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1. Fraud
2. Negligence
3. Delay
4. Contravention of the tenor of the obligation.
(Art. 1170.)
Damages
1. Concept, distinguished from injury
1. Concept
Fraud is the deliberate or intentional evasion'
by the debtor of the normal compliance of his
obligation. Under Art.1170, this actually refers
to the fraud committed by the debtor at the
time of the performance of his obligation.
Kinds of fraud in general
a. According to meaning
1) Fraud in obtaining consent
a) Causal fraud or dolo causante - This refers to fraud
without which consent would not have been given. It
renders the contract voidable.
Example: B bought a ring from S who told. him that the ring
was embellished with diamond. However, S knew all alorig
that the embellishment was not diamond but ordinary glass.
B here gave his consent because of the fraud employed by
S, hence, the contract is voidable.
b) Incidental fraud or dolo incidente - This refers to
fraud without which consent would have still been given
but the person giving it would have agreed on different
terms. The contract is valid but the party employing it
shall be liable for damages.
Example: C hired D to teach in the school of C. D placed
in his application that he had earned units in MBA.
However, D had actually dropped the subjects for the
said units. If C would have hired D even if D did not
complete the said units but that he would have given
a lower salary to D, the fraud committed by D was only
incidental but it would entitle C to recover damages.
2) Fraud in the performance of the
obligation
This is the deliberate act of evading fulfillment of
an obligation in a normal manner. This presupposes an
existing obligation; hence, the fraud has -no effect on
the validity of the contract since it was employed
after perfection. However, the party employing it shall
be liable for damages. (Art. 1170)
Example: B ordered 10 bags of powder soap from S who
agreed to deliver the same after 2 days. On due date, S
delivered 10 bags of powder soap which he mixed with
chalk. This is fraud in the performance of an obligation
which entitles B to recover damages. The fraud,
however, does not have any effect on the validity
of the contract.
b. According to time of commission
1) Future fraud
A waiver of an action for future fraud cannot be
made. If there is an agreement for its waiver, the
same is void. (Art. 1171)' Thus, the debtor will
still be liable for damages if he commits fraud
in the performance of his obligation despite
the waiver.
2) Past fraud
A waiver of an action for past fraud may be made,
since the commission of fraud can no longer be
encouraged. Such waiver is an act of liberality on
the part of the creditor.
Negligence
1. Concept
It is the omission of that diligence which is required by
the nature of the obligation and corresponds with the
circumstances of the person, of the time, and of the
place. (Art. 1173). It is the failure to observe, for the
protection of the interest of another person, that
degree of care, precaution and vigilance which the
circumstances justly demand, whereby such other
person suffers injury. (National Power Corporation
vs. Heirs of Noble Casionan, supra; Guillang vs.
Bedania, G.R. No. 1629a7, May 21, 2009) .
The test of negligence is whether the defendant in doing
the alleged negligent act used that reasonable care and
caution which an ordinary person would have used in the
same situation. (GuiJlangvs. Bedania, supra)
The passenger of the bus may bring a court action not only
for culpa contractual against the bus owner, but also one for
culpa criminal against the bus driver for physical injuries
through reckless imprudence. In the same way, the pedestrian
may bring not only a suit for culpa aquiliana against the
driver and the owner, but also one for culpa criminal against
the bus driver for physical injuries through reckless
imprudence.
Delay or default or mora
Concept
Delay or default or mote is the 'non-fulfillment of an obligation with
respect to time.
Kinds
a. Mora solvendi - Delay on the part of the debtor.
1) Ex re - Delay in real obligations (obligations to give)..
2) Ex persona - Delay in personal obligations (obligations to
do).
b. Mora accipiendi - Delay on the part of the creditor.
This exists when the creditor refuses to accept the thing due without
justifiable reason.
c. Compensatio morae - Delay in reciprocal obligations, Le., both
parties are in default. Here, it is as if there is no delay.
When debtor incurs in delay in
obligations to give or to do, requisites:
General rule: The debtor incurs in delay from the time
the creditor demands fulfillment of the obligation but the
debtor fails to comply with such demand (no demand,
no delay, as a rule). The following are the requisites
of delay:
a. The debtor does not perform his obligation on the date
it is due.
b. The creditor demands the performance of the
obligation. c. The debtor does not comply with the
creditor's demand.
Example:
D owes C P5,OOO.OO. The obligation is due
on May 15. If D does not pay on May 15, he
is not yet in delay. But if C makes a
demand on him to pay on that date or
thereafter and D does not comply, then D
will be in delay.
