1/3/2018 ARTICLE 1156 – 1160 DISCUSSION – Obligations and Contracts

ARTICLE 1156 – 1160 DISCUSSION

January 31, 2017 cdizonblog

Title I. -OBLIGATION

Chapter 1.

GENERAL PROVISIONS

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

Obligation – The requirement to do what is imposed by law, promise, or contract. Obligation is synonymous with duty. It’s a
tie which binds us to pay or to do something agreeably to the laws and customs of the country. According to Arias Ramos,
obligation is nothing more than the duty of a person (debtor or obligor) to satisfy a specific and demandable claim of another
person (creditor or obligee) which if breached is enforced in court.

Elements of Obligation

1.  Active subject (creditor or obligee). – the person who has the right to demand the fulfillment of the obligation.
2. Passive subject (debtor or obligor).- the one who is bound to the fulfillment of the obligation.
3. Prestation or object  – It may consist in giving, doing, or not doing. Without prestation, there is nothing to
perform. Object refers to the property or the things. Prestation is the subject matter of the obligation.
4. Efficient cause (juridical or legal tie) – that which binds or connects the parties to the obligation. The tie is an obligation
can easily determined by knowing the source of the obligation.

Right and obligation, Correlated  – When there is right there is a corresponding obligation. Right is the active aspect (credit)
and obligation is the passive aspect (debt).

Prestation – Particular conduct of the debtor. It may consist in giving, doing or not doing something.

1. Obligation to give –consist in the delivery of a movable or immovable thing to the creditor. Example: Obligation to deliver
the thing in sale, deposit, pledge, donation, anti-chresis.
2. Obligation to do – covers all kinds of works or services whether physical or mental.  Example:  Contract for professional
services like painting, modelling, singing.
3. Obligation not to do – consist in refraining from doing some acts like producing aggravating noise, offensive odor, smoke,
heat.

Nature of obligations in Art. 1156; Civil and Natural Obligations Distinguished.  –

The definition of obligation in Article 1156 refers to civil obligations which are enforceable in court when breached. It does not
cover natural obligations.

Kinds of Obligations

(a) As to judicial enforceability

1. Civil obligation –
It is an when the debtor or obligor did not fulfilled its obligation to the creditor or obligee  that can be
enforced through a civil suit or action in a court.
2. Natural obligation – It is a special kind of obligation which cannot be enforced in court but which authorizes the retention
of the voluntary payment or performance made by the debtor.
3. Moral obligation –  It is a duty which one owes, and which he ought to perform, but not legally bound to fulfill. This is an
obligation from moral law developed by the church the church and not enforced on court. It deals with the spiritual
obligation of a person in relation to his God or Church.

(b) As to the subject matter

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1. Real obligation – obligation to give

2. Personal obligation  – obligation to do or not to do.

(c) As to the number of persons bound to perform

1. Unilateral obligation – It is when only one of the parties are bound to fulfill a prestation.
2. Bilateral obligation – It is when both parties are bound to perform.

Reciprocal obligation  arewhich arise from the same cause, wherein each party is a debtor and a creditor of the other. (ASJ
Corporation vs. Evangelista, 545 SCRA 300)

(d) As to the capacity of fulfillment

1. Possible obligation – It is when an obligation that can be fulfilled in nature or in law.
2. Impossible obligation – It is when an obligation that cannot be fulfilled in nature or in law.

(e) As to susceptibility of partial fulfillment

1. Divisible obligation – Requires the giving of definite things and the same can be partially performed.
2. Indivisible obligation – Requires the giving of definite things and the same cannot be partially performed.

(f) as to their dependance upon one another

1. Principal obligation – Main obligation created by the parties.

2. Accessory obligation – Secondary obligation created to guarantee the fulfillment of the principal obligation.

(g) As to the existence of a burden or condition

1. Pure obligation  – Not subject to any conditions and no specific date is mentioned for its fulfillment but immediately
demanded.
2. Condition obligation – Subject
to conditions, it can be suspensive and performance of which depends on an uncertainty.
3. Obligation with a term –
Subject to the happening of an event which will surely happen, but the date is uncertain. The
obligation becomes demandable only when the term expired.

(h) As to the nature of performance

1. Positive obligation – When the debtor is oblige to give or to do something in favor of the creditor.
2. Negative obligation  – When the debtor is not oblige to give or to do  anything. That is, he must refrain from doing
something.

(i) As to the nature of creation of the obligation

1. Legal obligation – Obligation imposed by law.

2. Conventional obligation  – Obligation established by the agreement of the parties like contracts.

(j) As to the character of responsibility or liability

1. Joint obligation – Obligation where creditor has the right to demand full and complete compliance of an obligation against
both of the debtors.
2. Solidary obligation  – Obligation that are bound together, each liable for the whole performance, or obligees to be bound
together, all owed just a single performance and each entitled to the entirety of it.

(k) As to the grant of right to choose one prestation out of several, or to substitute the first one.

1. Alternative obligation – Obligation where the obligor may choose one out of several prestation.

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2. Facultative obligation  – Obligation where there are only one prestation. But the obligor may render one in substitution of
the first one.

(l) As to the imposition of penalty

1. Simple obligation – Obligation where there is no penalty imposed for violation of terms thereof.
2. Obligation with penalty – Obligation where there is a penalty imposed for violation of terms thereof.

