TITLE I OBLIGATIONS

ART. 1164. The creditor has a right to the fruits of

Chapter I GENERAL PROVISIONS the thing from the time the obligation to deliver it
arises. However, he shall acquire no real right
ARTICLE 1156. An obligation is a juridical over it until the same has been delivered to him.
necessity to give, to do or not to do. (n) (1095)

ART. 1157. Obligations arise from: ART. 1165. When what is to be delivered is a
(1) Law; determinate thing, the creditor, in addition to the
(2) Contracts; right granted him by Article 1170, may compel the
(3) Quasi-contracts; debtor to make the delivery.
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (1089a) If the thing is indeterminate or generic, he
may ask that the obligation be complied with at
ART. 1158. Obligations derived from law are not the expense of the debtor.
presumed. Only those expressly determined in
this Code or in special laws are demandable, and If the obligor delays, or has promised to
shall be regulated by the precepts of the law deliver the same thing to two or more persons
which establishes them; and as to what has not who do not have the same interest, he shall be
been foreseen, by the provisions of this Book. responsible for any fortuitous event until he has
(1090) effected the delivery. (1096)

ART. 1159. Obligations arising from contracts ART. 1166. The obligation to give a determinate
have the force of law between the contracting thing includes that of delivering all its accessions
parties and should be complied with in good faith. and accessories, even though they may not have
(1091a) been mentioned. (1097a)

ART. 1160. Obligations derived from ART. 1167. If a person obliged to do something
quasi-contracts shall be subject to the provisions fails to do it, the same shall be executed at his
of Chapter 1, Title XVII, of this Book. (n) cost.
This same rule shall be observed if he
ART. 1161. Civil obligations arising from criminal does it in contravention of the tenor of the
offenses shall be governed by the penal laws,14 obligation. Furthermore, it may be decreed that
subject to the provisions of Article 2177,15 and of what has been poorly done be undone. (1098)
the pertinent provisions of Chapter 2, Preliminary
Title on Human Relations,16 and of Title XVIII of ART. 1168. When the obligation consists in not
this Book, regulating damages. (1092a) doing, and the obligor does what has been
forbidden him, it shall also be undone at his
ART. 1162. Obligations derived from quasi-delicts expense. (1099a)
shall be governed by the provisions of Chapter 2,
Title XVII of this Book, and by special laws. ART. 1169. Those obliged to deliver or to do
(1093a) something incur in delay from the time the obligee
judicially or extra-judicially demands from them
Chapter 2 NATURE AND EFFECT OF the fulfillment of their obligation.
OBLIGATIONS However, the demand by the creditor shall
not be necessary in order that delay may exist:
ART. 1163. Every person obliged to give
something is also obliged to take care of it with (1) When the obligation or the law expressly so
the proper diligence of a good father of a family, declares; or
unless the law or the stipulation of the parties (2) When from the nature and the circumstances
requires another standard of care. (1094a) of the obligation it appears that the designation of
the time when the thing is to be delivered or the
service is to be rendered was a controlling motive
for the establishment of the contract; or
(3) When demand would be useless, as when the ART. 1176. The receipt of the principal by the
obligor has rendered it beyond his power to creditor, without reservation with respect to the
perform. interest, shall give rise to the presumption that
said interest has been paid.
In reciprocal obligations, neither party
incurs in delay if the other does not comply or is The receipt of a later installment of a debt
not ready to comply in a proper manner with what without reservation as to prior installments, shall
is incumbent upon him. From the moment one of likewise raise the presumption that such
the parties fulfills his obligation, delay by the other installments have been paid. (1110a)
begins. (1100a)
ART. 1177. The creditors, after having pursued
ART. 1170. Those who in the performance of their the property in possession of the debtor to satisfy
obligations are guilty of fraud, negligence, or their claims, may exercise all the rights and bring
delay, and those who in any manner contravene all the actions of the latter for the same purpose,
the tenor thereof, are liable for damages. (1101) save those which are inherent in his person; they
may also impugn the acts which the debtor may
ART. 1171. Responsibility arising from fraud is have done to defraud them. (1111)
demandable in all obligations. Any waiver of an
action for future fraud is void. (1102a) ART. 1178. Subject to the laws, all rights acquired
in virtue of an obligation are transmissible, if there
ART. 1172. Responsibility arising from negligence has been no stipulation to the contrary. (1112)
in the performance of every kind of obligation is
also demandable, but such liability may be Chapter 3 DIFFERENT KINDS OF
regulated by the courts, according to the OBLIGATIONS
circumstances. (1103)
SECTION 1. — Pure and Conditional
ART. 1173. The fault or negligence of the obligor Obligation
consists in the omission of that diligence which is
required by the nature of the obligation and ART. 1179. Every obligation whose performance
corresponds with the circumstances of the does not depend upon a future or uncertain
persons, of the time and of the place. When event, or upon a past event unknown to the
negligence shows bad faith, the provisions of parties, is demandable at once.
Articles 1171 and 2201, paragraph 2, shall apply.
Every obligation which contains a
If the law or contract does not state the resolutory condition shall also be demandable,
diligence which is to be observed in the without prejudice to the effects of the happening
performance, that which is expected of a good of the event. (1113)
father of a family shall be required. (1104a)
ART. 1180. When the debtor binds himself to pay
ART. 1174. Except in cases expressly specified when his means permit him to do so, the
by the law, or when it is otherwise declared by obligation shall be deemed to be one with a
stipulation, or when the nature of the obligation period, subject to the provisions of Article 1197.
requires the assumption of risk, no person shall (n)
be responsible for those events which could not
be foreseen, or which, though foreseen, were ART. 1181. In conditional obligations, the
inevitable. (1105a) acquisition of rights, as well as the
extinguishment or loss of those already acquired,
ART. 1175. Usurious transactions shall be shall depend upon the happening of the event
governed by special laws. (n) which constitutes the condition. (1114)
 inferred that the intention of the person
constituting the same was different.
ART. 1182. When the fulfillment of the condition
depends upon the sole will of the debtor, the In obligations to do and not to do, the
conditional obligation shall be void. If it depends courts shall determine, in each case, the
upon chance or upon the will of a third person, retroactive effect of the condition that has been
the obligation shall take effect in conformity with complied with. (1120)
the provisions of this Code. (1115)
ART. 1188. The creditor may, before the
ART. 1183. Impossible conditions, those contrary fulfillment of the condition, bring the appropriate
to good customs or public policy and those actions for the preservation of his right.
prohibited by law shall annul the obligation which
depends upon them. If the obligation is divisible, The debtor may recover what during the
that part thereof which is not affected by the same time he has paid by mistake in case of a
impossible or unlawful condition shall be valid. suspensive condition. (1121a)

