Atty Uribe - Civil Law Review 2 - Codal Provisions

CIVIL
Based on the outline of ATTY. CRISOSTOMO URIBE
LAW REVIEW 2
I. OBLIGATIONS
II. CONTRACTS
a. SPECIAL CONTRACTS
1) SALE
2) BARTER
3) LEASE
4) LOAN
5) DEPOSIT
6) ALEATORY CONTRACTS
7) GUARANTY AND
SURETYSHIP
8) PLEDGE, MORTGAGE,
ANTICHRESIS
b. PREPARATORY CONTRACTS
1) AGENCY
2) PARTNERSHIP
3) TRUSTS
III. EXTRA-CONTRACTUAL
OBLIGATIONS
a. LAW
b. QUASI-CONTRACTS
c. DELICTS
d. QUASI-DELICTS
IV. DAMAGES
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C. DISJUNCTIVE there are several obligations and
only one or some of them must be fulfilled
I. OBLIGATIONS
(A.) IN GENERAL
(B.) SOURCES
(C.) COMPLIANCE
(D.) KINDS OF CIVIL OBLIGATIONS
(E.) BREACH
(F.) REMEDIES FOR BREACH
(G.) MODES OF EXTINGUISHMENT
4. AS TO PERFORMANCE OF PRESTATION
(ARTS. 1221-1225, 1209-1210)
(A.) IN GENERAL
5. AS TO THE PRESENCE OF AN ACCESSORY

UNDERTAKING IN CASE OF BREACH
A. DIVISIBLE
B. INDIVISIBLE
C. JOINT INDIVISIBLE
D. SOLIDARY INDIVISIBLE
1. DEFINITION Art. 1156
WITH A PENAL CLAUSE (distinguish from

liquidated damages)
(ARTS. 122601230)
2. KINDS OF OBLIGATIONS AS TO BASIS &

ENFORCEABILITY
Arts. 1423-1430; 1139-1155
Title III. - NATURAL OBLIGATIONS
(E.) BREACH OF OBLIGATIONS (ART 1170)
PRESCRIPTION OF ACTIONS
I. Manner of Breach
3. ELEMENTS OF OBLIGATIONS
1. FRAUD (ARTS. 1171, 1338, 1344)

2. NEGLIGENCE (ARTS. 1171-1173)
3. DELAY (ARTS. 1169, 1165, 1786, 1788, 1896,
1942)
4. ANY OTHER MANNER OF CONTRAVENTION
(B.) SOURCES OF OBLIGATIONS

1.
2.
3.
4.
5.
LAW Art. 1158

CONTRACTS Arts. 1159, 1305
QUASI-CONTRACTS Arts. 1160, 2142-2175
a. NEGOTORIUM GESTIO
b. SOLUTIO INDEBITI
c. OTHER QUASI-CONTRACTS
DELICTS (ACTS OR OMISSIONS PUNISHABLE
BY LAW)
QUASI-DELICTS
(C.) COMPLIANCE WITH OBLIGATIONS

- ARTS. 19, 1163-66,1244, 1246, 1460, 440, 442
II. Excuse for non-performance

1. FORTUITOUS EVENT (ARTS. 1174, 552,
1165, 2147, 2159)
2. ACT OF CREDITOR
(F.) REMEDIES FOR BREACH OF OBLIGATIONS
NCC Arts. 1165-68, 1170, 1177-78, 1191-92, 2236
FC Arts. 153, 155
Rule 39 Sec. 13
I.
HUMAN RELATIONS - Art. 19.
1.
NATURE AND EFFECT OF OBLIGATIONS - Art. 1163.
2.
RIGHT OF ACCESSION - Art. 440, Art. 442.
II.
(D.) KINDS OF CIVIL OBLIGATIONS
1.
2.
3.
1. AS TO PERFECTION AND EXTINGUISHMENT

A. PURE
B. CONDITIONAL
C. WITH A TERM OR PERIOD
2. AS TO PLURALITY OF PRESTATION
A. CONJUNCTIVE
B. ALTERNATIVE (ARTS. 1199-1205)
C. FACULTATIVE (ART. 1206)
3. AS TO RIGHTS & OBLIGATIONS OF MULTIPLE
PARTIES
A. JOINT (Arts. 1207-1222)
B. SOLIDARY (NCC ARTS 927, 1824, 1911, 1945,
2157, 2194, 2146; FC ARTS 94, 121; RPC ART. 90)
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EXTRA-JUDICIAL REMEDIES
EXPRESSLY GRANTED BY LAW ARTS. 1786,
1788, 1526
STIPULATED
JUDICIAL REMEDIES
PRINCIPAL REMEDIES ARTS. 1191, 1170
SUBSIDIARY REMEDIES ARTS. 1380, 1177
ANCILLARY REMEDIES RULES OF COURT
(G.) MODES OF EXTINGUISHMENT OF OBLIGATIONS Art.

1231
1.
PAYMENT OR PERFORMANCE
ARTS. 1232-44, 1246-51, 1302
RA 8183
PD 72, SECS. 31-32
SPECIAL FORMS OF PAYMENT
A. DATION IN PAYMENT ART. 1245
B. APPLICATION OF PAYMENTS ARTS. 1252-54, 1248
C. PAYMENT BY CESSION OR ASSIGNMENT ART.
1255
D. TENDER OF PAYMENT AND CONSIGNATION
ARTS. 1256-61
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2.
LOSS OF THE THING DUE OR IMPOSSIBILITY OF

PERFORMANCE ARTS. 1262-69, 1189, 1174, 1165,
1268, 1942, 1979, 2147, 2159
3.
CONDONATION OR REMISSION OF THE DEBT

ARTS. 1270-74, 748, 749
4.
CONFUSION OR MERGER OF RIGHTS ARTS. 127577, 1215, 1217
5.
COMPENSATION ARTS. 1278-1290, 1243, 1215

KINDS OF COMPENSATION
A. LEGAL
B. CONVENTIONAL/FACULTATIVE
C. JUDICIAL
6.
NOVATION ARTS. 1291-1304, 1215
KINDS OF NOVATION
A. AS TO ITS NATURE
1. SUBJECTIVE OR PERSONAL
2. OBJECTIVE RO REAL
B. AS TO ITS FORM
1. EXPRESS
2. IMPLIED
7.
OTHER MODES - ACT OF CREDITOR
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I. OBLIGATIONS
A. IN GENERAL
1. DEFINITION
Art. 1156
Art. 1156. An obligation is a juridical necessity to
give, to do or not to do.
2. KINDS OF OBLIGATIONS AS TO BASIS &
ENFORCEABILITY
Arts. 1423-1430; 1139-1155
Title III. - NATURAL OBLIGATIONS
Art. 1423. Obligations are civil or natural.
Civil obligations
o Give a right of action to compel their
performance.
Natural obligations
o Not being based on positive law but on
equity and natural law,
o Do not grant a right of action to enforce
their performance,
o But after voluntary fulfillment by the
obligor,
o They authorize the retention of what has
been delivered or rendered by reason
thereof.
Some natural obligations are set forth in the

following articles.
Art. 1424. When a right to sue
Upon a civil obligation
Has lapsed by extinctive prescription,
The obligor who voluntarily performs the contract
Cannot recover
o What he has delivered or
o The value of the service he has rendered.
Art. 1425. When
Without the knowledge of the debtor or
Against the will of the debtor,

o A third person pays a debt
o Which the obligor is not legally bound to
pay
o Because the action thereon has
prescribed,
o But the debtor later voluntarily
reimburses the third person,
The obligor cannot recover what he has paid.

Art. 1426. When a minor
Between 18 and 21 years of age
Who has entered into a contract
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Without the consent of the parent or guardian,

o After the annulment of the contract
Voluntarily returns the whole thing or price
received,
notwithstanding the fact the he

has not been benefited thereby,
There is no right to demand the thing or price
thus returned.
Art. 1427. When a minor
Between eighteen and twenty-one years of age,
Who has entered into a contract
Without the consent of the parent or guardian,

o Voluntarily pays a sum of money or
o Delivers a fungible thing in fulfilment of
the obligation,
There shall be no right to recover the same
From the obligee

o Who has spent or consumed it in good
faith.
Art. 1428. When,
o after an action to enforce a civil
obligation has failed
The defendant voluntarily performs the

obligation,
He cannot demand
o The return of what he has delivered or
o The payment of the value of the service
he has rendered.
Art. 1429. When a testate or intestate heir
Voluntarily pays a debt of the decedent
Exceeding the value of the property
Which he received
o By will or
o By the law of intestacy from the estate of
the deceased,
The payment is valid and
Cannot be rescinded by the payer.

Art. 1430. When a will is declared void
o Because it has not been executed
o In accordance with the formalities
required by law,
But one of the intestate heirs, after the

settlement of the debts of the deceased,
Pays a legacy
o In compliance with a clause in the
defective will,
The payment is effective and irrevocable.

PRESCRIPTION OF ACTIONS
Art. 1139. Actions prescribe
By the mere lapse of time
Fixed by law.
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Art. 1140. Actions to recover movables
Shall prescribe eight years
From the time the possession thereof is lost,

o Unless the possessor
o Has acquired the ownership by
prescription
o For a less period,
o According to Article 1132
Art. 1132. The ownership of

movables prescribes through
uninterrupted possession for four
years in good faith.
o and without prejudice to the provisions of
o Article 559
Art. 559. The possession of movable

property acquired in good faith is
equivalent to a title. Nevertheless,
one who has lost any movable or has
been unlawfully deprived thereof
may recover it from the person in
possession of the same. If the
possessor of a movable lost or which
the owner has been unlawfully
deprived, has acquired it in good
faith at a public sale, the owner
cannot obtain its return without
reimbursing the price paid therefor.
o Article 1505, and
Art. 1505. Subject to the provisions

of this Title, where goods are sold by
a person who is not the owner
thereof, and who does not sell them
under authority or with the consent
of the owner, the buyer acquires no
better title to the goods than the
seller had, unless the owner of the
goods is by his conduct precluded
from denying the seller's authority to
sell.
Nothing in this Title, however, shall
affect:
(1) The provisions of any factors' act,

recording laws, or any other
provision of law enabling the
apparent owner of goods to dispose
of them as if he were the true owner
thereof;
(2) The validity of any contract of
sale under statutory power of sale or
under the order of a court of
competent jurisdiction;
(3) Purchases made in a merchant's
store, or in fairs, or markets, in
accordance with the Code of
Commerce and special laws.
Article 1133
Art. 1133. Movables possessed through a

crime can never be acquired through
prescription by the offender.
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Art. 1141. Real actions over immovable
Prescribe after thirty years.

Art. 1142. A mortgage action
Prescribes after ten years.

Art. 1143. The following rights,
Are not extinguished by prescription:

(1) To demand a right of way,
a. Regulated in Article 649;
Art. 649. The owner, or any person who
by virtue of a real right may cultivate or
use any immovable, which is surrounded
by other immovables pertaining to other
persons and without adequate outlet to a
public highway, is entitled to demand a
right of way through the neighboring
estates, after payment of the proper
indemnity.
Should this easement be established in
such a manner that its use may be
continuous for all the needs of the
dominant estate, establishing a
permanent passage, the indemnity shall
consist of the value of the land occupied
and the amount of the damage caused to
the servient estate.
In case the right of way is limited to the
necessary passage for the cultivation of
the estate surrounded by others and for
the gathering of its crops through the
servient estate without a permanent
way, the indemnity shall consist in the
payment of the damage caused by such
encumbrance. (SECTION 3. - Easement of
Right of Way)
(2) To bring an action to abate a public or private
nuisance.
Art. 1144. The following actions
Must be brought within ten years
From the time the right of action accrues: Upon

(1) Written contract;
(2) Obligation created by law;
(3) Judgment.
Must be commenced within six years , upon

(1) Oral contract;
(2) Quasi-contract.
General Rule: Must be instituted within four

years, upon
(1) Injury to the rights of the plaintiff;
(2) Quasi-delict;
Exception: However, when the action

o Arises from or out of any
o Act, activity, or conduct of
o Any public officer
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Involving the exercise of powers or
authority arising from Martial Law
o Including the arrest, detention and/or
trial of the plaintiff,
The same must be brought within one year.
o
Must be filed within one year, for

(1) Forcible entry and detainer;
(2) Defamation.
Art. 1148. The limitations of action
Mentioned in Articles 1140 to 1142, and 1144 to

1147
Are without prejudice to
Those specified in other parts of this Code, in the

Code of Commerce, and in special laws.
By a fortuitous event
From enforcing his right
Is not reckoned against him.
Art. 1155. The prescription of actions
Is interrupted when:
a. They are filed before the court,
b. There is a written extrajudicial demand
by the creditors, and
c. There is any written acknowledgment of
the debt by the debtor.
Art. 1149. All other actions
Whose periods are not fixed
In this Code or in other laws
Must be brought within five years
From the time the right of action accrues.

Art. 1150. The time for prescription for all kinds of
actions,
When there is no special provision which ordains

otherwise,
Shall be counted from
The day they may be brought.

Art. 1151. The time for the prescription of actions
Which have for their object
The enforcement of obligations to pay principal
With interest or annuity
Runs from the last payment of the

o Annuity or
o Interest.
Art. 1152. The period for prescription of actions
To demand the fulfillment of
Obligation declared by a judgment
Commences from the time
The judgment became final.

Art. 1153. The period for prescription of actions
To demand accounting
Runs from the day
The persons who should render the same
Cease in their functions.
The period for the action

Arising from the result of the accounting
Runs from the date
When said result was recognized
By agreement of the interested parties.
Art. 1154. The period during which the obligee
Was prevented
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3. ELEMENTS OF OBLIGATIONS
B. SOURCES OF OBLIGATIONS
Title XVII. - EXTRA-CONTRACTUAL OBLIGATIONS

CHAPTER 1
QUASI-CONTRACTS
LAW Art. 1158

CONTRACTS Arts. 1159, 1305
QUASI-CONTRACTS Arts. 1160, 21422175
b. SOLUTIO INDEBITI
c. OTHER QUASI-CONTRACTS
9. ACTS OR OMISSIONS PUNISHABLE BY
LAW
10. QUASI-DELICTS
6.
7.
8.
Art. 1157. Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
1. LAW
- Art. 1158
Art. 1158. Obligations derived from law
Are not presumed.
Only those expressly determined in this Code or
In special laws are

o Demandable, and
o Shall be regulated by the precepts of the
law which establishes them; and
As to what has not been foreseen,

o By the provisions of this Book.
2. CONTRACTS
- Arts. 1159, 1305
Art. 1159. Obligations arising from contracts
Have the force of law
Between the contracting parties and
Should be complied with in good faith.

Art. 1305. A contract
Is a meeting of minds
Between two persons
Whereby one binds himself, with respect to the

other, to
o Give something or
o Render some service.
3. QUASI-CONTRACTS
- Arts. 1160, 2142-2175
Art. 1160. Obligations derived from quasi-contracts
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Shall be subject to the provisions of

Chapter 1, Title XVII, of this Book.
Art. 2142. Certain

o Lawful,
o Voluntary and
o Unilateral acts
Give rise to the juridical relation of quasi-contract
To the end that

o No one shall be unjustly enriched or
o Benefited at the expense of another.
Art. 2143. The provisions for quasi-contracts
In this Chapter
Do not exclude other quasi-contracts
Which may come within the purview of the

preceding article.
SECTION 1. - Negotiorum Gestio
Art. 2144. Whoever
Voluntarily takes charge
Of the agency or management of the
Business or property of another,
Without any power from the latter, is
Obliged to continue the same

o Until the termination of the affair and its
incidents, or
To require the person concerned to substitute

him,
o If the owner is in a position to do so.
This juridical relation does not arise in either of

these instances:
(1) When the property or business is not
neglected or abandoned;
(2) If in fact the manager has been tacitly
authorized by the owner.
In the first case, the provisions of Articles 1317,

1403, No. 1, and 1404 regarding unauthorized
contracts shall govern.
o Art. 1317. No one may contract in the
name of another without being
authorized by the latter, or unless he has
by law a right to represent him.
A contract entered into in the name of
another by one who has no authority or
legal representation, or who has acted
beyond his powers, shall be
unenforceable, unless it is ratified,
expressly or impliedly, by the person on
whose behalf it has been executed,
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before it is revoked by the other

contracting party.
(UNENFORCEABLE CONTRACTS) Art.
1403. The following contracts are
unenforceable, unless they are ratified:
(1) Those entered into in the name of
another person by one who has been
given no authority or legal
representation, or who has acted beyond
his powers;
Art. 1404. Unauthorized contracts are
governed by Article 1317 and the
principles of agency in Title X of this
Book.
In the second case, the Rules on Agency in Title X

of this Book shall be applicable.
Art. 2145. The officious manager
Shall perform his duties
With all the diligence of a good father of a family,

and
Pay the damages
Which through his fault or negligence
May be suffered by
o The owner of the property or
o Business under management.
The courts may, however,
Increase or moderate the indemnity
According to the circumstances of each case.

Art. 2146. If the officious manager
Delegates to another person
All or some of his duties,
He shall be liable for the acts of the delegate,
Without prejudice to
The direct obligation of the latter
Toward the owner of the business.
The responsibility of two or more officious

managers
Shall be solidary,
o Unless
o The management was assumed
o To save the thing or business
o From imminent danger.

Shall be liable for any fortuitous event:
(1)
If he undertakes risky operations
Which the owner was not

accustomed to embark upon;
(2)
If he has preferred his own interest
To that of the owner;

(3)
If he fails to return the property or

business
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After demand by the owner;
If he assumed the management

In bad faith.
(4)
Art. 2148.
General Rule: The officious manager shall be liable
for fortuitous events if:
(1)
He is manifestly unfit
To carry on the management;

(2)
By his intervention
He prevented a more competent

person
From taking up the management.

Exception:
Except when the management was
Assumed to save property or business
From imminent danger

Art. 2149. The ratification of the management by
the owner of the business
Produces the effects of an express agency,

o Even if the business may not have been
successful.
Art. 2150. Although the officious management may
not have been expressly ratified,
The owner of the property or business

o who enjoys the advantages of the same
Shall be liable for obligations incurred in his

interest, and
Shall reimburse the officious manager for the

necessary and useful expenses and for the
damages which the latter may have suffered
in the performance of his duties.
The same obligation shall be incumbent upon

him
o When the management had for its purpose
o The prevention of an imminent and manifest
loss,
Although no benefit may have been

derived.
Art. 2151. Even though the owner did not derive

any benefit and there has been no imminent and
manifest danger to the property or business,
The owner is liable as under the first

paragraph of the preceding article, provided:
(1) The officious manager has acted in good
faith, and
(2) The property or business is intact, ready to
be returned to the owner.
Is personally liable for
Contracts which he has entered into
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With third persons,

o Even though he acted in the name of the
owner, and
o There shall be no right of action between
the owner and third persons.
These provisions shall not apply:

(1) If the owner has
Expressly or tacitly ratified the

management, or
(2) When the contract
Refers to things
Pertaining to the owner of the

business.
Art. 2159. Whoever in bad faith accepts an undue

payment,
Shall pay legal interest

o If a sum of money is involved, or
Shall be liable for fruits received or which should

have been received
o If the thing produces fruits.
He shall furthermore be answerable

o For any loss or impairment of the thing from
any cause, and
o For damages to the person who delivered the
thing, until it is recovered.
Art. 2153. The management is extinguished:

(1) When the owner
a. Repudiates it or
b. Puts an end thereto;
(2) When the officious manager
a. Withdraws from the management,
subject to the provisions of Article
2144;
(3) By
a. The death,
b. Civil interdiction,
c. Insanity or
d. Insolvency
Of the owner or the officious manager.
b. SOLUTIO INDEBITI
SECTION 2. - Solutio Indebiti
Art. 2154.
If something is received when there is no right to

demand it, and
It was unduly delivered through mistake,

o The obligation to return it arises.
Art. 2155. Payment by reason of a mistake
In the construction or application of a doubtful or

difficult question of law
May come within the scope of the preceding

article.
Art. 2156. If the payer was in doubt whether the
debt was due,
He may recover
If he proves that it was not due.
The payee shall comply with the provisions of

article 1984.
Art. 1984. The depositary cannot demand that the

depositor prove his ownership of the thing deposited.
Art. 2160. He who in good faith accepts an undue

payment of a thing certain and determinate
Shall only be responsible for the

o Impairment or loss of the same or
o Its accessories and accessions
Insofar as he has thereby been benefited.
If he has alienated it,

o He shall return the price or
o Assign the action to collect the sum.
Art. 2161. As regards the reimbursement for

improvements and expenses incurred by him who
unduly received the thing,
The provisions of Title V of Book II* shall govern.

*BOOK II - PROPERTY, OWNERSHIP, AND ITS
MODIFICATIONS. Title V - POSSESSION
Art. 2162. He shall be exempt from the obligation to

restore
Who, believing in good faith that the payment

was being made of a legitimate and subsisting
claim,
o Destroyed the document, or
o Allowed the action to prescribe, or
o Gave up the pledges, or
o Cancelled the guaranties for his right.
He who paid unduly may proceed only against

o The true debtor or the guarantors
With regard to whom the action is still

effective.
Art. 2157. The responsibility of two or more payees,
When there has been payment of what is not

due,
o Is solidary.
Art. 2163. It is presumed that there was a mistake

in the payment
If something which had never been due or had

already been paid
o Was delivered;
Art. 2158. When the property delivered or money

paid belongs to a third person,
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But he from whom the return is claimed
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o
May prove that the delivery was made out of

liberality or for any other just cause.
C. OTHER QUASI-CONTRACTS
SECTION 3. - Other Quasi-Contracts
Art. 2164. When, without the knowledge of the
person obliged to give support, it is given by a
stranger,
The latter (stranger) shall have a right to claim

the same from the former,
o Unless it appears that he gave it out of piety
and
o Without intention of being repaid.
Art. 2165. When funeral expenses are borne by a
third person,
Without the knowledge of those relatives
Who were obliged to give support to the

deceased,
o Said relatives shall reimburse the third
person,
Should the latter claim reimbursement.

Art. 2166.
When the person obliged to support

o An orphan, or
o An insane or
o other indigent person unjustly
refuses to give support to the latter,

o Any third person may furnish support to the
needy individual,
o With right of reimbursement from the person
obliged to give support.
The provisions of this article apply

o When the father or mother of a child under
18 years of age
o Unjustly refuses to support him.
Art. 2167. When through an accident or other cause
A person is injured or becomes seriously ill, and
He is treated or helped
While he is not in a condition to give consent to a

contract,
o He shall be liable to pay for the services of
o The physician or other person aiding him,
Unless the service has been rendered
Out of pure generosity.

Art. 2168. When during a fire, flood, storm, or other
calamity, property is saved from destruction
By another person
Without the knowledge of the owner,

o The latter (owner) is bound to pay the former
o Just compensation.
Art. 2169. When the government, upon the failure

of any person to comply with health or safety
regulations concerning property,
Undertakes to do the necessary work,
Even over his objection,

o He shall be liable to pay the expenses.
Art. 2170. When by accident or other fortuitous
event,
Movables separately pertaining to two or more

persons
Are commingled or confused,

o The rules on co-ownership shall be
applicable.
Art. 2171. The rights and obligations of the finder of
lost personal property
Shall be governed by Articles 719 and 720*.

