QUASI-CONTRACTS

Definition:

 Quasi-contracts are lawful, voluntary, and unilateral acts

which generally require a person to reimburse or
compensate another in accordance with the principle
that no one shall be unjustly enriched or benefi ted at
the expense of another. (See Art. 2142, NCC).
Bases for Quasi-Contracts

a)no one must unjustly enrich himself at

another’s expense
b)if one benefits, he must reimburse
c)justice and equity
Examples of Quasi-Contracts

(a)negotiorum gestio
(b)solutio indebiti
NEGOTIORUM GESTIO
 Art. 2144. Whoever voluntarily takes charge of the
agency or management of the business or property of
another, without any power from the latter, is obliged to
continue the same until the termination of the affair and its
incidents, or to require the person concerned to substitute
him, if the owner is in a position to do so. This juridical
relation does not arise in either of these instances:
(1)When the property or business is not neglected or
abandoned;
(2)If in fact the manager has been tacitly authorized by
the owner.
In the first case, the provisions of Articles 1317, 1403, No.
1 and 1404 regarding unauthorized contracts shall govern.
In the second case, the rules on agency in Title X of this
Book shall be applicable.
Essential Requisites for “Negotiorum
Gestio”
(a)no meeting of the minds
(b)taking charge of another’s business or property
(c) the property or business must have been ABANDONED OR NEGLECTED
(otherwise, the rule on unauthorized contracts would apply)
(d)the officious manager must NOT have been expressly or implicitly
authorized (otherwise, the rules on AGENCY would apply)
(e) the officious manager (gestor) must have VOLUNTARILY taken charge (that
is, there must be no vitiated consent, such as error in thinking that he
owned the property or the business).
Diligence Required of the Officious
Manager
Art. 2145. The officious manager shall perform his duties
with the diligence of a good father of a family, and pay
the damages which through his fault or negligence may
be suffered by the owner of the property or business under
management.
The courts may, however, increase or moderate the
indemnity according to the circumstances of each case.
Liabilities of the Officious
Manager
 Art. 2146. If the officious manager delegates to
another person all or some of his duties, he shall
be liable for the acts of the delegate, without
prejudice to the direct obligation of the latter
toward the owner of the business.
The responsibility of two or more officious
managers shall be solidary, unless the
management was assumed to save the thing or
business from imminent danger.
Art. 2147. The officious manager shall be liable for
any fortuitous event:
(1) If he undertakes risky operations which the
owner was not accustomed to embark upon;
(2) If he has preferred his own interest to that of the
owner;
(3) If he fails to return the property or business after
demand by the owner;
(4) If he assumed the management in bad faith.
 Art. 2148. Except when the management was
assumed to save the property or business from
imminent danger, the officious manager shall be
liable for fortuitous events:
(1) If he is manifestly unfit to carry on the
management;
(2) If by his intervention he prevented a more
competent person from taking up the
management.
Art. 2147. The officious manager shall be liable for
any fortuitous event:
(1) If he undertakes risky operations which the
owner was not accustomed to embark upon;
(2) If he has preferred his own interest to that of the
owner;
(3) If he fails to return the property or business after
demand by the owner;
(4) If he assumed the management in bad faith.
Art. 2152. The officious manager is personally liable
for contracts which he has entered into with third
persons, even though he acted in the name of the
owner, and there shall be no right of action
between the owner and third persons. These
provisions shall not apply:
(1) If the owner has expressly or tacitly ratified the
management, or
(2) When the contract refers to things pertaining to
the owner of the business.
Ratification by the Owner of
the Business / Liabilities of the
Owner of the Business
 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.
The same obligation shall be incumbent upon him when the
management had for its purpose the prevention of an imminent
and manifest loss, although no benefit may have been derived.
 Art. 2151. Even though the owner did not derive any
benefit and there has been no imminent and manifest
danger to the property or business, the owner is liable
as under the first paragraph of the preceding article,
provided:
(1) The officious manager has acted in good faith, and
(2) The property or business is intact, ready to be
returned to the owner.
Cause for the Extinguishment
of the Officious
Management
 Art. 2153. The management is extinguished:
(1) When the owner repudiates it or puts an end
thereto;
(2) When the officious manager withdraws from the
management, subject to the provisions of Article
2144;
(3) By the death, civil interdiction, insanity or insolvency
of the owner or the officious manager.
SOLUTIO INDEBITI
 Art. 2154. If something is received when there is no
right to demand it, and it was unduly delivered through
mistake, the obligation to return it arises.

