Nature and Effects of Obligations

8/12/2019 Nature and Effects of Obligations

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NATURE AND EFFECTS OF OBLIGATIONS

(Articles 1163-1178)

1. Concomitant or Accompanying Obligations

a) OBLIGATION TO GIVE (Real Obligation)

i. Difference from Obligation to Do (Personal

Obligation)

- means that there is a "thing or object" that is

to be transferred from one person to another; ifthere is none, the act involved is an act of doing

and not an act of giving. pay or to deliver are

obligations to give while to construct or to repair

are obligations to do.

- specific performance (a suit to compel

performance of the obligation in court) is an

available legal remedy in obligation to GIVE but

not in obligation to DO.

REASON: Constitutional prohibition against

involuntary servitude (sec. 18, par.2, Art.III, Billof Rights, 1987 Const.)

ii. Object of Obligation to GIVE (Real Obligation)

GENERIC or INDETERMINATE

refers to a class genus cannot he singled out with particularity cannot be destroyed nor lost (Art. 1263)

[Genus Nunquam perit- Generic thing never

perishes]

can be replacedExamples:

a car a Doberman dog a house

SPECIFIC or DETERMINATE

refers o a definite member of a class orgenus

can be singled out with particularity can be destroyed or lost irreplaceableExamples:

a Ford Cortina with plate no. NHV 529 the Doberman dog of my neighhbor named

"Nightmare"

the house at No.711 Samson Road CaloocanMetro Manila

iii. Concomitant Obligations of Obligation to GIVE if

the object is Specific or Determinate

aa.To Take Care of to Preserve the object

prior to its delivery (Art 1163)

(1) Standard of care required

a. As a Rule - the proper diligence of

a good father of a family

Exceptions: (i) If the law soprovides; ("extraordinary diligence

of a very cautious person for

common carriers" - De Leon p.28)

bb. To be liable for damages in case of fraud,

negligence or delay in the performance of

the obligation or contravention of the tenor

thereof

b) OBLIGATION TO DO (Positive Personal Oblig.)

i. To do exactly what was agreed uponii. To bear the expenses of doing the obligation if

he fails to perform (Art. 1167)

iii. To undo what was poorly done (Art. 1167)

iv. To pay damages in case of fraud, negligence,

delay or contravention of the tenor of obligation

(Art. 1170)

c) OBLIGATION NOT TO DO (Negative Personal

Obligation)

i. To abstain from doing the act prohibited to be

done

ii. To pay damages in case of fraud, negligence or

contravention of the tenor of obligation (Art.

1170)

(NOTE: There is no delay in obligation not to do)

2. Instances when a party is liable to pay damages (Art.

1170) (FNDC) [Sources of obligation to pay damages]

a) FRAUD ("DOLO") (Deceit)

i. Meaning of Fraud

- deliberate or intentional evasion of the normal

fulfilment of an obligation (De Leon)

- voluntary and deliberate act to evade the

fulfilment of an obligation (Torres)


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ii. Kinds of Fraud

a. As to manner of commission

(1) Incidental Fraud ("Dolo Incidente")

- committed in the performance of the

obligation

- contract remains perfectly valid

(2) Casual Fraud ("Dolo Causante")

- committed in the execution of a contractualobligation (Art. 1338). This kind of fraud

"vitiates" consent

- contract becomes voidable

- done before making the contract

SIGNIFICANCE OF DISTINCTION:

If fraud is casual in character, 2 remedies are

available - to annul the contract recover

damages. If incidental, only 1 - to recover

damages

b. As to Time of Commission

(1) Past Fraud - fraud which already happened

(2) Future Fraud - fraud which is yet to happen

SIGNIFICANCE OF DISTINCTION:

Waiver for action of future fraud is void (Art.

1171) but not of past fraud.

iii. Difference from Negligence

FRAUD ("DOLO")

Intentional and malicious Waiver of action for future fraud is void

(Art. 1171)

Must be clearly proved Liability arising from fraud CANNOT BE

REDUCED.

NELIGENCE ("CULPA")

Unintentional and without malice Waiver of action for future negligence is

VALID (Art. 1171)

PRESUMED in case of breach of contract Liability arising from negligence CAN BE

REDUCED

(See Contributory Negligence Rule)

iv. General Principles and Concepts

aa. Responsibility arising from fraud is

demandable in all kinds of obligations

bb. Waiver of action for future fraud is VOID

(Art. 1171)

cc. Fraud involves deliberate intent and

dishonesty (De Leon)

dd. In case of CASUAL FRAUD, the injured party

may annul the contract and ask for damages

whereas in case of INCIDENTAL FRAUD, he can

only ask for damagesb) NEGLIGENCE ("CULPA")

i. Meaning of Negligence

- Any voluntary act or omission, there being no

malice which prevents the normal fulfilment of an

obligation (De Leon)

