OBLIGATION AND CONTRACTS Passive Subject –Naruto

Active Subject –Phil. Government (BIR)

COVERAGE OF OBLIGATION AND CONTRACTS Prestation –to pay income tax (money)
 Civil Code Article 1156-1304 Juridical Tie –Law (Tax Code)
-Obligations
 Civil Code Article 1305-1422 Example: (Bilateral Obligation)
–Contracts Tanjiro sold a bottle of wine to Inosuke for
1,000
GENERAL PROVISION (OBLIGATION 1)
(CIVIL CODE ARTICLE. 1156-1162) Passive Subject –Tanjiro
Active Subject –Inosuke
What is Obligation?
Prestation –Deliver bottle of wine
Philippine Civil Code Article 1156 defines
Juridical Tie –Contract
obligation as a juridical necessity to give, to do,
or not to do. (Civil Obligation)
(OBLIGATION 2)
Passive Subject –Inosuke
Why civil obligation is a juridical necessity?
Active Subject – Tanjiro
In case of non-compliance, the courts of
Prestation –Pay 1,000
justice may be called upon enforce its
Juridical Tie –Contract
fulfillment or, in default thereof, the economic
value that it represents.
Obligations, Right, Cause of Action
»Obligation –juridical necessity to give, to do
Essential Requisites
Persons or not to do
1. Passive Subject (Obligor) –person who is
»Right –power which a person has under the
bound to the fulfillment of the
law, to demand from another any prestation
obligation
»Cause of Action –act or omission which
2. Active Subject (Obligee) –person who is
violates a right.
entitled to demand the fulfillment of the
obligation.
Injury, Damage and Damages
3. Prestation/Object/Subject Matter –
»Injury –act or omission which causes harm
conduct required to be observed by the
»Damage –the harm done to a party
debtor (It may consists in giving, doing
»Damages –sum of the money recoverable by
or not doing)
reason of damage done
4. Juridical Tie/Vinculum/Vinculum Juris –
binds or connects the parties to the
TYPES OF OBLIGATION ACCORDING TO
obligation.
PRESTATION
1. Real Obligation –to give
Example: (Unilateral Obligation)
2. Personal Obligation
Naruto is obliged to pay his income taxes.
 i. Positive Personal –to do respect to the other, to give something or to
ii. Negative Personal –not to do render some services.

