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

An obligation is a juridical relation whereby a person (called a creditor) may demand from another
(called the debtor) the observance of a determinate conduct (prestation or object), and, in case
of breach, may obtain satisfaction from the assets of the latter (Arias Ramos).

CHARACTERISTICS OF OBLIGATIONS

1. It REPRESENTS AN EXCLUSIVELY PRIVATE INTEREST. The government does not intervene unless the
creditor seeks relief for the collection or demand of the obligation.
2. It CREATES TIES WHICH ARE BY NATURE TRANSITORY - Because obligations are extinguished either
abruptly or in due time. But the period is relative – could be seconds (e.g., buying coke) and could be years
(e.g., partnership, lease)
3. It INVOLVES THE POWER TO MAKE THE JURIDICAL TIE EITHER DEFECTIVE IN CASE OF NON-
FULFILLMENT OR THROUGH THE SATISFACTION OF THE DEBTOR ‘S PROPERTY.

ELEMENTS OF AN OBLIGATION

(1) ACTIVE SUBJECT (Obligee/Creditor): The person who has the right or power to demand the prestation.
The active subject is called a creditor if the obligation is to give, an obligee if the obligation is to do.
The active subject is always a person whether juridical or natural.
(2) PASSIVE SUBJECT (Obligor/Debtor): The person bound to perform the prestation. The passive subject is
called a debtor if the obligation is to give; an obligor if the obligation is to do. The passive subject
must be determinate or determinable.
(3) PRESTATION (Object): The conduct required to be observed by the debtor/obligor (to give, to do, or not
to do). Object does not mean a thing but the conduct demanded in an obligation. Example, if you buy a
car, the prestation/object is not the car but the conduct required to deliver the car.
The object of the obligation always consists in an activity or conduct to be observed by the
debtor towards the creditor. This conduct to be observed is also known as the prestation.
In a contract of sale for example, the object of the obligation is the conduct of the vendor in
delivering the car. The car, on the other hand, is the object of the prestation.
(4) VINCULUM JURIS (Juridical or Legal Tie; Efficient Cause): That which binds or connects the parties to
the obligation.
▪ The vinculum juris is the legal tie. It consists of the enforceability of the obligation. If the debtor
does not conform, the creditor has the power to go to court to make the debtor perform –
coercive.
▪ What makes an obligation is the power of the creditor to haul the debtor before the court,
summoning powers of the state if needed.
▪ Voluntariness goes into entering into an obligation. But once you enter, it becomes involuntary.

REQUISITES OF THE OBJECT OF PRESTATION

a. Licit (Legal) Example: Cannot validly enter into a contract for sexual services
b. Possible both in fact and in law (Determined by the rules of experience)
c. Determinate or determinable (You cannot say that ―I promise to sell you something).
 Example of determinate: I promise to sell you my car.
Example of determinable: I promise to sell you my rice land in Bicol in November (will become
determinate when time comes).
d. Must have pecuniary value

DIFFERENT KINDS OF PRESTATIONS

a. TO GIVE: real obligation (It includes the obligation not to give): to deliver either
(a) a specific or determinate thing, or
(b) a generic or indeterminate thing.
-It may be remedied in case of breach with an action for specific performance.
b. TO DO: positive personal obligation; includes all kinds of work or service.
-It cannot be remedied in case of breach with an action for specific performance because it will
run counter with the constitutional provision against involuntary servitude. The remedy would
be to convert the obligation to do into obligation to give by way of damages.
c. NOT TO DO: negative personal obligation; to abstain from doing an act; includes the obligation not
to give.

CLASSIFICATION OF OBLIGATIONS:

From the viewpoint of “sanction”:

(1) Civil obligation (or perfect obligation) – the sanction is judicial process to compel performance
(2) Natural obligation – obligation based on equity & natural law which do not grant a right of action to
enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of
what has been delivered.
(3) Moral obligation (or imperfect obligation) – the sanction is conscience or morality

From the affirmativeness or negativeness of the obligation:

(1) Positive/affirmative - obligation to give or to do
(2) Negative – obligation not to do or not to give

From the viewpoint of persons obliged:

(1) Unilateral – only one of the parties is bound
(2) Bilateral – both parties are bound
(a) Reciprocal – performance by one is dependent on the other
(b) Non-reciprocal – performance by one is independent of the other

SOURCES OF OBLIGATIONS (Article 1157):

(This is exclusive. No cause of action if the source of the obligation is not within this provision.)
Art. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
 (5) Quasi-delicts.

In general, obligations emanate in one hand, from law; and on the other hand from private
acts, such as contracts or quasi contracts, delicts & quasi delicts. Those emanating from private acts,
in turn are produced by bilateral acts (like contracts) or by unilateral acts (as in quasi-contract, delict
or quasi delicts)

OBLIGATIONS ARISING FROM LAW: (ARTICLE 1158)

Obligations arising from law constitute a limitation upon individual freedom, imposing duties which
the obligor cannot avoid. Thus, these obligations are not to be presumed. Only those expressly determined
by the Civil Code and by special laws are demandable.

