Introduction to LAW 2. Court of tax appeals Law is a rule of conduct, just, obligatory, promulgated by legitimate authority, and of common observance and benefit – Sanchez Roman Shari’ah courts Ignorance of the law excuses no one from compliance therewith (Article 3, Civil Code of the Philippines) 1. Ignoratia legis non excusat 2. Ignorantia juris non excusat 3. Ignorantia legis neminem excusat General Divisions of Law 1. State Law (imposed by the state) 2. Non-State Law a. Divine Law (imposed by religious faith) b. Natural Law (Basic understanding of right & wrong) c. Moral Law (norms of conduct observe by a community) d. Physical Law (laws of physical science) Basic Sources & Hierarchy of Laws 1. Constitution ( by the sovereign people) 2. Legislations (by the legislative branch) 3. Administrative rules and regulations (by the executive branch) 4. Judicial decisions (by the judiciary) The organization of Courts 1. 2. 3. 4. Supreme Court Court of appeals Regional trial court Municipal trial courts a. Municipal circuit trial courts b. Municipal trial courts in cities c. Metropolitan trial courts Special Courts 1. Sandiganbayan Quasi-judicial agencies The Civil Code of The Philippines Republic Act No. 386 4. 5. 6. 7. 8. Civil Code of the Philippines Was based on the Codigo Civil of Spain Enacted and signed on June 18, 1949 By the Philippine legislature Took effect on August 30, 1950 Book 1 – Persons Book 2 – Property, Ownership and its Modification Book 3 – Different Modes of Acquiring Ownership Book 4 – Obligations and Contracts (Article 1156 to Article 1430) Basic Concepts on Obligations Obligation 9. From the latin word “obligatio” which means tying or binding 10. From the latin word “obligare” which means to bind An obligation is a juridical necessity to give, to do or not to do (Article 1156) 11. Obligation is a “juridical necessity” because non-compliance with it can result in juridical or legal sanction From the point of view of sanction: 12. Civil obligation – there is a juridical or legal sanction for non compliance therewith 13. Natural obligation – the obligation not to recover what has been voluntarily fulfilled, although the fulfillment is no longer required 14. Moral obligation – the sanction here is conscience From the point of view of subject matter: 15. Real obligation – an obligation “to give” 16. Personal obligation – an obligation “to do” or “not to do” From the point of view of performance: 17. Positive obligation – an obligation “to give” or “to do” 18. Negative obligation – an obligation “not to do” (which includes “not to give”) From the point of view of the performer: 19. Unilateral obligation – only one party has an obligation 20. Bilateral obligation – both parties have obligations (maybe reciprocal or non reciprocal) As defined by Arias Ramos: 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, the former may demand satisfaction from the assets of the latter Essential Requisites/Elements of an Obligation: 1. Active subject/creditor/obligee (ACe) – has the right to demand the fulfillment of the obligation 2. Passive subject/Debtor/Obligor (PDr) – has the duty to fulfill the obligation 3. Prestation/Object/Subject Matter – the promise to give, to do, or not to do 4. Efficient Cause/ Juridical Tie/ Legal tie/ Vinculum Juris – the reason why the obligation exist Sources of Obligations Obligations arise from: (Article 1157) 1. Law – legal obligations 2. Contracts – has the force of law between the parties 3. Quasi-Contracts – Art. 2142-2175 4. Acts or omissions punished by law (delicts or crimes) – revised penal code and other penal laws 5. Quasi-Delicts (Culpa Aquiliana or Torts) – Art. 2176-2194 Kinds of Quasi-Contract: 1. Negotiorum Gestio (Art. 2144-2153) a. When a person voluntarily takes charge of another’s abandoned business or property without the owner’s authority, but done for his benefit; reimburse must be made to the gestor for necessary and useful expenses b. Unauthorized management by an officious manager 2. Solution Indebiti (Art. 2154-2163) a. When something is received when there is no right to demand it and it was unduly delivered through mistake, and the person who received the thing has the obligation to return it. b. Undue payment/ payment by mistake Guiding principle in Quasi-Contracts: “to the end that no one shall be unjustly enriched or benefitted at the expense of another.” (Art. 2142) Obligations arising from CRIME or DELICTS: 1. Every person who is criminally liable is also civilly liable (Art. 100, Revised penal code) 2. Civil liability arising from crimes includes RESITUTION, REPARATION of damages caused and INDEMNIFICATION for consequential damages Obligations arising from QUASI-DELICTS/CUPLA AQUILIANA/ TORTS Quasi-delict – is an act or omission by a person which causes damage to another, there being fault or negligence and there is no pre-existing contractual relation between the parties Difference between Delicts/Crimes and QuasiDelicts: 1. In crime, there is malicious intent, in quasi-delict, there is only negligence 2. In crime, the purpose is punishment, in quasi-delict, the purpose is indemnification. 