Art. 719. Whoever finds a movable, which is not treasure,
must return it to its previous possessor. If the latter is
unknown, the finder shall immediately deposit it with the
mayor of the city or municipality where the finding has
taken place.
The finding shall be publicly announced by the mayor for
two consecutive weeks in the way he deems best.
If the movable cannot be kept without deterioration, or
without expenses which considerably diminish its value, it
shall be sold at public auction eight days after the
publication.
Six months from the publication having elapsed without the
owner having appeared, the thing found, or its value, shall
be awarded to the finder. The finder and the owner shall be
obliged, as the case may be, to reimburse the expenses.
Art. 720. If the owner should appear in time, he shall be
obliged to pay, as a reward to the finder, one-tenth of the
sum or of the price of the thing found.
Art. 2172. The right of every possessor in good faith

to reimbursement for necessary and useful expenses
is governed by Article 546.
Art. 2173. When a third person, without the
knowledge of the debtor, pays the debt,
The rights of the former (third person) are

governed by Articles 1236 and 1237.
Art. 1236. The creditor is not bound to accept
Payment or performance by a third person
Who has no interest in the fulfillment of the obligation,

o Unless there is a stipulation to the contrary.
Whoever pays for another

o May demand from the debtor
o What he has paid,
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Except that if he paid

Without the knowledge or
He can recover
Only insofar as the payment
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Has been beneficial to the debtor.
Art. 1237. Whoever pays on behalf of the debtor


o Cannot compel the creditor
o To subrogate him (creditor) in his (creditors) rights,
o Such as those arising from a mortgage, guaranty, or
penalty.
Art. 2174. When in a small community a majority of

the inhabitants of age
Decide upon a measure
For protection against lawlessness, fire, flood,

storm or other calamity,
o Any one who objects to the plan and refuses
to contribute to the expenses
o But is benefited by the project as executed
o Shall be liable to pay his share of said
expenses.
Art. 2175. Any person who is constrained to pay the
taxes of another
Shall be entitled to reimbursement
From the latter.

4. ACTS OR OMISSIONS PUNISHED BY LAW
- NCC Arts. 1167, 2177
- RPC Arts. 100, 104
Art. 1167. If a person obliged to do something
Fails to do it,
The same shall be executed
At his cost.
Chapter Two
WHAT CIVIL LIABILITY INCLUDES
Art. 104. What is included in civil liability
The civil liability established in
Articles 100, 101, 102, and 103 of this Code

includes:
1. Restitution
2. Reparation
Of the damage caused;

3. Indemnification
For consequential damages.

5. QUASI-DELICTS
- Arts. 1162, 2176
Art. 1162. Obligations derived from
Quasi-delicts
Shall be governed by
The provisions of Chapter 2, Title XVII of this

Book (Quasi-Delicts), and by special laws.
Art. 2176. Whoever by act or omission
Causes damage to another,
There being fault or negligence,
Is obliged to pay for the damage done.
Such fault or negligence,

If there is no pre-existing contractual relation
Between the parties,
Is called a Quasi-Delict and is
Governed by the provisions of this Chapter.
CHAPTER 2
QUASI-DELICTS
Art. 2177. Responsibility for fault or negligence
Under the preceding article is
Entirely separate and distinct from the
Civil liability
Arising from negligence under the Penal

Code.
But the plaintiff cannot recover damages

Twice for the same act or omission
Of the defendant.
REVISED PENAL CODE

CIVIL LIABILITY
Chapter One
PERSON CIVILLY LIABLE FOR FELONIES
Art. 100. Civil liability of a person guilty of felony

Every person criminally liable
For a felony is also
Civilly liable.
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C. COMPLIANCE WITH OBLIGATIONS
- ARTS. 19, 1163-66,1244, 1246, 1460, 440, 442
CHAPTER 2
HUMAN RELATIONS
Art. 19. Every person must,
In the exercise of his rights and
In the performance of his duties,

o Act with justice,
o Give everyone his due, and
o Observe honesty and good faith.
CHAPTER 2
NATURE AND EFFECT OF OBLIGATIONS
Art. 1163.
General Rule: Every person
Obliged to give something
Is also obliged
To take care of it
With the proper diligence of a good father of a

family
Exception:
o Unless the law or
o The stipulation of the parties
o Requires another standard of care.
Art. 1164. The creditor
Has a right
To the fruits of the thing
From the time the obligation to deliver it arises.
However, he shall acquire no real right over it
Until the same has been delivered to him.
Art. 1165. When what is to be delivered is
A determinate thing,
o The creditor,
o In addition to the right granted him by
Article 1170*,
o May compel the debtor
o To make the delivery.
If the thing is indeterminate or generic,

o He may ask that the obligation
o Be complied with
o At the expense of the debtor.
If the obligor
o Delays, or
o Promised to deliver the same thing to
two or more persons who do not have the
same interest,
o He shall be responsible for any fortuitous
event
o Until he has effected the delivery.
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*Art. 1170. Those who in the performance of their

obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor
thereof, are liable for damages.
Art. 1166. The obligation to give
A determinate thing
Includes that of delivering
All its accessions and accessories,
Even though they may not have been mentioned.
Art. 1244. The debtor of a thing
Cannot compel the creditor
To receive a different one,
Although the latter

o May be of the same value as, or
o More valuable than
o That which is due.
In obligations to do or not to do, an act or

forbearance
o Cannot be substituted
o By another act or forbearance
o Against the obligee's will.
Art. 1246. When the obligation consists in the

delivery
Of an indeterminate or generic thing,
Whose quality and circumstances
Have not been stated,
The creditor cannot demand a thing of superior

quality.
Neither can the debtor
Deliver a thing of inferior quality.
The purpose of the obligation and other

circumstances shall be taken into consideration.
Art. 1460. A thing is determinate
When it is particularly designated or
Physical segregated
From all other of the same class.

CHAPTER 3
RIGHT OF ACCESSION
GENERAL PROVISIONS
Art. 440. The ownership of property
Gives the right by accession
To everything which is
o Produced thereby, or
o Incorporated or attached thereto,
o Either naturally or artificially.
Art. 442.
Natural fruits are the

o
Spontaneous products of the soil, and the
o
Young and other products of animals.
Industrial fruits are those
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o
o
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Produced by lands of any kind

Through cultivation or labor.
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o
D. KINDS OF CIVIL OBLIGATIONS

1. AS TO PERFECTION AND EXTINGUISHMENT
A. PURE
B. CONDITIONAL
A. PURE
In conformity with the provisions of this

Code.
Art. 1183.
Impossible conditions,
Those contrary to good customs or public policy

and
Those prohibited by law

o Shall annul the obligation
Which depends upon them.
CHAPTER 3
DIFFERENT KINDS OF OBLIGATIONS
SECTION 1. - Pure and Conditional Obligations
Art. 1179.
Every obligation
o Whose performance
o Does not depend upon a:
Future or uncertain event, or
Past event unknown to the

parties,
o Is demandable at once.
If the obligation is divisible,

o That part thereof
o Which is not affected by
o The impossible or unlawful condition
Shall be valid.
The condition not to do an impossible thing

Shall be considered as
o Not having been agreed upon.
Every obligation
o Which contains a resolutory condition
o Shall also be demandable,
Without prejudice to the
Effects of the happening of the event.
Art. 1197. If the obligation
Does not fix a period,

o But from its nature and the
circumstances
o It can be inferred
o That a period was intended,
The courts may fix the duration thereof.

B. CONDITIONAL
Art. 1181. In conditional obligations,
The acquisition of rights, as well as
The extinguishment or loss of those already

acquired,
o Shall depend upon the happening of the
event
o Which constitutes the condition.
Art. 1182. When the fulfillment of the condition
Depends upon the sole will of the debtor,

o The conditional obligation shall be void.
If the fulfillment of the condition

Depends upon
o Chance or
o The will of a third person,
o The obligation shall take effect
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Art. 1184. The condition that
Some event happen
At a determinate time
Shall extinguish the obligation

o As soon as the time expires or
o If it has become indubitable that the
event will not take place.
Art. 1185. The condition that
Some event will not happen
At a determinate time
Shall render the obligation effective

o From the moment the time indicated has
elapsed, or
o If it has become evident that the event
cannot occur.
If no time has been fixed,

o The condition shall be deemed fulfilled
o At such time as may have probably been
contemplated,
o Bearing in mind the nature of the obligation.
Art. 1186. The condition shall be deemed fulfilled
When the obligor
Voluntarily prevents its fulfillment.

Art. 1187. The effects of a conditional obligation to
give
Shall retroact to the day of the constitution of the

obligation
o Once the condition has been fulfilled
Nevertheless, when the obligation imposes

Reciprocal prestations upon the parties,
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o
o
The fruits and interests

During the pendency of the condition
Shall be deemed to have been mutually

compensated.
(3) When the thing deteriorates
Without the fault of the debtor,
The impairment is to be borne by the

creditor;
If the obligation is unilateral,

The debtor shall appropriate the fruits and
interests received,
o Unless from the nature and
circumstances of the obligation
o It should be inferred that the intention of
o The person constituting the same
o Was different.
(4) If it deteriorates
Through the fault of the debtor,
The creditor may choose between

i. The rescission of the
obligation and
ii. Its fulfillment,
With indemnity for damages in either

case;
In obligations to do and not to do,

o The courts shall determine, in each case,
o The retroactive effect of the condition
That has been complied with.
(5) If the thing is improved
By its nature, or
By time,
The improvement shall inure to
The benefit of the creditor;

(6) If it is improved
At the expense of the debtor,
He shall have no other right
Than that granted to the

usufructuary.
Art. 1188. The creditor may bring
The appropriate actions
For the preservation of his right

o Before the fulfillment of the condition.
The debtor may recover what,
During the same time

o He has paid by mistake
o In case of a suspensive condition.
Art. 1189.
When the conditions have been imposed
With the intention of suspending the efficacy of

an obligation to give,
The following rules shall be observed
In case of the
o Improvement,
o Loss or
o Deterioration of the thing
During the pendency of the condition:

(1) If the thing is lost
The obligation shall be extinguished;

He shall be obliged to pay damages;
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It is understood that the thing is lost

i. When it perishes, or
ii. Goes out of commerce, or
iii. Disappears in such a way that its
existence is unknown or it cannot
be recovered;
Art. 1190. When the conditions have for their

purpose
The extinguishment of an obligation to give,
The parties,
Upon the fulfillment of said conditions,

o Shall return to each other
o What they have received.
In case of the
o Loss,
o Deterioration or
o Improvement of the thing,
The provisions which,
With respect to the debtor,
Are laid down in the preceding article
o Shall be applied to the party
o Who is bound to return.
As for the obligations to do and not to do,
o The provisions of the second paragraph* of
Article 1187
Shall be observed
As regards the effect of the

extinguishment of the obligation.
* In obligations to do and not to do,

o The courts shall determine, in each case,
o The retroactive effect of the condition
o That has been complied with.
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Art. 1180. When the debtor binds himself to pay
When his means permit him to do so,

o The obligation shall be deemed to be
One with a period,

o Subject to the provisions of Article 1197*.
*Art. 1197. If the obligation does not fix a period, but
from its nature and the circumstances it can be
inferred that a period was intended, the courts may
fix the duration thereof.
The courts shall also fix the duration of the period
when it depends upon the will of the debtor.
In every case, the courts shall determine such period
as may under the circumstances have been probably
contemplated by the parties. Once fixed by the
courts, the period cannot be changed by them.
SECTION 2. - Obligations with a Period
Art. 1193. Obligations for whose fulfillment
A day certain has been fixed,

o Shall be demandable
Only when that day comes.
Obligations with a resolutory period

Take effect at once,
o But terminate upon
o Arrival of the day certain.
A day certain
Is understood to be
o That which must necessarily come,
Although it may not be known when.

If the uncertainty consists in
o Whether the day will come or not,
The obligation is conditional, and
It shall be regulated
By the rules of the preceding Section.
Art. 1194. In case of

o Loss,
o Deterioration or
o Improvement
Of the thing
Before the arrival of
The day certain,
The rules in Article 1189 shall be observed.

Art. 1195. Anything paid or delivered
Before the arrival of the period,
The obligor
o Being unaware of the period or
o Believing that the obligation has become
due and demandable,
May be recovered,
With the fruits and interests.
ralc
Art. 1196.
General Rule: Whenever in an obligation a period

is designated,
o It is presumed
o To have been established
For the benefit of both the creditor and

the debtor,
Exception: Unless from the tenor of the same or

other circumstances
o It should appear
o That the period has been established
In favor of one or of the other.
Art. 1197. If the obligation does not fix a period,
But from its nature and the circumstances
It can be inferred
That a period was intended,

o The courts may fix the duration thereof.
The courts shall also fix

o The duration of the period
When it depends upon
The will of the debtor.
In every case,
o The courts shall determine such period
o As may under the circumstances
Have been probably contemplated by the

parties.
Once fixed by the courts,

o The period cannot be changed by them.
Art. 1198. The debtor shall lose
Every right to make use of the period:

1.
When after the obligation has been

contracted,
He becomes insolvent,
Unless he gives
i. A guaranty or
ii. Security for the debt;
2.
When he does not furnish
To the creditor
The guaranties or securities
Which he has promised;

3.
When by his own acts
He has impaired said guaranties or

securities
After their establishment, and
When through a fortuitous event
They disappear,
- Unless he immediately gives
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- New ones equally satisfactory;
4.
When the debtor violates

Any undertaking,
In consideration of which
The creditor agreed to the period;
When the debtor attempts to

abscond.
5.
2. AS TO PLURALITY OF PRESTATION
A. CONJUNCTIVE
B. ALTERNATIVE (ARTS. 1199-1205)
C. FACULTATIVE (ART. 1206)
A. CONJUNCTIVE
B. ALTERNATIVE
Art. 1203. If through the creditor's acts
The debtor cannot make a choice
According to the terms of the obligation,

o The debtor may
o Rescind the contract
o With damages.
Art. 1204. The creditor shall have a right
To indemnity for damages

o When, through the fault of the debtor,
o All the things which are alternatively the
object of the obligation
Have been lost, or
The compliance of the obligation has

become impossible.
The indemnity
Shall be fixed
Taking as a basis
o The value of the last thing which
disappeared, or
o That of the service which last became
impossible.
Damages
Other than the value
Of the last thing or service
o May also be awarded.
SECTION 3. - Alternative Obligations

Art. 1199. A person alternatively bound
By different prestations
o Shall completely perform one of them.
The creditor cannot be compelled

To receive
o Part of one and
o Part of the other undertaking.
Art. 1200.
GENERAL RULE: The right of choice
Belongs to the debtor,

EXCEPTION: Unless right of choice has been
expressly granted*
To the creditor.
The debtor shall have no right to choose

Those prestations which are
o Impossible,
o Unlawful or
o Which could not have been the object of
the obligation.
*Article 1205
Art. 1201. The choice
Shall produce no effect

o Except from the time
It has been communicated.

Art. 1202. The debtor shall lose
The right of choice

o When among the prestations
o Whereby he is alternatively bound,
Only one is practicable.
ralc
Art. 1205. When the choice
Has been expressly given
To the creditor,
o The obligation shall cease to be alternative
From the day when the selection
Has been communicated to the debtor.
Until then
The responsibility of the debtor
Shall be governed by the following rules:

(1)
If one of the things is lost
Through a fortuitous event,

Debtor shall perform the obligation
By delivering that
Which the creditor should choose
from
ii. Among the remainder, or
iii. That which remains if only one
subsists;
(2)
If the loss of one of the things
Occurs through the fault of the debtor,

The creditor may claim
ii. Any of those subsisting, or
iii. The price of that which, through
the fault of the debtor, has
disappeared,
With a right to damages;
(3)
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If all the things are lost

The choice by the creditor
Shall fall upon the price of
Any one of them,
i. Also with indemnity for
damages.
The same rules shall be applied to

o Obligations to do or not to do
In case one, some or all of the

prestations
Should become impossible.
C. FACULTATIVE
Art. 1206. When only one prestation
Has been agreed upon,

o But the obligor may render another in
substitution,
o The obligation is called facultative.
GENERAL RULE: The loss or deterioration of
The thing intended as a substitute,

o Through the negligence of the obligor,
Does not render him liable.

EXCEPTION: But once the substitution has been
made,
The obligor is liable for

o The loss of the substitute
On account of his
Delay,
Negligence or
Fraud.
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3. AS TO RIGHTS & OBLIGATIONS OF MULTIPLE
PARTIES
A. JOINT (Arts. 1207-1222)
B. SOLIDARY (NCC ARTS 927, 1824, 1911, 1945,
2157, 2194, 2146; FC ARTS 94, 121; RPC ART.
90)
C. DISJUNCTIVE
A. JOINT (Arts. 1207-1222)
SECTION 4. - Joint and Solidary Obligations
Art. 1207. The concurrence of
o Two or more creditors or
o Two or more debtors
In one and the same obligation
Does not imply

o That each one of the former has a right
to demand, or
o That each one of the latter is bound to
render,
Entire compliance with the prestation.
There is a solidary liability

Only when:
o The obligation expressly so states, or
o The law or the nature of the obligation
requires solidarity.
Art. 1208. If from

o The law, or
o The nature or the wording of the
obligations
To which the preceding article refers

o The contrary does not appear,
The credit or debt
Shall be presumed to be divided
Into as many shares as there are creditors or

debtors,
The credits or debts being considered

o Distinct from one another,
Subject to the Rules of Court

governing the multiplicity of suits.
Art. 1209. If the division is impossible,
The right of the creditors
May be prejudiced
o Only by their collective acts, and
The debt can be enforced

o Only by proceeding against all the debtors.
If one of the latter should be insolvent,

o The others shall not be liable
o For his share.
Art. 1210. The indivisibility of an obligation
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Does not necessarily give rise

To solidarity.
Nor does solidarity of itself

o Imply indivisibility.
Art. 1211. Solidarity may exist
Although the creditors and the debtors
May not be bound

o In the same manner and
o By the same periods and conditions.
Art. 1212. General Rule: Each one of the solidary
creditors
May do whatever
May be useful to the others,

o Exception: But not anything
o Which may be prejudicial to the latter
(other solidary creditors).
Art. 1213. A solidary creditor
Cannot assign his rights
Without the consent of the others.

Art. 1214. The debtor may pay
Any one of the solidary creditors;
But if any demand,

o Judicial or
o Extrajudicial,
Has been made by one of them,
Payment should be made to him.

Art. 1215.
o Novation,
o Compensation,
o Confusion or
o Remission of the debt,
Made by
Any of the solidary creditors or
With any of the solidary debtors,
Shall extinguish the obligation,

o Without prejudice to the provisions of Article
1219.
The creditor
o Who may have executed
o Any of these acts, as well as
He who collects the debt,
Shall be liable to the others
For the share in the obligation
Corresponding to them.
Art. 1216. The creditor may proceed against
Any one of the solidary debtors or
Some or all of them

o Simultaneously.
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The demand made against

One of them
o Shall not be an obstacle
o To those which may subsequently be directed
o Against the others,
So long as the debt
o Has not been fully collected.
Before the remission was effected.
Art. 1220. The remission of the whole obligation,

o Obtained by one of the solidary debtors,
Does not entitle him (one of the solidary debtors)
To reimbursement
o From his co-debtors.
Art. 1217. Payment made by
One of the solidary debtors

o Extinguishes the obligation.
Art. 1221.
If the thing has been lost or
If the prestation has become impossible

o Without the fault of the solidary debtors,
The obligation shall be extinguished.
If two or more solidary debtors

Offer to pay,
o The creditor may choose
Which offer to accept.
He who made the payment

May claim from his co-debtors
o Only the share
o Which corresponds to each,
With the interest
For the payment already made.
If the payment is made

Before the debt is due,
o No interest
o For the intervening period
o May be demanded.
When one of the solidary debtors cannot,

o Because of his insolvency,
Reimburse his share
To the debtor paying the obligation,
Such share shall be borne
By all his co-debtors,
In proportion to the debt of each.
Art. 1218. Payment by a solidary debtor
Shall not entitle him
To reimbursement
o From his co-debtors
If such payment is made

o After the obligation has
o Prescribed or become illegal.
Art. 1219. The remission made by the creditor
Of the share
o Which affects one of the solidary debtors
Does not release the latter (one of the solidary

debtors)
From his responsibility

o Towards the co-debtors,
o In case the debt had been totally paid
By anyone of them
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If there was fault

On the part of any one of them,
o All shall be responsible
o To the creditor, for
The price and
The payment of damages and interest,

o Their action against
o The guilty or negligent debtor.
If through a fortuitous event,
o The thing is lost or
o The performance has become impossible
After one of the solidary debtors
o Has incurred in delay
o Through the
Judicial or
Extrajudicial demand
o Upon him by the creditor,
The provisions of the preceding paragraph shall
apply.
Art. 1222. In actions filed by the creditor
A solidary debtor
May avail himself of
All defenses which are

o Derived from the nature of the obligation
and
o Of those which are personal to him, or
pertain to his own share.
With respect to those which personally belong to

the others (other solidary debtors),
o He may avail himself thereof
o Only as regards that part of the debt
o For which the latter (other solidary
debtors) are responsible.
B. SOLIDARY
(NCC ARTS 927, 1824, 1911, 1945, 2157, 2194,
2146; FC ARTS 94, 121; RPC ART. 90)
Art. 927
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If two or more heirs take possession of the

estate,
o They shall be solidarily liable
o For the loss or destruction of
A thing devised or bequeathed,
Even though only one of them
Should have been negligent.
Art. 1824. All partners are liable solidarily with the

partnership
For everything chargeable to the partnership

o Under Articles 1822 and 1823.
o
Art. 1822. Where, by any wrongful act or

omission of any partner
Acting in the ordinary course of the

business of the partnership or
With the authority of co-partners,
Loss or injury is caused to any

person, not being a partner in
the partnership, or
Any penalty is incurred,

o The partnership is liable
therefor
o To the same extent as the
partner so acting or omitting
to act.
Art. 1823. The partnership is bound to
make good the loss:
(1) Where one partner acting within the
scope of his apparent authority
Receives money or property of a

third person and
Misapplies it; and

(2) Where the partnership in the course
of its business
Receives money or property of a

third person and
The money or property so

received is misapplied by any
partner while it is in the custody
of the partnership.
Art. 1911. Even when the agent has exceeded his

authority,
The principal is
o Solidarily liable with the agent
If the former (principal)
Allowed the latter (agent)
To act as though he (agent) had full

powers.
Art. 1915. If two or more persons have appointed an
agent
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For a common transaction or

undertaking,
They shall be solidarily liable
o To the agent
For all the consequences of the

agency.
o
Art. 1945. When there are two or more bailees
To whom a thing is loaned
In the same contract,

o They (bailees) are liable solidarily.
Art. 2157. The responsibility of two or more payees,
When there has been payment
Of what is not due,

o Is solidary.
Art. 2194. The responsibility of two or more persons
Who are liable for quasi-delict

o Is solidary.
Art. 2146. If the officious manager delegates
To another person
All or some of his duties,

o He shall be liable
o For the acts of the delegate,
o The direct obligation of the latter
(delegate)
o Toward the owner of the business.
Family Code
Art. 94. The absolute community of property
Shall be liable for:

1.
The support of
The spouses,
Their common children, and
Legitimate children of either spouse;

o However, the support of
o Illegitimate children
Shall be governed by
The provisions of this Code on Support;
2.
All debts and obligations
Contracted during the marriage

o By the designated administrator-spouse
For the benefit of the community, or
o By both spouses, or
o By one spouse
With the consent of the other;
3.
Debts and obligations
Contracted by either spouse
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Without the consent of the other

o To the extent that the family
o May have been benefited;
4.
All taxes, liens, charges and expenses,
Including major or minor repairs,
Upon the community property;
5.
All taxes and expenses
For mere preservation made

o During marriage
Upon the separate property
Of either spouse
o Used by the family;
6.
7.
Expenses
To enable either spouse
To commence or complete
o A professional or vocational course, or
o Other activity for self-improvement;
5.
All taxes and expenses
For mere preservation made

- During the marriage
Upon the separate property

- Of either spouse;
6.
Expenses
To enable either spouse
To commence or complete
- A professional, vocational course, or
- Other activity for self-improvement;
7.
Ante-nuptial debts
Of either spouse
Insofar as they have redounded
To the benefit of the family;
8.
The value
Of what is donated or promised
By both spouses
- In favor of their common legitimate
children
- For the exclusive purpose of
o Commencing or completing
- A professional or vocational course or
- Other activity for self-improvement;
and
9.
Expenses of litigation
Between the spouses

- Unless the suit is found to be groundless.
If the conjugal partnership is insufficient

o To cover the foregoing liabilities,
The spouses shall be solidarily liable
For the unpaid balance
With their separate properties.
Ante-nuptial debts
Of either spouse
o Insofar as they have redounded
o To the benefit of the family;
Section 4. Charges Upon and Obligations of the

Conjugal Partnership
Art. 121. The conjugal partnership
Shall be liable for:

1.
The support of
The spouse,
Their common children, and
The legitimate children of either spouse;

- However, the support of
- Illegitimate children
o Shall be governed by
o The provisions of this Code on Support;
2.
3.
4.
All debts and obligations
Contracted during the marriage

- By the designated administrator-spouse
o For the benefit of the conjugal
partnership of gains, or
- By both spouses or
- By one of them
o With the consent of the other;
Debts and obligations
Contracted by either spouse
Without the consent of the other

- To the extent that the family
- May have benefited;
All taxes, liens, charges, and expenses,
Including major or minor repairs
Upon the conjugal partnership property;
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Revised Penal Code

Art. 90. Prescription of crime
i. Crimes punishable by
o Death,
o Reclusion perpetua or
o Reclusion temporal
Shall prescribe in twenty years.

ii.
Crimes punishable
o By other afflictive penalties
Shall prescribe in fifteen years.
iii. General Rule: Those punishable by a correctional

penalty (1m & 1d to 6 y)
Shall prescribe in ten years;
Exception: With the exception of

those punishable by arresto mayor
(1m & 1d to 6m),
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o
Which shall prescribe in five

years.
iv. The crime of libel or Other similar offenses
Shall prescribe in one year.

v.
The crime of
o Oral defamation and
o Slander by deed
Shall prescribe in six months.
vi. Light offenses (arresto menor 1 d to 30 d)
Prescribe in two months.

