Short answer. You still have to account for it. Article 1400 of the Civil Code provides that where the party ordered to return a thing after annulment cannot do so because it was lost through their fault, they must return the fruits received and the value of the thing at the time of the loss, with interest running from that date.
What the law says
Whenever the person obliged by the decree of annulment to return the thing can not do so because it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of the loss, with interest from the same date.
Civil Code, Article 1400 — Loss of the Thing to Be Returned. Read the full provision →
Loss does not cancel the obligation
Annulment normally requires each side to give back what they received. Article 1400 answers the obvious practical problem: the car was wrecked, the goods were sold on, the animal died. Rather than letting the obligation disappear with the thing, the Code converts it into money. The party who cannot return the object owes its value, plus the fruits they collected while they held it — rent, harvest, income — plus interest. The other side is meant to end up roughly where they would have been had the thing come back.
The valuation date matters more than people expect
The measure is the value at the time of the loss, not the price written in the annulled contract and not the value today. That can cut either way. If the property appreciated before it was destroyed, the paying party owes more than they originally received; if it had depreciated, they owe less.
Interest runs from the same date, which is why delay is expensive. Documentary evidence of value at that specific moment — appraisals, insurance schedules, comparable sales, purchase records for replacements — is usually the most contested part of the case, and it is worth assembling early.
Fault is the condition, and it works both ways
The article applies where the loss happened through his fault. Where the thing perished through a fortuitous event, without negligence and without the party having assumed the risk, the analysis differs and the strict money substitution in this article does not simply follow.
Remember too that restitution under Art. 1398 is mutual. If you are the party who cannot return the thing, you are still entitled to recover what you paid, with its interest, so the practical outcome is often a set-off rather than a one-way payment. Before conceding a figure, work out both columns, and take advice on whether a fortuitous-loss argument is open to you.