MODULE WEEK NO.

10
INITAO College
University Jampason, Initao, Misamis Oriental
Logo

College of Criminology
FP1: Values Development
1st Semester of A.Y. 2022-2023
Introduction

This module will discuss the Quasi Delict / Contracts and Other Transactions. A quasi contract is
a legal agreement created by the courts between two parties who did not have a previous
obligation to each other.
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Rationale

Quasi contracts are licit and purely voluntary acts which create an obligation on the
part of the actor in favor of a third person, and, at times, a reciprocal obligation
between the parties concerned.

Intended Learning Outcomes

At the end of this module, students are expected to:

A. To distinguish and be able to explain the ethical considerations in business;
B. To familiarize with some common practices in business which were enacted into
law; and,
C. To internalize said knowledge on the said legal provisions so that the same be
integrated into their personal values in their commercial dealings with anyone.

Activity

1. Interactive and thorough discussions on the topic.

2. Exercises to enhance the learning of the students.
3. At home Activity that will practice the knowledge that the students acquired
through concept mapping.

Discussion

Ethical Consideration
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There are also some acts which caused damage to another but not considered
crimes simply because the law does not declare it to be, and or because the proper
authority for whatever reason did not or failed to file the necessary criminal complaint.
But since it caused wrong to another and the latter sustained damages, then our Civil
Code (RA 386) and pertinent laws have declared them civilly actionable for damages.
Some of them are discussed below
Quasi Delict
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
no pre-existing contractual relation between the parties is called a quasi delict (Art
2176, Civil Code)
Responsibility caused by quasi-delict is entirely separate and distinct from the
civil liability arising from negligence under the Penal Code: But the plaintiff cannot
recover damages twice for the same act or omission of the defendant (Art. 2177, Civil
Code)
This means that person who sustained damage may file separate civil suit
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independent from the criminal case should there be one filed by the proper authority.
However, the victim can only claim once from such act of quasi delict which means
that if damage was already awarded in the criminal case no similar award for damages
in the civil case and vice-versa.
Liabilitiest of Parents/Guardians/State/Establishments
The obligation imposed under quasi-delict is demandable not only for one's own
acts or omissions but also for those of persons for whom, one is responsible.
The father in case of his death or incapacity, the mother is responsible for the
damages caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons
who are under their authority and lived in their company.
The owners and managers of an establishments or enterprise are likewise
responsible for 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.
The state is responsible in like manner 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, in which case quasi-delict is applicable.
The responsibility treated in this article shall cease when the persons herein
mentioned prove that they observe all the diligence of a good father of a family to
prevent damage (Art. 2180, Civil Code).
If the minor or insane person causing damage has no parents or guardians, the
minor or insane person shall be answerable with his own property in an action against
him where a guardian adlitem shall be appointed (Art. 2182, Civil Code).
The possessor of an animal or whoever may make use of the same is responsible
for the damage which it may cause, although it may escape or be lost. The
responsibility shall cease only in case the damage should come from force majeure or
from the force majeure or from the fault of the person who has suffered damage (Art.
2183).

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Force majeure means causes beyond man's control such as typhoon,
earthquake or any other calamities. Guardian Adlitem is one appointed by the Court.
Motor Vehicle Mishap
In motor vehicle mishaps, the owner is solidarily liable with the driver, if the
former, who was in the vehicle, could have, by the use of due diligence, prevented the
misfortune. It is disputably presumed that a driver was negligent, if he had been found
guilty of reckless driving or violations of traffic regulations at least twice within the
next two proceedings two months.
If the owner was not with the vehicle, Art. 2180 applies (Art. 2184, Civil Code). A
motor vehicle mishap means vehicular accidents.
Unless there is proof to the contrary, it is presumed that a person driving a
motor vehicle has been negligent if at the time of the mishap, he was violating any
traffic regulation (Art. 2185, Civil Code).
If the owner was not with the driver, the owner shall be responsible as an
employer (Art. 2180, Civil Code).
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Other Quasi Delicts where the Victims may Claim for Damages
Manufacturers and processors of foodstuff, drinks, toilet articles and similar
goods shall be liable for death or injuries caused by any noxious or harmful substances
used, although no contractual relation exists between them and the consumers (Art.
2187, Civil Code).
Provinces, cities and municipalities shall be liable for damage for the death of,
or injuries suffered by any person by reason of the defective condition of roads,
streets, bridges, public building and other public works under their control or
supervisions (Art. 2187, Civil Code).
The head of a family that lives in a building or a part thereof, is responsible for
damages caused by things thrown or falling from the same (Art. 2193, Civil Code).
The proprietor of a building or structure of a business or structure is responsible
for the damages resulting from its total or partial collapse, if it should be due to lack of
necessary repair (Art. 2190, Civil Code).
If something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises (Art. 2154 Civil Code). This
is known as Solutio Indebite.
Quasi Contract
Ethical Consideration
Likewise in Quasi Contract, no contract actually exists between the parties but
the law considered that one exists in order to avoid unjust enrichment based on ethical
consideration that it is bad to enjoy something which is not his own at the expense of
the true owner even if the latter is not aware of it. Thus, the values to this effect must
be learned and practiced by all concerned.

