I.

BRIEF INTRODUCTION
The Law on Obligations and Contracts is the body of rules which deals with the
nature and sources of obligations and the rights and duties arising from agreements and
particular contracts. This report covers Article 1156 – Article 1162 of the Civil Code.
Particularly the General Principles of Obligations.

II. DISCUSSIONS

Definition of Obligation
Under the Philippine Civil Code Article 1156, Obligation is defined as a juridical
necessity to give, to do, or not to do. The word Obligation came from the Latin word
“Obligatio” – which means tying or binding. It is a juridical necessity because failure or
refusal to perform it gives rise to a right of action. Its definition as found in Article 1156 is
defined in its passive aspect because it merely stresses the duty of debtor/obligor when
it speaks of an obligation as a juridical necessity and it is silent as to the right of the
creditor/obligee.

Nature of Obligation Under the Civil Code (Article 1156)

a. Civil Obligations

These refer to the obligations that give the creditor or obligee a right under the
law to enforce their performance in courts of justice.

In this case, if the debtor refuses or fails to comply with the obligation, the
creditor can seek legal remedies. Like filling a case in the court.

Example: Loan

b. Natural Obligations
These obligations are not based on positive law but it is based on equity and
natural law. It is founded by the voluntariness of action. As a matter of right, the
natural obligation cannot be enforced through the courts of justice.
Nevertheless, if the debtor volunteered to perform the obligation then he can no
longer recover what has been delivered or rendered because of this natural
obligation.
Example: Quasi-contracts (Negotiorum gestio and Solutio indebiti)

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Elements of Obligation
Obligation has essential elements or requisites. They are requisites because they
comprise the obligation. These are important to see the legitimacy of the obligation
itself. The absence of one of these will not make the obligation effectively binding
between the parties.

a. Passive Subject
This is also known as the debtor or obligor, it is the party who must perform. He
is passive because he does nothing until the demand for performance of the
obligation is upon him.

b. Active Subject

Known as the creditor or obligee. He has the right to fulfillment. He is the active
one because he is entitled to demand the performance of the obligation.

c. Object or prestation

Object refers to the property or things while prestation is the subject matter of the
obligation. It is the conduct needed to be observed by the debtor, this consists of
giving, doing, or not doing. Without the prestation, parties do not have anything to
perform.

There are two kinds of obligations as to the subject matter:

1. Real Obligation (obligation to give)

It is an obligation to give because something is supposed to be delivered or given
by the debtor to the creditor.

2. Personal Obligation (obligation to do or not to do)

Here, the object or subject matter is an act to be done or not to be done.

d. Juridical or legal tie (efficient cause)

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 This is also called the vinculum juris, which binds or connects the parties of the
obligation.

Example:
Under a building contract, X bound himself to construct a house for Y for
P1,000,000.00
Passive Subject: X Object or prestation: building
Active Subject: Y Juridical tie: agreement or contract (source of obligation)
*Supposed X had already constructed the house and it was the agreement that Y
would pay after the construction is finished. X, then, becomes the active subject and Y the
passive subject.*

Sources of Obligation
Under Article 1157 of the Civil Code, there are five sources of obligation. In other
words, these are the reasons why the debtor acquired or incurred the obligation to give
or the obligation to do.

a. Law

It is the source of obligation when it was imposed by the law itself. Legal
obligations are imposed by law. Under Article 1158, Obligations derived from law
are not presumed. These are not presumed because they imposed a burden
upon the debtor/obligor.

Example: National Internal Revenue Code of 1997 as amended by TRAIN Law

(R.A. 10963)

b. Contracts
Another source of obligation is a contract. These happen when an obligation
arises from the stipulations of the parties. Article 1306 defines a contract. It talks
about a meeting of minds and includes consent between the two parties.

Whereby, one of the parties would obligate himself concerning respect to the
other one to give or to do something.