C. DISJUNCTIVE
Disjunctive there are several obligations and only
one or some of them must be fulfilled
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4. AS TO PERFORMANCE OF PRESTATION
(ARTS. 1221-1225, 1209-1210)
A. DIVISIBLE
B. INDIVISIBLE
Art. 1221.
If the thing has been lost or
If the prestation has become impossible

o Without the fault of the solidary debtors,
The obligation shall be extinguished.
If there was fault on the part of any one of them

(solidary debtors),
o All (solidary debtors) shall be responsible to
the creditor, for
The price and
The payment
of damages and
Interest
Their action against
o The guilty or negligent debtor.
If through a fortuitous event,

o The thing is lost or
o The performance has become impossible
After one of the solidary debtors
Has incurred in delay
Through the
Judicial or
Extrajudicial demand
Upon him by the creditor,
All (solidary debtors) shall be

responsible to the creditor, for
o The price and
o The payment
of damages and
o Interest
Art. 1222. In actions filed by the creditor
A solidary debtor may avail himself of

o All defenses which are
1. Derived from the nature of the obligation
and
2. Of those which are personal to him, or
pertain to his own share.
With respect to those which personally belong to

the others (other solidary debtors),
o He may avail himself thereof
Only as regards that part of the debt
For which the latter (other solidary

debtors) are responsible.
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A. DIVISIBLE
B. INDIVISIBLE
SECTION 5. - Divisible and Indivisible Obligations
Art. 1223. The divisibility or indivisibility of the
things
That are the object of obligations
In which there is
o Only one debtor and
o Only one creditor
Does not alter or modify
The provisions of Chapter 2 (NATURE

AND EFFECT OF OBLIGATIONS Arts 11631178) of this Title.
Art. 1224. A joint indivisible obligation
Gives rise to indemnity

o For damages
From the time any one of the debtors
Does not comply with his undertaking.
The debtors
o Who may have been ready to fulfill their
promises
Shall not contribute to the indemnity
Beyond the corresponding portion of
The price of the thing or
The value of the service
In which the obligation consists.
Art. 1225. For the purposes of the preceding

articles,
GENERAL RULE: Obligations to give

o Definite things and
o Those which are not susceptible of partial
performance
Shall be deemed to be indivisible.
When the obligation has for its object

o The execution of a certain number of days of
work,
The accomplishment of work by metrical

units, or
o Analogous things
Which by their nature are susceptible of

partial performance,
It shall be divisible.
EXCEPTION: However, even though the object or

service
May be physically divisible,
o An obligation is indivisible if
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CIVIL
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1. So provided by law or
2. Intended by the parties.
In obligations not to do,
o Divisibility or indivisibility
o Shall be determined by
The character of the prestation in each

particular case.
Art. 1209. If the division is impossible,
The right of the creditors
May be prejudiced
o Only by their (creditors) collective acts, and
The debt can be enforced only by

o Proceeding against
o All the debtors.
If one of the debtors

Should be insolvent,
o The other debtors
o Shall not be liable for his share.
Art. 1210. The indivisibility of an obligation
Does not necessarily give rise
To solidarity.
Nor does solidarity of itself

Imply indivisibility.
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5. AS TO THE PRESENCE OF AN ACCESSORY
UNDERTAKING IN CASE OF BREACH
WITH A PENAL CLAUSE (distinguish from
liquidated damages)
(ARTS. 122601230)
SECTION 6. - Obligations with a Penal Clause
Art. 1226. In obligations with a penal clause,
The penalty
Shall substitute
o The indemnity for damages and
o The payment of interests
In case of noncompliance,
If there is no stipulation to the contrary.
Nevertheless, damages shall be paid

If the obligor
a. Refuses to pay the penalty or
b. Is guilty of fraud in the fulfillment of the
obligation.
The penalty may be enforced

o Only when it is demandable
o In accordance with the provisions of this
Code.
Art. 1229. The judge shall equitably reduce the

penalty
When the principal obligation
Has been partly or irregularly complied with
By the debtor.
Even if there has been no performance,

o The penalty may also be reduced by the
courts
o If it is
Iniquitous or
Unconscionable.
Art. 1230. The nullity of the penal clause
Does not carry with it

o Nullity of the principal obligation.
The nullity of the principal obligation

Carries with it
o Nullity of the penal clause.
E. BREACH OF OBLIGATIONS (ART 1170)
Art. 1227.
General Rule:
The debtor cannot exempt himself
From the performance of the obligation
By paying the penalty,

Exception:
o Save in the case where
o This right has been expressly reserved
for him.
General Rule:
Neither can the creditor demand

o The fulfillment of the obligation and
o The satisfaction of the penalty at the same
time,
Exception:
o Unless this right has been clearly
granted him.
However, if after the creditor has decided

To require the fulfillment of the obligation,
o The performance thereof should become
impossible
o Without his fault,
The penalty may be enforced.
Art. 1228. Proof of actual damages
Suffered by the creditor

o Is not necessary
o In order that the penalty may be demanded.
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1. FRAUD (ARTS. 1171, 1338, 1344)

3. DELAY (ARTS. 1169, 1165, 1786, 1788, 1896,
1942)
II. Excuse for non-performance
1. FORTUITOUS EVENT (ARTS. 1174, 552, 1165,

2147, 2159)
2. ACT OF CREDITOR
Art. 1170.
Those who
o In the performance of their obligations are
o Guilty of
Fraud, negligence, or delay, and

Those who
o In any manner
o Contravene the tenor thereof,
Are liable for damages.
1. FRAUD (ARTS. 1171, 1338, 1344)
Any waiver of
An action for future fraud
o Is void.
Art. 1338. There is fraud when,
Through insidious words or machinations

o Of one of the contracting parties,
The other is induced
To enter into a contract

o Which without them,
o He would not have agreed to.
Art. 1344. In order that fraud
May make a contract voidable, it

o Should be serious and
o Should not have been employed by both
contracting parties.
When negligence shows bad faith,

o The provisions of Articles 1171 and 2201,
paragraph 2, shall apply.
Art. 1171. Responsibility arising from

fraud
Is demandable in all obligations.
I. MANNER OF BREACH
Art. 1171. Responsibility arising from fraud
Diligence
Which is required by the nature of the
obligation and
Corresponds with
o The circumstances of the
Persons,
Time, and
Place.
I. Manner of Breach
Any waiver of
Is void.
Art. 2201, paragraph 2: In case of

o Fraud,
o Bad faith,
o Malice or
o Wanton attitude,
The obligor shall be responsible for
All damages
o Which may be reasonably
attributed to the
o Non-performance of the
obligation.
If the law or contract

Does not state the diligence
o Which is to be observed in the
performance,
That which is expected of a good father of a
family
o Shall be required.
3. DELAY (ARTS. 1169, 1165, 1786, 1788,

1896, 1942)
Art. 1169. Those obliged to deliver or to do
something
GENERAL RULE:
Incur in delay
From the time the obligee/creditor

o Judicially or extrajudicially demands from
them
o The fulfillment of their obligation.

Art. 1171. Responsibility arising from fraud
Any waiver of
o Is void.
Art. 1172. Responsibility arising from negligence
In the performance of every kind of obligation
Is also demandable,
o But such liability may be regulated by the
courts,
o According to the circumstances.
Art. 1173. The fault or negligence of the obligor
Consists in
o The omission of that
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EXCEPTION:
However, the demand by the obligee/creditor
Shall not be necessary
In order that delay may exist:

(1) When the obligation or the law
Expressly so declares; or
(2) When from the nature and circumstances of
the obligation
It appears that the designation of the

time when
o The thing is to be delivered or
o The service is to be rendered
Was a controlling motive

o For the establishment of the contract;
or
(3) When demand would be useless,
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CIVIL
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As when the obligor has rendered it

beyond his power to perform.
In reciprocal obligations,
Neither party incurs in delay if the other
o Does not comply or
o Is not ready to comply
In a proper manner
With what is incumbent upon him.
From the moment one of the parties fulfills his

obligation,
o Delay by the other begins.
Art. 1165.,
When what is to be delivered is a determinate

thing
The creditor,
o In addition to the right granted him by Article
1170,
May compel the debtor
To make the delivery.

*Art. 1170. Those who in the performance of
their obligations are guilty of fraud, negligence,
or delay, and those who in any manner
contravene the tenor thereof, are liable for
damages.
If the thing to be delivered is indeterminate or

generic,
He may ask that the obligation
o Be complied with
If the obligor delays, or has promised to deliver
The same thing to two or more persons
o Who do not have the same interest,
He shall be responsible for any fortuitous event
Art. 1786.
Every partner
Is a debtor of the partnership

o For whatever he may have promised to
contribute to the partnership.
His liability shall begin from
The time he converted the amount to his

own use.
Art. 1896. The agent owes interest
On the sums he has applied to his own use
From the day on which he did so, and
On those which he still owes

o After the extinguishment of the agency.
Art. 1942. The bailee is liable for the loss of the
thing,
Even if it should be through a fortuitous event:

(1) If he devotes the thing
o To any purpose
o Different from that for which it has been
loaned;
(2) If he keeps it
o Longer than the period stipulated, or
o After the accomplishment of the use
For which the commodatum has been

constituted;
(3) If the thing loaned has been delivered
o General Rule: With appraisal of its value,
Exception: Unless there is a stipulation

o Exempting the bailee from
responsibility
o In case of a fortuitous event;
(4) If he lends or leases the thing
To a third person,
Who is not a member of his household;

(5) If, being able to save either
The thing borrowed or
His own thing,

o He chose to save the latter (his own
thing).
He (partner) shall also be bound for warranty

In case of eviction
o With regard to specific and determinate
things
Which he may have contributed to the
partnership,
In the same cases and in the same manner as
o The vendor is bound with respect to the
vendee.
He shall also be liable for the fruits thereof
o From the time they should have been
delivered,
o Without the need of any demand.
Art. 1788. A partner who
Has undertaken to contribute a sum of money

and
Fails to do so
o Becomes a debtor
o For the interest and damages
From the time he should have

complied with his obligation.
The same rule applies to

o Any amount he may have taken from the
partnership coffers, and
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business

In bad faith.
II. EXCUSE FOR NON-PERFORMANCE

1. FORTUITOUS EVENT (ARTS. 1174, 552,
1165, 2147, 2159)
Art. 1174.
General Rule: No person shall be responsible for

those events
o Which could not be foreseen, or
o Which though foreseen, were inevitable.
Exception: Except in cases

o Expressly specified by the law, or
o When it is otherwise declared by
stipulation, or
o When the nature of the obligation
Requires the assumption of risk,

Art. 552. A possessor in good faith
General Rule: Shall not be liable for

o The deterioration or
o Loss of the thing possessed,
Exception: Except in cases in which it is proved

that
o He has acted with
Fraudulent intent or
Negligence,
o After the judicial summons.
(4)

payment,


have been received

For any loss or impairment of the thing
o From any cause, and
For damages to the person who delivered the
thing,
o Until it is recovered.
2. ACT OF CREDITOR
A possessor in bad faith

Shall be liable for deterioration or loss
In every case,
o Even if caused by a fortuitous event.
Art. 1165.,

thing
The creditor,
1170,

damages.

generic,
o Be complied with

(1)
Which the owner was not accustomed to

embark upon;
(2)

(3)
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F. REMEDIES FOR BREACH OF OBLIGATIONS
NCC Arts. 1165-68, 1170, 1177-78, 1191-92, 2236
FC Arts. 153, 155
Rule 39 Sec. 13
III.
EXTRA-JUDICIAL REMEDIES
1.
2.
IV.
EXPRESSLY GRANTED BY LAW ARTS.

1786, 1788, 1526
STIPULATED
JUDICIAL REMEDIES
1.
2.
3.
PRINCIPAL REMEDIES ARTS. 1191, 1170

SUBSIDIARY REMEDIES ARTS. 1380, 1177
ANCILLARY REMEDIES RULES OF COURT
F. REMEDIES FOR BREACH OF OBLIGATIONS

NCC Arts. 1165-68, 1170, 1177-78, 1191-92,
2236
FC Arts. 153, 155
Rule 39 Sec. 13
Art. 1165.,

thing
The creditor,
1170,

damages.

generic,
o Be complied with
Art. 1166. The obligation to give a determinate

thing
o Includes that of delivering
All its accessions and accessories,

o Even though they may not have been mentioned.
Art. 1177. The creditors,
o After having pursued the property
In possession of the debtor

o To satisfy their claims,
May exercise all the rights and
Bring all the actions of the debtor
o For the same purpose (to satisfy their
claims),
Save those which are inherent in

his (debtors) person;
They may also impugn
o The acts which the debtor
o May have done to defraud them.
Art. 1178. Subject to the laws,
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General rule:
All rights acquired
o In virtue of an obligation
Are transmissible,
Exception:
o If there has been no stipulation to the
contrary.
*Art. 1191. The power to rescind obligations
Is implied in reciprocal ones,
In case one of the obligors

o Should not comply
o With what is incumbent upon him.
The injured party

May choose between
(1) The fulfillment or
(2) The rescission of the obligation,
With the payment of damages in

either case.
He may also seek rescission,
o Even after he has chosen fulfillment,
If the fulfillment should become

impossible.
The court shall decree the rescission claimed,

o Unless there be just cause
o Authorizing the fixing of a period.
This is understood to be without prejudice to

The rights of third persons
o Who have acquired the thing,
o In accordance with Articles 1385 and
1388 and
o The Mortgage Law.
Art. 1385. Rescission creates the obligation to return the

things which were the object of the contract, together with
their fruits, and the price with its interest; consequently, it
can be carried out only when he who demands rescission
can return whatever he may be obliged to restore.
Neither shall rescission take place when the things which
are the object of the contract are legally in the possession
of third persons who did not act in bad faith.
In this case, indemnity for damages may be demanded
from the person causing the loss.
Art. 1388. Whoever acquires in bad faith the things
alienated in fraud of creditors, shall indemnify the latter for
damages suffered by them on account of the alienation,
whenever, due to any cause, it should be impossible for him
to return them.
If there are two or more alienations, the first acquirer shall
be liable first, and so on successively.
Art. 1192. In case both parties

Have committed a breach of the obligation,
o The liability of the first infractor
o Shall be equitably tempered by the courts.
If it cannot be determined
Which of the parties
First violated the contract,
o The contract shall be deemed
extinguished, and
o Each shall bear his own damages.
Art. 2236. The debtor is liable

With all his property,
o Present and future,
For the fulfillment of his obligations,
o Subject to the exemptions provided by
law.
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CIVIL
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Art. 302.
Neither the right to receive legal support
Nor any money or property obtained as such
support or
Any pension or gratuity from the government
o Is subject to attachment or execution.
Art. 1708. The laborer's wages
General Rule
Shall not be subject to execution or attachment,
Exception:
Except for debts incurred for
Food,
Shelter,
Clothing and
Medical attendance.
Family Code
Art. 153. The family home
Is deemed constituted
On a house and lot
o From the time it is occupied as a family
residence.
o From the time of its constitution and
So long as any of its beneficiaries

actually resides therein,
The family home continues to be

such and
Is exempt from
Execution,
Forced sale or
Attachment
Except as hereinafter provided and to

the extent of the value allowed by
law.
Art. 155.
General Rule:
o The family home shall be exempt from execution,
forced sale or attachment
Exception:
o Except for:
(1) Non-payment of taxes;
(2) Debts incurred
Prior to the constitution of the family

home;
(3) Debts
Secured by mortgages on the premises
Before or after such constitution; and

(4) Debts due to
Labourers, mechanics, architects,

builders, materialmen and others
Who have rendered service or
Who furnished material

o For the construction of the
building.
Land necessarily used in connection therewith;
(b) Ordinary tools and implements
Personally used by him
In his trade, employment, or livelihood;

(c) Three horses, or three cows, or three
carabaos, or other beasts of burden
Such as the judgment obligor may select
Necessarily used by him
In his ordinary occupation;

(d) His necessary clothing and articles for
ordinary personal use,
Excluding jewelry;
(e) Household furniture and utensils
Necessary for housekeeping, and
Used for that purpose

o By the judgment obligor and his family,
Such as the judgment obligor may select,
Of a value not exceeding P100;

(f) Provisions
For individual or family use
Sufficient for 4 months;

(g)
The professional libraries and equipment of

Judges,
Lawyers,
Physicians,
Pharmacists,
Dentists,
Engineers,
Surveyors,
Clergymen,
Teachers, and
Other professionals,
o Not exceeding P300,000 in value;
(h)
One fishing boat and accessories

Not exceeding the total value of P100,000
Owned by a fisherman and
By the lawful use of which he earns his
livelihood;
(i) So much of the salaries, wages, or earnings
Of the judgment obligor
Of his personal services

o Within the 4 months preceding the levy
As are necessary for the support of his family;

(j) Lettered gravestones;
(k) Monies benefits, privileges, or annuities
Accruing or in any manner growing out of

o Any life insurance;
RULE 39 - EXECUTION, SATISFACTION AND

EFFECT OF JUDGMENTS
(l) The right to receive
Legal support, or money or property

o Obtained as such support, or
Any pension or gratuity from the

Government;
Sec. 13. Property exempt from execution.
(m) Properties specially exempt by law.
Except as otherwise expressly provided by law,

The following property, and no other,
Shall be exempt from execution: (13)
(a) The judgment obligor's
Family home as provided by law, or
The homestead in which he resides, and
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But no article or species of property mentioned in

his section
Shall be exempt from execution
Issued upon a judgment
o Recovered for its price or
o Upon a judgment of foreclosure of a
mortgage thereon.
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CIVIL
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o
I. EXTRA-JUDICIAL REMEDIES
Where the ownership has passed to the

buyer.
2. STIPULATED
1. EXPRESSLY GRANTED BY LAW ARTS.

1786, 1788, 1526
II. JUDICIAL REMEDIES

Art. 1786.
Every partner
Is a debtor of the partnership

o For whatever he may have promised to
contribute to the partnership.
He (partner) shall also be bound for warranty

In case of eviction
o With regard to specific and determinate
things
Which he may have contributed to the
partnership,
In the same cases and in the same manner as
o The vendor is bound with respect to the
vendee.
He shall also be liable for the fruits thereof
o From the time they should have been
delivered,
o Without the need of any demand.
Art. 1788. A partner who
Has undertaken to contribute a sum of money

and
Fails to do so
o Becomes a debtor
o For the interest and damages
From the time he should have

complied with his obligation.
The same rule applies to

o Any amount he may have taken from the
partnership coffers, and
o His liability shall begin from
The time he converted the amount to his

own use.
Art. 1526. Subject to the provisions of this Title,

notwithstanding
That the ownership in the goods may have

passed to the buyer,
o The unpaid seller of goods, as such, has:
(1) A lien
On the goods or right to retain them

For the price
While he is in possession of them;
(2) A right of stopping the goods in transitu
After he has parted with the

possession of them
In case of the insolvency of the

buyer;
(3) A right of resale
As limited by this Title;

(4) A right to rescind
The sale as likewise limited by this

Title.
Where the ownership in the goods

Has not passed to the buyer,
o The unpaid seller has,
In addition to his other remedies

o A right of withholding delivery
Similar to and coextensive with
His rights of lien and stoppage in

transitu
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1. PRINCIPAL REMEDIES ARTS. 1191, 1170

* Art. 1191. The power to rescind obligations

o Should not comply
The injured party

May choose between
(1) The fulfillment or
(2) The rescission of the obligation,
With the payment of damages in

either case.
If the fulfillment should become

impossible.


o In accordance with Articles 1385 and
1388 and
o The Mortgage Law.

to return them.
Art. 1170.
Those who
o In the performance of their obligations are
o Guilty of
Fraud, negligence, or delay, and

Those who
o In any manner
o Contravene the tenor thereof,
Are liable for damages.
2. SUBSIDIARY REMEDIES ARTS. 1380,

1177
Art. 1380. Contracts validly agreed upon
May be rescinded
32
CIVIL
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o
In the cases established by law.