3. In crime, public interest is affected, in quasi-delict, private interest is affected 4. In crime, the offender is liable criminally and civilly, in quasi-delict, there is only civil liability Culpa Contractual vs. Culpa criminal vs. Culpa Aquilina Culpa Contractual – negligence in the performance of contractual obligations will give rise to damages 1. An obligation to give a Determinate or Specific thing 2. An obligation to give an Indeterminate or Generic thing Determinate vs. Indeterminate Determinate or Specific Thing - - Designed or physically segregated from others of the same class, and is capable of particular designation. Ex. Toyota Vios with Plate No. ABC123, Land with TCT No. T-12345 Indeterminate or Generic Thing - - Refers to a class or genus to which it pertains and cannot be pointed out with particularity. Genus does not perish – genus nunquam perit. Ex. A Toyota Car, A parcel of Land Obligation TO GIVE a DETERMINATE THING - Specific Real Obligation Illustration: On January 1, 2020, Mr. Dy obliged himself to deliver to Mr. Chi a specific land on September 1, 2020 Active Subject/Creditor/Obligee: Mr. Chi Passive Subject/Debtor/Obligor: Mr. Dy Culpa criminal - negligence will give rise to criminal obligation Only if there is a law punishing it because there is no crime if there is no law punishing it Prestation/Object/Subject Matter: To deliver a specific land (an obligation to deliver a determinate thing) Culpa Aquiliana – the negligence will become a source of an obligation Efficient Cause/Juridical Tie/Legal Tie/Vinculum Juris: The promise made by Mr. Dy to Mr. Chi The Obligation to Give (A Real Obligation) Duties of the Debtor as a Passive Subject (in an obligation to deliver a determinate thing) specific real obligation Obligation TO GIVE 21. Real obligation 22. It may be: 1. To take care or preserve the thing pending delivery (take care of a thing like a good father of a family) 2. When the time arises, to deliver the thing, including its: a. Fruits b. Accessories c. Accessions Unless otherwise stipulated. 3. To be liable for damages in case of nonfulfillment or breach. 4. To be liable for damages in case of fraud (dolo), negligence (culpa) or delay (mora) in the performance of his obligation, or in contravention of the tenor thereof. Duty No. 1: to take care or preserve the thing pending delivery On January 1, 2020, Mr. Dy obliged himself to deliver to Mr. Chi a specific land on September 1, 2020. Active Subject/Creditor/Obligee: Mr. Chi Passive Subject/Debtor/Obligor: Mr. Dy 1. If there is no term or condition, at the time of the perfection of the contract. 2. If there is a term or condition, then from the moment the term arrives or the condition happens. Term or Period On January 1,2020, Mr. Dy obliged himself to deliver to Mr. Chi a specific land on September 1, 2020. Active Subject/Creditor/Obligee: Mr. Chi Passive Subject/Debtor/Obligor: Mr. Dy When to deliver? September 1, 2020 Condition On January 1, 2020, Mr. By obliged himself to deliver to Mr. Chi a specific land if he gets married. Active Subject/Creditor/Obligee: Mr. Chi Passive Subject/Debtor/Obligor: Mr. Dy When to deliver? When Mr. Chi marries Who will preserve the thing? Mr. Dy When to preserve? From January 1, 2020 until he delivers How should the debtor take care of the thing? 1. According to what is required by law, if any 2. According to the stipulation of the parties, if any 3. If there is no law or stipulation, with the proper diligence of a good father of the family (bonum pater familia), which is also called ordinary care. (Art. 1163) When does the obligation to deliver arise? What are accessions and accessories Accessions- everything which is produced by a thing, incorporated or attached thereto, either naturally or scientifically. It includes natural accession, such as alluvion, and industrial accession, such as building, plantings and sowings Accessories – those things which are for the embellishment, use or preservation of another thing of more importance (ex. Keys to a house, hydraulic jack of a car) - These two will follow the principal thing (accessio cedit principali) What are fruits? 