CHAPTER 2 - NATURE AND EFFECTS OF OBLIGATION (ART. 1163-1178) Flashcards
What kind of thing when it is particularly designated or physically segregated from all others of the same class (Art. 1460)
Determinate or Specific Thing
What kind of thing when it is not particularly designated or physically segregated from all others of the same class
Indeterminate or Generic Thing
Determine what kind of things are the ff:
- 2020 Toyota Fortuner with engine no. 234567, body no. 123456, and plate no. URV 123
- My only wristwatch
- A horse
- A 1,000
- The house located at 123 Moret Sreet, Sampaloc, Manila
- Determinate Thing
- Determinate Thing
- Indeterminate Thing
- Indeterminate Thing
- Determinate Thing
General Rule of a Determinate Thing
As a rule, the loss of a determinate thing through a fortuitous event extinguishes the obligation (Art. 1262)
Rule when there is a loss of a generic thing through a fortuitous event
It doesn’t extinguish the obligation
What rule does when the loss of a generic thing through a fortuitous event does not extinguish the obligation follows?
Genus of a thing can never perish
An event which cannot be foreseen, or which though foreseen, is inevitable
Fortuitous Event
Two Kinds of Acts in Fortuitous Event
Acts of God; Acts of Man
Fortuitous event by natural calamities or occurrences such as earthquake, typhoon, lightning, flood
Acts of God
Fortuitous event by war, armed robbery, riots
Acts of Man
When does extinguishment of obligation from fortuitous events only arises?
When it covers specific thing
Elements of a Fortuitous Event
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.
What are the exceptions through fortuitous events?
a. When the law expressly provides for liability even in case of fortuitous events
b. When there is bad faith, if there is bad faith, obligor/ debtor is still liable
c. Agreed upon by the parties, the parties have agreed that even if there is a lost due to fortuitous event the obligation will continue.
d. The obligation requires the assumption of risk (insurance)
The ordinary care that an average person exercise in taking care of his family
Diligence of a good father of a family
Other term for Diligence of a good father of a family
Care
General Rule in the Diligence of a good father of a family
To take good care of the thing with the diligence of a good father of a family
Exceptions for Diligence of a good father of a family
- Law requires another standard of care
- The agreement of the parties requires another standard of care.
This involves placing the thing in the possession or control of the creditor either actually or constructively
To deliver the thing
What are the two kinds of delivery?
- Actual Delivery
- Constructive Delivery
The act of giving real and immediate possession to the creditor
Actual Delivery
An act that amounts to a transfer of title by operation of law when actual transfer is impractical or impossible
Constructive Delivery
What are the three kinds of fruits?
Natural fruits, industrial fruits and civil fruits,
They are the spontaneous products of the soil and the young and other products of animals. (Art 442)
Natural Fruits
They refer to those produced by land of any kind through cultivation or labor ( Art. 442)
Industrial Fruits
Refer to fruits which are the result of a juridical relation (Art. 442)
Civil Fruits
When does the creditor has the rights to the fruits of a determinate thing?
From the time the obligation to deliver it arises.
Exception to the rule when the creditor has a right to the fruits if the thing
He shall acquire no real right over it until the thing has been delivered to him (Art. 1164)
One whose performance is not subject to a suspensive period or suspensive condition, the obligation to deliver arises from perfection.
Pure Obligation
Obligations that are immediately demandable
Pure Obligation
A period, the arrival of which will give rise to an obligation
Suspensive Period
Other term for suspensive period
Ex-die
A condition, the happening of which will extinguish the obligation
Resolutory Condition
Other term for resolutory condition
In diem
What kind of suspensive where D is obliged to give C a specific car on Christmas day next year
Suspensive Period
What kind of suspensive where D is obliged to give C a specific car if C passes the CPA Examination
Suspensive Condition
This is a right that may be enforced by one person on another such as the right of the creditor to demand the delivery of the thing and its fruits from the debtor
Personal right
What is jus in personam or jus ad rem
Personal Right
This refers to the right or power over a specific thing, such as possession or ownership, which is a right enforceable against the whole world
Real right
What is jus in re
Real Right
This is the right acquired by the creditor over the thing and its fruits when they have been delivered to him
Real right
They include everything that is produced by a thing or is incorporated or attached thereto, either naturally or artificially (Art. 440)
Accessions
Those joined to or included with the principal thing for the latter’s better use, perfection or enjoyment
Accessories
What is the Principle of principal and accessory?
The accessory follows the principal
Remedies of the creditor if the debtor fails to perform his obligation to deliver a determinate thing
a. To compel the debtor to make the delivery (Art.1165)
b. To demand damages from the debtor (Art. 1170)
Situation: D is obliged to give C a specific car. On due date, C demands delivery but D does not deliver. What are the available remedies of the creditor?
C can compel D to deliver the car
C can also demand payment of damages from D
Remedies of the creditor if the debtor fails to perform his obligation to deliver a generic thing
a. To ask that the obligation be complied with at the expense of the debtor (Art. 1165)
b. To demand the payment of damages from the debtor (Art. 1170)
Situation: D is obliged to deliver 5 sacks of rice to C. D does not perform his obligation on due date upon C’s demand.
