The Law Of Obligation And Contracts

Art. 1174-1778

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 event
-any event which cannot be foreseen, or which, though foreseen, is inevitable. -may either be an act of man or an act of God (majeure).

Kinds Of Fortuitous Events

Ordinary fortuitous events or those events which are common and which the contracting parties could reasonably foresee(e.g., rain); Extra-ordinary fortuitous event or those events which are uncommon reasonably foreseen (e.g., earthquake, fire, war, pestilence, unusual flood). (see Art.1680, par. 2.)

Rules as to liability in case of fortuitous event.

(1) When expressly specified by law a. the debtor is guilty of fraud, negligence, or delay, or contravention of the tenor of the obligation. b. the debtor has promised to deliver the same (specific) thing to two or more persons who do not have the same interest. c. the obligation to deliver a specific thing arises from a crime. d. the thing to be delivered is generic.

(2) When declared by stipulation (3) When the nature of the obligation requires the assumption risk.

ART. 1175. Usurious transactions shall be governed by special laws.

Simple loan or mutuum

Simple loan or mutuum is a contract whereby one of the parties delivers to another, money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid. It may be gratuitous or with a stipulation to pay interest.

Usury
Usury is contracting for receiving interest in excess of the amount allowed by law for the loan or use of money, goods, chattels or credits.

Requisites for recovery of interest

The payment of interest must be expressly stipulated; The agreement must be in writing; and The interest must be lawful.

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.

Presumption
By presumption is meant the interference of a fact not actually known arising from its usual connection with another which is known or proved.

Two kinds of presumption

Conclusive presumption- one which cannot be contradicted, like the presumption that everyone is conclusively presumed to know the law. Disputable (or rebuttable) presumptionone which can be contradicted or rebutted by presenting proof to the contrary, like the presumption established in Art. 1176.

When presumptions in ART. 1176 do not apply

With reservation as the interest. Receipt without indication of particular installment paid. Receipt for a part of the principal. Payment of taxes. Non-payment proven.

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)

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)

The End