CHAPTER 1: OBLIGATIONS

• Derived from the Latin word which means tying or binding. A tie/bond that is recognized by law by virtue of which one is bound in favor of another to render something. May consist of giving a thing, doing a certain act, or not doing a certain act.

  Obligation
• An obligation Is a juridical necessity to give, to do, or not to do.


  ARTICLE 1156
• The person to whom the obligation is owed is called obligee.
• A person who has an obligation is called obligor.
• The person who acquires the right to demand performance of the obligation is called creditor.
• The person who owes an obligation is called obligor.
• This stresses the duty under the law of the debtor or obligor when it speaks of obligation as a

  juridical necessity.
• Judirical Necessity connotes that if one fails to comply with his obligation, the courts of justice may be called upon by the aggrieved party to enforce its fulfillment.
• The debtor must comply with his obligation whether he likes it or not, otherwise, his failure will be visited with some harmful or undesirable consequences.
• Obligor is the individual or entity who is legally bound to perform a specific action or fulfill a promise stipulated in a contract or legal agreement.
• Obligee is the individual or entity who is entitled to receive the benefit or performance promised by the obligor. They are the recipient of the obligation owed by the obligor
• According to article 1423, there are two natures of obligations: Civil and Natural
• According to Republic Act 386, Article 1423, Obligations are civil or natural. Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the following articles.
• In Article 1424, When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered.
• According to Article 1425, when without the knowledge or against the will of the debtor, a third person pays a debt which the obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he has paid
• In accordance with Article 1426, When a minor between eighteen and twenty-one years of age who has entered into a contract without the consent of the parent or guardian, after the annulment of the contract voluntarily returns the whole thing or price received, notwithstanding the fact that he has not been benefited thereby, there is no right to demand the thing or price thus returned. In simple terms, a minor is not legally obliged to restitution.
• As stated in Article 1427, When a minor between eighteen and twenty-one years of age, who has entered into a contract without the consent of the parent or guardian, voluntarily pays a sum of money or delivers a fungible thing in fulfillment of the obligation, there shall be no right to recover the same from the obligee who has spent or consumed it in good faith.
• As per Article 1428, When, after an action to enforce a civil obligation has failed the defendant voluntarily performs the obligation, he cannot demand the return of what he has delivered or the payment of the value of the service he has rendered. For example, A debtor, who has failed to pay his obligation, is sued by the creditor and instead of losing the case, he has won it. The debtor voluntarily performs his obligations, he cannot demand the return of what he has delivered or payment of the value of the service he has rendered.
• As mentioned in Article 1429, When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the property which he received by will or by the law of intestacy from the estate of the deceased, the payment is valid and cannot be rescinded by the payer.
• Twins Precious and Clarence received 50 million each as inheritance upon their mother’s death. But their mother was indebted to a company in the amount of 6 million. Clarence, solely and voluntarily paid the 6 million debt of their deceased mother. Clarence’s payment is valid and cannot be rescinded by him.
• Following Article 1430, When a will is declared void because it has not been executed in accordance with the formalities required by law, but one of the intestate heirs, after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable.
• 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 Civil Code
• There is no room for assumption when it comes to legal obligations. Meaning that in law, there is No Presumption.
• Only obligations that are explicitly stated in this Civil Code are enforceable. Meaning that law is Expressly Determined.
• Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (art 1159)
• Force of Law: Once a contract is agreed upon, it becomes binding between the parties as if it's a law that they have to follow
• Good Faith Compliance: meaning they are expected to act honestly, fairly, and with mutual trust when performing their duties under the contract
• A quasi-contract is that juridical relation resulting from certain lawful, voluntary and unilateral acts by virtue of which the parties become bound to each other to the end that no one will be unjustly enriched or benefited at the expense of another.
• The difference between contracts and quasi-contracts is that quasi-contracts don't need consent while contracts need it for credibility.
• Quasi-contract is a legal obligation implied by law which occurs when there is no formal agreement to prevent unjust enrichment.
• • Two Types of Quasi-contracts: Negotiorum Gestio and Solutio Indebiti
• Negotiorum Gestio is property or affairs of another without the knowledge or consent of the latter. (Art. 2144.)
• Solutio indebiti is is the juridical relation which is created when something is received when there is no right to demand it and it was unduly delivered through mistake. (Art. 2154)
• Solutio Indebiti, exist when;

  • Something is received;
  • When there is no right to demand it;
  • It was unduly delivered through mistake.
• Negotiorum Gestio, Which exist when one voluntary takes charge of the agency or management of the business or property of another.