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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, defi nes it as a “legal relation established between one person and another, whereby the latter is bound to the fulfi llment 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 defi ned 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
(^1) New provision. (^2) 4 Sanchez Roman 53. (^3) 8 Manresa, 5th Ed., Bk. 1, p. 21. (^4) Art. 1423, Civil Code.
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 fulfi llment 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 fi fth requisite. As a general rule, however, it cannot be considered as essential. Obligations arising from law, quasi-con- tracts, acts or omissions punished by law, and quasi-delicts do not require any form whatsoever, yet there can be no question regard-
(^5) 3 Bouvier’s Law Dictionary, 2394-2395. (^6) 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.
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 classifi cations of a secondary char- acter 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.
(^18) Arts. 1158-1162, Civil Code. (^19) 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.
Art. 1156
- As to parties:
(a) Unilateral and bilateral — unilateral, where only one party is bound, and bilateral, where both parties are mu- tually or reciprocally bound.
(b) Individual and collective — individual, where there is only one obligor, and collective, where there are several ob- ligors. 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.
- As to object:
(a) Determinate and generic — determinate, when the object is specifi c; 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 undertak- ings. Multiple obligations may be conjunctive, when all of the undertakings are demandable at the same time, or distribu- tive, when only one undertaking out of several is demandable. Distributive obligations, on the other hand, may be alterna- tive, 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 con- sists in giving something; personal, when the obligation con- sists in doing or not doing something.
(e) Possible and impossible — possible, when the ob- ligation 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 obli- gation is susceptible of partial performance; indivisible, when the obligation is not susceptible of partial performance.
GENERAL PROVISIONS Art. 1156
“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 pre- sumed. 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
(^29) Leung Ben vs. O’Brien, 38 Phil. 182. (^30) Art. 1090, Spanish Civil Code. (^31) Art. 1158, Civil Code.
GENERAL PROVISIONS Art. 1158
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 quasi- delict, 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
(^32) 8 Manresa, 5th Ed., Bk. 1, p. 48. (^33) 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.
Art. 1159
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 benefi ted at the expense of another.^44 The most important of these juridical relations which are recognized and regulated by the Civil Code are negotiorum gestio^45 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,
(^44) Art. 2142, Civil Code. (^45) 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.
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 fi rst 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. But a person who is not criminally liable may still be civilly liable.
Idem; Enforcement of civil liability. — In general and prior to the Revised Rules of Criminal Procedure 2000, the following rules are observed in the enforcement or prosecution of civil liability arising from criminal offenses:
(1) Institution of criminal and civil actions. — When a criminal action is instituted, the civil action for recovery of civil liability arising from the offense charged is impliedly instituted with the criminal action, unless the offended party (i) expressly waives the civil action, or (ii) reserves his right to institute it separately, or (iii) institutes the civil action prior to the criminal action.
(2) Independent civil action. — In the cases provided in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of the criminal case, provided the right is reserved. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence.
(^52) Art. 1092, Spanish Civil Code, in amended form. (^53) Art. 100, Revised Penal Code. This rule, however, is subject to the rules stated in Arts. 101, 102 and 103, Revised Penal Code.
GENERAL PROVISIONS Art. 1161
be instituted separately or whose proceeding has been suspended shall not run.’’ Otherwise stated, the period of prescription of the civil actions under Section 3 of the aforementioned rules shall not be suspended because they can be instituted separately. This refers to civil actions arising from the offense charged which have not been reserved or civil actions that have been filed ahead of the criminal action but have been suspended. (Justice Oscar M. Herrera, Treatise on Historical Development and Highlights of Amendment of Rules on Criminal Procedure, February 2001).
(4) Judgment in civil action not a bar. — A final judgment rendered in a civil action absolving the defendant from civil liability is no bar to a criminal action.
(5) Suspension by reason of prejudicial question. — A petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the fi scal (prosecutor) or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be fi led in the same criminal action at any time before the prosecution rests.
Section 7 of the Revised Rules of Criminal Procedure 2000 provides for the elements of a prejudicial question. They are: (a) the previously instituted civil action which involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.
