Obligation is derived from the Latin word Obligatio which means tying or binding.

Every obligation has four (4) essential requisites, namely:

1. Passive Subject (called debtor or obligor) – the person who is bound to the fulfillment of the obligation; he who has a duty;

2. Active Subject (called creditor or obligee) – the person who is entitled to demand the fulfillment of the obligation; he who has a right;

3. Object or prestation (subject matter of the obligation). – The conduct required to be observed by the debtor. It may consist in giving, doing, or not doing. Without the prestation, there is nothing to perform. In bilateral obligations (see Art. 1191.), the parties are reciprocally debtors and creditors; and

4. Juridical or legal tie (also called efficient cause) – 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: Johnson bound himself to clean Faye's house for P1,000.

Here, Johnson is the passive subject, Faye is the active subject, the house is the object or prestation, and the agreement or contract is the juridical tie.

Suppose Johnson had already cleaned the house, and the agreement stated that Faye would pay Johnson after the cleaning was finished. In this case, Johnson then becomes the active subject, and Faye, the passive subject.

Form of obligations.

             The form of an obligation refers to the manner in which an obligation is manifested or incurred. It may be oral, or writing, or partly oral and partly in writing.

1. As a general rule, the law does not require any form for obligations arising from contracts for   their validity or binding force. (See Art. 1356.)

2. Obligations arising from other sources (Art. 1157.) do not have any form at all. 

Obligation, right, and wrong distinguished.

1. Obligation is the act or performance which the law will enforce.

2. Right, on the other hand, is the power which a person has under the law, to demand from another any prestation. 

3. 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.  (i.e., recognized by law) of another. In law, the term injury is also used to refer to the wrongful violation of the legal right or another.   

The essential elements of a legal wrong or injury are:

1. a legal right in favor of a person (creditor/oblige/ plaintiff);

2. a correlative legal obligation on the part of another (debtor/obligor/defendant); to respect or not to violate said right; and

3. an act or omission by the latter in violation of said right with resulting injury or damage to the former. 

An obligation on the part of a person cannot exist without a corresponding right in favor of another, and vise-versa. A wrong or cause of action only arises at the moment a right has been transgressed or violated.

EXAMPLE:

Faye has the legal entitlement to have his house cleaned by Johnson, who bears the corresponding legal duty to clean Faye's house as per their contract or agreement. Johnson possesses the right to receive the agreed-upon compensation, provided that the house is cleaned according to the contract's terms and conditions.

If either party fails to adhere to these terms and conditions, it grants the other party a legal basis to enforce their rights and seek indemnification for any losses or damages incurred due to the violation of their rights.

Kinds of obligation according to the subject matter. 

From the viewpoint of the subject matter, obligation may either be real or personal.

1. Real obligation (obligation to give) is that in which the subject matter is a thing which the obligor must deliver to the obligee.

EXAMPLE:

Johnson (e.g., seller) binds himself to deliver guitar to Faye.

2.  Personal obligation (obligation to do or not to do) is that in which the subject matter is an to be done or not done.

There are two (2) kinds of personal obligation.

1. Positive personal obligation or obligation to do or to render service.  (Art. 1167.)

EXAMPLE:

Johnson binds himself to setup the guitar of Faye.

2. Negative personal obligation is obligation not to do (which naturally includes obligation “not to give”). (See Art.  1168) 

EXAMPLE:

Johnson obliges himself not to build a fence on certain of his lot in favor of Faye who is entitled to a right of way over said lot.

Sources of obligations.

The sources of obligation are enumerated below:

1. Law – when they are imposed by law itself.

EXAMPLE: Responsibility to fulfill tax obligations; duty to provide for one's family (Art. 291)

2. Contracts - when   they arise from stipulation of the parties

EXAMPLE: The duty to settle a loan or debt based on agreement

3. Quasi-contracts. -  when they rise 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. (Art 2142.) In a sense, these obligations may be considered as arising from law.

EXAMPLE: The obligation to return money paid by mistake or which is not due. (art.1161)

4. Crimes or acts or omissions punished by law. – when they arise from civil liability which is the consequence of a criminal offense.

EXAMPLE: The obligation of a thief to return the stolen car; the obligation of a murderer to provide compensation to the heirs of the victim.

