The Law on Obligations and Contracts HECTOR S. DELEON ULB, University ofthe Piippines Former ASsoate Profi Fat Estar Univorty HECTOR M. DELEON, JR. AB.LLB, University of the Philippines LLM, University of Michigan Managing Parner, SyCip Salazar Hernande>&e Gatmaitan 12th EDITION 2024 “inetPhilippine Copyright, 2021 and HECTOR M. DE LEO! ISBN 978.621.04.0430.2 No portion of thin book may be copied oF repraduced in beoks, pamphlet, oallines or noten, whether printed nimeographed, ypenriten copied Iniferent elestenic devices orien eter form, or istration or sale vithout te writen permission at ther ef the nathoryexeept bint passages in bo, frtle, revi egal papers and jucal or other tfcial procastings with proper eitation ‘Any copy ofthisbook without thecoreapending umber and the signatnreef either ofthe atiorsen {thi page eithor proceeds from am eptmeto source for iain peaseslon of one who has no autherity to Slapose ofthe sane AULRIGHTS RESERVED BY THE AUTHORS No. Petey te MARIA FE MANGUERA-DE LEONPREFACE ‘This text, which is now on its twelth edition, is especially Intended for the use of commence studen's who, forthe first time, will study busines law. It ean, however, serve as a handy reference for law student, accountants, businesstren, and even law practitioners “The muthorshave endanvored to preten every aspect ofthe Jaw deal and logcaly so ta it nay be easly understood, For the convenience of the stant each cscusions preceded by an spproptateheaciog:ond show the practical application ofthe ferent legal prowsions in specie ces, rumerous examples typical of everday ie are uz, The reason for Ure law is {io given or ober intimated either in the discussion {he example to farther help the student comprehend the ratte: being explained. “Although thesequenceat the articosi followed an attempt Jus been matt collate not nly the pertinent provisions ofthe Gail Code but azo tose of ther rested statutes, th the end in view of giving the students more comprehensive grasp ofthe subjpet mater ete in ts book Anineoductontolaw hasbeen rchidedasitis necessary provide the student «beginner in the atudyof aw. a boekground Ih stodyofobigtion and contract, and other business law Curses The introduction begs with a consideration of the feneral nature of aw andthe, systematically, ends the student na gradual manner tothe main sbjec. 'ASTUDY GUIDE is provided atthe end of every Chaptes, ‘or Section where the Chapter i divided imo Sections Ithas the ‘lowing eaves: 1, The questions are designed primarily to test and farther increase the understanding by the student of theprovisions of Iw, not necessarily to prepare them forthe EPA saminaone whch vf ene pe ea the use of much space, Wile such ask peopety belongs (CPA reviewers candidates for CPA examinations wil ing thebook, with the study gude, by weason of hs intent an scope, very wsetl for purposes of review. 2 The anirers to some questions depend on the presence or absence of certain facts or circumstances which Ere not mentioned bat suhich the suident Is supposed t9 now. Thoreore, the answers must be qualified. 3. The book already contains numerous examples not only to assist the student in the proper intexpretaton of ‘he avery also to train hiea/hec in the practial application of legal provisions in spac ccumstarees ‘The problems giveninwolve nev stations to avoid @ mere repeston of any ofthe examples. 4. The numbers of the atcles when dizelly appli- cable to the questions uncer Discussions and Problems are sven a he tnd ofthe tock forthe guidance ofthe ste To help him/her determine the comrect answer in case of doubt or inability to know the answer: ‘The authors trust that this work will help the studen’s need for hook en the law om ebligations and contri Comprehensive yet simplified and understandable HECTORS. DELEON HECTOR M. DELEON, IR. February 2021 CONTENTS: INTRODUCTION TOLAW The Creal Nate oft — Mean of Law in Gener ‘cenaat Devons ef Cn Se Laur See Lay Na {ine Non La sl Stan eer ce, ‘Ghuraet i Lane Rectan Feros oa Sour {vce n Cue of Dat lntrpetnnr Aepcecn o L Oryumel salar an Compre wit Ober sne ofS) Cost Onalaton of Cour Caters of Law: Lam on (Otigatons a Conse Getd Gl Cae othe Piper ‘Chl Code Provo on Chpntne td Contacte Cohort Fesonpioe fkonredpect br met ‘onuicarioNs ‘ans.1861304 Cl Cod) Arle 155 ~ Newung of Custer: Cort Cade Dereon: Mepigetleriaaty Reefs nr be Gr ena Ress oan Ohya, Form of Othatons, ‘ide le ~ Qi in geo Rs conta Oh we Row NBsArte 1161 — Meaning of Speci Dreinne Ting Mowing ef Grwse or ndbermes Tow Sue Tage Caper fannie ater Cringe “Que id ~ Down kinds its Rg ol Ci to Fras when OatonteDeier vt Are lenge Fig ans igh Rene fp ae ge angered (mend Aegean wi “rs hd = Rr Cr i al Ovi hoe ek einas a Femi Dey wes Cet race hs = Mesnnger Aon od eens ghd Bisutaeteesee buoy ice Somme scary 8 Magoo 1 2 Gro or pees Froud Demmancable: Seta wion ane “Ave 12 — Rempennbily “Arsing ino Neience Sari onis sevens ealeethacaae mpd "Ei ia = Wenn aac Nef ove conten tao iyi Be get Te svt — Moanngo Foros Eve Frans Bot uated haw fe hopee, Rots 3 Fos bee Regatta arto betta ts Lm Co of Feiioetvee Mere n38 Ntning cfSonps ot aon Noi try Rapes vey nan Wer Tie tare ot tramp, We Eel reanyion. Wen ewes Ane 6 Do Na ‘hic itt ~ Ramcis Walae to Croan Tor be sualetnal therein sl egies ete 179 Try ih Senta = ‘narra s— omrenesr xno ‘OronucaTions ‘econ 1.—Pare and Candia OMtiaons. Arce 117) — Mew of ur Orton: Messing connate: tne Conatie Chansons 2 Caron, oo Pann dh of Cards Boras Dimschtitacns atten aeons fey Diet” Whee Osanna pepe “titi ~ Gil opeig ol Eno ae een Si Seis ———— a Caines ear naan Seal SOOT eae ps git Sante ae ons hee eae cee OES pia Ra RC “Avice 189 — Reguisiws for Applicaton of Article 118% Kinds. qoctdais Soaite Shen Siemon sented tec = MSE aa cd ty Gi Ante ante er, Sae Mee ih endnotes hele San cause Saree tests nents mses Dei cee “Seis Wk Bah asap el Bch Shay Cl ann va 3 ser By 26Sesion 3 — Obit with Pei Arce 193 ~ sesig of On gton with Pso Mei st ited rm Pad Sod Conic Dru Nar Freon ee “rite = Eis ol Los Bano pve Set arms ene = inde 96 Payee Aw Avnal of ea Basar rsd ei Re ora al hors ‘othe General Rie Comput emer Pad “hse? ~ Coun Cenaraly Wits Porerto Fi. Poids ‘econ tthe Geert Rts Ltr Whee Songer ‘Forui/Ezeation Depees Upar Wi ef Boos Peto Pek ‘itnot Change the Caan “hie nah When Olgas Lapsed ‘Stay Coe ‘Secon3.