INTRODUCTION

Law-making

In sum, two steps are required before a bill becomes law. First, it must be
approved by both Houses of Congress (the Senate and the House of
Representatives). Second, it must be presented to and approved by the President.

As summarized by Justice Isagani Cruz and Fr. Joaquin G. Bernas, S.J., the
following are the procedure for the approval of bills:

A bill is introduced by any member of the House of the Representatives or the

Senate except for some measures that must originate only in the former
chamber.

The first reading involves only a reading of the number and title of the
measure and its referral by the Senate President or the Speaker to the proper
committee for study.

The bill may be “killed” in the committee or it may be recommended for

approval, with or without amendments, sometimes, after public hearings are
first held thereon. If there are other bills of the same nature or purpose, they
may all be consolidated into one bill under common authorship or as a
committee bill.

Once reported out, the bill shall be calendared for the second reading. It is at
this stage that the bill is read in its entirely, scrutinized, debated upon and
amendment when desired. The second reading is the most important stage in
the passage of a bill.

The bill as approved on second reading is printed in its final form and copies
thereof are distributed at least three days before the third reading. On the
third reading, the members merely register their votes and explain them if
they are allowed by the rules. No further debate is allowed.

Once the bill passes third reading, it is sent to the other chamber, where it will
also undergo the three readings. If there are differences between the versions
approved by the two chambers, a conference committee representing both
Houses will draft a compromise measure that if ratified by the Senate and the
House of Representatives will then be submitted to the President for his
consideration.

The bill is enrolled when printed as finally approved by the Congress,

thereafter authenticated with the signatures of the Senate President, the
Speaker, and Secretaries of their respective chambers.
 The President’s role in law-making

The final step is submission to the President for approval, Once approved, it
takes effect as law after the required publication.

Where Congress delegates the formulation of rules to implement the law it has
enacted pursuant to sufficient standards established in the said law, the law must be
complete in all its essential terms and conditions when it leaves the hands of the
legislature. And it may be deemed to have left the hands of the legislature when it
becomes effective because it is only upon effectivity of the statute that legal rights and
obligations become available to those entitled by the language of the statute.
Subject to the indispensable requisite of publication under the due process clause, the
determination as to when a law takes effect is wholly the prerogative of Congress. As
such, it is only upon its effectivity that a law must be executed and the executive
branch acquires the duties and powers to execute the said law. Before that point, the
role of the executive branch, particularly of the President, is limited to approving or
vetoing the law.
 OBLIGATIONS AND CONTRACTS

TITLE I – OBLIGATIONS
CHAPTER I
GENERAL PROVISIONS

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

What is obligation?
Under the New Civil Code (NCC), obligation is a juridical necessity to give, to
do or not to do.
An obligation “to do” includes all kinds of work or service; while an
obligation “to give” is a prestation which consists in the delivery of a movable or an
immovable thing in order to create a right, or for the use of the recipient, or for its
simple possession, or in order to return to its owner.

What is right?
A right is a claim o title to an interest in anything whatsoever that is
enforceable by law. A right is a power, privilege, or immunity guaranteed under the
constitution, statute or decisional law, or recognized as a result of long usage,
constitutive of a legally enforceable claim of one person to other.
For every right enjoyed by any person, there is a corresponding obligation on
the part of another person to respect such right. Thus, Justice J.B.L. Reyes offers the
definition given by Arias Ramos as a more complete definition:
An obligation is a juridical relation whereby a person (called the creditor) may
demand from another (called the debtor) the observance of a determinative conduct
(the giving, doing or not doing), and in case of breach, may demand satisfaction from
the assets the latter.

Chapter 1 – General Provisions

Meaning of Civil Action
A civil action is one by which a party sues another for the enforcement or
protection of a right, or the prevention or redress of the wrong.

Meaning of Cause of Action

A cause of action is the act or omission by which a party violates right of
another.

What is a compliant?
The compliant contains the written statements alleging the plaintiff’s claim or
cause or causes of action. It is the initial written statement that starts with a civil
action. the function of a complaint is to give the defendant notice of the nature and
basis for claim.

Complaint in Relation to Cause of Action

A complaint states a cause of action where it contains three essential elements
of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative
obligation of the defendant, and (3) the act or omission of the defendant in violation
of the said legal right. If these elements are absent, the complaint becomes
vulnerable to dismissal on the ground of failure to state a cause of action.

Meaning of Plaintiff
A plaintiff is the party who brings a civil suit in a course of law. He is the
person who files the complaint in court.

Meaning of Defendant
A person sued in a civil proceeding. He is the person who will be required to
answer the complaint in court.

What is the REAL OBLIGATION (obligation to give)?

Obligation of the debtor or obligor to deliver a thing, movable or immovable
to the creditor or obligee for the purpose of transferring ownership or for the use or
possession of the recipient.

KINDS OF REAL OBLIGATION

1. Determinate or Specific Real Obligation
The obligation of the debtor or obligor to deliver a determinate or specific
thing to the creditor or obligee.
Meaning of specific or determinate thing
A thing is determinate when it is particularly designated or physically
segregated from all others of the same class.
Example:
The obligation to deliver a car with plate number ABC123.

2. Indeterminate or Generic Real Obligation

The obligation of the debtor or obligor to deliver an indeterminate or generic
thing to the creditor or obligee.

Meaning of generic or indeterminate thing

A thing is indeterminate when it is designated merely by its class or genus
without any particular designation or physical segregation from all others of the
same class.
 Example:
The obligation to deliver five tables.

What is PERSONAL OBLIGATION

1. Positive Personal Obligation (obligation to do)
This is the obligation of the debtor or obligor to perform some work or the
services for the creditor or obligee.
Example:
The obligation of X to repair the bicycle of Y.
2. Negative Personal Obligation (obligation not to do)
This is the obligation of the debtor or obligor not to perform in some act in
favor of the creditor or the obligee.
Example:
The obligation not to construct an extension on a house, as per agreement in a
contract.

ESSENTIAL ELEMENTS OF AN OBLIGATION

1. Passive subject or debtor or obligor
The person from whom the obligation is juridically demandable. He is the
person who has the right to demand compliance of the obligation to give, to do
or not to do.
2. Active subject or creditor or obligee
The person who has the right to demand the fulfillment of the obligation. He
is the person who has the right to demand compliance of the obligation to give,
to do or not to do.
3. Object
The fact, prestation or service. It is the particular conduct of the debtor or
obligor which may consist in giving, doing or not doing something.
4. Juridical or legal tie or efficient cause or vinculum juris
It is which creates the the relation between the passive subject or obligor and
the active subject or obligee.

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

obligation is constituted upon the concurrence of the essential elements thereof, viz:
(a) The vinculum juris or juridical tie which is the efficient cause established by the
various sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts);
(b) the object which is the prestation or conduct; required to be observed (to give, to
do or not to do); and © the subject-persons who, viewed from the demandability of the
obligation, are the active (obligee) and the passive (obligor) subjects.14
 Example:

In a contract executed between X and ABC University, X agreed to teach for one year
for a compensation. In this case, X is the debtor, as he is obligated to teach, and ABC
University is the creditor. To teach for one year is the object of the obligation and the legal tie
is the contract.

However, since their contract is reciprocal, ABC University is also a debtor with
regard to X’s compensation.

Art. 1157. Obligations arise from:

1. Law;
2. Contracts;
3. Quasi-contracts;
4. Acts or omissions punished by law; and
5. Quasi-delicts.

The above enumerations are the so-called sources of obligation under the

Civil Code. Consequently, an obligation imposed on a person, whether natural or

juridical, and the corresponding right granted to another, must originate from either
or a combination of these sources.

