Nature and Effect of Obligation (Article 1163 - 1178)

Article 1163

a person obliged in a real obligation, is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or stipulation requires another standard of care.

Duties of Debtor in Real Obligation (Specific thing)

• To take care or preserve the thing. With the proper diligence of a good father of a family or another standard of care as agreed by the parties or as provided by the law.

• To deliver the fruits of the thing

• To deliver the accessions and accessories(article 1166) Unless stipulated.

• To deliver the thing itself

• Answer for damages in case of non-fulfillment or breach.

Duties of debtor in Real Obligation (Generic thing)

• To deliver a thing of the quality intended by the parties.

• to take care or preserve the thing with the proper diligence of a good father of a family or another standard of care as agreed by the parties or as provided by law.

• To be liable for damages in case of fraud, negligence or delay.

Article 1164

The creditor has a right to the fruits of the thing the moment the obligation to deliver arises. No real right until it has been dellivered to him.

Different kinds of fruits

• Natural fruits - products of the soil, and animals.

• Industrial fruits - produced by lands through cultivation or labor.

• Civil fruits - derived from juridical relation

Distinguish Personal Right and Real Right

Personal right - is the right or power of the creditor to demand from another person debtor. ( To a human)

Real right - a right or intrest of a person over a specific thing without a definitie passive subject. (To a thing)

Article 1165

Remedies of the creditor in real obligation.
- When what is to delivered is a determinate thing the creditor may compel the debtor for delivery.
- If the thing is generic or indeterminate he may ask the obligation to be complied at the expense of the debtor.
- if the debtor delays, or promised to deliver the same thing to two or more persons who do not have the same intrest, he shall be responsible for fortuitous event.

Remedies of creditor in real obligation (specific thing)

• To demand specific performance (if still possible) with damages.

• To demand recission or cancellation of the obligation with damages.

• To demand for indemnification or payment of damages when it is the only feasible remedy.

• To demand for the delivery of the accessions and accessory of the specific thing even if they weren’t mentioned (Article 1166).

Remedies of the creditor in real obligation (generic thing)

• To demand specific performance with damages

• To demand the debtor that the thing be delivered at the expense of debtor.

• To demand indmenification or payment of damages when it is the only possible remedy.

Article 1166

(ONLY APPLICABLE TO DETERMINATE THING)
- Obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned.

Article 1167

Talks about 3 situations and the remedies of creditor in a positive personal oblgiation.

a.) Debtor/obligor fails to perform an obligation - has the right to have the obligation fulfilled by the expense of the debtor and to recover damages. EXCEPTION: when personal consideration is involved like to sing or dance, the obligation is practically impossible to be performed. He can only ask for damages.

If the debtor fails or refuses to perform service, the creditor cannot compel/demand specific performance because involuntary servitude.

b.) Debtor performs an obligation to do but contrary to the terms thereof - (1) creditor can demand fpr specific performance. (2) the creditor has the right to have the obligation performed by another at the expense of the debtor and recover damages.

c.) The debtor performs an obligation to do but in poor manner - it can be undone at the expense of the debtor and ask for damages.

Article 1168

When the obligation consists of negative personal oblgiation, and the obligor does what has been forbidden him, it shall be undone by his expense. (There is no legal delay).

Article 1169

The debtor will be in legal delay once the creditor has made a demand either judicial or extrajudicial.

EXCEPT:
- When it is expressly so declares e.g “failure to pay on the due date automatically constitutes default”
- Time is of the esscence e.g “The cake be delivered on the date of the birthday”
- Usless demand because it would be pointless if the performance is impossible.
Reciprocal obligation : neither party is in legal delay unless one is ready to perform.

Kinds of delay or default or mora

(1) Mora Solvendi - delay by the debtor to fulfill the obligation
(2) Mora Accipiendi - delay by the creditor to accept the performance of the obligation
(3) Compensatio morae - delay by both.

Requisites of delay or default by debtor

• The obligation is due and demandable

• failure of the debtor to perform his postive obligaiton on the date agreed upon

• demand made by the creditor upon the debtor to comply with his obligation, which can be judicial or extrajudicial

• Failure of the debtor to comply with such demand.

Article 1170

Those in the performance of their obligation are guilty of fraud, negligence, or delay an those who in any manner contravene the tenor thereof, are liable for damages.

Grounds for liability

(1) Fraud (dolo) - Deliberate or intentional evasion of fulfillment of the obligaiton.
a.) Dolo incidente ( Incidental fraud) - not the reason for the consent. The party would have entered into the contract anyway, but perhaps under different terms. eg: lower prices.
b.) Casual Fraud ( Dolo Cuasante) - more serious, Without it, the party would not have agreed to the contract at all.
(2) Negligence (fault or cupa) - Voluntary act or omission, there being no malice, prevents the normal fulfillment of the obligation.
(3) Delay (mora)
(4) Contravention of the terms of the oblgiation.

Article 1171

Responsibility arising from fraud is demandable in all oblgiations. Any waiver of an action for future fraud is void.

Article 1172

Responsibilities arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts according to the circumstances.

Types of negligence

Contractual negligence - Breach of an existing contract due to negligence.
Civil negligence - A negligent act that creates an obligation even without a pre-existing contract.
Criminal negligence - A negligent act that constitutes a crime under penal law.

Article 1173

Diligence depends on the person, time, place, and nature of the duty. If law or contract is silent, the default standard is ordinary diligence (diligence of a good father of a family).

Article 1174

Talks about fortuitous events that the debtor should not be responsible for those events which could not be forseen, where inevitable.

Requisites of a fortuitous event

• The event must be independent of the human will or atleast the debtors will

• The event could not be forseen or if forseen inevitable.

• The event must be of such a character as to make it impossible for the debtor to meet his obligation in a normal manner.

• The debtor must be free from any participation.

Article 1176

The creditor only indicated in the receipt that the amount paid by the debtor is for the principal. In this scenario,the interest is presumed to be paid.

The creditor indicated payment of an installment without reservation to the prior installments. In this scenario,

the previous installments are presumed to be paid (for this to apply, the receipt must state a particular installment)

A presumption is an inference of fact not known from its usual connection.

Conclusive presumption (cannot be rebutted) vs. disputable presumption (may be contradicted by presenting contrary

Article 1177

This talks about the remedies of the creditor to satisfy the obligation of the debtor, which are:

1. Exact fulfillment with damages

2. Pursue leviable properties not exempt from attachment (except those which are exempt from attachment like the

family home)

3. Exercise all rights and bring all actions (such as right to redeem, right to collect); except personal rights (right to vote)

Article 1178

This talks about the transmissibility of the rights of the parties in an obligation (exceptions: Prohibited by law and

prohibited by the stipulation)