Chapter 2

Reported by
Group 2
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)

 Meaning of specific or determinate  Meaning of generic or

thing- refers to an obligation indeterminate thing- refers only to
specific or determinate thing. a class or genus to which it
pertains and cannot be pointed out
with particularly.

 A determinate thing is identified

 A generic thing is identified only
by its individuality. The debtor
by its specie. The debtor can give
cannot substitute it with another
anything of the same class as long
although the latter is of the same
as it is of the same kind.
kind and quality without the
consent of the creditor. (Art.1244)
  They are;
1.Preserve the thing
1a. Diligence of a good father of a family
Duties of 1b. Another standard of care
debtor in 1c. Factors to be considered (Art.1173 & Art. 1174

obligation to 1d. Reason for debtor’s obligation.

2. Deliver the fruit of the thing –(Art. 1164)
give a 3. Deliver the accession and accessories- (Art. 1166)
determinate 4. Deliver the thing itself- (Art. 1163, 1233, 1244; as
to kinds of delivery. See Art. 1497- 1501)
thing. 5. Answer for damages in case of non-fulfillment or
breach. (Art. 1170)
  They are;
1. To deliver a thing which is of the
Duties of quality intended by the parties taking
into consideration the purpose of the
debtor in obligation and other circumstances. (see
Art. 1246)

obligation to 2. To be liable for damages in case of

fraud, negligence or delay, in the
deliver a performance of his obligation, or
contravention of the tenor thereof. (see

generic thing. 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)

Different kinds of fruits Right of creditor to the fruits.

 The fruits mentioned by the law
refer to natural, industrial, and
civil fruits.
1. Natural Fruits- are the
spontaneous products of the soil,
and the young and other product of
animals.
2. Industrial Fruits- are those
produced by lands of any kind
through cultivation or labor.
3. Civil Fruits- are those derived by
virtue of a juridical relation.
 The creditor is entitled to the fruit
of the thing to be delivered from
the time the obligation to make
delivery arises. The intention of
the law is to protect the interest of
the oblige should the obligor
commit delay, purposely or
otherwise, in the fulfillment of his
obligation.
When obligation to deliver fruits arises
1. Generally, the obligation to deliver the thing due and, consequently,
the fruits thereof, if any arises from the time of the “perfection of
the contract”. Perfection, in this case, refers to the birth of the
contract or to the meeting of the minds between the parties. (Art.
1305, 1315, 1319)
2. If the obligation is subject to a suspensive condition or period
(Art.1179, 1189, 1193). It arises upon the fulfillment of the condition
of the term.
3. In a contract sale, the obligation arises from the perfection of the
contract even if the obligation is subject to a suspensive condition or
a suspensive period where the price has been paid.
4. In obligations to give arising from the law, quasi- contracts, delicts,
and quasi-delicts, the time of performance is determined by the
specific provisions of the law applicable
Meaning of Personal Right
& Real Right
 1 . Personal Right is the right or
power of a person (creditor) to Personal & Real Right
demand from another debtor), as a distinguished
definite passive subject, the
 1.In personal right there is a de
fulfillment of the latter’s
finite active subject and a definite
obligation to give, to do, or not to
passive subject, while in real right,
do.
there is only a definite active
 2. Real Right is the right or subject without any definite
interest of a person over a specific passive subject.(see Art. 1156)
thing (like ownership, possession,
 2. a personal right is, therefore,
mortgage), without a definite
binding or enforceable only against
passive subject against whom the
a particular person, while a real
right may be personally enforced.
right is directed against the whole
world.
 Ownership acquired by
delivery.
Ownership and other real rights over property are acquired and
transmitted in consequence of certain contracts by tradition
(Art. 712) or delivery.
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 fortuitous event until he
has effected the delivery. (1096)
 Where debtor delays or has
promised delivery to
separate creditors.
 Paragraph 3 gives t instances when
Remedies of creditor in a fortuitous event does not exempt
the debtor from responsibility. It
Real Obligation likewise refers to a determinate
thing. An indeterminate thing
1. Specific real obligation
cannot be the object of
2. Generic real obligation destruction by a fortuitous event
because genus nunquam perit
(genus never perishes).
 Article 1169, and fortuitous
events, in Article 1174, 1263
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)

