CHAPTER 1 OBLICON.............................

TITLE I
OBLIGATIONS
(Arts. 1156-1304, Civil Code.)
Chapter 1
GENERAL PROVISIONS
ARTICLE 1156. An obligation is a juridical necessity to give, to do, or not to do.
(n)
Meaning of obligation.
The term obligation is derived from the Latin word obligatio, which means tying
or binding.
It is a tie or bond recognized by law by virtue of which one is bound in favor of
another to render something and this may consist in giving a thing, doing a
certain act, or not doing a certain act.
Civil Code definition.
Article 1156 gives the Civil Code definition of obligation in its passive aspect. It
merely stresses the duty under the law of the debtor or obligor (he who has
the duty of giving, doing, or not doing) when it speaks of obligation as a
juridical necessity.
Meaning of juridical necessity.
Obligation is a juridical necessity because in case of noncompliance, the courts
of justice may be called upon by the aggrieved party to enforce its fulfillment
or, in default thereof.
16
Art. 1156 GENERAL PROVISIONS 17
the economic value that it represents. In a proper case, the debtor or obligor
may also be made liable for damages, which represents the sum of money
given as a compensation for the injury or harm suffered by the creditor or
obligee (he who has the right to the performance of the obligation) for the
violation of his rights.
In other words, the debtor must comply with his obligation whether he likes it
or not. Otherwise, his failure will be visited with some harmful or undesirable
consequences. If obligations were not made enforceable, then people can
disregard them with impunity. There are, however, obligations that can not be
enforced because they are not recognized by law as binding
Nature of obligations under the Civil Code.
Obligations that give to the creditor or obligee a right under the law to enforce
their performance in courts of justice are known as civil obligations. They are to
be distinguished from natural obligations, which, not being based on positive
law but on equity and natural law, do not grant a right of action to enforce
their performance although in case of voluntary fulfillment by the debtor, the
latter may not recover what has been delivered or rendered by reason thereof
(Art. 1423.)
Natural obligations are discussed under the Title dealing with "Natural
Obligations."" (Title III, Arts. 1423-1430.)
Essential requisites of an obligation.
Every obligation has four (4) essential requisites, namely:
(1) A passive subject (called debtor or obligor). the person who is bound to the
fulfillment of the obligation; he who has a duty;
the (2) An active subject (called creditor or obligee). person who is entitled to
demand the fulfillment of the obligation; he who has a right;
.................
Unless otherwise indicated refers to an article in the Civil Code.

18. THE LAW ON OBLIGATIONS AND CONTRACTS Art. 1156
(3) Object or prestation (subject matter of the obligation). -the conduct
required to be observed by the debtor. It may consist in giving, doing, or not
doing. Without the prestation, there is nothing to perform. In bilateral
obligations (see Art. 1191.), the parties are reciprocally debtors and creditors;
and
(4) A juridical or legal tie (also called efficient cause). - that which binds or
connects the parties to the obligation. The tie in an obligation can easily be
determined by knowing the source of the obligation. (Art. 1157.)
EXAMPLE: Under a building contract, X bound himself to build a house for Y for
P1,000,000.
Here, X is the passive subject, Y is the active subject, the building of the house
is the object or prestation, and the agreement or contract, which is the source
of the obligation, is the juridical tie.
Suppose X had already constructed the house, and it was the agreement that Y
would pay X after the construction is finished, X then becomes the active
subject and Y, the passive subject.
Form of obligations.
The form of an obligation refers to the manner in which an obligation is
manifested or incurred. It may be oral, or in writing, or partly oral and partly in
writing.
(1) As a general rule, the law does not require any form for obligations arising
from contracts for their validity or binding force. (see Art. 1356.)
(2) Obligations arising from other sources (Art. 1157.) do not have any form at
all.
Obligation, right, and wrong distinguished.
(1) Obligation is the act or performance which the law will enforce.
(2) (2) Right, on the other hand, is the power which a person has under the law,
to demand from another any prestation.
(3) A wrong (cause of action), according to its legal meaning, is an act or
omission of one party in violation of the legal right or rights (ie., recognized by
law) of another. In law, the term injury is also used to refer to the wrongful
violation of the legal right of another.
The essential elements of a legal wrong or injury are:
(a) a legal right in favor of a person (creditor/obligee/plaintiff);
(b) a correlative legal obligation on the part of another
(debtor/obligor/defendant); to respect or not to violate said right; and
(c) an act or omission by the latter in violation of said right with resulting injury
or damage to the former.
An obligation on the part of a person can not exist without a corresponding
right in favor of another and vice-versa. A wrong or cause of action only arises
at the moment a right has been transgressed or violated.
EXAMPLE:
In the preceding example, Y has the legal right to have his house constructed
by X, who has the correlative legal obligation to build the house of Y under
their contract. X has the right to be paid the agreed compensation provided the
house is built according to the terms and conditions of the contract.
The failure of either party to comply with such terms and conditions gives the
other a cause of action for the enforcement of his right and/or recovery of
indemnity for the loss or damage caused to him for the violation of his right.
Kinds of obligation according to the subject matter.
From the viewpoint of the subject matter, obligation may either be real or
personal.
(1) Real obligation (obligation to give) is that in which the subject matter is a
thing which the obligor must deliver to the obligee

