Section 2: Loss of the Thing DueLoss:

1. Perishes2. Goes out of commerce3. Disappears in such a way that its existence is

unknown or it cannot be recovered

Article 1262: Effect of Loss in Determinate Obligation to Give

Requisites:1. The thing which is lost must be determinate2. The thing is lost without any fault of the debtor

(if with fault: the obligation is not extinguished; it is simply converted into an obligation to indemnify the creditor for damages.)

3. The thing is lost before the debtor has incurred in delay

GEN RULE: If the loss is due to a fortuitous event, the debtor cannot be held liable. (obligation is extinguished)

EXCEPTION:1. By law, the debtor is liable even for fortuitous

event2. By stipulation of the parties3. Nature of the obligation requires assumption of

risk4. When the loss of the thing is due partly to the

fault of the debtor5. Debtor has incurred in delay6. When the debtor promised to deliver the same

thing to two or more persons who do not have the same interest

7. When the obligation to deliver arises from a criminal offense

8. When the obligation is generic

Article 1263: Effect of loss in Generic Obligation to Give

- The loss and destruction of anything of the same kind does not extinguished the obligation

- A SORT OF EXCEPTION: the object is a particular class or group with specific or determinate qualities

o Cattles in a particular ranch

Article 1264. Effect of Partial Loss- Shall depend upon the sound discretion of the

court

Article 1265. Presumption if Thing is loss in the debtor’s possession (determinate)

- Disputable presumption that the loss was due to his fault; the obligation is not extinguished that he is still liable for damages

EXCEPTION: Presumption does not apply in case of earthquake, flood, storm or other natural calamity

Article 1266. Effect of Impossibility of Performance in Obligation to Do and Not to Do

TO DO:- impossibility must have occurred after the constitution of the obligation

- TWO CAUSES:o May arise from the law o Physical impossibility

- EFFECT: without the fault of the debtor the obligation is extinguished

NOT TO DO:- Rules may still apply

Article 1267. Effect of Relative Impossibility

GEN RULE: impossibility of performance of an obligation to do shall release the obligor

EXCEPTION: when the service has become so difficult as to be manifestly beyond the contemplation of the parties, the court should be authorized to release the obligor in whole or part

Article 1268. Obligation Arises from Criminal Offense

GEN RULE: When 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 for the loss

EXCEPTION: the thing having been offered by him to the person who should receive it, the latter refused without justification

Article 1269. Effect of Extinguishment of Obligation

- The creditor shall have all the rights of action against the third persons by reason of lost

- EX: Insurer and creditor

Section 3: Condonation or Remission of the Debt

Remission- is an act of liberality by virtue of which the oblige, without receiving any price or equivalent, renounces the enforcement of the obligation, as a result of which it is extinguished in its entirely or in that part or aspect of the same to which the remission refers.

Requisites:1. It must be gratuitous2. Must be accepted by the obligor3. Obligation must be demandable

Kinds:1. Express or implied2. Total or partial3. Inter vivos or mortis causa

Article 1270. Gratuitous and Necessity of Acceptance- Creditor must not have received any price of

equivalent- There must be acceptance from the debtor

Extent of Remission:- Governed by inofficious donations (contrary to

moral duty)- Heirs of creditor-donor can proceed against the

debtor-donee for the reduction or even suppression of the remission.

Void Remissions:1. If the estate of the creditor consists of credits,

and there is a remission or condonation of all of such credits, it is evident that there would be a violation of the rule

2. If the remission comprehends future debts- lacks the requisite of demandability and contrary to the precept that donations cannot comprehend future property

Article 1271-1272. Effect of Delivery of Evidence of Credit to Debtor

Requisites:1. That the document evidencing the credit must

have been delivered by the creditor to the debtor

2. That the document must be a private document3. That the delivery must be voluntary

Presumption: whenever the private document evidencing the credit is found in the possession of the

debtor there arises a presumption that the creditor delivered it to the debtor

Article 1273-1274. Effect of Remission

Gen Rule: Effect of remission is to extinguish the obligation in its entirety or in the part or aspect thereof to which the remission refers

Exceptions: 1. Joint Obligation- the remission can only affect

the share of the creditor who makes the remission and the corresponding share of the debtor in whose favor the remission is made

2. Solidary- Article 1215, 1219, 1220 will applya. Liable to the others for the share in the

obligationb. Remission made by the creditor of the

share which affects one of the solidary debtor does not release the latter from his responsibility towards the co-debtors

c. Remission of the whole obligation, obtained by one of the solidary debtors, does not entitle him to reimbursement from his co-debtors

GEN RULE: if the remission refers to the principal obligation, all the accessory obligations are extinguished

EXCEPTION: remission refers to the accessory obligations, the principal obligation continues to subsists

RULE IN PLEDGE

GEN RULE: 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 a third person who own the thing.