Some of these acts are as follows:

 Negotiorum Gestio
In negotiorum gestio, once an officious manager has assumed the agency or
management of the business or property, he is obliged to continue the same until the
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termination of the affair and its incidents (Art. 2144, Civil Code, RA 386).
The officious manager shall perform his duties with all the diligence of a good
father of a family, and pay the damages which through his fault or negligence may be
suffered by the owner of the property or business under management (Art. 2145, RA
386).
This means that anyone (officious/manager) who assumed the management
of another's property without the latter's authority must continue the same as if proper
authority was given. Hence, the proceeds will be due to the owner subject to the
reimbursement of all expenses incurred by him (officious/manager) and the payment
for his services.
 Solutio Indebiti
When a person receives something of which he has no right to receive or to
demand for it, there is undue payment or delivery resulting from a mistake. Hence, the
recipient is obliged to return the same (Art 2154, RA 386).
A third person who supports an orphan, insane, or other indigent person has a
right to be reimbursed by the person obliged to give support.
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This provision also applies to a person who gives support to a child under 18
years of age when the child's father or mother unjustly refuses to support the child
(Art. 2166, RA 386).
 Duty to Share
When in a small community, a majority of the inhabitants of age decide upon a
measure for protection against lawlessness, fire, flood, storm or other calamity,
anyone who objects to the plan and refuses to contribute to the expenses but is
benefited by the project as executed shall be liable to pay his share of said expenses
(Art. 2174, RA 386).
Any person who is criminally liable is also civilly liable (Art. 100 Act 315,
Revised Penal Code).
Every person obliged to give something is also obliged to take care of it with
the proper diligence of a good father of a family, unless the law or the stipulation of
the parties requires another standard of care (Art. 1163, RA 386).
Those who in the performance of their obligation are guilty of fraud,
negligence or delay, and those who in any manner contravene the tenor thereof, are
liable for damages (Art. 1170, RA 386).
When what is to be delivered is a determinate thing, the creditor, in addition to
the right granted him by Article 1170 may compel the debtor to make the delivery (Art.
1165, RA 386).
It is but proper and ethical to share the expenses for which a person was
benefited. A person who committed crime caused damage to his victim. Thus, civil
liability for damages accrued to the latter. Moreover, when the performance of the
obligation is attended with fraud, delay or negligence, damages accrued in favor of the
creditor.
The obligation to give a determinate thing includes that of delivering all its
accessions and accessories, even though they may not have been mentioned (Art.
1166, Civil Code).
If a person obliged to do something fails to do it, the same shall be executed
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at his cost (Art. 1167, Civil Code).
This same rule shall be observed if he does it in contravention of the tenor of
the obligation. Furthermore, it may be decreed that what has been poorly done be
undone.
When the obligation consists in not doing, and the obligor does what has been
forbidden him, it shall also be undone at his expense (Art. 1168, Civil Code).

Responsibility arising from fraud is demandable in all obligations Any waiver

of an action for future fraud is void (Art. 1171, Civil Code).
 Contract
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 (Art.
1305 Civil Code). But the law is deemed written into a contract.
The contracting parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order or public policy (Art. 1306, Civil Code).
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Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith (Art. 1159, Civil Code).
Contracts are perfected by mere consent, and that moment the parties are
bound not only to the fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, maybe in keeping with good faith,
usage and law (Art. 1315, Civil Code).
Every person obliged to give something is also obliged to take care of it with
the proper diligence of a good father of a family unless the law or the stipulation of the
parties requires another standard of care (Art. 1163 RA 386).
 Obligation with a Period
The power to rescind obligations is implied in reciprocal ones, in case one of
the obligors should not comply with what is incumbent upon (Art. 1191, RA 386). him
When the debtor binds himself to pay when his means permit him to do so,
the obligation shall be deemed to be one with a period (Art. 1180, RA 386-
In an obligation with a period, the Courts shall fix the duration thereof which
once fixed, cannot be changed (Art. 1197, RA 386)..
A contract where consent is given through mistake, violence intimidation,
undue influence or fraud is voidable (Art. 1330, Civil Code).