— Alera Options, Arie 199 — Kinds of Obigtin Acewding #9 OH esng ein onsaston ‘ ie tip0™ Right of Ccice 2 Hale Goer tw Bor Reftot Gael Debit Atte nn arises Cemmecnonel teeta ace rb ‘ice ot Tika When Gay Gao Praia" “rac is ~ Wien Bebra esd Cr ‘ite 1a ~ thee so ot Obs oC Ba ney ee i — When igo Cie engin Ge al Incnect on Bo Crd hn ade hie Rahs Appts ‘eer Obiton. “rte ios — vesnng of Face Odin Bo Len Aertve and ace bigatons Disinghed Sy Ol i Seton — Joint and Slay Obigtens Ardy 1207108 ~ Kinde of Osigaons Acoring 0 te aper f Paras Meri a ont ond Soka Opto: Colntve Obigaten Prenuted io be Prawn 5p fe ales en Mulupcy of Suit Wort Used ty Ines Je asin When bition Sabre Wows Ud to inne Saldacy Lit Nine ot olay olay ot Peed “ke a tnd Caton ‘Artie diy an ity Dt. ‘re at — Kinds Stary Ongean ern i te ng Te Soda Net Allee) Bae Spon ‘rie 122 ~ Ao Shin Cre Una Pl fo on z co — “8 Airy cig ior ig (an ~ Ft ak Cr ‘reals ~ Usoay ose Eder nse oon, ‘conpenuten Cenfsb ct femtison ies o Nevaton Whee Otlgatonfonton feet ent eda Sy ei HT ~ Eso ce aay Or ‘iit eel rt te itn a ak reco ap rtp Pet oats Ve 198~ Bhat Rr oa Aes Poy ‘ntl 6 Notigh tinturener ine af vce i ~ ain Ce Tighe Lo Psa HasBeome ingens ences ‘hice ak = Dots Asai ny Baar Sint ute ‘Scion 5. — Dv an Inivile Obiaton. ‘ete 123 — eng ico ete ign “rotors buen AppesoyatArce a ne oC rarer inanntsny, Whew Thor Ovy Gre Crt and On Debor ‘hic it~ ca acon aban ok Inca oben “ane Ine ~ Ogre Dama invite Cig rome Siete Obgahore No Sedion = Obligations with Pell Case, re 26 ~ Meinl Pcl and Acer Ons Meaning of Osigaton wah Fes Cau cing of Penal {Gown aren of Fea Co Penal Chane an Conder Sannguthee Kini of ena Case: Poaby Sato for Danson entry errr Dag en Penal yt Ee "N12 ~ Fest cave rested Sted When Pol Cefn SB gaa oFfrie 1238 ~ Ponty Demande Wht Foal Aci Daag rag Re anon Phy Mt Pei 8 — Win Rey My be Hdd By Oe Arte 1230 ~ Ee of Nu of he Peal Case: Ele of uly fe Pel bigs LEXTINGUISHMENT OF ‘OatacaTiONS ‘coveRALFROVISIONS dre 1231 — Caan aint ch bans ‘Sesion. — Payment er Peformance dre 122 — Meng ‘reat i2is When Dat Cenc Pa Baden ‘eu a | "7c —Recorery Awd When cpio ee ‘eernine eae Reine fe Apc 9 le “drt 1235 ~ Denar From Whom the Grr Mast Ace eymen no My Pte Pye by Td Fn ls "Artie 1238 — Meaning of “Free Dupes & Thing Due” and capuy te Aicrte Fre Depo ef Thing Dae ard Caposty ein Fecn ton Pomerat eng ot hay Posen Astonsedte ect “fae att ~ ees of Fymeet oo incped Rene ‘tl ey he Parry When Brito Ctn Ned NettcPoedby Bdaor- frsae 121 teyment Ted Ween in Poon ok ont ‘i i5— ies Prt oor Na ws » Ae 1284 — Wey Peta Oe tb Cad Ye hen Pion Maybe Tats Ses Rom eprint a ‘ayers Geresg a "er in ‘fete aay — bebe ig fo Ea Epa a Gry Pad Co “ie nt Reema: of Con Sade Coop: ‘when al een li "hte ii = Moving og te te "gps Poon Metso rermert Cet “ence 180 = Mang ota snd etc Payments Cae Erna toner Delton “rit Pit Clo Saba cs of Sanction 1. Application of Perens Arie 112 — Nearing Apstion of Pay: Rages Application of Payers Appiaion sto Ec Nt Ye Da ie pba ‘until ~ aplatr el owe wat Ca Ween eit Gromor Tan rer Whe DeSoto Diet Berane Saati. — Beye by Ceson Arie 1255 ~ Mowing of Peywes by Canin: Regist of royment by Canon bie of Payment ty Caso Daten Payment na Cosson Dating Sesetin 3 — Tender of eye ut conpation’ Avice 1256. = Mering of “Tener of Pymect” and bon: Regio ahd Conia When Tndee of tarmn it ag gre Toe year “Ati 12 ~ Toe Nolet Rese cd Regis Conagraton ut Cay nth Pore b Payment inne ast ~ Comgasin Maw be Wik Proper Jest -Aetoiys Nae tobe Gent tered Parise he Cone on Made Pip ~ Grin penn oom Wee “are 80"~ Wiles by Doe of Tg oe bn Deposit gee ee Bee a”Ae 161 — lot of iho wih Ast Sint Gee sec 2 — Lomo the Thing Dae, Avie 82 — whens Tg Consign Los When Ls ot ‘Thing Engh on Ogee When Lao ing arkottatggushtubiy ener rade 2 = ee Lat of seh ‘ak tee ~ Eh Pr pe ig ‘rode tts — Presponet Fah neonatal ign ‘Pome of bear hes espn Nt Appiah “rer se Btn af mga o Peron Faso Sete 19 Rigi of Cr to Teed Sein 3.—Condnation or eminon of Debt, Arse 1270 — Meangel Condanatener Renin eens cierto keto TRonson tities aire of esion &— Confoion or Mage 0 Right ‘ride 175 — Masving of Cation oe Merger Raton o ‘acts Conf: Regul Cfo “at Riese etiead el ‘rin lo Merger ne eon Cases ‘ends? ~ Consion ost Obes Celina ‘sida Cagatan = Say a a BB BOSD Ow ERE 2 ee g BURR BEBE section’. —Conpenitn, ‘ile 1278 ~ Menirg of Compson Oe o Ca eatin Cervo Conta Bag Badr “ity ~ Roque op Gp ‘ik 29 — Cotporten Rinar ‘get — alfa Egos ‘ie 3 jt amped ‘ink 2h ~ Campero RecicerVodaieDeb ‘ints — vt Compras ae ak Pa tre ssigaert Whew Congcrtn Tihs Ae Puce ar “i i it naira Wenig Canara BN lone Lae See "rns — lr on pla apc App aoe Seton .— Neva at ~Mensinge Noa Fenn Nomi Smitnae Tae Rega of Newre Nealon Na reamed Tete ashy Seren ow Signo "ii hme oo ender ey agusinew Ober ape “se Sit thea ee Bev ecco Now ies tsh = Bae’ of Now Debor Pavey or Now stn fe Sgn a Dagens arenes Omi tnt ett ovasnan cry gas AMEE ay ~ Ese ey OngetnYo en a ier gion ade Bi Sune a8 = Ste Wee th Ou Oblipon Wid we BREUER BeREesS SVS SSSsssewe etie 103 — Bete Lge Sabon = ‘Rr int~ bh etal sean no ‘Sadr - amen ‘CONTRACTS: cours: — GENERAL PROVISIONS Acie 186 ~ Mowing of Content: Narr of ati 6 ete Gs a open a Sk ATL La Meg dCs Fran Cai ‘Gunes Cares Sepals ota ‘Seebe Cora akan Coram tou heb coe Merle (Cansas Must Nat be Conary Goat Canta Care! as Sethe caren tobe Orr Cont Ma Nenbe Conny o Vets B29 ~ Gawiction of Carracs Aceding 10s Name or Design Rind imate Cnc eso fo [itemise Curae fas Covering roms Coeees “a eh = Conc Sn Conc Pe ‘ce aes —"Demnaton et Teomone iid ston Doct egb ‘sean roe sas Cae oe ion Pinas ae nied y © Gn Heong SPEER, er coe ics» Die Pe et aT ed rea toll Gea Gong nati ab ~ gh Cation Cora ind wodiet ton “Ie Ny denny Stl cul aa iSDIE ~ Chuatonie of Counc ecg sonny Sn ie oct Fw Cots Fete SetPoint Ca ‘Una Conncn Can be Cred Only by Rainn, Wh ‘or Bounby he Corto athe. gas ‘CAPTER2—essevTiA. neguosrres “OFCONTRACTS ‘GENERAL PROVIBIONS Arie B18 ~ Cs Beet ire anne Sedan L— Comet ‘Anite 3 — Maing Cr Meng Oe Orns te Coin an Seeny iment Manin epee Apt (Str many GourneAbo ce) ~ Form Acepassel Gli ‘ls "Mar ay be Rd ye Oo or iate 9 ~ Coneuriicn of Acapes ‘ei — en Ot same ea Oe Cans Which ender Ofer nnn (Caves Vining Case! ed ne of epay Ding “rtd 131 Mestage Muah ote Nera ss at ih eR ae ot a We De ‘ride = Burdon et sake Fal ‘ide 333 ~ ae Rods fe Bs ‘etl 1051 — Meng o Mat ta ie of Mie of When Matte lw Utes Cone Rega ar te ‘Applica ne! Metise 186 Nar of las Foes Rave of {nent Ta Fasom o Doerr Degree into. ‘heap Exot or tng “fone S36 Volar rin bya eon ‘tlc ter — Mersngf Undue nbwene ate Ure lesen, Creumstanes oe Conte g ou gee 8 Beear ee vevititis 1BEIME ~ Sewing of irulaon of « Conte Shit Mwy tHe Co Did fs ee Somes omic vet nde it~ Gis Pred s Baal Ee aNEy cence Cte a xd itis atom ache Sa