BREACH OF OBLIGATIONS

VOLUNTARY

• FRAUD
• DELAY
• NEGLIGENCE

INVOLUNTARY

• Fortuitous Event
• an event which cannot be foreseen, or which, though foreseen, was inevitable.

DEFAULT / DELAY (MORA)

• On , 1976, A borrowed P10,000 from B evidenced by a promissory note whereby he undertook to pay the indebtedness on October 1, 1978.

DEFAULT / DELAY (MORA)

• On October 1, 1980, B brought an action against A for the payment of the obligation as well as legal interest from the date of maturity by way of damages.
• There is no evidence that any demand for payment was ever made prior to the presentation of the complaint.

DEFAULT / DELAY (MORA)

• From what time shall the legal interest be computed — shall it be computed from October 1, 1978, when the obligation became due and demandable, or from October 1, 1980, when the complaint was filed?

DEFAULT / DELAY (MORA)

• According to the decided cases, the interest shall be computed from October 1, 1980, when the complaint was filed, because it was only then that the debtor had incurred in delay.

WHEN IS DEMAND NOT NECESSARY?

1.When the obligation or the law expressly so declares.

EXPRESSLY DECLARED BY LAW

• A and B entered into a contract of partnership for the purpose of buying and selling textbooks, with the former as capitalist partner and the latter as industrial partner.

EXPRESSLY DECLARED BY LAW

• It was agreed that A shall contribute P20,000 to the common fund on January 5, 1980.
• Upon the arrival of the designated date for payment, is demand necessary in order that A shall incur in delay?

EXPRESSLY DECLARED BY LAW

• Demand is not necessary in order that A shall incur in delay.
• According to Art. 1788 of the Civil Code, where one of the partners who has undertaken to contribute a sum of money to the common fund at a specified date fails to do so, he becomes a debtor of the partnership.

2.The time element for the fulfillment of the obligation is of the essence of the contract.

TIME IS OF THE ESSENCE

• The delivery of balloons on a particular date when a children’s party will be held
• The making of a wedding dress where the wedding is scheduled at a certain time
• The delivery of a car to be used in a trip at a particular time

3.When demand would be useless, as when the obligor has rendered it beyond his power to perform.

DEMAND IS USELESS

• If A has promised to deliver his automobile to B on the 15th day of November, 1980
• but a few days before such date, the automobile was completely destroyed through his fault,
• and the fact of its destruction was known to B, demand by the latter would be useless.

NEGATIVE OBLIGATIONS

• The obligor can not possibly incur in delay in negative obligations (not to do).

RECIPROCAL OBLIGATIONS

• Reciprocal obligations are those which are created or established at the same time, out of the same cause, and which result in mutual relationships of creditor and debtor between the parties.

RECIPROCAL OBLIGATIONS

• Fulfillment by both parties should be simultaneous or at the same time.

RECIPROCAL OBLIGATIONS

• Thus, in a contract of sale of an automobile for P54,000, the vendor is obliged to deliver the automobile to the vendee, while the vendee is obliged to pay the price of P54,000 to the vendor.

RECIPROCAL OBLIGATIONS

• It is clear that the vendor will not deliver the automobile to the vendee unless the latter will pay the price, while the vendee will not pay the price to the vendor unless the latter will deliver the automobile.

FRAUD (DOLO)

• Fraud in the performance of an obligation (DOLO INCIDENTE)
• Fraud in the constitution or establishment of an obligation (DOLO CAUSANTE)

DOLO INCIDENTE

• Present only during the performance of a pre-existing obligation
• Employed for the purpose of evading the normal fulfillment of an obligation

DOLO INCIDENTE

• Results in the nonfulfillment or breach of the obligation
• Gives rise to a right of the creditor or obligee to recover damages from the debtor or obligor

DOLO CAUSANTE

• Present only at the time of the birth of the obligation
• Employed for the purpose of securing the consent of the other party to enter into the contract

DOLO CAUSANTE

• Reason for the other party upon whom it is employed for entering into the contract, results in the vitiation of his consent
• Gives rise to a right of the innocent party to ask for the annulment of the contract if the fraud is causal or to recover damages if it is incidental

NEGLIGENCE (CULPA)

• CULPA CONTRACTUAL
• CULPA AQUILIANA (Quasi-Delicts)

CULPA CONTRACTUAL

• The fault or negligence of the obligor by virtue of which he is unable to perform his obligation arising from a pre-existing contract, because of the omission of the diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place.

CULPA AQUILIANA

• The fault or negligence of a person, who, because of the omission of the diligence which is required by the nature of the obligation and which must correspond with the circumstances of the persons, of the time and of the place, causes damage to another.

