Art. 1163. Every person obliged to give - A.K.A.

ORDINARY CARE
something is also obliged to take care of it - Ultimate test: “If you put a prudent
with the proper diligence of a good father person in the same situation, would
of a family, unless the law or the he have done the same thing
stipulation of the parties requires another (negligence)?”
standard of care.
2.) Another Standard of Care
To which applies: - EXCEPTION
- Only applies to Specific/Determinate - By Law or by Stipulation
things. - Can be Slight or Extraordinary

Specific/Determinate vs. Art. 1164. The creditor has a right to the

Generic/Indeterminate fruits of the thing from the time the
obligation to deliver it arises. (personal)
Specific Generic
However, he shall acquire no real
- Designated with - Part of a right over it until the same has been
Particularity. Group/Class. delivered to him. (real)

- Individual - Not designated Personal Right vs. Real Right

with
- Separate from a Particularity
(1) Personal Right – power demandable by
Class.
one person over the other (to do, or not to
do). Valid only before DELIVERY
The debtor The debtor CAN
CANNOT GIVE ANYTHING of (2) Real Right – is power over a specific
SUBSTITUTE it with the same class if it thing (right to ownership and possession)
another. Although is of the same kind. and is binding to the whole world. Valid only
the latter is of the after DELIVERY
same kind and
quality without the Examples:
consent of the
creditor. 1.) X promises to deliver a parcel of land
to Y on Dec. 15.
(Art. 1244)
Note: Before Dec. 15, Y has NO right
whatsoever. On Dec. 15, the
Example: Example:
personal right of Y arises. He can
Millennia promises Millennia promises then DEMAND A to perform her
to deliver the title to deliver the title obligation.
of the ONLY land of the land she
she owns in Cebu. owns in Cebu. Assuming that X delivered the land
on Dec. 17. Starting on that day, Y
Note: ONLY Note: She may own shall have a real right over the
assigned many or a GROUP property.
PARTICULARITY to of lands in Cebu,
the subject hence, absent is 2.) X promises to deliver a parcel of land
the particularity.
to Y.

Note: Since there is no agreed

Duty to exercise DILIGENCE:
period, the obligation is
DEMANDABLE AT ONCE.
1.) Diligence of a good father of a
family
- GENERAL RULE
 Hence, at the instant perfection of
the contract Y shall now (2) On August 20, 1986, the Spouses Lu
IMMEDIATELY have a personal right sold the two parcels of land to
to compel X to deliver. Subsequently, respondent Pablo Babasanta for
Y shall only have a real right over the P15.00 per square meter.
property once X DELIVERS the land.
(3) Babasanta made a downpayment of
KINDS OF DELIVERY P50,000.00 and made several other
payments totaling P200,000.00.
a.) Actual delivery – Physical delivery; the
thing that was promised will actually (4) In May 1989, Babasanta demanded
change hands the execution of a final deed of sale
and notified the spouses about
b.) Constructive delivery – Implied delivery another sale of the property without
or transfer. This may be done by: his knowledge and consent.

(1) Traditio Simoblica – Symbolic (5) Pacita Lu responded by

delivery (e.g. handing over the keys acknowledging the sale to Babasanta
of house, or car). but claimed that he backed out of
the sale when she refused to reduce
(2) Traditio Longa Manu – by mere the price.
consent or pointing out of the
object (e.g. pointing out the car and (6) Babasanta filed a complaint for
saying “you now own that car”) specific performance and damages
against the Spouses Lu.
(3) Traditio Brevi Manu – possessor who
is not the owner of the thing (7) San Lorenzo Development
becomes both the possessor and Corporation (SLDC) filed a motion for
owner (e.g. tenant who already intervention, claiming that it had
possesses the unit buys the unit, bought the property from the
subsequently owning it). Spouses Lu in a separate transaction.