ee Bees E goeo Be FE ae ‘Aide 188 ~ Cones Wich Wart Apo i »Pae Domed nearer Sty Gite ArTERs—ReroRurion oF INSTRUSANTS tn Aries — Newingl erate ot Reormtin: agin al Remmtee: Rometer Doing ot a cb ~ ie ln a dor ‘rtd 361 ~ Maral tte oan Betoun = _ i a se on Ov Fo Pte ‘rite 8G Contino aby th lr Foy —— ‘rte ~ Sparano Pt oe Poe (ie 128 — gon Pied ‘ree 85610 Cae en Rtas Not Rone ‘tea Pry erties Roem. ‘rte 30 — Prd fr Bloat. Sly Oh nnn ‘OF CONTRACTS. ‘vc 1379 ~ Meningie Cones: Lea eaing Contos Wien Lngings Ck Ee bitin Pas PrvaieOver Tema Cae “eu it = capponnvon ond irae Age nant ‘ne Dtrminonct eter nen “wea pal mnt Pav ve 3a na ‘oe 33 ~ Toco of lien Wi eed Me ‘ce a74— hase One Doe Akay pie Sts nner re ago! hrttn eR at Shi aie nn BB SSSeRERe BEE €$ $88 89 sss 8ryTRapucTION TO . Chup as inde DetecneContet an COPTER 6— RESCISIBLE CONTRACTS ‘tee 330 — Mewing of Rese Cone. ie ret fei cnc ean ana ‘re ~ Paps Seine Sate eng) 2 ‘ee tet Acton een ‘Mick Tas ~ Rsoaum Genes Otlgie 0 aa Row ‘aan nero Tad emer ee Ee ‘8° frat ~ Gas gnc Conn ‘ratty — when scnton eeenetnrnadlcrdion ‘urrex7—vorDAnLsconTescts Aric 90 ~ Mesrng ate Cans Bing Face ‘et tecie Conte Rote Vda Cott, Meng of “ce it~ fond ir Ping cin aioe ‘cet ~ Mecing wn et cf Rateaa ‘rade 28) ~ Kosala Roe ofan. ‘8 — Who ay Ry ‘oak fis ~ Coney Gli Fay oat Net ‘ree st — Pay vs ag Acne Aga Rh st stops Bing tr ky Py Wet sa ‘inde 0)~ lees gabe Stoel ‘eh ~ Senger of Non na ‘et — eet Where any Cro Rewore W e (denne Say Cue Se eee88 Ye Se Be ae ee s BS BARES ‘CHAPTERS — usesronceaste (CONTRACTS Are 103 — Mean o Uneven Crs Boing or Uninet Conta Hef Une ant ewig Unaarond Cont Sec Ft i aeons ‘ric Wi get aay Vor Conrat nares ‘Mick 1 ~ When Urner Dcone Wabi Conf When Unesorb Cont tes and Cra Zo = Reg ihe kn Ue Sle Gel roa ‘CHArTeRs— vow on weasteNT ‘onreacts ‘Art 1603 — Mesnege dco Memeo innnt cocci Carri a Vode arses Cat tances ‘1 i or nen Cate te 10 ~ Awan Os ‘nce tat ~ tale whee Cnt Roa ode A ‘Cents ike Olin eee Vi 12” Rules Was Goin igi ate A Ooo sete Gana ee ie eens Parone sgheahie "rac is Rca yan ica ‘nce ite Recvay We Etta Nev Regal 5 ied Slt and ve 17 Race wet Fd asa eng Wiener “ja ai sono diol Campsie Rendered Byend Ti i nnn sae tas Recoesy of Aca of Wage La Toa Minion Fie “te ned Edo gatiy Whew Gara baa) Davis Diese Cosas Ortegasted kom Dmible Ob a at ~ es io ie Be gy Nally ne cnce seen iad Cet Coots Nevo hl Cl nae a $88 8 Gh BER RE ae ane 6amen [NATURAL OBLIGATIONS is 12810 tide 103. = Creep of Nuvo CRptars Ca cunts Sl nS Slgaine Beangstd neon Neve 108 = Tekan” Ace GA Osigon H etree ‘aon 18 ~ Resta Wy Wine Aber Anim ees ~ Danby nro ony a Fog Tig infmentef Calgon et Propeny beet "lucie ~PeyncniclLigay Nisin Ben Based nly ute eeeeeeR8 a8 INTRODUCTION TO LAW ‘THE GENERAL NATURE OF LAW ‘Meaning of law in genera In its wides! and most comprehensive seme, the term Li” means any rule of action er any s}etem of wriflority, “Thus, Iw in general, determines not only the activites of men as ratlonal lings bit seo the moverents or tio of al ‘objets of ration, whether animate oF inanimate General divisions of aw. ‘Law, as ahove defini, may be divided into 0 (2) general soups, () Law Gn strict legal sense) which fs promulgated and enforced by the state and (2) Lave inthe noeegal sense) which not promulgated and enforced by the sate “The fist refers to what is known asthe state law while the sacond includes divine av, natutal lay, moral a, and paysical a) Inve (ace MJ. Gomboa, Inoductonto Philippine Lave 6thed.p. ‘Subjects of law. State low, divine law, natural law, and moral law are comprised in the definition of aw a8 rule faction. They apply ‘omen a8 rational blngs onl. On the ther hand, physic law operates on all things including men, without regard to the Jater’s use of thelr il power ard intelligence. is called law only figuratively speaking.[Before procenting with the discussion of slate lav, Ht us frst dispose of thone Ives with which the state is not directly soocerned Divine law. Divine ine i the law of rligion and fat which concems Atetf withthe concept of rn (a8 contrasted wih cre) and salvation. (1 Source. — 1 is formally promulgated by God and reveled or divulged to mankind by means of direct revelation. (a). Under he Oia Testament divine law is embodied {nthe Ten Cooumandmen's. I's believed by Christians that these laws were formally given by God theough Moses, the {great Hebrew prophet and leader. (ee C. Pascual, Legal Method, 2nd ed. pp.7-8) (b) OF course, divine Inve ditlers according to what ‘one believes to have been established and communicated 0 ‘mankind by revelation. Thus tothe Mohammedan, divine lave is embodied in the Muslim Quorar, (2) Soncion, — The sanction of divine law lies im the assorance of certain rewards and punishments in the present fe ‘rin the life o come (Clark, Flementary Law, p.5) Natural tov Natural Ia nay then be defined as the divine inspiration fn man ofthe sense of justice, feirmess and righteousness, not by divine revelation of forsal promulgation, tut by internal lcates of reason alone (1) Bdng fore. — Natal law is ever preset and tinding onal neeverywhere and tall tines Thee isinevery smu abuse undesanding of ight and wiong based on th “derstaning of he fundamental andrd or eran of good zed el In ober wordy thre te some acs or conduct hich ‘man Brows in his heart and is corscenc, nt by theorang, butbythedicetesofhis oraimaie ae simply good orbad en. “Thus, we know ht lg fort sk of ling sting fore sak of sain sl edict erty tha tate lot lio iho When we speak of as Inward! nt of tft an ics in an a Aivinely inpired by the dicate of hc hgher natu, ve ae {aking abou natrtaw or the ow of wate oe © Pesca, “Tae Nate and Eement ofthe av 195 pp. 910) (©) Conpret ssn — Wear aw and vine law ae very rs tye noe these ine oy 2s he lw Of lige aif made now to man by tame oi et etn See chen sao be impressed in man asthe core offs higher sl athe torent of bun ot perhaps even befor that. Gee © Pasa, Tegal sthod tne pitt) (9) Plc in let, — Natural lw has een regarded as the ennui Ba of aba When we tk of marl lao, we ae speaking of she teaity of ‘henorms of good and right conduct growingotatthe collective sense of right and wrong of every community. (1) Determination of what i right eal wrong. — “AL a comparatively eatly stage of theie existence human beings learned that i¢ was good forthe wellare of the group that the privilege to determine what sight and what is wren was not lef to each member ofthe group. The mores or ways of fe were then evolved which were aways considered fight and correct, and obseience to them was