upon the will of the debtor but also upon the concurrence
of other factors, such as the acceptability of the pr-ice and other
conditions ofthe sale, as well as the presence ofa buyer, ready,
able and willing to purchase the property.
True, apparently, in Osmefia us. Rema (14 Phil. 99), the
Supreme Court declared that the above condition is potestative

with respect to the debtor, but a closer perusal of the case

will show that the declaration or statement was merely an
assumption and the same was not the actual ruling. (Hermosa
us.

Longara)

Hence, the condition is valid. And it cannot be said that if

the debtor so desires, he can always prevent the sale. According
to the NCC (Arl. 1186.l, ifhe prevents the consummation ofthe
sale voluntarily, the condition would be deemed or considered
complied with. (16id.)

Problem Suppose that in the above problem, the debtor

promised to pay his obligation as soon as he has received the
funds derived from the sale ofthe property if he finally decides
to sell it, will that make a difference in your answer?

ProbLem - Suppose that thc debtor executed a promisso.y

note promising to pay his obligation lo the crcditor as soon as
he has received funds derived lronr thc sn['of his propcrty in rr
certain place, is thc conditiorr ln)1.{'st. t.iv(.{)r nrix(rl?

Ansroer - Yes. In such case. it is evident that the condition

is potestative with respect to the debtor because its fulfillment
would then depend exclusively upon his will. Consequently, the
condition is void. (Hermosa os. Longara..) The validity of the
obligation is, of course, not affected, because the rule stated
in Art- 1182 of the NCC to the effect that when the fulfillment
of the condition depends upon the sole will of the debtor, the
conditional obligation itself shall be void, is applicable only
when the obligation shall dcpcnd fbr its perfection upon the
lirllillnrt'nt ofthc condition irnd not when tho obligation is a prer.xinl.ing rrnr'. /Scc'/'rilluuu ls. ()utzort ('ollrges, 93 Phil. 383.)

Answer AccorrlirrlJ to lllr. Sltl)rlnt('(irrrrl rrr llrc crrsr.

of llerntr*rt ls. Itngtru. !);l I'htl :)7t,IIIr.(oII(IiIioIr rs rnixr,(l

wlrlrr IIrr.iirIIiIIrrrlrrI ol Ilrc rrrrrrlrlrorr rI'pcrrrls

If the condition is mixed in the sense that its fulfillment

depends partly upon the will of a party to the obligation and
partly upon chance and/or the will of a third person, the
obligation shall be valid. (Smith, Bell & Co. us. Sotelo,4t phil.
875; Hermosa us. Longara,9S Phil. 971.)

l:r)

I'nll' nt Arl. ll8:l

ol

tlrl Nlw (livil (lxlc

l:ll

rlrr'lrrrcs thal.

rrlrorr t.hc

soll will

1182

Art. 1183

DII'!'ERENT KINDS OF OI]I,I(iATIONS

OBLIGATIONS

. 1183

Pure and Conditional Oblig:rtions

of the debtor, and conditional obligation shall be void. Is this

rule absolute in the sense that it is applicable to all conditional
obligations regardless ofthe nature ofthe condition as well as of
the obligation?

Answer

The rule is not absolute. There are 2 wellknown limitations. They are as follows:
The rule is applicable onlyto a suspensive condition. Hence,

if the condition is resolutory and potestative, the obligation is

valid even if the fulfillment of the condition is made to depend
upon the sole will of the debtor. This is logical bccause it is but
natural that the debtor is interested in the fulfillment of the
condition since it is only by such fulfillrnent that he can reacquire
the rights which have already been vested in the creditor upon
the constitution ofthe obligation. In other words, the position of
the debtor whcn the condition is resolutory is exactly the same
as the position ofthe creditor when the condition is suspensive.
(Taylor us. Uy Tieng Piao,13 I'hi|.873.)

The rule that even the obligation itself shall be void is

applicable only to an obligation which depends for its perfection
upon the fulfillment of the potestative condition and not to a
pre-existing obligation. Thus, if the debtor binds himself to
pay a previous indebtedness as soon as he decides to sell his
house, although the condition is void because of its potestalive
character, the obligation itsclf is not affected since it refers to
a pre-existing indebtedness. (Trillana us. Quezon Colleges,93

Phil.383.)

Art. 1183. 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 irnpossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon.;r1
Possible and Irnpossible Conditions. The condilion trpon
which an obligation is made to dept-'nd mav also lxr classificrl lrs
possible or impossible. It is possibl(! wlr(!n il is t lrpirblc ol rcirlizirl iorr
not only according to ils nrrt.rrr(., brrl irlso ltordirrg lo l.lrc ltrw, gxrrl

customs and public policy. It is impossible when it is not capable of

realization either according to its nature or according to law, good
customs or public policy.

Idern; Effects. - According to Art. 1183 of the Civil Code,

impossible conditions as well as those which are contrary to good
customs or public policy and those which are prohibited by law
shall annul the obligation which depends upon them.32 This rule
is logical considering that the obligation depends for its perfection
upon the fulfillment ofa condition which is either impossible, illegal,
inappropriate or illicit in character. Thus, if A obligates himself to
pay to B P10,000 if the latter can contract the inhabitants of Mars,
the obligation is a nullity because the condition is impossible. If C
promises to give to D a parcel of land if the latter secures a divorce
from his wife, the obligation is also a nullity because the condition is
contrary to law, good customs and public policy. IfE binds himself to
deliver to F an automobile if the latter will go with him arcund the
world on a trial hone1,rnoon, the obligation is certainly void because
the condition is contrary to good customs. Ifthe obligation, however,
is a pre-existing obligation, and therefore, does not depend upon the
lulfillment of the condition for its perfection, it is quite clear that
only the condition is void, but not the obligation.

It must be observed that if the obligation is divisible, that part

which is not affected by the impossible or unlawful condition shall be
valid.33 Thus, ifA and B enter into an agreement whereby the former
binds himself to give P5,000 to the latter in two equal installments
the first installment to be given ifthe latter is able to dispose of a
crrche of opium belonging to the former and the second installment
l.o be given if the latter gets married to C, since the obligation is
divisible, that part (the second part) which is not affected by the
u

nlawful condition shall be valid.

F'urthermore, ifthe condition is not to do an impossible thing, it

shall be considered as not having been agreed upon.31 Consequently,
t lrt' obligation becomes pure, and therefore, immediatelydemandable.

'l,rrrx'rr Mol0r (i, vs. Abrrl, {i? I'hil.

2:1, R.yos vs. (}onzales,

, 4r't ( )ll {;r'z:lil{i'/

Arl I lslt l rerl ( ,n|,

,^rlrru ll'rr,

'iArt ||Ir;. Sl,r'r'rl' (

'v'l

'

( ,nl'.
t'.'.2

tlA,45 OlL

Caz.

8:il,'l'lx1rtr.r's Sllt,trly (i,rt'. vs MrrIrlos, ( 4.4il OIT (hz. 180:li Santos vs. Sec. of

t:t:t

Art

OBI,IGATIONS

I)l FFERENT KINDS OF ()BLl(1.,\TIONS

PLlre and Conditional Obli,jalions

Attention must also be called to the fact that there is a difference with respect to effect between a condition which is impossible,
illegal, inappropriate or illicit when it is attached to an obligation35
and the same condition when it is attached to a simple or remuneratory donationsd or to a testamentary disposition.3? In the first, the obligation itselfis void, while in the second, the condition is considered
as not imposcd, although the Conation or testamentary disposition

to give a new Studebaker car to Y if the latter gets married to Z

within a period of live years from the time ol the constitution of
the obligation, and at the expiration of five years, Y had not yet
L:omplied with the condition, the obligation is also extinguished.

Arts. 118.1-l l85

itself is valid.

Art. 1184. 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,rl
Art. 1185, The condition that some event will not happen
at a determinate time shall render the obligation effective
frorn the mornent the time indicated has elapsed, or if it has
becorne 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.se
Positive and Negative Conditions. - The condition upon
which an obligation is made to depend may also be classified as
positive or negative. It is positive if it involves the performance of
an act or the fulfillment of an event; it is negative if it involves the
nonperformance of an act or the nonfulfillment of an event.
Idem; Effects. - The condition that some event happen at
a determinate time shall extinguish the obligation as soon as the
time expires or if it becomes indubitable that the event will not take
place.1o Thus, if A binds himself to give to B P2,000 if the latter
passes the bar examinations in his first attempt, and B flunks the
examinations, the obligation is extinguished. If X binds himself
"Ih
36Art.

The condition that some event will not happen at a determinate

t.ime shall render the obligation effeclive fiom the moment the time

indicated has elapsed, or if it has become evident that the event

cannot occur.4r Thus, ifA binds himself to give P5,000 to B provided
t.hat the latter shall not get married before reaching the age of
twenty-five, the condition is negative. If B is not yet married at the
time when he finally reaches the age of twenty-five, the obligation
becomes effective.

Attention must be called to the rule stated in the second

paragraph of Art. 1185. The intention of the parties, taking into
consideration the nature of the obligation, shall govern if no time
has been fixed for the fulfillment of the condition lt is evident that
Lhe same rule can also be applied to a positive condition.

Art. 1186. The condition shall be deemed fulfilled when

the obligor voluntarily prevents its fulfillment.a'z
Constructive Fulfillment of Suspensive Conditions. -

'l'he above article enunciates the doctrine of constructive fulfillment

ol suspensive conditions. In order that this doctrine can be applied,

il is, however, necessary that the obligor must have actually

plcvented the obligee from complying with the condition, and that
srrch prevention must have been voluntary or willful in character.
'l'hus. where the conditions which are imposed by a certain company
irr order that its employees will be entitled to retirement benefits can
rrr longer be complied with because the retirement or pension plan
rvirs willfully abrogated by a unilateral act of the Board of Directors
held that such conditions are deemed complied
'I l.lrc company, it was
rvilh in conformity with Art. 1186; consequently, such employees are
rrrrw cnl.it.led to retirement benefits.irr

727, Civil Code.

'rrArt. 873, Civil Code.

i'5Art. 1117, Spanish (li!il ( l,rl,,
il'Art. I l1il. Sprrnish { ivrl { irI

rl Ilsl'. ( r!rl (\rlt'

'A'l llllr. I r!rl (irl,
'l'hrl lrrrr: IIrrrIrrIr(r'| ,, vr 'l, lrrrrrrrr.lr; I'lrrl llsl
"n

'uArt I It1.1. ( livil ( itrll,

l
")..1

1186

.,.! t

Arts. 118?-1188

OBLIGATIONS

I)IFFERENT KINDS OF OBI,IGATIONS

Pure and Conditional obligations

must be noted, however, that the doctrine can be applied

only to suspensive and not to resolutory conditions. In the words of
the Supreme Court:

ability as well as the acquisition or effectivity of rights arising from

the obligation is suspended pending the happening or fulfillment
of the fact or event which constitutes the condition. It is but logical, therefore, that during the pendency of the condition, the obli
gee or creditor has only a mere hope or expectancy. This hope or
expectancy, however is protected by the law. This is evident from
the provision ofthe first paragraph of Art. 1188. Inasmuch as the
obligee or creditor has an expectant right to the eventual fulfillment
or performance of the obligation, it is but just and proper that the
law accords to him the right to avail of all remedies for the protection or preservation of such right. Thus, if the obligor has promised
in writing to sell a parcel ofland to the obligee upon the happening
ofa certain condition, and subsequently, before the fulfillment ofthe
condition, he changes his mind and finally decides to sell the land to
another person, the obligee can bring an appropriate action, such as
a petition for the issuance ofa writ ofinjunction, to prevent the sale
in order to preserve his right.

Arts. 1187-1188

It

"This provision supposes a case where the obligor

intentionally impedes the fulfillment ofa condition which would
entitle the obligee to exact performance from the obligor; and
an assumption underlying the provision is that the obligor
prevents the obligee lrom performing some act which the obligee
is entitled to perform as a condition precedent to the exaction of
what is due to him. Such an act must be considered unwarranted
and unlawful, involving per se a breach of the implied terms of
the contract. The article can have no application to an external
contingency which is lawfully within the control ofthe obligor."a!

Art, 1187. 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 treen nutually compensated.
If the obligation is unilateral, the debtor shall appropriate
the fruits and interests received, unless from the nature and
circumstances ofthe obligation it should be inferred that the
intention of the person constituting the sarne was different.
In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect or the condition
that has been complied with,rs
Art. 1188. The creditor may, before the fulffllment 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.l6
Effect of Suspensive Conditions Before Fulfillment, If
the obligation depends upon a suspensive condition, the demando'Taylor vs. fly Ti('llg, 4ll I'l'il 7l;lr
{5Art. I I20, Sprrnish {'ivil t irrlr.
{6Art. I l2l, Srnrnislr ( rvrl( ,r1,,.

'!' ',',xl'li'rl

l2ti

li'r''r

In the case ofthe obligor or debtor, it is also logical that during

the pendency of the condition, his obligation to comply with the
prestation which constitutes the object of the obligation is held in
suspense until the fulfillment of the condition. Or more accurately,
his obligation to comply with the prestation arises only if and
when the event which constitutes the condition is finally fulfilled.
Consequently, if he has paid anything by mistake during the
pendency ofthe condition, he can recover what has been paid.a'
Problem - Before thc war, the Phil Long f)istance Co.
(PLDT) adopted a pension plan fbr its employees by virtue of
which all employees who have reached the age of 50 yeam and
who have rendered 20 years or rnore service may be retired with
a pension. After the war, the Board ol Directors ofthe Company
passed a resolution abrogating the pension plan. Subsequently,
sixty employees who were affected filed a complaint against
the Company claiming monetary benefits under the pension
plan. The Company interposed the following defenses: (1) that
thc obligation to pay a pension to the plaintiffs is subject to
certain suspcnsive conditions; consequently, such plaintiffs
hirvt: no porsonalit.v to ask ft)r monetary benefits until after
srr'h conrlilions rrc lirllilL'd; {2) th:rt t:vt:n,{ranling without

1'AIl IItln, I'rr

:1.

ivrl (lrrl'.

t!'i

Arts. 1187-l I il8

DIFFERENT KINDS OF OBLIGATIONS Arts. 118? 1188

Pure and Conditional Obligations

OBLIGATIONS

admitting that they have, they are not entitled to such benefits

until after the conditions are lblfilled; and (3) that war

losses

had extinguished the Company's obligation to procced with the

pension plan. Ifyou are thejudge, how will you decide the case?
Reasons.

Ansuter The facts ofthe above problem are exactly the

same as those in the case of PLDT Co. us. Jeturian, et al.,97
Phil. 981, where the Supreme Court decided in favor of the
plaintiffs. For purposes of clarity, let us take up the defenses
advanced by the defendant company separatcly.

(1) The lst defense is untenable. While it is true that

when an obligation is subject to a suspensive condition, what
is acquired by the creditor is only a mere hope or expectancy,
nevertheless, it is a hope or expectancy that is protected by the
law. According to Art. 1188 ofthe NCC, the creditor may, before
the fulfillment ofthe condition, bring the appropriate actions for
lhe presorvation of his right.
(2)

The second defense is untenable. According to Art.

1186 of the NCC, the condition shall be deemed fulfilled when
the obligor voluntarily prevents its fulfillment. The act of the
Board of Directors ofthe Phil. Long Distance Co. in abrogating
the pension plan certainly falls within the sphere or purview of
this rule.

(3)

The third defense is also untenable. This is

because the defense of fortuitous event is available only

so

if the

obligation is determinate and not if the obligation is generic.

Here, the obligation is clearly generic since it involves the
payment of money.

From the fbregoing,

it is clear that the case should be

decided in favor ofthe plaintifis.

Effect of Suspensive Conditions After Fulfillrnent.

Once the event which constitutes the condition is fulfilled. the

obligation arises or becomes effective. The right of the creditor,
which, before the fulfillment of the condition, was a mere hope or
expectancy, is perfected. It becomes effective and demandablc. The
obligor or debtor, on the other hand, can thereafter be compelled to
comply with what is incumbent upon him.

fderrr; Retroactivity of cffcct.

'l'hr.rr. is, howcvcr, ;r
very important precept or prinr.iplo wlrir.lr rrrrrsl lrr. rrolt,rl orrcl llrc
condition upon which lho olrlig:rliorr rlr.1x'rrrls rs lirrrrlly lirllillr.rl. 'l'his
l

:ll{

refers to the retroactive character of the effects ol the fulfillment of

the condition.l3 The basis of this precept is simple. The condition
which is imposed is only an accidental, not an essential, element of
the obligation. Consequently, once the event which constitutes the
condition is fulfilled thus resulting in the effectivity ofthe obligation,
its effects must logically retroact to the moment when the essential
elements which gave birth to the obligation have taken place and
not to the moment when the accidental element was fulfilled.as

The principle of retroactivity can only apply to consensual

contracts. It can have no application to real contracts, such as
deposit, pledge or commodatum which can only be perfected by
delivery. Neither can it have any application to those contracts in
which the obligation arising therefor can only be realized within
successive periods or intervals, such as lease, hire of service, life
annuity, and similar contracts.s"
The application of the principle of retroactivity must, however, be tempered by principles ofjustice and practicability. The law,
therefore, has provided for certain Iimitations which must be complied with in the application of the principle.

Idern; id.

- When the obligation

- In obligations to give.
the parties, the fruits and

imposes reciprocal prestations upon

interests during the pendency of the condition shall be deemed

to have been mutually compensated. Thus, if A had obligated
himself to sell a certain parcel ofland to B for P100,000 subject to a
condition ofa suspensive character, and such condition was fulfilled
two years after the perfection ofthe contract, a literai application of
the principle of retroactivity would have the effect of compelling A
to deliver to B not only the land, but also all of the fruits which he
rnay have gathered or received therefrom during the period from the
t ime of the perfection of the contract to the time of the fulfillment
ol the condition; and as far as B is concerned, it would have the
cfl'ect of compelling him to pay to A not only the P100,000, but also
lhc interest thereon during the same period. But because of the
rt'ciprocal character of the obligation, the law, as a matter ofjustice
rrnd convenience, considers the fruits and interests as the equivalent

'NArl ll8';. {lrvrl(l,xl'.. I't'

;l;1.1

llllf'

i"8 M,'rr, ,,,' i'llr l,il , Itk. I. I' rl:l

'"'l I'1,Irrol ,rrrrl lirtx r l :ll':l illrt

l:r1l

Art. 1189

Art.

OBLIGATIONS

DIFFERENT KINDS OF OBI,I(JA'fIoNS

Pure and Conditional Obligai.ir)ns

of each other. In other words, they are deemed to compensate each

other mutually.sl

thing is lost when it perishes, or goes out of commerce' or

disappears in such a way that its existence is unknown or it

When the obligation is unilateral, the debtor shall appropriate

the fruits and interests received, unless from the nature and
circumstances of the obligation it can be inferred that the intention
ofthe person constituting the same was different. This rule is based
onjustice. Since the obligor or debtor does not receive any equivalent

or valuable consideration from the obligee or creditor when the

obligation is unilateral, it is but logical that he shall be entitled to
all ofthe fruits or interests ofthe thing pending the fulfillment ofthe
condition, unless there is a contrary intention on his part. Thus, ifA
had obligated himself to give to B a parcel of land if the latter gets
married to C, and the condition is fulfilled only after two years from
the time ofthe constitution ofthe obligation, he shall be obligated to
deliver only the land and not the fruits which he may have gathered
or received therefrom during the pendency of the condition.52

Idem; id.

In obligations to do or not to do.

In case of

personal obligations, the courts will have to determine in each case

the retroactive effect of the condition that has been complied with.
This duty ofthe courts includes the power to determine whether the
effects of the fulfillment of the condition shall retroact to the very
moment of the constitution of the obligation or only to a specified
date before fulfillment. It can even include the power to deterrnine
whether or not there will be any retroactivity of effects.s3

Art. ff89. 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
improvernent, loss or deterioration of the thing during the

pendency of the condition:

(f) If the thing

is lost without the fault of the debtor,

the obligation shall be extinguishedi

(2) If the thing is lost through

he shall be obliged to pay damages;

518

Manresa,5th

"Ibul.,

p.

lil., llk l. t' t) :lil4

itll,i,

:1:15

Ir)

the fault of the debtor,

ie understood that the

it

1189

cannot be recovered;

(3)

lYhen 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 betv/een the rescission of the obligation
and its fulfillment, with inderrrnity 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) Ifitis irnproved at the expense ofthe debtor, he shall
have no other right than that granted to the usufructuary.sa
Effect of Loss, Deterioration or Improvement.

What

is the effect of the loss, deterioration or improvement of the thing

which constitutes the object of the obligation during the pendency
of the condition? This question is answered by the rules which are
stated in Art. 1189.

These rules are natural consequences of the principle of

retroactivity which is embodied in Art. 1187. They refer only to
conditional obligations to give a determinate thing. Although the
loss, deterioration or improvement occurs during the pendency of
the condition, such rules are predicated on the fullillment of such
qrnditions.

Idem; Losses. - Loss of the thing due must be understood

in its technical, not vulgar, sense. Thus, according to the Code, it is
understood that the thing is lost: (1) when it perishes; or (2) when it
gocs out of commerce; or (3) when it disappears in such a way that
il.s cxistence is unknown or it cannot be recovered.s5 It is evident
lrom an examination of the first and second rules stated in Art.
llllg that the effect of the loss or destruction ol the thing which
constitutes the object of the obligation shall depend upon whether
l.hc loss or destruction occurred without the fault of the debtor or
l.lrrough his lhult. If the thing is Lrst, without rrnv fhult of the debtor,
"'Art Il:l:f Stut'relr ( r!rl ( ,"1,'
'"4'l IlNll. N,, :l.l r!rl ( ,!1,

ItI

Art.

OBLIGATIONS

I)I F'I.'I]IIENT KINDS OF OI]I,I(iATIONS

Prrrc and Oonditional Obligations

the obligation is extinguished. However, if it is lost through his

fault, the obligation is converted into one of indemnity for damages.
The first rule is in conformity with fu|. 1262 of the Code.

loss or deterioration of the thing during the pendency of the

Art.

I 189

Idem; Deteriorations. - The rules contained in Nos. 3

and 4 of Art. 1189 are self-explanatory. If the thing deteriorates
without the fault ofthe debtor, the impairment is to be borne by the
creditor. However, if it deteriorates through the fault of the debtor,
the creditor may choose between bringing an action for rescission
of the obligation with damages and bringing an action for specific
performance with damages.
Idem; Improvements, - If the thing is improved by its
nature or by time, the improvement shall inure to the benefit of
the creditor. Thus, in case of natural accessions, such as alluvion,
avulsion, abandoned river beds, or islands which are formed, the
accession shall inure to the benefit of the creditor. However, if the
thing is improved at the expense of the debtor, he shall have no
other right than that granted to a usufructuary. Consequently,
the debtor cannot ask reimbursement for the expenses incurred
for useful improvements or for improvements for mere pleasure;56
he can, however, ask reirnbursement for necessary expenses.s?
Although he cannot ask the creditor to reimburse his expenses for
useful improvements and improvements for mere pleasure, he has
the right to remove such improvements, provided it is possible to
do so without damage to the thing or property.ss He may also set off
the improvements he may have made on the property against any
damage to the same.se

Problem

Supposc that an obligation is subject to a

suspensive condition. but before the fulfillment ofthe condition
the object of the obligation was lost or it has deteriorated, or
improvements were made thereon, what is the effect of such
loss, or deterioration, or improvements ifthe condition is finally

fulfilled?

Ansuer - When the conditions have been imposr.d with

the intention of suspending the efficacy of an obiigation to give,
the following rules shall be observcd in casc ol the inrprovt:rncnt,
56Art. 579,

Civil (l,xlt

5NArt. 579.
s'gArl. I'rfl{).

(livil ( ixl,

190

condition:
( 1)
If the thing is lost without the fault of the debtor, the
obligation shall bc extinguished;
Q) Ifthe lhing is lost through the fault ofthe 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 thc thing deteriorates without the fault ofthe

debtor, the impairment is to be borne by the creditor;
(.4) Ifit deteriorates through the fault ofthe debtor, the
creditor may choose between the rescission ofthe obligation and
its fulfillment, with indemnity for damages in either case;

(5) Ifthe thing is improved by its nature, or by time, the

improvement shall inure to the benefit of the creditor;
(6) lf it is irnproved at the expcnse of the debtor, he
shall have no other right than that granted to the usufructuary.
(Art. 1189, NCC.)
Probl.em Are the above rules also applicable if

the

condition is resolutory?
Ansuter - Yes. lArt. 1190, NCC.) However, in applying
these rules, the "debtor" is the person obliged to return the
object of the obligation in case of fulfillment of the condition,
while the "creditor" is the person to whom the thing or object
must be returned.

Art. 1190. When the conditions have for their purpose

the extinguishment ofan obligation to give, the parties' upon
the fulfillrnent 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
lrrid down in the preceding article shall be applied to the
party who is bound to return,
As for obligations to do and not to do, the provisions of
thc second paragraph of Article 1187 shall be observed as
rogtrds tho offcct of thc cxtinguishmont of the obligation.60

5'Art. 546. Clivil (l{,dl

('rvrl ( rrlr.
I

tit

Art. 1190

DIFFERENT KINDS OF OBLrcATIONS

Pure and Conditional Obligatnrls

OBLIGATIONS

Effect of Resolutory Conditions Before Fulfillment.

that in obligations with a resolutory condition, the

right which the obligee or creditor has already acquired by virtue of
the obligation is always subject to the threat of extinction during the
pendency ofthe condition, the obligor or debtor is placed in a position
which is very similar to that ofthe obligee or creditor in obligations
with a suspensive condition. Like the latter he has also a hope or
expectancy during the pendency of the condition. This is so because
if and when the event which ct-,nstitutes the resolutory condition
happens or is fulfilled, he will certainly reacquire whatever he may
have paid or delivered to the obligee or creditor. Consequently, the
same right which is available to the creditor during the pendency
of the condition in obligations which a suspensive condition is also
available to the debtor in obligations with a resolutory condition.
Since the latter has a hope or expectancy ofreacquiring whatever he
may have paid or delivered to the creditor, this hope or expectancy
must be protected. Hence, commentators are unanimous in holding
that the right which is explicitly recognized in the first paragraph
of Art. 1188 is also available to the debtor in obligations with a
resolutory condition. Although apparently this right is available
only to the creditor in obligations with a suspensive condition,
.justice demands that the rights must also be available to the debtor
in obligations with a resolutory condition during pendency of the
Because ofthe fact

said condition.6'

Effect of Resolutory Conditions After Fulfillment. As noted in the preceding sections, rights which are vested in the
obligee or creditor in obligations with a resolutory condition are
always subject to a threat of extinction during the pendency of the
condition. If the resolutory condition is not fulfilled, such rights are
consolidated; in other words, they become absolute in character.
If it is fulfilled, such rights are extinguished altogether; in other
words, whatever may have been paid or delivered by one or both of
the parties upon the constitution of the obligation shall have to be
returned upon the fulfillment of the condition. There is, therefore, a
return to the status quo.(;2

Idem; Retroactivity of effect. - [t is evidcnt from rrn

examination ofthefirst pirragrirph ol Arl. II90 l.h:rl.l.hc rt'troactivity
6i8 l\'lanrl sll.

I)ll) I,lrl .

llk I l, :i lii

1190

of effects of a resolutory condition is more patent than that of a

suspensive condition, notwithstanding the fact that here there is
no positive declaration of the principle as in the case of the first
paragraph ofArt. 1187. This is so because, unlike Art. 1187 which
provides for certain exceptions or limitations to the principle of
retroactivity, here there are no exceptions.

in

obligations to give, upon the fulfillment of the

resolutory condition, the parties shall return to each other what
they have received. This rule is applicable whether the obligation
is reciprocal or unilateral. There are no exceptions or limitations
similar to those provided for in suspensive conditions. The basis
fbr the difference, according to Manresa, lies in the fact that in
obligations with a resolutory condition, the fulfillmentofthe condition
and its retroactivity have the effect of signifying the nonexistence of
l.he obligation and what is nonexistent must not give rise to any
cffect whatsoever. Consequently, the fiction of retroactiyity must
be carried to its full consummation. Therefore, every vestige of the
obligation must be effaced as much as possible through the process

Thus,

of restitution.63

However, the process of restitution must be accompanied by a

consequence which is not stated in Art. 1190, but which is required
by the most elementary concept ofjustice. According to Art. 443 of
l.he Code, 'he who receives the fruits has the obligation to pay the
{'xpenses made by a third person in their production, gathering,
irnd preservation." Consequently, when a party to the obligatlon is
obliged to return whatever he may have received including the fruits
l.hereof to the other by reason of the fulfillment of the condition, he
lras the right to demand reimbursement for all expenses which he
rnay have incurred in the production, gathering, and preservation of
lhe said fruits.6a

In obligations to do or not do, the retroactivity of effects of the

rcsolutory condition shall depend upon the discretion of the courts,
rrs in the case ofsuspensive conditions.

Idem; Effect of loss, deterioration or irnprovement. ln case of loss, deterioration or improvement of the thing during
llrc pendency of the condition, the rules laid down in Art. 1189
"'/1,,./ , r,l! :145 :14l;

t:t.t

Art

l:lh

Art.

OBLIGATIONS

1191

are applicable. Consequently, what had been said regarding the

effect of loss, deterioration or improvement ol the thing during the
pendency of a suspensive condition once the condition is fulfilled
are also applicable here. However, in the application of the rules
stated in Art. 1189 to obligations subject to a resolutory condition,
the "debtor" is the person obliged to return, while the "creditor" is
the person to whom the thing or object must be returned.

