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OBLIGATIONS

CONTRACTS

A juridical necessity to give, to do or not to do

Obligation

Legally demandable and

courts may render judgment

(Article 1156, NCC)

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1. ACTIVE SUBJECT

Elements

3. EFFICIENT CAUSE –

The possessor of a right; in whose favor the obligation is constituted.

- obligee/creditor

2. PASSIVE SUBJECT - obligor/debtorThe one who must fulfill the obligation

vinculum/juridical tieThe reason why the obligation exists; the force

that binds the parties4.OBJECT/PRESTATION - subject matterMay consist in giving a thing, doing or not

doing a certain act

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According to Sanction:

Kinds of Obligation

a. Civil Obligation – defined by Art. 1156, and sanction is juridical process.

b. Natural Obligation – based on natural law and the motivation in fulfilling the obligation is good conscience.

c.Moral Obligation – similar with natural obligations which are based on good conscience and moral values.

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According to the Subject Matter

Kinds of Obligation

a.Real Obligation – the obligation to give.

b. Personal Obligation – the obligation to do or not to do.

According to Affirmativeness/Negativeness

a.Positive/Affirmative Obligation – the obligation to give or to do.

b. Negative Obligation – the obligation not to do.

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According to Persons Obliged

Kinds of Obligation

a.Unilateral – where only one of the parties is bound.

b. Bilateral – where both parties are bound.

i. Reciprocal – where performance of a party depends on the performance of the other.

ii. Non-reciprocal – where performance of a party does not depend on the performance of the other.

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Art. 1157. Obligations arise from:

Sources of Obligation

(1) Law;(2) Contracts;(3) Quasi-contracts;(4) Acts or omissions punished by law; and(5) Quasi-delicts. 

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Law - Obligations Ex Lege

Sources of Obligation

Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book.

Examples of obligations specifically stated by the laws:- Duty to pay taxes (NIRC)- Duty to support spouse and children (Art. 291, NCC)

Obligations must clearly be set forth in the law.

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Contracts – Obligations Ex Contract

Sources of Obligation

Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. 

Neither party may unilaterally and upon his own exclusive volition, escape his obligations under the contract, unless the other party assented thereto, or unless for causes sufficient in law and pronounced adequate by a competent tribunal

Does it mean that laws are inferior to contracts?

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DISTINCTION

Obligation

Bilateral

Contract

One of the sources of obligations

Unilateral or Bilateral

Comes from five sources

Not all obligations are contractual

All contracts are obligatory

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Sources of Obligation

Quasi-Contracts

Art. 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book.

- Juridical relation resulting from certain lawful, voluntary and unilateral acts which has for its end that no one be unjustly enriched or benefitted at the expense of another. (Art. 2142, NCC)

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A. Negotiorum Gestio

Two Kinds of Quasi-Contract

- unauthorized management

Occurs when a person voluntarily takes charge of an abandoned/neglected property or business without the consent or authority of an able owner. (Art. 2144, NCC)

Ex. Robert Queen, a rich man, is the owner of a sari-sari store. Suddenly, he went to the province for unknown reasons. Walter Steele opened the store to operate the business and replenish its stocks. Robert, upon returning, should reimburse Walter of the expenses he incurred.

Even without ratification, owner should be liable for obligations incurred in his interest, and must reimburse the manager for necessary and useful expenses, and damages the latter suffered. (Art. 2150, NCC)

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Two Kinds of Quasi-Contract

B. Solutio Indebiti

- undue payment

When something is received when there is no right to demand it, and it was unduly delivered through mistake. (Art. 2154, NCC)

The recipient has the obligation to return it. (Art. 2154, NCC)

Ex. Tommy Merlyn borrowed P100 from Oliver Queen. Tommy paid Oliver P110 to include interest. However, since the interest was not agreed upon by the parties, Oliver should return P10, representing the interest, to Tommy.

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Art. 2164. When, without the knowledge of the person obliged to give support, it is given by a stranger, the latter shall have a right to claim the same from the former, unless it appears that he gave it out of piety and without intention of being repaid.

Other Quasi-Contracts

Art. 2165. When funeral expenses are borne by a third person, without the knowledge of those relatives who were obliged to give support to the deceased, said relatives shall reimburse the third person, should the latter claim reimbursement. Art. 2167. When through an accident or other cause a person is injured or becomes seriously ill, and he is treated or helped while he is not in a condition to give consent to a contract, he shall be liable to pay for the services of the physician or other person aiding him, unless the service has been rendered out of pure generosity.

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Art. 2168. When during a fire, flood, storm, or other calamity, property is saved from destruction by another person without the knowledge of the owner, the latter is bound to pay the former just compensation.

Other Quasi-Contracts

Art. 2174. When in a small community a nationality of the inhabitants of age decide upon a measure for protection against lawlessness, fire, flood, storm or other calamity, any one who objects to the plan and refuses to contribute to the expenses but is benefited by the project as executed shall be liable to pay his share of said expenses.Art. 2175. Any person who is constrained to pay the taxes of another shall be entitled to reimbursement from the latter.

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Sources of Obligation

Acts or omissions punished by law – Obligations Ex Delicto or Ex Maleficio

Art. 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages. 

Every person criminally liable for a felony is also civilly liable. (Art. 100, RPC)

Restitution,

Reparation of the damage caused; and Indemnification for consequential damages

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Kind of Proof Needed:

Delict

Criminal Action: Proof beyond reasonable doubt

Civil Action:

Preponderance of evidence

Ex. Malcolm Merlyn was convicted and found guilty of estafa when he pretended to be Oliver to gain the green arrow.

Will Malcolm remain civilly liable if he was found not guilty by the court?

What are the civil obligations of Malcolm?

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Sources of Obligation

Quasi-Delicts or Culpa Aquiliana

A fault or negligence which causes damages to another, there being no pre-existing contractual relations between the parties

Negligence: Omission of that diligence which is required by the

circumstances of person, place and time.

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

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Read Article Nos. 1163 to 1169, The New Civil Code

EQUATORIAL REALTY DEVELOPMENT, Inc.,  vs. MAYFAIR THEATER, Inc., G.R. No. 133879.  November 21, 2001 (insofar as the fruits are concerned)

JIMMY CO, doing business under  the name & style DRAGON  METAL MANUFACTURING vs. COURT  OF  APPEALS and BROADWAY MOTOR SALES CORPORATION G.R. No. 124922.  June 22, 1998 (insofar as the delay in delivery is concerned)

Cebu Autometic Motors, Inc. and Tirso Uytengsu III, vs. General Milling Corporation, G.R. No. 151168, August 2010 (insofar as demand is concerned)

Prepare for a short quiz as review of previous lesson.

Assignment