OBLIGATIONS AND

CONTRACTS
LECTURE 3
By: Atty. Wilfred Francis B. Martinez
NATURE AND EFFECTS OF
OBLIGATIONS
OBLIGATIONS TO GIVE
Article 1163

 Article 1163 – Every person obliged to give something

is also obliged to take good 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.
 What is “diligence of a good father of a family”?
 It means the ORDINARY DILIGENCE, or that degree of care
which a person of prudent mind will exercise in the care of
his own property, and which degree of care depends upon the
nature of the obligation, the object, and the circumstances of
persons, time and place.
 In other words, the care one would use on his own property.
Article 1163

 Example:
X and Y enters into a contract of sale wherein X will
sell to Y his car for 1 million pesos on 1 January 2019.
Under this contract, Y will give a down payment of
P500,000.00 on 15 January 2019. For his part, X will
deliver the car within 5 days upon receipt of the down
payment.
 What are the obligations of X?
1. To deliver the car to Y on 5 days after X gives the down
payment; and
2. To keep the car safe while waiting for the down
payment.
Article 1163

 Example:
 Jonathan went to the USA for business so he left his
Rolex Watch with Mark. Jonathan instructed Mark to
return the Rolex Watch to him once he gets back.
 What are the obligations of Mark?
1. To deliver the Rolex Watch to Jonathan once he gets
back.
2. To keep the Rolex Watch safe until he can return the
same to Jonathan.
Article 1163

 What does “unless the law or the stipulation of the

parties requires another standard of care” mean?
 Ifthe law imposes a higher form of diligence, then the
parties cannot agree to have a lower standard. (ex.
Extraordinary diligence required of common carriers –
Article 1733)
 The law says that ordinary diligence is the default
standard of care. Despite this, however, the parties can
still agree that a higher degree of diligence can be
used.
Article 1164

 Article 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.
 When is a debtor obligated to deliver the thing?
 As a general rule, upon the perfection of the contract.
 Exception, if the parties themselves agree on a different
period.
 Example:
X and Y entered into a contract of sale wherein X will sell
to Y his car for 1 million pesos on 1 January 2018. Under
this contract, Y will give a down payment of P500,000.00
on 15 January. For his part, X will deliver the car within 5
days upon receipt of the down payment.
Article 1164

 Example
 On 1 January 2019, A and B enters into a contract of
sale wherein B will sell to A his condominium unit for 5
million pesos. This condominium unit is being rented by
Mr. Takashi for P25,000.00 monthly.
 Under this contract, A will give a down payment of 1
million pesos on or before 15 January. For his part, B
will completely transfer ownership to A within 15 days
upon receipt of the down payment (30 January).
 If B fails to completely transfer ownership to A by 30
January, then A will have the right of action against B
for the condominium unit, as well as the rentals paid
by Mr. Takashi starting January 30 onwards.
Article 1164

 What does “However, he shall acquire no

real right over it until the same has been
delivered to him” mean?
 Personal Right: A right enforceable against a
specific person for the fulfillment of an
obligation.
 Real Right: A right pertaining to a person over a
specific thing and is enforceable against the
whole world. (example: right of ownership)
Article 1164
 What does “fruits of the thing” mean?
 The fruits mentioned by law refer to natural, industrial, and civil
fruits.
 Types of Fruits:
 Natural Fruits – Those that are spontaneously produced by the soil,
the young of animals, and other animal products.
 All trees and plants produced without intervention of human labor.
 Industrial Fruits – Those that are produced by lands of any kind
through cultivation or labor.
 Example: Sugar canes, vegetables, rice, corn, and other produce
made through human labor.
 Civil Fruits – Those derived by virtue of a juridical relation.
 Example: Rent
Article 1165
 Article 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.
Article 1165
 In obligations to give, a thing may be determinate or
generic.
 It is determinate when the object is particularly
designated or physically segregated from all others of the
same class.
 It is generic or “indeterminate” when the object is
designated merely by its class or genus without any
particular designation that separates it from others of its
class.
Article 1165 (in relation to Articles 1170 and 1246)