C can obtain 5 sacks of rice from other sources at the expense of D
C can also ask for damages from D
Violations of the terms and conditions of the obligation
Contravention of the tenor of the obligation
Remedies of the creditor if the debtor fails to perform his obligation in obligations to do (positive personal obligation)
a. If the debtor fails to perform the obligation or performs it but contravenes the tenor thereof
What are the remedies of the creditor?
Creditor may have the obligation executed at the expense of the debtor (Art. 1167)
He may also demand damages from the debtor (Art. 1170)
Situation: D is obliged to construct a hollow block fence for C. By agreement, the fence will be 2 meters high and 10 meters long, fine finished and painted. D does not perform his obligation upon C’s demand. What are the remedies of the creditor?
C can ask another person to, or he himself may, construct the fence at the expense of D
C can also ask for damages from D
Remedies of the creditor if the debtor fails to perform his obligation in obligations to do (positive personal obligation)
b. If the debtor performs the obligation but does it poorly
What are the remedies of the creditor?
Creditor may have the same be undone at debtor’s expense (Art. 1167)
Creditor may also demand damages from the debtor (Art. 1170)
Situation: D is obliged to construct a hollow block fence for C. By agreement, the fence will be 2 meters high and 10 meters long, fine-finished and painted. D constructs the fence following the measurements but it was not properly aligned, the finishing was rough, and materials used were substandard. What are the remedies of the creditor?
C can have the fence be demolished by another person or even by himself at D’s expense
C can also demand damages from D
Remedies of the creditor if the debtor does what has been forbidden him (not to do – negative personal obligations)
a. The creditor may demand that what has been done be undone at debtor’s expense (Art 1168)
b. He may also demand damages from the debtor (Art. 1170)
Situation: B bought a farm lot from S. However, the only access from the road to B’s lot is the lot of D. B entered into a contract with D for a right of way over a period of 10 years and paid a sum therefor. It was agreed that for the duration of the contract, D would not construct any fence between B’s lot and his. Sometime thereafter, however, D constructed a fence in violation of the agreement. What are the remedies of the creditor?
B may demand that D remove the fence at D’s expense
B can also demand damages from D
Refers to the wrongful, unlawful or tortuous act which causes loss or harm to another. (cause of damage)
Injury
Is the hurt, loss or harm which results from the injury (effect of injury)
Damage
Are the recompense or compensation awarded for the damage suffered
Damages
Consisting of money, measured in money or relating to money
Pecuniary
These refer to the pecuniary loss that may be recovered. They include the value of the loss suffered and profits not realized. (Art. 2199)
Actual or compensatory damages
They include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. (Art. 2217)
Moral Damages
They refer to damages to vindicate a right (Art. 2221)
Nominal Damages
They are more than nominal but less than compensatory damages, but may be recovered if the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty (Art. 2224)
Temperate or moderate damages
Those agreed upon by the parties to a contract to be paid in case of breach (Art. 2226)
Liquidated Damages
These are imposed by way of example or correction for public good, in addition to the moral, temperature, liquidated or compensatory damages (Art. 2229)
Exemplary or corrective damages
Also known as violation of contract
Breach of contract
Proof is required unless provided by law or stipulation (Art. 2199)
Actual Damages
Proof is not required in order that moral, nominal, temperate or liquidated or exemplary damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case. (Art. 2216)
Other damages
Is the deliberate or intentional evasion by the debtor of the normal compliance of his obligation
Fraud
Other term for Fraud
Deceit or Dolo
What is called when there is unintentional act?
Error
Refers to fraud without which consent would not have been given
Causal Fraud or Dolo Causante
Refers to fraud without which consent would have still given but the person giving it would have agreed on different terms.
Incidental fraud or Dolo incidente
Situation: 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.
The contract between B and S is valid
S shall be liable to pay damages
A waiver of an action for this fraud cannot be made. If there is an agreement for its waiver, the same is void (Art. 1171)
Future Fraud
Situation: X and Y entered into a contract of partnership. They agreed that if X commits fraud against Y in the future with regard to the performance of their contract of partnership, like in profit sharing, X will not be liable.
Their stipulation or agreement is void
X will still be liable for damages
A waiver of an action for this fraud may be made since the commission of fraud can no longer be encouraged. Such waiver is an act of liberty on the part of the creditor.
Past Fraud
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 (Art. 1173)
Negligence
Other term for negligence
Fault or Culpa
Is the failure to observe, for the protection of the interest of another person, that degree of care, precaution and vigilance which the circumstances justly demand, whereby such other person suffers injury.
Negligence
If the law or contract does not state the diligence which is to be observed in the performance of the obligation, what should the debtor do?
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.
What kind of care and corresponds in the ff:
If the obligation is to deliver a specific window glass, the debtor must ensure that the glass, considering its fragility, is well-protected, say with cushions, when he transports it as required by the nature of the obligation. Otherwise, he will be negligent.
