Home > Main Index >

This web page contains the Full Text of

Republic Act No. 386

June 18, 1949

The Civil Code of the Philippines

AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES

PRELIMINARY TITLE

CHAPTER I
EFFECT AND APPLICATION OF LAWS

Article 1. This Act shall be known as the "Civil Code of the Philippines." (n)

Art. 2. Laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise provided.
This Code shall take effect one year after such publication. (1a)

Art. 3. Ignorance of the law excuses no one from compliance therewith. (2)

Art. 4. Laws shall have no retroactive effect, unless the contrary is provided.
(3)

Art. 5. Acts executed against the provisions of mandatory or prohibitory

laws shall be void, except when the law itself authorizes their validity. (4a)

Art. 6. Rights may be waived, unless the waiver is contrary to law, public
order, public policy, morals, or good customs, or prejudicial to a third
person with a right recognized by law. (4a)

Art. 7. Laws are repealed only by subsequent ones, and their violation or
non-observance shall not be excused by disuse, or custom or practice to the
contrary.

When the courts declared a law to be inconsistent with the Constitution, the
former shall be void and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only
when they are not contrary to the laws or the Constitution. (5a)

Art. 8. Judicial decisions applying or interpreting the laws or the

Constitution shall form a part of the legal system of the Philippines. (n)

Art. 9. No judge or court shall decline to render judgment by reason of the

silence, obscurity or insufficiency of the laws. (6)

Art. 10. In case of doubt in the interpretation or application of laws, it is

presumed that the lawmaking body intended right and justice to prevail. (n)

Art. 11. Customs which are contrary to law, public order or public policy
shall not be countenanced. (n)

Art. 12. A custom must be proved as a fact, according to the rules of

evidence. (n)

Art. 13. When the laws speak of years, months, days or nights, it shall be
understood that years are of three hundred sixty-five days each; months, of
thirty days; days, of twenty-four hours; and nights from sunset to sunrise.

If months are designated by their name, they shall be computed by the

number of days which they respectively have.

In computing a period, the first day shall be excluded, and the last day
included. (7a)

Art. 14. Penal laws and those of public security and safety shall be
obligatory upon all who live or sojourn in the Philippine territory, subject
to the principles of public international law and to treaty stipulations. (8a)

Art. 15. Laws relating to family rights and duties, or to the status, condition
and legal capacity of persons are binding upon citizens of the Philippines,
even though living abroad. (9a)

Art. 16. Real property as well as personal property is subject to the law of
the country where it is stipulated.

However, intestate and testamentary successions, both with respect to the

order of succession and to the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be regulated by the
national law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of the country
wherein said property may be found. (10a)
Art. 17. The forms and solemnities of contracts, wills, and other public
instruments shall be governed by the laws of the country in which they are
executed.

When the acts referred to are executed before the diplomatic or consular
officials of the Republic of the Philippines in a foreign country, the
solemnities established by Philippine laws shall be observed in their
execution.

Prohibitive laws concerning persons, their acts or property, and those

which have, for their object, public order, public policy and good customs
shall not be rendered ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign country. (11a)

Art. 18. In matters which are governed by the Code of Commerce and
special laws, their deficiency shall be supplied by the provisions of this
Code. (16a)

CHAPTER 2
HUMAN RELATIONS (n)

Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.

Art. 20. Every person who, contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same.

Art. 21. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.

Art. 22. Every person who through an act of performance by another, or any
other means, acquires or comes into possession of something at the
expense of the latter without just or legal ground, shall return the same to
him.

Art. 23. Even when an act or event causing damage to another's property
was not due to the fault or negligence of the defendant, the latter shall be
liable for indemnity if through the act or event he was benefited.

Art. 24. In all contractual, property or other relations, when one of the
parties is at a disadvantage on account of his moral dependence, ignorance,
indigence, mental weakness, tender age or other handicap, the courts must
be vigilant for his protection.
Art. 25. Thoughtless extravagance in expenses for pleasure or display
during a period of acute public want or emergency may be stopped by order
of the courts at the instance of any government or private charitable
institution.

Art. 26. Every person shall respect the dignity, personality, privacy and
peace of mind of his neighbors and other persons. The following and
similar acts, though they may not constitute a criminal offense, shall
produce a cause of action for damages, prevention and other relief:

(1) Prying into the privacy of another's residence:

(2) Meddling with or disturbing the private life or family relations of

another;

(3) Intriguing to cause another to be alienated from his friends;

(4) Vexing or humiliating another on account of his religious beliefs,

lowly station in life, place of birth, physical defect, or other personal
condition.

Art. 27. Any person suffering material or moral loss because a public
servant or employee refuses or neglects, without just cause, to perform his
official duty may file an action for damages and other relief against he
latter, without prejudice to any disciplinary administrative action that may
be taken.

Art. 28. Unfair competition in agricultural, commercial or industrial

enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or highhanded method shall
give rise to a right of action by the person who thereby suffers damage.

Art. 29. When the accused in a criminal prosecution is acquitted on the

ground that his guilt has not been proved beyond reasonable doubt, a civil
action for damages for the same act or omission may be instituted. Such
action requires only a preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a bond to answer for
damages in case the complaint should be found to be malicious.

If in a criminal case the judgment of acquittal is based upon reasonable

doubt, the court shall so declare. In the absence of any declaration to that
effect, it may be inferred from the text of the decision whether or not the
acquittal is due to that ground.

Art. 30. When a separate civil action is brought to demand civil liability
arising from a criminal offense, and no criminal proceedings are instituted
during the pendency of the civil case, a preponderance of evidence shall
likewise be sufficient to prove the act complained of.

Art. 31. When the civil action is based on an obligation not arising from the
act or omission complained of as a felony, such civil action may proceed
independently of the criminal proceedings and regardless of the result of
the latter.

Art. 32. Any public officer or employee, or any private individual, who
directly or indirectly obstructs, defeats, violates or in any manner impedes
or impairs any of the following rights and liberties of another person shall
be liable to the latter for damages:

(1) Freedom of religion;

(2) Freedom of speech;

(3) Freedom to write for the press or to maintain a periodical

publication;

(4) Freedom from arbitrary or illegal detention;

(5) Freedom of suffrage;

(6) The right against deprivation of property without due process of

law;

(7) The right to a just compensation when private property is taken

for public use;

(8) The right to the equal protection of the laws;

(9) The right to be secure in one's person, house, papers, and effects
against unreasonable searches and seizures;

(10) The liberty of abode and of changing the same;

(11) The privacy of communication and correspondence;

(12) The right to become a member of associations or societies for

purposes not contrary to law;

(13) The right to take part in a peaceable assembly to petition the

government for redress of grievances;

(14) The right to be free from involuntary servitude in any form;

 (15) The right of the accused against excessive bail;

(16) The right of the accused to be heard by himself and counsel, to be

informed of the nature and cause of the accusation against him, to
have a speedy and public trial, to meet the witnesses face to face, and
to have compulsory process to secure the attendance of witness in his
behalf;

(17) Freedom from being compelled to be a witness against one's self,

or from being forced to confess guilt, or from being induced by a
promise of immunity or reward to make such confession, except
when the person confessing becomes a State witness;

(18) Freedom from excessive fines, or cruel and unusual punishment,

unless the same is imposed or inflicted in accordance with a statute
which has not been judicially declared unconstitutional; and

(19) Freedom of access to the courts.

In any of the cases referred to in this article, whether or not the defendant's
act or omission constitutes a criminal offense, the aggrieved party has a
right to commence an entirely separate and distinct civil action for
damages, and for other relief. Such civil action shall proceed independently
of any criminal prosecution (if the latter be instituted), and mat be proved
by a preponderance of evidence.

The indemnity shall include moral damages. Exemplary damages may also
be adjudicated.

The responsibility herein set forth is not demandable from a judge unless
his act or omission constitutes a violation of the Penal Code or other penal
statute.

Art. 33. In cases of defamation, fraud, and physical injuries a civil action for
damages, entirely separate and distinct from the criminal action, may be
brought by the injured party. Such civil action shall proceed independently
of the criminal prosecution, and shall require only a preponderance of
evidence.

Art. 34. When a member of a city or municipal police force refuses or fails
to render aid or protection to any person in case of danger to life or
property, such peace officer shall be primarily liable for damages, and the
city or municipality shall be subsidiarily responsible therefor. The civil
action herein recognized shall be independent of any criminal proceedings,
and a preponderance of evidence shall suffice to support such action.
Art. 35. When a person, claiming to be injured by a criminal offense,
charges another with the same, for which no independent civil action is
granted in this Code or any special law, but the justice of the peace finds no
reasonable grounds to believe that a crime has been committed, or the
prosecuting attorney refuses or fails to institute criminal proceedings, the
complaint may bring a civil action for damages against the alleged
offender. Such civil action may be supported by a preponderance of
evidence. Upon the defendant's motion, the court may require the plaintiff
to file a bond to indemnify the defendant in case the complaint should be
found to be malicious.

If during the pendency of the civil action, an information should be

presented by the prosecuting attorney, the civil action shall be suspended
until the termination of the criminal proceedings.

Art. 36. Pre-judicial questions which must be decided before any criminal
prosecution may be instituted or may proceed, shall be governed by rules of
court which the Supreme Court shall promulgate and which shall not be in
conflict with the provisions of this Code.

BOOK I
PERSONS

Title I. - CIVIL PERSONALITY

CHAPTER 1
GENERAL PROVISIONS

Art. 37. Juridical capacity, which is the fitness to be the subject of legal
relations, is inherent in every natural person and is lost only through death.
Capacity to act, which is the power to do acts with legal effect, is acquired
and may be lost. (n)

Art. 38. Minority, insanity or imbecility, the state of being a deaf-mute,

prodigality and civil interdiction are mere restrictions on capacity to act,
and do not exempt the incapacitated person from certain obligations, as
when the latter arise from his acts or from property relations, such as
easements. (32a)

Art. 39. The following circumstances, among others, modify or limit

capacity to act: age, insanity, imbecility, the state of being a deaf-mute,
penalty, prodigality, family relations, alienage, absence, insolvency and
trusteeship. The consequences of these circumstances are governed in this
Code, other codes, the Rules of Court, and in special laws. Capacity to act is
not limited on account of religious belief or political opinion.
A married woman, twenty-one years of age or over, is qualified for all acts
of civil life, except in cases specified by law. (n)

CHAPTER 2
NATURAL PERSONS

Art. 40. Birth determines personality; but the conceived child shall be
considered born for all purposes that are favorable to it, provided it be born
later with the conditions specified in the following article. (29a)

Art. 41. For civil purposes, the fetus is considered born if it is alive at the
time it is completely delivered from the mother's womb. However, if the
fetus had an intra-uterine life of less than seven months, it is not deemed
born if it dies within twenty-four hours after its complete delivery from the
maternal womb. (30a)

Art. 42. Civil personality is extinguished by death.

The effect of death upon the rights and obligations of the deceased is
determined by law, by contract and by will. (32a)

Art. 43. If there is a doubt, as between two or more persons who are called
to succeed each other, as to which of them died first, whoever alleges the
death of one prior to the other, shall prove the same; in the absence of
proof, it is presumed that they died at the same time and there shall be no
transmission of rights from one to the other. (33)

CHAPTER 3
JURIDICAL PERSONS

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or

purpose, created by law; their personality begins as soon as they have
been constituted according to law;

(3) Corporations, partnerships and associations for private interest

or purpose to which the law grants a juridical personality, separate
and distinct from that of each shareholder, partner or member. (35a)

Art. 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding article
are governed by the laws creating or recognizing them.
Private corporations are regulated by laws of general application on the
subject.

Partnerships and associations for private interest or purpose are governed

by the provisions of this Code concerning partnerships. (36 and 37a)

Art. 46. Juridical persons may acquire and possess property of all kinds, as
well as incur obligations and bring civil or criminal actions, in conformity
with the laws and regulations of their organization. (38a)

Art. 47. Upon the dissolution of corporations, institutions and other entities
for public interest or purpose mentioned in No. 2 of Article 44, their
property and other assets shall be disposed of in pursuance of law or the
charter creating them. If nothing has been specified on this point, the
property and other assets shall be applied to similar purposes for the
benefit of the region, province, city or municipality which during the
existence of the institution derived the principal benefits from the same.
(39a)

Title II. - CITIZENSHIP AND DOMICILE

Art. 48. The following are citizens of the Philippines:

(1) Those who were citizens of the Philippines at the time of the
adoption of the Constitution of the Philippines;

(2) Those born in the Philippines of foreign parents who, before the
adoption of said Constitution, had been elected to public office in the
Philippines;

(3) Those whose fathers are citizens of the Philippines;

(4) Those whose mothers are citizens of the Philippines and, upon
reaching the age of majority, elect Philippine citizenship;

(5) Those who are naturalized in accordance with law. (n)

Art. 49. Naturalization and the loss and reacquisition of citizenship of the
Philippines are governed by special laws. (n)

Art. 50. For the exercise of civil rights and the fulfillment of civil
obligations, the domicile of natural persons is the place of their habitual
residence. (40a)

Art. 51. When the law creating or recognizing them, or any other provision
does not fix the domicile of juridical persons, the same shall be understood
to be the place where their legal representation is established or where they
exercise their principal functions. (41a)

Title III. - MARRIAGE

CHAPTER 1
REQUISITES OF MARRIAGE

Art. 52. Marriage is not a mere contract but an inviolable social institution.
Its nature, consequences and incidents are governed by law and not subject
to stipulation, except that the marriage settlements may to a certain extent
fix the property relations during the marriage. (n)

Art. 53. No marriage shall be solemnized unless all these requisites are
complied with:

(1) Legal capacity of the contracting parties;

(2) Their consent, freely given;

(3) Authority of the person performing the marriage; and

(4) A marriage license, except in a marriage of exceptional character

(Sec. 1a, Art. 3613).

Art. 54. Any male of the age of sixteen years or upwards, and any female of
the age of fourteen years or upwards, not under any of the impediments
mentioned in Articles 80 to 84, may contract marriage. (2)

Art. 55. No particular form for the ceremony of marriage is required, but
the parties with legal capacity to contract marriage must declare, in the
presence of the person solemnizing the marriage and of two witnesses of
legal age, that they take each other as husband and wife. This declaration
shall be set forth in an instrument in triplicate, signed by signature or mark
by the contracting parties and said two witnesses and attested by the person
solemnizing the marriage.

In case of a marriage on the point of death, when the dying party, being
physically unable, cannot sign the instrument by signature or mark, it shall
be sufficient for one of the witnesses to the marriage to sign in his name,
which fact shall be attested by the minister solemnizing the marriage. (3)

Art. 56. Marriage may be solemnized by:

(1) The Chief Justice and Associate Justices of the Supreme Court;

(2) The Presiding Justice and the Justices of the Court of Appeals;
 (3) Judges of the Courts of First Instance;

(4) Mayors of cities and municipalities;

(5) Municipal judges and justices of the peace;

(6) Priests, rabbis, ministers of the gospel of any denomination,

church, religion or sect, duly registered, as provided in Article 92; and

(7) Ship captains, airplane chiefs, military commanders, and consuls

and vice-consuls in special cases provided in Articles 74 and 75. (4a)

Art. 57. The marriage shall be solemnized publicly in the office of the judge
in open court or of the mayor; or in the church, chapel or temple, as the
case may be, and not elsewhere, except in cases of marriages contracted on
the point of death or in remote places in accordance with Article 72 of this
Code, or in case of marriage referred to in Article 76 or when one of the
parents or the guardian of the female or the latter herself if over eighteen
years of age request it in writing, in which cases the marriage may be
solemnized at a house or place designated by said parent or guardian of the
female or by the latter herself in a sworn statement to that effect. (5a)

Art. 58. Save marriages of an exceptional character authorized in Chapter 2

of this Title, but not those under Article 75, no marriage shall be solemnized
without a license first being issued by the local civil registrar of the
municipality where either contracting party habitually resides. (7a)

Art. 59. The local civil registrar shall issue the proper license if each of the
contracting parties swears separately before him or before any public
official authorized to administer oaths, to an application in writing setting
forth that such party has the necessary qualifications for contracting
marriage. The applicants, their parents or guardians shall not be required
to exhibit their residence certificates in any formality in connection with
the securing of the marriage license. Such application shall insofar as
possible contain the following data:

(1) Full name of the contracting party;

(2) Place of birth;

(3) Age, date of birth;

(4) Civil status (single, widow or widower, or divorced);

(5) If divorced, how and when the previous marriage was dissolved;

(6) Present residence;

 (7) Degree of relationship of the contracting parties;

(8) Full name of the father;

(9) Residence of the father;

(10) Full name of the mother;

(11) Residence of the mother;

(12) Full name and residence of the guardian or person having

charge, in case the contracting party has neither father nor mother
and is under the age of twenty years, if a male, or eighteen years if a
female. (7a)

Art. 60. The local civil registrar, upon receiving such application, shall
require the exhibition of the original baptismal or birth certificates of the
contracting parties or copies of such documents duly attested by the
persons having custody of the originals. These certificates or certified
copies of the documents required by this article need not to be sworn to and
shall be exempt from the documentary stamp tax. The signature and official
title of the person issuing the certificate shall be sufficient proof of its
authenticity.

If either of the contracting parties is unable to produce his baptismal or

birth certificate or a certified copy of either because of the destruction or
loss of the original, or if it is shown by an affidavit of such party or of any
other person that such baptismal or birth certificate has not yet been
received though the same has been requested of the person having custody
thereof at least fifteen days prior to the date of the application, such party
may furnish in lieu thereof his residence certificate for the current year or
any previous years, to show the age stated in his application or, in the
absence thereof, an instrument drawn up and sworn to before the local civil
registrar concerned or any public official authorized to solemnize
marriage. Such instrument shall contain the sworn declaration of two
witnesses, of lawful age, of either sex, setting forth the full name,
profession, and residence of such contracting party and of his or her
parents, if known, and the place and date of birth of such party. The nearest
of kin of the contracting parties shall be preferred as witnesses, and in their
default, persons well known in the province or the locality for their honesty
and good repute.

The exhibition of baptismal or birth certificates shall not be required if the

parents of the contracting parties appear personally before the local civil
registrar concerned and swear to the correctness of the lawful age of said
parties, as stated in the application, or when the local civil registrar shall,
by merely looking at the applicants upon their personally appearing before
him, be convinced that either or both of them have the required age. (8a)

Art. 61. In case either of the contracting parties is a widowed or divorced

person, the same shall be required to furnish, instead of the baptismal or
birth certificate required in the last preceding article, the death certificate
of the deceased spouse or the decree of the divorce court, as the case may
be. In case the death certificate cannot be found, the party shall make an
affidavit setting forth this circumstance and his or her actual civil status
and the name and the date of the death of the deceased spouse.

In case either or both of the contracting parties, being neither widowed nor
divorced, are less than twenty years of age as regards the male and less than
eighteen years as regards the female, they shall, in addition to the
requirements of the preceding articles, exhibit to the local civil registrar,
the consent to their marriage, of their father, mother or guardian, or
persons having legal charge of them, in the order mentioned. Such consent
shall be in writing, under oath taken with the appearance of the interested
parties before the proper local civil registrar or in the form of an affidavit
made in the presence of two witnesses and attested before any official
authorized by law to administer oaths. (9a)

Art. 62. Males above twenty but under twenty-five years of age, or females
above eighteen but under twenty-three years of age, shall be obliged to ask
their parents or guardian for advice upon the intended marriage. If they do
not obtain such advice, or if it be unfavorable, the marriage shall not take
place till after three months following the completion of the publication of
the application for marriage license. A sworn statement by the contracting
parties to the effect that such advice has been sought, together with the
written advice given, if any, shall accompany the application for marriage
license. Should the parents or guardian refuse to give any advice, this fact
shall be stated in the sworn declaration. (n)

Art. 63. The local civil registrar shall post during ten consecutive days at the
main door of the building where he has his office a notice, the location of
which shall not be changed once it has been placed, setting forth the full
names and domiciles of the applicants for a marriage license and other
information given in the application. This notice shall request all persons
having knowledge of any impediment to the marriage to advise the local
registrar thereof. The license shall be issued after the completion of the
publication, unless the local civil registrar receives information upon any
alleged impediment to the marriage. (10a)

Art. 64. Upon being advised of any alleged impediment to the marriage, the
local civil registrar shall forthwith make an investigation, examining
persons under oath. If he is convicted that there is an impediment to the
marriage, it shall be his duty to withhold the marriage license, unless he is
otherwise ordered by a competent court. (n)

Art. 65. The local civil registrar shall demand the previous payment of fees
required by law or regulations for each license issued. No other sum shall
be collected, in the nature of a fee or tax of any kind, for the issuance of a
marriage license. Marriage licenses shall be issued free of charge to
indigent parties, when both male and female do not each own assessed real
property in excess of five hundred pesos, a fact certified to, without cost, by
the provincial treasurer, or in the absence thereof, by a statement duly
sworn to by the contracting parties before the local civil registrar. The
license shall be valid in any part of the Philippines; but it shall be good for
no more than one hundred and twenty days from the date on which it is
issued and shall be deemed canceled at the expiration of said period if the
interested parties have not made use of it. (11a)

Art. 66. When either or both of the contracting parties are citizens or
subjects of a foreign country, it shall be necessary, before a marriage
license can be obtained, to provide themselves with a certificate of legal
capacity to contract marriage, to be issued by their respective diplomatic or
consular officials. (13a)

Art. 67. The marriage certificate in which the contracting parties shall state
that they take each other as husband and wife, shall also contain:

(1) The full names and domiciles of the contracting parties;

(2) The age of each;

(3) A statement that the proper marriage license has been issued
according to law and that the contracting parties have the consent of
their parents in case the male is under twenty or the female under
eighteen years of age; and

(4) A statement that the guardian or parent has been informed of the
marriage, if the male is between the ages of twenty and twenty-five
years, and the female between eighteen and twenty-three years of age.
(15a)

Art. 68. It shall be the duty of the person solemnizing the marriage to
furnish to either of the contracting parties one of the three copies of the
marriage contract referred to in Article 55, and to send another copy of the
document not later than fifteen days after the marriage took place to the
local civil registrar concerned, whose duty it shall be to issue the proper
receipt to any person sending a marriage contract solemnized by him,
including marriages of an exceptional character. The official, priest, or
minister solemnizing the marriage shall retain the third copy of the
marriage contract, the marriage license and the affidavit of the interested
party regarding the solemnization of the marriage in a place other than
those mentioned in Article 57 if there be any such affidavit, in the files that
he must keep. (16a)

Art. 69. It shall be the duty of the local civil registrar to prepare the
documents required by this Title, and to administer oaths to all interested
parties without any charge in both cases.

The documents and affidavits filed in connection with applications for

marriage licenses shall be exempt from the documentary stamp tax. (17a)

Art. 70. The local civil registrar concerned shall enter all applications for
marriage licenses filed with him in a register book strictly in the order in
which the same shall be received. He shall enter in said register the names
of the applicants, the date on which the marriage license was issued, and
such other data as may be necessary. (18a)

Art. 71. All marriages performed outside the Philippines in accordance with
the laws in force in the country where they were performed, and valid there
as such, shall also be valid in this country, except bigamous, polygamous, or
incestuous marriages as determined by Philippine law. (19a)

CHAPTER 2
MARRIAGES OF EXCEPTIONAL CHARACTER

Art. 72. In case either of the contracting parties is on the point of death or
the female has her habitual residence at a place more than fifteen
kilometers distant from the municipal building and there is no
communication by railroad or by provincial or local highways between the
former and the latter, the marriage may be solemnized without necessity of
a marriage license; but in such cases the official, priest, or minister
solemnizing it shall state in an affidavit made before the local civil registrar
or any person authorized by law to administer oaths that the marriage was
performed in articulo mortis or at a place more than fifteen kilometers
distant from the municipal building concerned, in which latter case he shall
give the name of the barrio where the marriage was solemnized. The person
who solemnized the marriage shall also state, in either case, that he took
the necessary steps to ascertain the ages and relationship of the contracting
parties and that there was in his opinion no legal impediment to the
marriage at the time that it was solemnized. (20)

Art. 73. The original of the affidavit required in the last preceding article,
together with a copy of the marriage contract, shall be sent by the person
solemnizing the marriage to the local civil registrar of the municipality
where it was performed within the period of thirty days, after the
performance of the marriage. The local civil registrar shall, however, before
filing the papers, require the payment into the municipal treasury of the
legal fees required in Article 65. (21)

Art. 74. A marriage in articulo mortis may also be solemnized by the captain
of a ship or chief of an airplane during a voyage, or by the commanding
officer of a military unit, in the absence of a chaplain, during war. The
duties mentioned in the two preceding articles shall be complied with by the
ship captain, airplane chief or commanding officer. (n)

Art. 75. Marriages between Filipino citizens abroad may be solemnized by

consuls and vice-consuls of the Republic of the Philippines. The duties of
the local civil registrar and of a judge or justice of the peace or mayor with
regard to the celebration of marriage shall be performed by such consuls
and vice-consuls. (n)

Art. 76. No marriage license shall be necessary when a man and a woman
who have attained the age of majority and who, being unmarried, have lived
together as husband and wife for at least five years, desire to marry each
other. The contracting parties shall state the foregoing facts in an affidavit
before any person authorized by law to administer oaths. The official, priest
or minister who solemnized the marriage shall also state in an affidavit that
he took steps to ascertain the ages and other qualifications of the
contracting parties and that he found no legal impediment to the marriage.
(n)

Art. 77. In case two persons married in accordance with law desire to ratify
their union in conformity with the regulations, rites, or practices of any
church, sect, or religion it shall no longer be necessary to comply with the
requirements of Chapter 1 of this Title and any ratification made shall
merely be considered as a purely religious ceremony. (23)

Art. 78. Marriages between Mohammedans or pagans who live in the non-
Christian provinces may be performed in accordance with their customs,
rites or practices. No marriage license or formal requisites shall be
necessary. Nor shall the persons solemnizing these marriages be obliged to
comply with Article 92.

However, twenty years after approval of this Code, all marriages performed
between Mohammedans or pagans shall be solemnized in accordance with
the provisions of this Code. But the President of the Philippines, upon
recommendation of the Secretary of the Interior, may at any time before
the expiration of said period, by proclamation, make any of said provisions
applicable to the Mohammedan and non-Christian inhabitants of any of the
non-Christian provinces. (25a)
Art. 79. Mixed marriages between a Christian male and a Mohammedan or
pagan female shall be governed by the general provision of this Title and
not by those of the last preceding article, but mixed marriages between a
Mohammedan or pagan male and a Christian female may be performed
under the provisions of the last preceding article if so desired by the
contracting parties, subject, however, in the latter case to the provisions of
the second paragraph of said article. (26)

CHAPTER 3
VOID AND VOIDABLE MARRIAGES

Art. 80. The following marriages shall be void from the beginning:
(1) Those contracted under the ages of sixteen and fourteen years by
the male and female respectively, even with the consent of the
parents;

(2) Those solemnized by any person not legally authorized to perform

marriages;

(3) Those solemnized without a marriage license, save marriages of

exceptional character;

(4) Bigamous or polygamous marriages not falling under Article 83,

Number 2;

(5) Incestuous marriages mentioned in Article 81;

(6) Those where one or both contracting parties have been found
guilty of the killing of the spouse of either of them;

(7) Those between stepbrothers and stepsisters and other marriages

specified in Article 82. (n)

Art. 81. Marriages between the following are incestuous and void from their
performance, whether the relationship between the parties be legitimate or
illegitimate:
(1) Between ascendants and descendants of any degree;

(2) Between brothers and sisters, whether of the full or half blood;

(3) Between collateral relatives by blood within the fourth civil

degree. (28a)

Art. 82. The following marriages shall also be void from the beginning:
(1) Between stepfathers and stepdaughters, and stepmothers and
stepsons;
 (2) Between the adopting father or mother and the adopted, between
the latter and the surviving spouse of the former, and between the
former and the surviving spouse of the latter;

(3) Between the legitimate children of the adopter and the adopted.
(28a)

Art. 83. Any marriage subsequently contracted by any person during the
lifetime of the first spouse of such person with any person other than such
first spouse shall be illegal and void from its performance, unless:
(1) The first marriage was annulled or dissolved; or

(2) The first spouse had been absent for seven consecutive years at the
time of the second marriage without the spouse present having news
of the absentee being alive, or if the absentee, though he has been
absent for less than seven years, is generally considered as dead and
believed to be so by the spouse present at the time of contracting such
subsequent marriage, or if the absentee is presumed dead according
to Articles 390 and 391. The marriage so contracted shall be valid in
any of the three cases until declared null and void by a competent
court. (29a)

Art. 84. No marriage license shall be issued to a widow till after three
hundred days following the death of her husband, unless in the meantime
she has given birth to a child. (n)

Art. 85. A marriage may be annulled for any of the following causes,
existing at the time of the marriage:

(1) That the party in whose behalf it is sought to have the marriage
annulled was between the ages of sixteen and twenty years, if male, or
between the ages of fourteen and eighteen years, if female, and the
marriage was solemnized without the consent of the parent, guardian
or person having authority over the party, unless after attaining the
ages of twenty or eighteen years, as the case may be, such party freely
cohabited with the other and both lived together as husband and wife;

(2) In a subsequent marriage under Article 83, Number 2, that the

former husband or wife believed to be dead was in fact living and the
marriage with such former husband or wife was then in force;

(3) That either party was of unsound mind, unless such party, after
coming to reason, freely cohabited with the other as husband or wife;

(4) That the consent of either party was obtained by fraud, unless
such party afterwards, with full knowledge of the facts constituting
 the fraud, freely cohabited with the other as her husband or his wife,
as the case may be;

(5) That the consent of either party was obtained by force or

intimidation, unless the violence or threat having disappeared, such
party afterwards freely cohabited with the other as her husband or his
wife, as the case may be;

(6) That either party was, at the time of marriage, physically

incapable of entering into the married state, and such incapacity
continues, and appears to be incurable. (30a)

Art. 86. Any of the following circumstances shall constitute fraud referred
to in Number 4 of the preceding article:
(1) Misrepresentation as to the identity of one of the contracting
parties;

(2) Non-disclosure of the previous conviction of the other party of a

crime involving moral turpitude, and the penalty imposed was
imprisonment for two years or more;

(3) Concealment by the wife of the fact that at the time of the
marriage, she was pregnant by a man other than her husband.

No other misrepresentation or deceit as to character, rank, fortune or

chastity shall constitute such fraud as will give grounds for action for the
annulment of marriage. (n)

Art. 87. The action for annulment of marriage must be commenced by the
parties and within the periods as follows:

(1) For causes mentioned in Number 1 of Article 85, by the party

whose parent or guardian did not give his or her consent, within four
years after attaining the age of twenty or eighteen years, as the case
may be; or by the parent or guardian or person having legal charge, at
any time before such party has arrived at the age of twenty or
eighteen years;

(2) For causes mentioned in Number 2 of Article 85, by the spouse

who has been absent, during his or her lifetime; or by either spouse of
the subsequent marriage during the lifetime of the other;

(3) For causes mentioned in Number 3 of Article 85, by the sane

spouse, who had no knowledge of the other's insanity; or by any
relative or guardian of the party of unsound mind, at any time before
the death of either party;
 (4) For causes mentioned in Number 4, by the injured party, within
four years after the discovery of the fraud;

(5) For causes mentioned in Number 5, by the injured party, within

four years from the time the force or intimidation ceased;

(6) For causes mentioned in Number 6, by the injured party, within

eight years after the marriage. (31a)

Art. 88. No judgment annulling a marriage shall be promulgated upon a

stipulation of facts or by confession of judgment.

Art. 89. Children conceived or born of marriages which are void from the
beginning shall have the same status, rights and obligations as
acknowledged natural children, and are called natural children by legal
fiction.

