Obligation-and-Contracts-Jurado-1.pdf - BOOK IV OBLIGATIONS AND CONTRACTS TITLE I OBLIGATIONS CHAPTER 1 GENERAL PROVISIONS Article 1156 An obligation is

Obligation-and-Contracts-Jurado-1.pdf - BOOK IV OBLIGATIONS...

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Unformatted text preview: BOOK IV OBLIGATIONS AND CONTRACTS TITLE I — OBLIGATIONS CHAPTER 1 GENERAL PROVISIONS Article 1156. An obligation is a juridical necessity to give, to do or not to do.1 Concept of Obligations. — Evidently, the above definition of an obligation is adopted from Sanchez Roman’s classic definition of an obligation as “the juridical necessity to comply with a prestation.”2 Manresa, on the other hand, defines it as a “legal relation established between one person and another, whereby the latter is bound to the fulfillment of a prestation which the former may demand of him.’’3 It must be observed, however, that obligations may be either civil or natural.4 A civil obligation is one which has a binding force in law, and which gives to the obligee or creditor the right of enforcing it against the obligor or debtor in a court of justice. This is the obligation which is defined in Art. 1156 of the Code. A natural obligation, on the other hand, is one which cannot be enforced by action, but which is binding on the party who makes it in conscience and according to New provision. 4 Sanchez Roman 53. 3 8 Manresa, 5th Ed., Bk. 1, p. 21. 4 Art. 1423, Civil Code. 1 2 1 Art. 1156 OBLIGATIONS the natural law.5 Thus, when an action has prescribed in accordance with the statute of limitations, a natural obligation still subsists, although the civil obligation is extinguished. This may be illustrated by the following example: If A has a right of action, evidenced by a promissory note, to collect one thousand pesos from B, and such promissory note prescribes after the expiration of ten years from the time it accrues,6 although the latter is no longer bound to pay the obligation in accordance with the statute of limitations, he is still bound to pay in accordance with equity and natural law.7 It is, therefore, clear that a civil obligation and a natural obligation may be distinguished from each other as follows: (1) A civil obligation is based on positive law, while a natural obligation is based on equity and natural law; and (2) The former is enforceable in courts of justice, while the latter is not.8 Requisites of Obligations. — An obligation has four essential requisites. They are: (1) A juridical or legal tie, which binds the parties to the obligation, and which may arise from either bilateral or unilateral acts of persons; (2) An active subject known as the obligee or creditor, who can demand the fulfillment of the obligation; (3) A passive subject known as the obligor or debtor, against whom the obligation is juridically demandable; and (4) The fact, prestation or service which constitutes the object of the obligation.9 The form in which the obligation is manifested is sometimes added as a fifth requisite. As a general rule, however, it cannot be considered as essential. Obligations arising from law, quasi-contracts, acts or omissions punished by law, and quasi-delicts do not require any form whatsoever, yet there can be no question regard- 3 Bouvier’s Law Dictionary, 2394-2395. Art. 1144, Civil Code. 7 Agoncillo vs. Javier, 38 Phil. 424; Villaroel vs. Estrada, 71 Phil. 40. 8 Art. 1423, Civil Code. 9 Giorgi, Teoria de las Obligaciones, Vol. 1, p. 13; 3 Castan, 7th Ed., p. 20. 5 6 2 GENERAL PROVISIONS Art. 1156 ing their validity or binding force. It is only in obligations arising from certain contracts that it becomes essential. Thus, in a contract involving a donation of personal property whose value exceeds P5,000.00, the law requires that the donation and the acceptance shall be made in writing;10 in a contract of sale of a piece of land or any interest therein through an agent, the law requires that the authority of the latter shall be in writing;11 in a contract of simple loan or mutuum, the law requires that any agreement with respect to interest shall be expressly stipulated in writing;12 in a contract of antichresis, the law requires that the amount of the principal and of the interest shall be specified in writing;13 in a contract involving a donation of immovable property, the law requires that the donation shall be made in a public document, while the acceptance shall be made either in the same deed of donation or in a separate public document;14 in a contract of partnership where immovable property or real rights are contributed to the common fund, the law requires that the contract shall be in a public instrument to which an inventory of the property or real rights, signed by the partners, must be attached;15 in a contract of chattel mortgage, the law requires that the personal property which is the subject matter of the