AMEN Civ 2 Notes - Start To Compliance

Rojano, Queennie Compiled
Civ 2 I. OBLIGATIONS
anyone performing a
certain act.
3.
A. In General
an
object
prestation;
a.
1.
Definition
Art. 1156. An obligation is a

juridical necessity to give, to do or
not to do.
What is the definition of an

obligation? It is best defined by
Arias Ramos which reads as follows,
an OBLIGATION is a juridical
relation whereby a person (called
the creditor) may demand from
another (called the debtor) the
observance of a determinate
conduct, and, in case of breach,
may obtain satisfaction from the
assets of the latter. This means
that where there is a right or power to
demand, there is a correlative
obligation or an imposition upon a
person of a definite conduct.
1.
an active subject, who has

the power to demand the
prestation, known as the
oblige or creditor;
2.
a passive subject, who is

bound to perform the
prestation, known as the
obligor or debtor;
a.
These two, the active

and passive subjects
are considered as the
personal elements of
an obligation.
b.
They could be an
individual person or
juridical persons.
c.
They
must
be
determinable in some
manner. Exceptions
are
the
following
examples:
(1) negotiable
instrument payable to
bearer,
(2) promise of
a prize or a reward for
the
This may pertain not

to a thing but to a
particular conduct
of the debtor; hence,
a prestation which
may consist in
giving
(prestation
consists
in
the
delivery of a movable
or immovable thing)
Notes:
What are the elements of obligation?

APPE It has four definite elements as
follows:
or
or doing (all kinds of

services)
or
not
doing
(abstaining
from
some
act,
may
include not to give)
something, e.g. it is
not the thing which
the
vendor
must
deliver,
but
the
necessary conduct to
produce the effects of
the sale that is the
object.
4.
essential elements. The following two

are being debated.
(i)
Causa debendi/ obligationes
(Castan) This is what makes the
obligation demandable. This is the
proximate why of an obligation.
(ii) Form - This is controversial. This
is acceptable only if form means
some manifestation of the intent of
the parties.
What are the
prestation? PLED
Law (relation
to
give
support)
ii.
Bilateral acts
(contracts
giving rise to
obligation)
iii.
Unilateral
acts (crimes
and
quasidelict, quasi
contract)
**Meaning the 5 sources of

obligation
** All the above 4 elements are
agreed upon by commentators as
must be possible, physically

and juridically- licit;
2.
must be determinable or at
least determinable according
to pre-established elements
or criteria; and
3.
must
have
a
possible
equivalent in money (need
not be for one of the parties
because it could be for the
benefit of third persons; the
criterion
to
determine
whether the obligation
has a pecuniary value is
not limited to the object
or prestation thereof, but
extends to the sanction
which corresponds to the
juridical
duty;
this
is
differentiated with creditors
interest because the latter
need not be economic or
patrimonial since it may be
sentimental or ideal but the
object of prestation must
have an economic value or in
case of nonfulfillment, be
susceptible of substitution in
money or something of
patrimonial value)
This pertains to the

juridical or legal tie,
which
is
the
vinculum, that may
either be a relation
established LBU
i.
of
1.
the efficient cause or the

juridical
tie
(vinculum
juris) between the two
subjects by reason of
which the debtor is bound
in favor of the creditor to
perform the prestation.
a.
requisites
How
will
you
distinguish
an
obligation
from
natural
obligations? Since the definition
above only refers to the civil
obligation or those which give a right
of
action
to
compel
their
performance, the same will not
include the natural obligation, which
are those which cannot be enforced
by court action but which are binding
on the party who makes them, in
conscience and according to equity
and natural justice. The differences
between
the
two
include
the
following:
1.
Civil
obligations
derive
their binding force from
positive law (manmade law)
while Natural obligations
derive their binding effect
from equity
justice;
2.
and
natural
while obligee is used in an

obligation to do
Civil obligations can be

enforced by court action or
the coercive power of public
authority while the fulfillment
of
Natural
obligations
cannot be compelled by court
action
but
depends
exclusively from conscience.
(2) Passive Subject This refers to

the debtor or the obligor.
According to Balane: Book IV starts

w/ an inaccuracy.
It gives the
impression
that
obligations
&
contracts are of the same status, w/c
they are not. A contract is only one
of the sources of obligations. Book IV
should have been simply titled
"Obligations."
The first two elements must be

determinate or determinable.
The
following
are
possible
COMBINATION:
Etymology two Latin words, ligare,

meaning "to bind"
debtor
is
used
obligation to give
while obligor is used in an

obligation to do
Both
parties
are
determined at the time of
the execution of the
obligation.
one party is determined at

the constitution of the
obligation & the other to
be
determined
subsequently
in
accordance with a criteria
that
is
previously
established.
Literally obligare means "to

bind securely."
Characteristics of an Obligation: TEE

1.
It represents an Exclusively
private interest
2.
It creates ties that are by

nature transitory
3.
It involves the power to make

the juridical tie effective in
case
of
non-fulfillment
through
an
economic
equivalent obtained from the
debtor's patrimony.
Essential
Obligation:
Elements
of
an
(1) Active Subject This refers to

the creditor or the obligee.
A creditor generally used in

an obligation to give
an
& ob w/c is a proposition used

to intensify a verb.
Hence, a better definition would be

that, An obligation is a juridical
relation (because there are 2 parties)
whereby a person should engage or
refrain fr. engaging in a certain
activity for the satisfaction of the
private interests of another, who in
case of non-fulfillment of such duty
may obtain from the patrimony of the
former
through
proper
judicial
proceedings the very prestation due
or in default thereof, the economic
equivalent
(damages)
that
it
represents. (Diaz Piero)
in
the subject is determined

in accordance with his
relation to a thing &
therefore
it
changes
where the thing passes
from
one
person
to
another.
This is a
property-linked
obligation.
> by virtue of which

the debtor is bound in
favor of the creditor
to
perform
the
prestation.
Efficient cause / vinculum
may either be relation
established by:
(4) Vinculum juris- the legal tie or

efficient cause, whereby upon
default or refusal of the debtor to
perform, the creditor can go to court.
When a person says "I

promise to pay you
when I like to," there
is no obligation here
because there is no
vinculum juris.
1.
Law
(e.g.
marital
relation giving rise to
OBLIGATION
for
support;
2.
Bilateral acts (e.g.

contracts give rise
to the OBLIGATIONs
stipulated therein)
3.
Unilateral acts (e.g.

crimes and quasidelicts,
quasicontracts)
** All the above 3/4 elements are

agreed upon by commentators as
essential elements. The following two
are being debated.
(i)
Causa
debendi/
obligationes (Castan) This
is what makes the obligation
demandable.
This is the
proximate
why
of
an
obligation.
(3) Object of the obligation - the

conduct or activity that must be
observed by the debtor, this is always
an
activity
or
conduct,
the
prestation.
Requisites of an object/prestation:
PLED
It must be licit.
It must be possible.
It must be determinate or
determinable.
It must have pecuniary value
so that if not performed it is
converted into damages.
Juridical
tie,
the
efficient
cause
established by the
various sources of
OBLIGATIONS
(ii)
Form
This
is
controversial.
This
is
acceptable only if form means
some manifestation of the
intent of the parties.
TOLENTINO:
OBLIGATION
to
give
prestation consists in the delivery of a

movable or an immovable thing in
order to create a real right, or for the
use of the recipient, or for possession,
or to return to its owner;
e.g. OBLIGATION to deliver
the
thing in a contract of sale,
deposit,
lease,
antichresis,
pledge and
donation.
OBLIGATION to do including
all kinds of work or services.
or
e.g. contract of employment

professional services.
OBLIGATION not to do
consists in abstaining from some act,
e.g. duty not to create a
nuisance;
Requisites of a prestation: PLED
1.
it must be possible, physically

and juridically- licit
2.
it must be determinate, or at
least determinable; and
3.
it must have a positive

equivalent
in
money.
(susceptible
of
pecuniary
appreciation)
Positive Law valid legal
laws
enacted
by
the
legislative department;
Natural OBLIGATION not
sanctioned by any action but
have a relative juridical
effect;
do not grant the right

of action to enforce
their performance but
after
voluntary
fulfillment by their
obligor,
they
authorize
the
retention of what has
been
delivered
or
rendered by reason
thereof
(Article
1423);
2. KINDS OF OBLIGATIONS AS TO
BASIS & ENFORCEABILITY
(a) NATURAL OBLIGATIONS
(Arts. 1423 1430 not
exclusive enumeration; some
others can be)
H.
NATURAL OBLIGATIONS
ARTS. 1423-1430. 1155
Article 1423. Obligations are civil or
natural. Civil obligations give a right of
action to compel their performance.
Natural obligations, not being based
on positive law but on equity & natural
law, do not grant a right of action to
enforce their performance, but after
voluntary fulfillment by the obligor,
they authorize the retention of what
has been delivered or rendered by
reason
thereof.
Some
natural
obligations are set forth in the
following articles.
Article 1424. When a right to sue
upon a civil obligation has lapsed by
extinctive prescription, the obligor
who voluntarily performs the
contract cannot recover what he

has delivered or the value of the
service he has rendered.
Article 1425.
When without the
knowledge or against the will of the
debtor, a third person pays a debt
which the obligor is not legally
bound to pay because the action
thereon has prescribed, but the
debtor
later
voluntarily
reimburses the third person, the
obligor cannot recover what he
has paid.
Article 1426. When a minor
between 18 and 21 years of age who
has entered into a contract without
the consent of the parents or
guardian, AFTER THE ANNULMENT
of the contract voluntarily returns
the whole thing or price received,
notwithstanding the fact that he
(minor) has not been benefited
thereby, there is no right to
demand the thing or price thus
returned.
Minor has no right to
demand the thing or the
price thus return
Note: generally: When the ground
for annulment is the incapacity of the
plaintiff, he (MINOR) is not bound
to make restitution
except to the extent that he
(MINOR)
was benefited- so eto
kelangan ibalik.
**In natural obligations, however,
he (MINOR) has natural obligation to
still deliver- although he is not bound
to deliver (that extent/part which he
benefited). But once he makes a
delivery, he cannot thereby recover
what he has delivered- by reason of
the binding effect of natural obligation.
(1426)
Ratio: Because a minor at such age is
deemed to have sufficient mental and
moral development to be aware of his
debt of conscience. This is basically
independent on the next provision
on Article 1427 below.
Illustrations:
1. A filed an action to compel B to
fulfill the latters obligation to the
former, will the action prosper? Not
necessarily because in natural
obligations no court action can
compel performance because it is
an obligation based on equity,
conscience and natural justice.
Natural obligations are midway
between civil obligations and the
purely moral obligations. In order
that there may be a natural
obligation, there must exist a

juridical tie (vinculum juris) which is
not prohibited by law and which in
itself could give a cause of action,
but because of some special
circumstances is actually without
such legal sanction or means of
enforcing compliance by invoking
the intervention of the court.
Basis: Art. 1423 Obligations are civil
or natural. Civil obligations give a
right of action to compel their
performance. Natural obligations,
not being based on positive law but
on equity performance, but after
voluntary fulfillment by the obligor,
they authorize the retention of what
has been delivered or rendered by
reason
thereof.
Some
natural
obligations are set forth in the
following articles.
Article 1427. When a minor
between 18 and 21 years of age, who
has ENTERED INTO A CONTRACT
without the consent of the parent or
guardian, voluntarily pays a sum of
money or delivers a fungible thing in
fulfillment of the obligation, there shall
be no right to recover the same
from the obligee who has spent or
consumed it in good faith.
Minor
can
no
longer
recover the same from the
obligee (capacitated) who
has spent the same in
good faith.
Note: It is not the voluntary
payment that prevents recovery
under this article, but the fact that the
obligee has consumed or spent
the thing or money in GOOD
FAITH.
Although it is true that the contract
can be annulled, but until it is so
annulled, it exists as a civil
obligation.
-
General rule: Upon the annulment of

the contract, the party who contracted
with the minor must return whatever
he may have received under the
contract.
Exception: If the payment was made
although by the minor, but the thing
or money paid was consumed or spent
in good faith
(belief that the debtor has the
capacity to deliver the object- must
exist at the time that the thing was
consumed or money was spent; can
be recovered still by the debtor(minor)
if the good faith, even if it existed at
the time of the delivery, has ceased to
exist at the time of consumption or
spending).
Is the thing here always have to be

consummable? No, because although
non-consummable, the debtor cannot
recover, if the thing is no longer in the
possession of the creditor who has
acted in good faith, either he has
alienated it or it has been lost, without
his fault.
regulations; as sometimes called as

rational law.
What are the types of obligations?
In juridical science, four types of
which include the following:
Article 1428. When, after an action

to enforce a civil obligation has failed,
the defendant voluntarily performs the
obligation, he cannot demand the
return of what he has delivered or the
payment of the value of the service he
has rendered.
Article 1429.
When a testate or
intestate heir voluntarily pays a
debt of the decedent exceeding the
value of the property which he
received by will or by the law of
intestacy from the estate of the
deceased, the payment is valid &
cannot be rescinded by the payer.
Article 1430.
When a will is
declared void because it has not
been executed in accordance with the
formalities required by law, but one of
the
intestate
heirs,
after
the
settlement of the debts of the
deceased,
pays
a
legacy
in
compliance with a clause in the
defective will, the payment is
effective & irrevocable.
Note: This article includes every
licit
obligation
which
is
unenforceable because of the lack
of proper formalities.
Article 1960. If the borrower pays
interest when there has been no
stipulation therefor, the provisions
of this Code concerning solutio
indebiti, or natural obligations,
shall be applied, as the case may
be.
Article 1956. No interest shall be
due unless it has been expressly
stipulated in writing.
Why would this Natural Obligation be
allowed in our jurisdiction? It is
because
equality,
morality
and
natural justice as the foundations of a
positive law makes wisdom to this
obligation so as the so-called moral
obligation.
What is the basis of natural
obligation? It is from the nature of
man and of things, as well as from
law and reason, there arises a
natural law, which is immutable and
independent
of
all
human
1.
Moral obligation- duties of

conscience
completely
outside of the field of law
2.
Natural
obligationnot
sanctioned by any action but
have relative juridical effect
3.
Civil
obligationjuridical
obligations which apparently
in conformity with positive
law but are contrary to
juridical
principles
and
susceptible of being annulled
4.
Mixed obligation- have full

juridical effect
However, jurisprudence makes only

two classifications, as follows:
1.
Natural obligation
2.
Civil obligation
Requisites/ Elements of Natural

OBLIGATION:
1.
there is a juridical tie between

two persons (distinguishes it from
moral obligation)
2.
the tie is not given effect by

law (distinguishes it from civil
obligation)
susceptible
VOLUNTARY
performance,
of
but NOT THROUGH