The condition not to do an impossible ART. 1189. When the conditions have been
thing shall be considered as not having been imposed with the intention of suspending the
agreed upon. (1116a) efficacy of an obligation to give, the following
rules shall be observed in case of the
ART. 1184. The condition that some event improvement, loss or deterioration of the thing
happen at a determinate time shall extinguish the during the pendency of the condition:
obligation as soon as the time expires or if it has
become indubitable that the event will not take (1) If the thing is lost without the fault of the
place. (1117) debtor, the obligation shall be extinguished;
(2) If the thing is lost through the fault of the
ART. 1185. The condition that some event will not debtor, he shall be obliged to pay damages; it is
happen at a determinate time shall render the understood that the thing is lost when it perishes,
obligation effective from the moment the time or goes out of commerce, or disappears in such a
indicated has elapsed, or if it has become evident way that its existence is unknown or it cannot be
that the event cannot occur. recovered;
(3) When the thing deteriorates without the fault
If no time has been fixed, the condition of the debtor, the impairment is to be borne by the
shall be deemed fulfilled at such time as may creditor;
have probably been contemplated, bearing in (4) If it deteriorates through the fault of the debtor,
mind the nature of the obligation. (1118) the creditor may choose between the rescission
of the obligation and its fulfillment, with indemnity
ART. 1186. The condition shall be deemed for damages in either case;
fulfilled when the obligor voluntarily prevents its (5) If the thing is improved by its nature, or by
fulfillment. (1119) time, the improvement shall inure to the benefit of
the creditor;
ART. 1187. The effects of a conditional obligation (6) If it is improved at the expense of the debtor,
to give, once the condition has been fulfilled, shall he shall have no other right than that granted to
retroact to the day of the constitution of the the usufructuary. (1122)
obligation. Nevertheless, when the obligation
imposes reciprocal prestations upon the parties, ART. 1190. When the conditions have for their
the fruits and interests during the pendency of the purpose the extinguishment of an obligation to
condition shall be deemed to have been mutually give, the parties upon the fulfillment of said
compensated. If the obligation is unilateral, the conditions, shall return to each other what they
debtor shall appropriate the fruits and interests have received.
received, unless from the nature and
circumstances of the obligation it should be
 In case of the loss, deterioration or A day certain is understood to be that
improvement of the thing, the provisions which, which must necessarily come, although it may not
with respect to the debtor, are laid down in the be known when.
preceding article shall be applied to the party who
is bound to return. If the uncertainty consists in whether the
day will come or not, the obligation is conditional,
As for obligations to do and not to do, the and it shall be regulated by the rules of the
provisions of the second paragraph of Article preceding Section. (1125a)
1187 shall be observed as regards the effect of
the extinguishment of the obligation. (1123) ART. 1194. In case of loss, deterioration or
improvement of the thing before the arrival of the
ART. 1191. The power to rescind obligations is day certain, the rules in Article 1189 shall be
implied in reciprocal ones, in case one of the observed. (n)
obligors should not comply with what is
incumbent upon him. ART. 1195. Anything paid or delivered before the
arrival of the period, the obligor being unaware of
The injured party may choose between the period or believing that the obligation has
the fulfillment and the rescission7 of the become due and demandable, may be recovered,
obligation, with the payment of damages in either with the fruits and interests. (1126a)
case. He may also seek rescission, even after he
has chosen fulfillment, if the latter should become ART. 1196. Whenever in an obligation a period is
impossible. designated, it is presumed to have been
established for the benefit of both the creditor and
The court shall decree the rescission the debtor, unless from the tenor of the same or
claimed, unless there be just cause authorizing other circumstances it should appear that the
the fixing of a period. period has been established in favor of one or of
the other. (1127)
This is understood to be without prejudice
to the rights of third persons who have acquired ART. 1197. If the obligation does not fix a period,
the thing, in accordance with Articles 1385 and but from its nature and the circumstances it can
1388 and the Mortgage Law.8 (1124) be inferred that a period was intended, the courts
may fi x the duration thereof.
ART. 1192. In case both parties have committed a
breach of the obligation, the liability of the first The courts shall also fix the duration of the
infractor shall be equitably tempered by the period when it depends upon the will of the
courts. If it cannot be determined which of the debtor.
parties first violated the contract, the same shall
be deemed extinguished, and each shall bear his In every case, the courts shall determine
own damages. (n) such period as may under the circumstances
have been probably contemplated by the parties.
SECTION 2. — Obligations with a Period Once fixed by the courts, the period cannot be
changed by them. (1128a)
ART. 1193. Obligations for whose fulfillment a day
certain has been fixed, shall be demandable only ART. 1198. The debtor shall lose every right to
when that day comes. make use of the period:

