TITLE | OBLIGATIONS (Arts. 1156-1304, Civil Code.) Chapter 1 GENERAL PROVISIONS ARTICLE 1156. An, obligation is a juridical necessity to give, to do or not to do. (n) Meaning of obligation. The term obligation is derived from the Latin word obligatio which means fying or binding. It isa tie or bond recognized by law by virtue of which one is bound in favor of another to render something — and this may consist in giving a thing, doing a certain act, or not doing a certain act. Civil Code definition. Article 1156 gives the Civil Code definition of obligation, in its passive aspect. It merely stresses the duty under the law of the debtor or obligor (he who has the duty of giving doing, or not doing) when it speaks of obligation as a juridical necessity.18 THE LAW ON OBLIGATIONS AND Art. 1156. CONTRACTS Meaning of juridical necessity. Obligation is a juridical necessity because in case of noncompliance, the courts of justice may be called upon by the aggrieved party to enforce its fulfillment or, in’ default thereof, the economic value that it represents. In a proper case, the debtor or obligor may also be made liable for dainages, which represents the sum of money given as a compensation for the injury or harm suffered by the creditor or obligee (he who has the right to the performance of the obligation) for the violation of his rights. In other words, the debtor must comply with his obli- gation whether he likes it or not; otherwise, his failure will be visited with some harmful or undesirable consequences. If obligations were not made enforceable, then people can disregard them with impunity. There are, however, obliga- tions that cannot be enforced because they are not recog- nized by law as binding. Nature of obligations under the Civil Code. Obligations which give to the creditor or obligee a right under the law to enforce their performance in courts of justice are known as civil obligations. They are to be dis- tinguished from natural obligations, which, not being based. on positive law but on equity and natural law, do not grant a right of action to enforce their performance although in case of voluntary fulfillment by the debtor, the latter may ‘not recover what has been delivered or rendered by reason : thereof. (Art. 1423,) Natural obligations are discussed under the Title deal- ing with “Natural Obligations.” (Title III, Arts. 1423-1430.) {Unless otherwise indicated, refers to article in the Civil Code. Art. 1156 GENERAL PROVISIONS 9 Essential requisites of an obligation. Every obligation has four (4) essential requisites, namely: (1) A passive subject (called debtor or obligor). — the person who is bound to the fulfillment of the obligation; he who has a duty; (2) An active subject (called creditor or obligee). — the person who is entitled to demand the fulfillment of the obligation; he who has a right; (3) Object or prestation (subject matter of the obliga- tion). — the conduct required to be observed by the debtor. It may consist in giving, doing, or not doing. Without the prestation, there is nothing to perform. Ln bilateral obliga- tions (see Art. 1191.), the parties are reciprocally debtors and creditors; and (4) A juridical or legal tie (also called efficient cause). ~~ that which binds or connects the parties to the obligation. The tie in an obligation can easily be determined by knowing the source of the obligation. (Art. 1157.) ~ EXAMPLE: Under a building contract, X bound himself to build a house for Y for P1,000,000. Here, X is the passive subject, Y is the active subject, the building of the house is the object or prestation, and the agreement or contract, which is the source of the obligation, is the juridical tie. Suppose X had already constructed the house and it was the agreement that Y would pay X after the construction is finished, X then becomes the active subject and Y, the passive subject, Form of obligations. The forn of ar obligation refers to the manner in which an obligation is manifested or incurred. It may be oral, or in writing, or partly oral and partly in writing. —20 ‘THE LAW ON OBLIGATIONS AND. Art, 1156 CONTRACTS: (1) As a general rule, the law does not require any form in obligations arising from contracts for their validity or binding force. (see Art. 1356.) (2) Obligations arising from other sources (Art. 1157.) do not have any form at all. Obligation, right, and wrong distinguished. (1) Obligation is the act or performance which the law will enforce. (2) Right, on the other hand, is the power which a person has under the law, to demand from another any ~ Pprestation. (3) A wrong {cause of action), according to its legal meaning, is an act or omission of one party in violation of the legal right or rights (ie., recognized by law) of another. In law, the term injury is also used to refer to the wrongful violation of the legal right of another. The essential elements of a legal wrong or injury are: (a) a legal right in favor of a person (creditor / obligee/ plaintiff); (b) a