This document discusses various provisions related to contracts and obligations under Philippine law. It begins by explaining the standard of care required to fulfill obligations (diligence of a good father of a family) and discusses examples of liability. It then addresses the rights of creditors prior to delivery of goods, distinguishing personal and real rights. Different types of delivery are outlined, including actual, constructive, and delivery of accessions/accessories. Remedies for failed obligations are discussed, noting that specific performance is not available and the obligation must be fulfilled at the debtor's expense. The document concludes by covering default, including when it arises and its effects on risk and liability.

1. CONTRACTS
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2. 
Art. 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.
DILIGENCE
Ex. Malcolm ordered a ten-year old boy to climb a high and slippery
tree, with a promise to give the boy a part of the fruits. The boy fell and
died while climbing. Malcolm was liable for his act was a clear
departure from the standard of conduct required of a prudent man.
Ex. During the war, a bishop was entrusted charity funds. He
deposited such money to his personal account in the bank. He became
a political prisoner, and his money in the bank, including the charity
funds, was sequestered. Is he liable for the loss of said funds?
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3. 
DELIVERY
Art. 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 (Jus in Personam):
Power demandable by one person of another, such as to give, to
do 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?
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4. “Non nudis pactis, sed traditionis dominia rerym transferantur.”
As a consequence of certain contracts, it is not agreement but tradition
or delivery that transfers ownership. (See Art. 712, NCC)
DELIVERY
When 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?
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5. 
Actual Delivery
Kinds of Delivery
The subject matter is physically handed over to
creditor by debtor .
Ex. Huntress bought a pair of boots from China White.
The boots will be owned by Huntress only when China
White gives it to her.
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6. 
Constructive Delivery
Kinds of Delivery
The transfer of the object is physically implied.
(a) Traditio simbolica (symbolical tradition)
(b) Traditio longa manu (delivery by mere consent or pointing
out of the object)
Handing of keys to the house won in a tv program.
Pointing a puppy in a litter.
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7. 
Constructive Delivery
(c) Traditio brevi manu (delivery by short hand; where the
possessor 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 solemnities
Execution of a public instrument selling land.
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8. 
Art. 1165. When what is to be delivered is a determinate
thing, the creditor, in addition to the right granted him by
Article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the
obligation be complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same
thing to two or more persons who do not have the same
interest, he shall be responsible for any fortuitous event
until he has effected the delivery.
Delivery of Specific or Generic Thing
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9. 
 Specific/Determinate Thing: capable of particular
designation.
 Generic/Indeterminate Thing: refers to a class, genus
and cannot be pointed out with particularity.
Delivery of Specific or Generic Thing
REMEDIES OF THE CREDITOR
(1)Demand for specific performance.
(2)Demand rescission or cancellation.
(3)Demand damages.
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10. 
Art. 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.
Delivery of accessions and accessories
ACCESSORIES:
Those joined to or included with the principal for the latter’s better
use, perfection or enjoyment.
ACCESSIONS:
Additions to or improvements upon a thing.
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11. 
Art. 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.
The remedy of the creditor when the debtor fails an
obligation to do is to have the obligation fulfilled at the
expense of the debtor and obtain damages.
Why cannot the creditor demand for the specific performance
of the debtor when the latter failed to do his obligation?
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12. 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.
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)
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13. Art. 1169. Those obliged to deliver or to do something
incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of
their obligation.
Art. 1169 - DEFAULT
As a general rule, DEMAND is necessary to put the debtor
in default.
Thus, demand letter is a requisite before going into courts.
Ordinary Delay vs. Legal Delay (Default)
Non-performance on time Virtual nonfulfillment
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14. 
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
Ex. The government does not have to issue a demand for its
nationals to pay their taxes on time.
Ex. The contract stipulates that the obligor shall pay the obligee a
certain amount every fifth of the month, without need of demand.
Art. 1169 - DEFAULT
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15. 
(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; or
Time is of the essence.
Ex. Delivery of perishable goods such as fruits and vegetables.
Art. 1169 - DEFAULT
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16. 
(3) When demand would be useless, as when the
obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in
delay if the other does not comply or is not ready to
comply in a proper manner with what is incumbent
upon him. From the moment one of the parties fulfills
his obligation, delay by the other begins.
Ex. When the obligor transfers ownership to a third party the thing
to be delivered to the obligee.
Art. 1169 - DEFAULT
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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 obligations
default in personal obligations
There is no mora solvendi in negative obligation.
There is no mora solvendi in natural obligation.
WHY???
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18. 
Mora Solvendi
Requisites:
(a) The obligation must be due, enforceable, and
already liquidated or determinate in amount.
(b) The debtor failed to perform his obligation.
(c) The creditor has made a demand, when it is
necessary.
(d) Demand must be for the obligation that is
due, and not for another obligation, nor one with
a bigger amount.
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19. 
Mora Solvendi
Effects:
(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 his
default is through his own fault or negligence.
(3) The debtor shall be liable even for a fortuitous
event. It could be mitigated if he proves that loss
would have still occurred even if he was not in
default.
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20. 
Kinds of Default
(B) Mora Accipiendi: default on the part of the creditor
Fulfillment of the obligation cannot be made because the creditor
unjustifiably 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 default
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21. 
Read Art. Nos. 1170 to 1178, NCC
Read 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)
Assignment
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