20 THE LAW ON OBLIGATIONS AND CONTRACT Art. 1157
EXAMPLE
X (e.g., seller) binds himself to deliver a piano to Y (buyer).
(2) Personal obligation (obligation to do or not to do) is that in which the
subject matter is an act to be done or not to be done. There are two (2) kinds
of personal obligation:
(a) Positive personal obligation or obligation to do or to render service. (see
Art. 1167.)
EXAMPLE: X binds himself to repair the piano of Y.
(b) Negative personal obligation is obligation not to do (which naturally
includes obligations "not to give"). (see Art. 1168.)
EXAMPLE:
X obliges himself not to build a fence on a certain portion of his lot in favor of Y
who is entitled to a right of way over said lot.
ART. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (1089a)
Sources of obligations.
The sources of obligations are enumerated below:
(1) (Law when they are imposed by law itself.
EXAMPLES:
Obligation to pay taxes; obligation to support one's family. (Art. 291.)
(2) Contracts. when they arise from the stipulation of the parties. (Art. 1306.)
EXAMPLE:
A The obligation to repay a loan or indebtedness by virtue of an agreement.
(3) Quasi-contracts. when they arise from lawful, voluntary, and unilateral acts
which are enforceable to the end that no one shall be unjustly enriched or
benefited at the expense of another. (Art. 2142.) In a sense, these obligations
may be considered as arising from law.
EXAMPLE:
The obligation to return money paid by mistake or which is not due. (Art.
2154.)
(4) Crimes or acts or omissions punished by law. when they arise from civil
liability, which is the consequence of a criminal offense. (Art. 1161.)
EXAMPLE:
The obligation of a thief to return the car stolen by him; the duty of a killer to
indemnify the heirs of his victim.
(5) Quasi-delicts or torts. when they arise from damage caused to another
through an act or omission, there being fault or negligence, but no contractual
relation exists between the parties. (Art. 2176.)
EXAMPLES:
The obligation of the head of a family that lives in a building or a part thereof to
answer for damages caused by things thrown or falling from the same (Art.
2193.); the obligation of the possessor of an animal to pay for the damage
which it may have caused. (Art. 2183.)
There is no obligation as defined in Article 1156, if its source is not any of those
enumerated in Article 1157.

