Nature and Effect of Obligations

Question 1

It arises when the obligation is to do or not to do something. In the case of obligations to give, this may be associated with a specific person.

This is generally enforceable only against the person who is under the obligation. It is based on the specific relationship between the parties involved.

Answer 1

Personal Right

If A promises to give B a specific book, and the obligation is to deliver that particular book, B has a personal right against A. The right is specific to the agreed-upon item or performance.

Question 2

It is a right over a specific thing, and it is enforceable against the whole world. It is not dependent on the relationship between the parties.

It is often associated with ownership or possession of a particular property. This right is considered if the obligation is** to transfer ownership of a specific item**.

Answer 2

Real Right

If A pledges to transfer ownership of a piece of land to B, and the obligation is to give ownership of that specific piece of land, B has a real right over the land.

Question 3

True or False:

In the context of obligations to give, whether a right is personal or real depends on the **nature of the obligation and the specific subject matter involved. **

Answer 3

True

Question 4

Personal or Real Right

If A lends money to B, and the obligation is for B to repay the borrowed sum, B has a what right against A for the repayment. This right is specific to the agreed-upon monetary amount.

Answer 4

Personal Right

Personal rights are tied to specific individuals and their agreements.

Question 5

Personal or Real Right

If A pledges a specific piece of jewelry to B as collateral for a loan, and the obligation is for A to transfer possession of that particular jewelry to B in case of default, B has a what right over the pledged jewelry.

Answer 5

Real Right

Real rights are tied to specific things or properties.

Question 6

An obligation where the performance is directed towards a specific person.

Answer 6

Personal Obligation (to do or not do)

A promise to paint a portrait for a specific individual creates a personal obligation. The artist is obligated to fulfill this commitment to the named individual.

Question 7

It is an obligation where the performance is directed towards a specific object or thing, and it is not tied to the person of the obligor.

The obligation is binding on whoever possesses the specified object, regardless of their identity. It is the connection to the thing itself that matters.

Answer 7

Real Obligation (to give)

A pledge or mortgage creates a real obligation. If someone pledges a specific piece of jewelry as collateral for a loan, the obligation is tied to the jewelry. The lender has a right to the pledged item, regardless of who possesses it.

Question 8

True or False:

The key distinction lies in whether the obligation is directed towards a specific person (real obligation) or a specific thing (personal obligation).

Answer 8

False

Real Obligation (to give) = specific thing
Personal Obligation (to do or not to do) = specific person

Question 9

Kinds of Negligence According to Source of Obligation

Answer 9

• Contractual Negligence (Culpa Contractual)
• Civil Negligence (Culpa Acquiliana)
• Criminal Negligence (Culpa Criminal)

Question 10

The negligence in contracts resulting in their breach.

The action can be pursued by proving the existence of the contract, and the fact that the obligor failed to comply with the same.

Answer 10

Contractual Negligence (Culpa Contractual)

Question 11

In a situation where a bus hit someone and its passengers are also harmed, who is the one liable for the passengers harmed?

Answer 11

The one who is liable is the company and not the driver, because the company and the passengers have a contractual relationship.

The company has a contractual relationship with its passengers and anything that will happen to them is responsibility of the company, not the driver because the driver is an employee of the company. Proof that there’s a contractual relationship is the existence of the TICKET.

Question 12

In a situation where a bus hit someone and its passengers are also harmed, who is the one liable for the one that got hit in the pedestrian?

Answer 12

The one who is liable to him is the driver because there’s no contractual relationship between the pedestrian and the company.

This is the case of Culpa Acquiliana or Civil Negligence.

Question 13

The negligence which by itself is the source of an obligation between the parties not formally bound before by any pre-existing contract.

The negligence or fault should be clearly established because it is the basis of the action.

Answer 13

Civil Negligence (Culpa Acquiliana)

Also known as quasi-delict or tort. This concept is governed by Articles 2176 to 2194 of the Civil Code of the Philippines.

Question 14

This negligence arises when a person’s negligent actions or omissions lead to the commission of a crime. It involves a failure to exercise the degree of care required by law, resulting in criminal consequences.

Answer 14

Criminal Negligence (Culpa Criminal)

Question 15

It refers to a state of mind or intent characterized by dishonesty, a lack of sincerity, or an intention to deceive or defraud others.

