M

O
D OBLIGATIONS – GENERAL
U PROVISIONS (ART. 1156 – 1162)
L EDMAR JAMES I. SEBUA, CPA

E
2

LAW 101 (LAW ON OBLIGATIONS & CONTRACTS)||AY. 2020-

2021
LEARNING OBJECTIVES

At the end of the module, learner must be able to:

 Define an obligation according to the Civil Code; define juridical

necessity;
 Determine the nature of obligations under Civil Code and the
Essential Requisites of an Obligation;
 Know the kinds of Obligation according to the subject matter;
 Determine sources of Obligations; sources classified;
 Explain Contractual Obligations; compliance in Good Faith;
 Explain Quasi-contractual obligations and it kinds;
 Determine the civil liability arising from crimes and the scope of
civil liability;
 Determine obligations arising from Quasi-delicts, requisites, and
crime as distinguished from Quasi-delicts.
INTRODUCTION

“To realize one’s destiny is

a person’s only obligation” – Paulo Coelho

There are very few professions in which people just sit down and
think hard for five or six hours a day all by themselves. Of course its
why you want to become one – because you have the liberty to do that,
but once you have the liberty, you also have the obligation to do it. We
are not bound to win, but we are bound to be true. We are not bound to
succeed, but we are bound to live up to what light we have.
 OBLIGATION – DEFINED

OBLIGATION – originate from the latin word obligatio, means tying or binding.

It is a tie or bond recognized by law by virtue of which one is bound in favor of

another to render something – and this may consist in giving a thing, doing a
certain act, or not doing a certain act.

The definition stresses the duty of the debtor or obligor (he who has a duty of Art. 1156. An
giving, doing, or not doing) under the law. obligation is a
juridical necessity
Obligation is a juridical necessity because in case of non-compliance, the courts to give, to do or
of justice may be called upon by the aggrieved party to enforce its fulfillment or, not to do.
in default thereof, the economic value that it represents.

In other words, the debtor MUST comply with his obligation whether he likes it
or not, otherwise, his failure to fulfill the obligation (whether it is giving a thing,
doing an act, or not doing an act) will result in some harmful or undesirable
circumstances as such debtor can be sued (kasuhan) by the aggrieved party.
 OBLIGATION – NATURE
Obligations which are sought out under the Civil Code are known as Civil Obligations.

Civil obligations – obligations which give to the creditor or obligee a right under the law to
enforce their performance in courts of justice.
 Juridical necessity to give, to do or not to do (1156)
 Right of action (or to sue) to compel their performance
 Right to enforce the obligation against the debtor/obligor in a court of law in case
of breach (nonperformance).
Provisions on
Civil obligations must be distinguished from Natural Obligations. Natural Obligations
are found on Title III
Natural obligations – do not grant a right of action to enforce their performance although (Arts. 1423 – 1430)
in case of voluntary fulfillment by the debtor, the latter (debtor) may not recover what has
been delivered or rendered by reason thereof.
 Based on equity and natural law.
 Basic understanding of right and wrong based on an understanding of a right and
wrong.
 Based on conscience.
 If in case of noncompliance, the courts of justice cannot be called upon for its
enforcement.
 OBLIGATION – ESSENTIAL REQUISITES
Every obligation has four (4) essential requisites (requirements):

1. Passive subject - obligor/debtor/borrower/defendant/he who has the obligation) –

the one who has the duty of giving, doing or not doing
2. Active subject (obligee/creditor/lender/plaintiff/he who has the right ) – the one in
whose favor the obligation is constituted
3. Object (prestation) - the conduct which has to be observed by the debtor/obligor.
Without the prestation, there is nothing to perform. It must be noted that
4. Juridical or legal tie (Vinculum/Vinculum Juris/Efficient tie/Efficient cause) – ALL of these
This binds or connects the parties to the obligation. It can be determined by knowing requisites/requirement
the source of obligation. s MUST be present in
order for an Obligation
EXAMPLE: to exist.
Under a contract, Mr. AB bound(obligates) himself to build a bahay-kubo for Ms. YZ for
P2,000,000.
1. Passive subject – Mr. AB (duty of doing – to build a house)
2. Active subject – Ms. YZ (has the right to demand performance)
3. Object or prestation – Building of the bahay-kubo
4. Juridical tie – the contract agreement.
 OBLIGATION – KINDS ACCORDING TO SUBJECT MATTER

Kinds of obligation according to subject matter:

1. Real obligation (obligation to give) – is that in which the subject matter is a THING
which the debtor must deliver to the creditor
Example: X (seller) binds himself to deliver a book to Y (buyer).
Y is bound to give cash to X.