Meaning of Accessions and Accessories

ACCESSIONS are the fruits of a thing or a additions to or

improvements upon a thing (the principal)
ACCESSORIES are things joined to or included with the
principal thing for the latter’s embellishment, better use, or
completion.
Right of Creditor to Accessions
and Accessories

The general rule is that all 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.
 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)
Remedies of creditor in positive
Situation contemplated in Art.1167 personal obligation
 Refers to an obligation to do. 1. If the debtor fails to comply with his
obligation to do, the creditor has the
Three situations : right.
1. The debtor fails to perform an a. To have the obligation performed by
obligation to do. himself, or by another, unless
personal considerations are involved
2. The debtor performs an obligation at the debtor’s expense; and
to do but contrary to the terms b. To recover damages (Art.1170)
thereof; or
2. In case the obligation is done in
3. The debtor performs an obligation contravention of the terms of the same
to do but in poor manner. or is poorly done,
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)

 Remedies of creditor in negative personal obligation.

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. (Article 1169)
ARTICLE 1169- those obliged to deliver or to do something
incur in delay from the time the oblige judicially or extrajudicially
demands from 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 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.
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
(default or mora) in the
performance of an obligation.
Ordinary Obligation is merely the
failure to perform an obligation on
time.
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
They are:
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. Compensation morae or the
delay of the obligors in
reciprocal obligations (like in
sale).
Effects of Delay

1. Mora solvendi – the effects are as follows:

a. the debtor is guilty of breach or violation of the obligation;
b. He is liable to the creditor for interest (in case obligation to pay money)
Art 2209, or damages (in other obligations),Article 1170. in the absence of
extrajudicial demand, the interest shall commence from the filing of the
complaint; and
c. He is liable even for a fortuitous event when the obligation is to deliver a
determinate thing. (Art.1165, 1170). 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 (Art. 2215)

2. Mora accipiendi- the effects are as follows

a. the creditor is guilty of 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 (see Art.1262)
d. where the obligation is to pay money, the debtor is not liable for interest
from the time of creditor’s delay; and
e. the debtor may release himself from the obligation by the consignation or
deposit in court of the thing or sum due (see Article1256.)
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 exception are mentioned below.

1. when obligation so provides

2. when the law so provides
3. when time is of the essence
4. when demand would be useless
5. when there is performance by a party in reciprocal obligations.
ARTICLE 1170- those who in the performance of their
obligations are guilty of fraud, negligence, or delay and
those who in any manner contravene the tenor thereof, are
liable for damages.
 Grounds for Liability
The above provision gives the four grounds for liability which
may entitle the injured party to damages (infra, see Art.2197) for
all kinds of obligations mentioned in Art.1157, the breach of the
obligation is voluntary; in Art.1174, it is voluntary. There is breach
when a person fails or refuses to perform his obligation without
legal justification.
1. Fraud (deceit or dolo) (Article 1170)
2. Negligence (fault or culpa)
3. Delay (mora)
4. Contravention of the terms of the obligation
 ARTICLE 1171- Responsibility arising from fraud is
demandable in all obligations. Any waiver of an action for
future fraud is void. (1102a)

Responsibility arising from fraud Waiver of action for past

demandable refers to incidental
fraud which is employed in the
fulfillment of an obligation
(Art.1170)
Waiver of action for future fraud void
A waiver of an action for future
fraud is void (no effect, as if there is no
waiver) as being against the law and
public policy (Article 1409)
fraud valid
A past fraud can be the
subject of a valid waiver because
the waiver can be considered as
an act of generosity and
magnanimity on the part of the
party who is the victim of the
fraud.
ARTICLE 1172- responsibility 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

 Responsibility arising from negligence demandable.