DEFINITION

Solutio indebiti is the quasi-contract that arises when

a person is obliged to return whatever was received
by him through error or mistake or received by him
although there was NO RIGHT to demand it.
Requisites for Solutio Indebiti

(a)Receipt (not mere acknowledgment) of something.

(Art. 2154).
(b)There was no right to demand it (because the giver had
no obligation). (Hoskyn & Co., Inc. v. Goodyear Tire &
Rubber Export Co., CA., 40 O.G. No. 15 [IIs], p. 245).
(c)The undue delivery was because of mistake (either of
FACT [Hoskyn and Co. v. Goodyear, Ibid.], or of law,
which may be doubtful or difficult).
Rights and Obligations of
a Payor/Payee
 Art. 2155. Payment by reason of a mistake in the
construction or application of a doubtful or difficult
question of law may come within the scope of the
preceding article.

Are there questions of law which are NOT difficult or

doubtful? It would seem that all are hard and
susceptible or both liberal and strict interpretations.
Please note, however, that under the law, payment
because of “doubtful or difficult question of law” may
lead to solutio indebiti because of the mistake
committed.
 Art. 2156. If the payer was in doubt whether the
debt was due, he may recover if he proves that it
was not due.

Art. 2157. The responsibility of two or more

payees, when there has been payment of what is
not due, is solidary.
 Art. 2158. When the property delivered or money paid
belongs to a third person, the payee shall comply with the
provisions of Article 1984.
_____________________

Art. 1984. The depositary cannot demand that the depositor

prove his ownership of the thing deposited.
Nevertheless, should he discover that the thing has been stolen
and who its true owner is, he must advise the latter of the deposit.

If the owner in spite of such information, does not claim it within

the period of one month, the depositary shall be relieved of all
responsibility by returning the thing deposited to the depositor.

If the depositary has reasonable grounds to believe that the

thing has not been lawfully acquired by the depositor, the former
may return the same.
 If payee is in BAD FAITH:

Art. 2159. Whoever in bad faith accepts an undue

payment, shall pay legal interest if a sum of money is
involved, or shall be liable for fruits received or which
should have been received if the thing produces
fruits.
He shall furthermore be answerable for any loss or
impairment of the thing from any cause, and for
damages to the person who delivered the thing, until
it is recovered.
a. Payee is liable for interests or fruits and for
fortuitous events (damages).
b. Reason — The payee here assumes all risks
having acted fraudulently, though of
course the damages may be mitigated
under Art. 2215, No. 4.
 If payee is in GOOD FAITH:

Art. 2160. He who in good faith accepts an undue

payment of a thing certain and determinate shall
only be responsible for the impairment or loss of the
same or its accessories and accessions insofar as he
has thereby been benefited. If he has alienated it,
she shall return the price or assign the action to
collect the sum.
(a)In case of impairment or loss, liability is only
to the extent of benefit.
(b)In case of alienation, price is to be
reimbursed, or in case of credit, the same
should be assigned.
 Reimbursement for Improvement and
Expenses
Art. 2161. As regards the reimbursement for
improvements and expenses incurred by him who
unduly received the thing, the provisions of Title V of
Book II shall govern.
 Art. 2162. He shall be exempt from the
obligation to restore who, believing in good
faith that the payment was being made of a
legitimate and subsisting claim, destroyed the
document, or allowed the action to prescribe,
or gave up the pledges, or cancelled the
guaranties for his right. He who paid unduly
may proceed only against the true debtor or
the guarantors with regard to whom the
action is still effective.
 When MISTAKE is PRESUMED:

Art. 2163. It is presumed that there was a mistake

in the payment if something which had never been
due or had already been paid was delivered; but he
from whom the return is claimed may prove that the
delivery was made out of liberality or for any other
just cause.