ART.

1156
 OBLIGATION
o Obligatio – “tying” or “binding”
o Tie of law or juridical bond virtue of which one is bound in favor of another to
render something – giving a thing, doing an act, or not doing an act
o Manresa: a legal relation established between one party and another, whereby
the latter is bound to the fulfillment of a prestation which the former may
demand of him
o Passive – stresses the duty under the law of the debtor or obligor (has duty of
giving, doing or not doing) when it speaks of obligation as a juridical necessity
 JURIDICAL NECESSITY
o Cos in case of non-compliance, the courts may be called upon to enforce its
fulfillment, or in default: its economic value
o Debtor may also be made liable for damages – sum of money given as
compensation for the injury or harm suffered by the creditor or obligee for the
violation of his rights
 Nature
o Civil Obligations – give creditor/oblige a right of action in courts to enforce their
performance
o Natural obligations – do not grant a right of action // although in voluntary
fulfillment by the debtor, the latter may not recover what has been delivered or
rendered by reason thereof
 Requisites
o Passive subject – debtor or obligor – person who is bound to the fulfillment of
the obligation, he who has a duty
o Active subject – creditor or oblige – person who is entitled to demand the
fulfillment of the obligation, he who has a right
o Object or prestation – subject matter of the obligation – conduct required to be
observed by the debtor, consists of giving, doing, not doing
o Juridical or Legal Tie – efficient cause – that which binds or connects the parties
to the obligation, easily be determined by knowing the source of the obligation
 Forms
o Manner in which an obligation is manifested or incurred
o Oral or in writing, partly oral or partly in writing
 GR: Law does not require any form in obligations arising from contracts
for their validity or binding force
 Obligations arising from other sources do not have any form at all
 Obligation, right and wrong, distinguished
o Obligation – act or performance which the law will enforce
o Right – power which a person has under the law to demand from another any
prestation
o Wrong (cause of action) – act or omission of one party in violation of the legal
right or rights of another, causing injury to the latter
 Existence of cause of action
o Essential Elements
 A legal right in favor of a person by whatever means and under whatever
law it arises or is created
 A correlative legal obligation on the part of another to respect or not to
violate said right
 An ac or omission in breach or violation of said right by the defendant
with consequential injury or damage to the plaintiff for which he may
maintain an action for the recovery of damages or other appropriate
relief
o Allegations of all elements in complaint
 If complaint is absent any of the above elements, becomes vulnerable to
a motion to dismiss on ground of failure to state a cause of action
 Cause of action rests on the sufficiency and not veracity of allegations in
the complaint
o Test: material allegations of complaint, state ultimate facts which constitutes
plaintiffs cause of action such that plaintiff is entlited to a favorable judgement as
a matter of law
o Accrual of cause of action – only arises when the last element occurs = at the
moment a right has been transgressed
 Distinguished from right of action or right to commence and maintain an
action
 An obligation on the part of a person cannot exist without a
corresponding right existing in favor of another, and vice-versa, for every
right enjoyed by a person, there is a corresponding obligation on the part
of another to respect such right
 Actions based upon a written contract should be brought within 10 years from time the
right of action accrues. The accrual refers to the cause of action. An action based on a
contract accrues only when an actual breach or violation thereof occurs. The period of
prescription commences, not from the date of execution of the contract but from the
occurrence of the breach
 Injury, damage and damages distinguished
o Injury – illegal invasion of a legal right, it is the wrongful act or omission which
causes loss or harm to another – legal wrong to be redressed
o Damage – loss, hurt, harm which results from injury
o Damages – sum of money recoverable as amend for the wrongful act or omission
– recompense or compensation awarded or recoverable for the damage or loss
suffered
 Existence of one without the other – may be injury without damage and damage
without injury
o Proof of loss for injury – wrongful violation of his legal right is not sufficient – as a
rule, there must also be loss or damage caused to him by violation of his right
  Actual or compensatory damages – needs pecuniary proof so that moral,
nominal, temperate, liquidated or exemplary damages may be awarded
 Other than that – no need pecuniary proof
o Liability for damages of a person for exercising his legal rights
 Qui jure suo utitur mullum damnum facit – One who makes use of his
legal right does no injury
 Damnum absque injuria – Damage without injury
 Plaintiff must establish that the damage to him resulted from a breach
otherwise, plaintiff bores consequences
 To give redress, the act must be wrongful and hurtful
 Kinds of obligations accdg to subject matter
o Real obligation (obligation to give) – subject matter is a thing which obligor ust
deliver to oblige
o Personal obligation (obligation to do or not to do) – subject matter is an act to be
done or not to be done
 Positive personal obligation or OBLIGATION TO DO
 Negative personal obligation or OBLIGATION NOT TO DO

