Law on Obligations and Contracts – Civil Law, Philippines – Comprehensive Notes and Explanations on Articles 1156–1162 and Sources of Obligations

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TITLE I
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OBLIGATIONS
(Arts. 1156-1304.)

Chapter I
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GENERAL PROVISIONS

ARTICLE 1156. An obligation is a juridical necessity to give,
to do or not to do. (n)
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Meaning of obligation.
The term obligation is derived from the Latin word “obligatio”
which means a “tying” or “binding.”
(1) It is a tie of law or a juridical bond by virtue of which one is
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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.
(2) Manresa defines the term as “a legal relation established
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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.)
(3) Article 1156 gives the Civil Code definition of obligation, in
its passive aspect. Our law merely stresses the duty of the debtor or
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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.
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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,
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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.
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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.
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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
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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.)
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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:
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(1) A passive subject (called debtor or obligor) or the person who is
bound to the fulfillment of the obligation; he who has a duty;
(2) 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;
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(3) 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
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nothing to perform. In bilateral obligations (see Art. 1191.), the parties
are reciprocally debtors and creditors; and
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*Unless otherwise indicated, refers to article in the Civil Code.
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, Art. 1156 GENERAL PROVISIONS 3



(4) 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.)
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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,
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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.
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(1) 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.)
(2) Obligations arising from other sources (Art. 1157.) do not have
any form at all.
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Obligation, right, and wrong (cause of action)
distinguished.
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(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
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act or omission of one party in violation of the legal right or rights of
another, causing injury to the latter;1
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1In 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
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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].)
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Essential elements of cause of action.
(1) 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;
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(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
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or other appropriate relief. (see Ma-ao Sugar Central Co. vs. Bar-
rios, 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].)
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(2) 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
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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
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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].)
(3) 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
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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
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accrue until all the facts which constitute the cause of action have
occurred. (Multi-Realty Dev. Corp. vs. Makati Tuscany Condo-
minium Corp., 491 SCRA 9 [2006]; Borbe vs. Calalo, 535 SCRA 89
[2007].) The action shall be brought in the name of the party who
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by law is entitled to the right to be enforced.
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