Art. llgf. 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 fulfillrnent

and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even
after he has chosen fulffllment, if the latter should become
impossible.

The court shall decree the rescission claimed, unless

there be just cause authorizing the ffxing 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.65
Concept of Reciprocal Obligations. Reciprocal obligations
are those which are created or established at the same time, out of
the same cause, and which result in mutual relationships ofcreditor
and debtor between the parties. The outstanding characteristic of
this type ofobligation is reciprocity arising from identity ofcause by
virtue of which one obligation is a correlative of the other. Thus, in
a contract of sale, the obligation of the vendee to pay the price is a
correlative of the obligation of the vendor to deliver the thing sold;
in a contract of lease, the obligation of the lessee to pay the rental
or price of the lease is a correlative of the obligation of the lessor to
permit the use by the lessee of the thing leased. Allhough rcciprocal
obligations are bilateral in character, they must not be conlused
with those obligations in which thc Jrartics rrrc nrutuirll.y, but not
reciprocally obligated, rrs wht,rr ir 1x'rsorr is thc rlt,blor ol iurolhcr by
"rArt. I I:j L St'j'Drel' t

)ITIFERENT KINDS OF OI]I,I(iATIONS

Pure nnd Conditional Obligatrons

1191

virtue of a contract of kran and, at the same time, the creditor by

virtue of a contract of agency.6'i

Tacit Resolutory Condition. - Because of the fact that in

reciprocal obligations the obligation of one party is the correlative
ofthe obligation ofthe other, the Code in the first paragraph ofArt.
I 191 has established the principle that if one of the parties fails to
comply with what is incumbent upon him, there is a right on the
part ofthe other to rescind (or "resolve" in accordance with accepted
translations ofthe Spanish Civil Code) the obligation. This condition
is implied as a general rule in aLl reciprocal obligations. Since it
has the effect of extinguishing rights which are already acquired or
vested, it is resolutory in character.
Idern; Necessity

ofjudicial action. -

The right to rescind

or resolve the obligation is a right which belongs to the injured party

rrlone.6t However, it is essential that it must be invoked judicially.63

'l'his is evident from the provision of the third paragraph of Art.

I 191 which states that the court shall decree the rescission. unless
l.here be a just cause authorizing the fixing of a period.6e Therefore,
t.he mere failure of a party to comply with what is incumbent upon
him does noL ipso jure produce the rescission or resolution of the
rrhligation. In other words, the party entitled to rescind must invoke
lrrdicial aid by filing the proper action for rescission. Consequently,
rn a contract of sale, the fact that the vendee failed to pay the
purchase price of the thing sold does not mean that the vendor can
lrrst. take possession of the thing which had already been delivered
t. the vendee. He must invoke judicial aid by filing an action for
rcscission or resolution of the contract if he so elects.to As stated by
I lrt, Supreme Court, it is the judgment of the court and not the mere
u ill ofthe vendor which produces the rescission ofthe sale.?1

It must be noted, however, that where the contract itself

,rrrrtains a resolutory provision by virtue of which the obligation
rrrirvbe cancelled or extinguished by the injured party in case of
'"ll Mi,Drcsr.5lh l)d., Ilk 1. pp. ll48:149.
"Mrl(r)s vs. l,o1x'2, {i I'hil.206; I}osque vs. Yu Ohipeco. 14 Phil.95.
"'(lrrovrrrrr vs I'irs,,,,,1,

l2l'hil

:l

I I i l,ls.Iel

vs.

Pa

ndo, 76 Phil. 256; Republic

rl,, l'hrl vs ll,slritrrl Srrrr'lrrrrrrrll l)ios:rrrrl lhrrl.l7{)lI:(lrrz. 1833.

"'l'lsr rrIl:r vs l':rrrl,, /(i I'hrl llSl;
"()(r.,,'. l1',./ & ( ,, vs IrrI'.rl,'I',,'','I Ii,,rkrn,t (','rt',:17 l'hr1 1;ilI

r\ rl r',"1,

l:l{i

Ad.

lri

of

Art I I9l

oBI,IGATTONS

DIFFERENT KINDS OF Ot]I,I( iAl'I(INS

Purc and Conditional Obligatrrn;

breach, judicial permission to cancel or rescind the contract is no

longer necessary.'-'In Taylktr us. Uy Tieng Piao,43 Phil.. 873, the

Code), while the second is governed by the Maceda l,aw (Rep. Act

defendant was expressly given the right to terminate plaintiffs

employment should the machinery expected fail to arrive in six
months. It was held that the defendant had the right to cancel
the contract. In Caridad Estqtes, Inc. us. Santero, 71 Phil. 114, a
provision granting the vendor the option to recover possession of
the property sold if the vendee should fail to make the necessary
payments was also recognized and given full effect. The only
limitation on the exercise of the right to terminate a contract is
that it must not be contrary to law, morals, good customs, public
order or public policy.73 In the recent case ofSlsoz us. CA(161 SCRA
339), the Supreme Court in deciding whether the rescission of the
contract to sell a subdivision lot after the lot buyer has failed to
pay several installments was valid, the Court said: judicial action
for the rescission of a contract is not necessary where the contract
provides that it may be cancelled for violation ofany ofits terms and
conditions. Consequently, Art. 1191 ofthe Civil Code can be applied
only to reciprocal contracts which contain no resolutory conditions.
The use ofthe word "implied" in the article supports this conclusion.
The right to rescind is "implied" only if not expressly granted; no
right can be said to be implied if expressly recognized.?a

Idern; Nature of Breach. - What must be the nature of

the breach which will entitle the injured party to file an action
fbr the rescission of the obligation? This question was answered
by the Supreme Court in the case of Sozg Fo & Co. us. Hawaiian
PhiLippine Co.?6 The facts of this case are as follows: Plaintiff and
de1'endant had entered into a contract whereby the latter bound
itself to deliver to the former 300,000 gallons of molasses within a

Art. I l9l

No.6552).

certain period, payment to be made upon presentation of accounts

at the end of each month. It appears that a request for payment of
accounts for molasses delivered was sent to the plaintiffin January,
1923. Instead of paying at the end of said month, plaintiff defaulted
and paid only on February 20, 1923. Thereupon, defendant gave
notice to the plaintiff rescinding the contract for failure to pay at the
stipulated date. Subsequently, the plaintiff commenced this action
lo recover damages from the defendant for breach of contract. The
rluestion, therefore, which must be resolved is whether the defendant
rompany had the right to rescind the contract or not. The Supreme
( lourt held:
"The terms ofpayment fixed by the parties are controlling.
The time ofpayment stipulated in the contract should be treated
as of the essence of the contract. Theoretically, agreeable to
certain conditions which could easilybe imagincd, the Hawaiian-

It must also be noted that Art. 1191 cannot be applied to

contracts of partnership where one of the partners fails to pay
the whole amount which he has bound himself to contribute to
the common fund. In such a case, the provisions ofArts. 1786 and
1788 would be applicable. This is so because Art. 1191 refers to
the resolution of reciprocal obligations in general, while Arts. 1?86
and 1788 refer to contracts of partnership in particular. And it is
a well-known principle that special provisions prevail over general

Philippine Co. would have the right to rescind thc contract

& Co. But actually, there is

here present no outstanding fact which would legally sanction
the rescission ofthe contract by the Hawaiian-Philippine Oo.
because of the breach of Song Fo

"The general rule is that rescission will not be permitted

fbr a slight or casual breach of lhe contract, but only for such
breaches as are subsiantial and fundamental as to defeat
the object of the parties in making the agreement. A delay in
payment for a small quantity of molasses for some twenty days

provisions.?5

It must also be noted that the above article cannot be applied to

sales of real property or sales ofpersonal property by instnllments.

The first is governed by the Recto Law (Arts.

2Hanlon vs. Hausermann rrnd In'rrrn, 1()

I'lrl

?1X;,

l)(

vs. Tan. 99 Phil. 1034.

'3De la Rama Sl.l']rnrsl,it' (',, !!'l'J,,' l,1rl'l||l lr):t.l
?aSee also Froil:rn vN IIIIII)II'.I'IlI Slrrlrl,rrrs t ir
, t:tS{

"Sancho vs

Lizrr

l!r, I'l'

I'l"l

l;l,l

l:ll1

1,11.i.1

Lr

to

1.186,

is not such a violaiion ofan essential condition ofthe contract as

(livil

warrants rescission for nonperformance. Not only this. bul the

Hawaiian-Philippine Co. waived this condition when it arose
by accepting pzrynrt-'nt of tht'ovcrduc accounts and continuing

l|r'r'r Stor"rshit, (i,

l{A:t;'l;

"4? I'l"l li:fl l'irr.rrlso VrlLrrrttr.vrr \,, \'o1,, (ili

',rv(,fsr'l

l.\!!l li'rl, \ri (,'rrrt

,,1

At,t!rrl,, ilri S('liA

t;t!l

Art

DII'I'ERENT KINDS OF ORJ,I( iA'I'IONS

OBLICATIONS

1191

A.t

1191

Pure aud Conditionat Obli ja:rtrorrs

with the rights and obligations oflesscrrs and lessees. ln the tirst
paragraph of Article 1555 (now Art. 1657), iL is declared to be

with the contract. Thereafter, Song Fo & Co. was not in default
in paymenl so that the Hawaiian-Philippine Co. had in reality
no excuse fbr writing its lctter of April 2, 1923, cancelling the

the duty ol the lessee to pay the price ol the lc.rsc in the munner
agreed upon. In Article 1,556 (utut Art. 1659), lhe lailure of the
lessee to comply with this obligation is decl;rred lo be a found frir
the rescission of the contract and the recovcry of damages, or
the latter only, leaving the contract in force lt will thus be seen
that the lessor is permitted to elect betwccn the two remedies
of (1) rescission, or resolution, with damages and (2) specific
performance, with damages."t"

contract.
"We rule that the appellant has no legal right to rescind
the contract ol sale because ofthe failurc ofSong Fo & Co. to pav
for the molasses within the time agreed upon by the parties."

I\

Delto Motor Corp. us. Gentino (770 SCRA 29), the Supreme
Court reiterated the rule that rescission will be ordered only where
the breach complained of is substantial as to defeat the object of
the parties in entering into the agreement. It will not be granted
where the breach is slight or casual. Thus, in a subsequent case of
Ang us. CA (170 SCRA 2863) it was held that while it is true that in
reciprocal obligation, such as the contract of purchase and sale, the
power to rescind is implied and any ofcontracting parties may, upon
non-fulfillment by other party of his part of the obligation, resolve
the contract, rescission will not be permitted for a slight casual
breach of the contract.

Idem; Alternative remedies of injured party, - In case

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. These remedies are alternative, not cumulative; in other
words, the injured party cannot seek both.?? Thus, in a case where
the lessee was unable to pay rentals for two months, holding that
the lessor has the right to rescind the contract oflease, the Supreme
one of the parties should not comply

Corrrt declared:

"In Article 7724 lnou Art. 1191) of the Civil Code it

is

declared that an obligation may be resolved ifone ofthe obligors

fails to comply with that which is incumbent upon him; and
it is declared that the person prejudiced may oltxrt hetween
the fullillment of the obligation (speci6c performance) and its
resolution, with compensation for dnmagcs and paymont ol'
interest in either case. This gt-'ncrrrl principlt' is srrbstantially
reproduced in the special provisions rrl thc (livil (ixlc dc:rlirrg

rrSanJuanvs.Oolav.2{il'hil i!:l8i llr'f, !s ,Jl r)t,J. l1l I'hrl !l: Il,:rr,!k v\ lhtll
rs !lvrr.L.7l l'hrl :ll.li
Manufacturing (lo. {iii I'hil :llL. Nlrl!|rl,r'r' I,;sl:rlr'. l
Ramirz vs. (lorr rt 0l nl)t!!rlr.slllll' l;r/ / /1r.l rNli,vs l,llr.l'4.5:l{)ll (;r7:lott;
Alberl vs Ittriv I'rtlrlrslrrrrs{,,. I{rl l'lrl llll,l
|.10

be observed that even after the injured party

such fulfillment shouldbecome impossibl,
fulfillment
and
has chosen
he can still seek the rescission or resolution of the obligation.?'g It
must also be observed that the right to choose between fuifillment
and rescission is not incompatible with an alternative prayer for
fulfillment or rescission in the complaint.30 As a matter of fact,
even if the plaintiff apparently seeks to avail of both remedies, the
presumption is that he is leaving the matter to the sound discretion
ofthe court.3r
Idem; id. - Darnages to be awarded. - Whether the injured
partv chooses specific fulfillment or rescission, the rule is that he
can recover damages.s'In estimating the daDages to be awarded in
case of rescission, only those elements of damages can be admitted
that are compatible with the idea of rescission; and of course, in
estimating the damages to be awarded in case the injured party
elects specific performance, only the elements of damages can be
admitted which are compatible with the idea ofspecific performance.
It follows that damages which would be inconsistent with the idea of

It must, however,

specific pet{ormance cannot be awarded in an action where rescission

is sought.83 Thus, in the case of the rescission of a contract of sale
lbr failure of the purchaser to pay the stipulated price, the seller is
t'ntitled to be restored to the possession of the thing sold, if it has
rrlready been delivered. But he cannot have both the thing sold and

rsRios vs. Jacinto. .l dl., 49 Phil. l.

r'Art. 1191, par.2, (livil (hl,
-i'4'IirL nl.ino, Civil (lodc, l9lni Fil.. p I72

srMindrrnrro

I'n'sp..tins Ass. Inc.

:it,55
*rn

rl lllll t,rt

:1.

vs. (iold0rr

('ivil(l(!L

"'llr,!, \,, .l,r rrl,' ,l.//.

111

l'l'rl /

l.lr

(li,l, Mini tl (i'. (1A 48 (Xl

Gaz.

Art. l19r

I)I!'!'ERENT KINDS O!' oI]LI(]A'I'IONS

OBLIGATIONS

the price agreed upon for the resolution or rescission ofthe contract
has the effect ofdestroying the obligation to pay the price. Similarly,
in case of the rescission of a contract of lease, the lessor is entitled
to be restored to the possession of the leased premises but he cannot
have both the possession of the leased premises and the rent which
the other party had contracted to pay. The termination of the lease
has the effect ofdestroying the obligation to pay rent for the future.sr

Idem; Judicial discretion to decree rescission. - According to the third paragraph of Art. 1191, the court shall decree the
rescission claimed, unless there is a just cause authorizing the fixing of a period. It is clear lrom this provision that the right of the
injured party in reciprocal obligations to rescind in case of failure of
the other to comply with what is incumbent upon him is not absolute
in character. This is so because the court is given the discretionary
power to fix a period within which the obligor in default may be
permitted to comply with what is incumbent upon him.85 It must be
noted, however, that this rule cannot be applied to reciprocal obligations arising from a contract oflease. This is so because such obligations are governed by the provisions ofArt. 1659 ofthe Code and not
by those ofArt. 1191, and although Art. 1659 is practically a restatement of Art. 1191, and there is, however, a difference, for whereas
under Art. 1191 courts have the discretionary power to refuse the
rescission of contracts if in their judgment the circumstances of the
case warrant the fixing of a term within which the obligor or debtor
may fulfill his obligation, under Art. 1659 there is no such discretionary power granted to courts.86

Idem; Effect of rescission, - When an obligation has been

it is the duty ofthe court to require the parties
to surrender whatever they may have received from the other; in
other words, the parties must be placed as far as practicable in
their original situation.sT This should, however, be understood to
be without prejudice to the liability of the party who was unable
to comply with what was incumbent upon him for damages.
Thus, where a contract of sale of a certain lot was rescinded bv
rescinded or resolved,

*Ibid.

for several
the vendor because of the failure of the vendee to pay
contains
contract
the
since
that
heltl
-r"iiiv i"J.iL;ents, it was
of
of
the,failure
cvent
the
in
r" p."i"i"" ""ttt"rizing the vendor,
monthly
stipulated
the
of
payment
,h";;";;; t., co.,tinuel,t the
him' the parties
i"i"ff-""t", to retain the amounis already paid tooriginal
situation
to
their
practicable
as
rfr""n f" restored as far
thinss
of
the
return
th-e
bv
orderins
onlv
;;;l-";; ;;;pptoximated
prrce
oi
the
which are the object ofthe contract with their fruits and
of
the
of the institution
*iii'it"- r*"t""t".: computed from the datepartial
in
character'3"
rrr" rescission, however' may be

""ii""!;

to
Idern; id. - Effect upon third persons' - According
be
shall
rescission
of
decree
the
1191,
fut.
the fourth paragraph of
persons who
."4"t"i".a t U" *iihout prejudice to the rights of thirdand
1388 and
trut" u"qnt"a tfte thing in accordance with Arts' 1385
ttr" lriottgugu Law. Consequently. the -rescissiol qf a c1ntract,1ala
rs no longer rn
no longeibe demanded when he who demands it

ttt,l..t whatever he may be obliged to restore; neither can

contract is
ii i" a"."ta"a
-f"g"it when the thing which is the object of the
not act in
did
who
person
h the possession of a third
,,f.""av
nn"iiiJrl to

to
case, the onlv remedv of the in-jured partv is
conveyance
""ch
or
the
transfer
for
oroceed against the party responsible
the thing
i;.;;;;**.'i Ho*"u"t, ir tnu third person had acquired
Iffor
propertv.
go
the
after
stlll
partv
can
i;b"d i;l-th, the injured
of
remedv
onlv
the
recovered'
be
.to longer
;;;;;;il;,hlni.u.t
had
who
person
third
the
against
proceeJ
tn" in;u.ed party is to
rrcted in bad faith for damages.s'

ir"-;;;ith.ili;

Problem

l,l:t

What is the effect

if

one of the obligors in

is incumbcnt
reciprocal obligations should not comply with what
him?
upon

is implied in

- 'lhc power to rescind obligations

ones. in case one of the obligors should not comply

Ansuer

reciprocal
with what is incumbent uPon him

'l'he injured pafiy may ehoose between the fulfillment and

rtf
the rescissiJn of t-he obligation, with the payment damages
'M:rrrl:rI

& Co. vs. Inl'rnrllorlllI ll'nkin|'| (i,rp., :17 I'hil :l{;l: KrPis:rnrrrr
Banahaw vs. Dejarmc. 5,5 l)hil lllllt, l\rr.r'lo vr ( io Yr' l"'r, {? ( )lI ( l /. :(i.l
'6Mina and Ilacalln vs Ilxlrrllrrr.z, t 'A ll) ()ll {;lz lit"
*rPo Parurr vs Sir'*u''ll/r', ,l1r I'l',1 .lrtl
35Ocejo, Perez

Art. I I91

I'rrrc and Conditional Obligati(ns

rr:r

I:srirtr',

.,t,,,,t;,,,,r v, l'.

''Art

lrr' v' Mrrrtl Tl I'lrrl :141

truj r.( 4.:17(,ll (i.'/ :j l:r'l

t;trii!, ( rvil ( itrl'

"Art l:t88. r 'r!rl ( 'r!l|.

I

.t:t

Art.

1191

OBLIGATIONS

DIFFERENT KINDS OF OBI,I(IATI0NS

Pure and Conditional Obligations

in elther case. He may also seek rescission, even

after he has
chosen fulfillment. if the latter should f,*"-"-irnp"""jli"." "'"
The court shall decree the rescission, unlcss
there be
cause authorizing the fixing ofa period.

just-

"

This is understood to be without prejudice to

the rights
of- third persons who have acquired the ,f,ing.
i"
u""o.i"".""
w_ith Articles t 38b and 1388 and th"
M"dg;;;i;. ;;;'\

,';;,

NCC.)

Plob-len.

A sold a parcel ofland to B for p20,000. In the

, , sate, there.is
a sripulat ion rhat the purchase price shall
?1
io:eo
De pard on a certain date and that in
case offailure to pay on
such a date, A can rescind the contract. Suppose
that B iJs to
p,ay^on the date stipulated in the contract,
is Article 1f9l ofthe
NCC applicable? Why?

Art. 1191 is not applicable. Where the contract

.
itself-Answer
contains a rosolutory provision by
of *ti"t it"
"i"tu"
oDllgatron may be cancellcd or extingxishcd
in case of breach,
judicial permission to rescind the cr)ntract
is no longer necessarv.
! Hanlon_us. Hausermann,
a0 phit. 796: De io R;;; S';;i.Jt';
Co. us. Ton,99 phil. IOJ4.,The use of the word
imlkd;;ffi;
article supports this conclusion. The rigf,t t"
expressly granted: no right"can U"""""Ua'i";i_pfi"i;
t" U" iripiiJa
,ojrly_ifnot
recognized. Consequently. in the ".ta
instant
case, Art.
1t,l1pl""",V
I tyl rs not applicable. The rule that is
appiicable is founa in
Art. 1592 under the law on sales.
_

- Problem - L leased a house to J. The contract stipulates

that in case of non-payment of the rent, L can eject
f, i,itir""t
court action. J defaulted for iwo months. a"
him. Can J claim damages because the ,unr,rr"iutiorr'of
" """rft, i fr-iJiii
";""iJ

rn court as stipulated in the contract is void? (19?Z)

. Answer - J cannot claim damages because the renuncia_

tion ofhis day in court as stipulated in1f,"
-.,."", i" ""ia.1."1,
NCC. in reciprocal obligations there
i" ut*uy" u tu"ii
:-i1:..rh. condirion
rhar-ifone party is unable ro comply wirh
l:::l".rry
wnat ls tncumbent upon him. the injured party
has thc power
to rescind the obligation. (Art. I191..)fni" i" iuit
in ti.
law on lease. (Art. 1659.).frue also, it is rr *nf f_o,ttl,,a
"utuJ
the injured.party-must invokr..jrrriir.rrrl ,,,,1 B,rf rh,.n, "uf,,ifl,,i
rtrr" rtl,,
can De apptled only to n r.{s(.whr.r| thr.,,lrlrgrrlro,l
rs srk.nt with
reapect to lhe powt'r tl' rr.{r.in{l l'lrI ri4lrt to
rr.scinrl ir irrrDlilrl
orly if not oxprosslt *rrrtrrl. ,,,, r',gl,t ,.,,r, f, .*,,,A i,, fr,.
,,,,i,ii,.,i
rl exprr,sslv rrr.ogrrrtr.rl 'lLr- rr rrlso wr.ll s| Lrl

case, the right of L to eject J without a court action in case of

non-paJament of the rent was expressly recognized in the contract itsell What L did was merely to enlbrce what was agreed

upon.

Problem - (a) Are the provisions ofArt. 1191 ofthe New

Civil Code applicable to obligations arising from contracta of
lease or of partnership? Explain.

(b) What must be the nature or character ofthe breach

which will justify the injured party in bringing an action either
for fulfillment of the obligation plus damages or for rescission
plus damages?

(a) In the case of obligations arising from a

of lease, what arc applicable are the provisions of Art.

Answer
contract

ofthe New Civil Code and not those ofArt. 1191. Although
1659 is practically a restatement of Art. 1191, yet there
is a difference. Under Art. 1191, courts have the discretionary
power to refuse the rescission of contracts if in their judgment
the circumstances ofthe case warrant the 6xing ofa term within
1659

Art.

which the obligor may fulfill the obligation, while under Art.
1659, there is no such discretionary power granted to courts.
(Mina and. Bacalla

us. Rod.riguez, CA, 40

Off. Gaz. 65.)

In the case of obligations arising from a contract of

partnership, as a general rule, Art. 1191 is applicable. However,
this article cannot be applied where one ofthe partners fails to
pay the whole amount which he has bound to contribute to the
common fund. This is so because in such case Arts. 1786 and
1788 of the NCC are applicable. These provisions are particular

they prevail over the general

provisions ofArt. 1191 which refer to the resolution ofreciprocal
obligations in genetal. (Sancho us. Lizarraga, 55 Phil. 601.)
provisions. Consequently,

(b) The general rule is that rescission will not be permitted for a slight or casual breach of the contract, but only for
such breaches as are substantial or fundamental as to defeat the
object of the parties in making the agreement. Consequently, a
delay in payment for a small quaniity of molasses for some 20
days is not such a violation of an essential condition as warrants rescission for non-performance. (Song Fo us. HautaiianI'hilippirtt'(\t.,17 Phil. ll2l: Villanueutr rs. Yuht, L-12985, Dec.
29, 1959: llnuu'rsttl Llxxl (\n'p. r,s. (\nrt of Aplx'als, .13 SCRA
l.)

lrr tlr,,rrrxtl|rrl

I 4.1

Art.

t4h

1191

Arts. 1192-l193

OBLIGATIONS

DII'FERANT KINDS OF

OULI(;ATIONS Arts. I192-1193

Obligations with a Perrod

Art. 1192. In case both parties have committed a breach

of the obligation, the liability of the first nfrr""t""lfrrU
U"
equitrbly tempered by the courts, If it cannot be determined
which of the parties first violated tfr. .ort"".j,-tt e
shall be deemed extinguished, and each
f"r, ii" ""-.
o*r,

"fr"ti

damages.lr,r

Effct of Breach by Both parties.

The above rules are

.
deemed Just. 'I'he first one is fair to both parties
because the second
infractor also derived, or thought he wojd a".il,", .o.rr"
uluurrrug"
by his own act or neglect. The second ."te is tite*i",
luJib""urr"u
it is presumed that both at about the same tl-u t.l"J io
.uop

"o_"

benefit.sa

Section 2.

Obligations uith e period.

1193. Obligations
.has Art.
been fixed,

comes.

for whose fulfiIment a day certain

shall be demandable o"fy *l.r-ifr"t a"y

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
whei.
If the uncertainty consists in whether the day will come
or not, the obligation is conditional, and it stratt U! regutatea
by the rules of the preceding section.e5
Concept of Term orperiod, _ Accordingto Manresa,s
classic
definition, a term or period is an interval of ti-", *i-i"-h
u*".ti.rg
an, influence on an obligation as a consequence
of a juridical act,
either suspends its demandability or produces its exti'"gri"i."nt.*
Hence,
-obligations with a pe.iod may be definei ."-?frr""'*h*"
demandability
or extinguishment is subject t" tf," ,*pi.rti" ,f
term or period.
"

Idem; Distingished from condition, - A term or period

must not be confused with a condition. As we have already seen,
a condition is a future and uncertain fact or event upon which an
obligation is made to depend. Hence, the two may be distinguished
from each other in the following ways:

(1) As to requisites: While a term or period refers to an interval of time which is future and certain, a condition refers to a fact or
event which is future and uncertain.
(2)

As to fulfillment: While a term or period is an interval of

time which must necessarily come, although it may not be known
when, a condition is a future and uncertain fact or event which may
or may not happen.e?

(3) As to influence on obligation: While a term or period

merely exerts an influence upon the time of the demandability or
extinguishment of an obligation, a condition exerts an influence
upon the very existence of the obligation itself.s3
(4)

As to retroactivity of effects: While a term or period does

not have any retroactive effect unless there is an agreement to the
contrary, a condition has retroactive effects.

(5) As to effect ofwill ofdebtor: When a term or period is left

cxclusively to the will ofthe debtor, the existence ofthe obligation is
not affected, but when a condition is left exclusively to the will ofthe
debtor, the very existence ofthe obligation is affected.se
Classification of Term or Period.
be classified as follows:

(l)

t,tt;

A term or period may

resolutory. - According to the first and

1193, a period may be suspensive (er die)
or resolutory (ln diem). It is suspensive when the obligation becomes
domandable only upon the arrival of a day certain; it is resolutory
when the obligation is demandable at once, although it is terminated
rrpon the arrival of a day certain. Day certain is defined in the third
para6gaph ofthe article. Thus, ifA donates a parcel ofland to B to be
rkrlivered rrf'ter his death, t.here is a suspensive term. The time of the
Suspensiue

second paragraphs of

or

At.

9rNew provision.

"'R"port of I h( (iul,, I iIrtrrlrj.r,,r,. I, Lrj

"'Art I l:15. S1':rni-h t r\rl LrI| . IL.,r,,,.L,I.rI t,,r,r,
'r'lr Manr('sr'. 5t h l.il Ik I
t, :t ;0

u'Arlr Il1l'/ Ilr't:l.( r!rl (iri.

I.ti

Arts. 1192-1193

OBLIGATIONS

I)I F'I'OREN'I' KINDS O!' OBI,I(JA'I'IONS

Obligalions with a Peril)d

death ofthe donor is a day certain because jt must necessarily come,

although it may not be known when. On thc rrther hancl. ifC jonates
the usufruct or use and enioyment oI a house and lot to D for ten
years, the term is resolutory. As soon as the donation is perfected, D
can demand the delivery ofthe house and lot immediately. However,
after the expiration of ten years, he will have to return the house
and lot to the donor.

the date of the termination of the war may be uncertain yet there
is no question that the termination ol the war must necessarily
come.ro2 Howevcr, if lhc obligor or debtor binds himself to perform
his obligation as soon as he has obtained a loan of P400'000 from a
certain bank, it is clear that the granting of such loan is not definite
Consequently, it cannot be considered a day certain, for it may or it
may not happen, the obligation is conditional.r0'r
Effects of Term or Period. - If the term or period is suspensive, the fulfillment or performance 0f the obligation is demandable only upon the arrival of the day certain or the expiration of the
term.r0a What is therefore suspended by the term is not the acquisition ofthe right or the effectivity ol the obligation but merely its demandability. In other words, the obligation itself becomes effective
upon its constitution or establishment, but once the term or period
cxpires it becomes demandable. Howevcr, if the term or period is
rcsolutory, the fulfillment or performance of the obligation is dernandable at once, but it is extinguished or terminated upon the arrival ofthe day certain or the expiration ofthe term.105

(2)

Legal, conuentiortal or judicial..

