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ARTICLE 1163-1178 - Highlighted. Reviewer

Law On Obligations And Contracts (University of Baguio)

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ARTICLE 1163. Every person is 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
● Specific (Determinate) - particularly designated or physically segregated
● Generic (Indeterminate) - cannot be pointed out with particularly

“Duties Of Debtor In Obligation To Give Determinate (Specific Real

Obligation)”
1. Preserve the thing - take care with the diligence of a good father; ordinary
care or extraordinary care.

2. Deliver the fruits of the specific thing

a. Natural - without human intervention
b. Industrial - cultivation and human labor
c. Civil - juridical relation
ARTICLE 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.
> Personal right - 1164 first sentence; enforceable against a specific person only.
> Real right - 1164 2nd sentence; enforceable against the whole world.

3. Deliver the accessions and accessories

ARTICLE 1166 - the obligation to give the determinate thing includes that of
delivering all its accessories and accessions, even though they may not have been
mentioned.
Note: Accessions are not necessary to the principal thing, while the Accessory and
the principal thing must go together.

4. Deliver the specific thing

Delivery “traditio” -for enjoyment of the thing and mode of transferring ownership
Article 1477 - Actual (physical)
- Legal (constructive) - legal formalities, traditio symbolica, traditio longa
manu, traditio brevi manu, and traditio constitutum possessorium

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5. Answer/liable for damages in case on non-performance/non-fulfillment

(ground for liabilities-1170)

“Duties Of The Debtor To Give Indeterminate (Generic Real Obligation)”

1. To deliver a thing which is of the quality intended by the parties - The benefit
of Article 1246 may be waived by the creditor or by accepting a thing of
inferior quality, and by the debtor by delivering a thing of superior quality.
2. To be liable for damages (ground for liabilities-1170 )

“Remedies Of Creditor In Real Obligation”

ARTICLE 1165 (1ST PAR.). When what is to be delivered is a determinate thing, the
creditor, in addition to the right granted to him by Art. 1170, may compel the debtor
to make delivery.
1. Specific performance - compel to fulfill his obligation; or
2. Rescind/cancellation - cancel and right to indemnify damages; or
3. Equivalent performance - demand payment for damages, if only feasible
remedy.

ARTICLE 1165. (2ND PARAGRAPH). If the thing is indeterminate or generic, he

may ask that the obligation be complied with at the expense of the debtor. {par. 3 to
be discussed on Arts. 1169, 1174, 1263}
1. Same remedies
2. Added is the substitute performance

“Remedies Of Creditor For Positive Personal Obligation”

ARTICLE 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.
1. If they fail to comply, have the obligation performed by himself (Creditor) or
another person ( 3rd person) at the debtor’s expense; and to recover
damages.
2. If contravention to the tenor or poorly done, may ask to undone what has
been done if it is possible to undo what was done. It cannot be compelled

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because it will tantamount to involuntary servitude (article III, Sec. 10).

“Remedies Of Creditor For Negative Personal Obligation”

ARTICLE 1168. When the obligation consists in not doing, and the obligor does what
has been forbidden him, it shall be undone at this expense.
1. To abstain from the act, hence no specific performance
2. No can be delayed in performing nothing.
3. Undoing of the forbidden thing/act plus damages. If impossible to undone,
remedy is an action for damages only.

ARTICLE 1169. (1ST PARAGRAPH) Those obliged to deliver or to do something

incur in delay from the time the obligee judicially or extra judicially demands from
them the fulfilment of the obligation.
Delay - nonfulfillment of obligation with respect of time.
General rule: “no demand, no delay”

ARTICLE 1169. (2ND PARAGRAPH) However, the demand by the creditor shall not
be necessary in order that delay may exist: (1) When the obligation or the law
expressly so declares; or (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 for the establishment motive of the
contract, or (3) When demand would be useless, as when the obligor has rendered it
beyond his power to perform.
1. Ordinary delay
2. Legal delay (Default or mora)
1) mora solvendi - debtor’s delay to deliver; ex re (real obligation) and ex
persona (personal obligation)
2) mora accipiendi - creditor’s delay to accept
3) compensatio morae - delay in both, in the net effect there is no delay

ARTICLE 1169. (3RD PARAGRAPH) In reciprocal obligations, neither party incurs in

delay if the other does not comply in a proper manner with what is incumbent upon
him. From the moment one of the parties fulfils his obligation, delay by the other
begins.

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“Grounds For Liability”

ARTICLE 1170. Those 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.
1. Fraud (dolo) - deliberate or intentional evasion
ARTICLE 1171. Waiver of an action for future fraud is void but any waiver of an
action for past fraud is valid.
a. Dolo incidenti - fraud committed in the performance of an obligation
(1170)
b. Dolo causante - fraud employed in the execution of a contract or at the
start of the life of the contract. Article 1338 (vices of consent).

