ARTICLE 1156. An obligation is a juridical necessity to give, provisions of the first paragraph of article 1498 shall govern.

all govern. In (3) When demand would be useless, as when the obligor has
to do or not to do. (n) any other case wherein said provisions are not applicable, the rendered it beyond his power to perform.
ART. 1157. Obligations arise from: placing of the titles of ownership in the possession of the vendee In reciprocal obligations, neither party incurs in delay if the
(1) Law; or the use by the vendee of his rights, with the vendor's consent, other does not comply or is not ready to comply in a proper
(2) Contracts; shall be understood as a delivery. (1464) manner with what is incumbent upon him. From the moment
(3) Quasi-contracts; one of the parties fulfills his obligation, delay by the other be-
(4) Acts or omissions punished by law; and ARTICLE 1163. Every person obliged to give something is gins. (1100a)
(5) Quasi-delicts.(1089a) also obliged to take care of it with the proper diligence of a
good father of a family, unless the law or the stipulation of ART. 1170. Those who in the performance of their obligations
1157. Obligation arises from – (1) law; (2) contracts; (3) quasi- the parties requires another standard of care. (1094a) are guilty of fraud, negligence, or delay, and those who in any
contracts; (4) acts or omissions punished by law; (5) quasi- manner contravene the tenor thereof, are liable for dam-
delicts. ART. 1164. The creditor has a right to the fruits of the thing ages. (1101)
from the time the obligation to deliver it arises. However, he
1158. Obligations from law are not presumed. Only those (1) shall acquire no real right over it until the same has been ART. 1171. Responsibility arising from fraud is demandable
expressly determined in this code or (2) in special laws are delivered to him. (1095) in all obligations. Any waiver of an action for future fraud is
demandable, and shall be regulated by the precepts of the void. (1102a)
law which establishes them; and as to what has not been ART. 1165. When what is to be delivered is a determinate
foreseen, by the provisions of this code. thing, the creditor, in addition to the right granted him by ART. 1172. Responsibility arising from negligence in the
Article 1170, may compel the debtor to make the delivery. performance of every kind of obligation is also demandable,
If the thing is indeterminate or generic, he may ask that the but such liability may be regulated by the courts, according
ART. 1159. Obligations arising from contracts have the force
obligation be complied with at the expense of the debtor. to the circumstances. (1103)
of law between the contracting parties and should be
If the obligor delays, or has promised to deliver the same
complied with in good faith. (1091a)
thing to two or more persons who do not have the same ART. 1173. The fault or negligence of the obligor consists in
interest, he shall be responsible for any fortuitous event until the omission of that diligence which is required by the nature
ART. 1160. Obligations derived from quasi-contracts shall be
he has effected the delivery. (1096) of the obligation and corresponds with the circumstances of
subject to the provisions of Chapter 1, Title XVII, of this Book.
the persons, of the time and of the place. When negligence
(n)
ART. 1166. The obligation to give a determinate thing shows bad faith, the provisions of Articles 1171 and 2201,
includes that of delivering all its accessions and accessories, paragraph 2, shall apply.
ART. 1161. Civil obligations arising from criminal offenses even though they may not have been mentioned. (1097a) If the law or contract does not state the diligence
shall be governed by the penal laws, 14 subject to the which is to be observed in the performance, that which is
provisions of Article 2177,15 and of the pertinent provisions of ART. 1167. If a person obliged to do something fails to do it, expected of a good father of a family shall be required.
Chapter 2, Preliminary Title on Human Relations, 16 and of Title the same shall be executed at his cost. (1104a)
XVIII of this Book, regulating damages. (1092a) 15Art. 2177. This same rule shall be observed if he does it in
Responsibility for fault or negligence under the preceding article contravention of the tenor of the obligation. Furthermore, it ART. 1174. Except in cases expressly specified by the law, or
[Art. 2176, Note 19.] is entirely separate and distinct from the civil may be decreed that what has been poorly done be undone. when it is otherwise declared by stipulation, or when the
liability arising from negligence under the Penal Code. But the (1098) nature of the obligation requires the assumption of risk, no
plaintiff cannot recover damages twice for the same act or person shall be responsible for those events which could not
omission of the defendant. (n) ART. 1168. When the obligation consists in not doing, and be foreseen, or which, though foreseen, were inevitable.
the obligor does what has been forbidden him, it shall also be (1105a)
ART. 1162. Obligations derived from quasi-delicts shall be undone at his expense. (1099a)
governed by the provisions of Chapter 2, Title XVII of this ART. 1175. Usurious transactions shall be governed by
Book, and by special laws. (1093a) Art. 2176. Whoever by act ART. 1169. Those obliged to deliver or to do something incur special laws. (n)
or omission causes damage to another, there being fault or in delay from the time the obligee judicially or extra-judicially
negligence, is obliged to pay for the damage done. Such fault demands from them the fulfillment of their obligation. ART. 1176. The receipt of the principal by the creditor, with-
or negligence, if there is no pre-existing contractual relation However, the demand by the creditor shall not be necessary out reservation with respect to the interest, shall give rise to
between the parties, is called a quasi-delict and is governed in order that delay may exist: the presumption that said interest has been paid.
by the provisions of this Chapter. [on Quasi-delicts] (1) When the obligation or the law expressly so declares; or The receipt of a later installment of a debt without
(2) When from the nature and the circumstances of the reservation as to prior installments, shall likewise raise the
ARTICLE [Link] thing sold shall be understood as delivered, obligation it appears that the designation of the time when presumption that such installments have been paid. (1110a)
when it is placed in the control and possession of the vendee. the thing is to be delivered or the service is to be rendered
(1462a) was a controlling motive for the establishment of the ART. 1177. The creditors, after having pursued the property
ARTICLE [Link] respect to incorporeal property, the contract; or in possession of the debtor to satisfy their claims, may
exercise all the rights and bring all the actions of the latter for (1118) fulfillment of said conditions, shall return to each other what
the same purpose, save those which are inherent in his they have received.
person; they may also impugn the acts which the debtor may ART. 1186. The condition shall be deemed fulfilled when the In case of the loss, deterioration or improvement of
have done to de- fraud them. (1111) obligor voluntarily prevents its fulfillment. (1119) the thing, the provisions which, with respect to the debtor,
are laid down in the preceding article shall be applied to the
ART. 1178. Subject to the laws, all rights acquired in virtue of ART. 1187. The effects of a conditional obligation to give, party who is bound to return.
an obligation are transmissible, if there has been no once the condition has been fulfilled, shall retroact to the day As for obligations to do and not to do, the provisions
stipulation to the contrary. (1112) of the constitution of the obligation. Nevertheless, when the of the second paragraph of Article 1187 shall be observed as
obligation imposes reciprocal prestations upon the parties, regards the effect of the extinguishment of the obligation.
ART. 1179. Every obligation whose performance does not the fruits and interests during the pendency of the condition (1123)
depend upon a future or uncertain event, or upon a past shall be deemed to have been mutually compensated. If the
event unknown to the parties, is demandable at once. obligation is unilateral, the debtor shall appropriate the fruits ART. 1191. The power to rescind obligations is implied in
Every obligation which contains a resolutory and interests received, unless from the nature and reciprocal ones, in case one of the obligors should not
condition shall also be demandable, without prejudice to the circumstances of the obligation it should be inferred that the comply with what is incumbent upon him.
effects of the happening of the event. (1113) intention of the per- son constituting the same was different. The injured party may choose between the fulfillment
In obligations to do and not to do, the courts shall deter- and the rescission7 of the obligation, with the payment of
ART. 1180. When the debtor binds himself to pay when his mine, in each case, the retroactive effect of the condition that damages in either case. He may also seek rescission, even
means permit him to do so, the obligation shall be deemed to has been complied with. (1120) after he has chosen fulfillment, if the latter should become
be one with a period, subject to the provisions of Article impossible.
1197. (n) ART. 1188. The creditor may, before the fulfillment of the The court shall decree the rescission claimed, unless
condition, bring the appropriate actions for the preservation there be just cause authorizing the fixing of a period.