- A period may also be
legal, conventional or judicial. It is legal when
it is granted by law;
conventional, when it is stipulated by the parties; and judicial, when
it is fixed by the courts. Examples oflegtrl periods are those provided
for in Arts. 1606, 1623, 1682, and 1687 of the Code. Judiciai periods
will be discussed at length in a subsequent part ofthis section.

(3) Definite or indeftnite. A period may also be definite or

indefinite. This classification can bc deduced from the provision of
the third paragraph of Art. 1193 which states that a dav certain is
understood to be that which must necessarilv come, although it may
not be known when. From this it is evident that a period is definite
when the date or time is known beforehand, and indefinite when it
can only be determined by an event which must necessarilv come to
pass. although it ma5 not be known when.
If the happening of a future event is fixed by the parties for
the fulfillment or extinguishment of an obligation, wirat is the
nature ofthe obligation
- is it with a term or is it conditional? This
question requires a qualified answer. If the event will necessarily

happen or come to pass, although it may not be known when, the

event constitutes a day certain; hence, thc obligation is one with a
term.rDo However, if the uncertainty consists in whether the event
will happen or come to pass, such event constitutes a condition;
hence, the obligation is conditional.,0r Thus, if the death of a person

is fixed by the parties for the demandability or extinguishment of

the obligation, it is clear that the obligation is one *ith o t".- o,
period because death is an event which will certainly come, although
the date or time when it will come is uncertain. The same is truo
when the parties enter into a contract whcreby it is agreed that the
obligation cannot be per{brmed "rv}rilc tht.war g(x,s on." Altlrough
'mArt. 1193, prrr.

"rA

..

Ill)il. |lrrr

:1.

('iv'l ( ,!1,.

.1.

('rvrl Iitrl,
I .l

r.1

Ar'ts 1192-1193

Phil. National Bank vs. LoPez Vito

52 Phil. 41
This action is for the recovcry of a mortgago credjt. It
appears that the defendant spouses hnd mortgaged certain
realty to secure the payrnent of a loan of P24,000 granted to
them by thc pl.rintilY. It was agreed under the mortgage contract
that payment was to be made in ten annual installments at an
interest of 8 per ce]rlL per annum. Defenda ts, however, failed
to pay the sums corresponding to six yearly installments. The
question presented is with regard to the elfect of defendants'
failure to pay those installments which are due and demandable
upon those which, normally, are not yet due and demandable.

"lt is undeniable that the eflect of the pcriod agreed

upon bl the parties is to suspcnd the demandabilitv of the
obligation, in nccordancc with Article l12r;t(nout Art 1793) ofthc
(livil Codc, u'hich provides that obligations for the perfbrmance
Hr,1r1:

I'hrl s'12
Irllrrlrs l\'!rr[rl:rl rr:r I']slirl,.1):/ l'l'rl IIlr:sr! rrlsr)Sniilh. lkll&(lo vs Sotelo
Mrrltr..l I I'lrl n-i I
,,'Art Illrit I,lr L (,r!rl ( ,!1,.
""Nctrrrrrrrecno vs N,rrcis,,.84

l1t

Arts. 1192-1r93

OBI,IGATIONS

DIFFERENT KINDS OF OBI,I(IATIONS

Obligations with a

of_which a day certain has been fixed shall be demandable

or y when that day arrives. But the defendante
-"""t.."ti"g
themselves of the period was by the will of the"igirii"
"r"if
parties themselves made subject to the resolutory
contained in paragraph 5 of the contract. Said co;ditio;
"""1;;;;
h;s
resolutory effects, since its fulfillment .uroluu" if,"
o".ioa
and leaves the creditor at liberty to demand tt p".fo"lun".
of the debtor's obligation and to proceed t" tfr" "fo.""io"r""'.f
the mortgage. According to the contract
ioto Uy inle
parties, the obligation of the mortgagors was
""te"ea
to pay thJ debt
in yearly installmeDts on a fixed day of each
v""J, ,i"tl lt i^
been fully satisfied, but in case of nonfulfilf*L"t of
u"" of li"
stipulations and conditions of the mortgage, such
tfr" f"it,.,""
to pay any of the annual installments, ihe rnortgagee
""
co;li
declare said stipulations and condition" uiofut"a u"i plo"el"Jto
theforeclosure ofthe mortgage in accordance *ith i.;. W";;;
of the opinion that the nonf;lfillment of the
oi ;;;

".ndrtio;"
contract renders the period ineffective, and makes
the obligation
demandable at the will ofthe creditor

Idern; Effect of fortuitous event. _ In obligations with

a
term o_r period, any stipulation in the contract to thJ effect that
in
case of a fortuitous event the contract shall be deemed
during the term or period does not mean that tt u irupp""i"foftne
"r"f"rra"a

fortuitous event shall stop the running of the trm or'period"agreed

upon. Its only effect is to relieve the contracting p"rti""
f"ori, tfr"
fulfillment oftheir respective obligations during th'ei""- *

f"i"a.*

Problem - X Co. and y Co. entered into a contract

whereby the latter agreed that the sugar *n" *fri"f, lt-*ifi
produce shall be milled by the former fo" p";oa
ofeO y"u.". ii
was stipulated that in case of any fortuitous
" event, the contraJ
shall be suspended during said period. For 4
last war and for 2 years after liberation *h"nihernlli;;;6;.
""";r;;l;;-rh.
was being rebuilt, y Co_ failed to deliver it"
J th-u
"r,gu" "...
central of X Co- After the expiration of the AO-"year
p".i.a, i
Co. stopped the delivery of its sugar cane to the clntrj
ofX io.
Subsequently, X Co. brought an action against y C.. i;
;;;
to compel the latter to deliver its sugar cane for 6 additionai
years on the ground that the fortuitous cvent had
the effect oi
stopping the running ofthe term or period agreed upon.
Will the

Ansa,er - The facts stated in the above problem are exactly

the same as those in the case of Vlcrr)rias Planters us. Victorias
Milling Co.,97 Phil. 318, where the SC held that the ellect of
a fortuitous event upon the term or period agrecd upon is not
to stop the running of the tcrm or period but mercly to rolieve
the contracting parties from the fulfillment of their respective
obligations during thc pendency of the event. According to the
SC:

"Fortuitous event relieves the obligor lrom fulfilling

a contractual obligation. The stipulation in the contract

that in the event of flood, typhoon, earthquakc,

rtlr, ( .,, . :l

l5r)

/ t'lril

or

olher force majeure, wat, insurrcction, civil commotion.

organized strike, etc., tbe contract shall be dcemed

suspended during said period, docs not mean that the
happening of any of these events stops the running of the
period agreed upon. It only relieves the parties from the
fulfillment oftheir respective obligations during that time
- the planters from delivering sugar cane and the central

from milling it. x x x To require the planters to deliver

the sugar cane which they failed to deliver during thc fbur
years of the Japanese occupation and the two years after
liberation when the rnill was being rebuilt is to demand

from the obligors the fulfillment of an obligation which

was impossible of performance at the time it became due.
Memo teneht ad impossibilia. x x x The performance of
what the law has written off cannot be demanded and
required. The prayer that the plaintiffs be compelled to
deliver was impossible, if granted, would in effect be an
extension of the term of the contract entercd into by and
between the parties."

Art. ff94. In case of loss, deterioration or improvement

ofthe thing before the arrival ofthe day certain, the rules of
Article 1189 shall be observed.lo?
Art. 1195. Anything paid or delivered before the arrival
of the period, the obligor being unaware of the period or
belicvingthat the obligation has become due and demandable,
may be recovered, with the fruits and interests.ro3

action prosper? Reasons.

!6Victoria Plantcrs vs. Vrrtorrrrr

Ads. 1194-1195

ll'riod

r''Arl Il:lli.St,r'nrsh(

rvrl

tirlr..

trt rrrrr, rrrIrl lirtttr

lht

Art. I 196

DI!'FERENT KINDS OF OBLIGATIONS

OBLIGATIONS

ArL

1196

Obligations with a Period

Art.

Effect of Advanced Pa;rment or Delivery.

- Under
if the obligor, being unaware ofthe
period

1195 of the Code,

or believing that the obligation has become due and demandable,

paid or delivered any'thing before the arrival or expiration of the
period, he may recover what he has paid or delivered with fruits and
interests. This rule is different from that found in Art. 1126 of the
Spanish Civil Code which states that the obligor may recover only
the fruits or interests which the obligee may have received from the
thing. The Code Commission explains the reason for the change in
the following manner:
"The present article (Art. 1126, Civil Code of Spain) is
unjust. The thing or sum not being due when it was delivered or
paid, why should only the interest be returned? Why should not
the thing or sum delivered be returned to the debtor if he was
unaware of the period or if he believed that the obligation had
becorne due and demandable? The present article is contrary to
the manifest intention of the parties."10e

It is obvious that the above article (Art. 1195) can only apply
to obligations to give. It is also obvious that before the rule can be
applied the payrnent or delivery must have been made by the debtor
either because he was unaware of the period or he believed that the
obligation had become due and demandable. Consequently, if the
payment or delivery was made voluntarily or with knowledge ofthe
period or of the fact that the obligation has not yet become due and
demandable, there can be no right of recovery whatsoever.

Art. 1196. Yfhenever in an obligation a period is

designated, it is presumed to have been established for the
benefft of both the creditor and debtor, unless from the tenor
ofthe same or other circumstances it should appear that the
period has been established in favor of one or of the other.llo
Benefft of Term or Period. * The general rule is that
when a period is designated for the performance or fulfillment ofan
obligation, it is presumed to have been established for the benefit of
both the creditor and the debtor. Consequently, as

general rule, the

creditor cannot demand the performance ofthe obligation before the

expiration ofthe designated period; neither can the debtor perform
the obligation before the expiration of such period.lLr Thus, it has
been held that in a monetary obligation contracted with a period,
the debtor has no right, unless the creditor consents, to accelerate
the tirne of payment even if the tender includes an offer to pay not
only the principal, but also the interests in full.rr2 This is very well
illustrated by the case of De Leon us. Syiuco.tl3 In 1944, during the
Japanese occupation, the debtor borrowed P216,000 in Japanese
military notes from the creditor, promising to pay "within one year
from May 5, 1948" in the legai tender ofthe Philippines' In the later
part of 1944, after the Americans had landed in the Philippines,
he tendered payment of the principal including interest up to
the date of maturity. The creditor refused to accept the pa,'ment.
Subsequently, he deposited the entire amount with the clerk of
court. After liberation, he brought an action against the creditor to
compel him to accept the amount deposited. The Supreme Court,
however. held that the refusal of the creditor to accept the tender of
payment was justified in view ofthe fact that the term or period in
this case is presumed to have been established for the benefit ofboth
the creditor and the debtor in accordance with Art. 1196 ofthe Code;
consequently, the consignation rnade by the debtor is not valid. It
may be argued that the creditor has nothing to lose and everything
to gain by the acceleration of payment. There are, however, several
reasons why the creditor cannot be compelled to accept payment.
'lhey are: frsf, payment of interest; second, t}:.e creditor may want
to keep his money invested safely instead of having it in his hands,
in which case, bv fixing the period, he is thus able to protect himself
rrgainst sudden decline in the purchasing power of the currency
loaned especially at a time when there are many factors that
influence the fluctuation of the cunency;lta and, third, under the
Llsury Law, there is a special prohibition of payment of interest in
;rdvance for more than one year.rr5

r118

Manresa,sth Ed., Bk. l, p.381: Sarmienlo vs. Javellana' 38 Phil.880.

''Nicolas vs. Matias.89 Phil. 126; De Leon vs- Syjuco,90 Phil.311; Osorio vs
srlutilkr. 4U ()fl. (iaz. lO:li (larci, vs. D. los Santos, 49 off Gaz. 4830; Ochoa vs.

{)ll (lrrz. 51190.

I'h'l :lll

lr,1r.z. (lA, 5l)

rr'lX)

'o'3Report

ofthe

Oode (lornn)isri,rrr, t'1,

"0Art. 1227, Spanish t'ivil t ixL,

tn2

'rtl'r!r(.! (i, lrrrn vs. SvjLrco.l)l)

rr^Nt.',1,'r

!',

M,rlrrrs. sl)

I'hil

l'hil :lI I

l2{;

l6il

Art.

1197

OI}LIGATIONS

I)IFFERENT KINDS OF OBI,I(iA'I'IoNS

Art.

1197

Obligations with a I)eri(xl

Idem; Exception. However, if it can be proved either

-iiatfrom
the obligation or from other
the
period or term has been established in favor "l.c,r-stanc""
ofthe creditor or ofthe
debtor, the general rule or presumption will not apply.
ieice, if.it
should appear that such period has been establi"hejiorlhe
U"rrefit
of the
he may demand the fulfillment o. p"rfo..in.r"u of
-creditor,
the obligation at any time, but the obligor o. d"bto'., o.r-ih"
ott e.
hand, cannot compel him to accept payment before the
expiration of
the^period.-If it should appear that ttre period fru" n"""
in favor of the obligor or debtor, he may oppose anv"!iulfi"f,"a
premature
demand on the part of the obligee or crediio, io. p".fo.LJn""
oi tn"
obligation, or if he so desires, he ..ruy ."rour"" th"-L"*ni,f
tfr"
period by performing his obligation in advance.rr6
Th,r", iftt O"t to"
executed apromissory note prornising to pay his ind"tLJ"""1
" t" trr"
creditor "al plazo de cinco enos contados"d.isde esta
fechi: or- wXnin
a period of five years to be counted from this date, ii
is eviJent that
the term or period is for the benefit of the a"Uto.; .un""q,l"r,Uy,
t
can compel the creditor to accept the payment at
any time
within"
-f."i,*".y
thc stipulated period.,r' But if the a"lrto. o"".ut"J',
note promising to pay his indebtedness ..four years
after date,,,the
presumption is that the term or period is for t-he
benefit of both the
creditor and the debtor; consequently, the debtor cannot
tfr"
creditor to accept the payment until after the expi.utlon "r-pa
oiiii
firur_
year period.rl3

the. tenor of

1197. Ifthe obligation does not fix a period, but

from
its nature and the circumstances, it can bJ infer".J ifr"t
.
period was intended, the courts may fix the duration
lhereof.
The courts shall also fix the duration of the period
when
it depends upon the will of the debtor.
In every case, the courts will determine such period as
may under the circumstances have been probablyplated by the parties. Once fixed by the courts, i"fr""orrt.rn_
o."i"O
cannot

be changed by them,'l"

--- 'il;;;-.,..'s'h
vs. (

r.:d..

rik. r. r,r, .r,.r

orrrt,,1 Al'lx.'lr .tx

'Sra
!rBGarcia vs. l)'. l,'s Snnt,,r, .t9

A term or period is judicial when

fixed by a competent court in accordance with

Judicial Term or Period.

the duration thereofis

the causes expressly recognized by law. Once fixed by a competent
court, the period can no longer be judicially changed.l?0

Idem; When court may ffx term. - Under Art. 1197, there
irre two cases where the courts are empowered to fix the duration
of the term or period. 'fhey are: frsf, if the obligation does not fix a
period, but from its nature and the circumstances it can be inferred
that a period was intended by the parties; and secozd, ifthe duration
of the period depends upon the will of the debtor. We might add a
third - if the debtor binds himself to pay when his means permit
him to do so.t2' Strictly speaking, however, this case properly falls
within the purview of the second, because in such a case the power
to determine when the obligation will be fulfilled is in effect left
r.xclusively to the will of the debtor.

If the obligation does not fix a period, but from its nature and
it can be inferred that a period was intended, the

t.he circumstances

courts may fix the duration thereof.l" Thus, where the donor donated

to the city of Manila a parcel of land subject to the condition that

it shall be converted into a public square, but the deed of donation

is silent with regard to the term or period for the fulfillrnent of

the condition, it is evident from the very nature of the condition
l.hat a term or period is intended by the parties for its fulfillment;
consequently, the court may fix the duration thereof.r23 The same
is true if the parties failed to fix a definite period within which the
obligor was to complete the construction of a house. It is clear that
in such a case they intended some period but did not specify it;
crrnsequently, the fulfillment of the obligation cannot be demanded
liom the obligor until after the courts have fixed the period for
t ompliance therewith, and such period has arrived.r2a

It must bc observed, however, that the mere silence of the

olrligation with regard to the term or period for its fulfillment does
rrot. necessarily mean that the courts are empowered to fix the
rlrrration thereo{l In the,frsl place, the remedy cannot be applied to
l{)7, ('ivil Oode.

.r::

llto. ( rvil (i)de.

t,tl t;,,/,,:,,,tr
I II (;r,r .18;Il

r$Arl.. Il2li. Stxlt rlr (,rvrt(,,nt,.

rrr rrrrr,.nrtrrt tirIrrr

llri. Irrr l. ('ivil (ixl(

!llrrIrIllo rr ( rlv,'l M iIr,'/ I'l|rl 4llj
Ii
r
" r u, l',rt,1, ,,1 ll". l'l"l i'1 I'l',1 l(iil
rI

r r r

tr,.t

, , r

t65

Art. I197

OBI,ICATIONS

Ari.

I)IFFERENT KINDS OF ORI,I(;A'I'IONS

197

Obligations with a Period

contracts for services in which no period was 1ixed by the parties.

In such contracts the period of employment is understood to be
implicitly fixed, in det'ault of express stipulation, by the period for
the payment of the salary of the employee, in accordance with the
custom universally observed throughout the world.rr5 In the second,
place, it cannot be applied to pure obligations.r26 Thus, according to
Manresa:
"While that which is contemplated by the first paragraph
of this article appcars to be a limitation upon the efficacy and
the immediate demandability of pure obligations, in reality, it
is diflerent; in pure obligations there is no intention to grant a
period, otherwise they would not be pure; under this paragraph,
such an intention exists. For this reason in the case of the first,
there is no limitation upon the demandability ofthe obligation by
the creditor; rather its fulfillment by the debtor is facilitated; on
the other hand, in thc case of the second, since there is actually
a period, there is a limitation upon that demand- ability.,,r2?

If the duration of the term or period depends exclusively upon

the will ofthe debtor, the court may also fix the duration thereof.rrs
This rule is just and logical, because, otherwise, there would
always be the possibility that the obligation will never be fulfilled
or performed. Thus, where the debtor has executed a promissory
note promising to pay his indebtedness to the creditor,,in partial
payments,"12s or "little by little,"r30 or "as soon as possible,"r3l or,,as
soon as he has money,"r32 it is clear that the duration ofthe term or
period for the fulfillment ofthe obligation depends exclusively upon
the will of the debtor; consequently, the remedy of the creditor is to
bring an action against the debtor in accordance with the provision
ofArt. 1197 in order to ask the court to fix the duration thereof. The
same remedy is also available to the lessor where it is expressly
stipulated in the contract oflease that the duration ofthe lease shall

t'5Barretto vs. Santa Ma na. 26 Phil 440

6P.,,plp. Bank v- Ud,,m.64 l,hit l2ri
i/r8 Manresa 158, quotcd in lrlt(.ntI
vs. ()rrrr'l1rr,,iti Ofli
''3Art. 1197, par.2, Clivil (ixl,'
''el-ery Hermanos vs. I,!rl|rn,,. ll.] I'hil :l5jt
rroSeone vs. Fr:rnu) 24 l'hil ilot,
tlGonzalos vs J,)si . {;l; I'l'rl ilt;11
' I'il'.'rlr v. l,II
r'i'. l.r I )ll r ;I/ th tr,

depend exclusively upon the will ofthe lessee.r"s And where there rs
an agTeement between the employer and the union representatives

representing its employees and laborer regarding the payment

of salary differentials which had remained unpaid because of the
cxhaustion ofthe funds appropriated for the purpose, the obligation
t<.r pay said salary differentials may be considered as one with a
tcrm whose duration has been left to the will of the debtor. so that
pursuant to Art. 1197 of the Code, the remedy of the employees
and laborers is to ask the courts to fix the duration of the term, it
being admitted that in a going concern the availability of funds for
l particular purpose is a matter that does not necessarily depend
upon the cash position ofthe company but rather upon the judgment
ol its board of directors.rn'
Gonzales vs. Jose
66

Phil. 369

This action was instituted by the plaintiffto recover from

the defendant the amount of two promissory notes worded as
follows:

"I promise to pay Mr. Benito Gonzales the sum of fbur

hundred three pesos and fifty-five centavos (P403.55) as soon as
possible.

Anterior.........-.-.--.

..........-. P7l
47

Sept. 12,

1922.......

.t 0

4.65

300.00

Balance

l7 4.65

"Manila,

une 22, 1922.

(Ssd. ) "FLORENTINO DE ,IOSE"

"Quczon, Nueva Ecija"

"[ prornise to p:ry Mr. Benito (lonza]es the sum of three

lrundred and seveniy-three pesos and thirty cent.rvos (P373.30)
(rrz

as soon :ts possible.

.11.1.1(i

(ssd. ) "t't,oRI.lN'fINO DFI JOSE"

I'Il.)l,trr.r1rrr v,L Nliurlir

l,rw"'li.'rri , ('lrl,. :l Plril

,, ,0ll l;r'l l/11

Nlrlrl'r lililntr'(l (

I5i

:l{11)

Art l l97

DIFFERENT KINDS OF OBI,I(1ATIONS

Obligalions with a Period

OBLIGATIONS

"Defendant appealed from the decision of the Court of

First Instance of Manila ordering him to pay the plaintiff the
sum of P547.95 within thirty days from the date of notification
ofsaid decision, plus the costs.

In his

answer the defendant interposed the special

defenses that the complaint is uncertain inasmuch as it does
not specily when the indebtedness was incurred or when it
was demandable, and that, granting that the plaintiff has any
cause ofaction, the same has prescribed in accordance with law.
Resolving thc defense of prescription, the trial court held that
the action for the recovery of the amount of lhe two promissory
notes has not prescribed in accordance with Article 1128 (now
Art. 1197) of the Civil Code, which provides:

"Art. 1128. If the obligation

does not specify a term,

it is to bc inferred from its nature and circumstances

that it was intended to grant the debtor time for its
but

Art.

ll Phil. 154; Levy Hermanos vs. Paterno, 18

Phil.353.) The action to ask the court lo fix the period
has alrcady prcscribed in accordancc with Section 43(1) of
the Code of Civil Procedure. This period of prescription is
ten years, which has already elapsed from the execution
of the promissory note until the liling of the action on
June 1, 1934. The action which should be brought in
accordance with Article 1128 (now Art. 1197) is different
from the action for the recovery ofthc amount ofthe notes,
although the effects ofboth are the same, being, like other
civil actions, subject to the rules of prescription.
"The action brought by the plaintiff having already
prescribed, the appealed decision should be reversed
and the defendant absolved from the complaint, without
special pronouncement as to the costs in both instances.
So ordered."

Problem - D borrowed P2.000 from C in 1958. The debt

is evidenced by a prornissory notc cxccutcd by D wherein he

"The cour-t shall also fir the duration of the term

when it has been left to the will ofthe debtor."

promised to pay as soon as he has money or as soon as possible.

C has made repeated demands upon D for payment, but up to
now no payment has been made. Suppose that C will bring an
action against D tbr payment ol the debt, will the action prospcr?
(1973 Bar Problem)

It is practically admitted bythe parties that the obligations

period within which to pay the debts. The four errors assigned
by the defendant turn on the applicability ofArticle 1128 (now
Art. 1197) and on the prescription of the action brought by the
plaintiff The defendant contends that Article 1113 (now Art.
1179) of the Civil Code should be applied inasmuch as the
obligations derived from the promissory notes were demandable
from the time of their execution, and adds that even supposing
that Article 1128 is applicable, the action to ask the court to fix

the period had already prescribed in accordance with Section

43(1) ofthe Code ofCivil Procedure.
The Supreme Court, speaking through Justicc Impcri:rl
held:
"We hold thatthe two promissory not(:s arc govcrnt'tl

by Article 1128 (now

Art. ll97) hccaust' undcr thc tcrnrs

thereof the plaintifl inlcrrdrrl lo gnrnt lh(, rl'li,nrlirnl. ir
period within wlrich l.o prry his rlclrts. As Lhr.prorrissory
notes (lr) D()1. lix thr tx.ri'xl, il is lirr llrc c()ull (r, lix llr('
sam{'. llllr'iz(.tirri vr Mrrrilrr l,rrwrr 'li.rrrrix ('lrrlr, 2 l'hil
il(ll): l|;rrrr'llo vrr ('tlr ol Mrrrrrlrr. / l'lll..ll{;. l,'|rrrrrrrro vn
l5l'i

197

Delgado,

perfbrmancc, lhe period of the term shall be fixed by the

court.

arising from the two promissory notes should be governed by

said article, inasmuch as it was the intention of the plaintiff,
evidenced by the terms of the said notes, to grant the debtor a

Answer No, the action will not prosper. In similar cases

decided by the Supreme Court (Gonzales us. Jose, 66 Phil. 369;
Patente us. Omega, 49 Off. Gaz. 48,16), it was held, that where
the debtor promises to pay his obligation as soon as he has
moncy or as soon as possible, the duration of the term or period
depends exclusively upon the will of the debtor; consequently,
the only temedy of the creditor is to bring an action against the
debtor in accordance with Art. 1197 of the Civil Code for the
purpose of asking the court to fix the duration of the term or
period. It is only after the duration of the term or period has
been fixed by the court that any other action involving the
fulfillment or performance of the obligation can be maintained.
'lhis has always been the consistenl doctrine in this j urisdiction.

From what has been stated, it is quite clear that the effect of a
pol.cstirtive term or period is ver.y different from that ofa potestative
condition. 'l'hc lirttcr cannot bc lefi, t,o thc will of the debtor because
rl irlli.tl,s l.lrr.vr.r'y (.xist('rrc(.ol l,ht'obligirtion itself, since what is
rlr'logrrlcrl lrr llrr. rlcblor is t.hr' ;xrwr.r lo rk'tcrrnino whcther or not
llrc olrligrrltorr r;lrrrll Irc IirIIiIIr,rII llrr. lirrrrcr', orr l.lr,ol.lrr.r hirnrl, r'irn

llrll

Art. I197

DIFFI]RENT KINDS OF OBI,IGA'I'IONS

OBLIGATIONS

Ar1. 1197

Obligations with a Pcriod

because its influence does not go as

determine the existence of the obligation, since what is

be left to the

far as to

will of the debtor

delegated to the debtor is merely the power to determine when the

obligation shall be fulfilled, but in order to prevent the obligation
contracted from becoming ineffective by nonfulfillment the courts
must fix the duration of the term or period."''

This article also applies to a lease agreement, where a contract

of lease clearly exists. Thus, the SC in the case of Millare us.

Hernando (157 SCR.{ 484), it held that the first paragraph ofArticle
1197 is clearly inapplicable, since the Contract of Lease did in fact
fix an original period offive years, which had expired. It is also clear
from paragraph 13 ofthe Contract ofLease that the parties reserved
to themselves the faculty of agreeing upon the period ofthe renewal
contract. The second paragraph of Article 1197 is equally clearly
inapplicable since the duration of the renewal period was not left to
the will of the lessee alone, but rather to the will of both the lessor
and the lessee. Most importantly, Article 1197 applies only where a
contract of lease clearly exists. Here, the contract was not renewed
at all, there was in fact no contract at all the period of which could
have been fixed.

Idem; Nature of action. - The only action that can be

maintained under Art. 1197 is an action to ask the court to fix the
duration of the term or period. It is only after the duration has
been fixed by a proper court that any other action involving the
fulfillment or performance of the obligation can be maintained.r3G
'lhus, an action brought purely for the collection ofa debt which falls
within the purview of the article is obviously improper, because the
fulfillment of the obligation itself cannot be demanded until after
the court has fixed the period for its compliance and such period has
expired. ? Consequently, so long as such period has not yet been
fixed by the court, legally, there can be no possibility ofany breach of
contract or of failure to perform the obligation, and if il so happens
that this point was never raised before the trial court, the creditor
cannot be allowed to raise it for the first time on appeal. r't!
Manresa 15ti, quoted in l)alenl( vs. Otnt grr, .11, ()ll: (;rrz. '18'1(;
lJ6Eteizeguivs.ManiLtl,rw'r'll''rDis('l l'.21'hil ll(Xl,Srrrr(rs I"ri'rrt,',2'1 l'h'1.

In the

case of Pacific Banhing Corp. us. CA (173 SCRA 102),

the Supreme Court reiterated the rule that if the obligation has

no fixed period, a party is precluded from enforcing it. Thus, it

held that even the pledge which modifled the fixed period in the
original promissory note, did not provide for date of payment of
installments, nor ofany fixed date of maturity ofthe whole amount of
indebtedness. Accordingly, the date of maturity of the indebtedness
should be determined by the proper court under Art. 1197 of the
Civil Code. Hence, the disputed foreclosure and subsequent sale
were plemature.

