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CHAPTER 2
NATURE AND EFFECT OF OBLIGATIONS
(Arts. 1163-1178)
STUDY GUIDE :
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
1. The forbidden act shall be undone at the debtor’s expense. (Art. 1168)
2. REMEMBER : Non-fulfillment may take place BUT specific performance is
NOT a remedy. This is because the debtor fulfils by not doing what has
been forbidden him. Hence, there can be NO delay in a negative personal
obligation.
¤ E. DELAY ¤
1. Distinguish:
(a) Ordinary Delay
(b) Legal Delay → requires extrajudicial/judicial demand (Art. 1169, par.
1)
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
3. Kinds of Default :
(a) Mora Solvendi (Art. 1169, par. 1) → delay on the part of the debtor
(b) Mora Accipiendi → delay on the part of the creditor
(c) Compensatio Morae (Art. 1169, par. 3) → delay of obligors in
reciprocal obligations
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
(a) The delay of the obligor cancels the delay of the obligee, and vice
versa.
(b) The net result is that there is no default on the part of both parties.
2. NEGLIGENCE (culpa)
(a) Defined (Art. 1173, par. 1)
(b) Distinguish: fraud vs. negligence
(c) Validity of waiver of action for future negligence :
(c.1.) simple negligence – valid
(c.2.) gross negligence (amounting to fraud) - VOID
(e) Effect of negligence on the part of the injured party (Art. 2179):
(e.1.) if immediate and proximate cause of injury → NO recovery
(e.2.) if contributory to injury → recovery is reduced
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
1. Defined.
2. Refers to both : (a) acts of man & (b) acts of God
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
¤ H. ARTICLE 1175 ¤
2. Article 1956, however, of the Civil Code states: “No interest shall be
due unless it has been expressly stipulated in writing.”
¤ I. ARTICLE 1176 ¤
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
¤ K. TRANSMISSIBILITY OF RIGHTS -
ARTICLE 1178 ¤
2. Exceptions :
(2.1.) when prohibited by law
(2.2.) when prohibited by stipulation
(2.3.) in purely personal obligations
ART. 2179. When the plaintiff’s own negligence was the immediate
and proximate cause of his injury, he cannot recover damages. But if his
negligence was only contributory, the immediate and proximate cause of the
injury being the defendant’s lack of due care, the plaintiff may recover damages,
but the courts shall mitigate the damages to be awarded.
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
APPLICATION/PROBLEMS :
3. On March 15, 2016, Engr. Fabi entered into a building contract with
Mr. Oni. It was agreed that in six months, Engr. Fabi will finish the
construction of a one-kilometer dam in Bacolor, Pampanga to protect the
property of Mr. Oni from damage caused by the lahar mud flow consequent of
the Mount Pinatubo eruption. It was also stipulated that the height of the dam
from the basement shall be four meters, and crushed stone measuring two
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
inches in diameter shall be used. Later, Mr. Oni found out that Engr. Fabi
used 1/2-inch diameter of crushed stone for the dam. Under the factual
circumstances obtaining in this case, what are the remedies of Mr. Oni?
à Clue: Creditor’s right in a positive personal obligation (Art. 1167)
4. Budoy and Inday are the owners of two adjoining pieces of land in
Allen, Samar. On April 10, 2016, Budoy and Inday entered into an
agreement. In the agreement, Inday obliged herself not to construct any
structure, whether temporary or permanent, on her land for five years
because Budoy will use it as his garage for five years. As consideration for
the promise, Budoy paid Intoy the amount of P200,000.00. On March 20,
2017, however, Inday constructed a semi- structure to accommodate five live-
in employees from her carinderia. What is the liability of Inday under the
facts?
à Clue: Creditor’s right in a negative personal obligation (Art. 1168)
5. On July 2, 2016, Hiss agreed to sell his original set of Harry Potter
DVD’s to Moo, and promised to deliver the same to Moo’s house on July 4,
2016. On July 8, 2016, Moo demanded from Hiss delivery of the DVD’s.
Hiss, however, informed Moo that on the night of July 6, 2016 a burglar
entered their house and robbed them of personal effects amounting to
P300,000.00 which were never recovered. Hiss’ original set of Harry Potter
DVD’s were among the things stolen.
6. John and Bea were engaged to be married on July 6, 2016. For the
wedding cake, they contracted Goldi-Cooks to bake a five-layered chocolate
cake with walnut, which was Bea’s favourite. On the day of the wedding, and
up to the time when the newly weds were about to share their first slice of
cake as husband and wife, no cake arrived. So, they had to make do with the
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
leche flan the caterer had prepared for the wedding. When John and Bea
arrived from their honeymoon, they filed an action for damages against Goldi-
Cooks who now denies liability on the ground that the spouses never made
any demand on Goldi-Cooks for the delivery of the wedding cake. Is Goldi-
Cooks liable for damages under the facts of this case?
à Clue: Art. 1169, par. 2.
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
business associate that, on June 18, 2016, Dean sold his 800 square-meter
lot Manila for P5M to Gaby, who was embarking on a renovation project on
the subject property. What, under the factual circumstances of this case, are
the successive rights of James against Dean? à Clue: Art. 1177.
9. On July 31, 2015, Procopio sold to Cordapio his Nikon D700 camera
for P100,000.00. Upon delivery of the camera on the same day, Cordapio
paid P20,000.00 as down payment. Procopio agreed to accept payment on
the balance in instalments, as follows :
It was also agreed by the parties that if any instalment was not paid
by Cordapio on time, the remainder of the unpaid instalments would
automatically become due and demandable, and will be charged a 5%
monthly interest until completely paid. On January 31, 2016, Cordapio did
not remit the instalment thus due to Procopio. Until the end of March, 2016,
Procopio did not hear from Cordapio. On April 15, 2016, Procopio filed an
action for collection against Cordapio demanding payment of the entire
balance due from January 31, 2016 in the amount of P55,000.00. From what
time should the 5% interest for damages start to be computed on the total
amount due?
à Clue: Art. 1169, par. 1. (See Note No. 6 on DELAY)
10. At around 10:00 in the evening, you are driving along Roxas
Boulevard within the area of Buendia. Your family is in the car with you. The
highway is normally free from pedestrians who are required by local
ordinances to cross the boulevard using the designated overpass. Suddenly,
from out of nowhere, a man in his mid-30’s crosses the road. The man was
wearing a black shirt which made him even more invisible to moving vehicles.
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
Before you realize it, he was already right in front of the car a few feet away,
and it became impossible to steer clear of the man after a rapid full step on
the brakes. As a result, the man suffered serious injuries. Will you be liable
for damages to the injured man?
à Clue: Art. 2179. (See Note 2[e], Grounds for Damages)
LIST OF CASES FOR STUDY
3. DBP vs. Licuanan, G.R. No. 150097, 26 February 2007. (Article 1169)
6. Wildvalley Shipping Co., Ltd. vs. CA, G.R. No. 119602, 6 October 2000.
(Article 1173; negligence; ordinary diligence)
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TITLE I, CHAPTER 2 – Nature & Effect of Obligations (Articles 1163-1178)
“Opportunities are usually disguised as hard work, so most people don’t recognize them.”
Ann Landers
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