demarded by the group.” (2) Sanction, — As distinguished fom state law, there is no definite legal sanction (panishment impesed by Taw ike imprisonment and/or payznent of Fnesor damage) for ication (of purely moral aw. “Ia membor ofthe community disregards ‘the moral norms, a spontaneous soil reaction fs produced in the form of public displeasure, contempt or even indignation I, lon the other hand, thre fy oaVoenity tothe moral norms, there Is created spontanaous social response which may be inthe form‘ nVRLAWONOHLEATONS AND CONTRACTS of public pleaeue, approval or even joy (66 C. Pascual, The Noor and Elements of Lav, 1954 ed p16) (2). Bining fre. — Mora aw i¢ not absolute 1 vanes swith the changing times, conditions or convictions of the people Forcuamele polygamy is considered immoral itis as0 a crime) in the Philippines, whereas, i allowed in some parts ofthe ‘worl Todays teks in women's dres are socal allowed ‘otateiernt ies, they would havebeen orally condemned, (2) Pace in state lew. — Moral law, to a great extent inflocnces or shapes state awe “Inthe operation or ours of mati there are uiformin of actions and orders of sequence which are the physi heremera that we cence and fee. They are known othe lees pital scene or pga” Ubi p19) (0) Onder or rguarity on mature. — A law of phys scion being dresed (© objects hich have no overt ‘Tsay, nin ely nothing more thn an order o regulary innate by whch eran result follow cetaln cause (Cla, Blemeriary Law p 34) (2) Clete ty by anlagy. — In other words, is cxdr er egularty ical law oly by analogy. “Examples of pyseal law ae many Te more conspicuous Once are the [Sf great andthe la of chemvcal combination” (ee C Pasa ep Method, 2nd ed, p13) State ow The Kind of aw however which pertculaly concems ut in hs woo the slaw o te ow tat proud and ‘ctor by hw (0) ier toms red — This lw i also called postive lam, suri law, lw or npeatve law Iti the law that w= ‘ert when we speak! aw in connection with obligations 2nd contac mating the administration of justice, the conduct of ‘eecons and thee goveramentl process isl. (2) Binding fore. — As a mle of action. only tate law is enforced by the tote, with the aid of is physical free, if necesty (G). Concer of state lew. — The lds of state law ace dif- ferent fom those of divine law, natural law, and moral la, Sate law’ does not concern itelf with viclatons of the later Fules oF action unless they also constitute violations of ts coms Inancs. fl examination of vine aw propery belongs to the fields of philosophical theology; of natural lw, fo metaphysis; ‘of moral law, to ethics and of physical aw, to physialsience ‘or physics (MJ. Gamboa, oc, p.5) Leaving aside these ties, we proced now with the ‘consideration of tate law. Concepts of (state) lw. “Tho term aw may be understood in two (2) concept: the _Bencral or abstract sense, and inthe specific or material sense. (2) mits grt sans, the tm fers tall he laws taken together. Ir may be defined as “the mass ef obligatory rules stubliched fr the purpose of governing the lations of persons sn society” ee A. Tolentino, Civil Cade ofthe Flippices, 1953 ed Vol, p. 1) Examplesof the use of law in thissense are: “lw (ofthe land” “rue flaw and not of men” “equality before the Jaw? “enforcement of the lw” ete (2). Anite sec sone the term hasbeen defined as “a rule ‘of conduct, just cblgatory promulgated by legitimate authority and of common observance and benefit” (Sanchez Roman 3)t has this second connotation when we refer oa particular statute or legal rule, egy the law on obligations and entra Characteristics of law. ‘The characteristics flaw (in its specific sense) ae: 2) isa re ofceiuct. — Lae els us what shallbe done ‘and what shall not be done. Asa rule of human conduct, law takes cognizance of exeral acts only‘ ‘THELaw enomscmons NNO CONTRACTS 2) Ite obigstry. — Law is conser a positive come mand imposing 2 duty to abey and involving a sanction which forces obedience: ©) Mis prommigaed by tegitinsie ality. — In a democratic county, ike the Phllppies, the legitimate or competent author isthe legislature, Under the Consttion, iwc “taies” are enacted by Congress which isthe name of the legislative branch of our government oeal overnnent nits are so empowered '9 enstorinances weh have the ding fore ofl and (©) isefcomanobseremce onder. — Laws intended ‘by mantoserve mart oplatesthe lations of ment alsin ‘Rimony in soecty and to make order an co estence posible ‘Law mun thevfore, be cbnerved yal fo the benefit fall Necessity and functions of law. (1) Wat nid if be without ay? 1 we can answer this ueston, we can ansiver the mor base question of whethor lw ‘Srnecesary. fife without law would be the same a i snow, obviousy lave mot necessary, Sox comes risen ens members co ot lve boule med rer oer eat a ‘redler eee No ay canbe stock ter OF hese urement is tobe povided owe F Poke Ft ea nfurapdere Sheds 6) (2) Whe ds do has bons ht aw secures inte rele sal of or sce peers Sc sol wt, Li wink as age! ty Sole, and esiracion wos be solr, rsh at and Shoe ie wiht ober suchas hal epating at, Sinton empiyen bases te of ato of ken pearance = wou be sory, es hal otsme ce Ge Howard and Sone La Hs Pca, sini Sepp. 355) (8) Whar scar dt sant fcc? No soci con Ist rd continue not meno seal anh oat rules of social order binding on its members. The sim of sch, rules a existing ina given society under whatever particular forms, is what, in common specch, we understand by law fof fs also referred to a8 the legal system, Since we find la ‘necessary, every citizen should have some understanding of Taw and observe it forthe common good. Sources of law. ‘The peicipal sources of ln in the Philippines are the ‘Constitution, leilation, administrative rules and regulations, judicial decisions and customs (1) Constitution. — With particular eference tothe Cost- tution of the Pilppine, it may be defined ap “tho weten Intrursent by which the andamentl peers ofthe government are established, inited and defined, ahd by which hese powers fe distebuted among the sovers] departments fr thet safe and ‘wef exercise for the Benet of the peopl” (eee Malcolm & Laurel, Phi Constitutional Law 1936.6) tis often refered to asthe fudomentl law oF supreme lw ‘or highest aw of he and becuse tis promulgated by the poople themaives, binding on al individual citizens and all ogences ofthe governement. tis the law to which al other laws enacted Dy the legislature (as well as administrative or executive ats, fders and regulations having the fore of la) mast conform. ‘This means that Ines whieh are