Nature and Effect of Obligation

I. OBLIGATION TO GIVE (Real Obligation)

1) to give a specific or determinate thing
2) to give a generic or indeterminate thing

Specific or Determinate Thing – A thing is determinate when it is particularly designated and/or physically
segregated from all others of the same class (Art. 1460)
Ex. – this car, the car owned by A on June 27, 2019, the car with plate number 2019
- the requisite that a thing be determinate is satisfied if at the time the contract is entered into
the thing is capable of being made determinate without the necessity of a new or further agreement
between the parties (Art. 1460, par. 2)

Generic or Indeterminate Thing – A thing is generic or indeterminate in the sense that it is designated merely by
its class or genus without any particular designation or physical segregation from all others of the same class. ( The
loss or destruction of anything of the same kind even without the debtor’s fault and before he has incurred in
delay will not have the effect of extinguishing an obligation.)
Ex. – a car, a Ford Ranger Wildtrak, a 1990 El Camino, a kilo of sugar, the sum of P5,000

A. Obligations of a Debtor Obliged to give a Determinate or Specific Thing

Art. 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver
arises. However, he shall acquire no real right over it until the same has been delivered to him.
1. Deliver the Fruits of the thing (Art. 1164)
*Kinds of Fruits:
a. Natural – spontaneous products of the soil, the young and other products of animals
produced without intervention or human labor.
b. Industrial – those produced by lands of any kind through cultivation brought by
intervention of human labor; and
c. Civil – those derived by virtue of juridical relation (Art. 442)

*When obligation to deliver arises:

a. Generally, the obligation to deliver arises from the time of the perfection of the
contract. Contracts are perfected by mere consent, and from that
moment the parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which, according
to their nature, may be in keeping with good faith, usage and law. ( Art. 1315)

b. If the obligation is subject to a suspensive condition or period, it arises upon

fulfilment of the condition or arrival of the period. (Art. 1179, 1189,
1193)

c. If obligation is based on law, quasi-delict, quasi-contract or crime, the specific

provisions of applicable law shall determine when the delivery shall be
effected.

As a consequence of certain contracts, it is not agreement but tradition or delivery that transfers
ownership.
*Delivery – is an act by which one party parts with the title to and the possession of the property, and the
other acquires the right to and possession of the same.
Kinds of Delivery – may be actual or constructive
a. Actual delivery (tradition) – were physically, the property changes hands.
Ex. If A sells B a fountain pen, the giving by A to B of the fountain pen is actual
 tradition.
b. Constructive deliver – that where the physical transfer is implied. This may be done
by:
1) tradition simbolica (symbolical tradition) – when the keys to an apartment
are given
2) tradition longa manu (delivery by mere consent or the pointing out of the
object) – pointing out the car, which is the object of the sale
3) tradition brevi manu – that kind of delivery whereby a possessor of a thing
not as an owner, becomes the possessor as owner. Ex. As
when a tenant already in possession buys the house he is renting.
4) tradition constitutom possessorium – the opposite of brevi manu; delivery
whereby a possessor of a thing as an owner, retains
possession no longer as an owner, but in some other capacity. Ex.
Like a house owner, who sells a house, but remains in possession
as tenant of the same house.
5) tradition by the execution of legal forms and solemnities (like the execution
of a public instrument selling land)

*However, he shall acquire no real right over it until the same has been delivered to him.
- a personal right is power demandable by one person of another – to give, to do, or not
to do
- a real right is a power over a specific thing (like the right of ownership or possession)
and is binding on the whole word
Ex. A is obliged to give B on July 30, 2019, a particular parcel of land. (Before July 30, he
has no right whatsoever over the fruits.) After July 30, 2019, B, the
creditor is entitled (as of right) to the fruits. But if the fruits and the land
are actually or constructively delivered only on August 5, 2019, B becomes
owner of said fruits and land only from said date. Between July 30 and August 5,
B had only a personal right (enforceable against A); after Aug. 5, he has a
real right (over the properties), a right that is enforceable against the whole
world.