ART. 1181. In conditional obligations, the acquisition of of his right. This is understood to be without prejudice to the
rights, as well as the extinguishment or loss of those already The debtor may recover what during the same time rights of third persons who have acquired the thing, in
acquired, shall depend upon the happening of the event he has paid by mistake in case of a suspensive condition. accordance with Articles 1385 and 1388 and the Mortgage
which constitutes the condition. (1114) (1121a) Law.8 (1124)

ART. 1182. When the fulfillment of the condition depends ART. 1189. When the conditions have been imposed with the ART. 1192. In case both parties have committed a breach of
upon the sole will of the debtor, the conditional obligation intention of suspending the efficacy of an obligation to give, the obligation, the liability of the first infractor shall be
shall be void. If it depends upon chance or upon the will of a the following rules shall be observed in case of the equitably tempered by the courts. If it cannot be determined
third person, the obligation shall take effect in conformity improvement, loss or deterioration of the thing during the which of the parties first violated the contract, the same shall
with the provisions of this Code. (1115) pendency of the condition: be deemed extinguished, and each shall bear his own
(1) If the thing is lost without the fault of the debtor, damages. (n)
ART. 1183. Impossible conditions, those contrary to good the obligation shall be extinguished;
customs or public policy and those prohibited by law shall (2) If the thing is lost through the fault of the debtor, ART. 1193. Obligations for whose fulfillment a day certain has
annul the obligation which depends upon them. If the he shall be obliged to pay damages; it is understood that the been fixed, shall be demandable only when that day comes.
obligation is divisible, that part thereof which is not affected thing is lost when it perishes, or goes out of commerce, or Obligations with a resolutory period take effect at once, but
by the impossible or unlawful condition shall be valid. disappears in such a way that its existence is unknown or it terminate upon arrival of the day certain.
The condition not to do an impossible thing shall be cannot be recovered; A day certain is understood to be that which must
considered as not having been agreed upon. (1116a) (3) When the thing deteriorates without the fault of necessarily come, although it may not be known when.
the debtor, the impairment is to be borne by the creditor; If the uncertainty consists in whether the day will come or
ART. 1184. The condition that some event happen at a (4) If it deteriorates through the fault of the debtor, not, the obligation is conditional, and it shall be regulated by
determinate time shall extinguish the obligation as soon as the creditor may choose between the rescission of the the rules of the preceding Section. (1125a)
the time expires or if it has become indubitable that the event obligation and its fulfillment, with indemnity for damages in
will not take place. (1117) either case; ART. 1194. In case of loss, deterioration or improvement of
(5) If the thing is improved by its nature, or by time, the thing before the arrival of the day certain, the rules in
ART. 1185. The condition that some event will not happen at the improvement shall inure to the benefit of the creditor; Article 1189 shall be observed. (n)
a determinate time shall render the obligation effective from (6) If it is improved at the expense of the debtor, he
the moment the time indicated has elapsed, or if it has shall have no other right than that granted to the ART. 1195. Anything paid or delivered before the arrival of
become evident that the event cannot occur. usufructuary. (1122) the period, the obligor being unaware of the period or
If no time has been fixed, the condition shall be believing that the obligation has become due and
deemed fulfilled at such time as may have probably been ART. 1190. When the conditions have for their purpose the demandable, may be recovered, with the fruits and interests.
contemplated, bearing in mind the nature of the obligation. extinguishment of an obligation to give, the parties upon the (1126a)
 make a choice according to the terms of the obligation, the ART. 1208. If from the law, or the nature or the wording of the
ART. 1196. Whenever in an obligation a period is designated, latter may rescind the contract with damages. (n) obligations to which the preceding article refers the contrary
it is presumed to have been established for the benefit of does not appear, the credit or debt shall be presumed to be
both the creditor and the debtor, unless from the tenor of the ART. 1204. The creditor shall have a right to indemnity for divided into as many equal shares as there are creditors or
same or other circumstances it should appear that the period damages when, through the fault of the debtor, all the things debtors, the credits or debts being considered distinct from
has been established in favor of one or of the other. (1127) which are alternatively the object of the obligation have been one another, subject to the Rules of Court governing the
lost, or the compliance of the obligation has become multiplicity of suits. (1138a)
ART. 1197. If the obligation does not fix a period, but from its impossible.
nature and the circumstances it can be inferred that a period The indemnity shall be fixed taking as a basis the ART. 1209. If the division is impossible, the right of the
was intended, the courts may fix the duration thereof. value of the last thing which disappeared, or that of the creditors may be prejudiced only by their collective acts, and
The courts shall also fix the duration of the period when it service which last became impossible. the debt can be enforced only by proceeding against all the
depends upon the will of the debtor. Damages other than the value of the last thing or debtors. If one of the latter should be insolvent, the others
In every case, the courts shall determine such period as may service may also be awarded. (1135a) shall not be liable for his share. (1139)
under the circumstances have been probably contemplated
by the parties. Once fixed by the courts, the period cannot be ART. 1205. When the choice has been expressly given to the ART. 1210. The indivisibility of an obligation does not
changed by them. (1128a) creditor, the obligation shall cease to be alternative from the necessarily give rise to solidarity. Nor does solidarity of itself
day when the selection has been communicated to the imply indivisibility. (n)
ART. 1198. The debtor shall lose every right to make use of debtor.
the period: Until then the responsibility of the debtor shall be ART. 1211. Solidarity may exist although the creditors and
(1) When after the obligation has been contracted, he governed by the following rules: the debtors may not be bound in the same manner and by the
becomes insolvent, unless he gives a guaranty or security for (1) If one of the things is lost through a fortuitous same periods and conditions. (1140)
the debt; event, he shall perform the obligation by delivering that
(2) When he does not furnish to the creditor the which the creditor should choose from among the remainder, ART. 1212. Each one of the solidary creditors may do what-
guaranties or securities which he has promised; or that which re- mains if only one subsists; ever may be useful to the others, but not anything which may
(3) When by his own acts he has impaired said (2) If the loss of one of the things occurs through the be prejudicial to the latter. (1141a)
guaranties or securities after their establishment, and when fault of the debtor, the creditor may claim any of those
through a fortuitous event they disappear, unless he subsisting, or the price of that which, through the fault of the ART. 1213. A solidary creditor cannot assign his rights with-
immediately gives new ones equally satisfactory; former, has disappeared, with a right to damages; out the consent of the others. (n)
(4) When the debtor violates any undertaking, (3) If all the things are lost through the fault of the
inconsideration of which the creditor agreed to the period; debtor, the choice by the creditor shall fall upon the price of ART. 1214. The debtor may pay any one of the solidary
(5) abscond. (1129a) any one of them, also with indemnity for damages. creditors; but if any demand, judicial or extrajudicial, has
The same rules shall be applied to obligations to do been made by one of them, payment should be made to him.
ART. 1199. A person alternatively bound by different or not to do in case one, some or all of the prestations should (1142a)
prestations shall completely perform one of them. become impossible. (1136a)
The creditor cannot be compelled to receive part of one and ART. 1215. Novation, compensation, confusion or remission
part of the other undertaking. (1131) ART. 1206. When only one prestation has been agreed upon, of the debt, made by any of the solidary creditors or with any
but the obligor may render another in substitution, the of the solidary debtors, shall extinguish the obligation,
ART. 1200. The right of choice belongs to the debtor, unless obligation is called facultative. without prejudice to the provisions of Article 1219.
it has been expressly granted to the creditor. The loss or deterioration of the thing intended as a The creditor who may have executed any of these
The debtor shall have no right to choose those prestations substitute, through the negligence of the obligor, does not acts, as well as he who collects the debt, shall be liable to the
which are impossible, unlawful or which could not have been render him liable. But once the substitution has been made, others for the share in the obligation corresponding to them.
the object of the obligation. (1132) the obligor is liable for the loss of the substitute on account (1143)
of his delay, negligence or fraud. (n)
ART. 1201. The choice shall produce no effect except from ART. 1216. The creditor may proceed against any one of the
the time it has been communicated. (1133) ART. 1207. The concurrence of two or more creditors or of solidary debtors or some or all of them simultaneously. The
two or more debtors in one and the same obligation does not demand made against one of them shall not be an obstacle to
ART. 1202. The debtor shall lose the right of choice when imply that each one of the former has a right to demand, or those which may subsequently be directed against the
among the prestations whereby he is alternatively bound, that each one of the latter is bound to render, entire others, so long as the debt has not been fully collected.