Children conceived of voidable marriages before the decree of annulment

shall be considered as legitimate; and children conceived thereafter shall
have the same status, rights and obligations as acknowledged natural
children, and are also called natural children by legal fiction. (n)

Art. 90. When a marriage is annulled, the court shall award the custody of
the children as it may deem best, and make provision for their education
and support. Attorney's fees and expenses incurred in the litigation shall be
charged to the conjugal partnership property, unless the action fails. (33a)

Art. 91. Damages may be awarded in the following cases when the marriage
is judicially annulled or declared void from the beginning:

(1) If there has been fraud, force or intimidation in obtaining the

consent of one of the contracting parties;

(2) If either party was, at the time of the marriage, physically

incapable of entering into the married state, and the other party was
unaware thereof;

(3) If the person solemnizing the marriage was not legally authorized
to perform marriages, and that fact was known to one of the
contracting parties, but he or she concealed it from the other;

(4) If a bigamous or polygamous marriage was celebrated, and the

impediment was concealed from the plaintiff by the party
disqualified;

(5) If in an incestuous marriage, or a marriage between a stepbrother

and a stepsister or other marriage prohibited by article 82, the
 relationship was known to only one of the contracting parties but was
not disclosed to the other;

(6) If one party was insane and the other was aware thereof at the
time of the marriage. (n)

CHAPTER 4
AUTHORITY TO SOLEMNIZE MARRIAGES

Art. 92. Every priest, or minister, or rabbi authorized by his denomination,

church, sect, or religion to solemnize marriage shall send to the proper
government office a sworn statement setting forth his full name and
domicile, and that he is authorized by his denomination, church, sect, or
religion to solemnize marriage, attaching to said statement a certified copy
of his appointment. The director of the proper government office, upon
receiving such sworn statement containing the information required, and
being satisfied that the denomination, church, sect, or region of the
applicant operates in the Philippines, shall record the name of such priest
or minister in a suitable register and issue to him an authorization to
solemnize marriage. Said priest or minister or rabbi shall be obliged to
exhibit his authorization to the contracting parties, to their parents,
grandparents, guardians, or persons in charge demanding the same. No
priest or minister not having the required authorization may solemnize
marriage. (34a)

Art. 93. Freedom of religion shall be observed by public officials in the

issuance of authorization to solemnize marriages. Consequently, no public
official shall attempt to inquire into the truth or validity of any religious
doctrine held by the applicant or by his church. (n)

Art. 94. The public official in charge of registration of priests and ministers
shall cancel the authorization issued to a bishop, head, priest, rabbi, pastor
or minister of the gospel of any denomination, church, sect, or religion, on
his own initiative or at the request of any interested party, upon showing
that the church, sect or religion whose ministers have been authorized to
solemnize marriage is no longer in operation. The cancellation of the
authorization granted to a priest, pastor or minister shall likewise be
ordered upon the request of the bishop, head, or lawful authorities of the
denomination, church, sect or religion to which he belongs. (35a)

Art. 95. The public official in charge of registration of priests and ministers,
with the approval of the proper head of Department, is hereby authorized to
prepare the necessary forms and to promulgate regulations for the purpose
of enforcing the provisions of this Title. Said official may also by regulations
fix and collect fees for the authorization of priests and ministers to
solemnize marriages. (36a)
Art. 96. The existing laws which punish acts or omissions concerning the
marriage license, solemnization of marriage, authority to solemnize
marriages, and other acts or omissions relative to the celebration of
marriage shall remain and continue to be in force. (n)

Title IV. - LEGAL SEPARATION

Art. 97. A petition for legal separation may be filed:

(1) For adultery on the part of the wife and for concubinage on the
part of the husband as defined in the Penal Code; or

(2) An attempt by one spouse against the life of the other. (n)

Art. 98. In every case the court must take steps, before granting the legal
separation, toward the reconciliation of the spouses, and must be fully
satisfied that such reconciliation is highly improbable. (n)

Art. 99. No person shall be entitled to a legal separation who has not
resided in the Philippines for one year prior to the filing of the petition,
unless the cause for the legal separation has taken place within the territory
of this Republic. (Sec. 2a, Act No. 2710)

Art. 100. The legal separation may be claimed only by the innocent spouse,
provided there has been no condonation of or consent to the adultery or
concubinage. Where both spouses are offenders, a legal separation cannot
be claimed by either of them. Collusion between the parties to obtain legal
separation shall cause the dismissal of the petition. (3a, Act No. 2710)

Art. 101. No decree of legal separation shall be promulgated upon a

stipulation of facts or by confession of judgment.

In case of non-appearance of the defendant, the court shall order the

prosecuting attorney to inquire whether or not a collusion between the
parties exists. If there is no collusion, the prosecuting attorney shall
intervene for the State in order to take care that the evidence for the
plaintiff is not fabricated. (n)

Art. 102. An action for legal separation cannot be filed except within one
year from and after the date on which the plaintiff became cognizant of the
cause and within five years from and after the date when such cause
occurred. (4a, Act 2710)

Art. 103. An action for legal separation shall in no case be tried before six
months shall have elapsed since the filing of the petition. (5a, Act 2710)
Art. 104. After the filing of the petition for legal separation, the spouses
shall be entitled to live separately from each other and manage their
respective property.

The husband shall continue to manage the conjugal partnership property

but if the court deems it proper, it may appoint another to manage said
property, in which case the administrator shall have the same rights and
duties as a guardian and shall not be allowed to dispose of the income or of
the capital except in accordance with the orders of the court. (6, Act 2710)

Art. 105. During the pendency of legal separation proceedings the court
shall make provision for the care of the minor children in accordance with
the circumstances and may order the conjugal partnership property or the
income therefrom to be set aside for their support; and in default thereof
said minor children shall be cared for in conformity with the provisions of
this Code; but the Court shall abstain from making any order in this respect
in case the parents have by mutual agreement, made provision for the care
of said minor children and these are, in the judgment of the court, well
cared for. (7a, Act 2710)

Art. 106. The decree of legal separation shall have the following effects:

(1) The spouses shall be entitled to live separately from each other,
but marriage bonds shall not be severed;

(2) The conjugal partnership of gains or the absolute conjugal

community of property shall be dissolved and liquidated, but the
offending spouse shall have no right to any share of the profits earned
by the partnership or community, without prejudice to the provisions
of Article 176;

(3) The custody of the minor children shall be awarded to the

innocent spouse, unless otherwise directed by the court in the
interest of said minors, for whom said court may appoint a guardian;

(4) The offending spouse shall be disqualified from inheriting from

the innocent spouse by intestate succession. Moreover, provisions in
favor of the offending spouse made in the will of the innocent one
shall be revoked by operation of law. (n)

Art. 107. The innocent spouse, after a decree of legal separation has been
granted, may revoke the donations by reason of marriage made by him or
by her to the offending spouse. Alienation and mortgages made before the
notation of the complaint for revocation in the Registry of Property shall be
valid.
This action lapses after four years following the date the decree became
final. (n)

Art. 108. Reconciliation stops the proceedings for legal separation and
rescinds the decree of legal separation already rendered.

The revival of the conjugal partnership of gains or of the absolute conjugal

community of property shall be governed by Article 195. (10a. Act 2710)

Title V. - RIGHTS AND OBLIGATIONS

BETWEEN HUSBAND AND WIFE

Art. 109. The husband and wife are obliged to live together, observe mutual
respect and fidelity, and render mutual help and support. (56a)

Art. 110. The husband shall fix the residence of the family. But the court
may exempt the wife from living with the husband if he should live abroad
unless in the service of the Republic. (58a)

Art. 111. The husband is responsible for the support of the wife and the rest
of the family. These expenses shall be met first from the conjugal property,
then from the husband's capital, and lastly from the wife's paraphernal
property. In case there is a separation of property, by stipulation in the
marriage settlements, the husband and wife shall contribute
proportionately to the family expenses. (n)

Art. 112. The husband is the administrator of the conjugal property, unless
there is a stipulation in the marriage settlements conferring the
administration upon the wife. She may also administer the conjugal
partnership in other cases specified in this Code. (n)

Art. 113. The husband must be joined in all suits by or against the wife,
except:

(1) When they are judicially separated;

(2) If they have in fact been separated for at least one year;

(3) When there is a separation of property agreed upon in the

marriage settlements;

(4) If the administration of all the property in the marriage has been
transferred to her, in accordance with Articles 196 and 197;

(5) When the litigation is between the husband and wife;

 (6) If the suit concerns her paraphernal property;

(7) When the action is upon the civil liability arising from a criminal
offense;

(8) If the litigation is incidental to the profession, occupation or

business in which she is engaged;

(9) In any civil action referred to in Articles 25 to 35; and

(10) In an action upon a quasi-delict.

In the cases mentioned in Nos. 7 to 10, the husband must be joined as

a party defendant if the third paragraph of Article 163 is applicable. (n)

Art. 114. The wife cannot, without the husband's consent acquire any
property by gratuitous title, except from her ascendants, descendants,
parents-in-law, and collateral relatives within the fourth degree. (n)

Art. 115. The wife manages the affairs of the household. She may purchase
things necessary for the support of the family, and the conjugal partnership
shall be bound thereby. She may borrow money for this purpose, if the
husband fails to deliver the proper sum. The purchase of jewelry and
precious objects is voidable, unless the transaction has been expressly or
tacitly approved by the husband, or unless the price paid is from her
paraphernal property. (62a)

Art. 116. When one of the spouses neglects his or her duties to the conjugal
union or brings danger, dishonor or material injury upon the other, the
injured party may apply to the court for relief.

The court may counsel the offender to comply with his or her duties, and
take such measures as may be proper. (n)

Art. 117. The wife may exercise any profession or occupation or engage in
business. However, the husband may object, provided:

(1) His income is sufficient for the family, according to its social
standing, and

(2) His opposition is founded on serious and valid grounds.

In case of disagreement on this question, the parents and grandparents as

well as the family council, if any, shall be consulted. If no agreement is still
arrived at, the court will decide whatever may be proper and in the best
interest of the family. (n)
 Title VI. - PROPERTY RELATIONS
BETWEEN HUSBAND AND WIFE

CHAPTER 1
GENERAL PROVISIONS

Art. 118. The property relations between husband and wife shall be
governed in the following order:
(1) By contract executed before the marriage;

(2) By the provisions of this Code; and

(3) By custom. (1315a)

Art. 119. The future spouses may in the marriage settlements agree upon
absolute or relative community of property, or upon complete separation of
property, or upon any other regime. In the absence of marriage
settlements, or when the same are void, the system of relative community
or conjugal partnership of gains as established in this Code, shall govern
the property relations between husband and wife. (n)

Art. 120. A minor who according to law may contract marriage, may also
execute his or her marriage settlements; but they shall be valid only if the
persons designated by law to give consent to the marriage of the minor take
part in the ante-nuptial agreement. In the absence of the parents or of a
guardian, the consent to the marriage settlements will be given by the
family council. (1318a)

Art. 121. In order that any modification in the marriage settlements may be
valid, it must be made before the celebration of the marriage, subject to the
provisions of Article 191. (1319a)

Art. 122. The marriage settlements and any modification thereof shall be
governed by the Statute of Frauds, and executed before the celebration of
the marriage. They shall not prejudice third persons unless they are
recorded in the Registry of Property. (1321a)

Art. 123. For the validity of marriage settlements executed by any person
upon whom a sentence of civil interdiction has been pronounced, the
presence and participation of the guardian shall be indispensable, who for
this purpose shall be designated by a competent court, in accordance with
the provisions of the Rules of Court. (1323a)

Art. 124. If the marriage is between a citizen of the Philippines and a

foreigner, whether celebrated in the Philippines or abroad, the following
rules shall prevail:
 (1) If the husband is a citizen of the Philippines while the wife is a
foreigner, the provisions of this Code shall govern their relations;

(2) If the husband is a foreigner and the wife is a citizen of the

Philippines, the laws of the husband's country shall be followed,
without prejudice to the provisions of this Code with regard to
immovable property. (1325a)

Art. 125. Everything stipulated in the settlements or contracts referred to in

the preceding articles in consideration of a future marriage shall be
rendered void and without effect whatever, if the marriage should not take
place. However, those stipulations that do not depend upon the celebration
of the marriage shall be valid. (1326a)

CHAPTER 2
DONATIONS BY REASON OF MARRIAGE

Art. 126. Donations by reasons of marriage are those which are made before
its celebration, in consideration of the same and in favor of one or both of
the future spouses. (1327)

Art. 127. These donations are governed by the rules on ordinary donations
established in Title III of Book III, except as to their form which shall be
regulated by the Statute of Frauds; and insofar as they are not modified by
the following articles. (1328a)

Art. 128. Minors may make and receive donations in their ante-nuptial
contract, provided they are authorized by the persons who are to give their
consent to the marriage of said minors. (1329a)

Art. 129. Express acceptance is not necessary for the validity of these
donations. (1330)

Art. 130. The future spouses may give each other in their marriage
settlements as much as one-fifth of their present property, and with respect
to their future property, only in the event of death, to the extent laid down
by the provisions of this Code referring to testamentary succession. (1331a)

Art. 131. The donor by reason of marriage shall release the property
donated from mortgages and all other encumbrances upon the same, with
the exception of easements, unless in the marriage settlements or in the
contracts the contrary has been stipulated. (1332a)

Art. 132. A donation by reason of marriage is not revocable, save in the

following cases:

(1) If it is conditional and the condition is not complied with;

 (2) If the marriage is not celebrated;

(3) When the marriage takes place without the consent of the parents
or guardian, as required by law;

(4) When the marriage is annulled, and the donee acted in bad faith;

(5) Upon legal separation, the donee being the guilty spouse;

(6) When the donee has committed an act of ingratitude as specified

by the provisions of this Code on donations in general. (1333a)

Art. 133. Every donation between the spouses during the marriage shall be
void. This prohibition does not apply when the donation takes effect after
the death of the donor.

Neither does this prohibition apply to moderate gifts which the spouses
may give each other on the occasion of any family rejoicing. (1334a)

Art. 134. Donations during the marriage by one of the spouses to the
children whom the other spouse had by another marriage, or to persons of
whom the other spouse is a presumptive heir at the time of the donation are
voidable, at the instance of the donor's heirs after his death. (1335a)

CHAPTER 3
PARAPHERNAL PROPERTY

Art. 135. All property brought by the wife to the marriage, as well as all
property she acquires during the marriage, in accordance with article 148,
is paraphernal. (1381a)

Art. 136. The wife retains the ownership of the paraphernal property. (1382)

Art. 137. The wife shall have the administration of the paraphernal
property, unless she delivers the same to the husband by means of a public
instrument empowering him to administer it.

In this case, the public instrument shall be recorded in the Registry of

Property. As for the movables, the husband shall give adequate security.
(1384a)

Art. 138. The fruits of the paraphernal property form part of the assets of
the conjugal partnership, and shall be subject to the payment of the
expenses of the marriage.
The property itself shall also be subject to the daily expenses of the family, if
the property of the conjugal partnership and the husband's capital are not
sufficient therefor. (1385a)

Art. 139. The personal obligations of the husband can not be enforced
against the fruits of the paraphernal property, unless it be proved that they
redounded to the benefit of the family. (1386)

Art. 140. A married woman of age may mortgage, encumber, alienate or

otherwise dispose of her paraphernal property, without the permission of
the husband, and appear alone in court to litigate with regard to the same.
(n)

Art. 141. The alienation of any paraphernal property administered by the

husband gives a right to the wife to require the constitution of a mortgage
or any other security for the amount of the price which the husband may
have received. (1390a)

CHAPTER 4
CONJUGAL PARTNERSHIP OF GAINS

SECTION 1. - General Provisions

Art. 142. By means of the conjugal partnership of gains the husband and
wife place in a common fund the fruits of their separate property and the
income from their work or industry, and divide equally, upon the
dissolution of the marriage or of the partnership, the net gains or benefits
obtained indiscriminately by either spouse during the marriage. (1392a)

Art. 143. All property of the conjugal partnership of gains is owned in

common by the husband and wife. (n)

Art. 144. When a man and a woman live together as husband and wife, but
they are not married, or their marriage is void from the beginning, the
property acquired by either or both of them through their work or industry
or their wages and salaries shall be governed by the rules on co-ownership.
(n)

Art. 145. The conjugal partnership shall commence precisely on the date of
the celebration of the marriage. Any stipulation to the contrary shall be
void. (1393)

Art. 146. Waiver of the gains or of the effects of this partnership during
marriage cannot be made except in case of judicial separation.

When the waiver takes place by reason of separation, or after the marriage
has been dissolved or annulled, the same shall appear in a public
instrument, and the creditors shall have the right which Article 1052 grants
them. (1394a)

Art. 147. The conjugal partnership shall be governed by the rules on the
contract of partnership in all that is not in conflict with what is expressly
determined in this Chapter. (1395)

SECTION 2. - Exclusive Property of Each Spouse

Art. 148. The following shall be the exclusive property of each spouse:
(1) That which is brought to the marriage as his or her own;

(2) That which each acquires, during the marriage, by lucrative title;

(3) That which is acquired by right of redemption or by exchange with

other property belonging to only one of the spouses;

(4) That which is purchased with exclusive money of the wife or of the
husband. (1396)

Art. 149. Whoever gives or promises capital to the husband shall not be
subject to warranty against eviction, except in case of fraud. (1937)

Art. 150. Property donated or left by will to the spouses, jointly and with
designation of determinate shares, shall pertain to the wife as paraphernal
property, and to the husband as capital, in the proportion specified by the
donor or testator, and in the absence of designation, share and share alike,
without prejudice to what is provided in Article 753. (1398a)

Art. 151. If the donations are onerous, the amount of the charges shall be
deducted from the paraphernal property or from the husband's capital,
whenever they have been borne by the conjugal partnership. (1399a)

Art. 152. If some credit payable in a certain number of years, or a life

pension, should pertain to one of the spouses, the provisions of Articles 156
and 157 shall be observed to determine what constitutes the paraphernal
property and what forms the capital of the husband. (1400a)

SECTION 3. - Conjugal Partnership Property

Art. 153. The following are conjugal partnership property:

(1) That which is acquired by onerous title during the marriage at the
expense of the common fund, whether the acquisition be for the
partnership, or for only one of the spouses;
 (2) That which is obtained by the industry, or work, or as salary of the
spouses, or of either of them;

(3) The fruits, rents or interests received or due during the marriage,
coming from the common property or from the exclusive property of
each spouse. (1401)

Art. 154. That share of the hidden treasure which the law awards to the
finder or the proprietor belongs to the conjugal partnership. (n)

Art. 155. Things acquired by occupation, such as fishing and hunting,

pertain to the conjugal partnership of gains. (n)

Art. 156. Whenever an amount or credit payable in a certain number of

years belongs to one of the spouses, the sums which may be collected by
installments due during the marriage shall not pertain to the conjugal
partnership, but shall be considered capital of the husband or of the wife, as
the credit may belong to one or the other spouse. (1402)

Art. 157. The right to an annuity, whether perpetual or of life, and the right
of usufruct, belonging to one of the spouses shall form a part of his or her
separate property, but the fruits, pensions and interests due during the
marriage shall belong to the partnership.

The usufruct which the spouses have over the property of their children,
though of another marriage, shall be included in this provision. (1403a)

Art. 158. Improvements, whether for utility or adornment, made on the

separate property of the spouses through advancements from the
partnership or through the industry of either the husband or the wife,
belong to the conjugal partnership.

Buildings constructed, at the expense of the partnership, during the

marriage on land belonging to one of the spouses, also pertain to the
partnership, but the value of the land shall be reimbursed to the spouse
who owns the same. (1404a)

Art. 159. Whenever the paraphernal property or the husband's capital

consists, in whole or in part, of livestock existing upon the dissolution of the
partnership, the number of animals exceeding that brought to the marriage
shall be deemed to be of the conjugal partnership. (1405a)

Art. 160. All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the husband
or to the wife. (1407)
 SECTION 4. - Charges Upon and Obligation
of the Conjugal Partnership

Art. 161. The conjugal partnership shall be liable for:

(1) All debts and obligations contracted by the husband for the benefit
of the conjugal partnership, and those contracted by the wife, also for
the same purpose, in the cases where she may legally bind the
partnership;

(2) Arrears or income due, during the marriage, from obligations

which constitute a charge upon property of either spouse or of the
partnership;

(3) Minor repairs or for mere preservation made during the marriage
upon the separate property of either the husband or the wife; major
repairs shall not be charged to the partnership;

(4) Major or minor repairs upon the conjugal partnership property;

(5) The maintenance of the family and the education of the children of
both husband and wife, and of legitimate children of one of the
spouses;

(6) Expenses to permit the spouses to complete a professional,

vocational or other course. (1408a)

Art. 162. The value of what is donated or promised to the common children
by the husband, only for securing their future or the finishing of a career,
or by both spouses through a common agreement, shall also be charged to
the conjugal partnership, when they have not stipulated that it is to be
satisfied from the property of one of them, in whole or in part. (1409)

Art. 163. The payment of debts contracted by the husband or the wife before
the marriage shall not be charged to the conjugal partnership.

Neither shall the fines and pecuniary indemnities imposed upon them be
charged to the partnership.

However, the payment of debts contracted by the husband or the wife

before the marriage, and that of fines and indemnities imposed upon them,
may be enforced against the partnership assets after the responsibilities
enumerated in Article 161 have been covered, if the spouse who is bound
should have no exclusive property or if it should be insufficient; but at the
time of the liquidation of the partnership such spouse shall be charged for
what has been paid for the purpose above-mentioned. (1410)
Art. 164. Whatever may be lost during the marriage in any kind of gambling,
betting or game, whether permitted or prohibited by law, shall be borne by
the loser, and shall not be charged to the conjugal partnership. (1411a)

SECTION 5. - Administration of the Conjugal Partnership

Art. 165. The husband is the administrator of the conjugal partnership. (1412a)

Art. 166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium,
the husband cannot alienate or encumber any real property of the conjugal
partnership without the wife's consent. If she refuses unreasonably to give
her consent, the court may compel her to grant the same.

This article shall not apply to property acquired by the conjugal partnership
before the effective date of this Code. (1413a)

Art. 167. In case of abuse of powers of administration of the conjugal

partnership property by the husband, the courts, on petition of the wife,
may provide for receivership, or administration by the wife, or separation
of property. (n)

Art. 168. The wife may, by express authority of the husband embodied in a
public instrument, administer the conjugal partnership property. (n)

Art. 169. The wife may also by express authority of the husband appearing
in a public instrument, administer the latter's estate. (n)

Art. 170. The husband or the wife may dispose by will of his or her half of
the conjugal partnership profits. (1414a)

Art. 171. The husband may dispose of the conjugal partnership property for
the purposes specified in Articles 161 and 162. (1415a)

Art. 172. The wife cannot bind the conjugal partnership without the
husband's consent except in cases provided by law. (1416a)

Art. 173. The wife may, during the marriage, and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of
the husband entered into without her consent, when such consent is
required, or any act or contract of the husband which tends to defraud her
or impair her interest in the conjugal partnership property. Should the wife
fail to exercise this right, she or her heirs, after the dissolution of the
marriage, may demand the value of property fraudulently alienated by the
husband. (n)
Art. 174. With the exception of moderate donations for charity, neither
husband nor wife can donate any property of the conjugal partnership
without the consent of the other. (n)

SECTION 6. - Dissolution of the Conjugal Partnership

Art. 175. The conjugal partnership of gains terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;

(3) When the marriage is annulled;

(4) In case of judicial separation of property under Article 191. (1417a)

Art. 176. In case of legal separation, the guilty spouse shall forfeit his or her
share of the conjugal partnership profits, which shall be awarded to the
children of both, and the children of the guilty spouse had by a prior
marriage. However, if the conjugal partnership property came mostly or
entirely from the work or industry, or from the wages and salaries, or from
the fruits of the separate property of the guilty spouse, this forfeiture shall
not apply.

In case there are no children, the innocent spouse shall be entitled to all the
net profits. (n)

Art. 177. In case of annulment of the marriage, the spouse who acted in bad
faith or gave cause for annulment shall forfeit his or her share of the
conjugal partnership profits. The provision of the preceding article shall
govern. (n)

Art. 178. The separation in fact between husband and wife without judicial
approval, shall not affect the conjugal partnership, except that:

(1) The spouse who leaves the conjugal home or refuses to live
therein, without just cause, shall not have a right to be supported;

(2) When the consent of one spouse to any transaction of the other is
required by law, judicial authorization shall be necessary;

(3) If the husband has abandoned the wife without just cause for at
least one year, she may petition the court for a receivership, or
administration by her of the conjugal partnership property, or
separation of property. (n)

SECTION 7. - Liquidation of the Conjugal Partnership

Art. 179. Upon the dissolution of the conjugal partnership, an inventory
shall be formed, but such inventory shall not be necessary:
(1) If, after the dissolution of the partnership, one of the spouses
should have renounced its effects and consequences in due time; or

(2) When separation of property has preceded the dissolution of the

partnership. (1418a)

Art. 180. The bed and bedding which the spouses ordinarily use shall not be
included in the inventory. These effects, as well as the clothing for their
ordinary use, shall be delivered to the surviving spouse. (1420)

Art. 181. The inventory having been completed, the paraphernal property
shall first be paid. Then, the debts and charges against the conjugal
partnership shall be paid. (1422a)

Art. 182. The debts, charges and obligations of the conjugal partnership
having been paid; the capital of the husband shall be liquidated and paid to
the amount of the property inventoried. (1423a)

Art. 183. The deductions from the inventoried property having been made
as provided in the two preceding articles, the remainder of said property
shall constitute the credit of the conjugal partnership. (1424)

Art. 184. The loss or deterioration of the movables belonging to either

spouse, although through fortuitous event, shall be paid from the conjugal
partnership of gains, should there be any.

Those suffered by real property shall not be reimbursable in any case,

except those on paraphernal property administered by the husband, when
the losses were due to his fault. He shall pay for the same. (1425a)

Art. 185. The net remainder of the conjugal partnership of gains shall be
divided equally between the husband and the wife or their respective heirs,
unless a different basis of division was agreed upon in the marriage
settlements. (1426a)

Art. 186. The mourning apparel of the widow shall be paid for out of the
estate of the deceased husband. (1427a)

Art. 187. With regard to the formation of the inventory, rules for appraisal
and sale of property of the conjugal partnership, and other matters which
are not expressly determined in the present Chapter, the Rules of Court on
the administration of estates of deceased persons shall be observed. (1428a)
Art. 188. From the common mass of property support shall be given to the
surviving spouse and to the children during the liquidation of the
inventoried property and until what belongs to them is delivered; but from
this shall be deducted that amount received for support which exceeds the
fruits or rents pertaining to them. (1430)

Art. 189. Whenever the liquidation of the partnership of two or more

marriages contracted by the same person should be carried out at the same
time, in order to determine the capital of each partnership all kinds of
proof in the absence of inventories shall be admitted; and in case of doubt,
the partnership property shall be divided between the different
partnerships in proportion to the duration of each and to the property
belonging to the respective spouses. (1431)

CHAPTER 5
SEPARATION OF PROPERTY OF THE SPOUSES
AND ADMINISTRATION OF PROPERTY
BY THE WIFE DURING THE MARRIAGE

Art. 190. In the absence of an express declaration in the marriage

settlements, the separation of property between spouses during the
marriage shall not take place save in virtue of a judicial order. (1432a)

Art. 191. The husband or the wife may ask for the separation of property,
and it shall be decreed when the spouse of the petitioner has been
sentenced to a penalty which carries with it civil interdiction, or has been
declared absent, or when legal separation has been granted.

In case of abuse of powers of administration of the conjugal partnership

property by the husband, or in case of abandonment by the husband,
separation of property may also be ordered by the court, according to the
provisions of Articles 167 and 178, No. 3.

In all these cases, it is sufficient to present the final judgment which has
been entered against the guilty or absent spouse. (1433a)

The husband and the wife may agree upon the dissolution of the conjugal
partnership during the marriage, subject to judicial approval. All the
creditors of the husband and of the wife, as well as of the conjugal
partnership shall be notified of any petition for judicial approval or the
voluntary dissolution of the conjugal partnership, so that any such
creditors may appear at the hearing to safeguard his interests. Upon
approval of the petition for dissolution of the conjugal partnership, the
court shall take such measures as may protect the creditors and other third
persons.
After dissolution of the conjugal partnership, the provisions of Articles 214
and 215 shall apply. The provisions of this Code concerning the effect of
partition stated in Articles 498 to 501 shall be applicable. (1433a)

Art. 192. Once the separation of property has been ordered, the conjugal
partnership shall be dissolved, and its liquidation shall be made in
conformity with what has been established by this Code.

However, without prejudice to the provisions of Article 292, the husband

and the wife shall be reciprocally liable for their support during the
separation, and for the support and education of their children; all in
proportion to their respective property.

The share of the spouse who is under civil interdiction or absent shall be
administered in accordance with the Rules of Court. (1434a)

Art. 193. The complaint for separation and the final judgment declaring the
same, shall be noted and recorded in the proper registers of property, if the
judgment should refer to immovable property. (1437)

Art. 194. The separation of property shall not prejudice the rights
previously acquired by creditors. (1438)

Art. 195. The separation of property ceases:

(1) Upon reconciliation of the spouses, in case of legal separation;

(2) When the civil interdiction terminates;

(3) When the absent spouse appears;

(4) When the court, at the instance of the wife, authorizes the
husband to resume the administration of the conjugal partnership,
the court being satisfied that the husband will not again abuse his
powers as an administrator;

(5) When the husband, who has abandoned the wife, rejoins her.

In the above cases, the property relations between the spouses shall be
governed by the same rules as before the separation, without prejudice to
the acts and contracts legally executed during the separation.

The spouses shall state, in a public document, all the property which they
return to the marriage and which shall constitute the separate property of
each.

This public document shall be recorded in the Registry of Property.

In the cases referred to in this article, all the property brought in shall be
deemed to be newly contributed, even though all or some may be the same
which existed before the liquidation effected by reason of the separation.
(1439a)

Art. 196. With the conjugal partnership subsisting, the administration of all
classes of property in the marriage may be transferred by the courts to the
wife:

(1) When she becomes the guardian of her husband;

(2) When she asks for the declaration of his absence;

(3) In case of civil interdiction of the husband.

The courts may also confer the administration to the wife, with such
limitation as they may deem advisable, if the husband should become a
fugitive from justice or be in hiding as a defendant in a criminal case, or if,
being absolutely unable to administer, he should have failed to provide for
administration. (1441a)

Art. 197. The wife to whom the administration of all the property of the
marriage is transferred shall have, with respect to said property, the same
powers and responsibility which the husband has when he is the
administrator, but always subject to the provisions of the last paragraph of
the preceding article. (1442a)

CHAPTER 6
SYSTEM OF ABSOLUTE COMMUNITY (n)

Art. 198. In case the future spouses agree in the marriage settlements that
the system of absolute community shall govern their property relations
during marriage, the following provisions shall be of supplementary
application.

Art. 199. In the absence of stipulation to the contrary, the community shall
consist of all present and future property of the spouses not excepted by
law.

Art. 200. Neither spouse may renounce any inheritance without the consent
of the other. In case of conflict, the court shall decide the question, after
consulting the family council, if there is any.

Art. 201. The following shall be excluded from the community:

 (1) Property acquired by gratuitous title by either spouse, when it is
provided by the donor or testator that it shall not become a part of the
community;

(2) Property inherited by either husband or wife through the death of

a child by a former marriage, there being brothers or sisters of the
full blood of the deceased child;

(3) A portion of the property of either spouse equivalent to the

presumptive legitime of the children by a former marriage;

(4) Personal belongings of either spouse.

However, all the fruits and income of the foregoing classes of property shall
be included in the community.

Art. 202. Ante-nuptial debts of either spouse shall not be paid from the
community, unless the same have redounded to the benefit of the family.

Art. 203. Debts contracted by both spouses or by one of them with the
consent of the other shall be paid from the community. If the common
property is insufficient to cover common debts, the same may be enforced
against the separate property of the spouses, who shall be equally liable.

Art. 204. Debts contracted by either spouse without the consent of the other
shall be chargeable against the community to the extent that the family may
have been benefited thereby.

Art. 205. Indemnities that must be paid by either spouse on account of a

crime or of a quasi-delict shall be paid from the common assets, without
any obligation to make reimbursement.

Art. 206. The ownership, administration, possession and enjoyment of the

common property belong to both spouses jointly. In case of disagreement,
the courts shall settle the difficulty.

Art. 207. Neither spouse may alienate or encumber any common property
without the consent of the other. In case of unjustifiable refusal by the
other spouse, the courts may grant the necessary consent.

Art. 208. The absolute community of property shall be dissolved on any of

the grounds specified in Article 175.

Art. 209. When there is a separation in fact between husband and wife,
without judicial approval, the provisions of Article 178 shall apply.
Art. 210. Upon the dissolution and liquidation of the community, the net
assets shall be divided equally between the husband and the wife or their
heirs. In case of legal separation or annulment of marriage, the provisions
of Articles 176 and 177 shall apply to the net profits acquired during the
marriage.

Art. 211. Liquidation of the absolute community shall be governed by the

Rules of Court on the administration of the estate of deceased persons.

CHAPTER 7
SYSTEM OF COMPLETE SEPARATION OF PROPERTY (n)

Art. 212. Should the future spouses agree in the marriage settlements that
their property relations during marriage shall be based upon the system of
complete separation of property, the following provisions shall supplement
the marriage settlements.