COMPULSION
by
legal means.
an
obligation
WITHOUT
SANCTION
Voluntary fulfillment may be

understood as spontaneous,
free from fraud or coercion or
it may be understood as meaning
without knowledge or free from
error;
-with knowledge that he
cannot be compelled to
pay OBLIGATION;
RATIO: reputation (clan)
-this is being distinguished

from payment by mistake
(solution indebiti) which
constitutes
quasi-contract
because
payment
by
mistake is not voluntary
and hence may be recovered.
-payment here is voluntary
when the debtor knew of the
obligation to be a natural one.
Case:
Ansay
vs.
Development Company
National
Facts: On July 25, 1956, appellants

filed against appellees in the Court of
First Instance of Manila a complaint
praying for a 20% Christmas bonus
for the years 1954 and 1955. The
court a quo does not see how
petitioners may have a cause of
action to secure such bonus because:
(a) A bonus is an act of liberality and
the court takes it that it is not within
its judicial powers to command
respondents to be liberal;
(b)
Petitioners
admit
that
respondents are not under legal duty
to give such bonus but that they had
only ask that such bonus be given to
them because it is a moral obligation
of respondents to give that but as
this Court understands, it has no
power to compel a party to comply
with a moral obligation (Art. 142, New
Civil Code.).
Issue: Whether the appellees have
the legal obligation to give the
claimed bonus despite the fact that
the same has been granted arising
from a moral obligation or the natural
obligation to do the same.
Held: No. Article 1423 of the New
Civil Code classifies obligations into
civil or natural. "Civil obligations are a
right of action to compel their
performance. Natural obligations, not
being based on positive law but on
equity and natural law, do not grant a
right of action to enforce their
performance, but after voluntary
fulfillment by the obligor, they
authorize the retention of what has
been delivered or rendered by reason
thereof".SABI KO: meaning, although there
is juridical tie, the same has no
binding
force,
but
once
performed there is a binding
effect
It is thus readily seen that an
element of natural obligation
before it can be cognizable by
the court is voluntary fulfillment
by
the
obligor.
Certainly
retention can be ordered but
only
after
there
has
been
voluntary performance. But here
there has been no voluntary
performance. In fact, the court
cannot order the performance.
At this point, we would like to
reiterate what we said in the case of
Philippine Education Co. vs. CIR and
the Union of Philippine Education Co.,
Employees (NUL) (92 Phil., 381; 48
Off. Gaz., 5278)
xxx
xxx
xxx
From the legal point of view a

bonus is not a demandable and
enforceable obligation. It is so
when it is made a part of the
wage or salary compensation.
Juridical
tie
Exists
None
Fulfillmen
t
or
Performa
nce
by
debtor
legal
fulfillment of
an
OBLIGATION
act of pure
liberality
which
springs from
blood,
affection or
benevolence
Law/Basis
of
existence
of
OBLIGATI
ON
Within
the
domain of law
entirely
domain
morals
Enforceab
ility
The juridical
tie
itself
produces
certain civil
effects; True
OBLIGATION
but for certain
causes cannot
be
enforced
by law
moral duty is
inexistent in
the juridical
point of view
And while it is true that the

subsequent case of H. E. Heacock vs.
National Labor Union, et al., 95 Phil.,
553; 50 Off. Gaz., 4253, we stated
that:
Even
if
a
bonus
is
not
demandable for not forming part
of
the
wage,
salary
or
compensation of an employee,
the same may nevertheless, be
granted
on
equitable
consideration as when it was
given
in
the
past,
though
withheld in succeeding two years
from low salaried employees due
to salary increases.
still the facts in said Heacock case
are not the same as in the
instant one, and hence the ruling
applied in said case cannot be
considered in the present action.
What are imperfect and perfect
obligations? Perfect obligation is
one where there is a determination
of the creditor, debtor and the
nature
and
value
of
the
obligation;
Imperfect
obligation
has
determination of those above.
no
What is its implication to natural

obligation? Perfect obligation is
natural obligation in a sense that all
those
elements
have
been
determined and it is only the
performance that is left to the will
of the debtor.
Natural OBLIGATION vs.
OBLIGATION: ------ JFEL
Natural
OBLIGATION
Moral
Moral
OBLIGATIO
Issue: Whether the obligation arising

from the original contract of loan,
being prescribed would still be
demandable from the only heir of the
original debtor.
Examples
OBLIGATIONS:
of
of
natural
Support of a natural child

(illegitimate)
Indemnification
woman seduced
Support of relatives, by
consanguinity or affinity
of
Case: Villaroel vs. Estrada

Facts: On May 9, 1912, Alexandra F.
Callao, mother of defendant John F.
Villarroel, obtained from the spouses
Mariano Estrada and Severina a loan
of P1, 000 payable after seven years.
Alexandra died, leaving as the only
heir to the defendant. Spouses
Mariano Estrada and Severina died
too, leaving as the only heir to the
plaintiff Bernardino Estrada. On
August 9, 1930, the defendant signed
a document which states in duty to
the plaintiff the amount of P1, 000,
with an interest of 12 percent per
year. This action relates to the
collection of this amount. The Court
of First Instance of Laguna, which was
filed this action, condemn the
defendant to pay the claimed amount
of P1, 000 with legal interest of 12
percent per year from the August 9,
1930 until fully pay.
Held: Yes because the prescribed

debt of the deceased mother of the
debtor was held to be a sufficient
consideration to make valid and
effective the promise of the son to
pay the same. Although the action to
recover the original debt has
prescribed and when the lawsuit was
filed in this case, the question that
arises in this appeal is primarily
whether,
notwithstanding
such
prescription is from the action filed.
However, this action is based on
the original obligation contracted
by the mother of the defendant,
who has prescribed, but in which
the defendant contracted on
August 9, 1930 to assume the
fulfillment of that obligation, as
prescribed.
Being
the
only
defendant of the primitive heir debtor
entitled to succeed him in his
inheritance, that debt legally brought
by
his
mother,
but
lost
its
effectiveness by prescription, is now,
however,
for
him
a
moral
obligation, which is consideration
enough to create and effective
and enforceable his obligation
voluntarily contracted the August
9, 1930.
*a PROMISE TO PERFORM A
NATURAL
OBLIGATION
is
as
effective as performance itself
and converts the obligation into a
civil
obligation.
The
natural
obligation is a valid cause for a
civil obligation
Sabi ko:
there is already a
retention of that promise- he can
no longer retract it.
Source
binding
force
effect
of
&
Enforceabili
ty
CIVIL
OBLIGA
TIONS
NATURAL
OBLIGATIO
NS
From
positive
law
from equity
and natural
justice
can
be
enforced
by court
action or
the
coercive
power of
public
authority
cannot be
compelled
by
court
action but
depends
upon good
conscience
of
the
debtor
When can you convert a natural

obligation to civil one? This can made
through;
(1) Novation- DBP vs. Confessor:

(2) Confirmation or ratification of
the
natural
obligation-unless
contrary to law, morals or public
order.
Can
you
guarantee
a
natural
obligation? In principle, NO. because
the
liability
of
the
guarantor
presupposes that there must be a
prior exhaustion of the property of
the principal debtor, and that the
guarantor after paying can recover
from the principal debtorand both
of these cannot be legally done when
the obligation is natural.
The legal consequence of having a
guaranty for a natural obligation is to
convert the same to a civil obligation
because that guaranty will now be
subject to some coercive remedies to
be enforced against it.
Illicit
OBLIGATIONS
OBLIGATIONS which are contrary to

morals and good customs do not
constitute natural OBLIGATIONS;
whatever is paid under such
OBLIGATIONS can be recovered,
without prejudice to the provisions of
Articles 1411-void contracts- illegal
obligation constituting crimes.. and
1412- void contracts- illegal but not
criminal, but Article 1414 may apply.
Illustrations:
1. Differentiate civil obligation
from natural obligation: In civil
action, the obligation can be
enforced by court action; natural
obligations cannot be enforced by
court action. Civil obligations are
based on positive law and natural
obligations are based on equity.
2. Example: The debt is 10M, the
value of the estate 3M, the
natural obligation is? To pay
7M. The basis of 7M? Under the
law, the heir is liable to the extent
of the value which they actually
received from the decedent,
therefore, if they received 3M,
they will only be liable for 3M, the
7M will be a natural obligation.
3. Example: Dated feb.1, 2000, I
promise to pay X the amount
of 1M, signed by Y. To this
day, not a single centavo has
been paid. What kind of
obligation is the promissory
note? It may be considered as a
civil obligation when X demanded
in writing the payment from Y
before the action prescribes
because written demand will
stop the running of prescription

of the obligation. However, if
there was no demand, since the
obligation is a pure obligation,
therefore, demandable at once,
the prescriptive period begins to
run on feb.2, 1994, 10 years has
already lapsed, the action already
prescribed,
the
obligation
becomes a natural obligation.
Is this promissory note a pure
obligation? Yes. Why? Because
there is no period stated in the
promissory note.
Because no period is stated in
the promissory note, it is a
pure
obligation?
Not
necessarily, because by express
provision of the law (1197),
just because the parties failed to
state the period in the promissory
note, does not necessarily mean
that it pertains to a pure
obligation, because from the
nature and circumstances it
can be inferred that the
parties may have intended to
fix the period, if this is
promissory note is a contract of
loan it is possible that there is a
period.
What possible contract may
the promissory note be that
indeed this may pertain to a
pure obligation? A contract of
sale- because in contract of sale
it is reciprocal, both are creditors
and debtors of each other- such
that once a party performs his
part of obligation, it becomes
incumbent upon the other to
perform his part of obligation- he
may demand at once.
Now having said that, if this
promissory note pertains to
an obligation with a period,
therefore today the obligation
in this promissory note, if no
demand was made, a natural
obligation? Not necessarily, the
period of prescription shall be
counted from the due date where
the obligation must be paid, and
if this is with a period- the
demandability arise from the
moment such period expires, and
the agreement is that the
obligation should be paid after
five years, today this is still a civil
obligation- because the right of
action is not yet barred by
prescription.
the prescriptive
period shall commence to run
from the time the cause of
action accrues.
4. IN RELATION TO THE EXAMPLE

OF THE HEIR WHO PAID THE
DEBT OF THE FATHER: X died,
his heirs are ABC, ABC paid to
Y 10M five days after Xs
death,
after
6
months
thereafter the heirs are trying
to recover claiming that the
estate is only 3M, can the
heirs recover the value from
Y? They cannot recover if the
payment is voluntary. In natural
obligation, if the payer voluntarily
paid, the creditor has the right to
retain what has been paid. The
question here is that whether
or
not
the
payment
is
voluntary?
Incidentally,
in
natural obligation if the payer
paid without fraud, threat, or
any vitiation being employed
upon the heirs, the payment
is
voluntary
payment,
correct? Not necessarily. When
will there be payment without
vitiation, yet the payment is
not
voluntary?
What
constitutes
voluntary
payment
in
natural
obligation? The payer knew that
he is not compelled to pay but
the payer still paid, it is a
voluntary payment. The more
reasonable question here is
that is there such a person
who is crazy enough to pay
even if he has no obligation
to pay? Yes, why would he do
that?
Conscience.
Precisely
because the obligation is based
on justice (but this is not possible
here in the Philippines). The more
reasonable answer is reputation.
But under the facts the
payment is voluntary? Not
really, because when they paid it
was only 5 days after the death of
X, by that time normally, they do
not know the estate of the
decedent. had they known the
amount of the estate, they would
not have paid
5. Obligation is defined under
Art. 1156 as an obligation to
give, to do, or not to do. Is it
correct to say that the
definition is not accurate;
there
must
be
another
prestation which is not to
give? No, the prestation not to
give is included in not to do.
Obviously in this definition,
there
are
only
three
obligations as to prestations,
which are? 1. Obligation to give;
2. Obligation to do; and 3.
Obligation not to do. Briefly, this
definition is criticized because
it is incomplete, why is it
incomplete? It pertains only to

the part of the debtor. To the
critics, obligation is a concept
that would include both the debt
side and the credit side. And you
agree to that? Yes sir. The
credit side and the debt side
are
two
aspects
of
an
obligation, do you agree to
that? Yes. So a credit is an
obligation? No, they are actually
opposite of each other. The
difference is that a person who
has a right can compel the other;
he cannot be compelled to
perform his right. Thus, in
Philippine
law,
rights
and
obligations are different matters.
An obligation therefore may
not be waived but a right may
be exercised or not.
6. What are obligations without
agreement, and 5 situations
giving rise to this obligation?
These are obligations arising from
all
other
sources
besides
contract.- delict, quasi delit,
quasi-contract, law. Thus, in
answering the second question,
you must cite examples:
1. Payment of damages to the
person who was injured by
negligence quasi delict
2. Payment of damages to a
victim of a crime.- delict
3. Obligation to return thing in a
solution indebiti- quasi contract
4. Obligation to give support to
spouse.- law
This is because agreement is
required only in contracts, it is
not
required
in
all
other
obligations, is only an essential
element of a contract.
7. Therefore
considered
as
essential
elements
of
obligations are?
1. Active
subject (creditor or obligee); 2.
Passive
Subject
(debtor
or
obligor); 3. Juridical tie; and 4.
Prestation.
Therefore, in a contract of
lease, who is active subject
and who is the passive
subject? The obligation is a
reciprocal contract, hence, the
passive subject is the lessor in
the aspect of delivering the
property leased to the lessee, and
the active subject is the lessee in
the aspect of demanding for the
delivery of the thing leased.
In a contract of sale, who is

the
passive
subject?
It
depends, the contract of sale is a
bilateral contract, hence as to
payment the buyer is the passive
subject and the vendor is the
active subject, while as to the
delivery of the thing sold, the
buyer is the active subject while
the vendor is the passive subject.
Contract
resulting
to
reciprocal
obligation
called? A bilateral contract.
a
is
The question here is, how

come the debtor is considered
as the passive subject? He can
be compelled to perform the
obligation. He is the one to be
compelled therefore passive?
Under Philippine law, the creditor
is the active subject, because if
the creditor does not demand for
the performance of the obligation
there will be no compulsion
because if there is no demand,
there will be no delay.
The debtor is actually favored by
law for instance: 1. In an
obligation to pay a sum of money
without a stipulation as to the
place of payment, the place of
payment will be where? The place
of domicile of debtor.
8. Mentioned as one of the
essential requisites is the
prestation, also known as
what? The object. Therefore it
pertains to a thing? No.
Because? The object pertains to
conduct.
9. Another essential requisite is
the juridical tie, also known
as, ad vinculum juris or legal
tie or efficient cause. When
would there be a juridical tie,
what is its purpose? It binds
the party to the obligation; there
is a juridical tie when one of the
sources of obligation is present.
These sources of obligations,
anyone of them binds the parties.
Like for instance, law, it is the law
that will bind the parties. What
obligation has no juridical tie?
Moral obligations.
PRESCRIPTION OF ACTIONS
What is prescription of actions
means? It is also known as the
limitation of actions which refers to
the time within which an action may
be brought, or some act done, to
preserve a right.
What are Statutes of Limitation?

