CHAPTER 2.

-- NATURE AND EFFECT Remedies Available to the Creditor (specific

OF OBLIGATIONS Articles 1163 - 1168 in performance, substitute performance,
relation to Art. 1156. Balane: Three types of equivalent performance.) A. In obligations
obligations.-- (1) obligation to give; (2) to give 1. A determinate thing a. Specific
obligation to do; and (3) obligation not to performance b. Equivalent performance 2. A
do. I. Obligation to give A. Specific thing B. generic thing, all remedies are available B.
Generic thing II. To do III. Not to do (this In an obligation to do, make a distinction: 1.
includes all negative obligations like Obligation to do w/c is purely personal, only
obligation not to give.) Kinds of equivalent performance is available 2.
performance.-- (1) specific performance Obligation to do w/c is not personal a.
(performance by the debtor himself); (2) substitute performance b. equivalent
substitute performance (performance at the performance Note that in obligations to do,
expense of the debtor); (3) equivalent specific performance is not available. The
performance (grant of damages.) Articles reason for this is that specific performance
1163 - 1166 cover obligation to give. Three will give rise to involuntary servitude. C.
Accessory Obligations: 1. Art. 1163.-- To Obligation not to do 1. substitute
take care of the thing w/ the diligence of a performance 2. equivalent performance. In
good father of a family until actual delivery. all these cases, the creditor has the option of
2. Art. 1164.-- To deliver the fruits to the resolution or rescission under Art. 1191. In
creditor (fruits produced after obligation to addition, he can also claim damates. Art.
deliver arises.) 3. Art. 1166.-- To deliver 1165. When what is to be delivered is a
accessions and accessories. Art. 1163. Every determinate thing, the creditor, in addition to
person obliged to give something is also the right granted him by article 1170, may
obliged to take care of it with the proper compel the debtork to make the delivery. If
diligence of a good father of a family, unless the thing is indeterminate or generic, he may
the law or the stipulation of the parties ask that the obligation be complied with at
requires another standard of care. Art. 1164. the expense of the debtor. If the obligor
The creditor has a right to the fruits of the delays, or has promised to deliver the same
thing from the time the obligation to deliver thing to two or more persons who do not
arises. However, he shall have no real right have the same interest, he shall be
over it until the same has been delivered to responsible for any fortuitous event until he
him. Balane: From the time the obligation has effected the delivery. Art. 1166. The
arises, the creditor has a personal right obligation to give a determinate thing
against the debtor as to the fruits. But he has includes that of delivering its accessions and
no real right over them until actual delivery. accessories, even though they may not have
Real right is a right w/c is enforceable been mentioned. Art. 1167. If a person
against the whole world. He has only the obliged to do something fails to do it, the
personal right against the debtor w/ regard to same shall be executed at his cost. This
the undelivered fruits. This is bec. of the same rule shall be observed if he does it in
principle Non nudis pactis, sed traditione, contravention of the tenor of the obligation.
dominia rerum transferentur." (It is not by Furthermore, it may be decreed that what
mere agreement, but by delivery, is has been poorly done be undone. Art. 1168.
ownership transferred.) Personal right arises When the obligation consists in not doing
from the time the obligation to deliver arises and the obligor does what has been
whereas the real right does not arise until forbidden him, it shall also be undone at his
actual delivery. Articles 1165 - 1167.-- expense. Articles 1169 - 1174.-- Irregularity
of Performance. Balane: Two Classes of must be something in the contract w/c
Irregularity of Performance: I. Attributable explicitly states that the demand is not
to the debtor A. Fraud B. Negligence C. necessary in order that delay may set in. (2)
Delay II. Not attributable to the debtor A. When from the nature and the circumstances
Fortuitous event. Art. 1169. Those obliged of the obligation it appears that the
to deliver or to do something incur in delay designation of the time when the thing is to
from the time the obligee judicially or be delivered or the service is to be rendered
extrajudicially demands from them the was a controlling motive for the
fulfillment of their obligation. However, the establishment of the contract. Illustration:
demand by the creditor shall not be Bong Baylon is getting married in
necessary in order that delay may exist: (1) Valentines '96. Inno Sotto was supposed to
When the obligation or the law expressly so make Ella's (the bride) wedding gown. Feb.