22 THE LAW ON OBLIGATIONS AND CONTRACTS Art. 1158
Sources classified.
The law enumerates five (5) sources of obligations. They may be classified as
follows:
(1) Those emanating from law; and
(2) Those emanating from private acts which may be further subdivided into:
(a) Those arising from licit acts, in the case of contracts and quasi-contracts
(infra.); and
(b) Those arising from illicit acts, which may be either punishable in the case of
delicts or crimes, or not punishable in the case of quasi-delicts or torts. (infra.)
Actually, there are only two (2) sources: law and contracts, because obligations
arising from quasi-contracts, delicts, and quasi-delicts are really imposed by
law. (see Leung Ben vs. O'Brien, 38 Phil. 182.)
ART. 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 tem; and as to what
has not been foreseen, by the provisions of this Book. (1090)
Legal obligations.
Article 1168 refers to legal obligations or obligations arising from law. They are
not presumed because they are considered a burden upon the obligor. They
are the exception, not the rule. To be demandable, they must be clearly set
forth in the law, i.e., the Civil Code or special laws. Thus:
(1) An employer has no obligation to furnish free legal assistance to his
employees because no law requires this, and therefore, an employee may not
recover from his employer the amount he may have paid a lawyer hired by him
to recover damages caused to said employee by a stranger or strangers while in
the performance of his duties. (De la Cruz vs. Northern Theatrical Enterprises,
95 Phil. 739.)
(2) A private school has no legal obligation to provide clothing allowance to its
teachers because there is no law which Imposes this obligation upon schools.
But a person who wins money in gambling has the duty to return his winnings
to the loser. This obligation is provided by law. (Art. 2014.)
Under Article 1158, special laws refer to all other laws not contained in the Civil
Code Examples of such laws are Corporation Code, Negotiable Instruments
Law, Insurance Code, National Internal Revenue Code, Revised Penal Code,
Labor Code, etc.
ART. 1159. Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith. (1091a)
Contractual obligations.
The above article speaks of contractual obligations or obligations arising from
contracts or voluntary agreements, It presupposes that the contracts entered
into are valid and enforceable.
A contract is a meeting of minds between two (2) (or more) persons whereby
one binds himself, with respect to the other, to give something or to render
some service. (Art. 1305.)
(1) Binding force. Obligations arising from contracts
have the force of law between the contracting parties, i.e., they have the same
binding effect of obligations imposed by laws. This does not mean, however,
that contract is superior to the law. As a source of enforceable obligation,
contract must be valid and it cannot be valid if it is against the law.
(2) Requirement of a valid contract. A contract is valid
(assuming all the essential elements are present; Art. 1318.) if it is not contrary
to law, morals, good customs, public order, and public policy. It is invalid or
void if it is contrary to law, morals, good customs, public order, or public policy.
(Art. 1306.)

In the eyes of the law, a void contract does not exist. (Art. 1409.) Consequently,
no obligations will arise. A contract may be valid but cannot be enforced.
This is true in the case of unenforceable contracts. (see Arts. 1317, 1403.)
(3) Breach of contract. A contract may be breached or violated by a party in
whole or in part A breach of contract takes place when a party fails or refuses
to comply, without legal reason or justification, with his obligation under the
contract as promised.
Compliance in good faith.
Compliance in good faith means compliance or performance in accordance
with the stipulations or terms of the contract or agreement. Sincerity and
honesty must be observed to prevent one party from taking unfair advantage
over the other.
Non-compliance by a party with his legitimate obligations after receiving the
benefits of a contract would constitute unjust enrichment on his part. Although
a contract provides no penalty for its violation, a party cannot breach it with
impunity. The oppressed party is afforded remedies to protect his rights. (see
Art. 1191.)
EXAMPLES:
(1) If S agrees to sell his house to B and B agrees to buy the house of S,
voluntarily and willingly, then they are bound by the terms of their contract
and neither party may, upon his own will, and without any justifiable reason,
withdraw from the contract or escape from his obligations thereunder.
That which is agreed upon in the contract is the law between S and B and must
be complied with in good faith.
(2) A contract whereby S will kill B in consideration of P1,000 to be paid by C, is
void and non-existent because killing a person is contrary to law. Likewise, an
agreement whereby S will render domestic service gratuitously until his loan to
B is paid, is void as being contrary to law and morals. (see Art. 1689; De los
Reyes vs. Alejado, 16 Phil. 499.)
In both cases, S has no obligation to comply with his agreements.
ART. 1160. Obligations derived from quasi contracts shall be subject to the
provisions of Chapter 1, Title XVII of this Book. (n)
Quasi-contractual obligations.
Article 1160 treats of obligations arising from quasi-con-tracts or contracts
implied in law.
A quasi-contract is that juridical relation resulting from lawful, voluntary and
unilateral acts by virtue of which the parties become bound to each other to
the end that no one will be unjustly enriched or benefited at the expense of
another. (Art. 2142.)
It is not, properly, a contract at all. In contract, there is a meeting of the minds
or consent (see Arts. 1318, 1319.); the parties must have deliberately entered
into a formal agreement. In a quasi-contract, there is no consent but the same
is supplied by fiction of law. In other words, the law considers the parties as
having entered into a contract, although they have not actually done so, and
irrespective of their intention, to prevent injustice or the unjust enrichment of
a person at the expense of another.
Kinds of quasi-contracts.
The principal kinds of quasi-contracts are negotiorum gestio and solutio
indebiti.
(1) Negotiorum gestio is the voluntary management of the property or affairs
of another without the knowledge or consent of the latter. (Art. 2144.)
EXAMPLE:
X went to Baguio with his family without leaving somebody to look after his
house in Manila. While in Baguio, a big fire broke out near the house of X.
Through the effort of Y, a neighbor, the house of X was saved from being
burned. Y, however, incurred expenses.

