Codal Provisions in Civ 2 Course Outline

Course Outline:
CIVIL LAW REVIEW 2

Title. I. - OBLIGATIONS

CHAPTER 1
GENERAL PROVISIONS
Obligations (in General)
1. Definition: Art. 1156. An obligation is a juridical necessity to
give, to do or not to do. (n)
. ! inds of obligations as to basis and enforceability:
Art. 1"#. Obligations are civil or natural. $ivil obligations give
a rig%t of action to co&'el t%eir 'erfor&ance. (atural
obligations, not being based on 'ositive la) but on e*uity and
natural la), do not grant a rig%t of action to enforce t%eir
'erfor&ance, but after voluntary fulfill&ent by t%e obligor, t%ey
aut%ori+e t%e retention of )%at %as been delivered or rendered
by reason t%ereof. ,o&e natural obligations are set fort% in t%e
follo)ing articles.
Art. 1"". -%en a rig%t to sue u'on a civil obligation %as
la'sed by e.tinctive 'rescri'tion, t%e obligor )%o voluntarily
'erfor&s t%e contract cannot recover )%at %e %as delivered or
t%e value of t%e service %e %as rendered.
Art. 1"5. -%en )it%out t%e /no)ledge or against t%e )ill of
t%e debtor, a t%ird 'erson 'ays a debt )%ic% t%e obligor is not
legally bound to 'ay because t%e action t%ereon %as
'rescribed, but t%e debtor later voluntarily rei&burses t%e t%ird
'erson, t%e obligor cannot recover )%at %e %as 'aid.
Art. 1"6. -%en a &inor bet)een eig%teen and t)enty0one
years of age )%o %as entered into a contract )it%out t%e
consent of t%e 'arent or guardian, after t%e annul&ent of t%e
contract voluntarily returns t%e )%ole t%ing or 'rice received,
not)it%standing t%e fact t%e %e %as not been benefited t%ereby,
t%ere is no rig%t to de&and t%e t%ing or 'rice t%us returned.
Art. 1"1. -%en a &inor bet)een eig%teen and t)enty0one
years of age, )%o %as entered into a contract )it%out t%e
consent of t%e 'arent or guardian, voluntarily 'ays a su& of
&oney or delivers a fungible t%ing in fulfill&ent of t%e
obligation, t%ere s%all be no rig%t to recover t%e sa&e fro& t%e
obligee )%o %as s'ent or consu&ed it in good fait%. (1162A)
Art. 1"3. -%en, after an action to enforce a civil obligation
%as failed t%e defendant voluntarily 'erfor&s t%e obligation, %e
cannot de&and t%e return of )%at %e %as delivered or t%e
'ay&ent of t%e value of t%e service %e %as rendered.
Art. 1"4. -%en a testate or intestate %eir voluntarily 'ays a
debt of t%e decedent e.ceeding t%e value of t%e 'ro'erty )%ic%
%e received by )ill or by t%e la) of intestacy fro& t%e estate of
t%e deceased, t%e 'ay&ent is valid and cannot be rescinded by
t%e 'ayer.
Art. 1"#2. -%en a )ill is declared void because it %as not been
e.ecuted in accordance )it% t%e for&alities re*uired by la),
but one of t%e intestate %eirs, after t%e settle&ent of t%e debts
of t%e deceased, 'ays a legacy in co&'liance )it% a clause in
t%e defective )ill, t%e 'ay&ent is effective and irrevocable.
1. 5le&ents of Obligation:
a. Active subject 6 one )%o %as t%e rig%t and 'o)er
to de&and t%e 'restation (oblige or creditor)
b. 7assive subject 6 one )%o is bound to 'erfor&
t%e 'restation (obligor or debtor)
c. Object or 'restation
d. 8inculu& juris 6 juridical tie9 t%e efficient cause
t%at binds t%e t)o subjects by reason of )%ic%
t%e debtor is bound in favor of t%e creditor to
'erfor& t%e 'restation
,ources of Obligation
Art. 1151. Obligations arise fro&:
(1) :a)9
() $ontracts9
(#) ;uasi0contracts9
(") Acts or o&issions 'unis%ed by la)9 and
(5) ;uasi0delicts.
1. :a):
Art. 1153. Obligations derived fro& la) are not 'resu&ed. Only
t%ose e.'ressly deter&ined in t%is $ode or in s'ecial la)s are
de&andable, and s%all be regulated by t%e 'rece'ts of t%e la)
)%ic% establis%es t%e&9 and as to )%at %as not been foreseen,
by t%e 'rovisions of t%is <oo/.
. $ontracts
Art. 1154. Obligations arising fro& contracts %ave t%e force of
la) bet)een t%e contracting 'arties and s%ould be co&'lied
)it% in good fait%.
Art. 1#25. A contract is a &eeting of &inds bet)een t)o
'ersons )%ereby one binds %i&self, )it% res'ect to t%e ot%er,
to give so&et%ing or to render so&e service. (15"a)
#. ;uasi0contracts
Art. 1162. Obligations derived fro& *uasi0contracts s%all be
subject to t%e 'rovisions of $%a'ter 1, =itle >8??, of t%is <oo/.
Art. 1". $ertain la)ful, voluntary and unilateral acts give rise
to t%e juridical relation of *uasi0contract to t%e end t%at no one
s%all be unjustly enric%ed or benefited at t%e e.'ense of
anot%er. (n)
Art. 1"#. =%e 'rovisions for *uasi0contracts in t%is $%a'ter do
not e.clude ot%er *uasi0contracts )%ic% &ay co&e )it%in t%e
'urvie) of t%e 'receding article.
,5$=?O( 1. 0 Negotiorum Gestio

Art. 1"". -%oever voluntarily ta/es c%arge of t%e agency or
&anage&ent of t%e business or 'ro'erty of anot%er, )it%out
any 'o)er fro& t%e latter, is obliged to continue t%e sa&e until
t%e ter&ination of t%e affair and its incidents, or to re*uire t%e
'erson concerned to substitute %i&, if t%e o)ner is in a 'osition
to do so. =%is juridical relation does not arise in eit%er of t%ese
instances:
(1) -%en t%e 'ro'erty or business is not neglected or
abandoned9
() ?f in fact t%e &anager %as been tacitly aut%ori+ed
by t%e o)ner.
?n t%e first case, t%e 'rovisions of Articles 1#11, 1"2#, (o. 1,
and 1"2" regarding unaut%ori+ed contracts s%all govern.
?n t%e second case, t%e rules on agency in =itle > of t%is <oo/
s%all be a''licable. (1333a)
Art. 1"5. =%e officious &anager s%all 'erfor& %is duties )it%
all t%e diligence of a good fat%er of a fa&ily, and 'ay t%e
da&ages )%ic% t%roug% %is fault or negligence &ay be
suffered by t%e o)ner of t%e 'ro'erty or business under
&anage&ent.
=%e courts &ay, %o)ever, increase or &oderate t%e inde&nity
according to t%e circu&stances of eac% case. (1334a)
Art. 1"6. ?f t%e officious &anager delegates to anot%er 'erson
all or so&e of %is duties, %e s%all be liable for t%e acts of t%e
delegate, )it%out 'rejudice to t%e direct obligation of t%e latter
to)ard t%e o)ner of t%e business.
=%e res'onsibility of t)o or &ore officious &anagers s%all be
solidary, unless t%e &anage&ent )as assu&ed to save t%e
t%ing or business fro& i&&inent danger. (1342a)
Art. 1"1. =%e officious &anager s%all be liable for any
fortuitous event:
(1) ?f %e underta/es ris/y o'erations )%ic% t%e o)ner
)as not accusto&ed to e&bar/ u'on9
() ?f %e %as 'referred %is o)n interest to t%at of t%e
o)ner9
(#) ?f %e fails to return t%e 'ro'erty or business after
de&and by t%e o)ner9
(") ?f %e assu&ed t%e &anage&ent in bad fait%.
(1341a)
Art. 1"3. 5.ce't )%en t%e &anage&ent )as assu&ed to
save 'ro'erty or business fro& i&&inent danger, t%e officious
&anager s%all be liable for fortuitous events:
(1) ?f %e is &anifestly unfit to carry on t%e
&anage&ent9
() ?f by %is intervention %e 'revented a &ore
co&'etent 'erson fro& ta/ing u' t%e &anage&ent.
(n)
Art. 1"4. =%e ratification of t%e &anage&ent by t%e o)ner of
t%e business 'roduces t%e effects of an e.'ress agency, even
if t%e business &ay not %ave been successful. (134a)
Art. 152. Alt%oug% t%e officious &anage&ent &ay not %ave
been e.'ressly ratified, t%e o)ner of t%e 'ro'erty or business
)%o enjoys t%e advantages of t%e sa&e s%all be liable for
obligations incurred in %is interest, and s%all rei&burse t%e
officious &anager for t%e necessary and useful e.'enses and
for t%e da&ages )%ic% t%e latter &ay %ave suffered in t%e
'erfor&ance of %is duties.
=%e sa&e obligation s%all be incu&bent u'on %i& )%en t%e
&anage&ent %ad for its 'ur'ose t%e 'revention of an i&&inent
and &anifest loss, alt%oug% no benefit &ay %ave been derived.
(134#)
Art. 151. 5ven t%oug% t%e o)ner did not derive any benefit
and t%ere %as been no i&&inent and &anifest danger to t%e
'ro'erty or business, t%e o)ner is liable as under t%e first
'aragra'% of t%e 'receding article, 'rovided:
(1) =%e officious &anager %as acted in good fait%, and
() =%e 'ro'erty or business is intact, ready to be
returned to t%e o)ner. (n)
Art. 15. =%e officious &anager is 'ersonally liable for
contracts )%ic% %e %as entered into )it% t%ird 'ersons, even
t%oug% %e acted in t%e na&e of t%e o)ner, and t%ere s%all be
no rig%t of action bet)een t%e o)ner and t%ird 'ersons. =%ese
'rovisions s%all not a''ly:
(1) ?f t%e o)ner %as e.'ressly or tacitly ratified t%e
&anage&ent, or
() -%en t%e contract refers to t%ings 'ertaining to t%e
o)ner of t%e business. (n)
Art. 15#. =%e &anage&ent is e.tinguis%ed:
(1) -%en t%e o)ner re'udiates it or 'uts an end
t%ereto9
() -%en t%e officious &anager )it%dra)s fro& t%e
&anage&ent, subject to t%e 'rovisions of Article
1""9
(#) <y t%e deat%, civil interdiction, insanity or
insolvency of t%e o)ner or t%e officious &anager. (n)

,5$=?O( . 0 Solutio Indebiti

Art. 15". ?f so&et%ing is received )%en t%ere is no rig%t to
de&and it, and it )as unduly delivered t%roug% &ista/e, t%e
obligation to return it arises. (1345)
Art. 155. 7ay&ent by reason of a &ista/e in t%e construction
or a''lication of a doubtful or difficult *uestion of la) &ay
co&e )it%in t%e sco'e of t%e 'receding article. (n)
Art. 156. ?f t%e 'ayer )as in doubt )%et%er t%e debt )as due,
%e &ay recover if %e 'roves t%at it )as not due. (n)
Art. 151. =%e res'onsibility of t)o or &ore 'ayees, )%en
t%ere %as been 'ay&ent of )%at is not due, is solidary. (n)
Art. 153. -%en t%e 'ro'erty delivered or &oney 'aid belongs
to a t%ird 'erson, t%e 'ayee s%all co&'ly )it% t%e 'rovisions of
article 143". (n)
Art. 154. -%oever in bad fait% acce'ts an undue 'ay&ent,
s%all 'ay legal interest if a su& of &oney is involved, or s%all
be liable for fruits received or )%ic% s%ould %ave been received
if t%e t%ing 'roduces fruits.
@e s%all furt%er&ore be ans)erable for any loss or i&'air&ent
of t%e t%ing fro& any cause, and for da&ages to t%e 'erson
)%o delivered t%e t%ing, until it is recovered. (1346a)
Art. 162. @e )%o in good fait% acce'ts an undue 'ay&ent of a
t%ing certain and deter&inate s%all only be res'onsible for t%e
i&'air&ent or loss of t%e sa&e or its accessories and
accessions insofar as %e %as t%ereby been benefited. ?f %e %as
alienated it, %e s%all return t%e 'rice or assign t%e action to
collect t%e su&. (1341)
Art. 161. As regards t%e rei&burse&ent for i&'rove&ents and
e.'enses incurred by %i& )%o unduly received t%e t%ing, t%e
'rovisions of =itle 8 of <oo/ ?? s%all govern. (1343)
Art. 16. @e s%all be e.e&'t fro& t%e obligation to restore
)%o, believing in good fait% t%at t%e 'ay&ent )as being &ade
of a legiti&ate and subsisting clai&, destroyed t%e docu&ent,
or allo)ed t%e action to 'rescribe, or gave u' t%e 'ledges, or
cancelled t%e guaranties for %is rig%t. @e )%o 'aid unduly &ay
'roceed only against t%e true debtor or t%e guarantors )it%
regard to )%o& t%e action is still effective. (1344)
Art. 16#. ?t is 'resu&ed t%at t%ere )as a &ista/e in t%e
'ay&ent if so&et%ing )%ic% %ad never been due or %ad
already been 'aid )as delivered9 but %e fro& )%o& t%e return
is clai&ed &ay 'rove t%at t%e delivery )as &ade out of
liberality or for any ot%er just cause.
,5$=?O( #. 0 Ot%er ;uasi0$ontracts

Art. 16". -%en, )it%out t%e /no)ledge of t%e 'erson obliged
to give su''ort, it is given by a stranger, t%e latter s%all %ave a
rig%t to clai& t%e sa&e fro& t%e for&er, unless it a''ears t%at
%e gave it out of 'iety and )it%out intention of being re'aid.
Art. 165. -%en funeral e.'enses are borne by a t%ird 'erson,
)it%out t%e /no)ledge of t%ose relatives )%o )ere obliged to
give su''ort to t%e deceased, said relatives s%all rei&burse t%e
t%ird 'erson, s%ould t%e latter clai& rei&burse&ent. (134"a)
Art. 166. -%en t%e 'erson obliged to su''ort an or'%an, or
an insane or ot%er indigent 'erson unjustly refuses to give
su''ort to t%e latter, any t%ird 'erson &ay furnis% su''ort to
t%e needy individual, )it% rig%t of rei&burse&ent fro& t%e
'erson obliged to give su''ort. =%e 'rovisions of t%is article
a''ly )%en t%e fat%er or &ot%er of a c%ild under eig%teen
years of age unjustly refuses to su''ort %i&.
Art. 161. -%en t%roug% an accident or ot%er cause a 'erson
is injured or beco&es seriously ill, and %e is treated or %el'ed
)%ile %e is not in a condition to give consent to a contract, %e
s%all be liable to 'ay for t%e services of t%e '%ysician or ot%er
'erson aiding %i&, unless t%e service %as been rendered out of
'ure generosity.
Art. 163. -%en during a fire, flood, stor&, or ot%er cala&ity,
'ro'erty is saved fro& destruction by anot%er 'erson )it%out
t%e /no)ledge of t%e o)ner, t%e latter is bound to 'ay t%e
for&er just co&'ensation.
Art. 164. -%en t%e govern&ent, u'on t%e failure of any
'erson to co&'ly )it% %ealt% or safety regulations concerning
'ro'erty, underta/es to do t%e necessary )or/, even over %is
objection, %e s%all be liable to 'ay t%e e.'enses.
Art. 112. -%en by accident or ot%er fortuitous event,
&ovables se'arately 'ertaining to t)o or &ore 'ersons are
co&&ingled or confused, t%e rules on co0o)ners%i' s%all be
a''licable.
Art. 111. =%e rig%ts and obligations of t%e finder of lost
'ersonal 'ro'erty s%all be governed by Articles 114 and 12.
Art. 11. =%e rig%t of every 'ossessor in good fait% to
rei&burse&ent for necessary and useful e.'enses is governed
by Article 5"6.
Art. 11#. -%en a t%ird 'erson, )it%out t%e /no)ledge of t%e
debtor, 'ays t%e debt, t%e rig%ts of t%e for&er are governed by
Articles 1#6 and 1#1.
Art. 11". -%en in a s&all co&&unity a nationality of t%e
in%abitants of age decide u'on a &easure for 'rotection
against la)lessness, fire, flood, stor& or ot%er cala&ity, any
one )%o objects to t%e 'lan and refuses to contribute to t%e
e.'enses but is benefited by t%e 'roject as e.ecuted s%all be
liable to 'ay %is s%are of said e.'enses.
Art. 115. Any 'erson )%o is constrained to 'ay t%e ta.es of
anot%er s%all be entitled to rei&burse&ent fro& t%e latter.
". Acts or o&issions 'unis%ed by la)
Art. 1161. ?f a 'erson obliged to do so&et%ing fails to do it, t%e
sa&e s%all be e.ecuted at %is cost.
=%is sa&e rule s%all be observed if %e does it in contravention
of t%e tenor of t%e obligation. Aurt%er&ore, it &ay be decreed
t%at )%at %as been 'oorly done be undone. (1243)
Art. 111. Bes'onsibility for fault or negligence under t%e
'receding article is entirely se'arate and distinct fro& t%e civil
liability arising fro& negligence under t%e 7enal $ode. <ut t%e
'laintiff cannot recover da&ages t)ice for t%e sa&e act or
o&ission of t%e defendant. (n)
Art. 122 (B7$) Civil liability of a person guilty of felony. C
5very 'erson cri&inally liable for a felony is also civilly liable.
Art. 121. Rules regarding civil liability in certain cases. C =%e
e.e&'tion fro& cri&inal liability establis%ed in subdivisions 1,
, #, 5 and 6 of Article 1 and in subdivision " of Article 11 of
t%is $ode does not include e.e&'tion fro& civil liability, )%ic%
s%all be enforced subject to t%e follo)ing rules:
First. ?n cases of subdivisions 1, , and # of Article 1, t%e civil
liability for acts co&&itted by an i&becile or insane 'erson,
and by a 'erson under nine years of age, or by one over nine
but under fifteen years of age, )%o %as acted )it%out
discern&ent, s%all devolve u'on t%ose %aving suc% 'erson
under t%eir legal aut%ority or control, unless it a''ears t%at
t%ere )as no fault or negligence on t%eir 'art.
,%ould t%ere be no 'erson %aving suc% insane, i&becile or
&inor under %is aut%ority, legal guardians%i' or control, or if
suc% 'erson be insolvent, said insane, i&becile, or &inor s%all
res'ond )it% t%eir o)n 'ro'erty, e.ce'ting 'ro'erty e.e&'t
fro& e.ecution, in accordance )it% t%e civil la).
Second. ?n cases falling )it%in subdivision " of Article 11, t%e
'ersons for )%ose benefit t%e %ar& %as been 'revented s%all
be civilly liable in 'ro'ortion to t%e benefit )%ic% t%ey &ay %ave
received.
=%e courts s%all deter&ine, in sound discretion, t%e
'ro'ortionate a&ount for )%ic% eac% one s%all be liable.
-%en t%e res'ective s%ares cannot be e*uitably deter&ined,
even a''ro.i&ately, or )%en t%e liability also attac%es to t%e
Govern&ent, or to t%e &ajority of t%e in%abitants of t%e to)n,
and, in all events, )%enever t%e da&ages %ave been caused
)it% t%e consent of t%e aut%orities or t%eir agents,
inde&nification s%all be &ade in t%e &anner 'rescribed by
s'ecial la)s or regulations.
Third. ?n cases falling )it%in subdivisions 5 and 6 of Article 1,
t%e 'ersons using violence or causing t%e fears s%all be
'ri&arily liable and secondarily, or, if t%ere be no suc% 'ersons,
t%ose doing t%e act s%all be liable, saving al)ays to t%e latter
t%at 'art of t%eir 'ro'erty e.e&'t fro& e.ecution.
Art. 12. Subsidiary civil liability of innkeepers tavernkeepers
and proprietors of establishments. C ?n default of t%e 'ersons
cri&inally liable, inn/ee'ers, tavern/ee'ers, and any ot%er
'ersons or cor'orations s%all be civilly liable for cri&es
co&&itted in t%eir establis%&ents, in all cases )%ere a
violation of &unici'al ordinances or so&e general or s'ecial
'olice regulation s%all %ave been co&&itted by t%e& or t%eir
e&'loyees.
?nn/ee'ers are also subsidiarily liable for t%e restitution of
goods ta/en by robbery or t%eft )it%in t%eir %ouses fro& guests
lodging t%erein, or for t%e 'ay&ent of t%e value t%ereof,
'rovided t%at suc% guests s%all %ave notified in advance t%e
inn/ee'er %i&self, or t%e 'erson re'resenting %i&, of t%e
de'osit of suc% goods )it%in t%e inn9 and s%all furt%er&ore
%ave follo)ed t%e directions )%ic% suc% inn/ee'er or %is
re'resentative &ay %ave given t%e& )it% res'ect to t%e care
and vigilance over suc% goods. (o liability s%all attac% in case
of robbery )it% violence against or inti&idation of 'ersons
unless co&&itted by t%e inn/ee'erDs e&'loyees.c%an robles
virtual la) library
Art. 12#. Subsidiary civil liability of other persons. C =%e
subsidiary liability establis%ed in t%e ne.t 'receding article s%all
also a''ly to e&'loyers, teac%ers, 'ersons, and cor'orations
engaged in any /ind of industry for felonies co&&itted by t%eir
servants, 'u'ils, )or/&en, a''rentices, or e&'loyees in t%e
disc%arge of t%eir duties.
Art. 12". !hat is included in civil liability. C =%e civil liability
establis%ed in Articles 122, 121, 12, and 12# of t%is $ode
includes:
1. Bestitution9
. Be'aration of t%e da&age caused9
#. ?nde&nification for conse*uential da&ages.
5. ;uasi0delicts
Art. 116. Obligations derived fro& *uasi0delicts s%all be
governed by t%e 'rovisions of $%a'ter , =itle >8?? of t%is
<oo/, and by s'ecial la)s. (124#a)
Art. 116. -%oever by act or o&ission causes da&age to
anot%er, t%ere being fault or negligence, is obliged to 'ay for
t%e da&age done. ,uc% fault or negligence, if t%ere is no 're0
e.isting contractual relation bet)een t%e 'arties, is called a
*uasi0delict and is governed by t%e 'rovisions of t%is $%a'ter.
$o&'liance )it% Obligations
Art. 14. 5very 'erson &ust, in t%e e.ercise of %is rig%ts and in
t%e 'erfor&ance of %is duties, act )it% justice, give everyone
%is due, and observe %onesty and good fait%.
$@A7=5B
(A=EB5 A(D 5AA5$= OA O<:?GA=?O(,

