Chapter I
GENERAL PROVISIONS
ARTICLE 1156. An obligation is a juridical necessity to give, to do or not to do. (n)
Meaning of Obligation:
The term obligation is derived from the Latin word “obligatio” which means a “tying” or
“binding.”
It is a tie of law or a juridical bond by virtue of which one is bound in favor of another to
render something — and this may consist in giving a thing, doing a certain act, or not doing
a certain act.
Manresa defines the term as “a legal relation established between one party and another,
whereby the latter is bound to the fulfillment of a prestation which the former may demand
of him.” (8 Manresa 13.)
Article 1156 gives the Civil Code definition of obligation, in its passive aspect. Our law
merely stresses the duty of the debtor or obligor (he who has the duty of giving, doing, or
not doing) when it speaks of obligation as a juridical necessity.
Meaning of Juridical Necessity:
Obligation is a juridical necessity because in case of non-compliance, the courts of justice may
be called upon to enforce its fulfillment or, in default thereof, the economic value that it represents.
In a proper case, the debtor may also be made liable for damages, which represent the sum of money
given as a compensation for the injury or harm suffered by the creditor or obligee (he who has the
right to the performance of the obligation) for the violation of his rights.
In other words, the debtor must comply with his obligation whether he likes it or not;
otherwise, his failure will be visited with some harmful or undesirable legal consequences. If
obligations were not made enforceable, then people can disregard them with impunity. If an obligation
cannot be enforced, it may be only a natural obligation.
Nature of Obligations under the Civil Code:
Obligations which give to the creditor or obligee a right of action in courts of justice to
enforce their performance are known as civil obligations. They are to be distinguished from natural
obligations which, not being based on positive law but on equity and natural law, do not grant a right
of action to enforce their performance although in case of voluntary fulfillment by the debtor, the
latter may not recover what has been delivered or rendered by reason thereof. (Art.* 1423.)
Natural obligations are discussed under the Title dealing with “Natural Obligations.” (Title
III, Arts. 1423-1430.)
Essential Requisites of an Obligation:
An obligation as defined in Article 1156 is constituted upon the concurrence of the four (4)
essential elements thereof, namely:
A passive subject (called debtor or obligor) or the person who is bound to the fulfillment of the
obligation; he who has a duty;
An active subject (called creditor or obligee) or the person who is entitled to demand the
fulfillment of the obligation; he who has a right;
Object or prestation (subject matter of the obligation) or the con- duct required to be observed
by the debtor. It may consist in giving, doing, or not doing. (See Art. 1232). without the
prestation, there is nothing to perform. In bilateral obligations (see Art. 1191.), the parties
are reciprocally debtors and creditors; and
*Unless otherwise indicated, refers to article in the Civil Code.
A juridical or legal tie (also called efficient cause) or that which binds or connects the parties
to the obligation. The tie in an obligation can easily be determined by knowing the source
of the obligation. (Art. 1157.)
EXAMPLE:
Under a building contract, X bound himself to construct a house for Y for P1, 000.000.00.
Here, X is the passive subject, Y is the active subject, the building of the house is the object
or prestation, and the agreement or contract, which is the source of the obligation, is the juridical tie.
Suppose X had already constructed the house and it was the agreement that Y would pay X
after the construction is finished. X, then, becomes the active subject and Y, the passive subject.
Form of Obligation:
As a general rule, the law does not require any form in obligations arising from contracts
for their validity or binding force. (See Art. 1356.)
Obligations arising from other sources (Art. 1157.) do not have any form at all.
Obligation, Right, And Wrong (Cause Of Action) Distinguished:
Obligation is the act or performance which the law will enforce.
Right, on the other hand, is the power which a person has under the law, to demand from
another any prestation.
A wrong (cause of action), according to its legal meaning, is an act or omission of one party
in violation of the legal right or rights of another, causing injury to the latter;1
*In a breach of contract, the contract violated is the subject matter, while the breach there of by the obligor is the cause of action. The
subject matter is the item with respect to which the controversy has arisen or concerning which the wrong has been done, and is ordinarily
the right, the thing or the contract under dispute. (Bachrach Corporation vs. Court of Appeals, 296 SCRA 487 [1998]; Dela Rosa vs.
Mendiola, 401 SCRA 704 [2003].)