1. Natural fruits – spontaneous products of the soil without the intervention of human labor, and the young and other product of animals with or without the intervention of human labor 2. Industrial Fruits – products of the soil through cultivation or human labor/industry 3. Civil Fruits – fruits as a result of juridical relations, such as rents On January 1, 2020, Mr. Dy obliged himself to deliver to Mr. Chi a specific land on September 1,2020. Active Subject/Creditor/Obligee: Mr. Chi Passive Subject/Debtor/Obligor: Mr. Dy Who has rights to the fruit from Jan 1 to Aug 31, 2020? The owner of the thing Who is the owner of the fruit on Sept 1, 2020 but before delivery? Still, the owner Who has the right to the fruits? The owner of the thing, of course, under the principle of accessory follows the principal (accessio cedit principali) When is the creditor entitled to the fruits? - - He has no right to the fruits, BEFORE the time to deliver arises. The creditor has a RIGHT (personal right) to the fruits of the thing from the time the obligation to deliver it arises. (Art. 1164) PERSONAL RIGHT (jus in personam) – a right which is enforceable only against the debtor Will the creditor automatically become the owner by then? - - - No He shall acquire no REAL right over it until the same has been delivered to him (Art. 1164) Real Right (jus in rem) – a right which is enforceable against the whole world. It is a direct and immediate juridical power over a thing General Rule: delivery transfer ownership Rights to the fruit How should the delivery be made by the debtor? - Delivery or tradition may be either actual or constructive Actual delivery – where the thing changes hands physically Constructive delivery, may be: o Traditio Simbolica (symbolical tradition) – like when the keys of a bodega are given o Traditio Longa Manu ( delivery by mere consent or the pointing out of the object) – like when pointing out the car to be sold. o Traditio Brevi Manu ( delivery by the short hand, whereby a possessor of a thing not as an owner, becomes the owner) – like when a tenant buys the house he is renting o Traditio Constitutum Possessiorum (the opposite of brevi manu, whereby an owner who is the possessor of the thing, retains possession not as an owner) – like when a house owner sells his house, but remains in possession as a tenant. o Tradition by execution of legal forms and solemnities – like when an absolute deed of sale is excuted for the selling of the land. Remedies of the creditor as an active subject (in an obligation to deliver a determinate thing) 1. Demand SPECIFIC PERFORMANCE or fulfillment, if it is still possible, with a right to indemnity for DAMAGES 2. Demand RESCISSION or cancellation, in some cases, also with a right to recover DAMAGES. 3. Demand for payment of DAMAGES only where it is the only feasible remedy Obligation TO GIVE an INDETERMINATE THING - Generic Real Obligation Illustration: On march 1, 2020, Daniel obliged himself to deliver to Carlo a car on October 31, 2020 Active Subject/Creditor/Obligee: Carlo Passive Subject/Debtor/Obligor: Daniel Prestation/Object/Subject Matter: To deliver a car (an obligation to deliver an indeterminate thing) Efficient Cause/Juridical Tie/Legal Tie/Vinculum Juris: The promise made by Daniel to Carlo Duties of the debtor as a Passive Subject (in an obligation to deliver a INDETERMINATE thing) obligation, or in contravention of the tenor thereof. Remedies of the creditor as an active subject (in an obligation to deliver an INDETERMINATE thing – the thing is still generic) 1. Demand SPECIFIC PERFORMANCE or fulfillment, if it is still possible, with a right to indemnity for DAMAGES. 2. He may ask that the obligation be complied with at the expense of the debtor. (Art. 1165) 3. Demand RESCISION or cancellation, in some cases, also with a right to recover DAMAGES 4. Demand for payment of DAMAGES only, where it is the only feasible remedy. The OBLIGATION TO DO and NOT TO DO (personal obligation) Obligation TO DO - - Positive personal obligation The primary duty of the debtor is to perform the obligation to do in a proper manner, according to its terms If the debtor performs the obligation to do properly to the satisfaction of the creditor, then we have no problem Illustration: On September 1, 2020, Douglas obliged himself to paint the house of carlos on September 5, 2020 with a color pink. Active Subject/Creditor/Obligee: Carlos 1. To deliver a thing which is of the quality intended by the parties taking into consideration the