BOOK IV

OBLIGATIONS AND CONTRACTS

TITLE I. — OBLIGATIONS

Chapter 1 GENERAL PROVISIONS

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

COMMENT:
(1) Elements of an Obligation (derived from the Latin “obligare” — to bind)
(a) an active subject (called the obligee or creditor) — the possessor of a right; he in whose favor the
obligation is constituted.
(b) a passive subject (called the obligor or debtor) — he who has the duty of giving, doing, or not doing.
(c) the object or prestation (the subject matter of the obligation).
(d) the efficient cause (the vinculum or juridical tie) — the reason why the obligation exists.
(NOTE: In a few cases, FORM — or the manner in which the obligation is manifested — is also important.)
(2) Example
A promises to paint B’s picture for B as a result of an agreement.
(Here A is the obligor; B is the obligee; the painting of B’s picture is the object or prestation; the
agreement or contract is the effi cient cause.)

(3) Concept of Prestation (BAR QUESTION)

A prestation is an obligation; more specifi cally, it is the subject matter of an obligation — and may consist of
giving a thing, doing or not doing a certain act. The law speaks of an obligation as a juridical necessity to
comply with a prestation. There is a “juridical necessity,” for non-compliance can result in juridical or legal
sanction.

(4) Kinds of Obligations

There are various basis for the classification of obligations. Given hereunder are few of them:
(a) From the viewpoint of “sanction” —
1) civil obligation (or perfect obligation)
2) natural obligation
3) moral obligation (or imperfect obligation)
Definitions —
a) civil obligation — that defined in Art. 1156. The sanction is judicial process. Example: A
promises to pay B his (A’s) debt of P1 million.
Art. 1156
 b) natural obligation — the duty not to recover what has voluntarily been paid although
payment was no longer required. Example: A owes B P1 million. But the debt has already
prescribed. If A, knowing that it has prescribed, nevertheless still pays B, he (A) cannot later
on get back what he voluntarily paid. The sanction is the law of course, but only because
conscience had originally motivated the payment.
An obligation are civil or natural. Civil Obligation is based on a positive law and gives right of
action to compel their performance, while Natural Obligation is based on natural law, but
on equity and moral justice. Hence, it is not enforceable by court action, but after voluntary
performance of the debtor, he can no longer recover what he has given.

Example: Romeo executed a promissory note in favor of Juliet for $50, 000. Romeo is the
debtor (payor) while Juliet is the creditor (payee). If Romeo does not pay on due date, Juliet
can enforce the fulfillment of the obligation by court action. If Juliet does not file a court
action against Juliet within 10 years from due date which is the prescriptive period for an
action against a written contract. Juliet looses the right to exact performance by court
action. However, if Romeo, out of his love for Juliet, voluntarily makes the payment to Juliet
thought such obligation has prescribed, Romeo will no longer be allowed to recover what
he has given as payment because although the obligation has prescribed, in equity and
moral justice, Romeo still owed Juliet the amount of $50, 000.

( Article 1144 (3), Civil Code of the Philippines. Upon a written contract; actions must be
brought withing 10 years from the time the right of action accrues. )

c) moral obligation — the duty of a Catholic to hear mass on Sundays and holy days of
obligation. The sanction here is conscience or morality, or the law of the church.
[NOTE: If a Catholic promises to hear mass for 10 consecutive Sundays in order to receive P1
million this obligation becomes a civil one.] (b) From the viewpoint of subject matter —
1) real obligation — the obligation to give
2) personal obligation — the obligation to do or not to do
(Example: the duty to paint a house, or to refrain from committing a nuisance)
(c) From the affirmativeness and negativeness of the obligation —
1) positive or affirmative obligation — the obligation to give or to do
2) negative obligation — the obligation not to do (which naturally includes “not to give”)
(d) From the viewpoint of persons obliged —
1) unilateral — where only one of the parties is bound
(NOTE: Every obligation has 2 parties; If only one of them is bound, we have a unilateral obligation.
Example: A owes B P1 million. A must pay B.)
2) bilateral — where both parties are bound (Example: In a contract of sale, the buyer is obliged to
pay, while the seller is obliged to deliver.)
[NOTE: Bilateral obligations may be:
a) reciprocal
b) non-reciprocal (where performance by one is nondependent upon performance by the
other).]
 (5) Criticism of the Definition by the Code
Art. 1156 defines obligation as “a juridical necessity to give, to do, or not to do.” As will be noticed, this stresses
merely the duty of the debtor (the passive element) without emphasizing a corresponding right on the part
of the creditor (the active element). On this point, Justice J.B.L. Reyes of the Supreme Court has remarked:
“This definition, taken from Sanchez Roman is incomplete, in that, it views obligations only from the debit
side. There is no debt without a credit, and the credit is an asset in the patrimony of the creditor just as the
debt is a liability of the obligor. Following the defective method of the Spanish Civil Code, the new Code
separates responsibility from the other element of obligation.” (Lawyer’s Journal, Jan. 31, 1951, p. 47). He
then quotes with approval the following definition given by Arias Ramos:
“An obligation is a juridical relation whereby a person (called the creditor) may demand from another (called the
debtor) the observance of a determinative conduct (the giving, doing, or not doing), and in case of breach,
may demand satisfaction from the assets of the latter.”
[NOTE: This definition is accurate because it views “obligation” from a “total” standpoint (both active and passive
viewpoint).]

