Chapter 2: Nature and Effect of Obligations Art.

1164
The creditor has a right to the fruits of the thing from the
Art. 1163 time the obligation to deliver it arises. However, he shall
Every person obliged to give something is also obliged to acquire no real right over it until the same has been
take care of it with the proper diligence of a good father of delivered to him.
a family, unless the law or the stipulation of the parties
requires another standard of care. Different kinds of fruits

1. Specific/determinate thing -particularly 1. Natural fruits

designated/physically segregated others of the 2. Industrial fruits -through cultivation and labor
same class 3. Civil fruits -by virtue of juridical relation eg.
o Identified by its INDIVIDUALITY Rents, leases, any form of income
o Cannot be substituted w/o the consent of
the creditor Right of creditor to the fruits
2. Generic/indeterminate thing -thing refers to a -protects the creditor in case the debtor commits
class/genus to which it pertains and can be pointed delay/fraud
out with particularity
o Identified by its SPECIE When oblgn to deliver fruits arises
o Can be substituted as long as it is of the -upon perfection/birth of the contract (eg. Contract of sale)
same kind -if suspensive conditional oblgn, upon fulfillment of
condition
Duties of debtor in oblgn to give a determinate thing -if oblgn w/ a period, upon arrival of the term
-in contract of sale, "all the fruits shall pertain to the vender
1. Preserve the thing; from the day on which the contract was perfected
1. degree of care:
o By stipulation of the parties If the fruit has arisen before the contract
o What the law provides was made, the vendor does not have to
o Diligence of a good father of a family render the fruits and interests of the thing
(ordinary care) since they are deemed to have been
 Factors to be considered MUTUALLY COMPENSATED
 Nature of oblgn
 General rule: if the thing 1. Personal right -right of the creditor to demand
is lost due to f.e. (force from the debtor the fulfillment of an oblgn
majeure) debtor is not 2. Real right -right of a person over a specific thing
liable (ownership, possession, mortgage) against who,
o Reason for debtor's oblgn the right may be personally enforced
 The thing to be delivered should
be in the same condition as it was
Personal Right Real Right
when the oblgn was made
 So that the debtor may not be definite passive subj,
Subjects definite active subj
negligent of his accessory duty to definite active subj
take care of the thing binding/enforceable
directed against the
Deliver the fruits of the thing Binding against a particular
whole world
Deliver the accessions an accessories person
Deliver the thing itself
Answer for damages in case of non- Ownership is acquired through
fulfillment/breach DELIVERY/tradition
Creditor does not become the owner until the
Duties of debtor in oblgn to deliver a generic thing specific thing has been deliverd to him
Personal right is acquired once the oblgn is
1. To deliver a thing which is of the quality intended demandable
by the parties taking into consideration the purpose Real right/ownership is acquired once the thing of
of the oblgn... oblgn has been delivered
2. To be liable for damages in case of fraud, If the thing was delivered to a third person who
negligence, or delay, in the performance of his acted in good faith before the oblgn has become
oblgn, or contravention (violation) of the tenor demandable, the third person is ENTITLED to the
thereof thing AGAINST the first creditor. Debtor will be
liable for damages to the first creditor.
Art. 1165 If a person obliged to do something fails to do it, the same
When what is to be delivered is a determinate thing, the shall be executed at his cost.
creditor, in addition to the right granted him by Article This same rule shall be observed if he does it in
1170, may compel the debtor to make the delivery. contravention of the tenor of the obligation. Furthermore, it
If the thing is indeterminate or generic, he may ask that may be decreed that what has been poorly done be undone.
the obligation be complied with at the expense of the
debtor. 1. Failure of debtor to perform his oblgn
If the obligor delays, or has promised to deliver the same 2. Debtor's performance of the oblgn contrary to the
thing to two or more persons who do not have the same terms
interest, he shall be responsible for any fortuitous event 3. Debtor performed the oblgn but in poor manner
until he has effected the delivery.
Remedies of creditor in positive personal oblgn