only one is practicable. (1134) compliance with the prestations. There is a solidary liability (1144a)
only when the obligation expressly so states, or when the law
ART. 1203. If through the creditor’s acts the debtor cannot or the nature of the obligation requires solidarity. (1137a) ART. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary debtors
of- fer to pay, the creditor may choose which offer to accept. ART. 1224. A joint indivisible obligation gives rise to performance, the penalty may also be reduced by the courts
He who made the payment may claim from his co- indemnity for damages from the time anyone of the debtors if it is iniquitous or unconscionable. (1154a)
debtors only the share which corresponds to each, with the does not comply with his undertaking. The debtors who may
interest for the payment already made. If the payment is have been ready to fulfill their promises shall not contribute ART. 1230. The nullity of the penal clause does not carry with
made before the debt is due, no interest for the intervening to the indemnity beyond the corresponding portion of the it that of the principal obligation.
period may be demanded. price of the thing or of the value of the service in which the The nullity of the principal obligation carries with it that of the
When one of the solidary debtors cannot, because of obligation consists. (1150) penal clause. (1155)
his insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co-debtors, in ART. 1225. For the purposes of the preceding articles, ART. 1231. Obligations are extinguished:
proportion to the debt of each. (1145a) obligations to give definite things and those which are not (1) By payment or performance;
susceptible of partial performance shall be deemed to be (2) By the loss of the thing due;
ART. 1218. Payment by a solidary debtor shall not entitle him indivisible. (3) By the condonation or remission of the debt;
to reimbursement from his co-debtors if such payment is When the obligation has for its object the execution (4) By the confusion or merger of the rights of
made after the obligation has prescribed or become illegal. of a certain number of days of work, the accomplishment of creditor and debtor;
(n) work by metrical units, or analogous things which by their (5) By compensation;
nature are susceptible of partial performance, it shall be (6) By novation.
ART. 1219. The remission made by the creditor of the share divisible. Other causes of extinguishment of obligations, such as
which affects one of the solidary debtors does not release However, even though the object or service may be annulment, rescission, fulfillment of a resolutory condition,
the latter from his responsibility towards the co-debtors, in physically divisible, an obligation is indivisible if so provided and prescription, are governed elsewhere in this Code.
case the debt had been totally paid by anyone of them before by law or intended by the parties. (1156a)
the remission was effected. (1146a) In obligations not to do, divisibility or indivisibility shall be
determined by the character of the prestation in each
ART. 1220. The remission of the whole obligation, obtained particular case. (1151a) ART. 1232. Payment means not only the delivery of money
by one of the solidary debtors, does not entitle him to but also the performance, in any other manner, of an
reimbursement from his co-debtors. (n) ART. 1226. In obligations with a penal clause, the penalty obligation. (n)
shall substitute the indemnity for damages and the payment
ART. 1221. If the thing has been lost or if the prestation has of interests in case of noncompliance, if there is no ART. 1233. A debt shall not be understood to have been paid
become impossible without the fault of the solidary debtors, stipulation to the contrary. Nevertheless, damages shall be unless the thing or service in which the obligation consists
the obligation shall be extinguished. paid if the obligor refuses to pay the penalty or is guilty of has been completely delivered or rendered, as the case may
If there was fault on the part of any one of them, all fraud in the fulfillment of the obligation. be. (1157)
shall be responsible to the creditor, for the price and the The penalty may be enforced only when it is
payment of damages and interest, without prejudice to their demandable in accordance with the provisions of this Code. ART. 1234. If the obligation has been substantially per-
action against the guilty or negligent debtor. (1152a) formed in good faith, the obligor may recover as though there
If through a fortuitous event, the thing is lost or the had been a strict and complete fulfillment, less damages
performance has become impossible after one of the solidary ART. 1227. The debtor cannot exempt himself from the suffered by the obligee. (n)
debtors has incurred in delay through the judicial or extra- performance of the obligation by paying the penalty, save in
judicial demand upon him by the creditor, the provisions of the case where this right has been expressly reserved for ART. 1235. When the obligee accepts the performance,
the preceding paragraph shall apply. (1147a) him. Neither can the creditor demand the fulfillment of the knowing its incompleteness or irregularity, and without ex-
obligation and the satisfaction of the penalty at the same pressing any protest or objection, the obligation is deemed
ART. 1222. A solidary debtor may, in actions filed by the time, unless this right has been clearly granted him. fully complied with. (n)
creditor, avail himself of all defenses which are derived from However, if after the creditor has decided to require the
the nature of the obligation and of those which are personal fulfillment of the obligation, the performance thereof should ART. 1236. The creditor is not bound to accept payment or
to him, or pertain to his own share. With respect to those become impossible without his fault, the penalty may be performance by a third person who has no interest in the
which person- ally belong to the others, he may avail himself enforced. (1153a) fulfillment of the obligation, unless there is a stipulation to
thereof only as regards that part of the debt for which the the contrary.
latter are responsible. (1148a) ART. 1228. Proof of actual damages suffered by the creditor Whoever pays for another may demand from the
is not necessary in order that the penalty may be demanded. debtor what he has paid, except that if he paid without the
ART. 1223. The divisibility or indivisibility of the things that (n) knowledge or against the will of the debtor, he can recover
are the object of obligations in which there is only one debtor only insofar as the payment has been beneficial to the
and only one creditor does not alter or modify the provisions ART. 1229. The judge shall equitably reduce the penalty when debtor. (1158a)
of Chapter 2 of this Title. (1149) the principal obligation has been partly or irregularly
complied with by the debtor. Even if there has been no ART. 1237. Whoever pays on behalf of the debtor without the
knowledge or against the will of the latter, cannot compel the These provisions are without prejudice to venue
creditor to subrogate him in his rights, such as those arising ART. 1246. When the obligation consists in the delivery of an under the Rules of Court. (1171a)
from a mortgage, guaranty, or penalty. (1159a) indeterminate or generic thing, whose quality and circum-
stances have not been stated, the creditor cannot demand a ART. 1252. He who has various debts of the same kind in
ART. 1238. Payment made by a third person who does not thing of superior quality. Neither can the debtor deliver a favor of one and the same creditor, may declare at the time of
intend to be reimbursed by the debtor is deemed to be a thing of inferior quality. The purpose of the obligation and making the payment, to which of them the same must be ap-
donation, which requires the debtor’s consent. But the other circumstances shall be taken into consideration. plied. Unless the parties so stipulate, or when the application
payment is in any case valid as to the creditor who has (1167a) of payment is made by the party for whose benefit the term
accepted it. (n) has been constituted, application shall not be made as to
ART. 1247. Unless it is otherwise stipulated, the extrajudicial debts which are not yet due.
ART. 1239. In obligations to give, payment made by one who expenses required by the payment shall be for the account of If the debtor accepts from the creditor a receipt in
does not have the free disposal of the thing due and capacity the debtor. With regard to judicial costs, the Rules of Court which an application of the payment is made, the former
to alienate it shall not be valid, without prejudice to the shall govern. (1168a) cannot complain of the same, unless there is a cause for
provisions of Article 1427 under the Title on “Natural invalidating the con- tract. (1172a)
Obligations.’’ (1160a) ART. 1248. Unless there is an express stipulation to that
effect, the creditor cannot be compelled partially to receive ART. 1253. If the debt produces interest, payment of the
ART. 1240. Payment shall be made to the person in whose the prestations in which the obligation consists. Neither may principal shall not be deemed to have been made until the
favor the obligation has been constituted, or his successor in the debtor be required to make partial payments. interests have been covered. (1173)
interest, or any person authorized to receive it. (1162a) However, when the debt is in part liquidated and in
part un- liquidated, the creditor may demand and the debtor ART. 1254. When the payment cannot be applied in
ART. 1241. Payment to a person who is incapacitated to may effect the payment of the former without waiting for the accordance with the preceding rules, or if application cannot
administer his property shall be valid if he has kept the thing liquidation of the latter. (1169a) be inferred from other circumstances, the debt which is most
delivered, or insofar as the payment has been beneficial to onerous to the debtor, among those due, shall be deemed to
him. ART. 1249. The payment of debts in money shall be made in have been satisfied.