Art. 213. Separation of property may refer to present or future property or

both. It may be total or partial. In the latter case, the property not agreed
upon as separate shall pertain to the conjugal partnership of gains.

Art. 214. Each spouse shall own, dispose of, possess, administer and enjoy
his or her own separate estate, without the consent of the other. All
earnings from any profession, business or industry shall likewise belong to
each spouse.

Art. 215. Each spouse shall proportionately bear the family expenses.

Title VII. - THE FAMILY (n)

CHAPTER 1
THE FAMILY AS AN INSTITUTION

Art. 216. The family is a basic social institution which public policy
cherishes and protects.

Art. 217. Family relations shall include those:

(1) Between husband and wife;

(2) Between parent and child;

(3) Among other ascendants and their descendants;

(4) Among brothers and sisters.

Art. 218. The law governs family relations. No custom, practice or
agreement which is destructive of the family shall be recognized or given
any effect.

Art. 219. Mutual aid, both moral and material, shall be rendered among
members of the same family. Judicial and administrative officials shall
foster this mutual assistance.

Art. 220. In case of doubt, all presumptions favor the solidarity of the
family. Thus, every intendment of law or facts leans toward the validity of
marriage, the indissolubility of the marriage bonds, the legitimacy of
children, the community of property during marriage, the authority of
parents over their children, and the validity of defense for any member of
the family in case of unlawful aggression.

Art. 221. The following shall be void and of no effect:

(1) Any contract for personal separation between husband and wife;

(2) Every extra-judicial agreement, during marriage, for the

dissolution of the conjugal partnership of gains or of the absolute
community of property between husband and wife;

(3) Every collusion to obtain a decree of legal separation, or of

annulment of marriage;

(4) Any simulated alienation of property with intent to deprive the

compulsory heirs of their legitime.

Art. 222. No suit shall be filed or maintained between members of the same
family unless it should appear that earnest efforts toward a compromise
have been made, but that the same have failed, subject to the limitations in
Article 2035.

CHAPTER 2
THE FAMILY HOME (n)

SECTION 1. - General Provisions

Art. 223. The family home is the dwelling house where a person and his
family reside, and the land on which it is situated. If constituted as herein
provided, the family home shall be exempt from execution, forced sale or
attachment, except as provided in Articles 232 and 243.

Art. 224. The family home may be established judicially or extrajudicially.

 SECTION 2. - Judicial Constitution of the Family Home

Art. 225. The family home may be constituted by a verified petition to the
Court of First Instance by the owner of the property, and by approval
thereof by the court.

Art. 226. The following shall be beneficiaries of the family home:

(1) The person establishing the same;

(2) His or her spouse;

(3) His or her parents, ascendants, descendants, brothers and sisters,

whether the relationship be legitimate or otherwise, who are living in
the family home and who depend upon him for support.
Art. 227. The family home may also be set up by an unmarried person who
is the head of a family or household.

Art. 228. If the petitioner is married, the family home may be selected from
the conjugal partnership or community property, or from the separate
property of the husband, or, with the consent of the wife, from her
paraphernal property.

Art. 229. The petition shall contain the following particulars:

(1) Description of the property;

(2) An estimate of its actual value;

(3) A statement that the petitioner is actually residing in the

premises;

(4) The encumbrances thereon;

(5) The names and addresses of all the creditors of the petitioner and
of all mortgagees and other persons who have an interest in the
property;

(6) The names of the other beneficiaries specified in Article 226.

Art. 230. Creditors, mortgagees and all other persons who have an interest
in the estate shall be notified of the petition, and given an opportunity to
present their objections thereto. The petition shall, moreover, be published
once a week for three consecutive weeks in a newspaper of general
circulation.
Art. 231. If the court finds that the actual value of the proposed family home
does not exceed twenty thousand pesos, or thirty thousand pesos in
chartered cities, and that no third person is prejudiced, the petition shall be
approved. Should any creditor whose claim is unsecured, oppose the
establishment of the family home, the court shall grant the petition if the
debtor gives sufficient security for the debt.

Art. 232. The family home, after its creation by virtue of judicial approval,
shall be exempt from execution, forced sale, or attachment, except:

(1) For nonpayment of taxes; or

(2) In satisfaction of a judgment on a debt secured by a mortgage

constituted on the immovable before or after the establishment of the
family home.

In case of insolvency of the person constituting the family home, the

property shall not be considered one of the assets to be taken possession of
by the assignee for the benefit of creditors.

Art. 233. The order of the court approving the establishment of the family
home shall be recorded in the Registry of Property.

Art. 234. When there is danger that a person obliged to give support may
lose his or her fortune because of grave mismanagement or on account of
riotous living, his or her spouse, if any, and a majority of those entitled to
be supported by him or by her may petition the Court of First Instance for
the creation of the family home.

Art. 235. The family home may be sold, alienated or encumbered by the
person who has constituted the same, with the consent of his or her spouse,
and with the approval of the court. However, the family home shall under
no circumstances be donated as long as there are beneficiaries. In case of
sale, the price or such portion thereof as may be determined by the court
shall be used in acquiring property which shall be formed into a new family
home. Any sum of money obtained through an encumbrance on the family
home shall be used in the interest of the beneficiaries. The court shall take
measures to implement the last two provisions.

Art. 236. The family home may be dissolved upon the petition of the person
who has constituted the same, with the written consent of his or her spouse
and of at least one half of all the other beneficiaries who are eighteen years
of age or over. The court may grant the petition if it is satisfactorily shown
that the best interest of the family requires the dissolution of the family
home.
Art. 237. In case of legal separation or annulment of marriage, the family
home shall be dissolved, and the property shall cease to be exempt from
execution, forced sale or attachment.

Art. 238. Upon the death of the person who has set up the family home, the
same shall continue, unless he desired otherwise in his will. The heirs
cannot ask for its partition during the first ten years following the death of
the person constituting the same, unless the court finds powerful reasons
therefor.

Art. 239. The family home shall not be subject to payment of the debts of the
deceased, unless in his will the contrary is stated. However, the claims
mentioned in Article 232 shall not be adversely affected by the death of the
person who has established the family home.

SECTION 3. - Extra-judicial Creation of the Family Home

Art. 240. The family home may be extrajudicially constituted by recording

in the Registry of Property a public instrument wherein a person declares
that he thereby establishes a family home out of a dwelling place with the
land on which it is situated.

Art. 241. The declaration setting up the family home shall be under oath and
shall contain:

(1) A statement that the claimant is the owner of, and is actually
residing in the premises;

(2) A description of the property;

(3) An estimate of its actual value; and

(4) The names of the claimant's spouse and the other beneficiaries
mentioned in Article 226.

Art. 242. The recording in the Registry of Property of the declaration

referred to in the two preceding articles is the operative act which creates
the family home.

Art. 243. The family home extrajudicially formed shall be exempt from
execution, forced sale or attachment, except:

(1) For nonpayment of taxes;

(2) For debts incurred before the declaration was recorded in the
Registry of Property;
 (3) For debts secured by mortgages on the premises before or after
such record of the declaration;

(4) For debts due to laborers, mechanics, architects, builders,

material-men and others who have rendered service or furnished
material for the prosecution of the building.

Art. 244. The provisions of Articles 226 to 228 and 235 to 238 are likewise
applicable to family homes extrajudicially established.

Art. 245. Upon the death of the person who has extrajudicially constituted
the family home, the property shall not be liable for his debts other than
those mentioned in Article 243. However, he may provide in his will that
the family home shall be subject to payment of debts not specified in Article
243.

Art. 246. No declaration for the extrajudicial establishment of the family

home shall be recorded in the Registry of Property if the estimated actual
value of the building and the land exceeds the amount stated in Article 231.

Art. 247. When a creditor whose claim is not mentioned in Article 243
obtains a judgment in his favor, and he has reasonable grounds to believe
that the family home of the judgment debtor is worth more than the amount
mentioned in Article 231, he may apply to the Court of First Instance for an
order directing the sale of the property under execution.

Art. 248. The hearing on the petition, appraisal of the value of the family
home, the sale under execution and other matters relative to the
proceedings shall be governed by such provisions in the Rules of Court as
the Supreme Court shall promulgate on the subject, provided they are not
inconsistent with this Code.

Art. 249. At the sale under execution referred to in the two preceding
articles, no bid shall be considered unless it exceeds the amount specified in
Article 231. The proceeds of the sale shall be applied in the following order:

(1) To the amount mentioned in Article 231;

(2) To the judgment and the costs.

The excess, if any, belongs to the person constituting the family home.

Art. 250. The amount mentioned in Article 231 thus received by the person
who has established the family home, or as much thereof as the court may
determine, shall be invested in constitution of a new family home. The
court shall take measures to enforce this provision.
Art. 251. In case of insolvency of the person creating the family home, the
claims specified in Article 243 may be satisfied notwithstanding the
insolvency proceedings.

If the assignee has reasonable grounds to believe that the actual value of the
family home exceeds the amount fixed in Article 231, he may take action
under the provisions of Articles 247, 248 and 249.

CHAPTER 3
THE FAMILY COUNCIL (n)

Art. 252. The Court of First Instance may, upon application of any member
of the family, a relative, or a friend, appoint a family council, whose duty it
shall be to advise the court, the spouses, the parents, guardians and the
family on important family questions.

Art. 253. The family council shall be composed of five members, who shall
be relatives of the parties concerned. But the court may appoint one or two
friends of the family.

Art. 254. The family council shall elect its chairman, and shall meet at the
call of the latter or upon order of the court.

Title VIII. - PATERNITY AND FILIATION

CHAPTER 1
LEGITIMATE CHILDREN

Art. 255. Children born after one hundred and eighty days following the
celebration of the marriage, and before three hundred days following its
dissolution or the separation of the spouses shall be presumed to be
legitimate.

Against this presumption no evidence shall be admitted other than that of

the physical impossibility of the husband's having access to his wife within
the first one hundred and twenty days of three hundred which preceded the
birth of the child.

This physical impossibility may be caused:

(1) By the impotence of the husband;

(2) By the fact that the husband and wife were living separately, in
such a way that access was not possible;
 (3) By the serious illness of the husband. (108a)

Art. 256. The child shall be presumed legitimate, although the mother may
have declared against its legitimacy or may have been sentenced as an
adulteress. (109)

Art. 257. Should the wife commit adultery at or about the time of the
conception of the child, but there was no physical impossibility of access
between her and her husband as set forth in Article 255, the child is prima
facie presumed to be illegitimate if it appears highly improbable, for ethnic
reasons, that the child is that of the husband. For the purposes of this
article, the wife's adultery need not be proved in a criminal case. (n)

Art. 258. A child born within one hundred eighty days following the
celebration of the marriage is prima facie presumed to be legitimate. Such a
child is conclusively presumed to be legitimate in any of these cases:

(1) If the husband, before the marriage, knew of the pregnancy of the
wife;

(2) If he consented, being present, to the putting of his surname on

the record of birth of the child;

(3) If he expressly or tacitly recognized the child as his own. (110a)

Art. 259. If the marriage is dissolved by the death of the husband, and the
mother contracted another marriage within three hundred days following
such death, these rules shall govern:
(1) A child born before one hundred eighty days after the
solemnization of the subsequent marriage is disputably presumed to
have been conceived during the former marriage, provided it be born
within three hundred days after the death of the former husband:

(2) A child born after one hundred eighty days following the
celebration of the subsequent marriage is prima facie presumed to
have been conceived during such marriage, even though it be born
within the three hundred days after the death of the former husband.
(n)

Art. 260. If after a judgment annulling a marriage, the former wife should
believe herself to be pregnant by the former husband, she shall, within
thirty days from the time she became aware of her pregnancy, notify the
former husband or his heirs of that fact. He or his heirs may ask the court
to take measures to prevent a simulation of birth.

The same obligation shall devolve upon a widow who believes herself to
have been left pregnant by the deceased husband, or upon the wife who
believes herself to be pregnant by her husband from whom she has been
legally separated. (n)

Art. 261. There is no presumption of legitimacy or illegitimacy of a child

born after three hundred days following the dissolution of the marriage or
the separation of the spouses. Whoever alleges the legitimacy or the
illegitimacy of such child must prove his allegation. (n)

Art. 262. The heirs of the husband may impugn the legitimacy of the child
only in the following cases:

(1) If the husband should die before the expiration of the period fixed
for bringing his action;

(2) If he should die after the filing of the complaint, without having
desisted from the same;

(3) If the child was born after the death of the husband. (112)

Art. 263. The action to impugn the legitimacy of the child shall be brought
within one year from the recording of the birth in the Civil Register, if the
husband should be in the same place, or in a proper case, any of his heirs.

If he or his heirs are absent, the period shall be eighteen months if they
should reside in the Philippines; and two years if abroad. If the birth of the
child has been concealed, the term shall be counted from the discovery of
the fraud. (113a)

Art. 264. Legitimate children shall have the right:

(1) To bear the surnames of the father and of the mother;

(2) To receive support from them, from their ascendants and in a

proper case, from their brothers and sisters, in conformity with
Article 291;

(3) To the legitime and other successional rights which this Code
recognizes in their favor. (114)

CHAPTER 2
PROOF OF FILIATION OF LEGITIMATE CHILDREN

Art. 265. The filiation of legitimate children is proved by the record of birth
appearing in the Civil Register, or by an authentic document or a final
judgment. (115)
Art. 266. In the absence of the titles indicated in the preceding article, the
filiation shall be proved by the continuous possession of status of a
legitimate child. (116)

Art. 267. In the absence of a record of birth, authentic document, final

judgment or possession of status, legitimate filiation may be proved by any
other means allowed by the Rules of Court and special laws. (117a)

Art. 268. The action to claim his legitimacy may be brought by the child
during all his lifetime, and shall be transmitted to his heirs if he should die
during his minority or in a state of insanity. In these cases the heirs shall
have a period of five years within which to institute the action.

The action already commenced by the child is transmitted upon his death to
the heirs, if the proceeding has not yet lapsed. (118)

CHAPTER 3
LEGITIMATED CHILDREN

Art. 269. Only natural children can be legitimated. Children born outside
wedlock of parents who, at the time of the conception of the former, were
not disqualified by any impediment to marry each other, are natural. (119a)

Art. 270. Legitimation shall take place by the subsequent marriage between
the parents. (120a)

Art. 271. Only natural children who have been recognized by the parents
before or after the celebration of the marriage, or have been declared
natural children by final judgment, may be considered legitimated by
subsequent marriage.

If a natural child is recognized or judicially declared as natural, such

recognition or declaration shall extend to his or her brothers or sisters of
the full blood: Provided, That the consent of the latter shall be implied if
they do not impugn the recognition within four years from the time of such
recognition, or in case they are minors, within four years following the
attainment of majority. (121a)

Art. 272. Children who are legitimated by subsequent marriage shall enjoy
the same rights as legitimate children. (122)

Art. 273. Legitimation shall take effect from the time of the child's birth.
(123a)

Art. 274. The legitimation of children who died before the celebration of the
marriage shall benefit their descendants. (124)
Art. 275. Legitimation may be impugned by those who are prejudiced in
their rights, when it takes place in favor of those who do not have the legal
condition of natural children or when the requisites laid down in this
Chapter are not complied with. (128a)

CHAPTER 4
ILLEGITIMATE CHILDREN

SECTION 1. - Recognition of Natural Children

Art. 276. A natural child may be recognized by the father and mother
jointly, or by only one of them. (129)

Art. 277. In case the recognition is made by only one of the parents, it shall
be presumed that the child is natural, if the parent recognizing it had legal
capacity to contract marriage at the time of the conception. (130)

Art. 278. Recognition shall be made in the record of birth, a will, a

statement before a court of record, or in any authentic writing. (131a)

Art. 279. A minor who may not contract marriage without parental consent
cannot acknowledge a natural child, unless the parent or guardian
approves the acknowledgment or unless the recognition is made in a will. (n)

Art. 280. When the father or the mother makes the recognition separately,
he or she shall not reveal the name of the person with whom he or she had
the child; neither shall he or she state any circumstance whereby the other
parent may be identified. (132a)

Art. 281. A child who is of age cannot be recognized without his consent.

When the recognition of a minor does not take place in a record of birth or
in a will, judicial approval shall be necessary.

A minor can in any case impugn the recognition within four years following
the attainment of his majority. (133a)

Art. 282. A recognized natural child has the right:

(1) To bear the surname of the parent recognizing him:

(2) To receive support from such parent, in conformity with article

291;

(3) To receive, in a proper case, the hereditary portion which is

determined in this Code. (134)
Art. 283. In any of the following cases, the father is obliged to recognize the
child as his natural child:
(1) In cases of rape, abduction or seduction, when the period of the
offense coincides more or less with that of the conception;

(2) When the child is in continuous possession of status of a child of

the alleged father by the direct acts of the latter or of his family;

(3) When the child was conceived during the time when the mother
cohabited with the supposed father;

(4) When the child has in his favor any evidence or proof that the
defendant is his father. (n)

Art. 284. The mother is obliged to recognize her natural child:

(1) In any of the cases referred to in the preceding article, as between
the child and the mother;

(2) When the birth and the identity of the child are clearly proved.
(136a)

Art. 285. The action for the recognition of natural children may be brought
only during the lifetime of the presumed parents, except in the following
cases:
(1) If the father or mother died during the minority of the child, in
which case the latter may file the action before the expiration of four
years from the attainment of his majority;

(2) If after the death of the father or of the mother a document should
appear of which nothing had been heard and in which either or both
parents recognize the child.

In this case, the action must be commenced within four years from the
finding of the document. (137a)

Art. 286. The recognition made in favor of a child who does not possess all
the conditions stated in Article 269, or in which the requirements of the law
have not been fulfilled, may be impugned by those who are prejudiced by
such recognition. (137)

SECTION 2. - Other Illegitimate Children

Art. 287. Illegitimate children other than natural in accordance with Article
269 and other than natural children by legal fiction are entitled to support
and such successional rights as are granted in this Code. (n)
Art. 288. Minor children mentioned in the preceding article are under the
parental authority of the mother. (n)

Art. 289. Investigation of the paternity or maternity of children mentioned

in the two preceding articles is permitted under the circumstances specified
in Articles 283 and 284. (n)

Title IX. - SUPPORT

Art. 290. Support is everything that is indispensable for sustenance,

dwelling, clothing and medical attendance, according to the social position
of the family.

Support also includes the education of the person entitled to be supported

until he completes his education or training for some profession, trade or
vocation, even beyond the age of majority. (124a)

Art. 291. The following are obliged to support each other to the whole extent
set forth in the preceding article:

(1) The spouses;

(2) Legitimate ascendants and descendants;

(3) Parents and acknowledged natural children and the legitimate or

illegitimate descendants of the latter;

(4) Parents and natural children by legal fiction and the legitimate
and illegitimate descendants of the latter;

(5) Parents and illegitimate children who are not natural.

Brothers and sisters owe their legitimate and natural brothers and sisters,
although they are only of the half-blood, the necessaries for life, when by a
physical or mental defect, or any other cause not imputable to the
recipients, the latter cannot secure their subsistence. This assistance
includes, in a proper case, expenses necessary for elementary education
and for professional or vocational training. (143a)

Art. 292. During the proceedings for legal separation, or for annulment of
marriage, the spouses and children, shall be supported from the conjugal
partnership property. After the final judgment of legal separation, or of
annulment of marriage, the obligation of mutual support between the
spouses ceases. However, in case of legal separation, the court may order
that the guilty spouse shall give support to the innocent one, the judgment
specifying the terms of such order. (n)
Art. 293. In an action for legal separation or annulment of marriage,
attorney's fees and expenses for litigation shall be charged to the conjugal
partnership property, unless the action fails. (n)

Art. 294. The claim for support, when proper and two or more persons are
obliged to give it, shall be made in the following order:

(1) From the spouse;

(2) From the descendants of the nearest degree;

(3) From the ascendants, also of the nearest degree;

(4) From the brothers and sisters.

Among descendants and ascendants the order in which they are called to
the intestate succession of the person who has a right to claim support shall
be observed. (144)

Art. 295. When the obligation to give support falls upon two or more
persons, the payment of the same shall be divided between them in
proportion to the resources of each.

However, in case of urgent need and by special circumstances, the judge

may order only one of them to furnish the support provisionally, without
prejudice to his right to claim from the other obligors the share due from
them.

When two or more recipients at the same time claim support from one and
the same person legally obliged to give it, and the latter should not have
sufficient means to satisfy all, the order established in the preceding article
shall be followed, unless the concurrent obligees should be the spouse and a
child subject to parental authority, in which case the latter shall be
preferred. (145)

Art. 296. The amount of support, in the cases referred to in the five
numbers of article 291, shall be in proportion to the resources or means of
the giver and to the necessities of the recipient. (146a)

Art. 297. Support in the cases referred to in the preceding article shall be
reduced or increased proportionately, according to the reduction or
increase of the needs of the recipient and the resources of the person
obliged to furnish the same. (147)

Art. 298. The obligation to give support shall be demandable from the time
the person who has a right to receive the same needs it for maintenance,
but it shall not be paid except from the date it is extrajudicially demanded.
Payment shall be made monthly in advance, and when the recipient dies,
his heirs shall not be obliged to return what he has received in advance. (148a)

Art. 299. The person obliged to give support may, at his option, fulfill his
obligation either by paying the allowance fixed, or by receiving and
maintaining in his house the person who has a right to receive support. The
latter alternative cannot be availed of in case there is a moral or legal
obstacle thereto. (149a)

Art. 300. The obligation to furnish support ceases upon the death of the
obligor, even if he may be bound to give it in compliance with a final
judgment. (150)

Art. 301. The right to receive support cannot be renounced; nor can it be
transmitted to a third person. Neither can it be compensated with what the
recipient owes the obligor.

However, support in arrears may be compensated and renounced, and the

right to demand the same may be transmitted by onerous or gratuitous title.
(151)

Art. 302. Neither the right to receive legal support nor any money or
property obtained as such support or any pension or gratuity from the
government is subject to attachment or execution. (n)

Art. 303. The obligation to give support shall also cease:

(1) Upon the death of the recipient;

(2) When the resources of the obligor have been reduced to the point
where he cannot give the support without neglecting his own needs
and those of his family;

(3) When the recipient may engage in a trade, profession, or industry,

or has obtained work, or has improved his fortune in such a way that
he no longer needs the allowance for his subsistence;

(4) When the recipient, be he a forced heir or not, has committed

some act which gives rise to disinheritance;

(5) When the recipient is a descendant, brother or sister of the obligor

and the need for support is caused by his or her bad conduct or by the
lack of application to work, so long as this cause subsists. (152a)

Art. 304. The foregoing provisions shall be applicable to other cases where,
in virtue of this Code or of any other law, by will, or by stipulation there is a
right to receive support, save what is stipulated, ordered by the testator or
provided by law for the special case. (153a)

Title X. - FUNERALS (n)

Art. 305. The duty and the right to make arrangements for the funeral of a
relative shall be in accordance with the order established for support,
under Article 294. In case of descendants of the same degree, or of brothers
and sisters, the oldest shall be preferred. In case of ascendants, the paternal
shall have a better right.

Art. 306. Every funeral shall be in keeping with the social position of the
deceased.

Art. 307. The funeral shall be in accordance with the expressed wishes of
the deceased. In the absence of such expression, his religious beliefs or
affiliation shall determine the funeral rites. In case of doubt, the form of the
funeral shall be decided upon by the person obliged to make arrangements
for the same, after consulting the other members of the family.

Art. 308. No human remains shall be retained, interred, disposed of or

exhumed without the consent of the persons mentioned in articles 294 and
305.

Art. 309. Any person who shows disrespect to the dead, or wrongfully
interferes with a funeral shall be liable to the family of the deceased for
damages, material and moral.

Art. 310. The construction of a tombstone or mausoleum shall be deemed a

part of the funeral expenses, and shall be chargeable to the conjugal
partnership property, if the deceased is one of the spouses.

Title XI. - PARENTAL AUTHORITY

CHAPTER 1
GENERAL PROVISIONS

Art. 311. The father and mother jointly exercise parental authority over
their legitimate children who are not emancipated. In case of disagreement,
the father's decision shall prevail, unless there is a judicial order to the
contrary.

Children are obliged to obey their parents so long as they are under
parental power, and to observe respect and reverence toward them always.

Recognized natural and adopted children who are under the age of majority
are under the parental authority of the father or mother recognizing or
adopting them, and are under the same obligation stated in the preceding
paragraph.

Natural children by legal fiction are under the joint authority of the father
and mother, as provided in the first paragraph of this article. (154a)

Art. 312. Grandparents shall be consulted by all members of the family on

all important family questions. (n)

Art. 313. Parental authority cannot be renounced or transferred, except in

cases of guardianship or adoption approved by the courts, or emancipation
by concession.

The courts may, in cases specified by law, deprive parents of their

authority. (n)

Art. 314. A foundling shall be under the parental authority of the person or
institution that has reared the same. (n)

Art. 315. No descendant can be compelled, in a criminal case, to testify

against his parents and ascendants. (n)

CHAPTER 2
EFFECT OF PARENTAL AUTHORITY
UPON THE PERSONS OF THE CHILDREN

Art. 316. The father and the mother have, with respect to their
unemancipated children:
(1) The duty to support them, to have them in their company, educate
and instruct them in keeping with their means and to represent them
in all actions which may redound to their benefit;

(2) The power to correct them and to punish them moderately. (155)

Art. 317. The courts may appoint a guardian of the child' s property, or a
guardian ad litem when the best interest of the child so requires. (n)

Art. 318. Upon cause being shown by the parents, the local mayor may aid
them in the exercise of their authority over the child. If the child is to be
kept in a children's home or similar institution for not more than one
month, an order of the justice of the peace or municipal judge shall be
necessary, after due hearing, where the child shall be heard. For his
purpose, the court may appoint a guardian ad litem. (156a)

Art. 319. The father and the mother shall satisfy the support for the
detained child; but they shall not have any intervention in the regime of the
institution where the child is detained. They may lift the detention when
they deem it opportune, with the approval of the court. (158a)

CHAPTER 3
EFFECT OF PARENTAL AUTHORITY
ON THE PROPERTY OF THE CHILDREN

Art. 320. The father, or in his absence the mother, is the legal administrator
of the property pertaining to the child under parental authority. If the
property is worth more than two thousand pesos, the father or mother shall
give a bond subject to the approval of the Court of First Instance. (159a)

Art. 321. The property which the unemancipated child has acquired or may
acquire with his work or industry, or by any lucrative title, belongs to the
child in ownership, and in usufruct to the father or mother under whom he
is under parental authority and in whose company he lives; but if the child,
with the parent's consent, should live independently from them, he shall be
considered as emancipated for all purposes relative to said property, and he
shall have over it dominion, usufruct and administration. (160)

Art. 322. A child who earns money or acquires property with his own work
or industry shall be entitled to a reasonable allowance from the earnings, in
addition to the expenses made by the parents for his support and education.
(n)

Art. 323. The fruits and interest of the child's property referred to in article
321 shall be applied first to the expenses for the support and education of
the child. After they have been fully met, the debts of the conjugal
partnership which have redounded to the benefit of the family may be paid
from said fruits and interest. (n)

Art. 324. Whatever the child may acquire with the capital or property of the
parents belongs to the latter in ownership and in usufruct. But if the
parents should expressly grant him all or part of the profits that he may
obtain, such profits shall not be charged against his legitime. (161)

Art. 325. The property or income donated, bequeathed or devised to the

unemancipated child for the expenses of his education and instruction shall
pertain to him in ownership and usufruct; but the father or mother shall
administer the same, if in the donation or testamentary provision the
contrary has not been stated. (162)

Art. 326. When the property of the child is worth more than two thousand
pesos, the father or mother shall be considered a guardian of the child's
property, subject to the duties and obligations of guardians under the Rules
of Court. (n)

CHAPTER 4
EXTINGUISHMENT OF PARENTAL AUTHORITY

Art. 327. Parental authority terminates:

(1) Upon the death of the parents or of the child;

(2) Upon emancipation;

(3) Upon adoption of the child;

(4) Upon the appointment of a general guardian. (167a)

Art. 328. The mother who contracts a subsequent marriage loses the
parental authority over her children, unless the deceased husband, father
of the latter, has expressly provided in his will that his widow might marry
again, and has ordered that in such case she should keep and exercise
parental authority over their children.

The court may also appoint a guardian of the child's property in case the
father should contract a subsequent marriage. (168a)

Art. 329. When the mother of an illegitimate child marries a man other than
its father, the court may appoint a guardian for the child. (n)

Art. 330. The father and in a proper case the mother, shall lose authority
over their children:

(1) When by final judgment in a criminal case the penalty of

deprivation of said authority is imposed upon him or her;

(2) When by a final judgment in legal separation proceedings such

loss of authority is declared. (169a)

Art. 331. Parental authority is suspended by the incapacity or absence of the

father, or in a proper case of the mother, judicially declared, and also by
civil interdiction. (170)

Art. 332. The courts may deprive the parents of their authority or suspend
the exercise of the same if they should treat their children with excessive
harshness or should give them corrupting orders, counsels, or examples, or
should make them beg or abandon them. In these cases, the courts may also
deprive the parents in whole or in part, of the usufruct over the child's
property, or adopt such measures as they may deem advisable in the
interest of the child. (171a)
Art. 333. If the widowed mother who has contracted a subsequent marriage
should again become a widow, she shall recover from this moment her
parental authority over all her unemancipated children. (172)

CHAPTER 5
ADOPTION

Art. 334. Every person of age, who is in full possession of his civil rights,
may adopt. (173a)

Art. 335. The following cannot adopt:

(1) Those who have legitimate, legitimated, acknowledged natural

children, or natural children by legal fiction;

(2) The guardian, with respect to the ward, before the final approval
of his accounts;

(3) A married person, without the consent of the other spouse;

(4) Non-resident aliens;

(5) Resident aliens with whose government the Republic of the

Philippines has broken diplomatic relations;

(6) Any person who has been convicted of a crime involving moral
turpitude, when the penalty imposed was six months' imprisonment
or more. (174a)

Art. 336. The husband and wife may jointly adopt. Parental authority shall,
in such case, be exercised as if the child were their own by nature. (n)

Art. 337. Any person, even if of age, may be adopted, provided the adopter is
sixteen years older. (173a)

Art. 338. The following may be adopted:

(1) The natural child, by the natural father or mother;

(2) Other illegitimate children, by the father or mother;

(3) A step-child, by the step-father or step-mother. (n)

Art. 339. The following cannot be adopted:

(1) A married person, without the written consent of the other spouse;
 (2) An alien with whose government the Republic of the Philippines
has broken diplomatic relations;

(3) A person who has already been adopted. (n)

Art. 340. The written consent of the following to the adoption shall be
necessary:
(1) The person to be adopted, if fourteen years of age or over;

(2) The parents, guardian or person in charge of the person to be

adopted. (n)

Art. 341. The adoption shall:

(1) Give to the adopted person the same rights and duties as if he were
a legitimate child of the adopter:

(2) Dissolve the authority vested in the parents by nature;

(3) Make the adopted person a legal heir of the adopter;

(4) Entitle the adopted person to use the adopter's surname. (n)

Art. 342. The adopter shall not be a legal heir of the adopted person, whose
parents by nature shall inherit from him. (177a)

Art. 343. If the adopter is survived by legitimate parents or ascendants and

by an adopted person, the latter shall not have more successional rights
than an acknowledged natural child. (n)

Art. 344. The adopter may donate property, by an act inter vivos or by will,
to the adopted person, who shall acquire ownership thereof. (n)

Art. 345. The proceedings for adoption shall be governed by the Rules of
Court insofar as they are not in conflict with this Code. (n)

Art. 346. The adoption shall be recorded in the local civil register. (179a)

Art. 347. A minor or other incapacitated person may, through a guardian ad

litem, ask for the rescission of the adoption on the same grounds that cause
the loss of parental authority. (n)

Art. 348. The adopter may petition the court for revocation of the adoption
in any of these cases:

(1) If the adopted person has attempted against the life of the adopter;
 (2) When the adopted minor has abandoned the home of the adopter
for more than three years;

(3) When by other acts the adopted person has definitely repudiated
the adoption. (n)

CHAPTER 6
SUBSTITUTE PARENTAL AUTHORITY (n)

Art. 349. The following persons shall exercise substitute parental authority:
(1) Guardians;

(2) Teachers and professors;

(3) Heads of children's homes, orphanages, and similar institutions;

(4) Directors of trade establishments, with regard to apprentices;

(5) Grandparents;

(6) The oldest brother or sister.

Art. 350. The persons named in the preceding article shall exercise
reasonable supervision over the conduct of the child.