Obligations with a resolutory period take (1) When after the obligation has been
effect at once, but terminate upon arrival of the contracted, he becomes insolvent, unless he
day certain. gives a guaranty or security for the debt;
(2) When he does not furnish to the creditor the
guaranties or securities which he has promised;
(3) When by his own acts he has impaired said disappeared, or that of the service which last
guaranties or securities after their establishment, became impossible.
and when through a fortuitous event they
disappear, unless he immediately gives new ones Damages other than the value of the last
equally satisfactory; thing or service may also be awarded. (1135a)
(4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period;
(5) When the debtor attempts to abscond. (1129a)

SECTION 3. — Alternative Obligations ART. 1205. When the choice has been expressly
given to the creditor, the obligation shall cease to
ART. 1199. A person alternatively bound by be alternative from the day when the selection
different prestations shall completely perform one has been communicated to the debtor.
of them. Until then the responsibility of the debtor
shall be governed by the following rules:
The creditor cannot be compelled to
receive part of one and part of the other (1) If one of the things is lost through a fortuitous
undertaking. (1131) event, he shall perform the obligation by
delivering that which the creditor should choose
ART. 1200. The right of choice belongs to the from among the remainder, or that which remains
debtor, unless it has been expressly granted to if only one subsists;
the creditor. (2) If the loss of one of the things occurs through
the fault of the debtor, the creditor may claim any
The debtor shall have no right to choose of those subsisting, or the price of that which,
those prestations which are impossible, unlawful through the fault of the former, has disappeared,
or which could not have been the object of the with a right to damages;
obligation. (1132) (3) If all the things are lost through the fault of the
debtor, the choice by the creditor shall fall upon
ART. 1201. The choice shall produce no effect the price of any one of them, also with indemnity
except from the time it has been communicated. for damages.
(1133)
The same rules shall be applied to
ART. 1202. The debtor shall lose the right of obligations to do or not to do in case one, some
choice when among the prestations whereby he or all of the prestations should become
is alternatively bound, only one is practicable. impossible. (1136a)
(1134)
ART. 1206. When only one prestation has been
ART. 1203. If through the creditor’s acts the agreed upon, but the obligor may render another
debtor cannot make a choice according to the in substitution, the obligation is called facultative.
terms of the obligation, the latter may rescind the
contract with damages. (n) The loss or deterioration of the thing
intended as a substitute, through the negligence
ART. 1204. The creditor shall have a right to of the obligor, does not render him liable. But
indemnity for damages when, through the fault of once the substitution has been made, the obligor
the debtor, all the things which are alternatively is liable for the loss of the substitute on account of
the object of the obligation have been lost, or the his delay, negligence or fraud. (n)
compliance of the obligation has become
impossible. SECTION 4. — Joint and Solidary Obligations

