MODULE 3
1. What are the remedies of a creditor in case of breach?
- We have two types of remedies in case of breach, primary remedies and subsidiary.
A. Primary Remedies:
1) Action for performance
a) Action for specific performance:
It is inclined with obligation to give a specific thing. If the object to be
delivered is a determinate one, the creditor may oblige the debtor to
make the delivery. (Article 1165 Par 1)
b) Action for substituted performance
It is inclined with obligation to give a generic thing. If the object to be
delivered is an indeterminate, he may request that the obligation to
be complied with the expense of the debtor. If the creditor insists on
the performance, debtor cannot just pay the damages instead.
c) Action for substituted performance or undoing of poor work
It is inclined with obligation to do. The same rule in Article 1167 must
be observed even if he does it in the aspect of contravening the tenor
of the obligation.
d) Action for undoing
It is inclined with obligation to not do. When the obligor does an
obligation that consists in not doing and it was forbidden for him to
do, he must also undo it for his expense. (Article 1168)
2) Action for damage
- As stated in Article 1170 “Those who in the performance of their obligation
are guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.” Meaning, anyone who
caused disruption of delivering a performance of their own obligation is
responsible to the damages incurred.
3) Action for rescission
- In action for rescission or cancellation, there is a suggestion with power to
revoke obligation in reciprocal agreements, which happens in case that one
of the obligors didn’t comply what is obligated from him. (Article 1191) In
which, the injured party may choose either to cancel or fulfill the obligation,
retaining the payment of the incurred damages; he then can also pursue the
payment even though he chose fulfillment.
- The court must order the rescission that is claimed unless there is a fair cause
in authorizing the period adjusting.
- In case that both of the parties violated the obligation, the liability of the one
who broke first shall be justly tempered by the court. When no one was
determined on who broke first, same shall be responsible for his own
damage.
- This only applies to reciprocal or mutual agreement of obligations.
- Effects of the said rescission are destruction of juridical tie as if it doesn’t
exist in the first place and mutual compensation.
B. Subsidiary Remedies of Creditor:
1) Accion Subrogatoria
- The creditor whose claims has not yet been fully fulfilled may go after the
debtor’s debtor. The creditors can also go after his possession with
obligation, including its rights. They may question the acts of the debtor in
case of defraudment.
- The requisites of accion subrogatoria is that the creditor must have an
interest in the right not only because of credit, but also insolvency or a state
which one was unable to pay bills. Negligent inaction of the debtor towards
his right may endanger the claim of the creditor.
- Exceptions to accion subrogatoria includes inherent rights of debtor, article
772, and sec 13, rule 19, rules of court.
2) Accion Pauliana
- Creditor files an action in court for the cancellation of contracts by debtor.
- Requisites of accion pauliana includes plaintiff asking for rescission has a
credit into giving something towards the other party voluntarily, debtor
making succeeding contract, act being questioned is an act of deception.
3) Accion Pauliana (other specific remedies)
- Talks about the right of a person to go against another who is not involved
that of the contract.
2. Discuss the concept of fortuitous event.
- Fortuitous event is something that inevitably happens. It may be foreseen but it is
hard to resist or go against it.
- Also includes accidents which are unavoidable even though tried to be intervened by
a human element.
A. Act of God:
- It is an event or phenomena caused by nature, for example: floods, storm,
earthquake.
B. Act of Man:
- It is an act made by man, for example: invasion, attacks, robbery; something
that cannot be easily resisted.