2. Negligence (culpa) - omission of that diligence

ARTICLE 1172. Waiver of an action for future negligence is void IF IT SHOWS BAD
FAITH but any waiver of an action for future negligence may be renounced except in
cases where the obligation requires extraordinary diligence.
ARTICLE 1173. (1ST PARAGRAPH) The fault or negligence of the obligor consists
in 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.
When negligence shows bad faith, the provisions of articles 1171 and 2201,
paragraph 2, shall apply.
a. Culpa contractual - breach of contract
b. Culpa aquiliana - quasi-delict/tort, ex. Injured through reckless driving
c. Culpa criminal - delicts, ex. Death through reckless imprudence

3. Delay (mora) - Article 1169

4. Contravention of tenor - breach of contract

ARTICLE 1173. (2ND PARAGRAPH) If the law or contract does not state the
diligence which is to be observed in the performance, that which is expected of a
good father of a family shall be required.
Diligence - 1. As required by law, 2. As stipulated by parties, 3. Absence of 1 & 2,
diligence of a good father of a family

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Damages - harm done and some of money that may recovered

Injury - legal wrong/ unlawful/ tortious act
“Kinds of Damages”
Moral - moral and physical anguish
Exemplary - corrective or to set an example
Nominal - to vindicate right
Temperate - moderate or exact amount cannot determine; cannot ascertained
Actual - compensatory or actual losses & unrealised profit; Pecuniary loss must be
Liquidated - predetermined beforehand by agreement

Fortuitous event - act of man or act of God (force majeure)

Essential characteristics/requisites
● Cause is dependent of the will of the debtor
● Unforeseeable or unavoidable
● Impossible for the debtor to fulfill the obligation in normal manner
● The debtor must be free from any participation in aggravation to the creditor
GENERAL RULE: No person shall be liable for fortuitous events. (Obligation -
Extinguished)
ARTICLE 1174. Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the obligation requires the
assumption of risk, no person shall be responsible for those events which could not
be foreseen, or which though foreseen, were inevitable.
Exceptions:
● Expressly declared by the law
● Expressly declared by stipulation
● The nature of the obligation requires the assumption of risk
● The debtor has incurred delay/guilty of fraud/negligence/breach of contract
● The debtor promised to deliver the same thing to two or more persons who do
not have the same interest
● The thing to deliver is indeterminate/generic
● The obligation to deliver a specific thing arises from crime
● The bailee in commodatum allows third person to use the thing borrowed

Simple loan or mutuum - a contract whereby the debtor delivers to another, upon the

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condition that the same amount of the same kind and quality shall be paid.

ARTICLE 1175. Usurious- transactions shall be governed by special laws.

Conclusive presumption – one which cannot be contradicted.
Disputable presumption – one which can be contradicted.

Usury - interest in excess of the amount allowed by the law

-A stipulation for payment of usurious interest is VOID.But, by virtue of Central
Bank Circular No. 905 issued by the Monetary Board under the authority by Usury
Law, the rate of interest and other charges shall not be subject to any ceiling
prescribed under the Usury Law. Parties are now free to stipulate any amount of
interest.

ARTICLE 1176 (1ST PARAGRAPH). The receipt of the principal (the main amount
in a loan/debt) by the creditor, without reservation with respect to the interest, shall
give rise to the presumption that said interest has been paid.

ARTICLE 1176 (2ND PARAGRAPH). The receipt of a later installment of a debt

without reservation as to prior installments, shall likewise raise the presumption that
such installments have been paid.

“Remedies Available To Creditors For The Satisfaction Of Their Claims.”

ARTICLE 1177. The creditors, after having pursued the property in possession of the
debtor to satisfy their claims, may exercise all the rights and bring all the actions of
the latter for the same purpose, save those which are inherent in his person; they
may also impugn the acts which the debtor may have done to defraud them.
➔ Exact Fulfillment
➔ Pursue the leviable property of the debtor
➔ All rights to collect from the debtor except those inherent or personal
➔ Ask the court to cancel the contracts (may be done only if the creditor uses
the first three remedies and still recovers nothing).

Transmissibility of rights
ARTICLE 1178. Subject to the laws, all rights acquired in virtue of an obligation are

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transmissible, if there has been no stipulation to the contrary.

GENERAL RULE: All rights acquired by virtue of an obligation are transmissible.
EXCEPTIONS (to the General Rule)
(1) When the law prohibits the transfer of rights
(2) When the stipulation of the parties prohibits the transfer of rights
(3) When the nature of the obligation does not permit transmission of rights

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