(4) Traditio Constitutum Possessorium – (8) The trial court ruled in favor of SLDC,
opposite of brevi manu (e.g. owner upholding the sale to SLDC and
of the house sells the house but ordering the Spouses Lu to pay
remains in possession of it as Babasanta.
tenant).
(9) The Court of Appeals reversed the
(5) Tradition by Execution of Legal decision, declaring the sale to SLDC
Forms and Solemnities – e.g. null and void and ordering the
execution of a public instrument Spouses Lu to execute a deed of
selling the land. conveyance in favor of Babasanta.

CASES (Art. 1164) (10) SLDC filed a petition for review with
the Supreme Court.
San Lorenzo Development Corp. v. Court of
Appeals ISSUE:
G.R. No. 124242
(1) Who between SLDC and Babasanta
FACTS: has a better right over the two
parcels of land?
(1) Respondents Miguel Lu and Pacita
Zavalla Lu owned two parcels of land RULING:
in Sta. Rosa, Laguna.
 (1) The Supreme Court ruled in favor of
SLDC. The decision of the Court of Art. 1165. When what is to be delivered is
Appeals was reversed and set aside, a determinate thing, the creditor, in
and the decision of the trial court addition to the right granted him by Article
was reinstated. 1170 (damages), may compel the debtor to
make the delivery. (specific performance)
RATIO:
If the thing is indeterminate or
(1) The agreement between Babasanta generic, he may ask that the obligation be
and the Spouses Lu is a contract to complied with at the expense of the
sell, not a contract of sale. The debtor.
sellers did not intend to transfer
ownership until full payment of the If the obligor delays, or has
purchase price. promised to deliver the same thing to two
or more persons who do not have the
(2) Babasanta failed to make the proper same interest, he shall be responsible for
tender of payment and consignation fortuitous event until he has effected the
of the price, which is necessary to delivery.
extinguish his obligation to pay the
balance of the purchase price. Purpose:
- Provides the REMEDIES for
(3) Even if the transaction was a CREDITORS in real obligations.
contract of sale, Babasanta did not
acquire ownership because there To which applies:
was no delivery of the property to - There are 2 types of obligations as to
him, either actual or constructive. subject matter: (1) Personal
Obligations and (2) Real Obligations
(4) SLDC qualifies as a buyer in good
faith because it had no knowledge of - Only applies to Real Obligations
the prior transaction with
Babasanta. SLDC had acted in good Two types of Real Obligations:
faith from the time of execution of (1) Specific
the first deed up to the moment of (2) Generic
transfer and delivery of possession
of the lands. REMEDIES for Specific Real Obligations

(5) The registration of the sale by SLDC, a.) Demand Specific Performance with
even after the annotation of the damages (Art. 1170). (Legal compulsion via
notice of lis pendens, does not affect demand letter first; if to no avail, then file
SLDC's prior possession of the SP before the court)
property in good faith.
b.) Demand Recission or Cancellation with
(6) SLDC's right is superior to damages (Art. 1170).
Babasanta's because SLDC acquired
possession of the property in good c.) Just demand Damages (Art. 1170).
faith, while Babasanta neither
registered nor possessed the REMEDIES for Generic Real Obligations
property at any time.
a.) Demand for Performance (just a
(7) The rules on double sale do not different name from SP since it’s Generic)
apply in this case because the with damages (Art. 1170).
contract between Babasanta and the
Spouses Lu is a contract to sell, not a
contract of sale.
b.) Ask that the obligation be complied with b) Legal Delay (Default) – Delay that
at the expense of the debtor (Art. 1165 Par. amounts to virtual non-fulfillment
2). of the obligation. (granted their
must first be a DEMAND FOR
c.) To Recover Damages for the breach of FULFILLMENT, either Judicial or
contract. Extrajudicial).
Art. 1166. The obligation to give a
Fortuitous Events determinate thing includes that of
delivering all its accessions and
(1) Events that CANNOT BE FORSEEN. accessories, even though they may not
have been mentioned.
Example: Earthquake
THE ACCESSORY ALWAYS FOLLOWS THE
(2) Though foreseen, is INEVITABLE. PRINCIPLE