Thus, a Complainant or Petition filed by a person claiming a right to the

Office of the President of this Republic, but without stating the source of his
purported right, cannot be said to have sufficiently stated a cause of action. Also, a
person claiming to be the owner of a parcel of land cannot merely state that he has a
right to the ownership thereof, but must likewise assert in the Complaint either a
mode of acquisition of ownership or at least a certificate of title in his name.15

Note:

The sources of obligation under this provision are exclusive.

Is Practice or Custom a source of obligation?

 A practice or custom is, as a general rule, not a source of a legally demandable
or enforceable right. Indeed, in labor cases, benefits which were voluntarily
given by the employer, and which have ripened into company practice, are
considered as rights that cannot be diminished by the employer. Nevertheless,
even in such cases, the source of the employees’ right is not custom, but
ultimately, the law, since Article 100 of the Labor Code explicitly prohibits
elimination or diminution of benefits.16

1. What is law?
A rule of conduct, just, obligatory, promulgated by legitimate authority, and
of common observance and benefit.17

Example:
The duty to pay taxes under the National Internal Revenue Code or the Local
Government Code. The obligation to support one’s family under the Family Code of the
Philippines.

Problem:
X Corp. is engaged in the manufacture of wines and liquor. It has
registered its mark of ownership of its bottles under Republic Act No. 623. In the
conduct of its business, it sells its products to the public excluding the bottles. It
makes substantial investments in brand new bottles which it buys from glass
factories and which they use for about five times in order to recover the cost
acquisition. X Corp. thus retrieves its used empty bottles, washes and uses them
over and over again as containers for its products.

On the other hand, Y Co. is engaged in the production of patis and

other food seasonings and is engaged in the buying and selling of all kinds of foods.
In producing patis and other food seasonings, Y Co. uses as containers, bottles
owned by X Corp. without any authority or permission from the latter. In the
process, Y Co. is unduly benefited from the use of the bottles.
Subsequently, a total of 26,241 empty bottles were seized at the address
of Y Co. where the latter claimed that the bottles were purchased from junk
dealers; hence, it became the owner thereof.

Is Y Co. covered by Section 6 of R.A. 623?

 Answer: Pertinent provision of Republic Act No. 623 is quoted hereunder for
clarity:

Sec. 2. It shall be unlawful for any person, without the written consent of
the manufacturer, bottler, or seller, who has successfully registered the marks of
ownership in accordance with the provisions of the next preceding section, to fill
such bottles, xxx, or other similar containers so marked or stamped, for the
purpose of sale, xxx. Any violation of this section shall be punished by a fine of not
more than one thousand pesos or imprisonment of not more than one year or both.

XXX

Sec. 6. The provisions of this Act shall not be interpreted as prohibiting

the use of bottles as containers for "sisi," "bagoong," "patis," and similar
native products.

Republic Act No. 623, was meant to protect the intellectual property
rights of the registrants of the containers and prevent unfair trade practices
and fraud on the public. However, the exemption granted in Sec. 6 thereof
was deemed extremely necessary to provide assistance and incentive to the
backyard, cottage and small-scale manufacturers of indigenous native
products such as patis, sisi and toyo who do not have the capital to buy brand
new bottles as containers nor afford to pass the added cost to the majority of
poor Filipinos, who use the products as their daily condiments or viands.

In view of these considerations, the Supreme Court held that the

exemption contained in Section 6 of Rep. Act No. 623 applies to all
manufacturers of sisi, bagoong, patis and similar native products without distinction
or qualification as to whether they are small, medium or large scale.18
Note: The above case illustrates an obligation arising from law. Republic Act
623 prohibits, among others, the filling up of the registered bottles of manufacturers,
bottlers or sellers. However, the law itself provides for an exemption, that is, it does
not apply to all manufacturers of sisi, bagoong, patis and similar native products.

II. What is a contract?

A contract is a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some service.19

Among the sources of an obligation is a contract20, which is a meeting of

minds between two persons whereby one binds himself, with respect to the other, to
give something or to render some service21. A contract undergoes various stages that
include its negotiation or preparation, its perfection and, finally, its consummation.

Negotiation covers the period from the time the prospective contracting
parties indicate interest in the contract to the time the contract is concluded
(perfected).

The perfection of the contract takes place upon the concurrence of the
essential elements thereof.

The stage of consummation begins when the parties perform their contract
culminating in the respective undertakings under the extinguishment thereof.22

Until the contract is perfected, it cannot, as an independent source of

obligation, serve as a binding juridical relation.23

Article 1159 of the NCC provides that obligations arising from contracts have
the force of law between the contracting parties and should
____________________

18 see Twin Ace Holdings Corporation vs. Rufina and Company, G.R. No. 160191, June 8, 2006.
19 Art. 1305,NCC.
20 Art. 1157, NCC.
21 Art. 1305, NCC.
22 Ang Yu Asuncion, et.al. vs. CA and Buen Realty Development Corporation, G.R. Na. 109125,
December 2, 1994.
23 Ang Yu Asuncion, et.al. vs. CA and Buen Realty Development Corporation, GR. No. 109125,
December 2, 1994.

be complied with in good faith. The terms of a contract determine respective

obligations of the contracting parties thereto. Therefore, an contracting party who
violates the stipulations therein should be require to perform their obligations under
the agreement.

It is fundamental that a contract is the law between the parties. Obligations

arising from contracts have the force of law between the contracting parties and
should be complied with in good faith. Unless the stipulations in a contract are
contrary to law, morals, good customs, public order or public policy, the same are
binding as between the parties. It is a general principle of law that no one may be
permitted to change his mind or disavow and go back upon his own acts, or to
proceed contrary thereto, to the prejudice of the other party. Likewise, it is settled
that if the terms of the contract clearly express the intention of the contracting
parties, the literal meaning of the stipulations would be controlling.24

It is settled that in culpa contractual, the mere proof of the existence of the
contract and the failure of its compliance justify, prima facie, a corresponding right
of relief.25 Culpa contractual means the negligence in the performance of a contract.

What is the meaning of Quasi?

This is a Latin term which means "as if."

III. What is Quasi-Contract?

Certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasi-contract to the end that no one shall be unjustly enriched or
benefited at the expense of another.26

Conditions of unjust enrichment

Following Article 22 of the New Civil Code, two conditions must concur to
declare that a person has unjustly enriched himself or herself, namely:
1. A person is unjustly benefited; and
2. Such benefit is derived at the expense of or to the damage of another.27

KINDS OF QUASI-CONTRACTS
1. Negotiorum Gestio 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

____________________
24 Edsel Liga vs. Allegro Resources Corp, G.R. No. 175554, December 23, 2008.
25 Joseph Saludaga vs, Far Eastern Univerisity and Edilberto C. De Jesus, G.R. No.179337, April 30, 2008.
26 Art. 2142, NCG.
27 Victoria Moreño-Lentfer, et.al, vs. Hans Jurgen Wolff, G.R. No. 152317, November 10, 2004.

and its incidents, or to require the person concerned to substitute him, if the owner is
in a position to do so.28

There is no Negotiorum Gestio in either of these instances:

a. When the property or business is not neglected or abandoned;
b. If in fact the manager has been tacitly authorized by the owner.29

2. Solutio Indebiti
 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.30

For the extra-contractual obligation of solutio indebiti to arise, the

following requisites must be proven:
a. The absence of a right to collect the excess sums; and
b. The payment was made by mistake.31

Problem:
H, W, and J, alleged that with Z, they entered into a contract for: (1) the
sale of a beach house owned by J, and (2) the assignment of J's contract of
lease on the land where the house stood. The sale of the beach house and the
assignment of the lease right would be in the name of W, but the total
consideration of 220,000 Deutschmarks (DM) would be paid by 2. A
promissory note was executed by Z in favor of J.

