1. 1. Chapter 2: Nature and Effect of Obligations 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. 1.
Specific/determinate thing -particularly designated/physically segregated others of the same
class o Identified by its INDIVIDUALITY o Cannot be substituted w/o the consent of the
creditor 2. Generic/indeterminate thing -thing refers to a class/genus to which it pertains and
can be pointed out with particularity o Identified by its SPECIE o Can be substituted as long
as it is of the same kind Duties of debtor in oblgn to give a determinate thing 1. Preserve the
thing; 1. degree of care: o By stipulation of the parties o What the law provides o Diligence of
a good father of a family (ordinary care)  Factors to be considered  Nature of oblgn 
General rule: if the thing is lost due to f.e. (force majeure) debtor is not liable o Reason for
debtor's oblgn  The thing to be delivered should be in the same condition as it was when
the oblgn was made  So that the debtor may not be negligent of his accessory duty to take
care of the thing Deliver the fruits of the thing Deliver the accessions an accessories Deliver
the thing itself Answer for damages in case of non- fulfillment/breach Duties of debtor in
oblgn 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 oblgn... 2. To be liable for damages in
case of fraud, negligence, or delay, in the performance of his oblgn, or contravention
(violation) of the tenor thereof 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. Different kinds of fruits 1. Natural fruits 2. Industrial
fruits -through cultivation and labor 3. Civil fruits -by virtue of juridical relation eg. Rents,
leases, any form of income Right of creditor to the fruits -protects the creditor in case the
debtor commits delay/fraud When oblgn to deliver fruits arises -upon perfection/birth of the
contract (eg. Contract of sale) -if suspensive conditional oblgn, upon fulfillment of condition -if
oblgn w/ a period, upon arrival of the term -in contract of sale, "all the fruits shall pertain to
the vender from the day on which the contract was perfected If the fruit has arisen before the
contract was made, the vendor does not have to render the fruits and interests of the thing
since they are deemed to have been MUTUALLY COMPENSATED 1. Personal right -right of
the creditor to demand from the debtor the fulfillment of an oblgn 2. Real right -right of a
person over a specific thing (ownership, possession, mortgage) against who, the right may
be personally enforced Personal Right Real Right Subjects definite passive subj, definite
active subj definite active subj Binding binding/enforceable against a particular person
directed against the whole world Ownership is acquired through DELIVERY/tradition Creditor
does not become the owner until the specific thing has been deliverd to him Personal right is
acquired once the oblgn is demandable Real right/ownership is acquired once the thing of
oblgn has been delivered If the thing was delivered to a third person who acted in good faith
before the oblgn has become demandable, the third person is ENTITLED to the thing
AGAINST the first creditor. Debtor will be liable for damages to the first creditor.
2. 2. 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. ALTERNATIVE (not cumulative) remedies
of creditor in real oblgn in case debtor fails to fulfill his oblgn Specific real oblgn 1. Specific
performance/fulfillment of oblgn (if still possible) + damages o Rescission -returning what
each parties have receive 2. Rescision/cancellation of oblgn + damages 3. Payment of
damages only (if it's the only feasible remedy) Generic real oblgn 1. Can be performed by a
third person *no person shall be imprisoned for non-payment of debt only for non-payment of
civil liability adjudged in a criminal case -Constitution Par. 3 -exceptions to gen. rule
regarding f.e. (involving delivery of a determinate thing) 1. Delay 2. When debtor promised
delivery to separate creditors Generic thing cannot be a subject of f.e. bec. GENUS NEVER
 PERISHES (genus nuquamperit) 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. -->bec. they must go together w/ the principal thing; accessory follows the
principal Accessions -fruits of a thing/additions to/improvements upon the principal thing
Accessories -things joined to/included w/ the principal thing for the latter's embellishment,
better use, or completion Art. 1167 -oblgn TO DO 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. 1. Failure of debtor to perform his oblgn 2. Debtor's
performance of the oblgn contrary to the terms 3. Debtor performed the oblgn but in poor
manner Remedies of creditor in positive personal oblgn 1. Failure to comply o Perform the
oblgn himself or by another, unless personal considerations are involved, at the debtor's
expense o Recover damages 2. Contravention/violation of terms or oblgn poorly done o
Order by the court to undo what has been done if it is still possible o Specific performance
cannot be ordered in a personal oblgn TO DO -involuntary servitude Performance by third
person is allowed (like in oblgn to deliver a generic thing) but he cannot be compelled too If
the personal qualifications of the debtor are the determining motive for the oblgn, remedy is
indemnification for damages (if oblgn is not performed) --> only when the oblgn cannot
anymore be performed at the expense of the debtor Art. 1168 -oblgn NOT TO DO When the
obligation consists in not doing, and the obligor does what has been forbidden him, it shall
also be undone at his expense. *debtor cannot be guilty of delay since duty is abstaining
from act Remedies of creditor in negative personal oblgn 1. Undoing the forbidden thing +
damages 2. If first remedy is impossible, damages 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
3. 3. 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. 1. Ordinary delay -failure to perform
an oblgn on time; before demand is made 2. Legal delay/default/mora-failure to perform an
oblgn on time w/c failure constitutes a breach of oblgn; after demand has been made Kinds
of delay 1. Mora solvendi -debtor to fulfill 2. Mora accipiendi -creditor to accept 3.
