FOURTH EDITION OBLIGATIONS G CONTRACTS Luss, Drineyples 6 Jurisprudence 2020 FEATURES: Simplified Examples True Or False Questions. Multiple Choice Questions ive Ca: Es Je lel iia LO atK Tee Tg © Midterm Examination Te a COACHING FOR RESULTS ATTY. ANDRIX D. DOMINGO, CPA, MBAphilippine Copyright, 2020 by ANDRIX D. DOMINGO ISBN: 978-621-95242-9-2 No part of this book may be reproduced in any form or any means without the written permission of the author. Any copy of this book without the signature of the author in colored pen on this page either proceeds from an illegitimate source or is in possession of one who has no authority to dispose of the same. ALL RIGHTS RESERVED Published by: COACHING FOR RESULTS PUBLISHING #02 Ampucao, Itogon, Benguet buslaw1234@gmail.comABOUT THE AUTHOR ATTY. ANDRIX DANG-OWAN DOMINGO, CPA, MBA Present and Former CPA Reviewer/Special Lecturer in REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS (RFBT) The Review School of Accountancy, Inc. (ReSA), Manila Philippine Accountancy Review for Excellence, Manila Saint Paul School of Professional Studies, Palo, Leyte University of Cebu, Cebu City University of San Carlos, Cebu City University of San Jose-Recoletos, Cebu City University of the Visayas, Cebu City St. Joseph College, Maasin City Far Eastern University, Silang, Cavite Emilio Aguinaldo College, Dasmarifias City University of Baguio, Baguio City University of the Cordilleras, Baguio City Urdaneta City University, Urdaneta City Collegio de Dagupan, Dagupan City University of Luzon, Dagupan City University of Pangasinan, Dagupan City Nueva Ecija Training and Review Center, Cabanatuan City Pampanga CPA Review, Angeles City CPA Review and Training Center, Urdaneta City Nation’s Foremost CPA Review, Inc., Baguio City Dagupan Accountancy Review, Dagupan City King’s College of the Philippines, Benguet Southern Mindanao Academic Review & Training Services, Davao City General Santos City and Cagayan de Oro City Center of Excellence for Review and Training Services, Davao City, Cebu City and Butuan City Hearing Officer Legal Services Division, Civil Service Commission Former School of Law Professor University of Baguio, Baguio City Cordillera Career Development College, Benguet Former Trial Lawyer Domingo Law Office, Baguio City4 This humble work is intended primarily for accountancy stugg, business students and Certified Public Accountant (CPA) board examin,” candidates. This work, however, could likewise provide a good ma students of law. PREFACE (2020 edition) ination, terial fop Simplified examples were incorporated and decisions of the Supreme Court were digested in a simple manner which serve as a tool for easier comprehension of the pertinent articles. Definition of terms used in the different articles were incorporate to enable the readers to appreciate and comprehend well the meaning of the law. This book is published in the hope that this humble work will be of great help to readers. True or False Questions and Multiple-Choice Questions were provided at the end of chapters for purposes of review. I want to express my gratitude and appreciation for the valued persistent assistance and support rendered by my friends Sunshine, Anaflor, Irene, Amie, Albert, Floyd, Marie, and my brothers Atty. Warden, Christian and Ronaldo. I want to express my heartfelt gratitude to my loving wife, Pinky, my lovely daughters, Xyanne and Xyra, Mama Conchita, my sisters-in-law, my friends, colleagues, students, and relatives who have helped me in writing this book. Special thanks to Mama Lerina and Papa Francisco, my parents-in- law, and to all relatives who played with Xyanne and Xyra while | was writing this book. ..and to GOd be the glory! Andrix D. DomingoCONTENTS About the Author Preface Title I - OBLIGATIONS CHAPTER 1 GENERAL PROVISIONS What is obligation? What is a right? Meaning of Civil Action Meaning of Cause of action ‘What is a complaint? What is REAL OBLIGATION (obligation to give What is PERSONAL OBLIGATION (obligation 7 do and not to do) Essential elements of an obligation Sources of obligation What is law? What is a contract? What is quasi-contract? Kinds of Quasi-Contracts What is Delict or Acts or Omissions Punished by Law? Civil Liabilities in Delict Quasi-delicts Elements of Negligence Kinds of Negligence Good faith The Rules on Negotiorum Gestio The Rules on Solutio Indebiti The Rules on Other Quasi-Contracts What is “Diligence of a Good Father of a Family”? The Rules on Delicts The Rules on Quasi-Delicts Requisites of Quasi-Delict Negligence Definition of proximate cause True or false questions Multiple choice questions CHAPTER 2 NATURE AND EFFECT OF OBLIGATIONS What is specific or determinate thing? What is generic or indeterminate thing Obligations of the Debtor or Obligor in Real Obligation Rights of the Creditor in Real Obligation What is diligence? lat is extraordinary diligence? 8 WCOVHHAWONNNEEEDILIGENCE REQUIRED IN REAL OBLIGATION (obligation to give) Meaning of delivery Kinds of delivery Personal right vs. Real Right Kinds of Fruits What is the concept of Specific performance in specific real obligation? What is reciprocal obligation? Accessions vs. Accessories Rights of the Creditor or Obligee in Personal Obligations When does delay begin? When is judicial or extrajudicial demand not necessary? What is meant by mora or delay? Kinds of Mora or Delay Injury vs. Damage vs. Damages Kinds of breach of the obligation Different Modes of Voluntary Breach of the Obligation Fraud Kinds of Fraud Dolo Causante vs. Dolo incidente Fraud and Bad Faith, Distinguished Fraud (Dolo) vs. Negligence (Culpa) Kinds of Negligence Culpa Contractual vs. Culpa Aquiliana Culpa Contractual vs. Culpa Aquiliana vs. Culpa Criminal Delay or Default or Mora Kinds of Delay Mora Solvendi Mora Accipiendi Compensatio Morae Contravention of the tenor of the obligation KINDS OF DAMAGES UNDER THE CIVIL CODE Actual or Compensatory Damages Moral Damages Nominal Damages Temperate or Moderate Damages Liquidated Damages Exemplary or Corrective Damages What is waiver? What is an action? What is NEGLIGENCE? What is Bad Faith? What is FORTUITOUS EVENT? Act of God distinguished from Act of Man Ordinary Fortuitous Event vs. Extraordinary Fortuitous Event Elements of Fortuitous Event 42 47 47 48 48 49 50 53 57 57 58 59 60 64 64 64 64 64 65 65 66 66 66 67 74 74 74 75 77 78 1) 79 79 80 80 81 81 82 82 84 85 91 91 91 92Exceptions to the Rule that no person shall be responsible for fortuitous events What is the doctrine of assumption of risk? Meaning of Presumption Kinds of Presumption Disputable Presumption Conclusive Presumption True or false questions Multiple choice questions CHAPTER 3 DIFFERENT KINDS OF OBLIGATIONS Primary Classification of Obligations under the New Civil Code Secondary Classification of Obligations under the New Civil Code Section 1 Pure and conditional obligations Pure obligation Conditional obligation Condition Classification of Conditions Suspensive Condition Resolutory Condition Suspensive condition vs. Resolutory condition Potestative condition Casual condition Mixed condition What is the rule in a mixed conditional obligation? Possible condition Impossible condition Positive condition Negative condition Divisible condition Indivisible condition Conjunctive condition Alternative condition Express condition Implied condition Period Potestative condition Impossible condition KINDS OF IMPOSSIBLE CONDITIONS What is a positive condition What is a negative condition Doctrine of Constructive Fulfillment of Suspensive Condition Requisites of the doctrine of constructive fulfillment of suspensive condition Principle of retroactivity in suspensive condition Loss, explained 98 100 102 103 103 106 109 111 124 124 125 127 127 127 127 128 128 130 130 131 131 131 131 131 131 132 132 132 132 132 132 132 132 132 136 140 140 142 144 145 145 148 154Rules in case of loss, deterioration, or improvement of the thing pending the happening of the condition in obligation to give Usufruct, explained Usufructuary, explained Rights of the usufructuary WHAT IS RESCISSION? Reciprocal obligation, explained What is mutual restitution? ALTERNATIVE REMEDIES OF INJURED PARTY Section 2 Obligations with a Period Obligation with a Period Day certain, meaning Term or Period CONDITION VS. TERM OR PERIOD Kinds of Period or Term Suspensive period (Ex Die) Resolutory period (In Diem) Period has been established in favor of the debtor Period has been established in favor of the creditor When debtor loses the right to make use of period? Section 3 Alternative obligations Simple Obligation Compound Obligation Kinds of Compound Obligation Conjunctive obligation Distributive obligation Kinds of Distributive Obligation Alternative Obligation Facultative Obligation Effects of loss of objects of alternative obligation when choice belongs to debtor Effects of loss of objects of alternative obligation when choice belongs to creditor Facultative obligation ALTERNATIVE VS. FACULTATIVE OBLIGATION Section 4 Joint and Solidary Obligations Joint obligation Effects of Joint obligation Solidary obligation JOINT OBLIGATION VS. SOLIDARY OBLIGATION SOLIDARY DEBTOR VS. GUARANTOR Joint Indivisible Obligation Characteristics of Joint Indivisible Obligation INDIVISIBILITY AND SOLIDARITY DISTINGUISHED Kinds of Solidarity Effects of beneficial acts and prejudicial acts of a solidary creditor 155 156 157 157 161 162 163 166 172 172 172 172 173 173 173 173 179 179 181 183 183 183 183 183 183 183 183 184 187 189 191 192 193 193 194 195 196 196 200 201 202 203 206Effect of demand against one of the solidary debtors Effects of payment by a solidary debtor What is suretyship contract? Solidarity and Surety distinguished Effect of payment by a solidary debtor after the obligation has prescribed or become illegal Rule in case the thing has been lost or if the prestation has become impossible without the fault of one of the solidary debtors Rule in case the thing has been lost or if the prestation has become impossible through the fault of the solidary debtors Rule in case the thing has been lost of if the performance has become impossible through fortuitous event but after one of the solidary debtors has incurred legal delay Defenses available to a solidary debtor Section 5 Divisible and Indivisible Obligation s Divisible obligations Indivisible Effect of breach of a joint indivisible obligation Obligations deemed indivisible Divisibility or indivisibility in obligations not to do Section 6 Obligations with a Penal Clause Penal clause Whatis an accessory obligation? When is the penalty demandable? Penalty in relation to the concept of mora or delay Purposes of penal clause Functions of penal clause KINDS OF PENALTY Effect of Penalty