CHAPTER2:NATUREANDEFFECTOFOBLIGATIONS

1163. Every person obliged to give something is also obliged to take care of it with the proper
diligence of a godfatherofafamily,unlessthelaworthestipulationofthepartiesrequiresanotherstandardofcare.

•Speaks of an obligation to care of a DETERMINATE thing (that is one which is specific; a thing
identified by its individuality) which an obligor is supposed to deliver to another.
•Reason: the obligor cannot take care of the whole class/genus

DUTIES OF DEBTOR:

• Preserve or take care of the things due.

o DILIGENCE OF A GOOD FATHER – a good father does not abandon his family, he is always ready to
provide and protect his family; ordinary care which an average and reasonably prudent man would
do.- D e f i n e d i n t h e n e g a t i v e i n A r t i c l e 1 1 7 3
o ANOTHER STANDARD OF CARE – extraordinary diligence provided in the stipulation of parties.
o FACTORS TO BE CONSIDERED – diligence depends on the nature of obligation and corresponds with
the circumstances of the person, time, and place.

** Debtor is not liable if his failure to deliver the thing is due to fortuitous events or force majeure… without
negligence or fault in his part.

• Deliver the fruits of a thing

• Deliver the accessions/accessories
• Deliver the thing itself
• Answer for damages in case of non-fulfillment or breach

1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises.
However, he shall acquire no real right over it until the same has been delivered to him.

REAL RIGHT (jus in re) – right pertaining to person over a specific thing, without a passive subject
individually determined against whom such right may be personally enforced.
−a right enforceable against the whole world

PERSONAL RIGHT (jus ad rem) – a right pertaining to a person to demand from another, as a definite passive
subject, the fulfillment of a prestation to give, to do or not to do.
−a right enforceable only against a definite person or group of persons.

•Before the delivery, the creditor, in obligations to give, has merely a personal right against the debtor
– a right to ask fordelivery of the thing and the fruits thereof.

•Once the thing and the fruits are delivered, then he acquires a real right over them.

•Ownership is transferred by delivery which could be either actual or constructive

(Art. 1477)

•The remedy of the buyer when there is no delivery despite demand is to file a complaint for
“SPECIFIC PERFORMANCEAND DELIVERY” because he is not yet the owner of the property before the
delivery.

�ACTUAL DELIVERY – actual delivery of a thing from the hand of the grantor to the hand of the grantee
(personally), or manifested by certain possessory acts executed by the grantee with the consent of the grantor
(realty).
FRUITS:
1. NAT U R A L – s p o n t a n e o u s p ro d u c t s o f t h e s o i l , t h e yo u n g a n d o t h e r p ro d u c t s
of animals;
2. INDUSTRIAL – produced by lands of any cultivation or labor;
3. CIVIL – those derived by virtue of juridical relation.

** SEE Article 1164 (retroactivity of the effects of conditional obligation to give once the condition has been
fulfilled)

1165.Whenwhatistobedeliveredisa determinatething,thecreditor…may compelthedebtortomakedelivery.Ifthething is

indeterminateorgeneric,hemay askthattheobligationbecompliedwithattheexpenseofthedebtor.Ifthe obligordelays orhas
promisedtodeliverthesamethingtotwoormorepersonswhodonothavethesameinterest,heshallbe responsibleforanyfortuitous
eventuntilhehaseffectedthedelivery.

*This provision applies to an obligation to give.

DETERMINATE THING
 something which is susceptible of particular designation or specification;
 obligation is extinguished if the thing is lost due to fortuitous events.
 Article 1460: a thing is determinate when it is particularly designated and physically segregated from
all others of the same class.

INDETERMINATE THING
 something that has reference only to a class or genus;
 obligation to deliver is not so extinguished by fortuitous events.

