50 OBLIGATIONS

& CONTRACTS Arts.

1163-1164

require a of diligence higher than that of the good father

degree of
a family, such as extraordinary care and even for liability by reason
of fortuitous event, The latter situation is explicitly authori

by Article 1174 of the Civil Code which says that the parties ma
declare in their agreement a person shall still be liable for
that
fortuitous event. This principle will be discussed extensively i
subsequent sections of this Book.

[21.2] Duty to Deliver Fruits

[a.] When Creditor Acquires Rights Over Fruits

In determinate obligations, is the debtor bound to
deliver the
fruits of the determinate thing due?
The answer is in the affirmative
if the creditor
already acquired a right over the fruits.
necessary to determine the exact time Hence, it is
when a creditor acquires a
right over the fruits of the
determinate thing due. This
problem is governed by Article particular
1164 of the Civil Code.
It is clear from
a right over the fruits of the 1164 that the creditor shall acquire
Article

time the obligation to deliverdeterminate thing due only from the

said thing arises.
time? When is the But when is such
obligation to deliver the
deemed to have arisen? determinate thing due
This period varies
of the obligation. depending on the source
In obligations
arising from law,
quasi-delicts and quasi-contracts,
the specifie
them determine thedelicts, provisions applicable to
time when the
obligations arising from obligation to deliver
arises. In
to deliver contracts, on the other hand,
generally arises upon the obligation
at such time, "the theperfection of the
parties are contract because
what has been bound not only to the
expressly stipulated fulfillment of
which, according but also to all
to their the
usage and law." nature, may be consequences
in keeping with
In a contract of good faith,
that "all the sale, for
fruits shall example, thelaw
pertain provides
the contract
wasperfected."19eTheto the vendee from the day on which
is when the only possible
obligation to exception to this rule
condition, in which deliver has been
case, the subjected to a
until after suspensive
the condition is obligation does not come into
fulfilled. Butif
subjected merely to a the obligation existence
another date for suspensive term or has been
delivery has period, such as
to deliver been when
immediately arises uponstipulated upon, the obligation
the perfection
of the
contract
197 Art. 1315,
NCC.
198Art. 1537,par.2,NCC.
Arts. I163-1164 Title L.
49
OBLIGATIONS
Chapter 2
NATURE AND EFFECT OF
OBLIGATIONS
aired of a reasonably prudent person im As Buch, to
determine
diligence which must be ordinarily
required of the debtor in
determinate obligation, we use as basis the abstract
average
atandard corresponding to a normal orderly person.

Ordinarily, the bonus pater familiasruleapplies in

determining
.he diligence required of the debtor in fulflling
his obligation to
veserve the determinate thing due. However, this rule does not
anply when the law or the stipulation of the parties requires another
standard of care. An example of a situation where the law requires
another standard of care in the preservation of the determinate
thing due is when the debtor is already guilty of delay or if he has
nromised to deliver the same thing to two or more persons who do
not have the same interest. In such a situation, the observance ofthe
proper diligence of a good father of a family is no longer suffcient
because the debtor shall already be responsible for fortuitous event
until he has effected the delivery. Thisrule is embodied in the last

paragraph of Article 1165 of the Civil Code which states that "f
the obligor delays, or has promised to deliver the same thing to
two or more persons who do not have the same interest, he shall be
responsible for any fortitous event until he has effected the delivery."

Going now to the agreement or stipulation of the parties

requiring another standard of care, it may be asked: Can the
parties validly agree on a standard of care lower than that of the
good father of a family? Following the rule that the agreement of
the parties is the law between them,"" it appears that the parties
than that of the
can validly agree even on a standard of care lower
bonus pater familias, i.e., an agreement providing only for slight
care. However, the parties may not validly
agree to make the debtor
arising from
absolutely exempt from any liability even from those
the freedom to contract
his own negligence. In the latter situation,
the freedom to
bows down to public policy. While the parties have
the same
enter into any kind of stipulation, it is necessary that
order, or
must not be contrary to law, morals, good customs, public
contrary to
public policy.19% As such, the agreement is void for being
for the parties to
public policy. On the other hand, it shall be lawful

v. Chemical Bulk Carriers, Incorporated, G.R. No. 193577,Sept.

1SPrancisco
7, 2011.
Code of the Philippines, 1991 Ed., 125.
1Id.,citing IV Tolentino, Civil

185Art. 1159,NCC.
198Art. 1306,NCC.
48 OBLIGATIONS & CONTRACTS Arts.
1163-1164

2) The obligation to deliver the fruits, if the

creditor is
already entitled to them;!" and
3) The obligationto deliver the accessions and accessoriee

(21.1] Duty to Preserve Specific Thing Due

The only way by which the debtor may be able to comply wisl.
his determinate obligation is by delivering the exact
thing whiek
1s due. There is no other way. Thus, Article 1244 of the Civil Cod
provides that "he
debtor of a thing cannot compel the creditor to
receive a different one, although the latter may be of the same value
as, or more valuable than that which is due." To ensure therefore
the efficacy and performance of an
obligation to deliver a specificor
determinate thing, it is but logical to require the
debtor to preserve
the thing to be delivered while the same
is still in his possession.
otherwise, such kind of obligation would be
this into consideration, our Civil
illusory, Taking 2
Code provides for this accessory
obligation in Article 1163.

While Article 1163 does not say

explicitly thatthe obligation to
preserve applies only to an obligation to give a
determinate thing, it
isquite obvious that such accessory
obligation finds no application to
an obligation to give an indeterminate
thing. In a genericobligation,
the debtor may comply with his
obligationby delivering any member
of the genus so much so
that even if he has in his
possession things
belonging to the said genus, he is not
required to deliver any of
those. He may, if he chooses, deliver any
other member of the genus
not found in his possession by
procuring the same.

[a.]
Degree of Diligence Required
As a rule, the debtor in a determinate obligation is
bound to
observe the "proper diligence of a good
father ofa family"in taking
care of thething tobe delivered. This is the
bonus pater familias rule
in the Roman law, which is the most
common standard of conduct.
But what is exactly meant by the phrase "good
father of a family"?
When the law requires the observance of the "proper
diligence of a
good father of a family," the law is simply referring to
the diligence

190Art. 1164,NCC.
191Art. 1166,NCC.
192g Manresa, 35-36.
Arts. 1163-1164 Title I. -OBLIGATIONS 47
Chapter 2
NATURE AND EFFECT OF OBLIGATIONS
$19. Specific and Generic Obligations

Areal obligation, on the other hand, may either be specific (or

determinate)orgeneric (orindeterminate), depending on the nature
of thing to be delivered. If the obligation to give consists in the

delivery ofa specificor determinate thing. the obligation is classified

as a specifc or determinate obligation. But if the obligation consists
merely in that of delivering any member of the genus or class, the
same is classified as a generic or indeterminate obligation.

A thing is considered determinate or specific when it is

particularly designated or physically segregated from all others of

the same class.s A thing is indeterminate or generic, on the other
hand, when only the genus or class has been determined, without
the same being designated and distinguished from all others of the
same class. For example, if the debtor has fivecars but he committed
to deliver one of them, specifying the engine and plate numbers,
the thing becomes determinate or specific. However, if he commits
to deliver only a car, the thing to be delivered is indeterminate or
generic. But if the debtor commits to deliver one of his five cars, in
which case the selection is limited to the cars owned by the debtor
and he cannot deliver any other car not owned by him, the obligation
becomes a limited generic obligation.n

20. Positiveand Negative Personal Obligations

A personal obligation may either be positive or negative. An
obligation "todo" is apositive personal obligation,while an obligation
"notto do" is a negative personal obligation.

$21. Accessory Obligations in Determinate (Specific) Obligations

The debtor always has

three accessory obligations in
determinate obligations. Of course, the principal obligation of the
debtor is to deliver the specific thing due. But in addition to such
even
principal obligation, he acquires three additional obligations,
if he and the creditor did not expressly provide for them. These
accessory obligations are the following:

1) The obligation to preserve the thing to be delivered;89

87Art. 1460,par. 1, NCC.

1Bgee IV Tolentino, Ciuil Code of the Philippines, 1991 Ed., 91.
189Art. 1163, NCC.
 Arts.
& CONTRACTS 1163-1164
OBLIGATIONS

OBLIGATIONS
AND PERSONAL
CHAPTER 4: REAL
(KINDS OF OBLIGATIONS)

Chapter 2
OF OBLIGATIONS
NATURE AND EFFECT
to give something is also
Art. 1163. Every person obliged
diligence of a good father
obliged to take care of it with the proper
of the parties requires
of a family, unless the law or the stipulation
another standard of care. (1094a)

creditor has a right to the fruits

The of the thino
Art. 1164.
from the time the obligation to deliver it arises. However, he shall
acquire no real right over it until the same has been delivered to
him. (1095)

$18. Real and Personal Obligations

From the point of view of its object or prestation, obligations

are classified into real and personal. The obligation is a real one if
it consists in giving: it is personal, if it consists in either doing or
not doing. As explained in supra §2.2, in obligations
to give (orreal
obligations), compliance with the obligation is intimately connected
with the thing to be delivered. In obligations to do or not to do
(or personal obligations), on the other hand, compliance with the
obligation is incumbent upon the person obliged.

An obligation "to give" involves the delivery of a movable or

an immovable thing in order to create a real right, or for
the use
of the recipient, or for its simple
possession, or in order to return
it to its owner, s An obligation
"to do" includes all kinds of work or
service;1s while an obligation "not to do"
consists in abstaining from
such acts 18S Note that the obligation to pay
a sum in money, such as
the obligation to pay rentals, falls within the 186
prestation to give.

L83Philippine NationalConstruction Corp. v. CA, G.R. No.

116896,May 5, 1997,
272 SCRA 183,191,citing IV Tolentino, Civil Code of
the Philippines, 1991 Ed., 57.

1851V Tolentino, Civil Code of the Philippines, 1991 Ed., 57.

186philippine NationalConstruction Corp. v. CA,supra.
 Title I. OBLIGATIONS 45

-
Chapter1
GENERAL PROVISIONS
when the heir voluntarily pays the debt of the decedent exceeding
the value of the property which he received from the estate of the
deceased, either by will or by law of intestacy, the payment is valid
and cannot be rescinded by the payor,ia

[17.4] Payment ofLegacy In Void Will

A will is void and shall be disallowed if the formalities required

by law have not been complied In such a situation, the estate

with.
of the deceased shall not be distributed pursuant to the testator's
will,but pursuant to the provisions of law (referred to as legal or
intestate succession). However, if one of the legal or intestate heirs,

after the settlement of the debts of the deceased, pays a legacy

in compliance with a clause in the defective will, the payment is
effective and irrevocable, This isanother case of natural obligation.

[17.5] Payment of Interest Which Is Not Due

See the discussion in supra $16.4 of this Book.

[17.6] Articles 1426 and 1427, Inoperative

Articles 1426 and 1427 of the Civil Code read, as follows:

Art. 1426. When a minor between eighteen and twenty.

one years of age who has entered into a contract without the
consent of the parent or guardian, after the annulment of the
contract voluntarily returns the whole thing or price received,
notwithstanding the fact the he has not been benefited thereby,
there is no right to demandthe thing orprice thus returned.

Art. 1427. When a minor between eighteen and twenty-one

years of age,who has entered into a contract withoutthe consent
of the parent or guardian, voluntarily pays of money or a sum
delivers a fungible thing in fulfllment of the obligation, there
shall be no right to recover the same from the obligee who has
spentor consumed it in good faith.

Note that the foregoing provisions have been rendered inope

rative by Republic Act No. 6809,reducing the age of majority to 18

years.As such, there is no more minor between the ages of 18 and

21 under existing laws.

180Art. 1429,NCC.
I81Art. 839(1), NCC.
182 Art.1430,NCC.
44 OBLIGATIONS & CONTRACTS

becomes a natural obligation.

prescription (or bar by statute
" This explains the factthat
of limitations) is a
extin.
ground
for the
dismissal of an
action under the Rules of Court.m However.
,ifthe
obligor voluntarily performs the contract, he cannot
anymore reco
what he has delivered or the value of the service he has rendered t
When a third person pays a debt which had already prescribe3
he cannot demand reimbursement from the debtor if the paymer
was made without the knowledge or against the will of the
latter I
The law says that in cases of payment by a third person
without the
knowledge or against the will of the debtor, the
third party pavor
can recover only insofar as the payment has been beneficial to the
debtor.!s Since the debt can no longer be
enforced upon the debtor.
such payment is not considered beneficial to
the latter; hence, the
third party payor may not demand
reimbursement. But if the debtor
later voluntarily reimburses the
third person, he cannot
what he has paid.im This is another recover
instance of a natural obligation.

