TOPICS UNDER THE SYLLABUS B. NATURE AND EFFECT OF

In document 2012 Ateneo Civil Law Summer Reviewer (Page 106-112)

B. NATURE AND EFFECT OF OBLIGATIONS

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TOPICS UNDER THE SYLLABUS B. NATURE AND EFFECT OF OBLIGATIONS

1. Obligation to give

A. A determinate or specific thing B. An indeterminate or generic thing

2. Obligation to do or not to do 3. Breaches of obligations

A. Complete failure to perform B. Default or Delay (Art. 1169)

B.1. Mora solvendi B.2. Mora accipiendi B.3. Compesatio morae C. Fraud

C.1. Waiver of future fraud is void (Art. 1171)

D. Negligence

D.1. Ordinary Diligence D.2 Exceptions

E. Contravention of the tenor of obligation

F. Fortuitous Event

4. Remedies of Obligations A. Specific Performance

A.1. Substituted performance by a third person on obligation to deliver generic thing and in obligation to do, unless a purely personal act

B. Rescission (resolution in reciprocal obligations) C. Damages, in any event

D. Subsidiary remedies of creditors (Art. 1177)

D.1. Accion subrogatoria D.2. Accion pauliana

D.3. Accion directa (Arts. 1652, 1608, 1729, 1893)

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TOPICS UNDER THE SYLLABUS B. NATURE AND EFFECT OF OBLIGATIONS

1. Obligation to give

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Personal Obligations: obligations to do or not to do; where the subject matter is an act to be done or not to be done

a. Positive – obligation to do b. Negative – obligation not to do

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Real Obligations: obligations to give; where the subject matter is a thing which the obligor must deliver to the obligee

a. Determinate or specific – object is particularly designated or physically segregated from all other things of the same class

b. Generic –object is designated by its class or genus

c. Limited Generic – generic objects confined to a particular class

a. Ex: An obligation to deliver one of my horses (Tolentino, Volume IV, p. 91; De Leon, 2003 ed., p. 7) 1. OBLIGATION TO GIVE

A. DUTIES OF OBLIGOR IN AN OBLIGATION TO GIVE A DETERMINATE THING (Arts.

1163, 1164, 1166.)

To preserve or take care of the thing due with the diligence of a good father of a family EXCEPTION: if the law requires or the parties stipulate another standard of care

B. DUTIES OF OBLIGOR IN AN OBLIGATION TO GIVE A GENERIC THING (Arts. 1246 AND 1170)

To deliver the thing of the quality intended by the parties, taking into consideration the purpose of the obligation, intent of the parties, and other circumstances;

To be liable for damages in case of fraud, negligence, or delay, in the performance of his obligation, or contravention of the tenor thereof.

1. To deliver the fruits of the thing: Right to the fruits of the thing from the time the

obligation to deliver it arises;

2. To deliver its accessions and accessories (Art. 1166)

a. Accessions – additions to or improvements upon a thing. Ex: air conditioner in a car.

b. Accessories – things joined to, or included with the principal thing for its better use, embellishment or completion. Ex: key of a house; frame of a picture (De Leon, 2003 ed., pp. 37-38)

3. To deliver the thing itself (Specific Performance)

4. To pay damages in case of breach of the obligation by reason of delay, fraud, negligence or contravention of the tenor of the obligation.

RIGHTS OF THE CREDITOR TO THE FRUITS 1. Before Delivery – personal right

2. After Delivery – real right

RIGHTS OF THE CREDITOR IN REAL OBLIGATION TO GIVE (Art. 1165)

1. GENERIC REAL OBLIGATION (Obligation to deliver a generic thing):

a. To ask for performance of the obligation b. To ask that obligation be complied with at the expense of the obligor

c. To recover damages in case of breach of obligation

NOTE: A generic real obligation can be

performed by a third person since the object is expressed only according to its family or genus.

