Module 2

A. Course Code – Title : Law 1-3 – Law on Obligations & Contracts

B. Module No. – Title : MO2 – Nature and Effect of Obligation
C. Time Frame : One week – 3 hours
D. Materials : Course Syllabus / Outline

1.​ ​Overview

This handout contains a summary discussion of the nature and effects of the kinds of
prestation as an essential element of civil obligation, and the rights and obligations of the
parties in obligation to give, obligation to do and obligation not to do.

Students taking up this course are highly encouraged to read and study carefully the
prescribed textbook and to use this handout together with the online lecture and
discussions as supplementary tools in learning and understanding the subject course..

2.​ ​Desired Learning Outcome

After the discussion, students are expected to learn and understand the following:

a. The kinds of prestations of civil obligation;

b. The different objects / things including the fruits in civil obligation;
c. Concept and kinds of delivery in relation to personal right and real right;
d. The rights and obligations of the parties in obligations to give, obligations to do and
obligations not to so/

3.​ ​Content / Discussion

Lesson 3 – PRESTATIONS

A PRESTATION is the object of an obligation and it is the conduct required by the parties to do or
not to do, or to give. Not the thing or object, but the particular conduct oF the debtor which may
consist in giving, doing or not giving or not doing something.

Kinds of Prestations

1. To give – a prestation which consists in the delivery of a movable or an immovable thing in

order to create a real right or for the use of the recipient or for its simple possession or in
order to return it to its owner.
2. To do​ – includes all kinds of work or service.
3. Not to do – consists in abstaining from doing some act. This obligation includes the
obligation “not to give”.

OBLIGATION TO GIVE

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In obligation to give, the obligee or creditor has a right to the thing which is the object of the
obligation as well as to the fruits thereof from the time the obligation to deliver it arises (Art. 1164,
NCC).

Question​: When does the obligation to deliver the thing and the fruits arise?
Answer​: ​General Rule​: The obligation to deliver arises from the time of the perfection of the
contract. ​Exceptions:​
1. If the obligation is subject to suspensive term or period. It arises upon the fulfillment of the
suspensive condition or arrival of the period. (Note: the parties may make a stipulation to
the contrary as regards the right of the creditor to the fruit of the thing);
2. If the obligation is based on a source other than a contract. The specific provision of
applicable law shall determine when the delivery of the thing shall be effected.

Question​: If the creditor has a right to the thing as well as to the fruits thereof from the time the
obligation to deliver it arises, what is the nature of such right?
Answer​: Before answering the question, you should know, learn and understand first the difference
between personal right and real right.

Personal Right ​– This is a right that may be enforced by one person on another, such as the
right of the creditor to demand the delivery of the thing and its fruits from the debtor This is
also called ​jus in personam ​or ​jus ad rem.

Real Right –​ This refers to the right or power over a specific thing, such as possession or
ownership, which is a right enforceable against the whole world. This is the right acquired
by the creditor over the thing and its fruits when they have been delivered to him. This is
also called ​jus in re.

It is clear from these definitions that before delivery, the creditor, in obligations to give, has merely
a personal right against the debtor – a right to ask for delivery of the thing and the fruits thereof.
Once the thing and the fruits are delivered, then he acquires a real right over them, a right which is
enforceable against the whole world. Under Art. 1164, although the creditor acquires a right to the
fruits of the thing from the time the obligation to deliver it arises, he does not acquire any real right
over it until the same has been delivered to him.

Delivery

Delivery is an act by which one party part with the title to and the possession of the property, and
the other acquires the right to and possession of the same.

Purpose of Delivery

The purpose of delivery is not only for the enjoyment of the thing but also a mode of acquiring
dominion and determines the transmission of ownership, the birth of the real right.

Kinds of Delivery

1. Actual Delivery (Tradition)

In sale, for example, actual delivery of the thing sold occurs when it is placed under the
control and possession of the vendee.

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 2. Constructive delivery
Where although physical possession is not placed in the hands of the oblige, it is
nevertheless irrevocably placed in his effective control.

a) ​Tradition Symbolica (Symbolic tradition) – As when the keys of a bodega are

given
b) ​Traditio Longa Manu – ​delivery by mere consent or the pointing out of the object
c) ​Tradition brevi manu – whereby the possessor of a t​ hing is constituted as owner
thereof;
Example: The lessee who had been living in a house for 10 years becomes absolute
owner upon payment of the last installment of a rent-to-own contract
d) ​Constitutum possessorium – ​the opposite of ​brevi manu ​where the owner is made
into a mere possessor thereof
e) ​Delivery of Instrument or Document of Title – T ​ he delivery of a document
evidencing title to the thing, such as a negotiable warehouse receipt.

The obligation to deliver may be an obligation to deliver:

1. Specific or Determinate Thing
2. Generic Thing
3. Limited Generic

Specific or Determinate Thing

A thing is determinate when it is particularly designated or physically segregated from all others of
the same class.

Thing Deemed Specific, Determination Does Not Require Subsequent Agreement.

The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the
thing is capable of being made determinate without the necessity of a new or further agreement
between the parties.

