Obligations: Nature and Effect

"Ignorance of the law excuses no one" - Art. 3, R.A. 386

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An obligation is a juridical necessity to give,to do or not to do. (Art. 1156)

_{Art. 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. (1094a)
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. (1095)
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. (1096)
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. (1097a)}

Determinate thing and generic thing

A thing is determinate when it is particularly designated or physically segregated from all others of the same class. (Art. 1460) It is determinate or specific if it is distinct from all others and can individually be classified or determined. From the word itself determinate meaning can be determined from all others. Examples: Romeo's only horse named Alden, Kawasaki Raider with engine number 12345 and plate number HX1123, and Romeo's one and only Rolex 3310 made in China with serial number 265747.

In contrast, indeterminate or generic thing is the opposite of determinate or specific thing; that is, generic or indeterminate thing is not particularly designated or physically segregated from all others of the same class. It means that a thing cannot be specifically determined from things of the same class. The thing can be replaced by another thing that is of the same quality. Examples: a horse, a motorcycle, a sack of rice, a car, and USD 100, 000.

Why is it important to know if a thing is determinate or indeterminate?

Art. 1262. States that the loss of a determinate thing through a fortuitous event extinguishes the obligation. Meaning that the thing is lost without the fault of the debtor. This is the general rule. But when it comes to Indeterminate thing, such loss of the thing does not extinguishes the obligation (genus nunquam perit).

What are the obligations of someone obliged to give a determinate thing?

I. To take good care of the thing with the diligence of a good father of a family.

Diligence of a good father of a family means an ordinary care. Just like a father of a family, it is a care that an average person would do in taking care of his property.

II. To deliver the thing.

Delivery is placing the thing in the possession or control of the active subject (obligee) by the passive subject (obligor) either actually or constructively.

III. To deliver the fruits of the thing.

The creditor has a right to the fruits of the thing from the time the obligation to deliver the thing arises. However, such creditor has no real right over the thing unless such it has been delivered to him.

Rights of the creditor (obligee)

a. Personal right - a right that may be enforce by one person on another, such as the right of a creditor to demand delivery of the thing and its fruits from the debtor.

b. Real right - a right or power over a specific thing which is enforceable against the whole world. It is acquired by the creditor from the delivery of the thing and its fruits unto him.

Kinds of fruits (Art. 441) that the debtor is also obliged to deliver:

a. Natural Fruits - They are the spontaneous products of the soil, and the young and other products of animals. (Art. 442) Examples: trees that naturally grows. Young and other products of animals.

b. Industrial Fruits - Industrial fruits are those produced by lands of any kind through cultivation or labor. (Art. 442) Examples: corn and other crops, rice, other products that is a result of cultivation and intervention of human labor.

c. Civil Fruits -They are the result of a juridical relation such as the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. (Art. 442)

IV. To deliver its accessories and accessions even though not mentioned.

a. Accessions - everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially, (Art. 440) such as those plants sown on a parcel of land sold to a buyer.

b. Accessories - joined to or included in the principal thing for the latter's better use. Example: keys to the car or house.

What are the remedies of the Obligee (Creditor) when the debtor fails to perform his obligation?

1. If to deliver a determinate thing

a. compel the debtor to make the delivery (Art. 1165)
b. demand damages from the debtor (Art. 1170)

Example: Romeo is obliged to give Juliet his one and only specific Iphone X. On due date, Juliet demands the delivery of the specific Iphone X but Romeo was not able to deliver. With regards to this, Juliet can compel Romeo to deliver the said specific Iphone X because there is no other person in possession of that wonderful thing. Juliet can also demand payment of damages from Romeo.

2. If to deliver an indeterminate thing

a. ask that the obligation be complied with at the expense of the debtor (Art. 1165)
b. demand damages from the debtor (Art. 1170)

Example: Romeo is obliged to give Juliet 100 sacks of rice. If Romeo does not deliver the said rice on due date upon Juliet's demand, Juliet can obtain rice from other sources at the expense of Romeo. Since rice is a generic thing, Juliet can obtain from other sources because it can be replaced with the same quality. Juliet can also ask for damages.

Comprehensive Example: On January 1, 2018 Romeo obliged himself to give Juliet a specific car on December 31, 2018. Before December 31, Romeo is also obliged to take care of that specific car with the diligence of a good father of a family. And on due date, Romeo will now be obliged to deliver that car to Juliet together with its fruits and accessories. If Romeo fails to deliver the car, Juliet can enforce her personal right against Romeo to demand delivery. If Romeo again will not deliver upon the demand, Juliet can now ask for damages. But, if Romeo delivers the car without incurring delay then he will not be liable for damages. Juliet in turn will now have her real right over the car.

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An obligation is a juridical necessity to give, to do or not to do. (Art. 1156)

_{Art. 1167. 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 poorly done be undone. (1098
Art. 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. (1099a)}

What are the remedies of a creditor if the debtor fails to perform his obligation?

1. If an obligation to do

When the debtor fails to perform his obligation to do or performs it but contravenes the tenor thereof:

a. The creditor may have the obligation executed at the expense of the debtor. (Art. 1167)
b. The creditor may demand damages from the debtor. (Art. 1170)

In obligation to do, the obligor (debtor) cannot be forced to perform his obligation as it will constitute an involuntary servitude. The only remedy of the creditor is to have the obligation executed by another at the expense of the debtor or ask for damages. Moreover, the obligor cannot substitute others to perform his obligation to do without the consent of the obligee (creditor) because the obligation is personal in nature.

Example: Romeo made an agreement with Juliet that on his incoming 50^th birthday, he will hire Juliet to make an intermission number by singing My Way by Frank Sinatra. Both of them agreed. On his birthday party, Juliet refused to sing because she is shy and sent another singer in replacement. Since the agreement was between Romeo and Juliet and it is an obligation to do, Juliet cannot sent a replacement since her voice and performance is not the same with the replacement. In addition, Romeo cannot force Juliet but he can hire another singer at the expense of Juliet or rather ask for damages.

If Juliet performs her obligation but sings Hotel California rather than My Way that was agreed upon, (contravening the tenor thereof) Romeo still have the same rights.

When the debtor performs his obligation but poorly done

a. The creditor may have the same be undone at the debtor's expense (Art. 1167)
b. The creditor may demand damages from the debtor. (Art. 1170)

Example: Romeo is obliged to construct the fence of Juliet's newly built house. They agreed to the measurement and alignment and the materials to be used. Romeo performs his obligation but the fence was not aligned, the materials used was substandard, the finishing was rough, and the foundation was weak. Juliet can have the fence demolished at the expense of Romeo . Juliet can also demand damages from Romeo.

2. If an obligation not to do

When the debtor performs what has been forbidden of him

a. The creditor may demand what has been done be undone.
b. The creditor may demand damages from the debtor.

Example: Romeo bought a parcel of land from Juliet. However, the only access from the road to his newly bought land is the lot of James. So he made an agreement with James that for 100 years he will give Romeo a right of way for a sum of money. James agreed and receive the money. It was also agreed that for 100 years James will not construct a fence that will hinder in the pathway to Romeo's land. 20 years later, James constructed a fence. James violated the contract. Romeo may demand that the fence be remove at the expense of James and pay damages.

_{Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. (1101)}

Source: R.A. 386 Civil Code of the Philippines

Part 2 will soon be posted. Keep in touch. For any queries or topics you want to be discussed feel free to comment.


I hope you learn a thing for this is applicable in our lives!

-Your Lovely Accountant Steemian-