The indemnity shall be fixed taking as a ART. 1207. The concurrence of two or more
basis the value of the last thing which creditors or of two or more debtors in one and the
same obligation does not imply that each one of extinguish the obligation, without prejudice to the
the former has a right to demand, or that each provisions of Article 1219.
one of the latter is bound to render, entire
compliance with the prestations. There is a The creditor who may have executed any
solidary liability only when the obligation of these acts, as well as he who collects the debt,
expressly so states, or when the law or the nature shall be liable to the others for the share in the
of the obligation requires solidarity. (1137a) obligation corresponding to them. (1143)

ART. 1208. If from the law, or the nature or the

wording of the obligations to which the preceding ART. 1216. The creditor may proceed against any
article refers the contrary does not appear, the one of the solidary debtors or some or all of them
credit or debt shall be presumed to be divided into simultaneously. The demand made against one of
as many equal shares as there are creditors or them shall not be an obstacle to those which may
debtors, the credits or debts being considered subsequently be directed against the others, so
distinct from one another, subject to the Rules of long as the debt has not been fully collected.
Court governing the multiplicity of suits. (1138a) (1144a)

ART. 1209. If the division is impossible, the right ART. 1217. Payment made by one of the solidary
of the creditors may be prejudiced only by their debtors extinguishes the obligation. If two or more
collective acts, and the debt can be enforced only solidary debtors offer to pay, the creditor may
by proceeding against all the debtors. If one of choose which offer to accept.
the latter should be insolvent, the others shall not
be liable for his share. (1139) He who made the payment may claim
from his co-debtors only the share which
ART. 1210. The indivisibility of an obligation does corresponds to each, with the interest for the
not necessarily give rise to solidarity. Nor does payment already made. If the payment is made
solidarity of itself imply indivisibility. (n) before the debt is due, no interest for the
intervening period may be demanded.
ART. 1211. Solidarity may exist although the
creditors and the debtors may not be bound in the When one of the solidary debtors cannot,
same manner and by the same periods and because of his insolvency, reimburse his share to
conditions. (1140) the debtor paying the obligation, such share shall
be borne by all his co-debtors, in proportion to the
ART. 1212. Each one of the solidary creditors debt of each. (1145a)
may do whatever may be useful to the others, but
not anything which may be prejudicial to the latter. ART. 1218. Payment by a solidary debtor shall
(1141a) not entitle him to reimbursement from his
co-debtors if such payment is made after the
ART. 1213. A solidary creditor cannot assign his obligation has prescribed or become illegal. (n)
rights without the consent of the others. (n)
ART. 1219. The remission made by the creditor
ART. 1214. The debtor may pay any one of the of the share which affects one of the solidary
solidary creditors; but if any demand, judicial or debtors does not release the latter from his
extrajudicial, has been made by one of them, responsibility towards the co-debtors, in case the
payment should be made to him. (1142a) debt had been totally paid by anyone of them
before the remission was effected. (1146a)
ART. 1215. Novation, compensation, confusion or
remission of the debt, made by any of the solidary ART. 1220. The remission of the whole
creditors or with any of the solidary debtors, shall obligation, obtained by one of the solidary
debtors, does not entitle him to reimbursement When the obligation has for its object the
from his co-debtors. (n) execution of a certain number of days of work, the
accomplishment of work by metrical units, or
ART. 1221. If the thing has been lost or if the analogous things which by their nature are
prestation has become impossible without the susceptible of partial performance, it shall be
fault of the solidary debtors, the obligation shall divisible.
be extinguished. However, even though the object or
service may be physically divisible, an obligation
If there was fault on the part of any one of is indivisible if so provided by law or intended by
them, all shall be responsible to the creditor, for the parties.
the price and the payment of damages and In obligations not to do, divisibility or
interest, without prejudice to their action against indivisibility shall be determined by the character
the guilty or negligent debtor. of the prestation in each particular case. (1151a)
If through a fortuitous event, the thing is
lost or the performance has become impossible SECTION 6. — Obligations with a Penal
after one of the solidary debtors has incurred in Clause
delay through the judicial or extra-judicial demand
upon him by the creditor, the provisions of the ART. 1226. In obligations with a penal clause, the
preceding paragraph shall apply. (1147a) penalty shall substitute the indemnity for
damages and the payment of interests in case of
ART. 1222. A solidary debtor may, in actions filed noncompliance, if there is no stipulation to the
by the creditor, avail himself of all defenses which contrary. Nevertheless, damages shall be paid if
are derived from the nature of the obligation and the obligor refuses to pay the penalty or is guilty
of those which are personal to him, or pertain to of fraud in the fulfillment of the obligation.
his own share. With respect to those which
personally belong to the others, he may avail The penalty may be enforced only when it
himself thereof only as regards that part of the is demandable in accordance with the provisions
debt for which the latter are responsible. (1148a) of this Code. (1152a)

