Republic of the Philippines

Bicol University
COLLEGE OF SOCIAL SCIENCES & PHILOSOPHY
ISO 9001:2008 Political Science Department
TUV Rheinland ID: 100 05 1782 Daraga, Albay

NAME:Aculan, Omar L. DATE: May 20, 2022

BLOCK: AB Political Science – 3B PROFESSOR: Atty. Rochelle Marie Cortez-Naz

1. What do you mean by the principle of substantial compliance?

The principle of substantial compliance is discussed under Art. 1234 of the New Civil Code.
Substantial performance is manifested “when the important or essential parts of the contract has been
performed and only a small or minor part thereof has not been carried out” (De Leon & De Leon, 2021).
The effect is that the obligor or the debtor may recover as if there had been complete or full
performance of the obligation. What is incumbent to them is the damages suffered by the creditor for
what has not been fulfilled, which shall be deducted from what the debtor may recover. This is because
the obligee or creditor is already benefited since much of the prestation has already been satisfied and
only the minor parts have not been fulfilled. The obligor must be in good faith, which is always
presumed in the absence of proof to the contrary.

2. Serafin obliged himself to sell one thousand (1,000) bags of cement to Bert for a certain
price. However, despite diligent effort on his part, Serafin was able to deliver only nine
hundred fifty bags (950) because of the cement shortage. Serafin wants to comply with his
obligation to deliver the entire obligation but he could not do so for reasons beyond his
control. What is the remedy of Bert?

The case of Serafin and Bert is lodged within Art. 1234 that speaks of substantial performance.
What Bert can do is to deduct the number of cement bags which were not delivered together with its
corresponding value from the total amount to be paid to Serafin and then enforce his right for damages.
The latter part of Art. 1234 talks about what the obligor can recover in case of substantial performance;
that is, less the damages suffered by the obligee for what has not been complied with. It can be
understood that the debtor has satisfied the essential parts or majority of the obligation. In addition,
Serafin acted in good faith; his inability to fully comply with the obligation is out of his control.
Furthermore, Bert cannot ask Serafin to deliver the remaining fifty bags before providing the latter with
the payment as a condition for his liability. Rather, he must pay first the amount corresponding to what
has been delivered by Serafin and then enforce his rights for damages.

3. Ernesto, a forty year-old insane man from Legazpi City transferred the title of his land to
Tomas, his creditor for the satisfaction of his debt. Is the said transfer valid?
 No, the transfer is invalid and thus, can be recovered. Art. 1239 states that “In obligation to give,
payment made by one who does not have the free disposal of the thing due and capacity to alienate it
shall not be valid, without prejudice to the provisions of Article 1427 under the Title on “Natural
Obligations.” The case of Ernesto falls within the second part – capacity to alienate. Capacity to alienate
refers to the inability of the person to enter into contracts and to make disposition of the thing due. An
incapacitated person, hence, cannot give consent and dispose of or distribute any property or thing due
belonging to them. Art. 1327 enumerates those persons incapable of providing consent to a contract: (1)
Unemancipated minors and (2) Insane or demented persons, and deaf-mutes who do not know how to
write. Since Ernesto is not of sound mind or a non-compos mentis, he cannot give consent to a contract,
making the transfer of land title to his creditor invalid. The rationale behind such provision is to protect
such persons from fraud. They are uncapable of understanding the consequences or nature of the
actions partaken in a contract. As for an insane person, the insanity must take place within the time of
contracting for the agreement to be invalid, which is demonstrated in the case above. Therefore,
Ernesto has a right to recover the land title which he transferred to his creditor as satisfaction for his
debt.

4. Nicco owes Hezekiah P100.00 Hezekiah lost the promissory note given by Nicco. Nanay
found the promissory note and demanded payment from Nicco. Nicco refused to pay
Nanay. Is Nicco justified in refusing to pay Nanay? Cite your basis.

Yes, Nicco is justified in refusing to pay Nanay. This is an exception to the rule provided by Art.
1242, stating that “payment made in good faith to any person in possession of the credit shall release
the debtor.” Nanay could be justified in demanding payment if she is in possession of the credit itself.
However, she is merely in possession of an instrument evidencing the credit, the promissory note which
she found. For there to be a satisfaction of the term “possession” as contemplated in Art. 1242, the
person must also possess the credit or the debt and not just the document which proves a credit took
place. Moreover, good faith is essential, in that the debtor believes that he is making a valid payment
and understands that the holder of the instrument is truly the owner of the credit. Here, Nicco has
knowledge that he is indebted to Hezekiah alone, and that Nanay is not a party in the contract.
Therefore, he is in the right for refusing to pay Nanay.