According to Z, however, H and W were his friends who held in trust

for him, a time deposit account in the amount of DM 200,000 at S Bank.
Apprised of his interest to own a house along a beach, H and W urged him to
buy J's beach house and lease rights. Z agreed and through a bank-to-bank
transaction, he paid J the amount of DM 221,700 as total consideration for the
sale and assignment of the lease rights. However, J and W surreptitiously
executed a deed of sale whereby the beach house was made to appear as sold
to W for only P100,000. The assignment of the lease right was likewise made
in favor of W. Upon learning this, Z filed a Complaint for annulment of sale.

Does the principle of solutio indebiti apply in the present case?

Answer:
The quasi-contract of solutio indebiti harks back to the ancient
principle that no one shall enrich himself unjustly at the

____________________
28 Art 2144, NCC.
29 Art. 2144, NCC.
30 Art. 2154, NCC.
31 Titan-Ikeda Construction & Development Corporation vs. Primetown Property Group, Inc. G.R. No.
158768, February 12, 2008.

expense of another. It applies where (1) a payment is made when there exists no
binding relation between the payor, who has no duty to pay, and the person who
received the payment, and (2) the payment is made through mistake, and not
through liberality or some other cause.

In the instant case, records show that a bank-to-bank payment was made by Z
to J in favor of W. Z was under no duty to make such payment for the benefit of W.
There was no binding relation between Z and the beneficiary, W. The payment was
clearly a mistake. Since W received something when there was no right to demand it, she
had an obligation to return it.
The Court is convinced that W had been unjustly enriched at the expense of Z. She
acquired the properties through deceit, fraud and abuse of confidence. The principle
of justice and equity does not work in her favor but in favor of Z. Whatever she may
have received by mistake from and at the expense of Z should, thus, be returned to
the latter, if the demands of justice are to be served.23

3. Other Quasi-Contracts
Those support given by strangers as enumerated under article 2164 to 2175
(these articles are presented under Article 1160) of the New Civil Code.

Problem:
Spouses H and W executed a contract over their conjugal house and lot in
favor of Y for and in consideration of P1,310,430. The contract granted the spouses
the option to repurchase the property within six months for P1,310,430 plus the
agreed interest.

Subsequently, W tendered to Y the amount of P1,633,034.20 in the form of two

manager's checks, which the latter refused to accept for being allegedly insufficient.
Hence, W filed a Complaint for the redemption of the property. She deposited with
the RTC two checks that Y refused to accept.

Y testified that she incurred expenses including payment of real estate taxes in
arrears, transfer tax and capital gains tax, and other expenses. Y admitted though
that W has tendered payment amounting to P1,633,034.20 in the form of two
manager's checks, but these were refused acceptance for being insufficient. She also
claimed that several letters were sent to W and her lawyer, informing them of the
computation of the loan obligation inclusive of said expenses.

____________________
32 see Victoria Moreño-Lentfer, et.al. vs. Hans Jurgen Wolff, G.R. No. 152317, November 10, 2004.

Is W liable for the reimbursement of the real property taxes?

 Answer:
The Court observes that Y paid real property taxes amounting to
P67.567.10 to halt the auction sale by the City of Muntinlupa, Her payment
was made in good faith and benefited W. Accordingly, Y should be
reimbursed; otherwise, W would be unjustly enriched, under Article 2175 of
the Civil Code which provides:

Art. 2175. Any person who is constrained to pay the taxes of Art. 2175.
another shall be entitled to reimbursement from the latter.33

IV. What is Delict or also known as "Acts or Omissions Punished by Law"?

A violation of the law; especially, a wrongful act or omission giving A
violation rise to a claim for compensation.34

Every person criminally liable for a felony is also civilly liable (Are 100,
Revised Penal Code).

Civil Liabilities in Delict35

1. Restitution
The restitution of the thing itself must be made whenever
possible, with allowance for any deterioration, or diminution of value
as determined by the court.
The thing itself shall be restored, even though it be found in the
possession of a third person who has acquired it by lawful means,
saving to the latter his action against the proper person, who may be
liable to him.
This provision is not applicable in cases in which the thing has
been acquired by the third person in the manner and under the
requirements which, by law, bar an action for its recovery.36

2. Reparation of the damage caused The court shall determine the amount
of damage, taking into consideration the price of the thing, whenever possible, and
its special sentimental value to the injured party, and reparation shall be made
accordingly.37

____________________
33 see Myrna Ramos vs. Susana Sarao and Jonas Ramos, G.R. No. 149756, February 11, 2005.
34 Black's Law Dictionary, p. 460, Eighth Edition.
35 Art. 104, Revised Penal Code.
36 Art.105, Revised Penal Code.
37 Art.106, Revised Penal Code.
3. Indemnification for consequential damages
Indemnification for consequential damages shall include not only those
caused the injured party, but also those suffered by his family or by a third person by
reason of the crime.38

Problem:
After trial, the trial court rendered a decision finding X guilty beyond
reasonable doubt with murder for allegedly shooting Y with firearms which directly
caused his death and was sentenced to suffer the penalty of Reclusion Perpetua. He
was committed to the New Bilibid Prison (NBP).
While X's case is on appeal with the Supreme Court, the Director of the
Bureau of Corrections informed the Court that X had died at the NBP Hospital.
Will the death of X during appeal of his conviction totally extinguish his civil
liability?
Answer:
The death of X during the pendency of his appeal extinguished his criminal as well as
his civil liability, based solely on delict (civil líability ex delicto).

The consequences of X's death are provided for in Article 89 (1) of the Revised
Penal Code, which reads as follows:

"Art. 89. How criminal liability is totally extinguished. Criminal liability is totally
extinguished:

1. By the death of the convict, as to the personal penalties; and as to pecuniary

penalties, liability therefor is extinguished only when the death of the offender occurs before
final judgment;

XXX

In the present case, it is clear that the death of X extinguished his criminal
liability. Moreover, because he died during the pendency of the appeal and before
the finality of the judgment against him, his civil liability arising from the crime or
delict (civil liability ex delicto) was also extinguished. It must be added, though, that
his civil liability may be based on sources of obligation other than delict (i.e. Law,
Contracts, Quasi-contract, and Quasi-delicts). For this reason, the victims may file a

____________________
38 Art.107, Revised Penal Code. 12
 separate civil action against his estate, as may be warranted by law and
procedural rules.39

V. QUASI-DELICTS
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there
is no pre-existing contractual relation between the parties, is called a quasi-delict.40

Quasi-delict (Quasi Ex-delicto) is the equivalent of the term "tort" in Anglo-

American law. It is also known as "culpa-aquiliana."

Elements of Negligence:
1. The fault or negligence of the defendant;
2. The damage suffered or incurred by the plaintiff; and
3. The relation of cause and effect between the fault or negligence of the
defendant and the damage incurred by the plaintiff.
To reiterate, a plaintiff is the party who brings a civil suit in a court of law.41 A
defendant is a person sued in a civil proceeding.42

Kinds of Negligence
1. Culpa Aquiliana or Quasi-Delict
This is negligence resulting from the failure to observe the required
diligence which causes damage to another person.
2. Culpa Contractual
This is negligence in the performance of a pre-existing contract.

Note:
Both culpa aquiliana and culpa contractual are civil negligence.

3. Culpa Criminal
This is also known as Criminal Negligence. This is negligence which
results in the commission of a crime.

DELICT VS. QUASI-DELICT DELICT

DELICT QUASI-DELICT

Wrong committed against the State. Wrong committed against a person.

 ____________________
39 see People of the Philippines Vs. Pedro Abungan, et.al, G.R. No. 136843,
September 28, 2000.
40 Art. 2176, NCC.
41 Black's Law Dictionary, p. 460, Eighth Edition.
42 Black's Law Dictionary, p. 1188, Eighth Edition.