It is not, however, necessary that the creditor, in his complaint,

must expressly ask the court to fix the duration of the term or
period. Where the essential allegations of the pleadings describe an
obligation with an indefinite period, the court can fix the duration of
such period although the complaint does not ask for such relief. For
this purpose two ultimate facts should be alleged in the complaint.
'fhey are: (1) facts showing that a contract was entered into imposing
on one ofthe parties an obligation in favor ofthe other; and (2) facts
showing that the performance of the obligation was left to the will
ofthe obligor, or clearly showing or from which an inference can be
reasonably drawn that a period was intended.r3e

It must also be noted that the action recognized in Art. 1197

rnay also prescribe like any ordinary civil action. Thus, in an action
t.o ask the court to fix the duration ofthe period for the performance
of an obligation which is evidenced by a promissory note filed after
ten years from the time of the execution of the note,
that the action had already prescribed.lao

Lhe lapse of

was held

Idem; Effect ofjudicial period, - Once fixed by the courts,

judicially changed.lar This is so because
lrom the very moment the parties gave their consent to the period
lixcd by the court, said period acquires the nature of a covenant; in
ol.her words, it becomes a law governing their contract; consequently,
Ihc courts can have no power to change or modify the same.ra2
l.he period can no longer be

1358

309r Gonzales vs. Josc, 6(i Phil it{;!l

lrTungson vs. l/rpr'z. ( 14. 5(l{ )ll

(;,r1 lill,/,,'lurlr(;,,rtzrIs\5.,or,.1;l;lrhrl.il(;1r,

lt,1rL ,'l llr, l'lrl / l l'lrl l;:l

vq llrrsilrrrr l,rrrrrlIr l\, l{)l lrlrrl 88]l

and Conccpcil)n vs.

'rdl>rs',1

l{ir)

it

"Srlr'.rrk, r rr. ti rrrp, rl,.. i s('liA lrrl2

rr"(irrrzrI r vs ,losr' (i(i I'lril :l{ill
rlrArl l lrr'/. t,'r ll, ( livil { hl.
ItLII'n'.11,' \,1

i rlr

l;:ll
ll
"l M|nrlr', l'l'rl

lril

Art. 1197

DIFFERENT KTNI)S OF ()BI,I(]A'I'I()NS

OBLIGATIONS

Art. 1198

Obligations with a Period

Problem - "M" and "N" were very good friends. "N" borrowed P10,000.00 from "M." Because oftheir close relationship,
the promissory note executed by "N" provided that he would pay
the loan "whencver his means permit." Subsequently, "M" and
"N" quarelled. "M" now asks you to collect the loan because he is
in dire need of money.
What legal action, if any, would you take in behalfof"M"?
(1980 Bar Problem)

Answer - "M" must bring an action against "N" for the

purpose of asking the courl to fix the duration of the term or
period fbr payment. According to the Civil Code, 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 fut. 1197. ln other words, it shall be subject
to those provisions ofthe Code with respect to obligations with a
term or period which must bejudiciary fixed. Thus, in the instant
case, the court shall delermine such period as may under the
circumstances have been probably contemplated by the parties.
Once determined or fixed, it becomes a part of the covenant
of the two contracting partics. It can no longer be changed by

them.

If the

debtor defaults in the payment of the obligation

a{ter the expiration ofthe period fixed by the courl, the creditor
can then bring an action against him for collection. Aly action
for collection brought before that would be premature. This is

well-settled.
(No/e: The abovc answer is based on Arts. 1180 and
1197 of the Civil Code and on Gonzales vs. Jose, 66 Phil. 369;
Concepcion vs. People ofthe Phil. 74 Phil. 62; Pages vs. Basilan,
104 Phil. 882, and others.)

Altuntttite Ansuer - Normally, before an action for

collection may be maintained by "M" against "N," the former
must first bring an action against the latter asking the court to
fix the duration of the term or period of payment. However, an
action combining such action with that ofan action for collection
may be allowed if it can be shown that a separate action for
collection would be a mere formality because no additional proof ,s
other than the admitted facts will be presented and would serve
no purpose other than to delay. Herc, thore is no krgal obsttclc
to such course of action.
(Note. The abov(. irll.r'rnrrl.ivr' ;rnswor is birsr'<l ol) Ilorronrrrr
vs. Court ofAppr,rrls, 47 S( lltA (i5.

Prolrirblv,

rcsrrll worrlrl

ll

il wr.r'orrrlrrrrl llr. lwr) tlrswr'ft

grvr,rr rrlxrvr', llrr.

rr rrrrr, h rrrr'r'rrl)r'r'xHiv(, rrr,iwr,r

I ti').

Problem "A" Corporation, engaged in the sale ofsubdivision residential lots, sold to "B" a lot o1 1,000 square meters.
The contract provides that the corporation should put up an artesian well with tank. within a reasonable time lrom the date
thereof and sufficient for the needs of tho buyers. Five years
thereafter, and no well and tank have been put up by the corporation, "B" sued the corporation for specific pcrf<rrmance. The
corporation set up a defense that no pcriod having been fixed,
the court should lix the period. Decide with reason. (1982 Bar
Problem)

Aruwer

The action for specific perf<-rrmance should be

it is premature. It is clear that
the instant case falls within the purview of obligations with a
term or period which must be judicially fixed. Thus, "B" instead
of bringing an action for specific performance, should bring an
action asking the court to detcrmine the period within which
"A" Corporation shall put up the artesian well with tank. Once
the court has fixcd thc period, thcn such period as fixed by the
court will become a part ofthe covenant between the contracting
parties. It can no longer be changed by them. Ifthe Corporation
does not put up the artesian well with tank within the period
fixed by the court, "B" can then bring an action for specific

dismissed on the ground that

performance.

Alternatiue Answer Normally. before an action for

specific performance may be maintained by "B" ngainst "A"
Corporation, the former must first bring an action against the
latter asking the court to fix the duration ofthe term or period to
install the artesian well with tank. However, an action combining
such action with that of an action lbr specific perfbrmance may
if it can be shown that a separate action for specific
performance would be a mere formality because no additional
proofs other than the admitted facts will be presented and would
serve no purpose other than to delay. Here, there is no obstacle
to such cause of action.
be allowed

(Nofe; The above answers arc berscd on Art. 119? of the

Civil Code and on decided cases. Either answer should be
considered correct.)

Art.

1198.

The debtor shall lose every right to make use

of the period:

(l) Whcn after the ()bligrti()n h:rs bccn contracted, he

hccomon luxolvcnt, unl(lsH Ir(. l{iv(. r l{urrrunty or sccurity for
the drrbt;
lri:l

Art.

DIFF!]RI.]NT KINDS O}- OBI,I(IA'I'IONS

OBLIGATIONS

1198

Ad.

1198

Obligations r ith a P(r.io.i

(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 irnrnediately 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.'arr

Extinguishment ofDebtor's Right to Period. According

to the above article, there are five different grounds or causes for
the extinguishment of the debtor's right to make use of the term or
period.

With respect to the first, the word "insolvent" must not

be

understood in its technical sense so as to require ajudicial declaration

in accordance with the Insolvency Law; it must be understood in

its ordinary or popular sense. Consequently, it includes any case in

which it would not be possible financially for the debtor to comply
with his obligation. This situation is, of course, predicated upon
the proposition that the insolvency of the debtor arose after the
constitution of the obligation.rla However, if there is a guaranty or
security for the debt, the debtor, in spite of his insolvency, does not
lose his right to the period.

With respect to the second, when the debtor does not furnish
the stipulated guaranty or security, it is but logical that he shall
lose his right to the term or period. Thus, where the debtor not only
failed to register the mortgage over a parcel of land in favor of the
creditor in order to secure the loan, but even mortgaged the same
parcel of land in favor of the Rehabilitation Finance Corporation in
order to secure another loan, it was held that the lbrmer obligation
became pure and without any condition, and consequcntJy, the loan
became due and immediately dcmandable. r'n

'r:rArt. 1129,
'1a8

Spalish (livil ( (rk, r') rrrrrlrlirrl

Manresa, Slh lirl

Laplan;r vs.

,llk 1,1, rlrtt

l{i.t

Problem A executcd in favor ofB a promissory notc for

P10,000, payable alter two years, secured by a mortgage on a
certain building valued at P20,000. One year alter the execution
of the note, the mortgaged building was totally destroyed by a
fire of accidental origin. Can B demnnd from A the payment of

the value of the note immediately after the burning without

w:riting for the cxpiration of the term? Reasons. (1932 Bar
Problem

Anstuer Yes, B can demand from A the payment of

the value of the note immediately after the burning without
waiting for the expiration of the term, unless A immediately
gives another security or guaranty which is equally satisfactory.
This is clear from the provision ofNo. 3 ofArt. 1198 ofthe Civil
Code which declares that whcn by his own acts the debtor has
impaired the guaranty or security, or when through a fortuitous
event the guaranty or security disappears, the debtor shall lose
the benefit ofthe term or pcriod. lt must be observed that therc
is a dillerence betwcen the elfect of impairment and thc cffect of
disappearancc as applied to thc security or guaranty. The rules
may be restated as follou's: (1) If the guaranty or security is
impaired through the fault ol thc debtor, he shall lose his right

to thc benefit of the period; however, if it is impaired without

his fault, he shall ret,rin his right. (2) Iflhc gxaranty or security
disappears through any cause, cvon without any fault of the
debtor, he shall lose his right to the benefit of the period. In
oither case, howcver, the debtor shall not lose his right to the
benelit of the period if he gives a new guaranty r)r security.

ll,r'rrr

I.lnl(rl)ris,r. lrr. r,, l','rrrr' 5ll ()11 llr/ i':flii l\, thr,!r!r',
{irrr.lril,,r' rI' .18 l'1,,1 lri:l

La'Daguhov

With respect to the third, attention must be called to the

difference between the eltect of impairment and the effect of
disappearance as applicd to the guaranty or securily. The rules may
be restated as follows: (1) If ihc guaranty or sccurity is impaired
t,hrough the fault of thc dcbtor, he shall lose his right to the benefit
of the period; however, if it is impaired without his fault, he shall
retain his right. (2) If the guaranty or security disappears through
any cause, even without any fault of the debtor, he shall lose his
right to the benefit ofthe period. In either casc, however, the debtor
shall not lose his right to the benelit of the period if he gives a new
guaranty or security which is equally satisfactory.

(11ial

'['ht' lirrrrth and fif'th cascs ar(, new provisions. Whether the
rlr,lrt.or violrrl.r's;rrry undeltirking, irr c.onsit 'rir1,ion ol which lhe credilol irgrccrl lo llrr'pr.riod, or hr.irllcrrrlrls l.o irbscorr<1. thc rrrlc t.h:rt he
,rltrrll Lrsr. lrr, rrlilrl lo IIrc IrlrrcIiiri ol llrr'lrcrirrd is pr.rrlx'r.
lliir

Art. 1198

OBLIGATIONS

DIFFERENT KINDS OF OBI,I(iA'fIONS

Alternative and Facultative Obligations

Song Fo vs. Oria

Ansuer This defense is untenable. The sale of the iron

ore is not a condition precedent to the payment of the balance
but only a suspensive term or period. There is no uncer.tainty

33 Phil. 3

This is an action commenced by plainliff to recover ihe

pulchasc price ol a launch which was sold to the delendant for
P16,000 payable in quarterly installments of P1,000 and for
which the said launch was mortgaged as security. The records
show that thc launch was delivered to the defendant in Manila
but it was wrecked while enroute to his place of business in
Samar. The records also show that no part ofthe purchase price
has yet been paid to thc plaintill'. The lower court rendered
judgment for P6,000 on the ground that this amount represents
the unpaid installments which arc due and demandable under
the contract. The plaintifs, however, contend that the judgrnent
should include thc whole amount.

lleld: "Coming now to examine the contentions of the

plaintiffs on thcir appeal, we think thal the trial judge erred in

declining to renderjudgment in their favor for the total amount
of the purchase pricc of the launch. He appears to have relied
upon the provisions of Article 1126 (now Art.ll93l ofthe Civil
Code but to have overlooked thc correlated provisions ofArticle
1129

(nou

Att.ll98l

of the same code.

"The security for the payment ofthe purchase price ofthe

launch itself having disappeared as a result of the unforeseen
evenl(uis major) and no other security having been substituted,
therefore, the plaintiffs were clearly entitled to recoverjudgment
not only for the installments of the indebtedness due under the
terms of the contract at the time when they instituted their
action. but also for all installments which but for the loss of the
vessel, had not matured al lhe time."

Prohlen A sold his entire interest in 24,000 tons of

iron ore io B for P75,000, P10,000 of which was actually paid
upon the signing of the contract. With respect to the balance of
P65,000, it was ag'rccd that it "will be paid from the first amount
derived from the sale of the ore." To insure payment thereof, B
delivered to A a surcty bond which provided that the liability of
the surcty liability would automatically expire after the lapse of
two years. Inasmuch as thc ore had not yet been sold and the
surety bond had expired without being renewed and the balance
had not yet been paid in spite of repeated dernands, A finally
brought an action against R for thc recovery of said bal:rnce.
B, however, interposed tht: defense that his obligation to prlv
is conditional and thal. inrlsnllr(h irs th('c()lrditi(tn has not y(!t
been fulfilled. thcrclirrr'. il is r)r)l v(rl rlttl rrrtrl rlr'rrtrr rrd:rblt'. ls
this dcfcnsc k.rr:rlrlrJi
I

{ii;

Aft.

1198

whatsoever with regard to the fact of payment; rvhat is

undetermined is merely ihe exact date of payment. Normally,
therefore, A will have to wait for the actual sale of the iron ore
before he can demand from B for the payment of the unpaid
balance. However, inasmuch as by his own act B has impaired
the guaranty or security after its eslablishment without giving
another one which is equally satisfactory, it is clear that he has
now lost the benefit of the term or period. Consequently, the
case now falls squarely within the purview of pars. 2 and 3 of

AIt. 1198 ofthe NCC. (Gaite

Section 3.

us.

Fonacier, 112 PhiL.728.)

Alternatiue and. Facultatiue

Obligations

Concept. - When an obligation comprehends several objects

or prestations it may be either conjunctive or distributive. It is
conjunctive when all of the objects or prestations are demandable
at the same time; it is distributive when only one is demandable.
The latter, in turn, may be either alternative or facultative. It is
alternative when it comprehends several objects or prestations which
rrre due, but it may be complied with by the delivery or prformance
of only one of them; it is facultative when it comprehends only one
object or prestation which is due, but it may be complied with by the
delivery of another object or the performance of another prestation
in substitution.l!6

It is, therefore, clear that the characteristic feature of an

rrlternative obligation is that various objects being due, the payment
or performance of one of them, determined by the election which,
rrs a general rule, pertains to the obligor or debtor, is sufficient.la7
'l'hc characteristic feature of a facultative obligation, on the other
Irand, is that only one object or prestation is due, but the obligor or
rkrbtor may deliver another object or perform another prestation in
substitution.la8

'r'r8 Mfir't\.s,r,

I'lh I,il., llk

rlNAd lillrli. I rvrl( (!l'.

lri /

Art

OBLIGATTONS

I]IFFERENT KINDS OF OI]I,IC;ATIONS

Altcrnative and Facultative Obligations

Art. 1199. A person alternatively bound by different

prestations shall completely perforrn one of them.

have been the object of the obligation. "Prestations which could not
have been the object of the obligation" refer to those undertakings

The creditor cannot be compelled to receive part of one

and part of the other undertaking.ll'g

rvhich are not included among those from which the obligor may
select, or to those which are not yet due and demandable at the
time the selection is made, or to those which, by reason of accident
or some other cause, have acquired a new character distinct or
dilferent from that contemplated by the parties when the obligation
was constituted.l5r It must be noted that what is contemplated by
the provision ofthe second paragraph ofArt. 1200 is a case in which
the right to choose or select is not lost or extinguished altogether,
because there are still other objects or prestations from which the
debtor can choose or select.

Arts

1199-1200

Art. 1200. The right of choice belongs to the debtor, unless it has been expressly granted to the creditor.
The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not
have been the object ofthe obligation.tso

Right of Choice in Alternative Obligations.

In alterna-

tive obligations, the general rule is that the right ofchoice belongs or
pertains to the debtor.l5r Thus, where the debtor borrowed a certain
amount from the creditor, and in the promissory note which he had
executed it is expressly stipulated that he can fulfill his obligation
either by the payment of the amount of the indebtedness or by the
delivery of a house and lot at an appraised valuation, it was held
that such obligations are alternative in character.l52 Consequently,
upon the maturity ofthe note, the debtor can comply with the obligation by paying the agreed amount or by delivering the house and
lot. Under the general rule stated in Art. 1200, he alone has the
right to make the choice. Once he has made it, and such choice is
duly communicated to the creditor, the obligation becomes simple.
Ttrere are, however, two exceptions to the general rule. They
are: first, when the right of choice has been expressly granted to
the creditor;l53 ar'd second, when it has been expressly granted to
a third person. Although the Code does not expressly recognize the
second,there is no reason why it should not be allowed, since it is not
contrary to law, morals, good customs, public order or public policy.

Idem; Lirnitations upon right of choice. - The limitations

to the right ofchoice are given in the second paragraph ofArt. 1200.
Accordingto this provision, the debtorcannot choose those prestations
or undertakings which are impossible, unlawful or which could not
rasArt. 1131, Spanish Civil (hdc.
'tuArt. 1132, Spanish (livil {ixk'
r51Art. 1200, Civil (lxk'.
and Mrrrrrro vx 'lrtvr, r. :lt]
"'!Agoncill{)
r'rrArt.. 1200,
tnrr l,{'tvtl{ixI

I'hrl
itt

ll'1'l

I201

Art. 1201. The choice shall produce no effect except fTom

the time it has been communicated.is5
When Choice Takes Effect. - The rule stated in the above
irrticle is applicable whether the right of choice is exercised by the
tlebtor, or by the creditor, or by a third person. No special form is
required for the communication or notification. Hence, any form may
be employed provided that the other party is properly notified ofthe
sclection. Nevertheless, considering the fact that the choice shall
produce no effect except from the time the other party is notified
ol the selection and the fact that the proof of such notification is
incumbent upon him who made the selection, it is always much
lx'tter to make the notification either in a notarized document or in
rrny other authentic writing.r56

Can the creditor to whom the selection had been duly

communicated impugn such selection? In other words, before the
r'hoice or selection shall be binding upon the creditor, is it necessary
llrirt he must give his consent thereto? In a certain case, decided by
I lr(' Supreme Court, where the alternative obligations of the obligor
corrsisted of paying the insured value of the house or rebuilding
rl, rrnd such obligor notified the obligee that it shall rebuild the
lrrrrrse, the court declared that the "object of the notice is to give
tlr creditor or obligee opportunity to express his consent, or to

' 'lt Mrrrrlcrrr. rtlr l.il . Ilk l. t, ill)il

r"'Arl ll;l:1. Sl,rrrrrsh {livil (iri
r'"t1 Mrrrtr",,r I'llr l,il llk l.
.
t, il:rl,

l{itl

Art

I)lI.-FERENT KINI)S OF OBLI(;A1'l()\S AIts. 1203 1205

Alternative and Facultati\'(, Ol)l igati(rns

ONI,T(IATI()NS

1202

impugn the election made by the debtor and only after said notice
shall the election take legal eflect when consented to by the creditor,
or if impugncd by the latter, when declared proper by a comptent
court,"r57 It is, however, submitted that this doctrine is not sound.
Consent or concurrence of the creditor to the choice or selection
made by the debtor is not necessary before the choice or selection
can produce effect. To hold otherwise would destroy the very nature
of the right to select and the alternative character ol the obligation
for that matter. Thus, according to Dean Capistrano: "The law does
not require the creditor's concurrence to the choice; if it did, it would
have dcstroyed thc very nature of alternative obligations, which
empowers the debtor to perform completely one of them.")53

Idem; Effect upon obligation. - Once the choice is made

by the debtor (or by the creditor or by a third person as the case
may be), the obligation ceases to be alternative from the moment
the selection has been communicated to the other party. From
that moment, both debtor and creditor are bound by the selection.
In other words, the debtor can only comply with his obligation
by performing the prestation which has been selected, while the
creditor can only demand compliance in accordance there with. "An
election once made is binding on the person who makes it, and he
will not therefore be permitted to renouncc his choice and take an
alternative which was at first opened to him "Ise
ArL 1202, The debtor shall lose the right of choice when
among the prestations whereby he is alternatively bound,
only one is practicable."i')
When Only One Prestation Is Practicable. - According
to the above article, when among several prestations whereby the
debtor is alternatively bound, only one prestation can be performed
because all oftheothers are impracticable, the debtor loses his right of
choice altogether. In other words, the obligation loses its alternative
character; it becomes a simple obligation. The provision ttf the abovtr

article, however, must be distinguished l'rom tht' provision of'the

second paragraph ol Art. 1200. Under thc first, there is only one
prestation which can be performed; under lhe second, lhere are still
t,wo or more which can be performed. Under the first, the obligation
is converted into a simple one because the debtor loscs his right of
clection; under the second, the obligation is still alternative because
the debtor can still exercise his right of election.

Art. l20S.Ifthrough the creditor's acts the debtor cannot

make a choice according to the terms of the obligation, the
latter may rescind the contract with damages.r6l
When Choice Is Rendered Impossible.
- The above article
in the Spanish Civil Code. The rule,
however, is logical. Since the dcbtor's right of choice is rendered
ineffective through the creditor's fault, his only possible recourse
will be to bring an action to rescind the contract with damages.

rlues not have any counterpart

Ara. 1204. The creditor shall have a right to indennity

for damages when, through the fault of the debtor, all the
things which are alternatively the object of the obligation
have been lost, or the compliance of the obligation has
hecorne impossible.
The indernnity shall be fixed taking as a basis the value
of the last thing which disappeared, or that of the service
which last became impossible.
Damages other than the value ofthe last thing or service
rnay also be awarded,r6'

Art.

Guan Oan vs. (i'trlrrr\, lrrsrrri,'),1 {

(liril (rri,llrlr)l:rl
Clivil Code. 195(i litl , t, llrli
Mrrrlrrr' 7. i,l, I'1,rl Ilr]
r'"Arl I l l'1, St,lrrr,,l, t trrlt ,'1,
'5"3 Capistrrrno,

r,. lti I'lrrl 511:l

.lr l:ll Ii, Ilrls:rrrrclllrrt

Until then the responsibility of the debtor shall

governed by the following rules:

I

he shall

r'"n

| /r)

the choice has been expressly given to

rkrbtor.

15rOng

1205. \Yhen

he creditor, the obligation shall cease to be alternative from

I.he day when the selection has been cornmunicated to the
I

be

Ifone ofthe things is lost through a fortuitous event,

perforrn the obligation by delivering that which the

rl ILll' rit'.,rrilr ( rvrl( rrL.

rrr

rrrrrlrlrrl lirrrrr

t'il

Arts.

I)II'I,'!]RENT KINDS

oBl,lcATI()Ns

120:J-1205

Ot.'

ORI,I(iA'II0NS

Art.

1206

Altornative and l.'acultaIivc a)blirrt ions

creditor should choose from among the remainder, or that

which remains if one only subsists;
(2) If the loss of one of the things occurs through the
fault of the debtor, the creditor may claim any of those
subsisting, or the price of that which, through the fault of
the former, has disappeared, with a right to damages;
(3) If all the things are lost through the fault of the
debtor, the choice by the creditor shall fall upon the price of
any one of them, also with indemnity for damages.
The same rules shall be applied to obligations to do or
not to do in case one, some or all of the prestations should
become impossible,t'i'r

Effect of Loss of Objects of Obligation. - It is evident

that Art. 1204 is applicable only to a case where the right of choice
belongs to the debtor, while Art. 1205 is applicable only to a case
where the right belongs to the creditor. In other words, the first
article is the general rule, while the second is the exception.
What is the effect upon the obligation if one or some or all of
the things or prestations which are alternatively the object of the
obligation have been lost or cannot be complied with? The answer
to this question must depend upon two lactors or circumstances
first, whether the right of choice belongs to the debtor or to the
creditor, and second, whether the loss or impossibility was due to a
fortuitous event or to the fault of the debtor.

Idem; If right of choice trelongs to the debtor. - If the

right of choice belongs to the debtor and the loss or impossibility is
due to a fortuitous evcnt, then the provisions ofArts. L174,7262 and
1266 of the Code are applicable. The debtor cannot be hcld liable
firr darnages. Consequently, if one of the things is lost or one of the
prestations cannot be performed by reason of tr fortuilous evcnt,
the debtor must still comply with the obligation by dclivering or
performing that which he shall choose from among the rt'maindcr; if
all ofthe things, except one, are lost, or all of thc prestrrt.ions, t'xccpt
one, cannot be performcd by rcason of ir ftrrtuitorrs cvcrt.. t.lrt'<iclrtor
must still comply with his ohligrrl.iorr lrv tlclivr.ring or pr.rfirrrrrirrg
"

Art llllli.

Sttr'r'r,1,

i r\rllitrl,. rr rrr,rlrlirrl l"rrrr

t'i'.,.

that which remains; and if all of the things .rre lost or all ol the
prestations cannot be performed by reason ol a fbrtuitous event, the
debtor is released from the obligation.

But if the loss or impossibility is due to the fault ol the debtor,

then the provisions of Art. 1204 are applicable. Consequently, if all
of the things are lost or all of the prestations cannot be performed
due to the fault of the debtor, the creditor shall have a right to
indemnity for damages. Such indemnity shall be {ixed taking as a
basis the value ofthe last thing to be lost or that ofthe service which
last became impossible. However, ifone, or more, but not all, ofthe
things are lost or one or some, but not all, ol the prestations cannot
be performed due to the fault of the debtor, the creditor cannot hold
the debtor liable for damages. This is so because the debtor can still
comply with his obligation.

Idem;

Ifright ofchoice

belongs to

creditor,

Ifthe right

ofchoice belongs to the creditor and the loss or impossibility is due to

ir frrrtuitous event, then the provisions ofArts. 1174,'i262 and 1266,
rvhich are reiterated in No. 1 of thc second paragraph of Art. 1205,
rrre applicable. The debtor cannot be held liable. Consequently, what

had been stated in the preceding section can also be applied here.

But if the loss or impossibility is due to the fault of the debtor,

hen the provisions of Nos. 2 and 3 of the second paragraph of Art.
I 205 are applicable. Consequently, il all of the things are lost or all
,rl the prestations cannot be performed due to the fault ofthe debtor,
the creditor may claim the price or value of any one of them with
indemnity for damages. However, if one or some, but not all, of the
lhings are lost, or one or some, but not all, of the prestations cannot
lrc performed due to the fault of the debtor, the creditor may claim
I

without any liability on the part ofthe debtor

lirr damages or the price or value of that, which through the fault of
tlrc former, was lost or could not be performed, with indemnity, for

rrny ofthose subsisting

rlirmages.

Art. 1206. When only one prestation has been agreed

rrpon, but the obligor may render another in sutrstitution,
l.hc obligation is called facultativc.
Thr. krns or dcterioration of th<'thing intended as a
rrrbrtitrrl.r., through thc nr,gligr.ncc of thc ohligor, docs not
t'i:l

Art.

1206

OBLIGATIONS

render him liable. But once the substitution has been made,
the obligor is liable for the loss of the substitut" orr
of his delay, negligence or fraud.,,
"".oo.rt
Nature of Facultative Obligations. _ According to the
above article, a facultative obligation is defined as a.,
ofiligafion

wherein only one- object or prestation has been ugr"ua up;

Uy tt"
parties to the obligation, but which may be com-plied ,rith
by th"
delivery of another object or the performance of another piestation
in substitution. It is evident that the characteristic feature of
this
type of obligation is that only one object or prestation is
due, but if
the obligor fails to deliver such objeci or to pe.fo.m such p.e"tation,
he can-still comply with his obligation by jelivering u.roit
oU.;""t
or.performing another prestation in substitution. ihus, where
". the
debtor executed a promissory note promising to pay his
lnaetteAness
to the creditor at a specified date and in case oi iailure to do
so, he
shall execu-te a deed of mortgage over a certain property belongrng
to him in favor of the creditor, it was held th"i the oltigrilon
i"
facultative.r6s Consequently, the provisions ofArt. 1206
ofihe Civit
Uode may be applied.

_ Idem; Distinguished from alternative obligations. _

Fecultative- obligations may be distinguished from altei.raiirre

oUtigations in the following ways:

(l)

As to objects due: In facultative obligations only one object

. is due, while in alternative obligations
obj""t" u"" aue.
(2) As to compljance: Facultative "eu"rut
obligations may be complied

with- by the delivery of another object o.-by th" pu""to.-"rr""

ot
another prestation in substitution of that which'is dul, while
alternative obligations may be complied with by the a"tir,"iy
of orr"
of the objects or by the performance of one of tlie p..stationl
wnlcn
are alternatively due.

(3) As to choice: In the first, the right ofchoice pertains only

to the debtor, while in the second, the ,ight of .hni"o'rn,.v pu.t.in
even 1o the credilor or to a third person.
the effect of fortuikn,^ /oss.. In the first, the krss or
. @)_ -As to
impossibility
ofthe object or prcslation which is duc withotrl. rrny
rdaNew

provision.

'sQuizann vs &.(||rXr.n,', r{I

(, (;,,,

t?.l,t.l

t7.t

DIFFEITENT KINDS OF' OI}I,I(iA'I'IONS

AlternaIive and Facultative Obli].artions

Art.