decored by the courts to be Inconsistent with the Constitution shall be eoid and the later shall gover. (ce Ar. 7, Civ Code) ©) Leyiaition ~ Itcositsn the declaration oflegs ules by a competent authority: (Salmond, Juispodenc, Sth ed, p. 202) eis the preponderant source of ow in the Plppines Acts pasiad by the legilature ae so-aled ent wot saute a. Legislation ince ondinances enacted by loal governments nits, ©) Aémiittne 7 exette is, pis od rulings. — They are there issued by administrative offcals, ‘under legislative authori. Administrative rules and regulations. sta cvocnONS ANDCONTRAETS are intend ta clarify explain the aw and cary int effect its _general provisions. Administrative ace ae valid only when they ‘are not contrary tothe laws and the Cansituton, (Act. 7, Cv Code) (A) nicl decisions or urpradene — The decisions. the ‘cours, porticualy the Supreme Cour. applying or interpreting ‘the laws or the Conattion form prt of the legal system ofthe Philippines. (Art. & fi) The decisions of a superior court on a point of law ae binding on all subordinate courts This s called the docnine of precedente stv de. ‘The Supreme Court however, may reverse ot modify eny ‘ofits previous rings. Until ten, the decisions ofthe Supreme Court applying or incerpretng the laws othe Constitution are “laws” by thee own right Because they declare what the laws say cr mean. Unlike rulings of the lovee cours, which bind the pasties to specific eases alone, is judgments ae applied to all {ha Veterans Aff Office vs Sur, 164 SCRA 355) ©) Casio. — "I consists of those habits and practices which through ong and uninerrupied usage have become acknowledged and approved by society as binding rules of conduct” It as the fee of lw when recognized and enforced by the state. QM. Gamboa. oy. cit, p. 15) For instance, in a contract for services renserpd where no definite compensation ie ‘stipulate, the compensation tobe pad may be ascertained fom ‘customs and usages the pce. see Smith vs. Lapez, 5 Phil. 73) A custom must be proved a 2 fact according to the mules ‘of evidence (fa (Art. 12, Cv Code.) It may be applied by ‘the courts inthe absence o lew or statue exactly applicable the point in controversy. Bot customs which are contrary tov, pPubicorder or pubic policy arenot countenance. (Act 1, Ib) (6). Other sources. ~ To he above may be added principles ‘of justice and equity, decision of foreign tribunals, opinions of texters, nd religion. They ae however only supplementay. that i, they are resorted to by the cours inthe absence of all ther sey They hovers nt nding oe aap ta)? Mme eng om te amour LAN . Rule In e260 of doubt in intorprototion ‘or application of laws. ur Civil Code provices that “no judge or coutt shall decline to render judgment by reason ofthe sence. ebscuiy or Insufficiency of the las” (AR. 9, Civil Code "Incase of doubt {nthe interpretation or application of laws, itis presumed that the lawmeing body intended right and astce to prevall” (AM 10, Bid) Int county, cours ate not only courts of law but also of lustice. Foced with a choice between @ decison that oil erve justie and anether that will deny it because of a oo stick interpretation ofthe Jaw, courts must resolve in favor of the former, for the ultimate end ofthe law is astice. (Pangan vs. CCourt of Appesls, 16 SCRA 375) This is partclaly tue where ‘what is at stake ithe Bie, liberty, or property ofan individual, {nd mote sof he is poor or disadvantaged Organs of social contol, Law is ot an end in itself may be viewed as 2 means of social control — dhe conto of saci behavior that affects ober. (Bowards and Suneers, op. cit, p-38) In moder pluralistic societies there are many organs of soxial control. For instance, in the Philipines, in addition to legal instiusione — national and local — there are churches, erporations, polities parti, trade association, schools labor Unions, professional organizations, socal cubs, families, and host of ethers. Such organizations, through rales, regulations and orders, contol some ofthe behavior oftheir members. Law compared with otver means ‘of social control. ‘Thove aze several basic diferences boran soda contol ‘hough law and contol through other methods twit (1) Laws are made and administered by the only Inetittions in society authorized to ac in behalf ofthe ence citizenry. Churches, for example act only forthe members;» ‘a ON OATONS AND CONTRACTS (2) Oniyhelegal institutions within the society can make rues eeglaons andoderswith hich Ghent cizonry must fomply. Theale ee of-cil and economic organizations, or ‘example gover only linited mimbers, 8). People associated with an organization con ordinal, terminate the relationship and thereby fw themselves rom the lnmpat of ts rls and regulations, Citizen ofa sate, howe, cannot do ths uniess they choose fo leave the geographical ane, Im ehh the state sovereign (4) The sanctions oF techniques of control through lowe ‘are more varie’ and comples than the techniques available to ‘ofgsnizaons such as chutes labor uniors, and politcal partes Expulsion Is usualy te most powerful tchnlque [valable to such erganizations to secure compliance withthe us, ete Fr the erpoyee 3s the loss of hijo. ‘Aside fom inprsonment and ceportation, there are ‘many cher sncions avec t fe la sncluding dena ox ‘evocthon of len, contacto ef prope impostion of lini forctinkind of condacydnslutton of organizations, aed drial of peiveges. A sanction is row the obec the indersfition of the person who has sufered daroges (uy from 8 vilation of nv and peal tthe eect nthe uth fi lar and ©) Beare te law “operses” apsnst an indivi various pronsrl sepa eae. This the invical must Sedinaly be given a hearng snd 3 fl opportunity to show vey he hoald not fr carpi be orered fo py money Wo a {Samant orbe depeived of Eberty Such steps ae comunly telened oar deproe olla Organs of soda contr er than hose provided by lave axe gemally nat equted to eomply ath uth procedures in cing again individuals exept when ther rules. provide there i, pp 0-44) ‘Organization of cours, Unde the Costin th aici power athe power to decd sual uesendentovetes inching he nterpetsion moun ToLAN i snd application of laws is “vested in one Supreme Court and in stich lower courts.as may be established by laws." (Azt. VIL Sc. 1 thereot.) The judiciary, composed of the cours, iscne of the theoe @) main divisions of power In our system of ovement. (1) Regular courts, — The Philippine judicial system consists of hierarchy of courts resembling » pyramid with the Supreme Court atthe apex. Under present legalation, the