Effects and Nature of Obligations  Accessions are the fruits of, or additions to, or
improvements upon, a thing (the principal).
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.
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.
Real right - right pertaining to a person over a specifi c
thing, without a passive subject individually
determined against whom such right may be
personally enforced.
Personal Right - a right pertaining to a person to
demand from another, as a defi nite passive
subject, the fulfi llment of a prestation to give, to
do or not to do.
Kinds of Delivery
Actual Delivery - consists in placing the thing which is
the object of the obligation in the control and
possession of the vendee.
Legal or Constructive Delivery – the thing is not
actually transferred but is considered delivered by
operation of law.
1. Execution of a public instrument
2. Symbolical tradition (traditio symbolica)
3. Mere consent of parties (traditio longa manu)
4. Previous possession not in the concept of owner
(traditio brevi manu)
5. Retains possession in different concept (traditio
constitutum possessorium)
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.
Obligations of obligor/debtor in specific/determinate
obligations.
1. To perform the obligation specifically.
2. To take care of the thing with the proper
diligence of a good father of a family.
3. To deliver all accessions and accessories of the
thing, even though they may not have been
mentioned.
 Accessories are things joined to, or included with,
the principal thing for the latter’s embellishment,
better use, or completion.
4. To be liable for damages in case of breach of the
obligation by reason of delay, fraud, negligence or
contravention of the tenor thereof.
Obligations of obligor/debtor in
generic/indeterminate obligations.
1. To deliver a thing which is neither of superior nor
inferior quality.
2. To be liable for damages in case of breach of the
obligation by reason of delay, fraud, negligence or
contravention of the tenor thereof.
Reciprocal Obligation – an obligation where both
parties are mutually obligees/creditors and
obligors/debtors.
In reciprocal obligations, one party can rescind (to
withdraw/to cancel) from the obligation, aside
from the other remedies available. To rescind a
contract is not merely to terminate it, but to
abrogate and undo it from the beginning, that is,
not merely to release the parties from further
obligations to each other in respect to the subject
of the contract, but to annul the contract and
restore the parties to the relative positions which
they would have occupied as if no such contract
had ever been made.
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.
Article 1169. Those obliged to deliver or to do
something incur in delay from the time the
obligee judicially or extra- judicially 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.
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In reciprocal obligations, neither party incurs in delay if a. The creditor is guilty of breach of obligation;
the other does not comply or is not ready to b. He is liable for damages suffered, if any, by the
comply in a proper manner with what is debtor;
incumbent upon him. From the moment one of c. He bears the risk of loss of the thing due;
the parties fulfills his obligation, delay by the d. Where the obligation is to pay money, the debtor
other begins. is not liable for interest from the time of the
credi- tor’s delay; and
Breach of contract or obligation - the failure without e. The debtor may release himself from the
justifiable excuse to comply with the terms of a obligation by the consignation of the thing or
contract. The breach may be willful or done sum due. Consignation – to deliver to the court
unintentionally. It has been defined as the failure, the thing due.
without legal excuse to perform any promise 3. Compensatio morae or the delay of the obligors
which forms the whole or part of the contract. in reciprocal obligations or damages in other
obligations.
Types of breach which leads to damages a. The delay of the obligor cancels out the effects of
1. Fraud (deceit or dolo). the delay of the obligee and vice versa. The net
2. Negligence (fault or culpa) result is that there is no actionable default on the
3. Delay (mora) part of both parties, such that as if neither one is
4. Contravention of the terms of the obligation – guilty of delay.
violation of terms and conditions stipulated in b. If the delay of one party is followed by that of
the obligation. the other, the liability of the first infractor shall
be equitably tempered or balanced by the courts.
Fraud differed from Negligence If it cannot be determined which of the parties is
Fraud Negligence guilty of delay, the contract shall be deemed
there is deliberate No deliberate intent extinguished and each shall bear his own
intention to cause damages.
damage or
injury When demand is not necessary to put obligor in delay.
Waiver of the liability Future negligence can 1. When the obligation so provides;
for future fraud is void be waived 2. When the law so provides;
Fraud must be clearly presumed from the 3. When time is of the essence;
proved breach of 4. When demand would be useless; and
a contractual obligation 5. When there is performance by a party in
liability for fraud may be reduced reciprocal obligations.
cannot be mitigated by according to the
the court circumstances Article 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of an
action for future fraud is void.
Delay (mora) Fraud (deceit or dolo) - it is the deliberate or
 Ordinary delay is merely the failure to perform an intentional evasion of the normal fulfi llment of
obligation on time. an obligation.
 Legal delay or default or mora is the failure to
perform an obligation on time which failure, Kinds of fraud
constitutes a breach of the obligation. 1. incidental fraud (dolo incidente) committed in
the performance of an obligation already existing
Kinds of Delay (Mora) because of contract.
1. Mora solvendi or the delay on the part of the 2. causal fraud (dolo causante) or fraud employed in
debtor to fulfill his obligation (to give or to do) the execution of a contract
by reason of a cause imputable to him; 3. criminal fraud or fraud amounting to criminal
a. The debtor is guilty of breach of the obligation; liability.
b. He is liable for interest in case of obligations to
pay money. In the absence of extrajudicial Article 1174. Except in cases expressly specified by the
demand, the interest shall commence from the law, or when it is otherwise declared by
filing of the complaint; and stipulation, or when the nature of the obligation
c. He is liable even for a fortuitous event when the requires the assumption of risk, no person shall
obligation is to deliver a determinate thing. be responsible for those events which could not
However, if the debtor can prove that the loss be foreseen, or which, though foreseen, were
would have resulted just the same even if he had inevitable.
not been in default, the court may equitably
mitigate the damages. Fortuitous event - is any extraordinary event which
cannot be foreseen, or which, though foreseen, is
2. Mora accipiendi or the delay on the part of the inevitable. In other words, it is an event which is
creditor without justifiable reason to accept the either impossible to foresee or impossible to
performance of the obligation; and avoid.

