CHAPTER 2 

 
Nature and Effect of Obligations 
  ARTICLE 1163. Every person obliged to give 
  something is also obliged to take care of it with the 
  proper diligence of a good father to a family, unless 
  the law or the stipulation of the parties require 
  another standard of care.   
   
What are the two kinds  - Kinds of Obligation as to object 
of obligations   - Generic/Indeterminate 
(in terms of object)?  - when it refers only to a class or genus 
  and cannot be pointed out particularly 
  - Ex. I promise to give you a cellphone 
  - Specific/Determinate 
  - when it is particularly designated or 
physically segregated from all other of the 
same class 
- Ex. I promise to give you this cell phone 

Required Diligence in  - Required diligence in obligations to give 

Obligations to Give  - In all obligations to give, the obligor is required to 
  take care of the thing to be delivered with the 
  diligence in the following order: 
What are the levels  1. Required by the stipulations of the 
required to give?   parties 
○ A borrowed B’s favorite car 
■ B sets conditions 
■ “Guard it with your life” 
■ No longer diligence of a 
good father 
■ Higher level of diligence 
○ Chaperoning for younger sister 
■ “Don’t let her out of you 
sight” 
■ No longer ordinary 
diligence 
○ Being hired as a bodyguard 
■ Extraordinary diligence 
○ Safety deposit boxes 
2. Required by law 
○ Car accidents 

 
 ■ Driver always goes to jail 
■ Common carriers are 
required to perform 
ordinary and unordinary 
diligence 
○ Security in school 
■ Parens patriae 
■ Teachers are parents to 
students in school  
3. Diligence of a good father of a family 
○ Only in the absence of law or 
stipulations 
- Diligence of a good father of a 
family is often referred to as 
ordinary diligence. 

  ARTICLE 1164. The creditor has the right to the 

  fruits of the thing from the time the obligation to 
  deliver it arises. However, he shall require no real 
  right over it until the same has been deliver to him.  
   
What are the 3 kinds of 
- Fruits are the produce of the thing to be delivered. 
fruits? 
 
 
  - There are different kinds of fruits 
Natural  - Natural Fruits 
  - are the spontaneous products of the soil, 
  and the young and the other products of 
  animals 
  - Examples: 
  - Single mango 
 
- Dog 
Industrial 
- Industrial Fruits 
 
  - Intervention of man has taken place 
  - are those produce by lands of any kind 
  through cultivation or labor 
  - Examples: 
  - Orchard of mangoes ft. fertilizer 
  and irrigation processes 
  - Dog with registrations/certificate 
 
- Breeding production of the 
 
dog is no longer by 
 
  chance, natural 
Civil   - Civil Fruits 
- are those derived by virtue of a juridical 
relation   
- Example 

 
 - Money from rentals 

  - Rights over the fruit can be personal or real. 

   
Personal rights  - Personal rights  
  - mean that the obligee is entitled to the fruits but 
 
other than being entitled to it, the oblige cannot 
 
exercise any other rights 
 
  - Example: 
  - “I promise to give you a dog” 
  - He is obliged to give the dog 
  - No other rights but to ask for it 
  - No right to pet the dog 
  - Real rights 
Real rights  - mean that the oblige is not only entitled to the 
fruits but can enjoy all the other rights that 
comes with owning the fruits. 
- Example: 
- I may be entitled to a car upon 
graduation, but until I have gotten the car 
I cannot drive it or say I own it.   
- If the dog is pregnant and gives birth 
before it is given to you, the puppies are 
not yours 
- If the dog has been given to you 
and then it gives birth, the dog is 
yours 
- No real right until it is given to you 
- “The time when a personal right over the fruits, or 
any other property, becomes real is when the 
thing/fruit is actually delivered. 

  ARTICLE 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. 
 
- “I promise to give you this _____” 
- if debtor refuses to deliver, creditor can 
go to court and court will say to the 
debtor to get it and transfer to the creditor 
 
If the thing is indeterminate or generic, he may ask 
that the obligation to be complied with the expense 
of the debtor. 
 

 
 - Court: What did you promise to give? 
- Debtor: I will not give 
- Court: Sheriff go buy a cellphone and bill the 
debtor 
 
If the obligor delays, or has promise 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 affected delivery. 
 
- if you are in delay to give something, if anything 
happens it is not a fortuitous event 
- You are responsible 
- If you promise to give a dog to two people, your 
interest cannot exist side by side 

  ARTICLE 1166. The obligation to give a determinate 

  thing includes that of delivering all its accessions 
  and accessories, even though they may not have 
  been mentioned. 
   
