1
ESTOPPEL & NATURAL OBLIGATION
NATURAL OBLIGATION
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. Some natural obligations are set
forth in the following articles.
Examples of Natural Obligations:
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.
Art. 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.
(PERFORMANCE AFTER CIVIL OBLIGATION PRESCRIBED)
Art. 1426. When a minor between eighteen and twenty-one years of age who
has entered into a contract without the consent of the parent or guardian, after
the annulment of the contract voluntarily returns the whole thing or price
received, notwithstanding the fact the he has not been benefited thereby,
there is no right to demand the thing or price thus returned. (RESTITUTION
BY MINOR AFTER ANNULMENT OF CONTRACT)
Art. 1427. When a minor between eighteen and twenty-one 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 (DELIVERY BY MINOR OF
MONEY OR FUNGIBLE THING IN FULFILLMENT OF OBLIGATION).
Art. 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. (PERFORMANCE AFTER ACTION TO ENFORCE CIVIL
OBLIGATION FAILED)
Art. 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 and
cannot be rescinded by the payer. (PAYMENT BY HEIR OF DEBT
EXCEEDING VALUE OF PROPERTY INHERITED)
Art. 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 and
irrevocable. (PAYMENT OF LEGACY AFTER WILL HAVE BEEN
DECLARED VOID)
ARBITRATION
Art. 2042. The same persons who may enter into a compromise may submit their
controversies to one or more arbitrators for decision. (1820a)
Art. 2043. The provisions of the preceding Chapter upon compromises shall also be
applicable to arbitrations. (1821a)
Art. 2044. Any stipulation that the arbitrators' award or decision shall be final, is
valid, without prejudice to Articles 2038, 2039, and 2040. (n)
Art. 2045. Any clause giving one of the parties power to choose more arbitrators than
the other is void and of no effect. (n)
Art. 2046. The appointment of arbitrators and the procedure for arbitration shall be
governed by the provisions of such rules of court as the Supreme Court shall
promulgate.
COMPROMISES
Art. 2028. A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced. (1809a)
Art. 2029. The court shall endeavor to persuade the litigants in a civil case to agree
upon some fair compromise. (n)
Art. 2030. Every civil action or proceeding shall be suspended:
(1) If willingness to discuss a possible compromise is expressed by one or both
parties; or
(2) If it appears that one of the parties, before the commencement of the action or
proceeding, offered to discuss a possible compromise but the other party refused the
offer.
The duration and terms of the suspension of the civil action or proceeding and similar
matters shall be governed by such provisions of the rules of court as the Supreme
Court shall promulgate. Said rules of court shall likewise provide for the appointment
and duties of amicable compounders. (n)
Art. 2031. The courts may mitigate the damages to be paid by the losing party who
has shown a sincere desire for a compromise. (n)
Art. 2032. The court's approval is necessary in compromises entered into by
guardians, parents, absentee's representatives, and administrators or executors of
decedent's estates.
Art. 2033. Juridical persons may compromise only in the form and with the requisites
which may be necessary to alienate their property. (1812a)
Art. 2034. There may be a compromise upon the civil liability arising from an
offense; but such compromise shall not extinguish the public action for the
imposition of the legal penalty.
Art. 2035. No compromise upon the following questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime.
Art. 2036. A compromise comprises only those objects which are definitely stated
therein, or which by necessary implication from its terms should be deemed to have
been included in the same.
A general renunciation of rights is understood to refer only to those that are
connected with the dispute which was the subject of the compromise. (1815)
Art. 2037. A compromise has upon the parties the effect and authority of res judicata;
but there shall be no execution except in compliance with a judicial compromise.
Art. 2038. A compromise in which there is mistake, fraud, violence, intimidation,
undue influence, or falsity of documents, is subject to the provisions of Article 1330
of this Code.
However, one of parties cannot set up a mistake of fact as against the other if the
latter, by virtue of the compromise, has withdrawn from a litigation already
commenced.
Art. 2039. When the parties compromise generally on all differences which they
might have with each other, the discovery of documents referring to one or more but
not to all of the questions settled shall not itself be a cause for annulment or
rescission of the compromise, unless said documents have been concealed by one of
the parties.
But the compromise may be annulled or rescinded if it refers only to one thing to
which one of the parties has no right, as shown by the newly-discovered documents.
