You are on page 1of 12

CANGCO v. MANILA RAILROAD CO.

FACTS:
1. Cangco, herein plaintiff, was an employee of the defendant in
this case, Manila Railroad Company.
2. Upon the occasion in question, plaintiff was returning home by
train from his daily labors. As the train drew up to the station,
plaintiff arose from his seat. As the train slowed down,
plaintiff stepped off, but one or both of his feet came in contact
with a sack of watermelons. As a result, his feet slipped from
under him and he fell violently on the platform.
3. The accident occurred between 7-8 oclock on a dark night as
the railroad station was lighted dimly, objects on the platform
were difficult to discern especially to a person emerging from a
lighted car.
4. Plaintiff sued the defendant company for damages.
5. The latter interposed the defense that the direct and proximate
cause of the injury suffered by the plaintiff was his own
contributory negligence in failing to wait until the train had
come to a complete stop before alighting.
ISSUE: Should Manila Railroad be held liable?
RULING:
Yes. The Supreme Court reversed the decision of the lower
court holding that it was important to note that the foundation of the
legal liability of the defendant was the contract of carriage, and that the
obligation to respond for the damage which plaintiff has suffered
arises, if at all, from the breach of that contract by reason of the failure
of defendant to exercise due care in its performance. That was to say,
its liability was direct and immediate, differing essentially, in legal
viewpoint from that presumptive responsibility for the negligence of
its servants, imposed by article 1903 of the Civil Code, which can be
rebutted by proof of the exercise of due care in their selection and
supervision. Article 1903 of the Civil Code is not applicable to
obligations arising ex contractu, but only to extra-contractual
obligations, or to use the technical form of expression, that article
relates only to culpa aquiliana and not to culpa contractual.

Manresa (vol. 8, p. 67) in his commentaries upon articles 1103


and 1104 of the Civil Code, clearly points out this distinction, which
was also recognized by this Court in its decision in the case of Rakes
vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting
upon article 1093 Manresa clearly points out the difference between
"culpa, substantive and independent, which of itself constitutes the
source of an obligation between persons not formerly connected by
any legal tie" and culpa considered as an accident in the performance
of an obligation already existing . . . ."
On the railroad companys defense of contributory negligence
on the part of Cangco, the Court held that the plaintiff was ignorant of
the fact that the obstruction which was caused by the sacks of melds
piled on the platform existed. Moreover, the place was dark or dimly
lighted. Thus, there was failure on the part of the defendant to afford
to its passengers facilities for safe egress from its trains.

RAKES v. ATLANTIC GULF AND PACIFIC CO.


FACTS:
1. Rakes was a black man working as a laborer for Atlantic Gulf
in the early 1900s.
2. One day, they were working in the companys yard and they
were transporting heavy rails using two cars (karitons?); each
car carrying the opposite ends of the rails.
3. The cars were pulled by rope from the front and other workers
are pushing the cars from behind.
4. There were no side guards installed on the sides of the cars but
the rails were secured by ropes. The tracks where the cars move
were also weakened by a previous typhoon.
5. It was alleged that Atlantics foreman was notified of said
damage in the tracks but the same were left unrepaired.
6. While the cars were being moved and when it reached the
depressed portion of the track, and while Rakes was beside one
of the cars, the ropes gave in and the rails slipped thereby
crushing his leg and causing it to be amputated.
7. Rakes sued Atlantic Gulf and he won; he was awarded 5,000
pesos for damages ($2,500).
8. Atlantic assailed the decision of the lower court alleging that
they specifically ordered their workers to be walking only
before or after the cars and not on the side of the cars because
the cars have no side guards to protect them in case the rails
would slip.
9. Atlantic also alleged that Rakes should be suing the foreman as
it was him who neglected to have the tracks repaired; that
Rakes himself was negligent for having known of the
depression on the track yet he continued to work.
ISSUE: Whether or not Atlantic is civilly liable.
HELD: Yes. Rakes as per the evidence could not have known of the
damage in the track as it was another employee who swore he notified
the foreman about said damage.

Further, his lack of caution in continuing to work is not of a


gross nature as to constitute negligence on his part. On the other hand
though, Rakes contributory negligence can be inferred from the fact
that he was on the side of the cars when in fact there were orders from
the company barring workers from standing near the side of the cars.
His disobedient to this order does not bar his recovery of damages
though; the Supreme Court instead reduced the award of damages
from 5,000 pesos to 2,500 pesos.
In this case, the SC also elucidated the two kinds of culpa
which are:
Culpa as substantive and independent, which on account of its
origin arises in an obligation between two persons not formerly bound
by any other obligation; may be also considered as a real source of an
independent obligation (extra-contractual or culpa aquiliana).
Culpa as an incident in the performance of an obligation which
cannot be presumed to exist without the other, and which increases the
liability arising from the already existing obligation (contractual or
culpa contractual).

