Essential requisites of Marriage  Marriages b/n Filipinos abroad

1. Legal capacity of contracting parties who must be male and female  To issue marriage license
2. consent freely given in presence of solemnizing officer  Do duties of local civil registrar
 ABSENCE OF ANY: void ab initio
 Defect: voidable PARENT’S CONSENT
 Between 18-21
FORMAL REQUISITES PARENT’S ADVICE
1. Authority of solemnizing officer  Between 21-25
2. Valid marriage license  If none, marriage license not be issued till after 3 months
 Issued by local civil registrar of city/municipality where either o Plus marriage counseling. If none, suspend issuance of
party habitually resides license for 3 months from completion of publication of
 Notice posted for 10 consecutive days on bulletin board outside application
office of registrar
 VALID FOR 120 DAYS from date of issue ART. 26. Marriages solemnized outside Philippines if valid = also valid
 If either or both parties are foreigner, must submit certificate of in the Phil except those prohibited:
legal capacity issued by diplomatic/consular official  Below 18
 Stateless persons/refugees to submit affidavit showing capacity  Bigamous/polygamous marriage
3. Marriage ceremony (personal declaration, atleast two witnesses)  Contracted thru mistake as to identity of the other
 ABSENCE OF ANY: void ab initio  Subsequent marriages that are void under art 53 (failure to
 Irregularity: parties responsible to be civilly, criminally and comply with requirements like judgment of annulment,
administratively liable partition, delivery of presumptive legitimes to be recorded)
 Psychologically incapacitated (36)
SOLEMNIZING OFFICERS ALLOWED:  Incestuous marriages (37)
1. incumbent mem of judiciary within court’s jurisdiction o b/n ascendants and descendants (any degree)
2. any priest, rabbi, imam or minister o b/n brothers and sisters (full or half-blood)
 Duly authorized by his church/religious sect  Public policy (38)
 Registered with civil registrar general o Bn collateral relatives up to 4th civil degree (legit or not)
 Acting within limits of written authority o Bn step-parents and step-children
 Atleast one of the parties belongs to the officer’s church o Parents in law and children in law
3. ship captain/airplane chief (articulo mortis) o Adopting parent and adopted child
 Not only when the ship is at sea or plane is in flight o Surviving spouse of adopting parent and adopted child
 During stopovers at ports of calls too
o Surviving spouse of adopted child and adopter
4. military commander of unit (articulo mortis)
o Adopted child and legitimate child of adopter
 Chaplain is absent
o Adopted children of same adopter
 During military operation
5. consul-general, consul, vice-consul
 o Killed another person’s spouse or his/her own spouse  not so if spouse absent for 4 consecutive years and spouse
with intention to marry the other present has well-founded belief that the absent spouse was
Marriage b/n Filipino and foreigner already dead. If danger of death, 2 yrs is sufficient.
 If validly celebrated and alien spouse obtained divorce abroad  Present spouse to institute summary proceeding to declare
capacitating him/her to remarry = Filipino spouse capacitated presumptive death of absentee. Such to automatically terminate
too (art 26) upon recording of affidavit of reappearance
 A Filipino citizen has the capacity to remarry under Philippine law after o Termination of subsequent marriage due to
initiating a divorce proceeding abroad and obtaining a favorable judgment
against his or her alien spouse who is capacitated to remarry (Republic v
reappearance:
Manalo)  Children conceived prior to termination are legit
 to include cases involving parties who, at the time of the  Absolute community or conjugal partnership be
celebration of the marriage were Filipino citizens, but later dissolved and liquidated but if one is in bf, his
share be forfeited in favor of common children
on, one of them becomes naturalized as a foreign citizen
 Donations by reason of marriage = valid. If done in
and obtains a divorce decree. The reckoning point is not bf, revoked by operation of law.
the citizenship of the parties at the time of the celebration of  Innocent spouse may revoke spouse (bf) as
the marriage, but their citizenship at the time a valid beneficiary
divorce is obtained abroad by the alien spouse capacitating  Spouse (bf)) disqualified to inherit from innocent
the latter to remarry. (Orbecido ruling) spouse by testate & intestate succession
 If both in BF, marriage is void ab initio, all
Art. 27. EXEMPTED FROM MARRIAGE LICENSE donations revoked
 either or both at point of death (articulo mortis) 5. contracted thru mistake of party as to identity of the other
 residence is where there’s no means of transportation 6. void subsequent marriages
 Muslims or mems of ethnic cultural communities in accordance 7. psychologically incapacitated at time of celeb (36)
with their customs, rites, practices
 Atleast 5 year cohabitation VOIDABLE MARRIAGES (ART. 45)
o lived together as husband and wife and 1. 18 years or over but below 21 and without parent’s consent
o without legal impediment to marry each other  Ratified: after attaining age 21, party freely cohabited with the
other and both lived as H and W
VOID MARRIAGES (Art. 35)  Can be filed by party whose parent didn’t give consent within 5
1. below 18 yrs after 21
2. solemnized by person not legally authorize to perform marriage  Can be filed by parent anytime before party reached 21
 unless, either or both parties believed in gf that he had legal 2. either is of unsound mind (Anytime before death of either)
authority  Filed by sane spouse who had no knowledge of insanity or
3. no license  By person in charge of insane or
4. bigamous or polygamous marriages  By insane spouse during lucid interval
3. consent obtained by fraud (filed within 5 yrs after discovery)
  Nondisclosure of previous conviction by final judgment of crime Be denied if: condone, consented to commission, connivance, both gave
(moral turpitude) grounds, collusion, and prescription
 Concealment by wife that she was pregnant by another man at
time of marriage WHEN: within 5 yrs from time of occurrence of the cause. Can’t be tried
 Concealment of STD, regardless of nature, at time of marriage before 6 mos since filing. Court to take steps toward reconciliation of
 Concealment of drug addiction, habitual alcoholism or sps.
homosexuality/lesbianism existing at time of marriage
4. consent obtained by force, intimidation or undue influence (within 5 PROPERTY RELATIONS
yrs from time such ceases)  Marriage settlements before marriage – modifications valid if
 Ratified by cohabitation as h and w before celeb. If made by 18-21 party, parent’s consent needed to
5. physically incapable of consummating marriage and incapacity be valid.
continues and appears to be incurable (within 5 yrs after marriage) o Absolute community (default)
 Can’t be ratified  If not, can’t donate more than 1/5 to each other
6. afflicted with sexually transmitted disease(serious and incurable)  Commences at precise moment M is celeb
 Can’t be ratified  Consists of all the property owned by the sps at
 Within 5 yrs after marriage time of celeb or acquired thereafter
 EXCLUDE
Children conceived or born before final judgment of  Property acquired during M by gratuitous
annulment/absolute nullity under 36 and under 53 = legitimate title + fruits and income
 For personal and exclusive use except
LEGAL SEPARATION (ART 55) jewelry
1. Repeated physical violence/grossly abusive conduct against  Acquired before M by one who has
petitioner, common child, P’s child legitimate descendants by former M
2. physical violence or moral pressure to change religious/political  LIABLE: support, debts and oblig for benefit of
affiliation community, taxes
3. attempt to corrupt or induce petitioner, common child or child to  Except: antenuptial debts not for benefit of
engage in prostitution or connivance in such family, support of illegit, liabilities due to
4. final judgment of imprisonment of more than 6 yrs even if pardoned crime/quasi-delict
5. drug addiction/habitual alcoholism  DISSOLVE: death, legal sep, annulment/nullity,
6. lesbianism or homosexuality of respondent judicial separation of property during M
7. subsequent bigamous marriage o Conjugal partnership
8. sexual infidelity or perversion  Common fund of proceeds, products, fruits and
9. attempt against life of petitioner income from their separate properties and those
10. abandonment w/o justifiable cause for more than 1 yr acquired thru efforts/chance to be divided equally
upon dissolution
  Acquired by onerous title during M at expense of ART. 118. Property bought on installments
common fund  from exclusive and conjugal funds
 Obtained from labor, industry, work o if full ownership vested
 Fruits received during M from common and  before M: Belongs to buyer
exclusive property  during M: conjugal partnership
 Share in hidden treasure
 Acquired thru occupation (fishing, hunting) JUDICIAL SEPARATION OF PROPERTY
 Livestock in excess of which was brought to M  Spouse sentenced to penalty with civil interdiction
 Acquired by chance  Judicially declared an absentee
 EXCLUSIVE PROPERTY  Loss of parental authority decreed by court
 Brought to M as his/her own  Abandoned or failed to comply family oblig
 Acquired during M by gratuitous title  Abused power of administration granted
 Acquired by right of redemption, barter or  Separated in fact for atleast 1 yr & reconciliation is highly
exchange with property belonging to only improbable
one spouse
 Purchased with exclusive money of H or W ART. 147 PROPERTY REGIME OF UNION WITHOUT MARRIAGE
o Complete separation  Capacitated to marry each other
 Code  Live exclusively with each other as H and W
 Local customs  Without M or void M
 Wages and salaries owned in equal shares
Governed by Phil laws except of both sps are aliens, property situated  Property acquired thru their work under rules on co-ownership
outside Phil and executed where it is located (extrinsic validity),  Party who didn’t participate in acquisition deemed to contribute
situated in outside requiring diff. formalities jointly if efforts consisted in care and maintenance of family and
household
DONATIONS BY REASON OF MARRIAGE o Other cohabitation, only properties acquired thru actual
 Made before celeb joint contri be owned by them in proportion to their
 In consideration of M respective contri.
 In favor of one/both future sps  If married to another (adultery), his/her share
 May be REVOKED accrues to absolute community or conjugal of
o Marriage not celeb or void ab initio valid M
o Marriage is without consent of parents
o Marriage is annulled and donee acted in bf FAMILY HOME
o Legal separation, donee is guilty spouse  Exempted from execution, forced sale, attachment
o Resolutory condition complied  EXCEPT
o Donee committed act of ingratitude o Taxes
o Debts prior to constitution of family home
 o Debts secured by mortgages o To adopt legitimate child of spouse
o Debts due to laborers to construct bldg.

LEGITIMATE SUCCESSION
 Conceived or born during M  Mode of acquisition
 Impugned if (within 1 yr from knowledge of birth)  Property, rights, oblig transmitted thru his death to another
o Physically impossible for h to have sexual intercourse  By will or operation of law
with w
o As proved by biological/scientific reasons Art. 777. OPENING OF SUCCESSION. Rights transmitted from moment
o Written authorization/ratification for artificial of death of decedent.
insemination obtained thru mistake, fraud, etc
 If born before 180 days after M = conceived during former M TESTAMENTARY CAPACITY
o If after 180 days = conceived during M  Not under 18
 Sound mind (presumed)
LEGITIMATED o Not necessary to fully possessed all his reasoning
 Conceived and born outside of wedlock of parents who weren’t faculties
disqualified by impediment to marry each other or disqualified o Sufficient: know nature of estate to dispose, proper
only because below 18 y/o objects of bounty, character of testamentary act
 Take place after subsequent valid marriage
FORMS OF WILLS
ADOPTION  In writing
 Only minors may be adopted except if allowed  Language/dialect known to testator
 Adopter must be atleast 16 yrs older than person to be adopted  Subscribed at the end by testator
o Unless parent by nature of adopted or spouse of o Or testator’name written by other person in his presence
legitimate parent of adoptee and by his express direction
 Cannot adopt  Attested (# of pages, testator signed, presence of witnesses and
o Guardian-ward prior to approval of final accounts such signed) and subscribed by 3 or more credible witnesses in
o Convicted of crime of moral turpitude presence of testator and of another
o Alien except:
 Former Filipino citizen to adopt a relative by DEAF TESTATOR – Personally read will or two persons to read &
consanguinity communicate contents to him
 Adopt legitimate child of his/her Filipino spouse BLIND TESTATOR – read will twice: witness and notary public
 Married to Filipino and to adopt jointly a relative
by consanguinity of the spouse HOLOGRAPHIC WILL
 Must adopt jointly except  Entirely written, dated, signed by hand of testator.
o To adopt his own illegitimate child  No form
  May be made in or out of Phil  Continues to be a witness
 Need not be witnessed
 To probate, atleast one witness who knows handwriting and Art. 828. WILL IS REVOCABLE any time before his death.
signature of testator  Valid when done outside Phil and not domiciled here if
 Any insertion, cancellation, erasure be authenticated by full o According to where will was made
signature o Or where testator had his domicile
 REVOKED BY
Art 815. LEX LOCI CELEBRATIONIS o Implication of law
 Filipino abroad is authorized to make will in any form allowed o Will, codicil
by country where may be. May be probated in the Phil. o Burning, tearing, cancelling, with intention to revoke

