UST Golden Notes 2011 - Obligations and Contracts

!"#$%&'$!
()

!"#$%&'$!()

17S
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
&1&2,0$1) 13&$-4 LLS1L8 !A? ALAn L. lLC8LS ll
+$1, 13&$-) /!- &1&2,0$1)4 kA8Ln !C? C. SA8uCC & !CPn PLn8? C. MLnuCZA
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
+$1, 13&$-) /!- #&.!*' &(2 2,)$%(4 LA8L LCulL M. MASACA?An & 1PLLnA C. MA81lnLZ
$5 2,/$($'$!(

64 789: ;< 9= >?@;A9:;>=B

&4 lL ls a [urldlcal necesslLy Lo glve, Lo do, or noL Lo
do. !"#$% &&'() *++,

lL ls a [urldlcal relaLlon whereby a person
(credlLor) may demand from anoLher (debLor) Lhe
observance of a deLermlnaLlve conducL (glvlng,
dolng, or noL dolng), and ln case of breach, may
demand saLlsfacLlon from Lhe asseLs of Lhe laLLer.
!"#-./ 0.12/,

(>:C4 ArL. 1136 refers only Lo clvll obllgaLlons whlch
are enforceable ln courL when breached. lL does noL
cover naLural obllgaLlons !"#$/% &345&356) *++,
because Lhese are obllgaLlons LhaL cannoL be
enforced ln courL belng based merely on equlLy and
naLural law and noL on poslLlve law. !7-89:.)
;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @% 5,

$$5 ,#,0,(') !/ &( !"#$%&'$!(

64 789: 9DC :8C C@CEC=:< >F 9= >?@;A9:;>=B

&4 G&H!1
1. !A#-:-?.= 2# =9>.= $-9 - vlnculum [urls,
2. "?$-B9 /A<C9?$ - obllgee or credlLor,
3. #.//-B9 /A<C9?$ - obllgor or debLor,
4. $<C9?$ - presLaLlon, and
3. %.A/9 - efflclenL cause ls Lhe same wlLh
vlnculum [urls.

+$(1*#*0 G*-$)

64 789: ;< I;=JK@KE LKD;M ;< I;=JK@KE LKD;< C<:9?@;<8CNB

&4 8y:
1. law (-%9% - relaLlon of husband and wlfe
for supporL)
2. bllaLeral acLs (-%9% - conLracLs)
3. unllaLeral acLs (-%9% - crlmes and quasl
dellcLs)!D2=98$-82) +-B-= +2:9 E2=% FE) @%
'G) &GGG 9:,

&1'$+, )*"G,1'

64 78> ;< 9= 9J:;IC <K?LCJ:B

&4 Cne who ls demandlng Lhe performance of Lhe
obllgaLlon. lL ls he who ln hls favor Lhe obllgaLlon
ls consLlLuLed, esLabllshed or creaLed. Pe ls called
Lhe credlLor (C8) or obllgee.

H&))$+, )*"G,1'

64 78> ;< 9 O9<<;IC <K?LCJ:B

&4 Cne bound Lo perform Lhe presLaLlon Lo glve,
Lo do, or noL Lo do. Pe ls called Lhe debLor (u8) or
obllgor. !7-89:.) ;<=->.$-28/ .8: +28$#.?$/) @% 4)
4666 9:,

(>:C4 When Lhere ls a rlghL Lhere ls a correspondlng
obllgaLlon. 8lghL ls Lhe acLlve aspecL whlle obllgaLlon
ls Lhe passlve aspecL. 1hus, lL ls sald LhaL Lhe
concepLs of credlL and debL are Lwo dlsLlncL aspecLs
of unlLary concepL of obllgaLlon. !7-89:.) ;<=->.$-28/
.8: +28$#.?$/) @% 4) 4666 9:,

!"G,1'

64 789: 9DC :8C DCPK;<;:C< >F 9 I9@;N >?LCJ:B

&4 1he ob[ecL musL be:
1. llclL or lawful,
2. posslble, physlcally & [udlclally,
3. deLermlnaLe or deLermlnable, and
4. pecunlary value or posslble equlvalenL
ln money.

(>:C4 Absence of elLher of Lhe flrsL Lhree (llclL,
posslble and/or deLermlnaLe) makes Lhe ob[ecL vold.

lorm ls noL generally consldered essenLlal, Lhough
someLlmes lL ls added as Lhe 3
Lh
requlslLe.1here ls no
parLlcular form Lo make obllgaLlons blndlng, excepL
ln cerLaln rare cases. !D2=98$-82) +-B-= +2:9 2H $I9
7I-=-@@-89/) E2=% FE) 4664 9:% @% 'J,

$$$5 2$//,-,(' Q$(2) !/ H-,)'&'$!(

64 789: ;< ODC<:9:;>=B

&4 lL ls a conducL LhaL may conslsL of glvlng, dolng,
or noL dolng someLhlng.

(>:C4 lL ls Lhe conducL LhaL musL be observed by Lhe
debLor/obllgor.

+)' %!#,-( (!'-) ./00

64 789: 9DC :8C N;FFCDC=: R;=N< >F ODC<:9:;>=B
2;<:;=AK;<85

&4
174
1$+$# #&7 ',&04
&2+$),-4 A11?. LLML8 1. 8A8u?A, )*"G,1' 3,&24 ALl8LuC 8. ulMAlLLlx ll,
&))'5 )*"G,1' 3,&2)4 kA8Ln lLLlZ C. SunAu, LAM8L81C L. SAn1CS lll, 0,0",-)4 AuL LL8L81 L. AMCn, ALS1Cn AnA8nA, CZAn !.
luLLL8CS, CLClLlC M. !lMLnC, !8., lSMALL SA8AnCA?A, !8., 1!('-$"*'!-)4 LClSL 8AL C. nAvAL, MCnlCA !uCCM

!"#$%&'$!(
'! %$+,
!"#$%&'$!( '!
2!
!"#$%&'$!(
(!' '! 2!
ConslsLs ln Lhe
dellvery of a
movable or
lmmovable
Lhlng Lo Lhe
credlLor
Covers all klnds
of works or
servlces
wheLher
physlcal or
menLal
ConslsLs ln
refralnlng from
dolng some acLs
-%9% - Sale,
deposlL,
pledge,
donaLlon,
anLlchresls
-%9% - ConLracL
for professlonal
servlces llke
palnLlng,
modellng,
slnglng, eLc.
-%9% - LasemenL
prohlblLlng
bulldlng
proprleLor or
possessor from
commlLLlng
nulsance!"#$%
(K4) *++,,
resLralnlng order
or ln[uncLlon
!7-89:.)
;<=->.$-28/ .8:
+28$#.?$/) @% 5)
4666 9:,

64 789: 9DC :8C DCPK;<;:C< >F 9 I9@;N ODC<:9:;>=B

&4
1. osslble, physlcally and [urldlcally,
2. ueLermlnaLe, or aL leasL deLermlnable
accordlng Lo preesLabllshed elemenLs
or crlLerla, and
3. Pas a posslble equlvalenL ln money
!D2=98$-82) +-B-= +2:9 E2=% FE) @% 'K) &GGG
9:,%

$+5 1#&))$/$1&'$!( !/ !"#$%&'$!()

64 789: 9DC :8C R;=N< >F >?@;A9:;>=B
&4 lrom Lhe vlewpolnL of:
1. L.8?$-28
a. Clvll - glves a rlghL of acLlon Lo
compel Lhelr performance
b. naLural- noL based on poslLlve law
buL on equlLy and naLural law,
does noL granL a rlghL of acLlon Lo
enforce Lhelr performance, buL
afLer volunLary fulflllmenL by Lhe
obllgor, Lhey auLhorlze reLenLlon of
whaL has been dellvered/ rendered
by reason Lhereof.
c. Moral- cannoL be enforced by
acLlon buL are blndlng on Lhe parLy
who makes lL ln consclence and
naLural law.

2. 79#H2#1.8?9
a. oslLlve - Lo glve, Lo do
b. negaLlve - noL Lo do

3. LA<C9?$ 1.$$9#
a. ersonal - Lo do, noL Lo do
b. 8eal - Lo glve

4. ;<C9?$
a. ueLermlnaLe / speclflc -
parLlcularly deslgnaLed or
physlcally segregaLed from all
oLhers of Lhe same class.
b. Cenerlc- ls deslgnaLed merely by
lLs class or genus.
c. LlmlLed generlc- generlc ob[ecLs
conflned Lo a parLlcular class (9%>%
an obllgaLlon Lo dellver one of my
horses) !D2=98$-82) +-B-= +2:9 2H $I9
7I-=-@@-89/) E2=% FE) 4664 9:) @% G&,

3. 79#/28 2<=->9:
a. unllaLeral - only one parLy ls
bound
b. 8llaLeral - boLh parLles are bound

6. +#9.$-28
a. Legal - lmposed by law !"#$% &&'K)
*++,
b. ConvenLlonal - esLabllshed by Lhe
agreemenL of Lhe parLles llke
conLracLs

7. LA/?9@$-<-=-$M 2H @.#$-.= HA=H-==198$
a. ulvlslble N obllgaLlon ls suscepLlble
of parLlal performance
b. lndlvlslble N obllgaLlon ls noL
suscepLlble

8. OP-/$98?9 2H <A#:98 2# ?28:-$-28
a. ure N ls noL burdened wlLh any
condlLlon or Lerm. lL ls lmmedlaLely
demandable.
b. CondlLlonal - ls sub[ecL Lo a
condlLlon whlch may be suspenslve
(happenlng of whlch shall glve rlse
Lo Lhe obllgaLlon) or resoluLory
(happenlng LermlnaLes Lhe
obllgaLlon).

9. +I.#.?$9# 2H #9/@28/-<-=-$M 2# =-.<-=-$M
a. !olnL - each debLor ls llable only
for a parL of Lhe whole llablllLy and
Lo each credlLor shall belong only a
parL of Lhe correlaLlve rlghLs
b. Solldary - a debLor ls answerable
for Lhe whole of Lhe obllgaLlon
wlLhouL pre[udlce Lo hls rlghL Lo

!"#$%&'$!()

17S
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
collecL from hls codebLors Lhe
laLLer's shares ln Lhe obllgaLlon
!"#$% &46J) *++,

10. 0->I$ $2 ?I22/9 .8: /A</$-$A$-28
a. AlLernaLlve - obllgor may choose
Lo compleLely perform one ouL of
Lhe several presLaLlons!"#$% &&GG)
*++,
b. laculLaLlve - only one presLaLlon
has been agreed upon, buL Lhe
obllgor may render one ln
subsLlLuLlon of Lhe flrsL one !"#$%
&46() *++,

11. F1@2/-$-28 2H @98.=$M
a. Slmple - Lhere ls no penalLy
lmposed for vlolaLlon of Lhe Lerms
Lhereof
b. CbllgaLlon wlLh penalLy -
obllgaLlon whlch lmposes a penalLy
for vlolaLlon !"#$% &44() *++,
!7-89:.) ;<=->.$-28/ .8: +28$#.?$/)
4666 9:) @% 'J,

+5 )!*-1,) !/ !"#$%&'$!()

64 789: 9DC :8C <>KDJC< >F >?@;A9:;>=KDJC< !?@;A9:;>=< HCDFCJ:;>=
#aw 9P =9>9 lrom Lhe Llme deslgnaLed by Lhe law creaLlng or regulaLlng Lhem.
1onLracLs 9P ?28$#.?$A
%-4 lrom Lhe Llme of Lhe perfecLlon of Lhe conLracL (-%9% meeLlng of
Lhe mlnds)

SH(<4
1. When Lhe parLles made sLlpulaLlon on Lhe rlghL of Lhe credlLor
Lo Lhe frulLs of Lhe Lhlng
2. When Lhe obllgaLlon ls sub[ecL Lo a suspenslve condlLlon or
perlod, arlses upon fulflllmenL of Lhe condlLlon or explraLlon of
Lhe perlod.
6uasl
conLracLs
9P QA./-?28$#.?$A
lrom Lhe Llme deslgnaLed by Lhe law creaLlng or regulaLlng Lhem. 2ellcLs
9P 1.=9H-?-2 2# ex
dellcLo
6uasl
dellcL
9P QA./- 1.=9H-?-2 or ex
quasl dellcLo

(>:C4 1he enumeraLlon ls excluslve.

&5 !"#$%&'$!( ,S #,%,

64 789: 9DC :8C J89D9J:CD;<:;J< >F 9 @CA9@
>?@;A9:;>= >D 9= >?@;A9:;>= CT @CACB

&4
1. uoes noL need Lhe consenL of Lhe
obllgor,
2. MusL be expressly seL forLh ln Lhe law
creaLlng lL and noL merely presumed,
and
3. ln order LhaL Lhe law may be a source of
obllgaLlon, lL should be Lhe creaLor of
Lhe obllgaLlon lLself.

64 789: A>ICD=< >?@;A9:;>=< 9D;<;=A FD>E @9MB

&4 1hese obllgaLlons shall be regulaLed by Lhe
provlslons of Lhe law whlch esLabllshes Lhem. 1he
Clvll Code ls appllcable suppleLorlly.
"5 !"#$%&'$!( ,S 1!('-&1'*

64 789: 9DC :8C DCPK;<;:C< F>D 9 J>=:D9J: :> A;IC
D;<C :> >?@;A9:;>=< &' ()*+,-(+.B

&4
1. lL musL conLaln all Lhe essenLlal
requlslLes of a conLracL
4% lL musL noL be conLrary Lo law, morals,
good cusLoms, publlc order, and publlc
pollcy

64 789: ;< UJ>EO@;9=JC ;= A>>N F9;:8VB

&4 lL ls performance ln accordance wlLh Lhe
sLlpulaLlon, clauses, Lerms and condlLlons of Lhe
conLracL.

(>:C4 1he conLracL ls Lhe law" beLween Lhe parLles.

+)' %!#,-( (!'-) ./00

64 09W 9 O9D:W K=;@9:CD9@@W CI9NC 8;< >?@;A9:;>=
;= :8C J>=:D9J:B

&4
%-4nelLher parLy may unllaLerally evade hls
obllgaLlon ln Lhe conLracL.

SH(<4unllaLeral evaslon ls allowed when Lhe:
1. conLracL auLhorlzes such evaslon
2. oLher parLy assenLs LhereLo

64 $< :8CDC 9 @;E;:9:;>= >= :8C D;A8: >F :8C O9D:;C<
:> FDCC@W C=:CD ;=:> <:;OK@9:;>=ICD=< >?@;A9:;>=< 9D;<;=A FD>E
J>=:D9J:<B

&4
%-41hese obllgaLlons shall be governed
prlmarlly by Lhe sLlpulaLlons, clauses, Lerms
and condlLlons of Lhe parLles' agreemenLs.

SH(4 ConLracLs wlLh presLaLlons LhaL are
unconsclonable or unreasonable.

(>:C4 ln case of unconsclonable penalLy for
breach of conLracL !"#$% &44G) *++,, or llquldaLed
damages !"#$% 444() *++,, Lhe same may be
reduced by Lhe courL. !7-89:.) ;<=->.$-28/ .8:
+28$#.?$/) @%&5) 4666 9:,

176
1$+$# #&7 ',&04

15 !"#$%&'$!( ,S 6*&)$ 1!('-&1'*

64 789: ;< PK9<;J>=:D9J:B

&4 lL ls a [urldlcal relaLlon arlslng from =.RHA=)
B2=A8$.#M .8: A8-=.$9#.= acLs based on Lhe
prlnclple LhaL no one should un[usLly enrlch
hlmself aL Lhe expense of anoLher.

64 789: ;< ODC<KEO:;IC J>=<C=:B

&4 Slnce a quaslconLracL ls a unllaLeral conLracL
creaLed by Lhe sole acL or acLs of Lhe gesLor, Lhere
ls no express consenL glven by Lhe oLher parLy.
1he consenL needed ln a conLracL ls provlded by
law Lhrough presumpLlon. !7-89:.) ;<=->.$-28/
.8: +28$#.?$/) @% &') 4666 9:,

64 789: 9DC :8C OD;=J;O9@ F>DE< >F PK9<;
J>=:D9J:2$-2#-A1 >9/$-2 (lnofflclous
manager) - arlses when a person
volunLarlly Lakes charge of Lhe
managemenL of Lhe buslness or
properLy of anoLher wlLhouL any power
from Lhe laLLer.
2. L2=A$-2 -8:9<-$- (un[usL enrlchmenL)N
Lakes place when a person recelves
someLhlng from anoLher wlLhouL any
rlghL Lo demand for lL, and Lhe Lhlng
was unduly dellvered Lo hlm Lhrough
mlsLake.

(>:C4 1he dellvery musL noL be Lhrough llberallLy or
some oLher cause.

(,%!'$!-*0 %,)'$!

64 *O>= :8C NCJ@9D9:;>= >F E9D:;9@ DK@C ;= :8C
H8;@;OO;=C<X SX :>AC:8CD M;:8 8;< M;FC 9=N
J8;@NDC=X N;<9OOC9DCN FD>E 8;< DC<;NC=JC 9@>=A
,DE;:9X 09=;@95 .C9D< O9<<CN M;:8>K: . 8C9D;=A
FD>E S 9=N 8;< F9E;@W5 . J>=:;=KCN :9R;=A J9DC >F
SY< 8>K<CX CIC= J9K<;=A E;=>D DCO9;D< :> ?C N>=C
9: 8;< 8>K<C :> ODC<CDIC ;:5 $= Z[\]X M8C=
?K<;=C<< ?CA9= :> OCDR KO ;= :8C 9DC9X ^X
9OOD>9J8CN . 9=N OD>O><CN :89: :8CW ?K;@N
<:>DC< 9: :8C AD>K=N F@>>D >F :8C 8>K<C 9=N
J>=ICD: ;:< <CJ>=N F@>>D ;=:> 9 OC=<;>= 8>K<C5 .
9ADCCN :> ^Y< OD>O><9@ 9=N :>AC:8CD :8CW <OC=:
F>D :8C J>=<:DKJ:;>= >F <:>DC< 9: :8C AD>K=N F@>>D
9=N :8C J>=ICD<;>= >F :8C <CJ>=N F@>>D ;=:> 9
OC=<;>= 8>K<C5 78;@C J>=<:DKJ:;>= M9< A>;=A >=X
F;DC >JJKDDCN 9: 9 =C9D?W 8>K<C5 '8C 8>K<C< 9:
:8C C=:;DC ?@>JRX ;=J@KN;=A SY<X MCDC ?KD=CN5
&F:CD :8C ,2)& DCI>@K:;>= ;= /C?DK9DW Z[_]X S
9=N 8;< F9E;@W DC:KD=CN FD>E :8C *=;:CN ):9:C<
M8CDC :8CW :>>R DCFKAC ;= Z[\`5

*O>= @C9D=;=A >F M89: 89OOC=CN :> 8;< 8>K<CX S
<KCN . F>D N9E9AC<5 . O@C9NCN 9< 9 NCFC=<C :89:
8C ECDC@W :>>R J89DAC >F 8;< 8>K<C K=NCD :8C
OD;=J;O@C >F =CA>:;>DKE AC<:;>5 3C M9< =>: @;9?@C
9< :8C ?KD=;=A >F :8C 8>K<C ;< 9 F>D:K;:>K< CIC=:5

$< . @;9?@C :> S F>D N9E9AC< K=NCD :8C F>DCA>;=A
J;DJKE<:9=JCB

&4 no. ? ls noL llable for damages, because he ls a
gesLor ln 89>2$-2#A1 >9/$-2!"#$% 4&33)
*++,.lurLhermore, 8 ls noL llable Lo A for any
forLulLous evenL because he dld noL commlL any
of Lhe lnsLances provlded under ArL. 2147 of Lhe
Clvll Code:
1. Pe dld noL underLake rlsky operaLlon
whlch Lhe owner was noL accusLomed Lo
embark upon,
2. Pe has noL preferred hls own lnLeresL Lo
LhaL of Lhe owner,

!"#$%&'$!()

3. Pe has noL falled Lo reLurn Lhe properLy or
buslness afLer demand of Lhe owner, and
4. Pe has noL assumed Lhe managemenL ln
bad falLh. aZ[[b "9D 6KC<:;>=c

64 $= FC9D >F DCOD;<9@< FD>E @9M@C<< C@CEC=:<
?C<;CA;=A 8;< ?9D9=A9WX S 9?9=N>=CN 8;<
F;<8O>=NX F@CN :> 09=;@9 9=N @CF: F>D ,KD>OC5
)CCR;=A :89: :8C F;<8 ;= :8C F;<8O>=N MCDC DC9NW
F>D 89DIC<:X .X M8> ;< ;= :8C ?K<;=C<< >F
E9=9A;=A F;<8O>=N< >= 9 J>EE;<<;>= ?9<;<X :>>R
O><<C<<;>= >F :8C OD>OCD:WX 89DIC<:CN :8C F;<8
9=N <>@N :8C C=:;DC 89DIC<: :> ^5

'8CDC9F:CDX . ?>DD>MCN E>=CW FD>E 7 9=N K<CN
:8C E>=CW :> ?KW =CM <KOO@;C< >F F;<8 FDW 9=N :>
ODCO9DC :8C F;<8O>=N F>D :8C =CT: JD>O5

Z5 789: ;< :8C LKD;N;J9@ DC@9:;>= ?C:MCC=
S 9=N . NKD;=A Sd< 9?<C=JCB
`5 *O>= :8C DC:KD= >F S :> :8C ?9D9=A9WX
M89: 9DC :8C >?@;A9:;>=< >F . :> S 9<
DCA9DN< :8C J>=:D9J: M;:8 ^B
b5 *O>= Sd< DC:KD=X M89: 9DC :8C
>?@;A9:;>=< >F S 9< DCA9DN< .d< J>=:D9J:
M;:8 7B
177
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
e5 789: @CA9@ CFFCJ:< M;@@ DC<K@: ;F S
CTODC<<@W D9:;F;C< .d< E9=9ACEC=: 9=N
M89: M>K@N ?C :8C >?@;A9:;>=< >F S ;=
F9I>D >F .B

,TO@9;= 9@@ W>KD 9=<MCD<5

&4
1. 1he [urldlcal relaLlon ls LhaL of Lhe
quaslconLracL of "89>2$-2#A1 >9/$-2". ?
ls Lhe "gesLor" or "offlclous" manager"
and x ls Lhe "owner" !"#$% 4&33) *++,.
2. ? musL render an accounL of hls
operaLlons and dellver Lo x Lhe prlce he
recelved for Lhe sale of Lhe harvesLed
flsh. !"#$% 4&3') *++,.
3. x musL pay Lhe loan obLalned by ? from
W because x musL answer for
obllgaLlons conLracLed wlLh Lhlrd
persons ln Lhe lnLeresL of Lhe owner
!"#$% 4&'6) *++,.
4. Lxpress raLlflcaLlon by x provldes Lhe
effecLs of an express agency and x ls
llable Lo pay Lhe commlsslons hablLually
recelved by Lhe gesLor as manager !"#$%
4&3G) *++,. aZ[[` "9D 6KC<:;>=c

)!#*'$!( $(2,"$'$

S DCJC;ICN 8;< FK@@ DC:;DCEC=: ?C=CF;:< ;=J@KN;=A
:8><C E>=C:9DW ?C=CF;:< :89: MCDC OD>OCD@W
N;<9@@>MCN ?W 1!& :> ?C AD9=:CN :> OK?@;J
>FF;JCD<5 %)$) <>KA8: :8C DC<:>D9:;>= >F :8C <9;N
N;<9@@>MCN ?C=CF;:< ?K: :8C J>KD: DK@CN :89: <KJ8
DC<:>D9:;>= J9==>: ?C C=F>DJCN 9A9;=<: SY<
DC:;DCEC=: ?C=CF;:< 9< :8;< ;< CTODC<<@W
OD>8;?;:CN ?W @9M K=NCD -5&5 _`[Z5 $< S >?@;ACN
:> DC:KD= :8C ?C=CF;:< ;EOD>OCD@W DCJC;ICN ?W
8;E K=NCD :8C OD;=J;O@C >F /)0.+1) 1*2&31+1B

&4 ?es. lL cannoL be denled LhaL x was a reclplenL
of beneflLs LhaL were properly dlsallowed by Lhe
CCA. 1hese CCA dlsallowances would oLherwlse
have been deducLed from hls salarles. 1he CSlS
can no longer recover Lhese amounLs by any
admlnlsLraLlve means due Lo Lhe speclflc
exempLlon of reLlremenL beneflLs from CCA
dlsallowances. x resulLanLly reLalned beneflLs Lo
whlch he was noL legally enLlLled whlch, ln Lurn,
gave rlse Lo an obllgaLlon on hls parL Lo reLurn Lhe
amounLs under Lhe prlnclple of /2=A$-2 -8:9<-$-.
!SLFL B% +;") S%0% *2% &5K5K&) *2B% &6) 4663T
SLFL B% 7-89:.) 9$% .=%) S%0% *2% &3&(4') *2B% &6)
4663,%

25 !"#$%&'$!() ,S 2,#$1'!

64 789: ;< :8C ?9<;< F>D J;I;@ @;9?;@;:W 9D;<;=A FD>E
NC@;J:< 9< 9JJ>DN;=A :> :8C OC=9@ J>NCB

&4 ArL. 100 of Lhe 8evlsed enal Code provldes
LhaL: Lvery person crlmlnally llable for a felony ls
also clvllly llable.U

64 789: ;< NC@;J:B

&4 lL ls an acL or omlsslon punlshed by law.

,5 !"#$%&'$!() ,S 6*&)$ f 2,#$1'!

64 789: ;< PK9<;NC@;J: >D :>D:B

&4 lL ls an acL or omlsslon arlslng from faulL or
negllgence whlch causes damage Lo anoLher,
Lhere belng no preexlsLlng conLracLual relaLlons
beLween Lhe parLles.

64 789: 9DC :8C C@CEC=:< >F 9 PK9<;NC@;J:B

&4
1. AcL or omlsslon,
2. laulL or negllgence aLLrlbuLable Lo Lhe
person charged,
3. uamage or ln[ury,
4. ulrecL relaLlon of cause and effecL
beLween Lhe acL arlslng from
faulL/negllgence and Lhe damage or
ln[ury !@#2P-1.$9 ?.A/9,, and
3. no preexlsLlng conLracLual relaLlon
beLween Lhe parLles.

+)' %!#,-( (!'-) ./00

178
1$+$# #&7 ',&04

64 789: ;< :8C <J>OC >F J;I;@ @;9?;@;:WB

&4 --$
1. -esLlLuLlon,
2. -eparaLlon for damage caused, and
3. $ndemnlLy for consequenLlal damages.

/5 (&'*-&# !"#$%&'$!()

64 789: 9DC =9:KD9@ >?@;A9:;>=F =9:KD9@ >?@;A9:;>=<B

&4
1. erformance afLer Lhe clvll obllgaLlon
has prescrlbed,
2. 8elmbursemenL of a Lhlrd person for a
debL LhaL has prescrlbed,
3. 8esLlLuLlon by mlnor afLer annulmenL of
conLracL,
4. uellvery by mlnor of money or funglble
Lhlng ln fulflllmenL of obllgaLlon,
3. erformance afLer acLlon Lo enforce
clvll obllgaLlon has falled,
6. aymenL by helr of debL exceedlng
value of properLy lnherlLed, and
7. aymenL of legacy afLer wlll has been
declared vold.

64 2;<:;=AK;<8 =9:KD9@ FD>E J;I;@ >?@;A9:;>=5

&4
(&'*-&# !"#$%&'$!( 1$+$# !"#$%&'$!(
8ased on equlLy and
naLural law
8ased from law,
conLracLs, quasl
conLracLs, dellcLs, and
quasldellcLs
CannoL be enforced ln
courL because Lhe
obllgee has no rlghL of
acLlon Lo compel lLs
performance
Can be enforced ln courL
because Lhe obllgee has a
rlghL of acLlon
!7-89:.);<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @%
(5(,

64 09W =9:KD9@ >?@;A9:;>=< ?C J>=ICD:CN ;=:>
J;I;@ >?@;A9:;>=.$-28/ .8: +28$#.?$/) 4666 9:) @%
(53,

+$5 (&'*-, &(2 ,//,1') !/ !"#$%&'$!()

&5 !"#$%&'$!( '! %$+,

64 $= 9= >?@;A9:;>= :> NC@;ICD 9 :8;=AX M89: 9DC
:8C >?@;A9:;>=< >F :8C NC?:>DB

&4 lL depends upon Lhe klnd of obllgaLlon.

)H,1$/$1 %,(,-$1
uellver Lhe Lhlng agreed
upon !"#$% &&(') *++,
uellver Lhe Lhlng whlch ls
nelLher of superlor nor
lnferlor quallLy
1ake care of Lhe Lhlng
wlLh Lhe proper dlllgence
of a good faLher of a
famlly A8=9// Lhe law
requlres or parLles
sLlpulaLe anoLher
sLandard of care !"#$%
&&(5) *++,
Speclflc performance l.e.
dellvery of anoLher Lhlng
wlLhln Lhe same genus as
Lhe Lhlng promlsed lf
such Lhlng ls damaged
due Lo lack of care or a
general breach ls
commlLLed
uellver all accesslons,
accessorles and frulLs of
Lhe Lhlng !"#$% &&(() *++,
lf Lhe ob[ecL ls generlc,
buL Lhe source ls
speclfled or dellmlLed,
Lhe obllgaLlon ls Lo
preserve Lhe source
ay damages ln case of
breach of obllgaLlon by
reason of delay, fraud,
negllgence,
conLravenLlon of Lhe
Lenor Lhereof
ay damages ln case of
breach of obllgaLlon by
reason of delay, fraud,
negllgence,
conLravenLlon of Lhe
Lenor Lhereof !"#$% &&J6,
lorLulLous evenL
exLlngulshes Lhe
obllgaLlon
CbllgaLlon ls noL
exLlngulshed (>98A/
8A8QA.1@9#A-$ N genus
never perlshes)

!"#$%&'$!()

64 $= F9;@;=A :> NC@;ICD 9 :8;=AX M89: 9DC :8C
DCECN;C< >F :8C JDCN;:>DB

&4
179
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
)H,1$/$1 !"#$%&'$!( %,(,-$1 !"#$%&'$!(
Speclflc performance
Speclflc performance
(dellvery of any Lhlng
belonglng Lo Lhe same
specles)
8esclsslon (acLlon Lo
resclnd under ArL. 1380,
nCC)
Ask LhaL Lhe obllgaLlon
be complled wlLh aL Lhe
debLor's expense
8esoluLlon (acLlon for
cancellaLlon under ArL.
1191, nCC)
8esoluLlon 2# speclflc
performance, wlLh
damages ln elLher case
(ArL. 1191, nCC)
uamages, ln boLh cases !"#$% &&J6) *++,

(>:C4May be excluslve or ln addlLlon Lo Lhe above
menLloned remedles!7-89:.) ;<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @% 5J,

(>:C4 ln obllgaLlon Lo dellver a speclflc Lhlng, Lhe
credlLor has Lhe rlghL Lo demand preservaLlon of Lhe
Lhlng, lLs accesslons, accessorles, and Lhe frulLs. 1he
credlLor ls enLlLled Lo Lhe frulLs and lnLeresLs from
Lhe Llme Lhe obllgaLlon Lo dellver Lhe Lhlng arlse.
64 789: ;< :8C =9:KDC >F :8C D;A8: >F :8C JDCN;:>D
M;:8 DC<OCJ: :> :8C FDK;::C4 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 !"#$% &&(3) *++,.

64 2;<:;=AK;<8 OCD<>=9@ D;A8: FD>E DC9@ D;A8:5

&4
H,-)!(&# -,&#
WA/ .: #91 WA/ -8 #9
Lnforceable only agalnsL
a deflnlLe person/group
of persons
Lnforceable agalnsL Lhe
whole world
8lghL Lo demand from
anoLher, as a deflnlLe
passlve sub[ecL, Lhe
fulflllmenL of Lhe
presLaLlon Lo glve, Lo do
or noL Lo do.
8lghL over a speclflc
Lhlng, wlLhouL a deflnlLe
passlve sub[ecL agalnsL
whom Lhe rlghL may be
personally enforced.
Pas a deflnlLe passlve
sub[ecL
no deflnlLe passlve
sub[ecL

64 789: ;< :8C OD;=J;O@C >F U?9@9=J;=A >F
CPK;:;C<V 9< 9OO@;CN ;= 9J:;>=< F>D <OCJ;F;J
OCDF>DE9=JCB

&4 ln decreelng speclflc performance, equlLy
requlres noL only LhaL Lhe conLracL be [usL and
equlLable ln lLs provlslons, buL LhaL Lhe
consequences of speclflc performance, ls llkewlse
be [usL and equlLable. 1he general rule ls LhaL Lhls
equlLable rellef wlll noL be granLed lf, under Lhe
clrcumsLances of Lhe case, Lhe resulL of Lhe
speclflc performance of Lhe conLracL would be
harsh, lnequlLable, and oppresslve or resulL ln an
unconsclonable advanLage Lo Lhe plalnLlff
!">?.2-=- B% SLFL) S%0% *2% 566'() "A>% 56) &GKK,%

"5 !"#$%&'$!( '! 2! !- (!' '! 2!

64 789: 9DC :8C :WOC< >F OCD<>=9@ >?@;A9:;>==9@
>?@;A9:;>=<;:;IC OCD<>=9@ >?@;A9:;>=<
a. noL purely personal acL Lo
have obllgaLlon execuLed aL
debLor's expense plus
damages
b. purely personal acL damages
only.

(>:Cg same rule applles lf obllgaLlon ls done ln
conLravenLlon of Lhe Lerms of Lhe obllgaLlon.

2. (CA9:;IC OCD<>=9@ >?@;A9:;>= Lo have
Lhe prohlblLed Lhlng undone plus
damages. Powever, lf Lhlng cannoL be
physlcally or legally undone, only
damages may be demanded.

64 $< <OCJ;F;J OCDF>DE9=JC 9 DCECNW ;= OCD<>=9@
>?@;A9:;>=DNCDCN K=N>=CB
&4
1. lf made poorly
2. negaLlve personal obllgaLlons

+)' %!#,-( (!'-) ./00

18u
1$+$# #&7 ',&04

15 "-,&13,) !/ !"#$%&'$!()

64 789: 9DC :8C F>DE< >F ?DC9J8 >F >?@;A9:;>=<B

&4
1. E2=A8$.#M -debLor ls llable for damages
lf he ls gullLy of:
a. defaulL !12#.,
b. fraud !:2=2,
c. negllgence !?A=@.,
d. breach Lhrough conLravenLlon of
Lhe Lenor Lhereof

2. F8B2=A8$.#M N debLor ls unable Lo
perform Lhe obllgaLlon due Lo forLulLous
evenL $IA/ noL llable for damages

64 789: ;< :8C J>=JCO: >F 9 A>>N F9:8CD >F :8C
F9E;@WB

&4 1he Supreme CourL descrlbed a good faLher of
a famlly by flrsL sLaLlng who ls noL. Pe ls noL and ls
noL supposed Lo be omnlsclenL of Lhe fuLure,
raLher, he ls one who Lakes precauLlons agalnsL
any harm when Lhere ls someLhlng before hlm Lo
suggesL or warn hlm of Lhe danger or Lo foresee
lL!7-?.#$ B% L1-$I) S%0% *2% X&436() Y.#% &')
&G&K,.

Z5 1!0H#,', /&$#*-, '! H,-/!-0

64 789: 9DC :8C CFFCJ:< >F ?DC9J8 >F >?@;A9:;>=B

&4 lf a person obllged Lo do someLhlng falls Lo do
lL, or lf he does lL ln conLravenLlon of Lhe Lenor of
Lhe obllgaLlon, Lhe same shall be execuLed aL hls
cosL. And whaL has been poorly done, be undone.
!"#$% &&(J) *++,

When Lhe obllgaLlon conslsLs ln noL dolng, and
Lhe obllgor does whaL has been forbldden hlm, lL
shall also be undone aL hls expense. !"#$%&&(K)
*++,

64 789: 9DC :8C ;=<:9=JC< M8CDC :8C DCECNW
K=NCD &D:5 ZZ]_ ;< =>: 9I9;@9?@CB

&4
1. ZI9#9 $I9 9HH9?$/ 2H $I9 .?$ RI-?I -/
H2#<-::98 .#9 :9H-8-$9 -8 ?I.#.?$9# -
even lf lL ls posslble for Lhe credlLor Lo
ask LhaL Lhe acL be undone aL Lhe
expense of Lhe debLor, consequences
conLrary Lo Lhe ob[ecL of Lhe obllgaLlon
wlll have been produced whlch are
permanenL ln characLer.
2. ZI9#9 -$ R2A=: <9 @IM/-?.==M 2# =9>.==M
-1@2//-<=9 $2 A8:2 RI.$ I./ <998
A8:289 - because of:
a. Lhe very naLure of Lhe acL lLself,
b. a provlslon of law, or
c. confllcLlng rlghLs of Lhlrd persons.

