Title I.

OBLIGATIONS
Chapter 1.
GENERAL PROVISIONS

ARTICLE 1156
An obligation is a juridical necessity to give, to do or not to do.

Obligation – The requirement to do what is imposed by law, promise, or contract.

Obligation is synonymous with duty. It’s a tie which binds us to pay or to do something
agreeably to the laws and customs of the country. According to Arias Ramos, obligation
is nothing more than the duty of a person (debtor or obligor) to satisfy a specific and
demandable claim of another person (creditor or obligee) which if breached is enforced
in court.

Elements of Obligation
1. Active subject (creditor or obligee). – the person who has the right to demand
the fulfillment of the obligation.
2. Passive subject (debtor or obligor).- the one who is bound to the fulfillment
of the obligation.
3. Prestation or object – It may consist in giving, doing, or not doing. Without
prestation, there is nothing to perform. Object refers to the property or the
things. Prestation is the subject matter of the obligation.
4. Efficient cause (juridical or legal tie) – that which binds or connects the
parties to the obligation. The tie is an obligation can easily determined by
knowing the source of the obligation.

Right and obligation, Correlated – When there is right there is a corresponding

obligation. Right is the active aspect (credit) and obligation is the passive aspect (debt).

Prestation – Particular conduct of the debtor. It may consist in giving, doing or not doing
something.
1. Obligation to give – consist in the delivery of a movable or immovable thing
to the creditor. Example: Obligation to deliver the thing in sale, deposit, pledge,
donation, anti-chresis.
2. Obligation to do – covers all kinds of works or services whether physical or
mental. Example: Contract for professional services like painting, modelling,
singing.
3. Obligation not to do – consist in refraining from doing some acts like
producing aggravating noise, offensive odor, smoke, heat.

Nature of obligations in Art. 1156; Civil and Natural Obligations Distinguished. –

The definition of obligation in Article 1156 refers to civil obligations which are
enforceable in court when breached. It does not cover natural obligations.
Kinds of Obligations

(a) As to judicial enforceability

1. Civil obligation – It is an when the debtor or obligor did not fulfilled its
obligation to the creditor or obligee that can be enforced through a civil suit or
action in a court.
2. Natural obligation – It is a special kind of obligation which cannot be
enforced in court but which authorizes the retention of the voluntary payment
or performance made by the debtor.
3. Moral obligation – It is a duty which one owes, and which he ought to
perform, but not legally bound to fulfill. This is an obligation from moral law
developed by the church the church and not enforced on court. It deals with
the spiritual obligation of a person in relation to his God or Church.

(b) As to the subject matter

1. Real obligation – obligation to give

2. Personal obligation – obligation to do or not to do.

(c) As to the number of persons bound to perform

1. Unilateral obligation – It is when only one of the parties are bound to fulfill a
prestation.
2. Bilateral obligation – It is when both parties are bound to perform.

Reciprocal obligation are which arise from the same cause, wherein each party is a
debtor and a creditor of the other. (ASJ Corporation vs. Evangelista, 545 SCRA 300)

(d) As to the capacity of fulfillment

1. Possible obligation – It is when an obligation that can be fulfilled in nature

or in law.
2. Impossible obligation – It is when an obligation that cannot be fulfilled in
nature or in law.

(e) As to susceptibility of partial fulfillment

1. Divisible obligation – Requires the giving of definite things and the same
can be partially performed.
2. Indivisible obligation – Requires the giving of definite things and the same
cannot be partially performed.
(f) as to their dependance upon one another

1. Principal obligation – Main obligation created by the parties.

2. Accessory obligation – Secondary obligation created to guarantee the
fulfillment of the principal obligation.

(g) As to the existence of a burden or condition

1. Pure obligation – Not subject to any conditions and no specific date is

mentioned for its fulfillment but immediately demanded.
2. Condition obligation – Subject to conditions, it can be suspensive and
performance of which depends on an uncertainty.
3. Obligation with a term – Subject to the happening of an event which will
surely happen, but the date is uncertain. The obligation becomes demandable
only when the term expired.

(h) As to the nature of performance

1. Positive obligation – When the debtor is oblige to give or to do something in

favor of the creditor.
2. Negative obligation – When the debtor is not oblige to give or to
do anything. That is, he must refrain from doing something.

(i) As to the nature of creation of the obligation

1. Legal obligation – Obligation imposed by law.

2. Conventional obligation – Obligation established by the agreement of the
parties like contracts.

(j) As to the character of responsibility or liability

1. Joint obligation – Obligation where creditor has the right to demand full and
complete compliance of an obligation against both of the debtors.
2. Solidary obligation – Obligation that are bound together, each liable for the
whole performance, or obligees to be bound together, all owed just a single
performance and each entitled to the entirety of it.

(k) As to the grant of right to choose one prestation out of several, or to substitute the first
one.

1. Alternative obligation – Obligation where the obligor may choose one out of
several prestation.
2. Facultative obligation – Obligation where there are only one prestation. But
the obligor may render one in substitution of the first one.
(l) As to the imposition of penalty

1. Simple obligation – Obligation where there is no penalty imposed for

violation of terms thereof.
2. Obligation with penalty – Obligation where there is a penalty imposed for
violation of terms thereof.

