Nature and
Effect of
Obligations
DETERMINATE vs GENERIC thing
DETERMINATE – when it is particularly designated or physically segregated
from all others of the same class.
2017 Toyota Altis with Engine No. 123456, Body No. 6428744, and Plate
No. ABZ2317; my only wristwatch; my horse named “Black Stallion”
INDETERMINATE (or Generic) – when it is not particularly designated or
physically segregated from all others of the same class.
a horse; a car
*As a rule, the loss of a DETERMINATE thing through a fortuitous event
EXTINGUISHES the obligation.
**Fortuitous event – natural calamities or acts of God (earthquake, typhoon);
acts of man (force majeure) such as war and armed robbery.
Obligations of one obliged to give a determinate thing
1. To take good care of the thing with the diligence of a good father of a
family unless the law or agreement of the parties requires another standard
of care.
Diligence of a good father of a family - means the ordinary
care that an average person exercises in taking care of his property.
2. To deliver the thing.
- Involves placing the thing in the possession or control of the
creditor either actually or constructively.
Obligations of one obliged to give a determinate thing
3. To deliver the fruits of the thing.
A. Kinds of fruits
1. Natural Fruits - they are the spontaneous products of the soil and the young
another products of animals.
2. Industrial fruits - they refer to those produced by land of any kind through
cultivation or labor. (e.g. rice;corn)
3. Civil fruits- They refer to fruits which are the result of a juridical relation.
(e.g. rent of a buiding)
B. When creditor has a right to the fruits of a determinate thing
- The creditor has the right to the fruits of a thing from the time the obligation to
deliver it arises.
Obligations of one obliged to give a determinate thing
3. To deliver the fruits of the thing - Cont.
C. When obligation to deliver the thing arises
1. If the obligation is a pure obligation or one whose performance is not subject to
a suspensive period or suspensive condition, the obligation to deliver arises from
perfection.
2. If the obligation is subject to a suspensive period or suspensive condition, the
obligation to deliver arises upon the fulfillment of the condition.
D. Rights of the Creditor
Personal right - right that may be enforced by one person on another
- also called jus in personam or jus ad rem
Real right - right or power over a specific thing, such as possession or
ownership, which is a right enforceable against the whole world
- right acquired by the creditor over the thing and its fruits
-also called jus in re
Obligations of one obliged to give a determinate thing
4. To deliver its accessions and accessories even if they have not been
mentioned.
Accessions – include everything that is produced by a thing or is
incorporated or attached thereto, either naturally or artificially.(e.g
alluvium )
Accessories – Those joined to or included with the principal thing for
the latter’s better use, perfection or enjoyment. (e.g. the keys to a car
or a house)
Remedies of the creditor
1. If the debtor fails to perform his obligation to deliver a determinate thing
• To compel the debtor to make the delivery
• To demand damages from the debtor
2. If the debtor fails to perform his obligation to deliver a generic thing
•To ask that the obligation be complied with at the expense of the
debtor
•To demand damages from the debtor
3. If the debtor fails to perform his obligation in obligations to do
•If the debtor fails to perform the obligation or performs it but
contravenes the tenor thereof-
- Creditor may have the obligation executed at the expense of the
debtor
- He may also demand damages from the debtor
•If the debtor performs the obligation but does it poorly
- Creditor may have the same be undone at debtor’s expense
- Creditor may also demand damages from the debtor
Remedies of the creditor - cont.
4. If the debtor does what has been forbidden him
•Creditor may demand that what has been done be undone
• He may also demand damages from the debtor
Grounds for liability to pay damages
Fraud
Negligence
Delay
Contravention of the tenor of the obligation
Damages (distinguished from injury)
- refer to the harm done and the sum of money that may
be recovered in reparation for the harm done.
Injury – refers to the wrongful, unlawful or tortuous act
which causes loss or harm to another.
Kinds of Damages
Actual or compensatory damages
Moral Damages
Nominal Damages
Temperate or moderate damages
Liquidated damages
Exemplary or corrective damages
9
Kinds of Damages
Actual or compensatory damages
- refer to the pecuniary loss that may be recovered (e.g. loss in business or
profession)
- includes the value of the loss suffered and profits not realized
Moral damages
- physical suffering
- mental anguish
- Fright
- Serious anxiety
- Besmirched reputation
- Wounded feelings
- Moral shock
- Social humiliation, and
- Similar injury
10
Kinds of Damages – cont.
Nominal damages
- refer to damages to vindicate right
Temperate or moderate damages
- more than nominal but less than compensatory damages
Liquidated damages
- more than nominal but less than compensatory damages
Exemplary or corrective damages
- imposed by way of example or correction for public good in addition to the
moral, temperate, liquidated or compensatory damages
11
Proof of pecuniary loss
Actual damages
- proof is required unless provided by law or stipulation
Other damages
- proof is not required in order that moral, nominal, temperate or
liquidated or exemplary damages may be adjudicated.
12
Fraud
- deliberate or intentional evasion by the debtor of the normal
compliance of his obligation.
- refers to the fraud committed by the debtor at the time of the
performance of his obligation
Kinds of fraud in general
a. According to meaning
1) Fraud in obtaining consent
a. Casual fraud or dolo causante
- refers to fraud without which consent would not have been
given.
