1. Distinguish Civil Obligations from Natural Obligations.

- Natural obligations are based not in positive law but in equity and natural law while
civil obligations arise from law, contracts, quasi-contracts, delicts and quasi-delicts.
- Natural obligations cannot be enforced in court because the oblige has no right of
action to compel performance while civil obligations can be enforced in court because
the oblige has a right of action to compel performance.
- Natural obligation is an obligation that has no legal basis and hence does not give
right of action to enforce its performance. It is based on equity, morality and natural
law, and should be voluntary.
o An obligation can be considered as natural obligation if:
 It is based on moral or social grounds and cannot be enforced by positive
(human-made) laws.
 It is voluntary, with the debtor having the knowledge that the obligation
cannot be enforced by the law.
 Its performance cannot be prevented or invalidated by the court.
 It can be recognized by court after its fulfillment; hence, the creditor has
the right to retain what has been done or delivered by the debtor who
has no right to recover it.

2. Enumerate the different sources of obligations.

a. Law – when they are imposed by law itself
Example: obligation to pay taxes, obligation to support one’s family
b. Contracts – when they arise from the stipulation of the parties
Example: the obligation to repay a loan or indebtedness by virtue of an agreement
c. Quasi-contracts – when they arise from lawful, voluntary and unilateral acts which
are enforceable to the end that no one shall be unjustly enriched or benefited at the
expense of another
Example: the obligation to return money paid by mistake or which is not due.
d. Crimes of acts or omissions punished by law – when they arise from civil liability
which is the consequence of criminal offense.
Example: The obligation of a thief to return the car stolen by him; the duty of a
killer to indemnify the heirs of his victim
e. Quasi-Delicts or torts – when they arise from damage caused to another through an
act or omission, there being fault or negligence, but no contractual relation exists
between the parties
Example: the obligation of the head of a family that lives in a building or a part to
answer for damages caused by things thrown or falling from the same; the
obligation of the possessor of an animal to pay for the damage which it may have
caused.

3. What is Quasi-Contract? What is the concept of Negotiorum Gestio and Solutio Indebiti?
- The term quasi-contract refers to an agreement that exist between two parties who have
not previously had obligations to each other. This agreement is created by the court
system, specifically imposed by a judge, in order to correct a situation in which one
party owes something to the party because they are in possession of that person’s
property.
- People who are involved in a quasi-contract do not create the agreement themselves.
Since it is imposed by the court, the individuals do not need to agree to the contract for
it to be legally enforceable. Quasi-contracts enforce fairness when one party benefits
unjustly through a loss to another.
- Quasi-contracts are also called implied contracts. When they are imposed, the
defendant must pay an amount of restitution to the wronged party, or the plaintiff. This
 payment is known as quantum meruit and is based on the amount of the money or value
of the item that the defendant acquired.

Requirements of Quasi-Contract
 The plaintiff must have provided a service or given an item with value to the
defendant, with the implied promise that they would receive payment in
exchange
 The defendant must have agreed to this promise and received the item or
service, but failed to pay.
 The plaintiff must explain to the court why it is unfair that the defendant
received he service or item of value without paying the plaintiff. Therefore,
unjust enrichment on the defendant’s part took place.

- Negotiorum Gestio arises whenever a person voluntarily takes charge of the agency
or management of the business or property of another without any power or authority
from the latter. Negotiorum Gestio exist when one:
o Voluntary takes charge of the agency or management of the business or
property of another.
o Without any power from the latter

- Solutio Indebiti arise when a person unduly delivers a thing through mistake to another
who has no right to demand it. Solutio Indebiti exist when:
o Something is received
o When there is no right to demand it
o It was unduly delivered through mistake

4. Bakla paid Shokla his debt in the amount of P10,000.00. Shokla arrived home and counted
the money, he noticed that there are 11 pieces of P1,000.00 bills. Is Shokla obliged to return
the extra amount he received from Bakla? Would the principle of Negotiorum Gestio apply
in this case? Explain.
- The principle of Negotiorum Gestio would not apply in this case because as what
negotorium gestio that one should act on behalf of and for the benefit of a principal,
but without the latter’s prior consent. Bakla debt an amount to Shokla and when Bakla
paid his debt, Shokla received the money and no one act on behalf of Shokla. Instead
of Negotorium Gestio, the priniciple of solutio indebiti applies to this situation where
Shokla received something that is not due him. He has the obligation to return the
P1,000.00; otherwise, he will unjustly enrich himself.

5. What is Quasi-Delict?
- A Quasi-Delict is an act or omission by a person which causes damage to another giving
rise to an obligation to pay for the damage done, there being fault or negligence but
there is no pre-existing contractual relation between the parties.