Is there a distinction between a penalty and liquidated damages? Limitation on the part of the debtor in obligations with a penal clause Limitation on the part of the creditor in obligations with a penal clause Penalty may be reduce by the courts Effect of nullity of the penal clause Effect of nullity of the principal obligation True or false questions Multiple choice questions CHAPTER 4 EXTINGUISHMENT OF OBLIGATIONS General provisions Section 1 Payment or performance Payment Receipt and voucher, distinguished 210 213 214 214 217 220 220 221 222 222 222 222 223 224 225 225 225 225 226 226 227 227 227 228 228 229 229 231 233 233 234 236 255 255, 256 256 256Requisites of payment Principle of Integrity : Substantial performance doctrine To whom payment must be made Effect of payment to an incapacitated person What is dacion en pago? Requisites of dacion en pago When is a debt liquidated? Rules in payment of debts in money What is legal tender? What is inflation? Requisites of extraordinary inflation Place of payment of the obligation SPECIAL FORMS OF PAYMENT Subsection 1 Application of payments What is application of payment? Requisites of application of payment Rules on application of payments Subsection 2 Payment by cession What is payment by cession? Requisites of payment by cession Effect of payment by cession DATION IN PAYMENT AND PAYMENT BY CESSION, DISTINGUISHED Subsection 3 Tender of Payment and Consignation What is tender of payment? Consignation Requisites of consignation Rationale for consignation Tender of payment distinguished from consignation Effect if Consignation has been duly made Effects if after consignation, the debtor withdraws with the authority of the creditor Section 2 Loss of the thing due Effect of fortuitous loss in a generic obligation What is the doctrine of unforeseen events? Effect if obligation proceeds from a criminal offense Section 3 Condonation or Remission of the Debt Condonation or remission Requisites of condonation or remission Kinds of Remission or Condonation Section 4 Confusion or Merger of Rights Confusion or merger Requisites of confusion or merger Section 5 Compensation Compensation distinguished from confusion Kinds of Compensation 287 261 262 269 272 277 278 280 281 282 283 284 286 287 288 288 289 289 297 297 297 297 298 298 299 299 300 301 303 307 309 310 312 315 317 318 318 319 320 326 326 326 328 328 328Debt vs. claim Right of guarantor to set up compensation Kinds of compensation as to effect Conventional or voluntary compensation Requisites of conventional compensation Legal compensation vs. Conventional compensation Judicial compensation DEBTS WHICH CANNOT BE COMPENSATED Section 6 Novation What is novation? Is there a form required in Novation? Novation is not presumed Kinds of Novation Test of Incompatibility Total Novation vs. Partial Novation Kinds of Personal Novation Kinds of Substitution Expromision Delegacion Effect of novation of a principal obligation on accessory obligations Effect of novation where the new obligation is void Effect of novation where the old obligation is void Subrogation Kinds of Subrogation Conventional subrogation and assignment of rights, distinguished What is legal subrogation? True or false questions Multiple choice questions TITLE Il CONTRACTS CHAPTER 1 GENERAL PROVISIONS Essential Elements of a Contract Classification of contracts Contract of Adhesion What is autonomy of contracts or freedom of contract? What is nominate contract? What is innominate contract? Kinds of innominate contract Rules on innominate contracts Principle of mutuality of contracts Purpose of mutuality principle Relativity of contracts Four Exceptional cases to the principle of relativity of contracts Requisites of stipulation pour autrui 333 335 336 338 338 339 339 342 347 347 348 348 348 350 351 355 356 356 356 361 361 362 363 363 363 365 367 370 386 386 387 390 392 395, 395 395 396 398 399 404 405 408What is tort interference? Elements of tort interference Stages in the life of a contract Effect of judicial approval of a contract CLASSIFICATION OF CONTRACTS ACCORDING TO THEIR PERFECTION Consensual contract Real contract Formal Contract or Solemn Contract Effects of perfection of the contract Effect of an unauthorized contract True or false questions Multiple choice questions CHAPTER 2 ESSENTIAL REQUISITES OF CONTRACTS General Provisions Elements of a contract Essential elements Natural elements Accidental elements Section 1 Consent Consent Offer Policitacion Counter-offer Acceptance by letter or telegram Consent of Corporation What is option? Persons incapacitated to give consent What is lucid interval? Vices of consent Characteristics of Consent Vice of consent in a compromise agreement approved by the court What is mistake? Effect of simple mistake of account Mistake of Fact and Mistake of Law, distinguished Violence Requisites of violence Intimidation. Requisites of intimidation Elements to consider in determining the degree of intimidation Threat to enforce one’s just or legal claim Violence or intimidation employed by a third person What is undue influence? What is Fraud? What is Dolo causante or causal fraud? 411 412 414 415 416 416 417 417 419 419 422 423 431 431 431 431 431 432 435 435 435 435, 436 436 436 437 439 441 441 441 442 443 443 445 451 451 451 452 452 452 452 453 455 455Dolo incidente or incidental fraud Dolo causante or causal fraud and Dolo Incidente or incidental fraud, distinguished Requisites of Causal Fraud Principle of concealment What is fraud? The Degree of Evidence Needed to Prove the Existence of Fraud Fraud and Bad faith, distinguished What is absolute simulation? What is relative simulation? Section 2 Object of Contracts Kinds of object of contracts What is future inheritance? Section 3 Cause of Contracts What is Cause? Cause and Consideration, distinguished Cause and motive, distinguished True or false questions Multiple choice questions CHAPTER 3 FORM OF CONTRACTS Form for validity of contract Form for enforceability of contract Form for greater efficacy or convenience of contract What is a pubic document? Multiple choice questions CHAPTER 4 REFORMATION OF INSTRUMENTS What is reformation? Requisites of reformation Interpretation and reformation, distinguished Instruments that cannot be reformed Multiple choice questions CHAPTER 5 INTERPRETATION OF CONTRACTS What is interpretation? Plain meaning rule and Four corners rule Intention of the parties The whole and every part of a contract must be considered Complementary contracts construed together doctrine or No- segregation principle True or false questions Multiple choice questions CHAPTER 6 RESCISSIBLE CONTRACTS What is Rescission? Effect of Rescission 455 455 456 458 462 462 463 463 463 465 465 466 470 470 470 471 476 476 487 487 487 487 490 492 494 494 495 495 498 499 502 502 502 504 508 511 518 518 523 S23 523Cancellation of a contract and its rescission, distinguished Rescission in Article 1191 and Rescission in Article 1381, distinguished Who is a ward? Who is an absentee? What is subsidiary remedy? What is mutual restitution? To rescind, meaning What is accion pauliana? Presumption of fraud is not conclusive Badges of fraud, explained Prescriptive Period for Action for Rescission True or false questions Multiple choice questions CHAPTER 7 VOIDABLE CONTRACTS What are voidable contracts? Void and voidable contracts, distinguished Vices of consent What is ratification? Requisites of Ratification or Confirmation RESCISSION VS. ANNULMENT Action for annulment of contract and action for nullity of contract, distinguished Effects of Ratification True or false questions Multiple choice questions CHAPTER 8 Unenforceable contracts What are unenforceable contracts? What are unauthorized contracts? Why does the law require that a contract be in some form? Effect when the required form is for enforceability What is statute of frauds Purpose of statute of frauds Statute of frauds is applicable only to executory contracts Right of first refusal not among those listed under the Statute of Frauds Oral partition not among those listed under the Statute of Frauds What is parol evidence? True or false questions Multiple choice questions CHAPTER 9 VOID AND INEXISTENT CONTRACTS Void or inexistent contract, defined Rescissible contract and void contract, distinguished Void contract and voidable contract, distinguished 524 526 528 528 530 533 533 535 537 537 541 543 543 550 550 550 551 553 553 554 554 557 565 565 569 569 570 570 570 570 571 571 574 574 576 581 581 587 587 587 588Simulated contract, explained Absolutely simulated contract Relatively simulated contract Effect of contracts expressly prohibited or declared void by law Action for annulment of contract and action for declaration of nullity of contract, distinguished What is the principle of in pari delicto or in equal fault Exceptions to the rule on in pari delicto ‘True or false questions Multiple choice question PRELIMINARY EXAMINATION MIDTERM EXAMINATION FINAL EXAMINATION 589 589 590 593 595 598 599 612 613 621 639 659OBLIGATIONS AND CONTRACTS TITLE I. - OBLIGATIONS CHAPTER 1 GENERAL PROVISIONS Art. 1156. An obligation is a juridical necessity to give, to do or not to do. What is obligation? Under the New Civil Code (NCC), obligation is a juridical necessity to give, to do or not to do.t An obligation "to do” includes all kinds of work or service; while an obligation "to give" is a prestation which consists in the delivery of a movable or an immovable thing in order to create a real right, or for the use ent, or for its simple possession, or in order to return it to its Whatisa right? A right is a claim or title to an interest in anything whatsoever that is enforceable by law.? A right is a power, privilege, or immunity guaranteed under a constitution, statute or decisional law, or recognized as a result of long usage, constitutive of a legally enforceable claim of one person against the other.* For every right enjoyed by any person, there is a corresponding obligation on the part of another person to respect such right. Thus, Justice J.B.L. Reyes offers the definition given by Arias Ramos as a more complete definition: ‘An obligation is a juridical relation whereby a person (called the creditor) may demand from another (called the debtor) the observance of a determinative conduct (the giving, doing or not doing), and in case of breach, may demand satisfaction from the assets of the latter. 1Art, 1156 of the New Civil Code of the Philippines (NCC). 2 Aslan Construction and Development Corporation vs. Philippine Commercial International Bank, G.R. No. 153827, April 26, 2006. Makati Stock Exchange, Inc. etal. vs, Miguel V. Campos substituted by julia Ortigas Vda. De Campos, G.R. No. 138814, April 16,2009. ‘Rellosa vs Pellosis, GR. No. 138964, August 9, 2001, 362 SCRA 486. ‘Makati Stock Exchange, Inc. etal. vs. Miguel V. Campos substituted by Julia Ortigas Vda. De Campos, G.R. No. 138814, April 16, 2009. 1Chapter 1 - General Provisions n is 01 i ment or protection of a right, ne by which a party sues another §,, Meaning of Civil Actio! A ci or the prevention or Tedresy te o a enforce! wrong.® Meaning of Cause of Action A cause of action is # right of another.” he act or omission by which a party Violates a What is a complaint? : : The complaint contains the written statements alleging the plaintiffs claim or cause or causes of action It is the initial wo statement that starts a civil action. The function of a complaint is to give th, defendant notice of the nature and basis for the claim. Complaint in Relation to Cause of Action : i ; A complaint states a cause of action where it contains three essential elements of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation of said legal right. If these elements are absent, the complaint becomes vulnerable to dismissal on the ground of failure to state a cause of action.? Meaning of Plaintiff A plaintiff is the party who brings a civil suit in a court of law.!° He is the person who files the complaint in court. Meaning of Defendant A person sued ina civil proceeding. He is the person who will be required to answer the complaint in court. What is REAL OBLIGATION (obligation to give)? Obligation of the debtor or obligor to deliver a thing, movable of immovable, to the creditor or obligee for the purpose of transferring ownership or for the use or possession of the recipient. ‘Rule 1, See3, 1997 Rules of Civil Procedure. "Rule 2, See, 1997 Rules o Ci Procedure. * Rule 6, Sec. 1 and 31997 Rules of Cv Procdur. ‘Makati toc Exchange, ne. etal vs. Miguel V. i “aka Stoel Eehang iguel V. Campos substituted by Julia Ortigas Vda, De Campos. Ge. "Blacks Law Dictionary p. 460, Eighth Et "Black's Law Dictionary, p. 1189, ighth Elen,Chapter 1 - General Provisions KINDS OF REAL OBLIGATION 1. Determinate or Specific Real Obligation The obligation of the debtor or obligor to deliver a determinate or specific thing to the creditor or oblige, Meaning of specific or determinate thing A s determinate when it is particularly designated or physically segregated from all others of the same class." Example: The obligation to deliver a car with plate number ABC123 2. Indeterminate or Generic Real Obligation The obligation of the debtor or obligor to deliver an indeterminate or generic thing to the creditor or oblige. Meaning of generic or indeterminate thing A thing is indeterminate when it is designated merely by its class or genus without any particular designation or physical segregation from all others of the same class.!3 Example: The obligation to deliver five tables. What is PERSONAL OBLIGATION (obligation to do and not to do)? Obligation to do is also known as positive personal obligation while obligation not to do is also known as negative personal obligation. KINDS OF PERSONAL OBLIGATION 1. Positive Personal Obligation (obligation to do) This is the obligation of the debtor or obligor to perform some work or service for the creditor or obligee. Example: The obligation of X to repair the bicycle of Y. 2. Negative Personal Obligation (obligation not to do) This is the obligation of the debtor or obligor not to perform some act in favor of the creditor or oblige. Example: The obligation not to construct an extension on a house as per agreement ina contract. Art. 1460, NCC. Gaisano Cagayan, Inc, vs. Insurance Company of North America, G.R. No. 147839, June 8, 2006, 35 1 Provisions Chapter 1 - General ELEMENTS OF AN OBLIGATION ESSENTIAL ligor tor debtor or obl 1 asa suet re elaine demand, is the person who has the obligation to give, ' ; reditor or obligee 2. Paes creas che right to demand the fulfimen oy, ligation. le is the person who has the right to demand compliance ae obligation r not to do. ij obligation to give, to doo 3. Object The fact, prestation or sé! debtor or obligor which may const: service. It is the particular conduct of ist in giving, doing, or not doing Something fect of an obligation, and it is the conduct. requireg A prestation is the obj mn ob hy the parties to do or not to do, or to give. tie or efficient cause or vinculum juris 4, Juridical or le; i J gal tion between the passive subject o, It is which creates the rela obligor and the active subject or obligee. a ; ‘The cause is the vinculum juris or juridical tie that essentially binds the parties to the obligation. This linkage between the parties is a binding relation that is the result of their bilateral actions, which gave rise to the existence of the contract.1 An obligation is a juridical necessity to give, to do, or not to do. The obligation is constituted upon the concurrence of the essential elements thereof, viz: (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (law, contracts quasi-contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct; required to be observed (to give, to do or not to do); and (c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects. Example: In a contract executed between X and ABC University, X agreed to teath for one year for a compensation. In this case X is the debtor, as he is obligated to teach, and ABC University is the creditor. To teach for one year is the objet of the obligation and the legal tie is the contract. The Wellex Group, Inc. vs. U-Land Alene, Co, L , nes, Co, Ltd, spate ite ch tn yea < » etal. vs. CA and Buen Realty Development Corporation, G.k. No, 109125, December 2: 199 4Chapter 1 - General Provisions However, since their contract is reciprocal, ABC University is also a debtor with regard to X’s compensation. Art. 1157. Obligations arise from: |. Law; Contracts; Quasi-contracts; Acts or omissions punished by law; and Quasi-delicts. ve eNe The above enumerations are the so-called sources of obligation under the Civil Code. Consequently, an obligation imposed on a person, whether natural or juridical, and the corresponding right granted to another, must originate from either or a combination of these sources. Thus, a Complaint or Petition filed by a person claiming a right to the Office of the President of this Republic, but without stating the source of his purported right, cannot be said to have sufficiently stated a cause of action. Also, a person claiming to be the owner of a parcel of land cannot merely state that he has a right to the ownership thereof, but must likewise assert in the Complaint either a mode of acquisition of ownership or at least a certificate of title in his name.17 Note: The sources of obligation under this provision are exclusive. Is Practice or Custom a source of obligation? A practice or custom is, as a general rule, not @ source of a legally demandable or enforceable right. Indeed, in labor cases, benefits which were voluntarily given by the employer, and which have ripened into company practice, are considered as rights that cannot be diminished by the employer. Nevertheless, even in such cases, the source of the employees’ right is not custom, but ultimately, the law, since Article 100 of the Labor Code explicitly prohibits elimination or diminution of benefits.. I. What is law? A rule of conduct, just, obligatory, promulgated by legitimate authority, and of common observance and benefit.19 7Makati Stock Exchange, Inc. et.al. vs. Miguel V. Campos substituted by Julia Ortigas Vda. De Campos, G.R. No. 138814, April 16, 2009. Makati Stock Exchange, Inc. et.al. vs. Miguel V. Campos substituted by Julia Ortigas Vda. De Campos, G.R. No. 138814, April 16, 2009. ¥ 1 Sanchez Roman 3Vv Chapter 1- General provisions i ie 1 Revenue Cod ‘Example: der the National Interna’ Code ory The duty tO ay tats he obligation to support ones family under te cal Governme! nde. family Code of the philippines: problem: : 1 anufacture of wines and liquoy x corp. is ene rs writs bottles under Republic ne its business, it sells its products to the public intial investments in brand new ies and which they use for about sition. X Corp. thus .s and uses them over and over has registered its m No. 623. In the conduct of excluding the bottles. Itmal bottles which it buys from five times in order to recover retrieves its used empty pottles, washe: in as containers for its products. agai hand, Y Co. is engaged in the production of patis and other food seasonings and is engaged in the buying and selling of all kinds of foods. In producing patis and ‘other food seasonings, Y Co. uses as containers bottles owned by X Corp. without any authority or permission from the latter. In the process, Y Co. is unduly benefited from the use of the bottles. glass factories On the othe Subsequently, a total of 26,241 empty bottles were seized at the address of Y Co. where the latter claimed that the bottles were purchased from junk dealers; hence, it became the owner thereof. Is Y Co. covered by Section 6 of R.A. 623? Answer: Pertinent provisi clarity: a It shall be unlawful for any person, without the written consent oft he manufac, bottler, or seller, who has successfully registered the seer ownership in accordance with the provisions of the M ” a PO fe pe bottles, xxx, or other similar containers? mretan shall be punished by a fine of of sas. Any violation oe ion of Republic Act No. 623 is quoted hereunder for XXX Sec. 6, The provision: is of this Act prohibiti ct shall n i as vats,” a the use of bottles as contain jot be interpreted 7 stand shallar native products cr coe “pagoonsChapter 1 - General Provisions Republic Act No. 623, was meant to protect the intellectual property rights of the registrants of the containers and prevent unfair trade practices and fraud on the public. However, the exemption granted in Sec. 6 thereof was deemed extremely necessary to provide assistance and incentive to the backyard, cottage and small-scale manufacturers of indigenous native products such as patis, sisi and toyo who do not have the capital to buy brand new bottles as containers nor afford to pass the added cost to the majority of poor Filipinos who use the products as their daily condiments or viands. In view of these considerations, the Supreme Court held that the exemption contained in Section 6 of Rep. Act No. 623 applies to all manufacturers of sisi, bagoong, patis and similar native products without distinction or qualification as to whether they are small, medium or large scale.?0 Note: The above case illustrates an gbligation arising from law, Republic Act 623 prohibits, among others, the filling up of the registered bottles of manufacturers, bottlers or sellers. However, the law itself provides for an exemption, that is, it does not apply to all manufacturers of sisi, bagoong, patis and similar native products. Il, What is a 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. Among the sources of an obligation is a contract?2, which 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?3. A contract undergoes various stages that include its negotiation or preparation, its perfection and, finally, its consummation, Negotiation covers the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is concluded (perfected). The perfection of the contract takes place upon the concurrence of the essential elements thereof. prefect ee 2 see Twin Ace Holdings Corporation vs. Rufina and Company, 2 Art 1305,NCC. 2 art 1187, NCC. 2 art. 1305, NCC. GR.No, 160191, June 8, 2006.Chapter 1 ~ General Provisions The stage of consummation begins when the parties Perform, respective undertakings under the contract culminating ie thej, extinguishment thereof.24 the Until the contract is perfected, it cannot, as an independent s of obligation, serve as a binding juridical relation.?5 Urey Article 1159 of the NCC provides that obligations arising g, contracts have the force of law between the contracting parties ang shoul be complied with in good faith. The terms of a contract determine q respective obligations of the contracting parties thereto. Therefore, 31° contracting party who violates the stipulations therein should be require to perform their obligations under the agreement. Obligations arising from contracts have the force of law between th, contracting parties and should be complied with in good faith. Unless the stipulations in a contract are contrary to law, morals, good customs, Public order or public policy, the same are binding as between the parties, It isa general principle of law that no one may be permitted to change his mind or disavow and go back upon his own acts, or to proceed contrary thereto, to the prejudice of the other party. Likewise, it is settled that if the terms of the contract clearly express the intention of the contracting parties, the literal meaning of the stipulations would be controlling 26 Itis settled that in culpa contractual, the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, 2 corresponding right of relief.2” Culpa contractual means the negligence in the performance of a contract. What is the meaning of Quasi? This is a latin term which means “as if.” II. What is Quasi-Contracts? Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.28 2+Ang Yu Asuncion, etal vs.CA and Buen Realty Development Corporation, GR. No. 109125, December 2,399 2sAng Yu Asuncion, etal, vs, CA and Buen Realty Development Corporation, GR. No, 109125, December 21 ‘del Liga vs. Allegro Resourees Corp Gt No. 175554, December 23, 2008. Joseph Saludaga vs. Far Eastern University and Edllberto C. De Jesus, GR.No.179337, April 30,2008. mart 2142, NCC. Jesus, 9387, Apri Le ae J}Chapter 1 - General Provisions Conditions of unjust enrichment Following Article 22 of the New Civil Code, two conditions must concur to declare that a person has unjustly enriched himself or herself, namely: 1, A person is unjustly benefited; and 2, Such benefit is derived at the expense of or to the damage of another.2? KINDS OF QUASI-CONTRACTS 1. Negotiorum Gestio Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so.30 There is no Negotiorum Gestio in either of these instances: a, When the property or business is not neglected or abandoned; b. If in fact the manager has been tacitly authorized by the owner.31 2. Solutio Indebiti 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.32 For the extra-contractual obligation of solutio indebiti to arise, the following requisites must be proven: a. The absence ofa right to collect the excess sums and b. The payment was made by mistake.33 Problem: H, W, and J, alleged that with Z, they entered into a contract for: (1) the sale of a beach house owned by J, and (2) the assignment of J's contract of lease on the land where the house stood. The sale of the beach house and the assignment of the lease right would be in the name of W, but the total consideration of 220,000 Deutschmarks (DM) would be paid by Z. A promissory note was executed by Z in favor of J. According to Z, however, H and W were his friends who held in trust for him, a time deposit account in the amount of DM 200,000 at S 2Victoria Morefio-Lentfer, etal vs. Hans Jurgen Wolff, G.R. No, 152317, November 10, 2004. 2 Art 2144,NCC. 3 Art 2144, NCC. art. 2154, NCC. =aTitan-Ikeda Construction & Development Corporation vs. Primetown Property Group, Inc, G.R. No. 158768, February 12, 2008. 9Chapter 1 - General Provisions Bank. Apprised of his interest to own a house along a beach, urged him to buy J's beach house and lease rights. Z agreed ang y@"™! W a bank-to-bank transaction, he paid J the amount of DM 221,799 "Ug, consideration for the sale and assignment of the lease rights, Hows a and W surreptitiously executed a deed of sale whereby the bea ch ret | was made to appear as sold to W for only P100,000. The assign, the lease right was likewise made in favor of W. Upon learning ree of filed a Complaint for annulment of sale. Ms, 2 Does the principle of solutio indebiti apply in the present cas Answer: : The quasi-contract of solutio indebiti harks back to 4 ancient principle that no one shall enrich himself unjustly at 1° expense of another. It applies where (1) a payment is made when thet exists no binding relation between the payor, who has no duty to pay and the person who received the payment, and (2) the is moa. through mistake, and not through liberality or some other cause. In the instant case, records show that a bank-to-bank payment was made by Z to J in favor of W. Z was under no duty to make such payment for the benefit of W. There was no binding relation between 7 and the beneficiary, W. The payment was clearly a mistake. Since received something when there was no right to demand it, she had an obligation to return it. The Court is convinced that W had been unjustly enriched at the expense of Z. She acquired the properties through deceit, fraud and abuse of confidence. The principle of justice and equity does not workin her favor but in favor of Z. Whatever she may have received by mistake from and at the expense of Z should thus be returned to the latter, if the demands of justice are to be served. 3. Other Quasi-Contracts Those support given by strangers as enumerated under article 2164 to 2175 (these articles are presented under Article 1160) of the New Civl Code. Problem: Spouses H and W executed a contract over their conjugal hous and lot in favor of Y for and in consideration of P1,310,430. The contrat granted the spouses the option to repurchase the property within S* months for P1,310,430 plus the agreed interest. see Victoria Morefio-Lentfer, et.al. vs. Hans Jurgen Wolff, G.R. No, 152317, November 10, 2004. 10Chapter 1 - General Provisions Subsequently, W tendered to Y the amount of P1,633,034.20 in the form of two manager's checks, which the latter refused to accept for being allegedly insufficient. Hence, W filed a Complaint for the redemption of the property. She deposited with the RTC two checks that Y refused to accept. Y testified that she incurred expenses including payment of real estate taxes in arrears, transfer tax and capital gains tax, and other expenses. Y admitted though that W has tendered payment amounting to P1,633,034.20 in the form of two manager's checks, but these were refused acceptance for being insufficient. She also claimed that several letters were sent to W and her lawyer, informing them of the computation of the loan obligation inclusive of said expenses. Is W liable for the reimbursement of the real property taxes? Answer: The Court observes that Y paid real property taxes amounting to 67,567.10 to halt the auction sale by the City of Muntinlupa. Her payment was made in good faith and benefited W. Accordingly, Y should be reimbursed; otherwise, W would be unjustly enriched, under Article 2175 of the Civil Code which provides: Art. 2175. Any person who is constrained to pay the taxes of another shall be entitled to reimbursement from the latter.35 IV. What is Delict or also known as “Acts or Omissions Punished by Law”? A violation of the law; especially, a wrongful act or omission giving rise to a claim for compensation.2 Every person criminally liable for a felony is also civilly liable (are 100, Revised Penal Code). Civil Liabilities in Delict3” 1. Restitution The restitution of the thing itself must be made whenever possible, with allowance for any deterioration, or diminution of value as determined by the court. 35 see Myrna Ramos vs. Susana Sarao and Jonas Ramos, G.R. No. 149756, February 11, 2005. 36 Black’s Law Dictionary, p. 460, Eighth Edition. » Art. 104, Revised Penal Code. 11S| Chapter 1 - General Provisions The thing itself shall be possession of a third person who the latter his action against the pro] restored, even though it be found in 4, has acquired it by lawful means, saving i per person, who may be liable to him, This provision is not applicable in cases in which the thing has b, ea acquired by the third person in the manner and under the requirements which, by law, bar an action for its recovery." 2. Reparation of the damage caused ‘ The court shall determine the amount of damage, taking into consideration the price of the thing, whenever possible, and its special sentimental value to the injured party, and reparation shall be made accordingly.3° 3. Indemnification for consequential damages Indemnification for consequential damages shall include not only those caused the injured party, but also those suffered by his family or by a third person by reason of the crime.*° Problem: After trial, the trial court rendered a decision finding X guilty beyond reasonable doubt with murder for allegedly shooting Y with firearms which directly caused his death and was sentenced to suffer the penalty of Reclusion Perpetua. He was committed to the New Bilibid Prison (NBP). While X’s case is on appeal with the Supreme Court, The Director of the Bureau of Corrections, informed the Court that X had died at the NBP Hospital. Will the death of X during appeal of his conviction totally extinguished his civil liability? Answer: The iability, based solely on delict (civil liability delicto). Hl Te The consequences of X's death are provided for in Article 89 (1) of the Revised Penal Code, which reads as follows: eet 58 Art.105, Revised Penal Code. 39 Art.106, Revised Penal Code. 40 Art 107, Revised Penal Code. 12Chapter 1 - General Provisions “Art. 89. How criminal liability is totally extinguished, - Criminal liability is totally extinguished: 1. By the death of the convict, as to the personal penalties; and as to pecuniary penalties, liability therefor is extinguished only when the death of the offender occurs before final judgment; XxX In the present case, it is clear that the death of X extinguished his criminal liability. Moreover, because he died during the pendency of the appeal and before the finality of the judgment against him, his civil liability arising from the crime or delict (civil liability ex delicto) was also extinguished, It must be added, though, that his civil liability may be based on sources of obligation other than delict (ie. Law, Contracts, Quasi-contract, and Quasi-delicts). For this reason, the victims may file a separate civil action against his estate, as may be warranted by law and procedural rules. V. QUASI-DELICTS 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.42 i-delic i Ex-delicto) is the equivalent of the term “tort” in Anglo-American law. It is also known as “culpa-aquiliana.” Elements of Negligence: 1. The fault or negligence of the defendant; 2. The damage suffered or incurred by the plaintiff; and 3. The relation of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff. To reiterate, a plaintiff is the party who brings a civil suit in a court of law.43 A defendant is a person sued in a civil proceeding. Kinds of Negligence 1, Culpa Aquiliana or Quasi-Delict This is negligence resulting from the failure to observe the required diligence which causes damage to another person. 4 see People ofthe Philippines vs, Pedro Abungan, etal, GR, No. 136843, September 28, 2000. Art 2176, NCC. ‘ Black's Law Dictionary, p. 460, Eighth Edition. “+ Black’s Law Dictionary, p. 1188, Eighth Edition. 13Chapter 1 - General Provisions 2, Culpa Contractual This is negligence in mance of a pre-existing contract, n the perfor Note: a ’ Both culpa aquiliana and culpa contractual a! civil negligence, 3. Culpa Criminal : This is negli This is also known as Criminal Negligence. is is negligence which results in the commission of a crime. DELICT VS. UASI-DELICT ch QUASI-DELICT 5 Wrong committed against the | Wrong committed against a State. person. Criminal intent is not necessary. Criminal intent is necessary for the existence of liability, asa rule. ‘Aationable in any act or omission ‘Applicable only when there is a 1 penal law penalizing it. wherein fault or negligence intervenes. Requires proof beyond | Requires preponderance of reasonable doubt evidence Employer's liability is subsidiary. | Employer's liability is primary. ‘Art. 1158. Obligations derived from law are not presumed, Only those expressly determined in this Code or in special laws are demandable, and shail be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (1090) | Problem: | A Corp. B Corp., and C Corp. maintain and operate shopping | | malls in various locations in Metro Manila. A Corp, B Corp., and C Corp. spend for the maintenance and administration of their respective parking facilities. They provide security personnel to protect the vehicles parked in their parking facilities and maintain order within the area. In turn, they collet parking fees from the persons making use of their parking facilities. The Philippine Government filed a case against A Corp., B CorPs and C Corp. praying that an Order be issued declaring that the practi of A Corp., B Corp., and C Corp. in charging parking fees is violative ® the National Building Code and is therefore invalid. 14Chapter 1 - General Provisions Are A Corp., B Corp. and C Corp. obliged to provide free parking spaces to their customers or the public? Answer: The explicit directive of the National Building Code is that A Corp, B Corp, and C Corp., should provide parking and loading spaces, in accordance with the minimum ratio of one slot per 100 square meters of shopping floor area. There is nothing therein pertaining to the collection (or non-collection) of parking fees by A Corp., B Corp., and C Corp. In fact, the term “parking fees” cannot even be found at all in the entire National Building Code. Since the National Building Code does not mention parking fees, then simply, said provisions do not regulate the collection of the same. The RTC and the Court of Appeals correctly applied Article 1158 of the New Civil Code, which states: Art. 1158. Obli |. 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 this Book.s Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith, (1091a) Good faith Good faith is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry. The essence of good faith lies in an honest belief in the validity of one’s right, ignorance of a superior claim and absence of intention to overreach another.*6 Contracting parties may freely stipulate their duties and obligations in their contract which would be binding on them. So that if it’s not contrary to law, morals, good customs, public order, or public policy, the agreement entered into between said parties must be respected and given the force of law between them. ‘5see The Office ofthe Solicitor General vs. Ayala Land Incorporated, etal, G.R. No. 177056, September 18,2009. 4©The Wellex Group, Inc vs. U-Land Airlines, Co, Ltd, GR No. 167519, January 14, 2015. 15= Chapter 1 - General Provisions Problem: se President of X Corp. obtained a 1,000,000 loan nn with a monthly interest of P40,000 payable for six ctl OF a tone obligation of P1,240,000 to be paid within 6 mon sP signed promissory note in his personal capacity, and as duly authorized py © Board of Directors of X Corp. Subsequently, P and X Corp. had already paid a total 21,108,772. However, Y found that P and X Corp. still had 3) outstanding balance of P1,364,151, to which it applied a 4% Monthly, interest. Thus, Y filed a complaint for sum of money to enforce the unpaid balance, plus 4% monthly interest. of In their Answer, P and X Corp. admitted the loan of P1,240,009, but denied the stipulation on the 4% monthly interest, arguing that the interest was not provided in the promissory note. 1. Did the parties agree to the 4% interest on the loan; and 2. Does the 4% interest apply only to the 6-month payment period or until full payment of the loan? Answer: i ie When the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal meaning of its stipulations governs, It is only when the contract is vague and ambiguous that courts are Permitted to resort to the interpretation of its terms to determine the parties’ intent. The Court note that this agreed sum can be computed at 4% interest per month, but no such rate of interest was stipulated in the promissory note; rather a fixed sum equivalent to this rate was agreed upon. The facts show that the parties agreed to the payment of a specific sum of money of P40,000 per month for six months, not to a 4% rate of interest payable within a 6 month period. Therefore, as agreed by the parties, the loan of P1,000,000 shall earn P40,000 per month for a period of six 6 months, for a totd principal and interest amount of P1,240,000. Thereafter, interest at the rate of 12% (Note: the legal rate of interest is now 6%, BSP Circulat No. 799, s. of 2013) per annum shall apply. The amounts already paid 16Chapter 1 - General Provisions by P and X Corp. during the pendency of the suit, amounting to P1,228,772, should be deducted from the total amount due.*” Art. 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1, Title XVII, of this Book. (n) : Chapter 1, Title XVII, of the Civil Code explains Quasi-Contracts and its three kinds namely: 1. Negotiorum Gestio; 2. Solutio Indebiti; and 3. Other Quasi-Contracts. The rules on QUASI-CONTRACTS are the following: 1. Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be 8 2. The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may come within the purview of the preceding article. The rules on NEGOTIORUM GESTIO are the following: 1. Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. This juridical relation does not arise in either of these instances: (1) When the property or business is not neglected or abandoned; (2) ifn fact the manager has been tacitly authorized by the owner. In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404 regarding unauthorized contracts shall govern. In the second case, the rules on agency in Title X of the Civil Code of the Philippines shall be applicable.50 © see PRISMA Construction & Development Corporation and Rogelio S. Pantaleon vs. Arthur F. Menchavez, G.R. No. 160545, March 9, 2010. “7 art. 2142, NCC. Art. 2143, NCC. Start. 2144, NCC. 17Chapter 1 - General Provisions ious manager shall perform his duties with all the Oe ee eerie wid pay the damages which chrough ar or nepigence may be sufeed bythe owner ofthe property or bys under management. The courts may, however, increase or moderate the indemnity accor ting to the circumstances of each case.5t 3. If the officious manager delegates to another person all or some ofp. duties, he shall be liable for the acts of the delegate, without prejudice 1, the direct obligation of the latter toward the owner of the business, The responsibility of two or more officious managers shalll be solidary unless the management was assumed to save the thing or business from imminent danger.52 4. The officious manager shall be liable for any fortuitous event: (1) If he undertakes risky operations which the owner was not accustomed to embark upon; (2) If he has preferred his own interest to that of the owner; (3) If he fails to return the property or business after demand by the owner; (4) If he assumed the management in bad faith. 5. Except when the management was assumed to save property ot business from imminent danger, the officious manager shall be liable for (fortuitous events: (4) If he is manifestly unfit to carry on the management; (2)If by his intervention he prevented a more competent person from taking up the management.5+ 6. The ratification of the management produces the effects of an express agen have been successful.55 by the owner of the business Icy, even if the business may not 7. Although the officious management may not have been express ratified, the owner of the property or business who enjoys the advantages of the same shall be liable for obligations incurred in his st Art. 2145, NCC. sv Art 2146, NCC. Art 2147, NCC. 4 Art 2148, NCC. 5 Art. 2149, NCC. 18Chapter 1 - General Provisions interest, and shall reimburse the officious manager for the necessary and useful expenses and for the damages which the latter may have suffered in the performance of his duties. The same obligation shall be incumbent upon him when the management had for its purpose the prevention of an imminent and manifest loss, although no benefit may have been derived.** 8. Even though the owner did not derive any benefit and there has been no imminent and manifest danger to the property or business, the owner is liable as under the first paragraph of the preceding article, provided: (1) The officious manager has acted in good faith, and (2) The property or business is intact, ready to be returned to the owner.57 9. The officious manager is personally liable for contracts which he has entered into with third persons, even though he acted in the name of the owner, and there shall be no right of action between the owner and third persons. These provisions shall not apply: (1) If the owner has expressly or tacitly ratified the management, or (2) When the contract refers to things pertaining to the owner of the business.58 10. The management is extinguished: (1) When the owner repudiates it or puts an end thereto; (2) When the officious manager withdraws from the management, ‘subject to the provisions of Article 2144 (se are 2144 ofthe Gil Code of the Philippines); (3) By the death, civil interdiction, insanity or insolvency of the owner or the officious manager.®? The rules on SOLUTIO INDEBITI are the following: 1. Ifsomething is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.® 56 Art. 2150, NCC. Art. 2151, NCC. 8 art. 2152, NCC. 5 Art 2153, NCC. are. 2154, NCC. 19oN Chapter 1 - General Provisions 2. Payment by reason of a mistake in the construction or applicatigy, doubtful or difficult question of law may come within the scope oe preceding article.s le 3. Ifthe payer was in doubt whether the debt was due, he may recgy,,_ he proves that it was not due. ¥ 4. The responsibility of two or more payees, when there has been Paymeny of what is not due, is solidary. 5. When the property delivered or money paid belongs to a third pers, the payee shall comply with the provisions of article 1984 (se araie gy, the Civil Code of the Philippines).54 6. Whoever in bad faith accepts an undue payment, shall pay legy interest if a sum of money is involved, or shall be liable for fruiys received or which should have been received if the thing produces frujg, He shall furthermore be answerable for any loss or impairment of the thing from any cause, and for damages to the person who delivered the thing, until it is recovered. 7. He who in good faith accepts an undue payment of a thing certain and determinate shall only be responsible for the impairment or loss of te same or its accessories and accessions insofar as he has thereby been benefited. If he has alienated it, he shall return the price or assign the action to collect the sum.s6 8. As regards the reimbursement for improvements and expenses incurred by him who unduly received the thing, the provisions of Title V of Book of the Civil Code of the Philippines shall govern,6” 9. He shall be exempt from the obligation to restore who, believing in good faith that the payment was being made of a legitimate and subsisting claim, destroyed the document, or allowed the action to prescribe, 0 gave up the pledges, or cancelled the guaranties for his right. He who © Art. 2155, NCC. ‘Art 2156, NCC. @ Art.2157, NCC. # Art 2158, NCC. = Art. 2159, NCC. 6 Art. 2160, NCC. © Art. 2161, NCC. 20Chapter 1 - General Provisions paid unduly may proceed only against the true debtor or the guarantors with regard to whom the action is still effective.©° 10. It is presumed that there was a mistake in the payment if something which had never been due or had already been paid was delivered; but he from whom the return is claimed may prove that the delivery was made out of liberality or for any other just cause. The rules on OTHER QUASI-CONTRACTS are the following: 1. When, without the knowledge of the person obliged to give support, it is given by a stranger, the latter shall have a right to claim the same from the former, unless it appears that he gave it out of piety and without intention of being repaid.7° 2. When funeral expenses are borne by a third person, without the knowledge of those relatives who were obliged to give support to the deceased, said relatives shall reimburse the third person, should the latter claim reimbursement.” 3. When the person obliged to support an orphan, or an insane or other indigent person unjustly refuses to give support to the latter, any third person may furnish support to the needy individual, with right of reimbursement from the person obliged to give support. The provisions of this article apply when the father or mother of a child under eighteen years of age unjustly refuses to support him.’ 4, When through an accident or other cause, a person is injured or becomes seriously ill, and he is treated or helped while he is not in a condition to give consent to a contract, he shall be liable to pay for the services of the physician or other person aiding him, unless the service has been rendered out of pure generosity.” 5. When during a fire, flood, storm, or other calamity, property is saved from destruction by another person without the knowledge of the owner, the latter is bound to pay the former just compensation.”* art 2162, NCC. © Art. 2163, NCC. Tart. 2164, NCC. % art 2165, NCC. mart 2166,NCC. 7 art 2167,NCC. mart. 2168, NCC. 21oN Chapter 1 - General Provisions 6. When the government, upon the failure of any person to comply ,. health or safety regulations concerning property, undertake lt the necessary work, even over his objection, he shall be liable to pq. % expenses.75 oe 7. When by accident or other fortuitous event, movables sep, pertaining to two or more persons are commingled or cony rules on co-ownership shall be applicable.” arate ‘Sed, 2 8 The rights and obligations of the finder of lost personal propery shall be governed by Articles 719 and 720 (see antes 719 and 720 of ci cng the Philippines).77 : 9. The right of every possessor in good faith to reimbursement jy, necessary and useful expenses is governed by Article $46 (see aricle stu, Civil Code of the Philippines).78 10. When a third person, without the knowledge of the debtor, pays the debt, the rights of the former are governed by Articles 1236 and 1237 (see Articles 1236 and 1237 of the Civil Code of the Philippines).79 11. When in a small community, a nationality 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.80 12. Any person who is constrained to pay the taxes of another shall be entitled to reimbursement from the latter. WHAT IS “DILIGENCE OF A GOOD FATHER OF A FAMILY"? The concept of diligence of a good father of a family connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation.82 Art. 1161. Civil obligations arising from criminal offenses shall b¢ governed by the penal laws, subject to the provisions of Article 2177 75 Art. 2169, NCC. 76 Art. 2170, NCC. 7 art. 2171, NCC. me Art. 2172, NCC. ‘Art. 2173, NCC. ev Art. 2174, NCC. art. 2175, NCC. & GN. Florida Transport, Inc. vs. Heirs of Romeo L. Battung, Sr, G.R. No. 208802, October 14,2015. 22Chapter 1 - General Provisions and of the pertinent provisions of Chapter 2, Preliminary Title, on mosey and of Title XVIII of this Book, regulating damages. a] Pertinent to the above article are the following rules (Articles 104 to 112 of the Revised Penal Code or Criminal law): 1, Civil liability of a person guilty of felony. — Every person criminally liable for a felony is also civilly liable. 2X 2, Subsidiary civil liability of innkeepers, tavernkeepers and proprietors of establishments. — In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or corporations shall be civilly liable for crimes committed in their establishments, in all cases where a violation of municipal ordinances or some general or special police regulation shall have been committed by them or their employees. Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their houses from guests lodging therein, or for the payment of the value thereof, provided that such guests shall have notified in advance the innkeeper himself, or the person representing him, of the deposit of such goods within the inn; and shall furthermore have followed the directions which such innkeeper or his representative may have given them with respect to the care and vigilance over such goods. No liability shall attach in case of robbery with violence against or intimidation of persons unless committed by the innkeeper’s employees. 3, Subsidiary civil liability of other persons. — The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties.85 4, What is included in civil liability? The civil liability includes: 1. Restitution; 2. Reparation of the damage caused; ed a ' Art. 100, Revised Penal Code (RPC) art 102 RPC. Art. 103 RPC. 23Chapter 1 - General Provisions 3. Indemnification for consequential damages. 5. Restitution; How made. — The restitution of the thing itself muse made whenever possible, with allowance for any deterioration, © diminution of value as determined by the court. The thing itself shall be restored, even though it be found in y, possession ofa third person who has acquired it by lawful means, say, to the latter his action against the proper person, who may be liabie him. | This provision is not applicable in cases in which the thing has bee, acquired by the third person in the manner and under the requirement, which, by law, bar an action for its recovery.®” 6. Reparation; How made. — The court shall determine the amount of | damage, taking into consideration the price of the thing, whenever | possible, and its special sentimental value to the injured party, and reparation shall be made accordingly. 7. Indemnification; What is included, — Indemnification for consequential damages shall include not only those caused the injured party, but also those suffered by his family or by a third person by reason of the crime.®? 8. Obligation to make restoration, reparation for damages, or indemnification for consequential damages and actions to demand the same; Upon whom it devolves. — The obligation to make restoration or reparation for damages and indemnification for consequential damages devolves upon the heirs of the person liable. The action to demand restoration, reparation, and indemnification likewise descends to the heirs of the person injured.% 9. Share of each person civilly liable. — If there are two or more persons civilly liable for a felony, the courts shall determine the amount for which each must respond. 9% Art 104 RPC. 87 Art. 105 RPC. 8 Art. 106 RPC. Art 107 RPC. 50 Art. 108 RPC. Art. 109 RPC. 24Chapter 1 - General Provisions 10. Several and subsidiary liability of principals, accomplices and accessories of a felony; Preference in payment. — Notwithstanding the provisions of the next preceding article, the principals, accomplices, and accessories, each within their respective class, shall be liable severally (in solidum) among themselves for their quotas, and subsidiaries for those of the other persons liable. The subsidiary liability shall be enforced, first against the property of the principals; next, against that of the accomplices, and, lastly, against that of the accessories. Whenever the liability in solidum or the subsidiary liability has been enforced, the person by whom payment has been made shall have a right of action against the others for the amount of their respective shares. 11. Obligation to make restitution in certain cases. — Any person who has participated gratuitously in the proceeds of a felony shall be bound to make restitution in an amount equivalent to the extent of such participation.93 12. Extinction of civil liability. — Civil liability established in Articles 100, 101, 102, and 103 of this Code shall be extinguished in the same manner as obligations, in accordance with the provisions of the Civil Law.# 13. Obligation to satisfy civil liability. — Except in case of extinction of his civil liability as provided in the next preceding article the offender shall continue to be obliged to satisfy the civil liability resulting from the crime committed by him, notwithstanding the fact that he has served his sentence consisting of deprivation of liberty or other rights, or has not been required to serve the same by reason of amnesty, pardon, commutation of sentence or any other reason.% Problem: Y, is the 7-year old son of spouses H and W, who was hit by a van owned by Z Corp. and driven at that time by their employee, X. Y died as a result of the accident. Are 110 RPC. Art 111 RPC. rare 112 RPC. Art. 113 RPC. 25oo" Chapter 1 - General Provisions imi Resulting t A criminal case of Reckless Imprudence 8 0 Hom, was filed against X. Unfortunately, before the trial could be conciygt® committed suicide. On account thereof, the court dismissed the crim a case. Thereafter, H and W filed a complaint for damages againg, Corp. and V, its Vice-President, as employers of the deceased dri basically alleging that as such employers, they failed to exercise dug diligence in the selection and supervision of their employees. V and Z Corp. filed a Motion to Dismiss, principally arguing thy the complaint is basically a “claim for subsidiary liability against employer” under the provision of Article 103 of the Revised Pena} Code, They contend that there must first be a judgment of conviction agai their driver as a condition sine qua non to hold them liable. Ergo, Since the driver died during the pendency of the criminal action, the sine qua non condition for their subsidiary liability was not fulfilled. Is the complaint for damages against V and Z Corp. founded on criminal law or derived from quasi-delict? Answer: The complaint did not explicitly state that spouses were suing and Z Corp. for damages based on quasi-delict. iti Corollarily, an act or omission causing damage to another may give rise to two separate civil liabilities on the part of the offender, ie., 1) civil liability ex delicto; and 2) independent civil liabilities, such as those (a) not arising from an act or omission complained of as felony (eg, culpa contractual or obligations arising from law; the intentional torts and culpa aquiliana); or (b) where the injured party is granted a right to file an action independent and distinct from the criminal action, Either of these two possible liabilities may be enforced against the offender. Stated otherwise, victims of negligence or their heirs have @ choice between an action to enforce the civil liability arising from culP# criminal under Article 100 of the Revised Penal Code, and an action fot quasi-delict (culpa aquiliana) under Articles 2176 to 2194 of the Civ Code. If as here, the action chosen is for quasi-delict, the plaintiff ma! hold the employer liable for the negligent act of its employee, subject the employer's defense of exercise of the dili d father o the family. On the other hand, if Sa the action chosen is for culpa criminal 26Chapter 1 - General Provisions the plaintiff can hold the employer subsidiarily liable only upon proof of prior conviction of its employee. ‘rola of Ail a Eat ZZ r = ision of CI 2, regulating damages, Plainly, Article 2177 provides for the alternative remedies the plaintiff may choose from in case the obligation has the possibility of arising indirectly from the delict/crime or directly from quasi-delict/tort.%6 Problem: X, then 17 years old and a student, died due to a gunshot wound in the head which he sustained while he was at the Firearms and Ammunitions Store owned and operated by Z. The bullet which killed X was fired from a gun brought in by a customer of the gun store for repair. It appears that B and C, sales agent of Z, later brought out the gun from the drawer and placed it on top of the table. Attracted by the sight of the gun, X got hold of the same. B asked X to return the gun. The latter followed and handed the gun to B. It went off, the bullet hitting X in the head. A criminal case for homicide was filed against B. B, however, was acquitted of the charge against him. Subsequently, X’s parents, H and W filed a civil case for damages against Z. Is Z liable for damages despite the acquittal of his sales agent in the criminal case? Answer: This case for damages arose out of the accidental shooting of H and W’s son. In this case, instead of enforcing their claim for damages in the homicide case filed against B, H and W opted to file an independent civil action for damages against Z whom they alleged was B’s employer. see L.G. Foods Corporation and Victorino Gabor vs. Hon. Philadelfa B. Pagapong-Agraviador and Sps. Florentino and Theresa Vallejera, G.R. No, 158995, September 26, 2006. 27Chapter 1 - General Provisions ‘Asa gun store owner, Z is presumed to be knowledgeable a firearms safety and should have known never to keep a loadeg re ut inhis store to avoid unreasonable risk of harm or injury to othe” the duty to ensure that all the guns in his store are not loaded, pg should be stored unloaded and separate from ammunition wh, firearms are not needed for ready-access defensive go "the more reason, guns accepted by the store for repair should not be loagt precisely because they are defective and may cause an ag discharge such as what happened in this case. Z was clearly Negligas when he accepted the gun for repair and placed it inside the ¢y, ie without ensuring first that it was not loaded. In the first place, fe defective gun should have been stored in a vault. Before accepting 4 defective gun for repair, Z should have made sure that it was not loagg to prevent any untoward accident. Indeed, Z should never accept: firearm from another person, until the cylinder or action is open ang has personally checked that the weapon is completely unloaded, For failing to insure that the gun was not loaded, Z himself was negligent load cident Art. 1162. Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2, Title XVII of this Book, and by special lays (1093a) The rules on QUASI-DELICTS are the following: 1. 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 °° 2. Responsibility for fault or negligence under the preceding articles entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recovel damages twice for the same act or omission of the defendant. 3. The provisions of Articles 1172 to 1174 are also applicable to a qs elict sce aries 1172t0 1174 of the i ode the Pppnes 100 4, When the plaintiff's own n i mate ey egligence was the immediate and proxi cause of his injury, he cannot recover damages. But if his negligen? 9% see Alfredo P. Pacis and Cleopatra D, Pacis vs Je 010. nce patra D. Pacis vs. Jerome Jovanne Morales, G.R. No. 169467, February 25:2 28Chapter 1 - General Provisions only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.1* 5, The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are 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 live in their company. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. Employers shall be liable for the 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 what is provided in Article 2176 shall be applicable. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. The responsibility treated of in this article shall cease when the persons d all the diligence of a good herein mentioned prove that they observe father of a family to prevent damage. id by his dependents or employees may 6. Whoever pays for the damage cause aid or delivered in satisfaction of the recover from the latter what he has p' claim.293 11 Art,2179, NCC. 12 Art. 2180, NCC. 29Chapter 1 - General Provisions ir -ausing damage has no parents or gy , If the minor or insane person C no par . te minor or insane person shall be answerable with his own pro, an action against him where a Ardy b ‘guardian ad litem shall be appointeg ie" in ay make use of the 8 The possessor of an animal or whoever ™ é ae responsible “for the damage which it may cause, although it may escape aeons de Tesponsiblity shall cease only in case the damage shoyy come from force majeure or from the fault of the person who has suffere, damage. 9, In motor vehicle mishaps, the owner is solidarily liable with his drive, if the former, who was in the vehicle, could have, by the use of the dye diligence, prevented the misfortune. It is disputably presumed that q driver was negligent, if he had been found guilty of reckless driving gp violating traffic regulations at least twice within the next preceding ty months. If the owner was not in the motor vehicle, the provisions of Article 2169 are applicable.1% 10. 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.1°7 11. Every owner of a motor vehicle shall file with the proper government office a bond executed by a government-controlled corporation or office, to answer for damages to third persons. The amount of the bond and other terms shall be fixed by the competent public official.198 12. Manufacturers and processors of foodstuffs, drinks, toilet articles and similar goods shall be liable for death or injuries caused by ar noxious or harmful substances used, although no contractual relation exists between them and the consumers.199 13, There is prima facie presumption of negligence on the part of the defendant if the death or injury results from his possession of danger weapons or substances, such as firearms and poison, except when the 103 Art, 2181, NCC. 106 Art 2182, NCC. 196 Art 2183, NCC. 106 Art. 2184, NCC. 107 Art, 2185, NCC. 108 Art, 2186, NCC. 109 Art,2187, NCC. 30Chapter 1 - General Provisions possession or use thereof is indispensable in his occupation or business.110 14, Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision."" 15. The proprietor of a building or structure is responsible for the damages resulting from its total or partial collapse, if it should be due to the lack of necessary repairs.112 16, Proprietors shall also be responsible for damages caused: (1) By the explosion of machinery which has not been taken care of with due diligence, and the inflammation of explosive substances which have not been kept in a safe and adequate place; (2) By excessive smoke, which may be harmful to persons or property; (3) By the falling of trees situated at or near highways or lanes, if not caused by force majeure; (4) By emanations from tubes, canals, sewers or deposits of infectious matter, constructed without precautions suitable to the place.113 17. If damage referred to in the two preceding articles should be the result of any defect in the construction mentioned in Article 1723, the third person suffering damages may proceed only against the engineer or architect or contractor in accordance with said article, within the period therein fixed (see article 1723 ofthe Cv Code of the Philippines).214 18. 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,115 19. The responsibility of two or more persons who are liable for quasi-delict is solidary.116 REQUISITES OF QUASI-DELICT 1.Damage suffered by plaintiff; 2.Fault or negligence of defendant; and 110 Art. 2188, NCC. m1 Art. 2189, NCC. 2 Art. 2190, NCC. 3 Art. 2191, NCC. 6 Art. 2192, NCC. 115 Art. 2193, NCC. 16 Art.2194, NCC. 31Chapter 1 - General Provisions between the fault or negligen, 3.Connection of cause and effect en cee defendant and the damage incurred by plaintiff. @ Negligence e for the protection of the interest. It is the failure to observ’ another person that degree of care, circumstances justly demand, whereby suc] Negligence, as it is commonly understood, is conduct that creates 3, undue risk of harm to others. It is the failure to observe that degree of car, precaution and vigilance that the circumstances justly demand. Itis the Smission to do something which a reasonable man, guided py considerations that ordinarily regulate the conduct of human affairs, wou)y do, or doing something that a prudent and reasonable man would not do, precaution, and vigilance which ¢p, fh other person suffers injury, What is the test of negligence? Did the defendant in doing reasonable care and caution which an ordinary person wou same situation? If not, then he is guilty of negligence. the alleged negligent act use that Id have used in the ‘The test of negligence is objective. We measure the act or omission of the tortfeasor with that of an ordinary reasonable person in the same situation. PROXIMATE CAUSE It is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. More comprehensively, proximate cause is that cause acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the moment of his eto staal that an injury to some person might probably rest! There is no exact mathematical formula to determine proximat® cause. It is based upon mixed considerati ‘| e : and precedent. ations of logic, common sense, poli 32Chapter 1 - General Provisions Problem: O, was driving a van owned by P, Inc. along the National Highway. A bus was cruising on the opposite lane towards the van. In between the two vehicles was a parked truck with a trailer, owned by L, Inc. The night before, the truck with trailer suffered a tire blowout. The driver, K, parked the truck askew occupying a substantial portion of the national highway, on the lane of the bus. He parked the truck with trailer at the shoulder of the road with the left wheels still on the cemented highway and the right wheels on the sand and gravel shoulder of the highway. The truck was not equipped with triangular, collapsible reflectorized plates, the early warning device. As substitute, K placed a banana trunk with leaves on the front and the rear portion of the truck to warn incoming motorists. ; To avoid hitting the parked truck occupying its lane, the incoming bus swerved to the right, onto the lane of the approaching van. O saw two bright and glaring headlights and the approaching bus. He pumped his break slowly, swerved to the left to avoid the approaching bus but the van hit the front of the stationary truck with a trailer. The bus hit the rear of the truck with a trailer. O only suffered minor injuries. The van, however, became inoperable as a result of the incident. P, Inc. filed a complaint for damages against L, Inc. and K, the driver. 1. Was K negligent in parking the vehicle? and 2. Was K’s negligence the proximate cause of the damage to the van? Answer: delict, To sustain a claim based on quasi-delict, the following requisites must concur: (a) damage suffered by plaintiff; (b) fault or negligence of defendant; and (c) connection of cause and effect between the fault or negligence of defendant and the damage incurred by plaintiff. Negligence is defined as the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. The Supreme Court stated the test of negligence in the Igndmark case Picart v. Smith as follows: 33Chapter 1 - General Provisions o determine the existence of negligence , Mas follows: Did the defendant in doing ™* asonable care and caution which an o, ny the ‘came situation? If not, then he is gyi” ffect adopts the standard supposed 5! duct of the discreet paterfamilias of i i in a given case is not determp Roman law. The existence of negligence in a Biv © not determin’ by reference to the personal judgment of the actor in the situation before him, The law considers what would be reckless, blameworthy, OF negligen, in the man of ordinary intelligence and prudence and determines liabtiy by that. The test by which t particular case may be state t use that ret alleged negligent ac person would have used in the negligence. The law here in ¢! supplied by the imaginary con bjective. We measure the act o The test of negligence is ol : f an ordinary reasonable person in omission of the tortfeasor with that o the same situation. We find that K was utterly negligent in parking the truck askew on the right side of the national highway. It is common sense that the skewed parking of the truck on the national road posed a serious risk to oncoming motorists. K also admitted that it was his first time to drive the truck with trailer loaded with a D-8 caterpillar bulldozer. We find that L, Inc. was utterly negligent in allowing a novice driver, like K, to operate a vehicle, such as a truck loaded with a bulldozer, which required highly specialized driving skills. L, Inc. clearly failed to properly supervise K in driving the truck. Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. More comprehensively, proximate cause is that cause acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain 0! events, each having a close causal connection with its immedialé predecessor, the final event in the chain immediately effecting the inju'Y as natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, an ee prudent be intelligent person, have reasonable ground !° expect at the moment of his act or inj might probably result therefrom. se a ae in oe Pa There is no exact mathematical formula to determine proximate cause. It is based upon mixed considerations of logic, common se" policy and precedent. BIC, 34Chapter 1 - General Provisions L, Inc, and K are liable for all damages that resulted from the skewed parking of the truck. The skewed parking is the proximate cause of the damage to the van,117 Prescription of the action ex quasi delicto not a bar to an action ex delicto Ifat the time of the filing of the complaint for damages, the cause of action ex quasi delicto had already prescribed. The aggrieved party can still pursue the remaining avenue opened for them by their reservation, ie, the surviving cause of action ex delicto, This is so because the prescription of the action ex quasi delicto does not operate as a bar to an action to enforce the civil liability arising from crime especially as the latter action had been expressly reserved. The Supreme Court held that the dismissal of the action based on culpa aquiliana is not a bar to the enforcement of the subsidiary liability of the employer. Once there is a conviction for a felony, final in character, the employer becomes subsidiarily liable if the commission of the crime was in the discharge of the duties of the employees. This is so because Article 103 of the Revised Penal Code operates with controlling force to obviate the possibility of the aggrieved party being deprived of indemnity even after the rendition of a final judgment convicting the employee.1® $8%see Dy Teban Trading, Inc. vs. Jose Ching and/or Liberty Forest, Inc. and Cresilito M. Limbaga, GR. No, 161803, Rebrvary 4, 2008, “agp: Antonio © Santos tal vs Hon, Normand, Pzardo, GR. No. 151452, July 28,2005 35Chapter 1 - General Provision True or False 1. 2 9. 10. Multipl 1 ‘ re that degree of care, Diligence is the altel be : Oe «stances justly demand” precaution and ve e led jr immunity guaranteed ungg, 4 dition, statute or decisional law, or ea = a result Of ong usage, constitutive of a legally enforceable claim Person again other. ponte arising from contracts have the oe nae between the contracting parties and should be complied with in good faith. fe defendant is the party who brings a civil suit in a court of law. He is the person who files the complaint in court. ‘A civil action is one by which a party sues another for the enforcemen, or protection of a right, or the prevention or redress ofa wrong. ‘There is negotiorum gestio when the property or business is not neglected or abandoned. ‘An obligation "to give" is a prestation wl movable or an immovable thing. ; There is negotiorum gestio when the manager has been tacitly authorized by the owner. An obligation "to do" includes all kinds of work or service. For every right enjoyed by any person, there is a corresponding obligation on the part of another person to respect such right. hich consists in the delivery of le Choice Questions It is a claim or title to an interest in anything whatsoever that is enforceable by law. a. Receivable c. Right b. Obligation d. Property It is a juridical relation whereby a person may demand from another the observance of a determinative conduct, and in case of breach, ma demand satisfaction from the assets of the latter. a Right c. Contract b. Action d. Obligation It : a by which a party sues another for the enforcement o protection of a right, or the prevention or redress of a wrong. a. Civil action i plea : ©. Administrative action ._ Special Proceeding 4. Criminal action It is the act or omission by whi ich a party viol i fas 7 lolates a right of another. b. Motive a action fillies action 4. Source of action The three essential ele ments * except: of a cause of action are the followit® 36