Payment made to a third person shall also be valid the currency stipulated, and if it is not possible to deliver If the debts due are of the same nature and burden,
insofar as it has redounded to the benefit of the creditor. such currency, then in the currency which is legal tender in the payment shall be applied to all of them proportionately.
Such benefit to the creditor need not be proved in the the Philippines. (1174a)
following cases: The delivery of promissory notes payable to order, or
(1) If after the payment, the third person acquires the bills of exchange or other mercantile documents shall ART. 1255. The debtor may cede or assign his property to his
creditor’s rights; produce the effect of payment only when they have been creditors in payment of his debts. This cession, unless there
(2) If the creditor ratifies the payment to the third person; cashed, or when through the fault of the creditor they have is stipulation to the contrary, shall only release the debtor
(3) If by the creditor’s conduct, the debtor has been led to been impaired. from responsibility for the net proceeds of the thing
believe that the third person had authority to receive the In the meantime, the action derived from the original assigned. The agreements which, on the effect of the
payment. (1163a) obligation shall be held in abeyance. (1170) cession, are made be- tween the debtor and his creditors
shall be governed by special laws. (1175a)
ART. 1242. Payment made in good faith to any person in ART. 1250. In case an extraordinary inflation or deflation of
possession of the credit shall release the debtor. (1164) the currency stipulated should supervene, the value of the ART. 1256. If the creditor to whom tender of payment has
currency at the time of the establishment of the obligation been made refuses without just cause to accept it, the debtor
ART. 1243. Payment made to the creditor by the debtor after shall be the basis of payment, unless there is an agreement shall be released from responsibility by the consignation of
the latter has been judicially ordered to retain the debt shall to the contrary. (n) the thing or sum due.
not be valid. (1165) Consignation alone shall produce the same effect in
ART. 1251. Payment shall be made in the place designated in the fol- lowing cases:
ART. 1244. The debtor of a thing cannot compel the creditor the obligation. (1) When the creditor is absent or unknown, or does not
to receive a different one, although the latter may be of the There being no express stipulation and if the appear at the place of payment;
same value as, or more valuable than that which is due. undertaking is to deliver a determinate thing, the payment (2) When he is incapacitated to receive the payment at the
In obligations to do or not to do, an act or forbearance can- shall be made wherever the thing might be at the moment the time it is due;
not be substituted by another act or forbearance against the obligation was constituted. (3) When, without just cause, he refuses to give a receipt;
obligee’s will. (1166a) In any other case the place of payment shall be the (4) When two or more persons claim the same right to
domicile of the debtor. collect;
ART. 1245. Dation in payment, whereby property is alienated If the debtor changes his domicile in bad faith or after he has (5) When the title of the obligation has been lost. (1176a)
to the creditor in satisfaction of a debt in money, shall be incurred in delay, the additional expenses shall be borne by
governed by the law of sales. (n) him. ART. 1257. In order that the consignation of the thing due
may release the obligor, it must first be announced to the fault, unless there is proof to the contrary, and without pledge has been remitted when the thing pledged, after its
persons interested in the fulfillment of the obligation. prejudice to the provisions of Article 1165. This presumption delivery to the creditor, is found in the possession of the
The consignation shall be ineffectual if it is not made strictly does not apply in case of earthquake, flood, storm or other debtor, or of a third person who owns the thing. (1191a)
in consonance with the provisions which regulate payment. natural calamity. (1183a)
(1177) ART. 1275. The obligation is extinguished from the time the
ART. 1266. The debtor in obligations to do shall also be re- characters of creditor and debtor are merged in the same per-
leased when the prestation becomes legally or physically im- son. (1192a)
ART. 1258. Consignation shall be made by depositing the possible without the fault of the obligor. (1184a)
things due at the disposal of judicial authority, before whom ART. 1276. Merger which takes place in the person of the
the tender of payment shall be proved, in a proper case, and ART. 1267. When the service has become so difficult as to be principal debtor or creditor benefits the guarantors.
the announcement of the consignation in other cases. manifestly beyond the contemplation of the parties, the Confusion which takes place in the person of any of the latter
The consignation having been made, the interested obligor may also be released therefrom, in whole or in part. does not extinguish the obligation. (1193)
parties shall also be notified thereof. (1178) (n)
ART. 1277. Confusion does not extinguish a joint obligation
ART. 1259. The expenses of consignation, when properly ART. 1268. When the debt of a thing certain and determinate except as regards the share corresponding to the creditor or
made, shall be charged against the creditor. (1179) proceeds from a criminal offense, the debtor shall not be debtor in whom the two characters concur. (1194)
exempted from the payment of its price, whatever may be the
ART. 1260. Once the consignation has been duly made, the cause for the loss, unless the thing having been offered by ART. 1278. Compensation shall take place when two per-
debtor may ask the judge to order the cancellation of the him to the person who should receive it, the latter refused sons, in their own right, are creditors and debtors of each
obligation. without justification to accept it. (1185) other. (1195)
Before the creditor has accepted the consignation,
or be- fore a judicial declaration that the consignation has ART. 1269. The obligation having been extinguished by the ART. 1279. In order that compensation may be proper, it is
been properly made, the debtor may withdraw the thing or loss of the thing, the creditor shall have all the rights of necessary:
the sum deposited, allowing the obligation to remain in force. action which the debtor may have against third person by (1) That each one of the obligors be bound principally, and
(1180) reason of the loss. (1186) that he be at the same time a principal creditor of the other;
(2) That both debts consist in a sum of money, or if the things
ART. 1261. If, the consignation having been made, the ART. 1270. Condonation or remission is essentially due are consumable, they be of the same kind, and also of
creditor should authorize the debtor to withdraw the same, he gratuitous, and requires the acceptance by the obligor. It may the same quality if the latter has been stated;
shall lose every preference which he may have over the be made expressly or impliedly. (3) That the two debts be due;
thing. The co-debtors, guarantors and sureties shall be One and the other kind shall be subject to the rules which (4) That they be liquidated and demandable;
released. (1181a) govern inofficious donations. Express condonation shall, (5) That over neither of them there be any retention or
furthermore, comply with the forms of donation. (1187) controversy, commenced by third persons and
ART. 1262. An obligation which consists in the delivery of a communicated in due time to the debtor. (1196)
determinate thing shall be extinguished if it should be lost or ART. 1271. The delivery of a private document evidencing a
destroyed without the fault of the debtor, and before he has credit, made voluntarily by the creditor to the debtor, implies ART. 1280. Notwithstanding the provisions of the preceding
incurred in delay. the renunciation of the action which the former had against article, the guarantor may set up compensation as regards
When by law or stipulation, the obligor is liable even the latter. what the creditor may owe the principal debtor. (1197)
for fortuitous events, the loss of the thing does not If in order to nullify this waiver it should be claimed
extinguish the obligation, and he shall be responsible for to be inofficious, the debtor and his heirs may uphold it by ART. 1281. Compensation may be total or partial. When the
damages. The same rule applies when the nature of the proving that the delivery of the document was made in virtue two debts are of the same amount, there is a total
obligation requires the assumption of risk. (1182a) of payment of the debt. (1188) compensation. (n)

ART. 1263. In an obligation to deliver a generic thing, the loss ART. 1272. Whenever the private document in which the debt ART. 1282. The parties may agree upon the compensation of
or destruction of anything of the same kind does not appears is found in the possession of the debtor, it shall be debts which are not yet due. (n)
extinguish the obligation. (n) presumed that the creditor delivered it voluntarily, unless the
contrary is proved. (1189) ART. 1283. If one of the parties to a suit over an obligation
ART. 1264. The courts shall determine whether, under the has a claim for damages against the other, the former may
circumstances, the partial loss of the object of the obligation ART. 1273. The renunciation of the principal debt shall set it off by proving his right to said damages and the amount
is so important as to extinguish the obligation. (n) extinguish the accessory obligations; but the waiver of the there- of. (n)
latter shall leave the former in force. (1190)
ART. 1265. Whenever the thing is lost in the possession of ART. 1284. When one or both debts are rescissible or void-
the debtor, it shall be presumed that the loss was due to his ART. 1274. It is presumed that the accessory obligation of able, they may be compensated against each other before
they are judicially rescinded or avoided. (n) ART. 1292. In order that an obligation may be extinguished by person. (n)
another which substitutes the same, it is imperative that it be ART. 1302. It is presumed that there is legal subrogation:
ART. 1285. The debtor who has consented to the assignment so declared in unequivocal terms, or that the old and the new (1) When a creditor pays another creditor who is
of rights made by a creditor in favor of a third person, can- obligations be on every point incompatible with each other. preferred, even without the debtor’s knowledge;
not set up against the assignee the compensation which (1204) (2) When a third person, not interested in the
would pertain to him against the assignor, unless the obligation, pays with the express or tacit approval of the
assignor was notified by the debtor at the time he gave his ART. 1293. Novation which consists in substituting a new debtor;
consent, that he reserved his right to the compensation. debtor in the place of the original one, may be made even (3) When, even without the knowledge of the debtor,
If the creditor communicated the cession to him but with- out the knowledge or against the will of the latter, but a per- son interested in the fulfillment of the obligation pays,
the debtor did not consent thereto, the latter may set up the not with- out the consent of the creditor. Payment by the new without prejudice to the effects of confusion as to the latter’s
compensation of debts previous to the cession, but not of debtor gives him the rights mentioned in Articles 1236 and share. (1210a)
subsequent ones. 1237. (1205a)
If the assignment is made without the knowledge of ART. 1303. Subrogation transfers to the person subrogated
the debtor, he may set up the compensation of all credits ART. 1294. If the substitution is without the knowledge or the credit with all the rights thereto appertaining, either
prior to the same and also later ones until he had knowledge against the will of the debtor, the new debtor’s insolvency or against the debtor or against third persons, be they
of the assignment. (1198a) non-fulfillment of the obligation shall not give rise to any guarantors or pos- sessors of mortgages, subject to
liability on the part of the original debtor. (n) stipulation in a conventional subrogation. (1212a)
ART. 1286. Compensation takes place by operation of law,
even though the debts may be payable at different places, but ART. 1295. The insolvency of the new debtor, who has been ART. 1304. A creditor, to whom partial payment has been
there shall be an indemnity for expenses of exchange or proposed by the original debtor and accepted by the creditor, made, may exercise his right for the remainder, and he shall
transportation to the place of payment. (1199a) shall not revive the action of the latter against the original be preferred to the person who has been subrogated in his
obligor, except when said insolvency was already existing place in virtue of the partial payment of the same credit.