These are the acts limiting the time
within which actions shall be brought.
They do not confer any right of action
but are enacted to restrict the period
within which the right might be
asserted. They can be available as
defenses
but
not
matters
of
substantive right. The purpose is to
protect the diligent and vigilant not
those who sleep on their rights. They
are statutes of repose, the object of
which is to suppress fraudulent and
stale claims from springing up at
great distances of time and surprising
the parties or their representatives
when all the proper vouchers and
evidence are lost or the facts have
become obscure from the lapse of
time or the defect memory or death
or removal of witnesses. These
contemplate civil actions not criminal
actions.
What is the difference between
laches and prescription? Laches is
concerned with the effect of delay
while prescription is concerned with
the fact of delay. Laches is principally
the question of inequity of permitting
a claim to be enforced while
prescription is a matter of time.
Laches applies to equity while
prescription is statutory/law.
Article 1139. Actions prescribed by
the mere lapse of time fixed by law.
Note: For example, in computing the
prescriptive period if it is a leap year,
February 28 and 29 are two separate
days.
What is the effect of lapse of time? It
has the effect of extinguishing the
action. However, this to be availed of
as a defense should be pleaded in the
answer.
The right of prescription however
can be waived or renounced. It is
deemed waived if not timely raised or
pleaded before or during trial.
Exception if it is apparent in the
pleading itself.
Case: Development Bank of the
Philippines vs. Spouses Patricio
Confessor
Facts: On February 10, 1940 spouses
Patricio
Confesor
and
Jovita
Villafuerte obtained an agricultural
loan from the Agricultural and
Industrial Bank (AIB), now the
Development of the Philippines (DBP),
in the sum of P2,000.00, Philippine
Currency,
as
evidenced
by
a
promissory note of said date whereby
they bound themselves jointly and
severally to pay the account in ten

(10) equal yearly amortizations. As
the obligation remained outstanding
and unpaid even after the lapse of
the
aforesaid
ten-year
period,
Confesor, who was by then a member
of the Congress of the Philippines,
executed a second promissory note
on
April
11,
1961
expressly
acknowledging
said
loan
and
promising to pay the same on or
before June 15, 1961. Said spouses
not having paid the obligation on the
specified date, the DBP filed a
complaint dated September 11, 1970
in the City Court of Iloilo City against
the spouses for the payment of the
loan.
Issue: Whether the validity of a
promissory note which was executed
in consideration of a previous
promissory note, the enforcement of
which is barred by prescription may
still be demandable.
Held: Yes. The right to prescription
may be waived or renounced. Article
1112 of Civil Code provides:
Art. 1112. Persons with capacity
to
alienate
property
may
renounce prescription already
obtained, but not the right to
prescribe in the future.
Prescription is deemed to have
been tacitly renounced when the
renunciation results from acts
which imply the abandonment of
the right acquired.
There is no doubt that prescription
has set in as to the first promissory
note of February 10, 1940. However,
when
respondent
Confesor
executed the second promissory
note on April 11, 1961 whereby
he promised to pay the amount
covered
by
the
previous
promissory note on or before
June 15, 1961, and upon failure
to
do
so,
agreed
to
the
foreclosure of the mortgage, said
respondent thereby effectively
and expressly renounced and
waived
his
right
to
the
prescription
of
the
action
covering the first promissory
note.
This Court had ruled in a similar case
that
... when a debt is already barred by
prescription, it cannot be enforced by
the creditor. But a new contract
recognizing and assuming the
prescribed debt would be valid
and enforceableNOVATION ... .
Thus, it has been held

Where,
therefore,
a
party
acknowledges the correctness of a
debt and promises to pay it after the
same has prescribed and with full
knowledge of the prescription he
thereby waives the benefit of
prescription.
This is not a mere case of
acknowledgment of a debt that
has prescribed but a new promise
to
pay
the
debt.
The
consideration
of
the
new
promissory note is the preexisting obligation under the first
promissory note. The statutory
limitation bars the remedy but
does not discharge the debt.
A new express promise to pay a
debt barred ... will take the case
from the operation of the statute
of limitations as this proceeds upon
the ground that as a statutory
limitation merely bars the remedy
and does not discharge the debt,
there is something more than a mere
moral obligation to support a
promise, to wit a pre-existing debt
which is a sufficient consideration for
the new the new promise; upon this
sufficient consideration constitutes,
in fact, a new cause of action.
... It is this new promise, either made
in express terms or deduced from an
acknowledgement
as
a
legal
implication, which is to be regarded
as reanimating the old promise, or as
imparting vitality to the remedy
(which by lapse of time had become
extinct) and thus enabling the
creditor to recover upon his original
contract.
Under Article 165 of the Civil Code,
the husband is the administrator of
the conjugal partnership. As such
administrator,
all
debts
and
obligations
contracted
by
the
husband for the benefit of the
conjugal partnership, are chargeable
to the conjugal partnership. 5No
doubt, in this case, respondent
Confesor
signed
the
second
promissory note for the benefit of the
conjugal partnership. Hence the
conjugal partnership is liable for this
obligation.
Article 1140. Actions to recover
movables shall prescribe 8 years from
the time the possession thereof is
lost, unless the possessor has
acquired
the
ownership
by
prescription for a less period,
according to Article 1132 and without
prejudice to Articles 559, 1505 and

1133.
Article 1132. The ownership of
movables
prescribes
through
uninterrupted possession for 4 years
in good faith.
The ownership of personal property
also prescribed through uninterrupted
possession for 8 years, without need
of any other condition.
With regard to the right of the owner
to recover personal property lost or of
which he has been illegally deprived,
as well as with respect to movables
acquired in a public sale, fair, or
market, or from a merchants store,
the provisions of Article 559 and 1505
shall be observed.
Article 1141. Real actions over
immovables prescribe after 30 years.
This provision is without prejudice to
what is established for the acquisition
of ownership and other real rights by
prescription.
Note: While an action for reformation
of instrument, such as a contract of
sale with pacto de retro alleged to be
merely an equitable mortgage, is an
action based upon a written contract
which must be brought within 10
years from the time the right of
action accrues (Article 1144), where
however, the accrual of such right
could not be established it is more
logical to apply this provision, Article
1141 because in reality the action
seeks to reassert ones title of
ownership over the real property, not
to recover the same.
Article 1142. A mortgage action
prescribes after 10 years.
Note: The fact that the mortgage is
registered does not make its action to
foreclose imprescriptible.
Article 1143. The following rights,
among others specified elsewhere in
this Code, are not extinguished by
prescription: imprescriptible
1. To demand a right of way,
regulated in Article 649;
2. To bring action to abate a
public or private nuisance.
Note: Also included in the list is that
provided for in Article 494 of the Civil
Code which allows no prescription to
run in favor of a co-owner or co-heir
against co-owners or co-heirs so long
as he expressly or impliedly recognize
the
co-ownership
because
the
possession of each of the co-owner or
co-heir is in the nature of a subsisting
trust and considered to be in the
name of the other.
Exception: It will prescribe if the coowner or co-heir has possessed the

property as exclusive owner for (30
yrs-ocen) a period sufficient to
acquire the property by prescription.
Other imprescriptible actions:
1. Action by the government or
a governmental entity;
2. Action for mandamus;
3. Action to enforce an express
trust as long as the trustee
does not repudiate the trust;
4. Action to quiet title of the
property in ones possession;
5. Action or defense to declare a
contract or judgment void ab
initio;
6. Action of the registered owner
to recover his land.
Article 1144. The following actions
must be brought within 10 years from
the time the right of action accrues:
1. Upon a written contract;
2. Upon an obligation created by
law; and
3. Upon a judgment.
Note: Remember that the action for
reconveyance of the title to the
rightful owner prescribes in 10 years
from the issuance of the title. But is
fraud has been committed, and this is
the basis of action, not implied trust,
the action will be barred after 4 years
from the discovery of the fraudulent
act.
must be commenced within 6 years:
1. Upon an oral contract;
2. Upon a quasi-contract.
must be instituted within 4 years:
1. Upon an injury to the rights of
the plaintiff;
2. Upon a tort or quasi-delict.
*An action based on fraud.
Note: Example of injury to the rights
of the plaintiff is when there is an
unjustified
separation
from
employment. Example of actions of
tort or quasi-delict is; where real
property belongs in ownership to D
and over which he was and has
always been in possession but by
mistake of the cadastral clerk came
to be titled in 1935 in the name of L,
who had never claimed it and knew
all along that he was not the owner
but only had a paper title thereto,
never bothered to disturb the
possession of D until 1948 when he
sought to do so, thereafter filing his
reinvindicatory action to recover the
land
from
D
in
1949,
the
counterclaim
for
reconveyance
contained in the answer of D has
been filed within the period to
recover on a quasi-delict.
must be filed within one year:
1. For
forcible
entry
and
detainer;
2. For defamation.
Article 1148. The limitations of
actions mentioned in Articles 1140 to
1142 and 1144 and 1147 are without
prejudice to those specified in other
parts of this Code, in the Code of
Commerce, and in special laws.
Article 1149. All other actions whose
periods are not fixed in this Code or in
other laws must be brought within 5
years from the time the right of
action accrues.
Note: The right to collect taxes is
imprescriptible.
Article
1150.
The
time
for
prescription for all kinds of actions,
when there is no special provision
which ordains otherwise, shall be
counted from the day they may
be brought.
Note: It is to be computed from the
day on which the corresponding
action could have been instituted. It
is the legal possibility of bringing the
action which determined the starting
point for the computation of the
period. The period should not be
made to retroact to the date of
execution of contract.
The commencement of cause of
actions:
1. Closing of windows- the
period of prescription for the
action to close must be
counted from the day they
were opened.
2. Obligation
to
pay
upon
receipt of an inheritance by
the debtor- from the date of
such receipt because when
the obligation is subject to a
suspensive
condition,
prescription begins to run
from the happening of the
condition.
3. Obligation without maturity
date or note payable on
demand- from the date of the
note or obligation NOT from
demand.
4. Unpaid
balance
of
a
subscription to shares of a
corporation- from the date of
call or demand.
5.
Payment of money within a

year but with privilege of
extension- from the end of
the first year.
6. Action based on fraud- from
the discovery of fraud.
7. Quasi-delict- from the day the
quasi-delict accrued or was
committed.
8. Action
for
partition
and
reconveyance
based
on
implied or constructive trustfrom the date of issuance of
the original certificate of title
because registration is notice
to the world.
9. Period to claim inheritanceuntil a 3rd person claims a
right under such instrument.
10. To set aside simulated written
deed of pacto de retro salewhen the alleged vendees
made known their intention
by overt acts not to abide by
the true agreement NOT from
the date of execution of
contract.
Article 1151. The time for the
prescription of actions which have for
their object the enforcement of
obligations to pay principal with
interest or annuity runs from the last
payment of the annuity or of the
interest.
Note: This is applicable only when
the principal debt is already due. But
where there exist a past due
mortgage which was recognized by
payments of interest, prescription ran
only from the past payment of
interest.
Article
1152. The period for
prescription of actions to demand the
fulfillment of obligations declared by
a judgment commences from the
time the judgment became final.
Note: Judgment will only become
final upon the expiration of the period
for appeal in the trial court. But in the
SC or CA, the true judgment is that
entered by the Clerk of that Court
pursuant to the dispositive portion of
its decision. The period is 10 years
from such entry or period under
Article 1144.
Article
1153. The period for
prescription of actions to demand
accounting runs from the day the
persons who should render the
same cease in their functions. The
period for the action arising from the
result of the accounting runs from
the date when said result was
recognized by agreement of the
interested parties.
Note: The period of prescription

begins to run in an action to compel
an accounting by a joint account
partner, from the date of the
retirement of the members. For
accounts, the following rules apply:
1. For mutual current accounts,
it begins to run on the date of
the last item, no matter how
far
back
the
account
commenced.
2. For simple current open
accounts, it begins to run
from the date of each
particular item.
3. Current account guaranteed
by mortgage executed in a
public instrument, it begins to
run from the date of the last
payment.
4. When the accounting has
been made between the
parties
in
their
current
account dealings, the right of
action,
and
prescription
begins to run on the date
when the last balance of
prescription was struck and
NOT when the business
relations terminated.
Article 1154. The period during
which the obligee was prevented by a
fortuitous event from enforcing his
right is not reckoned against him.
Note: There is only interruption of
the running of prescription when
the courts cannot be kept open and
are not within the reach of the
people. The Statute of Limitations
does
not operate against the
Government.
An
example
of
interruption is the destruction of
records of the case.
Article 1155. The prescription of
actions
is
interrupted
(prescription do not run)

(1) when they are filed before the
court,
(2) when there is written extrajudicial demand by the creditors,
and
(3) when there is any written
acknowledgment of the debt by
the debtor.
Note: For the first interruption, it
lasts during the pendency of the
action and runs anew after the
dismissal of the first action to revive
judgment.
When interruption of action is legally
commenced? It is from the time the
complaint is docketed in Court.
How about if the prescription is

interrupted by a judicial demand? The
full period for the prescription must
be reckoned from the cessation of
the interruption.
7.
8.
When there is no suspension in filing
of action in court?
1.
2.
3.
When the plaintiff desist

Amendment of the complaint
with new or different cause of
action
New or additional defendants
For the second interruption, it is so

because
since
the
extinctive
prescription is based on presumed
abandonment of a right, it is obvious
that the running of the period should
be interrupted when a demand is
made by the creditor upon the debtor
before the lapse of the period fixed
by law, with the burden of proof on
the former. It must also be written.
For the third interruption, it is so if the
acknowledgment is in writing. Does it
always have to be express? Not so
because it can be implied therein,
provided it is written and must apply
to a particular or specific debt.
Examples are the following:
1.
2.
A promise to pay a debt.

