Essential requisites of Marriage
1. Legal capacity of contracting parties who must be male and female
2. consent freely given in presence of solemnizing officer
 ABSENCE OF ANY: void ab initio
 Defect: voidable
FORMAL REQUISITES
1. Authority of solemnizing officer
2. Valid marriage license
 Issued by local civil registrar of city/municipality where either
party habitually resides
 Notice posted for 10 consecutive days on bulletin board outside
office of registrar
 VALID FOR 120 DAYS from date of issue
 If either or both parties are foreigner, must submit certificate of
legal capacity issued by diplomatic/consular official
 Stateless persons/refugees to submit affidavit showing capacity
3. Marriage ceremony (personal declaration, atleast two witnesses)
 ABSENCE OF ANY: void ab initio
 Irregularity: parties responsible to be civilly, criminally and
administratively liable
SOLEMNIZING OFFICERS ALLOWED:
1. incumbent mem of judiciary within court’s jurisdiction
2. any priest, rabbi, imam or minister
 Duly authorized by his church/religious sect
 Registered with civil registrar general
 Acting within limits of written authority
 Atleast one of the parties belongs to the officer’s church
3. ship captain/airplane chief (articulo mortis)
 Not only when the ship is at sea or plane is in flight
 During stopovers at ports of calls too
4. military commander of unit (articulo mortis)
 Chaplain is absent
 During military operation
5. consul-general, consul, vice-consul
 Marriages b/n Filipinos abroad
 To issue marriage license
 Do duties of local civil registrar
PARENT’S CONSENT
 Between 18-21
PARENT’S ADVICE
 Between 21-25
 If none, marriage license not be issued till after 3 months
o Plus marriage counseling. If none, suspend issuance of
license for 3 months from completion of publication of
application
ART. 26. Marriages solemnized outside Philippines if valid = also valid
in the Phil except those prohibited:
 Below 18
 Bigamous/polygamous marriage
 Contracted thru mistake as to identity of the other
 Subsequent marriages that are void under art 53 (failure to
comply with requirements like judgment of annulment,
partition, delivery of presumptive legitimes to be recorded)
 Psychologically incapacitated (36)
 Incestuous marriages (37)
o b/n ascendants and descendants (any degree)
o b/n brothers and sisters (full or half-blood)
 Public policy (38)
o Bn collateral relatives up to 4th civil degree (legit or not)
o Bn step-parents and step-children
o Parents in law and children in law
o Adopting parent and adopted child
o Surviving spouse of adopting parent and adopted child
o Surviving spouse of adopted child and adopter
o Adopted child and legitimate child of adopter
o Adopted children of same adopter
o Killed another person’s spouse or his/her own spouse
with intention to marry the other
Marriage b/n Filipino and foreigner
 If validly celebrated and alien spouse obtained divorce abroad
capacitating him/her to remarry = Filipino spouse capacitated
too (art 26)
 A Filipino citizen has the capacity to remarry under Philippine law after
initiating a divorce proceeding abroad and obtaining a favorable judgment
against his or her alien spouse who is capacitated to remarry (Republic v
Manalo)
 to include cases involving parties who, at the time of the
celebration of the marriage were Filipino citizens, but later
on, one of them becomes naturalized as a foreign citizen
and obtains a divorce decree. The reckoning point is not
the citizenship of the parties at the time of the celebration of
the marriage, but their citizenship at the time a valid
divorce is obtained abroad by the alien spouse capacitating
the latter to remarry. (Orbecido ruling)
Art. 27. EXEMPTED FROM MARRIAGE LICENSE
 either or both at point of death (articulo mortis)
 residence is where there’s no means of transportation
 Muslims or mems of ethnic cultural communities in accordance
with their customs, rites, practices
 Atleast 5 year cohabitation
o lived together as husband and wife and
o without legal impediment to marry each other
VOID MARRIAGES (Art. 35)
1. below 18
2. solemnized by person not legally authorize to perform marriage
 unless, either or both parties believed in gf that he had legal
authority
3. no license
4. bigamous or polygamous marriages
 not so if spouse absent for 4 consecutive years and spouse
present has well-founded belief that the absent spouse was
already dead. If danger of death, 2 yrs is sufficient.
 Present spouse to institute summary proceeding to declare
presumptive death of absentee. Such to automatically terminate
upon recording of affidavit of reappearance
o Termination of subsequent marriage due to
reappearance:
 Children conceived prior to termination are legit
 Absolute community or conjugal partnership be
dissolved and liquidated but if one is in bf, his
share be forfeited in favor of common children
 Donations by reason of marriage = valid. If done in
bf, revoked by operation of law.
 Innocent spouse may revoke spouse (bf) as
beneficiary
 Spouse (bf)) disqualified to inherit from innocent
spouse by testate & intestate succession
 If both in BF, marriage is void ab initio, all
donations revoked
5. contracted thru mistake of party as to identity of the other
6. void subsequent marriages
7. psychologically incapacitated at time of celeb (36)
VOIDABLE MARRIAGES (ART. 45)
1. 18 years or over but below 21 and without parent’s consent
 Ratified: after attaining age 21, party freely cohabited with the
other and both lived as H and W
 Can be filed by party whose parent didn’t give consent within 5
yrs after 21
 Can be filed by parent anytime before party reached 21
2. either is of unsound mind (Anytime before death of either)
 Filed by sane spouse who had no knowledge of insanity or
 By person in charge of insane or
 By insane spouse during lucid interval
3. consent obtained by fraud (filed within 5 yrs after discovery)
 Nondisclosure of previous conviction by final judgment of crime
(moral turpitude)
  Concealment by wife that she was pregnant by another man at
time of marriage
 Concealment of STD, regardless of nature, at time of marriage
 Concealment of drug addiction, habitual alcoholism or
homosexuality/lesbianism existing at time of marriage
4. consent obtained by force, intimidation or undue influence (within 5
yrs from time such ceases)
 Ratified by cohabitation as h and w
5. physically incapable of consummating marriage and incapacity
continues and appears to be incurable (within 5 yrs after marriage)
 Can’t be ratified
6. afflicted with sexually transmitted disease(serious and incurable)
 Can’t be ratified
 Within 5 yrs after marriage
Children conceived or born before final judgment of
annulment/absolute nullity under 36 and under 53 = legitimate
LEGAL SEPARATION (ART 55)
1. Repeated physical violence/grossly abusive conduct against
petitioner, common child, P’s child
2. physical violence or moral pressure to change religious/political
affiliation
3. attempt to corrupt or induce petitioner, common child or child to
engage in prostitution or connivance in such
4. final judgment of imprisonment of more than 6 yrs even if pardoned
5. drug addiction/habitual alcoholism
6. lesbianism or homosexuality of respondent
7. subsequent bigamous marriage
8. sexual infidelity or perversion
9. attempt against life of petitioner
10. abandonment w/o justifiable cause for more than 1 yr
Be denied if: condone, consented to commission, connivance, both gave
grounds, collusion, and prescription
WHEN: within 5 yrs from time of occurrence of the cause. Can’t be tried
before 6 mos since filing. Court to take steps toward reconciliation of
sps.
PROPERTY RELATIONS
 Marriage settlements before marriage – modifications valid if
before celeb. If made by 18-21 party, parent’s consent needed to
be valid.
o Absolute community (default)
 If not, can’t donate more than 1/5 to each other
 Commences at precise moment M is celeb
 Consists of all the property owned by the sps at
time of celeb or acquired thereafter
 EXCLUDE
 Property acquired during M by gratuitous
title + fruits and income
 For personal and exclusive use except
jewelry
 Acquired before M by one who has
legitimate descendants by former M
 LIABLE: support, debts and oblig for benefit of
community, taxes
 Except: antenuptial debts not for benefit of
family, support of illegit, liabilities due to
crime/quasi-delict
 DISSOLVE: death, legal sep, annulment/nullity,
judicial separation of property during M
o Conjugal partnership
 Common fund of proceeds, products, fruits and
income from their separate properties and those
acquired thru efforts/chance to be divided equally
upon dissolution
 Acquired by onerous title during M at expense of
common fund
 Obtained from labor, industry, work
  Fruits received during M from common and
exclusive property
 Share in hidden treasure
 Acquired thru occupation (fishing, hunting)
 Livestock in excess of which was brought to M
 Acquired by chance
 EXCLUSIVE PROPERTY
 Brought to M as his/her own
 Acquired during M by gratuitous title
 Acquired by right of redemption, barter or
exchange with property belonging to only
one spouse
 Purchased with exclusive money of H or W
o Complete separation
 Code
 Local customs
Governed by Phil laws except of both sps are aliens, property situated
outside Phil and executed where it is located (extrinsic validity),
situated in outside requiring diff. formalities
DONATIONS BY REASON OF MARRIAGE
 Made before celeb
 In consideration of M
 In favor of one/both future sps
 May be REVOKED
o Marriage not celeb or void ab initio
o Marriage is without consent of parents
o Marriage is annulled and donee acted in bf
o Legal separation, donee is guilty spouse
o Resolutory condition complied
o Donee committed act of ingratitude
ART. 118. Property bought on installments
 from exclusive and conjugal funds
o if full ownership vested
 before M: Belongs to buyer
 during M: conjugal partnership
JUDICIAL SEPARATION OF PROPERTY
 Spouse sentenced to penalty with civil interdiction
 Judicially declared an absentee
 Loss of parental authority decreed by court
 Abandoned or failed to comply family oblig
 Abused power of administration granted
 Separated in fact for atleast 1 yr & reconciliation is highly
improbable
ART. 147 PROPERTY REGIME OF UNION WITHOUT MARRIAGE
 Capacitated to marry each other
 Live exclusively with each other as H and W
 Without M or void M
 Wages and salaries owned in equal shares
 Property acquired thru their work under rules on co-ownership
 Party who didn’t participate in acquisition deemed to contribute
jointly if efforts consisted in care and maintenance of family and
household
o Other cohabitation, only properties acquired thru actual
joint contri be owned by them in proportion to their
respective contri.
 If married to another (adultery), his/her share
accrues to absolute community or conjugal of
valid M
FAMILY HOME
 Exempted from execution, forced sale, attachment
 EXCEPT
o Taxes
o Debts prior to constitution of family home
o Debts secured by mortgages
o Debts due to laborers to construct bldg.
LEGITIMATE SUCCESSION
 Conceived or born during M  Mode of acquisition
 Impugned if (within 1 yr from knowledge of birth)  Property, rights, oblig transmitted thru his death to another
o Physically impossible for h to have sexual intercourse  By will or operation of law
with w
o As proved by biological/scientific reasons Art. 777. OPENING OF SUCCESSION. Rights transmitted from moment
o Written authorization/ratification for artificial of death of decedent.
insemination obtained thru mistake, fraud, etc
 If born before 180 days after M = conceived during former M TESTAMENTARY CAPACITY
o If after 180 days = conceived during M  Not under 18
 Sound mind (presumed)
LEGITIMATED o Not necessary to fully possessed all his reasoning
 Conceived and born outside of wedlock of parents who weren’t faculties
disqualified by impediment to marry each other or disqualified o Sufficient: know nature of estate to dispose, proper
only because below 18 y/o objects of bounty, character of testamentary act
 Take place after subsequent valid marriage
FORMS OF WILLS
ADOPTION  In writing
 Only minors may be adopted except if allowed  Language/dialect known to testator
 Adopter must be atleast 16 yrs older than person to be adopted  Subscribed at the end by testator
o Unless parent by nature of adopted or spouse of o Or testator’name written by other person in his presence
legitimate parent of adoptee and by his express direction
 Cannot adopt  Attested (# of pages, testator signed, presence of witnesses and
o Guardian-ward prior to approval of final accounts such signed) and subscribed by 3 or more credible witnesses in
o Convicted of crime of moral turpitude presence of testator and of another
o Alien except:
 Former Filipino citizen to adopt a relative by DEAF TESTATOR – Personally read will or two persons to read &
consanguinity communicate contents to him
 Adopt legitimate child of his/her Filipino spouse BLIND TESTATOR – read will twice: witness and notary public
 Married to Filipino and to adopt jointly a relative
by consanguinity of the spouse HOLOGRAPHIC WILL
 Must adopt jointly except  Entirely written, dated, signed by hand of testator.
o To adopt his own illegitimate child  No form
o To adopt legitimate child of spouse  May be made in or out of Phil
 Need not be witnessed
  To probate, atleast one witness who knows handwriting and Art. 828. WILL IS REVOCABLE any time before his death.
signature of testator  Valid when done outside Phil and not domiciled here if
 Any insertion, cancellation, erasure be authenticated by full o According to where will was made
signature o Or where testator had his domicile
 REVOKED BY
Art 815. LEX LOCI CELEBRATIONIS o Implication of law
 Filipino abroad is authorized to make will in any form allowed o Will, codicil
by country where may be. May be probated in the Phil. o Burning, tearing, cancelling, with intention to revoke

Art 816. Will of alien abroad produces effect in the Phil if
 Made with formalities of place in which he resides (domiciliary
law)
 Observed in his country (national law)
 In conformity which this Code prescribes (Phil law, where he
executed the will – Art. 17
Art. 817. Will of alien made in Phil is as if executed accdg to Phil law
 If made according to his country (national law)
JOINT WILL PROHIBITED and not valid in Phil even if authorized in
country where it was executed
REVOCATION IN SUBSEQUENT WILL
 Inoperative due to incapacity of heirs, devisees or legatees or by
renunciation = 1st will remains revoked
 If 2nd will is void, 1st will is valid
DISALLOWANCE OF WILL (839)
 Formalities not complied (due execution)
 Testator is insane or mentally incapable
 Executed thru force, duress or fear, threats
 Procured by undue and improper pressure and influence
 Testator’s signature procured by fraud
 Testator acted by mistake