[17.2] When Action to Enforce Obligation Has Failed

When the action to enforce a civil obligation
plain that the civil obligation has failed, it is
ceases for another action to
same obligation is already barred by the enforce the
principle of res judicata.
However, if the defendant voluntarily
the action for its enforcement has performs the obligation after
failed, he cannot demand the
return of what he has delivered or
the payment of the value of the
servicehe has rendered. This is
another case of natural obligation.

[17.3] When Payment of Deceased's Debt Exceeds

Inheritance

With respectto monetary debts left by the

decedent, the rule is
that the heir shall be liable
thereto only up tothe extentof the
value
of the property he received from the
decedent. The obligation to
pay the debt up to the value of the inherited
property is a civil
one, while the obligation to pay the excess is
only natural. Hence,

72Art.1424,NCC.
173See Sec. 1(), Rule 16, 1997 Revised
Rules of Civil Procedure.
7“Art.1424, NCC.
i75Art. 1425, NCC.
17°Art. 1236,par. 2, NCC.
177Id.

178Art. 1428,NCC.
179Art. 1311,par. 1, NCC.
 Title I.
OBLIGATIONS
Chapter I
GENERAL PROVISONS
is already
indebiti discussed in supra $9 of this Book. It applies
eases of payment by reasOn of
mistake. Thus, if the payment of
is by reason of mistake, it
interest will be a
i case of solutio indebiti
andthe creditor incurs the obligation to return what has been unduly
to him.In order the payment
for
delivered the interest to be a case
of

of natural obligation, is essential that such payment must not

of
be by reason
mistake. Ergo,the term
"voluntarily fulfiliment" in
heticle 1423 of the Civil Code requires that the
performance of the
obligation must not only be spontaneous but must also be free from
pror or mistake. In other words, it is necessary thatthe
debtor must
have full knowledge that he cannot be compelled to pay
and yet he
chooses to do so.
The mistake, however, must be one of fact and not of law. For
example, by reason of confusion as to the exact date of maturity
of the debt, the debtor pays after the debt had already prescribed.
This is a clear case of mistake of fact where the principle of solutio
indebiti may be invoked. On the other hand, if the debtor's argument

js that he is not aware that the prescriptive period of an action

based on a written contract is ten years, solutio indebiti may not be

invoked because this is a mistake of law. In the first situation, the
payment of the debt after it had prescribed is not a case of voluntary
fulfllment of a natural obligation because the principle of solutio
indebiti applies. In the latter case, on the other hand, the principle
of solutio indebiti is inapplicable. As such, the payment
of the debt

which already prescribed can be said to be voluntary and the creditor

is therefore authorized to retain the payment.

S17. Instances of Natural Obligations

The enumeration of natural obligations in Articles 1424 up to

the last
1430 of the Civil Code is not exclusive. This is clear from
obligations
sentence of Article 1423 when it says that "some natural
recognizes the fact that
are set forth in the following articles."This
in the scattered provisions
other natural obligations may be found
of the Civil Code, or in other laws.
An example of the same is the
1960 of the Civil Code,
natural obligation referred to in Article
which has been previously discussed.
The other natural obligations
mentioned by the Code are the following:

[17.1] When Debt Has Prescribed

by
When the right sue upon a civil obligation has lapsed
to
to be a civil one and
extinctive prescription, the obligation ceases
 OBLIGATIONS & CONTRACTS

paragraph of.
pledge or mortgage. The second Article 2052
2086 ofthe Civil Code provide that a
and Article
contract
of guaranty. pledge or
mortgage may also:
natural
obligation. Here, the natural obligation is actually cor
verted again into a civil obligation, at least insofara
guarantor, pledgor or mortgagor is concerned.

[16.4] Requirement of Voluntary Fulfillment

The creditor acquires the right to retain what has been delivered
orpaid to him only in cases where the fulfillment of a natural
obligation is voluntary on the part of the debtor. But in order for such
fulfllment to be considered voluntary, it is not
sufficientthat the act
be done spontaneously or free from any coercion. It is alsO
necessary
that the actbe free from any error or mistake.
Stated otherwise, if
the payment is by reason of mistake,
although spontaneous, there is
no voluntary fulfllment of the natural
obligation. This conclusion is
apparent from the provisions of Articles 1956 and
Code, which read as follows: 1960 of the Civil

Art. 1956. No interest shall be due

unless it has been
expressly stipulated in writing.

Art. 1960. If the borrower

pays interest when there
has been no stipulation therefore, the
provisionsof this Code
concerning solutio indebiti, or
natural obligations, shall be
applied,as thecase may be.

Article 1956 of the

Civil Code, which
interest, specifically refers to monetary
mandates that no interest shall be
has been expressly stipulated in due unless it
writing.As can be
foregoing provision, payment gleaned from the
of monetary
if: (1)there was an express interest is allowed only
stipulation for the payment of
and (2)the agreement for the interest;
payment of interest was
writing. The reduced in
concurrence of the two
payment of monetary interest,i conditions is required for the
Thus, it was held that collection
interest without any of
law Article 1960 ofstipulation therefor in writing is
the Civil Code prohibited by
borrower pays interest when provides, however, that if
the
the provisions of the Code there has been no stipulation therefore,
concerning solutio indebiti or
obligations shall apply, as the natural
case may be. The
concept of solutio

170Siga-an v. Villanueva,
G.R. No. 173227, Jan. 20,2009,
171Ching v. Nicdao, G.R. No. 576 SCRA 696.
141181, April 27,2007,
v. Valdehueza,160 Phil. 760, 767 (1975). 522 SCRA 316, 361; Tan
 Title I.-OBLIGATIONS 41
Chapter 1
GENERAL PROVISIONS
a natural
distinguishes obligation from a purely
moral one because
e latter is withouta juridical
tie. As already explained,
istsa juridical tie in a natural obligation, it is withoutwhile there
any legal
anction in case of non-performance because
Baid juridical tie has
ien rendered ineffective by reason of certain special
circumstances,
ach as the prescrption of a debt. After the lapse of the
Siod for the collection of a debt, the action to collect prescriptive
such debt is
atinguished. In other words, such prescribed debt ceases to be a
civil obligation and becomes a natural one.
Thus, Article 1424 of the
Civil Code provides, as follows:

Art. 1424.
When a right to sue upon a civil obligation has
lapsed by extinctive prescription, the obligor who
voluntarily
perforins the contract cannot recover what he has delivered or
the value of the servicehe has rendered.

Since there is no juridical tie in a purely moral obligation, it

is not possible for said obligation to produce legal consequences.

A natural obligation, on the other hand, though not enforceable

through a court action, can possibly produce certain legal effects.
The former is entirely within the domain of the morals, while the
latter is within the domain of law being a true obligation capable

of producing legal effects. That being said, it is clearthat the Civil

Code, whenit classifies obligations into civil and natural only, does
not recognize
for such treatment is pretty obvious -
the existence of a purely moral obligation. The reason
a purely moral obligation is
not within the domain of the law since it is incapable of producing
any legal effect.

[16.3] Legal Effects of Natural Obligation

While a naturalobligation cannot be enforced by way of a court

action, it is capable, nonetheless, of producing certain legal effects,
as follows:

Article 1423 of the Civil Code, the creditor

is
1) Under
delivered or rendered
authorized to retain what has been
of a natural
by reason of the voluntary fulfllment
obligation. As thereof, the debtor may no
a consequence
he had delivered
longer change his mind and recover what
or paid.
natural obligation may again be converted into
a civil
2) A
novation or when it has
obligation, either by reason of
of guaranty,
been made the subject matter of a contract
 OBLIGATIONS & CONTRACTS
40

in case of it
obligation one which provides for a legal sanction
is
is authorized to invoke the power of the
breach. Hence, the creditor
its performance or to
State, through the courts, either to compel
relief.
demand any other alternative

$16. Natural Obligations

[16.1] Concept
is one which
As defined the Civil Code, a natural obligation
in
to enforce its performance, but
after
does not grant a right of action of
the debtor, it authorizes the retention
voluntary fulfillment by
by reason thereof.1e In other
what has been delivered or rendered
not provide for a legal sanction
words, this kind of obligation does by the
in case of non-performance.
The debtor may not be compelled
to perform
exercised through our courts,
coercive power of the State,
its performance depends
exclusively
this kind of obligation because of action to
not grant a right
upon his conscience. But while it does the
a natural obligation grants the creditor
enforce its performance,
by reason thereof after the
right to retain what has been delivered
debtor.
same has been voluntarily fulflled by the
a natural obligation,
In the words of the Code Commission, in
or pay, but the person
there is a moral but not a legal duty to perform
good conscience he should
thus performing or paying feels that in
on moral grounds. Thus,
comply with his undertaking which is based
mind, and recover what
the law should not permit him to change his
he has delivered or paid.e»

[16.2] Distinguished From Purely Moral Obligations

When the law classifies obligations into civil and natural, does
the law exclude the purely moral obligation? Or, is a purely moral
obligation, as the latter
obligation included in the concept of natural
Civil Code?
is defined in Article 1423 of the

The concept of natural obligation in Article 1423 differs from

obligation
that of a purely moral duty. In all specificcases of natural
that in order
recognized by the present Civil Code, it is apparent
that there be a natural obligation, there must exist a juridical tie
which, in itself, could give a cause of action but because of some
special circumstances is actually rendered ineffective. This fact

16Art. 1423,NCC.
169Report of theCode Commission,pp. 58-59.
 Title I. - OBLIGATiONS 39
Chapter 1
GENERAL PROVISIONS

CHAPTER 3: CrvIL AND NATURAL

OBLIGATIONS
(KINDS OF OBLIGATIONS)

$13. Classification of Obligations

Aclear
understanding of the different classes of
obligations is
important because of the various legal
consequences derived from
each classification.In the order of their
presentation in this Book,
obligations are classified into:

1) Civil or natural;

2) Real or personal;
Real, in turn, may either be specific or generic;
Personal, on the other hand, may either be positive
or negative;
3) Pure, conditional or with a term;
Conjunctive or distributive,and the distributive may be
alternative or facultative;
5) Joint or solidary;
6) Divisible or indivisible;and

7) With a penal clause.

$14. Civil and Natural Obligations

Basedon their juridicalquality and efficaciousness,obligations

are classified into civil or natural. Article 1423 of the Civil Code
provides:

Art. 1423. Obligationsare civil or natural. Civil obligations

give a right of action to compel their performance. Natural

obligations, not being based on positive law but on equity and

their
natural law, do not grant a right of action to enforce
performance, but aftervoluntary fulfillment by the obligor, they
or rendered
authorize the retention of what has been delivered

are set forth in the

by reason thereof. Some natural obligations
followingarticles.

$15. Civil Obligations

The Civil Code defines a civil obligation as one which gives a

right of action to compel its performance. 47 In simple words, a civil

167Art. 1423, NCC.

 Art. 1162
& CONTRACTS
OBLIGATIONS
38
there
another,
or injury to instantly
negligence on
damage was the
causes that there
negligence
juristantum of the employee (culpa
a presumption the selection
arises
either in
the employer, after the selection (culpa
part of over himn
or thesupervision in the selectiona
in eligiendo) presumed negligence
the
This is presumed negligencet
in rigilando), The theory of
supervision
of the employee.
of Article
2180 of the Ci
last paragraph
from the sholl
clearly deducible therein mentioned
the responsibility
Code which provides
that of a
all the diligence
prove that they observed
cease if the employers
to prevent damages.
good father of a family
of the
for the negligent conduct
The liability of the employer defense of due
primary, subject to the
subordinate is direct and The
diligence in the selection and supervision of the employee.
the employer in an action based
enforcement of the judgment against
to be insolvent since
on Article 2176 does not require the employee
of the employee,
the nature of the liability of the employer with that
the two being statutorilyconsidered joint tortfeasors, is solidary.
4
To escape solidary liability fora quasi-delict committed by his
employee, an employer must rebut the presumption by presenting
convincing proof that in the selection and supervision of his
employee,he has exercised the care and diligence of a good father of
a family.s In the selectionof prospective employees, employers are
required to examine them as to theirqualifications,experience, and
service records. On the other hand, with respect to the
supervision
of employees, employers should formulate
standard operating
procedures, monitor their implementation, and
impose disciplinary
measures for breaches thereof. To establish these
factors in a trial
involving the issue of vicarious
liability, employers must
submit
concrete proof,including documentary
evidence.1

-000

162Metro ManilaTransit Corp.v.

