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  1. 1. CONTRACTSattyjdc
  2. 2. Art. 1163. Every person obliged to give something is also obliged totake care of it with the proper diligence of a good father of a family,unless the law or the stipulation of the parties requires anotherstandard of care.DILIGENCEEx. Malcolm ordered a ten-year old boy to climb a high and slipperytree, with a promise to give the boy a part of the fruits. The boy fell anddied while climbing. Malcolm was liable for his act was a cleardeparture from the standard of conduct required of a prudent man.Ex. During the war, a bishop was entrusted charity funds. Hedeposited such money to his personal account in the bank. He becamea political prisoner, and his money in the bank, including the charityfunds, was sequestered. Is he liable for the loss of said funds?attyjdc
  3. 3. DELIVERYArt. 1164. The creditor has a right to the fruits of the thing from thetime the obligation to deliver it arises. However, he shall acquireno real right over it until the same has been delivered to him.Personal Right (Jus in Personam):Power demandable by one person of another, such as to give, todo or not to do.Real Right (Jus in Re):Power over a specific thing and is binding on the whole world.Ex. Deathstroke is obliged to give to Yao Fei a parcel of land on June 17,2012. However, Deathstroke gave the Certificate of Title to Yao Fei on July 1,2012. How do you apply the provision to the sample situation?attyjdc
  4. 4. “Non nudis pactis, sed traditionis dominia rerym transferantur.”As a consequence of certain contracts, it is not agreement but traditionor delivery that transfers ownership. (See Art. 712, NCC)DELIVERYWhen does the obligation to deliver arise?If there is a term or condition,Then from the moment the term arrives or the condition happens.If there is no term or condition,Then from the perfection of the contract.When is ownership acquired?attyjdc
  5. 5. Actual DeliveryKinds of DeliveryThe subject matter is physically handed over tocreditor by debtor .Ex. Huntress bought a pair of boots from China White.The boots will be owned by Huntress only when ChinaWhite gives it to her.attyjdc
  6. 6. Constructive DeliveryKinds of DeliveryThe transfer of the object is physically implied.(a) Traditio simbolica (symbolical tradition)(b) Traditio longa manu (delivery by mere consent or pointingout of the object)Handing of keys to the house won in a tv program.Pointing a puppy in a litter.attyjdc
  7. 7. Constructive Delivery(c) Traditio brevi manu (delivery by short hand; where thepossessor buys the object he possesses to make him the owner )Rent-to-own houses(d) Traditio constitutom possessorium (opposite of brevi manu;owner becomes mere possessor)Previous owner of a house who becomes its lessee.(e) Tradition by execution of legal forms and solemnitiesExecution of a public instrument selling land.attyjdc
  8. 8. Art. 1165. When what is to be delivered is a determinatething, the creditor, in addition to the right granted him byArticle 1170, may compel the debtor to make the delivery.If the thing is indeterminate or generic, he may ask that theobligation be complied with at the expense of the debtor.If the obligor delays, or has promised to deliver the samething to two or more persons who do not have the sameinterest, he shall be responsible for any fortuitous eventuntil he has effected the delivery.Delivery of Specific or Generic Thingattyjdc
  9. 9.  Specific/Determinate Thing: capable of particulardesignation. Generic/Indeterminate Thing: refers to a class, genusand cannot be pointed out with particularity.Delivery of Specific or Generic ThingREMEDIES OF THE CREDITOR(1)Demand for specific performance.(2)Demand rescission or cancellation.(3)Demand damages.attyjdc
  10. 10. Art. 1166. The obligation to give a determinate thingincludes that of delivering all its accessions andaccessories, even though they may not have beenmentioned.Delivery of accessions and accessoriesACCESSORIES:Those joined to or included with the principal for the latter’s betteruse, perfection or enjoyment.ACCESSIONS:Additions to or improvements upon a thing.attyjdc