Example: Typhoon General Rule:

EFFECTS OF FORTUITOUS EVENTS - ANYTHING FOUND WITHIN or is

considered to be ACCESSORY TO
a.) On Specific Obligations THE SUBJECT of contract shall be
presumed to be included in its
- EXTINGUISHED by Fortuitous Events. delivery.
- The offered price shall be
- Example: X is obliged to give Y his PRESUMED TO INCLUDE all
ONLY Mitsubishi car. X can use the accessories of the subject.
reason that his ONLY Mitsubishi car
got wrecked by a reckless driver. Exception:
Thus, his real obligation becomes
EXTINGUISHED. - Unless otherwise stipulated in the
contract.
b.) On Generic Obligations
Examples:
- CANNOT BE EXTINGUISHED by
Fortuitous Events. (1) X is obliged to sell his car to Y, and
that includes the tools and all other
- X is obliged to give Y a Mitsubishi accessories that come with the car.
car. X cannot use the same reason
earlier since a generic thing can be (2) X is obliged to sell a parcel of land to
REPLACED by a similar thing. Thus, Y, which contains a STRUCTURE.
his real obligation can NEVER BE Thus, the STRUCTURE must be
EXTINGUISHED. included in the delivery of the
subject land.
EXCEPTIONS TO FORTUITOUS EVENTS
CASES (Art. 1166)
1.) If the obligor DELAYS
Caleon v. Agus Development Corp. & C.A.
2.) If the obligor is guilty of BAD FAITH G.R. No. 77365
(dishonesty)
FACTS:
Ordinary Delay vs. Legal Delay (Default)
(1) Private respondent Agus
a) Ordinary Delay – Mere non- Development Corporation is the
performance at the stipulated time. owner of a parcel of land in Manila,
which it leased to petitioner Rita
 Caleon for a monthly rental of (1) The lease of a building naturally
P180.00. includes the lease of the lot on
which it is constructed, and the
(2) Petitioner constructed a 4-door rentals of the building include the
apartment building on the leased rentals of the lot.
lot. (2) The occupancy of a building or
(3) Without the consent of the private house implies the tenancy or
respondent, the petitioner sub- possession of the land on which it is
leased two of the four doors of the constructed.
apartment to other individuals.
(3) Batas Pambansa Blg. 25 enumerates
(4) Private respondent demanded in the grounds for judicial ejectment,
writing that the petitioner vacate including the subleasing of
the premises, but the petitioner residential units without the written
failed to comply. consent of the owner/lessor.

(5) Private respondent filed a complaint (4) The term "residential unit" includes
for ejectment against the petitioner, not only buildings used solely as
citing the unauthorized sub-leasing dwelling places, but also the land on
of part of the leased premises as a which another's dwelling is located.
ground for ejectment under Batas
Pambansa Blg. 25. (5) The constitutional guaranty of non-
impairment of obligations of
(6) The Metropolitan Trial Court ruled in contract is limited by the exercise of
favor of the private respondent, police power in the interest of public
ordering the petitioner to vacate the health, safety, morals, and general
premises and pay attorney's fees. welfare.

(7) The Regional Trial Court affirmed the (6) Batas Pambansa Blg. 25 is a police
decision of the Metropolitan Trial power legislation applicable to
Court. leases entered into prior to its
effectivity, and its applicability to
(8) The Court of Appeals dismissed the existing contracts cannot be denied.
petition for review of the decision of
the Regional Trial Court. (7) The objective of Batas Pambansa
Blg. 25 is to remedy the plight of
Hence, case at bar. lessees, but it is not subject to
exploitation by the lessees for
ISSUE: whose benefit the law was enacted.

(1) Whether the lease of an apartment (8) Social justice cannot be invoked to
includes a sublease of the lot on trample on the rights of property
which it is constructed, as would owners, who are also entitled to
constitute a ground for ejectment protection under the Constitution
under Batas Pambansa Blg. 25. and laws.

RULING: Art. 1167. If a person obliged to do

something fails to do it, the same shall be
(1) The Court ruled in favor of the executed at his cost.
private respondent and affirmed the
decision of the Court of Appeals. This same rule shall be observed if
he does it in contravention of the tenor of
RATIO: the obligations. Furthermore, it may be
decreed that what has been poorly done (4) Upon examination, Chaves found
be undone. that the typewriter was in shambles,
with missing parts and screws.

To which applies: (5) Chaves sent a letter to Gonzales

- ONLY in Positive Personal demanding the return of the missing
Obligations (TO DO) parts and the sum of P6.00.

(6) The next day, Gonzales returned

REMEDIES of Failure/Refusal TO DO some of the missing parts, the
interior cover, and the P6.00.
1.) To have obligation performed by others
(or himself) at the EXPENSE OF THE (7) Chaves had the typewriter repaired
DEBTOR. by Freixas Business Machines for a
total cost of P89.85, including labor
2.) Obtain damages (Art. 1170). Damages and materials.
alone cannot substitute for performance if
owners can do it – if purely personal or (8) Chaves filed a complaint before the
special (e.g. a painting that can only be City Court of Manila, seeking
done by a reputed artist payment of P90.00 as actual and
compensatory damages, P100.00 for
NOTE: Specific Performance is not included temperate damages, P500.00 for
due to the Constitutional Prohibition of moral damages, and P500.00 as
Involuntary Servitude. attorney's fees.

When an obligation can be UNDONE ISSUE:

1.) If made poorly (Art. 1167 Par. 2) (1) Whether Gonzales is liable for
breach of contract and should be
2.) If the obligation performed is Negative ordered to pay damages and
(provided that undoing is possible). attorney's fees.

CASES (Art. 1167) RULING:

Chaves v. Gonzales (1) The court ruled that Gonzales is

G.R. No. L-27454 liable for breach of contract and
should pay the plaintiff the sum of
FACTS: P89.85, with interest at the legal rate
from the filing of the complaint.
(1) Rosendo O. Chaves (plaintiff-
appellant) delivered a portable (2) The court rejected the claims for
typewriter to Fructuoso Gonzales moral and temperate damages and
(defendant-appellee) for routine attorney's fees, as these were not
cleaning and servicing. alleged in the complaint.

(2) Despite repeated reminders, RATIO:

Gonzales failed to finish the job and
only gave assurances. (1) The time for compliance had expired
and there was a breach of contract
(3) Chaves went to Gonzales' house and by non-performance, so it was
asked for the return of the unnecessary for the plaintiff to have
typewriter, which was delivered in a first petitioned the court to fix a
wrapped package. period for the performance of the
contract before filing the complaint.
 (1) When the obligation or the law
(2) Gonzales cannot invoke Article 1197 expressly so declares; or
of the Civil Code, as he virtually (2) When from the nature and the
admitted non-performance by circumstances of the obligation it
returning the typewriter in a non- appears that the designation of the
working condition with missing time when the thing is to be
parts. delivered or the service is to be
rendered was a controlling motive
(3) Gonzales is liable for the cost of for the establishment of the
labor or service expended in the contract; or
repair of the typewriter, which is in (3) When demand would be useless, as
the amount of P58.75, as the when the obligor has rendered it
obligation or contract was to repair beyond his power to perform.
it.
In reciprocal obligations, neither party
(4) Gonzales is also liable under Article incurs in delay if the other does not comply
1170 of the Civil Code for the cost of or is not ready to comply in a proper
the missing parts, in the amount of manner with what is incumbent upon him.
P31.10, as he failed to return the From the moment one of the parties fulfills
typewriter in the same condition it his obligations, delay by the other begins
was when he received it.
WHEN WILL DELAY TAKE EFFECT
(5) Claims for damages and attorney's
fees must be pleaded and proved, General Rule:
and as no findings of fact were made
on these claims, there is no factual - There MUST be a Judicial or
basis for an award. Extrajudicial DEMAND first. (Art.
1169 Par. 1)
Art. 1168. When the obligation consists in
not doing, and the obligor does what has - NO DEMAND, NO DELAY
been forbidden him, it shall also be
undone at his expense. Exception:

To which applies: (1) By stipulation or by law

- ONLY in Negative Personal
Obligations (NOT TO DO). Example: Tax Code, wherein the BIR
does not need to demand from you
REMEDY for doing what is supposedly NOT to have you incur delay and pay
TO DO interest, as expressed in the law.

1.) UNDOING of the prohibited thing (2) If time is of the essence

2.) plus DAMAGES (Art. 1170)
Example: You made an order for a
Art. 1169. Those obliged to deliver or to do wedding cake to be delivered on
something incur in delay from the time the your wedding. Assuming your
oblige judicially or extrajudicially demands wedding is tomorrow, obligor cannot
from them the fulfillment of their say he didn’t incur delay because
obligations. TIME IS OF THE ESSENCE.

However, the demand by the (3) Demand is useless, since obligor

creditor shall not be necessary in order cannot perform his obligation
that delay may exist: anymore.
 Example: X is obliged to deliver a car (3) There must be a DEMAND, unless it
to Y on a certain date. X decided to is not required.
destroy the car before the arrival of
the agreed upon date. Demand is (4) The DEMAND must be for the
already useless at this point as X the obligation THAT IS DUE.
obligor, is already rendered beyond
his power to perform. Hence, Legal EFFECTS:
Delay will incur regardless of delay.
(1) Debtor is liable for INTEREST or
DAMAGES.

DELAY IN RECIPROCAL OBLIGATIONS (2) Debtor MAY also bear the risk of
LOSS.
General Rule: (3) He is liable even for Fortuitous
Events. (Damages can be mitigated if
- If one of the contracting parties he can prove that had he not been in
delivers his obligation, the other default, loss would’ve occurred
party who refuses to perform the anyway).
reciprocal obligation shall incur
Legal Delay; without need of 2.) Mora Accipiendi – default on the part of
demand of course. the creditor.

Exception: (1) Creditor is in default when he

UNJUSTIFIABLY REFUSES to accept
- Unless of course otherwise payment or performance can be
stipulated in the contract. Then, a done
Demand is required before Delay
shall occur, remedy is to claim (2) If obligation is a result of a crim (ex
damages. delicto), the debtor-criminal is
responsible for the loss, UNLESS the
- Or when the obligor expressly creditor is in Mora Accipiendi.
acknowledged that he really is in
default/delay. (3) Creditor must shoulder the
accidental loss if there was
KINDS OF MORA (DELAY/DEFAULT) IMPROPER REFUSAL on his part.

1.) Mora Solvendi – default on the part of 3.) Compensatio Morae (Reciprocal
debtor Obligations) – both parties are in default; as
if NEITHER are in default.
TYPES:
(1) ONLY if both parties are in default.
(1) Mora solvendi ex re (debtor’s default
in real obligations)
Art. 1170. Those who in the performance
(2) Mora solvendi ex persona (debtor’s of their obligation are guilty of fraud,
default in personal obligations) negligence, or delay and those who in any
manner contravene the tenor thereof, are
REQUISITES: liable for damages.