Criminal intent is necessary for the existence of Criminal intent is not necessary.
liability, as a rule.

Applicable only when there is a penal law Actionable in any act or omission wherein fault or
penalizing it. negligence intervenes.

Requires proof beyond reasonable doubt. Requires preponderance of evidence.

Employer's liability is subsidiary. Employer's liability is primary.

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 them; and as to what has not been
foreseen, by the provisions of this Book. (1090)

Problem:
A Corp., B Corp., and C Corp. maintain and operate shopping malls in
various locations in Metro Manila.

A Corp., B Corp., and C Corp. spend for the maintenance and

administration of their respective parking facilities. They provide security
personnel to protect the vehicles parked in their parking facilities and
maintain order within the area. In turn, they collect parking fees from the
persons making use of their parking facilities.

The Philippine Government filed a case against A Corp., B Corp., and

C Corp. praying that an Order be issued declaring that the practice of A
Corp., B Corp., and C Corp. in charging parking fees is violative of the
National Building Code and is therefore invalid.
Are A Corp., B Corp., and C Corp. obliged to provide free parking
spaces to their customers or the public?
Answer:
 The explicit directive of the National Building Code is that A Corp., B
Corp., and C Corp., should provide parking and loading spaces, in
accordance with the minimum ratio of one slot per 100 square meters of
shopping floor area. There is nothing therein pertaining to the collection (or
non-collection) of parking fees by A Corp., B Corp, and C Corp. In fact, the
term "parking fees" cannot even be found at all in the entire National Building
Code.

Since the National Building Code does not mention parking fees, then
simply, said provisions do not regulate the collection of the same.

The RTC and the Court of Appeals correctly applied Article 1158 of the
New Civil Code, which states:

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 them; and as to what
has not been foreseen, by the provisions of this Book.43

Art. 1159. Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith. (1091a)

Contracting parties may freely stipulate their duties and obligations in their
contract which would be binding on them. So that if it's not contrary to law, morals,
good customs, public order, or public policy, the agreement entered into between
said parties must be respected and given the force of law between them.

Problem:
P, the President of X Corp., obtained a P1,000,000 loan from Y, 3 s with a
monthly interest of P40,000 payable for six months, or a total obligation of
P1,240,000 to be paid within 6 months. P signed the promissory note in his
personal capacity, and as duly authorized by the Board of Directors of X
Corp.

Subsequently, P and X Corp. had already paid a total of P1,108,772.

However, Y found that P and X Corp. still had an outstanding balance of
P1,364,151, to which it applied a 4% monthly interest. Thus, Y filed a
complaint for sum of money to enforce the unpaid balance, plus 4% monthly
interest.
 In their Answer, P and X Corp, admitted the loan of P1,240,000, but denied
the stipulation on the 4% monthly interest, arguing that the interest was not
provided in the promissory note.
1. Did the parties agree to the 4% interest on the loan; and
2. Does the 4% interest apply only to the 6-month payment period or until
full payment of the loan?

Answer:
Obligations arising from contracts have the force of law between the
contracting parties and should he complied with in good faith. When the terms of a
contract are clear and leave no doubt as to the intention

____________________
43 see The Office of the Solicitor General vs. Ayala Land Incorporated, et.al, G.R. No. 177056, September 18, 2009.

of the contracting parties, the literal meaning of its stipulations governs. It is only
when the contract is vague and ambiguous that courts are permitted to resort to the
interpretation of its terms to determine the parties' intent.

The Court note that this agreed sum can be computed at 4% interest per
month, but no such rate of interest was stipulated in the promissory note; rather a
fixed sum equivalent to this rate was agreed upon.

The facts show that the parties agreed to the payment of a specific sum of
money of P40,000 per month for six months, not to a 4% rate of interest payable
within a 6-month period.

Therefore, as agreed by the parties, the loan of P1,000,000 shall earn P40,000
per month for a period of six 6 months, for a total principal and interest amount of
P1,240,000. Thereafter, interest at the rate of 12% per annum shall apply. The
amounts already paid by P and X Corp. during the pendency of the suit, amounting
to P1,228,772,
should be deducted from the total amount due.44

Art. 1160. Obligations derived from quasi-contracts shall be subject to the

provisions of Chapter 1, Title XVII, of this Book. (n)

Chapter 1, Title XVII, of the Civil Code explains Quasi-Contracts and its three
kinds namely:
 1. Negotiorum Gestio;
2. Solutio Indebiti; and
3. Other Quasi-Contracts.

The rules on QUASI-CONTRACTS are the following:

1. Certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasi-contract to the end that no one shall be unjustly
enriched or benefited at the expense of another.45

2. The provisions for quasi-contracts in this Chapter do not exclude other

quasi-contracts which may come within the purview of the preceding
article.46

The rules on NEGOTIORUM GESTIO are the following:

____________________
44 see PRISMA Construction & Development Corporation and Rogelio S. Pantaleon vs. Arthur F. Menchavez,
G.R. No. 160545, March 9, 2010.
45 Art. 2142, NCC.
46 Art. 2143, NCC.

1. 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) f in fact the manager has been tacitly authorized by the owner.

In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404 regarding
unauthorized contracts shall govern.

In the second case, the rules on agency in Title X of the Civil Code of the Philippines
shall be applicable.47

2. 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.48

3. 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 the
management was assumed to save the thing or business from imminent danger.49

4. 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 the owner;
(3) If he fails to return the property or business after demand by the owner;
(4) If he assumed the management in bad faith.50

____________________
47 Art. 2144, NCC.
48 Art. 2145, NCC.
49 Art. 2146, NCC.
50 Art. 2147, NCC.

5. Except when the management was assumed to save property business from imminent
danger, the officious manager shall be liable fortuitous events:
(1) lf 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.51

6. 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.52

7. 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, although no benefit may have been
derived.53

8. 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 the preceding 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.54

9. 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.55

____________________
51 Art. 2148, NCC.
52 Art. 2149, NCC.
53 Art. 2150, NCC.
54 Art. 2151, NCC.
55 Art. 2152, NCC.

10. The management is extinguished:

(1) When the owner repudiates it or puts an end thereto;
(2) When the officious manager withdraws from the management, subject to the
provisions of Article 2144 (see Article 2144 of the Clvil Code of the Philippines);
(3) By the death, civil interdiction, insanity or insolvency of the owner or the officious
manager.56

The rules on SOLUTIO INDEBITI are the following:

1. If something is received when there is no right to demand it, and it was o unduly
delivered through mistake, the obligation to return it arises.57

2. Payment by reason of a mistake in the construction or application of a doubtful or

difficult question of law may come within the scope of the preceding article.58

3. If the payer was in doubt whether the debt was due, he may recover if he proves that it
was not due.59
 4. The responsibility of two or more payees, when there has been payment of of what is not
due, is solidary.60

5. When the property delivered or money paid belongs to a third person, the payee shall
comply with the provisions of article 1984 (see Article 1984 of the Civil Code of the Philippines).61

6. Whoever in bad faith accepts an undue payment, shall pay legal interest if a sum of
money is involved, or shall be liable for fruits received or which should have been received if
the thing produces fruits.