  11. 11. Art. 1167. If a person obliged to do something fails to do it, the sameshall be executed at his cost.This same rule shall be observed if he does it in contravention ofthe tenor of the obligation. Furthermore, it may be decreed that whathas been poorly done be undone.The remedy of the creditor when the debtor fails anobligation to do is to have the obligation fulfilled at theexpense of the debtor and obtain damages.Why cannot the creditor demand for the specific performanceof the debtor when the latter failed to do his obligation?attyjdc
  12. 12. Art. 1168. When the obligation consists in not doing, and the obligordoes what has been forbidden him, it shall also be undone at hisexpense.Instances when a thing may be ordered undone:(a) If made poorly. (Art. 1167, NCC)(b) If it is a negative personal obligation, and undoing possible.(Art. 1168, NCC)attyjdc
  13. 13. Art. 1169. Those obliged to deliver or to do somethingincur in delay from the time the obligee judicially orextrajudicially demands from them the fulfillment oftheir obligation.Art. 1169 - DEFAULTAs a general rule, DEMAND is necessary to put the debtorin default.Thus, demand letter is a requisite before going into courts.Ordinary Delay vs. Legal Delay (Default)Non-performance on time Virtual nonfulfillmentattyjdc
  14. 14. However, the demand by the creditor shall not benecessary in order that delay may exist:(1) When the obligation or the law expressly sodeclares; orEx. The government does not have to issue a demand for itsnationals to pay their taxes on time.Ex. The contract stipulates that the obligor shall pay the obligee acertain amount every fifth of the month, without need of demand.Art. 1169 - DEFAULTattyjdc
  15. 15. (2) When from the nature and the circumstances ofthe obligation it appears that the designation of thetime when the thing is to be delivered or the service isto be rendered was a controlling motive for theestablishment of the contract; orTime is of the essence.Ex. Delivery of perishable goods such as fruits and vegetables.Art. 1169 - DEFAULTattyjdc
  16. 16. (3) When demand would be useless, as when theobligor has rendered it beyond his power to perform.In reciprocal obligations, neither party incurs indelay if the other does not comply or is not ready tocomply in a proper manner with what is incumbentupon him. From the moment one of the parties fulfillshis obligation, delay by the other begins.Ex. When the obligor transfers ownership to a third party the thingto be delivered to the obligee.Art. 1169 - DEFAULTattyjdc
  17. 17. Kinds of Default(A) Mora Solvendi: default on the part of the debtor(1) Mora solvendi ex re:(2) Mora solvendi ex persona:default in real obligationsdefault in personal obligationsThere is no mora solvendi in negative obligation.There is no mora solvendi in natural obligation.WHY???attyjdc
  18. 18. Mora SolvendiRequisites:(a) The obligation must be due, enforceable, andalready liquidated or determinate in amount.(b) The debtor failed to perform his obligation.(c) The creditor has made a demand, when it isnecessary.(d) Demand must be for the obligation that isdue, and not for another obligation, nor one witha bigger amount.attyjdc
  19. 19. Mora SolvendiEffects:(1) The debtor shall be liable for interest or damages,if his default is through his own fault or negligence.(2) The debtor shall bear the risk of loss , if hisdefault is through his own fault or negligence.(3) The debtor shall be liable even for a fortuitousevent. It could be mitigated if he proves that losswould have still occurred even if he was not indefault.attyjdc
  20. 20. Kinds of Default(B) Mora Accipiendi: default on the part of the creditorFulfillment of the obligation cannot be made because the creditorunjustifiably refuses to accept performance.When can the creditor justifiably refuse performance?(C) Compensatio Mora: default on both parties- Must be reciprocal obligation- As if neither party is in defaultattyjdc
  21. 21. Read Art. Nos. 1170 to 1178, NCCRead the following cases: Guanio vs. Makati Shangri-la Hotel and Resort Inc., G.R.No. 190601, February 7, 2011 (Art. 1170, NCC) Asset Privatization Trust vs. T.J. Enterprises, G.R. No.167195, May 8, 2009, (Art. 1170 and 1174, NCC) RCBC vs. Buenaventura, G.R. No. 176479, October 6,2010 (Art. 1176, NCC)Assignmentattyjdc