OBLICON IBAYA, JOHN ANDREW C.

BSBA HRM 1-3

Nature and Effects of Obligations (Summarized)

• Definition and distinction between specific real obligation vs. generic real obligation
• Duties of debtor in a specific real obligation:
- To preserve the thing
- To deliver the fruits of the thing
- To deliver accessions and accessories
- To deliver the thing itself
• Remedies of creditor in a real obligation:
- For specific real obligation: compel delivery or damages
- For generic real obligation: have it complied at debtor's expense or damages
• Duties and remedies for positive personal obligations
• Duties and remedies for negative personal obligations
• Distinction between ordinary delay vs. legal delay (mora)
• Grounds for liability for damages: fraud, negligence, delay, contravention of obligation
• Definition and exceptions to application of fortuitous event
• Usury and rules on payment of interest
• Presumptions on payment of interest and prior installments
• Remedies of creditor to enforce payment: specific performance, pursue debtor's
properties, exercise debtor's rights, impugn fraudulent acts
• Transmissibility of rights acquired from obligations

The document provides a comprehensive discussion on the nature and effects of different
types of obligations under the Civil Code, including the duties of debtors and creditors,
remedies available, grounds for damages, rules on fortuitous events, usury, presumptions,
and enforcement of rights.

here are the definitions, uses and meanings of the key articles mentioned in
the file:
OBLICON IBAYA, JOHN ANDREW C.
BSBA HRM 1-3

Article 1163 - Defines the duty of care required of a debtor who is obliged to give something.
The debtor must take care of the thing with the proper diligence of a good father of a family,
unless the law or agreement requires a different standard of care.
Use: Establishes the level of diligence the debtor must observe in preserving the thing to be
delivered.

Article 1164 - States that the creditor has a right to the fruits of the thing from the time the
obligation to deliver it arises. However, the creditor only acquires a real right over the thing after
actual delivery.
Use: Determines when the creditor can claim rights over the fruits/proceeds of the thing, and the
transition from personal to real rights.

Article 1165 - For specific real obligations, allows the creditor to compel delivery of the
determinate thing. For generic obligations, allows asking compliance at the debtor's expense.
Use: Provides remedies to creditors based on whether the obligation involves a specific or
generic thing.

Article 1166 - The obligation to deliver a determinate thing includes delivering all accessions and
accessories, even if not mentioned.
Use: Requires the debtor to deliver not just the main thing but anything attached/included with it.

Article 1167 - If the debtor fails to do the obligation, it shall be done at the debtor's cost. What
has been poorly done may be undone.
Use: Gives creditor remedies of substitute performance at debtor's cost for improperly done
obligations.

Article 1168 - If the debtor does a prohibited act, it shall be undone at the debtor's expense.
Use: Provides remedy of undoing prohibited acts at debtor's cost for negative obligations.
OBLICON IBAYA, JOHN ANDREW C.
BSBA HRM 1-3
Article 1169 - Defines when delay/non-performance constitutes legal delay/mora based on
creditor's demand or circumstances.
Use: Distinguishes mora from ordinary delay to determine debtor's liability for damages.

Article 1170 - Debtor liable for damages due to fraud, negligence, delay or contravention of
obligation's tenor.
Use: Grounds for creditor to claim damages against debtor.

Article 1171 - Any waiver of action for future fraud is void.

Use: Prohibits debtors from avoiding liability for future fraudulent acts.

Article 1172 - Liability for negligence may be regulated by courts based on circumstances.
Use: Gives courts discretion in determining liability and extent of damages for negligence cases.

Article 1173 - Defines negligence as omission of diligence required by obligation's nature and
circumstances.
Use: Sets parameters for determining if debtor's conduct constitutes negligence.

Article 1174 - Defines fortuitous event and exceptions when debtor remains liable despite its
occurrence.
Use: Provides guidelines on when debtors can use fortuitous events as defense against non-
performance.

Article 1175 - "Usurious transactions shall be governed by special laws."

Definition: Usury refers to charging excessive or illegally high interest rates on loans beyond
what is allowed by law.
Use: This article defers to special laws that regulate and prohibit usurious lending practices.
OBLICON IBAYA, JOHN ANDREW C.
BSBA HRM 1-3
Article 1176 - Provides presumptions about payment based on receipts issued:
Para 1: "The receipt of the principal by the creditor without reservation with respect to the
interest, shall give rise to the presumption that said interest has been paid."
Para 2: "The receipt of a later installment of a debt without reservation as to prior installments,
shall likewise raise the presumption that such installments have been paid."
Definition: Establishes rebuttable presumptions about interest and installment payments being
covered based on receipts issued.
Use: Allows inferring certain payments were made from the face of receipts, unless rebutted.

