Oblicon Reviewer Finals

C8LIGA1ICNS AND CCN1kAC1S kLVILWLk A11. MLL S1A.
MAkIA CkCM8CNDS 2011-2012

1

C8LIGA1ICNS
AND
CCN1kAC1S

A11. MLL S1A. MAkIA
CkCM8CNDS 2011-2012

1I1LL. IV. - kLSCkI1ICN 2
cboptet 1. Ceoetol ltovlsloos 2
cboptet 2. ltesctlptloo of Owoetsblp ooJ Otbet keol klqbts 5
cboptet J. ltesctlptloo of Actloos 10
1I1LL. I. - C8LIGA1ICNS 1S
cboptet 2. Notote ooJ ffect of Obllqotloos 17
cboptet J. ulffeteot kloJs of Obllqotloos 22
SLC1lCn 1. - ure and CondlLlonal CbllgaLlons 22
SLC1lCn 2. - CbllgaLlons wlLh a erlod 28
SLC1lCn 3. - AlLernaLlve CbllgaLlons 31
SLC1lCn 4. - !olnL and Solldary CbllgaLlons 33
SLC1lCn 3. - ulvlslble and lndlvlslble CbllgaLlons 37
SLC1lCn 6. - CbllgaLlons wlLh a enal Clause 38
cboptet 4. xtloqolsbmeot of Obllqotloos 40
CLnL8AL 8CvlSlCnS 40
SLC1lCn 1. - aymenL or erformance 40
1|t|e II - CCN1kAC1S S9
cboptet 2. sseotlol kepolsltes of coottocts 65
Ceneral rovlslons 63
SecLlon 1 - ConsenL 63
SecLlon 2 - Cb[ecL of ConLracLs 74
SecLlon 3 - Cause of ConLracLs 73
cboptet J. lotm of coottocts 77
cboptet 4. kefotmotloo of losttomeots 78
cboptet 5. lotetptetotloo of coottocts 80
cboptet 6. kesclsslble coottocts 8J
cboptet 7. volJoble coottocts 86
cboptet 8. uoeofotceoble coottocts 89
cboptet 9. volJ ooJ loexlsteot coottocts 92
1|t|e III - NA1UkAL C8LIGA1ICNS 97
1|t|e IV - LS1CLL 98
1|t|e V - 1kUS1S 100
cboptet 2. xptess 1tosts 102
cboptet J. lmplleJ 1tosts 102
1|t|e kVII - Lk1kA-CCN1kAC1UAL C8LIGA1ICNS 104
cboptet 1. Ooosl-coottocts 104
SecLlon 1 - negoLlorum CesLlo 103
SecLlon 2 - SoluLlo lndeblLl 107
SecLlon 3 - CLher Cuasl-ConLracLs 108
CCDAL MLMCk AID 111

C8LIGA1ICNS AND CCN1kAC1S kLVILWLk A11. MLL S1A. MAkIA CkCM8CNDS 2011-2012

2
1I1LL. IV. - kLSCkI1ICN

Chapter 1: Genera| rov|s|ons
Art. 1106 - rescr|pt|on Def|ned
8y prescrlpLlon, one acqulres ownershlp and oLher real rlghLs Lhrough Lhe lapse of
Llme ln Lhe manner and under Lhe condlLlons lald down by law.
ln Lhe same way, rlghLs and acLlons are losL by prescrlpLlon. (1930a)
Cb[ecL of rescrlpLlon - Lo suppress fraudulenL and sLale clalms from
sprlnglng aL greaL dlsLances of Llme and surprlslng Lhe parLles or Lhelr
represenLaLlves when Lhe facLs have become obscure, or evldences or
wlLnesses mlghL already be losL. 5looooo v. 5otooqoo
2 klnds of rescrlpLlon
1. Acqu|s|t|ve - acqulslLlon of a rlghL or properLy by Lhe lapse of
Llme, also known as adverse possesslon and usucapclon
2. Lxt|nct|ve - rlghLs and acLlons are losL by Lhe lapse of Llme, also
known as llmlLaLlon of acLlon Motoles v. cll of Mlsomls OcclJeotol
Laches - docLrlne of sLale demands, defendanL becomes Lhe offended
parLy due Lo Lhe complalnanL's lnacLlon for an unreasonable and
unexplalned lengLh of Llme, founded on some change durlng Lhe properLy
or Lhe relaLlons beLween Lhe parLles durlng Lhe lapse of Llme.
o 8equlslLes: (C.u.L.l.)
1. ConducL on Lhe parL of Lhe defendanL of whlch complalnL ls
made Lo seek remedy
2. uelay ln asserLlng Lhe complalnanL's rlghLs, havlng had
knowledge or noLlce of Lhe defendanL's conducL, and havlng
been afforded opporLunlLy Lo flle a sulL
3. Lack of knowledge or noLlce on Lhe parL of Lhe defendanL LhaL
Lhe complalnanL would asserL rlghL on whlch he bases hls sulL
4. ln[ury or pre[udlce Lo Lhe defendanL ln Lhe evenL rellef ls
accorded Lo Lhe complalnanL

o rescrlpLlon and Laches compared:
kLSCkI1ICN LACnLS
Concerned wlLh facL of delay Concerned wlLh effecL of delay
A maLLer of Llme A quesLlon of lnequlLy
SLaLuLory noL provlded by sLaLuLes
8ased on Law 8ased on equlLy
rescrlbes a flxed Llme no flxed Llme
! 2 lotbo, loc. v. lce ooJ colJ 5totoqe - where Lhe complalnanL
only flled a sulL afLer 9 years desplLe havlng knowledge of Lhe
defendanL's vlolaLlve pracLlce, and where Lhe maLerlal records
were already losL maklng lL dlfflculL for Lhe defendanL Lo
conLroverL clalms for damages, Lhe case was dlsmlssed on Lhe
ground of laches. Laches can bar Lhe flllng or Lhe prosecuLlon of
Lhe sulL.
! cotbollc 8lsbop of 8olooqo v. cA - alLhough prescrlpLlon does noL
apply Lo reglsLered properLy, a reglsLered landowner may lose hls
rlghL Lo recover Lhe possesslon of hls reglsLered properLy by
reason of laches.
Art. 1107 - Acqu|s|t|on by Capab|e ersons and M|nors
ersons who are capable of acqulrlng properLy or rlghLs by oLher legal modes may
acqulre Lhe same by means of prescrlpLlon.
Mlnors and oLher lncapaclLaLed persons may acqulre properLy or rlghLs by
prescrlpLlon, elLher personally or Lhrough Lhelr parenLs, guardlans or legal
represenLaLlves. (1931a)
Who may acqulre properLy or rlghLs Lhrough prescrlpLlon:
1. ersons of ma[or|ty age - quallfled Lo do all clvll acLs of llfe
2. M|nors and other |ncapac|tated persons
o Annullable or voldable - when acqulslLlon ls made wlLhouL
Lhe asslsLance of parenLs or guardlans
o 8aLlfled - when such mlnor aLLalns ma[orlLy age of 18 years
(emanclpaLlon)
o CompleLely valld - when acqulslLlon ls made Lhrough parenLs
or guardlans


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Art. 1108 - ersons Lxempt from rescr|pt|on
rescrlpLlon, boLh acqulslLlve and exLlncLlve, runs agalnsL:
(1) Mlnors and oLher lncapaclLaLed persons who have parenLs, guardlans or
oLher legal represenLaLlves,
(2) AbsenLees who have oLher admlnlsLraLors, elLher appolnLed by Lhem
before Lhelr dlsappearance, or appolnLed by Lhe courLs,
(3) ersons llvlng abroad, who have managers or admlnlsLraLors,
(4) !urldlcal persons, excepL Lhe SLaLe and lLs subdlvlslons
ersons who are dlsquallfled from admlnlsLerlng Lhelr properLy have a rlghL Lo clalm
damages from Lhelr legal represenLaLlves whose negllgence has been Lhe cause of
prescrlpLlon. (1932a)
Ceneral rule - rescrlpLlon does noL run agalnsL: (M.A.A.!.)
1. M|nors and other |ncapac|tated persons - unless Lhey have parenLs,
guardlans or oLher legal represenLaLlves.
vJo. ue Albetto v. cA - an llleglLlmaLe chlld who sLlll has a llvlng
parenL, hls moLher who acLually flled Lhe sulL, cannoL clalm exempLlon
from prescrlpLlon.
2. Absentees - unless Lhey have admlnlsLraLors.
AdmlnlsLraLor may be appolnLed by Lhe absenLees before Lhelr
dlsappearance or by Lhe courLs (ArL. 381 of Lhe Clvll Code).
AbsenLees musL be absenL for aL leasL 2 years and musL prove LhaL
Lhey cannoL go back Lo Lhelr domlclle.
lf Lhey can go back buL lnLenLlonally do noL wanL Lo reLurn,
prescrlpLlon wlll lle agalnsL Lhem.
3. ersons ||v|ng abroad - unless Lhey have managers or admlnlsLraLors.
lL musL be shown LhaL Lhey cannoL reLurn Lo Lhelr domlclle wlLhln Lhe
perlod whlch prescrlpLlon should have run.
4. 1he State and |ts subd|v|s|ons - unless noL acLlng ln Lhelr soverelgn
capaclLy or [urldlcal persons.
!urldlcal persons are endowed by law of Lhe aLLrlbuLes of a naLural
person Lo acqulre and lose properLles and rlghLs.
kepobllc v. lN8 - lf Lhe pollLlcal subdlvlslon (Al) ls acLlng ln lLs
proprleLary characLer, or lf Lhe governmenL lnsLrumenLallLy ls noL
acLlng ln a soverelgn capaclLy, prescrlpLlon wlll lle agalnsL lL.
Notloool uevelopmeot co. v. 1oblo - upheld Lhe appllcablllLy of
prescrlpLlon agalnsL peLlLloner, acLlng ln lLs proprleLary characLer, who
llke all oLher corporaLlons caplLallzed by Lhe governmenL, ls a buslness
corporaLlon whose causes of acLlon are sub[ecL Lo Lhe sLaLuLe of
llmlLaLlon.
Art. 1109 - 8etween nusband and W|fe, Ch||dren and Guard|an
rescrlpLlon does noL run beLween husband and wlfe, even Lhough Lhere be a
separaLlon of properLy agreed upon ln Lhe marrlage seLLlemenLs or by [urldlcal
decree.
nelLher does prescrlpLlon run beLween parenLs and chlldren, durlng Lhe mlnorlLy or
lnsanlLy of Lhe laLLer, and beLween guardlan and ward durlng Lhe conLlnuance of
Lhe guardlanshlp. (n)
Ceneral rule - rescrlpLlon does noL run:
8etween husband and w|fe
o loclo v. 8lllloo - where Lhe flrsL wlfe clalms LhaL possesslon of Lhe
properLy for 29 years ls equlvalenL Lo a LlLle, lL was held LhaL
prescrlpLlon by adverse possesslon cannoL exlsL beLween husband and
wlfe.
8etween parent and ch||d - durlng Lhe chlld's mlnorlLy or lnsanlLy, based
on naLural bond of flllaLlon
8etween guard|an and ward - durlng Lhe conLlnuance of Lhe guardlanshlp,
based on flduclary relaLlonshlp

LxcepLlon - When Lhe law so provldes LhaL prescrlpLlon shall apply.
Lx. 1. Legal separaLlon musL be flled wlLhln 3 years from Lhe occurrence of Lhe
cause (ArL. 37, lamlly Code)
2. AnnulmenL on Lhe ground of lmpoLency musL be flled wlLhln 3 years
from Lhe marrlage ceremony (ArL. 47, lamlly Code)
3. Pusband may lmpugn Lhe leglLlmacy of Lhe chlld wlLhln 1 year, 2 years or
3 years from hls knowledge of Lhe blrLh of Lhe chlld, dependlng on hls
resldence and Lhe place of blrLh of Lhe chlld (ArL. 170, lamlly Code)
Art. 1110 - Marr|ed Woman
rescrlpLlon, acqulslLlve and exLlncLlve, runs ln favor of or agalnsL a marrled woman.
resupposes a slLuaLlon lnvolvlng a marrled woman and anoLher person
noL her husband. rescrlpLlon shall run for or agalnsL a marrled woman.


4
Art. 1111 - Co-ropr|etor or Co-owner
rescrlpLlon obLalned by a co-proprleLor or a co-owner shall beneflL Lhe oLhers.
(1933)
o Co-ownersh|p - exlsLs when Lhe ownershlp of an undlvlded Lhlng or rlghL
belongs Lo dlfferenL persons.
o 1here could be valld acqulslLlon by all owners even Lhough only one or a few
are ln acLual possesslon.
Art. 1112 - kenunc|at|on
ersons wlLh capaclLy Lo allenaLe properLy may renounce prescrlpLlon already
obLalned, buL noL Lhe rlghL Lo prescrlbe ln Lhe fuLure.
rescrlpLlon ls deemed Lo have been LaclLly renounced when Lhe renunclaLlon
resulLs from acLs whlch lmply Lhe abandonmenL of Lhe rlghL acqulred. (1933)
When a debL ls already barred by prescrlpLlon, lL cannoL be enforced by
Lhe credlLor.
o SLaLuLory llmlLaLlon merely bars Lhe remedy buL does noL
dlscharge Lhe debL.
kenunc|at|on - a walver of one's rlghL Lo Lhe prescrlpLlve perlod. lL ls
unllaLeral, hence does noL requlre Lhe approval of Lhe person beneflLed by
lL.
1. Lxpress renunc|at|on - made by a person capaclLaLed Lo allenaLe
properLy.
2. Imp||ed renunc|at|on - deduced from acLs whlch lmply Lhe
abandonmenL of rlghL acqulred.
uevelopmeot 8ook of tbe lblllpploes v. AJll - where Lhe debLor lssued a
new promlssory noLe recognlzlng hls lndebLedness, promlses Lo pay and
agrees Lo Lhe foreclosure of a morLgage should he fall Lo do so, such
debLor effecLlvely and expressly renounced hls rlghL Lo prescrlpLlon
coverlng Lhe flrsL promlssory noLe.
Art. 1113 - Sub[ects of rescr|pt|on
All Lhlngs whlch are wlLhln Lhe commerce of men are suscepLlble of prescrlpLlon,
unless oLherwlse provlded. roperLy of Lhe SLaLe or any of lLs subdlvlslons noL
paLrlmonlal ln characLer shall noL be Lhe ob[ecL or prescrlpLlon. (1936a)
lncludes all Lhlngs wlLhln Lhe commerce (wlLh commerclal value) of man
Lxcludes properLy of Lhe SLaLe and lLs subdlvlslons noL paLrlmonlal ln
characLer, Lhlngs wlLhln commerce of men buL prohlblLed by law:
Lx. 1. Movables possessed Lhrough a crlme can never be acqulred by
prescrlpLlon by Lhe offender (ArL. 1133)
2. Lands covered by 1orrens 1lLle
3. roperLles of spouses, parenLs and chlldren, wards and
guardlans under Lhe resLrlcLlons lmposed by law (ArL. 1109)
ult. of lotest AJmlolsttotloo v. letoooJez - foresL lands of publlc domaln
cannoL be acqulred by prescrlpLlon and lLs possesslon however long cannoL
rlpen lnLo prlvaLe ownershlp.
lovloo v. Moteoo - a navlgable sLream or any of lLs bed ls noL acqulred by
prescrlpLlon.
kepobllc v. cA - [1] area ad[acenL Lo bay whlch was covered wlLh waLer
due Lo raln ls noL land of publlc domaln. PlghesL ordlnary depLh" ls
deflned as Lhe regular, common, naLural depLh, whlch occurs mosL of Lhe
Llme durlng Lhe year. [2] Pavlng esLabllshed hls reglsLerable LlLle (1orrens
LlLle does noL granL acqulslLlon), appllcanL may avall of a [udlclal
conflrmaLlon of lmperfecL LlLle whlch may be avalled by: Lhose who, by
Lhemselves or Lhrough Lhelr predecessors-ln-lnLeresL, have been ln Lhe
open, conLlnuous, excluslve, and noLorlous possesslon and occupaLlon of
agrlculLural lands of Lhe publlc domaln, under bona flde clalm of
ownershlp, for aL leasL 30 years lmmedlaLely precedlng Lhe flllng of Lhe
appllcaLlon for conflrmaLlon of LlLle.
Art. 1114 - k|ght to Lnforce rescr|pt|on
CredlLors and all oLher persons lnLeresLed ln maklng Lhe prescrlpLlon effecLlve may
avall Lhemselves Lhereof noLwlLhsLandlng Lhe express or LaclL renunclaLlon by Lhe
debLor or proprleLor. (1937)
ersons |nterested - may be Lhe credlLor, guaranLor, sureLles or oLher
Lhlrd persons
May ask Lhe enforcemenL of prescrlpLlon even Lhough lL has been walved
by Lhe debLor


3
Art. 111S - Spec|a| Laws
1he provlslons of Lhe presenL 1lLle are undersLood Lo be wlLhouL pre[udlce Lo whaL
ln Lhls Code or ln speclal laws ls esLabllshed wlLh respecL Lo speclflc cases of
prescrlpLlon. (1938)
ln case of confllcL beLween Lhe perlod provlded ln Lhls 1lLle and ln anoLher
porLlon of Lhe Clvll Code or speclal laws: Lhe more speclflc provlslon wlll
prevall.
lf dlfferenL sLaLuLes are provldlng for dlfferenL prescrlpLlve perlods, and Lhe
cause of acLlon conLemplaLed by Lhem are apparenLly confllcLlng, Lhey do
noL exclude each oLher from belng avalled of by Lhe aggrleved parLy.
Lx. collooto v. cotootloo lblllpploes loc. - alLhough Labor Code
provldes LhaL money clalms prescrlbe ln 3 years, Lhe aggrleved
parLy ln lllegal dlsmlssal case may avall of Lhe 4-year prescrlpLlve
perlod for ln[ury Lo rlghLs" under ArLlcle 1146 of Lhe Clvll Code.
Art. 1116 - 1rans|t|on
rescrlpLlon already runnlng before Lhe effecLlvlLy of Lhls Code shall be governed by
laws prevlously ln force, buL lf slnce Lhe Llme Lhls Code Look effecL Lhe enLlre perlod
hereln requlred for prescrlpLlon should elapse, Lhe presenL Code shall be appllcable,
even Lhough by Lhe former laws, a longer perlod mlghL be requlred. (1939)
1. rescrlpLlve perlod under Lhe old law has lapsed before Lhe effecLlvlLy of
Lhe 1930 Clvll Code - old law shall apply
2. rescrlpLlve perlod under Lhe old law ls sLlll runnlng upon Lhe effecLlvlLy of
Lhe new Code:
a. new code provldes for a dlfferenL perlod for Lhe same slLuaLlon -
new code shall apply lf Lhe prescrlpLlve perlod lL provldes has
already lapsed even Lhough under Lhe old law, Lhe perlod has noL
yeL lapsed.
b. 1he remalnlng balance of Lhe prescrlpLlon perlod ln Lhe old law
slnce Lhe effecLlvlLy of Lhe new code ls shorLer Lhan LhaL provlded
ln Lhe laLLer - old law wlll apply
1he law whlch provldes Lhe shorter prescrlpLlon perlod shall apply.

Chapter 2: rescr|pt|on of Cwnersh|p and Cther kea|
k|ghts
Art. 1117 - Acqu|s|t|ve rescr|pt|on
AcqulslLlve prescrlpLlon of domlnlon and oLher real rlghLs may be ordlnary and
exLraordlnary.
Crdlnary acqulslLlve prescrlpLlon requlres possesslon of Lhlngs ln good falLh and
wlLh [usL LlLle for Lhe Llme flxed by law. (1940a)
klnds of AcqulslLlve rescrlpLlon:
1. Crd|nary - requlres unlnLerrupLed possesslon durlng Lhe requlred
sLaLuLory perlod, good falLh (ArL. 1128) and [usL LlLle (ArL. 1129)
Lx. CoJloez v. cA - properLy was acqulred afLer adverse,
conLlnuous and noLorlous possesslon for more Lhan 30 years wlLh
correcLed decree of reglsLraLlon and good falLh on Lhe parL of Lhe
buyers.
2. Lxtraord|nary - requlres unlnLerrupLed possesslon for Lhe requlred
sLaLuLory perlod wlLhouL need of good falLh and [usL LlLle
Art. 1118 - ossess|on
ossesslon has Lo be ln Lhe concepL of an owner, publlc, peaceful and
unlnLerrupLed. (1941)
CharacLerlsLlcs of ossesslon: (C...u.)
1. In the concept of an Cwner
possessor asserLs domlnlon over Lhe properLy Lo Lhe excluslon of all
oLhers.
musL be adverse/coocepto Je Joeoo (as Lo clalm LlLle)
komltez v. cA - anLlchreLlc credlLor (debLor hands over hls properLy,
allowlng Lhe use Lhereof, for Lhe lnLeresL on Lhe money lenL) cannoL
acqulre Lhe land by prescrlpLlon because such properLy was noL glven Lo
hlm as Lhe new owner.
kepobllc v. cA - prescrlpLlon does noL apply where possesslon of properLy
was for recreaLlonal purposes only.
komos v. cA - paylng Laxes does noL evldence LlLle buL lL ls a sLrong
evldence of possesslon.


6
2. ub||c
musL be a noLorlous holdlng of Lhe properLy known Lo Lhe communlLy.
musL noL be of a surrepLlLlous characLer.
3. eacefu|
Lhere musL be no valld lnLerference from oLhers clalmlng or asserLlng Lhelr
rlghLs Lo Lhe properLy.
4. Un|nterrupted
possesslon durlng Lhe requlred perlod musL be conLlnuous.
Art. 1119 - ossess|on through L|cense or 1o|erance
AcLs of possessory characLer execuLed ln vlrLue of llcense or by mere Lolerance of
Lhe owner shall noL be avallable for Lhe purposes of possesslon. (1942)
ossesslon by llcense or Lolerance produces no effecL wlLh respecL Lo
possesslon or prescrlpLlon because such possesslon acknowledges LhaL
somebody else owns Lhe properLy.
cotoooJo v. cA - belng allowed Lo enLer and reap produce on sald
properLy ls noL sufflclenL possesslon ln Lhe concepL of an owner.
Art. 1120 - Interrupt|on
ossesslon ls lnLerrupLed for Lhe purposes of prescrlpLlon, naLurally or clvllly. (1943)
unlnLerrupLed possesslon sLrengLhens Lhe adverse rlghL of Lhe possessor.
2 klnds of lnLerrupLlon:
1. Natura| - Lhrough any cause lL should cease for more Lhan 1 year.
2. C|v|| - produced by [udlclal summons Lo Lhe possessor.
Art. 1121 - Natura| Interrupt|on
ossesslon ls naLurally lnLerrupLed when Lhrough any cause lL should cease for
more Lhan one year.
1he old possesslon ls noL revlved lf a new possesslon should be exerclsed by Lhe
same adverse clalmanL. (1944a)
Art. 1122 - Cne ear or Less
lf Lhe naLural lnLerrupLlon ls for only one year or less, Lhe Llme elapsed shall be
counLed ln favor of Lhe prescrlpLlon. (n)

Consequences of naLural lnLerrupLlon:
Cld possesslon ls noL revlved and lapse of Llme shall begln Lo run from Lhe
beglnnlng should possesslon be clalmed by Lhe same adverse clalmanL.
lf Lhe naLural lnLerrupLlon ls for only one year or less, Lhe Llme elapsed
shall be counLed ln favor of Lhe prescrlpLlon.
Art. 1123 - C|v|| Interrupt|on
Clvll lnLerrupLlon ls produced by Lhe [udlclal summons Lo Lhe possessor. (1943a)
Art. 1124 - Iud|c|a| Summons
!udlclal summons shall be deemed noL Lo have been lssued and shall noL glve rlse Lo
lnLerrupLlon:
(1) lf lL should be vold for lack of legal solemnlLles,
(2) lL Lhe plalnLlff should deslsL from Lhe complalnL or should allow Lhe
proceedlngs Lo lapse,
(3) lf Lhe possessor should be absolved from Lhe complalnL.
ln all Lhese cases, Lhe perlod of Lhe lnLerrupLlon shall be counLed for prescrlpLlon.
(1946a)
no clvll lnLerrupLlon ln Lhe followlng cases: (S.A.u.)
1. Lack of |ega| so|emn|t|es
May conslsL error or lrregularlLy ln Lhe form or process requlred Lo
acqulre such summon.
Lx. !udlclal summons have been served by a person noL
auLhorlzed by Lhe courL.
2. Des|stance from p|a|nt|ff
ueslsLance- volunLarlly havlng Lhe case dlsmlssed.
Allowlng Lhe proceedlng Lo lapse-manlfesLs Lhe lack of lnLeresL
Lo prosecuLe Lhe case.
3. ossessor |s abso|ved
AbsoluLlon-Lhe complalnL has noL been fully subsLanLlaLed Lo
supporL any adverse clalm by Lhe complalnanL.
1he possessor ls always presumed Lo be ln good falLh.
Art. 112S - ossessor's kecogn|t|on of Cwner's k|ght
Any express or LaclL recognlLlon whlch Lhe possessor may make of Lhe owner's rlghL
also lnLerrupLs possesslon. (1948)

7
cotpos v. loJlllo - one cannoL recognlze Lhe rlghL of anoLher and aL Lhe
same Llme clalm adverse possesslon whlch can rlpen Lo ownershlp, Lhru
acqulslLlve prescrlpLlon.
ulooso v. cA - where Lhe seller and buyer execuLed a conLracL of sale glvlng
Lhe seller Lhe rlghL Lo repurchase properLy afLer 10 years, Lhe sale ls
sub[ecL Lo Lhe owner's rlghL of redempLlon. 1he purchaser's possesslon has
been held ln subordlnaLlon Lo Lhe LlLle of Lhe owner prlor Lo Lhe explraLlon
of Lhe redempLlon perlod.
Art. 1126 - 1|t|es
AgalnsL a LlLle recorded ln Lhe 8eglsLry of roperLy, ordlnary prescrlpLlon of
ownershlp or real rlghLs shall noL Lake place Lo Lhe pre[udlce of a Lhlrd person,
excepL ln vlrLue of anoLher LlLle also recorded, and Lhe Llme shall begln Lo run from
Lhe recordlng of Lhe laLLer.
As Lo lands reglsLered under Lhe Land 8eglsLraLlon AcL, Lhe provlslons of LhaL speclal
law shall govern. (1949a)
Ceneral rule - 1orrens LlLle recorded ln Lhe 8eglsLry of roperLy ls never
sub[ecL of prescrlpLlon Lo Lhe pre[udlce of a Lhlrd person.
o Powever, lL can be challenged by a clalm of laches
o Cr when anoLher LlLle ls also recorded. rescrlpLlon wlll begln Lo
run from Lhe recordlng of such LlLle
ulmoyoqo v. cA - no LlLle Lo reglsLered land ln derogaLlon of Lhe reglsLered
owner shall be acqulred by prescrlpLlon or adverse possesslon.
keyes v. cA - where peLlLloners forged a documenL and clalmed
acqulslLlon, Lhelr LlLle cannoL defeaL Lhe real rlghLs of prlvaLe respondenLs
who sLepped lnLo Lhe shoes of Lhelr faLher as successors-ln-lnLeresL.
cotbollc 8lsbop of 8olooqo v. cA - alLhough prescrlpLlon wlll noL apply Lo
reglsLered properLy, Lhe docLrlne of laches ls appllcable. A reglsLered
landowner may lose hls rlghL Lo recover possesslon of hls reglsLered
properLy by reason of laches.

Art. 1127 - Good Ia|th
1he good falLh of Lhe possessor conslsLs ln Lhe reasonable bellef LhaL Lhe person
from whom he recelved Lhe Lhlng was Lhe owner Lhereof, and could LransmlL hls
ownershlp (1930a)
Art. 1128 - Cther Cond|t|ons of Good Ia|th
1he condlLlons of good falLh requlred for possesslon ln ArLlcles 326, 327, 328 and
329 of Lhls Code are llkewlse necessary for Lhe deLermlnaLlon of good falLh ln Lhe
prescrlpLlon of ownershlp and oLher real rlghLs. (1931)
CondlLlons of Cood lalLh:
o Art. S26 - noL aware LhaL Lhere exlsLs any flaw whlch lnvalldaLes hls
LlLle or mode of acqulslLlon
o Art. S27 - good falLh ls always presumed
o Art. S28 - possesslon acqulred ln good falLh does noL lose Lhls
characLer
o Art. S29 - lL ls presumed LhaL possesslon conLlnues Lo be en[oyed ln
Lhe same characLer ln whlch lL was acqulred
Neqtete v. cll of MotloJopoe - good falLh ls noL complled wlLh when a
person clalms a properLy Lhrough ordlnary acqulslLlve prescrlpLlon based
on a deed of sale whlch he knew lnvolved a dlfferenL properLy.
keyes v. cA - knowlngly uslng a forged documenL Lo base one's [usL LlLle
for Lhe purposes of acqulslLlve prescrlpLlon ls an acL of bad falLh.
Moqtlto v. cA - good falLh cannoL be lnvoked lf Lhe clalmanL has acLual or
consLrucLlve noLlce of Lhe legal and valld rlghLs of possesslon of anoLher
durlng Lhe prescrlpLlve perlod.
Art. 1129 - Iust 1|t|e
lor Lhe purposes of prescrlpLlon, Lhere ls [usL LlLle when Lhe adverse clalmanL came
lnLo possesslon of Lhe properLy Lhrough one of Lhe modes recognlzed by law for Lhe
acqulslLlon of ownershlp or oLher real rlghLs, buL Lhe granLor was noL Lhe owner or
could noL LransmlL any rlghL. (n)
Art. 1130 - 1rue and Va||d 1|t|e
1he LlLle for prescrlpLlon musL be Lrue and valld. (1933)
Art. 1131 - Iust 1|t|e must be roved
lor Lhe purposes of prescrlpLlon, [usL LlLle musL be proved, lL ls never presumed.
(1934a)

8
Iust t|t|e - consLlLuLes such LlLle when Lhe possesslon of a properLy ls
obLalned Lhrough one of Lhe modes recognlzed by law for acqulslLlon (ArL.
712) buL Lhe granLor was noL Lhe owner, or has no power Lo LransmlL
rlghLs. 1he [usL LlLle ls lnLended Lo Lransfer ownershlp and could have
acLually LransmlLLed such had Lhe granLor been Lhe Lrue owner. ossesslon
from a [usL LlLle can rlpen lnLo ownershlp lf Lhe oLher elemenLs of
prescrlpLlon are presenL.
uolleoJo v. 8lotoeso - where a person boughL a properLy from a publlc
aucLlon and Look possesslon for more Lhan 10 years buL Lhere was a flrsL
purchaser, such documenL from Lhe publlc sale consLlLuLed a [usL LlLle,
hence Lhe person acqulred Lhe properLy Lhrough prescrlpLlon.
5olls v. cA - a donaclon propLer nupLlas ls sufflclenL Lo consLlLuLe [usL LlLle.
Lven a vold donaLlon may rlpen lnLo LlLle by prescrlpLlon. A beLLer LlLle may
be barred by LhaL adverse possesslon.
o "1|tu|o Co|orado" - such LlLle where, alLhough Lhere was a mode
of Lransferrlng ownershlp, sLlll someLhlng ls wrong because Lhe
granLor ls noL Lhe owner. 1hls ls enough Lo consLlLuLe [usL LlLle.
Art. 1132 - Acqu|s|t|on of Movab|es or ersona| roperty
1he ownershlp of movables prescrlbes Lhrough unlnLerrupLed possesslon for four
years ln good falLh.
1he ownershlp of personal properLy also prescrlbes Lhrough unlnLerrupLed
possesslon for elghL years, wlLhouL need of any oLher condlLlon.
WlLh regard Lo Lhe rlghL of Lhe owner Lo recover personal properLy losL or of whlch
he has been lllegally deprlved, as well as wlLh respecL Lo movables acqulred ln a
publlc sale, falr, or markeL, or from a merchanL's sLore Lhe provlslons of ArLlcles 339
and 1303 of Lhls Code shall be observed. (1933a)
SUMMAk: ACUISI1ICN 1nkCUGn kLSCkI1ICN
kequ|s|tes Movab|es
Movab|es (w|tho
other cond|t|ons)
Immovab|es
(Crd|nary)
Immovab|es
(Lxtraord|nary)
?ears 4 8 10 30
unlnLerrupLed
ossesslon
" " " "
Cood lalLh " "
!usL 1lLle "
ArL. 1132 ArL. 1132 ArL. 1134 ArL. 1137

ulto v. 1ooeqo - afLer 8 years, Lhe acLlve parLner, who Look over of Lhe
shares of Lhe dellnquenL parLner ln a prlnLlng buslness, acqulred Lhe shares
of sLock of Lhe laLLer (personal properLy) Lhrough acqulslLlve prescrlpLlon.

8ecovery of roperLy:
Art. SS9-Lhe possesslon of movable properLy acqulred ln good falLh ls
equlvalenL Lo a LlLle. lf Lhe possessor losL or of whlch Lhe owner has been
unlawfully deprlved, has acqulred lL ln good falLh aL a publlc sale, Lhe
owner cannoL obLaln lLs reLurn wlLhouL relmburslng Lhe prlce pald.
Art. 1S0S - when goods are sold by a person who ls noL Lhe owner, Lhe
buyer geLs no beLLer LlLle Lo Lhe goods Lhan Lhe seller had, unless Lhe
owner of Lhe goods ls precluded from denylng Lhe seller's auLhorlLy Lo sell.
Powever, noLhlng ln Lhe LlLle shall affecL:
1. laws whlch enable Lhe apparenL owner Lo dlspose of goods as hls
own
2. Lhe valldlLy of any conLracL of sale under Lhe order of Lhe courL
3. purchases made from Lhe merchanL ln accordance wlLh Lhe Code
of Commerce and speclal laws
Art. 1133 - Movab|es from Cr|me
Movables possessed Lhrough a crlme can never be acqulred Lhrough prescrlpLlon by
Lhe offender. (1936a)
1he beneflLs of prescrlpLlon are denled Lo Lhe offender.
Lx. A Lhlef cannoL acqulre LlLle for a sLolen car even lf Lhe owner dld noL
make a demand and Lhe prescrlpLlve perlod has already lapsed.
1oo v. cA - however, lf Lhe Lhlng was ln Lhe meanwhlle passed Lo a
subsequenL holder, prescrlpLlon beglns Lo run 4 or 8 years (dependlng on
Lhe exlsLence of good falLh).
Art. 1134 - Acqu|s|t|on of Immovab|es
Cwnershlp and oLher rlghLs over lmmovable properLy are acqulred by ordlnary
prescrlpLlon Lhrough possesslon of Len years. (1937a)
Crd|nary acqu|s|t|ve prescr|pt|on of |mmovab|es - musL be by vlrLue of a
[usL LlLle, good falLh and possesslon (ln Lhe concepL of an owner,
unlnLerrupLed, adverse and publlc).


9
Art. 113S - M|stake |n Area
ln case Lhe adverse clalmanL possesses by mlsLake an area greaLer, or less, Lhan LhaL
expressed ln hls LlLle, prescrlpLlon shall be based on Lhe possesslon. (n)
1he exLenL of properLy sub[ecL Lo Lhe prescrlpLlon shall be Lhe one acLually
possessed or held by Lhe clalmanL regardless of Lhe slze lndlcaLed or
descrlbed ln Lhe LlLle.
Art. 1136 - Wart|me
ossesslon ln warLlme, when Lhe clvll courLs are noL open, shall noL be counLed ln
favor of Lhe adverse clalmanL. (n)
1he possesslon of Lhe adverse clalmanL durlng LhaL Llme shall noL be
counLed where lL musL be observed LhaL Lhe clvll courLs musL be closed.
lf lL ls funcLlonlng, even durlng warLlme, Lhe possesslon may be counLed ln
hls favor.
Art. 1137 - Lxtraord|nary rescr|pt|on of Immovab|es
Cwnershlp and oLher real rlghLs over lmmovables also prescrlbe Lhrough
unlnLerrupLed adverse possesslon Lhereof for LhlrLy years, wlLhouL need of LlLle or
of good falLh.
lotcotllo v. lotcotllo - where a person's adverse possesslon of a properLy
for 38 years rlpened lnLo a LlLle by exLraordlnary prescrlpLlon alLhough all
Lhe requlslLes of a valld wlll were noL execuLed.
nelts of celso Amotoote v. cA - acqulslLlve prescrlpLlon has seL ln when
allenable publlc land was under Lhe adverse possesslon of a person prlor Lo
Lhe war alLhough Lhe LlLles have noL been perfecLed. 1he possessor may
apply for Lhe conflrmaLlon of hls clalms Lo Lhe proper courLs.
Art. 1138 - Computat|on of rescr|pt|on
ln Lhe compuLaLlon of Llme necessary for prescrlpLlon Lhe followlng rules shall be
observed:
(1) 1he presenL possessor may compleLe Lhe perlod necessary for prescrlpLlon
by Lacklng hls possesslon Lo LhaL of hls guaranLor or predecessor ln
lnLeresL,
(2) lL ls presumed LhaL Lhe presenL possessor who was also Lhe possessor aL a
prevlous Llme, has conLlnued Lo be ln possesslon durlng Lhe lnLervenlng
Llme, unless Lhere ls proof Lo Lhe conLrary,
(3) 1he flrsL day shall be excluded and Lhe lasL day lncluded. (1960a)

1. 1he presenL possessor may compleLe Lhe perlod necessary for prescrlpLlon
by Lacklng hls possesslon Lo LhaL of hls granLor or predecessor ln lnLeresL
"Grantor" and "predecessor |n |nterest" - connoLe a Lransfer ln a
manner provlded by law of properLy from one person Lo anoLher.
1ack|ng - possesslon ls allowed only when Lhere ls a prlvlLy of conLracL
or relaLlonshlp beLween Lhe prevlous and presenL possessors. 5ootb
clty nomes, loc. v. kepobllc
o 1acklng ls noL allowed lf Lhe predecessor ln lnLeresL has noL
saLlsfled Lhe requlremenLs of prescrlpLlon. CLherwlse, Lhere
can be no conLlnulLy ln Lhe naLure of Lhe possesslon.
2. lL ls presumed LhaL Lhe presenL possessor who was also Lhe possessor aL a
prevlous Llme, has conLlnued Lo be ln possesslon durlng Lhe lnLervenlng
Llme, unless Lhere ls proof Lo Lhe conLrary.
1he presumpLlon proceeds from a seL of facLs.
lor Lhe presumpLlon Lo exlsL, Lhere musL be a prlor showlng of Lhe facL
LhaL Lhe person presenLly possesslng Lhe properLy was also Lhe one ln
possesslon of Lhe same before Lhe lnLervenlng Llme.
3. 1he flrsL day shall be excluded and Lhe lasL day lncluded.

***CLher noLes:
wbot ls tbe tole to follow wbeo tbe cbotoctet of tbe possessloo of tbe pteJecessot ls
Jlffeteot ftom tbot of tbe pteseot possessot?
1he law does noL provlde any soluLlon Lo such klnd of conLlngency. 1hus,
sound [udgmenL musL be resorLed Lo.

A. lf Lhe predecessor was ln good falLh buL Lhe successor ls ln bad falLh:
1here are dlfferenL vlews. Some wrlLers say Lhere musL be no Lacklng.
CLhers say, Lhe good falLh of Lhe predecessor should noL be seL aL naughL.
1he second ls Lhe beLLer vlew. 1he compuLaLlon of Lhe perlods Lo be Lacked
should be proporLlonaLe, LhaL ls, ln Lhe proporLlon of whaL Lhe perlod of
possesslon ln good falLh bears Lo Lhe perlod of exLraordlnary prescrlpLlon.
So lL ls ln Lhe proporLlon of 2:1 as regards movables and 3:1 for
lmmovables.


10
8. lf Lhe possesslon of Lhe predecessor was ln bad falLh and Lhe possesslon of Lhe
successor ls ln good falLh, should Lhere be Lacklng of possesslon:
ossesslon of Lhe predecessor ln bad falLh cannoL be counLed and added Lo
LhaL of Lhe presenL possessor. Pere, Lhe possesslon of Lhe predecessor
cannoL be consldered ln ordlnary prescrlpLlon because such requlres good
falLh all LhroughouL Lhe perlod flxed by law.

Powever, for purposes of exLraordlnary prescrlpLlon, Lhe possesslon ln bad falLh of
Lhe predecessor can be Lacked Lo Lhe possesslon ln bad falLh of Lhe successor where
Lhere are no prohlblLlons provlded.

Chapter 3: rescr|pt|on of Act|ons
Art. 1139 - Lapse of 1|me
AcLlons prescrlbe by Lhe mere lapse of Llme flxed by law. (1961)
rescrlpLlon of acLlons = llmlLaLlon of acLlons
o AcLlons Lo enforce or preserve a rlghL or clalm musL be broughL
wlLhln a cerLaln perlod of Llme.
When Lhe governmenL ls Lhe real parLy ln lnLeresL and ls proceedlng malnly
Lo asserL lLs own rlghLs and recover lLs own properLy, Lhere can be no
defense on Lhe ground of laches or llmlLaLlon.
o rescrlpLlon of acLlon does noL run agalnsL Lhe governmenL.

LlemenLs of a cause of acLlon: (8.C.A)
1. A rlghL ln favor of Lhe plalnLlff by whaLever means and under whaLever law
lL arlses or ls creaLed musL be presenL
2. An obllgaLlon on Lhe parL of Lhe defendanL Lo respecL such rlghL
3. An acL or omlsslon on Lhe parL of such defendanL vlolaLlve of Lhe rlghL of
Lhe plalnLlff
lL ls Lhe legal posslblllLy of brlnglng Lhe acLlon LhaL deLermlnes Lhe
sLarLlng polnL for Lhe compuLaLlon of Lhe perlod of prescrlpLlon, LhaL
ls, only upon Lhe happenlng of Lhe Lhlrd requlslLe when lL can be sald
LhaL a cause of acLlon has arlsen. spoool v. lblllpploe vetetoos
AJmlolsttotloo(Att. 1144)

SUMMAk: kLSCkI1ICN CI AC1ICNS
ArL. 1140 Movables 8 years
ArL. 1141 lmmovables 30 years
ArL. 1142 MorLgages 10 years
ArL. 1143 8lghL of way, publlc or prlvaLe nulsance none
ArL. 1144
WrlLLen conLracLs, obllgaLlons creaLed by
law, [udgmenL
10 years
ArL. 1143 Cral conLracL, quasl-conLracL 6 years
ArL. 1146 ln[ury Lo Lhe rlghLs, quasl-dellcL 4 years
ArL. 1147 lorclble enLry and deLalner, defamaLlon 1 year
ArL. 1149 All oLher acLlons wlLh no flxed perlods 3 years
o ArL. 1140-1142, 1144-1147 are wlLhouL pre[udlce Lo Lhose speclfled ln
oLher parLs of Lhls Code, ln Lhe Code of Commerce, and ln speclal laws.
(ArL. 1148)

WnLN kLSCkI1ICN SnALL 8LGIN 1C kUN
ArL. 1130
All klnds of acLlons when no
provlslon provldes oLherwlse
lrom Lhe day Lhey may be
broughL
ArL. 1131 LnforcemenL of obllgaLlon Lo pay lrom Lhe Llme of lasL paymenL
ArL. 1132 LnforcemenL of [udgmenL
lrom Lhe Llme [udgmenL became
flnal
ArL. 1133
uemand accounLlng
lrom Lhe Llme Lhe person
responslble ceases Lo perform
8rlng acLlon from Lhe resulL of
accounLlng
lrom Lhe day resulL was
recognlzed by agreemenL of
lnLeresLed parLles

Art. 1140 - rescr|pt|on of Movab|es
AcLlons Lo recover movables shall prescrlbe elghL years from Lhe Llme Lhe
possesslon Lhereof ls losL, unless Lhe possessor has acqulred Lhe ownershlp by
prescrlpLlon for a less perlod, accordlng Lo ArLlcle 1132, and wlLhouL pre[udlce Lo
Lhe provlslons of ArLlcles 339, 1303, and 1133. (1962a)
1hls refers Lo Lhe perlod of exLraordlnary prescrlpLlon of 8 years for
movables Lo brlng an acLlon Lo recover.
o Powever, acLlon shall noL prosper lf lL ls broughL when Lhe
possessor has already acqulred LlLle by ordlnary acqulslLlve
prescrlpLlon wlLhln 4 years.

11
o "W|thout pre[ud|ce" - lf a possessor has acqulred ownershlp no
acLlon Lo recover may be flled even Lhough Lhere may sLlll be
several years remalnlng ln Lhe prescrlbed 8 years.
lf possessor acqulred Lhe movable ln good falLh aL a publlc sale, owner
cannoL obLaln lLs reLurn wlLhouL relmburslng Lhe prlce pald Lherefore. (ArL.
339)
ln cerLaln cases, owner ls precluded from recovery wlLhouL rlghL Lo
relmbursemenL alLhough Lhe acLlon has noL yeL prescrlbed. (ArL. 1303)
Movables possessed Lhrough a crlme cannoL be acqulred Lhrough
prescrlpLlon by offender (ArL. 1133)
1oo v. cA - where peLlLloner clalms LhaL, Lhrough bad falLh and fraud, he
was led Lo asslgn hls shares of sLocks, lL was held LhaL Lhe acLlon had
already prescrlbed, hence Lhe corporaLe enLlLles have acqulred such
personal properLy afLer possesslon of more Lhan 8 years (wlLhouL need of
good falLh).
ulto v. 1ooeqo - ln a prlnLlng parLnershlp, lL was held LhaL Lhe acLlve
parLner has acqulred Lhe shares of Lhe dellnquenL parLner Lhrough
exLraordlnary prescrlpLlon of 8 years, regardless of bad falLh.
Art. 1141 - rescr|pt|on of Immovab|es
8eal acLlons over lmmovables prescrlbe afLer LhlrLy years.
1hls provlslon ls wlLhouL pre[udlce Lo whaL ls esLabllshed for acqulslLlon of
ownershlp and oLher real rlghLs by prescrlpLlon. (1963)
1hls refers Lo exLraordlnary acqulslLlve prescrlpLlon of lmmovables of 30
years ln adverse possesslon. 1he rlghL Lo sue prescrlbes afLer acqulslLlon of
Lhe LlLle.
o Powever, lf wlLhln Lhe 30-year perlod, all Lhe requlslLes of
ordlnary acqulslLlve prescrlpLlon are presenL, Lhe possessor
acqulres ownershlp afLer 10 years of unlnLerrupLed possesslon,
[usL LlLle and good falLh.
ln case of fraud:
o lf acLlon ls based on fraud, acLlon prescrlbes ln 4 years from Lhe
dlscovery of fraud and such dlscovery ls deemed Lo have Laken
place upon Lhe lssuance of Lhe cerLlflcaLe of LlLle over Lhe
properLy.
o lf based on lmplled or consLrucLlve LrusL, ln 10 years from Lhe
alleged fraudulenL reglsLraLlon or daLe of lssuance of cerLlflcaLe of
LlLle over Lhe properLy.
Art. 1142 - rescr|pt|on of Mortgages
A morLgage acLlon prescrlbes afLer Len years. (1964a)
Mortgage - an accessory conLracL consLlLuLed Lo secure a debL so LhaL lf
Lhe debLor falls Lo pay Lhe prlnclpal obllgaLlon, Lhe credlLor can foreclose
on Lhe morLgage by selllng lL ln a publlc sale and use Lhe proceeds Lo pay
off Lhe debL.
uevelopmeot 8ook of tbe lblllpploes v. 1omelJoo - a sulL for Lhe recovery
of Lhe deflclency afLer foreclosure of a morLgage ls ln Lhe naLure of
morLgage acLlon whlch prescrlbes ln 10 years.
Art. 1143 - k|ghts Not Lxt|ngu|shed by rescr|pt|on
1he followlng rlghLs, among oLhers speclfled elsewhere ln Lhls Code, are noL
exLlngulshed by prescrlpLlon:
(1) 1o demand a rlghL of way, regulaLed ln ArLlcle 649,
(2) 1o brlng an acLlon Lo abaLe a publlc or prlvaLe nulsance. (n)

1o demand a r|ght of way (Art. 649) - Lhe owner by vlrLue of a real rlghL
may use any lmmovable surrounded by oLher lmmovables owned by oLher
persons and wlLhouL access Lo a publlc hlghway, ls enLlLled Lo demand a
rlghL of way across Lhe nelghborlng esLaLes, afLer paymenL of Lhe proper
lndemnlLy.
o Powever, Lhls easemenL ls noL compulsory lf Lhe lsolaLlon of Lhe
lmmovable ls due Lo Lhe proprleLor's own acLs.
1o abate a pub||c or pr|vate nu|sance - lnvolves a person, Lhlng, or
clrcumsLance causlng lnconvenlence or annoyance, unlawful lnLerference
wlLh Lhe use and en[oymenL of a person's land.
Cther r|ghts not barred by prescr|pt|on:
1. 1o demand parLlLlon of a co-ownershlp as long as Lhe co-ownershlp ls
expressly or lmplledly recognlzed
2. 1o enforce an express LrusL
3. 1o demand easemenL of llghL and vlew
4. 1o declare Lhe lnexlsLence of a conLracL or Lhe nulllLy of a vold [udgmenL or
of a vold LlLle
3. 1o compel a LrusLee Lo reconvey properLy reglsLered ln hls name for Lhe
beneflL of Lhe cestol poe ttost
6. 1o compel reconveyance of land reglsLered ln bad falLh provlded lL has noL
yeL passed Lo an lnnocenL purchaser for value

12
7. 1o quleL LlLle broughL by a person ln possesslon of Lhe properLy
8. 1o recover real properLy or lLs value where Lhe properLy was Laken by Lhe
governmenL for publlc use wlLhouL flrsL acqulrlng LlLle LhereLo
9. 1o seek lssuance of a wrlL of possesslon
10. 1o probaLe a wlll
11. 1o recover by Lhe SLaLe non-reglsLrable land

Art. 1144 - 10 ears
1he followlng acLlons musL be broughL wlLhln Len years from Lhe Llme Lhe rlghL of
acLlon accrues:
(1) upon a wrlLLen conLracL,
(2) upon an obllgaLlon creaLed by law,
(3) upon a [udgmenL. (n)

1. Wr|tten contracts
agreemenL musL be ln wrlLlng.
a promlssory noLe, a check or a LlckeL lssued for LransporLaLlon ls a
wrlLLen conLracL.
2. Cb||gat|ons created by |aw
obllgaLlon of Lhe possessor Lo reconvey Lo Lhe Lrue owner real
properLy arlslng from a consLrucLlve or lmplled LrusL.
obllgaLlon of Lhe lessor Lo lndemnlfy Lhe lessee ln good falLh for useful
lmprovemenLs on Lhe properLy leased.
obllgaLlon of Lhe husband and wlfe, parenLs and chlldren, and broLhers
and slsLers Lo supporL each oLher.
3. Iudgment[udgmenL LhaL ls flnal and execuLory
under Lhe 8ules of CourL, [udgmenL may be execuLed on moLlon wlLhln
3 years from Lhe daLe of lLs enLry or from Lhe daLe lL becomes flnal and
execuLory. AfLer Lhe lapse of such Llme, lL may be enforced by ordlnary
acLlon wlLhln 10 years.
spoool v. lblllpploe vetetoos AJmlolsttotloo - rlghL of acLlon accrues
when Lhere exlsLs a cause of acLlon whlch ln Lhls case ls Lhe
declaraLlon of Lhe CourL LhaL Lhe company's admlnlsLraLlve pollcy ls
lnvalld.
noooq v. cA - an lmplled LrusL ls normally noL sub[ecL Lo prescrlpLlon,
unless Lhe LrusLee openly and adversely repudlaLes Lhe LrusL by:
a. performlng unequlvocal acLs amounLlng Lo an ousLer of Lhe cesLul
que LrusL (lrench for Lhe beneflclary of a LrusL).
b. Such poslLlve acLs of repudlaLlon have been made known Lo Lhe
cesLul que LrusL.
c. 1he evldence Lhereon ls clear and concluslve.
o Such repudlaLlon shall be Lhe reckonlng polnL of Lhe cause of
acLlon.
Art. 114S - 6 ears
1he followlng acLlons musL be commenced wlLhln slx years:
(1) upon an oral conLracL,
(2) upon a quasl-conLracL. (n)
1. Cra| contract
AcLlon upon an oral conLracL of Lenancy Lo compel Lhe relnsLaLemenL
of a LenanL comes under Lhe provlslon.
2. uas|-contract
CerLaln lawful, volunLary and unllaLeral acLs glve rlse Lo Lhe [urldlcal
relaLlon of quasl-conLracLs Lo Lhe end LhaL no one shall be un[usLly
enrlched or beneflLed aL Lhe expense of anoLher.
So|ut|o |ndeb|t| - quasl conLracL provlded ln Lhe Clvll Code whlch
occurs lf someLhlng ls recelved when Lhere ls no rlghL Lo demand lL,
and lL has been dellvered by mlsLake, Lhe obllgaLlon Lo reLurn arlses.
Moolclpollty of Opoo v. coltex - rlghL Lo recover Laxes lllegally
collecLed upon a quasl-conLracL.
Art. 1146 - 4 ears
1he followlng acLlons musL be lnsLlLuLed wlLhln four years:
(1) upon an ln[ury Lo Lhe rlghLs of Lhe plalnLlff,
(2) upon a quasl-dellcL. (n)

1. In[ury to the r|ghts of the p|a|nt|ff
urpose of an acLlon or sulL and Lhe law Lo govern lL, lncludlng Lhe
perlod of prescrlpLlon, are Lo be deLermlned by Lhe complalnL lLself, lLs
allegaLlons and prayer for rellef.
AcLlon for recovery of damages for Laklng or reLalnlng personal
properLy, or lncldenL Lo Lrespass upon real esLaLe prescrlbes wlLhln 4
years.
vltqlllo collooto v. cotootloo lbll. loc. - peLlLlon for lllegal dlsmlssal,
relnsLaLemenL and backwages was lllegally dlsmlssed because
alLhough Lhe Labor Code provldes 3 years for such clalms, Lhe case
lnvolved Lhe professlon of Lhe plalnLlff whlch ls a properLy rlghL, hence

13
was predlcaLed upon ln[ury Lo Lhe rlghLs of Lhe plalnLlff" whlch
prescrlbes ln 4 years. (ln relaLlon Lo ArL. 1148)
2. uas|-de||ct
When Lhere ls no pre-exlsLlng relaLlons beLween parLles, whoever by
acL or omlsslon causes damage Lo anoLher wlLh faulL or negllgence, ls
obllged Lo pay damages. (ArL.2176)
ulcoso v. 5otoblo - prescrlpLlve perlod ls counLed from Lhe day Lhe
quasl-dellcL occurred or was commlLLed.
LlablllLy of manufacLurers for any deaLh or ln[urles caused by noxlous
or harmful subsLances used, alLhough no conLracLual relaLlons exlsL.
coco-colo 8ottlets lblllpploes loc. v. cA - where sofL drlnks sold
conLalned flber-llke maLLer and oLher forelgn subsLances whlch caused
slckness Lo sLudenLs.
ktomet It. v. cA - colllslon of Lwo vessels ls a quasl-dellcL.
AllleJ 8ookloq cotp. v. cA - acLlon agalnsL Lhe CenLral 8ank for LorLlous
lnference, ln closlng and llquldaLlng a bank.
Art. 1147 - 1 ear
1he followlng musL be flled wlLhln one year:
(1) lor forclble enLry and deLalner,
(2) lor defamaLlon. (n)
1. Iorc|b|e entry and deta|ner
A summary proceedlng Lo recover possesslon of land LhaL ls lnsLlLuLed
by one who has been wrongfully ousLed from, or deprlved of,
possesslon.
vJo. ue 8ottomeo v. loqoy - Lhe 1-year prescrlpLlve perlod ls
sufflclenL Llme for complalnanL Lo flle a case and Lhls perlod ls counLed
from demand Lo vacaLe Lhe premlses.
2. Defamat|on
Any lnLenLlonal false communlcaLlon, elLher wrlLLen or spoken, LhaL
harms a person's repuLaLlon.
Art. 1148 - Code of Commerce and Spec|a| Laws
1he llmlLaLlons of acLlon menLloned ln ArLlcles 1140 Lo 1142, and 1144 Lo 1147 are
wlLhouL pre[udlce Lo Lhose speclfled ln oLher parLs of Lhls Code, ln Lhe Code of
Commerce, and ln speclal laws. (n)
1he provlslons of 1lLle v on rescrlpLlon have suppleLory appllcaLlon Lo
speclflc cases of prescrlpLlon found elsewhere ln Lhe Clvll Code and ln
speclal laws.
vltqlllo collooto v. cotootloo lbll. loc. - where a peLlLlon upon ln[ury Lo Lhe
rlghLs of Lhe plalnLlff was found wlLh merlL, lL was held LhaL a sLaLuLe of
llmlLaLlon (perLalnlng Lo prescrlpLlon for clalms under Lhe Labor Code)
exLlngulshes Lhe remedy only. AlLhough Lhe remedy Lo enforce a rlghL may
be barred, LhaL rlghL may be enforced by some oLher avallable remedy
(perLalnlng Lo ArL. 1146 regardlng ln[ury upon Lhe rlghLs of Lhe plalnLlff).
Art. 1149 - No I|xed er|od = S ears
All oLher acLlons whose perlods are noL flxed ln Lhls Code or ln oLher laws musL be
broughL wlLhln flve years from Lhe Llme Lhe rlghL of acLlon accrues. (n)
1he rlghL of acLlon or cause of acLlon accrues from Lhe momenL of
commlsslon or omlsslon of an acL by a parLy ln vlolaLlon of hls duLy Lo, or of
Lhe rlghL, of anoLher.
LssenLlal elemenLs are: (8.C.A.)
1. 8lghL ln favor of a person (obllgee)
2. A correlaLlve obllgaLlon on Lhe parL of anoLher (obllgor)
3. An acL or omlsslon ln vlolaLlon of sald rlghL
spoool v. lblllpploe vetetoos AJmlolsttotloo
1oleotloo v. cA - acLlon Lo prevenL Lhe former spouse from uslng Lhe
peLlLloner's husband's surname prescrlbes ln 3 years counLed from Lhe day
such acLlon mlghL be broughL.
CLher Lx.s:
o AcLlon Lo lmpugn Lhe recognlLlon of a naLural chlld (ArL. 296)
o AcLlon Lo lmpugn Lhe leglLlmaLlon of a chlld (ArL. 273)
o AcLlon Lo reduce lnofflclous donaLlons Lo be counLed from Lhe
deaLh of Lhe donor (vlde ArL. 772, Clvll Code).

Art. 11S0 - When to Count rescr|pt|ve er|ods
1he Llme for prescrlpLlon for all klnds of acLlons, when Lhere ls no speclal provlslon
whlch ordalns oLherwlse, shall be counLed from Lhe day Lhey may be broughL.
(1969)

14
uas|-de||ct - prescrlpLlve perlod for acLlons based on quasl-dellcL shall
begln Lo run from Lhe day Lhe acLlon may be broughL, LhaL ls, from Lhe day
Lhe quasl-dellcL was commlLLed.
Cr|m|na| act|on - unless oLherwlse provlded, Lhe sLaLuLory llmlLaLlon for
perlod for flllng a crlmlnal acLlon beglns Lo run on Lhe commlsslon of Lhe
offense.
Separate c|v|| act|on - where offended parLy expressly reserves hls rlghL Lo
lnsLlLuLe a separaLe clvll acLlon, prescrlpLlon runs from Lhe daLe reservaLlon
ls made up Lo Lhe Llme Lhe clvll acLlon ls acLually flled ln courL.
Art. 11S1 - rescr|pt|on for Act|ons regard|ng ayment
1he Llme for Lhe prescrlpLlon of acLlons whlch have for Lhelr ob[ecL Lhe enforcemenL
of obllgaLlons Lo pay prlnclpal wlLh lnLeresL or annulLy runs from Lhe lasL paymenL
of Lhe annulLy or of Lhe lnLeresL. (1970a)
1hls refers Lo obllgaLlons where paymenL of whlch ls due aL sLlpulaLed
lnLervals.
o lf Lhe debL ls noL yeL due, paymenL of lnLeresL or annulLy wlll noL
sLarL Lhe runnlng of Lhe perlod.
Art. 11S2 - rescr|pt|on of Act|ons dec|ared by Iudgment
1he perlod for prescrlpLlon of acLlons Lo demand Lhe fulfllmenL of obllgaLlons
declared by a [udgmenL commences from Lhe Llme Lhe [udgmenL became flnal.
(1971)
rescrlpLlve perlod ls counLed noL from Lhe Llme Lhe [udgmenL was
rendered buL from Lhe Llme lL became flnal.
lblllpploe Notloool 8ook v. 8ooJoc - regardlng [udgmenL credlLors, Lhe
purpose of Lhe revlval [udgmenL ls Lo glve a credlLor a new rlghL of
enforcemenL from Lhe daLe of revlval for Lhe credlLor's proLecLlon.
Art. 11S3 - rescr|pt|on for Account|ng
1he perlod for prescrlpLlon of acLlons Lo demand accounLlng runs from Lhe day Lhe
persons who should render Lhe same cease ln Lhelr funcLlons.
1he perlod for Lhe acLlon arlslng from Lhe resulL of Lhe accounLlng runs from Lhe
daLe when sald resulL was recognlzed by agreemenL of Lhe lnLeresLed
parLles. (1972)
1here ls no dlfference beLween acLlons for accounLlng and rellquldaLlon
slnce boLh lnvolve Lhe deLermlnaLlon, ad[usLmenL and seLLlemenL of whaL
ls due Lo Lhe parLles under Lhe law
ulto v. 1ooeqo - Lhe dellnquenL parLner's acLlon for accounLlng, flled afLer
14 years, had already prescrlbed.
Art. 11S4 - Iortu|tous Lvent
1he perlod durlng whlch Lhe obllgee was prevenLed by a forLulLous evenL from
enforclng hls rlghL ls noL reckoned agalnsL hlm. (n)
ltovlJeot 5ovloqs 8ook v. cA - when prescrlpLlon ls lnLerrupLed by a
forLulLous evenL, all Lhe beneflLs acqulred so far from Lhe possesslon wlll
cease and when prescrlpLlon sLarLs anew, lL wlll be enLlrely a new one.
1oo v. cA - Lhe peLlLloner's arresL and deLenLlon durlng Lhe Marcos reglme
was noL consldered as a forLulLous evenL whlch could have lnLerrupLed Lhe
prescrlpLlon for hls rlghL of acLlon.

Art. 11SS - Interrupt|on of rescr|pt|on for Act|ons
1he prescrlpLlon of acLlons ls lnLerrupLed when Lhey are flled before Lhe courL,
when Lhere ls a wrlLLen exLra[udlclal demand by Lhe credlLors, and when Lhere ls
any wrlLLen acknowledgmenL of Lhe debL by Lhe debLor. (1973a)
leJesmo v. cA - Lhls means LhaL Lhe perlod of prescrlpLlon beglns Lo run
anew, and whaLever Llme of llmlLaLlon mlghL have already elapsed ls
Lhereby negaLed and rendered lnefflcaclous. 1he effecL ls Lo renew Lhe
obllgaLlon and Lo make prescrlpLlon run agaln from Lhe daLe of
lnLerrupLlon.