Art. 116#. 5very 'erson obliged to give so&et%ing is also
obliged to ta/e care of it )it% t%e 'ro'er diligence of a good
fat%er of a fa&ily, unless t%e la) or t%e sti'ulation of t%e 'arties
re*uires anot%er standard of care. (124"a)
Art. 116". =%e creditor %as a rig%t to t%e fruits of t%e t%ing fro&
t%e ti&e t%e obligation to deliver it arises. @o)ever, %e s%all
ac*uire no real rig%t over it until t%e sa&e %as been delivered
to %i&. (1245)
Art. 1165. -%en )%at is to be delivered is a deter&inate t%ing,
t%e creditor, in addition to t%e rig%t granted %i& by Article 1112,
&ay co&'el t%e debtor to &a/e t%e delivery.
?f t%e t%ing is indeter&inate or generic, %e &ay as/ t%at t%e
obligation be co&'lied )it% at t%e e.'ense of t%e debtor.
?f t%e obligor delays, or %as 'ro&ised to deliver t%e sa&e t%ing
to t)o or &ore 'ersons )%o do not %ave t%e sa&e interest, %e
s%all be res'onsible for any fortuitous event until %e %as
effected t%e delivery. (1246)
Art. 1166. =%e obligation to give a deter&inate t%ing includes
t%at of delivering all its accessions and accessories, even
t%oug% t%ey &ay not %ave been &entioned. (1241a)
Art. 1"". =%e debtor of a t%ing cannot co&'el t%e creditor to
receive a different one, alt%oug% t%e latter &ay be of t%e sa&e
value as, or &ore valuable t%an t%at )%ic% is due.
?n obligations to do or not to do, an act or forbearance cannot
be substituted by anot%er act or forbearance against t%e
obligeeDs )ill. (1166a)
Art. 1"6. -%en t%e obligation consists in t%e delivery of an
indeter&inate or generic t%ing, )%ose *uality and
circu&stances %ave not been stated, t%e creditor cannot
de&and a t%ing of su'erior *uality. (eit%er can t%e debtor
deliver a t%ing of inferior *uality. =%e 'ur'ose of t%e obligation
and ot%er circu&stances s%all be ta/en into consideration.
Art. 1"62. A t%ing is deter&inate )%en it is 'articularly
designated or '%ysical segregated fro& all ot%er of t%e sa&e
class.
=%e re*uisite t%at a t%ing be deter&inate is satisfied if at t%e
ti&e t%e contract is entered into, t%e t%ing is ca'able of being
&ade deter&inate )it%out t%e necessity of a ne) or furt%er
agree&ent bet)een t%e 'arties. (n)
Art. "". (atural fruits are t%e s'ontaneous 'roducts of t%e
soil, and t%e young and ot%er 'roducts of ani&als.
?ndustrial fruits are t%ose 'roduced by lands of any /ind
t%roug% cultivation or labor.
$ivil fruits are t%e rents of buildings, t%e 'rice of leases of
lands and ot%er 'ro'erty and t%e a&ount of 'er'etual or life
annuities or ot%er si&ilar inco&e. (#55a)
Art. ""2. =%e o)ners%i' of 'ro'erty gives t%e rig%t by
accession to everyt%ing )%ic% is 'roduced t%ereby, or )%ic% is
incor'orated or attac%ed t%ereto, eit%er naturally or
artificially. (#5#)
!inds of Obligations
1. As to 7erfection and 5.tinguis%&ent
a. 7ure obligation

Art. 1114. 5very obligation )%ose 'erfor&ance does not
de'end u'on a future or uncertain event, or u'on a 'ast event
un/no)n to t%e 'arties, is de&andable at once.
5very obligation )%ic% contains a resolutory condition s%all
also be de&andable, )it%out 'rejudice to t%e effects of t%e
%a''ening of t%e event. (111#)
Art. 1141. ?f t%e obligation does not fi. a 'eriod, but fro& its
nature and t%e circu&stances it can be inferred t%at a 'eriod
)as intended, t%e courts &ay fi. t%e duration t%ereof.
=%e courts s%all also fi. t%e duration of t%e 'eriod )%en it
de'ends u'on t%e )ill of t%e debtor.
?n every case, t%e courts s%all deter&ine suc% 'eriod as &ay
under t%e circu&stances %ave been 'robably conte&'lated by
t%e 'arties. Once fi.ed by t%e courts, t%e 'eriod cannot be
c%anged by t%e&. (113a)
b. $onditional
Art. 1131. ?n conditional obligations, t%e ac*uisition of rig%ts, as
)ell as t%e e.tinguis%&ent or loss of t%ose already ac*uired,
s%all de'end u'on t%e %a''ening of t%e event )%ic%
constitutes t%e condition. (111")
Art. 113. -%en t%e fulfill&ent of t%e condition de'ends u'on
t%e sole )ill of t%e debtor, t%e conditional obligation s%all be
void. ?f it de'ends u'on c%ance or u'on t%e )ill of a t%ird
'erson, t%e obligation s%all ta/e effect in confor&ity )it% t%e
'rovisions of t%is $ode. (1115)
Art. 113#. ?&'ossible conditions, t%ose contrary to good
custo&s or 'ublic 'olicy and t%ose 'ro%ibited by la) s%all
annul t%e obligation )%ic% de'ends u'on t%e&. ?f t%e obligation
is divisible, t%at 'art t%ereof )%ic% is not affected by t%e
i&'ossible or unla)ful condition s%all be valid.
=%e condition not to do an i&'ossible t%ing s%all be considered
as not %aving been agreed u'on. (1116a)
Art. 113". =%e condition t%at so&e event %a''en at a
deter&inate ti&e s%all e.tinguis% t%e obligation as soon as t%e
ti&e e.'ires or if it %as beco&e indubitable t%at t%e event )ill
not ta/e 'lace. (1111)
Art. 1135. =%e condition t%at so&e event )ill not %a''en at a
deter&inate ti&e s%all render t%e obligation effective fro& t%e
&o&ent t%e ti&e indicated %as ela'sed, or if it %as beco&e
evident t%at t%e event cannot occur.
?f no ti&e %as been fi.ed, t%e condition s%all be dee&ed
fulfilled at suc% ti&e as &ay %ave 'robably been conte&'lated,
bearing in &ind t%e nature of t%e obligation. (1113)
Art. 1136. =%e condition s%all be dee&ed fulfilled )%en t%e
obligor voluntarily 'revents its fulfill&ent. (1114)
Art. 1131. =%e effects of a conditional obligation to give, once
t%e condition %as been fulfilled, s%all retroact to t%e day of t%e
constitution of t%e obligation. (evert%eless, )%en t%e obligation
i&'oses reci'rocal 'restations u'on t%e 'arties, t%e fruits and
interests during t%e 'endency of t%e condition s%all be dee&ed
to %ave been &utually co&'ensated. ?f t%e obligation is
unilateral, t%e debtor s%all a''ro'riate t%e fruits and interests
received, unless fro& t%e nature and circu&stances of t%e
obligation it s%ould be inferred t%at t%e intention of t%e 'erson
constituting t%e sa&e )as different.
?n obligations to do and not to do, t%e courts s%all deter&ine, in
eac% case, t%e retroactive effect of t%e condition t%at %as been
co&'lied )it%. (112)
Art. 1133. =%e creditor &ay, before t%e fulfill&ent of t%e
condition, bring t%e a''ro'riate actions for t%e 'reservation of
%is rig%t.
=%e debtor &ay recover )%at during t%e sa&e ti&e %e %as
'aid by &ista/e in case of a sus'ensive condition. (111a)
Art. 1134. -%en t%e conditions %ave been i&'osed )it% t%e
intention of sus'ending t%e efficacy of an obligation to give, t%e
follo)ing rules s%all be observed in case of t%e i&'rove&ent,
loss or deterioration of t%e t%ing during t%e 'endency of t%e
condition:
(1) ?f t%e t%ing is lost )it%out t%e fault of t%e debtor,
t%e obligation s%all be e.tinguis%ed9
() ?f t%e t%ing is lost t%roug% t%e fault of t%e debtor,
%e s%all be obliged to 'ay da&ages9 it is understood
t%at t%e t%ing is lost )%en it 'eris%es, or goes out of
co&&erce, or disa''ears in suc% a )ay t%at its
e.istence is un/no)n or it cannot be recovered9
(#) -%en t%e t%ing deteriorates )it%out t%e fault of t%e
debtor, t%e i&'air&ent is to be borne by t%e creditor9
(") ?f it deteriorates t%roug% t%e fault of t%e debtor, t%e
creditor &ay c%oose bet)een t%e rescission of t%e
obligation and its fulfill&ent, )it% inde&nity for
da&ages in eit%er case9
(5) ?f t%e t%ing is i&'roved by its nature, or by ti&e,
t%e i&'rove&ent s%all inure to t%e benefit of t%e
creditor9
(6) ?f it is i&'roved at t%e e.'ense of t%e debtor, %e
s%all %ave no ot%er rig%t t%an t%at granted to t%e
usufructuary. (11)
Art. 1142. -%en t%e conditions %ave for t%eir 'ur'ose t%e
e.tinguis%&ent of an obligation to give, t%e 'arties, u'on t%e
fulfill&ent of said conditions, s%all return to eac% ot%er )%at
t%ey %ave received.
?n case of t%e loss, deterioration or i&'rove&ent of t%e t%ing,
t%e 'rovisions )%ic%, )it% res'ect to t%e debtor, are laid do)n
in t%e 'receding article s%all be a''lied to t%e 'arty )%o is
bound to return.
As for t%e obligations to do and not to do, t%e 'rovisions of t%e
second 'aragra'% of Article 1131 s%all be observed as regards
t%e effect of t%e e.tinguis%&ent of t%e obligation. (11#)
c. -it% a =er& or 7eriod
Art. 1132. -%en t%e debtor binds %i&self to 'ay )%en %is
&eans 'er&it %i& to do so, t%e obligation s%all be dee&ed to
be one )it% a 'eriod, subject to t%e 'rovisions of Article 1141.
,5$=?O( . 0 Obligations )it% a 7eriod

Art. 114#. Obligations for )%ose fulfill&ent a day certain %as
been fi.ed, s%all be de&andable only )%en t%at day co&es.
Obligations )it% a resolutory 'eriod ta/e effect at once, but
ter&inate u'on arrival of t%e day certain.
A day certain is understood to be t%at )%ic% &ust necessarily
co&e, alt%oug% it &ay not be /no)n )%en.
?f t%e uncertainty consists in )%et%er t%e day )ill co&e or not,
t%e obligation is conditional, and it s%all be regulated by t%e
rules of t%e 'receding ,ection. (115a)
Art. 114". ?n case of loss, deterioration or i&'rove&ent of t%e
t%ing before t%e arrival of t%e day certain, t%e rules in Article
1134 s%all be observed. (n)
Art. 1145. Anyt%ing 'aid or delivered before t%e arrival of t%e
'eriod, t%e obligor being una)are of t%e 'eriod or believing
t%at t%e obligation %as beco&e due and de&andable, &ay be
recovered, )it% t%e fruits and interests. (116a)
Art. 1146. -%enever in an obligation a 'eriod is designated, it
is 'resu&ed to %ave been establis%ed for t%e benefit of bot%
t%e creditor and t%e debtor, unless fro& t%e tenor of t%e sa&e
or ot%er circu&stances it s%ould a''ear t%at t%e 'eriod %as
been establis%ed in favor of one or of t%e ot%er. (111)
Art. 1141. ?f t%e obligation does not fi. a 'eriod, but fro& its
nature and t%e circu&stances it can be inferred t%at a 'eriod
)as intended, t%e courts &ay fi. t%e duration t%ereof.
=%e courts s%all also fi. t%e duration of t%e 'eriod )%en it
de'ends u'on t%e )ill of t%e debtor.
?n every case, t%e courts s%all deter&ine suc% 'eriod as &ay
under t%e circu&stances %ave been 'robably conte&'lated by
t%e 'arties. Once fi.ed by t%e courts, t%e 'eriod cannot be
c%anged by t%e&. (113a)
Art. 1143. =%e debtor s%all lose every rig%t to &a/e use of t%e
'eriod:
(1) -%en after t%e obligation %as been contracted, %e beco&es
insolvent, unless %e gives a guaranty or security for t%e debt9
() -%en %e does not furnis% to t%e creditor t%e guaranties or
securities )%ic% %e %as 'ro&ised9
(#) -%en by %is o)n acts %e %as i&'aired said guaranties or
securities after t%eir establis%&ent, and )%en t%roug% a
fortuitous event t%ey disa''ear, unless %e i&&ediately gives
ne) ones e*ually satisfactory9
(") -%en t%e debtor violates any underta/ing, in consideration
of )%ic% t%e creditor agreed to t%e 'eriod9
(5) -%en t%e debtor atte&'ts to abscond. (114a)
. As to 7lurality of 7restation
a. $onjunctive
b. Alternative
,5$=?O( #. 0 Alternative Obligations

Art. 1144. A 'erson alternatively bound by different 'restations
s%all co&'letely 'erfor& one of t%e&.
=%e creditor cannot be co&'elled to receive 'art of one and
'art of t%e ot%er underta/ing. (11#1)
Art. 122. =%e rig%t of c%oice belongs to t%e debtor, unless it
%as been e.'ressly granted to t%e creditor.
=%e debtor s%all %ave no rig%t to c%oose t%ose 'restations
)%ic% are i&'ossible, unla)ful or )%ic% could not %ave been
t%e object of t%e obligation. (11#)
Art. 121. =%e c%oice s%all 'roduce no effect e.ce't fro& t%e
ti&e it %as been co&&unicated. (11##)
Art. 12. =%e debtor s%all lose t%e rig%t of c%oice )%en
a&ong t%e 'restations )%ereby %e is alternatively bound, only
one is 'racticable. (11#")
Art. 12#. ?f t%roug% t%e creditorDs acts t%e debtor cannot &a/e
a c%oice according to t%e ter&s of t%e obligation, t%e latter &ay
rescind t%e contract )it% da&ages. (n)
Art. 12". =%e creditor s%all %ave a rig%t to inde&nity for
da&ages )%en, t%roug% t%e fault of t%e debtor, all t%e t%ings
)%ic% are alternatively t%e object of t%e obligation %ave been
lost, or t%e co&'liance of t%e obligation %as beco&e
i&'ossible.
=%e inde&nity s%all be fi.ed ta/ing as a basis t%e value of t%e
last t%ing )%ic% disa''eared, or t%at of t%e service )%ic% last
beca&e i&'ossible.
Da&ages ot%er t%an t%e value of t%e last t%ing or service &ay
also be a)arded. (11#5a)
Art. 125. -%en t%e c%oice %as been e.'ressly given to t%e
creditor, t%e obligation s%all cease to be alternative fro& t%e
day )%en t%e selection %as been co&&unicated to t%e debtor.
Entil t%en t%e res'onsibility of t%e debtor s%all be governed by
t%e follo)ing rules:
(1) ?f one of t%e t%ings is lost t%roug% a fortuitous
event, %e s%all 'erfor& t%e obligation by delivering
t%at )%ic% t%e creditor s%ould c%oose fro& a&ong t%e
re&ainder, or t%at )%ic% re&ains if only one subsists9
() ?f t%e loss of one of t%e t%ings occurs t%roug% t%e
fault of t%e debtor, t%e creditor &ay clai& any of t%ose
subsisting, or t%e 'rice of t%at )%ic%, t%roug% t%e fault
of t%e for&er, %as disa''eared, )it% a rig%t to
da&ages9
(#) ?f all t%e t%ings are lost t%roug% t%e fault of t%e
debtor, t%e c%oice by t%e creditor s%all fall u'on t%e
'rice of any one of t%e&, also )it% inde&nity for
da&ages.
=%e sa&e rules s%all be a''lied to obligations to do or not to
do in case one, so&e or all of t%e 'restations s%ould beco&e
i&'ossible. (11#6a)
c. Aacultative
Art. 126. -%en only one 'restation %as been agreed u'on,
but t%e obligor &ay render anot%er in substitution, t%e
obligation is called facultative.
=%e loss or deterioration of t%e t%ing intended as a substitute,
t%roug% t%e negligence of t%e obligor, does not render %i&
liable. <ut once t%e substitution %as been &ade, t%e obligor is
liable for t%e loss of t%e substitute on account of %is delay,
negligence or fraud.
#. As to Big%ts and Obligations of Fulti'le 7arties
,5$=?O( ". 0 Goint and ,olidary Obligations
Art. 121. =%e concurrence of t)o or &ore creditors or of t)o
or &ore debtors in one and t%e sa&e obligation does not i&'ly
t%at eac% one of t%e for&er %as a rig%t to de&and, or t%at eac%
one of t%e latter is bound to render, entire co&'liance )it% t%e
'restation. =%ere is a solidary liability only )%en t%e obligation
e.'ressly so states, or )%en t%e la) or t%e nature of t%e
obligation re*uires solidarity. (11#1a)
Art. 123. ?f fro& t%e la), or t%e nature or t%e )ording of t%e
obligations to )%ic% t%e 'receding article refers t%e contrary
does not a''ear, t%e credit or debt s%all be 'resu&ed to be
divided into as &any s%ares as t%ere are creditors or debtors,
t%e credits or debts being considered distinct fro& one anot%er,
subject to t%e Bules of $ourt governing t%e &ulti'licity of suits.
Art. 124. ?f t%e division is i&'ossible, t%e rig%t of t%e creditors
&ay be 'rejudiced only by t%eir collective acts, and t%e debt
can be enforced only by 'roceeding against all t%e debtors. ?f
one of t%e latter s%ould be insolvent, t%e ot%ers s%all not be
liable for %is s%are. (11#4)
Art. 112. =%e indivisibility of an obligation does not
necessarily give rise to solidarity. (or does solidarity of itself
i&'ly indivisibility. (n)
Art. 111. ,olidarity &ay e.ist alt%oug% t%e creditors and t%e
debtors &ay not be bound in t%e sa&e &anner and by t%e
sa&e 'eriods and conditions. (11"2)
Art. 11. 5ac% one of t%e solidary creditors &ay do )%atever
&ay be useful to t%e ot%ers, but not anyt%ing )%ic% &ay be
'rejudicial to t%e latter. (11"1a)
Art. 11#. A solidary creditor cannot assign %is rig%ts )it%out
t%e consent of t%e ot%ers. (n)
Art. 11". =%e debtor &ay 'ay any one of t%e solidary
creditors9 but if any de&and, judicial or e.trajudicial, %as been
&ade by one of t%e&, 'ay&ent s%ould be &ade to %i&.
Art. 115. (ovation, co&'ensation, confusion or re&ission of
t%e debt, &ade by any of t%e solidary creditors or )it% any of
t%e solidary debtors, s%all e.tinguis% t%e obligation, )it%out
'rejudice to t%e 'rovisions of Article 114.
=%e creditor )%o &ay %ave e.ecuted any of t%ese acts, as )ell
as %e )%o collects t%e debt, s%all be liable to t%e ot%ers for t%e
s%are in t%e obligation corres'onding to t%e&. (11"#)
Art. 116. =%e creditor &ay 'roceed against any one of t%e
solidary debtors or so&e or all of t%e& si&ultaneously. =%e
de&and &ade against one of t%e& s%all not be an obstacle to
t%ose )%ic% &ay subse*uently be directed against t%e ot%ers,
so long as t%e debt %as not been fully collected. (11""a)
Art. 111. 7ay&ent &ade by one of t%e solidary debtors
e.tinguis%es t%e obligation. ?f t)o or &ore solidary debtors
offer to 'ay, t%e creditor &ay c%oose )%ic% offer to acce't.
@e )%o &ade t%e 'ay&ent &ay clai& fro& %is co0debtors only
t%e s%are )%ic% corres'onds to eac%, )it% t%e interest for t%e
'ay&ent already &ade. ?f t%e 'ay&ent is &ade before t%e debt
is due, no interest for t%e intervening 'eriod &ay be
de&anded.
-%en one of t%e solidary debtors cannot, because of %is
insolvency, rei&burse %is s%are to t%e debtor 'aying t%e
obligation, suc% s%are s%all be borne by all %is co0debtors, in
'ro'ortion to t%e debt of eac%. (11"5a)
Art. 113. 7ay&ent by a solidary debtor s%all not entitle %i& to
rei&burse&ent fro& %is co0debtors if suc% 'ay&ent is &ade
after t%e obligation %as 'rescribed or beco&e illegal. (n)
Art. 114. =%e re&ission &ade by t%e creditor of t%e s%are
)%ic% affects one of t%e solidary debtors does not release t%e
latter fro& %is res'onsibility to)ards t%e co0debtors, in case t%e
debt %ad been totally 'aid by anyone of t%e& before t%e
re&ission )as effected. (11"6a)
Art. 12. =%e re&ission of t%e )%ole obligation, obtained by
one of t%e solidary debtors, does not entitle %i& to
rei&burse&ent fro& %is co0debtors. (n)
Art. 11. ?f t%e t%ing %as been lost or if t%e 'restation %as
beco&e i&'ossible )it%out t%e fault of t%e solidary debtors, t%e
obligation s%all be e.tinguis%ed.
?f t%ere )as fault on t%e 'art of any one of t%e&, all s%all be
res'onsible to t%e creditor, for t%e 'rice and t%e 'ay&ent of
da&ages and interest, )it%out 'rejudice to t%eir action against
t%e guilty or negligent debtor.
?f t%roug% a fortuitous event, t%e t%ing is lost or t%e
'erfor&ance %as beco&e i&'ossible after one of t%e solidary
debtors %as incurred in delay t%roug% t%e judicial or
e.trajudicial de&and u'on %i& by t%e creditor, t%e 'rovisions of
t%e 'receding 'aragra'% s%all a''ly. (11"1a)
Art. 1. A solidary debtor &ay, in actions filed by t%e creditor,
avail %i&self of all defenses )%ic% are derived fro& t%e nature
of t%e obligation and of t%ose )%ic% are 'ersonal to %i&, or
'ertain to %is o)n s%are. -it% res'ect to t%ose )%ic%
'ersonally belong to t%e ot%ers, %e &ay avail %i&self t%ereof
only as regards t%at 'art of t%e debt for )%ic% t%e latter are
res'onsible.
a. Goint
b. ,olidary
Art. 41. ?f t)o or &ore %eirs ta/e 'ossession of t%e estate,
t%ey s%all be solidarily liable for t%e loss or destruction of a
t%ing devised or be*ueat%ed, even t%oug% only one of t%e&
s%ould %ave been negligent. (n)
Art. 13". All 'artners are liable solidarily )it% t%e 'artners%i'
for everyt%ing c%argeable to t%e 'artners%i' under Articles
13 and 13#. (n)
Art. 1411. 5ven )%en t%e agent %as e.ceeded %is aut%ority, t%e
'rinci'al is solidarily liable )it% t%e agent if t%e for&er allo)ed
t%e latter to act as t%oug% %e %ad full 'o)ers. (n)
Art. 1415. ?f t)o or &ore 'ersons %ave a''ointed an agent for
a co&&on transaction or underta/ing, t%ey s%all be solidarily
liable to t%e agent for all t%e conse*uences of t%e agency.
Art. 14"5. -%en t%ere are t)o or &ore bailees to )%o& a t%ing
is loaned in t%e sa&e contract, t%ey are liable solidarily.
Art. 151. =%e res'onsibility of t)o or &ore 'ayees, )%en
t%ere %as been 'ay&ent of )%at is not due, is solidary.
Art. 14". =%e res'onsibility of t)o or &ore 'ersons )%o are
liable for *uasi0delict is solidary.
Art. 1"6. ?f t%e officious &anager delegates to anot%er 'erson
all or so&e of %is duties, %e s%all be liable for t%e acts of t%e
delegate, )it%out 'rejudice to t%e direct obligation of t%e latter
to)ard t%e o)ner of t%e business.
Art. 4". =%e absolute co&&unity of 'ro'erty s%all be liable for:
(1) =%e su''ort of t%e s'ouses, t%eir co&&on c%ildren, and
legiti&ate c%ildren of eit%er s'ouse9 %o)ever, t%e su''ort of
illegiti&ate c%ildren s%all be governed by t%e 'rovisions of t%is
$ode on ,u''ort9
() All debts and obligations contracted during t%e &arriage by
t%e designated ad&inistrator0s'ouse for t%e benefit of t%e
co&&unity, or by bot% s'ouses, or by one s'ouse )it% t%e
consent of t%e ot%er9
(#) Debts and obligations contracted by eit%er s'ouse )it%out
t%e consent of t%e ot%er to t%e e.tent t%at t%e fa&ily &ay %ave
been benefited9
(") All ta.es, liens, c%arges and e.'enses, including &ajor or
&inor re'airs, u'on t%e co&&unity 'ro'erty9
(5) All ta.es and e.'enses for &ere 'reservation &ade during
&arriage u'on t%e se'arate 'ro'erty of eit%er s'ouse used by
t%e fa&ily9
(6) 5.'enses to enable eit%er s'ouse to co&&ence or
co&'lete a 'rofessional or vocational course, or ot%er activity
for self0i&'rove&ent9
(1) Ante0nu'tial debts of eit%er s'ouse insofar as t%ey %ave
redounded to t%e benefit of t%e fa&ily9
(3) =%e value of )%at is donated or 'ro&ised by bot% s'ouses
in favor of t%eir co&&on legiti&ate c%ildren for t%e e.clusive
'ur'ose of co&&encing or co&'leting a 'rofessional or
vocational course or ot%er activity for self0i&'rove&ent9
(4) Ante0nu'tial debts of eit%er s'ouse ot%er t%an t%ose falling
under 'aragra'% (1) of t%is Article, t%e su''ort of illegiti&ate
c%ildren of eit%er s'ouse, and liabilities incurred by eit%er
s'ouse by reason of a cri&e or a *uasi0delict, in case of
absence or insufficiency of t%e e.clusive 'ro'erty of t%e
debtor0s'ouse, t%e 'ay&ent of )%ic% s%all be considered as
advances to be deducted fro& t%e s%are of t%e debtor0s'ouse
u'on li*uidation of t%e co&&unity9 and
(12) 5.'enses of litigation bet)een t%e s'ouses unless t%e suit
is found to be groundless.
?f t%e co&&unity 'ro'erty is insufficient to cover t%e foregoing
liabilities, e.ce't t%ose falling under 'aragra'% (4), t%e
s'ouses s%all be solidarily liable for t%e un'aid balance )it%
t%eir se'arate 'ro'erties. (161a, 16a, 16#a, 2a025a)
Art. 11. =%e conjugal 'artners%i' s%all be liable for:
(1) =%e su''ort of t%e s'ouse, t%eir co&&on c%ildren, and t%e
legiti&ate c%ildren of eit%er s'ouse9 %o)ever, t%e su''ort of
illegiti&ate c%ildren s%all be governed by t%e 'rovisions of t%is
$ode on ,u''ort9
() All debts and obligations contracted during t%e &arriage by
t%e designated ad&inistrator0s'ouse for t%e benefit of t%e
conjugal 'artners%i' of gains, or by bot% s'ouses or by one of
t%e& )it% t%e consent of t%e ot%er9
(#) Debts and obligations contracted by eit%er s'ouse )it%out
t%e consent of t%e ot%er to t%e e.tent t%at t%e fa&ily &ay %ave
benefited9
(") All ta.es, liens, c%arges, and e.'enses, including &ajor or
&inor re'airs u'on t%e conjugal 'artners%i' 'ro'erty9
(5) All ta.es and e.'enses for &ere 'reservation &ade during
t%e &arriage u'on t%e se'arate 'ro'erty of eit%er s'ouse9
(6) 5.'enses to enable eit%er s'ouse to co&&ence or
co&'lete a 'rofessional, vocational, or ot%er activity for self0
i&'rove&ent9
(1) Ante0nu'tial debts of eit%er s'ouse insofar as t%ey %ave
redounded to t%e benefit of t%e fa&ily9
(3) =%e value of )%at is donated or 'ro&ised by bot% s'ouses
in favor of t%eir co&&on legiti&ate c%ildren for t%e e.clusive
'ur'ose of co&&encing or co&'leting a 'rofessional or
vocational course or ot%er activity for self0i&'rove&ent9 and
(4) 5.'enses of litigation bet)een t%e s'ouses unless t%e suit
is found to groundless.
?f t%e conjugal 'artners%i' is insufficient to cover t%e foregoing
liabilities, t%e s'ouses s%all be solidarily liable for t%e un'aid
balance )it% t%eir se'arate 'ro'erties. (161a)
Art. 42. "rescription of crime. C $ri&es 'unis%able by deat%,
reclusion 'er'etua or reclusion te&'oral s%all 'rescribe in
t)enty years.
$ri&es 'unis%able by ot%er afflictive 'enalties s%all 'rescribe
in fifteen years.
=%ose 'unis%able by a correctional 'enalty s%all 'rescribe in
ten years9 )it% t%e e.ce'tion of t%ose 'unis%able by arresto
&ayor, )%ic% s%all 'rescribe in five years.
=%e cri&e of libel or ot%er si&ilar offenses s%all 'rescribe in
one year.
=%e cri&e of oral defa&ation and slander by deed s%all
'rescribe in si. &ont%s.
:ig%t offenses 'rescribe in t)o &ont%s.c%an robles virtual la)
library
-%en t%e 'enalty fi.ed by la) is a co&'ound one, t%e %ig%est
'enalty s%all be &ade t%e basis of t%e a''lication of t%e rules
contained in t%e first, second and t%ird 'aragra'%s of t%is
article.
c. Disjunctive
". As to 7erfor&ance of 7restation
Art. 11. ?f t%e t%ing %as been lost or if t%e 'restation %as
beco&e i&'ossible )it%out t%e fault of t%e solidary debtors, t%e
obligation s%all be e.tinguis%ed.
?f t%ere )as fault on t%e 'art of any one of t%e&, all s%all be
res'onsible to t%e creditor, for t%e 'rice and t%e 'ay&ent of
da&ages and interest, )it%out 'rejudice to t%eir action against
t%e guilty or negligent debtor.
?f t%roug% a fortuitous event, t%e t%ing is lost or t%e
'erfor&ance %as beco&e i&'ossible after one of t%e solidary
debtors %as incurred in delay t%roug% t%e judicial or
e.trajudicial de&and u'on %i& by t%e creditor, t%e 'rovisions of
t%e 'receding 'aragra'% s%all a''ly. (11"1a)
Art. 1. A solidary debtor &ay, in actions filed by t%e creditor,
avail %i&self of all defenses )%ic% are derived fro& t%e nature
of t%e obligation and of t%ose )%ic% are 'ersonal to %i&, or
'ertain to %is o)n s%are. -it% res'ect to t%ose )%ic%
'ersonally belong to t%e ot%ers, %e &ay avail %i&self t%ereof
only as regards t%at 'art of t%e debt for )%ic% t%e latter are
res'onsible.
,5$=?O( 5. 0 Divisible and ?ndivisible Obligations