(>:C4 ln elLher case, Lhe remedy ls Lo seek recovery
for damages.

2,/&*#' a0!-&cc

64 78C= N>C< NC@9W >D NCF9K@: 9D;<CB

&4 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.

ln reclprocal obllgaLlons, nelLher parLy lncurs ln
delay lf Lhe oLher does noL comply ln a proper
manner wlLh whaL ls lncumbenL upon hlm. lrom
Lhe momenL one of Lhe parLles fulfllls hls
obllgaLlons, delay by Lhe oLher beglns. !"#$% &&(G)
*++,

64 789: 9DC :8C DCPK;<;:C< >F NC@9WB

&4
1. CbllgaLlon musL be due, demandable
and llquldaLed,
2. uebLor falls Lo perform hls poslLlve
obllgaLlon on Lhe daLe agreed upon,
3. A [udlclal or exLra[udlclal demand made
by Lhe credlLor upon Lhe debLor Lo
fulflll, perform or comply wlLh hls
obllgaLlon, and
4. lallure of Lhe debLor Lo comply wlLh
such demand.

noLe: ln reclprocal obllgaLlons, Lhe momenL one
parLy ls ready Lo comply wlLh hls obllgaLlon, delay by
Lhe oLher beglns. 1here ls no need for demand from
elLher parLy.

`5 2,#&.

64 789: 9DC :8C R;=N< >F NC@9W >D NCF9K@:B

&4
1. Y2#. /2=B98:- - defaulL on Lhe parL of
Lhe debLor/obllgor
a. OP #9 - defaulL ln real obllgaLlons
(Lo glve)
b. OP @9#/28.9 - defaulL ln personal
obllgaLlons (Lo do)

2. Y2#. .??-@-98:- - defaulL on Lhe parL of
Lhe credlLor/obllgee

!"#$%&'$!()

3. +21@98/.$-2 12#.9 - defaulL on Lhe
parL of boLh Lhe debLor and credlLor ln
reclprocal obllgaLlons

0!-& )!#+,(2$

64 789: 9DC :8C DCPK;<;:C< >F 4),- /)05&*21B

&4
1. CbllgaLlon perLalns Lo Lhe debLor,
2. CbllgaLlon ls deLermlnaLe, due and
demandable, and llquldaLed,
3. CbllgaLlon has noL been performed on
lLs maLurlLy daLe,
4. 1here ls [udlclal or exLra[udlclal demand
by Lhe credlLor,
3. lallure of Lhe debLor Lo comply wlLh
such demand

64 2>C< 4),- /)05&*21 9OO@W ;= =9:KD9@
>?@;A9:;>=C< 4),- /)05&*21 9OO@W ;= =CA9:;IC
>?@;A9:;>=F 4),- /)05&*21B

&4
1. uebLor may be llable for damages or
lnLeresLs, and
2. When lL has for lLs ob[ecL a deLermlnaLe
Lhlng, debLor may bear Lhe rlsk of loss
of Lhe Lhlng even lf Lhe loss ls due Lo
forLulLous evenL !"#$% &&(') *++,.

64 09W :8C NC?:>DY< @;9?;@;:W ?C E;:;A9:CN CIC= ;F
8C ;< AK;@:W >F NC@9WB

&4 ?es. lf Lhe debLor can prove LhaL loss would
neverLheless Lransplre even lf he had noL been ln
defaulL, Lhe courL may equlLably mlLlgaLe hls
llablllLy. !"#$% 44&' !3,) *++T 7-89:.) ;<=->.$-28/
.8: +28$#.?$/) 4666 9:%) @% 3J,

181

0!-& &11$H$,(2$

64 789: 9DC :8C DCPK;<;:C< >F 4),- -((161&*21B

&4
1. Cffer of performance by a capaclLaLed
debLor,
2. Cffer musL be Lo comply presLaLlon as lL
should be performed, and
3. 8efusal of Lhe credlLor wlLhouL [usL
cause.

64 789: 9DC :8C CFFCJ:< >F E>D9 9JJ;O;C=N;B

&4
1. 8esponslblllLy of u8 ls llmlLed Lo fraud
and gross negllgence
2. u8 ls exempLed from rlsk of loss of
Lhlng, C8 bears rlsk of loss
3. Lxpenses by u8 for preservaLlon of
Lhlng afLer delay ls chargeable Lo C8
4. lf Lhe obllgaLlon bears lnLeresL, u8 does
noL have Lo pay from Llme of delay
3. C8 llable for damages
6. u8 may relleve hlmself of obllgaLlon by
conslgnlng Lhe Lhlng

64 789: 9DC :8C DK@C< >= NCF9K@:B

&4
1. [8-=.$9#.= 2<=->.$-28/
%-4 uefaulL or delay beglns from
exLra[udlclal or [udlclal demand - mere
explraLlon of Lhe perlod flxed ls noL
enough ln order LhaL u8 may lncur
delay.

SH(<4
a. 1he obllgaLlon or Lhe law expressly
so dlcLaLes,
b. 1lme ls of Lhe essence,
c. uemand would be useless, as u8
has rendered lL beyond hls power
Lo perform, or
d. u8 has acknowledged LhaL he ls ln
defaulL.

2. 09?-@#2?.= 2<=->.$-28/
%-4 lulflllmenL by boLh parLles should
be slmulLaneous.

SH(4 When dlfferenL daLes for Lhe
performance of obllgaLlon ls flxed by
Lhe parLles.

* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
+)' %!#,-( (!'-) ./00

64 789: 9DC DCJ;OD>J9@ >?@;A9:;>=J9@ >?@;A9:;>=<X M8C= N>C< 9 O9D:W
;=JKD ;= NC@9WB

&4 ln reclprocal obllgaLlons one parLy lncurs ln
delay from Lhe momenL Lhe oLher parLy fulfllls hls
obllgaLlon, whlle he hlmself does noL comply or ls
noL ready Lo comply ln a proper manner wlLh
whaL ls lncumbenL upon hlm.

64 $= DCJ;OD>J9@ >?@;A9:;>=<X M8C= ;< NCE9=N
=CJC<<9DW ;= >DNCD F>D 9 O9D:W :> ;=JKD ;= NC@9WB

182
1$+$# #&7 ',&04

&4 Cnly when Lhe respecLlve obllgaLlons are Lo be
performed on separaLe daLes.

64 789: ;< :8C CFFCJ: >F =>=J>EO@;9=JC >F ?>:8
O9D:;C< ;= DCJ;OD>J9@ >?@;A9:;>== >F :8C CFFCJ:<
>F 4),-B

&4
1. 8enunclaLlon (express/lmplled), or
2. rescrlpLlon.

b5 /-&*2

64 789: ;< FD9KNB

&4 lL ls an lnLenLlonal evaslon of Lhe falLhful
performance of Lhe obllgaLlon !K Y.8#9/. J4,.

64 789: :WOC >F FD9KN EK<: ?C ODC<C=: ;= >DNCD
:89: :8C >?@;A>D E9W ?C 8C@N @;9?@C F>D N9E9AC<B

&4 1he fraud musL be lncldenLal fraud, or LhaL
whlch ls presenL durlng Lhe performance of Lhe
obllgaLlon, and noL causal fraud, or fraud
employed ln Lhe execuLlon of a conLracL, whlch
vlLlaLes consenL.

7&$+,- !/ /*'*-, /-&*2

64 09W 9= 9J:;>= 9D;<;=A FD>E FD9KN ?C M9;ICNB

&4 WlLh respecL Lo fraud LhaL has already been
commlLLed, Lhe law does noL prohlblL
renunclaLlon of Lhe acLlon for damages based on
Lhe same. Powever, Lhe law :29/ prohlblL any
walver of an acLlon for fuLure fraud slnce Lhe
same ls conLrary Lo law and publlc pollcy.

(>:C4 Walver of @./$ H#.A: ls valld slnce such can be
deemed an acL of generoslLy. WhaL ls renounced ls
Lhe effecL of fraud, parLlcularly Lhe rlghL Lo
lndemnlLy.

64 789: 9DC :8C R;=N< >F FD9KNB 2;<:;=AK;<85

&4
/-&*2 2*-$(% '3,
H,-/,1'$!( !/ '3,
1!('-&1' !- 1&*)&#
/-&*2
a&-'5 Zbb_c
/-&*2 2*-$(% '3,
H,-/!-0&(1, !/ '3,
!"#$%&'$!( !-
$(1$2,('&# /-&*2
a&-'5 Zbeec
78&* 9460):&2
8efore or durlng Lhe
perfecLlon of a conLracL
uurlng Lhe performance
of a
preexlsLlng obllgaLlon
#.,6)/& ); 9'&(.+1)*
1o secure Lhe consenL of
anoLher Lo enLer lnLo Lhe
conLracL
1o evade Lhe normal
fulflllmenL of Lhe
obllgaLlon
<&/.0+-*+ 9;;&(+
vlLlaLlon of consenL 8reach of an obllgaLlon
=+-+./ ); +8& %)*+,-(+
voldable valld
<1>8+ ), <&4&2: ); ">>,1&5&2 #-,+:
8lghL of lnnocenL parLy
Lo annul Lhe conLracL
wlLh damages
8lghL of lnnocenL
parLy/credlLor Lo clalm
for damages

64 789: 9DC :8C DCECN;C< >F :8C NCFD9KNCN
O9D:WB

&4
1. Speclflc performance !"#$% &455) *++,
2. 8esoluLlon of Lhe conLracL !"#$% &&G&)
*++,
3. uamages, ln elLher case

!"#$%&'$!()

e5 (,%#$%,(1,

64 2;<:;=AK;<8 FD9KN FD>E =CA@;AC=JC5

&4
18S
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
/D9KN (CA@;AC=JC
1here ls dellberaLe
lnLenLlon Lo cause
damage
1here ls no dellberaLe
lnLenLlon Lo cause
damage or ln[ury even lf
Lhe acL was done
volunLarlly
LlablllLy cannoL be
mlLlgaLed
LlablllLy may be
mlLlgaLed
Walver for fuLure fraud
ls vold
%-4 Walver for fuLure
negllgence may be
allowed ln cerLaln cases

SH(4naLure of Lhe
obllgaLlon or publlc
pollcy requlres
exLraordlnary dlllgence
(9%>% common carrler)

(>:C4 When negllgence ls so gross LhaL lL amounLs Lo
wanLon aLLlLude on Lhe parL of Lhe debLor, Lhe laws
ln case of fraud shall apply.

Where negllgence shows bad falLh (l.e., dellberaLely
commlLLed) lL ls consldered equlvalenL Lo fraud. Any
walver of an acLlon for fuLure negllgence of Lhls klnd
ls Lherefore vold. !\9 X928) ;<=->.$-28/ .8: +28$#.?$)
4665 9:%) @% 'J,

64 789: 9DC :8C CFFCJ:< >F J>=:D;?K:>DW
=CA@;AC=JC >F :8C JDCN;:>DB

&4
%-4lL reduces or mlLlgaLes Lhe damages whlch
he can recover.

SH(4lf Lhe negllgenL acL or omlsslon of Lhe
credlLor ls Lhe @#2P-1.$9 ?.A/9 of Lhe evenL
whlch led Lo Lhe damage or ln[ury complalned
of, he cannoL recover.

64 2;<:;=AK;<8 JK@O9 J>=:D9J:K9@ FD>E JK@O9
9PK;@;9=95

&4
1*#H& 1!('-&1'*&#
a1!('-&1'c
1*#H&
&6*$#$&(&a6*&)$
2,#$1'c
negllgence ls merely
an lncldenL ln Lhe
performance of an
obllgaLlon
negllgence ls
subsLanLlve and
lndependenL
1here ls always a pre
exlsLlng conLracLual
1here may or may noL be
a preexlsLlng
relaLlon conLracLual relaLlon
1he source of
obllgaLlon of
defendanL Lo pay
damages ls Lhe breach
or nonfulflllmenL of
Lhe conLracL
1he source of obllgaLlon
ls defendanL's
negllgence lLself
roof of Lhe exlsLence
of Lhe conLracL and of
lLs breach or non
fulflllmenL ls sufflclenL
@#-1. H.?-9 Lo warranL
recovery
1he negllgence of Lhe
defendanL musL be
proved
roof of dlllgence ln
Lhe selecLlon &
supervlslon of Lhe
employees ls noL an
avallable defense
roof of dlllgence ln Lhe
selecLlon & supervlslon
of Lhe employees ls a
defense

64 789: ;< :8C NCADCC >F N;@;AC=JC DCPK;DCNB

&4
1. 1haL agreed upon
2. ln Lhe absence of such, LhaL whlch ls
requlred by Lhe law
3. ln Lhe absence of Lhe foregolng,
dlllgence of a good faLher of a famlly -
LhaL reasonable dlllgence whlch an
ordlnary prudenL person would have
done under Lhe same clrcumsLances.
SH(4Common carrlers requlrlng
exLraordlnary dlllgence (ArLs. 1998
2002)

h5 1!('-&+,('$!( !/ ',(!- !/ !"#$%&'$!(
a+$!#&'$!c

64 789: ;< I;>@9:;>= >F :8C :CDE< >F :8C
J>=:D9J:B

&4 lL ls Lhe acL of conLravenlng Lhe Lenor or Lerms
or condlLlons of Lhe conLracL. lL ls also known as
B-2=.$-2)U-%9% fallure of common carrler Lo Lake lLs
passenger Lo Lhelr desLlnaLlon.!7-89:.)
;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @% '6,

(>:C4 under ArL. 1170, nCC, Lhe phrase ln any
manner conLravene Lhe Lenor" of Lhe obllgaLlon
lncludes any llllclL acL whlch lmpalrs Lhe sLrlcL and
falLhful fulflllmenL of Lhe obllgaLlon, or every klnd of
defecLlve performance.

+)' %!#,-( (!'-) ./00

]5 /!-'*$'!*) ,+,('

64 789: ;< F>D:K;:>K< CIC=:B

&4 lL ls an occurrence or happenlng whlch could
noL be foreseen, or even lf foreseen, ls lnevlLable
!"#$% &&J3) *++,.

64 789: 9DC :8C DCPK;<;:C< >F 9 F>D:K;:>K< CIC=:B

&4
1. Cause ls lndependenL of Lhe wlll of Lhe
debLor,
2. 1he evenL ls unforeseeable or
unavoldable,
3. Cccurrence renders lL .</2=A$9=M
-1@2//-<=9 for Lhe debLor Lo fulflll hls
obllgaLlon ln a normal manner,
lmposslblllLy musL be .</2=A$9 noL
parLlal, oLherwlse noL force ma[eure,
and
4. uebLor ls H#99 H#21 .8M @.#$-?-@.$-28 ln
Lhe aggravaLlon of Lhe ln[ury Lo Lhe
credlLor.

(>:C4 1he forLulLous evenL musL noL only be Lhe
proxlmaLe cause buL lL musL also be Lhe 28=M and
/2=9 ?.A/9% ConLrlbuLory negllgence of Lhe debLor
renders hlm llable desplLe Lhe forLulLous evenL.
!7-89:.) ;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @% (4,

64 $F :8C 89OOC=;=A >F 9= CIC=: ;< N;FF;JK@: :>
F>DC<CCX ;< ;: 9 F>D:K;:>K< CIC=:B

&4 no. 1he mere dlfflculLy Lo foresee Lhe
happenlng ls noL lmposslblllLy Lo foresee Lhe
same. !09@A<=-? B% XA]28 L$9B9:2#-8> +2#@%) S%0%
*2% X4&J3G) L9@$% 4G) &G(J,

64 2;<:;=AK;<8 &J: >F %>N FD>E &J: >F 09=

&4
184
1$+$# #&7 ',&04

&1' !/ %!2 &1' !/ 0&(
lorLulLous evenL lorce ma[eure
LvenL whlch ls
absoluLely lndependenL
of human lnLervenLlon
LvenL caused by Lhe
leglLlmaLe or llleglLlmaLe
acLs of persons oLher
Lhan Lhe obllgor
-%9% - earLhquakes,
sLorms, floods,
epldemlcs
-%9% - armed lnvaslon,
robbery, war!7-89:.)
;<=->.$-28/ .8:
+28$#.?$) 4666 9:) @% (6,

(>:C4 1here ls no essenLlal dlfference beLween
forLulLous evenL and force ma[uere, Lhey boLh refer
Lo causes lndependenL of Lhe wlll of Lhe obllgor.
!D2=98$-82) +-B-= +2:9 2H $I9 7I-=-@@-89/) E2=% FE) 4664
9:) @% &4J,

64 $< :8CDC @;9?;@;:W F>D @><< NKC :> F>D:K;:>K<
CIC=:B

&4
%-4 1here ls no llablllLy for loss ln case of
forLulLous evenL.

SH(<4 #9()H1"9%
1. #9w
2. (aLure of Lhe obllgaLlon requlres Lhe
assumpLlon of rlsk
3. )LlpulaLlon
4. 1he debLor ls gullLy of :2=2, mallce or
bad falLh, has Hromlsed Lhe same Lhlng
Lo Lwo or more persons who does noL
have Lhe same lnLeresL
3. 1he debLor 1onLrlbuLed Lo Lhe loss !D.8
B% F8?I.A/$- ^ +2%) S%0% *2% X(3J4) Y.#%
J) &G&4,
6. 1he possessor ls ln "9d falLh !"#$% ''4,
7. 1he obllgor ls %ullLy of fraud, negllgence
or delay or lf he conLravened Lhe Lenor
of Lhe obllgaLlon !WA.8 *._@-= B% [8-$9:
+28/$#A?$-28 +2%) F8?% B% +") S%0% *2% X
3JK'&) "@#% &') &GKK,

64 H8;@J>E<9: J>=:C=N< :89: CTO;D9:;>= >F :8C
-H*) 0;@;:9DW "9<C< &ADCCEC=: 9=N =>=
D9:;F;J9:;>= >F :8C :DC9:W ;< =>: 9 F>D:K;:>K<
CIC=:5 2CJ;NC5

&4 no. 1he requlslLes for forLulLous evenLs are
presenL ln Lhe lnsLanL case. hllcomsaL and Clobe
had no conLrol over Lhe nonrenewal of Lhe Lerm
of Lhe 8uS MlllLary 8ases AgreemenL when Lhe
same explred ln 1991, because Lhe prerogaLlve Lo
raLlfy Lhe LreaLy belonged Lo Lhe SenaLe. nelLher
dld Lhe parLles have conLrol over Lhe subsequenL
wlLhdrawal of Lhe uS mlllLary forces and
personnel from Cubl olnL. 1he evenLs made
lmposslble Lhe conLlnuaLlon of Lhe agreemenL
wlLhouL faulL on Lhe parL of elLher parLy. Such
forLulLous evenLs rendered Clobe exempL from
paymenL of renLals for Lhe remalnder of Lhe Lerm
of Lhe agreemenL. !7I-=-@@-89 +211A8-?.$-28/
L.$9==-$9 +2#@%B%S=2<9 D9=9?21) F8?%)S%0% *2%
&3J543) Y.M 4') 4663,

64 0$&& C=:CDCN ;=:> 9 J>EOD>E;<C 9ADCCEC=:
M;:8 &#&5 0$&& F9;@CN :> O9W M;:8;= :8C OCD;>N
<:;OK@9:CN5 '8K<X &#& F;@CN 9 E>:;>= F>D
CTCJK:;>= :> C=F>DJC ;:< J@9;E5 0$&& F;@CN 9
J>EEC=: 9=N 9::D;?K:CN :8C NC@9W< :> ;:< ?C;=A 9
A>ICD=EC=: 9AC=JW 9=N :8C 18D;<:E9< DK<85 $<
:8C NC@9W >F O9WEC=: 9 F>D:K;:>K< CIC=:B

&4 no. 1he acLofCod docLrlne requlres all human
agencles Lo be excluded from creaLlng Lhe cause

!"#$%&'$!()

of Lhe mlschlef. Such docLrlne cannoL be lnvoked
Lo proLecL a person who has falled Lo Lake sLeps
Lo foresLall Lhe posslble adverse consequences of
loss or ln[ury. Slnce Lhe delay ln paymenL ln Lhe
presenL case was parLly a resulL of human
parLlclpaLlon wheLher from acLlve lnLervenLlon
or neglecL Lhe whole occurrence was humanlzed
and was Lherefore ouLslde Lhe amblL of a ?./2
H2#$A-$2.

llrsL, processlng clalms agalnsL Lhe governmenL
are cerLalnly noL only foreseeable and expecLable,
buL also dependenL upon Lhe human wlll. Second,
Lhe ChrlsLmas season ls noL a casoforLulLo, buL a
regularly occurrlng evenL. 1hlrd, Lhe occurrence
of Lhe ChrlsLmas season dld noL aL all render
lmposslble Lhe normal fulflllmenL of Lhe
obllgaLlon. lourLh, MlAA cannoL argue LhaL lL ls
free from any parLlclpaLlon ln Lhe delay. lL should
have lald ouL on Lhe compromlse Lable Lhe
problems LhaL would be caused by a deadllne
falllng durlng Lhe ChrlsLmas season. lurLhermore,
lL should have explalned Lo ALA Lhe process
lnvolved for Lhe paymenL of AL's clalm. !YF"" B%
"=. F8:A/$#-9/ +2#@%) S%0% *2% &3J53G) `9<% &5)
4663,

64 G&# J9=JC@@CN 9@@ ;:< F@;A8: :> 09=;@9 NKC :> :8C
0:5 H;=9:K?> CDKO:;>= 9=N (&$&d< ;=NCF;=;:C
J@><KDC5 '8C O9<<C=ACD< MCDC :8C= F>DJCN :> O9W
F>D :8C;D 9JJ>EE>N9:;>=< 9=N EC9@ CTOC=<C<
FD>E :8C;D OCD<>=9@ FK=N<5 '8K<X :8CW F;@CN 9=
9J:;>= F>D N9E9AC< 9A9;=<: G&#5 19= G&# 9I>;N
@;9?;@;:W ?W ;=I>R;=A :89: NC@9W< MCDC J9K<CN ?W
;),(& 4-?&.,&B

&4 ?es. 1he ML. lnaLubo erupLlon prevenLed !AL
from proceedlng Lo Manlla on schedule. Such
evenL can be consldered as "force ma[eure" slnce
Lhe delayed arrlval ln Manlla was noL lmpuLable
Lo !AL.

When !AL was prevenLed from resumlng lLs fllghL
Lo Manlla due Lo Lhe effecLs of ML. lnaLubo
erupLlon, whaLever losses or damages ln Lhe form
of hoLel and meal expenses Lhe sLranded
passengers lncurred, cannoL be charged Lo !AL.
lndeed, ln Lhe absence of bad falLh or negllgence,
!AL cannoL be llable for Lhe amenlLles of lLs
sLranded passengers by reason of a forLulLous
evenL. !W.@.8 "-#=-89/ B% +") S%0% *2% &&K((3) "A>%
J) &GGK,.

64 789: 9DC :8C CFFCJ:< >F F>D:K;:>K< CIC=:B

18S
&4
1. Cn :9$9#1-8.$9 obllgaLlon - Lhe
obllgaLlon ls exLlngulshed
2. Cn >989#-? obllgaLlon - Lhe obllgaLlon ls
noL exLlngulshed (>98A/ 8A8 QA.1
@9#A-$ N genus never perlshes)

64 &" 1>DO5 C=:CDCN ;=:> 9 J>=:D9J: M;:8 S.
1>DO5 M8CDC?W :8C F>DECD 9ADCCN :> J>=<:DKJ:
:8C DC<C9DJ8 9=N @9?>D9:>DW F9J;@;:;C< >F :8C
@9::CD5 *=NCD :8C :CDE< >F :8C J>=:D9J:X &" 1>DO5
9ADCCN :> J>EO@C:C :8C F9J;@;:W ;= Z_ E>=:8<X 9:
:8C :>:9@ J>=:D9J: OD;JC >F HZi E;@@;>=5 S. 1>DO5
O9;N hij >F :8C :>:9@ J>=:D9J: OD;JCX :8C ?9@9=JC
:> ?C O9;N KO>= J>EO@C:;>= >F :8C M>DR5 '8C
M>DR <:9D:CN ;EECN;9:C@WX ?K: &" 1>DO5 @9:CD
CTOCD;C=JCN M>DR <@;OO9AC ?CJ9K<C >F @9?>D
K=DC<: ;= 8;< J>EO9=W5 &" 1>DO5Y< CEO@>WCC<
J@9;ECN :89: :8CW 9DC =>: ?C;=A O9;N >= :;ECg
8C=JCX :8C M>DR <@>MN>M=5 &< >F :8C Z\
:8

E>=:8X M>DR M9< >=@W ehj J>EO@C:CN5 &" 1>DO5
9<RCN F>D CT:C=<;>= >F :;ECX J@9;E;=A :89: ;:<
@9?>D OD>?@CE< ;< 9 J9<C >F F>D:K;:>K< CIC=:X ?K:
:8;< M9< NC=;CN ?W S. 1>DO5 78C= ;: ?CJ9EC
JCD:9;= :89: :8C J>=<:DKJ:;>= J>K@N =>: ?C
F;=;<8CN >= :;ECX S. 1>DO5 <C=: MD;::C= =>:;JC
J9=JC@@;=A :8C J>=:D9J: 9=N DCPK;D;=A &" 1>DO5 :>
;EECN;9:C@W I9J9:C :8C ODCE;<C<5

19= :8C @9?>D K=DC<: ?C J>=<;NCDCN 9 F>D:K;:>K<
CIC=:B

&4 Labor unresL ls noL a forLulLous evenL LhaL wlll
excuse A8 Corp. from complylng wlLh lLs
obllgaLlon of consLrucLlng Lhe research and
laboraLory faclllLles of x? Corp. 1he labor unresL,
whlch may even be aLLrlbuLed ln large parL Lo A8
Corp. lLself, ls noL Lhe dlrecL cause of non
compllance by A8 Corp. lL ls lndependenL of lLs
obllgaLlon. lL ls slmllar Lo Lhe fallure of a u8
borrower Lo pay her loan [usL because her
planLaLlon suffered losses due Lo Lhe cadang
cadang dlsease. lL does noL excuse compllance
wlLh Lhe obllgaLlon !\V7 B% E:.% \9 Y2==,%

&NN;:;>=9@ &=<MCD4 1he labor unresL ln Lhls case
ls noL a forLulLous evenL. 1he requlslLes of
forLulLous evenL are: (1) Lhe evenL musL be
lndependenL of human wlll or aL leasL of Lhe
debLor's wlll, (2) Lhe evenL could noL be foreseen,
or lf foreseen ls lnevlLable, (3) Lhe evenL musL
have rendered lmposslble debLor's compllance of
Lhe obllgaLlon ln a proper manner, and (4) Lhe
debLor musL noL be gullLy of concurrenL
negllgence. All Lhe requlslLes are absenL ln Lhls
case. A8 Corp. could have anLlclpaLed Lhe labor
unresL whlch was caused by delays ln paylng Lhe
laborer's wages. 1he company could have hlred
addlLlonal laborers Lo make up for Lhe work
slowdown.

* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
+)' %!#,-( (!'-) ./00

19= S. 1>DO5 K=;@9:CD9@@W 9=N ;EECN;9:C@W J9=JC@
:8C J>=:D9J:B

&4 no. x? Corp. cannoL unllaLerally and
lmmedlaLely cancel Lhe conLracL because Lhere ls
need for a [udlclal acLlon of resclsslon. 1he
provlslons of ArL. 1191 of Lhe Clvll Code provldlng
for resclsslon ln reclprocal obllgaLlons can only be
lnvoked [udlclally.

&@:CD=9:;IC &=<MCD4 ?es, x? Corp. may
unllaLerally cancel Lhe obllgaLlon buL Lhls ls
sub[ecL Lo Lhe rlsk LhaL Lhe cancellaLlon of Lhe
reclprocal obllgaLlon belng challenged ln courL
and lf A8 Corp. succeeds, Lhen x? Corp. wlll be
declared ln defaulL and be llable for damages.

0K<: &" 1>DO5 DC:KD= :8C hij N>M= O9WEC=:B

&4 no, under Lhe prlnclple of quanLum merulL, A8
Corp. had Lhe rlghL Lo reLaln paymenL
correspondlng Lo hls percenLage of
accompllshmenL less Lhe amounL of damages
suffered by x? Corp. because of Lhe delay or
defaulL. aìi_ "9D 6KC<:;>=c

186
1$+$# #&7 ',&04

25 -,0,2$,)

64 789: 9DC :8C DCECN;C< :89: E9W ?C 9I9;@CN >F
;= J9<C >F ?DC9J8B

&4
1. Speclflc performance, or subsLlLuLed
performance by a Lhlrd person ln case
of an obllgaLlon Lo dellver a generlc
Lhlng, and ln obllgaLlons Lo do, unless lL
ls a purely personal acL, or
2. 8esclsslon (or resoluLlon ln reclprocal
obllgaLlons),
3. uamages, ln any case,
4. Subsldlary remedles of credlLors:
a. "??-28 /A<#2>.$2#-.
b. "??-28 @.A=-.8.
c. "??-28 :-#9?$.

Z5 )H,1$/$1 H,-/!-0&(1,

64 789: 9DC :8C DCECN;C< ;= J>==CJ:;>= M;:8
<OCJ;F;J OCDF>DE9=JCB

&4
1. LxhausLlon of Lhe properLles of Lhe
debLor (noL exempL from aLLachmenL
under Lhe law)
2. "??-28 /A<#2>.$2#-. (subrogaLory
acLlon) - an lndlrecL acLlon broughL ln
Lhe name of Lhe debLor by Lhe credlLor
Lo enforce Lhe former's rlghLs 9P?9@$:
a. personal rlghLs of Lhe debLor
b. rlghLs lnherenL ln Lhe person of Lhe
debLor
c. properLles exempL from execuLlon
(9%>%famlly home)

3. "??-28 @.A=-.8. (resclssory acLlon) - an
acLlon Lo lmpugn or assall Lhe acLs done
or conLracLs enLered lnLo by Lhe debLor
ln fraud of hls credlLor,

(>:C4 MusL be a remedy of lasL resorL,
avalled of only afLer all oLher legal
remedles have been exhausLed and have
been proven fuLlle.

resupposes a [udgmenL and Lhe lssuance
by Lhe Lrlal courL of a wrlL of execuLlon for
Lhe saLlsfacLlon of Lhe [udgmenL and Lhe
fallure of Lhe Sherlff Lo enforce and saLlsfy
Lhe [udgmenL of Lhe courL.

(>:C4 8esorL Lo Lhe remedles musL be ln Lhe order
sLaLed above. !"#$% &&JJ) *++,

64 )9:KD=;=> M9< :8C DCA;<:CDCN >M=CD >F :M>
O9DJC@< >F @9=N5 '8C &N>D9?@C< MCDC @C<<CC< >F 9
O>D:;>= >F #>: (>5 Z5 )9:KD=;=> 9=N 8;< <>=X
/D9=J;<J>X >?:9;=CN 9 @>9= FD>E )9@I9N>DX ;=
J>=<;NCD9:;>= >F M8;J8 :8CW OD>E;<CN :> :D9=<FCD
:8C O><<C<<;>= 9=N C=L>WEC=: >F :8C FDK;:< >F #>:
(>5 `5 )9:KD=;=> <>@N :> /D9=J;<J> O9D: >F #>: (>5
ZX M8;J8 /D9=J;<J> <>@N :> G><C -9E><5 '8C
O>D:;>= >F @9=N ?C;=A DC=:CN ?W )9@I9N>D M9<
;=J@KNCN ;= :8C O>D:;>= <>@N :> -9E><5 '8C NCCN<
>F <9@C CI;NC=J;=A :8C J>=ICW9=JC< MCDC =>:
DCA;<:CDCN ;= :8C >FF;JC >F :8C DCA;<:CD >F NCCN<5
78C= )9:KD=;=> 9=N /D9=J;<J> F9;@CN :> O9W :8C;D
@>9=X 9 NCE9=N @C::CD M9< <C=: :> /D9=J;<J>X ?K:
8C DCFK<CN :> O9W5

78C= )9@I9N>D @C9D=CN >F :8C <9@C E9NC ?W
/D9=J;<J> :> -9E><X )9@I9N>D F;@CN 9 J>EO@9;=:
F>D :8C 9==K@EC=: >D DC<J;<<;>= >F :8C <9@C >=
:8C AD>K=N :89: :8C <9@C M9< FD9KNK@C=:@W
ODCO9DCN 9=N CTCJK:CN5 19= )9@I9N>D F;@C 9=
9J:;>= F>D :8C DC<J;<<;>= >D 9==K@EC=: >F :8C
<9@CB

&4 no. As credlLor, Salvador does noL have such
maLerlal lnLeresL as Lo allow hlm Lo sue for
resclsslon of Lhe conLracL of sale. AL Lhe ouLseL,
Salvador's rlghL agalnsL lranclsco and 8amos ls
only a personal rlghL Lo recelve paymenL for Lhe
loan, lL ls noL a real rlghL over Lhe loL sub[ecL of
Lhe deed of sale.

1he sale was noL made ln fraud of credlLors. ArL.
1177 of Lhe Clvll Code provldes for successlve

!"#$%&'$!()

measures LhaL musL be Laken by a credlLor before
he may brlng an acLlon for resclsslon of an
allegedly fraudulenL sale. WlLhouL avalllng of Lhe
flrsL and second remedles, Salvador slmply
underLook Lhe Lhlrd measure and flled an acLlon
for annulmenL of Lhe sale. 1hls cannoL be done.

An acLlon for resclsslon ls a subsldlary remedy, lL
cannoL be lnsLlLuLed excepL when Lhe parLy
sufferlng damage has no oLher legal means Lo
obLaln reparaLlon for Lhe same. Conslderlng
ArLlcle 1380 of Lhe Clvll Code, whlch sLaLes LhaL
conLracL valldly agreed upon may be resclnded ln
Lhe cases esLabllshed by law, Salvador, eL al. have
noL shown LhaL Lhey have no oLher means of
enforclng Lhelr credlL. !":2#.<=9) 9$% .=% B%+") S%0%
*2% &&G3(() *2B% 4') &GGG,

64 78;@C :8C J9<C M9< OC=N;=AX /C@;T N>=9:CN 8;<
>F O9DJC@< >F @9=N ;= F9I>D >F 8;< J8;@NDC=5
GKNAEC=: M9< DC=NCDCN 9A9;=<: /C@;T5 78C= :8C
<8CD;FFX 9JJ>EO9=;CN ?W J>K=<C@ >F H8;@9EX
<>KA8: :> C=F>DJC :8C -01-/ MD;: >F CTCJK:;>=X
:8CW N;<J>ICDCN :89: /C@;T => @>=ACD 89N 9=W
OD>OCD:W 9=N :89: 8C 89N J>=ICWCN :8C <K?LCJ:
OD>OCD:;C< :> 8;< J8;@NDC=5 '8K<X H8;@9E F;@CN 9=
-((1)*6-.01-*- F>D DC<J;<<;>= >F :8C N>=9:;>=<5
/C@;T J>K=:CDCN :89: 9= 9J:;>= F>D DC<J;<<;>= >F
:8C N>=9:;>= 89N 9@DC9NW ODC<JD;?CN <;=JC :8C
:;EC >F ODC<JD;O:;>= 89< :> DK= FD>E :8C N9:C >F
DCA;<:D9:;>=5 39< :8C 9J:;>= F;@CN ?W H8;@9E
ODC<JD;?CNB

&4 no. hllam only learned abouL Lhe unlawful
conveyances made by lellx more Lhan four years
afLer Lhe donaLlons were effecLed, when lLs
counsel accompanled Lhe sherlff Lo 8uLuan ClLy Lo
aLLach Lhe properLles. 1here Lhey found LhaL he
no longer had any properLles ln hls name. lL was
only Lhen LhaL hllam's acLlon for resclsslon of Lhe
deeds of donaLlon accrued because Lhen lL could
be sald LhaL hllam had exhausLed all legal means
Lo saLlsfy Lhe Lrlal courL's [udgmenL ln lLs favor.
Slnce hllam flled lLs complalnL for .??-28
@.A=-.8. agalnsL peLlLloners barely a monLh from
lLs dlscovery LhaL lellx had no oLher properLy Lo
saLlsfy Lhe [udgmenL award agalnsL hlm, lLs acLlon
for resclsslon of Lhe sub[ecL deeds clearly had noL
yeL prescrlbed.!aI9 b28> +I98> B% +")S%0% *2%
&33&(G) Y.#% 4K) 4666,
187
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL

(>:C4 1he debLor ls llable wlLh all hls properLy,
presenL and fuLure, for Lhe fulflllmenL of hls
obllgaLlons, sub[ecL Lo Lhe exempLlons provlded by
law !\9 X928) ;<=->.$-28/ .8: +28$#.?$/) 4665 9:)
@%J&,

64 789: ;< <K?<:;:K:C OCDF>DE9=JCB

&4 lL ls a remedy of Lhe credlLor ln case of non
performance by Lhe debLor, where anoLher parLy
performs Lhe obllgaLlon or Lhe same ls performed
aL Lhe expense of Lhe debLor.

