GENERAL PROVISION (GOLDEN NOTES)

Because in case of non-compliance, the courts of justice may be called upon by the aggrieved party to enforce its fulfillment or, in default thereof, the economic value that its represents

Why is Obligation a Juridical Necessity?

It is a juridical relation or necessity that allows one person (creditor) to demand the observance of determinative conduct (giving, doing, or not doing) from another (debtor), and in case of breach, the former can demand satisfaction from the assets of the latter

Obligation according to Makati Stock Exchange v. Campos

Right

The active aspect while obligation is the passive aspect.

The law does not require any form in obligations arising from contracts for their validity or binding force

General rule in the form of contracts

(1) When the form is essential to the validity of the contract as required by law (2) When the contract is unenforceable unless it is in a certain form, such as those under the Statute of Frauds

Exception to the General Rule in the form of contracts

Juridical tie/Efficient Cause, Active Subject, Passive Subject, Object/Prestation

Elements of an obligation

Juridical tie/Efficient Cause

The efficient cause by virtue of which the debtor becomes bound to perform the prestation. Established by Law, Bilateral Acts and Unilateral Act

Active Subject

The person demanding the performance of the obligation. It is he in whose favor the obligation is constituted, established or created.

Passive Subject

The person bound to perform the prestation to give, to do or not to do.

Object or prestation

The subject matter of the obligation which has a corresponding economic value or susceptible of pecuniary substitution in case of noncompliance. It is a conduct that may consist of giving, doing, or not doing

Licit or lawful, Possible, physically and judicially, determinate or determinable, pecuniary value or possible equivalent in money

In order to be valid, the object or prestation must be

The form in which the obligation is manifested

The fifth essential element

As to (1) Creation (2) Nature (3) Object (4) Performance (5) Person Obliged (6) Burden or Condition (7)Character of Responsibility or Liability (8) Susceptibility of partial fulfillment (9) Right to choose and substitution (10) Imposition of penalty (11) Sanction

Classifications of Obligations

Legal and Conventional

As to the creation

Legal

imposed by law

Conventional

established by the agreement of the parties

Personal and Real

As to the nature

Determinate or specific, Generic and Limited Generic

As to the object

Limited Generic

Generic objects confined to a particular class or source (example, obligation to deliver one of my horses)

Positive & Negative

As to the performance

Unilateral & Bilateral

As to the person obliged

Pure & Conditional

As to the existence of burden or condition

Joint & Solidary

As to the character of responsibility or liability

Joint

Each debtor is liable only for a part of the whole liability and to each creditor shall belong only a part of the correlative rights

Solidary

debtor is answerable for the whole of the obligation without prejudice to his right to collect from his co-debtors the latter’s shares in the obligation.

Divisible & Indivisible

As to the susceptibility of partial fulfillment

Alternative & Facultative

As to the right and substitution

Alternative

obligation may choose to completely perform one out of the several prestations

Facultative

Only one prestation has been agreed upon, but the obligor may render one in substitution of the first one

Simple & Obligations with a penal clause

As to the imposition of penalty

Simple

There is no penalty imposed for violation of the terms

Obligations with a penal clause

Obligation which imposes for violation of the terms

Civil, Natural & Moral

As to the sanction

Civil

Gives a right of action to compel their performance, the sanction is judicial process

Natural

not based on positive law but on equity and natural law, does not grant a right of action to enforce their perfomance, but after voluntary fulfillment by the obligor, they authorize retention of what has been delivered rendered by reason thereof; the sanction is the law

Moral

cannot be enforced by action but are binding on the party who makes it in conscience and natural law, the sanction is conscience or morality.

From the time designated by the law creating or regulating them

Time of perfection of Law

From the time of the perfection of the contract

Time of perfection of a contract

From the time designated by the law creating or regulating them

Quasi-contracts, delicts, quasi-delicts

Obligations Ex Lege (Article 1158)

Obligations derived from law are not presumed. Only those expressly determined in the code or in special laws are demandable and shall be regulated by the precepts of the law that established them and as to what has not been foreseen by the provisions of Book IV.

(1) Does not need the consent of the obligor, (2) Must be expressly set forth in the law creating it and not merely presumed, (3) The law should be the creator of the obligation itself

Characteristics of Legal Obligation

Obligation Ex Contractu

These obligations arising from contracts shall be governed primarily by the stipulations, clauses, terms and, and conditions of the parties’ agreement. Except for contracts that are unconscionable or unreasonable.

It must contain all essential requisites of a contract, must not be contrary to law, morals, good customs, public order and public policy

Requisites of a contractual obligation

Principle of obligatory force of contracts

Obligations arisen from contracts have the force of law between the parties and should be complied with in good faith.

Contract authorizes such evasion or when the other party assents thereto

Neither party may unilaterally evade is obligation in the contract except

Acción in rem verso

is a way to sue someone if they got richer because of you, without any valid reason, and you lost something because of it. Mistake is not required and only an auxiliary action when there is no other remedy on contract, quasi-contract, chrome or quasi-delict.

Obligation ex delicto

An act or omission punishable by law. Every person criminally liable for a felony is also civilly liable, except for crimes of treason, rebellion, espionage, contempt, and others wherein no civil liability arises on the part of the offender either because there are no damages to be compensated or there is no private person injured by the crime.

Implied institution of the Civil action in a criminal case

When a criminal action is instituted, the civil action for the recovery of the civil liability arising from the offense charged shall be deemed instituted with the criminal action except when the offended party (1) Waives the civil action, (2) Reserves the right to institute it separately (3) institites the civil action prior to the criminal action

Acquittal in Criminal Charges

The acquittal of the accused in criminal case does not preclude the filing of a subsequent civil action and only preponderance of evidence is required to prove the latter

The accused did not commit the crime charged, (2) There is a declaration in the decision of acquittal that no negligence can be attributed to the accused, and the fact from which civil action might arise did not exist.

Exception to acquittal in criminal charges

(1) Negligent or wrongful act or omission (2) Damage or injury caused to another (3) Causal relation between such negligence or fault and damage (4) No preexisting contract between parties

Elements of a quasi delict

(1) When there is a preexisting contract (2) When fault or negligence is punished by law (3) If the action is instituted after four years (4) When injury suffered by a person is the result of a fortuitous events

Instances when article 2176 is not applicable