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.
2. Deliver all Accessions and accessories of the thing although not mentioned. (Art. 1166)
Exception: Contrary stipulation
Ex. If I am obliged to deliver a particular car I must also give the accessories (like the “jack”) and
accessions (land-building constructed thereon). Even if not mentioned

a) Accessions – additions to or improvements upon a thing. These include alluvium (soil gradually
deposited by the current of a river on a river bank) and whatever is built,
planted, or sown on a person’s parcel of land
b) Accessories – those joined to or included with the principal for the latter’s better use,
perfection, or enjoyment.

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.
3. Deliver the thing itself
Art. 1233. A debt shall not be understood to have been paid unless the thing or service in
which the obligation consists has been completely delivered or rendered, as the case
may be.
 *Rules to consider in delivering the thing:
General Rule: The debtor of a thing cannot compel the creditor to receive a different one,
although the latter may be of the same value as, or more valuable than which is due. (Art. 1244, par. 1)

Exceptions:
a) in case of Facultative obligations – (Art. 1206, par. 1) When only one prestation has
been agreed upon, but the obligor may render another in
substitution, the obligation is called facultative.
b) in case there is another agreement resulting in either:
i. dation in payment – “Art. 1245. Whereby property is alienated to the creditor
in satisfaction of a debt in money, shall be governed by the law of
sales.”
- mode of extinguishing an obligation whereby the debtor alienates in
favor of the creditor property for the satisfaction of
monetary debt.
ii. novation – Art. 1291. The substitution or change of an obligation by another,
which extinguishes or modifies the first, either changing its
object or principal condition, or substituting another in place
of the debtor, or subrogating a third person in the rights of the
creditor.
c) in case of waiver by the creditor (expressly or impliedly)

4. Preserve or take care of the thing due 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.
- Unless diligence is exercised, there is a danger that the property would be lost or destroyed,
thus rendering illusory the obligation.

*Diligence Needed
a. That which is required by the nature of the obligation and corresponds with the circumstances
of persons, time and place. (Art. 1173)
Diligence of a good father of a family (bonus pater familias)
- the diligence of a good father of a family requires only that diligence which an
ordinary prudent man would exercise with regard to his own property.
Exceptions:
a. the law or the stipulation of the parties requires another standard of care
b. common carriers – because of the nature of their business and for reasons of
public policy, is bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers
transported by them, according to all the
circumstances of each case.
c. banks – are duty bound to treat the deposit accounts of their depositors with
the highest degree of care, diligence required is more than that of a
good father of a family (fiduciary nature).

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.
5. Be liable for damages in case of delay, fraud, negligence or contravention of tenor thereof.

*Correlative rights of the creditor (remedies when debtor fails to comply with his obligations)
a) To compel specific performance with right to be indemnified for damages.
Art. 1165. When what is to be delivered is a determinate thing, the creditor, in
 addition granted him by article 1170, may compel the debtor to make
the delivery.
b) Right to the fruits of the thing from the time the obligation to deliver it arises. (Art.
1164)
c) Art. 1165, par. 3. If the obligor delays, or has promised to deliver the same thing to
two or more persons who do not have the same interest, the creditor
has the right to hold the obligor responsible for any fortuitous event until the
latter has effected delivery.
d) To demand rescission of the obligation with right to recover damages, should the
obligation be reciprocal.
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case
one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfilment and the rescission of the
obligation, with the payment of damages in either case. He may also
seek rescission, even after he has chosen fulfilment, if the latter should
become impossible.
e. To demand payment for damages under Art. 1170

B. Duties of a Debtor obliged to give an indeterminate or 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.
1. To deliver a thing, which is neither of superior nor inferior quality, taking into consideration the
purpose and circumstances of the obligation.
If contract does not specify the quality:
a) the creditor cannot demand a thing of superior quality (but if he desires, he may demand and
accept one of inferior quality)
b) the debtor cannot deliver a thing of inferior quality, but if he so desires, he may deliver one of
superior quality (provided it is not a different kind) (Art. 1244)

