RFLB: Module 8
Art. 1624. An assignment of credits and Art. 1629. In case the assignor in good faith
other incorporeal rights shall be perfected in should have made himself responsible for the
accordance with the provisions of Article solvency of the debtor, and the contracting
1475. parties should not have agreed upon the
duration of the liability, it shall last for one
ASSIGNMENT OF CREDIT year only, from the time of the assignment if
An assignment of credit is an agreement by the period had already expired.
virtue of which the owner of a credit, known If the credit should be payable within a
as the assignor, by a legal cause, such as term or period which has not yet expired, the
sale, dacion en pago, exchange or donation, liability shall cease one year after the
and without the consent of the debtor, maturity.
transfers his credit and accessory rights to
another, known as the assignee, who Art. 1630. One who sells an inheritance
acquires the power to enforce it to the same without enume-rating the things of which it is
extent as the assignor could enforce it composed, shall only be answerable for his
against the debtor. character as an heir.
Incorporeal rights, meaning Art. 1631. One who sells for a lump sum the
A right to intangible, rather than tangible, whole of certain rights, rents, or products,
property. Article 1475 reads: shall comply by answering for the legitimacy
of the whole in general; but he shall not be
Art 1475. The contract of sale is obliged to warrant each of the various parts
perfected at the moment there is a meeting of which it may be composed, except in the
of minds upon the thing which is the object case of eviction from the whole or the part of
of the contract and upon the price. greater value.
Thus, assignment of credits and other Art. 1632. Should the vendor have profited
incorporeal rights are perfected also at the by some of the fruits or received anything
moment there is a meeting of minds. from the inheritance sold, he shall pay the
vendee thereof, if the contrary has not been
Art. 1625. An assignment of a credit, right stipulated.
or action shall produce no effect as against
third person, unless it appears in a public Art. 1633. The vendee shall, on his part,
instrument, or the instrument is recorded in reimburse the vendor for all that the latter
the Registry of Property in case the may have paid for the debts of and charges
assignment involves real property. on the estate and satisfy the credits he may
have against the same, unless there an
Art. 1626. The debtor who, before having agreement to the contrary.
knowledge of the assignment pays his
creditor shall be released from the obligation. Art. 1634. When a credit or other
incorporeal right in litigation is sold, the
Art 1627. The assignment of a credit debtor shall have a right to extinguish it by
includes all the accessory rights, such as a reimbursing the assignee for the price the
guaranty, mortgage, pledge or preference. latter paid therefor, the judicial costs
incurred by him, and the interest on the price
Art. 1628. The vendor in good faith shall be from the day on which the same was paid.
responsible for the existence and legality of
the credit at the time of the sale, unless it A credit or other incorporeal right shall be
should have been sold as doubtful; but not considered in litigation from the time the
for the solvency of the debtor, unless it has complaint concerning the same is answered.
been so expressly stipulated or unless the
insolvency was prior to the sale and of The debtor may exercise his right within
common knowledge. thirty days from the date the assignee
demands payment from him.
Even in these cases, he shall only be liable
for the price received and for the expenses Art. 1635. From the provisions of the
specified in No. 1 of Article 1616. preceding article shall be excepted the
assignments or sales made:
The vendor in bad faith shall always be (1) To a co-heir or co-owner of the right
answerable for the payment of all expenses, assigned;
and for damages. (2) To a creditor in payment of his credit;
RFLB: Module 8
(3) To the possessor of a tenement or
piece of land which is subject to the
right in litigation assigned.
Art. 1636. In the preceding articles in this
Title governing the sale of goods, unless the
context or subject matter otherwise requires:
(1) "Document of title to goods" includes
any bill of lading, dock warrant,
"quedan," or warehouse receipt or
order for the delivery of goods, or any
other document used in the ordinary
course of business in the sale or
transfer of goods, as proof of the
possession or control of the goods, or
authorizing or purporting to authorize
the possessor of the document to
transfer or receive, either by
endorsement or by delivery, goods
represented by such document.
(2) A person is insolvent within the
meaning of this Title who either has
ceased to pay his debts in the ordinary
course of business or cannot pay his
debts as they become due, whether
insolvency proceedings have been
commenced or not.
(3) Goods are in a "deliverable state"
within the meaning of this Title When
they are in such a state that the buyer
would, under the contract, be bound to
take delivery of them.
Art. 1637. The provisions of this Title are
subject to the rules laid do by the Mortgage
Law and the Land Registration Law with
immovable property.