(1) Obligation must be DUE. GROUNDS FOR LIABILITY

(2) There must be NON-PERFORMANCE. 1.) FRAUD (deceit or dolo) – INTENTIONAL

evasion of fulfillment.
2.) NEGLIGENCE (fault or culpa) – Art. 1173
b) Liability arising (2) Liability due to
3.) DEFAULT (or mora) – granted if it is ONLY from dolo negligence may
imputable to the debtor. CANNOT be be reduced in
mitigated or certain cases.
4.) VIOLATION OF TERMS OF OBLIGATIONS reduced by the
courts.
(violation) – unless EXCUSED in proper cases
by Fortuitous Events.
c) Waiver of an (3) Waiver of an
The following are NOT EXCUSES: action to action to
(1) Increase in cost of performance. enforce liability enforce liability
(2) Poverty due to future due to future
(3) War fraud is VOID. culpa may in
KINDS OF DAMAGES certain sense be
allowed.
1.) MORAL – for MENTAL and PHYSICAL
anguish. KINDS OF FRAUD

2.) EXEMPLARY – CORRECTIVE or to set an 1.) Culpa Contractual – “contractual

example. negligence”; or that which results in a
breach of contract.
3.) NOMINAL – to VINDICATE a RIGHT; when
no other kind of damage may be recovered. 2.) Culpa Aquilana – “civil negligence” or
tort or quasi-delict.
4.) TEMPERATE – when exact amount of
damages CANNOT BE DETERMINED. 3.) Culpa Criminal – “criminal negligence”;
or that which results in the commission of
5.) ACTUAL – actual losses as well as the crime or delict.
unrealized profit.
Art. 1173. The fault or negligence of the
6.) LIQUIDATED – predetermined obligor consists in the omission of that
beforehand by agreement. diligence which is required by the nature of
the obligation and corresponds with the
Art. 1171. Responsibility arising from fraud circumstances of the person, of the time
is demandable in all obligations. Any and of the place. When negligence shows
waiver of an action for future fraud is void. bad faith, the provision of Articles 1171
and 2201, paragraph 2, shall apply.
Art. 1172. Responsibility arising from
negligence in the performance of every If the law or contract does not state
kind of obligation is also demandable, but the diligence which is to be observed in the
such liability may be regulated by the performance, that which is expected of a
courts, according to the circumstances. good father of a family is required.

FRAUD vs. NEGLIGENCE Art. 1174. Except in cases expressly

specified by the law, or when it is
DOLO CULPA otherwise declared by stipulation or when
the nature of the obligation requires the
a) There is a (1) Although assumption of risk, no person shall be
DELIBERATE voluntary (not responsible for those which could not be
intention to done through foreseen, or which though foreseen, were
cause damage force), still there inevitable. (Fortuitous Events)
or prejudice. is NO
DELIBERATE Art. 1175. Usurious transactions shall be
intention to
governed by special laws.
cause damage.
 transmissible, if there has been no
USURY Defined: stipulation to the contrary.

- It is contracting for or receiving TRANSIMISSABILITY OF RIGHTS

something in excess of the amount
allowed by law for the loan or use of General Rule:
money, goods, chattels, or credits
- Rights are TRANSIMISSIBLE.
- In short, Usury is the exaction of
excessive interest. Exceptions:
(1) If the law provides OTHERWISE;
Art. 1176. The receipt of the principal by (2) If the contract provides OTHERWISE;
the creditor, without reservation with (3) If the obligation is PURELY
respect to the interest, shall give rise to the PERSONAL
presumption that said interest has been
paid.

The receipt of a later installment of

a debt without reservation as to prior
installment, shall likewise raise the
presumption that such installments have
been paid. (Presumptions)

Art. 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.

RIGHTS OF CREDITORS (REMEDIES)

1.) Exact Payment

2.) Exhaust debtor’s properties, generally by

attachment.

3.) Accion Subrogatoria (subrogatory action)

– exercise all rights and actions EXCEPT
those inherent in the person (e.g. parental
authority, right to revoke donations on
ground of ingratitude, hold office, carry out
an agency). This is NOT a remedy of
subrogation referred to in the Chapter on
Novation

4.) Accion Pauliana – impugn or rescind acts

or contracts done by the debtor to defraud
creditors.

Art. 1178. Subject to the laws, all rights

acquired in virtue of an obligation are