Bring all the actions of the debtor
o For the same purpose (to satisfy their
claims),
Save those which are inherent in

his (debtors) person;
3. ANCILLARY REMEDIES RULES OF COURT
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CIVIL
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G. MODES OF EXTINGUISHMENT OF
OBLIGATIONS Art. 1231
8.
PAYMENT OR PERFORMANCE ARTS. 123244, 1246-51, 1302

RA 8183
PD 72, SECS. 31-32
B. APPLICATION OF PAYMENTS ARTS.
1252-54, 1248
C. PAYMENT BY CESSION OR ASSIGNMENT
ART. 1255
D. TENDER OF PAYMENT AND
CONSIGNATION ARTS. 1256-61
9.
LOSS OF THE THING DUE OR IMPOSSIBILITY

OF PERFORMANCE ARTS. 1262-69, 1189,
1174, 1165, 1268, 1942, 1979, 2147, 2159
10. CONDONATION OR REMISSION OF THE DEBT
ARTS. 1270-74, 748, 749
Rescission,
Fulfillment of a resolutory condition, and
Prescription,
Are governed elsewhere in this Code.
1. PAYMENT OR PERFORMANCE
ARTS. 1232-44, 1246-51, 1302
RA 8183
PD 72, SECS. 31-32
SECTION 1. - Payment or Performance
Art. 1232. Payment means
Not only the delivery of money
But also the performance,

o In any other manner,
Of an obligation.
Art. 1233. A debt shall not be understood to have
been paid
Unless the thing or service
o In which the obligation consists
Has been completely delivered or rendered,
o As the case may be.
11. CONFUSION OR MERGER OF RIGHTS ARTS.
1275-77, 1215, 1217

12. COMPENSATION ARTS. 1278-1290, 1243,
1215
A. LEGAL
B. CONVENTIONAL/FACULTATIVE
C. JUDICIAL
13. NOVATION ARTS. 1291-1304, 1215
KINDS OF NOVATION
A. AS TO ITS NATURE
I. SUBJECTIVE OR PERSONAL
II. OBJECTIVE RO REAL
B. AS TO ITS FORM
I. EXPRESS
II. IMPLIED
14. OTHER MODES
ACT OF CREDITOR
G. MODES OF EXTINGUISHMENT OF
OBLIGATIONS Art. 1231
Art. 1231. Obligations are extinguished by:
1. Payment or performance:
2.
Loss of the thing due:
3.
Condonation or remission of the debt;
4.
Confusion or merger of the rights of creditor and

debtor;
5.
Compensation;
6.
Novation.
Other causes of extinguishment of obligations,

such as
Annulment,
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Art. 1234. If the obligation has been substantially

performed in good faith,
The obligor may recover
As though there had been a strict and complete
fulfillment,
o Less damages
o Suffered by the obligee.
Art. 1235. When the obligee accepts the
performance,
Knowing its incompleteness or irregularity, and
Without expressing any protest or objection,
o The obligation is deemed fully complied
with.
Art. 1236. The creditor is not bound to accept
Payment or performance by a third person
Who has no interest in the fulfillment of the
obligation,
o Unless there is a stipulation to the contrary.
Whoever pays for another

o May demand from the debtor
o What he has paid,
Except that if he paid
He can recover
Only insofar as the payment
Has been beneficial to the debtor.
Art. 1237. Whoever pays on behalf of the debtor

o To subrogate him (creditor) in his (creditors)
rights,
o Such as those arising from a mortgage,
guaranty, or penalty.
Art. 1238. Payment made
By a third person
o Who does not intend to be reimbursed
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CIVIL
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o By the debtor
Is deemed to be a donation,
o Which requires the debtor's consent.
But the payment is in any case
Valid as to the creditor
o Who has accepted it.
Art. 1239. In obligations to give,

Payment made by one
o Who does not have the
Free disposal of the thing due

and
Capacity to alienate it
Shall not be valid,
o Without prejudice to the provisions of
Article 1427 under the Title on "Natural
Obligations."
o
o
o
o
Art. 1241.
Payment to a person
o Who is incapacitated to administer his
property
Shall be valid
o If he has kept the thing delivered, or
o Insofar as the payment has been
beneficial to him.
Payment made to a third person

Shall also be valid
o Insofar as it has redounded to the benefit of
the creditor.
o Such benefit to the creditor
o Need not be proved in the following cases:
(1) If after the payment,
o The third person acquires the
creditor's rights;
(2) If the creditor ratifies
o The payment to the third person;
(3) If by the creditor's conduct,
o The debtor has been led to believe
o That the third person had authority
o To receive the payment.
Art. 1242. Payment made in good faith

o To any person
o In possession of the credit
o Shall release the debtor.
Art. 1243. Payment made to the creditor
o By the debtor
o After the debtor has been judicially ordered
o To retain the debt
o Shall not be valid.
Art. 1244. The debtor of a thing
o To receive a different one,
ralc
In obligations to do or not to do,

An act or forbearance
Cannot be substituted by
o Another act or forbearance
Against the obligee's will.
Art. 1246. When the obligation consists in the

delivery
Of an indeterminate or generic thing,

o Whose quality and circumstances have not
been stated,
The creditor cannot demand a thing of superior

quality.
Art. 1427. When a minor between eighteen and twenty-one

years of age, who has entered into a contract without the
consent of the parent or guardian, voluntarily pays a sum of
money or delivers a fungible thing in fulfillment of the
obligation, there shall be no right to recover the same from
the obligee who has spent or consumed it in good faith.
Art. 1240. Payment shall be made to

The person
o In whose favor the obligation has been
constituted, or
His successor in interest, or
Any person authorized to receive it.
Although the latter may be
Of the same value as, or
More valuable than that which is due.
Neither can the debtor

o Deliver a thing of inferior quality.
The purpose of the obligation and
Other circumstances
Shall be taken into consideration.
Art. 1247. Unless it is otherwise stipulated,

The extrajudicial expenses
o Required by the payment
Shall be for the account of the debtor.
With regard to judicial costs,

o The Rules of Court shall govern.
Art. 1248. Unless there is an express stipulation to

that effect,
o Partially to receive the prestations

Neither may the debtor be required
o To make partial payments.
However, when the debt is

o In part liquidated and
o In part unliquidated,
The creditor may demand and the debtor may
effect
o The payment of the creditor
Without waiting for the liquidation of the

debtor.
Art. 1249.
The payment of debts in money
o Shall be made in the currency stipulated, and
o If it is not possible to deliver such currency,
Then in the currency which is legal

tender in the Philippines.
The delivery of
o Promissory notes payable to order, or
o Bills of exchange or
o Other mercantile documents
Shall produce the effect of payment
Only when they have been cashed, or
When through the fault of the creditor
They have been impaired.
In the meantime, the action derived from the

original obligation
o Shall be held in the abeyance.
Art. 1250. In case an extraordinary inflation or

deflation
Of the currency stipulated
o Should supervene,
The value of the currency
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CIVIL
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At the time of the establishment of the

obligation
Shall be the basis of payment,
o Unless there is an agreement to the contrary.
o
Art. 1251. Payment shall be made

in the place designated in the obligation.
There being no express stipulation and

If the undertaking is to deliver a determinate
thing,
o The payment shall be made
o Wherever the thing might be
At the moment the obligation was

constituted.
In any other case
o The place of payment shall be
o The domicile of the debtor.
If the debtor
o Changes his domicile in bad faith or
o After he has incurred in delay,
The additional expenses
Shall be borne by him.
Section 1. Every provision contained in, or

made with respect to, any obligation
o
Which provision purports to give the obligee
o
The right to require payment
In gold or in a particular kind of coin or

currency
Other than Philippine currency or
In an amount of money of the Philippines

measured thereby,
o
Be as it is hereby declared against public
policy, and null, void and of no effect, and
No such provision shall be contained in,

or made with respect to,
Any obligation hereafter incurred.

o
These provisions are without prejudice to venue

under the Rules of Court.
o
o
Art. 1302. It is presumed that there is legal

subrogation:
(1) When a creditor pays another creditor
Who is preferred,
o Even without the debtor's knowledge;
(2) When a third person, not interested in the
obligation, pays
With the express or tacit approval
Of the debtor;
(3) When, even without the knowledge of the debtor,
a person interested in the fulfillment of the
obligation pays,
Without prejudice to the effects of confusion

as to the latter's share.
REPUBLIC ACT NO. 529

o
o
June 16, 1950

As repealed by RA 8183
AN ACT TO ASSURE UNIFORM VALUE TO

PHILIPPINE COIN AND CURRENCY
Be it enacted by the Senate and House of

Representatives of the Philippines in Congress
assembled::
WHEREAS, the value of Philippine coin and

currency
o
Affects public interest and
o
Is subject to regulation by the Congress of
the Philippines; and
WHEREAS, it has been disclosed that the

provisions of certain obligations contracted in the
Philippines
o
Purport to give the obligee
o
The right to require payment
o
In gold or
o
In a particular kind of coin or currency or
o
In an amount in money of the Philippines
measured thereby,
o
Thus
Obstructing the power of the Congress to

regulate the value of the money of the
Philippines and
Contravening the policy of the Congress,

here declared,
Every obligation
Heretofore or hereafter incurred,
Whether or not any such provision as to

payment is contained therein or made
with respect thereto,
Shall be discharged upon payment
In any coin or currency
Which at the time of payment is legal

tender
For public and private debts:

Provided, That, if the obligation was
Incurred prior to the enactment of this

Act and required payment in a particular
kind of coin or currency other than
Philippine currency,
It shall be discharged in Philippine

currency
Measured at the prevailing rates of

exchange at the time the obligation was
incurred,
Except in case of a loan made in a

foreign currency
Stipulated to be payable in the same

currency
o
In which case the rate of
exchange
o
Prevailing at the time of the
stipulated date of payment
o
Shall prevail.
All coin and currency, including

Central Bank notes, heretofore or
hereafter issued and declared by the
Government of the Philippines
o
Shall be legal tender
o
For all debts, public and private.
Section 2. All acts and parts of acts inconsistent

with this Act are hereby repealed.
Section 3. This Act shall take effect upon its
approval.
Approved: June 16, 1950
REPUBLIC ACT NO. 8183
AN ACT REPEALING REPUBLIC ACT NUMBERED

529 AS AMENDED,
ENTITLED "AN ACT TO ASSURE THE UNIFORM
VALUE OF PHILIPPINE COIN AND CURRENCY."
Section 1. All monetary obligations shall be
settled
o
In the Philippine currency
Which is legal tender in the Philippines.

o
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To maintain at all times the equal and

stable power of every peso coined or
issued by the Philippines, in the
markets and in the payment of debts;
Now, therefore.
However, the parties may agree
36
CIVIL
LAW REVIEW 2
That the obligation or transaction

Shall be settled in any other currency
At the time of payment.
Sec. 2. - R.A. No. 529, as amended entitled "An

Act to Assume the Uniform Value of Philippine
Coin and Currency,"
o
Is hereby repealed.
Approved: June 11, 1996
PRESIDENTIAL DECREE No. 72

o November 29, 1972
o Amending RA 265, entitled "The Central Bank
Act"
Section 31. Section 34 of the same Act (RA 265)

is hereby amended to read as follows:
"Sec. 54. Legal tender power.
All notes and coins issued by the Central

Bank
Shall be fully guaranteed by the Government

of the Republic of the Philippines and
Shall be legal tender in the Philippines
For all debts, both public and private:
Provided, however, That coins shall be legal

tender
In amounts not exceeding fifty pesos
For denominations from ten centavos to

one peso, and
In amounts not exceeding twenty pesos

for denominations of five centavos or
less."
In favor of one and the same creditor,

o May declare
At the time of making the payment,

o To which of them the same must be applied.
Unless
The parties so stipulate, or
When the application of payment
Is made by the party
For whose benefit
The term has been constituted,
Application shall not be made
As to debts which are not yet due.
If the debtor accepts from the creditor

A receipt
In which an application of the payment is made,
o The former cannot complain of the same,
o Unless there is a cause for invalidating
the contract.
Art. 1253. If the debt produces interest,

Payment of the principal
Shall not be deemed to have been made
o Until the interests have been covered.
Art. 1254. When the payment cannot be applied
o In accordance with the preceding rules,
or
If application cannot be inferred from other
circumstances,
The debt which is most onerous to the debtor,
o Among those due,
Shall be deemed to have been satisfied.
Section 32. Section 63 of the same Act (RA 529)

is hereby amended to read as follows:
o
"Sec. 63. Legal character.
Checks representing deposit money
Do not have legal tender power and
Their acceptance in the payment of

debts, both public and private,
Is at the option of the creditor:
Provided, however, That

A check which has been cleared and
credited
o To the account of the creditor
Shall be equivalent to a delivery to
the creditor
Of cash
In an amount equal to the amount
credited to his account."

Art. 1245. Dation in payment,
Whereby property is alienated
To the creditor
In satisfaction of a debt in money,
o Shall be governed by the law of sales.
B. APPLICATION OF PAYMENTS ARTS. 1252-54,
1248
SUBSECTION 1. - Application of Payments
Art. 1252. He who has various debts of the same
kind
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If the debts due are of the same nature and

burden,
o The payment shall be applied
o To all of them proportionately.
Art. 1248. Unless there is an express stipulation to

that effect,
o Partially to receive the prestations

Neither may the debtor be required
o To make partial payments.
However, when the debt is

o In part liquidated and
o In part unliquidated,
The creditor may demand and the debtor may
effect
o The payment of the creditor
Without waiting for the liquidation of the debtor.
C. PAYMENT BY CESSION OR ASSIGNMENT

ART. 1255
SUBSECTION 2. - Payment by Cession
Art. 1255. The debtor may cede or assign his
property
To his creditors
o In payment of his debts.
This cession,
o Unless there is stipulation to the
contrary,
Shall only release the debtor
From responsibility
o For the net proceeds
o Of the thing assigned.
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CIVIL
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The agreements which,

o On the effect of the cession,
Are made between the debtor and his creditors
o Shall be governed by special laws.
D. TENDER OF PAYMENT AND CONSIGNATION

ARTS. 1256-61
SUBSECTION 3. - Tender of Payment and
Consignation
Art. 1256. If the creditor
o To whom tender of payment has been
made
Refuses to accept it,
o Without just cause
The debtor shall be released from responsibility
By the consignation of
o The thing or sum due.
Before a judicial declaration

o That the consignation has been properly
made,
The debtor may withdraw the thing

or the sum deposited,
Allowing the obligation to remain in

force.
Art. 1261. If, the consignation having been made,

the creditor should authorize the debtor to withdraw
the same,
He shall lose
o Every preference which he may have
o Over the thing.
The co-debtors, guarantors and sureties
o Shall be released.
Consignation alone
Shall produce the same effect
In the following cases:
1. When the creditor is
Absent or unknown, or
Does not appear at the place of payment;

2. When creditor is
Incapacitated to receive the payment
At the time it is due;

3. When, without just cause, creditor
Refuses to give a receipt;

4. When two or more persons
Claim the same right to collect;

5. When the title of the obligation
Has been lost.
Art. 1257.
In order that the consignation of the thing due
May release the obligor,
o It must first be announced
o To the persons
o Interested in the fulfillment of the obligation.
The consignation shall be ineffectual

If it is not made strictly
In consonance with the provisions
o Which regulate payment.
Art. 1258. Consignation shall be made

By depositing
o The things due
At the disposal of judicial authority,
o Before whom the tender of payment shall
be proved, in a proper case, and
The announcement of the consignation in other
cases.
The consignation having been made,

The interested parties
o Shall also be notified thereof.
Art. 1259. The expenses of consignation,

When properly made,
Shall be charged against the creditor.
Art. 1260. Once the consignation has been duly
made,
The debtor may ask the judge
o To order the cancellation of the
obligation.
Before the creditor

o Has accepted the consignation, or
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CIVIL
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2. LOSS OF THE THING DUE OR IMPOSSIBILITY

OF PERFORMANCE
ARTS. 1262-69, 1189, 1174, 1165, 1268,
1942, 1979, 2147, 2159
Unless the thing having been offered by

him
To the person who should receive it,
The latter refused
Without justification to accept it.
SECTION 2. - Loss of the Thing Due

Art. 1262.
An obligation
o Which consists in the delivery
o Of a determinate thing
Shall be extinguished
If it should be lost or destroyed
Without the fault of the debtor, and
Before he has incurred in delay.
When by law or stipulation,

o The obligor is liable
o Even for fortuitous events,
The loss of the thing
Does not extinguish the obligation, and
He shall be responsible for damages.

o The same rule applies when
o The nature of the obligation
Requires the assumption of risk.
Art. 1269. The obligation having been extinguished

By the loss of the thing,
The creditor shall have all the rights of action
o which the debtor may have
Against third persons
o By reason of the loss.
Art. 1189.
When the conditions have been imposed

o With the intention of
o Suspending the efficacy of an obligation
to give,
The following rules shall be observed
In case of the
o Improvement,
o Loss or
o Deterioration of the thing
During the pendency of the condition:

The obligation shall be extinguished;
Art. 1263. In an obligation to deliver a generic thing,

The loss or destruction
Of anything of the same kind
o Does not extinguish the obligation.
He shall be obliged to pay damages;
It is understood that the thing is lost

i. When it perishes, or
ii. Goes out of commerce, or
iii. Disappears in such a way that its
existence is unknown or it cannot be
recovered;
Art. 1264. The courts shall determine whether,

under the circumstances,
The partial loss of the object of the obligation
Is so important
o As to extinguish the obligation.
Art. 1265.
Whenever the thing is lost
o In the possession of the debtor,
It shall be presumed that the loss
Was due to his fault,
o Unless there is proof to the contrary, and
o Without prejudice to the provisions of article
1165.
(3) When the thing deteriorates
The impairment is to be borne by the

creditor;
(4) If it deteriorates
The creditor may choose between

i. The rescission of the obligation and
ii. Its fulfillment,
With indemnity for damages in either

case;
This presumption does not apply

In case of
o Earthquake,
o Flood,
o Storm, or
o Other natural calamity.
(5) If the thing is improved
By its nature, or
By time,
The improvement shall inure to
The benefit of the creditor;
Art. 1266. The debtor in obligations to do

Shall also be released
o When the prestation becomes
o Legally or physically impossible
Without the fault of the obligor.

Art. 1267. When the service has become so difficult
As to be manifestly beyond
The contemplation of the parties,
o The obligor may also be released
therefrom,
o In whole or in part.
Art. 1268.
When the debt
o of a thing certain and determinate
Proceeds from a criminal offense,
o The debtor shall not be exempted from
o The payment of its price,
o Whatever may be the cause for the loss,
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(6) If it is improved
At the expense of the debtor,
He shall have no other right
Than that granted to the usufructuary.

Art. 1174.
General Rule: No person shall be responsible

o For those events
o Which could not be foreseen, or
o Which though foreseen, were inevitable.
Exception: Except in cases

1. Expressly specified by the law, or
2. When it is otherwise declared by stipulation,
or
3. When the nature of the obligation
39
CIVIL
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Requires the assumption of risk,
Art. 1165. When what is to be delivered is
A determinate thing,
o The creditor,
o In addition to the right granted him by
Article 1170*,
o May compel the debtor
o To make the delivery.
If the thing is indeterminate or generic,

o He may ask that the obligation
o Be complied with
If the obligor
o Delays, or
o Promised to deliver the same thing to
two or more persons who do not have the
same interest,
o He shall be responsible for any fortuitous
event
Art. 1268.
When the debt
o of a thing certain and determinate
Proceeds from a criminal offense,
o The debtor shall not be exempted from
o The payment of its price,
o Whatever may be the cause for the loss,
Unless the thing having been offered

by him
To the person who should receive it,
The latter refused
Without justification to accept it.
3.
4.
Without the depositor's permission;

If he delays its return;
If he allows others to use it,
Even though he himself may have been
authorized to use the same.

(1)
Which the owner was not

accustomed to embark upon;
(2)

(3)

business

(4)
In bad faith.
payment,


have been received

For any loss or impairment of the thing
o From any cause, and
For damages to the person who delivered the
thing,
Until it is recovered.
Art. 1942. The bailee is liable for the loss of the

thing,
Even if it should be through a fortuitous event:

(1)
If he devotes the thing

To any purpose
Different from that
For which it has been loaned;
(2) If he keeps it
Longer than the period stipulated, or
After the accomplishment of the use

o For which the commodatum has been
constituted;
(3) If the thing loaned has been delivered
General Rule: With appraisal of its value,

o Exception: Unless there is a
stipulation
o Exempting the bailee from
responsibility
In case of a fortuitous event;

(4) If he lends or leases the thing
To a third person,
Who is not a member of his household;

(5)
If, being able to save either

The thing borrowed or
His own thing,
He chose to save the latter (his own thing).
Art. 1979. The depositary is liable

For the loss of the thing
Through a fortuitous event if:
1. It is so stipulated;
2. He uses the thing
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3. CONDONATION OR REMISSION OF THE DEBT
ARTS. 1270-74, 748, 749
SECTION 3. - Condonation or Remission of the Debt
Art. 1270. Condonation or remission is
Essentially gratuitous, and
Requires the acceptance by the obligor.
It may be made
o Expressly or impliedly.
One and the other kind

o Shall be subject to the rules
o Which govern inofficious donations.
Express condonation
Shall, furthermore, comply with the

forms of donation.
Art. 1271. The delivery of a private document

Evidencing a credit,
o Made voluntarily
o By the creditor to the debtor,
Implies the renunciation of the action
o Which the creditor had against the debtor.
If in order to nullify this waiver

o It should be claimed to be inofficious,
The debtor and his heirs may uphold it

o By proving that the delivery of the document
o Was made in virtue of payment of the debt.
Art. 749. In order that the donation of an immovable

May be valid,
o It must be made in a public document,
o Specifying therein
The property donated and
The value of the charges which the

donee must satisfy.
The acceptance may be made

o In the same deed of donation or
o In a separate public document,
But it shall not take effect
o Unless it is done
o During the lifetime of the donor.
If the acceptance is made in a separate
instrument,
o The donor shall be notified thereof
o In an authentic form, and
o This step shall be noted in both instruments.
Art. 1272.
Whenever the private document
o In which the debt appears
Is found in the possession of the debtor,
It shall be presumed
o That the creditor delivered it voluntarily,
Unless the contrary is proved.

Art. 1273. The renunciation of the principal debt
Shall extinguish the accessory obligations;
o But the waiver of the accessory
obligations
o Shall leave the principal debt in force.
Art. 1274. It is presumed that the accessory
obligation of pledge
Has been remitted
When the thing pledged,
o after its delivery to the creditor,
Is found in the possession
o of the debtor, or
o of a third person
Who owns the thing.
Art. 748. The donation of a movable
May be made orally or in writing.
An oral donation
o Requires the simultaneous delivery
of the thing or
of the document
o Representing the right donated.
If the value of the personal property donated

o Exceeds five thousand pesos,
The donation and the acceptance
o Shall be made in writing,
Otherwise, the donation shall be void.
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4. CONFUSION OR MERGER OF RIGHTS
ARTS. 1275-77, 1215, 1217
SECTION 4. - Confusion or Merger of Rights
Reimburse his share to the debtor paying the

obligation,
Such share shall be borne by all his co-debtors,
o In proportion to the debt of each.
o
Art. 1275. The obligation is extinguished

From the time the characters
o Of creditor and debtor
Are merged in the same person.
Art. 1276.
Merger
o Which takes place in the person of
o The principal debtor or creditor
Benefits the guarantors.