1. I|||ng of an act|on |n court
cobteto v. 1looo - clvll acLlons are deemed commenced from Lhe
daLe of Lhe flllng and dockeLlng of Lhe complalnL wlLh Lhe Clerk of
CourL.
lnLerrupLlon lasLs durlng Lhe pendency of Lhe acLlon.
Olymplo lotetootloool loc. v. cA - lf Lhe plalnLlff deslsLs from
prosecuLlng Lhe acLlon Lo lLs flnal concluslon, Lhe acLlon ls deemed
abandoned and as lf lL has never been lnsLlLuLed.
2. Wr|tten extra[ud|c|a| demand by the cred|tor

13
Any wrlLLen noLlce glven by Lhe credlLor Lo Lhe debLor Lo enforce
Lhe dellvery or paymenL of an obllgaLlon.
3. Wr|tten acknow|edgement of the debt by the debtor
WrlLLen offer of paymenL works as a renewal of Lhe obllgaLlon
lblllpploe Notloool 8ook v. Osete - noL all acLs of
acknowledgmenL of a debL lnLerrupL prescrlpLlon. 1o produce an
effecL, lL musL be wrlLLen.
komos v. cooJez - alLhough acLlons regardlng wrlLLen conLracLs
prescrlbe afLer 10 years, such was lnLerrupLed when Lhe
defendanL submlLLed a leLLer acknowledglng Lhe valldlLy of Lhe
deed of absoluLe sale and promlslng Lo comply wlLh Lhe Lerms.
8CCk lv: C8LlCA1lCnS Anu CCn18AC1S
1I1LL. I. - C8LIGA1ICNS
Art. 11S6 - Def|n|t|on
An obllgaLlon ls a [urldlcal necesslLy Lo glve, Lo do or noL Lo do. (n)
"Iur|d|ca| necess|ty" - ln case of non-compllance, Lhe courLs may be called
upon by Lhe aggrleved parLy Lo enforce lLs fulfllmenL
Cb||gat|on - a legal bond whereby consLralnL ls lald upon a person or
group of persons Lo acL or forbear on behalf of anoLher person or group of
persons.
8equlremenLs: (!.C.S.)
1. Iur|d|ca| t|e - efflclenL cause esLabllshed by sources of obllgaLlons.
2. Cb[ect or restat|on - conducL requlred Lo be observed by Lhe debLor.
lL may be Lo glve, Lo do or noL Lo do.
3. Sub[ect-persons - may refer Lo boLh naLural and [urldlcal persons.
May be elLher:
a. Act|ve (obllgee/credlLor) - person enLlLled Lo demand
fulfllmenL, he who has Lhe rlghL.
b. ass|ve (obllgor/debLor) - person who ls bound Lo Lhe
fulfllmenL of Lhe obllgaLlon, he who has Lhe duLy.
Aoq o Asoocloo v. cA

Art. 11S7 - Sources of Cb||gat|ons
CbllgaLlons arlse from:
(1) Law,
(2) ConLracLs,
(3) Cuasl-conLracLs,
(4) AcLs or omlsslons punlshed by law, and
(3) Cuasl-dellcLs. (1089a)
Serves as Lhe [urldlcal Lle of Lhe obllgaLlon.
LnumeraLlon ls excluslve. 1he followlng are Lhe only sources of obllgaLlons:
(L.C.u.C
2)

1. Law - lmposed by Lhe law lLself.
Lx. CbllgaLlon Lo pay Laxes, supporL one's famlly (ArL. 291)
2. Contracts - from Lhe sLlpulaLlon of Lhe parLles
Lx. CbllgaLlon Lo repay a loan or lndebLedness by vlrLue of
an agreemenL
3. uas|-contracts - from lawful, volunLary and unllaLeral acLs whlch are
enforceable Lo Lhe end LhaL no one shall be un[usLly enrlched or beneflLed
aL Lhe expense of anoLher.
Lx. CbllgaLlon Lo reLurn money pald by mlsLake or whlch ls
noL due
4. De||cts (Crlmes) - from clvll llablllLy whlch ls Lhe consequence of a crlmlnal
offense.
Lx. CbllgaLlon Lo reLurn a car sLolen
CbllgaLlon of a klller Lo lndemnlfy Lhe helrs of hls vlcLlm
3. uas|-de||cts (1orLs) - from damages caused Lo anoLher Lhrough an acL or
omlsslon, Lhere belng faulL or negllgence, buL no conLracLual relaLlons
beLween Lhe parLles.
Lx. CbllgaLlon of Lhe possessor of an anlmal Lo pay for Lhe
damage whlch lL may have caused
CbllgaLlons are clvll or naLural.
1. C|v|| ob||gat|on - glves a rlghL of acLlon Lo compel Lhelr performance.
2. Natura| Cb||gat|ons - noL based on poslLlve law buL on equlLy and
naLural law. 1hese do noL granL a rlghL of acLlon Lo enforce Lhelr
performance, buL afLer volunLary fulfllmenL by Lhe obllgor, Lhey
auLhorlze reLenLlon of whaL has been dellvered or rendered by reason
Lhereof. (ArL. 1423)


16
Art. 11S8 - Cb||gat|ons from Law
CbllgaLlons derlved from law are noL presumed. Cnly Lhose expressly deLermlned ln
Lhls Code or ln speclal laws are demandable, and shall be regulaLed by Lhe precepLs
of Lhe law whlch esLabllshes Lhem, and as Lo whaL has noL been foreseen, by Lhe
provlslons of Lhls 8ook. (1090)
Lega| Cb||gat|on - Lhe law ls Lhe mosL lmporLanL source of obllgaLlon.
o lL does noL depend upon Lhe wlll of Lhe parLles.
o lmposed by Lhe SLaLe and ls generally lmbued wlLh some publlc
pollcy conslderaLlons.
o 1he basls of Lhe obllgaLlon musL be clear.
o lL cannoL be presumed.
LxlsLlng law enLers lnLo and forms parL of a valld conLracL wlLhouL need for
Lhe parLles expressly maklng reference LhereLo.
o 1he provlslons of a conLracL are noL only llmlLed Lo whaL we see,
buL ls undersLood Lo lnclude whaL ls prescrlbed by law.
Spec|a| |aws - refers Lo all oLher laws noL conLalned ln Lhe Clvll Code llke
Lhe CorporaLlon Code, negoLlable lnsLrumenLs Law, lnsurance Code,
naLlonal lnLernal 8evenue Code, 8evlsed enal Code, Labor Code, eLc.
Art. 11S9 - Cb||gat|ons from Contracts
CbllgaLlons arlslng from conLracLs have Lhe force of law beLween Lhe conLracLlng
parLles and should be complled wlLh ln good falLh. (1091a)
Contract - a meeLlng of mlnds beLween Lwo persons whereby one blnds
hlmself, wlLh respecL Lo Lhe oLher, Lo glve someLhlng or Lo render some
servlce. (ArL. 1303)
8lndlng force - a conLracL ls Lhe law beLween Lhe parLles.
o upon perfecLlon of Lhe conLracL, Lhe parLles are bound Lo fulflll
whaL has been sLlpulaLed lncludlng consequences should Lhere be
a breach ln good falLh, usage, or Lhe law.
o SLlpulaLlons should noL be conLrary Lo law, morals, good cusLoms,
publlc pollcy or publlc order.
Compllance ln good fa|th - performance ln accordance wlLh Lhe
sLlpulaLlons or Lerms of Lhe conLracL or agreemenL.
A conLracL may lnvolve muLual and reclprocal obllgaLlons and duLles
beLween and among Lhe parLles.
letlo compoolo Je 5eqotos loc. v. cA - Lhe Lrlal courL cannoL dlsregard and
subsLlLuLe Lhelr own lnLerpreLaLlon of Lhe sLlpulaLlons ln an lnsurance
conLracL whlch sLaLes Lhe lnsurer's llablllLles, whenever Lhe lnLenLlons of
Lhe parLles are clear and Lhe essenLlal requlremenLs for Lhe valldlLy of such
conLracL exlsL.
Art. 1160 - Cb||gat|ons from uas| Contracts
CbllgaLlons derlved from quasl-conLracLs shall be sub[ecL Lo Lhe provlslons of
ChapLer 1, 1lLle xvll, of Lhls 8ook. (n)
uas| Contract - cerLaln lawful, volunLary and unllaLeral acLs glve rlse Lo
Lhe [urldlcal relaLlon of quasl-conLracL Lo Lhe end LhaL no one shall be
un[usLly enrlched or beneflLed aL Lhe expense of Lhe oLher. (ArL. 2142)
2 k|nds of uas|-conLracLs:
1. So|ut|o Indeb|t| - Lhe [urldlcal relaLlon whlch ls creaLed when
someLhlng ls recelved when Lhere ls no rlghL Lo demand lL and lL was
unduly dellvered Lhrough mlsLake.
Lx. x owes ? 1,000. x pald ? 2,000 by mlsLake. ? ls obllged Lo reLurn
Lhe excess of 1,000.
2. Negot|orum gest|o - Lhe volunLary managemenL of Lhe properLy or
affalrs of anoLher wlLhouL Lhe knowledge or consenL of Lhe laLLer. (ArL.
2144)
Lx. Whlle x was ouL of Lown, a flre broke ouL near hls house. 1hrough
Lhe efforL of ?, x's house was spared from belng burned. x has Lhe
obllgaLlon Lo relmburse ? of all expenses lncurred ln savlng Lhe
house.
Imp||ed contract - a conLracL whlch ls lmplled ln facL ls one ln whlch Lhe
clrcumsLances lmply LhaL parLles have reached an agreemenL even Lhough
Lhey have noL done so expressly.
Lx. 8y golng Lo a docLor, a paLlenL agrees LhaL he wlll pay a falr prlce
for Lhe servlce. lf he refuses Lo pay afLer belng examlned, he has
breached a conLracL lmplled ln facL.
Art. 1161 - Cb||gat|ons from Cr|mes or De||cts
Clvll obllgaLlons arlslng from crlmlnal offenses shall be governed by Lhe penal laws,
sub[ecL Lo Lhe provlslons of ArLlcle 2177, and of Lhe perLlnenL provlslons of ChapLer
2, rellmlnary 1lLle, on Puman 8elaLlons, and of 1lLle xvlll of Lhls 8ook, regulaLlng
damages. (1092a)
C|v|| ||ab|||ty - aLLaches Lo an lndlvldual who ls found Lo be crlmlnally llable.

17
1he exLenL of Lhe clvll llablllLy arlslng from crlmes ls governed by Lhe
8evlsed enal Code whlch lncludes: resLlLuLlon, reparaLlon and
lndemnlflcaLlon.
Lx. x sLole Lhe car of ?. lf x ls convlcLed, Lhe courL wlll order x:
1) Lo reLurn Lhe car or pay lLs value
2) Lo pay for any damage caused Lo Lhe car
3) Lo pay such oLher damages suffered by ? as a consequence of
Lhe crlme (llke moral or exemplary damages)
Art. 1162 - Cb||gat|ons from uas|-de||cts
CbllgaLlons derlved from quasl-dellcLs shall be governed by Lhe provlslons of
ChapLer 2, 1lLle xvll of Lhls 8ook, and by speclal laws. (1093a)
uas|-de||ct or 1orLs - an acL or omlsslon whlch causes damage Lo anoLher
person, Lhere belng faulL or negllgence, buL no pre-exlsLlng conLracLual
relaLlon beLween Lhe parLles. (ArL. 2176)
Lx. CbllgaLlon of Lhe possessor of an anlmal Lo pay for Lhe
damage whlch lL may have caused
Chapter 2: Nature and Lffect of Cb||gat|ons
Art. 1163 - kequ|red D|||gence
Lvery person obllged Lo glve someLhlng ls also obllged Lo Lake care of lL wlLh Lhe
proper dlllgence of a good faLher of a famlly, unless Lhe law or Lhe sLlpulaLlon of Lhe
parLles requlres anoLher sLandard of care. (1094a)
lnvolves Lhe presLaLlon Lo glve"
"Someth|ng" - connoLes a deLermlnaLe ob[ecL
o Determ|nate ob[ect - deflnlLe, known and has already been dlsLlncLly
declded and parLlcularly speclfled as Lhe maLLer Lo be glven from
among Lhe same Lhlngs belonglng Lo Lhe same klnd. 1he debLor cannoL
subsLlLuLe lL wlLh anoLher alLhough Lhe laLLer ls of Lhe same klnd and
quallLy wlLhouL Lhe consenL of Lhe credlLor. (ArL. 1244)
Lx. Lhe house aL x address
Lhe 1oyoLa car wlLh plaLe number xxx
Lhls cavan of rlce
Lhe money l gave you
o Indeterm|nate or gener|c ob[ect - any ob[ecL whlch belongs Lo Lhe
same klnd. 1he debLor can glve anyLhlng of Lhe same class as long as lL
ls of Lhe same klnd.
Lx. a sum of 1,000
a 1993 1oyoLa car
a cavan of rlce
D|||gence of a good father of a fam||y (ordlnary) - lf Lhere ls no sLlpulaLlon
as Lo Lhe dlllgence whlch should be observed, LhaL whlch ls expecLed of a
good faLher of a famlly ls requlred.
Another standard of care (exLraordlnary) - lf Lhe law or sLlpulaLlon of Lhe
parLles provldes for anoLher sLandard of care, sald law or sLlpulaLlon shall
prevall.
o ln case of a conLrary sLlpulaLlon of Lhe parLles, such should noL be
one conLemplaLlng rellnqulshmenL or walver of Lhe mosL ordlnary
dlllgence
o Common carr|ers-persons, corporaLlons, flrms or assoclaLlons
engaged ln Lhe buslness of carrylng or LransporLlng passengers or
goods or boLh, by land, waLer, or alr, for compensaLlon, offerlng
Lhelr servlces Lo Lhe publlc. 1hey are bound Lo observe
exLraordlnary dlllgence.
lacLors Lo be consldered - Lhe dlllgence requlred depends on Lhe naLure of
Lhe person, Llme and place. (ArL. 1173)
Cases of presumed negllgence - subsLlLuLe parenLal auLhorlLy of schools,
common carrlers
Art. 1164 - k|ght Cver Iru|ts
1he credlLor has a rlghL Lo Lhe frulLs of Lhe Lhlng from Lhe Llme Lhe obllgaLlon Lo
dellver lL arlses. Powever, he shall acqulre no real rlghL over lL unLll Lhe same has
been dellvered Lo hlm. (1093)
klnds of lrulLs: (n.l.C.)
1. Natura| fru|ts - sponLaneous producLs of soll and Lhe young or
oLher producLs of anlmals
Lx. grass, Lrees, pupples
2. Industr|a| fru|ts - produced by lads of any klnd Lhrough culLlvaLlon
or labor
Lx. sugar cane, vegeLables, rlce
3. C|v|| fru|ts - derlved by vlrLue of a [urldlcal relaLlon
Lx. renL, lnLeresL, and oLher slmllar lncome

18
kea| r|ght-Lhe rlghL or power of a person over a speclflc Lhlng (llke
ownershlp, possesslon, morLgage), wlLhouL a deflnlLe passlve sub[ecL
agalnsL whom such rlghL may be personally enforced.
o Lnforceable agalnsL Lhe whole world and wlll pre[udlce anybody
clalmlng Lhe same ob[ecL of Lhe presLaLlon
o Accrues when Lhe Lhlng or ob[ecL of Lhe presLaLlon ls dellvered Lo
Lhe credlLor
ersona| r|ght-Lhe rlghL or power of a person (credlLor) Lo demand of
anoLher (debLor), as a deflnlLe passlve sub[ecL, Lhe fulflllmenL of a
presLaLlon Lo glve, Lo do, or noL Lo do.
o Can be defeaLed by a Lhlrd person ln good falLh who has
lnnocenLly acqulred Lhe properLy prlor Lo Lhe scheduled dellvery
regardless of wheLher or noL such Lhlrd person acqulred Lhe
properLy afLer Lhe rlghL Lo Lhe dellvery of Lhe Lhlng has accrued ln
favor of Lhe credlLor
Art. 116S - De||very of a Determ|nate or Indeterm|nate 1h|ng
When whaL ls Lo be dellvered ls a deLermlnaLe Lhlng, Lhe credlLor, ln addlLlon Lo Lhe
rlghL granLed hlm by ArLlcle 1170, may compel Lhe debLor Lo make Lhe dellvery.
lf Lhe Lhlng ls lndeLermlnaLe or generlc, he may ask LhaL Lhe obllgaLlon be complled
wlLh aL Lhe expense of Lhe debLor.
lf Lhe obllgor delays, or has promlsed Lo dellver Lhe same Lhlng Lo Lwo or more
persons who do noL have Lhe same lnLeresL, he shall be responslble for any
forLulLous evenL unLll he has effecLed Lhe dellvery. (1096)
8emedles of a credlLor ln a real obllgaLlon:
a. Non-de||very of a determ|nate th|ng - Lo flle an acLlon Lo compel
Lhe debLor Lo make Lhe dellvery, also known as speclflc
performance
b. Non-de||very of an |ndeterm|nate or gener|c th|ng - Lhe credlLor
may have lL accompllshed or dellvered ln any reasonable and legal
way charglng all expenses Lo Lhe debLor
c. Non-de||very due to fortu|tous event (ArL. 1174) - general rule:
obllgor ls noL llable for forLulLous evenL
! LxcepL when Lhe obllgor delays (ArL. 1169) or has
promlsed Lhe same Lhlng Lo 2 or more persons wlLh
dlfferenL lnLeresLs
! ln such cases, obllgor may be compelled Lo effecL
dellvery and glve Lhe necessary damages (ArL. 1170)

Art. 1166 - Access|ons and Accessor|es
1he obllgaLlon Lo glve a deLermlnaLe Lhlng lncludes LhaL of dellverlng all lLs
accesslons and accessorles, even Lhough Lhey may noL have been menLloned.
(1097a)
Access|ons - frulLs, addlLlons Lo, or lmprovemenLs upon a Lhlng (prlnclpal),
whlch are noL necessary Lo Lhe prlnclpal Lhlng.
Lx. house or Lrees on a land, proflLs or dlvldends accrulng from
shares of sLocks
Accessor|es - Lhlngs [olned Lo or lncluded wlLh Lhe prlnclpal Lhlng for
embelllshmenL, beLLer use or compleLlon. 1he accessory and Lhe prlnclpal
Lhlng musL go LogeLher
Lx. frame of a plcLure, braceleL of a waLch, charger of an lad
8oLh accesslons and accessorles can exlsL only ln relaLlon Lo Lhe prlnclpal.
Art. 1167 - Cb||gat|on 1o Do
lf a person obllged Lo do someLhlng falls Lo do lL, Lhe same shall be execuLed aL hls
cosL.
1hls same rule shall be observed lf he does lL ln conLravenLlon of Lhe Lenor of Lhe
obllgaLlon. lurLhermore, lL may be decreed LhaL whaL has been poorly done be
undone. (1098)
lnvolves Lhe presLaLlon Lo do"
8emedles of Lhe credlLor:
a. Debtor fa||s to perform an ob||gat|on to do - Lo have Lhe
obllgaLlon performed by hlmself or by anoLher aL Lhe debLor's
expense and recover damages (ArL. 1170)
! unllke obllgaLlons Lo glve, a speclflc performance ln
obllgaLlons Lo do may noL be ordered as Lhls may amounL
Lo lnvolunLary servlLude. leaslble remedy ls damages.
b. Debtor performs the ob||gat|on but contrary to the terms or |n a
poor manner - ln addlLlon Lo remedy preclously menLloned, lL
may be ordered (by Lhe courL) LhaL lL be undone lf lL ls sLlll
posslble.

19
cboves v. Coozoles - owner of Lhe LypewrlLer was enLlLled Lo Lhe cosL of
Lhe execuLlon of Lhe obllgaLlon plus damages when Lhe repalrer of Lhe
LypewrlLer reLurned lL wlLh mlsslng parLs and wlLhouL havlng lL repalred.
Art. 1168 - Cb||gat|on Not 1o Do
When Lhe obllgaLlon conslsLs ln noL dolng, and Lhe obllgor does whaL has been
forbldden hlm, lL shall also be undone aL hls expense. (1099a)
lnvolves Lhe presLaLlon noL Lo do"
Lx. x boughL a land from ? where lL was agreed upon LhaL ? would noL
consLrucL a fence on cerLaln porLlons of Lhe land. Should ?
consLrucL a fence, Lhe same may be removed aL ?'s expense.
Art. 1169 - De|ay
1hose obllged Lo dellver or Lo do someLhlng lncur ln delay from Lhe Llme Lhe obllgee
[udlclally or exLra[udlclally demands from Lhem Lhe fulflllmenL of Lhelr obllgaLlon.
Powever, Lhe demand by Lhe credlLor shall noL be necessary ln order LhaL delay
may exlsL:
(1) When Lhe obllgaLlon or Lhe law expressly so declare, or
(2) When from Lhe naLure and Lhe clrcumsLances of Lhe obllgaLlon lL appears LhaL
Lhe deslgnaLlon of Lhe Llme when Lhe Lhlng ls Lo be dellvered or Lhe servlce ls Lo be
rendered was a conLrolllng moLlve for Lhe esLabllshmenL of Lhe conLracL, or
(3) When demand would be useless, as when Lhe obllgor has rendered lL beyond hls
power Lo perform.
ln reclprocal obllgaLlons, nelLher parLy lncurs ln delay lf Lhe oLher does noL comply
or ls noL ready Lo comply ln a proper manner wlLh whaL ls lncumbenL upon hlm.
lrom Lhe momenL one of Lhe parLles fulfllls hls obllgaLlon, delay by Lhe oLher
beglns. (1100a)
De|ay - undersLood as legal delay or defaulL, fallure Lo perform or dellver
on Llme whlch consLlLuLes a breach of an obllgaLlon. lL musL be elLher
mallclous or negllgenL, Lhe absence of whlch, Lhe obllgor shall noL be llable
under ArL. 1170.
o klnds of uelay:
a. Mora acc|p|end| - delay on Lhe parL of Lhe credlLor Lo accepL.
! Lhe debLor may release hlmself from Lhe obllgaLlon by
conslgnaLlon (ArL. 1236)
b. Mora so|vend| - delay on Lhe parL of Lhe debLor Lo dellver.
! 8equlslLes:
1. obllgaLlon ls demandable and llquldaLed
2. debLor delays performance
3. credlLor demands performance
555 v. Mooowolk uevelopmeot ooJ noosloq cotp.
Ceneral rule - defaulL beglns from Lhe momenL demand ls made by Lhe
credlLor [udlclally or exLra[udlclally. CommencemenL of a sulL ls sufflclenL
demand.
o LxcepL ln 3 cases: (u.1.L.)
1. When Lhe obllgaLlon or Lhe law so provldes
2. When Llme ls of Lhe essence
3. When demand would be useless
kec|proca| Cb||gat|ons - Lhe obllgaLlon of one ls a resoluLory condlLlon of
Lhe oLher, Lhe non-fulflllmenL of whlch enLlLles Lhe oLher parLy Lo resclnd
Lhe conLracL.
o lf one of Lhe parLles falls Lo dellver, Lhe oLher cannoL lnslsL upon
lLs performance. Legally, Lhere ls no defaulL or delay on Lhe parL of
boLh parLles.
o lf boLh parLles lncur delay, Lhe llablllLy of Lhe flrsL lnfracLor shall be
equlLably Lempered by Lhe courLs. lf lL cannoL be deLermlned,
each shall bear hls own damages. (ArL. 1192)
2 cases where Lxtra[ud|c|a| Demand |s necessary before flllng a clvll sulL:
1. L[ecLmenL
2. ConslgnmenL
Lxtra[ud|c|a| demand - necessary so LhaL Lhe courLs wlll have a basls on
when Lo sLarL compuLlng damages
De|ay |n the payment of money - ArL. 2209 provldes LhaL unless oLherwlse
sLlpulaLed, legal lnLeresL for delay ln paymenL ls 6 per annum.
o Powever, damages shall only begln Lo run afLer [udlclal or
exLra[udlclal demand.
8otzoqo v. cA - demand was noL necessary where a conLracL enLered lnLo
for Lhe consLrucLlon of a nlche for Lhe wlfe of Lhe aggrleved parLy who
expressly wlshed LhaL she be burled before ChrlsLmas day.
8loolboqoo 1ecb loc. v. cA - Lhrough no faulL of Lhe seller, Lhe buyer could
noL Lake possesslon of Lhe properLy because such buyer was evlcLed by a
Lhlrd parLy Lhrough a courL order. Pence, Lhe seller cannoL resclnd Lhe
conLracL for Lhe buyer's non-paymenL of Lhe balance of a properLy.
Aqcoolll v. C5l5 - respondenL had no rlghL Lo resclnd Lhe conLracL where
peLlLloner falled Lo lmmedlaLely occupy Lhe house bullL by peLlLloner
because Lhe house was ln a sLaLe of lncompleLeness. nelLher parLy lncurs

20
ln delay lf Lhe oLher does noL comply or ls noL ready Lo comply ln a proper
manner wlLh whaL ls lncumbenL upon hlm.
1ooqolllq v. cA - Lhe respondenL may noL be compelled Lo pay for Lhe
balance and damages where Lhe peLlLloner bullL wlndmllls whlch collapsed
due Lo defecLs ln Lhe consLrucLlon.

Art. 1170 - Sources of L|ab|||t|es
1hose who ln Lhe performance of Lhelr obllgaLlons are gullLy of fraud, negllgence, or
delay, and Lhose who ln any manner conLravene Lhe Lenor Lhereof, are llable for
damages. (1101)
Crounds for llablllLy:
1. Iraud (decelL or dolo) - Lhe dellberaLe or lnLenLlonal evaslon of Lhe
obllgaLlon, lL lmplles mallce or dlshonesLy and ls synonymous Lo bad falLh
ln LhaL, lL lnvolves a deslgn Lo mlslead or decelve anoLher. (ln relaLlon Lo
ArL. 1171)
2. Neg||gence (faulL or culpa) - omlsslon of LhaL dlllgence whlch ls requlred by
Lhe naLure of Lhe obllgaLlon and corresponds wlLh Lhe clrcumsLances of Lhe
persons, of Lhe Llme and of Lhe place. (ArL. 1173)
o SLandard of care lmposed by law or by sLlpulaLlon of Lhe parLles.
o ln Lhe absence of law or sLlpulaLlon, LhaL dlllgence whlch ls
expecLed of a good faLher of a famlly ls requlred.
3. De|ay (mora) - fallure Lo perform or dellver on Llme whlch consLlLuLes a
breach of an obllgaLlon. (ArL. 1169)
o 8otzoqo v. cA - Lhere ls negllgence and delay where a conLracL
was enLered lnLo for Lhe consLrucLlon of a nlche for Lhe wlfe of
Lhe aggrleved parLy who expressly wlshed LhaL she be burled
before ChrlsLmas day, and Lhe consLrucLors falled Lo dellver.
4. Contravent|on of the terms of the ob||gat|on - vlolaLlon of Lhe Lerms and
condlLlons sLlpulaLed ln Lhe obllgaLlon.
lf any of Lhese co-exlsLs wlLh a forLulLous evenL or aggravaLes Lhe loss
caused by a forLulLous evenL, Lhe obllgor cannoL be excused from llablllLy.

Art. 1171 - kespons|b|||ty from Iraud
8esponslblllLy arlslng from fraud ls demandable ln all obllgaLlons. Any walver of an
acLlon for fuLure fraud ls vold. (1102a)
1he fraud or dolo necessarlly lnvolves a valld agreemenL buL, ln Lhe
performance of Lhe same, fraud ls commlLLed.
A walver of an acLlon for fuLure fraud produces no effecL.
Art. 1172 - kespons|b|||ty from Neg||gence
8esponslblllLy arlslng from negllgence ln Lhe performance of every klnd of
obllgaLlon ls also demandable, buL such llablllLy may be regulaLed by Lhe courLs,
accordlng Lo Lhe clrcumsLances. (1103)
LlablllLy can be regulaLed by Lhe courLs dependlng on Lhe clrcumsLances.
Art. 1173 - Iau|t or Neg||gence
1he faulL or negllgence of Lhe obllgor conslsLs ln Lhe omlsslon of LhaL dlllgence
whlch ls requlred by Lhe naLure of Lhe obllgaLlon and corresponds wlLh Lhe
clrcumsLances of Lhe persons, of Lhe Llme and of Lhe place. When negllgence shows
bad falLh, Lhe provlslons of ArLlcles 1171 and 2201, paragraph 2, shall apply.
lf Lhe law or conLracL does noL sLaLe Lhe dlllgence whlch ls Lo be observed ln Lhe
performance, LhaL whlch ls expecLed of a good faLher of a famlly shall be requlred.
(1104a)
negllgence ls a relaLlve or comparaLlve, noL an absoluLe Lerm and lLs
appllcaLlon depends on Lhe clrcumsLances of Lhe persons, of Llme and of
Lhe place.
o 5ypolo v. cA - Lhe memorlal company was noL negllgenL when lL
bore a hole on Lhe grave of Lhe deceased Lo prevenL Lhe vaulL
from falllng due Lo heavy ralns.
o lblllpploe Notloool 8ook v. cA - Lhe bank was held llable for
negllgenLly dlshonorlng Lhe peLlLloners check causlng serlous
anxleLy, humlllaLlon and embarrassmenL Lo Lhe cllenL.
Ceneral rule - negllgence musL always be proven (burden of proof on Lhe
credlLor).
"Neg||gence shows bad fa|th" - can be lmplled from repeaLed negllgence,
hence Lhe provlslon on fraud (ArL. 1171) shall apply.
o ArL. 2201, 2nd par-Lhe obllgor shall be responslble for all
damages whlch may be reasonably aLLrlbuLed Lo Lhe non-
performance of Lhe obllgaLlon

21
o 5omsoo v. cA - bad falLh ls a sLaLe of mlnd of lll wlll and lL does
noL slmply connoLe bad [udgmenL or negllgence. lL ls synonymous
wlLh fraud and lnvolves a deslgn Lo mlslead or decelve anoLher.
Art. 1174 - Iortu|tous Lvents
LxcepL ln cases expressly speclfled by Lhe law, or when lL ls oLherwlse declared by
sLlpulaLlon, or when Lhe naLure of Lhe obllgaLlon requlres Lhe assumpLlon of rlsk, no
person shall be responslble for Lhose evenLs whlch could noL be foreseen, or whlch,
Lhough foreseen, were lnevlLable. (1103a)
Iortu|tous Lvent - any evenL whlch cannoL be foreseen, or whlch Lhough
foreseen, ls lnevlLable, force ma[eur.
o Act of man - war, flre, robbery, murder, accldenL
o Act of God - earLhquake, flood, shlpwreck volcanlc erupLlon
8equlslLes of a forLulLous evenL: (u.l.l
2
.)
1. lndependenL of Lhe wlll of Lhe debLor
2. LvenL musL be unforeseeable or unavoldable
3. LvenL musL be such as Lo render lL lmposslble for Lhe debLor Lo fulflll
hls obllgaLlon ln a normal manner
4. 1he debLor musL be free from any parLlclpaLlon Lhereln, or aggravaLlon
of Lhe ln[ury
Nokpll v. cA
Ceneral rule - an obllgor cannoL be llable for a forLulLous evenL excepL:
1. When expressly speclfled by |aw
! obllgor promlses Lhe same Lhlng Lo 2 or more persons of
dlfferenL lnLeresLs (ArL. 1163)
! fraud, negllgence, delay or vlolaLlon by a person concurs wlLh
an acL of Cod ln produclng a loss, such person ls noL exempL
from llablllLy (ArL. 1170)
! ob[ecL of presLaLlon ls generlc even lf Lhe ob[ecL ls wlped ouL
by a forLulLous evenL (ArL. 1263)
Lx. dellvery of money
! obllgaLlon Lo dellver arlses from a crlme (ArL. 1268)
! ballee ln commodaLum - agreemenL Lo lend
a. uses Lhe Lhlng for a dlfferenL purpose
b. keeps lL longer Lhan whaL was agreed
c. Lhlng loaned was dellvered wlLh appralsal of lLs
value
d. lends of leases Lhe Lhlng Lo a Lhlrd person
e. glven Lhe opporLunlLy Lo save elLher Lhe loaned
Lhlng or a personal properLy, he chose Lhe laLLer
! provlslons of oLher codes
2. When declared by Lhe st|pu|at|on of Lhe parLles
3. When Lhe naLure of Lhe obllgaLlon so requlres Lhe assumpt|on of
r|sk
1ooqolllq v. cA - desLrucLlon of Lhe wlndmllls by a Lyphoon was noL
consldered a forLulLous evenL because of Lhe wlndmllls' lnherenL defecL
aLLrlbuLable Lo Lhe peLlLloners. 4
Lh
elemenL of forLulLous evenL was noL
presenL.
ulopoloo v. looteooo - Lhrowlng of a sLone dlrecLed aL Lhe car of Lhe
plalnLlff was consldered a forLulLous evenL.
5lo v. cA - forLulLous evenL was noL consldered when a bank falled Lo
noLlfy lLs cllenL of Lhe floodlng of lLs safeLy box whlch resulLed Lo Lhe
desLrucLlon of Lhe cllenL's sLamp collecLlon.
vlctotlo llootets Assoclotloo loc. v. vlctotlos Mlllloq co. - Lhe obllgee
cannoL demand Lhe fulflllmenL of Lhe dellvery of an obllgaLlon afLer 6 years
due Lo a forLulLous evenL, for such wlll be an exLenslon of Lhe conLracL. A
forLulLous evenL relleves Lhe obllgor from performance.
o Powever, should Lhe obllgee choose Lo enforce hls rlghL whlch
was prevenLed by a forLulLous evenL, Lhe prescrlpLlon for such
acLlon wlll sLarL anew. (ArL. 1134)
Ace-Aqto uevelopmeot cotp. v. cA - suspenslon of Lhe employee's
conLracL was broughL by a forLulLous evenL (burnlng), hence does noL
[usLlfy Lhe exLenslon of such conLracL. 1he conLracL was sub[ecL Lo a
resoluLory perlod whlch relleved Lhe parLles from Lhelr obllgaLlons, buL dld
noL sLop Lhe runnlng of Lhe perlod of Lhelr conLracL.
kepobllc v. lozoo 5teveJotloq - exLraordlnary dlllgence ls requlred of a
Lowed barge.
Art. 117S - Usur|ous 1ransact|ons
usurlous LransacLlons shall be governed by speclal laws. (n)
1he law does noL prohlblL usurlous conLracLs.
Usury - conLracLlng for or recelvlng lnLeresL ln excess of Lhe amounL
allowed by law for Lhe loan or use of money, goods eLc.


22
Art. 1176 - resumpt|on |n ayment
1he recelpL of Lhe prlnclpal by Lhe credlLor wlLhouL reservaLlon wlLh respecL Lo Lhe
lnLeresL, shall glve rlse Lo Lhe presumpLlon LhaL sald lnLeresL has been pald.
1he recelpL of a laLer lnsLallmenL of a debL wlLhouL reservaLlon as Lo prlor
lnsLallmenLs, shall llkewlse ralse Lhe presumpLlon LhaL such lnsLallmenLs have been
pald. (1110a)
A presumpLlon musL always arlse from a facL or a seL of facLs.
o resumpLlon can be rebuLLed by sLrong evldence Lo Lhe conLrary.
1o have probaLlve value, Lhe creaLlon of Lhe presumpLlon musL be
provlded by law.
Moollo 1toJloq & 5oppy co. v. MeJloo - recelpLs musL clearly show
evldence of parLlal paymenL.
Art. 1177 - k|ghts of the Cred|tor
1he credlLors, afLer havlng pursued Lhe properLy ln possesslon of Lhe debLor Lo
saLlsfy Lhelr clalms, may exerclse all Lhe rlghLs and brlng all Lhe acLlons of Lhe laLLer
for Lhe same purpose, save Lhose whlch are lnherenL ln hls person, Lhey may also
lmpugn Lhe acLs whlch Lhe debLor may have done Lo defraud Lhem. (1111)
8emedles of credlLors Lo saLlsfy Lhelr clalms (ln parLlcular order):
1. Lxhaust the propert|es of the debtor Lhrough levylng by aLLachmenL and
execuLlon upon all Lhe properLy of Lhe debLor, excepL such as are exempL
by law from execuLlon
Lx. exempL properLy - famlly home
2. Lxerc|se a|| the r|ghts and act|ons of the debtor, save Lhose personal Lo
hlm (acclon subrogaLorla)
Lx. enforceable rlghLs - rlghL Lo collecL from a debLor's debLor
personal rlghLs - rlghL Lo recelve legal supporL
3. Seek resc|ss|on of Lhe conLracLs execuLed by Lhe debLor ln fraud of Lhelr
rlghLs (acclon paullana)
o AJotoble v. cA - unless a debLor acLed ln fraud, Lhe credlLor
cannoL order resclsslon of a conLracL beLween Lhe debLor and a
Lhlrd parLy on Lhe ground LhaL such sale wlll pre[udlce Lhe
credlLor's rlghL Lo collecL from Lhe debLor.

Art. 1178 - 1ransm|ss|b|||ty
Sub[ecL Lo Lhe laws, all rlghLs acqulred ln vlrLue of an obllgaLlon are Lransmlsslble, lf
Lhere has been no sLlpulaLlon Lo Lhe conLrary. (1112)
ln general, rlghLs growlng ouL of an obllgaLlon are Lransmlsslble.
o Powever, Lhe person who LransmlLs Lhe rlghL cannoL Lransfer
greaLer rlghLs Lhan he hlmself has by vlrLue of Lhe obllgaLlon, and
vlce versa.
1he LransmlsslblllLy of rlghLs may be llmlLed, or alLogeLher prohlblLed by
sLlpulaLlon of Lhe parLles.
1ransmlsslon musL be sub[ecL Lo perLlnenL laws.

Chapter 3: D|fferent k|nds of Cb||gat|ons
"#$%&'( )* + ,-./ 012 $3124543106 '7648054319
Art. 1179 - ure Cb||gat|ons
Lvery obllgaLlon whose performance does noL depend upon a fuLure or uncerLaln
evenL, or upon a pasL evenL unknown Lo Lhe parLles, ls demandable aL once.
Lvery obllgaLlon whlch conLalns a resoluLory condlLlon shall also be demandable,
wlLhouL pre[udlce Lo Lhe effecLs of Lhe happenlng of Lhe evenL. (1113)
ure ob||gat|on - an unquallfled obllgaLlon whlch ls demandable
lmmedlaLely.
o loy v. vJo. ue lolooco - an acLlon flled afLer 13 years Lo execuLe
a promlssory noLe whlch conLalns an obllgaLlon lmmedlaLely
demadable may no longer prosper, conslderlng LhaL Lhe
prescrlpLlon of wrlLLen documenLs ls 10 years.
Cond|t|ona| ob||gat|on - an obllgaLlon sub[ecL Lo Lhe fulflllmenL of a
condlLlon whlch may be a fuLure and uncerLaln evenL, or pasL evenL
unknown Lo Lhe parLles.
o Cond|t|on - an acL or evenL, oLher Lhan a lapse of Llme, whlch,
unless Lhe condlLlon ls excused, musL occur before a duLy Lo
perform a promlse ln Lhe agreemenL arlses or whlch dlscharges a
duLy of performance LhaL has already rlsen.
! luLure and uncerLaln

23
! asL buL unknown
klnds of CondlLlons:
a. Suspens|ve cond|t|on (condlLlon precedenL) - Lhe fulflllmenL of whlch wlll
glve rlse Lo Lhe performance of an obllgaLlon. 1he demandablllLy of Lhe
obllgaLlon ls suspended unLll Lhe fulflllmenL of Lhe condlLlon.
Lx. ConLracL Lo sell - when Lhe buyer pays Lhe lasL lnsLallmenL, Lhe
LlLle of Lhe properLy shall be Lransferred Lo hlm
o ArL. 1182 - poLesLaLlve, casual condlLlons
b. keso|utory cond|t|on (condlLlon subsequenL) - operaLes Lo dlscharge a
duLy of performance LhaL has already arlsen. 1he obllgaLlon ls exLlngulshed
by operaLlon of law.
Lx. x blnds hlmself Lo glve ? 1,000 allowance unLll ? graduaLes from
college.
o kec|proca| ob||gat|ons - Lhe obllgaLlon of one ls a resoluLory
condlLlon of Lhe obllgaLlon of Lhe oLher, Lhe non-fulflllmenL of
whlch enLlLles Lhe oLher Lo resclnd Lhe conLracL.
cotooel v. cA -
CCN1kAC1 1C SLLL CCNDI1ICNAL CCN1kAC1 CI SALL
Suspenslve
CondlLlon
romlse Lo sell upon Lhe happenlng of
Lhe suspenslve condlLlon (paymenL of
Lhe flnal lnsLallmenL).
1he seller reserves LlLle Lo Lhe
properLy unLll Lhe suspenslve
condlLlon (full paymenL) ls fulfllled.
Cwnershlp Cwnershlp wlll noL auLomaLlcally
Lransfer Lo Lhe buyer alLhough Lhe
properLy may have been prevlously
dellvered Lo hlm.

Cwnershlp LhereLo auLomaLlcally
Lransfers Lo Lhe buyer by operaLlon
of law wlLhouL any furLher acL
havlng Lo be performed by Lhe
seller.
1hlrd
ersons
A 3
rd
person buylng such properLy
desplLe Lhe fulflllmenL of Lhe
suspenslve condlLlon, cannoL be
deemed a buyer ln bad falLh.
rospecLlve buyer cannoL seek rellef of
reconveyance of Lhe properLy (only a
promlse Lo sell).
rospecLlve buyer can seek rellef
of reconveyance of Lhe properLy.
SLaLus of
Lhe
CbllgaLlon
1here ls already a conLracL from Lhe
beglnnlng hence, lf Lhe suspenslve
condlLlon ls noL fulfllled, Lhe seller may
resclnd Lhe conLracL.
lf Lhe suspenslve condlLlon ls noL
fulfllled, Lhe perfecLlon of Lhe
conLracL ls abaLed.
1he prospecLlve seller sLlll has Lo
convey LlLle Lo Lhe prospecLlve buyer by
enLerlng lnLo a conLracL of sale
Iovlet v. cA - when a conLracL ls sub[ecL Lo a suspenslve condlLlon, lLs blrLh
or effecLlvlLy can Lake place only lf and when Lhe evenL consLlLuLes Lhe
condlLlon happens or ls fulfllled.
Art. 1180 - ayment Depends on Debtor's Means
When Lhe debLor blnds hlmself Lo pay when hls means permlL hlm Lo do so, Lhe
obllgaLlon shall be deemed Lo be one wlLh a perlod, sub[ecL Lo Lhe provlslons of
ArLlcle 1197. (n)
When duraLlon of Lhe perlod depends upon Lhe wlll of Lhe debLor:
uebLor - law presumes LhaL Lhe debLor really lnLends Lo pay.
CredlLor - Lhe problem ls, Lhe credlLor ls lefL Lo speculaLe and paymenL
could be an uncerLaln evenL.
8emedy of Lhe law - Lo balance Lhe presumed lnLenL of Lhe debLor Lo pay
and Lhe lnLeresL of Lhe credlLor by classlfylng Lhe obllgaLlon as one wlLh a
perlod.
o ArL. 1197 - 1he courLs may flx a perlod.
o er|od - a fuLure and cerLaln evenL upon Lhe arrlval of whlch Lhe
obllgaLlon sub[ecL Lo lL arlses or ls exLlngulshed. (ArL. 1193)
Art. 1181 - Cond|t|ona| Cb||gat|ons
ln condlLlonal obllgaLlons, Lhe acqulslLlon of rlghLs, as well as Lhe exLlngulshmenL or
loss of Lhose already acqulred, shall depend upon Lhe happenlng of Lhe evenL whlch
consLlLuLes Lhe condlLlon. (1114)
Suspens|ve cond|t|on (condlLlon precedenL) - a condlLlon whlch musL be
fulfllled before Lhe obllgaLlon may be demandable.
o AcqulslLlon of rlghLs
keso|utory cond|t|on (condlLlon subsequenL) - operaLes Lo exLlngulsh an
already exlsLlng obllgaLlon.
o Loss of rlghLs already acqulred
Art. 1182 - otestat|ve and Casua| Cond|t|ons
When Lhe fulflllmenL of Lhe condlLlon depends upon Lhe sole wlll of Lhe debLor, Lhe
condlLlonal obllgaLlon shall be vold. lf lL depends upon chance or upon Lhe wlll of a
Lhlrd person, Lhe obllgaLlon shall Lake effecL ln conformlLy wlLh Lhe provlslons of
Lhls Code. (1113)

24
When fulflllmenL of a condlLlon" - connoLes a suspenslve characLer of Lhe
presLaLlon

CondlLlons conLemplaLed ln Lhls provlslon:
A. otestat|ve cond|t|on - fulflllmenL depends upon Lhe sole wlll of Lhe
debLor, Lhen lL ls essenLlally a condlLlon because wheLher Lhe debLor wlll or
wlll noL fulflll Lhe obllgaLlon ls a fuLure and uncerLaln evenL, whlch ls vold.
Lx.
1. loo llm v. cA - Lhe lease conLracL shall subslsL for so long as Lhe
defendanL needed Lhe premlses. 1he blrLh of Lhe new lease
conLracL depended on Lhe sole wlll of Lhe lessee, whlch ls vold.
2. 1tlllooo v. Ooezoo colleqe - full paymenL of Lhe shares ln a school
was Lo be made only afLer Lhe obllgor had harvesLed flsh.
o Powever, lf Lhe poLesLaLlve condlLlon ls lmposed noL on Lhe blrLh
of Lhe obllgaLlon buL on lLs fulflllmenL, only Lhe condlLlon ls
avolded, leavlng unaffecLed Lhe obllgaLlon lLself. 1hls happens
when Lhe obllgaLlon ls pre-exlsLlng.
Lx.
1. x borrowed 10,000 from ? payable wlLhln 2 monLhs.
SubsequenLly, x promlsed Lo pay ? afLer x sells hls car
Lo whlch ? agreed. ln Lhls case, only Lhe condlLlon ls
vold buL noL Lhe x's pre-exlsLlng obllgaLlon Lo pay ?.
2. Osmeoo v. komos - where ln a promlssory noLe Lhe
obllgor promlsed Lo pay afLer Lhe house ls sold, Lhe
condlLlon ls vold buL Lhe obllgaLlon Lo pay subslsLs.
3. 5ecotlty 8ook ooJ 1tost compooy v. cA - where upon
sLlpulaLlon of Lhe parLles, Lhe owner shall equlLably
make approprlaLe ad[usLmenLs was vold, hence Lhe
bank was ordered Lo pay Lhe obllgaLlon ln full.
o loteote v. Omeqo - when Lhe condlLlon ls vold and Lhe obllgaLlon
subslsLs, such obllgaLlon ls noL converLed lnLo one whlch ls pure
and uncondlLlonal. An arralgnmenL mlghL be enforced whlch ls
noL wlLhln Lhe conLemplaLlon of Lhe parLles. 1he besL soluLlon ls
Lo conslder Lhe parLles havlng lnLended a perlod, and ask Lhe
courL Lo flx a perlod.
8. Casua| cond|t|on - depends on chance, hazard, or Lhe wlll of a Lhlrd person
o A resoluLory condlLlon LhaL depends upon Lhe wlll of a Lhlrd
person ls noL vold.
Lx. uocoslo v. cA - agreemenL shall be LermlnaLed when
Lhe lessor's chlldren need Lhe premlses.
C. M|xed ob||gat|on - depends noL only upon Lhe wlll of Lhe debLor buL also
upon chance and some oLher facLors.
Lx.
1. kometo v. cA - downpaymenL from Lhe buyer shall be
reLurned lf Lhe seller (wlll of Lhe vendor) shall noL be
able Lo remove Lhe squaLLers (wlll of 3
rd
persons) from
Lhe properLy.
2. Noqo 1elepbooe co. loc. v. cA - peLlLloner can use Lhe
elecLrlcal posLs of Lhe respondenL as long as lL needed
Lhe posLs and Lhe conLracL shall LermlnaLe when Lhe
respondenL ls forced Lo sLop lLs operaLlon as a publlc
servlce (dependenL on chance, hazard and 3
rd
persons).
A condlLlon aL once faculLaLlve and resoluLory may be valld even Lhough
Lhe condlLlon ls made Lo depend upon Lhe wlll of Lhe obllgor

Art. 1183 - Vo|d Cond|t|ons
lmposslble condlLlons, Lhose conLrary Lo good cusLoms or publlc pollcy and Lhose
prohlblLed by law shall annul Lhe obllgaLlon whlch depends upon Lhem. lf Lhe
obllgaLlon ls dlvlslble, LhaL parL Lhereof whlch ls noL affecLed by Lhe lmposslble or
unlawful condlLlon shall be valld.
1he condlLlon noL Lo do an lmposslble Lhlng shall be consldered as noL havlng been
agreed upon. (1116a)
Imposs|b|e cond|t|ons - render Lhe obllgaLlon dependenL upon Lhem as
legally lneffecLlve. 1he condlLlon annuls Lhe presLaLlon.
1. hys|ca||y |mposs|b|e cond|t|ons - when such condlLlons cannoL exlsL
or cannoL be done ln Lhe naLure of Lhlngs.
Lx. lf lL wlll noL raln ln Lhe hlllpplnes for one year
lf you can carry 20 cavans of palay on your shoulder
2. Lega||y |mposs|b|e cond|t|ons - when Lhey are conLrary Lo law,
morals, good cusLoms, publlc order or publlc pollcy.
Lx. lf you klll Z (agalnsL Lhe law)
lf you slap your faLher (agalnsL good cusLoms)
lf you overLhrow Lhe governmenL (agalnsL publlc order)


23
Art. 1184 - os|t|ve Cond|t|on
1he condlLlon LhaL some evenL happen aL a deLermlnaLe Llme shall exLlngulsh Lhe
obllgaLlon as soon as Lhe Llme explres or lf lL has become lndublLable LhaL Lhe evenL
wlll noL Lake place. (1117)
os|t|ve cond|t|on - Lhe happenlng of an evenL aL a deLermlnaLe Llme
exLlngulshes Lhe obllgaLlon.
Lx. x obllges Lo glve ? 10,000 lf 8 wlll marry C before 8 reaches Lhe
age of 23.
! x ls llable lf 8 marrles C before 8 Lurns 23.
! x ls noL llable lf 8 marrles C when 8 Lurns 23 or afLer 8
Lurns 23.
! lf C dles when 8 ls 22, lL has become lndublLable LhaL Lhe
condlLlon shall happen. Pence, Lhe obllgaLlon of x ls
exLlngulshed.
Art. 118S - Negat|ve Cond|t|on
1he condlLlon LhaL some evenL wlll noL happen aL a deLermlnaLe Llme shall render
Lhe obllgaLlon effecLlve from Lhe momenL Lhe Llme lndlcaLed has elapsed, or lf lL has
become evldenL LhaL Lhe evenL cannoL occur.
lf no Llme has been flxed, Lhe condlLlon shall be deemed fulfllled aL such Llme as
may have probably been conLemplaLed, bearlng ln mlnd Lhe naLure of Lhe
obllgaLlon. (1118)
Negat|ve cond|t|on - lf Lhe evenL does noL happen aL a deLermlnaLe Llme,
Lhe obllgaLlon shall become effecLlve and blndlng.
Lx. x wlll glve ? 10,000 lf ? does noL fall any of hls exams aL Lhe end
of Lhe semesLer.
Art. 1186 - Construct|ve Iu|f|||ment
1he condlLlon shall be deemed fulfllled when Lhe obllgor volunLarlly prevenLs lLs
fulflllmenL. (1119)
1he good fa|th-ob||gat|on of Lhe parLles lncludes an lmplled Lerm on Lhe
parL of Lhe sald parLles noL Lo lmpede, hlnder, obsLrucL or prevenL Lhe
fulflllmenL of Lhe obllgaLlon.
Construct|ve fu|f|||ment - Lhe obllgor volunLarlly prevenLs Lhe fulflllmenL
of Lhe condlLlon ln an obllgaLlon where Lhe law sLaLes LhaL Lhe obllgaLlon
shall be deemed fulfllled.
o 1oyoq v. cA - as a condlLlon of a conLracL of sale, Lhe buyer was
requlred Lo pay Lhe balance of a parLlcular loan and where Lhe
vendors premaLurely pald Lhe loan, Lhereby prevenLlng Lhe buyer
Lo fulflll Lhe condlLlon, Lhere was consLrucLlve fulflllmenL.
kec|proca| ob||gat|on - boLh parLles are muLually obllgors and also
obllgees, and any of Lhe conLracLlng parLles may, upon non-fulflllmenL by
Lhe oLher parLy of hls parL of Lhe presLaLlon, resclnd Lhe conLracL or seek
fulflllmenL.
Art. 1187 - ketroact|ve Lffects of the Iu|f|||ment of a Suspens|ve Cond|t|on
1he effecLs of a condlLlonal obllgaLlon Lo glve, once Lhe condlLlon has been fulfllled,
shall reLroacL Lo Lhe day of Lhe consLlLuLlon of Lhe obllgaLlon. neverLheless, when
Lhe obllgaLlon lmposes reclprocal presLaLlons upon Lhe parLles, Lhe frulLs and
lnLeresLs durlng Lhe pendency of Lhe condlLlon shall be deemed Lo have been
muLually compensaLed. lf Lhe obllgaLlon ls unllaLeral, Lhe debLor shall approprlaLe
Lhe frulLs and lnLeresLs recelved, unless from Lhe naLure and clrcumsLances of Lhe
obllgaLlon lL should be lnferred LhaL Lhe lnLenLlon of Lhe person consLlLuLlng Lhe
same was dlfferenL.
ln obllgaLlons Lo do and noL Lo do, Lhe courLs shall deLermlne, ln each case, Lhe
reLroacLlve effecL of Lhe condlLlon LhaL has been complled wlLh. (1120)
resupposes Lhe happenlng of a suspenslve condlLlon.
1he effecL of a condlLlonal obllgaLlon Lo glve reLroacLs Lo Lhe day of Lhe
consLlLuLlon of Lhe obllgaLlon.
o 1he efflcacy of Lhe obllgaLlon ls merely suspended or held ln
abeyance unLll Lhe condlLlon ls fulfllled.
8esoluLory condlLlon - Lhe fulflllmenL of Lhe evenL exLlngulshes Lhe
obllgaLlon, hence reLroacLlvlLy ls noL relevanL.

SlLuaLlons conLemplaLed:
1. kec|proca| ob||gat|ons - Lhe frulLs and lnLeresLs durlng Lhe pendency of
Lhe condlLlon shall be deemed Lo have been muLually compensaLed.
lrulLs on Lhe ob[ecL of presLaLlon (from debLor) and Lhe lnLeresL
on Lhe paymenL (from credlLor) lncurred durlng Lhe pendency of
Lhe condlLlon need noL be dellvered.

26
2. Un||atera| ob||gat|ons - Lhe debLor or obllgor shall approprlaLe Lhe frulLs
and lnLeresLs recelved, unless from Lhe naLure and clrcumsLances of Lhe
obllgaLlon lL should be lnferred LhaL Lhe lnLenLlon of Lhe person
consLlLuLlng Lhe same ls dlfferenL.
Any frulLs or lnLeresLs lncurred by Lhe ob[ecL of presLaLlon shall
belong Lo Lhe obllgor, prlor Lo Lhe fulflllmenL of Lhe condlLlon.
3. Cb||gat|ons not to do - courLs shall deLermlne Lhe reLroacLlve effecL of Lhe
fulfllled condlLlon.
Art. 1188 - k|ghts end|ng Iu|f|||ment of Suspens|ve Cond|t|on
1he credlLor may, before Lhe fulflllmenL of Lhe condlLlon, brlng Lhe approprlaLe
acLlons for Lhe preservaLlon of hls rlghL.
1he debLor may recover whaL durlng Lhe same Llme he has pald by mlsLake ln case
of a suspenslve condlLlon. (1121a)
1. CredlLor - can flle an ln[uncLlon sulL Lo sLop Lhe debLor from allenaLlng hls
properLy whlch ls supposed Lo be glven Lo Lhe credlLor once a parLlcular
condlLlon ls fulfllled.
2. uebLor - can recover whaL has been pald by mlsLake when Lhe obllgaLlon ls
noL yeL due and demandable.
o A case of soluLlo lndeblLl
Art. 1189 - Loss, Deter|orat|on or Improvement end|ng the Cond|t|on
When Lhe condlLlons have been lmposed wlLh Lhe lnLenLlon of suspendlng Lhe
efflcacy of an obllgaLlon Lo glve, Lhe followlng rules shall be observed ln case of Lhe
lmprovemenL, loss or deLerloraLlon of Lhe Lhlng durlng Lhe pendency of Lhe
condlLlon:
(1) lf Lhe Lhlng ls losL wlLhouL Lhe faulL of Lhe debLor, Lhe obllgaLlon shall be
exLlngulshed,
(2) lf Lhe Lhlng ls losL Lhrough Lhe faulL of Lhe debLor, he shall be obllged Lo pay
damages, lL ls undersLood LhaL Lhe Lhlng ls losL when lL perlshes, or goes ouL of
commerce, or dlsappears ln such a way LhaL lLs exlsLence ls unknown or lL cannoL be
recovered,
(3) When Lhe Lhlng deLerloraLes wlLhouL Lhe faulL of Lhe debLor, Lhe lmpalrmenL ls
Lo be borne by Lhe credlLor,
(4) lf lL deLerloraLes Lhrough Lhe faulL of Lhe debLor, Lhe credlLor may choose
beLween Lhe resclsslon of Lhe obllgaLlon and lLs fulflllmenL, wlLh lndemnlLy for
damages ln elLher case,
(3) lf Lhe Lhlng ls lmproved by lLs naLure, or by Llme, Lhe lmprovemenL shall lnure Lo
Lhe beneflL of Lhe credlLor,
(6) lf lL ls lmproved aL Lhe expense of Lhe debLor, he shall have no oLher rlghL Lhan
LhaL granLed Lo Lhe usufrucLuary. (1122)
lnvolves Lhe presLaLlon Lo glve a deLermlnaLe Lhlng whlch ls sub[ecL Lo a
suspenslve condlLlon
o ln Lhe case of resoluLory condlLlons, ArL. 1170, 1173 and 1174
shall apply.
ueflnlLlons:
1. Loss - when a Lhlng perlshes (physlcal loss), goes ouL of commerce
(legal loss) or when a Lhlng dlsappears ln such a way LhaL lLs
exlsLence ls unknown (clvll loss).
2. Deter|orat|on - a Lhlng deLerloraLes when lLs value ls reduced or
lmpalred wlLh or wlLhouL Lhe faulL of Lhe debLor.
! 1he cholce of Lhe remedles Lo be pursued, wheLher
resclsslon plus damages or fulflllmenL plus damages,
belongs Lo Lhe credlLor regardless of Lhe degree of
deLerloraLlon caused by Lhe debLor.
! lf Lhe deLerloraLlon caused by Lhe debLor ls so grave LhaL
Lhe ob[ecL goes ouL of commerce, lL can be consldered
losL and Lhe credlLor can seek damages from Lhe debLor.
3. Improvement - a Lhlng ls lmproved when lLs value ls lncreased or
enhanced by naLure or by Llme, or aL Lhe expense of Lhe debLor or
credlLor.
! Usufruct - glves a rlghL Lo en[oy Lhe properLy of anoLher
wlLh Lhe obllgaLlon of preservlng lLs form and subsLance
unless Lhe LlLle consLlLuLlng lL or Lhe law oLherwlse
provldes.


27
8ules ln case of loss, deLerloraLlon or lmprovemenL of Lhe Lhlng durlng
pendency of suspenslve condlLlon:
W|thout fau|t]part|c|pat|on
of the debtor
W|th fau|t]part|c|pat|on
of the debtor
LCSS
CbllgaLlon ls exLlngulshed
(forLulLous evenL)
uebLor shall pay damages
DL1LkICkA1ICN
CredlLor shall bear
lmpalrmenL
CredlLor may choose
resclsslon of Lhe obllgaLlon
or lLs fulflllmenL, plus
damages
IMkCVLMLN1
CredlLor shall en[oy Lhe
beneflLs
uebLor shall only have
usufrucLuary rlghLs

Art. 1190 - Lffects of Iu|f|||ment of a keso|utory Cond|t|on
When Lhe condlLlons have for Lhelr purpose Lhe exLlngulshmenL of an obllgaLlon Lo
glve, Lhe parLles, upon Lhe fulflllmenL of sald condlLlons, shall reLurn Lo each oLher
whaL Lhey have recelved.
ln case of Lhe loss, deLerloraLlon or lmprovemenL of Lhe Lhlng, Lhe provlslons whlch,
wlLh respecL Lo Lhe debLor, are lald down ln Lhe precedlng arLlcle shall be applled Lo
Lhe parLy who ls bound Lo reLurn.
As for Lhe obllgaLlons Lo do and noL Lo do, Lhe provlslons of Lhe second paragraph of
ArLlcle 1187 shall be observed as regards Lhe effecL of Lhe exLlngulshmenL of Lhe
obllgaLlon. (1123)
! Cnce a reso|utory cond|t|on ls fulfllled, Lhe obllgaLlon ls exLlngulshed and
Lhere musL be resLlLuLlon of whaL has been obLalned.
! ln Lhe case of loss, deLerloraLlon or lmprovemenL of Lhe Lhlng durlng Lhe
pendency of Lhe resoluLory condlLlon, ArL. 1189 shall apply.
! ln obllgaLlons Lo do and noL Lo do, Lhe courLs shall deLermlne Lhe effecL of
Lhe exLlngulshmenL of Lhe obllgaLlon.
Art. 1191 - kemed|es |n kec|proca| Cb||gat|ons
1he power Lo resclnd obllgaLlons ls lmplled ln reclprocal ones, ln case one of Lhe
obllgors should noL comply wlLh whaL ls lncumbenL upon hlm.
1he ln[ured parLy may choose beLween Lhe fulflllmenL and Lhe resclsslon of Lhe
obllgaLlon, wlLh Lhe paymenL of damages ln elLher case. Pe may also seek
resclsslon, even afLer he has chosen fulflllmenL, lf Lhe laLLer should become
lmposslble.
1he courL shall decree Lhe resclsslon clalmed, unless Lhere be [usL cause auLhorlzlng
Lhe flxlng of a perlod.
1hls ls undersLood Lo be wlLhouL pre[udlce Lo Lhe rlghLs of Lhlrd persons who have
acqulred Lhe Lhlng, ln accordance wlLh ArLlcles 1383 and 1388 and Lhe MorLgage
Law. (1124)
kec|proca| ob||gat|ons - Lhe obllgaLlon of one ls a resoluLory condlLlon of
Lhe oLher, Lhe non-fulflllmenL of whlch enLlLles Lhe oLher Lo resclnd Lhe
conLracL. 5ooqcoo v. lAc
kemed|es - fulflllmenL of Lhe obllgaLlon or resclsslon plus damages.
o 1he ln[ured parLy may also seek resclsslon even afLer he has
chosen fulflllmenL.
o Ateolo v. cA - Lhe aggrleved parLy who opLed for Lhe fulflllmenL of
Lhe obllgaLlon was also enLlLled Lo damages.
o Aysoo 5lmoo v. AJomos - where boLh helrs of Lhe deceased
owner and a buyer of a properLy won cases agalnsL a seller, and
boLh flled for Lhe dellvery of such properLy, Lhe buyer's acLlon for
resclsslon and damages was proper conslderlng LhaL Lhe helrs
already had possesslon of Lhe properLy.
o 5ly v. cA - Lhe law does noL auLhorlze Lhe ln[ured parLy Lo resclnd
Lhe obllgaLlon and aL Lhe same Llme seek lLs parLlal fulflllmenL
lnsLead of collecLlng damages.

kesc|ss|on - Lo declare Lhe conLracL vold aL lLs lncepLlon and Lo puL an end Lo lL as
Lhough lL never was.
redlcaLed on Lhe breach of falLh by any of Lhe parLles Lo a conLracL LhaL
vlolaLes Lhe reclproclLy beLween Lhem.
1he power Lo resclnd ls noL absoluLe and musL be based on a serlous or
substant|a| breach of an ob||gat|on as Lo defeaL Lhe ob[ecL of Lhe parLles ln
maklng Lhe agreemenL.
o A mere casual breach does noL [usLlfy resclsslon of Lhe conLracL.
o 1he quesLlon of wheLher a breach of a conLracL ls subsLanLlal
depends upon Lhe aLLendanL clrcumsLances.


28
Cases:
o lblllpploe Amosemeot otetptlses loc. v. NotlvlJoJ - LhaL Lhere
were Llmes" when Lhe [ukebox dld noL work dld noL consLlLuLe Lhe
subsLanLlal breach sufflclenL Lo effecL a resclsslon.
o 1oo v. cA - prlvaLe respondenLs have subsLanLlally complled wlLh
Lhe obllgaLlon. 1lme noL belng of essence, a sllghL delay on Lhe
parL of Lhe prlvaLe respondenL ls noL sufflclenL ground for Lhe
resoluLlon of Lhe agreemenL.
o velotJe v. cA - alLhough a sllghL delay ln paymenL of 1 monLh may
be a casual breach conslderlng LhaL Llme ls noL of Lhe essence,
pre-condlLlons Lo pay by Lhe debLor lefL Lhe credlLor wlLh no
cholce buL Lo opL for resclsslon.
o 5ootos v. cA - lf Lhe conLracL lnvolved ls a conLracL Lo sell, Lhe
LermlnaLlon ls noL a resclsslon under ArL. 1191, buL an
enforcemenL of Lhe conLracL.

lorms of power Lo resclnd:
a. Imp||ed power to resc|nd - can only be enforced Lhrough courL acLlon, ln
Lhe absence of sLlpulaLlon Lo Lhe conLrary.
o 1he declslon of Lhe courL ls Lhe revocatory act of resclsslon
o CourL shall decree Lhe resclsslon clalmed unless Lhere ls [usL
cause Lo auLhorlze flxlng a perlod.
! komoo v. cA - lf Lhe buyer pald wlLhln 60 days accordlng
Lo Lhe Lerms, Lhere would have been [usL cause Lo granL
an exLenslon.
! ceottol lblllpploe uolvetslty v. cA - no [usL cause, flxlng
of a perlod would be a mere LechnlcallLy and formallLy
LhaL would serve no purpose Lhan Lo delay or lead Lo an
unnecessary and expenslve mulLlpllcaLlon of sulLs.
b. Lxpress un||atera| extra[ud|c|a| st|pu|at|on to resc|nd - power Lo resclnd
need noL be lmplled ln all cases.
o arLles may sLlpulaLe LhaL Lhe vlolaLlon of Lhe Lerms of Lhe
conLracL shall cause Lhe cancellaLlon, LermlnaLlon or resclsslon
Lhereof even wlLhouL courL lnLervenLlon
o uolvetslty of tbe lblllpploes v. ue los Aoqeles - sLlpulaLlon ls
always provlslonal, sub[ecL Lo scruLlny and revlew by Lhe proper
courL. noLlce musL always be glven Lo Lhe defaulLer before
resclsslon can Lake effecL
o ue looo v. Abtlqo - when Lhere ls an express sLlpulaLlon Lo
resclsslon, any courL declslon valldaLlng Lhe proprleLy of Lhe
resclsslon made ls noL Lhe revocaLory acL of resclsslon buL mere|y
dec|aratory or an aff|rmat|on of Lhe revocaLlon.
o loloy loc. v. clove - sLlpulaLlon whlch sLaLes LhaL Lhe seller may
declare Lhe conLracL cancelled wlLhouL noLlce ls vold.
o Ilsoo v. cA - sendlng a noLlce Lo Lhe buyer ls an lndlspensable acL.
! noLlce - revocatory act ln express sLlpulaLlon Lo resclnd.

Art. 1192 - 8reach by 8oth art|es
ln case boLh parLles have commlLLed a breach of Lhe obllgaLlon, Lhe llablllLy of Lhe
flrsL lnfracLor shall be equlLably Lempered by Lhe courLs. lf lL cannoL be deLermlned
whlch of Lhe parLles flrsL vlolaLed Lhe conLracL, Lhe same shall be deemed
exLlngulshed, and each shall bear hls own damages. (n)
I|rst |nfractor known - subsequenLly, Lhe oLher also vlolaLed hls parL of
Lhe obllgaLlon. 1he llablllLy of Lhe flrsL lnfracLor should be equlLably
reduced.
I|rst |nfractor cannot be determ|ned - obllgaLlon shall be deemed
exLlngulshed and shall bear hls own damages.

"#$%&'( :* + '7648054319 ;45< 0 ,/.432

Art. 1193 - Cb||gat|ons w|th a er|od
CbllgaLlons for whose fulflllmenL a day cerLaln has been flxed, shall be demandable
only when LhaL day comes.
CbllgaLlons wlLh a resoluLory perlod Lake effecL aL once, buL LermlnaLe upon arrlval
of Lhe day cerLaln.
A day cerLaln ls undersLood Lo be LhaL whlch musL necessarlly come, alLhough lL
may noL be known when.
lf Lhe uncerLalnLy conslsLs ln wheLher Lhe day wlll come or noL, Lhe obllgaLlon ls
condlLlonal, and lL shall be regulaLed by Lhe rules of Lhe precedlng SecLlon. (1123a)

29
er|od - a fuLure and cerLaln evenL upon Lhe arrlval of whlch Lhe obllgaLlon
sub[ecL Lo lL elLher arlses or ls LermlnaLed. lL ls a day whlch musL
necessarlly come (llke nexL ChrlsLmas), alLhough lL may noL be known
when (llke Lhe deaLh of a person).
Cb||gat|on w|th a per|od - an obllgaLlon consLlLuLed aL a much earller daLe
buL lLs effecLlvlLy only commences on a cerLaln fuLure perlod of Llme.
Suspens|ve per|od - glves rlse Lo Lhe effecLlvlLy of Lhe obllgaLlon.
o Colte v. loooclet - where Lhe balance was Lo be pald from and
ouL of Lhe flrsL leLLer of credlL coverlng Lhe flrsL shlpmenL of lron
derlved from Lhe local sale of lron by Lhe cllenL, Lhe sLlpulaLlon ls a
suspenslve perlod noL a suspenslve condlLlon.
o A suspenslve condlLlon ls comparaLlvely more onerous Lhan a
suspenslve perlod.
keso|utory per|od - glves rlse Lo Lhe exLlngulshmenL of Lhe obllgaLlon.
Art. 1194 - Loss, Deter|orat|on or Improvement before Day Certa|n
ln case of loss, deLerloraLlon or lmprovemenL of Lhe Lhlng before Lhe arrlval of Lhe
day cerLaln, Lhe rules ln ArLlcle 1189 shall be observed. (n)
1he same rules ln ArLlcle 1189 shall apply ln obllgaLlons sub[ecL Lo a suspenslve or a
resoluLory perlod.
Art. 119S - Debtor May kecover ayment
AnyLhlng pald or dellvered before Lhe arrlval of Lhe perlod, Lhe obllgor belng
unaware of Lhe perlod or bellevlng LhaL Lhe obllgaLlon has become due and
demandable, may be recovered, wlLh Lhe frulLs and lnLeresLs. (1126a)
Applles only Lo obllgaLlons Lo glve
o 1he provlslon may noL be applled ln obllgaLlons Lo do or noL Lo do
because lL ls physlcally lmposslble Lo recover a servlce rendered.
Slmllar Lo ArL. 1188 paragraph 2 where a credlLor cannoL un[usLly enrlch
hlmself by reLalnlng paymenL whlch ls noL due.
8urden of proof of paylng by mlsLake ls on Lhe debLor. uebLor ls presumed
Lo be aware of Lhe perlod.
lf Lhe obllgor dellvered Lhe ob[ecL before Lhe arrlval of Lhe perlod, and
upon arrlval of Lhe perlod, Lhe obllgee ls ln Lhe possesslon of Lhe ob[ecL,
Lhe obllgor can only recover Lhe frulLs and lnLeresLs accrulng from Lhe Llme
of Lhe dellvery up Lo Lhe arrlval of Lhe perlod.
klnds of lrulLs: (n.l.C.)
o Natura| fru|ts - sponLaneous producLs of soll and Lhe young or
oLher producLs of anlmals
o Industr|a| fru|ts - produced by lads of any klnd Lhrough culLlvaLlon
or labor
o C|v|| fru|ts - derlved by vlrLue of a [urldlcal relaLlon
Art. 1196 - er|od 8enef|ts 8oth Cred|tor and Debtor
Whenever ln an obllgaLlon a perlod ls deslgnaLed, lL ls presumed Lo have been
esLabllshed for Lhe beneflL of boLh Lhe credlLor and Lhe debLor, unless from Lhe
Lenor of Lhe same or oLher clrcumsLances lL should appear LhaL Lhe perlod has been
esLabllshed ln favor of one or of Lhe oLher. (1127)
Ceneral rule - Lhe presumpLlon of Lhe law ls LhaL Lhe perlod ls for Lhe
beneflL of boLh debLor and credlLor.
o letoooJez v. cA - a conLracL of lease ls a reclprocal conLracL. 1he
perlod of lease musL be deemed Lo have been agreed upon for
Lhe beneflL of boLh parLles.
LxcepLlon - when Lhe naLure of Lhe obllgaLlon or sLlpulaLlon of Lhe parLles
shows LhaL Lhe perlod was for Lhe beneflL of elLher parLy.
1he beneflL of Lhe perlod may be walved by Lhe person ln whose favor lL
was consLlLuLed.
o Abesomls v. wooJctoft wotks loc. - where Lhe obllgor lnformed
Lhe obllgee LhaL he wlll make an early dellvery of Lhe sub[ecL
porLlons of shlpmenL, Lhe obllgor was made llable for fallure Lo
make such dellvery. use of Lhe perlod was effecLlvely walved.
Art. 1197 - Court May I|x a er|od
lf Lhe obllgaLlon does noL flx a perlod, buL from lLs naLure and Lhe clrcumsLances lL
can be lnferred LhaL a perlod was lnLended, Lhe courLs may flx Lhe duraLlon Lhereof.
1he courLs shall also flx Lhe duraLlon of Lhe perlod when lL depends upon Lhe wlll of
Lhe debLor.
ln every case, Lhe courLs shall deLermlne such perlod as may under Lhe
clrcumsLances have been probably conLemplaLed by Lhe parLles. Cnce flxed by Lhe
courLs, Lhe perlod cannoL be changed by Lhem. (1128a)
8elaLed arLlcles:
Art. 1180 - when Lhe debLor blnds hlmself Lo pay when hls means permlL
hlm Lo do so

30
Art. 1191 par. 3 - lnsLead of lssulng a decree of resclsslon, Lhe courL may
auLhorlze Lhe flxlng of a perlod when Lhere ls [usL cause

resumpLlon - Lhe courL ls generally wlLhouL power Lo flx a perlod. lf Lhe obllgaLlon
does noL sLaLe a perlod and no perlod ls lnLended, Lhe courL ls noL auLhorlzed Lo flx
a perlod because lL has no rlghL Lo make conLracLs for parLles.

