Equitable Tempering under Art. 1192 vs. Under Art.

2215 [Ong v Bognalbal, 2006]

Art 1192

"In case both parties have committed a breach of the obligation, the liability of the first infractor shall be
equitably tempered

Art 2215

"In contracts, quasi contracts, and quasi delicts, the court may equitably mitigate the damages under
circumstances other

C.3. FRAUD (DOLO) IN

PERFORMANCE OF THE OBLIGATION

Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for
future fraud is void. Fraud (dolo) is the deliberate or intentional evasion of the normal fulfilment of an
obligation. [De Leon]

A waiver of future fraud is void but past fraud may be subject of a valid waiver by the aggrieved party.
[De Leon]

Distinguished from Causal Fraud

Fraud in the Performance [Art. 1170]

Causal Fraud (dolo causante and dolo incidente) [Arts. 1338, 1344]

Definition

The deliberate and intentional evasion of the normal fulfilment of obligations. [International Act
Corporate Bank v Gueco, 2001]

Every kind of deception for the purpose of leading another party into error and execute a particular act.
When Present

*During the performance of a pre-existing obligation

*During the time of birth or perfection of the obligation

Purpose

To evade normal fulfilment of obligation

*To secure consent of another to enter the contract(dolo causante)

*To influence a party regarding an incident to the contract (dolo incidente)

Dolo Causante that which determines or is the essential cause of the contract

Dolo Incidente refers only to some particular or accident of the obligation

In order that fraud may vitiate consent, it must be the dolo causante and not merely the dolo incidente,
inducement to the making of the contract. The false representation was used by plaintiff to get from
defendant a bigger share of net profits. This is just incidental to the matter in agreement...

C.4. NEGLIGENCE (CULPA) IN PERFORMANCE OF THE OBLIGATION

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.

Diligence Required [De Leon]

(1) By stipulation of the parties

(2) By law, in the absence of stipulation.

(3) Diligence of a good father of a family, if both the contract and law are silent. (1173 par 2)

(4) Future negligence may be waived except in cases where the nature of the obligation or the public
requires another standard of care (i.e. common carriers)

Note: Only future simple negligence may be waived. Future gross negligence may not be waived since
such negligence amounts to fraud.
Exceptions:

Common Carriers

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735,
and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further
set forth in articles 1755 and 1756.

Hotel and Inn-keepers

Art. 1998. The deposit of effects made by travellers in hotels or inns shall also be regarded as necessary.
The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice was
given to them, or to their employees, of the effects brought by the guests and that, on the part of the
latter, they take the precautions which said hotel-keepers or their substitutes advised relative to the
care and vigilance of their effects.

Art. 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been introduced or
placed in the annexes of the hotel.

Art. 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury
to the personal property of the guests caused by the servants or employees of the keepers of hotels or
inns as well as strangers; but not that which may proceed from any force majeure. The fact that
travelers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered
in determining the degree of care required of him..

Art. 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it
is done with the use of arms or through an irresistible force.

Art. 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his
family, servants or visitors, or if the loss arises from the character of the things brought into the hotel.

Kinds of Civil Negligence

*Culpa Contractual

Negligence is merely incidental in the performance of an obligation.There is always a pre existing

contractual relation. The source of obligation of extent of Damages to be Awarded [Art. 2201]
*Culpa Aquiliana

Negligence is substantive and independent. There may or may not be a pre-existing contractual
obligation. The source of obligation is the extent of Damages to be Awarded [Art. 2201]

Good Faith

Obligor is liable for those that are the natural and Probable consequences of the breach of the
obligation, and which the parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.

Bad Faith

Obligor shall be responsible for all damages which may attributed to the be reasonably non-
performance of the obligation. Any waiver or renunciation made in the anticipation of such liability is
null and void.

C.5. CONTRAVENTION OF THE TENOR OF THE OBLIGATION

This refers to a violation of the terms and conditions stipulated in the obligation, which must not be due
to a fortuitous event or force majeure. [De Leon]

"In any manner contravenes the tenor means any illicit act, which impairs the strict and faithful
fulfillment of the obligation, or every kind of defective performance. [Tolentino)

(1) "FORTUITOUS EVENT" OR

(2) "ACTS OF THE CREDITOR"

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.
1. Fortuitous Event a happening independent of the will of the debtor and which makes the normal
fulfillment of the obligation impossible. [De Leon]

(1) Act of God: An accident, due directly or exclusively to natural causes without human intervention,
which by no amount of foresight, pains or care, reasonably to have been expected, could have been
prevented.

(2) Act of Man: Force majeure is a superior or irresistible force, which is essentially an act of man;
includes unavoidable accidents, even if there has been an intervention of human element, provided that
no fault or negligence can imputed to the debtor.

Liability In case of Fortuitous Event

No person shall be responsible for fortuitous events, UNLESS:

(1) expressly specified by law [Arts. 552 (2);

1942, 2147, 2148, 2159]

(2) liability specified by stipulation

(3) the nature of the obligations requires assumption of risk [Art. 1174]

(4) debtor is guilty of concurrent or contributory negligence

(5) debtor has promised to deliver the same thing to two or more persons who do not have the same
interest [Art. 1165 par. 3]

(6) the thing is lost due to the obligor's fraud, negligence, delay or contravention of the tenor of the
obligation [Art. 1170]

(7) the obligation to deliver a specific thing arises from a crime [Art. 1268]

(8) the object is a generic thing, i.e., the genus never perishes

Note: Genus nunquam perit' only pertains to physical perishing. The genus may still perish legally.
[Labitag]

2. Act of Creditor: The debtor is also released from liability when the non performance of the obligation
is due to the act of the creditor himself. [Tolentino]
E. REMEDIES AVAILABLE IN CASE OF BREACH

E.2. ACTION FOR SUBSTITUTED PERFORMANCE (IN OBLIGATION TO GIVE GENERIC THING) I

Art. 1165, Par. 2 - If the thing is indeterminate or generic, he may ask that the obligation be complied
with at the expense of the debtor.

E.3. RESCISSION (RESOLUTION IN RECIPROCAL OBLIGATIONS)

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him. The injured party may choose between the
fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also
seek rescission,

Rescission

The unmaking of a contract, or its undoing from the beginning, and not merely its termination [Pryce
Corp v Pagcor, G.R. No. 157480, 2005]

Distinguished from Rescission under Art. 1380

Rescission / Resolution [Art. 1191]

*Based on non performance or non fulfillment of obligation.

Rescission [Art. 1380]

*Based on lesion or fraud upon creditors.

Distinguished from Termination [Pryce Corp v PAGCOR, 2005]

Rescission

May be effected:

(a) by both parties by mutual agreement, or

(b) unilaterally by one of them declaring a rescission without the consent of the other if a legally
sufficient ground exists or if a Applies only to reciprocal obligations where one party is guilty of non
fulfillment

In some cases, court may grant a term for performance.

Non-performance by the other party is important.

Termination

May be effected by mutual agreement or by one party exercising one of its remedies as a consequence
of the default of the other

Applies to either unilateral or reciprocal obligations even when the contract has been fully fulfilled Court
cannot grant a period or term within which one must comply. Non-performance by the other party is
immaterial.

E.5. SUBSIDIARY

CREDITORS

(a) Accion Subrogatoria

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 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.

(b) Accion Pauliana

Art. 1177....they may also impugn the acts which the debtor may have done to defraud them.

Accion Directa

Subsidiary liability of sublessee to the lessor for rent due from the lessee