KINDS OF OBLIGATION

a. Civil – gives a right of action to compel their performance;

b. Natural– not based on positive law, but on equity and natural law; does not grant a right of action to enforce their
performance, but after voluntary fulfillment by the obligor, they authorize retention of what has been delivered rendered by
reason thereof.
 Moral – cannot be enforced by action but are binding on the party who makes it in conscience and natural law.
(Does not exist in the domain of law)

If A has a right of action, evidenced by a promissory note, to collect one thousand pesos from B, and such promissory
note prescribes after the expiration of ten years from the time it accrues,6 although the latter is no longer bound to pay the
obligation in accordance with the statute of limitations, he is still bound to pay in accordance with equity and natural law.

It is, therefore, clear that a civil obligation and a natural obligation may be distinguished from each other as follows: (1) A
civil obligation is based on positive law, while a natural obligation is based on equity and natural law 1157; and (2) The
former is enforceable in courts of justice, while the latter is not. Article 1423 - 1424

Natural versus Moral Obligations

Natural Obligation arises from an existing juridical tie, while Moral obligation is without a juridical tie
Moral obligations cannot produce legal effects/consequences, while natural obligation can

Legal effects of Natural Obligation

Article 1423. Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural
obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their
performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered
or rendered by reason thereof. Some natural obligations are set forth in the following articles.

Voluntary fulfillment
Must not be fulfilled/paid by reason of mistake, if it is so, it will be under solutio indebiti and the creditor in this case has
the obligation to return the erroneous payment/fulfillment

It must be a mistake of law for the creditor to retain the payment arises from natural obligation, since if it is a mistake of
fact, solutio indebiti will arise and the fulfillment will not be voluntary

Mistake of fact
Mistake of law

NATURE AND EFFECT OF OBLIGATION

From the viewpoint of the object or prestation:

Real obligation– to give or to deliver. (particulate to the thing that is to be delivered)
Personal obligation– to do or not to do (includes not to give) – particular to the person who will comply to the obligation

Personal right – Is the power of a person to demand to another, the fulfillment of the prestation to give, to do, or not to
do.
Real right over the object and fruits – belonging to a person over a specific thing

Sale by itself does not transfer ownership. It is transition or delivery, as a consequence of sale, that actually transfers
ownership.

Obligations To Give. — An obligation to give a thing may be either determinate or generic.

 It is determinate/specific when the object is particularly designated or physically segregated from all others of the
same class.

 It is generic or indeterminate when the object is designated merely by its class or genus without any particular
designation or physical segregation from all others of the same class.

 Delimited generic – Generic objects confined to a particular class (Tolentino, 2002); e.g. An obligation to deliver
one of my horses.
Rights of CREDITOR in determinate obligations. — If the obligation to give is determinate, the rights of the creditor are
as follows:
(1) To compel specific performance. This right is expressly recognized by the first paragraph of Art. 1165 of the Code
which states that the creditor may compel the debtor to make the delivery.
 It is complemented by the first paragraph of Art. 1244 which states that the debtor of a thing cannot compel the
creditor to receive a different one, although the latter may be of the same value as, or more valuable than that
which is due.
 Consequently, if the debtor does not comply with his obligation at the time when the obligation to deliver arises or
if he insists on delivering a different one, the remedy of the creditor is to file an action against the debtor to compel
specific performance.

(2) To recover damages for breach of the obligation. Besides the right to compel specific performance, the creditor
has also the right to recover damages from the debtor in case of breach of the obligation through delay, fraud, negligence
or contravention of the tenor thereof.

Rights of CREDITOR in generic obligations. — If the obligation to give is generic, the rights of the creditor are as
follows:

(1) To ask for performance of the obligation. Whether the object of an obligation to give is determinate or generic, it is
undeniable that the creditor has the right to ask for the performance of the obligation.
The only difference is that in determinate obligations to give, the creditor can compel specific performance, while in
indeterminate or generic obligations to give, he can only ask for the delivery of a thing or object belonging to the
class or genus stipulated which must be neither of superior nor inferior quality.

(2) To ask that the obligation be complied with at the expense of the debtor.
If the debtor refuses or is unable to comply with his obligation, the creditor can even ask that the obligation be
complied with at the expense of such debtor. If the debtor refuses to comply, the creditor can ask the performance
of the obligation from any third person and all expenses incurred shall be charged against the debtor.