Art. 1#. =%e divisibility or indivisibility of t%e t%ings t%at are
t%e object of obligations in )%ic% t%ere is only one debtor and
only one creditor does not alter or &odify t%e 'rovisions of
$%a'ter of t%is =itle. (11"4)
Art. 1". A joint indivisible obligation gives rise to inde&nity
for da&ages fro& t%e ti&e anyone of t%e debtors does not
co&'ly )it% %is underta/ing. =%e debtors )%o &ay %ave been
ready to fulfill t%eir 'ro&ises s%all not contribute to t%e
inde&nity beyond t%e corres'onding 'ortion of t%e 'rice of t%e
t%ing or of t%e value of t%e service in )%ic% t%e obligation
consists. (1152)
Art. 15. Aor t%e 'ur'oses of t%e 'receding articles,
obligations to give definite t%ings and t%ose )%ic% are not
susce'tible of 'artial 'erfor&ance s%all be dee&ed to be
indivisible.
-%en t%e obligation %as for its object t%e e.ecution of a certain
nu&ber of days of )or/, t%e acco&'lis%&ent of )or/ by
&etrical units, or analogous t%ings )%ic% by t%eir nature are
susce'tible of 'artial 'erfor&ance, it s%all be divisible.
@o)ever, even t%oug% t%e object or service &ay be '%ysically
divisible, an obligation is indivisible if so 'rovided by la) or
intended by t%e 'arties.
?n obligations not to do, divisibility or indivisibility s%all be
deter&ined by t%e c%aracter of t%e 'restation in eac% 'articular
case.
". As to t%e 7resence of an Accessory Enderta/ing in $ase of
<reac%)
H-it% a 'enal clause9 Distinguis% fro& li*uidated da&ages
,5$=?O( 6. 0 Obligations )it% a 7enal $lause