SOURCES OF OBLIGATIONS ARTICLE 1159, Obligations arising from

1. Law contracts have the force of law between the
2. Contracts contracting parties and should be compiled
Article 1157. Obligation arises from: with in good faith.
1. Law
2. Contracts OBLIGATIONS ARISING FROM QUASI-
3. Quasi-contracts CONTRACTS
4. Acts or omissions punished by law Quasi-contract –is that juridical relation
5. Quasi-delicts resulting from certain lawful, voluntary and
unilateral acts by virtue of which the parties
become bound to each other to the end that
OBLIGATIONS ARISING FROM LAW
no one will be unjustly enriched or benefited at
: When imposed by the law itself
the expense of another.
Example:
Example:
»Pay Taxes (Tax Code)
» You received excessive change after buying
»Obligations of Parents to the family (Family
from a store, it is your obligation to return that
Code)
excessive change (solution indebiti)
» Another person took care of your dog while
ARTICLES 1158, Obligations derived from law
you’re away, it is your obligation to reimburse
are not presumed. Only those expressly
him the necessary expense he incurred
determined in this code or in special laws are
(negotiorum gestio)
demandable, and shall be regulated by the
precepts of the law which establishes them;
ARTICLE 2142, Certain lawful, voluntary and
and as to what has not been foreseen, by the
unilateral acts give rice to the juridical relation
provisions of this book.
of quasi-contract to the end that no one shall
Example:
be unjustly enriched or benefited at the
 An employer has no obligation to
expense of another.
furnish free legal assistance to his
employees
Nominate Quasi-contract
 A private school has no legal obligation
Negotiorum gestio (Article 2144-2153)
to provide clothing allowance to its
 Voluntary administration of a property
teachers.
or business without the consent or
authority of the owner.
OBLIGATIONS ARISING FROM CONTRACTS
Contract –is a meeting of minds between two
Solutio Indebiti (Article 2154-2163)
persons whereby one binds himself, with
Innominate Quasi-contract » Unlike other sources of obligation, delicts
Other Quasi-contracts (Article 2164-2175) produce both criminal and civil liabilities.
 When, without the knowledge of a Example:
person obliged to give support, it is » estafa, murder, rape (note doing these crimes
given by a stranger, the latter shall have could get you imprisoned)
a right to claim the save from the
former, unless it appears that he gave it ARTICLE 1161, civil obligations arising from
out of piety and without intention of criminal offenses shall be governed by the
being repaid. penal laws, subject to the provisions of ARTICLE
 When funeral expenses are borne by a 2177, and of the pertinent provisions of
third person, without the knowledge of Character 2, Preliminary Title, on Human
those relatives who were obliged to give Relations, and of Title XVIII of this Book,
support to the deceased, said relatives regulating damages.
shall reimburse the third person, should
the latter claim reimbursement. OBLIGATION ARISING FROM QUASI-DELICTS
 When the person obliged to support to » Also known as tort or culpa
an orphan, or an insane or other (negligence/kapabayaan)
indigent person unjustly refuses to give » This is an act or omiision by one party which
support to the latter, any third person causes damage to another party wherein there
may furnish support to the needy is no pre-existing contract.
individual, with right of reimbursement Example:
from the person obliged to give support. » Because of the organizers’ negligence,
The provisions of this article apply when audiences were hurt during an event.
the father or mother of a child under » Because you are not careful while running in
eighteen years of age unjustly refuses to a busy sidewalk, you bumped into a child and
support him. the child suffered injuries.
 When through an incident or other
cause a person is injured or becomes In both cases the tortfeasors (organizers, you)
seriously ill, and he is treated or helped will answer for the medical expenses of the
while he is not in a condition to give audience (first case) and the child (second case)
consent to a contract, he shall be liable
to pay for the services of the physician ARTICLE 2176, whoever by act or omission
or other person aiding him, unless the causes damage to another, there being fault or
service has been rendered out of pure negligence, is obliged to pay for the damage
generosity. done. Such fault or negligence, if there is no
pre-existing contractual relation between the
OBLIGATIONS ARISING FROM DELICTS parties, is called a quasi-delict and is govern by
» Also known as crime or felony
the provisions of this Chapter (Article 2176- possible, and its special sentimental value to
2194) the injured party and reparation shall be made
 The obligation imposed by Article 2176 accordingly.
is demandable not only for one’s act or Indemnification for consequential damage –
omissions, but also for those of persons shall include not only those caused the injured
for whom one is responsible. party, but also those suffered by his family or
Example, (1) the father and, in case of his by a third person by reason of the cime.
death or incapacity, the mother, are
responsible for the damages caused by the Example Gen stole the vehicle of Senku. Gen
minor children who live in their company. was sighted by the authority and was engaged
(2) The owner and manager of an in a car chase. After a while, Gen was
establishment or enterprise are likewise apprehended by the authority but the vehicle
responsible for damages caused by their he stole from Senku got damaged.
employees in service of the branches in which Furthermore, Senku should have presented the
the latter are employed or on the occasion of vehicle in a car show the same day Gen stole
their functions. the said vehicle. As a result, senku loss
(3) The possessor of an animal or whoever potential incomes from the car show.
may make use of the same is responsible for
the damage which is may cause, although it Restitution –return the vehicle (if the specific
may escape or be lost. This responsibility shall thing cannot be returned then the fair value of
cease only in case the damage should come that thing should be retured)
from force majeure or from the fault of the Reparation –answer for the damage caused to
person who has suffered damage. the vehicle (If the specific thing is damage
(4) Teachers or heads of establishments of beyond repair, because of its sentimental value
arts and trades shall be liable for damages reparation is still possible. The court may assign
caused by their pupils and students or a specific amount for the sentimental value of
apprentice, so long as they remain in their the thing)
custody. Indemnification –since Gen’s act resulted to
Senku’s loss, Gen will also answer the said loss.
SCOPE OF CIVIL LIABILITIES (Consequential Damages, return the vehicle,
Restitution –the restitution of the thing itself pay for repairs, pay for income loss and
must be made whenever possible, with criminal liability)
allowance for any deterioration, or diminution
of value as determined by the court.