He shall, furthermore, be answerable for any loss or impairment of the thing from any
cause, and for damages to the person who delivered the thing, until it is recovered.62

7. He who in good faith accepts an undue payment of a thing certain and determinate
shall only be responsible for the impairment or loss of the

____________________
56 Art. 2153, NCC.
57 Art 2154, NCC.
58 Art. 2155, NCC.
59 Art. 2156, NCC.
60 Art. 2157, NCC.
61 Art. 2158, NCC.
62 Art. 2159, NCC.

same or its accessories and accessions insofar as he has thereby been has alienated it, he
shall return the price or assign the action to collect the sum.63

8. As regards the reimbursement for improvements and expenses incurred by him who
unduly received the thing, the provisions of Title V of Book II of the Civil Code of the
Philippines shall govern.64

9. He shall be exempt from the obligation to restore who, believing in good faith that the
payment was being made of a legitimate and subsisting claim, destroyed the document, or
allowed the action to prescribe, or gave up the pledges, or cancelled the guaranties for his
right He who paid unduly may proceed only against the true debtor or the guarantors with
regard to whom the action is still effective.65

10. It is presumed that there was a mistake in the payment 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.66

The rules on OTHER QUASI-CONTRACTS are the following:

 1. When, without the knowledge of the person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the same from the former, unless it appears that
he gave it out of piety and without intention of being repaid.67

2. When funeral expenses are borne by a third person, without the knowledge of those
relatives who were obliged to give support to the deceased, said relatives shall reimburse the
third person, should the latter claim reimbursement.68

3. When the person obliged to support an orphan, or an insane or other indigent person
unjustly refuses to give support to the latter, any third person may furnish support to the
needy individual, with right of reimbursement from the person obliged to give support. The

____________________
63 Art. 2160, NCC.
64 Art. 2161, NCC.
65 Art. 2162, NCC.
66 Art. 2163, NCC.
67 Art 2164, NCC.
68 Art. 2165, NCC.

provisions of this article apply when the father or mother of a child under eighteen years
of age unjustly refuses to support him.69

4. When through an accident or other cause, a person is injured or becomes seriously ill,
and he is treated or helped while he is not in a condition to give consent to a contract, he shall
be liable to pay for the services of the physician or other person aiding him, unless the service
has been rendered out of pure generosity.70

5. When during a fire, flood, storm, or other calamity, property is saved from
destruction by another person without the knowledge of the owner, the latter is bound to pay
the former just compensation.71

6. When the government, upon the failure of any person to comply with health or safety
regulations concerning property, undertakes to do the necessary work, even over his
objection, he shall be liable to pay the expenses.72

7. When by accident or other fortuitous event, movables separately pertaining to two or

more persons are commingled or confused, the rules on co-ownership shall be applicable.73
 8. The rights and obligations of the finder of lost personal property shall be governed by
Articles 719 and 720 (see Articles 719 and 720 of the Civil Code of the Philippines).74

9. The right of every possessor in good faith to reimbursement for necessary and useful
expenses is governed by Article 546 (see Article 546 of the Civil Code of the Philippines).75

10. When a third person, without the knowledge of the debtor, pays the debt, the rights of
the former are governed by Articles 1236 and 1237 (see Articles 1236 and 1237 of the Civil Code of the
Philippines).76

11. When in a small community, a nationality of the inhabitants of age decide upon a
measure for protection against lawlessness, fire, flood, storm or other calamity,
anyone who objects to the plan and

____________________
69 Art. 2166, NCC.
70 Art. 2167, NCC.
71 Art. 2168, NCC.
72 Art. 2169, NCC.
73 Art. 2170, NCC.
74 Art. 2171, NCC.
75 Art. 2172, NCC.
76 Art. 2173, NCC.

refuses to contribute to the expenses but is benefited by the project as executed shall be liable
to pay his share of said expenses.77

12. Any person who is constrained to pay the taxes of another shall be entitled to
reimbursement from the latter.78

Art. 1161. Civil obligations arising from criminal offenses shall, governed by the
penal laws, subject to the provisions of Article 2175 and of the pertinent
provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title
XVIII of this Book, regulating damages. (1092a)

Pertinent to the above article are the following rules (Articles 104 to 112 of the
Revised Penal Code or Criminal law):

1. Civil liability of a person guilty of felony. - Every person criminally liable for a felony
is also civilly liable.79
 Xxx

2. Subsidiary civil liability of innkeepers, tavernkeepers and proprietors of establishments. -

In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons
or corporations shall be civilly liable for crimes committed in their establishments, in
all cases where a violation of municipal ordinances or some general or special police
regulation shall have been committed by them or their employees.80

Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or
theft within their houses from guests lodging therein, or for the payment of the value thereof,
provided that such guests shall have notified in advance the innkeeper himself, or the person
representing him, of the deposit of such goods within the inn; and shall furthermore have
followed the directions which such innkeeper or his representative may have given them with
respect to the care and vigilance over such goods. No liability shall attach in case of robbery
with violence against or intimidation of persons unless committed by the innkeeper's
employees.

3. Subsidiary civil liability of other persons. The subsidiary liability established in the
next preceding article shall also apply to employers,

____________________
77 Art. 2174, NC.
78 Art. 2175, NCC.
79 Art. 100, Revised Penal Code (RPC).
80 Art. 102 RPC.

teachers, persons, and corporations engaged in any kind of industry for felonies
committed by their servants, pupils, workmen, apprentices, or employees in the discharge of
their duties.81

4. What is included in civil liability?

The civil liability includes:
1. Restitution;
2. Reparation of the damage caused;
3. Indemnification for consequential damages.

5. Restitution; How made - The restitution of the thing itself must be made whenever
possible, with allowance for any deterioration, or diminution of value as determined by the
court.
 The thing itself shall be restored, even though it be found in the possession of a third person
who has acquired it by lawful means, saving to the latter his action against the proper person,
who may be liable to him.

This provision is not applicable in cases in which the thing has been os acquired by the third
person in the manner and under the requirements which, by law, bar an action for its
recovery.83

6. Reparation; How made. – The court shall determine the amount of ed damage, taking
into consideration the price of the thing, whenever possible, and its special sentimental value
to the injured party, and reparation shall be made accordingly.84

7. Indemnification; What is included - Indemnification for consequential damages shall

include not only those caused the injured party, but also those suffered by his family or by a
third person by reason of the crime.85
8. Obligation to make restoration, reparation for damages, or indemnification for
consequential damages and actions to demand the same; Upon whom it devolves. - The
obligation to make restoration or reparation for damages and indemnification for
consequential damages devolves upon the heirs of the person liable.

____________________
81 Art. 103 RPC.
82 Art. 104 RPC.
83 Art. 105 RPC.
84 Art. 106 RPC.
85 Art. 107 RPC.

The action to demand restoration, reparation, and indemnification likewise descends to the
heirs of the person injured.86

9. Share of each person civilly liable. - If there are two or more person civilly liable for a
felony, the courts shall determine the amount for which each must respond.87

10. Several and subsidiary liability of principals, accomplices and accessories of a felony;
Preference in payment. - Notwithstanding the provisions of the next preceding article, the
principals, accomplices, and accessories, each within their respective class, shall be liable
severally (in solidum) among themselves for their quotas, and subsidiaries for those of the
other persons liable.
The subsidiary liability shall be enforced, first against the property of the principals; next,
against that of the accomplices, and, lastly, against that of the accessories.

Whenever the liability in solidum or the subsidiary liability has been enforced, the person by
whom payment has been made shall have a right of action against the others for the
amount of their respective shares.88
11. Obligation to make restitution in certain cases. - Any person who has participated
gratuitously in the proceeds of a felony shall be bound to make restitution in an amount
equivalent to the extent of such participation.89

12. Extinction of civil liability. - Civil liability established in Articles 100, 101, 102, and 103
of this Code shall be extinguished in the same manner as obligations, in accordance with
the provisions of the Civil Law.90,

13. Obligation to satisfy civil liability. - Except in case of extinction of his civil liability as
provided in the next preceding article, the offender shall continue to be obliged to satisfy
the civil liability resulting from the crime committed by him, notwithstanding the fact that
he has served his sentence consisting of deprivation of liberty or other rights, or has not

_____________________
86 Art. 108 RPC.
87 Art. 109 RPC.
88 Art. 110 RPC.
89 Art. 111 RPC.
90 Art. 112 RPC.

been required to serve the same by reason of amnesty, pardon, commutation of sentence or
any other reason.91

Problem:
Y, is the 7-year old son of spouses H and W, who was hit by a van owned by
Z Corp. and driven at that time by their employee, X. Y to ad died as a result of the
accident.