 Rights of a creditor in Obligations to Give:

 If the thing is determinate:
 Specific Performance (Article 1165)
 To recover damages in case of breach of the
obligation (Article 1170)
 If the thing is generic / indeterminate:
 Ask for performance of the obligation (1246)
 Ask that the obligation be complied with at the
expense of the debtor (Article 1165)
 To recover damages in case of breach of the
obligation (Article 1170)
Article 1165 – Example – Class Participation (SW4)

Instructions: Identify whether or not the objects of the

obligations below are determinate or generic.
1. Maria is a graphics design student who badly needed a
laptop for her studies. Pedro, an upper-classman of Maria
offered to sell his 2 year old Core i5 Dell laptop with
serial number DL12345 (still in excellent condition) for
only P20,000.00.

2. Takashi is a Japanese Businessman visiting Manila for a

business deal. Instead of renting a hotel room, Takashi
rents the Condominium unit of Benjamin located at Unit
1515 ABC Grand Towers, Global City for P25,000.00 a
month for two months.
Article 1165 – Example – Class Participation (SW4)

3. Juan owns a restaurant in Pasig City. Pedro, who owns a

farm, obligated himself to provide Juan with a 1000 eggs
twice a month.

4. Lorenzo went to an Appliance Store and saw a beautiful

55 Inch, 4K Ultra HD Sony Bravia OLED TV. He decided to
purchase it for P150,000.00.
Article 1165
 What if the thing is lost due to a fortuitous event (act of
God)
 If the thing is determinate:
 The obligation is extinguished.
 As a general rule, the debtor cannot be held liable
for the loss.
 If the thing is generic:
 Since generic things can still be replaced, the
debtor is still liable to fulfill his part of the
obligation.
 “Genus never perishes” (genus nunquam perit)
Article 1165
 What does the last paragraph of Article 1165 mean? (“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”)
 This means that if the obligor is already in delay in the
delivery of the thing, the loss of the same (even if it is a
fortuitous event) will make the obligor liable.
 The same rule is applicable if he has promised the same
thing to two or more separate people. The reason behind
this is that the fulfillment of one obligation will result in
the breach of the other. To deter this practice, the law
will make the obligor liable for the loss of the thing.
Article 1166
 Article 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.
 Accessions are the fruits of a thing or additions to or
improvements upon a thing. (ex. House on the land, the
rent from a lessee, or the trees that is growing on the
land)
 Accessories are all things joined to or included with the
principal thing for its embellishment, better use, or
completion. (ex. The radio of a car)
Article 1166
 Note that this rule is only applicable if the parties
themselves did not exclude the accessories from their
agreement.
 Note further that if the obligation is to deliver an
accessory or accession, it does not mean that there is
also an obligation to deliver the principal thing.
Other Relevant Provisions (In relation to obligations
to give)
 Article 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.
 Article 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.
Summary of Rights and Duties
Rights of the Obligee / Creditor:
 If the obligation involves a determinate thing:
 To compel specific performance; and
 To recover damages.
NOTE: If specific performance is impossible, the only remedy
available is to recover damages.
 If the obligation involves a generic thing:
 To ask for performance of the obligation;
 To ask that the obligation be complied with at the expense of the
debtor; and
 To recover damages in case of breach of the obligation.
Summary of Rights and Duties
Duties of a Obligor / Debtor:
 If the obligation involves a determinate thing:
1. To deliver the thing which he has obligated himself to deliver;
2. To take care of the thing which he has obligated himself to give;
3. To take care of the thing with the proper diligence of a good
father of a family;
4. To deliver all accessions and accessories; and
5. To pay damages in case of breach of the obligation.
 If the obligation involves a generic thing:
1. To deliver a thing which must be neither of superior nor inferior
quality; and
2. To pay damages in case of breach of the obligation.
Thank you.