TUGADE v. CA

RATIO:

FACTS
1. At about 9:15 o'clock in the morning of January 4, 1972,
Rodolfo [Rayandayan] was driving a Holden Kingswood car
(the [Holden] car), bearing plate No. 52-19V (L-Rizal '71),
owned by the Sta. Ines Mining Corp. and assigned for use of its
manager, on Ayala Avenue in Makati, Rizal, going northwards.
2. At the intersection of Ayala Avenue and Makati Avenue,
Rayandayan was going to turn left on Makati Avenue but he
stopped to wait for the left turn signal and because a jeep in
front of him was also at a stop.
3. While in that stop position, the Holden car was bumped from
behind by Blue Car Taxi, bearing Plate No. 55-71R (TX-QC
'71) and driven by Inocencio Tugade causing damage to the
Holden car, the repairs of which cost P778.10.
4. Tugade was then charged with Reckless Imprudence Resulting
in Damage to Property. He pleaded not guilty and while
admitting that the collision was caused by faulty brakes of his
taxicab, sought to exculpate himself with the explanation that
this fault could not and should not be traced to him.
5. After trial, the lower court held Tugade guilty beyond
reasonable doubt of Reckless Imprudence resulting in damage
to property and sentenced him to a fine of 1k and subsidiary
imprisonment in case of insolvency and actual damages of
P778.10
6. Tugade appealed the decision reiterating that `the
malfunctioning of the brakes at the time of accident was due to
a mechanical defect which even the exercise of due negligence
of a good father of a family cannot have prevented.
7. CA affirmed TCs decision in toto.
8. Hence this petition.

TORTS AND DAMAGES; FORTUITOUS EVENT; MISHAP


CAUSED BY DEFECTIVE BRAKES NOT FORTUITOUS IN
CHARACTER.

ISSUE: Whether or not the faulty brakes of the taxicab constitutes


caso fortuito?
HELD: No, it does not.

An essential element of a caso fortuito is the occurrence of


some extraordinary circumstance independent of the will of the
obligor, or of his employees.

This element is lacking in the present case. It is not suggested that the
accident in question was due to an act of God or to adverse road
conditions which could not have been foreseen. As far as the record
shows, the accident was caused either by defects in the automobile or
else through the negligence of its driver. This is not a caso fortuito
which would call for an acquittal of the driver.JUNTILLA v.
FONTANAR
FACTS:
1. Herein plaintiff was a passenger of the public utility jeepney on
course from Danao City to Cebu City.
2. The jeepney was driven by driven by defendant Berfol Camoro
and registered under the franchise of Clemente Fontanar.
3. When the jeepney reached Mandaue City, the right rear tire
exploded causing the vehicle to turn turtle.
4. In the process, the plaintiff who was sitting at the front seat was
thrown out of the vehicle.
5. Plaintiff suffered a lacerated wound on his right palm aside
from the injuries he suffered on his left arm, right thigh, and on
his back.
6. Plaintiff filed a case for breach of contract with damages before
the City Court of Cebu City.
7. Defendants, in their answer, alleged that the tire blow out was
beyond their control, taking into account that the tire that
exploded was newly bought and was only slightly used at the
time it blew up.
ISSUE: Whether or not the tire blow-out is a fortuitous event?

HELD: No. In the case at bar, the cause of the unforeseen and
unexpected occurrence was not independent of the human will. The
accident was caused either through the negligence of the driver or
because of mechanical defects in the tire. Common carriers should
teach drivers not to overload their vehicles, not to exceed safe and
legal speed limits, and to know the correct measures to take when a
tire blows up thus insuring the safety of passengers at all
tines.AUSTRIA v. CA
FACTS:
1. Maria G. Abad received from Guillermo Austria a pendant with
diamonds to be sold on a commission basis or to be returned on
demand.
2. While walking home, the purse containing the jewelry and cash
was snatched by two men.
3. A complaint of the incident was filed in the Court of First
Instance against certain persons.
4. Abad failed to return the jewelry or pay for its value despite
demands made by Austria.
5. Austria brought an action against the Abad spouses for the
recovery of the pendant or of its value and damages.
6. Abad spouses set up the defense that the alleged robbery had
extinguished their obligation.
ISSUE: Should the Abad spouse be held liable for the loss of the
pendant?
HELD: No. The Court ruled that the exempting provision of Article
1174 of the Civil Code is applicable in the case. It is a recognized
jurisdiction that to constitute a caso fortuito that would exempt a
person from responsibility, it is necessary that
a. The event must be independent of the human will or of the
obligors will;
b. The occurrence must render it impossible for the debtor to
fulfill the obligation in a normal manner;
c. The obligor must be free of participation in, or aggravation of,
the injury to the creditor.