1206

lault ofthe debtor is sufficient to extinguish the obligation, while in

ofall ofthe objects or prestations
which are due without any I'ault of the debtor is necessary to
cxtinguish the obligation.
the second, the loss or impossibility

(5) As to effect of culpo.ble loss; In the first, the culpable loss

o{'the object which the debtor may deliver in substitution before the
substitution is effected does not give rise to any liability on the part
of such debtor; in the second, the culpable loss of any of the objects
which are alternatively due before the choice is made may give rise
to a liability on the part ofthe debtor.
Idern; When substitution takes effect. - Although Art. 1206
with respect to the time or moment when the substitution
will take effect, it is clear that the provision of Art. 1201 can be
lpplied by analogy. Of course, there is no question that the only
one who is empowered to make the substitution is the debtor. In
order that the creditor will be bound by the substitution, however,
it is necessary that he must communicate such fact to the said
creditor. Once the latter has been notified of the substitution, then
the obligation ceases to be facultative; it is finally converted into a
simple obligation to deliver the thing or to perform the prestation
which has been substituted.
is silent

Idem; Effect ofloss of substitute. - Before the substitution

deterioration ofthe thing intended
rrs a substitute, through the negligence of the said obligor, does
rrot render hirn liable.166 Hence, there seems to be an implication
I.hat if the loss or deterioration is through the bad faith or fraud of
lhc obligor, then he is liable. As a matter of fact, Dean Capistrano
sir.ys: "Whether the debtor is liable in case he acts with bad faith,
llrc Code Commission thought it better to leave to the courts
lo decide. However, it may be pointed out that, as a matter of
grrinciple, there should always be liability for bad faith."'67 It must,
Irowever, be observed that if the debtor can be held liable for the
loss or deterioration of the thing intended as a substitute, will this
rrot destroy thc facr.rltative nature of this type of obligation? lt is,
I lrr.ref<rre, submitted that whatever may be the cause of the loss
or deterioration of the thing intended as a substitute, such loss or
lr,l t'riorirt,ion sh:rll not rcndcr thc dclrt.or liallleis made by the obligor, the loss or

r""Arl l:l{rli. t,r'r :4, ('rvll (

r"rill irt'r'lrirr,.('rvrl (ink."xl'.
lllSll l,l,l .1, lllt

l'l

tt

Art

1206

Art.

OBLIGATIONS

DIFI'ERENT KINDS OF OBLIGATIONS

Joint and Solidary Obligations

Once the substitution has been made, however, the debtor shall
be liable for the loss or deterioration of the substitute on account of
his delay, negligence or fraud.r63 This rule is logical because once

such and 12) moncomunid'ad solidaria. In other words, the

Spanish system recognizes two species of multiple obligation,
namely, the apportionable joint obligation and the solidaryjoint

the substitution is made, the obligation is converted into a simple

one with the substituted thing or prestation as the object of the
obligation.

joint obligation.

obligation. The solidary obligation is, therefore, merely a lbrm of

"The idea of the benefit of division as a feature of simple

joint obligation appears to be a peculiar creation of Spanish

Section 4.

Joint and Solidary Obligations

Concept.

- When there is a concurrence

creditors or of two or more

of two or more

debtors in one and the same obligation,

the obligation may be either joint (obligaci6n mancomunada) or
sol\dary bbligaci6n soliduriu). Ajoint obligation may be defined as
an obligation where there is a concurrence of several creditors. or
of several debtors, or of several creditors and debtors, by virtue of
which each of the creditors has a right to demand, and each of the
debtors is bound to render, compliance with his proportionate part of
the prestation which constitutes the object ofthe obligation. In other
words, each ofthe creditors is entitled to demand the payment ofonly
a proportionate part ofthe credit, while each ofthe debtors is liable
for the payment of only a proportionate part of the debt. A solidary

obligation, on the other hand, may be defined as an obligation where

there is a concurrence of several creditors, or of several debtors, or
of several creditors and several debtors, by virtue of which each of
the creditors has a right to demand, and each ofthe debtors is bound
to render, entire compliance with the prestation which constitutes
the object of the obligation. In other words, each of the creditors is
entiUed to demand the payment of the entire credit, while each of
the debtors is liable for the payment ofthe entire debt.l6e

Idem; Comparative jurisprudence. - In the case of

Jaucian us. Querol, rT0 the Supreme Court had occasion to discuss the
comparative jurisprudence on the subject. According to the Court:
"In Spanish law the comprehensive and gt:neric tcrm
by which to indicate multiplicity of obligations arising liorn
plurality ofdebtors or creditors, is ntttrun ntu niclanl , which l.r,rnr

includes (1) mancomunicl.orl si.rttltlt or rtttrrtttntttnirlrrrl propt,rly

tsArt.

1206, par. 2,

'd'qArt. 1207, (livi1

1m38

Phil. 707.

livil { lrlr.

(ixIl'i il l 1||,lrr. ,ll' l,il . t't,

I lti

t;5 (;(;

jurisprudence. No such idea prevailed in the Roman law, and it

is not recognized either in the French or in the Italian system.
"The conception is a badge ofhonor to Spanish legislation,
honorably shared with the Spanish-American, since French and
Italian codes do not recognize the distinction or difl'erence just
expounded between the two sorts of multiple obligation. (Giorgi,
Theory ofObligation, Span. Ed., Vol 1, p. 77).
"Considered with reference to comparative jurisprudence,

liability in solidum appears to be the normal characteristic

of the multiple obligation, while the benefit of division in the
Spanish system is an illustration of the abnormal, evidently
resulting from the operation of a positive rule created by the

lawgiver. This exceptional feature of the simple joint obligation

in Spanish law dates from an early period; and the rule in
question is expressed with simplicity and precision in a passage
transcribed into the Nouisima Recopilocitin follows:

"If two persons bind themselves by contract, simply and

not otherwise. to do or accomplish something, it is thereby to be
understood that each is bound for one-half, unless it is specified
in the contract that each is bound in solid.um' or it is agreed

among themselves that they shall be bound in some other

manner, and this notwithstanding any customary law to the
contrary. x x x'(Law X, Title I, Book X, Nouislma Recopilaci6n'
copied from law promulgated at Madrid in 1488 by Henry IV).

"The foregoing exposition of the conflict between the

juridical conception of liability incident to the multiple
obligation, as embodied respectively in the common law system
and the Spanish Civil Code, prepares us for a few words of
comment upon the problem of translating the terms which
we have been considering from English into Spanish or from
Spanish to English.
"The Spanish expression to be chosen as the equivalent
of thc l.)ng)ish word "joint" or "jointlv" must, of course' depend
rr;xrrr ilrl iri'a to hc convcycrl; Illl(l il lrrllsl bo rcmombered
t.hrl llr,rrrll('r Ir lx'l.r'rrrrrlrrllrl rttity Irl lttt crrtttrci:rtion t'ithcr

t'

1206

A.tt. 1207

OBLIGATIONS

DIFFERENT KINDS OF OBLIGATIONS

Joint and Solidary Obligations

of a common Iaw conccption or of a civil law idea. In Slrarrul

us. Tayabas Land Co. an.d Ginainati (3? Phil. Rep. 655), a
judge of one of the Courts of First Instance in these lslands
rendered judgment in Dnglish declaring the defendants to be
'jointly' liable. It was held that he meant 'jointlv' in the sense

and not solidary. Consequently, where the obligation is silent with

respect to the nature or character of the right of the creditors or of
ihe liability ofthe debtors, each ofthe creditors is entitled to demand
only for the payment of his proportionate share of the credit, while
cach of the debtors can be compelled to pay only his proportionate
share ofthe debt.r?'?Thus, ifA, B and C had executed a promissory
note binding themselves to pay an indebtedness ofP9,000 to X, Y, and
Z. since the note is silent with respect to the character of the right
of the creditors as well as the liability of the debtors, the obligation
is, therefore, presumed to be joint.t?3 Upon maturity of the note the
only right of each creditor would be to demand for the payment of
his proportionate share of the credit, which in this particular case
is presumed to be P3,000.r?a Each debtor, on the other hand, can
be compelled to pay only for his proportionate share of the debt.
'l'herefore, ifX, for instance, will proceed against A for payment, the
only amount which he can collect from the latter would be P1,000.
( lonsequently, if he wants to collect his entire proportionate share
of P3,000, he must proceed not only against A, but also against I

A].t. 1207

of 'm.ancomunacktmenle' because the obligation upon which the

judgment was based was apportionable under Article ll38 (now
Art. 1208) of the Civil Code. This mode of translation does not,
however, hold where the word to be translated has reference to
a multiple common law obligation, as in Article 698 ofthe Code

ofCivil Procedure. Here it is necessaty to render the word 'joint'

by the Spanish word.'soliclaria.'

"In translating the Spanish ward, 'mancomunada' :.r,lo

English a similar difficulty is presented. In the Philippine
Islands at least we must probably continue to tolerate the
use of the English word 'joint' as an approximate equivalent,
ambiguous as it may be to a reader indoctrinated with the ideas
of the common law. The Latin phrase pro rala is a makeshilt
the use of which is not to be commended. The Spanish word
'solldario'is properly rendered in English by the word tolidary,'
though it is not inaccurate here to use the compound expression
loint and several.' The use ofthe Latin phrase 'in solidum'is also
permissible. We close these observations with the suggestion
that a person writing in English may at times find it conducive
to precision to use the expanded expression 'apportionable joint
obligation' and 'solidary joint obligation' as conveying the full
juridical sense of 'obligaci1n mancomunada' and'obligacion
so l ida

r i a,' t e sp ecliv

ely."

Art. f2O7, The concurrence of two or more creditorE or

of two or more debtors in one and the same obligation does
not imply that each one ofthe foraner has a right to demand,
or that each one of the latter is bound to render, entire
compliance with the prestation. There is a solidary liability
only when the obligation expressly so states, or when the
law or the nature ofthe obligation requires solidarity.'7,
Nature of Collective Obligations in General, According

to the above article, when there is a concurrence of several creditors

or ofseveral debtors or ofseveral creditors and debtors in one and the
same obligation, there is a presurnption that the obligati0n is.joint

rrnd C.

There are, however, three exceptional

where collective obligations are solidary and not

Idem; Exceptions.

ases or instances
joint. They are:75rst, when the obligation expressly states that there
is solidarity; second, when the law requires solidarity; and third,
when the nature of the obligation requires solidarity.lTs In a1l of
l.hese cases, each creditor is entitled to demand for the pa1'rnent
ol the entire credit, while each debtor can be compelled to pay for
l.he entire debt. Thus, if,4, B, and C are solidarily bound to pay an
indebtedness of P9,000 to X Y, and Z, anyone of the creditors can
proceed against one, or some, or all of the debtors for the payment
ol the entire credit.r?6

Before the first exception can be applied, the solidary character

rrl the obligation must be made in express terms.177 It is not, how-

'r'!Pimentel vs. Gutierrez,14 Phil.49;White vs. Enriquez, 15Phil 113;Agoncillo

s Javier, 38 Phil. 424; Ramos vs. Gibbon, 67 Phil. 371; Inciong, Jr' vs Court ofAp-

lrrrls, June 26, 1996, 25? SCRA 580.

""Art. 1297, Civil Code.
'r'Art. 1208. Civil Code.

'"Art.
'?'Art. 1137, Spl|nish

('ivil(ixl,.. I', rrrrrlrlirrl

I 711

Ii,rnr

1207,

Civil

Code.

rlJArl. l2l(;, (livil Code.

r"(i('n7,rlu vB l,u Previsorrr I"ilit,inr',74 l'hil. ltiS

lTll

Aft. I207

OBLIGAfIONS

DII.-}'I.]RENT KINI)S OF OBI,I( ;,,\'I'IoNS

J(rint and Solidary Oblis,'i.ions

ever, necessarv that the agreement shall employ precisely the word
"solidary" in order that the obligation will bc so: it is enough that
the agreement will say, for example, that each one of them can be
obligated for the aggregate value of the obligation.'7s Thus, where
the debtors agreed to pay the obligation 'Jointly and severally,,,1?e
or "individually and collectively"rs0 everyone of them can be held responsible for the payment of the entire obligation. Another example
is where the promissory note expressly states that the three signatories therein are "jointly and severally liable." Any one, some or all of
them may be proceeded against fbr the entire obligation. The choice

obligation requires it. Thus, in a certain case. the Supreme Court

is left to the solidary creditor lo determine against whom he will

enforce collection. (lnciong, Jr. us. Court of Appeals, June 26, jgg6,
257 SCRA 580.)
Examples of the second exception are those provided for in
Arts. 927, 7824, 1971, 1915, 2746, 2757 , anc12194 of the Civil Code.
Another example would be that provided lbr in Art. 110 ofthe Revised
Penal Code regarding thc liability of principals, accomplices, and
accessories of a felony.

Examples of the third exception are obligations arising from

criminal offenses and torts. The responsibility of two or more
persons guilty of a criminal offense or liable for a tort is solidary.
This is so because of the very nature of the obligation itself. It must
be noted, however, that under Art. 110 ofthe Revised penal Code. it
is expressly stated that the responsibility of principals, accomplices,
and accessories, each within their respective class, is solidary, and
under Art. 2194 of the Civil Code, it is also expressly stated that
the responsibility of two or more persons liable for a quasi-delict is
solidary. Apparently, the obligations comprehended by the exception
on which we are commenting are also jncluded within the scope of
the second exception. There are, however, some torts which cannot
be classified as quasi-delicts because the element of negligence
does not enter as an essential requisite, such as interferences with
human relations, nuisances, infringements of copyrights, patent, or
trademark, unfair competition and several others. Responsibility of'
joint tortfcasors in such cases is solidary because the naturc of tht,
I'aYsmart &

(ir

vs. Sirlin,,,i

rl'Ilarot vs (l nri)rr 7 l'1,,1

FL'O

l,',1 lt|l|,rri', ',:t I't,il rior

:,1

|nirl ( ,,rr"r'{ 11 |'l (',' ! , l,[ l,

,.irt,,. ( A. itri ( )t]

I i'{t )

(;irl

:11

Art

1208

declared:

"lt may be statod as a gencral rule that joint tortfeasors

are all the persons who command, instigate, promote, encourage,
advise, countenance, cooperate in, aid ot abet the commission of
a tort, or who approvc ol it al'ter it is done firr their benefit. They
are cach liable.rs principirls to lhe same cxtent and in the same
manner as if lhey had performed the wrongful act thcmselves
Joint tortfeasors are jointly and severally liable for thc tort
which lhey commit. The person injured may sue all of them or

any number less than all. Ilach is liable for the whole damage. It
is no defense for one sued alone, that the others who participated
in the wrongful act are not joined with him as delendants; nor
is it any excuse fbr him that his participation in the tort was

insignificant as compared with that ofthe others."r3l

If from the law, or the nature of the wording

of the obligations to which the preceding article refers the
Art.

1208,

contrary does not appear, the credit or debt shall be presumed

to be divided into as many equal shares as there are creditors
or debtors, the credits or debts being considered distinct
from one another, subject to the Rules of Court governing
the rnultiplicity of suits.i"':

Joint Divisible Obligations' - The most fundamental effect

joint
of
divisible obligations is that each creditor can demand only
lbr ttre payment of his proportionatc share of the credit, while each
debtor can be held liable only for the payment of his proportionate
share of the debt.'"lr As a corollary to this rule, the credit or debt
shall be presumed, in the absence of any law or stipulation to the
(r)ntrary, to be divided into as many shares as there are creditors
rrnd debtors, the credits or debts being considered distinct from
onc another, subject to the Rules of Court governing multiplicity of
srr its.1s1 From these rules which are expressly declared by the Code, it
nccessarily follows that a joint creditor cannot act in representation
r" Wr)r.r.slcr vs Ocanrpo. 22 I'hil 42. To 1.h(' rtrnx (|ftrct: Verzosa vs Lim, 45
l'l'rl 4l{i;'li,r'l,rtL,svs.Soquos,('r\. 1{ioll.(1r,7 l'{il8i Padillavs l lipomi.t, CA, C R.
No 1272 ll l'i l, l?. l1)51
(lrvrl('rr!. rrr rrr,xlrlit!l li,rrtr
" Arl Il:18. l'it'rrrislr
" Arl ll'oi { r\rl(inlt
'rArl ll'l)l( {'r\rl ( rxl|

lHt

Art. 1208

OBI,ICATIONS

I)IFFERENT KINDS OF OBLICA'I'IONS

Joint and Solidary Obligations

of the others; neither can a joint debtor be compelled to answer for

the liability of the others. Consequently, if there is a breach of the
obligation by reason of the act of one of the debtors, the damages
due to its breach must be borne by him alone.185 Similarly, if there
is any defense which is purely personal to one of the debtors, he
alone can avail hirnself of such defense.rs6 Thus, it has been held
that payment or acknowledgment by one of the joint debtors will
not stop the running ofthe period of prescription as to the others.18?

to bejoint (Art. 1207,CC). Consequently, the only right ofsuch

creditors if they proceed against A alone for payment would be
to collect from him P3,000, which is his proportionate share in
the obligation. (Ibid.) Once the amount is collected, it will then
be divided equally among X, Y and Z. This is so because, under
the law, in the absence of any legal provision or stipulation of
the parties to the contrary, the credit or debt shall be presumed
to be divided into as many equal shares as there are creditors
or debtors, the creditors or debts being considered distinct from
one another lArt. 1208, CC).

Art. 1208

This doctrine is in conformity with the opinion of Manresa to the

effect that one of the necessary consequences of the rule stated in
what is now Art. 1208 ofthe Civil Code is that "the interruption of
prescription by the claim of a creditor addressed to a single debtor
or by an acknowledgment made by one ofthe debtors in favor ofone
or more ofthe creditors is not to be understood as prejudicial to or in
favor ofthe other debtors or creditors."188
Problem No. 1. - A, B, and C executed a promissory note
binding themselves to pay P9,000 toX, Y, and Z. The note is now
due and demandable.

(a)

Can the creditors proceed against

alone for

payment ofthe entire obligation? Why?

(b)

Suppose

that X

proceeds against

alone for

payment, how much can he collect? Wlly?

(d) Suppose that C is insolvent, can A and B be held

liable for his share in the obligations? Why?
(e) Suppose that the obligation was about to prescribe,
but X wrote a letter to A demanding for payment of the entire
debt, will this have the effect of interrupting the running of the
period of prescription? Whv?

Ansuer

(a)Ihe creditors cannot proceed againstA alone

for the payment of the entire obligation. Since the promissory

note is silent with respect to the right ofthe creditors as well as
the liability ofthe debtors, the obligation is, therefore, presumed
'3sMoller's Ltd. vs.

Srrilc.l)? I'hil

1)85

Manresa, 5th Ed., llk. l, |l 426

l3tAgoncillo vs. JnviIr,:18 I'l'rl 1:?.1
1368

's8 Mrrnrcsrr 182,

cil'!l i',

Ax,'rrr.rli,

vr
I82

,,,rvk,r, :lrl

the previous paragraph. The most that he will be able to collect

from the three debtors will be his proportionate share in the

obligation which is P3,000 (Arts. 1207,1208, CCl. As far as the
debtors are concerned, because of the principle that in joint
obligations the credit or debt shall be presumed to be divided
into as many equal shares as there are creditors or debtors, the
credits or debts being considered distinct from one another fArr.
1208, CC), the liability of each will be only with respect to his
share in the P9,000. Consequently, X can collect only P1,000
from A, P1,000 from B, and P1,000 from C.

(c) IfX

Can X alone proceed againstA, B and C for pay'rnent

of the entire obligation? Whv?

(c)

(b) X alone cannot proceed against A, B and C for the

payment of the entire obligation fbr the same reason stated in

l,l"l

.12,1

proceeds againstA alone for payment, the most

that he will be able to collect will be only P1,000, The reason has
already been stated in the previous paragraph.

(d) IfC is insolvent, his co-debtors

cannot be held liable

for his share in the obligations. This necessarily follows from

the principle that in joint obligation, the credit or debt shall
be presumed to be divided into as many equal shares as there
are creditors or debtors, lhe credits or debts being considered
distincl from one another (Arl. 1208,CC).

(e) The demand made by X upon A, for the purpose

of interrupting the running of thc period of prescription, shall
prejudice the latteronly, but notthc otherdebtors. Consequently,
if after ten ycars, X Y and Z should bring an action against A,
R and C to collect the debt, the defense of prescription would be
absolute insofar as B and C are concerned, but partial insofar as
A is concerned. In other words, A can still be compelled to pay
PI,000 to X. The reason for this is the fact that the principle of
nrrrtrr:rl rrgcrrcy is not applicablc in .ioint obligations. (Agoncillo
t,s. Ju litr. :lt'1 I'h i l. 424. )
I'nltltrtt No.2. ,{. I utrlZowt ,4 rrn(l /i I'12.(X)0 in rr
llrw rrrrrrry olrlrllrrlrorrs lxist irr llrin cttsr'. who

.ioirrl oIrIryirrIrorr.

ltt:l

Arf.. l2og

Art. 1209

OBLIGATIONS

DIFFERENT KINDS OF OBI,IGA'I'IONS

Joint and Solidary Obligations

are the parties in each obligation and for how much? Why?

compelled to answer for the liability of the others. However, unlike

joint divisible and solidary obligations, in this tlae of obligation,
which isjoint with respect to the parties and indivisible with respect

(1971 Bar Problem)

Ansuer - There are six obligations in the above case. The

parties and the amount ofeach obligation are:

(1)
(2)
(3)
(4)
(5)
(6)

X as debtor for P2,000 in favor ofA

as creditor;

X as debtor for P2,000 in favor ofB as creditor;

Yas debtor for P2,000 in favor ofA

as creditor;

Y as debtor for P2,000 in favor

ofB

as creditor;

ofA as creditor;

as debtor for P2,000 in favor

Z as debtor for P2.000 in favor of8 as creditor.

The above answers are clearly deducible fuom Art. 1208

of the Civil Code which declares that if the obligation is ioint,
the credit or debt shall be presumed to be divided into as many
equal shares as there are creditors or debtors, the credits or
debts being considered as distinct from one another, subject
tD the Rules of Court governing the multiplicity of suits. Take
the credit of P12,000 for instance. Since there are two creditors
there lv'ill also be two credits of P6,000 for each creditor. In the
case of the debt of P12,000, since there are three debtors there
will also be three debts of P4,000 against each debtor. Now, as
far as A, the first creditor, is concerned, if he wants to collect his
credit of P6,000, he must proceed against all the debtors. Ttrus
he will be able to collect P2,000 from X, P2,000 from y, another
P2,000 from Z. The same is true in the case of B, the second
creditor.

Art. 1209. If the division is impossible, the right of the

creditors may be prejudiced only by their collective acts, and
the debt can be enforced only by proceeding against all the
debtors. If one of the latter should be insolvent, the others
shall not be liable for his share.l8e
Joint Indivisible Obligations. -

A joint

indivisible
obligation is in a sense somewhat midway between the ioint and
the solidary obligation, although it still retains the two fundamental
characteristics of the former
- lirst, that no creditor can act in
representation of the othcrs, irn(l sr(.)n(1, that n0 dcbtor t':rrr l){r
r3'gArt. I I ii{}. Sprrnrxh { rrvrl {

to the fulfillment of the obligation, the following characteristics are

also present:

(1) If there are two or more debtors, the fulfillment

(2) If there are two or more creditors, the concurrence or

collective act of all the creditors, although each for his own share,
is also necessary for the enforcement of the obligation. This is so
because the obligation isjoint, and therefore, a creditor cannot act in
representation ofthe others, and it is also indivisible, and therefore,
not susceptible of partial fulfiIlment. It must be noted, however,
that, unlike the case of the debtors, the Code is silent with respect
to this point, although At. 1209 states that the creditors may be
prejudiced only by their collective acts.
Idem; Effect of breach. - Since in a joint indivisible obligation, compliance can only be enforced by proceeding against all
of the debtors, it necessarily follows that if one of the joint debtors
lirils to comply with his undertaking, the obligation can no longer
lrc fulfilled or performed. Consequently, it is converted into one of
indemnity for damages. However, the debtors who may have been
leady to fulfill or perform what was incumbent upon them shall not
contribute to the indemnity beyond the corresponding portion ofthe
price of the thing or of the value of the service in which the obligal.ion consists.le2

Idem; Effect of insolvency of a debtor. - Ifone ofthe joint

rlr,lrtors should be insolvent, the others shall not be liable for his

"''Mr"r,.s,,, 5ih tirl , Ilk I, trl).

"'LArI l2lll), ( rvil (ixll'.
r"rArl l,lll,l. ( rvrl ( ixl

i,n
Itl,l

of or

compliance with the obligation requires the concuuence of all ofthe

debtors, although each for his own share.1e0 Consequently, according
to the Code, the obligation can be enforced only by proceeding against
all of the debtors.rel Thus, if A, B, and C obligated themselves to
deliver jointly a certain horse to X, since the obligation is both joint
and indivisible, X can compel its fulfillment only by proceeding
against A, B and C.

.12:.1. .l

l;{i

lrll,

Art.

1209

DIFFEREN'I' KINDS OF OIILIGATIONS Arts. 1210'1211

Joint and Solidary Obligations

OBLIGATIONS

share.rei This rule is, of course, logical because to hold otherwise

would destroy the joint character of the obligation.

The different effects of a joint indivisible obligation with

respect to the debtors may be illustrated by this exarnple: A, B, and
C, partners in business, bind lhemselves jointly to deliver a certain
race horse, worth P300,000, to X at the end of January, 1980. X
can compel the performance of the obligation only by proceeding
against all of the obligors or debtors.rea However, if any one of the
debtors, let us say, A, cannot or refuses to comply with his share in
the undertaking, the obligation is converted into one of indemnity
for damages.rs5 A shall be liable to X lbr his corresponding share of
the price of the horse plus damages, while B and C shall be liable
only for their corresponding shares of lhe price without damages.r!6
IfB is insolvent, the others shall not be liable for the payment of his
share.re? The right ofX as against B will, therefore, be the same as
the right of a creditor against an insolvent debtor.

Idem; Intenuption of period of prescription. If there

are two or more creditors or debtors, will the claim of a creditor
addressed to a single debtor or the acknowledgment made by one of
the debtors in favor of one or more of the creditors be sufficient to
interrupt the period ofprescription? According to one view, since Art.
1209 merely provides that the right ofthe creditors may be prejudiced
only by their collective acts, it can, therefore, be inl'erred that should
the act of a joint creditor be per se beneficial to the others, as for
instance the interruption ofthe period ofprescription, the act ofone
would bc sufficient.re3 According to another view, the act of a joint
creditor which would ordinarily interrupt the period of prescription
would not be valid because the indivisible character ofthe obligation
requires collective action ofthe creditors to be effective. If a written
demand is made by one creditor only, the debtor upon whom the
demand is made cannot pay to him alone; payment must be made to
all. Hence, the act ofone alone is ineflective.r1"' It is submittcd that
the latter view is more logical.
r'g3Art. 1209,

''rAtt.

Civil

Code.

1224. Civil

(ixlr

lll , llk I. r,t, l.lri lr;;

('ivil ("rl, llrl,r; t,l':tlJ:tll.i.rtltrr:

Manr.sa,5lh

',1'4'lhlcnl.in,,,

IIi{;

1210. The

Indivisibility and Solidarity. - The rule stated in the above

,rlt.icle is logical. Indivisibil:ity and solidarity are not identical. They
nr:ry be distinguished from each other in the following ways:
11) As to notrre: Indivisibility refers to the prestation which
.rrstitutes the object of the obligation, while solidarity refers to the
l.grrl tie or vinculum, and consequently, to the subjects or parties of
tlrc obligation.

12) As to requisites: Plurality of subjects is not required in

r

nrlivisibility, while it is indispensable in solidarity.

(il) As to effect <tf breach: In indivisible obligations, when the

,,lrligation is converted into one of indemnity for damages because
',l lrreach, indivisibility of the obligation is terminated; in solidary
,,lrligations, when there is liability on the part ofthe debtors because
,,1 Irreach, the solidarity among the debtors remains.20r
Art. 1211. Solidarity rnay exist although the creditors
the debtors may not be bound in the same manner and
Irv the same periods and conditions.'o'?
rrn<l

Solidarity may be active (among

passive (among debtors), or mixed (among creditors and

Kinds of Solidarity.
,

n'rlitors),

,l.lrtors).20r Solidarity of creditors (active solidarity) may be defined

rrr rr tie or vinculum existing among several creditors of one and

llrc same obligation by virtue of which each of them, in relation
l. lris co-creditors, possesses the character of creditor only with
r,.spt'ct to his share in the obligation, but in relation to the common
,lr.lrlor or debtors, represents all of the other creditors. Solidarity
,,1 rlr,lrtols (passive solidarity), on the other hand, may be defined
,r, rr I ic or vinculum existing among several debtors of one and the
.,rrrrrc obligation by virtue of which each of them, in relation to his
,, rlclrlors, possesses the character ofdebtor only with respect to his
'"'Nr,w grrovision.
'18 M,'rrr( sr, ,')tl, l')rl ,

BrArt. 1209. (livil ( l(nl(

r'38

indivisibility of an obligation does not

give
rrccessarily
rise to solidarity. Nor does solidarity of
il.self imply indivisibility.'?oo
Art.

l)',

lt ,,l ,,!,i ,,tt,,,r,1

llk. l, 1r. '1{ill

' Ar I I I,llt, Slrrrnislr { ixI
'1S,'r',h,7lii,r',r"rln),(:r,"1,r.'lit'r ,l, lis
l

n'l

Ol)li,{aciorxrs,

V(t

1,p.8S}

Arts. 1210-1211

DIFFERENT KINDS OF OBLI( lA1'l{

Joint and Solidarv Obligations

OBLIGATIONS

share in the obligation, but in relation to the common creditor or

creditors, represents all of the other debtors.,0a

Idem; Effect

of active solidarity in general. -

The

most fundamental effect of active solidarity is the creation of a

relationship of mutual agency among the solidary creditors by
virtue of which each creditor is empowered to exercise against the
debtor or debtors not only the rights which correspond to him, but
also all the rights which conespond to the other creditors, with the
consequent obligation to render an accounting of his acts to such
creditors. In the words of Manresa:
"The essence of solidarity among the creditors consists of
the power ofeach to claim and exercise the rights ofall, with the
consequent obligation to pay to each what properly corresponds
to him upon the exercise ofsaid rights. There is, therefore, equal
mutual representation from which none can be excluded without
destroying the solidary character of the obligation. Hence, the

essential featurc of this obligation is that of mutual agency

among the active subjects ofthe obligation, who are empowered
to exercise not only their own rights, but also that ofthe others,
against any debtor or debtors, with the consequent obligation to
render an accounting of his acts to the other creditors."205

It is this relationship ofmutual agency which is the basis ofthe

different rules stated in Arts. 1212 to 1215 ofthe Code.
Idem; Effect of passive solidarity in general. In passive
solidarity, each solidary debtor, insofar as the creditor or creditors
are concerned, is the debtor of the entire amount; however, with
respect to his co-debtors, he is a debtor only to the extent ofhis share
in the obligation.206 Hence, the most fundamental effect of solidarity
among the debtors is the liability of each debtor for the payment
of the entire obligation, with the consequent right to demand
reimbursement from the others for their corresponding shares oncc
payment has been made.

