Chapter IV
Section II
Loss of the thing due
Art. 1262
When loss of thing will extinguish an obligation to give: requisites
1. The obligation is to deliver a specific or determinate thing
2. The loss of thing occurs without the fault of the debtor; and
3. The debtor is not guilty of delay.
When loss of the thing will not extinguish liability
1. When the law so provides e.g. Art. 1170: 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
4. When the stipulations so provide;
5. When the nature of the obligation requires assumption of risk;
6. When the obligation to deliver specific thing arises from a crime. (Art. 1268)
Art. 1263
Genun nunquam perit.
In an obligation to deliver generic thing, the loss or destruction of anything of the same kind does not
extinguish the obligation.
The creditor, however, cannot demand thing of superior quality.
Art. 1264
The courts shall determine whether, under the circumstances, the partial loss of the object of the obligation is
so important as to extinguish the obligation.
There is partial loss when only a portion of the thing is lost or destroyed or when it suffers depreciation or
deterioration.
E.g. Race horse which suffered a broken leg and the defect is permanent. Obviously the partial loss is so
important as to extinguish the obligation.
Art. 1265
Whenever the thing is lost in the possession of the debtor, it shall be presumed that the loss was due to his
fault, unless there is proof to the contrary, and without prejudice to the provision of article 1165.
This presumption does not apply in case of earthquake, flood, storm or other natural calamity.
Art. 1266
The debtor in obligation to do shall also be released when the prestation becomes legally or physically
impossible without the fault of the obligor.
The impossibility must take place after the constitution of the obligation.
Kinds of Impossibility
1. Physical impossibility in purely personal obligation as when the obligor dies or becomes physically
incapacitated to perform the obligation.
7. Legal impossibility occurs when the obligation cannot be performed because it is rendered impossible by
provision of the law, although physically it may be possible of performance.
Art. 1267
When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the
obligor may also be released therefrom, in whole or in part.
E.g. Construction of a road near the mountain. Thereafter, a strong typhoon happened and which caused
avalanche and which makes it difficult extremely to construct road.
Art. 1268
When the debtor of a thing certain and determinate proceeds from a criminal offense, the debtor shall not be
exempted from the payment of its price, whatever may be the cause of the loss, unless the thing having been
offered by him to the person who should receive it, the latter refused without justification to accept it.
Art. 1268 is another instance where a fortuitous event does not exempt a debtor from liability.
The obligation subsists except when the creditor refused to accept the thing without justification, after it had
been offered to him.
Art. 1269
The creditor is given the right to proceed against the third person responsible for the loss. There is no need
for assignment of the debtor. The right is transferred by operation of the law.
It finds frequent application in insurance.
Section III
Condonation or Remission of Debt
Art. 1270
Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be
made expressly or impliedly.
Express condonation shall comply with the forms of donations.
Condonation or remission is the gratuitous abandonment by the creditor of his right against the debtor. It is a
form of donation.
Requisites:
1. It must be gratuitous
8. It must be accepted by the obligor
9. The parties must have capacity
10. It must not be inofficious
11. If made expressly, it must comply with the forms of donation.
Kind of remission
As to its extent
1. Complete- if it covers entire obligation
2. Partial- when it does not cover the entire obligation
As to its form
1. Express- made either verbally or in writing
3. Implied- when it can be inferred from conduct
4.
As to its date of effectivity
1. Inter vivos- effective during the lifetime of the donor
5. Mortis cause- effective upon death of the donor. It must comply with the formalities of will.
Art. 1271
The delivery of private instrument evidencing credit, made voluntarily by the creditor to the debtor, implies
the renunciation of the action which the former had against the latter.
If in order to nullify this waiver it should be claimed to be inofficious, the debtor and his heir may uphold it
by proving that the delivery of the document was made in virtue of payment of the debt.
Art. 1272
Whenever the private document in which the debt appears is found in possession of the debtor, it shall be
presumed that the creditor delivered delivered it voluntarily, unless the contrary is proved.
E.g. Promissory note in the possession of the debtor. The presumption is that debt is already paid by debtor.
If it is known that debtor has not yet paid the creditor, it is presumed that the obligation is remitted by the
creditor.
If it is not known how debtor came into possession of the promissory note, the presumption is that it was
voluntarily delivered by creditor, unless the contrary is proved.
Art. 1273
The renunciation of the principal debt shall extinguish the accessory obligations; but the waiver of the latter
shall leave the former in force.
Art. 1274
It is presumed that the accessory obligation of pledge has been remitted when the thing pledged, after its
delivery to the creditor, is found in the possession of the debtor, or of a third person who owns the thing.
Section IV
Confusion or Merger of Rights
Art. 1275
The obligation is extinguished from the time the characteristics of creditor and debtor are merged in the same
person.
Confusion or merger is the meeting in one person of the qualities of the creditor and debtor with respect to
the same obligation.
E.g. D owes C money. D executed a negotiable instrument in favor of C. C endorsed the instrument to F, F to
E. E endorsed the instrument to D.
Art. 1276
Merger which takes place in the person of the principal creditor or debtor benefits the guarantors.
Confusion which takes place in the person of any of the latter does not extinguish the obligation.
The merger which takes place in the person of the guarantor, while it extinguishes the guaranty, leaves the
principal obligation in force.
Art. 1277
Confusion does not extinguish a joint obligation except as regards the share corresponding to the creditor or
debtor in who the two characters concur.