correlative legal obligation on the part of another (debtor / obligor /defendant); to respect or not to violate said right; and (c) an act or omission by the latter in violation of said right with resulting injury or damage to the former. An obligation on the part of a person cannot exist without a corresponding right in favor of another, and vice versa. A wrong or cause of action only arises at the moment a right has been transgressed or violated. EXAMPLE: In the preceding example, Y has the legal right to have his house constructed by X who has the correlative legal Art 1156 GENERAL PROVISIONS 21 obligation to build the house of Y under their contract. X has the right to be paid the agreed compensation provided the house is built according to the terms and conditions of the contract. The failure of either party to comply with such terms and conditions gives the other a cause of action for the enforcement of his right and/or recovery of indemnity for the loss or damage caused to him for the violation of his sight. Kinds of obligation according to the subject matter. From the viewpoint of the subject matter, obligation may be either real or personal. (1) Real obligation (obligation to give) is that in which the subject matter is a thing which the obligor must deliver to the obligee. EXAMPLE: X (e.g, seller) binds himself to deliver a piano to Y (buyer). (2) Personal obligation (obligation to do or not to do) is that in which the subject matter is.an act to be done or not to be done. There are two (2) kinds of personal obligation: (a) Positive personal obligation or obligation to do or to render service. (see Art. 1167.) EXAMPLE: X binds himself to repair the piano of Y. (b) Negative personal obligation is obligation not to do (which naturally includes obligations “not to tive”). (see Art. 1168.)2 ‘THE LAW ON OBLIGATIONS AND Art. 1157 CONTRACTS EXAMPLE: X obliges himself not to build a fence on a certain portion of his lot in favor of Y who is entitled to a right of way over said lot. ART. 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; . (4) Acts or omissions punished by law; and (5) Quasi-delicts. (1089a) Sources of obligations. The sources of obligations are enumerated below: (1) Law. — when they are imposed by law itself. EXAMPLES: Obligation to pay taxes; obligation to support one’s family, (Art. 291.) (2) Contracts. — when they arise from the stipulation of the parties. (Art. 1306.) EXAMPLE: The obligation to repay a_loan or indebtedness by virtue of an agreement. (3) Quasi-contracts. when they arise from lawful, voluntary and unilateral acts which are enforceable to the end thatno one shall be unjustly enriched or benefited at the expense of another, (Art. 2142.) In a sense, these obligations may be considered as arising from law. Art 1157 GENERAL PROVISIONS 23 T:XAMPLE: The obligation to retum money paid by- mistake or which is not due. (Art. 2154.) (4) Crises or acts or omissions punished by law. — when they arise from civil liability which is the consequence of a- criminal offense. (Art. 1261.) EXAMPLE: The obligation of a thief to return the car stolen by him; the duty of a killer to indemnify the heirs of his victim. (5) Quasi-delicts or torts. -- when they arise from damage caused to another through an act or omission, there being fault or negligence, but no contractual relation exists between the parties, (Art. 2176.) EXAMPLES: The obligation of.the head of a family that lives in a building or a part thereof to answer for damages caused by things thrown or falling from the same (Art. 2193.); the obligation of the possessor of an animal to pay for the damage which it may have caused. (Art. 2183.) Sources classified. The law enumerates five (5) sources of obligations. They may be classified as follows: (1) Those emanating from law; and (2) Those emanating from private acts which may be further subdivided into: (a) Those arising from licit acts, in the case of contracts and quasi-contracts (infra.); and (b) Those arising from illicit acts, which may be either punishable in the case of delicts or crimes, or not punishable in the case of quasi-delicts or torts. (infra.)24 THE LAW ON OBLIGATIONS AND Art. 1158 CONTRACTS Actually, there are only two (2) sources: law and con- tracts, because obligations arising from quasi-contracts, delicts, and quasi-delicts are really imposed by law. (see Leung Ben vs. O'Brien, 38 Phil. 182.) ART. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (1090) Legal obligations. Article 1168 refers to legal obligations or obligations arising from law. They are not presumed because they are considered a burden upon the obligor. They are the exception, not the rule. To be demandable, they must be clearly set forth in the law, ie, the Civil Code or special laws. Thus: oO (1) An employer has no obligation to furnish free jegal assistance to his employees because no law requires this, and therefore, an employee may not recover from his employer the amount he may have paid a lawyer hired by him to recover damages caused to said employee by a stranger or strangers while in the performance of his duties. (De la Cruz vs. Northern Theatrical Enterprises, 95 Phil. 739.) Q) A private school has no legal obligation to provide clothing allowance to its teachers because there is no law which imposes this obligation upon schools. But a person who wins money in gambling has the duty to return his winnings to the loser. This obligation is provided by law. (Art, 2014.) Under Article 1158, special iaws refer to all other laws not contained in the Civil Code. Examples of such laws are Art 1189 GENERAL PROVISIONS 25 Corporation Code, Negotiable Instruments Law, Insurance Code, National Internal - Revenue Code, Revised Penal Code, Labor Code, etc. ART. 1159. Obligations arising from con- tracts have the force of law between the con- tracting parties and should be complied with in good faith. (10914) Contractual obligations. The above article speaks of contractual obligations or obligations arising from contracts or voluntary agreements. li presupposes that the contracts entered into are valid and enforceable. A contract is a meeting of minds between two (2) per- sons whereby one binds himself, with respect to the other, to give something or to render some service. (Art. 1305.) (1) Binding force. ~ Obligations arising from contracts have the force of law between the contracting parties, ie., they have same binding effect of obligations imposed by laws. This does not mean, however, that contract is superior to the law. As a source of enforceable obligation, contract must be valid and it cannot be valid if itis against the law. (2) Requirement ofa valid contract. ~~ Acontract is valid (assuming all the essential elements are present; Art. 1318.) if it is not contrary to Jaw, morals, good customs, public order, and public policy. ft is invalid or void if it is contrary to law, morals, good customs, public order, or public policy. (Art, 1306.) In the eyes of the law,-a void contract does not exist. (Art. 1409,) Consequently, no obligations will arise, A contract may be valid but cannot be enforced. This is true in the case of unenforceable contracts. (see Arts. 1517, 1403.) (3) Breach of contract. — A contract may be breached or violated by a party in whole or in part. A breach of contract26 THE LAW ON OBLIGATIONS AND. Art. 1160 CONTRACTS takes place when a party fails or refuses to comply, without legal reason or justification, with his obligation under the contract as promised, Compliance in good faith. Compliance in good faith means compliance or perfor- mance in accordance with the stipulations or terms of the contract or agreement. Sincerity and honesty must be ob- served to prevent one party from taking unfair advantage over the other. Non-compliance by a party with his legitimate obliga- tions after receiving the benefits of a contract would consti- tute unjust enrichment on his part. EXAMPLES: (1) If S agrees to sell his house to B and B agrees to buy the house of S, voluntarily and willingly, then they are bound by the terms of their contract and neither party may, upon his own will, and without any justifiable reason, withdraw from the contract or escape from his obligations thereunder. That which is agreed upon in the contract is the law between S and B and must be complied with in good faith. (2) Acontract whereby S will kill B in consideration, of P1,000 to be paid by C, is void and non-existent because killing a person is contrary to law. Likewise, an agreement whereby S will render domestic service gratuitously until his loan to B is paid, is void as being contrary to law and morals. (see Art. 1689; De los Reyes vs. Alejado, 16 Phil. 499.) In both cases, S$ has no obligation to comply with his agreements. ART. 1160. Obligations derived from quasi- contracts shall be subject to the provisions of Chapter 1, Title XVI of this Book. {n) Art, 160 GENERAL PROVISIONS 7 Quasi-contractual obligations. Article 1160 treats of obligations arising from quasi- contracts or contracts implied in law. A quasi-contract is that juridical relation resulting from lawful, voluntary and unilateral acts by virtue of which the parties become bound to each other to the end that no one will be unjustly enriched or benefited at the expense of another, (Art. 2142.) [Lis not properly a contract at all. In contract, there is a meeting of the minds or consent (see Arts, 1318, 1319.); the parties must have deliberately entered into a formal agreement. In a quasi-contract, there is no consent but the same is supplied by fiction of law. Jn other words, the law considers the parties as’ having entered into a contract, although they have not actually done so, and irrespective of their intention, to prevent injustice or the unjust enrichment * of a person at the expense of another. Kinds of quasi-contracts. the principal kinds of quasi-contracts are negotiorum weatio and soltitio indebiti. (1) Negotioruit gestio is the voluntary management of the