 
- Selling a car but not the keys 
 
- Even if you did not talk about it, what you bought 
 
  should include everything  
   
Accession  - Accession 
  - fruits of a thing or addition to or improvements 
  upon a thing; not essential for the thing to work 
  - Example 
  - In cars, the accessions are mags, paint, 
 
anti-lock system,  
 
- In computers, the accessions are hard 
Accessories 
disk, memory 
- Accessories 
- essential for the thing to work 
- Example 
- in cars, the accessories are keys, engine, 
muffler in computers, drives, keyboard, 
monitor 

  ARTICLE 1167. If a person obliges to do something 

fails to do it; the same shall be executed at his cost. 
 
- This same rule shall be observed if he does do it in 
contravention of the tenor of the obligation.  

 
 - Furthermore, it may be decreed that what has been 
poorly done be undone. 
 
- Example: A promises to paint B’s wall but A 
refuses, court orders another to paint the wall 
- Court cannot force A to paint but get 
someone to paint and A will pay 
- A will now paint the wall but he paints n it 
black 
- It is in contravention of the tenor of the 
obligation 
- Court can ask another to paint 
- A paints it in the right color but in 
watercolor 
- It can be repainted and charged to A  
 
ARTICLE 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.   
 
- if you say you won't build a wall and you build a 
wall, it will torn down at your expense  

  ARTICLE 1169. Those obliged to deliver or to do 

something incur in delay from the time the obligee 
judicially or extrajudicially demand from them the 
fulfillment of their obligation 
 
- is there a delay if both forgot? No, because there 
is no demand  
- No demand, no delay 
 
- However, the demand by the creditor shall not be 
necessary in order that delay may exist: 
○ When the obligation or the law expressly so 
declares; 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 
- Time is of the essence  
○ When demand would be useless, as when the 
obligor has rendered it beyond his power to 
perform 

 
 - Even if you make the demand, I cannot 
deliver  
 
- In reciprocal obligations, neither parties incurs in delay if 
the other does not comply or is not ready to comply in a 
proper manner with what is incumbent upon him. From 
the moment one of the parties fulfill his obligation, delay 
by the other begins. 
○ Compensatio Morae 
○ Both delays 

Delay  - Delay 
  - Failure to deliver the object on time.   
  - Such delay may be classified as 
Ordinary  - Ordinary 
  - When the obligor has not delivered 
  it at the time of delivery 
Legal  - Legal 
- When after demand to deliver it, 
the obligor has failed to deliver 
- Generally, it is only when there had been a 
demand to deliver it, either judicially or 
extra-judicially, that the obligee may ask the law 
and the court to step in and enforce the terms of 
the obligations. 
- Sometimes, demand is not necessary for there to 
be legal delay. 

What are the 3 kinds of  Kinds of Delay 

delay?   
- Mora Solvendi 
 
- failure to comply with your obligation (to give or 
Mora Solvendi 
to do) 
  - Debtor fails to deliver  
Mora Accipiendi  - Mora Accipiendi 
- the delay on the part of the creditor to accept the 
 
performance of the obligation  
  - Creditor delays in acception 
Compensatio Morae 
- Compensatio Morae 
- the delay of the obligors in reciprocal obligation 

  ARTICLE 1170. Those who are in performance of 

  their obligations are guilty of fraud, negligence, or 
  delay, and those in any contravene the tenor thereof, 
  are liable for damages.  
   

 
Damages  1. Fraud 
  2. Negligence 
  3. Delay  
  4. Contravention 
 
a. Breach of contract 
 
 
 
  - Damages 
  - can be construed to be either 
  - The injury sustained by a party 
  - The Compensation to which a party is entitled to. 
  - In this Article, the damages referred to is the latter. 
What are the 4 ways  - (Discussion on details of Damages are in Art. 1159) 
damages can be asked? 

  - When can damages be asked: 

Fraud  1. Fraud (Dolo) 
  - dishonest practice or deception in an 
  obligation 
 
- Dolo Causante 
Dolo Causante 
- fraud existing at the time 
 
  the obligation was created 
  - A sells gold, when it was 
Dolo Incedental  sold it was fake 
  - Dolo Incedental 
  - fraud that existed after the 
  obligation was created 
  - A sells gold, when it was 
 
delivered it got switched 
 
with a fake 
 
Negligence  2. Negligence (Culpa) 
  - voluntary act or omission, there being no 
  malice, which prevents the normal 
  fulfillment of the obligation 
Culpa Aquiliana  - Culpa Aquiliana  
  - quasi-delicts 
Culpa Contractual  - Culpa Contractual  
- contractual negligence 
3. Delay 
4. Contravention of the terms 

  ARTICLE 1171. Responsibility arising from fraud is 

demandable in all obligations. Any waiver of an 
action for future fraud is void.   
 