ART. 1287. Compensation shall not be proper when one of and of public knowledge, or known to the debtor, when he (1213)
the debts arises from a depositum or from the obligations of delegated his debt. (1206a)
a depositary or of a bailee in commodatum. ART. 1305. A contract is a meeting of minds between two
Neither can compensation be set up against a ART. 1296. When the principal obligation is extinguished in persons whereby one binds himself, with respect to the
creditor who has a claim for support due by gratuitous title, consequence of a novation, accessory obligations may other, to give something or to render some service. (1254a)
without prejudice to the provisions of paragraph 2 of Article subsist only insofar as they may benefit third persons who
301. (1200a) did not give their consent. (1207) ART. 1306. The contracting parties may establish such
stipulations, clauses, terms and conditions as they may
ART. 1288. Neither shall there be compensation if one of the ART. 1297. If the new obligation is void, the original one shall deem convenient, provided they are not contrary to law,
debts consists in civil liability arising from a penal offense. subsist, unless the parties intended that the former relation morals, good customs, public order, or public policy. (1255a)
(n) should be extinguished in any event. (n)
ART. 1307. Innominate contracts shall be regulated by the
ART. 1289. If a person should have against him several debts ART. 1298. The novation is void if the original obligation was stipulations of the parties, by the provisions of Titles I and II
which are susceptible of compensation, the rules on the void, except when annulment may be claimed only by the of this Book, by the rules governing the most analogous
application of payments shall apply to the order of the debtor, or when ratification validates acts which are voidable. nominate contracts, and by the customs of the place. (n)
compensation. (1201) (1208a)
ART. 1308. The contracts must bind both contracting par-
ART. 1299. If the original obligation was subject to a sus- ties; its validity or compliance cannot be left to the will of one
ART. 1290. When all the requisites mentioned in Article 1279 pensive or resolutory condition, the new obligation shall be of them. (1256a)
are present, compensation takes effect by operation of law, un- der the same condition, unless it is otherwise stipulated.
and extinguishes both debts to the concurrent amount, even (n) ART. 1310. The determination shall not be obligatory if it is
though the creditors and debtors are not aware of the evidently inequitable. In such case, the courts shall decide
compensation. (1202a) ART. 1300. Subrogation of a third person in the rights of the what is equitable under the circumstances. (n)
creditor is either legal or conventional. The former is not
ART. 1291. Obligations may be modified by: presumed, except in cases expressly mentioned in this Code; ART. 1311. Contracts take effect only between the parties,
(1) Changing their object or principal conditions; the latter must be clearly established in order that it may take their assigns and heirs, except in case where the rights and
(2) Substituting the person of the debtor; effect. (1209a) obligations arising from the contract are not transmissible by
(3) Subrogating a third person in the rights of the creditor. their nature, or by stipulation or by provision of law. The heir
(1203) ART. 1301. Conventional subrogation of a third person re- is not liable beyond the value of the property he received
quires the consent of the original parties and of the third from the decedent.
 If a contract should contain some stipulation in favor counter-offer. ART. 1331. In order that mistake may invalidate consent, it
of a third person, he may demand its fulfillment provided he Acceptance made by letter or telegram does not bind should refer to the substance of the thing which is the object
communicated his acceptance to the obligor before its the offerer except from the time it came to his knowledge. of the contract, or to those conditions which have principally
revocation. A mere incidental benefit or interest of a person The contract, in such a case, is presumed to have been moved one or both parties to enter into the contract.
is not sufficient. The contracting parties must have clearly entered into in the place where the offer was made. (1262a) Mistake as to the identity or qualifications of one of
and deliberately conferred a favor upon a third person. the parties will vitiate consent only when such identity or
(1257a) ART. 1320. An acceptance may be express or implied. (n) qualifications have been the principal cause of the contract.
A simple mistake of account shall give rise to its correction.
ART. 1312. In contracts creating real rights, third persons ART. 1321. The person making the offer may fix the time, (1266a)
who come into possession of the object of the contract are place, and manner of acceptance, all of which must be
bound thereby, subject to the provisions of the Mortgage Law complied with. (n) ART. 1332. When one of the parties is unable to read, or if the
and the Land Registration Laws.19 (n) contract is in a language not understood by him, and mis-
ART. 1322. An offer made through an agent is accepted from take or fraud is alleged, the person enforcing the contract
ART. 1313. Creditors are protected in cases of contracts in- the time acceptance is communicated to him. (n) must show that the terms thereof have been fully explained
tended to defraud them. (n) to the former. (n)
ART. 1323. An offer becomes ineffective upon the death, civil
ART. 1314. Any third person who induces another to violate interdiction, insanity, or insolvency of either party before ART. 1333. There is no mistake if the party alleging it knew
his contract shall be liable for damages to the other acceptance is conveyed. (n) the doubt, contingency or risk affecting the object of the con-
contracting party. tract. (n)
ART. 1324. When the offerer has allowed the offeree a certain
ART. 1315. Contracts are perfected by mere consent, and period to accept, the offer may be withdrawn at any time ART. 1334. Mutual error as to the legal effect of an agreement
from that moment the parties are bound not only to the before acceptance by communicating such withdrawal, when the real purpose of the parties is frustrated, may vitiate
fulfillment of what has been expressly stipulated but also to except when the option is founded upon a consideration, as consent.
all the consequences which, according to their nature, may something paid or promised. (n)
be in keeping with good faith, usage and law. (1258) ART. 1335. There is violence when in order to wrest con-
ART. 1325. Unless it appears otherwise, business sent, serious or irresistible force is employed.