ARTICLE 1157
Obligation arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (1089a)
Source of Obligation; Criticism in the inclusion of law as another source. – In
Roman Law, the sources of obligation are (1) ex-contractu, (2) quasi-contractu, (3) ex-
malficio and (4) quali-malficio. The fifth one was added namely; ex-lege (law), but was
not entirely accepted. (Leung Ben vs. O’Brien, 38 Phil. 182)

Enumerated Source of Obligation, Exclusive – The enumeration of the sources of

obligations are exclusive. No obligation exist it its source is not one of those enumerated
in Art. 1157 (Navales vs. Rias, 8 Phil. 508)

Illustrative of the Sources of Obligation. –

1. Obligation arising from law – Like the duty of the spouses to provide
mutual support and respect to one another. Duty of tax payer to pay their taxes
to the government (BIR)
2. Obligation arising from contract – Like the duty of a contracting to fulfill his
undertaking in the contract.
3. Obligation arising from a quasi-contract – like the duty of the recipient to
return what was delivered to him by mistake.
4. Obligation arising from delict or crime – such as duty of the culprit to pay
actual damages for causing the death of a person.
5. Obligation arising from quasi-delict or tort – like the duty of the tortfeasor
to pay damages for injuries of damages to his fault, omission or negligence.

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. (1090)
Obligation Derived from Law, Never Presumed. – There are obligations in law such as
obligation from parents to support minor children, the obligation of lower estates to allow
or receive the waters naturally descending from the higher estates, obligation to pay
taxes, the obligation of warranty of a co-owner after partition, and obligation to deliver the
presumptive legitimates of children.
Unless such obligations are expressly provided by law, they are not demandable and
enforced.

Regulation of Obligations Arising from Law. – These obligation shall be regulated by

the provisions of the law, which establishes them. The civil code is applicable suppletorily.

Factor to Determine whether an Obligation Arises from Law or from other

sources. – This is when an obligation generated from a contract, its only purpose was to
perform on what is stated which did not arise from it, the act itself is the source of the
obligation and not the law. And, when the law obliges to act upon which it is based in
nothing more than a mere factor of determining the moment when it comes demandable,
then this source of obligation is the law itself.

1. When the loser has a chance to recover his lost with interest in illegal
gambling indebitatus assumpit (Leung Ben vs. O’Brien, 38 Phil. 182)
2. When the a bank is not liable to pay the depositor made in an insolvent bank
because there is no law authorizing it. (Serrano vs. Central Bank 96 SCRA 96)
3. When a lessor has no obligation to allow the lessee to exercise any right of
preemption or redemption of the house and lot of the lessor, which was not
built by the lessee. There is no law directing to do so. (Santos vs. Court of
Appeals 128 SCRA 428)
4. When an employee has no right to held the employer liable to the pay the
attorney’s fee. Because there is no law requiring it.(Dela Cruz vs. Northern
Theatrical Enterprises 95 Phil. 739)

ARTICLE 1159
Obligation arising from contracts have the force of law between the contracting parties
and should be compiled with in good faith.

Distinction Between an Obligation and a Contract. – An obligation is a juridical

necessity to give, to do or not to do. A contract is an agreement between parties with
respect to the other, to give something or render some service.

Freedom to Contract – The contracting parties may establish may establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided they
are not contrary to law, morals, good customs, public order, or public policy.

Perfection of Contract – Contracts are perfected when consented, and from that
moment the parties are bound to the fulfillment of what was expressed in the contract
even the consequences.
Force of Law – When the contract has been enforce to the law between the parties, both
of them are bound to the obligation expressed therein (Baron Marketing Corp. vs. CA,
286 SCRA 96 [1998])

Obligation Arising from Contract – Obligations that arises from contracts entered into
by the contracting parties are primarily govern by stipulations, clauses, terms and
conditions of there agreements. If they do not violate any law, morals, good customs,
public order, or public policy and shall have the force of law and should be compiled with
in good faith.

Exceptions to the Rule – Some contracts are valid and do not violate Art. 1306 and yet,
they may not be enforced totally, if their prestation are unconscionable and unreasonable.
The contract which provides for unconscionable attorney’s fees may be disregarded by
the court. (Bachrach vs. Golingco, 39 Phil. 138; Borcena vs. IAC 147 SCRA 111)

Falsification of a Valid Contract – Some provisions thereof has been added without
knowledge of the contracting parties. Only the unauthorized insertion will be disregarded.

Interpretation of a Contract involves a Question of Law – A contract is in the nature

of law between parties and their succession interest, its interpretation involves a question
of law (Melliza vs. Iloilo, 131 Phil. 1006; Republic vs. Lichauco, 46 SCRA 305; Weldon
Construction Corp. vs. CA, 154 SCRA 618)

ARTICLE 1160
Obligation derived from quasi-contracts shall be subject to the provisions of Chapter 1,
Title XVII, of this book.

Quasi-Contract, Concept. – Quasi-Contract is a legal remedy that is imposed by the

court. It does not require assent of the parties and its creation is entirely dictated by the
law for the benefit of another and for which the former must compensate to the end.

Characteristic of a Quasi-Contract
1. Act(s) executed must be lawful to distinguish it from a violation or crime.
2. Act(s) executed must be voluntary distinguish it from quasi-delict.
3. Act(s) executed must be independent to distinguish it from an ordinary contract.

Principal Kinds of Quasi-Contract.

(a) Negotiorum Gestio – A juridical relation when somebody takes charge of the agency
or management of the business or property of another without consent.
(b) Solutio Indebiti – Where one had paid a debt, or done an act or remitted a claim
because he thought that he was bound in law to do so, when he was not. He can recover
the mistake there is an implied obligation to pay back the money.
Presumptive Consent – Since a quasi-contract is a independent contract created by a
sole act(s) of the gestor, which means there was no consent to the latter. (Perez vs.
Pomar, 2 Phil. 682).