In this case, X has the obligation to reimburse Y for said expenses, although he
did not actually give his consent to the act of Y in saving his house, on the
principle of quasi-contract.
(2) Solutio indebiti is the juridical relation which is created when something is
received when there is no right to demand it and it was unduly delivered
through mistake. (Art. 2154.) It is based on the principle that no one shall
enrich himself unjustly at the expense of another.
The requisites are:
(a) There is no right to receive the thing delivered;
and
(b) The thing was delivered through mistake.
EXAMPLE:
Dowes P1,000. If D paid T believing that T was authorized to receive payment
for C, the obligation to return on the part of T arises. If D paid C P2,000 by
mistake, C must return the excess of P1,000. The presumption (see Art. 1176.),
however, is that "money paid by one to another was due to the latter," unless
the payor proves otherwise.
(3) Other examples of quasi-contracts. They are provided in Articles 2164 to
2175 of the Civil Code. The cases that have been classified as quasi-contracts
are of infinite variety, and when for some reason recovery cannot be had on a
true contract, recovery may be allowed on the basis of a quasi-contract.
EXAMPLE:
S, seller of goat's milk leaves milk at the house of B each morning. Buses the
milk and places the empty bottles on the porch. After one (1) week, S asks
payment for the milk delivered.
Here, an implied contract is understood to have been entered into by the very
acts of S and B, creating an obligation on the part of B to pay the reasonable
value of the milk, otherwise, B would be unjustly benefited at the expense of S.
ART. 1161. Civil obligations arising from criminal offenses shall be governed by
the penal laws, subject to the provisions of Article 2177, and
of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations,
and of Title XVIII of this Book, regulating damages. (1092a)
Civil liability arising from crimes or delicts.
This article deals with civil liability for damages arising from crimes or delicts.
(Art. 1157[4].)
(1) Civil liability in addition to criminal liability. Oftentimes, the commission of a
crime causes not only moral evil but also material damage. From this principle,
the rule has been established that every person criminally liable for an act or
omission is also civilly liable for damages suffered by the aggrieved party. (see
Art. 100, Revised Penal Code.)
(2) Criminal liability without civil liability. In crimes, however, which cause no
material damage (like contempt, insults to persons in authority, gambling
violations of traffic regulations, etc.), there is no civil liability to be enforced.
(3) Civil liability without criminal liability. A person not criminally responsible
may still be liable civilly (Art. 29; Sec. 2[c), Rule 111, Rules of Court.), such as
failure to pay a contractual debt, causing damage to another's property
without malicious or criminal intent or negligence, etc., or when the obligation
arises from quasi-delict (Art. 1162.), not alleged and proved as a criminal
offense.
Scope of civil liability.
The extent of the 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. (Art. 104, Revised Penal Code.)