OBLIGATIONS ARISING FROM CONTRACTS: (ARTICLE 1159)

This is known as the principle of the obligatory force of contracts. Contractual obligations have the
force of law between the contracting parties and should be complied with in good faith. This provision
combines two concepts of Roman law – equity or good faith (ius gentium) and strict compliance by the
parties (ius chinile).

A contract is a meeting of minds between 2 persons whereby one binds himself, with respect to the
other, to give something or to render some service (Article 1305)

Principle of Anatomy of the Will/ Article 1306

The contracting parties may establish such stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy

Contracts are perfected by mere consent, and from that moment the parties are bound not only to
the fulfillment of what has been expressly stipulated but also to all the consequences which, according to
their nature, may be in keeping with good faith, usage and law (Article 1315).

In case of doubt, the interpretation consistent with good faith is followed (People’s Car vs.
Commando Security GR NO. L-36840 May 22, 1973). Party cannot excuse themselves on the ground that it
has become unprofitable. Law will not protect you from your own bad judgment.

Principle of Relativity of Contracts.

Contracts are effective only between the parties, including their heirs and assigns, except when the
rights & obligations are intransferrable by their nature, by stipulation or by provision of law.

OBLIGATIONS ARISING FROM QUASI-CONTRACTS (EX QUASI CONTRACTU): (ART 1160)

Quasi-Contract Defined:
It is a juridical relation arising from certain lawful, voluntary & unilateral acts with the objective of
preventing UNJUST ENRICHMENT or benefit at the expense of the other (Article 2142).
 There are various forms of Quasi Contracts (Articles 2164- 2175) but the two well-known forms (of quasi
contracts) are NEGOTIORUM GESTIO & SOLUTIO INDEBITI.
Quasi Contract Distinguished from Implied Contract:
1. An implied contract requires consent of the parties while Quasi-Contract is a unilateral act thus, it is
not predicated on consent.
2. The basis of implied contract is the will of the parties while the basis of Quasi-Contract is law, so that
there be no unjust enrichment.

An implied contract, is a contract which arises from the intention of the parties though not expressed,
but an agreement in fact is implied or presumed from their acts or there are circumstances showing
mutual intent to contract.

Negotiorum Gestio:
Art. 2144. Whoever voluntarily takes charge of the agency or management of the business or property of
another, without any power from the latter, is obliged to continue the same until the termination of the
affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to
do so. This juridical relation does not arise in either of these instances:

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

(2) If in fact the manager has been tacitly authorized by the owner.

In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404 regarding unauthorized contracts shall
govern.
In the second case, the rules on agency in Title X of this Book shall be applicable.

OBLIGATIONS ARISING FROM DELICTS (EX DELICTO): (ART 1161)

General Rule: If you commit a crime, you are liable both criminally and civilly. Exception: Crimes with no
private offended party (e.g. illegal gambling; contempt, etc.)

The basis of civil liability arising from crime is the fundamental principle of our law that “every person
criminally liable for felony is also civilly liable” (Article 100 RPC). Underlying this principle is the view that
from the standpoint of its effects, a crime has dual character:

1) An offense against the State because of the disturbance of the social order; and
2) An offense against the private person injured by the crime except when no civil liability arises on
the part of the offender either because there are no damages to be compensated or there is no private
person injured by the crime. Ex: “victimless crimes”: treason, rebellion, espionage, contempt or possession
of illegal drugs or firearms.

Otherwise stated, criminal liability will give rise to civil liability only if the same felonious act or omission
results in damage or injury to another& is the direct & proximate cause thereof.

Difference between Contractual Liability and Quasi-Delict:

 In quasi-delict, the obligation arises only when there is a violation. Without violation, there is no
obligation. It is the breach itself which gives rise to the obligation. In contracts, there is already an
obligation which exists prior to or even without a breach. The breach of the contract is immaterial to the
legal obligation.
Example: Contract of sale of watch. If both parties perform their obligation, the contract is
extinguished. There is no breach, but there is an obligation.
(Compare the above example with the one below)
Driving recklessly, A hits a child. When did the obligation came to being? When there was injury due
to negligence. (Negligence per se does not give rise to a quasi-delict unless there is injury.) Breach and quasi-
delict are inseparable. But contract and breach may be separable.
Additional Notes OBLIGATIONS arising from DELICT:
▪ Criminal liability will give rise to civil liability only if the same felonious act or omission results in
damage or injury to another and is the direct and proximate cause thereof.
▪ Damage or injury to another is the foundation of the civil action.
▪ Note that if the accused is acquitted on the ground that the accused is not the author (or did not
perform the act complained of) then the accused cannot be held liable civilly. The civil action that
may be instituted must be based on grounds other than delict.
▪ But if the acquittal is based on reasonable doubt, accused is not exempt from civil liability (that is if
there is damage or injury) based on delict which may be proved by preponderance of evidence. This
is the situation contemplated in Article 29 of the Civil Code which among others provide:
“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 the same act
or omission may be instituted”.
▪ The court may acquit the 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.