SECTION 5. — Divisible and Indivisible ART. 1227. The debtor cannot exempt himself
Obligations from the performance of the obligation by paying
the penalty, save in the case where this right has
ART. 1223. The divisibility or indivisibility of the been expressly reserved for him. Neither can the
things that are the object of obligations in which creditor demand the fulfillment of the obligation
there is only one debtor and only one creditor and the satisfaction of the penalty at the same
does not alter or modify the provisions of Chapter time, unless this right has been clearly granted
2 of this Title. (1149) him. However, if after the creditor has decided to
require the fulfillment of the obligation, the
ART. 1224. A joint indivisible obligation gives rise performance thereof should become impossible
to indemnity for damages from the time anyone of without his fault, the penalty may be enforced.
the debtors does not comply with his undertaking. (1153a)
The debtors who may have been ready to fulfill
their promises shall not contribute to the ART. 1228. Proof of actual damages suffered by
indemnity beyond the corresponding portion of the creditor is not necessary in order that the
the price of the thing or of the value of the service penalty may be demanded. (n)
in which the obligation consists. (1150)
ART. 1229. The judge shall equitably reduce the
ART. 1225. For the purposes of the preceding penalty when the principal obligation has been
articles, obligations to give definite things and partly or irregularly complied with by the debtor.
those which are not susceptible of partial Even if there has been no performance, the
performance shall be deemed to be indivisible. penalty may also be reduced by the courts if it is
iniquitous or unconscionable. (1154a)
 objection, the obligation is deemed fully complied
ART. 1230. The nullity of the penal clause does with. (n)
not carry with it that of the principal obligation.
ART. 1236. The creditor is not bound to accept
The nullity of the principal obligation payment or performance by a third person who
carries with it that of the penal clause. (1155) has no interest in the fulfillment of the obligation,
unless there is a stipulation to the contrary.

Whoever pays for another may demand

from the debtor what he has paid, except that if
he paid without the knowledge or against the will
of the debtor, he can recover only insofar as the
payment has been beneficial to the debtor.
(1158a)
CHAPTER 4: EXTINGUISHMENT OF
OBLIGATIONS PALOREMECONO-PARE-FU ART. 1237. Whoever pays on behalf of the debtor
without the knowledge or against the will of the
ART. 1231. Obligations are extinguished: latter, cannot compel the creditor to subrogate
(1) By payment or performance; him in his rights, such as those arising from a
(2) By the loss of the thing due; mortgage, guaranty, or penalty. (1159a)
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of ART. 1238. Payment made by a third person who
creditor and debtor; does not intend to be reimbursed by the debtor is
(5) By compensation; deemed to be a donation, which requires the
(6) By novation. debtor’s consent. But the payment is in any case
valid as to the creditor who has accepted it. (n)
Other causes of extinguishment of
obligations, such as annulment, rescission, ART. 1239. In obligations to give, payment made
fulfillment of a resolutory condition, and by one who does not have the free disposal of the
prescription, are governed elsewhere in this thing due and capacity to alienate it shall not be
Code. (1156a) valid, without prejudice to the provisions of Article
1427 under the Title on “Natural Obligations.’’
SECTION 1. — Payment or Performance (1160a)

ART. 1232. Payment means not only the delivery ART. 1240. Payment shall be made to the person
of money but also the performance, in any other in whose favor the obligation has been
manner, of an obligation. (n) constituted, or his successor in interest, or any
person authorized to receive it. (1162a)
ART. 1233. A debt shall not be understood to
have been paid unless the thing or service in ART. 1241. Payment to a person who is
which the obligation consists has been completely incapacitated to administer his property shall be
delivered or rendered, as the case may be. (1157) valid if he has kept the thing delivered, or insofar
as the payment has been beneficial to him.
ART. 1234. If the obligation has been Payment made to a third person shall also
substantially performed in good faith, the obligor be valid insofar as it has redounded to the benefit
may recover as though there had been a strict of the creditor. Such benefit to the creditor need
and complete fulfillment, less damages suffered not be proved in the following cases;
by the obligee. (n)
(1) If after the payment, the third person acquires
ART. 1235. When the obligee accepts the the creditor’s rights;
performance, knowing its incompleteness or 2) If the creditor ratifies the payment to the third
irregularity, and without expressing any protest or person;
3) If by the creditor’s conduct, the debtor has may demand and the debtor may effect the
been led to believe that the third person had payment of the former without waiting for the
authority to receive the payment. (1163a) liquidation of the latter. (1169a)