ART. 1316. Real contracts, such as deposit, pledge and advertisements of things for sale are not definite offers, but There is intimidation when one of the contracting
commodatum, are not perfected until the delivery of the mere invitations to make an offer. (n) parties is compelled by a reasonable and well-grounded fear
object of the obligation. (n) of an imminent and grave evil upon his person or property, or
ART. 1326. Advertisements for bidders are simply invitations upon the person or property of his spouse, descendants or
ART. 1317. No one may contract in the name of another to make proposals, and the advertiser is not bound to accept ascendants, to give his consent.
without being authorized by the latter, or unless he has by the highest or lowest bidder, unless the contrary appears. (n) To determine the degree of the intimidation, the age,
law a right to represent him. sex and condition of the person shall be borne in mind.
A contract entered into in the name of another by ART. 1327. The following cannot give consent to a contract: A threat to enforce one’s claim through competent
one who has no authority or legal representation, or who has (1) Unemancipated minors; authority, if the claim is just or legal, does not vitiate consent.
acted be- yond his powers, shall be unenforceable, unless it (2) Insane or demented persons, and deaf-mutes who do not (1267a)
is ratified, expressly or impliedly, by the person on whose know how to write. (1263a)
behalf it has been executed, before it is revoked by the other ART. 1336. Violence or intimidation shall annul the obligation,
contracting party. (1259a) ART. 1328. Contracts entered into during a lucid interval are although it may have been employed by a third person who
valid. Contracts agreed to in a state of drunkenness or during did not take part in the contract. (1268)
ART. 1318. There is no contract unless the following a hypnotic spell are voidable. (n)
requisites concur: ART. 1337. There is undue influence when a person takes
(1) Consent of the contracting parties; ART. 1329. The incapacity declared in Article 1327 is subject improper advantage of his power over the will of another,
(2) Object certain which is the subject matter of the to the modifications determined by law, and is understood to depriving the latter of a reasonable freedom of choice. The
contract; be without prejudice to special disqualifications established following circumstances shall be considered: the
(3) Cause of the obligation which is established. in the laws. (1264) confidential, family, spiritual and other relations between the
(1261) parties, or the fact that the person alleged to have been
ART. 1330. A contract where consent is given through unduly influenced was suffering from mental weakness, or
ART. 1319. Consent is manifested by the meeting of the offer mistake, violence, intimidation, undue influence, or fraud is was ignorant or in financial distress. (n)
and the acceptance upon the thing and the cause which are voidable. (1265a)
to constitute the contract. The offer must be certain and the ART. 1338. There is fraud when, through insidious words or
acceptance absolute. A qualified acceptance constitutes a machinations of one of the contracting parties, the other is
induced to enter into a contract which, without them, he ART. 1349. The object of every contract must be determinate of an interest therein are governed by Articles 1403, No. 2,
would not have agreed to. (1269) as to its kind. The fact that the quantity is not determinate and 1405;
shall not be an obstacle to the existence of the contract, pro- (2) The cession, repudiation or renunciation of hereditary
ART. 1339. Failure to disclose facts, when there is a duty to vided it is possible to determine the same, without the need rights or of those of the conjugal partnership of gains;
reveal them, as when the parties are bound by confidential of a new contract between the parties. (1273) (3) The power to administer property, or any other power
relations, constitutes fraud. (n) which has for its object an act appearing or which should ap-
ART. 1350. In onerous contracts the cause is understood to pear in a public document, or should prejudice a third
ART. 1340. The usual exaggerations in trade, when the other be, for each contracting party, the prestation or promise of a person;
party had an opportunity to know the facts, are not in them- thing or service by the other; in remuneratory ones, the (4) The cession of actions or rights proceeding from an act
selves fraudulent. (n) service or benefit which is remunerated; and in contracts of appearing in a public document.
pure beneficence, the mere liberality of the benefactor. (1274) All other contracts where the amount involved exceeds five
ART. 1341. A mere expression of an opinion does not signify hundred pesos must appear in writing, even a private one.
fraud, unless made by an expert and the other party has ART. 1351. The particular motives of the parties in entering But sales of goods, chattels or things in action are governed
relied on the former’s special knowledge. (n) into a contract are different from the cause thereof. (n) by Articles 1403, No. 2 and 1405. (1280a)

ART. 1342. Misrepresentation by a third person does not ART. 1352. Contracts without cause, or with unlawful cause, ART. 1359. When, there having been a meeting of the minds
vitiate consent, unless such misrepresentation has created produce no effect whatever. The cause is unlawful if it is of the parties to a contract, their true intention is not
substantial mistake and the same is mutual. (n) contrary to law, morals, good customs, public order or public expressed in the instrument purporting to embody the
poli- cy. (1275a) agreement, by rea- son of mistake, fraud, inequitable conduct
ART. 1343. Misrepresentation made in good faith is not or accident, one of the parties may ask for the reformation of
fraudulent but may constitute error. (n) ART. 1353. The statement of a false cause in contracts shall the instrument to the end that such true intention may be
render them void, if it should not be proved that they were expressed.
ART. 1344. In order that fraud may make a contract void- founded upon another cause which is true and lawful. (1276) If mistake, fraud, inequitable conduct, or accident
able, it should be serious and should not have been has pre- vented a meeting of the minds of the parties, the
employed by both contracting parties. ART. 1354. Although the cause is not stated in the contract, it proper remedy is not reformation of the instrument but
Incidental fraud only obliges the person employing it is presumed that it exists and is lawful, unless the debtor annulment of the con- tract.
to pay damages. (1270) proves the contrary. (1277)
ART. 1360. The principles of the general law on the
ART. 1345. Simulation of a contract may be absolute or ART. 1355. Except in cases specified by law, lesion or in- reformation of instruments are hereby adopted insofar as
relative. The former takes place when the parties do not adequacy of cause shall not invalidate a contract, unless they are not in conflict with the provisions of this Code.
intend to be bound at all; the latter, when the parties conceal there has been fraud, mistake or undue influence. (n)
their true agreement. (n) ART. 1361. When a mutual mistake of the parties causes the
ART. 1356. Contracts shall be obligatory, in whatever form failure of the instrument to disclose their real agreement, said
ART. 1346. An absolutely simulated or fictitious contract is they may have been entered into, provided all the essential instrument may be reformed.
void. A relative simulation, when it does not prejudice a third requisites for their validity are present. However, when the
person and is not intended for any purpose contrary to law, law re- quires that a contract be in some form in order that it ART. 1362. If one party was mistaken and the other acted
morals, good customs, public order or public policy binds may be valid or enforceable, or that a contract be proved in a fraudulently or inequitably in such a way that the instrument
the parties to their real agreement. (n) certain way, that requirement is absolute and indispensable. does not show their true intention, the former may ask for the
In such cases, the right of the parties stated in the following reformation of the instrument.
ART. 1347. All things which are not outside the commerce of article can- not be exercised. (1278a)
men, including future things, may be the object of a contract. ART. 1363. When one party was mistaken and the other knew
All rights which are not in transmissible may also be the ART. 1357. If the law requires a document or other special or believed that the instrument did not state their real
object of contracts. form, as in the acts and contracts enumerated in the agreement, but concealed that fact from the former, the
No contract may be entered into upon future following article, the contracting parties may compel each instrument may be reformed.
inheritance except in cases expressly authorized by law. other to observe that form, once the contract has been
All services which are not contrary to law, morals, perfected. This right may be exercised simultaneously with ART. 1364. When through the ignorance, lack of skill,
good customs, public order or public policy may likewise be the action upon the contract. (1279a) negligence or bad faith on the part of the person drafting the
the object of a contract. (1271a) instrument or of the clerk or typist, the instrument does not
ART. 1358. The following must appear in a public document: express the true intention of the parties, the courts may order
ART. 1348. Impossible things or services cannot be the (1) Acts and contracts which have for their object the that the instrument be reformed.
object of contracts. (1272) creation, transmission, modification or extinguishment of
real rights over immovable property; sales of real property or ART. 1365. If two parties agree upon the mortgage or pledge
of real or personal property, but the instrument states that ART. 1376. The usage or custom of the place shall be borne can be carried out only when he who demands rescission
the property is sold absolutely or with a right of repurchase, in mind in the interpretation of the ambiguities of a contract, can return whatever he may be obliged to restore.
reformation of the instrument is proper. and shall fill the omission of stipulations which are ordinarily Neither shall rescission take place when the things which are
established. (1287) the object of the contract are legally in the possession of
ART. 1366. There shall be no reformation in the following third persons who did not act in bad faith.
cases: ART. 1377. The interpretation of obscure words or In this case, indemnity for damages may be demanded from
(1) Simple donations inter vivos wherein no condition is stipulations in a contract shall not favor the party who the person causing the loss. (1295)
imposed; caused the obscurity. (1288) ART. 1386. Rescission referred to in Nos. 1 and 2 of Article
(2) Wills; ART. 1378. When it is absolutely impossible to settle doubts 1381 shall not take place with respect to contracts approved
(3) When the real agreement is void. by the rules established in the preceding articles, and the by the courts. (1296a)
doubts refer to incidental circumstances of a gratuitous con- ART. 1387. All contracts by virtue of which the debtor
ART. 1367. When one of the parties has brought an action to tract, the least transmission of rights and interest shall alienates property by gratuitous title are presumed to have
enforce the instrument, he cannot subsequently ask for its prevail. If the contract is onerous, the doubt shall be settled been entered into in fraud of creditors, when the donor did
reformation. in favor of the greatest reciprocity of interests. not reserve sufficient property to pay all debts contracted
If the doubts are cast upon the principal object of the before the donation.