REMEDIES FOR FAILURE OF DELIVERY (determinate thing)

1. Complaint for specific performance – an action to compel the fulfillment of the
obligation.
2 . C o m p l a i n t f o r re s c i s s i o n o f t h e o b l i g a t i o n – a c t i o n t o r e s c i n d
3 . C o m p l a i n t f o r d a m a g e s – a c t i o n t o c l a i m f o r c o m p e n s a t i o n o f d a m a g e s s u f f e re d

•As a general rule, “no person shall be responsible for those events which could not be foreseen, or
which, though foreseen, are inevitable, except:
1. in cases expressly specified by the law
2. when it is stipulated by the parties
3. when the nature of the obligation requires assumption of risk
•An indeterminate thing cannot be object of destruction by a fortuitous event because genus never
perishes.

1166. The obligation to give a determinate thing includes that of delivering all its accessions and
accessories, even thoughtheymaynothavebeenmentioned.

ACCESSIONS – fruits of the thing or additions to or improvements upon the principal

−those which are naturally or artificially attached to the thing

ACCESSORIES – things included with the principal for the latter’s embellishment, better use, or completion

When does right to fruits arise? – from the time the obligation to deliver arises

 Conditional – from the moment the condition happens

 With a term/period – upon the expiration of the term/period
 Simple – from the perfection of the contract
1167. If a person obliged to do something fails to do it, the same shall be executed at his cost. This
same rule shall beobservedifhedoesitincontraventionofthetenoroftheobligation…itmaybedecreedthatwhathasbeenpoorly
donebeundone.

* This provision applies to an obligation to do.

THREE SITUATIONS:
a) Debtor’s failure to perform an obligation
-creditor may do the obligation, or by another, at the expense of the debtor;
-recover damages
b) Performance was contrary to the terms agreed upon
-order of the court to undo the same at the expense of the debtor
c) Performance in a poor manner
-order of the court to undo the same at the expense of the debtor

1168. When the obligation consists in NOT DOING and the obligor does what has been forbidden him,
it shall also be undoneathisexpense.

* This provision applies to an obligation not to do.

1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extra judicially demands from them the fulfillment of their obligation. However,thedemandbythecreditorshall
notbenecessaryinorderthatdelaymayexists:
•When the law or obligation so expressly declares;
•When from the nature of the contract, time us the essence and motivating factor for its
establishment;
•When demand would be useless (prestation is impossible);
•In reciprocal obligations, from the moment one of the parties fulfills his obligation;
•When the debtor admits he is in default

ORDINARY DELAY – mere failure to perform an obligation at the appointed time.

LEGAL DELAY (DEFAULT) – tantamount to non-fulfillment of the obligation and arises after an extrajudicial or
judicial demand was made upon the debtor.

KINDSOFDEFAULT:
a) MORASOLVENDI – delay on the part of the debtor to fulfill his obligation;
REQUISITES:
1 . Fa i l u r e o f t h e o b l i g o r t o p e r f o r m o b l i g a t i o n o n t h e DAT E a g re e d u p o n ;
2. Demand (judicial/extrajudicial) by the creditor;
3 . Failure to comply with such demand

EFFECTS:
1) Debtor – liable for damages and interests
2 ) D e b t o r – l i a b l e f o r t h e l o s s o f a t h i n g d u e t o a f o r t u i t o u s e ve n t
KINDS:
1 ) m o r a s o l ve n d i e x r e – d e fa u l t i n re a l o b l i g a t i o n s ( t o g i ve )

2 ) m o r a s o l ve n d i e x p e r s o n a – d e f a u l t i n p e r s o n a l o b l i g a t i o n s ( t o d o )

b) MORAACCIPIENDI – delay on the part of the creditor to accept the performance of the obligation;
Effects:
1.creditor – liable for damages
2.creditor – bears the risk of loss of the thing
3 . d e b t o r – n o t l i a b l e f o r i n t e re s t f r o m t h e t i m e o f c re d i t o r ’ s d e l a y
4.debtor – release himself from the obligation

c) COMPENSATIOMORAE – delay of the obligors in reciprocal obligation.