declare; (2) When from the nature and the 14 comes , no gown was delivered. Ella gets
circumstances of the obligation it appears married in blue jeans and t-shirt. Finally, on
that the designation of the time when the Feb. 15, Inno delivers the gown. xxx Ella
thing is to be delivered or the service is to be sues Inno for breach. Inno says there was no
rendered was a controlling motive for the demand. In this case, demand is not
establishment of the contract; (3) When necessary in order that delay may exist. (3)
demand would be useless, as when the When demand would be useless, as when
obligor has rendered it beyond his power to the obligor has rendered it beyond his power
perform. In reciprocal obligations, neither to perform.-- Example is the case of Chavez
party incurs in delay if the other does not v. Gonzales, infra. BALANE CASES:
comply or is not ready to comply in a proper AGCAOILI VS. GSIS [165 S 1] - There was
manner with what is incumbent upon him. then a perfected contract of sale bet. the
From the moment one of the parties fulfills parties; there had been a meeting of the
his obligation, delay by the other begins. minds upon the purchase by Agcaoili of a
Balane: When does delay set in?-- Delay determinate house and lot in the GSIS
sets in in the following manner: 1. For Housing Project at Nangka, Marikina, Rizal,
Reciprocal simultaneous obligations.-- by at a definite price payable in amortizations
the readiness of one of the parties to perform at P31.56 per mo., and from the moment the
and his letting the other party know; and the parties acquired the right to reciprocally
other party is not ready to comply in a demand performance. It was, to be sure, the
proper manner w/ what is incumbent upon duty of the GSIS, as seller, to deliver the
him. 2. For Reciprocal obligations w/c are thing sold in a condition suitable for its
not simultaneous.-- Gen. Rule: Demand is enjoyment by the buyer for the purpose
necessary (Art. 1169, par. 1.) This is called contemplated, in other words, to deliver the
mora solvendi ex persona. Exception: When house subject of the contract in a reasonably
demand is not necessary (the exceptions are livable state. This it failed to do. xxx Since
found in Art. 11 69, par. 2.) This is called GSIS did not fulfill that obligation, and was
mora solvendi ex re What kind of demand is not willing to put the house in habitable
necessary?-- Judicial or extra-judicial state, it cannot invoke Agcoili's suspension
Exceptions: (1) When the obligation or the of payment of amortization as cause to
law expressly so declare.-- when the cancel the contract bet. them. It is axiomatic
contract says that w/o the necessity of that "(i)n reciprocal obligations, neither
demand, default sets in upon the failure of party incurs in delay if the other does not
the obligor to perform on due date. There comply or is not ready to comply in a proper
manner with what is incumbent upon him. knew and was aware of when he entered into
SSS VS. MOONWALK [221 S 119] - the contract, should be held liable in
Requisites in order that debtor ma be in damages for breach of contract. Under Art.
default; Necessity of demand.-- To be in 1170, not only debtors guilty of fraud,
default "xxx is different from mere delay in negligence or default but also every debtor,
the grammatical sense, bec. it involves the in general, who fails the performance of his
beginning of a special condition or status obligation is bound to indemnify for the
w/c has its own peculiar effects or results." losses and damages caused thereby.