ART. 1157
 SOURCES
o Law
o Contracts – arise from stipulation of the parties
o Quasi-contracts – arise from lawful, voluntary and unilateral acts and which are
enforceable to the end that no one shall be unjustly enriched or benefited at the
expense of another
o Crimes or act of omission punished by law (delicts) – arise from civil liability
which is the consequence of a criminal offense
o Quasi-delicts or torts – arise from damage caused to another though arc or
omission, there being fault or negligence, but no contractual relation exists
 NO OTHER SOURCE THAN ABOVE
o Sources from law
o Sources from private acts
 Sources from licit acts (contracts, quasi-contracts)
 Sources from illicit acts (punishable by law delicts, not punishable quasi-
delicts)
o Only 2 sources: law and contracts, because obligations arising from quasi-
contracts, crimes and quasi-delicts are really imposed by law (Leung Ben v.
Obrien)
ART. 1158 LEGAL OBLIGATIONS
 Obligation is not presumed because considered burden upon the obligor
 To be demandable, they must be clearly set forth in the law

ART. 1159 CONTRACTUAL OBLIGATIONS

 Contract – meeting of minds between two persons whereby one binds himself, with
respect to the owner, to give something or to render some service
 Formal expression by the parties of their rights and obligations they have agreed upon
with respect to each other
o Binding force – governed primarily by agreement of the contracting parties
 Have the full force of law, bound to comply fully and not selectively with
its terms in good faith and neither one may without consent renege
therefrom.
 Law will not permit a party to be set free from liability for any kind of
misperformance of the contractual undertaking or a contravention of the
tenor thereof – mere proof of the existence of the contract and failure of
compliance is prima facie right to relief
 Whatever fairly puts a person on inquiry is sufficient notice, where the
means of knowledge are at hand, which if pursued by proper inquiry, the
full truth might have been ascertained
 Occurs by one to allege some defect as a reason for invalidating it, such
alleged defect must be proved by him by convincing evidence since its
validity cannot be left to the will of one of them
 Courts have no alternative but to enforce valid and binding contracts as
they were agreed upon, otherwise interfering with the freedom of
contract of parties
 A compromise agreement is immediately executory and not appealable,
except for vices of consent or forgery
o Requirements of a valid contract – as a source of obligation, a contract must be
valid and enforceable
 Valid if not contrary to law, morals, good customs, public order and public
policy
o Where contract requires approval by the government
 Becomes law only when approved
o Compliance in good faith
 Compliance in accordance with the stipulations or terms of the contract
 Good faith must be observed to prevent one party from taking unfair
advantage over the other
o Liability for breach of contract
 Actionable injury inheres in every contractual breach
o Unreasonable delay in demanding performance
  Failure of either party to a contract to demand performance of the
obligation of the other for an unreasonable length of time may render the
contract ineffective
o Preservation of interest of promise
 Breach confers upon injured party a valid cause for recovering that which
may have been lost or suffered

ART. 1160 QUASI CONTRACTUAL OBLIGATIONS

 Quasi contract – juridical relation resulting from certain lawful, voluntary and unilateral
acts by virtue of which the parties become bound to each other, so that no one wil be
unjustly enriched
 In a contract, there is a meeting of the minds or consent. Quasi contract, consent is
established by fiction of law in that the law considers the parties as having entered a
contract irrespective of their intention
o Negotiorum Gestio – voluntary management of the property or affairs of another
without the knowledge or consent of the latter
o Solutio Indebiti – juridical relation which is created when something is received
when there is no right to demand it and it was unduly delivered through mistake