Rule to Enter into a Contract

No one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him (Art. 1317, Civil Code).

A contract entered into in the name of another by one who has no authority or
legal representation, or who has acted beyond his powers, shall be unenforceable,
unless it is ratified, expressly or impliedly, by the person on whose behalf it has been
executed, before it is revoked by the other contracting party.
Estoppel
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Through estoppels an admission or representation is rendered, conclusive upon
the person making it, and cannot be denied or disprove as against the person relying
thereon (Art. 1431, Civil Code).
When a person who is not the owner of a thing sells or alienates and delivers
it, and later the seller or grantor acquires title thereto, such title passes by operation of
law to the buyers or grantee (Art. 1434, Civil Code).
This means no one is allowed to falsify his own admission. And he who sold
something which he does not own and later acquired the same, can no longer recover
it.
If a person in representation of another sells or alienates a thing, the former
cannot subsequently set up his own title as against the buyer or grantee (Art. 1435,
Civil Code).
A lessee or a bailee is stopped from asserting title to the thing leased or
received, as against the lessor or bailor (Art. 1436, Civil Code).
Misrepresentation
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When in a contract between third persons concerning immovable property,

one of them misled by a person with respect to the ownership or real right over the
real estate, the latter is precluded from asserting his legal title or interest therein,
provided all these requisites are present:
1. There must be fraudulent representation or wrongful concealment of facts
known to the party stopped;
2. The party precluded must intend that the other should act upon the facts
as misappropriated;
3. The party misled must have been unaware of the true facts; and
4. The party defrauded must have acted in accordance with the
misrepresentation (Art. 1437, Civil Code).
Business
In business, there are also some ethical practice which are enacted into laws
in order to promote and maintain just and equitable trading and or commercial
transactions and therefore worth knowing so as to integrate them into one's values in
his commercial dealings of whatever nature. They are as follows:
 Persons who cannot Acquire Properties by Purchase
The following persons cannot acquire by purchases, even at public or
judicial auction either in person or through the mediation of another.
1. The guardian, as to the property of the person or persons who be under his
guardianship;
2. Agents, as to the property whose administration or sale may have may

been entrusted to them, unless the consent of the principal have been given;
3. Executors and administrators, the property of the estate under
administration;
4. Public officers and employees, as to the property of the state or of any
subdivision thereof, or of any government owned or controlled corporation or
institution, the administration of which has been entrusted to them. This provision shall
apply to judges and government officers who, in any manner whatsoever take part in

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the sale.
5. Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts and other officers and employees connected with the administration of justice,
the property and rights in litigation or levied upon an execution before the Court within
whose jurisdiction or territory they exercise their respective functions. This prohibition
includes the act of acquiring by assignment and shall apply to lawyers with respect to
the property and rights which may be the object of any litigation in which they may
take part by virtue of their professions;
6. Any other specially disqualified by law (Art. 1491, Civil Code).
The husband and the wife cannot sell property to each other except:
1. When a separation of property was agreed upon in the marriage settlement or;
2. When there has been a judicial separation of property.
Sale Transactions
Relative to sale transactions the law provides to this effect:
The things must be licit and the vendor must have a right to transfer the
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ownership thereof at the time it is delivered (Art. 1459, Civil Code).

In the contract of sale of personal property the price of which is payable on
installments the vendor may exercise any of the following remedies:
1. Exact fulfillment of the obligation, should the vendee fail to pay;
2. Cancel the sale, should the vendee's failure to pay cover two or more
installments; and,
3. Foreclose the chattel mortgage on the thing sold, if one has been
constituted, should the vendee's failure to pay cover two or more installments. In this
case, he shall have no further action against the purchaser to recover any unpaid
balance of the price. Any agreement to the contrary is void (Art. 1484). But when the
payment is already eighty percent (80%) or more, the same can no longer be
foreclosed. The action is collection of some money with damages.
What are Considered Necessaries?
Where necessaries are sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. Necessaries are those
hereunder enumerated (Art. 1489, Civil Code).
Necessaries are those indispensable for sustenance, dwelling, clothing and
medical attendance according to the social position of the family.
It may also include the or training for some profession, trade or vocation even
beyond the age of majority of those who are entitled to the same (Art. 290, RA 386).