Idem; id. - Distinguished from suretyship.

- Passive solidarity must be distinguished from solidary guaranty (surctyship).

()IrIr1Irrer,rrrcs.
'zoaGiorgi, Tcotia dr. l:rs
l.
.
'058 Manrcsr, 51lt

ll'l llk
2r'd:l (lastrn,7th
l.il . r' '/rl

Vrl I, t'!. !X), I l5

t,l lrll .lil:l

I

Ht{

)NS

Arts l210'1211

According to the second paragraph ol Art. 2047 ol the Code, a solidary guarantor or slf,rety (ftodor in solidum) is a person who binds
himself solidarily with the principal debtor. Hence, it is evident that
a solidary debtor and a surety are similar in the sense that they are

both solidarily liable to the creditor for the payment of the entire
obligation. Strictly speaking, however, they may be distinguished
from each other as lollows;

(1)

A solidary debtor, unlike a surety, is liable not only for

the payment of the debt of another, but also for the payment of a
debt which is properly his own;

(2) If a solidary debtor pays the entire amount of the

obligation, he has a right to demand reimbursement from his codebtors of the shares which correspond to them in the obligation,
whereas if a surety pays the entire amount of the obligation, he has
rr right to demand reimbursement from the principal debtor of the
cntire amount that he has paid; and
(3)

The rights ofa solidary debtor are more limited than those
of a surety. Thus, in passive solidarity an extension of time granted
by the creditor to one of the solidary debtors for the payment of the

obligation without the knowledge or consent of the other solidary

rlebtors would not have the effect of releasing the latter from their
obligation,'zo? but in suretyship such an extension granted to the
lrrincipal debtor would release the surety from the obligation.':03
While a guarantor may bind himself solidarily with the principal
rlcbtor, the liability ofa guarantor is different fiom that ol a solidarv
tlcbtor. Thus, Tolentino explains guarantor is different from that of
rr solidary debtor. Thus, Tolentino explains: "A guarantor who hinds
lrirnself in solidum wilin the principal debtor under the provisions
.l the second paragraph does not become a solidary co-debtor to
:rll intents and purposes. There is a difference between a solidary
crr debtor and a fiador in solidum (surety). The latter, outside of
llrc liability he assumes to pay the debt before the property of the
lrrincipal debtor has been exhausted, retains all the other rights,
:rctions and benefits which pertain to hirn by reason ol the fonsrz;
rvlrilr.rr solidary co-debtor has no other rights than those bestowed
'" lrr,h,rrrstr & (,,.

\s

Y,,1,).:l.l

'"'VrlIr r , t i,r, r,r ll,rsrlrrr'.

l'lrrl

lll l'lrrl

1r'/8

t:ll;,

I r{1r

1'jt, v,

r,:,'rr vs ( lirli'(r,. ('A ;l{; Olll (;trz

Arts. 1210-1211

l)ll'FERENT KINIIS OF

OBLIGATIONS

OB1,I(iA'|IONS Arts

1210-1211

Joint and SolidarY Obligations

upon him in Section 4, Chapter 3, Title t, Book IV ofthe Civil Code.,'

(Inciong, Jr. vs. Court ofAppeals, June 26, 1996, 25? SCRA 580).

Idem; Effect of varied conditions or periods.

The

vinculum or bond which binds the creditors and the debtors

in
solidary obligations may be either uniform or varied, depending
upon whether they are bound in the same manner and by the same
conditions or periods or not.20s Consequently, the relationship of
solidarity is not destroyed by the fact that the obligation ofone debtor

is conditional, the obligation of another is with a term or period,

and the obligation of a third is pure. Neither is the character of
solidarity destroyed if the debtors are bound by different conditions
or by different periods. A creditor in such cases, can still commence
an action against anyone of the debtors for compliance with the
entire obligation minus the portion or share which corresponds to
the debtor affected by the condition or period.rro Thus, ifA, B, and C
borrowed P60,000 from X binding themselves jointly and severally
to pay the entire obligation, but in the promissory note executed
by them there is a stipulation that in the case ofA, the obligation
shall become due and demandable on June fE, lg72; in the case of
B, it shall become due and demandable on June lS,l9T4; and in the
case of C, it shall become due and demandable on June 15, 1926,
and subsequently, immediately, after June 15, 1972, X brought an
action for collection of the entire obligation against A alone because
of the latter's failure to pay despite repeated demands, will the

action prosper? Undoubtedly, the obligation here is solidary. This is

clear from the provision ofArt. 1211 ofthe Civil Code. However, in
solidary obligations of this type, the right of the creditor is limited
to the recovery ofthe share owed by the debtor whose obligation has
already matured leaving ln :iuspense his right to recover the shares
corresponding to the other debtors whose obligations have not yet
matured. This restriction does not destroy the solidary character
of the obligation, because, ultimately, he can still compel one and
the same dcbtor, if that is his wish, to pay the entire obligation.
Therefore, in the instant case, X can collect only P20,000 from A,
which is the latter's share in the obligation. He shall have to wait for
June 15, 1974, whenB's obligation shall have matured, and forJune
15, 1976, when Cs obligation shall havr.irlso matured. On June 15.

'jo'4 Sanchcz lionrarr 5o

?r'rlnchausti & ('i' vr Y

l,' :ll

l'1,,1

l9?4, he can collect P20,000 from either A or B. On June 15, 1976,

he can again collect another P20,000 from either A or B or C.

Inchausti & Co,, vs. Yulo

34 Phil. 978
On August 12, 1909, six brothers and sisters, defendant
among them, executed an instrument admitting their solidary
indebtedness to the plaintiff for P253,446.42, at 10%, interest

per annum, payable in five annual installments, the first

installrnent to be paid on June 13, 1910. Because of default in
the payment of the first installment, plaintil! in accordance
with the acceleration clausc cxpressly agreed upon, brought this
action on March 27, 1911, against CregorioYulo for the payment
ofthe entire indebtedness plus interests. Subsequently, on May
12, 1911, three ofthe debtors, Francisco, Manuel and Carmen,
entered into an agreement with plaintiff, evidenced by a notarial
instrument, by virtue of which the :rmount of the indebtedness
was reduced to P225,000, at 6% interest per annum, payable
in eight annual installments, the first installment to be paid
on June 30,1912. Some of the questions now raised are the

following: (1) Can the plaintiff sue Cregorio Yulo alone,

considering that there are otber dcbtors? (2) What is the effect
ofthe partial remission ofthe debt made by the creditor in favor
ofthree ofthe debtors? (3) Wbat is the effect ofthe extension of
time for payment granted by the creditor to three ofthe debtors?
The Suprcme Court, speaking through Chief .Iustice Arellano,
held:

"With respcct to the question as to whether the plaintiff

can sue the dcfendant alone, it cannot be doubted that, lhe
debtors, having obliged themsclves in solidum, the creditor can
bring its action in ,oro against any one of them, inasmuch as
this was surely its purpose in demanding that the obligation
contracted in its favor should be solidary, and even though the
creditor may h.rve stipulated with some of the solidary debtors
diverse installments and conditions, as in this case, Inchausti
& Co. did with its debtors Manuel. Francisco and Carmen Yulo
through the instrument of May 12, 1911, lhis does not lead to
the conclusion that the solidarity stipulated in the instrument of
August 12, 1909, is broken, as wc already know the law provides

,r;s

lhat'solidarity may exist cvcn though the dcbtors are not bound
in thc s:rrnc manner lnd frrr thc samc pcriods and under the
snnu,crrrrrlil.rons." (Art.. 1140. (iivil (lxk' ,ol{r Art. 1211, New
( iiv il (',r1. t

l!)rI

llr

Arts. 1210-1211

ORLIGATIONS

"With respect to the question involving the eftecl of the

partial remission. the obligation boing solidary. the remissjon
of any part of the debt made by a creditor in favor of one or
more of the solidary debtors necessarily benefits the others.
and therefore, there can be no doubt that, in accordance with
the provision ofArticle 1143 (now Art. 1215) ol the Civil Code.
the defendant has the right to enjoy the benefits of the partial
remission ofthe debt granted by the creditor.
"Wherefore, we hold that although the contract of May 12,
1911, has not novated that ofAugust 12, 1909, it has atTected that

contract and the outcome of the suit brought against Gregorio

Yulo alone for the sum of P253,44b.42; and in consequ-ence
thereof, the amount stated in the contract of August 12, 1909.
cannol be recovered but only that slated in the contract ofMav
12. l9l l. by virtue ofthe rr.mission g.ranted to the three ofthe
solidary debtors in this instrument, in conformity with what is
provided in Article 1143 (now Art. t2t5), Civil Code, cited by the
creditor himself.

DIFFERENT KINDS OF OBI,IGATIONS Arts. 1210-1211

Joint and Solidary Obligations

It has been said in the brief of the appellee that the

prematurity of the action is one of tbe defenses derived
from the nature of the obligation, according to the opinion of
the commentator of the Civil Code, Mucius Scaevola, and
consequently, the defendant Gregorio Yulo may make use ofit in
accordance with Article 1146 (now Art. 1222) of l]ne Civil Code.
It may be so and yet, taken in that light, the effect would not
be different from that already stated in this decision; Gregorio
Yulo could not be freed from making any payment whatever but
only from the payment ofthe part ofthe debt which corresponds
to his co-debtors Francisco, Manuel and Carmen. The sarne
author, considering the case of the opposing contention of two
solidary debtors as to one of whom the obligation is pure and
unconditional and as to the other it is conditional and is not
yet demandable, and comparing the disadvantages which must
flow from holding that the obligation is demandable with those
which must follow if the contrary view is adopted, favors this
solution of the problem.

"With respect to the question involving the effect of the

extension of time for payment granted to the other solidary
debtors. Cregorio Yulo cannot allege as a delence to thc action
that it is premature. When the suit was brought on March 22.
l9 I l. lhe fi rst installment of the obligation had alrnady mat ured
on June 30, 1910, and with the maturity of this installment,
the first not having been paid, the whole debt had matured,
according to the express agreement of the parties. Neither could
he invoke a like exception for the shares of solidary co-debtors
Pedro and Concepcion Yulo, thcy being in identical condition as
he. But as regards Francisco, Manuel and Carmen yulo, none
of the installment payable under their obligation, contracted
later, had as yet matured. The first payment, as already stated,
was to mature on June 30, 1912. This exception or personal
defense of Francisco, Manuel and Carmen yulo ,as to that part
of the debt for which they were rcsponsible' can be set up by
Greqorio Yulo as a partial defense to the action. ttre part of
the debt for which these three are responsible is three-sixths
of P225,OOO, or P112,500, so that Gregorio yulo may claim
that, even acknowledging that the debt for which he is liable
is P225,000, nevertheless not all of it can now be dcmanded of
him, for that ofit which pertains to his co-debtors is not yet duc,
a state ofaffairs which not only prevents any action against the
persons who were granted the term which has not yt,t mal.urcd,
but also against the othcr solidrrr.y dcbtors who lrcing orr|r,r.r.rl to
pay could not now sue ftrr rr corrl rilrr I iorr, :rnrl lirr t lt is lcrrson I lrr,
action will bc only rrs l.{) I'll:l.I'l)t)

"'There is a middle ground (he says), from which we can

safely set out, to wit, that the creditor may of course demand
the payment of his credit against the debtor not favored by any
condition or extension of time.' And further on, he decides the
question as to whether the whole debt may be recovered or only
that part unconditionally owing or which has already matured,

lltll

llr;l

saying'Without failing to proceed with juridical rigor, but

without failing into extravagances or monstrosities, we believe
that the solution of the dilnculty is perfectly possible. How? By
limiting the right of the creditor to the recovery of the amount
owed by the debtor bound unconditionally or as to whom the
obligation has matured, and leaving in suspense the right to
demand the payment of the remainder until the expiration
of the term or the fulfillment of the condition. But what then
is the e{Tect of solidarity? How can this restriction of right be
reconciled with the duty imposed upon each one ofthe debtors to
answer for the whole obligation? Simply this, by recognizing in
the creditor the power, upon the performance ofthe condition or
the expiration ofthe term, of claiming frorn any one or all ofthe
debtors that part of the obligation affected by those conditions.
(Scaevola, Civil Code, 19, 800 and 801)
"It has been said also by the trialjudge in his decision that
Gregorio Yulo for the whole
dcbt of P253,445.42 he cannol, rccovt:r ftom Francisco, Manuel
onrl ( hrrnon Yulo t,hrrt pitrt. ol l hc rrmount which is owed by
Lhltrr lx,r'rrrtsc l.hcy rrlc olrlrgcrl lo lr;rY only l'225,000 rlnd t.his

if a judgment be entered against

Arts l2lO-l2l l

Art.

OBLIGATIONS

DIFFERENT KINDS OF OBLIGAl'I0NS

Joint and Solidary Oblig:r1.iors

in eight installments none of which was due. For this reason he

was of the opinion that he (Gregorio Yulo) cannot be obliged to
pay his part ofthe debt before the contract of May 12, 1911, may
be enforced, and consequently, he decided the case in favor of
the defendant, without prejudice to the plaintiff proceeding in
due time against him for his proportional part of thejoint debt.

Art. 1212. Each one of the solidary creditors rnay do

whatever may be useful to the others, but not anything
which may be prejudicial to the latter.'!r'
Effect of Beneficial and Prejudicial Acts' As a conse-

"But in the first place, taking into consideration the

conformity ofthe plaintiffand the provision ofArticle 1143 (noro
Art. 1215) of lhe Civil Code it is no longer possible to sentence the
defendant to pay the P253,445.42 of the instrument of August
12, 1909, but ifanything, the P225,000 ofthe instrument of May
12, 1911- In the second place, neither is it possible to curtail the
defendant's right ofrecovery from the signers ofthe instrument
of May 12, 1911, for he wasjustly exonerated from the payment
of that part of the debt corresponding to them by reason ofthere
having been upheld in his favor the exception of an unmatured
installment which pertains to them. In the third place, it does
not seem just. Mucius Scaevola considers it 'absurd,' that, there
being a debtor who is unconditionally obliged as to whom the
debt has matured, the creditor should be forced to await the
realization ofthe condition (or the expiration ofthe term). Hence,
the contract of May 12, 1911 has affected the action and the suit.
to the extent that Gregorio Yulo has been able to make in his
favor the defense of remission of part of the debt, thanks to the
provision ofArticle 1143 (nou) Art. 1222), because it ls a defense
derived liom the nature of the obligation, so that although the
said defendant was not a party to the contract in question,

yet because of the principle of solidarity he was benefited by

it. The defendant Gregorio Yulo cannot be ordered to pay the
P253,445.42 claimed from him in the suit here. because he has
been benefited by the remission made by the plaintiffto three of
his co-debtors, many times named above.

"Consequently, the debt is reduced P225,000. But, as

cannot be enforced against the defendant except as to the
three-sixths part which is what he can recover from hisjoint codebtors Francisco, Manuel, and Carmen, at present judgment

it

can bc rendered only as to the P112,500. We, therefore, sentcnce

the defendant Gregorio Yulo to pay the plaintiff Inchausti &

Co. Pl12,500, with the interest stipulated in the instrument of
May 12,1911, from March 15, 1911, and the legal intercst on
this interest due, from the timc tlrlt it w.rs cl:rimcd jrrdiciully in
accordance with Article ll0\l( ok: Art.2212)olthe(iivil (ixlr,
without any specirrl lirrrlirrg rs l.o (:rlst. 'l'h{r.iud{tn(,nt lpp{'rl(rl
from is revcrsrri. So olrL.r'r.rl "

(luence ofthe relationship ofmutual agency existing among the solirlary creditors, each one of them may do whatever may be useful or
lx:neficial to the others, but not anything which may be prejudicial
l.o the latter.'t' Hence, each solidary creditor may demand the paynlent or performance ofthe entire obligation from one, some or all of
t.he debtors.2l3 Such a demand will have the effect of benefiting not

only the solidary creditor who made it, but also the other solidary
( reditors. Consequently, if the entire obligation is paid, the latter
will have the right to demand Irom the creditor who received lhe
lra)4nent the shares corresponding to them in the ohligation.2ta As
lrrr as prejudicial acts are concerned, we must distinguish between
t he effect of such acts upon the relationship ofthe solidary creditors
with the debtor or debtors, and the effect upon the entirely different
|olationship of the solidary creditors among themselves. As far as
l.he debtor or debtors are concerned, a prejudicial act pedormed by a
solidary creditor shall be valid and binding because of the pdnciple
ol mutual representation which exists among the creditors; howev('r, as far as the solidary creditors are concerned, the creditor who
t)erformed the act shall incur the obligation of indemnifying the oth,,rs for damages.2r5 There is, therefore, no incompatibility between
the rule regarding prejudicial acts stated in Art. 1212 and the rule
r{rgarding novation, compensation, confusion or remission stated in
Art. 1215. The first refers to the eflect of prejudicial acts upon the
n'lationship of the creditors among themselves; the second refers
lo the effect upon the entirely diflerent relationship of the creditors
with the debtor or debtors. It is clear that the Code sanctions the eflicacy of prejudicial acts such as novation, compensation, confusion
,rl remission as far as the debtor or debtors are concerned, but not
rrs far as the other solidary creditors are concerned.2l6 Consequently,
r( cording to Art. 1215, the novation, compcnsation, confusion or rer

'"Art.

1141, Spanish

Civil Code, in nn)dilicd li'rm.

:rrArt. 1212. (livil Code.

:'r

rrts. 121,1, l2l(i. (livil

ritArl
"1i:l

r|r8

It4

1212

1215.

t),'r

2.

(ixL.

(livil (l,xl,'

(1,'rl,l'r 'tll' l,il., p

?2

Ml'"'f,o' r'll' l.il . Ilk. l. t)t' .l:l:l .l:lil

ltll,

Arts. 1213-1214

DIFI'ER!]N'I' KINI)S OI' OIJI,I(;A1'IoNS

OBLIGATIONS

mission of the debt shall result in the extinguishment of the obligation, but the solidary creditor responsible for the act shall be liable
to the others for the share in the obligation corresponding to them.

Art. 1213. A solidary creditor cannot assign his rights

without the consent of the others.2r;
Effect ofAssignment ofRights. The rule or precept stated
in the above article is based on the opinion of Manresa and other
Spanish commentators, that since active solidarity is essentially a
mutual agency, and therefore, is predicated upon mutual confidence
which implies that the personal qualifications ofeach ofthe solidary
creditors had been taken into consideration when the obligation was
constituted, it is only proper that a solidary creditor cannot assign
his rights without the consent ol the others.

What is the effect if a solidary creditor assigns his rights

without the consent of the other solidary creditors? The answer to
this question shall have to be qualilied. If the assignment is made
to anyone of the other solidary crcditors, it is clear that there is no
violation of the precept stated in Art. 1213, because in such case
there can be no invasion of the per sonal or confidential relationship
existing among the solidary creditors. However, if the assignment
is made to a third person, there would be a clear violalion of the
precept, in which case the other solidary creditors, as well as the
debtor or debtors, are not bound to recognize the validity or the
efficacy of the assignment. This is, of course, without prejudice to
the liability of the creditor-assignor to the other solidary creditors
for damages which may have been incurred by them as a result of
the prohibited assignment.

ArL 1214. The debtor rnay pay any one of the solidary
creditors; but if any dernand, judicial or extrajudicial, has
been made by one of them, payment should be made to him.rr"
Effect of Demand by a Creditor. Any solidary crcditor

t trl( ,r1,. ,,' r"il'li,rl l,'rn,

llx;

1215

rule stated in Art. 7212 that each creditor may do what is

lrcneficial to the others, Such a demand may be either judicial or
cxtrajudicial. In such case, payment shall be made only to the
creditor who made the demand and to no other. However, in the
;rbsence of any judicial or extrajudicial demand, payment may be
rnade by the debtor to anyone of the solidary creditors.'re
rrl the

In case of mixed solidarity, a judicial or extrajudicial demand

rvould prohibit the debtor upon whom the demand is made from
rrraking a payment to any creditor other than to the one who made
lhe demand, This prohibition, however, does not extend to the other
rlcbtors upon whom no demand has been made and so each of such
rlcbtors can still validly tender payment to a creditor other than to
the creditor who made the demand.r:n

Art. 1215. Novation, compensation, confusion or remission of the debt, made by any of the solidary creditors or
with any of the solidary debtors, shall extinguish the obligaIion, without prejudice to the provisions of Article 1219.
The creditor who may have executed any ofthese acts, as
well as he who collects the debt, shall be liable to the others
for the share in the obligation corresponding to them."1

Effect of Novation. - Novation is the change or substitution

an obligation by another, resulting in its extinguishment or
nrodification, either by changing its object or principal condition, or
lrv substituting another in place of the debtor, or by subrogating a
t hird person in the rights of the creditor.'z2' The peculiar feature of
t his mode of extinguishing obligations is that while it extinguishes
tlrr. obligation, it creates a new one in lieu ofthe old. Hence, the
lirrbility of the solidary creditor who effected the novation to the
,,ther solidary creditors shall depend upon the character of the
rrcw obligation which is created. If the novation of the obligation
r. r-'ffected by changing its object or principal condition, the new
,,lrligation which is created may be either prejudicial or beneficial

,l

may demand the payment or perlir rnr i r rrct: ol tlrc obligution liotn rxrc,
some or all of the debtors. 'l'his is, ol r'rrrrrsr', ir Irgicrrl (.{,ns(rlu(,n( (.
zrrNew provisiorr
rBArt. I1,12, Slrrrrrrrlr

Art.

Joint and Solidary Oblisatr(Jrs

'r"Art. I2ll. ('ivil (l.,dc.

""8 Mln,r' si,. 5r l, Ild., tlk. l.l, 1:t7
' 'All I l lil. Slr;rrrrsL ( ivil { rxL.
I 8 M,rrrt,,',r. l,tlr Iirl ,llk l,p ll'l

|ti

Arl. I215

OBI,IGA'fIONS

to the other solidar.y creditors depending upon the circumstances

of each particular case. If it is prejudicial, the solidary creditor
who efI'ected the novation shall reimburse the others for damages
incurred by them; if it is beneficial and the creditor who effected the
novation is able lo secure performance of the new obligation, such
creditor shall be liable to the othem fbr the share which corresponds
to them, not only in the obligation, but also in the benefits. If the
novation is effected by substituting another person in place of the
debtor, thc solidary creditor who effected the novation is liable for
the acts ofthe new debtor in case there is a deficiency in performance
or in case damages are incurred by the other solidary creditors as a
result of the substitution. If the novation is effected by subrogating
a third person in the rights of the solidary creditor responsible for
the novation, the obligation ofthe debtor or creditors is not in reality
extinguished, because in this type of novation the relation between
the other creditors not substituted and the debtor or debtors is still
maintained. However, if the novation is effected by subrogating a
third person in the rights of all the solidary creditors, the creditor
responsible frrr such novation is liable to the other creditors for the
share which corresponds to them in the obligation."s
As a general rule, extension of time for the payrnent of the obligation given by the creditor to a solidary debtor does not constitute a novation v'ith respect to the other solidary debtors, because
in order that an obligation may be extinguished by another which
substitutes it, it is necessary that it should be so expressly declared

or that the old and the nerv obligalion are incompatible with each
other on every point. However, if the creditor proceeds against the
solidary debtor or debtors to whom no extcnsion was given for payment of the whole obligation, such debtor or debtors can set up the
partial defense of extension of time as regards that part of the debt
for which the debtor or debtors to whom the extension was given are
responsible.'21 In suretyship, however, the rule is that an extension
of time granted to the principal debtor by the creditor without the
consent of the surety extinguishes the latter's liability;"5 but where
a surety is liable for different payments, such as installments or
)'\1brcl., pp. 141 1,15.

(ixlqln,l,,,,rst,lil.o vs YLrL,,il4 l'hil lrTtl

"'Art. 1222.(rivil
('ivrl
(i!1,.4,i,,'1,, l', tf,,L,rr (i, vs. lliz,rrr. 15 l'hrl I'il2r Nrlron,rl
"sArt.2079.
Bank vs. V|rrgul.h. 5(l l'lrl :11,:l
I

l,l.l

DIFFERENT KINDS OF OBLICATIONS

Joint and Solidary Obligations

Art l2l5

rents, or upon a series ofpromissory notes, an extension of time as to

will not affect the liability ofthe surety for the others.226

one or more

Effect of Compensation and Confusion. Compensation

is a figurative operation ofweighing two obligations simultaneously

in order to extinguish them to the extent that the amount of one

is covered by the amount of the other.2'1 Confusion, on the other
hand, refers to the merger of the qualities of creditor and debtor
in one and the same person with respect to one and the same
obligation.2'8 If the confusion or compensation is partial, there may
be some doubt as to the part ofthe obligation to which the confusion
or compensation shall be applied. In such case, the question is
resolved by appllng the rules established in this Code regarding
application of pa)'ment. This is, of course, without prejudice to the
right of the other creditors who have not caused the confusion or
compensation to be reimbursed to the extent that their rights are
diminished or affected. Ifthe confusion or compensation is total, the
obligation is extinguished altogether and what is left is the ensuing
liability for reimbursernent within each group, the creditor causing
the confusion or compensation being obliged to reimburse the other
creditors, and the debtors benefited by the extinguishment of the

obligation being obliged to reimburse the debtor who made the

confusion or compensation

possible.'?2e

Effect of Rcmission. - Remission is an act of pure liberality

by virtue of which the creditor, without having received any
compensation or equivalent, renounces his right to enforce the
obligation, thereby extinguishing the same either in its entirety or
in the part or aspect thereof to which the remission refers.2:ro The
rcmission or condonation referred to in Art. 1215 may be total or
partial, effected by one, some, but not all, of the solidary creditors
in favor ofone, some or all ofthe debtors. Whether total or partial,
lhe obligation is extinguished in its entirety or in that part or aspect
t.hereof to which the remission refers, giving rise to a liability on
l.hc part of the creditor or creditors responsible for the remission to
rtrimburse the others for the share in the obligation corresponding to

"nvilla vs. Garcia Bosque, 49 Phil. 126.

r"8 Manll''tl',5th Ed., Bk. 1, p.7l:1.
"*4 Stnchr.z ll(,man 421.
r'!"8 Mrnrt.,{', a,lh ltd., Ilk. l, pt,.4,1:l 414.

I t,1)

Art l2l5

DIFFERENT KINDS OF OBI,I(;41'I0NS

Joint and Solidary Oblieatiors

OBLIGATIONS

them. However, as among the creditors responsible for the remission,

such

liability

does not arise.'z3'

As far as the solidary debtors are concerned, the effects of

remission may be summarized as follows:

(1) If the remission covers the entire obligation, then the

obligation is totally extinguished and the entire juridical relation
among the debtors is terminated altogether. This is true whether the
remission is for the benefit ofall ofthe debtors or ofonly one of them.
As a matter offact, the Code in Art. 1220 expressly declares that the
remission of the whole obligation, obtained by one of the solidary
debtors, does not entitle him to reimbursement from his co-debtors.
This rule is based on the character of remission as an act of pure
liberality. In reality, the remission of a debt is a donation. Hence,
if the whole obligation is condoned through the efforts of a solidary
debtor or for his benefit, he is not entitled to any reirnbursement
from his co-debtors.2r2
(2) If the remission

is for the benefit of one of the debtors

covers his entire share in the obligation, he is completely
released from the creditor or creditors, but he is still bound to his
co-debtors. Consequently, if one of the latter subsequently pays the
balance of the obligation which is not condoned and he proceeds
against the others for reimbursement of their respective shares in
the obligation, but one of them is insolvent, the debtor for whose
benefit the remission had been effected, shall still have to share in
the portion which corresponds to the insolvent.
and

it

it

(3) Ifthe remission is for the benefit ofone ofthe debtors and
covers only a part ofhis share in the obligation, his character as a

solidary debtor is not affected; it continues both with respect to the

creditor or creditors and with respect to the other debtors.