COMMENT:
(1) Sources of Obligations
(a) Law (obligations ex lege) — like the duty to pay taxes and to support one’s family.
(b) Contracts (obligations ex contractu) — like the duty to repay a loan by virtue of an agreement.
(c) Quasi-contracts (obligations ex quasi-contractu) — like the duty to refund an “over change” of money
because of the quasi-contract of solutio indebiti or “undue payment.”
The 2 Principal Kinds
Negotiorum Gestio This takes place when a person voluntarily takes charge of another’s abandoned
business or property without the owner’s authority. (Art. 2144, Civil Code). Reimbursement must be
made to the gestor for necessary and useful expenses, as a rule. (See Art. 2150, Civil Code).
Solutio Indebiti This takes place when something is received when there is no right to demand it, and it
was unduly delivered thru mistake. The recipient has the duty to return it. (Example: If I let a
storekeeper change my P50.00 bill and by error he gives me P50.60, I have the duty to return the extra
P0.60). (See Art. 2154, Civil Code).

(d) Crimes or Acts or Omissions Punished by Law (obligations ex malefi cio or ex delicto) — like the duty to
return a stolen carabao.
(e) Quasi-delicts or Torts — (obligation ex quasi-delicto or ex quasi-malefi cio) — like the duty to repair
damage due to negligence.

1. distinction between quasi delics and crimes

2. liability for the fault of others
3. civil liability arising from crime

An cases….

Classification of Obligations
(a) According to the PRIMARY classification of the Civil Code:
1) pure as distinguished from conditional
 2) pure as distinguished from that with a period or term
3) alternative or facultative obligations (as distinguished from conjunctive)
4) joint as distinguished from solidary
5) divisible as distinguished from indivisible
6) with a penal clause (as distinguished from those without)

COMMENT:
(1) Pure Obligation — one without a condition or a term (hence, demandable at once, provided there will be no
absurdity).
Examples:
(a) I promise to pay you P1 million. [This is demandable at once, unless a period was really intended, as
when a loan has just been contracted (See Floriano v. Delgado, 11 Phil. 154), or when some time is
reasonably necessary for the actual fulfi llment of the obligation, as when a person binds himself to pay
immediately for the subscription of corporate shares of stock. (Paul Schenker v. William F. Gemperle, L-
16449, Aug. 31, 1962).]
(b) “I’ll pay you P1 million on demand.” (See Abarri, Inc. v. Galan, 47 O.G. 6241). But instant performance is
not a necessity, otherwise absurd consequences will arise. (8 Manresa 172).
(c) When the original period or condition has been cancelled by the mutual stipulation of both parties.
(See Estate of Mota v. Serram, 47 Phil. 464).

(2) Conditional Obligation — when there is a condition.

Example:
(a) I’ll buy your land for P10 million if you pass the last bar
Art. 1179 examinations. (This is suspensive for the results will be awaited).

(b) I’ll give you my land now, but should you fail in the last bar examinations, your ownership will cease and
it will be mine again. (This is resolutory because it ends upon failure.).

(3) Definition of Condition

“It is an uncertain event which wields an influence on a legal relationship.” — Manresa.