Requisites of Quasi-Delict
Before a person can be held liable for quasi-delict, the following requisites must be present:
 There must be an act or omission.
 There must be fault or negligence.
 There must be damage caused.
 There must be a direct relation of cause and effect between the act or omission
and the damage.
 There is no pre-existing contractual relation between the parties.
 Crime Distinguished from Quasi-Delict.
 In crime, there is criminal or malicious intent or criminal negligence, while in
quasi-delict, there is only negligence.
 In crime, the purpose is punishment, while in quasi-delict, indemnification of
the offended party.
 Crime affects public interest, while quasi-delict concerns private interest.
 In crime, there are generally two liabilities: criminal and civil, while in quasi-
delict, there is only civil liability.
 Criminal liability cannot be compromised or settled by the parties themselves,
while the liability for quasi-delict can be compromised as any other civil
liability.
 In crime, the guilt of the accused must be proved beyond reasonable doubt,
while in quasi-delict the fault or negligence of the defendant need only be
proved by preponderance (i.e. superior or greater weight) of evidence

6. Distinguish a determinate thing from a generic thing. What are the obligations of an
individual obliged to deliver a determinate thing?
Specific or Determinate Thing
- A thing is also determinate if at the time the contract entered into. The thing is capable
of being made determinate without the necessity of a new or further agreement between
the parties
- Examples:
o The watch I am wearing
o This bottle of wine I am carrying
o The dog of Johnny Depp named Pistol
o The car with plate number ABC 123
o The house at the corner of Shaw Blvd. and Jaime Cardinal Sin St. in
Mandaluyong City
Generic or Indeterminate Thing
- A thing is generic or indeterminate when it refers only to a class or genus to which it
pertains and cannot be pointed out with particularity.
- Examples:
o A watch
o A bottle of wine
o A dog
o A car
o A house

Difference between Specific or Determinate and Generic Thing

- A specific or determinate thing is identified by its individuality. The debtor cannot
substitute although the latter is of the same kind and quality.
- A generic thing is identified only by its class or specie. The debtor can give anything
of the same class as long as it is of the same kind.

Obligations of the Debtor to Give a Determinate Thing

 To preserve or take care of the thing with the proper diligence of a good father of a family.
It means the ordinary diligence that a prudent man would exercise in taking care of his own
property taking into consideration the nature of the obligation, of the time and of the place,
like a person who is obliged to deliver a determinate horse to another should, pending its
delivery, preserve it by taking care of the same as if the horse is his own.
 Accessions and Accessories
 o Accession is the right pertaining to the owner of a thing over its products and
whatever thereto either naturally or artificially
o Accretion which refers to the gradual and addition of sediment to the shore by the
action of water
o Accessories are those things which are joined attached to the principal objects as
ornament or to render it perfect
 Example: radio attached to a car; or key to a car.
 To be liable for damages in case of breach of obligation

7. Define (1) natural fruit, (2) industrial fruit and (3) civil fruit.
- Natural Fruit
o Spontaneous products of the soil, and the young and other products of animals
o Examples: grass, trees and plants on lands produced without the intervention of
human labor the young and products of animals
- Industrial Fruit
o Those produced by lands of any kind through cultivation or labor
o Examples: sugar cane, vegetable, rice, and all products of lands bought about
through human labor
- Civil Fruit
o Those derived by virtue of a juridical relation
o Examples: the rents of building, the price of leases of lands and other property
and the amount of perpetual or life annuities or other similar income.

8. What is the effect of loss due to fortuitous event of a determinate thing?

- The loss of the thing due is a mode of extinguishment of obligation wherein the
determinate thing is lost or destroyed without the fault of the debtor, and before he has
incurred in delay. It is understood that the thing is lost when perishes, disappears, or
goes out of commerce in which such thing no longer exists and cannot be recovered.
- The loss of the thing due applies to both real obligation (to give) and personal obligation
(to do).
o An obligation to give may be extinguished by the loss of the thing if:
 The thing is determinate or specific
 The loss of the thing occurs without the debtor’s fault
 The debtor has not incurred delay
However, an obligation may not be extinguished if:
 The law does not allow it
 The stipulation does not allow it
 The nature of such obligation requires the assumption of risk
 The obligation to give arises from criminal offense

o In an obligation to do, the loss of the thing due is considered equivalent to the
impossibility of performance:
 Physically, when the prestation can no longer be performed due to
incapacity or death of the debtor, although it is still legally possible.
 Legally, when the prestation cannot be performed because it is rendered
impossible by provision of law, although it is still physically possible.

9. When is demand by creditor not necessary in order that delay may exist?
- Those obliged to deliver or to do something incur in delay from the time the oblige
judicially or extra judicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may
exist:
o When the obligation or the law expressly so declare;
 o When from the nature and the circumstances of the obligation it appears that
the designation of the time when the thing is to be delivered or the service is to
be rendered was a controlling motive for the establishment of the contract
o When demand would be useless, as when the obligor has rendered it beyond his
power to perform.
- In reciprocal obligations, neither party incurs in delay if the others does not comply or
is not ready to comply in a proper manner with what is incumbent upon him. From the
moment one of the parties fulfills his obligation, delay by the others begins.
- Demand is not necessary to place the obligor in default under the following
circumstances:
o When the law or obligation expressly declares;
o When from the nature of the contract, it appears that the time is of the essence
and this is the motivating factor in the establishment of the contract
o When demand would be useless
o When the debtor admits, he is in default.

10. What are damages? What are the kinds of damages? Define each.
- Damages refers to monetary compensation that is claimed by a person or awarded by a
court in a civil action to a person who has been injured or suffered loss because of the
wrongful conduct of another party.
- Types of Damages
o Moral Damage
 It includes physical sufferings, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feeling, moral shock, social
humiliation and similar injury
o Exemplary Damage
 It imposed by way of example or correction for the public good.

o Nominal Damage
 It is adjudicated in order that a right of the plaintiff, which has been
violated by the defendant, may be vindicated or recognized and not for
the purpose of indemnifying the plaintiff for any loss suffered by him.

o Temperate or Moderate Damage

 It is more than nominal but less than compensatory damages may be
recovered when the courts find that its amount cannot, from the nature
of the case, be proved with certainty. Pecuniary loss means loss of
money, or of something by which money or something of money value
be acquired.

o Actual or Compensatory Damage

 Compensatory damages are generally the most identifiable and concrete
type of damages. These include amounts for lost income, property
damages, and medical care resulting from the defendant’s misconduct.
An attorney, through documents obtained during litigation, is usually
able to seek a definitive amount of compensatory damages based on the
injuries to a plaintiff’s person and property.

o Liquidated Damage
 Those agreed upon by parties to a contract to be paid in case of breach
thereof.
11. What is a fortuitous event? What is the general rule and exceptions for liability for
fortuitous event?
- A fortuitous event is an unforeseen event or, if foreseen, inevitable. It is also called an
act of God (if due to a natural occurrence, like an earthquake) and force majeure if
caused by man, such as war. There are ordinary fortuitous events, which cannot be
foreseen and don’t usually happen (like war).
- The requisites of a fortuitous event are the following:
o The cause Is independent of the debtor/obligor’s will
o It was an unforeseen or unavoidable event
o The happening of the event made it impossible for the debtor/obligor to fulfill
his obligation in a normal manner
o The debtor didn’t take advantage of the event to aggravate the injury to the
creditor/oblige
- The general rule for liability for fortuitous event is that there is no liability in case of a
fortuitous event.
- The exceptions are the following:
o When the law itself expressly declares so
o When expressly stated in the contract
o When the obligation’s nature requires the assumption of risk
o When the obligor/debtor is in default or has promised to deliver the same thing
to 2 or more persons who don’t have the same interest
- A fortuitous effect will affect a generic obligation, because a generic object can always
be replaced by another. It will, however, affect a determinate/specific obligation
because the object of the obligation is specified-but the exceptions must be observed
- Some other exceptions are the following:
o When it is expressly stipulated that the obligor/debtor is liable even if non-
performance is due to a fortuitous event.
o The obligor/debtor is in delay
o The possessor is in bad faith and the thing is lost or deteriorates because of the
fortuitous event
o The obligor/debtor contributed to the loss of the thing
o The obligor/debtor is guilty of fraud, negligence or delay or if he violated the
tenor of the obligation.

12. D is indebted to E in the amount of P12,000.00 payable in 12 equal monthly installment

starting January 31, 2018 without any reservation, D paid the installment payment due on
August 31, 2018. Were the prior installment payments been settled/paid? Why?
- The prior installment payments were being settled/paid because D advanced his
payment. An advance payment is a type of payment that is made ahead of its normal
schedule, such paying for a good or service before you actually receive the good or
service. Advance payments are sometimes required by sellers as protection against
nonpayment, or to cover the seller’s out-of-pocket costs for supplying the service or
product.
- Advance payments can refer to one of two situations. First, advance payments can
apply to any sum of money provided prior to the contractually agreed-upon due date.
Second, advance payments can refer to any required payment that is due prior to the
receipt of the requested goods or services. Advance payment can be contrasted with a
deferred payment, where services or goods are delivered first and then paid for later-
for example, an employee who is paid at the end of each month for that month’s work.