property or affairs of another without the knowledge or consent of the latter. (Art. 2144.) UXAMPLE: X went to Baguio with his family without leaving someboely to look after his house in Manila, While in Baguio, a big fire broke out near the house of X. Through the effort of Y, a neighbor, the house of X was saved from being burned. Y, however, incurred expenses. In this case, X has the obligation to reimburse Y for said expenses, although he did not factually give his consent to the act of Y in saving his house, on the principle of quasi- contract.28 ‘THE LAW ON OBLIGATIONS AND Art. 1161 CONTRACIS (2).Solutio_indebiti is the juridical relation which is created when something is received when there is no right to demand it and it was unduly delivered through mistake. (Art. 2154.) The requisites are: (a) There is no right to receive the thing deliv- ered; and (b) The thing was delivered through mistake. EXAMPLE: D owes C P1,000. If D paid T believing that T was authorized to receive payment for C, the obligation to return on the part of T arises. If D paid € P2,000 by mistake, C must return the excess of P1,000. (3) Other examples of quasi-contracts. — They are provided in Article 2164 to Article 2175 of the Civil Code, - The cases that have been classified as quasi-contracts are of infinite variety, and when for some reason recovery cannot be had on a true contract, recovery may be allowed on the basis of a quasi-contract. EXAMPLE: S, seller of goat’s milk leaves milk at the house of B each morning. B uses the milk and places the empty bottles on the porch. After one (1) week, $ asks payment for the milk delivered, * Here, an impliéd contract is understood to have been entered into by the very acts of S and B, creating an obligation on the part of B to pay the reasonable value of the milk, otherwise, B would be unjustly benefited at the expense of S, ART. 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of article 2177, and of the pertinent provisions of Chapter” Avi Hot GENERAL PROVISIONS 29 2, Preliminary Title, on Human Relations, and of Title XVII of this Book, regulating damages. (1092a) Civil liability arising from crimes or delicts. ‘This article deals with civil liability for damages arising from crimes or delicts, (Art. 1157[4].) (1) Oftentimes, the commission of a crime causes not only moral evil but also material damage. From this principle, the rule has been established that every person criminally liable for an act or omission is also civilly liable for damages. (Art. 100, Revised Penal Code.) (2) in crimes, however, which cause no material damage (like contempt, insults to persons in authority, sambling, violations of traffic regulations, etc.), there is no civil liability to be enforced. But a person not criminally responsible may still be liable civilly (Art. 29; Sec. 2[c], Rule 111, Rules of Court.), such as failure to pay a contractual debt; causing damage to another's property without malicious or criminal intent or negligence, etc. Scope of civil liability. The extent of the civil liability for damages arising from crimes is governed by the Revised Penal Code and the Civil Code. This civil liability includes: (1) Restitution; (2) Reparation for the damage caused; and (3) Indemnification for consequential damages. (Art. 104, Revised Penal Code.) VXAMPLE: X stole the car of Y. If X is convicted, the court will order X: (1) to return the car or to pay its value if it was lost or destroyed; (2) to pay for any damage caused to thea a0 THE LAW ON OBLIGATIONS AND Art. 1162 CONTRACTS car; and (3) to pay such other damages suifered by Y as a consequence of the crime. ART. 1162. Obligations derived from quasi- delicts shall be governed by the provisions of Chapter 2, Title XVI of this Book, and by special laws. (1093a) Obligations arising from quasi-delicts. . The above provision treats of obligations arising from quasi-delicts or torts. (see Arts. 2176 to 2194.) A quasi-delict is an act or omission by a person (tort- feasor) which causes damage to another in his person, pro- perty, or rights giving rise to an obligation to pay for the damage done, there being fault or negligence but there is no pre-existing contractual relation between the parties. (Art. 2176.) Requisites of quasi-delict. Before a person can be held liable for quasi-delict, thé following requisites must be present: (1) There must be an act or omission; (2) There must be fault or negligence; (3) , There must be damage caused; (4) There must be a direct relation or connection * of cause and effect between the act or omission and the damage; and (3) There is no pre-existing contractual relation between the parties. EXAMPLE: While playing softball with his friends, X broke the window glass of Y, his neighbor. The accident would not Ant 1182 GENERAL PROVISIONS 31 have happened had they played a little farther from the house of ¥. In this case, X is under obligation to pay the damage caused to ¥ by his act although there is no pre-existing contractual