Compensatiomorae -delay of debtors in reciprocal oblgns (eg. contract of sale); delay of the
debtor cancels the delay of the creditor, & vice versa Requisites if delay by the debtor
(morasolvendi) *assuming the oblgn is already due/demandable 1. Failure of the debtor to
perform his oblgn on the date agreed upon 2. Demand made by the creditor (judicial/extra-
judicial) 3. Failure of debtor to comply with such demand Effects of delay 1. Mora solvendi,
debtor: o Guilty of breach of oblgn o Liable to creditor for interest (in oblgns to pay
money)/damages  Interest commences form the time of the filing of the complaint o Liable
even for f.e. when oblgn is to deliver a determinate thing o In oblgn to deliver a generic thing,
delivery of the thing of the same kind + damages 2. Mora accipiendi, creditor: o Guilty of
breach of oblgn o Liable for damages suffered by debtor, if any o Bears the risk of the loss of
the thing due o Debtor not liable for interest from the time of the creditor's delay (in oblgn to
pay money) o Debtor may release himself from the oblgn by the consignation/deposit of the
thing/sum due 3. Compensation morae o *delay of debtor cancels delay of the creditor & vice
versa o No delay on both parties *if delay of one party is followed by that of the other, liability
of the first infractor shall be equitably tempered by courts *if first infractor CND, contract -
extinguished + parties will bear their respective damages When demand is NOT necessary
to put debtor in delay *Gen rule -delay begins from the moment a demand is made 1. When
 the oblgn provides 2. When the law provides 3. When time is of the essence 4. When
demand would be useless 5. Where there is performance by a party in reciprocal oblgns o
Reciprocal oblgns: performance of one is conditioned upon the simultaneous fulfillment of
the part of the other o Neither party is in delay if the other does not comply with what is
incumbent upon him -compensation morae *when no date is specified, oblgn is understood
SIMULTANEOUS 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. Grounds for liability 1. Fraud/deceit/dolo o Deliberate/intentional evasion
of the normal fulfillment of an oblgn o With malice/dishonesty/bad faith to mislead/deceive
another  *Incidental fraud (doloincidente) -committed in the performance of an oblgn
already existing bec. of contract  Casual fraud (dolocausante) - employed in the execution
of a contract which impairs consent; fraud made to make the creditor enter the contract 2.
Negligence/fault/culpa o Voluntary act/omission o No bad faith/malice w/c prevents the
normal fulfillment of an oblgn 3. Delay/mora
4. 4. 4. Contravention of the terms of oblgn o Violation of terms and conditions of oblgn o Must
not be due to f.e./force majeure Art. 1171 Responsibility arising from fraud is demandable in
all obligations. Any waiver of an action for future fraud is void. Court is not given the power to
mitigate/reduce damages to be awarded due to fraud Fraud may be past/future Waiver of an
action for future fraud: VOID Waiver of an action for past fraud: VALID (act of
generosity/magnanimity, act of forgiveness) 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. Debtor may be liable for damages
resulting from negligence Validity of waiver arising from negligence 1. Action for future
negligence VOID, except in oblgns whose nature requires extraordinary diligence 2.
