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OBLIGATIONS

CHAPTER 1 - GENERAL PROVISIONS

Art. 1156. An obligation is a juridical necessity to give, to do or not to do. ( n) Art. 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts;Lawcenter.ph (4) Acts or omissions punished by law; and (5) Quasi-delicts. (1089a) Art. 1158. Obligations derived from law are not presumed. Only those expressly d etermined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (1090) Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (1091a) Art. 1160. Obligations derived from quasi-contracts shall be subject to the prov isions of Chapter 1, Title XVII, of this Book. (n) Art. 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XV III of this Book, regulating damages. (1092a) Art. 1162. Obligations derived from quasi-delicts shall be governed by the provi sions of Chapter 2, Title XVII of this Book, and by special laws. (1093a)

CHAPTER 2 - NATURE AND EFFECT OF OBLIGATIONS

Art. 1163. Every person obliged to give something is also obliged to take care o f it with the proper diligence of a good father of a family, unless the law or t he stipulation of the parties requires another standard of care. (1094a) 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 i t until the same has been delivered to him. (1095) 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 mak e the delivery.

If the thing is indeterminate or generic, he may ask that the obligation be comp lied 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 fortu itous event until he has effected the delivery. (1096) Art. 1166. The obligation to give a determinate thing includes that of deliverin g all its accessions and accessories, even though they may not have been mention ed. (1097a) 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. (1098) 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. (1099a) Art. 1169. Those obliged to deliver or to do something incur in delay from the t ime 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 m ay 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 c omply or is not ready to comply in a proper manner with what is incumbent upon h im. From the moment one of the parties fulfills his obligation, delay by the oth er begins. (1100a) CHAPTER 2 NATURE AND EFFECT OF OBLIGATION ART. 1163 Every person obliged to give something is also obliged to take care of it with t he proper diligence of a good father of a family, unless the law or the stipulat ion of the parties requires another standard of care. DELIGENCE OF A GOOD FATHER OF THE FAMILY > that which is required by the nature of the obligation and corresponds with th e circumstances of persons, time and place > however, if the law or contract provides for a different standard of care, sai d law or stipulation must prevail 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 PERSONAL RIGHT is power demandable by one person to another t to do something to give, to do or no

REAL RIGHT a power over a specific thing (like the right of ownership or possess ion) and is binding on the whole world Non nudis pactis, sed traditionis dominia rerum transferantur > as a consequence of certain contracts, it is not agreement but tradition or de livery that transfers ownership KINDS OF DELIVERY 1. Actual where physically, the property changes hands

2. Constructive that where the physical transfer is implied, it may be done by: a) traditio simbolica (symbolical tradition) as when the key of the house was gi ven b) tradition longa mano (delivery by mere consent by the pointing out of the obj ect) pointing out the car, which is the object of the sale c) Traditio brevi manu (delivery by the short hand; that kind of delivery whereb y the possessor of a thing not as an owner, becomes the possessor as an owner); ex: when the tenant buys the house he is renting d) traditio constitutom possessorium the opposite of brevi manu; thus the delive ry whereby a possessor of a thing as an owner retains possession no longer as an owner, but in some other capacity ( like a house owner, who sells a house, but remains in possession as tenant of the same house

e) tradition by the execution of legal forms and solemnities (like the execution of a public instrument selling land) WHEN DOES AN OBLIGATION TO DELIVER ARISE? 1) If there is no term or condition, then from the perfection of the contract 2) If there is a term or a condition, then from the moment the term arrives or t he condition happens ARTICLE 1165 When what is to be delivered is a determinate thing, the creditor, in addition t o the right granted him by Article 1170, may compel the debtor to make the deliv ery. If the thing is indeterminate or generic, he may ask that the obligation be comp lied 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 fortu itous event until he has effected the delivery. Classification of Obligation from the viewpoint of subject matter:

Real obligation (to give) a specific thing (set apart from a class) to give a generic or indeterminate thing (one of a class) 2) Personal Obligation (to do or not to do) SPECIFIC OR DETERMINATE THINGS > a thing is said to be specific or determinate when it is capable of particular designation Examples: a) this car b) the car owned by A on May 15, 2011 c) the car with plate number 2398 d) this particular picture of Gemma in my notebook GENERIC OR INDETERMINATE THINGS > a thing is generic or indeterminate when it refers only to a class, to a genus , and cannot be pointed out with particularity Examples: a) a car b) a kilo of sugar c) a sum of P5,000 d) a corrola Remedies of the creditor when the debtor fails to comply with his obligation a) demand specific performance (or compliance) of the obligation (this is true w hether the obligation is generic or specific) b) demand recession or cancellation (in some cases) c) demand damages either with or without either of the first 2 (a) or (b) ARTICLE 1165 When what is to be delivered is a determinate thing, the creditor, in addition t o the right granted him by Article 1170, may compel the debtor to make the deliv ery. If the thing is indeterminate or generic, he may ask that the obligation be comp lied 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 fortu itous event until he has effected the delivery. Classification of Obligation from the viewpoint of subject matter: Real obligation (to give) a specific thing (set apart from a class) to give a generic or indeterminate thing (one of a class) 2) Personal Obligation (to do or not to do) SPECIFIC OR DETERMINATE THINGS > a thing is said to be specific or determinate when it is capable of particular designation Examples: a) this car b) the car owned by A on May 15, 2011 c) the car with plate number 2398

d) this particular picture of Gemma in my notebook GENERIC OR INDETERMINATE THINGS > a thing is generic or indeterminate when it refers only to a class, to a genus , and cannot be pointed out with particularity Examples: a) a car b) a kilo of sugar c) a sum of P5,000 d) a corrola Remedies of the creditor when the debtor fails to comply with his obligation a) demand specific performance (or compliance) of the obligation (this is true w hether the obligation is generic or specific) b) demand recession or cancellation (in some cases) c) demand damages either with or without either of the first 2 (a) or (b) EFFECT OF FORTUITOUS EVENT > it EXTINGUISHES a specific obligation (obligation to deliver) > but not generic obligation TWO INSTANCES WHERE FORTUITOUS EVENT DOES NOT EXEMPT a) if the obligor delays (default or mora) (not just an ordinary delay) b) if the obligor is guilty of bad faith (for having promised to deliver the sam e thing to two or more persons who do not have the same interest or when one is not the agent merely of the other ORDINARY DELAY DISTINGUISHED FROM DEFAULT a) Ordinary delay merely non-performance at the stipulated time

b) Default (legal delay) delay which amounts to a virtual non-fulfillment of the obligation (as a rule to put a debtor in default, there must be demand for fulf illment, the demand being either judicial or extra-judicial) ARTICLE 1166 The obligation to give a determinate thing includes that of delivering all its a ccessions and accessories, even though they may not have been mentioned ACCESSORIES those joined to or included with the principal for the latter s better use, perfection, or enjoyment (ex. The keys to the house, the dishes to a resta urant) ACCESSIONS additions to or improvements upon a thing. This includes alluvium (so il gradually deposited by the current of the river on a river bank) and whatever is built, planted or sown on a person s parcel of land EXCEPTION TO THE RULE: If there is a specific stipulation in the contract that the accessions and acces sories be not included ARTICLE 1167

If a person obliged to do something fails to do it, the same shall be executed a t 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. PERSONAL OBLIGATION 1ST PARAGRAPH SPEAKS OF POSITIVE PERSONAL OBLIGATION (to do) 2ND PARAGRAPH SPEAKS OF NEGATIVE PERSONAL OBLIGATION REMEDIES IF CREDITOR FAILS TO DO 1. Have the obligation performed (by himself or by another) at the debtor s expens e 2. To obtain damages SPECIFIC PERFORMANCE IS NOT A REMEDY TO A PERSONAL OBLIGATION, otherwise it may amount to involuntary servitude