other courts are: (a) one Court of Appeals. (5) Regional Tal Courts siting inthe diferent provinces and cites, and () Metopalitan {ial Couits in Metropolitan areas established bylaw; Municipal ‘Tal Courts in ates not forming pact ofa metropolitan area, and in municipalities; and Municipal Ciclt Tal Courts in areas defined se municipal circuits. Circuit cours exercise jurisdiction ver two 2). or more cities and /or municipalities ‘The Suprome Court the Court of Appeal nd the Regional Tal Couns are considered courts of general or superior Jurisdiction. (2) Specatcouts — Asidefsom these cours theres, under ‘he Constitution, a sped and graft cour, the Sandiganbayan. (ae XI, See thereof) It forms pat ofthe judical Rieacehy together with the Courtof Tax Appeal aspecial ax court created, bylaw on the same eve asthe Coat at Appeals. (3) Qursjudcial agencies. — Administrative bodies under the secutive branch performing quastjudiial functions, [ike the National Labor Relations Commission, the Securities and Exchange Commission, Land Transporation Franchising fand Regulatory Board, Insurance Commisson, etc, and the Independent Constitutional Commissions (Civil Service ‘Commission, Commission on Elections and Commission on ‘Aucit) donot form par ofthe integrated judicial system. ‘Their functions ave described “guashjudiial” because they alo involve the settlement or adjudkation of controversies cor disputes,2 RAELAONORUCATENSAND CONTRACTS Classifications of law. ‘The methods for casing law are many. For our pun. poses, t would be best to conser the main classifications ofa, frst a ots purpose and second, ast its ature ( Astoispupose (a) Subetantce te o hat potion ofthe body of ly costing, dafning, and roglating eights and duties which may ether be public or private in character. An example of substantive private In isthe lave cn obligations and ‘eontrcts and (©) Adjective tno that portion ofthe body’ of lw preserbing the manner or procedure by which rights may be enforce or tir violations redrened. Somctimes this i ‘lied remit Io procul les The provision of law ‘which says that actions forthe recovery of teal property hal be fed withthe Regional Tal Court of the rogion ‘where the property or any part thereof isis an example of private adjective lave nd duos are useless unless they can be enfored Itienot enough thorfore thatthe sate regulates the rights and utes of al who are sabject othe aw; itmust als provide legal ‘emediesby which substantive lew may be administered. Hence, the need for adjective la, “Theadjocivelain the Philippines is governed bythe Rul ‘of Court promulastedby the Supreme Court and by special laws. @) Asteitssbject matter: (2) Public few or the body of legal rules which reggae ues on the atop people ofthe stateto ‘Anexampleofpubilaw iron! the aw which deties crimes and provides for their purishnent ln egal {oor whena penonconmité sete, he violates nat oY the ig oft indo wit ut primary hao D2 state caus there te the peace and der of ‘Also inched ae: internation! la or that lw which governs the relations among nations o- states; consilutional Te o¢ that which governe the relations between the state and its citizens it ettlishes the fundamental powers of ‘he government: edministrative aw or that which governs the methods by which the functions of administrative authorities are to be performed: and criminal procedure of ‘ht branch of private law which governs the methods of teal and poristiment in erminal cases; and 0) Private wor the body of rales which regulates the relations of individuals with one another for purely pslvate fends. The Inw on cbligations and contacts comes under this heading because it deals with the rights and obligations ‘ofthe contracting parties only. The state, however, i also Involved in private law: itenforces private lav but simply as an arbiter and not asa paty (see MJ. Gamboa, op. cil B. 58) Included in private Iw are civil law, commercial or sereantile la, and civil ce. Cal procedure Is that ‘anch of private law which provides for the means by which privite rights may be enforced. {Law on obtigations and contracts defined. “The lw of obligations and contracts isthe body of rules which deals with the nature and sources of ebligations and the rights and duties arising from agreements and the particalar contracts” (bids eee Art. 1307) Civil Code of the Philippines, ‘The law on obligations and contacts i found in Republic ‘ActNo 386 esherwisenown a he Chul Code the Pilipnes. ‘When we speak of cil ize, we wefer tothe aw found primarily nour Chil Ge ‘The Civil Code ofthe Phlippoes is based mainly on the Gill Code of Spuin which took effect in the Philippines on“ rt Lv om ORAGATINS ANDCONTEACTS December 7 1889, (Mjsnes vs Neri 3 Phil 196) It was approved as Republic Act No 386 on June 18. 199 and took effect on ‘August 81.1950, (Laca vs Del Rosaria 94 Phil. 78.) 1s vied int four () books. contracts. The general provisions on obligations are contained {Tie L Arles 1156-1308, while those on contrat, in Tite ‘Articles 1305-1422. The general rules of law governing contracts ae also applicable tothe particular kinds of contracts (ike sale agency, partnership, barter, ec) in addition tothe speci provisions of las governing each type of entra. Book IV ak centsine new provision dealing with natral obligations wiich are found in Tie IL Ailes 14231430. scone = or erent otimeerriniorl eae STESY a a oe RE es 8 ee ie toe eee Soe i a a al i om cde ttt i yo ey ee co a prea airtge miata: meee Bree Lvintoutiericie sn ete ee ton ee anlar matt re have to do and in more complicated arial relations there tne lawyers who should be consulted (A. Tolentino, o. et, PP- ie-19)sand (6). “Evasion of the law would be fociitated and the administration of justice would be defeated if persors could Successfully plead ignoraace of the law to escape the legal ruences of their acs, of to excise non- performance Of their logal duties. The rule, therefore, is dictated not only by ‘expediency butalsoby necessity" Ubi p.7:Zulueta va Zalvets, PRL 2S) ‘Thus, ignorance of the provisions of the law imposing, a penalty for illegal possesion of firearms. or punishing the possesion prohibited drugs. doesrotconstitutcavabdexcise {their violation, ese.TITLE | OBLIGATIONS as (Ants, 156-1304, Civil Code.) Chapter 1 GENERAL PROVISIONS ARTICLE 1158. An obligation Is a Juridical necessity to give, to do or not to do. (a) Meaning of obigation. ‘The term ciation ederived from the Latin word ciao which mean thing or binding, tiga tie or bond recognize by law by vttue of which one 's bound in