To avail of the exemption granted, it is not necessary that the


persons responsible for the event should be found or punished. It is
sufficient that to unforeseeable event which is the robbery took place
without concurrent fault or negligence on the part of the obligor which
can be proven by preponderant evidence. It was held that the act of
Maria Abad in walking home alone carrying the jewelry was
not negligent for at that time the incidence of crimes was not high.
VASQUEZ VS. COURT OF APPEALS
FACTS:
1. MV Pioneer Cebu left the port of Manila and bounded for
Cebu. Its officers were aware of the upcoming typhoon Klaring
that is already building up somewhere in Mindanao.
2. There being no typhoon signals on their route, they proceeded
with their voyage. When they reached the island of Romblon,
the captain decided not to seek shelter since the weather was
still good.
3. They continued their journey until the vessel reached the island
of Tanguingui, while passing through the island the
weather suddenly changed and heavy rains fell.
4. Fearing that they might hit Chocolate island due to zero
visibility, the captain ordered to reverse course the vessel so
that they could weather out the typhoon by facing the strong
winds and waves.
5. Unfortunately, the vessel struck a reef near Malapascua Island,
it sustained a leak and eventually sunk.
6. The parents of the passengers who were lost due to that
incident filed an action against Filipinas Pioneer Lines for
damages.
7. The defendant pleaded force majeure but the Trial Court ruled
in favor of the plaintiff. On appeal to the Court of Appeals, it
reversed the decision of the lower stating that the incident was
a force majeure and absolved the defendants from liability.
ISSUE: Whether of not Filipinas Pioneer Lines is liable for damages
and presumed to be at fault for the death of its passenger?
HELD:
The Supreme Court held the Filipinas Pioneer Lines failed to

observe that extraordinary diligence required of them by law for the


safety of the passengers transported by them with due regard for all
necessary circumstance and unnecessarily exposed the vessel to tragic
mishap.
Despite knowledge of the fact that there was a typhoon, they
still proceeded with their voyage relying only on the forecast that the
typhoon would weaken upon crossing the island of Samar. The defense
of caso fortuito is untenable. To constitute caso fortuito to exempt a
person from liability it necessary that the event must be independent
from human will, the occurrence must render it impossible for the
debtor to fulfill his obligation in a normal manner, the obligor must be
free from any participation or aggravation to the injury of the creditor.
Filipina Pioneer Lines failed to overcome that presumption o
fault or negligence that arises in cases of death or injuries to
passengers.

PARKS V. PROVINCE OF TARLAC (P.114)


A condition which cannot be complied with except after
giving effect to the donation is not a condition precedent.

FACTS:
In 1910, Concepcion Cirer and James Hill donated parcels of
land to the municipality of Tarlac on the condition that it be
used absolutely and exclusively for the erection of a central
school and public parks, the work to commence within six
months. The president of the municipality of Tarlac accepted
and registered the donation.
In 1921, Cirer and Hill sold the same property to George L.
Parks.
Later on the, the municipality of Tarlac transferred their rights
in the property to the Province of Tarlac.
Parks filed a complaint seeking the annulment of the
donation and asking that he be declared the absolute owner
of the property. Parks allege that the conditions of the
donation were not complied with.

ISSUE:
Whether or not the donation was coupled with a condition
precedent? W/N the action to revoke has prescribed?

HELD:
No. The condition to erect a school within six months is not a
condition precedent. The characteristic of a condition
precedent is that the acquisiito of the right is not effected
while said condition is mot complied with or is not deemed
complied with. Meanwhile nothing is acquired and there is
only an expectancy of a right. Consequently, when a
condition is imposed, the compliance of which cannot be
effected except when the right is deemed acquired, such

condition cannot be a condition precedent. In the present


case the condition that a public school be erected and a
public park be made of the donated land could not be
complied with except after giving effect to the donation.
The action to revoke the donation has prescribed. The
prescriptive periods are: 5 years for the revocation by the
subsequent birth of children, 1 year if by reason of
ingratitude. If no special period is prescribed, 10 years, for an
onerous donation following the law of contracts and general
rules on prescriptions. The donation was made in 1910, the
cause of action accrued in 1911, while the action to revoke
was filed 1924, twenty three years later.

