CHAPTER IV, SEC.

2 – Loss of the Thing Due (Articles 1262-1269)

SECTION 2 – LOSS OF THE THING DUE

(Arts. 1262-1269)

STUDY GUIDE :

1. When is a thing considered lost? [Art. 1189(2)]

 A thing is considered lost when it :

(a) perishes; (c) disappears in such a way that its

existence is unknown; or
(b) goes out of commerce; (d) disappears in such a way that it can no
longer be recovered.

2. As a general rule, when the obligation is to deliver a specific or determinate thing, if

the thing is lost or destroyed without the fault of the debtor, or by reason of a
fortuitous event, the obligation is extinguished and the debtor will be released from
any liability to the creditor. (Art. 1262, par. 1; Art. 1174)

3. Enumerate the cases when the debtor is still liable despite the loss of the thing due :

(a) When the specific or determinate thing is lost or destroyed due to his fault, the
debtor shall be liable for damages. (Art. 1262, par. 1; Art. 1170)
(b) When the determinate thing is lost or destroyed after he has incurred in delay,
the debtor shall also be liable for damages. (Art. 1262, par. 1; Art. 1165, par. 3;
Art. 1170)
(c) When, by law or stipulation, he is liable even for fortuitous events.
(Art. 1262, par. 2; Art. 1174)
(d) When the nature of the obligation requires the assumption of risk.
(Art. 1262, par. 2; Art. 1174)
(e) When the obligation to deliver the determinate thing arises from a crime ( e.g.,
theft), unless the loss occurs after the creditor refused to accept the thing
without justification. (Art. 1268)
(f) When the generic or indeterminate thing object of the obligation is lost or
destroyed, the obligation is not extinguished under the principle genus never

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CHAPTER IV, SEC. 2 – Loss of the Thing Due (Articles 1262-1269)

perishes. (Art. 1263) The debtor is still obliged to deliver a thing of the same
kind. The creditor, however, cannot demand a thing of superior quality, and
neither can the debtor deliver a thing of inferior quality. (Art. 1246)

4. What is partial loss?

(a) In a specific real obligation, there is partial loss when only a portion of the thing
is lost or destroyed, or when it suffers depreciation or deterioration. (Example:
When portion of the body of a car is smashed, and needs repair and repainting,
there is depreciation of the car or partial loss of the thing.)

(b) In a personal obligation, there is partial loss when :

(b.1.) the prestation has become legally and physically impossible. (Art. 1266)
(b.2.) the prestation has become morally impossible or impracticable, due to
change of certain conditions. (Art. 1267)

5. When is partial loss considered as total loss as to extinguish the debtor’s obligation?

 In a real obligation, the partial loss of the thing may be considered as a total
loss if the loss is so material that the remaining portion of the object is rendered
insignificant or immaterial. In such a case, the debtor will be released from liability, and
his obligation extinguished. (Art. 1264) This is, of course, subject to the general
qualification that the loss was not due to the fault of the debtor. (Arts. 1170 & 1174)
(Example: The car was wrecked in an accident. The tires, car seats, and stirring wheel
are all that remain of the car. Here, while there is only partial loss because many parts
were still recovered, the same is deemed equivalent to total loss of the object of the
obligation.)

 In a personal obligation, the equivalent provisions are Arts. 1266 and 1267. It
is, however, imperative that in order that the obligation of the debtor may be extinguished,
the impossibility (Art. 1266) or impracticability (Art. 1267) of the performance of the
prestation should :

(a) take place after the establishment of the obligation; and

(b) be without fault on the part of the debtor.

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CHAPTER IV, SEC. 2 – Loss of the Thing Due (Articles 1262-1269)

6. What is the presumption when the thing due is lost while in the possession of the
debtor? When will the presumption not apply?

 When the thing due is lost while in the custody of the debtor, the disputable
presumption arises that the loss was due to the debtor’s fault. This presumption,
however, will not apply if the loss occurred during a natural calamity. (Art. 1265)

APPLICATION/PROBLEMS:

1. On January 5, 2012, Arthur leased his 200 square-meter lot located in San
Pablo City to Irwin. It was agreed upon by the parties that Irwin was to use the lot for his
poultry farm for a period of two years or until January 4, 2014. The monthly rental agreed
upon was P20,000. The parties’ lease contract also provided for a penal clause which
stipulated that should Irwin terminate the contract before the term provided in the lease,
Irwin will be liable for damages equivalent to all unpaid rentals until January 4, 2014. On
February 1, 2012, the City Council of San Pablo passed an ordinance reclassifying the
leased lot from commercial to purely residential. The ordinance was to take effect on July
1, 2012. Hence, on March 15, Irwin informed Arthur that he was already turning over the
property on June 30, 2012. At the same time, Irwin updated his rental payments to Arthur
until end of July 4, 2012. Arthur is now claiming for damages corresponding to Irwin’s
rental payments from July 5, 2012 up to January 4, 2014 (P20,000 x 18 months), or a total
of P360,000, as penalty for pre-terminating the lease. Irwin, however, refuses to pay
alleging that he could no longer continue with his poultry business on the leased lot in
view of the passage of the ordinance. Decide on the parties’ arguments?

2. On February 14, 2014, Je carnapped the Honda-CRV of Garry. Three days

after, he was apprehended by the police authorities and a case for theft was filed against
Je. On April 30, 2014, the court convicted Je of the crime of theft and ordered him to
return to Garry the Honda-CRV within fifteen days from receipt of a copy of the court’s
judgment in the case, or until May 15, 2014. On May 10, 2014, the warehouse where Je
put the Honda-CRV in storage was gutted by fire. The car was completely burned to
ashes.
(a) Is Je’s obligation to deliver the car to Garry now extinguished?
(b) Assume that on May 15, 2014, Je tendered delivery of the car to Garry but Garry
refused to accept the car without justifiable reason. On May 16, 2014, the car was
completely burned to ashes. Will your answer in the immediately preceding question
be the same?

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