Effect: the default of one compensates the default of the other; their respective liabilities shall be offset
equitable.

 Default / Delay in negative obligation is not possible. (In negative obligation, only fulfillment and
violation are possible)

1170.Thosewhointheperformanceoftheirobligationsareguiltyoffraud,negligence,ordelay,andthosewhoinanymannercontravene
thetenorthereof,areliablefordamages.

FRAUD (dolo) – deliberate intentional evasion of the faithful fulfillment of an obligation;

NEGLIGENCE (culpa or fault) – voluntary act or omission of diligence, there being no malice, which prevents
the normal fulfillment of an obligation;

DELAY (mora) – default or tardiness in the performance of an obligation after it has been due and
demandable;
CONTRAVENTION OF TERMS OF OBLIGATION (violation)– violation of terms and conditions stipulated in the
obligation; this must not be due to a fortuitous event.

1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action
for future fraud is void.
•To allow such waiver will necessarily render the obligatory force of contracts illusory.
•The law does not prohibit waiver of an action for damages based on fraud already committed.
•Any deliberate deviation from the normal way of fulfilling the obligation may be a proper basis for
claim for damages against the guilty party.

INCIDENTAL FRAUD (applicable provisions are Arts. 1170 & 1344) – committed in the performance of an
obligation already existing because of a contract; incidental fraud obliges the person employing it to pay
damages.
CAUSAL FRAUD – (Art. 1338) employed in the execution of contract in order to secure consent; remedy is
annulment because of vitiation of consent.

1172. Responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but suchliabilitymayberegulatedbythecourts,accordingtocircumstances.

Court’s discretion because:

(a) Negligence depends upon the circumstances of a case – good or bad faith of the obligor may be
considered as well as the conduct or misconduct of the obligee;
( b ) It is not as serious as fraud.

Negligence – lack of foresight or knowledge

Imprudence – lack of skill or precaution

TEST OF NEGLIGENCE
Did the defendant, in doing the alleged negligent act, use the reasonable care and caution which an ordinary
prudent man wouldhave used in the same situation?
TWO TYPES OF NEGLIGENCE:

BASIS 1. Culpa Aquiliana 2. Culpa Contractual(Breach of

(Quasi-delict) contract)

DEFINITION Negligence between parties Negligence in the performance of

contractual obligation
NATURE OF NEGLIGENCE Direct, substantive and Incidental to the performance of
independent the obligation

GOOD FATHER OF THE FAMILY Complete and proper defense Not complete and proper defense
DEFENSE (parents, guardian, employers) in the selection of employees

PRESUMPTION OF NEGLIGENCE No presumption – injured party There is presumption – defendant

must prove negligence of the must prove that there was no
defendant. negligence in the carrying out of
the terms of the contract.

1173. The fault or negligence of the obligor consists in the omission of that diligence which is required
by the nature of the obligation and corresponds with the circumstances of the persons, of the time and
of the place… If the law or contract does not state the diligence which is to be observed in
the performance, that which is expected if a godfather of a family shall be required.
- This provision provides for a negative definition of “proper diligence of a good father of a family”

FRAUD distinguished from NEGLIGENCE

FRAUD NEGLIGENCE
There is deliberate intention to cause There is no deliberate intention to cause damage.
damage.
Liability cannot be mitigated. Liability may be mitigated.
Waiver for future fraud is void. Waiver for future negligence may be allowed in certain cases:

DILIGENCE – the attention and care required of a person in a given situation and is opposite of negligence.

NEGLIGENCE – consists in the omission of that diligence which is required by the nature of the particular
obligation andcorresponds with the circumstances of the persons, of the time, and of the place.

KINDS of DILIGENCE:
1 . D I L I G E N C E O F A G O O D FAT H E R – a g o o d fa t h e r d o e s n o t a b a n d o n h i s f a m i l y,
h e i s a l w a y s r e a d y t o p r o v i d e a n d protect his family; ordinary care which an average and
reasonably prudent man would do.
2. Diligence required by the law governing the particular obligation
3. Diligence stipulated by the parties

1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or
when the natureoftheobligationrequirestheassumptionofrisk, nopersonshallberesponsibleforthoseeventswhichcouldnotbe
foreseen,orwhich,thoughforeseen,wereinevitable.