Listing
of
mortgage
indebtedness by the debtor in
his schedule of liabilities filed
in insolvency proceedings.
3. Statement by one of the
maker of a PN that he
supposed he would have to
pay it, if the amount could
not be gotten out of the
estate of other drawer.
4. Notation in the handwriting of
the maker to the effect that
such note was renewed.
* Can be made even by a legal
representative.
Instances
that
there
is
NO
acknowledgment of debt
1. Mere offer to compromise a
suit upon a supposed debt.
2. Debtor acknowledging receipt
of a statement of account but
declines to recognize the
correctness of the account
being exorbitant.
3. Acknowledgment
of
the
obligation after it has already
prescribed. There must be a
new and positive promise to
pay in order to nullify
prescription.
4. Part payment of debt.
5. The death of the debtor.
6. The transfer of right to
another.
9.
The institution of criminal

action cannot have the effect
of interruption the institution
of civil action based on quasidelict.
Order to stay execution of
judgment.
Confinement in jail.
What
is
the
effect
of
acknowledgment? It will renew the
obligation of the debtor and
interrupts the prescription and
make it run only from such
acknowledgment.
Example, if the decedent makes a will
but invalid as to its form but in there
he acknowledge the debt in favor of
A, the prescription runs against the
claim from the date of the making of
invalid will and NOT from the date of
death.
(b) CIVIL OBLIGATIONS:
Article 1157. Obligations
arise from:
(1)
Law;
(OBLIGATIONS
ex
lege)
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions
punished by law; and
(5) Quasi-delicts.
SOURCES OF OBLIGATIONS:
1. LAW:
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.
an agreement is
not necessary in
order that a party
may demand from
another
the
fulfillment of an
OBLIGATION arising
from the application
of a law in the
circumstances;
Balane: Law as a source of
obligation It is my opinion that
there
is
an
overlap
in
the
enumeration because all obligations
arise from law. Law is the only source
of obligation, in the ultimate sense.
But, as a proximate source, there are
five sources of obligations. Law is
both the ultimate & a proximate

source of obligations.
Sources of Obligations according

to Sanchez Roman.
Law & Acts. The latter are further
classified, as follows:
(1) licit acts created by concurrence
of wills (contracts);
(2)
licit acts either voluntary or
involuntary without concurrence of
wills (quasi-contract);
(3) illicit acts of civil character which
are not punishable, voluntary or
involuntary (torts & all damages
arising from delay);
(4) illicit acts which are voluntary &
are punishable by law (crimes)
Baviera:
When the source of the
obligation is Law, there is no need for
an act or omission for the obligation to
arise.
CASE:
Sagrada
Orden
De
Predicadores
Del
Santismo
Rosario De Filipinas vs. National
Coconut Corporation, June 30,
1952, J. Labrador.
Facts:
Plaintiff
owned
disputed
property in Pandacan, Manila which
was acquired during the Japanese
occupation by Taiwan Tekkosho with
TCT. When the Philippines was ceded
to USA, the same was entrusted to
Alien Property Custodian, APC by the
US government. APC took possession,
control and custody under the Trading
with the Enemy Act. APC allowed
Copra Export Management Co. to
occupy the property for a fee. RP
(Republic of the Philippines) later
made representation with APC to use
the same property with warehouse
which was repaired by NACOCO
(National Coconut Corp.) and was
leased to Dioscoro Sarile. The latter
failed to pay rentals on the property. In
an action to recover possession of the
property, the court nullified the sale to
Taiwan Tekkosho and cancelled its TCT
and ordered reversion of title to
plaintiff, and right of recovery from
NACOCO of rentals to the property.
ISSUE: WON NACOCO is liable to pay

back rentals?
HELD: If defendant-appellant is liable
at all, its obligations must arise from
any of the 4 sources of obligations,
namely, law, contract or quasi
contract, crime, or negligence. (Article
1089, Old Civil Code.) To determine
such,
the
following
must
be
understood:
As to crimes: Defendant-appellant is
not guilty of any offense at all,
because it entered into the premises &
occupied it with the permission of the
entity which had the legal control &
administration thereof, the Alien
Property Administration (APA).
As to Quasi-Delict:
Neither was
there any negligence on its part.
As to Contract: There was also no
privity (of contract or obligation)
between the APA & Taiwan Tekkosho,
which had secured the possession of
the property from the plaintiff-appellee
by the use of duress, such that the
Alien Property Custodian or its
permittee (defendant-appellant) may
be held responsible for the supposed
illegality of the occupation of the
property by said Tekkosho.
The
APA
had
the
control
&
administration of the property not as
successor to the interests of the
enemy holder of the title, the Taiwan
Tekkosho, but by express provision of
law.
Neither is it a trustee of the former
owner, the plaintiff-appellee herein,
but a trustee of the US Govt., in its
own right, to the exclusion of, &
against the claim or title of, the enemy
owner. From Aug. 1946, when def.appellant took possession, to the date
of the judgment on 2/28/48, the APA
had the absolute control of the
property as trustee of the US Govt.,
with power to dispose of it by sale or
otherwise, as though it were the
absolute owner.
Therefore, even if defendant were
liable to the APA for rentals, these
would not accrue to the benefit of the
plaintiff the old owner, but the US
Govt.
Balane: Is the enumeration in Article

1157 exclusive or merely illustrative?
Doctrine: The sense that the case
of Sagrada Orden tells us is that
the enumeration is exclusive.
In resolving the issue of whether the

defendant should be liable to pay
rentals, the SC used the process of
exclusion. For there to be an
obligation to pay rentals, that
obligation must arise from any of the
five (5) sources of obligations. If it
does not, then there is no obligation.
The clear implication of this ruling
is that, these five (5) are the only
sources of obligations.
The problem with Article 1157 is that it

might not cover all situations. For
example: Carale uses Dove as his
soap. He then hears an advertisement
from Proctor & Gamble that it is
offering a nice tumbler for those who
can collect 30 wrappers of Tide before
Feb. 29, 1996. So, Carale stopped
using Dove & started using Tide. He
was able to consume all 30 wrappers
on Feb. 29, 1996. He then went to
Proctor & Gamble (P & G) to exchange
the 30 Tide wrappers for a tumbler.
But P & G told Carale that their
tumblers run out of stock. Carale
contracted a skin allergy as a result of
using Tide in taking a bath.
The
question is: Does P & G have any
obligation to Carale. If we look at
Article 1157, this situation does not
fall in any of the five sources. So, we
know have a problem. The German
Civil Code (BGB) covers this situation.
The BGB has a sixth source of
obligation, the Auslobung, which
means a unilateral offer.
2. CONTRACTS:
Article
1159.
Obligations
arising from contracts have
the force of law between the
contracting
parties
and
should be complied with in
good faith.
Article 1305. A contract is a
meeting of minds between
two persons whereby one
binds himself, with respect to
the other, to give something
or to render some service.
Negotiation of contract is initiated
by an OFFER;
Autonomy
of
Contract
supposing the contract is valid and

enforceable, the terms of contract not
contrary to law, morals, GC, PP or PO,
the stipulations therewith should be
given effect. (One of fundamental
principles of contracts)
Balane: There are two parts in Article
1159.
Obligations
derived
from contract has the
force of law between
the contracting parties
(jus civili )
There
must
be
compliance in good
faith (jus gentium.)
CASE: Peoples
Car
Inc.
vs.
Commando
Security
Service
Agency,
May
22,
1973,
J.
Teehankee.
Facts: On April 5, 1970, Commando
Security Service Agencys security
guard on duty at the premises of
Peoples Car Inc., without authority,
consent, approval, knowledge or
orders from Peoples Car and/or
Commando Security brought out from
the compound a car belonging to a
customer and drove said car for a
place or places unknown, abandoning
his post as such security guard, and
while so driving, lost control of said
car, causing the same to fall into a
ditch. The customer, Joseph Luy had to
rent another car. Peoples Car incurred
actual damages of P8, 489.10.
Peoples Car sued Commando Security
for reimbursement.
Issue: WON Commando security is
liable to damages in accordance with
provisions of contract
Held: YES. Plaintiff was in law liable
to its customer for the damages
caused the customer's car, which had
been entrusted into its custody.
Plaintiff therefore was in law justified
in making good such damages and
relying in turn on defendant to honor
its contract and indemnify it for such
undisputed damages, which had been
caused directly by the unlawful and
wrongful acts of defendant's security
guard in breach of their contract. As
ordained in Article 1159, Civil Code,
"obligations arising from contracts
have the force of law between the
contracting parties and should be
complied with in good faith."
Plaintiff in law could not tell its
customer, as per the trial court's
view, that "under the Guard Service
Contract it was not liable for the
damage but the defendant" since
the
customer
could
not
hold
defendant
to
account
for
the
damages as he had no privity of
contract with defendant. Such an
approach of telling the adverse party
to go to court, notwithstanding his
plainly valid claim, aside from its
ethical deficiency among others,
could hardly create any goodwill for

plaintiff's business, in the same way
that defendant's baseless attempt to
evade fully discharging its contractual
liability
to
plaintiff
cannot
be
expected to have brought it more
business. Worse, the administration
of justice is prejudiced, since the
court dockets are unduly burdened
with unnecessary litigation.
Paragraph 4 of the contract,
which limits defendant's liability
for the amount of loss or damage
to any property of plaintiff to
"P1,000.00 per guard post," is by
its own terms applicable only for
loss or damage 'through the
negligence of its guards ...
during the watch hours" provided
that the same is duly reported by
plaintiff within 24 hours of the
occurrence
and
the
guard's
negligence is verified after proper
investigation with the attendance of
both
contracting
parties.
Said
paragraph is manifestly inapplicable
to the stipulated facts of record,
which involve neither property of
plaintiff that has been lost or
damaged at its premises nor mere
negligence of defendant's security
guard on duty.
Here, instead of defendant, through
its
assigned
security
guards,
complying
with
its
contractual
undertaking 'to safeguard and
protect the business premises of
(plaintiff) from theft, robbery,
vandalism and all other unlawful
acts of any person or persons,"
defendant's own guard on duty
unlawfully and wrongfully drove out
of plaintiffs premises a customer's
car, lost control of it on the highway
causing it to fall into a ditch, thereby
directly causing plaintiff to incur
actual damages in the total amount
of P8,489.10.
Defendant
is
therefore
undoubtedly liable to indemnify
plaintiff for the entire damages
thus
incurred,
since
under
paragraph 5 of their contract it
"assumed the responsibility for
the proper performance by the
guards employed of their duties
and (contracted to) be solely
responsible for the acts done
during their watch hours" and
"specifically released (plaintiff)
from any and all liabilities ... to
the third parties arising from the
acts or omissions done by the
guards during their tour of duty."
As plaintiff had duly discharged its
liability to the third party, its
customer, Joseph Luy, for the
undisputed damages of P8,489.10
caused said customer, due to the
wanton
and
unlawful
act
of
defendant's guard, defendant in turn

was clearly liable under the terms of
paragraph 5 of their contract to
indemnify plaintiff in the same
amount.
Case: Joseph Saludaga vs. far
Eastern University and Edilberto
De Jesus (President of FEU), April
30, 2008, J. Ynares-Santiago.
Facts: Petitioner Joseph Saludaga
was a sophomore law student of
respondent Far Eastern University
when he was shot by Alejandro
Rosete, one of the security guards on
duty at the school premises on
August 18, 1996. Rosete was brought
to the police station where he
explained that the shooting was
accidental.
He
was
eventually
released considering that no formal
complaint was filed against him.
Respondents, in turn, filed a ThirdParty Complaint against Galaxy
Development
and
Management
Corporation (Galaxy), the agency
contracted by respondent FEU to
provide security services within its
premises and Mariano D. Imperial
(Galaxys President), to indemnify
them for whatever would be adjudged
in favor of petitioner.
Petitioner is suing respondents for
damages based on the alleged
breach of student-school contract for
a safe and secure environment and
an atmosphere conducive to learning.
Issue: Whether or not FEU could be
held liable.
Held: YES. When an academic
institution accepts students for
enrollment, there is established
a
contract
between
them,
resulting in bilateral obligations
which both parties are bound to
comply with. For its part, the school
undertakes to provide the student
with an education that would
presumably suffice to equip him with
the necessary tools and skills to
pursue higher education or a
profession. On the other hand, the
student covenants to abide by the
schools academic requirements and
observe its rules and regulations.
Respondent FEU failed to discharge
the burden of proving that they
exercised due diligence in providing a
safe learning environment for their
students. It failed to show that they
undertook steps to ascertain and
confirm that the security guards
assigned to them actually possess the
qualifications required in the Security
Service Agreement. It was not
proven that they examined the
clearances,
psychiatric
test
results, 201 files, and other vital

documents enumerated in its
contract
with
Galaxy.
Total
reliance on the security agency
about these matters or failure to
check the papers stating the
qualifications of the guards is
negligence
on
the
part
of
respondents.
A
learning
institution should not be allowed
to
completely
relinquish
or
abdicate security matters in its
premises to the security agency
it hired. To do so would result to
contracting
away
its
inherent
obligation to ensure a safe learning
environment for its students.
Respondent FEU is liable to
petitioner for damages.
FEU cannot be held liable for
damages under Art. 2180 of the
Civil Code because respondents
are not the employers of Rosete.
The latter was employed by
Galaxy. The instructions issued by
respondents Security Consultant to
Galaxy and its security guards are
ordinarily no more than requests
commonly envisaged in the contract
for services entered into by a
principal and a security agency. They
cannot be construed as the element
of control as to treat respondents as
the employers of Rosete. It had no
hand in selecting thesecurity guards.
Thus, the duty to observe the
diligence of a good father of a family
cannot be demanded from the said
client
FALLO
For these acts of negligence and for
having supplied respondent FEU with
an unqualified security guard, which
resulted to the latters breach of
obligation to petitioner, it is proper to
hold Galaxy liable to respondent FEU
for such damages equivalent to the
above-mentioned amounts awarded
to petitioner. Unlike respondent De
Jesus, we deem Imperial to be
solidarily liable with Galaxy for being
grossly negligent in directing the
affairs of the security agency.
Case: Faustino Cruz vs. J.M. Tuason
& Company, Inc. and Gregorio
Araneta, Inc., April 29, 1977, J.
Barredo.
Facts: Plaintiff-appellant's complaint
below shows that he alleged two
separate causes of action, namely:
(1) that upon request of the Deudors
(the family of Telesforo Deudor who
laid claim on the land in question on
the strength of an "informacion
posesoria") plaintiff made permanent
improvements valued at P30,400.00
on said land having an area of more
or less 20 quinones and for which he
also incurred expenses in the amount

of
P7,781.74,
and
since
defendants-appellees are being
benefited by said improvements,
he is entitled to reimbursement
from them of said amounts and
(2) that in 1952, defendants availed
of
plaintiff's
services
as
an
intermediary with the Deudors to
work for the amicable settlement of
Civil Case No. Q-135, then pending
also in the Court of First Instance of
Quezon City, and involving 50
quinones of land, of Which the 20
quinones aforementioned form part,
and notwithstanding his having
performed his services, as in fact, a
compromise agreement entered into
on March 16, 1963 between the
Deudors and the defendants was
approved by the court, the latter
have refused to convey to him
the 3,000 square meters of land
occupied by him, (a part of the
20 quinones above) which said
defendants had promised to do
"within ten years from and after
date
of
signing
of
the
compromise
agreement",
as
consideration for his services.
Issue: Whether or not Faustino Cruz
can claim reimbursement for the
expenses and services rendered.
Held: NO. We hold that the
allegations in his complaint do not
sufficiently Appellants' reliance on
Article 2142 of Civil Code is
misplaced. Said article provides:
Certain
lawful,
voluntary
and
unilateral acts give rise to the
juridical relation of quasi-contract to
the end that no one shall be unjustly
enriched or benefited at the expense
of another.
From the very language of this
provision, it is obvious that a
presumed qauasi-contract cannot
emerge as against one party when
the subject mater thereof is already
covered by an existing contract with
another party. Predicated on the
principle that no one should be
allowed to unjustly enrich himself at
the expense of another, Article 2124
creates the legal fiction of a quasicontract precisely because of the
absence of any actual agreement
between the parties concerned.
Corollarily, if the one who claims
having enriched somebody has done
so pursuant to a contract with a third
party, his cause of action should be
against the latter, who in turn may, if
there is any ground therefor, seek
relief against the party benefited. It is
essential that the act by which the
defendant is benefited must have
been voluntary and unilateral on the
part of the plaintiff. As one
distinguished civilian puts it, "The

