Oblicon - Chapter 2 - Nature and Effects of Obligation PDF

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CHAPTER 2NATURE AND EFFECTS OF OBLIGATIONART. 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.I. REAL OBLIGATION (OBLIGATION TO G...

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CHAPTER 2 NATURE AND EFFECTS OF OBLIGATION 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. I. REAL OBLIGATION (OBLIGATION TO GIVE) Specific or Determinate Thing - one which can be particularly designated or physically segregated from all others of the same class. EXAMPLES: (1) The watch I am wearing. (2) The car sold by X. (3) My dog named “Terror.” (4) The house at the corner of Rizal and Del Pilar Streets. (5) The Toyota car with Plate No. AAV 344. Generic or Indeterminate Thing - one which refers only to a class or genus to which it pertains and cannot be pointed out with particularity. EXAMPLES: (1) a Bulova calendar watch. (2) a 2006 model Japanese car. (3) a police dog. (4) a cavan of rice (5) the sum of P10,000.00. Duties of the obligor or debtor with respect to determinate or specific thing: 1. To deliver the thing itself GR: The debtor of a thing cannot compel the creditor to receive a different one, although the latter may be of the same value as, or more valuable than which is due. (Civil Code, Art. 1244, par.1) XPNs: a. By agreement or consent, the debtor may deliver a different thing or perform a different prestation in lieu of that stipulated (either a Dation in Payment or Objective Novation) b. Waiver of defect, the creditor with knowledge of defect accepts the thing without protest or disposes it. 2. Preserve the Thing with Due Care GR: 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. (Civil Code, Art. 1163)

XPNs: a. The law or stipulations of the parties require another standard of care. b. Common Carriers - In case of common carriers, which from the nature of their business and for reasons of public policy, is bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. c. Banks - In case of banks, wherein the degree of diligence required is more than that of a good of a family, where the fiduciary nature of their depositors is concerned. Diligence - the attention and care required of a person in a given situation and is the opposite of negligence. Kinds of Diligence 1. Simple Diligence 2. Extraordinary Diligence 3. Diligence of a Good Father of a Family (Bonos Pater Familia) - measure of prudence or activity as is properly expected from, and ordinarily exercised by a reasonable and prudent man under particular circumstances. 3.Deliver the Accessions and Accessories GR: Obligation to give a determinate thing includes that of delivering all its accession and accessories, even though they may not have been mentioned. (Civil Code, Art. 1166) XPNs: By contrary intention of the parties. Accession - is the right by virtue of which the owner of a thing becomes the owner of everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially. - the fruits of, or additions to, or improvements upon, a thing (the principal) Accessories - are things joined to or included with the principal thing for the latter’s embellishment, better use, or completion. Right of Accession - right corollary to ownership of property which gives the owner the right to everything produced by the property or which is

incorporated or attached thereto, either naturally or artificially. 4. To Deliver the Fruits GR: The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, there is no real right until the same has been delivered to him. Civil Code, Art. 1164, par.1) XPN: Obligations arising from contracts, a stipulation as regards the fruits shall govern. (CC, Art. 1306) When an obligation to deliver arises: a. If obligation is based on law, quasi-delict, quasi-contract or crime, the specific provisions of applicable law shall determine when the delivery shall be effected; or b. If obligation is based on contracts. GR: All fruits shall pertain to the vendee from the constitution or perfection of the obligation. (CC, Art. 1187) XPNs: i. Subject to a suspensive condition, it arises from the happening of the condition; ii. If there is a contrary stipulation of the parties with respect to the time when the thing or fruits shall be delivered. KINDS OF FRUITS: a. Natural Fruits - the spontaneous products of the soil, the young and other products of animals produced without intervention of human labor b. Industrial Fruits - those produced by lands of any kind through cultivation brought by an intervention of human labor c. Civil Fruits - those derived by virtue of juridical relation. Correlative Rights of the Obligee: 1. Right to Specific Performance 2. Right to Rescission or Resolution 3. Right to damages due to the ff: i. Fraud ii. Negligence in the performance of an obligation iii. Delay or Default iv. Any manner in contravention of the tenor of the obligation. GR: If due to fortuitous event, the obligor is not liable for failure to deliver.