64 78C= E9W :8CDC ?C <K?<:;:K:C OCDF>DE9=JCB
&4
1. oslLlve personal obllgaLlon:
a. lf noL purely personal
subsLlLuLe performance, Lhe
obllgaLlon shall be execuLed
aL debLor's cosL lf he falls Lo
do lL. ("#$% &&(J) *++)
b. urely personal no subsLlLuLe
performance may be
demanded because of Lhe
personal quallflcaLlons Laken
lnLo conslderaLlon. 1he only
remedy ls damages.
2. 8eal obllgaLlon:
a. Cenerlc Lhlng subsLlLuLe
performance, dellvery may be
made by a person oLher Lhan
Lhe debLor slnce Lhe ob[ecL ls
merely deslgnaLed by lLs class
or genus. 1he credlLor may
ask LhaL Lhe obllgaLlon be
complled wlLh aL Lhe expense
of Lhe debLor. (&&(')*++)
b. Speclflc Lhlng speclflc
performance may be
demanded, LhaL ls, Lhe
credlLor may compel Lhe
debLor Lo make Lhe dellvery.

`5 -,)1$))$!(

64 789: ;< DC<J;<<;>= K=NCD &D:;J@C ZZ[ZB

&4 lL refers Lo Lhe cancellaLlon of Lhe conLracL or
reclprocal obllgaLlon ln case of breach on Lhe parL
of one, whlch breach ls vlolaLlve of Lhe reclproclLy
beLween Lhe parLles. 1hls ls properly called
resoluLlon.

(>:C4 1he resclsslon under ArL. 1380 ls resclsslon
based on leslon or fraud upon credlLors.

64 '> M89: R;=N >F >?@;A9:;>= ;< DC<>@K:;>=
9I9;@9?@CB

&4 8eclprocal obllgaLlon, slnce resoluLlon ls
lmplled Lhereln.

+)' %!#,-( (!'-) ./00

64 78> E9W NCE9=N DC<>@K:;>=B

&4 ln[ured parLy.

64 09W :8C ;=LKDCN O9D:W NCE9=N DC<>@K:;>=
9F:CD 8C C@CJ:< <OCJ;F;J OCDF>DE9=JCB
&4
%-4 no. Pls rlghL ls noL con[uncLlve, Lhus, he may
noL choose boLh remedles of resoluLlon and
speclflc performance.
188
1$+$# #&7 ',&04

SH(4 ?es, lf speclflc performance should become
lmposslble

64 78C= N>C< @;9?;@;:W F>D N9E9AC< 9D;<CB

&4 1hose llable under ArL. 1170 shall pay damages
only lf aslde from Lhe breach of conLracL,
pre[udlce or damage was caused. (8erg v. 1eus,
C.8. no. L6430, CcL 30, 1934)

64 789: 9DC :8C R;=N< >F N9E9ACF 9JJ;>=
<K?D>A9:>D;9B

&4
1. 1he debLor's asseLs musL be lnsufflclenL
Lo saLlsfy clalms agalnsL hlm
2. 1he credlLor musL have pursued all
properLles of Lhe debLor sub[ecL Lo
execuLlon
3. 1he rlghL of acLlon musL noL be purely
personal
4. 1he debLor whose rlghL of acLlon ls
exerclsed musL be lndebLed Lo Lhe
credlLor.

64 789: 9DC :8C DCPK;<;:C< >F 9JJ;>= O9K@;9=9B

&4
1. uefendanL musL be lndebLed Lo plalnLlff
2. 1he fraudulenL acL performed by Lhe
debLorsubsequenL Lo Lhe conLracLglves
advanLage Lo anoLher
3. 1he credlLor ls pre[udlced by such acL.
4. 1he credlLor musL have pursued all
properLles of Lhe debLor sub[ecL Lo
execuLlon
3. 1he credlLor has no oLher legal remedy.

64 789: ;< 9JJ;>= N;DCJ:9B

&4 lL ls Lhe rlghL of Lhe lessor Lo go dlrecLly agalnsL
Lhe sublessee for unpald renLs of Lhe lessee.

(>:C: under ArL. 1632 of Lhe Clvll Code, Lhe
sublessee ls subsldlarlly llable Lo Lhe lessor for any
renL due from Lhe lessee.

+$$5 Q$(2) !/ 1$+$# !"#$%&'$!()

64 789: 9DC :8C R;=N< >F J;I;@ >?@;A9:;>=?@;A9:;>= FD>E 9 =9:KD9@
>?@;A9:;>=5

&4
1$+$# !"#$%&'$!( (&'*-&# !"#$%&'$!(
"/ +) 31*21*> ;),(&
Arlses from poslLlve law
Arlses from equlLy and
[usLlce
"/ +) &*;),(&4&*+ 1* ().,+
Can be enforced by courL
acLlon
CannoL be enforced ln
courL. lL depends
excluslvely upon Lhe
good consclence of Lhe
debLor.

&5 H*-, !"#$%&'$!()

64 789: ;< OKDC >?@;A9:;>=B

&4 Cne whose effecLlvlLy or exLlngulshmenL does
noL depend upon Lhe fulflllmenL or non
fulflllmenL of a condlLlon or upon Lhe explraLlon
of a perlod and ls demandable aL once. !"#$% &&JG)
*++,

"5 1!(2$'$!(&# !"#$%&'$!()

64 789: ;< J>=N;:;>=9@ >?@;A9:;>=B

&4 lL ls an obllgaLlon sub[ecL Lo a condlLlon and
Lhe effecLlvlLy of whlch ls subordlnaLed Lo Lhe
fulflllmenL or nonfulflllmenL of a fuLure and
uncerLaln evenL, or upon a pasL evenL unknown
Lo Lhe parLles.

!"#$%&'$!()

64 -9E>=X :8C LKN;J;9@ 9NE;=;<:D9:>D >F :8C
C<:9:C >F GK9=X F>K=N >K: :89: ->ND;AKCk 89N
C=@9DACN :8C 9DC9 >F :8C @9=N M8;J8 8C
OKDJ89<CN FD>E GK9= ?CF>DC 8;< NC9:85 '8K<X
-9E>= NCE9=NCN ->ND;AKCk :> I9J9:C :8C
O>D:;>= 9@@CACN@W C=JD>9J8CN ?W 8;E5 ->ND;AKCk
DCFK<CN 9=N J>=:C<:CN :8CDC M9< ;=NCCN 9
J>=N;:;>=9@ <9@C M;:8 :8C ?9@9=JC >F :8C
OKDJ89<C OD;JC O9W9?@C M;:8;= F;IC WC9D< FD>E
:8C CTCJK:;>= >F :8C NCCN >F <9@C5 -9E>= :8C=
F;@CN 9= 9J:;>= F>D DCJ>ICDW >F O><<C<<;>= >F :8C
N;<OK:CN @>:5 $< :8C J>=:D9J: >F <9@C 9 J>=N;:;>=9@
>=CB
189
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL

&4 no. 1he sLlpulaLlon LhaL Lhe "paymenL of Lhe
full conslderaLlon based on a survey shall be due
and payable ln 3 years from Lhe execuLlon of a
formal deed of sale" ls noL a condlLlon whlch
affecLs Lhe efflcacy of Lhe conLracL of sale. lL
merely provldes Lhe manner by whlch Lhe full
conslderaLlon ls Lo be compuLed and Lhe Llme
wlLhln whlch Lhe same ls Lo be pald. 8uL lL does
noL affecL ln any manner Lhe effecLlvlLy of Lhe
conLracL. !b9-#/ 2H L.8 "8:#9/B%02:#->A9]) S%0%
*2% &5'(53) Y.M 5&) 4666,

64 2;<:;=AK;<8 OCD;>N FD>E J>=N;:;>=5
&4
H,-$!2 1!(2$'$!(
"/ +) @14&
8efers Lo Lhe fuLure
May refer Lo pasL evenL
unknown Lo Lhe parLles
"/ +) A.0;1004&*+
lL wlll happen aL an
exacL daLe or aL an
lndeflnlLe Llme, buL ls
sure Lo arrlve
May or may noL happen
"/ +) 1+/ B*;0.&*(& )* +8& $301>-+1)* +) 3& A.0;100&2 ),
#&,;),4&2
no effecL or lnfluence
upon Lhe exlsLence of
Lhe obllgaLlon <A$ 28=M ln
lLs demandablllLy or
performance
May glve rlse Lo an
obllgaLlon (suspenslve)
or Lhe cessaLlon of one
already exlsLlng
(resoluLory)

Z5 )*)H,()$+, 1!(2$'$!(

64 789: ;< 9 <K<OC=<;IC J>=N;:;>=B

&4 A condlLlon Lhe fulflllmenL of whlch wlll glve
rlse Lo Lhe acqulslLlon of a rlghL5

64 2;<:;=AK;<8 <K<OC=<;IC FD>E DC<>@K:>DW
J>=N;:;>=<5

&4
)*)H,()$+, 1!(2$'$!(
-,)!#*'!-.
1!(2$'$!(
9;;&(+ ); A.0;1004&*+
CbllgaLlon arlses or
becomes effecLlve
CbllgaLlon ls
exLlngulshed
9;;&(+ ); C)*;.0;1004&*+
lf noL fulfllled, no
[urldlcal relaLlon ls
creaLed
lf noL fulfllled, [urldlcal
relaLlon ls consolldaLed
78&* <1>8+/ -,& "(D.1,&2
8lghLs are noL yeL
acqulred, buL Lhere ls
hope or expecLancy LhaL
Lhey wlll soon be
acqulred
8lghLs are already
acqulred, buL sub[ecL Lo
Lhe LhreaL or danger of
exLlncLlon

64 $= J9<C< >F >?@;A9:;>=< M;:8 9 <K<OC=<;IC
J>=N;:;>=X M89: 9DC :8C CFFCJ:< >F @><<X
NC:CD;>D9:;>=X 9=N ;EOD>ICEC=:< ;= DC9@
>?@;A9:;>=<B

&4
7$'3 2-Y) /&*#' 7$'3!*' 2-Y) /&*#'
E)//
u8 pays damages CbllgaLlon exLlngulshed
F&+&,1),-+1)*
C8 choose b/w
resclsslon of obllgaLlon
or fulflllmenL (wlLh
lndemnlLy for damages ln
elLher case)
lmpalrmenL borne by C8
B46,)5&4&*+
1. VM $I9 $I-8>c/ 8.$A#9 2# <M $-19 - lnure Lo Lhe
beneflL of Lhe C8
2. "$ $I9 :9<$2#c/ 9P@98/9 - u8 shall have no rlghL
oLher Lhan LhaL granLed Lo a usufrucLuary

64 789: 9DC :8C DCPK;<;:C< F>D &D:5ZZ_[ :> 9OO@WB

&4
1. MusL be a real obllgaLlon,
2. Cb[ecL ls a speclflc/deLermlnaLe Lhlng,
3. CbllgaLlon ls sub[ecL Lo a suspenslve
condlLlon,
4. 1he condlLlon ls fulfllled, and
3. 1here ls loss, deLerloraLlon or
lmprovemenL of Lhe Lhlng durlng Lhe
pendency of Lhe happenlng of Lhe
condlLlon.

(>:C4 1he same condlLlons apply ln case of an
obllgor ln obllgaLlons wlLh a resoluLory condlLlon. ln
such cases, Lhe Lhlrd requlslLe musL read, sub[ecL Lo
a resoluLory condlLlon."

+)' %!#,-( (!'-) ./00

64 %)$) 9OOD>ICN :8C 9OO@;J9:;>= >F &AJ9>;@; F>D
:8C OKDJ89<C >F 9 8>K<C 9=N @>: ;= :8C %)$)
3>K<;=A HD>LCJ:g ;: ;< <K?LCJ: :> :8C J>=N;:;>=
:89: 8C <8>K@N ;EECN;9:C@W >JJKOW :8C 8>K<C5
"K: 8C J>K@N =>: ?CJ9K<C :8C 8>K<C M9<
K=;=89?;:9?@C5 3C O9;N :8C F;D<: ;=<:9@@EC=: 9=N
>:8CD FCC< ?K: DCFK<CN :> E9RC FKD:8CD O9WEC=:
K=:;@ %)$) 89N E9NC :8C 8>K<C 89?;:9?@C5 %)$)
DCFK<CN 9=N >O:CN :> J9=JC@ :8C 9M9DN 9=N
NCE9=N :8C I9J9:;>= ?W &AJ9>;@; >F :8C
ODCE;<C<5 19= %)$) J9=JC@ :8C J>=:D9J:B

&4 no. 1here was a perfecLed conLracL of sale
beLween Lhe parLles, Lhere had been a meeLlng of
Lhe mlnds upon Lhe purchase by Agcaolll of a
deLermlnaLe house and loL aL a deflnlLe prlce and
from LhaL momenL, Lhe parLles acqulred Lhe rlghL
Lo reclprocally demand performance. 8ased on
Lhelr conLacL, lL can only be undersLood as
lmposlng on CSlS an obllgaLlon Lo dellver Lo
Agcaolll a reasonably hablLable dwelllng ln reLurn
for hls underLaklng Lo pay Lhe sLlpulaLed prlce.
Slnce CSlS dld noL fulflll LhaL obllgaLlon, and was
noL wllllng Lo puL Lhe house ln hablLable sLaLe, lL
cannoL lnvoke Agcaolll's suspenslon of paymenL
of amorLlzaLlons as cause Lo cancel Lhe conLracL
beLween Lhem.

(>:C4 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. !">?.2-=- B% SLFL) S%0% *2% X
566'() "A>% 56) &GKK,

19u
1$+$# #&7 ',&04

`5 -,)!#*'!-. 1!(2$'$!(

64 789: ;< 9 DC<>@K:>DW J>=N;:;>=B

&4 A condlLlon where Lhe rlghLs already acqulred
are losL upon fulflllmenL of Lhe condlLlon.

64 789: 9DC :8C CFFCJ:< >F FK@F;@@EC=: >F
DC<>@K:>DW J>=N;:;>=B
&4
1. 8eal obllgaLlons:
a. 1he parLles shall reLurn Lo each
oLher whaL Lhey have recelved.
b. CbllgaLlon ls exLlngulshed.
c. ln case of Lhe loss, deLerloraLlon or
lmprovemenL of Lhe Lhlng, ArL.
1189, wlLh respecL Lo Lhe debLor,
shall be applled Lo Lhe parLy who ls
bound Lo reLurn.

2. ersonal obllgaLlons Lhe courLs shall
deLermlne, ln each case, Lhe reLroacLlve
effecL of Lhe condlLlon LhaL has been
complled wlLh.

64 S N>=9:CN 9 O9DJC@ >F @9=N :> :8C EK=;J;O9@;:W
>F '9D@9J K=NCD 9 J>=N;:;>= :89: 9 OK?@;J <J8>>@
<89@@ ?C CDCJ:CN 9=N 9 OK?@;J O9DR ?C E9NC
M;:8;= ] E>=:8< FD>E :8C N9:C >F :8C D9:;F;J9:;>=
>F :8C N>=9:;>= ?W :8C O9D:;C<5 &F:CD :8C
DCA;<:D9:;>= >F :8C <9;N N>=9:;>=X S <>@N :8C
<9EC @9=N :> .5 '8CDC9F:CDX . ?D>KA8: 9= 9J:;>=
9A9;=<: :8C HD>I;=JC >F '9D@9JX 9@@CA;=A :89: :8C
J>=N;:;>=< >F :8C N>=9:;>= ;< 9 J>=N;:;>=
ODCJCNC=:X :8K<X :8C EK=;J;O9@;:W >F '9D@9J N;N
=>: 9JPK;DC >M=CD<8;O >ICD :8C @9=N M8C= ;:
F9;@CN :> J>EO@W M;:8 :8C <9;N J>=N;:;>=5 $< :8C
J>=:C=:;>= >F . J>DDCJ:B

&4 no. ln Lhls case, Lhe condlLlon could noL be
complled wlLh excepL afLer glvlng effecL Lo Lhe
donaLlon. 1he MunlclpallLy of 1arlac could noL do
any work on Lhe donaLed land lf Lhe donaLlon had
noL really been effecLed, because lL would be an
lnvaslon of anoLher's LlLle, for Lhe land would
have conLlnued Lo belong Lo Lhe donor so long as
Lhe condlLlon lmposed was noL complled wlLh.
1hus, conslderlng LhaL Lhe condlLlon lLself was for
a publlc school Lo be bullL means LhaL ownershlp
of Lhe land was already wlLh Lhe MunlclpallLy.
!7.#_/ B% 7#2B-8?9 2H D.#=.?) S%0% *2% X43&G6) WA=M
&5) &G4(,

64 '8C @9:C 2>= #>OCkX )D5X M8> M9< :8C= 9
ECE?CD >F :8C ">9DN >F 'DK<:CC< >F 1H*X
CTCJK:CN 9 NCCN >F N>=9:;>= ;= F9I>D >F :8C
@9::CD >F 9 O9DJC@ >F @9=N <K?LCJ: :> :8C J>=N;:;>=
:89: ;: <89@@ ?C K:;@;kCN F>D :8C C<:9?@;<8EC=: 9=N
K<C >F 9 ECN;J9@ J>@@CAC5 3>MCICDX :8C 8C;D< >F
2>= #>OCkX )D5X F;@CN 9= 9J:;>= F>D 9==K@EC=: >F
:8C N>=9:;>=X DCJ>=ICW9=JC 9=N N9E9AC<
9A9;=<: 1H* 9@@CA;=A :89: 1H* 89N =>: J>EO@;CN
M;:8 :8C J>=N;:;>=< >F :8C N>=9:;>=5

&DC :8C J>=N;:;>=< ;EO><CN DC<>@K:>DW >D
<K<OC=<;ICB

&4 under ArL. 1181 of Lhe Clvll Code, on
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. 1hus, when a person donaLes land Lo
anoLher on Lhe condlLlon LhaL Lhe laLLer would
bulld upon Lhe land a school, Lhe condlLlon
lmposed was noL a condlLlon precedenL or a
suspenslve condlLlon buL a resoluLory one. lL ls
noL correcL Lo say LhaL Lhe schoolhouse had Lo be
consLrucLed before Lhe donaLlon became
effecLlve, LhaL ls, before Lhe donee could become
Lhe owner of Lhe land, oLherwlse, lL would be
lnvadlng Lhe properLy rlghLs of Lhe donor. 1he
donaLlon had Lo be valld before Lhe fulflllmenL of

!"#$%&'$!()

Lhe condlLlon. lf Lhere was no fulflllmenL or
compllance wlLh Lhe condlLlon, Lhe donaLlon may
now be revoked and all rlghLs whlch Lhe donee
may have acqulred under lL shall be deemed losL
and exLlngulshed. !+98$#.= 7I-=-@@-89 [8-B9#/-$M B%
+") S%0% *2% &&4&4J) WA=M &J) &GG',

64 789: N>C< 9 J>=<:DKJ:;IC FK@F;@@EC=: >F 9
J>=N;:;>= C=:9;@B

&4When Lhe debLor acLually prevenLs Lhe
fulflllmenL of Lhe condlLlon, Lhen sald condlLlon
shall be deemed fulfllled.

191
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
`5 H!',)'&'$+, 1!(2$'$!(

64 78C= ;< 9 J>=N;:;>= <9;N :> ?C O>:C<:9:;ICB

&4 When Lhe condlLlon depends upon Lhe wlll of
one of Lhe conLracLlng parLles.

64 2>C< 9 J>=N;:;>= M8;J8 NCOC=N< KO>= :8C M;@@
>F :8C NC?:>D ;=I9@;N9:C ?>:8 :8C J>=N;:;>= 9=N
:8C >?@;A9:;>=B 789: 9?>K: 9 J>=N;:;>= M8;J8
NCOC=N< KO>= :8C M;@@ >F :8C JDCN;:>DB

&4 ?es. 1hls ls because lLs valldlLy and compllance
ls lefL Lo Lhe wlll of Lhe debLor, and cannoL
Lherefore be easlly demanded. 8uL lf Lhe
condlLlon ls a preexlsLlng one, only Lhe condlLlon
ls vold, leavlng Lhe obllgaLlon lLself valld. lurLher,
lf Lhe condlLlon ls resoluLory, lL ls valld because
whaL ls lefL Lo Lhe sole wlll of Lhe debLor ls noL Lhe
exlsLence or Lhe fulflllmenL of Lhe obllgaLlon buL
merely lLs exLlngulshmenL.

lf Lhe fulflllmenL depends upon Lhe wlll of Lhe
credlLor, ln any case, boLh Lhe condlLlon and Lhe
obllgaLlon are valld.

64 789: 9DC :8C CFFCJ:< >F :8C FK@F;@@EC=: >F 9
<K<OC=<;IC J>=N;:;>=B
&4
%-4 LffecLs reLroacL Lo Lhe day of
consLlLuLlon of Lhe obllgaLlon.
SH(4 no reLroacLlvlLy as Lo,
a. frulLs
b. lnLeresLs

SH( :> :8C SH(: 1here may be
reLroacLlvlLy as Lo Lhe frulLs and
lnLeresLs ln unllaLeral obllgaLlons lf such
lnLenLlon appears

2. ersonal obllgaLlons Lhe courL
deLermlnes Lhe reLroacLlve effecL of Lhe
condlLlon fulfllled.
64 789: 9DC :8C CFFCJ:< >F :8C FK@F;@@EC=: >F 9
DC<>@K:>DW J>=N;:;>=B
&4
a. obllgaLlon ls exLlngulshed
b. arLles shall reLurn Lo each oLher
whaL Lhey have recelved.
2. ersonal obllgaLlons Lhe courL
deLermlnes Lhe reLroacLlve effecL of Lhe
condlLlon fulfllled.

64 789: 9DC :8C >:8CD :WOC< >F J>=N;:;>=<B

&4 190H($21&H$
1. %-/A.= - Lhe performance or fulflllmenL
of Lhe condlLlon depends upon chance
and/or Lhe wlll of a Lhlrd person
2. G-P9: - Lhe performance or fulflllmenL
of Lhe condlLlon depends parLly upon
Lhe wlll of a parLy Lo Lhe obllgaLlon and
parLly upon chance and/or Lhe wlll of a
Lhlrd person
3. #2/-$-B9 - lnvolves Lhe dolng of an acL
4. C9>.$-B9 - lnvolves Lhe omlsslon of an
acL
3. F-B-/-<=9 - ls suscepLlble of parLlal
performance
6. B8:-B-/-<=9 - ls noL suscepLlble of parLlal
performance
7. %28CA8?$-B9 - Lhere are several
condlLlons ln an obllgaLlon all of whlch
musL be performed
8. "=$9#8.$-B9 - Lhere are several
condlLlons ln an obllgaLlon buL only one
musL be performed
9. #2//-<=9 - ls capable of fulflllmenL
accordlng Lo Lhe naLure, law, publlc
pollcy or good cusLoms
10. B1@2//-<=9 - ls noL capable of fulflllmenL
accordlng Lo naLure, law, publlc pollcy
or good cusLoms !"#$% &&K5) *++,

64 789: ;< :8C CFFCJ: >F 9= ;EO><<;?@C >D
K=@9MFK@ J>=N;:;>=B

&4
%-4 lmposslble condlLlons annul Lhe
obllgaLlon whlch depends upon Lhe parLles
buL noL of a Lhlrd person.

SH(<4 H22>('.
1. HreexlsLlng obllgaLlon
2. CbllgaLlon ls 2lvlslble
3. ln slmple or remuneraLory 2>naLlons
4. ln case of condlLlons (oL Lo do an
lmposslble Lhlng
3. ln 'esLamenLary dlsposlLlons

+)' %!#,-( (!'-) ./00

(>:C4 ln Lhe foregolng, Lhe obllgaLlons remaln
valld, only Lhe condlLlon ls vold and deemed Lo
have noL been lmposed. lL ls appllcable only Lo
obllgaLlons 82$ $2 :2 and >#.$A-$2A/
obllgaLlons.

64 78C= M;@@ :8C CFFCJ: >F FK@F;@@EC=: >F 9
J>=N;:;>= DC:D>9J:B

&4
1. F8 .8 2<=->.$-28 $2 >-B9 - lL reLroacLs Lo
Lhe day of Lhe consLlLuLlon of Lhe
obllgaLlon
2. F8 .8 2<=->.$-28 $2 :2 2# 82$ $2 :2 - Lhe
courL may deLermlne Lo whaL daLe
reLroacLlvlLy shall be allowed, or lL may
even refuse Lo permlL reLroacLlvlLy
!D2=98$-82) +-B-= +2:9 2H $I9 7I-=-@@-89/)
E2=% FE) 4664 9:) @%&((,

192
1$+$# #&7 ',&04

15 !"#$%&'$!() 7$'3 & H,-$!2

64 789: ;< 9= >?@;A9:;>= M;:8 9 OCD;>N >D 9 :CDEB

&4 lL ls an obllgaLlon whose demandablllLy or
exLlngulshmenL ls sub[ecL Lo Lhe explraLlon of a
perlod or a Lerm. !"#$% &&G5) *++,

64 789: 9DC :8C DCPK;<;:C< >F 9 I9@;N OCD;>N >D
:CDEB

&4
1. luLure
2. CerLaln
3. osslble, legally and physlcally

64 $< :8C <:9:CEC=: >F 9 NC?:>D :89: 8C M;@@ O9W
M8C= 8;< EC9=< OCDE;: 8;E :> N> <> DC@9:C :> 9
OCD;>N >D 9 J>=N;:;>=B $< <KJ8 9 <:9:CEC=: I9@;N
J>=<;NCD;=A :89: :8C <9EC ;< @CF: :> :8C M;@@ >F
:8C NC?:>DB

&4 When Lhe debLor blnds hlmself Lo pay when hls
means permlL hlm Lo do so, Lhe obllgaLlon ls
deemed wlLh a perlod or Lerm. 1hls ls valld
because lL ls noL Lhe paymenL lLself LhaL ls
dependenL upon Lhe wlll of Lhe debLor, buL Lhe
momenL of paymenL.

As Lhe Llme of paymenL ls noL flxed, Lhe courL
musL flx Lhe same before any acLlon for collecLlon
may be enLerLalned, A8=9//, Lhe prlor acLlon of
flxlng Lhe Lerm or perlod wlll only be a formallLy
and wlll serve no purpose buL delay.

64 />D M8><C ?C=CF;: ;< :8C OCD;>N J>=<:;:K:CNB

&4
%-4 When a perlod has been agreed upon for
Lhe performance or fulflllmenL of an
obllgaLlon, lL ls presumed Lo have been
esLabllshed for Lhe beneflL of boLh Lhe
credlLor and Lhe debLor.

SH(4 When lL appears from Lhe Lenor of Lhe
perlod or oLher clrcumsLances LhaL lL was
esLabllshed for Lhe beneflL of one of Lhe
parLles.

64 789: ;< :8C CFFCJ: >F :8C :CDE ?C;=A F>D :8C
?C=CF;: >F C;:8CD :8C 1- >D :8C 2-B

&4
1. ZI98 -$ -/ H2# $I9 <989H-$ 2H $I9 +#9:-$2#
NCredlLor may demand Lhe
performance of Lhe obllgaLlon aL any
Llme buL Lhe u8 cannoL compel hlm Lo
accepL paymenL before Lhe explraLlon
of Lhe perlod (9%>% on demand")
2. ZI98 -$ -/ H2# $I9 <989H-$ 2H $I9 \9<$2#
N
uebLor may oppose any premaLure
demand on Lhe parL of Lhe C8 for
performance of Lhe obllgaLlon, or lf he
so deslres, he may renounce Lhe beneflL
of Lhe perlod by performlng hls
obllgaLlon ln advance. !Y.8#9/.,

64 789: ;< :8C CFFCJ: >F 9 F>D:K;:>K< CIC=: ;= 9=
>?@;A9:;>= M;:8 9 OCD;>NB

&4 lL only relleves Lhe conLracLlng parLles from Lhe
fulflllmenL of Lhelr respecLlve obllgaLlon durlng
Lhe Lerm or perlod.

64 78C= E9W :8C J>KD: F;T :8C OCD;>NB

&4
1. lf Lhe obllgaLlon does noL flx a perlod,
buL from lLs naLure and clrcumsLances lL
can be lnferred LhaL a perlod was
lnLended by Lhe parLles
2. lf Lhe duraLlon of Lhe perlod depends
upon Lhe wlll of Lhe u8
3. ln case of reclprocal obllgaLlons, when
Lhere ls a [usL cause for flxlng Lhe perlod
4. lf Lhe u8 blnds hlmself when hls means
permlL hlm Lo do so

!"#$%&'$!()

64 78C= E9W 9 NC?:>D @><C 8;< D;A8: :> E9RC K<C
>F :8C OCD;>NB

&4
1. lnsolvency of Lhe u8, unless securlLy ls
provlded
2. uld noL dellver securlLy promlsed
3. lmpalred securlLy Lhrough hls own acLs
or Lhrough forLulLous evenL, unless he
glves a new securlLy equally saLlsfacLory
(lf lmpalrmenL ls wlLhouL Lhe faulL of
u8, he shall reLaln Lhe rlghL)
4. vlolaLes underLaklng ln conslderaLlon of
exLenslon of perlod
3. u8 aLLempLs Lo abscond !"#$% &&GK)
*++,

19S
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
25 &#',-(&'$+, !"#$%&'$!(

64 2;<:;=AK;<8 F9JK@:9:;IC FD>E 9@:CD=9:;IC
>?@;A9:;>=<5

&4
/&1*#'&'$+,
!"#$%&'$!()
&#',-(&'$+,
!"#$%&'$!()
lorLulLous loss exLlngulshes
Lhe obllgaLlon
lorLulLous loss of all
presLaLlon wlll 82$
exLlngulsh Lhe obllgaLlon
Culpable loss obllges Lhe
debLor Lo dellver subsLlLuLe
presLaLlon wlLhouL llablllLy
Lo debLor
Culpable loss of
any ob[ecL due wlll glve
rlse Lo llablllLy Lo debLor
Cholce perLalns only Lo
debLor
%-4 Cholce perLaln Lo
debLor

SH(4 Lxpressly granLed
Lo credlLor or Lhlrd
person
Cnly one ob[ecL ls due Several ob[ecLs are due
May be complled wlLh by
subsLlLuLlon of one LhaL ls
due
May be complled wlLh
by fulfllllng any of Lhose
alLernaLely due
lf prlnclpal obllgaLlon ls
vold, Lhe credlLor cannoL
compel dellvery of Lhe
subsLlLuLe
lf one presLaLlon ls vold,
Lhe oLhers free from
vlces preserve Lhe
valldlLy of Lhe obllgaLlon
lf Lhere ls lmposslblllLy Lo
dellver Lhe prlnclpal Lhlng or
presLaLlon, Lhe obllgaLlon ls
exLlngulshed, even lf Lhe
subsLlLuLe obllgaLlon ls valld
lf varlous presLaLlons are
lmposslble Lo perform
excepL one, Lhls one
musL be dellvered.
lf all presLaLlons are
lmposslble Lo perform,
Lhe obllgaLlon ls
exLlngulshed
Loss of subsLlLuLe before
Lhe subsLlLuLlon Lhrough Lhe
faulL of Lhe debLor doesn'L
make hlm llable

Where Lhe cholce ls
glven Lo Lhe credlLor, Lhe
loss of Lhe alLernaLlve
Lhrough Lhe faulL of Lhe
debLor renders hlm
llable for damages
64 $= 9@:CD=9:;IC >?@;A9:;>=<X M8C= N>C< :8C
J8>;JC E9NC :9RC CFFCJ:B

&4 1he cholce made Lakes effecL only upon
communlcaLlon of Lhe cholce Lo Lhe oLher parLy
and from such Llme Lhe obllgaLlon ceases Lo be
alLernaLlve !"#$% &46') *++,%

(>:C4 1he noLlce of selecLlon or cholce may be ln any
form provlded lL ls sufflclenL Lo make Lhe oLher parLy
know LhaL Lhe elecLlon has been made. !D2=98$-82)
+-B-= +2:9 2H $I9 7I-=-@@-89/) 4664 9:) @% 46',

64 2>C< :8C J8>;JC E9NC ?W :8C 2- DCPK;DC :8C
J>=JKDDC=JC >F :8C 1-B 789: 89OOC=< M8C=
:8D>KA8 :8C 1-Y< F9K@:X <C@CJ:;>= ;< NCCECN
;EO><<;?@CB

&4 no. 1o hold oLherwlse would desLroy Lhe very
naLure of Lhe rlghL Lo selecL glven Lo Lhe u8. Cnce
a cholce ls made, lL can no longer be renounced
and Lhe parLles are bound LhereLo.

When cholce ls rendered lmposslble Lhrough Lhe
C8's faulL, Lhe u8 may brlng an acLlon Lo resclnd
Lhe conLracL wlLh damages !"#$% &465) *++,.

64 789: 9DC :8C @;E;:9:;>=< >= :8C D;A8: >F
J8>;JC >F :8C NC?:>DB

&4 uebLor cannoL choose presLaLlons whlch are:
1. lmposslble,
2. unlawful, and
3. could noL have been Lhe ob[ecL of Lhe
obllgaLlon.

64 78C= ;< 9= 9@:CD=9:;IC >?@;A9:;>= J>=ICD:CN
:> 9 <;EO@C >?@;A9:;>=B

&4 When:
1. Lhe person who has a rlghL of cholce has
communlcaLed hls cholce, or
2. only one ls pracLlcable. !"#$% &464) *++,

+)' %!#,-( (!'-) ./00

64 789: 9DC :8C CFFCJ:< >F @><< >F >?LCJ:< >F
9@:CD=9:;IC >?@;A9:;>=/ +) F&3+),
"00 -,&
0)/+
u8 released
from Lhe
obllgaLlon
C8 shall have a rlghL
Lo lndemnlfy for
damages based on
Lhe value of Lhe lasL
Lhlng whlch
dlsappeared/servlce
whlch become
lmposslble
=)4&
3.+ *)+
-00 -,&
0)/+
u8 shall dellver
LhaL whlch he
shall choose
from among
Lhe remalnder
u8 shall dellver LhaL
whlch he shall choose
from among Lhe
remalnder wlLhouL
damages
$*0:
)*&
,&4-1*/
uellver LhaL whlch remalns

%8)1(& H&0)*>/ +) %,&21+),
"00 -,&
0)/+
u8 released
from Lhe
obllgaLlon
C8 may clalm Lhe
prlce/value of any of
Lhem wlLh lndemnlLy
for damages
=)4&
3.+ *)+
-00 -,&
0)/+
u8 shall dellver
LhaL whlch he
shall choose
from among
Lhe remalnder
C8 may clalm any of
Lhose subslsLlng
wlLhouL a rlghL Lo
damages C8
prlce/value of one of
Lhose losL wlLh rlghL
Lo damages
$*0:
)*&
,&4-1*/
uellver LhaL whlch remalns. ln case of
faulL of u8, C8 has a rlghL Lo lndemnlLy
for damages

+$$$5 G!$(' &(2 )!#$2&-. !"#$%&'$!()

64 789: 9DC L>;=: >?@;A9:;>=@;N9DW >?@;A9:;>=<B

&4 lL ls where each of Lhe debLors obllges Lo pay
Lhe enLlre obllgaLlon, and where each one of Lhe
credlLors has Lhe rlghL Lo demand from any of Lhe
debLors, Lhe paymenL or fulflllmenL of Lhe enLlre
obllgaLlon !"#$% &46J) *++T 7-89:.) ;<=->.$-28/
.8: +28$#.?$/) 4666 9:) @% &5G,.