CA, G.R. No. 141089, Aug. 1, 2002.
163Poblete v. Fabros, G.R.
No. L-29803, Sept. 14,
No. 138060, Sept. 1, 2004. 1979; Tiu v. Arriesgado, G.R.
164Rafael Reyes Trucking
Corp. v. People of
3, 2000;Metro Manila the Phil., G.R. No. 129029,
Transit Corp. v. CA, G.R. April
Delsan Transport No. 116617,Nov, 16,
Lines, Inc. v. C & A 1998. See also
2003;Sps.Hernandez v. Construction, Inc., G.R.
Sps. Dolor, G.R. No. No, 156034,Oct. 1,
160286, July 30,
L65Metro Manila
Transit Corp. v. CA,G.R.
2004.
168Metro Manila
No. 141089,Aug. 1,
Transit Corp.v. CA, G.R. 2002.
Liner, Inc.v. Heirs of No. 116617, Nov,
AndresMalecdan,394 16, 1998;Victory
No. 148737, June 16, SCRA 520(2002): Pleyto v.
2004;Ramosv. C.O.L. Lomboy, G.R.
2009;Cang v. Cullen, G.R. No. Realty Corp., G.R. No.
163078, Nov.25,
184905,Aug. 28,
2009.
 1162 Title
Art. I.-OBLIGATIONS 37
Chapter
GENERAL PROVISIONS
theconvicted
of
employers employees;(2)they are engaged in some
ind of industry:(8)the crime was committed by the employees in
the discharge of their duties; and (4)the
snot been satisfied due to execution against the latter
insolvency. m
Additionally, a judgment
of conviction sentencing a
the defendant-employee
absence of any collusion between the
to
pay an indemnity
defendant and the
ffended party is
conclusive upon the employer in an action
for the
forcement of the latter's subsidiary liability
hecivil liability, but also not only with regard
with regard to its amount,!"
Here, the employer cannot relievehimself of
liability by proving
that he exercised all the diligence of a good father
of a family in the
selection and supervision of his employees. This is
so because of the
very nature of the obligation.

[c.] Recovery Under Quasi-Delict

The offended may choose to recover only from the
party
employee (taxi driver) for the latter's negligence pursuant to Article
2176 of the Civil Code, or directly from the employer (taxi
operator)
pursuant to the latter's vicarious liability under Article 2180 of the
Civil Code, or from both.

The employer may also be held liable under the doctrine of

vicarious or imputed negligence. Under such doctrine, a
liability

person who
has not committed the act or omission which caused
damage or injury to another may nevertheless be held civilly
liable to the latter either directly or subsidiarily under certain

circumstances. ls8 In our jurisdiction,vicarious liability or imputed

negligence is embodied in Article 2180 of the Civil Code and the
basis for damages the action under said articleis the direct and
primary negligence of the employer in the selection or supervision,
or both,of his employee. 199 Whether or not engaged in any business
or industry, an employer is liable for the torts committed by
employees within thescope of his assigned tasks. But it is necessary
to establish the employer-employee relationship," for the same
cannot be assumed. 161 The rule is that whenever an employee's

87
l6Supra; see also Joaquin v. Aniceto, 120 Phil. 1110;Pajarito
v. Seneris,

SCRA 275;Carpiov. Doroja, G.R.No. 84516,Dec. 5, 1989.

Pamanv. Seneris, 115 SCRA 709 (1982).
Vda. de
18Mendoza v. Gomez, 726 SCRA 505 (2014).
1591d.

Corp.v. Vasquez,Jr., G.R. No. 132266, Dec. 21, 1999.

Castilex Industrial
Nov. 27, 2008.
"Sps. Jayme v. Apostol, G.R. No. 163609,
36 OBLIGATIONS & CONTRACTS Art.
1162

[a.] Recovery Under Contract of Carriage

Here, the liability devolves upon the employer because t
driver is not a party to the contract of carriage and may not be hola
liable under the contract, 14® As earlier discussed, the plaintiff is
required to prove the existence of negligence in order to recover
Proof of the contractand of its non-performance is sufficient prima
facie to warrant recovery.9 Under the law on common carriage, in
fact, the common carrier is presumed to have been at fault or to
have acted negligently in case of death of or injuries to passengers, 1s1

and such liability applies even if such death or injury to passengers

is through the negligence or willful acts of his employees, acting

beyond the scope of their authority or in violation of the orders of

thecommon carrier!s and he (the common carrier) may not relieve
himself of liability by proving that he exercised all the diligence
of a good father of a family in the selection and supervision of his
employees. !s9 At best, such proof of due diligence may only
serve to
mitigate his liability.

[b.] Recovery Under Delict or Crime

Here, the employee is directly and primarily
liable, while the
employer is subsidiarily liable. Is If the cause of
action against the
employee is based on delict, it is not correct
to hold the employer
jointly and severally liable with the
employee, based on quasi-delict
under Articles 2176 and 2180 of the Civil
Code. Articles 2176 and
2180of the Civil Codepertain to the
vicarious liability ofan employer
for quasi-delicts that an
employee has committed. Suchprovisions of
law do not apply to civil liability arising
from delict, is
Theprovisions
of the employer
the
- of the Revised Penal
Articles 102 and 103
judgment in cases to which they are
Codeon subsidiary liability
are deemed written into
applicable. Thus, in the
dispositive portion of its decision,
the trial court need not
expressly
pronounce the subsidiary liability of the
employer. Nonetheless,
before the employer's
subsidiary liability is enforced,
adequate
evidence must exist establishing that: (1)
they are indeed the

149Supra.
I50Jd, See also Calalas v. CA, 332 SCRA 356 (2000).
161 Art. 1756, NCC.

168Art. 1759,par. 2, NCC.

154Art. 103, RPC.
156Calang v. People, 626 SCRA 679,Aug. 3,2010.
Art. 1162 Title 36
I.-OBLIGATIONS
Chapter 1

GENERAL PROVISIONS
breach of contract or culpa contractual, is
premised
upon the negligence in the performance of a contractual
obligation,4"Stated otherwise, in the first, the negligence
or culpa is substantive and independent, which of itself
constitutes the source of an obligation between persons not
formerly connected by any legal tie, while in the second,
the negligence or culpa is considered as an accident in
the performance of an obligation already existing
the vinculum exists independently of the breach of the
voluntary duty assumed by the parties when entering
into the contractual relation,l46

b) Consequently, in culpa aquiliana or quasi-delict, the

negligence should be clearly established because it is the
basis of the action,47 while 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, 48

[12.5] Liability of employer for act or omission of his

employee
An interesting problem in law concerns the civil liability of
the employer for the act or omission of his employee which causes
damage to another. The extent and nature of the employer's
liability vis-à-vis his employee and other applicable principles vary

depending on the source of obligation involved. Let us discuss this

illustrative problem: A taxi driver, who drove recklessly, caused
injuries to his passenger. The taxi is owned by someone else. This
situation gives rise to three possible sources of obligation: (1) the
contract carriage; (2)delictor crime; and (3)quasi-delict,applying
of

the principles earlier discussed that the concept of quasi-delict also

covers acts or omissions which are criminal in character and that
the existence of a contract does not bar the commission of quasi
delict, when the act that breaks the contract is also a tort. In this

problem, the very reason for the breach of the contract of carriage is
the commission of tort by the driver.

v. CA, 332 SCRA 356 (2000).

14Calalas
9Cangco v. Manila Railroad Co., G.R. No. L-12191, Oct. 14, 1918.
146Jd.

147Calalas v. CA, supra.

148FGU InsuranceCorp. v. G.P. Sarmiento Trucking Corp., G.R.No. 141910,

Aug.6,2002.
 Art. 1162
& CONTRACTS
34 OBLIGATIONS

a breach of
when an act which constitutes
In other words,
the source of a quasi-delictual
itself constituted
contract would have the contract
had no contract existed between the parties,
liability the rules
by tort, thereby allowing
can be said to have been breached
on tort to apply.
there is already a contract between
Hence, in situations where such
of the quasi-delict and
the parties prior to the commission
the breach of the contract, the
commission is the very reason for
under contract or quasi-delict.
injured party may recover either
the prohibition
But he is not allowed to recover on both. However,
to this
embodied in Article 2177 of the Civil Code does not apply
situation because said provision expressly prohibits double recovery
from delict and quasi-delict only. The Civil Code does not contain
a

similar prohibition on double recovery based on contract and quasi

contract because the original intention of the Code, it appears, is
to preclude the commission of quasi-delictif there is already a pre
existing contractual relation between the parties.This, the author
believes, is the intent behind the language of Article 2176 of the Civil
Code. Byreason, however, ofthe ruleenunciated inAir France,which
has since become a settled doctrine, the possibility of committing

parties has been opened -

quasi-delict despite a pre-existingcontractual relation between the
in cases where same act that breaks the
contract is also a tort. Be that as it may, the injured party must not
be allowed to recover damages twice from contract and quasi-delict.
The idea of recovering damages is only for the purpose of
repairing
the damage suffered by the injured party and not for the
purpose of
enriching him. Additionally, the principles in procedural
law, such
as election of remedies and splittinga single
cause of action, may be
invoked to effectivelyprevent such double recovery.

If the injured party opts to recover

under contract, the source
of obligation is the contract itself and not
the negligencecommitted
during the performance of the obligation already in
existence. If the
recovery is based on quasi-delict,however, it is the
negligence itself
which is the source of the obligation. A
distinction must therefore
be made between culpa aquiliana (or culpa
extra-contractual) and
culpa contractual. They are distinguished, as follows:

The first, culpa aquiliana or culpa extra contractual, has

as its source the negligence of the
tortfeasor.The second,

43Light Rail Transit Authority v. Navidad, supra; SchmitzTransport & Bro

kerageCorp.v. Transport Venture, Inc., supra.
 Art. 1162
Title I. -ORLJGATIONS 33
Chapter1
GENERAL. PROVISIONS
Art. 2177. Responsibility for fault or negligence
under
the preceding article is entirely
separate and distinct from the
civil liability arisingfrom negligence under the
Penal Code. But
the plaintiff cannot recover damages twice for the same act or
omission of the defendant.

[12.4] Effect of Pre-existing Contractual Relations

The language of Article 2176 of the Civil Code, defining
the concept of quasi-delict, may give us the impression that the
existence of a contract between the parties prior to the occurrence
of the fault or negligence precludes the commission
of quasi-delict.
While it may be true that the pre-existing contract between the
parties may, as a general rule, bar the applicability of the law on
quasi-delict, the liability may itself be deemed to arise from quasi
delict, i.e., the acts which breaks the contract may also be a quasi
delict.Beginning with the case of Air France v. Carrascoso,0
it has already been therule in this jurisdiction that the existence of

a contract between the parties does not bar the commission of a tort
(quasi-delict) by one against the other and the consequent recovery
of damages, therefore, when the act that breaks the contract is also
a tort.4 Thus, in Singson u. Bank of the Philippine Islands,« the
Court stated:

We have repeatedly held, however, that the existence of

a contract between the parties does not bar the commission of
a tort by the one against the other and the consequent recovery
of damages therefor. Indeed, this view has been, in effect,
reiterated in a comparatively recent case. Thus, in Air France
Us. Carrascoso, involving an airplane passenger who, despite
his frst-class ticket,had been illegally ousted from his first
class accommodation and compelled to take a seat in the tourist
compartment, was held entitled to recover damages from the
air-carrier, upon the ground of tort on the latter's part, for,
although therelation between the passenger and a carrier is
"contractual both in origin and nature...the act that breaks
the contract may also bea tort."

139 Coca-ColaBottlers Philippines, Inc. v. CA, G.R. No. 110295,Oct. 18,1993.

14018 SCRA 155 (1966).
14'Reiterated in Singsonv. BPI, 23 SCRA 1117 (1968); also in Light Rail Tran
Authority v. Navidad, 397 SCRA 75 (2003): YHT Realty Corp.
v. CA, 451 SCRA
sit

638 (2005);and Schmitz Transport & Brokerage Corp. v. Transport Venture, Inc.,
456 SCRA 557 (2005).
148Supra.
 OBLIGATIONS & CONTRACTS Art. 1162

culpa, Whes
In Barredo, the crime was committed through
if the crime is committed
through dolo? Will the Barredo ruli
the crime of homicid
also apply? In Eleano v. Hill,M involving
voluntar
the Court ruled that the concept of quasi-delict includes
by law. The scope ot
and negligent acts which may be punishable
to acts or omissions resultine
Article 2176, therefore, is not limited
that Article 2178
from negligence. Well-entrenched is the doctrine
but also acts which
covers not only acts committed with negligence,
cage of
are voluntary and intentional. As far back as the definitive
Elcano v. Hill," the Court already held that Article 2176, where it
refers to "fault or negligence," covers not only acts "not punishable
by law" but also acts criminal in character, whether intentional
and voluntary or negligent, la8 Taking into account the cases of
Barredo and Elcano, the private offended party in a crime, whether
committed through dolo or culpa, may recover civil liability either
under delict, pursuant to Article 100 of the Revised Penal Code, or
under quasi-delict, pursuant to Articles 2176 of the Civil Code.

It is also clear from the foregoing discussion that the concept

of quasi-delict is not limited to cases of negligence, but also covers
intentional or deliberate acts which are unlawful. Ergo, the terms
"fault"and "negligence" in Article 2176 of the Civil Code do not carry
the same meaning. The term "fault in Article 2176 covers deliberate
and intentional acts, while "negligence" refers to cases of omission
of the required diligence (or unintentional). When the quasi-delict
is committed through negligence or culpa, it is referred to as culpa
aquiliana or culpa extra-contractual.

