OBLICON - Mod 2 - Doctrines & Provisions

Nature and Effects of Obligations (Article 1163 to Article 1178)

In reciprocal obligations, under what specific condition does neither party incur in delay (mora)?

The last paragraph of Article 1169 of the Civil Code states that “In reciprocal obligations, neither party incurs in delay if the other party does not comply or is not ready to comply in a proper manner with what is incumbent upon him." Default or mora on the debtor's part refers to a delay in fulfilling an obligation due to a cause attributable to them. It signifies the failure to perform a duty within the agreed timeframe. (Phil Export v. VP Eusebio Const. et. al., 2004)

What is "Compensatio Morae," and what is its effect on the obligations of parties who are both in default in a reciprocal contract?

One kind of delay or default is Compensatio Morae. This occurs when both parties are in default for not fulfilling their reciprocal obligations. Their mutual delays cancel each other out, rendering the effects of default as if neither party is at fault. (Phil Export v. VP Eusebio Const. et. al., 2004)

What crucial characteristic must a fortuitous event possess to exempt a party from liability under Article 1174 of the Civil Code?

In order for a party to claim exemption from liability by reason of fortuitous event pursuant to Article 1174 of the Civil Code, the event should be the sole and proximate cause of the loss or destruction of the object of the contract. (Tanguilig v. CA)

Question 1
According to Article 1170 of the Civil Code, how does negligence on the part of a contracting party affect their liability for loss or damage, even if an act of God also contributed to the event?

Negligence concurrent with an act of God resulting in loss or damage does not exempt the negligent party from liability. Article 1170 of CC “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”removed the general rule applicable to the acts of God pursuant to Article 1174 of the Civil Code. (NPC v. CA)

Under what general condition is a party excused from fulfilling their contractual obligation due to an external event?

A party is not liable for non-performance if an event beyond their control (force majeure) makes it impossible to fulfill their obligation. (Phil Comm v. Globe, 2004)

What flexibility do contracting parties have in defining "force majeure" in their agreements, and according to Article 1174, what characteristic can even foreseeable events possess to qualify as force majeure?

Parties can define force majeure in contracts as long as it follows the law. Under Article 1174 of the Civil Code, even foreseeable events can be considered force majeure if they are unavoidable. (Phil. Comm v. Globe, 2004)

According to Article 2207 of the Civil Code, what happens to the rights of an insured party against a wrongdoer or breaching party when the insurance company pays for the loss or injury?

Article 2207 of the Civil Code – If the plaintiff's property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who

has violated the contract. (Gaisano v. Insurance Company of North America, 2006)

Based on Article 1263 of the Civil Code, does a fortuitous event extinguish an obligation to pay money or to deliver a generic thing?

Obligation to pay money is not extinguished by a fortuitous event – Under Articles 1263 of the Civil Code, an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does not extinguish the obligation. (Gaisano v. Insurance Company of North America, 2006)

According to Article 1170 of the Civil Code, what constitutes fraud in the performance of an obligation, and what is a consequence of establishing such fraud?

Fraud in the performance of an obligation exists when a party knowingly and intentionally evades in fulfilling their obligation without full payment or the consent of the other party. When fraud and bad faith are established, the award of damages is justified. (Tumibay v. Spouses Lopez)

According to Article 1169, under what general condition does a party incur delay in fulfilling their obligation to deliver or do something?

Delay in Performance, Article 1169 states that those obliged to deliver or do something incur delay from the time the obligee demands fulfillment, but demand is unnecessary when the obligation is due on a specific date (Rivera v. Chua, 2015)

What are the specific exceptions to the general rule requiring demand for delay to exist, as outlined in Article 1169?

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. (Rivera v Chua)

How is delay determined in the context of reciprocal obligations, according to the last paragraph of Article 1169?

From the moment one of the parties fulfills his obligation, delay by the other begins. (Rivera v Chua)

In the context of securing an obligation, what is the relationship between the remedies of collection and foreclosure, and what is the consequence of pursuing one of these options?

The remedies of collection and foreclosure are mutually exclusive. The invocation or grant of one remedy precludes the other (Pineda v. De Vega)

According to Article 1167 of the Civil Code, what are the legal remedies available to a creditor when a debtor fails to perform an obligation to do something?

Art. 1167. If a person obliged to do something fails to do it the same shall be executed at his cost. This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that what has been poorly done be undone (HS Pow Construction v Shaughenessy, 2021)

According to Article 546, what types of expenses are reimbursed to every possessor of property, and what additional right does a possessor in good faith have regarding necessary and useful expenses?

Article 546, Effects of Possession Necessary expenses shall be refunded to every possessor, but only the possessor in good faith may retain the thing until he has been reimbursed. For useful expenses, only a good faith possessor is entitled to reimbursement and can retain the property until compensated. The new owner can choose to either repay the expenses or pay for the added value the improvements have brought.

Based on Article 448, what are the two options available to a landowner when someone builds, plants, or sows on their land in good faith, and what limitation exists if the land is considerably more valuable than the improvements?

Article 448, Rights of Accession with respect to Immovable property Provides that If someone builds, plants, or sows on another person’s land in good faith (without knowing they don’t own it), the landowner has two options. They can either keep the improvements by paying fair compensation or require the builder or planter to buy the land. However, if the land is worth much more than the improvement, the builder cannot be forced to buy it and must instead pay reasonable rent. If they disagree on the rent, the court will decide