Cteqotlo Atooeto, loc. v. lbll. 5oqot stotes uevelopmeot co. ltJ.
2-step process:
1. 1he courL musL flrsL deLermlne LhaL Lhe obllgaLlon does noL flx a
perlod or LhaL a perlod ls made Lo depend upon Lhe wlll of Lhe
debLor, buL from Lhe naLure and clrcumsLances lL can be lnferred
LhaL a perlod was lnLended.
2. 1he courL musL declde whaL perlod was probably conLemplaLed
by Lhe parLles.
koJloweoltb lloooce compooy v. uel kosotlo - Lhe facL LhaL Lhe due daLe
was lefL blank does noL necessarlly mean LhaL paymenL was lefL on Lhe sole
wlll of Lhe debLor. 1he promlssory noLe lndlcaLed LhaL Lhe debL should be
amorLlzed monLhly ln lnsLallmenLs.
Art. 1198 - When Debtor Cannot Make Use of the er|od
1he debLor shall lose every rlghL Lo make use of Lhe perlod:
(1) When afLer Lhe obllgaLlon has been conLracLed, he becomes lnsolvenL,
unless he glves a guaranLy or securlLy for Lhe debL,
(2) When he does noL furnlsh Lo Lhe credlLor Lhe guaranLles or securlLles
whlch he has promlsed,
(3) When by hls own acLs he has lmpalred sald guaranLles or securlLles afLer
Lhelr esLabllshmenL, and when Lhrough a forLulLous evenL Lhey dlsappear,
unless he lmmedlaLely glves new ones equally saLlsfacLory,
(4) When Lhe debLor vlolaLes any underLaklng, ln conslderaLlon of whlch Lhe
credlLor agreed Lo Lhe perlod,
(3) When Lhe debLor aLLempLs Lo abscond. (1129a)

When debLor cannoL make use of Lhe perlod: (C.A.v.l
2
.)
1. When debLor becomes |nso|vent
o unless he glves a guaranLy or securlLy for Lhe debL - a debLor may
ask a Lhlrd person Lo guaranLee hls debL or puL up hls house as
collaLeral.
o lnsolvency need noL be [udlclally declared.
2. When debLor does not furn|sh the guarant|es or secur|t|es prom|sed
o SecurlLles can Lake Lhe form of real-esLaLe morLgages or pledges
3. When guaranLles or securlLles glven have been |mpa|red or have
d|sappeared Lhrough Lhe debLor's acLs
o unless he lmmedlaLely glves new ones equally saLlsfacLory.
o Colte v. loooclet - because of Lhe company's fallure Lo renew Lhe
bond of a sureLy or else replace lL wlLh an equlvalenL guaranLee,
Lhe debLor has forfelLed lL rlghL Lo Lhe perlod maklng Lhe
obllgaLlon lmmedlaLely demandable.
o 1he debLor loses Lhe beneflL of Lhe perlod even lf Lhe guaranLles
and securlLles dlsappear Lhrough a forLulLous evenL.
4. When Lhe debLor v|o|ates any undertak|ng, ln conslderaLlon of whlch Lhe
credlLor agrees Lo Lhe perlod
o Alleo v. ltovloce of Alboy
Construct|ve wa|ver of per|od - when Lhe owner prevenLs Lhe
perlod from arrlvlng. Pence, Lhe obllgor shall be allowed Lo
furnlsh Lhe obllgaLlon wlLhln reasonable Llme.
3. When Lhe debLor aLLempLs Lo abscond
o A mere aLLempL by Lhe debLor Lo flee from hls obllgaLlons, or Lo
move away Lo evade paymenL of hls lndebLedness, ls sufflclenL
ground Lo demand from hlm lmmedlaLely.


31
"#$%&'( =* + >65/.1054?/ '7648054319

Art. 1199 - A|ternat|ve Cb||gat|ons
A person alLernaLlvely bound by dlfferenL presLaLlons shall compleLely perform one
of Lhem.
1he credlLor cannoL be compelled Lo recelve parL of one and parL of Lhe oLher
underLaklng. (1131)
"D|fferent restat|ons" - refers Lo boLh sLrlcL and loose sense of Lhe word.
o LlLher dlfferenL klnds of presLaLlons (1 Lo glve, and 1 Lo do)
o Cr merely dlfferenL ob[ecLs (glve a car, or glve a boaL)
arLlal erformance of dlfferenL presLaLlons does noL fulflll Lhe obllgaLlon,
unless Lhe credlLor accepLs such parLlal performance as compleLe
performance.
o uebLor musL choose compleLe performance of one or Lhe oLher.
lf all buL one of Lhe alLernaLlves becomes legally lmposslble, obllgaLlon
becomes slmple.
o Loan payable ln esos or uSu, alLernaLlve obllgaLlon ceased Lo
exlsL when uSu was lllegal (!apanese Llme)
Art. 1200 - Debtor's k|ght of Cho|ce
1he rlghL of cholce belongs Lo Lhe debLor, unless lL has been expressly granLed Lo
Lhe credlLor.
1he debLor shall have no rlghL Lo choose Lhose presLaLlons whlch are lmposslble,
unlawful or whlch could noL have been Lhe ob[ecL of Lhe obllgaLlon. (1132)
Any doubL as Lo whom Lhe cholce ls glven as Lo whlch presLaLlon Lo comply
wlLh ls always consLrued ln favor of Lhe debLor.
Ceneral rule - debLor always has cholce.
o LxcepLlon - when such cholce ls expressly granLed Lo Lhe credlLor.
kestr|ct|on on Debtor's ower of Cho|ce - Lhe law, Lhe lnLenLlon of Lhe
parLles, and Lhe realm of posslblllLy.
uebLor has no rlghL Lo choose Lhose presLaLlons whlch are:
o Imposs|b|e - Lx. fly Lo Lhe moon, Lurn waLer lnLo wlne,
o Un|awfu| - Lx. sLeal a car, deal drugs
o Cou|d not have been the ob[ect of the ob||gat|on
Lx.
A owes 8 30,000. Pe can elLher pay by glvlng 8 hls
horse, hls plano, or 30,000 ln cash.
! A has Lwo horses, one worLh 30,000 and anoLher crap
one worLh 3,000. Pe cannoL choose Lhe 3,000 horse
because lL could noL have been Lhe ob[ecL of Lhe
obllgaLlon.

Art. 1201 - Cho|ce Commun|cated
1he cholce shall produce no effecL excepL from Lhe Llme lL has been communlcaLed.
(1133)
CredlLor ls enLlLled Lo be noLlfled of Lhe cholce.
Mode of communlcaLlon may vary - lL ls also Lhe debLor's cholce
Cholce ls glven effecL only upon communlcaLlon Lo Lhe credlLor.
CredlLor has no rlghL Lo oppose Lhe cholce, provlded such cholce of
presLaLlon ls noL unlawful, lmposslble, or ouLslde whaL Lhe parLles wanLed.
Art. 1202 - Cn|y Cne Cho|ce |s ract|cab|e
1he debLor shall lose Lhe rlghL of cholce when among Lhe presLaLlons whereby he ls
alLernaLlvely bound, only one ls pracLlcable. (1134)
8lghL of cholce ls glven Lo Lhe debLor - accordlng Lo law
o 1hls rlghL lmplles LhaL Lhe debLor can desLroy/lmpalr all oLher
cholces as long as one remalns
ract|cab|e - capable of belng done, feaslble.
o 1hus, when only one of Lhe cholces ls pracLlcable, Lhe debLor loses
hls rlghL of cholce.
o A presLaLlon can be posslble and lawful, buL noL pracLlcable.
Lx. klsslng a hlghly conLaglous leper - posslble, and noL
lllegal, buL lmpracLlcable and Lhus cannoL be chosen by
debLor.
Art. 1203 - Debtor Cannot Choose due to Cred|tor's Acts
lf Lhrough Lhe credlLor's acLs Lhe debLor cannoL make a cholce accordlng Lo Lhe
Lerms of Lhe obllgaLlon, Lhe laLLer may resclnd Lhe conLracL wlLh damages. (n)
CredlLor cannoL sLop Lhe debLor from fulfllllng hls obllgaLlon.

32
lf credlLor's own acLs resulL ln Lhe loss of a cholce, Lhe debLor can (he ls noL
bound Lo do so) resclnd wlLh a rlghL Lo damages.
Lx. A can pay hls debL Lo 8 by glvlng a cerLaln cellphone, glvlng a
cerLaln horse, or danclng ln a show.
o lf Lhe credlLor Lhrough hls own acLs makes any of Lhese cholces
lmposslble:
! kllls horse
! uesLroys phone
! 8urns club
o uebLor has Lhe opLlon Lo resclnd wlLh damages.
As long as Lhe credlLor makes one of Lhe cholces lmposslble, Lhe debLor
may resclnd. (conLrasL Lhls wlLh nexL arLlcle)
Art. 1204 - 1hrough Debtor's Iau|t, A|| Cho|ces are Lost
1he credlLor shall have a rlghL Lo lndemnlLy for damages when, Lhrough Lhe faulL of
Lhe debLor, all Lhe Lhlngs whlch are alLernaLlvely Lhe ob[ecL of Lhe obllgaLlon have
been losL, or Lhe compllance of Lhe obllgaLlon has become lmposslble.
1he lndemnlLy shall be flxed Laklng as a basls Lhe value of Lhe lasL Lhlng whlch
dlsappeared, or LhaL of Lhe servlce whlch lasL became lmposslble.
uamages oLher Lhan Lhe value of Lhe lasL Lhlng or servlce may also be awarded.
(1133a)
uebLor wlll noL be llable for loss of cholces, even lf obllgaLlon ceases Lo
become alLernaLlve and becomes slmple.
o Pe has Lhe rlghL of cholce, afLer all, and Lhe credlLor cannoL
complaln.
Powever, when all of Lhe alLernaLlve presLaLlons are rendered lmposslble,
Lhe credlLor ls enLlLled Lo damages.
1he value of Lhe damages wlll be based on Lhe value of Lhe lasL cholce Lo
be losL/rendered lmposslble, be lL a servlce or a Lhlng Lo glve.
ConLrasL wlLh prevlous provlslon:
o CredlLor only needs Lo render lmposslble aL leasL one of Lhe
presLaLlons.
o uebLor musL lmpalr all of Lhe presLaLlons

Art. 120S - Cho|ce G|ven to Cred|tor
When Lhe cholce has been expressly glven Lo Lhe credlLor, Lhe obllgaLlon shall cease
Lo be alLernaLlve from Lhe day when Lhe selecLlon has been communlcaLed Lo Lhe
debLor.
unLll Lhen Lhe responslblllLy of Lhe debLor shall be governed by Lhe followlng rules:
(1) lf one of Lhe Lhlngs ls losL Lhrough a forLulLous evenL, he shall perform Lhe
obllgaLlon by dellverlng LhaL whlch Lhe credlLor should choose from among Lhe
remalnder, or LhaL whlch remalns lf only one subslsLs,
(2) lf Lhe loss of one of Lhe Lhlngs occurs Lhrough Lhe faulL of Lhe debLor, Lhe
credlLor may clalm any of Lhose subslsLlng, or Lhe prlce of LhaL whlch, Lhrough Lhe
faulL of Lhe former, has dlsappeared, wlLh a rlghL Lo damages,
(3) lf all Lhe Lhlngs are losL Lhrough Lhe faulL of Lhe debLor, Lhe cholce by Lhe
credlLor shall fall upon Lhe prlce of any one of Lhem, also wlLh lndemnlLy for
damages.
1he same rules shall be applled Lo obllgaLlons Lo do or noL Lo do ln case one, some
or all of Lhe presLaLlons should become lmposslble. (1136a)
ConfermenL of rlghL of cholce Lo Lhe credlLor musL always be express.
CbllgaLlon ceases Lo be alLernaLlve when cholce ls communlcaLed Lo Lhe
debLor.
unLll communlcaLlon ls done, law provldes rules as Lo Lhe debLor's
responslblllLy:
o Cne of the th|ngs |s |ost through a fortu|tous event
! uebLor dellvers whaL credlLor chooses from Lhe
remalnder, or Lhe only one remalnlng.
o Loss of one of the th|ngs occurs through fau|t of the debtor
CredlLor may clalm any of Lhe remalnlng opLlons.
CredlLor may clalm Lhe prlce of Lhe Lhlng whlch
dlsappeared.
8egardless of whaL Lhe credlLor plcks, he has a rlghL Lo
damages.
o If a|| th|ngs are |ost through fau|t of the debtor
CredlLor chooses Lhe prlce of any one of Lhem.
Also wlLh an lndemnlLy for damages.


33
Art. 1206 - Iacu|tat|ve Cb||gat|ons
When only one presLaLlon has been agreed upon, buL Lhe obllgor may render
anoLher ln subsLlLuLlon, Lhe obllgaLlon ls called faculLaLlve.
1he loss or deLerloraLlon of Lhe Lhlng lnLended as a subsLlLuLe, Lhrough Lhe
negllgence of Lhe obllgor, does noL render hlm llable. 8uL once Lhe subsLlLuLlon has
been made, Lhe obllgor ls llable for Lhe loss of Lhe subsLlLuLe on accounL of hls
delay, negllgence or fraud. (n)
Iacu|tat|ve Cb||gat|on - only one presLaLlon has been agreed upon, buL
obllgor may render anoLher ln subsLlLuLlon
Lx. l wlll glve you my plano, buL l may glve you my 1v as a subsLlLuLe.
1hus, only Lhe plano ls due and only Lhe loss of Lhls plano makes me
llable for damages."
CredlLor cannoL refuse Lhe subsLlLuLe, unless such ls unlawful.
Cnce subsLlLuLlon has been made, obllgor ls llable for lLs loss.

"#$%&'( @* + A3415 012 "36420.B '7648054319

Art. 1207 - So||dary Cb||gat|ons
1he concurrence of Lwo or more credlLors or of Lwo or more debLors ln one and Lhe
same obllgaLlon does noL lmply LhaL each one of Lhe former has a rlghL Lo demand,
or LhaL each one of Lhe laLLer ls bound Lo render, enLlre compllance wlLh Lhe
presLaLlon. 1here ls a solldary llablllLy only when Lhe obllgaLlon expressly so sLaLes,
or when Lhe law or Lhe naLure of Lhe obllgaLlon requlres solldarlLy. (1137a)
So||dary Cb||gat|on - a slLuaLlon where Lhere are debLs lncurred by 2 or
more debLors ln favor of 2 or more credlLors, and Lhe rlghL ls glven Lo
anyone, some or all of credlLors, Lo demand Lhe saLlsfacLlon of Lhe 1C1AL
obllgaLlon from anyone, some, or all of Lhe debLors.
o Anyone of Lhe credlLors may demand fulflllmenL of Lhe enLlre
obllgaLlon from any one of Lhe debLor, noL [usL for Lhe share of
LhaL debLor.
o Cnly exlsLs when lL ls expressly sLaLed, or when law or naLure of
obllgaLlon so requlres.
koopolllo v. cA - Lhe followlng Lerms lndlcaLe a solldary obllgaLlon:
o lndlvldually has Lhe same meanlng as collecLlvely", separaLely",
dlsLlncLly", eLc.
Lx. An agreemenL (where Lhe parLles agree) Lo be"
lndlvldlaully llable" creaLes a several obllgaLlon.
o CLher words/phrases denoLlng several obllgaLlon
!unLos o sepadaramenLe
Mancomun o lnsolldum
o When a conLracL says l promlse" (slngular) and ls slgned by Lwo
or more promlsors
Art. 1208 - Io|nt Cb||gat|ons
lf from Lhe law, or Lhe naLure or Lhe wordlng of Lhe obllgaLlons Lo whlch Lhe
precedlng arLlcle refers Lhe conLrary does noL appear, Lhe credlL or debL shall be
presumed Lo be dlvlded lnLo as many shares as Lhere are credlLors or debLors, Lhe
credlLs or debLs belng consldered dlsLlncL from one anoLher, sub[ecL Lo Lhe 8ules of
CourL governlng Lhe mulLlpllclLy of sulLs. (1138a)
resumpLlon of law - obllgaLlon ls always a [olnL one.
o uo lok leooq v. Neqotto - ln Lhe absence of facLs LhaL Lhe
defendanLs made Lhemselves lndlvldually llable for Lhe whole
amounL, Lhey are only llable for Lhelr share ln Lhe debL.
Io|nt Cb||gat|on - an obllgaLlon where Lhe debLors are only bound Lo pay
Lhelr share and Lhe credlLors can only clalm Lhelr share.
Lx. A and 8 owe C and u 1000.
o C can collecL 230 each from A and 8.
o u can also collecL 230 each from A and 8.
o 8uL lf A owns only 1/3 of Lhe lndebLedness, and C only 1/3 of
Lhe credlL:
o CredlLors and debLors shall collecL and pay only ln
proporLlon Lo whaL Lhey own and owe.
o ln Lhls case, A only pays 1/3 of Lhe 1000, spllL such LhaL
C geLs 1/3 and u geLs 4/3.
Art. 1209 - When D|v|s|on |s Imposs|b|e
lf Lhe dlvlslon ls lmposslble, Lhe rlghL of Lhe credlLors may be pre[udlced only by
Lhelr collecLlve acLs, and Lhe debL can be enforced only by proceedlng agalnsL all Lhe
debLors. lf one of Lhe laLLer should be lnsolvenL, Lhe oLhers shall noL be llable for hls
share. (1139)
Art. 1210 - Ind|v|s|b|||ty and So||dar|ty

34
1he lndlvlslblllLy of an obllgaLlon does noL necessarlly glve rlse Lo solldarlLy. nor
does solldarlLy of lLself lmply lndlvlslblllLy. (n)
lf dlvlslon of Lhe obllgaLlon ls lmposslble, and Lhe obllgaLlon ls [olnL, Lhe
credlLors musL acL collecLlvely
o Cne credlLor cannoL underLake an acL whlch wlll pre[udlce Lhe
oLhers, unless he ls auLhorlzed by Lhe oLhers Lo underLake such an
acL.
lf several debLors are obllged Lo glve an lndlvlslble obllgaLlon (llke a house)
all of Lhem musL be sued lf Lhey renege on Lhelr obllgaLlon.
o So lf one of Lhe debLors refuses Lo dellver Lhe house, Lhe
obllgaLlon ls Lurned lnLo a clalm for damages.
o A [olnL lndlvlslble obllgaLlon becomes a clalm for damages Lhe
momenL any one of Lhe debLors does noL comply wlLh Lhe
underLaklng.
o Pow wlll Lhe damages be dlvlded?
1hose debLors who were ready Lo fulflll Lhe obllgaLlon
are only llable for Lhelr correspondlng porLlon.
Lx. 3 debLors musL glve a house, and one refuses. ln
Lhe followlng clalm for damages, Lhe 2 debLors
who were golng Lo dellver Lhe house are each
only llable for 1/3 Lhe prlce of Lhe house.
1he debLor who ls responslble for Lhe damages clalm
may be llable for Lhe addlLlonal damages.
o uebLors shall noL be responslble for anoLher debLor who becomes
lnsolvenL.
SolldarlLy does noL mean lndlvlslblllLy and vlce versa.
o Solldary refers Lo naLure of Lhe obllgors and obllgees
o lndlvlslblllLy refers Lo naLure of Lhe presLaLlon
Art. 1211 - Not 8ound |n the Same Manner
SolldarlLy may exlsL alLhough Lhe credlLors and Lhe debLors may noL be bound ln Lhe
same manner and by Lhe same perlods and condlLlons. (1140)
SolldarlLy can sLlll exlsL even lf credlLors and debLors are bound ln dlfferenL
manners, or have dlfferenL condlLlons/perlods.
Lx. 1. A, 8 and C are solldarlly lndebLed Lo u for 13,000.
u can collecL Lhe whole amounL from anyone, 8u1 Lhe
debLor can only pay Lhe balance of Lhe debLs LhaL have
already maLured.
2. A due on Monday, 8 on 1ues, C on Wed.
u can collecL from any one of Lhem, buL can only collecL
3,000 on Monday (slnce only A's debL has maLured)

Art. 1212 - Acts of So||dary Cred|tors
Lach one of Lhe solldary credlLors may do whaLever may be useful Lo Lhe oLhers, buL
noL anyLhlng whlch may be pre[udlclal Lo Lhe laLLer. (1141a)
As menLloned before, solldary credlLors may noL do anyLhlng whlch may
pre[udlce Lhe oLhers.
Lx. 8efuslng paymenL when debLors are ready Lo pay ls pre[udlclal Lo Lhe
oLhers credlLors.
! 1hus, Lhe oLher credlLors can ask for damages.
1hey can, however, do Lhlngs LhaL may be useful for Lhe oLhers.
Lx. Oolsombloq v. cA - one of Lhe solldary credlLors flled a sulL for
collecLlon agalnsL Lhe solldary debLors. 1hls was held Lo be a useful
acL, and Lhus could be done [usL by one of Lhe credlLors.
Art. 1213 - Mutua| 1rust among So||dary Cred|tors
A solldary credlLor cannoL asslgn hls rlghLs wlLhouL Lhe consenL of Lhe oLhers. (n)
1he relaLlonshlp beLween Lhe solldary credlLors should be one of muLual
LrusL.
1o preserve Lhls - a solldary credlLor cannoL asslgn hls rlghLs Lo oLhers
wlLhouL consenL of Lhe oLhers. (Lhey mlghL noL know Lhe new co-credlLor
as well, for Lx. - Lhe LrusL may be losL)
Art. 1214 - Iud|c|a| or Lxtra[ud|c|a| Demand by a So||dary Cred|tor
1he debLor may pay any one of Lhe solldary credlLors, buL lf any demand, [udlclal or
exLra[udlclal, has been made by one of Lhem, paymenL should be made Lo hlm.
(1142a)
Ceneral 8ule - debLor may pay any of Lhe solldary credlLors.
o Powever, when demand ([udlclal or exLra[udlclal) ls made by one
of Lhe credlLors, paymenL should be made Lo he who demanded.

33
ayment to another cred|tor - Lhe obllgaLlon wlll noL be exLlngulshed,
paymenL ls lnvalld lnsofar as Lhe share of Lhe demandlng credlLor, ln case
Lhe oLher credlLor does noL glve lL.
Lx. A ls llable Lo pay 8 and C 10,000. lf 8 demands from A, A musL
pay Lo 8.
! lf A pays C, 8 ls sLlll enLlLled Lo hls share from A ln case C
does noL glve 8 hls share.
ALLy. Mel dlsagrees wlLh Lhls lnLerpreLaLlon - collecLlng paymenL ls
beneflclal Lo Lhe oLher credlLors and Lhus should be allowed.
lf Lhere are 2 or more debLors, only Lhe debLor upon whom demand ls
made ls bound Lo pay Lo Lhe speclflc credlLor who made Lhe demand.

Art. 121S - Lxt|ngu|shment by a So||dary Cred|tor
novaLlon, compensaLlon, confuslon or remlsslon of Lhe debL, made by any of Lhe
solldary credlLors or wlLh any of Lhe solldary debLors, shall exLlngulsh Lhe obllgaLlon,
wlLhouL pre[udlce Lo Lhe provlslons of ArLlcle 1219.
1he credlLor who may have execuLed any of Lhese acLs, as well as he who collecLs
Lhe debL, shall be llable Lo Lhe oLhers for Lhe share ln Lhe obllgaLlon correspondlng
Lo Lhem. (1143)
1hese are modes of exLlngulshlng obllgaLlons, Lo be dlscussed ln Lhe nexL
LlLle. 8rlefly, Lhey are:
1. Novat|on - change of credlLors, debLors, or prlnclpal condlLlon.
2. Compensat|on - Lwo persons are credlLors and debLors of each
oLher.
3. Confus|on - credlLor and debLor are merged ln Lhe same person.
4. kem|ss|on - condonaLlon of an obllgaLlon.
Any of Lhe solldary debLors can underLake Lhese opLlons wlLh any of Lhe
solldary debLors, and Lhus Lhe obllgaLlon wlll be exLlngulshed. Powever, he
who does Lhese acLs wlll be llable Lo hls fellow credlLors for Lhelr share ln
Lhe obllgaLlon.
Art. 1216 - k|ghts of Cred|tor Aga|nst So||dary Debtors
1he credlLor may proceed agalnsL any one of Lhe solldary debLors or some or all of
Lhem slmulLaneously. 1he demand made agalnsL one of Lhem shall noL be an
obsLacle Lo Lhose whlch may subsequenLly be dlrecLed agalnsL Lhe oLhers, so long as
Lhe debL has noL been fully collecLed. (1144a)
1hls relLeraLes Lhe rule LhaL any one or some or all of Lhe solldary debLors
may be made Lo pay Lhe debL, so long as lL has noL been fully collecLed.
1hus, proceedlngs agalnsL one of Lhe debLors wlll noL be a bar Lo any
furLher proceedlngs agalnsL anoLher, provlded LhaL Lhe debL ls sLlll
subslsLlng (aL Lhe end of Lhe day, lf Lhe debLors sLlll owe someLhlng, Lhen
Lhey musL pay lL - and slnce Lhe obllgaLlon ls solldary, Lhe credlLor can
clalm from anyone.)
Solldary credlLor has a rlghL Lo refuse part|a| payment - however, lf he
does accepL parLlal paymenL from one debLor, Lhls does noL bar hlm from
demandlng from Lhe oLhers Lhe resL of Lhe obllgaLlon.
Art. 1217 - ayment by So||dary Debtors
aymenL made by one of Lhe solldary debLors exLlngulshes Lhe obllgaLlon. lf Lwo or
more solldary debLors offer Lo pay, Lhe credlLor may choose whlch offer Lo accepL.
Pe who made Lhe paymenL may clalm from hls co-debLors only Lhe share whlch
corresponds Lo each, wlLh Lhe lnLeresL for Lhe paymenL already made. lf Lhe
paymenL ls made before Lhe debL ls due, no lnLeresL for Lhe lnLervenlng perlod may
be demanded.
When one of Lhe solldary debLors cannoL, because of hls lnsolvency, relmburse hls
share Lo Lhe debLor paylng Lhe obllgaLlon, such share shall be borne by all hls co-
debLors, ln proporLlon Lo Lhe debL of each. (1143a)
1hls arLlcle deals wlLh Lhe effecL of paymenL by solldary debLors, wlLh
regard Lo several relaLlonshlps.

1. 8etween so||dary debtors and cred|tor(s)
aymenL made by one of Lhe solldary debLors (paymenL ln full)
CredlLor ls glven a rlghL Lo choose whlch offer Lo accepL, lf Lhere
are more Lhan one debLors offerlng Lo pay.
2. Among the so||dary debtors
Pe who pald Lhe debL can demand relmbursemenL from hls co-
debLors for Lhelr proporLlonaLe shares (wlLh legal lnLeresL from
Lhe Llme LhaL he pald).
When one of Lhe debLors cannoL relmburse because he ls
lnsolvenL, Lhe oLher debLors wlll pay hls share, ln proporLlon wlLh
Lhelr respecLlve debLs.
3. Among the so||dary cred|tors

36
o 1he recelvlng credlLor (Lhe person who was pald) ls [olnLly llable
Lo Lhe oLhers for Lhelr correspondlng shares.

Art. 1218 - When ayment has rescr|bed or become I||ega|
aymenL by a solldary debLor shall noL enLlLle hlm Lo relmbursemenL from hls co-
debLors lf such paymenL ls made afLer Lhe obllgaLlon has prescrlbed or become
lllegal. (n)
lf a debLor pays afLer Lhe obllgaLlon ls prescrlbed or has become lllegal,
essenLlally, he ls paylng a non-exlsLenL debL.
o rescrlpLlon means LhaL Lhe cause of acLlon has already lapsed
and ceased Lo exlsL.
1hus, he cannoL demand LhaL hls co-debLors relmburse hlm for Lhelr
shares.
Art. 1219 - kem|ss|on of a So||dary Debtor's L|ab|||ty
1he remlsslon made by Lhe credlLor of Lhe share whlch affecLs one of Lhe solldary
debLors does noL release Lhe laLLer from hls responslblllLy Lowards Lhe co-debLors,
ln case Lhe debL had been LoLally pald by anyone of Lhem before Lhe remlsslon was
effecLed. (1146a)
Art. 1220 - kem|ss|on of the Who|e Cb||gat|on
1he remlsslon of Lhe whole obllgaLlon, obLalned by one of Lhe solldary debLors,
does noL enLlLle hlm Lo relmbursemenL from hls co-debLors. (n)
When a credlLor remlLs Lhe debL of one of Lhe solldary debLors, Lhe effecLs
depend on when such remlsslon was done.
o lf Lhe credlLor remlLs Lhe whole debL before paymenL was made,
Lhe person who convlnced Lhe credlLor Lo remlL cannoL clalm
anyLhlng from hls co-debLors, because he hasn'L pald anyLhlng.
o lf debL had been pald already, and Lhe credlLor ls convlnced Lo
condone Lhe debL, Lhls has no effecL. Powever, Lhe debLor who
pald can sLlll go afLer hls oLher co-debLors for Lhelr share.
1hls arLlcle ls only appllcable when Lhere ls one credlLor.
Lx. A and 8 are solldarlly llable Lo C for 1,000.
! C remlLs A's share.
! lf 8 pays C 1,000, he cannoL go afLer A for 300.
! C, however, has Lo reLurn 300 Lo 8.
! lf paymenL was made 8LlC8L remlsslon, A ls llable Lo 8
for 300 because Lhe remlsslon had no effecL.
Art. 1221 - Loss or Imposs|b|||ty of restat|on |n ke|at|on to So||dary
Debtors
lf Lhe Lhlng has been losL or lf Lhe presLaLlon has become lmposslble wlLhouL Lhe
faulL of Lhe solldary debLors, Lhe obllgaLlon shall be exLlngulshed.
lf Lhere was faulL on Lhe parL of any one of Lhem, all shall be responslble Lo Lhe
credlLor, for Lhe prlce and Lhe paymenL of damages and lnLeresL, wlLhouL pre[udlce
Lo Lhelr acLlon agalnsL Lhe gullLy or negllgenL debLor.
lf Lhrough a forLulLous evenL, Lhe Lhlng ls losL or Lhe performance has become
lmposslble afLer one of Lhe solldary debLors has lncurred ln delay Lhrough Lhe
[udlclal or exLra[udlclal demand upon hlm by Lhe credlLor, Lhe provlslons of Lhe
precedlng paragraph shall apply. (1147a)
1hls arLlcle provldes rules for when Lhe Lhlng Lo be dellvered ls loL, or when
Lhe presLaLlon becomes lmposslble Lo comply wlLh.
1. Loss |s w|thout fau|t of debtors, and w|thout de|ay - obllgaLlon ls
exLlngulshed.
2. If w|th fau|t of any of the debtors - all shall be llable for damages wlLh
lnLeresL wlLhouL pre[udlce lnnocenL debLors acLlons agalnsL Lhe gullLy or
Lhe negllgenL debLor.
3. Loss |s due to fau|t of a so||dary debtor
Lx. A, 8, and C are obllged Lo dellver a Lruck worLh 13,000 Lo u
! lf lL ls losL Lhrough Lhe faulL of C, A and 8 are sLlll
responslble Lo u for Lhe prlce of Lhe Lruck as well as
damages. (ln solldary obllgaLlons, Lhe faulL/delay of one
of Lhe debLors ls Lhe faulL/delay of all)
! A and 8 can recover from C damages.
4. Loss |s w|thout fau|t but after de|ay
o u can recover damages from Lhe lnnocenL debLors, and Lhe
lnnocenL debLors have Lhe same acLlon agalnsL Lhe offendlng
debLor as menLloned ln Lhe prevlous number.
o 8ecause one of Lhem was ln defaulL, all of Lhem now are
responslble even for a forLulLous evenL.


37
Art. 1222 - So||dary Debtor's Defenses
A solldary debLor may, ln acLlons flled by Lhe credlLor, avall hlmself of all defenses
whlch are derlved from Lhe naLure of Lhe obllgaLlon and of Lhose whlch are
personal Lo hlm, or perLaln Lo hls own share. WlLh respecL Lo Lhose whlch
personally belong Lo Lhe oLhers, he may avall hlmself Lhereof only as regards LhaL
parL of Lhe debL for whlch Lhe laLLer are responslble. (1148a)
uefenses avallable Lo a solldary debLor
1. Der|ved from the nature of the ob||gat|on
Lx. A and 8 are solldarlly llable Lo C for 4,000. u pays Lhls
enLlre debL.
! lf C sues A, A can ralse Lhe defense of paymenL.
! 1hls ls a compleLe defense - because Lhe
obllgaLlon ls nulllfled and exLlngulshed
o CLher examples:
! rescrlpLlon
! 8emlsslon
! lraud
2. ersona| to debtor sued
o lnsanlLy aL Lhe Llme Lhe obllgaLlon was conLracLed (only
wlLh respecL Lo Lhe speclflc lnsane debLor)
o lncapaclLy
o MlsLake
o vlolence
3. ersona| to other so||dary debtors

"#$%&'( C* + D4?49476/ 012 &124?49476/ '7648054319

Art. 1223 - Nature and Lffect of D|v|s|b|e and Ind|v|s|b|e Cb||gat|ons
1he dlvlslblllLy or lndlvlslblllLy of Lhe Lhlngs LhaL are Lhe ob[ecL of obllgaLlons ln
whlch Lhere ls only one debLor and only one credlLor does noL alLer or modlfy Lhe
provlslons of ChapLer 2 of Lhls 1lLle. (1149)
D|v|s|b|e ob||gat|on - an obllgaLlon whose ob[ecL, ln lLs dellvery or
performance, ls capable of parLlal fulflllmenL
Ind|v|s|b|e Cb||gat|on - noL capable of parLlal fulflllmenL
1est - noL Lhe posslblllLy or lmposslblllLy of parLlal performance, buL
raLher, Lhe purpose of Lhe obllgaLlon or Lhe lnLenLlon of Lhe parLles
o 1he ob[ecL/servlce may be physlcally dlvlslble, buL lf Lhe
parLles/law say lL should be lndlvlslble, lL's lndlvlslble.
o Powever, lf physlcally lndlvlslble, lL's always lndlvlslble.
1hls arLlcle says LhaL Lhe naLure and LffecL of CbllgaLlons" (arLs 1163-
1178) are also appllcable Lo Lhese klnds of obllgaLlons, even lf Lhere ls only
one debLor or credlLor.
Art. 1224 - L|ab|||t|es |n Io|nt Ind|v|s|b|e Cb||gat|ons
A [olnL lndlvlslble obllgaLlon glves rlse Lo lndemnlLy for damages from Lhe Llme
anyone of Lhe debLors does noL comply wlLh hls underLaklng. 1he debLors who may
have been ready Lo fulflll Lhelr promlses shall noL conLrlbuLe Lo Lhe lndemnlLy
beyond Lhe correspondlng porLlon of Lhe prlce of Lhe Lhlng or of Lhe value of Lhe
servlce ln whlch Lhe obllgaLlon conslsLs. (1130)
Io|nt Debtors - only bound Lo perform Lhelr respecLlve porLlon. ln
dlvlslble, Lhls ls easy
lf obllgaLlon ls lndlvlslble, each debLor musL coordlnaLe wlLh hls co-debLors
for Lhe fulflllmenL of Lhe obllgaLlon.
A, 8, and C are requlred Lo glve a compuLer worLh 30,000 Lo u, buL when
u demands paymenL, only C un[usLly refuses Lo dellver.
o CbllgaLlon ls Lhen Lurned lnLo a clalm for damages, as well as Lhe
amounL of Lhe compuLer.
o A and 8 are llable for Lhelr share ln Lhe value of Lhe C (10,000
each).
o 8uL only C shall be llable for all damages.
Art. 122S - D|v|s|b|e and Ind|v|s|b|e Cb||gat|ons
lor Lhe purposes of Lhe precedlng arLlcles, obllgaLlons Lo glve deflnlLe Lhlngs and
Lhose whlch are noL suscepLlble of parLlal performance shall be deemed Lo be
lndlvlslble.
When Lhe obllgaLlon has for lLs ob[ecL Lhe execuLlon of a cerLaln number of days of
work, Lhe accompllshmenL of work by meLrlcal unlLs, or analogous Lhlngs whlch by
Lhelr naLure are suscepLlble of parLlal performance, lL shall be dlvlslble.

38
Powever, even Lhough Lhe ob[ecL or servlce may be physlcally dlvlslble, an
obllgaLlon ls lndlvlslble lf so provlded by law or lnLended by Lhe parLles.
ln obllgaLlons noL Lo do, dlvlslblllLy or lndlvlslblllLy shall be deLermlned by Lhe
characLer of Lhe presLaLlon ln each parLlcular case. (1131a)
1hls arLlcle deems some obllgaLlons lndlvlslble, and oLhers, dlvlslble. lL lays
down Lhe general rule.
Agaln, Lhe purpose of Lhe obllgaLlon ls Lhe conLrolllng clrcumsLance.

A. Cb||gat|ons deemed |nd|v|s|b|e:
1. Cb||gat|ons to g|ve def|n|te th|ngs - a parLlcular elecLrlc fan
2. Cb||gat|ons wh|ch are not suscept|b|e of part|a| performance -
Lo slng a song, Lo dance a dance
3. Cb||gat|ons prov|ded by |aw to be |nd|v|s|b|e - paymenL of Laxes
4. Cb||gat|ons |ntended by part|es to be |nd|v|s|b|e, even lf Lhe Lhlng
ls physlcally dlvlslble:
! ay me 2,000 on !anuary 3."
! 1he lnLenLlon ls clear - Lhe 2,000 should be dellvered aL
one Llme and as a whole
! ue Leon: Suppose Lhere are 2 debLors, ls Lhe obllgaLlon
sLlll lndlvlslble? ?LS
o lL ls dlvlslble as Lo Lhe Lwo debLors, because Lhey
can dellver lL ln parLs
o Powever, as far as credlLor ls concerned, Lhe
money should be dellvered as a whole and ls
Lhus lndlvlslble - lnLenLlon of Lhe parLles ls
conLrolllng
8. Cb||gat|ons deemed d|v|s|b|e:
o CbllgaLlons whlch have for Lhelr ob[ecL Lhe execuLlon of a cerLaln
number of days of work - alnL my house and flnlsh wlLhln 10
days."
o CbllgaLlons whlch have for Lhelr ob[ecL Lhe accompllshmenL of
work by meLrlcal unlLs. - Make a Lable 3 feeL wlde and 3 feeL
long"
o CbllgaLlons whlch by Lhelr naLure are suscepLlble of parLlal
performance - CbllgaLlon Lo render 3 song numbers, obllgaLlon Lo
pay money ln lnsLallmenLs.
C. D|v|s|b|||ty]Ind|v|s|b||ty of ob||gat|ons not to do
o CharacLer of Lhe presLaLlon ln Lhe parLlcular case shall deLermlne
! lndlvlslble - A promlses noL Lo sell clgareLLes for one year - Lhe
performance ls conLlnuous.
! ulvlslble - A promlses noL Lo sell clgareLLes durlng Sundays and
holldays - performance ls nC1 conLlnuous
o Cenerally, Lo do" and noL Lo do" are lndlvlslble (excepL Lo do"
menLloned above).

"#$%&'( E* + '7648054319 ;45< 0 ,/106 $60-9/

Art. 1226 - Def|n|t|on of Cb||g w|th ena| C|ause
ln obllgaLlons wlLh a penal clause, Lhe penalLy shall subsLlLuLe Lhe lndemnlLy for
damages and Lhe paymenL of lnLeresLs ln case of noncompllance, lf Lhere ls no
sLlpulaLlon Lo Lhe conLrary. neverLheless, damages shall be pald lf Lhe obllgor
refuses Lo pay Lhe penalLy or ls gullLy of fraud ln Lhe fulflllmenL of Lhe obllgaLlon.
1he penalLy may be enforced only when lL ls demandable ln accordance wlLh Lhe
provlslons of Lhls Code. (1132a)
555 v. Mooowolk - a penal clause ls an accessory obllgaLlon whlch Lhe
parLles aLLach Lo a prlnclpal obllgaLlon for Lhe purpose of lnsurlng Lhe
performance Lhereof by lmposlng on Lhe debLor a speclal presLaLlon
(generally conslsLlng ln Lhe paymenL of money) ln case Lhe obllgaLlon ls noL
fulfllled or lrregularly or lnadequaLely fulfllled.
Cb||gat|on w|th a pena| c|ause - ls one whlch conLalns an accessory
underLaklng Lo pay a prevlously sLlpulaLed lndemnlLy ln case of breach of
Lhe prlnclpal presLaLlon, lnLended prlmarlly Lo lnduce lLs fulflllmenL.
urposes of penal clauses:
o 1o lnsure performance
o 1o subsLlLuLe a penalLy for Lhe lndemnlLy of damages/paymenL of
lnLeresL
o 1o punlsh Lhe debLor
klnds of enal Clause:
a. As Lo Crlgln
1. Lega| pena| C|ause - provlded by law
2. Convent|ona| ena| C|ause - provlded for by sLlpulaLlon
of Lhe parLles
b. As Lo urpose

39
1. Compensatory - penalLy Lakes place of damages
2. un|t|ve - lmposed as a penalLy/punlshmenL for breach
c. As Lo demandablllLy/effecL
1. Subs|d|ary]A|ternat|ve - only Lhe penalLy can be
enforced
2. Io|nt]Cumu|at|ve - boLh prlnclpal obllgaLlon and penalLy
can be enforced
Ceneral 8ule - ln obllgaLlons wlLh a penal clause, Lhe penalLy Lakes Lhe
place of damages and Lhe paymenL of lnLeresL ln case of non-compllance.
1hus, proof of acLual damage suffered ls noL necessary Lo enforce Lhe
penalLy as long as Lhere ls non-compllance.
CredlLor may recover damages ln addlLlon Lo Lhe penalLy:
1. When so sLlpulaLed
2. When obllgor refuses Lo pay Lhe penalLy
3. When obllgor ls gullLy of fraud ln Lhe fulflllmenL of Lhe obllgaLlon -
credlLor can recover damages caused by such fraud.
Art. 1227 - ena|ty and Iu|f|||ment
1he debLor cannoL exempL hlmself from Lhe performance of Lhe obllgaLlon by
paylng Lhe penalLy, save ln Lhe case where Lhls rlghL has been expressly reserved for
hlm. nelLher can Lhe credlLor demand Lhe fulflllmenL of Lhe obllgaLlon and Lhe
saLlsfacLlon of Lhe penalLy aL Lhe same Llme, unless Lhls rlghL has been clearly
granLed hlm. Powever, lf afLer Lhe credlLor has declded Lo requlre Lhe fulflllmenL of
Lhe obllgaLlon, Lhe performance Lhereof should become lmposslble wlLhouL hls
faulL, Lhe penalLy may be enforced. (1133a)
enalLy ls an accessory obllgaLlon, noL a subsLlLuLe.
uebLor cannoL merely pay Lhe penalLy lnsLead of performlng Lhe obllgaLlon
ln order Lo exLlngulsh Lhe obllgaLlon. (as always, however, Lhe parLles can
sLlpulaLe oLherwlse)
CredlLor cannoL demand fulflllmenL of obllgaLlon and paymenL of penalLy
aL Lhe same Llme (unless sLlpulaLed)
enalLy may be enforced lf, afLer credlLor demands fulflllmenL, lL becomes
lmposslble wlLhouL faulL of Lhe credlLor.
lf Lhe credlLor requlres Lhe obllgaLlon Lo be fulfllled, and performance
becomes lmposslble wlLhouL hls or her faulL, Lhe penalLy may be lmposed.

Art. 1228 - roof |s Not Necessary
roof of acLual damages suffered by Lhe credlLor ls noL necessary ln order LhaL Lhe
penalLy may be demanded. (n)
Art. 1229 - Court Intervent|on
1he [udge shall equlLably reduce Lhe penalLy when Lhe prlnclpal obllgaLlon has been
parLly or lrregularly complled wlLh by Lhe debLor. Lven lf Lhere has been no
performance, Lhe penalLy may also be reduced by Lhe courLs lf lL ls lnlqulLous or
unconsclonable. (1134a)
Cne of Lhe cases where Lhe courL sLeps ln beLween Lhe parLles.
lf Lhe penalLy ls so unconsclonable, Lhen Lhe courL may Lemper, reduce, or
deleLe lL.
lf penalLy clause ls so unconsclonable LhaL lLs enforcemenL would
consLlLuLe an undue deprlvaLlon or conflscaLlon of properLy, Lhe courLs can
sLrlke lL down as lnvalld.
Art. 1230 - Nu|||ty of the ena| C|ause
1he nulllLy of Lhe penal clause does noL carry wlLh lL LhaL of Lhe prlnclpal obllgaLlon.
1he nulllLy of Lhe prlnclpal obllgaLlon carrles wlLh lL LhaL of Lhe penal clause. (1133)
lf Lhe penal clause ls null, Lhe orlglnal obllgaLlon sLlll perslsLs.
lf Lhe orlglnal obllgaLlon ls null, Lhe penal clause ls null as well.


40
Chapter 4: Lxt|ngu|shment of Cb||gat|ons
F#(#G>H ,G'I&"&'("

Art. 1231 - Modes of Lxt|ngu|shment
CbllgaLlons are exLlngulshed:
(1) 8y paymenL or performance:
(2) 8y Lhe loss of Lhe Lhlng due:
(3) 8y Lhe condonaLlon or remlsslon of Lhe debL,
(4) 8y Lhe confuslon or merger of Lhe rlghLs of credlLor and debLor,
(3) 8y compensaLlon,
(6) 8y novaLlon.
CLher causes of exLlngulshmenL of obllgaLlons, such as annulmenL, resclsslon,
fulflllmenL of a resoluLory condlLlon, and prescrlpLlon, are governed elsewhere ln
Lhls Code. (1136a)
rovldes modes by whlch obllgaLlons can be exLlngulshed.
ueaLh does noL exLlngulsh an obllgaLlon unless such ls personal or
lnLransmlsslble

"#$%&'( )* + ,0BJ/15 3. ,/.K3.J01L/

Art. 1232 - ayment Def|ned
aymenL means noL only Lhe dellvery of money buL also Lhe performance, ln any
oLher manner, of an obllgaLlon. (n)
aymenL ls noL excluslvely llmlLed Lo glvlng of money
aymenL ls any manner of perform|ng the ob||gat|on w|th the end |n v|ew
of ext|ngu|sh|ng |t.
CerLaln presumpLlons are made ln favor of paymenL
o 8ecelpL of prlnclpal wlLhouL reservaLlon as Lo lnLeresL glves rlse Lo
presumpLlon of paymenL of lnLeresL.
o 8ecelpL of a laLer lnsLalmenL wlLhouL reservaLlon as Lo a prlor
lnsLallmenL glves rlse Lo Lhe presumpLlon of paymenL of Lhe prlor
lnsLallmenL.
8urden of proof Lo show paymenL, once debL ls esLabllshed, ls on Lhe
debLor.
aymenL and performance are synonymous.
Art. 1233 - ayment must be Comp|ete
A debL shall noL be undersLood Lo have been pald unless Lhe Lhlng or servlce ln
whlch Lhe obllgaLlon conslsLs has been compleLely dellvered or rendered, as Lhe
case may be. (1137)
ayment - full saLlsfacLlon of Lhe debL/obllgaLlon
o everyLhlng LhaL ls necessary Lo saLlsfy Lhe obllgaLlon, conslsLenL
wlLh Lhe ob[ecL of Lhe same.
AnyLhlng less Lhan compleLe performance may be consldered Lo be a
breach.
Art. 1234 - Substant|a| erformance |n Good Ia|th
lf Lhe obllgaLlon has been subsLanLlally performed ln good falLh, Lhe obllgor may
recover as Lhough Lhere had been a sLrlcL and compleLe fulflllmenL, less damages
suffered by Lhe obllgee. (n)
I|rst Lxcept|on - subsLanLlal performance
o Cenerally, anyLhlng less Lhan compleLe = breach
ln Lhls case, Lhere ls subsLanLlal fulflllmenL - Lhe breach ls noL maLerlal
enough Lo compel Lhe credlLor Lo resclnd.
o 1hus, Lhe unperformed parL should noL desLroy Lhe value/purpose
of Lhe conLracL.
uebLor may recover as lf Lhere had been a sLrlcL and compleLe fulflllmenL,
less damages suffered by credlLor.
o CredlLor ls beneflLLed by Lhe subsLanLlal performance, so Lhe
obllgor should be allowed Lo recover.
o 1he damages are compensaLlon for Lhe relaLlve breach commlLLed
by obllgor.
loqslblqoo v. cA - Lhe debLor, because of hlgh lnLeresL raLe and several
penalLy charges, had effecLlvely pald more Lhan Lhe orlglnal amounL of Lhe

41
loan. - SC ruled LhaL Lhere was subsLanLlal compllance. 1hus, debLor was
released from hls morLgage - debLor may recover as lf."
Art. 123S - Cred|tor Accepts Incomp|eteness or Irregu|ar|ty
When Lhe obllgee accepLs Lhe performance, knowlng lLs lncompleLeness or
lrregularlLy, and wlLhouL expresslng any proLesL or ob[ecLlon, Lhe obllgaLlon ls
deemed fully complled wlLh. (n)
Second Lxcept|on - Lhe credlLor walves Lhe damages arlslng from Lhe
breach of conLracL resulLlng ln Lhe lncompleLeness/lrregularlLy.
Pe musL express hls ob[ecLlon, because lf noL, he accepLs Lhe performance
as fully complled wlLh.
sqoetto v. vllloooevo
o uebLor sald LhaL slnce credlLor recelved parLlal paymenLs, he
accepLed parLlal performance and Lhus Lhe obllgaLlon should be
consldered complled wlLh
o SC: recelpL" ls noL equlvalenL Lo accepLance."
o Mere recelpL ls noL enough Lo consLlLuLe accepLance - ln facL,
credlLor acLually manlfesLed Lhelr dlssaLlsfacLlon
o No part|cu|ar manner prescr|bed for the cred|tor's ob[ect|on - so
long as Lhe acLs of Lhe credlLor aL Lhe Llme of Lhe lrregular
paymenL show LhaL Lhe former ls noL saLlsfled.
1oyoq v. cA
o Sellers accepLed numerous paymenLs ln lnsLallmenL afLer Lhe due
daLe, wlLhouL any proLesL, lL was even Lhe buyers (debLors) who
flled a case for performance of Lhe sale - SC held LhaL Lhese acLs
were clearly a walver of Lhe rlghL Lo resclnd
Art. 1236 - ayment by a 1h|rd erson
1he credlLor ls noL bound Lo accepL paymenL or performance by a Lhlrd person who
has no lnLeresL ln Lhe fulflllmenL of Lhe obllgaLlon, unless Lhere ls a sLlpulaLlon Lo
Lhe conLrary.
Whoever pays for anoLher may demand from Lhe debLor whaL he has pald, excepL
LhaL lf he pald wlLhouL Lhe knowledge or agalnsL Lhe wlll of Lhe debLor, he can
recover only lnsofar as Lhe paymenL has been beneflclal Lo Lhe debLor. (1138a)

Art. 1237 - No Subrogat|on
Whoever pays on behalf of Lhe debLor wlLhouL Lhe knowledge or agalnsL Lhe wlll of
Lhe laLLer, cannoL compel Lhe credlLor Lo subrogaLe hlm ln hls rlghLs, such as Lhose
arlslng from a morLgage, guaranLy, or penalLy. (1139a)
Art. 1238 - Donat|on
aymenL made by a Lhlrd person who does noL lnLend Lo be relmbursed by Lhe
debLor ls deemed Lo be a donaLlon, whlch requlres Lhe debLor's consenL. 8uL Lhe
paymenL ls ln any case valld as Lo Lhe credlLor who has accepLed lL. (n)
eople whose paymenL Lhe credlLor ls bound Lo accepL:
1. 1he debLor
2. Any person who has an lnLeresL ln Lhe obllgaLlon (ex. CuaranLor)
3. A Lhlrd person unlnLeresLed ln Lhe obllgaLlon, WPLn S1luLA1Lu.
ayment by a 3
rd
person - several slLuaLlons may arlse. 1hese wlll
deLermlne wheLher Lhe Lhlrd person becomes a credlLor as Lo Lhe orlglnal
debLor.
1. 1hlrd person pays w|thout know|edge or aga|nst the w||| of Lhe
debLor
o 1he Lhlrd person can only recover from Lhe debLor Lo Lhe
exLenL LhaL Lhe debLor ls beneflLLed.
o WhaL ls beneflclal Lo Lhe debLor ls deLermlned by law and noL
Lhe wlll of Lhe debLor.
Lx. A owed 8 300,000 secured by a morLgage.
! C pays 8 wlLhouL knowledge/agalnsL Lhe wlll of A.
! C can recover Lhe 300,000, buL he does noL acqulre
Lhe rlghL Lo Lhe morLgage - he cannoL foreclose on Lhe
properLy.
2. 1hlrd person pays w|th know|edge, but aga|nst the w||| of Lhe
debLor - same as above
3. 1hlrd person pays w|th know|edge and consent of the debtor
o 1hlrd person can recover Lhe amounL he pald Lo Lhe credlLor.
o Pe may also compel Lhe credlLor Lo Lransfer Lo hlm any
morLgage, guaranLy or penalLy
o 1here ls legal subrogaLlon here.
4. CredlLor accepts payment from th|rd person, because |ts
st|pu|ated - same as prevlous, because obvlously Lhe debLor
agrees wlLh such paymenL.
3. 1hlrd person pays credlLor w|thout |ntend|ng to be re|mbursed
by the debtor

42
o CbllgaLlon ls exLlngulshed, regardless of Lhe debLor's
consenL.
o lL's LreaLed as a donaLlon.
Art. 1239 - ayment by an Incapac|tated erson
ln obllgaLlons Lo glve, paymenL made by one who does noL have Lhe free dlsposal of
Lhe Lhlng due and capaclLy Lo allenaLe lL shall noL be valld, wlLhouL pre[udlce Lo Lhe
provlslons of ArLlcle 1427 under Lhe 1lLle on "naLural CbllgaLlons." (1160a)
"Iree D|sposa| of the 1h|ng" - Lhe Lhlng musL noL be sub[ecL Lo any clalm
or llen or encumbrance of a Lhlrd person.
"Capac|ty to a||enate" - person ls noL lncapaclLaLed Lo enLer lnLo conLracLs
and Lo make a dlsposlLlon of Lhe Lhlng due.
1hus, paymenLs by any person noL possesslng Lhese quallLles ls lnvalld.
o LxcepLlon: eople 17 years old and below who enLer lnLo a
conLracL wlLhouL Lhe consenL of Lhelr parenL/guardlan, and who
pay volunLarlly Lo fulflll Lhe obllgaLlon have no rlghL Lo recover
from Lhe credlLor who has spenL lL ln good falLh. (based on ArL.
1427 of Clvll Code and 234 and 236 of Lhe lamlly Code)
Art. 1240 - 1o Whom ayment Shou|d be Made
aymenL shall be made Lo Lhe person ln whose favor Lhe obllgaLlon has been
consLlLuLed, or hls successor ln lnLeresL, or any person auLhorlzed Lo recelve lL.
(1162a)
aymenL should only be pald Lo
o 1he credlLor
o Pls successors ln lnLeresL
o Any person auLhorlzed Lo recelve lL.
! AuLhorlzed by Lhe credlLor
! AuLhorlzed by Lhe law
aymenL made Lo a Lhlrd person, even lf Lhrough error and good falLh does
noL release debLor of obllgaLlon Lo pay. CredlLor can sLlll demand paymenL.
o lf lL becomes lmposslble Lo recover, any loss shall be borne by Lhe
decelved debLor

Art. 1241 - ayment to Incapac|tated or 1h|rd ersons
aymenL Lo a person who ls lncapaclLaLed Lo admlnlsLer hls properLy shall be valld lf
he has kepL Lhe Lhlng dellvered, or lnsofar as Lhe paymenL has been beneflclal Lo
hlm.
aymenL made Lo a Lhlrd person shall also be valld lnsofar as lL has redounded Lo
Lhe beneflL of Lhe credlLor. Such beneflL Lo Lhe credlLor need noL be proved ln Lhe
followlng cases:
(1) lf afLer Lhe paymenL, Lhe Lhlrd person acqulres Lhe credlLor's rlghLs,
(2) lf Lhe credlLor raLlfles Lhe paymenL Lo Lhe Lhlrd person,
(3) lf by Lhe credlLor's conducL, Lhe debLor has been led Lo belleve LhaL Lhe Lhlrd
person had auLhorlLy Lo recelve Lhe paymenL. (1163a)
Lffect of payment to an |ncapac|tated person
o noL valld, unless such person keeps Lhe Lhlng pald or dellvered, or
was beneflLLed by Lhe paymenL
Lx. lf A glves Lo 8, a mlnor, 1000 ln paymenL of Lhe debL, and C
loses 700 because of negllgence - Lhe paymenL should be
consldered made only Lo Lhe exLenL of 300.
! lf 8 keeps Lhe money, or spenL lL on purposes useful Lo hlm -
paymenL shall be valld
Lffect of payment to a th|rd person
o noL valld, excepL lnsofar as lL has redounded Lo Lhe beneflL of Lhe
credlLor.
o 1hus beneflL ls noL presumed and musL be proven by evldence.
o LxcepLlons - when lL need noL be proven (S.8.L.)
1. Subrogat|on - lf afLer Lhe paymenL, Lhe 3
rd
person acqulres
Lhe credlLor's rlghLs
A owed 8 1000. Pe does noL pay on due daLe, so 8
adds 100 as lnLeresL.
A pays x, a Lhlrd person, Lhe 1000.
lf 8 empowers x Lo collecL Lhe 100 lnLeresL for hlmself
(x), Lhen Lhe beneflL Lo Lhe credlLor need noL be
proven.
2. kat|f|cat|on by Lhe credlLor
3. Lstoppe| on Lhe parL of Lhe credlLor
8 Lells A LhaL he can pay x Lhe lndebLedness.
8 cannoL dlsclalm Lhe paymenL Lo x.


43
Art. 1242 - ayment to ossessor of Cred|t
aymenL made ln good falLh Lo any person ln possesslon of Lhe credlL shall release
Lhe debLor. (1164)
A person ln possesslon of Lhe credlL ls presumed Lo own Lhe credlL.
1he examples abouL Lo bearer" checks fall under Lhls arLlcle.
Art. 1243 - Iud|c|a| Crder to keta|n the Debt
aymenL made Lo Lhe credlLor by Lhe debLor afLer Lhe laLLer has been [udlclally
ordered Lo reLaln Lhe debL shall noL be valld. (1163)
1he debLor ls prohlblLed from paylng a credlLor lf Lhe courL prohlblLs hlm
from dolng so - lf he does, such ls lnvalld
1he purpose - Lo proLecL oLher credlLors of Lhe debLor
Art. 1244 - Cred|tor Cannot be Compe||ed to kece|ve a D|fferent 1h|ng
1he debLor of a Lhlng cannoL compel Lhe credlLor Lo recelve a dlfferenL one,
alLhough Lhe laLLer may be of Lhe same value as, or more valuable Lhan LhaL whlch
ls due.
ln obllgaLlons Lo do or noL Lo do, an acL or forbearance cannoL be subsLlLuLed by
anoLher acL or forbearance agalnsL Lhe obllgee's wlll. (1166a)
uebLor has no cholce ln Lhe paymenL excepL Lo glve whaL ls agreed upon.
o unless Lhe obllgaLlon ls faculLaLlve/alLernaLlve.
Art. 124S - Dat|on |n ayment
uaLlon ln paymenL, whereby properLy ls allenaLed Lo Lhe credlLor ln saLlsfacLlon of a
debL ln money, shall be governed by Lhe law of sales. (n)
Dat|on |n payment ] 20L431 /1 M083 N conveyance of ownershlp of a Lhlng
as an accepLed equlvalenL or performance.
Lx. u owes C 30,000. 1o fulflll Lhls obllgaLlon, u, wlLh consenL of C,
dellvers a plano.
8equlslLes of daLlon ln paymenL: (.u.A.)
1. 1he performance of the prestat|on ln lleu of paymenL
! uellvery of a realy Lhlng, or a real rlghL, or a credlL
2. 1here musL be some d|fference beLween Lhe presLaLlon due and
LhaL glven ln subsLlLuLlon
J. 1here musL be an agreement beLween credlLor and debLor LhaL
Lhe obllgaLlon ls lmmedlaLely exLlngulshed.
lf Lhlng ls of less value - for example, Lhe plano
o 1he debL ls exLlngulshed Lo Lhe exLenL of Lhe value of Lhe Lhlng.
o unless Lhe parLles agree LhaL Lhe whole obllgaLlon ls exLlngulshed.

Art. 1246 - De||very of a Gener|c 1h|ng
When Lhe obllgaLlon conslsLs ln Lhe dellvery of an lndeLermlnaLe or generlc Lhlng,
whose quallLy and clrcumsLances have noL been sLaLed, Lhe credlLor cannoL demand
a Lhlng of superlor quallLy. nelLher can Lhe debLor dellver a Lhlng of lnferlor quallLy.
1he purpose of Lhe obllgaLlon and oLher clrcumsLances shall be Laken lnLo
conslderaLlon. (1167a)
ku|e of Med|um ua||ty
o CredlLor cannoL demand Lhe besL.
o uebLor cannoL glve Lhe worsL.
WhaL ls dellvered should be conslsLenL wlLh Lhe purpose and goal of Lhe
obllgaLlon.
o 8enL a car Lo be used ln a slmple weddlng
o CredlLor cannoL demand a 8olls-8oyce LhaL debLor cannoL afford
o Cbllgor cannoL glve a crap kla rlde LhaL does noL brake.
Art. 1247 - Lxtra[ud|c|a| Lxpenses
unless lL ls oLherwlse sLlpulaLed, Lhe exLra[udlclal expenses requlred by Lhe
paymenL shall be for Lhe accounL of Lhe debLor. WlLh regard Lo [udlclal cosLs, Lhe
8ules of CourL shall govern. (1168a)
rlnclpal behlnd Lhls ls LhaL Lhe credlLor usually ls Lhe beneflclary of Lhe
obllgaLlon
1hus, lL ls Lhe debLor who does servlce, and musL bear any exLra-[udlclal
cosLs ln hls performance.
Art. 1248 - art|a| kece|pt and ayment
unless Lhere ls an express sLlpulaLlon Lo LhaL effecL, Lhe credlLor cannoL be
compelled parLlally Lo recelve Lhe presLaLlons ln whlch Lhe obllgaLlon conslsLs.
nelLher may Lhe debLor be requlred Lo make parLlal paymenLs.

44
Powever, when Lhe debL ls ln parL llquldaLed and ln parL unllquldaLed, Lhe credlLor
may demand and Lhe debLor may effecL Lhe paymenL of Lhe former wlLhouL walLlng
for Lhe llquldaLlon of Lhe laLLer. (1169a)
1hls conLemplaLes obllgaLlons where Lhere ls only one credlLor and only
one debLor.
Ceneral rule - paymenL musL be ln full ln order Lo exLlngulsh an obllgaLlon.
o CredlLor may accepL parLlal performance, buL he may noL be
compelled Lo.
o uebLor should fulflll Lhe obllgaLlon, buL he cannoL be requlred Lo
make parLlal paymenLs.
When |s part|a| performance a||owed:
1. Lxpress sLlpulaLlon ln Lhe obllgaLlon
2. uebL ls parL llquldaLed (compuLed) and ln parL unllquldaLed
Lx. 1he obllgaLlon ls Lo dellver 1,000, and whaLever debLor geLs
from hls faLher's esLaLe.
! Pe can glve Lhe 1,000 flrsL wlLhouL walLlng for Lhe
deLermlnaLlon of hls lnherlLance.
3. lf credlLor accepL such paymenL and beneflLs from lL
4. When Lhe dlfferenL presLaLlons ln whlch Lhe obllgaLlon conslsLs
are sub[ecL Lo d|fferent terms or cond|t|ons wh|ch affect some of
them.
Lx. CbllgaLlon Lo pay debL ln lnsLallmenLs
! resLaLlons (each lnsLallmenL) need noL be glven
slmulLaneously.

Art. 1249 - Currency and Lega| 1ender
1he paymenL of debLs ln money shall be made ln Lhe currency sLlpulaLed, and lf lL ls
noL posslble Lo dellver such currency, Lhen ln Lhe currency whlch ls legal Lender ln
Lhe hlllpplnes.
1he dellvery of promlssory noLes payable Lo order, or bllls of exchange or oLher
mercanLlle documenLs shall produce Lhe effecL of paymenL only when Lhey have
been cashed, or when Lhrough Lhe faulL of Lhe credlLor Lhey have been lmpalred.
ln Lhe meanLlme, Lhe acLlon derlved from Lhe orlglnal obllgaLlon shall be held ln Lhe
abeyance. (1170)
Lega| 1ender - LhaL currency whlch a debLor can legally compel a credlLor
Lo accepL ln paymenL of a debL ln money when Lendered by debLor ln Lhe
rlghL amounL.
o uebLs ln money shall be pald ln Lhe currency sLlpulaLed.
o lf lmposslble Lo dellver such currency, or ln Lhe absence of
sLlpulaLlon, Lhe defaulL ls LhaL paymenL shall be made ln Lhe
currency whlch ls legal Lender ln Lhe hlllpplnes. (all colns and
noLes lssued by Lhe 8angko SenLral ng lllplnas)
ayment by means of |nstruments of cred|ts - do noL exLlngulsh Lhe
obllgaLlon unLll:
o 1hey have been cashed.
o 1hey have been lmpalred Lhrough Lhe faulL of Lhe credlLor.
! Appllcable only Lo lnsLrumenLs execuLed by 3
rd
persons and
dellvered by debLor Lo credlLor
! uoes noL apply Lo lnsLrumenLs execuLed by debLor hlmself and
dellvered Lo credlLor
8||| of exchange - uncondlLlonal order ln wrlLlng addressed by one person
Lo anoLher, slgned by Lhe person glvlng lL, requlrlng Lhe addresee Lo pay on
demand a sum cerLaln ln money Lo Lhe bearer.
o A check ls a blll of exchange addressed Lo Lhe bank, payable on
demand.
! lf paymenL ls Lendered by way of check, and Lhe obllgee
accepLs, such obllgee ls esLopped from quesLlonlng Lhe efflcacy
of such Lender
Art. 12S0 - Inf|at|on or Def|at|on
ln case an exLraordlnary lnflaLlon or deflaLlon of Lhe currency sLlpulaLed should
supervene, Lhe value of Lhe currency aL Lhe Llme of Lhe esLabllshmenL of Lhe
obllgaLlon shall be Lhe basls of paymenL, unless Lhere ls an agreemenL Lo Lhe
conLrary. (n)
Lxtraodr|nary Inf|at|on - a decrease or lncrease ln Lhe purchaslng power of
Lhe hlllpplne currency whlch ls unusual or beyond Lhe common
flucLuaLlon of Lhe value of Lhe sald currency, and such decrease or lncrease
could noL have been foreseen, or was beyond conLemplaLlon of Lhe
parLles.
o CannoL be applled wlLhouL an offlclal declaraLlon from compeLenL
auLhorlLles.
o Applles only Lo cases where a conLracL/agreemenL ls lnvolved.
o uoes noL apply when obllgaLlon Lo pay ls derlved from law.