In order that the debtor may be in default it Meaning of phrase "in any manner
is necessary that the following requisites be contravene the tenor" of the obligation.--
present: (1) that the obligation be The phrase includes any illicit task w/c
demandable and already liquidated; (2) that impairs the strict and faithful fulfillment of
the debtor delays performance; and (3) that the obligation, or every kind of defective
the creditor requires the performance performance. Balane: This phrase is a catch-
judicially or extrajudicially. Default all provision. At worst, it is a superfluity. At
generally begins from the moment the best, there is a safety net just in case there is
creditor demands the performance of the a culpable irregularity of performance w/c is
obligation. Nowehere in this case did it not covered by fraud, negligence or delay. In
appear that SSS demanded from Moonwalk this case, the SC was apparently not sure as
the payment of its monthly amortization. to what category the breach fell. This phrase
Neither did it show that petitioner demanded is not really an independent ground.
the payment of the stipulated penalty upon TELEFAST VS. CASTRO [158 s 445] - In
the failure of Moonwalk to meet its monthly the case at bar, petitioner and private
amortization. What the complaint itself respondent Sofia C. Crouch entered into a
showed was that SSS tried to enforce the contract whereby, for a fee, petitioner
obligation somethime in Sept, 1977 by undertook to send said private respondent's
foreclosing the real estate mortgages message overseas by telegram. This,
executed by Moonwalk in favor of SSS. But petitioner did not do, despite performance
this foreclosure did not push through upon by said pvt. resp. of her obligation by paying
Moonwalk's requests and promises to pay in the required charges. Petitioner was
full. The next demand for payment therefore guilty of contravening its
happened on Oct. 1, 1979 when SSS issued obligation to said private respondent and is
a Statement of Account to Moonwalk. And thus liable for damages. NPC VS. CA [161
in accordance w/ said statement, Moonwalk S 334] - NPC cannot escape liability bec. its
paid its loan in full. What is clear, therefore, negligence was the proximate cause of the
is that Moonwalk was never in default bec. loss and damage even though the typhoon
SSS never compelled performance. Art. was an act of God.-- It is clear from the
1170. Those who in the performance of their appellate court's decision that based on its
obligation are guilty of fraud, negligence or findings of fact and that of the trial court's,
delay, and those who in any manner petitioner NPC was undoubtedly negligent
contravene the tenor thereof, are liable for bec. it opened the spillway gates of the
damages. BALANE CASES: ARRIETA Angat Dam only at the height of typhoon
VS. NARIC [10 S 79] - One who assumes a "Welming" when it knew very well that it
contractual obligation and fails to perform was safer to have opened the same gradually
the same on account of his inability to meet and earlier, as it was also undeniable that
certain bank requirements which inability he NPC knew of the coming of the typhoon at
least 4 days bef. it actually struck. And even thus making it liable for damages. Fraud
though the typhoon was an act of God or Balane: Is it correct to say that fraud in Art.
what we may call force majeure, NPC 1170 means deceit or insiduous
cannot escape liability bec. its negligence machinations? No. LEGASPI OIL VS. CA
was the proximate cause of the loss and [224 S 213] - Definition of Fraud.-- In
damage. As we have said in Juan Nakpil & general, fraud may be defined as the
Sons vs. CA, 144 SCRA 596, Thus, if upon voluntary execution of a wrongful act, or
the happening of a fortuitous event or an act willful omission, knowing and intending the
of God, there concurs a corresponding fraud, effects w/c naturally and necessarily arise
negligence, delay or violation or from such act or omission; the fraud referred
contravention in any manner of the tenor of to in Art. 1170 is the deliberate and
the obligation as provided for in Art. 1170, intentional evasion of the normal fulfillment
w/c results in a loss or damage, the obligor of obligation; it is distinguished from
cannot escape liability. The principle negligence by the presence of deliberate
embodied in the act of God doctrine strictly intent, w/c is lacking in the latter. Balane:
requires that the act must be one occasioned Fraud as used in Art. 1170 is different from
exclusively by the violence of nature and fraud as a cause for vitiation of consent in
human agencies are to be excluded from contracts (more properly called deceit w/c
creating or entering into the cause of the prevents the contract from arising; this is
mischief. When the effect, the cause of w/c found in Art. 1380, et seq.) Q: What is a
is to be considered, is found to be in part the synonym for fraud as used in Art. 1170? A:
resulf of the participation of man, whether it Malice. Effects of Fraud: 1. Creditor may
be from active intervention or neglect, or insist on performance, specific or substitute
failure to act, the whole occurence is thereby (Art. 1233.) 2. Creditor may resolve/ rescind
humanized, as it was, and removed from the (Art. 1191.) 3. Damages in either case (Art.