XPNs:

a. Law b. Stipulation to the contrary i. Nature if the obligation requires assumption of risk ii. Fraud or malice (bad faith) iii. Debtor was already in delay when the fortuitous event took place. 4. Right to the fruits and interests from the time the obligation to deliver arises. Duties of the obligor or debtor with respect to generic or indeterminate thing: 1. To deliver the thing of the same quality intended by the parties, taking into account the purpose of the obligation, intent of the parties and other circumstances; and 2. To be liable for damages in case of breach due to delay, fraud, negligence or contravention of the tenor thereof. GR: To deliver a thing which is neither of superior nor inferior quality. XPN: When the purpose of the obligation and other circumstances shall have to be taken into consideration. Correlative Rights of the Obligee: 1. Right to ask for the performance of the obligation. 2. Right to ask that the obligation be complied with by a third person at the expense of the debtor. CC, Art. 1165) 3. Right to ask for rescission. 4. Right to damages due to: i. Failure to deliver ii. Fraud iii. Negligence iv. Delay v. Any matter in contravention of the tenor of the obligation II. PERSONAL OBLIGATION (OBLIGATION TO DO) - Positive Personal Obligation GR: In obligations to do or not to do, an act or forbearance cannot be substituted by another act or forbearance against the obligee’s will. (CC, Art. 1244, par.2) XPN: In facultative obligations, where the debtor reserves the right to substitute another prestation. Duties of the obligor in an obligation to do: 1. To do it 2. To shoulder the cost if someone does it 3. To undo what has been poorly done

4. To pay damages III. OBLIGATION NOT TO DO - Negative Personal Obligation Duties of the obligor in an obligation not to do 1. Not to do what should not be done 2. To shoulder the cost to undo what should not have been done 3. To pay damages

Rights of a creditor in personal obligations: “To Do or Not To Do’ Positive Personal Obligation (CC, Art. 1167) The creditors can: 1. Have the obligation performed or executed at the expense of the obligor (except when the prestation consists of an act where the personal or special qualification of the obligor is the principal motive for the establishment of the obligation. In such case, the remedy is an action for damages; 2. Ask that what has been poorly done be undone;and 3. Recover damages because of a breach of obligation.

Negative Personal Obligation (CC, Art. 1168) If the debtor does what has been forbidden him, the creditor shall have the ff remedies: 1. Have it undone at the expense of the debtor; 2. To ask for damages, where it would be physically or legally impossible to undo what has been undone, because of: a. the very nature of the act itself; b. Rights acquired by third persons which acted in good faith; c. When the effects of the acts prohibited are definite in character and will not cease even if the thing prohibited be undone.

Forms of breach of Obligation 1. Voluntary - arises either by fraud, negligence, delay and in any manner contravene to the tenor of the obligation. 2. Involuntary - arises due to fortuitous events 3. Substantial - amount to non-performance which is the basis for rescission and payment of damages, and 4. Casual - a part of the obligation has been performed and gives rise to liability for damages. Different Modes of Breach Those who in the performance of their obligation are guilty of fraud, negligence or delay and those