Art 816. Will of alien abroad produces effect in the Phil if REVOCATION IN SUBSEQUENT WILL
 Made with formalities of place in which he resides (domiciliary  Inoperative due to incapacity of heirs, devisees or legatees or by
law) renunciation = 1st will remains revoked
 Observed in his country (national law)  If 2nd will is void, 1st will is valid
 In conformity which this Code prescribes (Phil law, where he
executed the will – Art. 17 DISALLOWANCE OF WILL (839)
 Formalities not complied (due execution)
Art. 817. Will of alien made in Phil is as if executed accdg to Phil law  Testator is insane or mentally incapable
 If made according to his country (national law)  Executed thru force, duress or fear, threats
 Procured by undue and improper pressure and influence
JOINT WILL PROHIBITED and not valid in Phil even if authorized in  Testator’s signature procured by fraud
country where it was executed  Testator acted by mistake
WITNESSES TO WILLS VALID WILL EVEN IF
 Sound mind  Doesn’t contain institution of heir
 18 y/o  Such doesn’t comprise entire estate
 not blind, deaf or dumb  Person instituted doesn’t accept the inheritance or incapacitated
 able to read and write o Testamentary dispositions be complied with and
 DISQUALIFIED o Remainder of estate pass to legal heirs
o Not domiciled in Phil
o Convicted of falsification of doc, perjury, false testimony DISTRIBUTION
 Without designation = equal parts
DEVISE/LEGACY IS VOID if the witness (or spouse, parent or child) to  Those collectively designated = considered individually
its execution is the recipient
instituted
 Unless there are other 3 competent witnesses
  For full and half brothers and sisters = equally INALIENABILITY OF ESTATE = Not to exceed 20 yrs
 Person and his children = instituted simultaneously and not IMPOSSIBLE CONDITIONS = deemed not imposed
successively
ART. 854 PRETERITION COMPULSORY HEIRS
 Omission of one, some or all o Legitimate children and descendants
 Compulsory heirs in direct line o Legitimate parents and ascendants (if both of equal degree of
 WON living at time of execution of will or born after death of paternal and maternal lines survive, divide equally b/n both
testator lines)
 Annul the institution of heir o Widow/er
 But devises and legacies are valid if not inofficious o Illegitimate children
o Donations given to children charged to their legitime
RESERVA TRONCAL
ART. 856. NO RIGHT TO HEIRS o Ascendant inherits from descendant by operation of law and
 Compulsory heir dies before testator (predeceased) o must reserve property for benefit of relatives within 3 rd
 Incapacitated degree and belong to line from which property came
 Renounces inheritance o Descendant acquired such property by gratuitous title from
another ascendant or brother/sister
SUBSTITUTION – Another heir in default of heir originally instituted.
 In case such heir dies before him, doesn’t accept or incapacitated ART. 915. DISINHERITANCE
 FIDEICOMMISSARY o May be deprived of his legitimes
o 1st heir/fiduciary inherits as usufructuary. Obligation to o Effected only thru a will
preserve and transmit inheritance to 2nd heir o Not valid if
o doesn’t go beyond one degree from heir originally o No specified cause
instituted o Cause not proved if contradicted
o 1st and 2nd heir are living at time of death of testator  Shall annul institution of heirs insofar it prejudices
 2nd heir still acquires even if dies before 1st heir. the disinherited
Pass to his heirs.
o Not to take effect if 919. CAUSES TO DISINHERIT CHILDREN AND DESCENDANTS
o Not made expressly or imposing absolute oblig to o Convicted of attempt against life of testator, spouse, D and A
deliver property to 2nd heir o Accused testator of crime prescribing imprisonment for 6 yrs or
o Perpetual prohibition to alienate/ go beyond 1 more and found groundless
degree from original heir instituted o Convicted of adultery or concubinage with testator’s spouse
o Heir to pay to various persons successively o Cause testator to make will by fraud, violence, intimidation,
income/pension undue influence
o According to secret instructions by testator o Refusal to support without justifiable cause
o Maltreatment of testator (word or deed)
 o Leads a dishonorable/disgraceful life  Unjustifiable refusal to support children
o Conviction of crime with penalty of civil interdiction
923. RIGHT OF REPRESENTATION for persons disinherited (only
DISINHERIT PARENTS OR ASCENDANTS compulsory heirs); renounced inheritance, predeceased. Doesn’t apply
o Abandoned children or induced to live corrupt/immoral life to those who repudiated their share.
o Convicted of attempt against life of testator, spouse, D, or A  Called by law and not by person represented
o Accused testator of crime prescribing imprisonment for 6 yrs or  Succeed the one whom the person represented would have
more and found false succeeded and not the person represented
o Convicted of adultery or concubinage with testator’s spouse  Always in direct descending line
o Cause testator to make will by fraud, violence, intimidation,  Collateral line – in favor of children of brothers/sisters
undue influence  PER STIRPES – “share equal to that of the indiv they’re
o Loss of parental authority representing” (division of estate)
o Refusal to support without justifiable cause o Rep not to inherit more than what the person they
o Attempt by one parent against life of the other represent would inherit
o Unless there’s reconciliation  PER CAPITA - if a member of the identified group is
deceased, then a share won’t be created for the
DISINHERIT A SPOUSE deceased member and all of the shares of the other
o Convicted of attempt against life of testator, D and A members will be increased accordingly. (art. 987)
o Accused testator of crime prescribing imprisonment for 6 yrs or  May represent one who renounced his inheritance
more and found false
o Cause testator to make will by fraud, violence, intimidation, IF ESTATE NOT SUFFICIENT TO COVER ALL LEGACIES AND DEVISES:
undue influence  Remuneratory l or d
o Gave cause for legal separation  Declared by testator to be preferential
o Repeated physical abuse/grossly abusive conduct  Support
o Physical abuse/moral pressure to change  Education
religious/political belief  Specific, determinate thing
o Engage in prostitution  All others pro rata
o Convicted of imprisonment of more than 6 yrs
o Drug addiction, habitual alcoholism LEGAL/INTESTATE SUCCESSION
o Homosexuality, lesbianism  Dies without will
o Subsequent bigamous marriage  Void will
o Sexual infidelity  Subsequently lost its validity
 Will doesn’t institute an heir or dispose all property
o Attempt against life
 Suspensive condition doesn’t happen
o Abandonment for more than 1yr w/o justifiable cause
 Heir dies before testator
 Grounds for loss of parental authority
  Repudiates inheritance and no substitution and no accretion o Accused T of crime of 6 yrs or more imprisonment if
 Incapable of succeeding groundless
 Relatives in same degree = equal shares o Heir of full age with knowledge of violent death of T and
failed to report to officer within a monh
992. ILLEGITIMATE CHILDREN (iron curtain rule) o Convicted of adultery/concubinage with spouse of T
 Absolute separation between legitimate and illegitimate o Cause T to make will by fraud, violence, I, UE
 Illegitimate child can’t inherit by intestacy from legitimate  Or prevents one from making a will or from
children +relatives of his father and mother revoking, or supplants, alters will
 Legitimate children and relatives can’t inherit from illegitimate  Falsifies/forges will
child
1039. CAPACITY TO SUCCEED governed by law of nation of decedent
COLLATERAL RELATIVES
 To succeed if no D, A, Illegitimate children, spouse 1050. Inheritance deemed accepted
 If brothers, sisters survive with nephews and nieces, former to  Heir sells, donates, assigns right to stranger, co-heir
inherit per capita and latter per stirpes  Heir renounces for benefit of co-heirs
 Right to inherit ab intestato not to extend beyond the 5th degree  Renounces for a price in favor of co-heirs
of relationship in collateral line
COLLATION
RIGHT OF ACCRETION (RIP)  Every compulsory heir to bring into mass estate any
 Part assigned to one who renounces or can’t receive or dies property/right he received from decedent by donation or any
before testator, is added to co-heir-devisees-legatees. gratuitous title
 2 or more persons called to the same inheritance  To determine legitimes of each heir

1027. INCAPABLE OF SUCCEEDING: PARTITION

 Priest who heard confession of testator/spiritual aid during his  Every co-heir has right to demand division of estate UNLESS
last illness testator expressly forbids such (not to exceed 20 yrs)
 Relatives of priest within 4th degree, church to which he belong
 Guardian before final accounts of guardianship approved ORDINARY ACQUISITIVE PRESCRIPTION
 Attesting witness to execution of will, spouse, parent, children  Possession in gf and with just title
 Physician, nurse who took care of T during his last illness  Possession in the concept of owner, public, peaceful and
 Indivs, assoc not permitted by law to inherit uninterrupted
 DUE TO UNWORTHINESS (1032)  If by mere tolerance, not counted as possession
o Parents who abandoned their children or induced to lead  Express or tacit recognition of owner’s right interrupts
corrupt/immoral life possession
o Convicted of attempt against life of T, spouse, D, A  Possession of 10 yrs
EXTRAORDINARY ACQUISITIVE PRESCRIPTION  right of action to recover
 Uninterrupted adverse possession for 30yrs o rely on strength of his title and not on weakness of d’s
 No need for title or gf claim
 right to exclude
PRESCRIPTION
 To recover movable = 8yrs EXPROPRIATION
 Immovable = 30yrs  deprive property by
 Mortgage action = 10yrs o competent authority
 Demand right of way and abate public/private nuisance = no o for public use
prescription o just compensation
 10 yrs
o written contract POLICE POWER
o obligation created by law  property condemned/seized by
o judgment o competent authority
 6yrs o for health, safety, security
o oral contract o no compensation
o quasi-contract
 4yrs 438. HIDDEN TREASURE
o injury to plaintiff’s rights  hidden and unknown deposit of money, jewelry, precious
o quasi-delict objects, lawful ownership of w/c doesn’t appear
 1 yrs  belongs to owner of land, bldg., property on which it is found
o forcible entry and detainer  if found on property of another or State and by chance
o defamation o ½ to finder (not a trespasser)
o ½ to owner
PROPERTY  if of interest to science/arts, State may acquire at just price
 public dominion
o for public use (canals, roads, bridges, ports, shores) RIGHT OF ACCESSION
o belong to the State, for public service or development of  produced, incorporated or attached
national wealth  natural fruits – spontaneous products
o patrimonial property – belongs to the State but not for  industrial – cultivation and labor
public use or service  civil – rents, leases
 private ownership
BUILT, PLANTED, SOWN
OWNERSHIP  GR: belong to owner of land and presumed made by him at his
 right to enjoy and dispose expense
  Owner uses materials of another: pay their value and owner of Trees uprooted
materials can remove them if he can w/o injury to work  Carried away by current of waters
o If in bf: reparation of damages; may remove in any event  Must be claimed within 6mos
 BUILDER IN GF: o If not, belong to owner of land
o landowner can appropriate as his own after paying
indemnity River beds abandoned
o or oblige builder to pay price of land and sower, rent  Thru natural change in course of waters
 but if value of land is considerably more than that  Belong to owners whose lands are occupied by new course in
of bldg. or trees, pay reasonable rent proportion to area lost
 BUILDER IN BF  Owners of adjoining old beds have right to acquire by paying
o Loses what is built, p or s without indemnity value
o Landowner
 may demand demolition/removal at expense of BELONG TO STATE
builder or (+damages)  Islands formed
 compel builder or planter to pay price of land and o On seas within jurisdiction of Phil
sower, proper rent +damages o On lakes
 LANDOWNER (knowledge and w/o opposition) AND BUILDER o On navigable or floatable rivers
IN BF  Except if in non-navigable and non-floatable rivers
o As though both acted in gf  Owners of margins/banks nearest to each
of them
457. ACCRETION
 Belongs to owners of lands adjoining banks of rivers PRINCIPAL
 Gradually receive  That to which the other has been united as ornament
 from effects of current of waters  Greater value and if equal, greater volume

