What is meant by negotiorum gestio?
Negotiorum gestio refers to the juridical relation which arises when a person voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, as a consequence of which, he 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. (Art. 2144, CC)
What are its requisites?
Its requisites are as follows:
1. The gestor must voluntarily assume the agency or management of the business or property of another.
2. The business or property must be either neglected or abandoned.
3. The agency or management must not be authorized by the owner either expressly or impliedly.
4. The assumption of the the agency or management must be made in good faith.
Negotiorum gestio 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. (Art. 2144, CC)
Distinguish between negotiorum gestio and implied agency.
1) In negotiorum gestio, it is essential that the gestor should never have been authorized in any manner whatsoever to assume the agency or management of the business or property of another, whereas in implied agency, the agent is actually authorized to assume the agency
a. by virtue of the acts of the owner or
b. by virtue of his silence or inaction, or
c. his failure to repudiate the agency, knowing that another is acting on his behalf without any authority.
2) In the first, it essential that the business or property should be either neglected or abandoned, whereas in the second, this is not required.
3) So long as the owner does not know that another is acting on his behalf without authority, the quasi-contract of negotiorum gestio exists, but once he becomes aware of such fact and still he does not repudiate the acts of the agent, the quasi-contract ceases to exist; it has become a contract of implied agency.
When is a gestor or officious manager liable for fortuitous event?
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.
Except when the management was assumed to save 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.
Diligence required of the officious manager
The officious manager shall perform his duties with all 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. (Art. 2145, CC)
Rule if the officious manager delegates his duties
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. 2146, CC)
Effect of the ratification of the owner of the business
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. 2149, CC)
Specific liabilities of the owner even if there is no ratification
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. 2150, CC)
Liability of the owner even if no benefit or danger
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. (Art. 2151, CC)
Personal liability of officious manager towards third person
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. (Art. 2152, CC)
Causes of extinguishment of the officious management
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. (Art. 2153, CC)
In fear of reprisals from lawless elements besieging his barangay, X abandoned his fishpond, fled to Manila and left for Europe. Seeking that the fish in the fishpond were ready for harvest, Y, who is in the business of managing fishponds on a commission basis, took possession of the property, harvested the fish and sold the entire harvest to Z. Thereafter, Y borrowed money from W and used the money to buy new supplies of fish fry and to prepare the fishpond for the next crop. a) What is the Juridical relation between X and Y during X's absence? b) Upon the return of X to the barangay, what are the obligations of Y to X as regards the contract with Z? c) Upon X's return, what are the obligations of X as regards Y's contract with W? d) What legal effects will result if X expressly ratifies Y's management and what would be the obligations of X in favor of Y? Explain all your answers. (1992)
(a) The juridical relation is that of the quasi-contract of "negotiorum gestio". Y is the "gestor" or "officious manager" and X is the "owner" (Art. 2144, Civil Code).
(b) Y must render an account of his operations and deliver to X the price he received for the sale of the harvested fish (Art, 2145, Civil Code).
(c) X must pay the loan obtained by Y from W because X must answer for obligations contracted with third persons in the interest of the owner (Art. 2150, Civil Code),
(d) Express ratification by X provides the effects of an express agency and X is liable to pay the commissions habitually received by the gestor as manager (Art. 2149, Civil Code).
In September, 1972, upon declaration of martial rule in the Philippines. A, together with his wife and children. disappeared from his residence along A. Mabini Street. Ermita, Manila. B, his immediate neighbor, noticing that mysterious disappearance of A and his family, closed the doors and windows of his house to prevent it from being burglarized. Years passed without B hearing from A and his family, B continued taking care of A's house, even causing minor repairs to be done at his house to preserve it. In 1976, when business began to perk up in the area, an enterprising man. C, approached B and proposed that they build stores at the ground floor of the house and convert its second floor into a pension house. B agreed to Cs proposal and together they spent for the construction of stores at the ground floor and the conversion of the second floor into a pension house. While construction was going on, fire occurred at a nearby house. The houses at the entire block, including A's were burned. After the EDSA revolution in February 1986, A and his family returned from the United States where they took refuge in 1972. Upon learning of what happened to his house. A sued B for damages, B pleaded as a defense that he merely took charge of his house under the principle of negotiorum gestio. He was not liable as the burning of the house is a fortuitous event. Is B liable to A for damages under the foregoing circumstances? (1993)
No. B is not liable for damages, because he is a gestor in negotiorum gestio (Art. 2144, Civil Code) Furthermore, B is not liable to A because Article 2147 of the Civil Code is not applicable.
B did not undertake risky operations which the owner was not accustomed to embark upon: a) he has not preferred his own interest to that of the owner; b) he has not failed to return the property or business after demand by the owner; and c) he has not assumed the management in bad faith.
He would be liable under Art. 2147 (1) of the Civil Code, because he used the property for an operation which the operator is not accustomed to, and in so doing, he exposed the house to increased risk, namely the operation of a pension house on the second floor and stores on the first floor
Armando owns a row of residential apartments in San Juan, Metro Manila, which he rents out to tenants. On 1 April 1991 he left for the United States without appointing any administrator to manage his apartments such that uncollected rentals accumulated for three (3) years. Amparo, a niece of Armando, concerned with the interest of her uncle, took it upon herself to administer the property. As a consequence, she incurred expenses in collecting the rents and in some instances even spent for necessary repairs to preserve the property. (1995)
1. What Juridical relation between Amparo and Armando, if any, has resulted from Amparo's unilateral act of assuming the administration of Armando's apartments? Explain.
2. What rights and obligations, if any, does Amparo have under the circumstances? Explain.
1. Negotiorum gestio existed between Amparo and Armando. She voluntarily took charge of the agency or management of the business or property of her uncle without any power from her uncle whose property was neglected. She is called the gestor negotiorum or officious manager, (Art. 2144, NCC)
2. It is recommended by the Committee that an enumeration of any two (2) obligations and two (2) rights as enumerated in Arts. 2145 to 2152, NCC, would entitle the examinee to full credit.