WITNESSES TO WILLS VALID WILL EVEN IF

 Sound mind  Doesn’t contain institution of heir
 18 y/o  Such doesn’t comprise entire estate
 not blind, deaf or dumb  Person instituted doesn’t accept the inheritance or incapacitated
 able to read and write o Testamentary dispositions be complied with and
 DISQUALIFIED o Remainder of estate pass to legal heirs
o Not domiciled in Phil
o Convicted of falsification of doc, perjury, false testimony DISTRIBUTION
 Without designation = equal parts
DEVISE/LEGACY IS VOID if the witness (or spouse, parent or child) to  Those collectively designated = considered individually
its execution is the recipient instituted
 Unless there are other 3 competent witnesses  For full and half brothers and sisters = equally
 Continues to be a witness  Person and his children = instituted simultaneously and not
successively
ART. 854 PRETERITION
 Omission of one, some or all
 Compulsory heirs in direct line
 WON living at time of execution of will or born after death of
testator
 Annul the institution of heir
 But devises and legacies are valid if not inofficious
o Donations given to children charged to their legitime
ART. 856. NO RIGHT TO HEIRS
 Compulsory heir dies before testator (predeceased)
 Incapacitated
 Renounces inheritance
SUBSTITUTION – Another heir in default of heir originally instituted.
 In case such heir dies before him, doesn’t accept or incapacitated
 FIDEICOMMISSARY
o 1st heir/fiduciary inherits as usufructuary. Obligation to
preserve and transmit inheritance to 2nd heir
o doesn’t go beyond one degree from heir originally
instituted
o 1st and 2nd heir are living at time of death of testator
 2nd heir still acquires even if dies before 1st heir.
Pass to his heirs.
o Not to take effect if
o Not made expressly or imposing absolute oblig to
deliver property to 2nd heir
o Perpetual prohibition to alienate/ go beyond 1
degree from original heir instituted
o Heir to pay to various persons successively
income/pension
o According to secret instructions by testator
INALIENABILITY OF ESTATE = Not to exceed 20 yrs
IMPOSSIBLE CONDITIONS = deemed not imposed
COMPULSORY HEIRS
o Legitimate children and descendants
o Legitimate parents and ascendants (if both of equal degree of
paternal and maternal lines survive, divide equally b/n both
lines)
o Widow/er
o Illegitimate children
RESERVA TRONCAL
o Ascendant inherits from descendant by operation of law and
o must reserve property for benefit of relatives within 3rd
degree and belong to line from which property came
o Descendant acquired such property by gratuitous title from
another ascendant or brother/sister
ART. 915. DISINHERITANCE
o May be deprived of his legitimes
o Effected only thru a will
o Not valid if
o No specified cause
o Cause not proved if contradicted
 Shall annul institution of heirs insofar it prejudices
the disinherited
919. CAUSES TO DISINHERIT CHILDREN AND DESCENDANTS
o Convicted of attempt against life of testator, spouse, D and A
o Accused testator of crime prescribing imprisonment for 6 yrs or
more and found groundless
o Convicted of adultery or concubinage with testator’s spouse
o Cause testator to make will by fraud, violence, intimidation,
undue influence
o Refusal to support without justifiable cause
o Maltreatment of testator (word or deed)
o Leads a dishonorable/disgraceful life
o Conviction of crime with penalty of civil interdiction
DISINHERIT PARENTS OR ASCENDANTS
 o Abandoned children or induced to live corrupt/immoral life
o Convicted of attempt against life of testator, spouse, D, or A
o Accused testator of crime prescribing imprisonment for 6 yrs or
more and found false
o Convicted of adultery or concubinage with testator’s spouse
o Cause testator to make will by fraud, violence, intimidation,
undue influence
o Loss of parental authority
o Refusal to support without justifiable cause
o Attempt by one parent against life of the other
o Unless there’s reconciliation
DISINHERIT A SPOUSE
o Convicted of attempt against life of testator, D and A
o Accused testator of crime prescribing imprisonment for 6 yrs or
more and found false
o Cause testator to make will by fraud, violence, intimidation,
undue influence
o Gave cause for legal separation
o Repeated physical abuse/grossly abusive conduct
o Physical abuse/moral pressure to change
religious/political belief
o Engage in prostitution
o Convicted of imprisonment of more than 6 yrs
o Drug addiction, habitual alcoholism
o Homosexuality, lesbianism
o Subsequent bigamous marriage
o Sexual infidelity
o Attempt against life
o Abandonment for more than 1yr w/o justifiable cause
 Grounds for loss of parental authority
 Unjustifiable refusal to support children
923. RIGHT OF REPRESENTATION for persons disinherited (only
compulsory heirs); renounced inheritance, predeceased. Doesn’t apply
to those who repudiated their share.
 Called by law and not by person represented
 Succeed the one whom the person represented would have
succeeded and not the person represented
 Always in direct descending line
 Collateral line – in favor of children of brothers/sisters
 PER STIRPES – “share equal to that of the indiv they’re
representing” (division of estate)
o Rep not to inherit more than what the person they
represent would inherit
 PER CAPITA - if a member of the identified group is
deceased, then a share won’t be created for the
deceased member and all of the shares of the other
members will be increased accordingly. (art. 987)
 May represent one who renounced his inheritance
IF ESTATE NOT SUFFICIENT TO COVER ALL LEGACIES AND DEVISES:
 Remuneratory l or d
 Declared by testator to be preferential
 Support
 Education
 Specific, determinate thing
 All others pro rata
LEGAL/INTESTATE SUCCESSION
 Dies without will
 Void will
 Subsequently lost its validity
 Will doesn’t institute an heir or dispose all property
 Suspensive condition doesn’t happen
 Heir dies before testator
 Repudiates inheritance and no substitution and no accretion
 Incapable of succeeding
 Relatives in same degree = equal shares
992. ILLEGITIMATE CHILDREN (iron curtain rule)
 Absolute separation between legitimate and illegitimate
  Illegitimate child can’t inherit by intestacy from legitimate
children +relatives of his father and mother
 Legitimate children and relatives can’t inherit from illegitimate
child
COLLATERAL RELATIVES
 To succeed if no D, A, Illegitimate children, spouse
 If brothers, sisters survive with nephews and nieces, former to
inherit per capita and latter per stirpes
 Right to inherit ab intestato not to extend beyond the 5th degree
of relationship in collateral line
RIGHT OF ACCRETION (RIP)
 Part assigned to one who renounces or can’t receive or dies
before testator, is added to co-heir-devisees-legatees.
 2 or more persons called to the same inheritance
1027. INCAPABLE OF SUCCEEDING:
 Priest who heard confession of testator/spiritual aid during his
last illness
 Relatives of priest within 4th degree, church to which he belong
 Guardian before final accounts of guardianship approved
 Attesting witness to execution of will, spouse, parent, children
 Physician, nurse who took care of T during his last illness
 Indivs, assoc not permitted by law to inherit
 DUE TO UNWORTHINESS (1032)
o Parents who abandoned their children or induced to lead
corrupt/immoral life
o Convicted of attempt against life of T, spouse, D, A
o Accused T of crime of 6 yrs or more imprisonment if
groundless
o Heir of full age with knowledge of violent death of T and
failed to report to officer within a monh
o Convicted of adultery/concubinage with spouse of T
o Cause T to make will by fraud, violence, I, UE
 Or prevents one from making a will or from
revoking, or supplants, alters will
 Falsifies/forges will
1039. CAPACITY TO SUCCEED governed by law of nation of decedent
1050. Inheritance deemed accepted
 Heir sells, donates, assigns right to stranger, co-heir
 Heir renounces for benefit of co-heirs
 Renounces for a price in favor of co-heirs
COLLATION
 Every compulsory heir to bring into mass estate any
property/right he received from decedent by donation or any
gratuitous title
 To determine legitimes of each heir
PARTITION
 Every co-heir has right to demand division of estate UNLESS
testator expressly forbids such (not to exceed 20 yrs)
ORDINARY ACQUISITIVE PRESCRIPTION
 Possession in gf and with just title
 Possession in the concept of owner, public, peaceful and
uninterrupted
 If by mere tolerance, not counted as possession
 Express or tacit recognition of owner’s right interrupts
possession
 Possession of 10 yrs
EXTRAORDINARY ACQUISITIVE PRESCRIPTION
 Uninterrupted adverse possession for 30yrs
 No need for title or gf
PRESCRIPTION
 To recover movable = 8yrs
  Immovable = 30yrs o competent authority
 Mortgage action = 10yrs o for public use
 Demand right of way and abate public/private nuisance = no o just compensation
prescription
 10 yrs POLICE POWER
o written contract  property condemned/seized by
o obligation created by law o competent authority
o judgment o for health, safety, security
 6yrs o no compensation
o oral contract
o quasi-contract 438. HIDDEN TREASURE
 4yrs  hidden and unknown deposit of money, jewelry, precious
o injury to plaintiff’s rights objects, lawful ownership of w/c doesn’t appear
o quasi-delict  belongs to owner of land, bldg., property on which it is found
 1 yrs  if found on property of another or State and by chance
o forcible entry and detainer o ½ to finder (not a trespasser)
o defamation o ½ to owner
 if of interest to science/arts, State may acquire at just price
PROPERTY
 public dominion RIGHT OF ACCESSION
o for public use (canals, roads, bridges, ports, shores)  produced, incorporated or attached
o belong to the State, for public service or development of  natural fruits – spontaneous products
national wealth  industrial – cultivation and labor
o patrimonial property – belongs to the State but not for  civil – rents, leases
public use or service
 private ownership BUILT, PLANTED, SOWN
 GR: belong to owner of land and presumed made by him at his
OWNERSHIP expense
 right to enjoy and dispose  Owner uses materials of another: pay their value and owner of
 right of action to recover materials can remove them if he can w/o injury to work
o rely on strength of his title and not on weakness of d’s o If in bf: reparation of damages; may remove in any event
claim  BUILDER IN GF:
 right to exclude o landowner can appropriate as his own after paying
indemnity
EXPROPRIATION o or oblige builder to pay price of land and sower, rent
 deprive property by
  but if value of land is considerably more than that
of bldg. or trees, pay reasonable rent
 BUILDER IN BF
o Loses what is built, p or s without indemnity
o Landowner
 may demand demolition/removal at expense of
builder or (+damages)
 compel builder or planter to pay price of land and
sower, proper rent +damages
 LANDOWNER (knowledge and w/o opposition) AND BUILDER
IN BF
o As though both acted in gf
457. ACCRETION
 Belongs to owners of lands adjoining banks of rivers
 Gradually receive
 from effects of current of waters
 Belong to owners whose lands are occupied by new course in
proportion to area lost
 Owners of adjoining old beds have right to acquire by paying
value
BELONG TO STATE
 Islands formed
o On seas within jurisdiction of Phil
o On lakes
o On navigable or floatable rivers
 Except if in non-navigable and non-floatable rivers
 Owners of margins/banks nearest to each
of them
PRINCIPAL
 That to which the other has been united as ornament
 Greater value and if equal, greater volume

NO ACCRETION Owner of accessory in BF

 Owners of estates adjoining ponds/lagoons  Lose thing incorporated
 Don’t acquire land left dry  Indemnify owner of principal for damages
 By natural decrease of waters
o Doesn’t lose that inundated by extraordinary floods OWNER OF PRINCIPAL IN BF
 Owner of accessory can choose
Portion of land o Principal to pay him its value
 Segregated by current of river, creek or torrent o Thing be separated even if principal thing is destroyed
 Transferred to another estate  Plus damages
 Ownership retained but must remove within 2yrs
MIXTURE BY WILL OR BY CHANCE
Trees uprooted  If not separable without injury
 Carried away by current of waters o Each owner has proportional right to part belonging to
 Must be claimed within 6mos him
o If not, belong to owner of land  If bad faith, lose thing belonging to him + damages

