Title V. - PRESCRIPTION Art. 1111.
#rescription obtained by a co-proprietor or
CHAPTER 1
GENERAL PROVISIONS
Art. 1106. By prescription, one acquires  OWNERSHIP
and other REAL RIGHTS through the LAPSE OF TIME  in the
manner and under the conditions laid down by law.
In the same way, rights and conditions are lost by
prescription. (1930a)
Art. 1107. PERSONS WHO ARE CAPABLE OF ACQUIRING
PROPERTY OR RIGHTS BY THE OTHER LEGAL MODES  may
acquire the same by means o prescription.
!inors and other incapacitated persons may acquire
property or rights by prescription, either personally or
through their parents, guardians or legal
representati"es.
representati"es. (1931a)
Art. 1108. #rescription, both acquisiti"e and
e$tincti"e, runs against%
(1) MINORS  and other incapacitated persons
who ha"e parents, guardians or other legal
representati"es&
(') ABSENTEES  who ha"e administrators, either
appointed by them beore their
disappearance, or appointed by the courts&
(3) PERSONS LIVING ABROAD, who ha"e managers
or administrators&
() JURIDICAL PERSONS, e$cept the tate and its
subdi"isions.
#ersons who are disquali*ed rom
administering their property ha"e a right to
claim damages rom their legal
representati"es
representati"es whose negligence has been
the cause o prescription. (193'a)
Art. 1109. #rescription DOES NOT RUN between HUSBAND
AND WIFE, e"en though there be a separation o
property agreed upon in the marriage settlements or
by +udicial decree.
either does prescription run between PARENTS AND
CHILDREN , during the minority or insanity o the latter,
and between GUARDIAN  AND WARD  during the
GUARDIAN AND
continuance o the guardianship. (n)
Art. 1110. #rescription, acquisiti"e and e$tincti"e,
runs in a"or o, or against a married woman. (n)
a co-owner shall bene*t the others. (1933)
RENUNCIATION OF PRESCRIPTION
Art. 1112. #ersons with capacity to alienate property
may renounce prescription already obtained, but not
the right to prescribe in the uture.
#rescription is deemed to ha"e been  TACITLY RENOUNCED
when the renunciation results rom acts which i!"# th$
a%a&'(&$&t o the right acquired. (193)
Art. 1113. /ll things which are within the commerce
o men are susceptible o prescription, unless
otherwise pro"ided. #roperty o the tate or any o its
subdi"isions not patrimonial in character shall not be
the ob+ect o prescription. (193a)
Art. 1114. reditors and all other persons interested
in ma2ing the prescription eecti"e may a"ail
themsel"es thereo notwithstanding the e$press or
tacit renunciation by the debtor or proprietor. (1934)
Art. 111. 5he pro"isions o the present 5itle are
understood to be without pre+udice to what in this
ode or in special laws is established with respect to
speci*c cases o prescription.
(1936)
Art. 1116. #rescription already running beore the
eecti"ity o this ode shall be go"erned by laws
pre"iously in orce& but i since the time this ode
too2 eect the entire period herein required or
prescription should elapse, the present ode shall be
applicable, e"en though by the ormer laws a longer
period might be required. (1939)
CHAPTER 2
PRESCRIPTION O! O"NERSHIP AN# OTHER
REAL RIGHTS
Art. 1117. /cquisiti"e prescription o dominion and
other real rights may be ordinary or e$traordinary.
7rdinary acquisiti"e prescription requires possession
o things in good aith and with +ust title or the time
*$ed by law. (190a)
Art. 1118. #ossession has to be in the concept o an
owner, public, peaceul and uninterrupted. (191)
Art. 1119. /cts o possessory character e$ecuted in
"irtue o license or by mere tolerance o the owner
shall not be a"ailable or the purposes o possession.
(19')
Art. 1120. #ossession is interrupted or the purposes
o prescription, naturally or ci"illy.
ci"illy. (193)
Art. 1121. #ossession is naturally interrupted when
through any cause it should cease or more than one
year.
 5he old possession is not re"i"ed
re"i"ed i a new possession
should be e$ercised by the same ad"erse claimant.
(19a)
Art. 1122. I the natural interruption is or only one
year or less, the time elapsed shall be counted in
a"or o the prescription. (n)
Art. 1123. i"il interruption is produced by +udicial
summons to the possessor.
possessor. (19a)
Art. 1124. 8udicial summons shall be deemed not to
ha"e been issued and shall not gi"e rise to
interruption%
(1) I it should be "oid or lac2 o legal
solemnities&
(') I the plainti should desist rom the
complaint or should allow the proceedings
proceedings to
lapse&
(3) I the possessor should be absol"ed rom
the complaint.
In all these cases, the period o the
interruption shall be counted or the
prescription. (19a)
Art. 112. /ny e$press or tacit recognition which the
possessor may ma2e o the owners right also
interrupts possession. (196)
Art. 1126. /gainst a title recorded in the :egistry o
#roperty, ordinary prescription o ownership or real
rights shall not ta2e place to the pre+udice o a third
person, e$cept in "irtue o another title also recorded&
and the time shall begin to run rom the recording o
the latter.
/s to lands registered under the ;and :egistration
/ct, the pro"isions o that special law shall go"ern.
(199a)
1
Art. 1127.  5he good aith o the possessor
possessor consists in
the reasonable belie that the person rom whom he
recei"ed the thing was the owner thereo, and could
transmit his ownership. (190a)
Art. 1128. 5he conditions o good aith required or
possession in /rticles ', '4, '6, and '9 o this
ode are li2ewise necessary or the determination o
good aith in the prescription o ownership and other
real rights. (191)
Art. 1129. <or the purposes o prescription, there is
 +ust title when the ad"erse claimant came
came into
possession o the property through one o the modes
recogni=ed by law or the acquisition o ownership or
other real rights, but the grantor was not the owner or
could not transmit any right. (n)
Art. 1130. 5he title or prescription must be true and
"alid. (193)
Art. 1131. <or the purposes o prescription, +ust title
must be pro"ed& it is ne"er presumed. (19a)
Art. 1132. 5he ownership o mo"ables prescribes
through uninterrupted
uninterrupted possession or our years in
good aith.
 5he ownership o personal
personal property also prescribes
prescribes
through uninterrupted possession or eight years,
without need o any other condition.
>ith regard to the right o the owner to reco"er
personal property lost or o which he has been
illegally depri"ed, as well as with respect to mo"ables
acquired in a public sale, air, or mar2et, or rom a
merchants store the pro"isions o /rticles 9 and
10 o this ode shall be obser"ed. (19a)
Art. 1133. !o"ables possessed through a crime can
ne"er be acquired through prescription by the
oender. (19a)
Art. 1134. 7wnership and other real rights o"er
immo"able property are acquired by ordinary
prescription through possession o ten years. (194a)
Art. 113. In case the ad"erse claimant possesses by
mista2e an area greater, or less than that e$pressed
in his title, prescription shall be based on the
possession. (n)
Art. 1136. #ossession in wartime, when the ci"il
courts are not open, shall not be counted in a"or o
the ad"erse claimant.
Art. 1137. 7wnership and other real rights o"er
immo"ables also prescribe through uninterrupted
ad"erse possession thereo or thirty years, without
need o title or o good aith. (199a)
Art. 1138. In the computation o time necessary or
prescription the ollowing rules shall be obser"ed%
(1) 5he present possessor may complete the
period necessary or prescription by tac2ing
his possession to that o his grantor or
predecessor in interest&
(') It is presumed that the present possessor
who was also the possessor at a pre"ious
time, has continued to be in possession during
the inter"ening time, unless there is proo to
the contrary&
(3) 5he *rst day shall be e$cluded and the last
day included. (190a)
CHAPTER 3
PRESCRIPTION O! ACTIONS
Art. 1139. /ctions prescribe by the mere lapse o
time *$ed by law. (191)
Art. 1140. /ctions to reco"er mo"ables shall
prescribe eight years rom the time the possession
thereo is lost, unless the possessor has acquired the
ownership by prescription or a less period, according
to /rticles 113', and without pre+udice to the
pro"isions o /rticles 9, 10, and 1133. (19'a)
Art. 1141. :eal actions o"er immo"ables prescribe
ater thirty years.
 5his pro"ision is without pre+udice
pre+udice to what is
established or the acquisition o ownership and other
real rights by prescription. (193)
Art. 1142. / mortgage action prescribes ater ten
years. (19a)
Art. 1143. 5he ollowing rights, among others
speci*ed elsewhere in this ode, are not e$tinguished
by prescription%
(1) 5o demand a right o way, regulated in
/rticle 9&
(') 5o bring an action to abate a public or
pri"ate nuisance. (n)
Art. 1144. 5he ollowing actions must be brought
within ten years rom the time the right o action
accrues%
(1) ?pon a written contract&
(') ?pon an obligation created by law&
(3) ?pon a +udgment. (n)
Art. 114. 5he  actions must be commenced within
)*+ #,s%
(1) ?pon an oral contract&
(') ?pon a quasi-contract. (n)
Art. 1146. 5he  actions must be instituted within  )-+
#,s%
(1) ?pon an in+ury to the rights o the plainti&
(') ?pon a quasi-delict&
@owe"er, when the action arises rom or out o any
act, acti"ity, or conduct o any public oAcer in"ol"ing
the e$ercise o powers or authority arising rom
!artial ;aw including the arrest, detention andor trial
o the plainti, the same must be brought within one
(1) year. (/s amended by #C o. 14, Cec. ',
1960.)
Art. 1147. 5he ollowing actions must be *led within
one year%
(1) <or orcible entry and detainer&
(') <or deamation. (n)
Art. 1148. 5he limitations o action mentioned in
/rticles 110 to 11', and 11 to 114 are without
pre+udice to those speci*ed in other parts o this
ode, in the ode o ommerce, and in special laws.
(n)
Art. 1149. /ll other actions whose periods are not
*$ed in this ode or in other laws must be brought
within *"e years rom the time the right o action
accrues. (n)
Art. 110. 5he time or prescription or all 2inds o
actions, when there is no special pro"ision which
ordains otherwise, shall be counted rom the day they
may be brought. (199)
'

Art. 111. 5he time or the prescription o actions
which ha"e or their ob+ect the enorcement o
obligations to pay principal with interest or annuity
runs rom the last payment o the annuity or o the
interest. (1940a)
Art. 112. 5he period or prescription o actions to
demand the ul*llment o obligation declared by a
 +udgment commences rom
rom the time the +udgment
became *nal. (1941)
Art. 113. 5he period or prescription o actions to
demand accounting runs rom the day the persons
who should render the same cease in their unctions.
 5he period or the action arising
arising rom the result o the
accounting runs rom the date when said result was
recogni=ed by agreement o the interested parties.
(194')
Art. 114. 5he period during which the obligee was
pre"ented by a ortuitous e"ent rom enorcing his
right is not rec2oned against him. (n)
Art. 11. 5he prescription o actions is interrupted
when they are *led beore the court, when there is a
written e$tra+udicial demand by the creditors, and
when there is any written ac2nowledgment o the
debt by the debtor. (1943a)
BOO. IV
OBLIGATIONS AND CONTRACTS
Tit"$/ I/ 0 OBLIGATIONS
CHAPTER 1
GENERAL PROVISIONS
Art. 116. /n obligation is a +uridical necessity to
gi"e, to do or not to do.
Art. 117. 7bligations arise rom%
(1) ;aw&
(') ontracts&
(3) Duasi-contracts&
() /cts or omissions punished by law& and
() Duasi-delicts. (1069a)
Art. 118. 7bligations deri"ed rom law are not
presumed. 7nly those e$pressly determined in this
ode or in special laws are demandable, and shall be
regulated by the precepts o the law which establishes
them& and as to what has not been oreseen, by the
pro"isions o this Boo2. (1090)
CONTRACT
Art. 119. 7bligations arising rom contracts ha"e
the orce o law between the contracting parties and
should be complied with in good aith. (1091a)
$%ASI-CONTRACT
Art. 1160. 7bligations deri"ed rom quasi-contracts
shall be sub+ect to the pro"isions o hapter 1, 5itle
EFII, o this Boo2. (n)
#ELICT
Art. 1161. i"il obligations arising rom criminal
oenses shall be go"erned by the penal laws, sub+ect
to the pro"isions o /rticle '144, and o the pertinent
pro"isions o hapter ', #reliminary 5itle, on @uman
:elations, and o 5itle EFIII o this Boo2, regulating
damages. (109'a)
$%ASI-#ELICT
Art. 1162. 7bligations deri"ed rom quasi-delicts
shall be go"erned by the pro"isions o hapter ', 5itle
EFII o this Boo2, and by special laws. (1093a)
@/#5G: '
/5?:G /C G<<G5 7< 7B;IH/5I7
TO GIVE 11*2011**
Art. 1163. G"ery person obliged to gi"e something is
also obliged to ta2e care o it with the PROPER
DILIGENCE OF A GOOD FATHER OF A FAMILY , unless the law or
the stipulation o the parties requires another
standard o care. (109a)
Art. 1164. 5he creditor has a right to the ruits o the
thing rom the time the obligation to deli"er it arises.
@owe"er, he shall acquire no real right o"er it until the
same has been deli"ered to him. (109)
Art. 116. >hen what is to be deli"ered is a
determinate thing, the creditor, in addition to the right
granted him by /rticle 1140, may compel the debtor
to ma2e the deli"ery.
I the thing is indeterminate or generic, he may as2
that the obligation be complied with at the e$pense o  and those who in any manner contra"ene the tenor
the debtor.
I the obligor delays, or has promised to deli"er the
same thing to two or more persons who do not ha"e
the same interest, he shall be responsible or any
ortuitous e"ent until he has eected the deli"ery.
deli"ery.
(109)
Art. 1166. 5he obligation to gi"e a determinate thing
i&'l()e* t+,t  )eli/eri& ,ll it* ACCESSIONS  ,&)
ACCESSORIES, e"en though they may not ha"e been
mentioned. (1094a)
TO DO
Art. 1167. I a person obliged to do something ails
to do it, the same shall be e$ecuted at his cost.
 5his same rule shall be obser"ed i he does it in
contra"ention o the tenor o the obligation.
<urthermore,
<urthermore, it may be decreed that what has been
poorly done be undone. (1096)
NOT TO DO
Art. 1168. >hen the obligation consists in not doing,
and the obligor does what has been orbidden him, it
shall also be undone at his e$pense. (1099a)
DELAY
Art. 1169. 5hose obliged to deli"er or to do
something incur in delay rom the time the obligee
 +udicially or e$tra+udicially demands
demands rom them the
ul*llment o their obligation.
@owe"er, the demand by the creditor shall not be
necessary in order that delay may e$ist% 3
(1) >hen the obligation or the law e$pressly
so declare& or
(') >hen rom the nature and the
circumstances o the obligation it appears that
the designation o the time when the thing is
to be deli"ered or the ser"ice is to be
rendered was a controlling moti"e or the
establishment o the contract& or
(3) >hen demand would be useless, as when
the obligor has rendered it beyond his power
to perorm.
In reciprocal obligations, neither party incurs in delay
i the other does not comply or is not ready to comply
in a proper manner with what is incumbent upon him.
<rom
<rom the moment one o the parties ul*lls his
obligation, delay by the other begins. (1100a)
GROUNDS
GROUNDS FOR LIABILITY 3,a&t$' t( i&45,$' !a,t#
Art. 1170. 5hose who in the perormance o their
obligations are guilty o raud, negligence, or delay,
thereo, are liable or damages. (1101)
3
Art. 1171. :esponsibility arising rom raud is
demandable in all obligations. /ny ,i/er  ,&
,'ti& or FUTURE FRAUD is VOID. (110'a)
Art. 1172. :esponsibility arising rom negligence in
the perormance o e"ery 2ind o obligation is also
demandable, but such liability may be regulated by
the courts, according to the circumstances. (1103)
Art. 1173. 5he ault or negligence o the obligor
consists in the omission o that diligence which is
required by the nature o the obligation and
corresponds
corresponds with the circumstances o the persons, o  G"ery obligation which contains a RESOLUTORY
the time and o the place. >hen negligence shows
bad aith, the pro"isions o /rticles 1141 and ''01,
paragraph ', shall apply.
apply.
I the law or contract does not state the diligence
which is to be obser"ed in the perormance, that
which is e$pected o a good ather o a amily shall be
required. (110a)
FORTUITOUS EVENT
Art. 1174. G$cept in cases e$pressly speci*ed by the
law, or when it is otherwise declared by stipulation, or
when the nature o the obligation requires the
assumption o ris2, no person shall be responsible or
those e"ents which could not be oreseen, or which,
though oreseen, were ine"itable. (110a)
Art. 117. ?surious transactions shall be go"erned
by special laws. (n)
Art. 1176. 5he receipt o the principal by the creditor
without reser"ation with respect to the interest, shall
gi"e rise to the presumption that said interest has
been paid.
 5he receipt o a later installment
installment o a debt without
reser"ation as to prior installments, shall li2ewise
raise the presumption that such installments ha"e
been paid. (1110a)
:ecissory /ction /cion #aulianaJ
Art. 1177. 5he creditors, ater ha"ing pursued the
property in possession o the debtor to satisy their
claims, may e$ercise all the rights and bring all the
actions o the latter or the same purpose, sa"e those
which are inherent in his person& they may also
impugn the acts which the debtor m ay ha"e done to
deraud them. (1111)
Art. 1178. ub+ect to the laws, all rights acquired in
"irtue o an obligation are transmissible, i there has
been no stipulation to the contrary.
contrary. (111')
@/#5G: 3
CI<<G:G5 KIC 7< 7B;IH/5I7
SECTION 1. - P%RE
- P%RE ,&)
 ,&) CON#ITIONAL
Oli,ti&*
1167 0 1178
Art. 1179. G"ery obligation whose perormance does
NOT DEPEND upon a FUTURE  or UNCERTAIN EVENT, or UPON A
PAST EVENT UN.NOWN TO THE PARTIES , is demandable at
once.
CONDITION shall also be demandable, without
pre+udice to the eects o the happening o the e"ent.
(1113)
OBLI w9 a PERIOD
Art. 1180. >hen the debtor binds himsel to pay
when his means permit him to do so, the obligation
shall be deemed to be one with a period, sub+ect to
the pro"isions o /rticle 1194.
Art. 1181. In conditional obligations, the acquisition
o rights, as well as the e$tinguishment or loss o
those already acquired, shall depend upon the
happening o the e"ent which constitutes the
condition. (111)
POTESTATIVE: CASUAL MI; < =i("at$ !,i& (> M5t5a"it#
Art. 1182. >hen the ul*llment o the condition
depends upon the sole will o the debtor, the
conditional obligation shall be "oid. I it depends upon
chance or upon the will o a third person, the
obligation shall ta2e eect in conormity with the
pro"isions o this ode. (111)
SUSPENSIVE COND < i!( $?ist$' @ ti$ (%"i wasc(&stit5t$'
Art. 1183. Impossible conditions, those contrary to
good customs or public policy and those prohibited by
law shall annul the obligation which depends upon
them. I the obligation is di"isible, that part thereo
which is not aected by the impossible or unlawul
condition shall be "alid.
 5he condition not to do an impossible
impossible thing shall be
considered as not ha"ing been agreed upon. (111a)
POSITIVE )SUSPENSIVE + COND/
Art. 1184. 5he condition that some e"ent happen at
a determinate time shall e$tinguish the obligation as
soon as the time e$pires or i it has become
indubitable that the e"ent will not ta2e place. (1114)
NEGATIVE COND/
Art. 118. 5he condition that some e"ent will not
happen at a determinate time shall render the
obligation eecti"e rom the moment the time
indicated has elapsed, or i it has become e"ident that
the e"ent cannot occur.
I no time has been *$ed, the condition shall be
deemed ul*lled at such time as may ha"e probably
been contemplated, bearing in mind the nature o the
obligation. (1116)
CONSTRUCTIVE 9 PRESUMED FULFILLMENT
Art. 1186. 5he condition shall be deemed ul*lled
when the obligor "oluntarily pre"ents its ul*llment.
(1119)
Art. 1187. 5he eects o a conditional obligation to
gi"e, once the condition has been ul*lled, shall
retroact to the day o the constitution o the
obligation. e"ertheless, when the obligation imposes
reciprocal prestations
prestations upon the parties, the ruits and
interests during the pendency o the condition shall
be deemed to ha"e been mutually compensated. I
the obligation is unilateral, the debtor shall
appropriate the ruits and interests recei"ed, unless
rom the nature and circumstances o the obligation it
should be inerred that the intention o the person
constituting the same was dierent.
In obligations to do and not to do, the courts shall
determine, in each case, the retroacti"e eect o the
condition that has been complied with. (11'0)
Art. 1188. 5he creditor may, beore the ul*llment o
the condition, bring the appropriate actions or the
preser"ation o his right.
 5he debtor may reco"er
reco"er what during the same time
he has paid by mista2e in case o a suspensi"e
condition. (11'1a)
DURING PENDENCY OF AN OBLI
Art. 1189. >hen the conditions ha"e been i mposed
with the intention o suspending the eAcacy o an
obligation to gi"e, the ollowing rules shall be
obser"ed in case o the impro"ement, loss or
deterioration o the thing during the pendency o the
condition%
(1) I the thing is "(st without the fault of the DEBTOR,
the obligation shall be extinguished &
(') I the thing is "(st through the fault of the
DEBTOR, he shall be obliged to pay damages& it is
understood that the thing is lost when it

 perishes, or goes out o commerce, or
disappears in such a way that its e$istence is
un2nown or it cannot be reco"ered&
(3) >hen the thing '$t$,i(,at$s without the fault
of the DEBTOR , the impairment is to be borne by
the creditor &
() I it '$t$,i(,at$s through the fault of the DEBTOR ,
the creditor may choose between the rescission of the
obligation and its fulfillment, with indemnity  or
 or
damages in either case&
() I the thing is i!,(=$' by its nature, or by
time, the impro"ement shall inure to the benefit of
the creditor &
() I it is i!,(=$' at the expense of the DEBTOR , he
shall ha"e no other right than that granted to
the usufructuary . (11'')
EFFECTS OF FULFILLMENT OF RESOLUTORY COND
Art. 1190. >hen the conditions ha"e or their
purpose the e$tinguishment o an obligation to gi"e,
the parties, upon the ul*llment o said conditions,
shall return to each other what they ha"e recei"ed.
In case o the loss, deterioration or impro"ement o
the thing, the pro"isions which, with respect to the
debtor, are laid down in the preceding article shall be
applied to the party who i s bound to return.
/s or the obligations to do and not to do, the
pro"isions o the second paragraph o /rticle 1164
shall be obser"ed as regards the eect o the
e$tinguishment o the obligation. (11'3)
RESCISSION IN RECIPROCAL OBLI VS/ 12
Art. 1191. 5he POWER to RESCIND obligations is
implied in re'i5r',l ones, in case one o the
obligors should not comply with what is incumbent
upon him.
 5he in+ured party may choose
choose between the ul*llment
ul*llment
and the rescission o the obligation, with the payment
o damages in either case. @e may also see2
rescission, e"en ater he has chosen ul*llment, i the
latter should become impossible.
 5he court shall decree
decree the rescission claimed, unless
there be +ust cause authori=ing the *$ing o a period.
 5his is understood to be without pre+udice
pre+udice to the
rights o third persons who ha"e acquired the thing, in
accordance with /rticles 136 and 1366 and the
!ortgage ;aw. (11')
BOTH PARTIES GUILTY OF BREACH
Art. 1192. In case both parties ha"e committed a
breach o the obligation, the "ia%i"it# (> th$ >i,st i&>,act(,
shall be equitably tempered by the courts. I it
',&&t e )eteri&e) which o the parties *rst
"iolated the contract, the sa$ sha"" %$ '$$$' extinguished ,
and $ach sha"" %$a, his (w& 'aa3$s. (n)
SECTION 2. - Oli,ti&* WITH A PERIOD
11720 117
Art. 1193. 7bligations or whose ul*llment a day
certain has been *$ed, shall be demandable only
when that day comes.
7bligations with a resolutory period ta2e eect at
once, but terminate upon arri"al o the day certain.
/ day certain is understood to be that which must
necessarily come, although it may not be 2nown
when.
I the uncertainty consists in whether the day will
come or not, the obligation is conditional, and it shall
be regulated by the rules o the preceding ection.
(11'a) USUFRUCTUARY  – enabling a holde !o dei"e #o$i! o bene$i! $o%
#o#e!& !ha! ei!he i' !i!led
i'  !i!led !o ano!he #e'on
INURE  – !a(e e$$e)!
ONEROUS < $?c$ssi=$"# %5,'$&s($: t,(5%"$s($
Art. 1194. In case o loss, deterioration or
impro"ement o the thing beore the arri"al o the day
certain, the rules in /rticle 1169 shall be obser"ed. (n)
PAYMENT BEFORE ARRIVAL OF PERIOD
Art. 119. /nything paid or deli"ered beore the
arri"al o the period, the obligor being unaware of the
 period  or
 or believing that the obligation has become due and
demandable, a# %$ ,$c(=$,$' it+ t+e r(it* ,&)
i&tere*t*. (11'a)
Art. 1196. >hene"er in an obligation a period is
designated, it is presumed to ha"e been established
or the bene*t o both the creditor and the debtor,
unless rom the tenor o the same or other
circumstances it should appear that the period has
been established in a"or o one or o the other.
(11'4)
WHEN COURTS SHALL FI; ' PERIOD J5'icia" P$,i(' < 8 STEP PROCESS
Art. 1197. I the obligation does not *$ a period, but
1 r it* &,t(re ,&) t+e 'ir'(*t,&'e*
'ir'(*t,&'e* it ',&
e i&erre) t+,t , 5eri) ,* i&te&)e), the
courts may *$ the duration thereo.
 5he courts shall also *$ the duration
duration o the period
when it 2 )e5e&)* (5& t+e ill  t+e )etr.
In e"ery case, the courts shall determine such period
as may under the circumstances ha"e been probably
contemplated by the parties. 7nce *$ed by the
courts, the period cannot be changed by them.
(11'6a)
 when DEBTOR LOSES A RIGHT TO A PERIOD-OBLI DEMANDABLE B4 LAPSE OF PERIOD
Art. 1198.  5he DEBTOR shall l*e e/er ri+t t
,e (*e  t+e 5eri)%
(1) >hen ater the obligation has been contracted, he
becomes INSOLVENT, unless he gi"es a guaranty or
security or the debt&
(') >hen he does not urnish to the creditor the
guaranties or securities which he has promised&
(3) >hen by his own acts he has impaired said
guaranties or securities ater their establishment, and
when through a ortuitous e"ent they disappear,
unless he immediately gi"es new ones equally
satisactory&
() >hen the debtor "iolates any  UNDERTA.ING, in
consideration o which the creditor agreed to the
period&
() >hen the debtor ATTEMPTS  to abscond. (11'9a)
SECTION 3. - ALTERNATIVE Oli,ti&*
1177018
Art. 1199. / person alternati"ely bound by dierent
prestations shall completely perorm one o them.
 5he creditor cannot be compelled to receive part of one and part of
the other undertaking. (1131)
Art. 1200.  5he ,i3ht (> ch(ic$ %$"(&3s t( t h$ DEBTOR, unless
it has been e$pressly granted to the creditor.
creditor.
 5he debtor shall ha"e no right to choose
choose those
prestations which are impossible, unlawul or which
could not ha"e been the ob+ect o the obligation.
(113')
Art. 1201. 5he choice shall produce no eect e$cept
rom the ti$ it has %$$& c(5&icat$'. (1133)

Art. 1202. 5he debtor shall lose the right o choice
when among the prestations whereby he is
alternati"ely bound, only one is practicable. (113)
182 < 18- Righ! o$ *hoi)e+  DEBTOR
Art. 1203. I through the creditors acts the debtor
cannot ma2e a choice according to the terms o the
obligation, the latter may rescind the contract with
damages. (n)
Art. 1204. 5he creditor shall ha"e a right to
indemnity or damages when, through the ault o the
debtor, all the things which are alternati"ely the
ob+ect o the obligation ha"e been lost, or the
compliance o the obligation has become impossible.
 5he indemnity shall be *$ed
*$ed ta2ing as a basis the
"alue o the last thing which disappeared, or that o
the ser"ice which last became impossible.
Camages other than the "alue o the last thing or
ser"ice may also be awarded. (113a)
Righ! o$ *hoi)e+ CREDITOR
Art. 120. >hen the choice has been $?!,$ss"# 3i=$& t(
th$ CREDITOR, the obligation shall cease to be
alternati"e rom the 'a# wh$& th$ s$"$cti(& has %$$&
c(5&icat$' t( th$ '$%t(,/
?ntil then the responsibility o the debtor shall be
go"erned by the ollowing rules%
(1) I one of the things is lost  through a ORT!"TO!#
E$E%T , he shall perorm the obligation by
delivering that which the creditor should choose from
among the remainder , or that which remains i only
one subsists&
(') I the loss of one of the things occurs through
the fault of the debtor , the creditor may claim any of
those subsisting, or the price of that which, through the
fault of the former, has disappeared , with a right to
damages&
(3) I all the things are lost through the fault of the debtor ,
the choice by the creditor shall  fall upon the price
of any one of them, also with indemnity for damages&
 5he same rules shall be applied to obligations
obligations to do or
not to do in case one, some or all o the prestations
should become impossible. (113a)
FACULTATIVE
Art. 1206. >hen only one prestation has been
agreed upon, but the obligor may render another in
substitution, the obligation is called acultati"e.
 5he loss or deterioration o the thing
thing intended as a
substitute, through the negligence o the obligor, does
not render him liable. But once the substitution has
been made, the obligor is liable or the loss o the
substitute on account o his delay, negligence or
raud. (n)
SECTION 4. - JOINT ,&) SOLIDARY  Oli,ti&*
Art. 1207. 5he concurrence o two or more creditors or of
two or more debtors in one and the same obligation does
not imply that each one o the ormer has a right to
demand, or that each one o the latter is bound to
render, entire compliance with the prestation. 5here is
a solidary liability only when the obligation e$pressly
so states, or when the law or the nature o the
obligation requires solidarity. (1134a)
JOINT DIVISIBLE OBLIGTN
Art. 1208. I rom the law, or the nature or the
wording o the obligations to which the preceding
article reers the contrary does not appear, the credit
or debt shall be presumed to be di"ided into as many
shares as there are creditors or debtors, the credits or
debts being considered distinct rom one another,
sub+ect to the :ules o ourt go"erning the
multiplicity o suits. (1136a)
JOINT INDIVISIBLE OBLIGTN
Art. 1209. I the di"ision is impossible, the right o
the creditors may be pre+udiced only by their
collecti"e acts, and the debt can be enorced only by
proceeding against all the debtors. I one o the latter
should be insol"ent, the others shall not be liable or
his share. (1139)
INDIVISIBILITY VS/ SOLIDARITY
Art. 1210. 5he indi"isibility o an obligation does not
necessarily gi"e rise to soli darity.
darity. or does solidarity
o itsel imply indi"isibility.
indi"isibility. (n)
Art. 1211. olidarity may e$ist although the creditors
and the debtors may not be bound in the same
manner and by the same periods and conditions.
(110)
Art. 1212. Gach one o the solidary creditors may do
whate"er may be useul to the others, but not
anything which may be pre+udicial to the latter.
latter.
(111a)
Art. 1213. / solidary creditor cannot assign his rights
without the consent o the others. (n)
Art. 1214.  5he debtor may pay anyany one o the
solidary creditors& but i any demand, +udicial or
e$tra+udicial, has been made by one o them,
payment should be made to him. (11'a)
Art. 121. o"ation, compensation, conusion or
remission o the debt, made by any o the solidary
creditors or with any o the solidary debtors, shall
e$tinguish the obligation, without pre+udice to the
pro"isions o /rticle 1'19.
 5he creditor who may
may ha"e e$ecuted
e$ecuted any o these
acts, as well as he who collects the debt, shall be
liable to the others or the share in the obligation
corresponding
corresponding to them. (113)
Art. 1216. 5he creditor may proceed against any one
o the solidary debtors or some or all o them
simultaneously.
simultaneously. 5he demand made against one o
them shall not be an obstacle to those which may
subsequently be directed against the others, so l ong
as the debt has not been ully collected. (11a)
Art. 1217. #ayment made by one o the solidary
debtors e$tinguishes the obligation. I two or more
solidary debtors oer to pay, the creditor may choose
which oer to accept.
@e who made the payment may claim rom his co-
debtors only the share which corresponds to each,
with the interest or the payment already made. I the
payment is made beore the debt i s due, no interest
or the inter"ening period may be demanded.
>hen one o the solidary debtors cannot, because o
his insol"ency, reimburse his share to the debtor
paying the obligation, such share shall be borne by all
his co-debtors, in proportion to the debt o each.
(11a)
Art. 1218. #ayment by a solidary debtor shall not
entitle him to reimbursement rom his co-debtors i
such payment is made ater the obligation has
prescribed or become illegal. (n)

Art. 1219. 5he remission made by the creditor o the
share which aects one o the solidary debtors does
not release the latter rom his responsibility towards
the co-debtors, in case the debt had been totally paid
by anyone o them beore the remission was eected.
(11a)
Art. 1220. 5he remission o the whole obligation,
obtained by one o the s olidary debtors, does not
entitle him to reimbursement rom his co-debtors. (n)
Art. 1221. I the thing has been lost or i the
prestation has become impossible without the ault o
the solidary debtors, the obligation shall be
e$tinguished.
I there was ault on the part o any one o them, all
shall be responsible to the creditor, or the price and
the payment o damages and interest, without
pre+udice to their action against the guilty or
negligent debtor.
I through a ortuitous e"ent, the thing is lost or the
perormance has become impossible ater one o the
solidary debtors has incurred in delay through the
 +udicial or e$tra+udicial demand upon
upon him by the
creditor, the pro"isions o the preceding paragraph
shall apply. (114a)
Art. 1222. / solidary debtor may, in actions *led by
the creditor, a"ail himsel o all deenses which are
deri"ed rom the nature o the obligation and o those
which are personal to him, or pertain to his own share.
>ith respect to those which personally belong to the
others, he may a"ail himsel thereo only as regards
that part o the debt or which the latter are
responsible. (116a)
SECTION . - DIVISIBLE ,&) INDIVISIBLE Oli,ti&*
Art. 1223.  5he di"isibility or indi"isibility o the
things that are the ob+ect o obligations in which there
is only one debtor and only one creditor does not alter
or modiy the pro"isions o hapter ' o this 5itle.
(119)
Art. 1224. / +oint indi"isible obligation gi"es rise to
indemnity or damages rom the time anyone o the
debtors does not comply with his underta2ing. 5he
debtors who may ha"e been ready to ul*ll their
promises shall not contribute to the indemnity beyond
the corresponding portion o the price o the thing or
o the "alue o the ser"ice in which the obligation
consists. (110)
Art. 122. <or the purposes o the preceding articles,
obligations to gi"e de*nite things and those which are
not susceptible o partial perormance shall be
deemed to be indi"isible.
>hen the obligation has or i ts ob+ect the e$ecution o 
a certain number o days o wor2, the
accomplishment o wor2 by metrical units, or
analogous things which by their nature are
susceptible o partial perormance, it shall be  
di"isible.
@owe"er, e"en though the ob+ect or ser"ice may be
physically di"isible, an obligation is indi"isible i so
pro"ided by law or intended by the parties.
In obligations not to do, di"isibility or indi"isibility
shall be determined by the character o the prestation
in each particular case. (111a)
PLCCCN
ARFP
SECTION 6. - Oli,ti&* W9 A PENAL CLAUSE
$?c"5si=$
Art. 1226. In obligations with a penal clause, the
penalty shall substitute the indemnity or damages
and the payment o interests in case o
noncompliance, i there is no stipulation to the
contrary. e"ertheless, damages shall be paid i the
obligor reuses to pay the penalty or is guilty o raud
in the ul*llment o the obligation.
 5he penalty may be enorced
enorced only when it is
demandable in accordance with the pro"isions o this
ode. (11'a)
Art. 1227. 5he debtor cannot e$empt himsel rom
the perormance o the obligation by paying the
penalty, sa"e in the case where this right has been
e$pressly reser"ed or him. either can the creditor
demand the ul*llment o the obligation and the
satisaction o the penalty at the same time, unless
this right has been clearly granted him. @owe"er, i
ater the creditor has decided to require the ul*llment
o the obligation, the perormance thereo should
become impossible without his ault, the penalty may
be enorced. (113a)
Art. 1228. #roo o actual damages suered by the
creditor is not necessary in order that the penalty may
be demanded. (n)
Art. 1229. 5he +udge shall equitably reduce the
penalty when the principal obligation has been partly
or irregularly complied with by the debtor. G"en i
there has been no perormance, the penalty may also
be reduced by the courts i it is iniquitous or
unconscionable. (11a)
Art. 1230. 5he nullity o the penal clause does not
carry with it that o the principal obligation.
5he nullity o the principal obligation carries
carries with it
that o the penal clause. (11)
CHAPTER 4
E;TINGUISHMENT  O! O:LIGATIONS
GENERAL PROVISIONS
Art. 1231. 7bligations are e$tinguished%
(1) By PAYMENT or PERFORMANCE %
(') By the LOSS OF THE THING DUE %
(3) By the CONDONATION or REMISSION o the debt&
"ist NOT
() By the CONFUSION  or MERGER  o the rights o
creditor and debtor&
() By COMPENSATION &
() By NOVATION.
7ther causes o e$tinguishment o obligations, such
as annulment, rescission, ul*llment o a resolutory
condition, and prescription, are go"erned elsewhere in
this ode. (11a)
SECTION 1. - PAYMENT r PERFORMANCE
Art. 1232. #ayment means not only the deli"ery o
money but also the perormance, in any other
manner, o an obligation. (n)
DEBT CONSIDERED PAID
Art. 1233. / debt shall not be understood to ha"e
been paid unless the thing or ser"ice in which the
obligation consists has been completely delivered or
rendered , as the case may be. (114)
4
GOOD FAITH REQS 1/ S5%sta&tia" P$,>(,a&c$ 8/ G((' Faith Pa#$&t a'$ t( a  T*"RD )ER#O%  shall also be "alid insoar prestations in which the obligation consists. either
Art. 1234. I the obligation has been substantially as it has redounded to the benefit of the creditor . uch %$&$>it t( may the debtor be required to ma2e partial payments.
perormed in good aith, the obligor may reco"er as th$ c,$'it(, &$$' &(t %$ !,(=$' i& th$ >(""(wi&3 cas$s
though there had been a strict and complete (1) I ater the payment, the third person @owe"er, when the debt is in part liquidated and in
ul*llment, less damages suered by the obligee. (n) acquires the creditors rights& 0 SUBROGATION OF part unliquidated, the creditor may demand and the
QUALIFIED PERFORMANCE PAYER IN CREDITORS RYTS debtor may eect the payment o the ormer without
Art. 123. >hen the 1 obligee ,''e5t* t+e (') I the creditor rati*es the payment to the waiting or the liquidation o the latter. (119a)
5err,&'e, &(wi&3 its i&c(!"$t$&$ss or i,,$35"a,it#, and third person& 0RATIFICATION BY CREDITOR
2 with(5t $?!,$ssi&3 a&# !,(t$st or (%4$cti(&, the obligation is (3) I by the creditors conduct, the debtor has
deemed ully complied with. (n) been led to belie"e that the third person had
Art. 1249. 5he payment o debts in money shall be
PAYMENT BY 2 ,' PERSON 1/ W9 .&(w"$'3$  C(&s$&t )'$%t(,+ <REIMBURSE  SUBROGATION MADE IN THE CURRENCY STIPULATED , and i it is not possible
8/ W9O .&(w"$'3$ 9 A3ai&st Wi"" < RECOVER INSOFAR as !a#$&t has %$$& %$&$>icia" t( '$%t(,
authority to recei"e the payment. <ESTOPPEL ON
to deli"er such currency, then in the currency
currency which is
Art. 1236. 5he creditor is not bound to accept PART OF CREDITOR  (113a)
legal tender in the #hilippines.
payment or perormance by a third person who has no
interest in the ul*llment o the obligation, unless Art. 1242. #ayment made in GOOD FAITH to a&# !$,s(& in
there is a stipulation to the contrary. !(ss$ssi(& (> th$ c,$'it  shall release the debtor. (11)  5he deli"ery o promissory notes
notes payable to order,
order, or
>hoe"er pays or another may demand rom the
CRE#IT here-
here-any orm &eti,le
orm  &eti,le i&*tr(e&t bills o e$change or other mercantile documents shall
5,,le t :EARER
debtor what he has paid, e$cept that i he paid 5r)('e t+e e<e't  5,e&t &l +e& t+e
without the 2nowledge or against the will o the Art. 1243. #ayment made to the creditor by the +,/e ee& ',*+e), or +e& t+r(+ t+e ,(lt 
debtor, he can reco"er only insoar as the payment debtor ater the latter has been + udicially ordered to t+e 're)itr t+e +,/e ee& i5,ire).
has been bene*cial to the debtor. (116a) retain the debt shall not be "alid. (11)
RYT OF 2 ,' PERSON TO SUBROGATE In the meantime, the action deri"ed rom the original
Art. 1237. >hoe"er pays on behal o the debtor Art. 1244. 5he debtor o a thing cannot compel the obligation shall be held in the abeyance. (1140)
without the 2nowledge or against the will o the latter, creditor to recei"e a dierent one, although the latter
cannot compel the creditor to subrogate him in his may be o the same "alue as, or more "aluable than
rights, such as those arising rom a mortgage, Art. 120. In case an e$traordinary inMation or
that which is due. deMation o the currency stipulated should super"ene,
guaranty, or penalty. (119a)
DONATION the "alue o the currency at the time of the
Art. 1238. #ayment made by a third person who In obligations to do or not to do, an act or orbearance establishment of the obligation shall be the
does not intend to be reimbursed by the debtor is cannot be substituted by another act or orbearance basis of payment, unless there is an agreement to
deemed to be a DONATION, which requires the debtors against the obligees will. (11a) the contrary. (n)
consent. But the payment is in any case "alid as to Art. 124. DATION IN PA YMENT , whereby property is
PAYMENT
the creditor who has accepted it. (n) alienated to the creditor in satisaction o a debt in Art. 121. #ayment shall be made in the PLACE
money, shall be go"erned by the law o sales. (n) in the obligation.
Art. 1239. In obligations to gi"e, payment made by  5here being  and i the
PRIN OF E,IT. 9 RULE OF MEDIUM QUALITY
one who does not ha"e the free disposal of the underta2ing is to deli"er a DETERMINATE , the
Art. 1246. >hen the obligation consists in the
thing due and capacity to alienate it shall not be payment shall be made
deli"ery o an INDETERMINATE  or GENERIC thing, whose
"alid, without pre+udice to the pro"isions o /rticle 1-86
quality and circumstances ha"e not been stated, the .
under the 5itle on LNatural
LNatural Obligations
Obligations.L
.L (110a)
c,$'it(, ca&&(t '$a&' a thi&3 (> s5!$,i(, K5a"it#. either can In any other case the place o payment shall be the
the '$%t(, '$"i=$, a thi&3 (> i&>$,i(, K5a"it#. 5he purpose o the DOMICILE o the DEBTOR.
Art. 1240. #ayment shall be made to the person in
obligation and other circumstances shall be ta2en into I the debtor  cha&3$s
 cha&3$s his '(ici"$ i& %a' >aith  or ater he has
whose a"or the obligation has been constituted, or
consideration. (114a) i&c5,,$' i& '$"a# , the additional expenses shall be borne by 
his successor in interest, or any person authori=ed to DEBTOR #a&' $o E?t,a45'icia
E?t,a45'icia"" E?!$&s$s him.
recei"e it/ 0 )BY LAW+ (11'a) Art. 1247. ?nless it is otherwise stipulated, the
VALID PAYMENT TO INCAPACITATED 9 2  PERSON RD  5hese pro"isions
pro"isions are without pre+udice to "enue under the
E+TR(!D"'"(- E+)E%#E# required by the payment shall be :ules o ourt. (1141a)
1241 . Pa#$&t t( a !$,s(& wh( is "%'()('"T(TED to
Art. 1241.
or the account o the DEBTOR. >ith regard to +udicial
administer his property shall be "alid i he +,* e5t
costs, the :ules o ourt shall go"ern. (116a) S%:SECTION 1. - A55li',ti&  P,e&t*
t+e t+i& )eli/ere), or insoar as the payment has PARTIAL PERFORMAN*E a""(w$'
 when PARTIAL
ee& e&e;'i,l t +i. Art. 122. @e who has "arious debts o the same
Art. 1248. !nless there is an express stipulation to that
2ind in a"or o one and the same creditor, may
eect, the c,$'it(, ca&&(t %$ c(!$""$' !a,tia""# t( ,$c$i=$ the
declare at the time o ma2ing the payment, to which

6
o them the same must be applied. ?nless the parties
so stipulate, or when the application o payment is
made by the party or whose bene*t the term has
been constituted, application shall not be made as to
debts which are not yet due.
I the debtor accepts rom the creditor a receipt in
which an application o the payment is made, the
ormer cannot complain o the same, unless there is a
cause or in"alidating the contract. (114'a)
Art. 123. I the debt produces interest, payment o
the principal shall not be deemed to ha"e been made
until the interests ha"e been co"ered. (1143)
PAYMENT TO MORE ONEROUS DEBTS
Art. 124. >hen the payment cannot be applied in
accordance with the preceding rules, or i application
can not be inerred rom other circumstances, the
debt which is most onerous to the debtor, among
those due, shall be deemed to ha"e been satis*ed.
I the debts due are o the same nature and burden,
the payment shall be applied to all o them
proportionately. (114a)
S%:SECTION 2. - P,e&t  CESSION
CESSION
Art. 12. 5he debtor may cede or assign his
property to his creditors in payment o his debts. 5his
cession, unless there is stipulation to the contrary,
shall only release the debtor rom responsibility or
the net proceeds o the thing assigned. 5he
agreements which, on the eect o the cession, are
made between the debtor and his creditors shall be
go"erned by special laws. (114a)
S%:SECTION 3. - TENDER OF PAYMENT  ,&)
CONSIGNATION
Art. 126. I the creditor to whom tender o payment
has been made reuses without +ust cause to accept
it, the debtor shall be released rom responsibility by
the consignation o the thing or sum due.
CONSIGNATION  alone shall produce the same eect in
the ollowing cases%
(1) >hen the creditor is absent or un2nown,
or does not appear at the place o payment&
(') >hen he is incapacitated to recei"e the
payment at the time it is due&
(3) >hen, without +ust cause, he reuses to
gi"e a receipt&
() >hen two or more persons claim the same
right to collect&
() >hen the title o the obligation has been
lost. (114a)
Art. 127. In order that the consignation o the thing
due may release the obligor, it must *rst be
announced to the persons interested in the ul*llment
o the obligation.
 5he consignation shall be ineectual
ineectual i it is not made
strictly in consonance with the pro"isions which
regulate payment. (1144)
Art. 128. onsignation shall be made by depositing
the things due at the disposal o +udicial authority,
beore whom the tender o payment shall be pro"ed,
in a proper case, and the announcement o the
consignation in other cases.
 5he consignation ha"ing
ha"ing been made, the interested
parties shall also be noti*ed thereo.
thereo. (1146)
Art. 129. 5he e$penses o consignation, when
properly made, shall be charged against the creditor.
creditor.
(1146)
Art. 1260. 7nce the consignation has been duly
made, the debtor may as2 the +udge to order the
cancellation o the obligation.
Beore the creditor has accepted the consignation, or
beore a +udicial declaration that the consignation has
been properly made, the debtor may withdraw the
thing or the sum deposited, allowing the obligation to
remain in orce. (1160)
Art. 1261. I, the consignation ha"ing been made,
the creditor should authori=e the debtor to withdraw
the same, he shall lose e"ery preerence which he
may ha"e o"er the thing. 5he co-debtors, guarantors
and sureties shall be released. (1161a)
SECTION 2. - LOSS  t+e THING DUE
DETERMINATE THING
Art. 1262. /n obligation which consists in the
deli"ery o a DETERMINATE thi&3  shall be E;TINGUISHED  i it
should be lost or destroyed WITHOUT THE FAULT OF THE
DEBTOR, and %$>(,$ h$ has i&c5,,$' i& '$"a#.
>hen by law or stipulation, the obligor is liable e"en or
ortuitous e"ents, the loss o the thing does not
e$tinguish the obligation, and he shall be responsible
or damages. 5he same rule applies when the nature
o the obligation requires the assumption o ris2.
(116'a)
GENERIC THING
Art. 1263. In an obligation to deli"er a generic thing,
the loss or destruction o anything o the same 2ind
does not e$tinguish the obligation. (n)
PARTIAL LOSS < C(5,t D$ci'$s
Art. 1264.  5he courts shall determine
determine whether, under
the circumstances, the partial loss o the ob+ect o the
obligation is so important as to e$tinguish the
obligation. (n)
PRESUMPTION OF FAULT: DEBTOR i& his !(ss$ssi(& LOST THING
Art. 126. >hene"er the thing is lost in the
possession o the debtor, it shall be presumed that
the loss was due to his ault, unless there is proo to
the contrary, and without pre+udice to the pro"isions
o article 11. 5his presumption does not apply in
case o earthqua2e, Mood, storm, or other natural
calamity. (1163a)
TO DO: EFFECT OF IMPOSSIBLITY OF PERFORMANCE: S5!$,=$&i&3 I!(ssi%i"it#
Art. 1266. 5he debtor in obligations to do shall also
be released when the prestation becomes legally or
physically impossible without the ault o the obligor.
(116a)
DOCTRIINE
DOCTRIINE OF UNFORSEE
UNFORSEEN
N EVENTS: Di>>ic5"t t( P$,>(,
Art. 1267. >hen the ser"ice has become so diAcult
as to be maniestly beyond the contemplation o the
parties, the obligor may also be released thererom, in
whole or in part. (n)
Art. 1268. >hen the debt o a thing certain and
determinate proceeds
proceeds rom a criminal oense, the
debtor shall not be e$empted rom the payment o its
price, whate"er may be the cause or the loss, unless
the thing ha"ing been oered by him to the person
who should recei"e it, the l atter reused without
 +usti*cation to accept it. (116)
Art. 1269. 5he obligation ha"ing been e$tinguished
by the loss o the thing, the creditor shall ha"e all the
rights o action which the debtor may ha"e against
9
third persons by reason o the loss. (116)
SECTION 3. - CONDONATION r REMISSION OF THE DEBT
Art. 1270. ondonation or remission is essentially
gratuitous, and requires the acceptance by the
obligor.
obligor. It may be made e$pressly or impliedly.
impliedly.
7ne and the other 2ind shall be sub+ect to the rules
which go"ern inoAcious donations. G$press
condonation shall, urthermore, comply with the orms
o donation. (1164)
Art. 1271.  5he deli"ery o a pri"ate document
document
e"idencing a credit, made "oluntarily by the creditor
to the debtor, implies the renunciation o the action
which the ormer had against the latter.
I in order to nulliy this wai"er it should be claimed to
be inoAcious, the debtor and his heirs may uphold it
by pro"ing that the deli"ery o the document was
made in "irtue o payment o the debt. (1166)
Art. 1272. >hene"er the pri"ate document in which
the debt appears is ound in the possession o the
debtor, it shall be presumed that the creditor
deli"ered it "oluntarily, unless the contrary is pro"ed.
(1169)
Art. 1273. 5he renunciation o the principal debt
shall e$tinguish the accessory obligations& but the
wai"er o the latter shall lea"e the ormer in orce.
(1190)
Art. 1274. It is presumed that the accessory
obligation o pledge has been remitted when the thing
pledged, ater its deli"ery to the creditor, is ound in
the possession o the debtor, or o a third person who
owns the thing. (1191a)
A!TER =I#TER=S
SECTION 4. - CONFUSION r MERGER OF
RIGHTS
Art. 127. 5he
127. 5he obligation is e$tinguished
rom the time the characters o creditor and
debtor are merged in the same person.
(119'a)
Art. 1276. !erger
1276. !erger which ta2es place in the
person o the principal debtor or creditor
bene*ts the guarantors. onusion which
ta2es place in the person o any o the latter
does not e$tinguish the obligation.
obligation. (1193)
Art. 1277. onusion does not e$tinguish a
 +oint obligation
obligation e$cept
e$cept as regards
regards the share
share
corresponding to the creditor or debtor in
whom the two characters concur. (119)
SECTION . - COMPENSATION
Art. 1278. ompensation
1278. ompensation shall ta2e place
when two persons, in their own right, are
creditors and debtors o each other. (119)
Art. 1279.
1279. In order that compensation may
be proper, it is necessary%
(1) 5hat each one o the obligors be
bound principally, and that he be at
the same time a principal creditor o
the other&
(') 5hat both debts consist in a sum of
money , or i the things due are
'&*(,le,
'&*(,le, they be o the *,e
i&),
i&), and also o the *,e >(,lit i 
>(,lit i  against the assignor, unless the assignor
the latter has been stated&
(3) 5hat the t )et* e )(e& )(e&
() 5hat they be li>(i),te) and
)e,&),le&
)e,&),le&
() 5hat o"er neither o them there be
any retention or contro"ersy,
commenced by third persons and
communicated in due time to the
debtor. (119)
Art. 1280. otwithstanding
1280. otwithstanding the pro"isions
o the preceding article, the guarantor may
set up compensation as regards what the
creditor may owe the principal debtor.
(1194)
Art. 1281. ompensation may be total or
partial. >hen the two debts are o the same
amount, there is a total compensation. (n)
Art. 1282. 5he
1282. 5he parties
parties may agree
agree upon the
compensation o debts which are not yet
due. (n)
Art. 1283. I
1283. I one o the parties to a suit
o"er an obligation has a claim or damages
against the other, the ormer may set it o
by pro"ing his right to said damages and
the amount thereo. (n)
Art. 1284. >hen
1284. >hen one or both debts are
rescissible or "oidable, they may be
compensated against each other beore
they are +udicially rescinded or a"oided. (n)
Art. 128. 5he
128. 5he debtor who has consented
to the assignment o rights made by a
creditor in a"or o a third person, cannot
set up against the assignee the
compensation which would pertain to him
was noti*ed by the debtor at the time he
ga"e his consent, that he reser"ed his right
to the compensation.
compensation.
I the creditor communicated the cession to
him but the debtor did not consent thereto,
the latter may set up the compensation
compensation o
debts pre"ious to the cession, but not o
subsequent
subsequent ones.
I the assignment is made without the
2nowledge o the debtor, he may set up the
10
compensation o all credits prior to the
same and also later ones until he had
2nowledge
2nowledge o the assignment. (1196a)
Art. 1286. ompensation
1286. ompensation ta2es place by
operation o law, e"en though the debts
may be payable at dierent places, but
there shall be an indemnity or e$penses o
e$change or transportation to the place o
payment. (1199a)
Art. 1287.
1287. ompensation shall not be
proper when one o the debts arises rom a
depositum or rom the obligations o a
depositary or o a bailee in commodatum.
either can compensation be set up against
a creditor who has a claim or support due
by gratuitous title, without pre+udice to the
pro"isions o paragraph ' o /rticle 301.
(1'00a)
Art. 1288. either shall there be
compensation i one o the debts consists in
ci"il liability arising rom a penal oense. (n)
Art. 1289. I
1289. I a person should ha"e against
him se"eral debts which are susceptible o
compensation, the rules on the application
o payments shall apply to the order o the
compensation. (1'01)
Art. 1290. >hen all the requisites
mentioned in /rticle 1'49 are present,
compensation ta2es eect by operation o
law, and e$tinguishes both debts to the
concurrent amount, e"en though the
creditors and debtors are not aware o the
compensation. (1'0'a)
SECTION 6. - NOVATION
Art. 1291.
1291. 7bligations may be MODIFIED  by%
(1) hanging their ob+ect
ob+ect or principal
conditions&
SUBSTITUTION
(') ubstituting the person o the
debtor&
(3) ubrogating a third person in the
rights
o the creditor. (1'03)
REQS/ OF NOVATION <  PAEN 
Art. 1292.
1292. In order that an obligation may
be e$tinguished by another which substitute
the same, it is imperati"e that it be so
declared in unequi"ocal terms, or that the
old and the new obligations be on e"ery
point incompatible with each other.  (1'0)
SUBSTITUTION < E;PROMISION : DELEGACION
Art. 1293. o"ation
1293. o"ation which consists in
substituting a new debtor in the place o the
original one, may be made e"en without the
2nowledge or against the will o the latter,
but not without the consent o the creditor.
#ayment by the new debtor gi"es him the
rights mentioned in /rticles 1'3 and 1'34.
(1'0a)
INSOLVENCY E;PROMISION
Art. 1294.
1294. I the substitution is without the
2nowledge or against the will o the debtor,
the new debtors insol"ency or non-
ul*llment o the obligations shall not gi"e
rise to any liability on the part o the original
debtor. (n)
INSOLVENCY DELEGACION
Art. 129.
129. 5he insol"ency o the new
debtor, who has been proposed by the
original debtor and accepted by the
creditor, shall not re"i"e the action o the
latter against the original obligor, e$cept
when said insol"ency was already e$isting
and o public 2nowledge, or 2nown to the
debtor, when the delegated his debt.
(1'0a)
EFFECT ON ACCESSORY OBLI
Art. 1296. >hen
1296. >hen the principal obligation is
e$tinguished in consequence o a no"ation,
accessory obligations may subsist only
insoar as they may bene*t third persons
who did not gi"e their consent. (1'04)
EFFECT IF NEW OBLI VOID
Art. 1297. I
1297. I the new obligation is "oid, the
original one shall subsist, unless the parties
intended that the ormer relation should be
e$tinguished
e$tinguished in any e"ent. (n)
EFFECT IF OLD OBLI VOID 9 VOIDABLE
Art. 1298. 5he
1298. 5he no"ation is "oid i the
original obligation was "oid, e$cept when
annulment may be claimed only by the
debtor or when rati*cation "alidates acts
which are "oidable. (1'06a)
Art. 1299. I
1299. I the original obligation was
sub+ect to a suspensi"e or resolutory
condition, the new obligation shall be under
the same condition, unless it is otherwise
stipulated. (n)
.INDS OF SUBROGATION < LEGAL : CONVENTIONAL
Art. 1300. ubrogation
1300. ubrogation o a third person in
the rights o the creditor is either legal or
con"entional. 5he ormer is not presumed,
e$cept in cases e$pressly mentioned in this
ode& the latter must be clearly established
in order that it may ta2e eect. (1'09a)
Art. 1301. on"entional
1301. on"entional subrogation o a
third person requires the consent o the
original parties and o the third person. (n)
Art. 1302.
1302. It is presumed that there is legal
subrogation% WHEN SUBROGATION PRODUCED FR PAYMENT
(1) >hen a creditor
creditor pays another
creditor
who is preerred, e"en
11
 WITHOUT the debtors 2nowledge&
(') >hen a third
third person,
NOT interested in the obligation,
pays with the e$press or tacit
appro"al o the debtor&
(3) >hen,
>hen, e"en WITHOUT the 2nowledge
o
the debtor, a person interested in
the ul*llment o the obligation
pays, without pre+udice to the
eects o conusion as to the
latters share. (1'10a)
LEGAL SUBROGATION 0 EFFECT
Art. 1303. ubrogation transers to the
persons subrogated the credit with all the
rights thereto appertaining, either against
the debtor or against third person, be they
guarantors or possessors o mortgages,
sub+ect to stipulation in a con"entional
subrogation. (1'1'a)
PARTIAL SUBROGATION 0 EFFECT
Art. 1304. /
1304. / creditor, to whom partial
payment has been made, may e$ercise his
right or the remainder, and he shall be
preerred to the person who has been
subrogated in his place in "irtue o the
partial payment o the same credit. (1'13)
Tit"$ II/ 0 CONTRACTS
CHAPTER 1 CHARACTERISTIC
GENERAL PROVISIONS
Art. 130.
130. / contract is a
$$ti&3 (> i&'s
%$tw$$& tw( !$,s(&s whereby
(&$ %i&'s his$">
 with ,$s!$ct t( th$ (th$, transmissible by their nature, or by
t( 3i=$ s($thi&3  or stipulation or by pro"ision o law. 5he heir is
t( ,$&'$, s($ s$,=ic$ . (1'a) not liable beyond the "alue o the property
F,$$'( 9 A5t(&(# (> Wi""
he recei"ed rom the decedent.
Art. 1306. 5he
1306. 5he contracting parties may TION POUR AUTRI < Sti! i&>a=(, (> 2 ,' P$,s(&
STIPULATION
STIPULA
establish such stipulations, clauses, terms I a contract should contain some stipulation
and conditions as they may deem in a"or o a third person, he may demand
con"enient, pro"ided they are not contrary its ul*llment pro"ided he communicated his
to law, morals, good customs, public order, acceptance to the obligor beore its
or public policy. re"ocation. / mere incidental bene*t or
interest o a person is not suAcient. 5he
Art. 1307. INNOMINATE CONTRACTS shall be contracting parties must ha"e clearly and
regulated by the stipulations o the parties, deliberately conerred a a"or upon a third
by the pro"isions o 5itles I and II o this person.
Boo2, by the rules go"erning the most
2,' PERSONS BOUND BY CONTRACTS CREATING REAL RIGHTS
analogous nominate contracts, and by the
customs o the place. (n) Art. 1312. In CONTRACTS CREATING REAL RIGHTS,
third persons who come into possession o
PRIN OF MUTUALITY OF CONTRACTS M5t5a"it# the ob+ect o the contract are bound
Art. 1308.
1308. 5he contract must bind both thereby, sub+ect to the pro"isions o the
contracting parties& its "alidity or !ortgage ;aw and the ;and :egistration
compliance cannot be let to the will o one ;aws. (n)
CREDITORS RYT TO IMPUGN CONTRACTS < DEFRAUD THEM
o them. (1'a)
M5t5a"it# Art. 1313. reditors
1313. reditors are protected in cases
Art. 1309. 5he
1309. 5he determination
determination o o the o contracts intended to deraud them. (n)
2,' PERSON LIABILITY RESPONSIBLE FOR BREACH < Q5asi D$"ict
perormance may be let to a .rd person,
whose decision shall not be binding 5&ti" it has Art. 1314. /ny
1314. /ny third person who induces
another to "iolate his contract shall be liable
%$$& a'$ &(w& t( %(th c(&t,acti&3 !a,ti$s . (n)
DETERMINATION INEQUITABLE EFFECT M5t5a"it# or damages to the other contracting party.
Art. 1310. 5he
1310. 5he determination shall not be (n)
obligatory i it is e"idently inequitable. In GEN RULE P$,>$ct$' %# MERE CONSENT O%"i3at(,i&$ss:
O%"i3at(,i&$ss: C(&s$&s5a
C(&s$&s5a"it#
"it#
such case, the courts shall decide what is Art. 131. ontracts are PERFECTED  by MERE
equitable under the circumstances. (n) CONSENT, and rom that moment the parties
are bound not only to the ul*llment o what
has been e$pressly stipulated but also to all
the consequences which, according to their
GEN
RULE nature, may be in 2eeping with good aith,
PERSONS AFFECTED BY A CONTRACT R$"ati=it#
Art. 1311. ontracts ta2e eect only usage and law.
;PN
E;CEPTION (> 121
 1211 )8+
between the  parties, their assigns and heirs,
1218 1212 Art. 1316. REAL CONTRACTS, such as deposit,
121- 1166 e$cept in case where the rights and
pledge and ommodatum, are &(t !$,>$ct$'
obligations arising rom the contract are not
until  the
 the '$"i=$,# (> th$ (%4$ct o the (%"i3ati(&. (n)
1'
UNAUTHORIED CONTRACTS UNENFOREABLE
 5he contract,
contract, in such a case, is presumed
presumed to
Art. 1317. o one may contract in the ha"e been entered into in the place where
name o another  with(5t %$i&3 a5th(,i$' %# th$ the oer was made.
"att$,, or unless he has %# "aw a ,i3ht t( ,$!,$s$&t
hi. Art. 1320. /n
1320. /n acceptance may be express or
implied . (n)
/ contract entered into in the name o
another by one who has no authority or Art. 1321. 5he
1321. 5he person
person ma2ing the oer
legal representation, or who has acted may *$ the time, place, and manner o
beyond his powers, shall be UNENFORCEABLE, acceptance, all o which must be complied
unless it is RATIFIED , expressly  or
 or impliedly , by the with. (n)
person on whose behal it has been
e$ecuted, %$>(,$ it is ,$=($' %# th$ (th$, c(&t,acti&3 Art. 1322. /n
1322. /n oer made through an agent
!a,t#. is accepted rom the time acceptance is
communicated
communicated to him. (n)
CHAPTER 2
ESSENTIAL REQUISITES OF
REQUISITES  OF CONTRACTS Art. 1323.
1323. /n oer becomes ineecti"e
GENERAL PROVISIONS upon the death, ci"il interdiction, insanity,
or insol"ency o either party beore
Art. 1318. 5here
1318. 5here is no contract
contract unless the
the acceptance
acceptance is con"eyed. (n)
ollowing requisites concur%
(1) CONSENT o the contracting parties& Art. 1324. >hen
1324. >hen the oerer has allowed
(') OBJECT certain which is the the oeree a certain period to accept, the
sub/ect matter  o
 o the contract& oer may be withdrawn at any time beore
(3) CAUSE o the obligation which is acceptance by communicating such
established.  (1'1)
withdrawal, e$cept when the option is
ounded upon a consideration, as something
SECTION 1. - CONSENT paid or promised. (n)
Art. 1319. onsent
1319. onsent is maniested by the Art. 132. ?nless it appears otherwise,
$$ti&3 (> th$ (>>$,  and business
the acc$!ta&c$ 5!(& th$ thi&3 N the ca5s$ ad"ertisements o things or sale are not
which are to constitute the contract. de*nite oers, but mere in"itations to ma2e
OFFER must be certain and an oer. (n)
ACCEPTANCE absolute.
QUALIFIED ACCEPTANCE constitutes a counter0 Art. 1326. /d"ertisements
1326. /d"ertisements or bidders are
offer . simply in"itations to ma2e proposals, and
THEORY OF COGNITION 9 INFORMATION
ACCEPTANCE MADE BY LETTER OR TELEGRAM the ad"ertiser is not bound to accept the
does NOT bind the oerer except  highest or lowest bidder, unless the
rom the time it came to his knowledge. contrary appears. (n)
Art. 1327. 5he
1327. 5he ollowing
ollowing cannot
cannot gi"e
consent to a contract%
(1) ?nemancipated
?nemancipated minors&
minors&
(') Insane or demented
demented persons, and
dea-mutes who do not 2now how
to write. (1'3a)
Art. 1328. ontracts
1328. ontracts entered into during a
lucid inter"al are "alid. ontracts agreed to
in a state o drun2enness or during a
hypnotic spell are "oidable. (n)
Art. 1329. 5he
1329. 5he incapacity declared in
/rticle 13'4 is sub+ect to the modi*cations
determined by law, and is understood to be
without pre+udice to special disquali*cations
established
established in the laws. (1')
Art. 1330. /
1330. / contract where consent is
gi"en through mista2e, "iolence,
intimidation, undue inMuence, or raud is
"oidable. (1'a)
Art. 1331. In
1331. In order that mista2e may
in"alidate consent, it should reer to the
substance o the thing which is the ob+ect o 
the contract, or to those conditions which
ha"e principally mo"ed one or both parties
to enter into the contract.
!ista2e as to the identity or quali*cations o 
one o the parties will "itiate consent only
when such identity or quali*cations ha"e
been the principal cause o the contract.
/ simple mista2e o account shall gi"e rise
to its correction. (1'a)
Art. 1332. >hen
1332. >hen one o the parties is
unable to read, or i the contract is in a
13
language not understood by him, and
mista2e or raud is alleged, the person
enorcing the contract must show that the
terms thereo ha"e been ully e$plained to
the ormer. (n)
Art. 1333. 5here
1333. 5here is no mista2e
mista2e i the party
party
alleging it 2new the doubt, contingency or
ris2 aecting the ob+ect o the contract. (n)
Art. 1334. !utual
1334. !utual error as to the legal
eect o an agreement when the real
purpose o the parties is rustrated, may
"itiate consent. (n)
Art. 133. 5here
133. 5here is "iolence when in order
to wrest consent, serious or irresistible orce
is employed.
 5here is intimidation
intimidation when one o the
contracting parties is compelled by a
reasonable and well-grounded ear o an
imminent and gra"e e"il upon his person or
property, or upon the person or property o
his spouse, descendants or ascendants, to
gi"e his consent.
 5o
 5o determine
determine the degree
degree o intimidation,
intimidation, the
age, se$ and condition o the person shall
be borne in mind.
/ threat to enorce ones claim through
competent authority, i the claim is +ust or
legal, does not "itiate consent. (1'4a)
Art. 1336. Fiolence or intimidation shall
annul the obligation, although it may ha"e
been employed by a third person who did
not ta2e part in the contract. (1'6)
Art. 1337. 5here
1337. 5here is undue inMuence when a
person ta2es improper ad"antage o his
power o"er the will o another, depri"ing the
latter o a reasonable reedom o choice.
 5he ollowing
ollowing circumstances
circumstances shall be
considered% the con*dential, amily, spiritual
and other relations between the parties, or
the act that the person alleged to ha"e
been unduly inMuenced was suering rom
mental wea2ness, or was ignorant or in
*nancial distress. (n)
Art. 1338. 5here
1338. 5here is
is raud when,
when, through
through
insidious words or machinations o one o
the contracting parties, the other is induced
to enter into a contract which, without
them, he would not ha"e agreed to. (1'9)
Art. 1339. <ailure to disclose acts, when
there is a duty to re"eal them, as when the
parties are bound by con*dential relations,
constitutes raud. (n)
Art. 1340. 5he
1340. 5he usual e$aggerations
e$aggerations in
trade, when the other party had an
opportunity to 2now the acts, are not in
themsel"es raudulent.
raudulent. (n)
Art. 1341.
1341. / mere e$pression o an opinion
does not signiy raud, unless made by an
e$pert and the other party has relied on the
ormers special 2nowledge. (n)
Art. 1342. !isrepresentation
1342. !isrepresentation by a third
person does not "itiate consent, unless such
misrepresentation has created substantial
mista2e and the same is mutual. (n)
Art. 1343. !isrepresentation made in good
aith is not raudulent
raudulent but may constitute
error.
error. (n)
( n)
Art. 1344. In
1344. In order that raud may ma2e a
contract "oidable, it should be serious and
should not ha"e been employed by both
contracting parties.
Incidental raud only obliges the person
employing it to pay damages. (1'40)
Art. 134. imulation
134. imulation o a contract may be
absolute or relati"e. 5he ormer ta2es place
when the parties do not intend to be bound
at all& the latter, when the parties conceal
their true agreement. (n)
Art. 1346. /n
1346. /n absolutely simulated or
*ctitious contract is "oid. / relati"e
simulation, when it does not pre+udice a
third person and is not intended or any
purpose contrary to law, morals, good
customs, public order or public policy binds
the parties to their real agreement. (n)
OOOOOOOOOOOOOO5I;
@G:GOOOOOOOOOOOOOOOO
SECTION 2. - OBJECT o$ *on!a)!'
Art. 1347. /ll
1347. /ll things which are not outside
the commerce o men, including uture
things, may be the ob+ect o a contract. /ll
rights which are not intransmissible may
also be the ob+ect o contracts.
o contract may be entered into upon
uture inheritance e$cept in cases e$pressly
authori=ed by law.
/ll ser"ices which are not contrary to law,
morals, good customs, public order or public
policy may li2ewise be the ob+ect o a
contract. (1'41a)
1
Art. 1348. Impossible
1348. Impossible things or ser"ices
cannot be the ob+ect o contracts.
contracts. (1'4')
Art. 1349. 5he
1349. 5he ob+ect o e"ery contract
must be determinate as to its 2ind. 5he act
that the quantity is not determinate shall
not be an obstacle to the e$istence o the
contract, pro"ided it is possible to
determine the same, without the need o a
new contract between the parties. (1'43)
SECTION 3. - CAUSE o$ *on!a)!'
Art. 130. In onerous contracts the cause
is understood to be, or each contracting
party, the prestation or promise o a thing or
ser"ice by the other& in remuneratory ones,
the ser"ice or bene*t which is remunerated&
and in contracts o pure bene*cence, the
mere liberality o the beneactor. (1'4)
Art. 131. 5he
131. 5he particular moti"es o the
parties in entering into a contract are
dierent rom the cause thereo. (n)
Art. 132. ontracts without cause, or with
unlawul cause, produce no eect whate"er.
 5he cause
cause is unlawul
unlawul i it is contrary
contrary to law,
law,
morals, good customs, public order or public
policy. (1'4a)
Art. 133. 5he
133. 5he statement
statement o a alse cause
in contracts shall render them "oid, i it
should not be pro"ed that they were
ounded upon another cause which is true
and lawul. (1'4)
Art. 134. /lthough
134. /lthough the cause is not stated
in the contract, it is presumed that it e$ists
and is lawul, unless the debtor pro"es the
contrary. (1'44)
Art. 13. G$cept in cases speci*ed by law,
lesion or inadequacy o cause shall not
in"alidate a contract, unless there has been
raud, mista2e or undue inMuence. (n)
CHAPTER 2
FORM OF CONTRACTS
Art. 136. ontracts
136. ontracts shall be obligatory, in
whate"er orm they may ha"e been entered
into, pro"ided all the essential requisites or
their "alidity are present. @owe"er, when
the law requires that a contract be in some
orm in order that it may be "alid or
enorceable, or that a contract be pro"ed in
a certain way, that requirement is absolute
and indispensable. In such cases, the right
o the parties stated in the ollowing article
cannot be e$ercised. (1'46a)
Art. 137. I
137. I the law requires a document
or other special orm, as in the acts and
contracts enumerated in the ollowing
article, the contracting parties may compel
each other to obser"e that orm, once the
contract has been perected. 5his right may
be e$ercised simultaneously with the action
upon the contract. (1'49a)
Art. 138. 5he
138. 5he ollowing must appear in a
public document%
(1) /cts and contracts
contracts which ha"e or
their ob+ect the creation,
transmission, modi*cation or
e$tinguishment o real rights o"er
immo"able property& sales o real
property or o an interest therein a
go"erned by /rticles 103, o. ',
and 10&
(') 5he cession, repudiatio
repudiation
n or
renunciation o hereditary rights
or o those o the con+ugal
partnership o gains&
(3) 5he power to administer property,
property,
or any other power which has or
its ob+ect an act appearing or
which should appear in a public
document, or should pre+udice a
third person&
() 5he cession o actions
actions or rights
proceeding rom an act appearing
in a public document.
/ll other contracts where the amount
in"ol"ed e$ceeds *"e hundred pesos must
appear in writing, e"en a pri"ate one. But
sales o goods, chattels or things in action
are go"erned by /rticles, 103, o. ' and
10. (1'60a)
CHAPTER 4
REFORMATION OF INSTRUMENTS &
Art. 139. >hen, there ha"ing been a
meeting o the minds o the parties to a
contract, their true intention is not
e$pressed in the instrument purporting to
embody the agreement, by reason o
mista2e, raud, inequitable conduct or
accident, one o the parties may as2 or the
reormation o the instrument to the end
that such true intention may be e$pressed.
1
I mista2e, raud, inequitable conduct, or
accident has pre"ented a meeting o the
minds o the parties, the proper remedy is
not reormation o the instrument but
annulment o the contract.
Art. 1360. 5he
1360. 5he principles o the general law
on the reormation o instruments are
hereby adopted insoar as they are not in
conMict with the pro"isions o this ode.
Art. 1361. >hen
1361. >hen a mutual mista2e o the
parties causes the ailure o the instrument
to disclose their real agreement, said
instrument may be reormed.
Art. 1362. I
1362. I one party was mista2en and
the other acted raudulently or inequitably
in such a way that the instrument
instrument does not
show their true intention, the ormer may
as2 or the reormation o the instrument.
Art. 1363. >hen
1363. >hen one party was mista2en
and the other 2new or belie"ed that the
instrument did not state their real
agreement, but concealed that act rom the
ormer, the instrument may be reormed.
Art. 1364. >hen
1364. >hen through the ignorance,
lac2 o s2ill, negligence or bad aith on the
part o the person drating the instrument or
o the cler2 or typist, the instrument does
not e$press the true intention o the parties,
the courts may order that the instrument be
reormed.
Art. 136. I
136. I two parties agree upon the
mortgage or pledge o real or personal
property,
property, but the instrument states that the
property is sold absolutely or with a right o
repurchase, reormation o the instrument is
proper.
Art. 1366. 5here
1366. 5here shall be no reormation in
the ollowing cases%
(1) imple donations
donations inter "i"os
wherein no condition is imposed&
(') >ills&
(3) >hen the real agreement is "oid.
Art. 1367. >hen
1367. >hen one o the parties has
brought an action to enorce the instrument,
he cannot subsequently as2 or its
reormation.
Art. 1368. :eormation
1368. :eormation may be ordered at
the instance o either party or his
successors in interest, i the mista2e was
mutual& otherwise, upon petition o the
in+ured party, or his heirs and assigns.
Art. 1369. 5he
1369. 5he procedure or the
reormation o instrument shall be go"erned
by rules o court to be promulgated by the
upreme ourt.
CHAPTER 
INTERPRETATION OF
INTERPRETATION OF CONTRACTS
Art. 1370. I
1370. I the terms o a contract are
clear and lea"e no doubt upon the intention
o the contracting parties, the literal
meaning o its stipulations shall control.
I the words appear to be contrary to the
e"ident intention o the parties, the latter
shall pre"ail o"er the ormer. (1'61)
Art. 1371. In
1371. In order to +udge the intention o 
the contracting parties, their
contemporaneous and subsequent acts shall
be principally considered. (1'6')
Art. 1372. @owe"er
1372. @owe"er general the terms o a
contract may be, they shall not be
understood to comprehend things that are
distinct and cases that are dierent rom
those upon which the parties intended to
agree. (1'63)
Art. 1373. I
1373. I some stipulation o any
contract should admit o se"eral meanings,
it shall be understood as bearing that
import which is most adequate to render it
eectual. (1'6)
Art. 1374. 5he
1374. 5he "arious stipulations o a
contract shall be interpreted together,
attributing to the doubtul ones that sense
which may result rom all o them ta2en
 +ointly. (1'6)
Art. 137. >ords
137. >ords which may ha"e dierent
signi*cations shall be understood in that
which is most in 2eeping with the nature
and ob+ect o the contract. (1'6)
Art. 1376. 5he
1376. 5he usage or custom o the
place shall be borne in mind in the
interpretation o the ambiguities o a
contract, and shall *ll the omission o
stipulations which are ordinarily established.
(1'64)
Art. 1377. 5he
1377. 5he interpretation o obscure
words or stipulations in a contract shall not
a"or the party who caused the obscurity.
(1'66)
Art. 1378. >hen
1378. >hen it is absolutely impossible
to settle doubts by the rules established in
1
the preceding articles, and the doubts reer
to incidental circumstances o a gratuitous
contract, the least transmission o rights
and interests shall pre"ail. I the contract is
onerous, the doubt shall be settled in a"or
o the greatest reciprocity o interests.
I the doubts are cast upon the principal
ob+ect o the contract in such a way that it
cannot be 2nown what may ha"e been the
intention or will o the parties, the contract
shall be null and "oid. (1'69)
Art. 1379. 5he
1379. 5he principles o interpretation
stated in :ule 1'3 o the :ules o ourt shall
li2ewise be obser"ed in the construction o
contracts.
contracts. (n)
CHAPTER 6
RESCISSI:LE CONTRACTS
Art. 1380. ontracts
1380. ontracts "alidly agreed upon
may be rescinded in the cases established
by law. (1'90)
Art. 1381. 5he
1381. 5he ollowing contracts are
rescissible%
(1) 5hose which are
are entered into by
guardians whene"er the wards
whom they represent suer lesion
by more than one-ourth o the
"alue o the things which are the
ob+ect thereo&
(') 5hose agreed
agreed upon in
representation o absentees, i the
latter suer the lesion stated in
the preceding number&
(3) 5hose underta2en
underta2en in raud
raud o
creditors when the latter cannot in
any other manner collect the
claims due them&
() 5hose which reer
reer to things under
litigation i they ha"e been
entered into by the deendant
without the 2nowledge and
appro"al o the litigants or o
competent +udicial authority&
() /ll other contracts
contracts specially
declared by law to be sub+ect to
rescission. (1'91a)
Art. 1382. #ayments
1382. #ayments made in a state o
insol"ency or obligations to whose
ul*llment the debtor could not be
compelled at the time they were eected,
are also rescissible. (1'9')
Art. 1383. 5he
1383. 5he action or rescission is
subsidiary& it cannot be instituted e$cept
when the party suering damage has no
other legal means to obtain reparation or
the same. (1'9)
Art. 1384. :escission
1384. :escission shall be only to the
e$tent necessary to co"er the damages
caused. (n)
Art. 138. :escission
138. :escission creates the obligation
to return the things which were the ob+ect o  shall indemniy the latter or damages
the contract, together with their ruits, and
the price with its interest& consequently, it
can be carried out only when he who
demands rescission can return whate"er he
may be obliged to restore.
either shall rescission ta2e place when the
things which are the ob+ect o the contract
are legally in the possession o third persons
who did not act in bad aith.
In this case, indemnity or damages may be
demanded rom the person causing the loss.
(1'9)
Art. 1386. :escission
1386. :escission reerred to in os. 1
and ' o /rticle 1361 shall not ta2e place
with respect to contracts appro"ed by the
courts. (1'9a)
Art. 1387. /ll
1387. /ll contracts by "irtue o which
the debtor alienates property by gratuitous
title are presumed to ha"e been entered
into in raud o creditors, when the donor
did not reser"e suAcient property to pay all
debts contracted beore the donation.
/lienations by onerous title are also
presumed raudulent when made by
persons against whom some +udgment has
been issued. 5he decision or attachment
need not reer to the property alienated,
and need not ha"e been obtained by the
party see2ing the rescission.
In addition to these presumptions, the
design to deraud creditors may be pro"ed
in any other manner recogni=ed by the law
o e"idence. (1'94a)
Art. 1388. >hoe"er
1388. >hoe"er acquires in bad aith
the things alienated in raud o creditors,
suered by them on account o the
alienation, whene"er, due to any cause, it
should be impossible or him to return them.
I there are two or more alienations, the *rst
acquirer shall be liable *rst, and so on
successi"ely. (1'96a)
14
Art. 1389. 5he
1389. 5he action to claim rescission
must be commenced within our years.
<or persons under guardianship and or
absentees, the period o our years shall not
begin until the termination o the ormers
incapacity, or until the domicile o the latter
is 2nown. (1'99)
CHAPTER 7
VOI#A:LE CONTRACTS
Art. 1390. 5he
1390. 5he ollowing contracts are
"oidable or annullable, e"en though there
may ha"e been no damage to the
contracting
contracting parties%
(1) 5hose where
where one o the parties is
incapable o gi"ing consent to a
contract&
(') 5hose where
where the consent is
"itiated by mista2e, "iolence,
intimidation, undue inMuence or
raud.
 5hese contracts
contracts are
are binding, unless they are
are
annulled by a proper action in court. 5hey
are susceptible o rati*cation. (n)
Art. 1391. 5he
1391. 5he action or annulment shall
be brought within our years.
 5his period
period shall begin%
In cases o intimidation, "iolence or
undue inMuence, rom the time the
deect o the consent ceases.
In case o mista2e or raud, rom the
time o the disco"ery o the same.
/nd when the action reers to contracts
entered into by minors or other
incapacitated persons, rom the time the
guardianship ceases. (1301a)
Art. 1392. :ati*cation
1392. :ati*cation e$tinguishes the
action to annul a "oidable contract. (1309a)
Art. 1393. :ati*cation
1393. :ati*cation may be eected
e$pressly or tacitly. It is understood that
there is a tacit rati*cation i, with 2nowledge
o the reason which renders the contract
"oidable and such reason ha"ing ceased,
the person who has a right to in"o2e it
should e$ecute an act which necessarily
implies an intention to wai"e his right.
(1311a)
Art. 1394. :ati*cation
1394. :ati*cation may be eected by
the guardian o the incapacitated person.
(n)
Art. 139. :ati*cation
139. :ati*cation does not require the
conormity o the contracting party who has
no right to bring the action or annulment.
(131')
Art. 1396. :ati*cation
1396. :ati*cation cleanses the
contract rom all its deects rom the
moment it was constituted. (1313)
Art. 1397. 5he
1397. 5he action or the annulment o
contracts may be instituted by all who are
thereby obliged principally or subsidiarily.
@owe"er, persons who are capable cannot
allege the incapacity o those with whom
they contracted& nor can those who e$erted
intimidation, "iolence, or undue inMuence,
or employed raud, or caused mista2e base
their action upon these Maws o the
contract. (130'a)
Art. 1398. /n
1398. /n obligation ha"ing been
annulled, the contracting parties shall
restore to each other the things which ha"e
been the sub+ect matter o the contract,
with their ruits, and the price with its
interest, e$cept in cases pro"ided by law.
In obligations to render ser"ice, the "alue
thereo shall be the basis or damages.
(1303a)
Art. 1399. >hen the deect o the contract
consists in the incapacity o one o the
parties, the incapacitated person is not
obliged to ma2e any restitution e$cept
insoar as he has been bene*ted by the
thing or price recei"ed by him. (130)
Art. 1400. >hene"er
1400. >hene"er the person obliged by
the decree o annulment to return the thing
can not do so because it has been lost
through his ault, he shall return the ruits
recei"ed and the "alue o the thing at the
time o the loss, with interest rom the same
date. (1304a)
Art. 1401. 5he
1401. 5he action or annulment o
contracts shall be e$tinguished when the
thing which is the ob+ect thereo is lost
through the raud or ault o the person who
has a right to institute the proceedings.
I the right o action is based upon the
incapacity o any one o the contracting
parties, the loss o the thing shall not be an
obstacle to the success o the action, unless
said loss too2 place through the raud or
ault o the plainti. (131a)
Art. 1402. /s
1402. /s long as one o the
contracting parties does not restore what in
"irtue o the decree o annulment he is
16
bound to return, the other cannot be
compelled to comply with what is
incumbent upon him. (1306)
CHAPTER 8
UNENFORCEABLE CONTRACTS &
Art. 1403. 5he
1403. 5he ollowing
ollowing contracts
contracts are
are
unenorceable, unless they are rati*ed%
(1) 5hose entered
entered into in the name o
another person by one who has
been gi"en no authority or legal
representation, or who has acted
beyond his powers&
(') 5hose that do not
not comply with the
tatute o <rauds as set orth in
this number. In the ollowing cases
an agreement hereater made
shall be unenorceable by action,
unless the same, or some note or
memorandum, thereo, be in
writing, and subscribed by the
party charged, or by his agent&
e"idence, thereore, o the
agreement cannot be recei"ed
without the writing, or a
secondary e"idence o its
contents%
(a) /n agreement
agreement that byby its
terms is not to be
perormed within a year
rom the ma2ing thereo&
(b) / special promise
promise to answer
or the debt, deault, or
miscarriage o another&
(c) /n agreement
agreement made
made in
consideration o marriage,
other than a mutual
promise to marry&
(d) /n agreement
agreement or the sale
o goods, chattels or things
in action, at a price not less
than *"e hundred pesos,
unless the buyer accept and
recei"e part o such goods
and chattels, or the
e"idences, or some o
them, o such things in
action or pay at the time
some part o the purchase
money& but when a sale is
made by auction and entry
is made by the auctioneer
in his sales boo2, at the
time o the sale, o the
amount and 2ind o
property sold, terms o sale,
price, names o the
purchasers and person on
whose account the sale is
made, it is a suAcient
memorandum&
(e) /n agreement
agreement o the leasing
leasing
or a longer period than one
year, or or the sale o real
property or o an interest
therein&
() / represen
representati
tation
on as to the
credit o a third person.
(3) 5hose where
where both parties are
incapable o gi"ing consent to a
contract.
Art. 1404. ?nauthori=ed
1404. ?nauthori=ed contracts are
go"erned by /rticle 1314 and the principles
o agency in 5itle E o this Boo2.
Art. 140. ontracts
140. ontracts inringing the tatute
o <rauds, reerred to in o. ' o /rticle
103, are rati*ed by the ailure to ob+ect to
the presentation o oral e"idence to pro"e
the same, or by the acceptance o bene*t
under them.
Art. 1406. >hen
1406. >hen a contract is enorceable
under the tatute o <rauds, and a public
document is necessary or its registration in
the :egistry o Ceeds, the parties may a"ail
themsel"es o the right under /rticle 134.
Art. 1407. In
1407. In a contract where both parties
are incapable o gi"ing consent, e$press or
implied rati*cation by the parent, or
guardian, as the case may be, o one o the
contracting
contracting parties shall gi"e the contract
the same eect as i only one o them were
incapacitated.
I rati*cation is made by the parents or
guardians, as the case may be, o both
contracting parties, the contract shall be
"alidated rom the inception.
Art. 1408. ?nenorceable contracts cannot
be assailed by third persons.
CHAPTER 9
VOI# AN# INE?ISTENT CONTRACTS
Art. 1409. 5he
1409. 5he ollowing contracts are
ine$istent and "oid rom the beginning%
(1) 5hose whose cause,
cause, ob+ect or
purpose is contrary to law, morals,
good customs, public order or
public policy&
(') 5hose which are
are absolutely
simulated or *ctitious&
19
 (3) 5hose whose cause
cause or ob+ect did constitute a criminal oense, the ollowing Art. 1416. >hen
1416. >hen the agreement is not
not e$ist at the time o the rules shall be obser"ed% illegal per se but is merely prohibited, and
transaction& (1) >hen the ault is on the part o the prohibition by the law is designated or
() 5hose whose ob+ect
ob+ect is outside the both contracting parties, neither may the protection o the plainti, he may, i
commerce o men& reco"er what he has gi"en by "irtue public policy is thereby enhanced, reco"er
() 5hose which contemplate
contemplate an o the contract, or demand the what he has paid or deli"ered.
impossible ser"ice& perormance o the others
() 5hose where
where the intention o the underta2ing& Art. 1417. >hen
1417. >hen the price o any article or
parties relati"e to the principal (') >hen only one o the contracting commodity is determined by statute, or by
ob+ect o the contract cannot be parties is at ault, he cannot reco"er authority o law, any person paying any
ascertained& what he has gi"en by reason o the amount in e$cess o the ma$imum price
(4) 5hose e$pressly
e$pressly prohibited
prohibited or contract, or as2 or the ul*llment o allowed may reco"er such e$cess.
declared "oid by law. what has been promised him. 5he
 5hese contracts
contracts cannot
cannot be rati*ed.
rati*ed. either
either other, who is not at ault, may Art. 1418. >hen
1418. >hen the law *$es, or
can the right to set up the deense o demand the return o what he has authori=es the *$ing o the ma$imum
illegality be wai"ed. gi"en without any obligation to number o hours o labor, and a contract is
comply his promise. (130) entered into whereby a laborer underta2es
Art. 1410. 5he
1410. 5he action or deense or the to wor2 longer than the ma$imum thus
declaration o the ine$istence o a contract Art. 1413. Interest
1413. Interest paid in e$cess o the *$ed, he may demand additional
does not prescribe. interest allowed by the usury laws may be compensation or ser"ice rendered beyond
reco"ered by the debtor, with interest the time limit.
Art. 1411. >hen
1411. >hen the nullity proceeds rom thereon rom the date o the payment.
the illegality o the cause or ob+ect o the Art. 1419. >hen
1419. >hen the law sets, or authori=es
contract, and the act constitutes a criminal Art. 1414. >hen
1414. >hen money is paid or property the setting o a minimum wage or laborers,
oense, both parties being in pari delicto, deli"ered or an illegal purpose, the contract and a contract is agreed upon by which a
they shall ha"e no action against each may be repudiated by one o the parties laborer accepts a lower wage, he shall be
other, and both shall be prosecuted. beore the purpose has been accomplished, entitled to reco"er the de*ciency.
!oreo"er, the pro"isions o the #enal ode or beore any damage has been caused to a
relati"e to the disposal o eects or third person. In such case, the courts may, i  Art. 1420. In
1420. In case o a di"isible contract, i
instruments o a crime shall be applicable to the public interest will thus be subser"ed, the illegal terms can be separated rom the
the things or the price o the contract. allow the party repudiating the contract to legal ones, the latter may be enorced.
 5his rule shall be applicable
applicable when only
only one reco"er the money or property.
o the parties is guilty& but the innocent one Art. 1421. 5he
1421. 5he deense
deense o illegality
illegality o
may claim what he has gi"en, and shall not Art. 141. >here
141. >here one o the parties to an contract is not a"ailable to third persons
be bound to comply with his promise. illegal contract is incapable o gi"ing whose interests are not directly aected.
(130) consent, the courts may, i the interest o
 +ustice so demands
demands allow
allow reco"ery
reco"ery o money
money Art. 1422. /
1422. / contract which is the direct
Art. 1412. I
1412. I the act in which the unlawul or property deli"ered by the incapacitated result o a pre"ious illegal contract, is also
or orbidden cause consists does not person. "oid and ine$istent.

'0
Title III. - NAT%RAL O:LIGATIONS
Art. 1423. 7bligations
1423. 7bligations are ci"il or natural.
i"il obligations gi"e a right o action to
compel their perormance. atural
obligations, not being based on positi"e law
but on equity and natural law, do not grant
a right o action to enorce their
perormance, but ater "oluntary ul*llment
by the obligor, they authori=e the retention
o what has been deli"ered or rendered by
reason thereo. ome natural obligations are
set orth in the ollowing articles.
Art. 1424. >hen
1424. >hen a right to sue upon a ci"il
obligation has lapsed by e$tincti"e
prescription, the obligor who "oluntarily
perorms the contract cannot reco"er what
he has deli"ered or the "alue o the ser"ice
he has rendered.
Art. 142. >hen
142. >hen without the 2nowledge or
against the will o the debtor, a third person
pays a debt which the obligor is not legally
bound to pay because the action thereon
has prescribed, but the debtor later
"oluntarily reimburses the third person, the
obligor cannot reco"er what he has paid.
Art. 1426. >hen
1426. >hen a minor between eighteen
and twenty-one years o age who has
entered into a contract without the consent
o the parent or guardian, ater the
annulment o the contract "oluntarily
returns the whole thing or price recei"ed,
notwithstanding the act the he has not
been bene*ted thereby, there is no right to
demand the thing or price thus returned.
Art. 1427. >hen
1427. >hen a minor between eighteen
and twenty-one years o age, who has
entered into a contract without the consent
o the parent or guardian, "oluntarily pays a
sum o money or deli"ers a ungible thing in
ul*llment o the obligation, there shall be
no right to reco"er the same rom the
obligee who has spent or consumed it in
good aith. (110/)
Art. 1428. >hen,
1428. >hen, ater an action to enorce
a ci"il obligation has ailed the deendant
"oluntarily perorms the obligation, he
cannot demand the return o what he has
deli"ered or the payment o the "alue o the
ser"ice he has rendered.
Art. 1429. >hen
1429. >hen a testate or intestate heir
"oluntarily pays a debt o the decedent
e$ceeding the "alue o the property which
he recei"ed by will or by the law o intestacy
rom the estate o the deceased, the
payment is "alid and cannot be rescinded
by the payer.
Art. 1430. >hen
1430. >hen a will is declared "oid
because it has not been e$ecuted in
accordance with the ormalities required by
law, but one o the intestate heirs, ater the
settlement o the debts o the deceased,
pays a legacy in compliance with a clause in
the deecti"e will, the payment is eecti"e
and irre"ocable.
Title IV. - ESTOPPEL &
Art. 1431. 5hroug
1431. 5hrough h estoppel an admission
admission
or representation is rendered conclusi"e
upon the person ma2ing it, and cannot be
denied or dispro"ed as against the person
relying thereon.
Art. 1432. 5he
1432. 5he principles o estoppel are
hereby adopted insoar as they are not in
conMict with the pro"isions o this ode, the
ode o ommerce, the :ules o ourt and
special laws.
Art. 1433. Gstoppel
1433. Gstoppel may be in pais or
pais or by
deed.
Art. 1434. >hen
1434. >hen a person who is not the
owner o a thing sells or alienates and
deli"ers it, and later the seller or grantor
acquires title thereto, such title passes by
operation o law to the buyer or grantee.
Art. 143. I
143. I a person in representation o
another sells or alienates a thing, the ormer
cannot subsequently set up his own title as
against the buyer or grantee.
Art. 1436. /
1436. / lessee or a bailee is estopped
rom asserting title to the thing leased or
recei"ed, as against the lessor or bailor.
Art. 1437. >hen
1437. >hen in a contract between
third persons concerning immo"able
property, one o them is misled by a person
with respect to the ownership or real right
o"er the real estate, the latter is precluded
rom asserting his legal title or interest
therein, pro"ided all these requisites are
present%
(1) 5here must be raudulent
representation or wrongul
concealment o acts 2nown to the
party estopped&
'1
 (') 5he party precluded must intend
that the other should act upon the
acts as misrepresented&
(3) 5he party misled must ha"e been
unaware o the true acts& and
() 5he party derauded must ha"e
acted in accordance with the
misrepresentation.

Art. 1438. 7ne
1438. 7ne who has allowed another to
assume apparent ownership o personal
property or the purpose o ma2ing any
transer o it, cannot, i he recei"ed the sum
or which a pledge has been constituted, set
up his own title to deeat the pledge o the
property, made by the other to a pledgee
who recei"ed the same in good aith and or
"alue.

Art. 1439. Gstoppel
1439. Gstoppel is eecti"e only as
between the parties thereto or their
successors in interest.

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