rules applicable to the acts of God. Thus, it 1170.) Negligence Negligence is the absence
has been held that when the negligence of a of something that should be there-- due
person concurs w/ an act of God in diligence. Delay Delay is the non-fulfillment
producing a loss, such person is not exempt of the obligation w/ respect to time. Kinds of
from liability by showing that the immediate Delay: 1. Mora Solvendi -- delay in the
cause of the damage was the act of God. To performance (on the part of the debtor); 2.
be exempt from liability for loss bec. of an Mora Accipiendi -- delay in the acceptance
act of God, he must be free from any (on the part of the creditor); 3.
previous negligence or misconduct by w/c Compensation Morae -- mutual delay Art.
the loss or damage may have been 1171. Reponsibility arising from fraud is
occasioned. RCPI VS. RODRIGUEZ [182 S demandable in all obligations. Any waiver
889] - Resp. Rodriguez and RCPI entered of an action for future fraud is void. Art.
into a contract whereby for a fee RCPI 1172. Responsibility arising from
undertook to send the respondent's message negligence in the performance of every kind
overseas. When, therefore, resp. Rodriguez of obligation is also demandable, but such
paid RCPI to deliver his message overseas liability shall may be regulated by the
by telegram, RCPI obligated itself to courts, according to the circumstances.
transmit the messages to the addressee. BALANE CASE: METROBANK VS. CA
Clearly, RCPI reneged on its obligation [237 S 761] - As borne out by the records,
when it failed to deliver the messages or to the dishonoring of the resp.'s checks
inform the sender about the non-delivery, committed through negligence by the
petitioner bank on 4/6/82 was rectified only There are two guides: (1) Diligence
on 4/15/82 or nine days after receipf of the demanded by circumstances of person, place
credit memo. Clearly, petitioner bank was and time (2) Care required of a good father
remiss in its duty and obligation to treat pvt. of a family (fictional bonus pater familias
resp's account w/ the highest degree of care, who was the embodiment of care, caution
considering the fiduciary nature of the and protection in Roman law.) In common
relationship. The bank is under obligation to law, the degree of care required is the
treat the accounts of its depositors w/ diligence of a prudent businessman. This is
meticulous care, whether such account actually the same as the diligence of a good
consists only of a few hundred pesos or of father of a family. Effects of Negligence: 1.
millions. It must bear the blame for failing Creditor may insist on performance, specific
to discover the mistake of its employee or substitute (Art. 1233.) 2. Creditor may
despite the established procedure requiring resolve/ rescind (Art. 1191.) 3. Damages in
bank papers to pass through bank personnel either case (Art. 1170.) BALANE CASE:
whose duty it is to check and countercheck JIMENEZ VS. CITY OF MANILA [150 S
them for possible errors. Responsibility 510] - City of Mla. failed to exercise the
arising from negligence in the performance diligence of a good father of a family w/c is
of every kind of obligation is demandable. a defense in quasi-delict.-- As a defense
xxx II. Diligence required Balane: against liability on the basis of quasidelict,
Negligence is covered by Articles 1170, one must have exercised the diligence of a
1172 and 1173 Art. 1173. The fault or good father of a family. There is no
negligence of the obligor consists in the argument that it is the duty of the City of
omission of that diligence which is required Mla. to exercise reasonable care to keep the
by the nature of the obligation and public market reasonably safe for people
corresponds with the circumstances of the frequenting the place for their marketing
persons, of the time and of the place. When needs. While it may be conceded that the