In the performance of every kind of obligation, the debtor is also liable for
damages resulting from his negligence.
 Kinds of Negligence according to source of obligation

 They are: 3. Criminal Negligence (culpa

1. Contractual Negligence (culpa criminal) or negligence
contractual) Article 1172 refers to resulting in the commission of
culpa contractual. This kind of a crime.
negligence is not a source of
obligation. Art. 1157, it merely
makes the debtor liable for
damages in view of his negligence
in the fulfillment of a pre-existing
obligation (Art. 1170-1172)
2. Civil Negligence (culpa aquiliana)
or negligence which by itself is the
source of an obligation between
the parties not so related before
by any pre existing contract. It is
also called tort or quasi-delict
(Article 2176)
ARTICLE 1173- the fault or negligence of the obligor consists
in the omission of that diligence which is required by the nature of
the obligation and corresponds with the circumstances of the
person, of the time and of the place. When negligence shows bad
faith, the provisions of articles 1171 an 2201 paragraph 2, shall
apply.
If the law or contract does not state the diligence which is to
be observed in the performance, that which is expected of a good
father of a family shall be required (1104a)

Meaning of fault or Negligence Factors to be Considered

FAULT or negligence is defined by the
above provision. Accrdg. to the
supreme court “negligence is the
failure to observe for the protection
of the interests of another person,
that degree of care, precaution &
vigilance which the
 NEGLIGENCE is a question of fact, that
is , its existence being dependent upon
the particular circumstance of each
case.
1. Nature of the Obligation
2. Circumstances of the person
3. Circumstances of the place.
Measures of liability for damages
 DAMAGES signify the money
compensation awarded to a party for
loss or injury resulting from breach of
contract of obligation by the other. As a
rule, the purpose of awarding damages
is to place the innocent party in the
same (not better) position he would
have occupied if the contract or
obligation had been performed
according to its terms.
Article 2201 of the Civil Code
Kinds of diligence required
Under article 1173, the following kinds of
diligence are required:
1. That agreed upon by the parties, orally
or in writing;
2. In the absence of stipulation, that
required by law in the particular case
(like the extraordinary diligence
required of common carriers); and
3. If both the contract and law are silent,
then the diligence expected a good
father of a family. (par.2; see Art. 1163)
ARTICLE 1174- expect in cases expressly specified by the
law, or when it is otherwise declared by stipulation or when the
nature of the obligation requires the assumption of risk, no
person shall be responsible for those events which could not be
foreseen, or which though foreseen, were inevitable. (1105a)
Fortuitous Event distinguished from
Meaning of Fortuitous Event force majeure
 A FORTUITOUS EVENT is any event  A fortuitous event may either be an act
which cannot be foreseen, or of Man or an act of God.
which, though foreseen, is 1. Acts of Man – strictly speaking,
inevitable. Stated otherwise, it is fortuitous event is an event
an event which is either impossible independent of the will of the obligor
but not of other human wills.
to foresee or impossible to a void.
Ex. War, fire, robbery, murder, insurrection
2. Acts of God- they refer to what is called
majeure or those events which are totally
independent will of every human being.
Ex. Earthquake, flood, rain, shipwreck
Kinds of Fortuitous events
 Ordinary Fortuitous Events or those
events which are common and which
the contracting parties could
reasonably foresee (e.g, rain)
 Extra- Ordinary Fortuitous Events or
those events which are uncommon
and which the contracting parties
could not have reasonably foreseen
(e.g earthquake, fire, war,
pestilence, unusual flood) see Article
1680 par. 2
Requisites of a Fortuitous Event
They are the following:
1. The event must be independent of the
human will or at least of the debtor’s will
2. The event could not be foreseen, or if
foreseen, is inevitable.
3. The event must be of such a character
as to render it impossible for the debtor to
comply with his obligation in a normal
manner
4. The debtor must be free from any
participation in, or the aggravation of, the
injury to the creditor, that is, there is no
concurrent negligence on his part.
The absence of any of the above
requisites would prevent the obligor from
being exempt on his part
Rules as to liability in case of
fortuitous event
 A person is not, as a rule, responsible for loss or damage
caused to another resulting from the non- performance of his
obligation due to a fortuitous events. In other words, his
obligation is extinguished. The exceptions are enumerated
below.
1. When expressly specified by law
a. The debtor is guilty of fraud, negligence or delay or
contravention of the tenor of the obligation (Art 1170, 1163,
par.3)
b. The debtor has promised to deliver the same (specific) thing
to two or more persons who do not have the same interest
(Ibid)
c. The obligation to deliver a specific thing arises from a crime.
(Art. 1268)
d. The thing to be delivered is generic (Article 1263)
2. When declared by stipulation
3. When the nature of the obligation requires the assumption of
risk
 ARTICLE 1175- Usurious transaction shall be governed
by special laws. (n)

