Obligations
1A In General-Kinds of obligations as to perfection
[Follow the Outline]
Part One
Modified True or False.Consider the statement true only when it is absolutely true.
Explain ALL your answers.
Part Two
Multiple Choice. Choose the best answer.
Part Three
Give direct and concise but complete answers.
Cite authorities, if any.
1. Distinguish civil from natural obligation? Give examples of natural obligations?
Under Art. 1423, Civil obligations give a right of action to compel their performance. On the
other hand, natural obligations, not being based on positive law but on equity does not grant a
right of action to enforce their performance, but after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or rendered by reason thereof. An example of
a natural obligation are the following provisions:
Art. 1424. When a right to sue upon a civil obligation has lapsed by extinctive prescription, the
obligor who voluntarily performs the contract cannot recover what he has delivered or the value
of the service he has rendered.
Art. 1425. When without the knowledge or against the will of the debtor, a third person pays a
debt which the obligor is not legally bound to pay because the action thereon has prescribed, but
the debtor later voluntarily reimburses the third person, the obligor cannot recover what he has
paid.
Art. 1426. When a minor between eighteen and twenty-one years of age who has entered into a
contract without the consent of the parent or guardian, after the annulment of the contract
voluntarily returns the whole thing or price received, notwithstanding the fact the he has not been
benefited thereby, there is no right to demand the thing or price thus returned.
Art. 1427. When a minor between eighteen and twenty-one years of age, who has entered into a
contract without the consent of the parent or guardian, voluntarily pays a sum of money or
delivers a fungible thing in fulfillment of the obligation, there shall be no right to recover the
same from the obligee who has spent or consumed it in good faith. (1160A)
Art. 1428. When, after an action to enforce a civil obligation has failed the defendant voluntarily
performs the obligation, he cannot demand the return of what he has delivered or the payment of
the value of the service he has rendered.
Art. 1429. When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the
value of the property which he received by will or by the law of intestacy from the estate of the
deceased, the payment is valid and cannot be rescinded by the payer.
Art. 1430. When a will is declared void because it has not been executed in accordance with the
formalities required by law, but one of the intestate heirs, after the settlement of the debts of the
deceased, pays a legacy in compliance with a clause in the defective will, the payment is
effective and irrevocable.
2.
An obligation to pay a sum of money evidenced by a promissory note dated April 29, 2008 is a
natural obligation.
3.
Sara borrowed ₱50,000.00 from Julia and orally promised to pay it within six months. When
Sara tried to pay her debt on the 8 month, Julia demanded the payment of interest of 12% per
annum because of Sara’s delay in payment. Sara paid her debt and the interest claimed by Julia.
After rethinking, Sara demanded back from Julia the amount she had paid as interest. Julia
claims she has no obligation to return the interest paid by Sara because it was a natural obligation
which Sara voluntarily performed and can no longer recover. Do you agree? Explain. (4%)
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A. No, I do not agree with Julia that she has no obligation to return the interest paid by Sara
because it was a natural obligation which Sara voluntarily performed and can no longer recover.
Under Art. 1960, If the borrower pays interest when there has been no stipulation therefor, the
provisions of this Code concerning SOLUTIO INDEBITI or natural obligations, shall be applied,
as the case may be. In the present case, there has been no stipulation in writing. Under Art. 1956,
No interest shall be due unless it has been expressly stipulated in writing. Therefore, the
provisions under Solutio Indebiti should be applied. Sara can recover the amount she has paid as
interest since it was not a natural obligation.
4.
In January 2018, Mrs. A, a married woman on her sixth (6 ) month of pregnancy, was crossing a
street when she was suddenly hit by a car being recklessly driven by Mr. X. As a result, Mrs. A
sustained serious injuries and further, suffered an unintentional abortion. Mrs. A was
hospitalized for two (2) months, during which she incurred P400,000.00 in medical fees. Her
expenses were all duly substantiated by official receipts. During the two (2)-month period of her
confinement, she was unable to report for work and earn any salary, which was established at the
rate of P50,000.00 per month. Mrs. A then filed a civil case for damages against Mr. X.
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(a) Based on the case filed by Mrs. A, what is the source of Mr. X's obligation to her as a result
of his acts? Explain.
The Obligation of Mr. X arose from a quasi-delict. A quasi-delict, under Art. 1162 of the Civil
Code is a fault or act of negligence or omission of care which causes damage to another, there
being no pre-existing contractual relations between the parties. Reasonable foresight of harm,
followed by the ignoring of the admonition born of this provision, is the constitute fact of
negligence.
5.
Saachi opened a savings bank account with Shanghainese Bank. He made an initial deposit of
PhP100,000. Part of the bank opening forms that he was required to sign when he opened the
account was a Holdout Agreement which provided that should he incur any liability or obligation
to the bank, the bank shall have the right to immediately and automatically take over his savings
account deposit. After he opened his deposit account, the Shanghainese Bank discovered a scam
wherein the funds in the account of another depositor in the bank was withdrawn by an
impostor. Shanghainese Bank suspected Saachi to be the impostor, and filed a criminal case of
estafa against him. While the case was still pending with the Prosecutor’s office, the bank took
over Saachi’s savings deposit on the basis of the Holdout Agreement.
(b) In this case, did the bank have the right to take over Saachi’s bank deposit?
No. The bank has no right to take over Saachi’s Bank deposit. The "Hold Out" clause applies
only if there is a valid and existing obligation arising from any of the sources of obligation
enumerated in Article 1579 of the Civil Code, to wit: law, contracts, quasi-contracts, delict, and
quasi-delict. In this case, petitioner failed to show that respondents have an obligation to it under
any law, contract, quasi-contract, delict, or quasi-delict. And although a criminal case was filed
by the bank against Saachi, this is not enough reason for the bank to issue a "Hold Out" order as
the case is still pending and no final judgment of conviction has been rendered against
respondent Saachi.
6.
If A was convicted of Murder by the trial court but died before his appeal could be decided by
the Supreme Court, may the estate of A be held civilly liable under delict?
Yes. The estate of A may be held civilly liable under delict. Although the death of the appellant
extinguished his criminal and civil liability arising from the crime because he died during the
pendency of the appeal and before the finality of the judgment against him, it must be added
though, that his civil liability may be based on sources of obligation other than delict. For this
reason, the victims may file a separate civil action against the estate of A. (Pp. v. Pedro
Abungan)
7.
In CBK Power v. CIR, was their solutio indebiti?