NEGATIVE PERSONAL OBLIGATION When will a thing be ordered undone? 1. If made poorly (here performance by another, and damages may be demanded) 2. If the obligation is a negative one (provided the undoing is possible) ARTICLE 1168 When the obligation consists in not doing, and the obligor does what has been fo rbidden him, it shall also be undone at his expense REMEDY FOR NEGATIVE PERSONAL OBLIGATION RULE: Undoing of the prohibited thing plus damages ARTICLE 1169 Those obliged to deliver or to do something incur in delay from the time the obl igee judicially or extrajudicially demands from them the fulfillment of their ob ligation. However, the demand by the creditor shall not be necessary in order that delay m ay exist: When the obligation or the law expressly so declare; or 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 c omply or is not ready to comply in a proper manner with what is incumbent upon h

im. From the moment one of the parties fulfills his obligation, delay by the oth er begins Default or Mora > Legal Delay > it arises when demand is already done and the ob ligor still fails to perform the same > Demand here may be JUDICIAL or EXTRAJUDICIAL When demand is not needed to put the debtor in default When the law so provides (taxes are to be paid in a definite period otherwise pe nalties are imposed without need for demand for payment) When the obligation expressly so provides When time is of the essence of the contract (when the fixing of the time is the controlling motive of the contract) Example of time is of the essence

The making of the wedding dress> if the wedding is scheduled at the time the dre ss is due When demand is not needed to put the debtor in default 4) When demand would be useless, as when the obligor has rendered it beyond his power to perform (when the subject of obligation is destroyed before maturity or when the obligor is in hiding) 5) When the obligor has expressly acknowledges that he really is in default Different kinds of mora Mora solvendi (default on the part of the debtor Mora solvendi ex re (debtor s default in real obligation) Mora solvendi ex persona (debtor s default in personal obligations Mora accipiendi (default on the part of the creditor) Compensatio morae (when in reciprocal obligation, both parties are in default Mora Solvendi There is no mora solvendi in negative obligation (one cannot be late in not doin g) There is no mora in natural obligation Requisites for Mora Solvendi 1. the obligation must be due, enforceable and already liquidated or determinate in amount 2. There must be non-performance 3. There must be demand unless the demand is not required 4. The demand should be for the obligation that is due Effects of Mora Solvendi 1. If the debtor is in default, he may be liable for interest or damages 2. He may also have to bear the loss

3. He is liable even for fortuitous event MORA ACCIPIENDE a) creditor is guilty of default when he UNJUSTIFIABLY refuses to accept payment or performance at the time said payment or performance can be done Remedies of debtor: a) let the creditor accept with payment of damages to whatever consequences aris ing from said refusal b) If the obligation consist of payment, the debtor may consign it in court

Requisites for delay in reciprocal obligation: 1) both parties have an obligation for each other 2) both parties are in default EFFECT> it is as if NEITHER is in default Mind Exercises: A borrowed money from B payable in installment. It is also agreed that if ANY in stallment was not made on time, the whole debt would mature (acceleration clause ) the debtor did not pay one installment at one time after some time, because th e debtor did not pay the whole debt, creditor filed a collection suit in court Q: From what time was the paid? Or from the time In the case when it is t is the remedy of the ARTICLE 1170 debtor in default, from the time the installment was not the action was filed? the owner of the house who refused to accept the rent wha debtor?

Those who in the performance of their obligations are guilty of fraud, negligenc e, or delay, and those who in any manner contravene the tenor thereof, are liabl e for damages Grounds for liability in the performance of an obligation: a) fraud b) negligence c) default d) violation of the terms of the obligation (unless excuse in proper cases by fo rtuitous event) Liability for damages: Those liable under 1170 should pay damages, but generally only if aside from the breach of contract, prejudice or damage was caused Kinds of Damages (keyword MENTAL) Moral for mental and physical anguish Exemplary corrective or to set an example (could also be termed as punitive dama ges) Nominal to vindicate a right when no other kind of damage may be recovered

Temperate when the exact amount of damages cannot be determined Actual for actual losses as well as unrealized profits Liguidated predetermined beforehand or as agreed upon Some Cases: A wife was about to deliver a child. Her parents-in-law called the doctor. The q uestion is who should pay the doctor? > The HUSBAND should pay, even if it was not him who called the doctor. It is hi s duty to support the wife, and support includes medical attendance. The duty to pay is an obligation to give, and is imposed by the law Some Cases: A borrower agreed to pay his debt, and in case of non-payment, to render free se rvice as a servant. Is the obligation valid?

Debt ied

an obligation to pay a sum of money arising from a contract express or impl

> subsidiary imprisonment in case of insolvency is not imprisonment due to non-p ayment of debt.

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