Answer 15

Bad Faith

Bad faith -> intentional = fraud

Question 16

True or False:

Fraud is intentional, unlike negligence, both resulting to damages.

Answer 16

True

Question 17

This is a legal standard often used to assess the level of care or diligence required in a given situation. It implies the care and prudence that a responsible and caring head of a family would exercise.

Answer 17

Diligence of a good father of a family

Question 18

The deliberate or intentional evasion of the normal fulfillment of an obligation.

Answer 18

Fraud

also known as deceit or dolo.

Question 19

Article 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.

According to the article above, there are how many grounds for liability and what are those?

Answer 19

There are four grounds for liability namely:
* Fraud (deceit or dolo)
* Negligence (culpa)
* Delay (mora)
* Contravention of the tenor of the obligation

Question 20

Types of Fraud

Answer 20

• Dolo Incidente (Incidental Fraud)
• Dolo Causante (Causal Fraud)

Question 21

This fraud is committed in the performance of the obligation.

Answer 21

Dolo Incidente (Incidental fraud)

Sarah is selling her laptop to James. During negotiations, James asks if the laptop has ever been repaired. Sarah, eager to make the sale, fails to mention a minor repair done a year ago. James decides to buy the laptop primarily because it meets his specifications, and the repair omission is not the main reason for the purchase. In this case, the deceit (dolo) is incidental to the contract.

Question 22

This fraud is committed in the execution of the contract in order to get the consent of the other party to enter into a contract.

Answer 22

Dolo Causante (Causal Fraud)

Mark is selling his rare comic book to Emily. Emily, a serious collector, asks Mark if the comic book has any missing pages or defects. Mark, wanting a higher price, intentionally conceals the fact that a few pages are missing. Emily decides to buy the comic book largely because she believes it’s in perfect condition, and the fraudulent representation is a substantial cause (causante) for her decision to enter the contract.

Question 23

True or False:

If the deceit is a primary reason for the decision, it leans toward “dolo incidente.”

Answer 23

False

It is a dolo causante which states that the fraudulent act is the reason why the other party enters into an agreement. Because they deceive the other party to get their consent, their contract is therefore voidable.

Question 24

True or False

If the deceit is not a major factor and the contract would likely have been formed without it, it falls more in line with “dolo incidente.”

Answer 24

True

It occurs when fraud is present but is not the main or determining factor in inducing the other party to enter into a contract. In other words, it is a secondary or collateral element of deceit that does not go to the root or essence of the contract.

Question 25

It is a voluntary act or omission, there being no malice, which prevents the normal fulfillment of the obligation. It is the failure to exercise the degree of care required.

Answer 25

Negligence

Question 26

It is the failure to comply with one’s obligation with respect to time. It is either be malicious or negligent.

Answer 26

Delay (mora)

Question 27

This simply means the violation of the terms and conditions of the agreement.

Answer 27

Contravention of the tenor of the obligation

For instance, if a bus fails to safely transport passengers to their destination, it’s considered a contravention of the agreement, warranting compensation for damages. Unlike other bases for claiming damages, this doesn’t necessarily require proving negligence or fraud but encompasses **any failure to meet contractual terms. **

Question 28

The contravention must be due to a fortuitous event or force majeure.

Answer 28

False

The contravention must not be due to a fortuitous event or force majeure.

Question 29

It is merely the failure to perform an obligation on time.

Answer 29

Ordinary Delay

If A is indebted to B in the amount of P50,000, which was due on August 13, 2017, but A failed to pay the same on said date, then he is already considered in delay.

Question 30

It is the failure to perform an obligation on time which failure constitutes a breach of the obligation.

Answer 30

Legal Delay

To put a person in legal delay, demand for the fulfillment of the obligation after it falls due must be made by the obligee against the obligor.

Question 31

True or False:

Demand is not necessary for the enforcement of the obligation.

Answer 31

True

The obligation remains valid and enforceable despite the absence of demand. It is only essential for the determination as to whether the debtor is liable for damages due to his failure to perform the obligation in time.

Question 32

True or False:

There are instances when there can be legal
delay even if the obligee made no demand.

Answer 32

True

In Article 1169 (1), it is required that either the obligation or
the law must expressly provide that demand is no longer
necessary for legal delay to attach.

