Nature and Effects of Obligations

Civil Code Art. 1163-1178

BOOK IV
Obligations and Contracts
TITLE I
Obligations
CHAPTER 2
Nature and Effects of Obligations

Nature and Effects of Obligations Part 1 (VIDEO DISCUSSION)

Nature and Effects of Obligations Part 2 (VIDEO DISCUSSION)


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DISCUSSIONS

1. Types of Obligations according to its Prestation

  1. Real Obligations
  2. Personal Obligations

2. Examples

  1. Real Obligation (specific thing) a. Nick bound himself to deliver to you his only dog tomorrow
    b. Jonathan obliged himself to give you as a Christmas give his car with plate number ABC 123.
  2. Real Obligation (generic thing) a. Gary bound himself to give Ricardo P10,000 tomorrow.
    b. Blake obliged himself to deliver a pig on John’s birthday.
  3. Positive Personal Obligation (to do) a. Iruma bound himself to fix Jojo’s car the following day.
    b. Dio obliged himself to wash Jotaro’s uniform before school starts.
  4. Negative Personal Obligation (not to do)
    a. Kars and Wamuu agreed not to build any structure on the boundaries of their properties.

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3. Obligations of the Debtor and Rights and Remedies of Creditors

3.1. Obligations of the Debtor

3.1.1. Obligations in obligation to deliver a specific thing:
  1. To deliver the thing.
  2. To take care of the thing before delivery (Art. 1163).
  3. To deliver the fruits of the thing (Art. 1164).
  4. To deliver accessions and accessories although they were not mentioned (Art. 1166).
  5. To pay damages if guilty of fraud, negligence, delay, or contravention of the terms of the obligation. (Art. 1170).
3.1.2. Obligations in obligation to deliver a generic thing:
  1. To deliver the thing.
  2. To bear the expenses of having someone else comply with the obligation (Art. 1165 par. 2)
  3. To pay damages if guilty of fraud, negligence, delay, or contravention of the terms of the obligation. (Art. 1170).
3.1.3. Obligations in obligation to do:
  1. To do the obligation
  2. To bear the expenses of having someone else comply with the obligation (Art. 1167 par. 1)
  3. To undo what has been poorly done (Art. 1167 par. 2)
  4. To bear the expenses of having some else undo what has been poorly done (Art. 1167 par. 2)
  5. To pay damages if guilty of fraud, negligence, delay, or contravention of the terms of the obligation. (Art. 1170).
3.1.4. Obligations in obligation not to do:
  1. Not to do what has been forbidden
  2. To undo what has been done that is forbidden (Art. 1168)
  3. To bear the expenses of having some else undo what has been done that is forbidden (Art. 1168)
  4. To pay damages if guilty of fraud, negligence, delay, or contravention of the terms of the obligation. (Art. 1170).

3.2. Rights and Remedies of the Creditor

3.2.1. Types of Rights
  1. Personal – Right acquired from the time the obligation to deliver arises and is enforceable against a definite passive subject.
  2. Real – Right acquired from delivery and is enforceable against anyone.
3.2.2. Principal Rights/Remedies
  1. Ask Specific Performance
  2. Ask Performance
  3. Ask Substituted Performance
  4. Ask Damages
  5. Rescission
  6. Attachment and Execution of Debtor’s Properties

3.2.3. Subsidiary Rights/Remedies

  1. Accion Subrogatoria – exercise all the rights of the debtor.
  2. Accion Pauliana – To impugn contracts that were entered to defraud the creditor

4. Different types of Breaches in Obligations

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. (Art. 1170)

4.1. Fraud

  1. Causal Fraud (dolo causante) – Fraud in obtaining consent.
  2. Incidental Fraud (dolo incidente) – Fraud in the performance of the obligation
Fraud Vs. Negligence Comparison Table
When is negligence equivalent to fraud?

When there is gross negligence. Gross negligence is defined as carelessness which is in reckless disregard for the safety or lives of others, and is so great it appears to be a conscious violation of other people’s rights to safety. It is more than simple inadvertence, but it is just shy of being intentionally evil. (Source: Law.com)

4.2. Negligence

  1. Culpa aquiliana (quasi-delict)
  2. Culpa contractual (contract)
  3. Culpa criminal (delict)

Example

Yami is the driver of a carefully driven bus owned by the Black Bulls Incorporated. While traversing a highway, Yami didn’t notice Asta (a pedestrian) while crossing a pedestrian lane. Since the bus’s speed is not fast, Asta suffered serious but not fatal injuries. Yuno, a passenger of the bus likewise suffered serious but not fatal injuries.

What action can Asta and Yuno take against Yami and/or Black Bulls Incorporated?

Different Kinds of Negligence Summary Table

4.3. Delay

  1. Mora solvendi – delay of debtor
  2. Mora accipiendi – delay of creditor
  3. Compensatio Morae – delay of both creditor and debtor (no delay)
Rules of delay in obligations table

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5. Fortuitous Event (Caso fortuito)

5.1. Requisites

  1. the cause of the breach is independent of the debtor’s will
  2. the event is unforeseeable or unavoidable
  3. the event is such as to render it impossible for the debtor to fulfill his obligation in a normal manner
  4. the debtor did not take part in causing the injury to the creditor

5.2. General Rule

No one is liable for fortuitous event

5.3. Exceptions to General Rule

  1. Law or stipulation expressly so declare
  2. Nature of the obligation requires the assumption of risk
  3. Obligation is other than an obligation to give a specific thing
  4. Debtor is already in delay

6. Damages

  1. Actual or Compensatory (e.g. copyright infringement Art. 2199)
  2. Moral (e.g. physical suffering, fright, serious anxiety, etc. Art. 2217)
  3. Nominate (to vindicate or recognize a right Art. 2221)
  4. Temperate or Moderate (pecuniary loss cannot be proved with certainty Art. 2224)
  5. Exemplary or Corrective (imposed to set an example for the public good Art. 2229)
  6. Liquidated (damages agreed upon by parties to a contract Art. 2226)

7. Presumptions

  1. Conclusive Presumptions cannot be rebutted by additional evidence or argument (Source: Rules of Court Rule 131 Sec 2)
  2. Disputable Presumptions can be rebutted by additional evidence or argument (Source: Rules of Court Rule 131 Sec 3)

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CODAL PROVISIONS

FULL CODAL PROVISIONS

ARTICLE 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. (1094a)

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. (1095)

ARTICLE 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)

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. (1097a)

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. (1098)

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. (1099a)

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. (1100a)

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. (1101)

ARTICLE 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void. (1102a)

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. (1103)

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. (1104a)

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. (1105a)

ARTICLE 1175. Usurious transactions shall be governed by special laws. (n)

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. (1110a)

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. (1111)

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. (1112)

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