NO ACCRETION Owner of accessory in BF

 Owners of estates adjoining ponds/lagoons  Lose thing incorporated
 Don’t acquire land left dry  Indemnify owner of principal for damages
 By natural decrease of waters
o Doesn’t lose that inundated by extraordinary floods OWNER OF PRINCIPAL IN BF
 Owner of accessory can choose
Portion of land o Principal to pay him its value
 Segregated by current of river, creek or torrent o Thing be separated even if principal thing is destroyed
 Transferred to another estate  Plus damages
 Ownership retained but must remove within 2yrs
MIXTURE BY WILL OR BY CHANCE
  If not separable without injury o present possessor preferred
o Each owner has proportional right to part belonging to o two possessor, one longer in possession
him o date the same: title
 If bad faith, lose thing belonging to him + damages  NECESSARY EXPENSES
o Refunded to every possessor (gf or bf)
QUIET TITLE o If gf, retain thing til reimbursed
 Cloud on title to real property/interest  EXPENSES FOR LUXURY/MERE PLEASURE
 Instrument, record, claim, encumbrance, proceeding o No refund to possessor in gf but may remove if no injury
o Apparently valid but is in truth and in fact invalid, USUFRUCT
ineffective, voidable or unenforceable  Right to enjoy with obligation to preserve form and substance
o Prejudicial to said title  Stranger as to hidden treasure
 Entitled to fruits (natural and industrial, civil)
CO-OWNERSHIP  Ordinary repairs
 Preservation repairs – notify other co-owners if practicable o Wear and tear due to natural use
 MAJORITY (co-owners who represent controlling interest) o For preservation
o Improve/embellish thing o Usufructuary to pay
o Administration and better enjoyment  Taxes and lien on fruits
 ALL  Extraordinary repairs
o Make alterations o Owner’s expense
 Full ownership of his part  Taxes imposed directly on capital
o May alienate, assign or mortgage  EXTINGUISH
o Limited to portion which may be allotted to him in o Death of usufructuary
division upon termination of co-ownership  If in favor of several UYs, not extinguish til death
 Agreement to keep thing undivided of last survivor
o Max of 10yrs. To extend by new agreement o Expiration of period/fulfillment of resolutory condition
o If donor/testator: 20 yrs max o Merger of U and O
o Renunciation of U
POSSESSION o Total loss
 IN GF: not aware that there exists in his title/mode of  If partial loss, continue on remaining part
acquisition any flaw which invalidates it o Termination of right
 No possession (prescription purposes): o Prescription
o acts merely tolerated  GR: number of yrs specified to subsist even if 3rd person dies
o without knowledge of possessor of thing before period expires
o by violence o Exc: expressly granted only in consideration of existence
 question as to possession of such person
  Usufruct on LAND AND BUILDING o Immovable surrounded by other immovable
o If bldg. gets destroyed, UY has right to land and materials o Without adequate outlet to public highway
 If permanent
EASEMENTS/SERVITUDES  Indemnify value of land occupied
 Encumbrance upon an immovable for the benefit of another  Amount of damage
immovable (diff owner) o Least prejudicial to servient + shortest distance from
o Dominant estate- whom easement is made dominant estate to public highway
 Choose most convenient time and manner  AGAINST NUISANCE
 Cause least inconvenience to servient o Noise, offensive odor, smoke, heat, dust, etc
o Servient – subject to easement o Factories and shops allowed provided least annoyance is
 CHARACTERISTICS caused to the neighborhood
o Continuous – use is incessant without intervention of any  LATERAL AND SUBJACENT SUPPORT
man’s act o Excavations causing danger to adjacent land = void
o Discontinuous – used at intervals and depends upon
man’s acts NUISANCE
o Apparent – made known & continually kept in view by  Act, omission, establishment, condition of property or
external signs o Injures/endangers health or safety of others
o Non-apparent – show no external indication of existence o Annoys/offends senses
 Continuous + apparent = acquired by title or 10yrs o Shocks, defies decency/morality
prescription (e.g. aqueduct) o Obstructs with free passage of public
 Continuous + non-apparent = title only highway/street/body of water
 Discontinuous (a or not)= title only o Hinders/impairs use of property
 EXTINGUISH  Remedies
o Merger of D and S owners o Prosecution
o Non-use for 10yrs o Civil action
o Estates fall into condition where easement can’t be used o Abatement w/o judicial proceedings
o Expiration of term/fulfillment of condition  By private person
o Renunciation of D  Demand first upon owner/possessor
o Redemption agreed b/n d and s  Demand is rejected
 WATERS  Abatement approved by health office
o Lower estates to receive waters descending from higher  Value of destruction doesn’t exceed 3k
estates
o Banks of rivers and streams – zone of 3meters along their VOID DONATION
margins to public use  B/n persons guilty of adultery or concubinage
 RIGHT OF WAY  Guilty of such offense, in consideration thereof
  Public officer or wife, d, a by reason of his office  If manufactured specially and not for general
 To incapacitated persons market, contract for piece of work. Not contract of
sale.
DONATION o Pay price certain in money/equivalent
 Donee must accept  If not fix, inefficacious
o During lifetime of donor and donee  Simulated price = void
 Movable – orally or in writing  Sale of vain hope or expectancy is void.
o Oral required simultaneous delivery  Gross inadequacy of price allowed except if it indicates defect in
o If exceeds 5k, donation and acceptance = in writing. If consent
not, void.  CONTRACT TO SELL (1478)
 Immovable o Stipulation that ownership in thing shall not pass to
o Public document purchaser til he has fully paid the price
 Accepted unilateral promise to buy or sell
REVOKE OR REDUCE DONATION (exceeds portion that may be freely o Binding upon promissor if supported by consideration
disposed) ---prescribes after 4 yrs distinct from price
 After donation, donor has legit, legitimated or illegitimate  EARNEST MONEY
children (even though posthumous) o Part of price and proof of perfection of contract of sale
 Donor’s child turn out be alive (believed to be dead)
 Donor subsequently adopt minor child 1483. RECTO LAW
 Contract of sale of personal property
DONOR MAY REVOKE (DUE TO INGRATITUDE)  Payable in installments
 Commits offense against person, honor, property of donor, wife,  Vendor may
children under his parental authority o Exact fulfillment if vendee fails to pay
 Imputes to donor any criminal offense/act of moral turpitude o Cancel sale for vendee’s failure to pay 2 or more
even if proven installments
o Unless if against donee and family o Foreclose chattel mortgage for vendee’s failure to pay 2
 Unduly refuses him support or more installments (RECTO)
o Prescribes in 1 yr from time donor had knowledge of fact  Can’t recover unpaid balance of price

DISQUALIFIED TO ACQUIRE BY PURCHASE

 Guardians
SALES  Agents
 Contract of sale – perfected upon mtng of minds upon thing  Executors and administrators
(object and price)  Public officers and employees
o Transfer ownership and deliver determinate thing Goods  Justices, judges, prosecuting attys
procured for general market
SELLER’S RISK  Owned by the one who first took possession in GF
 Until ownership is transferred to buyer o Immovable property
BUYER’S RISK o Owned by one who first recorded it in Registry of
 Ownership is transferred WON there’s actual delivery Property in GF
 Ownership retained by seller merely to secure performance by  If no inscription
buyer o First to take possession in gf and if not
o One who presents oldest title in gf
BUYER ACQUIRES NO BETTER TITLE THAN THE SELLER
 If seller is not the owner or no authority to sell EXTINGUISHMENT OF SALE
 Except  Conventional redemption
o Apparent owner of goods as if true owner o Vendor reserves right to repurchase thing sold
o Under statutory power of sale or order of court  Legal redemption
o Made in merchant’s store, in fairs or markets o Right to be subrogated upon same terms and conditions
in contract in place of one who acquires it by onerous
CONTRACT RATE title
 Deliver quantity of goods less than he contracted to sell
o Buyer may reject 1602. PRESUMED EQUITABLE MORTGAGE
o Buyer may accept/retain knowing seller isn’t going to  Price of sale with right to repurchase is unusually inadequate
perform in full  Vendor remains in possession as lessee
 Pay contract rate  Extending period of redemption/new period after expiration of
right to repurchase
FAIR VALUE  Purchaser retains part of purchase price
 Buyer uses goods before knowing that seller can’t perform in full  Vendor binds himself to pay taxes
o Pay fair value only of goods received  Real intention is secure payment of debt

UNPAID SELLER LEASE

 Lien on goods/right to retain  Lessee can’t assign lease without consent of lessor
 Right of stopping of goods in transit after he has parted with o Unless stipulation to contrary
possession  Lessee may sublet thing leased (whole or part)
o May resume possession o Unless there’s express prohibition
 Right of resale o Sublessee bound to lessor for use and preservation of
 To rescind the sale thing leased
 Subsidiarily liable to lessor for rent due from
1544. DOUBLE SALE lessee
 Same thing sold to different vendees  IMPLIED NEW LEASE
o Movable property
 o Lessee continues to enjoy thing leased for 15 days at end  Secure fulfillment of principal oblig
of contract with acquiescence of lessor  Pledger/mortgagor – absolute owner
 Free disposal of their property
PARTNERSHIP
 To contribute money, property, industry to common fund to QUASI-DELICTS
divide profits among themselves.  Act/omission causes damage to another
 Juridical personality separate and distinct from partners  Fault or negligence
 Share of losses and profits as to agreement o Entirely separate and distinct from civil liability arising
o If none, in proportion to what he may have contributed from negligence under Penal Code
o Industrial partner not liable for losses  Pay for the damages
 Receive share as may be just and equitable under  No pre-existing contract
the circumstances
 Stipulation which excludes one or more partners from share in 2180. Demandable not only for one’s own acts but also for those
profits or losses is void (1799) persons whom one is responsible
 Father—mother(if father is dead or incapacitated)= minor
AGENCY children who live in their company
 Binds himself to render service or do something in  Guardians=minors/incapacitated under their authority and live
representation/behalf of another with consent/authority of in their company
another  Owners/managers of establishment = employees in service
 Sale of land  Employers = employees and household helpers acting within
o Authority be in writing. Otherwise, void sale (1874) scope of assigned tasks
 State if it acts thru special agent
GUARANTY  Teachers/heads of establishments of arts and trades = pupils,
 Binds himself to creditor students, apprentices as long as they remain in custody
o Fulfill obligation of principal debtor
 If bind solidarily, suretyship Provinces, cities, mun
 GR: Exhaust all property of debtor first and resort to all legal  Liable for damages for death/injury
remedies against debtor before compelling guarantor to pay  Due to defective condition of roads, streets, bridges, public
o EXC: (NO EXCUSSION) works under their control or supervision
 Guarantor expressly renounced it
 Bound solidarily with debtor 1156. An Obligation is a juridical necessity to give, to do or not to do.
 Debtor’s insolvency 1157. Obligations arise from law, contracts, quasi-contracts, acts or omissions
 Absconded/can’t be sued punished by law and quasi-delicts.
 Execution wouldn’t satisfy oblig
1158. LAW
Obligations derived from law are not presumed. Only those expressly
PLEDGE & MORTGAGE determined in this Code or in special laws are demandable and shall be
regulated by the precepts of the law which established them and as to what When what is to be delivered is a determinate thing, the creditor (aside from
has not been foreseen, by the provisions of this Book. right to damages-Art. 1170) may compel the debtor to make the delivery.

1159. CONTRACTS INDETERMINATE THING

Obligations arising from contracts have the force of law between the If the thing is indeterminate or generic, he may ask that the obligation be
contracting parties and should be complied with in good faith. complied with at the expense of the debtor.

1160. QUASI-CONTRACTS If the obligor DELAYS or has promised to deliver the same thing to TWO or
Obligations derived from quasi-contracts shall be subject to the provisions of MORE PERSONS who do not have the same interest, he shall be responsible
Chapter 2, Title 17 (Extra-contractual obligations) for fortuitous event until he has effected the delivery.

1161. CRIMES 1166. ACCESSIONS and ACCESSORIES

Civil obligations arising from criminal offenses shall be governed by the penal The obligation to give a determinate thing includes that of delivering all it
laws, subject to Art. 2177 (Quasi-delicts) accessions and accessories, even though they may not have been mentioned.

 Responsibility for fault or negligence under the preceding article 1167. POORLY DONE BE UNDONE
(quasi-delict) is entirely separate and distinct from the civil liability If a person obliged to do something fails to do it, the same shall be executed at
arising from negligence under the Penal Code. But the plaintiff cannot his cost.
recover damages twice for the same act or omission of the defendant.
Same rule shall be observed if he does it in contravention of the tenor of the
and of human relations provisions and Title 18 regulating damages. obligation. May be decreed that what has been poorly done be undone.

1162. QUASI-DELICT 1168. DOES A FORBIDDEN ACT

Obligations derived from quasi-delicts shall be governed by Chapter 2, Title When the obligation consists in not doing, and obligor does what has been
17 and by special laws. forbidden him, it shall also be undone at his expense.

1163. STANDARD OF CARE 1169. DELAY from time of DEMAND

Every person obliged to give something is also obliged to take care of it with Those obliged to deliver or to do something incur in delay from the time the
the proper diligence of a good father of a family, unless the law or the obligee judicially or extrajudicially demands from them the fulfillment of their
stipulation of the parties requires another standard of care. obligation.

1164. RIGHT TO THE FRUITS DEMAND NOT NECESSARY = DELAY

The creditor has a right to the fruits of the thing from the time the obligation However, demand by the creditor shall not be necessary for delay to exist:
to deliver it arises. However, he shall acquire no real right over it until the
same has been delivered to him. 1. Obligation or law expressly so declares
2. From the nature and the circumstances of the obligation it appears that the
designation of TIME when the thing is to be delivered or service is to be
rendered was a CONTROLLING MOTIVE for the establishment of the contract
1165. DETERMINATE THING 3. Demand would be useless, as the obligor has rendered it beyond his power
to perform.
 EXCEPT:
RECIPROCAL OBLIGATIONS -in cases expressly specified by law, or
In reciprocal obligations, neither party incurs in delay if the other party does -when it is otherwise declared by stipulation
not comply or is not ready to comply in a proper manner with what is -when nature of the obligation requires the assumption of risk
incumbent upon him. From the moment one of the parties fulfills his
obligation, delay by the other begins. 1175. USURIOUS TRANSACTIONS shall be governed by special laws.

1170. FRAUD, NEGLIGENCE, DELAY 1176. PRESUMPTION OF PAID INTEREST

Those who in the performance of their obligations are guilty of fraud, Receipt of the principal by the creditor, without reservation with respect to
negligence or delay and those who in any manner contravene the tenor the interest, shall give rise to the presumption that said interest has been paid.
thereof, are liable for damages.
PRESUMPTION OF PAID INSTALLMENTS
1171. FRAUD Receipt of a later installment of a debt without reservation as to prior
Responsibility arising from fraud is demandable in all obligations. Any waiver installments shall give rise to the presumption that such installments have
of an action for future fraud is void. been paid.

1172. NEGLIGENCE 1177. TO SATISFY CREDITOR’S CLAIMS

Responsibility arising from negligence in the performance of every kind of The creditors, after having pursued the property in possession of the debtor
obligation is also demandable, but such liability may be regulated by the to satisfy their claims, may exercise all the rights and bring all the actions of
courts, according to the circumstances. the latter for the same purpose, save those which are inherent in his person;
they may also impugn the acts which the debtor may have done to defraud
1173. OMISSION OF DILIGENCE them.
Fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the 1178. TRANSMISSIBLE RIGHTS
circumstances of the persons, of the time and of the place. When negligence All rights acquired in virtue of an obligation are transmissible, if there has
shows bad faith, 1171 (fraud) and par. 2, 2201 shall apply: been no stipulation to the contrary and subject to the laws.

 In case of fraud, bad faith, malice or wanton attitude, the obligor shall 1179. PURE OBLIGATION
be responsible for all damages which may be reasonably attributed to Every obligation whose performance does not depend upon a future or
the non-performance of the obligation. uncertain event, or upon a past event unknown to the parties, is demandable
at once.
DILIGENCE REQUIRED
If the law or contract does not state the diligence which is to be observed in Every obligation which contains a RESOLUTORY CONDITION shall also be
the performance, that which is expected of a good father of a family shall be demandable, without prejudice to the effects of the happening of the event.
required.
1180. OBLIGATION WITH A PERIOD
1174. NOT RESPONSIBLE for UNFORSEEN When the debtor binds himself to pay when his means permit him to do so,
No person shall be responsible for those events which could not be foreseen, the obligation shall be deemed to be one with a period, subject to 1197.
or which though foreseen, were inevitable.
  If the obligation does not fix a period, but from its nature and The condition that some event will not happen at a determinate time shall
circumstances it can be inferred that a period was intended, the courts render the obligation effective from the moment the time indicated has
may fix the duration thereof. elapsed, or it has become evident that the event cannot occur.

