Chapter 2

NATURE AND EFFECT OF OBLIGATIONS

Art.1156. An obligation is a juridical
necessity to give, to do or not to do. (n)
OBLIGATION TO GIVE
Classification of kinds of things

1. Generic/ Indeterminate

2. Specific/Determinate
Generic thing/indeterminate

 - A thing is generic or indeterminate when it refers only to a class

or genus to which it pertains and cannot be pointed out with
particularity.
 Ex. A realme cellphone
Specific/Determinate

- A thing is said to be specific or determinate when it is

particularly designated or physically segregated from
others of the same class.
 Ex. Rigel’s only iphone 8
 My realme xt cellphone which I bought from Mall of asia
On January 20,2020 with specs ___
DUTIES OF THE DEBTOR
IN AN OBLIGATION TO
GIVE
What are the duties of the debtor in an
obligation to deliver a generic thing?
duties of the debtor in an obligation to deliver
a generic thing
 Art. 1246. When the obligation consists in the delivery of an indeterminate or generic thing, whose
quality and circumstances have not been stated, the creditor cannot demand a thing of superior
quality. Neither can the debtor deliver a thing of inferior quality. The purpose of the obligation and
other circumstances shall be taken into consideration. (1167a)

 Art. 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. (1101
duties of the debtor in an obligation to deliver
a generic thing

 1. to deliver a thing which is of the quality intended by the parties

taking into consideration the purpose of the obligation and other circumstances

2. To be liable for damages in case of fraud, negligence or delay in the performance of his
obligation
Duties of the debtor in an
obligation to give a
specific/determinate thing
Duties of the debtor in an obligation to give a determinate thing

1. Preserve the thing

 QUESTION:
In an obligation to give, what is the
standard of care required for the obligor to
observe towards the determinate thing to be
given to the obligee, without any agreement
from the parties?
Art. 1163. 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
Good Father of a Family (pater familias)

 The only standard of conduct used in the Philippines

(Art. 1173 NCC)
• A reasonable man is deemed to have knowledge of
the facts that a man should be expected to know
based on ordinary human experience.
The diligence required necessarily
depends upon the nature of the obligation
and corresponds with the circumstances
of the person, of the time and of the
place.
Duties of the debtor in an obligation to give a determinate thing

1. Preserve the thing

Diligence required:
a. Diligence of a good father of a family (no agreement)
– ordinary diligence
b. Another standard of care
- if required by law or stipulated by the parties
-extraordinary diligence
(example: Contract of Carriage/Public Transportation)
Duties of the debtor in an obligation to give a
determinate thing

 2. Deliver the fruits of the thing

Question:

Does the creditor has a right to the

fruits of the thing to be delivered?
Since when?
Answer:

 Art. 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.
What are the different kinds of fruits
mentioned by the law?
the different kinds of fruits mentioned by law

1. Natural fruits – are the spontaneous products of the soil and the young and other
products of animals
2. Industrial fruits – those produced by lands of any kind through cultivation or labor
3. Civil fruits – are those derived by virtue of a juridical relation.
Art. 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.
obligation to deliver it arises

- Generally, upon the perfection or birth of the

contract.
 On January 20, S sold his golden retriever dog named Jollibee
to B for Ph25,000 without stating the specific delivery date. B
paid the amount on January 25, 2022. tHE
On January 26, the dog gave birth to new puppies. The dogs are
in possession of Apple who refuse to give them to B.
Who is entitled to the ownership of the puppies?
Art. 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.
Personal right vs. real
right
 Personal right vs. real right

 Personal right - the right or power of a person to demand from

another as a definite passive subject, the fulfillment of the latter’s
obligation to give, to do or not to do

Real right – is the right or interest of a person over a specific thing

without a definite passive subject against whom the right may be
personally enforced.
Personal right vs. real right

 Personal right – enforceable only against a

particular person

 Real right – enforceable against the whole world.

The creditor becomes the owner of
the specific thing and its fruits upon
its delivery.
Duties of the debtor in an obligation to give a
determinate thing

 1. Preserve the thing

 2. Deliver the fruits of the thing
 3. Deliver the thing itself
Art. 1165. When what is to be delivered is a determinate 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.
(1096)
 REMEDIES OF CREDITOR IN REAL OBLIGATIONS
 In a specific real obligation (to deliver a determinate thing), the
creditor may exercise the following remedies or rights in case the
debtor fails to comply with his obligation:
a. Specific performance + damages (applicable only on obligations to give)

b. Rescission or Cancellation + damages

c. Payment of damages only
Why specific performance is applicable only
to obligations to give

 Specific performance is not applicable on

obligations to do because it will take form as an
involuntary servitude. (it will be a form of
slavery)
Damage VS. DAMAGES
 DAMAGE – the injury or loss which is occasioned by reason of fault of another in the
property or person

 DAMAGES – the compensation or satisfaction for an injury sustained, or as otherwise

expressed, the pecuniary consequences which the law imposes for the breach of some duty
or the violation of some rights
 problem
S sells his specific painting to
B for Ph50,000. B paid the
price and demanded for the
delivery of the painting. S
refused to deliver.
 What are the remedies of B?
 problem
S entered into a contract with
B for S to paint a nature
painting for Ph50,000. B paid
the price but S refused to
paint.
 Can B demand for specific
performance?
Art. 1165. When what is to be delivered is a determinate 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.
(1096)
Generic real obligation
- Can be performed by a third person since the object is expressed
only according to its family or genus. It is thus not necessary for the
creditor to compel the debtor to make the delivery, although he may
ask for performance of the obligation.