act is voluntary because the
actor in quasi-contracts is not
bound
by
any
pre-existing
obligation to act. It is unilateral,
because it arises from the sole
will of the actor who is not
previously
bound
by
any
reciprocal
or
bilateral
agreement. The reason why the
law creates a juridical relations
and imposes certain obligation is
to prevent a situation where a
person is able to benefit or take
advantage
of
such
lawful,
voluntary and unilateral acts at
the expense of said actor."
(Ambrosio Padilla, Civil Law, Vol. VI, p.
748, 1969 ed.) In the case at bar,
since appellant has a clearer and
more direct recourse against the
Deudors with whom he had
entered
into
an
agreement
regarding the improvements and
expenditures made by him on the
land of appellees it Cannot be
said, in the sense contemplated
in Article 2142, that appellees
have been enriched at the
expense of appellant.
Case: Gutierrez Hermanos vs.
Engracio Orense, December 4,
1914, J. Torres.
Facts: Engracio Orense is the owner
of a parcel of land situated in Albay.
On February 14, 1907, Jose Duran,
Orenses nephew, with the latters
knowledge and consent, sold and
conveyed to Hermanos company for
P1,500 the aforementioned land with
the reservation of the former the right
to repurchase it for the same price
within a period of 4 years. But the
same land was not repurchased by
Jose Duran, being insolvent, which
correspondingly caused damage to the
firm of Hermanos. Despite repeated
demand upon Jose Duran, the latter
never
vacated
nor
transferred
ownership to Hermanoss firm, the
said land. His refusal was based
on the allegations that he had
been and was then the owner of
the said property, which was
registered in his name in the
property registry; that he had
not executed any written power
of attorney to Jose Duran, nor
had he given the latter any
verbal authorization to sell the
said property to the plaintiff firm
in his name; and that, prior to
the execution of the deed of sale,
the defendant performed no act
such as might have induced the
plaintiff to believe that Jose
Duran
was
empowered
and
authorized by the defendant to

effect the said sale.
The plaintiff firm, therefore, charged
Jose Duran, in the Court of First
Instance of the said province,
with estafa, for having represented
himself in the said deed of sale to be
the absolute owner of the aforesaid
land and improvements, whereas in
reality they did not belong to him, but
to the defendant Orense. However, at
the trial of the case Engracio Orense,
called
as
a
witness,
being
interrogated by the fiscal as to
whether he and consented to Duran's
selling the said property under right
of redemption to the firm of Gutierrez
Hermanos, replied that he had. In
view of this statement by the
defendant, the court acquitted
Jose Duran of the charge of
estafa.
As a result of the acquittal of Jose
Duran,
based
on
the
explicit
testimony of his uncle, Engacio
Orense,
the
owner
of
the
property, to the effect that he
had consented to his nephew
Duran's selling the property
under right of repurchase to
Gutierrez Hermanos, counsel for
this firm filed a complainant praying,
among other remedies, that the
defendant Orense be compelled to
execute a deed for the transfer and
conveyance to the plaintiff company
of all the right, title and interest with
Orense had in the property sold, and
to pay to the same the rental of the
property due from February 14, 1911.
Issue: Whether or not Orense can be
compelled to deliver the property to
Hermanos as premised above.
Held: YES. It having been proven at
the trial that he gave his consent to
the said sale, it follows that the
defendant conferred verbal, or at
least implied, power of agency upon
his nephew Duran, who accepted it in
the same way by selling the said
property. The principal must therefore
fulfill all the obligations contracted by
the agent, who acted within the
scope of his authority. (Civil Code,
arts. 1709, 1710 and 1727.)
Even should it be held that the
said
consent
was
granted
subsequently to the sale, it is
unquestionable
that
the
defendant, the owner of the
property, approved the action of
his nephew, who in this case
acted as the manager of his
uncle's business, and Orense'r
ratification produced the effect
of an express authorization to
make the said sale. (Civil Code,
arts. 1888 and 1892.)
Article 1259 of the Civil Code

prescribes: "No one can contract in
the name of another without
being authorized by him or
without his legal representation
according to law.
A contract executed in the
name of another by one who
has neither his authorization
nor legal representation shall
be void, unless it should be
ratified by the person in
whose name it was executed
before being revoked by the
other contracting party.
The sworn statement made by
the defendant, Orense, while
testifying as a witness at the trial
of Duran for estafa, virtually
confirms and ratifies the sale of
his property effected by his
nephew, Duran, and, pursuant to
article 1313 of the Civil Code,
remedies all defects which the
contract may have contained
from
the
moment
of
its
execution.
The sale of the said property made by
Duran to Gutierrez Hermanos was
indeed null and void in the beginning,
but afterwards became perfectly valid
and cured of the defect of nullity it
bore at its execution by the
confirmation solemnly made by the
said owner upon his stating under
oath to the judge that he himself
consented to his nephew Jose Duran's
making the said sale. Moreover,
pursuant to article 1309 of the Code,
the right of action for nullification that
could have been brought became
legally extinguished from the moment
the contract was validly confirmed
and ratified, and, in the present case,
it
is
unquestionable
that
the
defendant did confirm the said
contract of sale and consent to its
execution.
If
the
defendant
Orense
acknowledged
and
admitted
under
oath
that
he
had
consented to Jose Duran's selling
the property in litigation to
Gutierrez Hermanos, it is not just
nor is it permissible for him
afterward
to
deny
that
admission, to the prejudice of
the purchaser, who gave P1,500
for the said property.
The contract of sale of the said
property contained in the notarial
instrument of February 14, 1907, is
alleged to be invalid, null and void
under the provisions of paragraph 5
of section 335 of the Code of Civil
Procedure, because the authority
which Orense may have given to
Duran to make the said contract
of sale is not shown to have been
in writing and signed by Orense,
but
the
record
discloses
satisfactory and conclusive proof
that the defendant Orense gave
his consent to the contract of
sale
executed
in
a
public
instrument by his nephew Jose
Duran. Such consent was proven in a
criminal
action
by
the
sworn
testimony of the principal and
presented in this civil suit by other
sworn testimony of the same
principal and by other evidence to
which the defendant made no
objection. Therefore the principal is
bound to abide by the consequences
of his agency as though it had
actually been given in writing (Conlu
vs. Araneta and Guanko, 15 Phil.
Rep., 387; Gallemit vs. Tabiliran, 20
Phil. Rep., 241; Kuenzle & Streiff vs.
Jiongco, 22 Phil. Rep., 110.)
The repeated and successive
statements
made
by
the
defendant Orense in two actions,
wherein he affirmed that he had
given his consent to the sale of
his
property,
meet
the
requirements of the law and
legally excuse the lack of written
authority, and, as they are a full
ratification of the acts executed
by his nephew Jose Duran, they
produce the effects of an express
power of agency.
3. QUASI-CONTRACTS:
derived from quasi-contracts
shall be subject to the
provisions of Chapter 1, Title
XVII, of this Book.
QUASI-CONTRACT is a juridical
relation which arises from certain
unlawful, voluntary and unilateral
acts to the end that no one may be
unjustly enriched or benefited at the
expense of another.
The act must be:
(1) Lawful thus different
from delict which is
unlawful;
(2) Voluntary
thus
different from quasi-delict
which is based on fault or
negligence or lack of
foresight;
(3) Unilateral
thus
different from contract, in
which parties agree.
e.g. in Negotiorum Gestio:
Benefits
Conferred
Voluntarily
For preservation of
Property or Business
EXTRA-CONTRACTUAL
OBLIGATIONS
(OBLIGATIONS
without
an
agreement / based in IMPLIED
CONSENT)
Q: HOW MANY?
A: In NCC, 2, nominate and some
innominate Quasi Contract.
a. Quasi-contracts
Article 2142. Certain lawful,
voluntary and unilateral acts
give rise to the juridical
relation of quasi-contract to
the end that no one shall be
unjustly enriched or benefited
at the expense of another.
Article 2143. The provisions
for quasi-contracts in this
Chapter do not exclude other
quasi-contracts which may
come within the purview of
the preceding article.
b. Negotiorum Gestio
Article
2144.
Whoever
voluntarily takes charge of
the agency or management
of the business or property of
another, without any power
from the latter, is obliged to
continue the same until the
termination of the affair and
its incidents, or to require the
person
concerned
to
substitute him, if the owner is
in a position to do so.
This juridical relation does
not arise in either of these
instances: ELEMENTS
(1) When the property or
business is not neglected
or abandoned;
(2) If in fact the manager has
been tacitly authorized by
the owner.
In
the
first
case,
the
provisions of articles 1317,
1403, No. 1, and 1404
regarding
unauthorized
contracts shall govern.
In the second case, the rules
on agency in Title X of this
Book shall be applicable.
NEGOTIORUM GESTIO
juridical relation which arises
whenever
a
person
voluntarily takes charge of an
agency or management of
the business or property of
another without any power or
authority from the latter.
Illustration:
1. Scenario: Lumubog na barko, what
if this one of the missing persons
landed on a remote island and only
one resident is present there or only
one family is living there in the island.
Anyway this resident found the dead
body of the missing person, and he
found it necessary to bury the dead
and he spent a sum of money of
400php. At any rate this resident, met
the aunt of the decease, and
demanded reimbursement for the
burial, is the residents demand valid?
Well if you read the provisions of the
quasi-contract, there is an obligation
to reimburse the person. In other
words, you have the obligation to
reimburse. But back to the question,
is there a valid demand? NO. if you
know, because the law on quasicontract would tell you that he has
the right to seek reimbursement from
anyone who is oblige to give support
and an aunt Is not oblige under the
law to give support. Theres no civil
obligation to give support.
Case: Rustico Adille

Asejos,
January 29,
Sarmiento.
vs. CA,
1988,
J.
Facts: Feliza Azul owns a parcel of

land. She married twice in her lifetime;
the first, with one Bernabe Adille with
whom she had as an only child,
herein defendant Rustico Adille; in her
second marriage with one Procopio
Asejo, her children were herein
plaintiffs. Sometime in 1939, said
Felisa sold the property in pacto de
retro to certain 3rd persons, period of
repurchase being 3 years, but she
died in 1942 without being able to
redeem and after her death, but
during the period of redemption,
herein defendant repurchased, by
himself alone, and after that, he
executed a deed of extra-judicial
partition representing himself to be
the only heir and child of his mother
Felisa with the consequence that he
was able to secure title in his name
alone also, so that OCT. No. 21137 in
the name of his mother was
transferred to his name, that was in
1955; that was why after some efforts
of compromise had failed, his halfbrothers and sisters, herein plaintiffs
(The Asejo siblings), filed present
case for partition with accounting on
the position that he was only a
trustee on an implied trust when he
redeemed,-and this is the evidence,
but as it also turned out that one of
plaintiffs,
Emeteria
Asejo
was
occupying a portion, defendant

counterclaimed for her to vacate that.
Issue: Whether or not Adille can
acquire exclusive ownership over the
land.
Held: NO. It is the view of the
respondent Court that the petitioner,
in taking over the property, did so
either on behalf of his co-heirs, in
which event, he had constituted
himself a negotiorum gestor
under Article 2144 of the Civil
Code, or for his exclusive benefit,
in which case, he is guilty of
fraud, and must act as trustee,
the private respondents being
the beneficiaries, under the
Article 1456. The evidence, of
course,
points
to
the
second
alternative the petitioner having
asserted
claims
of
exclusive
ownership over the property and
having acted in fraud of his co-heirs.
He cannot therefore be said to
have
assume
the
mere
management of the property
abandoned by his co-heirs, the
situation Article 2144 of the Code
contemplates. In any case, as the
respondent Court itself affirms, the
result would be the same whether it
is one or the other. The petitioner
would remain liable to the Private
respondents, his co-heirs.
c. Solutio indebiti
Article 2154. If something is
received when there is no
right to demand it, and it was
unduly
delivered
through
mistake, the obligation to
return it arises.
SOLUTIO
INDEBITI
juridical relation which arise

whenever
person unduly
delivers a thing through or by
mistake of another who has
no right to demand it.
Case: Dometila Andres, doing

business under the name and
style
IRENES
WEARING
APPAREL
vs.
Manufacturers
Hanover & Trust Corporation, CA,
September 15, 1989, J. Cortes.
Facts: Petitioner, using the business
name "Irene's Wearing Apparel," was
engaged in the manufacture of ladies
garments, children's wear, men's
apparel and linens for local and
foreign buyers. Among its foreign
buyers was Facets Funwear, Inc.
(hereinafter referred to as FACETS) of
the United States. In the course of the
business transaction between the

two, FACETS from time to time
remitted certain amounts of money to
petitioner in payment for the items it
had purchased. Sometime in August
1980, FACETS instructed the First
National State Bank of New Jersey,
Newark,
New
Jersey,
U.S.A.
(hereinafter referred to as FNSB) to
transfer $10,000.00 to petitioner via
Philippine National Bank, Sta. Cruz
Branch, Manila (hereinafter referred
to as PNB).
Acting on said instruction, FNSB
instructed
private
respondent
Manufacturers Hanover and Trust
Corporation to effect the abovementioned
transfer
through
its
facilities and to charge the amount to
the account of FNSB with private
respondent.
Although
private
respondent was able to send a telex
to PNB to pay petitioner $10,000.00
through the Pilipinas Bank, where
petitioner had an account, the
payment
was
not
effected
immediately because the payee
designated in the telex was only
"Wearing Apparel." Upon query by
PNB, private respondent sent PNB
another telex dated August 27, 1980
stating that the payment was to be
made to "Irene's Wearing Apparel."
On August 28, 1980, petitioner
received
the
remittance
of
$10,000.00 through Demand Draft
No. 225654 of the PNB.
Meanwhile, on August 25, 1980, after

learning about the delay in the
remittance
of
the
money
to
petitioner, FACETS informed FNSB
about the situation. On September 8,
1980, unaware that petitioner had
already received the remittance,
FACETS informed private respondent
about the delay and at the same time
amended its instruction by asking it
to effect the payment through the
Philippine Commercial and Industrial
Bank (hereinafter referred to as PCIB)
instead of PNB.
Accordingly,
private
respondent,
which was also unaware that
petitioner had already received the
remittance of $10,000.00 from PNB
instructed the PCIB to pay $10,000.00
to petitioner. Hence, on September
11, 1980, petitioner received a
second $10,000.00 remittance.
Private respondent asked petitioner
for the return of the second
remittance of $10,000.00 but the
latter refused to pay.
Issue: Whether or not Mantrust can

recover the second remittance worth
$10,000.
Held: YES. The contract of petitioner,
as regards the sale of garments and
other textile products, was with
FACETS. It was the latter and not
private
respondent
which
was
indebted to petitioner. On the other
hand, the contract for the transmittal
of dollars from the United States to
petitioner was entered into by private
respondent with FNSB. Petitioner,
although named as the payee was
not privy to the contract of
remittance of dollars. Neither was
private respondent a party to the
contract of sale between petitioner
and
FACETS.
There
being
no
contractual relation between them,
petitioner has no right to apply the
second
$10,000.00
remittance
delivered by mistake by private
respondent
to
the
outstanding
account of FACETS.
Art. 2154. If something received

when there is no right to demand it,
and it was unduly delivered through
mistake, the obligation to return it
arises.
This provision is taken from Art. 1895

of the Spanish Civil Code which
provided that:
Art. 1895. If a thing is received when

there was no right to claim it and
which, through an error, has been
unduly delivered, an obligation to
restore it arises.
In Velez v. Balzarza, 73 Phil. 630

