Negotiorum Gestio | Kinds | QUASI-CONTRACTS

CIVIL LAW > X. QUASI-CONTRACTS > B. Kinds > 1. Negotiorum Gestio

I. DEFINITION

Negotiorum Gestio, as codified in the Civil Code of the Philippines (Articles 2144–2153), is a kind of quasi-contract. It occurs when a person voluntarily assumes the management of another’s business or property without the latter’s consent or prior authorization, with the intent of benefiting the owner. The gestor (manager) acts on behalf of the dominus (owner) without a preexisting obligation.

II. ELEMENTS

To constitute negotiorum gestio, the following requisites must be present:

1. Voluntary Management - The gestor must manage the property or business without prior authority.
2. Absence of Mandate or Authority - There is no preexisting legal or contractual obligation to act.
3. Benefit to the Owner - The acts of the gestor must be intended to benefit the dominus, although actual benefit is not required.
4. Good Faith - The gestor must act in good faith.

III. OBLIGATIONS OF THE GESTOR

Under Articles 2144 to 2152 of the Civil Code, the gestor assumes the following obligations:

1. Continuity of Management:

   • The gestor must continue the management until the dominus can take over the business or property (Art. 2149). Abrupt abandonment may render the gestor liable for damages.

2. Diligence and Prudence:

   • The gestor must exercise the same diligence in managing the property as a good father of a family (Art. 2145).

3. Reporting and Accounting:

   • The gestor must render an account of the administration and deliver the benefits or proceeds to the dominus (Art. 2145).

4. Reimbursement of Expenses:

   • The gestor can recover necessary and useful expenses incurred during the management (Art. 2148). These must be reimbursed, even if the management does not yield favorable results.

5. Responsibility for Negligence:

   • If the gestor acts with negligence or fraud, they are liable for damages (Art. 2150).

IV. OBLIGATIONS OF THE DOMINUS

The dominus, or the person whose business or property is managed, also has corresponding obligations:

1. Reimbursement:

   • The dominus is obligated to reimburse necessary and useful expenses incurred by the gestor, provided these expenses benefited the dominus (Art. 2148).

2. Ratification:

   • If the dominus ratifies the acts of the gestor, the quasi-contract transforms into a contract of agency (Art. 2149).

3. Acceptance of Results:

   • The dominus cannot repudiate the results of the management if it was beneficial and performed in good faith (Art. 2146).

V. LEGAL PRESUMPTIONS

1. Acceptance of Management:

   • The dominus is presumed to have accepted the management unless they expressly refuse it after being informed (Art. 2146).

2. Benefit to the Dominus:

   • Even if the dominus does not expressly accept the management, benefits derived from it shall obligate the dominus to reimburse necessary and useful expenses (Art. 2146).

VI. EXCEPTIONS TO LIABILITY

1. Prohibited Gestor:

   • If the dominus expressly prohibits intervention, the gestor may not claim reimbursement (Art. 2147).

2. Unnecessary Management:

   • If the management is unnecessary or improperly conducted, the dominus may not be bound to reimburse the gestor (Art. 2150).

VII. DIFFERENCES FROM OTHER CONCEPTS

1. Negotiorum Gestio vs. Contract of Agency:

   • Negotiorum Gestio arises without authority, while agency is based on the consent of both parties.
   • Negotiorum Gestio is a quasi-contract, while agency is a bilateral contract.

2. Negotiorum Gestio vs. Unauthorized Agency:

   • Negotiorum Gestio involves voluntary action in the absence of authority, while unauthorized agency involves actions exceeding granted authority.

3. Negotiorum Gestio vs. Solutio Indebiti:

   • Negotiorum Gestio pertains to management of another’s affairs, while solutio indebiti refers to the return of a thing delivered through mistake.

VIII. RELEVANT JURISPRUDENCE

1. Development Bank of the Philippines v. Court of Appeals (G.R. No. 112813, 1997):

   • This case clarified that good faith and benefit to the dominus are essential elements of negotiorum gestio.

2. Tampinco v. Yulo (G.R. No. L-6228, 1911):

   • Established that the dominus must reimburse expenses incurred in good faith, even if the result was unsuccessful.

IX. GENERAL PRINCIPLE OF EQUITY

Negotiorum gestio is founded on the equitable principle that no one should unjustly benefit at another’s expense. It underscores the importance of good faith in voluntary management and ensures that the gestor is not prejudiced for their benevolent actions.

X. PRACTICAL APPLICATIONS

1. Emergency Situations:

   • Negotiorum gestio commonly applies during emergencies, such as when a gestor saves another’s property from imminent harm without their consent.

2. Property Preservation:

   • Acts of maintenance or repair of another’s property may constitute negotiorum gestio if done without authority but for the benefit of the owner.

3. Personal Representation:

   • Representing another in contractual dealings during their absence may also fall under this quasi-contract, provided it benefits the dominus.

XI. LIMITATIONS

Negotiorum gestio does not apply:

1. When the dominus has expressly prohibited the intervention.
2. When the gestor acts out of purely selfish motives.
3. When the acts performed by the gestor do not benefit the dominus.

This meticulous framework ensures that all actions taken under negotiorum gestio align with equity, good faith, and the mutual protection of the gestor and dominus.