negligence shows bad faith, the provisions fulfillment of such duties is extremely
of articles 1171 and 2201, paragraph 2, shall difficult during storms and floods, it must,
apply. Art. 1171. Responsibility arising from however, be admitted that ordinary
fraud is demandable in all obligations. Any precautions could have been taken during
waiver of an action for future fraud is void. good weather to minimize the dangers to life
Art. 2201. xxx (2) In contracts and quasi- and limb under those difficult
contracts, the damages for which the obligor circumstances. For instance, the drainage
who acted in good faith is liable shall be hole could have been placed under the stalls
those that are the natural and probable instead of on the passage ways. Even more
consequences of the breach of the important is the fact, that the City should
obligation, and which the parties have have seen to it that the openings were
foreseen or could have reasonably foreseen covered. Sadly, the evidence indicates that
at the time the obligation was constituted. In long before petitioner fell into the opening,
case of fraud, bad faith, malice or wanton it was already uncovered, and 5 mos. after
attitude, the obligor shall be responsible for the incident happened, the opening was still
all damages which may be reasonably uncovered. Moreover, while there are
attributed to the nonperformance of the findings that during floods the vendors
obligation. Balane: Negligence is the remove the iron grills to hasten the flow of
absence of something that should be there-- water, there is no showing that such practice
diligence. Measure of Due Diligence.-- has ever been prohibited, much less
penalized by the City of Mla. Neither was it right to a reduction of the rent on account of
shown that any sign had been placed the sterility of the land leased, or by reason
thereabouts to warn passers-by of the of the loss of fruits due to ordinary
impending danger. Extraordinary diligence fortuitous events; but he shall have such
required A. Innkeeper Art. 2000. The right in case of loss of more than one-half of
responsibility referred to in the two the fruits through extraordinary and
preceding articles shall include the loss of, unforeseen fortuitous events, save always
or injury to the personal property of the when there is a specific stipulation to the
guests caused by the servants or employees contrary. Extraordinary fortuitous events are
of the keepers of hotels or inns as well as by understood to be: fire, war, pestilence,
strangers; but not that which may proceed unusual flood, locusts, earthquake, or others
from any force majeure. The fact that which are uncommon, and which the
travellers are constrained to rely on the contracting parties could not have
vigilance of the keeper of the hotelss or inns reasonably foreseen. III. Loss due to
shall be considered in determining the Fortuitous Events Art. 1174. Except in cases
degree of care required of him. Art. 2001. expressly specified by law, or when it
The act of a thief or robber, who has entered otherwise declared by stipulation, or when
the hotel is not deemed force majeure, the nature of the obligation requires the
unless it is done with the use of arms or assumption of risk, no person shall be
through an irresistible force. B. Common responsible for those events which could not
Carriers Art. 1733. Common carriers, from be foreseen, or which ,though foreseen, were
the nature of their business and for reasons inevitable. Balane: General Rule: The
of public policy, are bound to observe happening of a fortuitous event exonerates
extraordinary diligence in the vigilance over the debtor from liability. Exceptions: 1.
the goods and for the safety of the When the law so specifies.-- e.g., if the
passengers transported by them, according debtor is already in delay (Art. 1165, par. 3.)
