Quasi-Contracts and Legal Obligations

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Questions and Answers

What happens to obligations dependent on impossible or illegal conditions?

They can be modified by the court.

They become optional for the debtor.

They are annulled. (correct)

They remain valid and enforceable.

Which statement best describes a resolutory condition?

It is always deemed valid. (correct)

It is only valid under specific circumstances.

It is consistently impossible.

It can never lead to annulment.

What principle is applied if a debtor voluntarily prevents the fulfillment of a condition?

The principle of constructive fulfillment. (correct)

The principle of creditor satisfaction.

The principle of unintentionality.

The principle of mutual agreement.

In which situation does the debtor not profit from their own actions that affect the creditor?

If the debtor prevents the condition with fraud or malice. Signup and view all the answers

Which of the following conditions are considered valid?

Conditions that are based on mutual agreement. Signup and view all the answers

What happens to the obligation when the debtor and creditor merge into the same person?

The obligation is extinguished. Signup and view all the answers

In joint obligations, what is the effect of the merging of both characters?

The share of the person in whom the two characters concur is extinguished. Signup and view all the answers

What is required for compensation to occur under Articles 1278-1290?

Both debts must be liquidated and due. Signup and view all the answers

What is the primary purpose of compensation as described in the content?

To prevent unnecessary lawsuits and payments. Signup and view all the answers

In the context of solidary obligations, what happens if a payment is made prior to remission?

The other debtors may be liable for reimbursement. Signup and view all the answers

What happens if the obligor fails to perform the service as agreed?

A third party can perform the service at the obligor's expense. Signup and view all the answers

In the case of a breach of contract, what can occur regarding third-party performance?

A third party may redo the performance at the obligor's expense. Signup and view all the answers

What characterizes legal delay in an obligation?

It requires a demand from the creditor for the debtor's performance. Signup and view all the answers

What is 'mora solvendi' in the context of obligations?

Delay of the debtor in fulfilling the obligation. Signup and view all the answers

What must be true for compensation to be valid according to the conditions stated?

Neither of the debts can have a retention controversy. Signup and view all the answers

Which of the following is NOT an element of legal delay?

The obligation is performed on time. Signup and view all the answers

What is an outcome of compensation when all the requisites are met?

Both debts are extinguished to the concurrent amount. Signup and view all the answers

If the obligor does what is forbidden, what can a third party do?

They can undo the action at the obligor's expense. Signup and view all the answers

What distinguishes ordinary delay from legal delay?

Legal delay involves judicial or extrajudicial demands. Signup and view all the answers

Who has the burden of proof when a debtor claims the benefits of compensation?

The debtor must prove compensation occurred. Signup and view all the answers

What happens to accessory obligations as a result of compensation?

They are extinguished alongside the principal debts. Signup and view all the answers

What does 'mora accipiendi' refer to?

Delay in acceptance of the debtor's performance by the creditor. Signup and view all the answers

When do the effects of compensation retroact according to the stated conditions?

From the moment all requisites for compensation concurred. Signup and view all the answers

What is a quasi-contract?

A lawful, voluntary act leading to a juridical relationship Signup and view all the answers

In which scenario does an owner have to reimburse the officious manager?

When the manager incurs expenses benefitting the owner Signup and view all the answers

Which of the following describes 'solutio indebiti'?

The return of payment received by mistake Signup and view all the answers

What type of damages compensates for a proven loss or injury?

Actual or Compensatory Damages Signup and view all the answers

What is a characteristic of exemplary damages?

They are intended as punishment and to deter wrongdoing Signup and view all the answers

Which type of liability involves returning or restoring property?

Restitution Signup and view all the answers

What distinguishes moral damages from compensatory damages?

They involve psychological suffering or loss of reputation Signup and view all the answers

Which of the following is an example of a situation requiring restitution?

Voluntary excess payment for a service Signup and view all the answers

What is the primary standard of proof in criminal cases?

Proof beyond reasonable doubt Signup and view all the answers

Which type of damages is awarded when there is no substantial injury but a legal right has been violated?

Nominal Damages Signup and view all the answers

Study Notes

Quasi-Contracts (Art. 1160)

Lawful, voluntary, unilateral acts create a juridical relationship without a formal contract
Obligations still exist even without a formal contract
Negotiorum Gestio: When someone voluntarily, without permission, manages the abandoned business or property of another person, the owner is responsible for the obligations incurred by the manager
- The owner must reimburse the manager for expenses proportionate to the benefits received
Solutio Indebiti: An obligation arises when a person receives payment mistakenly and must return it
Other Examples:
- Support provided by strangers (Art. 2164)
- Funeral expenses borne by a third party (Art. 2165)
- Property saved during calamities (Art. 2168)

“Acts or Omissions Punished by Law” (Art. 1161)