contract shall be recorded in the Chattel Mortgage Register as a security for the performance of an obligation;16 and in a contract involving the sale or transfer of large cattle, the law requires that the sale or transfer shall be registered.17 Non-compliance with such formalities would have the effect of rendering the contract or agreement void or inexistent. Classification of Obligations. — The following is the primary classification of obligations under the Civil Code: (1) Pure and conditional (Arts. 1179-1192). (2) With a period (Arts. 1193-1198). (3) Alternative and facultative (Arts. 1199-1206). Art. 748, Civil Code. Art. 1874, Civil Code. 12 Art. 1956, Civil Code. 13 Art. 2134, Civil Code. 14 Art. 749, Civil Code. 15 Arts. 1771, 1773, Civil Code. 16 Art. 2140, Civil Code. 17 Sec. 22, Act No. 1147; Art. 1581, Civil Code. 10 11 3 Art. 1156 OBLIGATIONS (4) Joint and solidary (Arts. 1207-1222). (5) Divisible and indivisible (Arts. 1223-1225). (6) With a penal clause (Arts. 1226-1230). There are, however, other classifications of a secondary character which can be gathered from scattered provisions of the Civil Code, such as: (1) Legal, conventional and penal;18 (2) Real and personal;19 (3) Determinate and generic;20 (4) Positive and negative;21 (5) Unilateral and bilateral;22 (6) Individual and collective;23 (7) Accessory and principal.24 The following, on the other hand, is the classification of obligations according to Sanchez Roman:25 (1) As to juridical quality: (a) Natural — when the obligation is in accordance with natural law. (b) Civil — when the obligation is in accordance with positive law. (c) Mixed — when the obligation is in accordance with both natural and positive law. Arts. 1158-1162, Civil Code. Arts. 1163-1168, Civil Code. 20 Arts. 1163-1166, Civil Code. 21 Arts. 1167-1168, Civil Code. 22 Arts. 1169-1191, Civil Code. 23 Arts. 1207, 1223, Civil Code. 24 Arts. 1166, 1226, et seq., Civil Code. 25 8 Sanchez Roman 20-40. 18 19 4 GENERAL PROVISIONS 2. Art. 1156 As to parties: (a) Unilateral and bilateral — unilateral, where only one party is bound, and bilateral, where both parties are mutually or reciprocally bound. (b) Individual and collective — individual, where there is only one obligor, and collective, where there are several obligors. The latter may be joint, when each obligor is liable only for his proportionate share of the obligation, or solidary, when each obligor may be held liable for the entire obligation. 3. As to object: (a) Determinate and generic — determinate, when the object is specific; generic, when the object is designated by its class or genus. (b) Simple and multiple — simple, when there is only one undertaking; multiple, when there are several undertakings. Multiple obligations may be conjunctive, when all of the undertakings are demandable at the same time, or distributive, when only one undertaking out of several is demandable. Distributive obligations, on the other hand, may be alternative, when the obligor is allowed to choose one out of several obligations which may be due and demandable, or facultative, when the obligor is allowed to substitute another obligation for one which is due and demandable. (c) Positive and negative — positive, when the obligor is obliged to give or do something; negative, when the obligor must refrain from giving or doing something. (d) Real and personal — real, when the obligation consists in giving something; personal, when the obligation consists in doing or not doing something. (e) Possible and impossible — possible, when the obligation is capable of fulfillment in nature as well as in law; impossible, when the obligation is not capable of fulfillment either in nature or in law. (f) Divisible and indivisible — divisible, when the obligation is susceptible of partial performance; indivisible, when the obligation is not susceptible of partial performance. 5 Art. 1157 OBLIGATIONS (g) Principal and accessory — principal, when it is the main undertaking; accessory, when it is merely an undertaking to guarantee the fulfillment of the principal obligation. 4. As to perfection and extinguishment: (a) Pure — when the obligation is not subject to any condition or term and is immediately demandable. (b) Conditional — when the obligation is subject to a condition which may be suspensive, in which case the happening or fulfillment of the condition results in the birth of the obligation, or resolutory, in which case the happening or fulfillment of the condition results in the extinguishment of the obligation. (c) With a term or period (a plazo) — when the obligation is subject to a term or period which may be suspensive or from a day certain, in which case the obligation is demandable only upon the expiration of the term, or resolutory or to a day certain, in which case the obligation terminates upon the expiration of the term. Art. 1157. Obligations arise from: 1. Law; 2. Contracts; 3. Quasi-contracts; 4. Acts or omissions punished by law; and 5. Quasi-delicts.26 Sources of Obligations. — In Roman law, the sources of obligations are: (1) contractu; (2) quasi-contractu; (3) maleficio; and (4) quasi-maleficio.27 These sources are preserved in the Civil Code with the addition of law or lege.28 The addition of lege as an independent source of obligations, however, has been criticized as theoretically erroneous. Thus, according to the Supreme Court: Art. 1089, Spanish Civil Code, in amended form. 8 Manresa, 5th Ed., Bk. 1, p. 35. 