CHAPTER 4 SEC 2 Arts 1262 1269

SECTION 2 – LOSS OF THE THING DUE
(Arts. 1262-1269)
STUDY GUIDE :
1. When is a thing considered lost? [Art. 1189(2)]
 A thing is considered lost when it :
(a) perishes; (c) disappears in such a way that its

existence is unknown; or
(b) goes out of (d) disappears in such a way that it
commerce; can no longer be recovered.
2. As a general rule, when the obligation is to deliver a specific or

determinate thing, if the thing is lost or destroyed without the fault of
the debtor, or by reason of a fortuitous event, the obligation is
extinguished and the debtor will be released from any liability to the
creditor. (Art. 1262, par. 1; Art. 1174)
3. Enumerate the cases when the debtor is still liable despite the loss of
the thing due :
(a) When the specific or determinate thing is lost or destroyed due to

his fault, the debtor shall be liable for damages. (Art. 1262, par.
1; Art. 1170)
(b) When the determinate thing is lost or destroyed after he has
incurred in delay, the debtor shall also be liable for damages.
(Art. 1262, par. 1; Art. 1165, par. 3; Art. 1170)
(c) When, by law or stipulation, he is liable even for fortuitous events.
(Art. 1262, par. 2; Art. 1174)
(d) When the nature of the obligation requires the assumption of risk.
(Art. 1262, par. 2; Art. 1174)
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(e) When the obligation to deliver the determinate thing arises from a
crime (e.g., theft), unless the loss occurs after the creditor refused
to accept the thing without justification. (Art. 1268)
(f) When the generic or indeterminate thing object of the obligation is
lost or destroyed, the obligation is not extinguished under the
principle genus never perishes. (Art. 1263) The debtor is still
obliged to deliver a thing of the same kind. The creditor,
however, cannot demand a thing of superior quality, and neither
can the debtor deliver a thing of inferior quality. (Art. 1246)
4. What is partial loss?
(a) In a specific real obligation, there is partial loss when only a

portion of the thing is lost or destroyed, or when it suffers
depreciation or deterioration. (Example: When portion of the
body of a car is smashed, and needs repair and repainting, there
is depreciation of the car or partial loss of the thing.)
(b) In a personal obligation, there is partial loss when :
(b.1.) the prestation has become legally and physically

impossible. (Art. 1266)
(b.2.) the prestation has become morally impossible or
impracticable, due to change of certain conditions. (Art.
1267)
5. When is partial loss considered as total loss as to extinguish the

debtor’s obligation?
 In a real obligation, the partial loss of the thing may be

considered as a total loss if the loss is so material that the remaining
portion of the object is rendered insignificant or immaterial. In such a
case, the debtor will be released from liability, and his obligation
extinguished. (Art. 1264) This is, of course, subject to the general
qualification that the loss was not due to the fault of the debtor. (Arts.
1170 & 1174) (Example: The car was wrecked in an accident. The tires,
car seats, and stirring wheel are all that remain of the car. Here, while
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there is only partial loss because many parts were still recovered, the
same is deemed equivalent to total loss of the object of the obligation.)
 In a personal obligation, the equivalent provisions are Arts.

1266 and 1267. It is, however, imperative that in order that the obligation
of the debtor may be extinguished, the impossibility (Art. 1266) or
impracticability (Art. 1267) of the performance of the prestation should :
(a) take place after the establishment of the obligation; and

(b) be without fault on the part of the debtor.
6. What is the presumption when the thing due is lost while in the
possession of the debtor? When will the presumption not apply?
 When the thing due is lost while in the custody of the debtor,
the disputable presumption arises that the loss was due to the debtor’s
fault. This presumption, however, will not apply if the loss occurred
during a natural calamity. (Art. 1265)
APPLICATION/PROBLEMS:
1. On January 5, 2012, Arthur leased his 200 square-meter lot

located in San Pablo City to Irwin. It was agreed upon by the parties that
Irwin was to use the lot for his poultry farm for a period of two years or
until January 4, 2014. The monthly rental agreed upon was P20,000.
The parties’ lease contract also provided for a penal clause which
stipulated that should Irwin terminate the contract before the term
provided in the lease, Irwin will be liable for damages equivalent to all
unpaid rentals until January 4, 2014. On February 1, 2012, the City
Council of San Pablo passed an ordinance reclassifying the leased lot
from commercial to purely residential. The ordinance was to take effect
on July 1, 2012. Hence, on March 15, Irwin informed Arthur that he was
already turning over the property on June 30, 2012. At the same time,
Irwin updated his rental payments to Arthur until end of July 4, 2012.
Arthur is now claiming for damages corresponding to Irwin’s rental
payments from July 5, 2012 up to January 4, 2014 (P20,000 x 18
months), or a total of P360,000, as penalty for pre-terminating the lease.
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Irwin, however, refuses to pay alleging that he could no longer continue
with his poultry business on the leased lot in view of the passage of the
ordinance. Decide on the parties’ arguments?
2. On February 14, 2014, Je carnapped the Honda-CRV of Garry.

Three days after, he was apprehended by the police authorities and a
case for theft was filed against Je. On April 30, 2014, the court convicted
Je of the crime of theft and ordered him to return to Garry the Honda-CRV
within fifteen days from receipt of a copy of the court’s judgment in the
case, or until May 15, 2014. On May 10, 2014, the warehouse where Je
put the Honda-CRV in storage was gutted by fire. The car was
completely burned to ashes.
(a) Is Je’s obligation to deliver the car to Garry now extinguished?
(b) Assume that on May 15, 2014, Je tendered delivery of the car to
Garry but Garry refused to accept the car without justifiable reason.
On May 16, 2014, the car was completely burned to ashes. Will your
answer in the immediately preceding question be the same?
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CHAPTER 4 SEC 2 Arts 1262 1269

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SECTION 2 – LOSS OF THE THING DUE

1. When is a thing considered lost? [Art. 1189(2)]

 A thing is considered lost when it :

(a) perishes; (c) disappears in such a way that its

2. As a general rule, when the obligation is to deliver a specific or

(a) When the specific or determinate thing is lost or destroyed due to

4. What is partial loss?

(a) In a specific real obligation, there is partial loss when only a

(b) In a personal obligation, there is partial loss when :

(b.1.) the prestation has become legally and physically

5. When is partial loss considered as total loss as to extinguish the

 In a real obligation, the partial loss of the thing may be

 In a personal obligation, the equivalent provisions are Arts.

(a) take place after the establishment of the obligation; and

1. On January 5, 2012, Arthur leased his 200 square-meter lot

2. On February 14, 2014, Je carnapped the Honda-CRV of Garry.

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