43
Art. 12S1 - |ace of ayment
aymenL shall be made ln Lhe place deslgnaLed ln Lhe obllgaLlon.
1here belng no express sLlpulaLlon and lf Lhe underLaklng ls Lo dellver a deLermlnaLe
Lhlng, Lhe paymenL shall be made wherever Lhe Lhlng mlghL be aL Lhe momenL Lhe
obllgaLlon was consLlLuLed.
ln any oLher case Lhe place of paymenL shall be Lhe domlclle of Lhe debLor.
lf Lhe debLor changes hls domlclle ln bad falLh or afLer he has lncurred ln delay, Lhe
addlLlonal expenses shall be borne by hlm.
1hese provlslons are wlLhouL pre[udlce Lo venue under Lhe 8ules of CourL. (1171a)
rovldes where Lo pay ln order Lo ensure cerLalnLy ln paymenL.
1. lf Lhere ls a sLlpulaLed place, Lhen lL shall be made Lhere.
2. lf Lhere ls no sLlpulaLlon, and Lhe Lhlng ls deLermlnaLe, paymenL
shall be made where Lhe Lhlng was aL Lhe Llme of Lhe perfecLlon of
Lhe conLracL
3. no sLlpulaLlon, generlc Lhlng - domlclle of Lhe debLor
! Dom|c||e - a person's place of hablLual resldence, Lrue flxed
permanenL home, he has Lhe lnLenLlon of reLurnlng
! CosLs shall be borne by by Lhe credlLor ln golng Lo Lhe domlclle,
unless such has been changed ln bad falLh, or unless debLor ls ln
delay
SU8SLC1ICN 1. - App||cat|on of ayments

Art. 12S2 - App||cat|on of ayments
Pe who has varlous debLs of Lhe same klnd ln favor of one and Lhe same credlLor,
may declare aL Lhe Llme of maklng Lhe paymenL, Lo whlch of Lhem Lhe same musL
be applled. unless Lhe parLles so sLlpulaLe, or when Lhe appllcaLlon of paymenL ls
made by Lhe parLy for whose beneflL Lhe Lerm has been consLlLuLed, appllcaLlon
shall noL be made as Lo debLs whlch are noL yeL due.
lf Lhe debLor accepLs from Lhe credlLor a recelpL ln whlch an appllcaLlon of Lhe
paymenL ls made, Lhe former cannoL complaln of Lhe same, unless Lhere ls a cause
for lnvalldaLlng Lhe conLracL. (1172a)
1hese apply Lo a person who has several debLs of Lhe same klnd Lo a slngle
credlLor.
When a person pays, he ls glven Lhe cholce Lo whlch debL Lhe paymenL ls
applled.
1he paymenLs musL sLlll conform Lo Lhe rules glven ln Lhe prevlous arLlcles
o CredlLor can refuse lf Lhe paymenL ls applled Lo a debL LhaL would
only be parLlally fulfllled
AppllcaLlon of paymenLs cannoL be made on debLs whlch are noL yeL due.
1. unless parLles agree
2. aymenL ls made by Lhe parLy for whose beneflL Lhe Lerm has
been consLlLuLed
Lx. A owes 8 1,000 pesos, and such debL wlll noL lncur
lnLeresL before a cerLaln daLe, Lhe Lerm ls consLlLuLed for
Lhe debLor's beneflL.
3. lf Lhe debLor recelves and accepLs a recelpL for Lhe appllcaLlon he
cannoL complaln abouL where lL was applled.
Art. 12S3 - Interest
lf Lhe debL produces lnLeresL, paymenL of Lhe prlnclpal shall noL be deemed Lo have
been made unLll Lhe lnLeresLs have been covered. (1173)
1hls ls only dlrecLory and noL mandaLory.
aymenL of boLh lnLeresL and prlnclpal - Lwo paymenLs by Lhe debLor.
1hls arLlcle ls why Lhe presumpLlon of paymenL of lnLeresL arlses when Lhe
prlnclpal ls recelved by Lhe credlLor.
8lghL Lo apply paymenL Lo lnLeresL flrsL can be walved.
Art. 12S4 - Most Cnerous Debt
When Lhe paymenL cannoL be applled ln accordance wlLh Lhe precedlng rules, or lf
appllcaLlon cannoL be lnferred from oLher clrcumsLances, Lhe debL whlch ls mosL
onerous Lo Lhe debLor, among Lhose due, shall be deemed Lo have been saLlsfled.
lf Lhe debLs due are of Lhe same naLure and burden, Lhe paymenL shall be applled Lo
all of Lhem proporLlonaLely. (1174a)
lf Lhere ls no lndlcaLlon as Lo whlch debL Lhe paymenL goes Lo - lL goes Lo
Lhe mosL onerous, provlded lL ls due.
o "Cnerous" - lndebLedness whlch exacLs Lhe heavlesL burden

46
Lx. A debL wlLh lnLeresL ls more onerous Lhan one wlLhouL
lnLeresL.
Same naLure and burden - Lhere ls no mosL onerous"
o aymenL shall be applled Lo all proporLlonally.
Lx. A owes 8 Lhree debLs LoLalllng 30,000, and he glves 9,000
wlLhouL saylng where lL wlll go.
! Lach debL wlll be reduced by 3,000.
Lx. A owes 8 10,000, 20k, and 30,000. Pe pays 6,000 - Lhe
proporLlon ls 1:2:3.
! 1,000 applled Lo Lhe 10,000 debL, 2,000 Lo Lhe 20,000, and
3,000 Lo Lhe 30,000.

SU8SLC1ICN 2. - ayment by Cess|on

Art. 12SS - Cess|on
1he debLor may cede or asslgn hls properLy Lo hls credlLors ln paymenL of hls debLs.
1hls cesslon, unless Lhere ls sLlpulaLlon Lo Lhe conLrary, shall only release Lhe debLor
from responslblllLy for Lhe neL proceeds of Lhe Lhlng asslgned. 1he agreemenLs
whlch, on Lhe effecL of Lhe cesslon, are made beLween Lhe debLor and hls credlLors
shall be governed by speclal laws. (1173a)
ayment by Cess|on
o Speclal form of paymenL
o AsslgnmenL/abandonmenL of all Lhe properLles of Lhe debLor for
Lhe beneflL of hls credlLors.
! Cnly Lhe properLles whlch are suscepLlble and noL exempLed by
law from belng allenaLed (example famlly home)
o Such LhaL Lhe laLLer may sell Lhe same and apply Lhe proceeds Lo
Lhe saLlsfacLlon of Lhelr credlLs
! Cnly Lhe proceeds - no rlghL of credlLors as Lo ownershlp of Lhe
properLles ceded.
kequ|s|tes of Cess|on
1. 1wo or more credlLors
2. uebLor (parLlally) lnsolvenL
3. Cesslon musL be accepLed by credlLors
! CredlLors musL agree whlch debL wlll be pald flrsL, or Lhe
proporLlonlng.
Lffect of Cess|on
o unless oLherwlse sLlpulaLed, credlLors do now become owners.
o uebLor ls only released up Lo Lhe neL proceeds of Lhe sale.
! lf hls properLles, when sold, don'L ralse enough money, he sLlll
has a debL Lo pay

SU8SLC1ICN 3. - 1ender of ayment and Cons|gnat|on

Art. 12S6 - 1ender of ayment and Cons|gnment
lf Lhe credlLor Lo whom Lender of paymenL has been made refuses wlLhouL [usL
cause Lo accepL lL, Lhe debLor shall be released from responslblllLy by Lhe
conslgnaLlon of Lhe Lhlng or sum due.
ConslgnaLlon alone shall produce Lhe same effecL ln Lhe followlng cases:
(1) When Lhe credlLor ls absenL or unknown, or does noL appear aL Lhe place of
paymenL,
(2) When he ls lncapaclLaLed Lo recelve Lhe paymenL aL Lhe Llme lL ls due,
(3) When, wlLhouL [usL cause, he refuses Lo glve a recelpL,
(4) When Lwo or more persons clalm Lhe same rlghL Lo collecL,
(3) When Lhe LlLle of Lhe obllgaLlon has been losL. (1176a)
Art. 12S7 - Announcement
ln order LhaL Lhe conslgnaLlon of Lhe Lhlng due may release Lhe obllgor, lL musL flrsL
be announced Lo Lhe persons lnLeresLed ln Lhe fulflllmenL of Lhe obllgaLlon.
1he conslgnaLlon shall be lneffecLual lf lL ls noL made sLrlcLly ln consonance wlLh Lhe
provlslons whlch regulaLe paymenL. (1177)
Art. 12S8 - Cons|gnat|on rocess
ConslgnaLlon shall be made by deposlLlng Lhe Lhlngs due aL Lhe dlsposal of [udlclal
auLhorlLy, before whom Lhe Lender of paymenL shall be proved, ln a proper case,
and Lhe announcemenL of Lhe conslgnaLlon ln oLher cases.
1he conslgnaLlon havlng been made, Lhe lnLeresLed parLles shall also be noLlfled
Lhereof. (1178)


47
1ender of payment
o AcL on Lhe parL of Lhe debLor
o Cfferlng Lo Lhe credlLor Lhe Lhlng or Lhe amounL due
o uebLor musL show LhaL he has Lhe Lhlng/money ln hls possesslon
o MusL be made ln lawful currency
o LxLra[udlclal
o 8equlslLes for valld Lender of paymenL
1. MusL comply wlLh Lhe rules on paymenL (ArLs 1236-1238)
2. MusL be uncondlLlonal and for Lhe whole amounL
3. lL musL acLually be made
Cons|gnat|on
o AcL of deposlLlng Lhe Lhlng or amounL due wlLh Lhe proper courL
o When Lhe credlLor does noL deslre or cannoL recelev lL
o ConslgnaLlon ls [udlclal - generally requlres a prlor Lender of
paymenL
o 8equlslLes of a valld conslgnaLlon - ln order LhaL debLor may be
released (v.1.8..A.S.)
1. LxlsLence of a va||d debt, whlch ls due
2. 1ender of payment by debLor
3. kefusa| wlLhouL [usLlflable reason by credlLor
4. rev|ous not|ce of conslgnaLlon Lo persons lnLeresLed ln
Lhe fulflllmenL of Lhe obllgaLlon
3. Actua| cons|gnat|on of Lhe Lhlng/sum due/Lhe amounL ls
placed aL Lhe dlsposal of Lhe courL
6. Subsequent not|ce Lo lnLeresLed parLles
When conslgnaLlon produce Lhe same effecL (Lx. even wlLhouL Lender of
paymenL) - f|ve cases (A.l.C.1.1.)
1. CredlLor ls absent/unknown/does noL appear aL Lhe place of
paymenL
2. CredlLor ls |ncapac|tated Lo recelve paymenL aL Lhe Llme lL ls due.
3. CredlLor refuses wlLhouL [usL cause Lo g|ve a rece|pt.
4. 1wo or more persons clalm Lhe same rlghL Lo collecL
3. 1|t|e of Lhe obllgaLlon has been losL
Art. 12S9 - Lxpenses 8orne by the Cred|tor
1he expenses of conslgnaLlon, when properly made, shall be charged agalnsL Lhe
credlLor. (1178)
CredlLor ls responslble because lL ls hls faulL LhaL conslgnaLlon was
necessary - hls refusal Lo accepL paymenL.
o Lxpenses are chargeable Lo Lhe debLor lf Lhe conslgnaLlon ls noL
properly made.
roper cons|gnat|on:
1. When credlLor accepLs Lhe Lhlng or sum deposlLed, wlLhouL
ob[ecLlon, as paymenL of Lhe obllgaLlon
2. When credlLor quesLlons Lhe valldlLy of conslgnaLlon, and courL
deems lL valld
3. When credlLor nelLher accepLs or quesLlons valldlLy, and courL
orders cancellaLlon of Lhe obllgaLlon
Art. 1260 - Iud|c|a| Dec|arat|on
Cnce Lhe conslgnaLlon has been duly made, Lhe debLor may ask Lhe [udge Lo order
Lhe cancellaLlon of Lhe obllgaLlon.
8efore Lhe credlLor has accepLed Lhe conslgnaLlon, or before a [udlclal declaraLlon
LhaL Lhe conslgnaLlon has been properly made, Lhe debLor may wlLhdraw Lhe Lhlng
or Lhe sum deposlLed, allowlng Lhe obllgaLlon Lo remaln ln force. (1180)
Cnce conslgnaLlon ls deemed proper, debLor should be released from Lhe
obllgaLlon
o CourL order Lo LhaL effecL
o CourL orders credlLor Lo accepL Lhe money/Lhlng
ConslgnaLlon ls reLroacLlve.
o aymenL deemed Lo have been made aL Lhe Llme of Lhe deposlL of
Lhe money/when Lhe Lhlng was placed aL Lhe dlsposal of Lhe courL
CredlLor may accepL elLher uncondlLlonally or wlLh reservaLlon.
o 8eservaLlon does noL compleLely exLlngulsh obllgaLlon.
W|thdrawa| of th|ng]sum by debtor - debLor may wlLhdraw Lhe Lhlng or
sum deposlLed.
o 8efore credlLor has accepLed Lhe conslgnaLlon
o 8efore a [udlclal declaraLlon LhaL Lhe conslgnaLlon has been
properly made
o 1hls ls because he ls sLlll Lhe owner of Lhe Lhlng
o CbllgaLlon shall conLlnue Lo remaln ln force
o Lxpenses pald by debLor


48
Art. 1261 - Cred|tor Author|zes Debtor to W|thdraw
lf, Lhe conslgnaLlon havlng been made, Lhe credlLor should auLhorlze Lhe debLor Lo
wlLhdraw Lhe same, he shall lose every preference whlch he may have over Lhe
Lhlng. 1he co-debLors, guaranLors and sureLles shall be released. (1181a)
ConLemplaLes a slLuaLlon where Lhere has already been a flndlng by Lhe
courL LhaL Lhe conslgnaLlon ls valld.
o ln Lhls case, lL ls lncumbenL on Lhe credlLor Lo obLaln from Lhe
courL Lhe Lhlng deposlLed.
o Powever, lf Lhe debLor wlLhdraws Lhe Lhlng, wlLh Lhe credlLor's
consenL - noLhlng Lo reLrleve
! LssenLlally revlvlng Lhe lndebLedness
! Powever, Lhe credlLor loses any preference Lo Lhe Lhlng
deposlLed - anyone can now go afLer lL
SLC1ICN 2. - Loss of the 1h|ng Due

Art. 1262 - Loss
An obllgaLlon whlch conslsLs ln Lhe dellvery of a deLermlnaLe Lhlng shall be
exLlngulshed lf lL should be losL or desLroyed wlLhouL Lhe faulL of Lhe debLor, and
before he has lncurred ln delay.
When by law or sLlpulaLlon, Lhe obllgor ls llable even for forLulLous evenLs, Lhe loss
of Lhe Lhlng does noL exLlngulsh Lhe obllgaLlon, and he shall be responslble for
damages. 1he same rule applles when Lhe naLure of Lhe obllgaLlon requlres Lhe
assumpLlon of rlsk. (1182a)
When a th|ng |s cons|dered |ost
o When lL perlshes
o Coes ouL of commerce
o ulsappears ln a way such LhaL lLs exlsLence ls unknown or lL
cannoL be recovered
When does |oss of a th|ng ext|ngu|sh an ob||gat|on to g|ve
o CbllgaLlon ls Lo dellver a speclflc or deLermlnaLe Lhlng
o Loss of Lhe Lhlng occurs wlLhouL faulL of Lhe debLor
o uebLor ls noL gullLy of delay
When does |oss NC1 ext|ngu|sh?
o When law so provldes
Lx. lf he ls ln delay
o When sLlpulaLed by parLles
o When naLure of obllgaLlon requlres Lhe assumpLlon of rlsk
o When obllgaLlon Lo dellver a speclflc Lhlng arlses from a crlme

Art. 1263 - Loss of a Gener|c 1h|ng
ln an obllgaLlon Lo dellver a generlc Lhlng, Lhe loss or desLrucLlon of anyLhlng of Lhe
same klnd does noL exLlngulsh Lhe obllgaLlon. (n)
Cenerlc Lhlng cannoL really be losL unless Lhe whole class of Lhe sald Lhlng
ls desLroyed - hence, obllgaLlon perslsLs.

Art. 1264 - art|a| Loss
1he courLs shall deLermlne wheLher, under Lhe clrcumsLances, Lhe parLlal loss of Lhe
ob[ecL of Lhe obllgaLlon ls so lmporLanL as Lo exLlngulsh Lhe obllgaLlon. (n)
art|a| Loss - Lhe courLs may conslder lL as a compleLe loss whlch
1hls happens lf Lhe loss ls so lmporLanL LhaL lL affecLs Lhe whole ob[ecL of
Lhe obllgaLlon.
Lx. CbllgaLlon Lo glve a speclflc compuLer wlLh a speclallzed
keyboard and monlLor, such LhaL Lhe parLs are dependenL on each
oLher.
! Loss of Lhe keyboard, Lhough only parLlal, renders Lhe whole
Lhlng useless.
uebLor may go Lo courL and declare LhaL Lhls parLlal loss has exLlngulshed
Lhe obllgaLlon.
Art. 126S - Loss of 1h|ng |n the ossess|on of the Debtor
Whenever Lhe Lhlng ls losL ln Lhe possesslon of Lhe debLor, lL shall be presumed LhaL
Lhe loss was due Lo hls faulL, unless Lhere ls proof Lo Lhe conLrary, and wlLhouL
pre[udlce Lo Lhe provlslons of arLlcle 1163. 1hls presumpLlon does noL apply ln case
of earLhquake, flood, sLorm, or oLher naLural calamlLy. (1183a)
lf debLor ls noL ln possesslon of Lhe Lhlng when lL ls losL, Lhe presumpLlon
does noL arlse.

49
uebLor musL prove LhaL he ls noL aL faulL, or LhaL loss was because of a
forLulLous evenL.
resumpLlon does noL apply ln case of naLural calamlLles.
Art. 1266 - Lega| or hys|ca| Imposs|b|||ty
1he debLor ln obllgaLlons Lo do shall also be released when Lhe presLaLlon becomes
legally or physlcally lmposslble wlLhouL Lhe faulL of Lhe obllgor. (1184a)
1hls lnvolves obllgaLlons Lo do."
o WlLhouL debLor's faulL, obllgaLlon becomes legally or physlcally
lmposslble
LffecL of lmposslblllLy of performance
o lmposslblllLy exLlngulshes Lhe obllgaLlon
o 1hls lmposslblllLy musL Lake place afLer Lhe consLlLuLlon of Lhe
obllgaLlon
klnds of lmposslblllLy
1. hys|ca| Imposs|b|||ty - ln purely personal obllgaLlons (obllgaLlons
where personal quallflcaLlons are lnvolved) deaLh or physlcal
lncapaclLy resulLs ln physlcal lmposslblllLy
Lx. A ls obllged Lo palnL 8's house. 1wo days laLer, A ls
aLLacked by a shark and loses boLh hls arms. Pe ls Lhus
released.
2. Lega| Imposs|b|||ty - CbllgaLlon cannoL be performed because lL ls
rendered lmposslble by provlslon of law
Art. 1267 - D|ff|cu|t 8eyond Contemp|at|on
When Lhe servlce has become so dlfflculL as Lo be manlfesLly beyond Lhe
conLemplaLlon of Lhe parLles, Lhe obllgor may also be released Lherefrom, ln whole
or ln parL. (n)
ulfflculLy alone does noL excuse Lhe debLor.
WhaL musL happen ls LhaL Lhe servlce ls so dlfflculL as Lo be man|fest|y
beyond the contemp|at|on of the part|es.
1hls ls Lhe prlnclpal of rebus slc sLanLlbus
o Where Lhe parLles sLlpulaLe ln Lhe llghL of cerLaln condlLlons
o When Lhese condlLlons cease Lo exlsL, Lhe conLracL also ceases Lo
exlsL
1hls ls one case where Lhe courL can enLer lnLo a conLracL and [udge
wheLher lL's Lhe performance ls sLlll wlLhln whaL Lhe parLles conLemplaLed
kequ|s|tes of kebus S|c Stant|bus
1. resLaLlon has become so dlfflculL Lo render
2. Servlce has become manlfesLly beyond conLemplaLlon of Lhe
parLles
Art. 1268 - roceeds from a Cr|m|na| Cffense
When Lhe debL of a Lhlng cerLaln and deLermlnaLe proceeds from a crlmlnal
offense, Lhe debLor shall noL be exempLed from Lhe paymenL of lLs prlce, whaLever
may be Lhe cause for Lhe loss, unless Lhe Lhlng havlng been offered by hlm Lo Lhe
person who should recelve lL, Lhe laLLer refused wlLhouL [usLlflcaLlon Lo accepL lL.
(1183)
AnoLher lnsLance where a forLulLous evenL does noL exLlngulsh Lhe
obllgaLlon
Lx . A sLole a waLch from 8, and was charged for lL. lf Lhe waLch ls
losL Lhrough a forLulLous evenL, A musL sLlll pay Lhe prlce of Lhe
waLch.
LxCL1lCn - lf Lhe credlLor refuses Lo accepL Lhe Lhlng when offered Lo
hlm by Lhe debLor

Art. 1269 - Cred|tor's k|ght of Act|on
1he obllgaLlon havlng been exLlngulshed by Lhe loss of Lhe Lhlng, Lhe credlLor shall
have all Lhe rlghLs of acLlon whlch Lhe debLor may have agalnsL Lhlrd persons by
reason of Lhe loss. (1186)
ueslgned Lo proLecL lnLeresLs of Lhe credlLor
Pe ls glven rlghL Lo proceed agalnsL a Lhlrd person responslble for Lhe loss
Lx. A ls obllged Lo glve 8 a speclflc horse. 1he horse ls losL Lhrough
Lhe faulL of C. A's obllgaLlon ls exLlngulshed, buL 8 ls allowed Lo
go afLer C Lo recover Lhe prlce of Lhe horse, wlLh damages.


30
SLC1ICN 3. - Condonat|on or kem|ss|on of the Debt

Art. 1270 - Condonat|on Def|ned
CondonaLlon or remlsslon ls essenLlally graLulLous, and requlres Lhe accepLance by
Lhe obllgor. lL may be made expressly or lmplledly.
Cne and Lhe oLher klnd shall be sub[ecL Lo Lhe rules whlch govern lnofflclous
donaLlons. Lxpress condonaLlon shall, furLhermore, comply wlLh Lhe forms of
donaLlon. (1187)
CondonaLlon : an acL of llberallLy
CredlLor decldes noL Lo enforce Lhe debLor's presLaLlon
o ln effecL, a donaLlon of Lhe obllgee's credlL ln favor of Lhe debLor
lL requlres Lhe lmplled/express consenL of Lhe debLor
Coverned by Lhe rules of lnofflclous donaLlon
o lnofflclous - Lhe amounL remlLLed encroaches on Lhe
leglLlme/successlonal rlghLs of Lhe helrs of Lhe condonlng credlLor
o Lx. CredlLor condones debL worLh 30k
o CredlLor glves blrLh Lo a chlld, when her properLles are only worLh
10,000 (Lhus, wlLh remlLLed debL, Lhe overall esLaLe ls 60k)
o Chlld has x of Lhls as hls leglLlme. Pence, free porLlon ls only
30,000. 1he remlsslon wlll only be 30,000.
CLher rules on donaLlon are provlded ln Lhe Clvll Code
Art. 1271 - De||very of a Cred|t to the Debtor
1he dellvery of a prlvaLe documenL evldenclng a credlL, made volunLarlly by Lhe
credlLor Lo Lhe debLor, lmplles Lhe renunclaLlon of Lhe acLlon whlch Lhe former had
agalnsL Lhe laLLer.
lf ln order Lo nulllfy Lhls walver lL should be clalmed Lo be lnofflclous, Lhe debLor
and hls helrs may uphold lL by provlng LhaL Lhe dellvery of Lhe documenL was made
ln vlrLue of paymenL of Lhe debL. (1188)
1hls arLlcle creaLes a presumpLlon : lf a prlvaLe documenL evldenclng credlL
ls glven by Lhe credlLor Lo Lhe debLor, lL lmplles LhaL he ls condonlng Lhe
debL.
Lx. romlssory noLe - lf Lhe credlLor glves Lhe debLor hls
promlssory noLe, lL lmplles LhaL he ls no longer lnLeresLed ln
Lhe debL.
1hls walver can be nulllfled by showlng LhaL lL ls lnofflclous.
o WhaL Lhe debLor can do ls show LhaL Lhe dellvery of Lhe documenL
was made because of paymenL, and noL because of remlsslon.

Art. 1272 - resumpt|on when Cred|t |s |n the ossess|on of the Debtor
Whenever Lhe prlvaLe documenL ln whlch Lhe debL appears ls found ln Lhe
possesslon of Lhe debLor, lL shall be presumed LhaL Lhe credlLor dellvered lL
volunLarlly, unless Lhe conLrary ls proved. (1189)
lf Lhe debLor has Lhe documenL and lL ls not known where he goL lL, Lhe
presumpLlon ls LhaL lL was volunLarlly glven by Lhe credlLor
lL ls belleved" LhaL presumpLlon of volunLary dellvery # presumpLlon of
payment, noL remlsslon. Cnly when lL ls known LhaL Lhere ls no paymenL
should Lhere be a presumpLlon of remlsslon.
Art. 1273 - Lxt|ngu|shment of Accessory Cb||gat|ons
1he renunclaLlon of Lhe prlnclpal debL shall exLlngulsh Lhe accessory obllgaLlons, buL
Lhe walver of Lhe laLLer shall leave Lhe former ln force. (1190)
Accessory fo||ows the pr|nc|pa| - exlsLence of Lhe accessory obllgaLlon
depends on Lhe exlsLence of Lhe prlnclpal obllgaLlon.
When prlnclpal ls walved, Lhe accessory ls walved as well.
8uL when accessory ls walved, prlnclpal remalns ln force.
Art. 1274 - Accessory Cb||gat|on of |edge
lL ls presumed LhaL Lhe accessory obllgaLlon of pledge has been remlLLed when Lhe
Lhlng pledged, afLer lLs dellvery Lo Lhe credlLor, ls found ln Lhe possesslon of Lhe
debLor, or of a Lhlrd person who owns Lhe Lhlng. (1191a)
|edge - a conLracL where Lhe debLor glves Lo Lhe credlLor or a Lhlrd
person a movable or lnsLrumenL evldenclng lncorporeal rlghLs ln order Lo
secure Lhe fulflllmenL of a prlnclpal obllgaLlon, such LhaL when Lhe
obllgaLlon ls fulfllled, Lhe Lhlng dellvered shall be reLurned wlLh all lLs frulLs
and accessorles.

31
lf Lhe Lhlng pledged ls found ln Lhe possesslon of Lhe debLor, Lhen Lhere ls a
presumpLlon LhaL Lhe obllgaLlon has been remlLLed.

SLC1ICN 4. - Confus|on or Merger of k|ghts

Art. 127S - When Cb||gat|on |s Lxt|ngu|shed
1he obllgaLlon ls exLlngulshed from Lhe Llme Lhe characLers of credlLor and debLor
are merged ln Lhe same person. (1192a)
Lx. A son owes hls faLher 10,000, and hls faLher dles, leavlng,
among oLhers, 10,000 owed by Lhe son Lo hls dad. ln Lhls
case, Lhere ls a merger.
cblttlck v. cA - wlfe flled a complalnL agalnsL her faLher for supporL ln
arrears. She dled, and her chlldren conLlnued Lhe case. 1he faLher dled. SC
held LhaL slnce Lhe chlldren are also helrs of Lhelr grandfaLher, Lhe
obllgaLlon had been exLlngulshed.
Art. 1276 - Lffect on Guarantors
Merger whlch Lakes place ln Lhe person of Lhe prlnclpal debLor or credlLor beneflLs
Lhe guaranLors. Confuslon whlch Lakes place ln Lhe person of any of Lhe laLLer does
noL exLlngulsh Lhe obllgaLlon. (1193)
lndebLedness guaranLeed by a Lhlrd person ls also exLlngulshed lf Lhere ls
confuslon/merger.
1hus, guaranLor ls beneflLLed because Lhe accessory obllgaLlon of Lhe
guaranLee ls exLlngulshed.
o Merger of persons of guaranLor and credlLor only exLlngulshes
accessory obllgaLlon, noL Lhe whole Lhlng.
o Merger of debLor and guaranLor only exLlngulshes Lhe accessory.
Art. 1277 - Confus|on |n Io|nt Cb||gat|ons
Confuslon does noL exLlngulsh a [olnL obllgaLlon excepL as regards Lhe share
correspondlng Lo Lhe credlLor or debLor ln whom Lhe Lwo characLers concur. (1194)
!olnL debLors owe only Lhelr share, and credlLors can only collecL from each
debLor hls respecLlve share.
Lx. A, 8, and C owe x 3,000.
! 1here ls merger ln persons of x and C.
! CbllgaLlon ls exLlngulshed as Lo Lhe 1,000 share of C, buL noL
Lo Lhe resL.
! A and 8 sLlll owe 1,000 each.
lf solldary - merger ln C and x exLlngulshes Lhe obllgaLlon.
o lf A pays Lhe 3,000 Lo x before Lhe merger, A can collecL from x
and 8 Lhelr respecLlve shares ln Lhe lndebLedness (1,000 each)

SLC1ICN S. - Compensat|on

Art. 1278 - Compensat|on Def|ned
CompensaLlon shall Lake place when Lwo persons, ln Lhelr own rlghL, are credlLors
and debLors of each oLher. (1193)
Compensat|on - exLlngulshmenL Lo Lhe concurrenL amounL of Lhe debLs of
Lwo persons, who, ln Lhelr own rlghL, are debLors and credlLors of each
oLher.
o 1he slmulLaneous balanclng of 2 obllgaLlons ln order Lo exLlngulsh
Lhem Lo Lhe exLenL ln whlch Lhe amounL of one ls covered by LhaL
of Lhe oLher.
klnds of compensaLlon
a. As Lo effecL/exLenL
1. 1ota| - boLh obllgaLlons are of Lhe same amounL, and
Lhus are enLlrely exLlngulshed.
2. art|a| - Lwo obllgaLlons are of dlfferenL amounLs and a
balance remalns. (parLlal only as Lo Lhe larger debL)
b. As Lo cause/orlgln
1. Lega| - Lakes place by operaLlon of law, even wlLhouL
knowledge of Lhe parLles
2. Vo|untary]Convent|ona| - Lakes place by agreemenL of
Lhe parLles
3. Iud|c|a| - Lakes place by order from a courL ln llLlgaLlon
4. Iacu|tat|ve - can be seL up by only one of Lhe parLles
Art. 1279 - kequ|s|tes of Compensat|on
ln order LhaL compensaLlon may be proper, lL ls necessary:

32
(1) 1haL each one of Lhe obllgors be bound prlnclpally, and LhaL he be aL Lhe same
Llme a prlnclpal credlLor of Lhe oLher,
(2) 1haL boLh debLs conslsL ln a sum of money, or lf Lhe Lhlngs due are consumable,
Lhey be of Lhe same klnd, and also of Lhe same quallLy lf Lhe laLLer has been sLaLed,
(3) 1haL Lhe Lwo debLs be due,
(4) 1haL Lhey be llquldaLed and demandable,
(3) 1haL over nelLher of Lhem Lhere be any reLenLlon or conLroversy, commenced by
Lhlrd persons and communlcaLed ln due Llme Lo Lhe debLor. (1196)
8equlslLes of CompensaLlon:
1. Mutua| pr|nc|pa| cred|tors and debtors - each one of Lhe obllgors ls bound
prlnclpally, and LhaL each of Lhem be aL Lhe same Llme a prlnclpal credlLor
of Lhe oLher.
2. 8oth |n money, or same k|nd - boLh debLs conslsL ln a sum of money, or lf
Lhe Lhlngs due are consumable, Lhey be of Lhe same klnd, and also of Lhe
same quallLy.
o Consumab|e - funglble", suscepLlble of subsLlLuLlon
o Ooq v. coott of Appeols - no compensaLlon could Lake place
because one parLy owed money, and Lhe oLher owed zlppers.
3. 8oth debts are due
o uebLs need noL be conLracLed aL Lhe same Llme
o arLles, however, can agree LhaL compensaLlon can be made even
lf debLs are noL yeL due.
o lN8 MoJecot v. uy - one of Lhe debLs was payable upon demand,
and no demand was made. 1here ls no compensaLlon, because
Lhe debLs were noL yeL due.
4. L|qu|dated and demandab|e
o uebLs musL be deLermlned and cerLaln.
o CompensaLlon cannoL Lake place where one of Lhe debLs ls noL
llquldaLed.
o compoolo Motltlmo v. cA - slnce legal lnLeresL was sLlll accrulng
on Lhe debL, lL was noL llquldaLed. 1hus, no compensaLlon
o Mlollbe v. nollll - no compensaLlon because a cerLaln amounL was
sLlll under llLlgaLlon, and Lhus, noL belng llquldaLed and cerLaln.
3. No controversy from th|rd persons - Cver nelLher of Lhem be any
reLenLlon or conLroversy commenced by Lhlrd persons and communlcaLed
ln due Llme Lo Lhe debLor.
o "Due 1|me" - perlod before legal compensaLlon was supposed Lo
Lake place
Lx. A owes 8 1,000, due on !an 1. 8 owes A 1,000, due on !an. 21.
! 1hlrd person C flled sulL agalnsL A, and was able Lo obLaln a
resoluLlon garnlshlng all money and credlLs of A (lncludlng Lhe
lndebLedness of 8 ln A's favor).
! lf 8 only found ouL abouL Lhe garnlshmenL on leb. 1, Lhen
compensaLlon would have seL ln already, and C cannoL make
use of Lhese credlLs Lo saLlsfy A's debL Lo C.
! lf 8 found ouL abouL Lhe garnlshmenL on !an 13, Lhen no
compensaLlon seLs ln.
Art. 1280 - Set-up by Guarantor
noLwlLhsLandlng Lhe provlslons of Lhe precedlng arLlcle, Lhe guaranLor may seL up
compensaLlon as regards whaL Lhe credlLor may owe Lhe prlnclpal debLor. (1197)
Guarantor - a person who promlses Lo pay Lhe credlLor ln case Lhe
prlnclpal debLor cannoL pay Lhe lndebLedness.
8efore a credlLor can go afLer Lhe guaranLor, he musL exhausL all posslble
ways Lo collecL debL from prlnclpal debLor.
o unless guaranLor ls bound solldarlly.
A posslble defense of a guaranLor ls LhaL compensaLlon had seL ln beLween
Lhe credlLor and Lhe prlnclpal debLor.
o 1hls ls Lhe case when Lhe guaranLor seLs up" compensaLlon
beLween Lhe Lwo parLles.
Art. 1281 - 1ota| or art|a| Compensat|on
CompensaLlon may be LoLal or parLlal. When Lhe Lwo debLs are of Lhe same
amounL, Lhere ls a LoLal compensaLlon. (n)
1ota| Compensat|on - when boLh debLs are equal, and boLh are
exLlngulshed.
art|a| Compensat|on - one of Lhe debLs ls blgger, Lhe smaller debL ls
deducLed from Lhe blgger debL.
Lx. A owes 8 2000. 8 owes A 1,300. A wlll sLlll owe 8 300.
Art. 1282 - Debts Not Due
1he parLles may agree upon Lhe compensaLlon of debLs whlch are noL yeL due. (n)
1hls ls an excepLlon Lo Lhe general rule LhaL debLs should be due for
compensaLlon Lo seL ln.

33
An example of conLracLual compensaLlon.

Art. 1283 - Iud|c|a| Set-off
lf one of Lhe parLles Lo a sulL over an obllgaLlon has a clalm for damages agalnsL Lhe
oLher, Lhe former may seL lL off by provlng hls rlghL Lo sald damages and Lhe
amounL Lhereof. (n)
ConLemplaLes a slLuaLlon of a [udlclal seL-off.
LssenLlally, compensaLlon when lL comes Lo damages.
Lx. A flles a collecLlon case agalnsL 8 for 1,000. 8 can flle a
counLerclalm for 1,000, clalmlng damages arlslng from Lhe same
LransacLlon
! 8 requesLs Lhe courL Lo off-set Lhe damages.
! lf courL agrees, Lhere can be compensaLlon.
Ooq v. cA - amounL of damages musL be duly proven ln order for [udlclal
seL-off Lo apply.
Art. 1284 - Compensat|on of Vo|dab|e Debts before Vo|ded
When one or boLh debLs are resclsslble or voldable, Lhey may be compensaLed
agalnsL each oLher before Lhey are [udlclally resclnded or avolded. (n)
1hese are valld unLll volded.
1hus, lf all requlslLes Lo a valld compensaLlon are presenL before conLracL ls
volded, Lhen compensaLlon can Lake place.
Art. 128S - Ass|gnment of the Cred|tor's k|ghts to a 1h|rd erson
1he debLor who has consenLed Lo Lhe asslgnmenL of rlghLs made by a credlLor ln
favor of a Lhlrd person, cannoL seL up agalnsL Lhe asslgnee Lhe compensaLlon whlch
would perLaln Lo hlm agalnsL Lhe asslgnor, unless Lhe asslgnor was noLlfled by Lhe
debLor aL Lhe Llme he gave hls consenL, LhaL he reserved hls rlghL Lo Lhe
compensaLlon.
lf Lhe credlLor communlcaLed Lhe cesslon Lo hlm buL Lhe debLor dld noL consenL
LhereLo, Lhe laLLer may seL up Lhe compensaLlon of debLs prevlous Lo Lhe cesslon,
buL noL of subsequenL ones.
lf Lhe asslgnmenL ls made wlLhouL Lhe knowledge of Lhe debLor, he may seL up Lhe
compensaLlon of all credlLs prlor Lo Lhe same and also laLer ones unLll he had
knowledge of Lhe asslgnmenL. (1198a)
SlLuaLlons when a credlLor glves hls credlL Lo a Lhlrd person:
1. Debtor has consented to the ass|gnment of r|ghts to a th|rd person -
cannoL seL up compensaLlon agalnsL Lhe asslgnee, whlch would perLaln Lo
Lhe debLor agalnsL Lhe orlglnal credlLor.
o LxcepLlon: when debLor reserves Lhls rlghL.
Lx. A owes 8 1,000, due on !an 1. 8 owes A 1,000 due on leb 2.
! Cn !an 3, 8 asslgnes hls credlL Lo C, wlLh consenL of A, and wlLhouL
reservaLlon as Lo rlghL of compensaLlon agalnsL 8.
! C demands paymenL from A on leb 3, and A cannoL clalm LhaL Lhe
debLs have been exLlngulshed because of compensaLlon
! lf A Lold 8 LhaL he was reservlng hls rlghL Lo compensaLlon, he can
valldly lnvoke LhaL Lhe debLs had been exLlngulshed.
2. Debtor d|d not consent to the ass|gnment of r|ghts - debLor can seL up
compensaLlon of debLs prlor Lo Lhe cesslon, buL noL of subsequenL ones.
Lx. A has Lwo debLs Lo 8.
uebL 1 ls due on !an 1. uebL 2 ls due on leb 1.
! 8 owes A ln Lhe same amounLs. uebL 1 ls due on March 1. uebL 2
ls due on March 3.
! Cn March 2, 8 glves all hls credlLs Lo C. A does noL consenL.
! A can say LhaL uebL 1 ls exLlngulshed due Lo compensaLlon,
because Lhey became due before Lhe cesslon.
! Pe cannoL say LhaL uebL 2 has been exLlngulshed, because lL
became due afLer Lhe cesslon.
3. Ass|gnment |s made w|thout the know|edge of the debtor
o uebLor can clalm compensaLlon for debLs prlor Lo Lhe cesslon
o uebLor can clalm compensaLlon for debLs afLer Lhe cesslon, as
long as he has no knowledge of Lhe cesslon.
o When he flnds ouL, he can no longer clalm compensaLlon for
debLs comlng afLer LhaL polnL.
Art. 1286 - D|fferent |aces
CompensaLlon Lakes place by operaLlon of law, even Lhough Lhe debLs may be
payable aL dlfferenL places, buL Lhere shall be an lndemnlLy for expenses of
exchange or LransporLaLlon Lo Lhe place of paymenL. (1199a)

34
Cnce all requlslLes are presenL, compensaLlon Lakes place by operaLlon of
law (legal compensaLlon).
arLles need noL noLlfy each oLher LhaL Lhey wanL Lo have Lhelr debLs
compensaLed.
1he lndemnlLy for LransporLaLlon ln Lhls arLlcle only applles ln a case of
parLlal compensaLlon.
Lx. A owes 8 1,000, due ln C81L 8ockwell. 8 owes A 300, due ln
C81L kaLlpunan.
! lf 8 has Lo commuLe Lo 8ockwell Lo recelve Lhe balance of 300,
he should be relmbursed by A, Lhe debLor.
! Art. 1247 - exLra[udlclal expenses Lo be borne by debLor

Art. 1287 - No Compensat|on
CompensaLlon shall noL be proper when one of Lhe debLs arlses from a deposlLum
or from Lhe obllgaLlons of a deposlLary or of a ballee ln commodaLum.
nelLher can compensaLlon be seL up agalnsL a credlLor who has a clalm for supporL
due by graLulLous LlLle, wlLhouL pre[udlce Lo Lhe provlslons of paragraph 2 of ArLlcle
301. (1200a)

Art. 1288 - C|v|| L|ab|||ty
nelLher shall Lhere be compensaLlon lf one of Lhe debLs conslsLs ln clvll llablllLy
arlslng from a penal offense. (n)
4 Cases where Legal CompensaLlon ls not a||owed:
1. Depos|tum, or from the ob||gat|ons of a depos|tory
Depos|t - consLlLuLed from Lhe momenL a person recelves a Lhlng
belonglng Lo anoLher wlLh Lhe obllgaLlon of safely keeplng lL and
reLurnlng lL.
Lx. A owes 8 1,000. revlously, A deposlLed wlLh 8 for
safekeeplng 1,000.
! 1here ls no compensaLlon, because 8's obllgaLlon Lo glve A Lhe
1000 arlses from Lhe obllgaLlons of a deposlLory.
2. 8a||ee |n Commodatum
A ballee ln commodaLum acqulres Lhe use of Lhe Lhlng loaned, buL
noL lLs frulLs.
8allee cannoL reLaln Lhe Lhlng loaned [usL because Lhe ballor (Lrue
owner of Lhe Lhlng) owes hlm someLhlng
Lx. lf 8 borrows Lhe S3 of A, he cannoL refuse Lo reLurn lL on
Lhe ground LhaL A owes hlm someLhlng.
3. Duty to support
CompensaLlon cannoL arlse lf Lhe oLher obllgaLlon ls of supporL
A faLher cannoL refuse Lo supporL hls son on Lhe ground LhaL Lhe
son owes hlm money
WlLhouL pre[udlce Lo Lhe provlslons" - refers Lo Lhe facL LhaL
supporL ln arrears can be compensaLed.
! of doubLful appllcaLlon, because Lhe lamlly Code has deleLed
Lhe provlslon menLloned.
4. C|v|| ||ab|||ty ar|s|ng from a pena| offense
Lx. A owes 8 1000. 8 sLole Lhe rlng of u worLh 1000.
! 8 cannoL clalm compensaLlon
! 8uL A, Lhe offended parLy, can clalm compensaLlon
! rohlblLlon only applles Lo Lhe accused
Art. 1289 - Severa| Debts
lf a person should have agalnsL hlm several debLs whlch are suscepLlble of
compensaLlon, Lhe rules on Lhe appllcaLlon of paymenLs shall apply Lo Lhe order of
Lhe compensaLlon. (1201)
See ArLs 1232-1234.

Art. 1290 - 8y Cperat|on of Law
When all Lhe requlslLes menLloned ln ArLlcle 1279 are presenL, compensaLlon Lakes
effecL by operaLlon of law, and exLlngulshes boLh debLs Lo Lhe concurrenL amounL,
even Lhough Lhe credlLors and debLors are noL aware of Lhe compensaLlon. (1202a)
CompensaLlon Lakes place by mere operat|on of |aw
o lrom Lhe momenL all requlslLes concur, compensaLlon Lakes place
auLomaLlcally.
o Lven wlLhouL Lhe agreemenL of parLles.
o 8eLroacLlve - from Lhe day Lhe requlslLes concurred.
Iu|| |ega| capac|ty - noL requlred
o 8ecause of Lhe facL LhaL lL Lakes place by operaLlon of law.


33
SLC1ICN 6. - Novat|on

Art. 1291 - k|nds of Novat|on
CbllgaLlons may be modlfled by:
(1) Changlng Lhelr ob[ecL or prlnclpal condlLlons,
(2) SubsLlLuLlng Lhe person of Lhe debLor,
(3) SubrogaLlng a Lhlrd person ln Lhe rlghLs of Lhe credlLor. (1203)
Novat|on - exLlncLlon of an obllgaLlon Lhrough Lhe creaLlon of a new one
whlch subsLlLuLes lL.
o 1he Clvll Code refers Lo exLlncLlve novaLlon and noL modlflcaLory
novaLlon.
klnds of novaLlon:
a. Accordlng Lo Crlgln
1. Lega| - Lakes place by operaLlon of law.
2. Convent|ona| - Lakes place by agreemenL of Lhe parLles.
b. Accordlng Lo how ConsLlLuLed
1. Lxpress - declared ln unequlvocal Lerms.
2. Imp||ed - old and new obllgaLlon are essenLlally lncompaLlble
wlLh each oLher.
c. Accordlng Lo LxLenL or LffecL
1. 1ota|]Lxt|nct|ve - old obllgaLlon ls compleLely exLlngulshed.
2. art|a|]Mod|f|catory - old obllgaLlon ls merely modlfled.
d. Accordlng Lo Sub[ecL
1. kea| or Cb[ect|ve - Lhe ob[ecLlve, cause, or prlnclpal condlLlons
of Lhe obllgaLlon are changed.
Ajox v. cA - Lo effecL an ob[ecLlve novaLlon, Lhere musL
be express declaraLlon LhaL old obllgaLlon ls
exLlngulshed, or LhaL Lhe new obllgaLlon be on every
polnL lncompaLlble wlLh Lhe new one.
2. ersona| or Sub[ect|ve - when Lhe person of Lhe debLor ls
subsLlLuLed/Lhlrd person ls subrogaLed ln rlghLs of Lhe credlLor
lblJ - 1o effecL a sub[ecLlve novaLlon ln Lhe person of
Lhe debLor, lL ls necessary LhaL old debLor be expressly
released from Lhe obllgaLlon.
3. M|xed - a comblnaLlon of real and personal novaLlon.

Art. 1292 - Lxpress and Imp||ed Novat|on
ln order LhaL an obllgaLlon may be exLlngulshed by anoLher whlch subsLlLuLe Lhe
same, lL ls lmperaLlve LhaL lL be so declared ln unequlvocal Lerms, or LhaL Lhe old
and Lhe new obllgaLlons be on every polnL lncompaLlble wlLh each oLher. (1204)
kequ|s|tes of Novat|on: (v.L.l.n.)
1. A prevlous va||d obllgaLlon
2. CapaclLy and |ntent|on of parLles Lo modlfy/exLlngulsh Lhe
obllgaLlon
3. ModlflcaLlon/Lxt|ngu|shment
4. CreaLlon of a new va||d ob||gat|on
All parLles musL consenL or be made parLles Lo Lhe new conLracL.
novaLlon ls never presumed. 2 lndlcaLlons of Lhe presence of novaLlon:
1. novaLlon ls expllclLly sLaLed and declared ln unequlvocal Lerms.
2. Cld and new obllgaLlons are lncompaLlble on every polnL.
! 1est - wheLher or noL Lhe Lwo obllgaLlons can sLand LogeLher,
each one havlng lLs lndependenL exlsLence.
! lf Lhey cannoL, Lhen Lhey are lncompaLlble and Lhe laLLer
novaLes Lhe flrsL one.
Art. 1293 - Subst|tut|ng a New Debtor
novaLlon whlch conslsLs ln subsLlLuLlng a new debLor ln Lhe place of Lhe orlglnal
one, may be made even wlLhouL Lhe knowledge or agalnsL Lhe wlll of Lhe laLLer, buL
noL wlLhouL Lhe consenL of Lhe credlLor. aymenL by Lhe new debLor glves hlm Lhe
rlghLs menLloned ln ArLlcles 1236 and 1237. (1203a)
SubsLlLuLlng a new debLor may be made wlLhouL Lhe knowledge and
consenL of Lhe orlglnal debLor.
CredlLor musL always consenL and have knowledge of Lhe replacemenL.
Art. 1294 - Inso|vency of the New Debtor |n Lxprom|s|on
lf Lhe subsLlLuLlon ls wlLhouL Lhe knowledge or agalnsL Lhe wlll of Lhe debLor, Lhe
new debLor's lnsolvency or non-fulflllmenL of Lhe obllgaLlons shall noL glve rlse Lo
any llablllLy on Lhe parL of Lhe orlglnal debLor. (n)
Subst|tut|on - person of Lhe debLor ls subsLlLuLed.
Subrogat|on - a Lhlrd person ls subrogaLed ln Lhe rlghLs of Lhe credlLor.
klnds of ersonal novaLlon

36
1. Lxprom|s|on - a Lhlrd person of hls own lnlLlaLlve and wlLhouL
knowledge or agalnsL Lhe wlll of Lhe orlglnal debLor assumes Lhe
laLLer's obllgaLlon wlLh consenL of credlLor
o CredlLor musL consenL.
o 8lghL of new debLor who pays - rlghL Lo beneflclal
relmbursemenL (ArL. 1236)
o lnsolvency of new debLor shall noL glve rlse Lo an acLlon
agalnsL Lhe old debLor
Lx. A owes 8 1,000. WlLhouL knowledge or consenL of
A, C commlLs Lo pay 8.
! novaLlon occurs only lf 8 agrees Lo release A
from hls obllgaLlon.
! 1hus, lf C only pays 8 parLlally, 8 cannoL go afLer
A anymore.
! C can go afLer A for relmbursemenL Lo Lhe
exLenL C was beneflLed.
2. De|egac|on - credlLor accepLs a Lhlrd person Lo Lake Lhe place of Lhe
debLor, aL Lhe suggesLlon of Lhe laLLer.
o CredlLor musL consenL
o 8lghL of new debLor who pays - relmbursemenL and
subrogaLlon (ArL. 1237)
8ooqoyoo v. cA - asslgnmenL of a lease conLracL by Lhe lessee needs
consenL of lessor, because asslgnmenL lnvolves Lransfer of obllgaLlons. lL
consLlLuLes novaLlon by subsLlLuLlon.

Art. 129S - Inso|vency of the New Debtor |n De|egac|on
1he lnsolvency of Lhe new debLor, who has been proposed by Lhe orlglnal debLor
and accepLed by Lhe credlLor, shall noL revlve Lhe acLlon of Lhe laLLer agalnsL Lhe
orlglnal obllgor, excepL when sald lnsolvency was already exlsLlng and of publlc
knowledge, or known Lo Lhe debLor, when Lhe delegaLed hls debL. (1206a)
Ceneral 8ule - ln delegaclon, when accepLed by Lhe credlLor, Lhe orlglnal
debLor's obllgaLlon ls compleLely exLlngulshed. 1hus, credlLor cannoL go
afLer old debLor ln case of lnsolvency of Lhe new debLor
LxcepLlons:
1. lnsolvency of new debLor has a|ready been ex|st|ng and of pub||c
know|edge when Lhe old debLor delegaLed Lhe debL.
2. lnsolvency of Lhe new debLor ls known to the o|d debtor when he
delegaLes Lhe debL.
ln boLh cases, Lhe credlLor musL not have know|edge of such lnsolvency.
o lf he has knowledge, he cannoL clalm Lhe beneflLs of Lhese
excepLlons.
ln boLh cases, Lhe lnsolvency musL have exlsLed aL Lhe Llme of Lhe
delegaLlon.
Art. 1296 - Lffect on Accessory Cb||gat|ons
When Lhe prlnclpal obllgaLlon ls exLlngulshed ln consequence of a novaLlon,
accessory obllgaLlons may subslsL only lnsofar as Lhey may beneflL Lhlrd persons
who dld noL glve Lhelr consenL. (1207)
Ceneral 8ule - accessory follows Lhe prlnclpal.
o lf prlnclpal ls exLlngulshed, accessorles are exLlngulshed
Lx. MorLgage, guaranLee, pledge
LxcepLlon - accessory obllgaLlons perslsL only lnsofar as Lhey may beneflL
Lhlrd persons who do noL glve consenL Lo Lhe novaLlon.
Lx. A owes 8 2,000, wlLh lnLeresL of 14.
! 8 owes C 280.
! l1 was agreed LhaL A would pay Lhe lnLeresL of 280 Lo C.
! 1hls ls a sLlpulaLlon ln favor of C, a Lhlrd person.
! LaLer, A and 8 novaLe Lhe obllgaLlon, and A ls now obllged Lo
glve a 1v seL ln paymenL of Lhe loan.
! lnsplLe of Lhe novaLlon, Lhe accessory obllgaLlon Lo glve C 280
subslsLs, unless C glves hls consenL Lo Lhe novaLlon.
Art. 1297 - New Cb||gat|on |s Vo|d, C|d one sha|| subs|st
lf Lhe new obllgaLlon ls vold, Lhe orlglnal one shall subslsL, unless Lhe parLles
lnLended LhaL Lhe former relaLlon should be exLlngulshed ln any evenL. (n)
A vold obllgaLlon lnLended Lo novaLe an old one has no legal effecL.
Ceneral 8ule - when new obllgaLlon ls vold, old obllgaLlon subslsLs.
LxcepLlon - when Lhe parLles sLlpulaLe LhaL ln any evenL, Lhe old obllgaLlon
shall be exLlngulshed.
Art. 1298 - Cr|g|na| Cb||gat|on was Vo|d
1he novaLlon ls vold lf Lhe orlglnal obllgaLlon was vold, excepL when annulmenL may
be clalmed only by Lhe debLor or when raLlflcaLlon valldaLes acLs whlch are
voldable. (1208a)

37
novaLlon presupposes an orlglnal valld obllgaLlon.
lf orlglnal obllgaLlon ls vo|d, a subsequenL obllgaLlon Lo novaLe lL ls also
vold.
o unless lL ls clear LhaL Lhe subsequenL one can sLand on lLself and
wlLhouL any reference Lo Lhe old one
lf orlglnal ls vo|dab|e, lL ls valld unLll annulled.
o 1hus, lL can be novaLed before lL ls annulled.
Lx. 1hrough force and lnLlmldaLlon, A was obllged Loglve 8 a
car. LaLer, also Lhrough force, presLaLlon was novaLed Lo
a house.
! ln such a way LhaL only A, Lhe debLor, can flle a case Lo annul lL.
! Pe does noL annul lL.
! 1hls novaLlon may be glven effecL.
o Also, lf by A's acLs Lhe obllgaLlon ls raLlfled, lL ls valld as well.
Art. 1299 - Sub[ect to a Suspens|ve or keso|utory Cond|t|on
lf Lhe orlglnal obllgaLlon was sub[ecL Lo a suspenslve or resoluLory condlLlon, Lhe
new obllgaLlon shall be under Lhe same condlLlon, unless lL ls oLherwlse sLlpulaLed.
(n)
Ceneral 8ule - new presLaLlon ls also sub[ecL Lo Lhe same suspenslve or
resoluLory condlLlon.
LxcepLlon - unless oLherwlse sLlpulaLed.
Art. 1300 - k|nds of Subrogat|on
SubrogaLlon of a Lhlrd person ln Lhe rlghLs of Lhe credlLor ls elLher legal or
convenLlonal. 1he former ls noL presumed, excepL ln cases expressly menLloned ln
Lhls Code, Lhe laLLer musL be clearly esLabllshed ln order LhaL lL may Lake effecL.
(1209a)
Subrogat|on - subsLlLuLlon of one person ln Lhe place of a credlLor wlLh
reference Lo a lawful clalm or rlghL, glvlng Lhe former all Lhe rlghLs of Lhe
laLLer, lncludlng rlghLs Lo employ all remedles Lo enforce paymenL
klnds of SubrogaLlon:
1. Convent|ona| - Lxpressly agreed upon by orlglnal parLles and Lhe
new credlLor.
2. Lega| - Lakes place by operaLlon of law (ArL. 1302)

Art. 1301 - Convent|ona| Subrogat|on
ConvenLlonal subrogaLlon of a Lhlrd person requlres Lhe consenL of Lhe orlglnal
parLles and of Lhe Lhlrd person. (n)
ConsenL of all parLles ls requlred - Lhls ls a conLracLual subrogaLlon.
Art. 1302 - When Lega| Subrogat|on |s resumed
lL ls presumed LhaL Lhere ls legal subrogaLlon:
(1) When a credlLor pays anoLher credlLor who ls preferred, even wlLhouL Lhe
debLor's knowledge,
(2) When a Lhlrd person, noL lnLeresLed ln Lhe obllgaLlon, pays wlLh Lhe express or
LaclL approval of Lhe debLor,
(3) When, even wlLhouL Lhe knowledge of Lhe debLor, a person lnLeresLed ln Lhe
fulflllmenL of Lhe obllgaLlon pays, wlLhouL pre[udlce Lo Lhe effecLs of confuslon as Lo
Lhe laLLer's share. (1210a)
3 cases where legal subrogaLlon ls presumed (subrogaLlon happens by
operaLlon of law):
1. CredlLor pays anoLher credlLor who ls preferred, even wlLhouL
knowledge of debLor
o referred Cred|tor - a credlLor who ls preferred because of Lhe
sLlpulaLlon of law
Lx. A owes 8 1000, secured by a flrsL morLgage. A owes C
2000, whlch ls unsecured. under Lhe law, 8 ls a preferred
credlLor. lf C pays Lhe debL of A Lo 8, Lhen C wlll be
subrogaLed ln 8's rlghL - he can Lhen foreclose on Lhe
morLgage of A.
2. When a Lhlrd person noL lnLeresLed ln Lhe obllgaLlon pays wlLh Lhe
express/LaclL approval of Lhe debLor
o uebLor agrees Lo Lhe paymenL.
Lx. A owes 8 1000. C pays 8 wlLh express/lmplled consenL of
A. C wlll be subrogaLed ln Lhe rlghLs of 8.
3. 1hlrd person lnLeresLed ln Lhe obllgaLlon pays weven wlLhouL
knowledge of Lhe debLor
o "person |nterested" - one who wlll be affecLed by Lhe paymenL
Lx. Suppose ln above example, C ls guaranLor of A (he ls
lnLeresLed ln Lhe fulflllmenL of obllgaLlon). lf C, Lhe
guaranLor, pays 8, even wlLhouL Lhe knowledge of A, C ls
subrogaLed ln Lhe rlghLs of 8.

38
! Confuslon Lakes place ln person of C.
! CuaranLy ls exLlngulshed, buL prlnclpal
obllgaLlon subslsLs.

Art. 1303 - Genera| Lffect of Subrogat|on
SubrogaLlon Lransfers Lo Lhe persons subrogaLed Lhe credlL wlLh all Lhe rlghLs
LhereLo apperLalnlng, elLher agalnsL Lhe debLor or agalnsL Lhlrd person, be Lhey
guaranLors or possessors of morLgages, sub[ecL Lo sLlpulaLlon ln a convenLlonal
subrogaLlon. (1212a)
LffecL of SubrogaLlon:
o SLepplng lnLo Lhe shoes' of Lhe credlLor
o Convent|ona| subrogat|on - parLles may sLlpulaLe and llmlL Lhe
scope of Lhls subrogaLlon
Art. 1304 - Lffect of art|a| Subrogat|on
A credlLor, Lo whom parLlal paymenL has been made, may exerclse hls rlghL for Lhe
remalnder, and he shall be preferred Lo Lhe person who has been subrogaLed ln hls
place ln vlrLue of Lhe parLlal paymenL of Lhe same credlL. (1213)
ConLemplaLes a slLuaLlon where Lhe orlglnal credlLor has been parLlally
pald by new credlLor:
o Pe remalns a credlLor Lo Lhe exLenL of Lhe balance of Lhe debL.
o ln case of lnsolvency of debLor, he has a preferenLlal rlghL above
Lhe new credlLor.
Lx. A owes 8 10,000. C pays 8 6,000, wlLh consenL of A. 8 remalns
credlLor wlLh balance of 4,000.


39
1|t|e II - CCN1kAC1S
Art. 130S - Contracts Def|ned
A conLracL ls a meeLlng of mlnds beLween Lwo persons whereby one blnds hlmself,
wlLh respecL Lo Lhe oLher, Lo glve someLhlng or Lo render some servlce. (1234a)

ConLracL:
a source of obllgaLlon and lL can also be deflned as a legally enforceable
agreemenL.
A [urldlcal convenLlon manlfesLed ln legal form, by vlrLue of whlch one or
more persons blnd Lhemselves ln favor of anoLher or oLhers, or
reclprocally, Lo Lhe fulflllmenL of a presLaLlon Lo glve, Lo do or noL Lo do.
An agreemenL whereby aL leasL one of Lhe parLles acqulres a rlghL, elLher lo
tem or lo petsooom, ln relaLlon Lo some person, Lhlng, acL or forbearance.
AgreemenLs falllng under Lhe SLaLuLe of lrauds are useless conLracLs for
Lhey cannoL be lmplemenLed whlch, ln effecL, negaLes Lhe exlsLence of a
conLracL.

CharacLerlsLlcs of ConLracLs:
1. Lssent|a| e|ements - wlLhouL Lhe followlng Lhere ls no conLracL (CCC):
a. ConsenL
b. Cb[ecL
c. Cause
2. Natura| e|ements - exlsL as parL of Lhe conLracL even lf Lhe parLles do noL
provlde for Lhem, because Lhe law, as suppleLory Lo Lhe conLracL, creaLes
Lhem.
3. Acc|denta| e|ements - Lhose whlch are agreed by Lhe parLles and whlch
cannoL exlsL wlLhouL belng sLlpulaLed.

number of arLles:
1he Code sLaLes Lwo persons" buL whaL ls meanL acLually ls Lwo parLles.
lor a conLracL Lo exlsL, Lhere musL be aL leasL Lwo parLles. A parLy can be
one or more persons.
Lx. Pusband & Wlfe - cannoL sell Lo each oLher as a proLecLlon of Lhe
con[ugal parLnershlp. 1hey can however enLer lnLo a conLracL of
agency.
SLages of ConLracLs:
1. Negot|at|on - covers Lhe perlod from Lhe Llme Lhe prospecLlve conLracLlng
parLles lndlcaLe lnLeresL ln Lhe conLracL Lo Lhe Llme Lhe conLracL ls
concluded (perfecLed).
2. erfect|on - Lakes place upon Lhe concurrence of Lhe essenLlal elemenLs of
Lhe conLracL.
o A conLracL whlch ls consensual as Lo perfecLlon ls so esLabllshed upon
a mere meeLlng of Lhe mlnds l.e. Lhe concurrence of offer and
accepLance, on Lhe ob[ecL and on Lhe cause Lhereof.
3. Consummat|on - beglns when Lhe parLles perform Lhelr respecLlve
underLaklngs under Lhe conLracL culmlnaLlng ln Lhe exLlngulshmenL
Lhereof.

klnds of ConLracLs:
1. kea| contract - a conLracL whlch requlres, ln addlLlon Lo Lhe above, Lhe
dellvery of Lhe ob[ecL of Lhe agreemenL, as ln a pledge or commoJotom
2. So|emn contract - compllance wlLh cerLaln formallLles prescrlbed by law ls
essenLlal ln order Lo make Lhe acL valld, Lhe prescrlbed form belng Lhereby
an essenLlal elemenL Lhereof.
3. Auto-contracts - one person conLracLs hlmself. As a general rule, lL ls
accepLed ln our law. 1he exlsLence of a conLracL does noL depend on Lhe
number of persons buL on Lhe number of parLles. 1here ls no general
prohlblLlon agalnsL auLo-conLracLs, hence, lL should be held valld.
4. Contracts of Adhes|on - conLracLs prepared by anoLher, conLalnlng
provlslons LhaL he deslres, and asks Lhe oLher parLy Lo agree Lo Lhem lf he
wanLs Lo enLer lnLo a conLracL.
Lx. 1ransporLaLlon LlckeLs - oLher parLy can re[ecL lL enLlrely

CLher 1erms:
erfect prom|se - dlsLlngulshed from a conLracL, ln LhaL Lhe laLLer
esLabllshes and deLermlnes Lhe obllgaLlons arlslng Lherefrom, whlle Lhe
former Lends only Lo assure and pave Lhe way for Lhe celebraLlon of a
conLracL ln Lhe fuLure.
Imperfect rom|se - mere unaccepLed offer
act - a speclal parL of Lhe conLracL, someLlmes lncldenLal and separable
for Lhe prlnclpal agreemenL.
St|pu|at|on - slmllar Lo a pacL, when Lhe conLracL ls an lnsLrumenL, lL refers
Lo Lhe essenLlal and dlsposlLlve parL, as dlsLlngulshed from Lhe exposlLlon
of Lhe facLs and anLecedenLs upon whlch lL ls based.