ART. 1242. Payment made in good faith to any ART. 1249. The payment of debts in money shall
person in possession of the credit shall release be made in the currency stipulated, and if it is not
the debtor. (1164) possible to deliver such currency, then in the
currency which is legal tender in the Philippines.
ART. 1243. Payment made to the creditor by the
debtor after the latter has been judicially ordered The delivery of promissory notes payable
to retain the debt shall not be valid. (1165) to order, or bills of exchange or other mercantile
documents shall produce the effect of payment
only when they have been cashed, or when
through the fault of the creditor they have been
impaired.
ART. 1244. The debtor of a thing cannot compel
the creditor to receive a different one, although In the meantime, the action derived from
the latter may be of the same value as, or more the original obligation shall be held in abeyance.
valuable than that which is due. (1170)

In obligations to do or not to do, an act or ART. 1250. In case an extraordinary inflation or

forbearance cannot be substituted by another act deflation of the currency stipulated should
or forbearance against the obligee’s will. (1166a) supervene, the value of the currency at the time
of the establishment of the obligation shall be the
ART. 1245. Dation in payment, whereby property basis of payment, unless there is an agreement to
is alienated to the creditor in satisfaction of a debt the contrary. (n)
in money, shall be governed by the law of sales.
(n) ART. 1251. Payment shall be made in the
place designated
ART. 1246. When the obligation consists in the in the obligation.
delivery of an indeterminate or generic thing,
whose quality and circumstances have not been There being no express stipulation and if
stated, the creditor cannot demand a thing of the undertaking is to deliver a determinate
superior quality. Neither can the debtor deliver a thing, the payment shall be made wherever the
thing of inferior quality. The purpose of the thing might be at the moment the obligation
obligation and other circumstances shall be taken
was Constituted.
into consideration. (1167a)
In any other case the place of payment
shall be the domicile
ART. 1247. Unless it is otherwise stipulated, the
of the debtor.
extrajudicial expenses required by the payment
If the debtor changes his domicile in bad
shall be for the account of the debtor. With regard
to judicial costs, the Rules of Court shall govern. faith or after he
(1168a) has incurred in delay, the additional expenses
shall be borne by
ART. 1248. Unless there is an express stipulation Him.
to that effect, the creditor cannot be compelled These provisions are without prejudice
partially to receive the prestations in which the to venue under the
obligation consists. Neither may the debtor be Rules of Court. (1171a)
required to make partial payments.
SUBSECTION 1. — Application of Payments
However, when the debt is in part
liquidated and in part unliquidated, the creditor
ART. 1252. He who has various debts of the SUBSECTION 3. — Tender of Payment and
same kind in favor of one and the same creditor, Consignation
may declare at the time of making the payment,
to which of them the same must be applied. ART. 1256. If the creditor to whom tender of
Unless the parties so stipulate, or when the payment has been made refuses without just
application of payment is made by the party for cause to accept it, the debtor shall be released
whose benefit the term has been constituted, from responsibility by the consignation of the
application shall not be made as to debts which thing or sum due.
are not yet due. Consignation alone shall produce the
same effect in the following cases:
If the debtor accepts from the creditor a 1. When the creditor is absent or unknown,
receipt in which an application of the payment is or does not appear at the place of
made, the former cannot complain of the same, payment;
unless there is a cause for invalidating the 2. When he is incapacitated to receive the
contract. (1172a) payment at the time it is due;
3. When, without just cause, he refuses to
ART. 1253. If the debt produces interest, payment give a receipt;
of the principal shall not be deemed to have been 4. When two or more persons claim the
made until the interests have been covered. same right to collect;
(1173) 5. When the title of the obligation has been
lost. (1176a)
ART. 1254. When the payment cannot be applied
in accordance with the preceding rules, or if ART. 1257. In order that the consignation of the
application cannot be inferred from other thing due may release the obligor, it must first be
circumstances, the debt which is most onerous to announced to the persons interested in the
the debtor, among those due, shall be deemed to fulfillment of the obligation.
have been satisfied.
The consignation shall be ineffectual if it is
If the debts due are of the same nature not made strictly in consonance with the
and burden, the payment shall be applied to all of provisions which regulate payment. (1177)
them proportionately. (1174a)
ART. 1258. Consignation shall be made by
depositing the things due at the disposal of
judicial authority, before whom the tender of
payment shall be proved, in a proper case, and
the announcement of the consignation in other
cases.