to all the circumstances of each case. Such 2. When the parties so agree 3. When the
extraordinary diligence in the vigilance over nature of the obligation requires the
the goods is further expressed in articles assumption of risk, e.g., an insurance
1734, 1735, and 1745, Nos. 5, 6, and 7, contract. BALANE CASES: NAKPIL &
while the extraordinary diligence for the SONS VS. CA [144 S 596] - Requisites for
safety of passengers is further set forth in exemption from liability due to an "act of
articles 1755 and 1756. Art. 1734. Common God."-- To exempt the obligor from liability
carriers are responsible for the loss, under Art. 1174, for a breach of an
destruction, or deterioration of the goods, obligation due to an "act of God," the
unless the same is due to any of the following must concur: (a) the cause of the
following causes only: (1) Flood, storm, breach of the obligation must be
earthquake, lightning, or other natural independent of the will of the debtor; (b) the
disaster or calamity; (2) Act of the public event must be either unforseeable or
enemy in war, whether international or civil; unavoidable; (c) the event must be such as to
(3) Act or omission of the shipper or owner render it impossible for the debtor to fulfill
of the goods; (4) The character of the goods his obligation in a normal manner; and (d)
or defects in the packing or in the the debtor must be fee from any
containers; (5) Order or act of competent participation in, or aggravation of the injury
public authority. C. Lessee of Agricultural to the creditor. Balane: Some of the
land Art. 1680. The lessee shall have no elements were present in this case. What
was absent was the last element. NAKPIL & fatal injuries w/c killed them. The sudden
SONS VS. CA [160 S 334] - "One who act of the passenger who stabbed another
negligently creates a dangerous condition passenger in the bus is w/in the context of
cannot escape liability for the natural and force majeure. However, in order that a
probable consequences thereof, although the common carrier may be absolved from
act of a third person, or an act of God for liability in case of force majeure, it is not
w/c he is not responsible, intervenes to enough that the accident was caused by
precipitate the loss." (citing Tucker v. Milan, force majeure. The common carrier must
49 OG 4379, 4380.) QUISIMBING VS. CA still prove that it was not negligent in
[189 S 605] - PAL's failure to take certain causing the injuries resulting from such
steps that a certain passenger in hindsight accident. Considering the factual findings of
believes should have been taken is not the the CA-- the bus driver did not immediately
negligence or misconduct w/c mingles w/ stop the bus at the height of the commotion;
force majeure as an active and cooperative the bus was speeding from a full stop; the
cause.-- A careful analysis of the record in victims fell from the bus dorr when it was
relation to the memoranda and other opened or gave way while the bus was still
pleadings of the parties, convinces this running; the conductor panicked and blew
Court of the correctness of the essential his whistle after people had already fallen
conclusion of both the trial and appellate off the bus; and the bus was not properly
courts that the evidence does indeed fail to equipped w/ doors in accordance w/ law-- it
prove any want ot diligence on the part of is clear that petitioners have failed to
PAL, or that, more specifically, it had failed overcome the presumption of fault and
to comply with applicable regulations, or negligence found in the law governing
universally accepted and observed common carriers. The petitioner's argument
procedures to preclude hijacking; and that that the petitioners "are not insurers of their
the particular acts singled out by the passengers" deserves no merit in view of the
petitioners as supposedly demonstrative of failure of the petitioners to prove that the
negligence were, in the light of the deaths of the 2 passengers were exclusively
circumstances of the case, not in truth due to force majeure and not to the failure of
negligent acts "sufficient to overcome the the petitioners to observe extraordinary
force majeure nature of the armed robbery." diligence in transporting safely the
The Court quite agrees, too, w/ the passengers to their destination as warranted
Appellate Tribunal's wry observation that by law. NPC VS. CA [222 S 415] -
PAL's failure to take certain steps that a Petitioners cannot be heard to invoke the act
passenger in hindsight believes should have of God or force majeure to escape liability
been taken is not the negligence or for the loss or damage sustained by the pvt.