5. 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.  (Art.2176)

EXAMPLE: The duty of the head of a family residing in a building or part of it to be accountable for damages resulting from objects thrown or falling from the same (Art. 2193); the obligation of the owner of an animal to compensate for any harm it may have inflicted (Art. 2183).

There is no obligation as defined in Article 1156, if its source is not any of those enumerated in Article 1157. 

Obligations arising from law are those that are created by the law itself, and not by the agreement of the parties or by any other event. These obligations are not presumed, and they can only be enforced if they are expressly stipulated in the Civil Code or in a specific law.

The rules governing obligations arising from law are found in Book IV of the Civil Code. These rules are supplemented by the specific provisions of the law that creates the obligation.

In order to determine whether an obligation arises from law, it is necessary to consider the relationship between the law and the underlying act or condition upon which the obligation is based. If the law not only recognizes the obligation but also establishes it, then the law itself is the source of the obligation. However, if the law merely acknowledges an obligation arising from an act that could potentially form a contract, quasi-contract, criminal offense, or quasi-delict, then the act itself is the source of the obligation.

For example, the obligation of a person who loses money in a game of chance to return the money with legal interest is an obligation arising from law. This is because the law itself (Article 2014 of the Civil Code) establishes this obligation.

Similarly, the mutual support obligations between spouses, the responsibilities of employers as outlined in the Labor Code, and the obligations of property owners concerning legal easements are all obligations arising from law.

Obligations arising from law are those that are created by the law itself, and not by the agreement of the parties or by any other event. These obligations are not presumed, and they can only be enforced if they are expressly stipulated in the Civil Code or in a specific law.

The rules governing obligations arising from law are found in Book IV of the Civil Code. These rules are supplemented by the specific provisions of the law that creates the obligation.

In order to determine whether an obligation arises from law, it is necessary to consider the relationship between the law and the underlying act or condition upon which the obligation is based. If the law not only recognizes the obligation but also establishes it, then the law itself is the source of the obligation. However, if the law merely acknowledges an obligation arising from an act that could potentially form a contract, quasi-contract, criminal offense, or quasi-delict, then the act itself is the source of the obligation.

For example, the obligation of a person who loses money in a game of chance to return the money with legal interest is an obligation arising from law. This is because the law itself (Article 2014 of the Civil Code) establishes this obligation.

Similarly, the mutual support obligations between spouses, the responsibilities of employers as outlined in the Labor Code, and the obligations of property owners concerning legal easements are all obligations arising from law.

A quasi contract is that juridical relation resulting from lawful, voluntary and unilateral   acts by virtue of which the parties become bound   to each other to the end that no one will be unjustly enriched or benefited at the expense of another. (Article 2142)

In a quasi-contract, there is no consent but the same is supplied by fiction of law. In other words, the law considers the parties as having entered into a contract, although they have not actually done so, and irrespective of their intention, to prevent injustice or the unjust enrichment of a person at the expense of another.

Kinds of quasi-contracts.

The principal kinds of quasi-contracts are negotiorum gestio and solution indebiti.

1. Negotiorum gestio is the voluntary management of the property or affairs of another without the knowledge or consent of the latter. (Art. 2144)

EXAMPLE:

Consequently, if Johnson, as a neighbor, took active measures to save Faye's house from a fire, Faye is obligated to reimburse Johnson for the expenses he incurred. This reimbursement duty arises even if Faye did not expressly consent to Johnson's actions, based on the principle of quasi-contract. However, this legal relationship does not come into play under the following circumstances:

(a) When the property or business is not neglected or abandoned, in which case the Civil Code provisions governing unauthorized contracts (Arts. 1317, 1403[1], 1404) shall apply; or

(b) If, indeed, Faye had tacitly authorized Johnson to act on his behalf, in which case the rules governing agency shall apply (Art. 2144).

2. Solutio indebiti is the juridical relation which is created when something is received when   there is no right to demand it and it was unduly delivered through mistake. (Art. 2154.) It is based on the principle that no one shall enrich himself unjustly at the expense of another.  