A criminal case of Reckless Imprudence Resulting to Homicide was filed

against X. Unfortunately, before the trial could be concluded, X committed suicide.
On account thereof, the court dismissed the criminal case.
 Thereafter, H and W filed a complaint for damages against Z Corp. and V, its
Vice-President, as employers of the deceased driver, basically alleging that as such
employers, they failed to exercise due diligence in the selection and supervision of
their employees.

V and Z Corp. filed a Motion to Dismiss, principally arguing that the

complaint is basically a "claim for subsidiary liability against an employer" under the
provision of Article 103 of the Revised Penal Code. They contend that there must
first be a judgment of conviction against their driver as a condition sine qua non to
hold them liable. Ergo, since the driver died during the pendency of the criminal
action, the sine qua non condition for their subsidiary liability was not fulfilled.

Is the complaint for damages against V and Z Corp. founded on criminal law
or derived from quasi-delict?
Answer:
The complaint did not explicitly state that spouses were suing V and Z Corp.
for damages based on quasi-delict. Clear it is, however, from the allegations of the
complaint that quasi-delict was their choice of remedy.

Corollarily, an act or omission causing damage to another may give rise to

two separate civil liabilities on the part of the offender, i.e., 1) civil liability ex delicto;
and 2) independent civil liabilities, such as those (a) not arising from an act or
omission complained of as felony a (e.g., culpa contractual or obligations arising from
law; the intentional torts; and culpa aquiliana); or (b) where the injured party is
granted a right to file an action independent and distinct from the criminal action.
Either of these two possible liabilities may be enforced against the offender.

____________________
91 Art. 113 RPC.

Stated otherwise, victims of negligence or their heirs have a choice between

an action to enforce the civil liability arising from culpa criminal under Article 100
of the Revised Penal Code, and an action for quasi-delict (culpa aquiliana) under
Articles 2176 to 2194 of the Civil Code. If, as here, the action chosen is for quasi-
delict, the plaintiff may hold the employer liable for the negligent act of its
employee, subject to the employer's defense of exercise of the diligence of a good
father of the family. On the other hand, if the action chosen is for culpa criminal, the
plaintiff can hold the employer subsidiarily liable only upon proof of prior
conviction of its employee.

Article 1161 of the Civil Code provides that civil obligation arising from criminal
offenses shall be governed by penal laws subject to the provision of Article 2177 and of the
pertinent provision of Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of
this Book, regulating damages. Plainly, Article 2177 provides for the alternative
remedies the plaintiff may choose from, in case the obligation has the possibility of
arising indirectly from the delict/crime or directly from quasi-delict/tort.92

Problem:
X, then 17 years old and a student, died due to a gunshot wound in the head
which he sustained while he was at the Firearms and Ammunitions Store owned
and operated by Z.

The bullet which killed X was fired from a gun brought in by a customer of
the gun store for repair.

It appears that B and C, sales agent of Z, later brought out the gun from the
drawer and placed it on top of the table. Attracted by the sight of the gun, X got hold
of the same. B asked X to return the gun. The latter followed and handed the gun to
B. It went off, the bullet hitting X in the head.

A criminal case for homicide was filed against B. B, however, was acquitted of
the charge against him. Subsequently, X's parents, H and W filed a civil case for
damages against Z.
Is Z liable for damages despite the acquittal of his sales agent in b the criminal
case?

____________________
92 see L.G. Foods Corporation and Victorino Gabor vs. Hon. Philadelfa B. Pagapong-Agraviador and Sps.
Florentino and Theresa Vallejera, G.R. No. 158995, September 26, 2006.

Answer:
This case for damages arose out of the accidental shooting of H and W's son.
Under Article 1161 of the Civil Code, petitioners may enforce their claim for damages based
on the civil liability arising from the crime under Article 100 of the Revised Penal Code or
they may opt to file an independent civil action for damages under the Civil Code. In this
case, instead of enforcing their claim for damages in the homicide case filed against
B, H and W opted to file an independent civil action for damages against Z whom
they alleged was B's employer.

As a gun store owner, Z is presumed to be knowledgeable about firearms

safety and should have known never to keep a loaded weapon in his store to avoid
unreasonable risk of harm or injury to others. Z has the duty to ensure that all the
guns in his store are not loaded. Firearms should be stored unloaded and separate
from ammunition when the firearms are not needed for ready-access defensive use.
With more reason, guns accepted by the store for repair should not be loaded
precisely because they are defective and may cause an accidental discharge such as
what happened in this case. Z was clearly negligent when he accepted the gun for
repair and placed it inside the drawer without ensuring first that it was not loaded.
In the first place, the defective gun should have been stored in a vault. Before
accepting the defective gun for repair, Z should have made sure that it was not
loaded to prevent any untoward accident. Indeed, Z should never accept a firearm
from another person, until the cylinder or action is open and he has personally
checked that the weapon is completely unloaded. For failing to insure that the gun
was not loaded, Z himself was negligent.93

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)

The rules on QUASI-DELICTS are the following:

1. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict.94

2. Responsibility for fault or negligence under the preceding article is entirely separate and
distinct from the civil liability arising from

____________________
93 see Alfredo P. Pacis and Cleopatra D. Pacis vs. Jerome Jovanne Morales, G.R. No. 169467, February 25, 2010.
94 Art. 2176, NCC.

negligence under the Penal Code. But the plaintiff cannot reco damages twice for the same act
or omission of the defendant.95
 3. The provisions of Articles 1172 to 1174 are also applicable to a quasi-delict (see Articles 1172 to
1174 of the Civil Code of the Philippines).96

4. When the plaintiff's own negligence was the immediate and proximate cause of his
injury, he cannot recover damages. But if his negligence was only contributory, the
immediate and proximate cause of the injury being the defendant's lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.97

5. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.

The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are
under their authority and live in their company.

The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions.

Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry. The State is responsible in like manner when it acts through a special
agent; but not when the damage has been caused by the official whom the task done properly
pertains, in which case what is provided in Article 2176 shall be applicable.

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils and students or apprentices, so long as they remain in their custody.

____________________
95 Art. 2177, NCC.
96 Art. 2178, NCC.
97 Art. 2179, NCC.

The responsibility treated of in this article shall cease when the persons herein mentioned
prove that they observed all the diligence of a good father of a family to prevent
damage.98
 6. Whoever pays for the damage caused by his dependents or employees may recover from
the latter what he has paid or delivered in satisfaction of the claim.99
7. If the minor or insane person causing damage has no parents or guardian, the minor or
insane person shall be answerable with his own property in an action against him where a
guardian ad litem shall be appointed.100

8. The possessor of an animal or whoever may make use of the same is responsible for the
damage which it may cause, although it may escape or be lost. This responsibility shall cease
only in case the damage should come from force majeure or from the fault of the person who
has suffered damage.101

9. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the
former, who was in the vehicle, could have, by the use of due diligence, prevented the
misfortune. It is disputably presumed that a driver was negligent, if he had been found guilty
of reckless driving or violating traffic regulations at least twice within the next preceding two
months.