who in any manner contravene the tenor thereof, are liable for damages. (CC, Art.1170) 1. FRAUD (Dolo) - the voluntary execution of a wrongful act, or a willful omission which prevents the normal presentation of prestation, knowing and intending the effects which naturally and necessarily arise from such act or omission. - it implies some kind of malice and dishonesty and cannot cover cases of mistake and errors in judgement made in good faith. Effect of Fraud: Liability for damages. Waiver of Fraud: Responsibility arising from fraud is demandable in all obligations. Any waiver for future action for fraud is void. Kinds of Fraud: a. Fraud in the performance of the obligation. (CC, Art. 1171) b. Fraud in the execution / creation / birth of a contract: a. Dolo Causante (Causal Fraud) b. Dolo Incidente (Incidental Fraud) Dolo Causante - the fraud employed by one party prior to or simultaneous with the creation of the contract to secure the consent of the other. It is the fraud used by a party to induce the other to enter into a contract without which the latter would not have agreed to, taking into account the circumstances of the case. Incidental Fraud - fraud employed to secure the consent of the other party but which only renders the party who employs it liable for damages. 2. NEGLIGENCE (CULPA) The fault or negligence of the obligor consists in the omission of the diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and place (CC, Art. 1173, par. 1); any voluntary act or omission, there being no malice, which prevents the normal fulfillment of an obligation. In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation (CC, Art. 2201, par. 2)

Effects of Negligence:

a. Damages are demandable which the court may regulate according to circumstances; and b. Invalidates defense of fortuitous event. Kinds of Negligence: a. Civil Negligence i. Culpa Contractual - fault or negligence of obligor by virtue of which he is unable to perform his obligation arising from a preexisting contract; and ii. Culpa Aquilana/quasi-delict - fault or negligence of a person whose failure to observe the required diligence to the obligation causes damage to another. b. Culpa Criminal - fault or negligence which results in the commission of a crime. Culpa Culpa Aquilana Culpa Criminal Contractual Negligence is merely incidental to the performance of an obligation already existing because of a contract There is always a pre-existing contractual relation Breach or nonfulfillment of contract Requires proof by preponderance of evidence Defense of a good father of a family in the selection and supervision of employees is not a proper or complete defense, though it may mitigate damages

Proof of existence of a contract and breach thereof gives rise to a presumption of fault

Negligence is direct, substantive and independent

Negligence is direct, substantive and independent

There may or may not be a preexisting contractual relation Defendant’s negligent act or omission Requires proof by preponderance of evidence Defense of a good father of a family in the selection and supervision of employees is a proper or complete defense

No pre-existing contractual relation

Plaintiff has to prove negligence of the defendant

Defendant’s criminal act Requires proof beyond reasonable doubt Defense of a good father of a family in the selection and supervision of employees is not a proper defense. The employees guilt id automatically the employer’s guilt if the former is insolvent. Accused is presumed innocent until the contrary is proved

Fraud (Dolo) vs Negligence (Culpa) Fraud (Dolo) Negligence (Culpa) Willfulness or deliberate intent to cause damage or injury to another Liability cannot be mitigated by courts Waiver for future fraud is void

Mere want of care or diligence and not the voluntariness of act or omission Liability may be mitigated by courts Waiver for future negligence is valid if simple negligence but void if it is gross

Presumed from the breach of the contractual obligation

negligence Must be clearly proved

3. DELAY (MORA) - It refers to the non-fulfillment of obligation with respect to time. Civil Code, Art. 1169. Those obliged to deliver or to do something incur delay from the time the obligee judicially or extra-judicially demands from them the fulfillment of their obligation. GR: Without demand, judicial or extra-judicial, the effect of default will not arise. XPNs: a. When the obligation or law expressly so declares; b. When from the nature and circumstances of the obligation it appears that the designation of the time when the thing to be delivered or the services to be rendered was a controlling motive for the establishment of the contract. c. When demand would be useless: i. Caused by some act or fault of the debtor ii. Impossibility caused by fortuitous event. Delay in Reciprocal Obligations In reciprocal obligations, neither party incurs delay if the other does not comply or is nt ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties, delay by the other begins. Requisites in order to consider the Obligor in Default a. Obligation is demandable and already liquidated; b. The obligor/debtor delays performance c. The creditor requires performance judicially or extra-judicially Grace Period - it s a period immediately after the due date for an obligation during which payment may be made without penalty. - it is not an obligation of the debtor but a right.

Kinds of Delay: a. Mora Solvendi b. Mora Accipiendi c. Compensation Morae Mora Solvendi - delay on the part of the debtor by not performing his obligation after a demand or specified time and may either be: i. Ex Re - obligations to give...