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Innovative « Competent « Responsi Regulatory Framework for Business Transactions 1, Definition of Obligation: Article 1156 of the Civil Code defines an obligation as a juridical necessity to give, to do or not to do. Civil obligation may be defined as the juridical relation, created by virtue of certain fats, between two or more persons, whereby one of them, known aS the creditor or oblige, may demand of the other, known as the debtor or obligator, a definite Prestation. It is also a juridical relation whereby a person called the creditor may demand from another person called the debtor the observance of 2 determinate conduct, and In case of breach, may obtain satisfaction from the assets of the later. 2. Essential Elements or Requisites of an Obligation (Civil Obligation) 2. Active subject a.k.a. obligee or creditor refers to the party who has the right or Power to demand the performance of prestation from the obligor or debtor, b. Passive subject a. necessity of adjusting the obligatory te. ‘obligor or debtor refers to the party who has the juridical is conduct to the demand of the creditar or abligee pursuant to © Object or prestation refers tothe promise or particular conduct to be performed in the fulfilment or rendition of the obligation. Object or prestation may consist of giving, doing or not coing a thing |. Requisites of an Object or Prestation of an Obligation 1, It must be possible, physically and jurcically. 2 Te must be determinate, or, at least, determinable according to pre- established elements or criteria 3, Te must have possible equivalent in money. 4. Efficient cause a.k.a. vinculum refers tothe juridical te which binds the parties to the obligation. i. Examples of juridical tie or vinculum or efficient cause 1. Relation establishes by law 2. Relation established by contract 3. Relation established by quasi-contract such as (1) negotiorum gestio and (2) solutio indebit 4. Relation established quas-delict or culpa aquliania or tort 5, Relation established by crime or delct 3. Types of Civil Obligation based on the definition under the Civil Code 2. Positive obligation refers to an obligation which consists of giving or doing something, |L_‘Types of Positive obligation 1, Real obligation (Civil Obligation to Give) refers to a positive obligation which consists of the delivery or giving of personal or real abject. The examples of real obligations are the obligations of the parties in a contract of sale or bart or depositor loan 2, Personal obligation (Civil Obligation to Do) refers to 2 postive ‘obligation which consists of doing a particular prestation but not delivery ‘of an abject An example of personal obligation is rendition of services, b. Negative obligation (Cvil Obligation Not to Do or Not to Give) refers to an obligation Which consists of abstaining from some act. An example of a negative obligation is the legal obligation not to commit jay walking |. Note: Delay or Defaut or Mora isnot applicable in negative obligation ICARE Accountancy Review Innovative « Competent « Responsi 4. Distinctions between Civil Obligation and Natural Obligation 1. sto binding force, Civil Obligations derive their binding force from positive law or substantive law (Civil Obligation of Parents to give support to their children under Family Code), while Natural Obligations derive their binding effect from equity and natural Justice (1) Natural Obligation of successors or helrs to pay the debts of predecessor beyond the property they inherited or (2) Cuil obligations that have already prescribed) Tl, sto enforceability, Civil Obligations can be enforced by court action or the coercive ower of public authority while the fulfilment of natural obligations cannot be ‘compelled by court action but depends exclusively upon the good conscience of the debtor. However, after voluntary fulflment by the debtor of a natural obligation, the creditor is authorize to retain what has been delivered or rendered by reason thereat TIL As to examples, the examples of Civil Obligations are: (1) Legal obligation of parents te alve support to their children under Family Code and (2) Contractual obligation of review center to provide premesk lectures to their reviewees despite cancellation of board exam while the examples of Natural Obligations are: (1) Natural Obligation of successors or heirs to pay the debts of predecessor beyond the property they inherited and (2) Unpaid civ obligations that have already prescribed, 5. Sources of civil obligation demandable in a court of law a. Law refers to the principles and regulations established in a community by some authority and applicable to its people, whether inthe form of legislation or of custom and polices recognized and enforced by judidal decision. |. Principles applicable to legal obligation ‘The obligations derived from law are never presumed 2. Only obligations expressly determined in the Civil Code or in special laws are demandeble. 3, The law cannot exist as a source of obligations, unless the acts to which its principles may be applied exis. 4. The obligations and correlative rights arising from law shall be governed ay the law by which they are created, b. Contract is a meeting of minds between two persons whereby one binds himself, with respect to the athe, to give something or to render some service. i. Principles application to contractual obligation 1. Obligations arising from contracts have the force of law between contracting partes. 2. Obligations arising from contracts should be complied with in good faith © Quasi-contract ‘5 a juridical relation which arises from certain lawful, voluntary and Unilateral act, to the end that no one may be unjustly enriched or benefited at the expense of another. Quasi-contract Is based on fairness and equitable principle of Unjust enrichment. i. Two Types of Quasi-Contracts. 1, Negotiorum Gestio refers to the voluntary management of the property or affairs of another without the knowledge or consent of the latter. |. Nature of Liability of Officious Managers In Negotiorum Gestio = The nature of lablity of offidous managers in negotrum gestio is generally soldary unless the oficous management was done under Imminent danger which wil make their obligato joint. ‘a. Apperson voluntary takes charge of the agency or management ‘of business or property of another without authority or consent ofthe later. . Astrange: gives support to a child of another person without the knowledge ofthe person obliges to give support. & Apperson saves the property of another person during fre, flood, storm or other calamity without the knowledge of the owner. 2, Solutio Indebiti refers to the juridical relation that is created when something is received when there is no right to demand it and it was unduly delivered through mistake. i. Nature of Liability of Payees in Solutio Indebi nature of lability of payees in soltioindebit is soidary. Example of Solutio Indebi ‘a. A person receives something when there Is no right to demand It fr it was unduly delivered through mistake ~The 4. Quasi-delict or culpa aquiliana or torts refers to a source of a chil obligation wherein a person by act or omission causes damage to another, there being fault oF negligence. |. Nature of Liabilty joint tortfeasors or two or more persons liable for quasi-delict - The nature of liabilty of joint tortfeasors or two ‘or more persons lable for quasi-delict is solidary. Requisites of civil Action based on Quasi-Delict or Culpa-Aquiliana or Tort 1. There is no pre-existing relation (contract) between the offender (respondent dependant) and offended parties (complainant-plantif), (However, exceptional c2ses allow fling of civil action based on. quasi-

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