Art. 351. A general guardian or a guardian over the person shall have the
same authority over the ward's person as the parents. With regard to the
child's property, the Rules of Court on guardianship shall govern.

Art. 352. The relations between teacher and pupil, professor and student,
are fixed by government regulations and those of each school or institution.
In no case shall corporal punishment be countenanced. The teacher or
professor shall cultivate the best potentialities of the heart and mind of the
pupil or student.

Art. 353. Apprentices shall be treated humanely. No corporal punishment

against the apprentice shall be permitted.

Art. 354. Grandparents and in their default the oldest brother or sister shall
exercise parental authority in case of death or absence of the child's
parents. If the parents are living, or if the child is under guardianship, the
grandparents may give advice and counsel to the child, to the parents or to
the guardian.

Art. 355. Substitute parental authority shall be exercised by the

grandparents in the following order:
 (1) Paternal grandparents;

(2) Maternal grandparents.

Title XII. - CARE AND EDUCATION OF CHILDREN

Art. 356. Every child:

(1) Is entitled to parental care;

(2) Shall receive at least elementary education;

(3) Shall be given moral and civic training by the parents or guardian;

(4) Has a right to live in an atmosphere conducive to his physical,

moral and intellectual development.

Art. 357. Every child shall:

(1) Obey and honor his parents or guardian;

(2) Respect his grandparents, old relatives, and persons holding

substitute parental authority;

(3) Exert his utmost for his education and training;

(4) Cooperate with the family in all matters that make for the good of
the same.

Art. 358. Every parent and every person holding substitute parental
authority shall see to it that the rights of the child are respected and his
duties complied with, and shall particularly, by precept and example, imbue
the child with highmindedness, love of country, veneration for the national
heroes, fidelity to democracy as a way of life, and attachment to the ideal of
permanent world peace.

Art. 359. The government promotes the full growth of the faculties of every
child. For this purpose, the government will establish, whenever possible:

(1) Schools in every barrio, municipality and city where optional

religious instruction shall be taught as part of the curriculum at the
option of the parent or guardian;

(2) Puericulture and similar centers;

(3) Councils for the Protection of Children; and

(4) Juvenile courts.

Art. 360. The Council for the Protection of Children shall look after the
welfare of children in the municipality. It shall, among other functions:
(1) Foster the education of every child in the municipality;

(2) Encourage the cultivation of the duties of parents;

(3) Protect and assist abandoned or mistreated children, and

orphans;

(4) Take steps to prevent juvenile delinquency;

(5) Adopt measures for the health of children;

(6) Promote the opening and maintenance of playgrounds;

(7) Coordinate the activities of organizations devoted to the welfare of

children, and secure their cooperation.

Art. 361. Juvenile courts will be established, as far as practicable, in every

chartered city or large municipality.

Art. 362. Whenever a child is found delinquent by any court, the father,
mother, or guardian may in a proper case be judicially admonished.

Art. 363. In all questions on the care, custody, education and property of
children the latter's welfare shall be paramount. No mother shall be
separated from her child under seven years of age, unless the court finds
compelling reasons for such measure.

Title XIII. - USE OF SURNAMES (n)

Art. 364. Legitimate and legitimated children shall principally use the
surname of the father.

Art. 365. An adopted child shall bear the surname of the adopter.

Art. 366. A natural child acknowledged by both parents shall principally use
the surname of the father. If recognized by only one of the parents, a
natural child shall employ the surname of the recognizing parent.

Art. 367. Natural children by legal fiction shall principally employ the
surname of the father.

Art. 368. Illegitimate children referred to in Article 287 shall bear the
surname of the mother.
Art. 369. Children conceived before the decree annulling a voidable
marriage shall principally use the surname of the father.

Art. 370. A married woman may use:

(1) Her maiden first name and surname and add her husband's
surname, or

(2) Her maiden first name and her husband's surname or

(3) Her husband's full name, but prefixing a word indicating that she
is his wife, such as "Mrs."

Art. 371. In case of annulment of marriage, and the wife is the guilty party,
she shall resume her maiden name and surname. If she is the innocent
spouse, she may resume her maiden name and surname. However, she may
choose to continue employing her former husband's surname, unless:
(1) The court decrees otherwise, or

(2) She or the former husband is married again to another person.

Art. 372. When legal separation has been granted, the wife shall continue
using her name and surname employed before the legal separation.

Art. 373. A widow may use the deceased husband's surname as though he
were still living, in accordance with Article 370.

Art. 374. In case of identity of names and surnames, the younger person
shall be obliged to use such additional name or surname as will avoid
confusion.

Art. 375. In case of identity of names and surnames between ascendants

and descendants, the word "Junior" can be used only by a son. Grandsons
and other direct male descendants shall either:

(1) Add a middle name or the mother's surname, or

(2) Add the Roman Numerals II, III, and so on.

Art. 376. No person can change his name or surname without judicial
authority.

Art. 377. Usurpation of a name and surname may be the subject of an action
for damages and other relief.

Art. 378. The unauthorized or unlawful use of another person's surname

gives a right of action to the latter.
Art. 379. The employment of pen names or stage names is permitted,
provided it is done in good faith and there is no injury to third persons. Pen
names and stage names cannot be usurped.

Art. 380. Except as provided in the preceding article, no person shall use
different names and surnames.

Title XIV. - ABSENCE

CHAPTER 1
PROVISIONAL MEASURES IN CASE OF ABSENCE

Art. 381. When a person disappears from his domicile, his whereabouts
being unknown, and without leaving an agent to administer his property,
the judge, at the instance of an interested party, a relative, or a friend, may
appoint a person to represent him in all that may be necessary.

This same rule shall be observed when under similar circumstances the
power conferred by the absentee has expired. (181a)

Art. 382. The appointment referred to in the preceding article having been
made, the judge shall take the necessary measures to safeguard the rights
and interests of the absentee and shall specify the powers, obligations and
remuneration of his representative, regulating them, according to the
circumstances, by the rules concerning guardians. (182)

Art. 383. In the appointment of a representative, the spouse present shall

be preferred when there is no legal separation.

If the absentee left no spouse, or if the spouse present is a minor, any

competent person may be appointed by the court. (183a)

CHAPTER 2
DECLARATION OF ABSENCE

Art. 384. Two years having elapsed without any news about the absentee or
since the receipt of the last news, and five years in case the absentee has left
a person in charge of the administration of his property, his absence may be
declared. (184)

Art. 385. The following may ask for the declaration of absence:

(1) The spouse present;

 (2) The heirs instituted in a will, who may present an authentic copy
of the same;

(3) The relatives who may succeed by the law of intestacy;

(4) Those who may have over the property of the absentee some right
subordinated to the condition of his death. (185)

Art. 386. The judicial declaration of absence shall not take effect until six
months after its publication in a newspaper of general circulation. (186a)

CHAPTER 3
ADMINISTRATION OF THE PROPERTY OF THE ABSENTEE

Art. 387. An administrator of the absentee's property shall be appointed in

accordance with Article 383. (187a)

Art. 388. The wife who is appointed as an administratrix of the husband's

property cannot alienate or encumber the husband's property, or that of
the conjugal partnership, without judicial authority. (188a)

Art. 389. The administration shall cease in any of the following cases:

(1) When the absentee appears personally or by means of an agent;

(2) When the death of the absentee is proved and his testate or
intestate heirs appear;

(3) When a third person appears, showing by a proper document that

he has acquired the absentee's property by purchase or other title.

In these cases the administrator shall cease in the performance of his office,
and the property shall be at the disposal of those who may have a right
thereto. (190)

CHAPTER 4
PRESUMPTION OF DEATH

Art. 390. After an absence of seven years, it being unknown whether or not
the absentee still lives, he shall be presumed dead for all purposes, except
for those of succession.

The absentee shall not be presumed dead for the purpose of opening his
succession till after an absence of ten years. If he disappeared after the age
of seventy-five years, an absence of five years shall be sufficient in order
that his succession may be opened. (n)
Art. 391. The following shall be presumed dead for all purposes, including
the division of the estate among the heirs:

(1) A person on board a vessel lost during a sea voyage, or an

aeroplane which is missing, who has not been heard of for four years
since the loss of the vessel or aeroplane;

(2) A person in the armed forces who has taken part in war, and has
been missing for four years;

(3) A person who has been in danger of death under other

circumstances and his existence has not been known for four years. (n)

Art. 392. If the absentee appears, or without appearing his existence is

proved, he shall recover his property in the condition in which it may be
found, and the price of any property that may have been alienated or the
property acquired therewith; but he cannot claim either fruits or rents. (194)

CHAPTER 5
EFFECT OF ABSENCE UPON THE
CONTINGENT RIGHTS OF THE ABSENTEE

Art. 393. Whoever claims a right pertaining to a person whose existence is

not recognized must prove that he was living at the time his existence was
necessary in order to acquire said right. (195)

Art. 394. Without prejudice to the provision of the preceding article, upon
the opening of a succession to which an absentee is called, his share shall
accrue to his co-heirs, unless he has heirs, assigns, or a representative.
They shall all, as the case may be, make an inventory of the property. (196a)

Art. 395. The provisions of the preceding article are understood to be

without prejudice to the action of petition for inheritance or other rights
which are vested in the absentee, his representatives or successors in
interest. These rights shall not be extinguished save by lapse of time fixed
for prescription. In the record that is made in the Registry of the real estate
which accrues to the coheirs, the circumstance of its being subject to the
provisions of this article shall be stated. (197)

Art. 396. Those who may have entered upon the inheritance shall
appropriate the fruits received in good faith so long as the absentee does
not appear, or while his representatives or successors in interest do not
bring the proper actions. (198)

Title XV. - EMANCIPATION AND AGE OF MAJORITY

 CHAPTER 1
EMANCIPATION

Art. 397. Emancipation takes place:

(1) By the marriage of the minor;

(2) By the attainment of majority;

(3) By the concession of the father or of the mother who exercise

parental authority. (314)

Art. 398. Emancipation treated of in No. 3 of the preceding article shall be

effected in a public instrument which shall be recorded in the Civil Register,
and unless so recorded, it shall take no effect against third persons. (316a)

Art. 399. Emancipation by marriage or by voluntary concession shall

terminate parental authority over the child's person. It shall enable the
minor to administer his property as though he were of age, but he cannot
borrow money or alienate or encumber real property without the consent
of his father or mother, or guardian. He can sue and be sued in court only
with the assistance of his father, mother or guardian. (317a)

Art. 400. In order that emancipation by concession of the father or of the

mother may take place, it is required that the minor be eighteen years of
age, and that he give his consent thereto. (318)

Art. 401. Emancipation is final or irrevocable. (319a)

CHAPTER 2
AGE OF MAJORITY

Art. 402. Majority commences upon the attainment of the age of twenty-one
years.

The person who has reached majority is qualified for all acts of civil life,
save the exceptions established by this Code in special cases. (320a)

Art. 403. Notwithstanding the provisions of the preceding article, a

daughter above twenty-one but below twenty-three years of age cannot
leave the parental home without the consent of the father or mother in
whose company she lives, except to become a wife, or when she exercises a
profession or calling, or when the father or mother has contracted a
subsequent marriage. (321a)
Art. 404. An orphan who is minor may, at the instance of any relative or
other person, obtain emancipation by concession upon an order of the
Court of First Instance. (322a)

Art. 405. For the concession and approval referred to in the preceding
article it is necessary:

(1) That the minor be eighteen years of age;

(2) That he consent thereto; and

(3) That the concession be deemed convenient for the minor.

The concession shall be recorded in the Civil Register. (323a)

Art. 406. The provisions of Article 399 are applicable to an orphan who has
been emancipated according to Article 404. The court will give the
necessary approval with respect to the contracts mentioned in Article 399.
In litigations, a guardian ad litem for the minor shall be appointed by the
court. (324a)

Title XVI. - CIVIL REGISTER

Art. 407. Acts, events and judicial decrees concerning the civil status of
persons shall be recorded in the civil register. (325a)

Art. 408. The following shall be entered in the civil register:

(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;
(6) judgments declaring marriages void from the beginning;
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or (12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name. (326a)
Art. 409. In cases of legal separation, adoption, naturalization and other
judicial orders mentioned in the preceding article, it shall be the duty of the
clerk of the court which issued the decree to ascertain whether the same
has been registered, and if this has not been done, to send a copy of said
decree to the civil registry of the city or municipality where the court is
functioning. (n)

Art. 410. The books making up the civil register and all documents relating
thereto shall be considered public documents and shall be prima facie
evidence of the facts therein contained. (n)

Art. 411. Every civil registrar shall be civilly responsible for any
unauthorized alteration made in any civil register, to any person suffering
damage thereby. However, the civil registrar may exempt himself from such
liability if he proves that he has taken every reasonable precaution to
prevent the unlawful alteration. (n)

Art. 412. No entry in a civil register shall be changed or corrected, without a

judicial order. (n)

Art. 413. All other matters pertaining to the registration of civil status shall
be governed by special laws. (n)

BOOK II

PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

Title I. - CLASSIFICATION OF PROPERTY

PRELIMINARY PROVISIONS

Art. 414. All things which are or may be the object of appropriation are
considered either:
(1) Immovable or real property; or

(2) Movable or personal property. (333)

CHAPTER 1
IMMOVABLE PROPERTY

Art. 415. The following are immovable property:

(1) Land, buildings, roads and constructions of all kinds adhered to
the soil;

(2) Trees, plants, and growing fruits, while they are attached to the
land or form an integral part of an immovable;
 (3) Everything attached to an immovable in a fixed manner, in such a
way that it cannot be separated therefrom without breaking the
material or deterioration of the object;

(4) Statues, reliefs, paintings or other objects for use or

ornamentation, placed in buildings or on lands by the owner of the
immovable in such a manner that it reveals the intention to attach
them permanently to the tenements;

(5) Machinery, receptacles, instruments or implements intended by

the owner of the tenement for an industry or works which may be
carried on in a building or on a piece of land, and which tend directly
to meet the needs of the said industry or works;

(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding

places of similar nature, in case their owner has placed them or
preserves them with the intention to have them permanently attached
to the land, and forming a permanent part of it; the animals in these
places are included;

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while the matter thereof forms
part of the bed, and waters either running or stagnant;

(9) Docks and structures which, though floating, are intended by their
nature and object to remain at a fixed place on a river, lake, or coast;

(10) Contracts for public works, and servitudes and other real rights
over immovable property. (334a)

CHAPTER 2
MOVABLE PROPERTY

Art. 416. The following things are deemed to be personal property:

(1) Those movables susceptible of appropriation which are not
included in the preceding article;

(2) Real property which by any special provision of law is considered

as personal property;

(3) Forces of nature which are brought under control by science; and

(4) In general, all things which can be transported from place to place
without impairment of the real property to which they are fixed. (335a)
Art. 417. The following are also considered as personal property:
(1) Obligations and actions which have for their object movables or
demandable sums; and

(2) Shares of stock of agricultural, commercial and industrial entities,

although they may have real estate. (336a)

Art. 418. Movable property is either consumable or nonconsumable. To the

first class belong those movables which cannot be used in a manner
appropriate to their nature without their being consumed; to the second
class belong all the others. (337)

CHAPTER 3
PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELONGS

Art. 419. Property is either of public dominion or of private ownership. (338)

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the
national wealth. (339a)

Art. 421. All other property of the State, which is not of the character stated
in the preceding article, is patrimonial property. (340a)

Art. 422. Property of public dominion, when no longer intended for public
use or for public service, shall form part of the patrimonial property of the
State. (341a)

Art. 423. The property of provinces, cities, and municipalities is divided

into property for public use and patrimonial property. (343)

Art. 424. Property for public use, in the provinces, cities, and
municipalities, consist of the provincial roads, city streets, municipal
streets, the squares, fountains, public waters, promenades, and public
works for public service paid for by said provinces, cities, or municipalities.

All other property possessed by any of them is patrimonial and shall be

governed by this Code, without prejudice to the provisions of special laws.
(344a)
Art. 425. Property of private ownership, besides the patrimonial property
of the State, provinces, cities, and municipalities, consists of all property
belonging to private persons, either individually or collectively. (345a)

PROVISIONS COMMON TO THE THREE PRECEDING CHAPTERS

Art. 426. Whenever by provision of the law, or an individual declaration,

the expression "immovable things or property," or "movable things or
property," is used, it shall be deemed to include, respectively, the things
enumerated in Chapter 1 and Chapter 2.

Whenever the word "muebles," or "furniture," is used alone, it shall not be

deemed to include money, credits, commercial securities, stocks and bonds,
jewelry, scientific or artistic collections, books, medals, arms, clothing,
horses or carriages and their accessories, grains, liquids and merchandise,
or other things which do not have as their principal object the furnishing or
ornamenting of a building, except where from the context of the law, or the
individual declaration, the contrary clearly appears. (346a)

Title II. - OWNERSHIP

CHAPTER 1
OWNERSHIP IN GENERAL

Art. 427. Ownership may be exercised over things or rights. (n)

Art. 428. The owner has the right to enjoy and dispose of a thing, without
other limitations than those established by law.

The owner has also a right of action against the holder and possessor of the
thing in order to recover it. (348a)

Art. 429. The owner or lawful possessor of a thing has the right to exclude
any person from the enjoyment and disposal thereof. For this purpose, he
may use such force as may be reasonably necessary to repel or prevent an
actual or threatened unlawful physical invasion or usurpation of his
property. (n)

Art. 430. Every owner may enclose or fence his land or tenements by means
of walls, ditches, live or dead hedges, or by any other means without
detriment to servitudes constituted thereon. (388)

Art. 431. The owner of a thing cannot make use thereof in such manner as to
injure the rights of a third person. (n)
Art. 432. The owner of a thing has no right to prohibit the interference of
another with the same, if the interference is necessary to avert an imminent
danger and the threatened damage, compared to the damage arising to the
owner from the interference, is much greater. The owner may demand
from the person benefited indemnity for the damage to him. (n)

Art. 433. Actual possession under claim of ownership raises disputable

presumption of ownership. The true owner must resort to judicial process
for the recovery of the property. (n)

Art. 434. In an action to recover, the property must be identified, and the
plaintiff must rely on the strength of his title and not on the weakness of the
defendant's claim. (n)

Art. 435. No person shall be deprived of his property except by competent

authority and for public use and always upon payment of just
compensation.

Should this requirement be not first complied with, the courts shall protect
and, in a proper case, restore the owner in his possession. (349a)

Art. 436. When any property is condemned or seized by competent

authority in the interest of health, safety or security, the owner thereof
shall not be entitled to compensation, unless he can show that such
condemnation or seizure is unjustified. (n)

Art. 437. The owner of a parcel of land is the owner of its surface and of
everything under it, and he can construct thereon any works or make any
plantations and excavations which he may deem proper, without detriment
to servitudes and subject to special laws and ordinances. He cannot
complain of the reasonable requirements of aerial navigation. (350a)

Art. 438. Hidden treasure belongs to the owner of the land, building, or
other property on which it is found.

Nevertheless, when the discovery is made on the property of another, or of

the State or any of its subdivisions, and by chance, one-half thereof shall be
allowed to the finder. If the finder is a trespasser, he shall not be entitled to
any share of the treasure.

If the things found be of interest to science of the arts, the State may acquire
them at their just price, which shall be divided in conformity with the rule
stated. (351a)

Art. 439. By treasure is understood, for legal purposes, any hidden and
unknown deposit of money, jewelry, or other precious objects, the lawful
ownership of which does not appear. (352)

CHAPTER 3
RIGHT OF ACCESSION

GENERAL PROVISIONS

Art. 440. The ownership of property gives the right by accession to

everything which is produced thereby, or which is incorporated or attached
thereto, either naturally or artificially. (353)

SECTION 1. - Right of Accession with Respect to

What is Produced by Property

Art. 441. To the owner belongs:

(1) The natural fruits;

(2) The industrial fruits;

(3) The civil fruits. (354)

Art. 442. Natural fruits are the spontaneous products of the soil, and the
young and other products of animals.

Industrial fruits are those produced by lands of any kind through

cultivation or labor.

Civil fruits are the rents of buildings, the price of leases of lands and other
property and the amount of perpetual or life annuities or other similar
income. (355a)

Art. 443. He who receives the fruits has the obligation to pay the expenses
made by a third person in their production, gathering, and preservation.
(356)

Art. 444. Only such as are manifest or born are considered as natural or
industrial fruits.

With respect to animals, it is sufficient that they are in the womb of the
mother, although unborn. (357)

SECTION 2. - Right of Accession with Respect

to Immovable Property

Art. 445. Whatever is built, planted or sown on the land of another and the
improvements or repairs made thereon, belong to the owner of the land,
subject to the provisions of the following articles. (358)

Art. 446. All works, sowing, and planting are presumed made by the owner
and at his expense, unless the contrary is proved. (359)

Art. 447. The owner of the land who makes thereon, personally or through
another, plantings, constructions or works with the materials of another,
shall pay their value; and, if he acted in bad faith, he shall also be obliged to
the reparation of damages. The owner of the materials shall have the right
to remove them only in case he can do so without injury to the work
constructed, or without the plantings, constructions or works being
destroyed. However, if the landowner acted in bad faith, the owner of the
materials may remove them in any event, with a right to be indemnified for
damages. (360a)

Art. 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the
works, sowing or planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall agree upon
the terms of the lease and in case of disagreement, the court shall fix the
terms thereof. (361a)

Art. 449. He who builds, plants or sows in bad faith on the land of another,
loses what is built, planted or sown without right to indemnity. (362)

Art. 450. The owner of the land on which anything has been built, planted
or sown in bad faith may demand the demolition of the work, or that the
planting or sowing be removed, in order to replace things in their former
condition at the expense of the person who built, planted or sowed; or he
may compel the builder or planter to pay the price of the land, and the
sower the proper rent. (363a)

Art. 451. In the cases of the two preceding articles, the landowner is entitled
to damages from the builder, planter or sower. (n)

Art. 452. The builder, planter or sower in bad faith is entitled to

reimbursement for the necessary expenses of preservation of the land. (n)

Art. 453. If there was bad faith, not only on the part of the person who built,
planted or sowed on the land of another, but also on the part of the owner
of such land, the rights of one and the other shall be the same as though
both had acted in good faith.

It is understood that there is bad faith on the part of the landowner

whenever the act was done with his knowledge and without opposition on
his part. (354a)

Art. 454. When the landowner acted in bad faith and the builder, planter or
sower proceeded in good faith, the provisions of article 447 shall apply. (n)

Art. 455. If the materials, plants or seeds belong to a third person who has
not acted in bad faith, the owner of the land shall answer subsidiarily for
their value and only in the event that the one who made use of them has no
property with which to pay.

This provision shall not apply if the owner makes use of the right granted by
article 450. If the owner of the materials, plants or seeds has been paid by
the builder, planter or sower, the latter may demand from the landowner
the value of the materials and labor. (365a)

Art. 456. In the cases regulated in the preceding articles, good faith does not
necessarily exclude negligence, which gives right to damages under article
2176. (n)

Art. 457. To the owners of lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the current of the
waters. (336)

Art. 458. The owners of estates adjoining ponds or lagoons do not acquire
the land left dry by the natural decrease of the waters, or lose that
inundated by them in extraordinary floods. (367)

Art. 459. Whenever the current of a river, creek or torrent segregates from
an estate on its bank a known portion of land and transfers it to another
estate, the owner of the land to which the segregated portion belonged
retains the ownership of it, provided that he removes the same within two
years. (368a)

Art. 460. Trees uprooted and carried away by the current of the waters
belong to the owner of the land upon which they may be cast, if the owners
do not claim them within six months. If such owners claim them, they shall
pay the expenses incurred in gathering them or putting them in a safe place.
(369a)

Art. 461. River beds which are abandoned through the natural change in the
course of the waters ipso facto belong to the owners whose lands are
occupied by the new course in proportion to the area lost. However, the
owners of the lands adjoining the old bed shall have the right to acquire the
same by paying the value thereof, which value shall not exceed the value of
the area occupied by the new bed. (370a)

Art. 462. Whenever a river, changing its course by natural causes, opens a
new bed through a private estate, this bed shall become of public dominion.
(372a)

Art. 463. Whenever the current of a river divides itself into branches,
leaving a piece of land or part thereof isolated, the owner of the land retains
his ownership. He also retains it if a portion of land is separated from the
estate by the current. (374)

Art. 464. Islands which may be formed on the seas within the jurisdiction of
the Philippines, on lakes, and on navigable or floatable rivers belong to the
State. (371a)

Art. 465. Islands which through successive accumulation of alluvial

deposits are formed in non-navigable and non-floatable rivers, belong to
the owners of the margins or banks nearest to each of them, or to the
owners of both margins if the island is in the middle of the river, in which
case it shall be divided longitudinally in halves. If a single island thus
formed be more distant from one margin than from the other, the owner of
the nearer margin shall be the sole owner thereof. (373a)

SECTION 3. - Right of Accession

with Respect to Movable Property

Art. 466. Whenever two movable things belonging to different owners are,
without bad faith, united in such a way that they form a single object, the
owner of the principal thing acquires the accessory, indemnifying the
former owner thereof for its value. (375)

Art. 467. The principal thing, as between two things incorporated, is

deemed to be that to which the other has been united as an ornament, or for
its use or perfection. (376)

Art. 468. If it cannot be determined by the rule given in the preceding

article which of the two things incorporated is the principal one, the thing
of the greater value shall be so considered, and as between two things of
equal value, that of the greater volume.

In painting and sculpture, writings, printed matter, engraving and

lithographs, the board, metal, stone, canvas, paper or parchment shall be
deemed the accessory thing. (377)
Art. 469. Whenever the things united can be separated without injury, their
respective owners may demand their separation.

Nevertheless, in case the thing united for the use, embellishment or

perfection of the other, is much more precious than the principal thing, the
owner of the former may demand its separation, even though the thing to
which it has been incorporated may suffer some injury. (378)

Art. 470. Whenever the owner of the accessory thing has made the
incorporation in bad faith, he shall lose the thing incorporated and shall
have the obligation to indemnify the owner of the principal thing for the
damages he may have suffered.

If the one who has acted in bad faith is the owner of the principal thing, the
owner of the accessory thing shall have a right to choose between the
former paying him its value or that the thing belonging to him be separated,
even though for this purpose it be necessary to destroy the principal thing;
and in both cases, furthermore, there shall be indemnity for damages.

If either one of the owners has made the incorporation with the knowledge
and without the objection of the other, their respective rights shall be
determined as though both acted in good faith. (379a)

Art. 471. Whenever the owner of the material employed without his consent
has a right to an indemnity, he may demand that this consist in the delivery
of a thing equal in kind and value, and in all other respects, to that
employed, or else in the price thereof, according to expert appraisal. (380)

Art. 472. If by the will of their owners two things of the same or different
kinds are mixed, or if the mixture occurs by chance, and in the latter case
the things are not separable without injury, each owner shall acquire a right
proportional to the part belonging to him, bearing in mind the value of the
things mixed or confused. (381)

Art. 473. If by the will of only one owner, but in good faith, two things of the
same or different kinds are mixed or confused, the rights of the owners
shall be determined by the provisions of the preceding article.

If the one who caused the mixture or confusion acted in bad faith, he shall
lose the thing belonging to him thus mixed or confused, besides being
obliged to pay indemnity for the damages caused to the owner of the other
thing with which his own was mixed. (382)

Art. 474. One who in good faith employs the material of another in whole or
in part in order to make a thing of a different kind, shall appropriate the
thing thus transformed as his own, indemnifying the owner of the material
for its value.
If the material is more precious than the transformed thing or is of more
value, its owner may, at his option, appropriate the new thing to himself,
after first paying indemnity for the value of the work, or demand indemnity
for the material.

If in the making of the thing bad faith intervened, the owner of the material
shall have the right to appropriate the work to himself without paying
anything to the maker, or to demand of the latter that he indemnify him for
the value of the material and the damages he may have suffered. However,
the owner of the material cannot appropriate the work in case the value of
the latter, for artistic or scientific reasons, is considerably more than that of
the material. (383a)

Art. 475. In the preceding articles, sentimental value shall be duly

appreciated. (n)

CHAPTER 3
QUIETING OF TITLE (n)

Art. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or
proceeding which is apparently valid or effective but is in truth and in fact
invalid, ineffective, voidable, or unenforceable, and may be prejudicial to
said title, an action may be brought to remove such cloud or to quiet the
title.

An action may also be brought to prevent a cloud from being cast upon title
to real property or any interest therein.

Art. 477. The plaintiff must have legal or equitable title to, or interest in the
real property which is the subject matter of the action. He need not be in
possession of said property.

Art. 478. There may also be an action to quiet title or remove a cloud
therefrom when the contract, instrument or other obligation has been
extinguished or has terminated, or has been barred by extinctive
prescription.

Art. 479. The plaintiff must return to the defendant all benefits he may have
received from the latter, or reimburse him for expenses that may have
redounded to the plaintiff's benefit.

Art. 480. The principles of the general law on the quieting of title are hereby
adopted insofar as they are not in conflict with this Code.
Art. 481. The procedure for the quieting of title or the removal of a cloud
therefrom shall be governed by such rules of court as the Supreme Court
shall promulgated.

CHAPTER 4
RUINOUS BUILDINGS AND TREES IN DANGER OF FALLING

Art. 482. If a building, wall, column, or any other construction is in danger

of falling, the owner shall be obliged to demolish it or to execute the
necessary work in order to prevent it from falling.

If the proprietor does not comply with this obligation, the administrative
authorities may order the demolition of the structure at the expense of the
owner, or take measures to insure public safety. (389a)

Art. 483. Whenever a large tree threatens to fall in such a way as to cause
damage to the land or tenement of another or to travelers over a public or
private road, the owner of the tree shall be obliged to fell and remove it; and
should he not do so, it shall be done at his expense by order of the
administrative authorities. (390a)

Title III. - CO-OWNERSHIP

Art. 484. There is co-ownership whenever the ownership of an undivided

thing or right belongs to different persons.

In default of contracts, or of special provisions, co-ownership shall be

governed by the provisions of this Title. (392)

Art. 485. The share of the co-owners, in the benefits as well as in the
charges, shall be proportional to their respective interests. Any stipulation
in a contract to the contrary shall be void.

The portions belonging to the co-owners in the co-ownership shall be

presumed equal, unless the contrary is proved. (393a)

Art. 486. Each co-owner may use the thing owned in common, provided he
does so in accordance with the purpose for which it is intended and in such
a way as not to injure the interest of the co-ownership or prevent the other
co-owners from using it according to their rights. The purpose of the co-
ownership may be changed by agreement, express or implied. (394a)

Art. 487. Any one of the co-owners may bring an action in ejectment. (n)
Art. 488. Each co-owner shall have a right to compel the other co-owners to
contribute to the expenses of preservation of the thing or right owned in
common and to the taxes. Any one of the latter may exempt himself from
this obligation by renouncing so much of his undivided interest as may be
equivalent to his share of the expenses and taxes. No such waiver shall be
made if it is prejudicial to the co-ownership. (395a)

Art. 489. Repairs for preservation may be made at the will of one of the co-
owners, but he must, if practicable, first notify his co-owners of the
necessity for such repairs. Expenses to improve or embellish the thing shall
be decided upon by a majority as determined in Article 492. (n)

Art. 490. Whenever the different stories of a house belong to different

owners, if the titles of ownership do not specify the terms under which they
should contribute to the necessary expenses and there exists no agreement
on the subject, the following rules shall be observed:

(1) The main and party walls, the roof and the other things used in
common, shall be preserved at the expense of all the owners in
proportion to the value of the story belonging to each;

(2) Each owner shall bear the cost of maintaining the floor of his
story; the floor of the entrance, front door, common yard and sanitary
works common to all, shall be maintained at the expense of all the
owners pro rata;

(3) The stairs from the entrance to the first story shall be maintained
at the expense of all the owners pro rata, with the exception of the
owner of the ground floor; the stairs from the first to the second story
shall be preserved at the expense of all, except the owner of the
ground floor and the owner of the first story; and so on successively.
(396)

Art. 491. None of the co-owners shall, without the consent of the others,
make alterations in the thing owned in common, even though benefits for
all would result therefrom. However, if the withholding of the consent by
one or more of the co-owners is clearly prejudicial to the common interest,
the courts may afford adequate relief. (397a)

Art. 492. For the administration and better enjoyment of the thing owned in
common, the resolutions of the majority of the co-owners shall be binding.

There shall be no majority unless the resolution is approved by the co-

owners who represent the controlling interest in the object of the co-
ownership.
Should there be no majority, or should the resolution of the majority be
seriously prejudicial to those interested in the property owned in common,
the court, at the instance of an interested party, shall order such measures
as it may deem proper, including the appointment of an administrator.