On the other hand, an example of an obligation that by law no longer needs demand to put the debtor in legal delay is the payment of taxes. Hence, failure to pay taxes on time will hold the defaulting taxpayer liable for damages (in the nature of penalties), without need for demand for payment from the Government through the Bureau of Internal Revenue (BIR).

Question 32

Article 1169 (2) contemplates a situation where the designation of the time in the obligation is an **essential factor why the obligee entered into the agreement or contract. **

True or False:
In other words, the time of the fulfillment of the obligation is the main reason for the establishment of the contract.

Answer 32

True

Because of the importance placed upon the time of the fulfillment of the obligation, failure to perform the same on the agreed date will render any subsequent performance thereof useless and no longer necessary. Given the nature of such agreement, it would defy both logic and reason if he would first be required to make a demand before the debtor be made liable for damages.

Question 32

True or False:

Article 1169 (3) provides for a situation when demand is no longer needed to place the debtor in legal delay because demand has already been rendered useless, as when the thing due was lost or considerably damaged due to acts imputable to the debtor.

Answer 32

True

Question 33

True or False:

In a reciprocal obligation, demand is no longer necessary for legal delay to arise. Delay attaches in a reciprocal obligation when one of the parties thereto fulfills his part of the bargain, and the other party does not.

Answer 33

True

Even if one of the parties already made a demand to the other, but he himself is not yet ready to comply with his obligation, then the one to whom demand was made is not yet considered in legal delay.

Question 34

Kinds of Delay

As regards the party guilty of delay, there are three (3) kinds:

Answer 34

• Mora Solvendi
• Mora Accipiendi
• Compensatio Morae

Question 34

The delay on the part of the obligor.

Answer 34

Mora Solvendi

In addition to being liable for damages, which has already been discussed above, the debtor also becomes responsible for expenses incurred for the preservation of the thing, and continues to bear the risk of loss.

Question 35

The delay on the part of the creditor to accept the object of the obligation, without any justifiable or valid reason.

Answer 35

Mora Accipiendi

Now, if the thing that was supposed to be given gets lost or damaged during this delay and it’s not the fault of the person giving it (debtor), then the debtor is usually not responsible anymore, unless they caused the problem intentionally. The person (creditor) who was supposed to receive the thing also **has to pay for any costs the person giving it had to spend to keep it safe during the delay. **

Question 35

It is the delay on the party of both, in which case the liabilities of both shall be offset equitably. This is the kind of default that arises in a reciprocal obligation.

Answer 35

Compensatio Morae

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 a party in reciprocal obligations fulfills or is ready to fulfill his obligation, delay by the other begins.

Question 36

Different Kinds of Fruits

Answer 36

• Natural Fruits
• Industrial Fruits
• Civil Fruits

Question 37

These fruits are the spontaneous products of the soil, and the young and other products of animals.

Answer 37

Natural Fruits

E.g. Grass; all trees and plants on lands produced without the intervention of human labor.

Question 38

Fruits that are produced by lands of any kind through cultivation of labor.

Answer 38

Industrial Fruits

E.g. Sugar cane, vegetables, rice, and all products of lands brought about by reason of human labor.

Question 39

Fruits that are those derived by virtue of a juridical relation.

Answer 39

Civil Fruits

E.g. Rents of buildings, price of leases of lands and other property, perpetual or life annuities and other income.

Question 40

Two Kinds of Thing

Answer 40

• Specific or Determinate Thing
• Generic or Indeterminate Thing

Question 41

This is particularly designated or physically segregated / identified by its individuality.

Answer 41

Specific or Determinate Thing

Question 42

This is genus or class / identified by its specie.

Answer 42

Generic or Indeterminate Thing

Question 43

It is the exempting a carrier from liability for gross negligence is against public policy.

Answer 43

Stipulation

Question 44

• To preserve or take care of the thing due
• To deliver the fruits of the thing
• To deliver its accessions and accessories
• To deliver the thing itself
• To answer for damages in case on non-fulfillment of breach (Art. 1170)

Answer 44

Duties of the Obligation to Give a Determinate Thing

Question 45

• To deliver a thing which is of the quality intended by the parties.
• To be liable for damages in case of fraud, negligence, or delay in the performance of his obligation, or contravention of the tenor thereof.

