Obligations and Contracts
C. Nature and Effect of Obligations
1. Article 1163 – Every person obliged to give something is also obliged to take care of it with proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. 2. Specific/Determinate thing vs. Generic Thing
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 Sept 12, 2005
c. the car with a plate number 1814
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 2005 BMW automobile
c. the sum of 5 million
d. a kilo of sugar
3. Applicability of Art. 1163 – duty to exercise diligence. This article deals with the first obligation to deliver a determinate thing – the duty to exercise proper diligence. Unless diligence is exercised, there is danger that the property would be lost or destroyed, thus rendering illusory the obligation. 4. Standard of Care
1. General Rule – that which is required by the nature of the obligation and corresponds with the circumstances of person, time, and place. This is really diligence of a good father of a family.
2. Exception – if the law or contract provides for a different standard of care, said law or stipulation must prevail. 5. Factors to Consider
1. Chaves vs Gonzales G.R. No. L-27454
2. Piczon vs Piczon G.R. No. L-29139
7. Obligations to give
1. Determinate things
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.
a. Real right vs Personal right
– Real right (jus in re) – is a power over a specific thing (like the wight or ownership or possession) and is binding on the whole world.
– Personal right (jus ad rem/jus in personam) – a power demandable by one person of another – to give, to do or not to do.
b. Kinds of Delivery
Actual Delivery (tradition) – where physically, the property exchanges hands. Ex. “if A sells B a fountain pen, the giving by A to B of the fountain pen is actual tradition.
Constructive delivery – where physical transfer is implied. This may be done by :
1. Tradition simbolica (symbolical tradition) – as when the keys of a bodega are given.
2. Tradition longa manu (Delivery by mere consent or the pointing out of the object)(Etymoogically, the extending of the hand) – pointing out the car, which is the object of the sale.
3. Traditio brevi manu – (Delivery by the short hand; that kind of delivery whereby a possessor of a thing not as an owner, becomes the possessor as the owner) – when a tenant already in possession buys the house he is renting.
4. Tradition consistutum possessorium – the opposite of brevi manu; thus the delivery whereby a possessor of a thing as a n owner, retains possession no longer as an owner but in some other capacity. Ex: a house owner who sells a house but remains in possession as tenant of the same house.
5. Tradition by the execution of legal forms and solemnities – like the execution of a public instrument selling lan. NOTE : A SALE WHICH IS
SIMULATED, OR EVEN A GENUINE ONE, WHERE THERE IS NO DELIVERY OF THE OBJECT, DOES NOT TRANSFER OWNERSHIP.
c. When does the Obligation to deliver arise? It depends.
a. if there is no term or condition, then from the perfection of the contract.
b. if there is a term or a condition, then from the moment the term arrives or the condition happens.
1. San Lorenzo Development Corp vs CA
e. 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.
1. Classification of obligations according to subject matter
Real obligations (to give)
– to give a specific thing (set apart from a class)
– to give a generic or indeterminate thing (one of a class)
Personal obligations (to do or not to do)
2. Generic thing vs Specific Thing
3. Remedies of Creditor in a Specific Real Obligation
a. demand specific performance (or compliance) of the obligation (generic or specific)
b. demand rescission or cancellation
c. demand damages either with or without the first two (a and b)
4. Remedies of the Creditor in a Generic Real Obligation
5. Effect of Fortuitous Events
Specific obligation (obligation to deliver a specific thing) can be extinguished by a fortuitous event.(Act of God)
Generic Obligations can never be extinguished by fortuitous events.
1. if the obligor delays (this is default or mora)
2. if the obligor is guilty of bad faith
6. Ordinary delay vs Legal delay (default)
Ordinary delay – non performance at the stipulated time.
Legal delay (Default) –a delay that amounts to a virtual non fulfillment of the obligation. ( as a rule, to put the debtor in default, there must be a demand for fulfillment, the demand being either judicial or extrajudicial.)
f. Art 1166 – Art. 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.
case : Caleon vs Agus Developmet Corp
2. Generic Things
1. Rights of Creditor in Generic Obligations
8. Obligations to do/not to do, Art 1167-1168
b. Remedies of the Creditor if Debtor fails to do
-to have the obligation performed at the debtor’s expense
– to obtain damages (damages alone cannot substitute for performance if owners can do it; if purely personal or special- as a painting done by a reputed artist – only damages may be asked unless substitution is permitted.) NOTE : specific performance is not a remedy in personal obligations, otherwise this may amount to involuntary servitude which is prohibited by our constitution.
c. when may a thing be ordered undone
– if made poorly (art 1167; performance by another and damages may be demanded.)
– if the obligation is a negative one (provided that the undoing is possible)
d. case : Tanguilig vs CA G.R. No. 117190