2. DETERMINATE OR SPECIFIC REAL OBLIGATION (Obligation to deliver a determinate thing):

a.To demand specific performance or fulfillment (if it is still possible) of the obligation with a right to indemnity for damages

b. To demand rescission of the obligation with right to recover damages

c.To demand payment of damages when it is the only feasible remedy

d. 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 delivery.

NOTE: In an obligation to deliver a determinate thing, the very thing itself must be delivered and consequently, only the debtor can comply with the obligation.

WHEN OBLIGATION TO DELIVER THE THING AND FRUIT ARISES

1. If the source of the obligation is law, quasi-contract, delict, quasi-delict, it arises from the time designated by the law creating or regulating them;

2. If the source is contract, it arises from the time of the perfection of the contract (i.e.

meeting of the minds between the parties), unless

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a.the parties made a stipulation to the contrary,

b. the obligation is subject to a suspensive condition or period; arises upon fulfillment of the condition or arrival of the period c.in a contract to sell, the obligation arises

from the perfection of the contract even if the obligation is subject to a suspensive condition or a suspensive period where the price has been paid

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TOPICS UNDER THE SYLLABUS B. NATURE AND EFFECT OF OBLIGATIONS

2. Obligation to do or not to do

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2. OBLIGATION TO DO OR NOT TO DO RIGHTS OF A CREDITOR IN PERSONAL OBLIGATION (TO DO OR NOT TO DO) A. POSITIVE PERSONAL OBLIGATIONS:

1. Performance at debtor’s cause: The obligee is entitled to have the thing done in a proper manner, by himself or by a third person, at the expense of the debtor.

2. To demand what has been poorly done be undone

3. To recover damages because of breach of the obligation

B. NEGATIVE PERSONAL OBLIGATION 1. To have it undone at the expense of the obligor; and

2. To ask for damages

DISTINGUISH PERSONAL RIGHT FROM REAL RIGHT

PERSONAL REAL

Jus ad rem, a right enforceable only against a definite person or group of persons

Jus in re, a right enforceable against the whole world

Right pertaining to a person to demand from another, as a definite passive subject, the

Right pertaining to a person over a specific thing, without a definite passive subject

fulfillment of the prestation to give, to do or not to do.

against whom the right may be personally enforced

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TOPICS UNDER THE SYLLABUS B. NATURE AND EFFECT OF OBLIGATIONS

3. Breaches of obligations

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3. BREACHES OF OBLIGATIONS (Arts. 1170 – 1174)

A. Voluntary – debtor in the performance of the obligation is guilty of:

1. Delay (Mora) 2. Fraud (Dolo) 3. Negligence (Culpa)

4. Contravention of the tenor of the obligation

NOTE: debtor is liable for damages

B. Involuntary – debtor is unable to comply with his obligation due to fortuitous event/s NOTE: debtor is not liable for damages A.1. DEFAULT OR DELAY

GENERAL RULE: Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.

(Art. 1169)

EXCEPTION: Demand by the creditor shall not be necessary in order that delay may exist:

(1) When the obligation or the law expressly so declares;

(2) 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; or (3) When the demand would be useless, as when the obligor has rendered it beyond his power to perform.

In reciprocal obligations, neither party 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

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the parties fulfills his obligation, delay by the other begins.

NOTE: Art. 1169 is applicable only when the obligation is to do something other than the payment of money. In case of obligation for payment of sum of money, the interest replaces the damages.

KINDS OF DELAY:

1. Mora solvendi – delay or default committed by debtor

2. Mora accipiendi – delay or default committed by creditor

3. Compensatio Morae – default of both parties in reciprocal obligations

GENERAL RULE: An action or suit can be filed at anytime after the non-compliance of the other party. However, damages or interest shall only start to run after judicial or extra-judicial demand.

EXCEPTION: In ejectment and consignment cases, the extra-judicial demand should first be made prior to the filing of a civil suit.