Essential Elements of Cause Of Action:
Its essential elements are:
(a) A legal right in favor of a person (creditor/plaintiff) by whatever means and under
whatever law it arises or is created;
(b) A correlative legal obligation on the part of another (debtor/defendant) to respect or not
to violate said right; and
(c) An act or omission in breach or violation of said right by the defendant with consequential
injury or damage to the plaintiff for which he may maintain an action for the recovery of damages or
other appropriate relief. (See Ma-ao Sugar Central Co. vs. Barrios, 79 Phil. 66 [1948]; Teves vs.
People’s Homesite and Housing Corp., 23 SCRA 1141 [1968]; Development Bank of the Phils. vs.
Pundogar, 218 SCRA 118 [1993]; Parañaque King Enterprises vs. Court of Appeals, 269 SCRA 727
[1997]; Nadela vs. City of Cebu, 411 SCRA 315 [2003].)
If any of these elements is absent, the complaint becomes vulnerable to a motion to dismiss
on the ground of failure to state a cause of action. (San Lorenzo Village Assoc., Inc. vs. Court
of Appeals, 288 SCRA 115 [1998]; Uy vs. Evangelista, 361 SCRA 95 [2001].) The presence
of a cause of action rests on the sufficiency, and not on the veracity, of the allegations in the
complaint, which will have to be examined during the trial on the merits. (Pioneer
International, Ltd. vs. Guadiz, Jr., 535 SCRA 584 [2007].) The test is whether the material
allegations of the complaint, assuming to be true, state ultimate facts which constitutes
plaintiff’s cause of action such that plaintiff is entitled to a favorable judgment as a matter of
law. (Rovels Enterprises, Inc. vs. Ocampo, 391 SCRA 176 [2002].)
A cause of action only arises when the last element occurs, i.e., at the moment a right has
been transgressed.
(a) It is to be distinguished from right of action or the right to commence and maintain an
action, in that the former is governed by the procedural law while the latter depends on
substantive law. The right of action springs from the cause of action, but does not accrue until
all the facts which constitute the cause of action have occurred. (Multi-Realty Dev. Corp. vs.
Makati Tuscany Condominium Corp., 491 SCRA 9 [2006]; Borbe vs. Calalo, 535 SCRA 89
[2007].) The action shall be brought in the name of the party who by law is entitled to the right
to be enforced.
(b) An obligation on the part of a person cannot exist without a corresponding right existing
in favor of another, and vice-versa, for every right enjoyed by a person, there is a corresponding
obligation on the part of another to respect such right.
ILLUSTRATIVE CASE:
S rejected or cancelled a contract to sell his property even before the arrival of the period in the exercise of the
option to buy by the purchaser who has already made a down payment.
Facts: S and B entered into a contract to sell, whereby B, after making a down payment, was
given the option to pay the balance of the purchase price of a parcel of land. Later, S “rejected
the contract to sell’’ even before the arrival of the period for the exercise of said option on
the ground that the terms and conditions of the contract are grossly disadvantageous and
highly prejudicial to his interest. S sent two (2) checks to B in an apparent effort to return
the down payment.
S contends that the complaint was prematurely fi led because at the time of the institution
of the complaint, B has yet to exercise his option under the “Option of Buyer’’ clause of the
contract.
Issue: Has B a cause of action against S for prematurity?
Held: Yes. (1) All the elements of a cause of action are present. — First, there is a legal right in
favor of B, i.e., the right to complete the payment of the purchase price should he choose to
do so; there is an obligation on the part of S to sell the subject property exclusively to B upon
full payment of the purchase price; and there was a breach of S’s obligation to sell the
property, when S rejected the contract to sell even before B could exercise his option to buy
notwithstanding that he had already made a down payment.
(2) S rejected contract to sell in no uncertain terms. — The fact that the rejection or
cancellation of the contract by S was not made judicially or by notarial act (see Art. 1592.) is
of no moment. It is enough for purposes of determining the existence of a cause of action
that S has declared in no uncertain terms his refusal to be bound by the contract to sell. Such
declaration, coupled with S’s act of returning B’s down payment, clearly indicates S’s
rejection of the contract to sell. (Leberman Realty Corporation vs. Typingco, 293 SCRA 316
[1998].)