2. To be liable for damages in case of delay, fraud, negligence or contravention of the tenor thereof.

*Correlative rights of the creditor

a) To ask for performance of the obligation
b) To ask that the obligation be complied with at the expense of the debtor. ( Art. 1165,
par. 2. If the thing is indeterminate or generic, he may ask that the obligation be
complied with at the expense of the debtor)
*If the debtor can no longer perform the principal obligation, the creditor may
ask for compliance by a third person at the debtor’s expense.
c) To recover damages in case of fraud, negligence, delay, or contravention of the tenor
of the obligation (Art. 1170)

*Kinds of Damages
1. Moral – for mental and physical anguish
2. Exemplary – corrective or to set an example
3. Nominal – to vindicate a right – when no other kind of damages may be recovered
4. Temperate – when the exact amount of damages cannot be determined
5. Actual – actual losses as well as unrealized profit
6. Liquidated – predetermined beforehand – by agreement
II. OBLIGATION TO DO (Positive Personal Obligation)
Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.
 The 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.
*Three situations contemplated referring to an obligation to do:
a) The debtor fails to perform an obligation to do
b) The debtor performs an obligation to do, but contrary to the terms thereof; or
c) The debtor performs an obligation to do but in a poor manner

*Duties of the Obligor

a) To do it
b) To shoulder the cost if someone else does it
c) To undo what has been poorly done
d) To pay damages
*A personal obligation to do, like a real obligation to deliver a generic thing, can be performed
by a third person
*While the debtor can be compelled to make the delivery of a specific thing, a specific
performance cannot be ordered in a personal obligation to do because this may
amount to involuntary servitude which, as a rule, is prohibited under the 1987 Constitution.
- Where the personal qualifications of the debtor are the determining motive for the
obligation contracted (e.g. sing in a concert), the performance of the same by
another would be impossible or would result to be so different that the obligation could
not be considered performed. Hence, the only remedy of the creditor is
indemnification.

III. OBLIGATION NOT TO DO (Negative Personal Obligation)

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.
*In obligation not to do, the duty of the obligor is to abstain from an act. Here, there is no
specific performance. The very obligation is fulfilled in not doing what is forbidden. Hence, in this kind of
obligation the debtor cannot be guilty of delay.

*Duties of the Obligor:

a) Not to do what should not be done
b) To shoulder the cost to undo what should not have been done
c) To pay damages (Art. 1170)
Art. 1244, par. 2. In obligations to do or not to do, an act or forbearance cannot be substituted
by another act or forbearance against the obligee’s will.

*Cases where remedy (to have it undone at the expense of the debtor) is not available
1. Where the effects of the act which is forbidden are definite in character – even if it is
possible for the obligee to ask that the act be undone at the expense of the obligor,
consequences permanent in character and contrary to the object of the
obligation will be produced
Ex. A TV star who is absolutely prohibited by his contract with his home station to
appear in programs of other TV stations. The effects of the breach thereof can
no longer be undone.
2. Where it is physically or legally impossible to undo what has been done because of
the very nature of the act itself or of a provision of law, or because of conflicting rights
of third persons.
*In either case, the only feasible remedy is indemnification for damages.

Contract – a meeting of minds between two persons whereby one binds himself, with respect to the
other, to give something or to render some service. (Art. 1305)
Breach of Contract – the failure without legal reason to comply with the terms of the contract. It is also
defined as the failure without legal excuse to perform any promise which forms the whole or part of the contract.
(PNB v Sps. Tajonera)
*Breach of obligation may be
1. Voluntary – arises either by fraud, negligence, delay, and in any manner contravene
the tenor of the obligation (Art. 1170)
2. Involuntary – arises due to fortuitous events (Art. 1174)
3. Substantial – fundamental breaches that defeat the object of the parties in entering
into agreement
4. Casual – only a part of the obligation has been performed such as payment of
substantial amount of the purchase price