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The essence of a fortuitous event consists of being a
happening independent of the will of the obligor
and which happening, makes the normal
fulfillment of the obligation impossible.
Requisites of a fortuitous event
1. The event must be independent of the human
will or at least of the obligor’s will.
2. The event could not be foreseen (unforeseeable),
or if it could be foreseen, must have been
impossible to avoid (unavoidable)
3. The event must be of such a character as to
render it impossible for the obligor to comply
with his obligation in a normal manner
4. The obligor must be free from any participation
in, or the aggravation of the injury to the obligee.
Instances when the obligor is still liable even if the loss
is through a fortuitous event.
1. Obligation is to deliver a determinate thing and
debtor is in delay. 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 the damages.
2. Obligation is to deliver a generic/indeterminate
thing. An indeterminate thing cannot be the
object of de- struction by a fortuitous event
because genus nunquam perit (genus never
perishes).
3. The presence of human participation amounting
to a negligent act.
4. The obligor promises the same specific thing to
two or more persons having different interest in
the thing because it would be impossible to
comply with the obligation.
5. The debt of a thing certain and determinate
proceeds from a criminal offense, unless the
thing having been offered by the debtor to the
person who should receive it, the latter refused
without justification to accept it.
6. When expressly stipulated in the contract.
7. If the common carrier negligently incurs in delay
in transporting the goods, a natural disaster shall
not free such carrier from responsibility.
8. The bailee is liable for the loss of the thing, even
if it should be through a fortuitous event:
a. If he devotes the thing to any purpose different
from that for which it has been loaned;
b. If he keeps it longer than the period stipulated, or
after the accomplishment of the use for which
the commodatum has been constituted;
c. If the thing loaned has been delivered with
appraisal of its value, unless there is a stipulation
exempting the bailee from responsibility in case
of a fortuitous event;
d. If he lends or leases the thing to a third person,
who is not a member of his household;
9. If, being able to save either the thing borrowed
or his own thing, he chose to save the latter. The
depositary is liable for the loss of the thing
through a fortuitous event:
a. If it is so stipulated;
b. If he uses the thing without the depositor's
permission;
a. If he delays its return;
b. If he allows others to use it, even though he
himself may have been authorized to use the
same.
Damages – the pecuniary compensation, recompense,
or satisfaction for an injury sustained or as
otherwise expressed, the pecuniary consequence
the law imposes for the breach of some duty or
violation of some right.
Kinds of damages under the civil code
1. Actual or compensatory
 Except as provided by law or by stipulation, one
is entitled to an adequate compensation only for
such pecuniary loss suffered by him as he has
duly proved. Actual damages suffered due to the
act or omission. Must be proven with certainty.
2. Moral
 Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched
reputa- tion, wounded feelings, moral shock,
social humiliation, and similar injury. Though
incapable of pe- cuniary computation, moral
damages may be recovered if they are the
proximate result of the defend- ant's wrongful act
for omission.
3. Nominal
 Damages as vindication of a right of the plaintiff
as violated by the defendant.
4. Temperate or moderate
 More than nominal, but less than actual or
compensatory. Used when there is indeed
damages but the amount thereof cannot be
proven with certainty.
5. Liquidated
 Damages as agreed upon by the parties. Must not
be too excessive.
6. Exemplary or corrective
 Imposed, by way of example or correction for
the public good, in addition to the moral,
temperate, liquidated or compensatory damages.
Interest may be recovered from the delay or failure to
perform an obligation provided that:
1. There is an agreement that interest shall be
earned;
2. The agreement is expressly stipulated in writing;
and
3. The rate is not excessive or usurious.
Legal interest – the debtor is liable for 6% legal interest
in the following situations:
1. There is an agreement to interest but no
agreement as to the rate;
2. From the time of delay if no agreement was
made;
3. From the time a decision in favour of the
creditor for the enforcement of the obligation
becomes final;
4. Interest due as stipulated also earns legal interest.
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Usury is when the interest rate agreed upon is higher or Rights as to things which are the object of an
above the maximum rate allowed by law. The obligation are transmissible, or can be transferred
following create a disputable presumption: to others as long as the same is not prohibited by
1. The creditor receives the principal without law or in there is no agreement prohibiting the
reservation with respect to the interest, said same or is purely personal to the debtor.
interest has been paid;
2. The creditor receives installment of a debt
without reservation as to prior installments of a
debt without reservation as to prior installments,
such prior installments have been paid.