ALTERNATIVE (not cumulative) remedies of creditor in
real oblgn in case debtor fails to fulfill his oblgn
1. Failure to comply
o Perform the oblgn himself or by another,
Specific real oblgn
unless personal considerations are
involved, at the debtor's expense
1. Specific performance/fulfillment of oblgn (if still o Recover damages
possible) + damages 2. Contravention/violation of terms or oblgn poorly
o Rescission -returning what each parties done
have receive o Order by the court to undo what has been
2. Rescision/cancellation of oblgn + damages done if it is still possible
3. Payment of damages only (if it's the only feasible o Specific performance cannot be ordered in
remedy) a personal oblgn TO DO -involuntary
servitude
Generic real oblgn
Performance by third person is allowed (like in
1. Can be performed by a third person oblgn to deliver a generic thing) but he cannot be
compelled too
*no person shall be imprisoned for non-payment of If the personal qualifications of the debtor are the
debt only for non-payment of civil liability determining motive for the oblgn, remedy is
adjudged in a criminal case -Constitution indemnification for damages (if oblgn is not
performed) --> only when the oblgn cannot
Par. 3 -exceptions to gen. rule regarding f.e. (involving anymore be performed at the expense of the debtor
delivery of a determinate thing)
Art. 1168 -oblgn NOT TO DO
1. Delay When the obligation consists in not doing, and the obligor
2. When debtor promised delivery to separate does what has been forbidden him, it shall also be undone
creditors at his expense.
*debtor cannot be guilty of delay since duty is abstaining
Generic thing cannot be a subject of f.e. bec. from act
GENUS NEVER PERISHES (genus nuquamperit)
Remedies of creditor in negative personal oblgn
Art. 1166
The obligation to give a determinate thing includes that of 1. Undoing the forbidden thing + damages
delivering all its accessions and accessories, even though 2. If first remedy is impossible, damages
they may not have been mentioned. -->bec. they must go
together w/ the principal thing; accessory follows the Art. 1169
principal Those obliged to deliver or to do something incur in delay
from the time the obligee judicially or extrajudicially
Accessions -fruits of a thing/additions to/improvements demands from them the fulfillment of their obligation.
upon the principal thing However, the demand by the creditor shall not be necessary
Accessories -things joined to/included w/ the principal in order that delay may exist:
thing for the latter's embellishment, better (1) When the obligation or the law expressly so declare; or
use, or completion (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
Art. 1167 -oblgn TO DO
was a controlling motive for the establishment of the 3. Compensation morae
contract; or o *delay of debtor cancels delay of the
(3) When demand would be useless, as when the obligor creditor & vice versa
has rendered it beyond his power to perform. o No delay on both parties
In reciprocal obligations, neither party incurs in delay if the
other does not comply or is not ready to comply in a proper *if delay of one party is followed by that of the other,
manner with what is incumbent upon him. From the liability of the first infractor shall be equitably tempered by
moment one of the parties fulfills his obligation, delay by courts
the other begins. *if first infractor CND, contract - extinguished + parties
will bear their respective damages
1. Ordinary delay -failure to perform an oblgn on
time; before demand is made When demand is NOT necessary to put debtor in delay
2. Legal delay/default/mora-failure to perform an *Gen rule -delay begins from the moment a demand is
oblgn on time w/c failure constitutes a breach of made
oblgn; after demand has been made
1. When the oblgn provides
Kinds of delay 2. When the law provides
3. When time is of the essence
1. Mora solvendi -debtor to fulfill 4. When demand would be useless
2. Mora accipiendi -creditor to accept 5. Where there is performance by a party in
3. Compensatiomorae -delay of debtors in reciprocal oblgns
reciprocal oblgns (eg. contract of sale); delay of o Reciprocal oblgns: performance of one is
the debtor cancels the delay of the creditor, & vice conditioned upon the simultaneous
versa fulfillment of the part of the other
o Neither party is in delay if the other does
Requisites if delay by the debtor (morasolvendi) not comply with what is incumbent upon
*assuming the oblgn is already due/demandable him -compensation morae