[12.3] Prohibition Against Double Recovery

Considering that the same act or omission, characterized
by fault or negligence
and which causes damage to another, may

-
produce two distinct sources of obligations delict and quasi-delict
the law provides for a prohibition against double
both delict and quasi-delict, "for the same act or
recovery from
omission of the
defendant."Such prohibition is embodied in Article 2177 of the Civil
Code, to wit:

13577 SCRA 89 (1977).

196Safeguard Security Agency,Inc. v. Tangco,511
137
SCRA 67 (2006).
Supra.
1sSafeguard Security Agency, Inc. v. Tangco, supra, citing Dulay v. CA, 313
Phil. 8, 20 (1995).
 1162 Title 1.
Art. -OBLIGATIONS 31
Chapter
GENERAL PROVISIONS
Article 365 punishes not only recklessbut
alsosimple negligence.
If we wore hold that Articles 2176-2194
to
refer only to fault
or negligence not punishable by
law, aceording to the literal
import of Article 1162 of this
Code, the legal institution of culpa
aguiliana would have very little scope
and npplication in actual
life. Death or injury

any degree of negligence

to be indemnified only
-
to persons and damage to
even the slightest
property through
would have
through the principle of civil liability
arising from a crime. In such a
state of affairs, what sphere
would remain for culpa aquiliana? Secondly, to
find the accused
guilty in a criminal case,proof of guilt
beyond reasonable doubt
is required, while in a civil
case, preponderance of evidence is
sufficient to make the defendant pay in
damages. There are
numerous cases of criminal negligence which
cannot be shown
beyond reasonable doubt, butcan be proved by a
of evidence. In such cases, the preponderance
defendant can and should be
made responsible in a civil action under Articles 2176-2194
of
the Civil Code. Otherwise, there
would be many instances of
unvindicated civil wrongs. Ubi jus ibi
remedium. Thirdly, to
hold that there is only one way to
make defendant's liability
effective and that to sue the driver and exhaust his (the
is,
latter's) property first, would be
tantamount to
the plaintiff to follow a devious and cumbersome compelling
method of
obtaining relief. * ** Fourthly, because of
the broad sweep of
the provisions of both the Penal Code and the Civil Code
on this
subject,which has given rise tothe
overlapping or concurrence
of spheres already discussed, and for lack of
understanding of
the character and efficacy ofthe action forculpa
aquiliana, there
has grown up a common practiceto seek damages only by
virtue
of the civil responsibilityarising
from a crime, forgetting that
there is another remedy, which is by invoking
Articles 2176
2194 of the Civil Code. Although this habitual method is
allowed
by our laws, it has nevertheless rendered practically
useless
and nugatory the more expeditious and effective remedy based
on culpa aquiliana or culpa extra-contractual.In the present
case, we are asked to help perpetuate this usual course.
But we
believe it is high time we pointed out to the harm done by such
practice and to restore the principle of responsibility for fault or
negligence under Articles 2176 et seq., to its full rigor.

Following therulingin Barredo, in every commission of a

crime
through negligence (orculpa), the private offended
party may recover
civil liability either under
delict or quasi-delict. Stated otherwise,
the same omission which is criminal in character
may produce civil
liability arising from a crime under
Article 100 of the Revised Penal
Code, or create an action forquasi-delict under Articles
2176 to 2194
of the Civil Code.
 & CONTRACTS Art.1162
30 OBLIGATIONS

differences pointed
responsibility arising from quasi-delict. The
out between delict (crime) and quasi-delict are the following:
(1
that crimes affect the public interest, while quasi-delicts are only
of private concern; (2) that, consequently, the Penal Code punishes
or corrects the criminal act, while the Civil Code, by means of
indemnifcation, merely repairs the damage:and (3)that delicts are
not as broad as quasi-delicts, because the former are punished only
if there is a penal law clearly covering them, while the latter, quasi.
delicts, include all acts in which any kind of fault or negligence
intervenes, is3

While the two concepts (delict and quasi-delict) are distinct

from each other, they share certain similarities. In both,
an act or
omission characterized by "fault or negligence" is
committed, that
such act or omission is unlawful, and that
the same causes damage
or injury to another. An interesting question
therefore is raised: Is
the concept of quasi-delict limited
only to fault or negligence not
punishable by law? The Supreme Court
ruled in the negative in
Barredo v. Garcia and Almario, !4
where it was held that the
"same negligent act causing damages" may
produce civil liability
arising from a crime under
Article 100of the Revised Penal
create an action for quasi-delict Code, or
under Articles 2176 to 2194 of the
Civil Code.

In the above-mentioned
case, a head-on
taxi and a caretela collision between a
resulted in the death of a
the passengers of the caretela. A 16-year old boy, one of
the taxi-driver and he was criminal action was filed against
convicted and sentenced
right to bring a separate civil accordingly. The
the deceased. Thereafter,the action was reserved by the parents of
parents ofthe deceased filed an
for damages against the action
proprietor of the taxi (or
the taxi driver) under the employer of
Article 2180 of the
Civil Code.The
contends that his liability is employer
governed by the Revised
hence, merely subsidiary, Penal Code;
and as there has been no
against the driver, the one civil action
criminally liable, he
responsible. The Court cannot be held
rejected the employer's
contention and held:

we are formulating doctrinesthat

Inasmuch as
little
understood in the past, it have been
might not be
indicate their foundations. inappropriate to
Firstly, the Revised
Penal Code in

133Barredo v. Garcia and

Almario,
supra; Diana v. Batangas
Co., 93 Phil. 392, Transportation
14Supra.
Art. 1162 Title
1.-OBLIGATIONS 29
Chapter 1
GENERAL PROVISIONS
s12. Obligations Arising From
Delicto)
Quasi-delicts (Obligatio Ex Cuasi
[12.1] Concept
Quasi-delict is another legal
institution of ancient lineage.
dating back to the Lex Aquila of the
Roman Law. Under our Civil
Code, quasi-delict is a separate legal
institution with a substantivity
all its own, and
individuality that is entirely apart and
independent
rom delict or crime, although both proceed from the com mission
of an unlawful act. The concept is defined
in the Code, as follows:
Art. 2176. Whoever by act or
omission causes damage to
another, there being fault or negligence,
is obliged to pay for the
damagedone. Such faultor negligence,if there is no
pre-existing
contractual relation between the parties, is calleda
and is governed by the provisionsof this Chapter. quasi-delict

a claim based on quasi-delict, the following

Hence, to sustain
requisites must concur: (1)damage suffered by the plaintiff;(2)fault
ornegligence of the defendant; and (3) connection of cause and effect
between the fault ornegligence of defendant and the damage incurred
by the plaintiff.1" According to Manresa, liability for personal
acts
and omissions is founded on that indisputable principle of justice
recognized by all legislations that when a person by his act or
omission causes damage or prejudice to another, a juridical relation
is created by virtue of which the injured person acquires a right
to be
indemnified and the person causing the damage is charged with the
corresponding duty of repairing the damage. The
reason for this is
found in the obvious truth that man should subordinate his acts to
the precepts of prudence and if he fails to observe them and causes
damage to another, he must repair the damage,

[12.2] Scopeof Quasi-Delict

As discussed
above, quasi-delict is a legal institution distinct
and separate from delict or crime. Stated otherwise, a distinction
exists between the civil liability arising from delict and the

T*Barredo v. Garcia and Almario, 73 Phil. 60 (1942). See also Manliclic v.

Calaunan, supra.
130Dy Teban Trading,Inc.v. Ching, 543 SCRA 560;BPI v. LifetimeMarketing
Corp.,555 SCRA 373;CorinthianGardens Association, Inc. v. Tanjangeo, 556 SCRA
154;Ngo Sin Sing v. Li Seng Giap & Sons,Inc., 572 SCRA 625.
13Mendoza v. Gomez, 726 SCRA 505 (2014).
121d.
 OBLIGATIONS & CONTRACTS Art. 1102
28

to his criminal liability, Article n

the judgment against him? As
is clear that the sAme
is total:
par. 1 of the Revised Penal Code o
But what about his civil liability based
extinguished by his death. iMth
case of People v. Bayotas,
the same crime? In the landmark
arising from the crime
Supreme Court ruled that his civil liability
also extinguished. The Court
or delict(or civil liability ex delicto) is
from
recovery of civil liability arising
explained that in pursuing a condition
of the criminal liability is
crime, the final determination
civil action, such that when
the
precedent to the prosecution of the
criminal action is extinguished
by the demise of accused-appellant
of conviction, said civil action
pending appeal of the judgment
anymore survive. But note that the death of the accused
cannot
his criminal liability and only the
prior to finaljudgment terminates
solely on the offense
civil liability directly arising from and based
!25 Corollarily, the claim
for
committed, i.e., civil liability ex delicto,

civil liability survives notwithstanding the death of the accused, if

of obligation other than
the same may also be predicated on a source
delict, 30 i.e., civil liability based on quasi-delict.

Where the civil survives because it is based on other

liability

sources of obligation, an action for recovery therefore

may only be
n The private offended
pursued by way of fling a separate civil action.
forfeiture of his right to
party need not fear, however, of possible
in cases where during the
file this separate action by prescription,
to its extinction, the
prosecution of the criminal action and prior
therewith the civil action.
private offended party instituted together
civil liability is deemed
In such case, the statute of limitations on the
interrupted during the pendency of the criminal case, conformably
1155 of the Civil Code.128
with the provisions of Article

E. QUASI-DELICT

Art. 1162. Obligations derived from quasi-delicts shall be

XVIl of this Book,
governed by the provisions of Chapter 2, Title
and by special laws. (1093a)

CA, G.R. No.

PA236 SCRA 239; reiterated in other cases such as Villegas v.
G.R. No. 136843, Sept. 28, 2000; Gov.
82562, April 11, 1997; People v. Abungan,
Looyuko, 537 SCRA 445 (2007): People v. Bunay, 630 SCRA 445 (2010); People v.

Ayochok,629 SCRA 324 (2010).

1People v. Bayotas, supra,cited in People v. Ayochok, 629 SCRA 324 (2010).

1261d.

1People v. Ayochok,supra,citing Peoplev. Bayotas,supra.

i28Td.
 Art. 1161 Title 1. -OBLIGATIONS 27
Chapter I

GENERAL PROVISIONS
Does Article 29 of the Civil Code require the filing of a
separate
civil action to recover the civil liability ex delicto in case of
acquittal
based on reasonable doubt? The Court answered the question in the
negative in Padilla v. Court of Appeals,! where it was held that
the court may acquit an accused based on reasonable doubt and, at
the same time, order the payment of civil liability already proved
in the same case without need for a separate civil action. This
will
prevent, the Court explains, the needless clogging of court dockets
and the unnecessary duplication of litigation.A separate civil action
will only be warranted, adds the Court, if additional facts have to be

established or more evidence must be adduced or if the criminal case

has been fully terminated and a separate complaint will be just as
efficacious or even more expedient than a timely remand to the trial
court where the criminal action was decided for further hearings on
the civil aspects of the case,i20

[11.3] Rule of Implied Institution

The rule is that when a criminal action is instituted, the civil
action for the recovery of civil liability arising from the offense
charged is deemed instituted with the criminal action, unless the
offended party waives the civil action, reserves the right to institute
it separately or institutes the civil action prior to the criminal
action, However, it must be made clear that the civil action
which is deemed instituted with the criminal action is one which
is based on the delict, i As to the other civil actions that may be
pursued under Articles 32, 33, 34, and 2176 of the Civil Code, they
are no longer deemed instituted and they may be filed separately
and prosecuted independently even without any reservation in the
criminal action.!

[114] Efect ofDeath of Accused Pending Appeal

In those cases where the civil action (based on delict) is tried
together with the criminal action and the accused appeals the
judgment of conviction, what will be the effect of the death of the
accused during the pendency of his appeal and before the finalityof

119129 SCRA 558.

#id. Seealso Peoplev. Jalandoni, 131 SCRA 454 (1984): Maximo v.Garuchi,
144 SCRA 326 (1986); Vizcondev. IAC, 149 SCRA 226 (1987);People v. Ligon,G.R.
No. L-74041,July 29, 1987,152 SCRA 419 (1987).
1Sec. 1, Rule 111, 2000Revised Rules of CriminalProcedure.
iCasupanan v. Laroya,G.R. No. 146391,Aug. 26,2002.
123Jd.
 26 OBLIGATIONS & CONTRACTS Art 1161

has not been satisfactorily established, he is not exempt from ci

liability (based on the crime)which may be proved by preponderane

of evidenceonly. This is the situation contemplated in Article 290

the CivilCode, where the civil action for damages is "for the sameact
or omission."ii The said provision, reads:

Art. 29. When the accused in a criminal prosecution

is acquitted on the ground that his guilt has not been proved
beyond reasonable doubt, a civil action for damages for thesame
act or omission may be instituted. Such action requires only a
preponderance of evidence. Upon motion of the defendant,
the court may require the plaintiff to fle a bond to answer for
damages in case the complaint should be found to be malicious.

