OBLIGATIONS AND CONTRACTS: Article 1169

ARTICLE 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extra-judicially demands from them the fulfilment of their obligation.

However, the demand by the creditor shall not be necessary in order that delay may exist:

(1)       When the obligation or the law expressly so declares; or

(2)       When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or

(3)       When demand would be useless, as when the obligor has rendered it beyond his power to perform. In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfi lls his obligation, delay by the other begins. (1100a)

DELAY defined

a.    Ordinary Delay – is merely the failure to perform an obligation on time.

b.    Legal Delay or default or mora – is the failure to perform an obligation on time which failure, constitutes a breach of the obligation.

Kinds of Delay (mora)

1.   Mora solvendi – or the delay on the part of the debtor to fulfill his obligation (to give or to do) by reason of a cause imputable to him;

2.   Mora accipiendi – or the delay on the part of the creditor without  justifiable reason to accept the performance of the obligation; and

3.   Compensatio morae – or the delay of the obligors in reciprocal obligations (like in sale), ie., the delay of the obligor cancels the delay of the obligee, and the vice versa.

Requisites of delay or default by the debtor

There are three conditions that must be present before mora solvendi can exist or its effects arise:

(1)        failure of the debtor to perform his (positive) obligation on the date agreed upon;

(2)        Demand (not mere reminder or notice) made by the creditor upon the debtor to fulfil, perform, or comply with his obligation which demand, may be either judicial (when a complaint is filed in court) or extra-judicial (when made outside of court, orally or in writing); and

(3)        Failure of the debtor to comply with such demand.

Effects of Delay

          *Mora Solvendi – the following are the effects:

a.    The debtor is guilty of breach of the obligation;

b.    He is liable for interest in case of obligations to pay money (Art. 2209) or damages in other obligations. (Art. 1170.) In the absence of extrajudicial demand, the interest shall commence from the filing of the complaint; and

c.    He is liable even for a fortuitous event when the obligation is to deliver a determinate thing. (Art 1165, 1170). However, if the debtor can prove that the loss would have been resulted just the same even if he had not been in default, the court may equitably mitigate the damages

In an obligation to deliver a generic thing, the debtor is not relieved from liability for loss due to a fortuitous event. He can still be compelled to deliver a thing of the same kind or held liable for damages.

          *Mora Accipiendi – the effect are as follows:

a.    The creditor is guilty of breach of obligation;

b.    He is liable for damages suffered, if any, by the debtor;

c.    He bears the risk of loss of the thing due

d.   Where the obligation is to pay money, the debtor is not liable for interest from time of the creditor’s delay and

e.    The debtor may release himself from the obligation by the consignation of the thing or sum due.

*Compensation morae – the delay of the obligor cancels out the effects of the delay of the obligee and vice versa. The net result is that there is no actionable default on the part of both parties, such that as if neither one is guilty of delay. If the delay of one party is followed by that of the other, the liability of the first infractor shall be equitably tempered or balanced by the courts. If it cannot be determined which of the parties is guilty of delay, the contract shall be deemed extinguished and each shall bear his own damages.

Discussions:

Now, another word for delay under the civil code is MORA – and that is failure to perform the obligation in due time and usually if it an obligation arising from a Contract, that is with during the time specified or agreed upon the parties. If the obligation arises from law, then that is based on what is provided under the law except for payment of Income Tax because there is a specified date on when to pay your income tax.  Another example, if you will be notarizing a deed of absolute sale, there is a period within which to pay the capital gain stocks. Hinde na sinasabi ng batas na pumunta ka sa BIR and haggle with the BIR. Basta’t sinabi ng batas within 60 days, na-notarize na, you have to pay the capital gain stocks, otherwise you are considered in delay.

Now, what are the different kinds of Delay or Mora?

You have the Mora Solvendi (delay of the part of debtor), Mora Accipiendi (delay on the part of the creditor) and Compensatio Morae (delay on both part of the creditor and the debtor).

Ok, what is the rule regarding delay? The general rule “NO DEMAND, NO DELAY”.

But what are the exemptions? Which means even if there is no demand, debtor or obligor will still be considered in delay;

          Number 1: if the obligation expressly declares it or the law expressly declares it.

That is why you will notice, anybody who is renting an apartment or condo unit here, or  who has a contract of lease, if you have a contract of lease, look at the portion where in it provides for the payment of the rental and you will notice there is a phrase there “rental should be paid on or before the 5th day of each month without demand”.

That phrase “without demand” is an example of exemption. (again, if the obligation expressly so declares)

So if you are drafting a contract, and it involves a prestation to give, do not forget to insert the phrase “without need of demand”. Why? Because in relation to delay, the debtor can’t use that as a defense against the one you have drafted the contract. Because sabi nga ng batas, “No Demand, No Delay”.

Also under exemption number 1, if the law expressly so declares like the payment of the Income tax. Diba binabayaran natin yan, on or before April 15 of every year. (again this is without need of demand).

Question, when can a party in reciprical obligation be considered in delay ? (both parties are creditors and debtors to each other) The moment one of the parties fulfills his obligations, then it’s automatic that there is delay on the part of another party.