River beds abandoned QUIET TITLE

 Thru natural change in course of waters  Cloud on title to real property/interest
  Instrument, record, claim, encumbrance, proceeding USUFRUCT
o Apparently valid but is in truth and in fact invalid,  Right to enjoy with obligation to preserve form and substance
ineffective, voidable or unenforceable  Stranger as to hidden treasure
o Prejudicial to said title  Entitled to fruits (natural and industrial, civil)
 Ordinary repairs
CO-OWNERSHIP o Wear and tear due to natural use
 Preservation repairs – notify other co-owners if practicable o For preservation
 MAJORITY (co-owners who represent controlling interest) o Usufructuary to pay
o Improve/embellish thing  Taxes and lien on fruits
o Administration and better enjoyment  Extraordinary repairs
 ALL o Owner’s expense
o Make alterations  Taxes imposed directly on capital
 Full ownership of his part  EXTINGUISH
o May alienate, assign or mortgage o Death of usufructuary
o Limited to portion which may be allotted to him in  If in favor of several UYs, not extinguish til death
division upon termination of co-ownership of last survivor
 Agreement to keep thing undivided o Expiration of period/fulfillment of resolutory condition
o Max of 10yrs. To extend by new agreement o Merger of U and O
o If donor/testator: 20 yrs max o Renunciation of U
o Total loss
POSSESSION  If partial loss, continue on remaining part
 IN GF: not aware that there exists in his title/mode of o Termination of right
acquisition any flaw which invalidates it o Prescription
 No possession (prescription purposes):  GR: number of yrs specified to subsist even if 3rd person dies
o acts merely tolerated before period expires
o without knowledge of possessor of thing o Exc: expressly granted only in consideration of existence
o by violence of such person
 question as to possession  Usufruct on LAND AND BUILDING
o present possessor preferred o If bldg. gets destroyed, UY has right to land and materials
o two possessor, one longer in possession
o date the same: title EASEMENTS/SERVITUDES
 NECESSARY EXPENSES  Encumbrance upon an immovable for the benefit of another
o Refunded to every possessor (gf or bf) immovable (diff owner)
o If gf, retain thing til reimbursed o Dominant estate- whom easement is made
 EXPENSES FOR LUXURY/MERE PLEASURE  Choose most convenient time and manner
o No refund to possessor in gf but may remove if no injury  Cause least inconvenience to servient
 o Servient – subject to easement
 CHARACTERISTICS
o Continuous – use is incessant without intervention of any
man’s act
o Discontinuous – used at intervals and depends upon
man’s acts
o Apparent – made known & continually kept in view by
external signs
o Non-apparent – show no external indication of existence
 Continuous + apparent = acquired by title or 10yrs
prescription (e.g. aqueduct)
 Continuous + non-apparent = title only
 Discontinuous (a or not)= title only
 EXTINGUISH
o Merger of D and S owners
o Non-use for 10yrs
o Estates fall into condition where easement can’t be used
o Expiration of term/fulfillment of condition
o Renunciation of D
o Redemption agreed b/n d and s
 WATERS
o Lower estates to receive waters descending from higher
estates
o Banks of rivers and streams – zone of 3meters along their
margins to public use
 RIGHT OF WAY
o Immovable surrounded by other immovable
o Without adequate outlet to public highway
 If permanent
 Indemnify value of land occupied
 Amount of damage
o Least prejudicial to servient + shortest distance from
dominant estate to public highway
 AGAINST NUISANCE
o Noise, offensive odor, smoke, heat, dust, etc
o Factories and shops allowed provided least annoyance is
caused to the neighborhood
 LATERAL AND SUBJACENT SUPPORT
o Excavations causing danger to adjacent land = void
NUISANCE
 Act, omission, establishment, condition of property or
o Injures/endangers health or safety of others
o Annoys/offends senses
o Shocks, defies decency/morality
o Obstructs with free passage of public
highway/street/body of water
o Hinders/impairs use of property
 Remedies
o Prosecution
o Civil action
o Abatement w/o judicial proceedings
 By private person
 Demand first upon owner/possessor
 Demand is rejected
 Abatement approved by health office
 Value of destruction doesn’t exceed 3k
VOID DONATION
 B/n persons guilty of adultery or concubinage
 Guilty of such offense, in consideration thereof
 Public officer or wife, d, a by reason of his office
 To incapacitated persons
DONATION
 Donee must accept
o During lifetime of donor and donee
 Movable – orally or in writing
o Oral required simultaneous delivery
o If exceeds 5k, donation and acceptance = in writing. If
not, void.
  Immovable
o Public document
REVOKE OR REDUCE DONATION (exceeds portion that may be freely
disposed) ---prescribes after 4 yrs
 After donation, donor has legit, legitimated or illegitimate
children (even though posthumous)
 Donor’s child turn out be alive (believed to be dead)
 Donor subsequently adopt minor child
DONOR MAY REVOKE (DUE TO INGRATITUDE)
 Commits offense against person, honor, property of donor, wife,
children under his parental authority
 Imputes to donor any criminal offense/act of moral turpitude
even if proven
o Unless if against donee and family
 Unduly refuses him support
o Prescribes in 1 yr from time donor had knowledge of fact
SALES
 Contract of sale – perfected upon mtng of minds upon thing
(object and price)
o Transfer ownership and deliver determinate thing Goods
procured for general market
 If manufactured specially and not for general
market, contract for piece of work. Not contract of
sale.
o Pay price certain in money/equivalent
 If not fix, inefficacious
 Simulated price = void
 Sale of vain hope or expectancy is void.
 Gross inadequacy of price allowed except if it indicates defect in
consent
 CONTRACT TO SELL (1478)
o Stipulation that ownership in thing shall not pass to
purchaser til he has fully paid the price
 Accepted unilateral promise to buy or sell
o Binding upon promissor if supported by consideration
distinct from price
 EARNEST MONEY
o Part of price and proof of perfection of contract of sale
1483. RECTO LAW
 Contract of sale of personal property
 Payable in installments
 Vendor may
o Exact fulfillment if vendee fails to pay
o Cancel sale for vendee’s failure to pay 2 or more
installments
o Foreclose chattel mortgage for vendee’s failure to pay 2
or more installments (RECTO)
 Can’t recover unpaid balance of price
DISQUALIFIED TO ACQUIRE BY PURCHASE
 Guardians
 Agents
 Executors and administrators
 Public officers and employees
 Justices, judges, prosecuting attys
SELLER’S RISK
 Until ownership is transferred to buyer
BUYER’S RISK
 Ownership is transferred WON there’s actual delivery
 Ownership retained by seller merely to secure performance by
buyer
BUYER ACQUIRES NO BETTER TITLE THAN THE SELLER
 If seller is not the owner or no authority to sell
 Except
 o Apparent owner of goods as if true owner
o Under statutory power of sale or order of court
o Made in merchant’s store, in fairs or markets
CONTRACT RATE
 Deliver quantity of goods less than he contracted to sell
o Buyer may reject
o Buyer may accept/retain knowing seller isn’t going to
perform in full
 Pay contract rate
FAIR VALUE
 Buyer uses goods before knowing that seller can’t perform in full
o Pay fair value only of goods received
o Vendor reserves right to repurchase thing sold
 Legal redemption
o Right to be subrogated upon same terms and conditions
in contract in place of one who acquires it by onerous
title
1602. PRESUMED EQUITABLE MORTGAGE
 Price of sale with right to repurchase is unusually inadequate
 Vendor remains in possession as lessee
 Extending period of redemption/new period after expiration of
right to repurchase
 Purchaser retains part of purchase price
 Vendor binds himself to pay taxes
 Real intention is secure payment of debt

UNPAID SELLER LEASE

 Lien on goods/right to retain  Lessee can’t assign lease without consent of lessor
 Right of stopping of goods in transit after he has parted with o Unless stipulation to contrary
possession  Lessee may sublet thing leased (whole or part)
o May resume possession o Unless there’s express prohibition
 Right of resale o Sublessee bound to lessor for use and preservation of
 To rescind the sale thing leased
 Subsidiarily liable to lessor for rent due from
1544. DOUBLE SALE lessee
 Same thing sold to different vendees  IMPLIED NEW LEASE
o Movable property o Lessee continues to enjoy thing leased for 15 days at end
 Owned by the one who first took possession in GF of contract with acquiescence of lessor
o Immovable property
o Owned by one who first recorded it in Registry of PARTNERSHIP
Property in GF  To contribute money, property, industry to common fund to
 If no inscription divide profits among themselves.
o First to take possession in gf and if not  Juridical personality separate and distinct from partners
o One who presents oldest title in gf  Share of losses and profits as to agreement
o If none, in proportion to what he may have contributed
EXTINGUISHMENT OF SALE o Industrial partner not liable for losses
 Conventional redemption
  Receive share as may be just and equitable under  No pre-existing contract
the circumstances
 Stipulation which excludes one or more partners from share in 2180. Demandable not only for one’s own acts but also for those
profits or losses is void (1799) persons whom one is responsible
 Father—mother(if father is dead or incapacitated)= minor
AGENCY children who live in their company
 Binds himself to render service or do something in  Guardians=minors/incapacitated under their authority and live
representation/behalf of another with consent/authority of in their company
another  Owners/managers of establishment = employees in service
 Sale of land  Employers = employees and household helpers acting within
o Authority be in writing. Otherwise, void sale (1874) scope of assigned tasks
 State if it acts thru special agent
GUARANTY  Teachers/heads of establishments of arts and trades = pupils,
 Binds himself to creditor students, apprentices as long as they remain in custody
o Fulfill obligation of principal debtor
 If bind solidarily, suretyship Provinces, cities, mun
 GR: Exhaust all property of debtor first and resort to all legal  Liable for damages for death/injury
remedies against debtor before compelling guarantor to pay  Due to defective condition of roads, streets, bridges, public
o EXC: (NO EXCUSSION) works under their control or supervision
 Guarantor expressly renounced it
 Bound solidarily with debtor 1156. An Obligation is a juridical necessity to give, to do or not to do.
 Debtor’s insolvency 1157. Obligations arise from law, contracts, quasi-contracts, acts or omissions
 Absconded/can’t be sued punished by law and quasi-delicts.
 Execution wouldn’t satisfy oblig
1158. LAW
PLEDGE & MORTGAGE Obligations derived from law are not presumed. Only those expressly
determined in this Code or in special laws are demandable and shall be
 Secure fulfillment of principal oblig
regulated by the precepts of the law which established them and as to what
 Pledger/mortgagor – absolute owner has not been foreseen, by the provisions of this Book.
 Free disposal of their property
1159. CONTRACTS
QUASI-DELICTS Obligations arising from contracts have the force of law between the
 Act/omission causes damage to another contracting parties and should be complied with in good faith.
 Fault or negligence
o Entirely separate and distinct from civil liability arising 1160. QUASI-CONTRACTS
from negligence under Penal Code Obligations derived from quasi-contracts shall be subject to the provisions of
Chapter 2, Title 17 (Extra-contractual obligations)
 Pay for the damages
1161. CRIMES
Civil obligations arising from criminal offenses shall be governed by the penal
laws, subject to Art. 2177 (Quasi-delicts)
 Responsibility for fault or negligence under the preceding article
(quasi-delict) is entirely separate and distinct from the civil liability
arising from negligence under the Penal Code. But the plaintiff cannot
recover damages twice for the same act or omission of the defendant.
and of human relations provisions and Title 18 regulating damages.
1162. QUASI-DELICT
Obligations derived from quasi-delicts shall be governed by Chapter 2, Title
17 and by special laws.
1163. STANDARD OF CARE
Every person obliged to give something is also obliged to take care of it with
the proper diligence of a good father of a family, unless the law or the
stipulation of the parties requires another standard of care.
1164. RIGHT TO THE FRUITS
The creditor has a right to the fruits of the thing from the time the obligation
to deliver it arises. However, he shall acquire no real right over it until the
same has been delivered to him.
1165. DETERMINATE THING
When what is to be delivered is a determinate thing, the creditor (aside from
right to damages-Art. 1170) may compel the debtor to make the delivery.
INDETERMINATE THING
If the thing is indeterminate or generic, he may ask that the obligation be
complied with at the expense of the debtor.
If the obligor DELAYS or has promised to deliver the same thing to TWO or
MORE PERSONS who do not have the same interest, he shall be responsible
for fortuitous event until he has effected the delivery.
1166. ACCESSIONS and ACCESSORIES
The obligation to give a determinate thing includes that of delivering all it
accessions and accessories, even though they may not have been mentioned.
1167. POORLY DONE BE UNDONE
If a person obliged to do something fails to do it, the same shall be executed at
his cost.
Same rule shall be observed if he does it in contravention of the tenor of the
obligation. May be decreed that what has been poorly done be undone.
1168. DOES A FORBIDDEN ACT
When the obligation consists in not doing, and obligor does what has been
forbidden him, it shall also be undone at his expense.
1169. DELAY from time of DEMAND
Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extrajudicially demands from them the fulfillment of their
obligation.
DEMAND NOT NECESSARY = DELAY
However, demand by the creditor shall not be necessary for delay to exist:
1. Obligation or law expressly so declares
2. From the nature and the circumstances of the obligation it appears that the
designation of TIME when the thing is to be delivered or service is to be
rendered was a CONTROLLING MOTIVE for the establishment of the contract
3. Demand would be useless, as the obligor has rendered it beyond his power
to perform.
RECIPROCAL OBLIGATIONS
In reciprocal obligations, neither party incurs in delay if the other party does
not comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills his
obligation, delay by the other begins.
1170. FRAUD, NEGLIGENCE, DELAY
Those who in the performance of their obligations are guilty of fraud,
negligence or delay and those who in any manner contravene the tenor
thereof, are liable for damages.
1171. FRAUD
Responsibility arising from fraud is demandable in all obligations. Any waiver
of an action for future fraud is void.
1172. NEGLIGENCE
Responsibility arising from negligence in the performance of every kind of
obligation is also demandable, but such liability may be regulated by the
courts, according to the circumstances.
1173. OMISSION OF DILIGENCE
Fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence
shows bad faith, 1171 (fraud) and par. 2, 2201 shall apply:
 In case of fraud, bad faith, malice or wanton attitude, the obligor shall
be responsible for all damages which may be reasonably attributed to
the non-performance of the obligation.
DILIGENCE REQUIRED
If the law or contract does not state the diligence which is to be observed in
the performance, that which is expected of a good father of a family shall be
required.
1174. NOT RESPONSIBLE for UNFORSEEN
No person shall be responsible for those events which could not be foreseen,
or which though foreseen, were inevitable.
EXCEPT:
-in cases expressly specified by law, or
-when it is otherwise declared by stipulation
-when nature of the obligation requires the assumption of risk
1175. USURIOUS TRANSACTIONS shall be governed by special laws.
1176. PRESUMPTION OF PAID INTEREST
Receipt of the principal by the creditor, without reservation with respect to
the interest, shall give rise to the presumption that said interest has been paid.
PRESUMPTION OF PAID INSTALLMENTS
Receipt of a later installment of a debt without reservation as to prior
installments shall give rise to the presumption that such installments have
been paid.
1177. TO SATISFY CREDITOR’S CLAIMS
The creditors, after having pursued the property in possession of the debtor
to satisfy their claims, may exercise all the rights and bring all the actions of
the latter for the same purpose, save those which are inherent in his person;
they may also impugn the acts which the debtor may have done to defraud
them.
1178. TRANSMISSIBLE RIGHTS
All rights acquired in virtue of an obligation are transmissible, if there has
been no stipulation to the contrary and subject to the laws.
1179. PURE OBLIGATION
Every obligation whose performance does not depend upon a future or
uncertain event, or upon a past event unknown to the parties, is demandable
at once.
Every obligation which contains a RESOLUTORY CONDITION shall also be
demandable, without prejudice to the effects of the happening of the event.
1180. OBLIGATION WITH A PERIOD
When the debtor binds himself to pay when his means permit him to do so,
the obligation shall be deemed to be one with a period, subject to 1197.
 If the obligation does not fix a period, but from its nature and
circumstances it can be inferred that a period was intended, the courts
may fix the duration thereof.
Courts shall also fix the duration of the period when it depends upon
the will of the debtor.
Courts shall determine such period as may under the circumstances
have been probably contemplated by the parties. Once fixed by the
courts, period cannot be changed by them.
1181. CONDITIONAL OBLIGATION
In conditional obligations, the acquisition of rights as well as the
extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition.
1182. SOLE WILL OF DEBTOR
When fulfillment of condition depends upon sole will of the debtor,
conditional obligation is void. If it depends upon chance or upon will of 3rd
person, obligation shall take effect in conformity with this Code.
1183. IMPOSSIBLE CONDITION
Impossible conditions, those contrary to good customs or public policy and
those prohibited by law shall ANNUL the obligation which depends upon
them.
If obligation is divisible, the part not affected by the impossible/unlawful
condition shall be valid.
Condition not to do an impossible thing shall be considered as not having
been agreed upon.
1184. CONDITION: EVENT TO HAPPEN
The condition that some event happen at a determinate time shall extinguish
the obligation as soon as the time expires or it has become indubitable that
the event will not take place.
1185. CONDITION: EVENT NOT TO HAPPEN
The condition that some event will not happen at a determinate time shall
render the obligation effective from the moment the time indicated has
elapsed, or it has become evident that the event cannot occur.
NO TIME FIXED
If no time has been fixed, the condition shall be deemed fulfilled at such time
as may have probably been contemplated, bearing in mind the nature of the
obligation.
1186. DEEMED FULFILLED
The condition shall be deemed fulfilled when the obligor voluntarily prevents
its fulfillment.
1187.EFFECTS OF CONDITIONAL OBLIGATION
The effects of a conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the constitution of the obligation.
RECIPROCAL PRESTATIONS
Nevertheless, when the obligation imposes reciprocal prestations upon the
parties, the fruits and interests during the pendency of the condition shall be
deemed to have been mutually compensated.
UNILATERAL OBLIGATION
If the obligation is unilateral, the debtor shall appropriate the fruits and
interests received, unless from the nature and circumstances of the obligation
it should be inferred that the intention of the person constituting the same
was different.
In obligations to do and not to do, the courts shall determine, in each case, the
retroactive effect of the condition that has been complied with.
1188. CREDITOR PRESERVES HIS RIGHT
The creditor may, before the fulfillment of the condition, bring the
appropriate actions for the preservation of his right.
RECOVER MONEY PAID BY MISTAKE
Debtor may recover what during the same time he has paid by mistake in case
of a suspensive condition.
1189.IMPROVEMENT,LOSS,DETERIORATION
When conditions have been imposed with the intention of suspending the
efficacy of an obligation to give, ff. rules shall be observed in case of
improvement, loss or deterioration of the thing during pendency of the
condition:
LOSS
1. If the thing is lost without the fault of the debtor, the obligation shall be
extinguished
2. If the thing is lost through the fault of the debtor, he shall be obliged to pay
damages; it is understood that the thing is lost when
 It perishes
 Goes out of commerce
 Disappears in such a way that its existence is unknown or it cannot be
recovered.
DETERIORATION
3. When the thing deteriorates without the fault of the debtor, impairment is
to be borne by the creditor.
4. If is deteriorates through the fault of the debtor, creditor may choose
between the rescission of the obligation and its fulfillment, with indemnity for
damages in either case.
IMPROVEMENT
5. If the thing is improved by nature or by time, improvement shall inure to
the benefit of the creditor.
6. If it is improved at the expense of the debtor, he shall have no other right
than that granted to the usufructuary1.
1190. RESOLUTORY CONDITION
When the conditions have for their purpose the extinguishment of an
obligation to give, the parties upon the fulfillment of the conditions, shall
return to each other what they have received.
In case of Loss, Deterioration, or Improvement of the thing, 1189 with respect
to the debtor shall be applied to the party who is bound to return.
For obligations to do and not to do, par. 2 of 1187(courts to determine
retroactive effect of conditions complied with) shall be observed as to the
effect of the extinguishment of the obligation
1191. RECIPROCAL OBLIGATIONS
The power to rescind obligations is implied in reciprocal ones, in case one of
the obligors should not comply with what is incumbent upon him.
FULFILLMENT OR RESCISSION
Injured party may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek
rescission even after he has chosen fulfillment, if the latter should become
impossible.
1legal right of using and enjoying the fruits/profits of something
belonging to another
Court shall decree rescission claimed, unless there be just cause authorizing
the fixing of a period.
This is without prejudice to the rights of 3rd persons who have acquired the
thing, in accordance with 1385 (no rescission is 3rd person legally possessed it
in good faith) and 1388 (if in bad faith, indemnify creditors for damages) and
the Mortgage Law.
1192. BOTH BREACHED THE OBLIGATION
In case both parties have committed a breached of the obligation, the liability
of the first infractor shall be equitably tempered by the courts.
If it cannot be determined which of the parties first violated the contract,
same shall be deemed extinguished and each shall bear his own damages.
1193. OBLIGATIONS WITH A PERIOD
Obligations for whose fulfillment a day certain has been fixed, shall be
demandable only when that day comes.
Obligations with a RESOLUTORY PERIOD take effect at once, but terminate
upon arrival of the day certain.
A DAY CERTAIN is understood to be that which must necessarily come
although it may not be known when.
If the uncertainty consists in whether the day will come or not, obligation is
conditional and shall be regulated by the rules of preceding section
(Conditional obligations).
1194. Loss, deterioration or improvement of the thing BEFORE THE
ARRIVAL OF THE DAY CERTAIN, 1189 shall be observed.
1195. EARLY PAYMENT OR DELIVERY
Anything paid or delivered before the arrival of the period, obligor being
unaware of the period or believing that the obligation has become due and
demandable, may be recovered with fruits and interests.
1196. PRESUMED TO BENEFIT BOTH C and D
Whenever in an obligation a period is designated, it is presumed to have been
established for the benefit of both the creditor and the debtor, UNLESS from
the tenor of the same or other circumstances it should appear that the period
has been established in favor of one or of the other.
1197. COURTS TO FIX DURATION
If the obligation does not fix a period, but from its nature and circumstances it
can be inferred that a period was intended, the courts may fix the duration
thereof.
Courts shall also fix the duration of the period when it depends upon the will
of the debtor.
Courts shall determine such period as may under the circumstances have
been probably contemplated by the parties. Once fixed by the courts, period
cannot be changed by them.
1198. LOSE RIGHT TO USE PERIOD
The debtor shall lose every right to make use of the period:
1. When after the obligation has been contracted, he becomes INSOLVENT,
unless he gives a guaranty or security for the debt.
2. He DOESN’T FURNISH to the creditor the GUARANTIES or SECURITIES
which he has promised.
3. When by his own acts he has IMPAIRED said GUARANTIES/SECURITIES
after their establishment and when through a fortuitous event they disappear,
unless he immediately gives new ones equally satisfactory.
4. Debtor VIOLATES ANY UNDERTAKING, in consideration of which the
creditor agreed to the period
5. Debtor ATTEMPTS TO ABSCOND.
ALTERNATIVE OBLIGATIONS
1199.COMPLETELY PERFORM ONE OF THEM
A person alternatively bound by different prestations shall completely
perform one of them.
Creditor cannot be compelled to receive part of one and part of the other
undertaking.
1200. RIGHT OF CHOICE BELONGS TO DEBTOR
The right of choice belongs to the debtor UNLESS it has been expressly
granted to the creditor.
Debtor shall have no right to choose those prestations which are impossible,
unlawful or which could not have been the object of the obligation.
1201. CHOICE NEEDS TO BE COMMUNICATED
The choice shall produce no effect except from the time it has been
communicated.
1202. LOSE RIGHT OF CHOICE
Debtor shall lose right of choice when among the prestations whereby he is
alternatively bound, only one is practicable.
1203. WHEN DEBTOR CAN’T MAKE CHOICE
If through the creditor’s acts the debtor cannot make a choice according to the
terms of the obligation, debtor may rescind the contract with damages.
1204. CREDITOR’S RIGHT TO DAMAGES
The creditor shall have a right to indemnity for damages, when through the
fault of the debtor, which are all things alternatively the object of the
obligation have been LOST, or compliance of obligation has become
IMPOSSIBLE.
BASIS OF INDEMNITY
Indemnity shall be fixed taking as a basis the value of the last thing which
disappeared or that of the service which last became impossible.
Damages other than the value of the last thing or service may also be
awarded.
1205. CHOICE EXPRESSLY GIVEN TO CREDITOR
When choice has been expressly given to the creditor, obligation shall CEASE
to be ALTERNATIVE from the day selection has been communicated to the
debtor.
Until then the RESPONSIBILITY of the DEBTOR shall be governed by the ff.
rules:
DELIVER WHICH CREDITOR CHOOSES
1. If one of the things is lost thru fortuitous event, he shall perform the
obligation by delivering that which the creditor should choose from among
the remainder or that which remains if only one subsists.
PAY PRICE OF THING LOST and DAMAGES
2. If loss of one of the things is thru the fault of the debtor, creditor may claim
any of those subsisting or the price of that which, thru fault of debtor, has
disappeared with right to damages.
PAY PRICE OF ANY and DAMAGES
3. If all things are lost thru fault of debtor, choice by the creditor shall fall
upon the price of any one of them, also with indemnity for damages.
Same rules apply to obligations to do or not to do in case one, some or all
prestations become impossible.
1206. FACULTATIVE OBLIGATION
When only one prestation has been agreed upon, but the obligor may render
another in substitution, obligation is called facultative.
WHEN SUBSTITUTION IS MADE, LOSS OF IT
Loss or deterioration of the thing intended as substitute, thru negligence of
the obligor, doesn’t render him liable. But once the substitution has been
made, obligor is liable for the loss of the substitute on account of his delay,
negligence or fraud.
1207. JOINT OBLIGATION PRESUMED
The concurrence of 2 or more creditors or 2 or more debtors in one and the
same obligation does not imply that each one of the creditor has a right to
demand, or that each one of the debtor is bound to render entire compliance
with the prestation.
SOLIDARY LIABILITY = EXPRESSLY STATED
There is solidary liability only when the obligation expressly so states or when
the law or nature of the obligation requires solidarity.
1208. PRESUMED TO BE DIVIDED
If from the law, or nature/ wording of the obligations do not require
solidarity, credit or debt shall be presumed to be divided into as many equal
shares as there are creditors or debtors, credits or debts being distinct from
one another subject to RoC governing multiplicity of suits.
1209. DIVISION IS IMPOSSIBLE
If division is impossible, right of creditors may be prejudiced only by their
collective acts and debt can be enforced only by proceeding against all the
debtors.
If one of the debtors should be insolvent, the others shall not be liable for his
share.
1210. INDIVISIBILITY DOESN’T ALWAYS IMPLY SOLIDARITY
The indivisibility of an obligation does not necessarily give rise to solidarity.
Nor does solidarity of itself imply indivisibility.
1211. SOLIDARITY = MAY BE BOUND DIFFERENTLY
Solidarity may exist although the creditors and debtors may not be bound in
the same manner and by the same periods and conditions
1212. CAN DO ONLY WHAT IS USEFUL
Each one of the solidary creditors may do whatever may be useful to the
others, but not anything which may be prejudicial to the others.
1213. CAN’T ASSIGN RIGHTS W/O CONSENT
A solidary creditor cannot assign his rights without the consent of the others.
1214. MAY PAY ANY SOLIDARY CREDITOR
Debtor may pay any one of the solidary creditors but if any demand, judicial
or extrajudicial, has been made by one of them, payment should be made to
him
1215. NC (3)
Novation, compensation, confusion or remission/condonation of the debt,
made by any of the solidary debtors, shall extinguish the obligation without
prejudice to 1219.
 Remission by the creditor of the share which affects one of the
solidary debtors doesn’t release the latter from his responsibility
towards co-debtors, in case the debt had been totally paid by anyone
of them before remission was effected. (Remission of debtor doesn’t
release him from responsibility towards co-debtors)
Creditor who may have executed any of these acts, as well as he who collects
the debt, shall be liable to the others for the share in the obligation
corresponding to them.
1216. 1 or ALL of THEM SIMULTANEOUSLY
Creditor may proceed against any one of the solidary debtors or some or all of
them simultaneously. Demand made against one of them shall not be an
obstacle to those which may subsequently be directed against the others, so
long as the debt has not been fully collected.
1217. MAY CHOOSE w/c OFFER TO ACCEPT
Payment made by one of the solidary debtors extinguishes the obligation. If 2
or more solidary debtors offer to pay, creditor may choose which offer to
accept.
He who made the payment may claim from his co-debtors only the share
which corresponds to each, with the interest for the payment already made. If
payment is made before debt is due, no interest for the intervening period
may be demanded.
When one of the solidary debtors cannot reimburse his share to the debtor
paying the obligation due to INSOLVENCY, such share shall be borne by all his
co-debtors, in proportion to the debt of each.
1218. NOT ENTITLED TO REIMBURSEMENT
Payment by a solidary debtor shall not entitle him to reimbursement from his
co-debtors if such payment is made after obligation has PRESCRIBED or
become ILLEGAL.
1219. (Remission of debtor doesn’t release him from responsibility towards
co-debtors)
1220. NOT ENTITLED TO REIMBURSEMENT Remission of whole obligation,
obtained by one of the solidary debtors, doesn’t entitle him to reimbursement
from his co-debtors.
1221. WITHOUT FAULT OF DEBTORS
If the thing has been lost or if the prestation has become impossible without
the fault of the solidary debtors, obligation shall be extinguished.
THERE’S FAULT=PAY DAMAGES & INTEREST
If there was fault on the part of any one of them, all shall be responsible to the
creditor, for the price and payment of damages and interest, without
prejudice to their action against the guilty or negligent debtor.
FORTUITOUS EVENT
If through a fortuitous event, thing is lost or performance has become
impossible after one of the solidary debtors incurred in delay through
judicial/extrajudicial demand upon him by creditor, prior par applies (all be
responsible to creditor).
1222. DEFENSES OF SOLIDARY DEBTOR
A solidary debtor may, in actions filed by the creditor, avail himself of all
defenses which are derived from
 The nature of the obligation
 Those personal to him or pertain to his own share
 Those which personally belong to others only as regards that part of
the debt for which others are responsible.
1223. DIVISIBLE and INDIVISIBLE OBLIG
Divisibility and indivisibility of things which are the object of the obligations
in which there is only one debtor and only one creditor doesn’t alter/modify
nature and effects of obligation.
1224. JOINT INDIVISIBLE OBLIGATION
A joint indivisible obligation gives rise to indemnity for damages from the
time anyone of the debtors doesn’t comply with his undertaking. Debtors
who may have been ready to fulfill their promises shall not contribute to
indemnity beyond the corresponding portion of price of the thing or value of
service in which the obligation consists.
1225. INDIVISIBLE
Obligations to give definite things and those which are not susceptible of
partial performance shall be deemed to be indivisible.
DIVISIBLE
When the obligation has for its object the execution of a certain number of
days of work, accomplishment of work by metrical units, or analogous things
which by their nature are susceptible of partial performance, it shall be
divisible.
PHYSICALLY DIVISIBLE BUT INDIVISIBLE
Even though the object or service may by physically divisible, an obligation is
indivisible if so provided by law or intended by the parties.
1228. ACTUAL DAMAGES NOT NECESSARY
Proof of actual damages suffered by the creditor is not necessary in order that
penalty may be demanded.
1229. PENALTY MAY BE REDUCED
The judge shall equitably reduce the penalty when the principal obligation has
been partly or irregularly complied with by the debtor. Even if there had been
no performance, penalty may also be reduced by the courts it is INIQUITOUS
or UNCONSCIONABLE.
1230. NULLITY OF PENAL CLAUSE doesn’t carry with it that of the principal
obligation.
NULLITY OF PRINCIPAL obligation carries with it that of the penal clause.