Answer 45

Duties of the Obligation to Give a Generic Thing

Question 46

True or False:

In obligations to give, a person is obligated to transfer ownership of a specific object or provide a certain thing.

Failure to deliver or give the specified item within the agreed-upon terms constitutes a breach.

Answer 46

True

Question 47

True or False:

In obligations not to do, a person is required to perform a certain act or provide a specific service.

If the obligor fails to comply with this obligation or performs the act in contravention of the agreed tenor (terms) of the obligation, it constitutes a breach of contract.

Answer 47

False

It is the obligation to do.

Article 1167 refers to an obligation to do. It contemplates three situations:

• the debtor fails
• obligation is performed but contrary to the terms
• obligation is performed but in a poor manner

Question 48

True or False:

In obligations to do, a person is prohibited from performing a certain act.

If the obligor violates this prohibition, it constitutes a breach of the obligation.

Answer 48

False

It is the obligation not to do.

Article 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.

Question 49

The reason why specific performance cannot be ordered in a personal obligations.

It refers to a condition in which a person is compelled to work against their will under the threat of punishment or some other form of coercion. It is a violation of fundamental human rights and is often considered a form of slavery.

Answer 49

Involuntary Servitude

Question 50

It is the only remedy of the creditor if the obligation is cannot be done by another person.

It refers to the compensation or reimbursement that a debtor is obligated to provide to the creditor in case of a breach of contract or any other legal obligation.

Answer 50

Indemnification for damages

Question 51

When Demand Not Necessary to Put Debtor in Delay (5)

Answer 51

• When the obligation so provides
• When the law so provides
• When time is the essence
• When demand would be useless
• When there is performance by a party in
  reciprocal obligations

Question 52

Remedies of the Obligee/Creditor

An action to compel the obligor to fulfill his obligation is a remedy available only in case of an obligation to give.

The remedy of this performance is not available in an obligation to do, as it will amount to INVOLUNTARY SERVITUDE, because as a result, it will force the debtor to do something against his will.

Answer 52

Specific Performance

If I am obliged to deliver to you the first signed high school jersey of Michael Jordan, you can sue me for specific performance should I fail to fulfill my obligation, since the thing involved is a determinate thing. There can only be one “first” of such kind, and the same is not capable of substitution.

Question 53

Remedies of the Obligee/Creditor

An action wherein the obligor may be compelled to deliver another thing as a substitute or equivalent of that which he failed to deliver.

Answer 53

Substitute Performance

If I don’t deliver the promised signed high school jersey of Michael Jordan, you can sue me for substitute performance. This means you can ask for a different autographed Michael Jordan jersey as a replacement, as long as it’s the same kind and quantity as the one we initially agreed upon.

If substitute performance is not allowed, then the obligee may demand for the payment of damages from the obligor.

Question 54

Are those which are unforeseen, or even if foreseen, are inevitable. These are events which are generally beyond the control of man, or at least of the obligor, which prevents him from effectively performing his obligation.

Answer 54

Fortuitous Event

Question 55

There are two kinds of fortuitous events, as to origin or cause.

Answer 55

• Fortuitous Events
• Force majeure (Caso Fortuito)

Question 56

In general, those which are absolutely independent of human intervention. They are sometimes called “acts of God”, such as earthquake, flash floods, tsunami, intense hurricane, etc.

Answer 56

Fortuitous Events

Question 57

Those which are brought about by the acts, legitimate or otherwise, of a person other than the obligor. While there is human intervention, it is nonetheless one not coming from the obligor himself and over which he has no control over.

Examples of this are war, armed robbery, shipwreck, etc.

Answer 57

Force Majeure (Caso Fortuito)

Question 58

True or False:

The obligor will only be exempt from liability due to loss or damage arising from fortuitous events if the obligation is not generic.

Answer 58

True

The reason being that a genus or class is not subject to destruction or deterioration.

Question 59

Kinds of Fortutious Events

Answer 59

• Ordinary Fortuitous Events
• Extra-ordinary Fortuitous Events

Question 60

Those events which are common and which the contracting parties could reasonably foresee (e.g., rain)

Answer 60

Ordinary Fortuitous Events

Question 61

Events which are uncommon and which the contracting parties could not have reasonably foreseen (e.g., earthquake, fire, war, unusual flood)

Answer 61

Extraordinary Fortuitous Events

Question 62

True or False:

The debtor is guilty of fraud, negligence, or delay, or contravention of the tenor of the obligation, you cannot use a fortuitous event as a reason to be free from any responsibility.