relation between them because he is guilty of fault or negligence. Crime distinguished from quasi-delict. The following are the distinctions: (1) In crime, there is criminal or malicious intent or criminal negligence, while in quasi-delict, there is only negligence; (2) In crime, the purpose is punishment, while in quasi-delict, indemnification of the offended party; (3) Crime affects public interest, while quasi-delict concerns private interest; {4) Incrime, there are generally two liabilities; crimi- nal and civil, while in quasi-delict, there is only civil liabil- ity; (5) Criminal liability can not be compromised or settled by the parties themselves, while the liability for quasi-delict can be compromised as any other civil liability; and . (6) Incrime, the guilt of the accused must be proved beyond reasonable doubt,: while in quasi-delict, the fault or negligence of the defendant need only be proved by preponderance (i.¢., superior or greater weight) of evidence. — 000 — *The evidence must be very clear and convincing as will engender belief in an unprejudiced mind that the accused is really guilty.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. (1094a) Meaning of specific or determinate thing. The above provision refers to an obligation specific or determinate thing. A thing is said to be specific or determinate particularly designated or physically segregated others of the same class. (Art. 1459.) EXAMPLES: (1) the watch Iam wearing. (2) the car sold by X. (3) my dog named “Terror.” (4) the house at the corner of Rizal and del Pilar Streets, (5) the Toyota car with Plate No. AAV 316 (2008). (6) _ this cavan of rice. (7) the money I gave you. Me At 116d NATURE AND EFFECY OF 35 OBLIGATIONS Meaning of 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 with particularity. UXAMPLES: (1) a Bulova calendar watch. (2) the sum of P1,000. (3) a 1995 Toyota can (4) acavan of rice. (5) a police dog. Specific thing and generic thing distinguished. (1) A determinate thing is identified by its individu- ality, The debtor cannot substitute it with another although the latter is of the same kind and quality without the con- sent of the creditor, (Art, 1244.) () A yenerie thing is identified only by its specie. The debtor can give anything of the same class as long as it js of the same kind DXAMPLES (1) 1S's obligation is to deliver to Ba Bulova calendar watch, § can deliver any watch as long as it is a Bulova with calendar Bul it’s obligationts to deliver to B a particular watch, the one S is wearing, $ cannot substitute it with another watch without B’s consent nor can B require S to deliver another watch without 5’s consent although it may be of the same Kind and vatue. (see Arts, 1244, 1246.) (2) I1S’s obligation is to deliver to B onc of his cars, the object refers to a class which in itself is determinate.36 THE LAW ON OBLIGATIONS AND Art. 1163 CONTRACTS, Here, the particular thing to be delivered is determin- able without the need of a new contract between the parties (see Art. 1349.); it becomes determinate upon its delivery, Duties of debtor in obligation to give a determinate thing. They are: (1) Preserve the thing. — In obligations to give (real obligations), the obligor has the incidental duty to take care of the thing due with the diligence of a good father of a family pending delivery. (a) 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. (b) Another standard of care. ~ However, if the law or the stipulation of the parties provides for another standard of care (slight or extraordinary diligence), said law or stipulation must prevail, (Art. 1163.) Under the law, for instance, a common carrier {person or company engaged in the transportation of persons and/or cargoes) is “bound to carry the passengers safely as far as human care and foresight can provide, using utmost (iz, extraordinary) diligence of very cautious persons, with a due regard for all the circumstances.” (Art. 1755.) In case of accident, therefore, the common carrier will be liable if it exercised only ordinary diligence or the diligence of a good father of a family. The parties may agree upon diligence which is more or less than that of a good father of a family but it is contrary to public policy (see Art. 1306.) to stipulate for absolute exemption from liability of the obligor for any fault or negligence on his part. (see Arts. 1173, 1174.) Ant Hat NATURE AND EFFECT OF 37 OBLIGATIONS (c) Factors to be considered. — The diligence required necessarily depends upon the nature of the obligation and corresponds with the circumstances of the person, of the time, and of the place. (Art. 1173.) It is not necessarily the standard of care one always uses in the protection of his property. As a general rule, the debtor is not liable if his failure to preserve the thing is not due to his fault or negligence but to fortuitous events or force majeure. (Art. 1174.) EXAMPLE: S binds himself to deliver a specific horse to B on a certain date. Pending