60
Art. 1306 - Guarantee of Ireedom to Contract
1he conLracLlng parLles may esLabllsh such sLlpulaLlons, clauses, Lerms and
condlLlons as Lhey may deem convenlenL, provlded Lhey are noL conLrary Lo law,
morals, good cusLoms, publlc order, or publlc pollcy. (1233a)
AuLonomous naLure of ConLracLs:
Ireedom to st|pu|ate terms and cond|t|ons - essence of Lhe conLracLual
sysLem provlded such sLlpulaLlons are noL conLrary Lo law, morals, good
cusLoms, publlc order, or publlc pollcy.
o rohlblLs a parLy from coerclng or lnLlmldaLlng or unduly
lnfluenclng anoLher Lo enLer lnLo a conLracL.
o Azcooo It. v. cA - Lhere ls noLhlng lmmoral or lllegal ln a provlslon
sLaLlng LhaL Lhe lessee shall be charged 1000/day lf Lhe lessee
shall noL vacaLe Lhe premlses on Lhe due daLe.
o Moollo 8oy clob cotpototloo v. cA - LermlnaLlon of a lease ls valld
when lL ls due Lo Lhe fallure of Lhe lessee Lo comply wlLh Lhe
lnsurance clause of Lhe conLracL. ConLracLs are respecLed as Lhe
law beLween Lhe conLracLlng parLles.
1eves v. leoples nomeslte ooJ noosloq cotp. - ln Lhe absence of express
leglslaLlon or consLlLuLlonal prohlblLlon, a courL may declare a conLracL
vold as agalnsL publlc pollcy when:
1. lL has a Lendency Lo ln[ure Lhe publlc.
2. lL ls agalnsL Lhe publlc good.
3. lL conLravenes some esLabllshed lnLeresL of socleLy.
4. lL ls lnconslsLenL wlLh sound pollcy and good morals whlch Lends
Lo undermlne Lhe securlLy of lndlvldual rlghLs, wheLher of
personal llablllLy or of prlvaLe properLy.

rlnclple of AuLonomy:
Ireedom to contract - any person has Lhe llberLy Lo enLer lnLo a conLracL
so long as Lhey are noL conLrary Lo law, morals, good cusLoms, publlc order
or publlc pollcy. 1he leglslaLure, under Lhe consLlLuLlon, ls prohlblLed from
enacLlng laws Lo prescrlbe Lhe Lerms of a legal conLracL.
Va||d|ty of St|pu|at|ons - any and all sLlpulaLlons noL conLrary Lo law,
morals, good cusLoms, publlc order or publlc pollcy ls valld.
1. Contrary to |aw - freedom of conLracL ls resLrlcLed by law for Lhe good
of Lhe publlc. lL ls fundamenLal posLulaLe LhaL however broad Lhe
freedom of Lhe conLracLlng parLles may be, lL does noL go so far as Lo
counLenance dlsrespecL for or fallure Lo observe a legal prescrlpLlon.
1he SLaLuLe Lakes precedence.
o Cnly laws exlsLlng aL Lhe Llme of Lhe execuLlon of a conLracL are
appllcable LhereLo and LhaL laLer sLaLuLes do noL govern sald
conLracL unless Lhe laLLer ls speclflcally lnLended Lo have a
reLroacLlve effecL.
! Ottlqos v. cA - consLrucLlon of a commerclal edlflce was
proper provlded LhaL Lhe area was reclasslfled from a
resldenLlal Lo a commerclal zone.
o Non-|mpa|rment of contracts or vested r|ghts c|auses - musL Lo
yleld Lo Lhe superlor and leglLlmaLe exerclse by Lhe SLaLe of pollce
power Lo promoLe Lhe healLh, morals, peace, educaLlon, good
order, safeLy and general welfare of Lhe people.
Lx.
! loklstoo lotetootloool Altlloes v. Ople - conLracLual
sLlpulaLlons conLravenlng provlslons of law deslgned Lo
proLecL laborers and employees are noL valld.
! sLlpulaLlons Lo pay usurlous lnLeresLs
! agreemenL Lo declare valld a law or ordlnance
2. Contrary to Mora|s - morals mean Lhose generally accepLed prlnclples
of morallLy whlch have recelved some klnd of soclal and pracLlcal
conflrmaLlon.
Lx.
! lblllpploe Ametlcoo Ceoetol losotooce v. Motoc - a provlslon LhaL
a bond may be exLended wlLhouL noLlflcaLlon ls noL necessarlly
conLrary Lo law or morals as Lo render Lhe sLlpulaLlon null and
vold.
! ue leoo v. cA - agreemenL by Lhe husband and wlfe Lo LermlnaLe
Lhelr relaLlons ls conLrary Lo law, llllplno morals and publlc pollcy.
1he LermlnaLlon of a marrlage by Lhe parLles cannoL be done on
Lhelr own and wlLhouL legal basls.
! a promlse Lo marry or noL Lo marry, Lo secure legal separaLlon, or
Lo adopL a chlld
! a promlse Lo change clLlzenshlp, professlon, rellglon or domlclle
! a promlse noL Lo hold publlc offlce or whlch llmlLs Lhe
performance of offlclal duLles
! a promlse Lo enLer a parLlcular pollLlcal parLy or separaLe from lL
3. Contrary to ub||c Crder - lf Lhe courL flnds LhaL Lhe conLracL as Lo Lhe
conslderaLlon or Lhe Lhlng Lo be done, conLravenes some esLabllshed

61
lnLeresL of socleLy, or ls lnconslsLenL wlLh sound pollcy and good
morals, or Lends Lo undermlne Lhe securlLy of lndlvldual rlghLs.
Lx.
! Common carrler cannoL sLlpulaLe for exempLlon for llablllLy unless
such exempLlon ls [usLlflable and reasonable and Lhe conLracL ls
freely and falrly made.
! aymenL Lo lnLermedlarles ln securlng lmporL llcenses or quoLa
allocaLlons
! ConLracL of scholarshlp sLlpulaLlng LhaL Lhe sLudenL musL remaln
ln Lhe same school and LhaL he walves hls rlghL Lo Lransfer Lo
anoLher school wlLhouL refundlng Lhe school

Art. 1307 - Innom|nate Contracts
lnnomlnaLe conLracLs shall be regulaLed by Lhe sLlpulaLlons of Lhe parLles, by Lhe
provlslons of 1lLles l and ll of Lhls 8ook, by Lhe rules governlng Lhe mosL analogous
nomlnaLe conLracLs, and by Lhe cusLoms of Lhe place. (n)
lnnomlnaLe ConLracLs:
1hose whlch are noL speclflcally governed by any provlslon ln Lhe Clvll Code
or speclal law buL whlch llkewlse lnvolve Lhe fulflllmenL or accompllshmenL
of some presLaLlons
1hey are acLually noL exLraordlnary conLracLs. Such conLracLs are common
and frequenLly encounLered.
Lx. conLracL Lo LranslaLe a book, conLracL Lo model,
conLracL beLween lawyer and cllenL
1hey are governed by Lhe followlng (SLAC):
a. SLlpulaLlon of Lhe parLles
b. Law - provlslons of obllgaLlons and conLracLs under 1lLle l and
ll of Lhe Clvll Code
c. 8ules governlng Lhe mosL analogous nomlnaLe conLracLs
! Sale, barLer or exchange, lease, parLnershlp, agency,
loan, deposlL, aleaLory, conLracLs, compromlses,
guaranLy, pledge, morLgage, and anLlchresls
! Coverned by speclal laws: lnsurance, real esLaLe
morLgage, and charLer parLy
d. CusLoms of Lhe place
o Custom - a rule of conducL formed by repeLlLlon of acLs
unlformly observed as a soclal rule, legally blndlng and
obllgaLory and lL musL be proved as a facL accordlng Lo
Lhe rules of evldence

lnnomlnaLe ConLracLs accordlng Lo klnd of resLaLlon:
1. do ut des (l glve LhaL you may glve) - An agreemenL ln whlch A wlll glve
one Lhlng Lo 8, so LhaL 8 wlll glve anoLher Lhlng Lo A.
2. do ut fac|as (l glve LhaL you may do) - An agreemenL under whlch A wlll
glve someLhlng Lo 8, so LhaL 8 may do someLhlng for A.
3. fac|o ut fac|as (l do LhaL you may do) - An agreemenL under whlch A does
someLhlng for 8, so LhaL 8 may render some oLher servlce for A.
4. fac|o ut des (l do LhaL you may glve) - An agreemenL under whlch A does
someLhlng for 8, so LhaL 8 may glve someLhlng Lo A.

Cases:
ulzoo v. Cobotto - a conLracL where respondenL shall pay for Lhe
obllgaLlons of Lhe peLlLloner, and Lhe peLlLloner granLs possesslon,
en[oymenL and Lhe use of cerLaln lands unLll full relmbursemenL, parLakes
Lhe naLure of an anLlchresls.
cotpos v. cA - conLracL beLween lawyer and cllenL ls analogous Lo a
conLracL of agency.

Art. 1308 - Mutua||ty of Contracts
1he conLracL musL blnd boLh conLracLlng parLles, lLs valldlLy or compllance cannoL
be lefL Lo Lhe wlll of one of Lhem. (1236a)
MuLuallLy of ConLracLs:
ln order LhaL obllgaLlons arlslng from conLracLs may have Lhe force of law
beLween Lhe parLles, Lhere musL be muLuallLy beLween Lhe parLles based
on Lhelr essenLlal equallLy. A conLracL conLalnlng a condlLlon whlch makes
lLs fulflllmenL dependenL upon Lhe excluslve wlll of Lhe conLracLlng parLles
ls vold. lN8 v. cA
Cotclo v. klto leqotJo loc. - a conLracL expressly glvlng Lo one parLy Lhe
rlghL Lo cancel Lhe same lf a resoluLory condlLlon Lherefor agreed upon ls
noL fulfllled, ls valld, Lhe reason belng LhaL when Lhe conLracL ls Lhus
cancelled, Lhe agreemenL of Lhe parLles ls ln reallLy belng fulfllled.
AllleJ 8ookloq cotp. v. cA - a sLlpulaLlon whlch sLaLes LhaL a conLracL may
be renewed for a llke Lerm aL Lhe opLlon of Lhe lessee ls valld slnce such
rlghL of Lhe lessee ls parL of Lhe conslderaLlon ln Lhe conLracL.

62
Contract of adhes|on - whereln a parLy, usually a corporaLlon, prepares
Lhe sLlpulaLlons ln Lhe conLracL, whlle Lhe oLher parLy merely afflxes hls
slgnaLure or hls adheslon LhereLo. 5etto v. cA
o noL per se vold.
o 8lndlng as ordlnary conLracLs because Lhe parLy who adheres Lo
Lhe conLracL ls free Lo re[ecL lL enLlrely.

CancellaLlon by Cne arLy:
Un||atera| Cance||at|on - [usL as nobody can be forced Lo enLer lnLo a
conLracL, ln Lhe same manner once a conLracL ls enLered lnLo, no parLy can
renounce lL unllaLerally or wlLhouL Lhe consenL of Lhe oLher.
o nobody ls allowed Lo enLer lnLo a conLracL, and whlle Lhe conLracL
ls ln effecL, leaves, denounces or dlsavows Lhe conLracL Lo Lhe
pre[udlce of Lhe oLher.
Upon St|pu|at|on - however, when Lhe conLracL so sLlpulaLes LhaL one may
LermlnaLe Lhe conLracL upon a reasonable perlod ls valld.
o !udlclal acLlon for Lhe resclsslon of Lhe conLracL ls no longer
necessary when Lhe conLracL so sLlpulaLes LhaL lL may be revoked
and cancelled for Lhe vlolaLlon of any of lLs Lerms and condlLlons.
1hls rlghL of resclsslon may be walved.

Art. 1309 - Determ|nat|on of erformance by a 1h|rd erson
1he deLermlnaLlon of Lhe performance may be lefL Lo a Lhlrd person, whose
declslon shall noL be blndlng unLll lL has been made known Lo boLh conLracLlng
parLles. (n)
LxcepLlon Lo MuLuallLy of ConLracLs (ArL. 1308)
A th|rd person may be called upon Lo declde wheLher or noL performance
has been done for Lhe fulflllmenL of Lhe conLracL. Such declslon becomes
blndlng when commun|cated Lo Lhe parLles.
Lx. A sold hls parcel of land Lo 8. lL was agreed LhaL C, a real esLaLe
appralser, would be Lhe one Lo deLermlne Lhe reasonable prlce of
Lhe land. C, Lhen flxed Lhe prlce afLer conslderlng all Lhe
clrcumsLances affecLlng Lhe value of Lhe land. C musL make known
hls declslon Lo A and 8 who wlll be bound by Lhe same.

Art. 1310 - When Determ|nat|on |s Inequ|tab|e
1he deLermlnaLlon shall noL be obllgaLory lf lL ls evldenLly lnequlLable. ln such case,
Lhe courLs shall declde whaL ls equlLable under Lhe clrcumsLances. (n)
LxcepLlon Lo MuLuallLy of ConLracLs (ArL. 1308)
Cuallfles deLermlnaLlon ln ArL. 1309
When Lhe declslon cannoL be arrlved due Lo |nequ|ty, Lhe courts shall
declde whaL ls equlLable for Lhe parLles lnvolved.

Art. 1311 - St|pu|at|on our Atru|
ConLracLs Lake effecL only beLween Lhe parLles, Lhelr asslgns and helrs, excepL ln
case where Lhe rlghLs and obllgaLlons arlslng from Lhe conLracL are noL
Lransmlsslble by Lhelr naLure, or by sLlpulaLlon or by provlslon of law. 1he helr ls noL
llable beyond Lhe value of Lhe properLy he recelved from Lhe decedenL.
lf a conLracL should conLaln some sLlpulaLlon ln favor of a Lhlrd person, he may
demand lLs fulflllmenL provlded he communlcaLed hls accepLance Lo Lhe obllgor
before lLs revocaLlon. A mere lncldenLal beneflL or lnLeresL of a person ls noL
sufflclenL. 1he conLracLlng parLles musL have clearly and dellberaLely conferred a
favor upon a Lhlrd person. (1237a)
8elaLlvlLy of ConLracLs (Ceneral 8ule):
8etween r|nc|pa|s (parLles) - conLracLs Lake effecL only beLween parLles
Lo Lhe same. A sLranger cannoL lnvoke Lhe conLracL of anoLher for hls own
lnLeresL or for a source of an alleged pre[udlce.
o loteqtoteJ lockoqloq cotp. v. cA - suppller prlvaLe respondenL ls
noL a parLy Lo Lhe agreemenL, hence cannoL be held llable for any
breach beLween Lhe conLracLlng parLles.
1ransm|ss|b|||ty to Ass|gns and ne|rs - Lhe law operaLes Lo effecL Lhe
Lransfer of a chosen of acLlon from one person Lo anoLher wlLhouL any
concurrlng acL on Lhe parL of Lhe parLles or lndeed wlLhouL Lhelr assenL.
o Pelrs are noL Lhlrd persons because Lhere ls prlvlLy of lnLeresL
beLween Lhem and Lhelr predecessor.
o 1ransfer of an lnLeresL ln land may be by marrlage, and by deaLh.
o ukn nolJloqs cotp. v. cA - upon acqulrlng Lhe properLy, Lhe helr
has acqulred all Lhe rlghLs and obllgaLlons of Lhe deceased lessor
wlLh respecL Lo Lhe properLy.
o 1ransmlsslon of rlghLs and obllgaLlons ln a conLracL may be agreed
upon by Lhe parLles.

63
o 1he helr may noL be held llable beyond Lhe value of Lhe properLy
recelved.
o 3 cases where conLracLs cannoL Lake effecL wlLh respecL Lo Lhe
helrs or asslgns (SnL):
1. Nature - of Lhe conLracL does noL allow Lransmlsslon
! Where acLs sLlpulaLed ln a conLracL requlre Lhe exerclse
of speclal knowledge, genlus, sklll, LasLe, ablllLy,
experlence, [udgmenL, dlscreLlon, lnLegrlLy, or oLher
personal quallflcaLlon of one or boLh parLles, Lhe
agreemenL ls of a personal naLure, and LermlnaLes on Lhe
deaLh of Lhe parLy who ls requlred Lo render such servlce
2. St|pu|at|on - LhaL no Lransmlsslon of rlghLs shall be allowed
3. Law - provldes non-Lransmlsslon

4 LxcepLlons Lo Lhe 8elaLlvlLy of ConLracLs:
1. Contracts our Autru| (ArL. 1311 par. 2) - enforcemenL of whlch may be
demanded by a Lhlrd parLy for whose beneflL lL has been made, alLhough
noL a parLy Lo Lhe conLracL, before Lhe sLlpulaLlon ln hls favor has been
revoked by Lhe conLracLlng parLles. 1here musL be a clear lnLenL Lo beneflL
Lhe Lhlrd parLy. lL ls lnsufflclenL LhaL Lhe Lhlrd parLy be merely lncldenLally
beneflLed.
o 8equlslLes of a SLlpulaLlon our AuLrul (SCLA):
a. 1here musL be a sLlpulaLlon ln favor of a Lhlrd person (who ls
noL necessarlly named)
b. 1he sLlpulaLlon musL be a parL, noL Lhe whole of Lhe conLracL
c. 1he conLracLlng parLles musL have clearly and dellberaLely
conferred a favor upon a Lhlrd person, noL a mere lncldenLal
beneflL or lnLeresL
d. nelLher of Lhe conLracLlng parLles bears Lhe legal
represenLaLlon or auLhorlzaLlon of Lhe Lhlrd parLy
e. 1he favored parLy musL have communlcaLed hls accepLance
of Lhe sLlpulaLlon Lo Lhe obllgor before lLs revocaLlon
2. Contracts creat|ng kea| k|ghts (ArL. 1312)
3. k|ght of Cred|tors to Impugn Iraudu|ent Contracts (ArL. 1313)
4. erson who Induces Another to V|o|ate a Contract (ArL. 1314)

SLlpulaLlon our AuLrul Cases:
Motmoot kesott notel v. Colooq - spouses may be held llable as MarmonL
hoLel ls a Lhlrd parLy who ls beneflLLed upon Lhe second memorandum of
agreemenL whlch Lhe spouses execuLed wlLh Marls 1radlng.
copolo v. llelJmoos losotooce co. loc. - lnsurance conLracL ls conLracL
pour auLrul. Any auLhorlzed drlver of Lhe lnsured Laxl company has a rlghL
of clalm ln case of a deaLh or bodlly ln[ury suffered Lhrough an accldenL.
MooJotlo vlllo, loc. v. cA - ln a LransacLlon beLween a resLauranL, bank
and a credlL card holder, Lhe card holder's offer Lo pay by means of hls
credlL card consLlLuLes noL only an accepLance of Lhe sald sLlpulaLlon buL
also an expllclL communlcaLlon of hls accepLance Lo Lhe obllgor.
oooq v. cA - when glven a rlghL of flrsL refusal, Lhe sale of sub[ecL
properLy Lo some oLher person consLlLuLes a revocaLlon of such rlghL.

Art. 1312 - Contracts Creat|ng kea| k|ghts 8|nd 1h|rd ersons
ln conLracLs creaLlng real rlghLs, Lhlrd persons who come lnLo possesslon of Lhe
ob[ecL of Lhe conLracL are bound Lhereby, sub[ecL Lo Lhe provlslons of Lhe MorLgage
Law and Lhe Land 8eglsLraLlon Laws. (n)
8eal 8lghLs ln roperLy:
A real rlghL dlrecLly affecLs properLy sub[ecL Lo lL.
Whoever ls ln possesslon of such properLy musL respecL LhaL real rlghL.
Lx. lf Lhe lessor LermlnaLes Lhe lease conLracL for a valld cause, Lhe
sublessee can be e[ecLed from Lhe leased premlses even lf he ls
noL a parLy Lo Lhe lease conLracL.

Art. 1313 - k|ght of Cred|tors to Impugn Iraudu|ent Contracts
CredlLors are proLecLed ln cases of conLracLs lnLended Lo defraud Lhem. (n)
Art. 1381(3) - provldes LhaL a conLracL shall be resclsslble lf lL ls
underLaken ln fraud of credlLors when Lhe laLLer cannoL ln any oLher
manner collecL Lhe clalm due Lhem.
Lven lf Lhe credlLor ls noL a parLy Lo Lhe conLracL lnLended Lo defraud hlm,
he ls glven legal personallLy by law Lo LermlnaLe Lhe conLracL.


64
Art. 1314 - L|ab|||ty of 1h|rd ersons kespons|b|e for 8reach of Contract
Any Lhlrd person who lnduces anoLher Lo vlolaLe hls conLracL shall be llable for
damages Lo Lhe oLher conLracLlng parLy. (n)
A sLranger owes Lo Lhe parLles Lo Lhe agreemenL a duLy noL Lo lnLerfere
wlLh lLs performance.
o 1hls covers every case where one person mallclously persuades
anoLher Lo break any conLracL wlLh a Lhlrd person.
Ma||c|ous act - lf Lhe persuaslon be used for Lhe lndlrecL purpose of
ln[urlng Lhe plalnLlff, or beneflLlng Lhe defendanL, aL Lhe expense of Lhe
plalnLlff.
o Lack of mallce precludes damages. 8uL lL does noL relleve
peLlLloner of Lhe legal llablllLy for enLerlng lnLo conLracLs and
causlng breach of exlsLlng ones.
1he parLy gullLy of such breach may, neverLheless, recover agalnsL Lhe one
who lnduces hlm Lo vlolaLe hls conLracL when Lhe laLLer, by such acLs and
persuaslon, lnLended Lo ln[ure Lhe oLher conLracLlng parLy or Lo coerce hlm
lnLo adopLlng a llne of buslness agalnsL hls wlll and [udgmenL
Damage - Lhe loss, hurL, or harm whlch resulLs from ln[ury and damages
are Lhe recompense or compensaLlon awarded for Lhe damage suffered.
5ooq llo 8oo v. cA
o Cne becomes llable ln an acLlon for damages for a non-
Lrespassory lnvaslon of anoLher's lnLeresL ln Lhe prlvaLe use and
en[oymenL of asseL lf (8lLS):
1. 1he oLher has properLy rlghLs and prlvlleges wlLh respecL
Lo Lhe use or en[oymenL lnLerfered wlLh.
2. 1he lnvaslon ls subsLanLlal.
3. 1he defendanL's conducL ls a legal cause of Lhe lnvaslon.
4. 1he lnvaslon ls elLher lnLenLlonal and unreasonable or
unlnLenLlonal and acLlonable under general negllgence
rules.
o LlemenLs of 1orL lnLerference (Lkl):
1. LxlsLence of a valld conLracL
2. knowledge on Lhe parL of Lhe Lhlrd person of Lhe exlsLence of
conLracL
3. lnLerference of Lhe Lhlrd person ls wlLhouL legal [usLlflcaLlon
or excuse

Art. 131S - erfect|on of Contracts and Imp||ed 1erms
ConLracLs are perfecLed by mere consenL, and from LhaL momenL Lhe parLles are
bound noL only Lo Lhe fulflllmenL of whaL has been expressly sLlpulaLed buL also Lo
all Lhe consequences whlch, accordlng Lo Lhelr naLure, may be ln keeplng wlLh good
falLh, usage and law. (1238)
Imp||ed terms - obllgaLlons noL sLlpulaLed ln a conLracL buL lncludes all
consequences LhaL may be ln keeplng wlLh good falLh, usage and law.
Lx. observance of proper dlllgence
dellvery lncludes all accesslons and accessorles
provlslons on forLulLous evenLs

Art. 1316 - kea| Contracts are erfected upon De||very
8eal conLracLs, such as deposlL, pledge and CommodaLum, are noL perfecLed unLll
Lhe dellvery of Lhe ob[ecL of Lhe obllgaLlon. (n)
Ceneral 8ule - conLracLs are perfecLed by mere consenL of Lhe parLles.
o LxcepLlons:
1. Contract of Sa|e - ownershlp over Lhe ob[ecL ls Lransferred only
upon acLual or consLrucLlve dellvery.
2. kea| Contracts
a. Depos|t - consLlLuLed from Lhe momenL a person
recelves a Lhlng belonglng Lo anoLher for Lhe purpose of
safely keeplng lL and reLurnlng Lhe same. (ArL. 1962)
b. |edge - consLlLuLed by Lhe owner of Lhe ob[ecL Lo
secure a loan. lL ls lndlspensable LhaL Lhe Lhlng pledged
be ln possesslon of Lhe credlLor.
c. Commodatum - ballee ln commodaLum acqulres Lhe use
of Lhe Lhlng loaned.

Art. 1317 - Unauthor|zed Contracts are Unenforceab|e
no one may conLracL ln Lhe name of anoLher wlLhouL belng auLhorlzed by Lhe laLLer,
or unless he has by law a rlghL Lo represenL hlm.
A conLracL enLered lnLo ln Lhe name of anoLher by one who has no auLhorlLy or
legal represenLaLlon, or who has acLed beyond hls powers, shall be unenforceable,
unless lL ls raLlfled, expressly or lmplledly, by Lhe person on whose behalf lL has
been execuLed, before lL ls revoked by Lhe oLher conLracLlng parLy. (1239a)

63
Ceneral rule - no person may conLracL ln Lhe name of anoLher.
o LxcepLlon - lf such person has by law a rlghL Lo represenL hlm.
Lx. arenLs exerclslng parenLal auLhorlLy have Lhe rlghL and
duLy Lo represenL Lhelr unemanclpaLed chlld.
Contract of Agency - a person blnds hlmself Lo render some servlce or Lo
do someLhlng ln represenLaLlon or on behalf of anoLher, wlLh Lhe consenL
or auLhorlLy of Lhe laLLer.
o 1he prlnclpal of Lhe agenL musL comply wlLh all Lhe obllgaLlons
whlch Lhe agenL may have conLracLed wlLh Lhe scope of hls
auLhorlLy.
o Whereln Lhe agenL has exceeded hls power, Lhe prlnclpal ls noL
bound excepL when he raLlfles lL expressly or LaclLly.
o When Lhe agenL exceeded hls auLhorlLy, Lhe prlnclpal ls solldarlly
llable wlLh Lhe agenL lf Lhe former allowed Lhe laLLer Lo acL as
Lhough he had full powers.
o When a sale of a plece of land or any lnLeresL Lhereln ls Lhrough
an agenL, Lhe auLhorlLy of Lhe laLLer shall be ln wrlLlng, or else, Lhe
sale shall be vold.
oo ko 5lo v. cA - lf a prlvaLe corporaLlon lnLenLlonally or negllgenLly
cloLhes lLs offlcers or agenLs wlLh apparenL power Lo perform acLs for lL,
Lhe corporaLlon cannoL deny LhaL Lhe exlsLence of such auLhorlLy, as Lo
lnnocenL Lhlrd persons deallng ln good falLh wlLh such offlcers or agenLs.
keqol lllms v. coocepcloo - such an agreemenL ls vold where Lhe agenL
was no longer acLlng on behalf of Lhe movle acLor.

Chapter 2: Lssent|a| kequ|s|tes of Contracts
F/1/.06 ,.3?494319
Art. 1318 - L|ements of a Contract
1here ls no conLracL unless Lhe followlng requlslLes concur:
(1) ConsenL of Lhe conLracLlng parLles,
(2) Cb[ecL cerLaln whlch ls Lhe sub[ecL maLLer of Lhe conLracL,
(3) Cause of Lhe obllgaLlon whlch ls esLabllshed. (1261)
"Concur" - all Lhe Lhree requlslLes musL be presenL. Absence of one
negaLes Lhe exlsLence of a conLracL.
1he ru|e on M0.4 2/64L53 - when boLh parLles are equally aL faulL.
o Vo|d and |nex|stent contracts - when any of Lhe elemenLs are
absenL potl Jellcto shall noL apply.
o Cstens|b|e contracts - when Lhe elemenLs are all presenL buL Lhe
conLracL ls vold, potl Jellcto shall apply.
Lx. purchase and dellvery of drugs

"/L5431 ) N $319/15
Art. 1319 - Consent Def|ned
ConsenL ls manlfesLed by Lhe meeLlng of Lhe offer and Lhe accepLance upon Lhe
Lhlng and Lhe cause whlch are Lo consLlLuLe Lhe conLracL. 1he offer musL be cerLaln
and Lhe accepLance absoluLe. A quallfled accepLance consLlLuLes a counLer-offer.
AccepLance made by leLLer or Lelegram does noL blnd Lhe offerer excepL from Lhe
Llme lL came Lo hls knowledge. 1he conLracL, ln such a case, ls presumed Lo have
been enLered lnLo ln Lhe place where Lhe offer was made. (1262a)
Consent - Lhe concurrence of Lhe wllls of Lhe offerer and accepLor as Lo
Lhe Lhlng and Lhe cause whlch consLlLuLe a conLracL.
o 8equlslLes of ConsenL:
1. ConsenL musL be manlfesLed by Lhe concurrence of Lhe
offer and Lhe accepLance (ArLs. 1319-1326)
2. ConLracLlng parLles musL possess Lhe necessary legal
capaclLy (ArLs. 1327-1329)
3. ConsenL musL be lnLelllgenL, free, sponLaneous and real
(ArLs. 1330-1346)

Cffer - a manlfesLaLlon of a wllllngness Lo enLer lnLo a bargaln so made as
Lo [usLlfy anoLher person ln undersLandlng LhaL hls assenL Lo LhaL bargaln ls
lnvlLed and wlll conclude lL.
o Maklng an offer means lnvlLlng an accepLance whlch, lf glven, wlll
flnally creaLe a conLracL.
o lL musL be so compleLe LhaL lLs accepLance wlll form an agreemenL
conLalnlng all Lhe Lerms necessary and lnLended by Lhe parLles, for
lL ls obvlous LhaL Lhere can be no agreemenL unLll lLs Lerms are
seLLled, and LhaL an offer whlch ls noL compleLe ls merely a sLep ln
Lhe negoLlaLlons.

66
o 1he followlng relaLlons, unLll a conLracL ls perfecLed, are noL
consldered blndlng commlLmenLs, and lf wlLhdrawn, such
wlLhdrawal ls effecLlve lmmedlaLely afLer lLs manlfesLaLlon such as
by lLs malllng and noL necessarlly when Lhe offeree learns of Lhe
wlLhdrawal:
1. Negot|at|on - ls formally lnlLlaLed by an offer
2. Imperfect prom|se (pollcltocloo) - ls merely an offer
3. ub||c advert|sements or so||c|tat|ons - are ordlnarlly
consLrued as mere lnvlLaLlons Lo make offers or only as
proposals.

Art. 1320 - Acceptance
An accepLance may be express or lmplled. (n)
Acceptance - musL exlsL Lo esLabllsh concurrence of Lhe wllls of Lhe
parLles, oLherwlse Lhere ls no consenL Lo form a conLracL.
! 5olooqo v. lottoles - where Lhe defendanL merely
offered Lhe properLy buL whlch offer was noL accepLed,
Lhere was no consenL.
o MusL be absoluLe - lL may be express or lmplled.
! AJelfo ltopettles loc. v. cA - excepL where formal
accepLance ls requlred, lL may be shown by acLs, conducL
or words of Lhe accepLlng parLy LhaL clearly manlfesL a
presenL lnLenLlon or deLermlnaLlon Lo accepL Lhe offer Lo
buy or sell.
o MusL be uncondlLlonal - lL musL be ldenLlcal Lo Lhe Lerms of Lhe
offer.
! lL musL noL vary from Lhe proposal by way of omlsslon,
addlLlon or alLeraLlon.
! Counter-offer - a quallfled accepLance whlch blnds
nelLher of Lhe parLles.
! IotJloe uovles v. cA - when Lhe accepLance of a
consLrucLlon bld was sub[ecL Lo cerLaln baslc Lerms and
condlLlons, lL was noL LanLamounL Lo a quallfled
accepLance. As Lo condlLlons:
Cond|t|on |mposed on the perfect|on of a
contract - fallure Lo comply resulLs ln Lhe fallure
of a conLracL.
Cond|t|on |mposed mere|y on the performance
of an ob||gat|on - fallure Lo comply glves Lhe
oLher parLy opLlons and/or remedles Lo proLecL
lnLeresLs.
o erson maklng Lhe offer musL have acLual knowledge of Lhe
accepLance.

Art. 1321 - Cfferer I|xes Manner, 1|me and |ace of Acceptance
1he person maklng Lhe offer may flx Lhe Llme, place, and manner of accepLance, all
of whlch musL be complled wlLh. (n)
Ceneral rule - offerer wlll noL be bound by an accepLance made by Lhe
accepLor ln any oLher manner Lhan LhaL speclfled by Lhe offerer.
o LxcepLlon - when Lhe offerer acqulesces ln Lhe change.
Motlos v. cA - a lessee may noL compel Lhe subsequenL owner of a
properLy Lo sell lL ln an amounL whlch Lhe lessee feels reasonable.
ConLracL of sale - Lhe manner of paymenL of Lhe purchase prlce ls an
essenLlal elemenL before a valld and blndlng conLracL of sale can exlsL.

Art. 1322 - Commun|cat|on of Acceptance to Agent
An offer made Lhrough an agenL ls accepLed from Lhe Llme accepLance ls
communlcaLed Lo hlm. (n)
Contract of Agency - a person blnds hlmself Lo render some servlce or Lo
do someLhlng ln represenLaLlon or on behalf of anoLher wlLh Lhe consenL
or auLhorlLy of Lhe laLLer.
When a sale of a plece of land or any lnLeresL Lhereln ls Lhrough an agenL,
Lhe auLhorlLy of Lhe laLLer shall be ln wrlLlng, oLherwlse Lhe sale ls vold.

Art. 1323 - When Cffer 8ecomes Ineffect|ve
An offer becomes lneffecLlve upon Lhe deaLh, clvll lnLerdlcLlon, lnsanlLy, or
lnsolvency of elLher parLy before accepLance ls conveyed. (n)
"8efore acceptance |s conveyed" - before accepLance has come Lo Lhe
acLual knowledge of Lhe offeror.
When an offer becomes lneffecLlve, noLhlng can be accepLed.
vllloooevo v. cA - an offer became lneffecLlve when a bank became
lnsolvenL and was placed under recelvershlp before lLs accepLance of Lhe
purchase of a cerLaln foreclosed properLy was communlcaLed Lo Lhe seller.
Pence, no conLracL was creaLed.

67

Art. 1324 - Contract of Cpt|on, Cpt|on er|od, Cpt|on Money
When Lhe offerer has allowed Lhe offeree a cerLaln perlod Lo accepL, Lhe offer may
be wlLhdrawn aL any Llme before accepLance by communlcaLlng such wlLhdrawal,
excepL when Lhe opLlon ls founded upon a conslderaLlon, as someLhlng pald or
promlsed. (n)
Cpt|on - a conLracL granLlng a prlvllege Lo buy or sell aL a deLermlned
prlce wlLhln an agreed Llme.
Cpt|on per|od - when Lhe offerer has allowed Lhe offeree a cerLaln perlod
Lo accepL Lhe offer.
Aoq o Asoocloo v. cA - rules on opLlon perlod:
L8lCu nC1 lCunu Cn A
CCnSluL8A1lCn
L8lCu PAS A SLA8A1L
CCnSluL8A1lCn
1he offerer ls sLlll free and has Lhe
rlghL Lo wlLhdraw Lhe offer before
lLs accepLance or lf an accepLance
was made, before Lhe offeror's
comlng Lo know of such facL, by
communlcaLlng LhaL wlLhdrawal Lo
Lhe offeree.
A conLracL of -opLlon ls deemed
perfecLed and lL would be a breach
of LhaL conLracL Lo wlLhdraw Lhe
offer durlng Lhe agreed perlod.
lf Lhe opLloner-offeror wlLhdraws
Lhe offer before lLs accepLance by
Lhe opLlonee-offeree, Lhe laLLer
may noL sue for speclflc
performance on Lhe proposed
conLracL slnce lL has falled Lo reach
lLs own sLage of perfecLlon.
1he rlghL Lo wlLhdraw musL noL be
exerclsed whlmslcally or arblLrarlly,
oLherwlse, lL could glve rlse Lo a
damage clalm under ArL. 19 of Lhe
Clvll Code.

1he opLloner-offeror renders
hlmself llable for damages for
breach of Lhe opLlon.
5etto v. cA - an opLlonal conLracL ls a prlvllege exlsLlng only ln one parLy-
Lhe buyer.
o Pe ls glven Lhe rlghL Lo declde Lo purchase or noL, a cerLaln
merchandlse or properLy, aL any Llme wlLhln Lhe agreed perlod, aL
a flxed prlce.
Cons|derat|on - ln an opLlon conLracL, may be anyLhlng of value, unllke ln
sale where lL musL be Lhe prlce cerLaln ln money or lLs equlvalenL.
Larnest money - consldered parL of Lhe prlce ln a conLracL of sale and can
be a proof of Lhe perfecLlon of Lhe conLracL of sale.
o Powever, lL ls noL Lhe glvlng of Lhe earnesL money pet se, buL Lhe
proof of Lhe concurrence of all Lhe essenLlal elemenLs of Lhe
conLracL of sale whlch esLabllshes Lhe exlsLence of a perfecLed
sale.

Art. 132S - 8us|ness Advert|sements
unless lL appears oLherwlse, buslness adverLlsemenLs of Lhlngs for sale are noL
deflnlLe offers, buL mere lnvlLaLlons Lo make an offer. (n)
Ceneral 8ule - adverLlsemenLs of Lhlngs for sale are mere lnvlLaLlons Lo
make an offer.
o LxcepLlon - unless lL appears oLherwlse or where such
adverLlsemenL may consLlLuLe an offer whlch ls cerLaln.

Art. 1326 - Advert|sements for 8|dders
AdverLlsemenLs for bldders are slmply lnvlLaLlons Lo make proposals, and Lhe
adverLlser ls noL bound Lo accepL Lhe hlghesL or lowesL bldder, unless Lhe conLrary
appears. (n)
IotJloe uovles loc. v. cA - when a company sLarLs Lhe process of a blddlng
and dlssemlnaLes Lhe documenL denomlnaLed Lhe 1erms CondlLlons of
Lhe 8lddlng"Lo Lhe bldders, Lhe dlssemlnaLlon of Lhe sald documenLs
consLlLuLes an adverLlsemenL Lo bld ln Lhe pro[ecL. 1he bld proposals or
quoLaLlons submlLLed by Lhe prospecLlve suppllers are Lhe offers. 1he
favorable reply of Lhe company Lo one of Lhe prospecLlve suppllers ls Lhe
accepLance.

Art. 1327 - ersons who Cannot G|ve Consent
1he followlng cannoL glve consenL Lo a conLracL:
(1) unemanclpaLed mlnors,
(2) lnsane or demenLed persons, and deaf-muLes who do noL know how Lo wrlLe.
(1263a)
ersons who are capable cannoL allege Lhe lncapaclLy of Lhose wlLh whom
Lhey conLracLed Lo annul Lhe conLracL.


68
unemanclpaLed Mlnors:
LmanclpaLlon Lakes place by Lhe aLLalnmenL of ma[orlLy age whlch
commences aL Lhe age of 18 years.
Any conLracL enLered lnLo by an unemanclpaLed person ls annullable or
voldable.
o unless Lhey raLlfy Lhe same upon reachlng Lhe age of ma[orlLy.
Cnly Lhe mlnor can lnvoke Lhe ground LhaL a conLracL ls annullable
because, aL Lhe Llme lL was enLered lnLo, he was sLlll a mlnor.
MlsrepresenLaLlon by a Mlnor:
a. 8toqoozo v. ue vlllo Abtllle (passlve mlsrepresenLaLlon) - where
mlnors slgned a promlssory noLe wlLhouL Lelllng Lhe credlLor Lhelr
ages, and where Lhe credlLor soughL Lo enforce Lhe promlssory noLe
agalnsL Lhem, lL was held LhaL Lhe mlnors can seL up Lhe defense of
mlnorlLy Lo reslsL clalm.
o Mlnors have no [urldlcal duLy Lo dlsclose Lhelr lnablllLy or age.
o Lven lf Lhe wrlLLen conLracL ls unenforceable because of non-
age, Lhey shall make resLlLuLlon Lo Lhe exLenL LhaL Lhey may
have proflLed by Lhe money Lhey recelved.
b. MetcoJo v. spltlto (acLlve mlsrepresenLaLlon) - documenL slgned by
Lhe mlnor speclflcally sLaLed he was of age. 1he mlnor ls esLopped
from seLup Lhe defense of mlnorlLy.

lnsane or uemenLed ersons:
ConLracLs enLered lnLo by lnsane or demenLed persons are annullable, noL
vold ab lnlLlo.
o valld up Lo Lhe Llme Lhey are rendered lneffecLlve by Lhe courLs.
o lnsanlLy of Lhe oLher parLy aL Lhe Llme of Lhe perfecLlon of Lhe
conLracL musL be proven.
o When Lhe lnsane ls noL under a guardlan and Lhe oLher
conLracLlng parLy has no reasonable cause Lo belleve hlm
oLherwlse lnsane, Lhe agreemenL ls valld lf equlLable and
beneflclal Lo such lnsane person.
3 classes of menLal lncapaclLy:
1. Id|ot - one who has been lnsane from blrLh.
2. Lunat|c - one who was aL one Llme sane, buL who from some cause
or oLher has losL use of hls reason.
3. Menta||y Weak - noL LoLally lncapable of LransacLlng buslness or
managlng affalrs.

ueaf-muLes:
8elng deaf-muLe ls noL by lLself alone a dlsquallflcaLlon for glvlng consenL.
1he law refers Lo Lhe deaf-muLe who does noL know how Lo wrlLe.

Art. 1328 - Luc|d Interva|s, Drunkenness, nypnot|c Spe||
ConLracLs enLered lnLo durlng a lucld lnLerval are valld. ConLracLs agreed Lo ln a
sLaLe of drunkenness or durlng a hypnoLlc spell are voldable. (n)
Lucld lnLerval:
Luc|d |nterva| - LhaL perlod of Llme when an lnsane person acLs wlLh
reasonable undersLandlng, comprehenslon and dlscernmenL wlLh respecL
Lo whaL he ls dolng.
Lunacy may be lnLermlLLenL ln characLer, buL when one ls shown Lo have
been menLally deranged aL a recenL perlod anLerlor Lo Lhe execuLlon of Lhe
conLracL, LhaL condlLlon ls presumed Lo conLlnue and Lhe burden ls on Lhe
oLher parLy Lo show LhaL Lhe agreemenL was enLered lnLo durlng a lucld
lnLerval.

urunkenness or PypnoLlc Spell:
Intox|cat|on - musL be such a characLer as Lo perpeLuaLe an undue
advanLage over Lhe drunken person.
o lL musL render Lhe person lncapable of lnLelllgenL assenL and
deprlved of Lhe power Lo know whaL he ls dolng.
o AnyLhlng shorL of Lhls wlll noL lnvalldaLe Lhe conLracL.
o An agreemenL made by a person when so drunk, ls voldable aL Lhe
lnLoxlcaLed person's opLlon under any of Lhe followlng (ClC):
1. When lL appears LhaL Lhe drunkenness was broughL abouL by
Lhe opposlLe parLy
2. 1haL a fraudulenL advanLage was Laken of lL
3. 1haL Lhe drunkenness was so compleLe as Lo deprlve Lhe
parLy of hls reason of an agreelng mlnd
nypnos|s - an arLlflclally lnduced sLaLe, resembllng sleep, buL
characLerlzed by exaggeraLed suggesLlblllLy and conLlnued responslveness
Lo Lhe volce of Lhe hypnoLlsL.

Art. 1329 - Incapac|ty Sub[ect to Mod|f|cat|ons
1he lncapaclLy declared ln ArLlcle 1327 ls sub[ecL Lo Lhe modlflcaLlons deLermlned
by law, and ls undersLood Lo be wlLhouL pre[udlce Lo speclal dlsquallflcaLlons
esLabllshed ln Lhe laws. (1264)

69
1he 8ules of CourL provlde a llsL of lncompeLenLs who need guardlanshlp:
o persons sufferlng from Lhe penalLy of clvll lnLerdlcLlon
o hosplLallzed lepers
o prodlgals
o deaf and dumb who are unable Lo wrlLe and read
o Lhose of unsound mlnd (even Lhough Lhey have lucld lnLervals)
o persons noL belng of unsound mlnd buL by reason of age, dlsease,
weak mlnd, and oLher slmllar causes cannoL, wlLhouL ouLslde ald,
Lake care of Lhemselves and manage Lhelr properLy-becomlng an
easy prey for decelL and explolLaLlon.
1he lncapaclLy Lo glve consenL (ArLs. 1327 & 1328) Lo conLracLs renders Lhe
conLracL merely voldable, whlle speclal dlsquallflcaLlon (ArL. 1329) makes lL
vold.

Art. 1330 - Character|st|cs of Consent
A conLracL where consenL ls glven Lhrough mlsLake, vlolence, lnLlmldaLlon, undue
lnfluence, or fraud ls voldable. (1263a)
MeeLlng of Lhe mlnds musL be free, volunLary, wlllful and wlLh reasonable
undersLandlng of Lhe varlous obllgaLlons Lhe parLles lnLend Lo be bound.
M|stake, |nt|m|dat|on, v|o|ence, undue |nf|uence, fraud - grounds Lo
annul a conLracL because Lhere ls no real assenL Lo Lhe conLracL.
Int|m|dat|on, v|o|ence, undue |nf|uence - acLs of duress where Lhe
coerced parLy ls compelled Lo execuLe Lhe conLracL agalnsL hls wlll.
A conLracL obLalned Lhrough duress or mlsLake ls voldable or annullable
under ArL. 1390.

Art. 1331 - M|stake or Lrror
ln order LhaL mlsLake may lnvalldaLe consenL, lL should refer Lo Lhe subsLance of Lhe
Lhlng whlch ls Lhe ob[ecL of Lhe conLracL, or Lo Lhose condlLlons whlch have
prlnclpally moved one or boLh parLles Lo enLer lnLo Lhe conLracL.
MlsLake as Lo Lhe ldenLlLy or quallflcaLlons of one of Lhe parLles wlll vlLlaLe consenL
only when such ldenLlLy or quallflcaLlons have been Lhe prlnclpal cause of Lhe
conLracL.
A slmple mlsLake of accounL shall glve rlse Lo lLs correcLlon. (1266a)
MlsLake:
AnnulmenL of conLracL on Lhe ground of error ls llmlLed Lo cases ln whlch lL
may reasonably be sald LhaL wlLhouL such error Lhe consenL would noL
have been glven.
lor mlsLake Lo make a conLracL voldable or annullable, Lhe law sLaLes LhaL
Lhe consenL musL elLher refer Lo Lhe (SC):
1. Substance of Lhe Lhlng whlch ls Lhe ob[ecL of Lhe conLracL
2. Cond|t|ons whlch prlnclpally moved Lhe parLles Lo enLer lnLo a
conLracL
! Un||atera| m|stake - of whlch Lhe oLher parLy ls enLlrely
lgnoranL and Lo whlch he ln no way conLrlbuLes, wlll noL
affecL Lhe agreemenL or afford ground for lLs avoldance
or resclsslon, unless lL ls such a mlsLake as goes Lo Lhe
subsLance of Lhe agreemenL lLself.
! Ident|ty or qua||f|cat|ons - even when Lhere ls no error
as Lo person, ls a cause vlLlaLlng consenL, lf such
quallflcaLlons have been Lhe prlnclpal cause of Lhe
conLracL.
! Mot|ve - does noL affecL Lhe conLracL unless such
moLlve was a condlLlon of Lhe consenL glven, because an
accldenLal elemenL ls, by Lhe wlll of Lhe parLles,
converLed lnLo a subsLanLlal elemenL.
5pooses neloztlcb 1bels ooJ 8etty 1bels v. cA - MlsLake lnvolves elLher:
1. Ignorance - absence of knowledge whlch respecL Lo a Lhlng.
2. M|stake proper|y speak|ng - a wrong concepLlon abouL sald
Lhlng or a bellef ln Lhe exlsLence of some clrcumsLance, facL or
evenL whlch ln reallLy does noL exlsL.
A slmple mlsLake of accounL shall glve rlse Lo lLs correcLlon - lL does noL
go lnLo Lhe essenLlals of a conLracL.

Art. 1332 - 8urden of roof |n case of Iraud or M|stake
When one of Lhe parLles ls unable Lo read, or lf Lhe conLracL ls ln a language noL
undersLood by hlm, and mlsLake or fraud ls alleged, Lhe person enforclng Lhe
conLracL musL show LhaL Lhe Lerms Lhereof have been fully explalned Lo Lhe former.
(n)
resumpLlon - when enLerlng lnLo a conLracL, Lhe parLles are presumed Lo
have undersLood Lhe Lerms of Lhe conLracL Lhey volunLarlly slgned
especlally when Lhere ls proof LhaL Lhey are educaLed.

70
o May be rebuLLed by evldence LhaL Lhe person lnvoklng Lhe same
has elLher of Lhese condlLlons:
! lnablllLy Lo read
! lnablllLy Lo undersLand Lhe language of Lhe conLracL
8urden of proof shlfLs Lo Lhe one enforclng Lhe conLracL Lo show LhaL Lhe
Lerms have been explalned Lo Lhe oLher parLy.
1he facL of noL undersLandlng ls noL enough, lL musL be coupled wlLh fraud.
lostoo v. cA - a deed of deflnlLe sale was ruled Lo be an equlLable
morLgage where an llllLeraLe woman was made Lo belleve LhaL whaL she
slgned evldenced an lndebLedness Lo Lhe credlLor.
llm v. cA - where a conLracL was wrlLLen ln Lngllsh slgned by an elderly
woman who clalmed LhaL she dld noL undersLand lL, was upheld because
fraud was noL proven.
Attlolo v. Mobllom - upheld Lhe cause of an llllLeraLe where her slsLer
fraudulenLly had her slgn a documenL lncludlng Lhe parLlLlon of her own
properLy.

Art. 1333 - know|edge of k|sk
1here ls no mlsLake lf Lhe parLy alleglng lL knew Lhe doubL, conLlngency or rlsk
affecLlng Lhe ob[ecL of Lhe conLracL. (n)
lf Lhe parLles are consclous of Lhelr lgnorance as Lo Lhe exlsLence of some
facLs, Lhe non-exlsLence of such facLs ls of no consequence.
wooJ v. 8oyotoo - conLracL cannoL be annulled where a 1opaz Lurned ouL
Lo be acLually a ulamond because Lhere was consclous uncerLalnLy and
boLh parLles Look Lhe rlsk.

Art. 1334 - M|stake of Law May V|t|ate Consent
MuLual error as Lo Lhe legal effecL of an agreemenL when Lhe real purpose of Lhe
parLles ls frusLraLed, may vlLlaLe consenL. (n)
Ceneral rule - A unllaLeral mlsLake of law as Lo Lhe legal effecL of an
agreemenL ls noL a ground Lo annul a conLracL.
o LxcepLlon - when Lhe followlng requlslLes concur:
1. 1he mlsLake as Lo Lhe legal effecL of Lhe agreemenL musL be
muLual.
2. Such muLual mlsLake frusLraLes Lhe real purpose of Lhe
parLles.

Art. 133S - V|o|ence or Iorce
1here ls vlolence when ln order Lo wresL consenL, serlous or lrreslsLlble force ls
employed.
1here ls lnLlmldaLlon when one of Lhe conLracLlng parLles ls compelled by a
reasonable and well-grounded fear of an lmmlnenL and grave evll upon hls person
or properLy, or upon Lhe person or properLy of hls spouse, descendanLs or
ascendanLs, Lo glve hls consenL.
1o deLermlne Lhe degree of lnLlmldaLlon, Lhe age, sex and condlLlon of Lhe person
shall be borne ln mlnd.
A LhreaL Lo enforce one's clalm Lhrough compeLenL auLhorlLy, lf Lhe clalm ls [usL or
legal, does noL vlLlaLe consenL. (1267a)
V|o|ence - refers Lo physlcal force or compulslon.
o 1here ls LoLal absence of free wlll ln case a person ls compelled Lo
enLer lnLo a conLracL Lhrough vlolence.
o 8equlslLes of vlolence:
1. LhaL Lhe physlcal force employed musL be lrreslsLlble or of
such degree LhaL Lhe vlcLlm has no oLher course, under Lhe
clrcumsLances, buL Lo submlL.
2. LhaL such force ls Lhe deLermlnlng cause ln glvlng Lhe consenL
Lo Lhe conLracL.
Int|m|dat|on - refers Lo moral force or compulslon.
o lL ls necessary LhaL Lhe LhreaLs and clrcumsLances be of a
characLer as Lo exclLe Lhe reasonable apprehenslons of a person
of ordlnary courage, and LhaL Lhe agreemenL be made under Lhe
lnfluence of such LhreaLs or menace.
o 1hreaL musL be Langlble and dlrecL
o 8equlslLes of lnLlmldaLlon:
1. LhaL Lhe lnLlmldaLlon musL be Lhe deLermlnlng cause of Lhe
conLracL, or musL have caused Lhe consenL Lo be glven.
2. LhaL Lhe LhreaLened acL be un[usL or unlawful.
3. LhaL Lhe LhreaL be real and serlous, Lhere belng an evldenL
dlsproporLlon beLween Lhe evll and Lhe reslsLance whlch all
men can offer.
4. LhaL lL produces a reasonable and well-grounded fear from
Lhe facL LhaL Lhe person from whom lL comes has Lhe
necessary means or ablllLy Lo lnfllcL Lhe LhreaLened ln[ury.

71
ue leoo v. cA
Duress - LhaL degree of consLralnL or danger elLher acLually lnfllcLed
(vlolenL) or LhreaLened and lmpendlng (lnLlmldaLlon), sufflclenL Lo
overcome Lhe mlnd and wlll of a person of ordlnary flrmness.
o vJo. ue locsoo v. CtoooJo - Lhe duress or lnLlmldaLlon musL be
more Lhan Lhe general feellng of fear."
! 1here musL be speclflc acLs or lnsLances of such naLure
and magnlLude as Lo have, of Lhemselves, lnfllcLed fear or
Lerror upon Lhe sub[ecL Lhereof LhaL hls execuLlon of Lhe
quesLloned deed or acL cannoL be consldered volunLary.
! Mere LhreaL Lo brlng a good falLh acLlon, malnLalnable aL
law, does noL amounL Lo duress.
o lopetol v. koqets - where fearlng for hls llfe and LhaL of hls famlly,
he sold Lhe house, lL was held LhaL Lhe conLracL can be annulled as
Lhe consenL was coerced by dlrecL lnLlmldaLlon.
o Lega| act|ons wh|ch amount to duress:
! A LhreaLened clvll acLlon where Lhe parLles are noL on an
equal fooLlng.
! 1hreaLs made agalnsL a person of lnferlor lnLellecL, or an
aged weakened ln body and mlnd Lo Lhe effecL LhaL
cerLaln clvll proceedlngs wlll be lnsLlLuLed.
! 1hreaLenlng llLlgaLlon whlle Lhe defendanL ls lll, or Lo
conLlnue llLlgaLlon when Lhe clrcumsLances are
oppresslve.

Art. 1336 - V|o|ence or Int|m|dat|on by a 1h|rd erson
vlolence or lnLlmldaLlon shall annul Lhe obllgaLlon, alLhough lL may have been
employed by a Lhlrd person who dld noL Lake parL ln Lhe conLracL. (1268)
Lx. lf A ls coerced Lo enLer lnLo a conLracL wlLh x because C LhreaLens Lo klll all
Lhe chlldren of A lf he does noL do so, such conLracL may be annulled
wheLher or noL x knew of Lhe lnLlmldaLlon.

Art. 1337 - Undue Inf|uence
1here ls undue lnfluence when a person Lakes lmproper advanLage of hls power
over Lhe wlll of anoLher, deprlvlng Lhe laLLer of a reasonable freedom of cholce. 1he
followlng clrcumsLances shall be consldered: Lhe confldenLlal, famlly, splrlLual and
oLher relaLlons beLween Lhe parLles, or Lhe facL LhaL Lhe person alleged Lo have
been unduly lnfluenced was sufferlng from menLal weakness, or was lgnoranL or ln
flnanclal dlsLress. (n)
Annu|||ng a contract based on undue |nf|uence -ls based upon prlnclples
of hlghesL morallLy, lL reaches every case and granLs rellef where lnfluence
ls acqulred and abused, or where confldence ls reposed and beLrayed.
"Undue"- unrlghLeous, lllegal and deslgned Lo perpeLraLe a wrong.
o lL musL amounL Lo fraud or coerclon.
"Due |nf|uence" - sollclLaLlon, lmporLunlLy, argumenL and persuaslon
used by one parLy as means Lo Lhe consenL of Lhe oLher.
o 8ooez v. cA - lnfluence obLalned by persuaslon or argumenL or by
appeals Lo Lhe affecLlons ls noL prohlblLed elLher ln law or morals
and ls noL obnoxlous even ln courLs of equlLy.
o Motobeol cotpototloo v. lltoq - an agreemenL enLered lnLo
because of Lhe acLual or supposed lnfluence...whlch conLemplaLes
Lhe use of personal lnfluence and sollclLaLlon raLher Lhan appeal
Lo Lhe [udgmenL of Lhe offlclal on Lhe merlLs of Lhe ob[ecL soughL
ls conLrary Lo publlc pollcy.

Art. 1338 - Causa| Iraud
1here ls fraud when, Lhrough lnsldlous words or machlnaLlons of one of Lhe
conLracLlng parLles, Lhe oLher ls lnduced Lo enLer lnLo a conLracL whlch, wlLhouL
Lhem, he would noL have agreed Lo. (1269)
Iraud - a false represenLaLlon of a maLerlal facL made by word or conducL
wlLh knowledge of lLs falsehood or ln reckless dlsregard of lLs LruLh, ln
order Lo lnduce and acLually lnduclng anoLher Lo acL Lhereon Lo hls ln[ury.
o 1here musL be always be damage or ln[ury ln case of fraud.
o lraud ls every klnd of decepLlon, wheLher ln Lhe form of lnsldlous
machlnaLlons, manlpulaLlons, concealmenLs, or
mlsrepresenLaLlons, for Lhe purpose of leadlng anoLher parLy lnLo
error and Lhus execuLlng a parLlcular acL.
o lraud produces quallfled error, lL lnduces ln Lhe oLher parLy an
lnexacL noLlon of facLs. 1he wlll of anoLher ls mallclously mlsled by
means of false appearance of reallLy.
o lnsldlous words or machlnaLlons lnclude false promlses,
exaggeraLlon of hopes or beneflLs, abuse of confldence, and
flcLlLlous names, quallflcaLlons, or auLhorlLy.
o 1he resulL of fraud ls error on Lhe parL of Lhe vlcLlm.

72
klnds of fraud:
1. Do|o causante (ArL. 1338) - whlch deLermlnes or ls Lhe essenLlal
cause of Lhe consenL, fraud ln Lhe perfecLlon of conLracL, can be a
ground for annulmenL.
2. Do|o |nc|dente (ArLs. 1344 & 1170) - whlch does noL have such a
declslve lnfluence and by lLself cannoL cause Lhe glvlng of consenL,
buL refers only Lo some parLlcular or accldenL of Lhe obllgaLlon,
cannoL be a ground for annulmenL.
8equlslLes of fraud:
1. Lmployed by one conLracLlng parLy upon Lhe oLher
2. lnduced Lhe oLher parLy Lo enLer lnLo Lhe conLracL
3. Serlous
4. 8esulLed ln damage or ln[ury Lo Lhe parLy seeklng annulmenL
klveto v. cA - lL was held LhaL consenL of Lhe old woman was obLalned
Lhrough fraudulenL mlsrepresenLaLlon of her nephew when she was made
Lo belleve LhaL Lhe conLracL was a morLgage when ln facL lL was a sale.

Art. 1339 - Iraud by Concea|ment
lallure Lo dlsclose facLs, when Lhere ls a duLy Lo reveal Lhem, as when Lhe parLles
are bound by confldenLlal relaLlons, consLlLuLes fraud. (n)
1he mere facL LhaL one of Lhe parLles has superlor knowledge of Lhe value
of Lhe properLy sub[ecL of Lhe LransacLlon does noL pet se consLlLuLe fraud.
o 1here ls only fraud when, under Lhe speclal and pecullar
clrcumsLances of each case, a legal or equlLable duLy ls lmposed
upon Lhe domlnanL parLy Lo reveal cerLaln facLs maLerlal Lo Lhe
LransacLlon or when Lhere ls a confldenLlal relaLlonshlp beLween
Lhe parLles.
S||ence or concea|ment - by lLself, does noL consLlLuLe fraud, unless Lhere
ls a speclal duLy Lo dlsclose cerLaln facLs, or unless accordlng Lo good falLh
and Lhe usages of commerce, Lhe communlcaLlon should be made
o 1he lnnocenL non-dlsclosure of a facL does noL affecL Lhe
formaLlon of Lhe conLracL or operaLe Lo dlscharge Lhe parLles from
Lhelr agreemenL.

Art. 1340 - Usua| Lxaggerat|ons |n 1rade
1he usual exaggeraLlons ln Lrade, when Lhe oLher parLy had an opporLunlLy Lo know
Lhe facLs, are noL ln Lhemselves fraudulenL. (n)
lf a parLy ls lnduced by such exaggeraLlons, Lhere may be fraud amounLlng
Lo acLlve mlsrepresenLaLlon.
lf lL ls wlLhln Lhe means of Lhe oLher parLy Lo lnvesLlgaLe and he does noL
do so, Lhere wlll be no fraud desplLe Lhe exaggeraLlons.
1o|erated fraud - lncludes mlnlmlzlng Lhe defecLs of Lhe Lhlng,
exaggeraLlon of lLs good quallLles, and glvlng lL quallLles LhaL lL does noL
have. 1hls ls lawful mlsrepresenLaLlon known as Jolos booos. 1hls ls also
called lawful asLuLeness.
o 1hese mlsrepresenLaLlons are usually encounLered ln falrs,
markeLs, and almosL all commerclal LransacLlons. 1hey do noL glve
rlse Lo an acLlon for damages, elLher because of Lhelr
lnslgnlflcance or because Lhe vlcLlm's gulllblllLy ls Lhe real cause of
hls loss.

Art. 1341 - Lxpert Cp|n|on
A mere expresslon of an oplnlon does noL slgnlfy fraud, unless made by an experL
and Lhe oLher parLy has relled on Lhe former's speclal knowledge. (n)
Ceneral 8ule - Cplnlons are noL regarded as represenLaLlon of facLs
Pence, lf lL Lurns ouL Lo be wrong, lL ls noL consldered legally decelLful
lnsldlously lnduclng a parLy Lo enLer lnLo a conLracL.
o LxcepLlon - an oplnlon of an experL ls llke a sLaLemenL of facL,
and lf false, may be consldered a fraud glvlng rlse Lo annulmenL.

Art. 1342 - Iraud by a 1h|rd erson
MlsrepresenLaLlon by a Lhlrd person does noL vlLlaLe consenL, unless such
mlsrepresenLaLlon has creaLed subsLanLlal mlsLake and Lhe same ls muLual. (n)
A conLracL may be annulled on Lhe ground of vlLlaLed consenL lf decelL by a
Lhlrd person, even wlLhouL connlvance or compllclLy wlLh one of Lhe
conLracLlng parLles, resulLed ln muLual error on Lhe parL of Lhe parLles Lo
Lhe conLracL.
Ceneral rule - ls LhaL Lhe fraud employed by a Lhlrd person upon one of
Lhe parLles does noL vlLlaLe consenL and cause Lhe nulllLy of a conLracL.
o LxcepLlon - lf one of Lhe parLles ls ln colluslon wlLh Lhe Lhlrd
person, or knows of Lhe fraud by Lhe Lhlrd person, and he ls
beneflLed Lhereby, he may be consldered as an accompllce Lo Lhe
fraud, and Lhe conLracL becomes voldable.

73
kotol 8ook of coloocoo v. cA - Lhere was mlsrepresenLaLlon where a
person lnduced an elderly woman Lo co-slgn a promlssory noLe as a co-
debLor and such person clalmed false quallflcaLlons Lo geL a loan from a
bank.

Art. 1343 - M|srepresentat|on Made |n Good Ia|th
MlsrepresenLaLlon made ln good falLh ls noL fraudulenL buL may consLlLuLe error.
(n)
M|srepresentat|on - lncluslve of Lhe Lerm fraud.
o racLlcally, every fraud ls a mlsrepresenLaLlon buL noL every
mlsrepresenLaLlon ls fraudulenL.
MlsrepresenLaLlons may be made wlLhouL Lhe knowledge of lLs falslLy and
Lherefore compleLely done ln good falLh.
o ln such case, lL may consLlLuLe merely an error.
o Pence, breach of conLracLs need noL always be ln good falLh as lL
could be Lhe due Lo an honesL mlsLake.

Art. 1344 - Causa| Iraud may make a Contract Vo|dab|e
ln order LhaL fraud may make a conLracL voldable, lL should be serlous and should
noL have been employed by boLh conLracLlng parLles.
lncldenLal fraud only obllges Lhe person employlng lL Lo pay damages. (1270)
1he fraudulenL acL musL be serlous
o 1here musL be an lnLenLlon Lo ln[ure and LhaL damage or ln[ury ln
facL resulLed.
o lL musL noL be Jolo loclJeote-accldenLal and collaLeral fraud-
whlch does noL necessarlly bear on Lhe declslon of Lhe parLy
defrauded Lo enLer lnLo Lhe conLracL.
o lL musL be Jolo coosoote-whlch refers Lo Lhe very cause why Lhe
oLher parLy enLered lnLo Lhe conLracL.
lraud ls serlous when lL ls sufflclenL Lo lmpress, or Lo lead an ordlnarlly
prudenL person lnLo error, LhaL whlch cannoL decelve a prudenL person
cannoL be a ground for nulllLy.
8esldes belng serlous, Lhe fraud musL be Lhe deLermlnlng cause of Lhe
conLracL. lL musL be Jolo coosoote.
When boLh parLles use fraud reclprocally, nelLher one has an acLlon agalnsL
Lhe oLher, Lhe fraud of one compensaLes LhaL of Lhe oLher. nelLher parLy
can ask for Lhe annulmenL of Lhe conLracL.

Art. 134S - S|mu|at|on of a Contract
SlmulaLlon of a conLracL may be absoluLe or relaLlve. 1he former Lakes place when
Lhe parLles do noL lnLend Lo be bound aL all, Lhe laLLer, when Lhe parLles conceal
Lhelr Lrue agreemenL. (n)
Abso|ute s|mu|at|on - renders Lhe conLracL null and vold when Lhe parLles
do noL lnLend Lo be bound aL all by Lhe same. umoll v. cA
o 1he baslc characLerlsLlc of Lhls Lype of slmulaLlon of conLracL ls Lhe
facL LhaL Lhe apparenL conLracL ls noL really deslred or lnLended Lo
elLher produce legal effecLs or ln any way alLer Lhe [urldlcal
slLuaLlon of Lhe parLles. umoll v. cA
S|mu|at|on - Lhe declaraLlon of a flcLlLlous wlll, dellberaLely made by
agreemenL of Lhe parLles, ln order Lo produce, for Lhe purposes of
decepLlon, Lhe appearance of a [urldlcal acL whlch does noL exlsL or ls
dlfferenL from LhaL whlch was really execuLed.

Art. 1346 - Abso|ute and ke|at|ve S|mu|at|on of Contracts
An absoluLely slmulaLed or flcLlLlous conLracL ls vold. A relaLlve slmulaLlon, when lL
does noL pre[udlce a Lhlrd person and ls noL lnLended for any purpose conLrary Lo
law, morals, good cusLoms, publlc order or publlc pollcy blnds Lhe parLles Lo Lhelr
real agreemenL. (n)
Iovlet v. cA - asslgnee should be held llable conslderlng LhaL Lhe
asslgnmenL was a relaLlvely slmulaLed conLracL whlch, Lhough conLalnlng a
false conslderaLlon, was noL null and vold pet se.
Ik 8looco v. Ooosbo - slmulaLlon of conLracLs may be absoluLe or relaLlve.
a. Abso|ute s|mu|at|on - Lhere ls color of a conLracL, wlLhouL any
subsLance Lhereof, Lhe parLles noL havlng any lnLenLlon Lo be
bound.
b. ke|at|ve s|mu|at|on - Lhe parLles have an agreemenL whlch Lhey
conceal under Lhe gulse of anoLher conLracL.
Lx. a deed of sale execuLed Lo conceal donaLlon.

74
loo v. cA - where lL was proven LhaL Lhe person who allegedly enLered
lnLo Lhe conLracL was noL even concelved aL Lhe Llme Lhe conLracL was
execuLed, Lhe SC sald LhaL Lhe conLracL was deflnlLely absoluLely slmulaLed.
velospoez v. cA - conLracL was clearly slmulaLed Lo faclllLaLe Lhe
LransacLlon wlLh Lhe bank as Lhere was absoluLely no conslderaLlon aL all
and Lhe parLles clearly dld noL lnLend Lo be bound by Lhe deed of sale and
lLs accompanylng documenLs.
ltooclsco v. ltooclsco-Alfooso - when Lwo llleglLlmaLe daughLers clalmed
Lhey boughL properLy buL lL was shown LhaL Lhey could noL have posslbly
acqulred Lhe same glven LhaL Lhey had no lncome, Lhe conLracL of sale was
vold for belng slmulaLed because Lhere was no conslderaLlon for Lhe same.