The consignation having been made, the

interested parties shall also be notified thereof.
SUBSECTION 2. — Payment by Cession (1178)
ART. 1259. The expenses of consignation, when
ART. 1255. The debtor may cede or assign his properly made, shall be charged against the
property to his creditors in payment of his debts. creditor. (1179)
This cession, unless there is stipulation to the
contrary, shall only release the debtor from ART. 1260. Once the consignation has been duly
responsibility for the net proceeds of the thing made, the debtor may ask the judge to order the
assigned. The agreements which, on the effect of cancellation of the obligation.
the cession, are made between the debtor and
his creditors shall be governed by special laws. Before the creditor has accepted the
(1175a) consignation, or before a judicial declaration that
the consignation has been properly made, the
debtor may withdraw the thing or the sum
deposited, allowing the obligation to remain in ART. 1268. When the debt of a thing certain and
force. (1180) determinate proceeds from a criminal offense, the
debtor shall not be exempted from the payment of
ART. 1261. If, the consignation having been its price, whatever may be the cause for the loss,
made, the creditor should authorize the debtor to unless the thing having been offered by him to the
withdraw the same, he shall lose every person who should receive it, the latter refused
preference which he may have over the thing. without justification to accept it. (1185)
The co-debtors, guarantors and sureties shall be
released. (1181a) ART. 1269. The obligation having been
extinguished by the loss of the thing, the creditor
SECTION 2. — Loss of the Thing Due shall have all the rights of action which the debtor
may have against third person by reason of the
ART. 1262. An obligation which consists in the loss. (1186)
delivery of a determinate thing shall be
extinguished if it should be lost or destroyed SECTION 3. — Condonation or Remission of
without the fault of the debtor, and before he has the Debt
incurred in delay.
ART. 1270. Condonation or remission is
When by law or stipulation, the obligor is essentially gratuitous, and requires the
liable even for fortuitous events, the loss of the acceptance by the obligor. It may be made
thing does not extinguish the obligation, and he expressly or impliedly.
shall be responsible for damages. The same rule
applies when the nature of the obligation requires One and the other kind shall be subject to
the assumption of risk. (1182a) the rules which govern inofficious donations.
Express condonation shall, furthermore, comply
ART. 1263. In an obligation to deliver a generic with the forms of donation. (1187)
thing, the loss or destruction of anything of the
same kind does not extinguish the obligation. (n) ART. 1271. The delivery of a private document
evidencing a credit, made voluntarily by the
ART. 1264. The courts shall determine whether, creditor to the debtor, implies the renunciation of
under the circumstances, the partial loss of the the action which the former had against the latter.
object of the obligation is so important as to
extinguish the obligation. (n) If in order to nullify this waiver it should be
claimed to be inofficious, the debtor and his heirs
ART. 1265. Whenever the thing is lost in the may uphold it by proving that the delivery of the
possession of the debtor, it shall be presumed document was made in virtue of payment of the
that the loss was due to his fault, unless there is debt. (1188)
proof to the contrary, and without prejudice to the
provisions of Article 1165. This presumption does ART. 1272. Whenever the private document in
not apply in case of earthquake, flood, storm or which the debt appears is found in the possession
other natural calamity. (1183a) of the debtor, it shall be presumed that the
creditor delivered it voluntarily, unless the contrary
ART. 1266. The debtor in obligations to do shall is proved. (1189)
also be released when the prestation becomes
legally or physically impossible without the fault of ART. 1273. The renunciation of the principal debt
the obligor. (1184a) shall extinguish the accessory obligations; but the
waiver of the latter shall leave the former in force.
ART. 1267. When the service has become so (1190)
difficult as to be manifestly beyond the
contemplation of the parties, the obligor may also ART. 1274. It is presumed that the accessory
be released therefrom, in whole or in part. (n) obligation of pledge has been remitted when the
thing pledged, after its delivery to the creditor, is
found in the possession of the debtor, or of a third ART. 1282. The parties may agree upon the
person who owns the thing. (1191a) compensation of debts which are not yet due. (n)

SECTION 4. — Confusion or Merger of Rights ART. 1283. If one of the parties to a suit over an
obligation has a claim for damages against the
ART. 1275. The obligation is extinguished from other, the former may set it off by proving his right
the time the characters of creditor and debtor are to said damages and the amount thereof. (n)
merged in the same person. (1192a)
ART. 1284. When one or both debts are
ART. 1276. Merger which takes place in the rescissible or voidable, they may be compensated
person of the principal debtor or creditor benefits against each other before they are judicially
the guarantors. Confusion which takes place in rescinded or avoided. (n)
the person of any of the latter does not extinguish
the obligation. (1193) ART. 1285. The debtor who has consented to the
assignment of rights made by a creditor in favor
ART. 1277. Confusion does not extinguish a joint of a third person, cannot set up against the
obligation except as regards the share assignee the compensation which would pertain
corresponding to the creditor or debtor in whom to him against the assignor, unless the assignor
the two characters concur. (1194) was notified by the debtor at the time he gave his
consent, that he reserved his right to the
SECTION 5. — Compensation compensation.