Courts shall also fix the duration of the period when it depends upon NO TIME FIXED
the will of the debtor. If no time has been fixed, the condition shall be deemed fulfilled at such time
as may have probably been contemplated, bearing in mind the nature of the
Courts shall determine such period as may under the circumstances obligation.
have been probably contemplated by the parties. Once fixed by the
courts, period cannot be changed by them. 1186. DEEMED FULFILLED
The condition shall be deemed fulfilled when the obligor voluntarily prevents
1181. CONDITIONAL OBLIGATION its fulfillment.
In conditional obligations, the acquisition of rights as well as the
extinguishment or loss of those already acquired, shall depend upon the 1187.EFFECTS OF CONDITIONAL OBLIGATION
happening of the event which constitutes the condition. The effects of a conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the constitution of the obligation.

1182. SOLE WILL OF DEBTOR RECIPROCAL PRESTATIONS

When fulfillment of condition depends upon sole will of the debtor, Nevertheless, when the obligation imposes reciprocal prestations upon the
conditional obligation is void. If it depends upon chance or upon will of 3 rd parties, the fruits and interests during the pendency of the condition shall be
person, obligation shall take effect in conformity with this Code. deemed to have been mutually compensated.

1183. IMPOSSIBLE CONDITION UNILATERAL OBLIGATION

Impossible conditions, those contrary to good customs or public policy and If the obligation is unilateral, the debtor shall appropriate the fruits and
those prohibited by law shall ANNUL the obligation which depends upon interests received, unless from the nature and circumstances of the obligation
them. it should be inferred that the intention of the person constituting the same
was different.
If obligation is divisible, the part not affected by the impossible/unlawful
condition shall be valid. In obligations to do and not to do, the courts shall determine, in each case, the
Condition not to do an impossible thing shall be considered as not having retroactive effect of the condition that has been complied with.
been agreed upon.
1188. CREDITOR PRESERVES HIS RIGHT
1184. CONDITION: EVENT TO HAPPEN The creditor may, before the fulfillment of the condition, bring the
The condition that some event happen at a determinate time shall extinguish appropriate actions for the preservation of his right.
the obligation as soon as the time expires or it has become indubitable that
the event will not take place. RECOVER MONEY PAID BY MISTAKE
Debtor may recover what during the same time he has paid by mistake in case
1185. CONDITION: EVENT NOT TO HAPPEN of a suspensive condition.

1189.IMPROVEMENT,LOSS,DETERIORATION
When conditions have been imposed with the intention of suspending the
efficacy of an obligation to give, ff. rules shall be observed in case of For obligations to do and not to do, par. 2 of 1187(courts to determine
improvement, loss or deterioration of the thing during pendency of the retroactive effect of conditions complied with) shall be observed as to the
condition: effect of the extinguishment of the obligation

LOSS 1191. RECIPROCAL OBLIGATIONS

1. If the thing is lost without the fault of the debtor, the obligation shall be The power to rescind obligations is implied in reciprocal ones, in case one of
extinguished the obligors should not comply with what is incumbent upon him.
2. If the thing is lost through the fault of the debtor, he shall be obliged to pay
damages; it is understood that the thing is lost when FULFILLMENT OR RESCISSION
 It perishes Injured party may choose between the fulfillment and the rescission of the
 Goes out of commerce obligation, with the payment of damages in either case. He may also seek
 Disappears in such a way that its existence is unknown or it cannot be rescission even after he has chosen fulfillment, if the latter should become
recovered. impossible.

DETERIORATION Court shall decree rescission claimed, unless there be just cause authorizing
3. When the thing deteriorates without the fault of the debtor, impairment is the fixing of a period.
to be borne by the creditor.
4. If is deteriorates through the fault of the debtor, creditor may choose This is without prejudice to the rights of 3rd persons who have acquired the
between the rescission of the obligation and its fulfillment, with indemnity for thing, in accordance with 1385 (no rescission is 3 rd person legally possessed it
damages in either case. in good faith) and 1388 (if in bad faith, indemnify creditors for damages) and
the Mortgage Law.
IMPROVEMENT
5. If the thing is improved by nature or by time, improvement shall inure to 1192. BOTH BREACHED THE OBLIGATION
the benefit of the creditor. In case both parties have committed a breached of the obligation, the liability
6. If it is improved at the expense of the debtor, he shall have no other right of the first infractor shall be equitably tempered by the courts.
than that granted to the usufructuary1.
If it cannot be determined which of the parties first violated the contract,
1190. RESOLUTORY CONDITION same shall be deemed extinguished and each shall bear his own damages.
When the conditions have for their purpose the extinguishment of an
obligation to give, the parties upon the fulfillment of the conditions, shall 1193. OBLIGATIONS WITH A PERIOD
return to each other what they have received. Obligations for whose fulfillment a day certain has been fixed, shall be
demandable only when that day comes.
In case of Loss, Deterioration, or Improvement of the thing, 1189 with respect
to the debtor shall be applied to the party who is bound to return. Obligations with a RESOLUTORY PERIOD take effect at once, but terminate
upon arrival of the day certain.
1
legal right of using and enjoying the fruits/profits of something
belonging to another A DAY CERTAIN is understood to be that which must necessarily come
although it may not be known when.
If the uncertainty consists in whether the day will come or not, obligation is 3. When by his own acts he has IMPAIRED said GUARANTIES/SECURITIES
conditional and shall be regulated by the rules of preceding section after their establishment and when through a fortuitous event they disappear,
(Conditional obligations). unless he immediately gives new ones equally satisfactory.

1194. Loss, deterioration or improvement of the thing BEFORE THE 4. Debtor VIOLATES ANY UNDERTAKING, in consideration of which the
ARRIVAL OF THE DAY CERTAIN, 1189 shall be observed. creditor agreed to the period
5. Debtor ATTEMPTS TO ABSCOND.
1195. EARLY PAYMENT OR DELIVERY
Anything paid or delivered before the arrival of the period, obligor being
unaware of the period or believing that the obligation has become due and
demandable, may be recovered with fruits and interests.
ALTERNATIVE OBLIGATIONS
1196. PRESUMED TO BENEFIT BOTH C and D
Whenever in an obligation a period is designated, it is presumed to have been 1199.COMPLETELY PERFORM ONE OF THEM
established for the benefit of both the creditor and the debtor, UNLESS from A person alternatively bound by different prestations shall completely
the tenor of the same or other circumstances it should appear that the period perform one of them.
has been established in favor of one or of the other.
Creditor cannot be compelled to receive part of one and part of the other
1197. COURTS TO FIX DURATION undertaking.

If the obligation does not fix a period, but from its nature and circumstances it 1200. RIGHT OF CHOICE BELONGS TO DEBTOR
can be inferred that a period was intended, the courts may fix the duration
thereof. The right of choice belongs to the debtor UNLESS it has been expressly
granted to the creditor.
Courts shall also fix the duration of the period when it depends upon the will
of the debtor. Debtor shall have no right to choose those prestations which are impossible,
unlawful or which could not have been the object of the obligation.
Courts shall determine such period as may under the circumstances have
been probably contemplated by the parties. Once fixed by the courts, period 1201. CHOICE NEEDS TO BE COMMUNICATED
cannot be changed by them. The choice shall produce no effect except from the time it has been
communicated.
1198. LOSE RIGHT TO USE PERIOD
The debtor shall lose every right to make use of the period: 1202. LOSE RIGHT OF CHOICE
Debtor shall lose right of choice when among the prestations whereby he is
1. When after the obligation has been contracted, he becomes INSOLVENT, alternatively bound, only one is practicable.
unless he gives a guaranty or security for the debt.
2. He DOESN’T FURNISH to the creditor the GUARANTIES or SECURITIES 1203. WHEN DEBTOR CAN’T MAKE CHOICE
which he has promised. If through the creditor’s acts the debtor cannot make a choice according to the
terms of the obligation, debtor may rescind the contract with damages.
1204. CREDITOR’S RIGHT TO DAMAGES When only one prestation has been agreed upon, but the obligor may render
The creditor shall have a right to indemnity for damages, when through the another in substitution, obligation is called facultative.
fault of the debtor, which are all things alternatively the object of the
obligation have been LOST, or compliance of obligation has become WHEN SUBSTITUTION IS MADE, LOSS OF IT
IMPOSSIBLE. Loss or deterioration of the thing intended as substitute, thru negligence of
the obligor, doesn’t render him liable. But once the substitution has been
BASIS OF INDEMNITY made, obligor is liable for the loss of the substitute on account of his delay,
Indemnity shall be fixed taking as a basis the value of the last thing which negligence or fraud.
disappeared or that of the service which last became impossible.
1207. JOINT OBLIGATION PRESUMED
Damages other than the value of the last thing or service may also be The concurrence of 2 or more creditors or 2 or more debtors in one and the
awarded. same obligation does not imply that each one of the creditor has a right to
demand, or that each one of the debtor is bound to render entire compliance
1205. CHOICE EXPRESSLY GIVEN TO CREDITOR with the prestation.
When choice has been expressly given to the creditor, obligation shall CEASE
to be ALTERNATIVE from the day selection has been communicated to the SOLIDARY LIABILITY = EXPRESSLY STATED
debtor. There is solidary liability only when the obligation expressly so states or
when the law or nature of the obligation requires solidarity.
Until then the RESPONSIBILITY of the DEBTOR shall be governed by the ff.
rules: 1208. PRESUMED TO BE DIVIDED
If from the law, or nature/ wording of the obligations do not require
solidarity, credit or debt shall be presumed to be divided into as many equal
DELIVER WHICH CREDITOR CHOOSES shares as there are creditors or debtors, credits or debts being distinct from
1. If one of the things is lost thru fortuitous event, he shall perform the one another subject to RoC governing multiplicity of suits.
obligation by delivering that which the creditor should choose from among
the remainder or that which remains if only one subsists. 1209. DIVISION IS IMPOSSIBLE
If division is impossible, right of creditors may be prejudiced only by their
PAY PRICE OF THING LOST and DAMAGES collective acts and debt can be enforced only by proceeding against all the
2. If loss of one of the things is thru the fault of the debtor, creditor may claim debtors.
any of those subsisting or the price of that which, thru fault of debtor, has
disappeared with right to damages. If one of the debtors should be insolvent, the others shall not be liable for his
share.
PAY PRICE OF ANY and DAMAGES
3. If all things are lost thru fault of debtor, choice by the creditor shall fall 1210. INDIVISIBILITY DOESN’T ALWAYS IMPLY SOLIDARITY
upon the price of any one of them, also with indemnity for damages. The indivisibility of an obligation does not necessarily give rise to solidarity.
Nor does solidarity of itself imply indivisibility.
Same rules apply to obligations to do or not to do in case one, some or all
prestations become impossible. 1211. SOLIDARITY = MAY BE BOUND DIFFERENTLY
Solidarity may exist although the creditors and debtors may not be bound in
1206. FACULTATIVE OBLIGATION the same manner and by the same periods and conditions
 payment is made before debt is due, no interest for the intervening period
1212. CAN DO ONLY WHAT IS USEFUL may be demanded.
Each one of the solidary creditors may do whatever may be useful to the
others, but not anything which may be prejudicial to the others. When one of the solidary debtors cannot reimburse his share to the debtor
1213. CAN’T ASSIGN RIGHTS W/O CONSENT paying the obligation due to INSOLVENCY, such share shall be borne by all his
A solidary creditor cannot assign his rights without the consent of the others. co-debtors, in proportion to the debt of each.

1214. MAY PAY ANY SOLIDARY CREDITOR 1218. NOT ENTITLED TO REIMBURSEMENT
Debtor may pay any one of the solidary creditors but if any demand, judicial Payment by a solidary debtor shall not entitle him to reimbursement from his
or extrajudicial, has been made by one of them, payment should be made to co-debtors if such payment is made after obligation has PRESCRIBED or
him become ILLEGAL.

1215. NC (3) 1219. (Remission of debtor doesn’t release him from responsibility towards
Novation, compensation, confusion or remission/condonation of the debt, co-debtors)
made by any of the solidary debtors, shall extinguish the obligation without
prejudice to 1219. 1220. NOT ENTITLED TO REIMBURSEMENT Remission of whole obligation,
obtained by one of the solidary debtors, doesn’t entitle him to reimbursement
 Remission by the creditor of the share which affects one of the from his co-debtors.
solidary debtors doesn’t release the latter from his responsibility
towards co-debtors, in case the debt had been totally paid by anyone 1221. WITHOUT FAULT OF DEBTORS
of them before remission was effected. (Remission of debtor doesn’t If the thing has been lost or if the prestation has become impossible without
release him from responsibility towards co-debtors) the fault of the solidary debtors, obligation shall be extinguished.