 Substitute performance – performed by a 3rd person

pROBLEM
S obliges himself to deliver to B 100
sacks of rice on January 28 for
Ph100,000. If S does not comply with
the obligation, what is/are the
remedies of B?

ANSWER: Substitute performance. B

buys from X, another person same
100 sacks of rice but for Ph120,000.
Art. 1165. When what is to be delivered is a determinate 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.
(1096)
 FORTUITOUS EVENT - no person shall be responsible for those events which cannot be
foreseen, or which through foreseen were inevitable
For example: Natural calamities / Acts of God
 Generally, a person obliged to deliver a thing is not liable for damages when the thing
perishes by reason of fortuitous event. Except: when there is delay.

 This is applicable only to specific/determinate thing not to Generic things.

Genus never perishes.
Duties of the debtor in an obligation to give a
determinate thing

 1. Preserve the thing

 2. Deliver the fruits of the thing
 3. Deliver the thing itself
 4. Deliver the accessions and accessories
 5. Answer for damages in case of non-fulfillment or
breach
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.
Differentiate Accessions
from Accessories.
Accessions

- Are the fruits of a thing or additions to

or improvements upon a thing (the
principal).
ACCESSORIES

- are things joined to or included with the

principal thing for the latter’s embellishment,
better use or completion.
ACCESSORY/ACCESSION
FOLLOWS THE PRINCIPAL
Duties of the debtor in an obligation to give a
determinate thing

 1. Preserve the thing

 2. Deliver the fruits of the thing
 3. Deliver the thing itself
 4. Deliver the accessions and accessories
 5. Answer for damages in case of non-fulfillment or
breach (1170)
Art. 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. (1101)
Obligation to do
SITUATIONS in violation to an obligation to do

 1. Debtor fails to perform

 2.Debtor performs but contrary to the terms of the
agreement
 3. Debtor performs it in a poor manner
Remedies of the creditor
1. Substitute performance – have somebody else perform
the obligation at the debtor’s cost, including the costs of
having to undo that which was poorly done. + DAMAGES
2. DAMAGES
Specific Performance: is not applicable since
this would be violative of the debtor’s
constitutional right against involuntary
servitude.
OBLIGATION NOT TO DO
Art. 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
problem
D bound himself to deliver to C a 21 inch TV set, and the 13 cubic feet White Westinghouse refrigerator,
with Motor No. WERT-385, which C saw in D’s store, and to repair C’s piano.
D did none of these things.
May the court compel D to deliver the TV set and the refrigerator and repair the piano? Why? If not, what
relief may the court grant C? Why?
problem
D bound himself to deliver to C a 21 inch TV set, and the 13 cubic feet White Westinghouse refrigerator,
with Motor No. WERT-385, which C saw in D’s store, and to repair C’s piano.
A did none of these 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?

TV – GENERIC. Remedy: Substitute performance. Specific performance is not a remedy.

Ref – SPECIFIC. Remedy: Specific Performance. Substitute performance is not a remedy.
Piano repair - Piano – the court can never compel anyone to do anything against his will as this would be
violative of his right against involuntary servitude. The relief the court can give is that the debtor should’ve
asked somebody else do the obligation at the cost of the debtor plus damages. – substitute performance.
 REMEDIES OF CREDITOR IN REAL OBLIGATIONS
 In a specific real obligation (to deliver a determinate thing), the
creditor may exercise the following remedies or rights in case the
debtor fails to comply with his obligation:
a. Specific performance + damages (applicable only on obligations to give)

b. Rescission or Cancellation + damages

c. Payment of damages only
Generic real obligation
- Can be performed by a third person since the object is expressed
only according to its family or genus. It is thus not necessary for the
creditor to compel the debtor to make the delivery, although he may
ask for performance of the obligation.
GROUNDSFOR LIABILITY OF
DAMAGES/BREACH OF OBLIGATIONS

DAMAGE – INJURY
DAMAGES – COMPENSATION MONEY FOR
THE INJURYT
Art. 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. (1101)
BREACH OF OBLIGATIONS

 1. Delay
 2. Fraud
 3. Negligence
 4. Contravention of the tenor of the obligation
 5. Fortuitous Event
When does delay
occur?
 Art. 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 (time is of the essence)
 (3) When demand would be useless, as when the obligor has rendered it beyond his power to perform
 4. 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. (1100a)
NO DEMAND,
NO DELAY
Delay/mora

Is the failure to perform an obligation on

time which failure constitutes a breach of the
obligations
 IF YOU WANT TO HAVE SOMETHING YOU’VE NEVER HAD,
YOU HAVE TO DO SOMETHING YOU’VE NEVER DONE.