(1942), the Court, speaking through
Mr. Justice Bocobo explained the
nature of this article thus:
Article 1895 [now Article 2154] of the

Civil Code abovequoted, is therefore
applicable. This legal provision, which
determines the quasi-contract of
solution indebiti, is one of the
concrete
manifestations
of
the
ancient principle that no one shall
enrich himself unjustly at the expense
of another. In the Roman Law Digest
the maxim was formulated thus: "Jure
naturae acquum est, neminem cum
alterius detrimento et injuria fieri
locupletiorem." And the Partidas

declared:
"Ninguno
non
deue
enriquecerse
tortizeramente
con
dano de otro." Such axiom has grown
through the centuries in legislation, in
the science of law and in court
decisions. The lawmaker has found it
one of the helpful guides in framing
statutes and codes. Thus, it is
unfolded in many articles scattered in
the Spanish Civil Code. (See for
example, articles, 360, 361, 464, 647,
648, 797, 1158, 1163, 1295, 1303,
1304, 1893 and 1895, Civil Code.)
This time-honored aphorism has also
been adopted by jurists in their study
of the conflict of rights. It has been
accepted by the courts, which have
not hesitated to apply it when the
exigencies of right and equity
demanded its assertion. It is a part of
that affluent reservoir of justice upon
which
judicial
discretion
draws
whenever the statutory laws are
inadequate because they do not
speak or do so with a confused voice.
[at p. 632.]
For this article to apply the following

requisites must concur: "(1) that he
who paid was not under obligation to
do so; and, (2) that payment was
made by reason of an essential
mistake of fact" [City of Cebu v.
Piccio, 110 Phil. 558, 563 (1960)].
It
is
undisputed
that
private
respondent delivered the second
$10,000.00 remittance. However,
petitioner contends that the doctrine
of solutio indebiti, does not apply
because its requisites are absent.
First, it is argued that petitioner had

the right to demand and therefore to
retain
the
second
$10,000.00
remittance. It is alleged that even
after
the
two
$10,000.00
remittances
are
credited
to
petitioner's
receivables
from
FACETS, the latter allegedly still
had a balance of $49,324.00.
Hence, it is argued that the last
$10,000.00 remittance being in
payment of a pre-existing debt,
petitioner was not thereby unjustly
enriched.
Petitioner invokes the equitable
principle that when one of two
innocent persons must suffer by the
wrongful act of a third person, the
loss must be borne by the one whose
negligence was the proximate cause

of the loss.
The rule is that principles of equity

cannot be applied if there is a
provision of law specifically applicable
to a case. ... The common law
principle that where one of two
innocent persons must suffer by a
fraud perpetrated by another, the law
imposes the loss upon the party who,
by his misplaced confidence, has
enabled the fraud to be committed,
cannot be applied in a case which is
covered by an express provision of
the new Civil Code, specifically Article
559. Between a common law principle
and a statutory provision, the latter
must prevail in this jurisdiction. [at p.
135.]
Having shown that Art. 2154 of

the Civil Code, which embodies
the doctrine of solutio indebiti,
applies in the case at bar, the
Court must reject the common
law
principle
invoked
by
petitioner.
Case: Gonzalo Puyat & Sons, Inc.

vs. City of Manila and Marcelo
Sarmiento, as City Treasurer, April
30, 1963, J. Paredes.
Facts: Gonzalo Puyat & Sons, Inc. is
engaged
in
the
business
of
manufacturing and selling all kinds of
furniture at its factory in Manila.
Pursuant to Ordinance No. 3364,
Manila assessed from Puyat retail
dealers tax which the latter paid
without protest in the erroneous belief
that it was liable therefore. Puyat
subsequently found that it was exempt
from said taxes as provided under
Ordinance No. 3816, Puyat claimed for
refund.
Issue: Whether the taxes paid without
protest are refundable.
Held: YES. Appellants do not dispute
the fact that appellee-companyis
exempted from the payment of the
tax in question.This is manifest from
the reply of appellant City Treasurer
stating that sales of manufactured
products at the factory site are not
taxable either under the Wholesalers
Ordinance or under the Retailers'
Ordinance. With this admission, it
would seem clear that the taxes
collected from appellee were paid,
thru an error or mistake, which places
said act of payment within the pale of

the new Civil Code provision on
solutio indebiti. The appellant City of
Manila,
at
the
very
start,
notwithstanding
the
Ordinance
imposing the Retailer's Tax, had no
right to demand payment thereof..
"If something is received when
there is no right to demand it,
and it was unduly delivered
through mistake, the obligationto
retun it arises" (Art. 2154, NCC)..
Appelle categorically stated that
the payment was not voluntarily
made, (a fact found also by the
lower
court),but
on
the
erronoues belief, that they were
due. Under this circumstance, the
amount
paid,
even
without
protest is recoverable. "If the
payer was in doubt whether the
debt was due, he may recover if
he proves that it was not due"
(Art. 2156, NCC). Appellee had
duly proved that taxes were not
lawfully due. There is, therefore, no
doubt that the provisions of solutio
indebtiti, the new Civil Code, apply to
the admitted facts of the case.
With all, appellant quoted Manresa as
saying: "x x x De la misma opinion
son el Sr. Sanchez Roman y el Sr.
Galcon, et cual afirma que si la paga
se hizo por error de derecho, ni existe
el cuasi-contrato ni esta obligado a la
restitucion el que cobro, aunque no
se debiera lo que se pago" (Manresa,
Tomo 12, paginas 611-612). This
opinion, however, has already lost its
persuasiveness, in view of the
provisions
of
the
Civil
Code,
recognizing "error de derecho" as a
basis for the quasi-contract, of solutio
indebiti. .
"Payment by reason of a mistake
in the contruction or application
of a doubtful or difficult question
of law may come within the
scope of the preceding article"
(Art. 21555)..
There is no gainsaying the fact that
the payments made by appellee was
due to a mistake in the construction
of a doubtful question of law.
4.
ACTS
OR
OMISSIONS
PUNISHED BY LAW (DELICT or
CRIMES but not Felony which is
limited only to those punished under
RPC)
Article 1167. If a person
obliged to do something fails
to do it, the same shall be
executed at his cost. This
same rule shall be observed if
he does it in contravention of
the tenor of the obligation.
Furthermore,
it
may
be
decreed that what has been

poorly done be undone.
Balane: Crime as a source of
obligation There are many crimes
from which, civil liability arises in their
commission, in addition to the criminal
penalty attached to them.
This
underlines the two aspects in a crime:
one, as an offense against the
state, & two as an offense against
the victim. It is in the latter case that
civil liability is recoverable.
As
far
as
crime
is
concerned, civil law is not
concerned with the penal
liability but only with the
civil liability.
Performance at debtors cost

non-compliance with OBLIGATION to
do, creditor may do it himself or get a
3rd person at the expense of the
debtor;
when OBLIGATION to do can

only be performed by debtor
he cannot compelled to do so
by force, the only remedy is
damages;
Article 2177. Responsibility
for fault or negligence under
the
preceding
article
is
entirely separate and distinct
from the civil liability arising
from negligence under the
Penal Code. But the plaintiff
cannot
recover
damages
twice for the same act or
omission of the defendant.
TITLE V - Civil Liability, RPC:

CHAPTER ONE - Persons Civilly
Liable for Felonies
Article 100. Civil liability of a
person guilty of felony. Every person criminally liable
for a felony is also civilly
liable.
[CHAPTER 2, RPC:
Liability Includes]
What Civil
Article
104.
What
is
included in civil liability.
The civil liability established
in articles 100, 101, 102, and
103 of this Code includes:
1. Restitution;
2. Reparation of
the
damage
caused;
3. Indemnification
for
consequential
damages.
Baviera: Requisites of enforcing the
subsidiary obligation of the employer
under the RPC:
-criminal case was filed against the
employee
-the act or negligence arose during or
in connection with the performance of
the latters employment
-the employee is found guilty of
criminal negligence
-a writ of execution has been returned
unsatisfied, i.e. employee has been
found to be insolvent.
There is no res judicata as regards the

Employer as there is a difference in
the Cause of Action. Quasi-delict (QD)
differs from an action based on delict
on the following grounds:
QUASI DELICT
it is subsidiary (imputed)
Diligence of good father of
the family may be set up
by the ER as a defense
DELICT
contractual
relation
between the parties, is
called a quasi-delict and is
governed
by
the
provisions of this Chapter.
(memorize!)
derived from quasi-delicts
shall be governed by the
provisions of Chapter 2,
Title XVII of this Book, and
by special laws.
* Torts is seldom used by SC in this
jurisdiction, it is broader term for
actionable wrong which may not be
negligence,
may
be
malicious
tortuous act which is not anymore
Quasi Delict.
QUASI-DELICTS the fault

or negligence of a person
who, by his act or omission
connected or not with, but
independent
from
any
contractual relation, causes
damage to another person;
The omission to do something

which ordinarily reasonable
men
guided
by
those
considerations
which
ordinarily regulate the conduct
of human affairs, would do; or
doing
something
which
prudent and reasonable men
would not do.
Liability on Quasi Delict is
based on equity, man is
responsible not only for acts
conscious and intentional acts
but also for his lack of
foresight, care and diligence
which may cause harm to
another.
ELEMENTS:
(1) A duty on the part of
the
defendant
to
protect the plaintiff
from the injury of
which
the
latter
complains;
(2) A failure to perform
that duty, and
(3) An injury to the
plaintiff through such
failure.
Notice that the choice of

ERs liability is primary in
cause of action will determine
RPC
three things: the theory of
the plaintiff, the defense
In RPC, such defense of
of the defendant & the
GFF is not available
question of whom to sue.
A person while not criminally

liable may still be civilly liable
Failure of the plaintiff to reserve
in the criminal case his right to file
a separate civil action is not fatal
to the civil action after the
acquittal of the accused.
sources. For example, Alinea is the

owner of a bus co., the Alinea Bus Co.,
Molina is a driver of one of the buses
of Alinea Bus Co. Lagdameo rode the
bus being driven by Molina. As a
result of the reckless driving of Molina,
Lagdameo suffered injuries. In this
case, Lagdameo has a choice-- he can
sue on either contract, quasi-delict or
on crime. If he decided to sue on the
breach of the contract of carriage, all
he has to prove is the (existence of
the contract) & that it was not
performed. In this case, he can sue
the common carrier but not the driver
because he has no contract with the
driver. If he sues on quasi-delict, he
can sue both the common carrier &
the driver. The defense of the driver
would be diligence in driving (or
fortuitous event.) The defense of the
common carrier would be diligence in
the selection & supervision of
employees. If he sues under crime, he
has to sue the driver. In case the
driver is convicted & has been
sentenced to pay civil liability, the
employer
(Alinea
Bus
Co.)
is
subsidiarily liable.
If Molina is
insolvent, Alinea Bus Co. will pay.
When the acquittal is based

on ground that the guilt of the
accused has not been proved
beyond reasonable doubt,
plaintiff has the right to
institute a civil action for
damages (culpa aquiliana).
Q: Is it possible that even if there is a

contract between the parties, a quasidelict can still be committed by one
against the other regarding the area
covered by the contract?
A:
Yes, according to the case of
Araneta v. de Joya, 57 SCRA 59.
The same act can give rise to
obligations arising from different
Again, remember that in this

case, the victim has a choice.
Provided that he is consistent
with his theory & provided,
further, that he cannot
recover damages twice for
the same injury.
Baviera: The terms of the contract

cannot be against mandatory &
prohibitive laws. And if the contract is
valid, it shall have the force of law
between the contracting parties.
5.
QUASI-DELICTS:
(culpa
aquiliana / negligence / torts*)
[NCC, CHAPTER 2 - Quasidelicts]
Article 2176. Whoever by
act or omission causes
damage to another, there
being fault or negligence,
is obliged to pay for the
damage done. Such fault
or negligence, if there is
no
pre-existing
TEST
OF
NEGLIGENCE:
Would a prudent man, in the
position of the person on who
negligence
is
attributed,
foresee harm to the person
injured
as
a
reasonable
consequence of the course
about to be pursued?
KINDS OF NEGLIGENCE:
(1) Culpa
aquiliana,
also known as culpa
extra-contractual,
or negligence as a
source of OBLIGATION,
QUASI-DELICT;
Governed by
Arts.
21762194
NO
contractual
relation at all
(2) Culpa contractual,
or negligence in the
performance
of
a
contractual
OBLIGATION.
Governed
by
Article
1179
(common carrier),
& all on contracts
PERSONS
LIABLE:
(IMPUTED/vicarious LIABILITY,
2180)
1.
father / mother
2.
guardians
3.
owners/managers
4.
employers
5.
the State
6.
teachers
The responsibility shall cease

if they can prove that they
have observed diligence of
good father of the family
to prevent damage;
REQUISITES
(IMPUTED):
OF
A TORT is a civil wrong (an

actionable wrong) consisting of a
violation of a right or a breach of duty
for which the law grants a remedy in
damages or other relief. The right is
created by law in favor of a person
called a creditor to compel another
called a debtor to observe duty or a
prestation either to render what is
due him or to refrain from causing
him injury.
Classes of Torts According

Manner of Commission
1.
a.
tortfeasor desires
to
cause
the
consequences of
his act, or
b.
tortfeasor
believes that the
consequences are
substantially
certain to result
from it
c.
2.
the fault of negligence of

the defendant
2.
the damage suffered or

incurred by the plaintiff
the relation of the fault or
negligence and damage
incurred by the plaintiff
Balane:
The Code Commission did not choose
to use tort. This is because tort does
not exactly have the same meaning as
quasi-delict. Tort [BROADER] covers
3.
to
Intentional Torts
ex. Article 26, 32