The requisites are:

1. There is no right to receive the thing delivered; and 

2. The thing was delivered through mistake.

EXAMPLE:

Case 1 - Reimbursement of Taxes Paid in Error

Background:

Johnson, a tax-exempt cooperative store, erroneously paid taxes to the City of Manila, believing that he was liable.

Question:

Can Johnson seek reimbursement for the payment?

Verdict:

Yes, Johnson can recover the payment as it was made under a genuine mistake.

(UST Cooperative Store vs. City of Manila, 15 SCRA 656 [1965].)

Case 2 - Recovery of Legally Owed Back wages

Background:

Faye, an employee of Cebu City, filed a claim for back wages against certain officials of the City.

Question:

Can the City of Cebu later reclaim the payment it made to Faye, arguing that it was not a party to the case?

Verdict:

No, because a judgment against a municipal officer in their official capacity legally binds the city. The city was obligated to make the payment, so it cannot be considered a mistake.

3. Other examples of quasi-contracts. – They are provided in Articles 2164 to 2175  of the Civil Code. The cases that  have been classified   as quasi-contracts are of infinite cariety, and when for some reason recovery cannot be had on a  true contract,  recovery may be allowed on the basis  of a quasi-contract.

Civil liability arising from crimes or delicts.

This article deals with civil liability for damages arising from crimes or delicts. 

1. Civil liability in addition to criminal liability. – oftentimes, the commission of a crime causes not only moral evil but also material damage. From this principle, the rule has been established that every person criminally liable for an act or omission is also civilly liable for damages suffered by the aggrieved party. (See Art. 100, Revised Penal Code.)

2. Criminal liability without civil liability. - In crimes, however, which cause no material damage (like contempt, insults to persons in authority, gambling, violations of traffic regulations, etc.), there is no civil liability to be enforced.

3. Civil liability without criminal liability. – A person not criminally responsible may still be liable civilly. (Art. 29; Sec. 2[c], Rule 111, Rules of Court.) such as failure to pay a contractual debt; causing damage to another’s property without malicious or criminal intent or negligence, etc., or when the obligation arises from quasi-delict (Art.1162.), not alleged and proved as a criminal offense.

Scope of Civil Liability.

The extent of the civil liability for damages arising from crimes is governed by the Revised Penal Code and the Civil Code. This civil liability includes:

1. 1. Restitution;

   2. Reparation for the damage caused; and

   3. Indemnification for consequential damages. (Art. 104, Revised Penal Code.)

EXAMPLE:

If Johnson stole Faye's car and is found guilty, the court will issue the following orders to Johnson:

1. To return Faye's car to him (or compensate for its value if it was lost or damaged).

2. To cover the costs of any damage inflicted upon the car.

3. To provide compensation for any additional damages suffered by Faye as a consequence of the crime.

Discusses obligations arising from quasi-delicts or torts.

Quasi-delicts or torts

• Refers to acts or omissions causing damage due to fault or negligence without a pre-existing contract

• It includes harm to persons, property, or rights.

Requisites of quasi-delict

There must be:

1. An act or omission

2. A fault or negligence

3. A damage caused

4. A direct relation that something else happen before it begun to be a problem

5. There is no pre-existing contract between the parties

Note:

Crime distinguished from quasi-delict

• Quasi-delict differs from crimes in intent, public vs. private interest, civil liability only, settlement options, burden of proof, and liability type (subsidiary vs. direct).

• Civil liability in quasi-delict and criminal liability can stem from the same act, but recovery of damages twice for the same act is prohibited.

Difference between Crimes and Quasi-delict:

CRIMES 

• There is a crime or malicious intent

• Purpose is punishable

• It affects public interest

• Two liabilities: criminal and civil

• Liability cannot be compromised

QUASI-DELICTS 

• Quasi delicts only negligence

• Quasi delicts is only indemnification

• Concerns only private interest

• There is only civil liability

• The liability can be compromised

Case:

Suppose Franco, a driver without a pre-existing contract, negligently causes a car accident that injures Odette, a third person, and damages her car. Odette can pursue a quasi-delict claim against Franco to recover damages for the injuries and car repair costs. If Franco is also charged with a traffic violation in criminal court, the injured party, Odette, cannot recover damages twice for the same accident—either through the quasi-delict claim or the criminal case.