Generic or Indeterminate Thing

A thing is generic or indeterminate in the sense that it is designated merely by its class or genus
without any particular designation or physical segregation from all others of the same class, the loss
or destruction of anything of the same kind even without the debtor’s fault and before he has
incurred in delay will not have the effect of extinguishing an obligation.

Limited Generic Thing

When the generic objects are confined to a particular class. The class is considered in itself a
determinate object

Example: An obligation to deliver one of my horses because the things is limited to the horses
owned by the debtor and he cannot deliver any horse not owned by him.

SPECIFIC V. GENERIC OBJECT

Specific Generic

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 “X’s blue car” A car

“The P100 bill bearing the autograph of P100.00

celebrity popstar X”

“A healthy male horse from X’s stable” A horse

“The harvest of this rice land in the next 100 sacks of jasmine rice
harvest season”

SPECIFIC V. GENERAL OBLIGATION

Specific Generic

As to obligation to deliver

The obligor must deliver the very thing The obligor may deliver any thing from the
promised same class which is neither superior or
inferior in quality

As to effect of loss

Loss of the thing extinguishes the Can never be affected by loss because things
obligation to deliver, without prejudice to of the same class, kind and quality can be
Article 1170 delivered

As to remedy in case of delay or breach

Right to compel delivery of the thing itself Right to compel delivery or right to charge
the expense of compliance by another

LIMITED GENERIC V. GENERIC OBLIGATION

Limited Generic Generic

As to obligation to deliver

The obligor must deliver the generic The obligor may deliver any thing from the
object from a particular class same class which is neither superior nor
inferior in quality

As an illustration

An obligation to deliver one of the An obligation to deliver a car

debtor’s cars

Rights of the Creditor in Determinate Obligation to Give​:

1. To compel specific performance. This right is recognized by the first paragraph of Art. 1165,
which provides that “When what is to be delivered is a determinate thing, the creditor, in
addition to the right granted him by Art. 1170, may compel the debtor to make the delivery.

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 This is complemented by Art. 1244 which states that 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, that what is due. In case of default of the debtor, the remedy of the
creditor is to file an action against the debtor for specific performance.

2. To recover damages for breach of the obligation.​ Besides the right to compel specific
performance, the creditor has also the right to recover damages from the debtor in case of
breach of obligation through delay, frud, negligence or contravention of the tenor thereof.
(Note: the remedies are not incompatible which each other. Hence, the creditor may file an
action for specific performance under Art. 1165 first par. and at the same time damages
under Art. 1170).

Rights of the Creditor in Generic Obligation to Give​:

1. To ask for the performance of the obligation​. Whether the object of an obligation to give is
determinate or generic, it is undeniable that the the creditor has the right to ask for the
performance of the obligation. The only difference is that in determinate obligation to give,
the creditor can compel specific performance, while in generic obligations to give , he can
only ask for the delivery of a thing or object belonging to the class or genus stipulated which
must be neither of superior nor inferior quality (Art. 1246).
2. To ask that the obligation be complied with at the expense of the debtor​. If the debtor refuses
or is unable to comply with the obligation, the creditor can even ask that the obligation be
complied with at the expense of such debtor (Art. 1165, par. 2).
3. To recover damages for breach of the obligation.​ In case of failure of the debtor to comply
with his obligation, or in case of breach by reason of delay, fraud, negligence or
contravention of the tenor of the obligation, the creditor can demand for indemnification for
damages (Art. 1170).

Obligation of Debtor in Determinate Obligation to Give​:

1. To perform the obligation specifically​. In obligations to give a determinate thing, the obligor
or debtor binds himself to deliver to the obligee or creditor a thing or object which is
particularly designated or physically segregated from all others of the same class. Hence, he
cannot comply with his obligation by delivering a thing which is different from that which is
designated although belonging to the same class or genus. This is so even though the thing
delivered may be of superior quality.

2. To take care of the thing with proper diligence of a good father of a family. This accessory
obligation which is expressly imposed upon the debtor by the provision of Article 1163 of
the Code and which is applicable only to determinate obligations and not to generic ones, is
established merely for the purpose of insuring efficacy and performance of the obligation.
As a general rule, the standard of care which must be exercised for the preservation of the
thing must be the diligence of a good father of a family. This rule, however, is subjected to
two exceptions. The first is if the law requires another standard of care. The second is if the
parties stipulate another standard of care.

3. To deliver all accessions and accessories of the thing, even though they may not have been
mentioned. This accessory obligation is expressly imposed upon the debtor by the provision
of Article 1166 of the Code.

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 a. ​Accessions – They include everything that is produced by a thing or is incorporated
or attached thereto, either naturally or artificially, such as ​alluvium, t​ he soil gradually
deposited by the current of a river on a river bank, or whatever is built, planted or sown
on a parcel of land.
b. ​Accessories ​– Those joined to or included with the principal thing for the latter’s
better use, perfection or enjoyment (such as the keys to a car or a house, or the bracelet
of a wristwatch)

4. ​To deliver the fruits of the thing. ​(Art. 1164).