Meaning of simple loan or mutuum Meaning of USURY

 SIMPLE LOAN or mutuum- is a
contract whereby one of the
parties delivers to another, money
or other consumable thing, upon
the condition that the same
amount of the same kind and
quality shall be paid. It may be
gratuitous or with a stipulation to
pay interest Article 1933
 USURY is contracting for or
receiving interest in excess of the
amount allowed by law for the loan
or use of money, goods, chattels or
credits (Tolentino vs. Gonzales, 50
Phil. 558)
Requisites for Recovery of Interest
 In order that interest may be recovered, the following
requisites must be present:
1. The payment of interest must be expressly stipulated
(Article 1956)
2. The agreement must be in writing; and
3. The interest must be lawful (Article 1957)
A stipulation for the payment of usurious interest is void,
that is, as if there is no stipulation a to interest (see
comments under Art. 1413)
ARTICLE 1176- 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.
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. (1110a)

Meaning of Presumption Two Kinds of Presumption

 By PRESUMPTION is meant the
inference of a fact not actually
known arising from its usual
connection with another which is
known or proved.
They are:
1. Conclusive presumption- one which
cannot be contradicted, like the
presumption that everyone is
conclusively presumed to know the
law (Art.3) and
2. Disputable (or rebuttable)
presumption- one which can be
contradicted or rebutted by
presenting proof to the contrary, like
the presumption established in Article
1176.
When presumptions in Article 1176 do not apply

1. With reservations as the interest

2. Receipt without indication of
particular installment paid
3. Receipt for a part of the principal
4. Payment of Taxes
5. Non-payment proven
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 action 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.
Remedies available to creditors for the satisfaction of their claim

 In case the debtors does not comply with his obligation, the
creditor may avail himself to the following remedies to
satisfy his claim:
1. Exact fulfillment (specific performance) with the right to
damages
2. Pursue the leviable (not exempt from attachment under the
law) property of the debtor
3. “after having pursued the property in possession of the
debtor,” exercise all the rights (like the right to redeem) and
bring all the actions of the debtor
4. Ask the court to rescind or impugn act or contracts which
the debtor may have done to defraud him when he cannot in
any other manner recover his claim (Art 2236)
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. (1112)

Transmissibility of Rights
 All rights acquired in virtue of an obligation
are generally transmissible or assignable (see
Article 1311). The exceptions to this rules
are the following:
1. Prohibited by Law- when prohibited by law
like the rights in partnership, agency and
commodatum which are purely personal in
character
a. By the contract of partnership, two or more
persons bind themselves to contribute money,
property or industry to a common fund, with the
intention of dividing the profits among
themselves
b. By the contract of agency, a person binds
himself to render some service or to do
something in representation or on behalf of
another, with the consent or authority of the
latter (Article 1868)
c. By the contract of commodatum,
one of the parties deliver to another
something not consumable (e.g.car) so
that the latter may use the same for a
certain time and return it.
Commodatum is essential gratuitous
(Art. 1933)
2. Prohibited by stipulation of the
parties- when prohibited by
stipulation of the parties, like the
stipulation that upon the death of the
creditor, the obligation shall be
extinguished, or that the creditor
cannot assign his credit to another.