Article 1156. “An obligation ob ligation is a juridical ju ridical necessity t o give, to do, or n ot to do.” Obligation 1. Natural / Social / Religious 2. Civil – enforceable enforceable through court action *Defaulting party may be compelled to perform his obligation with damages or be ordered to simply pay damages
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Juridical Necessity – in case of non-compliance, the courts of justice may be called upon to enforce its fulfillment, in default, thereof, the economic value that it represents. Compliance + Damages or Damages Only If obligations weren’t made enforceable, then people can disregard them with impunity.
Essential Requisites of an Obligation:
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Passive Subject or Debtor – the person bound to perform the obligation / the one with a duty Active Subject Subjec t or Creditor – the person entitled entitle d to demand the fulfi llment of the obligation / the one with a right Object or Prestation or Subject Matter – the conduct required to be observed by the debtor 1. To give 2. To do 3. Not to do Juridical Tie (Efficient Cause) – binds or connects the parties to the obligation Ex. Anna owes Bea a sum of money amouting to $10,000. As payment, they agreed that Anna will repair the computer of Bea Passive: Ana Active: Bea Object: To repair the computer Juridical Tie: agreement or contract
Legal Terms To Know: •
Obligation is the act or performance that the law will enforce.
Kinds of Obligations According to Subject Matter:
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Real obligations (to give) or that in which the subject matter is a thing that the obligor must deliver to the obligee. Personal obligations obligations (to do or not to do) or that in which the subject matter is an act to be done or not to be done.
Article 1157. Sources of Obligation: 1. 2. 3. 4. 5.
Law Contracts Quasi-contracts Crimes or acts of omissions punishable by law Quasi-delicts or tarts
Article 1158. “Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable and shall be regulated by the precepts of the law which establishes them; and as to what has not been foresee, by the provisions of this Book.” • • •
Obligations arising from law are imposed by the law itself Not presumed since they are burdened to the debtor To be demandable, they must be clearly set forth in the law
Article 1159. “Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.” •
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A contract is a meeting of the minds between two persons whereby one binds himself with respect to the other, to give something or to render. Agreement by the parties Force of law between the parties Obligating nature of a binding and valid agreement Terms must not be contrary to law, morals, public order, policy and good customs
Article 1160. Quasi-contractual Obligations The juridical relation resulting from certain lawful, voluntary, and unilateral acts by virtue of which the parties become bound to each other to the end that no one will be unjustly enriched or benefited at the expense of another Means “as if” Contract = bilateral / quasi-contract = unilateral Ex. Negotiorum Gestio – voluntary management of the property or affairs of another without the knowledge or consent of the latter Solutio Indebiti – when something is received when there is no right to demand it and it was unduly delivered through mistake •
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Article 1161. Civil liability arising from crimes/delicts The commission of a crime causes not only moral evil but also material damage Every person criminally liable for a felony is also civilly liable In crimes which cause no material damage, there is no civil liability A person not criminally responsible may still be liable civilly Scope of Civil Liability: Restitution (or restoration) o • • • • •
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Reparation for damage caused Indemnification (compensation) for consequential damages
Article 1162. Obligations arising from quasi-delicts An act or omission by a person which causes damage to another in his person, property, or rights giving rise to an obligation to pay for the damage done, there being fault or negligence but there is no pre-existing contractual relation between the parties •
True or False 1. Without contract there are no obligations. FALSE 2. A person criminally liable is always civilly liable. FALSE 3. The debtor may be compelled to perform his obligation ‘to do’. FALSE 4. The parties have the freedom to stipulate the terms of their contract. TRUE 5. There are no consequences in case one will not comply with his social or religious obligation. FALSE Nature & Effects of Obligations • •
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Your obligations can either be to give, to do, or not to do If your obligation is to give, you are bound to deliver a thing – this thing can be determinate (particularly designated or physically segregated from all the others of the same class) or indeterminate (a class or genus to which it retains and can’t be pointed out particularly Determinate thing = specific thing *one Indeterminate thing = generic thing *more than one Ex. Car Toyota Altis Toyota car Blue Altis Toyota car A 2010 model blue Altis Toyota car A 2010 model blue Altis Toyota car from the Bel-air branch *all generic
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If you have an obligation to give, you must be able to know whether or not the object to be delivered is generic or specific since the law provides for different treatments
Article 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.” • •
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Refers to a specific thing If the thing to be delivered is generic, you don’t need to take care of it since in the event of loss/damage, it can easily be replaced Why the need to take care of a specific thing? In order to ensure that the object that was agreed upon by the parties will be the same thing to be delivered How to care? With the diligence of a good father of a family (DGFF – ordinary diligence) o If the law or the stipulation of the parties provides for anther standard of care (slight or extraordinary), said law or stipulation must prevail.
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.” Different Kinds of Fruits: 1. 2. 3.