& 33 (CC)
Negligent Torts:
d.
tortfeasors
conduct
merely
creates
a
forseeable risk of
harm which may
or may not occur
e.
Article 2176 (CC)
LIABILITY
1.
3.
intentional torts which in quasidelict is considered as civil liability

arising from acts or omissions
punishable by law. There are some QD
which are not covered by tort. Dean
Bocobo suggested the ancient term
culpa aquiliana. But this did not
merit the approval of the Code
Commission.
Strict
Torts:
f.
Liability
Ex. Article 2183 &

2187 (CC)
Q: If there is a contract between the

parties, can there be a quasi-delict
committed by one against the other
regarding the area covered by the
contract?
A: If you look at Article 2176, you get

the impression that if there is a
contract between the parties, they
cannot be liable for quasi-delict on an
area covered by the contract. The
case of Cangco has not really resolve
this controversy.
Case: Jose Cangco vs. Manila

Railroad Co., October 14, 1918, J.
Fisher.
Facts: Cangco was an employee of
Manila Railroad Co. He takes the train
going home from work. That day he
alighted from the train while it was still
slightly in motion. He landed on the
elevated platform on top of some
sacks of watermelon which made him
fall violently, rolled away from the
platform under the moving train where
he badly crashed and lacerated his
right arm. It happened at night
between 7-8pm and the station was
poorly lit. Resulting from such incident,
Cangcos arm was amputated twice.
The seriousness of his injury made him
file a case for damages against MRR
Co. The latter then interposed the
defense that the direct and
proximate cause of the injury
suffered by the plaintiff was his
own contributory negligence in
failing to wait until the train had
come to a complete stop before
alighting.
Issue: Whether or not the conduct of
Cangco
was
characterized
by
imprudence so as to hold him liable
because
of
his
contributory
negligence.
Held: NO. can not be doubted that
the employees of the railroad
company were guilty of negligence in
piling these sacks on the platform in
the manner above stated; that their
presence caused the plaintiff to fall as
he alighted from the train; and that
they
therefore
constituted
an
effective legal cause of the injuries
sustained
by
the
plaintiff.
It
necessarily follows that the defendant
company is liable for the damage
thereby occasioned unless recovery
is barred by the plaintiff's own
contributory negligence.
It is important to note that the
foundation of the legal liability of the
defendant is the contract of
carriage, and that the obligation to
respond for the damage which
plaintiff has suffered arises, if at all,
from the breach of that contract by
reason of the failure of defendant to
exercise due care in its performance.
That is to say, its liability is direct

and
immediate,
differing
essentially, in legal viewpoint from
that presumptive responsibility for
the negligence of its servants,
[RESPONDEAT SUPERIOR], which
can be rebutted by proof of the
exercise of due care in their selection
and supervision. (presumption juris
tantum, rebuttable). Imputed liability
in
NCC
is
not
applicable
to
obligations arising ex contractu,
but
only
to
extra-contractual
obligations, or to use the technical
form of expression, that article relates
only to culpa aquiliana and not to
culpa contractual.
Every legal obligation must of
necessity be extra-contractual or
contractual.
Extra-contractual
obligation has its source in the
breach or omission of those
mutual duties which civilized
society
imposes
upon
it
members, or which arise from these
relations, other than contractual, of
certain members of society to others,
generally embraced in the concept of
status.
The fundamental distinction between
obligations of this character and
those which arise from contract, rests
upon the fact that in cases of noncontractual obligation it is the
wrongful or negligent act or
omission itself which creates the
vinculum
juris,
whereas
in
contractual relations the vinculum
exists independently of the breach of
the voluntary duty assumed by the
parties when entering into the
contractual relation.
The contract of defendant to
transport plaintiff carried with it,
by implication, the duty to carry
him in safety and to provide safe
means of entering and leaving its
trains (contract of carriage). That
duty, being contractual, was direct
and
immediate,
and
its
nonperformance could not be excused by
proof that the fault was morally
imputable to defendant's servants.
The railroad company's
defense involves the assumption that
even granting that the negligent
conduct of its servants in placing an
obstruction upon the platform was a
breach of its contractual obligation to
maintain safe means of approaching
and leaving its trains, the direct and
proximate cause of the injury
suffered by plaintiff was his own
contributory negligence in failing
to wait until the train had come to a
complete
stop
before
alighting
(Doctrine
of
comparative
negligence, Rakes doctrine). If the
accident was caused by plaintiff's
own negligence, no liability is
imposed upon defendant's negligence
and plaintiff's negligence merely
contributed
to
his
injury,
the
damages should be apportioned. It is,
therefore, important to ascertain if
defendant was in fact guilty of
negligence.
Violation of the contract gives

rise to liability but not to the
juridical tie. Juridical tie is not
borne by a violation. In quasidelict, it is precisely the
wrongful act which gives
rise to the juridical tie.
Liability & juridical tie are
simultaneous.
The test by which to

determine whether the
passenger has been guilty
of
negligence
in
attempting to alight from
a moving railway train, is
that
of
ordinary
or
reasonable care. It is to be
considered
whether
an
ordinarily prudent person,
of the age, sex and
condition
of
the
passenger,
would
have
acted as the passenger
acted
under
the
circumstances
disclosed
by the evidence. This care
has been defined to be, not
the care which may or should
be used by the prudent man
generally, but the care which
a man of ordinary prudence
would use under similar
circumstances,
to
avoid
injury."
(Thompson,
Commentaries on Negligence,
vol. 3, sec. 3010.)
Contracts & quasi-delicts create

two concentric circles with quasidelict as the bigger circle.
RULING: that the train was barely

moving when plaintiff alighted is
shown conclusively by the fact that it
came to stop within six meters from
the place where he stepped from it.
Thousands of person alight from
trains under these conditions every
day of the year, and sustain no injury
where the company has kept its
platform
free
from
dangerous
obstructions. There is no reason to
believe that plaintiff would have
suffered any injury whatever in
alighting as he did had it not been for
defendant's negligent failure to
perform its duty to provide a safe
alighting place.
Balane:
There are two important
principles that we learn from this case:
The
difference
in
concept
between contract & quasi-delict
is that in a contract, there is a
pre-existing
juridical
tie
between
the
parties.
[Note: There is a little mistake in

Cangco. The SC said that the driver
can be sued under culpa contractual.
This is wrong. The driver cannot be
sued as he has no privity of contract
with the passenger.]
CASE DOCTRINE: Where there could

still be Quasi Delict even when there
is contract of carriage.
CASE:
Narciso
Gutierrez
vs.
Bonifacio
Gutierrez,
et
al.,
September 23, 1931, J. Malcolm.
FACTS: On February 2, 1930, a
passenger truck and an automobile of
private ownership collided while
attempting to pass each other on the
Talon bridge on the Manila South
Road in the municipality of Las Pias,
Province of Rizal. The truck was
driven by the chauffeur Abelardo
Velasco, and was owned by Saturnino
Cortez. The automobile was being
operated by Bonifacio Gutierrez, a lad
18 years of age, and was owned by
Bonifacio's father and mother, Mr.
and Mrs. Manuel Gutierrez. At the
time of the collision, the father was
not in the car, but the mother,
together will several other members
of the Gutierrez family, seven in all,
were accommodated therein. A
passenger in the autobus, by the
name of Narciso Gutierrez, was en
route from San Pablo, Laguna, to
Manila. The collision between the bus
and the automobile resulted in
Narciso Gutierrez suffering a fracture
right leg which required medical
attendance for a considerable period
of time, and which even at the date of
the trial appears not to have healed
properly.
Issue: Whether or not Bonifacios
father, not present during the incident
could be held liable for damages to
Narciso.
HELD: The court found both drivers

negligent. The owner of the truck was
made liable for culpa contractual,
under the contract of carriage. The
owner of the car was made liable
under Article 2180, imputed liability
for culpa aquiliana. In amplification
of
so
much
of
the
above
pronouncement as concerns the
Gutierrez family, it may be explained
that the youth Bonifacio was in
incompetent chauffeur, that he was
driving at an excessive rate of speed,
and that, on approaching the bridge
and the truck, he lost his head and so
contributed by his negligence to the
accident. The guaranty given by the
father at the time the son was
granted a license to operate motor
vehicles made the father responsible
for the acts of his son. Based on
these
facts,
pursuant
to
the
provisions of article 1903 of the
Civil Code, the father alone and
not the minor or the mother,
would be liable for the damages
caused by the minor.
The liability of Saturnino Cortez,
the owner of the truck, and of his
chauffeur Abelardo Velasco rests
on a different basis, namely, that of
contract which, we think, has been
sufficiently demonstrated by the
allegations of the complaint, not
controverted, and the evidence. The
reason for this conclusion reaches to
the findings of the trial court
concerning the position of the truck
on the bridge, the speed in operating
the machine, and the lack of care
employed by the chauffeur. While
these facts are not as clearly
evidenced as are those which convict
the other defendant, we nevertheless
hesitate to disregard the points
emphasized by the trial judge. In its
broader aspects, the case is one of
two drivers approaching a narrow
bridge from opposite directions, with
neither being willing to slow up and
give the right of way to the other,
with the inevitable result of a collision
and an accident.
The defendants Velasco and Cortez
further contend that there existed
contributory negligence on the part of
the plaintiff, consisting principally of
his keeping his foot outside the truck,
which occasioned his injury. In this
connection, it is sufficient to state
that, aside from the fact that the
defense of contributory negligence
was not pleaded, the evidence
bearing out this theory of the case is
contradictory in the extreme and
leads us far afield into speculative
matters.
FRAUD
Culpa produces injury and without which

the result
mere want
of would not have occurred.
care or diligence,
not voluntary act
or omission
The exemplification by the Court in
one case is simple and explicit; viz:
"(T)he proximate legal cause is
acting first and producing the
Gives
rise
to
the wantthat
or care
injury, either immediately or by
OBLIGATION
or diligence
setting other events in motion, all
A single act may
constituting a natural and continuous
be a crime and a
chain of events, each having a close
QD at the same
causal connection with its immediate
time; (Article 100,
predecessor, the final event in the
RPC)
chain immediately affecting the injury
Injured
party
as a natural and probable result of
cannot
recover
the cause which first acted under
damages
twice
such circumstances that the person
for the same act
responsible for the first event should,
or omission of
as
an
ordinarily
prudent
and
defendant; (must
intelligent
person,
have
reasonable
choose
1
ground to expect at the moment of
Remedy)
his act or default that an injury to
some person might probably result
QUASI-DELICT
CRIME
therefrom."
As
to private right
public right
nature
of Right
Illustrations:
violated
1. Sources of obligations: 1157:
Is
a the individual
the StateAre there other sources of
Wrong
obligations aside from those
against
provided by law? No. Art. 1157
Criminal not needed
Necessary
is exclusive based on the case of
Intent
Sagrada.
Legal
Broad
penal law necessary
Basis for
liability
Liability
every QD gives rise to there
are may
crimes
2. Who
be considered privy
for
liability for damages
without civil
to liability
the
contract?
Heirs,
Damage
successors in interest.
s
Form of reparation
for
injury punishment/fine/impri
Redress
suffered/indemnification/co sonment
mpensation
3. There are certain facts which
not be proven, there is no
Quantu
Preponderance
Beyond need
reasonable
m
of
doubt need to allege such facts because
the law presumes the existence
Evidenc
of a right and presumes the
e
of a fact, hence, it is
Compro
can be compromised
criminal existence
liability can
mise
never not alwaysbetrue that whoever
alleges the fact must prove the
compromised
existence of such fact.
REQUISITES
FOR
LIABILITY:
(onus)
(1) Wrongful act or omission
4. Contracts: How would you
imputable to the defendant by
know if there are obligations
reason
of
his
fault
or
arising from a contract? By
negligence;
considering
the
terms
and
(2) Damage or injury proven by
conditions of contract, by reading
the person claiming recovery;
the terms and conditions of the
(3) A direct causal connection
contract, you will determine
between the negligent act and
whether or not there is an
the injury.
obligation arising from such
contract. Incidentally, does it
DOCTRINE OF PROXIMATE CAUSE
mean
that
there
is
no
is that which, in natural and
stipulation,
therefore
an
continuous sequence, unbroken by
agreement is not part of the
any efficient intervening cause,
contract? Not necessarily, an
NEGLIGENCE
Nature of Act
dolo
involves
willfulness
or
deliberate
intent to cause
damage
or
injury
to
another
the act itself
obligation may arise even without

a stipulation like warranty against
eviction. A limitation provided
by law as to terms and
conditions? It must not be
contrary to law, morals, public
policy.
But
before
an
obligation
arises,
what
transpires?
Negotiation.
Negotiation is initiated by
what?
Offer.
During
the
negotiation,
the
offeror
withdrew the offer, will there
be an obligation? Yes. What
source? It depends if there is
bad faith, if there is negligence on
the part of the offeror in not
communicating
as
soon
as
possible the same is quasidelict. If bad faith, Art. 19, 20,
and 21 I which is law, but the
SC generally would consider
the source of obligation as
tort.
5. Peoples car Case: Issue:

Whether or not commando is
liable for the entire amount of
damages instead of only 1,000.00
6. The owner of the house left

the
house
for
a
short
vacation, the very night, they
left, their house was burned,
the neighbors saved some of
their appliances, what is the
relationship?
Negotiorum
gestio, do you agree? No, these
appliances are not managed; this
will
fall
under
quasi-delict
because in negotiorum gestio
there must be abandonment or
neglect of the property. Another
reason why this is not negotiorum
gestio, this falls under the other
quasi-contracts. An obligation
arising from quasi-contract,
even if the obligor was not
unjustly enriched, or is it
required that he must be
unjustly enriched if he will
not perform an obligation
under quasi-contract? Despite
2142, is it possible that in a
quasi-contract there will be
no unjust enrichment? Yes,
read
the
provisions
on
negotiorum
gestio,
expressly
provided by law, even if the
owner is not enriched or unjustly
enriched, if he has an obligation.
It will appear therefore that
the principles behind quasicontracts are not really the
principle
of
unjust
enrichment. Thus, in other
countries,
the
principle
behind this obligations is, like
in the U.S. law and quasicontracts are considered to
fall under one source only
implied contracts, from that
alone the basis is consent
given by the obligor.
7. A bought a sack of rice from