If in a criminal case the judgment of acquittal is based

upon reasonable doubt, thecourt shallso declare.In the absence
of any declaration to that effect, it may be inferred from the
text of the decision whether or not the acquittal is due to that
ground.

In the second instance, a person acquitted of a criminal charge

isnot necessarily freefrom civil liabilitybecause thequantum ofproof
required in criminal prosecution (proof beyond reasonable doubt) is
greater than that required for civil liability (mere preponderance
of evidence),"8 In order to be completely free from civil liability, a
person's acquittal must be based on the fact that he did not commit
the offense. !"6 If the acquittal is based merely on reasonable doubt,
the accused may still be held civilly liable since this does not mean
he did not commit the act complained of.17 Such guilt may easily be
proven in the civil action forrecovery of civilliability ex delicto which
only requires preponderance of evidence. In fine, the acquittal will
not bar a civil action in the following cases: (1) where the acquittal
is based on reasonable doubtas only preponderance of evidence is
required in civil cases; (2) where the court declared the accused's
liability is not criminal but only civil in nature; and (3) where the
civilliability does not arise from or is not based upon the criminal
act of which the accused was acquitted.18

119Manantan v. CA, supra.

1141d.

115Nuguid v. Nicdao,G.R. No. 150785, Sept.15,2006, 502 SCRA 93.

1161d.

17]d.

1181d.
Art. l161
Tide I. - OBLIGATIONS 25
Chapter I
GENERAL PROVISIONS
irst is an acquittal on the ground that the
nceused is not the
author of the act or omission complained of. Thia
instance closes
the door to
civil
liability, for a person who
has been found to he
ot the perpetrator of any act or omission cannot and
ld liable for such act or omission. en There being can never be
no delict, ciil
liability ex delicto is out of the question, and
the civil action, if any.
which may be instituted must be based on grounds other than the
delict complained of.os This is
the situation contemplated in the
last paragraph of Section 2, Rule 111 of
the 2000 Revised Rules of
Criminal Procedure, which provides: "e]he extinction of the penal
action does not carry with it extinction of the civil action. However,
the civil action based on delict shall be deemed extinguished if there

is a finding in a final judgment in the criminal action that the act

or omission from which the civil liability ma
arise did not exist."
It must be emphasized, however, that this section of the Rule of
Criminal Procedure applies only to a civil action arising rom crime
or ex delicto and not to a civil action arising from quasi-delict or
culpa aquiliana, The extinction of civil liability referred to in
said section refers exclusively to civil liability founded on Article
100 of the Revised Penal Code, whereas the civil liability for the
same act considered as a quasi-delict only and not as a crime is not
extinguished even by a declaration in the criminal case that the
criminal act charged has not happened orhas not been committed by
the accused,1oAs regards civil liability arising from quasi-delict or
culpa aquiliana,the same will not be extinguished by an acquittal,
whether it be on ground of reasonable doubt or that accused was
not the author of the act or omission complained of (or that there
is declaration in a final judgment that the fact from which the civil

liability might arise did not exist). The responsibility arising from
fault or negligence in a quasi-delict entirely separate and distinct
is

from the civil liability arising from negligence under the Penal
Code.!! An acquittal or conviction in the criminal case is entirely
irrelevantin the civil case based on quasi-delictor culpa aquiliana."

The second an acquittal based on reasonable doubt

instance is
of the accused
on the guiltof the accused. In this case, even iftheguilt

10"Manantan v. CA, 350 SCRA 387 (2001).

108 Id.

Lo9Manliclic v. Calaunan, 512 SCRA 642 (2007).

10Td.

"Id.,citing McKee v. IAC,211 SCRA 517, 536 (1992).

598 (1989).
"Id.,citing Castillo v. CA, 176 SCRA 591,
 24 OBLIGATIONS & CONTRACTS Art. 1161.

"Art. 100. Civil liability of a person guilty of a felony.

Every person eriminally liable for a felony is also civilly liable."

Underlying this legal principle is the view that from the

standpoint of its effects, a crime has dual character: (1) as an
offense against the State because of the disturbance of the social
order; and (2)asan offense against the private person injured by the
crime unless it involves the crime of treason, rebellion, espionage.
contempt and others wherein no civil liability arises on the part of
the offender eitherbecause there are no damages to be compensated
or there is no private person injured by the crime While an act or
omission is felonious because it is punishable by law, it gives rise
to civil liability not so much because it is a crime but because it
caused damageto another.10a It is plain that civil liabilityexists in a
crime only if there is a private offended party who suffered damage.
In cases where there are no private persons injured by the crime,
such as in treason, rebellion, espionage, contempt and the likes,
no civil liability arises on the part of the offender. In the ultimate
analysis therefore, what gives rise to the civil liability is really
the obligation of everyone to repair or to make whole the damage
caused to another by reason of his act or omission, whether done
intentionally or negligently and whether or not punishable by law. a
In other words, criminal liability will give rise to civil liability only
if the same felonious act or omission results in damageor injury to
another and is the direct and proximate cause thereof.104 Damage
or injury to another is evidently the foundation of the civil action,is

[11.2] Efect of Acquittal ofthe Accused

As discussed above, if the same felonious act or omission
results in damage or injury to another, then the commission of the
crime carries with it a civil liability ex delicto. What then the
effect of the acquittal of the accused? Will that also result in the
extinguishment of the civil liabilitybased on the crime? The answers
to these questions depend upon the nature of the acquittal, or the
reason relied upon by the court. Our law recognizestwo kinds of
acquittal, with different effects on the civil liability of the accused,
as follows:100

101Occena v. Icamina, 181 SCRA 328.

102 Banal v. Tadeo, Jr., 156 SCRA 325 (1987).
1090ccena v. Icamina,supra.
104Banal v. Tadeo, Jr., 156 SCRA 325.
106 1d.

109Manantan v. CA, 350 SCRA 387 (2001).

Art. 1161 Title I. -OBLIGATIONS 23
Chapter1
GENERAL PROVISIONS
occasionof a fire, flood, storm, or other calamity, by another person,
without the knowledge of the former, the property owner isbound to
pay the latter just compensation," In both, the obligation to pay is
based on quasi-contract.

[10.3] Third Person Pays Debt or Taxes of Another

Anyone who is constrained to pay the taxes of another shall
be entitled to reimbursement from the latter.m With respect to the
rights of a third person who pays the debt of another, without the
latter's knowledge, the same shall be governed by Articles 1236 and
1237 of the Civil Code, which will be discussed extensively in the
section of this Book concerning payment of obligations.

[10.4] Acts in Consideration of General Welfare

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," Similarly, when the majority of the inhabitants
of age in a small community decide upon a measure for protection
against lawlessness, fire, flood, storm or other calamity,anyone who
objects to the plan and refuses to contribute to the expenses but is
benefited by the project as executed shall be liable to pay his share
of said expenses.

D. DELICT OR CRIME
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 XVll of this
Book, regulating damages. (1092a)

$11. Obligations Arising From Delicts (Obligatio Ex Delcto)

[11.1] Basis of Civil Liability in Crimes or Delicts
Generally, the basis of civil liability arising from crime is the
fundamental postulate embodied in Article 100 of the Revised Penal
Code, as amended, which reads:

WArt. 2168, NCC.

*Art. 2175, NCC.
9Art. 2169, NCC.
100Art. 2174, NCC.
22 OBLIGATIONS & CONTRACTS Art.1160

said relatives of the deceased," Note that under

our law," the duty
of a relative
and the right to make arrangements for the funeral
for support, under
shall be in accordance with the order established
Article 199 of the Family Code.

the person to be supported is either an orphan,

or an
When
(in relation to their
insane or other indigent person, or a minor child
support unjustly refuses to
parents) and the person obliged to give
to the needy individual
giveit,any third person who furnished support
has a right to claim reimbursement from the person obliged to give
it. Again, the basis of the right to demand reimbursement is quasj.
contract and not law. However, if the person needing support is not
of Article
an orphan, insane, indigent or minor child, the provision
a
2166 of the Civil Code does not apply. Instead, the applicable law is
Article 207 of the Family Code which provides: "fw]hen the person
to givesupport
obliged to give support another unjustly refuses or fails
when urgently needed by the latter, any third person may furnish
support to the needy individual, with a right of reimbursement from
207 of
the person obliged to give support. xxr" In relation to Article
the Family Code, what will be the source of the obligation of the
person obliged to give support to reimburse the third person who
paid such support? Wil it stillbe quasi-contract? Or will be the
law? The actcontemplated in Article 207 of the Family Code is still
within the purview of a quasi-contract under Article 2142 of the
Civil Code. As such, following the provision of Article 2143 of the
Civil Code that "the provisions for quasi-contracts in (Chapter l of
Title XVII of Book IV) do not excludeother quasi-contract which may
come within thepurview of (Article2142), "it issubmitted that such
obligation is still based on quasi-contract and not on law.

[10.2] Acts of a Good Samaritan

When a person is injured or becomes seriously ill by reason of

an accident or other cause and he is treated or helped while he is

not in a condition to give consent to a contract, he is liable to pay
for the services of the physician or other person aiding him, unless
the service has been rendered out of pure generosity." Also, when
the property of another has been saved from destruction during the

Art. 2165,NCC.
Art. 305,NCC.
BArt. 2166,NCC. See also the counterpart provision in the Family Code,Art.
207.
98Art. 2167,NCC.
Art. 1160 Title 21
L.
-OBLIGATIONS
Chapter 1
GENERAL PROVISIONS

recovered. But should the debtor acted in good faith in accepting

an undue paymentofa thing certain and definite, he shall only be
responsible for the impairment or lo8A of the same or its accessories
and accessions insofar as he has thereby been benefited. If he has
alienated the thing, his obligation is only to return the price or to
assign the action to collect the sum.o

In the event that there shall be two or more payees (debtors) in

solutio indebiti, their liability to the person who madethe delivery

by mistake (ereditor) shall be solidary."

$10. Other Forms of Quasi-Contract

As discussed in Section 7.2 of this Book, the enumeration
of quasi-contracts in the Civil Code is not exclusive. Aside from
negotiorum gestio and solutio indebiti, the Code also exprely

2175 -
mentions some other forms of quasi-contracts in Articles 2164 up to
all of them based on the ancient principle that no one shall

enrich himself unjustly at the expense of another. These other

forms
of quasi-contracts are the following:

[10.1] Giving of Legal Support and Paymentof Funeral

Expenses
The persons who are to support each other are
obliged
Family Code, and the
enumerated in Articles 195 and 196 of the
order of liability, should there be two or more persons obliged to give
If such support
support, is outlined in Article 199 of the same Code.
is given, however, by a stranger
(or one who has no obligation to give

it) without the knowledge of

the person obliged to give support, the
the latter, unless it
former has a right to claim reimbursement from
out of piety and without intention
appears that the stranger gave it
to refund the amount is not
by virtue
of being repaid. The obligation
of law, but based on quasi-contract.
The same principle is applicable
borne by a third person without the
in case funeral expenses are
to give support to the
knowledge of those relatives who are obliged
claim reimbursement from
deceased. Here, the third person may

8Art.2159, par. 2, NCC.

8°Art. 2160, NCC.
901d.

9Art.2157, NCC. Family Code,Art.

counterpart provision in the
Art. 2164, NCC. See also the
206.
20 OBLIGATIONS & CONTRACTs Art. 1180

of Mellon Bank, N.A. v. Magsino." In that case, Dolores Ventosa

requested the transfer of US$1,000 from the First National Bank
of Moundsville, West Virginin, U.S.A. to Victoria Javier in Manila
through the Prudential Bank.Accordingly, the First National Bank
requosted Mellon Bank to effect the transfer. Unfortunately and by
reason of mistake, the wire sent by Mellon Bank to Manufacturers
Hanover Bank, acorrespondent bank of Prudential Bank,indicated
the amount transferred as "US$1,000,000" instead of US$1,000.
Hence, Manufacturers Hanover Bank transferred US$1,000,000
less bank charges to the Prudential Bank for the account of Victoria
Javier. Here, the erroneous remittance by Mellon Bank to Victoria
Javier created a creditor-debtor relationship between the two, with
the former as creditor and the latter as the debtor, and the source
of the obligation of the latter to return the excess remittance is the
quasi-contract of solutio indebiti.

The recipient of the payment is, however, exempt from the

obligation to restore if the following requisites are present: (1)
he believed in good faith that the payment was being made of a
legitimate and subsisting claim; and(2)he destroyed the document,
or allowed the action toprescribe, or gave up the pledges, orcancelled
the guaranties for his right." In such a case, the one who paid unduly
may proceed only against the true debtor or the guarantors with
regard to whom the action is still effective.This situation provides
for some kind of legal subrogation but which, in most cases, may
prove illusory as when the action against the true debtor and his
sureties has lapsed.