delivery, S has the additional or accessory duty to take care of the horse with the diligence of a good father of a family, like feeding the horse regularly, keeping it in a safe place, etc. In other words, S must exercise that diligence which he would exercise over another horse belonging to him and which he is not under obligation to deliver to B. But S cannot relieve himself from liability in case of loss by claiming that he exercised the same degree of care toward the horse as he would toward his own, if such care is less than that required by the circumstances. If the horse dies or is lost or becomes sick as a consequence of S's failure to exercise proper diligence, he shall be liable to B for damages. The accessory obligation of $ to take care of the horse is demandable even if no mention thereof is made in the contract. (d) Reason for debtor’s obligation. — The debtor must exercise diligence to insure that the thing to be delivered would subsist in the same condition as it was when the obligation was contracted. Without the accessory duty to take care of the thing, the debtor would be able to afford being negligent and he would3H Hts LAW ON OBLIGATIONS AND Art, 1164 CONTRACTS: not be liable even if the property is lost or destroyed, thus rendering illusory the obligation to give (8 Manresa, 35-37.); (2) Deliver the fruits of the thing. — This is discussed under Article 1164; (3) Deliver the accessions and accessories. —- This is discussed under Article 1166; (4) Deliver the thing itself. — (Arts, 1163, 1233, 1244; as to kinds of delivery, see Arts. 1497 to 1501.); and (5). Answer for damages in a of non-fulfillinent or breach. — this is discussed under Article 1170. Se Duties of debtor in obligation to deliver = a generic thing. They are: (1) To deliver a thing which is of the quality intended by the parties taking into consideration the Purpose of the obligation and other circumstances (see Art. 1246.); and (2) To be liable for damages in case of fraud, negli- gence, or delay, in the performance of his obligation, or con- travention of the tenor thereof. (sce Art. 1170.} 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. (1095) Different kinds of fruits. The -fruits mentioned by the law refer to natural, industrial, and civil fruits. (1) Natural fruits ave the spontaneous products of the soil, and the young and other products of animals. ‘arise Art. 1164 39 EXAMPLES: Grass; all trees and plants on lands produced without the intervention of human labor. (2) Industrial fruits are those produced by lands of any kind through cultivation or labor. EXAMPLES: Sugar cane; vegetables; rice: and all products of lands brought about by reason of human labor. (3) Civil fruits are those derived by virtue of ajuridical relation. EXAMPLES: Rents of buildings, price of leases of lands and other property and the amount of perpetual or life annuities or other similar income, (Art. 442.) Right of creditor to the fruits. The creditor is entitled to the fruits of the thing to be delivered from the time the obligation to make delivery The intention of the law is te protect the interest of the obligee should the obligor commit delay, purposely or otherwise, in the fulfiUiment of his obligation, When obligation to deliver fruits arises. (1) Generally, the obligation to deliver the thing due and, consequently, the fruits thereof, if any, arises from the time of the “perfection of the contract.” Perfection, in this case, refers to. the birth of the contract or to the meeting of the minds between the parties. (Arts, 1305, 1315, 1319.) (2) Tf the obligation is subject to a suspensive condition or period (Arts. 1179, 1189, 1193.), it arises upon40 THE LAW ON OBLIGATIONS AND Art. 1164 CONTRACTS the fulfillment of the condition or arrival of the term. However, the parties may make a stipulation to the contrary as regards the right of the creclitor to the fruits of the thing. (3) Ina contract of sale, the obligation arises from the perfection of the contract even if the obligation is subject to a suspensive condition or a suspensive period where the price has been paid. (4) In obligations to give arising from law, quasi-con- tracts, delicts, and quasi-delicts, the time of performance is determined by the specific provisions of the law applicable. EXAMPLE: $ sold his horse to B for P15,000. No date or condition was stipulated for the delivery of the horse. While still in the possession of S, the horse gave birth to a colt. Who has a right to the colt? In a contract of sale “all the fruits shall pertain to the vendee from the day on which the contract was perfected.” (Ast. 1537, 2nd par.) Hence, B is entitled to the colt. This holds true even if the delivery is subject to a suspensive condition {e.g., upon the demand of B) or a suspensive period (e.g, next month) if B has paid the price. But S has a right to the colt if it was born before the obligation to deliver the horse has arisen (Art. 1164.) and B has not yet ‘paid the purchase price. In this