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 Example: Contract of Loan

c. Crimes or acts or omissions punished by law

Covered by Article 1161 of the Civil Code. These are simply criminal offenses,
and no obligations arise from criminal offenses. Right under Article 100 of the
Revised Penal Code (Law on Criminal Offenses) states that “Every person who
is criminally liable is also civilly liable.” This means that commitment of a crime
gives rise to civil liability.

Scope of Civil Liability:

1. Restitution – compensation for loss

2. Reparation – make amendments
3. Indemnification – reimbursement
Example: A government official stole the government money, then he has the
obligation to give back or return the money he stole from the government.

d. Quasi-contracts

This source of obligation is under Article 2142. The word quasi means
“resembling”. Quasi-contracts are not a contract but as if they are contracts. It is
because one has the obligation to give or to do something in favor of the other
party, not because they have come to an agreement or stipulation. The law itself
imposes upon the debtor that obligation.

The purpose here is to prevent the person to unjustly enrich or benefit himself at
the expense of another person.

Example: Obligation to return what a person received by mistake.

Principal Kinds of Quasi-contracts

1. Negotiorum gestio
Talks about a person who voluntarily took care of the property or affairs of the
other person, but this other person has no knowledge or did not give consent that
his property/his affair will be voluntarily managed by that person.
Example: Juliet left her farm unattended for one week because she is having a
vacation. Romeo, her neighbor noticed that Juliet has not been around and the
plants are slowly dying. Out of concern, he cultivated the land, watered the

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 plants, bought fertilizers then placed those on the plants, and removed the
weeds. He spent the necessary expenses which need to be reimbursed for Juliet
not to unjustly enrich herself at the expense of Romeo.

2. Solutio indebiti
This is created when an object or something is received although the recipient
has no right to receive it or it was delivered by mistake.
Example: Jack bought goods from Jill Store. It costs P1,500. Jack gave P2,000
to the store cashier and received a change of P700. Jack is duty-bound to return
the excess of P200 to the store. Otherwise, he will unjustly enrich himself at the
expense of the Jill Store.

e. Quasi-delict or torts

Delicts refer to crimes. Crimes are committed intentionally, there is malicious

intent or there is evil intent. In quasi-delicts or torts, there is no intention and
there is no malice. Nevertheless, there is negligence or fault. Because of that,
another person suffered damages. Article 2176 also states that there should be
no contractual relation between the parties. If there is a pre-existing contractual
relation, the source of obligation is contracts, not quasi-delicts.

Example: The owner of a building structure is responsible for the damages

resulting from its total or partial collapse if it should be due to the lack of
necessary repairs. (Article 2190)

Contractual Obligations
Article 1159 in relation to Article 1157 talks about obligations arising from
contracts. A contract is defined as a meeting of minds that consented all parties have
agreed. One of them will give or do something in favor of the other.
Contractual Obligations have the force of law between the contracting parties. It
simply implies that is the law between them. If a law provides otherwise then between
what the law provides and what the parties agreed upon in their contract, their
stipulation in the contract will prevail.
Example: The sale of an automobile, where one party has the obligation to
transfer the ownership of the car while the other party has the obligation to pay
for it.

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III. CONCLUSION
It is important to study the General Principles of Obligations to understand the
essential requisites or elements of an obligation. Also, to be able to compare the
five sources of obligations under the provisions of the Civil Code. Lastly, to
determine the form or manner by which an obligation should be incurred or
manifested to be binding and enforceable to both contracting parties.

IV. SOURCES
Article 1156 of the Civil Code
Article 1157 of the Civil Code
Article 1158 of the Civil Code
Article 1159 of the Civil Code
Article 1160 of the Civil Code
Article 1161 of the Civil Code
Article 1162 of the Civil Code
Article 1306 of the Civil Code
Article 2142 of the Civil Code
Article 2176 of the Civil Code
Article 2190 of the Civil Code
Article 100 of the Revised Penal Code
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NA. (n.d.). Indemnify. Retrieved October 9, 2020, from https://legal-
dictionary.thefreedictionary.com/indemnify
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9780199231690-e392

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