64 2;<:;=AK;<8 L>;=: FD>E <>@;N9DW >?@;A9:;>=5

&4
G!$(' !"#$%&'$!( )!#$2&-. !"#$%&'$!(
resumed by law
noL presumed. MusL be
expressly sLlpulaLed by
Lhe parLles, or when Lhe
law or Lhe naLure of Lhe
obllgaLlon requlres
solldarlLy. !"#$% &46J)
*++,
Lach debLor ls llable only
for a proporLlonaLe parL
of Lhe enLlre debL
Lach debLor ls obllged Lo
pay Lhe enLlre obllgaLlon
Lach credlLor, lf Lhere are
several, ls enLlLled only
Lo a proporLlonaLe parL
of Lhe credlL
Lach credlLor has Lhe
rlghL Lo demand from
any of Lhe debLors, Lhe
paymenL or fulflllmenL of
Lhe enLlre obllgaLlon
!D2=98$-82) +-B-= +2:9E2=
FE) &GGG 9:% @% 4&J,

64 789: ;< :8C DK@C 9< DCA9DN< :8C L>;=: >D
<>@;N9DW J89D9J:CD >F 9= >?@;A9:;>=B

&4
%-4 When Lwo or more credlLors or Lwo or
more debLors concur ln one and Lhe same
obllgaLlon, Lhe presumpLlon ls LhaL Lhe
obllgaLlon ls C2-8$%

SH(<4 1he obllgaLlon shall be solldary when:
,#(1G
1. 9xpressly sLlpulaLed LhaL Lhere ls
solldarlLy,
2. Eaw requlres solldarlLy,
3. CaLure of Lhe obllgaLlon requlres
solldarlLy,
4. 1harge or (ondlLlon ls lmposed upon
helrs or legaLees and Lhe wlll expressly
makes Lhe charge or condlLlon -8
/2=-:A1 !Y.8#9/.,, or
3. solldary responslblllLy ls lmpuLed by a
flnal !udgmenL upon several
defendanLs.!SA$-9##9] B% SA$-9##9]) '(
7I-= &JJ,

64 18K9 ?>KA8: 9=N ;EO>D:CN :> :8C H8;@;OO;=C<
N;J9@J;KE O8><O89:C5 78C= :8C J9DA> 9DD;ICN 9:
:8C H>D: >F 09=;@9X ;: M9< N;<J>ICDCN :89: <>EC
MCDC ;= 9OO9DC=: ?9N J>=N;:;>=5 '8K<X 18K9 F;@CN
M;:8 )E;:8X "C@@X 9=N 1>5X $=J5X :8C J@9;E 9AC=: >F
/;D<: $=<KD9=JC 1>5X 9 F>DE9@ <:9:CEC=: >F J@9;E
F>D :8C @><<5 (> <C::@CEC=: >F :8C J@9;E 89I;=A
?CC= E9NCX 18K9 :8C= F;@CN 9= 9J:;>=5 $< )E;:8X
"C@@X 9=N 1>5X <>@;N9D;@W @;9?@C KO>= 9 E9D;=C
;=<KD9=JC O>@;JW M;:8 ;:< N;<J@><CN F>DC;A=
OD;=J;O9@B

!"#$%&'$!()

&4 no. ArLlcle 1207 of Lhe Clvll Code clearly
provldes LhaL "Lhere ls a solldary llablllLy only
when Lhe obllgaLlon expressly so sLaLes, or when
Lhe law or Lhe naLure of Lhe obllgaLlon requlres
solldarlLy." 1he wellenLrenched rule ls LhaL
solldary obllgaLlon cannoL llghLly be lnferred. lL
musL be poslLlvely and clearly expressed. !L1-$I)
V9== ^ +2%) F8?% B% +") S%0% *2% &&6((K) `9<% ()
&GGJ,
19S
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL

64 '8C @9?>D 9D?;:CD DC=NCDCN 9 NCJ;<;>=X :8C
;-00) >F M8;J8 <:9:C< :89: :8C F>@@>M;=A
DC<O>=NC=:< 9< @;9?@CX =9EC@W4 /101X );J9:X
%>=k9@C<X 18;K 18;= %;=X #> QK9= 18;=X 9=N
$($0&1!5 $($0&1! PKC<:;>=< :8C CTCJK:;>=X
9@@CA;=A :89: :8C 9@;9< MD;: >F CTCJK:;>= 9@:CDCN
9=N J89=ACN :8C :C=>D >F :8C NCJ;<;>= ?W
J89=A;=A :8C;D @;9?;@;:W FD>E L>;=: :> <>@;N9DWX ?W
:8C ;=<CD:;>= >F :8C M>DN< l&(2m!-l5 $< :8C
@;9?;@;:W >F $($0&1! OKD<K9=: :> :8C NCJ;<;>= >F
:8C @9?>D 9D?;:CD <>@;N9DW >D =>:B

&4 lnlMACC's llablllLy ls noL solldary buL merely
[olnL. WellenLrenched ls Lhe rule LhaL solldary
obllgaLlon cannoL llghLly be lnferred. 1here ls a
solldary llablllLy only when Lhe obllgaLlon
expressly so sLaLes, when Lhe law so provldes or
when Lhe naLure of Lhe obllgaLlon so requlres. ln
Lhe dlsposlLlve porLlon of Lhe labor arblLer, Lhe
word "solldary" does noL appear. 1he sald H.==2
expressly sLaLes Lhe followlng respondenLs
Lhereln as llable, namely: llllplnas Carbon Mlnlng
CorporaLlon, SlcaL, Conzales, Chlu Chln Cln, Lo
kuan Chln, and lnlMACC. nor can lL be lnferred
Lherefrom LhaL Lhe llablllLy of Lhe slx respondenLs
ln Lhe case below ls solldary, Lhus Lhelr llablllLy
should merely be [olnL.!F*FY"+; B% *X0+)S%0% *2%
&6&J45) Y.M &&) 4666,

&5 G!$(' !"#$%&'$!()

64 789: 9DC :8C @CA9@ J>=<CPKC=JC< ;F :8C
>?@;A9:;>= ;< L>;=:B

&4
1. Lach debLor ls llable only for a
proporLlonaLe parL of Lhe enLlre debL,
2. Lach credlLor, lf Lhere are several, ls
enLlLled only Lo a proporLlonaLe parL of
Lhe credlL,
3. 1he demand made by one credlLor upon
one debLor, produces effecLs of defaulL
only as beLween Lhem,
4. lnLerrupLlon of prescrlpLlon caused by
Lhe demand made by one credlLor upon
one debLor, wlll nC1 beneflL Lhe co
credlLors or Lhe codebLors,
3. lnsolvency of a debLor wlll noL lncrease
Lhe llablllLy of hls codebLors,
6. vlces of each obllgaLlon emanaLlng from
a parLlcular debLor or credlLor wlll noL
affecL Lhe oLhers, and
7. ln lndlvlslble or [olnL obllgaLlon, Lhe
defense of #9/ CA:-?.$. of one does noL
exLend Lo Lhe oLhers.

"5 G!$(' $(2$+$)$"#, !"#$%&'$!()

64 789: 9DC :8C N;FFCDC=: OCDEK:9:;>=< >F L>;=:
;=N;I;<;?@C >?@;A9:;>=<B 789: 9DC :8C;D CFFCJ:<B

&4
1. lf Lhere are Lwo or more debLors,
compllance wlLh Lhe obllgaLlon requlres
Lhe concurrence of all Lhe debLors,
alLhough each for hls own share. 1he
obllgaLlon can be enforced only by
precedlng agalnsL all of Lhe debLors.
2. lf Lhere are Lwo or more credlLors, Lhe
concurrence or collecLlve acL of all Lhe
credlLors, alLhough each of hls own
share, ls also necessary for Lhe
enforcemenL of Lhe obllgaLlon.
3. Lach credlL ls dlsLlncL from one anoLher,
Lherefore a [olnL debLor cannoL be
requlred Lo pay for Lhe share of anoLher
wlLh debLor, alLhough he may pay lf he
wanLs Lo.
4. ln case of lnsolvency of one of Lhe
debLors, Lhe oLhers shall noL be llable
for hls shares. 1o hold oLherwlse would
desLroy Lhe [olnL characLer of Lhe
obllgaLlon.

64 789: ;< :8C CFFCJ: >F ?DC9J8 >F 9 L>;=:
;=N;I;<;?@C >?@;A9:;>= ?W >=C NC?:>DB

&4 lf one of Lhe [olnL debLors falls Lo comply wlLh
hls underLaklng, Lhe obllgaLlon can no longer be
fulfllled or performed. lL ls Lhe converLed lnLo one
of lndemnlLy for damages. lnnocenL [olnL u8 shall
noL conLrlbuLe Lo Lhe lndemnlLy beyond Lhelr
correspondlng share of Lhe obllgaLlon.

15 )!#$2&-. !"#$%&'$!()

64 789: ;< :8C CFFCJ: >F <>@;N9DW >?@;A9:;>=B

&4 Lach one of Lhe debLors ls obllged Lo pay Lhe
enLlre obllgaLlon, and each one of Lhe credlLors
has Lhe rlghL Lo demand from any of Lhe debLors
Lhe paymenL or fulflllmenL of Lhe enLlre obllgaLlon

+)' %!#,-( (!'-) ./00

64 G>CWX G>IW 9=N G>L> 9DC <>@;N9DW NC?:>D< K=NCD
9 @>9= >?@;A9:;>= >F HbiiX iii5ii M8;J8 89<
F9@@C= NKC5 '8C JDCN;:>D 89<X 8>MCICDX J>=N>=CN
G>L>d< C=:;DC <89DC ;= :8C NC?:5 );=JC G>IW 89<
?CJ>EC ;=<>@IC=:X :8C JDCN;:>D E9RC< 9 NCE9=N
>= G>CW :> O9W :8C NC?:5

Z5 3>M EKJ8X ;F 9=WX E9W G>CW ?C
J>EOC@@CN :> O9WB
`5 '> M89: CT:C=:X ;F 9: 9@@X J9= G>L> ?C
J>EOC@@CN ?W G>CW :> J>=:D;?K:C :>
<KJ8 O9WEC=:B

&4
1. !oey can be compelled Lo pay only Lhe
remalnlng balance of 200,000, ln vlew
of Lhe remlsslon of !o[o's share by Lhe
credlLor. !"#$% &4&G) *++,
2. !o[o can be compelled by !oey Lo
conLrlbuLe 30,000. When one of Lhe
solldary debLors cannoL, because of hls
lnsolvency, relmburse hls share Lo Lhe
debLor paylng Lhe obllgaLlon, such share
shall be borne by all hls codebLors, ln
proporLlon Lo Lhe debL of each.!@.#% 5)
"#$% &4&J) *++,
Slnce Lhe lnsolvenL debLor's share whlch !oey
pald was l00,000, and Lhere are only Lwo
remalnlng debLors namely !oey and !o[o
Lhese Lwo shall share equally Lhe burden of
relmbursemenL. !o[o may Lhus be compelled
by !oey Lo conLrlbuLe 30,000. aZ[[_ "9D
6KC<:;>=c

64 789: 9DC :8C R;=N< >F <>@;N9DW >?@;A9:;>=B

&4
1. 7.//-B9 N solldarlLy on Lhe parL of Lhe
debLors
2. "?$-B9 N solldarlLy on Lhe parL of Lhe
credlLors
3. Y-P9: N solldarlLy on boLh sldes

64 2;<:;=AK;<8 <>@;N9D;:W FD>E ;=N;I;<;?;@;:W5

&4
196
1$+$# #&7 ',&04

$(2$+$)$"$#$'. )!#$2&-$'.
8efers Lo Lhe presLaLlon
or ob[ecL of Lhe conLracL
8efers Lo Lhe vlnculum
exlsLlng beLween Lhe
sub[ecLs or parLles
uoes noL requlre
plurallLy of sub[ecLs or
parLles
8equlres Lhe plurallLy of
parLles or sub[ecLs
ln case of breach, lL ls
converLed Lo one of
lndemnlLy for damages
and Lhe lndlvlslblllLy of
Lhe obllgaLlon ls
LermlnaLed
ln case of breach, Lhe
llablllLy of Lhe solldary
debLors for damages
remalns solldary
64 789: 9DC :8C DK@C< ;= 9 <>@;N9DW >?@;A9:;>=B

&4
1. Anyone of Lhe solldary credlLors may
collecL or demand paymenL of whole
obllgaLlon, Lhere ls muLual agency among
solldary debLors (ArLs. 1214, 1213)
2. Any of Lhe solldary debLor may be
requlred Lo pay Lhe whole obllgaLlon, Lhere
ls muLual guaranLy among solldary debLors
(ArLs. 1216, 1217, 1222)
3. Lach one of solldary credlLors may do
whaLever maybe useful Lo Lhe oLhers, buL
noL anyLhlng pre[udlclal Lo Lhem (ArL. 1212),
however, any novaLlon, compensaLlon,
confuslon or remlsslon of debL execuLed by
any solldary credlLor shall exLlngulsh Lhe
obllgaLlon wlLhouL pre[udlce Lo hls llablllLy
for Lhe shares of Lhe oLher solldary credlLors.
64 $= J9<C< >F <>@;N9DW JDCN;:>D<X E9W >=C 9J: F>D
9@@B 789: 9DC :8C @;E;:9:;>=<B

&4 ?es. Powever, whlle each one of Lhe solldary
credlLors may execuLe acLs whlch may be useful
or beneflclal Lo Lhe oLhers, he may noL do
anyLhlng whlch may be pre[udlclal Lo Lhem. !"#$%
&4&4) *++,

(>:C4 re[udlclal acLs may sLlll have valld legal
effecLs, buL Lhe performlng credlLor shall be llable Lo
hls cocredlLors. !7-89:.) ;<=->.$-28/ .8: +28$#.?$/)
4666 9:) @% &'J,

64 789: 9DC :8C CFFCJ:< >F 9<<;A=EC=: >F D;A8:<
;= 9 <>@;N9DW >?@;A9:;>=B

&4
%-4 Solldary credlLor cannoL asslgn hls rlghL
because lL ls predlcaLed upon muLual
confldence, meanlng personal quallflcaLlon of
each credlLor had been Laken lnLo
conslderaLlon when Lhe obllgaLlon was
consLlLuLed. !"#$% &4&5) *++,

SH(<4
1. AsslgnmenL Lo cocredlLor, or
2. AsslgnmenL ls wlLh consenL of co
credlLor.

!"#$%&'$!()

64 '> M8>E EK<: O9WEC=: ?C E9NC ;= 9
<>@;N9DW >?@;A9:;>=B

197
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
&4
%-4 1o any of Lhe solldary credlLors.

SH(4 lf demand, [udlclal or exLra[udlclal, has
been made by one of Lhem, paymenL should
be made Lo hlm.!"#$% &4&3) *++,

25 2$+$)$"#, &(2 $(2$+$)$"#, !"#$%&'$!()

64 789: ;< :8C OD;E9DW N;<:;=J:;>= ?C:MCC=
N;I;<;?@C 9=N ;=N;I;<;?@C >?@;A9:;>=<B

&4
2$+$)$"#, $(2$+$)$"#,
SuscepLlblllLy of an
obllgaLlon Lo be
performed parLlally
nonsuscepLlblllLy Lo be
performed parLlally
arLlal performance ls
LanLamounL Lo non
performance

64 789: ;< :8C :DKC :C<: ;= NC:CDE;=;=A
N;I;<;?;@;:WB

&4 WheLher or noL Lhe presLaLlon ls suscepLlble of
parLlal performance, noL ln Lhe sense of
performance ln separaLe or dlvlded parLs, buL ln
Lhe sense of Lhe posslblllLy of reallzlng Lhe
purpose whlch Lhe obllgaLlon seeks Lo obLaln. lf a
Lhlng could be dlvlded lnLo parLs and as dlvlded,
lLs value ls lmpalred dlsproporLlonaLely, LhaL Lhlng
ls lndlvlslble. !7-89:.) ;<=->.$-28/ .8: +28$#.?$/)
4666 9:) @% &J3,

64 78C= E9W 9= >?@;A9:;>= :> NC@;ICD 9 2151/130&
+81*> ?C J>=<;NCDCN ;=N;I;<;?@CB

&4
1. When Lhe law so provldes, or
2. 8y sLlpulaLlon of Lhe parLles.!5
#:
@.#%)
"#$% &4'') *++,

64 789: ;< :8C CFFCJ: >F ;@@CA9@;:W >F 9 O9D: >F 9
J>=:D9J:B

&4
1. \-B-/-<=9 ?28$#.?$ - lllegal parL ls vold
and unenforceable. Legal parL ls valld
and enforceable. !"#$% &346) *++,
2. F8:-B-/-<=9 ?28$#.?$ - enLlre conLracL ls
lndlvlslble and unenforceable.

64 789: ;< :8C CFFCJ: >F O9D:;9@ OCDF>DE9=JC ;=
;=N;I;<;?@C >?@;A9:;>=B

&4 lL ls LanLamounL Lo nonperformance. !7-89:.)
;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @% &JG,

,5 !"#$%&'$!() 7$'3 & H,(&# 1#&*),

64 789: ;< 9 OC=9@ J@9K<CB

&4 lL ls an accessory obllgaLlon aLLached Lo Lhe
prlnclpal obllgaLlon Lo assure greaLer
responslblllLy ln case of breach.

(>:C4 roof of acLual damages suffered by Lhe
credlLor ls noL necessary ln order LhaL Lhe penalLy
may be demanded. ("#$% &44K) *++)

64 789: ;< :8C CFFCJ: >F ;=J>DO>D9:;=A 9 OC=9@
J@9K<C ;= 9= >?@;A9:;>=B

&4
%-4 1he penalLy flxed by Lhe parLles ls a
compensaLlon or subsLlLuLe for damages ln
case of breach.

SH(<4 uamages shall sLlll be pald even lf Lhere
ls a penal clause lf:
1. Lhere ls a sLlpulaLlon Lo Lhe conLrary
2. Lhe debLor refuses Lo pay Lhe agreed
penalLy
3. Lhe debLor ls gullLy of fraud ln Lhe
fulflllmenL of Lhe obllgaLlon. !"#$% &&4()
*++,
(>:C41he nulllLy of Lhe penal clause does noL carry
wlLh lL LhaL of Lhe prlnclpal obllgaLlon.
1he nulllLy of Lhe prlnclpal obllgaLlon carrles wlLh lL
LhaL of Lhe penal clause. ("#$% &456) *++)

64 78C= E9W 6&*-0+: ?C DCNKJCN ?W :8C J>KD:<B

&4 H$*
1. HarLlal performance of Lhe obllgaLlon,
2. $rregular performance of Lhe obllgaLlon,
or
3. enalLy ls *nconsclonable even lf Lhere
has been no performance.

+)' %!#,-( (!'-) ./00

$S5 ,S'$(%*$)30,(' !/ !"#$%&'$!()

64 789: 9DC :8C E>NC< >F CT:;=AK;<8EC=: >F 9=
>?@;A9:;>=B

&4
1. aymenL or performance
2. Loss of Lhe Lhlng due
3. CondonaLlon or remlsslon of debL
4. Confuslon or merger
3. CompensaLlon
6. novaLlon
7. AnnulmenL
8. 8esclsslon
9. lulflllmenL of a resoluLory condlLlon
10. rescrlpLlon!"#$% &45&) *++,

(>:C4 1he enumeraLlon ls noL excluslve.

0*'*&# 2,)$)'&(1,

64 $F :8C O9D:;C< EK:K9@@W N;<9ADCC 9< DCA9DN< :8C
>?@;A9:;>=X E9W ;: ?C J9=JC@@CNB

&4 ?es. 1haL ls ln Lhe naLure of muLual
deslsLance" - whlch ls a mode of exLlngulshlng
obllgaLlons. lL ls a concepL LhaL derlves from Lhe
prlnclple LhaL slnce muLual agreemenL can creaLe
a conLracL, muLual dlsagreemenL by Lhe parLles
can cause lLs exLlngulshmenL.!L.A#. B%
\9B9=2@198$ V.8_ 2H $I9 7I-=/%) S%0% *2% 43G(K)
"@#% 4J) &GJ4,

198
1$+$# #&7 ',&04

&5 H&.0,(' !- H,-/!-0&(1,

64 $< :8C :CDE UO9WEC=:XV 9< K<CN ;= :8C 1>NCX
@;E;:CN :> 9OODCJ;9?@C <KE< >F E>=CWB

&4no. 7.M198$ may conslsL noL only ln Lhe
dellvery of money buL also Lhe glvlng of a Lhlng
(oLher Lhan money), Lhe dolng of an acL, or noL
dolng of an acL.

64 789: ;< :C=NCD >F O9WEC=:B

&4 D98:9# 2H @.M198$ ls Lhe deflnlLlve acL of
offerlng Lhe credlLor whaL ls due hlm or her,
LogeLher wlLh Lhe demand LhaL Lhe credlLor
accepL Lhe same.

(>:C4 1here musL be a fuslon of -8$98$) .<-=-$M and
?.@.<-=-$M Lo make good such offer, whlch musL be
absoluLe and musL cover Lhe amounL due. !ÒVD+ B%
\-.] 09.=$M F8?%) S%0% *2% &5K'KK) "A>% 45) 466&,

64 $< :8C JDCN;:>D ?>K=N :> 9JJCO: O9WEC=: >D
OCDF>DE9=JC ?W 9 :8;DN OCD<>=B
&4
%-4 no, Lhe credlLor ls noL.

SH(<4
1. When made by a Lhlrd person who has
lnLeresL ln Lhe fulflllmenL of Lhe
obllgaLlon
2. ConLrary sLlpulaLlon

64 789: 9DC :8C D;A8:< >F 9 :8;DN OCD<>= M8>
O9;N :8C NC?:B

&4
1. Z-$I _82R=9:>9 .8: ?28/98$ 2H $I9
:9<$2#d
a. can recover enLlre amounL pald
(absoluLe relmbursemenL )
b. can be subrogaLed Lo all rlghLs of
Lhe credlLor
2. Z-$I2A$ _82R=9:>9 2# .>.-8/$ $I9 R-==
2H $I9 debLor - can recover only lnsofar
as paymenL has been beneflclal Lo Lhe
debLor (rlghL of condlLlonal
relmbursemenL )

(!',4 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. !"#$%
&45K) *++,

64 ):9:C :8C DCPK;<;:C< >F 9 I9@;N O9WEC=:5

&4 11H&2
1. 1apaclLy of Lhe payor
2. 1apaclLy of Lhe payee
3. HroprleLy of Lhe Llme, place, manner of
paymenL
4. &ccepLance by Lhe credlLor
3. 2ellvery of Lhe full amounL or Lhe full
performance of Lhe presLaLlon

64 789: 9DC :8C J89D9J:CD;<:;J< >F O9WEC=:B

&4
1. lnLegrlLy,
2. ldenLlLy, and
3. lndlvlslblllLy.

!"#$%&'$!()

$(',%-$'.

64 3>M <8>K@N OCDF>DE9=JC ?C E9NCB

&4
%-4 erformance should always be ln full.

SH(<4
1. SubsLanLlal performance performed ln
good falLh
2. CredlLor accepLs Lhe performance
knowlng lLs lncompleLeness or
lrregularlLy wlLhouL proLesL or ob[ecLlon
3. uebL ls parLly llquldaLed and parLly
unllquldaLed, buL Lhe llquldaLed parL of
Lhe debL musL be pald ln full

$2,('$'.

64 789: <8>K@N ?C A;IC= 9< O9WEC=: >F 9=
>?@;A9:;>=B

&4
%-4 1hlng pald musL be Lhe very Lhlng due and
cannoL be anoLher Lhlng 9B98 -H of same
quallLy and value.

SH(<4
1. uaLlon ln paymenL
2. novaLlon of Lhe obllgaLlon
3. CbllgaLlon ls faculLaLlve

$(2$+$)$"$#$'.

64 19= :8C NC?:>D >D JDCN;:>D ?C J>EOC@@CN :>
OCDF>DEm9JJCO: O9D:;9@ ODC<:9:;>=<B

&4
%-4 uebLor ?.882$ be compelled by Lhe
credlLor Lo perform obllgaLlon ln parLs and
nelLher can Lhe debLor compel Lhe credlLor Lo
accepL obllgaLlon ln parLs.

SH(<4 When:
1. parLlal performance has been agreed
upon
2. parL of Lhe obllgaLlon ls llquldaLed and
parL ls unllquldaLed
3. Lo requlre Lhe debLor Lo perform ln full
ls lmpracLlcal

199

64 $< :8C 9JJCO:9=JC ?W 9 JDCN;:>D >F 9 O9D:;9@
O9WEC=: 9= 9?9=N>=EC=: >F ;:< NCE9=N F>D FK@@
O9WEC=:B

&4 no. When credlLors recelve parLlal paymenL,
Lhey are noL -@/2 H.?$2 deemed Lo have
abandoned Lhelr prlor demand for full paymenL.

1o lmply LhaL credlLors accepL parLlal paymenL as
compleLe performance of Lhelr obllgaLlon, Lhelr
accepLance musL be made under clrcumsLances
LhaL lndlcaLe Lhelr lnLenLlon Lo conslder Lhe
performance compleLe and Lo renounce Lhelr
clalm arlslng from Lhe defecL.

(>:C4 Whlle ArLlcle 1248 of Lhe Clvll Code sLaLes LhaL
credlLors cannoL be compelled Lo accepL parLlal
paymenLs, lL does noL prohlblL Lhem from accepLlng
such paymenLs. !L9=9>8. Y.8.>9198$ .8:
\9B9=2@198$ +2#@% B% [+7V) S%0% *2% &('((4) Y.M
56) 466(,

64 '> M8>E O9WEC=: <8>K@N ?C E9NCB

&4 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. !"#$% &436,

64 $< O9WEC=: :> 9= K=9K:8>D;kCN OCD<>= 9 I9@;N
O9WEC=:B

&4
%-4 aymenL Lo an unauLhorlzed person ls 82$
a valld paymenL.

SH(<4
1. aymenL Lo an lncapaclLaLed person lf:
a. I9 _9@$ Lhe Lhlng dellvered, or
b. lL has been <989H-?-.= Lo hlm
2. aymenL Lo a Lhlrd person lnsofar as lL
redounded Lo Lhe beneflL of Lhe C8
3. aymenL ln good falLh Lo Lhe possessor
of credlL

* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
+)' %!#,-( (!'-) ./00

)H,1$&# /!-0) !/ H&.0,('

64 789: 9DC :8C <OCJ;9@ F>DE< >F O9WEC=:B

&4
2uu
1$+$# #&7 ',&04

1!(1,H'
F-+1)* 1* #-:4&*+
AllenaLlon by Lhe u8 of a parLlcular properLy ln favor
of hls C8, wlLh Lhe laLLer's consenL, for Lhe
saLlsfacLlon of Lhe former's money obllgaLlon Lo Lhe
laLLer, wlLh Lhe effecL of exLlngulshlng Lhe sald
money obllgaLlon !7-89:.) ;<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @% 4&4,
"6601(-+1)* ); #-:4&*+
ueslgnaLlon of Lhe parLlcular debL belng pald by Lhe
u8 who has Lwo or more debLs or obllgaLlons of Lhe
same klnd ln favor of Lhe same C8 Lo whom Lhe
paymenL ls made (7-89:.) ;<=->.$-28/ .8: +28$#.?$/)
4666 9:) @% 44G)
#-:4&*+ 3: %&//1)*
u8 cedes hls properLy Lo hls C8s so Lhe laLLer may
sell Lhe same and Lhe proceeds reallzed applled Lo
Lhe debLs of Lhe u8
@&*2&, ); #-:4&*+
volunLary acL of Lhe u8 whereby he offers Lo Lhe C8
for accepLance Lhe lmmedlaLe performance of Lhe
former's obllgaLlon Lo Lhe laLLer
%)*/1>*-+1)*
AcL of deposlLlng Lhe ob[ecL of Lhe obllgaLlon wlLh
Lhe courL or compeLenL auLhorlLy afLer Lhe C8 has
un[usLlflably refused Lo accepL Lhe same or ls noL ln a
poslLlon Lo accepL lL due Lo cerLaln reasons or
clrcumsLances

Z5 2&'$!( $( H&.0,('

64 789: N>C< N9:;>= ;= O9WEC=: >D 2-(1)* &*
6->) C=:9;@B

&4 \.?-28 98 @.>2 ls Lhe dellvery and
Lransmlsslon of ownershlp of a Lhlng by Lhe
debLor Lo Lhe credlLor as an accepLed equlvalenL
of Lhe performance of Lhe obllgaLlon. 1he
properLy glven may conslsL noL only of a Lhlng buL
also of a real rlghL. !D2=98$-82) +-B-= +2:9 2H $I9
7I-=-@@-89/) E2=% FE) 4664 9:) @% 4G5,

(>:C4 1he consenL of Lhe credlLor ls essenLlal.

lL ls a speclal mode of paymenL where Lhe debLor
offers anoLher Lhlng Lo Lhe credlLor who accepLs lL as
equlvalenL of paymenL of an ouLsLandlng debL.

1he underLaklng parLakes of Lhe naLure of sale, LhaL
ls, Lhe credlLor ls really buylng Lhe Lhlng or properLy
of Lhe debLor, paymenL for whlch ls Lo be charged
agalnsL Lhe debLor's debL.

As such, Lhe essenLlal elemenLs of a conLracL of sale,
namely, consenL, ob[ecL cerLaln, and cause or
conslderaLlon musL be presenL.

ln lLs modern concepL, whaL acLually Lakes place ln
:.?-28 98 @.>2 ls an ob[ecLlve novaLlon of Lhe
obllgaLlon where Lhe Lhlng offered as an accepLed
equlvalenL of Lhe performance of an obllgaLlon ls
consldered as Lhe ob[ecL of Lhe conLracL of sale,
whlle Lhe debL ls consldered as Lhe purchase prlce. ln
any case, common consenL ls an essenLlal
prerequlslLe, be lL sale or novaLlon, Lo have Lhe
effecL of LoLally exLlngulshlng Lhe debL or obllgaLlon.

64 #>OCk >?:9;=CN 9 @>9= ;= :8C 9E>K=: >F
HìXiii5ii FD>E :8C HDKNC=:;9@ "9=R5 3C
CTCJK:CN 9 <KDC:W ?>=N ;= M8;J8 8CX 9< OD;=J;O9@X
9=N H3$#&0%,( 9< <KDC:WX ?>K=N :8CE<C@IC<
L>;=:@W 9=N <CICD9@@W F>D :8C O9WEC=: >F :8C <KE5
3C 9@<> CTCJK:CN 9 NCCN >F 9<<;A=EC=: >F eXiii
<89DC< >F :8C "9AK;> 0;@;:9DW $=<:;:K:;>= ;= F9I>D
>F H3$#&0%,(5 $< :8C <:>JR 9<<;A=EC=: E9NC ?W
#>OCk N9:;>= ;= O9WEC=: >D O@CNACB

&4 1he sLock asslgnmenL consLlLuLes a pledge and
noL a :.?-28 98 @.>2. uaLlon ln paymenL ls Lhe
dellvery and Lransmlsslon of ownershlp of a Lhlng
by Lhe debLor Lo Lhe credlLor as an accepLed
equlvalenL of Lhe performance of Lhe obllgaLlon.
Lopez's loan has noL yeL maLured when he
"allenaLed" hls 4,000 shares of sLock Lo
hllamgen. Lopez's obllgaLlon would arlse only
when he would defaulL ln Lhe paymenL of Lhe
prlnclpal obllgaLlon whlch ls Lhe loan and
hllamgen had Lo pay for lL. Slnce lL ls conLrary Lo
Lhe naLure and concepL of daLlon ln paymenL, Lhe
same could noL have been consLlLuLed when Lhe
sLock asslgnmenL was execuLed. ln case of doubL
as Lo wheLher a LransacLlon ls a pledge or a daLlon
ln paymenL, Lhe presumpLlon ls ln favor of pledge,
Lhe laLLer belng Lhe lesser Lransmlsslon of rlghLs
and lnLeresLs. !X2@9] B% +")S%0% *2% X55&'J) WA89
4G) &GK4,

64 1C?K &<;9=J9D< $=J5X M;:8 :8C J>=F>DE;:W >F
:8C @C<<>DX K<CN :8C @C9<CN ODCE;<C< 9< 9
J>@@9:CD9@ :> <CJKDC O9WEC=: >F 9 @>9= M8;J8
&<;9=J9D< E9W >?:9;= FD>E 9=W ?9=RX OD>I;NCN
:89: :8C OD>JCCN< >F :8C @>9= <89@@ ?C K<CN <>@C@W
F>D :8C J>=<:DKJ:;>= >F 9 ?K;@N;=A M8;J8X KO>=
:8C :CDE;=9:;>= >F :8C @C9<C >D :8C I>@K=:9DW
<KDDC=NCD >F :8C @C9<CN ODCE;<C< ?CF>DC :8C
CTO;D9:;>= >F :8C J>=:D9J:X <89@@ 9K:>E9:;J9@@W
?CJ>EC :8C OD>OCD:W >F :8C @C<<>D5 0CC:;=A
F;=9=J;9@ N;FF;JK@:;C< 9=N ;=JKDD;=A 9= >K:<:9=N;=A
?9@9=JC >= :8C @>9=X &<;9=J9D< J>=ICWCN
>M=CD<8;O >F :8C ?K;@N;=A >= :8C @C9<CN
ODCE;<C< :> 0"'1X ?W M9W >F lN9J;>= C=

!"#$%&'$!()

O9A>5l$< :8C N9J;>= C= O9A> ?W &<;9=J9D< ;= F9I>D
>F 0"'1 I9@;NB

&4 ?es. M81C was a purchaser ln good falLh.
M81C had no knowledge of Lhe sLlpulaLlon ln Lhe
lease conLracL. AlLhough Lhe same lease was
reglsLered and duly annoLaLed, M81C was
charged wlLh consLrucLlve knowledge only of Lhe
facL of lease of Lhe land and noL of Lhe speclflc
provlslon sLlpulaLlng Lransfer of ownershlp of Lhe
bulldlng Lo Lhe !aymes upon LermlnaLlon of Lhe
lease. Whlle Lhe allenaLlon was ln vlolaLlon of Lhe
sLlpulaLlon ln Lhe lease conLracL beLween Lhe
!aymes and Aslancars, M81C's own rlghLs could
noL be pre[udlced by Aslancars' acLlons unknown
Lo M81C. 1hus, Lhe Lransfer of Lhe bulldlng ln
favor of M81C was valld and blndlng. !W.M19 B%
+") S%0% *2% &4K((G) ;?$% 3) 4664,

2u1
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
`5 /!-0 !/ H&.0,('

64 789: 9DC :8C DK@C< 9< DCA9DN< O9WEC=: ;=
E>=C:9DW >?@;A9:;>=<B

&4
1. 7.M198$ -8 ?./I- all moneLary
obllgaLlons shall be seLLled ln Lhe
hlllpplne currency whlch ls legal Lender
ln Lhe hlllpplnes. Powever, Lhe parLles
may agree LhaL Lhe obllgaLlons or
LransacLlons shall be seLLled ln any
oLher currency aL Lhe Llme of paymenL.
!L9?% &) 0%"% K&K5,

(>:C4 8.A. 8183 amended Lhe flrsL
paragraph of ArL. 1249 of Lhe Clvll Code,
buL Lhe resL of Lhe arLlcle remaln
subslsLlng. !7-89:.) ;<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @% 44&,

2. 7.M198$ -8 ?I9?_ 2# 2$I9# 89>2$-.<=9
-8/$#A198$ N noL consldered paymenL,
Lhey are noL consldered legal Lender
and may be refused by Lhe credlLor
9P?9@$ RI98d
a. Lhe documenL has been cashed, or
b. lL had been lmpalred Lhrough Lhe
faulL of Lhe credlLor.