- 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. (Art.1173)

ii. Kinds of Negligencea. CONTRACTUAL NEGLIGENCE ("Culpa

Contractual")

- negligence in the fulfilment of a contract

(NOTE: This is not a source of obligation)

b. CIVIL NEGLIGENCE (Culpa Aquilania)

- negligence in the doing or omission of an act

independent of contract (NOTE: This is a

source of obligation. It is commonly referred to

as quasi-delict" or torts")

c. CRIMINAL NEGLIGENCE (Culpa Criminal)

- negligence resulting in the commission of a

crime or delict. This form of negligence results

in 2 kinds of obligation (1) Civil obligation and

(2) Criminal obligation

iii. General Principles and Concepts

aa. Damages arising from negligence is

recoverable in all kinds of obligations.

bb. Waiver of future negligence is a VALID.

(Exception: Where the nature of the obligation

requires the exercise of extraordinary diligence

as in the case of common carriers.) (De Leon

p.48)

cc. When negligence shows bad faith, it is

considered equivalent to fraud. (De Leon p.48)

dd. Contributory negligence reduces the

amount of damages to be recovered by the

injured party. (See Contributory Negligence

Doctrine)


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ee. If the negligence of the injured party is the

immediate and proximate cause of his inury, no

damages may be recovered (Proximate Cause

Doctrine)

ff. Factors to consider in determining whether

or not a party is negligent:

(1) nature of the obligation

(2) circumstance of person(3) circumstance of place

(4) circumstance of time

c) LEGAL DELAY ("MORA" or "DEFAULT")

i. Meaning of Legal Delay

- Non performance of the obligation which is

already due despite demand made by the creditor

ii. Kinds of Legal Delay (Torres)

a. MORA SOLVENDI - delay on the part of the

debtor to fulfil his obligation to give or to do(1) Mora Solvendi Ex Re - delay in the giving or

delivering of a thing

(2) Mora Solvendi Ex Persona - delay in

obligation to do or perform personal services

b. MORA ACCIPIENDI - delay in accepting the

delivery of the thing due

c. COMPENSATIO MORAE - delay in reciprocal

obligation

iii. Requisites for Lergal Delay to Exist

a. There must be non-performance of the

obligation on time (Ordinary Delay)

b. There must be DEMAND either extra judicially

or judicially made by the creditor requiring the

debtor to perform his obligation

c. There must be non-performance of the

obligation despite the demand made by the

creditor

iv. General Principles and Concepts

a.There is no legal delay in obligation not to do

b. An obligor who delays the performance of his

obligation to give shall be responsible for any

fortuitous event until he has effected the

delivery of the determinate thing (Last par. of

Art. 1165)

c. Demand is no longer necessary to put the

obligor in legal delay in the following instances;

(NOTE: Here ordinary delay is already equivalent

to legal delay) (PLUTO)

(1) P-erformance of a party is undertaking in

reciprocal obligation

(2) L-

(3) U-selessness of the Demand

(4) T-ime is of the essence

(5) O-bligation so provides (Art. 1169)

v. Effects of Legal Delay (De Leon pp.40-41)

MORA SOLVENDI

o Debtor is guilty of breach of obligationo Liable for interest or damages.o He is liable for a fortuitous event when the

obligation is to deliver a determinate thing

MORA ACCIPIENDI

o Creditor is guilty of breach of obligationo He is liable for damageso He bears the risk of loss of the thing dueo Where the obligation is to pay money, the

debtor is not liable for interest from the time

of creditor's delay

o The debtor may release himself fromobligation by the consignation of the thing or

sum due.

COMPENSATIO MORAE

o The delay of the obligor CANCELS the delayof the obligee and visa versa. The net result

is that there is no actionable default on the

part of both parties. If the delay of one party

is followed by that of the other, the liability

of the first infractor shall be equitably

tempered by the courts. If cannot be

determined which of the parties is guilty of

delay, the contract shall be deemed

extinguished and each shall bear his own

negligence.

d) CONCEPT OF FORTUITOUS EVENT

i. Meaning of Fortuitous Event

- An event which cannot be foreseen or which

though foreseen is inevitable. (Art. 1174)

ii. Kinds of Fortuitous Event

a. As to Manner 0f Occurrence

(1) Totally unexpected (Unforeseen)


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Ex: Earthquakes, Robbery

(2) Expected but cannot he prevented

(Foreseen but inevitable)

Ex: volcanic, eruption, typhoon, etc.

b. As to its Nature

(1) Acts of Man - an event independent of the

wills of the obligor but not of other human

willsEx: War, Coup d'etat, crime, arson

(2) Acts of God (Force Majure) - an event

which totally independent of the will of every

human being.

