ANSWER KEY - OBLICON

Multiple Choice (2 pts each)

Instruction: Encircle the letter corresponding to the correct answer. No erasures.

1. The creditor has the right to the fruits of the thing from the time:

a. The thing is delivered

b. The obligation to deliver the thing arises
c. The contract is perfected
d. The fruits are delivered

2. A debtor is liable for damages in case of delay if he is guilty of any of the

following, except:

a. Default
b. Mistake
c. Negligence
d. Breach through contravention of the tenor thereof

3. The following are the requisites of mora solvendi, except:

a. Obligation pertains to the debtor and is determinate, due, demandable,

and liquidated
b. Obligation was performed on its maturity date
c. There is judicial or extrajudicial demand by the creditor
d. Failure of the debtor to comply with such demand

4. A debtor may still be held liable for loss or damages even if it was caused
by a fortuitous event in any of the following instances, except:

a. The debtor is guilty of dolo, malice or bad faith, has promised the same
thing to two or more persons who do not have the same interest
b. The debtor contributed to the loss
c. The thing to be delivered is generic
d. The creditor is guilty of fraud, negligence or delay or if he
contravened the tenor of the obligation.

5. A natural obligation under the New Civil Code is one which:

a. The obligor has a moral obligation to do, otherwise entitling the obligee
to damages
b. Refers to an obligation in writing to do or not to do
c. The obligee may enforce through the court if violated by the obligor
d. Cannot be judicially enforced but authorizes the obligee to retain
the obligor’s payment or performance

True or False (1 pt each)

Instruction: Place your answer in the blank provided. No erasures.

_____________________1. A waiver of an action for future fraud is valid. (FALSE)

_____________________2. In an obligation to give an indeterminate thing, the loss
or destruction of anything of same kind will extinguish the obligation if the cause
of the loss is a fortuitous event. (FALSE)
_____________________3. An act of men such as armed robbery or piracy are
considered fortuitous events if they occur independently of the debtor’s will.
(TRUE)

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_____________________4. As a general rule, rights acquired in virtue of an
obligation are not transmissible. (FALSE)
_____________________5. An obligation subject to a resolutory condition is
demandable at once. (TRUE)
_____________________6. An obligation which is subject to a suspensive condition
that is potestative on the part of the debtor at the same, is valid. (FALSE)
_____________________7. An obligation where the debtor binds himself to pay
when his means permit him to do so is a conditional obligation. (FALSE)
_____________________ 8. An obligation which is demandable upon the death of a
person is an obligation with a period. (TRUE)
_____________________ 9. The condition not to do an impossible thing shall be
considered as not having been agreed upon. In such a case, the obligation is
immediately demandable. (TRUE)
_____________________10. The condition that some event happen at a determinate
time shall extinguish the obligation as soon as the time expires or it has become
indubitable that the event will not take place. (TRUE)
_____________________11. The condition shall be deemed fulfilled if the debtor
voluntarily prevents its fulfillment. (TRUE)
_____________________12. The effects of conditional obligation to give, once the
condition has been fulfilled shall retroact to the day of the constitution of the
obligation. (TRUE)
_____________________13. A thing, although it still physically exists, may be
considered lost if it goes out of commerce. (TRUE)
_____________________14. A condition may refer to a past event unknown to the
parties. (TRUE)
_____________________15. If the thing is improved at the expense of the debtor
before the fulfillment of a suspensive condition, the debtor may demand
reimbursement of such expense from the creditor. (FALSE)
_____________________16. Whenever a period is designated in an obligation, it
shall be presumed to have been established for the benefit of the debtor. (FALSE)
_____________________17. The debtor does not lose the right to make use of the
period if the security he has given is lost due to a fortuitous event. (FALSE)
_____________________18. The period in an obligation always refers to the future.
(TRUE)
_____________________19. In alternative obligations, the creditor may be
compelled to receive part of one and part of another undertaking. (FALSE)
_____________________20. In a facultative obligation, the loss of the substitute
through a fortuitous event before the substitution has been made by the debtor,
shall have no effect on the debtor’s obligation to deliver the principal thing.
(TRUE)

Enumeration (1 pt each)
Instruction: Place your answer in the blank provided. No erasures.

For numbers 1 to 3, what are the essential requisites of an Action for Damages
under Article 1170?

1. The parties are reciprocally obligated;

2. One of the parties failed to comply with what is incumbent upon him;

3. The breach is substantial so as to defeat the object of the parties in making

the agreement

(Additional Alternative answer: The injured party chose the remedy of recission
instead of enforcement, or had no other remedy because enforcement become
impossible)

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For numbers 4 to 7, what are the exceptions to the general rule that demand is
indispensable before the obligor can be considered to be in delay?