- it renders the contract voidable
e.g. B bought a ring from S who told him that the ring was embellished with diamond. However, S knew
all along that the embellishment was not diamond but ordinary glass. B here gave his consent because of
the fraud employed by S; hence the contract is voidable.
13
Fraud
a. According to meaning
1) Fraud in obtaining consent – cont.
b. Incidental fraud or dolo incidente
- refers to fraud without which consent would have still been
given but the person giving it would have agreed on different
terms
- the contract is valid but the party shall be liable for
damages
e.g. C hired D to teach in the school of C. D placed in his application that he had earned units in MBA.
However, D had actually dropped the subjects for the said units. If C would have hired D even if D did not
complete the said units but that he would have given a lower salary to D, the fraud committed by D was
only incidental but it would entitle C to recover damages.
14
Fraud
a. According to meaning – cont.
2) Fraud in the performance of the obligation
- the deliberate act of evading fulfilment of an obligation in a normal
manner. This presupposes an existing obligation
- the fraud has no effect on the validity of the contract since it was
employed after perfection
e.g. B ordered 10 bags of powder soap from S who agreed to deliver the same after 2 days. On due date, S
delivered 10 bags of powder soap which he mixed with chalk. This is fraud in the performance of an
obligation which entitles B to recover damages. The fraud, however, does not have any effect on the
validity of the contract.
15
Fraud
b. According to time of commission
1) Future Fraud
- a waiver of an action for future fraud cannot be made.
- If there is an agreement for its waiver, the same is void
- the debtor will still be liable for damages if he commits fraud in the
performance of his obligation despite any waiver made by his creditor
2) Past Fraud
- a waiver of an action for past fraud may be made, since the
commission fraud can no longer be encouraged
16
Negligence
it is the omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the person, of the
time, and of the place.
the test of negligence is whether the defendant in doing the alleged negligent act
used that reasonable care and caution.
the debtor must observe the diligence of a good father of a family, as required by
the nature of the obligation, and which corresponds with the circumstances
of the person, of the time or of the place.
e.g. If the driver of a car drives at night without any headlight, he will be
considered negligent considering that the circumstances of night time require such
light.
17
Negligence
Kinds of Negligence
1. Culpa contractual ( contractual negligence)
- negligence in the performance of a contract
e.g. The negligence committed by the driver of a bus when a passenger is hurt during a
trip because there is a breach of contract of carriage. (the negligence of the driver is also
the negligence of the bus owner if the Master-servant rule applies)
Master-Servant Rule – the negligence of the servant is the negligence of the
master. Accordingly the defense of a good father of a family in the selection
and supervision of employees is not a defense on the part of the employer.
18
Negligence
Kinds of Negligence- cont.
2. Culpa aquiliana ( civil negligence or tort or quasi-delict or culpa
extra- contractual)
- acts or omissions that cause damage to another, there being
no contractual relation between the parties.
- Master-servant rule does not apply
e.g. If a pedestrian is hit by a bus through the reckless driving of the driver,
the latter’s negligence is not the negligence of the owner.
19
Negligence
Kinds of Negligence- cont.
3. Culpa criminal (criminal negligence)
- results in the commission of a crime
- defense of a good father of a family is not proper
because the employee’s guilt is automatically the
employer’s civil guilt if the former is insolvent
20
Delay or default or mora
- non – fulfilment of an obligation with respect to time
Kinds of Delay
1. Mora solvendi
- delay on the part of the debtor
1) Ex re - Delay in real obligations (to give)
2) Ex persona – Delay in personal obligations (to do)
2. Mora accipiendi
- delay on the part of the creditor
- exists when the creditor refuses to accept the thing due without justifiable
reason
3. Compensatio morae
- reciprocal obligations (e.g. both parties are in default)
21
Delay or default or mora
Effects of Delay
Debtor Creditor
1. Shall be liable for the payment 1. Shall bear the risk of loss and
of damages shoulder the expenses for the
2. if the obligation consist in the preservation of the thing
delivery of a determinate thing, 2. The debtor may resort to the
he shall be responsible for any consignation of the thing due
fortuitous event until he has
effected the delivery
22
Fortuitous events
- events that could not foreseen, or which, though foreseen,
are inevitable.
- Impossible to foresee or avoid
e.g. Natural calamities or acts of God such as earthquake, typhoon and lightning;
and acts of man (“force majeure”) such as war and armed robbery.
Elements
a. The cause must be independent of the debtor’s will.
b. There must be impossibility of foreseeing the event or of avoiding
it even if it can be foreseen.
c. The occurrence of the event must be of such character as to render it
impossible for the debtor to perform his obligation in a normal manner.
23
Fortuitous events
Liability for fortuitous events
- No person shall be liable for fortuitous events.
Exceptions:
a. When the law expressly provides for liability even in the
case of fortuitous events.
b. When the parties have declared liability even in case of
fortuitous event.
c. When the nature of the obligation requires the assumption of
risk
24
Fortuitous events
Burden of providing loss due to fortuitous event
- the burden of providing that the loss was due to fortuitous event
rests on him who invokes it.
- To exempt one from liability, he must have committed no
negligence or misconduct that may have occasioned the loss.
25
Thank you
26