SOCRATIC METHOD
What are the kinds of delay?
KINDS OF DELAY
1. Mora Solvendi
2. Mora Accipiendi
3. Compensatio Morae
Kinds of delay
 1. Mora Solvendi – delay on the part of debtor to fulfill
his obligation
 2.Mora Accipiendi – delay on the part of the creditor to
accept the performance of the obligation
 3. Compensatio Morae – delay on both debtor and
creditor
3 Requisites for mora solvendi

 1. Failure to perform on the date agreed upon

 2. Demand by the creditor
 3. Failure of debtor to comply with the demand
Effects of mora solvendi

 1. DR is guilty of breach
 2. DR is liable for interest/damages
 3. DR is liable even for fortuitous events
Effects of mora accipiendi
 1. CR is guilty of breach
 2. CR is liable for damages
 3. CR bears the loss of the thing
 4. When obligation is for payment of sum of money, DR is relieved from paying interest
 5. DR may make a consignation
EFFECTS OF COMPENSATIO MORAE

 - Considered as No default
 When demand is not necessary to put dr in
delay

 (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; (Time is of the essence)
 (3) When demand would be useless, as when the obligor has rendered it beyond his power to
perform.
 (4) Performance of a party in a Reciprocal Obligation
Art. 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. (1101)
WHAT IS FRAUD?
 FRAUD (Deceit or Dolo)
 It is the deliberate or intentional evasion
of the normal fulfillment of an obligation
 As a ground for damages, it implies some
kind of malice or dishonesty and it cannot
cover cases of mistake and errors of
judgment made in good faith
 Synonymous to BAD FAITH as it
involves a design to mislead or deceive
another.
2 kinds of fraud

1. Dolo Causante (Causal Fraud)

2. Dolo Incidente (Incidental Fraud)
 Dolo causante

 Dolo causante – or fraud in obtaining consent. Under this kind of

fraud, the party would not have entered into the contract were if
not for the fraud; annulment is the remedy of the party who’s
consent was obtained through fraud;

 -applicable only to contracts where consent is necessary and thus

affects the validity of the contract, making it voidable.
Dolo Incidente (Incedental fraud)

 Dolo incidente – Under this kind, a party would have entered the
obligation with or without the fraud. Remedy is damages.

 -fraud in the performance of the obligation and applicable to

obligations arising from any source. This kind, however, does not
affect the validity of the contract and makes the party guilty of
fraud liable for damages.
Fraud VS. NEGLIGENCE

 1.In fraud, there is deliberate intention to cause damage or injury,

while in Negligence, there is no such intention.
 2. Waiver of the liability for future fraud is void, while such waiver
may in certain cases be allowed in negligence.
 3. Fraud must be clearly proved, while negligence is presumed
from the violation of contractual obligations.
 4.Liability for fraud cannot be mitigated by courts, while liability
for negligence may be reduced.
Art. 1171. Responsibility arising from fraud
is demandable in all obligations. Any waiver
of an action for future fraud is void
Waiver/quitclaim- abandonment of right to
claim for damages
Void- inexistent, not valid
NEGLIGENCE
NEGLIGENCE

 Fault or negligence is the failure to observe for the

protection of the interests of another person, the degree
of care, precaution and vigilance which the
circumstances justly demand, whereby such other person
suffers injury.
NEGLIGENCE •

 The omission of that degree of diligence which is required by the

nature of the obligation and corresponding to the circumstances of
the persons, time and place. (Art. 1173, NCC)
How will you know if a
person committed
negligence?
 TEST OF NEGLIGENCE •

 Did the defendant in doing the alleged negligent act use the reasonable
care and caution which an ordinary prudent person would have used in
the same situation? • If not, then he is guilty of negligence • Could a
prudent man, in the case under consideration, foresee harm as a result of
the course pursued? • If so, it as the duty of the actor to take precautions
to guard against harm
 CIRCUMSTANCES TO CONSIDER
• Time
• Place
 • Personal circumstances of the Acto
 Art. 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
Art. 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.

 Ifthe 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. (
 Art. 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
FORTUITOUS EVENT - no person shall be
responsible for those events which cannot be
foreseen, or which though foreseen were
inevitable
 REQUISITES

 :a. The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the human will;.
 b. It must be impossible to foresee the event which constitutes caso fortuito or if it can be
foreseen it must be impossible to avoid
 c. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation
in a normal manner
 d. The obligor must be free from any participation in the aggravation of the injury resulting to
the creditor.
 GENERAL RULE: Fortuitous Event is a complete defense and a person is not liable if the
cause of the damage is a fortuitous event. •
 EXCEPTION: It is merely a partial defense and the courts may mitigate the damages if the
loss would have resulted in any event [Art. 2215(4) NCC] • NOTE: A person may still be
liable for a fortuitous event if such person made an ASSUMPTION OF RISK.
Exceptions

 1. When expressly specified by law

 2. When declared by a stipulation
 3. When the nature of the obligation requires assumption
of risk
 Art. 1175. Usurious transactions shall be governed by special laws.
 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. (1110a)
2 TYPES OF PRESUMPTIONS

1.Conclusive presumptions
2. Disputable presumptions
 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. (1111
Transmissibility of rights

 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.