H&.0,(' $( 1&)3

64 (>D:8MC<: &;D@;=C<X :8D>KA8 ;:< G9O9= "D9=J8X
C=:CDCN ;=:> 9= $=:CD=9:;>=9@ H9<<C=ACD )9@C<
&AC=JW &ADCCEC=: M;:8 1/ )89DOX 9K:8>D;k;=A
:8C @9::CD :> <C@@ ;:< 9;D :D9=<O>D: :;JRC:<5 1/ )89DO
F9;@CN :> DCE;: :8C OD>JCCN< >F :8C :;JRC: <9@C<X
:8K<X (>D:8MC<: &;D@;=C< F;@CN 9 J>@@CJ:;>= <K;:
?CF>DC :8C '>RW> 2;<:D;J: 1>KD: M8;J8 DC=NCDCN
LKNAEC=: >DNCD;=A 1/ )89DO :> O9W _bXZh_XZ[h
.C= 9=N N9E9AC< F>D :8C NC@9W 9: :8C D9:C >F ]j
OCD -**.4I *=9?@C :> CTCJK:C :8C NCJ;<;>= ;=
G9O9=X (>D:8MC<: &;D@;=C< F;@CN 9 J9<C :> C=F>DJC
<9;N F>DC;A= LKNAEC=: M;:8 :8C -'1 >F 09=;@95
789: ;< :8C D9:C >F CTJ89=AC :89: <8>K@N ?C
9OO@;CN F>D :8C O9WEC=: >F :8C 9E>K=:B

&4 1he repeal of 8.A. 329 by 8.A. 8183 has Lhe
effecL of removlng Lhe prohlblLlon on Lhe
sLlpulaLlon of currency oLher Lhan hlllpplne
currency, such LhaL obllgaLlons or LransacLlons
may now be pald ln Lhe currency agreed upon by
Lhe parLles. !usL llke 8.A. 329, however, Lhe new
law does noL provlde for Lhe appllcable raLe of
exchange for Lhe converslon of forelgn currency
lncurred obllgaLlons ln Lhelr peso equlvalenL. lL
follows, Lherefore, LhaL Lhe [urlsprudence
esLabllshed ln 8.A. 329 regardlng Lhe raLe of
converslon remalns appllcable. 1hus, ln "/-.
Z2#=: 09?#A-$198$) F8?% B% *.$-28.= X.<2#
09=.$-28/ +211-//-28) Lhe SC, applylng 8.A. 8183,
susLalned Lhe rullng of Lhe nL8C LhaL obllgaLlons
ln forelgn currency may be dlscharged ln
hlllpplne currency based on Lhe prevalllng raLe
.$ $I9 $-19 2H @.M198$. lL ls [usL and falr Lo
preserve Lhe real value of Lhe forelgn exchange
lncurred obllgaLlon Lo Lhe daLe of lLs paymenL.

$F :8C D9:C >F ;=:CDC<: ;< =>: <:;OK@9:CNX M89:
<8>K@N ?C :8C D9:C >F ;=:CDC<: :89: <8>K@N 9OO@WB
78C= <8>K@N :8C ;=:CDC<: ?CA;= :> DK=B

&4 ln O./$9#8 LI-@@-8> X-89/) F8?% B% +") lL was held
LhaL absenL any sLlpulaLlon, Lhe legal raLe of
lnLeresL ln obllgaLlons whlch conslsLs ln Lhe
paymenL of a sum of money ls 12 @9# .88A1 Lo
be reckoned from Lhe Llme of flllng of Lhe
complalnL Lhereln unLll Lhe sald forelgn [udgmenL
ls fully saLlsfled. !+%`% LI.#@ ^ +2%) F8?% B%
*2#$IR9/$ "-#=-89/) F8?%) S%0% *2% &553GK) "@#% &K)
4664,

H&.0,(' ". (,%!'$&"#, $()'-*0,('

64 2;9k n 1>EO9=W >?:9;=CN 9 @>9= FD>E H9J;F;J
"9=R;=A 1>DO M8;J8 M9< <CJKDCN ?W 9 DC9@ C<:9:C
E>D:A9AC >ICD :M> O9DJC@< >F @9=N >M=CN ?W :8C
O@9;=:;FF 2;9k -C9@:W5 &"1 DC=:CN 9= >FF;JC <O9JC
;= :8C ?K;@N;=A J>=<:DKJ:CN >= :8C OD>OCD:;C<
J>ICDCN ?W :8C E>D:A9AC J>=:D9J:5 '8C O9D:;C<
:8C= 9ADCCN :89: :8C E>=:8@W DC=:9@< <89@@ ?C
O9;N N;DCJ:@W :> :8C E>D:A9ACC F>D :8C @C<<>Dd<
9JJ>K=:X C;:8CD :> O9D:@W >D FK@@W O9W >FF :8C
9F>DC<9;N E>D:A9AC ;=NC?:CN=C<<5 '8CDC9F:CDX
/,"'1 OKDJ89<CN :8C JDCN;: >F 2;9k n 1>EO9=W
;= F9I>D >F H9"1X ?K: ;: M9< >=@W 9F:CD ` WC9D<
:89: 2;9k M9< ;=F>DECN 9?>K: ;:5 2;9k 9<RCN :8C
/,"'1 :> E9RC 9= 9JJ>K=:;=A >F :8C E>=:8@W

+)' %!#,-( (!'-) ./00

DC=:9@ O9WEC=:< E9NC ?W &@@;CN "9=R5 2;9k
:C=NCDCN :> /,"'1 :8C 9E>K=: >F HZXehiXiii5ii
:8D>KA8 9= $=:CD?9=R J8CJRX ;= >DNCD :> ODCIC=:
:8C ;EO><;:;>= >F 9NN;:;>=9@ ;=:CDC<:<X OC=9@:;C<
9=N <KDJ89DAC< >= ;:< @>9= ?K: /,"'1 N;N =>:
9JJCO: ;: 9< O9WEC=:X ;=<:C9NX 2;9k M9< 9<RCN :>
NCO><;: :8C 9E>K=: M;:8 :8C /,"'1Y< 29I9> 1;:W
"D9=J8 !FF;JC5 79< :8CDC 9 I9@;N :C=NCD >F
O9WEC=:B

&4 ?es. 1rue, [urlsprudence holds LhaL, ln general,
a check does noL consLlLuLe legal Lender, and LhaL
a credlLor may valldly refuse lL. lL musL be
emphaslzed, however, LhaL Lhls dlcLum does noL
prevenL a credlLor from accepLlng a check as
paymenL. ln oLher words, Lhe credlLor has Lhe
2@$-28 and Lhe :-/?#9$-28 of refuslng or accepLlng
lL. !ÒVD+ B% \-.] 09.=$M F8?%) S%0% *2% &5K'KK)
"A>% 45) 466&,

64 78> 89< :8C ?KDNC= >F OD>I;=A O9WEC=: ;= 9=
9J:;>= F>D <KE >F E>=CWB

&4 1he parLy who pleads paymenL as a defense has
Lhe burden of provlng LhaL such paymenL has, ln
facL, been made.

64 &DC DCJC;O:< :8C >=@W CI;NC=JC :89: J9= ?C
ODC<C=:CN :> OD>IC O9WEC=:B

&4 no. 8ecelpLs of paymenL, alLhough noL
excluslve, are deemed Lhe besL evldence of Lhe
facL of paymenL. !\9=. 79e. .8: E-==.#9.= B% +"
.8: 0A#.= V.8_ 2H V2=-8.2) F8?%) S%0% *2% &JJK4K)
`9<% &5) 466G

2u2
1$+$# #&7 ',&04

,S'-&!-2$(&-. $(/&#'$!( !- 2,/#&'$!(

64 789: ;< :8C DK@C ;= O9WEC=: ;= J9<C >F 9=
CT:D9>DN;=9DW ;=F@9:;>= >D NCF@9:;>=B

&4 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. ("#$% &4'6) *++)

64 2>C< :8C CTJ89=AC D9:C 9: :8C :;EC >F :8C
C<:9?@;<8EC=: >F :8C >?@;A9:;>= 9OO@W ;= 9@@
J9<C<B

&4 no. 1he rule LhaL Lhe value of Lhe currency aL
Lhe Llme of Lhe esLabllshmenL of Lhe obllgaLlon
shall be Lhe basls of paymenL flnds appllcaLlon
only when Lhere ls an offlclal pronouncemenL or
declaraLlon of Lhe exlsLence of an exLraordlnary
lnflaLlon or deflaLlon.
e5 &HH#$1&'$!( !/ H&.0,(')

64 789: N>C< :8C J>=JCO: >F 9OO@;J9:;>= >F
O9WEC=:< EC9=B

&4 lL ls Lhe deslgnaLlon of Lhe debL Lo whlch Lhe
paymenL musL be applled when Lhe debLor has
several obllgaLlons of Lhe same klnd ln favor of
Lhe same credlLor.

64 789: 9DC :8C DCPK;<;:C< >F 9OO@;J9:;>= >F
O9WEC=:<B

&4
1. Cne debLor and one credlLor
2. 1wo or more debLs of Lhe same klnd
3. AmounL pald by Lhe debLor musL noL be
sufflclenL Lo cover all debLs
4. uebLs are all due
3. arLles have noL agreed prevlously on
Lhe appllcaLlon

64 789: ;< :8C A>ICD=;=A DK@C ;= J9<C :8C NC?:>D
F9;@< :> 9<JCD:9;= M8;J8 NC?: 8;< O9WEC=: ;< :> ?C
9OO@;CNB

&4 1he cholce may be Lransferred Lo Lhe credlLor
as when Lhe debLor makes paymenL and does noL
make appllcaLlon and debLor accepLs a recelpL ln
whlch Lhe appllcaLlon ls made. ln such a case, Lhe
debLor cannoL complaln of Lhe appllcaLlon Lhe
credlLor has made unless Lhere be a cause for
lnvalldaLlng Lhe conLracL.

64 $F ?>:8 :8C JDCN;:>D 9=N :8C NC?:>D F9;@ :>
9OO@W O9WEC=:<X M89: DK@C A>ICD=.= .@@=-?.$-28 2H @.M198$ >overns whereln
Lhe law makes Lhe appllcaLlon.

1he paymenL should be applled Lo Lhe more
onerous debLs:
1. When a person ls bound as prlnclpal ln
one obllgaLlon and as sureLy ln anoLher,
Lhe former ls more onerous.
2. When Lhere are varlous debLs, Lhe
oldesL ones are more burdensome.
3. Where one bears lnLeresL and Lhe oLher
does noL, even lf Lhe laLLer ls Lhe older
obllgaLlon, Lhe former ls consldered
more onerous.
4. Where Lhere ls an encumbrance, Lhe
debL wlLh a guaranLy ls more onerous
Lhan LhaL wlLhouL securlLy.
3. WlLh respecL Lo lndemnlLy for damages,
Lhe debL whlch ls sub[ecL Lo Lhe general
rules on damages ls less burdensome

!"#$%&'$!()

Lhan LhaL ln whlch Lhere ls a penal
clause.
6. 1he llquldaLed debL ls more
burdensome Lhan Lhe unllquldaLed one.
7. An obllgaLlon ln whlch Lhe debLor ls ln
defaulL ls more onerous Lhan one ln
whlch he ls noL. !D2=98$-82) +-B-= +2:9 2H
$I9 7I-=-@@-89/) E2=% FE) 4664 9:) @% 5&3
5&',

(>:C4 lf Lhe debLs happen Lo be of same naLure and
burden, Lhe paymenL shall be applled
proporLlonaLely.

H&.0,(' ". 1,))$!(

64 789: 9DC :8C J;DJKE<:9=JC< CI;NC=J;=A
O9WEC=: ?W JC<<;>=B

&4 uebLor abandons all of hls properLy for Lhe
beneflL of hls credlLors ln order LhaL from Lhe
proceeds Lhereof, Lhe laLLer may obLaln paymenL
of credlLs.

(>:C4 lL presupposes lnsolvency of Lhe debLor. All
Lhe debLor's credlLors musL be lnvolved and Lhe
consenL of Lhe laLLer musL be obLalned.

64 789: 9DC :8C N;FFCDC=JC ?C:MCC= 29:;>= ;=
H9WEC=: 9=N H9WEC=: ;= 1C<<;>=B

&4
2uS
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
2&'$!( $( H&.0,(' H&.0,(' $( 1,))$!(
Maybe one credlLor lurallLy of credlLors
noL necessarlly ln sLaLe
of flnanclal dlfflculLy
uebLor musL be parLlally
or relaLlvely lnsolvenL
1hlng dellvered ls
consldered as equlvalenL
of performance
unlversallLy or properLy
of debLor ls whaL ls
ceded
aymenL exLlngulshes
obllgaLlon Lo Lhe exLenL
of Lhe value of Lhe Lhlng
dellvered as agreed
upon, proved or lmplled
from Lhe conducL of Lhe
credlLor
Merely releases debLor
for neL proceeds of
Lhlngs ceded or
asslgned, unless Lhere ls
conLrary lnLenLlon
Cwnershlp ls Lransferred
Lo C8 upon dellvery
Cwnershlp ls noL
Lransferred
An acL of novaLlon noL an acL of novaLlon
uoes noL presuppose
lnsolvency
resupposes lnsolvency

h5 ',(2,- !/ H&.0,('

64 789: J>=<:;:K:C< 9 I9@;N :C=NCD >F O9WEC=:B

&4 volunLary acL of Lhe debLor whereby he offers
Lo Lhe credlLor for accepLance Lhe lmmedlaLe
performance of Lhe former's obllgaLlon Lo Lhe
laLLer.!7-89:.) ;<=->.$-28/ .8: +28$#.?$/) 4666
9:) @% 43&,

1ender of paymenL ls Lhe manlfesLaLlon by
debLors of Lhelr deslre Lo comply wlLh or Lo pay
Lhelr obllgaLlon. !L@/% V982/B%L@/%X.R-=.2) S%0%
*2% &J44'G) \9?% ') 466(,

(>:C4 lf Lhe credlLor refuses Lhe Lender of paymenL
wlLhouL [usL cause, Lhe debLors are dlscharged from
Lhe obllgaLlon by Lhe conslgnaLlon of Lhe sum due.
!L@/% V982/B%L@/%X.R-=.2) S%0% *2% &J44'G) \9?% ')
466(,

1!()$%(&'$!(

64 789: ;< J>=<;A=9:;>=B

&4 AcL of deposlLlng Lhe ob[ecL of Lhe obllgaLlon
wlLh Lhe courL or compeLenL auLhorlLy afLer Lhe
C8 has un[usLlflably refused Lo accepL Lhe same or
ls noL ln a poslLlon Lo accepL lL due Lo cerLaln
reasons or clrcumsLances. !7-89:.) ;<=->.$-28/
.8: +28$#.?$/) 4666 9:) @% 43&,

64 78C= 9=N M8CDC ;< J>=<;A=9:;>= E9NCB
&4 ConslgnaLlon ls made by deposlLlng Lhe proper
amounL Lo Lhe [udlclal auLhorlLy, before whom
Lhe Lender of paymenL and Lhe announcemenL of
Lhe conslgnaLlon shall be proved. !L@/%
V982/B%L@/%X.R-=.2) S%0% *2% &J44'G) \9?% ')
466(,

(>:C4 Cnce Lhe conslgnaLlon has been duly made,
Lhe debLor may ask Lhe [udge Lo order Lhe
cancellaLlon of Lhe obllgaLlon.

64 78C= M;@@ J>=<;A=9:;>= OD>NKJC CFFCJ:< >F
O9WEC=:B

&4
%-4 ConslgnaLlon shall produce effecLs of
paymenL only lf Lhere ls a valld Lender of
paymenL.

SH(<4 When: &-'$'
1. CredlLor ls &bsenL or unknown,
or doesn'L appear aL place of paymenL
2. CredlLor -efuses Lo lssue a recelpL
wlLhouL [usL cause
3. 'lLle of Lhe obllgaLlon has been losL
4. CredlLor ls $ncapaclLaLed Lo
recelve paymenL aL Lhe Llme lL ls due
3. 'wo or more persons clalm Lhe rlghL Lo
collecL

(>:C4 1he expenses of conslgnaLlon, when properly
made, shall be charged agalnsL Lhe credlLor.

+)' %!#,-( (!'-) ./00

64 789: 9DC :8C DCPK;<;:C< >F J>=<;A=9:;>=B

&4 +H1H&)
1. +alld exlsLlng debL whlch ls already due,
2. Hrlor valld Lender 9P?9@$ when prlor
Lender of paymenL ls dlspensable,
3. 1redlLor un[usLly refuses Lhe Lender of
paymenL,
4. Hrlor noLlce of conslgnaLlon glven Lo
persons lnLeresLed ln Lhe fulflllmenL of
Lhe obllgaLlon,
3. &mounL or Lhlng ls deposlLed aL Lhe
dlsposal of [udlclal auLhorlLy, and
6. )ubsequenL noLlce of Lhe facL of
conslgnaLlon Lo persons lnLeresLed ln
Lhe fulflllmenL of Lhe obllgaLlon.

64 19= :8C NC?:>D M;:8ND9M :8C :8;=A
NCO><;:CNB
&48efore 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. ("#$% &4(6) *++)

(!',4 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 codebLors, guaranLors
and sureLles shall be released. ("#$% &4(&) *++)

64 2;<:;=AK;<8 :C=NCD >F O9WEC=: FD>E
J>=<;A=9:;>=5

&4

2u4
1$+$# #&7 ',&04

',(2,- !/ H&.0,(' 1!()$%(&'$!(
C-+.,&
AnLecedenL of
conslgnaLlon or
prellmlnary acL Lo
conslgnaLlon
rlnclpal or
consummaLlng acL for
Lhe exLlngulshmenL of
Lhe obllgaLlon
9;;&(+
lL does noL by lLself
exLlngulsh Lhe
obllgaLlon
lL exLlngulshes Lhe
obllgaLlon when declared
valld
%8-,-(+&,
LxLra[udlclal
!udlclal for lL requlres Lhe
flllng of a complalnL ln
courL !7-89:.)
;<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @%
434,

64 $= 9= CLCJ:EC=: J9<CX S DCFK<CN :> I9J9:C :8C
@9=N 9@@CA;=A :89: . 89N <>@N :> 8;E :8C
9NN;:;>=9@ 9DC9X :8C O9WEC=: >F M8;J8 M>K@N ?C
CFFCJ:CN F;IC WC9D< 9F:CD :8C CTCJK:;>= >F 9
F>DE9@ NCCN >F <9@C5 3>MCICDX :8C O9D:;C< F9;@CN
:> CTCJK:C 9 NCCN >F <9@C5 2KD;=A :8C OC=NC=JW
>F :8C 9J:;>=X S NCO><;:CN :8C O9WEC=: F>D :8C
9NN;:;>= :> :8C @>: M;:8 :8C J>KD:5 $< :8CDC 9 I9@;N
J>=<;A=9:;>=B

&4 no. under ArL. 1237 of Lhls Clvll Code,
conslgnaLlon ls proper only ln cases where an
exlsLlng obllgaLlon ls due. ln Lhls case, Lhe
conLracLlng parLles agreed LhaL full paymenL of
purchase prlce shall be due and payable wlLhln 3
years from Lhe execuLlon of a formal deed of sale.
AL Lhe Llme 8odrlguez deposlLed Lhe amounL ln
courL, no formal deed of sale had yeL been
execuLed by Lhe parLles, and, Lherefore, Lhe 3
year perlod durlng whlch Lhe purchase prlce
should be pald had noL commenced. ln shorL, Lhe
purchase prlce was noL yeL due and payable.
!b9-#/ 2H L.8 "8:#9/B%02:#->A9]) S%0% *2% &5'(53)
Y.M 5&) 4666,

64 *=NCD 9 6-(+) 2& ,&+,) <9@CX S <>@N :> . 8;< @>:
9=N :8C ?K;@N;=A CDCJ:CN :8CDC>=5 '8CW 9ADCCN
:89: 89@F >F :8C J>=<;NCD9:;>= <89@@ ?C O9;N :> :8C
?9=R :> O9W >FF :8C @>9= >F S5 &F:CD O9W;=A :8C
F;D<: ;=<:9@@EC=:X .X ;=<:C9N >F O9W;=A :8C @>9= :>
:8C ?9=RX DC<:DKJ:KDCN ;: :M;JC5 ,IC=:K9@@WX :8C
@>9= ?CJ9EC NKC 9=N NCE9=N9?@C5 '8K<X S O9;N
:8C ?9=R5 != :8C <9EC N9WX . 9@<> MC=: :> :8C
?9=R 9=N >FFCDCN :> O9W :8C @>9=X ?K: :8C ?9=R
DCFK<CN :> 9JJCO: :8C O9WEC=:5

. :8C= F;@CN 9= 9J:;>= F>D J>=<;A=9:;>= M;:8>K:
=>:;FW;=A S5 $< :8CDC 9 I9@;N J>=<;A=9:;>= ?W . >F
:8C ?9@9=JC >F :8C J>=:D9J: OD;JCB

&4 no. ? flled Lhe peLlLlon for conslgnaLlon agalnsL
Lhe bank wlLhouL noLlfylng Lhe x, resulLlng Lo Lhe
former's fallure Lo prove Lhe paymenL of Lhe
balance of Lhe purchase prlce and conslgnaLlon.
ln facL, even before Lhe flllng of Lhe conslgnaLlon
case, ? never noLlfled Lhe x of Lhelr offer Lo
pay.!L@/% V982/B% L@/%X.R-=.2) S%0% *2% &J44'G)
\9?% ') 466(,

!"#$%&'$!()

64 "CJ9K<C >F #;A9W9Y< DCFK<9@ :> 9JJCO: <CICD9@
:C=NCD< >F O9WEC=: 9=N =>:;JC< >F J>=<;A=9:;>=
A;IC= ?W !))& ;= ;:< NC<;DC :> J>EO@W M;:8 ;:<
>?@;A9:;>= :> O9W >= ;=<:9@@EC=:<X !))& ?D>KA8:
9 J>EO@9;=: F>D J>=<;A=9:;>= 9A9;=<: #;A9W9
?CF>DC :8C -'15 '8C -'1 9@@>MCN !))&X 9E>=A
>:8CD<X :> NCO><;: M;:8 ;:X?W M9W >F J>=<;A=9:;>=X
9@@ FK:KDC PK9D:CD@W ;=<:9@@EC=:< M;:8>K: =CCN >F
F>DE9@ :C=NCD< >F O9WEC=: 9=N <CDI;JC >F =>:;JC<
>F J>=<;A=9:;>=5

#;A9W9 9<<9;@< :8C I9@;N;:W >F :8C J>=<;A=9:;>= >=
:8C AD>K=N :89: :8CDC M9< => =>:;JC :> 8CD
DCA9DN;=A !))&d< J>=<;A=9:;>= >F :8C 9E>K=:<
J>DDC<O>=N;=A :> JCD:9;= ;=<:9@@EC=:<5 $< #;A9W9
J>DDCJ:B

&4 no. 1he moLlon and Lhe subsequenL courL
order served on Llgaya ln Lhe conslgnaLlon
proceedlngs sufflclenLly served as noLlce Lo Llgaya
of CSSA's wllllngness Lo pay Lhe quarLerly
lnsLallmenLs and Lhe conslgnaLlon of such
paymenLs wlLh Lhe courL. lor reasons of equlLy,
Lhe procedural requlremenLs of conslgnaLlon are
deemed subsLanLlally complled wlLh ln Lhe
presenL case !\9 Y9/. B% +") S%0% *2/% &6(3(J
(K) ;?$% &G) &GGG,.

2uS
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
"5 #!)) !/ '3, '3$(% 2*,

64 78C= ;< 9 :8;=A J>=<;NCDCN @><:B

&4 When: 2!H,
1. lL 2lsappears ln such a way LhaL lLs
exlsLence ls unknown,
2. lL goes !uL of commerce,
3. lL Herlshes, or
4. lLs ,xlsLence ls unknown or lf known, lL
cannoL be recovered.

64 789: ;< :8C CFFCJ: >F @><< >F :8C :8;=A M8;J8 ;<
:8C >?LCJ: >F :8C >?@;A9:;>=B

&4 lf Lhe obllgaLlon ls a:
1. \9$9#1-8.$9 2<=->.$-28 $2 >-B9:

%-41he obllgaLlon ls 9P$-8>A-/I9: when
Lhe ob[ecL of Lhe obllgaLlon ls losL.

SH(<4 #&)12H1%
a. #aw provldes oLherwlse
b. naLure of Lhe obllgaLlon requlres
Lhe &ssumpLlon of rlsk
c. )LlpulaLlon Lo Lhe conLrary
d. uebLor 1onLrlbuLed Lo Lhe loss
e. Loss Lhe of Lhe Lhlng occurs afLer
Lhe debLor lncurred ln 2elay
f. When debLor Hromlsed Lo dellver
Lhe same Lhlng Lo Lwo or more
persons who do noL have Lhe same
lnLeresL
g. When Lhe debL of a cerLaln and
deLermlnaLe Lhlng proceeds from a
1rlmlnal offense
h. When Lhe obllgaLlon ls %enerlc

2. S989#-? 2<=->.$-28 $2 >-B9:

%-4 1he obllgaLlon ls 82$ 9P$-8>A-/I9:
because a generlc Lhlng never perlshes.

SH(4ln case of generlc obllgaLlons
whose ob[ecL ls a parLlcular class or
group wlLh speclflc or deLermlnaLe
quallLles (llmlLed generlc obllgaLlon)

3. "8 2<=->.$-28 $2 :2 - Lhe obllgaLlon ls
exLlngulshed when Lhe presLaLlon
becomes legally or physlcally
lmposslble.

64 2;FFCDC=:;9:C @CA9@ FD>E O8W<;J9@ ;EO><<;?;@;:W
:> OCDF>DE 9= >?@;A9:;>= :> N>5

&4
1. X9>.= -1@2//-<-=-$M - acL sLlpulaLed Lo be
performed ls subsequenLly prohlblLed
by law.
2. 7IM/-?.= -1@2//-<-=-$M - acL sLlpulaLed
could noL be physlcally performed by
Lhe obllgor due Lo reasons subsequenL
Lo Lhe execuLlon of Lhe conLracL.
!7-89:.) ;<=->.$-28/ .8: +28$#.?$/)
4666 9:) @% 4(&,

64 789: ;< :8C CFFCJ: >F O9D:;9@ @><=->98?9 2H $I9
:9<$2# - CredlLor has Lhe rlghL Lo
demand Lhe resclsslon of Lhe obllgaLlon
or Lo demand speclflc performance,
@=A/ damages, ln elLher case.
2. \A9 $2 H2#$A-$2A/ 9B98$:
a. SubsLanLlal loss - obllgaLlon ls
exLlngulshed.
b. unsubsLanLlal loss - Lhe C8 shall
dellver Lhe Lhlng promlsed ln lLs
lmpalred condlLlon.

+)' %!#,-( (!'-) ./00

64 789: ;< :8C CFFCJ: M8C= :8C :8;=A ;< @><: ;= :8C
O><<C<<;>= >F :8C NC?:>DB

&4
%-4 lL ls presumed LhaL loss ls due Lo u8's
faulL.

SH(4 resumpLlon shall noL apply ln case loss
ls due Lo earLhquake, flood, sLorm or oLher
naLural calamlLy.

SH( :> :8C SH(4 uebLor sLlll llable even lf loss
ls due Lo forLulLous evenL when:
1. uebLor lncurred ln delay, or
2. uebLor promlsed Lo dellver Lhe Lhlng Lo
Lwo or more persons wlLh dlfferenL
lnLeresLs !@.#% 5) "#$% &&(') *++,

64 789: N>C< ,&3./ /1( /+-*+13./ EC9=B

&4 A prlnclple ln lnLernaLlonal law whlch means
LhaL an agreemenL ls valld only lf Lhe same
condlLlons prevalllng aL Llme of conLracLlng
conLlnue Lo exlsL aL Lhe Llme of performance. lL ls
Lhe basls of Lhe prlnclple of unforeseen dlfflculLy
of servlce.

(>:C4 Powever, Lhls prlnclple cannoL be applled
absoluLely ln conLracLual relaLlons slnce parLles are
presumed Lo have assumed Lhe rlsk of unfavorable
developmenLs. !7-89:.) ;<=->.$-28/ .8: +28$#.?$/)
4666 9:) @% 4(3,

64 789: 9DC :8C DCPK;<;:C< ;= >DNCD :> DC@;CIC :8C
NC?:>D FD>E 8;< >?@;A9:;>=X ;= M8>@C >D ;= O9D:X
?9<CN >= K=F>DC<CC= N;FF;JK@:W >F <CDI;JCB

&4
1. LvenL or change ln clrcumsLance could
noL have been foreseen aL Lhe Llme of
Lhe execuLlon of Lhe conLracL,
2. Such evenL makes Lhe performance
exLremely dlfflculL buL noL lmposslble,
3. 1he evenL musL noL be due Lo Lhe acL of
any of Lhe parLles, and
4. 1he conLracL ls for a fuLure presLaLlon.
!D2=98$-82) +-B-= +2:9 2H $I9 7I-=-@@-89/)
E2=% FE) 4664 9:) @% 53J,

2u6
1$+$# #&7 ',&04

15 1!(2!(&'$!(

64 789: ;< J>=N>=9:;>=B

&4 lL ls an acL of llberallLy by vlrLue of whlch Lhe
credlLor, wlLhouL recelvlng any prlce or
equlvalenL, renounces Lhe enforcemenL of Lhe
obllgaLlon, as a resulL of whlch lL ls exLlngulshed
ln lLs enLlreLy or ln LhaL parL or aspecL of Lhe same
Lo whlch Lhe condonaLlon or remlsslon refers.
!7-89:.) ;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @%
4(J,
,SH-,)) 1!(2!(&'$!(

64 789: 9DC :8C DCPK;<;:C< >F J>=N>=9:;>=B

&4 %&$2,
1. MusL be %raLulLous,
2. &ccepLance by Lhe debLor,
3. MusL 82$ be $nofflclous,
4. lormallLles provlded by law on
2onaLlons musL be complled wlLh lf
condonaLlon ls 9P@#9//, and
3. An ,xlsLlng demandable debL.

$0H#$,2 1!(2!(&'$!(

64 789: ;< :8C CFFCJ: >F :8C NC@;ICDW >F 9 OD;I9:C
N>JKEC=: CI;NC=J;=A 9 JDCN;:B
&41he 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. ("#$% &4J&) *++)
(!',4 Whenever Lhe prlvaLe documenL ln whlch Lhe
debL appears ls found ln Lhe possesslon of Lhe
debLor, lL shall be presumed LhaL Lhe credlLor
dellvered lL volunLarlly, unless Lhe conLrary ls
proved. ("#$% &4J4) *++)

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. ("#$% &4J3) *++)

64 789: ;< :8C CFFCJ: >F ;=>FF;J;>K< J>=N>=9:;>=B

&4 lL may be LoLally revoked or reduced
dependlng on wheLher or noL lL ls LoLally or only
parLly lnofflclous. !7-89:.) ;<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @% 4(K,

64 19= :8CDC ?C 9 K=;@9:CD9@ J>=N>=9:;>=B

&: no. Slnce lL ls a donaLlon of an exlsLlng credlL,
consldered a properLy rlghL, ln favor of Lhe
debLor, lL ls requlred LhaL Lhe u8 glves hls consenL
LhereLo by maklng an accepLance. lf Lhere ls no
accepLance, Lhere ls no condonaLlon. !7-89:.)
;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @% 4(J,

!"#$%&'$!()

25 1!(/*)$!( !- 0,-%,-

64 78C= ;< :8CDC 9 J>=FK<;>= >D ECDACD >F
D;A8:F J>=FK<;>= >F
D;A8:<B

&4
1. Merger ln Lhe same person of Lhe
characLers of boLh a credlLor and d
debLor,
2. MusL Lake place ln Lhe persons of a
prlnclpal credlLor and a prlnclpal
debLor, and
3. Merger ls deflnlLe and compleLe.
2u7
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL

64 789: ;< :8C CFFCJ: >F J>=FK<;>= >D ECDACD >F
D;A8:=FK<;>=B

&4 ?es. lL wlll be deflnlLe and compleLe up Lo Lhe
exLenL of Lhe concurrenL amounL or value, buL Lhe
remalnlng obllgaLlon subslsLs. !7-89:.)
;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @% 4JK,

64 789: ;< :8C CFFCJ: M8C= J>=FK<;>= >D ECDACD
;< DCI>RCNB

&4 lf Lhe acL whlch creaLed Lhe confuslon ls
revoked for some causes such as resclsslon of
conLracLs, or nulllLy of Lhe wlll or conLracL, Lhe
confuslon or merger ls also revoked. 1he sub[ecL
obllgaLlon ls revlved ln Lhe same condlLlon as lL
was before Lhe confuslon.

(>:C4 uurlng such lnLerregnum, Lhe runnlng of Lhe
perlod of prescrlpLlon of Lhe obllgaLlon ls suspended.
!7-89:.) ;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @% 4JG,

64 789: ;< :8C CFFCJ: >F J>=FK<;>= >D ECDACD ;=
DC@9:;>= :> :8C AK9D9=:>D<B
&4
1. Merger whlch Lakes place ln Lhe person
of Lhe prlnclpal debLor or prlnclpal
credlLor beneflLs Lhe guaranLors. 1he
conLracL of guaranLy ls exLlngulshed.
2. Confuslon whlch Lakes place ln Lhe
person of any of Lhe guaranLors does
noL exLlngulsh Lhe obllgaLlon. !"#$%
&4J() *++,

64 $= 9 L>;=: >?@;A9:;>=X M89: ;< :8C CFFCJ: >F
J>=FK<;>= >D ECDACD ;= >=C NC?:>D >D JDCN;:>DB

&4
%-4 !olnL obllgaLlon ls noL exLlngulshed slnce
confuslon ls noL deflnlLe and compleLe wlLh
regard Lo Lhe enLlre obllgaLlon. A parL of Lhe
obllgaLlon sLlll remalns ouLsLandlng.

SH(4 CbllgaLlon ls exLlngulshed wlLh respecL
only Lo Lhe share correspondlng Lo Lhe u8 or
C8 concerned. ln effecL, Lhere ls only parLlal
exLlngulshmenL of Lhe enLlre obllgaLlon.
!7-89:.) ;<=->.$-28/ .8: +28$#.?$/) 4666 9:)
@% 4K&,

,5 1!0H,()&'$!(5

64 789: ;< J>EOC=<9:;>=B

&4 lL ls a mode of exLlngulshlng Lo Lhe concurrenL
amounL, Lhe obllgaLlons of Lhose persons who ln
Lhelr own rlghL are reclprocally debLors and
credlLors of each oLher !"#$% &454) *++,. lL
lnvolves Lhe slmulLaneous balanclng of Lwo
obllgaLlons ln order Lo exLlngulsh Lhem Lo Lhe
exLenL ln whlch Lhe amounL of one ls covered by
LhaL of Lhe oLher.

64 789: 9DC :8C DCPK;<;:C< >F J>EOC=<9:;>=B

&4
1. 8oLh parLles musL be muLually credlLors
and debLors ln Lhelr own rlghL and as
prlnclpals,
2. 8oLh debLs musL conslsL ln sum of
money or lf consumable, of Lhe same
klnd or quallLy,
3. 8oLh debLs are due,
4. 8oLh debLs are llquldaLed and
demandable,
3. nelLher debL musL be reLalned ln a
conLroversy commenced by Lhlrd
person and communlcaLed wlLh debLor
(nelLher debL ls garnlshed), and
6. CompensaLlon musL noL be prohlblLed
by law.

(>:C4 When all Lhe requlslLes menLloned ln ArL. 1279
of Lhe Clvll Code are presenL, compensaLlon Lakes
effecL by operaLlon of law, even wlLhouL Lhe consenL
or knowledge of Lhe credlLors and debLors.

