STUDY GUIDE 2

Nature and Effects of

Obligation
STUDY GUIDE 2

Nature and Effects of Obligation

I. Definitions

Define or give the meaning of the following:

1. Generic or Indeterminate thing;

A thing is generic or indeterminate when it refers only to a class or genus to which it

pertains and cannot be pointed out which particularity. (Article 1163).

2. Personal right;

Personal right is the right or power of a person (creditor) to demand from another

(debtor), as a definite passive subject, the fulfillment of the latter’s obligation to give, to

do, or not to do. (Article 1164).

3. Legal delay or default;

Legal delay or default or mora is the failure to perform an obligation on time which

failure constitutes a breach of the obligation. (Article 1169).

4. Fortuitous event;

Fortuitous event is any event which cannot be foreseen or which, through foreseen, is

inevitable. (Article 1174).

5. Diligence of a good father of a family;

The phrase has been equated with ordinary care or that diligence which an average (a

reasonably prudent) person exercises over his own property. (Article 1163).

II. Discussions
1. Give the rules as to the liability of a person for loss or damage resulting from a fortuitous event.

According to Article 1174, a person is not liable for loss or damage caused to another resulting
from the non-performance of his obligation due to fortuitous events. In other words, his obligation is
extinguished. Except

(1) When expressly specified by law, like if the debtor is guilty of fraud, negligence, delay, or
contravention of the tenor of the obligation or the debtor has promised to deliver the same specific or
determinate thing to two or more persons who do not have the same interest, or the obligation to
deliver a specific thing arises from a crime or the thing to be delivered is generic. And,

(2) When declared by stipulation and lastly

(3) When the nature of the obligation requires the assumption of risk.

2. What rights are given by law to the creditor in case the debtor fails to comply with his obligation to
deliver a specific thing?

According to Article 1165, the creditor may exercise remedies in case the debtor fails to comply
with his obligation which are to demand specific performance or fulfillment (if still possible) of the
obligation with a right to indemnity for damages, to demand recission or cancellation (in certain cases)
of the obligation also with a right to recover damages and lastly is to demand payment of damages only,
where it is the only possible remedy.

3. What are included to be delivered in an obligation to give a definite thing? Explain

them.

In Article 1166, when delivering a definite thing, all accessions and accessories

are also delivered, even they are not mentioned. Accessions are the fruits of a thing or

additions to or improvements upon a thing (the principal). While the accessories are

things joined to or included with the principal thing for the latter’s embellishment,

better use, or completion.

4. Suppose the obligation of the debtor is to do something and he fails to do it or

performs it in contravention of the agreement, what are the remedies available to the

creditor?

According to Article 1167, the remedies available to creditor if the debtor fails to

comply with his obligation to do, the creditor has the right (a) to have the obligation

performed by himself, or by another, unless personal considerations are involved, at

the debtor’s expense and (b) to recover damages. However, in case the obligation is
done in contravention of the terms of the same or is poorly done, it may be ordered

(by the court upon complaint) that it be undone if it is still possible to undo what was

done.

5. Can a debtor be put in delay and consequently incur liability even without demand

from creditor? Explain.

According to Article 1169, delay by the debtor begins only from the moment a

demand, judicial or extra-judicial, for the fulfillment of the former’s obligation is

made by the creditor. Except, demand is not needed when the obligation so provides,

when the law provides, when time is of the essence, and when demand would be

useless.

6. May an action arising from fraud be waived? Explain.

According to Article 1170:

oIf it is future fraud, the waiver of action is void. A contrary rule would encourage

the perpetration of fraud because the obligor knows that even if he should commit

fraud, he would not be liable for it, thus making the obligation illusory.

oIf it is past fraud, the waiver of action is valid. Because the waiver can be

considered as an act of generosity and magnanimity on the part of the party who

is the victim of fraud. In here, the waiver must be expressed in clear language

which leaves no doubt as to the intention of the obligee to give up his right against

the obligor.

7. May an action arising from negligence be waived? Explain.

According to Article 1172:

oAn action for future negligence may be renounced except where the nature of the

obligation requires the exercise of extraordinary diligence as in the case of

common carriers.

oWhere negligence shows bad faith, it is considered equivalent to fraud. Any

waiver for future negligence of this kind is, therefore, void.

III. Problems
Explain or state briefly the rule or reason for your answer.

1. S (seller sold to B (buyer) on July 5, a horse named Silver to be delivered on July 20.

However, on July 15, S sold again and delivered the horse to T. Who has a better right

to Silver?

T has the better right to the horse, because according to the Article 1164, the

creditor has the 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. Therefore, in this case, S only have the personal right to the Silver

which means, he only has the power to demand to B. While on the other hand, T has

the real right to Silver which means, a right over a specific thing, like ownership.

2. S sold to B a specific refrigerator which S agreed to deliver not later than July 31, S

did not deliver the refrigerator on said date. Is S guilty of legal delay?

No, because according to Article 1169, ordinary delay is the failure to perform the

obligation on time. Therefore, S is only in ordinary delay, since B did not make any

demand to S for the delivery. Even though there is a period fixed for the delivery, S is

not liable for the damages.

3. S promised to deliver to B a female horse named Suzie on July 10. Suzie gave birth to

a colt on July 5.

a. What are the obligations of S?

According to the Article 1163, the duties of S are:

1) Preserve the thing which is Suzie.

2) Deliver the fruit of the thing which is the colt if it was born before the

obligation to deliver arises.

3) Deliver the accessions and accessories.

4) Deliver the thing itself which is Suzie.

5) Answer for damages in case of non-fulfillment.

b. Who has a right to the colt?

S has the right to colt. According to Article 1164, since the colt was born

before the obligation to deliver the horse arisen. Therefore, S does not have to
give the colt to B.

c. Who is the lawful owner of Suzie in case it was sold and delivered by S to T

on July 8?

T is the lawful owner of Suzie, since T acquired the real right to the female

horse.

4. D (debtor) borrowed P20,000 from C (creditor) payable after one (1) year. Is D liable

to pay interest?

According to Article 1175, D is only liable to pay interest if:

D and C expressly stipulated that there will be a payment of interest.

There is a written agreement about the payment of the interest.

The interest is lawful and valid.

5. R (lessor) issued a receipt that E (lessee) has paid the rent for the months of March,

2008. Can R still collect from E the rents for January and February, 2008?

Yes, even though According to the Article 1176, 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.

For this case, it was presumed that the rent for the months of January and

February have already been paid. But this presumption is a disputable one, R can

show that the receipt is only the rent for the month of March.