OBLIGATIONS ARISING FROM QUASI-DELICT: (ARTICLE 2176-2177)

 Quasi-delict is a civil law term while tort is a common law term.

 The same act or omission, characterized by fault or negligence, may produce two distinct sources of
obligations: 1) Delict; or 2) Quasi-delict.
 The existence of a contract between the parties is not a bar to the recovery of civil liability under
quasi-delict, if the same act that breaks the contract is also a tort. Hence, in this given scenario quasi
delict is another source of obligation (Air France vs.Carrascoso GR 21438 Sept 28,1966 EnBanc)
 SINGLE ACT OR OMISSION CAN GIVE RISE TO DIFFERENT CAUSES OF ACTION [Barredo vs Garcia G.R.
No. L-48006, July 8, 1942 EN BANC ]:
“…[A] concurrence of scope in regard to negligent acts does not destroy the distinction
between the civil liability arising from a crime and the responsibility for cuasi-delitos or culpa
extracontractual. The same negligent act causing damages may produce civil liability arising
from a crime... or create an action for cuasi-delito or culpa extra-contractual.”
*Note however, that under Article 2177, the plaintiff cannot recover damages twice for
the same act of omission of the defendant.
  The responsibility treated in Article 2180 (the responsibility of the parents, employers, teacher, etc.)
shall cease when the persons herein mentioned prove that they observed all the diligence of a good
father of a family to prevent damage.
 In Quasi-delict, the negligence or fault should be clearly established because it is the basis of the
action (Calalas vs CA, . GR No. 122039,May 31, 2000.332 SCRA 356)
Whenever an employee’s negligence causes damage or injury to another, there instantly
arises the presumption juris tantum that the employer failed to exercise the diligence of a
good father of the family and in the selection and supervision of its employees.
Who are liable for Quasi-delict?
a) The employee, under Article 2176
b) The employer, under Article 2180

Requisites for recovery under Quasi-delict:

1. Damage suffered by the plaintiff;
2. Fault or negligence of the defendant;
3. Causal connection between fault or negligence and the damage incurred by the plaintiff.

In Quasi-delict, the liability of the employer under Article 2180 of the civil code is direct & primary,
subject to the defense of due diligence in the selection and supervision of the employee. If the employee
and the employer are sued together, their liability is solidary.
An employer incurs no liability for quasi-delict if the employees conduct, act or omission is beyond
the range of employment or when they are considered acting on their own. This is so since an employer’s
liability for acts of its employees attaches only when the tortuous conduct of the employee relates to, or is
in the course of his employment.
▪ Take note however, that under the law on common carriage, the common carrier or employer is liable
for the death of or injuries to passengers through the negligence or willful acts of their employees,
although such employees may have acted beyond the scope of their authority or in violation of the
orders of the common carrier or employer. Such liability does not cease upon proof that the common
carrier or employer exercised all the diligence of the good father of the family in the selection or
supervision of the employee. (Article 1759)
Breach of contract of carriage:
▪ The source of liability is the breach of the contract because a common carrier is obliged to bring the
passenger safely to his destination (Article 1755)
▪ The liability devolves upon the employer because the driver is not a party to the contract of carriage
and may not be held liable under the contract (FGU Insurance Corp vs. GP Sarmiento Trucking Corp
GR # 141910 Aug 6, 2002).
▪ The employer cannot relieve himself of liability by proving that he exercised all the diligence of a good
father of a family in the selection and in the supervisions of employees (Article 1759 par 2 NCC)
 The plaintiff is not required to prove the existence of negligence in order to recover. Proof of the
contract and its non-performance is sufficient.
Under Article 1756 the common carrier is presumed to have been at fault or to have acted
negligently in case of death or injuries to its passengers.
Delict/ Crime of Reckless Imprudence resulting in homicide:
▪ The source of obligation is the crime committed by the employee.
▪ The employee (driver) is directly liable, while the employer is subsidiarily liable.
▪ 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 Article 2176 & 2180 of the
Civil Code. This articles pertains to the vicarious liability of the employer for quasi delict and does not
apply to civil liability arising from delict.
▪ The provisions on subsidiary liability under the penal code are deemed written into the judgments in
cases to which they are applicable. Thus, the court need not expressly pronounce the subsidiary
liability of the employer. But before the employer’s liability is enforced the following evidence must
be proved to exist:
a) That they are indeed the employers of the convicted employees;
b) They are engaged in some kind of industry;
c) The crime was committed by the employees in the discharge of their duties;
d) The execution against the employees has not been satisfied due to insolvency