Creditor who may have executed any of these acts, as well as he who collects THERE’S FAULT=PAY DAMAGES & INTEREST
the debt, shall be liable to the others for the share in the obligation If there was fault on the part of any one of them, all shall be responsible to the
corresponding to them. creditor, for the price and payment of damages and interest, without
prejudice to their action against the guilty or negligent debtor.
1216. 1 or ALL of THEM SIMULTANEOUSLY
Creditor may proceed against any one of the solidary debtors or some or all of FORTUITOUS EVENT
them simultaneously. Demand made against one of them shall not be an If through a fortuitous event, thing is lost or performance has become
obstacle to those which may subsequently be directed against the others, so impossible after one of the solidary debtors incurred in delay through
long as the debt has not been fully collected. judicial/extrajudicial demand upon him by creditor, prior par applies (all be
responsible to creditor).
1217. MAY CHOOSE w/c OFFER TO ACCEPT
Payment made by one of the solidary debtors extinguishes the obligation. If 2 1222. DEFENSES OF SOLIDARY DEBTOR
or more solidary debtors offer to pay, creditor may choose which offer to A solidary debtor may, in actions filed by the creditor, avail himself of all
accept. defenses which are derived from
 The nature of the obligation
He who made the payment may claim from his co-debtors only the share  Those personal to him or pertain to his own share
which corresponds to each, with the interest for the payment already made. If
  Those which personally belong to others only as regards that part of
the debt for which others are responsible. 1227. PAYING PENALTY NOT ENOUGH
Debtor cannot exempt himself from the performance of the obligation by
1223. DIVISIBLE and INDIVISIBLE OBLIG paying the penalty, except where this right has been expressly reserved for
Divisibility and indivisibility of things which are the object of the obligations him.
in which there is only one debtor and only one creditor doesn’t alter/modify
nature and effects of obligation. Neither can creditor demand fulfillment of obligation and satisfaction of
penalty at the same time, unless this right has been clearly granted him.
1224. JOINT INDIVISIBLE OBLIGATION
A joint indivisible obligation gives rise to indemnity for damages from the However, if after creditor has decided to require fulfillment of obligation,
time anyone of the debtors doesn’t comply with his undertaking. Debtors performance should become impossible without his fault, penalty may be
who may have been ready to fulfill their promises shall not contribute to enforced.
indemnity beyond the corresponding portion of price of the thing or value of
service in which the obligation consists. 1228. ACTUAL DAMAGES NOT NECESSARY
Proof of actual damages suffered by the creditor is not necessary in order that
1225. INDIVISIBLE penalty may be demanded.
Obligations to give definite things and those which are not susceptible of
partial performance shall be deemed to be indivisible. 1229. PENALTY MAY BE REDUCED
The judge shall equitably reduce the penalty when the principal obligation has
DIVISIBLE been partly or irregularly complied with by the debtor. Even if there had been
When the obligation has for its object the execution of a certain number of no performance, penalty may also be reduced by the courts it is INIQUITOUS
days of work, accomplishment of work by metrical units, or analogous things or UNCONSCIONABLE.
which by their nature are susceptible of partial performance, it shall be
divisible. 1230. NULLITY OF PENAL CLAUSE doesn’t carry with it that of the principal
obligation.
PHYSICALLY DIVISIBLE BUT INDIVISIBLE
Even though the object or service may by physically divisible, an obligation is NULLITY OF PRINCIPAL obligation carries with it that of the penal clause.
indivisible if so provided by law or intended by the parties.

CHARACTER OF PRESTATION
In obligations to do, divisibility or indivisibility shall be determined by the EXTINGUISHMENT OF OBLIGATIONS
character of the prestation in each particular case. 1231. OBLIGATIONS EXTINGUISHED BY:

1226. PENALTY SUBSTITUTES INDEMNITY for DAMAGES + INTERESTS 1. Payment or Performance

In obligations with a penal clause, penalty shall substitute indemnity for 2. Loss of the thing due
damages and payment of interests in case of noncompliance, if there is no 3. Condonation or Remission of debt
stipulation to the contrary. Nevertheless, damages shall be paid if the obligor 4. Confusion or Merger of rights of Creditor and Debtor
refuses to pay penalty or is guilty of fraud in fulfillment of obligation. 5. Compensation
6. Novation
Penalty may be enforced only when demandable according to this Code.
Other causes of extinguishment:
 Annulment 1238. DONATION=D’s CONSENT REQUIRED
 Rescission Payment by a 3rd person who does not intend to be reimbursed by the debtor
 Fulfillment of a resolutory condition is deemed to be a donation, which requires the debtor’s consent. But payment
 Prescription is in any case valid as to the creditor who has accepted it.

1232. PAYMENT = PAY OR PERFORM 1239. HAS NO FREE DISPOSAL OF THING

Payment means not only the delivery of money but also the performance, in In obligations to give, payment made by one who does not have the free
any other manner of an obligation. disposal of the thing due and capacity to alienate it shall NOT BE VALID,
without prejudice to 1427
1233. MUST BE COMPLETELY DELIVERED
A debt shall not be understood to have been paid unless the thing or service in  When a minor between 18 ad 21 yrs. old, who has entered into a
which the obligation consists has been completely delivered or rendered as contract without the consent of the parent/guardian, voluntarily pays
the case may be. sum of money or delivers a fungible thing in fulfillment of the
obligation – NO RIGHT TO RECOVER the same from obligee who has
1234. SUBSTANTIAL COMPLIANCE in GFaith spent or consumed it in good faith.
If the obligation has been substantially performed in good faith, obligor may
recover as though there had been a strict and complete fulfillment, less 1240. PAY IN WHOSE FAVOR OBLIGATION WAS MADE
damages suffered by obligee. Payment shall be made to the person in whose favor obligation was
constituted, or his successor in interest, or any person authorized to receive it.
1235. ACCEPT = DEEMED FULLY COMPLIED
When the obligee accepts the performance, knowing its incompleteness or 1241. VALID AS TO WHAT WAS BENEFICIAL
irregularity, and without expressing any protest or objection, obligation is Payment made to person who is incapacitated to administer his property shall
deemed fully complied with. be valid if he has kept the thing delivered or insofar as the payment has been
beneficial to him.
1236. 3rd PERSON WITH NO INTEREST
Creditor is not bound to accept payment or performance by a 3rd person who REDOUNDED TO BENEFIT OF CREDITOR
has no interest in the fulfillment of the obligation unless there is a stipulation Payment made to a 3rd person shall also be valid insofar as it has redounded to
to the contrary. the benefit of the creditor. Such benefit NEED NOT BE PROVED in the ff. cases:

REIMBURSEMENT 1. If after payment, 3rd person acquires creditor’s rights

Whoever pays for another may demand from the debtor what he has paid, 2. If creditor ratifies the payment to 3rd person
except that if he paid without the knowledge or against the will of the debtor, 3. If by creditor’s conduct, debtor has been led to believe that the 3 rd person
he can recover only insofar as the payment has been beneficial to the debtor. has authority to receive payment.

1242. RELEASE DEBTOR

1237. AGAINST KNOWLEDGE/ WILL OF Debtor Payment made in good faith to any person in possession of credit shall release
Whoever pays on behalf of the debtor without the knowledge or against the the debtor.
will of the debtor, cannot compel the creditor to subrogate him in his rights,
such as those arising from a mortgage, guaranty or penalty. 1243. DEBTOR PAYS EVEN IF ORDERED NOT
Payment made to the creditor by the debtor after the debtor has been CONDSIDERED PAID ONLY WHEN CASHED or IMPAIRED THRU
judicially ordered to retain the debt shall not be valid. CREDITOR’S FAULT
The delivery of promissory notes payable to order, or bills of exchange or
1244. CANNOT COMPEL TO RECEIVE DIFF. 1 other mercantile documents shall produce the effect of payment ONLY when
Debtor of a thing cannot compel the creditor to receive a different one, they have been CASHED, or when through the fault of the creditor they have
although the latter may be of the same value as or more valuable than that been IMPAIRED.
which is due.
In the meantime, the action derived from the original obligation shall be held
In obligations to do or not to do, an act or forbearance cannot be substituted in abeyance.
by another act or forbearance against the obligee’s will.
1250. VALUE OF CURRENCY
1245. DATION IN PAYMENT In case an extraordinary inflation or deflation of the currency stipulated
Dation in payment, where the property is alienated to the creditor in should supervene, the value of the currency at the time of the establishment of
satisfaction of a debt in money, shall be governed by the law of sales. the obligation shall be the BASIS OF PAYMENT, unless there is an agreement
to the contrary.
1246. DELIVERY OF GENERIC THING
When the obligation consists in the delivery of an indeterminate or generic 1251. PLACE OF PAYMENT
thing, whose quality and circumstances have not been stated, creditor cannot Payment shall be made in the PLACE DESIGNATED in the obligation.
demand a thing of superior quality. Neither can debtor deliver a thing of
inferior quality. Purpose of obligation and other circumstances shall be taken There being no express stipulation and if the undertaking is to deliver a
into consideration. determinate thing, the payment shall be made WHEREVER THE THING
MIGHT BE at the moment the obligation was constituted.
1247. EXTRAJUDICIAL EXPENSES ON ACCOUNT OF DEBTOR
Unless it is otherwise stipulated, extrajudicial expenses required by the In any other case the place of payment shall be the DOMICILE of the DEBTOR.
payment shall be for the account of the debtor. Judicial costs to be governed
by RoC. If the debtor changes his domicile in bad faith or after he has incurred in
delay, additional expenses shall be borne by him.
1248. CAN’T COMPEL TO RECEIVE PARTIALLY
Unless there is n express stipulation to that effect, creditor can’t be compelled Without prejudice to venue under RoC.
partially to receive the prestation in which the obligation consists. Neither
may debtor be required to make partial payments. 1252. VARIOUS DEBTS = SAME CREDITOR
He who has various debs of the same kind in favor of one and the same
However, when debt is in part liquidated and in part unliquidated, creditor creditor, may declare at the time of making the payment, to which of them the
may demand and the debtor may effect the payment of the former without same must be applied.
waiting for liquidation of the latter.
1249. BE MADE IN CURRENCY STIPULATED Unless the parties so stipulate, or when the application of payment is made by
Payment of debts in money shall be made in currency stipulated, and it if is the party for whose benefit term has been constituted, application shall not be
not possible to deliver such currency, then in the currency which is legal made as to debts which are not yet due.
tender in the Philippines.
 If debtor accepts from creditor a receipt in which an application of payment is
made, debtor cannot complain of the same, unless there is a cause for 1257. PERSONS INTERESTED
invalidating the contract. To release obligor, must first be announced to the persons interested in the
fulfillment of obligation.
1253.PAY INTERESTS 1ST B4 PRINCIPAL
If debt produces interest, payment of principal shall not be deemed to have Consignation be ineffectual if not made strictly in consonance with provisions
been made until the interests have been covered. which regulated payment.

1254. DEBT MOST ONEROUS TO DEBTOR 1258. DEPOSIT THING DUE

When payment can’t be applied under preceding rules or can’t be inferred Depositing the things due at the disposal of judicial authority, before whom
from other circumstances, the debt which is most onerous to the debtor, tender of payment shall be proved in a proper case and announcement of
among those due, shall be DEEMED to have been SATISFIED. consignation in other cases.

If debts due are of the same nature and burden, payment be applied to all of NOTIFY INTERESTED PARTIES AFTER C
them PROPORTIONATELY. After consignation has been made, interested parties shall be notified thereof.

1255. PAYMENT BY CESSION 1259. EXPENSES AGAINST CREDITOR

Debtor may cede or assign his property to his creditors in payment of his Expenses of consignation, when properly made, shall be charged against the
debts. This cession shall only release debtor from responsibility from net creditor.
proceeds of thing assigned UNLESS there is stipulation to the contrary.
1260. ORDER TO CANCEL OBLIGATION
With regard to effect of cession, agreements made between debtor and his Once consignation has been duly made, debtor may ask the judge to order the
creditors shall be governed by special laws. cancellation of the obligation.

1256. TENDER OF PAYMENT DEBTOR MAY WITHDRAW IT

If creditor to whom tender of payment has been made refuses without just Before creditor has accepted the consignation, or before a judicial declaration
cause to accept it, debtor shall be released from responsibility by consignation that consignation has been properly made, debtor may withdraw the thing or
of the thing or sum due. sum deposited, allowing obligation to remain in force.

CONSIGNATION ALONE produces same effect: 1261.C AUTHORIZES WITHDRAWAL

1. Creditor is absent or unknown, or doesn’t appear at the place of payment If after consignation, creditor should authorize debtor to withdraw the same,
he shall lose every preference which he may have over the thing. Co-debtors,
2. Creditor is incapacitated to receive payment at the time it is due guarantors and sureties shall be released.
3. Creditor refuses to give a receipt without just cause.
1262. LOSS OF DETERMINATE THING
4. Two or more persons claim the same right to collect An obligation which consists in the delivery of a determinate thing shall be
5. Title of the obligation has been lost. EXTINGUISHED if it should be LOST or DESTROYED without fault of the
debtor and before he has incurred in delay.

REQUIREMENTS FOR VALID CONSIGNATION LIABLE EVEN FOR FORTUITOUS EVENTS

When by law or stipulation, obligor is liable even for fortuitous events, loss of 1270. CONDONATION/REMISSION
thing DOESN’T EXTINGUISH the obligation, and obligor shall be responsible Essentially gratuitous and requires acceptance by the obligor. May be made
for damages. Same rule applies when nature of obligation requires expressly or impliedly.
assumption of risk. One and other kinds shall be subject to rules governing inofficious documents.
Express condonation shall comply with forms of donation.
1263. LOSS OF GENERIC THING
In an obligation to deliver a generic thing, loss of destruction of anything of 1271. IMPLIES RENUNCIATION OF DEBT
the same kind DOESN’T EXTINGUISH the obligation. Delivery of private document evidencing a credit, made voluntarily by
creditor to debtor, implies renunciation of action by creditor against debtor.
1264. PARTIAL LOSS
Courts shall determine whether under the circumstances, partial loss of the If creditor claimed it to be inofficious to nullify the waiver, debtor and his
obligation is so important as to extinguish the obligation. heirs may uphold it by proving that delivery of document was made in virtue
of payment of debt.
1265. PRESUMPTION OF FAULT OF DEBTOR
Whenever the thing is lost in the possession of the debtor, it shall be
presumed that the loss was due to his fault unless there is proof to the
contrary and without prejudice to 1165. 1272. PRESUMED DELIVERED VOLUNTARILY
When private document where debt appears is found in the possession of
Presumption doesn’t apply: earthquake, flood, storm or other natural debtor, it shall be presumed that creditor delivered it voluntarily unless
calamity. contrary is proved.