DEMAND IS NOT NECESSARY WHEN:

1. Law or obligation expressly declares so 2. Time is of the essence

3. Demand would be useless

NOTE: In reciprocal obligations, a party does not incur in delay for failure of the other party to assume and perform the obligation imposed upon him/her.

A.2. FRAUD (Dolo)

It is the deliberate or intentional evasion of the normal fulfillment of an obligation. (8 Manresa 72)

It is the fraud in the performance or fulfillment of an obligation already existing, as distinguished from the fraud referred to in Article 1338 which is the cause of nullity of contracts and which exists before and at the moment of creating the obligation.

Samson vs Court of Appeals [G.R. No.

108245, November 25, 1994].

Bad faith is essentially a state of mind affirmatively operating with furtive design or with some motive of ill-will. It does not simply connote bad judgment or negligence. It imports

a dishonest purpose or some moral obliquity and conscious doing of wrong. Bad faith is thus synonymous with fraud and involves a design to mislead or deceive another, not prompted by an honest mistake as to one’s rights or duties, but by some interested or sinister motive.

TYPES OF FRAUD:

1. Causal Fraud (Dolo Causante): fraud employed in the execution of the contract 2. Incidental Fraud (Dolo Incidente): fraud

in performance of obligation already existing because of a contract

FRAUD IN THE PERFORMANCE/

DOLO INCIDENTE (ART. 1170)

CAUSAL FRAUD/

DOLO CAUSANTE (ART. 1338)

Present during the performance of a pre-existing obligation

Present during the perfection of a contract

Purpose is to evade

the normal

fulfillment of the obligation

Purpose is to secure the consent of another to enter into the contract

Results in the breach of an obligation

Results in vitiation of consent; voidable contract

Gives rise to a right in favor of the creditor to recover damages

Gives rise to a right of an innocent party to annul the contract

NOTE: Future fraud cannot be waived. However, the law does not prohibit renunciation of the action for damages on the ground of past fraud.

REMEDIES OF DEFRAUDED PARTY a. Specific performance (Art 1233) b. Resolve contract (Art 1191) c. Damages, in either case A.3. NEGLIGENCE (Culpa)

 Any voluntary act or omission, there being no malice which prevents the normal fulfillment of an obligation

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 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 (Art. 1173)

KINDS OF NEGLIGENCE

a. Quasi-Delict (Culpa aquiliana/culpa extra contractual) – source of obligation;

wrong or negligence committed independent of contract and without criminal intent b. Contractual Negligence (Culpa Contractual) – wrong or negligence in the performance of a obligation/contract

c. Criminal Negligence (Culpa Criminal) – wrong or negligence in the commission of a crime

INSTANCES WHERE THE LAW REQUIRES A HIGHER STANDARD OF CARE:

C.1. Banks – as a business affected with public interest, and because of the nature of its functions, the bank is under obligation to treat the accounts of its depositors with

meticulous care, always having in mind the fiduciary nature of their relationship. (Simex v.

CA, 183 SCRA 360)

EXCEPTION: Extraordinary diligence does not cover transactions outside bank deposits, ie:

commercial transactions (Reyes v. CA, 363 SCRA 51)

C.2. Common Carriers – from the nature of their business and for reasons of public policy, common carriers are 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 (Art. 1733) Diligence of a good father of a family:

ordinary care or that diligence which an average or reasonably prudent person would exercise over his own property.)

NOTE: Rule on Standard of Care

 That which the law requires; or

 That stipulated by the parties; or

 In the absence of the two, diligence of a good father of a family

DISTINGUISH FRAUD FROM NEGLIGENCE

FRAUD

NEGLIGENCE There is deliberate

intention to cause damage.

There is no

deliberate intention to cause damage.

Liability cannot be mitigated.

Liability may be mitigated.

Presumed from the breach of a

contractual obligation

Must be clearly proved

Waiver for future fraud is void.

