Nature and Effect of Obligations

Article 1163

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

Article 1163 speaks of the obligation to give a determine thing. The person obliged to give a determine
thing 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 of care.

Prestations in an Obligation

There are three prestations in an obligation: to give, to do or not to do. In an obligation give, the thing
may either be determine (specific) or indeterminate (Generic). The thing is determinate when the
object is particularly designated or physically segregated from all others of the same class.

On the other hand, the thing is said to be Generic when the object is designated merely by its class or
genus without any particular designation or physical segregation from all others of the same class.

DETERMINATE OR SPICIFIC THING

 A 2009 Toyota Corolla with Engine No.123456 body No.546611 and plate no. FRS 840
 My only wristwatch
 My Dog named Telay

INDETERMINATE OR GENERIC THING

 horse
 A car
 P10,000.00

Diligence of a Good Father of a Family

The law made the “diligence of a Good Father of a Family” as the reference point as to the kind of
diligence a person obliged to deliver a determinate thing must observe. It is an accepted notion that no
father would ever want to risk his family. Hence, when a person is obliged to give something, he is
likewise obliged to preserve and take good care of the thing and this he may achieve by treating the
same as his own.

The diligence of a Good Father of a Family is best described as that which is required by the nature of
the obligation and correspond with the circumstances of person, time and place (Article 1173).

Diligence Required
The kind of diligence required may vary if there is a law or stipulation by the contracting parties that
requires another standard of care. The order of priority is as follows:

1. By provision of the law. An example of provision of law which requires a standard of care is
Article 1733 of the Civil Code. It requires another standard of care where common carriers are
involved. Common carriers, from the nature of their business and for reason of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of
the passenger transported by them, according to all circumstance of each ease.
2. By stipulation of the parties. If another standard of care other than diligence of a Good Father
of a Family, then stipulation shall prevail. However, the care stipulation shall not be one that
waives the most standard care.
3. In the absence of law and stipulation. The diligence of a Good Father of a Family shall apply.

Article 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.

Kinds of Fruits

1. Natural Fruits are the spontaneous products of soil, and the young and other products of
animals. Example are plants and trees that grow without human intervention.
2. Industrial Fruits are those produced by lands of any kind through cultivation or labor. Example
are vegetables, rice and sugar cane planted and cared for human.
3. Civil Fruits are the rents of building, the price of leases of lands and other property.

Personal and Real Rights

1. Personal right or jus in personam. A personal right is a power demandable by one person of
another to give, to or not to do.
2. Real Fruits or jus in re. A real right is a power over a specific thing and is binding on the whole
world.

When Obligation to Deliver Arises

The question as to when the obligation to deliver arises depends on whether the parties have agreed
on term or condition:

1. If there is no term or condition, then from the perfection of the contract. A contract is said to be
perfected when there is a meeting of the minds between the parties.
2. If there is a term or condition, then from the moment the term arrives or the condition happens.

Kinds of Delivery

Delivery may either be actual or constructive.

 1. Actual Deliver or Tradition. The property changes hands physically. For Example, A buys cake
from the red ribbon. The giving of the cake by the red ribbon’s staff to A is actual delivery.
2. Constructive Delivery. The physical transfer of the property is implied.
1.

a. Traditio Simbolica (Symbolical Tradition)

Example: When the keys of a house are given to the new owner, the house being the object of the
sale.

b. Traditio Longa manu ( Delivery by mere consent or by pointing out of the object)

Example: When pointing out a van which is the object of the sale.

c. Traditio Brevi Manu (Delivery by the short hand) A possessor of a thing not as an owner,
becomes the possessor as owner.

Example: When a tenant already in possession of a house buys the house he is renting.

d. Traditio Constitutum Possessorium. This is the opposite of Brevi Manu. A possessor of a thing
as an owner, but in some other capacity.

Example: A house owne, who sells his house, but remains in possession as tenant of the same
house.

e. Tradition by the execution of legal forms.

Example: The execution of a public instrument selling land.

IF THE OBLIGATION IS PURE OBLIGATION

The obligation to deliver arises from perfection.

IF THE OBLIGATION IS SUBJECT TO A SUSPENSIVE PERIOD OR SUSPENSIVE CONDITION

The obligation to deliver arises upon the arrival of the term or the fulfillment of the condition.
Suspensive Period – is on date.

Suspensive Condition - is based on agreement

Article 1165

When what is to be delivered is a determine thing, the creditor, in addition to the right granted him 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 complied 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.

Determinate and Indeterminate Things

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

2. Indeteminate or Generic. When the object is designated merely by its class or genus without any
particular designation or physical segregation from all others of the same class.

Rights of Creditor if Debtor Failed to Deliver

1. If thing is determinate

a. Compel the debtor to make the delivery. This action is called specific performance.

b. Demand damages from the debtor if the debtor is guilty of fraud, negligence, delay or contravention
in the performance of the obligation (Article 1170).