Criminal offenses
If someone commits a crime, they are not only subject to criminal punishment but also civilly liable to the victim for damages (Art. 100 Revised Penal Code)
Types of Liabilities
- Restitution: Return or restore
- Reparation: Monetary compensation including the price and sentimental value
- Indemnification: Collateral damages for injury to other persons or property
Types of Damages
- Actual or Compensatory Damages: Compensation for a proven loss or injury
- Moral Damages: Awarded for psychological suffering, mental anguish, or besmirched reputation
- Nominal Damages: Awarded when a right has been violated but no substantial injury or loss has been inflicted
- Temperate Damages: Granted for a loss suffered but cannot be proven with certainty
- Liquidated Damages: Damages stipulated in a contract and can be claimed in case of breach
- Exemplary Damages: Also known as punitive damages, awarded as punishment and to deter future wrongdoing
Damages may still be required even if innocence is declared
Criminal Cases: Proof beyond Reasonable Doubt vs. Civil Cases: Preponderance of Evidence (Civil Code of the Philippines, Book IV, Title III, Sec. 18 (2)]
If the obligor fails to provide a service, a third party can be asked to do it at the obligor's expense
If the service is performed in contravention of the agreement (breach of contract), a third party can be asked to redo it at the obligor’s expense
If the service is poorly performed, it can be treated as undone, and a third party can be asked to do it at the obligor’s expense

Obligations not to Do (Art. 1168)

If the obligor does what is forbidden, a third party can be asked to undo it at the obligor’s expense

Legal Delay (Art. 1169)

Delay with legal consequences, such as liability for fortuitous events, damages, and interest
Distinct from ordinary delay, which is non-demandable and starts when performance is not given on the due date
General Rules on Legal Delay
- There must be a judicial (courts) or extrajudicial (oral/written) demand
Forms of Legal Delay (mora)
- Mora solvendi: Delay of the debtor in fulfilling their obligation
- Mora accipiendi: Delay on the part of the creditor in accepting the performance of the debtor
- Compensatio morae: Delay of both the creditor and debtor in reciprocal obligations
Elements of Legal Delay
- The obligation is demandable and liquidated
- The debtor delays performance
- The creditor (extra)judicially requires the debtor’s performance [Pantaleon vs. Joaquin, Jr.]

Resolutory Condition (VALID)

Impossible and/or Illegal (Void)
Obligations dependent on these conditions are annulled
Exceptions:
- It won't affect pre-existing obligations
- If the obligation is divisible
- Condition not to do an impossible thing (Art. 1183)

Constructive Fulfillment (Art. 1186)

If a debtor voluntarily prevents the fulfillment of a condition, then the condition shall be deemed fulfilled (principle of good faith)
The debtor’s intent to prevent the fulfillment of the condition
The actual prevention of the fulfillment
Unnecessary if the debtor acted with fraud or malice, the debtor should not be allowed to profit from their own voluntary act that will adversely affect the creditor [The International Corporate Bank, Inc. vs. as regards the whole obligation

Effects of Merger of Debtor and Creditor

In General: The obligation is extinguished from the time the characters of the debtor and creditor are merged in the same person (Art. 1275)
Joint and Solidary Obligations
- Joint: Extinguishes the share of the person in whom the two characters concur (Art. 1277)
- Solidary: Extinguishes the entire obligation, but the other debtors may be liable for reimbursement if payment was made prior to remission
Principal Debtor and Guarantors
- In the person of the Principal Debtor/Creditor: Benefits the Guarantors
- In the person of the Guarantor: Does not extinguish the obligation

Compensation (Art. 1278-1290)

Offsetting of two obligations that are reciprocally extinguished if they are of the same value or extinguished to the concurrent amount if of different values
It prevents unnecessary lawsuits and payments, through the mutual extinction by operation of law of concurring debts (Compañia General de Tabacos vs. French and Unson)
Requisites (Art. 1279)
- Each obligor is bound principally and a principal creditor of the other
- Both debts consist in a sum of money or if the things due are fungible (same kind & quality)
- Both debts are due
- Debts are liquidated (known and/or determinable amount) [Selegna Management and Development Corporation vs. United Coconut Planters Bank] and demandable
- There are no retention controversies over either of the debts, commenced by third persons and communicated in due time to the debtor
- Compensation is not prohibited by law.
- The debtor's admission of their obligation must be clear and categorical; not one which merely arises by inference or implication from the customary execution of official documents in assuming the responsibilities of a predecessor [Bangko Sentral ng Pilipinas vs. Commission on Audit, 2006]
Effects of Compensation
- Both debts are extinguished to the concurrent amount, even though the creditors and debtors are not aware of the compensation
- Accessory obligations are also extinguished
- Effects arise from the moment all the requisites occur
- The debtor claiming its benefits must prove compensation; once proven, the effects retroact from the moment when the requisites occurred

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Description

This quiz explores the concepts of quasi-contracts, including the principles of negotiorum gestio and solutio indebiti. It discusses how lawful and unilateral acts can create obligations without formal contracts and the implications of acts punished by law. Test your understanding of these legal principles and their applications.