1. Failure of the debtor to perform his oblgn on the *when no date is specified, oblgn is understood
date agreed upon SIMULTANEOUS
2. Demand made by the creditor (judicial/extra-
judicial) Art. 1170
3. Failure of debtor to comply with such demand 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
Effects of delay
damages.
1. Mora solvendi, debtor: Grounds for liability
o Guilty of breach of oblgn
o Liable to creditor for interest (in oblgns to
1. Fraud/deceit/dolo
pay money)/damages
o Deliberate/intentional evasion of the
 Interest commences form the time
normal fulfillment of an oblgn
of the filing of the complaint
o With malice/dishonesty/bad faith to
o Liable even for f.e. when oblgn is to
mislead/deceive another
deliver a determinate thing
 *Incidental fraud
o In oblgn to deliver a generic thing,
(doloincidente) -committed in the
delivery of the thing of the same kind +
performance of an oblgn already
damages
existing bec. of contract
2. Mora accipiendi, creditor:
 Casual fraud (dolocausante) -
o Guilty of breach of oblgn
employed in the execution of a
o Liable for damages suffered by debtor, if
contract which impairs consent;
any
fraud made to make the creditor
o Bears the risk of the loss of the thing due
enter the contract
o Debtor not liable for interest from the time
2. Negligence/fault/culpa
of the creditor's delay (in oblgn to pay
o Voluntary act/omission
money)
o No bad faith/malice w/c prevents the
o Debtor may release himself from the
normal fulfillment of an oblgn
oblgn by the consignation/deposit of the
3. Delay/mora
thing/sum due
 4. Contravention of the terms of oblgn the persons, of the time and of the place. When negligence
o Violation of terms and conditions of oblgn shows bad faith, the provisions of Articles 1171 and 2201,
o Must not be due to f.e./force majeure paragraph 2, shall apply.
If the law or contract does not state the diligence which is
Art. 1171 to be observed in the performance, that which is expected
Responsibility arising from fraud is demandable in all of a good father of a family shall be required.
obligations. Any waiver of an action for future fraud is
void. Fault/negligence -failure to observe for the protection of
the interests of another person, that degree of care,
Court is not given the power to mitigate/reduce precaution, and vigilance which the circumstances justly
damages to be awarded due to fraud demand, whereby such other person suffers injury
Fraud may be past/future
Factors to be considered
Waiver of an action for future fraud: VOID
Waiver of an action for past fraud: VALID (act of 1. Nature of oblgn
generosity/magnanimity, act of forgiveness) 2. Circumstances of the person
3. Circumstances of the time
Art. 1172 4. Circumstances of the place
Responsibility arising from negligence in the
performance of every kind of obligation is also Measure of liability for damages
demandable, but such liability may be regulated by the If in good faith: only the natural and probable
courts, according to the circumstances. consequences of the breach of oblgn
If in bad faith: damages will be reasonably attributed to the
Debtor may be liable for damages resulting from non-performance of oblgn
negligence
Degree of diligence
Validity of waiver arising from negligence
1. By stipulation
2. By law
1. Action for future negligence VOID, except in
3. Dligence of a good father of a family
oblgns whose nature requires extraordinary
diligence
2. Negligence with bad faith = fraud, thus waiver for Art. 1174
this kind of negligence is also VOID 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
Kinds of negligence accdg to source of oblgn
be responsible for those events which could not be
foreseen, or which, though foreseen, were inevitable.
1. Contractual negligence (culpa contractual)
o Negligence in contracts resulting in breach Fortuitous event
o Not a source of oblgn
o Debtor liable for damages due to pre-
1. Cannot be foreseen (impossible to foresee)
existing contract
2. Foreseen but inevitable (impossible to avoid)
2. Civil negligence (culpa aquiliana)
o Source of oblgn
o Aka quasi-delict/tort Fortuitous event VS Force Majeure
o No pre-existing contract
3. Criminal negligence (culpa criminal) 1. Acts of man -independent of the will of the debtor
o Negligence resulting in commission of but not of human wills
crime 2. Acts of God -Majeure, totally independent will of
human beings
*aggrieved party may choose bet. criminal/civil action for
damages but not recover twice from the same negligent act Kinds of fortuitous events
*if creditor is also guilty of negligence, he cannot recover
damages unless his negligence is only CONTRIBUTORY 1. Ordinary f.e. -common, can be foreseen
2. Extra-ordinary f.e. -uncommon, could not have
Art. 1173 been reasonable foreseen
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
Requisites of a f.e. When presumption in art. 1176 does not apply