Negligence with bad faith = fraud, thus waiver for this kind of negligence is also VOID Kinds
of negligence accdg to source of oblgn 1. Contractual negligence (culpa contractual) o
Negligence in contracts resulting in breach o Not a source of oblgn o Debtor liable for
damages due to pre- existing contract 2. Civil negligence (culpa aquiliana) o Source of oblgn
o Aka quasi-delict/tort o No pre-existing contract 3. Criminal negligence (culpa criminal) o
Negligence resulting in commission of crime *aggrieved party may choose bet. criminal/civil
action for damages but not recover twice from the same negligent act *if creditor is also guilty
of negligence, he cannot recover damages unless his negligence is only CONTRIBUTORY
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. 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. Fault/negligence -failure to observe for the protection of the
interests of another person, that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury Factors to be
considered 1. Nature of oblgn 2. Circumstances of the person 3. Circumstances of the time
4. Circumstances of the place Measure of liability for damages If in good faith: only the
natural and probable consequences of the breach of oblgn If in bad faith: damages will be
reasonably attributed to the non-performance of oblgn Degree of diligence 1. By stipulation
2. By law 3. Dligence of a good father of a family 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 1.
Cannot be foreseen (impossible to foresee) 2. Foreseen but inevitable (impossible to avoid)
Fortuitous event VS Force Majeure 1. Acts of man -independent of the will of the debtor but
not of human wills 2. Acts of God -Majeure, totally independent will of human beings Kinds of
fortuitous events 1. Ordinary f.e. -common, can be foreseen 2. Extra-ordinary f.e. -
uncommon, could not have been reasonable foreseen
5. 5. Requisites of a f.e. 1. Event must be independent of the human will, at least of the debtor's
will 2. Event could not be foreseen, if foreseen, inevitable 3. Normal manner of fulfillment of
the debtor's oblgn should be impossible 4. Debtor must be free from any participation in the
injury of the creditor --no concurrent negligence on the debtor's part ABSENCE OF ANY
WOULD PREVENT THE DEBTOR FROM BEING EXEMPT FROM LIABILITY Exceptions to
gen. rule (no one shall be liable for f.e.) 1. When expressly specified by law o Debtor guilty of
fraud, negligence, delay, or contravention of the tenor of oblgn o Debtor promised to deliver
the same specific thing to 2/more persons who do not have the same interest o Oblgn to
deliver a specific thing arises from a crime o Thing to be delivered is generic 2. When
declared by stipulation 3. When nature of oblgn requires assumption of risk (eg. Insurance
conpanies) Art. 1175 Usurious transactions shall be governed by special laws. Usury -
receiving interest in excess of the amount allowed by law for the loan/use of money Usury
law -legally non existent but creditor still has no absolute right to charge interest that is
iniquitous/unconscionable Requisites for recovery of interest 1. Payment of interest must be
expressly stipulated 2. Agreement should be in writing 3. Interest must be lawful 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. Presumption -interference of a fact not
actually know arising from its usual connection w/ another which is known/proved 1.
Conclusive presumption 2. Disputable/rebuttable presumption When presumption in art.
1176 does not apply 1. With reservations as the interest 2. Receipt w/o indication of
particular installment 3. Receipt for a part of principal 4. Payment of taxes 5. Non-payment
proven 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. Remedies available to creditors for the
satisfaction of their claims in case debtor does not comply w/ his oblgn 1. Exact fulfillment +
damages 2. Pursue the leviable property of the debtor ( not except from attachments under
the law) 3. After remedy 2, exercise all the rights (right to redeem) and bring all actions of the
debtor (right to collect form the debtor of he debtor) except those inherent in or personal to
the person of the latter 4. Ask court to rescind acts/contracts w/c the debtor may have done
to defraud him when he cannot recover his claim Debtor is liable w/ ALL his property, present
and future, for the fulfillment of his oblgn 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.
Transmissibility of rights (exceptions) 1. Prohibited by law o Contract of partnership -
contribute money, property, industry to a common fun w/ the intention of dividend profits w/
themselves o Contract of agency -render service/do something in representation of the other,
with the consent of the others o Contract of commodatum (gratuitous) - delivering something
not consumable so it may be used but returned after a certain time 2. Prohibited by
stipulation of the parties