The thing that must be delivered may be a SPECIFIC THING or GENERIC THING. (will be
discussed in next module under Article 1163)
An obligation may be
either real obligation
2. Personal obligation (obligation to do or not to do) – is that in which the subject
or personal obligation
matter is an ACT TO BE DONE or NOT TO BE DONE.
or both.
Two types of personal obligation:
a) Positive personal obligation (to do)
Example: X binds himself to repair the piano of Y.
Y binds to paint the house of X.

b) Negative personal obligation (not to do; also includes obligations no to give)

Example: X obliges himself not to build a fence on a portion of his lot in
favor of Y in order for Y to have a right of way over said lot.
 OBLIGATION – SOURCES
Sources of obligations are hereby enumerated:
1. Law (obligation ex lege) – when they are imposed by law itself.
 Obligations derived from law are not presumed (Art. 1158). To be demandable,
they must be clearly and expressly set forth in the law.

Examples: Taxes, duty of husband and wife to support family, minimum wage,
workmen compensation act, etc.
Art. 1157. Obligations
2. Contracts (obligation ex contractus) – when they arise from the stipulation or arise from:
agreement of the parties. (Art. 1305). 1) Law;
 Obligations arising from contracts have the force of law between the contracting 2) Contracts;
parties and should be complied with in good faith. (Art. 1159) 3) Quasi-contracts;
4) Acts or omissions
punished by law; and
Examples: The obligation to repay a loan or debt by virtue of a written 5) Quasi-delicts
agreement.

3. Quasi contracts (obligation ex quasi contractu) – when they arise from lawful,
voluntary and unilateral acts which are enforceable to the end that NO ONE SHALL
BE UNJUSTLY ENRICHED OR BENEFITED AT THE EXPENSE OF ANOTHER.
 Obligations derived from quasi-contracts shall be subject to the provisions of
Chapter 1, Title XVII of this Book. (Art. 1160)
 OBLIGATION – SOURCES
Kinds of Quasi-Contracts. The principal kinds of quasi-contracts are:
1. Negotiorum gestio – voluntary management of the property or affairs of another
WITHOUT the knowledge or consent of the latter.

Example:
ENCOB went to Wuhan, China with his family without leaving somebody to look
after his house in Cebu City. While in Wuhan, a big fire broke out near the house of
ENCOB. Through the effort of LAKDAWN, a neighbor, the house of ENCOB was saved Principal kinds includes:
from being fully burned. LAKDAWN, however, incurred expenses. 1. Negotiorum gestio;
In this case, ENCOB has the obligation to pay or reimburse LAKDAWN for said 2. Solutio indebiti; and
expenses, although he did not actually give his consent to the act of LAKDAWN in saving 3. Other innominate
his house, on the principle of quasi-contract (negotiorum gestio). quasi-contracts (can be
found in Art. 2164 –
2175 of the Civil
2. Solutio indebiti – juridical relation which is created when something is received when Code).
there is no right to demand it and it was unduly delivered through mistake.

Example:
Enrile owes Drilon P1,000. If Enrile paid Poe believing that Poe was authorized to
receive payment in behalf for Drilon, the obligation to return on the part of Poe arises.
Likewise, if Enrile paid Drilon P2,000 by mistake, Drilon must return the excess of P1,000.
 OBLIGATION – SOURCES
Sources of obligations are hereby enumerated:
4. Crimes or Acts or omissions punished by law (Delict/obligation ex maleficio or
delicto) – when they arise from civil liability which is the CONSEQUENCE OF A
CRIMINAL OFFENSE.
 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
XVII of this book, regulating damages. (Art. 1161) Every person which is
CRIMINALLY LIABLE
Examples: The obligation of a thief (carnapper) to return the car stolen by him; for an act or omission is
the duty of a killer to indemnify the heirs of his victim also CIVILLY LIABLE
for damages. But a person
not criminally responsible
Scope of civil liability (Art. 1161). The extent of the civil liability arising from crimes is
may still be liable civilly.
governed by the Revised Penal Code and the Civil Code. This civil liability includes:
1. Restitution - The thing itself must be returned or restored.
2. Reparation - The court shall determine the amount of damage, taking into
consideration the price of the thing, whenever possible, and its special
sentimental value to the injured party.
3. Indemnification - Indemnification for consequential damages shall include not
only those caused the injured party, but also those suffered by his family or by a
third person by reason of the crime.
 OBLIGATION – SOURCES
Civil liability illustrated:
Example: ABC stole the car of XYZ. If ABC is convicted, the court will order ABC:
1. To return the car or to pay its value if it was lost or destroyed (restitution);
2. To pay for any damage caused to the car (reparation); and
3. To pay such other damage suffered by XYZ as a consequence of the crime
(indemnification).