1. Event must be independent of the human will, at 1. With reservations as the interest
least of the debtor's will 2. Receipt w/o indication of particular installment
2. Event could not be foreseen, if foreseen, inevitable 3. Receipt for a part of principal
3. Normal manner of fulfillment of the debtor's oblgn 4. Payment of taxes
should be impossible 5. Non-payment proven
4. Debtor must be free from any participation in the
injury of the creditor --no concurrent negligence Art. 1177
on the debtor's part The creditors, after having pursued the property in
possession of the debtor to satisfy their claims, may
ABSENCE OF ANY WOULD PREVENT THE DEBTOR exercise all the rights and bring all the actions of the latter
FROM BEING EXEMPT FROM LIABILITY for the same purpose, save those which are inherent in his
person; they may also impugn the acts which the debtor
Exceptions to gen. rule (no one shall be liable for f.e.) may have done to defraud them.

1. When expressly specified by law Remedies available to creditors for the satisfaction of their
o Debtor guilty of fraud, negligence, delay, claims in case debtor does not comply w/ his oblgn
or contravention of the tenor of oblgn
o Debtor promised to deliver the same 1. Exact fulfillment + damages
specific thing to 2/more persons who do 2. Pursue the leviable property of the debtor ( not
not have the same interest except from attachments under the law)
o Oblgn to deliver a specific thing arises 3. After remedy 2, exercise all the rights (right to
from a crime redeem) and bring all actions of the debtor (right to
o Thing to be delivered is generic collect form the debtor of he debtor) except those
2. When declared by stipulation inherent in or personal to the person of the latter
3. When nature of oblgn requires assumption of risk 4. Ask court to rescind acts/contracts w/c the debtor
(eg. Insurance conpanies) may have done to defraud him when he cannot
recover his claim
Art. 1175
Usurious transactions shall be governed by special laws. Debtor is liable w/ ALL his property, present and
future, for the fulfillment of his oblgn
Usury -receiving interest in excess of the amount allowed
by law for the loan/use of money Art. 1178
Usury law -legally non existent but creditor still has no Subject to the laws, all rights acquired in virtue of an
absolute right to charge interest that is obligation are transmissible, if there has been no
iniquitous/unconscionable stipulation to the contrary.

Requisites for recovery of interest Transmissibility of rights (exceptions)

1. Payment of interest must be expressly stipulated 1. Prohibited by law

2. Agreement should be in writing o Contract of partnership -contribute money,
3. Interest must be lawful property, industry to a common fun w/ the
intention of dividend profits w/
Art. 1176 themselves
The receipt of the principal by the creditor without o Contract of agency -render service/do
reservation with respect to the interest, shall give rise to the something in representation of the other,
presumption that said interest has been paid. with the consent of the others
The receipt of a later installment of a debt without o Contract of commodatum (gratuitous) -
reservation as to prior installments, shall likewise raise the delivering something not consumable so it
presumption that such installments have been paid. may be used but returned after a certain
time
Presumption -interference of a fact not actually know 2. Prohibited by stipulation of the parties
arising from its usual connection w/ another which is
known/proved

1. Conclusive presumption
2. Disputable/rebuttable presumption