Exceptions, i.e., delay will exist even
without demand in the following cases (Art.
1169):
1. Concept
Fortuitous events are those events that could not be .
foreseen, or which, though foreseen, are inevitable. (Art.
1174).
It is not enough that the event should not been foreseen or
anticipated, but it must be one impossible to foresee or
avoid. (Sicam vs. Jorge, GR. No. 159617, August 8, 2007)
b. If the ring and the bracelet are lost through a fortuitous event
or through D's fault, the obligation is converted into a simple
obligation to deliver the wristwatch. There is no liability for
damages on the part of D even if the loss is due to his fault
because he can s!ill perform his obligation. It was as if D chose to
deliver the wristwatch.
f. If the ring and the bracelet are lost through D's fault,
the obligation becomes a simple obligation to deliver
the wristwatch. If the wristwatch is thereafter lost
When right of choice is expressly granted to
the creditor (Art. 1205)
When right of choice is expressly granted to the creditor
(Art.1205)
a. If only one or some are lost through a fortuitous event, the
debtor shall deliver that which the creditor should choose among
the remainder, or that which remains if only one subsists.
b. If all are lost through a fortuitous event, the obligation shall be
extinguished.
c. If only one or some are lost through the debtor's fault, the
creditor may claim any of those subsisting, or the price of those
which were lost through the debtor's fault plus damages.
d. If all are lost through the debtor's fault, the creditor may claim
the price of any of them plus damages.
Examples:
d. If the ring and the bracelet are lost due to D's fault, the obligation
does not become a simple obligation to deliver the wristwatch. C can
still choose from the payment of the price of the ring or the bracelet
with damages, or the delivery of the wristwatch.
e. If all are lost due to the fault of D. C may claim the price of any of
them plus damages.
Facultative obligation, concept
b. Substitute
The loss of the substitute whether through a fortuitous event or
through the debtor's fault imposes no additional obligation on the
debtor because it is not yet due. The debtor has still to deliver the
principal thing.
2. After substitution
a. Principal thing
The loss of the principal thing whether through a fortuitous
event or through the debtor's fault imposes no additional
obligation on the debtor because the thing due is already
the substitute. After the substitution has been
communicated, the thing due is the substitute. The
obligation also ceases to be a facultative obligation and
becomes a simple obligation.
b. Substitute
1) If lost through a fortuitous event, the obligation is
extinguished.
2) If lost through the debtor's fault, the debtor shall pay
damages.
Alternative obligation and facultative
obligation, distinguished
Alternative obligation Facultative obligation
1. Several prestations are 1. Only one prestation, the
due, but the performance principal obligation, is due.
of one is sufficient to
extinguish the debt.
2. If there are void prestations, 2. If the principal obligation is void,
the others may still be valid, the debtor is not required to give
hence, the obligation remains the substitute.
Exceptions, i.e., aside from the penalty, damages and interest may also be
demanded:
1. When there IS a stipulation to that effect.
A stipulation for the payment of interest and penalty apart from interest in case
of delay is not contrary to law, morals, good customs or public policy. (Nicolas vs.
Oel-Nacia Corporation, G. R. No 158026, April 23, 2008) For as long as the amounts
stipulated are not exorbitant, not unconscionable or contrary to morals and public
policy, the court will sustain the amounts agreed upon because obligations arising from
contracts have the force of law between the parties and should be complied
with in good faith. [Pryce Corporation vs. Philippine Amusement and Gaming Corp.,
458 SCRA 164 (2005)]
1. Supposing that 0 failed to deliver on due date. may he just pay the penalty of
P500.00?
Answer: No, because the debtor cannot exempt himself from the performance of
the obligation by just paying the penalty, except when this right has been
expressly reserved for him. (Art_.1227)
2. May C demand the delivery of 10 sacks of rice and the payment of the penalty
at the same time upon'default of O?
Answer: No. The creditor cannot demand fulfillment of the obligation and the
payment of the penalty at the same time except when this right has been clearly
granted to him, or if after requiring fulfillment of the obligation, the
performance thereof becomes impossible without his fault, he may also enforce
the penalty. (Art. 1227)
When the court may reduce the penalty
1. When the obligation has been partly complied with by the debtor
2. When the obligation has been irregularly complied with by the debtor.
1. The nullity of the principal obligation carries with it the nullity of the penal
clause. This is so because the penal clause, being just an accessory undertaking, cannot
stand by Itself
2. The nullity of the penal clause does not carry with it that of the principal
obligation. This IS so because the principal obligation can stand by itself.