5. Quasi-delicts or torts (obligation ex quasi maleficio or quasi delicto) – when they The pertinent
arise from damage caused to another through an act or omission, there being fault or provisions for
negligence, but NO CONTRACTUAL relation exists between the parties. obligations arising
 Obligations derived from quasi-delicts shall be governed by the provisions of from quasi-delicts are
Chapter 2, Title XVII of this Book, and by special laws. (Art. 1162) found on Arts. 2176 –
2194.
Requisites of quasi-delict. Before a person can be held liable for quasi-delict, the
following requisites must be present:
1. There must be an act or omission of an act;
2. There must be fault or negligence;
3. There must be damage caused;
4. There must be a direct relation or connection of cause and effect between the act
or omission of an act and the damage caused; and
5. There is no pre-existing contractual relation between the parties.
 OBLIGATION – SOURCES
Quasi-delict illustrated:
Example:
While playing softball with his friends, Boy broke the window glass of Girl, his
neighbor. The accident would not have happened had they played a little farther from the
house of Girl.
In this case, Boy is under the obligation to pay the damage caused to Girl by his act
although there is no pre-existing contractual relation between them because he is guilty of
fault or negligence. It may be noted however
that obligations from quasi-
Crimes distinguished from quasi-delict: contracts, delict, and quasi-
delicts are really imposed
Crime/Delict Quasi-delict or came from law. Thereby,
primary sources of
Malicious intent or Criminal negligence Negligence only obligations are only Law
and Contracts.
Affects public interest Affects private interest

Has criminal and civil liabilities Has civil liability only

Purpose is punishment to the offending party. Purpose is indemnification to the offended

party.
Criminal liability cannot be compromised Civil liability may be compromised.
 CONTRACTUAL OBLIGATIONS &
COMPLIANCE IN GOOD FAITH

Article 1159 speaks about contractual obligations.

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

Note: Contracts will be extensively discussed in the succeeding module.

Obligations arising from contracts have the force of law between the parties (debtor and
It may be noted however
creditor). This does not mean however, that contract is superior to the law. As a source of that obligations from quasi-
obligation, contract must not be contrary to the law, morals, good customs, public order, contracts, delict, and quasi-
and public policy, otherwise, it is INVALID or VOID in the eyes of the law. delicts are really imposed
or came from law. Thereby,
Compliance in good faith means performance in accordance with the terms or stipulations primary sources of
obligations are only Law
of the contract or agreement. Sincerity and honesty must be observed to prevent one party and Contracts.
from taking unfair advantage over the other. Non-compliance by one party with his part in
the obligation after receiving the benefits of a contract would constitute unjust enrichment
on his part. It will be tantamount to BREACH OF CONTRACT/AGREEMENT.
SUMMARY
 Obligation is a juridical necessity to give (real obligation), to do (positive personal
obligation), or not to do (negative personal obligation).
 It is a juridical necessity because in case of non-compliance or non-fulfilment, the
courts of justice may be called upon by the aggrieved party to enforce the obligation
in a manner it is intended.
 Civil obligations must be distinguished from Natural Obligations whereas the former
can be enforced in courts of justice while the latter cannot be enforced in a court of
justice and is only based on mere conscience.
 Obligations has 4 major elements which includes an active subject (creditor), a
passive subject (debtor), object or prestation, and juridical or legal tie.
 Sources of obligation includes: (A) Law; (B) Contracts; (C) Quasi-contracts; (D)
Crimes or acts or omissions punishable by law(delicts); and (E) Quasi-delicts.
 Kinds of quasi-contracts include Negotiorum gestio and Solutio indebiti.
 The scope of civil liability for delicts include: (1) Restitution; (2) Reparation; and
(3) Indemnification.
 Obligations must be complied within good faith, otherwise, it will result in a breach
of agreement/contract.
END OF MODULE
2
Source: Law on Obligations and Contracts (Author: Hector S. De Leon)