(3) To recover damages for breach of the obligation.

In case of failure of the debtor to comply with his obligation, or in case of breach by reason of fraud, negligence, delay or
contravention of the tenor of the obligation, the creditor can demand for indemnification for damages.

Obligations of DEBTOR in determinate obligations. — If the obligation to give is determinate, the obligations of the
debtor are as follows:

(1) To perform the obligation specifically.

 In obligations to give a determinate thing, the obligor or debtor binds himself to deliver to the obligee or creditor a
thing or object which is particularly designated or physically segregated from all others of the same class.
 Hence, he cannot comply with his obligation by delivering a thing which is different from that which is
designated although belonging to the same class or genus. This is so even though the thing delivered may
be of superior quality.

(2) To take care of the thing with the proper diligence of a good father of a family; diligence required from a
reasonably prudent person.
XPNs: if the law requires another standard of care.
 Thus, Art. 1733 of the Civil Code provides that common carriers, from the nature of their business and for reasons
of public policy, are bound to observe extraordinary diligence in the vigilance over the goods, and for the safety
of the passengers transported by them, according to all of the circumstances of each case.
 The second is if the parties stipulate another standard of care. Thus, the parties may agree that the standard
to be followed by the debtor in taking care of the thing pending its delivery or in the delivery itself shall be either
extraordinary care or slight care.

(3) To deliver all accessions and accessories of the thing, even though they may not have been mentioned.
The term “accessions’’ signifies all of those things which are produced by the thing which is the object of the obligation
as well as all of those which are naturally or artificially attached thereto.
 Accessions comprehend all of the different kinds of accessions which are defined and regulated by the provisions
of Art. 441 to Art. 475 of the Civil Code, such as accesión discreta (natural, industrial and civil fruits) as well as
accesión industrial (building, planting and sowing), accesión natural (alluvion, avulsion, abandoned river beds,
and islands formed in non-navigable or non-floatable rivers) and accession with respect to movable property
(adjunction or conjunction, confusion or commixtion, and specification).
“Accessories,’’ on the other hand, must be understood in its current and popular sense.
It signifies all of those things which have for their object the embellishment, use or preservation of another thing which is
more important and to which they are not incorporated or attached. In other words, it includes all of those things which
are necessary or convenient for the perfection of another thing, such as the equipment of a factory, the spare parts
and tools of a machine, the key of a house, and others of a similar nature.

(4) To be liable for damages in case of breach of the obligation by reason of delay, fraud, negligence or
contravention of the tenor thereof.
This obligation is expressly imposed upon the debtor by the provision of Art. 1170 of the Code. It must be noted, however,
that this liability does not arise if the breach is due to a fortuitous event (Article 1174). In other words, such liability extends
only to a breach which is voluntary in character, and not to one which is involuntary.

Obligations of DEBTOR in generic obligations. — If the obligation to give is innominate or generic, the obligations of
the debtor are as follows:

(1) To deliver a thing which is NEITHER of superior nor inferior quality.

(2) To be liable for damages in case of breach of the obligation by reason of delay, fraud, negligence or contravention of
the tenor thereof.
 This liability includes the obligation to reimburse all expenses incurred by the creditor in those cases where the
latter avails himself of the right to ask a third person to perform the obligation at the expense of the
debtor.

It must be noted, however, that the doctrine enunciated in Art. 1174 of the Code, by virtue of which the obligation is
extinguished in case the object thereof is lost or destroyed through a fortuitous event, is not applicable to this type of
obligation.

Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost. The 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.

Obligations To Do; Effects of Breach. — In obligation to do (positive personal obligations), if the obligor fails to do that
which he has obligated himself to do,

a) the oblige/creditor can have the obligation performed or executed at the expense of the former, and
 Unlike obligations to give, in obligations to do the obligee does not possess the power to compel the obligor to
comply with his obligation. (By reason of the prohibition for involuntary servitude or may arise to Coercion
punishable by RPC)

b) Done in a poor manner or in contravention of the tenor of the obligation

 Creditor has the right for the undoing of what has been done (if it is possible) at the expense of the debtor

c) In case of non-performance, the creditor may demand for damages by reason of the breach.
 The creditor can avail of the performance from a third person, at the expense of the debtor
 It must be observed, however, that the right of the obligee to have the prestation executed at the expense of
the obligor cannot be availed of when such prestation consists of an act where the personal and special
qualification of the obligor is the principal motive for the establishment of the obligation, as for instance,
the talent and prestige of an artist.
 In such case, there is no other remedy of the obligee except to proceed against the obligor for damages under
Art. 1170 of the Code.