ART. 1368. Reformation may be ordered at the instance of contract in such a way that it cannot be known what may Alienations by onerous title are also presumed fraudulent
either party or his successors in interest, if the mistake was have been the intention or will of the parties, the contract when made by persons against whom some judgment has
mutual; otherwise, upon petition of the injured party, or his shall be null and void. (1289) been rendered in any instance or some writ of attachment
heirs and assigns. has been issued. The decision or attachment need not refer
ART. 1379. The principles of interpretation stated in Rule 123 to the property alienated, and need not have been obtained
ART. 1369. The procedure for the reformation of instruments of the Rules of Court shall likewise be observed in the by the party seeking the rescission.
shall be governed by rules of court to be promulgated by the construction of contracts. (n) In addition to these presumptions, the design to defraud
Supreme Court. ART. 1380. Contracts validly agreed upon may be rescinded creditors may be proved in any other manner recognized by
in the cases established by law. (1290) the law of evidence. (1297a)
ART. 1370. If the terms of a contract are clear and leave no ART. 1388. Whoever acquires in bad faith the things alienated
doubt upon the intention of the contracting parties, the literal ART. 1381. The following contracts are rescissible: in fraud of creditors, shall indemnify the latter for damages
meaning of its stipulations shall control. (1) Those which are entered into by guardians whenever the suffered by them on account of the alienation, whenever, due
If the words appear to be contrary to the evident wards whom they represent suffer lesion by more than one- to any cause, it should be impossible for him to return them.
intention of the parties, the latter shall prevail over the fourth of the value of the things which are the object thereof; If there are two or more alienations, the first acquirer shall be
former. (1281) (2) Those agreed upon in representation of absentees, if the liable first, and so on successively. (1298a)
latter suffer the lesion stated in the preceding number; ART. 1389. The action to claim rescission must be
ART. 1371. In order to judge the intention of the contracting (3) Those undertaken in fraud of creditors when the latter commenced within four years.
parties, their contemporaneous and subsequent acts shall be cannot in any other manner collect the claims due them; For persons under guardianship and for absentees, the
principally considered. (1282) (4) Those which refer to things under litigation if they have period of four years shall not begin until the termination of
been entered into by the defendant without the knowledge the former’s incapacity, or until the domicile of the latter is
ART. 1372. However general the terms of a contract may be, and approval of the litigants or of competent judicial known. (1299)
they shall not be understood to comprehend things that are authority; ART. 1390. The following contracts are voidable or an-
distinct and cases that are different from those upon which (5) All other contracts specially declared by law to be subject nullable, even though there may have been no damage to the
the parties intended to agree. (1283) to rescission. (1291a) contracting parties:
(1) Those where one of the parties is incapable of giving
ART. 1373. If some stipulation of any contract should admit ART. 1382. Payments made in a state of insolvency for consent to a contract;
of several meanings, it shall be understood as bearing that obligations to whose fulfillment the debtor could not be (2) Those where the consent is vitiated by mistake, violence,
im- port which is most adequate to render it effectual. (1284) compelled at the time they were effected, are also rescissible. intimidation, undue influence or fraud.
(1292)
ART. 1374. The various stipulations of a contract shall be ART. 1383. The action for rescission is subsidiary; it cannot These contracts are binding, unless they are annulled by a
interpreted together, attributing to the doubtful ones that be instituted except when the party suffering damage has no proper action in court. They are susceptible of ratification. (n)
sense which may result from all of them taken jointly. (1285) other legal means to obtain reparation for the same. (1294) ART. 1391. The action for annulment shall be brought within
ART. 1384. Rescission shall be only to the extent necessary four years.
ART. 1375. Words which may have different significations to cover the damages caused. (n) This period shall begin:
shall be understood in that which is most in keeping with the ART. 1385. Rescission creates the obligation to return the In cases of intimidation, violence or undue influence, from
nature and object of the contract. (1286) things which were the object of the contract, together with the time the defect of the consent ceases.
their fruits, and the price with its interest; consequently, it
In case of mistake or fraud, from the time of the discovery of restore what in virtue of the decree of annulment he is bound ART. 1407. In a contract where both parties are incapable of
the same. to return, the other cannot be compelled to comply with what giving consent, express or implied ratification by the parent,
And when the action refers to contracts entered into by is incumbent upon him. (1308) or guardian, as the case may be, of one of the contracting
minors or other incapacitated persons, from the time the parties shall give the contract the same effect as if only one
guardianship ceases. (1301a) ART. 1403. The following contracts are unenforceable, un- of them were incapacitated.
ART. 1392. Ratification extinguishes the action to annul a less they are ratified: If ratification is made by the parents or guardians, as
voidable contract. (1309a) (1) Those entered into the name of another person by one the case may be, of both contracting parties, the contract
ART. 1393. Ratification may be effected expressly or tacitly. It who has been given no authority or legal representation, or shall be validated from the inception.
is understood that there is a tacit ratification if, with who has acted beyond his powers;
knowledge of the reason which renders the contract voidable (2) Those that do not comply with the Statute of Frauds as set ART. 1408. Unenforceable contracts cannot be assailed by
and such reason having ceased, the person who has a right forth in this number. In the following cases an agreement third persons.
to invoke it should execute an act which necessarily implies hereafter made shall be unenforceable by action, unless the
an intention to waive his right. (1311a) same, or some note or memorandum thereof, be in writing, ART. 1409. The following contracts are inexistent and void
ART. 1394. Ratification may be effected by the guardian of and subscribed by the party charged, or by his agent; from the beginning:
the incapacitated person. (n) evidence, therefore, of the agreement cannot be received (1) Those whose cause, object or purpose is contrary to law,
ART. 1395. Ratification does not require the conformity of the without the writing, or a secondary evidence of its contents: morals, good customs, public order or public policy;
contracting party who has no right to bring the action for (a) An agreement that by its terms is not to be per- (2) Those which are absolutely simulated or fictitious;
annulment. (1312) formed within a year from the making thereof; (3) Those whose cause or object did not exist at the time of
ART. 1396. Ratification cleanses the contract from all its (b) A special promise to answer for the debt, default, the transaction;
defects from the moment it was constituted. (1313) or miscarriage of another; (4) Those whose object is outside the commerce of men;
ART. 1397. The action for the annulment of contracts may be (c) An agreement made in consideration of marriage, (5) Those which contemplate an impossible service;
instituted by all who are thereby obliged principally or other than a mutual promise to marry; (6) Those where the intention of the parties relative to the
subsidiarily. However, persons who are capable cannot (d) An agreement for the sale of goods, chattels, or principal object of the contract cannot be ascertained;
allege the incapacity of those with whom they contracted; nor things in action, at a price not less than Five hundred pesos, (7) Those expressly prohibited or declared void by law.
can those who exerted intimidation, violence, or undue unless the buyer accept and receive part of such goods and
influence, or employed fraud, or caused mistake base their chattels, or the evidences, or some of them, of such things in These contracts cannot be ratified. Neither can the right to
action upon these flaws of the contract. (1302a) action, or pay at the time some part of the purchase money; set up the defense of illegality be waived.