Whether the remission covers the entire share of a solidary

debtor in the obligation or only a part thereof, if the creditor or
creditors proceed against any one of the other solidary debtors for
the payment of the entire obligation, such debtor can always avail
himself of the defense of partial remission.2'r'r

rhere would always be the possibility that the creditor might

li'audulently condone the share of a solidary debtor whom he desires
to fhvor even aller the debt had already been totally paid by another
solidary debtor.2rr5

Effect of Payment to a Creditor. - If one of the solidary

rt:ditors is able to collect the entire amount of the debt from one
(,r some or all of the solidary debtors, the obligation is totally
lxtinguished, although there arises a consequent obligation on
lris part to render an account to his co-creditors. Under the law,
lrr.can be held liable to the others for the share in the obligation
, orresponding to them.':ir6
,

Art. 1216. The creditor may proceed against any one of

the solidary debtors or some or all of them simultaneously.
'l'he demand made against one of them shall not be an obstacle
lo those which may subsequently be directed against the
others, so long as the debt has not been fully collected.'?3?
Effect of Derrrand upon a Debtor. - Since any one of the
urlidary debtors can be held liable for the payment of the entire
,'lrligation, it is but logical that the creditor may proceed against
,rry one or some or all of them simultaneously.23s Furthermore, the
,lr.rnand made against one ofthem shall not be an obstacle to those
wlrich may subsequently be directed against the others so long as
tlrr, debt has not been fully collected.'?3e Thus, where the guarantor
I'rrrds himself solidarily with the principal debtor to pay the latter's
,lr.lrl, he cannot and should not complain that the creditor should
llrln'rrfter proceed against him to collect his credit. This is so
I'r,r'rrrrse the creditor may proceed against any one of the solidary
,lr.lrlors or against all of them simultaneously, the fact that action
lrr rs lrcen brought or that payment has been enforced against one of
'"4r1.. 1219. 0ivil Code.
"4r1.. 121,.,,

,:itArl. 1222,C'vrl (irrL, lrrrlhrrrrrr,\]

ri' vr \''rt,' it,tl,l'rt

r'irr.2. (livil (ixk

Spi,nish (livil (ixl' , r"

'r',rl'ln
'Afl- l: l(; { r\rl(ixlc.

'Arl

44:t

1216

It must be noted, however, that the above rules cannot be

;rpplied in case the debt had already been totally paid by anyone of
lhe solidary debtors before the remission was effected.'!3l Otherwise,

"8 MirDresa,5th Fld., Ilk. 1, pp. 142'14:1.

tttIbid., pp. 44tt

Art

14,14.

1r'/8

2(n)

"r.o

rl li,rDr

()RI,I(}ATIoNS

DIFFERENT KINDS OF OBI,I(]A1'I0\S

Joint and Solidnry Obligatiorrs

them not being a bar thereto so long as there remains a balance to

collect."0 And it cannot be contended that the failure of the creditor
to include the solidary guarantor or surety as a delendant in the
Iirst suit implies a waiver of his right of action against such surety,
since under the law the bringing of an action against the principal
debtor to enforce the payment of the obligation is not inconsistent
with, and does not preclude, the bringing of another to compel the
surety to fulfill his obligation under the surety agreement.'at

"A surety is not even entitled as a matter of right to be given

rrotice of the principal's default. Even if it were otherwise, demand
,rn the sureties is not necessary before bringing suit against them
since the commencement of the suit is a sufficient demand. On this
lxrint, it may be worth mentioning that a surety is not even entitled,
;rs a matter of right, to be given notice of the principal's default.

Art. l2l6

A creditor's right to proceed against the surety exists independently of his right to proceed against the principal. Under Article
1216 of the Civil Code, the creditor may proceed against any one of
the solidary debtors or some or all ofthem simultaneously. The rule,
therefore, is that if the obligation is joint and several, the creditor
has the right to proceed even against the surety alone. Since, generally, it is not necessary for a creditor to proceed against a principal

in order to hold the surety liable, where, by the terms of the

con-

tract, the obligation ofthe surety is the sarne as that ofthe principal,
then as soon as the principal is in default, the surety is likewise in
default, and may be sued immediately and before any proceedings
are had against the principal. Perforce, in accordance with the rule
that, in the absence of statute or agreement otherwise, a surety is
primarily liable, and with the rule that his proper remedy is to pay
the debt and pursue the principal for reimbursement, the surety
cannot at law, unless permitted by statute and in the absence of
any agreement limiting the application of the security, require the
creditor or obligee, before proceeding against the surety, to resort to
and exhaust his remedies against the principal, particularly where
both principal and surety and equally bound. (Palmares us. Court of
Appeals, March 31 , 1998, 288 SCRA 426.)
The Supreme Court further stated in the aforementioned case
of Po.lmares us. Court of Appeals that "in this regard, we need only

to reiterate the rule that a surety is bound equally and absolutely

with the principal, and as such, is deemed an original promissor
and debtor from the beginning. This is bccause in suretyship, thertr
is but one contract, and the surety is bound by the same ilgro('mcnt
which binds the principal. In esscncc, the crtntract ofa sttrt'tv stirrl,s
with the agreement.
2r"l,a Yohrrnr

:'rl'hil Nrrl

ru rrIl,r r;'/ lrlrtl lsll

vr t orrllr0r, t ,\ :l; {tll {;r1 illfll'

vs VrrI

l}nrrk

:l0ll

Ar1. 1216

Inasmuch as the creditor owes no duty of active diligence to take

ofthe interest ofthe surety, his mere failure to voluntarily give
rrrformation to the surety ofthe default ofthe principal cannot have

crrre

llre effect of discharging the surety. The surety is bound to take

rrrtice of the principal's default and to perform the obligation. He
cirunot complain that the creditor has not notified hirn in the absence
,rl a special agreement to that effect in the contract of suretyship."

"A surety is liable as much as his principal is liable and

rrlrsolutely liable as soon as default is made without any demand
rrlxrn the principal whatsoever or any notice of default. The alleged
lrrilure ofrespondent corporation to prove the fact ofdemand on the
grrincipal debtors, by not attaching copies thereof to its pleadings,
rs likewise immaterial. In the absence of a statutory or contractual
llrluirement, it is not necessary that payment or performance of
lrrs obligation be first demanded of the principal, especially where
would have been useless; nor is it a requisite, before
t)r)ceeding against the sureties, that the principal be called on to
,rcrrrunt. The underlying principle therefore is that a suretyship
r,' ir direct contract to pay the debt of another. A surety is liable
.rs rnuch as his principal is liable, and absolutely liable as soon as
,I lrrult is made, without any demand upon the principal whatsoever
,,r irny notice of default. As an original promisor and debtor from
tlrc bcginning, he is held ordinarily to know every default of his
,l, rnand

1'rr

rrcipal. (Palmcrres us, Court of Appeals, supro.)

As a general rule, the death of either the creditor or the debtor

,lols not cxtinguish the obligation. Obligations are transmissible to
tlr lrcirs, except when the transmission is prevented by the law,
tlrr. stipulation of the parties or the nature of the obligation. Only
,,lrligrrtions that are personal or are identified with the persons
t lrcrrrsclves are extinguished bv death. Sec. 5 of Rule 86 ofthe Rules
t'l ('r)rrrt expressly allows thc pnrst'cution of money claims arising
lr,rrr ir contrirct against thr,r'slirl.r'ol ir dcrrrirsed debtor. Itrvidently,
tlr,,sl cltinr rrrc nol. t,xtingrrislrr.rl Wlrrrl is cxl,ingrrished is only the

:l(|:l

Art. 12t8

OBI,IGATIONS

DIFFERENT KINDS OF OBI,I(;A'I'I0NS

Joinl and Solidary Obligations

obligee's action or suit filed before the court, which is not then acting

the debt is due, no interest for the intervening period may be

demanded.

Arl

121?

as a probate court.

As provided in the case ol Stronghold Insuron.ce Cttmpany

Inc us. Republic-Asahi Glass CctrporcLtion, whatever monetary
liabilities or obligations the deceased Jose Santos (the proprietor
of JDS Construction which executed a performance bond jointly
and severally with petitioner-surety) had under his contracts
u'ith respondent Republic-Asahi were not intransmissible by their
nature, by stipulation or by provision of law. Hence,death did not
result in the extinguishment ofthose obligations or liabilities, which
merely passed on to the estate of Santos. Death is not a defense that
he or his estate can set up to wipe out the obligations under the
performance bond. Consequently, the petitioner as surety cannot rrse
his death to escape its monetary obligation under its performance

bond. As a surety, petitioner is solidarily liable with Santos in

accordance with Art. 201?, in relation to Art. 1216 ofthe New Civil
Code. The surety's obligation is not an original and direct one for the
perlbrmance ofhis own act, but merely accessory or collateral to the
obligation contracted by the principal. Nevertheless, althougb the
contract of a surety is in essence secondary only to a valid principal
obligation, his liability to the creditor or promisee of the principal is
said to be direct, primary and absolute: In other words, he is directly
and equally bound with the principal.

The death of the principal debtor will not work to convert,

nullity the substantive right of the solidary creditor.
Despite the death of the principal debtor, respondent may still
sue petitioner alone, in accordance with the solidary nature of the
latter's liability under the performance bond. Under the law and
jurisprudence, respondent may sue, separately or together, the
principal debtor and the petitioner , in view of the solidary nature
of their liability lStronghold Insurance Company Inc. us. Republic
Asahi GLass Corporation, suprtt).
decrease or

Art. l2l7, Pa;zrnent made by one of the solidary debtors

extinguishes the obligation. If two or more solidary debtors
offer to pay, the creditor may choose which offer to accept.
He who made the payment rnay claim from his co-dchtora

only the share which corresponds to ca<:h, with the intrrrclt

for the payment already rnade . lf thc prrymcnl. is madrr lxrfirrr'

When one of the solidary debtors canno! because of

his insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co'debtors' in
proportion to the debt of each.z'z
Art. 1218. Payment by a solidary debtor shall not entitle
hirn to reimbursernent from his co-debtors if such pa5rment is3
made after the obligation has prescribed or becorne illegal'u
Efrect of Payment by a Debtor' - Where payment is rnade
partial
lry one ofthe solidary debtors, the effect is either the total or
entire
the
whether
upon
, xtinguishment ofthe obligation depending
,,rnoo.tt

ofth"

debt is paid or only a part thereof-

Once payment is made by one of the solidary debtors. of the

, ntire obligation, there arises immediately a consequent right of
such debtoito claim from his co-debtors the share which corresponds

with interest for the paJ''ment already made

What would be the efl'ect if one of the solidary debtors cannot'

ofhis insolvency, reimburse his share to the debtor paying
llx'obligation? According to the third paragraph ofArt 1217, such
lx.<:rruse

form'
"'rArt. I145, Spanish Civil Code, in modified
''rNew prcvision.

(bde.
"'Art. l2l?, par.2, (livil

'r!'Art. 1218. (livil Oodc.

r{'Art. l2l'l, l,ar. 2, (livil

(ixi'
2Ofr

:.ro.l

2a

This right'
after
payment
the
makes
who
debtor
to
a
available
is
not
lr,,*ever,
t.he obligation has prescribed or has become illegal-us
As a rule, the interest shall be computed from the time pa''rnent
wls made. However, if payment was made before the debt became
]6
rlrre, no intcrest durlt g [h. i.tt"*"ning period may be demanded
lrr other words, the interest shall be computed not lrom the time
became due' Thus' if
t)iryment was made, but from the time the debt
jointly
to X for P30'000
severally
and
,4, B, and C became indebted
1, 1966'
paid
December
on
be
,,u.1 it *as agreed that such debt shall
candemand
he
1,
1965,
on
June
lrrrt instead plyment was made by A
lr,,m B and'i only the share which corresponds to each in the
obligation, as well as the interest thereon from December 1, 1966'
kr them,

An. r2l8

OBLICATIONS

I)IFFI]RENT KINDS OF 0BI,I( iA'I'IONS

Joint and Solidarv Obli*ations

share shall be borne by all his co_debtors,

in proportion to the debt
ofeach-

On June 30, 1938, Berkenkotter, Wilson and Gulick

executed a promissory note promising jointly and severally
to pay an indebtedness of P90,000 to the Chartered Bank of
India, Australia and China plus interest. Payment was made
by Berkenkotter in November, 1944, with Japanese military
notes. After liberation, Berkenkotter demanded from his codebtors reimbursement oftheir shares in the obligation. Wilson
tendered payment ofP625.51 in accordance with the Ballantyne
Schedule, which Berkenkotter refused to accept. As a result,
Wilson deposited the amount in the Courl, of First Instance of
Manila and finally brought this action to compel Berkenkotter to
accept the said amount. The question now is - is the Ballantyne

. This action was originally instiluted by plainriff bank

against McCoy and six other solidary debtors
io; i;"';;;;;
I

6.000.

wh;,, ;;

;;; *;; ffi;;;;

:1,:_,lq*t:d
neanng,
McLjoy"*s
entered int.o a compromise with plainl,ifl and
paid P12.000 in sarisfaction of the iebr.
Th" ;;";;;";;;'i"
McCoy be substituted as plaintiff againsi;;;;;;;";:
-defendants
_canfor the purpose of
ner tnelr proportionate shares "ompelhngi-;;"r'"",rn'U"^.il
in the obligation?

Schedule applicable?

Held: "In several cases involving the application of the

Ballantyne Sched.ule, this Court has held that said schedule
is applicable to obligations contracted during the Japanese

Held: "By paying oll the claim which was

..
originally the
subject of litigarion. the q1equ1r1x was subrosated
,"-til';j";;.

of

.the

original ptaintiff. and if

occupation wherc said obligations are made payable on demand

or during said Japanese occupation but not after the war or at
a specified date speculating on the continuation or cessation of

tl"

a joint and several liability on the"ituation'*u;;;;iil';

part
qetenoants, the-execuLrix, rrpon
"i"ri"iii"
paying offthe
""i"l.ri
claim, necess"arilv
acqulred the nght to proecute the action forcontribution
aeainsi
her co-defendants. But it is said tf,.t tf," .."naril;;t;il:;
the. executrix was permitred to substituie
ihe
had.the eflect ofchanging the cause of""ii".
original action was founded upon a deb, ,
.,'* ir* , ii,i
bank from the seven defendants. *t,u.u"" "pp.".iiy
"
uho.lii
was paid,-the only right ofaction vestea in
tlru
*uol-t"u
right [o obtain conl,ribution. lt must be ."m"mbo""d"*"c,rt.i*hn*.,*.
orinn3l action had proceeded ," iir.,;"J r*f.",'rf
f
;|it,it"ttre,
Lne oerendants. the court, in giving j
udgrnent. would hav(, taken
account ofthe obligation ofeach tu
t i" p",,p""ii.."i..
share to the pa),rnent,ofthejudgmr.nt.
"o"Lilut"
and wh:rt h,is heen finallu
oone, as the case shapcd itsolfh(.r,,. is l givr.r,fTecl
lo thr.s:rmi.

the war at the time of payment. If the obligation on the part

of Wilson to pay Berkenkotter the amount paid by the latter
to wipe out their debt to the Bank was created during the
occupation, then the Ballantyne Schedule is applicable, but if
said obligation was created before the war, particularly on the

ffirlflf r"i,rf

date when plaintiff and defendant signed the promissory note

in favor of the Bank then the Ballantyne Schedule may not be

""ti;;iy,:i;;;;;;
i;;i;;;il;

applied.
"Counsel for the appellant contends that said obligation
was created in 1938 because by signing ihe promissory note,
Wilson impliedly undertook to pay anyone ofhis co-debtors who
might pay olr the whole debt. He also claims that by paying the

.i

drrctrine seems to bc in direct conllict with the dtrine enunciated in

Berkenkotter that iD a case ofthis sort there is no real case of
,rl'r,'gation. It is submitl.ed, howcver, l.htlt whon thc (l(,urt hold that "the executrix
s irr subro(rl'!l to the rights of thr originlll t)LriItiff " it w:rs only referring, not to subr,rprlion irr ils I'r'hnical scnse, h"l t.', s"l'xlituli(,n 0l I'rrrliris in its pr(,cedural sense.
I

'?{TWilson vs.

Ihrk(,llkr,

,,, ,

.ll ( )tt (r,1 l.l l}

2|tl

{J

lrVilson vs. Berkenkotter

49 Otl. Gaz. l4l0

Bank of the p,I. vs. McCoy

52 Phit. 8:|1

12l

obligation. It was in our opinion a proper casc of substilution of

parties resulting from the subrogation of one of the defendants
to the right of the plaintiff"'?al

, Idem; Nature ofright ofdebtor. _ It must be observed that,

under..the law, before the payment is acrually
.uau, ii"'",gt t of
the solidary debtor to demand reimbursement
ir".
f,i. -_iJi."* i.
merely contingent and conditional. O""" puy-"nft
."
U"un
made. the right becomes real and
"l'"J.'Ju
i;;
;l;
Jii,*i",
,"
favor of the creditor is extingxished, ".i"tir;
but ,ie*
i?lr""t."0
in lavor of the solidarv deh"tor who mua"
" tn" "Sfig*i",
pril"ni. ii"* ,",
therefore, no real case if subrogation.raz

of

Art.

lr'

'r{his

case of Wilson vs.

2n7

Arts. 1219-1220

OBI,IGATIONS

I)IFFFJRENT KINDS OF OBLIGA'I'IONS

Joint and Solidary Obligations

entire loan in 1944 to the Bank, appellant

became a subrogee of
said Bank and the entire credit was transmttted
to hlm wi?i all
the rights inherent therein against the
a"ft""
-^-"'-' ""
persons. (Art. l2l2 _ now Art. t30J. Civ.i
C"d."".g;i""t'lii"a
;

lW".

Alrt, 1221. If the thing has been lost or if the prestation

hns becorre impossible without the fault of the solidary
rkrbtors, the obligation shall be extinguished.

regret to disagree. When appellant paid

the entire
loan plus inrerests in November, 1944,
ih" ;;1"."b;;r;;""
ext ingu i shed. The soli da rv co_debt"."
*"." ;; l;;;;;"r;l;; ;r"
obtigation to the Bank bui a new obligation
was c;?;;;';l;".
'.-ooli#
of the appellant ro enforce hi"
;;"
irr",
is why the appellant to enforce hi"
has based his ctaim nor on rhe
,,
favor.of the Bank by virtue of the proiri"_o
i"i"
co-debtors, but on his having paid the
entire 1".". fi," oiJ""rrt
is not a real case of subrogatio"
because as Manresa savs in a case like
"" "";,";;;;';;'il;i;*
th" p""""r,rih"

"I.i.;s"i;;;

"ti;';;;l;";"ril';;;i""
"bt;;ii;;:;;;;;j';; i!fi

"-r*.ji"in.
o..lJiut

obtigation is. extinguisied

:il;"::'r",':T;..
words, appeuanr does nor. ",t;;;;'
";;,""' ;;"*L #""iri,"
as
b;il;
the shoes of the Bank. He cannot
"l"i,n"d
enfo; rh;;,gr;;;i#.ii;"
created in 1988. The Bank couta
tf," *i,oii';;;;;r"f ;.
loan from any one of the solidary "off
""t
co_JJil,
;;";ilh?:^
orte ofthem. This.
the entire loan.

lhe appellanimay n",

i"i""iu"""""" i"

oira

"In conclusion,
find and hold that the oblieation in
^ of the appelant we
favor
to pay ro him the share oi th;;ilil;
t"
the original loan was created_during the
J"p;;;;"J;i";,
particularly in November 1944, and
i
thisCourt regarding the apptication -","r'.r"1". ri"'#fi#ir
Finding no reversible
i' the d""i"i".;;;;;;;;;;il.
"""oi
same is hereby affirmed.
No costs.,,

oi;;'il;ilil"'i':;.

1219. The remission made by the

, Art._
creditor of the
share
which affects one
ru
"oiiJi"yf,"itiil""j""""
lelelse tfre latter from his responsibility
towards the "",
codebtors,-in ca6e the debr had b";"
them before the remission wss sff641s4.zis
".
Al"t. lZ2O. The remiesion- of the whole obligation,
obtained by one ofthe solidary a"ut".l,
a"""ir"t
r,i_
to reimbursement from his s6_d9[16...r5i)

"r

;;6i;;;iJi"l""Jl""
i"ifil

tuArt. I146. SpfinrBh (

-1\ew pr0vlaxrn.

rv,t

i!t,.

Arl. 1221

Ifthere was fault on the part of any one of them, all shall
lx, responsible to the

creditor, for the price and the pa1'ment

,rf damages and interest, without prejudice to their action
rrgainst the guilty or negligent debtor.

If through a fortuitous event, the thing is loet or the performance has becorne impossible after one of the solidary
rk'btors hae incurred in delay through the judicial or extrajrrdicial demand upon him by the creditor, the provisions of
t he preceding paragraph shall apply.,t'
Effect of Loss or Impossibility of Performance. - The
in the above articles merely reiterate the rules stated
rrr Arts. 1174, 7262, and 1266 ofthe Code. They may be restated as
r

rrles stated

lrrlbws:

(1) If the loss of the thing

or the impossibility of complying

wrth the prestation which constitutes the object of the obligation
,,, not due to the fault of the solidary debtors, the obligation is
,.rlinguished.

(2) If the loss or impossibility is due to the fault ofone of

llrl solidary debtors, the obligation is converted into an obligation of
rrrrkrmnity for damages, but the solidary character ofthe obligation
,,.rnains. The creditor can still proceed against one, or somet
,'r';rll of the debtors for the payment ofthe price, plus darnages,
*rlhout prejudice to the subsequent right of action of the debtor or
, .lrtors who paid to proceed against the guilty or negligent debtor
l,,r reimbursement. This rule may be illustrated by the following
, xrrmple: A, B, and C bound themselves solidarily to deliver thirty
' ,,vans

ofrice, valued at P3,000 to X at a specified date. The rice had

,rln,rrdy been segregated at the time ofthe perfection ofthe contract.
o{ the thirty cavans, however were lost through the fault of C.

'\ll

Wlrrrt are the rights and obligations of the parties? Anyone of the
,lr.lrlors can, of course, be held liable for the palrnent of the price
,'r virlue ofthe rice, plus damages. Hence, ifX decides to proceed
,rllirrnst A alone, undoubtedly, the latter can be held responsible not

Lr ,,r,ntrti,{t ti,r,,r

'r'Arl.

I147. St','nish (livil

(irir.,

"r 'rxxtrli,al

20!l

li)rm

Att.

1222

OI]I,IGA'I'IONS

I]IFFERENT KINDS OF OBI,I(;A'I'IONS

Joint and Solidary Obligati{)ns

only for the price or vaiue of the thirty

cavans of rice, but even Ibr
damages. However, once A
set
ed
his oUtiguiio.,' ;*i, l,u
.has
then proceed against the guirtv
a"rrt"r. c.'i".i*i,nilJi'.i"n,L,
"un
,n"
enLrre amounr which he has paid
ro X, plu. in;;;;;;'*'*

"

(3, If the loss or impossibiliry

is due to a fortuitous event

one of the debtors had already I*rr*j-f.
i"i"v,.lr.," ,n"
obligation is convertcd into an obligJtion
;i i;";;;?;l,..nu*"",

ater

but the solidary character

u,.""99iis.ii""';;;;J":L;,"",

"r.U rr"ra
all ofthe debtors can
.J"p"".tili" i."" ri"lii.", or""
".
but wirhout prejuaice to tne .igrlt
oi""ll#
91,Tu*u"
debtors who paid to proceed against
"iiiJl,"o".
the debtor responsible
for the
delay.
some, or

Arl. 1222. A solidarv rlebtor may, in actions

filed by the
creditor, avait himself oiau def.";;;;;;;;;i..l-"Xo
n"the nature of the oblisatio
of those- which are personal
to him, oi

wr,i"rpu""6,,,it;;il;;:,1"i;A:.1t_:TH..l,T,:,l"X";
";;ir"ri"r-iil"l--a-nd

thereof only as reardJtrat part

latter are responsiS;s.r",

,1"
"f th;;;;f;i"ii..o
to a Solidary Debtor. _ The creditor

Defenses Available
or *editors may proceed u"oin"t uny-Jr
it.,-u-.iiiaro 'j."u.il* o"
all of them simultaneouslv Ior the payrnent
of tf," ol.iie-uil", Uut
whether only one

or alt or il" soliaary ilb;;;.

;:*d j:i;,rir,
solidary debtor mav interoose.2gainst
the claim of the creditor"r,
or
creditors any of the followino aui".,""",
,-,n
nature ofthe obligation; second. t;.rr;;;*;;liiJi
defenses personal to him or
!h1v9r1
pertaining
to his own sharc. /rrrd,. defe""".
;";;"';il" ii,""jrr,_",
!^u:on,{ ?".,::rurds that parr ir," a"lir"l ,ini"t'r'i"'i,".ri".

"r

responsible.r5s

"r"

first are paJ.ment or performance, res.firdrcoln,

"fthewhich
prescrlption.
^_^^^I:i..Ot::those
invalida^te tf,"
violence, intimidation. undue.llflusnss,"o"tru"ilu"i'"" rnl"t,"n.,
fraud, and others of a
similar nature.,5{ Examoles of rhe
other defenses which aie purely personal
to the debtor. t,he ifrira.

s""";;;;;;r;'r, ,ililji"..n

r.ivir rinr,,.,,,,'l'rrri,lr ri,r,,,

;:lfl I1222.t:rvrl
l1l. lt,,l,,"r
( i,,tr., N,,rv,k./
",'Art.
!r l),.t,,r,,r,t.A. t;rIt.(;I/
's(hirxrr'( hr"ntk.r,,t I i
| r 1 . u . l;,,,,
li. r.1,,,,x, tr; t,l,rt
, r r r r r r

ttit)
.t1r,

Art. 1222

the other hand, is merely a partial defensc. Thus, ifa mother and
hcr two minor children had signed a promissory note promising to
pay a certain indebtedness jointly and severally, and subsequently,
the creditor proceeds against the mother for the payment of the
tntire obligation, undoubtedly, the latter can interpose the defense
ol minority of her co-signers, but such defense will benefit her
only with regard to that part of the debt for which the minors are
responsible.25s Similarly, if the creditor has granted to some of the
solidary debtors an extension of time for payment by virtue ofa new
contract entered into with such debtors, the debtor against whom the
rrction for payrnent of the entire obligation is brought can interpose
the defense ofextension of time for payment, but only with regard to
t.hat part ofthe debt for which the debtors benefited by the extension
rrn

rrre responsible.256

Problem - A, B and C borrowed P12.000 from X on June

1, 1966. They executed a promissory note binding themselves
jointly and severally to pay the obligation on June 1, 1968. For
failure to pay, X brought an action against A for paj'ment of
the entire obligation plus interests. A interposed the following
defenses: (1) that B was only a minor at the time of the
celebration of the contract and that such fact was known to X;
and (2) that X had granted an extension oftwo years to C within
which to pay.

(1)
(2)

Can,4 avail himselfofthese defenses?

Granting thatA can avail himselfofthese defenses,

what would be the efl'ect upon his tiability, assuming that he can
establish both defenses by competent evidence? Reasons.

Answer

(a)A can avail himselfofthese defenses. Under

Art. 1222 of the Civil Code. there are three kinds of defenses
which are available to a solidary debtor if the creditor proceeds
against him alone for payment of the entire obligation. They
are: /tl..sl, defenses derived from the nature of the obligation;
second, defenses personal to him or pertaining to his share; and
lAird, defenses personal to the others, but only as regards that
part ofthe debt for which the latter are responsible- It is evident
that both defenses interposed byA fall within the purview ofthe

third.
''illraganza vs. Villa Abrille, l{)5 I'hil 4,'ni.
"*lnchausti & Oo. vs. Yub,:]4 I'h'l ll78i Ni'rvafz vs. I)(' Leon, CA.4? Off caz.

2lo
I

").I

Arl.

OBLI(iATIONS

1222

(b)

SinceA cern .rvail himselfo{ lmth delenses, and since

such defenses are not absolute but merely partial in charactr,

undoubtedly, X can collect liorn A the lblkrwing: (a) P4,000

corresponding to thc sharc olA in lhe obligation; and (b) an
amount equivalent to the extent that B had been bencfittrd by
his share in thr: obligation, applying the rulc cnunciated in Art.
1399 rcgarding the ell'ect if thc def'cct of a contract consists in
the incapacil,y of one of the contracting parties. As far as the
share corresponding t,rl C is conccrncd, X must wait for the
expiration of the two years extension which hc had given to C
before hc can collect such share from A-

Section 5.

Concept. --

Diuisibla and. Ind.iuisible Obligations

Obligations may be divisible or indiyisible.

Divisible obligations are those which have as their object a prestation
which is susceptible of partial performance without the essence of
the obligation being changed. Indivisible obligations, on the other
hand, are those which have as their object a prestation which is not
susceptible of partial performance, because, otherwise, the essence
ofthe obligation will be changed.:257

Relation to Divisibility or Indiwisibility of Things. The divisibility of an obligation must not be confused with the
divisibility of the thing or prestation which constitutes the object
of the obligation. The former refers to the performance of the
prestation which constitutes the object of the obligation; the second
refers to the prestation itself. This does not mean, however, that the
divisibility or indivisibility ofthe object can have no effect upon the
divisibility or indivisibility of the obligation itself. On the contrary,
the divisibility or indivisibility ofthe object is a vry important factor,
probably the most imporLrnt, in determining whether the prestation
which constitutes the object ofthe obligation is susceptible of partial
performance or not.253
When is a thing or object divisible or indivisible? According
to Spanish commentators, a thing is indivisiblc whcn, if separahrd
into parts, its essence is changed or its value is drtreased disproportionately. On the other hand, a thing is divisihlt'whcn, ifscparatrrl

'5?il Cast rn, ?th I')d . p llil

:i"Art.
l22t'. ( I'v'l (ixl,.

DIFFERBNT KINDS O!'Out'l()A tlONS

I)ivisiblc and lndivisrbk' Oblil{rttions

rnto parLs, its essence is not changed or its value i".