Art. 16. ?n obligations )it% a 'enal clause, t%e 'enalty s%all
substitute t%e inde&nity for da&ages and t%e 'ay&ent of
interests in case of nonco&'liance, if t%ere is no sti'ulation to
t%e contrary. (evert%eless, da&ages s%all be 'aid if t%e obligor
refuses to 'ay t%e 'enalty or is guilty of fraud in t%e fulfill&ent
of t%e obligation.
=%e 'enalty &ay be enforced only )%en it is de&andable in
accordance )it% t%e 'rovisions of t%is $ode. (115a)
Art. 11. =%e debtor cannot e.e&'t %i&self fro& t%e
'erfor&ance of t%e obligation by 'aying t%e 'enalty, save in
t%e case )%ere t%is rig%t %as been e.'ressly reserved for %i&.
(eit%er can t%e creditor de&and t%e fulfill&ent of t%e obligation
and t%e satisfaction of t%e 'enalty at t%e sa&e ti&e, unless t%is
rig%t %as been clearly granted %i&. @o)ever, if after t%e
creditor %as decided to re*uire t%e fulfill&ent of t%e obligation,
t%e 'erfor&ance t%ereof s%ould beco&e i&'ossible )it%out %is
fault, t%e 'enalty &ay be enforced. (115#a)
Art. 13. 7roof of actual da&ages suffered by t%e creditor is
not necessary in order t%at t%e 'enalty &ay be de&anded. (n)
Art. 14. =%e judge s%all e*uitably reduce t%e 'enalty )%en
t%e 'rinci'al obligation %as been 'artly or irregularly co&'lied
)it% by t%e debtor. 5ven if t%ere %as been no 'erfor&ance, t%e
'enalty &ay also be reduced by t%e courts if it is ini*uitous or
unconscionable. (115"a)
Art. 1#2. =%e nullity of t%e 'enal clause does not carry )it% it
t%at of t%e 'rinci'al obligation.
=%e nullity of t%e 'rinci'al obligation carries )it% it t%at of t%e
'enal clause.
5. <reac% of Obligations
Art. 1112. =%ose )%o in t%e 'erfor&ance of t%eir obligations
are guilty of fraud, negligence, or delay, and t%ose )%o in any
&anner contravene t%e tenor t%ereof, are liable for da&ages.
Fanner of <reac%
1. Araud
Art. 1111. Bes'onsibility arising fro& fraud is de&andable in all
obligations. Any )aiver of an action for future fraud is void.
Art. 1##3. =%ere is fraud )%en, t%roug% insidious )ords or
&ac%inations of one of t%e contracting 'arties, t%e ot%er is
induced to enter into a contract )%ic%, )it%out t%e&, %e )ould
not %ave agreed to.
Art. 1#"". ?n order t%at fraud &ay &a/e a contract voidable, it
s%ould be serious and s%ould not %ave been e&'loyed by bot%
contracting 'arties.
. (egligence
Art. 1111. Bes'onsibility arising fro& fraud is de&andable in all
obligations. Any )aiver of an action for future fraud is void.
Art. 111. Bes'onsibility arising fro& negligence in t%e
'erfor&ance of every /ind of obligation is also de&andable,
but suc% liability &ay be regulated by t%e courts, according to
t%e circu&stances. (112#)
Art. 111#. =%e fault or negligence of t%e obligor consists in t%e
o&ission of t%at diligence )%ic% is re*uired by t%e nature of t%e
obligation and corres'onds )it% t%e circu&stances of t%e
'ersons, of t%e ti&e and of t%e 'lace. -%en negligence s%o)s
bad fait%, t%e 'rovisions of Articles 1111 and 21, 'aragra'%
, s%all a''ly.
?f t%e la) or contract does not state t%e diligence )%ic% is to be
observed in t%e 'erfor&ance, t%at )%ic% is e.'ected of a good
fat%er of a fa&ily s%all be re*uired.
#. Delay
Art. 1164. =%ose obliged to deliver or to do so&et%ing incur in
delay fro& t%e ti&e t%e obligee judicially or e.trajudicially
de&ands fro& t%e& t%e fulfill&ent of t%eir obligation.
@o)ever, t%e de&and by t%e creditor s%all not be necessary in
order t%at delay &ay e.ist:
(1) -%en t%e obligation or t%e la) e.'ressly so
declare9 or
() -%en fro& t%e nature and t%e circu&stances of
t%e obligation it a''ears t%at t%e designation of t%e
ti&e )%en t%e t%ing is to be delivered or t%e service is
to be rendered )as a controlling &otive for t%e
establis%&ent of t%e contract9 or
(#) -%en de&and )ould be useless, as )%en t%e
obligor %as rendered it beyond %is 'o)er to 'erfor&.
?n reci'rocal obligations, neit%er 'arty incurs in delay if t%e
ot%er does not co&'ly or is not ready to co&'ly in a 'ro'er
&anner )it% )%at is incu&bent u'on %i&. Aro& t%e &o&ent
one of t%e 'arties fulfills %is obligation, delay by t%e ot%er
begins.
Art. 1136. 5very 'artner is a debtor of t%e 'artners%i' for
)%atever %e &ay %ave 'ro&ised to contribute t%ereto.
@e s%all also be bound for )arranty in case of eviction )it%
regard to s'ecific and deter&inate t%ings )%ic% %e &ay %ave
contributed to t%e 'artners%i', in t%e sa&e cases and in t%e
sa&e &anner as t%e vendor is bound )it% res'ect to t%e
vendee. @e s%all also be liable for t%e fruits t%ereof fro& t%e
ti&e t%ey s%ould %ave been delivered, )it%out t%e need of any
de&and.
Art. 1133. A 'artner )%o %as underta/en to contribute a su& of
&oney and fails to do so beco&es a debtor for t%e interest and
da&ages fro& t%e ti&e %e s%ould %ave co&'lied )it% %is
obligation.
=%e sa&e rule a''lies to any a&ount %e &ay %ave ta/en fro&
t%e 'artners%i' coffers, and %is liability s%all begin fro& t%e
ti&e %e converted t%e a&ount to %is o)n use.
Art. 1346. =%e agent o)es interest on t%e su&s %e %as a''lied
to %is o)n use fro& t%e day on )%ic% %e did so, and on t%ose
)%ic% %e still o)es after t%e e.tinguis%&ent of t%e agency.
Art. 14". =%e bailee is liable for t%e loss of t%e t%ing, even if it
s%ould be t%roug% a fortuitous event:
(1) ?f %e devotes t%e t%ing to any 'ur'ose different
fro& t%at for )%ic% it %as been loaned9
() ?f %e /ee's it longer t%an t%e 'eriod sti'ulated, or
after t%e acco&'lis%&ent of t%e use for )%ic%
t%e commodatum %as been constituted9
(#) ?f t%e t%ing loaned %as been delivered )it%
a''raisal of its value, unless t%ere is a sti'ulation
e.e&'tion t%e bailee fro& res'onsibility in case of a
fortuitous event9
(") ?f %e lends or leases t%e t%ing to a t%ird 'erson,
)%o is not a &e&ber of %is %ouse%old9
(5) ?f, being able to save eit%er t%e t%ing borro)ed or %is o)n
t%ing, %e c%ose to save t%e latter. (11""a and 11"5)
".Any ot%er Fanner of $ontravention
5.cuse for (on07erfor&ance
1. Aortuitous 5vent
Art. 111". 5.ce't in cases e.'ressly s'ecified by t%e la), or
)%en it is ot%er)ise declared by sti'ulation, or )%en t%e nature
of t%e obligation re*uires t%e assu&'tion of ris/, no 'erson
s%all be res'onsible for t%ose events )%ic% could not be
foreseen, or )%ic%, t%oug% foreseen, )ere inevitable.
Art. 55. A 'ossessor in good fait% s%all not be liable for t%e
deterioration or loss of t%e t%ing 'ossessed, e.ce't in cases in
)%ic% it is 'roved t%at %e %as acted )it% fraudulent intent or
negligence, after t%e judicial su&&ons.
A 'ossessor in bad fait% s%all be liable for deterioration or loss
in every case, even if caused by a fortuitous event.
effected t%e delivery.
fortuitous event:
o)ner9
)%o delivered t%e t%ing, until it is recovered.
.Act of $reditor
A. Be&edies for <reac% of Obligations
Art. 1166. =%e obligation to give a deter&inate t%ing includes
t%at of delivering all its accessions and accessories, even
t%oug% t%ey &ay not %ave been &entioned. (1241a)
Art. 1161. ?f a 'erson obliged to do so&et%ing fails to do it, t%e
sa&e s%all be e.ecuted at %is cost.
=%is sa&e rule s%all be observed if %e does it in contravention
of t%e tenor of t%e obligation. Aurt%er&ore, it &ay be decreed
t%at )%at %as been 'oorly done be undone. (1243)
Art. 1163. -%en t%e obligation consists in not doing, and t%e
obligor does )%at %as been forbidden %i&, it s%all also be
undone at %is e.'ense. (1244a)
Art. 1111. =%e creditors, after %aving 'ursued t%e 'ro'erty in
'ossession of t%e debtor to satisfy t%eir clai&s, &ay e.ercise
all t%e rig%ts and bring all t%e actions of t%e latter for t%e sa&e
'ur'ose, save t%ose )%ic% are in%erent in %is 'erson9 t%ey
&ay also i&'ugn t%e acts )%ic% t%e debtor &ay %ave done to
defraud t%e&. (1111)
Art. 1113. ,ubject to t%e la)s, all rig%ts ac*uired in virtue of an
obligation are trans&issible, if t%ere %as been no sti'ulation to
t%e contrary.
Art. 1141. =%e 'o)er to rescind obligations is i&'lied in
reci'rocal ones, in case one of t%e obligors s%ould not co&'ly
)it% )%at is incu&bent u'on %i&.
=%e injured 'arty &ay c%oose bet)een t%e fulfill&ent and t%e
rescission of t%e obligation, )it% t%e 'ay&ent of da&ages in
eit%er case. @e &ay also see/ rescission, even after %e %as
c%osen fulfill&ent, if t%e latter s%ould beco&e i&'ossible.
=%e court s%all decree t%e rescission clai&ed, unless t%ere be
just cause aut%ori+ing t%e fi.ing of a 'eriod.
=%is is understood to be )it%out 'rejudice to t%e rig%ts of t%ird
'ersons )%o %ave ac*uired t%e t%ing, in accordance )it%
Articles 1#35 and 1#33 and t%e Fortgage :a). (11")
Art. 114. ?n case bot% 'arties %ave co&&itted a breac% of t%e
obligation, t%e liability of t%e first infractor s%all be e*uitably
te&'ered by t%e courts. ?f it cannot be deter&ined )%ic% of t%e
'arties first violated t%e contract, t%e sa&e s%all be dee&ed
e.tinguis%ed, and eac% s%all bear %is o)n da&ages.
Art. #6. =%e debtor is liable )it% all %is 'ro'erty, 'resent and
future, for t%e fulfill&ent of %is obligations, subject to t%e
e.e&'tions 'rovided by la).
Art. #2. (eit%er t%e rig%t to receive legal su''ort nor any
&oney or 'ro'erty obtained as suc% su''ort or any 'ension or
gratuity fro& t%e govern&ent is subject to attac%&ent or
e.ecution.
Art. 1123. =%e laborerDs )ages s%all not be subject to
e.ecution or attac%&ent, e.ce't for debts incurred for food,
s%elter, clot%ing and &edical attendance.
Art. 15#. (fa&ily $ode) =%e fa&ily %o&e is dee&ed constituted
on a %ouse and lot fro& t%e ti&e it is occu'ied as a fa&ily
residence. Aro& t%e ti&e of its constitution and so long as any
of its beneficiaries actually resides t%erein, t%e fa&ily %o&e
continues to be suc% and is e.e&'t fro& e.ecution, forced sale
or attac%&ent e.ce't as %ereinafter 'rovided and to t%e e.tent
of t%e value allo)ed by la). (#a)
Art. 155. =%e fa&ily %o&e s%all be e.e&'t fro& e.ecution,
forced sale or attac%&ent e.ce't:
(1) Aor non'ay&ent of ta.es9
() Aor debts incurred 'rior to t%e constitution of t%e fa&ily
%o&e9
(#) Aor debts secured by &ortgages on t%e 're&ises before or
after suc% constitution9 and
(") Aor debts due to laborers, &ec%anics, arc%itects, builders,
&aterial&en and ot%ers )%o %ave rendered service or
furnis%ed &aterial for t%e construction of t%e building.
Bule #4 ,ec. 1#, Bules of $ourt
7ro'erty e.e&'t fro& e.ecution.
5.ce't as ot%er)ise e.'ressly 'rovided by la), t%e follo)ing
'ro'erty, and no ot%er, s%all be e.e&'t fro& e.ecution:
(a) =%e judg&ent obligorDs fa&ily %o&e as 'rovided by la), or
t%e %o&estead in )%ic% %e resides, and land necessarily used
in connection t%ere)it%9
(b) Ordinary tools and i&'le&ents 'ersonally used by %i& in %s
trade, e&'loy&ent, or liveli%ood9
(c) =%ree %orses, or t%ree co)s, or t%ree carabaos, or ot%er
beasts of burden suc% as t%e judg&ent obligor &ay select
necessarily used by %i& in %is ordinary occu'ation9
(d) @is necessary clot%ing and articles for ordinary 'ersonal
use, e.cluding je)elry9
(e) @ouse%old furniture and utensils necessary for
%ouse/ee'ing, and used for t%at 'ur'ose by t%e judg&ent
obligor and %is fa&ily, suc% as t%e judg&ent obligor &ay
select, of a value not e.ceeding one %undred t%ousand 'esos9
(f) 7rovisions for individual or fa&ily use sufficient for four
&ont%s9
(g) =%e 'rofessional libraries and e*ui'&ent of judges,
la)yers, '%ysicians, '%ar&acists, dentists, engineers,
surveyors, clergy&en, teac%ers, and ot%er 'rofessionals, not
e.ceeding t%ree %undred t%ousand 'esos in value9
(%) One fis%ing boat and accessories not e.ceeding t%e total
value of one %undred t%ousand 'esos o)ned by a fis%er&an
and by t%e la)ful use of )%ic% %e earns %is liveli%ood9
(i) ,o &uc% of t%e salaries, )ages, or earnings of t%e judg&ent
obligor of %is 'ersonal services )it%in t%e four &ont%s
'receding t%e levy as are necessary for t%e su''ort of %is
fa&ily9
(j) :ettered gravestones9
(/) Fonies benefits, 'rivileges, or annuities accruing or in any
&anner gro)ing out of any life insurance9
(l) =%e rig%t to receive legal su''ort, or &oney or 'ro'erty
obtained as suc% su''ort, or any 'ension or gratuity fro& t%e
Govern&ent9
(&) 7ro'erties s'ecially e.e&'t by la).
<ut no article or s'ecies of 'ro'erty &entioned in %is section
s%all be e.e&'t fro& e.ecutio issued u'on a judg&ent
recovered for its 'rice or u'on a judg&ent of foreclosure of a
&ortgage t%ereon.
1. 5.tra0judicial Be&edies
a. 5.'ressly ranted by :a)
Art. 1136. 5very 'artner is a debtor of t%e 'artners%i' for
)%atever %e &ay %ave 'ro&ised to contribute t%ereto.
@e s%all also be bound for )arranty in case of eviction )it%
regard to s'ecific and deter&inate t%ings )%ic% %e &ay %ave
contributed to t%e 'artners%i', in t%e sa&e cases and in t%e
sa&e &anner as t%e vendor is bound )it% res'ect to t%e
vendee. @e s%all also be liable for t%e fruits t%ereof fro& t%e
ti&e t%ey s%ould %ave been delivered, )it%out t%e need of any
de&and. (1631a)
Art. 1133. A 'artner )%o %as underta/en to contribute a su& of
&oney and fails to do so beco&es a debtor for t%e interest and
da&ages fro& t%e ti&e %e s%ould %ave co&'lied )it% %is
obligation.
=%e sa&e rule a''lies to any a&ount %e &ay %ave ta/en fro&
t%e 'artners%i' coffers, and %is liability s%all begin fro& t%e
ti&e %e converted t%e a&ount to %is o)n use.
Art. 156. ,ubject to t%e 'rovisions of t%is =itle,
not)it%standing t%at t%e o)ners%i' in t%e goods &ay %ave
'assed to t%e buyer, t%e un'aid seller of goods, as suc%, %as:
(1) A lien on t%e goods or rig%t to retain t%e& for t%e
'rice )%ile %e is in 'ossession of t%e&9
() ?n case of t%e insolvency of t%e buyer, a rig%t of
sto''ing t%e goods in transitu after %e %as 'arted )it%
t%e 'ossession of t%e&9
(#) A rig%t of resale as li&ited by t%is =itle9
(") A rig%t to rescind t%e sale as li/e)ise li&ited by
t%is =itle.
-%ere t%e o)ners%i' in t%e goods %as not 'assed to t%e
buyer, t%e un'aid seller %as, in addition to %is ot%er re&edies a
rig%t of )it%%olding delivery si&ilar to and coe.tensive )it% %is
rig%ts of lien and sto''age in transitu )%ere t%e o)ners%i' %as
'assed to t%e buyer.
. Gudicial Be&edies
a.7rinci'al Be&edies
Articles 1#35 and 1#33 and t%e Fortgage :a).
b. ,ubsidiary Be&edies
Art. 1#32. $ontracts validly agreed u'on &ay be rescinded in
t%e cases establis%ed by la).
defraud t%e&.
c. Ancillary Be&edies 6 Bules Of $ourt
Fodes Of 5.tinguis%&ent of Obligations
Art. 1#1. Obligations are e.tinguis%ed:
(1) <y 'ay&ent or 'erfor&ance:
() <y t%e loss of t%e t%ing due:
(#) <y t%e condonation or re&ission of t%e debt9
(") <y t%e confusion or &erger of t%e rig%ts of creditor
and debtor9
(5) <y co&'ensation9
(6) <y novation.
Ot%er causes of e.tinguis%&ent of obligations, suc% as
annul&ent, rescission, fulfill&ent of a resolutory condition, and
'rescri'tion, are governed else)%ere in t%is $ode.
1. 7ay&ent or 7erfor&ance
Art. 1#. 7ay&ent &eans not only t%e delivery of &oney but
also t%e 'erfor&ance, in any ot%er &anner, of an obligation. (n)
Art. 1##. A debt s%all not be understood to %ave been 'aid
unless t%e t%ing or service in )%ic% t%e obligation consists %as
been co&'letely delivered or rendered, as t%e case &ay be.
(1151)
Art. 1#". ?f t%e obligation %as been substantially 'erfor&ed in
good fait%, t%e obligor &ay recover as t%oug% t%ere %ad been a
strict and co&'lete fulfill&ent, less da&ages suffered by t%e
obligee. (n)
Art. 1#5. -%en t%e obligee acce'ts t%e 'erfor&ance, /no)ing
its inco&'leteness or irregularity, and )it%out e.'ressing any
'rotest or objection, t%e obligation is dee&ed fully co&'lied
)it%.
Art. 1#6. =%e creditor is not bound to acce't 'ay&ent or
'erfor&ance by a t%ird 'erson )%o %as no interest in t%e
fulfill&ent of t%e obligation, unless t%ere is a sti'ulation to t%e
contrary.
-%oever 'ays for anot%er &ay de&and fro& t%e debtor )%at
%e %as 'aid, e.ce't t%at if %e 'aid )it%out t%e /no)ledge or
against t%e )ill of t%e debtor, %e can recover only insofar as t%e
'ay&ent %as been beneficial to t%e debtor. (1153a)
Art. 1#1. -%oever 'ays on be%alf of t%e debtor )it%out t%e
/no)ledge or against t%e )ill of t%e latter, cannot co&'el t%e
creditor to subrogate %i& in %is rig%ts, suc% as t%ose arising
fro& a &ortgage, guaranty, or 'enalty. (1154a)
Art. 1#3. 7ay&ent &ade by a t%ird 'erson )%o does not
intend to be rei&bursed by t%e debtor is dee&ed to be a
donation, )%ic% re*uires t%e debtorDs consent. <ut t%e 'ay&ent
is in any case valid as to t%e creditor )%o %as acce'ted it. (n)
Art. 1#4. ?n obligations to give, 'ay&ent &ade by one )%o
does not %ave t%e free dis'osal of t%e t%ing due and ca'acity
to alienate it s%all not be valid, )it%out 'rejudice to t%e
'rovisions of Article 1"1 under t%e =itle on INatural
#bligations.I (1162a)
Art. 1"2. 7ay&ent s%all be &ade to t%e 'erson in )%ose favor
t%e obligation %as been constituted, or %is successor in
interest, or any 'erson aut%ori+ed to receive it. (116a)
Art. 1"1. 7ay&ent to a 'erson )%o is inca'acitated to
ad&inister %is 'ro'erty s%all be valid if %e %as /e't t%e t%ing
delivered, or insofar as t%e 'ay&ent %as been beneficial to
%i&.
7ay&ent &ade to a t%ird 'erson s%all also be valid insofar as it
%as redounded to t%e benefit of t%e creditor. ,uc% benefit to t%e
creditor need not be 'roved in t%e follo)ing cases:
(1) ?f after t%e 'ay&ent, t%e t%ird 'erson ac*uires t%e
creditorDs rig%ts9
() ?f t%e creditor ratifies t%e 'ay&ent to t%e t%ird
'erson9
(#) ?f by t%e creditorDs conduct, t%e debtor %as been
led to believe t%at t%e t%ird 'erson %ad aut%ority to
receive t%e 'ay&ent. (116#a)
Art. 1". 7ay&ent &ade in good fait% to any 'erson
in 'ossession of t%e credit s%all release t%e debtor.
(116")
Art. 1"#. 7ay&ent &ade to t%e creditor by t%e debtor after t%e
latter %as been judicially ordered to retain t%e debt s%all not be
valid. (1165)
Art. 1"". =%e debtor of a t%ing cannot co&'el t%e creditor to
receive a different one, alt%oug% t%e latter &ay be of t%e sa&e
value as, or &ore valuable t%an t%at )%ic% is due.
?n obligations to do or not to do, an act or forbearance cannot
be substituted by anot%er act or forbearance against t%e
obligeeDs )ill.
Art. 1"6. -%en t%e obligation consists in t%e delivery of an
indeter&inate or generic t%ing, )%ose *uality and
circu&stances %ave not been stated, t%e creditor cannot
de&and a t%ing of su'erior *uality. (eit%er can t%e debtor
deliver a t%ing of inferior *uality. =%e 'ur'ose of t%e obligation
and ot%er circu&stances s%all be ta/en into consideration.
Art. 1"1. Enless it is ot%er)ise sti'ulated, t%e e.trajudicial
e.'enses re*uired by t%e 'ay&ent s%all be for t%e account of
t%e debtor. -it% regard to judicial costs, t%e Bules of $ourt
s%all govern. (1163a)
Art. 1"3. Enless t%ere is an e.'ress sti'ulation to t%at effect,
t%e creditor cannot be co&'elled 'artially to receive t%e
'restations in )%ic% t%e obligation consists. (eit%er &ay t%e
debtor be re*uired to &a/e 'artial 'ay&ents.
@o)ever, )%en t%e debt is in 'art li*uidated and in 'art
unli*uidated, t%e creditor &ay de&and and t%e debtor &ay
effect t%e 'ay&ent of t%e for&er )it%out )aiting for t%e
li*uidation of t%e latter. (1164a)
Art. 1"4. =%e 'ay&ent of debts in &oney s%all be &ade in t%e
currency sti'ulated, and if it is not 'ossible to deliver suc%
currency, t%en in t%e currency )%ic% is legal tender in t%e
7%ili''ines.
=%e delivery of 'ro&issory notes 'ayable to order, or bills of
e.c%ange or ot%er &ercantile docu&ents s%all 'roduce t%e
effect of 'ay&ent only )%en t%ey %ave been cas%ed, or )%en
t%roug% t%e fault of t%e creditor t%ey %ave been i&'aired.
?n t%e &eanti&e, t%e action derived fro& t%e original obligation
s%all be %eld in t%e abeyance. (1112)
Art. 152. ?n case an e.traordinary inflation or deflation of t%e
currency sti'ulated s%ould su'ervene, t%e value of t%e
currency at t%e ti&e of t%e establis%&ent of t%e obligation s%all
be t%e basis of 'ay&ent, unless t%ere is an agree&ent to t%e
contrary. (n)
Art. 151. 7ay&ent s%all be &ade in t%e 'lace designated in
t%e obligation.
=%ere being no e.'ress sti'ulation and if t%e underta/ing is to
deliver a deter&inate t%ing, t%e 'ay&ent s%all be &ade
)%erever t%e t%ing &ig%t be at t%e &o&ent t%e obligation )as
constituted.
?n any ot%er case t%e 'lace of 'ay&ent s%all be t%e do&icile of
t%e debtor.
?f t%e debtor c%anges %is do&icile in bad fait% or after %e %as
incurred in delay, t%e additional e.'enses s%all be borne by
%i&
=%ese 'rovisions are )it%out 'rejudice to venue under t%e
Bules of $ourt.
Art. 1#2. ?t is 'resu&ed t%at t%ere is legal subrogation:
(1) -%en a creditor 'ays anot%er creditor )%o is
'referred, even )it%out t%e debtorDs /no)ledge9
() -%en a t%ird 'erson, not interested in t%e
obligation, 'ays )it% t%e e.'ress or tacit a''roval of
t%e debtor9
(#) -%en, even )it%out t%e /no)ledge of t%e debtor, a 'erson
interested in t%e fulfill&ent of t%e obligation 'ays, )it%out
'rejudice to t%e effects of confusion as to t%e latterDs s%are.
BA 313#, re'ealing BA 54: JA( A$= B575A:?(G B57E<:?$
A$= (EF<5B5D A?85 @E(DB5D =-5(=K0(?(5 A,
AF5(D5D, 5(=?=:5D IA( A$= =O A,,EB5 =@5 E(?AOBF
8A:E5 OA 7@?:?77?(5 $O?( A(D $EBB5($K.I
<e it enacted by t%e ,enate and @ouse of Be'resentatives of
t%e 7%ili''ines in $ongress asse&bled::
Setion 1. All &onetary obligations s%all be settled in t%e
7%ili''ine currency )%ic% is legal tender in t%e 7%ili''ines.
@o)ever, t%e 'arties &ay agree t%at t%e obligation or
transaction s%all be settled in any ot%er currency at t%e ti&e of
'ay&ent.
Se. 2. Be'ublic Act (u&bered Aive @undred =)enty0(ine
(B.A. (o. 54), as a&ended entitled IAn Act to Assu&e t%e
Enifor& 8alue of 7%ili''ine $oin and $urrency,I is %ereby
re'ealed.
Se. !. =%is Act s%all ta/e effect fifteen (15) days after its
'ublication in t%e Official Ga+ette or in t)o () national
ne)s'a'ers of general circulation. =%e <ang/o ,entral ng
7ili'inas and t%e De'art&ent of Ainance s%all conduct an
intensive infor&ation ca&'aign on t%e effect of t%is Act.
PRESI"ENTIAL "ECREE No. #2
AF5(D?(G B57E<:?$ A$= (EF<5B5D =-O @E(DB5D
A(D ,?>=K0A?85, 5(=?=:5D I=@5 $5(=BA: <A(! A$=I
Setion !1. ,ection fifty0four of t%e sa&e Act is %ereby
a&ended to read as follo)s:
I,ec. 5". :egal tender 'o)er. All notes and coins issued by t%e
$entral <an/ s%all fully guaranteed by t%e Govern&ent of t%e
Be'ublic of t%e 7%ili''ines and s%all be legal tender in t%e
7%ili''ines for all debts, bot% 'ublic and 'rivate: 7rovided,
%o)ever, =%at coins s%all be legal tender in a&ounts not
e.ceeding fifty 'esos for deno&inations fro& ten centavos to
one 'eso, and in a&ounts not e.ceeding t)enty 'esos for
deno&inations of five centavos or less.I
Setion !2. ,ection si.ty0t%ree of t%e sa&e Act is %ereby
a&ended to read as follo)s:
I,ec. 6#. :egal c%aracter. $%ec/s re'resenting de'osit &oney
do not %ave legal tender 'o)er and t%eir acce'tance in t%e
'ay&ent of debts, bot% 'ublic and 'rivate, is at t%e o'tion of
t%e creditor: 7rovided, %o)ever, =%at a c%ec/ )%ic% %as been
cleared and credited to t%e account of t%e creditor s%all be
e*uivalent to a delivery to t%e creditor of cas% in an a&ount
e*ual to t%e a&ount credited to %is account.I
,'ecial Aor&s of 7ay&ent
a. Dation in 7ay&ent
Art. 1"5. Dation in 'ay&ent, )%ereby 'ro'erty is alienated to
t%e creditor in satisfaction of a debt in &oney, s%all be
governed by t%e la) of sales. (n)
b. A''lication of 7ay&ent
Art. 15. @e )%o %as various debts of t%e sa&e /ind in favor
of one and t%e sa&e creditor, &ay declare at t%e ti&e of
&a/ing t%e 'ay&ent, to )%ic% of t%e& t%e sa&e &ust be
a''lied. Enless t%e 'arties so sti'ulate, or )%en t%e a''lication
of 'ay&ent is &ade by t%e 'arty for )%ose benefit t%e ter& %as
been constituted, a''lication s%all not be &ade as to debts
)%ic% are not yet due.
?f t%e debtor acce'ts fro& t%e creditor a recei't in )%ic% an
a''lication of t%e 'ay&ent is &ade, t%e for&er cannot
co&'lain of t%e sa&e, unless t%ere is a cause for invalidating
t%e contract. (111a)
Art. 15#. ?f t%e debt 'roduces interest, 'ay&ent of t%e
'rinci'al s%all not be dee&ed to %ave been &ade until t%e
interests %ave been covered. (111#)
Art. 15". -%en t%e 'ay&ent cannot be a''lied in accordance
)it% t%e 'receding rules, or if a''lication can not be inferred
fro& ot%er circu&stances, t%e debt )%ic% is &ost onerous to
t%e debtor, a&ong t%ose due, s%all be dee&ed to %ave been
satisfied.
?f t%e debts due are of t%e sa&e nature and burden, t%e
'ay&ent s%all be a''lied to all of t%e& 'ro'ortionately.
Art. 1"3. Enless t%ere is an e.'ress sti'ulation to t%at effect,
t%e creditor cannot be co&'elled 'artially to receive t%e
'restations in )%ic% t%e obligation consists. (eit%er &ay t%e
debtor be re*uired to &a/e 'artial 'ay&ents.
@o)ever, )%en t%e debt is in 'art li*uidated and in 'art
unli*uidated, t%e creditor &ay de&and and t%e debtor &ay
effect t%e 'ay&ent of t%e for&er )it%out )aiting for t%e
li*uidation of t%e latter.
c. 7ay&ent by $ession or assign&ent
Art. 155. =%e debtor &ay cede or assign %is 'ro'erty to %is
creditors in 'ay&ent of %is debts. =%is cession, unless t%ere is
sti'ulation to t%e contrary, s%all only release t%e debtor fro&
res'onsibility for t%e net 'roceeds of t%e t%ing assigned. =%e
agree&ents )%ic%, on t%e effect of t%e cession, are &ade
bet)een t%e debtor and %is creditors s%all be governed by
s'ecial la)s.
d.=ender of 7ay&ent or $onsignation
Art. 156. ?f t%e creditor to )%o& tender of 'ay&ent %as been
&ade refuses )it%out just cause to acce't it, t%e debtor s%all
be released fro& res'onsibility by t%e consignation of t%e t%ing
or su& due.
$onsignation alone s%all 'roduce t%e sa&e effect in t%e
follo)ing cases:
(1) -%en t%e creditor is absent or un/no)n, or does
not a''ear at t%e 'lace of 'ay&ent9
() -%en %e is inca'acitated to receive t%e 'ay&ent
at t%e ti&e it is due9
(#) -%en, )it%out just cause, %e refuses to give a
recei't9
(") -%en t)o or &ore 'ersons clai& t%e sa&e rig%t to
collect9
(5) -%en t%e title of t%e obligation %as been lost.
(1116a)
Art. 151. ?n order t%at t%e consignation of t%e t%ing due &ay
release t%e obligor, it &ust first be announced to t%e 'ersons
interested in t%e fulfill&ent of t%e obligation.
=%e consignation s%all be ineffectual if it is not &ade strictly in
consonance )it% t%e 'rovisions )%ic% regulate 'ay&ent.
Art. 153. $onsignation s%all be &ade by de'ositing t%e t%ings
due at t%e dis'osal of judicial aut%ority, before )%o& t%e
tender of 'ay&ent s%all be 'roved, in a 'ro'er case, and t%e
announce&ent of t%e consignation in ot%er cases.
=%e consignation %aving been &ade, t%e interested 'arties
s%all also be notified t%ereof. (1113)
Art. 154. =%e e.'enses of consignation, )%en 'ro'erly &ade,
s%all be c%arged against t%e creditor. (1113)
Art. 162. Once t%e consignation %as been duly &ade, t%e
debtor &ay as/ t%e judge to order t%e cancellation of t%e
obligation.
<efore t%e creditor %as acce'ted t%e consignation, or before a
judicial declaration t%at t%e consignation %as been 'ro'erly
&ade, t%e debtor &ay )it%dra) t%e t%ing or t%e su& de'osited,
allo)ing t%e obligation to re&ain in force. (1132)
Art. 161. ?f, t%e consignation %aving been &ade, t%e creditor
s%ould aut%ori+e t%e debtor to )it%dra) t%e sa&e, %e s%all lose
every 'reference )%ic% %e &ay %ave over t%e t%ing. =%e co0
debtors, guarantors and sureties s%all be released.
. :oss of t%e =%ing Due or ?&'ossibility of 7erfor&ance
,5$=?O( . 0 :oss of t%e =%ing Due