Whenever a part of the thing belongs exclusively to one of the co-owners,

and the remainder is owned in common, the preceding provision shall
apply only to the part owned in common. (398)

Art. 493. Each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and he may therefore alienate, assign
or mortgage it, and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or the
mortgage, with respect to the co-owners, shall be limited to the portion
which may be alloted to him in the division upon the termination of the co-
ownership. (399)

Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each

co-owner may demand at any time the partition of the thing owned in
common, insofar as his share is concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period

of time, not exceeding ten years, shall be valid. This term may be extended
by a new agreement.

A donor or testator may prohibit partition for a period which shall not
exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-

owners or co-heirs so long as he expressly or impliedly recognizes the co-
ownership. (400a)

Art. 495. Notwithstanding the provisions of the preceding article, the co-
owners cannot demand a physical division of the thing owned in common,
when to do so would render it unserviceable for the use for which it is
intended. But the co-ownership may be terminated in accordance with
Article 498. (401a)

Art. 496. Partition may be made by agreement between the parties or by

judicial proceedings. Partition shall be governed by the Rules of Court
insofar as they are consistent with this Code. (402)

Art. 497. The creditors or assignees of the co-owners may take part in the
division of the thing owned in common and object to its being effected
without their concurrence. But they cannot impugn any partition already
executed, unless there has been fraud, or in case it was made
notwithstanding a formal opposition presented to prevent it, without
prejudice to the right of the debtor or assignor to maintain its validity. (403)

Art. 498. Whenever the thing is essentially indivisible and the co-owners
cannot agree that it be allotted to one of them who shall indemnify the
others, it shall be sold and its proceeds distributed. (404)

Art. 499. The partition of a thing owned in common shall not prejudice
third persons, who shall retain the rights of mortgage, servitude or any
other real rights belonging to them before the division was made. Personal
rights pertaining to third persons against the co-ownership shall also
remain in force, notwithstanding the partition. (405)

Art. 500. Upon partition, there shall be a mutual accounting for benefits
received and reimbursements for expenses made. Likewise, each co-owner
shall pay for damages caused by reason of his negligence or fraud. (n)

Art. 501. Every co-owner shall, after partition, be liable for defects of title
and quality of the portion assigned to each of the other co-owners. (n)

Title IV. - SOME SPECIAL PROPERTIES

CHAPTER I
WATERS

SECTION 1. - Ownership of Waters

Art. 502. The following are of public dominion:

(1) Rivers and their natural beds;

(2) Continuous or intermittent waters of springs and brooks running

in their natural beds and the beds themselves;

(3) Waters rising continuously or intermittently on lands of public

dominion;

(4) Lakes and lagoons formed by Nature on public lands, and their
beds;

(5) Rain waters running through ravines or sand beds, which are also
of public dominion;

(6) Subterranean waters on public lands;

 (7) Waters found within the zone of operation of public works, even if
constructed by a contractor;

(8) Waters rising continuously or intermittently on lands belonging to

private persons, to the State, to a province, or to a city or a
municipality from the moment they leave such lands;

(9) The waste waters of fountains, sewers and public establishments.

(407)

Art. 503. The following are of private ownership:

(1) Continuous or intermittent waters rising on lands of private
ownership, while running through the same;

(2) Lakes and lagoons, and their beds, formed by Nature on such
lands;

(3) Subterranean waters found on the same;

(4) Rain waters falling on said lands, as long as they remain within
the boundaries;

(5) The beds of flowing waters, continuous or intermittent, formed by

rain water, and those of brooks, crossing lands which are not of
public dominion.

In every drain or aqueduct, the water, bed, banks and floodgates shall
be considered as an integral part of the land of building for which the
waters are intended. The owners of lands, through which or along the
boundaries of which the aqueduct passes, cannot claim ownership
over it, or any right to the use of its bed or banks, unless the claim is
based on titles of ownership specifying the right or ownership
claimed. (408)

SECTION 2. - The Use of Public Waters

Art. 504. The use of public waters is acquired:

(1) By administrative concession;

(2) By prescription for ten years.

The extent of the rights and obligations of the use shall be that established,
in the first case, by the terms of the concession, and, in the second case, by
the manner and form in which the waters have been used. (409a)

Art. 505. Every concession for the use of waters is understood to be without
prejudice to third persons. (410)
Art. 506. The right to make use of public waters is extinguished by the lapse
of the concession and by non-user for five years. (411a)

SECTION 3. - The Use of Waters of Private Ownership

Art. 507. The owner of a piece of land on which a spring or brook rises, be it
continuous or intermittent, may use its waters while they run through the
same, but after the waters leave the land they shall become public, and their
use shall be governed by the Special Law of Waters of August 3, 1866, and
by the Irrigation Law. (412a)

Art. 508. The private ownership of the beds of rain waters does not give a
right to make works or constructions which may change their course to the
damage of third persons, or whose destruction, by the force of floods, may
cause such damage. (413)

Art. 509. No one may enter private property to search waters or make use of
them without permission from the owners, except as provided by the
Mining Law. (414a)

Art. 510. The ownership which the proprietor of a piece of land has over the
waters rising thereon does not prejudice the rights which the owners of
lower estates may have legally acquired to the use thereof. (415)

Art. 511. Every owner of a piece of land has the right to construct within his
property, reservoirs for rain waters, provided he causes no damage to the
public or to third persons. (416)

SECTION 4. - Subterranean Waters

Art. 512. Only the owner of a piece of land, or another person with his
permission, may make explorations thereon for subterranean waters,
except as provided by the Mining Law.

Explorations for subterranean waters on lands of public dominion may be

made only with the permission of the administrative authorities. (417a)

Art. 513. Waters artificially brought forth in accordance with the Special
Law of Waters of August 3, 1866, belong to the person who brought them
up. (418)

Art. 514. When the owner of waters artificially brought to the surface
abandons them to their natural course, they shall become of public
dominion. (419)
 SECTION 5. - General Provisions

Art. 515. The owner of a piece of land on which there are defensive works to
check waters, or on which, due to a change of their course, it may be
necessary to reconstruct such works, shall be obliged, at his election, either
to make the necessary repairs or construction himself, or to permit them to
be done, without damage to him, by the owners of the lands which suffer or
are clearly exposed to suffer injury. (420)

Art. 516. The provisions of the preceding article are applicable to the case in
which it may be necessary to clear a piece of land of matter, whose
accumulation or fall may obstruct the course of the waters, to the damage
or peril of third persons. (421)

Art. 517. All the owners who participate in the benefits arising from the
works referred to in the two preceding articles, shall be obliged to
contribute to the expenses of construction in proportion to their respective
interests. Those who by their fault may have caused the damage shall be
liable for the expenses. (422)

Art. 518. All matters not expressly determined by the provisions of this
Chapter shall be governed by the special Law of Waters of August 3, 1866,
and by the Irrigation Law. (425a)

CHAPTER 2
MINERALS

Art. 519. Mining claims and rights and other matters concerning minerals
and mineral lands are governed by special laws. (427a)

CHAPTER 3
TRADE-MARKS AND TRADE-NAMES

Art. 520. A trade-mark or trade-name duly registered in the proper

government bureau or office is owned by and pertains to the person,
corporation, or firm registering the same, subject to the provisions of
special laws. (n)

Art. 521. The goodwill of a business is property, and may be transferred

together with the right to use the name under which the business is
conducted. (n)

Art. 522. Trade-marks and trade-names are governed by special laws. (n)

Title V. - POSSESSION
 CHAPTER 1
POSSESSION AND THE KINDS THEREOF

Art. 523. Possession is the holding of a thing or the enjoyment of a right.

(430a)

Art. 524. Possession may be exercised in one's own name or in that of

another. (413a)

Art. 525. The possession of things or rights may be had in one of two
concepts: either in the concept of owner, or in that of the holder of the thing
or right to keep or enjoy it, the ownership pertaining to another person. (432)

Art. 526. He is deemed a possessor in good faith who is not aware that there
exists in his title or mode of acquisition any flaw which invalidates it.

He is deemed a possessor in bad faith who possesses in any case contrary to

the foregoing.

Mistake upon a doubtful or difficult question of law may be the basis of

good faith. (433a)

Art. 527. Good faith is always presumed, and upon him who alleges bad
faith on the part of a possessor rests the burden of proof. (434)

Art. 528. Possession acquired in good faith does not lose this character
except in the case and from the moment facts exist which show that the
possessor is not unaware that he possesses the thing improperly or
wrongfully. (435a)

Art. 529. It is presumed that possession continues to be enjoyed in the same

character in which it was acquired, until the contrary is proved. (436)

Art. 530. Only things and rights which are susceptible of being appropriated
may be the object of possession. (437)

CHAPTER 2
ACQUISITION OF POSSESSION

Art. 531. Possession is acquired by the material occupation of a thing or the

exercise of a right, or by the fact that it is subject to the action of our will, or
by the proper acts and legal formalities established for acquiring such right.
(438a)
Art. 532. Possession may be acquired by the same person who is to enjoy it,
by his legal representative, by his agent, or by any person without any
power whatever: but in the last case, the possession shall not be considered
as acquired until the person in whose name the act of possession was
executed has ratified the same, without prejudice to the juridical
consequences of negotiorum gestio in a proper case. (439a)

Art. 533. The possession of hereditary property is deemed transmitted to

the heir without interruption and from the moment of the death of the
decedent, in case the inheritance is accepted.

One who validly renounces an inheritance is deemed never to have

possessed the same. (440)

Art. 534. On who succeeds by hereditary title shall not suffer the
consequences of the wrongful possession of the decedent, if it is not shown
that he was aware of the flaws affecting it; but the effects of possession in
good faith shall not benefit him except from the date of the death of the
decedent. (442)

Art. 535. Minors and incapacitated persons may acquire the possession of
things; but they need the assistance of their legal representatives in order to
exercise the rights which from the possession arise in their favor. (443)

Art. 536. In no case may possession be acquired through force or

intimidation as long as there is a possessor who objects thereto. He who
believes that he has an action or a right to deprive another of the holding of
a thing, must invoke the aid of the competent court, if the holder should
refuse to deliver the thing. (441a)

Art. 537. Acts merely tolerated, and those executed clandestinely and
without the knowledge of the possessor of a thing, or by violence, do not
affect possession. (444)

Art. 538. Possession as a fact cannot be recognized at the same time in two
different personalities except in the cases of co-possession. Should a
question arise regarding the fact of possession, the present possessor shall
be preferred; if there are two possessors, the one longer in possession; if
the dates of the possession are the same, the one who presents a title; and if
all these conditions are equal, the thing shall be placed in judicial deposit
pending determination of its possession or ownership through proper
proceedings. (445)

CHAPTER 3
EFFECTS OF POSSESSION
Art. 539. Every possessor has a right to be respected in his possession; and
should he be disturbed therein he shall be protected in or restored to said
possession by the means established by the laws and the Rules of Court.

A possessor deprived of his possession through forcible entry may within

ten days from the filing of the complaint present a motion to secure from
the competent court, in the action for forcible entry, a writ of preliminary
mandatory injunction to restore him in his possession. The court shall
decide the motion within thirty (30) days from the filing thereof. (446a)

Art. 540. Only the possession acquired and enjoyed in the concept of owner
can serve as a title for acquiring dominion. (447)

Art. 541. A possessor in the concept of owner has in his favor the legal
presumption that he possesses with a just title and he cannot be obliged to
show or prove it. (448a)

Art. 542. The possession of real property presumes that of the movables
therein, so long as it is not shown or proved that they should be excluded.
(449)

Art. 543. Each one of the participants of a thing possessed in common shall
be deemed to have exclusively possessed the part which may be allotted to
him upon the division thereof, for the entire period during which the co-
possession lasted. Interruption in the possession of the whole or a part of a
thing possessed in common shall be to the prejudice of all the possessors.
However, in case of civil interruption, the Rules of Court shall apply. (450a)

Art. 544. A possessor in good faith is entitled to the fruits received before
the possession is legally interrupted.

Natural and industrial fruits are considered received from the time they are
gathered or severed.

Civil fruits are deemed to accrue daily and belong to the possessor in good
faith in that proportion. (451)

Art. 545. If at the time the good faith ceases, there should be any natural or
industrial fruits, the possessor shall have a right to a part of the expenses of
cultivation, and to a part of the net harvest, both in proportion to the time
of the possession.

The charges shall be divided on the same basis by the two possessors.

The owner of the thing may, should he so desire, give the possessor in good
faith the right to finish the cultivation and gathering of the growing fruits,
as an indemnity for his part of the expenses of cultivation and the net
proceeds; the possessor in good faith who for any reason whatever should
refuse to accept this concession, shall lose the right to be indemnified in any
other manner. (452a)

Art. 546. Necessary expenses shall be refunded to every possessor; but only
the possessor in good faith may retain the thing until he has been
reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with
the same right of retention, the person who has defeated him in the
possession having the option of refunding the amount of the expenses or of
paying the increase in value which the thing may have acquired by reason
thereof. (453a)

Art. 547. If the useful improvements can be removed without damage to the
principal thing, the possessor in good faith may remove them, unless the
person who recovers the possession exercises the option under paragraph 2
of the preceding article. (n)

Art. 548. Expenses for pure luxury or mere pleasure shall not be refunded
to the possessor in good faith; but he may remove the ornaments with
which he has embellished the principal thing if it suffers no injury thereby,
and if his successor in the possession does not prefer to refund the amount
expended. (454)

Art. 549. The possessor in bad faith shall reimburse the fruits received and
those which the legitimate possessor could have received, and shall have a
right only to the expenses mentioned in paragraph 1 of Article 546 and in
Article 443. The expenses incurred in improvements for pure luxury or
mere pleasure shall not be refunded to the possessor in bad faith, but he
may remove the objects for which such expenses have been incurred,
provided that the thing suffers no injury thereby, and that the lawful
possessor does not prefer to retain them by paying the value they may have
at the time he enters into possession. (445a)

Art. 550. The costs of litigation over the property shall be borne by every
possessor. (n)

Art. 551. Improvements caused by nature or time shall always insure to the
benefit of the person who has succeeded in recovering possession. (456)

Art. 552. A possessor in good faith shall not be liable for the deterioration
or loss of the thing possessed, except in cases in which it is proved that he
has acted with fraudulent intent or negligence, after the judicial summons.
A possessor in bad faith shall be liable for deterioration or loss in every
case, even if caused by a fortuitous event. (457a)

Art. 553. One who recovers possession shall not be obliged to pay for
improvements which have ceased to exist at the time he takes possession of
the thing. (458)

Art. 554. A present possessor who shows his possession at some previous
time, is presumed to have held possession also during the intermediate
period, in the absence of proof to the contrary. (459)

Art. 555. A possessor may lose his possession:

(1) By the abandonment of the thing;

(2) By an assignment made to another either by onerous or gratuitous

title;

(3) By the destruction or total loss of the thing, or because it goes out
of commerce;

(4) By the possession of another, subject to the provisions of Article

537, if the new possession has lasted longer than one year. But the
real right of possession is not lost till after the lapse of ten years. (460a)

Art. 556. The possession of movables is not deemed lost so long as they
remain under the control of the possessor, even though for the time being
he may not know their whereabouts. (461)

Art. 557. The possession of immovables and of real rights is not deemed
lost, or transferred for purposes of prescription to the prejudice of third
persons, except in accordance with the provisions of the Mortgage Law and
the Land Registration laws. (462a)

Art. 558. Acts relating to possession, executed or agreed to by one who

possesses a thing belonging to another as a mere holder to enjoy or keep it,
in any character, do not bind or prejudice the owner, unless he gave said
holder express authority to do such acts, or ratifies them subsequently. (463)

Art. 559. The possession of movable property acquired in good faith is

equivalent to a title. Nevertheless, one who has lost any movable or has
been unlawfully deprived thereof may recover it from the person in
possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor. (464a)
Art. 560. Wild animals are possessed only while they are under one's
control; domesticated or tamed animals are considered domestic or tame if
they retain the habit of returning to the premises of the possessor. (465)

Art. 561. One who recovers, according to law, possession unjustly lost, shall
be deemed for all purposes which may redound to his benefit, to have
enjoyed it without interruption. (466)

Title VI. - USUFRUCT

CHAPTER 1
USUFRUCT IN GENERAL

Art. 562. Usufruct gives a right to enjoy the property of another with the
obligation of preserving its form and substance, unless the title constituting
it or the law otherwise provides. (467)

Art. 563. Usufruct is constituted by law, by the will of private persons

expressed in acts inter vivos or in a last will and testament, and by
prescription. (468)

Art. 564. Usufruct may be constituted on the whole or a part of the fruits of
the thing, in favor of one more persons, simultaneously or successively, and
in every case from or to a certain day, purely or conditionally. It may also be
constituted on a right, provided it is not strictly personal or
intransmissible. (469)

Art. 565. The rights and obligations of the usufructuary shall be those
provided in the title constituting the usufruct; in default of such title, or in
case it is deficient, the provisions contained in the two following Chapters
shall be observed. (470)

CHAPTER 2
RIGHTS OF THE USUFRUCTUARY

Art. 566. The usufructuary shall be entitled to all the natural, industrial and
civil fruits of the property in usufruct. With respect to hidden treasure
which may be found on the land or tenement, he shall be considered a
stranger. (471)

Art. 567. Natural or industrial fruits growing at the time the usufruct
begins, belong to the usufructuary.

Those growing at the time the usufruct terminates, belong to the owner.
In the preceding cases, the usufructuary, at the beginning of the usufruct,
has no obligation to refund to the owner any expenses incurred; but the
owner shall be obliged to reimburse at the termination of the usufruct,
from the proceeds of the growing fruits, the ordinary expenses of
cultivation, for seed, and other similar expenses incurred by the
usufructuary.

The provisions of this article shall not prejudice the rights of third persons,
acquired either at the beginning or at the termination of the usufruct. (472)

Art. 568. If the usufructuary has leased the lands or tenements given in
usufruct, and the usufruct should expire before the termination of the
lease, he or his heirs and successors shall receive only the proportionate
share of the rent that must be paid by the lessee. (473)

Art. 569. Civil fruits are deemed to accrue daily, and belong to the
usufructuary in proportion to the time the usufruct may last. (474)

Art. 570. Whenever a usufruct is constituted on the right to receive a rent or

periodical pension, whether in money or in fruits, or in the interest on
bonds or securities payable to bearer, each payment due shall be
considered as the proceeds or fruits of such right.

Whenever it consists in the enjoyment of benefits accruing from a

participation in any industrial or commercial enterprise, the date of the
distribution of which is not fixed, such benefits shall have the same
character.

In either case they shall be distributed as civil fruits, and shall be applied in
the manner prescribed in the preceding article. (475)

Art. 571. The usufructuary shall have the right to enjoy any increase which
the thing in usufruct may acquire through accession, the servitudes
established in its favor, and, in general, all the benefits inherent therein.
(479)

Art. 572. The usufructuary may personally enjoy the thing in usufruct, lease
it to another, or alienate his right of usufruct, even by a gratuitous title; but
all the contracts he may enter into as such usufructuary shall terminate
upon the expiration of the usufruct, saving leases of rural lands, which shall
be considered as subsisting during the agricultural year. (480)

Art. 573. Whenever the usufruct includes things which, without being
consumed, gradually deteriorate through wear and tear, the usufructuary
shall have the right to make use thereof in accordance with the purpose for
which they are intended, and shall not be obliged to return them at the
termination of the usufruct except in their condition at that time; but he
shall be obliged to indemnify the owner for any deterioration they may have
suffered by reason of his fraud or negligence. (481)

Art. 574. Whenever the usufruct includes things which cannot be used
without being consumed, the usufructuary shall have the right to make use
of them under the obligation of paying their appraised value at the
termination of the usufruct, if they were appraised when delivered. In case
they were not appraised, he shall have the right to return at the same
quantity and quality, or pay their current price at the time the usufruct
ceases. (482)

Art. 575. The usufructuary of fruit-bearing trees and shrubs may make use
of the dead trunks, and even of those cut off or uprooted by accident, under
the obligation to replace them with new plants. (483a)

Art. 576. If in consequence of a calamity or extraordinary event, the trees or

shrubs shall have disappeared in such considerable number that it would
not be possible or it would be too burdensome to replace them, the
usufructuary may leave the dead, fallen or uprooted trunks at the disposal
of the owner, and demand that the latter remove them and clear the land.
(484a)

Art. 577. The usufructuary of woodland may enjoy all the benefits which it
may produce according to its nature.

If the woodland is a copse or consists of timber for building, the

usufructuary may do such ordinary cutting or felling as the owner was in
the habit of doing, and in default of this, he may do so in accordance with
the custom of the place, as to the manner, amount and season.

In any case the felling or cutting of trees shall be made in such manner as
not to prejudice the preservation of the land.

In nurseries, the usufructuary may make the necessary thinnings in order

that the remaining trees may properly grow.

With the exception of the provisions of the preceding paragraphs, the

usufructuary cannot cut down trees unless it be to restore or improve some
of the things in usufruct, and in such case shall first inform the owner of the
necessity for the work. (485)

Art. 578. The usufructuary of an action to recover real property or a real

right, or any movable property, has the right to bring the action and to
oblige the owner thereof to give him the authority for this purpose and to
furnish him whatever proof he may have. If in consequence of the
enforcement of the action he acquires the thing claimed, the usufruct shall
be limited to the fruits, the dominion remaining with the owner. (486)
Art. 579. The usufructuary may make on the property held in usufruct such
useful improvements or expenses for mere pleasure as he may deem
proper, provided he does not alter its form or substance; but he shall have
no right to be indemnified therefor. He may, however, remove such
improvements, should it be possible to do so without damage to the
property. (487)

Art. 580. The usufructuary may set off the improvements he may have made
on the property against any damage to the same. (488)

Art. 581. The owner of property the usufruct of which is held by another,
may alienate it, but he cannot alter its form or substance, or do anything
thereon which may be prejudicial to the usufructuary. (489)

Art. 582. The usufructuary of a part of a thing held in common shall

exercise all the rights pertaining to the owner thereof with respect to the
administration and the collection of fruits or interest. Should the co-
ownership cease by reason of the division of the thing held in common, the
usufruct of the part allotted to the co-owner shall belong to the
usufructuary. (490)

CHAPTER 3
OBLIGATIONS OF THE USUFRUCTUARY

Art. 583. The usufructuary, before entering upon the enjoyment of the
property, is obliged:
(1) To make, after notice to the owner or his legitimate representative,
an inventory of all the property, which shall contain an appraisal of
the movables and a description of the condition of the immovables;

(2) To give security, binding himself to fulfill the obligations imposed

upon him in accordance with this Chapter. (491)

Art. 584. The provisions of No. 2 of the preceding article shall not apply to
the donor who has reserved the usufruct of the property donated, or to the
parents who are usufructuaries of their children's property, except when
the parents contract a second marriage. (492a)

Art. 585. The usufructuary, whatever may be the title of the usufruct, may
be excused from the obligation of making an inventory or of giving security,
when no one will be injured thereby. (493)

Art. 586. Should the usufructuary fail to give security in the cases in which
he is bound to give it, the owner may demand that the immovables be
placed under administration, that the movables be sold, that the public
bonds, instruments of credit payable to order or to bearer be converted into
registered certificates or deposited in a bank or public institution, and that
the capital or sums in cash and the proceeds of the sale of the movable
property be invested in safe securities.

The interest on the proceeds of the sale of the movables and that on public
securities and bonds, and the proceeds of the property placed under
administration, shall belong to the usufructuary.

Furthermore, the owner may, if he so prefers, until the usufructuary gives

security or is excused from so doing, retain in his possession the property
in usufruct as administrator, subject to the obligation to deliver to the
usufructuary the net proceeds thereof, after deducting the sums which may
be agreed upon or judicially allowed him for such administration. (494)

Art. 587. If the usufructuary who has not given security claims, by virtue of
a promise under oath, the delivery of the furniture necessary for his use,
and that he and his family be allowed to live in a house included in the
usufruct, the court may grant this petition, after due consideration of the
facts of the case.

The same rule shall be observed with respect to implements, tools and other
movable property necessary for an industry or vocation in which he is
engaged.

If the owner does not wish that certain articles be sold because of their
artistic worth or because they have a sentimental value, he may demand
their delivery to him upon his giving security for the payment of the legal
interest on their appraised value. (495)

Art. 588. After the security has been given by the usufructuary, he shall
have a right to all the proceeds and benefits from the day on which, in
accordance with the title constituting the usufruct, he should have
commenced to receive them. (496)

Art. 589. The usufructuary shall take care of the things given in usufruct as
a good father of a family. (497)

Art. 590. A usufructuary who alienates or leases his right of usufruct shall
answer for any damage which the things in usufruct may suffer through the
fault or negligence of the person who substitutes him. (498)

Art. 591. If the usufruct be constituted on a flock or herd of livestock, the

usufructuary shall be obliged to replace with the young thereof the animals
that die each year from natural causes, or are lost due to the rapacity of
beasts of prey.
If the animals on which the usufruct is constituted should all perish,
without the fault of the usufructuary, on account of some contagious
disease or any other uncommon event, the usufructuary shall fulfill his
obligation by delivering to the owner the remains which may have been
saved from the misfortune.

Should the herd or flock perish in part, also by accident and without the
fault of the usufructuary, the usufruct shall continue on the part saved.

Should the usufruct be on sterile animals, it shall be considered, with

respect to its effects, as though constituted on fungible things. (499a)

Art. 592. The usufructuary is obliged to make the ordinary repairs needed
by the thing given in usufruct.

By ordinary repairs are understood such as are required by the wear and
tear due to the natural use of the thing and are indispensable for its
preservation. Should the usufructuary fail to make them after demand by
the owner, the latter may make them at the expense of the usufructuary.
(500)

Art. 593. Extraordinary repairs shall be at the expense of the owner. The
usufructuary is obliged to notify the owner when the need for such repairs
is urgent. (501)

Art. 594. If the owner should make the extraordinary repairs, he shall have
a right to demand of the usufructuary the legal interest on the amount
expended for the time that the usufruct lasts.

Should he not make them when they are indispensable for the preservation
of the thing, the usufructuary may make them; but he shall have a right to
demand of the owner, at the termination of the usufruct, the increase in
value which the immovable may have acquired by reason of the repairs. (502a)

Art. 595. The owner may construct any works and make any improvements
of which the immovable in usufruct is susceptible, or make new plantings
thereon if it be rural, provided that such acts do not cause a diminution in
the value of the usufruct or prejudice the right of the usufructuary. (503)

Art. 596. The payment of annual charges and taxes and of those considered
as a lien on the fruits, shall be at the expense of the usufructuary for all the
time that the usufruct lasts. (504)

Art. 597. The taxes which, during the usufruct, may be imposed directly on
the capital, shall be at the expense of the owner.
If the latter has paid them, the usufructuary shall pay him the proper
interest on the sums which may have been paid in that character; and, if the
said sums have been advanced by the usufructuary, he shall recover the
amount thereof at the termination of the usufruct. (505)

Art. 598. If the usufruct be constituted on the whole of a patrimony, and if

at the time of its constitution the owner has debts, the provisions of Articles
758 and 759 relating to donations shall be applied, both with respect to the
maintenance of the usufruct and to the obligation of the usufructuary to pay
such debts.

The same rule shall be applied in case the owner is obliged, at the time the
usufruct is constituted, to make periodical payments, even if there should
be no known capital. (506)

Art. 599. The usufructuary may claim any matured credits which form a
part of the usufruct if he has given or gives the proper security. If he has
been excused from giving security or has been able to give it, or if that given
is not sufficient, he shall need the authorization of the owner, or of the
court in default thereof, to collect such credits.

The usufructuary who has given security may use the capital he has
collected in any manner he may deem proper. The usufructuary who has
not given security shall invest the said capital at interest upon agreement
with the owner; in default of such agreement, with judicial authorization;
and, in every case, with security sufficient to preserve the integrity of the
capital in usufruct. (507)

Art. 600. The usufructuary of a mortgaged immovable shall not be obliged

to pay the debt for the security of which the mortgage was constituted.

Should the immovable be attached or sold judicially for the payment of the
debt, the owner shall be liable to the usufructuary for whatever the latter
may lose by reason thereof. (509)

Art. 601. The usufructuary shall be obliged to notify the owner of any act of
a third person, of which he may have knowledge, that may be prejudicial to
the rights of ownership, and he shall be liable should he not do so, for
damages, as if they had been caused through his own fault. (511)

Art. 602. The expenses, costs and liabilities in suits brought with regard to
the usufruct shall be borne by the usufructuary. (512)

CHAPTER 4
EXTINGUISHMENT OF USUFRUCT
Art. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary intention
clearly appears;

(2) By the expiration of the period for which it was constituted, or by

the fulfillment of any resolutory condition provided in the title
creating the usufruct;

(3) By merger of the usufruct and ownership in the same person;

(4) By renunciation of the usufructuary;

(5) By the total loss of the thing in usufruct;

(6) By the termination of the right of the person constituting the

usufruct;

(7) By prescription. (513a)

Art. 604. If the thing given in usufruct should be lost only in part, the right
shall continue on the remaining part. (514)

Art. 605. Usufruct cannot be constituted in favor of a town, corporation, or

association for more than fifty years. If it has been constituted, and before
the expiration of such period the town is abandoned, or the corporation or
association is dissolved, the usufruct shall be extinguished by reason
thereof. (515a)

Art. 606. A usufruct granted for the time that may elapse before a third
person attains a certain age, shall subsist for the number of years specified,
even if the third person should die before the period expires, unless such
usufruct has been expressly granted only in consideration of the existence
of such person. (516)

Art. 607. If the usufruct is constituted on immovable property of which a

building forms part, and the latter should be destroyed in any manner
whatsoever, the usufructuary shall have a right to make use of the land and
the materials.

The same rule shall be applied if the usufruct is constituted on a building

only and the same should be destroyed. But in such a case, if the owner
should wish to construct another building, he shall have a right to occupy
the land and to make use of the materials, being obliged to pay to the
usufructuary, during the continuance of the usufruct, the interest upon the
sum equivalent to the value of the land and of the materials. (517)
Art. 608. If the usufructuary shares with the owner the insurance of the
tenement given in usufruct, the former shall, in case of loss, continue in the
enjoyment of the new building, should one be constructed, or shall receive
the interest on the insurance indemnity if the owner does not wish to
rebuild.

Should the usufructuary have refused to contribute to the insurance, the

owner insuring the tenement alone, the latter shall receive the full amount
of the insurance indemnity in case of loss, saving always the right granted
to the usufructuary in the preceding article. (518a)

Art. 609. Should the thing in usufruct be expropriated for public use, the
owner shall be obliged either to replace it with another thing of the same
value and of similar conditions, or to pay the usufructuary the legal interest
on the amount of the indemnity for the whole period of the usufruct. If the
owner chooses the latter alternative, he shall give security for the payment
of the interest. (519)

Art. 610. A usufruct is not extinguished by bad use of the thing in usufruct;
but if the abuse should cause considerable injury to the owner, the latter
may demand that the thing be delivered to him, binding himself to pay
annually to the usufructuary the net proceeds of the same, after deducting
the expenses and the compensation which may be allowed him for its
administration. (520)

Art. 611. A usufruct constituted in favor of several persons living at the time
of its constitution shall not be extinguished until death of the last survivor.
(521)

Art. 612. Upon the termination of the usufruct, the thing in usufruct shall be
delivered to the owner, without prejudice to the right of retention
pertaining to the usufructuary or his heirs for taxes and extraordinary
expenses which should be reimbursed. After the delivery has been made,
the security or mortgage shall be cancelled. (522a)

Title VII. - EASEMENTS OF SERVITUDES

CHAPTER 1
EASEMENTS IN GENERAL

SECTION 1. - Different Kinds of Easements

Art. 613. An easement or servitude is an encumbrance imposed upon an

immovable for the benefit of another immovable belonging to a different
owner.
The immovable in favor of which the easement is established is called the
dominant estate; that which is subject thereto, the servient estate. (530)

Art. 614. Servitudes may also be established for the benefit of a community,
or of one or more persons to whom the encumbered estate does not belong.
(531)

Art. 615. Easements may be continuous or discontinuous, apparent or

nonapparent.

Continuous easements are those the use of which is or may be incessant,

without the intervention of any act of man.

Discontinuous easements are those which are used at intervals and depend
upon the acts of man.

Apparent easements are those which are made known and are continually
kept in view by external signs that reveal the use and enjoyment of the
same.

Nonapparent easements are those which show no external indication of

their existence. (532)

Art. 616. Easements are also positive or negative.

