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; if
there 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, Bill
of 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 replaced
Examples:
a car
a Doberman dog
a house
SPECIFIC or DETERMINATE
refers o a definite member of a class or
genus
can be singled out with particularity
can be destroyed or lost
irreplaceable
Examples:
a Ford Cortina with plate no. NHV 529
the Doberman dog of my neighhbor named
"Nightmare"
the house at No.711 Samson Road Caloocan
Metro 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 so
provides; ("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 upon
ii. 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)




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 contractual
obligation (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 damages
b) 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 Negligence
a. 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)
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 obligation
o 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 obligation
o He is liable for damages
o He bears the risk of loss of the thing due
o 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 from
obligation by the consignation of the thing or
sum due.

COMPENSATIO MORAE
o The delay of the obligor CANCELS the delay
of 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)
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
wills
Ex: 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 the
aggravation 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 right
PERSONAL RIGHT
there is a definite active subject and a definite
passive subject
the right acquired is enforceable against a
particular person (against the definite passive
subject)

REAL RIGHT
there is a definite active subject but NO
passive subject
the right acquired is enforceable against the
whole 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 or
improvements 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 or
to 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

dd. To DELIVER the thing itself (De Leon p.29)
(1) Significance of DeIivery" or "Tradicion"
- Ownership and other real rights over
property 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 quality
intended 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 the
young 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 kind
through 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 relation
Examples:
- 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