favor of another to render something — and this -may consist in giving a thing, doing a certain ac, or not doing a ceerainact. Givil Code definition. Article 156 gives the Civil Code definition oF obligation, in its pasive aspect. t merely stesos the duty unde the law ofthe debtor or obligor the who has the duty of giving. doing or not doing) when speaks of obligation ae undial neces ‘Meaning of juridical necassiy, bigation is a jue messy because in cme of ‘noncompliance the cou of jstie may be elled upon by the aggrieved party to enforce it flllment or in defatittheco!, theecnamlc value hat epitope sg edb tor obligor may aso be made able for damages, which reprosnts theoum of money given asa comporcation for the njury or arm sulfered by the creditor or blgee (he who has the right to the performance of the ablation) forthe violation of is rights nother words the debtor must comply with his obligation whether he lkas itor not otherwise, his fallure wil be wsited Ihith come harméal or undasiable consequences. f obligations trere not made enforaable, then people can disegard them Tei impunity: There ee. however bligations that caiot be enforced because they are vot recognized by law as binding. Nature of obligations under the Clvil Code. (Obligations which give tothe creditor or obligce a right “under the Taw to enforo tei pesformance in cours of justice ite known as cil ciigation. They are to be distinguished fom ruse oligaions which, not being based on positive aw but on ‘sity an natural law, do not granta right of action to enforce their performance although in ease of voluntary fulfillment by the debi the ater ray not recover whathas been delivered oF tendeted by reason thereot (Art! 123.) [Natucal obligations ace discussed under the Tile desing with ‘Natural Obligations” Tite, Acts. 1429-1490.) Essential requisites of an obligation. ‘Every obligation has four (4) essential requisites, namely: (0). Apusic sujet called debtor or cbligo|.— the person ‘whois bound tothe fulfillment ofthe obligation: he who has a duty 2) An cctze abject (called cedtor or obliges). — the in who isentitled to demand the fallliment of he cbligation; Fhohararight» niEUWONCOLCATONSANDCONTRACTS et (©), Objet or pstaton (abject matter ofthe obligation) — the conduct required tobe cbervd by the debtor. Itmay cones fn giving ding or not daing Without the pretation, thor ‘nothing to prc In biter] ebigatons (See Art. 1191.) the paris are resproalydeblor and creditors; and (4) Ajuda or eae callet efficent cause) — that ‘which binds or connec the parties othe obligation. The te anobligationcanensily be determined by knowing the source gf the cbligation (Art 157) RAMU: Under abusing const X bound hint tobuld howe foe for PLC. en he ps subject Ye the active subj he tnidlagelhe ons cjer x poeta, and he agresert conic ich she our of be oligaion the wedi Suppose Xhad sendy constructed the house nd twas he serpent ocldpy Kater ie trcon sme te ace bec and te pave subject. Form of obligation. ‘The form for algation refers to the mannge in which an Blgationsmarifesed or incurred. Itmay be oa orn welting, ‘parlor and partly in writing. — (0). Asa general ral the lew docs not require any form forcbigator rising rom cota fr thei ality or binding fore. Se Art. 1356) (2), Obligations asing Com other ources (Art. 1157.) €0 rothave any for tall, Obligation, right, and wrong dstnguished, (1) Obigtion isthe stor pecformance which the law will enforce. (2) ih on the le band the power which a peron as under te toda fo another any presaone A song (ete of con, scoring to Iga sein bo an tan pty ni oe erase. oop arto ilo te tarry assed oe wrong ito te Toalaghte eter The erential elements egal wrngarinuy (0) aleglsightintevorotapenon(cedior/oblgee! pliotty /! (0) aconelatv gal obligation onthe parte anohar (debtor chigr/defnsentoropetornovo oaeend ghana (©. amact or omisiany the later in vltion of sid sight with eauing ij or map th former Again onthe prota pasoncanct xt wiboute conepuaing sigh vor o antes tnd St Sa A wrong reac of sch oly antes athe ements ght he Dok armpesed ort ee vpn ce Yh pt. sec etace rent ie eda naire ochaereneriie nears Ton cpemimpsatariecrstedeewat fecraiormet edie tr yer iho nd enabatits pate toe crm ptt megsretsee, feces tecnoes Sea : Kinds of obligation according to the subject matter. From the viewpoint ofthe subject matey obligation may ether be ral or personal (1)_ Rea! ebigutie (obligation to give) is hat in which the ‘subject matter is a thing which the obligor must dais tothe oblige.» ‘ELAWONOBLEATINSANDCONTRACTS Ay AMPLE: x ¢egu sii himself diver a piano oY Cyr). (2), Persona eligation (obligation to door not to do) is that In which the subject matters an at tobe done or not tobe done, ‘There are wo @) kinds of personal cbligation. (a) Pose personal bation oaligation to do oto vende sev, (se ANU 167) XANPLE Xinds hist cepaithe piano. (b)_Negtive personal elgation i obligation not to do (which naturally includes abfigations “not to give") (e ‘An 1168) EXAMPLE: X obliges hse not bulla fence ona certain portion of Iislot in faorot¥ who ened to anightof way over cid at ART. 1157. Obligations arise from: (1) Law 2) Contracts; (8) Quastcontracts; (4) Aets or omissions punished by la (5) Quast-setes. 10808) Sources of obilgations. ‘The sources of obligations areenuerated below: (1) Lae — when they ar imposod by law isl, BRAMPUES: ‘Qala o pay tae cbligation to soppart one's a eon 0. fails (©) Contacts. — when they arise from the stipulation of the parties. (Art 1306) BAMPLe “The clgaton to epay loa a ndebudness by vistue of anagirenen: 3) Queteoniects. — whon they arise from lawful voluntary and grilatral acs which are enforeable to the end that noone shal be unjust enriched or benefited a the expense of arother (Art 2142) In a sense, these obligations mey be ‘oneidered ap arising from law. EXAMPLE: ‘The cgaten totum money pid by mistake oe whic fs rot doe (Art 2184) (2) rine or acto omtesions punished byl. — when they age from cil ability whichis the consequence of 2 criminal offree, (Art 1161) EXAMPLE: “The ligation of thi! to zeta the ea tle by hi the duro ler toidemniy the irs of vic. (8) Quiles or ots. ~ when they aise fom damage ‘caused to another trough an act or omission, there being fault or ‘epligonce bute contesetual lation nists between the parse An 2176) BXAMLES. ‘The bignon ofthe head offal that ives ina ding xa pthread tgs oh ‘Oc fling fom te sane (Art 2183) hecbligtion ote poses ‘fan nial to py forthe casage whieh i may have cused, thes) ‘There so abligaton as defined in Arie 186 