A positive easement is one which imposes upon the owner of the servient
estate the obligation of allowing something to be done or of doing it himself,
and a negative easement, that which prohibits the owner of the servient
estate from doing something which he could lawfully do if the easement did
not exist. (533)

Art. 617. Easements are inseparable from the estate to which they actively
or passively belong. (534)

Art. 618. Easements are indivisible. If the servient estate is divided between
two or more persons, the easement is not modified, and each of them must
bear it on the part which corresponds to him.

If it is the dominant estate that is divided between two or more persons,

each of them may use the easement in its entirety, without changing the
place of its use, or making it more burdensome in any other way. (535)

Art. 619. Easements are established either by law or by the will of the
owners. The former are called legal and the latter voluntary easements. (536)

SECTION 2. - Modes of Acquiring Easements

Art. 620. Continuous and apparent easements are acquired either by virtue
of a title or by prescription of ten years. (537a)

Art. 621. In order to acquire by prescription the easements referred to in

the preceding article, the time of possession shall be computed thus: in
positive easements, from the day on which the owner of the dominant
estate, or the person who may have made use of the easement, commenced
to exercise it upon the servient estate; and in negative easements, from the
day on which the owner of the dominant estate forbade, by an instrument
acknowledged before a notary public, the owner of the servient estate, from
executing an act which would be lawful without the easement. (538a)

Art. 622. Continuous nonapparent easements, and discontinuous ones,

whether apparent or not, may be acquired only by virtue of a title. (539)

Art. 623. The absence of a document or proof showing the origin of an

easement which cannot be acquired by prescription may be cured by a deed
of recognition by the owner of the servient estate or by a final judgment.
(540a)

Art. 624. The existence of an apparent sign of easement between two

estates, established or maintained by the owner of both, shall be
considered, should either of them be alienated, as a title in order that the
easement may continue actively and passively, unless, at the time the
ownership of the two estates is divided, the contrary should be provided in
the title of conveyance of either of them, or the sign aforesaid should be
removed before the execution of the deed. This provision shall also apply in
case of the division of a thing owned in common by two or more persons.
(541a)

Art. 625. Upon the establishment of an easement, all the rights necessary
for its use are considered granted. (542)

Art. 626. The owner of the dominant estate cannot use the easement except
for the benefit of the immovable originally contemplated. Neither can he
exercise the easement in any other manner than that previously
established. (n)

SECTION 3. - Rights and Obligations

of the Owners of the Dominant and Servient Estates

Art. 627. The owner of the dominant estate may make, at his own expense,
on the servient state any works necessary for the use and preservation of
the servitude, but without altering it or rendering it more burdensome.
For this purpose he shall notify the owner of the servient estate, and shall
choose the most convenient time and manner so as to cause the least
inconvenience to the owner of the servient estate. (543a)

Art. 628. Should there be several dominant estates, the owners of all of
them shall be obliged to contribute to the expenses referred to in the
preceding article, in proportion to the benefits which each may derive from
the work. Any one who does not wish to contribute may exempt himself by
renouncing the easement for the benefit of the others.

If the owner of the servient estate should make use of the easement in any
manner whatsoever, he shall also be obliged to contribute to the expenses
in the proportion stated, saving an agreement to the contrary. (544)

Art. 629. The owner of the servient estate cannot impair, in any manner
whatsoever, the use of the servitude.

Nevertheless, if by reason of the place originally assigned, or of the manner

established for the use of the easement, the same should become very
inconvenient to the owner of the servient estate, or should prevent him
from making any important works, repairs or improvements thereon, it
may be changed at his expense, provided he offers another place or manner
equally convenient and in such a way that no injury is caused thereby to the
owner of the dominant estate or to those who may have a right to the use of
the easement. (545)

Art. 630. The owner of the servient estate retains the ownership of the
portion on which the easement is established, and may use the same in such
a manner as not to affect the exercise of the easement. (n)

SECTION 4. - Modes of Extinguishment of Easements

Art. 631. Easements are extinguished:

(1) By merger in the same person of the ownership of the dominant

and servient estates;

(2) By nonuser for ten years; with respect to discontinuous

easements, this period shall be computed from the day on which they
ceased to be used; and, with respect to continuous easements, from
the day on which an act contrary to the same took place;

(3) When either or both of the estates fall into such condition that the
easement cannot be used; but it shall revive if the subsequent
condition of the estates or either of them should again permit its use,
unless when the use becomes possible, sufficient time for
 prescription has elapsed, in accordance with the provisions of the
preceding number;

(4) By the expiration of the term or the fulfillment of the condition, if

the easement is temporary or conditional;

(5) By the renunciation of the owner of the dominant estate;

(6) By the redemption agreed upon between the owners of the

dominant and servient estates. (546a)

Art. 632. The form or manner of using the easement may prescribe as the
easement itself, and in the same way. (547a)

Art. 633. If the dominant estate belongs to several persons in common, the
use of the easement by any one of them prevents prescription with respect
to the others. (548)

CHAPTER 2
LEGAL EASEMENTS

SECTION 1. - General Provisions

Art. 634. Easements imposed by law have for their object either public use
or the interest of private persons. (549)

Art. 635. All matters concerning easements established for public or

communal use shall be governed by the special laws and regulations
relating thereto, and, in the absence thereof, by the provisions of this Title.
(550)

Art. 636. Easements established by law in the interest of private persons or

for private use shall be governed by the provisions of this Title, without
prejudice to the provisions of general or local laws and ordinances for the
general welfare.

These easements may be modified by agreement of the interested parties,

whenever the law does not prohibit it or no injury is suffered by a third
person. (551a)

SECTION 2. - Easements Relating to Waters

Art. 637. Lower estates are obliged to receive the waters which naturally
and without the intervention of man descend from the higher estates, as
well as the stones or earth which they carry with them.
The owner of the lower estate cannot construct works which will impede
this easement; neither can the owner of the higher estate make works
which will increase the burden. (552)

Art. 638. The banks of rivers and streams, even in case they are of private
ownership, are subject throughout their entire length and within a zone of
three meters along their margins, to the easement of public use in the
general interest of navigation, floatage, fishing and salvage.

Estates adjoining the banks of navigable or floatable rivers are,

furthermore, subject to the easement of towpath for the exclusive service of
river navigation and floatage.

If it be necessary for such purpose to occupy lands of private ownership, the

proper indemnity shall first be paid. (553a)

Art. 639. Whenever for the diversion or taking of water from a river or
brook, or for the use of any other continuous or discontinuous stream, it
should be necessary to build a dam, and the person who is to construct it is
not the owner of the banks, or lands which must support it, he may
establish the easement of abutment of a dam, after payment of the proper
indemnity. (554)

Art. 640. Compulsory easements for drawing water or for watering animals
can be imposed only for reasons of public use in favor of a town or village,
after payment of the proper indemnity. (555)

Art. 641. Easements for drawing water and for watering animals carry with
them the obligation of the owners of the servient estates to allow passage to
persons and animals to the place where such easements are to be used, and
the indemnity shall include this service. (556)

Art. 642. Any person who may wish to use upon his own estate any water of
which he can dispose shall have the right to make it flow through the
intervening estates, with the obligation to indemnify their owners, as well
as the owners of the lower estates upon which the waters may filter or
descend. (557)

Art. 643. One desiring to make use of the right granted in the preceding
article is obliged:

(1) To prove that he can dispose of the water and that it is sufficient
for the use for which it is intended;

(2) To show that the proposed right of way is the most convenient and
the least onerous to third persons;
 (3) To indemnify the owner of the servient estate in the manner
determined by the laws and regulations. (558)

Art. 644. The easement of aqueduct for private interest cannot be imposed
on buildings, courtyards, annexes, or outhouses, or on orchards or gardens
already existing. (559)

Art. 645. The easement of aqueduct does not prevent the owner of the
servient estate from closing or fencing it, or from building over the
aqueduct in such manner as not to cause the latter any damage, or render
necessary repairs and cleanings impossible. (560)

Art. 646. For legal purposes, the easement of aqueduct shall be considered
as continuous and apparent, even though the flow of the water may not be
continuous, or its use depends upon the needs of the dominant estate, or
upon a schedule of alternate days or hours. (561)

Art. 647. One who for the purpose of irrigating or improving his estate, has
to construct a stop lock or sluice gate in the bed of the stream from which
the water is to be taken, may demand that the owners of the banks permit
its construction, after payment of damages, including those caused by the
new easement to such owners and to the other irrigators. (562)

Art. 648. The establishment, extent, form and conditions of the servitudes
of waters, to which this section refers, shall be governed by the special laws
relating thereto insofar as no provision therefor is made in this Code. (563a)

SECTION 3. - Easement of Right of Way

Art. 649. The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by other immovables
pertaining to other persons and without adequate outlet to a public
highway, is entitled to demand a right of way through the neighboring
estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a
permanent passage, the indemnity shall consist of the value of the land
occupied and the amount of the damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the
cultivation of the estate surrounded by others and for the gathering of its
crops through the servient estate without a permanent way, the indemnity
shall consist in the payment of the damage caused by such encumbrance.
This easement is not compulsory if the isolation of the immovable is due to
the proprietor's own acts. (564a)

Art. 650. The easement of right of way shall be established at the point least
prejudicial to the servient estate, and, insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be the
shortest. (565)

Art. 651. The width of the easement of right of way shall be that which is
sufficient for the needs of the dominant estate, and may accordingly be
changed from time to time. (566a)

Art. 652. Whenever a piece of land acquired by sale, exchange or partition,

is surrounded by other estates of the vendor, exchanger, or co-owner, he
shall be obliged to grant a right of way without indemnity.

In case of a simple donation, the donor shall be indemnified by the donee

for the establishment of the right of way. (567a)

Art. 653. In the case of the preceding article, if it is the land of the grantor
that becomes isolated, he may demand a right of way after paying a
indemnity. However, the donor shall not be liable for indemnity. (n)

Art. 654. If the right of way is permanent, the necessary repairs shall be
made by the owner of the dominant estate. A proportionate share of the
taxes shall be reimbursed by said owner to the proprietor of the servient
estate. (n)

Art. 655. If the right of way granted to a surrounded estate ceases to be

necessary because its owner has joined it to another abutting on a public
road, the owner of the servient estate may demand that the easement be
extinguished, returning what he may have received by way of indemnity.
The interest on the indemnity shall be deemed to be in payment of rent for
the use of the easement.

The same rule shall be applied in case a new road is opened giving access to
the isolated estate.

In both cases, the public highway must substantially meet the needs of the
dominant estate in order that the easement may be extinguished. (568a)

Art. 656. If it be indispensable for the construction, repair, improvement,

alteration or beautification of a building, to carry materials through the
estate of another, or to raise therein scaffolding or other objects necessary
for the work, the owner of such estate shall be obliged to permit the act,
after receiving payment of the proper indemnity for the damage caused
him. (569a)
Art. 657. Easements of the right of way for the passage of livestock known as
animal path, animal trail or any other, and those for watering places,
resting places and animal folds, shall be governed by the ordinances and
regulations relating thereto, and, in the absence thereof, by the usages and
customs of the place.

Without prejudice to rights legally acquired, the animal path shall not
exceed in any case the width of 75 meters, and the animal trail that of 37
meters and 50 centimeters.

Whenever it is necessary to establish a compulsory easement of the right of

way or for a watering place for animals, the provisions of this Section and
those of Articles 640 and 641 shall be observed. In this case the width shall
not exceed 10 meters. (570a)

SECTION 4. - Easement of Party Wall

Art. 658. The easement of party wall shall be governed by the provisions of
this Title, by the local ordinances and customs insofar as they do not
conflict with the same, and by the rules of co-ownership. (571a)

Art. 659. The existence of an easement of party wall is presumed, unless

there is a title, or exterior sign, or proof to the contrary:

(1) In dividing walls of adjoining buildings up to the point of common

elevation;

(2) In dividing walls of gardens or yards situated in cities, towns, or in

rural communities;

(3) In fences, walls and live hedges dividing rural lands. (572)

Art. 660. It is understood that there is an exterior sign, contrary to the

easement of party wall:
(1) Whenever in the dividing wall of buildings there is a window or
opening;

(2) Whenever the dividing wall is, on one side, straight and plumb on
all its facement, and on the other, it has similar conditions on the
upper part, but the lower part slants or projects outward;

(3) Whenever the entire wall is built within the boundaries of one of
the estates;
 (4) Whenever the dividing wall bears the burden of the binding
beams, floors and roof frame of one of the buildings, but not those of
the others;

(5) Whenever the dividing wall between courtyards, gardens, and

tenements is constructed in such a way that the coping sheds the
water upon only one of the estates;

(6) Whenever the dividing wall, being built of masonry, has stepping
stones, which at certain intervals project from the surface on one side
only, but not on the other;

(7) Whenever lands inclosed by fences or live hedges adjoin others

which are not inclosed.

In all these cases, the ownership of the walls, fences or hedges shall be
deemed to belong exclusively to the owner of the property or tenement
which has in its favor the presumption based on any one of these signs. (573)

Art. 661. Ditches or drains opened between two estates are also presumed
as common to both, if there is no title or sign showing the contrary.

There is a sign contrary to the part-ownership whenever the earth or dirt

removed to open the ditch or to clean it is only on one side thereof, in which
case the ownership of the ditch shall belong exclusively to the owner of the
land having this exterior sign in its favor. (574)

Art. 662. The cost of repairs and construction of party walls and the
maintenance of fences, live hedges, ditches, and drains owned in common,
shall be borne by all the owners of the lands or tenements having the party
wall in their favor, in proportion to the right of each.

Nevertheless, any owner may exempt himself from contributing to this

charge by renouncing his part-ownership, except when the party wall
supports a building belonging to him. (575)

Art. 663. If the owner of a building, supported by a party wall desires to

demolish the building, he may also renounce his part-ownership of the wall,
but the cost of all repairs and work necessary to prevent any damage which
the demolition may cause to the party wall, on this occasion only, shall be
borne by him. (576)

Art. 664. Every owner may increase the height of the party wall, doing at his
own expense and paying for any damage which may be caused by the work,
even though such damage be temporary.
The expenses of maintaining the wall in the part newly raised or deepened
at its foundation shall also be paid for by him; and, in addition, the
indemnity for the increased expenses which may be necessary for the
preservation of the party wall by reason of the greater height or depth
which has been given it.

If the party wall cannot bear the increased height, the owner desiring to
raise it shall be obliged to reconstruct it at his own expense and, if for this
purpose it be necessary to make it thicker, he shall give the space required
from his own land. (577)

Art. 665. The other owners who have not contributed in giving increased
height, depth or thickness to the wall may, nevertheless, acquire the right of
part-ownership therein, by paying proportionally the value of the work at
the time of the acquisition and of the land used for its increased thickness.
(578a)

Art. 666. Every part-owner of a party wall may use it in proportion to the
right he may have in the co-ownership, without interfering with the
common and respective uses by the other co-owners. (579a)

SECTION 5. - Easement of Light and View

Art. 667. No part-owner may, without the consent of the others, open
through the party wall any window or aperture of any kind. (580)

Art. 668. The period of prescription for the acquisition of an easement of

light and view shall be counted:

(1) From the time of the opening of the window, if it is through a party
wall; or

(2) From the time of the formal prohibition upon the proprietor of the
adjoining land or tenement, if the window is through a wall on the
dominant estate. (n)

Art. 669. When the distances in Article 670 are not observed, the owner of a
wall which is not party wall, adjoining a tenement or piece of land
belonging to another, can make in it openings to admit light at the height of
the ceiling joints or immediately under the ceiling, and of the size of thirty
centimeters square, and, in every case, with an iron grating imbedded in
the wall and with a wire screen.

Nevertheless, the owner of the tenement or property adjoining the wall in

which the openings are made can close them should he acquire part-
ownership thereof, if there be no stipulation to the contrary.
He can also obstruct them by constructing a building on his land or by
raising a wall thereon contiguous to that having such openings, unless an
easement of light has been acquired. (581a)

Art. 670. No windows, apertures, balconies, or other similar projections

which afford a direct view upon or towards an adjoining land or tenement
can be made, without leaving a distance of two meters between the wall in
which they are made and such contiguous property.

Neither can side or oblique views upon or towards such conterminous

property be had, unless there be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription.

(582a)

Art. 671. The distance referred to in the preceding article shall be measured
in cases of direct views from the outer line of the wall when the openings do
not project, from the outer line of the latter when they do, and in cases of
oblique view from the dividing line between the two properties. (583)

Art. 672. The provisions of Article 670 are not applicable to buildings
separated by a public way or alley, which is not less than three meters wide,
subject to special regulations and local ordinances. (584a)

Art. 673. Whenever by any title a right has been acquired to have direct
views, balconies or belvederes overlooking an adjoining property, the
owner of the servient estate cannot build thereon at less than a distance of
three meters to be measured in the manner provided in Article 671. Any
stipulation permitting distances less than those prescribed in Article 670 is
void. (585a)

SECTION 6. - Drainage of Buildings

Art. 674. The owner of a building shall be obliged to construct its roof or
covering in such manner that the rain water shall fall on his own land or on
a street or public place, and not on the land of his neighbor, even though the
adjacent land may belong to two or more persons, one of whom is the
owner of the roof. Even if it should fall on his own land, the owner shall be
obliged to collect the water in such a way as not to cause damage to the
adjacent land or tenement. (586a)

Art. 675. The owner of a tenement or a piece of land, subject to the

easement of receiving water falling from roofs, may build in such manner
as to receive the water upon his own roof or give it another outlet in
accordance with local ordinances or customs, and in such a way as not to
cause any nuisance or damage whatever to the dominant estate. (587)
Art. 676. Whenever the yard or court of a house is surrounded by other
houses, and it is not possible to give an outlet through the house itself to the
rain water collected thereon, the establishment of an easement of drainage
can be demanded, giving an outlet to the water at the point of the
contiguous lands or tenements where its egress may be easiest, and
establishing a conduit for the drainage in such manner as to cause the least
damage to the servient estate, after payment of the property indemnity. (583)

SECTION 7. - Intermediate Distances

and Works for Certain Constructions and Plantings

Art. 677. No constructions can be built or plantings made near fortified

places or fortresses without compliance with the conditions required in
special laws, ordinances, and regulations relating thereto. (589)

Art. 678. No person shall build any aqueduct, well, sewer, furnace, forge,
chimney, stable, depository of corrosive substances, machinery, or factory
which by reason of its nature or products is dangerous or noxious, without
observing the distances prescribed by the regulations and customs of the
place, and without making the necessary protective works, subject, in
regard to the manner thereof, to the conditions prescribed by such
regulations. These prohibitions cannot be altered or renounced by
stipulation on the part of the adjoining proprietors.

In the absence of regulations, such precautions shall be taken as may be

considered necessary, in order to avoid any damage to the neighboring
lands or tenements. (590a)

Art. 679. No trees shall be planted near a tenement or piece of land

belonging to another except at the distance authorized by the ordinances or
customs of the place, and, in the absence thereof, at a distance of at least
two meters from the dividing line of the estates if tall trees are planted and
at a distance of at least fifty centimeters if shrubs or small trees are planted.

Every landowner shall have the right to demand that trees hereafter planted
at a shorter distance from his land or tenement be uprooted.

The provisions of this article also apply to trees which have grown
spontaneously. (591a)

Art. 680. If the branches of any tree should extend over a neighboring
estate, tenement, garden or yard, the owner of the latter shall have the right
to demand that they be cut off insofar as they may spread over his property,
and, if it be the roots of a neighboring tree which should penetrate into the
land of another, the latter may cut them off himself within his property. (592)
Art. 681. Fruits naturally falling upon adjacent land belong to the owner of
said land. (n)

SECTION 8. - Easement Against Nuisance (n)

Art. 682. Every building or piece of land is subject to the easement which
prohibits the proprietor or possessor from committing nuisance through
noise, jarring, offensive odor, smoke, heat, dust, water, glare and other
causes.

Art. 683. Subject to zoning, health, police and other laws and regulations,
factories and shops may be maintained provided the least possible
annoyance is caused to the neighborhood.

SECTION 9. - Lateral and Subjacent Support (n)

Sec. 684. No proprietor shall make such excavations upon his land as to
deprive any adjacent land or building of sufficient lateral or subjacent
support.

Art. 685. Any stipulation or testamentary provision allowing excavations

that cause danger to an adjacent land or building shall be void.

Art. 686. The legal easement of lateral and subjacent support is not only for
buildings standing at the time the excavations are made but also for
constructions that may be erected.

Art. 687. Any proprietor intending to make any excavation contemplated in

the three preceding articles shall notify all owners of adjacent lands.

CHAPTER 3
VOLUNTARY EASEMENTS

Art. 688. Every owner of a tenement or piece of land may establish thereon
the easements which he may deem suitable, and in the manner and form
which he may deem best, provided he does not contravene the laws, public
policy or public order. (594)

Art. 689. The owner of a tenement or piece of land, the usufruct of which
belongs to another, may impose thereon, without the consent of the
usufructuary, any servitudes which will not injure the right of usufruct. (595)

Art. 690. Whenever the naked ownership of a tenement or piece of land

belongs to one person and the beneficial ownership to another, no
perpetual voluntary easement may be established thereon without the
consent of both owners. (596)

Art. 691. In order to impose an easement on an undivided tenement, or

piece of land, the consent of all the co-owners shall be required.

The consent given by some only, must be held in abeyance until the last one
of all the co-owners shall have expressed his conformity.

But the consent given by one of the co-owners separately from the others
shall bind the grantor and his successors not to prevent the exercise of the
right granted. (597a)

Art. 692. The title and, in a proper case, the possession of an easement
acquired by prescription shall determine the rights of the dominant estate
and the obligations of the servient estate. In default thereof, the easement
shall be governed by such provisions of this Title as are applicable thereto.
(598)

Art. 693. If the owner of the servient estate should have bound himself,
upon the establishment of the easement, to bear the cost of the work
required for the use and preservation thereof, he may free himself from
this obligation by renouncing his property to the owner of the dominant
estate. (599)

Title VIII. - NUISANCE (n)

Art. 694. A nuisance is any act, omission, establishment, business,

condition of property, or anything else which:
(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or

(3) Shocks, defies or disregards decency or morality; or

(4) Obstructs or interferes with the free passage of any public

highway or street, or any body of water; or

(5) Hinders or impairs the use of property.

Art. 695. Nuisance is either public or private. A public nuisance affects a

community or neighborhood or any considerable number of persons,
although the extent of the annoyance, danger or damage upon individuals
may be unequal. A private nuisance is one that is not included in the
foregoing definition.
Art. 696. Every successive owner or possessor of property who fails or
refuses to abate a nuisance in that property started by a former owner or
possessor is liable therefor in the same manner as the one who created it.

Art. 697. The abatement of a nuisance does not preclude the right of any
person injured to recover damages for its past existence.

Art. 698. Lapse of time cannot legalize any nuisance, whether public or
private.

Art. 699. The remedies against a public nuisance are:

(1) A prosecution under the Penal Code or any local ordinance: or

(2) A civil action; or

(3) Abatement, without judicial proceedings.

Art. 700. The district health officer shall take care that one or all of the
remedies against a public nuisance are availed of.

Art. 701. If a civil action is brought by reason of the maintenance of a public

nuisance, such action shall be commenced by the city or municipal mayor.

Art. 702. The district health officer shall determine whether or not
abatement, without judicial proceedings, is the best remedy against a public
nuisance.

Art. 703. A private person may file an action on account of a public

nuisance, if it is specially injurious to himself.

Art. 704. Any private person may abate a public nuisance which is specially
injurious to him by removing, or if necessary, by destroying the thing which
constitutes the same, without committing a breach of the peace, or doing
unnecessary injury. But it is necessary:

(1) That demand be first made upon the owner or possessor of the
property to abate the nuisance;

(2) That such demand has been rejected;

(3) That the abatement be approved by the district health officer and
executed with the assistance of the local police; and

(4) That the value of the destruction does not exceed three thousand
pesos.
Art. 705. The remedies against a private nuisance are:
(1) A civil action; or

(2) Abatement, without judicial proceedings.

Art. 706. Any person injured by a private nuisance may abate it by

removing, or if necessary, by destroying the thing which constitutes the
nuisance, without committing a breach of the peace or doing unnecessary
injury. However, it is indispensable that the procedure for extrajudicial
abatement of a public nuisance by a private person be followed.

Art. 707. A private person or a public official extrajudicially abating a

nuisance shall be liable for damages:

(1) If he causes unnecessary injury; or

(2) If an alleged nuisance is later declared by the courts to be not a

real nuisance.

Title IX. - REGISTRY OF PROPERTY

Art. 708. The Registry of Property has for its object the inscription or
annotation of acts and contracts relating to the ownership and other rights
over immovable property. (605)

Art. 709. The titles of ownership, or of other rights over immovable

property, which are not duly inscribed or annotated in the Registry of
Property shall not prejudice third persons. (606)

Art. 710. The books in the Registry of Property shall be public for those who
have a known interest in ascertaining the status of the immovables or real
rights annotated or inscribed therein. (607)

Art. 711. For determining what titles are subject to inscription or

annotation, as well as the form, effects, and cancellation of inscriptions and
annotations, the manner of keeping the books in the Registry, and the value
of the entries contained in said books, the provisions of the Mortgage Law,
the Land Registration Act, and other special laws shall govern. (608a)

BOOK III

DIFFERENT MODES OF ACQUIRING OWNERSHIP

PRELIMINARY PROVISION

Art. 712. Ownership is acquired by occupation and by intellectual creation.

Ownership and other real rights over property are acquired and
transmitted by law, by donation, by estate and intestate succession, and in
consequence of certain contracts, by tradition.

They may also be acquired by means of prescription. (609a)

Title I. - OCCUPATION

Art. 713. Things appropriable by nature which are without an owner, such
as animals that are the object of hunting and fishing, hidden treasure and
abandoned movables, are acquired by occupation. (610)

Art. 714. The ownership of a piece of land cannot be acquired by occupation.

(n)

Art. 715. The right to hunt and to fish is regulated by special laws. (611)

Art. 716. The owner of a swarm of bees shall have a right to pursue them to
another's land, indemnifying the possessor of the latter for the damage. If
the owner has not pursued the swarm, or ceases to do so within two
consecutive days, the possessor of the land may occupy or retain the same.
The owner of domesticated animals may also claim them within twenty days
to be counted from their occupation by another person. This period having
expired, they shall pertain to him who has caught and kept them. (612a)

Art. 717. Pigeons and fish which from their respective breeding places pass
to another pertaining to a different owner shall belong to the latter,
provided they have not been enticed by some article of fraud. (613a)

Art. 718. He who by chance discovers hidden treasure in another's property

shall have the right granted him in article 438 of this Code. (614)

Art. 719. Whoever finds a movable, which is not treasure, must return it to
its previous possessor. If the latter is unknown, the finder shall
immediately deposit it with the mayor of the city or municipality where the
finding has taken place.

The finding shall be publicly announced by the mayor for two consecutive
weeks in the way he deems best.

If the movable cannot be kept without deterioration, or without expenses

which considerably diminish its value, it shall be sold at public auction
eight days after the publication.

Six months from the publication having elapsed without the owner having
appeared, the thing found, or its value, shall be awarded to the finder. The
finder and the owner shall be obliged, as the case may be, to reimburse the
expenses. (615a)

Art. 720. If the owner should appear in time, he shall be obliged to pay, as a
reward to the finder, one-tenth of the sum or of the price of the thing found.
(616a)

Title II. - INTELLECTUAL CREATION

Art. 721. By intellectual creation, the following persons acquire ownership:

(1) The author with regard to his literary, dramatic, historical, legal,
philosophical, scientific or other work;

(2) The composer; as to his musical composition;

(3) The painter, sculptor, or other artist, with respect to the product
of his art;

(4) The scientist or technologist or any other person with regard to

his discovery or invention. (n)

Art. 722. The author and the composer, mentioned in Nos. 1 and 2 of the
preceding article, shall have the ownership of their creations even before
the publication of the same. Once their works are published, their rights are
governed by the Copyright laws.

The painter, sculptor or other artist shall have dominion over the product
of his art even before it is copyrighted.

The scientist or technologist has the ownership of his discovery or

invention even before it is patented. (n)

Art. 723. Letters and other private communications in writing are owned by
the person to whom they are addressed and delivered, but they cannot be
published or disseminated without the consent of the writer or his heirs.
However, the court may authorize their publication or dissemination if the
public good or the interest of justice so requires. (n)

Art. 724. Special laws govern copyright and patent. (429a)

Title III. - DONATION

CHAPTER 1
NATURE OF DONATIONS
Art. 725. Donation is an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who accepts it. (618a)

Art. 726. When a person gives to another a thing or right on account of the
latter's merits or of the services rendered by him to the donor, provided
they do not constitute a demandable debt, or when the gift imposes upon
the donee a burden which is less than the value of the thing given, there is
also a donation. (619)

Art. 727. Illegal or impossible conditions in simple and remuneratory

donations shall be considered as not imposed. (n)

Art. 728. Donations which are to take effect upon the death of the donor
partake of the nature of testamentary provisions, and shall be governed by
the rules established in the Title on Succession. (620)

Art. 729. When the donor intends that the donation shall take effect during
the lifetime of the donor, though the property shall not be delivered till
after the donor's death, this shall be a donation inter vivos. The fruits of the
property from the time of the acceptance of the donation, shall pertain to
the donee, unless the donor provides otherwise. (n)

Art. 730. The fixing of an event or the imposition of a suspensive condition,

which may take place beyond the natural expectation of life of the donor,
does not destroy the nature of the act as a donation inter vivos, unless a
contrary intention appears. (n)

Art. 731. When a person donates something, subject to the resolutory

condition of the donor's survival, there is a donation inter vivos. (n)

Art. 732. Donations which are to take effect inter vivos shall be governed by
the general provisions on contracts and obligations in all that is not
determined in this Title. (621)

Art. 733. Donations with an onerous cause shall be governed by the rules on
contracts and remuneratory donations by the provisions of the present Title
as regards that portion which exceeds the value of the burden imposed. (622)

Art. 734. The donation is perfected from the moment the donor knows of
the acceptance by the donee. (623)

CHAPTER 2
PERSONS WHO MAY GIVE OR RECEIVE A DONATION
Art. 735. All persons who may contract and dispose of their property may
make a donation. (624)

Art. 736. Guardians and trustees cannot donate the property entrusted to
them. (n)

Art. 737. The donor's capacity shall be determined as of the time of the
making of the donation. (n)

Art. 738. Al those who are not specially disqualified by law therefor may
accept donations. (625)

Art. 739. The following donations shall be void:

(1) Those made between persons who were guilty of adultery or

concubinage at the time of the donation;

(2) Those made between persons found guilty of the same criminal
offense, in consideration thereof;

(3) Those made to a public officer or his wife, descedants and

ascendants, by reason of his office.

In the case referred to in No. 1, the action for declaration of nullity may be
brought by the spouse of the donor or donee; and the guilt of the donor and
donee may be proved by preponderance of evidence in the same action. (n)

Art. 740. Incapacity to succeed by will shall be applicable to donations inter

vivos. (n)

Art. 741. Minors and others who cannot enter into a contract may become
donees but acceptance shall be done through their parents or legal
representatives. (626a)

Art. 742. Donations made to conceived and unborn children may be

accepted by those persons who would legally represent them if they were
already born. (627)

Art. 743. Donations made to incapacitated persons shall be void, though

simulated under the guise of another contract or through a person who is
interposed. (628)

Art. 744. Donations of the same thing to two or more different donees shall
be governed by the provisions concerning the sale of the same thing to two
or more different persons. (n)
Art. 745. The donee must accept the donation personally, or through an
authorized person with a special power for the purpose, or with a general
and sufficient power; otherwise, the donation shall be void. (630)

Art. 746. Acceptance must be made during the lifetime of the donor and of
the donee. (n)

Art. 747. Persons who accept donations in representation of others who

may not do so by themselves, shall be obliged to make the notification and
notation of which Article 749 speaks. (631)

Art. 748. The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the

document representing the right donated.

If the value of the personal property donated exceeds five thousand pesos,
the donation and the acceptance shall be made in writing, otherwise, the
donation shall be void. (632a)

Art. 749. In order that the donation of an immovable may be valid, it must
be made in a public document, specifying therein the property donated and
the value of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate

public document, but it shall not take effect unless it is done during the
lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be

notified thereof in an authentic form, and this step shall be noted in both
instruments. (633)

CHAPTER 3
EFFECT OF DONATIONS AND LIMITATIONS THEREON

Art. 750. The donations may comprehend all the present property of the
donor, or part thereof, provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself, and of all relatives
who, at the time of the acceptance of the donation, are by law entitled to be
supported by the donor. Without such reservation, the donation shall be
reduced in petition of any person affected. (634a)

Art. 751. Donations cannot comprehend future property.