Art. 2040. If after a litigation has been decided by a final judgment, a compromise
should be agreed upon, either or both parties being unaware of the existence of the
final judgment, the compromise may be rescinded.
Ignorance of a judgment which may be revoked or set aside is not a valid ground for
attacking a compromise.
Art. 2041. If one of the parties fails or refuses to abide by the compromise, the other
party may either enforce the compromise or regard it as rescinded and insist upon his
original demand.

ESTOPPEL
CONCEPT OF ESTOPPEL
Estoppel is a bar which precludes a person from denying or asserting anything to the
contrary of that which has, in contemplation of law, been established as the truth,
either by the acts of judicial or legislative officers or by his own deed or
representation, either expressed or implied.
It concludes the truth in order to prevent fraud and falsehood, and imposes silence on
a party only when in conscience and honesty he should not be allowed to speak.
As such, Estoppel is …
1. An admission;
2. Is rendered conclusive
3. Upon the person making it; and
4. Cannot be denied or disproved against the person relying thereon
SILENCE OR INACTION
This is sometimes referred to as estoppel by “standing by” or “laches.” Mere
innocent silence will not work an estoppel. There must also be some element of
turpitude or negligence connected with the silence by which another is misled to his
injury. But one who invokes this doctrine of estoppel must show not only unjustified
inaction but also some unfair injury would result to him unless the action is held
barred.
Estoppel by acquiescence is closely related to estoppel by silence. In the former, a
person is prevented from maintaining a position inconsistent with one in which he
has acquiesced.
ADMISSIONS
A party may be estopped to insist upon a claim, assert an objection, or take a position
which is inconsistent with an admission which he had previously made and in
reliance upon which the other party has changed his position.
DISTINGUISHED FROM WAIVER
A waiver is a voluntary and intentional abandonment or relinquishment of a known
right. It carries no implication of fraud. It involves the act or conduct of only one of
the parties.
An equitable estoppel may arise, however, even where there is no intention on the
part of the person estopped to relinquish any existing right and frequently carries the
implication of fraud. It involves the conduct of both parties.
In Lopez v. Ochoa (L- 7955, May 30, 1958), the Supreme Court held that waiver and
estoppel are frequently used as convertible terms. The doctrine of waiver belongs to
the family of, is of the nature of, is based on, estoppel. The essence of waiver is
estoppel and where there is no estoppel, there is no waiver. This is especially true
where the waiver relied upon is constructive or implied from the conduct of a party.
DISTINGUISHED FROM RATIFICATION
In ratification, the party is bound because he intended to be bound; in estoppel, the
party is bound notwithstanding the fact that there was no such intention because the
other party will be prejudiced and defrauded by his conduct unless the law treats him
as legally bound.
DISTINGUISHED FROM FRAUD
Estoppel exists with or without a contract; fraud presupposes an attempt to enter into
a valid agreement or contract.
While estoppel may raised as a defense, fraud may properly be a cause of action on
account of the vitiated consent that it produces.
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NATURE OF LACHES
Laches is failure or neglect, for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; it is negligence
or omission to assert a right within a reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned or declined to assert it.
ELEMENTS OF LACHES
1. Conduct on the part of the defendant or of one under whom he claims, giving
rise to the situation complained of;
2. Delay in asserting complainant’s rights after he had knowledge of the
defendant’s conduct and after he has had an opportunity to sue;
3. Lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit;
4. Injury or prejudice to the defendant in the event relief is accorded to the
complainant.
PRESCRIPTION LACHES
Concerned with the fact of delay Concerned with the fact of delay
A matter of time Principally a question of inequity founded
on some change in the condition of the
property or the relation of the parties
Statutory Not statutory
Applies to law Applies to equity
Based on a fixed time Not based on a fixed time
Q: In 1965, Renren bought from Robyn a parcel of registered land evidenced by a duly
executed deed of sale. The owner presented the deed of sale and the owner's certificate of
title to the Register of Deeds. The entry was made in the daybook and corresponding fees
were paid as evidenced by official receipt. However, no transfer of certificate of title was
issued to Renren because the original certificate of title in Robyn's name was temporarily
misplaced after fire partly gutted the Office of the Register of Deeds. Meanwhile, the land
had been possessed by Robyn's distant cousin, Mikaelo, openly, adversely and continuously
in the concept of owner since 1960. It was only in April 1998 that Renren sued Mikaelo to
recover possession. Mikaelo invoked: a) acquisitive prescription b) laches, asking that he be
declared owner of the land. Decide the case by evaluating these defenses. (1998 Bar)
A:
a. Renren's action to recover possession of the land will prosper. In 1965, after buying the
land from Robyn, he submitted the Deed of Sale to the Registry of Deeds for registration
together with the owner's duplicate copy of the title, and paid the corresponding registration
fees. Under Sec. 56 of PD No. 1529, the Deed of Sale to Renren is considered registered
from the time the sale was entered in the Day Book (now called the Primary Entry Book).