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 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.Remedies of obligee
in case of failure of obligor in positive personal
obligations.

1. To have the obligation performed by himself, or

by another unless personal considerations are
involved, at the debtor’s expense; and
2. To recover damages;
3. To have it undone if done poorly or contrary to
the tenor of the obligation, at the expense of the
obligor.

Remedies of obligee in negative personal obligation.

1. To have it undone at the expense of the obligor;

2. If it cannot be undone, then the obligee can file
an action for damages.

Remedies of an obligee/creditor in case of failure

of the obligor/debtor if thing is
specific/determinate.
1. To compel specific performance
◦ Specific performance - requiring exact
performance of a contract in the specific form in
which it was made, or according to the precise
terms agreed upon.
2. To recover damages for breach of the obligation.
Remedies of an obligee/creditor in case of failure
of the obligor/debtor if thing is generic/
indeterminate.
1. To ask for performance of the obligation.
2. To ask that the obligation be complied with at the
expense of the debtor.
3. To recover damages for breach of the obligation.
Subsidiary remedies of Creditor
1. Subrogatory action or accion subrogatoria – the
creditor will file a case in behalf of the debtor
with respect to another obligation that is due to
the debtor.
2. Rescissory action or accion pauliana – the
creditor will impugn the acts of the debtor that is
in fraud of creditors.