"/L5431 : N '7O/L5 3K $315.0L59
Art. 1347 - Cb[ect of a Contract
All Lhlngs whlch are noL ouLslde Lhe commerce of men, lncludlng fuLure Lhlngs, may
be Lhe ob[ecL of a conLracL. All rlghLs whlch are noL lnLransmlsslble may also be Lhe
ob[ecL of conLracLs.
no conLracL may be enLered lnLo upon fuLure lnherlLance excepL ln cases expressly
auLhorlzed by law.
All servlces whlch are noL conLrary Lo law, morals, good cusLoms, publlc order or
publlc pollcy may llkewlse be Lhe ob[ecL of a conLracL. (1271a)
1he ob[ecL of a conLracL ls lLs sub[ecL maLLer. lL ls Lhe Lhlng, rlghL, or servlce
whlch ls Lhe sub[ecL-maLLer of Lhe obllgaLlon arlslng from Lhe conLracL.
8equlslLes (ClLlu):
1. wlLhln Lhe commerce of man,
2. noL lnLransmlsslble
3. musL be llclL, or noL conLrary Lo law, morals, good cusLoms, publlc
pollcy, or publlc order,
4. noL an lmposslble Lhlng or servlce, and
3. lL musL be deLermlnaLe as Lo lLs klnd.

Art. 1348 - Imposs|b|e 1h|ngs or Serv|ces
lmposslble Lhlngs or servlces cannoL be Lhe ob[ecL of conLracLs. (1272)
W|th|n the commerce of man - any properLy or servlce can be Lhe ob[ecL
of a conLracL provlded LhaL lL ls wlLhln Lhe commerce of man.
o Mooeclooq v. lAc - a creek cannoL be converLed lnLo a flshpond
because lL ls a properLy belonglng Lo Lhe publlc domaln whlch ls
noL suscepLlble Lo prlvaLe approprlaLlon and acqulslLlve
prescrlpLlon.
o 1hlngs whlch are ouLslde Lhe commerce of man:
! Servlces whlch lmply an absoluLe submlsslon by Lhose
who render Lhem, sacrlflclng Lhelr llberLy, Lhelr
lndependence or bellefs, or dlsregardlng ln any manner
Lhe equallLy and dlgnlLy of persons, such as perpeLual
servlLude or slavery,
! ersonal rlghLs, such as marlLal auLhorlLy, Lhe sLaLus and
capaclLy of a person, and honorary LlLles and dlsLlncLlons,
! ubllc offlces, lnherenL aLLrlbuLes of Lhe publlc auLhorlLy,
and pollLlcal rlghLs of lndlvlduals, such as Lhe rlghL of
suffrage,
! roperLy, whlle Lhey perLaln Lo Lhe publlc domlnlon, such
as Lhe roads, plazas, squares, and rlvers,
! Sacred Lhlngs, common Lhlngs, llke Lhe alr and Lhe sea,
and res nulllus, as long as Lhey have noL been
approprlaLed.
! Lven fuLure Lhlngs can be Lhe ob[ecL of conLracLs, as long
as Lhey have Lhe posslblllLy or poLenLlallLy of comlng lnLo
exlsLence.
luLure Lhlngs LhaL can be reasonably ascerLalned can be Lhe ob[ecL of a
conLracL.
8lghLs may llkewlse be Lhe ob[ecL of conLracLs provlded Lhey are
Lransmlsslble.
Iuture |nher|tance - any properLy or rlghL noL ln exlsLence or capable of
deLermlnaLlon aL Lhe Llme of Lhe conLracL, LhaL a person may ln Lhe fuLure
acqulre by possesslon.
8los v. 5ootos - where Lhe wlfe agreed Lo glve whaLever her share ln Lhe
con[ugal parLnershlp properLy Lo her helrs once Lhe husband dles, Lhe SC
sald LhaL such agreemenL does noL lnvolve fuLure lnherlLance.
o 1he documenL refers Lo exlsLlng properLles whlch she wlll recelve
by operaLlon of law on Lhe deaLh of her husband, because lL ls her
share ln Lhe con[ugal asseLs.

73
1he law, however, generally does noL allow conLracLs on fuLure
lnherlLance. A conLracL enLered lnLo by a fldelcommlssary helr wlLh respecL
Lo hls evenLual rlghLs would be valld provlded LhaL Lhe LesLaLor has already
dled. 1he rlghL of a fldelcommlssary helr comes from Lhe LesLaLor and noL
from Lhe flduclary.

Art. 1349 - uant|ty Need Not be Determ|nate
1he ob[ecL of every conLracL musL be deLermlnaLe as Lo lLs klnd. 1he facL LhaL Lhe
quanLlLy ls noL deLermlnaLe shall noL be an obsLacle Lo Lhe exlsLence of Lhe
conLracL, provlded lL ls posslble Lo deLermlne Lhe same, wlLhouL Lhe need of a new
conLracL beLween Lhe parLles. (1273)
1he ob[ecL musL be one LhaL can be ascerLalned wlLh reasonable cerLalnLy
as Lo lLs klnd.
o Pence, a conLracL engaglng a cerLaln person Lo perform a deed,
wlLhouL speclfylng whaL deed lL ls, does noL make Lhe servlce
deLermlnable and ls Lherefore vold.

"/L5431 = N $0-9/ 3K $315.0L59
Art. 13S0 - Cause Def|ned
ln onerous conLracLs Lhe cause ls undersLood Lo be, for each conLracLlng parLy, Lhe
presLaLlon or promlse of a Lhlng or servlce by Lhe oLher, ln remuneraLory ones, Lhe
servlce or beneflL whlch ls remuneraLed, and ln conLracLs of pure beneflcence, Lhe
mere llberallLy of Lhe benefacLor. (1274)
Cause of the contract - Lhe essenLlal or more proxlmaLe purpose whlch
Lhe conLracLlng parLles have ln vlew aL Lhe Llme of enLerlng lnLo Lhe
conLracL
o lL may or may noL be Langlble
o lL can Lake dlfferenL forms:
! resLaLlon or promlse of a Lhlng or servlce by anoLher
! Clvlng of a sum of money, an ob[ecL
! LxpecLaLlon of proflLs from a subdlvlslon pro[ecL
1he cause as Lo each parLy ls Lhe underLaklng or presLaLlon Lo be
performed by Lhe oLher. 1he ob[ecL of Lhe conLracL ls Lhe sub[ecL maLLer
Lhereof
Lx. Lhe land whlch ls sold ln a sales conLracL
Cons|derat|on - Lhe reason, moLlve, or lnducemenL by whlch a man ls
moved Lo blnd hlmself by an agreemenL.
1he conLacL ls Lhe law beLween Lhe parLles. When Lhe words of a conLracL
are plaln and readlly undersLandable, Lhere ls no room for consLrucLlon.
ulbloosoo v. cA - Lhe conslderaLlon was Lhe prlvaLe respondenL's
preferenLlal rlghL Lo buy Lhe properLy from Lhe owner.

Cause of conLracLs:
1. Cnerous contract - for each conLracLlng parLy, Lhe presLaLlon or promlse
of a Lhlng or servlce by Lhe oLher
o 1he cause need noL be adequaLe or an exacL equlvalenL ln polnL of
acLual value, especlally ln deallng wlLh ob[ecLs whlch have a
rapldly flucLuaLlng prlce. 1here are equal conslderaLlons.
2. kec|proca| contracts - Lhe obllgaLlon or promlse of each parLy.
o kepobllc v. clotlbel - ln a compromlse agreemenL deslgned Lo
LermlnaLe Lhe case, Lhe cause of Lhe compromlse was Lhe muLual
walver and abandonmenL of Lhe parLles of Lhelr clalms agalnsL
each oLher.
3. kemuneratory contracts - Lhe servlce or beneflL whlch ls remuneraLed
o Where a parLy glves someLhlng Lo anoLher because of some
servlce or beneflL glven or rendered by Lhe laLLer Lo Lhe former,
where such servlce or beneflL was noL due as a legal obllgaLlon.
1he conslderaLlon of one ls greaLer Lhan Lhe oLher's.
4. Contracts of pure benef|cence - mere llberallLy of Lhe benefacLor
o lL does noL lnvolve any maLerlal Lhlng buL raLher lL lnvolves only
Lhe generoslLy of Lhe benefacLor.

Art. 13S1 - Mot|ve Def|ned
1he parLlcular moLlves of Lhe parLles ln enLerlng lnLo a conLracL are dlfferenL from
Lhe cause Lhereof. (n)
Cause - essenLlal reason for Lhe conLracL.
Mot|ve- parLlcular reason for a conLracLlng parLy whlch does noL affecL
Lhe oLher parLy and whlch does noL preclude Lhe exlsLence of a dlfferenL
conslderaLlon.
o MoLlvaLlon of Lhe parLles ls lndependenL from Lhe cause of Lhe
conLracL and Lherefore does noL form an essenLlal parL of lL.
Ceneral rule - moLlve or parLlcular purpose of a parLy ln enLerlng lnLo a
conLracL does noL affecL Lhe valldlLy nor exlsLence of Lhe conLracL.

76
o LxcepLlon - when Lhe reallzaLlon of such moLlve or parLlcular
purpose has been made a condlLlon upon whlch Lhe conLracL ls
made Lo depend. lblllpploe Notloool coosttoctloo cotp. v. cA
no [udlclal acLlon ls necessary for Lhe annulmenL of a vold conLracL. Any
such acLlon would be merely declaraLory.
Cause ls Lhe ob[ecLlve, lnLrlnslc, and [urldlcal reason for Lhe exlsLence of
Lhe conLracL lLself, whlle moLlve ls Lhe psychologlcal, lndlvldual, or personal
purpose of a parLy Lo Lhe conLracL.
Ceneral prlnclple - Lhe moLlves of a parLy do noL affecL Lhe valldlLy or
exlsLence of a conLracL.
o LxcepLlons - When moLlve predeLermlnes Lhe purpose of Lhe
conLracL, such as:
! When Lhe moLlve of a debLor ln allenaLlng properLy ls Lo
defraud hls credlLors, Lhe allenaLlon ls resclsslble,
! When Lhe moLlve of a person ln glvlng hls consenL ls Lo
avold a LhreaLened ln[ury, as ln Lhe case of lnLlmldaLlon,
Lhe conLracL ls voldable, and
! When Lhe moLlve of a person lnduced hlm Lo acL on Lhe
basls of fraud or mlsrepresenLaLlon by Lhe oLher parLy,
Lhe conLracL ls voldable.
. kozoo v. lblllpploe lotts Aotbotlty - conLracL wlLh an lllegal cause ls
vold.
uy v. cA - where Lhe nPA purchased loLs and cancelled because Lhe loLs
Lurned ouL Lo be unsulLable for lLs houslng pro[ecL, Lhe cancellaLlon was
valld as lL was based on Lhe negaLlon of Lhe cause whlch ls Lo use Lhe land
for houslng.

Art. 13S2 - Absence of Cause
ConLracLs wlLhouL cause, or wlLh unlawful cause, produce no effecL whaLever. 1he
cause ls unlawful lf lL ls conLrary Lo law, morals, good cusLoms, publlc order or
publlc pollcy. (1273a)
Absence of Lhe cause, belng one of Lhe essenLlal elemenLs of a conLracL, do
noL creaLe a conLracL as Lhere can be no meeLlng of Lhe mlnds.

Art. 13S3 - Ia|se Cause
1he sLaLemenL of a false cause ln conLracLs shall render Lhem vold, lf lL should noL
be proved LhaL Lhey were founded upon anoLher cause whlch ls Lrue and lawful.
(1276)
Ceneral rule - false cause sLaLed ln a conLracL makes Lhe conLracL vold.
o LxcepLlon - when a conLracL, Lhough sLaLlng a false
conslderaLlon, has ln facL a real conslderaLlon, Lhe conLracL ls noL
vold
1he conLracL ls aL leasL a relaLlvely slmulaLed one.

Art. 13S4 - Cause resumed to Lx|st and Lawfu|
AlLhough Lhe cause ls noL sLaLed ln Lhe conLracL, lL ls presumed LhaL lL exlsLs and ls
lawful, unless Lhe debLor proves Lhe conLrary. (1277)
unless Lhe conLrary ls proved, a conLracL ls presumed Lo have a good and
sufflclenL conslderaLlon.
1hls presumpLlon applles when no cause ls sLaLed ln Lhe conLracL.
llom v. Olymplc 5owmlll co. - defendanLs had noL proven LhaL Lhe
obllgaLlon was lllegal hence, lL subslsLs.

Art. 13SS - Les|on Def|ned
LxcepL ln cases speclfled by law, leslon or lnadequacy of cause shall noL lnvalldaLe a
conLracL, unless Lhere has been fraud, mlsLake or undue lnfluence. (n)
A valuable conslderaLlon, however small or nomlnal, lf glven or sLlpulaLed
ln good falLh ls, ln Lhe absence of fraud, sufflclenL. leooco v. koovo
ln case of leslon or lnadequacy of cause:
o Ceneral rule - Lhe conLracL ls noL sub[ecL Lo annulmenL.
! LxcepLlon - ln cases provlded by law, however, such as
Lhose menLloned ln ArL 1381, Lhe leslon ls a ground for
resclsslon of Lhe conLracL.
Cross lnadequacy naLurally suggesLs fraud and ls evldence Lhereof, so LhaL
lL may be sufflclenL Lo show lL when Laken ln connecLlon wlLh oLher
clrcumsLances.
Aoyooq nloo v. coott of 1ox Appeols - peLlLloner has noL shown LhaL Lhe
lnsLanL sale ls a cause exempLed by law from Lhe operaLlon of ArL. 1333.


77
Chapter 3: Iorm of Contracts
Art. 13S6 - Iorm of Contracts
ConLracLs shall be obllgaLory, ln whaLever form Lhey may have been enLered lnLo,
provlded all Lhe essenLlal requlslLes for Lhelr valldlLy are presenL. Powever, when
Lhe law requlres LhaL a conLracL be ln some form ln order LhaL lL may be valld or
enforceable, or LhaL a conLracL be proved ln a cerLaln way, LhaL requlremenL ls
absoluLe and lndlspensable. ln such cases, Lhe rlghL of Lhe parLles sLaLed ln Lhe
followlng arLlcle cannoL be exerclsed. (1278a)
lorm of ConLracLs:
Ceneral 8ule - conLracLs are blndlng from perfecLlon ln whaLever form,
provlded Lhe Lhree requlslLes exlsL:
1. ConsenL
2. Cb[ecL
3. Cause
13S6 estab||shes Lxcept|ons - where form ls requlred for valldlLy.
1. ConLracLs whlch |aw |tse|f requlres LhaL Lhey be ln some parLlcular
form
2. Donat|on of lmmovable properLy musL be ln a publlc lnsLrumenL
such LhaL Lhe donaLlon may be valld
! uonaLlon of movables worLh more Lhan 3,000
3. ConLracLs LhaL law requlres Lo be proven by some wrlLlng of lLs
Lerms
! SLaLuLe of lrauds
ceolJo v. ApocloooJo -Lhe purposes of prescrlblng form:
1. Va||d|ty - non-observance of form renders conLracL vold
2. Lnforceab|||ty - non-compllance wlLh form wlll noL permlL Lhe
conLracL Lo be proved or enforced
3. Greater eff|cacy - lf noL done, would noL adversely affecL valldlLy
or enforceablllLy of Lhe conLracL beLween Lhe parLles Lhemselves
Art. 13S7 - Iorm for the Conven|ence of the art|es
lf Lhe law requlres a documenL or oLher speclal form, as ln Lhe acLs and conLracLs
enumeraLed ln Lhe followlng arLlcle, Lhe conLracLlng parLles may compel each oLher
Lo observe LhaL form, once Lhe conLracL has been perfecLed. 1hls rlghL may be
exerclsed slmulLaneously wlLh Lhe acLlon upon Lhe conLracL. (1279a)
Compulslon Lo follow form :
A parLy who wlshes Lo have hls conLracL reduced Lo Lhe parLlcular form
requ|red by |aw may flle an acLlon to compe| the other party to comp|y
w|th such form.
lf requlremenL ls merely d|rectory - no lmpacL on Lhe valldlLy or
enforceablllLy.
o arLles may enforce Lhe conLracL.
o uemand LhaL lL be reduced ln Lhe form requlred by law.
2olJe v. cA - unreglsLered conLracL of sale was assalled as lnvalld, SC ruled
ln favor of valldlLy.
o 1he deed of sale was defecLlve as Lo render lL unreglsLerable - no
name of Lhe vendee's husband.
o Powever, such defecL does not |nva||date the deed.
o 1hough defecLlve ln form, Lhe sale was valld.
o 1hus, Lhe parLles may compel each oLher Lo do whaL ls needed Lo
make the document of sa|e reg|sterab|e.
Art. 13S8 - Contracts Wh|ch Must Appear |n a ub||c Document
1he followlng musL appear ln a publlc documenL:
(1) AcLs and conLracLs whlch have for Lhelr ob[ecL Lhe creaLlon, Lransmlsslon,
modlflcaLlon or exLlngulshmenL of real rlghLs over lmmovable properLy, sales of real
properLy or of an lnLeresL Lhereln a governed by ArLlcles 1403, no. 2, and 1403,
(2) 1he cesslon, repudlaLlon or renunclaLlon of heredlLary rlghLs or of Lhose of Lhe
con[ugal parLnershlp of galns,
(3) 1he power Lo admlnlsLer properLy, or any oLher power whlch has for lLs ob[ecL
an acL appearlng or whlch should appear ln a publlc documenL, or should pre[udlce
a Lhlrd person,
(4) 1he cesslon of acLlons or rlghLs proceedlng from an acL appearlng ln a publlc
documenL.
All oLher conLracLs where Lhe amounL lnvolved exceeds flve hundred pesos musL
appear ln wrlLlng, even a prlvaLe one. 8uL sales of goods, chaLLels or Lhlngs ln acLlon
are governed by ArLlcles, 1403, no. 2 and 1403. (1280a)
lallure Lo puL ln a publlc or prlvaLe documenL of maLLers enumeraLed :
uoes noL render Lhe agreemenL vold.

78
AgreemenL ls st||| va||d between the part|es.
8equlremenL ls only for purpose of:
1. CreaLer efflcacy
2. Convenlence
3. 8|nd|ng of th|rd persons
uolloo v.. cA - requlremenL under 1338 ls only for convenlence, noL a
requlslLe for valldlLy or enforceablllLy.
Chapter 4: keformat|on of Instruments
Art. 13S9 - keformat|on
When, Lhere havlng been a meeLlng of Lhe mlnds of Lhe parLles Lo a conLracL, Lhelr
Lrue lnLenLlon ls noL expressed ln Lhe lnsLrumenL purporLlng Lo embody Lhe
agreemenL, by reason of mlsLake, fraud, lnequlLable conducL or accldenL, one of Lhe
parLles may ask for Lhe reformaLlon of Lhe lnsLrumenL Lo Lhe end LhaL such Lrue
lnLenLlon may be expressed.
lf mlsLake, fraud, lnequlLable conducL, or accldenL has prevenLed a meeLlng of Lhe
mlnds of Lhe parLles, Lhe proper remedy ls noL reformaLlon of Lhe lnsLrumenL buL
annulmenL of Lhe conLracL.
keformat|on - deflned:
o 1haL remedy by means of whlch a wrlLLen lnsLrumenL ls amended or
rect|f|ed.
o As Lo express or conform Lo Lhe rea| agreement or |ntent|on of the
part|es, when.
o 8y reason of m|stake, fraud, |nequ|tab|e conduct, or acc|dent.
o 1he lnsLrumenL fa||s to express such agreemenL or lnLenLlon.
8eason - equ|ty
o CourLs do noL aLLempL Lo make a new conLracL
o 8eformaLlon ls based on Lhe docLrlne LhaL lL would be un[usL and
lnequlLable Lo allow Lhe enforcemenL of a wrlLLen lnsLrumenL whlch
does noL reflecL or dlsclose Lhe real meeLlng of Lhe mlnds of Lhe
parLles.
8equlslLes of 8eformaLlon - (ML-MIIA-IC)
o 1here ls a meet|ng of the m|nds of Lhe parLles Lo Lhe conLracL.
o 1he wrlLLen lnsLrumenL does not express the true agreement or
|ntent|on of Lhe parLles.
o lallure Lo express Lhe Lrue lnLenLlon ls due Lo m|stake, fraud,
|nequ|tab|e conduct, or acc|dent.
o 1he facts upon rellef by way of reformaLlon of Lhe lnsLrumenL ls
soughL are puL ln lssue by Lhe pleadlngs.
o 1here ls c|ear and conv|nc|ng ev|dence (more Lhan a preponderance)
of Lhe mlsLake, fraud, lnequlLable conducL, or accldenL.
8eformaLlon dlsLlngulshed from annulmenL:
o keformat|on - Lhere ls a meeLlng of Lhe mlnds: a conLracL exlsLs. 1he
deflclency lles ln Lhe wrlLLen lnsLrumenL embodylng such conLracL.
o Annu|ment - Lhere was no valld conLracL perfecLed.
Art. 1360 - r|nc|p|es of the Genera| Law on keformat|on
1he prlnclples of Lhe general law on Lhe reformaLlon of lnsLrumenLs are hereby
adopLed lnsofar as Lhey are noL ln confllcL wlLh Lhe provlslons of Lhls Code.
Art. 1361 - Mutua| M|stake as 8as|s of keformat|on
When a muLual mlsLake of Lhe parLles causes Lhe fallure of Lhe lnsLrumenL Lo
dlsclose Lhelr real agreemenL, sald lnsLrumenL may be reformed.
MuLual MlsLake as 8asls for 8eformaLlon:
Mutua| M|stake - mlsLake of facL LhaL ls common Lo boLh parLles whlch causes
Lhe fallure of Lhe lnsLrumenL Lo express Lrue lnLenLlon.
Coozoles MooJtoqoo v. 5ootos - conLracLs solemnly and dellberaLely enLered
lnLo may noL be overLurned by lnconcluslve proof or by reason of mlsLake of
one of Lhe parLles Lo whlch Lhe oLher ln no way has conLrlbuLed.
1he followlng requlslLes musL concur Lo [usLlfy reformaLlon under Lhls arLlcle
(ICMC):
1. MlsLake musL be of fact .
2. Such mlsLake proved by c|ear and conv|nc|ng ev|dence.
3. MlsLake musL be mutua| - common Lo boLh parLles.
4. MlsLake musL cause the fa||ure of Lhe lnsLrumenL Lo express Lrue
lnLenLlon.
lf Lhe muLual mlsLake ls one of |aw - Lhe remedy ls annulmenL.


79
Art. 1362 -M|staken, Iraud and Inequ|tab|e Conduct
lf one parLy was mlsLaken and Lhe oLher acLed fraudulenLly or lnequlLably ln such a
way LhaL Lhe lnsLrumenL does noL show Lhelr Lrue lnLenLlon, Lhe former may ask for
Lhe reformaLlon of Lhe lnsLrumenL.
1he rlghL Lo ask for reformaLlon ls glven Lo Lhe parLy whose mlsLake was ln
good falLh.
lL musL be shown LhaL Lhe oLher parLy has acLed fraudulenLly or lnequlLably #
and such acL resulLed ln Lhe drafLlng of a documenL LhaL does noL correspond
Lo Lhe acLual agreemenL
Ceneral 8ule - mlsLake of law cannoL resulL ln reformaLlon
o LxcepLlon - where, on accounL of mlsplaced confldence, and because
of some arLlflce or decepLlon fraudulenLly pracLlced upon hlm by Lhe
oLher parLy, a mater|a| part of the contract was om|tted from the
wr|t|ng, or he was oLherwlse mlsled, equlLy wlll decree a reformaLlon.
Art. 1363 - Concea|ment of M|stake by the Cther arty
When one parLy was mlsLaken and Lhe oLher knew or belleved LhaL Lhe lnsLrumenL
dld noL sLaLe Lhelr real agreemenL, buL concealed LhaL facL from Lhe former, Lhe
lnsLrumenL may be reformed.
Concea|ment of m|stake of other party
o 8emedy of reformaLlon may be avalled of Lhe parLy who acLed ln good
falLh.
o 1he concealmenL of mlsLake consLlLuLes fraud.
knowledge by one parLy of Lhe oLher's mlsLake regardlng Lhe expresslon of Lhe
agreemenL ls equlvalenL Lo a muLual mlsLake.
o ln[ured parLy may seek reformaLlon.
Art. 1364 -Ignorance, etc. on the art of 1h|rd erson
When Lhrough Lhe lgnorance, lack of sklll, negllgence or bad falLh on Lhe parL of Lhe
person drafLlng Lhe lnsLrumenL or of Lhe clerk or LyplsL, Lhe lnsLrumenL does noL
express Lhe Lrue lnLenLlon of Lhe parLles, Lhe courLs may order LhaL Lhe lnsLrumenL
be reformed.
S|tuat|on contemp|ated: lf person drafLlng or Lyplng Lhe lnsLrumenL ls unable
Lo come up wlLh a correcL wrlLLen documenL LhaL embodles Lhe wlll of Lhe
parLles, because of:
o lgnorance
o Lack of sklll
o negllgence/bad falLh
Such mlsLake wlll be deemed muLual, and elLher parLy may ask for reformaLlon
- Lhls ls because ne|ther party |s respons|b|e.
Art. 136S - Mortgage or |edge Stated as a Sa|e
lf Lwo parLles agree upon Lhe morLgage or pledge of real or personal properLy, buL
Lhe lnsLrumenL sLaLes LhaL Lhe properLy ls sold absoluLely or wlLh a rlghL of
repurchase, reformaLlon of Lhe lnsLrumenL ls proper.
S|tuat|on contemp|ated : Lhe real agreemenL ls morLgage or pledge, buL Lhe
lnsLrumenL says LhaL such properLy ls sold absoluLely.
8eformaLlon ln Lhls case wlll be proper.
lollleo v. coslo - parLles Lo a conLracL lnLended LhaL a house was Lo be
collaLeral for a prevlous loan. AgreemenL apparenLly sLaLed LhaL Lhe house was
sub[ecL of a condlLlonal sale. lL was held LhaL Lhe courLs do noL make anoLher
conLracL. Lhey merely lnqulre lnLo Lhe lnLenLlon of Lhe parLles, and, havlng
found lL, reform Lhe wrlLLen lnsLrumenL (noL Lhe conLracL) ln order LhaL lL may
express Lhe real lnLenLlon."
Art. 1366 -Cases when keformat|on Not A||owed
1here shall be no reformaLlon ln Lhe followlng cases:
(1) Slmple donaLlons lnLer vlvos whereln no condlLlon ls lmposed,
(2) Wllls,
(3) When Lhe real agreemenL ls vold.
Art. 1367 - arty who 8rought Act|on to Lnforce Cannot keform
When one of Lhe parLles has broughL an acLlon Lo enforce Lhe lnsLrumenL, he
cannoL subsequenLly ask for lLs reformaLlon.
When ls reformaLlon noL allowed - DWLV :
Slmple donat|ons lnLer vlvos where no condlLlon ls lnvolved
o uonaLlon - an acL of llberallLy whereby a person dlsposes gratu|tous|y
of a Lhlng or rlghL ln favor of anoLher.
o lotet vlvos - a donaLlon lnLended Lo Lake place dur|ng the donor's
||fet|me
o Slnce acL ls essenLlally graLulLous, donee has no [usL cause for
complalnL

80
o uonor ls not bound to correct m|stakes ln deed of donaLlon
! uonor may ask for reformaLlon.
o uonaLlons do not |nvo|ve a meet|ng of the m|nds.
o lf donaLlon ls onerous |n character or lnvolves a cond|t|on, Lhe deed
may be reformed so LhaL Lhe Lrue condlLlons lmposed by Lhe donor
may be expressed.
W||| - an acL whereby a person ls permlLLed, wlLh formallLles of law, Lo conLrol
Lo a cerLaln degree Lhe dlsposlLlon of hls esLaLe, Lo Lake effecL afLer hls deaLh.
o lL ls a sLrlcLly personal and free acL.
Where Lhe real agreemenL ls vo|d
o When Lhe real agreemenL ls vold, Lhere ls noLhlng Lo reform.
When one parLy has broughL an acLlon Lo enforce Lhe lnsLrumenL (ArL 1367)
o 8ased on estoppe|.
o When a parLy brlngs an acLlon Lo enforce a conLracL, he adm|ts |ts
va||d|ty and LhaL lL expresses Lhe Lrue lnLenLlon of Lhe parLles.
Art. 1368 - arty Lnt|t|ed to keformat|on
8eformaLlon may be ordered aL Lhe lnsLance of elLher parLy or hls successors ln
lnLeresL, lf Lhe mlsLake was muLual, oLherwlse, upon peLlLlon of Lhe ln[ured parLy, or
hls helrs and asslgns.
1hls arLlcle glves Lhe persons who are glven legal sLandlng Lo lnlLlaLe an acLlon
for reformaLlon:
1. L|ther of parLles, lf mlsLake ls muLual (ArLs. 1361, 1364, 1363)
2. ln a|| other cases, Lhe ln[ured parLy (ArLs 1362 - 1363)
3. ne|rs or successors |n |nterest, ln lleu of Lhe parLy enLlLled
LffecL of reformaLlon ls retroact|ve from the t|me of the execut|on of Lhe
orlglnal conLracL.
Art. 1369 - rocedure for keformat|on
1he procedure for Lhe reformaLlon of lnsLrumenL shall be governed by rules of courL
Lo be promulgaLed by Lhe Supreme CourL.
Chapter S: Interpretat|on of Contracts
Art. 1370 - Interpretat|on of Contracts Def|ned
lf Lhe Lerms of a conLracL are clear and leave no doubL upon Lhe lnLenLlon of Lhe
conLracLlng parLles, Lhe llLeral meanlng of lLs sLlpulaLlons shall conLrol.
lf Lhe words appear Lo be conLrary Lo Lhe evldenL lnLenLlon of Lhe parLles, Lhe laLLer
shall prevall over Lhe former. (1281)
urpose of |nterpretat|on - Lo be able Lo know Lhe lnLenL of Lhe parLles, so LhaL
Lhe conLracL can be properly lmplemenLed.
o Maklng lnLelllglble whaL was noL before undersLood, amblguous, or
noL obvlous.
o 1he meanlng of language ls ascerLalned.
8ules ln sLaLuLory consLrucLlon can llkewlse be applled.
o llomoo Ceoetol Assotooce cotp v. cA - Lhe sLaLcon rule expresslo
unlus excluslo alLerlus" was applled ln decldlng Lhe case
Cenerally, lnLenLlon of parLles ls reflecLed ln Lhe wordlngs - 1hus, Lhe genera|
ru|e ls LhaL Lhe ||tera| mean|ng of sLlpulaLlons shall conLrol.
o AJelfo ltopettles loc v. cA - Lhe lmporLanL Lask ln conLracL
lnLerpreLaLlon ls Lhe ascerLalnmenL of Lhe lnLenLlon of Lhe parLles. And
LhaL Lask ls Lo be dlscharged by looklng Lo.a|| the words, noL [usL a
parLlcular word or Lwo, and words |n context, noL words ln lsolaLlon.
o cooJe v. cA - lf Lhe conLracL ls plaln and unequlvocal ln lLs Lerms, he ls
ordlnarlly bound Lhereby. lL ls Lhe duLy of every conLracLlng parLy Lo
learn and know lLs conLenLs before he slgns. 1hus, parLles musL every
conLracL Lhey enLer lnLo very carefully.
o 5ootl v. cA - lease conLracL provlded: 20 year perlod of lease belng
exLendable for anoLher perlod of 20 years. Lower courL lnLerpreLed
Lhls as auLomaLlc renewal. lL was held LhaL we musL look aL llLeral
meanlng when Lhe Lerms are clear and unequlvocal. 1here ls no
reason to construe Lhese Lerms ln a dlfferenL meanlng. lf Lhey wanLed
auLomaLlc exLenslon, Lhey could have [usL provlded for a perlod of 40
years.
o uolvetsol 1extlle Mllls, loc. v. Nlkc -- nL8C mlsread and mlsapplled
provlslons of a C8A. lL was held LhaL Lhe nL8C cannoL remake a
conLracL by evlsceraLlng lL, by deleLlng words placed Lhere by Lhe
parLles. no courL, lnLerpreLer, or appller of a conLracL has such
prerogaLlve.
! 1he lnLerpreLaLlon or consLrucLlon of a conLracL does not
|nc|ude |ts mod|f|cat|on or creat|on of a new and d|fferent
one.
! WhaLever lnLerpreLaLlon Lhe courL wlll make should be wlLhln
Lhe realm of whaL Lhe parLles lnLended.
! 1hey cannoL revlse or modlfy.

81
Art. 1371 - Contemporaneous and Subsequent Acts Determ|ne Intent
ln order Lo [udge Lhe lnLenLlon of Lhe conLracLlng parLles, Lhelr conLemporaneous
and subsequenL acLs shall be prlnclpally consldered. (1282)
An lnLerpreLer musL look aL Lhe reasons and surroundlng clrcumsLances behlnd
a conLracL's execuLlon - 1hls ls so he may place hlmself |n the s|tuat|on
occup|ed by the part|es concerned aL Lhe Llme of Lhe wrlLlng.
lloqol v. cA - Lhere was a dlspuLe as Lo wheLher Lhe purchase agreemenL was a
conLracL Lo sell, or an absoluLe sale. 1he courL looked aL Lhe conLemporaneous
and subsequenL acLs of Lhe parLles. ursuanL Lo Lhe deed, Lhe vendor dellvered
acLual and consLrucLlve possesslon of Lhe properLy Lo Lhe vendee. vendee
occupled and Look such possesslon, consLrucLed a bulldlng Lhereon. 1hese acLs
are demonsLraLlve LhaL Lhe vendor, slnce Lhe sale, recognlzed Lhe vendee as
Lhe absoluLe owner of Lhe properLy. 1hus, lL was a conLracL of absoluLe sale.
kopooot v. cA - Lhe conLroversy was abouL Lhe lnLerpreLaLlon of a provlslon on
Lhe appllcaLlon of lnLeresL. SlgnlflcanL ls Lhe facL LhaL prlvaLe respondenL
accepLed Lhe paymenLs peLlLloner rellglously made for four years. 1hus, Lhe
acts of the respondent made the app||cat|on of the prov|s|on c|earer - lL was
LhaL lnLeresL LhaL was appllcable. Slnce Lhere was no ob[ecLlon or resclsslon,
respondenL was now esLopped.
cotcellet v. cA - analysls and consLrucLlon should noL be llmlLed Lo Lhe words
used ln Lhe conLracL, as Lhey may noL accuraLely reflecL Lhe parLles' Lrue lnLenL.
keasonab|eness of the resu|t obta|ned oughL Lo be consldered. ConLracLs
should noL be lnLerpreLed ln a harsh and lnlqulLous way.
Art. 1372 - Spec|a| Intent reva||s Cver Genera| Intent
Powever general Lhe Lerms of a conLracL may be, Lhey shall noL be undersLood Lo
comprehend Lhlngs LhaL are dlsLlncL and cases LhaL are dlfferenL from Lhose upon
whlch Lhe parLles lnLended Lo agree. (1283)
1wo laLln maxlms are ln Lhe purvlew of Lhls arLlcle :
Noscltot o soclls
o Ceneral and unllmlLed Lerms are restra|ned and ||m|ted
o 8y Lhe part|cu|ar terms LhaL follow.
josJem qeoetls
o A general Lerm [olned wlLh a speclflc one wlll be deemed Lo lnclude
on|y th|ngs that are ||ke, of the same genus as, the spec|f|c one.
Lx. S sells hls house lncludlng all Lhe furnlLure Lhereln."
o all" only modlfles furnlLure"
o lL should noL lnclude S's refrlgeraLor, whlch ls dlsLlncL from
furnlLure.
Art. 1373 - Interpretat|on of St|pu|at|on w|th Severa| Mean|ngs
lf some sLlpulaLlon of any conLracL should admlL of several meanlngs, lL shall be
undersLood as bearlng LhaL lmporL whlch ls mosL adequaLe Lo render lL effecLual.
(1284)
8as|c ku|e : 1erms ln a consLrucL musL be glven a consLrucLlon as wlll glve effecL
Lo Lhem.
Lx. S sells hls parcel of land" Lo 8.
! S owns 2 lands - one owned by hlm absoluLely, and anoLher
LhaL he co-owns wlLh C. C dld noL glve consenL.
! We musL lnLerpreL lL as referrlng Lo Lhe land owned by hlm
alone, as Lhls would glve Lhe conLracL effecL.
loo llm v. cA - where Lhe lnsLrumenL ls suscepLlble of Lwo lnLerpreLaLlons, one
whlch wlll make lL lnvalld and lllegal, and anoLher whlch wlll make lL valld and
legal, Lhe |atter |nterpretat|on should be lnLerpreLed.
klJjo 1ope ooJ cbemlcol cotp v. cA - consLrucLlon resulLlng ln lmpalrmenL or
loss of rlghL ls noL favored.
o ConservaLlon and preservaLlon, noL walver, forfelLure, or
abandonmenL of a rlghL ls Lhe rule.
Art. 1374 - Interpretat|on of Var|ous St|pu|at|ons
1he varlous sLlpulaLlons of a conLracL shall be lnLerpreLed LogeLher, aLLrlbuLlng Lo
Lhe doubLful ones LhaL sense whlch may resulL from all of Lhem Laken [olnLly. (1283)
rovlslons of a conLracL musL be read as a who|e, and not |n |so|at|on.
Lach provlslon musL be relaLed Lo each oLher Lo clearly know the tota| |mport
and appllcaLlon of Lhe law.
Lx. 8 leased hls house Lo L.
! 1he conLracL sald LhaL L should noL sublease Lhe house
wlLhouL Lhe wrlLLen consenL of 8.
! AnoLher sLlpulaLlon sald LhaL L should pay 1000 as addlLlonal
renL a monLh, should he vlolaLe Lhe condlLlon.
! L subleased Lhe house wlLhouL consenL of 8.
! 8 has no r|ght to e[ect L, because of Lhe clause sLaLlng Lhe
pena|ty for the v|o|at|on of Lhe condlLlon.

82
kolz v. 5bettlff of Moollo - conLroversy lnvolvlng a morLgage conLracL, and
foreclosure. lLs enLlreLy musL be Laken lnLo accounL, and noL merely lLs lasL Lwo
senLences. A readlng of Lhe enLlre provlslon wlll readlly show LhaL appellanLs
were allowed Lo amorLlze Lhelr loan. 1hls lllusLraLes LhaL llke sLaLuLory
consLrucLlon, meanlng can be found by readlng a|| of the prov|s|ons, as a
who|e.
Art. 137S - Interpretat|on of Words w|th D|fferent S|gn|f|cat|ons
Words whlch may have dlfferenL slgnlflcaLlons shall be undersLood ln LhaL whlch ls
mosL ln keeplng wlLh Lhe naLure and ob[ecL of Lhe conLracL. (1286)
Lx. 8 leased Lo L a roof for Lhe purpose of erect|ng an advert|s|ng s|gn.
o ConLracL provldes for term|nat|on of Lhe lease by L lf a bulldlng" should
be consLrucLed on Lhe ad[olnlng properLy LhaL would obscure L's slgn.
o 1here was erecLed on Lhe roof of an ad[olnlng bulldlng a s|gn LhaL
obsLrucLed Lhe vlew of L's slgn.
o 1he Lerm bulldlng" may be lncluded as Lo lnclude Lhe obsLrucLlng slgn,
havlng ln mlnd the nature and ob[ect of the contract - LhaL slLuaLlon
where L's slgn was obscured.

Art. 1376 - Usage or Custom as a|d |n Interpretat|on
1he usage or cusLom of Lhe place shall be borne ln mlnd ln Lhe lnLerpreLaLlon of Lhe
amblgulLles of a conLracL, and shall flll Lhe omlsslon of sLlpulaLlons whlch are
ordlnarlly esLabllshed. (1287)
Lx. x rendered servlces Lo ?, buL Lhe conLracL dld noL sLaLe Lhe amounL of
compensaLlon Lo be pald. ln Lhls case, Lhe amounL musL be deLermlned by Lhe
raLe cusLomarlly pald ln Lhe place where Lhe servlces where rendered.
lL ls necessary Lo prove Lhe exlsLence of usage or cusLom - burden of proof on
he who alleges lL.
usage or cusLom cannoL supersede or vary Lhe plaln and llLeral Lerms of a
conLracL.
o 1he proper offlce of a cusLom or usage ln Lrade ls Lo ascerta|n and
exp|a|n the mean|ng and |ntent|on of Lhe parLles. lL does noL go
beyond Lhls, and ls used as a mode of lnLerpreLaLlon on the theory
that the part|es knew of |ts ex|stence and contracted w|th reference
to |t.
Art. 1377 - Interpretat|on of Cbscure Words
1he lnLerpreLaLlon of obscure words or sLlpulaLlons ln a conLracL shall noL favor Lhe
parLy who caused Lhe obscurlLy. (1288)
Words or sLlpulaLlons LhaL cause amblgulLy ln appllcaLlon shall be consLrued
aga|nst the person who chose to use such |anguage.
o 1hls ls Lhe cootto ptefeteotem rule.
o Aga|nst the profferer - he who drafLed Lhe documenLs
o 8eason for Lhls ls LhaL Lhe one who drafLed Lhe conLracL had beLLer
opporLunlLy Lo prevenL mlsLake or amblgulLy
1hls rule ls generally applled Lo contracts of adhes|on
o 1hose conLracLs whlch do noL resulL ln negoLlaLlon
o repared by one parLy Lo whlch Lhe oLher may adhere Lo" lf he
wlshes, buL whlch he cannoL change - a Lake lL or leave lL" conLracL
copltol losotooce v.. 5oJooq - amblgulLy ln Lhe morLgage conLracL drafLed by
lawyer of lnsurance company led Lo amblgulLy ln appllcaLlon. 1he courL ruled
LhaL Lhe doubL musL be resolved agalnsL CaplLol, whose lawyer prepared Lhe
documenL.
Art. 1378 - ku|es |n Case Doubts are Imposs|b|e to Sett|e
When lL ls absoluLely lmposslble Lo seLLle doubLs by Lhe rules esLabllshed ln Lhe
precedlng arLlcles, and Lhe doubLs refer Lo lncldenLal clrcumsLances of a graLulLous
conLracL, Lhe leasL Lransmlsslon of rlghLs and lnLeresLs shall prevall. lf Lhe conLracL ls
onerous, Lhe doubL shall be seLLled ln favor of Lhe greaLesL reclproclLy of lnLeresLs.
lf Lhe doubLs are casL upon Lhe prlnclpal ob[ecL of Lhe conLracL ln such a way LhaL lL
cannoL be known whaL may have been Lhe lnLenLlon or wlll of Lhe parLles, Lhe
conLracL shall be null and vold. (1289)
S|tuat|on contemp|ated : afLer appllcaLlon of all Lhe precedlng rules, Lhere are
sLlll doubLs LhaL exlsL.
1hls arLlcle glves supplemenLary rules, dependlng on whaL klnd of conLracL lL ls,
and where Lhe doubLs lle.
o Gratu|tous Contract - such lnLerpreLaLlon should be made whlch
would resulL ln Lhe leasL Lransmlsslon of rlghLs and lnLeresLs.
! Lx. 8 gave hls car Lo L. lL ls noL clear wheLher conLracL ls a
donaLlon or a commodaLum.
! 1he conLracL ls presumed Lo be a mere commodaLum
because LhaL LransmlLs less rlghLs.

83
o Cnerous ConLracL - doubLs should be seLLled ln favor of the greatest
rec|proc|ty of |nterests.
Lx. u borrows from C 3,000 aL 12 lnLeresL.
! lL cannoL be deLermlned wheLher Lhe loan ls payable ln 6
monLhs or one year.
! lL musL be assumed LhaL Lhe perlod agreed upon ls one year
whlch resulLs ln greater rec|proc|ty, slnce u can use Lhe
money for one year, and C can earn lnLeresL due for one year
lnsLead of [usL 6 monLhs.
! A conLracL for sale ls generally onerous - Lhus, lf doubL ls
beLween a suspenslve condlLlon or a suspenslve perlod for
Lhe paymenL of a prlce, Lhe doubL shall be resolved ln favor of
Lhe laLLer. Colte v. loooclet
o rlnclpal ob[ecL of Lhe conLracL - doubL refers Lo Lhe pr|nc|pa| ob[ect
of the contract, leavlng Lhe lnLenLlon of Lhe parLles Lo be unknown,
Lhen Lhe conLracL shall be null and vold.
Lx. S sold Lo 8 hls land. S has many lands, and lL cannoL be
deLermlned whlch land was lnLended.
! 1hls conLracL ls null and vold.

Art. 1379 - ku|es of Court App||cab|e
1he prlnclples of lnLerpreLaLlon sLaLed ln 8ule 123 of Lhe 8ules of CourL shall
llkewlse be observed ln Lhe consLrucLlon of conLracLs. (n)
lL ls now conLalned ln 8ule 130.
1he secLlons are reproduced ln Lhe book.
Chapter 6: kesc|ss|b|e Contracts
Art. 1380 - kesc|ss|b|e Contracts Def|ned
ConLracLs valldly agreed upon may be resclnded ln Lhe cases esLabllshed by law.
(1290)
kesc|ss|b|e Contracts are Lhose valldly agreed upon because al Lhe
essenLlal elemenLs exlsL, and Lherefore, legally effecLlve, buL ln Lhe cases
esLabllshed by law, Lhe remedy of resclsslon ls granLed ln Lhe lnLeresL of
equlLy.
kequ|s|tes of kesc|ss|on:
1. ConLracL valldly agreed upon
2. ecunlary pre[udlce Lo one of Lhe parLles or a Lhlrd person
3. 8esclsslon musL be based on a case provlded by law
4. no oLher legal remedy
3. arLy asklng for resclsslon musL be able Lo reLurn whaL he ls
obllged Lo resLore
6. Cb[ecL of Lhe conLracL musL noL be legally ln Lhe possesslon of a
3
rd
person who acqulred lL ln good falLh
7. erlod for flllng has noL prescrlbed. (ue Leon)
8esclsslble conLracLs are valld, buL may be LermlnaLed upon |ega| grounds.
o 8esclsslblllLy predlcaLed noL on breach of LrusL, buL on economlc
damage as a resulL of lnequlLable conducL by a parLy.
ulloq v. cA - ConLracL ln fraud of credlLors buL compleLely slmulaLed ls vold
ab lnlLlo.
Art. 1381 - Cases of kesc|ss|b|e Contracts
1he followlng conLracLs are resclsslble:
(1) 1hose whlch are enLered lnLo by guardlans whenever Lhe wards whom Lhey
represenL suffer leslon by more Lhan one-fourLh of Lhe value of Lhe Lhlngs whlch are
Lhe ob[ecL Lhereof,
(2) 1hose agreed upon ln represenLaLlon of absenLees, lf Lhe laLLer suffer Lhe leslon
sLaLed ln Lhe precedlng number,
(3) 1hose underLaken ln fraud of credlLors when Lhe laLLer cannoL ln any oLher
manner collecL Lhe clalms due Lhem,
(4) 1hose whlch refer Lo Lhlngs under llLlgaLlon lf Lhey have been enLered lnLo by
Lhe defendanL wlLhouL Lhe knowledge and approval of Lhe llLlganLs or of compeLenL
[udlclal auLhorlLy,
(3) All oLher conLracLs speclally declared by law Lo be sub[ecL Lo resclsslon. (1291a)
LnLered lnLo by guardlans whenever Lhe wards whom Lhey represenL suffer
leslon by more Lhan one-fourLh of Lhe value of Lhe Lhlngs whlch are Lhe ob[ecL
Lhereof.
o Les|on - economlc damage.
o AcL of ownershlp by guardlan on behalf of hls ward, wlLh respecL Lo
ward's properLy, wlLhouL courL approval ls vold.

84
o WhaL ls conLemplaLed here ls a LransacLlon wlLh courL approval -
whlch ls valld.
o lf by guardlan's acL of ownershlp however, causes ward Lo suffer
economlc damage - more Lhan one-fourLh of Lhe value of Lhe Lhlngs of
Lhe ob[ecL of Lhe conLracL - Lhe conLracL can be resclnded.
1hose agreed upon ln represenLaLlon of absenLees, lf Lhe laLLer suffer Lhe leslon
sLaLed ln Lhe precedlng number.
o rov|s|ona| absence - person dlsappears from hls domlclle,
whereabouLs unknown, wlLhouL leavlng an agenL - [udge can appolnL
an admlnlsLraLor aL Lhe lnsLance of an lnLeresLed parLy, relaLlve, or
frlend.
o now |s absence dec|ared - courL may declare a person absenL when:
! Absence for more Lhan Lwo years wlLhouL news
! Absence for flve years (lf person has lefL admlnlsLraLor)
o Same rule as ln Lhe prevlous number applles
1hose underLaken ln fraud of credlLors when Lhe laLLer cannoL ln any oLher
manner collecL Lhe clalms due Lhem.
o ConLracL enLered Lo ln bad falLh.
o ueslgned Lo evade Lhe due obllgaLlons ln favor of credlLors, who have
no oLher way of collecLlng Lhelr debLs.
o 8obls v. ltovloclol 5betlff of comotloes Notte - lL ls essenLlal Lo prove
LhaL boLh conLracLlng parLles have acLed mallclously and wlLh fraud ln
order Lo pre[udlce credlLors.
! 1hls refers only Lo acLual credlLors of Lhe debLor
! Motsmoo lovestmeot ltJ v.. lblllpploe Aboco uevelopmeot
compooy - plalnLlff corporaLlons had ceased Lo be Lhe
credlLors of Lransferer AuCC as of 1939, and were
LhereafLer deprlved of any lnLeresL ln assalllng Lhe valldlLy of
Lhe Lransfer of lLs properLles Lo Marsman.
1hose whlch refer Lo Lhlngs under llLlgaLlon lf Lhey have been enLered lnLo by
Lhe defendanL wlLhouL Lhe knowledge and approval of Lhe llLlganLs or of
compeLenL [udlclal auLhorlLy
Lx. ln a sulL for replevln whereln plalnLlff seeks Lo recover personal
properLy from Lhe defendanL
! uefendanL cannot |n bad fa|th sell Lhe properLy belng
llquldaLed Lo any Lhlrd person
! lf he does, and Lhe Lhlrd person ls ln bad falLh as well, such
conLracL ls resclsslble
! lltoojoo v. lk cotpototloo
CredlLor lenL money Lo debLor
uebLor collaLerallzed hls properLy Lo secure such
loan
lallure of debLor Lo recognlze/lmplemenL Lhe
sLlpulaLed rlghL of flrsL refusal of Lhe credlLor wlll
make any sale of Lhe properLy Lo a Lhlrd person
resclsslble
All oLher conLracLs speclally declared by law Lo be sub[ecL Lo resclsslon
Art. 1382 - ayments Made |n State of Inso|vency
aymenLs made ln a sLaLe of lnsolvency for obllgaLlons Lo whose fulflllmenL Lhe
debLor could noL be compelled aL Lhe Llme Lhey were effecLed, are also resclsslble.
(1292)
Inso|vency - when a debLor has llablllLles ln excess of hls asseLs and can barely
pay off hls debLs.
lf he pay a credlLor whose credlL |s not yet due, such paymenL can be resclnded
rlor [udlclal declaraLlon of lnsolvency noL requlred.
Art. 1383 - Nature of Act|on for kesc|ss|on
1he acLlon for resclsslon ls subsldlary, lL cannoL be lnsLlLuLed excepL when Lhe parLy
sufferlng damage has no oLher legal means Lo obLaln reparaLlon for Lhe same.
(1294)
AcLlon for resclsslon can only be made ln a proper and dlrecL acLlon f||ed for
that purpose, and noL on a mere moLlon lncldenLal Lo anoLher case.
Alt ltooce v. cA - AcLlon for resclsslon may noL be ralsed or seL up ln a
summary proceedlng Lhrough a moLlon, buL ln a an lndependenL clvll acLlon
and only afLer a full blown Lrlal.
lL musL also be Lhe |ast remedy. CLher means Lo clalm reparaLlon musL be
avalled of flrsL - lncluded here ls Lhe flllng of a courL case.
kbe nooq cbeoq v. cA - presupposlLlons for an occloo poollooo, or acLlon for
resclsslon LhaL hlghllghL Lhe polnL LhaL lL has Lo be Lhe lasL remedy.
1. A [udgmenL
2. lssuance by Lrlal courL of a wrlL of execuLlon for saLlsfacLlon of Lhe
[udgmenL
3. lallure of sherlff Lo enforce and saLlsfy courL's [udgmenL
Art. 1384 - Lxtent of kesc|ss|on
8esclsslon shall be only Lo Lhe exLenL necessary Lo cover Lhe damages caused. (n)

83
8esclsslon presupposes a valld conLracL.
o lL need noL be resclnded LoLally - resclsslon shall only be up Lo Lhe
exLenL needed Lo cover Lhe damage.
8ecall : 8esclsslon ls based on economlc damage as a resulL of lnequlLable
conducL.
Art. 138S - kesc|ss|on Creates Cb||gat|on of Mutua| kest|tut|on
8esclsslon creaLes Lhe obllgaLlon Lo reLurn Lhe Lhlngs whlch were Lhe ob[ecL of Lhe
conLracL, LogeLher wlLh Lhelr frulLs, and Lhe prlce wlLh lLs lnLeresL, consequenLly, lL
can be carrled ouL only when he who demands resclsslon can reLurn whaLever he
may be obllged Lo resLore.
nelLher shall resclsslon Lake place when Lhe Lhlngs whlch are Lhe ob[ecL of Lhe
conLracL are legally ln Lhe possesslon of Lhlrd persons who dld noL acL ln bad falLh.
ln Lhls case, lndemnlLy for damages may be demanded from Lhe person causlng Lhe
loss. (1293)
Cb[ecLlve of resLlLuLlon ls Lo resLore Lhelr parLles Lo Lhelr orlglnal (pre-conLracL)
poslLlon.
upon resclsslon, parLles musL reLurn:
1. 1he ob[ecL of Lhe conLracL
2. lrulLs and lnLeresLs of such ob[ecL, lf any
lf ob[ecL cannoL be resLored because of loss - damages may be clalmed.
8esclsslon cannoL Lake place lf Lhe ob[ecL of Lhe conLracL ls legally ln possesslon
of a Lhlrd parLy ln good falLh.
o Cood falLh ls presumed unless conLrary evldence ls adduced.
Art. 1386 - Contracts Approved by the Courts
8esclsslon referred Lo ln nos. 1 and 2 of ArLlcle 1381 shall noL Lake place wlLh
respecL Lo conLracLs approved by Lhe courLs. (1296a)
numbers 1 and 2:
o Cuardlan wlLh respecL Lo ward's properLy
o AdmlnlsLraLor - absenLee
ConLracLs enLered lnLo by Lhese people, once [udlclally approved, cannoL be
sub[ecL of resclsslon.
o Approval lmplles LhaL Lhe conLracL was [usLlfled already ln Lhe eyes of
Lhe courL.

Art. 1387 - When A||enat|on resumed |n Iraud of Cred|tors
All conLracLs by vlrLue of whlch Lhe debLor allenaLes properLy by graLulLous LlLle are
presumed Lo have been enLered lnLo ln fraud of credlLors, when Lhe donor dld noL
reserve sufflclenL properLy Lo pay all debLs conLracLed before Lhe donaLlon.
AllenaLlons by onerous LlLle are also presumed fraudulenL when made by persons
agalnsL whom some [udgmenL has been lssued. 1he declslon or aLLachmenL need
noL refer Lo Lhe properLy allenaLed, and need noL have been obLalned by Lhe parLy
seeklng Lhe resclsslon.
ln addlLlon Lo Lhese presumpLlons, Lhe deslgn Lo defraud credlLors may be proved ln
any oLher manner recognlzed by Lhe law of evldence. (1297a)
1hls arLlcle provldes rebuttab|e presumpt|ons.
o lL creaLes Lhe presumpLlon LhaL acLs have been done ln fraud of
credlLors
o Powever, all Lhese presumpLlons may be rebuLLed by sLrong evldence
LhaL Lhe conLracL was noL ln fraud of credlLors.
I|rst - debLor allenaLes properLy by graLulLous LlLle, when donor dld noL
reserve sufflclenL properLy Lo pay all debLs conLracLed before such donaLlon
o Lx. 8 owes a LoLal of 30,000 Lo several credlLors
o Pe has 60,000 ln Lhe bank
o Pe donaLes 33,000 Lo x - donaLlon ls presumed Lo be fraudulenL
o MaLurlLy of debLs lmmaLerlal
Second - AllenaLlon by onerous LlLle ls made by persons agalnsL whom some
[udgmenL has been lssued
o 1hls refers Lo a person agalnsL whom a wr|t of attachment has a|ready
been |ssued
o Mere allenaLlon durlng pendency of sulL does noL creaLe Lhe
presumpLlon
o AllenaLlon need noL refer Lo properLy aLLached
Lx. A obLalns a wrlL of aLLachmenL agalnsL debLor 8, wlLh respecL Lo a
properLy ln Mandaluyong.
! lf 8 sells hls properLy ln Laguna Lhe presumpLlon arlses, even
lf lL ls noL Lhe properLy aLLached
Art. 1388 - L|ab|||ty of urchaser |n 8ad Ia|th
Whoever acqulres ln bad falLh Lhe Lhlngs allenaLed ln fraud of credlLors, shall
lndemnlfy Lhe laLLer for damages suffered by Lhem on accounL of Lhe allenaLlon,
whenever, due Lo any cause, lL should be lmposslble for hlm Lo reLurn Lhem.

86
lf Lhere are Lwo or more allenaLlons, Lhe flrsL acqulrer shall be llable flrsL, and so on
successlvely. (1298a)
8uyer who knows LhaL conveyance has been made ln fraud of credlLors shall be
llable for damages Lo Lhe cred|tor, should lL be lmposslble Lo reLurn Lhe
properLy.
lf he can, he has obllgaLlon Lo reLurn whaL has been Lransferred Lo hlm ln bad
falLh.
Art. 1389 - er|od for I|||ng Act|on for kesc|ss|on
1he acLlon Lo clalm resclsslon musL be commenced wlLhln four years.
lor persons under guardlanshlp and for absenLees, Lhe perlod of four years shall
noL begln unLll Lhe LermlnaLlon of Lhe former's lncapaclLy, or unLll Lhe domlclle of
Lhe laLLer ls known. (1299)
When Lhe four year perlod beglns :
Cenerally, when Lhe aggrleved parLy has unsuccessfu||y exhausted a||
poss|b|e remed|es Lo enforce Lhe obllgaLlon or Lo recover whaL has been
losL
o ersons under guard|ansh|p - from Lhe Llme Lhe lncapaclLy
LermlnaLes
o lor absentees - from Lhe Llme he learns of Lhe conLracL
o Defrauded cred|tors - from Lhe Llme Lhe fraud ls dlscovered
o 1h|ngs under ||t|gat|on - from Lhe Llme of knowledge of Lhe
LransacLlon
Chapter 7: Vo|dab|e Contracts
Art. 1390 - Vo|dab|e Contracts Def|ned
1he followlng conLracLs are voldable or annullable, even Lhough Lhere may have
been no damage Lo Lhe conLracLlng parLles:
(1) 1hose where one of Lhe parLles ls lncapable of glvlng consenL Lo a conLracL,
(2) 1hose where Lhe consenL ls vlLlaLed by mlsLake, vlolence, lnLlmldaLlon, undue
lnfluence or fraud.
1hese conLracLs are blndlng, unless Lhey are annulled by a proper acLlon ln courL.
1hey are suscepLlble of raLlflcaLlon. (n)
Vo|dab|e or annu||ab|e contracts - Lhose whlch possess all Lhe essenLlal
requlslLes, buL one of Lhe parLles.
a. ls lncapable of glvlng consenL.
b. Pas hls consenL vlLlaLed by mlsLake, vlolence, undue lnfluence or
fraud.
1hey may be cured by Lhe aggrleved parLy - rat|f|cat|on
llm 1oy v. cA - annulmenL operaLes prospecLlvely, and does noL reLroacL.
Art. 1391 - er|od for I|||ng Act|on for Annu|ment
1he acLlon for annulmenL shall be broughL wlLhln four years.
1hls perlod shall begln:
ln cases of lnLlmldaLlon, vlolence or undue lnfluence, from Lhe Llme Lhe defecL of
Lhe consenL ceases.
ln case of mlsLake or fraud, from Lhe Llme of Lhe dlscovery of Lhe same.
And when Lhe acLlon refers Lo conLracLs enLered lnLo by mlnors or oLher
lncapaclLaLed persons, from Lhe Llme Lhe guardlanshlp ceases. (1301a)
rescrlpLlve perlod Lo annul a conLracL ls four years.
SLarLlng polnL depends on Lhe ground lnvoked.
1. lnLlmldaLlon, vlolence, undue lnfluence - when such defect ceases.
Lx. A lnLlmldaLes 8 wlLh bodlly harm ln order Lo enLer lnLo a lease
conLracL. 1he momenL A reforms and sLops Lhe LhreaLs, Lhe four
year perlod beglns counLlng.
2. MlsLake or lraud - from Lhe d|scovery of such defecL
Lx. A fools 8 lnLo Lhlnklng LhaL a [ewel ls made of dlamond, when ln
facL lL ls made of glass. Cnce 8 dlscovers Lhe fraud, Lhe perlod
beglns runnlng.
3. ConLracLs enLered lnLo by mlnors or oLher lncapaclLaLed persons -
from Lhe momenL guard|ansh|p ends
Lx. lf A's guardlan fraudulenLly Lransfers hls properLy Lo a
Lhlrd parLy, A musL walL unLll Lhe guardlanshlp ceases Lo
flle Lhe case, and from Lhere, Lhe perlod wlll begln
runnlng.

87
Art. 1392 - Lffect of kat|f|cat|on
8aLlflcaLlon exLlngulshes Lhe acLlon Lo annul a voldable conLracL. (1309a)
Art. 1393 - Iorms of kat|f|cat|on
8aLlflcaLlon may be effecLed expressly or LaclLly. lL ls undersLood LhaL Lhere ls a LaclL
raLlflcaLlon lf, wlLh knowledge of Lhe reason whlch renders Lhe conLracL voldable
and such reason havlng ceased, Lhe person who has a rlghL Lo lnvoke lL should
execuLe an acL whlch necessarlly lmplles an lnLenLlon Lo walve hls rlghL. (1311a)
kat|f|cat|on - Lhe acL of curlng Lhe defecL whlch made Lhe conLracL annullable -
lL exLlngulshes Lhe acLlon Lo annul
May be express or LaclL:
A. Lxpress - afLer coerclon ceases, A Lells 8 LhaL he wlll conLlnue Lo pay
Lhe lease paymenLs
8. 1ac|t - AfLer coerclon ceases, A merely conLlnues Lo pay Lhe renLals for
Lhe properLy
! 8equlslLes:
1. knowledge of reason whlch renders conLrcL voldable
2. Such reason ceases
3. ln[ured parLy execuLes an acL whlch lmplles an
lnLenLlon Lo walve hls rlghL
o ln boLh cases, Lhe defecL ls cured whuch erases Lhe lnflrmlLy ln Lhe
conLracL.
oo ko 5lo 1toJloq v. cA - no raLlflcaLlon by a corporaLlon of acLs performed by
an offlcer lf he has no auLhorlLy from such corporaLlon, or lf such acLs are noL
laLer valldaLed.
Art. 1394 - Who May kat|fy
8aLlflcaLlon may be effecLed by Lhe guardlan of Lhe lncapaclLaLed person. (n)
Guard|an - Lakes wlLh Lhe admlnlsLraLlon of person and properLles of Lhe ward
A conLracL enLered lnLo by an lncapaclLaLed person may be raLlfled by:
A. Cuardlan
8. ln[ured parLy hlmself, once capaclLaLed
! no longer lnsane, for example
! 8eaches age of ma[orlLy
ln case conLracL ls voldable on ground of mlsLake, eLc - raLlflcaLlon can be
made by parLy whose consenL ls vlLlaLed.
Art. 139S - Conform|ty of Gu||ty arty to kat|f|cat|on Not kequ|red
8aLlflcaLlon does noL requlre Lhe conformlLy of Lhe conLracLlng parLy who has no
rlghL Lo brlng Lhe acLlon for annulmenL. (1312)
kat|f|cat|on - unllaLeral acL
ConsenL of ln[urlng parLy ls noL requlred.
Art. 1396 - ketroact|ve Lffect of kat|f|cat|on
8aLlflcaLlon cleanses Lhe conLracL from all lLs defecLs from Lhe momenL lL was
consLlLuLed. (1313)
8aLlflcaLlon reLroacLs Lo Lhe day Lhe conLracL was enLered lnLo.
lL makes Lhe conLracL valld from lLs lncepLlon, sub[ecL Lo Lhe prlor rlghLs of Lhlrd
persons.
o "pr|or" - means prlor Lo raLlflcaLlon
Art. 1397 - arty Lnt|t|ed to 8r|ng an Act|on to Annu|
1he acLlon for Lhe annulmenL of conLracLs may be lnsLlLuLed by all who are Lhereby
obllged prlnclpally or subsldlarlly. Powever, persons who are capable cannoL allege
Lhe lncapaclLy of Lhose wlLh whom Lhey conLracLed, nor can Lhose who exerLed
lnLlmldaLlon, vlolence, or undue lnfluence, or employed fraud, or caused mlsLake
base Lhelr acLlon upon Lhese flaws of Lhe conLracL. (1302a)
Ceneral rule - only parLles Lo Lhe conLracL may brlng an acLlon for lLs
annulmenL.
8equlslLes for capaclLy Lo annul:
1. MusL be lnLeresLed ln Lhe conLracL
2. 1he vlcLlm ls Lhe one who musL asserL Lhe same (ln oLher words, Lhe
person who caused Lhe defecL cannoL be Lhe one Lo brlng Lhe acLlon
for annulmenL)
! CapaclLaLed persons may noL allege Lhe lncapaclLy of Lhe
oLher parLy ln order Lo annul
! Powever, ln case Lhe lncapaclLy lnvolved ls mlnorlLy, Lhe
capaclLaLed parLy may flle a case for enforcement, provlded
LhaL Lhe mlsrepresenLaLlon of ma[orlLy was act|ve
! users of lnLlmldaLlon, eLc cannoL annul Lhe conLracL based on
Lhese acLs.