For all legal intents and purposes, Renren is considered the registered owner of the land.
After all, it was not his fault that the Registry of Deeds could not issue the corresponding
transfer certificate of title. Mikaelo's defense of prescription cannot be sustained. A Torrens
title is imprescriptible. No title to registered land in derogation of the title of the registered
owner shall be acquired by prescription or adverse possession. (Sec. 47, P.D. No. 1529) The
right to recover possession of registered land likewise does not prescribe because possession
is just a necessary incident of ownership.
b. Mikaelo's defense of laches, however, appears to be more sustainable. Renren bought the
land and had the sale registered way back in 1965. From the facts, it appears that it was only
in 1998 or after an inexplicable delay of 33 years that he took the first step asserting his right
to the land.) It was not even an action to recover ownership but only possession of the land.
By ordinary standards, 33 years of neglect or inaction is too long and may be considered
unreasonable. As often held by the Supreme Court, the principle of imprescriptibility
sometimes has to yield to the equitable principle of laches which can convert even a
registered land owner's claim into a stale demand. Mikaelo's claim of laches, however, is
weak insofar as the element of equity is concerned, there being no showing in the facts how
he entered into the ownership and possession of theland.
ESTOPPEL AGAINST OWNER
When in a contract between third persons concerning immovable property, one of them is
misled by a person with respect to the ownership of real right over the real estate, the latter
is precluded from asserting his legal title or interest therein, provided all these requisites are
present:
1. There must be fraudulent representation or wrongful concealment of facts
known to the party estopped;
2. The party precluded must intend that the other should act upon the facts as
misrepresented;
3. The party misled must have been unaware of the true facts; and
4. The party defrauded must have acted in accordance with the
misrepresentation.
An estoppel operates on the parties to the transaction out of which it arises and their privies.
The government is not estopped by mistake or error on the part of its officials or agents; the
erroneous application and enforcement of the law by public officers does not prevent a
subsequent correct application of the statute.

KINDS OF ESTOPPEL
1.Technical Estoppels
a. Estoppel by record – the preclusion to deny the truth of matters set forth in a
record, whether judicial or legislative, and also to deny the facts adjudicated by a
court of competent jurisdiction
Example: the conclusiveness of a judgment on the parties to a case
b. Estoppel by deed – a bar which precludes one party to a deed and his privies
from asserting as against the other party and his privies any right or title in
derogation of the deed, or from denying the truth of any material facts asserted in it; a
written instrument is necessary for there to be estoppel by deed
Some doctrines:
If the deed or instrument is null and void because of the contract, there is no estoppel
Ordinarily, the person estopped must be capacitated; but a minor is clever enough to
deceive others, estoppel may result. If a person who is not a party to the instrument,
notarizes the same, he is not in estoppel.
2.Equitable Estoppel or Estoppel in Pais
It arises when one by his acts, representations or admissions, or by his silence when
he ought to speak out, intentionally or through culpable negligence, induces another
to believe certain facts to exist, and such other rightfully relies and acts on such
belief, so that he will be prejudiced if the former is permitted to deny the existence of
such facts. It takes place in a situation where because if a party’s action or omission,
he is denied the right to plead or prove an otherwise important fact.