B, P625, A gave 1K to B, B
gave the sack of rice to A, B
gave
475
to
A,
what
relationship
was
created?
Solutio indebiti. What is the
obligation? To return the excess
P100.
8. The
quasi-contracts
are
provided for in article 21652175, is this exclusive? No. it
is not exclusive as provided for in
article 2143.
9. Act or omission punishable by

law? These are crimes or delicts.
As to this source, once a
person in criminally liable, he
is also civilly liable? Not
necessarily, because are crimes
that does not make the criminal
civilly liable such as treason and
rebellion. The kinds of civil
liability arising from this
source? Restitution, reparation,
and indemnification. Every time
there is this civil liability, all
of these are present? Not
necessarily. Example: what will
be lacking? Restitution is lacking
in rape. When is restitution
present? Theft. But even in
murder
or
homicide,
restitution is not possible. If a
person committed an act
punished by law and there is
sufficient evidence to prove
such fact beyond reasonable
doubt,
nonetheless, is
it
possible for him not to be
committed? Yes, if the law
exempts him from liability, when
there
is
an
exempting
circumstance, such as minority,
so if there is exempting
circumstance there is civil
liability?
Yes.
Of
those
enumerated,
generally,
is
there civil liability? Yes, when
will there be no civil liability,
and what will be the basis
thereof? Quasi-delict, why not
delict? Because there is no
conviction.
If
there
is
no
conviction, there is no civil

liability
under
delict.
In
justifying circumstance, can
there be civil liability? As a
rule no civil liability, except
paragraph 4.
10. Torts, culpa acquiliana, culpa

extra
contractual,
quasi
delict: Under 2176 is simply,
Fault or Negligence, is there a
difference? Yes. Culpa extra
contractual is a good name
for quasi delict? This is outside
of the contract, if CEC, quasi
delict? This does not seem right,
culpa extra contractual, outside
of the contract, outside of the
contract there are how many
sources of obligations, four,
necessarily quasi delict? No. Can
there be negligence in the
performance of an obligation
arising from law, Yes, can a gestor
be negligent, Yes, but is that
negligence quasi delict? NO
because it will fall under
quasi-contract. The use of the
word
torts
is
criticized
because? torts is not the same
as quasi-delict, torts is a much
broader term that quasi delict,
because torts include intentional,
malicious,
while
quasi-delict
includes negligence only, is this
correct? 2176 first article in
quasi-delict, it provides for fault
or negligence, it did not mention
negligence only. The next article
2177, from this article, may an
act be the basis of liability under
two sources of obligation, Yes.
the only obligation provided
by law is? He cannot recover
twice. So if A was able to
recover from one case, he will
not have the right to recover
in any other case, correct?
Yes The Supreme Court held that
he can recover the difference if
the second award is greater for
instance in case 1 100K Case 2
150K, he has the right to recover
50K, but not 250K. Ultimately,
the claim of the author that quasi
delict should be limited to
negligent act, has not been
supported by the justices of the
SC, the SC would always claim,
that a single act may be a basis
of an action under delict, under
quasi delict, may be even under
contract if there is a pre-existing
contract, it is up to the aggrieved
party to choose his cause of
action, however, if he chooses
one cause of action, he must
comply to the requirements of the
cause of action, for example he

chose delict, then he has to have
the accused convicted. But if
contract,
the
law
already
presumes that there is negligence
in case of non performance. This
recommendation that quasi
delict should be limited to
negligent act has no basis
under the law, and has no
application
here
in
our
country, the best arguments
to this issue is this, if the act
is punished by law, you
should have the right to
recover civil liability only be
ensuring that the accused will
be convicted, otherwise, that
will encourage the people to
commit crime, people will
think that it is okay to commit
a crime because they can pay
their way out of it, however,
in the situation where the
husband is killed the mother
is the only one left with five
kids, will you fault them by
accepting the damages? I
think not.
11. A man buried a victim of

princess of the stars, the
relative
of
the
victim
appeared the man demanded
payment, from the relative
P300, can he demand from
the relative payment for
burying
the
victim?
The
obligation created here is quasi
delict, however, the man cannot
demand
payment
from
the
relative because the persons who
may be compelled is the persons
who is liable to give the victim
support.
C. COMPLIANCE
WITH
OBLIGATIONS:
Article 19. Every person
must, in the exercise of his
rights
and
in
the
performance of his duties,
act with justice, give
everyone his due, and
observe
honesty
and
good faith.
Article 1163. Every person
obliged to give something is
also obliged to take care of
it
with
the
proper
diligence
of
a
good
father of a family, unless
the law or the stipulation of
the parties requires another

standard of care.
performance by the
debtor
himself
(applies
only
to
OBLIGATION to give )
Article 1164. The creditor

has a right to the fruits of
the thing from the time the
obligation to deliver it
arises. However, he shall
acquire no real right over it
until the same has been
delivered to him.
Article 1165. When what
is to be delivered is a
determinate thing, the
creditor, in addition to the
right granted him by article
1170, may compel the
debtor to make the delivery.
If
the
thing
is
indeterminate
or
generic, he may ask that
the obligation be complied
with at the expense of the
debtor.
If the obligor delays, or
has promised to deliver the
same thing to two or more
persons who do not have
the same interest, he shall
be responsible for any
fortuitous event until he
has effected the delivery.
3.
equivalent
performance - grant
of damages
1166
cover
Three Accessory Obligations:

1.
Article 1163- To take care of

the thing with the diligence of
a good father of a family until
actual delivery.
2.
Article 1164- To deliver the

fruits to the creditor (fruits
produced after obligation to
deliver arises.)
3.
Article
1166To
deliver
accessions & accessories.
Balane:
From the time the obligation
arises, the creditor has a
personal right against the
debtor as to the fruits. But
he has no real right over
them until actual delivery.
According to Balane:
Three types of obligations- (1)
obligation to give; (2) obligation to do;
& (3) obligation not to do.
I. Obligation to give
A. Specific thing
B. Generic thing
II. To do
III. Not to do (this includes all
negative obligations like obligation not
to give.)
Kinds of performance.-specific
performance
substitute
performance
performance at the
expense of the debtor
Articles
1163
obligation to give.
Article
1166.
The
obligation
to
give
a
determinate thing includes
that of delivering all its
accessions
and
accessories, even though
they may not have been
mentioned.
1.
2.
Real right is a right which

is enforceable against the
whole world. He has only
the personal right against
the debtor with regard to the
undelivered fruits.
This is because of the principle
Non nudis pactis, sed
traditione, dominia rerum
transferentur (It is not by
mere agreement, but by
delivery,
is
ownership
transferred.)
Personal right arises from the
time the obligation to deliver
arises whereas the real right
does not arise until actual
delivery.
Articles 1165 1167- Remedies
Available to the Creditor (specific
performance, substitute performance,

equivalent performance.)
A. In obligations to give
1. A determinate thing
a.
Specific
performance
b.
Equivalent
performance
2.
A generic
remedies are available
thing,
all
B. In an obligation to do, make a

distinction:
In obligation to do, which is purely
personal
only
equivalent
performance is available
In an obligation to do which is not
personal:
a.
substitute
b.
equivalent
performance
performance
Note: In obligations to do, specific

performance is not available.
The reason for this is that specific
performance
will
give
rise
to
involuntary servitude.
C. Obligation not to do
1. substitute performance
2. equivalent performance.
In all these cases, the creditor

has the option of resolution
or rescission under Article
1191. In addition, he can also
claim damages.
Article 1244. The debtor of a

thing
cannot
compel
the
creditor to receive a different
one, although the latter may be
of the same value as, or more
valuable than that which is
due.
In obligations to do or not to
do, an act or forbearance
cannot be substituted by
another act or forbearance
against the obligee's will.
Article 1245. Dation in
payment, whereby property is
alienated to the creditor in
satisfaction of a debt in money,
shall be governed by the law of
sales.
Article
1246.
When
the
obligation consists in the
delivery of an indeterminate or
generic thing, whose quality
and circumstances have not
been stated,
the creditor
cannot demand a thing of
superior quality. Neither can
the debtor deliver a thing of
inferior quality. The purpose of
the
obligation
and
other
circumstances shall be taken
into consideration.
Article 1460. A thing is
determinate
when
it
is
particularly
designated
or
physical segregated from all
others of the same class.
The requisite that a thing be
determinate is satisfied if at
the time the contract is entered
into, the thing is capable of
being
made
determinate
without the necessity of a new
or further agreement between
the parties
Article 442. Natural fruits
are the spontaneous products
of the soil, and the young and
other products of animals.
Industrial fruits are those
produced by lands of any kind
through cultivation or labor.
Civil fruits are the rents of
buildings, the price of leases of
lands and other property and
the amount of perpetual or life
annuities or other similar
income
NATURE
AND
OBLIGATIONS
EFFECTS
a. DETERMINATE OBLIGATION
particularly
designated
from
a
particular class;
PRINCIPAL OBLIGATION
to
give
(to
deliver)
a
determinate thing;
ACCESSORY OBLIGATION
exists
even
when
not
expressly stipulated;
(1) Article 1163
to take care of the
thing
with
proper
diligence of a good
father of the family;
(2) Article 1164
to deliver the fruits;
(441)
natural / industrial /
civil
the
OBLIGATION
to
deliver arises only if
the
creditor
is
entitled;
(3) Article 1166
delivery
of
the
accessions and of the
accessories (Art 440);
b. GENERIC THING is one that is
indicated only by its kinds, without
being distinguished from others of the
same kind. (indeterminate)
In an OBLIGATION to deliver a
generic thing, the object is
determinable;
when
delivered
it
becomes
determinate.
OF
OBJECT OF THE OBLIGATION:

1.
to give real OBLIGATION

determinate (specific)
or indeterminate (generic)
2.
to do
3.
not to do personal
OBLIGATION positive (to
do) or negative (not to do)
REAL OBLIGATION:
DELIMITED GENERIC not totally

generic nor specific; obligation to
deliver one of SEVERAL things; does
not have designation nor physical
segregation;
Rule re Fortuitous
Events still apply.
DETERMINATION OF DILIGENCE
REQUIRED:
(1) LAW e.g. extra ordinary
diligence required in Common carriers
(2) Stipulation of Parties
(3) Presumed: diligence of a Good
father of the Family if none is
specified/expressed
by
law
or
agreement.
REAL RIGHT is the power by a
person
over
a
specific
thing,
susceptible of being exercised against
the whole world.
PERSONAL RIGHT belongs to a
person who may demand from
another, as a definite passive subject,

the fulfillment of a prestation.
From
the
moment
the
OBLIGATION to deliver a
determinate thing arises, the
creditors earns a personal
right over the thing and its
fruits, but only delivery or
tradition transfers ownership
that is a real right over the
thing against the whole world.
For failure to deliver, the
creditors remedy is not
reivindicacion but specific
performance.
[CHAPTER
2:
Accession
PROVISIONS]
contract, then may be the

party has already stipulated
as to how the obligation
should be complied with.
3.
Right
of
GENERAL
Article 440. The ownership

of property gives the right by
accession to everything which
is produced thereby, or which
is incorporated or attached
thereto, either naturally or
artificially.
Kinds of Fruits;
1)
CIVIL derived by virtue of
juridical relation
2) Natural spontaneous products
of the soil and the young and other
products of animals;
3) Industrial produced by lands of
any kind through cultivation or labor
or by reason of human labor.
Illustrations:
1. Which article is enshrined
with the compliance of the
obligation? Article 19 of the
Civil Code.
2.
How should an obligation be

complied with? To answer, I
would ask you after reading
Article 19, to know what is
the source of the obligation.
Because if you know the
source then you will know
how such obligation should
be complied with. If the
source of obligation is a
4.
Obligation arising from law,

the law itself will provide the
manner of compliance of the
obligation. But in recent
years, thus the common law
specially
on
economic
matters, is that congress will
just set the policies, and the
IRR will have to be formulated
by the executive dept., and
as a rule you should know the
IRR. Even if we know the
source of the obligation, we
may still not know on how to
comply
the
obligation,
because the parties did not
stipulate or the law did not
provide, so how should we
perform? Finally, the civil
code will tell us on how to
comply in relation to the kind
of obligation as to prestation.
But most of the provision is
on the prestation to give so I
will focus on that. In relation
to
this
obligations,
how
should this obligations be
complied with, first you
should know as to what kind
of thing is to be delivered. If
it is a determinate thing
or a generic thing.
Generic Thing: How should
this obligation be complied
with? There is a rule that
should be followed. What a
debtor cannot compel the
creditor to accept a thing that
is inferior of quality. A thing of
such kind the debtor also
cannot demand which is of
superior quality. In other
words, the thing that is to be
delivered to the creditor is
not of inferior nor superior
quality. What should be
delivered depends on the
purpose of the constitution of
the obligation.
5.
Determinate Thing: if A has

an obligation to deliver to B,
KIA PRIDE 1996, but instead
of delivering that car, the
creditor offered to deliver a
brand new BMW, series 9
black convertible. May the
obligation be extinguished?
Yes. If the creditor accepts
the BMW. Why? Because
when the law said that the
creditor cannot be compelled
to accept but he may want to
accept. In fact if the creditor
accepts, what is the mode of
extinguishment? The mode of
extinguishment is Dacion En
Pago, an act of thing was
delivered by the debtor to the
creditor in satisfaction of his
death.
6.
Last question, why would

anyone refuse to accept the
BMW? Maybe there are gems
in the old car.
7.
The accessory obligations,

the
debtor
should
preserve the thing. This
obligation starts from the
constitution of the obligation
until the delivery of the thing.
Not all obligations have this
accessory the obligations.
E.g. to deliver a generic
thing.
8.
As to the fruits of the

thing. Who is entitled to the
fruits of the thing accrued
after the constitution of the
obligation?
The
Code
provides: he will be entitled to
the fruits of the thing from
the time the obligation to
deliver arises. Art 1164

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Rojano, Queennie Compiled

Art. 1156. An obligation is a

What is the definition of an

an active subject, who has

a passive subject, who is

These two, the active

This may pertain not

What are the elements of obligation?

or doing (all kinds of

essential elements. The following two

**Meaning the 5 sources of

must be possible, physically

This pertains to the

the efficient cause or the

Rojano, Queennie Compiled

while obligee is used in an

Civil obligations can be

(2) Passive Subject This refers to

According to Balane: Book IV starts

The first two elements must be

Etymology two Latin words, ligare,

while obligor is used in an

one party is determined at

Literally obligare means "to

Characteristics of an Obligation: TEE

It creates ties that are by

It involves the power to make

(1) Active Subject This refers to

A creditor generally used in

& ob w/c is a proposition used

Hence, a better definition would be

the subject is determined

> by virtue of which

(4) Vinculum juris- the legal tie or

When a person says "I

Bilateral acts (e.g.

Unilateral acts (e.g.

** All the above 3/4 elements are

(3) Object of the obligation - the

prestation consists in the delivery of a

e.g. contract of employment

Rojano, Queennie Compiled

it must be possible, physically

it must have a positive

do not grant the right

contract cannot recover what he

obligation, there must exist a

General rule: Upon the annulment of

Rojano, Queennie Compiled

Is the thing here always have to be

regulations; as sometimes called as

Article 1428. When, after an action

Moral obligation- duties of

Mixed obligation- have full

However, jurisprudence makes only

Requisites/ Elements of Natural

there is a juridical tie between

the tie is not given effect by

but NOT THROUGH

Voluntary fulfillment may be

-this is being distinguished

Facts: On July 25, 1956, appellants

Rojano, Queennie Compiled