OBLIGATIONS I Definition
VI. Nature and Effect of obligations
A. Obligation to give702
1. A determinate or specific thing
When what is to be delivered is a determinate thing, the creditor, in addition to the
right granted him by Article 1170,703 may compel the debtor to make the delivery.704
The obligation to give a determinate thing includes that of delivering all its
accessions and accessories, even though they may not have been mentioned.705
2. An indeterminate or generic thing
If the thing is indeterminate or generic, he may ask that the obligation be complied
with at the expense of the debtor.706
B. Obligation to do or not to do
Obligations to do In Obligations not to do
If a person is obliged to do something, it must be done as promised, and it cannot be substituted by another act or forbearance against the obligee’s will707. If the obligor fails to do it, the same shall be executed at
his cost708 albeit he may not be compelled to
do so personally or by himself.
This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed
When the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be undone at his
expense.710
702 Three Accessory Obligations:
1. To take care of the thing w/ the diligence of a good father of a family until actual delivery.(Art. 1163)
2. To deliver the fruits to the creditor (fruits produced after obligation to deliver arises).(Art. 1164) 3. To deliver accessions and accessories(Art. 1166)
703 See reference 704 Art. 1165, 1st par. 705 Art. 1166
706 Art. 1165 , 2nd par. 707 see Art. 1244
169 that what has been poorly done be undone.709
C. Breaches of obligations
1. Complete failure to perform
Debtor is unable to comply with his obligation because of fortuitous event.711
2. Default, delay or mora712 – no default unless creditors makes a demand;713
exceptions
1. Obligation or law expressly so declares 2. Time is of the essence of the contract
3. Demand is useless as when obligor has rendered beyond his power to perform 4. There is acknowledgment of default.
In reciprocal obligations, one party incurs in delay from the moment the other party fulfills his obligation, while he himself does not comply or is not ready to comply in a
proper manner with what is incumbent upon him.714
a. Mora solvendi
Delay of the debtor to perform his obligation. It may be:
1. Ex re – obligation is to give 2. Ex persona – obligation is to do715
710 see Art. 1168; Cui vs. Chan, 41 Phil. 523 709 Art. 1167
711 debtor is not liable for damages
712 Non-fulfillment of the obligation with respect to time
713 There must be a demand (judicial or extra-judicial) before delay may be incurred. 714 see Art. 1169
The general rule is that fulfillment by both parties should be simultaneous except when different dates for the performance of obligation is fixed by the parties.
Demand is still necessary if their respective obligations are to be performed on separate dates.
715 There can be delay only in positive obligations (to give/to do). There can be no delay in negative obligations (not to give/not to do).
170 b. Mora accipiendi
Delay of the creditor to accept the delivery of the thing w/c is the object of the obligation
c. Compesatio morae
Delay of the parties or obligors in reciprocal obligation.
3. Fraud in the performance of obligation716
a. Waiver of future fraud is void
Responsibility arising from fraud is demandable in all obligations. Any waiver of an
action for future fraud is void.717
4. Negligence (culpa)718 in the performance of obligation
a. Diligence normally required is ordinary diligence or diligence of a good father of a family
b. Exceptions: common carriers which are required to exercise extraordinary diligence
5. Contravention of the tenor of obligation
The faithful observance of an obligation according to its tenor is mandated by law; an unexcused failure thereof renders the obligor liable for losses and damages caused thereby.719
716 Deliberate and intentional evasion of the fulfillment of an obligation 717 Art. 1171
Future fraud cannot be waived because it would result to illusory obligation.
718 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
Negligence can be waived unless the nature of the obligation or public policy requires extraordinary diligence as in common carrier.
171
6. Legal excuse for breach of obligation – fortuitous event; requisites
Fortuitous event720- an event which could not be foreseen or which though
foreseen, was inevitable. Requisites:
1. cause is independent of the will of the debtor721
2. the event must be unforeseeable or unavoidable
3. occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner
4. debtor must be free from any participation in the aggravation of the injury
resulting to the creditor722
720 General Rule: No liability in case of fortuitous event. Exceptions:
1. When expressly declared by law (e.g. Article 552(2), 1165(3), 1268, 1942, 2147, 2148 and 2159 of the Civil Code.)
2. When expressly declared by stipulation or contract
3. When the nature of the obligation requires the assumption of risk
4 When the obligor is in default or has promised to deliver the same thing to 2 or more persons who do not have the same interest [Article 1165(3)].