Section 7 limits a prejudicial question to a “previously insti- tuted civil action’’ in order to minimize possible abuses by the sub- sequent fi ling of a civil action as an after thought for the purpose of suspending the criminal action. (Justice Oscar M. Herrera, Treatise on Criminal Procedure, February 2001)
At a glance, therefore, the following are the salient changes brought about by the Revised Rules of Criminal Procedure 2000, as more specifi cally discussed hereunder by Justice Herrera in his Treatise on Criminal Procedure:
a. The rule changes the 1985 rule as amended in 1988. Under the 1985 Rule, the action for recovery of civil liability arising from crime including the civil liability under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising
GENERAL PROVISIONS Art. 1161
OBLIGATIONS
from the same act or omission are deemed impliedly instituted with the criminal action unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. Under the present rule, only the civil liability arising from the offense charged is deemed instituted with the criminal unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. b. Under the former rule, a waiver of any of three civil actions extinguishes the others. The institution of, or the res- ervation of the right to fi le any of said civil actions separately waives the others. This is no longer provided for. The reserva- tion and waiver refers only to the civil action for the recovery of civil liability arising from the offense charged. This does not include recovery of civil liability under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act or omission which may be prosecuted separately even with- out a reservation. c. The rulings in Shafer vs. Judge, RTC of Olongapo City, 167 SCRA 376, allowing a third-party complaint, and the ruling in Javier vs. Intermediate Appellate Court, 171 SCRA 376, as well as Cabaero vs. Cantos allowing a counterclaim are no longer in force. Under the 2000 Rules, these pleadings are no longer allowed. Any claim which could have been the subject thereof may be litigated in a separate civil action. d. The rule also incorporated Circular 57-97 on the fi ling of actions for violation of Batas Pambansa Blg. 22 mandating the inclusion of the corresponding civil action for which the fi ling fee shall be paid based on the amount of the check involved. In other cases, no filing fees shall be required for actual damages.
Idem; Id. — Effect of acquittal. — If the accused in a criminal action is acquitted of the offense charged, can a civil action for damages based on the same act or omission still be instituted? This question requires a qualified answer. If the acquittal of the accused is based on the ground that his guilt has not been proved beyond reasonable doubt, a civil action to recover damages based
Art. 1161
OBLIGATIONS
With regard to the first, it must be noted that where the civil action is based on an obligation not arising from the act or omission complained of as a criminal offense or felony, such action may proceed independently of the criminal action and regardless of the result of the latter.^60 It is evident that in such case the basis of the civil action may be an obligation arising from the law, contract, quasi-contract, or quasi-delict. Thus, a postmaster, who has been charged criminally for malversation of government funds under his custody, may still be made a defendant in a civil case for the recovery of the funds, not on the ground of malversation, but on the ground that under Sec. 633 of the Revised Administrative Code, he can be held accountable therefor.^61 The basis of the civil action in such case is not the obligation arising from the criminal offense of malversation, but the obligation arising from the law. Similarly, if a passenger in a certain bus institutes a civil action to recover damages from the operator of the bus line for injuries sustained in an accident, such action is separate and distinct from the criminal prosecution of the driver for criminal negligence and may, therefore, be continued regardless of the result of the latter. Consequently, he can still recover damages even if the driver is acquitted in the criminal action, because it is clear that the action in such case is based on culpa contractual and not on the act or omission of the driver complained of as felony.^62 The same principle is also applicable if the offense charged constitutes what is known as culpa aquiliana or quasi-delict under the Civil Code.^63 In such case, the injured party can always institute a civil action to recover damages independently of the criminal action and regardless of the result of the latter. This is so even granting that the accused is acquitted in the criminal action either on the ground of reasonable doubt or on the ground that he did not commit the offense charged. The reason for this is that the basis of the civil action is no longer the criminal liability of the defendant, but a quasi-delict or tort.^64
(^60) Art. 31, Civil Code. (^61) Tolentino vs. Carlos, 39 Off. Gaz., No. 6, p. 121. (^62) San Pedro Bus Line vs. Navarro, 94 Phil. 840; Bernaldes vs. Bohol Land Trans. Co., 7 SCRA 276. (^63) Art. 2176, et seq. , Civil Code. (^64) Art. 2177, Civil Code; Barredo vs. Garcia and Almario, 73 Phil. 607; Dyogi vs. Yatco, 100 Phil. 1095; Calo vs. Peggy, 103 Phil. 1112; Stanvac vs. Tan, 107 Phil. 109.
