Report Obli

8/3/2019 Report Obli

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SECTION 2

LOSS OF THE THING DUE



LOSS -under this Section included ´ impossibility of performance

There is a Loss when:

a) when the object perishes

(physically, it is destroyed)

b) when it goes out of commerce

c) when it disappears in such a way that:

1) when it goes out of commerce

2) or it cannot be recovered.

Impossibility of Performance Includes:

a) physical impossibility

b) legal impossibility, which is either:

1) directly caused as when prohibitedby law

2) or indirectly caused as when the

debtor is required to enter a military draft

c) moral impossibility.



ART. 1262

An obligation which consists in the delivery of a determinate thing shall be extinguished if itshould be lost or destroyed without the fault of the debtor, and before he has incurred in delay.

When by law or stipulation, the obligor is liable even for fortuitous event , the lost of thething does not extinguish the obligation , and he shall be responsible for damages. Thesame rule applies when the nature of the obligation requires the assumption of risk.

TWO KINDS OF OBLIGATION ´ To Giveµ

An obligation to give may consists of an obligation

(a) to give a generic thing

(b) or to give a specific thing

Effect of Loss on an Obligation to Deliver a Specific Thing

General rule ² the obligation is extinguished



Exceptions: The obligation is not extinguished in the following cases: 1. If the debtor is at fault 2. when the debtor is made liable for fortuitous event because: a. of a provision of law b. of a contractual stipulations

c. the nature of the obligation requires the assumption of risk on the part of thedebtor Monetary obligation:

An obligation to pay money, such as one under a pension plan, is generic. Here failureto raise funds is not a defense.

Example : Federation of United Namarco Distributors vs National MarketingCorporation

The debtor-appellant NAMARCO refused to deliver the goods to the creditor

b) Federation after due demand , and, as a result, some of the goods are destroyed, theSupreme Court said the debtor-appellant had to bear the risk of loss.



Art. 1263

In an obligation to deliver a generic thing, the loss or destruction of anythng of the same kinddoes not extinguish obligation

Effect of Loss:

± The obligation continues to exist because a generic thing does not really perishExceptions:

a) If the generic thing is delimited

b) If the generic thing has already been segregated or set aside, in which case, it has becomespecific.

c) Monetary obligation - an obligation to pay money, such as one under a pension plan.

Example: If the debtor is bound to deliver a ball without any specification, he maydeliver any kind of ball. If he buys one and subsequently losses it through a fortuitousevent, his obligation is not extinguished. The debtor sinply has to buy another ball.

.



ART. 1264 The Courts shall determine whether, under the circumstances, the partial loss of theobject of the obligation is so important as to extinguish the obligation.

Effect of partial lossIn certain cases, partial loss may indeed be equivalent to a complete loss, such as the

loss of a specific loss, minus the cover , In other cases, the loss may be significant. Hence,

judicial determination of the effect is needed.o deliver the

Example: If the debtor is under an obligation to deliver a specific computer consisting of theCPU with specific drives and particular hard disks together with a very specialized screenpeculiarly made for the said computer , with a special keyboard made to respond only tosaid screen, and the said screen is lost through a fortuitous event before the debtor hasincurred in delay, there is clearly a partial loss which renders the computer system totally

useless. In this case, the debtor can go to court and declare that partial loss has extinguishedhis obligation to deliver the computer.



ART 1265 Whenever the thing is lost in the possession of the debtor, it shall bepresumed that the loss was due to his fault, unless there is proof to the contrary , andwithout prejudice to the provision of Art. 1165. This presumption does not apply incase of earthquake, food, storm, or other natural calamity.

Presumption That Loss Was Due To Debtor·s Fault

Example:

The debtor is presumed to be at fault. If a person is entrusted with several heads ofcattle and he cannot for some missing ones, he is presumed to be at fault.

Presumption of fault does not apply in case of natural calamity.Although fire is not a natural calamity , if a tenant is able to prove that the fire causedin his apartment was purely accidental.



Art. 1266 The debtor in obligation to do shall also be released when the prestation becomes legally orphysically impossible without the fault of the obligor

Personal Loss without the Fault of the debtor

a) Legal impossibility

Example:The furnishing of work on Sundays when the same is prohibited by law.

Physical impossibility

Example:To install a motor in a ship that was lost after the perfection of the contract but prior to such

installation



ART. 1267 When the service has become so difficult as to be manifestly beyond thecontemplation of parties, the obligor May also be referred therefrom, in whole or inpart.

This refers to moral impossibility or impracticability due to change of certainconditions, this speaks of a ́ serviceµ. Real obligation to give are not includedwithin its scope.

General rule:Impossibility of performance releases the obligor.



ART. 1268 When the debt of thing certain and determinate proceeds

from a criminal offense, the debtor shall not be exempted from thepayment of its price, whatever may be the cause for the loss, unless thething having been offered by him to the person who should receive it,the latter refused without justification to accept it.

Example:

If A stole a watch from B and was criminally charged for such anoffense, and watch was lost through a fortuitous event , the accused-debtor must still pay the price of the watch.



Art. 1269 The obligation having been extinguished by the loss ofthe thing, the creditor shall have the rights of action which thedebtor may have against third persons by the reason of the loss.

This is another provision to protect the interest of the creditor.

Example:If A buys a house from G, and the house, which is insured, is

accidentally burned by a fortuitous event even prior to thedemand for its for its delivery byA, the obligation of G to deliverthe house is extinguished. However, in the event thatA has alreadypaid the price of the house, he can seek reimbursement of the

insurance proceeds due from the insurance company.

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