This may be estoppel:
1. by conduct or by acceptance of benefits
2. by representation or concealment
3. by silence
4. by omission
5. by laches
Some doctrines:
a.Conduct because of ignorance or mistake does not result in estoppel
b.Estoppel by laches bars an action to create a vested right (executory
interest) but does not bar an action to protect a vested right (executed
interest)
c.Just because a person is silent does not necessarily mean that he will
be in estoppel; there should have been a duty or obligation to speak
d.A mere promise to perform or to omit at some future time does not
necessarily result in estoppel (promissory estoppel); for this to exist,
the promise must have been relied upon and prejudice would result
unless estoppel is applied
ELEMENTS OF ESTOPPEL IN PAIS
a.In relation to the party sought to be estopped:
1.Conduct amounting to false representation or concealment of material facts
or at least calculated to convey the impression that the facts are otherwise than
and consistent with those which the party subsequently attempts to assert;
2.Intent or at least expectation that this conduct shall be acted upon by at least
influence the other party;
3.Knowledge, actual or constructive, of the real facts
b.In relation to the party claiming the estoppel:
1. Lack of knowledge or of the means of knowing the truth as to the facts
in question;
2. Reliance, in good faith, upon the conduct or statement as to the facts in
question;
3. Action or inaction based thereon of such character as to change the
position or status of the party claiming the estoppel to his injury,
detriment, or prejudice
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NATURAL LAW
1. Immutable and independent of all human regulations
2. Includes those rules which are neither written nor promulgated, but are
derived from reason and nature
TYPES OF OBLIGATIONS:
1. Moral obligations – duties of conscience completely outside the field of law
2. Natural obligations – not sanctioned by any action but have a relative
juridical effect
3. Civil obligations – juridical obligations which apparently are in conformity
with positive law but are contrary to juridical principles and susceptible of
being annulled
4. Mixed obligations – have full juridical effect
CONDITIONS NECESSARY FOR NATURAL OBLIGATION TO ARISE:
1. Juridical tie which is not prohibited by law
2. This tie is not given effect by law
When a debtor offers a guarantor for his natural obligation, he impliedly accepts the
coercive remedies to enforce the guaranty, and therefore, the transformation of the natural
obligation into a civil obligation.
Q: In an action brought to collect a sum of money based on a surety agreement, the defense
of laches was raised as the claim was filed more than seven years from the maturity of the
obligation. However, the action was brought within the ten-year prescriptive period provided
by law wherein actions based on written contracts can be instituted. a) Will the defense
prosper?Reason. b) What are the essential elements of laches? (2000Bar)
A:
a. No, the defense will not prosper. The problem did not give facts from which laches may
be inferred. Mere delay in filing an action, standing alone, does not constitute laches. (Agra
v. PNB, G.R. No. 133317, June 29,1999)
b. The four basic elements of laches are: 1. Conduct on the part of the defendant or of one
under whom he claims, giving rise to the situation of which complainant seeks a remedy; 2.
Delay in asserting the complainant’s rights, the complainant having had knowledge or notice
of the defendant’s conduct and having been afforded an opportunity to institute suit; 3. Lack
of knowledge on the part of the defendant that the complainant would assert the right on
which he bases his suit; and 4. Injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held to be barred.
Q: Way back in 1948, Winda’s husband sold in favor of Verde Sports Center Corp. (Verde)
a 10-hectare property belonging to their conjugal partnership. The sale was made without
Winda’s knowledge, much less consent. In 1950, Winda learned of the sale, when she
discovered the deed of sale among the documents in her husband’s vault after his demise.
Soon after, she noticed that the construction of the sports complex had started. Upon
completion of the construction in 1952, she tried but failed to get free membership privileges
inVerde. Winda now files a suit against Verde for the annulment of the sale on the ground
that she did not consent to the sale. In answer, Verde contends that, in accordance with the
Spanish Civil Code which was then in force, the sale in 1948 of the property did not need
her concurrence. Verde contends that in any case the action has prescribed or is barred by
laches. Winda rejoins that her Torrens title covering the property is indefeasible, and
imprescriptible. A. Defineorexplaintheterm“laches”. B. Decide the case, stating your reasons
for your decision (2002Bar)
A:
A. LACHES means failure or neglect, for an unreasonable and unexplained length of time,
to do what, by exercising due diligence, could or should have been done earlier. It is
negligence or omission to assert a right within a reasonable time (De Vera v. CA, G.R. No.
97761, April 14, 1999). B. While Art. 1413 of the Spanish Civil Code did not require the
consent of the wife for the validity of the sale, an alienation by the husband in fraud of the
wife is void as held in Uy Coque v. Navas (G.R. No. L-20392, November 20, 1923).
