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A. Negotiorum Gestio

1. CONCEPT

Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another. (Article 2142, Civil Code)

A. NEGOTIORUM GESTIO

1. CONCEPT

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. (Article 2142, Ibid.)

a. When not applicable

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. (Article 2144, Ibid.)

In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404 regarding unauthorized contracts shall govern.(Paragraph 2, Article 2144, Ibid.)

In the second case, the rules on agency in Title X of this Book shall be applicable. (Paragraph 3, Article 2144, Ibid.)

Cross-referenced article/s

No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.(Article 1317, Ibid.)

A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party. (Paragraph 2, Article 1317, Ibid.)

The following contracts are unenforceable, unless they are ratified: … (1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers…(Article 1403[1], Ibid.)

Unauthorized contracts are governed by Article 1317 and the principles of agency in Title X of this Book.(Article 1404, Ibid.)

2. OFFICIOUS MANAGER

a. Diligence of a good father of a family

b. Liable for damages for fault or negligence

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.(Article 2145, Ibid.)

c. Liable for delegated acts

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. (Article 2146, Ibid.)

d. Solidary liability of two or more officious managers

GENERAL RULE: The responsibility of two or more officious managers shall be solidary. (Paragraph 2, Article 2146, Ibid.)

EXCEPTION: …unless the management was assumed to save the thing or business from imminent danger. (Paragraph 2, Article 2146, Ibid.)

e. When liable for fortuitous event

GENERAL RULE: 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. (Article 2147, Ibid.)

EXCEPTION: … 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. (Article 2148, Ibid.)

f. Personal liability

GENERAL RULE: 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. (Article 2152, Ibid.)

EXCEPTIONS: 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. (Ibid.)

3. RATIFICATION

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. (Article 2149, Ibid.)

a. If not ratified

1) Owner who enjoys advantages

a) Liable for obligations incurred in his interest

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.(Article 2150, Ibid.)

(1) When still liable even if no benefit and no imminent and manifest 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 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. (Article 2151, Ibid.)

2) Management had for its purpose the prevention of an imminent and manifest loss

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.(Paragraph 2, Article 2150, Ibid.)

4. GROUNDS FOR EXTINGUISHMENT

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. (Article 2153, Ibid.)

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