Confusion
o Which takes place in the person of
o Any of the latter
Does not extinguish the obligation.

Art. 1277. Confusion does not extinguish
A joint obligation
o Except as regards the share
o Corresponding to the creditor or debtor
In whom the two characters concur.

Art. 1215.
o Novation,
o Compensation,
o Confusion or
o Remission of the debt,
Made by any of the solidary creditors or
With any of the solidary debtors,
Without prejudice to the provisions of

Article 1219.
The creditor
o Who may have executed any of these acts,
o As well as he who collects the debt,
Shall be liable to the others
o For the share in the obligation
o Corresponding to them.
Art. 1219. The remission made by the creditor of the share

which affects one of the solidary debtors does not release
the latter from his responsibility towards the co-debtors, in
case the debt had been totally paid by anyone of them
before the remission was effected.
Art. 1217.
Payment made
By one of the solidary debtors
If two or more solidary debtors

o Offer to pay,
The creditor may choose
o Which offer to accept.

o May claim from his co-debtors
Only the share which corresponds to

each,
With the interest for the payment already

made.
If the payment is made before the debt is due,

o No interest for the intervening period
o May be demanded.
Because of his insolvency,
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5. COMPENSATION
ARTS. 1278-1290, 1243, 1215
A. LEGAL ARTS. 1279, 1286, 1290
B. CONVENTIONAL ART. 1282
FACULTATIVE ARTS. 1287, 1288
C. JUDICIAL- ART. 1283
If the creditor communicated the cession to him

(debtor)
o But the debtor did not consent thereto,
o The latter (debtor) may set up the
compensation of debts
o Previous to the cession,
But not of subsequent ones.
If the assignment is made

Without the knowledge of the debtor,
o He may set up the compensation of all
credits
o Prior to the same and
o Also later ones
Until he had knowledge of the

assignment.
SECTION 5. - Compensation
Art. 1278. Compensation shall take place
When two persons,
o in their own right,
Are creditors and debtors of each other.
LEGAL
Art. 1279. In order that compensation may be
proper, it is necessary that:
1. Each one of the obligors
Be bound principally, and
That he be at the same time a principal
creditor of the other;
2. Both debts consist in a sum of money, or
If the things due are consumable,
They be of the same kind, and
Also of the same quality
If the latter has been stated;

3. The two debts be due;
4. They be liquidated and demandable;
5. Over neither of them
There be any retention or controversy,
Commenced by third persons and
Communicated in due time to the debtor.
Art. 1280. Notwithstanding the provisions of the
preceding article,
The guarantor may set up compensation
o As regards what the creditor may owe the
principal debtor.
Art. 1281. Compensation may be
o Total or partial.
When the two debts are of the same amount,

o There is a total compensation.
CONVENTIONAL
Art. 1282. The parties may agree upon the
compensation of debts which are not yet due.
JUDICIAL
Art. 1283. If one of the parties to a suit
Over an obligation
Has a claim for damages against the other,
o The former may set it off
o By proving his right
To said damages and
the amount thereof.

Art. 1284. When one or both debts
o Total or partial.
They may be compensated against each other
Before they are judicially rescinded or avoided.
Art. 1285.
The debtor who has consented to the assignment
of rights
o Made by a creditor
o In favor of a third person,
Cannot set up against the assignee
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The compensation which would pertain to

him
Against the assignor,
Unless the assignor was notified by

the debtor
At the time he gave his consent,
That he reserved his right to the

compensation.
LEGAL
Art. 1286. Compensation takes place
By operation of law,
o Even though the debts may be payable
o At different places,
But there shall be an indemnity
For expenses of
Exchange or
Transportation to the place of

payment.
FACULTATIVE
Art. 1287. Compensation shall not be proper
When one of the debts arises
o From a depositum or
o From the obligations
Of a depositary or
Of a bailee in commodatum.
Neither can compensation be set up against a

creditor
o Who has a claim for support
o Due by gratuitous title,
Without prejudice to the provisions of

paragraph 2 of Article 301.
Art. 301. The right to receive support cannot be renounced;

nor can it be transmitted to a third person. Neither can it be
compensated with what the recipient owes the obligor.
However, support in arrears may be compensated and
renounced, and the right to demand the same may be
transmitted by onerous or gratuitous title.
FACULTATIVE
Art. 1288. Neither shall there be compensation
If one of the debts consists in civil liability
Arising from a penal offense.
Art. 1289. If a person should have against him
several debts
Which are susceptible of compensation,
o The rules on the application of payments
o Shall apply to the order of the
compensation.
LEGAL
Art. 1290. When all the requisites mentioned in
Article 1279 are present,
Compensation takes effect
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CIVIL
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o By operation of law, and

Extinguishes both debts
o To the concurrent amount,
Even though the creditors and debtors
Are not aware of the compensation.
Art. 1243. Payment made to the creditor by the

debtor
After the latter has been judicially ordered to

retain the debt
Shall not be valid.

Art. 1215.
o Novation,
o compensation,
o confusion or
o remission of the debt,
Made by
o Any of the solidary creditors or
o With any of the solidary debtors,
Without prejudice to the provisions of Article

1219.
The creditor
Who may have executed
Any of these acts,
As well as he who collects the debt,
o Shall be liable to the others
Art. 1217.
Payment made
By one of the solidary debtors
If two or more solidary debtors Offer to pay,

o The creditor may choose
o Which offer to accept.

o May claim from his co-debtors
o Only the share which corresponds to each,
With the interest for the payment already

made.
If the payment is made before the debt is due,

o No interest for the intervening period may be
demanded.

o Because of his insolvency,
Reimburse his share to the debtor
o Paying the obligation,
Such share shall be borne by all his co-debtors,
o In proportion to the debt of each.
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6. NOVATION
ARTS. 1291-1304, 1215
KINDS OF NOVATION
A. AS TO ITS NATURE
I. SUBJECTIVE or PERSONAL ART. 1291
# 2, 3
II. OBJECTIVE or REAL - ART. 1291 # 1
B. AS TO ITS FORM
I. EXPRESS ART. 1292
II. IMPLIED ART. 1292
C. OTHER MODES
SECTION 6. - Novation
Art. 1291. Obligations may be modified by:
1. Changing their object or principal conditions;
2. Substituting the person of the debtor;
3. Subrogating a third person in the rights of the
creditor.
B. AS TO ITS FORM
I. EXPRESS ART. 1292
II. IMPLIED ART. 1292
Art. 1292. In order that an obligation may be
extinguished
By another
o Which substitutes the same,
It is imperative
o That it be so declared
In unequivocal terms, or
o That the old and the new obligations
Be on every point incompatible with each

other.
Art. 1293. Novation which consists in
Substituting a new debtor
o In the place of the original one,
May be made even
o Without the knowledge or
o Against the will of the latter (original one),
But not without the consent of the

creditor.
Payment by the new debtor

o Gives him the rights
o Mentioned in Articles 1236 and 1237.
Art. 1294. If the substitution is

o Without the knowledge or
o Against the will of the debtor,
The new debtor's insolvency or
Nonfulfillment of the obligations
Shall not give rise to any liability
On the part of the original debtor.

Art. 1295. The insolvency of the new debtor,
Who has been proposed by the original debtor
and
Accepted by the creditor,
o Shall not revive the action of the latter
o Against the original obligor,
Except when said insolvency
Was already existing and of public

knowledge, or
Known to the debtor, when the delegated

his debt.
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Art. 1296. When the principal obligation is

extinguished
In consequence of a novation,
o Accessory obligations may subsist
o Only insofar as they may benefit third
persons
Who did not give their consent.

Art. 1297. If the new obligation is void,
The original one shall subsist,
o Unless
The parties intended
That the former relation should be

extinguished
In any event.
Art. 1298. The novation is void
If the original obligation was void,
o Except
When annulment may be claimed only by

the debtor or
When ratification validates acts which

are voidable.
Art. 1299. If the original obligation was subject to
A suspensive or resolutory condition,
o The new obligation
o Shall be under the same condition,
Unless it is otherwise stipulated.

Art. 1300. Subrogation of a third person
In the rights of the creditor
o Is either legal or conventional.
The former (legal subrogation) is not presumed,

o Except in cases expressly mentioned in this
Code;
The latter (conventional subrogation) must be

clearly established
o In order that it may take effect.
CONVENTIONAL SUBROGATION
Art. 1301. Conventional subrogation of a third
person
Requires the consent
o Of the original parties and
o Of the third person.
LEGAL SUBROGATION
Art. 1302. It is presumed that there is legal
subrogation when:
1. A creditor pays another creditor
Who is preferred,
Even without the debtor's knowledge;
2. A third person, not interested in the obligation,
pays
With the express or tacit approval
Of the debtor;
3. Even without the knowledge of the debtor, a
person interested in the fulfillment of the
obligation pays,
Without prejudice to the effects of confusion
As to the latter's share.
Art. 1303. Subrogation
Transfers to the persons subrogated
o The credit
With all the rights thereto appertaining,
Either
Against the debtor or
Against third person,
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CIVIL
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o
o
Be they guarantors or possessors

of mortgages,
Subject to stipulation in a
conventional subrogation.
Art. 1304. A creditor, to whom partial payment has

been made,
May exercise his right for the remainder, and
He shall be preferred
To the person who has been subrogated in his
place
o In virtue of the partial payment
o Of the same credit.
Art. 1215.
o Novation,
o compensation,
o confusion or
o remission of the debt,
Made by
o Any of the solidary creditors or
o With any of the solidary debtors,
Without prejudice to the provisions of Article

1219.
The creditor
Who may have executed
Any of these acts,
As well as he who collects the debt,
o Shall be liable to the others
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9. ACCORDING TO SUBJECT MATTER
i. THING
ii. RIGHT
iii. SERVICE
II. CONTRACTS
ARTS. 1305-1422
A. IN GENERAL
1. DEFINITION ARTS. 1305
AUTO-CONTRACT ARTS. 1491,
1646, 1890
2. ELEMENTS OF CONTRACTS
i. ESSENTIAL
ii. NATURAL
iii. ACCIDENTAL
B. FUNDAMENTAL
CHARACTERISTICS/PRINCIPLES OF
CONTRACTS
1. CONSENSUALITY OF CONTRACTS
ARTS. 1305, 1317
CONTRACT OF ADHESION
2. AUTONOMY OF CONTRACTS
ARTS. 1306, 1799, 2088, 2130
3. MUTUALITY OF CONTRACTS
ARTS. 1308-10, 1182
ACCELERATION CLAUSE
ESCALATION CLAUSE
4. OBLIGATORY FORCE OF
CONTRACTS ARTS. 1159, 131516, 749
5. RELATIVITY OF CONTRACTS
ARTS. 1311-14, 1177-78, 1381(3)
PRIVITIY OF CONTRACTS
C. CLASSIFICATION OF CONTRACTS
1. ACCORDING TO DEGREE OF
DEPENDENCE
i. PREPARATORY ARTS.
1479, 1767, 1868
ii. PRINCIPAL ARTS. 1458,
1638, 1642, 1933, 1962
iii. ACCESSORY ARTS. 2047,
2085
2. ACCORDING TO PERFECTION
i. CONSENSUAL ARTS.
1315, 1475
ii. REAL ARTS. 1316, 1934
iii. FORMAL ARTS. 1356
3. ACCORDING TO SOLEMNITY OR
FORM ARTS. 1356
i. ANY FORM
ii. SPECIAL FORM
4. ACCORDING TO PURPOSE
i. TRANSFER OF
OWNERSHIP ARTS. 725,
1458, 1638
ii. CONVEYANCE OF USE
ARTS. 562, 1642, 1933
iii. RENDITION OF SERVICE
ARTS. 1642, 1868
5. ACCORDING TO NATURE OF
OBLIGATION PRODUCED
i. BILATERAL ARTS. 1642,
1458
ii. UNILATERAL ARTS. 2047,
2093
6. ACCORDING TO CAUSE ARTS.
1350
i. ONEROUS ARTS. 1458,
1638, 1642
ii. GRATUITOUS OR
LUCRATIVE ARTS. 725,
1933
iii. REMUNERATORY
7. ACCORDING TO RISK
i. COMMUTATIVE
ii. ALEATORY ART. 2010
8. ACCORDING TO NAME
i. NOMINATE
ii. INNOMINATE ART. 1307
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D. STAGES OF CONTRACTS
1. NEGOTIATION
CONTRACT OF OPTION ARTS.
1324, 1479, 1482
2. PERFECTION
3. PERFORMANCE
4. CONSUMMATION
E. ESSENTIAL ELEMENTS OF CONTRACTS
ART. 1318
1. CONSENT OF THE CONTRACTING
PARTIES ARTS. 1319-46, 37-42,
739, 1476 (4), 1490-91, 1533 (5),
1646, 1782, 1409 (7), 5
ARTS. 87, 124, 234 FC
RA 6809
ART. XII, SECS. 7 & 8
CONSTITUTION
COGNITION THEORY
MANIFESTATION THEORY
2. OBJECT CERTAIN, WHICH IS THE
SUBJECT MATTER OF THE
CONTRACT ARTS. 1347-49,
1311, 1178
3. CAUSE OF THE OBLIGATION
ARTS. 1350-55
4. DELIVERY
5. DUE OBSERVANCE OF
PRESCRIBED FORMALITIES
F.
FORM OF CONTRACTS ARTS. 1356-58

1. ANY FORM ORAL
2. SPECIAL FORM
i. VALIDITY ARTS 748, 749,
1744, 1773, 1874, 1956,
2134, ACT 1147 SEC. 22
ii. ENFORCEABILITY ARTS.
1403, 1878
iii. GREATER EFFICACY OR
CONVENIENCE ARTS.
1358
G. REFORMATION OF CONTRACTS ARTS.

1359 69
H. INTERPRETATION OF CONTRACTS
ARTS. 1370-79
I. KINDS OF CONTRACTS AS TO VALIDITY
1. VALID AND BINDING
2. VALID BUT DEFECTIVE
i. RESCISSIBLE CONTRACTS
ARTS. 1380-89, 1191
ii. VOIDABLE CONTRACTS
ARTS. 1390-1402, 132728, 1330
iii. UNENFORCEABLE
CONTRACTS ARTS. 140308, 1317, 1878
3. VOID OR INEXISTENT ARTS.
1409-22, 1318, 1353, 1378,
1491, 1898
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6.
II. CONTRACTS
A. IN GENERAL
1. DEFINITION ARTS. 1305
AUTO-CONTRACT ARTS. 1491, 1646,
1890
2. ELEMENTS OF CONTRACTS
i. ESSENTIAL
ii. NATURAL
iii. ACCIDENTAL
1. DEFINITION
Art. 1305. A contract
Is a meeting of minds
Between two persons
Whereby one binds himself, with respect to the

other, to
o Give something or
o Render some service.
Any others specially disqualified by law.
*Art. 1646. The persons disqualified to buy

Referred to in Articles 1490 and 1491,
o Are also disqualified
o To become lessees of the things mentioned
therein.
Art. 1890.
If the agent has been empowered to borrow
money,
o He may himself be the lender
o At the current rate of interest.
If he has been authorized to lend money at

interest,
o He cannot borrow it
o Without the consent of the principal.
AUTO-CONTRACT ARTS. 1491, 1646, 1890

*Art. 1491. The following persons cannot acquire by
purchase,
Even at a public or judicial auction,
Either in person or through the mediation of

another:
1. The guardian,
The property of
The person or persons who may be under

his guardianship;
2. Agents,
The property
Whose administration or sale may have

been entrusted to them,
o Unless the consent of the principal has
been given;
3. Executors and administrators,
The property of the estate under

administration;
4. Public officers and employees,
The property
o Of the State or
o Of any subdivision thereof, or
o Of any government-owned or
controlled corporation, or
institution,
The administration of which has been

intrusted to them;
This provision shall apply to judges and
government experts
Who, in any manner whatsoever, take
part in the sale;
5. Justices, judges, prosecuting attorneys,
clerks of superior and inferior courts, and
other officers and employees connected with
the administration of justice,
The property and rights

o In litigation or levied upon an execution
before the court
o Within whose jurisdiction or territory
they exercise their respective
functions;
o This prohibition includes the act of
acquiring by assignment and
o Shall apply to lawyers,
With respect to the property and
rights
Which may be the object of any
litigation
In which they may take part
By virtue of their profession.
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B. FUNDAMENTAL
CHARACTERISTICS/PRINCIPLES OF
CONTRACTS
1. CONSENSUALITY OF CONTRACTS ARTS.
1305, 1315, 1317
- Perfection by mere consent of consensual
contracts: Consensual contracts are perfected
by mere consent.
2. AUTONOMY OF CONTRACTS ARTS. 1306,
1799, 2088, 2130
- Freedom to stipulate: The parties are free to
create or establish stipulations, clauses, terms
and conditions as they may deem convenient,
provided these are not contrary to law, morals,
good customs, public order, or public policy
(Art. 1306).
Art. 1315. Contracts are perfected by mere consent,

and
From that moment the parties are bound

o Not only to the fulfillment of what has been
expressly stipulated
o But also to all the consequences
Which, according to thFeir nature,
May be in keeping with good faith, usage

and law.
*Art. 1317. No one may contract in the name of
another
Without being authorized by the latter, or
Unless he has by law a right to represent him.
3. MUTUALITY OF CONTRACTS ARTS. 1308-10,

1182
ACCELERATION CLAUSE
ESCALATION CLAUSE
- Mutuality of contracts: A contract binds both
contracting parties and its validity or the
compliance therewith cannot be left to the will
of only one party (Art. 1308).
4. OBLIGATORY FORCE OF CONTRACTS ARTS.
1159, 1308, 1315-16, 749
- Obligatory force of contracts: Obligations
arising from contracts have the force of law
between the contracting parties, and should be
complied with in good fiath.
5. RELATIVITY OF CONTRACTS ARTS. 1311-14,
1177-78, 1381(3)
PRIVITY OF CONTRACTS
- Relativity of contracts: Contracts take effect
only between the parties, their assigns, and
heirs. Except where the rights and obligations
arising from the contract are not transmissible
by their nature, by stipulation, or by provision
of law (Art. 1311) in which case the assigns or
heirs are not affected anymore.
1. CONSENSUALITY OF CONTRACTS ARTS.
1305, 1315, 1317
Contract of Adhesion - A contract in which one party
has already prepared a form of a contract, containing
stipulations desired by him and he simply asks the
other party to agree to them if he wants to enter into
the contract.
Adhesion contracts are not entirely prohibited. The
one who agrees to the contract is in reality, free to
reject it entirely; if he adheres, he gives his consent.
Void if there is UNDUE ADVANTAGE on the part of the
dominant party. Ambiguity construed strictly against
the drafter.
Art. 1305. A contract is
A meeting of minds
Between two persons
Whereby one binds himself, with respect to
the other,
o To give something or
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To render some service.
A contract entered into in the name of another

o By one
Who has no authority or legal

representation, or
Who has acted beyond his powers,

o Shall be unenforceable,
Unless it is ratified,
Expressly or impliedly,
By the person
On whose behalf it has been executed,
Before it is revoked by the other

contracting party.
2. AUTONOMY OF CONTRACTS ARTS. 1306,

1799, 2088, 2130
Art. 1306. The contracting parties may establish
such
Stipulations,
Clauses,
Terms and conditions
o As they may deem convenient,
Provided they are not contrary to
Law,
Moral,
Good customs,
Public order, or
Public policy.
Art. 1799. A stipulation which excludes
One or more partners
From any share in the profits or losses
o Is void.
Art. 2088. The creditor cannot
Appropriate the things
o Given by way of pledge or mortgage, or
Dispose of them.
Any stipulation to the contrary

o Is null and void.
Art. 2130. A stipulation forbidding the owner

From alienating the immovable mortgaged
o Shall be void.
3. MUTUALITY OF CONTRACTS ARTS. 1308-10,
1182
ACCELERATION CLAUSE
ACCELERATION CLAUSE, or the stipulation stating
that on the occasion of the mortgagors default, the
whole sum remaining unpaid automatically becomes
due and demandable. It is
ALLOWED
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ESCALATION CLAUSE
Requirements for a valid escalation clause

a. Increase is provided by law/resolution by the
monetary board
b. There is a corresponding deescalation clause
c. The effectivity of the clause is on or after the
effect of increase ordered on the maximum
interest
In lease, a clause authorizing the lessor to increase
the rent should real estate taxes or operating costs
increase.
Art. 1308.
The contract must bind both contracting parties;
Its validity or compliance

o Cannot be left
o To the will of one of them.
Art. 1309. The determination of the performance

May be left to a third person,
o Whose decision shall not be binding
o Until it has been made known
To both contracting parties.

Art. 1310. The determination shall not be obligatory
If it is evidently inequitable.
o In such case,
o The courts shall decide
What is equitable
Under the circumstances.

Art. 1182
When the fulfillment of the condition
o Depends upon the sole will of the debtor,
o The conditional obligation shall be void.
If it depends upon chance or
Upon the will of a third person,
o The obligation shall take effect
o In conformity with the provisions of this
Code.
4. OBLIGATORY FORCE OF CONTRACTS ARTS.
1159, 1315-16, 749
Art. 1159. Obligations arising from contracts
Have the force of law
Between the contracting parties and
o Should be complied with in good
faith.
Art. 1308.
The contract must bind both contracting parties;
Its validity or compliance

o Cannot be left
o To the will of one of them.

and
From that moment
The parties are bound
Which, according to their nature,
May be in keeping with
Good faith, usage and law.
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Art. 1316. Real contracts,

Such as deposit, pledge and commodatum,
o Are not perfected
o Until the delivery
o Of the object of the obligation.
May be valid,

donee must satisfy.

o Unless it is done
instrument,
5. RELATIVITY OF CONTRACTS ARTS. 1311-14,

1177-78, 1381(3)
PRIVITY OF CONTRACTS
*Art. 1311. Contracts take effect only between
The parties,
Their assigns and heirs,
o Except in case where
o The rights and obligations arising from the
contract
o Are not transmissible
By their nature, or
By stipulation or
By provision of law.
o The heir is not liable
Beyond the value of the property
He received from the decedent.
If a contract should contain

Some stipulation in favor of a third person,
o He may demand its fulfillment
Provided he communicated his

acceptance
To the obligor
Before its revocation.
A mere incidental benefit or interest of a person

is not sufficient.
o The contracting parties
o Must have clearly and deliberately conferred
o A favor upon a third person.
Art. 1312. In contracts creating real rights,

Third persons who come into possession of the
object of the contract
Are bound thereby,
o Subject to the provisions of the
o Mortgage Law and the Land Registration
Laws.
Art. 1313. Creditors are protected
In cases of contracts
o Intended to defraud them.
Art. 1314. Any third person who induces another
To violate his contract
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CIVIL
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o
o
Shall be liable for damages

To the other contracting party.