Aside from the obligation to return the thing delivered by

mistake, the debtor, should he acted in bad faith in accepting the
undue payment, shall likewise be liable to pay legal interest if a sum
of money is involved, or shall be liable for fruits received or which
should have been received (by the creditor) if the thing produces
fruits," In addition, the debtor shall likewise be answerable for any
loss or impairment of the thing from any cause, and for damages
to the person who delivered the thing (the ereditor), until it is

BG.R. No. 71479,Oct. 18, 1990,190 SCRA 633. Note, however,that the issue
in the case was not yet the liability of the recipient of the erroneous payment but
some preliminary matters.
MArt.2162,NCC.
81d.
Sig Castan 416.
8Art.2159,par. 1, NCC.
Art. 1160 Title
OBLIGATIONS 19

I.
Chapter1
GENERAL PROVISIONS
Now, let us look into the
basic difference between the two
concepts. Jurisprudence*® says that in
order for an accion in rem
verso to prosper, the following essential
elements must be present:
(1) that the defendant has been
enriched; (2)that the plaintiff has
suffereda loss; (3)that the enrichment of the
defendant is without
just or legal ground; and (4) that the plaintiff
has no other action
based on contract, quasi-contract, crime or quasi-delict. As such,
an accion in remn verso is considered merely an auxiliary action,
available only when there is no other remedy
on contract, quasi
contract, crime or quasi-delict. If there is an obtainable action under
any other institution of positive law, that action must be resorted
to, and the principle rem verso will not lie. Clearly, the
of accion in
obligation of the debtor to return the undue payment in accion in
rem verso is based on law; while in solutio indebiti, the obligation of
the debtor to return the undue payment is based on quasi-contract.
Going back to solutio indebiti, it has been discussed above that
this legal institution shall only exist if the payment is by reason
of mistake. Mistake, therefore, is an essential element of solutio
indebiti. If there is mistake in the payment, the available remedy
is an action to recover the undue payment based on the principle of
solutio indebiti and the availability of this remedy on quasi-contract
shall preclude any recovery based on accion in rem verso. In other
words, in accion in rem verso, while the defendant is enriched
without just or legal ground, such enrichment must not be by reason
of any mistake in payment by the plaintiff.

[9.3] Obligation of Debtor in Solutio Indebiti

Article 2154 of the Civil Code explains the principle of solutio

indebiti. Said provision provides that 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. In such a case, a creditor

debtor relationship is created under a quasi-contract whereby the
payor becomes the creditor who then has the right to demand
the

return of payment made by mistake, and the person who has no right
to receive such payment becomes obligated
to return the same. A
the case
good example of solutio indebiti is that which happened in

80UP v. Philab Industries, Inc., 482 Phil. 693 (2004); Shinryo (Philippines)
No. 172525, Oct. 20, 2010; Land Bank of
Company, Inc. v. RRN Incorporated, G.R.
the Philippines v. Ong, supra.
8iJd.

82Siga-an v. Villanueva, G.R. No. 173227,Jan. 20, 2009,576 SCRA 696.

 18 OBLIGATIONS & CONTRACTS Art. 1160

enrich itself at the expense of taxpayers. And so, given its

essence, a claim for tax refund necessitatesonly preponderance
of evidence for its approbation like in any other ordinary civil
case. Under theTax Code itself, apparently in recognitionof the
pervasive quasi-contract principle, a claim for tax refund may
be based on the following:(a)erroneously or illegally assessed or
collected internal revenue taxes; (b)penalties imposed without
authority; and (c) any sum alleged to have been excessive or in
any manner wrongfully collected.

[9.2] Distinguished From In Rem Verso

Article 22 of the Civil Code reads:

"Art. 22. Every person who through an act or performance

by another, or by any other means, acquires or comes into
possession of something attheexpense of the latter without just
or legal ground, shall return the same to him."

The action
for recovery of what has been paid without just
cause under the above-quoted provision has been designated as an
accion in rem verso." Is it identical to an action for recovery based
on solutio indebiti?

First, let us consider their similarities. Both actions are based

on the principle of unjust enrichment
which, in turn, essentially
contemplates payment when there is no duty to pay, and the
person who receives the payment has no right to receive it." Stated
otherwise, unjust enrichment exists when a person unjustly retains
a benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice,
equity and good conscience." Therefore, there is unjust enrichment
when: (1) a person is unjustly benefited, and (2) such benefit is
derived at the expense of or with damages to another.? Without a
doubt, these elements are present in both solutio indebiti and in rem
verso.

76Frenzelv. Catito, G.R. No. 143958, July 11, 2003; Land Bank of the
Philippines Ong. G.R. No. 190755, Nov. 24,2010, 636 SCRA 266 (2010).
v.
T"Land Bank of the Philippines v. Ong, supra.
781d.

791d., see also Moreño-Leftner v. Wolf, G.R. No, 152317, Nov. 10, 2004, 441
SCRA 584.
 Title I.
1160 -OBLIGATIONS
Art. Chapter 1 17
GENERAL PROVISIONS
unjustly at the
shall
enrich himself expense of another." The said
is embodied in Article 2154 of the
Civil Code, which
principle reads:
"Art. 2154. If something isreceived
when there is no right
demand it, and it was unduly delivered Ithrough
to mistake, the
to return it arises."
obligation

It applies where: (1) a payment is made when there exists no

Linding relation between the payor, who
has no duty to pay, and
he nerson who received the payment; and (2)the payment is made
h mistake, and not through liberality or some other cause,1 It
ispresumed 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 cause."" As a rule, the
mistake committed must be one of fact because "ignoranceofthelaw
excuses no one from compliance therewith."s By way of exception,
however, "payment by reason of a
mistake in the construction or
applicationofa doubtful or difficult question oflaw may come within
the scope of (solutio indebiti),"« In one case," the Supreme Court
ruled
-
The dynamic of erroneous payment of tax fits toa tee the
prototypic quasi-contract, solutio indebiti, which covers not
only mistake in fact but also mistake in law. The Government
is not exempt from the application
of solutio indebiti. Indeed,

the taxpayer expects fair dealing from the Government, and

the latter has the duty to refund without any unreasonable
delay what it has erroneously collected. If the State expects its
taxpayers to observe fairnessand honesty in paying their
taxes,

it must hold itselfagainstthe same standard in refunding

excess

(or erroneous) payments of such taxes. It should not unjustly

Andres v. Manu
°Genova v. De Castro, G.R. No. 132076,July 22, 2003, citing
177 SCRA and Ramie Textiles,
facturers Hanover & Trust Corporation,
618 (1989);

Inc. v. Mathay, Sr., G.R. No. L-32364,April 30, 1979.

BPI v. Sarmiento,484 SCRA
"Siga-anv. Villanueva, 576 SCRA 696 (2009):
441 SCRA 584, 591 (2004): Genova v. De Castro,
261 (2006); Moreno-Lentferv. Wolff,
Jan. 31,
of Saudi Arabia v. CA, G.R. No. 124267,
Supra; National Commercial Bank
Corp.v. CA, 274 SCRA 597 (1997); PNB v.
Z003; Power Commercial and Industrial
CA,G.R. No. 97995,Jan. 21,1993.
7Art. 2163,NCC.
73Art. 3, NCC.
7"Art. 2155,NCC.
v. Fortune Tobacco Corp., G.R. Nos.
°Commissioner of Internal Revenue
167274-75, July 21,2008.
16 OBLIGATIONS & CONTRACTS Art, 1160

2) Ifthe management had for its purpose the prevention of

an imminent and manifest loss, although no benefit may
have been derived;""
3) Even the owner did not derive any benefit and there has
if

been no imminent and manifest danger to the property

in good
or business, provided that the gestor has acted
faith and the property or business is intact, ready to be
returned to the owner."

It clear from the foregoing that our concept of negotiorum

is

gestio is not limited to instances where benefit has been received

by the owner or where the property or business is in imminent and
manifest danger. While the primary objective of this legal institution
is the prevention of unjust enrichment on the
part of the owner at

the expense of the gestor, an idea which thereby connotes receipt

of benefit by the former, it must be emphasized, however, that the
existence of such beneit is not an essential element of negotiorum
gestio. Such conclusion is clearly supported by the provision of
Article 2151 of the Civil Code which allows the gestor to demand
reimbursement from the owner even if no benefit has been derived
by the latter or even when there is no imminentand manifest danger
to the property or business. What is essential in negotiorum gestio,
however, is that the gestor must have acted in good faith. This is
clear from the provisions of Articles 2150and 2151 of the Civil Code.

[8.4] ExtinguishmentofNegotiorum Gestio

Thejuridical relationof negotiorum gestio isextinguished by any
of the following modes: (1) repudiation of the officious management
by the owner; (2) putting an end to such officious management by
the owner; (3) death, civil interdiction,insanity or insolvency of the
owner or of the gestor; or (4) withdrawal from the management by
the gestor, but without prejudice to his liability for damages should
the ownersuffers damage.9

S9. Solutio Indebiti

[9.1] Concept and Requisites

Solutio indebiti is another quasi-contract dating back to the
ancient Roman days, based on the ancient principle that no one

6TArt. 2150,par. 2, NCC.

6Art.2151,NCC.
PArt. 2163,NCC.
 Il60 Title I. 16
Art. OBLIGATIONS
Chapter 1
GENERAL, PROVISIONS

ails to return the property or business after demand by the owner:

) assumes the imanagement in bad faith; (5) is manifestly unfit
to carry on the management, eXcept when the
Bame was Assumed
te save the property or busines8s from imminent danger: or (6)
nrevents, by his intervention, a more competent person from taking
un the management,except when the same was assumed to save the
property or business from imnminent danger,1

In case the gestorhas entered into contracts with third persons

in the performance of his duties as such, he is the one personally
liable to the third persons with whom he dealt with, even though he

acted in the name of the owner. As a consequence, there shall be

no right of action between the owner and third persons in relation
to said contracts." But this rule shall not apply if: (a)the owner has
ratifed the management,either expressly or tacitly;or (b)when the
contract refers to things pertaining to the owner of the business.
In the latter two cases, the owner then becomes directly
liable to

third persons with whom the gestor has dealt with in relation
to
a
such contracts. In these cases, there shall now be right of action

between the owner and third persons in relation to the contract.4

Note, however, that in case of ratification of the management
of

the business, the effects of an express agency will be produced,

In short, the
even if the business may not have been successful.«5
will cease to be that
relationship between the gestor and the owner
of negotiorum gestio, but will become contractual in nature.

[b.] On the part of the owner

or property
In negotiorum gestio, the owner of the business
incurred in his
becomes liable to the gestor for: (a) obligations
expenses; and (c) damages suffered
interest;(b)necessary and useful
of his duties, although the officious
by the gestor in the performance
ratified, in any of the
management may not have been expressly
following situations
of the officious
If theowner enjoys the advantages
management;

0Art. 2147,NCC.
6lArt. 2148, NCC.
62Art. 2152,NCC.
63Jd.
4Id.
86Art. 2149,NCC.
66Art. 2150, par. 1, NCC.
 14 OBLIGATIONS & CONTRACTS Art. 1160

[8.3] Obligations Created in Negotiorum Gestio

[a.] On the part of the officious manager or
gestor

Once the gestor intervenes. he cannot just quit and abandon

the property or the business. The law requires him to continue
with the agency or management until the termination of the
affair and its incidents or until the owner appears and substitutes
him in such management. But the gestor may only require the
owner to substitute him if the latter in a position to do 8o," In
the performance of his duties, the gestor is obliged to observe the
diligence of a good father of a family. If the owner suffers damage by
reason of his fault or negligence, he is liable to pay damages to the
owner.4 Hence, if the gestor abandons the property or the business
after assuming its management, he becomes liable to the owner
should the latter suffers damage.The courts may, however, increase
or moderate the indemnity according to the circumstances of each
case,s5

In the performance of his duties, the gestor may delegate to

another person all or some of his duties but he shall remain liable
to the owner for the acts of the delegate. But the direct liability
of

the gestor to the owner for the acts of the delegate does not prevent
the owner from pursuing an action directly against the delegate.7
In case there will be two or more gestors, their responsibility to the
owner shall be solidary, unless the management was assumed to
save the thing or business from imminent danger,® in which case
the liabilityshall be merely joint.

Ordinarily, the gestor is not liable for any loss or damage to the
property or business by reason of fortuitous event for the rule is
that

no person shall be responsible for a fortuitous event, But in the

following situations, he becomes iable any fortuitous event if he:
for
(1)undertakes risky operations which the owner was not accustomed
to embark upon; (2)prefers his own interest to that of the owner; (3)

$2Art. 2144, par. 1, NCC.

59Id.

5Art. 2145,NCC.
66Id.

56Art. 2146, par. 1, NCC.

57Id.

S$Art. 2146, par. 2, NCC.

