(BL 01) Obligation and Contract

Module 3:

NATURE AND EFECT OF OBLIGATION

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.
(1904a)

ART. 1664. 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. (1905)

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 affected the deliver. (1906)

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. (1097a)

DETERMINATE THING AND GENERIC THING

1. DETERMINATE OR SPECIFIC THING - a thing is determinate when it is particularly designated or
physically segregated from all others of the same class (Article 1460). A thing is determinate or
specific when it is distinct from all others of the same class. A determinate thing is distinct because of its
individuality.

Examples of a determinate thing are:

 the laptop you are viewing this website on, your car (if you own only one), the lot on
443 Sto. Cristo, Guagua, Pampanga.

2. INDETERMINATE OR GENERIC THING – a thing is indeterminate when it is not particularly

designated or particularly segregated from all others of the same class.

Examples are car, watch, sacks of rice, P100,000.

IMPORTANCE OF KNOWING WHETHER THE THING IS DETERMINATE OR

INDETERMINATE
Loss of indeterminate things due does not extinguish the obligation. While loss of determinate things
when due, extinguishes the obligation.

Obligation of the obligor to give determinate thing

1. 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. ( Art. 1163)

Diligence of a good father of a family or ordinary diligence means the ordinary care that an
average person exercises in taking care of his property.  It means the care and attention that is expected
from and is ordinarily exercised by a reasonable and prudent person under the circumstances.

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Extra-ordinary diligence represents that extreme measure of care and caution which persons of
unusual prudence and circumspection use for securing and preserving their own property or rights.

2. TO DELIVER THE THING. Delivery involves the transfer of possession and/or control of property,
real or personal, from the obligor to the oblige, either actual or constructive.

3. TO DELIVER THE FRUITS OF THE THING. The fruits may be (Art. 442) -
a. NATURAL FRUITS – refers to the spontaneous products of the soil and the young and
other products of animals. There must be no human intervention in the production of the said
fruits. Examples are the trees and shrubs that grow without intervention of human labor, the
calf of the cow, and the young of farm animals are natural fruits.

b. INDUSTRIAL FRUITS – refers to those produced by land of any king through cultivation
of labor. Examples are the grapes that are harvested from vineyards, rice, corn and other
crops produced through human cultivation are industrial fruits.

c. CIVIL FRUITS – are those which are the result of a juridical relation such as the rent of a
building, price of lease of land and other property and the amount of perpetual life annuities.

When creditor has a right to the fruits of determinate thing

Under 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.

Example
AWRA bind himself to sell his horse to BOOH for from P10, 000. No date nor condition is
stipulated for delivery of the horse. Later, the horse gave birth to a colt. AWRA has right to the colt, if
BOOH has not paid the horse. Before delivery, BOOH does not acquire ownership over it.

When obligation to deliver the thing arises

1. WITHOUT PERIOD OR CONDITION – upon perfection of the obligation

2. WITH PERIOD OR CONDITION – upon arrival of the term or upon perfection of the condition

Example:
“DOUGLAS promise to deliver to EVA a red Honda car after EVA passes the
CPA board exams. The obligation to deliver the thing arises only upon passing of CPA
exams by EVA.

RIGHTS OF THE CREDITOR

1. PERSONAL RIGHT – the right of a legal subject specified in an agreement or contract. This refers to
the right that may be enforced by one person on another, such as the right of the creditor to demand
delivery of the things, together with all its fruits from the debtor.