All rights acquired
o In virtue of an obligation
Are transmissible,
o If there has been no stipulation to the contrary.

Bring all the actions of the latter (debtor)
o For the same purpose,
Save those which are inherent in his

person;
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C. CLASSIFICATION OF CONTRACTS
1. ACCORDING TO DEGREE OF DEPENDENCE
I. PREPARATORY ARTS. 1479, 1767, 1868
II. PRINCIPAL ARTS. 1458, 1638, 1642, 1933,
1962
III. ACCESSORY ARTS. 2047, 2085
I. CONSENSUAL ARTS. 1315, 1475
II. REAL ARTS. 1316, 1934
III. FORMAL ART. 1356
3. ACCORDING TO SOLEMNITY OR FORM ARTS.
1356
I. ANY FORM
II. SPECIAL FORM
I. TRANSFER OF OWNERSHIP ARTS. 725, 1458,
1638
II. CONVEYANCE OF USE ARTS. 562, 1642,
1933
III. RENDITION OF SERVICE ARTS. 1642, 1868
5. ACCORDING TO NATURE OF OBLIGATION
PRODUCED
I. BILATERAL ARTS. 1642, 1458
II. UNILATERAL ARTS. 2047, 2093
6. ACCORDING TO CAUSE ARTS. 1350
I. ONEROUS ARTS. 1458, 1638, 1642
II. GRATUITOUS OR LUCRATIVE ARTS. 725,
1933
III. REMUNERATORY
I. COMMUTATIVE
II. ALEATORY ART. 2010
I. NOMINATE
II. INNOMINATE ART. 1307
I. THING
II. RIGHT
III. SERVICE

I. PREPARATORY ARTS. 1479, 1767, 1868
Art. 1479. A promise to buy and sell a determinate
thing
For a price certain
o Is reciprocally demandable.
An accepted unilateral promise to buy or to sell a

determinate thing
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For a price certain

o Is binding upon the promissor
If the promise is supported by a

consideration
Distinct from the price.
Art. 1767. By the contract of partnership

Two or more persons bind themselves
o To contribute money, property, or industry
o To a common fund,
With the intention of
o Dividing the profits among themselves.
Two or more persons may also form

o A partnership for the exercise of a profession.
*Art. 1868. By the contract of agency

A person binds himself
o To render some service or
o To do something
In representation or on behalf of another,
o With the consent or authority of the latter.
II. PRINCIPAL
ARTS. 1458, 1638, 1642, 1933, 1962
*Art. 1458. By the contract of sale
One of the contracting parties
o Obligates himself
To transfer the ownership and
To deliver a determinate thing, and

The other
o To pay therefor
o A price certain in money or its equivalent.
A contract of sale may be

o Absolute or conditional.
Art. 1638. By the contract of barter or exchange

One of the parties binds himself
o To give one thing
o In consideration of the other's promise
To give another thing.

* Art. 1642. The contract of lease may be of
a. Things, or
b. Work and service.
*Art. 1933. By the contract of loan,
One of the parties delivers to another, either
o Something not consumable
So that the latter may use the same
For a certain time and return it,
In which case the contract is called a

Commodatum; or
o Money or other consumable thing,
Upon the condition that
The same amount
of the same kind and quality shall be

paid,
In which case the contract is simply

called a Loan or Mutuum.
Commodatum is essentially gratuitous.
Simple loan may be

o Gratuitous or
o With a stipulation to pay interest.
In Commodatum
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The bailor retains the ownership of the thing
loaned,
While in simple loan,
o Ownership passes to the borrower.
o
Art. 1475. The contract of sale is perfected

At the moment there is a meeting of minds
o Upon the thing
Which is the object of the contract and

o Upon the price.
Art. 1962. A deposit is constituted

From the moment a person
o Receives a thing belonging to another,
o With the obligation
Of safely keeping it and
Of returning the same.
If the safekeeping of the thing delivered

o Is not the principal purpose of the contract,
There is no deposit
But some other contract.

III. ACCESSORY ARTS. 2047, 2085
*Art. 2047. By Guaranty
A person, called the guarantor,
o Binds himself to the creditor
o To fulfill the obligation of the principal debtor
In case the latter should fail to do so.
If a person binds himself solidarily

With the principal debtor,
o The provisions of Section 4, Chapter 3,
Title I of this Book (Joint and Solidary
Obligations)
o Shall be observed.
In such case the contract is called a Suretyship.
Art. 2085
The following requisites are essential
o To the contracts of pledge and mortgage:
1.That they be constituted
To secure the fulfillment
Of a principal obligation;
2.That the pledgor or mortgagor
Be the absolute owner
Of the thing pledged or mortgaged;
3.That the persons constituting the pledge or
mortgage
Have the free disposal of their
property, and
In the absence thereof,
That they be legally authorized

for the purpose.
Third persons who are not parties to the principal

obligation
o May secure the latter (principal obligation)
o By pledging or mortgaging
o Their own property.
I. CONSENSUAL ARTS. 1315, 1475
and
From that moment
o Not only to the fulfillment of what has
been expressly stipulated
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From that moment,

o The parties may reciprocally demand
performance,
Subject to the provisions of the law
Governing the form of contracts.
II. REAL ARTS. 1316, 1934
Art. 1316. Real contracts,
Such as deposit, pledge and commodatum,
o Are not perfected
o Of the object of the obligation.
Art. 1934. An accepted promise
To deliver something by way of commodatum or
simple loan
o Is binding upon parties,
But the commodatum or simple loan itself

o Shall not be perfected
o Of the object of the contract.
III. FORMAL ART. 1356
*Art. 1356.
Contracts shall be obligatory,
o In whatever form they may have been
entered into,
Provided all the essential requisites for

their validity are present.
However, when the law requires

o That a contract be in some form
o In order
That it may be valid or enforceable, or
That a contract be proved in a certain

way,
o That requirement is absolute and
indispensable.
In such cases,
o The right of the parties stated in the
following article
o Cannot be exercised.
*Art. 1357.
If the law requires a
o Document or
o Other special form,
As in the acts and contracts enumerated

in the following article,
The contracting parties may compel each other
to observe that form,
o Once the contract has been perfected.
This right may be exercised

o Simultaneously with the action upon the
contract.
3. ACCORDING TO SOLEMNITY OR FORM ARTS.

1356
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I. ANY FORM
II. SPECIAL FORM
* Art. 1356.
entered into,
Provided all the essential requisites
For their validity
Are present.

o In order

way,
indispensable.
In such cases,
The right of the parties stated in the following
article
Cannot be exercised.
* Art. 1933. By the contract of loan,


Commodatum; or
o Money or other consumable thing,
The same amount

paid,

Simple loan may be

o Gratuitous or
In Commodatum
o The bailor retains the ownership of the thing
loaned,
I. TRANSFER OF OWNERSHIP ARTS. 725, 1458,
1638
*Art. 725. Donation
Is an act of liberality
Whereby a person disposes gratuitously of

o A thing or
o Right
In favor of another,
o Who accepts it.

o Obligates himself

The other
o To pay therefor

* Art. 1638. By the contract of barter or exchange

One of the parties binds himself
o To give one thing
o In consideration of the other's promise
o To give another thing.
II. CONVEYANCE OF USE ARTS. 562, 1642,
1933
Art. 562. Usufruct
Gives a right
o To enjoy the property of another
With the obligation
o Of preserving its form and substance,
Unless
o The title constituting it or
o The law
Otherwise provides.
o Things, or
o Work and service.
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III. RENDITION OF SERVICE ARTS. 1642, 1868
Art. 1642. The contract of lease may be of
a. Things, or
*Art. 1868. By the contract of agency
A person binds himself
o To render some service or
o To do something
In representation or on behalf of another,
With the consent or authority of the latter.
PRODUCED
I. BILATERAL ARTS. 1642, 1458
a. Things, or
o Obligates himself

The other
o To pay therefor


PRODUCED
II. UNILATERAL ARTS. 2047, 2093
*Art. 2047. By Guaranty
A person, called the guarantor,
o Binds himself to the creditor
o To fulfill the obligation of the principal debtor
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In case the latter should fail to do so.
If a person binds himself solidarily

With the principal debtor,
o The provisions of Section 4, Chapter 3,
Title I of this Book (Joint and Solidary
Obligations)
o Shall be observed.
In such case the contract is called a Suretyship.
Art. 2093.
In addition to the requisites prescribed in Article
2085*,
o It is necessary,
In order to constitute
The contract of pledge,

o That the thing pledged
Be placed in the possession
Of the creditor, or
Of a third person
By common agreement.
*Art. 2085. The following requisites are essential to the
contracts of pledge and mortgage:
(1) That they be constituted to secure the fulfillment of a
principal obligation;
(2) That the pledgor or mortgagor be the absolute owner of
the thing pledged or mortgaged;
(3) That the persons constituting the pledge or mortgage
have the free disposal of their property, and in the absence
thereof, that they be legally authorized for the purpose.
Third persons who are not parties to the principal obligation
may secure the latter by pledging or mortgaging their own
property.

Commodatum; or
Money or other consumable thing,
The same amount

paid,

Simple loan may be

o Gratuitous or
In Commodatum
o The bailor retains the ownership of the thing
loaned,

III. REMUNERATORY
In remuneratory ones,
o The service or benefit
o Which is remunerated; and
Remuneratory those contracts where one

party gives something or renders service to
another in consideration of a previous or past
deeds of the other.

I. ONEROUS ARTS. 1458, 1638, 1642
*Art. 1350.
In onerous contracts
o The cause
o Is understood to be,
o For each contracting party,
The prestation or
Promise of
A thing or service
o By the other;
In contracts of pure beneficence,

o The mere liberality of the benefactor.

II. GRATUITOUS OR LUCRATIVE ARTS. 725,
1933
*Art. 725. Donation
Is an act of liberality
Whereby a person disposes gratuitously of

o A thing or
o Right
In favor of another,
o Who accepts it.
* Art. 1933. By the contract of loan,

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I. COMMUTATIVE
- Those contracts where the contracting parties
contemplate the assured fulfillment of the
terms and conditions of their agreement such
as contracts of mortgage and pledge. Here,
generally, there is no risk to anticipate.
II. ALEATORY ART. 2010
Art. 2010. By an aleatory contract,
One of the parties or both
Reciprocally bind themselves
o To give or
o To do something
In consideration of
o What the other shall give or do
o Upon the happening of an event
Which is uncertain, or
Which is to occur at an indeterminate

time.
I. NOMINATE
- Those which have been given particular
names or denominations by law.
- E.g. Sale, barter, mortgage, lease, agency,
partnership, commodatum, deposit, insurance,
antichresis
II. INNOMINATE ART. 1307
Art. 1307. Innominate contracts
Shall be regulated by the
1) Stipulations of the parties,
2) Provisions of Title I (OBLIGATIONS) and
Title II (CONTRACTS) of this Book,
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3) Rules governing the most analogous
nominate contracts, and
4) Customs of the place.
I. THINGS
- Contracts covering things such as contract of sale, deposit,
pledge.
II. RIGHT
- Contract covering transmissible rights or credits such as a
contract of usufruct, assignment of credits.
III. SERVICE
- Contracts covering services such as carriage whether
common or simple, agency, deposit.
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D. STAGES OF CONTRACTS
- Begins when the parties perform their respective

undertakings under the contract, culminating in the
extinguishment thereof
1.NEGOTIATION
CONTRACT OF OPTION ARTS. 1324, 1479,
1482
2. PERFECTION
3. PERFORMANCE
4. CONSUMMATION
1. NEGOTIATION
CONTRACT OF OPTION ARTS. 1324, 1479,
1482
Art. 1324.
When the offerer
Has allowed the offeree
o A certain period to accept,
The offer may be withdrawn

o At any time before acceptance
By communicating such withdrawal,
Except when the option
Is founded upon a consideration,
As something paid or promised.
Art. 1479.
A promise to buy and sell
A determinate thing
o For a price certain
Is reciprocally demandable.
An accepted unilateral promise to buy or to

sell
A determinate thing
o For a price certain
Is binding upon the promissor
If the promise is supported
By a consideration
Distinct from the price.
Art. 1482. Whenever earnest money is given in a

contract of sale,
It shall be considered
o As part of the price and
o As proof of the perfection of the contract.
2. PERFECTION
and
From that moment

3. PERFORMANCE/PAYMENT/FULFILLMENT
SECTION 1. - Payment or Performance
Art. 1232. Payment means
Not only the delivery of money
But also the performance,

o In any other manner,
Of an obligation.
4. CONSUMMATION
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o
E. ESSENTIAL ELEMENTS OF CONTRACTS ART.

1318
1. CONSENT OF THE CONTRACTING PARTIES
ARTS. 1319-46, 37-42, 739, 1476 (4), 1490-91,
1533 (5), 1646, 1782, 1409 (7), 5
ARTS. 87, 124, 234 FC
RA 6809
ART. XII, SECS. 7 & 8 CONSTITUTION
COGNITION THEORY
2. OBJECT CERTAIN, WHICH IS THE SUBJECT
MATTER OF THE CONTRACT
ARTS. 1347-49, 1311, 1178
3. CAUSE OF THE OBLIGATION ARTS. 1350-55
Does not bind the offerer
Except from the time
It came to the offerers knowledge.
The contract, in such a case,
Is presumed to have been

entered into
In the place where the offer was

made.
Art. 1320. An acceptance may be

Express or
Implied.
Art. 1321. The person making the offer
May fix the
o Time,
o Place, and
o Manner
Of acceptance,
All of which
o Must be complied with.
4. DELIVERY
5. DUE OBSERVANCE OF PRESCRIBED
FORMALITIES
Art. 1322. An offer made through an agent

Is accepted
o From the time acceptance
o Is communicated to the offerer.
CHAPTER 2 - ESSENTIAL REQUISITES OF CONTRACTS

GENERAL PROVISIONS
*Art. 1318. There is no contract
Unless the following requisites concur:
(1) Consent
Of the contracting parties

(2) Object
Certain
Which is the subject matter of the

contract
(3) Cause
Of the obligation
Which is established.
1. CONSENT OF THE CONTRACTING PARTIES
ARTS. 1319-46, 37-42, 739, 1476 (4), 1490-91,
1533 (5), 1646, 1782, 1409 (7), 5
ARTS. 87, 124, 234 FC
RA 6809
ART. XII, SECS. 7 & 8 CONSTITUTION
COGNITION THEORY
SECTION 1. - Consent
Art. 1319. Consent is manifested by
The meeting of the offer and
The acceptance upon
o The thing and
o The cause
Which are to constitute the contract.
The offer must be certain and

The acceptance absolute.
A qualified acceptance
o Constitutes a counter-offer.
Acceptance made by letter or telegram
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Art. 1323. An offer becomes ineffective upon the

Death,
Civil interdiction,
Insanity , or
Insolvency
o Of either party
Before acceptance is conveyed.

Art. 1324.
When the offerer
Has allowed the offeree
o A certain period to accept,
The offer may be withdrawn
At any time before acceptance
By communicating such withdrawal,

o Except when the option
Is founded upon a consideration,
As something paid or promised.

Art. 1325.
Business advertisements
o Of things for sale
Are not definite offers,
o But mere invitations to make an offer.
Unless it appears otherwise

Art. 1326. Advertisements for bidders
Are simply invitations to make proposals, and
The advertiser is not bound

o To accept the highest or lowest bidder,
Unless the contrary appears.
*Art. 1327. The following cannot give consent to a

contract:
(1) Unemancipated minors;
(2) Insane or Demented persons, and
(3) Deaf-mutes
Who do not know how to write.
Art. 1329. The incapacity declared in Article 1327
Is subject to the modifications
o Determined by law, and
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Is understood to be
o Without prejudice to
o Special disqualifications established in
the laws.
*Art. 1328.
Contracts entered into during a lucid interval
o Are valid.
Contracts agreed to in a state of
drunkenness or during a hypnotic spell
o Are voidable.
*Art. 1330.
A contract where consent
Is given through
o Mistake,
o Violence,
o Intimidation,
o Undue influence, or
o Fraud
Is voidable.
Art. 1331. In order that mistake may invalidate
consent,
It should refer
o To the substance of the thing
Which is the object of the contract, or

o To those conditions
Which have principally moved one or

both parties
To enter into the contract.
Mistake as to the identity or qualifications of

one of the parties
o Will vitiate consent
o Only when such identity or qualifications
o Have been the principal cause of the
contract.
A simple mistake of account

o Shall give rise to its correction.
Art. 1332.
When one of the parties is unable to read, or
If the contract is in a language not
understood by him, and
o Mistake or fraud is alleged,
The person enforcing the contract
Must show that the terms thereof
Have been fully explained to the

former.
Art. 1333. There is no mistake
If the party alleging it
Knew the doubt, contingency or risk
o Affecting the object of the contract.
Art. 1334. Mutual error
As to the legal effect of an agreement
When the real purpose of the parties is
frustrated,
o May vitiate consent.
Art. 1335.
There is violence
o When in order to wrest consent,
o Serious or irresistible force is employed.
There is intimidation
o When one of the contracting parties
o Is compelled by
o A reasonable and well-grounded fear
o Of an imminent and grave evil
Upon his person or property, or
Upon the person or property of

his spouse, descendants or
ascendants,
To give his consent.
To determine the degree of intimidation,

o The age, sex and condition of the person
o Shall be borne in mind.
A threat to enforce one's claim

o Through competent authority,
o If the claim is just or legal,
Does not vitiate consent.
Art. 1336. Violence or intimidation

Shall annul the obligation,
Although it may have been employed
o By a third person
o Who did not take part in the contract.
Art. 1337. There is undue influence
When a person takes improper advantage of
his power
o Over the will of another,
Depriving the latter
o Of a reasonable freedom of choice.
The following circumstances

Shall be considered:
o The confidential, family, spiritual and
other relations between the parties, or
o The fact that the person alleged to have
been unduly influenced
Was suffering from mental weakness,

or
Was ignorant or in financial distress.
Art. 1338. There is fraud when,

Through insidious words or machinations
o Of one of the contracting parties,
The other is induced
To enter into a contract
o Which, without them,
o He would not have agreed to.
Art. 1339. Failure to disclose facts,
When there is a duty to reveal them,
o As when the parties are bound
o By confidential relations,
Constitutes fraud.
Art. 1340. The usual exaggerations in trade,
When the other party had an opportunity to
know the facts,
o Are not in themselves fraudulent.
Art. 1341. A mere expression of an opinion
Does not signify fraud,
o Unless made by an expert and
o The other party has relied on the
former's special knowledge.
Art. 1342. Misrepresentation by a third person
Does not vitiate consent,
o Unless such misrepresentation
Has created substantial mistake and
The same is mutual.

Art. 1343. Misrepresentation made in good faith
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Is not fraudulent
o But may constitute error.
Art. 1344. In order that fraud may make a contract

voidable,
It should be serious and
Should not have been employed by both
contracting parties.
Incidental fraud
o Only obliges the person employing it
o To pay damages.
Art. 1345. Simulation of a contract

May be
o Absolute or
o Relative.
Absolute
o Takes place when
o The parties do not intend
o To be bound at all;
Relative
o When the parties
o Conceal their true agreement.
Art. 1346.
An absolutely simulated or fictitious contract
Is void.
A relative simulation,
o When it does not prejudice a third person
and
o Is not intended for any purpose contrary
to law, morals, good customs, public
order or public policy
Binds the parties
To their real agreement.

Art. 1476. In the case of a sale by auction:
Where notice has not been given
That a sale by auction is subject to a right to
bid
o On behalf of the seller,
It shall not be lawful for the seller
o To bid himself or
o To employ or induce any person
To bid at such sale
On his behalf or for the auctioneer,

o To employ or induce any person
To bid at such sale
On behalf of the seller or
Knowingly to take any bid from the

seller or any person employed by
him.
Any sale contravening this rule

o May be treated as fraudulent
o By the buyer.
Art. 1490. The husband and the wife cannot sell

property to each other,
Except:
(1) When a separation of property
Was agreed upon in the marriage

settlements; or
(2) When there has been a judicial separation of
property under Article 191.
purchase,
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another:
7. The guardian,
The property of

his guardianship;
8. Agents,
The property

been given;

administration;
The property
o Of the State or
institution,

intrusted to them;
government experts
part in the sale;

before the court
functions;
rights
litigation
12. Any others specially disqualified by law.
*Art. 1646. The persons disqualified to buy

Referred to in Articles 1490 and 1491,
o Are also disqualified
o To become lessees of the things mentioned
therein.
Art. 1782. Persons who are prohibited from giving
each other any donation or advantage
Cannot enter into universal partnership.
Art. 1409. The following contracts are inexistent
and void from the beginning:
(7) Those expressly prohibited or declared
void by law.
FC Art. 87. Every donation or grant of gratuitous
advantage,
Direct or indirect,
Between the spouses during the marriage
Shall be void,
o Except moderate gifts
o Which the spouses may give each other
o On the occasion of any family rejoicing.
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CIVIL
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-
The prohibition shall also apply

To persons living together as husband and wife
Without a valid marriage.
FC Art. 124. The administration and enjoyment of

the conjugal partnership
Shall belong to both spouses jointly.
-
In case of disagreement,
The husband's decision shall prevail,
o Subject to recourse to the court
o By the wife for proper remedy,
o Which must be availed of within five
years
o From the date of the contract
implementing such decision.
2. OBJECT CERTAIN, WHICH IS THE SUBJECT

MATTER OF THE CONTRACT ARTS. 1347-49,
1311, 1178
SECTION 2. - Object of Contracts
Art. 1347.
All things which are not outside the
commerce of men,
Including future things,
o May be the object of a contract.
FC Art. 234. Emancipation takes place

By the attainment of majority.
o Unless otherwise provided,
o Majority commences at the age of 21
years. (Now 18, RA 6809)
-
Emancipation also takes place:

(1) By the marriage of the minor; or
(2) By the recording in the Civil Register of an
agreement in a public instrument executed
by the parent exercising parental authority
and the minor at least eighteen years of age.
Such emancipation shall be irrevocable.
RA 6809
December 13, 1989
AN ACT LOWERING THE AGE OF MAJORITY FROM
21 TO 18 YEARS, AMENDING FOR THE PURPOSE
EXECUTIVE ORDER NUMBERED TWO HUNDRED NINE,
AND FOR OTHER PURPOSES
"Art. 234. Emancipation takes place by the

attainment of majority. Unless otherwise
provided, majority commences at the age of
18 years."
Section 4.
Upon the effectivity of this Act,
existing wills, bequests, donations, grants, insurance
policies and similar instruments containing
references and provisions favorable to minors will not
retroact to their prejudice.
Approved: December 13, 1989
ARTICLE XII - NATIONAL ECONOMY AND
PATRIMONY
Section 7.
Save in cases of hereditary succession,
o No private lands shall be transferred or
conveyed
Except to individuals, corporations, or

associations
Qualified to acquire or hold lands of the

public domain.
Section 8. Notwithstanding the provisions of Section
7 of this Article,
A natural-born citizen of the Philippines
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All rights which are not intransmissible

o May also be the object of contracts.
No contract may be entered into

Upon future inheritance
o Except in cases expressly authorized
by law.
All services
Which are not contrary to law, morals, good
customs, public order or public policy
o May likewise be the object of a contract.
Art. 1348. Impossible things or services

