FAQs on law, liability, earthquake & other fortuitous events

I was in my office when the recent magnitude 6.1 earthquake shook Metro Manila and other parts of Luzon. We felt the building sway for almost a minute. After checking on my family, I checked on some close friends living high up in condos. Fortunately, everyone was okay, just a bit shaken.

The next day, the news was filled with damage reports in parts of Pampanga. Local governments declared work and school suspension. The Supreme Court likewise suspended all proceedings that day.

The day after the quake, government and property administrators conducted inspections of their buildings for structural integrity. The first order of business, of course, was to determine if the buildings were safe for occupancy.

Now we ask again: what are the basic legal principles on natural disasters such as earthquakes? Can one claim against anyone for damage to property or injury to persons?

Here are some frequently asked questions and answers in light of recent events.

• If there is loss or injury due to an earthquake can indemnity be claimed?

As a general rule, if loss or injury is due to a fortuitous event, such as an earthquake, indemnity cannot be claimed. An exception is where there is a law that provides otherwise for indemnity. Another is where an obligation itself provides that indemnity or liability or when the nature of the obligation requires the assumption of risks. Where there is no stipulation to the contrary, loss or injury shall be borne by the party to whom it falls.

• What is a fortuitous event?

Article 1174 of the Civil Code defines a fortuitous event as that which could not be foreseen or which, though foreseen, was inevitable. It has been defined by jurisprudence as “an unexpected event or an act of God which could neither be foreseen nor resisted, such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of buildings by unforeseeable accidents, and other occurrences of a similar nature.”

An earthquake is an unexpected event that could neither be foreseen nor resisted. While scientists can monitor the earth’s seismic activity at this time, there has yet to be  a technology that can predict earthquakes.

• What can be the basis of liability in case of an earthquake?

A possible source of obligation can arise from a contract when a person voluntarily agrees to bind himself to render something to another. The agreement has the force and effect of law between them, provided it is not contrary to law, morals, good custom, public order or public policy.

An example is when an insurance company agrees to insure property for all risks, including fortuitous events. This means that the insured should have paid the premium to be covered by such risk.

Other reasons for liability in case of a fortuitous event is when the obligor is guilty of fraud, negligence or delay or if he contravened the tenor of the obligation. In case a developer fails to turn over a property on time and there is damage caused by an earthquake, the developer may be liable for the damage. A construction company who is guilty of negligence may also be held liable.

• What is a force majeure clause in a contract?

A force majeure (French for “greater force”) is a contract provision that relieves or excuses a party or parties from performing their contractual obligations where certain circumstances beyond their control arise, making performance impossible, inadvisable or illegal.

The general rule, however, is that where a party who fails to perform or deliver an obligation incurs delay, or is guilty of negligence, he is liable for damages as an accessory to the principal obligation. Having a force majeure clause in a contract excuses such performance or delivery.

• Who is liable for damages due to an earthquake over a leased property?

Article 1667 of the Civil Code provides that the lessee is responsible for deterioration or loss of the thing leased, unless he proves that it took place without his fault. To escape liability, the lessee should prove that the damage is due to a fortuitous event that took place without his fault or negligence. The law, however, further provides that this burden of proof on the lessee does not apply when the destruction is due to earthquake, flood, storm or other natural calamity.

• What is negligence?

Negligence is defined as the failure to observe for the protection of the interests of another person that degree of care, precaution and vigilance which circumstances justly demand, whereby such other person suffers injury.

The elements of negligence are 1. there is lack of precaution on the part of the offender, and 2. the damage impending to be caused is not immediate or the danger is not clearly manifest.

• What if the thing speaks for itself?

The doctrine of res ipsa loquitur shall apply. The concept has been explained by the Supreme Court: “While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will not generally give rise to an inference or presumption that it was due to negligence on defendants part, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence.

• What if I already bought property and cracks are present?

It depends. Under the Civil Code, the vendor shall be answerable for warranty against hidden defects on the thing sold under specific circumstances. Art. 1561 of the law provides that the vendor shall be responsible for warranty against the hidden defects which the thing sold may have, should they render it unfit for the use for which it is intended, or should they diminish its fitness for such use to such an extent that, had the vendee been aware thereof, he would not have acquired it or would have given a lower price for it; but said vendor shall not be answerable for patent defects or those that may be visible, or for those which are not visible if the vendee is an expert, who by reasons of this trade or profession, should have known them.

Article 1566 further provides that the vendor is responsible to the vendee for any hidden defects in the thing sold, even though he was not aware thereof. This provision shall not apply if the contrary has been stipulated and the vendor was not aware of the hidden faults or defects in the thing sold.

• When does the implied warranty against hidden defects apply?

1. The defect is important or serious.

a. The thing sold is unfit for the use which it is intended.

b. It diminishes its fitness for such use or to such an extent that the buyer would not have acquired it had he been aware thereof.

The defect is hidden.

The defect exists at the time of the sale.

The buyer gives notice of the defect to the seller within a reasonable time.

• What damages may be claimed against a guilty party?

Actual damages, or compensation for the damages sustained. Moral damages may also be claimed to compensate and alleviate the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar harm unjustly caused.

Exemplary damages may be awarded when a wrongful act is accompanied by bad faith or when the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. Attorney’s fees and costs of suit may be recovered should a person be compelled to secure services of counsel and litigate.

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Raymund may be reached by email at [email protected]. Visit www.mblawofficesph.com for more details.