88
LxcepLlons:
1. A person who ls noL a parLy.may exerclse an acLlon for Lhe nulllLy of
Lhe conLracL |f he |s pre[ud|ced |n h|s r|ghts wlLh respecL Lo one of Lhe
conLracLlng parLles.
2. .and can show the detr|ment whlch would poslLlvely resulL Lo hlm
from Lhe sald conLracL. 8ooez v. cA
! 1hus, a sLranger Lo Lhe conLracL musL show:
1. re[udlce Lo hls rlghLs
2. ueLrlmenL LhaL would resulL
Art. 1398 - Duty of Mutua| kest|tut|on upon Annu|ment
An obllgaLlon havlng been annulled, Lhe conLracLlng parLles shall resLore Lo each
oLher Lhe Lhlngs whlch have been Lhe sub[ecL maLLer of Lhe conLracL, wlLh Lhelr
frulLs, and Lhe prlce wlLh lLs lnLeresL, excepL ln cases provlded by law.
ln obllgaLlons Lo render servlce, Lhe value Lhereof shall be Lhe basls for damages.
(1303a)
arLles, as a general rule, musL resLore Lo each oLher, upon annulmenL:
1. Sub[ecL maLLer of Lhe conLracL, wlLh frulLs
2. rlce Lhereof, wlLh legal lnLeresL
Llke ln resclsslon, Lhe purpose ls Lo resLore Lhe parLles Lo Lhelr or|g|na| pos|t|on.
ln personal obllgaLlons, where servlce had already been rendered, Lhe value
Lhereof wlLh lnLeresL ls Lhe basls for damages.
Art. 1399 - kest|tut|on by an Incapac|tated erson
When Lhe defecL of Lhe conLracL conslsLs ln Lhe lncapaclLy of one of Lhe parLles, Lhe
lncapaclLaLed person ls noL obllged Lo make any resLlLuLlon excepL lnsofar as he has
been beneflLed by Lhe Lhlng or prlce recelved by hlm. (1304)
When defecL conslsLs ln lncapaclLy, Lhe lncapaclLaLed person ls noL obllged Lo
make any resLlLuLlon except lnsofar as he has been benef|ted by the th|ng or
pr|ce recelved by hlm.
Lx. A loans 8, a mlnor, money.
! lf 8 spends lL uselessly, A cannoL recover even lf courL
declares Lhe obllgaLlon annulled.
! lf 8 spends lL on Lhlngs beneflclal Lo hlm, such as LulLlon for
school, A may recover.
! Powever, slnce as a general rule, capaclLaLed persons may
noL allege lncapaclLy ln order Lo annul. A may only recover
upon an acLlon for annulmenL flled by 8 when he reaches
ma[orlLy
Art. 1400 - Lffect of Loss of 1h|ng to be keturned
Whenever Lhe person obllged by Lhe decree of annulmenL Lo reLurn Lhe Lhlng can
noL do so because lL has been losL Lhrough hls faulL, he shall reLurn Lhe frulLs
recelved and Lhe value of Lhe Lhlng aL Lhe Llme of Lhe loss, wlLh lnLeresL from Lhe
same daLe. (1307a)
LffecL of Loss of 1hlng Lo be 8eLurned:
lf losL w|thout the fau|t of person obllged:
o no more obllgaLlon Lo reLurn such Lhlng.
o 1he oLher parLy cannoL be compelled Lo resLore whaL he had recelved.
lf |ost through fau|t of person obllged:
o CbllgaLlon converLed lnLo a clalm for damages
o Damages - value of Lhe Lhlng aL Lhe Llme of Lhe loss, wlLh lnLeresL
from Lhe same daLe, and frulLs recelved from Lhe Lhlng.
Lx. S sold hls plow and carabao Lo 8. Cn peLlLlon of S, conLracL was
annulled. Powever, carabao dled Lhrough faulL of 8.
! 8 musL pay value of carabao aL Lhe Llme of lLs deaLh, wlLh
lnLeresL from Lhe same daLe.
! lf carabao had glven blrLh, Lhe baby carabao would be
dellvered Lo S as a frulL.
Art. 1401 - Lxt|ngu|shment of Act|on for Annu|ment
1he acLlon for annulmenL of conLracLs shall be exLlngulshed when Lhe Lhlng whlch ls
Lhe ob[ecL Lhereof ls losL Lhrough Lhe fraud or faulL of Lhe person who has a rlghL Lo
lnsLlLuLe Lhe proceedlngs.
lf Lhe rlghL of acLlon ls based upon Lhe lncapaclLy of any one of Lhe conLracLlng
parLles, Lhe loss of Lhe Lhlng shall noL be an obsLacle Lo Lhe success of Lhe acLlon,
unless sald loss Look place Lhrough Lhe fraud or faulL of Lhe plalnLlff. (1314a)


89
LxLlngulshmenL of AcLlon for AnnulmenL:
no one can come Lo courL wlLh unclean hands.
lf Lhe person who had a rlghL Lo lnsLlLuLe an acLlon for annulmenL ls unab|e to
restore the th|ng he would be obllged Lo reLurn, because such th|ng |s |ost
through h|s fau|t, Lhe rlghL Lo annul ls exLlngulshed.
o lf A coerces 8 Lo sell hlm a car, 8 can seek annulmenL.
o Powever, lf 8 loses Lhe car by lnLenLlonally desLroylng lL, hls rlghL Lo
flle Lhe acLlon would be exLlngulshed.
8lghL of acLlon based on lncapaclLy - Lhe rule ls Lhe same.
o Cenerally, lf an lncapaclLaLed person loses Lhe ob[ecL, Lhere ls no bar
Lo Lhe acLlon for annulmenL.
! 1hls ls because he ls only obllged Lo resLore Lo Lhe exLenL of
how he was beneflLed.
! lf Lhe ob[ecL was losL, he could noL have beneflLed.
o Powever, lf he loses lL Lhrough hls own faulL, Lhe case for annulmenL
wlll be dlsmlssed.
Art. 1402 - Lffect where a arty Cannot kestore Cb[ect
As long as one of Lhe conLracLlng parLles does noL resLore whaL ln vlrLue of Lhe
decree of annulmenL he ls bound Lo reLurn, Lhe oLher cannoL be compelled Lo
comply wlLh whaL ls lncumbenL upon hlm. (1308)
When a conLracL ls annulled, a rec|proca| ob||gat|on of rest|tut|on ls creaLed.
8eLurn by one parLy of whaL he ls obllged Lo resLore ls regarded as a condlLlon
Lo Lhe fulflllmenL of Lhe oLher's obllgaLlon Lo reLurn.
1hus, lf a parLy cannoL reLurn whaL he has recelved, Lhe oLher may noL be
compelled Lo reLurn whaL he has recelved.
Chapter 8: Unenforceab|e Contracts
Art. 1403 - Uneforceab|e Contracts Def|ned
1he followlng conLracLs are unenforceable, unless Lhey are raLlfled:
(1) 1hose enLered lnLo ln Lhe name of anoLher person by one who has been glven
no auLhorlLy or legal represenLaLlon, or who has acLed beyond hls powers,
(2) 1hose LhaL do noL comply wlLh Lhe SLaLuLe of lrauds as seL forLh ln Lhls number.
ln Lhe followlng cases an agreemenL hereafLer made shall be unenforceable by
acLlon, unless Lhe same, or some noLe or memorandum, Lhereof, be ln wrlLlng, and
subscrlbed by Lhe parLy charged, or by hls agenL, evldence, Lherefore, of Lhe
agreemenL cannoL be recelved wlLhouL Lhe wrlLlng, or a secondary evldence of lLs
conLenLs:
(a) An agreemenL LhaL by lLs Lerms ls noL Lo be performed wlLhln a year from Lhe
maklng Lhereof,
(b) A speclal promlse Lo answer for Lhe debL, defaulL, or mlscarrlage of anoLher,
(c) An agreemenL made ln conslderaLlon of marrlage, oLher Lhan a muLual promlse
Lo marry,
(d) An agreemenL for Lhe sale of goods, chaLLels or Lhlngs ln acLlon, aL a prlce noL
less Lhan flve hundred pesos, unless Lhe buyer accepL and recelve parL of such
goods and chaLLels, or Lhe evldences, or some of Lhem, of such Lhlngs ln acLlon or
pay aL Lhe Llme some parL of Lhe purchase money, buL when a sale ls made by
aucLlon and enLry ls made by Lhe aucLloneer ln hls sales book, aL Lhe Llme of Lhe
sale, of Lhe amounL and klnd of properLy sold, Lerms of sale, prlce, names of Lhe
purchasers and person on whose accounL Lhe sale ls made, lL ls a sufflclenL
memorandum,
(e) An agreemenL of Lhe leaslng for a longer perlod Lhan one year, or for Lhe sale of
real properLy or of an lnLeresL Lhereln,
(f) A represenLaLlon as Lo Lhe credlL of a Lhlrd person.
(3) 1hose where boLh parLles are lncapable of glvlng consenL Lo a conLracL.
unenforceable ConLracLs :
1hose LhaL cannoL be enforced ln courL or sued upon by reason of cerLaln
defecLs provlded by law.
o Lven lf Lhey have all Lhe requlslLes for perfecLlon.
unLll and unless Lhey are raLlfled accordlng Lo law.
8|nd|ng force - none unLll Lhey are raLlfled.
klnds of unenforceable ConLracLs :
1. Unauthor|zed contracts - Lhose enLered lnLo ln Lhe name of anoLher by one
wlLhouL, C8 acLlng ln excess of, auLhorlLy.
o Coverned by ArLlcle 1317
2. 1hose that do not comp|y w|th the Statute of Irauds

90
3. 1hose where both part|es are |ncapab|e of g|v|ng consent to a contract.
1he SLaLuLe of lrauds - ln Ceneral:
urpose:
1. revenL fraud
2. Cuard agalnsL mlsLakes by honesL men
3. 8y requlrlng cerLaln agreemenLs LhaL are suscept|b|e to fraud musL be
ln wrlLlng
4. lor cerLaln execuLory conLracLs Lo be enforceable ln a courL of law, Lhe
on|y evldence LhaL can prove such conLracL ls a wr|tten proof of the
agreement.
AppllcaLlon (some fundamenLal prlnclples relaLlve Lo Lhe SLaLuLe of lrauds)
noLe - when we say appllcable," lL means LhaL such conLracLs musL be
reduced Lo wrlLlng. lf noL appllcable," lL's okay LhaL lL's noL ln wrlLlng
o Sol noL appllcable ln acLlons LhaL are noL for.
! uamages because of vlolaLlon of conLracL
! Speclflc performance of a conLracL.
o Sol appllcable on|y to executory contracts (LhaL ls, where no
performance has yeL Lo be made by elLher parLy)
! noL Lo conLracLs whlch are LoLally or parLlally performed
! Why? - erformance, llke wrlLlng, furnlshes re||ab|e ev|dence
of Lhe lnLenLlon of Lhe parLles or Lhe exlsLence of Lhe conLracL
! Lx. ConLracL of sale of real properLy ln lnsLallmenL noL wlLhln
Lhe SLaLuLe, lf Lhe flrsL lnsLallmenL has a|ready been pa|d. -
Lhls consLlLuLes parLlal performance
! 8oboo v. letez - oral conLracL parLlally performed musL be
proven clearly ln courL.
! arLlal performance can also be manlfesLed when
lmprovemenLs are made on properLy, renLals are pald, eLc -
ln general, acLs of parLlal performance remove Lhe conLracL
from Lhe Sol
o Sol noL appllcable when Lhe conLracL ls admlLLed expressly, or
lmplledly by Lhe fallure Lo deny speclflcally lLs exlsLence.
o Sol appllcable on|y to the agreements enumerate there|n
o Sol noL appllcable where a wrlLlng does not express the true
agreement of the part|es.
o lL does noL declare conLracLs vold.
o 1he defense of Lhe Sol may be walved.
o 1he defense of Lhe Sol ls personal Lo Lhe parLles - cannoL be
lnLerposed by sLrangers Lo Lhe conLracL
o No part|cu|ar form of |anguage or |nstrument needed Lo consLlLuLe a
memorandum or noLe ln wrlLlng under Lhe Sol
! need noL be conLalned ln a slngle documenL
! 2 or more wrlLlngs properly connecLed may serve as Lhe
requlred memorandum
! Lx. llmketkol 5oos Mlllloq loc v. cA
Whlle Lhere was no wrlLLen conLracL of sale. Lhere
are abundanL noLes and memoranda exLanL ln Lhe
records of Lhls case evldenclng Lhe elemenLs of a
perfecLed conLracL.
1he SLaLuLe of lrauds - AgreemenLs wlLhln lLs Scope:
AgreemenL noL Lo be performed w|th|n one year from the mak|ng thereof
Lx. Cn CcL 10, 2007, S enLered lnLo an oral conLracL wlLh 8 for Lhe
consLrucLlon of 8's house Lo beg|n on CcLober 20, 2008. - Such
conLracL musL be ln wrlLlng
! lor such conLracL Lo fall under Lhe Sol, lL musL appear LhaL
Lhe parLles |ntended when they made the contract that |t
shou|d not be performed w|th|n a year.
o lf a conLracL sLlpulaLes LhaL a cerLaln Lype of acLlvlLy shall be
commenced wlLhln Lhe year, buL can only be f|n|shed after one year,
Lhe Sol wlll apply.
Lx. Cn March 21, 2012, A enLers lnLo a conLracL wlLh 8 LhaL 8
wlll consLrucL a skyscraper, Lo commence on !une 30, 2012.
Cbvlously, such conLracL cannoL be flnlshed by March 2012,
so lL musL be ln wrlLlng.
o lf a parLy fully pald Lhe boulder of Lhe bulldlng for Lhe compleLe
consLrucLlon of Lhe same slx monLhs afLer Lhe maklng of Lhe conLracL,
lL does noL come wlLhln Lhe sLaLuLe.
! 8obeo v. letez - conLracLs whlch y Lhelr Lerms are noL Lo be
performed wlLhln one year may be Laken ouL of Lhe sLaLuLe
by performance of one parLy LhereLo.
All tbot ls tepolteJ.|s comp|ete performance
w|th|n one year of one party, however many years
elapse before agreemenL ls performed by anoLher
parLy."

91
.ootbloq less tboo foll petfotmooce by ooe potty
wlll sofflce, and lL has been held LhaL lf anyLhlng
remalns Lo be done afLer explraLlon of Lhe year,
besldes Lhe mere paymenL of money, Lhe sLaLuLe wlll
apply."
romlse Lo answer for Lhe debt, defau|t, or m|scarr|age of anoLher
Lx. u owes C 10,000, wlLh C as guaranLor.
! C promlses Lo answer for Lhe debL of u ln case u falls.
! 1hls agreemenL (beLween C and u) ls unenforceable unless lL
ls ln wrlLlng slgned by C.
o 1he promlse here ls merely subs|d|ary or co||atera| Lo Lhe promlse of
anoLher (orlglnal debLor, u)
o lf Lhe promlse ls an or|g|na| or |ndependent one, Lhe promlse ls noL
wlLhln Lhe Sol and Lhus may be proven by oral evldence.
o Speclal promlse" - express and LaclL promlses ln facL made.
! uoes noL apply ln cases where duLles are creaLed by law
wlLhouL any promlssory assenL.
o uebL, defaulL, mlscarrlage" - lncludes all legal obllgaLlons under
whlch a person can come, conLracLual or non-conLracLual, requlrlng a
money paymenL or any oLher klnd of performance.
o lf obllgaLlon ls [o|nt - no spec|a| prom|se
! one ls noL consldered as promlslng.wlLhln Lhe meanlng of
Lhe sLaLuLe. where hls performance wlll also exLlngulsh Lhe
promlsor's own debL."
o lf obllgaLlon ls so||dary - depends on whether or not the prom|sor
knew that on|y one of the so||dary debtors wou|d tru|y be benef|ted
by payment.
! 8uL lf one of several promlsors ls Lo have Lhe purchased
goods or Lhe borrowed money, Lhe oLhers lendlng Lhelr credlL
as securlLy, Lhe laLLer are answerlng for Lhe debL of anoLher
wlLhln Lhe sLaLuLe."
AgreemenL ln cons|derat|on of marr|age other than prom|se to marry
Lx. M agrees Lo bulld a house worLh 1M for W, lf W marrles M.
! Appllcable even when promlse Lo bulld Lhe house ls made by
a Lhlrd person Lo W.
o MuLual promlse Lo marry beLween M and W need noL be ln wrlLlng.
! noLe - law sLaLes no perlod Lo performance, unllke number 1
! An oral muLual promlse Lo marry may be proved by parol
evldence, even |f marr|age |s to be ce|ebrated beyond one
year
o CLher examples
! Marrlage seLLlemenLs
! uonaLlons propLer nupLlas
AgreemenL for sa|e of goods, aL a prlce not |ess that S00.
Lx. S and 8 muLually promlsed Lo sell and buy a plano worLh 12,000.
! 1hls agreemenL musL be ln wrlLlng Lo be enforceable agalnsL
elLher parLy
! Un|ess there |s a|ready de||very or part|a|]fu|| payment.
AgreemenL for |eas|ng for a |onger per|od than one year.
Lx. 8 agreed Lo lease hls house Lo L for Lwo years.
! MusL be ln wrlLlng, unless parLlally execuLed.
AgreemenL for sale of rea| property or of an |nterest there|n.
Lx. 8 orally sold hls land or hls rlghL of usufrucL ln sald land Lo 8.
! Such agreemenL ls unenforceable, unless lL has been parLlally
execuLed.
8epresenLaLlon as Lo Lhe cred|t of a th|rd person
Lx. u ls seeklng a loan from C.
! 1 represenLs Lo C LhaL u ls solvenL and has a good credlL
repuLaLlon.
! Such represenLaLlon musL be ln wrlLlng.
Art. 1404 - ku|es Govern|ng Unauthor|zed Contracts
unauLhorlzed conLracLs are governed by ArLlcle 1317 and Lhe prlnclples of agency ln
1lLle x of Lhls 8ook.
Art. 140S - Modes of kat|f|cat|on under Statutes of Iraud
ConLracLs lnfrlnglng Lhe SLaLuLe of lrauds, referred Lo ln no. 2 of ArLlcle 1403, are
raLlfled by Lhe fallure Lo ob[ecL Lo Lhe presenLaLlon of oral evldence Lo prove Lhe
same, or by Lhe accepLance of beneflL under Lhem.
Modes of 8aLlflcaLlon under Lhe Sol :
lallure Lo ob[ecL Lo Lhe presenLaLlon of oral evldence Lo prove Lhe conLracL
o 1hls amounLs Lo a walver of Lhe Sol.
o Makes Lhe conLracL as blndlng as lf lL had been reduced Lo wrlLlng.
o llmketkol 5oos Mlllloq v. cA - conLacLs lnfrlnglng Lhe Sol are raLlfled
when Lhe defense falls Lo ob[ecL, or asks quesLlons on cross-
examlnaLlon."
! as no Llmely ob[ecLlon or proLesL was made Lo Lhe admlsslon
of Lhe LesLlmony of Lhe plalnLlff wlLh respecL Lo Lhe conLracL.

92
[defendanLs] LaclLly walved Lhere rlghL Lo have lL sLrlcken
ouL."
AccepLance of beneflLs under Lhe conLracL.
o ln Lhls case, Lhe conLracL ls no longer execuLory.
Lx. A sold Lo C a parLlcular real properLy, and A beneflLed from Lhe
LransacLlon by already obLalnlng Lhe purchase prlce .
! ConLracL of sale can be enforced, even lf noL ln wrlLlng.
Art. 1406 - k|ght of a arty where Contract Lnforceab|e
When a conLracL ls enforceable under Lhe SLaLuLe of lrauds, and a publlc documenL
ls necessary for lLs reglsLraLlon ln Lhe 8eglsLry of ueeds, Lhe parLles may avall
Lhemselves of Lhe rlghL under ArLlcle 1337.
When Lhe agreemenLs ln Lhe Sol are ln wrlLlng and Lhus enforceable, and Lhe
law requlres LhaL such documenL should be Lransformed lnLo a pbullc
documenL for reglsLraLlon.
ConLracLlng parLles may compe| each other to observe the form once Lhe
conLracL has been perfecLed.
Art. 1407 - When Uneforceab|e Contract becomes Vo|dab|e
ln a conLracL where boLh parLles are lncapable of glvlng consenL, express or lmplled
raLlflcaLlon by Lhe parenL, or guardlan, as Lhe case may be, of one of Lhe conLracLlng
parLles shall glve Lhe conLracL Lhe same effecL as lf only one of Lhem were
lncapaclLaLed.
lf raLlflcaLlon ls made by Lhe parenLs or guardlans, as Lhe case may be, of boLh
conLracLlng parLles, Lhe conLracL shall be valldaLed from Lhe lncepLlon.
lf boLh parLles have no guardlan, for example, Lhen lL ls unenforceable.
lf Lhere ls one guardlan, or lf one of Lhe parLles upon galnlng capaclLy raLlles lL,
lL becomes voldable.
lf raLlflcaLlon ls made by guardlans, or by boLh parLles upon aLLalnlng capaclLy,
Lhls bevcomed valld.
Art. 1408 - k|ght of 1h|rd ersons to Assa|| an Unforceab|e Contract
unenforceable conLracLs cannoL be assalled by Lhlrd persons.
1hlrd persons cannoL assall unenforceable conLracLs.
o 1hey cannoL be execuLed anyway.
o 1hey are noL parLles Lo Lhe conLracL.

Chapter 9: Vo|d and Inex|stent Contracts
ArLlcles 1409 and 1422 provlde for Lhe lnsLances where conLracLs are
deemed vold or lnexlsLenL. lL musL be noLed LhaL where conLracLs are dlvlslble and
Lhe lllegal Lerms can be separaLed, Lhe legal ones may be enforced (1420).
1he defense agalnsL Lhe nulllLy of vold conLracLs does noL prescrlbe (1410)
and Lhls defense may even be ralsed by a 3
rd
person provlded LhaL hls lnLeresL ls
dlrecLly affecLed (1421).
usually, when parLles enLer lnLo a conLracL LhaL ls conLrary Lo law, Lhe
parLles are noL ln good falLh. 1hus, ArLlcles 1411 Lo 1419 Lalk abouL potl Jellcto.
Cenerally, parLles who are ln parl dellcLo may noL recover whaL has been glven nor
compel Lhe oLher Lo comply wlLh whaL has been agreed upon (1411 -1412)
Powever, Lhe law provldes some excepLlons Lo Lhls rule and glves lnsLances when
recovery may be made (1413 - 1419).

Art. 1409 - Instances of vo|d or |nex|stent contracts
1he followlng conLracLs are lnexlsLenL and vold from Lhe beglnnlng:
(1) 1hose whose cause, ob[ecL or purpose ls conLrary Lo law, morals, good cusLoms,
publlc order or publlc pollcy,
(2) 1hose whlch are absoluLely slmulaLed or flcLlLlous,
(3) 1hose whose cause or ob[ecL dld noL exlsL aL Lhe Llme of Lhe LransacLlon,
(4) 1hose whose ob[ecL ls ouLslde Lhe commerce of men,
(3) 1hose whlch conLemplaLe an lmposslble servlce,
(6) 1hose where Lhe lnLenLlon of Lhe parLles relaLlve Lo Lhe prlnclpal ob[ecL of Lhe
conLracL cannoL be ascerLalned,
(7) 1hose expressly prohlblLed or declared vold by law.
1hese conLracLs cannoL be raLlfled. nelLher can Lhe rlghL Lo seL up Lhe defense of
lllegallLy be walved.

WhaL are vold and lnexlsLenL conLracLs?
Vo|d Contracts - Lhose whlch, because of cerLaln defecLs qeoetolly
produce no effecL aL all. lL ls no conLracL aL all.

93
o Lxcept|on - see ArL 1411-1412 where lllegal conLracLs may
produce effecLs where parLles are noL of equal gullL.
Inex|stent Contracts - agreemenLs whlch lack one or some or all of Lhe
elemenLs or do noL comply wlLh formallLles whlch are essenLlal for Lhe
exlsLence of conLracLs.
CharacLerlsLlcs of a vold or lnexlsLenL conLracL:
1. Cenerally ptoJoces oo effect
2. lL cannoL be totlfleJ (ArL 1409, ar 2)
3. 1he rlghL Lo seL up tbe Jefeose of llleqollty coooot be wolveJ
4. 1he acLlon or defense for Lhe declaraLlon of lLs lnexlsLence Joes oot
ptesctlbe (ArL. 1410)
3. 1he defense of lllegallLy ls oot ovolloble to J
tJ
petsoos whose lnLeresL are
noL dlrecLly affecLed (ArL. 1421)
6. lL cannoL glve rlse Lo a valld conLracL (ArL. 1422)
lnsLances of vold or lnexlsLenL conLracLs:
1. Contracts whose cause, ob[ect or purpose |s contrary to |aw, etc.
ue leoo v. cA - A conLracL whose conslderaLlon ls Lhe LermlnaLlon
of Lhe marrlage by Lhe parLles ls vold for belng conLrary Lo law and
llllplno morals and publlc pollcy.
ltoJeotlol book v. lools - MorLgage conLracL enLered lnLo by Lhe
granLee wlLhln Lhe prohlblLed perlod provlded by Lhe ubllc Land
AcL ls null and vold.
Mobotllko lobllsbloq co. v. 1oqle -A conLracL of sale ln a publlc
belddlng enLered lnLo by a wlfe acLlng ln behalf of her husband,
an lnfluenLlal publlc offlclal, was declared vold for belng vlolaLlve
of publlc pollcy/order.
col v. Atellooo uolvetslty - A conLracL LhaL provldes a refund of
scholarshlp granL as a precondlLlon Lo a sLudenL's Lransfer ls vold
for belng conLrary Lo publlc pollcy and morals.
a. ub||c o||cy - courL musL flnd LhaL Lhe conLracL
conLravenes some esLabllshed lotetest of soclety, ot
locooslsteot wltb soooJ pollcy ooJ qooJ motols ot teoJs
to ooJetmloe tbe secotlty of loJlvlJool tlqbts. (5ee ArL.
1306 and 1416 for more examples)
2. Contracts wh|ch are abso|ute|y s|mu|ated or f|ct|t|ous.
CotJoet v. cA - a conLracL purporLlng a sale of land was really
wlLhouL conslderaLlon and was acLually lnLended merely Lo
proLecL a parLy was held as absoluLely slmulaLed and Lherefore
null and vold. (See ArL. 1343 and 1346 for more examples)
3. Contracts w|thout cause or ob[ect
1he phrase "JlJ oot exlst ot tbe tlme of tbe ttoosoctloo does noL
apply Lo a fuLure Lhlng whlch may legally be Lhe ob[ecL of a
conLracL (ue Leon).
5ee ArL. 1347, 1332, and 1333 for examples and commenLs.
4. Contracts whose ob[ect |s outs|de the commerce of men
5ee commenLs and examples under ArL. 1347 and 1348.
3. Contracts wh|ch contemp|ate an |mposs|b|e serv|ce
5ee commenLs and examples under ArL. 1347 and 1348
6. Contracts where the |ntent|on of the part|es re|at|ve to the ob[ect cannot
be ascerta|ned
5ee commenLs and examples under ArL. 1378, par. 2
7. Contracts express|y proh|b|ted or dec|ared vo|d by |aw
Lx.
o. A sLlpulaLlon prohlblLlng a morLgagor Lo sell properLy
morLgaged ls vold for belng conLrary Lo Lhe express
provlslon of ArL. 2130 of Lhe Clvll Code
b. ConLracLs upon fuLure lnherlLance excepL Lhose expressly
auLhorlzed by law (ArL. 1347)
c. Sale of properLy beLween husband and wlfe excepL when
Lhere ls separaLlon of properLy (ArL. 1490)
J. uonaLlon beLween spouses (ArL. 87, lC)
1he defecL ln a vold conLracL ls permanenL and lncurable:
cbovez v. lcCC - A vold agreemenL wlll noL be rendered operaLlve by Lhe
parLles' alleged part|a| or fu|| performance of Lhelr respecLlve presLaLlons.
lL produces no legal effecL.
Atseool v. lAc - nelLher can an lnflrmlLy be cured by equ|ty.
Acletto v. ue los 5ootos - 1he par| de||cto docLrlne may noL be lnvoked ln
vold conLracLs LhaL run conLrary Lo sLaLe pollcy.
19 Am. Iot. 802 - lL ls generally consldered LhaL as beLween parLles Lo a
conLracL, valldlLy cannoL be glven Lo lL by estoppe| lf lL ls prohlblLed by law
or agalnsL publlc pollcy.
oqeolo v. letflJo - Lhe mere |apse of t|me cannoL glve efflcacy Lo
conLracLs LhaL are null and vold.


94
Art. 1410 - Act|on or Defense |s Imprescr|pt|b|e
1he acLlon or defense for Lhe declaraLlon of Lhe lnexlsLence of a conLracL does noL
prescrlbe.
1here ls no need Lo [udlclally flle an acLlon Lo make Lhe conLracL vold. A
case ls flled merely Lo declare LhaL Lhe conLracL, whlch ls vold, ls ln facL
vold.
Lx. lor a conslderaLlon of 2,000,000, 8 wlll consLrucL A's house ln 3
days. 1hls ls vold for belng lmposslble. 1here ls no need Lo flle a
case. lL ls vold. Powever, A may flle a case Lo have lL declared vold
lf A has already pald Lhe 2,000,000
uocLrlne of Laches does noL apply.
u8l v. cA - resLlLuLlon should generally apply ln vold conLracLs lf boLh
parLles have no faulL or are noL gullLy.
Art. 1411 - ku|es where Contract |s I||ega| and Act |s Cr|m|na| Cffense
When Lhe nulllLy proceeds from Lhe lllegallLy of Lhe cause or ob[ecL of Lhe conLracL,
and Lhe acL consLlLuLes a crlmlnal offense, boLh parLles belng ln parl dellcLo, Lhey
shall have no acLlon agalnsL each oLher, and boLh shall be prosecuLed. Moreover,
Lhe provlslons of Lhe enal Code relaLlve Lo Lhe dlsposal of effecLs or lnsLrumenLs of
a crlme shall be appllcable Lo Lhe Lhlngs or Lhe prlce of Lhe conLracL.
1hls rule shall be appllcable when only one of Lhe parLles ls gullLy, buL Lhe lnnocenL
one may clalm whaL he has glven, and shall noL be bound Lo comply wlLh hls
promlse. (1303)
nC1L: ArLlcles 1411 and 1412 embody Lhe general prlnclple LhaL Lhe law refuse
remedy when parLles are ln parl dellcLo. Some excepLlons Lo Lhls rule are conLalned
ln ArLlcles 1413 Lo 1419.
8ules where conLracL ls lllegal and Lhe acL consLlLuLes an lllegal offense:
Where both part|es are |n par| de||cto (NC)
a. 1he parLles shall have oo octloo agalnsL each oLher.
b. 8oLh shall be ptosecoteJ.
c. 1he Lhlngs or Lhe prlce of Lhe conLracL, as effecLs or lnsLrumenLs
of Lhe crlme shall be cooflscoteJ ln favour of Lhe CovernmenL.
Lx. A and 8 enLer lnLo a conLracL where A wlll kldnap x and brlng
hlm Lo 8. ln reLurn, 8 wlll glve Lhe car used Lo kldnap x Lo A.
A has no acLlon agalnsL 8 lf 8 does noL glve Lhe car even lf Lhe
former succeeded ln kldnapplng x. 1he same rule applles lf 8
complles and A does noL.
8oLh A and 8 wlll be prosecuLed and Lhe car wlll be
conflscaLed ln favour of Lhe governmenL when kldnapplng ls
commlLLed.
Where on|y one party |s gu||ty - Lhe same rule as above wlll apply agalnsL
Lhe gullLy parLy buL Lhe lnnocenL parLy (1) may clalm whaL he has glven and
(2) shall noL be bound Lo comply wlLh hls promlse
ArLlcles 1411 and 1412 do noL apply Lo lnexlsLenL conLracLs:
MoJloo v. cA - An lnexlsLenL conLracL has absoluLely no conslderaLlon aL
all, or Lhere ls LoLal absence of consenL, or Lhere ls no ob[ecL. 1hus, potl
Jellcto wlll noL apply because Lhese conLracLs have conslderaLlons or
ob[ecLs, buL are lllegal. 5lmoloteJ coottoct ls an example.
Art. 1412 - ku|es where Contract |s I||ega| but Act |s not Cr|m|na| Cffense
lf Lhe acL ln whlch Lhe unlawful or forbldden cause conslsLs does noL consLlLuLe a
crlmlnal offense, Lhe followlng rules shall be observed:
(1) When Lhe faulL ls on Lhe parL of boLh conLracLlng parLles, nelLher may recover
whaL he has glven by vlrLue of Lhe conLracL, or demand Lhe performance of Lhe
oLher's underLaklng,
(2) When only one of Lhe conLracLlng parLles ls aL faulL, he cannoL recover whaL he
has glven by reason of Lhe conLracL, or ask for Lhe fulflllmenL of whaL has been
promlsed hlm. 1he oLher, who ls noL aL faulL, may demand Lhe reLurn of whaL he
has glven wlLhouL any obllgaLlon Lo comply hls promlse. (1306)
8ules where Lhe conLracL ls lllegal buL Lhe acL does noL consLlLuLe a crlmlnal offense:
Where both part|es are |n par| de||cto
1. nelLher parLy may recover whaL he has glven by vlrLue of Lhe
conLracL.
2. nelLher parLy may demand Lhe performance of Lhe oLher's
underLaklng.
Where on|y one party |s gu||ty
1. 1he gullLy parLy loses whaL he has glven by reason of Lhe conLracL.

93
2. 1he gullLy parLy cannoL ask for Lhe fulfllmenL of Lhe oLher's
underLaklng.
3. 1he lnnocenL parLy may demand Lhe reLurn of whaL he has glven.
4. 1he lnnocenL parLy cannoL be compelled Lo comply wlLh hls
promlse.
Art. 1413 - kecovery of Usur|ous Interest
lnLeresL pald ln excess of Lhe lnLeresL allowed by Lhe usury laws may be recovered
by Lhe debLor, wlLh lnLeresL Lhereon from Lhe daLe of Lhe paymenL.
aymenL of usurlous lnLeresL ls vold.
Aoqel Iose v. cbelJo otetptlse - Lhe phrase lnLeresL pald ln excess of Lhe
lnLeresL allowed by law" means Lhe who|e |nterest pa|d.
Lx. ln a loan of 1,000, wlLh lnLeresL of 20 per annum (w/c ls a
usurlous raLe) or 200 per year, lf Lhe borrower pays sald 200,
Lhe whole 200 ls Lhe usurlous lnLeresL. 1he borrower may
recover Lhe whole 200 and noL [usL Lhe parL whlch ls ln excess of
Lhe lnLeresL allowed by law.
Art. 1414 - kecovery where Contract Lntered Into for I||ega| urpose
When money ls pald or properLy dellvered for an lllegal purpose, Lhe conLracL may
be repudlaLed by one of Lhe parLles before Lhe purpose has been accompllshed, or
before any damage has been caused Lo a Lhlrd person. ln such case, Lhe courLs may,
lf Lhe publlc lnLeresL wlll Lhus be subserved, allow Lhe parLy repudlaLlng Lhe conLracL
Lo recover Lhe money or properLy.
8ecovery where conLracL enLered lnLo for lllegal purpose:
1. 1he conLracL ls for an lllegal purpose.
2. 1he conLracL ls repudlaLed before Lhe purpose has been accompllshed or
before any damage has been caused Lo a Lhlrd person.
3. 1he courL conslders LhaL publlc lnLeresL wlll be subserved by allowlng
recover.
Lx. ue leoo v. coott of Appeols - Lhe Supreme CourL allowed Lhe
recovery of 380, 000 pesos pald by Lhe husband's moLher who
reslsLed Lhe wlfe's aLLempL Lo enforce Lhe oLher provlslons of Lhe
vold conLracL (as lLs conslderaLlon ls Lhe LermlnaLlon of marlLal
sLaLus beLween Lhe husband and Lhe wlfe).

Art. 141S - kecovery by an Incapac|tated erson
Where one of Lhe parLles Lo an lllegal conLracL ls lncapable of glvlng consenL, Lhe
courLs may, lf Lhe lnLeresL of [usLlce so demands allow recovery of money or
properLy dellvered by Lhe lncapaclLaLed person.
1hls rule ls wlLhln Lhe dlscreLlon of Lhe courL hence lL may lssue an order
allowlng or dlsallowlng recover of money.
Lx. A, a mlnor, enLers lnLo a conLracL wlLh 8 for Lhe purchase of lllegal drugs
worLh 10,000. 1he courL may allow Lhe mlnor Lo recover Lhe 10,000
pesos lf lL flnds LhaL Lhe lnLeresL of [usLlce so demands.
Art. 1416 - kecovery where Contract |s Not I||ega| per se
When Lhe agreemenL ls noL lllegal per se buL ls merely prohlblLed, and Lhe
prohlblLlon by Lhe law ls deslgnaLed for Lhe proLecLlon of Lhe plalnLlff, he may, lf
publlc pollcy ls Lhereby enhanced, recover whaL he has pald or dellvered.
When ls recovery permlLLed?
1. 1he agreemenL ls noL lllegal per se buL ls merely prohlblLed
2. 1he prohlblLlon ls deslgned for Lhe proLecLlon of Lhe plalnLlff
3. ubllc pollcy would be enhanced by allowlng Lhe plalnLlff Lo recover whaL
he has polJ or JellveteJ.
Lx. kos v. 5oo - 1he Supreme CourL allowed repossesslon of a cerLaln land Lo
Lhe owner who acqulred Lhe same pursuanL Lo a law deslgned Lo glve land
Lo Lhe landless even when Lhe sald owner leased, ln vlolaLlon of Lhe splrlL
of Lhe law, Lhe sald land Lo anoLher person who laLer refused Lo reLurn Lhe
same desplLe demand of Lhe owner and even afLer Lhe former vlolaLed Lhe
lease agreemenL on Lhe ground of potl Jellcto
Art. 1417 - kecovery of Amount a|d |n Lxcess of Ce|||ng r|ce
When Lhe prlce of any arLlcle or commodlLy ls deLermlned by sLaLuLe, or by
auLhorlLy of law, any person paylng any amounL ln excess of Lhe maxlmum prlce
allowed may recover such excess.
lL ls lllegal Lo charge a prlce hlgher Lhan Lhe sLaLuLory celllng. Any paymenL
ln excess of such may be recovered.


96
Art. 1418 - kecovery of Add|t|ona| Compensat|on
When Lhe law flxes, or auLhorlzes Lhe flxlng of Lhe maxlmum number of hours of
labor, and a conLracL ls enLered lnLo whereby a laborer underLakes Lo work longer
Lhan Lhe maxlmum Lhus flxed, he may demand addlLlonal compensaLlon for servlce
rendered beyond Lhe Llme llmlL.
lf a conLracL provldes LhaL an employee shall work only for 8 hours aL a
cerLaln legal raLe, any work done beyond Lhe 8 hour perlod should be pald
for exLra Llme.
ArLlcles 1418 and 1419 are general provlslons on labor. 1he Labor Code of
Lhe hlllpplnes (u. 442) provldes for Lhe speclflc rlghLs and remedles of
employees.
Art. 1419 - kecovery of Amount of Wage Less than M|n|mum I|xed
When Lhe law seLs, or auLhorlzes Lhe seLLlng of a mlnlmum wage for laborers, and a
conLracL ls agreed upon by whlch a laborer accepLs a lower wage, he shall be
enLlLled Lo recover Lhe deflclency.
lf an employee recelves less Lhan Lhe mlnlmum wage raLe, s/he can sLlll
recover Lhe deflclency wlLh legal lnLeresL (u. 442).
Art. 1420 - Lffect of I||ega||ty where Contract |s Ind|v|s|b|e]D|v|s|b|e
ln case of a dlvlslble conLracL, lf Lhe lllegal Lerms can be separaLed from Lhe legal
ones, Lhe laLLer may be enforced.
LffecLs of lllegallLy where conLracL ls ln/dlvlslble:
1. When Lhe conslderaLlon ls enLlre and slngle, Lhe whole conLracL ls vold and
unenforceable
2. Where conLracL ls dlvlslble or severable, Lhe lllegal ones can be separaLed
from Lhe legal porLlons, Lhe laLLer may be enforced sub[ecL Lo Lhe lnLenLlon
of Lhe parLles.
Lx. loctom commlsotlom ls vold buL Lhe loan agreemenL ls valld
usurlous raLe ls lllegal buL Lhe loan ls valld.

ulvlslble conLracLs dlsLlngulshed from dlvlslble obllgaLlon:
ulvlslble conLracLs refer Lo dlvlslblllLy of cause whlle dlvlslblllLy of
obllgaLlon refer Lo suscepLlblllLy Lo parLlal fulfllmenL.

Lx. An annual subscrlpLlon Lo a weekly magazlne where x pays 1,000 ls a
dlvlslble obllgaLlon (for Lhe publlsher) buL ls an lndlvlslble conLracL of
subscrlpLlon.

lf Lhe agreemenL ls LhaL Lhe publlsher wlll dellver magazlne every week
and x wlll pay 20 upon dellvery, Lhe conLracL ls dlvlslble.

Art. 1421 - ersons Lnt|t|ed to ka|se Defense of I||ega||ty or Nu|||ty
1he defense of lllegallLy of conLracL ls noL avallable Lo Lhlrd persons whose lnLeresLs
are noL dlrecLly affecLed.
Ceneral 8ule - Cnly parLles Lo Lhe vold conLracL can ralse Lhe defense of
lllegallLy or nulllLy because conLracLs are muLual obllgaLlons beLween Lhe
parLles.
o LxcepLlon - 3
rd
persons are may avall Lhe defense of lllegallLy or
seL up lLs nulllLy os looq os bls lotetest ls Jltectly offecteJ by tbe
coottoct.
Lx. A sold a parcel of land, whlch he does noL own, Lo 8. x, Lhe owner of
Lhe land whlch ls encroached by sald lllegal sale, may go Lo courL and
seek nulllflcaLlon of Lhe conLracL.
Art. 1422 - Vo|d Contract Cannot be Novated
A conLracL whlch ls Lhe dlrecL resulL of a prevlous lllegal conLracL, ls also vold and
lnexlsLenL.
A subsequenL conLracL whlch proceeds from a vold conLracL ls llkewlse
vold.
Lx. A conLracL of repurchase ls dependenL of Lhe valldlLy of Lhe orlglnal
conLracL of sale. lf Lhe laLLer ls vold, Lhen Lhere ls no rlghL of
repurchase.


97
1|t|e III - NA1UkAL C8LIGA1ICNS

Art. 1423 - Concept of Natura| Cb||gat|ons
CbllgaLlons are clvll or naLural. Clvll obllgaLlons glve a rlghL of acLlon Lo compel Lhelr
performance. naLural obllgaLlons, noL belng based on poslLlve law buL on equlLy
and naLural law, do noL granL a rlghL of acLlon Lo enforce Lhelr performance, buL
afLer volunLary fulflllmenL by Lhe obllgor, Lhey auLhorlze Lhe reLenLlon of whaL has
been dellvered or rendered by reason Lhereof. Some naLural obllgaLlons are seL
forLh ln Lhe followlng arLlcles.
ConcepL of naLural CbllgaLlons:
1hese obllgaLlons resL upon morallLy and are recognlzed ln leadlng clvll
codes.
lL ls based on equlLy and naLural law.
Clvll CbllgaLlons and naLural CbllgaLlons dlsLlngulshed:
1. Clvll obllgaLlons arlse from law, conLracLs, quasl conLracLs, dellcLs, and
quasl-dellcLs, whlle naLural obllgaLlons are based on equlLy and naLural law
2. 1he former glves a rlghL of acLlon Lo compel performance whlle Lhe laLLer
do noL granL such rlghL of acLlon.
Art. 1424 - erformance After C|v|| Cb||gat|on has rescr|bed
When a rlghL Lo sue upon a clvll obllgaLlon has lapsed by exLlncLlve prescrlpLlon, Lhe
obllgor who volunLarlly performs Lhe conLracL cannoL recover whaL he has dellvered
or Lhe value of Lhe servlce he has rendered.
Lx. lf a debLor, desplLe Lhe lapse of Lhe prescrlpLlve perlod and knowlng LhaL
Lhe debL had already prescrlbed, pays Lhe credlLor, such debLor can no
longer recover such paymenL.

Art. 142S - ke|mbursement of 1h|rd erson for rescr|bed Debt
When wlLhouL Lhe knowledge or agalnsL Lhe wlll of Lhe debLor, a Lhlrd person pays a
debL whlch Lhe obllgor ls noL legally bound Lo pay because Lhe acLlon Lhereon has
prescrlbed, buL Lhe debLor laLer volunLarlly relmburses Lhe Lhlrd person, Lhe obllgor
cannoL recover whaL he has pald.
lf a Lhlrd person pays Lhe prescrlbed debL of Lhe debLor wlLhouL hls
knowledge or agalnsL hls wlll, Lhe laLLer ls noL legally bound Lo pay hlm
(ArL. 1236, par. 2). 8uL Lhe debLor cannoL recover whaL he has pald ln case
he volunLarlly relmburses Lhe Lhlrd person.
Lx. A debL has already prescrlbed buL x, a Lhlrd person, pays Lhe debL, and
laLer on, Lhe orlglnal debLor pays x, such paymenL shall be consldered valld
and orlglnal debLor cannoL recover such amounL from Lhe credlLor on Lhe
ground LhaL x should noL have pald hlm.
Art. 1426 - kest|tut|on by M|nor After Annu|ment of Contract
When a mlnor beLween elghLeen and LwenLy-one years of age who has enLered lnLo
a conLracL wlLhouL Lhe consenL of Lhe parenL or guardlan, afLer Lhe annulmenL of
Lhe conLracL volunLarlly reLurns Lhe whole Lhlng or prlce recelved, noLwlLhsLandlng
Lhe facL Lhe he has noL been beneflLed Lhereby, Lhere ls no rlghL Lo demand Lhe
Lhlng or prlce Lhus reLurned.
When a conLracL ls annulled, a mlnor ls noL legally obllged Lo make
resLlLuLlon excepL lnsofar as he has been beneflLed (ArL. 1399). 8uL lf he
neverLheless reLurns Lhe Lhlng or prlce alLhough he has noL been
beneflLed, he cannoL recover.
A mlnor" pursuanL Lo 8A 6809 means below 18 years.
Lx. lf a mlnor sold hls car for 100,000 wlLhouL consenL of hls parenL buL Lhe
mlnor losL 30,000 due Lo negllgence buL was able Lo deposlL Lhe resL ln a
bank, he ls legally obllged Lo reLurn only 70,000 ln case Lhe conLracL ls
laLer annulled. Powever, lf he reLurns Lhe whole 100,000 amounL, Lhere ls
no rlghL Lo demand Lhe same.
Art. 1427 - De||very by M|nor of Money or Iung|b|e 1h|ng
When a mlnor beLween elghLeen and LwenLy-one years of age, who has enLered
lnLo a conLracL wlLhouL Lhe consenL of Lhe parenL or guardlan, volunLarlly pays a
sum of money or dellvers a funglble Lhlng ln fulflllmenL of Lhe obllgaLlon, Lhere shall
be no rlghL Lo recover Lhe same from Lhe obllgee who has spenL or consumed lL ln
good falLh. (1160A)
AfLer annulmenL, Lhe parLles are qeoetolly obllged Lo make muLual
resLlLuLlon (ArL. 1398). Powever, Lhe obllgee who spenL or consumed ln
good falLh Lhe money or consumable Lhlng volunLarlly pald or dellvered by
Lhe mlnor, ls noL bound Lo make resLlLuLlon.

98
1hls arLlcle refers noL only Lo fooqlble tbloqs buL also Lo Lhlngs LhaL are
ooo-coosomoble.
Art. 1428 - erformance After Act|on to Lnforce C|v|| Cb||gat|on Ia||ed
When, afLer an acLlon Lo enforce a clvll obllgaLlon has falled Lhe defendanL
volunLarlly performs Lhe obllgaLlon, he cannoL demand Lhe reLurn of whaL he has
dellvered or Lhe paymenL of Lhe value of Lhe servlce he has rendered.
Lx. A ls lndebLed Lo 8 for 30,000 and a clvll sulL ls flled Lo collecL Lhe amounL
buL such ls dlsmlssed, A ls noL legally obllged Lo pay Lhe sald amounL
because he won. Powever, lf he volunLarlly makes paymenL, he can no
longer recover such paymenL.
Art. 1429 - ayment by ne|r of Debt Lxceed|ng Va|ue of roperty Inher|ted
When a LesLaLe or lnLesLaLe helr volunLarlly pays a debL of Lhe decedenL exceedlng
Lhe value of Lhe properLy whlch he recelved by wlll or by Lhe law of lnLesLacy from
Lhe esLaLe of Lhe deceased, Lhe paymenL ls valld and cannoL be resclnded by Lhe
payer.
1he helr ls noL llable beyond Lhe value of Lhe properLy he recelved from
Lhe decedenL (ArL. 1311, par. 1). 8uL lf he pays Lhe dlfference volunLarlly,
paymenL ls valld and cannoL be resclnded by hlm.
Lx. A ls lndebLed Lo x for 10,000. A laLer dles, wlLh 8 as hls helr who ls
enLlLled only Lo 3,000 from Lhe esLaLe of A. lf 8 volunLarlly pays x
10,000, 8 can no longer recover such an amounL.
Art. 1430 - ayment of Legacy After W||| has been Dec|ared Vo|d
When a wlll ls declared vold because lL has noL been execuLed ln accordance wlLh
Lhe formallLles requlred by law, buL one of Lhe lnLesLaLe helrs, afLer Lhe seLLlemenL
of Lhe debLs of Lhe deceased, pays a legacy ln compllance wlLh a clause ln Lhe
defecLlve wlll, Lhe paymenL ls effecLlve and lrrevocable.
Legacy - Lhe acL of dlsposlLlon by Lhe LesLaLor ln separaLlng from Lhe
lnherlLance for deflnlLe purposes, Lhlngs, rlghLs or a deflnlLe porLlon of hls
properLy. lLs purpose ls Lo reward frlends, servanLs, and oLhers for servlces
Lhey rendered, eLc.
Lx. n provlded ln hls holographlc wlll LhaL hls ab-roller shall go Lo hls frlend !.
LaLer, Lhe holographlc wlll Lurns ouL Lo be parLly Lype-wrlLLen and
Lherefore vold as such should be wholly hand-wrlLLen by Lhe LesLaLor. lf
desplLe Lhls, n's helr, ?, sLlll volunLarlly glves Lhe legacy of Lhe ab-roller Lo !,
lL shall be valld and cannoL be revoked anymore.

1|t|e IV - LS1CLL

Art. 1431 - Lstoppe| Def|ned
1hrough esLoppel an admlsslon or represenLaLlon ls rendered concluslve upon Lhe
person maklng lL, and cannoL be denled or dlsproved as agalnsL Lhe person relylng
Lhereon.
Genera| ku|e - uocLrlne of LsLoppel applles Lo any parLlcular case and lLs
appllcablllLy depends largely on Lhe speclal clrcumsLances of Lhe case (8etoolllo
v. C5l5) afLer careful conslderaLlon of Lhe maLerlal facLs ln order Lo avold
ln[usLlce (kololo v. loz).
Lxcept|ons (G--):
1. LsLoppel ls noL appllcable agalnsL Lhe 83?/.1J/15 sulng ln lLs
capaclLy as soverelgn or asserLlng governmenLal rlghLs
! lL follows LhaL Lhe governmenL cannoL be esLopped by
Lhe mlsLake and errors of lLs offlcers (collectot of lotetool
keveooe v. McCtotb).
2. lf law and M-764L M364LB wlll be vlolaLed, Lhere ls no esLoppel
(kepobllc v. Co 8oo lee).
3. LsLoppel does noL apply Lo P-/954319 3K 60;, as lL applles only Lo
quesLlons of facL
! ln kololo v. loz, lf Lhe acL, conducL, or mlsrepresenLaLlon
of parLy soughL Lo be esLopped ls due Lo lgnorance
founded on an lnnocenL mlsLake, esLoppels wlll noL arlse.

LsLoppel ls characLerlzed as harsh and odlous, and noL favoured ln law. lL
can only be susLalned by clear and convlnclng evldence.


99
Art. 1432 - App||cat|on of Lstoppe|
1he prlnclples of esLoppel are hereby adopLed lnsofar as Lhey are noL ln confllcL
wlLh Lhe provlslons of Lhls Code, Lhe Code of Commerce, Lhe 8ules of CourL and
speclal laws.

Art. 1433 - k|nds of Lstoppe|
LsLoppel may be ln pals or by deed.
klnds of LsLoppel:
1. Lstoppe| by Deed - A bar whlch precludes one parLy Lo a deed and hls
prlvles from asserLlng as agalnsL Lhe oLher parLy and hls prlvles any rlghL or
LlLle ln derogaLlon of Lhe deed, or from denylng Lhe LruLh of any maLerlal
facLs asserLed ln lL.
lL ls Lechnlcal ln naLure and such an esLoppel may conclude a
parLy wlLhouL reference Lo Lhe moral equlLles of hls conducL.
lL ls generally llmlLed Lo an acLlon on Lhe deed lLself, ln a collaLeral
acLlon, Lhere ls ordlnarlly no esLoppel (28 Am !ur 2d 602 - 603)
8equlslLes: (8klA)
1. 1here musL have been a represenLaLlon or concealmenL
of maLerlal facLs
2. 1he represenLaLlon musL have been wlLh knowledge of
Lhe facLs
3. 1he parLy Lo whom lL was made musL have been lgnoranL
of Lhe LruLh of Lhe maLLer
4. lL musL have been made wlLh Lhe lnLenLlon LhaL Lhe oLher
parLy would acL upon lL
2. Lqu|tab|e Lstoppe| or Lstoppe| |n M049 - slLuaLlon where Lhe parLy ls
denled Lhe rlghL Lo plead or prove a facL because of hls own acL or
omlsslon
8esLs on Lhe facLs and clrcumsLance of Lhe case ln whlch lL ls
urged
8equlslLes: (Clk)
1. ConducL amounLlng Lo false represenLaLlon or
concealmenL of maLerlal facLs or aL leasL calculaLed Lo
convey Lhe lmpresslon LhaL Lhe parLy subsequenLly
aLLempLs Lo asserL
2. lnLenL, or aL leasL expecLaLlon LhaL Lhls conducL shall be
acLed upon, or aL leasL lnfluenced by Lhe oLher parLy
3. knowledge, acLual or consLrucLlve, of Lhe acLual facLs
Art. 1434 - Sa|e by erson not the Cwner
When a person who ls noL Lhe owner of a Lhlng sells or allenaLes and dellvers lL, and
laLer Lhe seller or granLor acqulres LlLle LhereLo, such LlLle passes by operaLlon of
law Lo Lhe buyer or granLee.
Lx. A, who wlLhouL auLhorlLy of Lhe owner, sold 8's car Lo C. 1hls sale ls
unenforceable because A ls noL Lhe owner. lf laLer on A buys Lhe car of 8, A
can no longer clalm Lhe properLy as hls own on Lhe ground LhaL when he
sold lL Lo C, he was noL Lhe owner of Lhe same.
Art. 143S - Sa|e by a erson kepresent|ng Another
lf a person ln represenLaLlon of anoLher sells or allenaLes a Lhlng, Lhe former cannoL
subsequenLly seL up hls own LlLle as agalnsL Lhe buyer or granLee.
Lx. A consLlLuLed 8 as hls agenL Lo sell a car and Lhe car was ln facL sold by 8. A
cannoL laLer on clalm LhaL he was Lhe owner Lo lnvalldaLe Lhe LransacLlon.
Art. 1436 - Lessee or 8a||ee Lstopped from Assert|ng 1|t|e
A lessee or a ballee ls esLopped from asserLlng LlLle Lo Lhe Lhlng leased or recelved,
as agalnsL Lhe lessor or ballor.
8oLh Lhe lessee and Lhe ballee are noL Lhe owner. 1hey merely en[oy
possesslon of Lhe properLy or Lhlng leased or loaned.
Art. 1437 - Lstoppe| |n Contracts where Cne arty |s M|s|ead
When ln a conLracL beLween Lhlrd persons concernlng lmmovable properLy, one of
Lhem ls mlsled by a person wlLh respecL Lo Lhe ownershlp or real rlghL over Lhe real
esLaLe, Lhe laLLer ls precluded from asserLlng hls legal LlLle or lnLeresL Lhereln,
provlded all Lhese requlslLes are presenL:
(1) 1here musL be fraudulenL represenLaLlon or wrongful concealmenL of facLs
known Lo Lhe parLy esLopped,
(2) 1he parLy precluded musL lnLend LhaL Lhe oLher should acL upon Lhe facLs as
mlsrepresenLed,
(3) 1he parLy mlsled musL have been unaware of Lhe Lrue facLs, and
(4) 1he parLy defrauded musL have acLed ln accordance wlLh Lhe mlsrepresenLaLlon.
Lx. A leased Lhe aparLmenL of 8. Sald conLracL of lease gave A preferenLlal
rlghL Lo buy Lhe aparLmenL ln case 8 decldes Lo sell.

100
A approaches x and mlsrepresenLed LhaL Lhe former has already exerclsed
hls preferenLlal rlghL Lo buy and LhaL anoLher person, ?, ls lnLeresLed ln
buylng alLhough ln facL Lhere ls none. A proposes a scheme where x wlll
purchase sald aparLmenL from A and Lhen sell Lhe same Lo ? for a hlgher
prlce. 8ecause A ls a greaL broker, x agrees Lo purchase. 8, Lhe owner
raLlfled Lhe sale.
LaLer on, A cannoL asserL a clalm on Lhe properLy conLendlng LhaL Lhe sale
ls unenforceable for noL havlng Lhe consenL of Lhe Lrue owner, 8.
Art. 1438 - Lstoppe| where ersona| roperty |s |edged
Cne who has allowed anoLher Lo assume apparenL ownershlp of personal properLy
for Lhe purpose of maklng any Lransfer of lL, cannoL, lf he recelved Lhe sum for
whlch a pledge has been consLlLuLed, seL up hls own LlLle Lo defeaL Lhe pledge of
Lhe properLy, made by Lhe oLher Lo a pledgee who recelved Lhe same ln good falLh
and for value.
Lx. owns a 8MW buL does noL wanL Lo be known as Lhe owner. Pe Lells
everybody LhaL x ls Lhe owner and even glves x auLhorlLy Lo sell,
encumber, or allenaLe sald 8MW. x knows Lhls and goes along.
LaLer, lnsLrucLs x Lo pledge Lhe 8MW as collaLeral for a loan from ?. 1he
money goes Lo . Cn due daLe, ? warned x of foreclosure ln case of non
paymenL. cannoL reslsL Lhe foreclosure by clalmlng LhaL Lhe pledge of Lhe
8MW ls lnvalld because x ls noL Lhe acLual owner. ls esLopped.
Art. 1439 - 8etween art|es and Successors |n Interest
LsLoppel ls effecLlve only as beLween Lhe parLles LhereLo or Lhelr successors ln
lnLeresL.
LsLoppel does noL operaLe ln favour nor agalnsL a sLranger (persons who
are nelLher parLles noL prlvles Lo Lhe LransacLlon ouL of whlch Lhe esLoppel
arose).
costtlllo v. cA - 1he SC dld noL permlL Lhe helrs Lo assall Lhe valldlLy of
esLoppel because lL ls only Lhe person agalnsL whom lL may be lnvoked
who ls allowed Lo assall lL.

1|t|e V - 1kUS1S
WhaL ls a 1rusL?
1rusL ln lLs Lechnlcal legal sense, lL ls Lhe rlghL enforceable solely ln equlLy,
Lo Lhe beneflclal en[oymenL of properLy, Lhe legal LlLle of whlch ls vesLed ln
anoLher.
lL ls a flduclary relaLlonshlp wlLh respecL Lo properLy, sub[ecLlng Lhe person
holdlng lL Lo deal wlLh Lhe properLy for Lhe beneflL of anoLher
CharacLerlsLlc of a 1rusL:
1. llduclary
2. CreaLed by law or agreemenL
3. Where Lhe legal LlLle ls held by one, Lhe equlLable LlLle or beneflclal LlLle ls
held by anoLher
klnds of 1rusL:
1kUS1
LkkLSS IMLILD
lnLenLlon ls expressly presenL, Lhe
lnLenL ls creaLed by Lhe dlrecL and
poslLlve acLs of Lhe parLles, some
wrlLlng or deed or wlll or words
evldenclng Lhe lnLenLlon Lo creaLe a
LrusL.
no form ls requlred for Lhe words.
1rusLs over lmmovable properLy
cannoL be proved by oral evldence.

ltesctlptloo.
Gk: 1he LrusLee cannoL acqulre Lhe
Lhlng ln LrusL by prescrlpLlon
LkC:
1. 1he LrusLee has performed
unequlvocal acLs of repudlaLlon
2. Such acLs were made known Lo Lhe
beneflclary
3. 1he evldence Lhereon us clear and
concluslve
lnLenLlon ls noL expressly presenL,
buL lL ls deduclble from Lhe naLure
of Lhe LransacLlon (tesoltloq ttost),
Lhe law may also lnduce Lhe lnLenL
ln Lhe LransacLlon and Lhus, Lhls
klnd of LrusL works by operaLlon of
law (coosttoctlve ttost).
May be barred by laches.
May be proved by oral evldence.

2 kloJs.
1. kesu|t|ng 1rust:
o lnLenL ls ptesomeJ Lo be
conLemplaLed by Lhe parLles.
o lmprescrlpLlble, as long as Lhe
LrusLee has noL repudlaLed Lhe
LrusL.
2. Construct|ve trust:
o no lnLenLlon presumed from
any of Lhe acLs of Lhe parLles,

101

Acceptooce of 1tost
A. 1rustee: noL necessary, unless Lhe
appolnLmenL of such LrusLee ls
maLerlal and ls provlded ln Lhe
lnsLrumenL consLlLuLlng Lhe LrusL. lo
cose Lhe LrusLee refuses Lo accepL,
Lhe courL wlll appolnL a LrusLee

8. 8enef|c|ary: lL ls necessary. Such
accepLance wlll be ptesomeJ ln
cases where Lhe LrusL lmposes no
onerous condlLlon Lo Lhe
beneflclary.

buL ls a mere consLrucLlon of
epolty.
o rescrlpLlon may supervene.
o SubsLanLlally an approprlaLe
remedy agalnsL un[usL
enrlchmenL.

Lxamples of lmplled LrusL ln Lhe
provlslons below are noL excluslve.
Also, even lf a LrusL Lakes Lhe form
of any of Lhe provlslons under
lmplled LrusL, lL wlll be consldered
an express LrusL lf Lhere ls express
lnLenLlon of Lhe LrusLor Lo creaLe a
LrusL.

Art. 1440 - 1rustor, 1rustee and 8enef|c|ary
A person who esLabllshes a LrusL ls called Lhe LrusLor, one ln whom confldence ls
reposed as regards properLy for Lhe beneflL of anoLher person ls known as Lhe
LrusLee, and Lhe person for whose beneflL Lhe LrusL has been creaLed ls referred Lo
as Lhe beneflclary.
1rustor - person who esLabllshes a LrusL
1rustee - person ln whom confldence ls reposed for Lhe beneflL of anoLher
person
8enef|c|ary - person for whose beneflL Lhe LrusL has been creaLed. Also
called cestol poe ttost
Art. 1441 - k|nds of 1rusts
1rusLs are elLher express or lmplled. Lxpress LrusLs are creaLed by Lhe lnLenLlon of
Lhe LrusLor or of Lhe parLles. lmplled LrusLs come lnLo belng by operaLlon of law.

klnds of 1rusL:
1. Lxpress 1rust - Lhose whlch are creaLed by Lhe dlrecL and poslLlve acLs of
Lhe parLles, by some wrlLlng or deed, or wlll, or by words elLher expressly
or lmplledly evlnclng an lnLenLlon Lo creaLe a LrusL.
2. Imp||ed 1rust - Lhose whlch, wlLhouL belng expressed, are deduclble from
Lhe naLure of Lhe LransacLlon as maLLers of lnLenL, or whlch are
superlnduced on Lhe LransacLlon by operaLlon of law as maLLers of equlLy,
lndependenLly of Lhe parLlcular lnLenLlon Lo creaLe a LrusL, Lwo klnds:
a. kesu|t|ng 1rust - a LrusL ralsed by lmpllcaLlon of law and
presumed always Lo have been conLemplaLed by Lhe parLles, Lhe
lnLenLlon as Lo whlch ls Lo be found ln Lhe naLure of Lhelr
LransacLlon, buL noL expressed ln Lhe deed or lnsLrumenL of
conveyance.
o Slmply, lL ls lmposed by law Lo carry ouL Lhe acLual or
presumed lnLenL of Lhe parLles, where Lhe express LrusL
falls.
o ArLlcles 1448 - 1433 are 8esulLlng LrusLs.
b. Construct|ve 1rust - LrusLs arlslng from Lhe consLrucLlon of law, or
arlslng by operaLlon of law. lL ls esLabllshed by law, regardless of
lnLenLlon of parLles, ln order Lo prevenL fraud, oppresslon or
un[usL enrlchmenL.
8ules on rescrlpLlon of Lxpress 1rusL:
Lxpress LrusLs do noL prescrlbe because possesslon of LrusLee ls noL
adverse. 1hus:
o A LrusLee cannoL acqulre by prescrlpLlon Lhe ownershlp of
properLy enLrusLed Lo hlm
o 1here ls no prescrlpLlon on an acLlon Lo compel a LrusLee Lo
convey properLy reglsLered ln hls name ln LrusL for Lhe beneflL of
Lhe beneflclary
o no prescrlpLlon ln an acLlon Lo recover properLy held by a person
ln LrusL for Lhe beneflL of anoLher
o roperLy held ln LrusL can be recovered by Lhe beneflclary
regardless of Lhe laps of Llme
Powever, acqulslLlve prescrlpLlon may bar Lhe acLlon of Lhe beneflclary
agalnsL Lhe LrusLee ln an express LrusL for Lhe recovery of Lhe properLy held
ln LrusL where:
o 1he LrusLee has performed unequlvocal acLs of repudlaLlon
amounLlng Lo an ousLer of Lhe beneflclary

102
o Such poslLlve acLs of repudlaLlon have been made known Lo Lhe
beneflclary
o 1he evldence Lhereon ls clear and concluslve
8ules on rescrlpLlon of lmplled 1rusL:
lor kesu|t|ng 1rust, lmprescrlpLlblllLy may apply as long as Lhe LrusLee has
noL repudlaLed Lhe LrusL.
Construct|ve 1rust prescrlbes.
1he enforcemenL of boLh may, however, be barred by laches.
Art. 1442 - App||cat|on of the r|nc|p|es of the Genera| Law of 1rusts
1he prlnclples of Lhe general law of LrusLs, lnsofar as Lhey are noL ln confllcL wlLh
Lhls Code, Lhe Code of Commerce, Lhe 8ules of CourL and speclal laws are hereby
adopLed.
Chapter 2: Lxpress 1rusts
Art. 1443 - Immovab|e Cannot be roven by aro| Lv|dence
no express LrusLs concernlng an lmmovable or any lnLeresL Lhereln may be proved
by parol evldence.
arole evldence refers Lo otol evlJeoce
loscool v. Meoeses - 1o prove an express LrusL over lmmovable properLles
or any lnLeresL Lhereln, Lhere musL be a showlng of some documenL
provlng Lhe same.
komos v. komos - A LrusL may be proven by clear, saLlsfacLory, and
convlnclng evldence.
Art. 1444 - No Words kequ|red
no parLlcular words are requlred for Lhe creaLlon of an express LrusL, lL belng
sufflclenL LhaL a LrusL ls clearly lnLended.
cooycooq v. cooycooq - no form ls requlred, for as long as Lhe lnLenL Lo
esLabllsh LrusL ls very clear from Lhe proofs, wheLher by some wrlLlng or
deed or wlll or by words.

Art. 144S - When 1rustee Dec||nes Des|gnat|on
no LrusL shall fall because Lhe LrusLee appolnLed decllnes Lhe deslgnaLlon, unless
Lhe conLrary should appear ln Lhe lnsLrumenL consLlLuLlng Lhe LrusL.
ln case of refusal Lo accepL Lhe LrusL by Lhe LrusLee, Lhe courL wlll appolnL a
LrusLee.
lf Lhe appolnLmenL of Lhe LrusLee ls a maLerlal provlslon, Lhe LrusLor can
provlde LhaL a refusal of Lhe LrusLee Lo accepL Lhe LrusL shall resulL ln Lhe
fallure or nulllflcaLlon of Lhe same.
Art. 1446 - Acceptance by the 8enef|c|ary
AccepLance by Lhe beneflclary ls necessary. neverLheless, lf Lhe LrusL lmposes no
onerous condlLlon upon Lhe beneflclary, hls accepLance shall be presumed, lf Lhere
ls no proof Lo Lhe conLrary.
lf Lhere ls no onerous condlLlon, Lhe law presumes accepLance unless
Lhere ls proof Lo Lhe conLrary.
o 1hus, when Lhe beneflclary ls requlred Lo perform someLhlng Lo
make Lhe LrusL effecLlve, Lhere ls an onerous condlLlon.
8eneflclary needs Lo accepL.
o lf Lhere ls no such condlLlon, Lhe LrusL ls a llberallLy or graLulLy
and accepLance ls presumed.
! 1hls presumpLlon ls rebuLLable by proof Lo Lhe conLrary.
Chapter 3: Imp||ed 1rusts
Art. 1447 - App||cat|on of Imp||ed 1rusts Lnumerated
1he enumeraLlon of Lhe followlng cases of lmplled LrusL does noL exclude oLhers
esLabllshed by Lhe general law of LrusL, buL Lhe llmlLaLlon lald down ln ArLlcle 1442
shall be appllcable.
1he slLuaLlons glvlng rlse Lo lmplled LrusL provlded under Lhls chapLer are
noL excluslve.
Lven lf Lhe slLuaLlon falls under any of Lhe provlslons of Lhls chapLer, lL wlll
be consldered an express LrusL lf Lhere ls an express lnLenLlon of Lhe
LrusLor Lo creaLe a LrusL.
An lmplled LrusL ls noL creaLed when Lhe purpose ls Lo evade Lhe law.