Cannot be the object of contracts.
Art. 1349. The object of every contract
Must be determinate
As to its kind.
-
Be it enacted by the Senate and House of

Representatives of the Philippines in Congress
assembled::
Section 1.
Article 234 of Executive Order No.
209, the Family Code of the Philippines, is hereby
amended to read as follows:
Who has lost his Philippine citizenship

o May be a transferee of private lands,
o Subject to limitations provided by law.
The fact that the quantity is not determinate

Shall not be an obstacle
To the existence of the contract,
o Provided it is possible to determine the
same,
o Without the need of a new contract
between the parties.
*Art. 1311. Contracts take effect only between

The parties,
Their assigns and heirs,
o Except in case where
o The rights and obligations arising from the
contract
o Are not transmissible
By their nature, or
By stipulation or
By provision of law.
o The heir is not liable
Beyond the value of the property
He received from the decedent.
If a contract should contain

Some stipulation in favor of a third person,
o He may demand its fulfillment
Provided he communicated his

acceptance
To the obligor
Before its revocation.
A mere incidental benefit or interest of a person

is not sufficient.
o The contracting parties
o Must have clearly and deliberately conferred
o A favor upon a third person.
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-
All rights acquired in virtue of an obligation

Are transmissible,
If there has been no stipulation to the
contrary.
3. CAUSE OF THE OBLIGATION ARTS. 1350-55

*Art. 1350.
o The cause
The prestation or
Promise of
A thing or service
o By the other;

Art. 1351. The particular motives of the parties

In entering into a contract
Are different from the cause thereof.
Art. 1352.
Contracts without cause, or
With unlawful cause,
o Produce no effect whatever.
The cause is unlawful

If it is contrary to law, morals, good customs,
public order or public policy.
*Art. 1353. The statement of a false cause in

contracts
Shall render them void,
o If it should not be proved
o That they were founded upon another
cause
o Which is true and lawful.
Art. 1354.
Although the cause is not stated in the
contract,
It is presumed that it exists and is lawful,
o Unless the debtor proves the
contrary.
Art. 1355. Except in cases specified by law,
Lesion or inadequacy of cause
o Shall not invalidate a contract,
Unless there has been fraud, mistake

or undue influence.
4. DELIVERY
5. DUE OBSERVANCE OF PRESCRIBED
FORMALITIES
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F.
5) All other contracts
Where the amount involved exceeds

P500
Must appear in writing,
Even a private one.
FORM OF CONTRACTS ARTS. 1356-58
1. ANY FORM ORAL

2. SPECIAL FORM
i.
ii.
iii.
VALIDITY ARTS 748, 749, 1744, 1773,

1874, 1956, 2134, ACT 1147 SEC. 22
ENFORCEABILITY ARTS. 1403, 1878
GREATER EFFICACY OR CONVENIENCE
ARTS. 1358
FORM OF CONTRACTS
*Art. 1356.
entered into,
Provided all the essential requisites for

their validity are present.

o In order

way,
indispensable.
In such cases,
o The right of the parties stated in the
following article
o Cannot be exercised.
*Art. 1357.
If the law requires a
o Document or
o Other special form,
As in the acts and contracts enumerated

in the following article,
The contracting parties may compel each other
to observe that form,
o Once the contract has been perfected.
This right may be exercised

o Simultaneously with the action upon the
contract.
1. ANY FORM ORAL

2. SPECIAL FORM
i.
Sales of real property or of an interest

therein a governed by Articles 1403, No.
2, and 1405;
2) The cession, repudiation or renunciation
Of hereditary rights or
Of those of the conjugal partnership of

gains;
3) The power to administer property, or any
other power
Which has for its object
An act
i. Appearing or which should appear in a
public document, or
ii. Should prejudice a third person;
4) The cession of actions or rights
Proceeding from an act
Appearing in a public document.
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VALIDITY ARTS 748, 749, 1744, 1773,

1874, 1956, 2134, ACT 1147 SEC. 22
Art. 748. The donation of a movable

May be made orally or in writing.
An oral donation
o Requires the simultaneous delivery
of the thing or
of the document
o Representing the right donated.
If the value of the personal property donated

o Exceeds five thousand pesos,
The donation and the acceptance
o Shall be made in writing,
Otherwise, the donation shall be void.

May be valid,

donee must satisfy.
*Art. 1358. The following must appear in a public

document:
1) Acts and contracts
The creation, transmission, modification

or extinguishment
i. Of real rights over immovable property;
But sales of goods, chattels or things in

action
Are governed by Articles, 1403, No. 2

and 1405.

o Unless it is done
instrument,
Art. 1744. A stipulation between the common

carrier and the shipper or owner
Limiting the liability of the common carrier
For the loss, destruction, or deterioration of the

goods
To a degree less than extraordinary diligence

o Shall be valid,
Provided it be:
1. In writing,
Signed by the shipper or owner;

2. Supported by a valuable consideration
Other than the service rendered by the

common carrier; and
3. Reasonable, just and not contrary to public
policy.
Art. 1773. A contract of partnership is void,
Whenever immovable property is contributed

thereto,
If an inventory of said property is not
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o
o
o
Made,
Signed by the parties, and
Attached to the public instrument.
Art. 1874. When a sale of a piece of land or any

interest therein
Is through an agent,
o The authority of the agent
o Shall be in writing;
Otherwise, the sale shall be void.

Art. 1956. No interest shall be due
Unless it has been expressly stipulated in

writing.
Art. 2134. The amount of the principal and of the
interest
Shall be specified in writing;

o Otherwise , the contract of antichresis
o Shall be void.
e.
f.
ii.
o Some of them, of such

things in action or
- Pay at the time
o Some part of the purchase
money;
But when a sale is made by

auction and
- Entry is made by the
auctioneer in his sales book, at
the time of the sale,
- Of the amount and kind of
property sold, terms of sale,
price, names of the purchasers
and person on whose account
the sale is made,
it is a sufficient memorandum;
An agreement of the leasing
For a longer period than 1 year,

or
For the sale of real property or of

an interest therein;
A representation
As to the credit of a third person.
ENFORCEABILITY ARTS. 1403, 1878

3.
CHAPTER 8 - UNENFORCEABLE CONTRACTS
*Art. 1403. The following contracts are
1.
Those entered into in the name of another

person
- By one who has been given no authority or
legal representation, or
- Who has acted beyond his powers;
2.
Those that do not comply with the Statute of

Frauds as set forth in this number.
- In the following cases
- An agreement hereafter made
- Shall be unenforceable by action,
Unless
(1) The same, or
(2) Some note or
(3) Memorandum, thereof,
Be in writing, and
Subscribed by the party charged, or by

his agent;
- Evidence, therefore, of the agreement
Cannot be received
Without the writing, or a secondary

evidence of its contents:
a. An agreement
That by its terms
Is not to be performed
Within a year from the making

thereof;
b. A special promise
To answer for the debt, default,

or miscarriage
Of another;
c. An agreement made
In consideration of marriage,
Other than a mutual promise to

marry;
d. An agreement for the sale
Of goods, chattels or things in

action,
At a price not less than P500,

- Unless the buyer
- Accepts and receives
o Part of such goods and
chattels, or
o The evidences, or
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Those where both parties

- Are incapable of giving consent
- To a contract.
*Art. 1878. Special powers of attorney

Are necessary in the following cases:
1. To make such payments
As are not usually considered as acts of
administration;
2. To effect novations
Which put an end to obligations
Already in existence at the time the
agency was constituted;
3.
To compromise,
To submit questions to arbitration,
To renounce the right to appeal from a
judgment,
To waive objections to the venue of an
action or
To abandon a prescription already
acquired;
4. To waive any obligation
Gratuitously;
5. To enter into any contract
By which the ownership of an immovable
Is transmitted or acquired
Either gratuitously or for a valuable
consideration;
6. To make gifts,
Except customary ones
For charity or
Those made to employees in the
business managed by the agent;
7. To loan or borrow money,
Unless the latter act
Be urgent and indispensable
For the preservation of the things which
are under administration;
8. To lease any real property
To another person
For more than 1 year;
9. To bind the principal
To render some service
Without compensation;
10. To bind the principal
In a contract of partnership;
11. To obligate the principal
As a guarantor or surety;
12. To create or convey real rights
Over immovable property;
13. To accept or repudiate an inheritance;
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14. To ratify or recognize obligations
Contracted before the agency;
15. Any other act of strict dominion.
iii.
GREATER EFFICACY OR CONVENIENCE ARTS.

1358
* Art. 1358. The following must appear in a public
document:
1) Acts and contracts
The creation, transmission, modification

or extinguishment
Of real rights over immovable property;
Sales of real property or of an interest

therein a governed by Articles 1403, No.
2, and 1405;
2) The cession, repudiation or renunciation
Of hereditary rights or
Of those of the conjugal partnership of

gains;
3) The power to administer property, or any
other power
Which has for its object
An act
i. Appearing or which should appear in a
public document, or
ii. Should prejudice a third person;
4) The cession of actions or rights
Proceeding from an act
Appearing in a public document.

5) All other contracts
Where the amount involved
Exceeds P500
Must appear in writing,
Even a private one.

i. But sales of goods, chattels or
things in action
ii. Are governed by Articles, 1403, No.
2 and 1405.
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65
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G. REFORMATION OF CONTRACTS
ARTS. 1359 69
CHAPTER 4 - REFORMATION OF INSTRUMENTS
Art. 1359.
There having been a meeting of the minds Of the
parties to a contract
When their true intention is not expressed in the
instrument
o Purporting to embody the agreement,
By reason of
o Mistake, fraud, inequitable conduct or
accident,
One of the parties may ask for the

reformation of the instrument
To the end that such true intention may

be expressed.
-
If mistake, fraud, inequitable conduct, or

accident
Has prevented a meeting of the minds of the
parties,
The proper remedy
o Is not reformation of the instrument
o But annulment of the contract.
Art. 1360. The principles of the general law

On the reformation of instruments
o Are hereby adopted
Insofar as they are not in conflict
o With the provisions of this Code.
Art. 1366. There shall be no reformation in the

following cases:
1. Simple donations inter vivos wherein no
condition is imposed;
2. Wills;
3. When the real agreement is void.
Art. 1367. When one of the parties has brought an
action
To enforce the instrument,
He cannot subsequently ask for its
reformation.
Art. 1368. Reformation may be ordered
At the instance of either party or his
successors in interest,
If the mistake was mutual;
-
Otherwise, upon petition of the injured party,

or his heirs and assigns.
Art. 1369. The procedure for the reformation of

instrument
Shall be governed by rules of court
To be promulgated by the Supreme Court.
Art. 1361. When a mutual mistake of the parties

Causes the failure of the instrument
To disclose their real agreement,
o Said instrument may be reformed.
Art. 1362. If one party was mistaken and
The other acted fraudulently or inequitably
In such a way that the instrument
Does not show their true intention,
o The former may ask
o For the reformation of the instrument.
Art. 1363. When one party was mistaken and
The other knew or believed
That the instrument did not state their real
agreement,
But concealed that fact from the former,
o The instrument may be reformed.
Art. 1364. When through the
Ignorance,
Lack of skill,
Negligence or
Bad faith
o On the part of the person drafting the
instrument or
o Of the clerk or typist,
The instrument does not express the true
intention of the parties,
The courts may order that the instrument be
reformed.
Art. 1365. If two parties agree upon the mortgage or
pledge of real or personal property,
But the instrument states
That the property is sold
o Absolutely or with a right of repurchase,
Reformation of the instrument is proper.
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66
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H. INTERPRETATION OF CONTRACTS
ARTS. 1370-79
Art. 1370. If the terms of a contract
Are clear and leave no doubt upon the
intention of the contracting parties,
o The literal meaning of its stipulations
o Shall control.
-
If the words appear to be contrary

To the evident intention of the parties,
o The evident intention
o Shall prevail over the words.
Art. 1371. In order to judge the intention of the

contracting parties,
Their contemporaneous and subsequent acts
Shall be principally considered.
Shall prevail.
If the contract is onerous,

o The doubt shall be settled
In favor of the greatest reciprocity of

interests.
If the doubts are cast upon the principal object of

the contract
o In such a way that it cannot be known
o What may have been the intention or will of
the parties,
The contract shall be null and void.
Art. 1379. The principles of interpretation
Stated in Rule 123 of the Rules of Court

o Shall likewise be observed in the
construction of contracts.
Art. 1372. However general the terms of a contract

may be,
They shall not be understood to comprehend
o Things
That are distinct and

o Cases
That are different from those
Upon which the parties intended to

agree.
Art. 1373. If some stipulation of any contract
Should admit of several meanings,
o It shall be understood as
o Bearing that import
o Which is most adequate
o To render it effectual.
Art. 1374. The various stipulations of a contract
Shall be interpreted together,
o Attributing to the doubtful ones
o That sense which may result
o From all of them taken jointly.
Art. 1375. Words which may have different
significations
Shall be understood
o In that which is most in keeping with
o The nature and object of the contract.
Art. 1376. The usage or custom of the place
Shall be borne in mind
o In the interpretation of the
ambiguities of a contract, and
Shall fill the omission of stipulations
o Which are ordinarily established.
Art. 1377. The interpretation of obscure words or
stipulations in a contract
Shall not favor the party
Who caused the obscurity.
*Art. 1378.
When it is absolutely impossible to settle doubts

o By the rules established in the preceding
articles, and
The doubts refer to

o Incidental circumstances of a gratuitous
contract,
The least transmission of rights and

interests
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67
CIVIL
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I.
o
o
KINDS OF CONTRACTS AS TO VALIDITY
Has no other legal means

To obtain reparation for the same.

I. RESCISSIBLE CONTRACTS ARTS. 1380-89,
1191
II. VOIDABLE CONTRACTS ARTS. 1390-1402,
1327-28, 1330
III. UNENFORCEABLE CONTRACTS ARTS. 140308, 1317, 1878
3. VOID OR INEXISTENT ARTS. 1409-22, 1318,
1353, 1378, 1491, 1898
Art. 1384. Rescission shall be
Only to the extent
Necessary to cover the damages caused.

Art. 1385. Rescission creates the obligation
To return the things

o Which were the object of the contract,
Together with
o Their fruits, and
o The price
o With its interest;
Consequently, it can be carried out only

o When he who demands rescission
o Can return
o Whatever he may be obliged to restore.
Neither shall rescission take place

o When the things
Which are the object of the contract

o Are legally in the possession of third
persons
o Who did not act in bad faith.
In this case, indemnity for damages
May be demanded from the person

causing the loss.

I. RESCISSIBLE CONTRACTS ARTS. 1380-89,
1191
RESCISSIBLE CONTRACTS
Art. 1380. Contracts validly agreed upon
May be rescinded
In the cases established by law.

Art. 1381. The following contracts are
RESCISSIBLE:
1.
Those which are entered into by guardians
Whenever the wards whom they

represent
Suffer lesion
By more than 1/4 of the value of the
things
Which are the object thereof
2.
Those agreed upon in representation of

absentees,
If the absentees suffer the lesion

By more than 1/4 of the value of the
things
Which are the object thereof
3.
Those undertaken in fraud of creditors
When the creditors cannot in any other

manner
Collect the claims due them;
4.
Those which refer to things under litigation
If they have been entered into by the

defendant
Without the knowledge and approval
Of the litigants or of competent judicial

authority;
5.
All other contracts
Specially declared by law
To be subject to rescission.
Art. 1382. Payments made in a state of insolvency
For obligations
To whose fulfillment
The debtor could not be compelled
At the time they were effected,

o Are also rescissible.
Art. 1383. The action for rescission is subsidiary;
It cannot be instituted
Except when the party suffering damage
ralc
Art. 1386. Rescission referred to in Nos. 1 and 2 of

Article 1381
Shall not take place

o With respect to contracts
o Approved by the courts.
Art. 1387.
All contracts by virtue of which the debtor

alienates property by gratuitous title
Are presumed to have been entered into
In fraud of creditors,
When the donor did not reserve sufficient

property
To pay all debts contracted before the

donation.
Alienations by onerous title

o Are also presumed fraudulent
o When made by persons
Against whom some judgment has been

issued.
The decision or attachment

o Need not refer to the property alienated, and
o Need not have been obtained by the party
seeking the rescission.
In addition to these presumptions,

o The design to defraud creditors
o May be proved
o In any other manner recognized by the law of
evidence.
Art. 1388. Whoever acquires in bad faith
The things alienated
In fraud of creditors,
o Shall indemnify the creditors
o For damages suffered by them
o On account of the alienation,
Whenever, due to any cause, it

should be impossible for him to
return them.
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CIVIL
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Art. 1389. The action to claim rescission
Must be commenced within 4 years.
For persons under guardianship and for

absentees,
The period of four years
Shall not begin
o Until the termination of incapacity of the
persons under guardianship, or
o Until the domicile of the absentee is known.
*Art. 1191. The power to rescind obligations

o Should not comply
The injured party

May choose between
o The fulfillment and
o The rescission of the obligation,
With the payment of damages in either

case.

If the latter should become impossible.

(2) Those where the consent is vitiated by

Mistake,
Violence,
Intimidation,
Undue influence or
Fraud.
If there are two or more alienations,

o The first acquirer shall be liable first, and
o So on successively.
These contracts are binding,

o Unless they are annulled
o By a proper action in court.
They are susceptible of ratification.
Art. 1391. The action for annulment

Shall be brought within 4 years.
-
Art. 1392. Ratification extinguishes

The action to annul
A voidable contract.
Art. 1393. Ratification may be effected
Expressly or tacitly.

o In accordance with Articles 1385 and 1388
and
o The Mortgage Law.

This period shall begin:
In cases of intimidation, violence or undue

influence,
From the time the defect of the consent

ceases.
In case of mistake or fraud,
From the time of the discovery of the

same.
Contracts entered into by minors or other

incapacitated persons,
From the time the guardianship ceases.
It is understood that there is a tacit ratification if,

o With knowledge of the reason which renders
the contract voidable and
o Such reason having ceased,
The person who has a right to invoke it
Should execute an act
Which necessarily implies an intention to

waive his right.
Art. 1394. Ratification may be effected

By the guardian of the incapacitated person.
Art. 1395. Ratification does not require
The conformity of the contracting party
Who has no right to bring the action for
annulment.

Art. 1396. Ratification cleanses the contract

From all its defects
From the moment it was constituted.

to return them.
Art. 1397. The action for the annulment of contracts

May be instituted
By all who are thereby obliged
o Principally or subsidiarily.

II. VOIDABLE CONTRACTS ARTS. 1390-1402,

1327-28, 1330
Art. 1390. The following contracts are VOIDABLE
OR ANNULLABLE,
Even though there may have been no damage to

the contracting parties:
(1) Those where one of the parties
Is incapable of giving consent
To a contract;
ralc
However, persons who are capable

Cannot allege the incapacity of those with
whom they contracted;
Nor can those who exerted intimidation,
violence, or undue influence, or employed
fraud, or caused mistake
o Base their action
o Upon these flaws of the contract.
Art. 1398. An obligation having been annulled,

The contracting parties
Shall restore to each other
o The things
69
CIVIL
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Which have been the subject matter
of the contract,
With their fruits, and

The price with its interest,
Except in cases provided by law.
o
-
In obligations to render service,

o The value thereof
o Shall be the basis for damages.
Art. 1399. When the defect of the contract consists

in
The incapacity of one of the parties,
o The incapacitated person
o Is not obliged to make any restitution
Except insofar as he has been

benefited
By the thing or price received by him.

Art. 1400.
Whenever the person
o Obliged by the decree of annulment
o To return the thing
Cannot do so
o Because it has been lost through his
fault,
He shall return
o The fruits received and
o The value of the thing
At the time of the loss,
With interest from the same date.

Art. 1401. The action for annulment of contracts
Shall be extinguished
o When the thing which is the object thereof
o Is lost
Through the fraud or fault of the person
Who has a right to institute the

proceedings.
If the right of action

Is based upon
o The incapacity of any one of the contracting
parties,
The loss of the thing
o Shall not be an obstacle
To the success of the action,

o Unless said loss took place through the fraud
or fault of the plaintiff.
Art. 1402. As long as one of the contracting parties

Does not restore
What he is bound to return
o In virtue of the decree of annulment,
The other cannot be compelled

o To comply with what is incumbent upon
him.
*Art. 1327. The following cannot give consent to a
contract:
(1) Unemancipated minors;
(2) Insane or Demented persons, and
(3) Deaf-mutes who do not know how to write.
*Art. 1328.
Contracts entered into during a lucid interval
o Are valid.
Contracts agreed to in a state of
drunkenness or during a hypnotic spell
o Are voidable.
*Art. 1330.
ralc
A contract where consent

Is given through
o Mistake,
o Violence,
o Intimidation,
o Undue influence, or
o Fraud
Is voidable.
III. UNENFORCEABLE CONTRACTS ARTS. 140308, 1317, 1878

CHAPTER 8 - UNENFORCEABLE CONTRACTS
*Art. 1403. The following contracts are
4.
Those entered into in the name of another

person
- By one who has been given no authority or
legal representation, or
- Who has acted beyond his powers;
5.
Those that do not comply with the Statute of

Frauds as set forth in this number.
- In the following cases
- An agreement hereafter made
- Shall be unenforceable by action,
Unless
(1) The same, or
(2) Some note or
(3) Memorandum, thereof,
Be in writing, and
Subscribed by the party charged, or by

his agent;
- Evidence, therefore, of the agreement
Cannot be received
Without the writing, or a secondary

evidence of its contents:
g. An agreement
That by its terms
Is not to be performed
Within a year from the making

thereof;
h. A special promise
To answer for the debt, default,

or miscarriage
Of another;
i. An agreement made
In consideration of marriage,
Other than a mutual promise to

marry;
j. An agreement for the sale
Of goods, chattels or things in

action,
At a price not less than P500,

- Unless the buyer
- Accepts and receives
o Part of such goods and
chattels, or
o The evidences, or
o Some of them, of such
things in action or
- Pay at the time
o Some part of the purchase
money;
But when a sale is made by

auction and
- Entry is made by the
auctioneer in his sales book, at
the time of the sale,
- Of the amount and kind of
property sold, terms of sale,
price, names of the purchasers
70
CIVIL
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k.
l.
6.
and person on whose account

the sale is made,
it is a sufficient memorandum;
An agreement of the leasing
For a longer period than 1 year,

or
For the sale of real property or of

an interest therein;
A representation
As to the credit of a third person.
*Art. 1317. No one may contract in the name of

another
Without being authorized by the latter, or
Unless he has by law a right to represent him.
Those where both parties

- Are incapable of giving consent
- To a contract.
Art. 1404. Unauthorized contracts

Are governed by Article 1317 and
The principles of agency in Title X of this
Book.
Art. 1317. No one may contract in the name of another
without being authorized by the latter, or unless he has by
law a right to represent him.
A contract entered into in the name of another by one who
has no authority or legal representation, or who has acted
beyond his powers, shall be unenforceable, unless it is
ratified, expressly or impliedly, by the person on whose
behalf it has been executed, before it is revoked by the
other contracting party
Art. 1405.
Contracts infringing the Statute of Frauds,
o Referred to in No. 2 of Article 1403,
Are ratified
By the failure to object
To the presentation of oral evidence

to prove the same, or
By the acceptance of benefit under them.
*Art. 1878. Special powers of attorney
3. VOID OR INEXISTENT
ARTS. 1409-22, 1318, 1353, 1378, 1491, 1898
CHAPTER 9 - VOID AND INEXISTENT CONTRACTS
Art. 1409. The following contracts are
INEXISTENT AND VOID from the beginning:
1.
2.
Art. 1406.
When a contract is enforceable
o Under the Statute of Frauds, and
A public document is necessary
o For its registration in the Registry of
Deeds,
The parties may avail themselves of
o The right under Article 1357.
Art. 1357. If the law requires a document or other special
form, as in the acts and contracts enumerated in the
following article, the contracting parties may compel each
other to observe that form, once the contract has been
perfected. This right may be exercised simultaneously with
the action upon the contract.
Art. 1407.
In a contract where both parties are incapable of
giving consent,
o Express or implied
Ratification by the parent, or guardian, as

the case may be,
Of one of the contracting parties
Shall give the contract the same

effect
As if only one of them were

incapacitated.
If ratification is made by the parents or

guardians, as the case may be,
o Of both contracting parties,
The contract shall be validated from the

inception.
Art. 1408. Unenforceable contracts

Cannot be assailed by third persons.
Those whose cause, object or purpose

Is contrary to law, morals, good customs,
public order or public policy;
Those which are absolutely simulated or
fictitious;
3.
Those whose cause or object

Did not exist at the time of the
transaction;
4.
Those whose object

Is outside the commerce of men;
5.
Those which contemplate

an impossible service;
6.
Those where the intention of the parties

Relative to the principal object of the
contract
Cannot be ascertained;
7.
Those expressly prohibited or declared

Void by law.
These contracts cannot be ratified.
Neither can the right

o To set up the defense of illegality
o Be waived.
Art. 1410. The action or defense

For the declaration of the inexistence of a
contract
Does not prescribe.
Art. 1411. When the nullity proceeds from
The illegality of the cause or object of the
contract, and
The act constitutes a criminal offense,
o Both parties being in pari delicto,
They shall have no action against each

other, and
Both shall be prosecuted.