4. When the obligation expressly so declares;

5. When the law expressly so provides;

6. When time is of the essence of the contract;

7. When demand would be useless because of:

a. Some act or fault of the debtor; or

b. Impossibility of performance caused by fortuitous event;

(Additional Alternative Answer: When the obligor has expressly acknowledged the
he really is in default)

For numbers 8 to 10, what are the kinds of negligence? Define each.

8. Culpa Criminal -

9. Culpa Aquiliana -

10. Culpa contractual

(Note: 1 pt each if definition is provided. Give 2 pts if no definition for each)

For numbers 11 to 13, when is there liability even if there is a fortuitous event?

11. When expressly declared by law;

12. When expressly declared by stipulation or contract; or

13. When the nature of the obligation requires the assumption of risk.

For numbers 14 to 17, what are the cases when the debtor loses the benefit of a
period?

14. When after the obligation has been contracted, he becomes insolvent,
unless he gives guaranty or security for the debt;

15. When he does not furnish to the creditor the guaranties or securities
which he has promised;

16. When by his own acts he has impaired said guaranties or securities
after their establishment, and when through a fortuitous event they
disappear, unless he immediately gives new ones equally satisfactory;

17. When the debtor violates any undertaking, in consideration of which

the creditor agreed to the period; or

(Additional Alternative Answer: When the debtor attempts to abscond)

18 – 19 : kinds of period:

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Essay:
1. The remedy of Nolan is to go to court and ask that a period be fixed for the
payment of the debt. Article 1180 of the New Civil Code provides that when
a debtorbinds himself to pay when his means permit him to do so, the
obligation shall be deemed to be one with a period (suspensive). Article
1197 provides that the Courts may fix a period if such was intended from

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 the nature of the obligation and may also fix the duration of the period
when such depends on the will of the debtor.

2.

(a) No, the case is not one of a natural obligation because even if the
contract of loan is verbal, the delay of Julia made her liable for
interest upon demand by Sara. This is not a case of a natural
obligation but a civil obligation to pay interest by way of damages by
reason of delay. (Article 1956; Article 1169; Article 2209 Civil Code)
(b) A civil obligation is based on positive law which gives a right of action
to compel their performance in case of breach. A natural obligation
is based on equity and natural law and cannot be enforced by court
action but after voluntary fulfilment by the obligor, they authorize
the retention of what may have been delivered or rendered by reason
thereof. (Article 1423, Civil Code)

3. B cannot compel A to deliver the 21-inch 1983 model TV set. The reason
is obvious. The obligation is a generic obligation because the object is
designated merely by its class or genus without any particular designation
or physical segregation from others of the same class. An action for specific
performance is, therefore, legally and physically impossible. Consequently,
the remedy of B is to ask for the delivery of a 21-inch 1983 model TV set
which must be neither of superior nor inferior quality. This is explicitly
recognized by the NCC. As a matter of fact, he can even ask that the
obligation be complied with at the expense of A. Additionally, he can ask
for damages. These remedies are also explicitly recognized by the NCC.

In the case of the refrigerator, the situation is different. The court may
compel A to comply with the obligation specifically. The reason is obvious.
The obligation is determinate. Under the NCC, if the debtor or obligor
refuses or is unable to comply with his obligation, assuming that the
obligation is a determinate obligation to give, the remedy of the creditor or
obligee is to bring an action against the debtor or obligor for specific
performance. Additionally, he can recover damages.

On the other hand, the court cannot compel A to repair the piano. The
reason is also obvious. The obligation o f A is an obligation to do. In this
type of obligation, the law recognizes the individual’s freedom to choose
between doing that which he has promised to do and not doing it. It falls
within what commentators call a personal act, of which courts may not
compel compliance as it is an act of violence to do so. The remedy,
therefore, of B is to have the obligation executed at the expense o f A.
Additionally, he can recover damages from A.

4. It depends. If the obligation is determinate, as a general rule, the obligor

or debtor cannot be held liable for damages. (Art. 1174, NCC) If the
obligation, however, is indeterminate or generic, the debtor or obligor can
still be held liable for damages. (Art. 1263, NCC) This is so because only a
determinate thing or object can be destroyed by a fortuitous event. An
indeterminate or generic thing, on the other hand, can never perish (genus
numquam peruit).

Thus, if the debtor had obligated himself to deliver to the creditor a

specified automobile and such automobile is destroyed by a fire of
accidental origin before he has incurred in delay, he can no longer be held
liable for damages, but if he had merely obligated himself to deliver to the

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 creditor an automobile without any particular designation or without
physical segregation, and subsequently, the automobile belonging to him
was lost or destroyed through a fortuitous event, he can still be held liable.