Waiver for future negligence may be allowed in certain cases

DISTINGUISH NEGLIGENCE FROM CRIME NEGLIGENCE CRIME WHAT IT

PUNISHABLE Any act with fault or

private rights Public rights AMOUNT OF

EVIDENCE Preponderance

of evidence Proof beyond reasonable KINDS OF NEGLIGENCE, DISTINGUISHED

CULPA AQUILIANA CULPA CONTRACTUAL

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Negligence is

There may or may not be a pre-existing

Source of the obligation is the breach of the is prima facie sufficient to warrant recovery available as a defense

EFFECTS OF CONTRIBUTORY NEGLIGENCE OF THE OBLIGEE

GENERAL RULE: Reduces or mitigates the damages which he can recover

EXCEPTION: If the negligent act or omission of the creditor is the proximate cause of the event, which led to the damage or injury complained of, he cannot recover.

EFFECTS OF IMPOSSIBLE AND ILLEGAL

impossible OR illegal

IMPOSSIBLE BUT Obligation

DIVISIBLE

ONLY THE AFFECTED OBLIGATION IS VOID.

A.4. CONTRAVENTION OF THE TENOR OF THE OBLIGATION

B. FORTUITOUS EVENT (Force Majeure) GENERAL RULE: No one should be held to account for fortuitous cases, which are those situations that could not be foreseen, or which though foreseen, were inevitable.

EXCEPTION: There concurs a corresponding fraud, negligence, delay or violation or contravention in any manner of the tenor of the obligation.

ELEMENTS OF A FORTUITOUS EVENT:

1. The cause of breach is independent of the debtor’s will.

2. The event must be unforeseeable or unavoidable

3. The events render performance impossible 4. The debtor must be free from any participation, or aggravation of the injury.

NOTE: In the case of Republic v. Luzon Stevedoring [G.R. No. L-21749, September 29, 1967], the Court held that the person obliged to perform an obligation shall not be excused from a fortuitous event when the nature of the obligation requires the assumption of risk.

In other words, it is not enough that the event should not be foreseen or anticipated, but it must be one that is impossible to foresee or to avoid.

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TOPICS UNDER THE SYLLABUS B. NATURE AND EFFECT OF OBLIGATIONS

4. Remedies of obligations

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GENERAL RULE: The law protects the creditors.

The creditors are given by law all possible remedies to enforce such obligations.

A. SPECIFIC PERFORMANCE

To demand specific performance or fulfillment of the obligation with a right to indemnity for damages

B. RESCISSION

It means to abrogate the contract from the beginning and to restore the parties to their relative positions as if no contract has been made.

It is “to declare the contract void at its inception and to put an end to it as though it never was.”2

It is predicated on the breach of faith by any party that violates the reciprocity between them.

NOTE: In the case of Adorable v. Court of Appeals [G.R. No. 119466, November 25, 1999], the Court held that unless a debtor acted in fraud of his creditor, the creditor has no right to rescind a sale made by the debtor to someone on the mere ground that such sale will prejudice the creditors’ rights in collecting later on from the debtor. The creditor’s right against the debtor is only a personal right to receive payment for the loan; it is not a real right over the lot subject of the deed of sale transferring the debtor’s property.3

C. DAMAGES

To demand payment of damages when it is a feasible remedy

D. SUSIDIARY REMEDIES OF CREDITORS 1. Accion Subrogatoria – action which the creditor may exercise in the place of his 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

2. Accion Pauliana – action to revoke or rescind acts which the debtor may have done to defraud his creditor.

2 SPOUSES VELARDEV. COURTOF APPEALS, [G.R. NO. 108346, JULY 11,2001].

3 MELENCIO S. STA. MARIA, JR., OBLIGATIONSAND CONTRACTS: TEXTAND CASES 101 (2NDED. 2003).

3. Accion Directa - (Arts. 1652, 1608, 1729, 1893)

END OF DISCUSSION ON TOPIC

In document 2012 Ateneo Civil Law Summer Reviewer (Page 106-112)