purpose of the obligation and other circumstances 2. To be liable for damages in case of nonfulfillment or breach 3. To be liable for damages in case of fraud (dolo), negligence (culpa) or delay (mora) in the performance of his Passive Subject/Debtor/Obligor: Douglas Prestation/Object/Subject Matter: To paint the house with a color pink (an obligation to do) Efficient Cause/Juridical Tie/Legal Tie/Vinculum Juris: The promise made by Douglas to Carlos. Problematic Situations 1. The debtor fails to perform an obligation to do 2. The debtor performs an obligation to do but contrary to the tenor thereof 3. The debtor performs an obligation to do but in a poor manner Rights of the Creditor in an obligation TO DO 1. If the debtor fails to perform an obligation to do, the creditor has the RIGHT; a. To have the obligation performed, if possible, by another at the expense of the debtor, and b. To recover damages 2. If the debtor performs an obligation to do poorly or contrary to the tenor thereof, the creditor has the RIGHT: a. To UNDO what has been done, at the expense of the debtor, and b. To recover damages IMPORTANT SPECIFIC PERFORMANCE cannot be ordered in case the debtor fails to perform an obligation to do because this may amount to involuntary servitude which is prohibited under the constitution (Art. III, Sec. 18 [2]) Obligation NOT TO DO - Negative personal obligation The primary duty of the debtor is to abstain from doing an act Illustration: On September 1, 2020, Denzel promised Christopher that he will not drink alcohol for the rest of the year. Active Subject/Creditor/Obligee: Christopher Passive Subject/Debtor/Obligor: Denzel Prestation/Object/Subject Matter: Not to drink alcohol (an obligation not to do) Efficient Cause/Juridical Tie/Legal Tie/Vinculum Juris: The promise made by Denzel to Christopher. RIGHTS of the creditor in an Obligation NOT TO DO If the debtor performs the prohibited act, the creditor has the RIGHT; a. To UNDO what has been done, at the expense of the debtor, and b. To recover damages CASO FORTUITO, DOLO, CULPA, MORA FORTUITOUS EVENTS (caso fortuito) - - - - Fortuitous event (Caso Fortuito) Are events which could not be foreseen, or which though foreseen, were inevitable (Art. 1174) Ordinary Fortuitous events vs. Extraordinary Fortuitous events (Caso Fortuito) Ordinary Fortuitous event – common events, which the parties could reasonably foresee. Extraordinary fortuitous events – uncommon events, which the parties could not have reasonably foreseen. This is what is covered by Art. 1174 Kinds of extraordinary fortuitous events (Caso Fortuito) 1. Acts of man – independent of the will of the obligor, like war, fire, robbery, murder, insurrection 2. Acts of God – also called force majeure, totally independent of the will of every man, like earthquake, flood, rain, shipwreck, lightning, eruption of volcano, storm. FRAUD (Deceit or Dolo) - - CASO FORTUITO - Art. 1174 General rule: no person shall be responsible for those events which could not be foreseen, or which though foreseen, were inevitable (Fortuitous Events) Exceptions: 1. In cases expressly specified by law. a. When the debtor is guilty of fraud, negligence, delay, or in contravention of the tenor of the obligation b. When the debtor has promised to deliver the same specific thing to two persons who do not have the same interest c. When the obligation to deliver a specific thing arises from a crime d. When the thing to be delivered is generic 2. When it is otherwise declared by stipulation of the parties 3. When the obligation requires the assumption of risk DAMAGES - Art. 1170 – those who in performance of their obligations guilty of the following are liable Damages: 1. FRAUD (Dolo) 2. NEGLIGENCE (Culpa) 3. DELAY (Mora) 4. Contravention the tenor of obligation the are for Fraud, Deceit or Dolo – is the deliberate or intentional evasion of the normal fulfillment of an obligation Any waver of an action for future fraud is void for being against the law and public policy, but waiver for past fraud is valid Kinds of Fraud: 1. Dolo incidente (incidental fraud) – committed in the performance of an obligation already existing because of contract. This is the fraud referred to in Art. 1170 2. Dolo causante (Casual fraud) – fraud employed in entering into a contract, which vitiates consent. NEGLIGENCE (Fault or Culpa) - - Negligence, fault, or culpa – any voluntary act or omission, there being bad faith or malice, which prevents the normal fulfillment of an obligation Any waiver for an action for future negligence is valid, except when the law requires otherwise, or