Article 1177 - "The creditors, after having pursued the property in possession of the debtor to
satisfy their claims, may exercise all the rights and bring all the actions of the latter for the same
purpose, save those which are inherent in his person; they may also impugn the acts which the
debtor may have done to defraud them."
Definition: Provides remedies for creditors to enforce claims against debtors.
Use: Allows creditors to pursue debtor's properties, exercise debtor's rights, and nullify debtor's
fraudulent acts after exhausting regular remedies.

Article 1178 - "Subject to the laws, all rights acquired in virtue of an obligation are transmissible,
if there has been no stipulation to the contrary."
Definition: Establishes that rights arising from obligations are generally transferable to others.
Use: Allows creditors to assign/transfer their rights to third parties, unless prohibited.

EXAMPLE SITUATION IN THE ARTICLES 1163-1174

Article 1163:
- Joana borrowed her neighbor's antique vase to use for a party. She has a duty under this article
to take proper care of the vase with the diligence of a good father of a family.

Article 1164:
OBLICON IBAYA, JOHN ANDREW C.
BSBA HRM 1-3
- Miguel promised to deliver his mango farm to Liza on July 1. Liza has the right to the mango
fruits harvested from July 1 onwards. But she only acquires real rights over the farm after Miguel
actually delivers it to her.

Article 1165:
- Jose promised to give Aling Nena his pet dog Brownie. If Jose fails to deliver Brownie, Aling
Nena can compel him through court to deliver that specific dog (specific real obligation).
- Berto promised to deliver 1 ton of rice to the grocery store. If he fails, the store can ask another
supplier to deliver the 1 ton of rice at Berto's expense (generic obligation).

Article 1166:
- Juan promised to give his sister the family house. When delivered, he must also give the
appliances and furniture inside as accessions.

Article 1167:
- Ben hired Joe to paint his bedroom green. If Joe painted it red instead, Ben can hire another
painter to repaint it the correct green color at Joe's expense.

Article 1168:
- Ana rented out her condo unit to Bea but prohibited her from keeping pets. If Bea brought in a
dog anyway, Ana can force Bea to remove the dog at her own cost.

Article 1169:
- Lisa failed to pay her credit card bill on due date. Once the bank demands payment, her
continued failure will now constitute legal delay or mora.

Article 1170:
- Carlo promised to deliver Lyka's birthday cake on time but deliberately did not, causing her
party delays. Lyka can claim damages for Carlo's delay.
OBLICON IBAYA, JOHN ANDREW C.
BSBA HRM 1-3

Article 1171:
- A contract clause saying the bank won't be liable for future fraudulent charges is void under this
article.

Article 1172:
- A tenant inadvertently caused minor damage in the rental unit. The court can regulate the extent
of landlord's claim depending on circumstances.

Article 1173:
- A doctor failed to observe proper standards in treating a patient based on the nature of illness
and circumstances. This can constitute negligence.

Article 1174:
- A seller failed to deliver goods because they were burned in an accidental fire. This fortuitous
event may exempt the seller from damages, unless an exception applies.

Article 1175 (Usury):

This article refers to special laws governing usurious transactions involving excessive interest
rates on loans. An example would be a money lender charging 50% interest per month on a loan,
which violates usury laws.

Article 1176 (Presumptions on Payment):

Carlos borrowed $5,000 from Liza. When he paid back the $5,000, Liza issued a receipt simply
acknowledging receiving $5,000 without mentioning interest. There is a presumption that any
interest owed was also paid.
Maria paid the 4th installment on her loan. The bank issued a receipt for that 4th installment
only, without reserving rights on prior unpaid installments. There is a presumption the earlier 1st,
2nd, 3rd installments were paid.
OBLICON IBAYA, JOHN ANDREW C.
BSBA HRM 1-3

Article 1177 (Creditor's Remedies):

David owes Paul $20,000 but has no properties to cover it. Paul can exercise David's rights to
collect $10,000 owed to David by a third party.
Linda defrauded her creditors by transferring property to her relatives. Her creditors can ask the
court to rescind those transfers as fraudulent.

Article 1178 (Transmissibility of Rights):

Eric signed a promissory note lending $8,000 to Frank. Eric can endorse and transfer that
promissory note and rights to collect to another person.
Unless prohibited, Maria can pass on her rights under an insurance policy to her heirs after her
death.