BOOK IV.

OBLIGATIONS AND CONTRACTS

TITLE I. OBLIGATIONS
OBLIGATION DEFINED.

 ARTILCE 1156. An obligation is a juridical necessity to

give, to do or not to do.
CIVIL OBLIGATIONS VS NATURAL OBLIGATIONS

 Civil Obligation is based on a positive law and gives right of action to

compel their performance, while Natural Obligation is based on
natural law, but on equity and moral justice.
NATURAL OBLIGATIONS (A.1423-1430)

 Art. 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.
CIVIL OBLIGATIONS VS NATURAL OBLIGATIONS; EXAMPLE

 Sheldon executed a promissory note in favor of Amy for P10, 000 due on
January 5, 2020.
ESSENTIAL REQUISITES OF AN OBLIGATION

 Passive subject (debtor or obligor)

 Active subject (creditor or obligee)
 Object or Prestation
 Juridical tie
ESSENTIAL REQUISITES; EXAMPLE

 UNDER A BUILDING CONTRACT, JOEY BOUND HIMSELF TO

CONSTRUCT A HOUSE FOR CHANDLER FOR P500,000.

 Passive Subject, Active Subject, Object or Prestation, Juridical Tie.

SOURCES OF OBLIGATIONS

 Laws
 Contracts
 Quasi-Contracts
 Crimes
 Quasi-Delicts
SOURCES OF OBLIGATIONS

 LAW – IMPOSED BY THE PROVISIONS OF LAW

 CONTRACTS – BASED ON STIPULATION OF THE PARTIES INVOLVED (meeting of the minds)
 QUASI-CONTRACT - A JURIDICAL RELATION WHICH ARISES FROM CERTAIN LAWFUL, VOLUNTARY
AND UNILATERAL ACTS, TO THE END THAT NO ONE WOULD BE UNJUSTLY
ENRICHED OR BENEFITED AT THE EXPENSE OF ANOTHER.
 CRIME – ACTS OR OMISSION PUNISHED BY LAW
 QUASI-DELICT – WHOEVER BY ACT OR OMISSION CAUSES DAMAGE TO ANOTHER, THERE BEING
FAULT OR NEGLIGENCE, IS OBLIGED TO PAY FOR THE DAMAGE DONE.
ARTICLE 1158

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

 Claudine, employed as a guard of a movie house by ANG Corporation, shot and

killed Marjorie a gate-crasher who attacked Claudine with a bolo after having been
refused entrance without first providing herself a ticket. Claudine was charged with
homicide and was subsequently acquitted. For the expenses incurred, Claudine
demanded reimbursement from her employer. Upon refusal of the employer, she filed
an action for recovery of the amounts paid to his lawyer plus moral damages.
ARTICLE 1158; EXAMPLE

 In a similar case, the Supreme Court held that the giving of legal assistance to the
employee is not a legal obligation. While it might and possibly be regarded as a moral
obligation, it does not at present count with the legal sanction of any man-made law.
If the employer is not legally obliged to give legal assistance to its employee to
provide him with a lawyer, said employee cannot recover from the employer the
amount he paid a lawyer hired by him. (DE LA CRUZ vs. NORTHERN THEATRICAL
ENTERPRISES, 1954)
SOURCE OF OBLIGATIONS; CONTRACTS

 Art. 1159. Obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good
faith.
 The terms of the contract, however, should not be contrary to LAW,
MORALS, GOOD CUSTOMS, PUBLIC POLICY, or PUBLIC ORDER.
SOURCES OF OBLIGATIONS; QUASI-CONTRACTS

 Art. 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:
(1) When the property or business is not neglected or abandoned;
(2) If in fact the manager has been tacitly authorized by the owner.
NEGOTIORUM GESTIO; EXAMPLE

 While Gunther was having a vacation in New York, a typhoon hits his
home town in Dumaguete and his house is now in danger. Rachel, her
friendly neighbor, does something urgently necessary to protect the
roofing of Gunther’s house.
SOURCES OF OBLIGATIONS; QUASI-CONTRACTS

 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. (Payment by
mistake)
SOLUTIO INDEBITI; EXAMPLE

 Boy bought goods from Girl Store. The goods cost P2,500. Boy gave
P3,000 to the store cashier and received a change of P700. Boy is duty
bound to return the excess of P200 to the store. Otherwise, he will be
unjustly enriching himself at the expense of Girl Store.
SOURCE OF OBLIGATIONS; CRIMES OR DELICT

 The extent of civil liability for damages arising from crimes is governed by the
Revised Penal Code and the Civil Code. This civil liability includes:
 (1) Restitution;
 (2) Reparation for the damage caused; and
 (3) Indemnification for consequential damages.
-Article 104, Revised Penal Code.
CRIMES; EXAMPLE

 Steve killed Bill who is the breadwinner of a family. The family incurred
funeral expenses and suffered emotionally. If Steve is found criminally
liable for homicide, he has the following obligations:
 (1) to pay damages in the amount of Bill’s lost earnings;
 (2) to pay the funeral expenses; and
 (3) to pay moral damages to the family members for their suffering.
SOURCE OF OBLIGATION; QUASI-DELICT; REQUISITES

 (1) an act or omission;

 (2) fault or negligence;
 (3) damage caused;
 (4) a causal relation or a connection of cause and effect between the act or omission
and the damage;
 (5) no pre-existing contractual relation between the parties.
QUASI-DELICT; EXAMPLE

 Romeo, a handsome try hard baseball player, was playing baseball outside
Juliet's house. Upon seeing Juliet, Romeo suddenly got excited and hit the
ball so hard that it flew straight to Juliet's window shattering it into
pieces and bounced right into Juliet's face injuring her beloved nose.
SOURCES OF OBLIGATIONS; EXAMPLE

 While trying to pass each other on a narrow bridge, a

passenger bus (driven by an employee) and a private
automobile (driven by the owner) collided and a passenger on
the bus was injured.
CRIME VS QUASI-DELICT
CRIME
 INTENT
 PUBLIC INTEREST
 PUNISHMENT
 CANNOT BE COMPROMISED
 GUILT BEYOND REASONABLE DOUBT
QUASI DELICT
 FAULT OR NEGLIGENCE
 PRIVATE INTEREST
 INDEMNIFICATION
 CAN BE COMPROMISED
 PREPONDERANCE OF EVIDENCE
FOR NEXT MEETING…

 NATURE AND EFFECT OF OBLIGATIONS