FORTUITOUS EVENT – an occurrence or happening which could not be foreseen or even if foreseen, is
inevitable; absolutelyindependent of human intervention; act of God.
FORCE MAJEURE - an event caused by the legitimate or illegitimate acts of persons other than the obligor;
there is humanintervention.

REQUISITES OF FORTUITOUS EVENT: [IU-IF]

1.Independent of the human will (or at least of the obligor’s)
2.Unforeseen or unavoidable
3.Of such character as to render it impossible for the obligor to comply with his obligation in a
normal manner
4.Obligor –free from any participation/aggravation of the injury to the obligee (no negligence or
imprudence)

EXEPTIONS:
1 . W h e n i t i s e x p r e s s l y s t i p u l a t e d t h a t h e s h a l l b e l i a b l e e ve n i f n o n -
p e r f o r m a n c e o f t h e o b l i g a t i o n i s d u e t o f o r t u i t o u s events;
2 . W h e n t h e n a t u r e o f t h e o b l i g a t i o n re q u i re s t h e a s s u m p t i o n o f r i s k ;
3.When the obligor is in delay;
4 . W h e n t h e o b l i g o r h a s p r o m i s e d t h e s a m e t h i n g t o t w o o r m o re p e r s o n s w h o
do not have the same interest;
5 . W h e n t h e p o s s e s s o r i s i n b a d fa i t h a n d t h e t h i n g l o s t o r d e t e r i o r a t e d d u e t o
f o r t u i t o u s e ve n t ;
6.When the obligor contributed to the loss of the thing.

1175. Usurious transactions shall be governed by special laws.

* see Article 1413

USURY – contracting for or receiving interest in excess of the amount allowed by law for the loan or use of
money, goods, etc.

USURY LAW – makes the usurers criminally liable if the interest charged on loans are more that the limit
prescribed by law.
•This law is repealed – Circular No. 905 of the Central Bank has expressly removed the interest
ceilings prescribed by the USURY LAW.

1176. The receipt of the principal by the creditor without reservation with respect to the interest,
shall give rise tothepresumptionthatsaidinteresthasbeenpaid.
The receipt of a later installment of a debt without reservation as to prior installments, shall likewise
raise thepresumptionthatsuchinstallmentshavebeenpaid.
•These are mere presumptions.
•To be sure – write the interest and the dates covered by such payment in the receipt.

1177. The creditors, after having pursued the property in possession of the debtor to satisfy their
claims, mayexercisealltherightsandbringalltheactionsofthelatterforthesamepurpose,savethosewhichareinherentinhis
person; they may also impugn the acts which the debtor may have done to defraud them.

REMEDIES AVAILABLE TO CREDITORS FOR THE SATISFACTION OF THEIR CLAIMS:

1.Exact fulfillment with right to damages
2.Exhaustion of the debtor’s properties still in his possession – writ of
a t t a c h m e n t ( b e fo r e j u d g m e n t ) o r w r i t o f e xe c u t i o n (for final judgment not yet
executed)
3.ACCION SUBROGATORIA – an action where the creditor whose claims had not been fully satisfied,
may go after thedebtors (3rd person) of the defendant debtor.
4 . A C C I O N PAU L I A NA – a n a c t i o n w h e r e t h e c re d i t o r f i l e s a n a c t i o n i n c o u r t f o r
t h e R E S C I S S I O N o f a c t s o r c o n t r a c t s e n t e r e d into by the debtor designed to defraud the
former.
1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has
been no stipulation to the contrary.

EXCEPTIONS:
A) Those not transmissible by their nature like purely personal rights;
B) Those not transmissible by provision of law;
C) Those not transmissible by stipulation of parties.