Intellectual Property
RA 9293 otherwise known as Intellectual Property Code of the Philippines
prohibited the following acts:
1. Infringement
2. Unfair Competition
3. False Designation of Origin
4. False Description or Representations

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Infringement is committed by any person who shall, without the consent of
the owner of the registered mark.
Use in commerce any reproduction, counterfeit, copy or colorable imitation of
a registered mark or the same container or a dominant feature thereof in connection
with the sale, distribution, advertising of any goods or services. Reproduce,
counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof
and apply the same to labels, signs, prints, packages, wrappers, receptacles or
advertisement cuts intended to be used in commerce upon or in connection with sale,
offering for sale, distribution, or advertising of goods or services or in connection with
which such is likely to cause confusion, or to cause mistake or to deceive (Sec. 155.2
1PCode).
Unfair Competition
The following shall be guilty of Unfair Competition:
1. Any person, who is selling his goods and gives them the general
appearances of goods of another manufacturers or dealer, whether as to the goods
themselves or in the wrapping of the packages in which they are contained, or the
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devices or words appearing thereon, or in any other feature of their appearance, which
would be likely to influence other purchasers to believe that the goods offered are
those of a manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another of his legitimate trade, or
any subsequent vendor of such goods with a like purpose.
2. Any person who by any artifice, or device, or who employs any means
calculated to induce the false belief that such person is offering other the services of
another who has identified such services in the mind of the public, or
3. Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated to
discredit the goods, business or services of another (Sec 168.2 and 168.3 IPC).
False Designation of Origin or False Description
Any person, shall be guilty of the above named offenses, who, or in connection
with any goods or services, or any container for goods, uses in commerce, any word,
term, name, symbol or device or any false designation of origin, false or representation
of fact, which:
1. is likely to cause confusion or to cause mistake, or to deceive as to the
affiliation connection or association of such person with another person or as to the
origin, sponsorship or approval of his or her goods, services or commercial activities by
another person; or
2. in commercial advertising or promotion, misrepresents the nature,
characteristics, qualities or geographic origin of his or her or another person goods,
services or commercial activities (Sec. 169 IPC).
Elements of Infringement
1. The validity of plaintiff's mark
2. The plaintiff's ownership of the mark; and
3. The use of the said mark or its colorable imitation by the infringer
Unfair Competition
It is consisted in employing deception or any other means contrary to good faith
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by which he shall pass off the good manufactured by him or in which he deals, or his
business or services for those of the one having established such good will, or who
shall commit any act calculated to produce said result (Sec. 168-1 IPC).
False Designation of Origin
Where the accused caused to be affixed in the labels of the bottle container of
the food seasoning a false designation of origin that the said seasoning was packed by
Chams Product Co. of San Francisco, California, when in truth it was packed in the
Philippines, such false representation falls under par.2 of Art. 189 (people vs. Lim Hoa
GR No. L-10612, May 30, 1958).
RA 623 enacted on June 5, 1951 as amended by RA No. 5700 also regulates the
use of duly stamped or marked bottles, boxes, casks, kegs, barrels and other similar
containers.
Common Carriers
Common carriers are persons, corporations, firms or associations engaged in
the business of carrying or transporting passengers or goods or both, by land, water or
air for compensation, offering their services to the public (Art 1732, RA 386).
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Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods
and for the safety of the passengers transported by them according to all the
circumstances of each case (Art. 1733, RA 386).
Common carriers are responsible for the loss, destruction or deterioration of the
goods, unless the same is due to any of the following causes:
1. Flood, storm, earthquake, lightning or other natural disaster or calamity;
2. Act of the public enemy in war, whether international or civil;
3. Act or omission of the shipper or owner of the goods;
4. The character of the goods or defects in the packing or in the containers;
5. Order or act of competent public authority (Art. 1734).
In all cases other than above mentioned (1-15At. 1734), the common carrier is
presumed to have been at fault or have acted negligently if the goods are lost,
destroyed or deteriorated unless they prove that they observe extraordinary diligence
(Art. 1735, RA 386),
Utmost Diligence
A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence of every cautious person with
due regard for all circumstances (Art. 1755, RA 386).
Death/Injuries
In case of death or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as required by law (Art. 1756, RA 386).
Common carriers are liable for the death of or injuries to passengers trough the
negligence or willful acts of the former's employees although such employees may
have acted beyond the scope of their authority or in violation of the orders of the
common carriers.
This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and supervision