1266. LEGALLY/ PHYSICALLY IMPOSSIBLE 1273. EXTINGUISH ACCESSORY OBLIG

The debtor in obligations to do shall also be released when PRESTATION Renunciation of principal debt shall extinguish accessory obligations but
becomes legally or physically impossible without fault of obligor. waiver of accessory obligations shall leave the principal debt in force.

1267. SERVICE BECOMES SO DIFFICULT 1274. ACCESSORY PRESUMED REMITTED

When service has become so difficult as to be manifestly beyond the It’s presumed that the accessory obligation of pledge has been remitted when
contemplation of the parties, obligor may also be released in whole or in part. thing pledged is found in possession of debtor or 3 rd person who owns the
thing after its delivery to the creditor.
1268. DEBT FROM CRIMINAL OFFENSE
When debt of a thing certain and determinate proceeds from a criminal 1275. CONFUSION/ MERGER OF RIGHTS
offense, debtor shall NOT BE EXEMPTED from payment of its price whatever Obligation is extinguished from the time characters of creditor and debtor are
may be the cause for the loss, unless the person who should receive it refused merged in the same person.
without justification to accept it after the thing has been offered by debtor.
1276. MERGER
1269. CREDITOR HAS ALL RIGHTS OF ACTION Merger which takes place in the person of principal debtor or creditor
When obligation has been extinguished by loss of the thing, creditor shall have benefits the guarantors.
all the rights of action which debtor may have against 3 rd persons by reason of
the loss. CONFUSION
Confusion which takes place in the person of any of the guarantors doesn’t If one of the parties to a suit over an obligation has a claim for damages
extinguish obligation. against the other, the former may set it off by proving his right to said
damages and the amount thereof.
1277. JOINT OBLIGATION
Confusion doesn’t extinguish joint obligation except as regards the share 1284. BEFORE JUDICIALLY RESCINDED
corresponding to creditor or debtor in whom the two characters concur. When one or both debts are rescissible or voidable, they may be compensated
against each other before they are judicially rescinded or avoided.
1278. COMPENSATION (C & D of each other)
Compensation shall take place when 2 persons, in their own right, are 1285. ASSIGNMENT OF RIGHTS by CREDITOR
creditors and debtors of each other.
DEBTOR CONSENTED
1279. VALID COMPENSATION REQUIRES Debtor who has consented to assignment of rights made by creditor in favor
1. Each one of the obligors be bound principally and that he be at the same of 3rd person cannot set up against the assignee the compensation which
time a principal creditor of the other; would pertain to him against assignor, unless assignor was notified by debtor
at the time he gave his consent that he reserved his right to compensation.
2. Both debts consist in a sum of money or if the things due are consumable,
they be of the same kind and of the same quality if quality has been stated; DEBTOR DID NOT CONSENT
If creditor communicated the cession to him but debtor did not consent,
3. Two debts be due debtor may set up the compensation of debts previous to the cession but not
4. They be liquidated and demandable of subsequent ones.

5. No retention or controversy over either of them was commenced by 3 rd WITHOUT KNOWLEDGE OF DEBTOR
persons and communicated in due time to the debtor. If assignment is made without knowledge of debtor, he may set up the
compensation of all credits prior to the assignment and also later ones until
he had knowledge of the assignment.

1280. DEPENDS ON CREDITOR’S DEBT 1286. BY OPERATION OF LAW

Guarantor may set up compensation as regards what the creditor may owe Compensation takes place by operation of law even though debts may be
the principal debtor. payable at different places, but there shall be indemnity for expenses of
exchange or transportation to the place of payment.
1281. TOTAL COMPENSATION
Compensation may be total or partial. When 2 debts are of the same amount, 1287. COMPENSATION NOT PROPER
there is total compensation. When one of the debts arises from a depositum or from obligations of a
depositary or of a bailee in commodatum.
1282. DEBTS NOT YET DUE
Parties may agree upon the compensation of debts which are not yet due. Also, when a creditor has a claim for support by gratuitous title, without
prejudice to 301.
1283. CLAIM FOR DAMAGES
If one of the debts consist in civil liability arising from a penal offense. (1288)
1289. ORDER OF COMPENSATION Insolvency of new debtor who has been proposed by the original debtor and
If a person should have against him several debts which are susceptible of accepted by creditor, shall not revive the action of creditor against the original
compensation, rules on application of payment apply to order of debtor EXCEPT when insolvency was already existing and of public
compensation. knowledge or known to the debtor when he delegated his debt.

1290. ALL REQUISITES PRESENT 1296. ACCESSORY OBLIGATIONS SUBSISTS

Compensation takes effect by operation of law, & extinguishes both debts to When principal obligation is extinguished due to novation, accessory
the concurrent amount, even though the creditors and debtors are not aware obligations may subsist only insofar as they may benefit 3 rd persons who
of the compensation. didn’t give their consent.

1291. NOVATION 1297. ORIGINAL OBLIGATION SUBSISTS

Obligations may be modified by: If new obligation is void, original one shall subsist UNLESS parties intended
1. Changing their object or principal conditions the former relation should be extinguished in any event.
2. Substituting the person of the debtor
3. Subrogating a 3rd person in the rights of the creditor 1298. NOVATION = VOID if ORIGINAL = VOID
Novation is void if original obligation was void, EXCEPT when annulment may
1292. TO EXTINGUISH OBLIGATION be claimed only by the debtor or when ratification validates acts which are
For an obligation to be extinguished by another which substitutes the same, it voidable.
is imperative that it be so declared in UNEQUIVOCAL TERMS or that the old
and new obligations be on every point INCOMPATIBLE with each other. 1299. UNDER THE SAME CONDITION
If original obligation was subject to a suspensive or resolutory condition, new
1293. CREDITOR’S CONSENT REQUIRED obligation shall be under the same condition, unless otherwise stipulated.
Novation which consists in substituting a new debtor in the place of the
original one may be made even without the knowledge or against the will of 1300LEGAL,CONVENTIONAL,SUBROGATION
the original debtor BUT not without the consent of the creditor. Subrogation of a 3rd person in the rights of creditor is either legal or
conventional. The former (legal) is not presumed except when expressly
Payment by new debtor gives him rights mentioned in mentioned in this Code and latter (conventional) must be clearly established
in order that it may take effect
1236 – he can recover only insofar as payment has been beneficial to original
debtor 1301. CONSENT of ORIGINAL & 3rd PERSON
1237 – he cannot compel the creditor to subrogate him in his rights such as Conventional subrogation of a 3rd person requires consent of the original
those arising from mortgage, guaranty or penalty. parties and of 3rd person.

1294. ORIGINAL DEBTOR NOT LIABLE 1302. LEGAL SUBROGATION

If the substitution is without the knowledge or against the will of the debtor, Presumed that there is legal subrogation:
new debtor’s insolvency or non-fulfillment of obligation shall not give rise to 1. Creditor pays another creditor who is preferred even without the
any liability on original debtor’s part. knowledge of the debtor.

1295. INSOLVENCY EXISTED OR KNOWN 2. 3rd person, not interested in the obligation, pays with express or tacit
approval of debtor
3. Person interested in the fulfillment of the obligation pays even without the 1310. DECIDE WHAT IS EQUITABLE
knowledge of the debtor and without prejudice to the effects of confusion as Determination shall not be obligatory if it is evidently inequitable. In such
to debtor’s share. case, court shall decide what is equitable under the circumstances.

1303. CREDIT TRANSFERRED 1311. ONLY B/N PARTIES, ASSIGNS & HEIRS
Subrogation transfers to the person subrogated the credit with all the rights Contracts take effect only between parties, assigns and heirs except in case
appertaining thereto, either against the debtor or against 3 rd persons, be they where the rights and obligations arising from the contract are not
guarantors or possessors of mortgages, subject to stipulation in a transmissible by their nature, stipulation or law. The heir is not liable beyond
conventional obligation. the property he received from the decedent.

1304. Creditor PARTIALLY PAID PREFERRED FAVOR UPON 3RD PERSON

A creditor to whom partial payment was made may exercise his right for the If contract contains stipulation in favor of a 3 rd person, he may demand its
remainder and shall be preferred to the person subrogated in his place in fulfillment provided he communicated his acceptance to obligor before its
virtue of partial payment of the same credit. revocation. Mere incidental benefit or interest of a person is not sufficient.

CONTRACTS Contracting parties must have clearly and deliberately conferred a favor upon
1305. MEETING OF MINDS 3rd person.
Contract is a meeting of minds between 2 persons whereby one binds himself
with respect to the other, to give something or to render some service. 1312. CONTRACTCS WITH REAL RIGHTS
In contracts creating real rights, 3rd persons who come into possession of the
1306. NOT CONTRARY TO L, M, GC, PO, PP object of the contract are bound thereby, subject to Mortgage Law and Land
Contracting parties may establish such stipulations, clauses, terms, and Registration laws.
conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order or public policy. 1313. CREDITORS PROTECTED
Creditors are protected in cases of contracts intended to defraud them.
1307. INNOMINATE CONTRACTS
Shall be regulated by: 1314. LIABLE FOR DAMAGES
- Stipulations of the parties Any 3rd person who induces another to violate his contract shall be liable for
- Obligations and Contracts damages to the other contracting party.
- Rules governing the most analogous nominate contracts
- Customs of the place. 1315. PERFECTED BY MERE CONSENT
Contracts are perfected by mere consent and from that moment parties are
1308. MUTUALITY OF CONTRACT bound not only to the fulfillment of what has been expressly stipulated but
Contracts must bind both contracting parties; its validity or compliance also to all consequences which according to their nature may be in keeping
cannot be left to the will of one of them. with good faith, usage and law.

1309. 3rd PERSON’S DECISION 1316. REAL CONTRACTS

Determination of the performance may be left to a 3 rd person, whose decision Such as:
shall not be binding until made known to both contracting parties. -deposit
 -pledge 1323.DEATH,CIVIL I., INSANITY,INSOLVENCY
-commodatum Offer becomes ineffective upon death, civil interdiction, insanity or insolvency
are not perfected until the delivery of the object of the obligation. of either party before acceptance is conveyed.

1317. MUST BE AUTHORIZED 1324. WITHDRAWAL BEFORE ACCEPTANCE

No one may contract in the name of another without being authorized by the When offerer has allowed offeree a certain period to accept, offer may be
latter or unless he has by law a right to represent him. withdrawn anytime before acceptance by communicating such withdrawal,
EXCEPT when option is founded upon a consideration as something paid or
UNENFORCEABLE UNLESS RATIFIED promises.
A contract entered into the name of another by one who has no authority or
legal representation or has acted beyond his powers shall be unenforceable
unless ratified, expressly or impliedly by the person on whose behalf it has 1325. BUSINESS ADVERTISEMENTS
been executed and before it is revoked by the other contracting party. Business advertisements of things for sale are not definite offers but mere
invitations to make an offer unless it appears otherwise.
1318. ESSENTIAL REQUISITES
1. CONSENT of the contracting parties 1326. ADVERTISER NOT BOUND TO ACCEPT
2. OBJECT certain which is the subject matter of contract Advertisements for bidders are simply invitations to make proposals and
3. CAUSE of obligation which is established. advertiser is not bound to accept highest or lowest bidder unless contrary
appears.
1319. MEETING of OFFER & ACCEPTANCE
Consent is manifested by the meeting of the offer and the acceptance upon the 1327. CANNOT GIVE CONSENT:
thing and the cause which are to constitute the contract. 1. Unemancipated minors
2. Insane or demented persons and deaf-mutes who don’t know how to write
OFFER must be certain and ACCEPTANCE absolute. A qualified acceptance
constitutes a counter-offer. (original offerer must accept) 1328. LUCID INTERVAL
Contracts entered during lucid interval are valid. Contracts agreed to in a state
Acceptance made by letter or telegram doesn’t bind the offerer except from of drunkenness or during hypnotic spell are voidable.
time it came to his knowledge. Contract is presumed to have been entered
into in the place where the offer was made. 1329. Incapacity in 1327 is without prejudice to special disqualifications in
laws.
1320. Acceptance may be express or implied.
1330. VOIDABLE CONTRACT
1321. TIME, PLACE, MANNER Contract where consent is given thru mistake, violence, intimidation, undue
Person making the offer may fix the time, place and manner of acceptance, all influence or fraud is voidable.
of which must be complied with.
1331. MISTAKE
1322. OFFER THRU AN AGENT For mistake to invalidate consent, must refer to substance of the thing which
Offer made through and agent is accepted from the time acceptance is is the object of the contract or to conditions which have principally moved one
communicated to him. or both parties to enter into the contract.
IDENTITY/ QUALIFICATIONS When person takes improper advantage of his power over the will of another,
Mistake as to identity or qualifications of one of the parties will vitiate consent depriving the latter of a reasonable freedom of choice.
ONLY when such I or Q have been the principal cause of the contract.
Circumstances to consider: confidential, family, spiritual and other relation
Simple mistake of account shall give rise to its correction. between parties or the fact that person alleged to have been unduly
influenced was suffering from mental weakness, ignorant or in financial
1332. MUST FULLY EXPLAIN THE TERMS distress.
When one of the parties is unable to read or if contract is in a language not
understood by him and mistake or fraud is alleged, person enforcing the 1338. FRAUD
contract must show that terms have been fully explained to the person unable Through words or machinations of one of the contracting parties, the other is
to read or understand the language. induced to enter into a contract which, without them, he would not have
agreed to.
1333. DOUBT, CONTINGENCY, RISK KNOWN
No mistake if party alleging it knew the doubt, contingency or risk affecting 1339. DUTY TO REVEAL FACTS
the object of the contract. Failure to disclose facts when there is a duty to reveal them as when parties
are bound by confidential relations, constitutes fraud.
1334. MUTUAL ERROR
Mutual error as to legal effect of an agreement when real purpose of parties is 1340. OPPORTUNITY TO KNOW FACTS
frustrated may vitiate consent. Usual exaggerations in trade when the other party had the opportunity to
know the facts are not in themselves fraudulent.
1335. VIOLENCE
When in order to wrest consent, serious or irresistible force is employed. 1341. MERE OPINION = NO FRAUD
Mere expression of an opinion doesn’t signify fraud unless made by an expert
INTIMIDATION and the other party has relied on the expert’s special knowledge.
When one of the contracting parties is compelled by a reasonable and well- 1342. SUBSTANTIAL MISTAKE
grounded fear of an imminent and grave evil upon his person or property, or Misrepresentation by 3rd person doesn’t vitiate consent unless such
upon person or property of his spouse, descendants/ ascendants, to give his misrepresentation created substantial mistake and the same is mutual.
consent.
1343. ERROR ONLY
DEGREE OF INTIMIDATION Misrepresentation made in good faith is not fraudulent but may constitute
Age, sex, condition of the person shall be borne in mind. error.

