SOURCES OF OBLIGATION
A. Law
B. Contracts
C. Quasi-contracts
D. Delicts
E. Quasi-Delicts
SOURCES OF
OBLIGATION/Cause of PRESCRIPTIVE Qualifications/Comments
action based on PERIOD
A. Law 10 years
B. Contracts 10 years If verbally, 6 years.
C. Quasi-contracts 6 years
D. Delicts 10 years No specific provision in the Civil Code regarding the prescriptive
period for actions based on delicts. One of the views, the
prescriptive period may be viewed as (for) 10 years because it may
be viewed as cause of action based on law. 5 years, for all other
actions where the prescriptive period is not mentioned by law.
E. Quasi-Delicts 4 years
Henson v UCPB:
Issue: WON claim for damages has already prescribed.
Ruling: SC abandoned the ruling in Vector.
Concept: In subrogation, no new rights and obligations are created. The insurance company
simply takes the place of the insured. Whatever cause of action that the insured may have is the
same cause of action of the IC over the wrongdoer. As to the running of the prescriptive period,
that is the same prescriptive period that will be inherited by the IC under the principle of
subrogation.
Quasi-contracts:
Juridical relation arising from a lawful or voluntary and unilateral act. (LUV)
The obligation arises from an act characterized by lawful, unilateral, and voluntary.
• Forms of quasi-contract:
a. Negotiorum Gestio
Note: If it is an act of gratuity, it is not negotiorum gestio.
b. Solutio Indebiti
c. Others
Note: The enumeration in the Civil Code as to the forms of quasi-contract is not exclusive.
Similarity to contract: The source of obligation are both lawful.
Contract Quasi-contract
As to the private act that will Bilateral act Unilateral act
give rise to the obligation
Quasi-Contract Delict Quasi-delict
As to the source of Lawful Unlawful Unlawful
obligation
Negotiorum Gestio:
In order for such juridical relation to arise:
Nature of property: Property must be neglected or abandoned. If not N/A, it will result into an
unauthorized contract.
Note: The owner must not be present. The owner is absent (absentee-owner) There must be no
authorization from the owner.
If there is an administrator, the property is not considered as abandoned.
Requirements for the relation to arise:
a.) There must be a person who voluntarily manages the property (Officious Manager/
Gestor)
b.) Property must be abandoned.
c.) No authorization from owner whether express or implied. If there is authorization, there
is contract of agency. In such case, it will be considered as action arising from law, not
quasi-contract.
d.) Management of the property must be in good faith.
When the gestor assumed over the property, it must not be for his benefit.
In negotiorum gesto, the unjustly benefited is the true owner of the property.
To prevent unjust enrichment, the officious manager can ask for reimbursement for the amount
that benefited the true owner of the property. (expenses plus damages)
What if owner said, “sinabihan ba kita gumastos na alagaan yung property ko? Di ba
hindi naman” : No, because he will be unjustly benefited. True if contract but in NG, the law
recognizes that the unilateral act of the gestor will give rise to an obligation on the part of the
owner.
If an officious manager enters into a contract with 3rd person, can the owner and the 3rd person
have a cause of action against each other?
GR: There is no cause of action between the 3rd person and the owner.
Reason: Relativity of Contract.
EXC:
a. If the owner has ratified the __, either expressly or tacitly.
b. When the contract refers to things pertaining to the owner of the business.
Solutio Indebiti
Juridical relation that arises when something is received when there is no right to demand it but it
was unduly delivered by mistake.
Requisites:
1. Payment was made when there exists when no prior binding relation between the payor
and the person who received the payment.
a. Prior binding relation: From contract
b. Meaning: The parties must not be bound by any contract.
2. Payment was made through mistake and not through liberality.
Domestic Petroleum vs MIAA - Requisites were not complied with; Breach of contract is
the basis of the cause of action. (Lessor and Lessee)
Is Accion in Rem Verso a mere specie of Solutio Indebiti? No, they are two different
concepts.
Accion in Rem Verso:
a. The defendant has been enriched;
b. The plaintiff has suffered a loss.
c. The enrichment is without just or legal ground.
d. The plaintiff has no other action based on quasi contract, contract, delict, quasi-delict.
Accion in Rem Verso Requisites of ARV Solutio Indebiti
✓ The defendant has been enriched; ✓
✓ Plaintiff has suffered a loss. ✓
✓ The enrichment is without just or legal ✓
ground.
✓ The plaintiff has no other action based on X
quasi-contract, contract, delict, quasi-
delict.