Reparation for the damage caused –court shall

determine the amount of damage, taking into
consideration the price of the thing, whenever
 NATURE AND EFFECTS OF OBLIGATION OBLIGATIONS OF THE DEBTOR AND RIGHTS
(CIVIL CODE ARTICLE 1163-1178) AND REMEDIES OF CREDITOR
Obligations of the Debtor
TYPES OF OBLIGATIONS ACCORDING TO ITS 1. Obligation to give a specific thing
PRESTATION a. To deliver the thing
Real Obligations b. To take care of the thing before delivery
1. To give specific thing (Article 1163)
-Particularly designated; or physically c. To deliver fruits of the thing (Article
segregated. 1164)
Example, (1) Nick bound himself to d. To deliver accessions and accessories
deliver to you his only dog tomorrow. (2) although they were not mentioned
Jonathan obliged himself to give you as a (Article 1166)
Christmas gifts his car with plate number e. To pay damages if guilty of fraud,
ABC 123. negligence, delay, or contravention of
the terms of the obligation (Article
2. To give generic thing 1170)
Example, (1) Gary bound himself to give
Ricardo P10,000 tomorrow. (2) Blake 2. Obligation to give a generic thing
obliged himself to deliver a pig on John’s a. To deliver the thing
birthday. b. To bear the expenses of having
someone else comply with the
Personal Obligations obligations (Article 1165, Paragraph 2)
1. Positive Personal Obligation (to do) c. To pay damages if guilty of fraud,
Example, (1) Iruma bound himself to fix negligence, delay, or contravention of
Jojo’s car the following day. (2) Dio obliged the terms of the obligation. (Article
himself to wash Jotaro’s uniform before 1170)
school starts.
3. Obligation to do
2. Negative Personal Obligations (not to a. To do the obligation
do) b. To bear the expenses of having
Example, Kars and Wammu agreed not to someone else comply with the
build any structure on the boundaries of obligation (Article 1167, Paragraph 1)
their properties. c. To undo what has been poorly done
(Article 1167, Paragraph 2)
d. To bear the expenses of having
someone else undo what has been
poorly done (Article 1167, Paragraph 2)
e. To pay damages if guilty of fraud, d. Ask damages (all obligations)
negligence, delay, or contravention of e. Rescission (specific scenarios only)
the terms of the obligation (Article f. Attachment and Execution of Debtor’s
1170) property (usually the last remedy)

4. Obligation not to do. 2. Subsidiary Rights/Remedies

a. Not to do what has been forbidden -cannot be exercise without exercising the
b. To undo what has been done that is principal rights first.
forbidden (Article 1168) a. Accion Subrogatoria –exercise all the
c. To bear the expenses of having right of the debtor
someone else undo what has been b. Accion Pauliana –to impugn contracts
done that is forbidden (Article 1168) that were entered to defraud the
d. To pay damages if guilty of fraud, creditor.
negligence, delay, or contravention of
the terms of the obligation (Article DIFFERENT TYPES OF BREACHES IN
1170) OBLIGATIONS