A threat to enforce one’s claim through competent authority if claim is just or 1344. SERIOUS FRAUD = VOIDABLE
legal, doesn’t vitiate consent. For fraud to make a contract voidable, should be serious and not have been
employed by both contracting parties.
1336. ANNUL THE OBLIGATION
Violence or intimidation shall annul the obligation although it may have been INCIDENTAL FRAUD = obliges person employing it to pay damages.
employed by a 3rd person who didn’t take part in the contract.
1345. ABSOLUTE or RELATIVE SIMULATION
1337. UNDUE INFLUENCE Simulation of contract may be absolute or relative.
 - ABSOLUTE = parties do not intend to be bound at all. Contracts without a cause or with unlawful cause produce NO EFFECT
whatever. Cause is unlawful if contrary to law, morals, good customs, public
- RELATIVE = parties conceal their true agreement. order or public policy.

1346. ABSOLUTELY SIMULATED/ fictitious contract is void. 1353. FALSE CAUSE = VOID CONTRACT
Statement of false cause in contracts shall render them void if it should not be
Relative simulation, when it doesn’t prejudice a 3 rd person and not intended proved that they were founded upon another cause which is true and lawful.
for any purpose contrary to law, morals, good customs, public order or public
policy binds the parties to their real agreement. 1354. PRESUMED TO EXIST & LAWFUL
Although the cause is not stated in the contract, it is presumed that is exists
1347. MAY BE THE OBJECT OF CONTRACT and is lawful unless the debtor proves the contrary.
 All things which are not outside the commerce of men, including
future things. 1355. LESION/INADEQUACY = STILL VALID
 All rights which are not intransmissible. Lesion or inadequacy of cause doesn’t invalidate a contract UNLESS there has
 All services which are not contrary to law, morals, good customs, been fraud, mistake or undue influence.
public order or public policy.
1356. WHATEVER FORM ALLOWED
No contract may be entered into upon future inheritance except in cases Contracts shall be obligatory in whatever form they may have been entered
expressly authorized by law. into provided all the essential requisites for their validity are present.

1348. IMPOSSIBLE things or services cannot be the object of contracts. WHEN CERTAIN FORM IS REQUIRED
However, when a law requires a contract to be in some form for it to be valid
1349. OBJECT MUST BE DETERMINATE and enforceable, requirement is absolute and indispensable.
Object of every contract must be determinate as to its kind. The fact that the
quantity is not determinate shall not be an obstacle to the existence of the 1357. COMPEL TO OBSERVE FORM
contract provided it is possible to determine the same, without the need of a If law requires a document or other special form, contracting parties may
new contract between the parties. compel each other to observe that form once the contract has been perfected.
This right may be exercised simultaneously with the action upon the contract.
1350. CAUSE OF CONTRACT
Onerous contracts – prestation or promise of a thing or service by the other 1358. MUST APPEAR IN PUBLIC DOCUMENT
1. Acts and contracts which have for their object the creation, transmission,
Remuneratory ones – service or benefit which is remunerated modification or extinguishment of real rights over immovable property; sales
of real property or of an interest therein are governed by Statute of Frauds
Contracts of pure beneficence – mere liberality of the benefactor (1403, par 2 and 1405)

1351. MOTIVE DIFFERENT FROM CAUSE 2. Cession, repudiation or renunciation of hereditary rights or those of the
Particular motives of the parties in entering into a contract are different from conjugal partnership of gains.
the cause

1352. WITHOUT CAUSE/ UNLAWFUL CAUSE

3. Power to administer property or any other power which has for its object When one party is mistaken and other knew or believed that the instrument
an act appearing or which should appear in a public document or should did not state their real agreement, but concealed the fact from the former,
prejudice a 3rd person. instrument may be reformed.

4. Cession of actions or rights proceeding from an act appearing in a public 1364. FAULT ON THE PERSON DRAFTING
document. When through the ignorance, lack of skill, negligence or bad faith on the part
of the person drafting the instrument or of the clerk or typist, instrument
All other contracts where the amount involved exceeds P500.00 must appear doesn’t express true intention of the parties, courts may order the instrument
in writing, even a private one. But sales of goods, chattels or things in action to be reformed.
are governed by Statute of Frauds.
1365. MORTGAGE ONLY BUT STATED AS SALE
REFORMATION OF INSTRUMENTS If 2 parties agree upon the mortgage or pledge of real or personal property
but the instrument states that the property is sold absolutely or with a right to
1359. TRUE INTENTION NOT EXPRESSED repurchase, reformation of instrument is proper.
 Meeting of minds of parties in a contract
 True intention is not expressed in the instrument to embody the 1366. NO REFORMATION
agreement, 1. Simple donations inter vivos where no condition is imposed.
 By reason of mistake, fraud, inequitable conduct or accident 2. Wills
 One of the parties may ask for the reformation of the instrument so 3. Real agreement is void
that the true intention may be expressed.
1367. ACTION TO ENFORCE INSTRUMENT
NO MEETING OF MINDS When one of the parties brought an action to enforce the instrument, he
If mistake, fraud, inequitable conduct or accident prevented the meeting of cannot subsequently ask for its reformation.
the minds of the parties, proper remedy is not reformation of instrument but
annulment of contract. 1368. EITHER PARTY or INJURED PARTY
Reformation may be ordered at the instance of either party or his successors
1360. Principles of general law on reformation of instruments adopted. in interest if the mistake was mutual; otherwise upon petition of injured party
or his heirs and assigns.
1361. DIDN’T DISCLOSE REAL AGREEMENT
When mutual mistake of the parties causes the failure of the instrument to 1369. PROCEDURE be governed by RoC to be promulgated by SC.
disclose real agreement, instrument may be reformed.

1362. OTHER ACTED FRAUDULENTLY

If the other party was mistaken and the other acted fraudulently or
inequitably in such a way that the instrument does not show their true INTERPRETATION OF THE CONTRACTS
intention, the former (who was mistaken) may ask for the reformation of the
instrument. 1370. LITERAL MEANING SHALL CONTROL
If the terms of a contract are clear and leave no doubt upon intention of the
1363. OTHER KNEW THE MISTAKE contracting parties, literal meaning of its stipulation shall control.
INTENTION PREVAILS OVER WORDS
If the words appear to be contrary to the evident intention of the parties, INTENTION CANNOT BE KNOWN
intention shall prevail over the words. If doubts are upon the principal object of contract where it cannot be known
what the intention or will of the parties are, contract shall be null and void.
1371. ACTS CONSIDERED
To judge the intention of the contracting parties, their contemporaneous and 1379. Principles of interpretation in Rule 123 of RoC shall be observed in
subsequent acts shall be principally considered. construction of contracts.

1372. THINGS DISTINCT FROM INTENTION 1380. RESCISSIBLE CONTRACTS

However general the terms of a contract may be, they shall not be understood Contracts validly agreed upon may be rescinded in cases established by law.
to comprehend things that are distinct and cases that are different from those
upon which the parties intended to agree. 1381. EX OF RESCISSIBLE CONTRACTS
1. Those which are entered by guardians whenever the wards whom they
1373. SEVERAL MEANINGS represent suffer lesion by more than ¼ of the value of the object of the
If some stipulation of any contract has several meanings, it shall be contract.
understood as to which it is most adequate to render it effectual.
2. Those agreed upon in representation of absentees, if the absentee suffer
1374. INTERPRETED TOGETHER lesion by more than ¼ of the value of the object.
Various stipulations of a contract shall be interpreted together, attributing to
the doubtful ones as which may result from all of them taken jointly. 3. Those undertaken in fraud of creditors when the creditors cannot collect in
any other manner the claims due them.
1375. MOST KEEPING w/ NATURE & OBJECT
Words which may have different significations shall be understood in that 4. Things under litigation if they have been entered into by the defendant
which is most in keeping with the nature and object of the contract. without the knowledge or approval of the litigants or of competent judicial
authority.
1376. AMBIGUITIES OF A CONTRACT
Usage or custom of the place shall be borne in mind in interpreting 5. All other contracts specially declared by law to be subject to rescission.
ambiguities of a contract and shall fill the omission of stipulations which are
ordinarily established. 1382. INSOLVENT PAYS DEBT NOT YET DUE
Payments made in a state of insolvency for obligations to whose fulfillment
1377. OBSCURE WORDS the debtor could not be compelled at the time they were effected are
Interpretation of obscure words/ stipulations in a contract shall not favor the rescissible.
party who caused the obscurity.
1383. RESCISSION IS SUBSIDIARY
Action for rescission is subsidiary and cannot be instituted except when the
1378. LEAST TRANSMISSION OF RIGHTS party suffering damage has no other legal means to obtain reparation for the
When it is absolutely impossible to settle doubts and doubts refer to same.
incidental circumstances of a gratuitous contract, least transmission of rights
and interests shall prevail. If onerous contract, doubt shall be settled in favor 1384. ONLY TO EXTENT NECESSARY
of the greatest reciprocity of interests. Rescission shall be only to the extent necessary to cover the damages caused.
 For persons under guardianship and for absentees: 4 years shall not begin
1385.RETURN FRUITS & PRICE w INTERESTS until termination of former’s incapacity or until the domicile of the absentee is
Rescission creates the obligation to return things which were the object of the known.
contract, together with their fruits and price with interests; consequently, can
be carried out only when he who demands rescission can return whatever he VOIDABLE/ ANNULABLE CONTRACTS
may be obliged to restore.
1390. VOIDABLE EVEN IF NO DAMAGE
No rescission allowed when the object of the contract is legally in the 1. One of the parties is incapable of giving consent.
possession of 3rd person who didn’t act in bad faith. Indemnity for damages
may be demanded from the person causing the loss. 2. Consent is vitiated by mistake, violence, intimidation, undue influence or
fraud (MVIUF). These contracts are binding unless annulled by proper action
1386. No rescission allowed in # 1 (lesion of wards) and 2 (lesion of in court. Susceptible of ratification.
absentees) with respect to contracts approved by the courts.
1391. PRESCRIPTION: 4 YEARS
1387. PRESUMED FRAUDULENT Action for annulment shall be brought within 4 years.
All contracts where debtor alienates property by gratuitous title are
presumed to be in fraud of creditors when the donor didn’t reserve sufficient DEFECT OF CONSENT CEASES
property to pay all debts contracted before donation. This period shall begin in cases of intimidation, violence or undue influence
from the time the defect of the consent ceases.
Alienations by onerous title are also presumed fraudulent when made by
persons against whom judgment has been rendered or some writ of TIME OF DISCOVERY
attachment has been issued. Decision or attachment need not refer to the In case of mistake for fraud, from time of discovery of the same.
property alienated and need not have been obtained by the party seeking the
rescission. TIME GUARDIANSHIP CEASES
For contracts entered into minors or other incapacitated persons, from time
Defrauding creditors may be proved in any other manner recognized by law the guardianship ceases.
of evidence.
1392. RATIFICATION extinguished action to annul a voidable contract.
1388. INDEMNITY FOR DAMAGES
Whoever acquires in bad faith the things alienated in fraud of creditors shall 1393. RATIFICATION: EXPRESS or TACIT
indemnify the creditors for damages suffered by them due to of alienation if it Ratification may be effected expressly or tacitly. There’s tacit ratification if the
should be impossible for him to return them. person who has a right to invoke it should execute an act which necessarily
implies intention to waive his right even if he knew that the cause that
1st ACQUIRER = LIABLE 1ST renders contract voidable has ceased.
If there are 2 or more alienations, 1 st acquirer shall be liable 1 st and so on
successively. 1394. EFFECTED BY GUARDIAN
Ratification may be effected by the guardian of the incapacitated person.
1389. PRESCRIPTION: 4 YEARS
Action to claim rescission must be commenced within 4 yrs. 1395. NO NEED TO CONFORM
Ratification doesn’t require the conformity of the contracting party who has If right of action is based on incapacity of any one of the contracting parties,
no right to bring action for annulment. loss of the thing shall not be an obstacle to the success of action unless loss
took place thru fraud or fault of plaintiff.
1396. CLEANSES ALL DEFECTS
Ratification cleanses contract from all its defects from the moment it was 1402. RECIPROCITY IN RETURNING
constituted. As long as one of the parties doesn’t restore what he is bound to return, the
other cannot be compelled to comply with what is incumbent upon him.
1397. OBLIGED PRINCIPALL|SUBSIDIARILY
Action for annulment of contract may be instituted by all who are obliged UNENFORCEABLE CONTRACTS
principally or subsidiarily.
1403. Unenforceable contracts unless ratified:
UNCLEAN HANDS CAN’T COME TO COURT 1. Those entered into in the name of another person by one who has NO
Persons who are capable cannot allege incapacity of those with whom they AUTHORITY or legal representation or who has acted beyond his powers.
contracted nor can those who exerted intimidation, violence, undue influence
or employed fraud or caused mistake base their action upon these flaws of the 2. Those that don’t comply with STATUE of FRAUDS. In the ff. cases an
contract. agreement made shall be unenforceable unless the agreement or some note or
memorandum shall be in writing and subscribed by party charged or by his
1398. RESTORE OBJECT, FRUITS & PRICE w I agent.
An obligation having been annulled, contracting parties shall restore to each Evidence of agreement cannot be received without writing or a secondary
other things which have been the subject matter of contract with their fruits evidence of its contents:
and price with its interests, except in cases provided by law.
a. Agreement that by its term is not to be performed within a year
In obligations to render service, its value shall be the basis for damages. from making

1399. INCAPACITATED not obliged to RETURN b. Special promise to answer for debt, default or miscarriage of
When defect of the contract is the incapacity of one of the parties, the another
incapacitated person is not obliged to make any restitution except insofar as
he has been benefited by the thing or price received by him. c. Agreement made in consideration of marriage, other than a mutual
promise to marry
1400. CAN’T RETURN DUE TO ONE’S OWN FAULT
When the person obliged by decree of annulment to return the thing cannot d. Agreement for sale of goods, chattels or things in action at a price of
do so because it has been lost thru his fault, he shall return the fruits received not less than 500.00 UNLESS buyer accept or receive part of such goods or
and value of the thing at the time of the loss with interest from same date. chattels or evidence or pay at the time some part of the purchase money.