Solutio Indebiti Accion in Rem Verso
Source of Obligation Quasi-Contract Law
Prescriptive Period 6 years 10 years
Essence of Solutio Indebiti:
1. No existing binding relationship – not the essence of SI; existing din sa ARV
2. Payment made through mistake and not mere liberality – essence; not required in ARV
Note: Payment made through mistake may fall under Accion in Rem Verso – may fall under
ARV if mistake of law.
✓ Mistake of Fact: Solutio Indebiti (ART 2155 → statement of an exception)
- GR: Mistake of law is not solutio indebiti.
- EXC: If the mistake is of a doubtful or difficult question of law, it will fall under
solution indebiti.
Article 3: Ignorance of the law excuses no one from compliance therewith.
- Mistake of law cannot be a basis of good faith.
Article 526: However, a mistake in the interpretation in a difficult or doubtful question of law,
can become a defense, that can become a basis of good faith.
Q: How does the Civil Code treat a mistake of law that is doubtful?
Ans: It is treated as mistake of fact. Thus, solutio indebiti.
DELICTS
Unlawful acts which are punishable by law.
Article 100 of the RPC: Every person criminally liable is civilly liable.
- Not applicable to all crimes.
- Examples:
o Crimes against the state such as treason, espionage, rebellion.
o Illegal possession of drugs/firearms.
- For Article 100 to apply, such crimes should inflict or may result to an injury against
a person. (Only time where delict can be a source of obligation).
- Those crimes which carry with them payment of civil liability.
2 kinds of liability:
Criminal Liability Civil Liability
Addresses public interest. Affects private interest.
Proof beyond reasonable doubt. Preponderance of Evidence.
State. Private Offended party.
If the accused is convicted, he is both criminally and civilly liable.
If acquitted, when the accused is not the author of the crime, there is no civil liability arising
from the commission of the crime. Reason: There is no causal connection between the injury
suffered and the accused.
If acquitted, on the ground that his guilt was not proven beyond reasonable doubt, he may still
be liable since the evidence required in civil liability is preponderance of evidence.
Note: Article 29 of the Civil Code
Does Article 29 require the filing of a separate civil case?
Read Case: People v. Bayotas (civil liability)
If the accused died pending appeal, criminal liability is extinguished and civil liability must also
be extinguished but such civil liability must arise from delict.
QUASI-DELICT
Quasi-delict (Culpa Aquiliana) Delict
Committed through fault or negligence. Article 3 of RPC: Committed through dolo or culpa.
(Deceit or Negligence)
Broader. (Barredo Case) Limited to acts punishable by law.
Nature of liability of employer is direct. Nature of liability of employer is secondary or subsidiary;
and not primary.
Scope: Broader than delict. Covers those unlawful acts
which are criminal in character. Thus, the same negligent
act which is a crime, produces 2 sources: delict and
quasi-delict.
Quasi-delict is not limited to negligence which are not
criminal, it also cover negligence acts which are
criminal.
Read Case: Barredo vs. Garcia (1942)
Issue: WON plaintiffs may bring a separate case against Barredo.
Note: Article 2177 → prohibiting double recovery. (Hindi binago ruling pero nagprovide ng
provision against double recovery)
Article 2176, fault and negligence have two different meanings.
Fault – intentional or deliberate acts. (dolo) Elcano vs. Hill
Case: Gashem vs CA (Not accurate; Obiter dictum) Issue: breach of promise of marriage
New Civil Code: May the ruling of SC in Barredo apply to crimes committed intentionally?
Read Elcano vs. Hill. → Dulay vs. Ca → Safeguard Case
Scope of Quasi-delict: Covers not only acts punishable by law, but includes unlaw acts that are
criminal in character, whether voluntary or negligent (culpa or dolo).
Barredo was decided in the old concept of Civil Code.
Bayotas Case
Q: Did the death of Bayotas affect the source of obligation that is quasi-delict?
A: No. Only the civil liability arising from delict is extinguished. It did not affect the civil
obligation arising from quasi-delict.
In every commission of crime, there will be 2 distinct sources of obligation.
2 kinds of quasi-delict:
a. Through fault
b. Through negligence (Culpa extra contractual)
Article 1170: Culpa Contractual. Those guilty of fraud, delay, or negligence, in the
performance of their obligations, or those who, in any way, contravene the tenor of their
obligations can be held liable for damages.
Article 2176: Culpa Aquiliana. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is so pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
Note: Negligence referred to in Article 1170 is called Culpa Contractual.
Culpa Contractual Culpa Ex Contractual
Source of Obligation Contract Quasi-delict
As to Negligence Negligence is merely incidental. Negligence is substantive. (Negligence
created the obligation between the
parties)
As to the existence of a GR: There must be no existing contract
contract between the parties.
EXC: If the act which breaks the
contract is also a quasi-delict. (Air
France vs. Carrascoso)
Read Case: Singson vs BPI.