Rights of the Creditor Article 1170, those who in the performance of

Rights of Creditors Over a thing, their obligations are guilty of fraud (incidental),
(1) Personal Rights –enforceable against a negligence or delay and those who in any
specific passive subject. Acquired from manner contravene the tenor thereof, are liable
the time obligation to deliver arises. for damages
(2) Real Right –enforceable against anyone.
Acquired from Delivery. Fraud
Civil Code Provision 1. Casual Fraud (dolo causante) –Fraud in
Article 1164, the creditor has a right to the obtaining consent
fruits of the thing from the time the 2. Incidental Fraud (dolo incidente) –Fraud
obligation to deliver it arises. However, he in the performance of the obligation.
shall acquire no real right over it until the Note: there can also be incidental fraud while
same has been delivered to him. obtaining consent.

1. Principal Rights/Remedies Deliberate intent to cause damage or

a. Ask specific performance (obligation to injury to another
give a specific thing) Liability cannot be mitigated by the
b. Ask performance (obligation to give a court
generic thing) Waiver of action for future fraud is void.
c. Ask substituted performance
(obligation to do)
Negligence comply or is not ready to comply in a
1. Culpa aquailana (quasi-delict) proper manner with what is incumbent
2. Culpa contractual (contract) upon him.
3. Culpa criminal (delict)  Exceptions: different dates for the
performance of respective obligations
Lack or insufficiency of diligence are fixed by the parties.
required in a given situation
Liability can be mitigated by the court Fortuitous Event (Caso Fortuito)
Waiver of action for future negligence  Requisites
may be valid 1. The cause of the breach is independent
of the debtor’s will
When is negligence equivalent to fraud? 2. The event is unforeseeable or
 When there is GROSS NEGLIGENCE unavoidable
Carelessness which is in reckless 3. The event is such as to render it
disregard for the safety or lives of others, impossible for the debtor to fulfill his
and is so great it appears to be a conscious obligation in a normal manner
violation of another person’s right to safety. 4. The debtor did not take part in causing
It is more than simple inadvertence, but it is the injury to the creditor.
just shy of being intentionally evil.
 Exceptions:
Delay 1. Law or stipulation expressly so declare
1. Mora Solvendi –delay of debtor 2. Nature of the obligation requires the
2. Mora Accipiendi –delay of creditor assumption of risk
3. Compensatio Morae –delay of both 3. Obligation is other than obligation to
creditor and debtor (no delay) give a specific thing.
4. Debtor is already delay
Unilateral Obligations
 General Rule: No demand, no delay Damages
 Exceptions: Needs proof of Pecuniary Loss
1. The law or obligation so declare 1. Actual or Compensatory (copyright
2. Time is the controlling motive for the infringement Article 2199)
establishment of obligation No need for proof of Pecuniary Loss
3. Demand would be useless 2. Moral (physical suffering, fright, serious
anxiety, etc. Article 2217)
Reciprocal Obligations 3. Nominal (to vindicate or recognized a
 General Rule: Delay occurs from the right Article 2221)
moment one party fulfills his
undertaking, while the other does not
 4. Temperate or Moderate (pecuniary loss
cannot be proved with certainty Article
2224)
5. Exemplary or Corrective (imposed to set
an example for the public good Article
2229)
6. Liquidated (damages agreed upon by
parties to a contract Article 2226)

Presumptions
A rule of law which permits a court to
assume a fact is true until such time as there is
a preponderance (greater weight) of evidence
which disproves or outweighs (rebuts) the
presumption.

 2 kinds of Presumptions
1. Conclusive Presumptions –cannot be
rebutted by additional evidence or
argument.
2. Disputable Presumptions –can be
rebutted by additional evidence or
argument.

Transmissibility of rights
 General rule: All rights acquired in virtue
of an obligation are transmissible
 Exceptions:
1. Exempted by law (right to vote during
election)
2. Exempted by stipulation (scholarships
that are not transferrable
3. Not transmissible by nature (right to
attend your own wedding ceremony)