If the owner was not in the motor vehicle, the provisions of Article 2180 are applicable.102

10. Unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic
regulation.103

11. Every owner of a motor vehicle shall file with the proper government office a bond
executed by a government-controlled corporation or office, to answer for damages to third
persons. The amount of the bond and other terms shall be fixed by the competent public
official.104

____________________
98 Art, 2180, NCC.
99 Art. 2181, NCC.
100 Art. 2182, NCC.
101 Art. 2183, NCC.
102 Art. 2184, NCC.
103 Art. 2185, NCC.
104 Art. 2186, NCC.
 12. Manufacturers and processors of foodstuffs, drinks, toilet articles and similar
goods shall be liable for death or injuries caused by any noxious or harmful substances used,
although no contractual relation exists between them and the consumers.105

13. There is prima facie presumption of negligence on the part of the defendant if the death
or injury results from his possession of dangerous weapons or substances, such as firearms
and poison, except when the possession or use thereof is indispensable in his occupation or
business.106

14. Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by, any person by reason of the defective condition of roads, streets, bridges,
public buildings, and other public works under their control or supervision.107

15. The proprietor of a building or structure is responsible for the damages resulting
from its total or partial collapse, if it should be due to the lack of necessary repairs.108

16. Proprietors shall also be responsible for damages caused:

(1) By the explosion of machinery which has not been taken care of with due diligence,
and the inflammation of explosive substances which have not been kept in a safe and adequate
place;
(2) By excessive smoke, which may be harmful to persons or property;
(3) By the falling of trees situated at or near highways or lanes, not caused by force
majeure;
(4) By emanations from tubes, canals, sewers or deposits infectious matter,
constructed without precautions suitable to the place.109

17. If damage referred to in the two preceding articles should be the result of any defect in
the construction mentioned in Article 1723, the third person suffering damages may proceed
only against the engineer or architect or contractor in accordance with said article, within the
period therein fixed (see Article 1723 of the Civil Code of the Philippines).110

____________________
105 Art. 2187, NCC.
106 Art. 2188, NCC.
107 Art. 2189, NCC.
108 Art. 2190, NCC.
109 Art. 2191, NCC.
110 Art. 2192, NCC.
 18. The head of a family that lives in a building or a part thereof, is responsible for
damages caused by things thrown or falling from the same.111

19. The responsibility of two or more persons who are liable for quasi-delict is solidary.112

REQUISITES OF QUASI-DELICT
1. Damage suffered by plaintiff;
2. Fault or negligence of defendant; and
3. Connection of cause and effect between the fault or negligence of defendant and
the damage incurred by plaintiff.

Negligence
It is the failure to observe for the protection of the interests of another person
that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury.
Negligence, as it is commonly understood, is conduct that creates an undue
risk of harm to others. It is the failure to observe that degree of care, precaution and
vigilance that the circumstances justly demand. It is the omission to do something
which reasonable man, guided by considerations that ordinarily regulate the
conduct of human affairs, would do, or doing something that a prudent and
reasonable man would not do.

What is the test of negligence?

Did the defendant in doing the alleged negligent act use that reasonable care and
caution which an ordinary person would have used in the same situation? If not, then he is
guilty of negligence.

The test of negligence is objective. We measure the act or omission of the

tortfeasor with that of an ordinary reasonable person in the same situation.

PROXIMATE CAUSE
It is that cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result would
not have occurred.

More comprehensively, proximate cause is that cause acting first and

producing the injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each
____________________
111 Art. 2193, NCC.
112 Art. 2194, NCC.

having a close causal connection with its immediate predecessor, the final event in
the chain immediately effecting the injury as natural and probable result of the cause
which first acted, under such circumstances that the person responsible for the first
event should, as an ordinarily prudent and intelligent person, have reasonable
ground to expect at the moment of his act or default that an injury to some person
might probably result therefrom.

There is no exact mathematical formula to determine proximate cause. It is

based upon mixed considerations of logic, common sense, policy and precedent.

Problem:
O, was driving a van owned by P, Inc. along the National Highway. A bus
was cruising on the opposite lane towards the van. In between the two vehicles was
a parked truck with a trailer, owned by L, Inc.

The night before, the truck with trailer suffered a tire blowout. The driver, K,
parked the truck askew occupying a substantial portion of the national highway, on
the lane of the bus. He parked the truck with trailer at the shoulder of the road with
the left wheels still on the cemented highway and the right wheels on the sand and
gravel shoulder of the highway. The truck was not equipped with triangular,
collapsible reflectorized plates, the early warning device. As substitute, K placed a
banana trunk with leaves on the front and the rear portion or the truck to warn
incoming motorists.

To avoid hitting the parked truck occupying its lane, the incoming bus
swerved to the right, onto the lane of the approaching van. O saw two bright and
glaring headlights and the approaching bus. He pumped his break slowly, swerved
to the left to avoid the approaching bus but the van hit the front of the stationary
truck with a trailer. The bus hit the rear of the truck with a trailer.

O only suffered minor injuries. The van, however, became inoperable as a

result of the incident. P, Inc. filed a complaint for damages against L, Inc, and K, the
driver.
1. Was K negligent in parking the vehicle? And
2. Was K's negligence the proximate cause of the damage to the van?

Answer:
Article 2176 of the Civil Code provides that whoever by act or omission causes
damage to another, there being fault or negligence is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi- delict. To sustain a claim based on quasi-delict, the following requisites
must concur: (a) damage suffered by plaintiff; (b) fault or negligence of defendant;
and (c) connection of cause and effect between the fault or negligence of defendant
and the damage incurred by plaintiff.

Negligence is defined as the failure to observe for the protection of the interests
of another person that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury. The
Supreme Court stated the test of negligence in the landmark case Picart v. Smith as
follows:

The test by which to determine the existence of negligence in a particular case

may be stated as follows: Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinary person would have used in the same
situation? If not, then he is guilty of negligence. The law here in effect adopts the
standard supposed to be supplied by the imaginary conduct of the discreet
paterfamilias of the Roman law. The existence of negligence in a given case is not
determined by reference to the personal judgment of the actor in the situation before
him. The law considers what would be reckless, blameworthy, or negligent in the
man of ordinary intelligence and prudence and determines liability by that.

The test of negligence is objective. We measure the act or omission of the

tortfeasor with that of an ordinary reasonable person in the same situation.

We find that K was utterly negligent in parking the truck askew on the right
side of the national highway. It is common sense that the skewed parking of the
truck on the national road posed a serious risk to oncoming motorists.

K also admitted that it was his first time to drive the truck with trailer loaded
with a D-8 caterpillar bulldozer. We find that L, Inc. was utterly negligent in
allowing a novice driver, like K, to operate a vehicle, such as a truck loaded with a
bulldozer, which required highly specialized driving skills. L, Inc. clearly failed to
properly supervise K in driving the truck.
 Proximate cause is defined as that cause, which, in natural and continuous
sequence, unbroken by any efficient intervening cause, produces the injury, and
without which the result would not have occurred. More comprehensively,
proximate cause is that cause acting first and producing the injury, either
immediately or by setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the injury as natural
and probable result of the cause which first acted, under such circumstances that the
person responsible for the first event should, as an ordinarily prudent and intelligent
person, have reasonable ground expect at the moment of his act or default that an
injury to some person might probably result therefrom.

There is no exact mathematical formula to determine proximate cause. It is

based upon mixed considerations of logic, common sense, policy and precedent.

L, Inc. and K are liable for all damages that resulted from the skewed parking
of the truck. The skewed parking is the proximate cause of the damage to the van.113

Prescription of the action ex quasi delicto not a bar to an action ex delicto

If at the time of the filing of the complaint for damages, the cause of action ex
quasi delicto had already prescribed, the aggrieved party can still pursue the
remaining avenue opened for them by their reservation, i.e., the surviving cause of
action ex delicto. This is so because the prescription of the action ex quasi delicto does
not operate as a bar to an action to enforce the civil liability arising from crime
especially as the latter action had been expressly reserved.