Natural – spontaneous product of the soil and the young and other products of animals Industrial – produced by lands through cultivation of labor Civil – those derived by virtue of a juridical relation
Rights of Creditors to the Fruits Refers to specific thing only Creditor is entitled to the fruits from the time the obligation to make delivery of thing arises Obligation to deliver arises from the time of the perfection of the contract (from the birth of the contract) If the obligation is subject to a suspensive period or condition, then from the arrival of the period or the happening of the condition However, the parties may make a stipulation to the contrary as regards to the right of the creditor to the fruits of the thing In a contract of sale, the obligation arises from the perfection or the contract even if the obligation is subject to a suspensive period or condition where the price has been paid • •
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Ex. I will give you a horse. I have a pregnant horse. Are you entitled to the fruit? It is generic, therefore, no. I will give you my horse Pegasus. Pegasus is presently pregnant. Are you entitled to the fruit? Yes. I will give you my horse Pegasus on Christmas day. Are you entitled to the cod born on Sept. 30? No. Real Right 0 the right or interest of a person or a specific thing without a definite passive subject against whom the right may be personally enforced Personal Right – the right or power of a person (creditor) to demand from another (debtor) as a definite passive subject, the fulfillment of the latter’s obligation to give, to do, or not to do •
The creditor does not become the owner until the specific thing has been delivered to him. When there was no delivery yet, the proper action of the creditor is not one for recovery of possession and ownership but one for specific performance or rescission of the obligation
Article 1165. • •
If you’re the creditor, what will you do if the debtor fails to deliver? If the thing to be delivered is specific, I will: o o o
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Demand specific performance + damages Demand rescission or cancellation of the obligation with damages Demand the payment of the damages only
If the thing to be delivered is generic, I will: o Demand performance + damages o Ask another to make the delivery o Rescission / Damages
Article 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.” • • •
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Refers to specific thing only Accessions – fruits or additions to, or improvements upon a thing Accessories – things joined to or included with the principal thing for the latter’s embellishment, better use, or completion In a sale of a specific thing, accessions and accessories are included unless, excluded (generic – excluded unless otherwise stated)
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 a contravention of the tenor of the obligations. Furthermore, it may be decided that what has been poorly done be undone.” • • •
The debtor fails to perform his obligation The debtor performs his obligation but contrary to the terms The debtor performs an obligation to do but in a poor manner
Problem: LBJ signs a contract to endorse Gatorade. On the day of the shoot, he informs the company that he changed his mind and does not want to endorse the product anymore. What is the typical scenario that you will do to obtain remedy? Send a demand letter to LBJ giving a warning that you’ll bring the matter to court. If no result, file a case in court for damages. Judge will inform LBJ of his liability if he will not comply with his obligations. If no result, judge will order payment of damages. Problem: Pedro agreed to undertake the repainting of the classrooms in LS. On the day agreed upon, he changed his mind. Remedy? In addition to the preceding remedies discussed, DLSU can ask another to perform the job.
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/” Remedies: Undoing of the act + damages If the act can’t be undone = damages
Article 1170. This refers to Incidental Fraud or fraud in the performance of an obligation. FRAUD – the deliberate or intentional evasion of the normal fulfillment of an obligation. Not mere error of judgment but act of bad faith.
Causal Fraud – fraud employed in the execution of a contract.
Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void. NEGLIGENCE – An involuntary act or omission, there being no fault or malice, which prevents the normal fulfillment of an obligation.
Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but the courts, according to the circumstances, may regulate such liability. Factors to be considered: 1. Nature of the obligation 2. Circumstances of the person 3. Circumstances of the time 4. Circumstances of the place Diligence Required: 1. Agreement 2. Required by law 3.Diligence of a good father of a family Waiver allowed except: 1. Obligation requires extraordinary diligence (common carrier). 2. Negligence shows bad faith. In the two situations above, the waiver for future negligence will be disregarded. KIND OF NEGLIGENCE ACCORDING TO SOURCE OF OBLIGATION: 1. Contractual Negligence – culpa contractual negligence in contracts resulting in their breach. 2. Civil Negligence – culpa aquiliana / this is your quasi delict 3. Criminal Negligence – culpa criminal / negligence resulting in the commission of a crime (reckless imprudence cases)
CONTRIBUTORY NEGLIGENCE OF THE CREDITOR “When the plaintiff’s own negligence was the immediate and proximate causes of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded (Article 2214)”.
Article 1173. DELAY Ordinary Delay – mere failure to perform an obligation on time Legal Delay or Default – failure to perform an obligation on time which failure constitutes a breach of the obligation
Kinds: 1. Mora Salvendi 2. Mora Accipiendi 3. Compensatio Morae
Requisites: 1. Failure of the debtor to perform his obligation on the date agreed upon 2. Demand made by the creditor upon the debtor. Note: Burden is with creditor 3. Failure of the debtor to comply with such demand When demand is not necessary: 1. When the obligation so provides 2. When the law so provides 3. When time is of the essence 4. When demand would be useless 5. When there is performance by a party in reciprocal obligations CONTRAVENTION OF THE TENOR – the violation of the terms and conditions stipulated in the obligation. The contravention must not be due to a fortuitous event or force majeure.
Article 1174. Fortuitous Event – any event that cannot be foreseen, or which, though foreseen, is inevitable An event which is either impossible to foresee or impossible to avoid