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of their employees (Art. 1759, RA 386).
The death or injury above stated cannot be eliminated or limited by stipulation,
by the posting of notices, by statement on the tickets or otherwise (Art. 1760, RA 386).
Contributory Negligence
The passenger must observe the diligence of a good father of a family to avoid
injury to himself (Art. 1761, RA 386). The contributing negligence of the passenger
does not bar recovery of damages for his death or injuries, if the proximate cause
thereof is the negligence of the common carrier, but the amount of damages shall be
equitably reduced (Art. 1762, RA 386),
A common carrier is responsible for injuries suffered by a passenger on
account of the willful acts or negligence of other passengers, if the common carriers
employees through the exercise of the diligence of a good father of a family could
have prevented or stopped the act or omission (Art. 1763, RA 386).
Compromise
Morally, people with misunderstandings are supposed to settle their difference
peacefully by reaching a compromise even if under the law, they have caused an
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action against one another. Hence, it is desirable to acquire such values which are
worth compromising under pertinent laws as follows:
A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid litigation or put an end to one already commenced (Art. 2028, Civil
Code).
The Court shall endeavor to persuade the litigants in a civil case to agree upon
some fair compromise (Art. 2029, Civil Code).
A compromise has upon the parties the effect and authority of res judicata but
there shall be no execution except through judicial compromise (Art. 2037, Civil Code).
A compromise in which there is mistake fraud, violence, intimidation, undue
influence or falsity of documents, is voidable (Art. 1330).
Every Civil Action or proceeding shall be Suspended
1. If willingness to discuss a possible compromise is expressed by one or both
parties; or
2. If it appears that one of the parties, before the commencement of the action
or proceeding, offered to discuss a possible compromise but the other party
refused the offer (Art. 2030, Civil Code).
The Courts may mitigate the damages to be paid by the losing party who
have shown a sincere desire for a compromise (Art. 2031, Civil Code).
The Court's approval is necessary in compromises entered into by guardians,
parents, absentee's representatives, and administrators or executors of decedent's
estates (Art. 2032, Civil Code).

Exercise
I. Explain briefly: (10 points)

1. Contract -
2. Common Carrier -
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3. Compromise -
4. Crime -
5. Social Justice -

II. Write T if the statement is True and F if the statement is False: (10
POINTS)

______1. We encourage party litigants to reach a fair compromise.

______2. Social Justice is favoring the poor in terms of legislation and the application of
the same.
______3. Common Carrier is required to exercise extraordinary diligence in the
performance of duty.
______4. He who is obliged to deliver something is obliged to deliver its accessions and
accessories even though not mentioned.
______5. Parties may stipulate anything in the contract provided the same is not
contrary to law, moral, public order and public policy.
______6. He who caused damage to another shall be liable to the latter for indemnity
/compensation.
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______7. Parents/Guardians are civilly liable for damages caused by their minor children
or ward that are living in their company.
______8. No one shall be responsible for unforeseen event or though foreseen is
inevitable.
______9. One is guilty for quasi delict if he caused damage to another, there being fault
or negligence.
______10. Negligence is failure to exercise the required diligence.

Assessment
Answer briefly in your own understanding on the following questions: (10
points)

1. What is the ethical relationship to the Business Law?

2. What do you mean by "whoever is criminally liable is also civilly liable"?
3. Give a concrete application of "Social Justice"
4. What is "diligence of a good father of a family"?
5. Cite at least five (5) positive values relative to business.

Reflection
Now that you have completed your module for this week. Write a reflection about what
you have learned. Your reflections should include:
(1) your opinion about the lesson
(2) personal experience
(3) evidence to back up your thoughts and/or opinion (APA citation).
Things you can reflect on include the readings for this week, videos, and the
discussions. The purpose of this reflection is to ensure you are processing your
thoughts on the course content. This will enhance your learning and knowledge.
Resources and Additional Resources
Textbook:
• Penaflor, L.A & Penaflor, K.O (2017). First Edition. Values Education:
Legal and Ethical
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Perspective
Additional Resources:
 Rodolfa, Aquino, Dellova, Tiongco (2018). Leadership & Personality
Development for Tourism and Hospitality Professionals. Mindshapers
Co., Inc.
 Labuguen, F.C., Ramos, A.I., Placer, R.B., Vidal, C.J.E., Moralde, R.P.E.,
& Rendorio, E.V. (2012). Understanding the National Service Training
Program. Malabon City, Philippines: Mutya Publishing House.
 Internet Sources
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