Ex. Natural calamities such as earthquakes,

volcanic eruptions, typhoons and tornados

iii. Requisites for exemption from liability due to

fortuitous event (FIRE)

(1) F - ree from any participation in theaggravation of the creditors injury. Debtor IIILISL

not be guilty of concurrent negligence.

(2) I - ndependent of human wiII or at least of

the debtors will must be the character of the

event

(3) R-enders it impossible for the debtor to

comply with his obligation must be the result of

the event

(4) E-vent must be one which cannot be foreseen

or if foreseen is inevitable to happen

iv. Instances where the debtor remains liable

although the non-performance of the obligation is

due to fortuitous event (LAN)

(1) L - aw so provides INSTANCES:

a. in case of FRAUD

b in case of NEGLIGENCE

c. in case of LEGAL DELAY

d. in case the debtor contravenes, in any

manner, the tenor of the obligation

e. in case the debtor promised to deliver the

same thing to 2 or more persons WHO DO

NOT HAVE THE SAME INTEREST (Last par. of

Art. 1165)

f. in case the debtors obligation arises from

crime (Art. 1268)

g. in case the thing to be delivered is

GENERIC (Art.1263)

(2) A - greement in writing or stipulation of the

parties so provides

(3) N - ature of the obligation requires

assumption of the risk

- determined by specific provisions of law

applicable

(4) Concept of Personal right and Real rightPERSONAL RIGHT

there is a definite active subject and a definitepassive subject

the right acquired is enforceable against aparticular person (against the definite passive

subject)

REAL RIGHT

there is a definite active subject but NOpassive subject

the right acquired is enforceable against thewhole world (against all persons)

cc. To DELIVER all its ACCESSIONS and

ACCESSORIES even though they may not have

been mentioned (Art. 1166)

ACCESSIONS

- fruits of a thing or additions to orimprovements upon a thing (De Leon)

Examples:

- a house on a land

- a factory

- air conditioner of a car

- cover of a ballpen

- harvests of a land

- trees on a land

ACCESSORIES

- things joined to another as an ornament orto make it complete (Torres)

Examples:

- key to a house

- machineries of a factory

- wheels of a car

- ink of a ballpen

- lens of a telescope

- roofings of a house


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dd. To DELIVER the thing itself (De Leon p.29)

(1) Significance of DeIivery" or "Tradicion"

- Ownership and other real rights overproperty are acquired and transmitted

consequence of certain contracts by

tradition or delivery. Mere agreement

does affect transfer of ownership (De

Leon p.32)

ee. To answer for damages in the event of

FRAUD, NEGLIGENCE, DELAY CONTRAVENTION in

any manner of the tenor of the obligation

(Art.1170)

(iv) Concomittant Obligation to GIVE if the

Object is GENERIC INDETERMINATE (De Leon

p.29)

aa. To deliver a thing which is of the qualityintended by the parties taking into

consideration the purpose of the obligation and

other circumstances

bb. Ti bear the expenses of giving if he fails to

perform his obligation...

If the parties stipulate another standard of care

(may be higher or lower standard of care but

NEVER absolute exemption, De Leon p.29)

b. Rules and Limitations (De Leon pp. 28-29)

(i) The diligence required depends upon the

nature of the obligation, and the

circumstances of person, time and place

(Art.1173)

(ii) If the diligence required is not observed

due to fortuitous event, the obligor is not

liable (Art.1174) (NOTE: Exceptions De Leon

pp. 54-56)

(iii) Parties may agree to a lower or higher

standard of diligence but not to total or

absolute exemption from liability in case of

negligence (De Leon p.29)

Reason: Against public policy

bb. To Deliver its FRUITS from the time the

obligation to deliver the principal thing arises

(Art. 1164)

(1) Meaning of "FRUIT"

- any product of a thing of juridical relation

(2) Kinds of FRUITS

NATURAL FRUITS

- spontaneous products of the soil and theyoung and other products of animals

Examples:

- wild trees

- eggs of chickens

- young of animals produced through normal

breeding

- milk of cow

- uncultured fishes

INDUSTRIAL FRUITS

- those produced by lands of any kindthrough cultivation of labor.

Examples:

- grafted trees planted

- young of animals produced through artificial

insemination

- cultured fishes

- vegetables

CIVIL FRUITS

- those derived by virtue of juridcal relationExamples:

- rentals of boarding houses

- interest of a loan

- dividends of stockholdings

- profits derived from sale

(3) Time when the obligation to deliver arises

a. As a rule (De Leon p.31)

-from the perfection of the contract (see

De Leon pp.249-252)

Qualifications:

(i) If subject to a condition or period

- from the time of fulfilment of the

condition or expiration of the period

(ii) If a contract of sale

-from the perfection of the contract

(iii) If obligation arising from law, quasi-

contract, delicts or quasi-delicts

Nature and Effects of Obligations

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