B0Art. 1174,NCC.
 Art. 1160 Title I.
OBLIGATIONS 13
Chapter 1
GENERAL, PROVISIONS
takes charge of the agency or
management of a certain business or
property which has not been
abandoned nor neglected, the juridical
Pelation of negotiorum
gestio does not arise. In
such situation, if
the manager acts without authority
from the owner and enters
into contracts with third
persons relating to the owner's property
or business, the provisions of Articles
1317, 1403, No. 1, and 1404
regarding unauthorized contracts shall govern.
This is clear from
the provisions of subparagraph (1) of paragraph 1
of Article 2144,
which provides:

"Art. 2144. xXx. This juridicalrelation does not arise in

either of these instances:

(1) When the property or business is not neglected or

abandoned;

In the first case, the provisions of Articles1317, 1403, No.

1, and 1404 regarding unauthorized contracts shall govern."

In order for the juridical relation of negotiorum gestio to arise,

it is necessary, however, that the gestor must have acted in good

faith. Meaning, he must have acted for another out of a sense of

duty to render assistance to those in need and not for his own sake
or his own interests. Negotiorum gestio thus connotes an idea of
neighborliness or kindliness. In the words of our Court, the actor
or gestor must be inspired by the beneficent idea of averting losses
and damages to the owner or to the interested party through the
abandonment of the things that belong to him or of the business in
which he may be interested, that is, that the administrator (gestor)
shall not undertake the matter in the hope of obtaining profit or
with the avaricious idea of gain."" But in order for the gestor to be
entitled to reimbursement, it is also important that he must have
acted on behalf of the owner but with the intention of demanding
indemnification for expenses he incurred. 50 Otherwise stated, his
liberality (oranimus
acts must not be by way of gifts or out of sheer
donandi),9

49Sison v. Balgos, 34 Phil. 885 (1916).

at p. 20, citing Rabel, Negotiorum Alienum,
293-296.
UStoljar,
5IId., atp. 19.
 OBLIGATIONS & CONTRACTS Art. 1160
12

(8.2] Requisites of Negotiorum Gestio

following
In order for this juridical relation to arise, the
the officious mana ger
requisites must concur: (1) a person, called
or management of the
or gestor, voluntarily assumes the agency
business or property of another;" (2) the property
or business ia
from the
neglected or abandoned;" (3) there is no authorization
owner, either expressly or impliedly:" and (4) the assumption of
agency or management is done in good faith.
of
The concept of negotiorum gestio bears similarity with that
implied agency, except that the latter relationship iscontractual in
nature, there being present the element of consent, although given
tacitly. In negotiorum gestio, it is necessary that thegestor must not
have been tacitly authorized by the owner; otherwise, what we have
is a case of an implied agency and not that of negotiorum gestio. Itis

therefore necessary that the owner must not have been aware of the
gestor's intervention. If the owner knew of the gestor's intervention
and yet he any objection, the relationship of the
did not interpose
parties is to be governed by an implied contract of agency and not
by the quasi-contract of negotiorum gestio. This is clear from the
provisions of subparagraph (2)of paragraph 1 ofArticle 2144, which
provides:

"Art. 2144. XXX. This juridicalrelation does not arise in

either of theseinstances:

(2) Ifin factthe manager has been

tacitly authorized by
the owner.

XXX
In the second case, the rules on agency in Title X of this
Book shall be applicable."

As earlier discussed, the concept of

negotiorum gestio explicitly
covers abandoned or neglected property or
business. It follows
therefore that in negotiorum
gestio, the owner of the
business is physically absent and property or
has not appointed an agent
representative to administer his or
concerns. So, if one voluntarily

46Art. 2144,NCC.
"Art. 2144(1), NCC.
48Art. 2144(2),
NCC.
Art. 1160 Title I. OBLIGATIONS 11
Chapter
GENERAL PROVISIONS
There being no express consent, in the sense of a meeting of minds
between the parties, there is no contract to speak of. However, in
view of the peculiar circumstances or factual environment, consent
is presumed to the end that a recipient of benefits or favors resulting
from lawful, voluntary and unilateral acts of another may not be
unjustly enriched at the expense of another. u

§8. Negotiorum Gestio

[8.1] Concept
The concept of negotiorum gestio is discussed in Article 2144
of the Civil Code. Under said article, negotiorum gestio is defined
as form of quasi-contract which arises when a person, called the
officious manager or gestor, voluntarily takes charge of the agency
or management of the business or property of another which has
been neglected or abandoned, without any power from the latter.

This legal institution is of Roman origin and it was developed

primarily to govern the management of an absent person's affairs. In
its origin, negotiorum gestio was initially concerned with the
idea of

intervention to represent an absent friend, although the concept later

broadens out to include interventions in other affairs." According to
the Institutes of Justinian, the chief element of negotiorum gestio
is the principal's absence or inability to appoint a proper agent.
Only this, Justinian tells us, justifiesa man to come forward and to
manage the business of another without any commission to do so,
the other knowing nothing of what has taken place. For, continues
an
Justinian, unless one can intervene and lay upon the other
affairs would
obligation at least to reimburse him, the principal's
be entirely neglected during his absence, as no one would be likely
an action for the outlays
to attend to them without being allowed
still retains
one might incur.4 Our own concept of negotiorum gestio
the requirement that the owner of the business or property must
either be physically absent or has failed to appoint
a proper agent to
explicitly
administer the business or property because the concept
covers abandoned or neglected property
or business.

217 SCRA 347,354 (1993).

PNB v. CA and B.P. Mata and Co., Inc.,

of Comparative Law,
Negotiorum Gestio, International Encyclopedia
"Stoljar,
Vol. X, 1984,p.
Schulz,F., Roman Law, 621.
19, citing

citing Just., Institutes 3.27.1.

*"Id.,
see also Art. 2144(1), NCC.
Torres, Jr. v. CA, 278 SCRA 793, 814 (1997);
 10
OBLIGATIONS & CONTRACTS
Art.1180

2) It arisesfrom a voluntary act. This characteristie dies:.

guishes quasi-contract from culpa criminall
and culpa
miliana which are both committed through negligenee aq-

It arises from a
unilateral act. This characteristic distin
guishes quasi-contract from contract, which requires con
sent or meeting of the minds of the contracting parties

While there is no consent in a quasi-contract, the same is based

on the presumed will or intent of the obligor dictated by equity and
by the principles of absolute justice. Some of these principles are.
(1) It is presumed that a person agrees to that which will beneft
him;(2) Nobody wants to enrich himself unjustly at the expense of
another; and (3) We must do unto others what we want them to do
unto us under the same circumstances,

[7.2] Forms of Quasi-Contract

Originally under the Spanish Civil Code,0 there were only
two kinds of quasi-contracts: negotiorum gestio and solutio indebiti.
But the Code Commission, mindful of the position of the eminent
Spanish jurist, Manresa, that "the number of quasi-contracts may
be indefinite," added Section 3 entitled "Other Quasi-Contracts."
Hence, aside from negotiorum gestio and solutio indebiti, there are
other quasi-contracts enumerated in Articles 2164 up to 2175 of the
New Civil Code. But the enumeration of quasi-contracts in the Civil
Code is not exclusive. This is clear from the provisions of Article
2148 of the Civil Code which provides:

"Art. 2143. The provisions for quasi-contracts in this

Chapter do not exclude other quasi-contractswhich may come
within the purview of the preceding article."

Indubitably, the Civil Code does not confine itself exclusively

tothe quasi-contracts enumerated from Articles 2144 to 2175but is
open to the possibility that, absent a pre-existing relationship, there
being neither crime nor quasi-delict, a quasi-contractual relation
may be forced upon the parties toavoid a case ofunjust enrichment.

Traders Royal Bank Employees Union-Independentv. NLRC, supra,citing

V Tolentino, Civil Code of the Philippines, 1992 Ed., p. 575.
The Old Civil Code which was in force in the Philippines prior to the New
Civil Code.

PNB v. CA and B.P. Mata and Co., Inc., 217 SCRA 347,354 (1993).
"Id., at pp. 354-355, citingReport of the Code Commission, pp. 159-160.
Art. 1160 Title I. OBLIGATIONS
Chapter1
GENERAL PROVISIONS
enforceable contract. This principle will be
disCU8sed extensively in
Part Two of this Book (Contracta).

C. QUASI-cONTRACT

Art. 1160. Obligations derived from

quasi-contracts shall be
subject to the provisions of Chapter 1, Title XVIl, of this
Book. (n)

$7. Obligations Arising From Quasicontracts (Obligatio Ex

Cuasi Contractu)

[7.1] Concept of Quasi-Contract

The concept of quasi-contract is defined in Article 2142 of the
Civil Code, as follows:

"Art. 2142. Certain lawful,voluntary and unilateral acts

give rise to thejuridical relation of quasi-contractto theendthat
no one shallbe unjustly enriched or benefited at theexpense of
another."

The obligation is not contractual in nature in the absence

of the element of consent, whether express or implied. Neither is
the obligation based on delict or quasi-delict,if the actwhich gives
rise to it is not unlawful. In those instances where there is no pre

existing contractual relation, and there being neither a delict nor a

quasi-delict, a juridical relation known as quasi-contract may arise
between the parties to avoid a case of unjust enrichment, Indeed,
one of the sources of extra-contractual obligations found in our Civil
Code is the quasi-contract premised on the Romanmaxim nemo cum
alterius detrimento locupletari protest (no man shall enrich himself
atthe expense ofanother)." As embodied in our law," 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." Its characteristics are the
following:

1) It arises from a lawful act. This characteristic distin

guishes quasi-contract from delict and quasi-delict which

are both products of unlawful acts.

3*Report of the Code Commission, p. 60.

30Traders Royal Bank Employees Union-Independentv. NLRC, 269SCRA 733,
748 (1997).
36Art. 2142,NCC.

s7Traders Royal Bank Employees Union-Independentv. NLRC, supra:

 OBLIGATIONS & CONTRACTS Art.
1159

demandable.* These obligations are regulated: (1) by the precente

of the law which establishes them;and (2) as to what has not bee

foreseen, by the provisions of Book IV of the Civil Code,

B.CONTRACTS

Art. 1159. Obligations arising from contracts have the force

of law between the contracting parties and should be complied
with in good faith.

§6. Obligations Arising From Contracts (Obligatio Ex Contractu)

A contract as "a meeting of minds between two
is defined
persons whereby one binds himself, with respect to the
other, to give
something or to render some service."s The definition lays
stress on
the meeting of the minds of the
contracting parties, for consent
is the essence of a contract. It is
the element of consent which
distinguishes contracts from the other
sources of obligations. To
illustrate, a contract may also exist by
implication," An implied
contract is defined as that which arises
where the intention of the
parties is not expressed, but an
agreement in fact, creating an
obligation, is implied or presumed
from their acts, or where there
are circumstances which, according to the
ordinary course of dealing
and the common understanding of men,
show a mutual intent to
contract." But this implied contract
differs from quasi-contract. The
former still requires consent of the
parties, while the latter is not
predicated on consent, being a product of a
unilateral act.
Obligations arising from contracts have the force of law
between the contracting parties and
should be complied with in good
faith." In contract law, this
principle is known as the
obligatory
force of contracts, which presupposes the
existence ofa valid and

26Td., second sentence.

2"Id.

1305,NCC.
2BArt.

29Lustanv. CA,266 SCRA 663,

670 (1997).
30Jalandre v. Custodio, 92 Phil. 1063,Unreported.
31TV Tolentino, Civil
Code of the Philippines, 1991 Ed., p.
Azur, 76 Phil. 493. 406, citing Arroyo v.
SSwedish East Asia Co. v.
Manila Port Service, 25 SCRA 639
Inc. v. Vulcan Manufacturing Co., (1968); Pacmac,
CV-57311, August 12, 1985.
"Art. 1159,NCC.
Art. 1158
Title I.
OBLIGATiONS 7
Chapter|
GENERAL PROVISIONS
are demandable, and shall
beregulated by the precepts of the
which establishes them; law
and as to what has not been foreseen,by
the provisions of this Book.
(1090)

$5. Obligations Arising From

Law (Obligatio Ex Logo)
Law is a separate source of obligation
based on Article 1157
of the Civil Code. But
how does it differ from the other
sources of
obligations? According to Manresa,
when the law does not merely
limit itself to enforcing compliance
of an obligation originating from
the actsof the parties, but by itself
establishes the obligation,making
the act of the party or parties only a moment, or
determining the
occasion in order that the obligation contained in
the legal precept
may begin to be demandable, then the law is said to be the origin
of the obligation. However, when the law
merely guarantees the
compliance and demandability of the obligation, giving form and
security to the creative force of the actwhich engenders it, or merely
expresses that such obligation is derived from a contract or an
offense, or that it is an essential of the same, then the law is not the
origin of those obligations." In the latter,the law merely regulates
or declares the existenceof such obligations.»