Art. 1157. Obligation arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts. (1089a)

Source of Obligation; Criticism in the  inclusion of law as another source. – In Roman Law, the sources of obligation are (1)
ex-contractu, (2) quasi-contractu, (3) ex-malficio and (4) quali-malficio. The fifth one  was added namely;  ex-lege  (law), but
was not entirely accepted. (Leung Ben vs. O’Brien, 38 Phil. 182)

Enumerated Source of Obligation, Exclusive  – The enumeration of the sources of obligations are exclusive. No obligation
exist it its source is not one of those enumerated in Art. 1157 (Navales vs. Rias, 8 Phil. 508)

Illustrative of the Sources of Obligation. – 

1. Obligation arising from law – Like the duty of the spouses to provide mutual support and respect to one another. Duty of
tax payer to pay their taxes to the government (BIR)
2. Obligation arising from contract – Like the duty of a contracting to fulfill his undertaking in the contract.
3. Obligation arising from a quasi-contract – like the duty of the recipient to return what was delivered to him by mistake.
4. Obligation arising from delict or crime – such as duty of the culprit to pay actual damages for causing the death of a
person.
5. Obligation arising from quasi-delict or tort – like the duty of the tortfeasor to pay damages for injuries of damages to his
fault, omission or negligence.

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. (1090)

Obligation Derived from Law, Never Presumed.  – There are obligations in law such as obligation from parents to support
minor children, the obligation of lower estates to allow or receive the waters naturally descending from the higher estates,
obligation to pay taxes, the obligation of warranty of a co-owner after partition, and obligation to deliver the presumptive
legitimates of children.

Unless such obligations are expressly provided by law, they are not demandable and enforced.

Regulation of Obligations Arising from Law.  – These obligation shall be regulated by the provisions of the law, which
establishes them. The civil code is applicable suppletorily.

Factor to Determine whether an Obligation Arises from Law or from other sources.  – This is when an obligation
generated from a contract, its only purpose was to perform on what is stated which did not arise from it, the act itself is the
source of the obligation and not the law. And, when the law obliges to act upon which it is based in nothing more than a mere
factor of determining the moment when it comes demandable, then this source of obligation is the law itself.

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1. When the loser has a chance to recover his lost with interest in illegal gambling  indebitatus assumpit  (Leung Ben vs.
O’Brien, 38 Phil. 182)
2. When the a bank is not liable to pay the depositor made in an insolvent bank because there is no law authorizing it.
(Serrano vs. Central Bank 96 SCRA 96)
3. When a lessor has no obligation to allow the lessee to exercise any right of preemption or redemption of the house and lot
of the lessor, which was not built by the lessee. There is no law directing to do so. (Santos vs. Court of Appeals 128
SCRA 428)
4. When an employee has no right to held the employer liable to the pay the attorney’s fee. Because there is no law
requiring it.(Dela Cruz vs. Northern Theatrical Enterprises 95 Phil. 739)

Art. 1159 Obligation arising from contracts have the force of law between the contracting parties and should be compiled with
in good faith.

Distinction Between an Obligation and a Contract.  – An obligation is a juridical necessity to give, to do or not to do. A
contract is an agreement between parties with respect to the other, to give something or render some service.

Freedom to Contract  –
The contracting parties may establish 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.

Perfection of Contract  – Contracts are perfected when consented, and from that moment the parties are bound to the
fulfillment of what was expressed in the contract even the consequences.

Force of Law  –When the contract has been enforce to the law between the parties, both of them are bound to the obligation
expressed therein (Baron Marketing Corp. vs. CA, 286 SCRA 96 [1998])

Obligation Arising from Contract – Obligations that arises from contracts entered into by the contracting parties are primarily
govern by stipulations, clauses, terms and conditions of there agreements. If they do not violate any law, morals, good
customs, public order, or public policy and shall have the force of law and should be compiled with in good faith.

Exceptions to the Rule  – Some contracts are valid and do not violate Art. 1306 and yet, they may not be enforced totally, if
their prestation are unconscionable and unreasonable. The contract which provides for unconscionable attorney’s fees may
be disregarded by the court. (Bachrach vs. Golingco, 39 Phil. 138; Borcena vs. IAC 147 SCRA 111)

Falsification of a Valid Contract  – Some provisions thereof has been added without knowledge of the contracting parties.
Only the unauthorized insertion will be disregarded.

Interpretation of a Contract involves a Question of Law  – A contract is in the nature of law between parties and their
succession interest, its interpretation involves a question of law (Melliza vs. Iloilo, 131 Phil. 1006; Republic vs. Lichauco, 46
SCRA 305; Weldon Construction Corp. vs. CA, 154 SCRA 618)

Art. 1160. Obligation derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this book.

Quasi-Contract, Concept.  – Quasi-Contract is a legal remedy that is imposed by the court. It does not require assent of the
parties and its creation is entirely dictated by the law for the benefit of another and for which the former must compensate to
the end.

Characteristic of a Quasi-Contract

1. Act(s) executed must be lawful to distinguish it from a violation or crime.

2. Act(s) executed must be voluntary distinguish it from quasi-delict.
3. Act(s) executed must be independent to distinguish it from an ordinary contract.

Principal Kinds of Quasi-Contract.

(a) Negotiorum Gestio  – A juridical relation when somebody takes charge of the agency or management of the business or
property of another without consent.

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(b) Solutio Indebiti – Where one had paid a debt, or done an act or remitted a claim because he thought that he was bound
in law to do so, when he was not. He can recover the mistake there is an implied obligation to pay back the money.

Presumptive Consent – Since a quasi-contract is a independent contract created by a sole act(s) of the gestor, which means
there was no consent to the latter. (Perez vs. Pomar, 2 Phil. 682).

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