2. REAL RIGHT – refers to the right of the owner over the specific thing, such as possession and
ownership. This right is enforceable against the whole world. Real right over the thing is acquired by the
creditor when it is delivered to him by the debtor

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4. TO DELIVER ITS ACCESSIONS AND ACCESSORIES even if they have not been mentioned (art.
1166)
Accessions – include everything that is produced by a thing or is incorporated or attached thereto,
either naturally or artificially. (Art. 440), such as alluvium, the soil gradually deposited
by current of a river on a river bank, or whatever planted or sown on a parcel of land.
For example, a person who owns property along a river also takes ownership of
any additional land that builds up along the riverbank. This right may extend to
additions that result from the work or skill of another person. The buyer of a car who
fails to make scheduled payments cannot get back his new spark plugs after the car is
repossessed because they have become a part of the whole car

Accessories – are those joined to or included with the principal thing for the latter’s better use,
perfection or enjoyment. Examples are the keys to the house, the bracelet of a
wristwatch, the stereo in a car).

Accretion which refers to the gradual and addition of sediment to the shore by action of water

REMEDIES OF THE CREDITOR

1. If the debtor fails to perform his obligation to deliver a determinate thing
a. The creditor may compel delivery from the debtor (Art. 1165)
b. Demand for damages from the debtor

Example:
DEEDEE obliged himself to deliver to ENCHONG a 2012 model Honda City
white car with Plate No. LUV 143 on June 31, 2013.” On due date, ENCHONG can only
compel DEEDEE to deliver the said specific car. If DEEDEE still fails to deliver despite
demand, ENCHONG can ask for damages from DEEDEE.

2. If the debtor fails to perform his obligation to deliver an indeterminate thing

a. Ask that the obligation be complied with at the expense of the debtor
b. To demand for damages from the debtor

Example:
ADAM promise to deliver to BRYAN 10 bags of cement. On due date, ADAM
failed to deliver the thing. Here, BRYAN can ask another person to deliver the 10 bags of
cement at the expense of ADAM. BRYAN can likewise demand damages from ADAM.

Art. 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)

ART. 1168. When the obligation consists in not doing, and the obligor does have been forbidden him, it shall
also be undone at his expense, (1099a)

OBLIGATION OF THE DEBTOR NOT TO DO

This is negative personal obligation which is consisting of an obligation, of not doing something. If the
debtor does what has been forbidden him to do, the obligee can ask the debtor to have it undone. If it is

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impossible to undo what was done, the remedy of the injured party is for an action of damages.

3. If the debtor fails to perform his obligation in obligation to do

 If the debtor fails to perform the obligations or perform it in contravention of the tenor thereof
a. The creditor may have the obligation executed at the expense of the debtor
b. He may also demand damages from the debtor

Example:
BALDO contracted GUSTO to build his residential house. The contract
stipulates the design of the house, the materials to be used, and the construction period of
120-days from signing of the contract by the parties. If GUSTO does not perform the
obligation, BALDO may himself, or ask another contractor to build the house at GUSTO’s
expense. BALDO may likewise demand damages from GUSTO.

The same is true if GUSTO performs his obligation in contravention of the tenor of their
agreement.

Note: BALDO cannot compel GUSTO to perform the obligation against the latter’s will, as
this will be in violation of constitutional prohibition against involuntary servitude.

 If the debtor performs the obligation but does it poorly

a. The creditor may have the same be undone at the expense of the debtor
b. The creditor may also demand damages from the debtor

Example:
in the above example, if GUSTO uses sub-standard materials in building BALDO’s
house, BALDO can have it undone by another person or even himself at the expense of
GUSTO. BALDO can also claim for damages from GUSTO.

4. If the debtor does what has been forbidden to him

a. The creditor may demand that what has been done be undone
b. He may also demand damages from the debtor

Example:
DILRABA bought a portion of parcel of land from EMERSON. DILRABA likewise
paid EMERSON a certain amount for the right of way, with the condition that EMERSON
would not construct a fence or any improvement on the said right of way. Sometimes thereafter,
however, EMERSON constructed a fence in the said right of way thereby blocking the free
access of DILRABA to the provincial road. DILRABA can demand from EMERSON to
remove the fence, or he may ask other person or even himself, to remove the fence at the expense
of EMERSON. DILRABA can also demand damages from EMERSON.

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