+)' %!#,-( (!'-) ./00

Z5 Q$(2) !/ 1!0H,()&'$!(

64 789: 9DC :8C R;=N< >F J>EOC=<9:;>=B

&4
1. X9>.= ?21@98/.$-28 - by operaLlon of
law
2. +28B98$-28.= - by agreemenL of Lhe
parLles
3. WA:-?-.= - by [udgmenL of Lhe courL
when Lhere ls a counLerclalm duly
pleaded, and Lhe compensaLlon
decreed

#,%&# 1!0H,()&'$!(

64 789: 9DC :8C NC?:< =>: <K?LCJ: :>
J>EOC=<9:;>=B

&4
1. uebLs arlslng from conLracLs of :9@2/-$
2. uebLs arlslng from conLracLs of
?2112:.$A1
3. Clalms for /A@@2#$ due by graLulLous
LlLle
4. CbllgaLlons arlslng from ?#-1-8.=
offenses
3. CerLaln obllgaLlons ln favor of
>2B9#8198$ (9%>% Laxes, fees, duLles,
and oLhers of a slmllar naLure)
(>:C4 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. ("#$% &4KG) *++)
2u8
1$+$# #&7 ',&04

64 2C #C>= <>@N 9=N NC@;ICDCN :> );@98;< I9D;>K<
ECDJ89=N;<C5 2KC :> );@98;<d NCF9K@:X 2C #C>=
F;@CN 9 J>EO@9;=: F>D :8C J>@@CJ:;>= >F <9;N
9JJ>K=:<5 );@98;< 9<<CD:<X 9< 9FF;DE9:;IC NCFC=<CX
9 NC?;: ECE> 9< K=DC9@;kCN OD>F;: F>D 9
<KOO><CN J>EE;<<;>= :89: );@98;< <8>K@N 89IC
DCJC;ICN FD>E 2C #C>=5 79< :8CDC @CA9@
J>EOC=<9:;>=B

&4 Sllahls admlLs Lhe valldlLy of lLs ouLsLandlng
accounLs wlLh ue Leon. 8uL wheLher ue Leon ls
llable Lo pay Sllahls a commlsslon on Lhe sub[ecL
sale Lo uole ls dlspuLed. 1hls clrcumsLance
prevenLs legal compensaLlon from Laklng place.
!L-=.I-/ Y.#_9$-8> +2#@% B% F"+) S% 0% *2% XJ364J)
\9?% J) &GKG,

(>:C4 CompensaLlon ls noL proper where Lhe clalm
of Lhe person asserLlng Lhe seLoff agalnsL Lhe oLher
ls noL clear nor llquldaLed, compensaLlon cannoL
exLend Lo unllquldaLed, dlspuLed clalm exlsLlng from
breach of conLracL. !L-=.I-/ Y.#_9$-8> +2#@% B% F"+) S%
0% *2% XJ364J) \9?% J) &GKG,
1!(+,('$!(&#

64 789: ;< J>=IC=:;>=9@ J>EOC=<9:;>=B

&4 lL ls one LhaL Lakes place by agreemenL of Lhe
parLles.

G*2$1$&# 1!0H,()&'$!(

64 789: ;< LKN;J;9@ J>EOC=<9:;>=B

&4 Cne made by order of a courL based on a
permlsslve counLerclalm. leadlng and proof of
Lhe counLerclalm musL be made.

/&1*#'&'$+, 1!0H,()&'$!(

64 789: ;< F9JK@:9:;IC J>EOC=<9:;>=B

&4 Cne of Lhe parLles has a cholce of clalmlng or
opposlng Lhe compensaLlon.

64 789: 9DC :8C >?@;A9:;>=< <K?LCJ: :>
F9JK@:9:;IC J>EOC=<9:;>=B

&4 When one of Lhe debLs arlses from:
1. ueposlLum
2. CbllgaLlons of a deposlLary
3. CbllgaLlons ln commudaLum
4. Clalm of supporL due Lo graLulLous LlLle
SH(: luLure supporL.
3. Clvll llablllLy from a crlme

64 2;<:;=AK;<8 J>EOC=<9:;>= FD>E O9WEC=:5
&4
1!0H,()&'$!( H&.0,('
A mode of exLlngulshlng
Lo Lhe concurrenL
amounL, Lhe obllgaLlons
of Lhose persons who ln
Lhelr own rlghL are
reclprocally debLors and
credlLors of each oLher
aymenL means noL only
dellvery of money buL
also performance of an
obllgaLlon
CapaclLy of parLles noL
necessary

09./28d CompensaLlon
operaLes by law, noL by
Lhe acL of Lhe parLles
uebLor musL have
capaclLy Lo dlspose of
Lhe Lhlng pald,
credlLor musL have
capaclLy Lo recelve
paymenL
1here can be parLlal
exLlngulshmenL of Lhe
obllgaLlon
1he performance musL
be compleLe A8=9//
R.-B9: <M $I9 ?#9:-$2#
Legal compensaLlon
Lakes place by operaLlon
of law wlLhouL
slmulLaneous dellvery
lnvolves dellvery or
acLlon
arLles musL be muLually
debLors and credlLors of
each oLher
lL ls noL necessary LhaL
Lhe parLles be muLually
debLors and credlLors of
each oLher

!"#$%&'$!()

64 2;<:;=AK;<8 J>EOC=<9:;>= FD>E J>=FK<;>=5

&4
2u9
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
1!0H,()&'$!(
a&D:<5 Z`\_Z`\[c
1!(/*)$!(
a&D:<5 Z`\hZ`\\c
1wo persons who are
muLual debLors and
credlLors of each oLher
Cne person where
quallLles of debLor and
credlLor are merged
AL leasL Lwo obllgaLlons Cne obllgaLlon

64 &::W5 #9PK;8>=X ;= ?C89@F >F H9JMC@NX F;@CN 9
O@C9N;=A 9NNDC<<CN :> 0H11 :;:@CN UE>:;>= :>
N;DCJ: O9WEC=: >F 9::>D=CWd< FCCVX ;=I>R;=A 9
NCJ;<;>= M8CDC;= 0H11 M9< 9NLKNACN :> O9W
H9JMC@N :8C <KE >F HZiXiii5ii 9< 9::>D=CWd<
FCC<5 0H11 F;@CN 9= >OO><;:;>= <:9:;=A :89: :8C
<9;N 9E>K=: ;< <C:>FF ?W 9 @;RC <KE >F
HZiXiii5iiX J>@@CJ:;?@C ;= ;:< F9I>D FD>E H9JMC@N
9@<> ?W M9W >F 9::>D=CWd< FCC< M8;J8 0H11
DCJ>ICDCN FD>E :8C <9EC 1/$ >F 09=;@9 ;=
9=>:8CD J;I;@ J9<C5 79< :8CDC @CA9@
J>EOC=<9:;>=B

&4 MCC and acweld were credlLors and debLors
of each oLher, Lhelr debLs Lo each oLher conslsLlng
ln flnal and execuLory [udgmenLs of Lhe Cll ln Lwo
separaLe cases. 1he Lwo obllgaLlons, Lherefore,
respecLlvely offseL each oLher, compensaLlon
havlng Laken effecL by operaLlon of law and
exLlngulshed boLh debLs Lo Lhe concurrenL
amounL of 10,000.00, pursuanL Lo Lhe provlslons
of ArLs. 1278, 1279 and 1290 of Lhe Clvll Code,
slnce all Lhe requlslLes provlded ln ArL. 1279 of
Lhe sald Code for auLomaLlc compensaLlon "even
Lhough Lhe credlLors and debLors are noL aware
of Lhe compensaLlon" were presenL. !Y-8:.8.2
72#$=.8: +9198$ +2#@% B% +")S%0% *2% X(4&(G)
`9<% 4K) &GK5,

64 SX M8> 89< 9 <9I;=A< NCO><;: M;:8 . "9=R ;=
:8C <KE >F H$XiiiXiii5iiX ;=JKD< 9 @>9=
>?@;A9:;>= M;:8 :8C <9;N ?9=R ;= :8C <KE >F
H_iiXiii5ii M8;J8 89< ?CJ>EC NKC5 78C= S
:D;C< :> M;:8ND9M 8;< NCO><;:X . "9=R 9@@>M< >=@W
HìiXiii5ii :> ?C M;:8ND9M=X @C<< <CDI;JC
J89DAC<X J@9;E;=A :89: J>EOC=<9:;>= 89<
CT:;=AK;<8CN ;:< >?@;A9:;>= K=NCD :8C <9I;=A<
9JJ>K=: :> :8C J>=JKDDC=: 9E>K=: >F Sd< NC?:5 S
J>=:C=N< :89: J>EOC=<9:;>= ;< ;EOD>OCD M8C=
>=C >F :8C NC?:<X 9< 8CDCX 9D;<C< FD>E 9 J>=:D9J:
>F NCO><;:5 &<<KE;=A :89: :8C OD>E;<<>DW =>:C
<;A=CN ?W S :> CI;NC=JC :8C @>9= N>C< =>:
OD>I;NC F>D J>EOC=<9:;>= ?C:MCC= <9;N @>9= 9=N
8;< <9I;=A< NCO><;:X M8> ;< J>DDCJ:B

&4 ? bank ls correcL. All Lhe requlslLes of ArL. 1279,
Clvll Code are presenL. CompensaLlon shall Lake
place when Lwo persons are reclprocally credlLor
and debLor of each oLher. ln Lhls connecLlon, lL
has been held LhaL Lhe relaLlon exlsLlng beLween
a deposlLor and a bank ls LhaL of credlLor and
debLor. As a general rule, a bank has a rlghL of seL
off of Lhe deposlLs ln lLs hands for Lhe paymenL of
any lndebLedness Lo lL on Lhe parL of a deposlLor"
!SA==./ B% 7*V) S0 *2% X35&G&) *2B91<9# &5)
&G5',. Pence, compensaLlon Look place beLween
Lhe muLual obllgaLlons of x and ? bank. aZ[[_ "9D
6KC<:;>=c

64 ,NK9DN> M9< AD9=:CN 9 @>9= ?W S.^ "9=R F>D
:8C OKDO><C >F ;EOD>I;=A 9 ?K;@N;=A M8;J8 S.^
@C9<CN FD>E 8;E5 ,NK9DN> CTCJK:CN :8C
OD>E;<<>DW =>:C ;= F9I>D >F :8C ?9=RX M;:8 8;<
FD;C=N -;J9DN> 9< J><;A=9:>DW5 $= :8C H(X :8CW
?>:8 9JR=>M@CNACN :89: :8CW 9DC U;=N;I;NK9@@W
9=N J>@@CJ:;IC@WV @;9?@C 9=N M9;ICN :8C =CCN F>D
OD;>D NCE9=N5 '> <CJKDC :8C H(X -;J9DN>
CTCJK:CN 9 DC9@ C<:9:C E>D:A9AC >= 8;< >M=
OD>OCD:W5 78C= ,NK9DN> NCF9K@:CN >= :8C H(X
S.^ <:>OOCN O9WEC=: >F DC=:9@< >= :8C ?K;@N;=A
>= :8C AD>K=N :89: @CA9@ J>EOC=<9:;>= 89N <C:
;=5 );=JC :8CDC M9< <:;@@ 9 ?9@9=JC NKC >= :8C H(
9F:CD 9OO@W;=A :8C DC=:9@<X S.^ F>DCJ@><CN :8C
DC9@ C<:9:C E>D:A9AC >ICD -;J9DN>Y< OD>OCD:W5
-;J9DN> >OO><CN :8C F>DCJ@><KDC >= :8C AD>K=N
:89: 8C ;< >=@W 9 J><;A=9:>DWg :89: => NCE9=N
M9< E9NC KO>= 8;E F>D O9WEC=:X 9=N 9<<KE;=A
8C ;< @;9?@CX 8;< @;9?;@;:W <8>K@N =>: A> ?CW>=N
89@F >F :8C ?9@9=JC >F :8C @>9=5 /KD:8CDX -;J9DN>
<9;N :89: M8C= :8C ?9=R ;=I>RCN J>EOC=<9:;>=
?C:MCC= :8C DC=:9@< 9=N :8C 9E>K=: >F :8C @>9=X
;: 9E>K=:CN :> 9 =CM J>=:D9J: >D =>I9:;>=X 9=N
89N :8C CFFCJ: >F CT:;=AK;<8;=A :8C <CJKD;:W <;=JC
8C N;N =>: A;IC 8;< J>=<C=: a9< >M=CD >F :8C
OD>OCD:W K=NCD :8C DC9@ C<:9:C E>D:A9ACc
:8CDC:>5

19= S.^ "9=R I9@;N@W 9<<CD: @CA9@ J>EOC=<9:;>=B

&4 x?Z 8ank may valldly asserL Lhe parLlal
compensaLlon of boLh debLs, buL ls should be
faculLaLlve compensaLlon because noL all of Lhe
flve requlslLes of legal compensaLlon are presenL
(ArL. 1279, nCC). 1he paymenL of Lhe renLals by
x?Z 8ank ls noL yeL due, buL Lhe prlnclpal
obllgaLlon of loan where boLh Lduardo and
8lcardo are bound solldarlly and Lherefore any of
Lhem ls bound prlnclpally Lo pay Lhe enLlre loan, ls
due and demandable wlLhouL need of demand.
x?Z 8ank may declare lLs obllgaLlon Lo pay renLals
as already due and demand paymenL from any of
Lhe Lwo debLors.

&@:CD=9:;IC &=<MCD4 Legal compensaLlon can be
valldly asserLed beLween Lhe bank, Lduardo and
8lcardo. 1hls ls a case of faculLaLlve obllgaLlon,
Lhus, Lhe bank can asserL parLlal compensaLlon.

+)' %!#,-( (!'-) ./00

8anks have an lnherenL rlghL Lo seL off where
boLh obllgaLlons are due and demandable (ArL.
1279, nCC).
21u
1$+$# #&7 ',&04

19= -;J9DN>Y< OD>OCD:W ?C F>DCJ@><CN :> O9W :8C
FK@@ ?9@9=JC >F :8C @>9=B

&4 no, because Lhere was no prlor demand on
8lcardo, deprlvlng hlm of Lhe rlghL Lo reasonably
block Lhe foreclosure by paymenL. 1he walver of
prlor demand ln Lhe n ls agalnsL publlc pollcy
and vlolaLes Lhe rlghL Lo due process. WlLhouL
demand, Lhere ls no defaulL and Lhe foreclosure ls
null and vold. Slnce Lhe morLgage, lnsofar as
8lcardo ls concerned ls noL vlolaLed, a
requlremenL under AcL 3133 for a valld
foreclosure of real esLaLe morLgage ls absenL.

ln Lhe case of \V7 B% X-?A.8.8) lL was held LhaL:
Lhe lssue of wheLher demand was made before
Lhe foreclosure was effecLed ls essenLlal. lf
demand was made and duly recelved by Lhe
respondenLs and Lhe laLLer sLlll dld noL pay, Lhen
Lhey were already ln defaulL and foreclosure was
proper. Powever, lf demand was noL made, Lhen
Lhe loans had noL yeL become due and
demandable. 1hls meanL LhaL Lhe respondenLs
had noL defaulLed ln Lhelr paymenL and Lhe
foreclosure was premaLure."

&@:CD=9:;IC &=<MCD Z4no. AlLhough Lhe prlnclpal
obllgaLlon of loan ls due and demandable wlLhouL
need of furLher demand Lhe foreclosure of Lhe
accessory conLracL of real esLaLe morLgage, Lhere
ls a need of noLlce and demand.

&@:CD=9:;IC &=<MCD `4 ?es. 8lcardo's properLy can
be foreclosed Lo pay Lhe full balance of Lhe loan.
Pe ls admlLLedly lndlvldually and collecLlvely"
llable. Pls llablllLy ls solldary. Pe and Lduardo
have walved noLlce for a prlor demand as
provlded ln Lhe promlssory noLe.

2>C< -;J9DN> 89IC ?9<;< K=NCD :8C 1;I;@ 1>NC F>D
J@9;E;=A :89: :8C >D;A;=9@ J>=:D9J: M9< =>I9:CNB

&4 none of Lhe Lhree klnds of novaLlon ls
appllcable. 1here ls no ob[ecLlve novaLlon,
wheLher express or lmplled, because Lhere ls no
change ln Lhe ob[ecL or prlnclpal condlLlons of Lhe
obllgaLlon. 1here ls no subsLlLuLlon of debLors,
elLher. CompensaLlon ls consldered as
abbrevlaLed or slmpllfled paymenL and slnce
8lcardo bound hlmself solldarlly wlLh Lduardo,
any faculLaLlve compensaLlon whlch occurs does
noL resulL ln parLlal legal subrogaLlon. nelLher
Lduardo nor 8lcardo ls a Lhlrd person lnLeresLed
ln Lhe obllgaLlon under ArL. 1302, nCC. aìi_ "9D
6KC<:;>=c

/5 (!+&'$!(

64 789: ;< =>I9:;>=B

&4 lL ls Lhe change of an obllgaLlon by anoLher,
resulLlng ln lLs exLlngulshmenL or modlflcaLlon,
elLher by changlng Lhe ob[ecL or prlnclpal
condlLlons, or by subsLlLuLlng anoLher ln Lhe place
of Lhe debLor or by subrogaLlng a Lhlrd person Lo
Lhe rlghLs of Lhe credlLor. !7-89:.) ;<=->.$-28/
.8: +28$#.?$/) 4666 9:) @% 4GK,

64 789: 9DC :8C DCPK;<;:C< >F =>I9:;>=B

&4
1. revlous valld obllgaLlon,
2. An agreemenL by Lhe parLles Lo creaLe a
new one or a modlfled verslon,
3. LxLlngulshmenL or modlflcaLlon of Lhe
old obllgaLlon, and
4. valld new obllgaLlon.

64 $< =>I9:;>= ODC<KECNB
&4 no. novaLlon ls never presumed, lL musL be
proven as a facL elLher by:
1. OP@=-?-$ :9?=.#.$-28 - lf lL be so declared
ln unequlvocal Lerms, or
2. Y.$9#-.= -8?21@.$-<-=-$M - LhaL Lhe old
and Lhe new obllgaLlons be on every
polnL lncompaLlble wlLh each oLher.
!"#$% &4G5) *++,

64 )2$1 ;<<KCN :> 29=;@> 9 2;=CD< 19DN aJDCN;:
J9DNc M;:8 GC9==C:C 9< 8;< <KDC:W5 29=;@> K<CN
:8;< J9DN 9=N ;=;:;9@@W O9;N 8;< >?@;A9:;>=< :>
)2$15 '8CDC9F:CDX 29=;@> MD>:C )2$1 9 @C::CD
DCPKC<:;=A ;: :> KOAD9NC 8;< -CAK@9D 2;=CD< 1@K?
19DN :> 9 2;9E>=N a,N;:;>=c >=C5 &< 9
DCPK;DCEC=: >F )2$1X 29=;@> <CJKDCN FD>E
GC9=C::C 8CD 9OOD>I9@ 9=N :8C @9::CD >?@;ACN5
29=;@>d< DCPKC<: M9< AD9=:CN 9=N 8C M9< ;<<KCN
9 2;9E>=N a,N;:;>=c 2;=CD< 1@K? 19DN5 29=;@> 89N
;=JKDDCN JDCN;: J89DACN O@K< 9OOD>OD;9:C ;=:CDC<:
9=N <CDI;JC J89DAC5 3>MCICDX 8C NCF9K@:CN ;= :8C
O9WEC=: >F :8;< >?@;A9:;>=5 79< :8C KOAD9N;=A 9
=>I9:;>= >F :8C >D;A;=9@ 9ADCCEC=: A>ICD=;=A
:8C K<C >F 29=;@> &@:>d< F;D<: JDCN;: J9DNX 9< :>
CT:;=AK;<8 :89: >?@;A9:;>=B

&4 ?es. novaLlon, as a mode of exLlngulshlng
obllgaLlons, may be done ln Lwo ways: by expllclL
declaraLlon, or by maLerlal lncompaLlblllLy.

1here ls no doubL LhaL Lhe upgradlng was a
novaLlon of Lhe orlglnal agreemenL coverlng Lhe

!"#$%&'$!()

211
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
flrsL credlL card lssued Lo uanllo AlLo, baslcally
slnce lL was commlLLed wlLh Lhe lnLenL of
cancelllng and replaclng Lhe sald card. Powever,
Lhe novaLlon dld noL serve Lo release !eaneLLe
from her sureLy obllgaLlons because ln Lhe sureLy
underLaklng she expressly walved dlscharge ln
case of change or novaLlon ln Lhe agreemenL
governlng Lhe use of Lhe flrsL credlL card.!Y2=-82
B% L9?A#-$M \-89#/ F8$9#8.$-28.= +2#@%)S%0% *2%
&5(JK6) "A>% &() 466&,

64 789: 9DC :8C CFFCJ:< >F =>I9:;>=B

&4
1. LxLlngulshmenL of prlnclpal .=/2
exLlngulshes Lhe accessory, 9P?9@$:
a. MorLgagor, pledgor, sureLy or
guaranLor agrees Lo be bound by
Lhe new obllgaLlon !D2=98$-82) +-B-=
+2:9 2H $I9 7I-=-@@-89/) E2=% FE)
&GGG 9:) @% 5G',
b. SLlpulaLlon made ln favor of a Lhlrd
person such as sLlpulaLlon @2A#
.$#A-!"#$% &5&&) *++,, A8=9//
beneflclary consenLs Lo Lhe
novaLlon.
2. lf Lhe new obllgaLlon ls:
a. vold - old obllgaLlon shall subslsL
slnce Lhere ls noLhlng Lo novaLe,
9P?9@$ when Lhe parLles lnLended
LhaL Lhe old obllgaLlon be
exLlngulshed ln any evenL.
b. voldable - novaLlon can Lake
place, 9P?9@$when such new
obllgaLlon ls .88A==9:. ln such case,
old obllgaLlon shall subslsL.
c. ure obllgaLlon - condlLlons of old
obllgaLlon deemed aLLached Lo Lhe
new, unless oLherwlse sLlpulaLed
!D2=98$-82) +-B-= +2:9 2H $I9
7I-=-@@-89/) E2=% FE) &GGG 9:) @%
5GG,
d. CondlLlonal obllgaLlon:
l. -H #9/2=A$2#M- valld unLll
Lhe happenlng of Lhe
condlLlon
ll. -H /A/@98/-B9 .8: :-:
82$ 1.$9#-.=-]9- no
novaLlon, old obllgaLlon
ls enforced

3. lf old obllgaLlon ls condlLlonal and Lhe
new obllgaLlon ls pure:
a. -H #9/2=A$2#M.8: -$ 2??A##9: - old
obllgaLlon already exLlngulshed, no
new obllgaLlon slnce noLhlng Lo
novaLe
b. -H /A/@98/-B9 .8: -$ :-: 82$ 2??A# -
lL ls as lf Lhere ls no obllgaLlon,
Lhus, Lhere ls noLhlng Lo novaLe
2;N :8C 9<<;A=EC=: 9E>K=: :> O9WEC=: ?W
JC<<;>=B

&4no.1here was only one credlLor, Lhe u8.
ArLlcle 1233 conLemplaLes Lhe exlsLence of Lwo or
more credlLors and lnvolves Lhe asslgnmenL of all
Lhe debLor's properLy.

2;N :8C 9<<;A=EC=: J>=<:;:K:C 2-+1)* ;=
O9WEC=:4

&4 no. 1he asslgnmenL, belng ln lLs essence a
morLgage, was buL a securlLy and noL a
saLlsfacLlon of lndebLedness. !\V7 B% +") S%0% *2%
&&K534) W.8% ') &GGK,

+)' %!#,-( (!'-) ./00

1!('-&1')

64 789: ;< 9 J>=:D9J:B

&4 lL ls a meeLlng of Lhe mlnds beLween Lwo or
more persons whereby one blnds hlmself, wlLh
respecL Lo Lhe oLher, or where boLh parLles blnd
Lhemselves reclprocally ln favor of one anoLher,
Lo fulflll a presLaLlon Lo glve, Lo do, or noL Lo do.
!7-89:.) ;<=->.$-28/ .8: +28$#.?$/) 4666 9:) @%
54K,

64 789: ;< :8C N;FFCDC=JC ?C:MCC= 9= >?@;A9:;>=
9=N 9 J>=:D9J:B

&4 Whlle a conLracL ls one of Lhe sources of
obllgaLlons, an obllgaLlon ls Lhe legal Lle or
relaLlons lLself LhaL exlsLs afLer a conLracL has
been enLered lnLo.
212
1$+$# #&7 ',&04

Pence, Lhere can be no conLracL lf Lhere ls no
obllgaLlon. 8uL an obllgaLlon may exlsL wlLhouL a
conLracL. !\9 X928) ;<=->.$-28/ .8: +28$#.?$/)
4665 9:) @% 4K54K3,

$5 ,)),('$&# -,6*$)$',) !/ & 1!('-&1'

64 ):9:C :8C C<<C=:;9@ C@CEC=:< >F J>=:D9J:<5

&4 1!1
1. 1onsenL,
2. !b[ecL or sub[ecL maLLer, and
3. 1ause or conslderaLlon.

64 ):9:C :8C J89D9J:CD;<:;J< >F 9 J>=:D9J:5

&4 -!0&
1. -elaLlvlLy !"#$% &5&&) *++,
2. !bllgaLorlness and consensuallLy!"#$%
&5&') *++,
3. 0uLuallLy !"#$% &56K) *++,
4. &uLonomy !"#$% &56() *++,

1!(),('

64 789: 9DC :8C C@CEC=:< >F J>=<C=:B

&4 #01-
1. #egal capaclLy of Lhe conLracLlng
parLles,
2. 0anlfesLaLlon of Lhe conformlLy of Lhe
conLracLlng parLles,
3. arLles' 1onformlLy Lo Lhe ob[ecL, cause,
Lerms and condlLlon of Lhe conLracL
musL be lnLelllgenL, sponLaneous and
free from all vlces of consenL, and
4. 1he conformlLy musL be -eal.

(>:C4 We follow Lhe $I92#M 2H ?2>8-$-28 and noL Lhe
Lheory of manlfesLaLlon. under our Clvll Law, Lhe
offer & accepLance concur only when Lhe offeror
comes Lo know, and noL when Lhe offeree merely
manlfesLs hls accepLance.

64 789: 9DC :8C DCPK;<;:C< >F 9 I9@;N J>=<C=:B

&4 lL should be:

1. lnLelllgenL, or wlLh an exacL noLlon of
Lhe maLLer Lo whlch lL refers,

(>:C4 lnLelllgence ln consenL ls vlLlaLed by
error, freedom by vlolence, lnLlmldaLlon
or undue lnfluence, and sponLanelLy by
fraud.

2. lree, and
3. SponLaneous.

64 789: ;< :8C CFFCJ: >= :8C I9@;N;:W >F 9 J>=:D9J:
;F J>=<C=: ;< DC@KJ:9=:B

&4 A conLracL ls valld even Lhough one of Lhe
parLles enLered lnLo lL agalnsL hls wlshes and
deslres or even agalnsL hls beLLer [udgmenL.
ConLracLs are also valld even Lhough Lhey are
enLered lnLo by one of Lhe parLles wlLhouL hope
of advanLage or proflL !Y.#$-89] B% b28>_28> .8:
LI.8>I.- V.8_-8> +2#@%) S0 *2% X'3G() `9<% &G)
&G&6,%

64 789: 9DC :8C R;=N< >F <;EK@9:;>= >F J>=:D9J:B

&4
1. "</2=A$9 - Lhe conLracLlng parLles do
noL lnLend Lo be bound by Lhe conLracL
aL all, Lhus Lhe conLracL ls B2-:.

2. 09=.$-B9 - Lhe real LransacLlon ls hldden,
Lhe conLracLlng parLles conceal Lhelr
Lrue agreemenL, blnds Lhe parLles Lo
Lhelr real agreemenL when lL does noL
pre[udlce Lhlrd persons or ls noL
lnLended for any purpose conLrary Lo
law, morals, eLc. lf Lhe concealed
conLracL ls lawful, lL ls absoluLely
enforceable, provlded lL has all Lhe
essenLlal requlslLes: consenL, ob[ecL,
and cause.

As Lo Lhlrd persons wlLhouL noLlce, Lhe
apparenL conLracL ls valld for purposes
beneflclal Lo Lhem. As Lo Lhlrd persons
wlLh noLlce of Lhe slmulaLlon, Lhey
acqulre no beLLer rlghL Lo Lhe slmulaLed
conLracL Lhan Lhe orlglnal parLles Lo Lhe
same.

1!('2&1')

64 ';D> ;< 9 8>@NCD >F 9= >DN;=9DW :;E?CD @;JC=<C
;<<KCN ?W :8C "KDC9K >F />DC<:DW5 3C CTCJK:CN 9
NCCN >F 9<<;A=EC=: ;= F9I>D >F :8C G9I;CD<5 &: :8C
:;EC :8C <9;N NCCN >F 9<<;A=EC=: M9< CTCJK:CNX
';D> 89N 9 OC=N;=A 9OO@;J9:;>= F>D 9= 9NN;:;>=9@
F>DC<: J>=JC<<;>=5 3C=JCX :8CW C=:CDCN ;=:>
9=>:8CD 9ADCCEC=:5

&F:CDM9DN<X :8C G9I;CD<X =>M 9J:;=A 9< :;E?CD
@;JC=<C 8>@NCD< ?W I;D:KC >F :8C NCCN >F
9<<;A=EC=: C=:CDCN ;=:> 9 F>DC<: J>=<>@;N9:;>=
9ADCCEC=: M;:8 >:8CD >DN;=9DW :;E?CD @;JC=<C
8>@NCD<5 />D F9;@KDC >F :8C G9I;CD< :> O9W :8C
?9@9=JC NKC K=NCD :8C :M> NCCN< >F 9<<;A=EC=:X
';D> F;@CN 9= 9J:;>= 9A9;=<: :8CE5 &DC :8C NCCN<
>F 9<<;A=EC=: =K@@ 9=N I>;N F>D :>:9@ 9?<C=JC >F
J>=<;NCD9:;>= 9=N =>=FK@F;@@EC=: >F :8C
J>=N;:;>=<B

&4 1he conLemporaneous and subsequenL acLs of
1lro and Lhe !avlers reveal LhaL Lhe cause sLaLed
ln Lhe flrsL deed of asslgnmenL ls false. lL ls seLLled
LhaL Lhe prevlous and slmulLaneous and
subsequenL acLs of Lhe parLles are properly
cognlzable -8:-?-. of Lhelr Lrue lnLenLlon. Where
Lhe parLles Lo a conLracL have glven lL a pracLlcal
consLrucLlon by Lhelr conducL as by acLs ln parLlal
performance, such consLrucLlon may be
consldered by Lhe courL ln consLrulng Lhe
conLracL, deLermlnlng lLs meanlng and
ascerLalnlng Lhe muLual lnLenLlon of Lhe parLles aL
Lhe Llme of conLracLlng. 1he flrsL deed of
asslgnmenL ls a relaLlvely slmulaLed conLracL
whlch sLaLes a false cause or conslderaLlon, or
one where Lhe parLles conceal Lhelr Lrue
agreemenL. A conLracL wlLh a false conslderaLlon
ls noL null and vold @9# /9. under ArLlcle 1346 of
Lhe Clvll Code, a relaLlvely slmulaLed conLracL,
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.
!W.B-9# B% +") S%0% *2% X3K&G3) Y.#% &') &GG6,

64 789: 9DC J>=:D9J:< >F 9N8C<;>=B

&4 Cne parLy has already a prepared form of a
conLracL, conLalnlng Lhe sLlpulaLlons he deslres,
and he slmply asks Lhe oLher parLy Lo agree Lo
Lhem lf he wanLs Lo enLer lnLo Lhe conLracL.

64 789: 9DC :8C C@CEC=:< >F 9 I9@;N >FFCD 9=N
9JJCO:9=JCB

&4
21S
1. ueflnlLe - unequlvocal
2. lnLenLlonal
3. CompleLe - uncondlLlonal

64 789: 9DC :8C DCPK;<;:C< >F 9 I9@;N >FFCDB

&4
1. MusL be cerLaln
2. May be made orally or ln wrlLlng, A8=9//
Lhe law prescrlbes a parLlcular form

64 78C= N>C< >FFCD ?CJ>EC ;=CFFCJ:;ICB

&4
1. ueaLh, clvll lnLerdlcLlon, lnsanlLy or
lnsolvency of elLher parLy before
accepLance ls conveyed

2. Lxpress or lmplled revocaLlon of Lhe
offer by Lhe offeree

3. Cuallfled or condlLlonal accepLance of
Lhe offer, whlch becomes counLeroffer

4. Sub[ecL maLLer becomes lllegal or
lmposslble before accepLance ls
communlcaLed

64 789: ;< :8C DK@C >= J>EO@CT >FFCDB
&4
1. ;HH9#/ .#9 -8$9##9=.$9: - conLracL ls
perfecLed lf all Lhe offers are accepLed
2. ;HH9#/ .#9 82$ -8$9##9=.$9: - slngle
accepLance of each offer resulLs ln a
perfecLed conLracL unless Lhe offeror
has made lL clear LhaL one ls dependenL
upon Lhe oLher and accepLance of boLh
ls necessary.

64 789: ;< :8C DK@C >= 9NICD:;<CEC=:< 9< >FFCD<B

&4
1. VA/-89// .:B9#$-/9198$/ NnoL a deflnlLe
offer, buL mere lnvlLaLlon Lo make an
offer, unless lL appears oLherwlse
2. ":B9#$-/9198$ H2# <-::9#/ N
onlylnvlLaLlon Lo make proposals and
adverLlser ls noL bound Lo accepL Lhe
hlghesL or lowesL bldder, unless lL
appears oLherwlse.

64 789: 9DC :8C CFFCJ:< >F 9= >O:;>=B

&4 CpLlon may be wlLhdrawn anyLlme before
accepLance ls communlcaLed buL noL when
supporLed by a conslderaLlon oLher Lhan purchase
prlce - opLlon money.

* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
+)' %!#,-( (!'-) ./00

64 789: 9DC :8C DCPK;<;:C< >F 9 I9@;N 9JJCO:9=JCB

&4
1. MusL be absoluLe, a quallfled
accepLance consLlLuLes a ?2A8$9#2HH9#
2. no speclfled form <A$ when Lhe offeror
speclfles a parLlcular form, such musL
be complled wlLh

(>:C4 Cffer or accepLance, or boLh, expressed ln
elecLronlc form, ls B.=-:, A8=9// 2$I9#R-/9 agreed by
Lhe parLles (elecLronlc conLracLs).
64 789: ;< :8C OCD;>N F>D 9JJCO:9=JCB

&4
1. L$.$9: H-P9: @9#-2: -8 $I9 2HH9#
a. MusL be made wlLhln Lhe perlod
glven by Lhe offeror
l. As Lo wlLhdrawal of Lhe offer:

%-4 lL can be made aL any Llme
before accepLance ls made, by
communlcaLlng such wlLhdrawal

SH(4 When Lhe opLlon ls founded
upon a conslderaLlon, as someLhlng
pald or promlsed slnce parLlal
paymenL of Lhe purchase prlce ls
consldered as proof of Lhe perfecLlon
of Lhe conLracL

2. *2 /$.$9: H-P9: @9#-2:
a. Cffer ls made Lo a person presenL -
accepLance musL be made
lmmedlaLely
b. Cffer ls made Lo a person absenL -
accepLance may be made wlLhln
such Llme LhaL, under normal
clrcumsLances, an answer can be
recelved from hlm

(>:C4 AccepLance may be revoked before lL comes
Lo Lhe knowledge of Lhe offeror (wlLhdrawal of offer)

!"G,1'

64 789: 9DC :8C DCPK;<;:C< >F 9= >?LCJ:B

&4
1. ueLermlnaLe as Lo klnd (even lf noL
deLermlnaLe, provlded lL ls posslble Lo
deLermlne Lhe same wlLhouL Lhe need
of a new conLracL),
2. LxlsLlng or Lhe poLenLlallLy Lo exlsL
subsequenL Lo Lhe conLracL,
3. MusL be llclL,
214
4. WlLhln Lhe commerce of man, and
3. 1ransmlsslble.

(>:C4 1he mosL evldenL and fundamenLal requlslLe
ln order LhaL a Lhlng, rlghL or servlce may be Lhe
ob[ecL of a conLracL, lL should be ln 9P-/$98?9 .$ $I9
12198$ 2H $I9 ?9=9<#.$-28 2H $I9 ?28$#.?$) 2# .$
=9./$) -$ ?.8 9P-/$ /A</9QA98$=M 2# -8 $I9 HA$A#9%

64 789: 9DC :8C :8;=A< M8;J8 J9= ?C :8C >?LCJ:
>F J>=:D9J:<B

&4
%-4 All Lhlngs or servlces may be Lhe ob[ecL of
conLracLs.

SH(<4
1. 1hlngs ouLslde Lhe commerce of men,
2. lnLransmlsslble rlghLs,
3. luLure lnherlLance, excepL ln cases
expressly auLhorlzed by law,
4. Servlces whlch are conLrary Lo law,
morals, good cusLoms, publlc order or
publlc pollcy,
3. lmposslble Lhlngs or servlces, and
6. Cb[ecLs whlch are noL posslble of
deLermlnaLlon as Lo Lhelr klnd.