Tomas OSMEA, plaintiff & appellee, vs. Cenona


RAMA, defendant & appellant [1909] (P.118)
Nov. 15, 1890: Rama executed & delivered a contract to
Victoriano Osmea, w/c contained the ff: (contract #1)
that Rama received P200.00 from the Osmea
said debt will be paid in sugar in Jan/Feb 1891 at the price of
sugar upon delivery in Osmeas warehouses + interest of
half a cuartillo per month on each peso beginning on this
date until debt has been paid
if Rama cant pay in full, a balance shall be struck, showing
the amount outstanding at the end of each June w/interest &
balance as may be outstanding against Rama shall be
considered as capital w/c shell pay in sugar + interests
Rama will sell all the sugar that she may harvest to Osmea
guarantee for the debt: all of Ramas present & future
property (pledge as security) and house w/tile roof & stone
floor where she lives in (special security)
Osmea entitled to make claim against Rama upon the
expiration of the term stated in the contract

Oct. 27, 1891: Rama asked for an additional loan from


Osmea amounting to P70.00 but
she mentioned in the contract (contract #2) that P50.00 of
said amount was loaned to Don
Evaristo Peares and that said debt will be paid in sugar on
Jan. 1892 according to the conditions of contract #1.
Subsequently, Osmea died and during the partition of his
estate, said contracts became the property of Agustina
Rafols, one of his heirs. Rafols then claimed her right &
interest in the contracts.

March 15, 1902: Tomas Osmea presented the contracts to


Rama who acknowledged her responsibility by issuing an
endorsement w/c provided that if the house that she lived in
is sold, she will pay her indebtedness to Tomas. However,
Rama still failed to pay.
June 26, 1906: Tomas filed this case w/the CFI of Cebu
alleging the aforementioned incidents w/the prayer for a
judgment for the amount due on said contracts.
Ramas defense: general denial & prescription
CFI: decided in favor of Osmea & ordered Rama to pay:
P200 + 18 percent interest per annum from Nov. 15, 1890
(for contract #1)
P20 + 18 percent interest per annum from Oct. 27, 1891
until sums were paid (only P20 was demanded despite the
P70 loan because it was proven that P50 was borrowed by
Peares)
Issue: WON the condition imposed by Rama in her March 15,
1902 endorsement is valid.
NO
Ratio:
If this can even be regarded as a condition, its a condition
that depended upon the debtors exclusive will & was
therefore void (CC Art. 1115).
This endorsement is tantamount to an acknowledgement of
her obligation & thus it would be sufficient to prevent the
statute of limitation from barring the action upon the original
contract. Meaning, action has not yet prescribed.
Holding: CFI affirmed.

Song Fo and Co., vs. Hawaiian-Philippine Co. [47 SCRA 821


G.R. No. 23769. September 16, 1925] (p. 139)

Facts: Hawaiian-Philippine Co. got into a contract with Song


Fo & Co. where it would deliver molasses to the latter.
Hawaiian-Philippine Co. was able to deliver 55,006 gallons of
molasses before the breach of contract.
SFC filed a complaint for breach of contract against HawaiianPhilippine Co. and asked P70,369.50. Hawaiian-Philippine Co.
answered that there was a delay in the payment from Song
Fo & Co. and that Hawaiian-Philippine Co. has the right to
rescind the contract due to that and claims it as a special
defense.
The judgment of the trial court condemned HawaiianPhilippine Co. to pay Song Fo & Co. a total of P35,317.93,
with legal interest from the date of the presentation of the
complaint, and with costs.
Issue:
(1) Did Hawaiian-Philippine Co. agree to sell 400,000 gallons
of molasses or 300,000 gallons of molasses?
(2) Had Hawaiian-Philippine Co. the right to rescind the
contract of sale made with Song Fo & Co.?
(3) On the basis first, of a contract for 300,000 gallons of
molasses, and second, of a contract imprudently breached by
Hawaiian-Philippine Co., what is the measure of damages?
Held:

