Ne2

attyjdc

OBLIGATIONS

CONTRACTS

attyjdc

Art. 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.

Article 1170

Fraud:(deceit or dolo) the deliberate or intentional act to evade fulfillment

Negligence:(fault or culpa) the omission, without malice, which prevents fulfillment

Delay:(default or mora) if imputable to the debtor

GROUNDS FOR DAMAGES:

Violation of the Terms:(violatio) unless properly excused by fortuitous event

attyjdc

Kinds of Damages

(A) MORAL - for mental and physical anguish.

(B) EXEMPLARY - corrective or to set an example.

(C) NOMINAL - to vindicate a right, when no other kind of damages may be recovered.

(D) TEMPERATE - exact amount cannot be determined

(E) ACTUAL - actual losses as well as unrealized profit.

(F) LIQUIDATED - predetermined by an agreement.

MENTAL

attyjdc

Dolo & Culpa

Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.

Art. 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 the circumstances.

Art. 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 the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required. (1104a)

attyjdc

Distinction

Dolo

Deliberate intention to cause damage or prejudice

Culpa

No deliberate intent to cause damage

Liability cannot be mitigated or reduced by the courts

Liability may be mitigated or reduced by the courts

Waiver of an action against future fraud is void.

Waiver of an action against future culpa may in a certain sense be allowed.

attyjdc

Fraud (Dolo)

Past fraud may be waived, but not for future fraud.

Dolo Causante or Causal Fraud

Deceit that is not serious in character and without which the other party would have entered into the contract anyway.

A deception used by one party prior to or simultaneous with the contract, in order to secure the consent of other. Deceit must be serious.

Dolo Incidente or Incidental Fraud

(Solidbank vs. Mindanao Ferroalloy, G.R. No. 153535.  July 28, 2005)

attyjdc

Negligence (Culpa)

Gross Negligence: negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to consequences, insofar as other persons may be affected.  It is the omission of that care which even inattentive and thoughtless men never fail to give to their own property. (CSC vs. Rabang, G.R. No. 167763. March 14, 2008)

Simple Negligence:

Ordinary negligence which in certain cases may be excused or mitigated.

attyjdc

According to Source of Obligation

Kinds of Culpa

CULPA CONTRACTUAL (Contractual Negligence)

CULPA AQUILIANA (Civil Negligence)

CULPA CRIMINAL (Criminal Negligence)

Results in a breach of contract

Tort or Quasi-Delict

Results in the commission of a crime

Negligence is merely incidental, incident to the performance of an obligation already existing because of a contract

Negligence is direct, substantive and independent.

Negligence is direct, substantive and independent

attyjdc

CULPA CONTRACTUAL

CULPA AQUILIANA CULPA CRIMINAL

There is a pre-existing obligation whether implied or express.

No pre-existing obligation

No pre-existing obligation

Proof is preponderance of evidence

Proof is preponderance of evidence

Proof of guilt beyond reasonable doubt

Defense of “good father of a family” in the selection and supervision of employee is not a proper complete defense, though it may mitigate damages.

Defense of GFF is a proper and complete defense insofar as employers are guardians are concerned

GFF is not a proper defense. Employee’s guilt is automatically the employer’s civil guilt, if the former is insolvent.

Kinds of CulpaAccording to Source of Obligation

attyjdc

CULPA CONTRACTUAL

CULPA AQUILIANA CULPA CRIMINAL

As long as it is proved that there was a contract and that it was carried out, it is presumed that the debtor is at fault, and it is his duty to prove that there was no negligence in carrying out the terms of the contract.

Ordinarily, the victim has to prove the negligence of the defendant. This is because his action is based on alleged negligence on the part of the defendant.

Accused is presumed innocent until the contrary is proved, so prosecution has the burden of proving the negligence of the accused.

According to Source of ObligationKinds of Culpa

attyjdc

According to Source of Obligation

Kinds of Culpa

Scenario:

A taxi hit a make-shift store thereby injuring its driver, passenger and the store attendant. What kinds of culpa are present?

attyjdc

Kinds under the Civil Code: (a) that agreed upon by parties (b) in the absence of (a), that required by the law. (c) in the absence of (b), bonum pater-familia or that expected of a good father of a family

DILIGENCE

attyjdc

Art. 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

Fortuitous Event Any event which cannot be foreseen, or which, though foreseen is inevitable. It consists of a happening independent of the will of the debtor and which happening, makes the normal fulfillment of the obligation impossible.

Caso fortuito, act of God, force majeure

attyjdc

General Rule: Debtor is not liable for

fortuitous events. Exceptions: (1) When expressly declared by law; (2) When expressly declared by stipulation or contract; (3) When the nature of the obligation requires the assumption of risk.

Fortuitous Event

attyjdc

Essential Characteristics of a Fortuitous Event Independent of the will of the debtor; Impossibility of foreseeing or impossibility of

avoiding it even if foreseen; The occurrence must be such as to render it

impossible for the debtor to fulfill his obligation in a normal manner.

Fortuitous Event

attyjdc

Interests

Art. 1175. Usurious transactions shall be governed by special laws.

USURY:

Contracting for or receiving something in excess of the amount allowed by law for the loan or use of money, goods, chattels or credit.

Exaction of excessive interest.

Under Central Bank Circular No. 905, usury had been abolished since Jan. 1, 1983. The parties will now mutually agree on the rate of interest.

attyjdc

Kinds of Interest:

A. Moratory Interest – interest given for compensation or use of money.

Ex. Tommy borrowed P10,000 at 7% interest per annum for 2 years from the bank.

B. Compensatory Interest – interest given by way of damages.

Ex. Tommy borrowed P10,000 with no interests for 2 years. If he pays when the debt falls due, he would not pay any interest. However, he will be liable for interest by way of damages if he incurs default.

Interests

attyjdc

Lawful Interests (Authorized Rates): those

allowed as maximum under the former Usury Law

Legal Interests: rate presumed by law to have been agreed upon but no rate was stipulated.

Conventional Interests: rate agreed upon by parties.

Usurious Interests: rate which exceeds the maximun provided by law.

Interests

attyjdc

Art. 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. 

Presumption: inference of a fact drawn from other evidence that is admitted and proven to be true.

It could be CONCLUSIVE or DISPUTABLE.

Presumptions

attyjdc

Art. 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.

attyjdc

Exact payment. Exhaust debtor’s properties generally by

attachment Accion subrogatoria (subrogatory action) - exercise all rights and actions except those inherent in the person.

Accion pauliana - impugn or rescind acts or contracts done by the debtor to defraud the creditors.

Rights of Creditors

attyjdc

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

General Rule: Rights are transmissible.Except:(1)If law provides otherwise.(2)If the contract provides otherwise.(3)If the obligation is purely personal.

Transmissibility of Rights