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Obligations and Contracts Exam
Obligations and Contracts Exam
LAW 118
OBLIGATIONS AND CONTRACTS
PRELIMS EXAMS
I.
How is a civil obligation distinguished from a natural obligation? Give an
example of a natural obligation?
A civil obligation is a legal tie which gives the party with whom it
is contracted has the right to enforce its performance by law, while a
natural obligation is unenforceable by action, binding only to the party
who makes it and is based on standards of morality and natural laws.
An example of a natural obligation is a person’s fulfillment of his
obligation to other persons with utmost gratitude and compassion, such as
by being a good Samaritan during times of hardships when help and support
are extremely needed.
II.
Yes, the employer (bank) is liable for damages by the mere fact that
it is the registered owner of the said vehicle, regardless of employer-
employee relationship. Regardless of the fact that the driver had the
accident during the performance of his job or not, the owner of the
vehicle is legally liable for damages incurred in third persons for
injuries, or in this case, the death of the person, sustained in the
operation of the vehicle.
III.
When is demand necessary for one to be in delay?
Issue: Whether or not the judgement held in the criminal case, which is
acquittal based on reasonable doubt, extinguished the civil liability of
the accused.
Ruling:
No, the acquittal based on reasonable doubt does not bar the
prosecution for damages, especially if it is based on quasi-delicts.
Quasi-delicts are valid sources of civil obligation, and only a
preponderance of evidence is needed to be established in the determination
of civil liability, thus acquittal based on reasonable doubt does
extinguish the civil liability of the accused.
IV.
Explain the concepts and sources of obligation.
Under Article 1156 of the Civil Code, an obligation is a juridical
necessity to give, to do, or not to do. An obligation consists of the
active subject (obligee/creditor), a passive subject (obligor/debtor), an
object or prestation that is licit in nature, and a juridical/legal tie
(vinculum juris) which will be the basis for the performance of the
obligation.
The sources of obligations are as follows:
1. Laws: When these laws set an obligation, whether expressly or
impliedly, it should be fulfilled as it is obligatory in nature. For
example, under Article 68 of the Family Code, a husband and wife must
fulfill their obligation to observe mutual love, respect, and
fidelity and render mutual help and support to each other.
2. Contracts: They are considered as sources of obligation because in a
contract, there is a meeting of minds between the parties. The
contract is not necessarily in written form, not unless it is
required such as in a public instrument. For it to be qualified as a
source of obligation, the contract should not be contrary to laws,
morals, customs, and public policy.
3. Quasi-contracts: These are sources of obligation because they demand
for the remedy against unjust enrichment between the parties. For
example, in negotiorum gestio, the gestor may demand for the
reimbursement of the expenses incurred in the management of an
abandoned property as this is the responsibility of the owner. In
solution indebiti, unjust enrichment is prevented by giving back the
thing that is mistakenly delivered or reimburse the expenses to the
rightful owner.
4. Delicts or crimes: These are sources of obligations because under
Article 100 of the Revised Penal Code, a person that is criminally
liable is also civilly liable. For example, if the accused of a crime
is acquitted based on reasonable doubt, the civil liability is
extinguished. If there is failure to produce evidence regarding the
criminal act, there is still civil liability. Lastly, if the
acquittal of the accused is based on preponderance of evidence, civil
liability is not extinguished, and the offended party may claim for
damages.
5. Quasi-delicts: These are sources of obligation when an act or wrong
was done due to lack of skill (diligence) or lack of foresight
(reckless imprudence) resulting to a civil liability that gives birth
to an obligation and claim for damages by the offended party.
CASUPARAN v. LAROYA
[GR. No. 145391; 388 SCRA 28; 26 August 2002]
Facts:
A vehicular incident happened between two vehicles which has prompted
the filing of a criminal case against Casuparan for reckless imprudence
resulting to damage in properties and a civil case from quasi-delict. The
civil case was instituted while the criminal case is being investigated.
Due to the pendency of the criminal prosecution, the civil action was
dismissed by the lower court on the ground of forum shopping. The
petitioners contended that a separate civil action can be instituted while
the criminal action is pending, hence this petition.
Ruling:
Yes, it is possible to institute a separate civil action while the
criminal action is still pending, especially in quasi-delicts. Under the
Rules of Court, an independent civil action is not deemed instituted with
the criminal action but may be filed separately by the offended party even
without reservation.
V.
What are the legal consequences as to the liability for civil damages in
acquittals?
The following are the legal consequences as to the liability for
civil damages in acquittals:
a. If the acquittal was based on reasonable doubt, the civil liability
is extinguished;
b. If the acquittal was based on the failure to produce evidence, civil
liability is not extinguished; and
c. If the liability was based on preponderance of evidence, civil
liability is not extinguished and the offended party may claim for
damages.
LAFORTEZA v. MACHUCA
[G.R. No. 137552; 333 SCRA 643; 16 June 2000]
Facts:
A Special Power of Attorney was executed in favor of the seller for
the sale of a house and lot, and consequently, a contract of sale was
materialized specifying an agreed upon payment scheme between the buyer
and the seller. However, there was a breach in the contract as evidenced
by the buyer’s unpaid balance, and when the buyer wished to fulfill the
unpaid balance, the seller would not want to accept it and regarded that
the property is no longer for sale. It is due to the failure of the buyer
to fulfill the contractual obligation on time.
Issue: Whether or not the failure of the buyer to pay the balance on time
constitutes to the cancellation of the contract.
Ruling:
No, it is not a reasonable action to cancel the contract of sale
because the contract was already perfected. There is already a partial
performance of obligation or payment by the buyer, thus, the contract is
already valid and binding. Also, the buyer tried to settle his obligations
with the seller but the latter has refused it, so the buyer will not be
liable for any civil obligation based on negligence.
-Nothing Follows-