By future property is understood anything which the donor cannot dispose

of at the time of the donation. (635)
Art. 752. The provisions of Article 750 notwithstanding, no person may give
or receive, by way of donation, more than he may give or receive by will.

The donation shall be inofficious in all that it may exceed this limitation.
(636)

Art. 753. When a donation is made to several persons jointly, it is

understood to be in equal shares, and there shall be no right of accretion
among them, unless the donor has otherwise provided.

The preceding paragraph shall not be applicable to donations made to the

husband and wife jointly, between whom there shall be a right of accretion,
if the contrary has not been provided by the donor. (637)

Art. 754. The donee is subrogated to all the rights and actions which in case
of eviction would pertain to the donor. The latter, on the other hand, is not
obliged to warrant the things donated, save when the donation is onerous,
in which case the donor shall be liable for eviction to the concurrence of the
burden.

The donor shall also be liable for eviction or hidden defects in case of bad
faith on his part. (638a)

Art. 755. The right to dispose of some of the things donated, or of some
amount which shall be a charge thereon, may be reserved by the donor; but
if he should die without having made use of this right, the property or
amount reserved shall belong to the donee. (639)

Art. 756. The ownership of property may also be donated to one person and
the usufruct to another or others, provided all the donees are living at the
time of the donation. (640a)

Art. 757. Reversion may be validly established in favor of only the donor for
any case and circumstances, but not in favor of other persons unless they
are all living at the time of the donation.

Any reversion stipulated by the donor in favor of a third person in violation

of what is provided in the preceding paragraph shall be void, but shall not
nullify the donation. (614a)

Art. 758. When the donation imposes upon the donee the obligation to pay
the debts of the donor, if the clause does not contain any declaration to the
contrary, the former is understood to be liable to pay only the debts which
appear to have been previously contracted. In no case shall the donee be
responsible for the debts exceeding the value of the property donated,
unless a contrary intention clearly appears. (642a)
Art. 759. There being no stipulation regarding the payment of debts, the
donee shall be responsible therefor only when the donation has been made
in fraud of creditors.

The donation is always presumed to be in fraud of creditors, when at the

time thereof the donor did not reserve sufficient property to pay his debts
prior to the donation. (643)

CHAPTER 4
REVOCATION AND REDUCTION OF DONATIONS

Art. 760. Every donation inter vivos, made by a person having no children
or descendants, legitimate or legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced as provided in the next article, by
the happening of any of these events:
(1) If the donor, after the donation, should have legitimate or
legitimated or illegitimate children, even though they be posthumous;

(2) If the child of the donor, whom the latter believed to be dead when
he made the donation, should turn out to be living;

(3) If the donor subsequently adopt a minor child. (644a)

Art. 761. In the cases referred to in the preceding article, the donation shall
be revoked or reduced insofar as it exceeds the portion that may be freely
disposed of by will, taking into account the whole estate of the donor at the
time of the birth, appearance or adoption of a child. (n)

Art. 762. Upon the revocation or reduction of the donation by the birth,
appearance or adoption of a child, the property affected shall be returned
or its value if the donee has sold the same.

If the property is mortgaged, the donor may redeem the mortgage, by

paying the amount guaranteed, with a right to recover the same from the
donee.

When the property cannot be returned, it shall be estimated at what it was

worth at the time of the donation. (645a)

Art. 763. The action for revocation or reduction on the grounds set forth in
article 760 shall prescribe after four years from the birth of the first child,
or from his legitimation, recognition or adoption, or from the judicial
declaration of filiation, or from the time information was received
regarding the existence of the child believed dead.
This action cannot be renounced, and is transmitted, upon the death of the
donor, to his legitimate and illegitimate children and descendants. (646a)

Art. 764. The donation shall be revoked at the instance of the donor, when
the donee fails to comply with any of the conditions which the former
imposed upon the latter.

In this case, the property donated shall be returned to the donor, the
alienations made by the donee and the mortgages imposed thereon by him
being void, with the limitations established, with regard to third persons, by
the Mortgage Law and the Land Registration Laws.

This action shall prescribe after four years from the noncompliance with
the condition, may be transmitted to the heirs of the donor, and may be
exercised against the donee's heirs. (647a)

Art. 765. The donation may also be revoked at the instance of the donor, by
reason of ingratitude in the following cases:

(1) If the donee should commit some offense against the person, the
honor or the property of the donor, or of his wife or children under
his parental authority;

(2) If the donee imputes to the donor any criminal offense, or any act
involving moral turpitude, even though he should prove it, unless the
crime or the act has been committed against the donee himself, his
wife or children under his authority;

(3) If he unduly refuses him support when the donee is legally or

morally bound to give support to the donor. (648a)

Art. 766. Although the donation is revoked on account of ingratitude,

nevertheless, the alienations and mortgages effected before the notation of
the complaint for revocation in the Registry of Property shall subsist.
Later ones shall be void. (649)

Art. 767. In the case referred to in the first paragraph of the preceding
article, the donor shall have a right to demand from the donee the value of
property alienated which he cannot recover from third persons, or the sum
for which the same has been mortgaged.

The value of said property shall be fixed as of the time of the donation. (650)

Art. 768. When the donation is revoked for any of the causes stated in
Article 760, or by reason of ingratitude, or when it is reduced because it is
inofficious, the donee shall not return the fruits except from the filing of the
complaint.
If the revocation is based upon noncompliance with any of the conditions
imposed in the donation, the donee shall return not only the property but
also the fruits thereof which he may have received after having failed to
fulfill the condition. (651)

Art. 769. The action granted to the donor by reason of ingratitude cannot be
renounced in advance. This action prescribes within one year, to be counted
from the time the donor had knowledge of the fact and it was possible for
him to bring the action. (652)

Art. 770. This action shall not be transmitted to the heirs of the donor, if the
latter did not institute the same, although he could have done so, and even
if he should die before the expiration of one year.

Neither can this action be brought against the heir of the donee, unless
upon the latter's death the complaint has been filed. (653)

Art. 771. Donations which in accordance with the provisions of Article 752,
are inofficious, bearing in mind the estimated net value of the donor's
property at the time of his death, shall be reduced with regard to the excess;
but this reduction shall not prevent the donations from taking effect during
the life of the donor, nor shall it bar the donee from appropriating the
fruits.

For the reduction of donations the provisions of this Chapter and of Articles
911 and 912 of this Code shall govern. (654)

Art. 772. Only those who at the time of the donor's death have a right to the
legitime and their heirs and successors in interest may ask for the
reduction or inofficious donations.

Those referred to in the preceding paragraph cannot renounce their right

during the lifetime of the donor, either by express declaration, or by
consenting to the donation.

The donees, devisees and legatees, who are not entitled to the legitime and
the creditors of the deceased can neither ask for the reduction nor avail
themselves thereof. (655a)

Art. 773. If, there being two or more donations, the disposable portion is
not sufficient to cover all of them, those of the more recent date shall be
suppressed or reduced with regard to the excess. (656)

Title IV. - SUCCESSION

CHAPTER 1
 GENERAL PROVISIONS

Art. 774. Succession is a mode of acquisition by virtue of which the

property, rights and obligations to the extent of the value of the inheritance,
of a person are transmitted through his death to another or others either by
his will or by operation of law. (n)

Art. 775. In this Title, "decedent" is the general term applied to the person
whose property is transmitted through succession, whether or not he left a
will. If he left a will, he is also called the testator. (n)

Art. 776. The inheritance includes all the property, rights and obligations of
a person which are not extinguished by his death. (659)

Art. 777. The rights to the succession are transmitted from the moment of
the death of the decedent. (657a)

Art. 778. Succession may be:

(1) Testamentary;

(2) Legal or intestate; or

(3) Mixed. (n)

Art. 779. Testamentary succession is that which results from the

designation of an heir, made in a will executed in the form prescribed by
law. (n)

Art. 780. Mixed succession is that effected partly by will and partly by
operation of law. (n)

Art. 781. The inheritance of a person includes not only the property and the
transmissible rights and obligations existing at the time of his death, but
also those which have accrued thereto since the opening of the succession.
(n)

Art. 782. An heir is a person called to the succession either by the provision
of a will or by operation of law.

Devisees and legatees are persons to whom gifts of real and personal
property are respectively given by virtue of a will. (n)

CHAPTER 2
TESTAMENTARY SUCCESSION
 SECTION 1. - Wills

SUBSECTION 1. - Wills in General

Art. 783. A will is an act whereby a person is permitted, with the formalities
prescribed by law, to control to a certain degree the disposition of this
estate, to take effect after his death. (667a)

Art. 784. The making of a will is a strictly personal act; it cannot be left in
whole or in part of the discretion of a third person, or accomplished
through the instrumentality of an agent or attorney. (670a)

Art. 785. The duration or efficacy of the designation of heirs, devisees or

legatees, or the determination of the portions which they are to take, when
referred to by name, cannot be left to the discretion of a third person. (670a)

Art. 786. The testator may entrust to a third person the distribution of
specific property or sums of money that he may leave in general to specified
classes or causes, and also the designation of the persons, institutions or
establishments to which such property or sums are to be given or applied.
(671a)

Art. 787. The testator may not make a testamentary disposition in such
manner that another person has to determine whether or not it is to be
operative. (n)

Art. 788. If a testamentary disposition admits of different interpretations,

in case of doubt, that interpretation by which the disposition is to be
operative shall be preferred. (n)

Art. 789. When there is an imperfect description, or when no person or

property exactly answers the description, mistakes and omissions must be
corrected, if the error appears from the context of the will or from extrinsic
evidence, excluding the oral declarations of the testator as to his intention;
and when an uncertainty arises upon the face of the will, as to the
application of any of its provisions, the testator's intention is to be
ascertained from the words of the will, taking into consideration the
circumstances under which it was made, excluding such oral declarations.
(n)

Art. 790. The words of a will are to be taken in their ordinary and
grammatical sense, unless a clear intention to use them in another sense
can be gathered, and that other can be ascertained.

Technical words in a will are to be taken in their technical sense, unless the
context clearly indicates a contrary intention, or unless it satisfactorily
appears that he was unacquainted with such technical sense. (675a)
Art. 791. The words of a will are to receive an interpretation which will give
to every expression some effect, rather than one which will render any of
the expressions inoperative; and of two modes of interpreting a will, that is
to be preferred which will prevent intestacy. (n)

Art. 792. The invalidity of one of several dispositions contained in a will

does not result in the invalidity of the other dispositions, unless it is to be
presumed that the testator would not have made such other dispositions if
the first invalid disposition had not been made. (n)

Art. 793. Property acquired after the making of a will shall only pass
thereby, as if the testator had possessed it at the time of making the will,
should it expressly appear by the will that such was his intention. (n)

Art. 794. Every devise or legacy shall cover all the interest which the
testator could device or bequeath in the property disposed of, unless it
clearly appears from the will that he intended to convey a less interest. (n)

Art. 795. The validity of a will as to its form depends upon the observance of
the law in force at the time it is made. (n)

SUBSECTION 2. - Testamentary Capacity and Intent

Art. 796. All persons who are not expressly prohibited by law may make a
will. (662)

Art. 797. Persons of either sex under eighteen years of age cannot make a
will. (n)

Art. 798. In order to make a will it is essential that the testator be of sound
mind at the time of its execution. (n)

Art. 799. To be of sound mind, it is not necessary that the testator be in full
possession of all his reasoning faculties, or that his mind be wholly
unbroken, unimpaired, or unshattered by disease, injury or other cause.

It shall be sufficient if the testator was able at the time of making the will to
know the nature of the estate to be disposed of, the proper objects of his
bounty, and the character of the testamentary act. (n)

Art. 800. The law presumes that every person is of sound mind, in the
absence of proof to the contrary.

The burden of proof that the testator was not of sound mind at the time of
making his dispositions is on the person who opposes the probate of the
will; but if the testator, one month, or less, before making his will was
publicly known to be insane, the person who maintains the validity of the
will must prove that the testator made it during a lucid interval. (n)

Art. 801. Supervening incapacity does not invalidate an effective will, nor is
the will of an incapable validated by the supervening of capacity. (n)

Art. 802. A married woman may make a will without the consent of her
husband, and without the authority of the court. (n)

Art. 803. A married woman may dispose by will of all her separate property
as well as her share of the conjugal partnership or absolute community
property. (n)

SUBSECTION 3. - Forms of Wills

Art. 804. Every will must be in writing and executed in a language or dialect
known to the testator. (n)

Art. 805. Every will, other than a holographic will, must be subscribed at
the end thereof by the testator himself or by the testator's name written by
some other person in his presence, and by his express direction, and
attested and subscribed by three or more credible witnesses in the presence
of the testator and of one another.

The testator or the person requested by him to write his name and the
instrumental witnesses of the will, shall also sign, as aforesaid, each and
every page thereof, except the last, on the left margin, and all the pages
shall be numbered correlatively in letters placed on the upper part of each
page.

The attestation shall state the number of pages used upon which the will is
written, and the fact that the testator signed the will and every page thereof,
or caused some other person to write his name, under his express
direction, in the presence of the instrumental witnesses, and that the latter
witnessed and signed the will and all the pages thereof in the presence of
the testator and of one another.

If the attestation clause is in a language not known to the witnesses, it shall

be interpreted to them. (n)

Art. 806. Every will must be acknowledged before a notary public by the
testator and the witnesses. The notary public shall not be required to retain
a copy of the will, or file another with the Office of the Clerk of Court. (n)
Art. 807. If the testator be deaf, or a deaf-mute, he must personally read the
will, if able to do so; otherwise, he shall designate two persons to read it and
communicate to him, in some practicable manner, the contents thereof. (n)

Art. 808. If the testator is blind, the will shall be read to him twice; once, by
one of the subscribing witnesses, and again, by the notary public before
whom the will is acknowledged. (n)

Art. 809. In the absence of bad faith, forgery, or fraud, or undue and
improper pressure and influence, defects and imperfections in the form of
attestation or in the language used therein shall not render the will invalid
if it is proved that the will was in fact executed and attested in substantial
compliance with all the requirements of Article 805. (n)

Art. 810. A person may execute a holographic will which must be entirely
written, dated, and signed by the hand of the testator himself. It is subject
to no other form, and may be made in or out of the Philippines, and need
not be witnessed. (678, 688a)

Art. 811. In the probate of a holographic will, it shall be necessary that at

least one witness who knows the handwriting and signature of the testator
explicitly declare that the will and the signature are in the handwriting of
the testator. If the will is contested, at least three of such witnesses shall be
required.

In the absence of any competent witness referred to in the preceding

paragraph, and if the court deem it necessary, expert testimony may be
resorted to. (619a)

Art. 812. In holographic wills, the dispositions of the testator written below
his signature must be dated and signed by him in order to make them valid
as testamentary dispositions. (n)

Art. 813. When a number of dispositions appearing in a holographic will are

signed without being dated, and the last disposition has a signature and a
date, such date validates the dispositions preceding it, whatever be the time
of prior dispositions. (n)

Art. 814. In case of any insertion, cancellation, erasure or alteration in a

holographic will, the testator must authenticate the same by his full
signature. (n)

Art. 815. When a Filipino is in a foreign country, he is authorized to make a

will in any of the forms established by the law of the country in which he
may be. Such will may be probated in the Philippines. (n)
Art. 816. The will of an alien who is abroad produces effect in the
Philippines if made with the formalities prescribed by the law of the place
in which he resides, or according to the formalities observed in his country,
or in conformity with those which this Code prescribes. (n)

Art. 817. A will made in the Philippines by a citizen or subject of another

country, which is executed in accordance with the law of the country of
which he is a citizen or subject, and which might be proved and allowed by
the law of his own country, shall have the same effect as if executed
according to the laws of the Philippines. (n)

Art. 818. Two or more persons cannot make a will jointly, or in the same
instrument, either for their reciprocal benefit or for the benefit of a third
person. (669)

Art. 819. Wills, prohibited by the preceding article, executed by Filipinos in

a foreign country shall not be valid in the Philippines, even though
authorized by the laws of the country where they may have been executed.
(733a)

SUBSECTION 4. - Witnesses to Wills

Art. 820. Any person of sound mind and of the age of eighteen years or
more, and not bind, deaf or dumb, and able to read and write, may be a
witness to the execution of a will mentioned in Article 805 of this Code. (n)

Art. 821. The following are disqualified from being witnesses to a will:

(1) Any person not domiciled in the Philippines;

(2) Those who have been convicted of falsification of a document,

perjury or false testimony. (n)

Art. 822. If the witnesses attesting the execution of a will are competent at
the time of attesting, their becoming subsequently incompetent shall not
prevent the allowance of the will. (n)

Art. 823. If a person attests the execution of a will, to whom or to whose

spouse, or parent, or child, a devise or legacy is given by such will, such
devise or legacy shall, so far only as concerns such person, or spouse, or
parent, or child of such person, or any one claiming under such person or
spouse, or parent, or child, be void, unless there are three other competent
witnesses to such will. However, such person so attesting shall be admitted
as a witness as if such devise or legacy had not been made or given. (n)
Art. 824. A mere charge on the estate of the testator for the payment of
debts due at the time of the testator's death does not prevent his creditors
from being competent witnesses to his will. (n)

SUBSECTION 5. - Codicils and Incorporation by Reference

Art. 825. A codicil is supplement or addition to a will, made after the

execution of a will and annexed to be taken as a part thereof, by which
disposition made in the original will is explained, added to, or altered. (n)

Art. 826. In order that a codicil may be effective, it shall be executed as in

the case of a will. (n)

Art. 827. If a will, executed as required by this Code, incorporates into itself
by reference any document or paper, such document or paper shall not be
considered a part of the will unless the following requisites are present:

(1) The document or paper referred to in the will must be in existence

at the time of the execution of the will;

(2) The will must clearly describe and identify the same, stating
among other things the number of pages thereof;

(3) It must be identified by clear and satisfactory proof as the

document or paper referred to therein; and

(4) It must be signed by the testator and the witnesses on each and
every page, except in case of voluminous books of account or
inventories. (n)

SUBSECTION 6. - Revocation of Wills and Testamentary Dispositions

Art. 828. A will may be revoked by the testator at any time before his death.
Any waiver or restriction of this right is void. (737a)

Art. 829. A revocation done outside the Philippines, by a person who does
not have his domicile in this country, is valid when it is done according to
the law of the place where the will was made, or according to the law of the
place in which the testator had his domicile at the time; and if the
revocation takes place in this country, when it is in accordance with the
provisions of this Code. (n)

Art. 830. No will shall be revoked except in the following cases:

(1) By implication of law; or

 (2) By some will, codicil, or other writing executed as provided in case
of wills; or

(3) By burning, tearing, cancelling, or obliterating the will with the

intention of revoking it, by the testator himself, or by some other
person in his presence, and by his express direction. If burned, torn,
cancelled, or obliterated by some other person, without the express
direction of the testator, the will may still be established, and the
estate distributed in accordance therewith, if its contents, and due
execution, and the fact of its unauthorized destruction, cancellation,
or obliteration are established according to the Rules of Court. (n)

Art. 831. Subsequent wills which do not revoke the previous ones in an
express manner, annul only such dispositions in the prior wills as are
inconsistent with or contrary to those contained in the latter wills. (n)

Art. 832. A revocation made in a subsequent will shall take effect, even if
the new will should become inoperative by reason of the incapacity of the
heirs, devisees or legatees designated therein, or by their renunciation. (740a)

Art. 833. A revocation of a will based on a false cause or an illegal cause is

null and void. (n)

Art. 834. The recognition of an illegitimate child does not lose its legal
effect, even though the will wherein it was made should be revoked. (714)

SUBSECTION 7. - Republication and Revival of Wills

Art. 835. The testator cannot republish, without reproducing in a

subsequent will, the dispositions contained in a previous one which is void
as to its form. (n)

Art. 836. The execution of a codicil referring to a previous will has the effect
of republishing the will as modified by the codicil. (n)

Art. 837. If after making a will, the testator makes a second will expressly
revoking the first, the revocation of the second will does not revive the first
will, which can be revived only by another will or codicil. (739a)

SUBSECTION 8. - Allowance and Disallowance of Wills

Art. 838. No will shall pass either real or personal property unless it is
proved and allowed in accordance with the Rules of Court.
The testator himself may, during his lifetime, petition the court having
jurisdiction for the allowance of his will. In such case, the pertinent
provisions of the Rules of Court for the allowance of wills after the
testator's a death shall govern.

The Supreme Court shall formulate such additional Rules of Court as may
be necessary for the allowance of wills on petition of the testator.

Subject to the right of appeal, the allowance of the will, either during the
lifetime of the testator or after his death, shall be conclusive as to its due
execution. (n)

Art. 839. The will shall be disallowed in any of the following cases:

(1) If the formalities required by law have not been complied with;

(2) If the testator was insane, or otherwise mentally incapable of

making a will, at the time of its execution;

(3) If it was executed through force or under duress, or the influence

of fear, or threats;

(4) If it was procured by undue and improper pressure and influence,

on the part of the beneficiary or of some other person;

(5) If the signature of the testator was procured by fraud;

(6) If the testator acted by mistake or did not intend that the
instrument he signed should be his will at the time of affixing his
signature thereto. (n)

SECTION 2. - Institution of Heir

Art. 840. Institution of heir is an act by virtue of which a testator designates

in his will the person or persons who are to succeed him in his property and
transmissible rights and obligations. (n)

Art. 841. A will shall be valid even though it should not contain an
institution of an heir, or such institution should not comprise the entire
estate, and even though the person so instituted should not accept the
inheritance or should be incapacitated to succeed.

In such cases the testamentary dispositions made in accordance with law

shall be complied with and the remainder of the estate shall pass to the
legal heirs. (764)
Art. 842. One who has no compulsory heirs may dispose by will of all his
estate or any part of it in favor of any person having capacity to succeed.

One who has compulsory heirs may dispose of his estate provided he does
not contravene the provisions of this Code with regard to the legitime of
said heirs. (763a)

Art. 843. The testator shall designate the heir by his name and surname,
and when there are two persons having the same names, he shall indicate
some circumstance by which the instituted heir may be known.

Even though the testator may have omitted the name of the heir, should he
designate him in such manner that there can be no doubt as to who has
been instituted, the institution shall be valid. (772)

Art. 844. An error in the name, surname, or circumstances of the heir shall
not vitiate the institution when it is possible, in any other manner, to know
with certainty the person instituted.

If among persons having the same names and surnames, there is a

similarity of circumstances in such a way that, even with the use of the
other proof, the person instituted cannot be identified, none of them shall
be an heir. (773a)

Art. 845. Every disposition in favor of an unknown person shall be void,

unless by some event or circumstance his identity becomes certain.
However, a disposition in favor of a definite class or group of persons shall
be valid. (750a)

Art. 846. Heirs instituted without designation of shares shall inherit in

equal parts. (765)

Art. 847. When the testator institutes some heirs individually and others
collectively as when he says, "I designate as my heirs A and B, and the
children of C," those collectively designated shall be considered as
individually instituted, unless it clearly appears that the intention of the
testator was otherwise. (769a)

Art. 848. If the testator should institute his brothers and sisters, and he has
some of full blood and others of half blood, the inheritance shall be
distributed equally unless a different intention appears. (770a)

Art. 849. When the testator calls to the succession a person and his children
they are all deemed to have been instituted simultaneously and not
successively. (771)
Art. 850. The statement of a false cause for the institution of an heir shall be
considered as not written, unless it appears from the will that the testator
would not have made such institution if he had known the falsity of such
cause. (767a)

Art. 851. If the testator has instituted only one heir, and the institution is
limited to an aliquot part of the inheritance, legal succession takes place
with respect to the remainder of the estate.

The same rule applies if the testator has instituted several heirs, each being
limited to an aliquot part, and all the parts do not cover the whole
inheritance. (n)

Art. 852. If it was the intention of the testator that the instituted heirs
should become sole heirs to the whole estate, or the whole free portion, as
the case may be, and each of them has been instituted to an aliquot part of
the inheritance and their aliquot parts together do not cover the whole
inheritance, or the whole free portion, each part shall be increased
proportionally. (n)

Art. 853. If each of the instituted heirs has been given an aliquot part of the
inheritance, and the parts together exceed the whole inheritance, or the
whole free portion, as the case may be, each part shall be reduced
proportionally. (n)

Art. 854. The preterition or omission of one, some, or all of the compulsory
heirs in the direct line, whether living at the time of the execution of the will
or born after the death of the testator, shall annul the institution of heir;
but the devises and legacies shall be valid insofar as they are not inofficious.

If the omitted compulsory heirs should die before the testator, the
institution shall be effectual, without prejudice to the right of
representation. (814a)

Art. 855. The share of a child or descendant omitted in a will must first be
taken from the part of the estate not disposed of by the will, if any; if that is
not sufficient, so much as may be necessary must be taken proportionally
from the shares of the other compulsory heirs. (1080a)

Art. 856. A voluntary heir who dies before the testator transmits nothing to
his heirs.

A compulsory heir who dies before the testator, a person incapacitated to

succeed, and one who renounces the inheritance, shall transmit no right to
his own heirs except in cases expressly provided for in this Code. (766a)
 SECTION 3. - Substitution of Heirs

Art. 857. Substitution is the appointment of another heir so that he may

enter into the inheritance in default of the heir originally instituted. (n)

Art. 858. Substitution of heirs may be:

(1) Simple or common;

(2) Brief or compendious;

(3) Reciprocal; or

(4) Fideicommissary. (n)

Art. 859. The testator may designate one or more persons to substitute the
heir or heirs instituted in case such heir or heirs should die before him, or
should not wish, or should be incapacitated to accept the inheritance.

A simple substitution, without a statement of the cases to which it refers,

shall comprise the three mentioned in the preceding paragraph, unless the
testator has otherwise provided. (774)

Art. 860. Two or more persons may be substituted for one; and one person
for two or more heirs. (778)

Art. 861. If heirs instituted in unequal shares should be reciprocally

substituted, the substitute shall acquire the share of the heir who dies,
renounces, or is incapacitated, unless it clearly appears that the intention of
the testator was otherwise. If there are more than one substitute, they shall
have the same share in the substitution as in the institution. (779a)

Art. 862. The substitute shall be subject to the same charges and conditions
imposed upon the instituted heir, unless and testator has expressly
provided the contrary, or the charges or conditions are personally
applicable only to the heir instituted. (780)

Art. 863. A fideicommissary substitution by virtue of which the fiduciary or

first heir instituted is entrusted with the obligation to preserve and to
transmit to a second heir the whole or part of the inheritance, shall be valid
and shall take effect, provided such substitution does not go beyond one
degree from the heir originally instituted, and provided further, that the
fiduciary or first heir and the second heir are living at the time of the death
of the testator. (781a)

Art. 864. A fideicommissary substitution can never burden the legitime.

(782a)
Art. 865. Every fideicommissary substitution must be expressly made in
order that it may be valid.

The fiduciary shall be obliged to deliver the inheritance to the second heir,
without other deductions than those which arise from legitimate expenses,
credits and improvements, save in the case where the testator has provided
otherwise. (783)

Art. 866. The second heir shall acquire a right to the succession from the
time of the testator's death, even though he should die before the fiduciary.
The right of the second heir shall pass to his heirs. (784)

Art. 867. The following shall not take effect:

(1) Fideicommissary substitutions which are not made in an express

manner, either by giving them this name, or imposing upon the
fiduciary the absolute obligation to deliver the property to a second
heir;

(2) Provisions which contain a perpetual prohibition to alienate, and

even a temporary one, beyond the limit fixed in article 863;

(3) Those which impose upon the heir the charge of paying to various
persons successively, beyond the limit prescribed in article 863, a
certain income or pension;

(4) Those which leave to a person the whole part of the hereditary
property in order that he may apply or invest the same according to
secret instructions communicated to him by the testator. (785a)

Art. 868. The nullity of the fideicommissary substitution does not prejudice
the validity of the institution of the heirs first designated; the
fideicommissary clause shall simply be considered as not written. (786)

Art. 869. A provision whereby the testator leaves to a person the whole or
part of the inheritance, and to another the usufruct, shall be valid. If he
gives the usufruct to various persons, not simultaneously, but successively,
the provisions of Article 863 shall apply. (787a)

Art. 870. The dispositions of the testator declaring all or part of the estate
inalienable for more than twenty years are void. (n)

SECTION 4. - Conditional Testamentary Dispositions

and Testamentary Dispositions With a Term
Art. 871. The institution of an heir may be made conditionally, or for a
certain purpose or cause. (790a)

Art. 872. The testator cannot impose any charge, condition, or substitution
whatsoever upon the legitimes prescribed in this Code. Should he do so, the
same shall be considered as not imposed. (813a)

Art. 873. Impossible conditions and those contrary to law or good customs
shall be considered as not imposed and shall in no manner prejudice the
heir, even if the testator should otherwise provide. (792a)

Art. 874. An absolute condition not to contract a first or subsequent

marriage shall be considered as not written unless such condition has been
imposed on the widow or widower by the deceased spouse, or by the latter's
ascendants or descendants.

Nevertheless, the right of usufruct, or an allowance or some personal

prestation may be devised or bequeathed to any person for the time during
which he or she should remain unmarried or in widowhood. (793a)

Art. 875. Any disposition made upon the condition that the heir shall make
some provision in his will in favor of the testator or of any other person
shall be void. (794a)

Art. 876. Any purely potestative condition imposed upon an heir must be
fulfilled by him as soon as he learns of the testator's death.

This rule shall not apply when the condition, already complied with, cannot
be fulfilled again. (795a)

Art. 877. If the condition is casual or mixed, it shall be sufficient if it

happens or be fulfilled at any time before or after the death of the testator,
unless he has provided otherwise.

Should it have existed or should it have been fulfilled at the time the will
was executed and the testator was unaware thereof, it shall be deemed as
complied with.

If he had knowledge thereof, the condition shall be considered fulfilled only

when it is of such a nature that it can no longer exist or be complied with
again. (796)

Art. 878. A disposition with a suspensive term does not prevent the
instituted heir from acquiring his rights and transmitting them to his heirs
even before the arrival of the term. (799a)
Art. 879. If the potestative condition imposed upon the heir is negative, or
consists in not doing or not giving something, he shall comply by giving a
security that he will not do or give that which has been prohibited by the
testator, and that in case of contravention he will return whatever he may
have received, together with its fruits and interests. (800a)

Art. 880. If the heir be instituted under a suspensive condition or term, the
estate shall be placed under administration until the condition is fulfilled,
or until it becomes certain that it cannot be fulfilled, or until the arrival of
the term.

The same shall be done if the heir does not give the security required in the
preceding article. (801a)

Art. 881. The appointment of the administrator of the estate mentioned in

the preceding article, as well as the manner of the administration and the
rights and obligations of the administrator shall be governed by the Rules of
Court. (804a)

Art. 882. The statement of the object of the institution, or the application of
the property left by the testator, or the charge imposed by him, shall not be
considered as a condition unless it appears that such was his intention.

That which has been left in this manner may be claimed at once provided
that the instituted heir or his heirs give security for compliance with the
wishes of the testator and for the return of anything he or they may receive,
together with its fruits and interests, if he or they should disregard this
obligation. (797a)

Art. 883. When without the fault of the heir, an institution referred to in the
preceding article cannot take effect in the exact manner stated by the
testator, it shall be complied with in a manner most analogous to and in
conformity with his wishes.

If the person interested in the condition should prevent its fulfillment,

without the fault of the heir, the condition shall be deemed to have been
complied with. (798a)

Art. 884. Conditions imposed by the testator upon the heirs shall be
governed by the rules established for conditional obligations in all matters
not provided for by this Section. (791a)

Art. 885. The designation of the day or time when the effects of the
institution of an heir shall commence or cease shall be valid.

In both cases, the legal heir shall be considered as called to the succession
until the arrival of the period or its expiration. But in the first case he shall
not enter into possession of the property until after having given sufficient
security, with the intervention of the instituted heir. (805)

SECTION 5. - Legitime

Art. 886. Legitime is that part of the testator's property which he cannot
dispose of because the law has reserved it for certain heirs who are,
therefore, called compulsory heirs. (806)

Art. 887. The following are compulsory heirs:

(1) Legitimate children and descendants, with respect to their

legitimate parents and ascendants;

(2) In default of the foregoing, legitimate parents and ascendants,

with respect to their legitimate children and descendants;

(3) The widow or widower;

(4) Acknowledged natural children, and natural children by legal

fiction;

(5) Other illegitimate children referred to in Article 287.

Compulsory heirs mentioned in Nos. 3, 4, and 5 are not excluded by those in

Nos. 1 and 2; neither do they exclude one another.