1401. OBJECT LOST THRU FRAUD/FAULT SUFFICIENT MEMORANDUM

Action for annulment shall be extinguished when the object of contract is lost Sale is made by auction and entry of amount and kind of property sold,
thru fraud or fault of the person who has a right to institute annulment. terms of sale, price, names of purchasers and buyers is made by auctioneer in
his sales book at time of sale.
 e. Agreement for leasing for a longer period than 1 yr. or sale of real 5. Impossible service.
property or of an interest therein 6.Intention of the parties relative to the principal object of contract cannot be
ascertained.
f. Representation as to credit of a 3rd person 7. Expressly prohibited or declared void by law.

3. Both parties are incapable of giving consent to contract. These contracts cannot be ratified. Defense of illegality cannot be waived.

1404. UNAUTHORIZED CONTRACTS governed by 1317 and principles of 1410. NO PRESCRIPTION

agency (Title X). Action or defense for declaration of inexistence of contract doesn’t prescribe.

1405. DEEMED RATIFIED 1411. ACT IS CRIMINAL OFFENSE

Contracts infringing Statute of Frauds (# 2 of 1403) are ratified by failure to When nullity is due to illegality of cause or object of contract and the act
object to presentation of oral evidence to prove the same or by acceptance of constitutes a criminal offense, both parties being in pari delicto, they shall
benefits. have NO ACTION AGAINST EACH OTHER and both shall be prosecuted.

1406. COMPEL each other to OBSERVE FORM Penal Code relative to disposal of effects of instruments of crime shall be
When contract is unenforceable under the Statute of Frauds and public applicable to the things or price of contract.
document is necessary for the registration in the Registry of Deeds, parties
may compel each other to observe that form (1357). ONLY ONE PARTY IS GUILTY
Applicable when only one of the parties is guilty but the innocent one may
1407. BOTH ARE INCAPACITATED claim what he has given and not be bound to comply with his promise.
Where both parties are unable to give consent, express of implied ratification
by parent, or guardian of one of the contracting parties shall give the contract 1412. UNLAWFUL ACT BUT NOT CRIMINAL
the effect as if only one of them were incapacitated (becomes voidable). If the unlawful or forbidden cause of the act doesn’t constitute a criminal
offense, ff. rules apply:
If ratification is made by parents or guardians of both parties, contract shall
be validated from inception. 1. Fault on both contracting parties: neither may recover what he has given or
demand performance of other’s undertaking.
1408. Unenforceable contracts CANNOT BE ASSAILED BY 3RD PERSONS.
2. Only one contracting party is at fault: he cannot recover what he has given
VOID/ INEXISTENT CONTRACTS or ask for fulfillment of what has been promised him.

1409. Contracts that are inexistent and void from the beginning: The other who is not at fault may demand the return of what he has given
1. Cause, object or purpose is contrary to law, morals, good customs, public without any obligation to comply with his promise.
order or public policy
1413. EXCESS INTEREST MAY BE RECOVERED
2. Absolutely simulated or fictitious Interest paid in excess of the interest allowed by usury laws may be recovered
3. Cause or object didn’t exist at the time of transaction (future things) by debtor, with interest thereon from date of payment.

4. Object is outside the commerce of men. 1414. REPUDIATE DUE TO ILLEGAL PURPOSE
When money is paid or property delivered for an illegal purpose, contract 1422. PREVIOUS ILLEGAL CONTRACT
may be repudiated by one of the parties before purpose is accomplished or Contract which is the direct result of the previous illegal contract is also void
before damage is caused to 3rd person. and inexistent.

Courts may, if public interest will be served, allow the party repudiating the NATURAL OBLIGATIONS
contract to recover the money or property.
1423. CIVIL & NATURAL OBLIGATIONS
1415. ILLEGAL CONTRACT Obligations are civil and natural.
When one of the parties to an illegal contract is incapable of giving consent, CIVIL OBLIGATIONS: give a right of action to compel their performance.
courts may allow recovery of money or property delivered by incapacitated NATURAL OBLIGATIONS: do not grant a right of action to enforce their
person if interest of justice so demands. performance for not being based on positive law but on equity and natural
law.
1416. NOT ILLEGAL PER SE
When agreement is not illegal per se but merely prohibited and prohibition by But after voluntary fulfillment by obligor, they authorize the retention of what
law is to protect the plaintiff, he may recover what he has paid or delivered if has been delivered or rendered.
public policy is enhanced. 1424. VOLUNTARILY PERFORMS
When right to sue upon a civil obligation has lapsed by extinctive prescription,
1417. RECOVER AMOUNT IN EXCESS obligor who voluntarily performs contract cannot recover what he has
When price of any article or commodity is determined by statute or by delivered or the value of the service he has rendered.
authority of law, any person paying any amount in excess of the maximum
price allowed may recover such excess. 1425. VOLUNTARILY REIMBURSES
When without the knowledge or against the will of debtor, 3 rd person pays
1418. HOURS OF LABOR debt which the debtor is not legally bound to pay because action has
When the law fixes or authorizes fixing of max # of hours of labor, and prescribed BUT debtor voluntarily reimburses 3rd person, debtor cannot
contract is entered where a laborer works longer than the maximum fixed, he recover what he has paid.
may demand additional compensation for service rendered beyond the time
limit. 1426. VOLUNTARILY RETURNS THING/PRICE
When a minor between 18-21 who has entered into a contract without
1419. WAGE OF LABORER consent of parent or guardian voluntarily returns the whole thing or price
When law sets or authorizes the setting of minimum wage for laborers and received after annulment of contract, even if he has not been benefited, there
contract is agreed upon where laborer accepts a lower wage, he shall be is no right to demand the thing or price returned.
entitled to recover the deficiency.
1427. VOLUNTARILY PAYS A SUM OF MONEY
1420. DIVISIBLE CONTRACT A minor (18-21) who entered into a contract without the consent of parent or
For divisible contract, if the illegal terms can be separated from the legal ones, guardian, voluntarily pays a sum of money or delivers a fungible thing to fulfill
legal ones may be enforced obligation, no right to recover the same from obligee who has spent or
consumed it in good faith.
1421. DEFENSE OF ILLEGALITY of CONTRACTS
Not available to 3rd persons whose interests are not directly affected. 1428. VONLUNTARILY PERFORMS OBLIG
After an action to enforce civil obligation has failed, defendant voluntarily 1437. MISLED AS TO OWNERSHIP
performs the obligation – he cannot demand the return of what he has When in a contract between 3rd persons concerning immovable property, one
delivered or payment of value of service he has rendered. of them is misled by a person regarding ownership or real rights over real
estate, one who misleads is precluded from asserting his legal title or interest,
1429. HEIR VOLUNTARILY PAYS DEBT provided ALL these requisites are present:
When a testate or intestate heir voluntarily pays debt of the decedent
exceeding the value of the property which he received by will or by law of 1. Fraudulent representation or wrongful concealment of facts known to the
intestacy from estate of deceased, payment is valid and cannot be rescinded party estopped.
by payer.
2. Party precluded must intend that the other should act upon facts as
1430. HEIR PAYS LEGACY misrepresented.
When a will is void because it wasn’t executed in accordance with formalities
required by law BUT one of the intestate heirs, after settlement of debts of 3. Party misled must have been unaware of the true facts
deceased, pays a legacy to comply with a clause in the defective will, payment
is effective and irrevocable. 4. Party defrauded must have acted in accordance with the misrepresentation.

ESTOPPEL 1438.ESTOPPED - ACCEPTANCE of BENEFITS

1431. RENDERED CONCLUSIVE One who has allowed another to assume apparent ownership of personal
Through estoppel an admission or representation is rendered conclusive property to make any transfer of it, cannot set up his own title to defeat the
upon the person making it and cannot be denied or disproved as against pledge of the property made by the other to a pledgee who received the same
person relying thereon. in good faith and for value IF he received the sum for which a pledge has been
constituted.
1432. PRINCIPLES OF ESTOPPEL adopted insofar as they aren’t in conflict
with this Code, Code of Commerce, RoC and special laws. 1439. ONLY B/N PARTIES OR SUCCESSORS
Estoppel is effective only as between parties or their successors in interest.
1433. Estoppel may be IN PAIS or BY DEED.
TRUSTS
1434. TITLE PASSES TO BUYER/GRANTEE 1440. TRUSTOR, TRUSTEE, BENEFICIARY
When a person who is not the owner of a thing sells or alienates and delivers Trustor: a person who establishes a trust
it and later the seller or grantor acquires title thereto, such title passes by
operation of law to the buyer or grantee. Trustee: one in whom confidence is reposed as regards property for the
benefit of another person
1435. BARRED FROM SETTING UP OWN TITLE
If a person representing another sells or alienates a thing, the representative Beneficiary: the person for whose benefit the trust has been created
cannot subsequently set up his own title as against the buyer or grantee.
1441. EXPRESS or IMPLIED TRUSTS
1436. CLAIMING TITLE TO THING LEASED Trusts are either express of implied.
A lessee or bailee is estopped from asserting title to thing leased or received EXPRESS trusts are created by intention of the trustor or parties.
as against the lessor or bailor. IMPLIED trusts come into being by operation of law.
1442. PRINCIPLES OF GENERAL LAW OF TRUSTS as not in conflict with this
Code, Code of Commerce, RoC and special laws are adopted. 1450.TO SECURE PAYMENT OF DEBT
If price of sale of property is loaned or paid by one person (trustor) for the
EXPRESS TRUSTS benefit of another and conveyance is made to the lender or payor to secure
1443. CAN’T BE PROVED BY PAROL EVIDENCE payment of debt, trust arises by operation of law in favor of the person to
No express trusts concerning immovable property or any interest may be whom money is loaned or for whom it is paid (beneficiary). Beneficiary may
proved by parol evidence. redeem the property and compel conveyance to him.

1444. CLEAR INTENTION SUFFICIENT 1451. BENEFIT OF TRUE OWNER

No particular words are required for creation of an express trust, it is When land passes by succession to any person and he causes legal title to be
sufficient that a trust is clearly intended. put in the name of another, trust is established by implication of law for the
benefit of true owner.
1445. TRUSTEE DECLINES DESIGNATION
No trust shall fail because trustee declines designation unless contrary should 1452. LEGAL TITLE FOR BENEFIT OF ALL
appear in the instrument constituting the trust. If 2 or more persons agree to purchase property and by common consent the
legal title is taken in the name of one of them for the benefit of all, trust is
1446. BENEFICIARY MUST ACCEPT TRUST created by force of law in favor of the others in proportion to interest of each.
Acceptance by the beneficiary is necessary. Acceptance shall be presumed if
trust imposes no onerous condition upon the beneficiary and no proof to the 1453. DECLARED INTENTION TO HOLD IT FOR
contrary. When property is conveyed to a person in reliance upon his declared
intention to hold it for or transfer it to another or the grantor, there’s implied
trust in favor of the person whose benefit is contemplated.
IMPLIED TRUSTS
1447. Enumeration doesn’t exclude others established by general law of trust 1454. CONVEYANCE to SECURE PEFORMANCE
subject to 1442 (Code of Commerce, RoC, special laws) If an absolute conveyance of property is made to secure performance of
obligation of grantor toward grantee, trust is established by virtue of law.
1448. GRANTED TO ONE, PAID BY ANOTHER
There’s implied trust when property is sold and legal estate is granted to one If fulfillment of obligation is offered by grantor when it becomes due, grantor
party (trustee) but price is paid by another (beneficiary) to have the beneficial may demand reconveyance of property to him.
interest of the property.
1455. TRUST in favor of whom FUNDS BELONG
NO IMPLIED TRUST When any trustee, guardian or other person holding fiduciary relationship
However, if person to whom title is conveyed is a child, legitimate or uses trust funds for purchase of property and causes conveyance to be made
illegitimate, of the one paying the price of the sale, no trust is implied by law, to him or to 3rd person, trust is established by operation of law in favor of
it being disputably presumed that there is a gift in favor of the child. person to whom the funds belong.

1449. DONEE HAS NO BENEFICIAL INTEREST 1456. MISTAKE OR FRAUD

There is implied trust when donation is made to a person but it appears that If property is acquired thru mistake or fraud, person obtaining it is by force of
although the legal estate is transmitted to the done, he has no beneficial law a trustee of an implied trust for the benefit of the person from whom
interest or only a part thereof. property comes.
1457. ORAL EVIDENCE ALLOWED
Implied trust may be proved by oral evidence.