64 & J>=:D9J: >F <9@C >F 9 @>: <:;OK@9:C< :89: :8C
lO9WEC=: >F :8C FK@@ J>=<;NCD9:;>= ?9<CN >= 9
<KDICW <89@@ ?C NKC 9=N O9W9?@C ;= h WC9D< FD>E
:8C CTCJK:;>= >F 9 F>DE9@ NCCN >F <9@Cl5 $< :8;< 9
J>=N;:;>=9@ J>=:D9J: >F <9@CB

&4 no, lL ls noL. 1he sLlpulaLlon ls noL a condlLlon
whlch affecLs Lhe efflcacy of Lhe conLracL of sale.
lL merely provldes Lhe manner by whlch Lhe full
conslderaLlon ls Lo be compuLed and Lhe Llme
wlLhln whlch Lhe same ls Lo be pald. 8uL lL does
noL affecL ln any manner Lhe effecLlvlLy of Lhe
conLracL. !b9-#/ 2H L.8 "8:#9/B%02:#->A9]) S%0%
*2% &5'(53) Y.M 5&) 4666,

1&*),

64 789: 9DC :8C DCPK;<;:C< >F 9 J9K<CB

&4 lL musL:
1. exlsL
2. be Lrue
3. be llclL

64 789: 9DC :8C :M> ODC<KEO:;>=< ;= J>=:D9J:<
9< :> J9K<CB

&4
1. Lvery conLracL ls presumed Lo have a
cause, and
2. 1he cause ls valld.

1$+$# #&7 ',&04

1!('2&1')

64 789: 9DC :8C R;=N< >F J9K<C<B

&4
1. +.A/9 2H 289#2A/ ?28$#.?$/ - Lhe
presLaLlon or promlse of a Lhlng or
servlce by Lhe oLher
21S
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
2. +.A/9 2H #91A89#.$2#M ?28$#.?$/- Lhe
servlce or beneflL remuneraLed
3. +.A/9 2H >#.$A-$2A/ ?28$#.?$/ - Lhe
mere llberallLy of Lhe donor or
benefacLor
4. "??9//2#M N ldenLlcal wlLh cause of
prlnclpal conLracL, Lhe loan whlch lL
derlved lLs llfe and exlsLence (9%>%:
morLgage or pledge)

64 2;<:;=AK;<8 J9K<C FD>E E>:;IC5

&4
1&*), 0!'$+,
ulrecL and mosL
proxlmaLe reason of a
conLracL
lndlrecL or remoLe
reasons
Cb[ecLlve and [urldlcal
reason of conLracL
sychologlcal or purely
personal reason
LegallLy or lllegallLy of
cause affecLs Lhe
exlsLence or valldlLy of
Lhe conLracL
LegallLy or lllegallLy of
moLlve does noL affecL
Lhe exlsLence or valldlLy
of conLracL
Cause ls always Lhe same
for each conLracLlng
parLy
MoLlve dlffers for each
conLracLlng parLy

64 789: ;< :8C CFFCJ: >F :8C CDD>D >F J9K<C >=
J>=:D9J:<B

&4
1. Absence of cause (wanL of cause, Lhere
ls LoLal lack or absence of cause) -
Confers no rlghL and produces no legal
effecL
2. lallure of cause uoes noL render Lhe
conLracL vold
3. lllegallLy of cause (Lhe cause ls conLrary
Lo law, morals, good cusLoms, publlc
order and publlc pollcy)-ConLracL ls null
and vold
4. lalslLy of cause (Lhe cause ls sLaLed buL
Lhe cause ls noL Lrue)-ConLracL ls vold,
unless Lhe parLles show LhaL Lhere ls
anoLher cause whlch ls Lrue and lawful
3. Leslon or lnadequacy of cause -uoes
noL lnvalldaLe Lhe conLracL, A8=9//d
a. Lhere ls fraud, mlsLake, or undue
lnfluence,
b. when Lhe parLles lnLended a
donaLlon or some oLher
conLracL,or
c. ln cases speclfled by law
(9%>%conLracLs enLered when ward
suffers leslon of more Lhan 23)

$$5 Q$(2) !/ 1!('-&1'

64 789: 9DC :8C R;=N< >F J>=:D9J:<B

&4
1. +28/98/A.= conLracLs whlch are
perfecLed by Lhe mere meeLlng of Lhe
mlnds of Lhe parLles

2. 09.= ?28$#.?$/ LhaL requlre :9=-B9#M for
perfecLlon -creaLlon of real rlghLs over
lmmovable properLy musL be wrlLLen

3. L2=918 ?28$#.?$/- conLracLs whlch
musL appear ln wrlLlng, such as:

a. uonaLlons of real esLaLe or of
movables lf Lhe value exceedlng
3,000,
b. 1ransfer of large caLLle,
c. SLlpulaLlon Lo pay lnLeresL ln loans,
d. Sale of land Lhrough an agenL,
e. arLnershlp Lo whlch lmmovables
are conLrlbuLed,
f. SLlpulaLlon llmlLlng carrler's llablllLy
Lo less Lhan exLraordlnary
dlllgence, or
g. ConLracLs of anLlchresls and sale of
vessels.

64 789: ;< :8C OD;=J;O@C >F DC@9:;I;:W >F
J>=:D9J: 82$ 28=M beLween
parLles <A$ exLends Lo Lhe helrs, successors ln
lnLeresL, and asslgnees of Lhe parLles,
@#2B-:9: LhaL Lhe conLracL lnvolves
Lransmlsslble rlghLs by Lhelr naLure, or by
sLlpulaLlon or by provlslon of law.

SH(<4
1. L$-@A=.$-28 @2A# .A$#A- (sLlpulaLlon ln
favor of a Lhlrd person) - beneflLs
dellberaLely conferred by parLles Lo a
conLracL upon Lhlrd persons.

09QA-/-$9/d
a. 1he sLlpulaLlon musL be @.#$, noL
whole of Lhe conLracL,
b. ConLracLlng parLles musL have
clearly and dellberaLely ?28H9##9:
a favor upon Lhlrd person,

+)' %!#,-( (!'-) ./00

c. 1hlrd person musL have
?211A8-?.$9: hls accepLance, and
d. *9-$I9# of Lhe conLracLlng parLles
bears Lhe legal represenLaLlon of
Lhe Lhlrd person.

2. When a Lhlrd person lnduces a parLy Lo
vlolaLe Lhe conLracL

09QA-/-$9/d
a. LxlsLence of a valld conLracL
b. 1hlrd person has knowledge of
such conLracL
c. 1hlrd person lnLerferes wlLhouL
[usLlflcaLlon
3. 1hlrd persons comlng lnLo possesslon of
Lhe ob[ecL of Lhe conLracL creaLlng real
rlghLs

4. ConLracLs enLered lnLo ln fraud of
credlLors

64 /;C@NEC=d< $=<KD9=JC ;<<KCNX ;= F9I>D >F 0.'X
9 J>EE>= J9DD;CDX 9JJ;NC=: ;=<KD9=JC O>@;JW5
hij >F :8C ODCE;KE M9< O9;N ?W :8C ND;ICD5 '8C
O>@;JW ;=N;J9:CN :89: :8C 1>EO9=W M;@@ ;=NCE=;FW
:8C ND;ICD >F :8C IC8;J@C >D 8;< DCODC<C=:9:;IC<
KO>= 8;< NC9:85 78;@C :8C O>@;JW M9< ;= F>DJCX
:8C :9T;J9? ND;IC= ?W 19D@;:>X EC: M;:8 9=
9JJ;NC=:5 19D@;:> N;CN5 0.' 9=N 19D@;:>d< O9DC=:<
F;@CN 9 J>EO@9;=: 9A9;=<: :8C J>EO9=W :> J>@@CJ:
:8C OD>JCCN< >F :8C O>@;JW5 /;C@NEC=Y< 9NE;::CN
:8C CT;<:C=JC :8CDC>FX ?K: O@C9NCN @9JR >F J9K<C
>F 9J:;>= >= :8C O9D: >F :8C O9DC=:<5 2CJ;NC5

&4 ?es. CarllLo's parenLs who, admlLLedly, are hls
sole helrs have a dlrecL cause of acLlon agalnsL Lhe
Company. 1hls ls so because pursuanL Lo Lhe
sLlpulaLlons, Lhe Company wlll also lndemnlfy
Lhlrd parLles. 1he pollcy under conslderaLlon ls
Lyplcal of conLracLs @2A# .A$#A-, Lhls characLer
belng made more manlfesL by Lhe facL LhaL Lhe
deceased drlver pald 30 of Lhe premlums.
!+2QA-. B% `-9=:198c/ F8/A#.8?9 +2%) F8?%)S%0% *2%
X454J() *2B% 4G) &G(K,
216
1$+$# #&7 ',&04

64 789: ;< :8C >?@;A9:>DW F>DJC >F J>=:D9J:D ?>DD>MCN 9 @9DAC 9E>K=: FD>E
">DD>EC>X F>D M8;J8 8C E>D:A9ACN 8;< OD>OCD:W
?K: NCF9K@:CN5">DD>EC> ODC<<CN 8;E F>D
<C::@CEC=:5 '8C @9::CD ;=<:C9N >FFCDCN :> CTCJK:C
9 OD>E;<<>DW =>:C J>=:9;=;=A 9 OD>E;<C :> O9W
8;< NC?: 9< <>>= 9< 8C ;< 9?@CX CIC= 9F:CD Zi WC9D<
9=N :89: 8C M9;IC< 8;< D;A8: :> ODC<JD;O:;>=5
789: 9DC :8C CFFCJ:< >F <9;N <:;OK@9:;>= :> :8C
9J:;>= F>D J>@@CJ:;>= F;@CN ?W ">DD>EC>B

&4 none. 1he rule ls LhaL a lawful promlse made
for a lawful conslderaLlon ls noL lnvalld merely
because an unlawful promlse was made aL Lhe
same Llme and for Lhe same conslderaLlon. 1hls
rule applles alLhough Lhe lnvalldlLy ls due Lo
vlolaLlon of a sLaLuLory provlslon, unless Lhe
sLaLuLe expressly or by necessary lmpllcaLlon
declares Lhe enLlre conLracL vold. 1hus, even wlLh
such walver of prescrlpLlon, conslderlng LhaL lL
was Lhe lnLenL of Lhe parLles Lo effecLuaLe Lhe
Lerms of Lhe promlssory noLe, Lhere ls no legal
obsLacle Lo Lhe acLlon for collecLlon flled by
8orromeo. !V2##2192 B% +")S%0% *2% X44G(4)
L9@$% 4K) &GJ4,

(>:C4 Where an agreemenL founded on a legal
conslderaLlon conLalns several promlses, or a
promlse Lo do several Lhlngs, and a parL only of Lhe
Lhlngs Lo be done are lllegal, Lhe promlses whlch can
be separaLed, or Lhe promlse, so far as lL can be
separaLed, from Lhe lllegallLy, may be
valld.!V2##2192 B% +")S%0% *2% X44G(4) L9@$% 4K)
&GJ4,

64 789: ;< :8C OD;=J;O@C >F EK:K9@;:W >F
J>=:D9J:F 9K:>=>EW >F
J>=:D9J:<B
&4 lL ls Lhe freedom of Lhe parLles Lo conLracL and
lncludes Lhe freedom Lo sLlpulaLe provlded Lhe
sLlpulaLlons are noL conLrary Lo law, morals, good
cusLoms, publlc order or publlc pollcy. !"#$% &56()
*++,

&5 1!(),()*&# 1!('-&1')

64 789: 9DC J>=<C=<K9@ J>=:D9J::C4 1hls ls only Lhe general rule.

"5 -,&# 1!('-&1')

64 789: 9DC DC9@ J>=:D9J:DE9@ J>=:D9J:<B

217
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
&4 ConLracLs whlch requlre a speclal form for
perfecLlon.

64 789: 9DC :8C F>DE9@;:;C< DCPK;DCN ;= :8C
F>@@>M;=A J>=:D9J:=9:;>=<4
a. personal properLy lf value
exceeds 3000, Lhe donaLlon
and accepLance musL boLh be
wrlLLen.
b. b. real properLy:
l. donaLlon musL be ln a publlc
lnsLrumenL, speclfylng Lhereln Lhe
properLy donaLed and value of
charges whlch donee musL saLlsfy.
ll. accepLance musL be wrlLLen, elLher
ln Lhe same deed of donaLlon or ln a
separaLe lnsLrumenL.
lll. lf accepLance ls ln a separaLe
lnsLrumenL, Lhe donor shall be
noLlfled Lherof ln auLhenLlc form,
and Lhls sLep musL be noLed ln boLh
lnsLrumenLs.
(>:C4 1he accepLance ln a separaLe
documenL musL be a publlc lnsLrumenL.

`5 H9D:=CD<8;O M8CDC DC9@ OD>OCD:W
J>=:D;?K:CN4
l. Lhere musL be a publlc lnsLrumenL
regardlng Lhe parLnershlp.
ll. Lhe lnvenLory of Lhe realLy musL be
made, slgned by Lhe parLles and
aLLached Lo Lhe publlc lnsLrumenL.

3. &=:;J8DC<;< Lhe amounL of Lhe prlnclpal
and lnLeresL musL be ln wrlLlng.

e5 &AC=JW :> <C@@ DC9@ OD>OCD:W >D 9=
;=:CDC<: :8CDC;= auLhorlLy of Lhe agenL
musL be ln wrlLlng.

h5 ):;OK@9:;>= :> J89DAC ;=:CDC<: lnLeresL
musL be sLlpulaLed ln wrlLlng.

]5 ):;OK@9:;>= @;E;:;=A J>EE>= J9DD;CDd<
NK:W >F CT:D9>DN;=9DW N;@;AC=JC :>
>DN;=9DW N;@;AC=JC4
l. musL be ln wrlLlng, slgned by
shlpper or owner
ll. supporLed by valuable conslderaLlon
oLher Lhan Lhe servlce rendered by
Lhe comon carrler
lll. reasonable, [usL and noL conLrary Lo
publlc pollcy.
\5 189::C@ E>D:A9AC personal properLy
musL be recorded ln Lhe ChaLLel
MorLgage 8eglsLer

$$$5 /!-0 !/ 1!('-&1')

64 789: 9DC DK@C< >= :8C F>DE >F J>=:D9J:.$2#M, ln
whaLever form Lhey may have been
enLered lnLo, provlded all essenLlal
requlslLes for Lhelr valldlLy are presenL.

2. ConLracLs musL be ln a cerLaln form -
RI98 Lhe law requlres LhaL a conLracL
be ln some form Lo be:
a. valld,
b. enforceable, or
c. for Lhe convenlence of Lhe parLles.

3. 1he parLles may compel each oLher Lo
reduce Lhe verbal agreemenL lnLo
wrlLlng.

(>:C4
%-4 lorm ls noL requlred ln consensual conLracLs.

SH(<4 When Lhe law requlres a conLracL be ln
cerLaln for lLs:
1. valldlLy (formal conLracLs), or
2. enforceablllLy (under SLaLuLe of lrauds).

64 789: 9DC :8C 9J:< M8;J8 EK<: 9OOC9D ;= 9
OK?@;J N>JKEC=:B

&4
1. uonaLlon of real properLles !"#$% J&G,,
2. arLnershlp where lmmoveable
properLy or real rlghLs are conLrlbuLed
Lo Lhe common fund !"#$/% &&J& ^
&JJ5,,
3. 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
ls governed by ArLs. 1403, no. 2, and
1403 f"#$% &5'K !&,g,
4. 1he cesslon, repudlaLlon or
renunclaLlon of heredlLary rlghLs or of
Lhose of Lhe con[ugal parLnershlp of
galns f"#$% &5'K !4,g
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 f"#$% &5'K !5,g,

+)' %!#,-( (!'-) ./00

6. 1he cesslon of acLlons or rlghLs
proceedlng from an acL appearlng ln a
publlc documenL f"#$% &5'K !3,g.

64 789: 9DC J>=:D9J:< :89: EK<: ?C DCA;<:CDCNB

&4
1. ChaLLel morLgages !"#$% 4&36,
2. Sale or Lransfer of large caLLle !+.$$=9
09>-/$#.$-28 "?$,

-,/!-0&'$!(

64 789: ;< DCF>DE9:;>= >F ;=<:DKEC=::C4 8eformaLlon ls based on [usLlce and equlLy.

64 789: 9DC :8C DCPK;<;:C< ;= DCF>DE9:;>= >F
;=<:DKEC=:<B
218
1$+$# #&7 ',&04

&4
1. MeeLlng of Lhe mlnds Lo Lhe conLracL
2. 1rue lnLenLlon ls noL expressed ln Lhe
lnsLrumenL
3. 8y reason of 0&-/$:
a. 0lsLake,
b. &ccldenL,
c. -elaLlve slmulaLlon,
d. /raud, or
e. $nequlLable conducL
4. Clear and convlnclng proof of MA8ll

(>:C4 When Lhere ls no meeLlng of Lhe mlnds, Lhe
proper remedy ls .88A=198$ and noL reformaLlon.

64 $= M89: J9<C< ;< DCF>DE9:;>= >F ;=<:DKEC=:<
=>: 9@@>MCNB

&4
1. Slmple, uncondlLlonal donaLlons lnLer
vlvos
2. Wllls
3. When Lhe agreemenL ls vold
4. When an acLlon Lo enforce Lhe
lnsLrumenL ls flled (esLoppel)

64 789: ;< :8C ODC<JD;O:;IC OCD;>N ;= DCF>DE9:;>=
>F ;=<:DKEC=: E9W 9<R F>D :8C DCF>DE9:;>= >F 9=
;=<:DKEC=:B

&4 lL may be ordered aL Lhe lnsLance of:
1. lf Lhe mlsLake ls muLual - elLher parLy or
hls successors ln lnLeresL, oLherwlse,
2. upon peLlLlon of Lhe ln[ured parLy, or
3. hls helrs and asslgns.

(>:C4 When one of Lhe parLles has broughL an acLlon
Lo enforce Lhe lnsLrumenL, no subsequenL
reformaLlon can be asked (esLoppel).

64 $= J9<C >F DCF>DE9:;>= >F J>=:D9J:<X ;< :8C
ODC<JD;O:;>= OCD;>N ;= ?D;=A;=A 9= 9J:;>= F>D
DCF>DE9:;>= DK= FD>E :8C :;EC :8C J>=:D9J:
?CJ9EC N;<9NI9=:9AC>K< :> >=C O9D:WB

&4 ln reformaLlon of conLracLs, whaL ls reformed
ls noL Lhe conLracL lLself, buL Lhe lnsLrumenL
embodylng Lhe conLracL. lL follows LhaL wheLher
Lhe conLracL ls dlsadvanLageous or noL ls
lrrelevanL Lo reformaLlon and Lherefore, cannoL
be an elemenL ln Lhe deLermlnaLlon of Lhe perlod
for prescrlpLlon of Lhe acLlon Lo reform.

$+5 2,/,1'$+, 1!('-&1')

64 789: E9W ?C :8C <:9:K< >F J>=:D9J:=:D9J:<B

&4 1hose whlch have caused a parLlcular
economlc damage elLher Lo one of Lhe parLles or
Lo a Lhlrd person and whlch may be seL aslde
even lf valld. lL may be seL aslde ln whole or ln
parL, Lo Lhe exLenL of Lhe damage caused. !"#$%
&5K&) *++,

64 78;J8 J>=:D9J:< 9DC DC<J;<<;?@CB

&4
1. LnLered lnLo by persons exerclslng
flduclary capaclLy:
a. LnLered lnLo by guardlan whenever
ward suffers damage more Lhan x
of value of properLy.
b. Agreed upon ln represenLaLlon of
absenLees, lf absenLee suffers
leslon by more Lhan x of value of
properLy.

1!('2&1')

c. ConLracLs where resclsslon ls based
on fraud commlLLed on credlLor
(.??-28@.A=-.8.)
d. Cb[ecLs of llLlgaLlon, conLracL
enLered lnLo by defendanL wlLhouL
knowledge or approval of llLlganLs
or [udlclal auLhorlLy
e. aymenL by an lnsolvenL - on
debLs whlch are noL yeL due,
pre[udlces clalm of oLhers
f. rovlded for by law !"#$/% &'4()
&'53) &'5K) &'5G) &'34) &''()
&'(6) &'(J ^ &('G) *++,

2. aymenLs made ln sLaLe of lnsolvency:
a. lalnLlff has no oLher means Lo
malnLaln reparaLlon
219
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
b. lalnLlff musL be able Lo reLurn
whaLever he may be obllged Lo
reLurn due Lo resclsslon
c. 1he Lhlngs musL noL have been
passed Lo Lhlrd persons ln good
falLh
d. lL musL be made wlLhln 4 yrs.

64 789: 9DC :8C DCPK;<;:C< ?CF>DC 9 J>=:D9J:
C=:CDCN ;=:> ;= FD9KN >F JDCN;:>D< E9W ?C
DC<J;=NCNB

&4
1. 1here musL be credlL exlsLlng prlor Lo
Lhe celebraLlon of Lhe conLracL,
2. 1here musL be fraud, or aL leasL, Lhe
lnLenL Lo commlL fraud Lo Lhe pre[udlce
of Lhe credlLor seeklng resclsslon,
3. 1he credlLor cannoL ln any legal manner
collecL hls credlL (subsldlary characLer of
resclsslon), and
4. 1he ob[ecL of Lhe conLracL musL noL be
legally ln possesslon of a Lhlrd person ln
good falLh.

64 2;<:;=AK;<8 DC<J;<<;>= FD>E DC<>@K:;>=5

-,)!#*'$!(
a&-'5 ZZ[Zc
-,)1$))$!(
a&-'$1#, Zb_Zc
8oLh presuppose conLracLs valldly enLered lnLo and
subslsLlng and boLh requlre muLual resLlLuLlon when
proper
C-+.,&
rlnclpal acLlon.
reLallaLory ln characLer
Subsldlary remedy
J,).*2/ ;), <&/(1//1)*
Cnly ground ls non
performance of
obllgaLlon
3 grounds under ArL.
1381. (leslons or fraud of
credlLors)
nonperformance ls noL
lmporLanL
"6601(-3101+:
Applles only Lo reclprocal
obllgaLlons
Applles Lo boLh unllaLeral
and reclprocal
obllgaLlons
#&,/)* K8) (-* B*1+1-+& +8& "(+1)*
Cnly Lhe ln[ured parLy
who ls a parLy Lo Lhe
conLracL
Lven Lhlrd persons
pre[udlced by Lhe
conLracL may brlng Lhe
acLlon
A1'1*> ); #&,1)2 3: +8& %).,+
CourL may flx a perlod or
granL exLenslon of Llme
for Lhe fulflllmenL of Lhe
obllgaLlon when Lhere ls
sufflclenL reason Lo
[usLlfy such exLenslon
CourL cannoL granL
exLenslon of Llme
#.,6)/&
CancellaLlon of Lhe
conLracL
8eparaLlon for damage
or ln[ury, allowlng parLlal
resclsslon of conLracL

(>:C4 Whlle ArLlcle 1191 uses Lhe Lerm resclsslon,"
Lhe orlglnal Lerm whlch was used ln Lhe old Clvll
Code, from whlch Lhe arLlcle was based, was
resoluLlon." !;8>B%+")S%0% *2% GJ53J) WA=M () &GGG,

64 789: ;< :8C >?@;A9:;>= JDC9:CN ?W :8C
DC<J;<<;>= >F :8C J>=:D9J:B

&4 MuLual resLlLuLlon of Lhlngs whlch are Lhe
ob[ecLs of Lhe conLracL and Lhelr frulLs and of Lhe
prlce wlLh lnLeresL.

64 78C= ;< EK:K9@ DC<:;:K:;>= =>: 9OO@;J9?@CB

&4
1. CredlLor dld noL recelve anyLhlng from
conLracL, or
2. 1hlng already ln possesslon of Lhlrd
persons ln good falLh, sub[ecL Lo
lndemnlLy only, lf Lhere are Lwo or more
allenaLlons - llablllLy of flrsL lnfracLor.

(>:C4 8esclsslon ls posslble only when Lhe person
demandlng resclsslon can reLurn whaLever he may
be obllged Lo resLore. A courL of equlLy wlll noL
resclnd a conLracL unless Lhere ls resLlLuLlon, LhaL ls,
Lhe parLles are resLored Lo Lhe /$.$A/ QA2
.8$9%!"#$-?=9 &5K',

64 -CWC< a<C@@CDc 9=N #;E a?KWCDc C=:CDCN ;=:> 9
J>=:D9J: :> <C@@ >F 9 O9DJC@ >F @9=N5 39DD;<>=
#KE?CD >JJKO;CN :8C OD>OCD:W 9< @C<<CC5 -CWC<
>FFCDCN :> DC:KD= :8C HZi E;@@;>= N>M= O9WEC=:
:> #;E ?CJ9K<C -CWC< M9< 89I;=A OD>?@CE< ;=
DCE>I;=A :8C @C<<CC FD>E :8C OD>OCD:W5 #;E
DCLCJ:CN -CWC<Y >FFCD5 #;E @C9D=CN :89: -CWC< 89N
9@DC9NW <>@N :8C OD>OCD:W :> 9=>:8CD5

+)' %!#,-( (!'-) ./00

'D;9@ J>KD:X ;= :8;< J9<CX N;DCJ:CN -CWC< :> NCO><;:
:8C HZi E;@@;>= N>M=O9WEC=: M;:8 :8C J@CDR >F
J>KD: ?K: -CWC< DCFK<CN5 2>C< -CWC< 89IC :8C
>?@;A9:;>= :> NCO><;: :8C HZi E;@@;>=
N>M=O9WEC=: ;= :8C J>KD:B

&4 ?es. 1here ls also no plauslble or [usLlflable
reason for 8eyes Lo ob[ecL Lo Lhe deposlL of Lhe
10 mllllon down paymenL ln courL. 1he conLracL
Lo sell can no longer be enforced because 8eyes
hlmself subsequenLly sold Lhe properLy. 8oLh Llm
and 8eyes are seeklng for resclsslon of Lhe
conLracL.

8y seeklng resclsslon, a seller necessarlly offers Lo
reLurn whaL he has recelved from Lhe buyer. Such
a seller may noL Lake back hls offer lf Lhe courL
deems lL equlLable, Lo prevenL un[usL enrlchmenL
and ensure resLlLuLlon, Lo puL Lhe money ln
[udlclal deposlL.

(>:C4 ln Lhls case, lL was [usL, equlLable and proper
for Lhe Lrlal courL Lo order Lhe deposlL of Lhe down
paymenL Lo prevenL un[usL enrlchmenL by 8eyes aL
Lhe expense of Llm. ueposlLlng Lhe down paymenL ln
courL ensure lLs resLlLuLlon Lo lLs rlghLful owner. Llm,
on Lhe oLher hand, has noLhlng Lo refund, as he has
noL recelved anyLhlng under Lhe conLracL Lo sell.
!09M9/ B% X-1) a98> .8: b.##-/28 XA1<9#) F8?%) S%0%
*2% &5343&) "A>% &&) 4665,

64 789: 9DC :8C ?9NAC< >F FD9KN 9::C=N;=A <9@C<X
9< NC:CDE;=CN ?W :8C J>KD:<B

&4
1. ConslderaLlon of Lhe conveyance ls
-8.:9QA.$9 or flcLlLlous,
2. 1ransfer was made by a u8 .H$9# a sulL
has been begun and whlle lL ls pendlng
agalnsL hlm
3. Sale upon credlL by an -8/2=B98L u8,
4. 1he presence of evldence of =.#>9
lndebLedness or compleLe lnsolvency of
Lhe debLor,
3. 1ransfer of .== hls properLy by a u8
when he ls flnanclally embarrassed or
lnsolvenL,
6. 1ransfer ls made beLween H.$I9# .8:
/28, where Lhere are presenL some or
any of Lhe above clrcumsLances, and
7. `.-=A#9 of Lhe vendee Lo Lake excluslve
possesslon of Lhe properLy.

22u

64 789: 9DC :8C J89D9J:CD;<:;J< >F :8C D;A8: :>
DC<J;=NB

&4
1. Can be demanded only lf plalnLlff ls
ready, wllllng and able Lo comply wlLh
hls own obllgaLlon and defendanL ls noL,
2. noL absoluLe,
3. needs [udlclal approval ln Lhe absence
of a sLlpulaLlon allowlng for exLra
[udlclal resclsslon, ln cases of non
reclprocal obllgaLlons,
4. Sub[ecL Lo [udlclal revlew lf avalled of
exLra[udlclally,
3. May be walved expressly or lmplledly,
and
6. lmplled Lo exlsL ln reclprocal obllgaLlons
Lherefore need noL be expressly
sLlpulaLed upon.

64 09W 9= ;=LKDCN O9D:W 9I9;@ >F ?>:8 FK@F;@@EC=:
9=N DC<J;<<;>= 9< DCECNWB

&4
%-41he ln[ured parLy can only choose
beLween fulflllmenL and resclsslon of
Lhe obllgaLlon, and cannoL have boLh.

(>:C4 1hls applles only when Lhe
obllgaLlon ls posslble of fulflllmenL.

SH(4 lf fulflllmenL has become
lmposslble, ArLlcle 1191, nCC allows Lhe
ln[ured parLy Lo seek resclsslon even
afLer he has chosen fulflllmenL. !"M/28
L-128 B% ":.12/)S%0% *2% X5G5JK) "A>%
4K &GK3,

64 +CDEC= 9=N )C=CJ9 C=:CDCN ;=:> 9=
l>FF<C::;=A 9ADCCEC=:lX M8CDC )C=CJ9 ;< >?@;ACN
:> NC@;ICD J>=<:DKJ:;>= E9:CD;9@< :> +CDEC=X
M8> ;< >?@;ACN :> O9W )C=CJ9 9=N :> NC@;ICD
O><<C<<;>= >F ` J>=N>E;=;KE K=;:< :> )C=CJ9
KO>= ;:< J>EO@C:;>=5 )C=CJ9 F;@CN 9 J>EO@9;=: F>D
DC<J;<<;>= >F :8C >FF<C::;=A 9A9;=<: +CDEC=
9@@CA;=A :89: :8C @9::CD 89N <:>OOCN ;<<K;=A
OKDJ89<C >DNCD< >F J>=<:DKJ:;>= E9:CD;9@<
M;:8>K: I9@;N DC9<>=X :8K< DC<K@:;=A ;= :8C
<:>OO9AC >F NC@;ICD;C< >F J>=<:DKJ:;>= E9:CD;9@<
>= ;:< O9D:X ;= I;>@9:;>= >F :8C !FF<C::;=A
&ADCCEC=:5 19= :8C 9ADCCEC=: ?C DC<J;=NCNB

&4 ?es, because Lhe provlslons of Lhe offseLLlng
agreemenL are reclprocal ln naLure. ArLlcle 1191
of Lhe Clvll Code provldes Lhe remedy of
resclsslon (more approprlaLely, Lhe Lerm ls
"resoluLlon") ln case of reclprocal obllgaLlons,
where one of Lhe obllgors falls Lo comply wlLh
LhaL ls lncumbenL upon hlm.
1$+$# #&7 ',&04

1!('2&1')

1he quesLlon of wheLher a breach of conLracL ls
subsLanLlal depends upon Lhe aLLendanL
clrcumsLances. Seneca dld noL fall Lo fulflll lLs
obllgaLlon ln Lhe offseLLlng agreemenL. 1he
dlsconLlnuance of dellvery of consLrucLlon
maLerlals Lo vermen sLemmed from Lhe fallure of
vermen Lo send purchase orders Lo Seneca.
vermen would never have been able Lo fulflll lLs
obllgaLlon ln allowlng Seneca Lo exerclse Lhe
opLlon Lo Lransfer from hase l Lo hase ll, as Lhe
consLrucLlon of hase ll has ceased and Lhe
sub[ecL condomlnlum unlLs wlll never be
avallable. 1he lmposslblllLy of fulflllmenL of Lhe
obllgaLlon on Lhe parL of vermen necesslLaLes
resoluLlon of Lhe conLracL, for lndeed, Lhe non
fulflllmenL of Lhe obllgaLlon aforemenLloned
consLlLuLes subsLanLlal breach of Lhe agreemenL.
!E9#198 09.=$M \9B9=2@198$ +2#@% B% +" .8:
L989?. b.#:R.#9 +2%) F8?%) S%0% *2% &6&J(4) WA=M
() &GG5,

64 !=A 9=N <O>K<C< ->?@C< CTCJK:CN 9=
l9ADCCEC=: >F OKDJ89<C 9=N <9@Cl >F ` O9DJC@< >F
@9=N5 HKD<K9=: :> :8C J>=:D9J: :8CW CTCJK:CNX
!=A O9D:;9@@W O9;N :8C <O>K<C< :8C ?W NCO><;:;=A
;: M;:8 :8C ?9=R5 )K?<CPKC=:@WX !=A NCO><;:CN
<KE< >F E>=CW M;:8 :8C "H$ ;= 9JJ>DN9=JC M;:8
:8C;D <:;OK@9:;>= :89: !=A O9W :8C @>9= >F :8C
<O>K<C M;:8 "H$5 '> 9=<MCD F>D !=AY< ?9@9=JCX 8C
;<<KCN e O><:N9:CN J8CJR< M8;J8 MCDC
N;<8>=>DCN5 !=A F9;@CN :> DCO@9JC :8C J8CJR< 9=N
:> O9W :8C @>9= ;= FK@@5 19= :8C J>=:D9J: C=:CDCN
;=:> ?W !=A 9=N :8C <O>K<C< ?C DC<J;=NCNB

&4 no. 1he agreemenL of Lhe parLles ln Lhls case
may be seL aslde, buL noL because of a breach on
Lhe parL of Cng for fallure Lo compleLe paymenL
of Lhe purchase prlce. 8aLher, hls fallure Lo do so
broughL abouL a slLuaLlon whlch prevenLed Lhe
obllgaLlon of Lhe spouses Lo convey LlLle from
acqulrlng an obllgaLory force.

1he agreemenL of purchase and sale shows LhaL lL
ls ln Lhe naLure of a conLracL Lo sell. Cng's fallure
Lo compleLe paymenL of Lhe purchase prlce ls a
nonfulflllmenL of Lhe condlLlon of full paymenL
whlch rendered Lhe conLracL Lo sell lneffecLlve
and wlLhouL force and effecL. 1he breach
conLemplaLed ln ArLlcle 1191, nCC ls Lhe obllgor's
fallure Lo comply wlLh an obllgaLlon. ln Lhls case,
Cng's fallure Lo pay ls noL even a breach buL
merely an evenL whlch prevenLs Lhe vendor's
obllgaLlon Lo convey LlLle from acqulrlng blndlng
force.

221
(>:C4 1he conLracL enLered lnLo by Lhe parLles ln Lhe
case aL bar does noL fall under any of Lhose
menLloned by ArLlcle 1381. ConsequenLly, ArLlcle
1383 ls lnappllcable.
ln a conLracL Lo sell, Lhe paymenL of Lhe purchase
prlce ls a poslLlve suspenslve condlLlon, Lhe fallure of
whlch ls noL a breach, casual or serlous, buL a
slLuaLlon LhaL prevenLs Lhe obllgaLlon of Lhe vendor
Lo convey LlLle from acqulrlng an obllgaLory force.
!;8>B%+") S%0% *2% GJ53J) WA=M () &GGG,

64 %>@NC=D>N >FFCDCN :> ?KW 9 E>D:A9ACN
OD>OCD:W >M=CN ?W "9DDC:> -C9@:W :> M8;J8 ;:
O9;N 9= C9D=C<: E>=CW 9E>K=:;=A :> HZ E;@@;>=5
$: M9< 9ADCCN KO>= :89: %>@NC=D>N M>K@N O9W
:8C >K:<:9=N;=A >?@;A9:;>=< >F "9DDC:> -C9@:W
M;:8 *1H"5 3>MCICDX %>@NC=D>N N;N =>: O9W
*1H" ?CJ9K<C >F :8C ?9=R< NC=;9@ >F ;:< DCPKC<:
F>D :8C CT:C=<;>= :> O9W :8C >?@;A9:;>=5
'8CDC9F:CDX %>@NC=D>NX :8D>KA8 ;:< ?D>JRCDX
;=F>DECN "9DDC:> -C9@:W :89: ;: J>K@N =>: A>
:8D>KA8 M;:8 :8C OKDJ89<C >F :8C OD>OCD:W 9=N
9@<> NCE9=NCN :8C DCFK=N >F :8C C9D=C<: E>=CW
;: O9;N5 $= :8C 9?<C=JC >F 9 <OCJ;F;J <:;OK@9:;>=X
E9W :8C <C@@CD >F DC9@ C<:9:C K=;@9:CD9@@W DC<J;=N
:8C J>=:D9J: 9=N 9< 9 J>=<CPKC=JC RCCO :8C
C9D=C<: E>=CW :> 9=<MCD F>D N9E9AC< ;= :8C
CIC=: :8C <9@C F9;@< NKC :> :8C F9K@: >F :8C
OD><OCJ:;IC ?KWCDB

&4 no. Coldenrod and 8arreLLo 8ealLy dld noL
lnLend LhaL Lhe earnesL money or advance
paymenL would be forfelLed when Lhe buyer
should fall Lo pay Lhe balance of Lhe prlce,
especlally ln Lhe absence of a clear and express
agreemenL Lhereon.