CHARACTER OF PRESTATION
In obligations to do, divisibility or indivisibility shall be determined by the EXTINGUISHMENT OF OBLIGATIONS
character of the prestation in each particular case. 1231. OBLIGATIONS EXTINGUISHED BY:

1226. PENALTY SUBSTITUTES INDEMNITY for DAMAGES + INTERESTS 1. Payment or Performance

In obligations with a penal clause, penalty shall substitute indemnity for 2. Loss of the thing due
damages and payment of interests in case of noncompliance, if there is no 3. Condonation or Remission of debt
stipulation to the contrary. Nevertheless, damages shall be paid if the obligor 4. Confusion or Merger of rights of Creditor and Debtor
refuses to pay penalty or is guilty of fraud in fulfillment of obligation. 5. Compensation
6. Novation
Penalty may be enforced only when demandable according to this Code.
Other causes of extinguishment:
1227. PAYING PENALTY NOT ENOUGH  Annulment
Debtor cannot exempt himself from the performance of the obligation by  Rescission
paying the penalty, except where this right has been expressly reserved for  Fulfillment of a resolutory condition
him.  Prescription

Neither can creditor demand fulfillment of obligation and satisfaction of 1232. PAYMENT = PAY OR PERFORM
penalty at the same time, unless this right has been clearly granted him. Payment means not only the delivery of money but also the performance, in
any other manner of an obligation.
However, if after creditor has decided to require fulfillment of obligation,
performance should become impossible without his fault, penalty may be 1233. MUST BE COMPLETELY DELIVERED
enforced.
A debt shall not be understood to have been paid unless the thing or service in
which the obligation consists has been completely delivered or rendered as
the case may be.
1234. SUBSTANTIAL COMPLIANCE in GFaith
If the obligation has been substantially performed in good faith, obligor may
recover as though there had been a strict and complete fulfillment, less
damages suffered by obligee.
1235. ACCEPT = DEEMED FULLY COMPLIED
When the obligee accepts the performance, knowing its incompleteness or
irregularity, and without expressing any protest or objection, obligation is
deemed fully complied with.
1236. 3rd PERSON WITH NO INTEREST
Creditor is not bound to accept payment or performance by a 3rd person who
has no interest in the fulfillment of the obligation unless there is a stipulation
to the contrary.
REIMBURSEMENT
Whoever pays for another may demand from the debtor what he has paid,
except that if he paid without the knowledge or against the will of the debtor,
he can recover only insofar as the payment has been beneficial to the debtor.
1237. AGAINST KNOWLEDGE/ WILL OF Debtor
Whoever pays on behalf of the debtor without the knowledge or against the
will of the debtor, cannot compel the creditor to subrogate him in his rights,
such as those arising from a mortgage, guaranty or penalty.
1238. DONATION=D’s CONSENT REQUIRED
Payment by a 3rd person who does not intend to be reimbursed by the debtor
is deemed to be a donation, which requires the debtor’s consent. But payment
is in any case valid as to the creditor who has accepted it.
1239. HAS NO FREE DISPOSAL OF THING
In obligations to give, payment made by one who does not have the free
disposal of the thing due and capacity to alienate it shall NOT BE VALID,
without prejudice to 1427
 When a minor between 18 ad 21 yrs. old, who has entered into a
contract without the consent of the parent/guardian, voluntarily pays
sum of money or delivers a fungible thing in fulfillment of the
obligation – NO RIGHT TO RECOVER the same from obligee who has
spent or consumed it in good faith.
1240. PAY IN WHOSE FAVOR OBLIGATION WAS MADE
Payment shall be made to the person in whose favor obligation was
constituted, or his successor in interest, or any person authorized to receive it.
1241. VALID AS TO WHAT WAS BENEFICIAL
Payment made to person who is incapacitated to administer his property shall
be valid if he has kept the thing delivered or insofar as the payment has been
beneficial to him.
REDOUNDED TO BENEFIT OF CREDITOR
Payment made to a 3rd person shall also be valid insofar as it has redounded to
the benefit of the creditor. Such benefit NEED NOT BE PROVED in the ff. cases:
1. If after payment, 3rd person acquires creditor’s rights
2. If creditor ratifies the payment to 3rd person
3. If by creditor’s conduct, debtor has been led to believe that the 3rd person
has authority to receive payment.
1242. RELEASE DEBTOR
Payment made in good faith to any person in possession of credit shall release
the debtor.
1243. DEBTOR PAYS EVEN IF ORDERED NOT
Payment made to the creditor by the debtor after the debtor has been
judicially ordered to retain the debt shall not be valid.
1244. CANNOT COMPEL TO RECEIVE DIFF. 1
Debtor of a thing cannot compel the creditor to receive a different one,
although the latter may be of the same value as or more valuable than that
which is due.
In obligations to do or not to do, an act or forbearance cannot be substituted
by another act or forbearance against the obligee’s will.
1245. DATION IN PAYMENT
Dation in payment, where the property is alienated to the creditor in
satisfaction of a debt in money, shall be governed by the law of sales.
1246. DELIVERY OF GENERIC THING
When the obligation consists in the delivery of an indeterminate or generic
thing, whose quality and circumstances have not been stated, creditor cannot
demand a thing of superior quality. Neither can debtor deliver a thing of
inferior quality. Purpose of obligation and other circumstances shall be taken
into consideration.
1247. EXTRAJUDICIAL EXPENSES ON ACCOUNT OF DEBTOR
Unless it is otherwise stipulated, extrajudicial expenses required by the
payment shall be for the account of the debtor. Judicial costs to be governed
by RoC.
1248. CAN’T COMPEL TO RECEIVE PARTIALLY
Unless there is n express stipulation to that effect, creditor can’t be compelled
partially to receive the prestation in which the obligation consists. Neither
may debtor be required to make partial payments.
However, when debt is in part liquidated and in part unliquidated, creditor
may demand and the debtor may effect the payment of the former without
waiting for liquidation of the latter.
1249. BE MADE IN CURRENCY STIPULATED
Payment of debts in money shall be made in currency stipulated, and it if is
not possible to deliver such currency, then in the currency which is legal
tender in the Philippines.
CONDSIDERED PAID ONLY WHEN CASHED or IMPAIRED THRU
CREDITOR’S FAULT
The delivery of promissory notes payable to order, or bills of exchange or
other mercantile documents shall produce the effect of payment ONLY when
they have been CASHED, or when through the fault of the creditor they have
been IMPAIRED.
In the meantime, the action derived from the original obligation shall be held
in abeyance.
1250. VALUE OF CURRENCY
In case an extraordinary inflation or deflation of the currency stipulated
should supervene, the value of the currency at the time of the establishment of
the obligation shall be the BASIS OF PAYMENT, unless there is an agreement
to the contrary.
1251. PLACE OF PAYMENT
Payment shall be made in the PLACE DESIGNATED in the obligation.
There being no express stipulation and if the undertaking is to deliver a
determinate thing, the payment shall be made WHEREVER THE THING
MIGHT BE at the moment the obligation was constituted.
In any other case the place of payment shall be the DOMICILE of the DEBTOR.
If the debtor changes his domicile in bad faith or after he has incurred in
delay, additional expenses shall be borne by him.
Without prejudice to venue under RoC.
1252. VARIOUS DEBTS = SAME CREDITOR
He who has various debs of the same kind in favor of one and the same
creditor, may declare at the time of making the payment, to which of them the
same must be applied.
Unless the parties so stipulate, or when the application of payment is made by
the party for whose benefit term has been constituted, application shall not be
made as to debts which are not yet due.
If debtor accepts from creditor a receipt in which an application of payment is
made, debtor cannot complain of the same, unless there is a cause for
invalidating the contract.
1253.PAY INTERESTS 1ST B4 PRINCIPAL
If debt produces interest, payment of principal shall not be deemed to have
been made until the interests have been covered.
1254. DEBT MOST ONEROUS TO DEBTOR
When payment can’t be applied under preceding rules or can’t be inferred
from other circumstances, the debt which is most onerous to the debtor,
among those due, shall be DEEMED to have been SATISFIED.
If debts due are of the same nature and burden, payment be applied to all of
them PROPORTIONATELY.
1255. PAYMENT BY CESSION
Debtor may cede or assign his property to his creditors in payment of his
debts. This cession shall only release debtor from responsibility from net
proceeds of thing assigned UNLESS there is stipulation to the contrary.
With regard to effect of cession, agreements made between debtor and his
creditors shall be governed by special laws.
1256. TENDER OF PAYMENT
If creditor to whom tender of payment has been made refuses without just
cause to accept it, debtor shall be released from responsibility by consignation
of the thing or sum due.
CONSIGNATION ALONE produces same effect:
1. Creditor is absent or unknown, or doesn’t appear at the place of payment
2. Creditor is incapacitated to receive payment at the time it is due
3. Creditor refuses to give a receipt without just cause.
4. Two or more persons claim the same right to collect
5. Title of the obligation has been lost.
REQUIREMENTS FOR VALID CONSIGNATION
1257. PERSONS INTERESTED
To release obligor, must first be announced to the persons interested in the
fulfillment of obligation.
Consignation be ineffectual if not made strictly in consonance with provisions
which regulated payment.
1258. DEPOSIT THING DUE
Depositing the things due at the disposal of judicial authority, before whom
tender of payment shall be proved in a proper case and announcement of
consignation in other cases.
NOTIFY INTERESTED PARTIES AFTER C
After consignation has been made, interested parties shall be notified thereof.
1259. EXPENSES AGAINST CREDITOR
Expenses of consignation, when properly made, shall be charged against the
creditor.
1260. ORDER TO CANCEL OBLIGATION
Once consignation has been duly made, debtor may ask the judge to order the
cancellation of the obligation.
DEBTOR MAY WITHDRAW IT
Before creditor has accepted the consignation, or before a judicial declaration
that consignation has been properly made, debtor may withdraw the thing or
sum deposited, allowing obligation to remain in force.
1261.C AUTHORIZES WITHDRAWAL
If after consignation, creditor should authorize debtor to withdraw the same,
he shall lose every preference which he may have over the thing. Co-debtors,
guarantors and sureties shall be released.
1262. LOSS OF DETERMINATE THING
An obligation which consists in the delivery of a determinate thing shall be
EXTINGUISHED if it should be LOST or DESTROYED without fault of the
debtor and before he has incurred in delay.
LIABLE EVEN FOR FORTUITOUS EVENTS
When by law or stipulation, obligor is liable even for fortuitous events, loss of
thing DOESN’T EXTINGUISH the obligation, and obligor shall be responsible
for damages. Same rule applies when nature of obligation requires
assumption of risk.
1263. LOSS OF GENERIC THING
In an obligation to deliver a generic thing, loss of destruction of anything of
the same kind DOESN’T EXTINGUISH the obligation.
1264. PARTIAL LOSS
Courts shall determine whether under the circumstances, partial loss of the
obligation is so important as to extinguish the obligation.

1265. PRESUMPTION OF FAULT OF DEBTOR
Whenever the thing is lost in the possession of the debtor, it shall be
presumed that the loss was due to his fault unless there is proof to the
contrary and without prejudice to 1165.
Presumption doesn’t apply: earthquake, flood, storm or other natural
calamity.
1266. LEGALLY/ PHYSICALLY IMPOSSIBLE
The debtor in obligations to do shall also be released when PRESTATION
becomes legally or physically impossible without fault of obligor.
1267. SERVICE BECOMES SO DIFFICULT
When service has become so difficult as to be manifestly beyond the
contemplation of the parties, obligor may also be released in whole or in part.
1268. DEBT FROM CRIMINAL OFFENSE
When debt of a thing certain and determinate proceeds from a criminal
offense, debtor shall NOT BE EXEMPTED from payment of its price whatever
may be the cause for the loss, unless the person who should receive it refused
without justification to accept it after the thing has been offered by debtor.
1269. CREDITOR HAS ALL RIGHTS OF ACTION
When obligation has been extinguished by loss of the thing, creditor shall have
all the rights of action which debtor may have against 3rd persons by reason of
the loss.
1270. CONDONATION/REMISSION
Essentially gratuitous and requires acceptance by the obligor. May be made
expressly or impliedly.
One and other kinds shall be subject to rules governing inofficious documents.
Express condonation shall comply with forms of donation.
1271. IMPLIES RENUNCIATION OF DEBT
Delivery of private document evidencing a credit, made voluntarily by
creditor to debtor, implies renunciation of action by creditor against debtor.
If creditor claimed it to be inofficious to nullify the waiver, debtor and his
heirs may uphold it by proving that delivery of document was made in virtue
of payment of debt.
1272. PRESUMED DELIVERED VOLUNTARILY
When private document where debt appears is found in the possession of
debtor, it shall be presumed that creditor delivered it voluntarily unless
contrary is proved.
1273. EXTINGUISH ACCESSORY OBLIG
Renunciation of principal debt shall extinguish accessory obligations but
waiver of accessory obligations shall leave the principal debt in force.
1274. ACCESSORY PRESUMED REMITTED
It’s presumed that the accessory obligation of pledge has been remitted when
thing pledged is found in possession of debtor or 3rd person who owns the
thing after its delivery to the creditor.
1275. CONFUSION/ MERGER OF RIGHTS
Obligation is extinguished from the time characters of creditor and debtor are
merged in the same person.
1276. MERGER
Merger which takes place in the person of principal debtor or creditor
benefits the guarantors.
CONFUSION
Confusion which takes place in the person of any of the guarantors doesn’t
extinguish obligation.
1277. JOINT OBLIGATION
Confusion doesn’t extinguish joint obligation except as regards the share
corresponding to creditor or debtor in whom the two characters concur.
1278. COMPENSATION (C & D of each other)
Compensation shall take place when 2 persons, in their own right, are
creditors and debtors of each other.
1279. VALID COMPENSATION REQUIRES
1. Each one of the obligors be bound principally and that he be at the same
time a principal creditor of the other;
2. Both debts consist in a sum of money or if the things due are consumable,
they be of the same kind and of the same quality if quality has been stated;
3. Two debts be due
4. They be liquidated and demandable
5. No retention or controversy over either of them was commenced by 3rd
persons and communicated in due time to the debtor.
1280. DEPENDS ON CREDITOR’S DEBT
Guarantor may set up compensation as regards what the creditor may owe
the principal debtor.
1281. TOTAL COMPENSATION
Compensation may be total or partial. When 2 debts are of the same amount,
there is total compensation.
1282. DEBTS NOT YET DUE
Parties may agree upon the compensation of debts which are not yet due.
1283. CLAIM FOR DAMAGES
If one of the parties to a suit over an obligation has a claim for damages
against the other, the former may set it off by proving his right to said
damages and the amount thereof.
1284. BEFORE JUDICIALLY RESCINDED
When one or both debts are rescissible or voidable, they may be compensated
against each other before they are judicially rescinded or avoided.
1285. ASSIGNMENT OF RIGHTS by CREDITOR
DEBTOR CONSENTED
Debtor who has consented to assignment of rights made by creditor in favor
of 3rd person cannot set up against the assignee the compensation which
would pertain to him against assignor, unless assignor was notified by debtor
at the time he gave his consent that he reserved his right to compensation.
DEBTOR DID NOT CONSENT
If creditor communicated the cession to him but debtor did not consent,
debtor may set up the compensation of debts previous to the cession but not
of subsequent ones.
WITHOUT KNOWLEDGE OF DEBTOR
If assignment is made without knowledge of debtor, he may set up the
compensation of all credits prior to the assignment and also later ones until
he had knowledge of the assignment.
1286. BY OPERATION OF LAW
Compensation takes place by operation of law even though debts may be
payable at different places, but there shall be indemnity for expenses of
exchange or transportation to the place of payment.
1287. COMPENSATION NOT PROPER
When one of the debts arises from a depositum or from obligations of a
depositary or of a bailee in commodatum.
Also, when a creditor has a claim for support by gratuitous title, without
prejudice to 301.
If one of the debts consist in civil liability arising from a penal offense. (1288)
1289. ORDER OF COMPENSATION
If a person should have against him several debts which are susceptible of
compensation, rules on application of payment apply to order of
compensation.
1290. ALL REQUISITES PRESENT
Compensation takes effect by operation of law, & extinguishes both debts to
the concurrent amount, even though the creditors and debtors are not aware
of the compensation.
1291. NOVATION
Obligations may be modified by:
1. Changing their object or principal conditions
2. Substituting the person of the debtor
3. Subrogating a 3rd person in the rights of the creditor
1292. TO EXTINGUISH OBLIGATION
For an obligation to be extinguished by another which substitutes the same, it
is imperative that it be so declared in UNEQUIVOCAL TERMS or that the old
and new obligations be on every point INCOMPATIBLE with each other.
1293. CREDITOR’S CONSENT REQUIRED
Novation which consists in substituting a new debtor in the place of the
original one may be made even without the knowledge or against the will of
the original debtor BUT not without the consent of the creditor.
Payment by new debtor gives him rights mentioned in
1236 – he can recover only insofar as payment has been beneficial to original
debtor
1237 – he cannot compel the creditor to subrogate him in his rights such as
those arising from mortgage, guaranty or penalty.
1294. ORIGINAL DEBTOR NOT LIABLE
If the substitution is without the knowledge or against the will of the debtor,
new debtor’s insolvency or non-fulfillment of obligation shall not give rise to
any liability on original debtor’s part.
1295. INSOLVENCY EXISTED OR KNOWN
Insolvency of new debtor who has been proposed by the original debtor and
accepted by creditor, shall not revive the action of creditor against the original
debtor EXCEPT when insolvency was already existing and of public
knowledge or known to the debtor when he delegated his debt.
1296. ACCESSORY OBLIGATIONS SUBSISTS
When principal obligation is extinguished due to novation, accessory
obligations may subsist only insofar as they may benefit 3rd persons who
didn’t give their consent.
1297. ORIGINAL OBLIGATION SUBSISTS
If new obligation is void, original one shall subsist UNLESS parties intended
the former relation should be extinguished in any event.
1298. NOVATION = VOID if ORIGINAL = VOID
Novation is void if original obligation was void, EXCEPT when annulment may
be claimed only by the debtor or when ratification validates acts which are
voidable.
1299. UNDER THE SAME CONDITION
If original obligation was subject to a suspensive or resolutory condition, new
obligation shall be under the same condition, unless otherwise stipulated.
1300LEGAL,CONVENTIONAL,SUBROGATION
Subrogation of a 3rd person in the rights of creditor is either legal or
conventional. The former (legal) is not presumed except when expressly
mentioned in this Code and latter (conventional) must be clearly established
in order that it may take effect
1301. CONSENT of ORIGINAL & 3rd PERSON
Conventional subrogation of a 3rd person requires consent of the original
parties and of 3rd person.
1302. LEGAL SUBROGATION
Presumed that there is legal subrogation:
1. Creditor pays another creditor who is preferred even without the
knowledge of the debtor.
2. 3rd person, not interested in the obligation, pays with express or tacit
approval of debtor
3. Person interested in the fulfillment of the obligation pays even without the
knowledge of the debtor and without prejudice to the effects of confusion as
to debtor’s share.
1303. CREDIT TRANSFERRED
Subrogation transfers to the person subrogated the credit with all the rights
appertaining thereto, either against the debtor or against 3rd persons, be they
guarantors or possessors of mortgages, subject to stipulation in a
conventional obligation.
1304. Creditor PARTIALLY PAID PREFERRED
A creditor to whom partial payment was made may exercise his right for the If contract contains stipulation in favor of a 3rd person, he may demand its
remainder and shall be preferred to the person subrogated in his place in fulfillment provided he communicated his acceptance to obligor before its
virtue of partial payment of the same credit. revocation. Mere incidental benefit or interest of a person is not sufficient.

CONTRACTS Contracting parties must have clearly and deliberately conferred a favor upon
1305. MEETING OF MINDS 3rd person.
Contract is a meeting of minds between 2 persons whereby one binds himself
with respect to the other, to give something or to render some service. 1312. CONTRACTCS WITH REAL RIGHTS
In contracts creating real rights, 3rd persons who come into possession of the
1306. NOT CONTRARY TO L, M, GC, PO, PP object of the contract are bound thereby, subject to Mortgage Law and Land
Contracting parties may establish such stipulations, clauses, terms, and Registration laws.
conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order or public policy. 1313. CREDITORS PROTECTED
Creditors are protected in cases of contracts intended to defraud them.
1307. INNOMINATE CONTRACTS
Shall be regulated by: 1314. LIABLE FOR DAMAGES
- Stipulations of the parties Any 3rd person who induces another to violate his contract shall be liable for
- Obligations and Contracts damages to the other contracting party.
- Rules governing the most analogous nominate contracts
- Customs of the place. 1315. PERFECTED BY MERE CONSENT
Contracts are perfected by mere consent and from that moment parties are
1308. MUTUALITY OF CONTRACT bound not only to the fulfillment of what has been expressly stipulated but
Contracts must bind both contracting parties; its validity or compliance also to all consequences which according to their nature may be in keeping
cannot be left to the will of one of them. with good faith, usage and law.

1309. 3rd PERSON’S DECISION 1316. REAL CONTRACTS

Determination of the performance may be left to a 3rd person, whose decision Such as:
shall not be binding until made known to both contracting parties. -deposit
-pledge
1310. DECIDE WHAT IS EQUITABLE -commodatum
Determination shall not be obligatory if it is evidently inequitable. In such are not perfected until the delivery of the object of the obligation.
case, court shall decide what is equitable under the circumstances.
1317. MUST BE AUTHORIZED
1311. ONLY B/N PARTIES, ASSIGNS & HEIRS No one may contract in the name of another without being authorized by the
Contracts take effect only between parties, assigns and heirs except in case latter or unless he has by law a right to represent him.
where the rights and obligations arising from the contract are not
transmissible by their nature, stipulation or law. The heir is not liable beyond UNENFORCEABLE UNLESS RATIFIED
the property he received from the decedent. A contract entered into the name of another by one who has no authority or
legal representation or has acted beyond his powers shall be unenforceable
FAVOR UPON 3RD PERSON
unless ratified, expressly or impliedly by the person on whose behalf it has
been executed and before it is revoked by the other contracting party.
1318. ESSENTIAL REQUISITES
1. CONSENT of the contracting parties
2. OBJECT certain which is the subject matter of contract
3. CAUSE of obligation which is established.
1319. MEETING of OFFER & ACCEPTANCE
Consent is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract.
OFFER must be certain and ACCEPTANCE absolute. A qualified acceptance
constitutes a counter-offer. (original offerer must accept)
Acceptance made by letter or telegram doesn’t bind the offerer except from
time it came to his knowledge. Contract is presumed to have been entered into
in the place where the offer was made.
1320. Acceptance may be express or implied.
1321. TIME, PLACE, MANNER
Person making the offer may fix the time, place and manner of acceptance, all
of which must be complied with.
1322. OFFER THRU AN AGENT
Offer made through and agent is accepted from the time acceptance is
communicated to him.
1323.DEATH,CIVIL I., INSANITY,INSOLVENCY
Offer becomes ineffective upon death, civil interdiction, insanity or insolvency
of either party before acceptance is conveyed.
1324. WITHDRAWAL BEFORE ACCEPTANCE
When offerer has allowed offeree a certain period to accept, offer may be
withdrawn anytime before acceptance by communicating such withdrawal,
EXCEPT when option is founded upon a consideration as something paid or
promises.
1325. BUSINESS ADVERTISEMENTS
Business advertisements of things for sale are not definite offers but mere
invitations to make an offer unless it appears otherwise.
1326. ADVERTISER NOT BOUND TO ACCEPT
Advertisements for bidders are simply invitations to make proposals and
advertiser is not bound to accept highest or lowest bidder unless contrary
appears.
1327. CANNOT GIVE CONSENT:
1. Unemancipated minors
2. Insane or demented persons and deaf-mutes who don’t know how to write
1328. LUCID INTERVAL
Contracts entered during lucid interval are valid. Contracts agreed to in a state
of drunkenness or during hypnotic spell are voidable.
1329. Incapacity in 1327 is without prejudice to special disqualifications in
laws.
1330. VOIDABLE CONTRACT
Contract where consent is given thru mistake, violence, intimidation, undue
influence or fraud is voidable.
1331. MISTAKE
For mistake to invalidate consent, must refer to substance of the thing which
is the object of the contract or to conditions which have principally moved one
or both parties to enter into the contract.
IDENTITY/ QUALIFICATIONS
Mistake as to identity or qualifications of one of the parties will vitiate consent
ONLY when such I or Q have been the principal cause of the contract.
Simple mistake of account shall give rise to its correction.
1332. MUST FULLY EXPLAIN THE TERMS
When one of the parties is unable to read or if contract is in a language not
understood by him and mistake or fraud is alleged, person enforcing the
contract must show that terms have been fully explained to the person unable
to read or understand the language. Through words or machinations of one of the contracting parties, the other is
induced to enter into a contract which, without them, he would not have
1333. DOUBT, CONTINGENCY, RISK KNOWN agreed to.
No mistake if party alleging it knew the doubt, contingency or risk affecting
the object of the contract. 1339. DUTY TO REVEAL FACTS
Failure to disclose facts when there is a duty to reveal them as when parties
1334. MUTUAL ERROR are bound by confidential relations, constitutes fraud.
Mutual error as to legal effect of an agreement when real purpose of parties is
frustrated may vitiate consent. 1340. OPPORTUNITY TO KNOW FACTS
Usual exaggerations in trade when the other party had the opportunity to
1335. VIOLENCE know the facts are not in themselves fraudulent.
When in order to wrest consent, serious or irresistible force is employed.
1341. MERE OPINION = NO FRAUD
INTIMIDATION Mere expression of an opinion doesn’t signify fraud unless made by an expert
When one of the contracting parties is compelled by a reasonable and well- and the other party has relied on the expert’s special knowledge.
grounded fear of an imminent and grave evil upon his person or property, or 1342. SUBSTANTIAL MISTAKE
upon person or property of his spouse, descendants/ ascendants, to give his Misrepresentation by 3rd person doesn’t vitiate consent unless such
consent. misrepresentation created substantial mistake and the same is mutual.

DEGREE OF INTIMIDATION 1343. ERROR ONLY

Age, sex, condition of the person shall be borne in mind.
A threat to enforce one’s claim through competent authority if claim is just or
legal, doesn’t vitiate consent.
1336. ANNUL THE OBLIGATION
Violence or intimidation shall annul the obligation although it may have been
employed by a 3rd person who didn’t take part in the contract.
Misrepresentation made in good faith is not fraudulent but may constitute
error.
1344. SERIOUS FRAUD = VOIDABLE
For fraud to make a contract voidable, should be serious and not have been
employed by both contracting parties.
INCIDENTAL FRAUD = obliges person employing it to pay damages.

1337. UNDUE INFLUENCE 1345. ABSOLUTE or RELATIVE SIMULATION

When person takes improper advantage of his power over the will of another, Simulation of contract may be absolute or relative.
depriving the latter of a reasonable freedom of choice. - ABSOLUTE = parties do not intend to be bound at all.

Circumstances to consider: confidential, family, spiritual and other relation
between parties or the fact that person alleged to have been unduly
influenced was suffering from mental weakness, ignorant or in financial
distress.
1338. FRAUD
- RELATIVE = parties conceal their true agreement.
1346. ABSOLUTELY SIMULATED/ fictitious contract is void.
Relative simulation, when it doesn’t prejudice a 3rd person and not intended
for any purpose contrary to law, morals, good customs, public order or public
policy binds the parties to their real agreement.

1347. MAY BE THE OBJECT OF CONTRACT
 All things which are not outside the commerce of men, including
future things.
 All rights which are not intransmissible.
 All services which are not contrary to law, morals, good customs,
public order or public policy.
No contract may be entered into upon future inheritance except in cases
expressly authorized by law.
1348. IMPOSSIBLE things or services cannot be the object of contracts.
1349. OBJECT MUST BE DETERMINATE
Object of every contract must be determinate as to its kind. The fact that the
quantity is not determinate shall not be an obstacle to the existence of the
contract provided it is possible to determine the same, without the need of a
new contract between the parties.
1350. CAUSE OF CONTRACT
Onerous contracts – prestation or promise of a thing or service by the other
Remuneratory ones – service or benefit which is remunerated
Contracts of pure beneficence – mere liberality of the benefactor
1351. MOTIVE DIFFERENT FROM CAUSE
Particular motives of the parties in entering into a contract are different from
the cause
1352. WITHOUT CAUSE/ UNLAWFUL CAUSE
Contracts without a cause or with unlawful cause produce NO EFFECT
whatever. Cause is unlawful if contrary to law, morals, good customs, public
order or public policy.
1353. FALSE CAUSE = VOID CONTRACT
Statement of false cause in contracts shall render them void if it should not be
proved that they were founded upon another cause which is true and lawful.
1354. PRESUMED TO EXIST & LAWFUL
Although the cause is not stated in the contract, it is presumed that is exists
and is lawful unless the debtor proves the contrary.
1355. LESION/INADEQUACY = STILL VALID
Lesion or inadequacy of cause doesn’t invalidate a contract UNLESS there has
been fraud, mistake or undue influence.
1356. WHATEVER FORM ALLOWED
Contracts shall be obligatory in whatever form they may have been entered
into provided all the essential requisites for their validity are present.
WHEN CERTAIN FORM IS REQUIRED
However, when a law requires a contract to be in some form for it to be valid
and enforceable, requirement is absolute and indispensable.
1357. COMPEL TO OBSERVE FORM
If law requires a document or other special form, contracting parties may
compel each other to observe that form once the contract has been perfected.
This right may be exercised simultaneously with the action upon the contract.
1358. MUST APPEAR IN PUBLIC DOCUMENT
1. Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property; sales
of real property or of an interest therein are governed by Statute of Frauds
(1403, par 2 and 1405)
2. Cession, repudiation or renunciation of hereditary rights or those of the
conjugal partnership of gains.
3. Power to administer property or any other power which has for its object
an act appearing or which should appear in a public document or should
prejudice a 3rd person.
4. Cession of actions or rights proceeding from an act appearing in a public
document.
All other contracts where the amount involved exceeds P500.00 must appear
in writing, even a private one. But sales of goods, chattels or things in action
are governed by Statute of Frauds.
REFORMATION OF INSTRUMENTS
1359. TRUE INTENTION NOT EXPRESSED
 Meeting of minds of parties in a contract
 True intention is not expressed in the instrument to embody the
agreement,
 By reason of mistake, fraud, inequitable conduct or accident
 One of the parties may ask for the reformation of the instrument so
that the true intention may be expressed.
NO MEETING OF MINDS
If mistake, fraud, inequitable conduct or accident prevented the meeting of the
minds of the parties, proper remedy is not reformation of instrument but
annulment of contract.
1360. Principles of general law on reformation of instruments adopted.
1361. DIDN’T DISCLOSE REAL AGREEMENT
When mutual mistake of the parties causes the failure of the instrument to
disclose real agreement, instrument may be reformed.
1362. OTHER ACTED FRAUDULENTLY
If the other party was mistaken and the other acted fraudulently or
inequitably in such a way that the instrument does not show their true
intention, the former (who was mistaken) may ask for the reformation of the
instrument.
1363. OTHER KNEW THE MISTAKE
When one party is mistaken and other knew or believed that the instrument
did not state their real agreement, but concealed the fact from the former,
instrument may be reformed.
1364. FAULT ON THE PERSON DRAFTING
When through the ignorance, lack of skill, negligence or bad faith on the part
of the person drafting the instrument or of the clerk or typist, instrument
doesn’t express true intention of the parties, courts may order the instrument
to be reformed.
1365. MORTGAGE ONLY BUT STATED AS SALE
If 2 parties agree upon the mortgage or pledge of real or personal property
but the instrument states that the property is sold absolutely or with a right to
repurchase, reformation of instrument is proper.
1366. NO REFORMATION
1. Simple donations inter vivos where no condition is imposed.
2. Wills
3. Real agreement is void
1367. ACTION TO ENFORCE INSTRUMENT
When one of the parties brought an action to enforce the instrument, he
cannot subsequently ask for its reformation.
1368. EITHER PARTY or INJURED PARTY
Reformation may be ordered at the instance of either party or his successors
in interest if the mistake was mutual; otherwise upon petition of injured party
or his heirs and assigns.
1369. PROCEDURE be governed by RoC to be promulgated by SC.
INTERPRETATION OF THE CONTRACTS
1370. LITERAL MEANING SHALL CONTROL
If the terms of a contract are clear and leave no doubt upon intention of the
contracting parties, literal meaning of its stipulation shall control.
INTENTION PREVAILS OVER WORDS
If the words appear to be contrary to the evident intention of the parties,
intention shall prevail over the words.
1371. ACTS CONSIDERED
To judge the intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered.
1372. THINGS DISTINCT FROM INTENTION
However general the terms of a contract may be, they shall not be understood
to comprehend things that are distinct and cases that are different from those
upon which the parties intended to agree.
1373. SEVERAL MEANINGS
If some stipulation of any contract has several meanings, it shall be
understood as to which it is most adequate to render it effectual.
1374. INTERPRETED TOGETHER
Various stipulations of a contract shall be interpreted together, attributing to
the doubtful ones as which may result from all of them taken jointly.
1375. MOST KEEPING w/ NATURE & OBJECT
Words which may have different significations shall be understood in that
which is most in keeping with the nature and object of the contract.
1376. AMBIGUITIES OF A CONTRACT
Usage or custom of the place shall be borne in mind in interpreting
ambiguities of a contract and shall fill the omission of stipulations which are
ordinarily established.
1377. OBSCURE WORDS
Interpretation of obscure words/ stipulations in a contract shall not favor the
party who caused the obscurity.
1378. LEAST TRANSMISSION OF RIGHTS
When it is absolutely impossible to settle doubts and doubts refer to
incidental circumstances of a gratuitous contract, least transmission of rights
and interests shall prevail. If onerous contract, doubt shall be settled in favor
of the greatest reciprocity of interests.
INTENTION CANNOT BE KNOWN
If doubts are upon the principal object of contract where it cannot be known
what the intention or will of the parties are, contract shall be null and void.
1379. Principles of interpretation in Rule 123 of RoC shall be observed in
construction of contracts.
1380. RESCISSIBLE CONTRACTS
Contracts validly agreed upon may be rescinded in cases established by law.
1381. EX OF RESCISSIBLE CONTRACTS
1. Those which are entered by guardians whenever the wards whom they
represent suffer lesion by more than ¼ of the value of the object of the
contract.
2. Those agreed upon in representation of absentees, if the absentee suffer
lesion by more than ¼ of the value of the object.
3. Those undertaken in fraud of creditors when the creditors cannot collect in
any other manner the claims due them.
4. Things under litigation if they have been entered into by the defendant
without the knowledge or approval of the litigants or of competent judicial
authority.
5. All other contracts specially declared by law to be subject to rescission.
1382. INSOLVENT PAYS DEBT NOT YET DUE
Payments made in a state of insolvency for obligations to whose fulfillment
the debtor could not be compelled at the time they were effected are
rescissible.
1383. RESCISSION IS SUBSIDIARY
Action for rescission is subsidiary and cannot be instituted except when the
party suffering damage has no other legal means to obtain reparation for the
same.
1384. ONLY TO EXTENT NECESSARY
Rescission shall be only to the extent necessary to cover the damages caused.
1385.RETURN FRUITS & PRICE w INTERESTS
Rescission creates the obligation to return things which were the object of the
contract, together with their fruits and price with interests; consequently, can
be carried out only when he who demands rescission can return whatever he
may be obliged to restore.
No rescission allowed when the object of the contract is legally in the
possession of 3rd person who didn’t act in bad faith. Indemnity for damages
may be demanded from the person causing the loss.
1386. No rescission allowed in # 1 (lesion of wards) and 2 (lesion of
absentees) with respect to contracts approved by the courts.
1387. PRESUMED FRAUDULENT
All contracts where debtor alienates property by gratuitous title are
presumed to be in fraud of creditors when the donor didn’t reserve sufficient
property to pay all debts contracted before donation.
Alienations by onerous title are also presumed fraudulent when made by
persons against whom judgment has been rendered or some writ of
attachment has been issued. Decision or attachment need not refer to the
property alienated and need not have been obtained by the party seeking the
rescission.
Defrauding creditors may be proved in any other manner recognized by law
of evidence.
1388. INDEMNITY FOR DAMAGES
Whoever acquires in bad faith the things alienated in fraud of creditors shall
indemnify the creditors for damages suffered by them due to of alienation if it
should be impossible for him to return them.
1st ACQUIRER = LIABLE 1ST
If there are 2 or more alienations, 1st acquirer shall be liable 1st and so on
successively.
1389. PRESCRIPTION: 4 YEARS
Action to claim rescission must be commenced within 4 yrs.
For persons under guardianship and for absentees: 4 years shall not begin
until termination of former’s incapacity or until the domicile of the absentee is
known.
VOIDABLE/ ANNULABLE CONTRACTS
1390. VOIDABLE EVEN IF NO DAMAGE
1. One of the parties is incapable of giving consent.
2. Consent is vitiated by mistake, violence, intimidation, undue influence or
fraud (MVIUF). These contracts are binding unless annulled by proper action
in court. Susceptible of ratification.
1391. PRESCRIPTION: 4 YEARS
Action for annulment shall be brought within 4 years.
DEFECT OF CONSENT CEASES
This period shall begin in cases of intimidation, violence or undue influence
from the time the defect of the consent ceases.
TIME OF DISCOVERY
In case of mistake for fraud, from time of discovery of the same.
TIME GUARDIANSHIP CEASES
For contracts entered into minors or other incapacitated persons, from time
the guardianship ceases.
1392. RATIFICATION extinguished action to annul a voidable contract.
1393. RATIFICATION: EXPRESS or TACIT
Ratification may be effected expressly or tacitly. There’s tacit ratification if the
person who has a right to invoke it should execute an act which necessarily
implies intention to waive his right even if he knew that the cause that
renders contract voidable has ceased.
1394. EFFECTED BY GUARDIAN
Ratification may be effected by the guardian of the incapacitated person.
1395. NO NEED TO CONFORM
Ratification doesn’t require the conformity of the contracting party who has
no right to bring action for annulment.
1396. CLEANSES ALL DEFECTS
Ratification cleanses contract from all its defects from the moment it was
constituted.
1397. OBLIGED PRINCIPALL|SUBSIDIARILY
Action for annulment of contract may be instituted by all who are obliged
principally or subsidiarily.
UNCLEAN HANDS CAN’T COME TO COURT
Persons who are capable cannot allege incapacity of those with whom they
contracted nor can those who exerted intimidation, violence, undue influence
or employed fraud or caused mistake base their action upon these flaws of the
contract.
1398. RESTORE OBJECT, FRUITS & PRICE w I
An obligation having been annulled, contracting parties shall restore to each
other things which have been the subject matter of contract with their fruits
and price with its interests, except in cases provided by law.
In obligations to render service, its value shall be the basis for damages.
1399. INCAPACITATED not obliged to RETURN
When defect of the contract is the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as
he has been benefited by the thing or price received by him.
1400. CAN’T RETURN DUE TO ONE’S OWN FAULT
When the person obliged by decree of annulment to return the thing cannot
do so because it has been lost thru his fault, he shall return the fruits received
and value of the thing at the time of the loss with interest from same date.
1401. OBJECT LOST THRU FRAUD/FAULT
Action for annulment shall be extinguished when the object of contract is lost
thru fraud or fault of the person who has a right to institute annulment.
If right of action is based on incapacity of any one of the contracting parties,
loss of the thing shall not be an obstacle to the success of action unless loss
took place thru fraud or fault of plaintiff.
1402. RECIPROCITY IN RETURNING
As long as one of the parties doesn’t restore what he is bound to return, the
other cannot be compelled to comply with what is incumbent upon him.
UNENFORCEABLE CONTRACTS
1403. Unenforceable contracts unless ratified:
1. Those entered into in the name of another person by one who has NO
AUTHORITY or legal representation or who has acted beyond his powers.
2. Those that don’t comply with STATUE of FRAUDS. In the ff. cases an
agreement made shall be unenforceable unless the agreement or some note or
memorandum shall be in writing and subscribed by party charged or by his
agent.
Evidence of agreement cannot be received without writing or a secondary
evidence of its contents:
a. Agreement that by its term is not to be performed within a year
from making
b. Special promise to answer for debt, default or miscarriage of
another
c. Agreement made in consideration of marriage, other than a mutual
promise to marry
d. Agreement for sale of goods, chattels or things in action at a price of
not less than 500.00 UNLESS buyer accept or receive part of such goods or
chattels or evidence or pay at the time some part of the purchase money.
SUFFICIENT MEMORANDUM
Sale is made by auction and entry of amount and kind of property sold,
terms of sale, price, names of purchasers and buyers is made by auctioneer in
his sales book at time of sale.
e. Agreement for leasing for a longer period than 1 yr. or sale of real
property or of an interest therein
f. Representation as to credit of a 3rd person
3. Both parties are incapable of giving consent to contract.
1404. UNAUTHORIZED CONTRACTS governed by 1317 and principles of
agency (Title X).
1405. DEEMED RATIFIED
Contracts infringing Statute of Frauds (# 2 of 1403) are ratified by failure to
object to presentation of oral evidence to prove the same or by acceptance of
benefits.
1406. COMPEL each other to OBSERVE FORM
When contract is unenforceable under the Statute of Frauds and public
document is necessary for the registration in the Registry of Deeds, parties
may compel each other to observe that form (1357).
1407. BOTH ARE INCAPACITATED
Where both parties are unable to give consent, express of implied ratification
by parent, or guardian of one of the contracting parties shall give the contract
the effect as if only one of them were incapacitated (becomes voidable).
If ratification is made by parents or guardians of both parties, contract shall
be validated from inception.
1408. Unenforceable contracts CANNOT BE ASSAILED BY 3RD PERSONS.
VOID/ INEXISTENT CONTRACTS
1409. Contracts that are inexistent and void from the beginning:
1. Cause, object or purpose is contrary to law, morals, good customs, public
order or public policy
2. Absolutely simulated or fictitious
3. Cause or object didn’t exist at the time of transaction (future things)
4. Object is outside the commerce of men.
5. Impossible service.
6.Intention of the parties relative to the principal object of contract cannot be
ascertained.
7. Expressly prohibited or declared void by law.
These contracts cannot be ratified. Defense of illegality cannot be waived.
1410. NO PRESCRIPTION
Action or defense for declaration of inexistence of contract doesn’t prescribe.
1411. ACT IS CRIMINAL OFFENSE
When nullity is due to illegality of cause or object of contract and the act
constitutes a criminal offense, both parties being in pari delicto, they shall
have NO ACTION AGAINST EACH OTHER and both shall be prosecuted.
Penal Code relative to disposal of effects of instruments of crime shall be
applicable to the things or price of contract.
ONLY ONE PARTY IS GUILTY
Applicable when only one of the parties is guilty but the innocent one may
claim what he has given and not be bound to comply with his promise.
1412. UNLAWFUL ACT BUT NOT CRIMINAL
If the unlawful or forbidden cause of the act doesn’t constitute a criminal
offense, ff. rules apply:
1. Fault on both contracting parties: neither may recover what he has given or
demand performance of other’s undertaking.
2. Only one contracting party is at fault: he cannot recover what he has given
or ask for fulfillment of what has been promised him.
The other who is not at fault may demand the return of what he has given
without any obligation to comply with his promise.
1413. EXCESS INTEREST MAY BE RECOVERED
Interest paid in excess of the interest allowed by usury laws may be recovered
by debtor, with interest thereon from date of payment.
1414. REPUDIATE DUE TO ILLEGAL PURPOSE
When money is paid or property delivered for an illegal purpose, contract
may be repudiated by one of the parties before purpose is accomplished or
before damage is caused to 3rd person.
Courts may, if public interest will be served, allow the party repudiating the
contract to recover the money or property.
1415. ILLEGAL CONTRACT
When one of the parties to an illegal contract is incapable of giving consent,
courts may allow recovery of money or property delivered by incapacitated
person if interest of justice so demands.

1416. NOT ILLEGAL PER SE
When agreement is not illegal per se but merely prohibited and prohibition by
law is to protect the plaintiff, he may recover what he has paid or delivered if
public policy is enhanced.
1417. RECOVER AMOUNT IN EXCESS
When price of any article or commodity is determined by statute or by
authority of law, any person paying any amount in excess of the maximum
price allowed may recover such excess.
NATURAL OBLIGATIONS: do not grant a right of action to enforce their
performance for not being based on positive law but on equity and natural
law.
But after voluntary fulfillment by obligor, they authorize the retention of what
has been delivered or rendered.
1424. VOLUNTARILY PERFORMS
When right to sue upon a civil obligation has lapsed by extinctive prescription,
obligor who voluntarily performs contract cannot recover what he has
delivered or the value of the service he has rendered.

1418. HOURS OF LABOR 1425. VOLUNTARILY REIMBURSES

When the law fixes or authorizes fixing of max # of hours of labor, and When without the knowledge or against the will of debtor, 3rd person pays
contract is entered where a laborer works longer than the maximum fixed, he debt which the debtor is not legally bound to pay because action has
may demand additional compensation for service rendered beyond the time prescribed BUT debtor voluntarily reimburses 3rd person, debtor cannot
limit. recover what he has paid.

1419. WAGE OF LABORER 1426. VOLUNTARILY RETURNS THING/PRICE

When law sets or authorizes the setting of minimum wage for laborers and
contract is agreed upon where laborer accepts a lower wage, he shall be
entitled to recover the deficiency.
1420. DIVISIBLE CONTRACT
For divisible contract, if the illegal terms can be separated from the legal ones,
legal ones may be enforced
1421. DEFENSE OF ILLEGALITY of CONTRACTS
Not available to 3rd persons whose interests are not directly affected.
When a minor between 18-21 who has entered into a contract without
consent of parent or guardian voluntarily returns the whole thing or price
received after annulment of contract, even if he has not been benefited, there
is no right to demand the thing or price returned.
1427. VOLUNTARILY PAYS A SUM OF MONEY
A minor (18-21) who entered into a contract without the consent of parent or
guardian, voluntarily pays a sum of money or delivers a fungible thing to fulfill
obligation, no right to recover the same from obligee who has spent or
consumed it in good faith.

1422. PREVIOUS ILLEGAL CONTRACT 1428. VONLUNTARILY PERFORMS OBLIG

Contract which is the direct result of the previous illegal contract is also void After an action to enforce civil obligation has failed, defendant voluntarily
and inexistent. performs the obligation – he cannot demand the return of what he has
delivered or payment of value of service he has rendered.
NATURAL OBLIGATIONS
1429. HEIR VOLUNTARILY PAYS DEBT
1423. CIVIL & NATURAL OBLIGATIONS When a testate or intestate heir voluntarily pays debt of the decedent
Obligations are civil and natural. exceeding the value of the property which he received by will or by law of
CIVIL OBLIGATIONS: give a right of action to compel their performance. intestacy from estate of deceased, payment is valid and cannot be rescinded
by payer.
1430. HEIR PAYS LEGACY
When a will is void because it wasn’t executed in accordance with formalities
required by law BUT one of the intestate heirs, after settlement of debts of
deceased, pays a legacy to comply with a clause in the defective will, payment
is effective and irrevocable.
ESTOPPEL
1431. RENDERED CONCLUSIVE
Through estoppel an admission or representation is rendered conclusive
upon the person making it and cannot be denied or disproved as against
person relying thereon.
1432. PRINCIPLES OF ESTOPPEL adopted insofar as they aren’t in conflict
with this Code, Code of Commerce, RoC and special laws.
1433. Estoppel may be IN PAIS or BY DEED.
1434. TITLE PASSES TO BUYER/GRANTEE
When a person who is not the owner of a thing sells or alienates and delivers
it and later the seller or grantor acquires title thereto, such title passes by
operation of law to the buyer or grantee.
1435. BARRED FROM SETTING UP OWN TITLE
If a person representing another sells or alienates a thing, the representative
cannot subsequently set up his own title as against the buyer or grantee.
1436. CLAIMING TITLE TO THING LEASED
A lessee or bailee is estopped from asserting title to thing leased or received
as against the lessor or bailor.
1437. MISLED AS TO OWNERSHIP
When in a contract between 3rd persons concerning immovable property, one
of them is misled by a person regarding ownership or real rights over real
estate, one who misleads is precluded from asserting his legal title or interest,
provided ALL these requisites are present:
1. Fraudulent representation or wrongful concealment of facts known to the
party estopped.
2. Party precluded must intend that the other should act upon facts as
misrepresented.
3. Party misled must have been unaware of the true facts
4. Party defrauded must have acted in accordance with the misrepresentation.
1438.ESTOPPED - ACCEPTANCE of BENEFITS
One who has allowed another to assume apparent ownership of personal
property to make any transfer of it, cannot set up his own title to defeat the
pledge of the property made by the other to a pledgee who received the same
in good faith and for value IF he received the sum for which a pledge has been
constituted.
1439. ONLY B/N PARTIES OR SUCCESSORS
Estoppel is effective only as between parties or their successors in interest.
TRUSTS
1440. TRUSTOR, TRUSTEE, BENEFICIARY
Trustor: a person who establishes a trust
Trustee: one in whom confidence is reposed as regards property for the
benefit of another person
Beneficiary: the person for whose benefit the trust has been created
1441. EXPRESS or IMPLIED TRUSTS
Trusts are either express of implied.
EXPRESS trusts are created by intention of the trustor or parties.
IMPLIED trusts come into being by operation of law.
1442. PRINCIPLES OF GENERAL LAW OF TRUSTS as not in conflict with this
Code, Code of Commerce, RoC and special laws are adopted.
EXPRESS TRUSTS
1443. CAN’T BE PROVED BY PAROL EVIDENCE
No express trusts concerning immovable property or any interest may be
proved by parol evidence.
1444. CLEAR INTENTION SUFFICIENT
No particular words are required for creation of an express trust, it is
sufficient that a trust is clearly intended.
1445. TRUSTEE DECLINES DESIGNATION
No trust shall fail because trustee declines designation unless contrary should
appear in the instrument constituting the trust.
1446. BENEFICIARY MUST ACCEPT TRUST
Acceptance by the beneficiary is necessary. Acceptance shall be presumed if
trust imposes no onerous condition upon the beneficiary and no proof to the
contrary.
IMPLIED TRUSTS
1447. Enumeration doesn’t exclude others established by general law of trust
subject to 1442 (Code of Commerce, RoC, special laws)
1448. GRANTED TO ONE, PAID BY ANOTHER
There’s implied trust when property is sold and legal estate is granted to one
party (trustee) but price is paid by another (beneficiary) to have the beneficial
interest of the property.
NO IMPLIED TRUST
However, if person to whom title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the sale, no trust is implied by law,
it being disputably presumed that there is a gift in favor of the child.
1449. DONEE HAS NO BENEFICIAL INTEREST
There is implied trust when donation is made to a person but it appears that
although the legal estate is transmitted to the done, he has no beneficial
interest or only a part thereof.
1450.TO SECURE PAYMENT OF DEBT
If price of sale of property is loaned or paid by one person (trustor) for the
benefit of another and conveyance is made to the lender or payor to secure
payment of debt, trust arises by operation of law in favor of the person to
whom money is loaned or for whom it is paid (beneficiary). Beneficiary may
redeem the property and compel conveyance to him.
1451. BENEFIT OF TRUE OWNER
When land passes by succession to any person and he causes legal title to be
put in the name of another, trust is established by implication of law for the
benefit of true owner.
1452. LEGAL TITLE FOR BENEFIT OF ALL
If 2 or more persons agree to purchase property and by common consent the
legal title is taken in the name of one of them for the benefit of all, trust is
created by force of law in favor of the others in proportion to interest of each.
1453. DECLARED INTENTION TO HOLD IT FOR
When property is conveyed to a person in reliance upon his declared
intention to hold it for or transfer it to another or the grantor, there’s implied
trust in favor of the person whose benefit is contemplated.
1454. CONVEYANCE to SECURE PEFORMANCE
If an absolute conveyance of property is made to secure performance of
obligation of grantor toward grantee, trust is established by virtue of law.
If fulfillment of obligation is offered by grantor when it becomes due, grantor
may demand reconveyance of property to him.
1455. TRUST in favor of whom FUNDS BELONG
When any trustee, guardian or other person holding fiduciary relationship
uses trust funds for purchase of property and causes conveyance to be made
to him or to 3rd person, trust is established by operation of law in favor of
person to whom the funds belong.
1456. MISTAKE OR FRAUD
If property is acquired thru mistake or fraud, person obtaining it is by force of
law a trustee of an implied trust for the benefit of the person from whom
property comes.
1457. ORAL EVIDENCE ALLOWED
Implied trust may be proved by oral evidence.