Balderosa, Jenaline D.

ACTCY21S2

Question: What are the rules in case an object is lost or damaged due to fortuitous event,
particularly as to the liability of the debtor in an obligation? Give specific examples for
your answers. (Article 1174 related to Article 1189)

Answer:

General Rule: No person shall be liable for fortuitous events, i.e. his obligation will be
extinguished

Exceptions:

1. When expressly specified by law

2. When declared by stipulation
3. When the nature of the obligation required the assumption of risk.

Note: Debtor is exempt from liability if he has committed negligence that resulted to loss.

Rules in case of loss, deterioration or improvement of determinate thing before the

fulfilment of the suspensive condition (Art.1189)

1. Loss of the thing

a. Without debtor’s fault – obligation is extinguished
b. With debtor’s fault – debtor is obliged to pay damages

Concept of Loss

A thing considered lost when it perishes, or goes out of commerce or disappears in such
a way that its existence is unknown or it cannot be recovered.

Example: Daniela is obliged to give Marga a specific house if Marga passes the CPA
examination. If the house is destroyed in a fire without the fault of Daniela before C
passes the CPA examination, Daniela’s obligation is extinguished even if Marga,
thereafter, passes the CPA Examination. But if the house is destroyed through the fault
of Daniela such as when she placed inside the house highly flammable chemicals which
caused the fire, then Daniela shall be obliged to pay damages if Marga passes the CPA
examination.

2. Deterioration of the thing

a. Without debtor’s fault – the impairment shall be borne by the creditor, i.e. no liability
on the part of the debtor to pay damages.
b. With debtor’s fault – the creditor may choose between:
1.) Rescission plus damages, and
 2.) Fulfillment plus damages

Example: Pedro is obliged to give a specific car to Bayani if Bayani finishes his
economics degree. The deterioration of the car due to wear and tear before Bayani finishes his
economics degree will be borne by Bayani if Bayani later finishes the said degree. However, if
the car is damaged in an accident due to Pedro’s fault, Bayani, if he finishes his degree, may
rescind the contract and ask for damages, or ask Pedro to deliver the car in its deteriorated
condition plus damages.