To!.9*:"""td
ofthe parts into which it is divided
analogous to each othcr as well as to the thing
,,r,'.'ftolrog.noo"
^nd
H;;"", it is an esseniial condition' in order that a thing shall
the
';";i;.
iu'"o.,sidered divisible, that it must bc possible to reconstruct
difthe
urriting
bv
ii'rr* i["ii i*" its condition prior to the division
kinds ol'
ii""'iip.tt" i"t" *hich it hadbeen divided' There are thrce
intelle,ctual'
or
ideal
and
,iiui"io'n. fnov ute quantitative, qualitative
;iir.' aiti"i"""i" quantitative when the thing can be rnaterially disuch
uid"Jir,to pa.t" and such parts are homogcnous to-each other'
the
in
as
other
each
lrom
tfi" pttts are act;ally separated
^-'*f,""
metes
by
fixed
parts
arc
or when the limits ofthe
,1u"" oi
^ovuUl"",
as in the case of immovables The division is qualita,,,,J Uorlna"
divided, but the parts are not
t rvc when the thing can be materially
." in the partition of an inheritance- The
,",,.tiy io-tg""nn",
",t"h
intellectual when the thing can only be separated
,li"i""i,it" i" tal
"r
of
rrrto ideal or undivided parLs, not material parLs' as in the case

,i'"p.lp.lii"".t"ry,

because each

(tF(,wnershiP.25e

Ara. 1223. The divisibility or indivisibility of the things

that are the object of obligations in which there is only one
one creditor does not alter or modifv the
;l-,'b;; ;J
Chapter 2 of this Title's0
provisions of"tiy

Art. 1224. A joint indiwisible obligation gives rise to

indemJty for daiages flom the time anyone of the debtors
,t,r"" ttot .o-pty with his undertaking' The debtors who rnay
irr,". u""t ..iav to frrltrll their promisea shall not contnbut
i,t ii. ita.-titv beyond the corresponding portion- of the
the
,rrl."1ilf," thini or or the value of the service in which
obligation consists.'2nl

Effect of Diwisible or Indivisible Obligations' - Where

llrcrt-'is only one creditor and only one dcbl'or' -the divisibility or
,,uliui"ibitity of the obligation is of little significance as implied
i'r 't".-|ZZS. As a general rule' the creditor cannot be compelled
obligation consists;
r,,rrtially to receive iie prestation in which the
'"4

S'rnch('7 laomttn 1):l-l14

r/'Art I l4l). Sp"nish (livil (1xL.

t,'Arl tnt. Stxrn'sl' (:tvrl {inI.
'.'.12

J'rts 1223-1224

2t:l

DIFFERENT KINDS OF OBI,IGAl'I0NS

l)ivisible and Indivisible Obligations

ORI,IGATIONS

ArL. 1225

neither may the debtor be required to make partial payments.262

There are, however, three exceptions to this rule. These are: frsl,

when the obligation expressly stipulates the contrary, second, when

the different prestations constituting the objects of the obligation
are subject to different terms and conditionsi and third, when the
obligation is in part liquidated and in part unliquidated.'?63
Where there is a plurality ofdebtors and creditors, the effect of
the divisible or indivisible character of the obligation shall depend
upon whether the obligation is joint or solidary. If it is solidary, the
provisions ofArt. 1211 to Art. 1222 are applicable; if it is joint and at
the same time divisible, the provision ofArt. 1208 is applicable; and
if it isjoint and at the same time indivisible, the provisions ofArts.
1209 and L224 are applicable.

Ideur; Breach of joint indivisible obligations. - In

joint indivisible obligations, such as the delivery of a horse or an
automobile, the obligation can be enforced only by proceeding against
all of the debtors.z6a If anyone of the debtors should fail or refuse
to comply with the obligation, it is converted into one of indemnity
for damages.26s However, the debtors who may have been ready to
comply with what is incumbent upon them shall not contribute to
the indemnity beyond the corresponding portion of the price of the
thing or of the value of the service in which the obligation consists.
The debtor who failed or refused to comply with his obligation shall
bear the burden of paying all ofthe damages suffered by the creditor
or creditors as a result of the nonfulfillment of the obligation. If the
other debtors also suffered damages as a result ofthe transformation
of the obligation into one of indemnity, they may also recover such
damages from the debtor who was at fault.266

Art. 1225. For the purposes of the preceding articles,

obligations to give definite things and those which are not
susceptible of partial performance shall be deemed to be
indivisible.

Civil Code.
'?"'r16id.,8 Manresu, 5th
'z6?Art. 1248,

lil . ltk
(lrl'

1209. (livil
(livil (l(xl,'
1224,
'65Art.
'zaSee

?s8

Art.

M:rni'sr, 5(l' l.il

.llk l.t'

l. trtr jlt;il illi5

of a
When the obligation has for its object the executiorr
work
of
accomplishment
the
irr-n.. of iays of work,
",,,.t"in
r'" -"I"i."t u"its, or analogous things which by their nature
,,'"".t"."oiilf" oi partial performance, it shall be divisible'
However, even though the object or service may be

if so provided
,,r,v"l."iiv al"i"ibte, "rl ouligation is indivisible
iry law or intended bY the Parties'
indivisibility
In obligations not to do, divisibility -or prestation
in
the
of
character
t.-a.t"""-ined by the
"ruf
r,rrch particular case''6?
prDetermination of Divisibility or Indivisibility' - Ifthe
is
susceptible
the objeci ofthe obligation
, *t,,tio. *fri"t
"onstitutes
is divisible; if it is not suscepti
the
obligation
,,f
compliance,

"".ti^f
;;

indivisible- Consequentlv'
;;;,;;i "l-pliance, the o-bl igat ion is obligation
is susceptible of
',r-, i.I"iL",
l" *t'"iher the
"ralui.iUitlty
provision ofthe first
l,:

or not. This is clear from the

the words of Sanchez Roman' the pivotal

,,rrtiul

"o-pliu."e 1225. In
;;,';;"ph;i;tt'.

possibility or impossibility of partial -prestation''ffi This

',,,*"ptilifiiv p"rtiul compliattce should be understood' not in the
"f
or impossibility of the delivery of a thing or
,',r"""f tft" p*"ibility
of
,i i;;".f"t;""ce of an act in separate parts' but in the.::^"t
the.obligation
,i,.. poJ.iUiiitv of realizing the end or purpose which
,,,i.k" to uttain. Hence, the purpose olthe obligation is the controlThis applies not only to obligations to give' but
f,
i ,,li l"t

iit.

"*-"i."t*"t'."*.

,rlso to obligations to do or not to do

l ,'rl,Ir. ?lh l,il .l,

21.1

26e

Idern; In obligations to give' - It is in obligatigns to nve

rl,,,t ihe divisible oi i.tdit i"ibl"-ttuture of the thing which constito be
,,,i.'- iit" tU:""t of the obligation is the most important factor
of
is
susceptible
obligation
the
,,,,'.sidered iln determining whether
of
the
provisions
the
from
is
clear
rii.i."^pir""ce or ,rotl This
",'
lilst and third paragraphs of Art 1225'
definite or
If the obligation is to give somethtng whjch is.
it.is not
that
,'t'icl bf its veiy nature is i;divisible, it is evident
to be
deemed
be
,,r,"niiirf" tf p".tial compliance Hence, it shall
'' Art. I ll-,t, Spanish (livil (lxk . rn rrrrxlilnrl litnn
"^,1

lr;'r. il

Art t225

SIrn(lx', ltolr:rrr

9l-r'

ll:?

't.l n

Art. 1225

This rule is absolute in character. While it is true

that the divisibility or indivisibility of the thing which constitutes
the object of the obligation is not the ultimate test which we must
apply in order to determine whether the obligation is divisible or
indivisible, nevertheless, it is also true that when such object is by
its rrery nature indivisible, as in the case of a chair or a horse, the
indivisible.'??o

obligation is necessarily indivisible.

However, if the obligation is to give something which by its
nature is divisible, the general rule is that the obligation is also
divisible since it is eyidently susceptible ofpartial compliance. Thus,
it has been held that an obligation to give or to do several things
at several times is divisible. This rule is not absolute in character,
because by express provision of the Code "even though the object
may be physically divisible, the obligation is considered indivisible
if it is so provided by the law or it is so intended by the parties."2?l
With respect to the second exception, the intention of the parties
that the obligation is indivisible in character may be either express
or implied. In the latter case, it may be inferred or presumed
either: ( 1) from the fact that, although the object of the obligation
can be separated into parts, yet each part constitutes a necessary
complement of the other parts; or (2) from the very purpose of the
obligation itself which requires the delivery of all the parts.272

Obligations with

by its very
nature is not susceptible of partial performance, it shall be deemed
indivisible.'zT3 This rule is absolute in character. If the obligation
is to perform some prestation or service which by its very nature
is susceptible of partial performance, the general rule is that it is
divisible. Certain qualifications, however, must be made.

In the first place, in order to determine whether an obligation

to do is divisible or indivisible, the object or purpose of the obligation must always be considered. This is evident from the provision
of the second paragraph of Art. 1225- According to this provision . the obligation shall be considered divisible when it has for its objoct:
(l) the execution of a certain number of days of work; or (2) thr,
('iv il ( inl,.
"oAr1. 1225, par. I,
'z?'Art. 1225, pl|r.

lJ,

('ivil (irl..

'??8 Manresa, Sl.h Fil , lJk l. t,t'

r?r'Art. 1225, prrr l, ('rv'l l
'i1,.

4'lll l?ll

2l(;

1225

a Penal Clause

(3
accomplishment ofwork by metrical units; or ) the accomplishment
of partial
,rf u.ruiogo.,s things which by their nature are susceptible
performance.
In the second place, although it is true that ifthe obligation has
lbr its object u p"""t.tioo or service which is susceptible of partial
,,nrfn.-un* it is, as a rule, divisible, yet it may still be indivisible
ii"o p.o"ia"a by law or intended by the parties'2?r This intention of
the parties may either be express or implied Thus, where-a certain
.nnti.acto. oblilutes himself to construct several apartment buildings
compound, there is no doubt that the prestation is
*iinin u
""ttuitt
performance However, if it is the express or
partiai
susceptible of
parties to the contract that the obligation
ofihe
presumed intention
buildings must be constructed in
apirtment
the
all
of
is indivisible,
order that the obligation can be considered as perforrned'

Idem; In obligations not to do' - With respect to obligations

the
rxrt to do, whether iI is divisible or indivisible shall depend upon
the
case'2?5'Iherefore'
particular
in
each
r..tru.u"i". oftn" prestation
upon
depend
will
obligation
of
the
character
rlltermination oi the
the sound discretion of the court.
Section 6.

Idern; In obligations to do.

- In obligations to do, if the

obligation is to perform some prestation or service which

Art

DIFFERENT KINDS OF OBLIGA'I'IONS

OBI-IGATIONS

Concept.
rrs

one to which

Obtigations toith o Penol Clause

may-be defined

obligation with a penal clause-an An

accessory undertaking is attached for the purpose

by virtue of which the obligor is bound

or perform a stipulated prestation
indemnity
l.o pay a i-tiprrLt"d
it is clear that the penal
definition
this
From
i" i""" breach.
t'lause or"fpenalty is an accessory obligation attached to the principal
,,trtigation ty vl.tue of which ttre obligor is bound to pay a -stipulated
t" perform a stipulated prestation in case of breach of
irta,;'^"tty

,'i

i""".i"g its performance

".
the obligation.2?6

Purpose of Penalty.
three-fold purpose. TheY are:

The penal clause or penalty has a

(l)

Funci6n coercitiua o dz garantia

rn:rnce of the obligation;
Codc
"{Ar-t. l22lt, par' 3, Civil (ltxtt'
"r'Art. l22rr, par. 4, Civil
tr'rr:] (i',rt"',, ith lld., p.9?; lt Mllnn't"

l''l

'21'l

to insure the perfor-

lil ,llk' I'p]'

471 47It

Art. 1226

OBLICATIONS

DIFFERENT KINDS OF OI]I,IGA'I'I0NS

Art 1226

Obligations with a Penal ( llaust'

(2) Funci6n liquidatoria to liquidate the

_
- party
damages to be awarded to the injured

amount of
in case of breach ot.the

principal obligation; and

(3)
"3""!:_to
tion.271

Funci6n estictamente penal _ in certain exceptional

punish the obligor in case of breach ofthe principal obliga_

It is evident that the second is compensatory, while the third

is punitive in character; the first, on the other hand, is the general

purpose regardless
punitive.

of whether the penalty is compensaiory or

penalties may be classified as follows:

(1) As to origin Legal or conventional. It is legal when it
.is constituted
by law; it is conventional when it is
bv
agreement of the parties.
"orr""titutud

Kinds of Penalty.

(2) As to purpose Compensatory or punitive. It is compen_

satory when it is established for the purpose of indemnifying
the
dannages suffered by the obligee or creditor in case of
breaih ofthe
obligation; it is punitive when it is established for the puipose
of
punishing the obligor or debtor in case of breach of the oblig;tion.
(3) As to eftct - Subsidiary or joint. It is subsidiary when
only the penalty may be demanded in case ofbreach ofthe
obligation;
it is joint when the injured party may demand the enforcerient of
both the penalty and the principal obligation.
1226. In obligations with a penal clause, the penalty
- --A"t_.
shall
substitute the indemnity for damages and ihe payment
ofinterests in case ofnoncompliance, ifthere is no stipuiation
to the contrary. Nevertheless, damages shall be p"id it th"
ob-ligor refrtss to pay the penalty oris guilty offrauJ in the
firlfillment of the obligation.
_ The penalty nay be enforced only when it is demandablc
in accordance with the provisions of this Code.r?"

"?3 Castan, Tth lil . t,t, ll)t) t{[

'?3Art. t 152, Str"rixh ttrvit r ixtr, ,,, ,,,,nt,ti,rt ti,r,,,

:|8

Effect of Penalty, General Rule. - As previously stated,

tlr" l)enal clause may be considered either as reparation or substiI'rtr. lbr damages or as a punishment in case ofbreach ofthe obligar r,'rr. Considered as a reparation or compensation, the question of
,l,rnirges is resolved once and for all, since the stipulated indemnity
,,r plt.station represents a legitimate estimate made by the contract,rr11 parties ofthe damages caused by the nonfulfillment or breach of
t lrc obligation. Consequently, proof of actual damages is not neces,rlv in order that the stipulated penalty may be demanded. Con.r,L.red strictly as a punishment, the question ofdamages is not yet
r,.',olved. Consequently, the right to damages, besides the penalty,

,trll subsists. Therefore, if the injured party desires to recover the

,l.rrl:rges actually suffered by him in addition to the penalty, he
r,

rusl. prove such damages.2?s

As a general rule, the penalty is fixed by the contracting parties

compensation or substitute for damages in case of breach ofthe
,,1'ligation. This is evident from the provision ofthe first paragraph of
'\ rl . I 226. It is, therefore, clear that the penalty in its compensatory
'r,r;x.ct is the general rule, while the penalty in its strictly penal
'urpr.tt, is the exception. Thus, if the parties to a contract of sale
I'rrvrrble in several installments agree that should the vendee fail
tr, lray the amount corresponding to each installment in due time,
tlr.vondor may rescind the contract and at the same time keep the
i|lrount already paid, it is clear that such an agTeement has for its
I'rrrlrose not only to insure the performance of the obligation, but
,rlr{) t(, measure beforehand the damages which would result from
r
rcornpliance. At any rate the penal clause does away with the
',,r
,lr lv l,{, prove the existence and measure ofthe damages caused by
,r , ir

tlrl

lrroach-230

Manila Racing Club vs. Manila Jockey Club

69 Phil. 55
Thc records show that the parties entered into a contract
rrl sale of a parcel of land for P1,200,000, payable in five
iDstallmcnts- It was agreed that should the vendee fail to pay
' '8 M&nresn, l,th Ed., llk. I, pp 4tt(1481.
""'MrniLr liacing (ll b vs Mrrnilrr Jrrkey Olub, 69 Phil. 55. For other cases ilI',rl'r'lllrX l.h' gfncnrl nrl" mI l'rrlrl(ror vs Mun. ofCtvite, l2I,hil. 140; Navarro
',, Mrrllrrri.,15 l'hil.242; Arrtnr,trr vlt I','l.,rr,', ,1!) ()fi] (lnz.45.

2l\l

Arl. 1226

OBI,IGATIONS

DIFFERENT KINDS OF OBI,ICA'fIONS

Obligalions with a Penal Claus(]

thc amount corresponding to each installment in due time, the

os. Nil&q8 Phil. 111.) Upon this account, il becomes hardly

conceivable, although the argument has been employed here
rather extravagantly, that the idea of pactum commissorium
should occur in the present contract of sale, considering that, it
is admitted, that the person to whom the property is forfeited is
the real and equitable owner ofthe same because the title would
not pass until payment of thc last inslallment. At most, the
provision in point, as thc parties themselves have indicated in
the contract, is a penal clause which carries the express waiver
ofthe vendee to any and all sums he had paid when the vendor,
upon his inability to comply with his duty, seeks to recover
possession of the proprty, as conclusive recognition ofthe right
of the vendor to said sums, and avoids unnecessary litigation
designated to enforce fulfillment of the terms and conditions
agreed upon. Said provisions are not unjust or inequitable and
does not, as appellani contends, make the vendor unduly rich al
his cost and expense."

vendor may rescind the contract and keep the amount paid. The
vendee was able to pay only the first two installments amounting
to P100,000. As a result, the vendor rescinded the contract- This
action now is brought by the vendee against the vendor for the
purpose of recovering the forfeited amount on the ground that
the agreement is contrary to lau/, morals and public order.
IIeld.' -lhe clause ofthe contr:rct referring to the forfeiture
of the P100,000 already paid, should the purchaser fall to pay
the subsequent installments, is valid. It is in the nature of a
penal clause which may bc legally established by the parties
(Articlcs 1152 and 1255 now Arts. 1226and 1J06. Cii[ Code.\
In iLs doublc purpose of insuring compliance with thc contract
and of otherwise mcasuring beforehand the damages which
result from noncompliance, it is not contrary to law, morals or
public order because it was voluntarily and knowingly agreed
upon by the parties. Viewing concretely the true effects ttrereof

in the present case, the amount forfeitd constitutes only

eight per cent of the stipulated price, which is not excessive if
considered as the profit which would have been obtained had
the contract been complied with. There is, more,over. evidence
that the defendants. becauso of this contract, had t^o reject
other propositions to buy the same property. At any rate, ihe
penal clause dms away with the duty to prove the existence and
measure ofthe damages caused by the breach.
Caridad Estate vs. Santero
7r Phil. lr4

Idem; Exceptions. - There are three exceptions to the

rule that the penalty shall substitute the indemnity for damages
and the pa5rment of interests in case of noncompliance with the
principal obligation. They are: first, when there is a stipulation to
the contrary, second, when the obligor is sued for refusal to pay the
agreed penalty; and third, when the obligor is guilty of fraud.'3r In
all of these cases, it is evident that the purpose of the penalty is to
punish the obligor. Consequently, the obligee can recoYer from him
not only the penalty, but also the damages or interests resulting
from the breach ofthe principal obligation.232

This action is brought by the vendor against the vendee

for the recovery ofthe property sold because of the failure to pay
the stipulated installments in due time. In the contract ofsale, it
was agreed that should the vendee fail to pay the installmenls in
due time, thc vendor shall have the right to rescind the contract
and at the same time keep any and all sums already paid. It is
now contnded by the vendee that such a stipulation constitutes

Bachrach Motor Co. vs. EsPiritu

52 Phil. 346
These two cases were tried together. The first case
involves an action brought by the plaintifl corporation for the
recovery of P10,477.82 from the defendant which is the unpaid
balance of the purchase price of a two-ton White truck which
the latter had bought from the former. In addition, the said
plaintiffcorporation also asks for 12 per cent ofthe said amount

a pa.clum commissorium, which is prohibited by what is now

Art. 2088 ofthc New Civil

Code.

Held: "Taking up the argument that the stipulatjon has

resulted inpocfum commLssrtriurn, we arc 0fthc opinion l,hat l,lrt:

objection is without lcg:rl basis llistorit::rllyand in poinl, ()l'litrict
law, pactum comn|s'sorirrrr, rcli'rrr.d to in Articlcs I ti.irl) rr nrl I ll84

(nou Arls.2OUll onrl 2l:t7) ol'llr., (:ivil

existence ol'rnrrrtgrrllr. or pk.r

l1;r, or. l.lrr r l.

2,20

(ixi.,

pr.,lrt,txrs{.s

Lhr,

ol rrrrtichrr.ail{ (Ah.unkuv

AtL 1226

'/:17;

1221i. ptr l, (livil (lodc.

^tAtt.
allhchrru h M,,L,r(h. vs. Espiritrr, i,2 llhil :14{i: (i'v( rnmcnt vs. t,im,6l Phil.
Inrnr.t.n M',1,'r(i, vs. Mor l 7:l l'hil 8{1, ( l'lnrr|)r:rrrs vs. Vi{\'nlc, 107 Irhil.340;

lI.V.n.{.'x v(

'1,.1

ln'N,'rx,, l8S(llaA

7!12

22t

Art 1226

OBI,IOATTONS

DII.'I.'ERENT KINDS OF OBLICA'I'IONS

Obligations with a Penal 0lause

as stipulated interest and 25 per cent thereon as stipulated

penalty. The second case involves a second action brought by
the plaintill corporation for the recovery of P4,208.28 from the
same defendant which is the unpaid balance of the purchase
price of a one-ton truck of the same make as the first which
the latter had bought from the former. In addition, the said
plaintiffcorporation also asks for 12 per cent ofthe said amount
as stipulated interest and 25 per cent thereon as penalty. The
basis ofthe action in each case is a contract of sale wherein the
parties agreed that 12 per cent interest would be paid upon the
unpaid portion ofthe price at the execution ofthe contracts, and
in case ofnonpayment ofthe total debt upon its maturity, 25 per
cent thereon, as penalty. The lower court which tried the cases
together rendered judgments in plaintifls favor in accordance
with the contracts. From these judgments, defendant appealed
to the Supreme Court. He contends that the 25 per cent penalty
upon the debt, in addition to the interest of 12 per cent per
onnurn. would make lhe conirdct usurious.

demands, refused to comply with his obligation, plaintiff,

assisted by her husband, brought suit in the Municipal Court
which rendered, after hearing, a judgment in plaintiffs favor.
On appeal the Court of First Instancc sentenced defendant to
pay to plaintiff the amount of P1,200 with interest at legal rate
from the date of the filing of thc complaint until full payment.

Ileftl: "Such a contention is not well founded. Article

ll52 (now Art. 1226) of the Civil Code permits the agreernent

The case, however, takes a different aspect with respect

to the penalty attached to the principal obligation. It has been
held that in obligations for the payment of a sum of money

A,rt. 1226

upon a penalty apart from the interst. Should there be such

an agreement, the penalty, as was held in the case of Lopez os.
Hernaez (32 Phil,.631). does not include the interest and as such
the two are different and distinct things which may be demanded
separately. According to this, it is not to be added to the interest
for the determination of whether the interest exceeds the rate
fixed by the law, since said rate was only fixed for the interest,
But considering that the obligation was partly performed, and
making use ofthe porver g-iven to the court by Article 1754 (nou
Art. 1229) of the Civil Code, this penalty is reduced to 10 per
cent of the unpaid debt."

Cabarroguis and Cabarroguis vs. Vicente

107

Phil. 340

Teleslbro B. Vicente, owner and operator of the jeepney

on which plaintiff, Antonia A. Cabarroguis, was a passenger

entered into a compromise agTeement with plaintiff obligating
himself to pay to her the sum of P2,500 as damages for the
physical injuries sustained by her when the said jcopncy
on which plaintiff was a passenger hit another vehicle. An
additional amount of P200 w:rs providcd as liquidatcd damagt's

in the agreement in casr.dcli'ndrrnt lirils to conrpk.l,c puynx:nt

within 60 days. A lrrrlrrrrc(' ol l'1,0(X) <rl-th(' rrrrrrrr rt wrrs krll
unpaid rrnri irs rIcIi'rrrLrrrI llrrl'rl, rrrrrl, ur)twithHlllrlirrt{ t-('lx.nl.(\l

").22.

Hence, this appeal. Is the decision correct?

lIeldr In obligations with a penal clause, the penalty

shall substitute the indemnity for damages and the payment
of interest, except when the contrary is stipulated; or when the
obligor refuses to pay the penaltyi or when the obligor is guilty
of fraud in the fulfillment of the obligation. (Art. 1226, Civil
Code.) Applying the law it is evident that no interest can be
awarded on the principal obligation, the penalty of P200 agreed
upon having taken the place ofthe payment ofsuch interest and
the indemnity for damages, the case not falling under any ofthe
exceptions.

when a penalty is stipulated for default, both the principal

obligation and the penalty can be demanded by the creditor.
(Government vs. Lim, ef o1.,61 Phil.737; Luneta Motor Co.
vs. Moral, 73 Phil. 80.) f)efendant having refused to pay when
demand was made by plaintiff, the latter clcarly is entitled to
interest on the amount of the penalty. Art. 2210 ofthe new Civil
Code also provides that in the discretion of the court, interest
may be allowed upon damages awarded for breach of contract.
This interest is recoverable liom the time ofdelay, Le., from the
date of demand, either judicial or extrajudicial. There being no
showing as to when demand for payment was made, plaintiff
must be considered lo have made such only from the filing ofthe
complaint.
Decision modified in the sense thzrt interest shall be allowed only on the amount of the penalty.

Idem; Enforceability of penalty. - According to the second

lnrrrrgraph of l.Jt. 1226, the penalty may be enforced only when it
is dcmandahle in accordance with the provisions of the Civil Code.
(irnsequcnl.ly, rrlxrn the breach or nonfulfillment of the principal
olrligrrtion lry tlrr.olrligor or clclrtor, tlrc 1x'nalty stipulated becomes
rL.rrrirnrlrrlrlr', ;rrovirlcrl tlrrrt. il is ttol trrttlritry lo lrrw, morals, good

Art. 1227

OBLIGATIONS

DIFFERENT KINDS OF OBLIGATIONS

Obligations vrith a Penal Clause

customs, public order or public policy.r33 However, where both of

the contracting parties are unable to comply with their respective
obligations, although the breach is not willful or culpable, such as
when it is due to a foduitous event, since the law must work both
ways, the penal clause cannot, as a consequence, be invoked by
anyone ofthem to the prejudice ofthe other.rsa

impossible without his fault, he may still demand the satisfaction

of the penalty.288 If there was fault on the part of the debtor, he
may demand not only the satisfaction of the penalty, but also the
payment of damages.'8e If he chooses to demand the satisfaction
of the penalty, he cannot afterwards demand the fulfillment of the
obligation.

Art, 1227. Tt:e debtor cannot exempt hirnself from the

performance of the obligation by paying the penalty, save
in the case where this right has been expreesly reserved
for him, Neither can the creditor demand the fulfillrnent
of the obligation and the satisfaction of the penalty at the
same time, unless this right has been clearly granted him.
However, if after the creditor has decided to require the
fulfillment of the obligation, the perforrnance thereof should
become impossible without his fault, the penalty rnay be
enforced,285

Ara

t228

It will be observed that under the first sentence ofthe article,

in order that the debtor can exempt himself from the performance
of the obligation by payrng the penalty, the right must be expressly
reserued for him. Under the second sentence, however, in order that
the creditor can demand the fulfillment of the obligation and the
satisfaction ofthe penalty at the sametime,the right must be clearly
granted to him. From this, it can be inferred that a tacit or implied
grant is admissible under the second.
Am. 122A. Proof of actual damages sufrered by the cred-

itor is not necessary in order that the penalty may be de-

Limitation upon Right of Debtor. - The debtor cannot

exempt himself from the performance of the principal obligation by
paying the stipulated penalty. There is, however, an exception to
this rule and that is when the right has been expressly reserved for

manded.2eo

him.286

parties for the purpose of compensating or substituting the indemnity for damages and the payment ofinterests, proof of actual damages suffered bv the obligee or creditor is not necessary in order that
the penalty may be demanded. Hence, in this sense, the penalty is
exactly identical with what is known as "liquidated damages" under
Art. 2226 of the Civil Code. However, if there is stipulation to the
contrary, or if the obligor or debtor is sued for refusal to pay the
agreed penalty, or if the obligor or debtor is guilty of fraud, then
the obligee or creditor can demand not only the satisfaction of the
rrgreed penalty, but even damages. In such case, in order to be able
to recover such damages in addition to the penalty, he must prove
the amount of damages which he had actually suffered.

Linitation upon Right of Creditor. - On the other

hand, the creditor cannot demand the fulfillment
principal

of the
obligation and the satisfaction ofthe stipulated penalty at the same
time, unless this right has been clearly granted to him.r8?

If the principal obligation is not complied with, the creditor

can choose between demanding the fulfillment

ofthe obligation and

demanding the satisfaction of the penalty. He cannot, however,
demand both atthe same time. Ifhe chooses to demand the fulfillment
of the obligation, and the performance thereof should become

Proof of Actual Danages. - The above provision is applicable only to the general rule stated in 4fi. L226 and not to the
exceptions. Consequently, if the penalty is fixed by the contracting

'?$Yu Tek & Co. vs. Gonzales, 29 Phil. 484; Ibarra vs. Aveyro, 3? I'hil. 2Z:t;
Bachrach vs. Golingco, 39 Phil. 138; Mrnilo Rlcing (ilub vs. Manila Jockcy olub, {ig

Phil.55.

(itz

ryReyes vs. Formoso, CA,4(i ()m

1153, Spaninh (livil (1x1,, in
'sArt.
mArt. 1227. Civil Orxirr

,31Jhid

5t;21.

ll'(xliti,!l ti)rnr
'?&Ari. lTzli, rl l $ontcn$, (livil (ixk..
r*'Nrw lrovrmrrrr