when the negligence shoes bad faith Kind of Negligence: 1. Culpa contractual (contractual negligence) – negligence in the performance of contractual obligations will give rise to damages. This is the negligence referred to in Art. 1170 2. Culpa criminal (criminal negligence) – negligence giving rise to criminal obligation 3. Culpa aquiliana (civil negligence) – negligence as a source of an obligation LEGAL DELAY (Default or Mora) the - Ordinary delay vs. Legal Delay (default or mora) - Ordinary Delay – is merely the failure to perform an obligation on time Legal delay/Default/Mora – is the failure to perform an obligation on time which failure constitutes a breach of the obligation. This is the delay referred to in Art. 1170 Kinds of Legal Delay: 1. Mora solvendi – delay on the part of the debtor 2. Mora Accipiende – delay on the part of the creditor 3. Compensatio Morae – both parties incurred delay General rule: No demand, No delay - To put the other party in legal delay or default, demand MUST made by the creditor upon the debtor to comply with his obligation which demand may be either judicially or extrajudicially Exceptions: - However, the demand by the creditor shall not be necessary in order that delay may exist (Art. 1169): 1. When the obligation or the law expressly so declare 2. 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 3. When demand would be useless, as when the obligor has rendered it beyond his power to perform LEGAL DELAY (Default or Mora) - There is no delay in obligation not to do (negative personal obligation) Mora Solvendi Effects of mora solvendi: 1. The debtor is guilty of breach or violation of the obligation 2. The debtor is liable to the creditor for interest or damages 3. He is liable even for fortuitous event Mora Accipiendi Effects of mora accipiendi: 1. The creditor is guilty of breach or violation of the obligation 2. The creditor is liable to the debtor for damages 3. The creditor bears the loss of the thing due 4. Where the obligation is to pay money, the debtor is not liable for interest from the time of creditor’s delay 5. The debtor may release himself from the obligation by the consignation or deposit in the court of the thing or sum due Compensatio Morae - - In reciprocal obligations, the delay of the obligor cancels the delay of the oblige. The result is that there is no actionable default on the part of both parties From the moment one of the parties fulfills his obligation, delay by the other begins CONTRAVENTION OF THE TENOR OF THE OBLIGATION - this is the violation of the terms and conditions stipulated in the obligation. The contravention must not be due to a fortuitous event USURY - Is contracting for or receiving interest in excess of the amount allowed by law for - the loan (mutuum) or use of money, goods, chattels or credits. Usurious transactions shall be governed by special laws (Art. 1175) The usury law is now legally non-existent Requisites for recovery of interest: 1. The payment of interest must be expressly stipulated by the parties. 2. The agreement must be in writing 3. The interest must be lawful PRESUMPTION - The interference of a fact not actually known arising from its usual connection with another which is known or proved Two kinds of presumption: 1. Conclusive presumption – on which cannot be contradicted, like the presumption that everyone is conclusively presumed to know the law 2. Disputable or rebuttable presumption – one which can be contradicted or rebutted by presenting proof to the contrary Disputable Presumptions in Art. 1176: 1. The receipt of the principal by the creditor without reservation with respect to the interest, shall give rise to the presumption that said interest has been paid 2. The receipt of a later installment of a debt without reservation as to prior installments, shall likewise raise the presumption that such installments have been paid SATISFACTION OF CLAIMS Remedies available to the creditor for the satisfaction of their claims: 1. Specific performance with the right to damages 2. Pursue the levied property of the debtor 3. After pursuing the property in the possession of the debtor, exercise all the rights and bring all actions of the debtor (except those inherent in his person) 4. Ask the court to rescind or impugn acts or contracts which the debtor may have done to defraud him TRANSMISSIBILTY OF RIGHTS General Rule: All rights acquired by virtue of an obligation are TRANSMISSIBLE Exceptions: 1. Those prohibited by law (like rights in the contracts of partnership, agency and commodatum) 2. Those prohibited by stipulation of the parties.