Art. 1161
With regard to the second, it must be observed that there are fi ve exceptional cases or instances, in addition to that which is stated in Art. 31 of the New Civil Code, where the law itself expressly grants to the injured party the right to institute a civil action which is entirely separate and distinct from the criminal action. They are: (1) interferences by public officers or employees or by private individuals with civil rights and liberties,^65 (2) defamation, 66 (3) fraud,^67 (4) physical injuries,^68 and (5) refusal or neglect of a city or municipal police officer to render aid or protection in case of danger to life or property.^69 In all of these cases or instances, although the act or omission may constitute a criminal offense in accordance with our penal laws, the injured party may institute a civil action to recover damages which is entirely separate and distinct from the criminal action. Once the action is instituted, then it may proceed independently of the criminal action, and shall require only a preponderance of evidence.^70
Idem; id.; id. — Effect of failure to make reservation. — Section 2 of Rule 111 of the New Rules of Court states: “In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of the criminal case, provided that the right is reserved as required in the preceding section .’’ The insertion in the foregoing provision of the phrase provided the right is reserved as required in the preceding section, resulted in a debate among academicians which lasted for more than twenty years.
Finally, interpreting the above provision, the Supreme Court, in Garcia vs. Florido,^71 declared:
“As we have stated at the outset, the same negligent act causing damages may produce a civil liability arising from crime or create an action for quasi-delict or culpa extra-contractual.
(^65) Art. 32, Civil Code. (^66) Art. 33, Civil Code. (^67) Ibid. (^68) Ibid. (^69) Art. 34, Civil Code. (^70) Arts. 32, 33, 34, Civil Code. (^71) 52 SCRA 420. This case was also cited and quoted in Mendoza vs. Arrieta, 91 SCRA 113.
GENERAL PROVISIONS Art. 1161
because of lack of intent to kill, coupled with a mistake, the Supreme Court held, despite the fact that the plaintiffs (who are the parents of the alleged victim) failed to make a reservation of their right to institute the civil action separately, that such acquittal of the defendant in the criminal case has not extinguished his liability for quasi-delict under Art. 2176 of the Civil Code; hence, that acquittal is not a bar to the civil action against him. The same ruling was applied in Mendoza vs. Arrieta.^74 In effect, the procedural requirement provided for in Section 2 of Rule 111 of the New Rules of Court is not mandatory.
Removal of Reservation Requirement For Independent Civil Actions
Accordingly, Section 2 of the New Rules of Court was likewise amended to read as:
“SEC. 3. When civil action may proceed independently. — In the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action.’’ (Revised Rules of Criminal Procedure 2000).
Under the former rule, the foregoing actions may only be allowed if there is a reservation, or were fi led ahead of the criminal action. (Justice Oscar M. Herrera, Treatise on Criminal Procedure, February 2001).
Art. 1162. Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of the Book, and by special laws.^75
Obligations Arising from Quasi-Delicts. — As it is used in this part of the Civil Code, the term “quasi-delicts”^76 refers to all of those obligations which do not arise from law, contracts, quasi-
(^74) 91 SCRA 113. (^75) Art. 1093, Spanish Civil Code, in amended form. (^76) In Spanish law, “cuasi-delitos’’ is sometimes known as “culpa aquiliana’’ or “culpa extra-contractual.’’
GENERAL PROVISIONS Art. 1162
OBLIGATIONS
contracts, or criminal offenses.^77 Thus, using Art. 2176 of the Civil Code and decided cases as bases or anchors, it may be defined as the fault or negligence of a person, who, by his act or omission, connected or unconnected with, but independent from, any contractual relation, causes damage to another person. It is, therefore, the equivalent of the term “tort” in Anglo-American law.^78
Idem; Persons liable. — Obligations arising from quasi- delicts are demandable not only from the person directly responsible for the damage incurred,^79 but also against the following:
(1) The father and, in case of his death or incapacity, the mother, with respect to damages caused by the minor children who live in their company;
(2) Guardians, with respect to damages caused by the minors or incapacitated persons who are under their authority and who live in their company;
(3) The owners and managers of an establishment or enterprise, with respect to damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions;
(4) Employers with respect to damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry;
(5) The State, when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains; and
(6) Lastly, teachers or heads of establishments of arts and trades, with respect to damages caused by their pupils and students or apprentices, so long as they remain in their custody.^80
It must be noted, however, that the responsibility of the above persons or entities shall cease if they can prove that they have
(^77) Report of the Code Commission, p. 161. (^78) See Elcano and Elcano vs. Hill and Hill, 77 SCRA 98. (^79) Art. 2176, Civil Code. (^80) Art. 2180, Civil Code.
Art. 1162