2. If thing is Indeterminate

a. Ask for compliance of the obligation either by the debtor himself or by third person at the debtor’s
expense. The creditor can ask the debtor or a third party to deliver the thing belonging to the class or
genus stipulated which must be neither of superior nor of inferior quality charging all the expenses to
the debtor.

b. Demand damages from the debtor under the Article 1170.

REMEDIES OF THE CREDITOR

IF THE DEBTORS FAILS TO PERFORM HIS OBLIGATION TO DELIVER A DETERMINATE THING

 To compel the debtor to make the delivery.

 To demand damages from the debtor.

IF THE DEBTOR FAILS TO PERFORM HIS OBLIGATION TO DELIVER A GENERIC THING

 To ask that the obligation be complied with at the expense of the debtor.
 To demand damages from the debtor.

Article 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.
 1. Accessions. All of those things which are produced by the thing which is the object of the
obligation as well as all of those which are naturally or artificially attached thereto. These
include natural, industrial and civil fruits; in case of a a parcel of land, those built, planted and
sown thereon. Everything that is produced by a thing or incorporated or attached thereto,
either naturally or artificially.
2. Accessories. All of those things which have for their object the embellishment, use or
preservation of another thing which is more important and to which they are not incorporated
or attached. These include equipment of a factory, tools of a machine and key of a house.
Those joined to or included with the principal thing for the latter’s better use, perfection or
enjoyment.

Article 1167

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

This 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.

Article 1167 refers to a personal positive obligation “to do”

Remedies of the Creditor

If the debtor fails to do what is expected of him, the creditor has the following rights.

1. To have the obligation performed or executed by the debtor himself or by a third party, if
possible, at the expense of the debtor.
2. To Claim for damages because of breach ( Article 1170)

The same remedies apply when the obligation has been performed contrary to the terms agreed
upon or when the obligation was poorly done.

Pertaining to the first remedy, the debtor cannot be ordered specific performance as this may
amount to involuntary servitude which, as a rule, is prohibited under our constitution.

Still on the first remedy, performance by a third person may not be possible when the personal
qualification of the debtor is the primary consideration of the contract.

Article 1168

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

Article 1168 refers to a negative personal obligation “not to do”. Here what is being demanded of the
debtor is not the performance of an act but an omission. The obligation is fulfilled so long as the obligor
refrains from doing what has been forbidden him.
In case of breach by the obligor, the remedy of the creditor is to ask that what has been done be undone
at the obligors expense. In addition, he is entitled to claim for damages under Article 1170.

Example

B bought a farm lot from S. However the only access from the road to B’s lot is the lot of D. So B entered
into a contract with D for a right of way over a period of years and paid a sum therefor. It was agreed
that for the duration of the contract D would not construct any fence between B’s lot and his.

Article 1169

Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation.

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

(1) When the obligation or the law expressly so declare; or

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

(3) When demand would be useless, as when the obligor has rendered it beyond his power to
perform.

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

Concept of Delay

The word delay may be used in its ordinary sense and its legal sense. The two are distinguished as
follows:

1. Ordinary Delay is the failure to perform an obligation on time. This does not constitute breach.
2. Legal Delay, also known as default or mora, is the failure to perform an obligation on time
which failure constitutes a breach of the obligation. Article 1169 speaks of the legal delay. In the
succeeding discussions, whenever the word delay is used, it shall be constructed to mean legal
delay.

Kinds of default or Mora

1. Mora Solvendi. This is the delay of the obligor or debtor to perform his obligation. Delay in an
obligation to give is also called Mora Solvendi ex re while delay in an obligation to do is mora
solvendi ex persona.
2. Mora Accipiendi. This is delay of the obligee or creditor to accept the delivery of the thing which
is the object of obligation.
 3. Compensatio Morae. This is the delay of the parties or obligors in reciprocal obligations.

Example

A obtained a 1million pesos loan from B on April 8, 2001 supposed to be paid on July 8 of the same
year. July 8 came and A was unable to pay. On September 8, B filed a complaint against A
demanding for payment of principal plus legal interest.

Delay in Reciprocal Obligations

In reciprocal obligations, the fulfillment of an obligation by one party depends upon the fulfillment of
the other. The fulfillment of obligation by both parties is simultaneous. One party must comply or be
ready to comply so that the other what are incumbent upon them, delay by one party compensates for
the delay of the other. In such case, no delay is incurred by either party.

Example

Under a contract of sale. A, the vendor, obligated himself to deliver the piano to B, the vendee on May
12, 2001. B, obligated himself to pay A, 50,000, the purchase price of the piano.

Article 1170

Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof, are liable for damages.

Article 1171

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

Article 1172

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

Article 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. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2,
shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that
which is expected of a good father of a family shall be required.
Article 1174

Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when
the nature of the obligation requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which, though foreseen, were inevitable.

Article 1175

Usurious transactions shall be governed by special laws.

Article 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.

Article 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.

Article 1178

Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has been no
stipulation to the contrary.

2.