 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
(1105a)
Fortuitous even – is an event which cannot be foreseen
which though foreseen is inevitable.

Fortuitous event proper are acts of God such as volcanic

eruption, earthquake, lightning, etc. is now similar with force
majuere or acts of man such as conflagration, war, robbery,
etc.

1. Requisite necessary to constitute fortuitous event

 The failure of the debtor to comply with the obligation must
be independent from the human will;
 The occurrence makes it impossible for the debtor to fulfill the
obligation on a normal manner, and the obligor did not take
2. As a general rule, no person shall be held responsible
for fortuitous events

Example – Gaya obliged herself to deliver a determine car to

Tito on Dec. 30, 1998. Before the arrival of the period, the
car was struck by lightning and was totally destroyed. Gaya
cannot be held responsible for the destruction of the car,
hence her obligation to deliver is extinguished.
Exceptions (when the person is responsible despite
the fortuitous even).

a. When the law expressly so provides, such as:

 The debtor is guilty of fraud, negligence or in contravention of the
tenor of the obligation. (Art, 1170, NCC)
 The debtor has proved to deliver the same thing to two or more
persons who do not have the same interest. ( Art. 1165,NCC )
 The thing to delivered is generic.
 The debtor is guilty of default or delay. ( Art. 1169,NCC )
 The debtor is guilty of concurrent negligence.

b. When declared by stipulation;

c. When the nature of obligation requires the assumption

of risk. An example of this is a contract of insurance.
ART. 1175. Usurious transaction shall be governed by
special laws.

 Note: C.B. Circular No. 905 suspends the ceilings in the

usury law.
Hence, parties can agree as to the rate of interest.
Kinds of interest
1. Conventional *The rate which is agreed upon by
the parties.
2. Legal Interest *The rate which is prescribed by law.
3. Lawful Interest *The rate which is agreed upon by
the parties but which rate is within
the
4. Usurious Interest rate authorized by law.
*The rate which is in excess of the
maximum rate of interest allowed by
law.
 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. (1110a)

Presumption means “the inference as to the

existence of a certain fact which if not contradicted is
considered as true.”
 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. (1111)

 Rights of Creditors –
In order to satisfy their claims against the debtor, creditors have
the following successive rights:

1. to levy by attachment and execution upon all the property of

the debtor, except such as are exempt by law from execution;

2. to exercise all the rights and actions of the debtor, except, such
as
are inherently personal to him; and
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. (1112)

As a rule, all rights acquired in virtue of an obligation

are transmissible, except in the following cases:
1. When the law so provides.
2. When the parties stipulate otherwise – by agreement
of parties that the rights acquired by them will not be
transmitted to any other person.
3. When the obligation is purely personal in nature.