misconduct w/c mingles w/ force majeure as respondents since they, the petitioners, were
an active and cooperative cause." guilty of negligence. The event then was not
BACHELOR EXPRESS VS. CA [188 S occasioned exclusively by an act of God or
216] - The running amuck of the passenger force majeure; a human factor-- negligence
was the proximate cause of the incident as it or imprudence-- had intervened. The effect
triggered off a commotion and panic among then of the force majeure in question may be
the passengers such that the passengers deemed to have, even if only partly, resulted
started running to the sole exit shoving each from the participation of man. Thus, the
other resulting in the falling off the bus by whole occurence was thereby humanized, as
passengers Beter and Rautraut causing them it were, and removed from the rules
applicable to acts of God. SIA VS. CA [222 it longer than the period stipulated, or after
S 24] - SBTC's negligence aggravated the the accomplishment of the use for which the
injury or damage to the petitioner w/c commodatum has been constituted; (3) If the
resulted from the loss or injury or damage to thing loaned has been delivered with
the petitioner w/c resulted from the loss or appraisal of its value, unless there is a
destruction of the stamp collection. SBTC stipulation exempting the bailee from
was aware of the floods of 1985 and 1986; it responsibility in case of a fortuitous event;
also knew that the floodwaters inundated the (4) If he lends or leases the thing to a third
room where Safe Deposit Box No. 54 was person, who is not a member of his
located. In view thereof, it should have lost household; (5) If, being able to save either
no time in notifying the petitioner in order the thing borrowed or his own thing, he
that the box could have been oped to retrieve chooses to save the latter. Negotiorum
the stamps, thus saving the same from Gestio Art. 2147. The officious manager
further deterioration and loss. In this respect, shall be liable for any fortuitous event: (1) If
it failed to exercise th reasonable care and he undertakes risky operations which the
prudence expected of a good father of a owner was not accustomed to embark upon;
family, thereby becoming a party to the (2) If he has preferred his own interest to
aggravation of the injury or loss. that of the owner; (3) If he fails to return the
Accordingly, the aforementioned fourth property or business after demand by the
characteristic (the debtor must be fee from owner; (4) If he assumed the management in
any participation in, or aggravation of the bad faith. Art. 2148. Except when the
injury to the creditor) of a fortuitous event is management was assumed to save the
absent. xxx NPC VS. CA [223 S 649] - property or business from imminent danger,
Petitioners have raised the same issues and the officious manager shall be liable for
defenses as in the 2 other decided cases fortuitous events: (1) If he is manifestly
therein mentioned. Predictably therefore, unfit to carry on the management; (2) If by
this petition must perforce be dismissed bec. his intervention he prevented a more
the losses and damages sustained by the competent person from taking up the
private resp.'s had been proximately caused management. Payee in Solutio Indebiti Art.
by the negligence of the petitioners, 2159. Whoever in bad faith accepts an
although the typhoon w/c preceded the undue payment, shall pay legal interest if a
flooding could be considered as a force sum of money is involved, or shall be liable
majeure. A. Exceptions 1. Express Provision for fruits received or which should have
of Law Depositary Art. 1979. The been received if the thing produces fruits.
depositary is liable for the loss of the thing He shall furthermore be answerable for any
through a fortuitous event: (1) If it is so loss or impairment of the thing from any
stipulated; (2) If he uses the thing without cause, and for damages to the person who
the depositor's permission; (3) If he delays delivered the thing, until it is recovered.
its return; (4) If he allows others to use it, Lessee Art. 1648. Every lease of real estate
even though he himself may have been may be recorded in the Registry of Property.
authorized to use the same. Bailee in Unless a lease is recorded, it shall not be
commodatum Art. 1942. The bailee is liable binding upon third persons. Art. 1671. If the
for the loss of the thing, even if it should be lessee continues enjoying the thing after the
through a fortuitous event: (1) If he devotes expiration of the contract, over the lessor's
the thing to any purpose different from that objection, the former shall be subject to the
for which it has been loaned; (2) If he keeps responsibilities of a possessor in bad faith.