Kinds of Fruits
a. ​Natural Fruits​- They are the spontaneous products of the soil and the young and
other products of animals. Thus, the trees that grow naturally on the soil without
intervention of man and the colt delivered by a mare are natural fruits. For the young
and other products of animals, they are natural fruits even with the intervention of
human labor.
b. ​Industrial Fruits – They refer to those produced by land of any kind through
cultivation or labor. Examples are rice, corn and other crops produced through the
intervention of human labor.
c. Civil Fruits ​– they refer to fruits which are the result of a juridical relation such as
the rent of a building, price of lease of land and other property and the amount of
perpetual or life annuities.

5. ​To be liable for damages in case of breach of the obligation by reason of delay, fraud,
negligence or convention of the tenor thereof. This obligation is expressly imposed upon the
debtor by the provision of Article 1170 of the code. It must be noted, however, that this
liability does not arise if the breach is due to a fortuitous event. In other words, such liability
extends only to a breach which is voluntary in character, and not to one which is
involuntary.

Obligation of the Debtor in Generic Obligations to Give:

1. To deliver a thing which is neither of superior nor inferior quality. Consequently, the
creditor cannot demand a thing of superior quality; neither can the debtor deliver a thing of
inferior quality. However, in the determination of the quality of a thing which is to be
delivered, the purpose of the obligation and other circumstances shall have to be taken into
consideration.

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. This liability includes the obligation to
reimburse all expenses incurred by the creditor in those cases where the latter avails of the
right to as a third person to perform the obligation at the expense of the debtor. It must be
noted, however, that the doctrine enunciated in Article 1174 of the Code, by virtue of which
the obligation is extinguished in the case object thereof is lost or destroyed through a
fortuitous event, it is not applicable to this type of obligation.

OBLIGATION TO DO

Three situations contemplated under Art. 1167 which refers to an obligation to do:
1, The debtor fails to perform an obligation to do;
2. The debtor performs an obligation to do, but contrary to the terms

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 thereof; or
3. The debtor performs an obligation to do but in a poor manner.

A personal obligation to do, like a real obligation to deliver a generic thing, can be performed by a
third person.

In obligation to do (positive personal obligations), if the obligor fails to do that which he has
obligated himself to do, the oblige can have the obligation performed or executed at the expense of
the former., and at the same time, demand for damages by reason of the breach.

Unlike obligations to give, in obligations to do the obligee does not possess the power to compel the
obligor to comply with the obligation. In this type of obligation, the law recognizes the individual’s
freedom or liberty to choose between doing that which he has promised to do and not doing it. It is
a personal act, of which courts may not compel compliance as it is considered an act of violence to
do so. Consequently, since compliance or fulfillment can only be voluntary, the Code, in the first
paragraph of Art. 1167 has granted a remedy to the oblige to have the obligation performed or
executed at the expense of the debtor

It must be observed, however, that the right of the obligee to have the prestation executed at the
expense of the obligor cannot be availed of when such prestation consists of an act where the
personal and special qualification of the obligor is the principal motive for the establishment of the
obligation.. In such case, there is no other remedy of the obligee except to proceed against the
obligor for damages under Art. 1170.

If there has been performance of the obligation, but in contravention of the tenor thereof, the
following rights are available to the oblige: (1) To have the obligation performed or executed at the
expense of the obligor; (2) To ask that what has been poorly done be undone; and (3) To recover
damages because of breach of the obligation.

OBLIGATION NOT TO DO

In obligation not to do (negative personal obligations), the object of the obligation is fulfilled or
realized so long as that which is forbidden is not done by the obligor. If the obligor does what has
been forbidden him, two remedies are available to oblige: (1) to have it undone at the expense of
the obligor in accordance with Art. 1168; (2) to ask for damages in accordance with Art. 1170.

When remedy to compel undoing not available:

1. Where the effects of the act which is forbidden are definite in character Even if it is possible
for the oblige to ask that the act be undone at the expense of the obligor, consequences
permanent in character and contrary to the object of the obligation will be produced.
2. Where it is physically or legally impossible to undo what has been done because of the very
nature of the act itself or of a provision of law, or because of conflicting rights of third
persons.

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 4.​ ​Progress Check

a. What are the kinds of prestations?

b. Distinguish determinate object vs. generic object
c. Distinguish personal right vs. real right

5.​ ​Assignment (optional)

Read and understand Chapter 2 – Nature and Effects of Obligation (Article 1163 to Article
1168, New Civil Code), including the comments / discussions / cases cited in your textbook
(Law on Obligations and Contracts by Professor Hector De Leon).

6.​ ​Assessment

Briefly explain the rights and obligations of the parties in real and personal obligations.

7.​ ​References

a. Jurado, Comments and Jurisprudence on Obligations and Contracts, 1983 Revised

Edition
b. Soriano, Notes in Business Law, 2011 Edition
c. Memory Aid in Civil Law, San Beda University, College of Law, 2019 Edition
d. Related Supreme Court Decisions on Obligations and Contracts

Prepared by:

Atty. Arnel S. Santos

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