103
o 5oltlqo v. cA - LrusL wlll noL be creaLed when for Lhe purpose of
evadlng Lhe law prohlblLlng one from Laklng real properLy, he
Lakes conveyance Lhereof ln Lhe name of a 3
rd
person.
1he prlnclples of general law of LrusL, ln so far as Lhey are noL conLrary Lo
Lhe Clvll Code, Code of Commerce, 8ules of CourL, and speclal laws are
appllcable as llmlLaLlons Lo lmplled LrusL.
o lollcotplo v. cA - an lmplled LrusL ls creaLed when a
represenLaLlve ls Lasked Lo negoLlaLe Lhe sale of an aparLmenL on
behalf of Lhe LenanLs. When such represenLaLlve buys Lhe
aparLmenL for hlmself Lo Lhe deLrlmenL of Lhe LenanLs, Lhe
lmplled LrusL ls breached.
Art. 1448 - When a 1h|rd arty ays for a roperty
1here ls an lmplled LrusL when properLy ls sold, and Lhe legal esLaLe ls granLed Lo
one parLy buL Lhe prlce ls pald by anoLher for Lhe purpose of havlng Lhe beneflclal
lnLeresL of Lhe properLy. 1he former ls Lhe LrusLee, whlle Lhe laLLer ls Lhe
beneflclary. Powever, lf Lhe person Lo whom Lhe LlLle ls conveyed ls a chlld,
leglLlmaLe or llleglLlmaLe, of Lhe one paylng Lhe prlce of Lhe sale, no LrusL ls lmplled
by law, lL belng dlspuLably presumed LhaL Lhere ls a glfL ln favor of Lhe chlld.
Lx. A sold hls share of sLock Lo 8. Whlle lL ls ln Lhe name of 8, lL ls x who pays
for Lhe sLocks such LhaL x ls Lhe one who recelves Lhe dlvldends. 1here ls
an lmplled LrusL, 8 ls Lhe LrusLee and x ls Lhe beneflclary.
lf 8 ls Lhe leglLlmaLe or llleglLlmaLe chlld of x, no LrusL ls lmplled by law, lL
belng dlspuLably presumed LhaL a glfL has been made Lo 8 by x.
Art. 1449 - When a Donat|on |s Made but Donee has art|a| Interest
1here ls also an lmplled LrusL when a donaLlon ls made Lo a person buL lL appears
LhaL alLhough Lhe legal esLaLe ls LransmlLLed Lo Lhe donee, he neverLheless ls elLher
Lo have no beneflclal lnLeresL or only a parL Lhereof.
Lx. A donaLed Lo 8 a loL and Lhe aparLmenL on lL. uesplLe Lhls, 8 sLlll has Lo pay
renLals Lo for Lhe aparLmenL Lo A. 1hls ls an lmplled LrusL where Lhe LrusLee
ls Lhe donee and Lhe beneflclary ls Lhe donor.
Art. 14S0 - When a erson Acqu|res roperty through a Loan
lf Lhe prlce of a sale of properLy ls loaned or pald by one person for Lhe beneflL of
anoLher and Lhe conveyance ls made Lo Lhe lender or payor Lo secure Lhe paymenL
of Lhe debL, a LrusL arlses by operaLlon of law ln favor of Lhe person Lo whom Lhe
money ls loaned or for whom lLs ls pald. 1he laLLer may redeem Lhe properLy and
compel a conveyance Lhereof Lo hlm.
Lx. A wanLs Lo buy land from 8 buL A has no money. So A asks C Lo pay for Lhe
land. 1he land ls Lhen glven ln C's name. 1hls ls supposed Lo be C's securlLy
unLll Lhe debL of A ls pald. Pere, an lmplled LrusL ls creaLed. C ls a LrusLee
and Lhe beneflclary ls A. When A has Lhe money, he may redeem Lhe
properLy from C and compel a conveyance Lo A
nC1L: 1hls ls noL Lhe same as morLgage. MorLgage ls when A borrows money
from C and A laLer buys land ln hls own name. A Lhen execuLes a morLgage
on Lhe land ln favor of C. 1hls ls noL an lmplled LrusL.
Art. 14S1 - When Land asses by Success|on
When land passes by successlon Lo any person and he causes Lhe legal LlLle Lo be
puL ln Lhe name of anoLher, a LrusL ls esLabllshed by lmpllcaLlon of law for Lhe
beneflL of Lhe Lrue owner.
Lx. 8 ls Lhe only compulsory helr of M who dles. AfLer paymenL of Lhe debLs of
M, Lhe neL esLaLe wlll go Lo 8. Powever, lf 8 causes Lhe LlLle Lo Lhe esLaLe Lo
be placed ln Lhe name of x, an lmplled LrusL ls creaLed for Lhe beneflL of 8.
Art. 14S2 - When Lega| 1|t|e |s Named after Cne of Many urchasers
lf Lwo or more persons agree Lo purchase properLy and by common consenL Lhe
legal LlLle ls Laken ln Lhe name of one of Lhem for Lhe beneflL of all, a LrusL ls creaLed
by force of law ln favor of Lhe oLhers ln proporLlon Lo Lhe lnLeresL of each.
Lx. A, 8 and C are co-owners of a parLlcular land wlLh a clubhouse ln equal
parLs buL, by agreemenL of all of Lhem, Lhe whole of Lhe properLy ls
reglsLered under Lhe name only of C. ln Lhls case, C ls Lhe LrusLee of Lhe
respecLlve 1/3 shares of A and 8. C ls Lhe LrusLee for Lhe oLher co-owners.
1hus when Lhe clubhouse ls renLed, C ls obllged Lo make proper accounLlng
for proflL sharlng as he ls merely a LrusLee.
Art. 14S3 - When roperty |s Conveyed to no|d or 1ransfer
When properLy ls conveyed Lo a person ln rellance upon hls declared lnLenLlon Lo
hold lL for, or Lransfer lL Lo anoLher or Lhe granLor, Lhere ls an lmplled LrusL ln favor
of Lhe person whose beneflL ls conLemplaLed.

104
Lx. A Lold 8 (Lhe seller) LhaL Lhe properLy should be ln hls (A) name because he
shall only hold lL for Lhe beneflL of x, Lhe real owner. An lmplled LrusL ls
creaLed ln favour of x.
Art. 14S4 - When roperty |s Conveyed to Iu|f||| an Cb||gat|on
lf an absoluLe conveyance of properLy ls made ln order Lo secure Lhe performance
of an obllgaLlon of Lhe granLor Loward Lhe granLee, a LrusL by vlrLue of law ls
esLabllshed. lf Lhe fulflllmenL of Lhe obllgaLlon ls offered by Lhe granLor when lL
becomes due, he may demand Lhe reconveyance of Lhe properLy Lo hlm.
Lx. A ls lndebLed Lo 8. A conveyed a parLlcular properLy Lo 8 Lo secure such
lndebLedness. 8 holds Lhe properLy only ln LrusL for A. 8 ls Lhe LrusLee.
upon paymenL by A, he can demand LhaL Lhe properLy be reLurned.
Art. 14SS - When 1rust Iund |s Used to urchase roperty
When any LrusLee, guardlan or oLher person holdlng a flduclary relaLlonshlp uses
LrusL funds for Lhe purchase of properLy and causes Lhe conveyance Lo be made Lo
hlm or Lo a Lhlrd person, a LrusL ls esLabllshed by operaLlon of law ln favor of Lhe
person Lo whom Lhe funds belong.
Lx. x creaLed a LrusL fund for Lhe beneflL of A of whlch, ? ls Lhe LrusLee. lf ?
uses Lhe fund Lo purchase a properLy and places lL under hls name or
under Lhe name of Z (a Lhlrd person), an lmplled LrusL ls creaLed and Lhe
LrusLee ls elLher x or Z and Lhe LrusL ls ln favor of Z.
nC1L: AcqulslLlon by an agenL lnures Lo Lhe beneflL of Lhe prlnclpal. 5evetloo v.
5evetloo
Art. 14S6 - When roperty |s Acqu|red through M|stake or Iraud
lf properLy ls acqulred Lhrough mlsLake or fraud, Lhe person obLalnlng lL ls, by force
of law, consldered a LrusLee of an lmplled LrusL for Lhe beneflL of Lhe person from
whom Lhe properLy comes.
Lx. x fraudulenLly made ? slgn an alleged loan agreemenL whlch acLually
Lurned ouL Lo be an absoluLe sale of x's properLy. 1he sale ls voldable and a
LrusL ls deemed creaLed by force of law. 1he LrusLee ls x and ls merely
holdlng Lhe properLy for Lhe beneflL of x.
nC1L: 1hls refers Lo mlsLake by a Lhlrd person and fraud ls exLra-conLracLual
Art. 14S7 - May be roved by Cra| Lv|dence
An lmplled LrusL may be proved by oral evldence.
8ecause lL ls deduclble from Lhe naLure of Lhe LransacLlon as maLLers of
lnLenL or whlch are superlnduced on Lhe LransacLlon by operaLlon of law,
lndependenLly of Lhe parLlcular lnLenLlon of Lhe parLles.

1|t|e kVII - Lk1kA-CCN1kAC1UAL C8LIGA1ICNS

Chapter 1: uas|-Contracts
Art. 2142 - uas|-Contracts Def|ned
CerLaln lawful, volunLary and unllaLeral acLs glve rlse Lo Lhe [urldlcal relaLlon of
quasl-conLracL Lo Lhe end LhaL no one shall be un[usLly enrlched or beneflLed aL Lhe
expense of anoLher. (n)
A quasl-conLracL ls noL an lmplled conLracL.
lL ls noL properly a conLracL aL all because Lhere ls no meeLlng of mlnds.
A [urldlcal relaLlon ls creaLed by a quasl-conLracL so LhaL nobody shall
enrlch hlmself aL Lhe expense of anoLher.
Art. 2143 - Cther uas|-Contracts
1he provlslons for quasl-conLracLs ln Lhls ChapLer do noL exclude oLher quasl-
conLracLs whlch may come wlLhln Lhe purvlew of Lhe precedlng arLlcle. (n)
1hls arLlcle provldes LhaL Lhe number of quasl-conLracLs ls lndeflnlLe and
noL only conflned Lo Lhe Lwo klnds speclfled by Lhe Clvll Code ln SecLlon 1
and 2 of Lhls ChapLer.

1wo obllgaLlons LreaLed ln Lhe chapLer devoLed Lo Cuasl-conLracLs:
1. Negot|orum Gest|o - Lhe volunLary managemenL of Lhe properLy or
affalrs of anoLher wlLhouL Lhe knowledge or consenL of Lhe laLLer.
2. So|ut|o Indeb|t| - Lhe [urldlcal relaLlon whlch ls creaLed when
someLhlng ls recelved when Lhere ls no rlghL Lo demand lL and lL was
unduly dellvered Lhrough mlsLake.

103
"/L5431 ) N (/83543.-J F/9543
Art. 2144 - Negot|orum Gest|o Def|ned and Its Lxcept|ons
Whoever volunLarlly Lakes charge of Lhe agency or managemenL of Lhe buslness or
properLy of anoLher, wlLhouL any power from Lhe laLLer, ls obllged Lo conLlnue Lhe
same unLll Lhe LermlnaLlon of Lhe affalr and lLs lncldenLs, or Lo requlre Lhe person
concerned Lo subsLlLuLe hlm, lf Lhe owner ls ln a poslLlon Lo do so. 1hls [urldlcal
relaLlon does noL arlse ln elLher of Lhese lnsLances:
(1) When Lhe properLy or buslness ls noL neglecLed or abandoned,
(2) lf ln facL Lhe manager has been LaclLly auLhorlzed by Lhe owner.
ln Lhe flrsL case, Lhe provlslons of ArLlcles 1317, 1403, no. 1, and 1404 regardlng
unauLhorlzed conLracLs shall govern.
ln Lhe second case, Lhe rules on agency ln 1lLle x of Lhls 8ook shall be appllcable.
(1888a)
Negot|orum Gest|o - a quasl-conLracL whlch should noL be performed for
proflL
ClrcumsLances under whlch one may underLake Lo carry ouL a buslness
maLLer for anoLher:
1. 1hey relaLe Lo deLermlned Lhlngs or affalrs, and LhaL Lhere be no
admlnlsLraLor or represenLaLlve of Lhe owner who ls charged wlLh
Lhe managemenL Lhereof.
2. 1haL lL be forelgn Lo all ldea of express or LaclL mandaLe on Lhe
parL of Lhe owner, for lL very ofLen may happen even wlLhouL hls
knowledge.
3. 1haL Lhe acLor be lnsplred by Lhe beneflcenL ldea of averLlng
losses and damages Lo Lhe owner or Lo Lhe lnLeresLed parLy
Lhrough abandonmenL of Lhe Lhlngs LhaL belong Lo hlm or of Lhe
buslness ln whlch he may be lnLeresLed, LhaL ls, Lhe admlnlsLraLlon
ls noL for proflL.
Art. 214S - D|||gence kequ|red of an Cff|c|ous Manager
1he offlclous manager shall perform hls duLles wlLh all Lhe dlllgence of a good faLher
of a famlly, and pay Lhe damages whlch Lhrough hls faulL or negllgence may be
suffered by Lhe owner of Lhe properLy or buslness under managemenL.
1he courLs may, however, lncrease or moderaLe Lhe lndemnlLy accordlng Lo Lhe
clrcumsLances of each case. (1889a)
An offlclous manager ls ln a sense an lnLruder ln Lhe buslness or LhaL
properLy of Lhe owner.
Powever, lf hls lnLruslon ls wlLh Lhe ob[ecLlve of preservlng, managlng, and
Laklng care of Lhe properLy wlLhouL any lnLenL Lo galn, a quasl-conLracL ls
creaLed.
Crdlnary dlllgence ls requlred by law, once quasl-conLracL ls creaLed, he
cannoL escape llablllLy lf Lhe owner suffers damages due Lo negllgence or
faulL.
Art. 2146 - L|ab|||ty of Cff|c|ous Manager upon De|egat|on
lf Lhe offlclous manager delegaLes Lo anoLher person all or some of hls duLles, he
shall be llable for Lhe acLs of Lhe delegaLe, wlLhouL pre[udlce Lo Lhe dlrecL obllgaLlon
of Lhe laLLer Loward Lhe owner of Lhe buslness.
1he responslblllLy of Lwo or more offlclous managers shall be solldary, unless Lhe
managemenL was assumed Lo save Lhe Lhlng or buslness from lmmlnenL danger.
(1890a)
1he llablllLy of Lwo or more offlclous managers ls solldary, Lhe owner may
seek full paymenL of damages from anyone of Lhem.
Art. 2147 - When Cff|c|ous Manager sha|| be L|ab|e for Iortu|tous Lvent
1he offlclous manager shall be llable for any forLulLous evenL:
(1) lf he underLakes rlsky operaLlons whlch Lhe owner was noL accusLomed Lo
embark upon,
(2) lf he has preferred hls own lnLeresL Lo LhaL of Lhe owner,
(3) lf he falls Lo reLurn Lhe properLy or buslness afLer demand by Lhe owner,
(4) lf he assumed Lhe managemenL ln bad falLh. (1891a)
Art. 2148 - L|ab|||ty for Iortu|tous Lvent as to Manager's Capac|ty
LxcepL when Lhe managemenL was assumed Lo save properLy or buslness from
lmmlnenL danger, Lhe offlclous manager shall be llable for forLulLous evenLs:
(1) lf he ls manlfesLly unflL Lo carry on Lhe managemenL,
(2) lf by hls lnLervenLlon he prevenLed a more compeLenL person from Laklng up Lhe
managemenL. (n)

106
Genera| ku|e - no person shall be llable ln case of forLulLous evenL.
Lxcept|on - (1) Ak1ICLL 2147
1. I|rst case: 1he buslness ls slmply provldlng a warehouse for
dolls, Lhe offlclous manger sLored hlghly flammable maLerlals
2. Second case: same buslness, buL Lhe offlclous manager also
sLored some of hls goods ln Lhe warehouse. uurlng a flood,
he chose Lo save hls goods flrsL before LhaL of Lhe owner, Lhe
offlclous manager wlll be llable for Lhe loss
3. 1h|rd case: same buslness, buL Lhe offlclous manager dld noL
reLurn Lhe warehouse desplLe demand by owner. 1he
warehouse ls desLroyed by an earLhquake and so Lhe offlclous
manager wlll be held llable for hls acL of unduly reLalnlng
whaL ls noL hls.
4. Iourth case: same buslness, buL Lhe offlclous manager Look
over ln bad falLh such as when he does so Lo geL Lhe cllenLs of
Lhe owner for hls (offlclous manager's) own warehouslng
buslness.
(2) Ak1ICLL 2148
1. I|rst case: A farmer Lakes over a nuclear ower planL
buslness of anoLher
2. Second case: Such farmer prevenLs anoLher person who ls a
nuclear sclenLlsL from Laklng over Lhe nuclear ower planL
buslness.
o LkC to 2148: When managemenL was assumed Lo
save properLy or buslness from lmmlnenL danger
such as when Lhe farmer enLers Lhe nuclear lanL ln
order Lo averL a melLdown.

Art. 2149 - kat|f|cat|on of Cwner resu|ts to Agency
1he raLlflcaLlon of Lhe managemenL by Lhe owner of Lhe buslness produces Lhe
effecLs of an express agency, even lf Lhe buslness may noL have been successful.
(1892a)
When Lhe owner raLlfles managemenL, Lhe manager becomes Lhe agenL
and all Lhe defecLs made by Lhe laLLer are cured.

Art. 21S0 - Cff|c|ous Manager Lnt|t|ed to ke|mbursement
AlLhough Lhe offlclous managemenL may noL have been expressly raLlfled, Lhe
owner of Lhe properLy or buslness who en[oys Lhe advanLages of Lhe same shall be
llable for obllgaLlons lncurred ln hls lnLeresL, and shall relmburse Lhe offlclous
manager for Lhe necessary and useful expenses and for Lhe damages whlch Lhe
laLLer may have suffered ln Lhe performance of hls duLles.
1he same obllgaLlon shall be lncumbenL upon hlm when Lhe managemenL had for
lLs purpose Lhe prevenLlon of an lmmlnenL and manlfesL loss, alLhough no beneflL
may have been derlved. (1893)
Art. 21S1 - ke|mbursement when there |s No 8enef|t or Danger
Lven Lhough Lhe owner dld noL derlve any beneflL and Lhere has been no lmmlnenL
and manlfesL danger Lo Lhe properLy or buslness, Lhe owner ls llable as under Lhe
flrsL paragraph of Lhe precedlng arLlcle, provlded:
(1) 1he offlclous manager has acLed ln good falLh, and
(2) 1he properLy or buslness ls lnLacL, ready Lo be reLurned Lo Lhe owner. (n)
Genera| ku|e - 8elmbursemenL ls requlred when (ArL. 2130):
1. When owner ls beneflLed by offlclous managemenL of properLy or buslness
Lx. 1he manager pays Laxes on Lhe properLy so LhaL lL wlll noL be
foreclosed, owner musL relmburse paymenL made by offlclous
manager.
2. When offlclous managemenL ls made Lo prevenL loss
Lx. A ls Lhe nelghbor of 8. Cne day, 8's klLchen was on flre. A enLered
Lhe house and exLlngulshed Lhe flre uslng hls (A's) flre
exLlngulsher. 8 ls obllged Lo relmburse A for Lhe flre prlce of Lhe
flre exLlngulsher used.
Lxcept|on: 8eneflL or lmmlnenL danger ls noL requlred when Lhe manager
acLed ln good falLh and Lhe buslness ls lnLacL, ready Lo be reLurned Lo Lhe
owner (ArL. 2131).
Art. 21S2 -Cff|c|ous Manager as to Contracts w|th 1h|rd ersons
1he offlclous manager ls personally llable for conLracLs whlch he has enLered lnLo
wlLh Lhlrd persons, even Lhough he acLed ln Lhe name of Lhe owner, and Lhere shall
be no rlghL of acLlon beLween Lhe owner and Lhlrd persons. 1hese provlslons shall
noL apply:
(1) lf Lhe owner has expressly or LaclLly raLlfled Lhe managemenL, or

107
(2) When Lhe conLracL refers Lo Lhlngs perLalnlng Lo Lhe owner of Lhe buslness. (n)
Genera| ku|e -- Cfflclous manager ls llable for conLracLs enLered wlLh 3
rd
persons.
1hus, when Lhe manager buys a phoLocopylng machlne, he ls llable.
Lxcept|ons - (1) When Lhe owner raLlfles managemenL ln whlch case
manager becomes agenL and (2) When Lhe conLracL refers Lo Lhlngs
perLalnlng Lo Lhe buslness. 1hus, where Lhe owner ls engaged ln
phoLocopylng buslness, Lhe purchase of phoLocopylng machlne musL be
shouldered by Lhe owner.
Art. 21S4 - 1he management |s ext|ngu|shed:
(1) When Lhe owner repudlaLes lL or puLs an end LhereLo,
(2) When Lhe offlclous manager wlLhdraws from Lhe managemenL, sub[ecL Lo Lhe
provlslons of ArLlcle 2144,
(3) 8y Lhe deaLh, clvll lnLerdlcLlon, lnsanlLy or lnsolvency of Lhe owner or Lhe
offlclous manager. (n)

1. 8eoeJlcto v. 8ootJ of AJmlolsttotots - 1he CCC may noL lawfully
lnLervene and parLlclpaLe ln Lhe managemenL of a prlvaLe mass medla
where Lhe owner demands Lhe reLurn of Lhe same.
2. 1he offlclous manager can wlLhdraw from Lhe properLy only afLer
subsLlLuLlon, oLherwlse he may only wlLhdraw upon LermlnaLlon of Lhe
affalr and lLs lncldenLs pursuanL Lo ArLlcle 2144.
3. ueaLh, clvll lnLerdlcLlon, lnsanlLy or lnsolvency lncapaclLaLes Lhe offlclous
manager or owner.
"/L5431 : N "36-543 &12/7454
Art. 21S4 - So|ut|o Indeb|t| Def|ned
lf someLhlng ls recelved when Lhere ls no rlghL Lo demand lL, and lL was unduly
dellvered Lhrough mlsLake, Lhe obllgaLlon Lo reLurn lL arlses. (1893)
kequ|s|tes (N-M):
o 1haL he who pald was not under ob||gat|on Lo do so
o 1haL paymenL was made by reason of an essenLlal m|stake of fact
rlnclples of equlLy cannoL be applled lf Lhere ls a provlslon of law
speclflcally appllcable Lo a case.
rescrlpLlve perlod ls 6 years.
Art. 21SS - App||cab|e to Doubtfu| or D|ff|cu|t uest|on of Law
aymenL by reason of a mlsLake ln Lhe consLrucLlon or appllcaLlon of a doubLful or
dlfflculL quesLlon of law may come wlLhln Lhe scope of Lhe precedlng arLlcle. (n)
Geneara| ku|e - 5olotlo loJebltl lnvolves only a mlsLake of facL
Lxcept|on - A mlsLake of law ls allowed lf Lhe mlsLake ls broughL abouL by
Lhe consLrucLlon or appllcaLlon of a doubLful or dlfflculL quesLlon of law
loyot v. Moollo - 1here ls solotlo loJebltl when Lax ls pald by mlsLake due
Lo compllcaLed correlaLlon and appllcaLlon of varlous munlclpal and
naLlonal laws. volunLarlness ls lncompaLlble wlLh proLesL and mlsLake.
Art. 21S6 - Doubt on whether the Debt was Due
lf Lhe payer was ln doubL wheLher Lhe debL was due, he may recover lf he proves
LhaL lL was noL due. (n)
Lx. A debLor can recover whaL he has pald prlor Lo Lhe due daLe provlded LhaL
Lhe demand for relmbursemenL ls noL made afLer Lhe debL has become
due.
Art. 21S7 - So||dary kespons|b|||ty of 1wo or More ayees
1he responslblllLy of Lwo or more payees, when Lhere has been paymenL of whaL ls
noL due, ls solldary. (n)
Lx. A owes 8 and C 2,000 who are solldary credlLors. A pays 8 2,000 before
due daLe. A can recover from 8 or C Lhe amounL he has pald (even lf C has
noL yeL recelved hls share of Lhe 2,000) provlded demand ls made before
debL becomes due.
Art. 21S8 - roperty or Money De||vered 8e|ongs to 1h|rd erson
When Lhe properLy dellvered or money pald belongs Lo a Lhlrd person, Lhe payee
shall comply wlLh Lhe provlslons of arLlcle 1984. (n)
Art. 21S9 - Acceptance of Undue ayment |n 8ad Ia|th

108
Whoever ln bad falLh accepLs an undue paymenL, shall pay legal lnLeresL lf a sum of
money ls lnvolved, or shall be llable for frulLs recelved or whlch should have been
recelved lf Lhe Lhlng produces frulLs.
Pe shall furLhermore be answerable for any loss or lmpalrmenL of Lhe Lhlng from
any cause, and for damages Lo Lhe person who dellvered Lhe Lhlng, unLll lL ls
recovered. (1896a)
Lx. lf Lhe credlLor knows LhaL paymenL ls noL yeL due, yeL he accepLed such
wlLhouL lnformlng Lhe debLor LhaL lL ls noL yeL due, he ls Lherefore ln bad
falLh and shall be llable for lnLeresL from Lhe Llme he accepLs paymenL up
Lo Lhe Llme he reLurns lL upon demand of Lhe debLor.
Art. 2160 - Acceptance of Undue ayment |n Good Ia|th
Pe who ln good falLh accepLs an undue paymenL of a Lhlng cerLaln and deLermlnaLe
shall only be responslble for Lhe lmpalrmenL or loss of Lhe same or lLs accessorles
and accesslons lnsofar as he has Lhereby been beneflLed. lf he has allenaLed lL, he
shall reLurn Lhe prlce or asslgn Lhe acLlon Lo collecL Lhe sum. (1897)
Lx. A ls obllged Lo glve 8 a house on uec. 1. 8ellevlng lL was due on !uly, A
dellvered Lhe house. 8 llkewlse dld noL know LhaL Lhe house ls only due on
uec. 1 and accepLed lL. Cn SepL., Lhe house was renLed buL Lhe klLchen was
accldenLly burned. Cn nov., A dlscovered LhaL Lhe dellvery was noL yeL due
and demandable for lLs reLurn. 8 can reLurn Lhe house and pay Lhe amounL
of Lhe klLchen whlch has been lmpalred, because 8 has been beneflLed by
Lhe house when lL had been renLed.

Art. 2161 - ke|mbursement for Improvements and Lxpenses
As regards Lhe relmbursemenL for lmprovemenLs and expenses lncurred by hlm
who unduly recelved Lhe Lhlng, Lhe provlslons of 1lLle v of 8ook ll shall govern.
(1898)
Art. 2162 - Lxempt|on from Cb||gat|on to kestore
Pe shall be exempL from Lhe obllgaLlon Lo resLore who, bellevlng ln good falLh LhaL
Lhe paymenL was belng made of a leglLlmaLe and subslsLlng clalm, desLroyed Lhe
documenL, or allowed Lhe acLlon Lo prescrlbe, or gave up Lhe pledges, or cancelled
Lhe guaranLles for hls rlghL. Pe who pald unduly may proceed only agalnsL Lhe Lrue
debLor or Lhe guaranLors wlLh regard Lo whom Lhe acLlon ls sLlll effecLlve. (1899)
Lx. A ls lndebLed Lo 8 ln Lhe amounL of 1,000. lL ls an oral conLracL whlch
prescrlbes ln 6 years. x ls Lhe guaranLor of Lhe loan and ls llable Lo pay Lhe
1,000 only when 8 has exhausLed all means Lo collecL from A.
8ellevlng LhaL he ls prlnclpally llable, x pays on Lhe 3
Lh
year and 8 accepLs
Lhe paymenL ln good falLh. AfLer Lhe lapse of Lhe 6 year prescrlpLlve perlod,
x may noL recover from 8 whaL he has pald by mlsLake. lnsLead, x can only
recover from A Lhe 1,000 who was Lhe orlglnal debLor.
Art. 2163 - resumed M|stake
lL ls presumed LhaL Lhere was a mlsLake ln Lhe paymenL lf someLhlng whlch had
never been due or had already been pald was dellvered, buL he from whom Lhe
reLurn ls clalmed may prove LhaL Lhe dellvery was made ouL of llberallLy or for any
oLher [usL cause. (1901)
Lx. 1he person Lo whom Lhe paymenL has been made can show LhaL such
paymenL ls a glfL or a donaLlon by showlng Lhe proper evldence llke a valld
deed of donaLlon.
"/L5431 = N '5</. Q-094+$315.0L59
Art. 2164 - Support G|ven by a Stranger
When, wlLhouL Lhe knowledge of Lhe person obllged Lo glve supporL, lL ls glven by a
sLranger, Lhe laLLer shall have a rlghL Lo clalm Lhe same from Lhe former, unless lL
appears LhaL he gave lL ouL of pleLy and wlLhouL lnLenLlon of belng repald. (1894a)
1hls ls under ArLlcle 206 of Lhe lamlly Code:
When, wlLhouL Lhe knowledge of Lhe person obllged Lo glve supporL, lL ls
glven by a sLranger, Lhe laLLer shall have a rlghL Lo clalm Lhe same from Lhe
former, unless lL appears LhaL he gave lL wlLhouL Lhe lnLenLlon of belng
relmbursed.
ue MotcolJo v. keJfeto - lor one Lo recover under Lhls, lL musL be alleged
and proved LhaL:
1. SupporL has been furnlshed a dependenL of one bound Lo glve
supporL buL who falls Lo do so
2. 1he supporL was supplled by a sLranger
3. 1he supporL was glven wlLhouL Lhe knowledge of Lhe person
charged wlLh Lhe duLy

109
Art. 216S - Iunera| Lxpenses 8orne by a 1h|rd erson
When funeral expenses are borne by a Lhlrd person, wlLhouL Lhe knowledge of
Lhose relaLlves who were obllged Lo glve supporL Lo Lhe deceased, sald relaLlves
shall relmburse Lhe Lhlrd person, should Lhe laLLer clalm relmbursemenL. (1894a)
1he followlng are obllged Lo supporL each oLher:
1. Spouses
2. LeglLlmaLe ascendanLs and descendanLs
3. arenLs and Lhelr leglLlmaLe chlldren, and Lhe leglLlmaLe and llleglLlmaLe
chlldren of Lhe laLLer
4. arenLs and Lhelr llleglLlmaLe chlldren, and Lhe leglLlmaLe and llleglLlmaLe
chlldren of Lhe laLLer
3. LeglLlmaLe broLhers and slsLers, wheLher full or half blood
Whenever Lwo or more persons are obllged Lo glve supporL, Lhe llablllLy shall
devolve upon Lhe followlng persons ln Lhe followlng order:
1. Spouses
2. uescendanLs ln Lhe nearesL degree
3. AscendanLs ln Lhe nearesL degree
4. 8roLhers and slsLers
Lx. A was Lhe son of x and ?. A dled. Z shouldered Lhe cosL of Lhe funeral. lf Z dld
Lhls as an acL of charlLy, x and ? need noL relmburse hlm. CLherwlse, Z can
demand paymenL from x and ?.
Art. 2166 - Support G|ven to an Crphan, Insane or Ind|gent erson
When Lhe person obllged Lo supporL an orphan, or an lnsane or oLher lndlgenL
person un[usLly refuses Lo glve supporL Lo Lhe laLLer, any Lhlrd person may furnlsh
supporL Lo Lhe needy lndlvldual, wlLh rlghL of relmbursemenL from Lhe person
obllged Lo glve supporL. 1he provlslons of Lhls arLlcle apply when Lhe faLher or
moLher of a chlld under elghLeen years of age un[usLly refuses Lo supporL hlm.
1hls has been adopLed by ArLlcle 207 of Lhe lamlly Code:
When Lhe person obllged Lo supporL anoLher un[usLly refuses or falls Lo
glve supporL when urgenLly needed by Lhe laLLer, any Lhlrd person may
furnlsh supporL of Lhe needy lndlvldual wlLh a rlghL of relmbursemenL from
Lhe person obllged Lo glve supporL. 1hls arLlcle shall apply parLlcularly
when Lhe faLher or Lhe moLher of a chlld under Lhe age of ma[orlLy un[usLly
refuses Lo supporL or falls Lo glve supporL Lo Lhe chlld when urgenLly
needed.
Art. 2167 - Serv|ces G|ven by a hys|c|an |n an Acc|dent
When Lhrough an accldenL or oLher cause a person ls ln[ured or becomes serlously
lll, and he ls LreaLed or helped whlle he ls noL ln a condlLlon Lo glve consenL Lo a
conLracL, he shall be llable Lo pay for Lhe servlces of Lhe physlclan or oLher person
aldlng hlm, unless Lhe servlce has been rendered ouL of pure generoslLy.
Lx. x was a vlcLlm of a hlL-and-run lncldenL and ls serlously ln[ured. Pe ls
broughL Lo Lhe hosplLal and needs operaLlon. Powever he ls ln a coma and
cannoL glve consenL. ur. Pouse neverLheless LreaLs hls ln[urles lesL lL
becomes more serlous. When x recovers, he has Lhe obllgaLlon Lo pay ur.
Pouse unless Lhe laLLer does noL wanL Lo be pald.
Art. 2168 - roperty |s Saved from I|re, I|ood, Storm or Ca|am|ty
When durlng a flre, flood, sLorm, or oLher calamlLy, properLy ls saved from
desLrucLlon by anoLher person wlLhouL Lhe knowledge of Lhe owner, Lhe laLLer ls
bound Lo pay Lhe former [usL compensaLlon.
Lx. uurlng Cndoy, 1he vlllage where x's house ls locaLed began floodlng. x was
abroad durlng Lhe Lyphoon. When Lhe flood reached x's house, ? pushed
Lhe car of Lhe former Lo hlgher grounds such LhaL lL was saved from
desLrucLlon. x ls bound Lo pay ? [usL compensaLlon unless ? does noL
wasn'L Lo accepL lL.
Art. 2169 - Government Work regard|ng nea|th and Safety kegu|at|ons
When Lhe governmenL, upon Lhe fallure of any person Lo comply wlLh healLh or
safeLy regulaLlons concernlng properLy, underLakes Lo do Lhe necessary work, even
over hls ob[ecLlon, he shall be llable Lo pay Lhe expenses.
Lx. An ordlnance requlres resldenLs Lo segregaLe Lrash lnLo recyclable and
non-recyclable. Mr. x refuses Lo comply wlLh Lhls ordlnance and Lhrows all
hls Lrash ln one plasLlc bag. 1he clLy governmenL may segregaLe hls Lrash
and provlde hlm wlLh Lwo Lrash cans aL hls own expense.


110
Art. 2170 - ku|es of Co-Cwnersh|p |n Acc|dent or Iortu|tous Lvent
When by accldenL or oLher forLulLous evenL, movables separaLely perLalnlng Lo Lwo
or more persons are commlngled or confused, Lhe rules on co-ownershlp shall be
appllcable.
Lx. 8roLhers x and ? each boughL a black 32Cb lpad3. upon reachlng Lhelr
home and afLer openlng Lhe boxes, a magnlLude 8.7 earLhquake hlL Lhelr
locallLy. Lucklly boLh of Lhem survlved buL Lhelr home was compleLely
desLroyed. ln Lhe rubble, Lhey found Lwo lpad3's buL noL knowlng whlch
belongs Lo whom, Lhe rules on co-ownershlp wlll apply.
Art. 2171 - I|nder of Lost roperty
1he rlghLs and obllgaLlons of Lhe flnder of losL personal properLy shall be governed
by ArLlcles 719 and 720.
Art|c|e 719. Whoever flnds a movable, whlch ls noL Lreasure, musL reLurn lL Lo lLs
prevlous possessor.
Art|c|e 720. lf Lhe owner should appear ln Llme, he shall be obllged Lo pay as reward
Lo Lhe flnder, 1/10 of Lhe sum or of Lhe prlce of Lhe Lhlng found.

Art. 2172 - k|ght to ke|mbursement of ossessor |n Good Ia|th
1he rlghL of every possessor ln good falLh Lo relmbursemenL for necessary and
useful expenses ls governed by ArLlcle 346.
Art. 2173 - 1h|rd erson ay|ng a Debt
When a Lhlrd person, wlLhouL Lhe knowledge of Lhe debLor, pays Lhe debL, Lhe
rlghLs of Lhe former are governed by ArLlcles 1236 and 1237.
Art|c|e 1236. 1he credlLor ls noL bound Lo accepL paymenL or performance by a
Lhlrd person who has no lnLeresL ln Lhe fulfllmenL of Lhe obllgaLlon, unless Lhere ls a
sLlpulaLlon Lo Lhe conLrary. Whoever pays for anoLher may demand from Lhe debLor
whaL he has pald, excepL LhaL lf he pald wlLhouL Lhe knowledge or agalnsL Lhe wlll of
Lhe debLor, he can recover only lnsofar as Lhe paymenL has been beneflclal Lo Lhe
debLor.
Art|c|e 1237. Whoever pays on behalf of Lhe debLor wlLhouL Lhe knowledge or
agalnsL Lhe wlll of Lhe laLLer cannoL compel Lhe credlLor Lo subrogaLe hlm ln hls
rlghLs, such as Lhose arlslng from a morLgage, guaranLy or penalLy.
Art. 2174 - Measures for rotect|on Aga|nst Law|essness
When ln a small communlLy a naLlonallLy of Lhe lnhablLanLs of age declde upon a
measure for proLecLlon agalnsL lawlessness, flre, flood, sLorm or oLher calamlLy, any
one who ob[ecLs Lo Lhe plan and refuses Lo conLrlbuLe Lo Lhe expenses buL ls
beneflLed by Lhe pro[ecL as execuLed shall be llable Lo pay hls share of sald
expenses.
Lx. eople of 8arrlo x declded Lo engage ln a securlLy force Lo proLecL Lhelr
communlLy. lor Lhls reason, Lhe people of x agreed Lo conLrlbuLe for Lhe
expenses of Lhls securlLy force. Mr. k however refused Lo make any
conLrlbuLlon. ln Lhe evenL Lhe securlLy force apprehends robbers lnLendlng
Lo rob Lhe house of Mr. k, he should pay hls share ln Lhe expenses for Lhe
communlLy's engagemenL of Lhe securlLy force Lo proLecL Lhe people.
Art. 217S - erson ay|ng for 1axes of Another
Any person who ls consLralned Lo pay Lhe Laxes of anoLher shall be enLlLled Lo
relmbursemenL from Lhe laLLer.
Lx. x who pays Lhe real esLaLe Laxes of C (whose land wlll be forfelLed lf he
falls Lo pay Laxes) musL be relmbursed by Lhe laLLer.


111
CCDAL MLMCk AID

1I1LL. IV. - kLSCkI1ICN
ArL. 1106 - rescrlpLlon ueflned
ArL. 1107 - AcqulslLlon by Capable ersons and Mlnors
ArL. 1108 - ersons LxempL from rescrlpLlon
ArL. 1109 - 8eLween Pusband and Wlfe, Chlldren and Cuardlan
ArL. 1110 - Marrled Woman
ArL. 1111 - Co-roprleLor or Co-owner
ArL. 1112 - 8enunclaLlon
ArL. 1113 - Sub[ecLs of rescrlpLlon
ArL. 1114 - 8lghL Lo Lnforce rescrlpLlon
ArL. 1113 - Speclal Laws
ArL. 1116 - 1ranslLlon
Chapter 2: rescr|pt|on of Cwnersh|p and Cther kea| k|ghts
ArL. 1117 - AcqulslLlve rescrlpLlon
ArL. 1118 - ossesslon
ArL. 1119 - ossesslon Lhrough Llcense or 1olerance
ArL. 1120 - lnLerrupLlon
ArL. 1121 - naLural lnLerrupLlon
ArL. 1122 - Cne ?ear or Less
ArL. 1123 - Clvll lnLerrupLlon
ArL. 1124 - !udlclal Summons
ArL. 1123 - ossessor's 8ecognlLlon of Cwner's 8lghL
ArL. 1126 - 1lLles
ArL. 1127 - Cood lalLh
ArL. 1128 - CLher CondlLlons of Cood lalLh
ArL. 1129 - !usL 1lLle
ArL. 1130 - 1rue and valld 1lLle
ArL. 1131 - !usL 1lLle MusL 8e roved
ArL. 1132 - AcqulslLlon of Movables or ersonal roperLy
ArL. 1133 - Movables from Crlme
ArL. 1134 - AcqulslLlon of lmmovables
ArL. 1133 - MlsLake ln Area
ArL. 1136 - WarLlme
ArL. 1137 - LxLraordlnary rescrlpLlon of lmmovables
ArL. 1138 - CompuLaLlon of rescrlpLlon

Chapter 3: rescr|pt|on of Act|ons
ArL. 1139 - Lapse of 1lme
ArL. 1140 - rescrlpLlon of Movables
ArL. 1141 - rescrlpLlon of lmmovables
ArL. 1142 - rescrlpLlon of MorLgages
ArL. 1143 - 8lghLs noL LxLlngulshed by rescrlpLlon
ArL. 1144 - 10 ?ears
ArL. 1143 - 6 ?ears
ArL. 1146 - 4 ?ears
ArL. 1147 - 1 ?ear
ArL. 1148 - Code of Commerce and Speclal Laws
ArL. 1149 - no llxed erlod = 3 ?ears
ArL. 1130 - rescrlpLlon for All klnds of AcLlons
ArL. 1131 - rescrlpLlon for AcLlons regardlng aymenL
ArL. 1132 - rescrlpLlon of AcLlons declared by !udgmenL
ArL. 1133 - rescrlpLlon for AccounLlng
ArL. 1134 - lorLulLous LvenL
ArL. 1133 - lnLerrupLlon of rescrlpLlon for AcLlons

1I1LL. I. - C8LIGA1ICNS
ArL. 1136 - ueflnlLlon
ArL. 1137 - Sources of CbllgaLlons
ArL. 1138 - CbllgaLlons from Law
ArL. 1139 - CbllgaLlons from ConLracLs
ArL. 1160 - CbllgaLlons from Cuasl ConLracLs
ArL. 1161 - CbllgaLlons from Crlmes or uellcLs
ArL. 1162 - CbllgaLlons from Cuasl-dellcLs
Chapter 2: Nature and Lffect of Cb||gat|ons
ArL. 1163 - 8equlred ulllgence
ArL. 1164 - 8lghL Cver lrulLs
ArL. 1163 - uellvery of a ueLermlnaLe or lndeLermlnaLe 1hlng
ArL. 1166 - Accessorles
ArL. 1167 - CbllgaLlon 1o uo
ArL. 1168 - CbllgaLlon noL 1o uo
ArL. 1169 - uelay
ArL. 1170 - Sources of LlablllLles
ArL. 1171 - 8esponslblllLy from lraud
ArL. 1172 - 8esponslblllLy from negllgence
ArL. 1173 - laulL or negllgence
ArL. 1174 - lorLulLous LvenLs

112
ArL. 1173 - usurlous 1ransacLlons
ArL. 1176 - resumpLlon ln aymenL
ArL. 1177 - 8lghLs of Lhe CredlLor
ArL. 1178 - 1ransmlsslblllLy
Chapter 3: D|fferent k|nds of Cb||gat|ons
5c1lON 1. - lote ooJ cooJltloool Obllqotloos
ArL. 1179 - ure CbllgaLlons
ArL. 1180 - aymenL uepends on uebLor's Means
ArL. 1181 - CondlLlonal CbllgaLlons
ArL. 1182 - oLesLaLlve and Casual CondlLlons
ArL. 1183 - vold CondlLlons
ArL. 1184 - oslLlve CondlLlon
ArL. 1183 - negaLlve CondlLlon
ArL. 1186 - ConsLrucLlve lulflllmenL
ArL. 1187 - 8eLroacLlve LffecLs of Lhe lulflllmenL of a Suspenslve
CondlLlon
ArL. 1188 - 8lghLs endlng lulflllmenL of Suspenslve CondlLlon
ArL. 1189 - Loss, ueLerloraLlon or lmprovemenL endlng Lhe
CondlLlon
ArL. 1190 - LffecLs of lulflllmenL of 8esoluLory CondlLlon
ArL. 1191 - 8emedles ln 8eclprocal CbllgaLlons
ArL. 1192 - 8reach by 8oLh arLles
5c1lON 2. - Obllqotloos wltb o letloJ
ArL. 1193 - CbllgaLlons wlLh a erlod
ArL. 1194 - Loss, ueLerloraLlon or lmprovemenL before uay
CerLaln
ArL. 1193 - uebLor May 8ecover aymenL
ArL. 1196 - erlod 8eneflLs 8oLh CredlLor and uebLor
ArL. 1197 - CourL May llx a erlod
ArL. 1198 - When uebLor CannoL Make use of Lhe erlod
SLC1lCn 3. - AlLernaLlve CbllgaLlons
ArL. 1199 - AlLernaLlve CbllgaLlons
ArL. 1200 - uebLor's 8lghL of Cholce
ArL. 1201 - Cholce CommunlcaLed
ArL. 1202 - Cnly Cne Cholce ls racLlcable
ArL. 1203 - uebLor CannoL Choose due Lo CredlLor's AcLs
ArL. 1204 - 1hrough uebLor's laulL, All Cholces are LosL
ArL. 1203 - Cholce Clven Lo CredlLor
ArL. 1206 - laculLaLlve CbllgaLlons
5c1lON 4. - Iolot ooJ 5ollJoty Obllqotloos
ArL. 1207 - Solldary CbllgaLlons
ArL. 1208 - !olnL CbllgaLlons
ArL. 1209 - When ulvlslon ls lmposslble
ArL. 1210 - lndlvlslblllLy and SolldarlLy
ArL. 1211 - noL 8ound ln Lhe Same Manner
ArL. 1212 - AcLs of Solldary CredlLors
ArL. 1213 - MuLual 1rusL among Solldary CredlLors
ArL. 1214 - !udlclal or LxLra[udlclal uemand by a Solldary CredlLor
ArL. 1213 - LxLlngulshmenL by a Solldary CredlLor
ArL. 1216 - 8lghLs of CredlLor AgalnsL Solldary uebLors
ArL. 1217 - aymenL by Solldary uebLors
ArL. 1218 - When aymenL has rescrlbed or become lllegal
ArL. 1219 - 8emlsslon of a Solldary uebLor's LlablllLy
ArL. 1220 - 8emlsslon of Lhe Whole CbllgaLlon
ArL. 1221 - Loss or lmposslblllLy of resLaLlon ln 8elaLlon Lo
Solldary uebLors
ArL. 1222 - Solldary uebLor's uefenses
5c1lON 5. - ulvlslble ooJ loJlvlslble Obllqotloos
ArL. 1223 - naLure and LffecL of ulvlslble and lndlvlslble
CbllgaLlons
ArL. 1224 - LlablllLles ln !olnL lndlvlslble CbllgaLlons
ArL. 1223 - ulvlslble and lndlvlslble CbllgaLlons
5c1lON 6. - Obllqotloos wltb o leool cloose
ArL. 1226 - enalLles
ArL. 1227 - enalLy and lulflllmenL
ArL. 1228 - roof ls noL necessary
ArL. 1229 - CourL lnLervenLlon
ArL. 1230 - nulllLy of Lhe enal Clause
Chapter 4: Lxt|ngu|shment of Cb||gat|ons
CNkAl lkOvl5lON5
ArL. 1231 - Modes of LxLlngulshmenL
5c1lON 1. - loymeot ot letfotmooce
ArL. 1232 - aymenL ueflned
ArL. 1233 - aymenL musL be CompleLe
ArL. 1234 - SubsLanLlal erformance
ArL. 1233 - CredlLor AccepLs lncompleLeness or lrregularlLy
ArL. 1236 - aymenL by a 1hlrd erson
ArL. 1237 - no SubrogaLlon
ArL. 1238 - uonaLlon
ArL. 1239 - aymenL by an lncapaclLaLed erson

113
ArL. 1240 - 1o Whom aymenL Should be Made
ArL. 1241 - aymenL Lo lncapaclLaLed or 1hlrd ersons
ArL. 1242 - aymenL Lo ossessor of CredlL
ArL. 1243 - !udlclal Crder Lo 8eLaln Lhe uebL
ArL. 1244 - CredlLor CannoL be Compelled Lo 8ecelve a ulfferenL 1hlng
ArL. 1243 - uaLlon ln aymenL
ArL. 1246 - uellvery of a Cenerlc 1hlng
ArL. 1247 - LxLra[udlclal Lxpenses
ArL. 1248 - arLlal 8ecelpL and aymenL
ArL. 1249 - Currency
ArL. 1230 - lnflaLlon or ueflaLlon
ArL. 1231 - lace of aymenL
5u85c1lON 1. - Appllcotloo of loymeots
ArL. 1232 - AppllcaLlon of aymenLs
ArL. 1233 - lnLeresL
ArL. 1234 - MosL Cnerous uebL
5u85c1lON 2. - loymeot by cessloo
ArL. 1233 - Cesslon
5u85c1lON J. - 1eoJet of loymeot ooJ cooslqootloo
ArL. 1236 - 1ender of aymenL and ConslgnmenL
ArL. 1237 - AnnouncemenL
ArL. 1238 - ConslgnaLlon rocess
ArL. 1239 - Lxpenses 8orne by Lhe CredlLor
ArL. 1260 - !udlclal ueclaraLlon
ArL. 1261 - CredlLor AuLhorlzes uebLor Lo WlLhdraw
5c1lON 2. - loss of tbe 1bloq uoe
ArL. 1262 - Loss
ArL. 1263 - Loss of a Cenerlc 1hlng
ArL. 1264 - arLlal Loss
ArL. 1263 - Loss of 1hlng ln Lhe ossesslon of Lhe uebLor
ArL. 1266 - Legal or hyslcal lmposslblllLy
ArL. 1267 - ulfflculL 8eyond ConLemplaLlon
ArL. 1268 - roceeds from a Crlmlnal Cffense
ArL. 1269 - CredlLor's 8lghL of AcLlon
5c1lON J. - cooJoootloo ot kemlssloo of tbe uebt
ArL. 1270 - CondonaLlon ueflned
ArL. 1271 - uellvery of a CredlL Lo Lhe uebLor
ArL. 1272 - resumpLlon when CredlL ls ln Lhe ossesslon of Lhe
uebLor
ArL. 1273 - LxLlngulshmenL of Accessory CbllgaLlons
ArL. 1274 - Accessory CbllgaLlon of ledge
5c1lON 4. - coofosloo ot Metqet of klqbts
ArL. 1273 - When CbllgaLlon ls LxLlngulshed
ArL. 1276 - LffecL on CuaranLors
ArL. 1277 - Confuslon ln !olnL CbllgaLlons
5c1lON 5. - compeosotloo
ArL. 1278 - CompensaLlon ueflned
ArL. 1279 - 8equlslLes of CompensaLlon
ArL. 1280 - SeL-up by CuaranLor
ArL. 1281 - 1oLal or arLlal CompensaLlon
ArL. 1282 - uebLs noL uue
ArL. 1283 - Clalm for uamages
ArL. 1284 - voldable uebLs
ArL. 1283 - AsslgnmenL of Lhe CredlLor's 8lghLs Lo a 1hlrd erson
ArL. 1286 - ulfferenL laces
ArL. 1287 - no CompensaLlon
ArL. 1288 - Clvll LlablllLy
ArL. 1289 - Several uebLs
ArL. 1290 - 8y CperaLlon of Law
5c1lON 6. - Novotloo
ArL. 1291 - klnds of novaLlon
ArL. 1292 - Lxpress and lmplled novaLlon
ArL. 1293 - SubsLlLuLlng a new uebLor
ArL. 1294 - lnsolvency of Lhe new uebLor ln Lxpromlslon
ArL. 1293 - lnsolvency of Lhe new uebLor ln uelegaclon
ArL. 1296 - LffecL on Accessory CbllgaLlons
ArL. 1297 - new CbllgaLlon ls vold
ArL. 1298 - Crlglnal CbllgaLlon was vold
ArL. 1299 - Sub[ecL Lo a Suspenslve or 8esoluLory CondlLlon
ArL. 1300 - Legal or ConvenLlonal SubrogaLlon
ArL. 1301 - ConvenLlonal SubrogaLlon
ArL. 1302 - When Legal SubrogaLlon ls resumed
ArL. 1303 - 8lghLs 1ransferred upon SubrogaLlon
ArL. 1304 - arLlal aymenL and reference
1|t|e II - CCN1kAC1S
ArL. 1303 - ConLracLs ueflned
ArL. 1306 - CuaranLee of lreedom Lo ConLracL
ArL. 1307 - lnnomlnaLe ConLracLs
ArL. 1308 - MuLuallLy of ConLracLs

114
ArL. 1309 - ueLermlnaLlon of erformance by a 1hlrd erson
ArL. 1310 - When ueLermlnaLlon ls lnequlLable
ArL. 1311 - SLlpulaLlon our ALrul
ArL. 1312 - ConLracLs CreaLlng 8eal 8lghLs 8lnd 1hlrd ersons
ArL. 1313 - 8lghL of CredlLors Lo lmpugn lraudulenL ConLracLs
ArL. 1314 - LlablllLy of 1hlrd ersons 8esponslble for 8reach of ConLracL
ArL. 1313 - erfecLlon of ConLracLs and lmplled 1erms
ArL. 1316 - 8eal ConLracLs are erfecLed upon uellvery
ArL. 1317 - unauLhorlzed ConLracLs are unenforceable
Chapter 2: Lssent|a| kequ|s|tes of Contracts
Ceoetol ltovlsloos
ArL. 1318 - LlemenLs of a ConLracL
5ectloo 1 - cooseot
ArL. 1319 - ConsenL ueflned
ArL. 1320 - AccepLance
ArL. 1321 - Cfferer llxes Manner, 1lme and lace of AccepLance
ArL. 1322 - CommunlcaLlon of AccepLance Lo AgenL
ArL. 1323 - When Cffer 8ecomes lneffecLlve
ArL. 1324 - ConLracL of CpLlon, CpLlon erlod, CpLlon Money
ArL. 1323 - 8uslness AdverLlsemenLs
ArL. 1326 - AdverLlsemenLs for 8ldders
ArL. 1327 - ersons who CannoL Clve ConsenL
ArL. 1328 - Lucld lnLervals, urunkenness, PypnoLlc Spell
ArL. 1329 - lncapaclLy Sub[ecL Lo ModlflcaLlons
ArL. 1330 - CharacLerlsLlcs of ConsenL
ArL. 1331 - MlsLake or Lrror
ArL. 1332 - 8urden of roof ln case of lraud or MlsLake
ArL. 1333 - knowledge of 8lsk
ArL. 1334 - MlsLake of Law May vlLlaLe ConsenL
ArL. 1333 - vlolence or lorce
ArL. 1336 - vlolence or lnLlmldaLlon by a 1hlrd erson
ArL. 1337 - undue lnfluence
ArL. 1338 - Causal lraud
ArL. 1339 - lraud by ConcealmenL
ArL. 1340 - usual LxaggeraLlons ln 1rade
ArL. 1341 - LxperL Cplnlon
ArL. 1342 - lraud by a 1hlrd erson
ArL. 1343 - MlsrepresenLaLlon Made ln Cood lalLh
ArL. 1344 - Causal lraud may make a ConLracL voldable
ArL. 1343 - SlmulaLlon of a ConLracL
ArL. 1346 - AbsoluLe and 8elaLlve SlmulaLlon of ConLracLs
5ectloo 2 - Object of coottocts
ArL. 1347 - Cb[ecL of a ConLracL
ArL. 1348 - lmposslble 1hlngs or Servlces
ArL. 1349 - CuanLlLy need noL be ueLermlnaLe
5ectloo J - coose of coottocts
ArL. 1330 - Cause ueflned
ArL. 1331 - MoLlve ueflned
ArL. 1332 - Absence of Cause
ArL. 1333 - lalse Cause
ArL. 1334 - Cause resumed Lo LxlsL and Lawful
ArL. 1333 - Leslon ueflned
Chapter 3: Iorm of Contracts
ArL. 1336 - lorm of ConLracLs
ArL. 1337 - lorm for Lhe Convenlence of Lhe arLles
ArL. 1338 - ConLracLs Whlch MusL Appear ln a ubllc uocumenL
Chapter 4: keformat|on of Instruments
ArL. 1339 - 8eformaLlon
ArL. 1360 - rlnclples of Lhe Ceneral Law on 8eformaLlon
ArL. 1361 - MuLual MlsLake as 8asls of 8eformaLlon
ArL. 1362 -MlsLaken, lraud and lnequlLable ConducL
ArL. 1363 - ConcealmenL of MlsLake by Lhe CLher arLy
ArL. 1364 -lgnorance, eLc. on Lhe arL of 1hlrd erson
ArL. 1363 - MorLgage or ledge SLaLed as a Sale
ArL. 1366 -Cases when 8eformaLlon noL Allowed
ArL. 1367 - arLy who 8roughL AcLlon Lo Lnforce CannoL 8eform
ArL. 1368 - arLy LnLlLled Lo 8eformaLlon
ArL. 1369 - rocedure for 8eformaLlon
Chapter S: Interpretat|on of Contracts
ArL. 1370 - lnLerpreLaLlon of ConLracLs ueflned
ArL. 1371 - ConLemporaneous and SubsequenL AcLs ueLermlne lnLenL
ArL. 1372 - Speclal lnLenL revalls Cver Ceneral lnLenL
ArL. 1373 - lnLerpreLaLlon of SLlpulaLlon wlLh Several Meanlngs
ArL. 1374 - lnLerpreLaLlon of varlous SLlpulaLlons
ArL. 1373 - lnLerpreLaLlon of Words wlLh ulfferenL SlgnlflcaLlons
ArL. 1376 - usage or CusLom as Ald ln lnLerpreLaLlon
ArL. 1377 - lnLerpreLaLlon of Cbscure Words
ArL. 1378 - 8ules ln Case uoubLs are lmposslble Lo SeLLle
ArL. 1379 - 8ules of CourL Appllcable
Chapter 6: kesc|ss|b|e Contracts

113
ArL. 1380 - 8esclsslble ConLracLs ueflned
ArL. 1381 - Cases of 8esclsslble ConLracLs
ArL. 1382 - aymenLs Made ln SLaLe of lnsolvency
ArL. 1383 - naLure of AcLlon for 8esclsslon
ArL. 1384 - LxLenL of 8esclsslon
ArL. 1383 - 8esclsslon CreaLes CbllgaLlon of MuLual 8esLlLuLlon
ArL. 1386 - ConLracLs Approved by Lhe CourLs
ArL. 1387 - When AllenaLlon resumed ln lraud of CredlLors
ArL. 1388 - LlablllLy of urchaser ln 8ad lalLh
ArL. 1389 - erlod for llllng AcLlon for 8esclsslon
Chapter 7: Vo|dab|e Contracts
ArL. 1390 - voldable ConLracLs ueflned
ArL. 1391 - erlod for llllng AcLlon for AnnulmenL
ArL. 1392 - LffecL of 8aLlflcaLlon
ArL. 1393 - lorms of 8aLlflcaLlon
ArL. 1394 - Who May 8aLlfy
ArL. 1393 - ConformlLy of CullLy arLy Lo 8aLlflcaLlon noL 8equlred
ArL. 1396 - 8eLroacLlve LffecL of 8aLlflcaLlon
ArL. 1397 - arLy LnLlLled Lo 8rlng an AcLlon Lo Annul
ArL. 1398 - uuLy of MuLual 8esLlLuLlon upon AnnulmenL
ArL. 1399 - 8esLlLuLlon by an lncapaclLaLed erson
ArL. 1400 - LffecL of Loss of 1hlng Lo be 8eLurned
ArL. 1401 - LxLlngulshmenL of AcLlon for AnnulmenL
ArL. 1402 - LffecL where a arLy CannoL 8esLore Cb[ecL
Chapter 8: Unenforceab|e Contracts
ArL. 1403 - unenforceable ConLracLs ueflned
ArL. 1404 - 8ules Covernlng unauLhorlzed ConLracLs
ArL. 1403 - Modes of 8aLlflcaLlon under SLaLuLes of lraud
ArL. 1406 - 8lghL of a arLy where ConLracL Lnforceable
ArL. 1407 - When uneforceable ConLracL becomes voldable
ArL. 1408 - 8lghL of 1hlrd ersons Lo Assall an unforceable ConLracL
Chapter 9: Vo|d and Inex|stent Contracts
ArL. 1409 - vold ConLracLs ueflned
ArL. 1410 - AcLlon or uefense ls lmprescrlpLlble
ArL. 1411 - 8ules where ConLracL ls lllegal and AcL ls Crlmlnal Cffense
ArL. 1412 - 8ules where ConLracL ls lllegal buL AcL ls noL Crlmlnal Cffense
ArL. 1413 - 8ecovery of usurlous lnLeresL
ArL. 1414 - 8ecovery where ConLracL LnLered lnLo for lllegal urpose
ArL. 1413 - 8ecovery by an lncapaclLaLed erson
ArL. 1416 - 8ecovery where ConLracL ls noL lllegal per se
ArL. 1417 - 8ecovery of AmounL ald ln Lxcess of Celllng rlce
ArL. 1418 - 8ecovery of AddlLlonal CompensaLlon
ArL. 1419 - 8ecovery of AmounL of Wage Less Lhan Mlnlmum llxed
ArL. 1420 - LffecL of lllegallLy where ConLracL ls lndlvlslble/ulvlslble
ArL. 1421 - ersons LnLlLled Lo 8alse uefense of lllegallLy or nulllLy
ArL. 1422 - vold ConLracL CannoL be novaLed

1|t|e III - NA1UkAL C8LIGA1ICNS
ArL. 1423 - ConcepL of naLural CbllgaLlons
ArL. 1424 - erformance AfLer Clvll CbllgaLlon has rescrlbed
ArL. 1423 - 8elmbursemenL of 1hlrd erson for rescrlbed uebL
ArL. 1426 - 8esLlLuLlon by Mlnor AfLer AnnulmenL of ConLracL
ArL. 1427 - uellvery by Mlnor of Money or lunglble 1hlng
ArL. 1428 - erformance AfLer AcLlon Lo Lnforce Clvll CbllgaLlon lalled
ArL. 1429 - aymenL by Pelr of uebL Lxceedlng value of roperLy lnherlLed
ArL. 1430 - aymenL of Legacy AfLer Wlll has been ueclared vold

1|t|e IV - LS1CLL
ArL. 1431 - LsLoppel ueflned
ArL. 1432 - AppllcaLlon of LsLoppel
ArL. 1433 - klnds of LsLoppel
ArL. 1434 - Sale by erson noL Lhe Cwner
ArL. 1433 - Sale by a erson 8epresenLlng AnoLher
ArL. 1436 - Lessee or 8allee LsLopped from AsserLlng 1lLle
ArL. 1437 - LsLoppel ln ConLracLs where Cne arLy ls Mlslead
ArL. 1438 - LsLoppel where ersonal roperLy ls ledged
ArL. 1439 - 8eLween arLles and Successors ln lnLeresL

1|t|e V - 1kUS1S
ArL. 1440 - 1rusLor, 1rusLee and 8eneflclary
ArL. 1441 - lorms of 1rusLs
ArL. 1442 - AppllcaLlon of Lhe rlnclples of Lhe Ceneral Law of 1rusLs
Chapter 2: Lxpress 1rusts
ArL. 1443 - lmmovable CannoL be roven by arol Lvldence
ArL. 1444 - no Words 8equlred
ArL. 1443 - When 1rusLee uecllnes ueslgnaLlon
ArL. 1446 - AccepLance by Lhe 8eneflclary
Chapter 3: Imp||ed 1rusts
ArL. 1447 - AppllcaLlon of lmplled 1rusLs LnumeraLed

116
ArL. 1448 - When a 1hlrd arLy ays for a roperLy
ArL. 1449 - When a uonaLlon ls Made buL uonee has arLlal lnLeresL
ArL. 1430 - When a erson Acqulres roperLy Lhrough a Loan
ArL. 1431 - When Land asses by Successlon
ArL. 1432 - When Legal 1lLle ls named afLer Cne of Many urchasers
ArL. 1433 - When roperLy ls Conveyed Lo Pold or 1ransfer
ArL. 1434 - When roperLy ls Conveyed Lo lulflll an CbllgaLlon
ArL. 1433 - When 1rusL lund ls used Lo urchase roperLy
ArL. 1436 - When roperLy ls Acqulred Lhrough MlsLake or lraud
ArL. 1437 - May be roved by Cral Lvldence

1|t|e kVII - Lk1kA-CCN1kAC1UAL C8LIGA1ICNS
Chapter 1: uas|-Contracts
ArL. 2142 - Cuasl-ConLracLs ueflned
ArL. 2143 - CLher Cuasl-ConLracLs
5ectloo 1 - Neqotlotom Cestlo
ArL. 2144 - negoLlorum CesLlo ueflned and lLs LxcepLlons
ArL. 2143 - ulllgence 8equlred of an Cfflclous Manager
ArL. 2146 - LlablllLy of Cfflclous Manager upon uelegaLlon
ArL. 2147 - When Cfflclous Manager shall be Llable for lorLulLous LvenL
ArL. 2148 - LlablllLy for lorLulLous LvenL as Lo Manager's CapaclLy
ArL. 2149 - 8aLlflcaLlon of Cwner resulLs Lo Agency
ArL. 2130 - Cfflclous Manager LnLlLled Lo 8elmbursemenL
ArL. 2131 - 8elmbursemenL when Lhere ls no 8eneflL or uanger
ArL. 2132 -Cfflclous Manager as Lo ConLracLs wlLh 1hlrd ersons
5ectloo 2 - 5olotlo loJebltl
ArL. 2134 - SoluLlo lndeblLl ueflned
ArL. 2133 - Appllcable Lo uoubLful or ulfflculL CuesLlon of Law
ArL. 2136 - uoubL on wheLher Lhe uebL was uue
ArL. 2137 - Solldary 8esponslblllLy of 1wo or More ayees
ArL. 2138 - roperLy or Money uellvered 8elongs Lo 1hlrd erson
ArL. 2139 - AccepLance of undue aymenL ln 8ad lalLh
ArL. 2160 - AccepLance of undue aymenL ln Cood lalLh
ArL. 2161 - 8elmbursemenL for lmprovemenLs and Lxpenses
ArL. 2162 - LxempLlon from CbllgaLlon Lo 8esLore
ArL. 2163 - resumed MlsLake
5ectloo J - Otbet Ooosl-coottocts
ArL. 2164 - SupporL Clven by a SLranger
ArL. 2163 - luneral Lxpenses 8orne by a 1hlrd erson
ArL. 2166 - SupporL Clven Lo an Crphan, lnsane or lndlgenL erson
ArL. 2167 - Servlces Clven by a hyslclan ln an AccldenL
ArL. 2168 - roperLy ls Saved from llre, llood, SLorm or CalamlLy
ArL. 2169 - CovernmenL Work regardlng PealLh and SafeLy 8egulaLlons
ArL. 2170 - 8ules of Co-Cwnershlp ln AccldenL or lorLulLous LvenL
ArL. 2171 - llnder of LosL roperLy
ArL. 2172 - 8lghL Lo 8elmbursemenL of ossessor ln Cood lalLh
ArL. 2173 - 1hlrd erson aylng a uebL
ArL. 2174 - Measures for roLecLlon AgalnsL Lawlessness
ArL. 2173 - erson aylng for 1axes of AnoLher

SCUkCLS
SLa. Marla, CbllgaLlons and ConLracLs (2003)
ue Leon, 1he Law on CbllgaLlons and ConLracLs (2008)
Salanga 8A, CbllgaLlons and ConLracLs 8evlewer
Clvll Law CbllgaLlons and ConLracLs 8evlewer
hLLp://legal-dlcLlonary.LhefreedlcLlonary.com/

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C8LIGA1ICNS AND CCN1kAC1S kLVILWLk A11. MLL S1A.

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