No. Solutio Indebiti does not apply in this case. Solutio indebiti exists when the
payment is made when there is no exists no binding relation between the payor, who
has no duty to pay, and the person who received the payment and when payment is
made through mistake and not through liberality or some other cause. Though the
principle of Solutio Indebiti may be applicable to some instances of claims for a refund,
the elements thereof are wanting in this case. First, there exists a binding relation between
petitioner and the CIR, the former being a taxpayer obligated to pay VAT. Second, the
payment of input tax was not made through mistake, since petitioner was legally
obligated to pay for that liability. The entitlement to a refund or credit of excess input tax
is solely based on the distinctive nature of the VAT system. At the time of payment of the
input VAT, the amount paid was correct and proper.
In Andres v. Mantrust, was their solutio indebiti?

Yes. in Andres v. Mantrust, the Court ruled there is Solutio Indebiti. For this article to
apply the following requisites must concur: "(1) that he who paid was not under
obligation to do so; and, (2) that payment was made by reason of an essential mistake of
fact" Applying the requisites of Solutio Indebiti, the respondent Mantrust was not under
obligation to make the payment since its contract was with FACETS and not with Irene’s
wearing apparel. The argument of the petitioner that it has the right to demand and
therefore to retain the second remittance as a payment in lieu of a pre-existing debt of
FACETS is without merit. Second, The payment was made by reason of an essential
mistake of fact. Respondent made the second remittance on the wrong assumption that
petitioner did not receive the first remittance. The mistake in the second remittance was
borne out by the fact that both remittances have the same reference invoice number. It
was not through the negligence of the respondent’s employees.
8.
Can the employer and his driver-employee be held solidarily liable for breach of contract?
Can the employer and his driver-employee be held solidarily liable under delict?
9.
In an action for damages filed by a passenger of a common carrier, can the latter raise as a
defense that he exercised the diligence required in the selection and supervision of employees?

No. As discussed in Cangco v. MRR, It is not accurate to say that proof of diligence and
care in the selection and control of the servant relieves the master from liability for the
latter's acts — on the contrary, that proof shows that the responsibility has never existed.
As Manresa says (vol. 8, p. 68) the liability arising from extra-contractual culpa is always
based upon a voluntary act or omission which, without willful intent, but by mere
negligence or inattention, has caused damage to another. A master who exercises all
possible care in the selection of his servant, taking into consideration the qualifications
they should possess for the discharge of the duties which it is his purpose to confide to
them, and directs them with equal diligence, thereby performs his duty to third persons to
whom he is bound by no contractual ties, and he incurs no liability whatever if, by reason
of the negligence of his servants, even within the scope of their employment, such third
person suffer damage.
10.
How should an obligation be complied with?

Under Art. 1163, Every person obliged to give something is also obliged to take care of it
with the proper diligence of a good father of a family, unless the law or the stipulation of
the parties requires another standard of care.
11.
In an obligation to deliver a car, would the delivery of a brand new Toyota Wigo be a sufficient
compliance with the obligation?
12,
Are the following obligations valid, why, and if they are valid, when is the obligation
demandable in each case?
(a)
If the debtor promises to pay as soon as he has the means to pay;
(b)
If the debtor promises to pay when he likes;
(c)
If the debtor promises to pay when he becomes a lawyer;
(d)
If the debtor promises to pay if his son, who is sick with cancer, does not die within one
year.
13.
What kind of obligation as to Perfection & Extinguishment was the obligation to construct the
roads in Araneta v. Phil Sugar Estates?
14.
Pedro promised to give his grandson a car if the latter will pass the bar examinations. When his
grandson passed the said examinations, Pedro refused to give the car on the ground that the
condition was a purely potestative one. Is he correct or not?
15. Zeny and Nolan were best friends for a long time already. Zeny borrowed 310,000.00 from
Nolan, evidenced by a promissory note whereby Zeny promised to pay the loan “once his means
permit.” Two months later, they had a quarrel that broke their long-standing friendship.
Nolan seeks your advice on how to collect from Zeny despite the tenor of the promissory note.
what will your advice be? Explain your answer.
18.
16.
In Millare v. Hernando, was Article 1197 applied? Why or Why not?
In Lim v. People, was Article 1197 applied? Why or Why not?
17.
Before the arrival of a period, can a debtor be compelled to perform the obligation?
If the period was fixed solely for the benefit of the debtor, may the debtor be compelled to
perform even before the arrival of the period?