Art. 16. An obligation )%ic% consists in t%e delivery of a
deter&inate t%ing s%all be e.tinguis%ed if it s%ould be lost or
destroyed )it%out t%e fault of t%e debtor, and before %e %as
incurred in delay.
-%en by la) or sti'ulation, t%e obligor is liable even for
fortuitous events, t%e loss of t%e t%ing does not e.tinguis% t%e
obligation, and %e s%all be res'onsible for da&ages. =%e sa&e
rule a''lies )%en t%e nature of t%e obligation re*uires t%e
assu&'tion of ris/. (113a)
Art. 16#. ?n an obligation to deliver a generic t%ing, t%e loss or
destruction of anyt%ing of t%e sa&e /ind does not e.tinguis%
t%e obligation. (n)
Art. 16". =%e courts s%all deter&ine )%et%er, under t%e
circu&stances, t%e 'artial loss of t%e object of t%e obligation is
so i&'ortant as to e.tinguis% t%e obligation. (n)
Art. 165. -%enever t%e t%ing is lost in t%e 'ossession of t%e
debtor, it s%all be 'resu&ed t%at t%e loss )as due to %is fault,
unless t%ere is 'roof to t%e contrary, and )it%out 'rejudice to
t%e 'rovisions of article 1165. =%is 'resu&'tion does not a''ly
in case of eart%*ua/e, flood, stor&, or ot%er natural cala&ity.
Art. 166. =%e debtor in obligations to do s%all also be
released )%en t%e 'restation beco&es legally or '%ysically
i&'ossible )it%out t%e fault of t%e obligor. (113"a)
Art. 161. -%en t%e service %as beco&e so difficult as to be
&anifestly beyond t%e conte&'lation of t%e 'arties, t%e obligor
&ay also be released t%erefro&, in )%ole or in 'art. (n)
Art. 163. -%en t%e debt of a t%ing certain and deter&inate
'roceeds fro& a cri&inal offense, t%e debtor s%all not be
e.e&'ted fro& t%e 'ay&ent of its 'rice, )%atever &ay be t%e
cause for t%e loss, unless t%e t%ing %aving been offered by %i&
to t%e 'erson )%o s%ould receive it, t%e latter refused )it%out
justification to acce't it. (1135)
Art. 164. =%e obligation %aving been e.tinguis%ed by t%e loss
of t%e t%ing, t%e creditor s%all %ave all t%e rig%ts of action )%ic%
t%e debtor &ay %ave against t%ird 'ersons by reason of t%e
loss.
Art. 1134. -%en t%e conditions %ave been i&'osed )it% t%e
intention of sus'ending t%e efficacy of an obligation to give, t%e
follo)ing rules s%all be observed in case of t%e i&'rove&ent,
loss or deterioration of t%e t%ing during t%e 'endency of t%e
condition:
(1) ?f t%e t%ing is lost )it%out t%e fault of t%e debtor,
t%e obligation s%all be e.tinguis%ed9
() ?f t%e t%ing is lost t%roug% t%e fault of t%e debtor,
%e s%all be obliged to 'ay da&ages9 it is understood
t%at t%e t%ing is lost )%en it 'eris%es, or goes out of
co&&erce, or disa''ears in suc% a )ay t%at its
e.istence is un/no)n or it cannot be recovered9
(#) -%en t%e t%ing deteriorates )it%out t%e fault of t%e
debtor, t%e i&'air&ent is to be borne by t%e creditor9
(") ?f it deteriorates t%roug% t%e fault of t%e debtor, t%e
creditor &ay c%oose bet)een t%e rescission of t%e
obligation and its fulfill&ent, )it% inde&nity for
da&ages in eit%er case9
(5) ?f t%e t%ing is i&'roved by its nature, or by ti&e,
t%e i&'rove&ent s%all inure to t%e benefit of t%e
creditor9
(6) ?f it is i&'roved at t%e e.'ense of t%e debtor, %e s%all %ave
no ot%er rig%t t%an t%at granted to t%e usufructuary.
Art. 111". 5.ce't in cases e.'ressly s'ecified by t%e la), or
)%en it is ot%er)ise declared by sti'ulation, or )%en t%e nature
of t%e obligation re*uires t%e assu&'tion of ris/, no 'erson
s%all be res'onsible for t%ose events )%ic% could not be
foreseen, or )%ic%, t%oug% foreseen, )ere inevitable.
effected t%e delivery.
Art. 163. -%en t%e debt of a t%ing certain and deter&inate
'roceeds fro& a cri&inal offense, t%e debtor s%all not be
e.e&'ted fro& t%e 'ay&ent of its 'rice, )%atever &ay be t%e
cause for t%e loss, unless t%e t%ing %aving been offered by %i&
to t%e 'erson )%o s%ould receive it, t%e latter refused )it%out
justification to acce't it.
Art. 14". =%e bailee is liable for t%e loss of t%e t%ing, even if it
s%ould be t%roug% a fortuitous event:
(1) ?f %e devotes t%e t%ing to any 'ur'ose different
fro& t%at for )%ic% it %as been loaned9
() ?f %e /ee's it longer t%an t%e 'eriod sti'ulated, or
after t%e acco&'lis%&ent of t%e use for )%ic%
t%e commodatum %as been constituted9
(#) ?f t%e t%ing loaned %as been delivered )it%
a''raisal of its value, unless t%ere is a sti'ulation
e.e&'tion t%e bailee fro& res'onsibility in case of a
fortuitous event9
(") ?f %e lends or leases t%e t%ing to a t%ird 'erson,
)%o is not a &e&ber of %is %ouse%old9
(5) ?f, being able to save eit%er t%e t%ing borro)ed or %is o)n
t%ing, %e c%ose to save t%e latter.
Art. 1414. =%e de'ositary is liable for t%e loss of t%e t%ing
t%roug% a fortuitous event:
(1) ?f it is so sti'ulated9
() ?f %e uses t%e t%ing )it%out t%e de'ositorDs
'er&ission9
(#) ?f %e delays its return9
(") ?f %e allo)s ot%ers to use it, even t%oug% %e %i&self &ay
%ave been aut%ori+ed to use t%e sa&e.
fortuitous event:
o)ner9
)%o delivered t%e t%ing, until it is recovered. (1346a)
#. $ondonation or Be&ission of Debt
Art. 112. $ondonation or re&ission is essentially gratuitous,
and re*uires t%e acce'tance by t%e obligor. ?t &ay be &ade
e.'ressly or i&'liedly.
One and t%e ot%er /ind s%all be subject to t%e rules )%ic%
govern inofficious donations. 5.'ress condonation s%all,
furt%er&ore, co&'ly )it% t%e for&s of donation. (1131)
Art. 111. =%e delivery of a 'rivate docu&ent evidencing a
credit, &ade voluntarily by t%e creditor to t%e debtor, i&'lies
t%e renunciation of t%e action )%ic% t%e for&er %ad against t%e
latter.
?f in order to nullify t%is )aiver it s%ould be clai&ed to be
inofficious, t%e debtor and %is %eirs &ay u'%old it by 'roving
t%at t%e delivery of t%e docu&ent )as &ade in virtue of
'ay&ent of t%e debt. (1133)
Art. 11. -%enever t%e 'rivate docu&ent in )%ic% t%e debt
a''ears is found in t%e 'ossession of t%e debtor, it s%all be
'resu&ed t%at t%e creditor delivered it voluntarily, unless t%e
contrary is 'roved. (1134)
Art. 11#. =%e renunciation of t%e 'rinci'al debt s%all
e.tinguis% t%e accessory obligations9 but t%e )aiver of t%e
latter s%all leave t%e for&er in force. (1142)
Art. 11". ?t is 'resu&ed t%at t%e accessory obligation of
'ledge %as been re&itted )%en t%e t%ing 'ledged, after its
delivery to t%e creditor, is found in t%e 'ossession of t%e debtor,
or of a t%ird 'erson )%o o)ns t%e t%ing.
Art. 1"3. =%e donation of a &ovable &ay be &ade orally or in
)riting.
An oral donation re*uires t%e si&ultaneous delivery of t%e t%ing
or of t%e docu&ent re'resenting t%e rig%t donated.
?f t%e value of t%e 'ersonal 'ro'erty donated e.ceeds five
t%ousand 'esos, t%e donation and t%e acce'tance s%all be
&ade in )riting, ot%er)ise, t%e donation s%all be void. (6#a)
Art. 1"4. ?n order t%at t%e donation of an i&&ovable &ay be
valid, it &ust be &ade in a 'ublic docu&ent, s'ecifying t%erein
t%e 'ro'erty donated and t%e value of t%e c%arges )%ic% t%e
donee &ust satisfy.
=%e acce'tance &ay be &ade in t%e sa&e deed of donation or
in a se'arate 'ublic docu&ent, but it s%all not ta/e effect
unless it is done during t%e lifeti&e of t%e donor.
?f t%e acce'tance is &ade in a se'arate instru&ent, t%e donor
s%all be notified t%ereof in an aut%entic for&, and t%is ste' s%all
be noted in bot% instru&ents.
". $onfusion or Ferger of Big%ts
,5$=?O( ". 0 $onfusion or Ferger of Big%ts

Art. 115. =%e obligation is e.tinguis%ed fro& t%e ti&e t%e
c%aracters of creditor and debtor are &erged in t%e sa&e
'erson. (114a)
Art. 116. Ferger )%ic% ta/es 'lace in t%e 'erson of t%e
'rinci'al debtor or creditor benefits t%e guarantors. $onfusion
)%ic% ta/es 'lace in t%e 'erson of any of t%e latter does not
e.tinguis% t%e obligation. (114#)
Art. 111. $onfusion does not e.tinguis% a joint obligation
e.ce't as regards t%e s%are corres'onding to t%e creditor or
debtor in )%o& t%e t)o c%aracters concur.
s%are in t%e obligation corres'onding to t%e&. (11"#)
Art. 111. 7ay&ent &ade by one of t%e solidary debtors
e.tinguis%es t%e obligation. ?f t)o or &ore solidary debtors
offer to 'ay, t%e creditor &ay c%oose )%ic% offer to acce't.
@e )%o &ade t%e 'ay&ent &ay clai& fro& %is co0debtors only
t%e s%are )%ic% corres'onds to eac%, )it% t%e interest for t%e
'ay&ent already &ade. ?f t%e 'ay&ent is &ade before t%e debt
is due, no interest for t%e intervening 'eriod &ay be
de&anded.
-%en one of t%e solidary debtors cannot, because of %is
insolvency, rei&burse %is s%are to t%e debtor ultative
'aying t%e obligation, suc% s%are s%all be borne by all %is co0
debtors, in 'ro'ortion to t%e debt of eac%.
5. $o&'ensation
,5$=?O( 5. 0 $o&'ensation

Art. 113. $o&'ensation s%all ta/e 'lace )%en t)o 'ersons, in
t%eir o)n rig%t, are creditors and debtors of eac% ot%er. (1145)
Art. 114. ?n order t%at co&'ensation &ay be 'ro'er, it is
necessary:
(1) =%at eac% one of t%e obligors be bound 'rinci'ally,
and t%at %e be at t%e sa&e ti&e a 'rinci'al creditor of
t%e ot%er9
() =%at bot% debts consist in a su& of &oney, or if
t%e t%ings due are consu&able, t%ey be of t%e sa&e
/ind, and also of t%e sa&e *uality if t%e latter %as
been stated9
(#) =%at t%e t)o debts be due9
(") =%at t%ey be li*uidated and de&andable9
(5) =%at over neit%er of t%e& t%ere be any retention or
controversy, co&&enced by t%ird 'ersons and
co&&unicated in due ti&e to t%e debtor. (1146)
Art. 132. (ot)it%standing t%e 'rovisions of t%e 'receding
article, t%e guarantor &ay set u' co&'ensation as regards
)%at t%e creditor &ay o)e t%e 'rinci'al debtor. (1141)
Art. 131. $o&'ensation &ay be total or 'artial. -%en t%e t)o
debts are of t%e sa&e a&ount, t%ere is a total co&'ensation.
Art. 13. =%e 'arties &ay agree u'on t%e co&'ensation of
debts )%ic% are not yet due. (n)
Art. 13#. ?f one of t%e 'arties to a suit over an obligation %as a
clai& for da&ages against t%e ot%er, t%e for&er &ay set it off
by 'roving %is rig%t to said da&ages and t%e a&ount t%ereof.
Art. 13". -%en one or bot% debts are rescissible or voidable,
t%ey &ay be co&'ensated against eac% ot%er before t%ey are
judicially rescinded or avoided. (n)
Art. 135. =%e debtor )%o %as consented to t%e assign&ent of
rig%ts &ade by a creditor in favor of a t%ird 'erson, cannot set
u' against t%e assignee t%e co&'ensation )%ic% )ould 'ertain
to %i& against t%e assignor, unless t%e assignor )as notified by
t%e debtor at t%e ti&e %e gave %is consent, t%at %e reserved %is
rig%t to t%e co&'ensation.
?f t%e creditor co&&unicated t%e cession to %i& but t%e debtor
did not consent t%ereto, t%e latter &ay set u' t%e co&'ensation
of debts 'revious to t%e cession, but not of subse*uent ones.
?f t%e assign&ent is &ade )it%out t%e /no)ledge of t%e debtor,
%e &ay set u' t%e co&'ensation of all credits 'rior to t%e sa&e
and also later ones until %e %ad /no)ledge of t%e assign&ent.
(1143a)
Art. 136. $o&'ensation ta/es 'lace by o'eration of la), even
t%oug% t%e debts &ay be 'ayable at different 'laces, but t%ere
s%all be an inde&nity for e.'enses of e.c%ange or
trans'ortation to t%e 'lace of 'ay&ent. (1144a)
Art. 131. $o&'ensation s%all not be 'ro'er )%en one of t%e
debts arises fro& a de'ositu& or fro& t%e obligations of a
de'ositary or of a bailee in co&&odatu&.
(eit%er can co&'ensation be set u' against a creditor )%o %as
a clai& for su''ort due by gratuitous title, )it%out 'rejudice to
t%e 'rovisions of 'aragra'% of Article #21. (122a)
Art. 133. (eit%er s%all t%ere be co&'ensation if one of t%e
debts consists in civil liability arising fro& a 'enal offense. (n)
Art. 134. ?f a 'erson s%ould %ave against %i& several debts
)%ic% are susce'tible of co&'ensation, t%e rules on t%e
a''lication of 'ay&ents s%all a''ly to t%e order of t%e
co&'ensation. (121)
Art. 142. -%en all t%e re*uisites &entioned in Article 114 are
'resent, co&'ensation ta/es effect by o'eration of la), and
e.tinguis%es bot% debts to t%e concurrent a&ount, even t%oug%
t%e creditors and debtors are not a)are of t%e co&'ensation.
!inds of $o&'ensation
a. :egal
b. $onventional L Aacultative
c. Gudicial
6. (ovation
,5$=?O( 6. 0 (ovation

Art. 141. Obligations &ay be &odified by:
(1) $%anging t%eir object or 'rinci'al conditions9
() ,ubstituting t%e 'erson of t%e debtor9
(#) ,ubrogating a t%ird 'erson in t%e rig%ts of t%e
creditor. (12#)
Art. 14. ?n order t%at an obligation &ay be e.tinguis%ed by
anot%er )%ic% substitute t%e sa&e, it is i&'erative t%at it be so
declared in une*uivocal ter&s, or t%at t%e old and t%e ne)
obligations be on every 'oint inco&'atible )it% eac% ot%er.
Art. 14#. (ovation )%ic% consists in substituting a ne) debtor
in t%e 'lace of t%e original one, &ay be &ade even )it%out t%e
/no)ledge or against t%e )ill of t%e latter, but not )it%out t%e
consent of t%e creditor. 7ay&ent by t%e ne) debtor gives %i&
t%e rig%ts &entioned in Articles 1#6 and 1#1. (125a)
Art. 14". ?f t%e substitution is )it%out t%e /no)ledge or
against t%e )ill of t%e debtor, t%e ne) debtorDs insolvency or
non0fulfill&ent of t%e obligations s%all not give rise to any
liability on t%e 'art of t%e original debtor. (n)
Art. 145. =%e insolvency of t%e ne) debtor, )%o %as been
'ro'osed by t%e original debtor and acce'ted by t%e creditor,
s%all not revive t%e action of t%e latter against t%e original
obligor, e.ce't )%en said insolvency )as already e.isting and
of 'ublic /no)ledge, or /no)n to t%e debtor, )%en t%e
delegated %is debt. (126a)
Art. 146. -%en t%e 'rinci'al obligation is e.tinguis%ed in
conse*uence of a novation, accessory obligations &ay subsist
only insofar as t%ey &ay benefit t%ird 'ersons )%o did not give
t%eir consent. (121)
Art. 141. ?f t%e ne) obligation is void, t%e original one s%all
subsist, unless t%e 'arties intended t%at t%e for&er relation
s%ould be e.tinguis%ed in any event. (n)
Art. 143. =%e novation is void if t%e original obligation )as
void, e.ce't )%en annul&ent &ay be clai&ed only by t%e
debtor or )%en ratification validates acts )%ic% are voidable.
(123a)
Art. 144. ?f t%e original obligation )as subject to a sus'ensive
or resolutory condition, t%e ne) obligation s%all be under t%e
sa&e condition, unless it is ot%er)ise sti'ulated. (n)
Art. 1#22. ,ubrogation of a t%ird 'erson in t%e rig%ts of t%e
creditor is eit%er legal or conventional. =%e for&er is not
'resu&ed, e.ce't in cases e.'ressly &entioned in t%is $ode9
t%e latter &ust be clearly establis%ed in order t%at it &ay ta/e
effect. (124a)
Art. 1#21. $onventional subrogation of a t%ird 'erson re*uires
t%e consent of t%e original 'arties and of t%e t%ird 'erson. (n)
Art. 1#2. ?t is 'resu&ed t%at t%ere is legal subrogation:
(1) -%en a creditor 'ays anot%er creditor )%o is
'referred, even )it%out t%e debtorDs /no)ledge9
() -%en a t%ird 'erson, not interested in t%e
obligation, 'ays )it% t%e e.'ress or tacit a''roval of
t%e debtor9
(#) -%en, even )it%out t%e /no)ledge of t%e debtor, a
'erson interested in t%e fulfill&ent of t%e obligation
'ays, )it%out 'rejudice to t%e effects of confusion as
to t%e latterDs s%are. (112a)
Art. 1#2#. ,ubrogation transfers to t%e 'ersons subrogated t%e
credit )it% all t%e rig%ts t%ereto a''ertaining, eit%er against t%e
debtor or against t%ird 'erson, be t%ey guarantors or
'ossessors of &ortgages, subject to sti'ulation in a
conventional subrogation. (11a)
Art. 1#2". A creditor, to )%o& 'artial 'ay&ent %as been &ade,
&ay e.ercise %is rig%t for t%e re&ainder, and %e s%all be
'referred to t%e 'erson )%o %as been subrogated in %is 'lace
in virtue of t%e 'artial 'ay&ent of t%e sa&e credit.
s%are in t%e obligation corres'onding to t%e&.
!inds of (ovation
As to its nature: subjective or 'ersonal9 objective or real
As to its for&: e.'ress or i&'lied
1. Ot%er Fodes
Title II. - CONTRACTS

