1167

a) Debtor’s failure to perform an obligation

 creditor may do the obligation, or by another, at

the expense of the debtor;

 recover damages

b) Performance was contrary to the terms agreed upon

 order of the court to undo the same at the expense of the debtor

c) Performance in a poor manner

 order of the court to undo the same at the expense of the debtor

1168 (negative personal obligation) – not to do

1169 – legal delay (demand) – demand isn’t necessary under following situation.

ORDINARY DELAY – mere failure to perform an obligation at the appointed time.

LEGAL DELAY (DEFAULT) – tantamount to non-fulfillment of the obligation and arises after an
extrajudicial or judicial demand was made upon the debtor.

 When the law or obligation so expressly declares;

 When from the nature of the contract, time us the

essence and motivating factor for its establishment;

 When demand would be useless (prestation is impossible);

 In reciprocal obligations, from the moment one of the parties fulfills his obligation;

 When the debtor admits he is in default

Di nabayaran in exact day – the person is not in delay in the absence of legal demand.

He is in delay but not in legal demand – necessary and demand because without it premature ang delay.

KINDS OF DEFAULT :

a) MORA SOLVENDI – delay on the part

of the debtor to fulfill his obligation;

REQUISITES:

1. failure of the obligor to perform obligation on

the DATE agreed upon;

2. demand (j/ej) by the creditor;

3. failure to comply with such demand

EFFECTS:

1) debtor – liable for damages and

interests

2) debtor – liable for the loss of a thing

due to a fortuitous event

KINDS:

1) mora solvendi ex re – default in real obligations (to give)

2) mora solvendi ex persona – default in personal obligations (to do)

b) MORA ACCIPIENDI – delay on the part of the creditor to accept the

performance of the obligation;

Effects:

1. creditor – liable for damages

2. creditor – bears the risk of loss of the thing

3. debtor – not liable for interest from the time of creditor’s delay

4. debtor – release himself from the obligation

c) COMPENSATIO MORAE – delay of the obligors in reciprocal obligation.

Effect: the default of one compensates the default of the other; their respective liabilities shall be offset
equitable.

 Default / Delay in negative obligation is not possible. (In negative obligation, only fulfillment and
violation are possible)
Consignation – consign the thing with the court.

1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay,

and those who in any manner contravene the tenor thereof, are liable for damages.

FRAUD (dolo) – deliberate intentional evasion of the faithful fulfillment of an obligation;

NEGLIGENCE (culpa or fault) – voluntary act or omission of diligence, there being no malice, which
prevents the normal fulfillment of an obligation;

DELAY (mora) – default or tardiness in the performance of an obligation after it has been due and
demandable;

CONTRAVENTION OF TERMS OF OBLIGATION (violatio)– violation of terms and conditions stipulated in

the obligation; this must not be due to a fortuitous event.

CASE: Chavez vs Fr

1171. Responsibility arising from fraud is demandable

in all obligations. Any waiver of an action for future fraud is void.

 To allow such waiver will necessarily render the obligatory force of contracts illusory.

 The law does not prohibit waiver of an action for damages based on fraud already committed.

 Any deliberate deviation from the normal way of fulfilling the obligation may be a proper basis for
claim for damages against the guilty party.

INCIDENTAL FRAUD – committed in the performance of an obligation already existing because of a

contract. Remedy- damages under 1170

CAUSAL FRAUD – employed in the execution of contract in order to secure consent; remedy is
annulment because of vitiation of consent.

1172. Responsibility arising from negligence in the performance of every kind of obligation is also

demandable, but such liability may be regulated by the courts, according to circumstances.

Court’s discretion because:

(a) negligence depends upon the circumstances of a case – good or bad

faith of the obligor may be considered as well as the conduct or misconduct of the obligee;

(b) it is not as serious as fraud.

Negligence – lack of foresight or knowledge

Imprudence – lack of skill or precaution

TEST OF NEGLIGENCE

Did the defendant, in doing the alleged negligent act, use the reasonable care and caution which an
ordinary prudent man would have used in the same situation?

Caloscoso case

Vicarious liability

1173. The fault or negligence of the obligor 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 he time and of
the place… If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected if a good father of a family shall be required.

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.

FORTUITOUS EVENT – an occurrence or happening which

could not be foreseen or even if foreseen, is inevitable;

absolutely independent of human intervention; act of God.

FORCE MAJEURE - an event caused by the legitimate or

illegitimate acts of persons other than the obligor; there is

human intervention.

 conditions which exempt obligor from liability:

1. event is independent of the will of obligor

2. it must either be unforeseeable or unavoidable

3. occurrence must render it impossible for the debtor

to fulfill the obligation in a normal matter

4. the obligor is free of partiipation in injury to creditor.

REQUISITES OF FORTUITOUS EVENT:

1. Independent of the human will (or at least of the

obligor’s)

2. Unforeseen or unavoidable

3. Of such character as to render it impossible for

the obligor to comply with his obligation in a

normal manner

4. Obligor – free from any participation/aggravation of the injury to the obligee (no negligence or
imprudence)

EXEPTIONS:

1. When it is expressly stipulated that he shall be liable

even if non-performance of the obligation is due to

fortuitous events;

2. When the nature of the obligation requires the

assumption of risk;

3. When the obligor is in delay;

4. When the obligor has promised the same thing to

two or more persons who do not have the same

interest;

5. When the possessor is in bad faith and the thing lost

or deteriorated due to fortuitous event;

6. When the obligor contributed to the loss of the thing.

Case: AB Corp vs -2008 Bar Question.

1175. Usurious transactions shall be governed by special laws.

USURY – contracting for or receiving interest in excess of the amount allowed by law for the loan or use
of money, goods, etc.

SIMPLE LOAN – one of the parties delivers to another, money

or other consumable thing upon the condition that the same

amount of the same kind and quality shall be paid.

USURY LAW – makes the usurers criminally liable if the interest charged on loans are more that the limit
prescribed by law.

 This law is repealed – Circular No. 905 of the Central

Bank has expressly removed the interest ceilings

prescribed by the USURY LAW.

1176. The receipt of the principal by the creditor without reservation with respect to the interest, shall
give rise to the presumption that said interest has been paid.

The receipt of a later installment of a debt without reservation as to prior installments, shall likewise
raise the presumption that such installments have been paid.

 These are mere presumptions.

 To be sure – write the interest and the dates covered by such payment in the receipt.

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.
REMEDIES AVAILABLE TO CREDITORS FOR THE

SATISFACTION OF THEIR CLAIMS:

1. Exact fulfillment with right to damages

2. Exhaustion of the debtor’s properties still in his possession – writ of attachment (before judgment) or
writ of execution (for final judgment not yet executed)

3. ACCION SUBROGATORIA – an action where the creditor whose claims had not been fully satisfied, may
go after the debtors (3rd person) of the defendant debtor.

4. ACCION PAULIANA – an action where the creditor files an action in court for the RESCISSION of acts or
contracts entered into by the debtor designed to defraud the former.

1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has been
no stipulation to the contrary.

EXCEPTIONS:

a) Those not transmissible by their nature like purely personal rights;

b) Those not transmissible by provision of law;

c) Those not transmissible by stipulation of parties