(1) Only 300,000 gallons of molasses was agreed to by


Hawaiian-Philippine Co. as seen in the documents presented
in court. The language used with reference to the additional
100,000 gallons was not a definite promise.
(2) With reference to the second question, doubt has risen as
to when Song Fo & Co. was supposed to make the payments
for the delivery of molasses as shown in the documents
presented by the parties.
The Supreme Court said that Hawaiian-Philippine Co. does
not have the right to rescind the contract. It should be noted
that the time of payment stipulated for in the contract should
be treated as of the presence of the contract. There was only
a slight breach of contract when the payment was delayed
for 20 days after which Hawaiian-Philippine Co. accepted the
payment of the overdue accounts and continued with the
contract, waiving its right to rescind the contract. The delay
in the payment of Song Fo & Co. was not such a violation for
the contract.
(3) With regard to the third question, the first cause of action
of Song Fo & Co. is based on the greater expense to which it
was put in being compelled to secure molasses from other
sources to which Supreme Court ruled that P3,000 should be
paid by Hawaiian-Philippine Co. with legal interest from
October 2, 1923 until payment.
The second cause of action was based on the lost profits on
account of the breach of contract. Supreme Court said that
Song Fo & Co. is not entitled to recover anything under the
second cause of action because the testimony of Mr. Song
Heng will follow the same line of thought as that of the trial
court which in unsustainable and there was no means for the

court to find out what items make up the P14,000 of alleged


lost profits.

PNB V. LOPEZ VITO (FULL TEXT decision only )


Corpus Juris 41, page 848, enunciates the following doctrine:
"In case of an agreement between the parties to the effect
that the entire debt or may, at the election of the mortgagee,
become due upon a partial default in payment of the
mortgage debt, or an installment thereof, foreclosure may be
had for the entire amount upon such default." In the case of
Phillips vs. Taylor (96 Alabama, 426), it was held: "Where, by
the terms of a mortgage given to secure the payment may
declare the entire debt due on default in the payment of any
of the notes, on such default before the maturity of all the
notes according to their terms, the mortgage may foreclose
for the entire debt, or he may proceed for a present
foreclosure only for the notes then due according to their
tenor; but he cannot maintain a bill filed, not for a present
foreclosure at all, but for the appointment of a receiver to
take charge of the mortgaged property and collect the rents
pending the maturity of all the notes, and for a foreclosure
only when all the notes shall have matured." In Biedka vs.
Ashkenas (197 New York Supplement, 851), it was held:
"Where a mortgage provided that, on default of payment of
any installment of principal or interest for 30 days after
demand, the whole of the principal sum should become due,
but the accompanying bond contained no such provision,
there was no inconsistency between the mortgage and the
bond, and on default in payment of an installment the entire
balance of the principal became due." The same legal
doctrine was upheld in McLean vs. Presley's Adm'r. (56
Alabama, 211): "Where the condition of a mortgage, given to
secure the payment of several promissory notes, falling due
at different times, authorizes a sale of the mortgaged lands
on default being made in the payment of 'the said promissory
notes as they fall due,' the mortgagor is in default so soon as
he fails to pay any of the notes at maturity; and the
mortgagee may then sell the entire premises, not being
divisible without impairment of their market value; and he
may retain, out of the proceeds of sale, a sufficient amount to
pay the notes not then due." In Phipps vs. Lopinsky (97 West
Virginia, 457), the rule of law enunciated in the foregoing
cases was confirmed. In this case it was said: "Default having
been made in the payment of one of the notes secured by
the trust deed, and there being an accelerating clause in the

trust whereby all the remaining notes became due, the court
could enter a decree for the full amount of the mechanic's
lien and of the trust lien, and order a sale of the property to
satisfy the decree." And the District Court of Montana, in the
case of First Trust & Savings Bank vs. Bitter Root Valley Irr.
Co. (251 Federal Reporter, 320), held: "Where an irrigation
company's trust deed to secure its bond was an entire
contract, to be performed in installments, all bonds would
become due upon a default in an installment."
Wherefore, the judgment appealed from must be as it is
hereby, modified, and it is declared that, as the mortgage
installments in question have matured may collect by the
failure of the mortgagor to pay, the mortgagee may collect
the whole debt, with interest thereon, including the
P2,844.88 and the interest upon the last annual installment,
and to proceed to the foreclosure of the mortgage in
accordance with law, without prejudice to the mortgaged
lands, in favor of the North Negros Sugar Co., Inc. Without
special pronouncement as to costs. So ordered.
Avancea, C.J., Johnson, Street,
Romualdez and Villa-Real, JJ., concur.