Art. 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.
Obligations Not To Do; Effects of Breach. — In obligations not to do (negative personal obligations), the object of the
obligation s fulfilled or realized so long as that which is forbidden is not done by the obligor.

If the obligor does what has been forbidden him, two remedies are available to the obligee —
 to have it undone at the expense of the obligor in accordance with Art. 1168 and
 to ask for damages in accordance with Art. 1170.

Thus, if the obligor obligated himself not to construct his house beyond a certain height in order not to obstruct the view
from the house of the obligee, and subsequently, he adds another story beyond the stipulated height, the obligee has the
right to demand for the demolition of the additional storey at the expense of the obligor. In addition, he can also demand
indemnity for damages.

BREACH OF OBLIGATIONS. — In general, the breach of an obligation may be either voluntary or involuntary.

It is voluntary if the debtor or obligor in the performance of his obligation is guilty of default (mora), or fraud (dolo), or
negligence (culpa), or in any manner contravenes the tenor thereof.

It is involuntary if he is unable to comply with his obligation because of an event which cannot be foreseen, or which,
though foreseen, was inevitable (1174).
 In the first he is liable for damages, in the second he is not.

Voluntary Breach Through Default or Mora. — The first kind of voluntary breach of an obligation regulated by the
Civil Code is that which takes place by reason of default or mora.

Default or mora signifies the idea of delay in the fulfillment of an obligation with respect to time.

There are three kinds of default or mora.

They are:
(1) Mora solvendi or the delay of the obligor or debtor to perform his obligation. This delay is called mora solvendi
ex re when the obligation is an obligation to give or mora solvendi ex persona when the obligation is an obligation to do.
(2) Mora accipiendi or the delay of the obligee or creditor to accept the delivery of the thing which is the object of
the obligation.
(3) Compensatio morae or the delay of the parties or obligors in reciprocal obligations.

There are three requisites which should be present in order that the obligor or debtor may be considered in default.
They are:
(1) The obligation is demandable and already liquidated;
(2) The obligor or debtor delays performance; and
(3) The creditor requires the performance judicially or extrajudicially. (Aerospace Chemical Industries, Inc. vs. CA, 315
SCRA 94.)

Why demand is important?  in order that delay may exist

DELAY – non-fulfillment of the obligation with respect to time, debtor violates the obligation in point of time

Default in positive obligations. — In obligations to give or to do (positive obligations), the obligor or debtor incurs in
delay from the time the obligee or creditor demands from him the fulfillment of the obligation. This demand may be
judicial or extrajudicial. It is judicial if the creditor fi les a complaint against the debtor for the fulfillment of the
obligation; it is extrajudicial if the creditor demands from the debtor the fulfillment of the obligation either orally or in
writing. Whether the demand is judicial or extrajudicial, if the obligor or debtor fails to fulfill or perform his obligation,
he is in mora solvendi, and therefore, liable for damages.

When demand is not necessary. — However, demand by the creditor is not necessary in order that delay may exist in
the following cases: (1) When the obligation or the law expressly so declares. Attention must be called to the fact that
what the law means is that the obligation or the law itself must expressly declare that the demand is not necessary in
order that the debtor shall incur in delay.

In order that the exception stated in No. 1 of the second paragraph of Art. 1169 shall apply, it is indispensable that the
obligation itself must expressly declare that “demand is not necessary in order that D shall incur in delay” or that “D shall
incur in delay if he does not pay the obligation upon the arrival of the designated date for payment.’’ (Express stipulation
in the obligation)

(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 motive for the establishment of the contract.55
The basis of this exception is the fact that the designation of the time is of such fundamental importance in the fulfi
llment of the obligation that it would be logical to assume that the intention of the parties was to make fulfi llment of
the obligation upon the arrival of such designated time an essential part of the contract. In other words, the time
element for the fulfi llment of the obligation is of the essence of the contract. Therefore, it must be established that the
designation of the time when the obligation shall be fulfi lled was a controlling motive for the execution of the contract.
This can be inferred from the nature and circumstances of the obligation.