- Waiver of future frauds are void. Waiver is when one 
gives up one’s rights 

 
 - *This is because fraud is so serious and evil that 
its employment to avoid the fulfillment of one’s 
obligation should be discouraged 
 
ARTICLE 1172. Responsibility arising from 
negligence in the performance of every kind of 
obligation is also demandable, but such liability may 
be regulated by the courts, according to the 
circumstances.   
 
- Fraud cannot be tampered 
- You can be negligent by a little but you cannot commit 
fraud by a little 
- Ex:parking a car under a tree during a typhoon, 
court will not hold the driver fully liable because 
there was an attempt to keep the car safe 

  ARTICLE 1173. The fault or negligence of the obligor 

  consists in the omission of that diligence which is 
  required by the nature of the obligation and 
  corresponds with the circumstances of the persons, 
  of the time and of the place. When negligence 
 
shows bad faith, the provisions of articles 1171 and 
 
2201 paragraph 2, shall apply. 
 
   
  - If the law or contract does not state the diligence which 
  is to be observed in the performance, that which is 
  expected of a good father of a family shall be required.  
   
  - If there is bad faith, it is fraud 
   
What is negligence? 
- Negligence  
 
- the failure to observe for the protection of the 
 
  interest of another person, that degree of care, 
  precaution and vigilance which the circumstance 
  justly demand, whereby such other person 
suffers injury 

How can you determine  - In determining whether there is negligence present in a 

if its negligence?  situation, one must take into consideration the following: 
1. Nature of the obligation 
2. Circumstances of the person 
3. Circumstances of time 
4. Circumstance of the place 

 
  ARTICLE 1174. Except in cases expressly specified 
  by the law, or when it is otherwise declared by 
  stipulation, or when the nature of the obligation 
  requires the assumption of risk, no person shall be 
  responsible for this events which could not be 
 
foreseen, or which, though foreseen, were inevitable.  
What are fortuitous 
 
events?   
  - Fortuitous Events  
- are any events which cannot be seen, or which 
Ordinary 
  though foreseen, is inevitable. 
  - Ordinary 
  - events which are common and which the 
  contracting parties could reasonably have 
Extra-Ordinary  foreseen 
- Example: 
- You can't do anything about the 
rain tomorrow 
- Extra-ordinary 
- events which are uncommon and which 
the contracting parties could not have 
reasonably foreseen (earthquake, fire, 
war, pestilence, unusual flood, etc.) 

  - Requisites for a Fortuitous event to exempt obligors: 

1. The event must be independent of the human will 
or at least the debtors will 
2. The event could not be foreseen, or if foreseen, is 
inevitable 
3. The fortuitous event must have affected 
obligation in such a way that the obligation can’t 
be delivered anymore 
4. The debtor must be free from any participation in 
the aggravation of the injury or loss  
 
- *one can be liable even without fortuitous event if he 
agreed on delivering a specific product to two person; 
as stated on article 1165 

  ARTICLE 1175. Usurious transactions shall be governed 

  by special laws.  
   
  - usurious aka loan sharking 
   
 
ARTICLE 1176. The receipt of the principal by the 
 
creditor without reservation with respect to the 
 

 
  interest, shall give rise to the assumption that said 
  interest has been paid. 
  The receipt of later installment of a debt without 
  reservation as to prior installment shall likewise raise 
 
the presumption that such installments have been 
 
paid.  
 
   
  - Payment of principal distinguishes obligation 
  - Example: loan of 50,000 
  - Primary obligation: payment 
  - Accessory obligation: pay interest  
Presumption  - You don't accept principal payment 
  without the interest 
 
 
- Presumption 
- meant the inference of a fact not actually known 
arising from it. 
- usual connection with another which is known 

2 Kinds of Presumptions  - Kinds of Presumptions 

Conclusive  - Conclusive Presumption 
  - one which cannot be contradicted 
  - Example:  
  - Tomorrow the sun will rise 
  - It is presumed that everyone 
  knows the law (ignorance excuses 
  no one) 
Disputable 
- Disputable (or Rebuttable) Presumption 
 
- one which can be contradicted or 
 
  rebutted by presenting truth to the contrar 
Prima Facie  - This is also referred to in law as prima 
facie 
- First fact 
- Note that in cases of presumptions, the only evidence 
needed to prove the presumption is the acceptability of 
a presumption.   
- Merely stating that there is a presumption is not 
sufficient to establish a fact if such presumption 
is not widely accepted. 

  ARTICLE 1178. Subject to the laws, all rights acquired 

to the virtue of an obligation are transmissible, if there 
has been no stipulation to the contrary.   
 

 
 - This means that rights acquired by a person by virtue of 
an obligation is fully transferable to another person 
provided: 
1. The law says otherwise 
2. The stipulation says otherwise