Answer 62

True

Question 63

True or False:

The debtor has promised to deliver the same (specific) thing to two or more persons who do not have the same interest. The obligations can be distinguished due to fortuitous events.

Answer 63

False

If the fortuitous event is caused by the fault or negligence of the debtor, Article 1174 may not exempt the debtor from liability. The exception would apply when the debtor’s actions or omissions contribute to or worsen the impact of the fortuitous event.

Question 64

True or False:

When the obligation nature requires the assumption of risk, it does not distinguish the obligation due to a fortuitous event.

Answer 64

True

The obligation of an insurance company requires the assumption
of risk that anything can happen. Even there’s a fortuitous event, you will still be responsible to damages because you’re obligation requires you to assume risk and that’s the insurance.

Question 65

A contract whereby one of the parties delivers to another money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid. It may be gratuitous or with a stipulation to pay interest.

Answer 65

Simple loan or mutuum

Question 66

This is contracting for or receiving interest in excess of
the amount allowed by law for the loan or use of money,
goods, chattels, or credits

It refers specifically to the charging of excessive or unlawfully high rates of interest on loans. It involves interest rates that are deemed to be unfairly high or usurious.

Answer 66

Usury

Question 67

It is a payment for sacrifice; the monetary
charge for borrowing money.

Answer 67

Interest

Question 68

What are you going to pledge as a security for
the payment of debt.

Is any asset or property that a borrower pledges to a lender as security for a loan. It serves as a form of protection for the lender in case the borrower fails to repay the loan.

e.g. land

Answer 68

Collateral

Question 69

Requisites for recovery of interest (3)

Answer 69

• The payment of interest must be expressly stipulated.
• The agreement must be in writing.
• The interest must be lawful.

Question 70

True or False:

A stipulation for the payment of usurious interest is void.

Answer 70

True

The interest is not lawful that is why.

Question 71

True or False:

The legal presumption means that, in the absence of explicit indications to the contrary, the courts or legal authorities will assume that the interest corresponding to the principal has been satisfied.

The burden of proof may then shift to the creditor if they claim that the interest remains outstanding.

Answer 71

True

Question 72

It is meant the inference of a fact not actually known **arising from its usual connection with another which is known or proved. If something is *presumed, it is *not ABSOLUTE. Therefore, it can still be proven otherwise.

Answer 72

Presumption

Question 73

Two Kinds of Presumption

Answer 73

• Conclusive Presumption
• Disputable (or rebuttable) presumption

Question 74

It cannot be contradicted like the presumption that everyone is conclusively presumed to know the law.

Answer 74

Conclusive Presumption

Question 75

One which can be contradicted or rebutted by presenting proof to the contrary like the presumption established in Article 1167.

Answer 75

Disputable (or Rebuttable) Presumption

Question 76

An action where the creditor whose claims had not been fully satisfied, may go after the debtors (third persons) of the defendant-debtor

In a case that the debtor has no property, but the debtor has someone who also has a debt on him, the debtor can transfer the right of the collection of payment to his debtor thru court action. The court will grant it.

Answer 76

Accion Subrogatoria

Question 77

It is an action where the creditor files an action in court for the rescission of acts or contracts entered into by the debtor designed to defraud the former.

However, if the debtor intentionally sells all his property just to show the he has no property, the creditor may ask the court to impugn (ipawalang-bisa)/ rescind/ cancel the acts or contracts which the debtor may have done to defraud the creditor

Answer 77

Accion Pauliana

Note that this is the LAST remedy can be resorted after exhausting the properties of the debtor or subrograte himself in the latter‘s transmissible rights and actions.

Question 78

What is this called?

General Rule: All rights of the creditor can be passed, however the obligation of the debtor cannot.

However, it depends on the nature of the obligation.

Example: The scholarship cannot be passed because you are given a scholarship due to your intellectual ability (personal qualifications).

Answer 78

Transmissibility of rights

Question 79

Exceptions of the general rule of transmisssibility of rights. (2)

Answer 79

• Prohibited by the law (partnership, agency, and commodatum)
• Prohibited by stipulation of parties