Thus, where in the contract of sale entered into between plaintiff and defendant there is a stipulation that the
machinery which is the object of the sale was already on the way from the United States to Manila, but it is established
that it was actually shipped several days after the execution of the contract and, as a consequence, plaintiff was unable
to deliver it within a reasonably short time to the defendant, it was held that the plaintiff has already incurred in delay
since, undoubtedly, the representation that such machinery was already on the way was one of the determining
elements of the contract. Consequently, the subsequent refusal of the defendant to accept the delivery is justifi ed.

(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.

Default in negative obligations. — The obligor can not possibly incur in delay in negative obligations (not to do).
According to Manresa, these obligations have a peculiarity of their own which the law does not show but which is
evident from their special nature. Fulfi llment and violation are possible, but not default or mora. This peculiarity is what
differentiates this class of obligations from positive obligations (to give and to do).

Default in reciprocal obligations. — Reciprocal obligations are those which are created or established at the same time,
out of the same cause, and which result in mutual relationships of creditor and debtor between the parties. These
obligations are conditional in the sense that fulfi llment of an obligation by one party depends upon the fulfi llment of
the obligation by the other.

The rule then is that in reciprocal obligations, one party incurs in delay from the moment the other party fulfi lls his
obligation, while he himself does not comply or is not ready to comply in a proper manner with what is incumbent upon
him. If neither party complies or is ready to comply with what is incumbent upon him, the default of one compensates
for the default of the other. In such case, there can be no legal delay.

Effect of default. — Once the obligor or debtor has incurred in delay, he can be held liable by the obligee or creditor for
damages. This liability subsists even if the thing which constitutes the object of the obligation may have been lost or
destroyed through a fortuitous event.

If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages,
there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of
stipulation, the legal interest. Interest due shall earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point.
Voluntary Breach Through Fraud or Dolo. — The second kind of voluntary breach of an obligation regulated by the Civil
Code is that which takes place by reason of fraud or dolo.

Civil fraud, in turn, may be classified into the following:

first, the fraud or dolo in the performance of an obligation; and

second, the fraud or dolo in the constitution or establishment of an obligation.

The two may be distinguished from each other as follows:

(1) The first is present only during the performance of a preexisting obligation, while the second is present only at the
time of the birth of the obligation.

(2) The first is employed for the purpose of evading the normal fulfi llment of an obligation, while the second is
employed for the purpose of securing the consent of the other party to enter into the contract.

(3) The first results in the nonfulfillment or breach of the obligation, while the second, if it is the reason for the other
party upon whom it is employed for entering into the contract, results in the vitiation of his consent.

(4) The first gives rise to a right of the creditor or obligee to recover damages from the debtor or obligor, while the
second gives rise to a right of the innocent party to ask for the annulment of the contract if the fraud is causal or to
recover damages if it is incidental.

Effect of fraud. — If there is a breach or non-fulfillment of the obligation by reason of fraud or dolo on the part of the
obligor or debtor, he can be held liable for damages. As a ground for damages, malice or dishonesty is implied. It cannot
cover cases of mistake and errors of judgment made in good faith.

Voluntary Breach Through Negligence or Culpa. — The third kind of voluntary breach of an obligation regulated by the
Civil Code is that which takes place by reason of the negligence or culpa of the debtor or obligor. It consists in the
omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of
the persons, of the time and of the place. From this defi nition, it is evident that negligence is simply the absence of due
care required by the nature of the obligation. It is a relative or comparative, not an absolute term, and its application
depends upon the situation of the parties and the degree of care and vigilance which the circumstances reasonably
require. Where the danger is great, a high degree of care is necessary, and the failure to observe it is a want of ordinary
care under the circumstances. It is in each case practically a question of fact whether the proper degree of care has been
exercised taking into consideration what a reasonable and prudent man would have done under the circumstances.
Thus, according to the second paragraph of Art. 1173, if the law or contract does not state the diligence which is to be
observed in the performance of the obligation, that which is expected of a good father of a family shall be required.
Hence, the law has adopted the standard supposed to be supplied by the imaginary conduct of the discreet pater
familias of the Roman Law.

Art. 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.

Concept of Fortuitous Event. — According to the above article, fortuitous event may be defi ned as an event which could
not be foreseen, or which, though foreseen, was inevitable. It is