Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.
Artikulo 1171. Ang mga responsibilidad mula sa pandaraya ay maaaring hingin sa lahat ng obligasyon. Kahit anong pagtalikdan sa aksyon sa pandaraya sa hinaharap ay walang bisa.
According to time of commission, fraud may be past or future. The fraud referred to in this article is the fraud that refers to the fulfillment of an obligation rather than the fraud which is the origin of the obligation.
Two different articles refer to two different frauds or dolos:
- Dolo causante or causal fraud (Article 1338) is a deception of a serious character employed by one party and without which the other party would not have entered into a contract.
This is when fraud used to induce a person to agree to a contract. This kind of fraud is a ground for annulment of the contract plus damages
Example:
There was an ad offering work to female college graduates to work as English tutors to rich Hong Kong families but in truth that was recruitment to work in a red light district or pleasure district.
- Dolo incedente or incidental fraud (Article 1144) those which are not serious in character and without which the other party would still have entered into the contract.
Example:
Anne enter into a contract to deliver 500 cavans of rice to Noel with a price per cavan of 1,300 pesos, Anne delivered 400 cavans but withheld the delivery of the remaining, stating that the price went up and priced the rice to 1,600 per cavan. The fraud here is dolo incidental because it is committed to the existing contract.
Case:
MARIANO C. PAMINTUAN vs.
COURT OF APPEALS and YU PING KUN CO., INC
G.R. No. L-26339. December 14, 1979.
AQUINO, J.
Facts:
Mariano Pamintuan was in an agreement with Yu Ping Kun Co., Inc. to sell plastic sheetings imported by the former from Japan through a barter license he had for the export of white flint corn to Toyo Menka Kaisha, Ltd. While the plastic sheetings were arriving in Manila, Pamintuan informed the President of Yu Ping Kun Co., Inc. that he was in dire need of cash with which to pay his obligations to the Philippine National Bank.
Consequently, the two parties fixed a price to the plastic sheetings regardless of the kind, quality or actual invoice value thereof and based it on dividing the total price of the shipment with its aggregate quantity. After the shipments arrived in Manila (4 shipments in total), Pamintuan only delivered a portion or 224, 150 yards of the expected 339, 440 yards of plastic sheetings he received to Yu Ping Kun’s warehouse.
Furthermore, he delivered plastic sheetings of inferior quality that were valued at a lesser price than what Yu Ping Kun had paid.
Subsequently, Yu Ping Kun filed an action to enforce a provision in their contract of sale which states that any violation of the stipulations of that contract would entitle the aggrieved party to liquidated damages in the amount of 10, 000 Php from the offending party.
Issue:
Ruling:
Yes, the petitioner is guilty of fraud and should pay the damages to the defendant.
Pamintuan’s contention cannot be sustained because the second sentence of article 1226 itself provides that “nevertheless, damages shall be paid if the obligor is guilty of fraud in the fulfillment of the obligation”. “Responsibility arising from fraud is demandable in all obligations” (Art. 1171).
The Court also found that Pamintuan was guilty of fraud because (1) he was able to make the company agree to change the manner of paying the price by falsely alleging that there was a delay in obtaining confirmation of the suppliers’ acceptance of the offer to buy; (2) he caused the plastic sheetings to be deposited in the bonded warehouse of his brother and control the disposal of the goods; (3) he overpriced the plastic sheetings which he delivered to the company.
OBLIGATIONS AND CONTRACTS 