-
ralc
A contract entered into in the name of another

o By one
Who has no authority or legal

representation, or
Who has acted beyond his powers,

o Shall be unenforceable,
Unless it is ratified,
Expressly or impliedly,
By the person
On whose behalf it has been executed,
Before it is revoked by the other

contracting party.
Moreover, the provisions of the Penal Code
71
CIVIL
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-
Relative to the disposal of effects or instruments

of a crime
o Shall be applicable to the things or the price
of the contract.
This rule shall be applicable
When only one of the parties is guilty;
o But the innocent one may claim
o What he has given, and
o Shall not be bound to comply with his
promise.
Art. 1412.
If the act
o In which the unlawful or forbidden cause
consists
Does not constitute a criminal offense,

o The following rules shall be observed:
1.
2.
When the fault is on the part of both

contracting parties, neither may
Recover what he has given by virtue of
the contract, or
Demand the performance of the other's
undertaking;
When only one of the contracting parties is at

fault,
He cannot
i. Recover what he has given by reason of
the contract, or
ii. Ask for the fulfillment of what has been
promised him.
The other, who is not at fault,
May demand the return of what he has given
Without any obligation to comply his
promise.
Art. 1413. Interest paid
In excess of the interest allowed by the usury

laws
o May be recovered by the debtor,
o With interest thereon
From the date of the payment.

Art. 1414. When money is paid or property
delivered for an illegal purpose,
The contract may be repudiated
By one of the parties

o Before the purpose has been accomplished,
or
o Before any damage has been caused to a
third person.
In such case, the courts may, if the public

interest will thus be subserved,
o Allow the party repudiating the contract
o To recover the money or property.
Recover what he has paid or

delivered.
Art. 1417. When the price of any article or

commodity is determined
By statute, or
By authority of law,
o Any person paying any amount
o In excess of the maximum price allowed
May recover such excess.

Art. 1418.
When the law fixes or authorizes the fixing of

the maximum number of hours of labor and
A contract is entered into

o Whereby a laborer undertakes to work
o Longer than the maximum thus fixed,
He may demand additional

compensation
For service rendered beyond the time

limit.
Art. 1419. When the law sets, or authorizes
The setting of a minimum wage for laborers,

and
A contract is agreed upon

o By which a laborer accepts a lower wage,
He shall be entitled to recover the

deficiency.
Art. 1420. In case of a divisible contract,
If the illegal terms can be separated
From the legal ones,

o The legal terms may be enforced.
Art. 1421. The defense of illegality of contract
Is not available to third persons

o Whose interests are not directly affected.
Art. 1422. A contract which is the direct result
Of a previous illegal contract,

o Is also void and inexistent.
*Art. 1318. There is no contract
Unless the following requisites concur:
(4) Consent
Of the contracting parties

(5) Object
Certain
Which is the subject matter of the

contract
(6) Cause
Of the obligation
Which is established.
Art. 1415. Where one of the parties to an illegal

contract
Is incapable of giving consent,
The courts may, if the interest of justice so

demands, allow
o Recovery of money or
o Property delivered by the incapacitated
person.
*Art. 1353. The statement of a false cause in

contracts
Shall render them void,
o If it should not be proved
o That they were founded upon another
cause
o Which is true and lawful.
Art. 1416. When the agreement is not illegal per se
But is merely prohibited, and
The prohibition by the law

o Is designated for the protection of the
plaintiff,
He may, if public policy is thereby

enhanced,
*Art. 1378.
When it is absolutely impossible to settle doubts

o By the rules established in the preceding
articles, and
The doubts refer to

o Incidental circumstances of a gratuitous
contract,
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72
CIVIL
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The least transmission of rights and

interests
Shall prevail.
If the contract is onerous,

o The doubt shall be settled
In favor of the greatest reciprocity of

interests.
If the doubts are cast upon the principal object of
the contract
o In such a way that it cannot be known
o What may have been the intention or will of
the parties,
The contract shall be null and void.
It shall be void
If the party with whom the agent

contracted
Is aware of the limits of the powers

granted by the principal.
In this case, however,

o The agent is liable
o If he undertook to secure
o The principal's ratification.

purchase,

another:
1. The guardian,
The property of

his guardianship;
2. Agents,
The property

been given;

administration;
The property
o Of the State or
institution,

intrusted to them;
government experts
part in the sale;

before the court
functions;
rights
litigation
6.
Any others specially disqualified by law.
Art. 1898. If the agent contracts in the name of the

principal,
Exceeding the scope of his authority, and
The principal does not ratify the contract,
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SPECIAL CONTRACTS
A. SALES
1. IN GENERAL
2. ELEMENTS
3. OBLIGATIONS OF SELLER/BUYER
4. REMEDIES
5. EXTINGUISHMENT OF SALE
B. BARTER OR EXCHANGE
C. LEASE
1. IN GENERAL
2. ELEMENTS
3. OBLIGATIONS OF LESSOR/LESSEE
4. REMEDIES
5. TERMINATION OF LEASE
D. LOAN
1. IN GENERAL
2. KINDS OF LOAN
i. COMMODATUM
ii. MUTUUM
3. NATURE/CHARACTERISTICS
4. SUBJECT MATTER
5. RIGHTS AND OBLIGATIONS OF
BAILOR AND BAILEE
6. MODES OF EXTINGUISHMENT
E. DEPOSIT WAREHOUSE RECEIPTS LAW /
TRUST RECEIPTS LAW
1. IN GENERAL
2. KINDS OF DEPOSIT
i. JUDICIAL
ii. EXTRA-JUDICIAL
1. VOLUNTARY
2. NECESSARY
3. NATURE/CHARACTERISTICS
4. SUBJECT MATTER
5. RIGHTS AND OBLIGATIONS OF
DEPOSITOR AND DEPOSITARY
F. ALEATORY CONTRACTS INSURANCE,
GAMBLING, LIFE ANNUITY
SPECIAL CONTRACTS: ACCESSORY
CONTRACTS
G. GUARANTY AND SURETYSHIP
1. DEFINITION
2. NATURE/CHARACTERISTICS/EXTENT
3. EFFECTS OF GUARANTY, BETWEEN
i. GUARANTOR AND CREDITOR
ii. GUARANTOR AND DEBTOR
iii. CO-GUARANTORS
H. PLEDGE, MORTGAGE, AND ANTICHRESIS
1. IN GENERAL
2. ESSENTIAL ELEMENTS
3. EFFECTS/RIGHTS AND OBLIGATIONS
4. EXTINGUISHMENT/FORECLOSURES
8. LIMITED PARTNERSHIP
C. TRUSTS
1. IN GENERAL
2. KINDS
i. EXPRESS
ii. IMPLIED
III. EXTRA-CONTRACTUAL
OBLIGATIONS
A.
B.
C.
D.
LAW
QUASI-CONTRACTS
DELICTS
QUASI-DELICTS
IV. DAMAGES
A. IN GENERAL
B. KINDS OF DAMAGES
1. ACTUAL OR COMPENSATORY
2. MORAL
3. NOMINAL
4. TEMPERATE OR MODERATE
5. LIQUIDATED
6. EXEMPLARY
SPECIAL CONTRACTS: PREPARATORY

CONTRACTS (BUSINESS ASSOCIATIONS AND
RELATIONS)
A. AGENCY
1. IN GENERAL
2. KINDS, CREATION, AND EXISTENCE
3. OBLIGATIONS OF THE
AGENT/PRINCIPAL
4. MODES OF EXTINGUISHMENT OF
AGENCY
B. PARTNERSHIP
1. IN GENERAL
2. CLASSES OF PARTNERSHIPS AND
PARTNERS
3. CREATION AND DURATION
4. OBLIGATIONS OF PARTNERS TO ONE
ANOTHER
5. PROPERTY RIGHTS OF A PARTNER
6. RELATIONS AND DEALINGS WITH
THIRD PERSONS
7. DISSOLUTION, WINDING UP, AND
TERMINATION
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74
CIVIL
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SPECIAL CONTRACTS
D. SALES
1.
2.
3.
4.
5.
IN GENERAL
ELEMENTS
OBLIGATIONS OF SELLER/BUYER
REMEDIES
EXTINGUISHMENT OF SALE
Articles / Laws to Remember: 1458, 1467, 1477

transfer of ownership,
1505, 559 who can transfer xxx, 1504, 1544,
1484 Recto Law, R.A. 6552,
1602, 1606, 1620, 1623, Redemption xxx
Articles / Laws to Remember: 1458, 1467, 1477
transfer of ownership,
1505, 559 who can transfer xxx, 1504, 1544, 1484
Recto Law, R.A. 6552,
1602, 1606, 1620, 1623, Redemption xxx
Art. 1458. By the contract of sale
One of the contracting parties obligates himself

o To transfer the ownership and
o To deliver a determinate thing, and
The other
o To pay therefor a price certain in money or its
equivalent.

Art. 1467.
A contract for the delivery at a certain price of an

article
o Which the vendor in the ordinary course of
his business
o Manufactures or procures for the general
market,
o Whether the same is on hand at the time or
not,
Is a contract of sale,
But if the goods are to be manufactured

o Specially for the customer and upon his
special order, and
o Not for the general market,
It is a contract for a piece of work.
Art. 1475. The contract of sale is perfected
At the moment there is a meeting of minds

o Upon the thing which is the object of the
contract and
o Upon the price.
From that moment, the parties may reciprocally

demand performance,
o Subject to the provisions of the law
governing the form of contracts.
*Art. 1350.
o The cause
The prestation or
Promise of
A thing or service
o By the other;
ralc

Art. 2010. By an aleatory contract,

One of the parties or both
Reciprocally bind themselves
o To give or
o To do something
In consideration of
o What the other shall give or do
o Upon the happening of an event
Which is uncertain, or
Which is to occur at an indeterminate

time.
Art. 1477. The ownership of the thing sold
Shall be transferred to the vendee

o Upon the actual or constructive delivery
thereof.
Art. 559.
The possession of movable property acquired in

good faith
o Is equivalent to a title.
Nevertheless, one who

o Has lost any movable or
o Has been unlawfully deprived thereof
May recover it from the person in

possession of the same.
If the possessor of a movable lost or which the

owner has been unlawfully deprived,
o Has acquired it in good faith at a public sale,
The owner cannot obtain its return
Without reimbursing the price paid

therefor.
Art. 1504. Unless otherwise agreed, the goods

remain at the seller's risk
Until the ownership therein is transferred to the

buyer,
But when the ownership therein is transferred to

the buyer
o The goods are at the buyer's risk
o Whether actual delivery has been made or
not,
o Except that:
(1) Where delivery of the goods has been made to

the buyer or to a bailee for the buyer,
In pursuance of the contract and
The ownership in the goods has been retained by

the seller merely to secure performance by the
buyer of his obligations under the contract,
o The goods are at the buyer's risk
o From the time of such delivery;
(2) Where actual delivery has been delayed through
the fault of either the buyer or seller
o The goods are at the risk of the party in fault.
where goods are sold by a person
Who is not the owner thereof, and
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CIVIL
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Who does not sell them under authority or with

the consent of the owner,
o The buyer acquires no better title to the
goods than the seller had,
Unless the owner of the goods is by his

conduct
Precluded from denying the seller's

authority to sell.
Nothing in this Title, however, shall affect:

(1) The provisions of
Any factors' act,
Recording laws, or
Any other provision of law enabling the

apparent owner of goods to dispose of them
as if he were the true owner thereof;
(2) The validity of any contract of sale
Under statutory power of sale or
Under the order of a court of competent

jurisdiction;
(3) Purchases made
In a merchant's store, or
In fairs, or markets,
o In accordance with the Code of
Commerce and special laws.
Art. 1537. The vendor is bound to deliver
The thing sold and
Its accessions and accessories

o In the condition in which they were
o Upon the perfection of the contract.
All the fruits shall pertain to the vendee

o From the day on which the contract was
perfected.
Art. 1544. If the same thing should have been sold

to different vendees,
The ownership shall be transferred to the person

who may have first taken possession thereof in
good faith,
o If it should be movable property.
Should it be immovable property,

o The ownership shall belong to the person
acquiring it
o Who in good faith first recorded it in the
Registry of Property.
Should there be no inscription, the ownership
shall pertain to
o The person who in good faith was first in the
possession; and,
o In the absence thereof, to the person who
presents the oldest title, provided there is
good faith.
Art. 1545.
Where the obligation of either party to a contract

of sale is subject to any condition which is not
performed, such party
o May refuse to proceed with the contract or
o He may waive performance of the condition.
If the other party has promised that the condition

should happen or be performed,
o Such first mentioned party
o May also treat the nonperformance of the
condition as a breach of warranty.
Where the ownership in the thing has not passed,
ralc
The buyer may treat the fulfillment by the

seller of his obligation to deliver the same as
described and as warranted expressly or by
implication in the contract of sale
As a condition of the obligation of the buyer
to perform his promise to accept and pay for
the thing.
Art. 1567. In the cases of Articles 1561, 1562, 1564,

1565 and 1566,
The vendee may elect between

o Withdrawing from the contract and
o Demanding a proportionate reduction of the
price,
With damages in either case.

Art. 1592.
In the sale of immovable property,

o Even though it may have been stipulated
o That upon failure to pay the price at the time
agreed upon
o The rescission of the contract shall of right
take place,
The vendee may pay,

o Even after the expiration of the period,
o As long as no demand for rescission of the
contract has been made upon him
o either judicially or by a notarial act.
o After the demand, the court may not grant
him a new term.
Art. 1570. The preceding articles of this Subsection
(SUBSECTION 2. - Warranty Against Hidden Defects
of or Encumbrances Upon the Thing Sold)
Shall be applicable to judicial sales,

o Except that the judgment debtor shall not be
liable for damages.
Art. 1484. In a contract of sale of personal property
the price of which is payable in installments,
The vendor may exercise any of the following

remedies:
(1) Exact fulfillment of the obligation, should the
vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to
pay cover two or more installments;
(3) Foreclose the chattel mortgage on the thing sold,
If one has been constituted, should the vendee's

failure to pay cover two or more installments.
o In this case, he shall have no further action
against the purchaser
o To recover any unpaid balance of the price.
o Any agreement to the contrary shall be void.
Art. 1582. The vendee is bound to accept delivery
and to pay the price of the thing sold
At the time and place stipulated in the

contract.
o
If the time and place should not have been

stipulated,
The payment must be made
At the time and place of the delivery of the

thing sold.
Art. 1524. The vendor shall not be bound to deliver

the thing sold,
If the vendee has not paid him the price, or
If no period for the payment has been fixed in the

contract.
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Art. 1525. The seller of goods is deemed to be an
unpaid seller within the meaning of this Title:
(1) When the whole of the price has not been paid or
tendered;
(2) When a bill of exchange or other negotiable
instrument has been received as conditional
payment, and
The condition on which it was received
Has been broken by reason of

o The dishonor of the instrument, the
insolvency of the buyer, or otherwise.
In Articles 1525 to 1535 the term "seller"

includes
o An agent of the seller to whom the bill of
lading has been indorsed, or
o A consignor or agent who has himself paid,
or is directly responsible for the price, or
o Any other person who is in the position of a
seller.

notwithstanding
That the ownership in the goods may have

passed to the buyer,
o The unpaid seller of goods, as such, has:
(5) A lien
On the goods or right to retain them

For the price
While he is in possession of them;
(6) A right of stopping the goods in transitu
After he has parted with the

possession of them
In case of the insolvency of the

buyer;
(7) A right of resale
As limited by this Title;

(8) A right to rescind
The sale as likewise limited by this

Title.
Where the ownership in the goods

Has not passed to the buyer,
o The unpaid seller has,
In addition to his other remedies

o A right of withholding delivery
Similar to and coextensive with
His rights of lien and stoppage in

transitu
o Where the ownership has passed to the
buyer.
Art. 1601. Conventional redemption shall take place
When the vendor reserves the right to

repurchase the thing sold,
With the obligation to comply with

o The provisions of Article 1616 and
o Other stipulations which may have been
agreed upon.
Art. 1602. The contract shall be presumed to be an
equitable mortgage, in any of the following cases:
(1) When the price of a sale with right to repurchase
Is unusually inadequate;
(2) When the vendor remains in possession
As lessee or otherwise;
ralc
(3) When upon or after the expiration of the right to

repurchase
Another instrument extending the period of

redemption or granting a new period
Is executed;
(4) When the purchaser retains for himself
A part of the purchase price;

(5) When the vendor binds himself
To pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred
that
The real intention of the parties is
That the transaction shall secure

o The payment of a debt or
o The performance of any other obligation.
In any of the foregoing cases, any money, fruits,

or other benefit to be received by the vendee as
rent or otherwise
o Shall be considered as interest
o Which shall be subject to the usury laws.
Art. 1606. The right referred to in Article 1601, in

the absence of an express agreement,
Shall last four years
From the date of the contract.

o Should there be an agreement,
o The period cannot exceed ten years.
However, the vendor may still exercise the right

to repurchase
o Within thirty days
o From the time final judgment was rendered in
a civil action
On the basis that the contract was a true

sale with right to repurchase.
Art. 1620.
A co-owner of a thing may exercise the right of

redemption
o In case the shares of all the other co-owners
or of any of them,
o Are sold to a third person.
If the price of the alienation is grossly

excessive,
The redemptioner shall pay only a

reasonable one.
Should two or more co-owners desire to exercise

the right of redemption,
o They may only do so
o In proportion to the share they may
respectively have in the thing owned in
common.
Art. 1623.
The right of legal pre-emption or redemption

shall not be exercised
o Except within thirty days from the notice in
writing
By the prospective vendor, or
By the vendor, as the case may be.
The deed of sale shall not be recorded in the

Registry of Property,
o Unless accompanied by an affidavit of the
vendor
o That he has given written notice thereof to all
possible redemptioners.
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CIVIL
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The right of redemption of co-owners

o Excludes that of adjoining owners.
ralc
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Atty Uribe - Civil Law Review 2 - Codal Provisions

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CIVIL

Based on the outline of ATTY. CRISOSTOMO URIBE

Based on the outline of ATTY. CRISOSTOMO URIBE

5. AS TO THE PRESENCE OF AN ACCESSORY

1. DEFINITION Art. 1156

WITH A PENAL CLAUSE (distinguish from

2. KINDS OF OBLIGATIONS AS TO BASIS &

(E.) BREACH OF OBLIGATIONS (ART 1170)

1. FRAUD (ARTS. 1171, 1338, 1344)

(B.) SOURCES OF OBLIGATIONS

LAW Art. 1158

(C.) COMPLIANCE WITH OBLIGATIONS

II. Excuse for non-performance

HUMAN RELATIONS - Art. 19.

NATURE AND EFFECT OF OBLIGATIONS - Art. 1163.

RIGHT OF ACCESSION - Art. 440, Art. 442.

(D.) KINDS OF CIVIL OBLIGATIONS

1. AS TO PERFECTION AND EXTINGUISHMENT

(G.) MODES OF EXTINGUISHMENT OF OBLIGATIONS Art.

Based on the outline of ATTY. CRISOSTOMO URIBE

LOSS OF THE THING DUE OR IMPOSSIBILITY OF

CONDONATION OR REMISSION OF THE DEBT

CONFUSION OR MERGER OF RIGHTS ARTS. 127577, 1215, 1217

COMPENSATION ARTS. 1278-1290, 1243, 1215

NOVATION ARTS. 1291-1304, 1215

OTHER MODES - ACT OF CREDITOR

Based on the outline of ATTY. CRISOSTOMO URIBE

Some natural obligations are set forth in the

Upon a civil obligation

Has lapsed by extinctive prescription,

The obligor who voluntarily performs the contract

Without the knowledge of the debtor or

Against the will of the debtor,

The obligor cannot recover what he has paid.

Between 18 and 21 years of age

Who has entered into a contract

Without the consent of the parent or guardian,

notwithstanding the fact the he

Art. 1427. When a minor

Between eighteen and twenty-one years of age,

Who has entered into a contract

Without the consent of the parent or guardian,

There shall be no right to recover the same

From the obligee

The defendant voluntarily performs the

Voluntarily pays a debt of the decedent

Exceeding the value of the property

The payment is valid and

Cannot be rescinded by the payer.

But one of the intestate heirs, after the

The payment is effective and irrevocable.

By the mere lapse of time

Based on the outline of ATTY. CRISOSTOMO URIBE

Shall prescribe eight years

From the time the possession thereof is lost,

Art. 1132. The ownership of

Art. 559. The possession of movable

Art. 1505. Subject to the provisions

(1) The provisions of any factors' act,

Art. 1133. Movables possessed through a

Art. 1141. Real actions over immovable

Prescribe after thirty years.

Prescribes after ten years.

Are not extinguished by prescription: