Obligations Contracts Partnerships CivilCodePhil

7/28/2019 Obligations Contracts Partnerships CivilCodePhil

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Informations on Civil Code Of The PhilippinesWebsite for complete copy of Civil Code of The Phils:

http://www.thecorpusjuris.com/laws/statutes/republicacts/78-republicacts1949/1636-ra-no-386-civil-code-of-the-philippines.html

Extracted Content:

Title I Obligations

Chapter 1 General Provisions

Chapter 2 Nature and Effect Of Obligations

Chapter 3 Different Kinds of Obligations

Chapter 4 Etinguish!ents Of Obligations

Title II Contracts

Chapter 1 General Provisions

Chapter 2 Essential "e#uisites Of Contracts

General Provisions

Chapter 3 $or!s Of Contracts

Chapter 4 "efor!ations Of %he &nstru!ents

Chapter ' &nterpretations Of %he Contracts

Title IX Partnerships

Chapter 1( General Provisions

Chapter 2( Obligations Of %he Partners

BOOK IV. OBLIGATIONS AND CONTRACTS

Title. I. OBLIGATIONS

Chapter 1. GENE!" PO#I$ION$

Art. 1156.An obligation is a juridical necessity to give, to do or not to do. (n)

Art. 1157.Obligations arise from:

(1) Law;

() !ontracts;

(") #uasi$contracts;

(%) Acts or omissions &unis'ed by law; and

() #uasi$delicts. (1*+a)
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Art. 1158.Obligations derived from law are not &resumed. Only t'ose e&ressly determined in t'is !ode or

in s&ecial laws are demandable, and s'all be regulated by t'e &rece&ts of t'e law w'ic' establis'es t'em;

and as to w'at 'as not been foreseen, by t'e &rovisions of t'is -oo. (1+)

Art. 1159.Obligations arising from contracts 'ave t'e force of law between t'e contracting &arties and

s'ould be com&lied wit' in good fait'. (1+1a)

Art. 1160.Obligations derived from /uasi$contracts s'all be subject to t'e &rovisions of !'a&ter 1, 0itle

233, of t'is -oo. (n)

Art. 1161.!ivil obligations arising from criminal offenses s'all be governed by t'e &enal laws, subject to t'e

&rovisions of Article 144, and of t'e &ertinent &rovisions of !'a&ter , 5reliminary 0itle, on 6uman

7elations, and of 0itle 2333 of t'is -oo, regulating damages. (1+a)

Art. 1162. Obligations derived from /uasi$delicts s'all be governed by t'e &rovisions of !'a&ter , 0itle

233 of t'is -oo, and by s&ecial laws. (1+"a)

Chapter %. N!T&E !N' E((ECT O( O)"IG!TION$

Art. 1163.8very &erson obliged to give somet'ing is also obliged to tae care of it wit' t'e &ro&er diligence

of a good fat'er of a family, unless t'e law or t'e sti&ulation of t'e &arties re/uires anot'er standard of care.

(1+%a)

Art. 1164.0'e creditor 'as a rig't to t'e fruits of t'e t'ing from t'e time t'e obligation to deliver it arises.

6owever, 'e s'all ac/uire no real rig't over it until t'e same 'as been delivered to 'im. (1+)

Art. 1165.9'en w'at is to be delivered is a determinate t'ing, t'e creditor, in addition to t'e rig't granted

'im by Article 114, may com&el t'e debtor to mae t'e delivery.

3f t'e t'ing is indeterminate or generic, 'e may as t'at t'e obligation be com&lied wit' at t'e e&ense of

t'e debtor.

3f t'e obligor delays, or 'as &romised to deliver t'e same t'ing to two or more &ersons w'o do not 'ave

t'e same interest, 'e s'all be res&onsible for any fortuitous event until 'e 'as effected t'e delivery. (1+)

Art. 1166.0'e obligation to give a determinate t'ing includes t'at of delivering all its accessions and

accessories, even t'oug' t'ey may not 'ave been mentioned. (1+4a)

Art. 1167.3f a &erson obliged to do somet'ing fails to do it, t'e same s'all be eecuted at 'is cost.

0'is same rule s'all be observed if 'e does it in contravention of t'e tenor of t'e obligation. urt'ermore,

it may be decreed t'at w'at 'as been &oorly done be undone. (1+*)

Art. 1168.9'en t'e obligation consists in not doing, and t'e obligor does w'at 'as been forbidden 'im, it

s'all also be undone at 'is e&ense. (1++a)


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Art. 1169.0'ose obliged to deliver or to do somet'ing incur in delay from t'e time t'e obligee judicially or

etrajudicially demands from t'em t'e fulfillment of t'eir obligation.

6owever, t'e demand by t'e creditor s'all not be necessary in order t'at delay may eist:

(1) 9'en t'e obligation or t'e law e&ressly so declare; or

() 9'en from t'e nature and t'e circumstances of t'e obligation it a&&ears t'at t'e designation of

t'e time w'en t'e t'ing is to be delivered or t'e service is to be rendered was a controlling motive for

t'e establis'ment of t'e contract; or

(") 9'en demand would be useless, as w'en t'e obligor 'as rendered it beyond 'is &ower to

&erform.

3n reci&rocal obligations, neit'er &arty incurs in delay if t'e ot'er does not com&ly or is not ready to

com&ly in a &ro&er manner wit' w'at is incumbent u&on 'im. rom t'e moment one of t'e &arties fulfills

'is obligation, delay by t'e ot'er begins. (11a)

Art. 1170.0'ose w'o in t'e &erformance of t'eir obligations are guilty of fraud, negligence, or delay, and

t'ose w'o in any manner contravene t'e tenor t'ereof, are liable for damages. (111)

Art. 1171.7es&onsibility arising from fraud is demandable in all obligations. Any waiver of an action for

future fraud is void. (11a)

Art. 1172.7es&onsibility arising from negligence in t'e &erformance of every ind of obligation is also

demandable, but suc' liability may be regulated by t'e courts, according to t'e circumstances. (11")

Art. 1173.0'e fault or negligence of t'e obligor consists in t'e omission of t'at diligence w'ic' is re/uired

by t'e nature of t'e obligation and corres&onds wit' t'e circumstances of t'e &ersons, of t'e time and of t'e

&lace. 9'en negligence s'ows bad fait', t'e &rovisions of Articles 1141 and 1, &aragra&' , s'all a&&ly.

3f t'e law or contract does not state t'e diligence w'ic' is to be observed in t'e &erformance, t'at w'ic' is

e&ected of a good fat'er of a family s'all be re/uired. (11%a)

Art. 1174.8ce&t in cases e&ressly s&ecified by t'e law, or w'en it is ot'erwise declared by sti&ulation, or

w'en t'e nature of t'e obligation re/uires t'e assum&tion of ris, no &erson s'all be res&onsible for t'ose

events w'ic' could not be foreseen, or w'ic', t'oug' foreseen, were inevitable. (11a)

Art. 1175.


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Art. 1177.0'e creditors, after 'aving &ursued t'e &ro&erty in &ossession of t'e debtor to satisfy t'eir

claims, may eercise all t'e rig'ts and bring all t'e actions of t'e latter for t'e same &ur&ose, save t'ose

w'ic' are in'erent in 'is &erson; t'ey may also im&ugn t'e acts w'ic' t'e debtor may 'ave done to defraud

t'em. (1111)

Art. 1178.=ubject to t'e laws, all rig'ts ac/uired in virtue of an obligation are transmissible, if t'ere 'asbeen no sti&ulation to t'e contrary. (111)

Chapter *. 'I((EENT +IN'$ O( O)"IG!TION$

Section 1. Pure and Conditional Obligations

Art. 1179.8very obligation w'ose &erformance does not de&end u&on a future or uncertain event, or u&on a

&ast event unnown to t'e &arties, is demandable at once.

8very obligation w'ic' contains a resolutory condition s'all also be demandable, wit'out &rejudice to t'e

effects of t'e 'a&&ening of t'e event. (111")

Art. 1180.9'en t'e debtor binds 'imself to &ay w'en 'is means &ermit 'im to do so, t'e obligation s'all

be deemed to be one wit' a &eriod, subject to t'e &rovisions of Article 11+4. (n)

Art. 1181.3n conditional obligations, t'e ac/uisition of rig'ts, as well as t'e etinguis'ment or loss of t'ose

already ac/uired, s'all de&end u&on t'e 'a&&ening of t'e event w'ic' constitutes t'e condition. (111%)

Art. 1182.9'en t'e fulfillment of t'e condition de&ends u&on t'e sole will of t'e debtor, t'e conditional

obligation s'all be void. 3f it de&ends u&on c'ance or u&on t'e will of a t'ird &erson, t'e obligation s'all tae

effect in conformity wit' t'e &rovisions of t'is !ode. (111)

Art. 1183.3m&ossible conditions, t'ose contrary to good customs or &ublic &olicy and t'ose &ro'ibited by

law s'all annul t'e obligation w'ic' de&ends u&on t'em. 3f t'e obligation is divisible, t'at &art t'ereof

w'ic' is not affected by t'e im&ossible or unlawful condition s'all be valid.

0'e condition not to do an im&ossible t'ing s'all be considered as not 'aving been agreed u&on. (111a)

Art. 1184.0'e condition t'at some event 'a&&en at a determinate time s'all etinguis' t'e obligation as

soon as t'e time e&ires or if it 'as become indubitable t'at t'e event will not tae &lace. (1114)

Art. 1185.0'e condition t'at some event will not 'a&&en at a determinate time s'all render t'e obligation

effective from t'e moment t'e time indicated 'as ela&sed, or if it 'as become evident t'at t'e event cannot

occur.

3f no time 'as been fied, t'e condition s'all be deemed fulfilled at suc' time as may 'ave &robably been

contem&lated, bearing in mind t'e nature of t'e obligation. (111*)

Art. 1186.0'e condition s'all be deemed fulfilled w'en t'e obligor voluntarily &revents its fulfillment.

(111+)


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Art. 1187.0'e effects of a conditional obligation to give, once t'e condition 'as been fulfilled, s'all retroact

to t'e day of t'e constitution of t'e obligation. >evert'eless, w'en t'e obligation im&oses reci&rocal

&restations u&on t'e &arties, t'e fruits and interests during t'e &endency of t'e condition s'all be deemed to

'ave been mutually com&ensated. 3f t'e obligation is unilateral, t'e debtor s'all a&&ro&riate t'e fruits and

interests received, unless from t'e nature and circumstances of t'e obligation it s'ould be inferred t'at t'e

intention of t'e &erson constituting t'e same was different.

3n obligations to do and not to do, t'e courts s'all determine, in eac' case, t'e retroactive effect of t'e

condition t'at 'as been com&lied wit'. (11)

Art. 1188.0'e creditor may, before t'e fulfillment of t'e condition, bring t'e a&&ro&riate actions for t'e

&reservation of 'is rig't.

0'e debtor may recover w'at during t'e same time 'e 'as &aid by mistae in case of a sus&ensive

condition. (111a)

Art. 1189.9'en t'e conditions 'ave been im&osed wit' t'e intention of sus&ending t'e efficacy of an

obligation to give, t'e following rules s'all be observed in case of t'e im&rovement, loss or deterioration of

t'e t'ing during t'e &endency of t'e condition:

(1) 3f t'e t'ing is lost wit'out t'e fault of t'e debtor, t'e obligation s'all be etinguis'ed;

() 3f t'e t'ing is lost t'roug' t'e fault of t'e debtor, 'e s'all be obliged to &ay damages; it is

understood t'at t'e t'ing is lost w'en it &eris'es, or goes out of commerce, or disa&&ears in suc' a

way t'at its eistence is unnown or it cannot be recovered;

(") 9'en t'e t'ing deteriorates wit'out t'e fault of t'e debtor, t'e im&airment is to be borne by t'e

creditor;

(%) 3f it deteriorates t'roug' t'e fault of t'e debtor, t'e creditor may c'oose between t'e rescission of

t'e obligation and its fulfillment, wit' indemnity for damages in eit'er case;

() 3f t'e t'ing is im&roved by its nature, or by time, t'e im&rovement s'all inure to t'e benefit of t'e

creditor;

() 3f it is im&roved at t'e e&ense of t'e debtor, 'e s'all 'ave no ot'er rig't t'an t'at granted to t'e

usufructuary. (11)

Art. 1190.9'en t'e conditions 'ave for t'eir &ur&ose t'e etinguis'ment of an obligation to give, t'e

&arties, u&on t'e fulfillment of said conditions, s'all return to eac' ot'er w'at t'ey 'ave received.

3n case of t'e loss, deterioration or im&rovement of t'e t'ing, t'e &rovisions w'ic', wit' res&ect to t'e

debtor, are laid down in t'e &receding article s'all be a&&lied to t'e &arty w'o is bound to return.


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As for t'e obligations to do and not to do, t'e &rovisions of t'e second &aragra&' of Article 11*4 s'all be

observed as regards t'e effect of t'e etinguis'ment of t'e obligation. (11")

Art. 1191.0'e &ower to rescind obligations is im&lied in reci&rocal ones, in case one of t'e obligors s'ould

not com&ly wit' w'at is incumbent u&on 'im.

0'e injured &arty may c'oose between t'e fulfillment and t'e rescission of t'e obligation, wit' t'e

&ayment of damages in eit'er case. 6e may also see rescission, even after 'e 'as c'osen fulfillment, if t'e

latter s'ould become im&ossible.

0'e court s'all decree t'e rescission claimed, unless t'ere be just cause aut'ori?ing t'e fiing of a &eriod.

0'is is understood to be wit'out &rejudice to t'e rig'ts of t'ird &ersons w'o 'ave ac/uired t'e t'ing, in

accordance wit' Articles 1"* and 1"** and t'e @ortgage Law. (11%)

Art. 1192.3n case bot' &arties 'ave committed a breac' of t'e obligation, t'e liability of t'e first infractor

s'all be e/uitably tem&ered by t'e courts. 3f it cannot be determined w'ic' of t'e &arties first violated t'e

contract, t'e same s'all be deemed etinguis'ed, and eac' s'all bear 'is own damages. (n)

Section 2. Obligations with a Period

Art. 1193.Obligations for w'ose fulfillment a day certain 'as been fied, s'all be demandable only w'en

t'at day comes.

Obligations wit' a resolutory &eriod tae effect at once, but terminate u&on arrival of t'e day certain.

A day certain is understood to be t'at w'ic' must necessarily come, alt'oug' it may not be nown w'en.

3f t'e uncertainty consists in w'et'er t'e day will come or not, t'e obligation is conditional, and it s'all be

regulated by t'e rules of t'e &receding =ection. (11a)

Art. 1194.3n case of loss, deterioration or im&rovement of t'e t'ing before t'e arrival of t'e day certain, t'e

rules in Article 11*+ s'all be observed. (n)

Art. 1195.Anyt'ing &aid or delivered before t'e arrival of t'e &eriod, t'e obligor being unaware of t'e

&eriod or believing t'at t'e obligation 'as become due and demandable, may be recovered, wit' t'e fruits

and interests. (11a)

Art. 1196.9'enever in an obligation a &eriod is designated, it is &resumed to 'ave been establis'ed for t'e

benefit of bot' t'e creditor and t'e debtor, unless from t'e tenor of t'e same or ot'er circumstances it

s'ould a&&ear t'at t'e &eriod 'as been establis'ed in favor of one or of t'e ot'er. (114)

Art. 1197. 3f t'e obligation does not fi a &eriod, but from its nature and t'e circumstances it can be

inferred t'at a &eriod was intended, t'e courts may fi t'e duration t'ereof.

0'e courts s'all also fi t'e duration of t'e &eriod w'en it de&ends u&on t'e will of t'e debtor.


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3n every case, t'e courts s'all determine suc' &eriod as may under t'e circumstances 'ave been &robably

contem&lated by t'e &arties. Once fied by t'e courts, t'e &eriod cannot be c'anged by t'em. (11*a)

Art. 1198.0'e debtor s'all lose every rig't to mae use of t'e &eriod:

(1) 9'en after t'e obligation 'as been contracted, 'e becomes insolvent, unless 'e gives a guaranty

or security for t'e debt;

() 9'en 'e does not furnis' to t'e creditor t'e guaranties or securities w'ic' 'e 'as &romised;

(") 9'en by 'is own acts 'e 'as im&aired said guaranties or securities after t'eir establis'ment, and

w'en t'roug' a fortuitous event t'ey disa&&ear, unless 'e immediately gives new ones e/ually

satisfactory;

(%) 9'en t'e debtor violates any undertaing, in consideration of w'ic' t'e creditor agreed to t'e

&eriod;

() 9'en t'e debtor attem&ts to abscond. (11+a)

Section 3. Alternative Obligations

Art. 1199.A &erson alternatively bound by different &restations s'all com&letely &erform one of t'em.

0'e creditor cannot be com&elled to receive &art of one and &art of t'e ot'er undertaing. (11"1)

Art. 1200.0'e rig't of c'oice belongs to t'e debtor, unless it 'as been e&ressly granted to t'e creditor.

0'e debtor s'all 'ave no rig't to c'oose t'ose &restations w'ic' are im&ossible, unlawful or w'ic' could

not 'ave been t'e object of t'e obligation. (11")

Art. 1201.0'e c'oice s'all &roduce no effect ece&t from t'e time it 'as been communicated. (11"")

Art. 1202.0'e debtor s'all lose t'e rig't of c'oice w'en among t'e &restations w'ereby 'e is alternatively

bound, only one is &racticable. (11"%)

Art. 1203.3f t'roug' t'e creditors acts t'e debtor cannot mae a c'oice according to t'e terms of t'e

obligation, t'e latter may rescind t'e contract wit' damages. (n)

Art. 1204.0'e creditor s'all 'ave a rig't to indemnity for damages w'en, t'roug' t'e fault of t'e debtor,

all t'e t'ings w'ic' are alternatively t'e object of t'e obligation 'ave been lost, or t'e com&liance of t'e

obligation 'as become im&ossible.

0'e indemnity s'all be fied taing as a basis t'e value of t'e last t'ing w'ic' disa&&eared, or t'at of t'e

service w'ic' last became im&ossible.

Bamages ot'er t'an t'e value of t'e last t'ing or service may also be awarded. (11"a)


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Art. 1205. 9'en t'e c'oice 'as been e&ressly given to t'e creditor, t'e obligation s'all cease to be

alternative from t'e day w'en t'e selection 'as been communicated to t'e debtor.


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Art. 1211.=olidarity may eist alt'oug' t'e creditors and t'e debtors may not be bound in t'e same

manner and by t'e same &eriods and conditions. (11%)

Art. 1212.8ac' one of t'e solidary creditors may do w'atever may be useful to t'e ot'ers, but not anyt'ing

w'ic' may be &rejudicial to t'e latter. (11%1a)

Art. 1213.A solidary creditor cannot assign 'is rig'ts wit'out t'e consent of t'e ot'ers. (n)

Art. 1214.0'e debtor may &ay any one of t'e solidary creditors; but if any demand, judicial or etrajudicial,

'as been made by one of t'em, &ayment s'ould be made to 'im. (11%a)

Art. 1215. >ovation, com&ensation, confusion or remission of t'e debt, made by any of t'e solidary

creditors or wit' any of t'e solidary debtors, s'all etinguis' t'e obligation, wit'out &rejudice to t'e

&rovisions of Article 11+.

0'e creditor w'o may 'ave eecuted any of t'ese acts, as well as 'e w'o collects t'e debt, s'all be liable to

t'e ot'ers for t'e s'are in t'e obligation corres&onding to t'em. (11%")

Art. 1216.0'e creditor may &roceed against any one of t'e solidary debtors or some or all of t'em

simultaneously. 0'e demand made against one of t'em s'all not be an obstacle to t'ose w'ic' may

subse/uently be directed against t'e ot'ers, so long as t'e debt 'as not been fully collected. (11%%a)

Art. 1217.5ayment made by one of t'e solidary debtors etinguis'es t'e obligation. 3f two or more solidary

debtors offer to &ay, t'e creditor may c'oose w'ic' offer to acce&t.

6e w'o made t'e &ayment may claim from 'is co$debtors only t'e s'are w'ic' corres&onds to eac', wit'

t'e interest for t'e &ayment already made. 3f t'e &ayment is made before t'e debt is due, no interest for t'e

intervening &eriod may be demanded.

9'en one of t'e solidary debtors cannot, because of 'is insolvency, reimburse 'is s'are to t'e debtor

&aying t'e obligation, suc' s'are s'all be borne by all 'is co$debtors, in &ro&ortion to t'e debt of eac'.

(11%a)

Art. 1218.5ayment by a solidary debtor s'all not entitle 'im to reimbursement from 'is co$debtors if suc'

&ayment is made after t'e obligation 'as &rescribed or become illegal. (n)

Art. 1219.0'e remission made by t'e creditor of t'e s'are w'ic' affects one of t'e solidary debtors does

not release t'e latter from 'is res&onsibility towards t'e co$debtors, in case t'e debt 'ad been totally &aid byanyone of t'em before t'e remission was effected. (11%a)

Art. 1220.0'e remission of t'e w'ole obligation, obtained by one of t'e solidary debtors, does not entitle

'im to reimbursement from 'is co$debtors. (n)

Art. 1221.3f t'e t'ing 'as been lost or if t'e &restation 'as become im&ossible wit'out t'e fault of t'e

solidary debtors, t'e obligation s'all be etinguis'ed.


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3f t'ere was fault on t'e &art of any one of t'em, all s'all be res&onsible to t'e creditor, for t'e &rice and

t'e &ayment of damages and interest, wit'out &rejudice to t'eir action against t'e guilty or negligent debtor.

3f t'roug' a fortuitous event, t'e t'ing is lost or t'e &erformance 'as become im&ossible after one of t'e

solidary debtors 'as incurred in delay t'roug' t'e judicial or etrajudicial demand u&on 'im by t'e creditor,

t'e &rovisions of t'e &receding &aragra&' s'all a&&ly. (11%4a)

Art. 1222. A solidary debtor may, in actions filed by t'e creditor, avail 'imself of all defenses w'ic' are

derived from t'e nature of t'e obligation and of t'ose w'ic' are &ersonal to 'im, or &ertain to 'is own s'are.

9it' res&ect to t'ose w'ic' &ersonally belong to t'e ot'ers, 'e may avail 'imself t'ereof only as regards t'at

&art of t'e debt for w'ic' t'e latter are res&onsible. (11%*a)

Section 6. Obligations with a Penal Clause

Art. 1226.3n obligations wit' a &enal clause, t'e &enalty s'all substitute t'e indemnity for damages and t'e

&ayment of interests in case of noncom&liance, if t'ere is no sti&ulation to t'e contrary. >evert'eless,

damages s'all be &aid if t'e obligor refuses to &ay t'e &enalty or is guilty of fraud in t'e fulfillment of t'eobligation.

0'e &enalty may be enforced only w'en it is demandable in accordance wit' t'e &rovisions of t'is !ode.

(11a)

Art. 1227.0'e debtor cannot eem&t 'imself from t'e &erformance of t'e obligation by &aying t'e &enalty,

save in t'e case w'ere t'is rig't 'as been e&ressly reserved for 'im. >eit'er can t'e creditor demand t'e

fulfillment of t'e obligation and t'e satisfaction of t'e &enalty at t'e same time, unless t'is rig't 'as been

clearly granted 'im. 6owever, if after t'e creditor 'as decided to re/uire t'e fulfillment of t'e obligation, t'e

&erformance t'ereof s'ould become im&ossible wit'out 'is fault, t'e &enalty may be enforced. (11"a)

Art. 1228.5roof of actual damages suffered by t'e creditor is not necessary in order t'at t'e &enalty may be

demanded. (n)

Art. 1229.0'e judge s'all e/uitably reduce t'e &enalty w'en t'e &rinci&al obligation 'as been &artly or

irregularly com&lied wit' by t'e debtor. 8ven if t'ere 'as been no &erformance, t'e &enalty may also be

reduced by t'e courts if it is ini/uitous or unconscionable. (11%a)

Art. 1230.0'e nullity of t'e &enal clause does not carry wit' it t'at of t'e &rinci&al obligation.

0'e nullity of t'e &rinci&al obligation carries wit' it t'at of t'e &enal clause. (11)

Chapter ,. EXTING&I$-ENT O( O)"IG!TION$

!"!#A$ P#O%&S&O"S

Art. 1231.Obligations are etinguis'ed:

(1) -y &ayment or &erformance:


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() -y t'e loss of t'e t'ing due:

(") -y t'e condonation or remission of t'e debt;

(%) -y t'e confusion or merger of t'e rig'ts of creditor and debtor;

() -y com&ensation;

() -y novation.

Ot'er causes of etinguis'ment of obligations, suc' as annulment, rescission, fulfillment of a resolutory

condition, and &rescri&tion, are governed elsew'ere in t'is !ode. (11a)

Section 1. Pay'ent or Per(or'ance

Art. 1232.5ayment means not only t'e delivery of money but also t'e &erformance, in any ot'er manner,

of an obligation. (n)

Art. 1233. A debt s'all not be understood to 'ave been &aid unless t'e t'ing or service in w'ic' t'e

obligation consists 'as been com&letely delivered or rendered, as t'e case may be. (114)

Art. 1234.3f t'e obligation 'as been substantially &erformed in good fait', t'e obligor may recover as

t'oug' t'ere 'ad been a strict and com&lete fulfillment, less damages suffered by t'e obligee. (n)

Art. 1235.9'en t'e obligee acce&ts t'e &erformance, nowing its incom&leteness or irregularity, and

wit'out e&ressing any &rotest or objection, t'e obligation is deemed fully com&lied wit'. (n)

Art. 1236.0'e creditor is not bound to acce&t &ayment or &erformance by a t'ird &erson w'o 'as no

interest in t'e fulfillment of t'e obligation, unless t'ere is a sti&ulation to t'e contrary.

9'oever &ays for anot'er may demand from t'e debtor w'at 'e 'as &aid, ece&t t'at if 'e &aid wit'out

t'e nowledge or against t'e will of t'e debtor, 'e can recover only insofar as t'e &ayment 'as been

beneficial to t'e debtor. (11*a)

Art. 1237.9'oever &ays on be'alf of t'e debtor wit'out t'e nowledge or against t'e will of t'e latter,

cannot com&el t'e creditor to subrogate 'im in 'is rig'ts, suc' as t'ose arising from a mortgage, guaranty,

or &enalty. (11+a)

Art. 1238.5ayment made by a t'ird &erson w'o does not intend to be reimbursed by t'e debtor is deemedto be a donation, w'ic' re/uires t'e debtors consent. -ut t'e &ayment is in any case valid as to t'e creditor

w'o 'as acce&ted it. (n)

Art. 1239.3n obligations to give, &ayment made by one w'o does not 'ave t'e free dis&osal of t'e t'ing due

and ca&acity to alienate it s'all not be valid, wit'out &rejudice to t'e &rovisions of Article 1%4 under t'e

0itle on CNatural Obligations.D (11a)


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Art. 1240.5ayment s'all be made to t'e &erson in w'ose favor t'e obligation 'as been constituted, or 'is

successor in interest, or any &erson aut'ori?ed to receive it. (11a)

Art. 1241.5ayment to a &erson w'o is inca&acitated to administer 'is &ro&erty s'all be valid if 'e 'as e&t

t'e t'ing delivered, or insofar as t'e &ayment 'as been beneficial to 'im.

5ayment made to a t'ird &erson s'all also be valid insofar as it 'as redounded to t'e benefit of t'e

creditor. =uc' benefit to t'e creditor need not be &roved in t'e following cases:

(1) 3f after t'e &ayment, t'e t'ird &erson ac/uires t'e creditors rig'ts;

() 3f t'e creditor ratifies t'e &ayment to t'e t'ird &erson;

(") 3f by t'e creditors conduct, t'e debtor 'as been led to believe t'at t'e t'ird &erson 'ad aut'ority

to receive t'e &ayment. (11"a)

Art. 1242.5ayment made in good fait' to any &erson in &ossession of t'e credit s'all release t'e debtor.(11%)

Art. 1243.5ayment made to t'e creditor by t'e debtor after t'e latter 'as been judicially ordered to retain

t'e debt s'all not be valid. (11)

Art. 1244.0'e debtor of a t'ing cannot com&el t'e creditor to receive a different one, alt'oug' t'e latter

may be of t'e same value as, or more valuable t'an t'at w'ic' is due.

3n obligations to do or not to do, an act or forbearance cannot be substituted by anot'er act or forbearance

against t'e obligees will. (11a)

Art. 1245.Bation in &ayment, w'ereby &ro&erty is alienated to t'e creditor in satisfaction of a debt in

money, s'all be governed by t'e law of sales. (n)

Art. 1246.9'en t'e obligation consists in t'e delivery of an indeterminate or generic t'ing, w'ose /uality

and circumstances 'ave not been stated, t'e creditor cannot demand a t'ing of su&erior /uality. >eit'er can

t'e debtor deliver a t'ing of inferior /uality. 0'e &ur&ose of t'e obligation and ot'er circumstances s'all be

taen into consideration. (114a)

Art. 1247.eit'er may t'e debtor be re/uired to mae &artial

&ayments.

6owever, w'en t'e debt is in &art li/uidated and in &art unli/uidated, t'e creditor may demand and t'e

debtor may effect t'e &ayment of t'e former wit'out waiting for t'e li/uidation of t'e latter. (11+a)


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Art. 1249.0'e &ayment of debts in money s'all be made in t'e currency sti&ulated, and if it is not &ossible

to deliver suc' currency, t'en in t'e currency w'ic' is legal tender in t'e 5'ili&&ines.

0'e delivery of &romissory notes &ayable to order, or bills of ec'ange or ot'er mercantile documents

s'all &roduce t'e effect of &ayment only w'en t'ey 'ave been cas'ed, or w'en t'roug' t'e fault of t'e

creditor t'ey 'ave been im&aired.

3n t'e meantime, t'e action derived from t'e original obligation s'all be 'eld in t'e abeyance. (114)

Art. 1250.3n case an etraordinary inflation or deflation of t'e currency sti&ulated s'ould su&ervene, t'e

value of t'e currency at t'e time of t'e establis'ment of t'e obligation s'all be t'e basis of &ayment, unless

t'ere is an agreement to t'e contrary. (n)

Art. 1251.5ayment s'all be made in t'e &lace designated in t'e obligation.

0'ere being no e&ress sti&ulation and if t'e undertaing is to deliver a determinate t'ing, t'e &ayment

s'all be made w'erever t'e t'ing mig't be at t'e moment t'e obligation was constituted.

3n any ot'er case t'e &lace of &ayment s'all be t'e domicile of t'e debtor.

3f t'e debtor c'anges 'is domicile in bad fait' or after 'e 'as incurred in delay, t'e additional e&enses

s'all be borne by 'im.

0'ese &rovisions are wit'out &rejudice to venue under t'e 7ules of !ourt. (1141a)

$&)$ECTION 1. !pplication of Pa/ments

Art. 1252.6e w'o 'as various debts of t'e same ind in favor of one and t'e same creditor, may declare at

t'e time of maing t'e &ayment, to w'ic' of t'em t'e same must be a&&lied.


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Art. 1255.0'e debtor may cede or assign 'is &ro&erty to 'is creditors in &ayment of 'is debts. 0'is cession,

unless t'ere is sti&ulation to t'e contrary, s'all only release t'e debtor from res&onsibility for t'e net

&roceeds of t'e t'ing assigned. 0'e agreements w'ic', on t'e effect of t'e cession, are made between t'e

debtor and 'is creditors s'all be governed by s&ecial laws. (114a)

$&)$ECTION *. Tender of Pa/ment and Consignation

Art. 1256.3f t'e creditor to w'om tender of &ayment 'as been made refuses wit'out just cause to acce&t it,

t'e debtor s'all be released from res&onsibility by t'e consignation of t'e t'ing or sum due.

!onsignation alone s'all &roduce t'e same effect in t'e following cases:

(1) 9'en t'e creditor is absent or unnown, or does not a&&ear at t'e &lace of &ayment;

() 9'en 'e is inca&acitated to receive t'e &ayment at t'e time it is due;

(") 9'en, wit'out just cause, 'e refuses to give a recei&t;

(%) 9'en two or more &ersons claim t'e same rig't to collect;

() 9'en t'e title of t'e obligation 'as been lost. (114a)

Art. 1257. 3n order t'at t'e consignation of t'e t'ing due may release t'e obligor, it must first be

announced to t'e &ersons interested in t'e fulfillment of t'e obligation.

0'e consignation s'all be ineffectual if it is not made strictly in consonance wit' t'e &rovisions w'ic'

regulate &ayment. (1144)

Art. 1258.!onsignation s'all be made by de&ositing t'e t'ings due at t'e dis&osal of judicial aut'ority,

before w'om t'e tender of &ayment s'all be &roved, in a &ro&er case, and t'e announcement of t'e

consignation in ot'er cases.

0'e consignation 'aving been made, t'e interested &arties s'all also be notified t'ereof. (114*)

Art. 1259.0'e e&enses of consignation, w'en &ro&erly made, s'all be c'arged against t'e creditor. (114*)

Art. 1260. Once t'e consignation 'as been duly made, t'e debtor may as t'e judge to order t'e

cancellation of t'e obligation.

-efore t'e creditor 'as acce&ted t'e consignation, or before a judicial declaration t'at t'e consignation

'as been &ro&erly made, t'e debtor may wit'draw t'e t'ing or t'e sum de&osited, allowing t'e obligation to

remain in force. (11*)

Art. 1261.3f, t'e consignation 'aving been made, t'e creditor s'ould aut'ori?e t'e debtor to wit'draw t'e

same, 'e s'all lose every &reference w'ic' 'e may 'ave over t'e t'ing. 0'e co$debtors, guarantors and

sureties s'all be released. (11*1a)


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Section 2. $oss o( the )hing *ue

Art. 1262. An obligation w'ic' consists in t'e delivery of a determinate t'ing s'all be etinguis'ed if it

s'ould be lost or destroyed wit'out t'e fault of t'e debtor, and before 'e 'as incurred in delay.

9'en by law or sti&ulation, t'e obligor is liable even for fortuitous events, t'e loss of t'e t'ing does not

etinguis' t'e obligation, and 'e s'all be res&onsible for damages. 0'e same rule a&&lies w'en t'e nature of

t'e obligation re/uires t'e assum&tion of ris. (11*a)

Art. 1263.3n an obligation to deliver a generic t'ing, t'e loss or destruction of anyt'ing of t'e same ind

does not etinguis' t'e obligation. (n)

Art. 1264.0'e courts s'all determine w'et'er, under t'e circumstances, t'e &artial loss of t'e object of t'e

obligation is so im&ortant as to etinguis' t'e obligation. (n)

Art. 1265.9'enever t'e t'ing is lost in t'e &ossession of t'e debtor, it s'all be &resumed t'at t'e loss was

due to 'is fault, unless t'ere is &roof to t'e contrary, and wit'out &rejudice to t'e &rovisions of article 11.0'is &resum&tion does not a&&ly in case of eart'/uae, flood, storm, or ot'er natural calamity. (11*"a)

Art. 1266.0'e debtor in obligations to do s'all also be released w'en t'e &restation becomes legally or

&'ysically im&ossible wit'out t'e fault of t'e obligor. (11*%a)

Art. 1267. 9'en t'e service 'as become so difficult as to be manifestly beyond t'e contem&lation of t'e

&arties, t'e obligor may also be released t'erefrom, in w'ole or in &art. (n)

Art. 1268.9'en t'e debt of a t'ing certain and determinate &roceeds from a criminal offense, t'e debtor

s'all not be eem&ted from t'e &ayment of its &rice, w'atever may be t'e cause for t'e loss, unless t'e t'ing

'aving been offered by 'im to t'e &erson w'o s'ould receive it, t'e latter refused wit'out justification to

acce&t it. (11*)

Art. 1269.0'e obligation 'aving been etinguis'ed by t'e loss of t'e t'ing, t'e creditor s'all 'ave all t'e

rig'ts of action w'ic' t'e debtor may 'ave against t'ird &ersons by reason of t'e loss. (11*)

Section 3. Condonation or #e'ission o( the *ebt

Art. 1270.!ondonation or remission is essentially gratuitous, and re/uires t'e acce&tance by t'e obligor. 3t

may be made e&ressly or im&liedly.

One and t'e ot'er ind s'all be subject to t'e rules w'ic' govern inofficious donations. 8&resscondonation s'all, furt'ermore, com&ly wit' t'e forms of donation. (11*4)

Art. 1271.0'e delivery of a &rivate document evidencing a credit, made voluntarily by t'e creditor to t'e

debtor, im&lies t'e renunciation of t'e action w'ic' t'e former 'ad against t'e latter.

3f in order to nullify t'is waiver it s'ould be claimed to be inofficious, t'e debtor and 'is 'eirs may u&'old

it by &roving t'at t'e delivery of t'e document was made in virtue of &ayment of t'e debt. (11**)


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Art. 1272.9'enever t'e &rivate document in w'ic' t'e debt a&&ears is found in t'e &ossession of t'e

debtor, it s'all be &resumed t'at t'e creditor delivered it voluntarily, unless t'e contrary is &roved. (11*+)

Art. 1273.0'e renunciation of t'e &rinci&al debt s'all etinguis' t'e accessory obligations; but t'e waiver

of t'e latter s'all leave t'e former in force. (11+)

Art. 1274.3t is &resumed t'at t'e accessory obligation of &ledge 'as been remitted w'en t'e t'ing &ledged,

after its delivery to t'e creditor, is found in t'e &ossession of t'e debtor, or of a t'ird &erson w'o owns t'e

t'ing. (11+1a)

Title II. C NTRACTS


Art. 1305.A contract is a meeting of minds between two &ersons w'ereby one binds 'imself, wit' res&ect

to t'e ot'er, to give somet'ing or to render some service. (1%a)

Art. 1306.0'e contracting &arties may establis' suc' sti&ulations, clauses, terms and conditions as t'ey

may deem convenient, &rovided t'ey are not contrary to law, morals, good customs, &ublic order, or &ublic

&olicy. (1a)

Art. 1307.3nnominate contracts s'all be regulated by t'e sti&ulations of t'e &arties, by t'e &rovisions of

0itles 3 and 33 of t'is -oo, by t'e rules governing t'e most analogous nominate contracts, and by t'e

customs of t'e &lace. (n)

Art. 1308.0'e contract must bind bot' contracting &arties; its validity or com&liance cannot be left to t'e

will of one of t'em. (1a)

Art. 1309.0'e determination of t'e &erformance may be left to a t'ird &erson, w'ose decision s'all not be

binding until it 'as been made nown to bot' contracting &arties. (n)

Art. 1310.0'e determination s'all not be obligatory if it is evidently ine/uitable. 3n suc' case, t'e courts

s'all decide w'at is e/uitable under t'e circumstances. (n)

Art. 1311.!ontracts tae effect only between t'e &arties, t'eir assigns and 'eirs, ece&t in case w'ere t'e

rig'ts and obligations arising from t'e contract are not transmissible by t'eir nature, or by sti&ulation or by

&rovision of law. 0'e 'eir is not liable beyond t'e value of t'e &ro&erty 'e received from t'e decedent.

3f a contract s'ould contain some sti&ulation in favor of a t'ird &erson, 'e may demand its fulfillment

&rovided 'e communicated 'is acce&tance to t'e obligor before its revocation. A mere incidental benefit or

interest of a &erson is not sufficient. 0'e contracting &arties must 'ave clearly and deliberately conferred a

favor u&on a t'ird &erson. (14a)


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Art. 1312.3n contracts creating real rig'ts, t'ird &ersons w'o come into &ossession of t'e object of t'e

contract are bound t'ereby, subject to t'e &rovisions of t'e @ortgage Law and t'e Land 7egistration Laws.

(n)

Art. 1313.!reditors are &rotected in cases of contracts intended to defraud t'em. (n)

Art. 1314.Any t'ird &erson w'o induces anot'er to violate 'is contract s'all be liable for damages to t'e

ot'er contracting &arty. (n)

Art. 1315.!ontracts are &erfected by mere consent, and from t'at moment t'e &arties are bound not only to

t'e fulfillment of w'at 'as been e&ressly sti&ulated but also to all t'e conse/uences w'ic', according to

t'eir nature, may be in ee&ing wit' good fait', usage and law. (1*)

Art. 1316.7eal contracts, suc' as de&osit, &ledge and !ommodatum, are not &erfected until t'e delivery of

t'e object of t'e obligation. (n)

Art. 1317.>o one may contract in t'e name of anot'er wit'out being aut'ori?ed by t'e latter, or unless 'e

'as by law a rig't to re&resent 'im.

A contract entered into in t'e name of anot'er by one w'o 'as no aut'ority or legal re&resentation, or

w'o 'as acted beyond 'is &owers, s'all be unenforceable, unless it is ratified, e&ressly or im&liedly, by t'e

&erson on w'ose be'alf it 'as been eecuted, before it is revoed by t'e ot'er contracting &arty. (1+a)

Chapter 2. ESSENTIAL REQUISITES OF CONTRACTS

!"!#A$ P#O%&S&O"S

Art. 1318.0'ere is no contract unless t'e following re/uisites concur:

(1) !onsent of t'e contracting &arties;

() Object certain w'ic' is t'e subject matter of t'e contract;

(") !ause of t'e obligation w'ic' is establis'ed. (11)

Section 1. Consent

Art. 1319.!onsent is manifested by t'e meeting of t'e offer and t'e acce&tance u&on t'e t'ing and t'e

cause w'ic' are to constitute t'e contract. 0'e offer must be certain and t'e acce&tance absolute. A /ualified

acce&tance constitutes a counter$offer.

Acce&tance made by letter or telegram does not bind t'e offerer ece&t from t'e time it came to 'is

nowledge. 0'e contract, in suc' a case, is &resumed to 'ave been entered into in t'e &lace w'ere t'e offer

was made. (1a)

Art. 1320.An acce&tance may be e&ress or im&lied. (n)


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Art. 1321.0'e &erson maing t'e offer may fi t'e time, &lace, and manner of acce&tance, all of w'ic' must

be com&lied wit'. (n)

Art. 1322.An offer made t'roug' an agent is acce&ted from t'e time acce&tance is communicated to 'im.

(n)

Art. 1323.An offer becomes ineffective u&on t'e deat', civil interdiction, insanity, or insolvency of eit'er

&arty before acce&tance is conveyed. (n)

Art. 1324.9'en t'e offerer 'as allowed t'e offeree a certain &eriod to acce&t, t'e offer may be wit'drawn

at any time before acce&tance by communicating suc' wit'drawal, ece&t w'en t'e o&tion is founded u&on a

consideration, as somet'ing &aid or &romised. (n)

Art. 1325.


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Art. 1332.9'en one of t'e &arties is unable to read, or if t'e contract is in a language not understood by

'im, and mistae or fraud is alleged, t'e &erson enforcing t'e contract must s'ow t'at t'e terms t'ereof

'ave been fully e&lained to t'e former. (n)

Art. 1333.0'ere is no mistae if t'e &arty alleging it new t'e doubt, contingency or ris affecting t'e

object of t'e contract. (n)

Art. 1334.@utual error as to t'e legal effect of an agreement w'en t'e real &ur&ose of t'e &arties is

frustrated, may vitiate consent. (n)

Art. 1335.0'ere is violence w'en in order to wrest consent, serious or irresistible force is em&loyed.

0'ere is intimidation w'en one of t'e contracting &arties is com&elled by a reasonable and well$grounded

fear of an imminent and grave evil u&on 'is &erson or &ro&erty, or u&on t'e &erson or &ro&erty of 'is

s&ouse, descendants or ascendants, to give 'is consent.

0o determine t'e degree of intimidation, t'e age, se and condition of t'e &erson s'all be borne in mind.

A t'reat to enforce ones claim t'roug' com&etent aut'ority, if t'e claim is just or legal, does not vitiate

consent. (14a)

Art. 1336.2iolence or intimidation s'all annul t'e obligation, alt'oug' it may 'ave been em&loyed by a

t'ird &erson w'o did not tae &art in t'e contract. (1*)

Art. 1337.0'ere is undue influence w'en a &erson taes im&ro&er advantage of 'is &ower over t'e will of

anot'er, de&riving t'e latter of a reasonable freedom of c'oice. 0'e following circumstances s'all be

considered: t'e confidential, family, s&iritual and ot'er relations between t'e &arties, or t'e fact t'at t'e

&erson alleged to 'ave been unduly influenced was suffering from mental weaness, or was ignorant or in

financial distress. (n)

Art. 1338.0'ere is fraud w'en, t'roug' insidious words or mac'inations of one of t'e contracting &arties,

t'e ot'er is induced to enter into a contract w'ic', wit'out t'em, 'e would not 'ave agreed to. (1+)

Art. 1339.ailure to disclose facts, w'en t'ere is a duty to reveal t'em, as w'en t'e &arties are bound by

confidential relations, constitutes fraud. (n)

Art. 1340.0'e usual eaggerations in trade, w'en t'e ot'er &arty 'ad an o&&ortunity to now t'e facts, are

not in t'emselves fraudulent. (n)

Art. 1341.A mere e&ression of an o&inion does not signify fraud, unless made by an e&ert and t'e ot'er

&arty 'as relied on t'e formers s&ecial nowledge. (n)

Art. 1342.@isre&resentation by a t'ird &erson does not vitiate consent, unless suc' misre&resentation 'as

created substantial mistae and t'e same is mutual. (n)


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Art. 1343.@isre&resentation made in good fait' is not fraudulent but may constitute error. (n)

Art. 1344.3n order t'at fraud may mae a contract voidable, it s'ould be serious and s'ould not 'ave been

em&loyed by bot' contracting &arties.

3ncidental fraud only obliges t'e &erson em&loying it to &ay damages. (14)

Art. 1345.=imulation of a contract may be absolute or relative. 0'e former taes &lace w'en t'e &arties do

not intend to be bound at all; t'e latter, w'en t'e &arties conceal t'eir true agreement. (n)

Art. 1346.An absolutely simulated or fictitious contract is void. A relative simulation, w'en it does not

&rejudice a t'ird &erson and is not intended for any &ur&ose contrary to law, morals, good customs, &ublic

order or &ublic &olicy binds t'e &arties to t'eir real agreement. (n)

Section 2. Ob+ect o( Contracts

Art. 1347.All t'ings w'ic' are not outside t'e commerce of men, including future t'ings, may be t'e object

of a contract. All rig'ts w'ic' are not intransmissible may also be t'e object of contracts.

>o contract may be entered into u&on future in'eritance ece&t in cases e&ressly aut'ori?ed by law.

All services w'ic' are not contrary to law, morals, good customs, &ublic order or &ublic &olicy may

liewise be t'e object of a contract. (141a)

Art. 1348.3m&ossible t'ings or services cannot be t'e object of contracts. (14)

Art. 1349.0'e object of every contract must be determinate as to its ind. 0'e fact t'at t'e /uantity is not

determinate s'all not be an obstacle to t'e eistence of t'e contract, &rovided it is &ossible to determine t'e

same, wit'out t'e need of a new contract between t'e &arties. (14")

Section 3. Cause o( Contracts

Art. 1350.3n onerous contracts t'e cause is understood to be, for eac' contracting &arty, t'e &restation or

&romise of a t'ing or service by t'e ot'er; in remuneratory ones, t'e service or benefit w'ic' is

remunerated; and in contracts of &ure beneficence, t'e mere liberality of t'e benefactor. (14%)

Art. 1351.0'e &articular motives of t'e &arties in entering into a contract are different from t'e cause

t'ereof. (n)

Art. 1352.!ontracts wit'out cause, or wit' unlawful cause, &roduce no effect w'atever. 0'e cause is

unlawful if it is contrary to law, morals, good customs, &ublic order or &ublic &olicy. (14a)

Art. 1353.0'e statement of a false cause in contracts s'all render t'em void, if it s'ould not be &roved t'at

t'ey were founded u&on anot'er cause w'ic' is true and lawful. (14)


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Art. 1354.Alt'oug' t'e cause is not stated in t'e contract, it is &resumed t'at it eists and is lawful, unless

t'e debtor &roves t'e contrary. (144)

Art. 1355.8ce&t in cases s&ecified by law, lesion or inade/uacy of cause s'all not invalidate a contract,

unless t'ere 'as been fraud, mistae or undue influence. (n)

Chapter *. (O O( CONT!CT$

Art. 1356.!ontracts s'all be obligatory, in w'atever form t'ey may 'ave been entered into, &rovided all t'e

essential re/uisites for t'eir validity are &resent. 6owever, w'en t'e law re/uires t'at a contract be in some

form in order t'at it may be valid or enforceable, or t'at a contract be &roved in a certain way, t'at

re/uirement is absolute and indis&ensable. 3n suc' cases, t'e rig't of t'e &arties stated in t'e following

article cannot be eercised. (14*a)

Art. 1357.3f t'e law re/uires a document or ot'er s&ecial form, as in t'e acts and contracts enumerated in

t'e following article, t'e contracting &arties may com&el eac' ot'er to observe t'at form, once t'e contract

'as been &erfected. 0'is rig't may be eercised simultaneously wit' t'e action u&on t'e contract. (14+a)

Art. 1358.0'e following must a&&ear in a &ublic document:

(1) Acts and contracts w'ic' 'ave for t'eir object t'e creation, transmission, modification or

etinguis'ment of real rig'ts over immovable &ro&erty; sales of real &ro&erty or of an interest t'erein

a governed by Articles 1%", >o. , and 1%;

() 0'e cession, re&udiation or renunciation of 'ereditary rig'ts or of t'ose of t'e conjugal

&artners'i& of gains;

(") 0'e &ower to administer &ro&erty, or any ot'er &ower w'ic' 'as for its object an act a&&earing or

w'ic' s'ould a&&ear in a &ublic document, or s'ould &rejudice a t'ird &erson;

(%) 0'e cession of actions or rig'ts &roceeding from an act a&&earing in a &ublic document.

All ot'er contracts w'ere t'e amount involved eceeds five 'undred &esos must a&&ear in writing, even a

&rivate one. -ut sales of goods, c'attels or t'ings in action are governed by Articles, 1%", >o. and 1%.

(1*a)

Chapter ,. E(O!TION O( IN$T&ENT$ 0n

Art. 1359.9'en, t'ere 'aving been a meeting of t'e minds of t'e &arties to a contract, t'eir true intention

is not e&ressed in t'e instrument &ur&orting to embody t'e agreement, by reason of mistae, fraud,

ine/uitable conduct or accident, one of t'e &arties may as for t'e reformation of t'e instrument to t'e end

t'at suc' true intention may be e&ressed.

3f mistae, fraud, ine/uitable conduct, or accident 'as &revented a meeting of t'e minds of t'e &arties, t'e

&ro&er remedy is not reformation of t'e instrument but annulment of t'e contract.


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Art. 1360.0'e &rinci&les of t'e general law on t'e reformation of instruments are 'ereby ado&ted insofar

as t'ey are not in conflict wit' t'e &rovisions of t'is !ode.

Art. 1361.9'en a mutual mistae of t'e &arties causes t'e failure of t'e instrument to disclose t'eir real

agreement, said instrument may be reformed.

Art. 1362.3f one &arty was mistaen and t'e ot'er acted fraudulently or ine/uitably in suc' a way t'at t'e

instrument does not s'ow t'eir true intention, t'e former may as for t'e reformation of t'e instrument.

Art. 1363.9'en one &arty was mistaen and t'e ot'er new or believed t'at t'e instrument did not state

t'eir real agreement, but concealed t'at fact from t'e former, t'e instrument may be reformed.

Art. 1364.9'en t'roug' t'e ignorance, lac of sill, negligence or bad fait' on t'e &art of t'e &erson

drafting t'e instrument or of t'e cler or ty&ist, t'e instrument does not e&ress t'e true intention of t'e

&arties, t'e courts may order t'at t'e instrument be reformed.

Art. 1365.3f two &arties agree u&on t'e mortgage or &ledge of real or &ersonal &ro&erty, but t'e instrument

states t'at t'e &ro&erty is sold absolutely or wit' a rig't of re&urc'ase, reformation of t'e instrument is

&ro&er.

Art. 1366.0'ere s'all be no reformation in t'e following cases:

(1) =im&le donations inter vivos w'erein no condition is im&osed;

() 9ills;

(") 9'en t'e real agreement is void.

Art. 1367.9'en one of t'e &arties 'as broug't an action to enforce t'e instrument, 'e cannot subse/uently

as for its reformation.

Art. 1368.7eformation may be ordered at t'e instance of eit'er &arty or 'is successors in interest, if t'e

mistae was mutual; ot'erwise, u&on &etition of t'e injured &arty, or 'is 'eirs and assigns.

Art. 1369.0'e &rocedure for t'e reformation of instrument s'all be governed by rules of court to be

&romulgated by t'e =u&reme !ourt.

Chapter 5. INTERPRETATION OF CONTRACTS

Art. 1370.3f t'e terms of a contract are clear and leave no doubt u&on t'e intention of t'e contracting

&arties, t'e literal meaning of its sti&ulations s'all control.

3f t'e words a&&ear to be contrary to t'e evident intention of t'e &arties, t'e latter s'all &revail over t'e

former. (1*1)


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Art. 1371.3n order to judge t'e intention of t'e contracting &arties, t'eir contem&oraneous and subse/uent

acts s'all be &rinci&ally considered. (1*)

Art. 1372.6owever general t'e terms of a contract may be, t'ey s'all not be understood to com&re'end

t'ings t'at are distinct and cases t'at are different from t'ose u&on w'ic' t'e &arties intended to agree.

(1*")

Art. 1373.3f some sti&ulation of any contract s'ould admit of several meanings, it s'all be understood as

bearing t'at im&ort w'ic' is most ade/uate to render it effectual. (1*%)

Art. 1374.0'e various sti&ulations of a contract s'all be inter&reted toget'er, attributing to t'e doubtful

ones t'at sense w'ic' may result from all of t'em taen jointly. (1*)

Art. 1375.9ords w'ic' may 'ave different significations s'all be understood in t'at w'ic' is most in

ee&ing wit' t'e nature and object of t'e contract. (1*)

Art. 1376.0'e usage or custom of t'e &lace s'all be borne in mind in t'e inter&retation of t'e ambiguities

of a contract, and s'all fill t'e omission of sti&ulations w'ic' are ordinarily establis'ed. (1*4)

Art. 1377.0'e inter&retation of obscure words or sti&ulations in a contract s'all not favor t'e &arty w'o

caused t'e obscurity. (1**)

Art. 1378.9'en it is absolutely im&ossible to settle doubts by t'e rules establis'ed in t'e &receding

articles, and t'e doubts refer to incidental circumstances of a gratuitous contract, t'e least transmission of

rig'ts and interests s'all &revail. 3f t'e contract is onerous, t'e doubt s'all be settled in favor of t'e greatest

reci&rocity of interests.

3f t'e doubts are cast u&on t'e &rinci&al object of t'e contract in suc' a way t'at it cannot be nown w'at

may 'ave been t'e intention or will of t'e &arties, t'e contract s'all be null and void. (1*+)

Art. 1379. 0'e &rinci&les of inter&retation stated in 7ule 1" of t'e 7ules of !ourt s'all liewise be

observed in t'e construction of contracts. (n)

Chapter 2. E$CI$$I)"E CONT!CT$

Art. 1380.!ontracts validly agreed u&on may be rescinded in t'e cases establis'ed by law. (1+)

Art. 1381.0'e following contracts are rescissible:

(1) 0'ose w'ic' are entered into by guardians w'enever t'e wards w'om t'ey re&resent suffer lesion

by more t'an one$fourt' of t'e value of t'e t'ings w'ic' are t'e object t'ereof;

() 0'ose agreed u&on in re&resentation of absentees, if t'e latter suffer t'e lesion stated in t'e

&receding number;


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(") 0'ose undertaen in fraud of creditors w'en t'e latter cannot in any ot'er manner collect t'e

claims due t'em;

(%) 0'ose w'ic' refer to t'ings under litigation if t'ey 'ave been entered into by t'e defendant

wit'out t'e nowledge and a&&roval of t'e litigants or of com&etent judicial aut'ority;

() All ot'er contracts s&ecially declared by law to be subject to rescission. (1+1a)

Art. 1382.5ayments made in a state of insolvency for obligations to w'ose fulfillment t'e debtor could not

be com&elled at t'e time t'ey were effected, are also rescissible. (1+)

Art. 1383.0'e action for rescission is subsidiary; it cannot be instituted ece&t w'en t'e &arty suffering

damage 'as no ot'er legal means to obtain re&aration for t'e same. (1+%)

Art. 1384.7escission s'all be only to t'e etent necessary to cover t'e damages caused. (n)

Art. 1385.7escission creates t'e obligation to return t'e t'ings w'ic' were t'e object of t'e contract,toget'er wit' t'eir fruits, and t'e &rice wit' its interest; conse/uently, it can be carried out only w'en 'e

w'o demands rescission can return w'atever 'e may be obliged to restore.

>eit'er s'all rescission tae &lace w'en t'e t'ings w'ic' are t'e object of t'e contract are legally in t'e

&ossession of t'ird &ersons w'o did not act in bad fait'.

3n t'is case, indemnity for damages may be demanded from t'e &erson causing t'e loss. (1+)

Art. 1386.7escission referred to in >os. 1 and of Article 1"*1 s'all not tae &lace wit' res&ect to contracts

a&&roved by t'e courts. (1+a)

Art. 1387.All contracts by virtue of w'ic' t'e debtor alienates &ro&erty by gratuitous title are &resumed to

'ave been entered into in fraud of creditors, w'en t'e donor did not reserve sufficient &ro&erty to &ay all

debts contracted before t'e donation.

Alienations by onerous title are also &resumed fraudulent w'en made by &ersons against w'om some

judgment 'as been issued. 0'e decision or attac'ment need not refer to t'e &ro&erty alienated, and need not

'ave been obtained by t'e &arty seeing t'e rescission.

3n addition to t'ese &resum&tions, t'e design to defraud creditors may be &roved in any ot'er manner

recogni?ed by t'e law of evidence. (1+4a)

Art. 1388.9'oever ac/uires in bad fait' t'e t'ings alienated in fraud of creditors, s'all indemnify t'e

latter for damages suffered by t'em on account of t'e alienation, w'enever, due to any cause, it s'ould be

im&ossible for 'im to return t'em.

3f t'ere are two or more alienations, t'e first ac/uirer s'all be liable first, and so on successively. (1+*a)


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Art. 1389.0'e action to claim rescission must be commenced wit'in four years.

or &ersons under guardians'i& and for absentees, t'e &eriod of four years s'all not begin until t'e

termination of t'e formers inca&acity, or until t'e domicile of t'e latter is nown. (1++)

Chapter 3. #OI'!)"E CONT!CT$

Art. 1390.0'e following contracts are voidable or annullable, even t'oug' t'ere may 'ave been no damage

to t'e contracting &arties:

(1) 0'ose w'ere one of t'e &arties is inca&able of giving consent to a contract;

() 0'ose w'ere t'e consent is vitiated by mistae, violence, intimidation, undue influence or fraud.

0'ese contracts are binding, unless t'ey are annulled by a &ro&er action in court. 0'ey are susce&tible of

ratification. (n)

Art. 1391.0'e action for annulment s'all be broug't wit'in four years.

0'is &eriod s'all begin:

3n cases of intimidation, violence or undue influence, from t'e time t'e defect of t'e consent ceases.

3n case of mistae or fraud, from t'e time of t'e discovery of t'e same.

And w'en t'e action refers to contracts entered into by minors or ot'er inca&acitated &ersons, from t'e

time t'e guardians'i& ceases. (1"1a)

Art. 1392.7atification etinguis'es t'e action to annul a voidable contract. (1"+a)

Art. 1393.7atification may be effected e&ressly or tacitly. 3t is understood t'at t'ere is a tacit ratification

if, wit' nowledge of t'e reason w'ic' renders t'e contract voidable and suc' reason 'aving ceased, t'e

&erson w'o 'as a rig't to invoe it s'ould eecute an act w'ic' necessarily im&lies an intention to waive 'is

rig't. (1"11a)

Art. 1394.7atification may be effected by t'e guardian of t'e inca&acitated &erson. (n)

Art. 1395.7atification does not re/uire t'e conformity of t'e contracting &arty w'o 'as no rig't to bring

t'e action for annulment. (1"1)

Art. 1396.7atification cleanses t'e contract from all its defects from t'e moment it was constituted. (1"1")

Art. 1397.0'e action for t'e annulment of contracts may be instituted by all w'o are t'ereby obliged

&rinci&ally or subsidiarily. 6owever, &ersons w'o are ca&able cannot allege t'e inca&acity of t'ose wit'

w'om t'ey contracted; nor can t'ose w'o eerted intimidation, violence, or undue influence, or em&loyed

fraud, or caused mistae base t'eir action u&on t'ese flaws of t'e contract. (1"a)


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Art. 1398.An obligation 'aving been annulled, t'e contracting &arties s'all restore to eac' ot'er t'e t'ings

w'ic' 'ave been t'e subject matter of t'e contract, wit' t'eir fruits, and t'e &rice wit' its interest, ece&t in

cases &rovided by law.

3n obligations to render service, t'e value t'ereof s'all be t'e basis for damages. (1""a)

Art. 1399.9'en t'e defect of t'e contract consists in t'e inca&acity of one of t'e &arties, t'e inca&acitated

&erson is not obliged to mae any restitution ece&t insofar as 'e 'as been benefited by t'e t'ing or &rice

received by 'im. (1"%)

Art. 1400.9'enever t'e &erson obliged by t'e decree of annulment to return t'e t'ing can not do so

because it 'as been lost t'roug' 'is fault, 'e s'all return t'e fruits received and t'e value of t'e t'ing at t'e

time of t'e loss, wit' interest from t'e same date. (1"4a)

Art. 1401.0'e action for annulment of contracts s'all be etinguis'ed w'en t'e t'ing w'ic' is t'e object

t'ereof is lost t'roug' t'e fraud or fault of t'e &erson w'o 'as a rig't to institute t'e &roceedings.

3f t'e rig't of action is based u&on t'e inca&acity of any one of t'e contracting &arties, t'e loss of t'e t'ing

s'all not be an obstacle to t'e success of t'e action, unless said loss too &lace t'roug' t'e fraud or fault of

t'e &laintiff. (1"1%a)

Art. 1402.As long as one of t'e contracting &arties does not restore w'at in virtue of t'e decree of

annulment 'e is bound to return, t'e ot'er cannot be com&elled to com&ly wit' w'at is incumbent u&on

'im. (1"*)

Chapter 4. &NEN(OCE!)"E CONT!CT$ 0n

Art. 1403.0'e following contracts are unenforceable, unless t'ey are ratified:

(1) 0'ose entered into in t'e name of anot'er &erson by one w'o 'as been given no aut'ority or legal

re&resentation, or w'o 'as acted beyond 'is &owers;

() 0'ose t'at do not com&ly wit' t'e =tatute of rauds as set fort' in t'is number. 3n t'e following

cases an agreement 'ereafter made s'all be unenforceable by action, unless t'e same, or some note

or memorandum, t'ereof, be in writing, and subscribed by t'e &arty c'arged, or by 'is agent;

evidence, t'erefore, of t'e agreement cannot be received wit'out t'e writing, or a secondary evidence

of its contents:

(a) An agreement t'at by its terms is not to be &erformed wit'in a year from t'e maing t'ereof;

(b) A s&ecial &romise to answer for t'e debt, default, or miscarriage of anot'er;

(c) An agreement made in consideration of marriage, ot'er t'an a mutual &romise to marry;


27/55

(d) An agreement for t'e sale of goods, c'attels or t'ings in action, at a &rice not less t'an five 'undred

&esos, unless t'e buyer acce&t and receive &art of suc' goods and c'attels, or t'e evidences, or some of t'em,

of suc' t'ings in action or &ay at t'e time some &art of t'e &urc'ase money; but w'en a sale is made by

auction and entry is made by t'e auctioneer in 'is sales boo, at t'e time of t'e sale, of t'e amount and ind

of &ro&erty sold, terms of sale, &rice, names of t'e &urc'asers and &erson on w'ose account t'e sale is made,

it is a sufficient memorandum;

(e) An agreement of t'e leasing for a longer &eriod t'an one year, or for t'e sale of real &ro&erty or of an

interest t'erein;

(f) A re&resentation as to t'e credit of a t'ird &erson.

(") 0'ose w'ere bot' &arties are inca&able of giving consent to a contract.

Art. 1404.o. of Article 1%", are ratified by t'e

failure to object to t'e &resentation of oral evidence to &rove t'e same, or by t'e acce&tance of benefit under

t'em.

Art. 1406.9'en a contract is enforceable under t'e =tatute of rauds, and a &ublic document is necessary

for its registration in t'e 7egistry of Beeds, t'e &arties may avail t'emselves of t'e rig't under Article 1"4.

Art. 1407.3n a contract w'ere bot' &arties are inca&able of giving consent, e&ress or im&lied ratification

by t'e &arent, or guardian, as t'e case may be, of one of t'e contracting &arties s'all give t'e contract t'e

same effect as if only one of t'em were inca&acitated.

3f ratification is made by t'e &arents or guardians, as t'e case may be, of bot' contracting &arties, t'e

contract s'all be validated from t'e ince&tion.

Art. 1408.


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() 0'ose w'ic' contem&late an im&ossible service;

() 0'ose w'ere t'e intention of t'e &arties relative to t'e &rinci&al object of t'e contract cannot be

ascertained;

(4) 0'ose e&ressly &ro'ibited or declared void by law.

0'ese contracts cannot be ratified. >eit'er can t'e rig't to set u& t'e defense of illegality be waived.

Art. 1410.0'e action or defense for t'e declaration of t'e ineistence of a contract does not &rescribe.

Art. 1411.9'en t'e nullity &roceeds from t'e illegality of t'e cause or object of t'e contract, and t'e act

constitutes a criminal offense, bot' &arties being inpari delicto, t'ey s'all 'ave no action against eac' ot'er,

and bot' s'all be &rosecuted. @oreover, t'e &rovisions of t'e 5enal !ode relative to t'e dis&osal of effects or

instruments of a crime s'all be a&&licable to t'e t'ings or t'e &rice of t'e contract.

0'is rule s'all be a&&licable w'en only one of t'e &arties is guilty; but t'e innocent one may claim w'at 'e'as given, and s'all not be bound to com&ly wit' 'is &romise. (1")

Art. 1412. 3f t'e act in w'ic' t'e unlawful or forbidden cause consists does not constitute a criminal

offense, t'e following rules s'all be observed:

(1) 9'en t'e fault is on t'e &art of bot' contracting &arties, neit'er may recover w'at 'e 'as given

by virtue of t'e contract, or demand t'e &erformance of t'e ot'ers undertaing;

() 9'en only one of t'e contracting &arties is at fault, 'e cannot recover w'at 'e 'as given by

reason of t'e contract, or as for t'e fulfillment of w'at 'as been &romised 'im. 0'e ot'er, w'o is

not at fault, may demand t'e return of w'at 'e 'as given wit'out any obligation to com&ly 'is

&romise. (1")

Art. 1413.3nterest &aid in ecess of t'e interest allowed by t'e usury laws may be recovered by t'e debtor,

wit' interest t'ereon from t'e date of t'e &ayment.

Art. 1414.9'en money is &aid or &ro&erty delivered for an illegal &ur&ose, t'e contract may be re&udiated

by one of t'e &arties before t'e &ur&ose 'as been accom&lis'ed, or before any damage 'as been caused to a

t'ird &erson. 3n suc' case, t'e courts may, if t'e &ublic interest will t'us be subserved, allow t'e &arty

re&udiating t'e contract to recover t'e money or &ro&erty.

Art. 1415.9'ere one of t'e &arties to an illegal contract is inca&able of giving consent, t'e courts may, if

t'e interest of justice so demands allow recovery of money or &ro&erty delivered by t'e inca&acitated &erson.

Art. 1416.9'en t'e agreement is not illegal &er se but is merely &ro'ibited, and t'e &ro'ibition by t'e law

is designated for t'e &rotection of t'e &laintiff, 'e may, if &ublic &olicy is t'ereby en'anced, recover w'at 'e

'as &aid or delivered.


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Art. 1417.9'en t'e &rice of any article or commodity is determined by statute, or by aut'ority of law, any

&erson &aying any amount in ecess of t'e maimum &rice allowed may recover suc' ecess.

Art. 1418.9'en t'e law fies, or aut'ori?es t'e fiing of t'e maimum number of 'ours of labor, and a

contract is entered into w'ereby a laborer undertaes to wor longer t'an t'e maimum t'us fied, 'e may

demand additional com&ensation for service rendered beyond t'e time limit.

Art. 1419.9'en t'e law sets, or aut'ori?es t'e setting of a minimum wage for laborers, and a contract is

agreed u&on by w'ic' a laborer acce&ts a lower wage, 'e s'all be entitled to recover t'e deficiency.

Art. 1420.3n case of a divisible contract, if t'e illegal terms can be se&arated from t'e legal ones, t'e latter

may be enforced.

Art. 1421.0'e defense of illegality of contract is not available to t'ird &ersons w'ose interests are not

directly affected.

Art. 1422.A contract w'ic' is t'e direct result of a &revious illegal contract, is also void and ineistent.

Title III. N!T&!" O)"IG!TION$

Art. 1423. Obligations are civil or natural. !ivil obligations give a rig't of action to com&el t'eir

&erformance. >atural obligations, not being based on &ositive law but on e/uity and natural law, do not

grant a rig't of action to enforce t'eir &erformance, but after voluntary fulfillment by t'e obligor, t'ey

aut'ori?e t'e retention of w'at 'as been delivered or rendered by reason t'ereof. =ome natural obligations

are set fort' in t'e following articles.

Art. 1424.9'en a rig't to sue u&on a civil obligation 'as la&sed by etinctive &rescri&tion, t'e obligor w'o

voluntarily &erforms t'e contract cannot recover w'at 'e 'as delivered or t'e value of t'e service 'e 'as

rendered.

Art. 1425.9'en wit'out t'e nowledge or against t'e will of t'e debtor, a t'ird &erson &ays a debt w'ic'

t'e obligor is not legally bound to &ay because t'e action t'ereon 'as &rescribed, but t'e debtor later

voluntarily reimburses t'e t'ird &erson, t'e obligor cannot recover w'at 'e 'as &aid.

Art. 1426.9'en a minor between eig'teen and twenty$one years of age w'o 'as entered into a contract

wit'out t'e consent of t'e &arent or guardian, after t'e annulment of t'e contract voluntarily returns t'e

w'ole t'ing or &rice received, notwit'standing t'e fact t'e 'e 'as not been benefited t'ereby, t'ere is no

rig't to demand t'e t'ing or &rice t'us returned.

Art. 1427.9'en a minor between eig'teen and twenty$one years of age, w'o 'as entered into a contract

wit'out t'e consent of t'e &arent or guardian, voluntarily &ays a sum of money or delivers a fungible t'ing

in fulfillment of t'e obligation, t'ere s'all be no rig't to recover t'e same from t'e obligee w'o 'as s&ent or

consumed it in good fait'. (11A)


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Art. 1428.9'en, after an action to enforce a civil obligation 'as failed t'e defendant voluntarily &erforms

t'e obligation, 'e cannot demand t'e return of w'at 'e 'as delivered or t'e &ayment of t'e value of t'e

service 'e 'as rendered.

Art. 1429.9'en a testate or intestate 'eir voluntarily &ays a debt of t'e decedent eceeding t'e value of t'e

&ro&erty w'ic' 'e received by will or by t'e law of intestacy from t'e estate of t'e deceased, t'e &ayment isvalid and cannot be rescinded by t'e &ayer.

Art. 1430.9'en a will is declared void because it 'as not been eecuted in accordance wit' t'e formalities

re/uired by law, but one of t'e intestate 'eirs, after t'e settlement of t'e debts of t'e deceased, &ays a legacy

in com&liance wit' a clause in t'e defective will, t'e &ayment is effective and irrevocable.

Title I#. E$TOPPE" 0n

Art. 1431.0'roug' esto&&el an admission or re&resentation is rendered conclusive u&on t'e &erson maing

it, and cannot be denied or dis&roved as against t'e &erson relying t'ereon.

Art. 1432. 0'e &rinci&les of esto&&el are 'ereby ado&ted insofar as t'ey are not in conflict wit' t'e

&rovisions of t'is !ode, t'e !ode of !ommerce, t'e 7ules of !ourt and s&ecial laws.

Art. 1433.8sto&&el may be in paisor by deed.

Art. 1434.9'en a &erson w'o is not t'e owner of a t'ing sells or alienates and delivers it, and later t'e

seller or grantor ac/uires title t'ereto, suc' title &asses by o&eration of law to t'e buyer or grantee.

Art. 1435.3f a &erson in re&resentation of anot'er sells or alienates a t'ing, t'e former cannot subse/uently

set u& 'is own title as against t'e buyer or grantee.