28 Art. 1157, Civil Code. 26 27 6 GENERAL PROVISIONS Art. 1158 “This enumeration of the sources of obligations supposes that the quasi-contractual obligation and the obligation imposed by law are of different types. The learned Italian jurist, Jorge Giorgi, criticizes this assumption and says that the classification embodied in the Code is theoretically erroneous. His conclusion is that one or the other of these categories should have been suppressed and merged in the other. (Giorgi, Teoria de las Obligaciones, Spanish Ed., Vol. 5, Arts. 5, 7, 9) The validity of the criticism is, we think, self-evident and it is of interest to note that the common law makes no distinction between the two sources of liability. The obligations which in the Code are indicated as quasi-contracts, as well as those arising ex lege, are in the common law system merged into the category of obligations imposed by law, and all are denominated implied contracts.’’29 Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book.30 Obligations Arising from Law. — Unlike other obligations, those derived from law can never be presumed. Consequently, only those expressly determined in the Civil Code or in special laws are demandable. These obligations shall be regulated by the precepts of the law which establishes them, and as to what has not been foreseen, by the provisions of Book IV of the Civil Code.31 How can we determine whether an obligation arises from law or from some other source, such as a contract, quasi-contract, criminal offense or quasi-delict? It must be noted that in the birth or generation of an obligation, there is always a concurrence between the law which establishes or recognizes it and an act or condition upon which the obligation is based or predicated. According to Manresa, when the law establishes the obligation and the act or condition upon which it is based is nothing more than a factor for determining the moment when it becomes demandable, then the law Leung Ben vs. O’Brien, 38 Phil. 182. Art. 1090, Spanish Civil Code. 31 Art. 1158, Civil Code. 29 30 7 Art. 1159 OBLIGATIONS itself is the source of the obligation; however, when the law merely recognizes or acknowledges the existence of an obligation generated by an act which may constitute a contract, quasi-contract, criminal offense or quasi-delict and its only purpose is to regulate such obligation, then the act itself is the source of the obligation and not the law.32 Thus, if A loses a certain amount to B in a game of chance, according to Art. 2014 of the Civil Code, the former may recover his loss from the latter, with legal interest from the time he paid the amount lost. It is evident that in this particular case the source of the obligation of B to refund to A the amount which he had won from the latter is not a contract, quasi-contract, criminal offense or quasidelict, but the law itself.33 The same can also be said with regard to the obligation of the spouses to support each other,34 the obligations of employers under the Labor Code,35 the obligations of the owners of the dominant and servient estates in legal easements,36 and others scattered in the Civil Code and in special laws. Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.37 Obligations Arising from Contracts. — A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.38 As a rule, 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 of the consequences which according to their nature may be in keeping with good faith, usage and law.39 These contracts are commonly called consensual contracts. Once the contract is perfected, the valid contract has the force of law binding the parties to comply therewith in good faith, where neither one may renege therefrom without the consent of the other. (Tiu Peck vs. CA 221 SCRA 618 [1993]) There are certain 8 Manresa, 5th Ed., Bk. 1, p. 48. Leung Ben vs. O’Brien, 38 Phil. 182. 34 Art. 291, Civil Code; Pelayo vs. Lauron, 12 Phil. 453. 35 Bautista vs. Borromeo, 35 SCRA 119. 