721 It must not only be the proximate cause but it must be the only and sole cause. 722 Lasam vs. Smith, 45 Phil. 657
172
D. Remedies available to creditor in cases of breach
1. Specific Performance723
When what is to be delivered is a determinate thing, the creditor, in addition to the
right granted him by Art 1170,724 may compel the debtor to make the delivery.725
a. Substituted performance by a third person on obligation to deliver generic thing and in obligation to do, unless a purely personal act
Obligation to give generic thing Obligation to do
If the thing is indeterminate or generic, he may ask that the obligation be
complied with at the expense of the debtor.726
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 done poorly be
undone.727
723 in obligation to give specific thing 724 indemnification for damages
725 Art. 1165, par 1; see also ROC Rule 39, Sec 10 726 Art 1165, Par 2
Delivery of anything belonging to the species stipulated will be sufficient.
Debtor cannot avoid obligation by paying damages if the creditor insists on the performance. 727 Art. 1167
The court has no discretion to merely award damages to the creditor when the act can be done in spite of the refusal or failure of debtor to do so.
Exception: Imposition of personal force or coercion upon the debtor to comply with his obligation - tantamount to involuntary servitude and imprisonment for debt
173 2. Rescission728
The power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.729
The injured party may choose between the fulfillment and the rescission of the
obligation,730 with the payment of damages in either case. He may also seek rescission, even
after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385731 and 1388732 and the Mortgage Law.733
In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each
shall bear his own damages.734
728 resolution in reciprocal obligations
Only applies to reciprocal obligations, where there is “reciprocity” between the parties i.e. creditor debtor relations arise from the same cause or “identity of cause”.
Reciprocal obligations have a “tacit resolutory condition” 729 Power to rescind:
Pertains to the injured party, party who did not perform not entitled to insist upon the performance of the contract by the defendant or recover damages by reason of his own breach
Rights of injured party subordinated to the rights of a 3rd person to whom bad faith is not imputable Not absolute, not permitted in casual/slight breach, may only be claimed in substantial breach (Song Fo v. Hawaiian Philippines)
Rescission requires judicial approval to produce legal effect
Exception: object is not yet delivered and obligation has not yet been performed
If the obligation has not yet been performed: extrajudicial declaration of party willing to perform would suffice; can refuse to perform if the other party is not yet ready to comply
If the injured party has already performed: cannot extrajudicially rescind IF the other party opposes the rescission (otherwise, rescission produces legal effect). In the case the other party impugns rescission, the court comes in either to: a. Declare the rescission as properly made b. Give a period to the debtor in which to perform
730 The remedy is alternative. Party seeking rescission can only elect one between fulfillment and rescission. There can be no partial performance and partial rescission.
731 See Reference 732 ibid
733 Art. 1191 734 Art. 1192
174 3. Damages, in any event
In case of breach of the obligation,735 exclusive or in addition to specific
performance.
4. Subsidiary remedies of creditors
a. Accion subrogatoria736
Action which the creditor may exercise in place of the negligent debtor in order to preserve or recover for the patrimony of the debtor the product of such action, and then
obtain therefrom the satisfaction of his own credit.737
b. Accion pauliana738
Creditors have the right to set aside or revoke acts which the debtor may have done to defraud them. All acts of the debtor which reduce his patrimony in fraud of his creditors, whether by gratuitous or onerous title, can be revoked by this action.
c. Accion directa739
Right of the lessor to go directly to sublessee for unpaid rents of the lessee.740
Right of the laborers or persons who furnish materials for a piece of work undertaken by a contractor to go directly to the owner for any unpaid claims due to the contractor.741
735 Art. 1170; See Reference
Recoverable damages include any and all damages that a human being may suffer. Responsibility for damages is indivisible
736 An action against the debtor’s debtor 737 subrogatory action; See Art. 1177
Previous approval of court is not necessary
Plaintiff entitled only to so much as is needed to satisfy his credit, any balance shall pertain to the debtor
Patrimony of the debtor (includes both present and future property) is liable for the obligations he may contract by being a legal guaranty in favor of his creditors. Hence, he cannot maliciously reduce such guaranty
738 rescissory action
An action to rescind contracts entered into by the debtor in fraud of creditors ( Arts. 1177, last sentence and 1381, par. 3, See Reference
Payments of pre-existing obligations already due, whether natural or civil, cannot be impugned by an
accion pauliana
739 Arts. 1652, 1608, 1729 & 1893; see reference 740 See Art. 1652
175
VII. Kinds of Civil Obligations