essource Isotany of those enumerated in Artie 157.» {HE LAW ONORLEATERSANDCONTRACTS Antsy Sources lassified. The law enumerates five (8) sources of obligations. They may be elasified a folows: (Q) Those emanating fom law a 2) Those emanating from private acts which may be Sarther subdivided its (a). Thosearisng roc snd quas-ontracts ie: and ()_ Those arising from iit et, which may be either punishabiein the cas of delilsor crimes, ornot punishable Inthe case of quas-delicts or tots. (inf) Actually, there are only to (2) sources: aw an contracts, because obligations arising fom questeontracts delcts, and quasidclicts are rally imposed By law (See Leung Bea vs (OBrien, 38 Phi 182.) Is inthecaseofcontracts ART. 1158. Obligations derived from law are ‘not presumed. Only those expressly detarmined in this Code or in special laws are domandablo, and shall be regulated by the precepts of the law which establishes them; and as to what has not been ‘foreseen, by the provisions ofthis Book. (1090) Legal obligations, ‘Article 1168 refers olga obligations or obligations arising ftom law. They are not presumed because they ar considered @ burden upon the obligor They are the exception not the rule. To ‘be demandsble, they mus! he cel set forth inthe Late Oe ‘Gil Code or special laws. Thus: (0) An employer has no ebgaton to fish fee legal sssiatner to his employees ease nol tees thi a therfore an employee ay not cover fom hs employer the amount he may have paid» awyer hed by hin fo reaver Semape cowed fo ell eeploys by a seeger oe aeanget trl lnthe performance of dues (Dele Cras ve Neder “Theat Enerpracs 959.728) @) A private schoo! has no legal obligation to provide dlthing allowance ot teachery cave therm a which imposes this obligation upon school. But a person who wins tmancy in gambling ha the duty to return his winnings #0 the fosce This eligation is provided bylaw. (Ast. 2018.) Under Article 1158, special laws refer to all other laws not contained in the Civil Code. Example of such laws are Corporation. Code, Negotiable Instruments Law, Insurance Code, National Internal Revenue Code, Revived Penal Code, Labor Coe ete ART. 1169, Obligations arising from contracts have the force of law between the contracting paris and should be complied with in good faith. (09%) Contractual obligations. ‘The sbowe article speaks of contractual obligations or obligations arising from ‘contracts or voluntary agreements It presuppoves that the contracts entered Into are valid and enlorcsbhe ‘A contrat in a meeting of minds between two (2) (OF more) patrons whereby one binds himsel, with espect othe other, to five something orto wendvr sone service. (AR 1305) (1) Binding free — Obligations arising for contracts have the force of luv betwoen the contracting parties, ta, they Ihave the same binding etfct of obligations imposed by laws ‘Thisdoes rot mean, however, that contract is superior to the law. ‘Asasource of enfortlle obligation, contract mst be valid and ‘cannot be vali if iagainet the awe (2). Reguiremont ofa valid contract, — A contrat is valid (assuming all the eszontl elements ate present At. 1318) 's not contrary to law, morals, good customs, puble one public policy Its invalid or wos fis contey to le moral, {ood tstome, pubic order or public polly (A. 1306 In the eyes of the law a void contrat doesnot exist. (Art. 1409} Consequently, ro abligntions will ase. A contact may» [THELAFONORLIEATONSANOCONTIACTS An. be valid but eannot be enforced. Ths is trae in the case of ‘unenforceable contracts. (see Arts 1317, 1406) ©) Brosh of conrect. — A contract may be breached or lated by a partyin whole or in par A breach of contact takes place whon a party fal oF rofuses to comply, without egal reason or justification, with his obligation under the contract as Promised Compliance In good faith. Compliance in god fi means compliance or performance in acondance with the stipulations or rms ofthe contract or agreement. Sica ard honesty rust be observed to prevent ‘nw parry rom tking unfair advantage over the othoe [Non-compliance By party with his legitimate obligations sttererving the benefits Gf a contract would constitute unjust ‘enrichment on his par. although acontract provides no penalty for its violation a party cannot breach it with impunity. The ‘oppressed party is atlorded remesies to protect his ight. (soe AL TOL) XAMPLES 1) WS geste sel hishoue to and ances to buy the house of, vole and willy then hey rebound bythe terms oftheir contat ane neither party may, upon his owa We and without any asafble ras, wir fom te cone! ot Cecape tem hs dblgatione bemunger ‘That whichis agreed upon inthe conta isthe aw between Send Band mast be comple wily in goo th, (2) A conas wherhy 5 wil Ll 8 jn consideration of P,f001 be paldby Ce void and rem-ectent becuse king 8 pessoa contrary law Likewise an agreement where $ wl ‘ener domestic ever grtstously wt lan fo Bs pa ‘oid beig contuy tan and tras ce Art 689 Dafoe Reyes Algjado 16PhiL #3), In both cases, § has no Blgation to comply with his agwenents. ART. 1160. Obligations dived from quasi- ‘contracts shall be subject to the provisions of ‘Chapter f, Tile XVI ofthis Book. (r) ‘Quast-contraetual obligations. ‘utile 1160 teats of obgations arising from quasi-con- tract or contac implied in aw. A qusi-contract is that juridical relation resulting from lauefol, volustary and unilateral acts by virtue of which the partes become Bound to each other to the end that ro one wall EErunjully eniched or benefited atthe expense of another. (Art mua) Its not, propel. a contract at al. contract. there i @ resting of the minds or consent (se Arts 1316, 1318): the ren must have deliberately ener into a fcmal agreement. Ine ques-contac there is no convent but the same is supplied by faction of law In ether words, the lave considers the paris as having entered into a contract altsough they have not actually done, and ezpecve oftheir intention, 1 prevent laste ‘orthe unjust enrichment of person atthe expense of another. Kings of quact-contracts. ‘The principal kinds of quasi-conteacs are nepoionum gest nd solute nde (0), Negettarum gests the voluntary management of the property ocala of nother without the knowledge or consent ‘Ofte ater (Art 2144) BAM X net Baguio wii amily without ering sorbod solo hs tue n Mant nde Bagu oe bea ‘ut rear te House of XThragh the effort 61 neighbor the fart was val fo beng bussed homeve necoed coos Jn th cae, X has the chligeton to ximburse ¥ for sid ‘expenataatbcughbe oi nostalgic his concent tthe a lYinsavinghisbowea one pncilen quasconact