The Supreme Court held that the dismissal of the action based on culpa
aquiliana is not a bar to the enforcement of the subsidiary liability of the employer.
Once there is a conviction for a felony, final in character, the employer becomes
subsidiarily liable if the commission of the crime was in the discharge of the duties
of the employees. This is so because Article 103 of the Revised Penal Code operates
with controlling force to obviate the possibility of the aggrieved party being
deprived of indemnity even after the rendition of a final judgment convicting the
employee.114

____________________
113 see Dy Teban Trading, Inc. vs. Jose Ching and/or Liberty Forest, Inc. and Cresilito M. Limbaga, G.R. No.
161603, February 4, 2008
114 Sps. Antonio C. Santos, et.al. vs. Hon. Normandie B. Pizardo, G.R. No. 151452, July 29, 2005

True or False
1. A civil action is one by which a party sues another for the enforcement or
protection of a right, or the prevention or redress of a wrong.
2. There is negotiorum gestio when the property or business is not neglected or
abandoned.
3. An obligation "to give" is a prestation which consists in the delivery of a movable
or an immovable thing.
4. There is negotiorum gestio when the manager has been tacitly authorized by the
owner.
5. An obligation "to do" includes all kinds of work or service.
6. For every right enjoyed by any person, there is a corresponding obligation on the
part of another person to respect such right.
7. Diligence is the failure to observe that degree of care, precaution and vigilance
that the circumstances justly demand.
8. A right is a power, privilege, or immunity guaranteed under a constitution,
statute or decisional law, or recognized as a result of long usage, constitutive of a
legally enforceable claim of one person against the other.
9. Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
10. A defendant is the party who brings a civil suit in a court of law. He is the
person who files the complaint in court.

Multiple Choice Questions

1. It is a rule of conduct, just, obligatory, promulgated by legitimate authority, and
of common observance and benefit.
a. Law c. Contract
b. Obligation d. Memorandum of
Agreement

2. I. Obligation to do is also known as negative personal obligation.

II. Obligation not to do is otherwise known as positive personal obligation.
a. Only I is true c. Both are true
b. Only II is true d. Both are false

3. The following are the essential elements of an obligation, except:

a. Debtor с. Presentation
b. Creditor d. Juridical tie
 4. The following are the sources of an obligation, except:
a. Contract c. Prestation
b. Law d. Quasi-delict

5. It is a meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service.
a. Quasi-Contract c. Law
b. Contract d. Quasi-delict

6. Certain lawful, voluntary and unilateral acts to the end that no one shall be
unjustly enriched or benefited at the expense of another.
a. Contract с. Law
b. Quasi-contract d. Quasi-delict

7. 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 incidents, or to require the person
concerned to substitute him, if the owner is in a position to do so.
a. Quasi-contract с. Negotiorum gestio
b. Quasi-delict d. Solutio indebiti

8. 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.
a. Quasi-contract c. Negotiorum gestio
b. Quasi-delict d. Solutio indebiti

9. Whoever by act or omission causes damage to another, there being fault or

negligence, is obliged to pay for the damage done. There is no pre- existing
contractual relation between the parties.
a. Quasi-delict c. Negotiorum gestio
b. Quasi-contract d. Solutio indebiti

10. X by mistake delivered to A and B a sum of money which should been

delivered to C and D. X is now demanding the return of the same from A and B. The
liability of the latter for the sum of money to which they are not entitled shall be:
a. A and B shall be liable jointly.
b. A and B shall be liable solidarily.
c. X has no right to recover as he was negligent in the delivery of the money.
d. They are not liable for having received the money in good faith.
 11. The following are requisites of quasi-delict, except:
a. Damages suffered by plaintiff.
b. Damage suffered by plaintiff.
c. Fault or negligence of defendant.
d. Connection of cause and effect between the fault or negligence of defendant
and the damage incurred by plaintiff.

12. X migrated in the U.S.A. leaving no one to manage his properties. A and B
equally took charge of the management thereof. However, due to the negligence of
A, the properties of X were damaged. The liability therefore to X for damages shall
be:
a. Only A shall be liable
b. Both shall be solidarily liable
c. Both shall be jointly liable
d. They are not liable as they are presumed to be in good faith

13. A system of norms or rules of a character general and common which regulate
the relations of persons, individual or collective, and which protects the person in his
personality as well as his interests both moral and patrimonial.
a. Business law с. Criminal law
b. Civil law d. Taxation law

14. It is a juridical necessity to give, to do or not to do.

a. Law c. Contract
b. Obligation d. Memorandum of
Agreement

15. On January 1, 2018, Y, Inc., and X Corp., entered into an AGREEMENT by

virtue of which the former obligated itself to render medical services to the
employees of the latter to take effect on January 1, 2018 up to December 31, 2018, and
that either party who desires to terminate the contract may serve the other party a
written notice at least 30 days in advance.
On December 16, 2018, Y, Inc., wrote X Corp., to inform that it was assuming
from their silence that the Agreement was renewed from January 1, 2019 to
December 31, 2019. In their reply-letter, dated December 23, 2018, X Corp., notified
Y, Inc., of the termination of the contract upon its expiration on December 31, 2018.
But such reply-letter was received by Y, Inc. only on January 9, 2019. Y, Inc. filed a
complaint stating that X Corp.'s termination of the Agreement did not conform to
their agreement. Is the Agreement renewed for another term?
 a. Yes, because unilateral termination of a contract is violative of the principle of
relativity of contracts.
b. No, because the written notice was dated December 23, 2018 which is earlier
than the expiration of contract.
c. No, because renewal of contract must not be based on assumption. It must be
based on obligatory force of contracts and compliance in good faith.
d. Yes, because the written notice of termination was not served within 30 days in
advance.

16. Which of the following is not considered as quasi-contract?

a. Solutio indebiti
b. Reimbursement due the person who saved the property during fire or
storm without the knowledge of the owner
c. When the third person without the knowledge of the debtor, pays the debt
d. Negotiorum gestio

17. It is a claim or title to an interest in anything whatsoever that is enforceable by

law.
a. Receivable c. Right
b. Obligation d. Property

18. It is a juridical relation whereby a person may demand from another the
observance of a determinative conduct, and in case of breach, may demand
satisfaction from the assets of the latter.
a. Right c. Contract
b. Action d. Obligation

19. It is one by which a party sues another for the enforcement or protection of a
right, or the prevention or redress of a wrong.
a. Civil action c. Administrative
action
b. Special Proceeding d. Criminal action

20. It is the act or omission by which a party violates a right of another.

a. Reason of action c. Cause of action
b. Motive of action d. Source of action

21. The three essential elements of a cause of action are the following, except:
a. The obligation of the defendant.
b. The legal right of the plaintiff.
 c. The act or omission of the defendant in violation of said legal right.
d. The act or omission of the plaintiff in violation of said legal right.

22. Obligation of the debtor to deliver a thing, movable or immovable, to the

creditor.
a. Obligation to give c. Obligation to do
b. Obligation not to give d. Obligation not to do

23. When a thing is particularly designated or physically segregated from all others
of the same class.
a. Specific thing с. Indeterminate thing
b. Generic thing d. All of the above

24. Where X voluntarily takes charge of the neglected business of Y without the
latter's authority where reimbursement must be made for necessary and useful
expenses, there is a:
a. Quasi Delict c. Negotiorum Gestio
b. Quasi Contract d. Solution indebiti

25. When a thing is designated merely by its class or genus without any particular
designation or physical segregation from all others of the same class.
a. Specific thing c. Indeterminate thing
b. Determinate thing d. All of the above