CHAPTER 1
GENERAL PROVISIONS

Definition: Art. 1#25. A contract is a &eeting of &inds bet)een
t)o 'ersons )%ereby one binds %i&self, )it% res'ect to t%e
ot%er, to give so&et%ing or to render so&e service. (15"a)
Auto0contracts:
Art. 1"41. =%e follo)ing 'ersons cannot ac*uire by 'urc%ase,
even at a 'ublic or judicial auction, eit%er in 'erson or t%roug%
t%e &ediation of anot%er:
(1) =%e guardian, t%e 'ro'erty of t%e 'erson or
'ersons )%o &ay be under %is guardians%i'9
() Agents, t%e 'ro'erty )%ose ad&inistration or sale
&ay %ave been entrusted to t%e&, unless t%e consent
of t%e 'rinci'al %as been given9
(#) 5.ecutors and ad&inistrators, t%e 'ro'erty of t%e
estate under ad&inistration9
(") 7ublic officers and e&'loyees, t%e 'ro'erty of t%e
,tate or of any subdivision t%ereof, or of any
govern&ent0o)ned or controlled cor'oration, or
institution, t%e ad&inistration of )%ic% %as been
intrusted to t%e&9 t%is 'rovision s%all a''ly to judges
and govern&ent e.'erts )%o, in any &anner
)%atsoever, ta/e 'art in t%e sale9
(5) Gustices, judges, 'rosecuting attorneys, cler/s of
su'erior and inferior courts, and ot%er officers and
e&'loyees connected )it% t%e ad&inistration of
justice, t%e 'ro'erty and rig%ts in litigation or levied
u'on an e.ecution before t%e court )it%in )%ose
jurisdiction or territory t%ey e.ercise t%eir res'ective
functions9 t%is 'ro%ibition includes t%e act of ac*uiring
by assign&ent and s%all a''ly to la)yers, )it%
res'ect to t%e 'ro'erty and rig%ts )%ic% &ay be t%e
object of any litigation in )%ic% t%ey &ay ta/e 'art by
virtue of t%eir 'rofession.
(6) Any ot%ers s'ecially dis*ualified by la).
Art. 16"6. =%e 'ersons dis*ualified to buy referred to in Articles
1"42 and 1"41, are also dis*ualified to beco&e lessees of t%e
t%ings &entioned t%erein.
Art. 1342. ?f t%e agent %as been e&'o)ered to borro) &oney,
%e &ay %i&self be t%e lender at t%e current rate of interest. ?f
%e %as been aut%ori+ed to lend &oney at interest, %e cannot
borro) it )it%out t%e consent of t%e 'rinci'al.
5le&ents of a $ontract:
5ssential 6 t%ose )it%out )%ic% t%ere can be no contract9
consent, subject &atter, cause
(atural 6 t%ose )%ic% e.ist as 'art of t%e contract even if t%e
'arties do not 'rovide for t%e&, because t%e la), as su''letory
to t%e contract, creates t%e&9 e.: )arranty against eviction
Accidental 6 t%ose )%ic% are agreed u'on by t%e 'arties abd
)%ic% cannot e.ist )it%out being sti'ulated
<. $%aracteristicsL7rinci'les of a $ontract
1. $onsensuality of $ontracts
Art. 1#25. A contract is a &eeting of &inds bet)een t)o
'ersons )%ereby one binds %i&self, )it% res'ect to t%e ot%er,
to give so&et%ing or to render so&e service.
Art. 1#11. (o one &ay contract in t%e na&e of anot%er )it%out
being aut%ori+ed by t%e latter, or unless %e %as by la) a rig%t
to re'resent %i&.
A contract entered into in t%e na&e of anot%er by one )%o %as
no aut%ority or legal re'resentation, or )%o %as acted beyond
%is 'o)ers, s%all be unenforceable, unless it is ratified,
e.'ressly or i&'liedly, by t%e 'erson on )%ose be%alf it %as
been e.ecuted, before it is revo/ed by t%e ot%er contracting
'arty.
$ontract of ad%esion 6
. Autono&y of $ontracts
Art. 1#26. =%e contracting 'arties &ay establis% suc%
sti'ulations, clauses, ter&s and conditions as t%ey &ay dee&
convenient, 'rovided t%ey are not contrary to la), &orals, good
custo&s, 'ublic order, or 'ublic 'olicy.
Art. 1144. A sti'ulation )%ic% e.cludes one or &ore 'artners
fro& any s%are in t%e 'rofits or losses is void.
Art. 233. =%e creditor cannot a''ro'riate t%e t%ings given by
)ay of 'ledge or &ortgage, or dis'ose of t%e&. Any sti'ulation
to t%e contrary is null and void.
Art. 1#2. A sti'ulation forbidding t%e o)ner fro& alienating t%e
i&&ovable &ortgaged s%all be void.
#. Futuality of $ontracts
Art. 1#23. =%e contract &ust bind bot% contracting 'arties9 its
validity or co&'liance cannot be left to t%e )ill of one of t%e&.
Art. 1#24. =%e deter&ination of t%e 'erfor&ance &ay be left to
a t%ird 'erson, )%ose decision s%all not be binding until it %as
been &ade /no)n to bot% contracting 'arties. (n)
Art. 1#12. =%e deter&ination s%all not be obligatory if it is
evidently ine*uitable. ?n suc% case, t%e courts s%all decide
)%at is e*uitable under t%e circu&stances.
Art. 113. -%en t%e fulfill&ent of t%e condition de'ends u'on
t%e sole )ill of t%e debtor, t%e conditional obligation s%all be
void. ?f it de'ends u'on c%ance or u'on t%e )ill of a t%ird
'erson, t%e obligation s%all ta/e effect in confor&ity )it% t%e
'rovisions of t%is $ode.
Acceleration $lause9 5scalation $lause
". Obligatory Aorce of $ontracts
Art. 1154. Obligations arising fro& contracts %ave t%e force of
la) bet)een t%e contracting 'arties and s%ould be co&'lied
)it% in good fait%.
Art. 1#15. $ontracts are 'erfected by &ere consent, and fro&
t%at &o&ent t%e 'arties are bound not only to t%e fulfill&ent of
)%at %as been e.'ressly sti'ulated but also to all t%e
conse*uences )%ic%, according to t%eir nature, &ay be in
/ee'ing )it% good fait%, usage and la). (153)
Art. 1#16. Beal contracts, suc% as de'osit, 'ledge and
$o&&odatu&, are not 'erfected until t%e delivery of t%e object
of t%e obligation. (n)
donee &ust satisfy.
5. Belativity of $ontracts
Art. 1#11. $ontracts ta/e effect only bet)een t%e 'arties, t%eir
assigns and %eirs, e.ce't in case )%ere t%e rig%ts and
obligations arising fro& t%e contract are not trans&issible by
t%eir nature, or by sti'ulation or by 'rovision of la). =%e %eir is
not liable beyond t%e value of t%e 'ro'erty %e received fro&
t%e decedent.
?f a contract s%ould contain so&e sti'ulation in favor of a t%ird
'erson, %e &ay de&and its fulfill&ent 'rovided %e
co&&unicated %is acce'tance to t%e obligor before its
revocation. A &ere incidental benefit or interest of a 'erson is
not sufficient. =%e contracting 'arties &ust %ave clearly and
deliberately conferred a favor u'on a t%ird 'erson. (151a)
Art. 1#1. ?n contracts creating real rig%ts, t%ird 'ersons )%o
co&e into 'ossession of t%e object of t%e contract are bound
t%ereby, subject to t%e 'rovisions of t%e Fortgage :a) and t%e
:and Begistration :a)s. (n)
Art. 1#1#. $reditors are 'rotected in cases of contracts
intended to defraud t%e&. (n)
Art. 1#1". Any t%ird 'erson )%o induces anot%er to violate %is
contract s%all be liable for da&ages to t%e ot%er contracting
'arty.
defraud t%e&. (1111)
t%e contrary.
Art. 1#31. =%e follo)ing contracts are rescissible:
(1) =%ose )%ic% are entered into by guardians
)%enever t%e )ards )%o& t%ey re'resent suffer
lesion by &ore t%an one0fourt% of t%e value of t%e
t%ings )%ic% are t%e object t%ereof9
() =%ose agreed u'on in re'resentation of
absentees, if t%e latter suffer t%e lesion stated in t%e
'receding nu&ber9
(#) =%ose underta/en in fraud of creditors )%en t%e
latter cannot in any ot%er &anner collect t%e clai&s
due t%e&9
(") =%ose )%ic% refer to t%ings under litigation if t%ey
%ave been entered into by t%e defendant )it%out t%e
/no)ledge and a''roval of t%e litigants or of
co&'etent judicial aut%ority9
(5) All ot%er contracts s'ecially declared by la) to be subject to
rescission.
$. $lassification of $ontracts
1. According to Degree of De'endence
a. 7re'aratory
Art. 1"14. A 'ro&ise to buy and sell a deter&inate t%ing for a
'rice certain is reci'rocally de&andable.
An acce'ted unilateral 'ro&ise to buy or to sell a deter&inate
t%ing for a 'rice certain is binding u'on t%e 'ro&issor if t%e
'ro&ise is su''orted by a consideration distinct fro& t%e 'rice.
Art. 1161. <y t%e contract of 'artners%i' t)o or &ore 'ersons
bind t%e&selves to contribute &oney, 'ro'erty, or industry to a
co&&on fund, )it% t%e intention of dividing t%e 'rofits a&ong
t%e&selves.
=)o or &ore 'ersons &ay also for& a 'artners%i' for t%e
e.ercise of a 'rofession.
Art. 1363. <y t%e contract of agency a 'erson binds %i&self to
render so&e service or to do so&et%ing in re'resentation or on
be%alf of anot%er, )it% t%e consent or aut%ority of t%e latter.
b. 7rinci'al
Art. 1"53. <y t%e contract of sale one of t%e contracting 'arties
obligates %i&self to transfer t%e o)ners%i' and to deliver a
deter&inate t%ing, and t%e ot%er to 'ay t%erefor a 'rice certain
in &oney or its e*uivalent.
A contract of sale &ay be absolute or conditional.
Art. 16#3. <y t%e contract of barter or e.c%ange one of t%e
'arties binds %i&self to give one t%ing in consideration of t%e
ot%erDs 'ro&ise to give anot%er t%ing.
Art. 16". =%e contract of lease &ay be of t%ings, or of )or/
and service.
Art. 14##. <y t%e contract of loan, one of t%e 'arties delivers to
anot%er, eit%er so&et%ing not consu&able so t%at t%e latter
&ay use t%e sa&e for a certain ti&e and return it, in )%ic%
case t%e contract is called a co&&odatu&9 or &oney or ot%er
consu&able t%ing, u'on t%e condition t%at t%e sa&e a&ount of
t%e sa&e /ind and *uality s%all be 'aid, in )%ic% case t%e
contract is si&'ly called a loan or mutuum.
Commodatum is essentially gratuitous.
,i&'le loan &ay be gratuitous or )it% a sti'ulation to 'ay
interest.
?n commodatum t%e bailor retains t%e o)ners%i' of t%e t%ing
loaned, )%ile in si&'le loan, o)ners%i' 'asses to t%e
borro)er.
Art. 146. A de'osit is constituted fro& t%e &o&ent a 'erson
receives a t%ing belonging to anot%er, )it% t%e obligation of
safely /ee'ing it and of returning t%e sa&e. ?f t%e safe/ee'ing
of t%e t%ing delivered is not t%e 'rinci'al 'ur'ose of t%e
contract, t%ere is no de'osit but so&e ot%er contract.
c. Accessory
Art. 2"1. <y guaranty a 'erson, called t%e guarantor, binds
%i&self to t%e creditor to fulfill t%e obligation of t%e 'rinci'al
debtor in case t%e latter s%ould fail to do so.
?f a 'erson binds %i&self solidarily )it% t%e 'rinci'al debtor, t%e
'rovisions of ,ection ", $%a'ter #, =itle ? of t%is <oo/ s%all be
observed. ?n suc% case t%e contract is called a suretys%i'.
Art. 235. =%e follo)ing re*uisites are essential to t%e
contracts of 'ledge and &ortgage:
(1) =%at t%ey be constituted to secure t%e fulfill&ent of
a 'rinci'al obligation9
() =%at t%e 'ledgor or &ortgagor be t%e absolute
o)ner of t%e t%ing 'ledged or &ortgaged9
(#) =%at t%e 'ersons constituting t%e 'ledge or
&ortgage %ave t%e free dis'osal of t%eir 'ro'erty, and
in t%e absence t%ereof, t%at t%ey be legally aut%ori+ed
for t%e 'ur'ose.
=%ird 'ersons )%o are not 'arties to t%e 'rinci'al obligation
&ay secure t%e latter by 'ledging or &ortgaging t%eir o)n
'ro'erty.
. According to 7erfection
a. $onsensual
Art. 1#15. $ontracts are 'erfected by &ere consent, and fro&
t%at &o&ent t%e 'arties are bound not only to t%e fulfill&ent of
)%at %as been e.'ressly sti'ulated but also to all t%e
conse*uences )%ic%, according to t%eir nature, &ay be in
/ee'ing )it% good fait%, usage and la).
Art. 1"15. =%e contract of sale is 'erfected at t%e &o&ent
t%ere is a &eeting of &inds u'on t%e t%ing )%ic% is t%e object
of t%e contract and u'on t%e 'rice.
Aro& t%at &o&ent, t%e 'arties &ay reci'rocally de&and
'erfor&ance, subject to t%e 'rovisions of t%e la) governing t%e
for& of contracts.
b. Beal
Art. 1#16. Beal contracts, suc% as de'osit, 'ledge and
$o&&odatu&, are not 'erfected until t%e delivery of t%e object
of t%e obligation.
Art. 14#". An acce'ted 'ro&ise to deliver so&et%ing by )ay
of commodatum or si&'le loan is binding u'on 'arties, but
t%e commodatum or si&'le loan itself s%all not be 'erfected
until t%e delivery of t%e object of t%e contract.
c. Aor&al
Art. 1#56. $ontracts s%all be obligatory, in )%atever for& t%ey
&ay %ave been entered into, 'rovided all t%e essential
re*uisites for t%eir validity are 'resent. @o)ever, )%en t%e la)
re*uires t%at a contract be in so&e for& in order t%at it &ay be
valid or enforceable, or t%at a contract be 'roved in a certain
)ay, t%at re*uire&ent is absolute and indis'ensable. ?n suc%
cases, t%e rig%t of t%e 'arties stated in t%e follo)ing article
cannot be e.ercised.
#. According to ,ole&nity of Aor& (Art. 1#56)
Any for&L ,'ecial Aor&
". According to 'ur'ose
a. =ransfer of O)ners%i'
Art. 15. Donation is an act of liberality )%ereby a 'erson
dis'oses gratuitously of a t%ing or rig%t in favor of anot%er, )%o
acce'ts it.
b. $onveyance of Ese
Art. 56. Esufruct gives a rig%t to enjoy t%e 'ro'erty of anot%er
)it% t%e obligation of 'reserving its for& and substance, unless
t%e title constituting it or t%e la) ot%er)ise 'rovides.
and service.
c. Bendition of ,ervice
and service.
Art. 1363. <y t%e contract of agency a 'erson binds %i&self to
render so&e service or to do so&et%ing in re'resentation or on
be%alf of anot%er, )it% t%e consent or aut%ority of t%e latter.
5. According to t%e (ature of Obligation 7roduced
a. <ilateral
and service.
b. Enilateral
Art. 2"1. <y guaranty a 'erson, called t%e guarantor, binds
%i&self to t%e creditor to fulfill t%e obligation of t%e 'rinci'al
debtor in case t%e latter s%ould fail to do so.
?f a 'erson binds %i&self solidarily )it% t%e 'rinci'al debtor, t%e
'rovisions of ,ection ", $%a'ter #, =itle ? of t%is <oo/ s%all be
observed. ?n suc% case t%e contract is called a suretys%i'.
Art. 24#. ?n addition to t%e re*uisites 'rescribed in Article
235, it is necessary, in order to constitute t%e contract of
'ledge, t%at t%e t%ing 'ledged be 'laced in t%e 'ossession of
t%e creditor, or of a t%ird 'erson by co&&on agree&ent.
6. According to $ause
Art. 1#52. ?n onerous contracts t%e cause is understood to be,
for eac% contracting 'arty, t%e 'restation or 'ro&ise of a t%ing
or service by t%e ot%er9 in re&uneratory ones, t%e service or
benefit )%ic% is re&unerated9 and in contracts of 'ure
beneficence, t%e &ere liberality of t%e benefactor.
a. Onerous
and service.
b. Gratuitous or :ucrative
Art. 15. Donation is an act of liberality )%ereby a 'erson
dis'oses gratuitously of a t%ing or rig%t in favor of anot%er, )%o
acce'ts it.
Commodatum is essentially gratuitous.
,i&'le loan &ay be gratuitous or )it% a sti'ulation to 'ay
interest.
?n commodatum t%e bailor retains t%e o)ners%i' of t%e t%ing
loaned, )%ile in si&'le loan, o)ners%i' 'asses to t%e
borro)er.
c. Be&uneratory
1. According to Bis/ ($o&&utative or Aleatory)
Art. 212. <y an aleatory contract, one of t%e 'arties or bot%
reci'rocally bind t%e&selves to give or to do so&et%ing in
consideration of )%at t%e ot%er s%all give or do u'on t%e
%a''ening of an event )%ic% is uncertain, or )%ic% is to occur
at an indeter&inate ti&e.
3. According to na&e (no&inate or inno&inate)
Art. 1#21. ?nno&inate contracts s%all be regulated by t%e
sti'ulations of t%e 'arties, by t%e 'rovisions of =itles ? and ?? of
t%is <oo/, by t%e rules governing t%e &ost analogous no&inate
contracts, and by t%e custo&s of t%e 'lace.
4. According to ,ubject Fatter (t%ing, rig%t or service)
D. ,tages of $ontract
1. (egotiation9 $ontract of O'tion
Art. 1#". -%en t%e offerer %as allo)ed t%e offeree a certain
'eriod to acce't, t%e offer &ay be )it%dra)n at any ti&e before
acce'tance by co&&unicating suc% )it%dra)al, e.ce't )%en
t%e o'tion is founded u'on a consideration, as so&et%ing 'aid
or 'ro&ised.
Art. 1"14. A 'ro&ise to buy and sell a deter&inate t%ing for a
'rice certain is reci'rocally de&andable.
An acce'ted unilateral 'ro&ise to buy or to sell a deter&inate
t%ing for a 'rice certain is binding u'on t%e 'ro&issor if t%e
'ro&ise is su''orted by a consideration distinct fro& t%e 'rice.
Art. 1"3. -%enever earnest &oney is given in a contract of
sale, it s%all be considered as 'art of t%e 'rice and as 'roof of
t%e 'erfection of t%e contract.
. 7erfection
#. 7erfor&ance
". $onsu&&ation
5. 5ssential 5le&ents of $Ontract
$@A7=5B
5,,5(=?A: B5;E?,?=5, OA $O(=BA$=,

G5(5BA: 7BO8?,?O(,

Art. 1#13. =%ere is no contract unless t%e follo)ing re*uisites
concur:
(1) $onsent of t%e contracting 'arties9
() Object certain )%ic% is t%e subject &atter of t%e
contract9
(#) $ause of t%e obligation )%ic% is establis%ed.
1. $onsent of t%e $ontracting 7arties
,5$=?O( 1. 0 $onsent

Art. 1#14. $onsent is &anifested by t%e &eeting of t%e offer
and t%e acce'tance u'on t%e t%ing and t%e cause )%ic% are to
constitute t%e contract. =%e offer &ust be certain and t%e
acce'tance absolute. A *ualified acce'tance constitutes a
counter0offer.
Acce'tance &ade by letter or telegra& does not bind t%e
offerer e.ce't fro& t%e ti&e it ca&e to %is /no)ledge. =%e
contract, in suc% a case, is 'resu&ed to %ave been entered
into in t%e 'lace )%ere t%e offer )as &ade. (16a)
Art. 1#2. An acce'tance &ay be e.'ress or i&'lied. (n)
Art. 1#1. =%e 'erson &a/ing t%e offer &ay fi. t%e ti&e, 'lace,
and &anner of acce'tance, all of )%ic% &ust be co&'lied )it%.
Art. 1#. An offer &ade t%roug% an agent is acce'ted fro& t%e
ti&e acce'tance is co&&unicated to %i&. (n)
Art. 1##. An offer beco&es ineffective u'on t%e deat%, civil
interdiction, insanity, or insolvency of eit%er 'arty before
acce'tance is conveyed.
Art. 1#5. Enless it a''ears ot%er)ise, business
advertise&ents of t%ings for sale are not definite offers, but
&ere invitations to &a/e an offer. (n)
Art. 1#6. Advertise&ents for bidders are si&'ly invitations to
&a/e 'ro'osals, and t%e advertiser is not bound to acce't t%e
%ig%est or lo)est bidder, unless t%e contrary a''ears. (n)
Art. 1#1. =%e follo)ing cannot give consent to a contract:
(1) Ene&anci'ated &inors9
() ?nsane or de&ented 'ersons, and deaf0&utes )%o
do not /no) %o) to )rite. (16#a)
Art. 1#3. $ontracts entered into during a lucid interval are
valid. $ontracts agreed to in a state of drun/enness or during a
%y'notic s'ell are voidable. (n)
Art. 1#4. =%e inca'acity declared in Article 1#1 is subject to
t%e &odifications deter&ined by la), and is understood to be
)it%out 'rejudice to s'ecial dis*ualifications establis%ed in t%e
la)s. (16")
Art. 1##2. A contract )%ere consent is given t%roug% &ista/e,
violence, inti&idation, undue influence, or fraud is voidable.
Art. 1##1. ?n order t%at &ista/e &ay invalidate consent, it
s%ould refer to t%e substance of t%e t%ing )%ic% is t%e object of
t%e contract, or to t%ose conditions )%ic% %ave 'rinci'ally
&oved one or bot% 'arties to enter into t%e contract.
Fista/e as to t%e identity or *ualifications of one of t%e 'arties
)ill vitiate consent only )%en suc% identity or *ualifications
%ave been t%e 'rinci'al cause of t%e contract.
A si&'le &ista/e of account s%all give rise to its correction.
Art. 1##. -%en one of t%e 'arties is unable to read, or if t%e
contract is in a language not understood by %i&, and &ista/e
or fraud is alleged, t%e 'erson enforcing t%e contract &ust
s%o) t%at t%e ter&s t%ereof %ave been fully e.'lained to t%e
for&er. (n)
Art. 1###. =%ere is no &ista/e if t%e 'arty alleging it /ne) t%e
doubt, contingency or ris/ affecting t%e object of t%e contract.
Art. 1##". Futual error as to t%e legal effect of an agree&ent
)%en t%e real 'ur'ose of t%e 'arties is frustrated, &ay vitiate
consent. (n)
Art. 1##5. =%ere is violence )%en in order to )rest consent,
serious or irresistible force is e&'loyed.
=%ere is inti&idation )%en one of t%e contracting 'arties is
co&'elled by a reasonable and )ell0grounded fear of an
i&&inent and grave evil u'on %is 'erson or 'ro'erty, or u'on
t%e 'erson or 'ro'erty of %is s'ouse, descendants or
ascendants, to give %is consent.
=o deter&ine t%e degree of inti&idation, t%e age, se. and
condition of t%e 'erson s%all be borne in &ind.
A t%reat to enforce oneDs clai& t%roug% co&'etent aut%ority, if
t%e clai& is just or legal, does not vitiate consent. (161a)
Art. 1##6. 8iolence or inti&idation s%all annul t%e obligation,
alt%oug% it &ay %ave been e&'loyed by a t%ird 'erson )%o did
not ta/e 'art in t%e contract. (163)
Art. 1##1. =%ere is undue influence )%en a 'erson ta/es
i&'ro'er advantage of %is 'o)er over t%e )ill of anot%er,
de'riving t%e latter of a reasonable freedo& of c%oice. =%e
follo)ing circu&stances s%all be considered: t%e confidential,
fa&ily, s'iritual and ot%er relations bet)een t%e 'arties, or t%e
fact t%at t%e 'erson alleged to %ave been unduly influenced
)as suffering fro& &ental )ea/ness, or )as ignorant or in
financial distress. (n)
Art. 1##3. =%ere is fraud )%en, t%roug% insidious )ords or
&ac%inations of one of t%e contracting 'arties, t%e ot%er is
induced to enter into a contract )%ic%, )it%out t%e&, %e )ould
not %ave agreed to. (164)
Art. 1##4. Aailure to disclose facts, )%en t%ere is a duty to
reveal t%e&, as )%en t%e 'arties are bound by confidential
relations, constitutes fraud. (n)
Art. 1#"2. =%e usual e.aggerations in trade, )%en t%e ot%er
'arty %ad an o''ortunity to /no) t%e facts, are not in
t%e&selves fraudulent. (n)
Art. 1#"1. A &ere e.'ression of an o'inion does not signify
fraud, unless &ade by an e.'ert and t%e ot%er 'arty %as relied
on t%e for&erDs s'ecial /no)ledge. (n)
Art. 1#". Fisre'resentation by a t%ird 'erson does not vitiate
consent, unless suc% &isre'resentation %as created
substantial &ista/e and t%e sa&e is &utual. (n)
Art. 1#"#. Fisre'resentation &ade in good fait% is not
fraudulent but &ay constitute error. (n)
Art. 1#"". ?n order t%at fraud &ay &a/e a contract voidable, it
s%ould be serious and s%ould not %ave been e&'loyed by bot%
contracting 'arties.
?ncidental fraud only obliges t%e 'erson e&'loying it to 'ay
da&ages. (112)
Art. 1#"5. ,i&ulation of a contract &ay be absolute or relative.
=%e for&er ta/es 'lace )%en t%e 'arties do not intend to be
bound at all9 t%e latter, )%en t%e 'arties conceal t%eir true
agree&ent. (n)
Art. 1#"6. An absolutely si&ulated or fictitious contract is void.
A relative si&ulation, )%en it does not 'rejudice a t%ird 'erson
and is not intended for any 'ur'ose contrary to la), &orals,
good custo&s, 'ublic order or 'ublic 'olicy binds t%e 'arties to
t%eir real agree&ent.
Art. #1. Guridical ca'acity, )%ic% is t%e fitness to be t%e subject
of legal relations, is in%erent in every natural 'erson and is lost
only t%roug% deat%. $a'acity to act, )%ic% is t%e 'o)er to do
acts )it% legal effect, is ac*uired and &ay be lost. (n)
Art. #3. Finority, insanity or i&becility, t%e state of being a deaf0
&ute, 'rodigality and civil interdiction are &ere restrictions on
ca'acity to act, and do not e.e&'t t%e inca'acitated 'erson
fro& certain obligations, as )%en t%e latter arise fro& %is acts
or fro& 'ro'erty relations, suc% as ease&ents.(#a)
Art. #4. =%e follo)ing circu&stances, a&ong ot%ers, &odify or
li&it ca'acity to act: age, insanity, i&becility, t%e state of being
a deaf0&ute, 'enalty, 'rodigality, fa&ily relations, alienage,
absence, insolvency and trustees%i'. =%e conse*uences of
t%ese circu&stances are governed in t%is $ode, ot%er codes,
t%e Bules of $ourt, and in s'ecial la)s. $a'acity to act is not
li&ited on account of religious belief or 'olitical o'inion.
A &arried )o&an, t)enty0one years of age or over, is *ualified
for all acts of civil life, e.ce't in cases s'ecified by la).
Art. 1#4. =%e follo)ing donations s%all be void:
(1) =%ose &ade bet)een 'ersons )%o )ere guilty of
adultery or concubinage at t%e ti&e of t%e donation9
() =%ose &ade bet)een 'ersons found guilty of t%e
sa&e cri&inal offense, in consideration t%ereof9
(#) =%ose &ade to a 'ublic officer or %is )ife,
descedants and ascendants, by reason of %is office.
?n t%e case referred to in (o. 1, t%e action for declaration of
nullity &ay be broug%t by t%e s'ouse of t%e donor or donee9
and t%e guilt of t%e donor and donee &ay be 'roved by
're'onderance of evidence in t%e sa&e action.
Art. 1"16. ?n t%e case of a sale by auction:
... (") -%ere notice %as not been given t%at a sale by auction
is subject to a rig%t to bid on be%alf of t%e seller, it s%all not be
la)ful for t%e seller to bid %i&self or to e&'loy or induce any
'erson to bid at suc% sale on %is be%alf or for t%e auctioneer, to
e&'loy or induce any 'erson to bid at suc% sale on be%alf of
t%e seller or /no)ingly to ta/e any bid fro& t%e seller or any
'erson e&'loyed by %i&. Any sale contravening t%is rule &ay
be treated as fraudulent by t%e buyer.
Art. 1"42. =%e %usband and t%e )ife cannot sell 'ro'erty to
eac% ot%er, e.ce't:
(1) -%en a se'aration of 'ro'erty )as agreed u'on in
t%e &arriage settle&ents9 or
() -%en t%ere %as been a judicial se'aration or
'ro'erty under Article 141. (1"53a)
Art. 15##. -%ere t%e goods are of 'eris%able nature, or )%ere
t%e seller e.'ressly reserves t%e rig%t of resale in case t%e
buyer s%ould &a/e default, or )%ere t%e buyer %as been in
default in t%e 'ay&ent of t%e 'rice for an unreasonable ti&e,
an un'aid seller %aving a rig%t of lien or %aving sto''ed t%e
goods in transitu &ay resell t%e goods. @e s%all not t%ereafter
be liable to t%e original buyer u'on t%e contract of sale or for
any 'rofit &ade by suc% resale, but &ay recover fro& t%e
buyer da&ages for any loss occasioned by t%e breac% of t%e
contract of sale.
-%ere a resale is &ade, as aut%ori+ed in t%is article, t%e buyer
ac*uires a good title as against t%e original buyer.
?t is not essential to t%e validity of resale t%at notice of an
intention to resell t%e goods be given by t%e seller to t%e
original buyer. <ut )%ere t%e rig%t to resell is not based on t%e
'eris%able nature of t%e goods or u'on an e.'ress 'rovision of
t%e contract of sale, t%e giving or failure to give suc% notice
s%all be relevant in any issue involving t%e *uestion )%et%er
t%e buyer %ad been in default for an unreasonable ti&e before
t%e resale )as &ade.
?t is not essential to t%e validity of a resale t%at notice of t%e
ti&e and 'lace of suc% resale s%ould be given by t%e seller to
t%e original buyer.
=%e seller is bound to e.ercise reasonable care and judg&ent
in &a/ing a resale, and subject to t%is re*uire&ent &ay &a/e
a resale eit%er by 'ublic or 'rivate sale. @e cannot, %o)ever,
directly or indirectly buy t%e goods.
Art. 16"6. =%e 'ersons dis*ualified to buy referred to in Articles
1"42 and 1"41, are also dis*ualified to beco&e lessees of t%e
t%ings &entioned t%erein.
Art. 113. 7ersons )%o are 'ro%ibited fro& giving eac% ot%er
any donation or advantage cannot enter into universal
'artners%i'.
Art. 1"24. =%e follo)ing contracts are ine.istent and void fro&
t%e beginning:
(1) =%ose )%ose cause, object or 'ur'ose is contrary
to la), &orals, good custo&s, 'ublic order or 'ublic
'olicy9
() =%ose )%ic% are absolutely si&ulated or fictitious9
(#) =%ose )%ose cause or object did not e.ist at t%e
ti&e of t%e transaction9
(") =%ose )%ose object is outside t%e co&&erce of
&en9
(5) =%ose )%ic% conte&'late an i&'ossible service9
(6) =%ose )%ere t%e intention of t%e 'arties relative to
t%e 'rinci'al object of t%e contract cannot be
ascertained9
(1) =%ose e.'ressly 'ro%ibited or declared void by
la).
Art. 31. 5very donation or grant of gratuitous advantage, direct
or indirect, bet)een t%e s'ouses during t%e &arriage s%all be
void, e.ce't &oderate gifts )%ic% t%e s'ouses &ay give eac%
ot%er on t%e occasion of any fa&ily rejoicing. =%e 'ro%ibition
s%all also a''ly to 'ersons living toget%er as %usband and )ife
)it%out a valid &arriage.
Art. 1". =%e ad&inistration and enjoy&ent of t%e conjugal
'artners%i' s%all belong to bot% s'ouses jointly. ?n case of
disagree&ent, t%e %usbandDs decision s%all 'revail, subject to
recourse to t%e court by t%e )ife for 'ro'er re&edy, )%ic% &ust
be availed of )it%in five years fro& t%e date of t%e contract
i&'le&enting suc% decision.
?n t%e event t%at one s'ouse is inca'acitated or ot%er)ise
unable to 'artici'ate in t%e ad&inistration of t%e conjugal
'ro'erties, t%e ot%er s'ouse &ay assu&e sole 'o)ers of
ad&inistration. =%ese 'o)ers do not include dis'osition or
encu&brance )it%out aut%ority of t%e court or t%e )ritten
consent of t%e ot%er s'ouse. ?n t%e absence of suc% aut%ority
or consent, t%e dis'osition or encu&brance s%all be void.
@o)ever, t%e transaction s%all be construed as a continuing
offer on t%e 'art of t%e consenting s'ouse and t%e t%ird 'erson,
and &ay be 'erfected as a binding contract u'on t%e
acce'tance by t%e ot%er s'ouse or aut%ori+ation by t%e court
before t%e offer is )it%dra)n by eit%er or bot% offerors.
Art. #". 5&anci'ation ta/es 'lace by t%e attain&ent of
&ajority. Enless ot%er)ise 'rovided, &ajority co&&ences at
t%e age of t)enty0one years.
5&anci'ation also ta/es 'lace:
(1) <y t%e &arriage of t%e &inor9 or
() <y t%e recording in t%e $ivil Begister of an agree&ent in a
'ublic instru&ent e.ecuted by t%e 'arent e.ercising 'arental
aut%ority and t%e &inor at least eig%teen years of age. ,uc%
e&anci'ation s%all be irrevocable.
BA 6324, Art >?? ,ecs. 1 and 3 of t%e 1431 $onstitution
$ognition and Fanifestation =%eory
. Object $ertain )%ic% is t%e ,ubject Fatter of t%e $ontract
,5$=?O( . 0 Object of $ontracts