Assuming that the alienation in 1948 was in fraud of Winda and, therefore, makes the sale to
Verde void, the action to set aside the sale, nonetheless, is already barred by prescription and
laches. More than 52 years have already elapsed from her discovery ofthe sale in 1950.

QUASI CONTRACTS
A quasi-contract is that juridical relation resulting from a lawful, voluntary,
and unilateral act, and which has for its purpose the payment of indemnity to
the end that no one shall be unjustly enriched or benefited at the expense of
another (Art. 2142, CC).
NEGOTIORUM GESTIO
Negotiorum gestio takes place when a person voluntarily takes charge of
another’sabandoned business or property without the owner’s authority (Art. 2144,
CC). As a rule, reimbursement must be made to the gestor (i.e., one who carried out
the business) for necessary and useful expenses.
Requisites:
1. Person voluntary takes charge of;
2. the agency or management of a business or property belonging
toanother;
3. property or business is neglected orabandoned; and
4. manager has not been tacitlyauthorized by the owner.
The obligation does not arise:
1. When the property or business is not neglected or abandoned;
2. If in fact the manager has been tacitly authorized by the owner.
1. Obligations of a Gestor
1. Observe the requisite standard of diligence- The officious manager
must perform his duties with all the diligence of a good father of a
family
He must pay the damages which through his fault and negligence may
be suffered by the owner of the property/business under his
management. The courts may, however, increase or moderate the
indemnity according to the circumstances of each case. (Art. 2145, CC)
2. Liability in the management of the property
Solidary liability- The officious manager is liable for the acts of the
persons to whom he delegated all or some of his duties. The
responsibility of two or more gestors shall be solidary, unless the
management was assumed to save the thing or business from imminent
danger. (Art. 2146, CC)
Liability for fortuitous events- The officious manager is liable for any
fortuitous event under the following conditions:
a. If he undertakes risky operations which the owner was
not accustomed to embark upon
b. If he has preferred his own interest to that of the owner
c. If he fails to return the property or business after demand
of the owner
d. If he assumed management in bad faith (Art. 2147, CC)
e. If he is manifestly unfit to carry on the management
f. If by his intervention he prevented a more competent
person from taking up the management. (Art. 2148, CC)
NOTE: The gestor shall not be liable for (5) and (6) if the
management was assumed to save the property or business from
imminent danger.
Personal liability- Be personally liable for contracts which he entered into with third
persons, even though he acted in the name of the owner, and there shall be no right of
action between the owner and third persons.
The gestor shall NOT be personally liable for such contracts, provided:
1. The owner has expressly or tacitly ratifiedthe management, or
2. When the contract refers to thingspertaining to the owner of the
business. (Art. 2152, CC)
2. Obligations of the Owner of the Property or Business
Although the management was not expressly ratified, the owner who enjoys the
advantages of the same shall:
1. Be liable for the obligations incurred in his interest
2. Reimburse the gestor for the necessary and useful expenses and for the
damages the latter may have suffered in the performance of his duties
The above obligations shall be incumbent upon the owner if the management had for
its purpose the prevention of an imminent and manifest loss, although no benefit
may have been derived. (Art. 2150, CC)
The owner would still be liable, even if the owner did not derive any benefit and
there was no imminent and manifest danger to the property or business, provided:
1. The gestor has acted in good faith; and
2. The property or business is intact, ready to be returned to the owner.
(Art. 2151, CC)
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3. Effect of Ratification
The ratification of the management by the owner of the business produces the effects
of an express agency, even if the business may not have been successful. (Art. 2149,
CC)
4. Extinguishment of Management
1. When the owner repudiates or puts an end thereto
2. When the gestor withdraws from the management, subject to Art. 2144
3. By the death, civil interdiction, insanity or insolvency of the owner or
the gestor. (Art. 2153, CC)
SOLUTIO INDEBITI
Solutioindebiti takes place when something is received when there is no right to
demand it, and it was unduly delivered through mistake. The recipient has the duty to
return it (Art. 2154, CC).
Requisites
1. Something has been unduly delivered through mistake; and
2. Something was received when there was no right to demand it
This situation may cover payment by reason ofa mistake in the construction or
application of adoubtful or difficult question of law (Art. 2155, CC).
