Subject: LAW 1 (THE LAW ON OBLIGATIONS AND CONTRACTS)

Reporters:
Estacio, Dimple M.
Estrella, Wendelyn T.
Course: BSBA FM3 Sat/Sun

Topic: Chapter 2 NATURE AND EFFECT OF OBLIGATIONS

Art. 1166 The obligation to give a determinate thing includes that of delivering all its
accessions and accessories, even though they may not been mentioned. (1037a)

Meaning of accessions and accessories

Accessions are the fruits of a thing or additions to improvements or a thing (the
principal).
Example:
Houses or trees on a land; rents of a building

Accessories are things joined to or included with the principal thing for the
latter’s embellishment, better use, or completion.
Example:
Key of a house; frame of a picture

Note that while accessions are not necessary to the principal thing, the accessory and
the principal thing must go together. Both can exist only in relation to the principal.

Right of creditor to accessions and accessories

The general rule is that accessions and accessories are considered included in the
obligation to deliver a determinate thing although they may not have been
mentioned. This rule is based on the principle of law that the accessory follows
the principal. In order that they will be excluded, there must be a stipulation to
that effect.

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)

It contemplates 3 situations:
1. The debtor fails to perform an obligation to do; or
2. The debtor performs an obligation to do but contrary to the terms
thereof; or
3. The debtor performs an obligation to do but in poor manner.

Remedies of creditor in positive personal obligation

1. 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. (Art 1170)
2. In case the obligation is done in contravention of the terms of the same
or poorly done, it may be ordered (by the court) that it be undone if it is
still possible to undo what was done.
Performance by a third person
A personal obligation to do, like a real obligation to deliver a generic thing, can be
performed by a third person. While the debtor can be compelled to make the delivery of a
specific thing (Art. 1165), a specific performance cannot be ordered in a personal obligation to
do because this may amount to involuntary servitude which, as a rule, is prohibited under our
Constitution. (Art. III, Sec. 18 [2] thereof.

Example:
(1) X binds himself to construct a house B. Among other things, it was stipulated
that the house shall have 3 bedrooms, each of which to have an area of 5
meters by 4 meters and that the kitchen shall be painted.

If X does not construct the house, B may ask C to contract the house at the
expense of X.
(2) Suppose X constructed the house but the size of the bedroom is not 5
meters by 4 meters or the kitchen is not painted all white.

In this case, B can ask to have it done according to the specifications. If X

refuses, the obligation may be performed by C at the expense of X.

(3) Now, if the kitchen was painted white but the painting was poorly done, B
may ask X that it be undone or, in case of X’s refusal, he may ask C to paint
the kitchen at the expense.

In no case, however, can X be compelled against his will to comply with his
obligation should he refuse to do so.

(4) If the obligation contracted by X is to sing in the night club of B and he fails
to comply with his obligation, the performance of the same by another
would be impossible or would result to be different that the obligation could
not be considered performed.

Here, the personal qualification of X is the determining motive for the contract.
In this case, the only practical remedy of B is indemnification for damages.

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

In an obligation not to do, the duty of the obligor is to abstain from an act. Here, there is no
specific performance. The very obligation is fulfilled in not doing what is forbidden. Hence, in
this kind of obligation the debtor cannot be guilty of delay. (Art, 1169)

Example:
Kristian bought a land from Bryan, it is stipulated in the contract that Bryan will
not build a fence on a certain portion of his land adjoining that sold to Kristian. If Bryan
constructs a fence in violation of the agreement, Kristian can bring an action to have the fence
removed at the expense of Bryan.

ART. 1169. Those obliged to deliver or o do judicially or extra-judicially 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 declares; 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 the demand would be useless, as when the obligor has rendered it beyond his
power to perform.

In reciprocal obligation, 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 other begins. (1100a)

Meaning of delay
The word delay, as used in the law, is not to be understood according to its meaning in
common parlance. A distinction, therefore, should be made between ordinary delay and legal
delay in the performance of an obligation.

1. Ordinary delay is merely the failure to perform an obligation on time.

2. Legal delay or default or mora is the failure to perform an obligation on time which
failure constitutes a breach of the obligation.

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 of the delay on the part of the creditor to accept the performance
of the obligation; and
3. Compensation morae or the delay of the obligors in reciprocal obligations (like in
sale)

No delay in negative personal obligation

In an obligation not to do, non-fulfillment may take place but delay is impossible for the
debtor fulfills by not doing what has been forbidden him. (Art. 1168)

Requisites of delay or default by the debtor

The effects:
1. Failure of the debtor to perform his obligation on the date agreed upon;
2. Demand made by the creditor upon the debtor to comply with his obligation
which demand may be either judicial or extra-judicial; and
3. Failure of the debtor to comply with such demand.

Effects of delay

1. Mora solvendi
The following are the effects:
a. The debtor is guilty of breach or violation of the obligation;
b. He is liable to the creditor for interest or damages. In the absence of extra-
judicial demand, the interest shall commence from the filing of the
complaint; and
c. He is liable even for a fortuitous event when the obligation id to deliver a
determinate thing. However, if the debtor can prove that the loss would
have resulted just the same even if he had not been in default, the court may
equitably mitigate or reduce the damages.
2. Mora accipiendi
the effects are the following:
 a.The creditor is guilty to breach of obligation;
b.He is liable for damages suffered, if any, by the debtor;
c.He bears the risk of loss of the thing due;
d.Where the obligation is to pay money, the debtor is not liable for interest
from the time of creditor’s thing or sum due.
3. Compensatio morae
The delay of the obligor cancels the delay of the oblige and vice versa. Legally
speaking, there is no default or delay on the part of both parties.

When demand is not necessary to put debtor in delay

As a general rule, 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. Without
such amount, the effect of default will not arise. The exceptions are mentioned below.

1. When the obligation so provides.

Example:
D promised to pay C the sum of ₱ 20,000.00 on or before November 30
without the need of any demand. Therefore, D fails to pay on November 30, he is
automatically in default.
In this case, the parties stipulate to dispense with the demand.
The mere fixing of the period is not enough. The arrival of the period
merely makes the obligation demandable. Before its arrival, the creditor cannot
demand performance. The obligation must expressly so declare that demand is
not necessary or must use words to that effect, as for instance, “the debtor will
be in default” or “I will be liable for damages”.

2. When the law provides.

Example:
a. 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.
b. The partner is liable for the fruits of the thing he may have promised to
contribute to the partnership from the time without the need of any
demand.
3. When time is the essence.
Example:
The delivery of balloons on a particular date when a children’s will be
held; the making of a wedding dress where the wedding is scheduled at a certain
time; payments of the money at a particular time so that the creditor could pay
off certain debts due on the same date; the delivery of a car to be used in a trip
at a particular time.
4. When demand would be useless.
Example:
S obliged himself to deliver a specific horse to B on September 5. Though
S’s negligence or deliberate act, or by reason of fortuitous event for which S has
expressly bound himself responsible, the horse died on September 2.
5. When there is performance by a party in reciprocal obligations.
In case of reciprocal obligations, the performance of one is conditioned
upon the simultaneous fulfillment on the part of the other. So 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. This is compensatio morae.
From the moment, however, a party fulfills or is ready to fulfill his
obligation, delay by the others begin.
Example:
S agreed to sell to B his television set for ₱10,000.00. The obligation of S
is to deliver the television set while B, to pay ₱10,000.00.
Since there is no set for performance of their respective obligations, it is
understood that it must be simultaneous. S cannot demand payment if he
himself cannot deliver the television set. From the moment S delivers the
television set, B is in default if he does not pay S without the need of any
demand.