case, upon the fulfillment of the condition or the arrival of the period, S does not have to give the colt and B is not obliged to pay legal interest on the price since the colt and the interest are deemed to have been mutually compensated. (see Att. 1187.) Meaning of personal right and real right. (1) 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. Aut 16d NATURE AND: ERFECT OF 41 OBLIGATIONS (2) Real right is the right or interest of a person over a specific thing (like ownership, possession, mortgage). without a definite passive subject against whom the right may be personally enforced, Personal right and real right distinguished. (1) In personal right there is a definite active subject and a definite passive subject, while in real right, there is only a definite active subject without any definite passive subject. (see Art. 1156.) (2) A personal right is, therefore, binding or enforce- able only against a particular person, while a real right is directed against the whole world. (see next example.) EXAMPLE: X is the owner of a parcel of land under a torrens title registered in his name in the Registry of Property. His ownership is a real right directed against everybody. There is no definite passive subject. If the land is claimed by Y who takes possession, X has a personal right to recover from Y, as a definite passive subject, the property. If the same land is mortgaged by X to Z, the mortgage, if duly registered, is binding against third persons. A purchaser buys the land subject to mortgage which is a real tight. . Ownership acquired by delivery. Ownership and other real rights over property are acquired and transmitted in consequence of certain contracts by tradition (Art. 712.) or delivery. In sale, for example, mere Agreement on the terms thereof does not effect transfer of ownership of the thing sold in the absence of delivery, actual of constructive, of the thing. The meaning of the phrase “he shall acquire no real right over it until the same has been delivered to him,” is42 ‘THE LAW ON OBLIGATIONS AND Art. 1165 CONTRACTS that the creditor does not become the owner until the specific thing has been delivered to him. Hence, when there has been no delivery yet, the proper court action of the creditor is not one for recovery of possession and ownership but one for specific performance or rescission of the obligation, (see Art. 1165.) EXAMPLE; 5 is obliged to give to B on July 25 a particular horse. Before July 25, B has no right over the horse. B will acquire a personal right against S to fulfill his obligation only from July 25, Ifthe horse is delivered on July 30, B acquires ownership or real right only from that date. But if on July 20, $ sold and delivered. the same horse to C, a third person (meaning that he is not a party to the contract between § and B) who acted in good faith (without knowledge of the said contract), C acquires ownership over the horse and he shall be entitled to it as against B.S shall be liable to B for damages. (Art. 1170.) 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 fortuitous event until he has effected the delivery. (1096) Remedies of creditor in real obligation. (1) Ina specific real obligation (obligation to deliver a determinate thing), the creditor may exercise the following Veh Lbs . NATURF AND EBFECT OF 4B OBLIGATIONS: remedies or rights in case the debtor fails to comply with his obligation: (a) demand specific performance or fulfillment (if it is still possible) of the obligation with a right to indemnity for damages; or. (b) demand rescission or cancellation (in certain cases) of the obligation also with a right to recover damages (Art. 1170.); or {c) demand payment of damages only, where it is the only feasible remedy. In an obligation to deliver a determinate thing, the very thing, itself must be delivered. (Art. 1244.) Consequently, only the debtor can comply with the obligation. This is the reason why the creditor is granted the right to compel the debtor to make the delivery. (Art. 1165, par. J.) It should be made clear, however, that the law does not mean that the creditor can use force or violence upon the debtor. The creditor must-bring the matter to court and the court will be the one to order the delivery. EXAMPLE: S sells his piano to B for P20,000. If S refuses to comply with his obligation to deliver the piano, B can bring an action for fulfillment or rescission of the obligation with the payment of damages in either case. (Art. 1191.) In case of om, the parties must return to each other what they have received. (Art. 1385.) the rights to demand fulfillment and rescission with lamapes (see Art. 1170.) are alternative, not cumulalive, ie., the election of one is a waiyer of the right to resort to the other. (see Art. 1191.) B may bring an action for damages only even if this is not expressly mentioned by Article 1165. tome Art, 1170.) () A yeneric real obligation (obligation to deliver a wenerie (inp), on the other hand, can be performed by a