5. Demand is not necessary in this case in order that “A” shall incur in delay.
According to the NCC, where one of the partners who has undertaken to
contribute a sum of money to the common fund at a specific date fails to
do so, he becomes a debtor of the partnership not only for the amount
which he has promised to contribute but also for interest and damages
from the time he should have complied with his obligation. (Art. 1788, NCC)

6. There are three overlapping sources of the obligation of D and of his

employer. They are:

(1) Under the Revised Penal Code'. The heirs of P and Y may proceed against
D and his employer under the Penal Code. In this case, the source of
liability of D and of his employer is the crime committed by D (culpa
criminal). The liability of D is direct and primary (Art. 100, RPC)', the
liability of his employer is subsidiary. (Art. 103, RPC) The latter cannot
relieve himself of liability by proving due diligence of a good father of a
family. This is so because of the very nature of his obligation.

(2) Under the NCC:

(a) Heirs of P: The heirs of the pedestrian P may proceed against both D
and his employer, or against the latter only. In this case, the source of the
liability of D and his employer is the quasi-delict (culpa aquiliana)
committed by D. (Arts. 2176, 2180, NCC) The liability of both is direct and
primary. D’s employer can relieve himself of liability by proving due
diligence of a good father of a family in the selection and supervision of his
drivers. (Art. 2180, NCC)

(b) Heirs of Y: On the other hand, the heirs of Y may proceed against D’s
employer only. The source of the liability of D’s employer, is this case, is
the breach of his contract of carriage with Y (culpa contractual). His liability
is direct and primary. He cannot relieve himself of liability by proving due
diligence of a good father of a family. (Art. 1759, NCC) This is so because
under our law on common carriers, we do not adhere to the principle of
respondeat superior, we adhere to the principle that there is always an
implied duty of a common carrier to carry the passenger safely to his place
of destination. However, although not available as a defense, such proof of
due diligence may serve to mitigate the employer’s liability.

7. The defendant is not liable.

To constitute a caso fortuito that would exempt a person from

responsibility, it is necessary: (1) that the event must be independent of
the will of the debtor; (2) that it must be either unforeseeable or
unavoidable; (3) that the occurrence must render it impossible for the
debtor to fulfill the obligation in a normal manner; and (4) that the debtor
must be free of participation in, or aggravation of the injury to the creditor.

8. As far as the defense of fortuitous event is concerned, caso fortuito by

definition refers to those extraordinary events not foreseeable or avoidable,
“events that could not be foreseen, or which though foreseen, were
inevitable.” (Art. 1174, NCC) It is, therefore, not enough that the event

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 could not have been foreseen or anticipated, as is commonly believed, but
it must be one impossible to foresee or to avoid. The mere difficulty to
foresee the happening is not impossible to foresee the same. Hence, the
proximate cause of the accident cannot be classified as a fortuitous event.
Consequently, defendant is liable. (Republic vs. Luzon Stevedoring Corp.,
21 SCRA)

9. The facts stated in the above problem are exactly the same as those in the
case of Victorias Planters vs. Victorias Milling Co. (7 Phil. 318), where the
Supreme Court held that the effect of a fortuitous event upon the term or
period agreed upon is not to stop the running of the term or period but
merely to relieve the contracting parties from the fulfillment of their
respective obligations during the pendency of the event. According to the
Supreme Court:

Fortuitous event relieves the obligor from fulfilling a contractual

obligation. The stipulation in the contract that in the event of flood,
typhoon, earthquake, or other force majeure, war, insurrection, civil
commotion, organized strike, etc., the contract shall be deemed
suspended during said period, does not mean that the happening of
any of these events stops the running of the period agreed upon. It
only relieves the parties from the fulfillment of their respective
obligations during that time — the planters from delivering sugar
cane and the central from milling it. x x x To require the planters to
deliver the sugar cane which they failed to deliver during the four
years of the Japanese occupation and the two years after liberation
when the mill was being rebuilt is to demand from the obligors the
fulfillment of an obligation which was impossible of performance at
the time it became due. The performance of what the law has written
off cannot be demanded and required. The prayer that the plaintiffs
be compelled to deliver was impossible, if granted, would in effect be
an extension of the term of the contract entered into by and between
the parties.”

10. (1) The first defense is untenable. While it is true that where an
obligation is subject to a suspensive condition, what is acquired by the
creditor is only a mere hope or expectancy, nevertheless; it is a hope or
expectancy that is protected by the law. According to Art. 1188 of the NCC,
the creditor may, before the fulfillment of the condition, bring the
appropriate actions for the preservation of his right.

(2) The second defense is untenable. According to Art. 1186 of the NCC,
the condition shall be deemed fulfilled when the obligor voluntarily
prevents its fulfillment. The act of the Board of Directors of the Phil. Long
Distance Co. in abrogating the pension plan certainly falls within the
sphere or purview of this rule.

(3) The third defense is also untenable. This is so because the defense of
fortuitous event is available only if the obligation is determinate and not if
the obligation is generic. Here, the obligation is clearly generic since it
involves the payment of money.

From the foregoing, it is clear that the case should be decided in favor of
the plaintiffs.

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