When Debt Not Yet Due- If the payer was in doubt whether the debt was due, he
may recover if he proves that it was not due. (Art. 2156, CC)
Responsibility of Two or More Payees- When there has been payment of what is
not due, their responsibility is solidary. (Art. 2157, CC)
When Money or Thing Delivered is Owned by Third Person- The payee cannot
demand that the payor prove his ownership of the thing delivered.
Nevertheless, should he discover that the thing has been stolen and who its true
owner is, he must advise the latter.
If the owner, in spite of such information, does not claim it within the period of 1
month, the payee shall be relieved of all responsibility by returning the thing
deposited to the payor.
If the payee has reasonable grounds to believe that the thing has not been lawfully
acquired by the payor, the former may return the same. (Art. 2158)
LIABILITY OF PAYEE
If in bad faith, he shall be liable:
1. For legal interest if a sum of money is involved
2. For the fruits received or which should have been received if the thing
produces fruits, and
3. For any loss or impairment of the thing for any cause, and
4. For damages to the person who delivered the thing, until it is recovered.
(Art. 2159, CC)
If in good faith, he shall be liable:
1. For the impairment or loss of the thingcertain and determinate or its
accessories and accessions insofar as he has thereby been benefited.
2. For the return of the price or assign the action to collect the sum if he
has alienated the same. (Art. 2160, CC)
Exemption from the Obligation to Restore the Payment Unduly Made
A person who, believing in good faith that the payment was being made of a
legitimate and subsisting claim,
1. destroyed the document, or
2. allowed the action to prescribe, or
3. gave up the pledges, or
4. cancelled the guaranties for his right shall beexempt from the
obligation to restore.
The person who paid unduly may proceed only against the true debtor or the
guarantors with regard to whom the action is still effective. (Art. 2162, CC)
Presumption of Payment by Mistake, Defense- The presumption arises if
something which had never been due or had already been paid was delivered; but he
from whom the return is claimed may prove that the delivery was made out of
liberality or for any other just cause. (Art. 2163, CC)

Q: In fear of reprisals from lawless elements besieging his barangay, X abandoned
his fishpond, fled to Manila and left for Europe. Seeking that the fish in the fishpond
were ready for harvest, Y, who is in the business of managing fishponds on a
commission basis, took possession of the property, harvested the fish and sold the
entire harvest to Z. Thereafter, Y borrowed money from W and used the money to
buy new supplies of fish fry and to prepare the fishpond for the next crop. 1. What is
the Juridical relation between X and Y during X's absence? 2. Upon the return of X
to the barangay, what are the obligations of Y to X as regards the contractwithZ? 3.
Upon X's return, what are the obligations of X as regards Y's contract withW? 4.
What legal effects will result if X expressly ratifies Y's management and what would
be the obligations of X in favor of Y? (1992 Bar)
A: 1. The juridical relation is that of the quasicontract of "negotiorum gestio". Y is
the "gestor" or "officious manager" and X is the "owner." (Art. 2144) 2. Y must
render an account of his operations and deliver to X the price he received for the sale
of the harvested fish.(Art. 2145) 3. X must pay the loan obtained by Y fromW
because X must answer for obligations contracted with third persons in the
interestofthe owner.(Art. 2150) 4. Express ratification by X provides the effects of an
express agency and X is liable to pay the commissions habitually received by the
gestor as manager. (Art. .2149)
Q: In September 1972, upon declaration of martial rule in the Philippines, A, together
with his wife and children disappeared from his residence along A. Mabini Street.
Ermita, Manila. B, his immediate neighbor, noticing that mysterious disappearance of
A and his family, closed the doors and windows of his house to prevent it from being
burglarized. Years passed without B hearing from A and his family, B continued
taking care of A's house, even causing minor repairs to be done at his house to
preserve it. In 1976, when business began to perk up in the area, an enterprising man,
C, approached B and proposed that they build stores at the ground floor of the house
and convert its second floor into a pension house. B agreed to C’s proposal and
together they spent for the construction of stores at the ground floor and the
conversion of the second floor into a pension house. While construction was going
on, fire occurred at a nearby house. The houses at the entire block, including A's were
burned. After the EDSA revolution in February 1986, A and his family returned from
the United States where they took refuge in 1972. Upon learning of what happened to
his house. A sued B for damages, B pleaded as a defense that he merely took charge
of his house under the principle of negotiorum gestio. He was not liable as the
burning of the house is a fortuitous event. Is B liable to A for damages under the
foregoing circumstances? (1993 Bar)
A: He would be liable under Art. 2147 (1), because he used the property for an
operation which the operator is not accustomed to, and in so doing, he exposed them
house to increased risk, namely the operation of a pension house on the second floor
and stores on the first floor.