Examples of obligations arising from law are the following: (1)

the obligation of taxpayers to pay taxes in accordance with existing
tax statutes; and (2) the obligation of the spouses to render mutual
help and support in accordance with the provisions of the Family
CodeofthePhilippines," In theseexamples, it is the law that creates
the obligation and sanctions it. In contracts, quasi-contracts, delicts
and quasi-delicts, however, the source of the obligation is the act or
acts of the parties, which may either be unilateral (asin the cases of
quasi-contracts, delicts and quasi-delicts) or bilateral(as in the case
of contracts), and the law merely recognizes its existence, regulates
it and sanctions the same.
Obligations derived from law are not presumed," Hence, only
those expressly determined in the Civil Code or in special laws are

221d.

231d.

24Arts. 68 and 195(1), FC.

25Art. 1158,lst sentence, NCC.
 OBLIGATIONS & CONTRACTS Art. 118A

of bligations
$4. Sources
obligations enumerated
the above in
There are five sources
of

the enumerntion is exclusive, Therefore, an

article and
obligation

imposed on a person, and the corresponding right granted to anot her

In MaLei
must be rooted in at least one of these five sources."
Stock Exchange, Inc. v. Campos," for example, the Court held
that apractice or custom is not a source of a legally demandable or
enforceable right, as a rule.

The foregoing sources may be classifiedgenerally as emanating

in one hand, from law; on the other hand, as emanating from private
acts, to which the other four belong. Those sources of obligations
emanating from private acts may either arise from licit acts, such
as contracts and quasi-contracts; or from illicit acts, such as delicts
and quasi-delicts. Of these four sources, contracts are the result
of bilateral actions of the parties (creditor and debtor) because it
requires consent while the three other sources (quasi-contracts,
delicts and quasi-delicts) are products of the unilateral action of the
debtor.

Somewriters are of the opinion that all obligations ariseeither

from contracts or from law. Planiol, for example, supports this
view. To him, those obligations that are said to be arising from
quasi-contracts, delicts and quasi-delicts are really imposed by
law. Tolentino does not, however, agree to this view. According to
Tolentino, there is a difference between obligations arising purely
from law, and those arising from other acts not constituting contract.
In the former, it is the law which creates the obligation in view of the
organization of juridical institutions and the social interest; while
the latter, there is always some individual act which gives rise to
in

the obligation, and the law intervenesonly to provide a sanction or

prevent an injustice."0

A. LAW

Art. 1158. Obligations derived from law are not presumed.

Only those expressly determined in this Code or in special laws

1TMakati Stock Exchange,Inc. v. Campos, 585 SCRA 120 (2009).

18Supra.
191 Bonet 453-454, cited in IV Tolentino, Civil Code of the Philippines, 1991
Ed., p. 61.
3°TV Tolentino, Civil Code of the Philippines, 1991 Ed., p. 61,citing 3 Salvat 25.
Art. 1157 Title I.-OBLIGATIONS 5
Chapter 1
GENERAL PROVISIONS

the obligee (ereditor) may choose either: (1) to exact fulfillment of

the prestation from the obligor (debtor), in which case, the latter
will be bound to fulAIl it: (2)to condone the obligation,in which case,

the debtor may simply accept the condonation and no longer insist
in performing the prestation; or (3) to remain inactive for a certain

period of time sufficientenough to extinguish the obligation by way

of prescription, in which case, the debtor may respond by likewise
remaining inactive and allowing the period of prescription to run.

From the point of view of the active subject, the obligation is a

right or credit; from that of the passive subject, it is a debt.

§3. Legal Sanctions

The term juridical necessity in Article 1156 of the Civil Code
implies the existence of legal sanctions that may be imposed upon
the obligor (debtor) in case of breach of the obligation. Stated
otherwise, the obligee (ereditor)may seek appropriate reliefs from
the courts in case of such breach. These reliefs or remedies will be
discussed extensively in subsequent portions of this Book. These
legal sanctions do not include, however, the imprisonment of the
debtor for mere non-payment of a debt or non-performance of an
obligation. While there was a time in history when slavery was an
accepted form of sanction for non-payment of indebtedness, this is
no longer true in the modern world. Most of civilized societies have
already prohibited such primitive practice. Our Constitution, in
particular, prohibits the imprisonment of a person by reason of debt.
Section 3
of Article III of the 1987 Philippine Constitution provides:
"Injo person shall be imprisoned for debt or non-payment of apoll
tax"

CHAPTER 2: SoURCES OF OBLIGATIONS

Art. 1157. Obligations arisefrom:

(1) Law;
(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts. (1089a)
 OBLIGATIONS & CONTRACTS Art. 1156

doing or not doing as its prestation," it must be said that in the

development of the concept of obligation, it has been agreed by most
authors that a distinction should be made between giving and doing.
The fundamental distinction between the two is that in the case
of obligations to give, compliance with the obligation is intimately
connected with the thing to be delivered. Hence, obligations to give
are also called real obligations. In obligations to do, on the other
hand, compliance with the obligation is incumbent upon the person
obliged. Hence, obligations to do are also referred to as positive
personal obligations. !s The distinction becomes important for
purposes of determining the remedies available to the obligee in
case of breach of the obligation. In obligations to give, the obligee
may avail of the remedy of compelling the obligor to give or deliver
what is due. However, in obligations to do, the obligor may not be
compelled, against his will, to perform the act that he is bound to

involuntary servitude
less,!4
-
render. The latter may not be resorted to because it amounts to
an act prohibited by the Constitution no

While some authors consider that of "not giving"something as

conduct
a separate form of prestation, it is clear that this particular
is already included in that of "not doing." both being negative
obligations.

[2.3] Active and Passive Subjects

In the juridical relation known as obligation, it is plain that

two parties are involved the obligee (creditor) and the obligor
while
(debtor). The former has the right to demand the prestation,
the latter is the one bound to perform the same.

The obligee (creditor) is denominated as the active subject

because he is the one who has the power to demand the performance
of the prestation. In effect, the action of the obligor (debtor) is
the
dependent upon the action of the obligee (creditor). Hence,
obligor (debtor) is referred to as the passive subject.
To illustrate,

1For example, an has also been defined as "a legal bond between
obligation
to another,the
two or more persons,by which one person,the debtor, is held liable
or not doing something at the
creditor, to perform a prestation consisting of doing
risk of legal sanction." Baudouin, J.-L., P.G. Jobin, and N. Vezina, Les Obligations,
6th Ed., at 19.
16See IV Francisco, Civil Code of the Philippines, p. 5.
IéSec. 18(2), Art. II, 1987 Philippine Constitution.
Art. 1156 3
Title I.OBLIGATIONS
Chapterl
GENERAL, PROVISIONS
2. Object or prestation;
3 Active subject, also known as the obligee or creditor; and
4. Passive subject, also known as the obligor or debtor.

[2.1] Juridical Tie or Vinculum Juris

Vinculum juris is a Roman law term which means "legal
relationship or tie."a The vinculum juris or juridical tie is that which
essentially binds the parties (the passive subject and the active
subject) to the object of the obligation (or prestation), by virtue of
which the debtor is bound to the a determinate
creditor to fulfill

prestation. As such, this vinculum juris is the efficient cause or the

very reason for the existence of the obligation, and it arises from
the various sources of obligations enumerated in Article 1157 of the
New Civil Code (law, contracts, quasi-contracts, delict and quasi
delicts).To illustrate, a pedestrian was hit and injured by a vehicle
because the driver acted negligently. Prior to the accident,there was
no relationship existing between the pedestrian and the negligent
driver but, by reason of such accident, a legal relationship (or what
we call vinculum juris) is established between the two, whereby the
latter incurs the obligation to indemnify the former forthe resulting
damage. This is an example of an obligation arising from quasi
delict, which will be discussed in subsequent portions of this Book.

[2.2] Object of the Obligation

Theobject of every obligation is always a prestation, which
is defined as the particular conduct required to be observed by
the
obligor (debtor)and which can be demanded by theobligee (ereditor).
The object of the obligation must not be confused with the object
or subject matter of the contract in those obligations arising from
contracts. In the latter, its object or subject matter may either be a

thing, a right, or a service;" but in the case of the former, its object
is always a particular conduct of the obligor called the "prestation."
From the definition of obligation in Article 1156 of the Civil

Code, a prestation may consist either in giving, doing or not doing.

While there are definitions of obligation which mention only

"Ang Yu Asuncion v. CA, 238SCRA 602 (1994).

12Chinese Chamber of Commerce v. Pua Te Ching, 16 Phil. 409 (1910).
1See Art. 1347,NCC.
 2 OBLIGATIONS & CONTRACTS Art. 1156

The New Civil Code of the Philippines defines obligation as a

juridical necessity to give, do or not to do."Quite obviously, said
to

definition was taken from Sanchez Roman. The same,however, has

been criticized as being incomplete inasmuch as it views the concept
only from the debt side. It was argued that the debt cannot exist
without a credit and that the credit is an asset in the patrimony
of the creditor just as the debt is a liability of the obligor.* Hence,
the eminent Filipino CivilistJustice J.B.L. Reyes suggested a more
complete definition given by Arias Ramos, as follows:

A juridical relation whereby a person (called the creditor)

may demand from another (called the debtor) the observance
of a determinate conduct, and in case of breach, may obtain
satisfactionfrom the assets of the latter."

In response to the foregoing criticism, the Code Commission

explains that when Article 1156 speaks of a juridical necessity to
give,to do or not to do, there are two persons involved, namely, the
one who renders the obligation, and the one to whom it is rendered.
Be that as it may, the foregoing definitions
do not at all present
conflicting views but only differences in the aspects under which
each writer views "obligation." Indeed, we cannot talk of the concept
of "obligation" without the credit and the debt for they are but the
two distinct aspects of the unitary concept of obligation,1" Or, to use
an analogy, these are but the two sides of a coin. Stated otherwise,
the term "obligation" encompasses both sides of the equation the
debt and the credit, or the duty of the debtor and the right of the
creditor.

$2. Essential Elements of Obligation

Every obligation has four essential elements:

1. A juridical tie (or vinculum juris);

'Art. 1156,NCC.
Justice J.B.L. Reyes, Observationson the New Civil Code, XVI LJ., 47.
"Id.

"Makati Stock Exchange, Inc. v. Campos, 585

SCRA 120 (2009).
Memorandum of the Code Commission, March 8,1951.
See 8 Manresa, 13-14.
10[v Tolentino, Civil Code of the Philippines, 1991 Ed., p. 56, citing 2-I Ennec
cerus, Kipp and Wolf,8-9.
 BOOK IV
OBLIGATIONS AND CONTRACTS
Title I. -OBLIGATIONS
Chapter 1

GENERAL PROVISIONS

CHAPTER 1: CONCEPT AND ELEMENTS

ARTICLE 1156. An obligation is a juridical necessity to give,

to do or not to do. (n)

$1. Concept of Obligation

Obligation has been defined in various ways depending on
the aspect in which the writer views its nature. The Institutes of
Justinian, for example, emphasizes on the vinculum or tie between
the parties and defines the concept as a
tie of law which binds
us, according to the rules of our civil law, to render something."
Manresa, on the other hand, defines obligation from the viewpoint
of the legal relation. He defines it as 'a legal relation between one
person and another, who is bound to the fulfllment of a prestation
which the former may demand of him." The definition given by
Sanchez Roman,however, emphasizes on the duty of the obligor
and the necessity of his compliance. He defines it as "the juridical
necessity to comply with a prestation.""

'Institutes of Justinian, 2, 13.The Institutes of Justinian (Latin: Institutiones

Justinian) is a unit of the Corpus Juris Civilis, the sixth century codification of
Roman law ordered by the Byzantineemperor Justinian I.
28 Manresa 18.
4 Sanchez Roman 53.

i
 CONTENTS
Dedication..

Preface

BOOK IV
OBLIGATIONS AND CONTRACTS
Title IOBLIGATIONS

Chapters 1-3
(General Provisions, Nature and Effect of Obligations,
& Different Kinds ofObligations)
Chapter 1: Concept and Elements
(Art. 1156, NCC).. 1

Chapter 2: Sources of Obligations

(Arts. 1157-1162, NCC) 5
Chapter 3: Civil and Natural Obligations
(Arts. 1423-1430; 1956 & 1960, NCC). 39
Chapter 4: Real and Personal Obligations
(Arts. 1163-1168, NCC) .......

Chapter 5: Breach of Obligation

(Arts. 1169-1178, NCC)

Chapter 6: Pureand Conditional Obligations

(Arts. 1179-1192, NCC) 87
Chapter 7:Obligations With A Term or Period
(Arts. 1193-1198, NCC) 131

Chapter 8:Alternative and Facultative Obligations

(Arts.1199-1206, NCC) ... 144

Chapter 9:Joint and Solidary Obligations

(Arts. 1207-1222, NCC) 155

Chapter 10: Divisible and Indivisible Obligations

(Arts.1223-1225, NCC) 207

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