LEGASPI OIL CO. INC.

VS CA (1993)

Answer:

Oseraos is guilty of fraud in the performance of his obligation under the sales contract where under
he bound himself to deliver to petitioner 100 metric tons of copra within twenty (20) days.

In general, fraud may be defined as the voluntary execution of a wrongful act, or a wilfull omission,
knowing and intending the effects which naturally and necessarily arise from such act or omission;
the fraud referred to in Article 1170 of the Civil Code of the Philippines is the deliberate and
intentional evasion of the normal fulfillment of obligation; it is distinguished from negligence
by the presence of deliberate intent, which is lacking in the latter. The conduct of private
respondent clearly manifests his deliberate fraudulent intent to evade his contractual obligation for
the price of copra had in the meantime more than doubled from P82.00 to P168 per 100 kilograms.
Under Article 1170 of the Civil Code of the Philippines, in case of fraud, bad faith, malice, or
wanton attitude, the guilty party is liable for all damages which may be reasonably attributed to
the non performance of the obligation. Pursuant to said article, private respondent is liable for
damages.

Social Security System v. Moonwalk Development & Housing Corporation G.R. No. 73345
(April 7, 1993)

No. Obligation was already extinguished by the payment by Moonwalk of its indebtedness to SSS
and by the latter’s act of cancelling the real estate mortgages executed in its favor by defendant
moonwalk.

What is sought to be recovered in this case is not the 12% interest on the loan but the 12% penalty
for failure to pay on time the amortization. What is sought to be enforced therefore is a penal
clause of the contract entered into between the parties.

Penal clause is an accessory obligation which the parties attach to a principal obligation for the
purpose of insuring the performance thereof by imposing on the debtor a special presentation in
case the obligation is not fulfilled or is irregularly or inadequately fulfilled. Accessory obligation
is dependent for its existence on the existence of a principal obligation. In the present case, the
principal obligation is the loan between the parties. The accessory obligation of a penal clause is
to enforce the main obligation of payment of the loan. If therefore the principal obligation does
not exist the penalty being accessory cannot exist.

PICART vs. SMITH, JR

YES
The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that person would have used in
the same situation? If not, then he is guilty of negligence. The existence of negligence in a given
case is not determined by reference to the personal judgment of the actor in the situation before
him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that. The question as to what would constitute
the conduct of a prudent man in a given situation must of course be always determined in the light
of human experience and in view of the facts involved in the particular case.

Could a prudent man, in the case under consideration, foresee harm as a result of the course
actually pursued? If so, it was the duty of the actor to take precautions to guard against that harm.
Reasonable foresight of harm, followed by ignoring of the suggestion born of this prevision, is
always necessary before negligence can be held to exist. Stated in these terms, the proper criterion
for determining the existence of negligence in a given case is this: Conduct is said to be negligent
when a prudent man in the position of the tortfeasor would have foreseen that an effect harmful to
another was sufficiently probable to warrant his foregoing conduct or guarding against its
consequences.

Applying this test to the conduct of the defendant in the present case we think that negligence is
clearly established. A prudent man, placed in the position of the defendant, would in our opinion,
have recognized that the course which he was pursuing was fraught with risk, and would therefore
have foreseen harm to the horse and the rider as reasonable consequence of that course. Under
these circumstances the law imposed on the Smith the duty to guard against the threatened harm.

It goes without saying that the plaintiff himself was not free from fault, for he was guilty of
antecedent negligence in planting himself on the wrong side of the road. But as we have already
stated, Smith was also negligent; and in such case the problem always is to discover which agent
is immediately and directly responsible. It will be noted that the negligent acts of the two parties
were not contemporaneous, since the negligence of the defendant succeeded the negligence of the
plaintiff by an appreciable interval. Under these circumstances the law is that the person who has
the last fair chance to avoid the impending harm and fails to do so is chargeable with the
consequences, without reference to the prior negligence of the other party.

1. Peter
Ans.

No. the obligation is not extinguished. There is no obligation at all to comply with. Under
Art. 1459 of the Civil Code states that: The thing must be licit.. The word licit means
lawful, i.e., within the commerce of man. If the object of the sale is illicit, the contract is
null and void (Art. 1409), and cannot, therefore, be ratified. Therefore, the sale of cocaine
between Peter and John is null and void for a reason that cocaine is an illicit per se. it is not
within the commerce of men.
2. Adam
Ans.

Yes, the obligation is extinguished through confusion or merger of rights. Under the civil
code Merger which takes place in the person of the principal debtor or creditor benefits the
guarantors. Confusion which takes place in the person of any of the latter does not
extinguish the obligation. In the facts presented, adam owes himself. This is a clear case
of merger and hence, the obligation is extinguished.