36 Arts. 634, 687, Civil Code. 37 Art. 1091, Spanish Civil Code, in modified form. 38 Art. 1305, Civil Code. 39 Art. 1315, Civil Code. 32 33 8 GENERAL PROVISIONS Art. 1160 contracts, however, called real contracts, such as deposit, pledge and commodatum, which are not perfected until the delivery of the object of the obligation.40 Whether the contract is consensual or real, the rule is that from the moment it is perfected, obligations which may be either reciprocal or unilateral arise. Reciprocal obligations are those where the parties are mutually or reciprocally obliged to do or to give something; unilateral obligations, on the other hand, are those where only one of the parties, the obligor, is obliged to do or to give something. Unlike other kinds of obligations, those arising from contracts are governed primarily by the agreement of the contracting parties. This is clearly deducible not only from the nature of contracts, but also from Art. 1169 of the Code which declares that such obligations have the force of law between the contracting parties and should be complied with in good faith. “Compliance in good faith’’ means performance in accordance with the stipulations, clauses, terms and conditions of the contract. Consequently, the Code recognizes the right of such contracting parties to 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.41 Good faith must, therefore, be observed to prevent one party from taking unfair advantage over the other party. In the case of Royal Lines, Inc. vs. Court of Appeals, 143 SCRA 608 (1986), it was ruled that evasion by a party of legitimate obligations after receiving the benefits under the contract would constitute unjust enrichment on his part. However, in default of an agreement, the rules found in the Civil Code regulating such obligations are applicable.42 Art. 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book.43 Obligations Arising from Quasi-Contracts. — Quasicontracts are those juridical relations arising from lawful, voluntary Art. 1316, Civil Code. Art. 1306, Civil Code. 42 Art. 1305, et seq., Civil Code. 43 New provision. 40 41 9 Art. 1161 OBLIGATIONS and unilateral acts, by virtue of which the parties become bound to each other, based on the principle that no one shall be unjustly enriched or benefited at the expense of another.44 The most important of these juridical relations which are recognized and regulated by the Civil Code are negotiorum gestio45 and solutio indebiti.46 Negotiorum gestio is the juridical relation which arises whenever a person voluntarily takes charge of the agency or management of the business or property of another without any power or authority from the latter.47 In this type of quasi-contract, once the gestor or officious manager has assumed the agency or management of the business or property, he shall be obliged to continue such agency or management until the termination of the affair and its incidents,48 exercising such rights and complying with such obligations as provided for in the Code.49 Solutio indebiti, on the other hand, is the juridical relation which arises whenever a person unduly delivers a thing through mistake to another who has no right to demand it.50 In this type of quasi-contract, once the delivery has been made, the person to whom the delivery is unduly made shall have the obligation to return the property delivered or the money paid.51 The Civil Code provides other instances of quasi-contract. Examples are those found in Articles 2159, 2164 to 2175. In the case of Perez vs. Palomar, 2 Phil. 682, it was significantly noted that in a quasi contract where no express consent is given by the other party, the consent needed in a contract is provided by law through presumption (presumptive consent). Presumptive consent gives rise to multiple juridical relations resulting in obligations for delivery of the thing and rendering of service. Art. 1161. Civil obligations arising from offenses shall be governed by the penal laws, subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Art. 2142, Civil Code. Art. 2144, Civil Code. 46 Art. 2154, Civil Code. 47 Art. 2144, Civil Code. 48 Ibid. 49 Arts. 2144-2152, Civil Code. 50 Art. 2154, Civil Code. 51 Ibid. 44 45 10 GENERAL PROVISIONS Art. 1161 Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages.52 Obligations Arising from Criminal Offenses. — As a rule, every person liable for a felony is also civilly liable.53 This principle is based on the fact that, generally, a crime has a dual aspect — the criminal aspect and the civil aspect. Although these two aspects are separate and distinct from each other in the sense that one affects the social order and the other, private rights, so that the purpose of the first is to punish or correct the offender, while the purpose of the second is to repair the damages suffered by the aggrieved party, it is evident that the basis of the civil liability is the criminal liability itself. Please note, however, that there are offenses and special crimes without civil liability. Examples are crimes of treason, rebellion, illegal possession of firearm and gambling....
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