ART. 1398. An obligation having been annulled, the but when a sale is made by auction and entry is made by the
contracting parties shall restore to each other the things auctioneer in his sales book, at the time of the sale, of the ART. 1410. The action or defense for the declaration of the
which have been the subject matter of the contract, with their amount and kind of property sold, terms of sale, price, names inexistence of a contract does not prescribe.
fruits, and the price with its interest, except in cases provided of the purchasers and person on whose account the sale is
by law. made, it is a sufficient memorandum; ART. 1411. When the nullity proceeds from the illegality of
In obligations to render service, the value thereof shall be the (e) An agreement for the leasing for a longer period the cause or object of the contract, and the act constitutes a
basis for damages. (1303a) than one year, or for the sale of real property or of an interest criminal offense, both parties being in pari delicto, they shall
ART. 1399. When the defect of the contract consists in the therein; have no action against each other, and both shall be
incapacity of one of the parties, the incapacitated person is (f) A representation as to the credit of a third person. prosecuted. Moreover, the provisions of the Penal Code
not obliged to make any restitution except insofar as he has (3) Those where both parties are incapable of giving con- relative to the disposal of effects or instruments of a crime
been benefited by the thing or price received by him. (1304) sent to a contract. shall be applicable to the things or the price of the contract.
ART. 1400. Whenever the person obliged by the decree of This rule shall be applicable when only one of the parties is
annulment to return the thing can not do so because it has ART. 1404. Unauthorized contracts are governed by Article guilty; but the innocent one may claim what he has given,
been lost through his fault, he shall return the fruits received 1317 and the principles of agency in Title X of this Book. and shall not be bound to comply with his promise. (1305)
and the value of the thing at the time of the loss, with interest
from the same date. (1307a) ART. 1405. Contracts infringing the Statute of Frauds, ART. 1412. If the act in which the unlawful or forbidden cause
ART. 1401. The action for annulment of contracts shall be referred to in No. 2 of Article 1403, are ratified by the failure consists does not constitute a criminal offense, the following
extinguished when the thing which is the object thereof is to object to the presentation of oral evidence to prove the rules shall be observed:
lost through the fraud or fault of the person who has a right same, or by the acceptance of benefits under them. (1) When the fault is on the part of both contracting par- ties,
to institute the proceedings. neither may recover what he has given by virtue of the con-
If the right of action is based upon the incapacity of any one ART. 1406. When a contract is enforceable under the Statute tract, or demand the performance of the other’s undertaking;
of the contracting parties, the loss of the thing shall not be an of Frauds, and a public document is necessary for its (2) When only one of the contracting parties is at fault, he
obstacle to the success of the action, unless said loss took registration in the Registry of Deeds, the parties may avail cannot recover what he has given by reason of the contract,
place through the fraud or fault of the plaintiff. (1314a) themselves of the right under Article 1357. or ask for the fulfillment of what has been promised him. The
ART. 1402. As long as one of the contracting parties does not other, who is not at fault, may demand the return of what he
has given without any obligation to comply with his promise. ART. 1423. Obligations are civil or natural. Civil obligations irrevocable.
(1306) give a right of action to compel their performance. Natural
obligations, not being based on positive law but on equity ART. 1431. Through estoppel an admission or representation
ART. 1413. Interest paid in excess of the interest allowed by and natural law, do not grant a right of action to enforce their is rendered conclusive upon the person making it, and
the usury laws may be recovered by the debtor, with interest performance, but after voluntary fulfillment by the obligor, cannot be denied or disproved as against the person relying
thereon from the date of the payment. they authorize the retention of what has been delivered or thereon.
rendered by reason thereof. Some natural obligations are set
ART. 1414. When money is paid or property delivered for an forth in the following articles. ART. 1432. The principles of estoppel are hereby adopted
illegal purpose, the contract may be repudiated by one of the insofar as they are not in conflict with the provisions of this
parties before the purpose has been accomplished, or before ART. 1424. When a right to sue upon a civil obligation has Code, the Code of Commerce, the Rules of Court and special
any damage has been caused to a third person. In such case, lapsed by extinctive prescription, the obligor who voluntarily laws.
the courts may, if the public interest will thus be subserved, performs the contract cannot recover what he has delivered
al- low the party repudiating the contract to recover the or the value of the service he has rendered. ART. 1433. Estoppel may be in pais or by deed.
money or property.
ART. 1425. When without the knowledge or against the will of ART. 1434. When a person who is not the owner of a thing
ART. 1415. Where one of the parties to an illegal contract is the debtor, a third person pays a debt which the obligor is sells or alienates and delivers it, and later the seller or
incapable of giving consent, the courts may, if the interest of not legally bound to pay because the action thereon has pre- grantor acquires title thereto, such title passes by operation
justice so demands, allow recovery of money or property scribed, but the debtor later voluntarily reimburses the third of law to the buyer or grantee.
delivered by the incapacitated person. person, the obligor cannot recover what he has paid.
ART. 1435. If a person in representation of another sells or
ART. 1416. When the agreement is not illegal per se but is ART. 1426. When a minor between eighteen and twenty- one alienates a thing, the former cannot subsequently set up his
merely prohibited, and the prohibition by the law is designed years of age who has entered into a contract without the own title as against the buyer or grantee.
for the protection of the plaintiff, he may, if public policy is consent of the parent or guardian, after the annulment of the
thereby enhanced, recover what he has paid or delivered. contract voluntarily returns the whole thing or price received, ART. 1436. A lessee or a bailee is estopped from asserting
notwithstanding the fact that he has not been benefited title to the thing leased or received, as against the lessor or
ART. 1417. When the price of any article or commodity is thereby, there is no right to demand the thing or price thus bailor.
determined by statute, or by authority of law, any person returned.
paying any amount in excess of the maximum price allowed ART. 1437. When in a contract between third persons
may recover such excess. ART. 1427. When a minor between eighteen and twenty-one concerning immovable property, one of them is misled by a
years of age, who has entered into a contract without the person with respect to the ownership or real right over the
ART. 1418. When the law fixes, or authorizes the fixing of the con- sent of the parent or guardian, voluntarily pays a sum of real estate, the latter is precluded from asserting his legal
maximum number of hours of labor, and a contract is entered money or delivers a fungible thing in fulfillment of the title or interest therein, provided all these requisites are
into whereby a laborer undertakes to work longer than the obligation, there shall be no right to recover the same from present:
maximum thus fixed, he may demand additional the obligee who has spent or consumed it in good faith. (1) There must be fraudulent representation or wrongful
compensation for service rendered beyond the time limit. (1160a) concealment of facts known to the party estopped;
(2) The party precluded must intend that the other should act
ART. 1419. When the law sets, or authorizes the setting of a ART. 1428. When, after an action to enforce a civil obligation upon the facts as misrepresented;
minimum wage for laborers, and a contract is agreed upon by has failed, the defendant voluntarily performs the obligation,
which a laborer accepts a lower wage, he shall be entitled to he cannot demand the return of what he has delivered or the (3) The party misled must have been unaware of the true
recover the deficiency. payment of the value of the service he has rendered. facts;

ART. 1420. In case of a divisible contract, if the illegal terms ART. 1429. When a testate or intestate heir voluntarily pays a (4) The party defrauded must have acted in accordance with
can be separated from the legal ones, the latter may be debt of the decedent exceeding the value of the property the misrepresentation.
enforced. which he received by will or by the law of intestacy from the
estate of the deceased, the payment is valid and cannot be
ART. 1438. One who has allowed another to assume apparent
ART. 1421. The defense of illegality of contracts is not avail- rescinded by the payer.
ownership of personal property for the purpose of making
able to third persons whose interests are not directly
any transfer of it, cannot, if he received the sum for which a
affected. ART. 1430. When a will is declared void because it has not
pledge has been constituted, set up his own title to defeat the
been executed in accordance with the formalities required by
pledge of the property, made by the other to a pledgee who
ART. 1422. A contract which is the direct result of a previous law, but one of the intestate heirs, after the settlement of the
received the same in good faith and for value.
illegal contract, is also void and inexistent. debts of the deceased, pays a legacy in compliance with a
clause in the defective will, the payment is effective and
ART. 1439. Estoppel is effective only as between the parties
thereto or their successors in interest.