LAW1101

INSTITUTE OF ACCOUNTS, BUSINESS, AND FINANCE

FAR EASTERN UNIVERSITY - MANILA
General classification of law –

1. Natural law – which is a law based on morality or equity; it is not legally compellable in court
2. Positive or State law – which refers to the law imposed by the State and is enforceable in court.
It may be classified as –
a. Private law- regulates the relations of the members of a community with each other
Example: Civil Code of the Philippines (Civil law)
b. Public law – governs the relations of an individual with the State
Example: The Revised Penal Code (Criminal law)
c. Substantive law – establishes rights as well as duties of an individual
Examples: Civil Code; National Internal Revenue Code
d. Procedural/ Adjective law (also known as Remedial law) – lays down the procedure by
which rights or claims may be enforced.
Example: Rules of Court

LAW – is a rule of conduct, just, obligatory and laid down by a legitimate power for common observance
and benefit

Note:

a. the above definition gives you the requisites of Positive/State law

b. existence of a sanction or punishment in case of non-observance of the rule of conduct is also a
requisite

CIVIL LAW – it is that branch of the law that generally treats of the personal and family relations of an
individual, his property and successional rights, and the effects of his obligations and contracts.

CIVIL CODE – it is a compilation of existing civil laws, scientifically arranged into books, titles, chapters,
and sub-heads and promulgated by legislative authority

Kinds of obligation:

a. Civil obligation – based on Positive/State Law; enforceable in court

b. Natural obligation – based on natural law or equity; not enforceable in court, however, when it
is voluntarily performed what has been paid, delivered or rendered can no longer be recovered

Art. 1156. Obligation is a juridical necessity to give, to do or not to do

Requisites of obligation:

a. Juridical tie
b. Active subject
c. Passive subject
d. Prestation

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 LAW1101
INSTITUTE OF ACCOUNTS, BUSINESS, AND FINANCE
FAR EASTERN UNIVERSITY - MANILA
Sources of obligation (Art. 1157)

1. Law 3. Quasi-contract 5. Quasi-delicts

2. Contracts 4. Crimes/delicts

LAW

- Obligations derived from law are not presumed. They must be expressly determined by legal
provisions
- They cannot be presumed because they constitute as limitation upon individual freedom

CONTRACT

- All contracts are agreements but not all agreements are contracts.
- Obligations arising from contract have the force of law between the contracting parties and
must be complied with in good faith (Art. 1159)

QUASI-CONTRACT

- Quasi-contract refers to a lawful, voluntary and unilateral act based on the maxim that “No one
shall be unjustly enriched or benefited at the expense of another.”

- TWO COMMON FORMS OF QUASI-CONTRACT

a. SOLUTIO INDEBITI which is a payment by mistake

b. NEGOTIORUM GESTIO which takes place when a person, without the knowledge nor
consent of the owner, assumes the management of an abandoned business or property
- The person who assumes the management is called the gestor or officious manager.
- The gestor is not entitled to remuneration or salary; he is entitled only to ask for reimbursement
of expenses.

- Art. 2149. The ratification of the management by the owner of the business produces the
effects of an express agency, even if the business may not have been successful.

- Art. 2150. Although the officious management may not have been expressly ratified, the owner
of the property or business who enjoys the advantages of the same shall be liable for obligations
incurred in his interest, and shall reimburse the officious manager for the necessary and useful
expenses and for the damages which the latter may have suffered in the performance of his
duties.
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 LAW1101
INSTITUTE OF ACCOUNTS, BUSINESS, AND FINANCE
FAR EASTERN UNIVERSITY - MANILA
OTHER QUASI-CONTRACTS:

- Examples:
a. When during a fire, flood, storms, or other calamity, property is saved from destruction by
another person without the knowledge of the owner, the latter is bound to pay the former
just compensation. (Art. 2168)
b. When funeral expenses are borne by a third person, without the knowledge of those
relatives who were obliged to give support to the deceased, said relatives shall reimburse
the third person, should the latter claim reimbursement. (Art. 2165)

CRIMES/DELICTS

- Every person criminally liable is also civilly liable. (Art. 100 The Revised Penal Code)
- From the standpoint of its effect, a crime has a dual character: (1) an offense against the State
because of the disturbance of the social order; and (2) as an offense against the private person
injured by the crime.
- What gives rise to the civil liability is really the obligation of everyone to repair or to make whole
the damage caused to another by reason of his act or omission.

QUASI-DELICTS/CULPA AQUILIANA

- Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relations between the parties, is called a quasi-delict and xxxxxxxx (Art. 2176)

- Refers to negligent act or omission which results in harm or damage to an individual or to the
property of another.

- Examples:
a. The possessor of an animal or whoever may make use of the same is responsible for the
damage which it may cause, although it may escape or be lost. This responsibility shall cease
only in case the damage should come from force majeure or from the fault of the person
who has suffered damage. (Art. 2180)
b. Manufacturers and processors of foodstuffs, drinks, toilet articles and similar goods shall be
liable for death or injuries caused by any noxious or harmful substances used, although no
contractual relation exists between them and the consumers. (Art. 2187)
c. The head of a family that lives in a building or a part thereof, is responsible for damages
caused by things thrown or falling from the same. (Art. 2193)
d. The proprietor of a building or structure is responsible for the damages resulting from its
total or partial collapse, if it should be due to the lack of necessary repairs. (Art. 2190)
e. The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the minor children who live in their company. (Art. 2180 par. 2)

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