Malcolm,

Ostrand,

GONZALES V. JOSE (FULL TEXT SYLLABUS ONLY)


SYLLABUS
1. PROMISSORY NOTES WITHOUT PERIOD; ACTION TO FIX
PERIOD; PRESCRIPTION. The two promissory notes are
governed by article 1128 of the Civil Code because under the
terms thereof the plaintiff intended to grant the defendant a
period within which to pay his debts. As the promissory notes
do not fix this period, it is for the court to fix the same.
(Eleizegui v. Manila Lawn Tennis Club, 2 Phil., 309; Barretto v.
City of Manila, 7 Phil., 416; Floriano v. Delgado, 11 Phil., 154;
Levy Hermanos v. Paterno, 18 Phil., 353.) The action to ask
the court to fix the period has already prescribed in
accordance with section 43 (1) of the Code of Civil Procedure.
this period of prescription is ten years, which has already
elapsed from the execution of the promissory notes until the
filing of the action on June 1, 1934. The action which should
be brought in accordance with article 1128 is different from
the action for the recovery of the amount of the notes,
although the effects of both are the same, being, like other
civil actions, subject to the rules of prescription.
DECISION
We hold that the promissory notes are governed by article
1128 because under the terms thereof the plaintiff intended
to grant the defendant a period within which to pay his debts.
As the promissory notes do not fix this period, it is for the
court to fix the same. (Eleizegui v. manila Lawn Tennis Club, 2
Phil., 309; Barretto v. city of Manila, 7 Phil., 416; Floriano v.
Delgado, 11 Phil., 154; Levy Hermanos v. Paterno, 18 Phil.,
353.) The action to ask the court to fix the period has already
prescribed in accordance with section 43 (1) of the Code of
Civil Procedure. This period of prescription is ten years, which
has already elapsed from the execution of the promissory
notes until the filing of the action on June 1, 1934. The action
which should be brought in accordance with article 1128 is
different from the action for the recovery of the amount of
the notes, although the effects of both are the same, being,
like the civil actions, subject to the rules of prescription.
The action brought by the plaintiff having already prescribed,

the appealed decision should be reversed and the defendant


absolved from the complaint, without special pronouncement
as to the costs in both instances. So ordered.
Avancea, C.J., Villa-Real, Abad Santos, Diaz, Laurel and
Concepcion, JJ., concur.

SONG FO V. ORIA (FULL TEXT DECISION ONLY)


CARSON, J.:
Under these circumstances we are of opinion and so
hold that Song Fo & Co. were in no wise responsible
under the contract for the loss of the launch without
insurance and that the contentions of the defendant
in this regard furnish no defense to the action against
him for the purchase agreed upon in the deed of sale.
Coming now to examine the contentions of the
plaintiffs on their appeal, we think that the trial judge
erred in declining to render judgment in their favor for
the total amount of the purchase price of the launch.
He appears to have relied upon the provisions of
article 1125 of the Civil Code but to have overlooked
the co-related provisions of article 1129 of the same
code.
These articles are as follows:
1125. Obligations, the fulfillment of which has been
fixed for a certain day, are exigible only when such
day arrives.
By a certain day is understood one which shall
necessarily arrive, even when the date of arrival is
unknown.
When the uncertainty consists in the arrival or nonarrival of the day, then the obligations is conditional
and shall be controlled by the proceeding section.
1129. The debtor shall lose all right to profit by the
term:
1. When, after the obligation has been contracted, it
appears that he is insolvent, unless he gives security
for the debt.

2. When he does not give to the creditor the security


he is bound to give.
3. When by his own acts, he acts, he has reduced such
security after giving it, or when it disappears through
an unforeseen event (vis major), unless it is
immediately substituted by a new one equally safe.
The security for the payment of the purchase price of
the launch itself having disappeared as a result of an
unforeseen event (vis major), and no other security
having been substituted therefor, the plaintiffs were
clearly entitled to recover judgment not only for the
installments of the indebtedness due under the terms
of the contract at the time when the instituted their
action, but also for all installments which, but for the
loss of the vessel had not matured at that time.
The judgment entered in the court below should be
modified by substituting for so much thereof as
provides for the recovery by the plaintiff of P6,000
together with interest of November 1911, a provision
for the recovery of P16,500 together with interest at
the rate of ten per centum per annum, from the 15th
day of November, 1911, and thus modified, the
judgment appealed from should be affirmed with the
costs of this instance against the appellant. So
ordered.
Arellano, C.J., Torres, Johnson, Moreland, Trent and Araullo, JJ.,
concur.

You might also like