Art. 1#"1. All t%ings )%ic% are not outside t%e co&&erce of
&en, including future t%ings, &ay be t%e object of a contract.
All rig%ts )%ic% are not intrans&issible &ay also be t%e object
of contracts.
(o contract &ay be entered into u'on future in%eritance e.ce't
in cases e.'ressly aut%ori+ed by la).
All services )%ic% are not contrary to la), &orals, good
custo&s, 'ublic order or 'ublic 'olicy &ay li/e)ise be t%e
object of a contract. (111a)
Art. 1#"3. ?&'ossible t%ings or services cannot be t%e object of
contracts. (11)
Art. 1#"4. =%e object of every contract &ust be deter&inate as
to its /ind. =%e fact t%at t%e *uantity is not deter&inate s%all
not be an obstacle to t%e e.istence of t%e contract, 'rovided it
is 'ossible to deter&ine t%e sa&e, )it%out t%e need of a ne)
contract bet)een t%e 'arties.
Art. 1#11. $ontracts ta/e effect only bet)een t%e 'arties, t%eir
assigns and %eirs, e.ce't in case )%ere t%e rig%ts and
obligations arising fro& t%e contract are not trans&issible by
t%eir nature, or by sti'ulation or by 'rovision of la). =%e %eir is
not liable beyond t%e value of t%e 'ro'erty %e received fro&
t%e decedent.
?f a contract s%ould contain so&e sti'ulation in favor of a t%ird
'erson, %e &ay de&and its fulfill&ent 'rovided %e
co&&unicated %is acce'tance to t%e obligor before its
revocation. A &ere incidental benefit or interest of a 'erson is
not sufficient. =%e contracting 'arties &ust %ave clearly and
deliberately conferred a favor u'on a t%ird 'erson.
t%e contrary.
#, $ause of t%e Obligation
,5$=?O( #. 0 $ause of $ontracts

Art. 1#52. ?n onerous contracts t%e cause is understood to be,
for eac% contracting 'arty, t%e 'restation or 'ro&ise of a t%ing
or service by t%e ot%er9 in re&uneratory ones, t%e service or
benefit )%ic% is re&unerated9 and in contracts of 'ure
beneficence, t%e &ere liberality of t%e benefactor. (11")
Art. 1#51. =%e 'articular &otives of t%e 'arties in entering into
a contract are different fro& t%e cause t%ereof. (n)
Art. 1#5. $ontracts )it%out cause, or )it% unla)ful cause,
'roduce no effect )%atever. =%e cause is unla)ful if it is
contrary to la), &orals, good custo&s, 'ublic order or 'ublic
'olicy. (115a)
Art. 1#5#. =%e state&ent of a false cause in contracts s%all
render t%e& void, if it s%ould not be 'roved t%at t%ey )ere
founded u'on anot%er cause )%ic% is true and la)ful. (116)
Art. 1#5". Alt%oug% t%e cause is not stated in t%e contract, it is
'resu&ed t%at it e.ists and is la)ful, unless t%e debtor 'roves
t%e contrary. (111)
Art. 1#55. 5.ce't in cases s'ecified by la), lesion or
inade*uacy of cause s%all not invalidate a contract, unless
t%ere %as been fraud, &ista/e or undue influence. (n)
". Delivery
5. Due Observance of t%e 7rescribed Aor&alities
A. Aor& of $ontracts
$@A7=5B #
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Art. 1#56. $ontracts s%all be obligatory, in )%atever for& t%ey
&ay %ave been entered into, 'rovided all t%e essential
re*uisites for t%eir validity are 'resent. @o)ever, )%en t%e la)
re*uires t%at a contract be in so&e for& in order t%at it &ay be
valid or enforceable, or t%at a contract be 'roved in a certain
)ay, t%at re*uire&ent is absolute and indis'ensable. ?n suc%
cases, t%e rig%t of t%e 'arties stated in t%e follo)ing article
cannot be e.ercised. (113a)
Art. 1#51. ?f t%e la) re*uires a docu&ent or ot%er s'ecial for&,
as in t%e acts and contracts enu&erated in t%e follo)ing article,
t%e contracting 'arties &ay co&'el eac% ot%er to observe t%at
for&, once t%e contract %as been 'erfected. =%is rig%t &ay be
e.ercised si&ultaneously )it% t%e action u'on t%e contract.
Art. 1#53. =%e follo)ing &ust a''ear in a 'ublic docu&ent:
(1) Acts and contracts )%ic% %ave for t%eir object t%e
creation, trans&ission, &odification or e.tinguis%&ent
of real rig%ts over i&&ovable 'ro'erty9 sales of real
'ro'erty or of an interest t%erein a governed by
Articles 1"2#, (o. , and 1"259
() =%e cession, re'udiation or renunciation of
%ereditary rig%ts or of t%ose of t%e conjugal
'artners%i' of gains9
(#) =%e 'o)er to ad&inister 'ro'erty, or any ot%er
'o)er )%ic% %as for its object an act a''earing or
)%ic% s%ould a''ear in a 'ublic docu&ent, or s%ould
'rejudice a t%ird 'erson9
(") =%e cession of actions or rig%ts 'roceeding fro&
an act a''earing in a 'ublic docu&ent.
All ot%er contracts )%ere t%e a&ount involved e.ceeds five
%undred 'esos &ust a''ear in )riting, even a 'rivate one. <ut
sales of goods, c%attels or t%ings in action are governed by
Articles, 1"2#, (o. and 1"25.
1. Any Aor&
. ,'ecial Aor&
a. 8alidity
Art. 1"3. =%e donation of a &ovable &ay be &ade orally or in
)riting.
An oral donation re*uires t%e si&ultaneous delivery of t%e t%ing
or of t%e docu&ent re'resenting t%e rig%t donated.
?f t%e value of t%e 'ersonal 'ro'erty donated e.ceeds five
t%ousand 'esos, t%e donation and t%e acce'tance s%all be
&ade in )riting, ot%er)ise, t%e donation s%all be void. (6#a)
donee &ust satisfy.
Art. 11"". A sti'ulation bet)een t%e co&&on carrier and t%e
s%i''er or o)ner li&iting t%e liability of t%e for&er for t%e loss,
destruction, or deterioration of t%e goods to a degree less t%an
e.traordinary diligence s%all be valid, 'rovided it be:
(1) ?n )riting, signed by t%e s%i''er or o)ner9
() ,u''orted by a valuable consideration ot%er t%an
t%e service rendered by t%e co&&on carrier9 and
(#) Beasonable, just and not contrary to 'ublic 'olicy.
Art. 111#. A contract of 'artners%i' is void, )%enever
i&&ovable 'ro'erty is contributed t%ereto, if an inventory of
said 'ro'erty is not &ade, signed by t%e 'arties, and attac%ed
to t%e 'ublic instru&ent.
Art. 131". -%en a sale of a 'iece of land or any interest
t%erein is t%roug% an agent, t%e aut%ority of t%e latter s%all be
in )riting9 ot%er)ise, t%e sale s%all be void.
Art. 1456. (o interest s%all be due unless it %as been e.'ressly
sti'ulated in )riting. (1155a)
Art. 1#". =%e a&ount of t%e 'rinci'al and of t%e interest s%all
be s'ecified in )riting9 ot%er)ise, t%e contract of antic%resis
s%all be void.
Act 11"1, ,ec.
b. 5nforceability
Art. 1"2#. =%e follo)ing contracts are unenforceable, unless
t%ey are ratified:
(1) =%ose entered into in t%e na&e of anot%er 'erson
by one )%o %as been given no aut%ority or legal
re'resentation, or )%o %as acted beyond %is 'o)ers9
() =%ose t%at do not co&'ly )it% t%e ,tatute of
Arauds as set fort% in t%is nu&ber. ?n t%e follo)ing
cases an agree&ent %ereafter &ade s%all be
unenforceable by action, unless t%e sa&e, or so&e
note or &e&orandu&, t%ereof, be in )riting, and
subscribed by t%e 'arty c%arged, or by %is agent9
evidence, t%erefore, of t%e agree&ent cannot be
received )it%out t%e )riting, or a secondary evidence
of its contents:
(a) An agree&ent t%at by its ter&s is not to
be 'erfor&ed )it%in a year fro& t%e &a/ing
t%ereof9
(b) A s'ecial 'ro&ise to ans)er for t%e debt,
default, or &iscarriage of anot%er9
(c) An agree&ent &ade in consideration of
&arriage, ot%er t%an a &utual 'ro&ise to
&arry9
(d) An agree&ent for t%e sale of goods,
c%attels or t%ings in action, at a 'rice not less
t%an five %undred 'esos, unless t%e buyer
acce't and receive 'art of suc% goods and
c%attels, or t%e evidences, or so&e of t%e&,
of suc% t%ings in action or 'ay at t%e ti&e
so&e 'art of t%e 'urc%ase &oney9 but )%en
a sale is &ade by auction and entry is &ade
by t%e auctioneer in %is sales boo/, at t%e
ti&e of t%e sale, of t%e a&ount and /ind of
'ro'erty sold, ter&s of sale, 'rice, na&es of
t%e 'urc%asers and 'erson on )%ose
account t%e sale is &ade, it is a sufficient
&e&orandu&9
(e) An agree&ent of t%e leasing for a longer
'eriod t%an one year, or for t%e sale of real
'ro'erty or of an interest t%erein9
(f) A re'resentation as to t%e credit of a t%ird
'erson.
(#) =%ose )%ere bot% 'arties are inca'able of giving consent to
a contract.
Art. 1313. ,'ecial 'o)ers of attorney are necessary in t%e
follo)ing cases:
(1) =o &a/e suc% 'ay&ents as are not usually
considered as acts of ad&inistration9
() =o effect novations )%ic% 'ut an end to obligations
already in e.istence at t%e ti&e t%e agency )as
constituted9
(#) =o co&'ro&ise, to sub&it *uestions to arbitration,
to renounce t%e rig%t to a''eal fro& a judg&ent, to
)aive objections to t%e venue of an action or to
abandon a 'rescri'tion already ac*uired9
(") =o )aive any obligation gratuitously9
(5) =o enter into any contract by )%ic% t%e o)ners%i'
of an i&&ovable is trans&itted or ac*uired eit%er
gratuitously or for a valuable consideration9
(6) =o &a/e gifts, e.ce't custo&ary ones for c%arity
or t%ose &ade to e&'loyees in t%e business
&anaged by t%e agent9
(1) =o loan or borro) &oney, unless t%e latter act be
urgent and indis'ensable for t%e 'reservation of t%e
t%ings )%ic% are under ad&inistration9
(3) =o lease any real 'ro'erty to anot%er 'erson for
&ore t%an one year9
(4) =o bind t%e 'rinci'al to render so&e service
)it%out co&'ensation9
(12) =o bind t%e 'rinci'al in a contract of 'artners%i'9
(11) =o obligate t%e 'rinci'al as a guarantor or surety9
(1) =o create or convey real rig%ts over i&&ovable
'ro'erty9
(1#) =o acce't or re'udiate an in%eritance9
(1") =o ratify or recogni+e obligations contracted
before t%e agency9
(15) Any ot%er act of strict do&inion.
b. Greater 5fficacy or $onvenience
Art. 1#53. =%e follo)ing &ust a''ear in a 'ublic docu&ent:
(1) Acts and contracts )%ic% %ave for t%eir object t%e
creation, trans&ission, &odification or e.tinguis%&ent
of real rig%ts over i&&ovable 'ro'erty9 sales of real
'ro'erty or of an interest t%erein a governed by
Articles 1"2#, (o. , and 1"259
() =%e cession, re'udiation or renunciation of
%ereditary rig%ts or of t%ose of t%e conjugal
'artners%i' of gains9
(#) =%e 'o)er to ad&inister 'ro'erty, or any ot%er
'o)er )%ic% %as for its object an act a''earing or
)%ic% s%ould a''ear in a 'ublic docu&ent, or s%ould
'rejudice a t%ird 'erson9
(") =%e cession of actions or rig%ts 'roceeding fro&
an act a''earing in a 'ublic docu&ent.
All ot%er contracts )%ere t%e a&ount involved e.ceeds five
%undred 'esos &ust a''ear in )riting, even a 'rivate one. <ut
sales of goods, c%attels or t%ings in action are governed by
Articles, 1"2#, (o. and 1"25.
G. Befor&ation of $ontracts