EXAMPLE:
X stole the car of Y. If X is convicted, the court will order X:
(1) to return the car or to pay its value if it was lost or destroyed; (2) to pay for
any damage caused to the car, and (3) to pay such other damages suffered by Y
as a consequence of the crime.
ART. 1162. Obligations derived from quasi-delicts shall be governed by the
provisions of Chapter 2, Title XVII of this Book, and by special laws. (1093a)
Obligations arising from quasi-delicts.
The above provision treats of obligations arising from quasi-delicts or torts.
(see Arts. 2176 to 2194.)
A quasi-delict is an act or omission by a person (tortfeasor) which causes
damage to another in his person, property, or rights giving rise to an obligation
to pay for the damage done, there being fault or negligence but there is no
preexisting contractual relation between the parties. (Art. 2176.)
Requisites of quasi-delict.
Before a person can be held liable for quasi-delict, the following requisites
must be present:
(1) There must be an act or omission;
(2) There must be fault or negligence;
(3) There must be damage caused;
(4) There must be a direct relation or connection of cause and effect between
the act or omission and the damage; and
(5) There is no pre-existing contractual relation between the parties.
EXAMPLE: While playing softball with his friends, X broke the window glass of
Y, his neighbor. The accident would not have happened had they played a little
farther from the house of Y.
In this case, X is under obligation to pay the damage caused to Y by his act
although there is no pre-existing contractual relation between them because
he is guilty of mere fault or negligence without any criminal intent.
Crime distinguished from quasi-delict.
The following are the distinctions:
(1) In crime, there is criminal or malicious intent or criminal negligence, while in
quasi-delict, there is only negligence;
(2) In crime, the purpose is punishment/while in quasi-delict, indemnification
of the offended party;
(3) Crime affects públic interest, while quasi-delict con-cerns private interest;
(4) In crime, there are generally two liabilities: criminal and civil, while in quasi-
delict, there is only civil liability;
(5) Criminal liability can not be compromised or settled by the parties
themselves, while the liability for quasi-delict can be compromised as any other
civil liability; and
(6) In crime, the guilt of the accused must be proved beyond reasonable doubt,
while in quasi-delict, the fault or negligence of the defendant need only be
proved by preponderance (ie., superior or greater weight) of evidence.
-000
STUDY GUIDE
Definitions
Define or give the meaning of the following:
1. obligation

2. quasi-contract
......… The evidence must be very clear and convincing as will engender belief in
an unprejudiced mind that the accused is really guilty.
30 THE LAW ON OBLIGATIONS AND CONTRACTS
3. compliance in good faith
4. wrong
5. solutio indebiti
II. Discussions
1. What are the essential requisites of an obligation? Give examples to
illustrate them.
2. Why are obligations under the Civil Code a juridical necessity? Explain.
3. What are the elements or requisites in order that a person may acquire a
right of action in court against another to enforce the performance of the
latter's obligation?
4. May a person incur obligations even without entering into any contract or
voluntary agreement? Explain.
III. Problems
Explain or state briefly the rule or reason for your answers.
1. X saw at about one (1:00p.m.) in the afternoon a child alone in a shopping
mall. The child who strayed from Y, his mother, was in tears and appeared very
hungry. Out of pity, X took him to a restaurant to eat for which he spent P150.
Y did not give her consent to the good deed of X. Furthermore, they were on
their way home before the child got lost. Is X entitled to be reimbursed by Y for
the amount of P150?
2. While the car of X was parked by the roadside, it was bumped at the rear by
a jeep belonging to Y. Only the car of X suffered damage. Under the
circumstances, does it follow that Y is liable to X for the damage?
3. In the same problem, has X the right to ask indemnity from R, employer of X,
on the ground that when the accident occurred X was then on his way to
transact business with a client of R?
GENERAL PROVISIONS 31
4. D (debtor) borrowed P10,000 from C (creditor). On the due date of the loan,
D could not pay C because he lost to a robber the P10,000 intended for C. In
addition, he suffered financial reverses, and he was short of cash even for his
current family's needs. Is D legally justified to refuse to pay C?

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