CULPA CONTRACTUAL

• the negligence of the defendant is merely an incident in the performance of an obligation
• there is always a pre-existing contractual relation;
• the source of the obligation of the defendant to pay damages to the plaintiff is the breach or nonfulfillment of the contract

CULPA CONTRACTUAL

• proof of the existence of the contract and of its breach or nonfulfillment is sufficient prima facie to warrant a recovery
• proof of diligence in the selection and supervision of employees is not available as a defense

CULPA AQUILIANA

• substantive and independent
• there may or may not be a pre-existing contractual relation
• the source is the defendant’s negligent act or omission itself

CULPA AQUILIANA

• negligence of the defendant must be proved
• proof of diligence in the selection and supervision of employees is available as a defense

PROBLEM

• Taxi driver D, driving recklessly, killed pedestrian P and his passenger Y.
• Discuss the source of the obligation of D and of his employer to P and to Y, and the defense available to the employer.

Under the Revised Penal Code

• The heirs of P and Y may proceed against D and his employer under the Penal Code.
• The source of the liability of D and of his employer is the crime committed by D (culpa criminal).

Under the Revised Penal Code

• The liability of D is direct and primary (Art. 100, RPC); the liability of his employer is subsidiary (Art. 103, RPC).
• The latter cannot relieve himself of liability by proving due diligence of a good father of a family.

Under the Civil Code

• Heirs of P: The heirs of pedestrian P may proceed against both D and his employer, or against the latter only. In this case, the source of the liability of D and his employer is the quasi-delict (culpa aquiliana) committed by D (Arts. 2176, 2180, CC).

Under the Civil Code

• The liability of both is direct and primary.
• D’s employer can relieve himself of liability by proving due diligence of a good father of a family in the selection and supervision of his drivers (Art. 2180, CC).

Under the Civil Code

• Heirs of Y: On the other hand, the heirs of Y may proceed against D’s employer only.
• The source of the liability of D’s employer, in this case, is the breach of his contract of carriage with Y (culpa contractual). His liability is direct and primary.

Under the Civil Code

• When the action is based on a contract of carriage, and the obligor, in this case the carrier, failed to transport the passenger to his destination, the fault or negligence of the carrier is presumed.

Under the Civil Code

• It is sufficient for the plaintiff to prove the existence of the contract of carriage and the damages or injuries suffered by him.
• It is the obligation of the carrier to transport its passengers or goods safely.

FORTUITOUS EVENTS

FORTUITIOUS EVENTS

• If the obligor is unable to comply with his obligation by reason of a fortuitous event, the general rule is that he is exempted from any liability whatsoever.
• In other words, his obligation is extinguished.

PROBLEM

• The application of this rule is even more evident in motor vehicle accidents.
• Thus, where it was established that the defendant’s bus was bumped by another bus which caused the driver to swerve it to the left so as to prevent it from falling into a canal and as a result it struck a tree, which led the bus to skid and capsize,

PROBLEM

• it was held that since the injury can be attributed or imputed only to an inevitable accident and not the misconduct or negligence of the operator or of the driver, there can be no possible recovery of damages.

PROBLEM

• But where the accident is due to a defect of an equipment or of an appliance purchased from a manufacturer, it is clear that such a defect cannot be considered a fortuitous event within the meaning of the law.

ESSENTIAL CONDITIONS

ESSENTIAL CONDITIONS

• that the event must be independent of the will of the obligor
• that the event must be either unforeseeable or inevitable

ESSENTIAL CONDITIONS

• that the event must be of such a character as to render it impossible for the obligor to fulfill his obligation in a normal manner
• that the obligor must be free from any participation in the aggravation of the injury resulting to the obligee or creditor.

EXCEPTIONS

EXCEPTIONS

• where such liability is expressly specified by law
• where it is declared by stipulation of the parties
• where the nature of the obligation requires the assumption of risk

PROVIDED BY LAW

• The first exception may be illustrated by provisions of the Civil Code, such as those found in Arts. 552, par. 2, 1165, par. 3, 1268, 1942, 1979, 2147, 2148, and 2159.

PROBLEM

• A received from X a pendant with diamonds valued at P4,500 to be sold on commission basis or to be returned on demand.
• In the evening of Feb. 1, 1961, while walking home to her residence, two men snatched her purse containing the pendant and ran away.

PROBLEM

• Subsequently, the snatchers were apprehended and charged.
• During the pendency of the criminal case, X brought an action against A for recovery of the pendant or of its value and damages.

PROBLEM

• The Supreme Court held that defendant is not liable.

PROBLEM

• Cite instances where a person is made civilly liable for failure to comply with his obligations although he was prevented from doing so by a fortuitous event.

ANSWER

• When the object of the obligation is lost and the loss is due partly to the fault of the debtor
• When the object of the obligation is lost and the loss occurs after the debtor has incurred in delay

ANSWER

• When the debtor promised to deliver the same thing to two or more persons who do not have the same interest
• When the obligation to deliver arises from a criminal offense
• When the obligation is generic

END