$@A7=5B "
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Art. 1#54. -%en, t%ere %aving been a &eeting of t%e &inds of
t%e 'arties to a contract, t%eir true intention is not e.'ressed in
t%e instru&ent 'ur'orting to e&body t%e agree&ent, by reason
of &ista/e, fraud, ine*uitable conduct or accident, one of t%e
'arties &ay as/ for t%e refor&ation of t%e instru&ent to t%e end
t%at suc% true intention &ay be e.'ressed.
?f &ista/e, fraud, ine*uitable conduct, or accident %as
'revented a &eeting of t%e &inds of t%e 'arties, t%e 'ro'er
re&edy is not refor&ation of t%e instru&ent but annul&ent of
t%e contract.
Art. 1#62. =%e 'rinci'les of t%e general la) on t%e refor&ation
of instru&ents are %ereby ado'ted insofar as t%ey are not in
conflict )it% t%e 'rovisions of t%is $ode.
Art. 1#61. -%en a &utual &ista/e of t%e 'arties causes t%e
failure of t%e instru&ent to disclose t%eir real agree&ent, said
instru&ent &ay be refor&ed.
Art. 1#6. ?f one 'arty )as &ista/en and t%e ot%er acted
fraudulently or ine*uitably in suc% a )ay t%at t%e instru&ent
does not s%o) t%eir true intention, t%e for&er &ay as/ for t%e
refor&ation of t%e instru&ent.
Art. 1#6#. -%en one 'arty )as &ista/en and t%e ot%er /ne) or
believed t%at t%e instru&ent did not state t%eir real agree&ent,
but concealed t%at fact fro& t%e for&er, t%e instru&ent &ay be
refor&ed.
Art. 1#6". -%en t%roug% t%e ignorance, lac/ of s/ill,
negligence or bad fait% on t%e 'art of t%e 'erson drafting t%e
instru&ent or of t%e cler/ or ty'ist, t%e instru&ent does not
e.'ress t%e true intention of t%e 'arties, t%e courts &ay order
t%at t%e instru&ent be refor&ed.
Art. 1#65. ?f t)o 'arties agree u'on t%e &ortgage or 'ledge of
real or 'ersonal 'ro'erty, but t%e instru&ent states t%at t%e
'ro'erty is sold absolutely or )it% a rig%t of re'urc%ase,
refor&ation of t%e instru&ent is 'ro'er.
Art. 1#66. =%ere s%all be no refor&ation in t%e follo)ing cases:
(1) ,i&'le donations inter vivos )%erein no condition
is i&'osed9
() -ills9
(#) -%en t%e real agree&ent is void.
Art. 1#61. -%en one of t%e 'arties %as broug%t an action to
enforce t%e instru&ent, %e cannot subse*uently as/ for its
refor&ation.
Art. 1#63. Befor&ation &ay be ordered at t%e instance of
eit%er 'arty or %is successors in interest, if t%e &ista/e )as
&utual9 ot%er)ise, u'on 'etition of t%e injured 'arty, or %is
%eirs and assigns.
Art. 1#64. =%e 'rocedure for t%e refor&ation of instru&ent s%all
be governed by rules of court to be 'ro&ulgated by t%e
,u're&e $ourt.
@. ?nter'retation of $ontracts
$@A7=5B 5
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Art. 1#12. ?f t%e ter&s of a contract are clear and leave no
doubt u'on t%e intention of t%e contracting 'arties, t%e literal
&eaning of its sti'ulations s%all control.
?f t%e )ords a''ear to be contrary to t%e evident intention of
t%e 'arties, t%e latter s%all 'revail over t%e for&er. (131)
Art. 1#11. ?n order to judge t%e intention of t%e contracting
'arties, t%eir conte&'oraneous and subse*uent acts s%all be
'rinci'ally considered. (13)
Art. 1#1. @o)ever general t%e ter&s of a contract &ay be,
t%ey s%all not be understood to co&'re%end t%ings t%at are
distinct and cases t%at are different fro& t%ose u'on )%ic% t%e
'arties intended to agree. (13#)
Art. 1#1#. ?f so&e sti'ulation of any contract s%ould ad&it of
several &eanings, it s%all be understood as bearing t%at i&'ort
)%ic% is &ost ade*uate to render it effectual. (13")
Art. 1#1". =%e various sti'ulations of a contract s%all be
inter'reted toget%er, attributing to t%e doubtful ones t%at sense
)%ic% &ay result fro& all of t%e& ta/en jointly. (135)
Art. 1#15. -ords )%ic% &ay %ave different significations s%all
be understood in t%at )%ic% is &ost in /ee'ing )it% t%e nature
and object of t%e contract. (136)
Art. 1#16. =%e usage or custo& of t%e 'lace s%all be borne in
&ind in t%e inter'retation of t%e a&biguities of a contract, and
s%all fill t%e o&ission of sti'ulations )%ic% are ordinarily
establis%ed. (131)
Art. 1#11. =%e inter'retation of obscure )ords or sti'ulations in
a contract s%all not favor t%e 'arty )%o caused t%e obscurity.
Art. 1#13. -%en it is absolutely i&'ossible to settle doubts by
t%e rules establis%ed in t%e 'receding articles, and t%e doubts
refer to incidental circu&stances of a gratuitous contract, t%e
least trans&ission of rig%ts and interests s%all 'revail. ?f t%e
contract is onerous, t%e doubt s%all be settled in favor of t%e
greatest reci'rocity of interests.
?f t%e doubts are cast u'on t%e 'rinci'al object of t%e contract
in suc% a )ay t%at it cannot be /no)n )%at &ay %ave been t%e
intention or )ill of t%e 'arties, t%e contract s%all be null and
void. (134)
Art. 1#14. =%e 'rinci'les of inter'retation stated in Bule 1# of
t%e Bules of $ourt s%all li/e)ise be observed in t%e
construction of contracts.
?. !inds of $ontracts as to 8alidity
1. 8alid and <inding
. 8alid but Defective
a. Bescissible $ontracts
$@A7=5B 6
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Art. 1#32. $ontracts validly agreed u'on &ay be rescinded in
t%e cases establis%ed by la). (142)
Art. 1#31. =%e follo)ing contracts are rescissible:
(1) =%ose )%ic% are entered into by guardians
)%enever t%e )ards )%o& t%ey re'resent suffer
lesion by &ore t%an one0fourt% of t%e value of t%e
t%ings )%ic% are t%e object t%ereof9
() =%ose agreed u'on in re'resentation of
absentees, if t%e latter suffer t%e lesion stated in t%e
'receding nu&ber9
(#) =%ose underta/en in fraud of creditors )%en t%e
latter cannot in any ot%er &anner collect t%e clai&s
due t%e&9
(") =%ose )%ic% refer to t%ings under litigation if t%ey
%ave been entered into by t%e defendant )it%out t%e
/no)ledge and a''roval of t%e litigants or of
co&'etent judicial aut%ority9
(5) All ot%er contracts s'ecially declared by la) to be
subject to rescission. (141a)
Art. 1#3. 7ay&ents &ade in a state of insolvency for
obligations to )%ose fulfill&ent t%e debtor could not be
co&'elled at t%e ti&e t%ey )ere effected, are also rescissible.
Art. 1#3#. =%e action for rescission is subsidiary9 it cannot be
instituted e.ce't )%en t%e 'arty suffering da&age %as no ot%er
legal &eans to obtain re'aration for t%e sa&e. (14")
Art. 1#3". Bescission s%all be only to t%e e.tent necessary to
cover t%e da&ages caused. (n)
Art. 1#35. Bescission creates t%e obligation to return t%e t%ings
)%ic% )ere t%e object of t%e contract, toget%er )it% t%eir fruits,
and t%e 'rice )it% its interest9 conse*uently, it can be carried
out only )%en %e )%o de&ands rescission can return )%atever
%e &ay be obliged to restore.
(eit%er s%all rescission ta/e 'lace )%en t%e t%ings )%ic% are
t%e object of t%e contract are legally in t%e 'ossession of t%ird
'ersons )%o did not act in bad fait%.
?n t%is case, inde&nity for da&ages &ay be de&anded fro&
t%e 'erson causing t%e loss. (145)
Art. 1#36. Bescission referred to in (os. 1 and of Article 1#31
s%all not ta/e 'lace )it% res'ect to contracts a''roved by t%e
courts. (146a)
Art. 1#31. All contracts by virtue of )%ic% t%e debtor alienates
'ro'erty by gratuitous title are 'resu&ed to %ave been entered
into in fraud of creditors, )%en t%e donor did not reserve
sufficient 'ro'erty to 'ay all debts contracted before t%e
donation.
Alienations by onerous title are also 'resu&ed fraudulent )%en
&ade by 'ersons against )%o& so&e judg&ent %as been
issued. =%e decision or attac%&ent need not refer to t%e
'ro'erty alienated, and need not %ave been obtained by t%e
'arty see/ing t%e rescission.
?n addition to t%ese 'resu&'tions, t%e design to defraud
creditors &ay be 'roved in any ot%er &anner recogni+ed by
t%e la) of evidence. (141a)
Art. 1#33. -%oever ac*uires in bad fait% t%e t%ings alienated in
fraud of creditors, s%all inde&nify t%e latter for da&ages
suffered by t%e& on account of t%e alienation, )%enever, due
to any cause, it s%ould be i&'ossible for %i& to return t%e&.
?f t%ere are t)o or &ore alienations, t%e first ac*uirer s%all be
liable first, and so on successively. (143a)
Art. 1#34. =%e action to clai& rescission &ust be co&&enced
)it%in four years.
Aor 'ersons under guardians%i' and for absentees, t%e 'eriod
of four years s%all not begin until t%e ter&ination of t%e for&erDs
inca'acity, or until t%e do&icile of t%e latter is /no)n.
Articles 1#35 and 1#33 and t%e Fortgage :a).
b. 8oidable $ontracts
$@A7=5B 1
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Art. 1#42. =%e follo)ing contracts are voidable or annullable,
even t%oug% t%ere &ay %ave been no da&age to t%e
contracting 'arties:
(1) =%ose )%ere one of t%e 'arties is inca'able of
giving consent to a contract9
() =%ose )%ere t%e consent is vitiated by &ista/e,
violence, inti&idation, undue influence or fraud.
=%ese contracts are binding, unless t%ey are annulled by a
'ro'er action in court. =%ey are susce'tible of ratification. (n)
Art. 1#41. =%e action for annul&ent s%all be broug%t )it%in four
years.
=%is 'eriod s%all begin:
?n cases of inti&idation, violence or undue influence,
fro& t%e ti&e t%e defect of t%e consent ceases.
?n case of &ista/e or fraud, fro& t%e ti&e of t%e
discovery of t%e sa&e.
And )%en t%e action refers to contracts entered into by &inors
or ot%er inca'acitated 'ersons, fro& t%e ti&e t%e guardians%i'
ceases. (1#21a)
Art. 1#4. Batification e.tinguis%es t%e action to annul a
voidable contract. (1#24a)
Art. 1#4#. Batification &ay be effected e.'ressly or tacitly. ?t is
understood t%at t%ere is a tacit ratification if, )it% /no)ledge of
t%e reason )%ic% renders t%e contract voidable and suc%
reason %aving ceased, t%e 'erson )%o %as a rig%t to invo/e it
s%ould e.ecute an act )%ic% necessarily i&'lies an intention to
)aive %is rig%t. (1#11a)
Art. 1#4". Batification &ay be effected by t%e guardian of t%e
inca'acitated 'erson. (n)
Art. 1#45. Batification does not re*uire t%e confor&ity of t%e
contracting 'arty )%o %as no rig%t to bring t%e action for
annul&ent. (1#1)
Art. 1#46. Batification cleanses t%e contract fro& all its defects
fro& t%e &o&ent it )as constituted. (1#1#)
Art. 1#41. =%e action for t%e annul&ent of contracts &ay be
instituted by all )%o are t%ereby obliged 'rinci'ally or
subsidiarily. @o)ever, 'ersons )%o are ca'able cannot allege
t%e inca'acity of t%ose )it% )%o& t%ey contracted9 nor can
t%ose )%o e.erted inti&idation, violence, or undue influence, or
e&'loyed fraud, or caused &ista/e base t%eir action u'on
t%ese fla)s of t%e contract. (1#2a)
Art. 1#43. An obligation %aving been annulled, t%e contracting
'arties s%all restore to eac% ot%er t%e t%ings )%ic% %ave been
t%e subject &atter of t%e contract, )it% t%eir fruits, and t%e 'rice
)it% its interest, e.ce't in cases 'rovided by la).
?n obligations to render service, t%e value t%ereof s%all be t%e
basis for da&ages. (1#2#a)
Art. 1#44. -%en t%e defect of t%e contract consists in t%e
inca'acity of one of t%e 'arties, t%e inca'acitated 'erson is not
obliged to &a/e any restitution e.ce't insofar as %e %as been
benefited by t%e t%ing or 'rice received by %i&. (1#2")
Art. 1"22. -%enever t%e 'erson obliged by t%e decree of
annul&ent to return t%e t%ing can not do so because it %as
been lost t%roug% %is fault, %e s%all return t%e fruits received
and t%e value of t%e t%ing at t%e ti&e of t%e loss, )it% interest
fro& t%e sa&e date. (1#21a)
Art. 1"21. =%e action for annul&ent of contracts s%all be
e.tinguis%ed )%en t%e t%ing )%ic% is t%e object t%ereof is lost
t%roug% t%e fraud or fault of t%e 'erson )%o %as a rig%t to
institute t%e 'roceedings.
?f t%e rig%t of action is based u'on t%e inca'acity of any one of
t%e contracting 'arties, t%e loss of t%e t%ing s%all not be an
obstacle to t%e success of t%e action, unless said loss too/
'lace t%roug% t%e fraud or fault of t%e 'laintiff. (1#1"a)
Art. 1"2. As long as one of t%e contracting 'arties does not
restore )%at in virtue of t%e decree of annul&ent %e is bound
to return, t%e ot%er cannot be co&'elled to co&'ly )it% )%at is
incu&bent u'on %i&.
Art. 1#1. =%e follo)ing cannot give consent to a contract:
(1) Ene&anci'ated &inors9
() ?nsane or de&ented 'ersons, and deaf0&utes )%o
do not /no) %o) to )rite. (16#a)
Art. 1#3. $ontracts entered into during a lucid interval are
valid. $ontracts agreed to in a state of drun/enness or during a
%y'notic s'ell are voidable. (n)
Art. 1##2. A contract )%ere consent is given t%roug% &ista/e,
violence, inti&idation, undue influence, or fraud is voidable.
c. Enenforceable $ontracts
$@A7=5B 3
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Art. 1"2#. =%e follo)ing contracts are unenforceable, unless
t%ey are ratified:
(1) =%ose entered into in t%e na&e of anot%er 'erson
by one )%o %as been given no aut%ority or legal
re'resentation, or )%o %as acted beyond %is 'o)ers9
() =%ose t%at do not co&'ly )it% t%e ,tatute of
Arauds as set fort% in t%is nu&ber. ?n t%e follo)ing
cases an agree&ent %ereafter &ade s%all be
unenforceable by action, unless t%e sa&e, or so&e
note or &e&orandu&, t%ereof, be in )riting, and
subscribed by t%e 'arty c%arged, or by %is agent9
evidence, t%erefore, of t%e agree&ent cannot be
received )it%out t%e )riting, or a secondary evidence
of its contents:
(a) An agree&ent t%at by its ter&s is not to
be 'erfor&ed )it%in a year fro& t%e &a/ing
t%ereof9
(b) A s'ecial 'ro&ise to ans)er for t%e debt,
default, or &iscarriage of anot%er9
(c) An agree&ent &ade in consideration of
&arriage, ot%er t%an a &utual 'ro&ise to
&arry9
(d) An agree&ent for t%e sale of goods,
c%attels or t%ings in action, at a 'rice not less
t%an five %undred 'esos, unless t%e buyer
acce't and receive 'art of suc% goods and
c%attels, or t%e evidences, or so&e of t%e&,
of suc% t%ings in action or 'ay at t%e ti&e
so&e 'art of t%e 'urc%ase &oney9 but )%en
a sale is &ade by auction and entry is &ade
by t%e auctioneer in %is sales boo/, at t%e
ti&e of t%e sale, of t%e a&ount and /ind of
'ro'erty sold, ter&s of sale, 'rice, na&es of
t%e 'urc%asers and 'erson on )%ose
account t%e sale is &ade, it is a sufficient
&e&orandu&9
(e) An agree&ent of t%e leasing for a longer
'eriod t%an one year, or for t%e sale of real
'ro'erty or of an interest t%erein9
(f) A re'resentation as to t%e credit of a t%ird
'erson.
(#) =%ose )%ere bot% 'arties are inca'able of giving
consent to a contract.
Art. 1"2". Enaut%ori+ed contracts are governed by Article 1#11
and t%e 'rinci'les of agency in =itle > of t%is <oo/.
Art. 1"25. $ontracts infringing t%e ,tatute of Arauds, referred
to in (o. of Article 1"2#, are ratified by t%e failure to object to
t%e 'resentation of oral evidence to 'rove t%e sa&e, or by t%e
acce'tance of benefit under t%e&.
Art. 1"26. -%en a contract is enforceable under t%e ,tatute of
Arauds, and a 'ublic docu&ent is necessary for its registration
in t%e Begistry of Deeds, t%e 'arties &ay avail t%e&selves of
t%e rig%t under Article 1#51.
Art. 1"21. ?n a contract )%ere bot% 'arties are inca'able of
giving consent, e.'ress or i&'lied ratification by t%e 'arent, or
guardian, as t%e case &ay be, of one of t%e contracting 'arties
s%all give t%e contract t%e sa&e effect as if only one of t%e&
)ere inca'acitated.
?f ratification is &ade by t%e 'arents or guardians, as t%e case
&ay be, of bot% contracting 'arties, t%e contract s%all be
validated fro& t%e ince'tion.
Art. 1"23. Enenforceable contracts cannot be assailed by t%ird
'ersons.
Art. 1#11. (o one &ay contract in t%e na&e of anot%er )it%out
being aut%ori+ed by t%e latter, or unless %e %as by la) a rig%t
to re'resent %i&.
A contract entered into in t%e na&e of anot%er by one )%o %as
no aut%ority or legal re'resentation, or )%o %as acted beyond
%is 'o)ers, s%all be unenforceable, unless it is ratified,
e.'ressly or i&'liedly, by t%e 'erson on )%ose be%alf it %as
been e.ecuted, before it is revo/ed by t%e ot%er contracting
'arty.
Art. 1313. ,'ecial 'o)ers of attorney are necessary in t%e
follo)ing cases:
(1) =o &a/e suc% 'ay&ents as are not usually
considered as acts of ad&inistration9
() =o effect novations )%ic% 'ut an end to obligations
already in e.istence at t%e ti&e t%e agency )as
constituted9
(#) =o co&'ro&ise, to sub&it *uestions to arbitration,
to renounce t%e rig%t to a''eal fro& a judg&ent, to
)aive objections to t%e venue of an action or to
abandon a 'rescri'tion already ac*uired9
(") =o )aive any obligation gratuitously9
(5) =o enter into any contract by )%ic% t%e o)ners%i'
of an i&&ovable is trans&itted or ac*uired eit%er
gratuitously or for a valuable consideration9
(6) =o &a/e gifts, e.ce't custo&ary ones for c%arity
or t%ose &ade to e&'loyees in t%e business
&anaged by t%e agent9
(1) =o loan or borro) &oney, unless t%e latter act be
urgent and indis'ensable for t%e 'reservation of t%e
t%ings )%ic% are under ad&inistration9
(3) =o lease any real 'ro'erty to anot%er 'erson for
&ore t%an one year9
(4) =o bind t%e 'rinci'al to render so&e service
)it%out co&'ensation9
(12) =o bind t%e 'rinci'al in a contract of 'artners%i'9
(11) =o obligate t%e 'rinci'al as a guarantor or surety9
(1) =o create or convey real rig%ts over i&&ovable
'ro'erty9
(1#) =o acce't or re'udiate an in%eritance9
(1") =o ratify or recogni+e obligations contracted
before t%e agency9
(15) Any ot%er act of strict do&inion.
#. 8oid or ine.istent $ontract
$@A7=5B 4
8O?D A(D ?(5>?,=5(= $O(=BA$=,

Art. 1"24. =%e follo)ing contracts are ine.istent and void fro&
t%e beginning:
(1) =%ose )%ose cause, object or 'ur'ose is contrary
to la), &orals, good custo&s, 'ublic order or 'ublic
'olicy9
() =%ose )%ic% are absolutely si&ulated or fictitious9
(#) =%ose )%ose cause or object did not e.ist at t%e
ti&e of t%e transaction9
(") =%ose )%ose object is outside t%e co&&erce of
&en9
(5) =%ose )%ic% conte&'late an i&'ossible service9
(6) =%ose )%ere t%e intention of t%e 'arties relative to
t%e 'rinci'al object of t%e contract cannot be
ascertained9
(1) =%ose e.'ressly 'ro%ibited or declared void by
la).
=%ese contracts cannot be ratified. (eit%er can t%e rig%t to set
u' t%e defense of illegality be )aived.
Art. 1"12. =%e action or defense for t%e declaration of t%e
ine.istence of a contract does not 'rescribe.
Art. 1"11. -%en t%e nullity 'roceeds fro& t%e illegality of t%e
cause or object of t%e contract, and t%e act constitutes a
cri&inal offense, bot% 'arties being in 'ari delicto, t%ey s%all
%ave no action against eac% ot%er, and bot% s%all be
'rosecuted. Foreover, t%e 'rovisions of t%e 7enal
$ode relative to t%e dis'osal of effects or instru&ents of a
cri&e s%all be a''licable to t%e t%ings or t%e 'rice of t%e
contract.
=%is rule s%all be a''licable )%en only one of t%e 'arties is
guilty9 but t%e innocent one &ay clai& )%at %e %as given, and
s%all not be bound to co&'ly )it% %is 'ro&ise. (1#25)
Art. 1"1. ?f t%e act in )%ic% t%e unla)ful or forbidden cause
consists does not constitute a cri&inal offense, t%e follo)ing
rules s%all be observed:
(1) -%en t%e fault is on t%e 'art of bot% contracting
'arties, neit%er &ay recover )%at %e %as given by
virtue of t%e contract, or de&and t%e 'erfor&ance of
t%e ot%erDs underta/ing9
() -%en only one of t%e contracting 'arties is at fault,
%e cannot recover )%at %e %as given by reason of t%e
contract, or as/ for t%e fulfill&ent of )%at %as been
'ro&ised %i&. =%e ot%er, )%o is not at fault, &ay
de&and t%e return of )%at %e %as given )it%out any
obligation to co&'ly %is 'ro&ise. (1#26)
Art. 1"1#. ?nterest 'aid in e.cess of t%e interest allo)ed by t%e
usury la)s &ay be recovered by t%e debtor, )it% interest
t%ereon fro& t%e date of t%e 'ay&ent.
Art. 1"1". -%en &oney is 'aid or 'ro'erty delivered for an
illegal 'ur'ose, t%e contract &ay be re'udiated by one of t%e
'arties before t%e 'ur'ose %as been acco&'lis%ed, or before
any da&age %as been caused to a t%ird 'erson. ?n suc% case,
t%e courts &ay, if t%e 'ublic interest )ill t%us be subserved,
allo) t%e 'arty re'udiating t%e contract to recover t%e &oney
or 'ro'erty.
Art. 1"15. -%ere one of t%e 'arties to an illegal contract is
inca'able of giving consent, t%e courts &ay, if t%e interest of
justice so de&ands allo) recovery of &oney or 'ro'erty
delivered by t%e inca'acitated 'erson.
Art. 1"16. -%en t%e agree&ent is not illegal 'er se but is
&erely 'ro%ibited, and t%e 'ro%ibition by t%e la) is designated
for t%e 'rotection of t%e 'laintiff, %e &ay, if 'ublic 'olicy is
t%ereby en%anced, recover )%at %e %as 'aid or delivered.
Art. 1"11. -%en t%e 'rice of any article or co&&odity is
deter&ined by statute, or by aut%ority of la), any 'erson
'aying any a&ount in e.cess of t%e &a.i&u& 'rice allo)ed
&ay recover suc% e.cess.
Art. 1"13. -%en t%e la) fi.es, or aut%ori+es t%e fi.ing of t%e
&a.i&u& nu&ber of %ours of labor, and a contract is entered
into )%ereby a laborer underta/es to )or/ longer t%an t%e
&a.i&u& t%us fi.ed, %e &ay de&and additional co&'ensation
for service rendered beyond t%e ti&e li&it.
Art. 1"14. -%en t%e la) sets, or aut%ori+es t%e setting of a
&ini&u& )age for laborers, and a contract is agreed u'on by
)%ic% a laborer acce'ts a lo)er )age, %e s%all be entitled to
recover t%e deficiency.
Art. 1"2. ?n case of a divisible contract, if t%e illegal ter&s can
be se'arated fro& t%e legal ones, t%e latter &ay be enforced.
Art. 1"1. =%e defense of illegality of contract is not available
to t%ird 'ersons )%ose interests are not directly affected.
Art. 1". A contract )%ic% is t%e direct result of a 'revious
illegal contract, is also void and ine.istent.
Art. 1#13. =%ere is no contract unless t%e follo)ing re*uisites
concur:
(1) $onsent of t%e contracting 'arties9
() Object certain )%ic% is t%e subject &atter of t%e
contract9
(#) $ause of t%e obligation )%ic% is establis%ed.
Art. 1#5#. =%e state&ent of a false cause in contracts s%all
render t%e& void, if it s%ould not be 'roved t%at t%ey )ere
founded u'on anot%er cause )%ic% is true and la)ful.
Art. 1#13. -%en it is absolutely i&'ossible to settle doubts by
t%e rules establis%ed in t%e 'receding articles, and t%e doubts
refer to incidental circu&stances of a gratuitous contract, t%e
least trans&ission of rig%ts and interests s%all 'revail. ?f t%e
contract is onerous, t%e doubt s%all be settled in favor of t%e
greatest reci'rocity of interests.
?f t%e doubts are cast u'on t%e 'rinci'al object of t%e contract
in suc% a )ay t%at it cannot be /no)n )%at &ay %ave been t%e
intention or )ill of t%e 'arties, t%e contract s%all be null and
void.
Art. 1343. ?f t%e agent contracts in t%e na&e of t%e 'rinci'al,
e.ceeding t%e sco'e of %is aut%ority, and t%e 'rinci'al does not
ratify t%e contract, it s%all be void if t%e 'arty )it% )%o& t%e
agent contracted is a)are of t%e li&its of t%e 'o)ers granted
by t%e 'rinci'al. ?n t%is case, %o)ever, t%e agent is liable if %e
undertoo/ to secure t%e 'rinci'alDs ratification.

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