Moreover, Coldenrod resorLed Lo exLra[udlclal
resclsslon of lLs agreemenL wlLh 8arreLLo 8ealLy.
under ArLlcle 1383, nCC, resclsslon creaLes Lhe
obllgaLlon Lo reLurn Lhe Lhlngs whlch were Lhe
ob[ecL of Lhe conLracL LogeLher wlLh Lhelr frulLs
and lnLeresL. 1herefore, by vlrLue of Lhe
exLra[udlclal resclsslon of Lhe conLracL Lo sell by
Coldenrod wlLhouL opposlLlon from 8arreLLo
8ealLy, whlch ln Lurn, sold Lhe properLy Lo oLher
persons, 8arreLLo 8ealLy, had Lhe obllgaLlon Lo
reLurn Lhe earnesL money whlch formed parL of
Lhe purchase prlce plus legal lnLeresL from Lhe
daLe lL recelved noLlce of resclsslon. lL would be
mosL lnequlLable lf 8arreLLo 8ealLy would be
allowed Lo reLaln Lhe money aL Lhe same Llme
approprlaLe Lhe proceeds of Lhe second sale
made Lo anoLher. !S2=:98#2:) F8?% B% +") S%0% *2%
&4(K&4) *2B% 43) &GGK,

* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
+)' %!#,-( (!'-) ./00

64 789: ;< :8C ODC<JD;O:;IC OCD;>N >F 9J:;>= F>D
DC<J;<<;>=B

&4
1. [8:9# "#$% &5K&) 82%& - wlLhln 4 years
from Lhe Llme Lhe LermlnaLlon of Lhe
lncapaclLy of Lhe ward,
2. [8:9# "#$% &5K&) 82% 4 wlLhln 4 years
from Lhe Llme Lhe domlclle of Lhe
absenLee ls known, or
3. [8:9# "#$% &5K&) 82/% 5 ^ 3 ^ "#$% &5K4
- wlLhln 4 years from Lhe Llme of Lhe
dlscovery of fraud.

222
1$+$# #&7 ',&04

"5 +!$2&"#, 1!('-&1')

64 789: 9DC :8C J89D9J:CD;<:;J< >F 9 I>;N9?@C
J>=:D9J:B
&4
1. LffecLlve unLll seL aslde,
2. May be assalled or aLLacked only ln an
acLlon for LhaL purpose,
3. Can be conflrmed, and
4. Can be assalled only by Lhe parLy whose
consenL was defecLlve or hls helrs or
asslgns.

64 78C= ;< :8CDC 9 I>;N9?@C J>=:D9J:B

&4 When:
1. one of Lhe parLles ls -8?.@.?-$.$9: Lo
glve consenL, or
2. consenL was B-$-.$9:.

64 78> 9DC :8C OCD<>=< ;=J9O9J;:9:CN :> A;IC
J>=<C=:B

&4 2$0
1. 2eafmuLes who do noL know how Lo
read and wrlLe (llllLeraLes)
2. $nsane or demenLed persons, A8=9// Lhe
conLracL was enLered lnLo durlng a lucld
lnLerval
3. 0lnors 9P?9@$d
a. ConLracLs for necessarles
b. ConLracLs by guardlans or legal
represenLaLlves & Lhe courL havlng
[urlsdlcLlon had approved Lhe same
c. When Lhere ls acLlve
mlsrepresenLaLlon on Lhe parL of
Lhe mlnor (mlnor ls esLopped)
d. ConLracLs of deposlL wlLh Lhe
osLal Savlngs 8ank provlded LhaL
Lhe mlnor ls over 7 years of age
e. upon reachlng age of ma[orlLy -
Lhey raLlfy Lhe same

64 789: 9DC :8C I;JC< >F J>=<C=:B

&4 0$+*/
1. G-/$._9 - subsLanLlal mlsLake and noL
merely an accldenLal mlsLake, musL
refer Lo Lhe:
a. subsLance of Lhe Lhlng whlch ls Lhe
sub[ecL of Lhe conLracL, or
b. Lo Lhose condlLlons whlch have
prlnclpally moved one or boLh
parLles Lo enLer Lhe conLracL.

(>:C4 MlsLake as Lo 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.

2. B8$-1-:.$-28 - An lnLernal moral force
operaLlng ln Lhe wlll and lnduclng
performance of an acL.
3. L-2=98?9 - An exLernal, serlous or
lrreslsLlble physlcal force exerLed upon
a person Lo prevenL hlm from dolng
someLhlng or Lo compel hlm Lo do an
acL.
4. M8:A9 -8H=A98?9 - Any means employed
upon a parLy whlch, under Lhe
clrcumsLances could noL be reslsLed and
has Lhe effecL of conLrolllng hls vollLlon
and lnduclng hlm Lo glve hls consenL Lo
Lhe conLracL, whlch oLherwlse, he
would noL have enLered lnLo.
3. A#.A: - use of lnsldlous words or
machlnaLlons ln lnduclng anoLher parLy
Lo enLer lnLo Lhe conLracL, whlch
wlLhouL Lhem, he would noL have
agreed.

64 789: 9DC :8C R;=N< >F E;<:9RCB

&4
1. Y-/$._9 2H H.?$- When one or boLh of
Lhe conLracLlng parLles belleve LhaL a
facL exlsLs when ln reallLy lL does noL, or
LhaL such facL does noL exlsL when ln
reallLy lL does.

2. Y-/$._9 2H =.R- When 1 or boLh parLles
arrlve aL erroneous concluslon or
lnLerpreLaLlon of a quesLlon of law or
legal effecLs of a cerLaln acL or
LransacLlon.

(>:C4
%-4 MlsLake as a vlce of consenL refers Lo
mlsLake of facLs and noL of law.

1!('2&1')

SH(4 When mlsLake of law lnvolves error as Lo
Lhe effecL of an agreemenL when Lhe real
purpose of Lhe parLles ls frusLraLed !"#$% &553)
*++,.

1o deLermlne Lhe effecL of an alleged error, boLh Lhe
ob[ecLlve and sub[ecLlve aspecLs of Lhe case whlch ls
Lhe lnLellecLual capaclLy of Lhe person who
commlLLed Lhe mlsLake.

64 78C= M;@@ E;<:9RC ;=I9@;N9:C J>=<C=:B

&4 MlsLake, ln order Lo lnvalldaLe consenL, 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.!X928.#:2 B% +") S%0%
*2% &4'3K') L9@$% &5) 4663,

64 #C>=9DN> ;< :8C >=@W @CA;:;E9:C J8;@N >F :8C
@9:C <O>K<C< '>E9<;=9 9=N "9@?;=>5 )8C >=@W
F;=;<8CN %D9NC :8DCC 9=N N;N =>: K=NCD<:9=N
,=A@;<85 '8C )C?9<:;9=<X >= :8C >:8CD 89=NX 9DC
;@@CA;:;E9:C J8;@NDC=5 )8C F;@CN 9= 9J:;>= :>
NCJ@9DC :8C =K@@;:W >F :8C CT:D9LKN;J;9@ <C::@CEC=:
>F :8C C<:9:C >F 8CD O9DC=:<X M8;J8 <8C M9<
E9NC :> <;A= M;:8>K: :8C J>=:C=:< :8CDC>FX
M8;J8 MCDC ;= ,=A@;<8X CTO@9;=CN :> 8CD5 )8C
J@9;E< :89: 8CD J>=<C=: M9< I;:;9:CN ?CJ9K<C <8C
M9< NCJC;ICN ;=:> <;A=;=A :8C CT:D9LKN;J;9@
<C::@CEC=:5 $< :8C CT:D9LKN;J;9@ <C::@CEC=: >F
C<:9:C >F '>E9<;=9 I9@;NB

&4 no. 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. !"#$% &554) *++, Leonardo was noL ln a
poslLlon Lo glve her free, volunLary and
sponLaneous consenL wlLhouL havlng Lhe
documenL, whlch was ln Lngllsh, explalned Lo her.
1herefore, Lhe consenL of Leonardo was
lnvalldaLed by a subsLanLlal mlsLake or error,
renderlng Lhe agreemenL voldable. 1he
exLra[udlclal parLlLlon beLween Lhe SebasLlans
and Leonardo should be annulled and seL aslde
on Lhe ground of mlsLake. !X928.#:2 B% +") S%0%
*2% &4'3K') L9@$% &5) 4663,

(>:C4 ConLracLs where consenL ls glven by mlsLake
or because of vlolence, lnLlmldaLlon, undue
lnfluence or fraud are voldable. 1hese clrcumsLances
are defecLs of Lhe wlll, Lhe exlsLence of whlch
lmpalrs Lhe freedom, lnLelllgence, sponLanelLy and
volunLarlness of Lhe parLy ln glvlng consenL Lo Lhe
agreemenL.
22S

ArL. 1332 was lnLended Lo proLecL a parLy Lo a
conLracL dlsadvanLaged by llllLeracy, lgnorance,
menLal weakness or some oLher handlcap. lL
conLemplaLes a slLuaLlon whereln a conLracL ls
enLered lnLo buL Lhe consenL of one of Lhe
conLracLlng parLles ls vlLlaLed by mlsLake or fraud
commlLLed by Lhe oLher.!X928.#:2 B% +") S%0% *2%
&4'3K') L9@$% &5) 4663,

64 789: 9DC :8C DCPK;<;:C< :89: ;A=>D9=JC >F >D
CDD>=C>K< ;=:CDODC:9:;>= >F @9M aE;<:9RC >F @9Mc
E9W I;:;9:C J>=<C=:B

&4
1. MlsLake musL be wlLh respecL Lo Lhe
legal effecL of Lhe agreemenL,
2. lL musL be muLual, and
3. 8eal purpose of Lhe parLles musL have
been frusLraLed.

64 789: 9DC :8C DCPK;<;:C< >F ;=:;E;N9:;>=B

&4
1. Cne of Lhe parLles ls compelled Lo glve
hls consenL by a reasonable and well
grounded fear of an evll,
2. 1he evll musL be lmmlnenL and grave,
3. lL musL be un[usL, and
4. 1he evll musL be Lhe deLermlnlng cause
for Lhe parLy upon whom lL ls employed
ln enLerlng lnLo Lhe conLracL.

64 789: 9DC :8C DCPK;<;:C< >F I;>@C=JCB

&4 lL musL be:
1. serlous or lrreslsLlble, and
2. Lhe deLermlnlng cause for Lhe parLy
upon whom lL ls employed ln enLerlng
lnLo Lhe conLracL.

64 789: 9DC :8C R;=N< >F FD9KNB

&4
1. lraud ln Lhe @9#H9?$-28 of Lhe conLracL
a. Causal fraud !:2=2 ?.A/.8$9,
b. lncldenLal fraud !:2=2 -8?-:98$9,

2. lraud ln Lhe @9#H2#1.8?9 of an
obllgaLlon !"#$% &&J6) *++,

09QA-/-$9/d
a. lraud, lnsldlous words or
machlnaLlons musL have been
employed by one of Lhe
conLracLlng parLles,
b. lL musL have been serlous,
c. lL lnduced Lhe oLher parLy Lo enLer
lnLo a conLracL, and
d. Should noL have been employed by
boLh conLracLlng parLles or by Lhlrd
persons.

* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
+)' %!#,-( (!'-) ./00

64 2;<:;=AK;<8 N>@> J9K<9=:C FD>E N>@>
;=J;NC=:C5

&4
224
1$+$# #&7 ',&04

2!#!1&*)&(',
a&-'5 Zbb_c
2!#!$(1$2,(',
a&-'5 Zbeec
8efers Lo fraud whlch ls
serlous ln characLer
8efers Lo fraud whlch ls
noL serlous ln characLer
lL ls Lhe cause whlch
lnduces Lhe parLy Lo
enLer lnLo a conLracL
lL ls noL Lhe cause whlch
lnduces Lhe parLy Lo
enLer lnLo a conLracL
8enders Lhe conLracL
B2-:.<=9
8enders Lhe parLy =-.<=9
H2# :.1.>9/

(>:C4 ln conLracLs, Lhe klnd of fraud LhaL wlll vlLlaLe
consenL ls one where, 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. 1hls ls
known as :2=2 ?.A/.8$9 or causal fraud whlch ls
baslcally a decepLlon employed by one parLy prlor Lo
or slmulLaneous Lo Lhe conLracL ln order Lo secure
Lhe consenL of Lhe oLher. !L.1/28 B% +") S%0% *2%
&6K43') *2B% 4') &GG3,

64 )9=:><Y @C9<C J>=:D9J: M9< 9?>K: :> CTO;DC
?K: ;: M9< CT:C=NCN 9=N 8C J>=:;=KCN :> >JJKOW
:8C @C9<CN ODCE;<C< ?CW>=N :8C CT:C=NCN :CDE5
)9E<>= >FFCDCN :> ?KW )9=:><Y <:>DC 9=N 8;<
D;A8: :> :8C @C9<C5 )9=:>< <:9:CN :89: :8C @C9<C
J>=:D9J: ?C:MCC= 8;E 9=N :8C @C<<>D M9<
;EO@;CN@W DC=CMCN 9=N :89: F>DE9@ DC=CM9@
:8CDC>F M>K@N ?C E9NC KO>= :8C 9DD;I9@ >F 9
JCD:9;= '9=W9 09ND;A9@X ?9<CN >= :8C @C::CD :>
8;E A;IC= ?W :8C @C<<>D5 78C= )9E<>= >JJKO;CN
:8C ODCE;<C<X 8C M9< F>DJCN :> I9J9:C F>D
)9=:><Y F9;@KDC :> DC=CM 8;< @C9<C5 3C F;@CN 9=
9J:;>= F>D N9E9AC< 9A9;=<: )9=:>< F>D FD9KN 9=N
?9N F9;:8 J@9;E;=A :89: :8C E;<DCODC<C=:9:;>=
;=NKJCN 8;E :> OKDJ89<C :8C <:>DC 9=N :8C
@C9<C8>@N D;A8:5 2CJ;NC5

&4 no, SanLos was noL gullLy of fraud nor bad falLh
ln clalmlng LhaL Lhere was lmplled renewal of hls
conLracL of lease wlLh hls lessor. 1he leLLer glven
by Lhe lessor led SanLos Lo belleve and conclude
LhaL hls lease conLracL was lmplledly renewed and
LhaL formal renewal Lhereof would be made upon
Lhe arrlval of 1anya Madrlgal. 1hus, from Lhe
sLarL, lL was known Lo boLh parLles LhaL, lnsofar as
Lhe agreemenL regardlng Lhe Lransfer of SanLos'
leasehold rlghL Lo Samson was concerned, Lhe
ob[ecL Lhereof relaLes Lo a fuLure rlghL. lL ls a
condlLlonal conLracL, Lhe efflcacy of whlch
depends upon an expecLancy Lhe formal renewal
of Lhe lease conLracL beLween SanLos and lessor.
1he efflcacy of Lhe conLracL beLween Lhe parLles
was Lhus made dependenL upon Lhe happenlng of
Lhls suspenslve condlLlon% !L.1/28 B% +") S%0% *2%
&6K43') *2B% 4') &GG3,

64 789: 9DC :8C J9K<C< >F CT:;=J:;>= >F 9J:;>= :>
9==K@B

&4
1. 7#9/?#-@$-28 - Lhe acLlon musL be
commenced wlLhln 4 years from Lhe
Llme Lhe:
a. lncapaclLy ends, guardlanshlp
ceases,
b. vlolence, lnLlmldaLlon or undue
lnfluence ends, or
c. mlsLake or fraud ls dlscovered

2. 0.$-H-?.$-28-cleanses Lhe conLracL of lLs
defecLs from Lhe momenL lL was
consLlLuLed

09QA-/-$9/d
a. Lhere musL be knowledge of Lhe
reason whlch renders Lhe conLracL
voldable,
b. such reason musL have ceased, and
c. Lhe ln[ured parLy musL have
execuLed an acL whlch expressly or
lmplledly conveys an lnLenLlon Lo
walve hls rlghL

3. VM =2// 2H $I9 $I-8> whlch ls Lhe ob[ecL
of Lhe conLracL Lhrough fraud or faulL of
Lhe person who ls enLlLled Lo annul Lhe
conLracL

64 78> E9W ;=<:;:K:C 9J:;>= F>D 9==K@EC=:B

&4 8y all who are Lhereby obllged prlnclpally or
subsldlarlly.
(>:C4 Pe who has capaclLy Lo conLracL may noL
lnvoke Lhe lncapaclLy of Lhe parLy wlLh whom he has
conLracLed.

A Lhlrd person who ls a sLranger Lo Lhe conLracL
cannoL lnsLlLuLe an acLlon for annulmenL.

64 789: 9DC :8C CFFCJ:< >F 9==K@EC=:B

&4
1. FH ?28$#.?$ 82$ M9$ ?28/A11.$9: -
parLles shall be released from Lhe
obllgaLlons arlslng Lherefrom.
2. FH ?28$#.?$ I./ .=#9.:M <998
?28/A11.$9: - rules provlded ln ArLs.
13981402, nCC, shall govern.

1!('2&1')

64 789: ;< J>=F;DE9:;>=B

&4 lL ls an acL by whlch a voldable conLracL ls
cured of lLs vlce or defecL.

64 789: ;< DCJ>A=;:;>=B

&4 lL ls an acL whereby a defecL of proof ls cured
such as when an oral conLracL ls puL lnLo wrlLlng
or when a prlvaLe lnsLrumenL ls converLed lnLo a
publlc lnsLrumenL.

64 789: ;< D9:;F;J9:;>=B

&4lL ls an acL by whlch a conLracL enLered lnLo ln
behalf of anoLher wlLhouL or ln excess of
auLhorlLy ls cured of lLs defecL.

64 789: 9DC :8C E>NC< >F D9:;F;J9:;>=B

&4
1. lor conLracLs lnfrlnglng Lhe SLaLuLe of
lrauds:
a. 9P@#9//=M
b. -1@=-9:=M- by fallure Lo ob[ecL Lo
Lhe presenLaLlon of oral evldence
Lo prove Lhe conLracL, or by Lhe
accepLance of beneflLs under Lhe
conLracL.
2. lf boLh parLles are lncapaclLaLed,
raLlflcaLlon by Lhelr parenLs or guardlan
shall valldaLe Lhe conLracL reLroacLlvely

22S
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL
15 *(,(/!-1,&"#, 1!('-&1')

64 789: 9DC K=C=F>DJC9?@C J>=:D9J:<B

&4 1he followlng conLracLs are unenforceable
unless Lhey are raLlfled:
1. 1hose enLered lnLo wlLhouL or ln excess
of auLhorlLy,
2. 1hose LhaL do noL comply wlLh Lhe
SLaLuLe of lrauds l.e., are noL ln wrlLlng
nor subscrlbed by Lhe parLy charged or
by hls agenL, or
3. 1hose where boLh conLracLlng parLles
are lncapable of glvlng consenL.

64 789: ;< ):9:K:C >F /D9KN<B

&4 1he SLaLuLe of lrauds [ArLlcle 1403, (2)]
requlres cerLaln conLracLs enumeraLed Lhereln Lo
be evldenced by some noLe or memorandum ln
order Lo be enforceable. 1he Lerm "SLaLuLe of
lrauds" ls descrlpLlve of sLaLuLes whlch requlre
cerLaln classes of conLracLs Lo be ln wrlLlng. 1he
SLaLuLe does noL deprlve Lhe parLles of Lhe rlghL
Lo conLracL wlLh respecL Lo Lhe maLLers Lhereln
lnvolved, buL merely regulaLes Lhe formallLles of
Lhe conLracL necessary Lo render lL enforceable.
Lvldence of Lhe agreemenL cannoL be recelved
wlLhouL Lhe wrlLlng or a secondary evldence of lLs
conLenLs. !LR9:-/I Y.$?I) "V B% +") S%0% *2%
&4K&46) ;?$% 46) 4663,

(>:C4 1he SLaLuLe of lrauds applles only Lo
execuLory conLracLs, noL Lo Lhose LhaL are parLlally or
compleLely fulfllled. Where a conLracL of sale ls
alleged Lo be consummaLed, lL maLLers noL LhaL
nelLher Lhe recelpL for Lhe conslderaLlon nor Lhe sale
lLself was ln wrlLlng. Cral evldence of Lhe alleged
consummaLed sale ls noL forbldden by Lhe SLaLuLe of
lrauds and may noL be excluded ln courL. !E-?$2#-.82
B% +") S%0% *2% KJ''6) `9<% &&) &GG&,

64 789: ;< :8C OKDO><C >F :8C ):9:K:C >F /D9KN<B

&4 lL ls Lo prevenL fraud and per[ury ln Lhe
enforcemenL of obllgaLlons dependlng for Lhelr
evldence on Lhe unasslsLed memory of wlLnesses,
by requlrlng cerLaln enumeraLed conLracLs and
LransacLlons Lo be evldenced by a wrlLlng slgned
by Lhe parLy Lo be charged. !LR9:-/I Y.$?I) "V B%
+") S%0% *2% &4K&46) ;?$% 46) 4663,

64 789: 9DC :8C J>=:D9J:< >D 9ADCCEC=:<
J>ICDCN ?W :8C ):9:K:C >F /D9KN<B

&4
1. An agreemenL LhaL by lLs Lerms ls noL Lo
be performed wlLhln a year from Lhe
maklng Lhereof,
2. A speclal promlse Lo answer for Lhe
debL, defaulL or mlscarrlage of anoLher
3. An agreemenL made ln conslderaLlon of
marrlage, oLher Lhan a muLual promlse
Lo marry,
4. An agreemenL for Lhe sale of goods,
chaLLels or Lhlngs ln acLlon, aL a prlce
noL lower LhaL 300 pesos, unless Lhe
buyer accepLs and recelves 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
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
3. An agreemenL for Lhe leaslng for a
longer perlod Lhan one year, or for Lhe
sale of real properLy or of an lnLeresL
Lhereln,

+)' %!#,-( (!'-) ./00

6. A represenLaLlon Lo Lhe credlL of a Lhlrd
person

64 1C=;N>X 9< 9= 8C;D >F &O9D9:> 9=N J@9;E;=A :>
?C :8C >M=CD >F 9 8>K<C 9=N @>:X F;@CN 9
J>EO@9;=: F>D CLCJ:EC=: 9A9;=<: <O>K<C<
&O9J;>=9N>5 != :8C >:8CD 89=NX <O>K<C<
&O9J;>=9N> 9@@CAC :89: :8CW 9DC :8C >M=CD<
M8;J8 9DC K=DCA;<:CDCN OKDJ89<CN ?W :8CE FD>E
;:< ODCI;>K< >M=CDX &O9D9:>5 '8C;D J@9;E ;<
9=J8>DCN >= 9 ZO9AC :WOCMD;::C= N>JKEC=:
C=:;:@CN lH9AO9O9:K=9WXl CTCJK:CN ?W &O9D9:>5
$< :8C UH9AO9O9:K=9WV C=:CDCN ;=:> ?W ">=;F9J;>
9=N <O>K<C &O9J;>=9N> I9@;N 9=N C=F>DJC9?@CB

&4 lL ls valld buL unenforceable. Cenerally,
conLracLs are obllgaLory, ln whaLever form such
conLracLs may have been enLered lnLo, provlded
all Lhe essenLlal requlslLes for Lhelr valldlLy are
presenL. When, however, Lhe law requlres LhaL a
conLracL be ln some form for lL Lo be valld or
enforceable, LhaL requlremenL musL be complled
wlLh.

1he sale of real properLy should be ln wrlLlng and
subscrlbed by Lhe parLy charged for lL Lo be
enforceable. 1he "agpapaLunay" ls ln wrlLlng and
subscrlbed by AparaLo, hence, lL ls enforceable
under Lhe SLaLuLe of lrauds. noL havlng been
subscrlbed and sworn Lo before a noLary publlc,
however, Lhe "agpapaLunay" ls noL a publlc
documenL, and Lherefore does noL comply wlLh
par. 1, ArL. 1338, nCC.
Moreover, Lhe requlremenL of a publlc documenL
ln ArLlcle 1338 ls noL for Lhe valldlLy of Lhe
lnsLrumenL buL for lLs efflcacy. AlLhough a
conveyance of land ls noL made ln a publlc
documenL, lL does noL affecL Lhe valldlLy of such
conveyance. 1he prlvaLe conveyance of Lhe house
and loL ls Lherefore valld beLween AparaLo and
Lhe spouses. !+98-:2B%L@2A/9/ "@.?-28.:2) S%0%
*2% &543J3) *2B% &G) &GGG,

64 789: 9DC :8C :M> M9W< >F D9:;FW;=A J>=:D9J:<
M8;J8 ;=FD;=AC :8C ):9:K:C >F /D9KN<B

&4
1. lallure Lo ob[ecL durlng Lhe Lrlal Lo Lhe
admlsslblllLy of parol evldence Lo
supporL a conLracL covered by Lhe
SLaLuLe of lrauds.
2. AccepLance of beneflLs - when Lhe
conLracL has been parLly execuLed
because esLoppel seLs ln by accepLlng
performance.
226

25 +!$2 1!('-&1')

64 789: 9DC :8C R;=N< >F I>;N J>=:D9J: -8 9//98$-.= 9=9198$/d
no consenL, no ob[ecL, no cause - some or
all elemenLs of a valld conLracL are absenL
a. 1hose whlch are .</2=A$9=M slmulaLed
or flcLlLlous: no cause
b. 1hose whose cause or ob[ecL dld noL
exlsL aL Lhe Llme of Lhe $#.8/.?$-28d
no cause or ob[ecL
c. 1hose whose 2<C9?$ ls ouLslde Lhe
commerce of man: no ob[ecL
d. 1hose whlch ?28$91@=.$9 an
lmposslble servlce: no ob[ecL
e. 1hose where Lhe -8$98$-28 of parLles
relaLlve Lo prlnclpal ob[ecL of Lhe
conLracL cannoL be ascerLalned

2. +28$#.?$/ @#2I-<-$9: <M =.R
a. 7.?$A1 ?211-/2#-A1 - Lhe credlLor
approprlaLes Lo hlmself Lhe Lhlngs
glven by way of pledge or morLgage
Lo fulflll Lhe debL
b. 7.?$A1 :9 828 .=-98.8:2 - an
agreemenL prohlblLlng Lhe owner
from allenaLlng Lhe morLgaged
lmmovable
c. 7.?$A1 =928-8. - a sLlpulaLlon ln a
parLnershlp agreemenL whlch
excludes one or more parLners from
any share ln Lhe proflLs or losses

3. F==9>.= 2# -==-?-$ ?28$#.?$/(9%>% conLracL Lo
sell marl[uana)

64 != GK@W ]X Z[\]X 3>=>D;> 9=N +;JC=:C
CTCJK:CN 9 NCCN >F CTJ89=AC5 *=NCD :8;<
;=<:DKEC=:X +;JC=:C 9ADCCN :> J>=ICW 8;< ]e5``
<PK9DCEC:CD @>: :> 3>=>D;>X ;= CTJ89=AC F>D 9
hii<PK9DCEC:CD OD>OCD:W5 '8C J>=:D9J: M9<
C=:CDCN ;=:> M;:8>K: :8C J>=<C=: >F 3>=>D;>Y<
M;FC5 $< :8C NCCN >F CTJ89=AC =K@@ 9=N I>;NB

&4 1he deed ls valld unLll and unless annulled. 1he
deed was enLered lnLo on !uly 6, 1976, whlle Lhe
lamlly Code Look effecL only on AugusL 3, 1998.
Laws should be applled prospecLlvely only, unless
a leglslaLlve lnLenL Lo glve Lhem reLroacLlve effecL
ls expressly declared or ls necessarlly lmplled
from Lhe language used. Pence, Lhe provlslons of
Lhe Clvll Code, noL Lhe lamlly Code are appllcable.
Accordlng Lo ArLlcle 166 of Lhe Clvll Code, Lhe
husband cannoL allenaLe or encumber any real
properLy of Lhe con[ugal parLnershlp wlLhouL Lhe
wlfe's consenL. 1hls provlslon, however, musL be
1$+$# #&7 ',&04

1!('2&1')

read ln con[uncLlon wlLh ArLlcle 173 of Lhe same
Code. 1he laLLer sLaLes LhaL an acLlon Lo annul an
allenaLlon or encumbrance may be lnsLlLuLed by
Lhe wlfe durlng Lhe marrlage and wlLhln Len years
from Lhe LransacLlon quesLloned. Pence, Lhe lack
of consenL on her parL wlll noL make Lhe
husband's allenaLlon or encumbrance of real
properLy of Lhe con[ugal parLnershlp vold, buL
merely voldable. !E-==.#.8:.B% E-==.#.8:.) S%0% *2%
&'533J) `9<% 45) 4663,
227
* ( $ + , - ) $ ' . ! / ) & ( ' ! ' ! 0 & )
!"# $% & " ' ') *) + ) # , - ./ 0 / %
+$1, 13&$- /!- &20$($)'-&'$!( &(2 /$(&(1,: !LAnLLLL C. LLL

64 GKN;C <>@N >=C89@F >F :8C;D @>: :> %K;9=A
K=NCD 9 NCCN >F :D9=<FCD >F D;A8:< M;:8>K: :8C
J>=<C=: 9=N >ICD :8C >?LCJ:;>= >F 8;< M;FCX %;@N9
9=N LK<: 9F:CD :8C @9::CD @CF: F>D 9?D>9N5 78C=
%;@N9 DC:KD=CN 8>EC 9=N F>K=N :89: >=@W 8CD
<>=X GK=;CX M9< <:9W;=A ;= :8C;D 8>K<C5 )8C :8C=
A9:8CDCN 8CD >:8CD J8;@NDC=X G>L; 9=N 39DD;C: 9=N
MC=: :> <:9W ;= :8C;D 8>K<C5 />D <:9W;=A ;= :8C;D
9@@CACN OD>OCD:WX :8C <O>K<C< %K;9=A
J>EO@9;=CN ?CF>DC :8C ?9D9=A9W 9K:8>D;:;C< F>D
:DC<O9<<;=A5

$< :8C NCCN >F :D9=<FCD >F D;A8:< CTCJK:CN ?W
GKN;C 1>DOKk 9=N :8C <O>K<C< %K;9=A I>;N >D
I>;N9?@CB

&4
lL ls vold. Cllda's consenL Lo Lhe conLracL of sale of
Lhelr con[ugal properLy was LoLally lnexlsLenL or
absenL. 1hus, sald conLracL properly falls wlLhln
Lhe amblL of ArLlcle 124 of Lhe lC.

1he parLlcular provlslon ln Lhe old Clvll Code
whlch provldes a remedy for Lhe wlfe wlLhln 10
years durlng Lhe marrlage Lo annul Lhe
encumbrance made by Lhe husband was noL
carrled over Lo Lhe lamlly Code. lL ls Lhus clear
LhaL any allenaLlon or encumbrance made afLer
Lhe lamlly Code Look effecL by Lhe husband of Lhe
con[ugal parLnershlp properLy wlLhouL Lhe
consenL of Lhe wlfe ls null and vold. !L@2A/9/
SA-.8>B%+") S%0% *2% &4'&J4) WA89 4() &GGK,

64 2;<:;=AK;<8 I>;N J>=:D9J: FD>E I>;N9?@C
J>=:D9J:5

&4
+!$2 +!$2&"#,
Absence of essenLlal
elemenL/s of a conLracL
ConsenL ls vlLlaLed or
Lhere ls lncapaclLy Lo
glve consenL
no effecL even lf noL seL
aslde
valld conLracL unLll seL
aslde
CannoL be raLlfled Can be raLlfled
nulllLy can be seL up
agalnsL any person
asserLlng rlghL arlslng
from lL, and hls successors
nulllLy can be seL up
only agalnsL a parLy
LhereLo
ln lnLeresL noL proLecLed
by law
AcLlon Lo declare nulllLy
does noL prescrlbe
AcLlon Lo annul
conLracL prescrlbes ln 4
years !7-89:.)
;<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @%
(6(,

64 2;<:;=AK;<8 I>;N J>=:D9J: FD>E DC<J;<<;?@C
J>=:D9J:5

&4
+!$2 -,)1$))$"#,
uefecL ls lnherenL
ln Lhe conLracL
lLself
uefecL ls ln lLs effecLs, elLher
agalnsL one of Lhe parLles or a
Lhlrd person
nulllLy ls a maLLer
of law and publlc
lnLeresL
8ased on equlLy and maLLer of
prlvaLe lnLeresL
no legal effecLs
even lf no acLlon ls
flled Lo seL lL aslde
roduces legal effecLs and
remalns valld lf no acLlon ls
flled
AcLlon Lo declare
lLs nulllLy does noL
prescrlbe !"#$%
&3&6) *++,
AcLlon Lo resclnd prescrlbes
wlLhln 4 years !"#$% &5KG) *++T
7-89:.) ;<=->.$-28/ .8:
+28$#.?$/) 4666 9:) @% (6',

64 2;<:;=AK;<8 I>;N J>=:D9J: FD>E ;=CT;<:C=:
J>=:D9J:5

&4
+!$2 1!('-&1' $(,S$)',(' 1!('-&1'
1hose where all Lhe
requlslLes of a conLracL
are presenL, buL Lhe
cause, ob[ecL or purpose
ls ?28$#.#M $2 =.R)
12#.=/) >22: ?A/$21/)
@A<=-? 2#:9# 2# @A<=-?
@2=-?M or Lhe conLracL
lLself ls @#2I-<-$9: or
:9?=.#9: @#2I-<-$9:%
1hose where one or
some of Lhe requlslLes
whlch are essenLlal for
valldlLy are .</2=A$9=M
=.?_-8>
rlnclple of -8 @.#-
:9=-?$2 ls appllcable.
rlnclple of -8 @.#-
:9=-?$2
ls82$ appllcable.

+5 ,//,1' !/ 1!('-&1')

64 "C:MCC= M8>E N> J>=:D9J:< :9RC CFFCJ:B

&4 ConLracLs Lake effecL only beLween Lhe parLles,
and Lhelr asslgns and helrs, Lhe laLLer belng llable
only Lo Lhe exLenL of Lhe properLy recelved from
Lhe decedenL.

64 789: 9DC :8C ;=<:9=JC< M8C= :8C 8C;D< E9W
?C @;9?@C F>D :8C >?@;A9:;>= J>=:D9J:CN ?W :8C
NCJCNC=:B

+)' %!#,-( (!'-) ./00

228
1$+$# #&7 ',&04

&4 When Lhe rlghLs and obllgaLlons arlslng from
Lhe conLracL are Lransmlsslble:
1. 8y Lhelr naLure, or
2. 8y sLlpulaLlon, or
3. 8y provlslon of law.

64 789: 9DC :8C DCPK;<;:C< ;= >DNCD :89: 9 :8;DN
OCD<>= E9W NCE9=N :8C FK@F;@@EC=: >F :8C
J>=:D9J:B

&4
1. 1he conLracLlng parLles musL have
clearly and dellberaLely conferred a
favor upon Lhe Lhlrd person,
2. 1he Lhlrd person's lnLeresL or beneflL ln
such fulflllmenL musL noL be merely
lncldenLal, and
3. Such Lhlrd person communlcaLed hls
accepLance Lo Lhe obllgor before Lhe
sLlpulaLlons ln hls favor are revoke.

UST Golden Notes 2011 - Obligations and Contracts

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