Q: DPO went to a store to buy a pack of cigarettes worth P225.00 only. He gave the
vendor, RRA, a P500-peso bill. The vendor gave him the pack plus P375.00 change.
Was there a discount, an oversight, or an error in the amount given? What would be
DPO’sduty, if any, in case of an excess in the amount of change given by the vendor?
How is this situational relationship between DPO and RRA denominated? Explain.
(2004Bar)
A: There was error in the amount of change given by RRA. This is a case of solutio
indebiti in that DPO received something that is not due him. He has the obligation to
return the P100.00; otherwise, he will unjustly enrich himself at the expense of RRA.
(Art. 2154) DPO has the duty to return to RRA the excess P100 as trustee under
Article 1456 of the Civil Code which provides: If property is acquired through
mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property comes. There is,
in this case, an implied or constructive trust in favor of RRA.
5
Q: Armando owns a row of residential apartments in San Juan, Metro Manila, which
he rents out to tenants. On 1 April 1991 he left for the United States without
appointing any administrator to manage his apartments such that uncollected rentals
accumulated for three (3) years. Amparo, a niece of Armando, concerned with the
interest of her uncle, took it upon herself to administer the property. As a
consequence, she incurred expenses in collecting the rents and in some instances
even spent for necessary repairs to preserve theproperty. 1. What juridical relation
between Amparo and Armando, if any, has resulted from Amparo’s unilateral act of
assuming the administration of Armando’s apartments? Explain. 2. What rights and
obligations, if any, does Amparo have under the circumstances? Explain. (1995 Bar)
A:
1. Negotiorum gestio existed between Amparo and Armando. She voluntarily took
charge of the agency or management of the business or property of her uncle without
any power from her uncle whose property was neglected. She is called the gestor
negotiorum or officious manager. (Art. 2144, NCC) 2. The following provisions state
the rights and obligations of Amparo: Art. 2145. The officious manager shall perform
his duties with all the diligence of a good father of a family, and pay the damages
which through his fault or negligence may be suffered by the owner of the property
or business under management. The courts may, however, increase or moderate the
indemnity according to the circumstances of each case. Art. 2146. If the officious
manager delegates to another person all or some of his duties, he shall be liable for
the acts of the delegate, without prejudice to the direct obligation of the latter toward
the owner of the business. The responsibility of two or more officious managers shall
be solidary, unless management was assumed to save the thing or business from
imminentdanger.
Art. 2147. The officious manager shall be liable for any fortuitous event: 1. If he
undertakes risky operations which the owner was not accustomed to embark upon; 2.
If he has preferred his own interest to that of theowner; 3. If he fails to return the
property or business after demand by the owner; 4. If he assumed the management in
bad faith. Art. 2148. Except when the management was assumed to save the property
or business from imminent danger, the officious manager shall be liable for fortuitous
events:
(1) If he is manifestly unfit to carry on the management;
(2) If by his intervention he prevented a more competent person from taking up the
management. Art. 2149. The ratification of the management by the owner of
thebusiness produces the effects of an express agency, even if the business may not
have been successful. Art. 2150. Although the officious management may not have
been expressly ratified, the owner of the property or business who enjoys the
advantages of the same shall be liable for obligations incurred in his interest, and
shall reimburse the officious manager for the necessary and useful expenses and for
the damages which the latter may have suffered in the performance of his duties. The
same obligation shall be incumbent upon him when the management had for its
purpose the prevention of an imminent and manifest loss, althoughnobenefitmay
have beenderived. Art. 2151. Even though the owner did not derive any benefit and
there has been no imminent and manifest danger to the property or business, the
owner is liable as under the first paragraph of thepreceding article, provided: 1. The
officious manager has acted in good faith, and 2. The property or business is intact,
ready to be returned to the owner. Art. 2152. The officious manager is personally
liable for contracts which he has entered into with third persons, even though he
acted in the name of the owner, and there shall be no right of action between the
owner and third persons. These provisions shall not apply: 1. If the owner has
expressly or tacitly ratified the management,or 2. When the contract refers to things
pertaining to the owner of the business.