Diligence of a good father of a family
What kind of care and corresponds in the ff:
A baby-sitter, 21 years old, strong and healthy, will be negligent if she sleeps while on duty considering that the circumstances of her person were considered when she was hired for the job.
Diligence of a good father of a family that corresponds to person
What kind of care and corresponds in the ff:
If the driver of a car drives at night without any headlight, he will be considered negligent considering that the circumstances of nighttime require such light.
Diligence of a good father of a family that corresponds to time
What kind of care and corresponds in the ff:
If the same car driver drives at 50 kilometers per hour along a busy street where many people are crossing, he will be negligent because the circumstances of the place require that he should drive slowly.
Diligence of a good father of a family that corresponds to place
This is negligence in the performance of a contract
Culpa contractual/ contractual negligence
What rule does culpa contractual applies?
Master-servant rule
True or False;
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 although it may mitigate (lessen) the liability.
True
In culpa contractual, defense of a good father of a family is a proper defense.
True or False?
False, In culpa contractual the defense of a good father of a family is not a proper defense
These are acts or omissions that cause damage to another, there being no contractual relation between the parties (Art. 2176)
Culpa Aquiliana/civil negligence/ torts/ quasi delicts or culpa extra contractual
The master servant rule does not apply
Culpa Aquiliana
In Culpa Aquiliana, the defense of a good father of a family in the selection and supervision of employees is a defense on the part of the employer to escape liability
True or False?
True
This is negligence that results in the commission of a crime
Culpa Criminal
In culpa criminal, the defense of a good father of a family is a proper defense.
True or False?
False, defense of a good father of a family is not a proper defense
Is the non-fulfillment of an obligation with respect to time
Delay
Other term for delay
Default or Mora
Give the three kinds of delay
- Mora solvendi
- Mora accipiendi
- Compensatio morae
Delay on the part of the debtor
Mora solvendi
Two kinds of mora solvendi
Ex re and Ex persona
Delay on the part of debtor in real obligations or obligation to give
Ex re
Delay on the part of the debtor in personal obligations or obligations to do
Ex persona
Delay on the part of the creditor
Mora Accipiendi
Exist when the creditor refuses to accept the thing due without justifiable reason
Mora Accipiendi
Delay in reciprocal obligations
Compensatio morae
Obligation in which each party is a debtor and a creditor of the other
Reciprocal obligations
General rule in Delay
No demand, no delay
Give the requisites of delay
a) That the obligation be demandable and already liquidated
b) The debtor does not perform the obligation
c) The creditor demands the performance either judicially or extra-judicially
d) The debtor fails to comply with such demand
Exceptions in General Rule of delay
- When the law so provides
- When the obligation expressly so declares
- When time is of the essence of the contract
- When demand would be useless
- When there is a reciprocal obligation
There is no delay in an obligation not to do, as one cannot be delay for not doing something
True or False?
True
This means violation of a contract or breach of contract
Contravention of the tenor of the obligation
What are the two kinds of remedies of the creditor to enforce payment of his claims against the debtor?
Cumulative and Subsidiary Remedies
Under the Cumulative remedies, what are three following remedies available for the creditor?
- Exact Fulfillment
- Attach leviable properties of the debtor
- Accion subrogatoria
Explain exact fulfillment
Creditor can give out demand letter demanding the debtor to pay if still the debtor doesn’t pay, he can a file a case to the court
Specific performance if delivery of specific thing
Collection of sum of money if he is to collect a debt owing to him from the debtor
What is the second remedy of the creditor to enforce performance incase exacting fulfillment is unavailable?
Attach leviable properties of the debtor
Explain what is accion subrogatoria
- Creditor can look wether the debtor is also a creditor to another (receivables) then you as a creditor can collect to the debtor of your debtor as payment. Whatever maybe owning to your debtor can now be own to you (creditor)
- The debtor of my debtor is my debtor
What is the last remedy that is under subsidiary remedy available for the creditor to enforce payment?
Accion pauliana
Other term for accion pauliana
Action for rescission
Asking the courts to cancel contracts entered into by the debtor with third persons
Accion pauliana
In accion pauliana, you as a creditor have to prove fraud and has affected your rights and that these contracts are done to defraud you.
True or False?
True
In accion pauliana, if the third person is in good faith, the order of rescission will be valid.
True or false?
False, this remedy is not available if the third person was not aware of the debtor’s fraudulent intention.
Can you inherit debts? (debtor’s side)
Yes
General Rule in transmissibility of rights
All rights arising from an obligation are transmissible
Exception to the General Rule in transmissibility of rights (debtor’s side)
Extent of the value of the properties that you inherited
If the creditor dies and is survived by an heir, can the heir collect the debt?
Yes, General rule is that rights arising from obligations are transmissible
Exceptions to the General Rule in transmissibility of rights (creditor’s side)
- When by its nature, it is not transmissible - it is purely a personal right
- Parties agree that the right will not be transmissible
- When the law says that it is not transmissible
