Title I

Chapter 2

NATURE AND EFFECTS OF

OBLIGATIONS

Articles 1163 -1169

Article 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)
***

This article applies to a specific real obligation or an

obligation to give a specific or determinate object.
What is a specific or determinate thing?
A thing that is particularly designated or
physically segregated from the same class
to which it belongs.

What is a generic or indeterminate thing?

The thing refers only to a class or genus to
which it belongs and cannot be identified
with certainty.
 Generic Specific
Samsung Cellphone Samsung Cellphone
with Serial No. J10000
Laptop Computer The laptop computer you
received on your graduation.
Kawasaki Rouser 180 Kawasaki Rouser 180 with
plate no. AA14344.

A parcel of land located at A parcel of land located at

Session Road. Session Road covered by
Title No. T-00001.
Nike shoes The Nike shoes you are
wearing.
What are the duties of a debtor in a specific

real obligation (obligation to give a determinate

thing) ?
1. Preserve the thing

2. Deliver the fruit

3. Deliver the thing itself

4. Deliver its accessions and accessories

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

breach
Suppose D promised to sell and deliver to C
his horse named “Red” on December 25,
2020…
Not this Red…
But this Red…
What are D’s obligations?
1. Take good care of Red;

2. If Red would have a young, then deliver it to C;

3. Deliver Red itself on or before Dec. 25, 2020;

4. Deliver the accessions and accessories (if any); and

5. Pay damages in case of non-fulfillment or breach.

What are the duties of a debtor in a generic real
obligation (obligation to deliver a generic thing)?

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 (Art.
1246.)
2. To be liable for damages in case of fraud, negligence, or
delay, in the performance of his
obligation, or contravention of the tenor thereof, (Art.
1170.)
Suppose D promised to sell and deliver to C
one of his horses on December 25, 2020…
Not one of these…
But one of these…
What are D’s obligations?
1. To deliver a horse which is of the quality
intended by C and D taking into consideration
the purpose of the obligation and other
circumstances (Art. 1246.)
2. To pay damages in case of fraud, negligence,
or delay, in the performance of his
obligation, or contravention of the tenor
thereof, (Art. 1170.)
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. (1095)
What are the different kinds of fruits?

1. Natural fruits – spontaneous products of the

soil or the young and other products of animals.

2. Industrial fruits – produced by lands of any

kind through cultivation or labor.

3. Civil fruits – derived by virtue of a juridical

relation.
When does the obligation to deliver
fruits arise?
From the time of the “perfection of the contract
the obligation to deliver the thing due and,
consequently, the fruits thereof, if any;

But if the obligation is subject to a suspensive

condition or period, it arises when the condition is
fulfilled or the term arrived.
 Personal Right vs. Real Right

Personal Right Real Right

There is a particular creditor There is a particular creditor

and a particular debtor. but there is no particular
debtor.

Binding or enforceable only Binding or enforceable

against a particular person. against the whole
world.
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.
(1096)
What are the remedies of a creditor in a real
obligation (generic or specific)?

1. Demand fulfillment (if still possible) of the obligation

specific performance) plus indemnity for damages;

2. Demand rescission or cancellation of the obligation (if

delivery of the object is no longer feasible) plus indemnity
for damages; or
3. Demand payment of damages if this is the only feasible
remedy.
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.(1097a)

***
The rule is “accessory follows the principal”.
 What are accessions and
accessories?
Accessions - the fruits of a thing or additions to or
improvements upon a thing (the principal).
Principal Object Accession

Land Crops

Taxi Income

Shares of stocks Dividends

Accessories - things joined to or included with the
principal thing for its embellishment, better
use, or completion.

Principal Object Accessory

Cellphone Charger
Laptop Computer Power Cable
Car Spare Tire
Article 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)
***
This applies to a positive personal obligation.
Situations where Article 1167 is applicable
and remedies available to the creditor:
 Situation Creditor’s Remedy
Debtor fails to do his obligation. Have the obligation performed by
himself or by another at the debtor’s
expense plus indemnity for damages.
(Art. 1170.)
If personal considerations are involved,
then damages only.
Debtor performs an obligation to do but To undo the obligation and have it done
contrary to the terms thereof. properly (if still possible) plus
indemnity for damages.
If can no longer be undone, then
damages only.
Debtor
3. performs an obligation to do but To undo the obligation and have it done
in a poor manner. properly (if still possible) plus
indemnity for damages.
If can no longer be undone, then
damages only.
Article 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. (1099a)
***
This applies to a negative personal obligation.
If the debtor did what he is supposed not to
do, then the creditor can demand that it be
undone.
Road right of way
But when you woke up one morning you
found these…
Article 1169. Those obliged to deliver or to do something incur in delay
from the time the obligee judicially or extrajudicially demands from
them the fulfillment of their obligation. However, the demand by the
creditor shall not be necessary in order that delay may exist:
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it
appears that the designation of the time when the thing is to be
delivered
or the service is to be rendered was a controlling motive for the
establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it
beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does
not comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills his
obligation, delay by the other begins. (1100a)
 Meaning of Delay.
Ordinary delay - merely the failure to perform an
obligation on time.
Legal delay or default or mora - the failure to
perform an obligation on time which failure
constitutes a breach of the obligation.
 What are the kinds of delay or default?
1. Mora solvendi or the delay on the part of the debtor to
fulfill his obligation (to give or to do)
2. Mora accipiendi or the delay on the part of the creditor to
accept the performance of the obligation; and
3. Compensatio morae or the delay of the obligors in
reciprocal obligations (like in sale), i.e., the delay of the
obligor cancels the delay of the obligee, and vice versa.
General Rule:
“No demand, no delay/default”

The debtor is in delay or default only from the

moment the creditor makes a demand, judicially or
extra-judicially, to perform the obligation.
Exceptions to the rule:
1. When the obligation so provides.
D borrowed P5,000 from C and promised to
pay on or before December 25 without need of
demand.
If D fails to pay on December 25, then he is
automatically in default.
Here, the parties agreed to do away with the
demand.
2. When the law expressly so provides.

Under the law, taxes should be paid on or before a

specific date; otherwise, penalties and surcharges
are imposed without the need of demand for
payment by the government.
 3. When time is of the essence.

Delivery of learning modules in time for the start

of classes.
Delivery of medical supplies in time for a
scheduled surgery.
Making of a dress in time for the debut party.
4. When demand would be useless,
as when the obligor has rendered it
beyond is power to perform.

S promised to sell and deliver a

specific cellphone to B on December 25. If
on November 1 S sold and delivered the
cellphone to X, then no need for B to demand
delivery to put S in default. This is because
when S sold the cellphone to X he rendered
his obligation to B already beyond his power
to perform.
5. In a reciprocal obligation when a party already
performed his obligation.

In case of reciprocal obligations, the performance of one

is conditioned upon the simultaneous fulfillment of
his obligation on the part of the other.
Example:

S agreed to sell and deliver to B his car for P50,000.

The obligation of S is to deliver the car while that of B is to pay
P50,000.

Because the parties fixed no date of performance of their

respective obligations, it is understood that it must
be simultaneous. Hence, S cannot demand payment if he
himself cannot deliver the car. But from the
moment S delivers the car, B is in default
if he does not pay S without the need of any
demand.