NATURE AND EFFECT OF OBLIGATIONS

Art. 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.

Note:
Refers to an obligation to give Note the standards of care which the debtor must exercise in the preservation of the object prior to delivery (as provided by law; as stipulated in the contract; and proper diligence of a good father of the family)

Diligence of a good father of the family

That

which is required by the nature of the obligation and corresponds with the circumstances of person, time and place

Diligence of a good father of the family

x x x The "diligence of a good father" referred to in the last paragraph of the aforecited statute means diligence in the selection and supervision of employees. Thus, when an employee, while performing his duties, causes damage to persons or property due to his own negligence, there arises the presumption that the employer is negligent, either in the selection of the employee or in the supervision over him after the selection. For the employer to avoid the solidary liability for a tort committed by his employee, an employer must rebut the presumption by presenting adequate and convincing proof that in the selection and supervision of his employee, he or she exercises the care and diligence of a good father of a family. Yambao vs. Zuniga et; al. G.R. No. 146173, December 11, 2003

Art. 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.

Example:

On November 1, 2011, Juan obligated himself to deliver to Pedro a specific parcel of land on November 30, 2011. If on November 1, 2011, Juan has not delivered to Pedro yet, Pedro acquires the personal right to demand the delivery of the land and the fruits thereof from November 1. However, Pedro acquires real right or ownership only from the time of actual delivery.

Note:

Personal right the power of one person to demand of another, as a definite passive subject, the fulfillment of a prestation to give, to do, or not to do

Real right the power belonging to a person over a specific thing, without passive subject individually determined, against whom such right may be personally exercised

Note:

The personal right of the creditor can be defeated by a third person in good faith who has innocently acquired the property prior to the scheduled delivery regardless of whether or not such third person acquired the property after the right to the delivery of the thing has accrued in favor of the creditor

Note:

Acquisition of real right means that such right can be enforceable against the whole world and will prejudice anybody claiming the same object of the prestation The real right only accrues when the thing or object of the prestation is delivered to the creditor

Art. 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 any fortuitous event until he has effected the delivery.

Note:
Specific or determinate object sufficiently described and can be identified (creditor has the right to compel debtor with his prestation, with right to ask for damages in case of noncompliance) Generic or indeterminate not sufficiently described (creditor may demand specific performance; creditor may ask 3rd party to comply with the prestation at the expense of the debtor plus damages)

Art. 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.

Accessories those artificially added or attached for purposes of adornment or embellishment Accessions - those artificially added or attached naturally or artificially for purposes of increasing its serviceability or utility

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.

Note:
Refers specifically to an obligation to do However, this does not apply to an obligation highly personal in nature. Here, the only remedy is to seek indemnification for damages in case the debtor fails to comply with his obligation

Art. 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.

Note:

Does not apply if what is done cannot be physically or legally be undone. Creditors only recourse is to sue the debtor for damages.

Art. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially 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 declare; 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.

Note:

mora solvendi - delay or default committed by the debtor to fulfill his obligation mora accipiendi - delay or default committed by the creditor to accept or acknowledge receipt of the object due Note: The debtor can consign whatever is due to the creditor in court if the circumstances warrant

Notes:

Delay in the performance of the obligation must either be malicious or negligent Hence, if the delay was only due to inadvertence without any malice or negligent, the obligor will not be held liable under Art. 1170 Default generally begins from the moment the creditor demands the performance of the obligation

Without such demand, judicial or extra-judicial, the effects of default will not arise.

Note:

Commencement of a suit is a sufficient demand

Obligor is liable for damages for the delay from the time of extra-judicial or judicial demand

Art. 1169 is applicable only when the obligation is to do something other than the payment of money

Note:
Art. 2209 shall apply in obligations for the payment of money where if the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which __________ per annum. In default, it is necessary that the following requisites be present for the debtor to be in default: 1. That the obligation be demandable and already liquidated; 2. That the debtor delays performance; 3. That the creditor requires the performance judicially and extra-judicially .

Note:

Demand is not necessary in 3 cases: 1. When the obligation or the law expressly so declares; 2. When time is of the essence in a particular contract; 3. When it would be useless, as when the obligor has rendered it beyond his power to perform
Reciprocal obligations - those created and established at the same time out of the same cause and which results in a mutual relationship of creditor and debtor between the parties

Art. 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.

Note:

If any of these four bases of liability coexist with a fortuitous event or aggravates the loss caused by a fortuitous event, the obligor cannot be excused from being liable on his obligation

Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.

Art. 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.

Art. 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 persons, of the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 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.

Art. 1174. Except 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.

Note:

The general rule is that no one should be held to account for fortuitous cases For the breach of an obligation due to an act of God, the following must concur: 1. The cause of the breach of the obligation must be independent of the will of the debtor; 2. The event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; 3. The debtor must be free from any participation in, or aggravation of the injury

Art. 1175. Usurious transactions shall be governed by special laws. (Note: Art. 1175 in itself does not prohibit usurious contracts.)

Art. 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.

Art. 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.

Art. 1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has been no stipulation to the contrary.