Art. 552. xxx. A possessor in bad faith shall be liable for deterioration or loss in every
be liable for deterioration or loss in every case, even if caused by a fortuitous event. b.
case, even if caused by a fortuitous event. Mora accipiendi Art. 1718. The contractor
Independent Contractor Art. 1727. The who has undertaken to put only his work or
contractor is responsible for the work done skill, cannot claim any compensation if the
by persons employed by him. Art. 1728. The work should be destroyed before its
contractor is liable for all the claims of delivery, unless there has been delay in
laborers and others employed by him, and of receiving it, or if the destruction was caused
third persons for death or physical injuries by the poor quality of the material, provided
during the construction. Common Carrier this fact was communicated in due time to
Art. 1763. A common carrier is responsible the owner. If the material is lost through a
for injuries suffered by a passenger on fortuitous event, the contract is
account of the wilful acts or negligence of extinguished. Art. 1504. Unless otherwise
other passengers or of strangers, if the agreed, the goods remain at the seller's risk
common carrier's employees through the until the ownership therein is transferred to
exercise of the diligence of a good father of the buyer, but when the ownership therein is
a family could have prevented or stopped transferred to the buyer the goods are at the
the act or omission. 2. Mora or default a. buyer's risk whether actual delivery has been
Mora solvendi Art. 1165. xxx. xxx If the made or not, except that: (1) Where delivery
obligor delays, or has promised to deliver of the goods has been made to the buyer or
the same thing to two or more persons who to a bailee for the buyer, in pursuance of the
do not have the same interest, he shall be contract and the ownership in the goods has
responsible for any fortuitous event until he been retained by the seller merely to secure
has effected the delivery. Art. 1169. Those performance by the buyer of his obligations
obliged to deliver or to do something incur under the contract, the goods are at the
in delay from the time the obligee judicially buyer's risk from the time of such delivery;
or extrajudicially demands from them the (2) Where actual delivery has been delayed
fulfillment of their obligation. However, the through the fault of either the buyer or seller
demand by the creditor shall not be the goods are at the risk of the party in fault.
necessary in order that delay may exist: (1) 3. Express agreement Art. 1306. The
When the obligation or the law expressly so contracting parties may establish such
declare; (2) When from the nature and the stipulations, clauses, terms and conditions as
circumstances of the obligation it appears they may deem convenient, provided they
that the designation of the time when the are not contrary to law, morals, good
thing is to be delivered or the service is to be customs, public order, or public policy. 4.
rendered was a controlling motive for the Aleatory Contract Art. 2010. By an aleatory
establishment of the contract; (3) When contract, one of the parties or both
demand would be useless, as when the reciprocally bind themselves to give or to do
obligor has rendered it beyond his power to something in consideration of what the other
perform. In reciprocal obligations, neither shall give or do upon the happening of an
party incurs in delay if the other does not event which is uncertain, or which is to
comply or is not ready to comply in a proper occur at an indeterminate time. (not in
manner with what is incumbent upon him. Baviera's outline) Art. 1175. Usurious
From the moment one of the parties fulfills transactions shall be governed by special
his obligation, delay by the other begins. laws. Tolentino: Usury.-- Usury is the
Art. 552. xxx A possessor in bad faith shall contracting for or receiving something in
excess of the amount allowed by law for the
loan or forbearance or money, goods or
chattels. Special law on usury.-- The Usury
Law was Act No. 2655. This law was
repealed during the period of martial law,
leaving parties free to stipulate higher rates.
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 installment of a debt without
reservation as to prior installments, shall
likewise raise the presumption that such
installments have been paid. Art. 1177. The
creditors, after having pursued the property
in possession of the debtor to satisfy their
claims, may exercise all the rights and bring
all the actions of the latter for the same
purpose, save those which are inherent in his
person; they may also impugn the acts
which the debtor may have done to defraud
them. Balane: Against what can the obligee
demand performance? 1. Against non-
exempt properties of the debtor.-- The
debtor is liable with all his property, present
and future, for the fulfillment of his
obligations, subject to the exemptions
provided by law. (Art. 2236.) 2. If number
one is nog enought, the creditor goes to any
claims w/c the debtor may have against third
persons. This is called accion subrogatoria,
wherein the creditor is subrogated in the
rights of the debtor. 3. Accion pauliana
(Articles 1387-89).-- This is the right of
creditors to set aside fraudulent transfers w/c
the debtor made so much of it as is
necessary to pay the debts. 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.