Art. 1436.A lessee or a bailee is esto&&ed from asserting title to t'e t'ing leased or received, as against t'e

lessor or bailor.

Art. 1437.9'en in a contract between t'ird &ersons concerning immovable &ro&erty, one of t'em is misled

by a &erson wit' res&ect to t'e owners'i& or real rig't over t'e real estate, t'e latter is &recluded from

asserting 'is legal title or interest t'erein, &rovided all t'ese re/uisites are &resent:

(1) 0'ere must be fraudulent re&resentation or wrongful concealment of facts nown to t'e &arty

esto&&ed;

() 0'e &arty &recluded must intend t'at t'e ot'er s'ould act u&on t'e facts as misre&resented;

(") 0'e &arty misled must 'ave been unaware of t'e true facts; and

(%) 0'e &arty defrauded must 'ave acted in accordance wit' t'e misre&resentation.


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Art. 1438. One w'o 'as allowed anot'er to assume a&&arent owners'i& of &ersonal &ro&erty for t'e

&ur&ose of maing any transfer of it, cannot, if 'e received t'e sum for w'ic' a &ledge 'as been constituted,

set u& 'is own title to defeat t'e &ledge of t'e &ro&erty, made by t'e ot'er to a &ledgee w'o received t'e

same in good fait' and for value.

Art. 1439.8sto&&el is effective only as between t'e &arties t'ereto or t'eir successors in interest.

Title IX. PARTNERSHIP


Art. 1767. -y t'e contract of &artners'i& two or more &ersons bind t'emselves to contribute money,

&ro&erty, or industry to a common fund, wit' t'e intention of dividing t'e &rofits among t'emselves.

0wo or more &ersons may also form a &artners'i& for t'e eercise of a &rofession. (1a)

Art. 1768.0'e &artners'i& 'as a judicial &ersonality se&arate and distinct from t'at of eac' of t'e &artners,

even in case of failure to com&ly wit' t'e re/uirements of Article 144, first &aragra&'. (n)

Art. 1769.3n determining w'et'er a &artners'i& eists, t'ese rules s'all a&&ly:

(1) 8ce&t as &rovided by Article 1*, &ersons w'o are not &artners as to eac' ot'er are not &artners

as to t'ird &ersons;

() !o$owners'i& or co$&ossession does not of itself establis' a &artners'i&, w'et'er suc'$co$owners

or co$&ossessors do or do not s'are any &rofits made by t'e use of t'e &ro&erty;

(") 0'e s'aring of gross returns does not of itself establis' a &artners'i&, w'et'er or not t'e &ersons

s'aring t'em 'ave a joint or common rig't or interest in any &ro&erty from w'ic' t'e returns are

derived;

(%) 0'e recei&t by a &erson of a s'are of t'e &rofits of a business is &rima facie evidence t'at 'e is a

&artner in t'e business, but no suc' inference s'all be drawn if suc' &rofits were received in

&ayment:

(a) As a debt by installments or ot'erwise;

(b) As wages of an em&loyee or rent to a landlord;

(c) As an annuity to a widow or re&resentative of a deceased &artner;

(d) As interest on a loan, t'oug' t'e amount of &ayment vary wit' t'e &rofits of t'e business;


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(e) As t'e consideration for t'e sale of a goodwill of a business or ot'er &ro&erty by installments or

ot'erwise. (n)

Art. 1770.A &artners'i& must 'ave a lawful object or &ur&ose, and must be establis'ed for t'e common

benefit or interest of t'e &artners.

9'en an unlawful &artners'i& is dissolved by a judicial decree, t'e &rofits s'all be confiscated in favor of

t'e =tate, wit'out &rejudice to t'e &rovisions of t'e 5enal !ode governing t'e confiscation of t'e

instruments and effects of a crime. (1a)

Art. 1771.A &artners'i& may be constituted in any form, ece&t w'ere immovable &ro&erty or real rig'ts

are contributed t'ereto, in w'ic' case a &ublic instrument s'all be necessary. (14a)

Art. 1772.8very contract of &artners'i& 'aving a ca&ital of t'ree t'ousand &esos or more, in money or

&ro&erty, s'all a&&ear in a &ublic instrument, w'ic' must be recorded in t'e Office of t'e =ecurities and

8c'ange !ommission.

ailure to com&ly wit' t'e re/uirements of t'e &receding &aragra&' s'all not affect t'e liability of t'e

&artners'i& and t'e members t'ereof to t'ird &ersons. (n)

Art. 1773.A contract of &artners'i& is void, w'enever immovable &ro&erty is contributed t'ereto, if an

inventory of said &ro&erty is not made, signed by t'e &arties, and attac'ed to t'e &ublic instrument. (1*a)

Art. 1774.Any immovable &ro&erty or an interest t'erein may be ac/uired in t'e &artners'i& name. 0itle so

ac/uired can be conveyed only in t'e &artners'i& name. (n)

Art. 1775.Associations and societies, w'ose articles are e&t secret among t'e members, and w'erein any

one of t'e members may contract in 'is own name wit' t'ird &ersons, s'all 'ave no juridical &ersonality,

and s'all be governed by t'e &rovisions relating to co$owners'i&. (1+)

Art. 1776.As to its object, a &artners'i& is eit'er universal or &articular. As regards t'e liability of t'e

&artners, a &artners'i& may be general or limited. (141a)

Art. 1777.A universal &artners'i& may refer to all t'e &resent &ro&erty or to all t'e &rofits. (14)

Art. 1778. A &artners'i& of all &resent &ro&erty is t'at in w'ic' t'e &artners contribute all t'e &ro&erty

w'ic' actually belongs to t'em to a common fund, wit' t'e intention of dividing t'e same among

t'emselves, as well as all t'e &rofits w'ic' t'ey may ac/uire t'erewit'. (14")

Art. 1779.3n a universal &artners'i& of all &resent &ro&erty, t'e &ro&erty w'ic' belongs to eac' of t'e

&artners at t'e time of t'e constitution of t'e &artners'i&, becomes t'e common &ro&erty of all t'e &artners,

as well as all t'e &rofits w'ic' t'ey may ac/uire t'erewit'.


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A sti&ulation for t'e common enjoyment of any ot'er &rofits may also be made; but t'e &ro&erty w'ic'

t'e &artners may ac/uire subse/uently by in'eritance, legacy, or donation cannot be included in suc'

sti&ulation, ece&t t'e fruits t'ereof. (14%a)

Art. 1780.A universal &artners'i& of &rofits com&rises all t'at t'e &artners may ac/uire by t'eir industry

or wor during t'e eistence of t'e &artners'i&.

@ovable or immovable &ro&erty w'ic' eac' of t'e &artners may &ossess at t'e time of t'e celebration of

t'e contract s'all continue to &ertain eclusively to eac', only t'e usufruct &assing to t'e &artners'i&. (14)

Art. 1781.Articles of universal &artners'i&, entered into wit'out s&ecification of its nature, only constitute

a universal &artners'i& of &rofits. (14)

Art. 1782.5ersons w'o are &ro'ibited from giving eac' ot'er any donation or advantage cannot enter into

universal &artners'i&. (144)

Art. 1783.A &articular &artners'i& 'as for its object determinate t'ings, t'eir use or fruits, or s&ecific

undertaing, or t'e eercise of a &rofession or vocation. (14*)

Chapter %. O)"IG!TION$ O( T-E P!TNE$

Section 1. Obligations o( the Partners A'ong )he'selves

Art. 1784. A &artners'i& begins from t'e moment of t'e eecution of t'e contract, unless it is ot'erwise

sti&ulated. (14+)

Art. 1785.9'en a &artners'i& for a fied term or &articular undertaing is continued after t'e termination

of suc' term or &articular undertaing wit'out any e&ress agreement, t'e rig'ts and duties of t'e &artners

remain t'e same as t'ey were at suc' termination, so far as is consistent wit' a &artners'i& at will.

A continuation of t'e business by t'e &artners or suc' of t'em as 'abitually acted t'erein during t'e term,

wit'out any settlement or li/uidation of t'e &artners'i& affairs, is &rima facie evidence of a continuation of

t'e &artners'i&. (n)

Art. 1786.8very &artner is a debtor of t'e &artners'i& for w'atever 'e may 'ave &romised to contribute

t'ereto.

6e s'all also be bound for warranty in case of eviction wit' regard to s&ecific and determinate t'ings

w'ic' 'e may 'ave contributed to t'e &artners'i&, in t'e same cases and in t'e same manner as t'e vendoris bound wit' res&ect to t'e vendee. 6e s'all also be liable for t'e fruits t'ereof from t'e time t'ey s'ould

'ave been delivered, wit'out t'e need of any demand. (1*1a)

Art. 1787.9'en t'e ca&ital or a &art t'ereof w'ic' a &artner is bound to contribute consists of goods, t'eir

a&&raisal must be made in t'e manner &rescribed in t'e contract of &artners'i&, and in t'e absence of

sti&ulation, it s'all be made by e&erts c'osen by t'e &artners, and according to current &rices, t'e

subse/uent c'anges t'ereof being for account of t'e &artners'i&. (n)


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Art. 1788.A &artner w'o 'as undertaen to contribute a sum of money and fails to do so becomes a debtor

for t'e interest and damages from t'e time 'e s'ould 'ave com&lied wit' 'is obligation.

0'e same rule a&&lies to any amount 'e may 'ave taen from t'e &artners'i& coffers, and 'is liability

s'all begin from t'e time 'e converted t'e amount to 'is own use. (1*)

Art. 1789.An industrial &artner cannot engage in business for 'imself, unless t'e &artners'i& e&ressly

&ermits 'im to do so; and if 'e s'ould do so, t'e ca&italist &artners may eit'er eclude 'im from t'e firm or

avail t'emselves of t'e benefits w'ic' 'e may 'ave obtained in violation of t'is &rovision, wit' a rig't to

damages in eit'er case. (n)

Art. 1790.


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Art. 1796.0'e &artners'i& s'all be res&onsible to every &artner for t'e amounts 'e may 'ave disbursed on

be'alf of t'e &artners'i& and for t'e corres&onding interest, from t'e time t'e e&ense are made; it s'all

also answer to eac' &artner for t'e obligations 'e may 'ave contracted in good fait' in t'e interest of t'e

&artners'i& business, and for riss in conse/uence of its management. (1**a)

Art. 1797.0'e losses and &rofits s'all be distributed in conformity wit' t'e agreement. 3f only t'e s'are ofeac' &artner in t'e &rofits 'as been agreed u&on, t'e s'are of eac' in t'e losses s'all be in t'e sa

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