ART. 1278. Compensation shall take place when If the creditor communicated the cession
two persons, in their own right, are creditors and to him but the debtor did not consent thereto, the
debtors of each other. (1195) latter may set up the compensation of debts
previous to the cession, but not of subsequent
ART. 1279. In order that compensation may be ones.
proper, it is necessary:
If the assignment is made without the
(1) That each one of the obligors be bound knowledge of the debtor, he may set up the
principally, and that he be at the same time a compensation of all credits prior to the same and
principal creditor of the other; also later ones until he had knowledge of the
(2) That both debts consist in a sum of money, or assignment. (1198a)
if the things due are consumable, they be of the
same kind, and also of the same quality if the ART. 1286. Compensation takes place by
latter has been stated; (3) That the two debts be operation of law, even though the debts may be
due; payable at different places, but there shall be an
(4) That they be liquidated and demandable; (5) indemnity for expenses of exchange or
That over neither of them there be any retention transportation to the place of payment. (1199a)
or controversy, commenced by third persons and
communicated in due time to the debtor. (1196) ART. 1287. Compensation shall not be proper
when one of the debts arises from a depositum or
from the obligations of a depositary or of a bailee
ART. 1280. Notwithstanding the provisions of the in commodatum.
preceding article, the guarantor may set up Neither can compensation be set up
compensation as regards what the creditor may against a creditor who has a claim for support due
owe the principal debtor. (1197) by gratuitous title, without prejudice to the
provisions of paragraph 2 of Article 301. (1200a)
ART. 1281. Compensation may be total or partial.
When the two debts are of the same amount,
there is a total compensation. (n)
ART. 1288. Neither shall there be compensation if and of public knowledge, or known to the debtor,
one of the debts consists in civil liability arising when he delegated his debt. (1206a)
from a penal offense. (n)
ART. 1296. When the principal obligation is
ART. 1289. If a person should have against him extinguished in consequence of a novation,
several debts which are susceptible of accessory obligations may subsist only insofar as
compensation, the rules on the application of they may benefit third persons who did not give
payments shall apply to the order of the their consent. (1207)
compensation. (1201)
ART. 1297. If the new obligation is void, the
ART. 1290. When all the requisites mentioned in original one shall subsist, unless the parties
Article 1279 are present, compensation takes intended that the former relation should be
effect by operation of law, and extinguishes both extinguished in any event. (n)
debts to the concurrent amount, even though the
creditors and debtors are not aware of the ART. 1298. The novation is void if the original
compensation. (1202a) obligation was void, except when annulment may
be claimed only by the debtor, or when ratification
SECTION 6. — Novation validates acts which are voidable. (1208a)

ART. 1291. Obligations may be modifi ed by: ART. 1299. If the original obligation was subject
(1) Changing their object or principal conditions; to a suspensive or resolutory condition, the new
(2) Substituting the person of the debtor; obligation shall be under the same condition,
(3) Subrogating a third person in the rights of the unless it is otherwise stipulated.(n)
creditor. (1203)
ART. 1300. Subrogation of a third person in the
ART. 1292. In order that an obligation may be rights of the creditor is either legal or
extinguished by another which substitutes the conventional. The former is not presumed, except
same, it is imperative that it be so declared in in cases expressly mentioned in this Code; the
unequivocal terms, or that the old and the new latter must be clearly established in order that it
obligations be on every point incompatible with may take effect. (1209a)
each other. (1204)
ART. 1301. Conventional subrogation of a third
ART. 1293. Novation which consists in person requires the consent of the original parties
substituting a new debtor in the place of the and of the third person. (n)
original one, may be made even without the
knowledge or against the will of the latter, but not ART. 1302. It is presumed that there is legal
without the consent of the creditor. Payment by subrogation:
the new debtor gives him the rights mentioned in (1) When a creditor pays another creditor who is
Articles 1236 and 1237. (1205a) preferred, even without the debtor’s knowledge;
(2) When a third person, not interested in the
ART. 1294. If the substitution is without the obligation, pays with the express or tacit approval
knowledge or against the will of the debtor, the of the debtor;
new debtor’s insolvency or non-fulfillment of the (3) When, even without the knowledge of the
obligation shall not give rise to any liability on the debtor, a person interested in the fulfillment of the
part of the original debtor. (n) obligation pays, without prejudice to the effects of
confusion as to the latter’s share. (1210a)
ART. 1295. The insolvency of the new debtor,
who has been proposed by the original debtor ART. 1303. Subrogation transfers to the person
and accepted by the creditor, shall not revive the subrogated the credit with all the rights thereto
action of the latter against the original obligor, appertaining, either against the debtor or against
except when said insolvency was already existing third persons, be they guarantors or possessors
of mortgages, subject to stipulation in a
conventional subrogation. (1212a)

ART. 1304. A creditor, to whom partial payment

has been made, may exercise his right for the
remainder, and he shall be preferred to the
person who has been subrogated in his place in
virtue of the partial payment of the same credit.
(1213)