In all cases of illegitimate children, their filiation must be duly proved.

The father or mother of illegitimate children of the three classes

mentioned, shall inherit from them in the manner and to the extent
established by this Code. (807a)

Art. 888. The legitime of legitimate children and descendants consists of

one-half of the hereditary estate of the father and of the mother.

The latter may freely dispose of the remaining half, subject to the rights of
illegitimate children and of the surviving spouse as hereinafter provided.
(808a)

Art. 889. The legitime of legitimate parents or ascendants consists of one-

half of the hereditary estates of their children and descendants.

The children or descendants may freely dispose of the other half, subject to
the rights of illegitimate children and of the surviving spouse as hereinafter
provided. (809a)
Art. 890. The legitime reserved for the legitimate parents shall be divided
between them equally; if one of the parents should have died, the whole
shall pass to the survivor.

If the testator leaves neither father nor mother, but is survived by

ascendants of equal degree of the paternal and maternal lines, the legitime
shall be divided equally between both lines. If the ascendants should be of
different degrees, it shall pertain entirely to the ones nearest in degree of
either line. (810)

Art. 891. The ascendant who inherits from his descendant any property
which the latter may have acquired by gratuitous title from another
ascendant, or a brother or sister, is obliged to reserve such property as he
may have acquired by operation of law for the benefit of relatives who are
within the third degree and who belong to the line from which said property
came. (871)

Art. 892. If only one legitimate child or descendant of the deceased

survives, the widow or widower shall be entitled to one-fourth of the
hereditary estate. In case of a legal separation, the surviving spouse may
inherit if it was the deceased who had given cause for the same.

If there are two or more legitimate children or descendants, the surviving

spouse shall be entitled to a portion equal to the legitime of each of the
legitimate children or descendants.

In both cases, the legitime of the surviving spouse shall be taken from the
portion that can be freely disposed of by the testator. (834a)

Art. 893. If the testator leaves no legitimate descendants, but leaves

legitimate ascendants, the surviving spouse shall have a right to one-fourth
of the hereditary estate.

This fourth shall be taken from the free portion of the estate. (836a)

Art. 894. If the testator leaves illegitimate children, the surviving spouse
shall be entitled to one-third of the hereditary estate of the deceased and
the illegitimate children to another third. The remaining third shall be at
the free disposal of the testator. (n)

Art. 895. The legitime of each of the acknowledged natural children and
each of the natural children by legal fiction shall consist of one-half of the
legitime of each of the legitimate children or descendants.

The legitime of an illegitimate child who is neither an acknowledged

natural, nor a natural child by legal fiction, shall be equal in every case to
four-fifths of the legitime of an acknowledged natural child.
The legitime of the illegitimate children shall be taken from the portion of
the estate at the free disposal of the testator, provided that in no case shall
the total legitime of such illegitimate children exceed that free portion, and
that the legitime of the surviving spouse must first be fully satisfied. (840a)

Art. 896. Illegitimate children who may survive with legitimate parents or
ascendants of the deceased shall be entitled to one-fourth of the hereditary
estate to be taken from the portion at the free disposal of the testator. (841a)

Art. 897. When the widow or widower survives with legitimate children or
descendants, and acknowledged natural children, or natural children by
legal fiction, such surviving spouse shall be entitled to a portion equal to the
legitime of each of the legitimate children which must be taken from that
part of the estate which the testator can freely dispose of. (n)

Art. 898. If the widow or widower survives with legitimate children or

descendants, and with illegitimate children other than acknowledged
natural, or natural children by legal fiction, the share of the surviving
spouse shall be the same as that provided in the preceding article. (n)

Art. 899. When the widow or widower survives with legitimate parents or
ascendants and with illegitimate children, such surviving spouse shall be
entitled to one-eighth of the hereditary estate of the deceased which must
be taken from the free portion, and the illegitimate children shall be
entitled to one-fourth of the estate which shall be taken also from the
disposable portion. The testator may freely dispose of the remaining one-
eighth of the estate. (n)

Art. 900. If the only survivor is the widow or widower, she or he shall be
entitled to one-half of the hereditary estate of the deceased spouse, and the
testator may freely dispose of the other half. (837a)

If the marriage between the surviving spouse and the testator was
solemnized in articulo mortis, and the testator died within three months
from the time of the marriage, the legitime of the surviving spouse as the
sole heir shall be one-third of the hereditary estate, except when they have
been living as husband and wife for more than five years. In the latter case,
the legitime of the surviving spouse shall be that specified in the preceding
paragraph. (n)

Art. 901. When the testator dies leaving illegitimate children and no other
compulsory heirs, such illegitimate children shall have a right to one-half of
the hereditary estate of the deceased.

The other half shall be at the free disposal of the testator. (842a)
Art. 902. The rights of illegitimate children set forth in the preceding
articles are transmitted upon their death to their descendants, whether
legitimate or illegitimate. (843a)

Art. 903. The legitime of the parents who have an illegitimate child, when
such child leaves neither legitimate descendants, nor a surviving spouse,
nor illegitimate children, is one-half of the hereditary estate of such
illegitimate child. If only legitimate or illegitimate children are left, the
parents are not entitled to any legitime whatsoever. If only the widow or
widower survives with parents of the illegitimate child, the legitime of the
parents is one-fourth of the hereditary estate of the child, and that of the
surviving spouse also one-fourth of the estate. (n)

Art. 904. The testator cannot deprive his compulsory heirs of their legitime,
except in cases expressly specified by law.

Neither can he impose upon the same any burden, encumbrance, condition,
or substitution of any kind whatsoever. (813a)

Art. 905. Every renunciation or compromise as regards a future legitime

between the person owing it and his compulsory heirs is void, and the latter
may claim the same upon the death of the former; but they must bring to
collation whatever they may have received by virtue of the renunciation or
compromise. (816)

Art. 906. Any compulsory heir to whom the testator has left by any title less
than the legitime belonging to him may demand that the same be fully
satisfied. (815)

Art. 907. Testamentary dispositions that impair or diminish the legitime of

the compulsory heirs shall be reduced on petition of the same, insofar as
they may be inofficious or excessive. (817)

Art. 908. To determine the legitime, the value of the property left at the
death of the testator shall be considered, deducting all debts and charges,
which shall not include those imposed in the will.

To the net value of the hereditary estate, shall be added the value of all
donations by the testator that are subject to collation, at the time he made
them. (818a)

Art. 909. Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the estate of

which the testator could have disposed by his last will.
Insofar as they may be inofficious or may exceed the disposable portion,
they shall be reduced according to the rules established by this Code. (819a)

Art. 910. Donations which an illegitimate child may have received during
the lifetime of his father or mother, shall be charged to his legitime.

Should they exceed the portion that can be freely disposed of, they shall be
reduced in the manner prescribed by this Code. (847a)

Art. 911. After the legitime has been determined in accordance with the
three preceding articles, the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be

covered, reducing or annulling, if necessary, the devises or legacies
made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without
any distinction whatever.

If the testator has directed that a certain devise or legacy be paid in

preference to others, it shall not suffer any reduction until the latter
have been applied in full to the payment of the legitime.

(3) If the devise or legacy consists of a usufruct or life annuity, whose

value may be considered greater than that of the disposable portion,
the compulsory heirs may choose between complying with the
testamentary provision and delivering to the devisee or legatee the
part of the inheritance of which the testator could freely dispose. (820a)

Art. 912. If the devise subject to reduction should consist of real property,
which cannot be conveniently divided, it shall go to the devisee if the
reduction does not absorb one-half of its value; and in a contrary case, to
the compulsory heirs; but the former and the latter shall reimburse each
other in cash for what respectively belongs to them.

The devisee who is entitled to a legitime may retain the entire property,
provided its value does not exceed that of the disposable portion and of the
share pertaining to him as legitime. (821)

Art. 913. If the heirs or devisees do not choose to avail themselves of the
right granted by the preceding article, any heir or devisee who did not have
such right may exercise it; should the latter not make use of it, the property
shall be sold at public auction at the instance of any one of the interested
parties. (822)
Art. 914. The testator may devise and bequeath the free portion as he may
deem fit. (n)

SECTION 6. - Disinheritance

Art. 915. A compulsory heir may, in consequence of disinheritance, be

deprived of his legitime, for causes expressly stated by law. (848a)

Art. 916. Disinheritance can be effected only through a will wherein the
legal cause therefor shall be specified. (849)

Art. 917. The burden of proving the truth of the cause for disinheritance
shall rest upon the other heirs of the testator, if the disinherited heir should
deny it. (850)

Art. 918. Disinheritance without a specification of the cause, or for a cause

the truth of which, if contradicted, is not proved, or which is not one of
those set forth in this Code, shall annul the institution of heirs insofar as it
may prejudice the person disinherited; but the devises and legacies and
other testamentary dispositions shall be valid to such extent as will not
impair the legitime. (851a)

Art. 919. The following shall be sufficient causes for the disinheritance of
children and descendants, legitimate as well as illegitimate:

(1) When a child or descendant has been found guilty of an attempt

against the life of the testator, his or her spouse, descendants, or
ascendants;

(2) When a child or descendant has accused the testator of a crime for
which the law prescribes imprisonment for six years or more, if the
accusation has been found groundless;

(3) When a child or descendant has been convicted of adultery or

concubinage with the spouse of the testator;

(4) When a child or descendant by fraud, violence, intimidation, or

undue influence causes the testator to make a will or to change one
already made;

(5) A refusal without justifiable cause to support the parent or

ascendant who disinherits such child or descendant;

(6) Maltreatment of the testator by word or deed, by the child or

descendant;
 (7) When a child or descendant leads a dishonorable or disgraceful
life;

(8) Conviction of a crime which carries with it the penalty of civil

interdiction. (756, 853, 674a)

Art. 920. The following shall be sufficient causes for the disinheritance of
parents or ascendants, whether legitimate or illegitimate:
(1) When the parents have abandoned their children or induced their
daughters to live a corrupt or immoral life, or attempted against their
virtue;

(2) When the parent or ascendant has been convicted of an attempt

against the life of the testator, his or her spouse, descendants, or
ascendants;

(3) When the parent or ascendant has accused the testator of a crime
for which the law prescribes imprisonment for six years or more, if
the accusation has been found to be false;

(4) When the parent or ascendant has been convicted of adultery or

concubinage with the spouse of the testator;

(5) When the parent or ascendant by fraud, violence, intimidation, or

undue influence causes the testator to make a will or to change one
already made;

(6) The loss of parental authority for causes specified in this Code;

(7) The refusal to support the children or descendants without

justifiable cause;

(8) An attempt by one of the parents against the life of the other,
unless there has been a reconciliation between them. (756, 854, 674a)

Art. 921. The following shall be sufficient causes for disinheriting a spouse:
(1) When the spouse has been convicted of an attempt against the life
of the testator, his or her descendants, or ascendants;

(2) When the spouse has accused the testator of a crime for which the
law prescribes imprisonment of six years or more, and the accusation
has been found to be false;

(3) When the spouse by fraud, violence, intimidation, or undue

influence cause the testator to make a will or to change one already
made;
 (4) When the spouse has given cause for legal separation;

(5) When the spouse has given grounds for the loss of parental
authority;

(6) Unjustifiable refusal to support the children or the other spouse.

(756, 855, 674a)

Art. 922. A subsequent reconciliation between the offender and the

offended person deprives the latter of the right to disinherit, and renders
ineffectual any disinheritance that may have been made. (856)

Art. 923. The children and descendants of the person disinherited shall take
his or her place and shall preserve the rights of compulsory heirs with
respect to the legitime; but the disinherited parent shall not have the
usufruct or administration of the property which constitutes the legitime.
(857)

SECTION 7. - Legacies and Devises

Art. 924. All things and rights which are within the commerce of man be
bequeathed or devised. (865a)

Art. 925. A testator may charge with legacies and devises not only his
compulsory heirs but also the legatees and devisees.

The latter shall be liable for the charge only to the extent of the value of the
legacy or the devise received by them. The compulsory heirs shall not be
liable for the charge beyond the amount of the free portion given them. (858a)

Art. 926. When the testator charges one of the heirs with a legacy or devise,
he alone shall be bound.

Should he not charge anyone in particular, all shall be liable in the same
proportion in which they may inherit. (859)

Art. 927. If two or more heirs take possession of the estate, they shall be
solidarily liable for the loss or destruction of a thing devised or bequeathed,
even though only one of them should have been negligent. (n)

Art. 928. The heir who is bound to deliver the legacy or devise shall be liable
in case of eviction, if the thing is indeterminate and is indicated only by its
kind. (860)

Art. 929. If the testator, heir, or legatee owns only a part of, or an interest in
the thing bequeathed, the legacy or devise shall be understood limited to
such part or interest, unless the testator expressly declares that he gives the
thing in its entirety. (864a)

Art. 930. The legacy or devise of a thing belonging to another person is void,
if the testator erroneously believed that the thing pertained to him. But if
the thing bequeathed, though not belonging to the testator when he made
the will, afterwards becomes his, by whatever title, the disposition shall
take effect. (862a)

Art. 931. If the testator orders that a thing belonging to another be acquired
in order that it be given to a legatee or devisee, the heir upon whom the
obligation is imposed or the estate must acquire it and give the same to the
legatee or devisee; but if the owner of the thing refuses to alienate the same,
or demands an excessive price therefor, the heir or the estate shall only be
obliged to give the just value of the thing. (861a)

Art. 932. The legacy or devise of a thing which at the time of the execution of
the will already belonged to the legatee or devisee shall be ineffective, even
though another person may have some interest therein.

If the testator expressly orders that the thing be freed from such interest or
encumbrance, the legacy or devise shall be valid to that extent. (866a)

Art. 933. If the thing bequeathed belonged to the legatee or devisee at the
time of the execution of the will, the legacy or devise shall be without effect,
even though it may have subsequently alienated by him.

If the legatee or devisee acquires it gratuitously after such time, he can

claim nothing by virtue of the legacy or devise; but if it has been acquired by
onerous title he can demand reimbursement from the heir or the estate.
(878a)

Art. 934. If the testator should bequeath or devise something pledged or

mortgaged to secure a recoverable debt before the execution of the will, the
estate is obliged to pay the debt, unless the contrary intention appears.

The same rule applies when the thing is pledged or mortgaged after the
execution of the will.

Any other charge, perpetual or temporary, with which the thing bequeathed
is burdened, passes with it to the legatee or devisee. (867a)

Art. 935. The legacy of a credit against a third person or of the remission or
release of a debt of the legatee shall be effective only as regards that part of
the credit or debt existing at the time of the death of the testator.
In the first case, the estate shall comply with the legacy by assigning to the
legatee all rights of action it may have against the debtor. In the second
case, by giving the legatee an acquittance, should he request one.

In both cases, the legacy shall comprise all interests on the credit or debt
which may be due the testator at the time of his death. (870a)

Art. 936. The legacy referred to in the preceding article shall lapse if the
testator, after having made it, should bring an action against the debtor for
the payment of his debt, even if such payment should not have been effected
at the time of his death.

The legacy to the debtor of the thing pledged by him is understood to

discharge only the right of pledge. (871)

Art. 937. A generic legacy of release or remission of debts comprises those

existing at the time of the execution of the will, but not subsequent ones. (872)

Art. 938. A legacy or devise made to a creditor shall not be applied to his
credit, unless the testator so expressly declares.

In the latter case, the creditor shall have the right to collect the excess, if
any, of the credit or of the legacy or devise. (837a)

Art. 939. If the testator orders the payment of what he believes he owes but
does not in fact owe, the disposition shall be considered as not written. If as
regards a specified debt more than the amount thereof is ordered paid, the
excess is not due, unless a contrary intention appears.

The foregoing provisions are without prejudice to the fulfillment of natural

obligations. (n)

Art. 940. In alternative legacies or devises, the choice is presumed to be left

to the heir upon whom the obligation to give the legacy or devise may be
imposed, or the executor or administrator of the estate if no particular heir
is so obliged.

If the heir, legatee or devisee, who may have been given the choice, dies
before making it, this right shall pass to the respective heirs.

Once made, the choice is irrevocable.

In the alternative legacies or devises, except as herein provided, the

provisions of this Code regulating obligations of the same kind shall be
observed, save such modifications as may appear from the intention
expressed by the testator. (874a)
Art. 941. A legacy of generic personal property shall be valid even if there be
no things of the same kind in the estate.

A devise of indeterminate real property shall be valid only if there be

immovable property of its kind in the estate.

The right of choice shall belong to the executor or administrator who shall
comply with the legacy by the delivery of a thing which is neither of inferior
nor of superior quality. (875a)

Art. 942. Whenever the testator expressly leaves the right of choice to the
heir, or to the legatee or devisee, the former may give or the latter may
choose whichever he may prefer. (876a)

Art. 943. If the heir, legatee or devisee cannot make the choice, in case it
has been granted him, his right shall pass to his heirs; but a choice once
made shall be irrevocable. (877a)

Art. 944. A legacy for education lasts until the legatee is of age, or beyond
the age of majority in order that the legatee may finish some professional,
vocational or general course, provided he pursues his course diligently.

A legacy for support lasts during the lifetime of the legatee, if the testator
has not otherwise provided.

If the testator has not fixed the amount of such legacies, it shall be fixed in
accordance with the social standing and the circumstances of the legatee
and the value of the estate.

If the testator or during his lifetime used to give the legatee a certain sum of
money or other things by way of support, the same amount shall be deemed
bequeathed, unless it be markedly disproportionate to the value of the
estate. (879a)

Art. 945. If a periodical pension, or a certain annual, monthly, or weekly

amount is bequeathed, the legatee may petition the court for the first
installment upon the death of the testator, and for the following ones which
shall be due at the beginning of each period; such payment shall not be
returned, even though the legatee should die before the expiration of the
period which has commenced. (880a)

Art. 946. If the thing bequeathed should be subject to a usufruct, the legatee
or devisee shall respect such right until it is legally extinguished. (868a)

Art. 947. The legatee or devisee acquires a right to the pure and simple
legacies or devises from the death of the testator, and transmits it to his
heirs. (881a)
Art. 948. If the legacy or device is of a specific and determinate thing
pertaining to the testator, the legatee or devisee acquires the ownership
thereof upon the death of the testator, as well as any growing fruits, or
unborn offspring of animals, or uncollected income; but not the income
which was due and unpaid before the latter's death.

From the moment of the testator's death, the thing bequeathed shall be at
the risk of the legatee or devisee, who shall, therefore, bear its loss or
deterioration, and shall be benefited by its increase or improvement,
without prejudice to the responsibility of the executor or administrator.
(882a)

Art. 949. If the bequest should not be of a specific and determinate thing,
but is generic or of quantity, its fruits and interests from the time of the
death of the testator shall pertain to the legatee or devisee if the testator has
expressly so ordered. (884a)

Art. 950. If the estate should not be sufficient to cover all the legacies or
devises, their payment shall be made in the following order:

(1) Remuneratory legacies or devises;

(2) Legacies or devises declared by the testator to be preferential;

(3) Legacies for support;

(4) Legacies for education;

(5) Legacies or devises of a specific, determinate thing which forms a

part of the estate;

(6) All others pro rata. (887a)

Art. 951. The thing bequeathed shall be delivered with all its accessories and
accessories and in the condition in which it may be upon the death of the
testator. (883a)

Art. 952. The heir, charged with a legacy or devise, or the executor or
administrator of the estate, must deliver the very thing bequeathed if he is
able to do so and cannot discharge this obligation by paying its value.

Legacies of money must be paid in cash, even though the heir or the estate
may not have any.

The expenses necessary for the delivery of the thing bequeathed shall be for
the account of the heir or the estate, but without prejudice to the legitime.
(886a)
Art. 953. The legatee or devisee cannot take possession of the thing
bequeathed upon his own authority, but shall request its delivery and
possession of the heir charged with the legacy or devise, or of the executor
or administrator of the estate should he be authorized by the court to
deliver it. (885a)

Art. 954. The legatee or devisee cannot accept a part of the legacy or devise
and repudiate the other, if the latter be onerous.

Should he die before having accepted the legacy or devise, leaving several
heirs, some of the latter may accept and the others may repudiate the share
respectively belonging to them in the legacy or devise. (889a)

Art. 955. The legatee or devisee of two legacies or devises, one of which is
onerous, cannot renounce the onerous one and accept the other. If both are
onerous or gratuitous, he shall be free to accept or renounce both, or to
renounce either. But if the testator intended that the two legacies or devises
should be inseparable from each other, the legatee or devisee must either
accept or renounce both.

Any compulsory heir who is at the same time a legatee or devisee may waive
the inheritance and accept the legacy or devise, or renounce the latter and
accept the former, or waive or accept both. (890a)

Art. 956. If the legatee or devisee cannot or is unwilling to accept the legacy
or devise, or if the legacy or devise for any reason should become
ineffective, it shall be merged into the mass of the estate, except in cases of
substitution and of the right of accretion. (888a)

Art. 957. The legacy or devise shall be without effect:

(1) If the testator transforms the thing bequeathed in such a manner

that it does not retain either the form or the denomination it had;

(2) If the testator by any title or for any cause alienates the thing
bequeathed or any part thereof, it being understood that in the latter
case the legacy or devise shall be without effect only with respect to
the part thus alienated. If after the alienation the thing should again
belong to the testator, even if it be by reason of nullity of the contract,
the legacy or devise shall not thereafter be valid, unless the
reacquisition shall have been effected by virtue of the exercise of the
right of repurchase;

(3) If the thing bequeathed is totally lost during the lifetime of the
testator, or after his death without the heir's fault. Nevertheless, the
person obliged to pay the legacy or devise shall be liable for eviction if
 the thing bequeathed should not have been determinate as to its kind,
in accordance with the provisions of Article 928. (869a)

Art. 958. A mistake as to the name of the thing bequeathed or devised, is of

no consequence, if it is possible to identify the thing which the testator
intended to bequeath or devise. (n)

Art. 959. A disposition made in general terms in favor of the testator's

relatives shall be understood to be in favor of those nearest in degree. (751)

CHAPTER 3
LEGAL OR INTESTATE SUCCESSION

SECTION 1. - General Provisions

Art. 960. Legal or intestate succession takes place:

(1) If a person dies without a will, or with a void will, or one which has
subsequently lost its validity;

(2) When the will does not institute an heir to, or dispose of all the
property belonging to the testator. In such case, legal succession shall
take place only with respect to the property of which the testator has
not disposed;

(3) If the suspensive condition attached to the institution of heir does

not happen or is not fulfilled, or if the heir dies before the testator, or
repudiates the inheritance, there being no substitution, and no right
of accretion takes place;

(4) When the heir instituted is incapable of succeeding, except in

cases provided in this Code. (912a)

Art. 961. In default of testamentary heirs, the law vests the inheritance, in
accordance with the rules hereinafter set forth, in the legitimate and
illegitimate relatives of the deceased, in the surviving spouse, and in the
State. (913a)

Art. 962. In every inheritance, the relative nearest in degree excludes the
more distant ones, saving the right of representation when it properly takes
place.

Relatives in the same degree shall inherit in equal shares, subject to the
provisions of article 1006 with respect to relatives of the full and half blood,
and of Article 987, paragraph 2, concerning division between the paternal
and maternal lines. (912a)
 SUBSECTION 1. - Relationship

Art. 963. Proximity of relationship is determined by the number of

generations. Each generation forms a degree. (915)

Art. 964. A series of degrees forms a line, which may be either direct or
collateral.

A direct line is that constituted by the series of degrees among ascendants

and descendants.

A collateral line is that constituted by the series of degrees among persons

who are not ascendants and descendants, but who come from a common
ancestor. (916a)

Art. 965. The direct line is either descending or ascending.

The former unites the head of the family with those who descend from him.

The latter binds a person with those from whom he descends. (917)

Art. 966. In the line, as many degrees are counted as there are generations
or persons, excluding the progenitor.

In the direct line, ascent is made to the common ancestor. Thus, the child is
one degree removed from the parent, two from the grandfather, and three
from the great-grandparent.

In the collateral line, ascent is made to the common ancestor and then
descent is made to the person with whom the computation is to be made.
Thus, a person is two degrees removed from his brother, three from his
uncle, who is the brother of his father, four from his first cousin, and so
forth. (918a)

Art. 967. Full blood relationship is that existing between persons who have
the same father and the same mother.

Half blood relationship is that existing between persons who have the same
father, but not the same mother, or the same mother, but not the same
father. (920a)

Art. 968. If there are several relatives of the same degree, and one or some
of them are unwilling or incapacitated to succeed, his portion shall accrue
to the others of the same degree, save the right of representation when it
should take place. (922)
Art. 969. If the inheritance should be repudiated by the nearest relative,
should there be one only, or by all the nearest relatives called by law to
succeed, should there be several, those of the following degree shall inherit
in their own right and cannot represent the person or persons repudiating
the inheritance. (923)

SUBSECTION 2. - Right of Representation

Art. 970. Representation is a right created by fiction of law, by virtue of

which the representative is raised to the place and the degree of the person
represented, and acquires the rights which the latter would have if he were
living or if he could have inherited. (942a)

Art. 971. The representative is called to the succession by the law and not by
the person represented. The representative does not succeed the person
represented but the one whom the person represented would have
succeeded. (n)

Art. 972. The right of representation takes place in the direct descending
line, but never in the ascending.

In the collateral line, it takes place only in favor of the children of brothers
or sisters, whether they be of the full or half blood. (925)

Art. 973. In order that representation may take place, it is necessary that
the representative himself be capable of succeeding the decedent. (n)

Art. 974. Whenever there is succession by representation, the division of

the estate shall be made per stirpes, in such manner that the representative
or representatives shall not inherit more than what the person they
represent would inherit, if he were living or could inherit. (926a)

Art. 975. When children of one or more brothers or sisters of the deceased
survive, they shall inherit from the latter by representation, if they survive
with their uncles or aunts. But if they alone survive, they shall inherit in
equal portions. (927)

Art. 976. A person may represent him whose inheritance he has renounced.
(928a)

Art. 977. Heirs who repudiate their share may not be represented. (929a)

SECTION 2. - Order of Intestate Succession

SUBSECTION 1. - Descending Direct Line

Art. 978. Succession pertains, in the first place, to the descending direct
line. (930)

Art. 979. Legitimate children and their descendants succeed the parents
and other ascendants, without distinction as to sex or age, and even if they
should come from different marriages.

An adopted child succeeds to the property of the adopting parents in the

same manner as a legitimate child. (931a)

Art. 980. The children of the deceased shall always inherit from him in
their own right, dividing the inheritance in equal shares. (932)

Art. 981. Should children of the deceased and descendants of other children
who are dead, survive, the former shall inherit in their own right, and the
latter by right of representation. (934a)

Art. 982. The grandchildren and other descendants shall inherit by right of
representation, and if any one of them should have died, leaving several
heirs, the portion pertaining to him shall be divided among the latter in
equal portions. (933)

Art. 983. If illegitimate children survive with legitimate children, the shares
of the former shall be in the proportions prescribed by Article 895. (n)

Art. 984. In case of the death of an adopted child, leaving no children or

descendants, his parents and relatives by consanguinity and not by
adoption, shall be his legal heirs. (n)

SUBSECTION 2. - Ascending Direct Line

Art. 985. In default of legitimate children and descendants of the deceased,

his parents and ascendants shall inherit from him, to the exclusion of
collateral relatives. (935a)

Art. 986. The father and mother, if living, shall inherit in equal shares.

Should one only of them survive, he or she shall succeed to the entire estate
of the child. (936)

Art. 987. In default of the father and mother, the ascendants nearest in
degree shall inherit.

Should there be more than one of equal degree belonging to the same line
they shall divide the inheritance per capita; should they be of different lines
but of equal degree, one-half shall go to the paternal and the other half to
the maternal ascendants. In each line the division shall be made per capita.
(937)

SUBSECTION 3. - Illegitimate Children

Art. 988. In the absence of legitimate descendants or ascendants, the

illegitimate children shall succeed to the entire estate of the deceased. (939a)

Art. 989. If, together with illegitimate children, there should survive
descendants of another illegitimate child who is dead, the former shall
succeed in their own right and the latter by right of representation. (940a)

Art. 990. The hereditary rights granted by the two preceding articles to
illegitimate children shall be transmitted upon their death to their
descendants, who shall inherit by right of representation from their
deceased grandparent. (941a)

Art. 991. If legitimate ascendants are left, the illegitimate children shall
divide the inheritance with them, taking one-half of the estate, whatever be
the number of the ascendants or of the illegitimate children. (942-841a)

Art. 992. An illegitimate child has no right to inherit ab intestato from the
legitimate children and relatives of his father or mother; nor shall such
children or relatives inherit in the same manner from the illegitimate child.
(943a)

Art. 993. If an illegitimate child should die without issue, either legitimate
or illegitimate, his father or mother shall succeed to his entire estate; and if
the child's filiation is duly proved as to both parents, who are both living,
they shall inherit from him share and share alike. (944)

Art. 994. In default of the father or mother, an illegitimate child shall be

succeeded by his or her surviving spouse who shall be entitled to the entire
estate.

If the widow or widower should survive with brothers and sisters, nephews
and nieces, she or he shall inherit one-half of the estate, and the latter the
other half. (945a)

SUBSECTION 4. - Surviving Spouse

Art. 995. In the absence of legitimate descendants and ascendants, and

illegitimate children and their descendants, whether legitimate or
illegitimate, the surviving spouse shall inherit the entire estate, without
prejudice to the rights of brothers and sisters, nephews and nieces, should
there be any, under article 1001. (946a)

Art. 996. If a widow or widower and legitimate children or descendants are

left, the surviving spouse has in the succession the same share as that of
each of the children. (834a)

Art. 997. When the widow or widower survives with legitimate parents or
ascendants, the surviving spouse shall be entitled to one-half of the estate,
and the legitimate parents or ascendants to the other half. (836a)

Art. 998. If a widow or widower survives with illegitimate children, such

widow or widower shall be entitled to one-half of the inheritance, and the
illegitimate children or their descendants, whether legitimate or
illegitimate, to the other half. (n)

Art. 999. When the widow or widower survives with legitimate children or
their descendants and illegitimate children or their descendants, whether
legitimate or illegitimate, such widow or widower shall be entitled to the
same share as that of a legitimate child. (n)

Art. 1000. If legitimate ascendants, the surviving spouse, and illegitimate

children are left, the ascendants shall be entitled to one-half of the
inheritance, and the other half shall be divided between the surviving
spouse and the illegitimate children so that such widow or widower shall
have one-fourth of the estate, and the illegitimate children the other fourth.
(841a)

Art. 1001. Should brothers and sisters or their children survive with the
widow or widower, the latter shall be entitled to one-half of the inheritance
and the brothers and sisters or their children to the other half. (953, 837a)

Art. 1002. In case of a legal separation, if the surviving spouse gave cause
for the separation, he or she shall not have any of the rights granted in the
preceding articles. (n)

SUBSECTION 5. - Collateral Relatives

Art. 1003. If there are no descendants, ascendants, illegitimate children, or

a surviving spouse, the collateral relatives shall succeed to the entire estate
of the deceased in accordance with the following articles. (946a)

Art. 1004. Should the only survivors be brothers and sisters of the full
blood, they shall inherit in equal shares. (947)
Art. 1005. Should brothers and sisters survive together with nephews and
nieces, who are the children of the descendant's brothers and sisters of the
full blood, the former shall inherit per capita, and the latter per stirpes. (948)

Art. 1006. Should brother and sisters of the full blood survive together with
brothers and sisters of the half blood, the former shall be entitled to a share
double that of the latter. (949)

Art. 1007. In case brothers and sisters of the half blood, some on the
father's and some on the mother's side, are the only survivors, all shall
inherit in equal shares without distinction as to the origin of the property.
(950)

Art. 1008. Children of brothers and sisters of the half blood shall succeed
per capita or per stirpes, in accordance with the rules laid down for the
brothers and sisters of the full blood. (915)

Art. 1009. Should there be neither brothers nor sisters nor children of
brothers or sisters, the other collateral relatives shall succeed to the estate.

The latter shall succeed without distinction of lines or preference among

them by reason of relationship by the whole blood. (954a)

Art. 1010. The right to inherit ab intestato shall not extend beyond the fifth
degree of relationship in the collateral line. (955a)

SUBSECTION 6. - The State

Art. 1011. In default of persons entitled to succeed in accordance with the

provisions of the preceding Sections, the State shall inherit the whole
estate. (956a)

Art. 1012. In order that the State may take possession of the property
mentioned in the preceding article, the pertinent provisions of the Rules of
Court must be observed. (958a)

Art. 1013. After the payment of debts and charges, the personal property
shall be assigned to the municipality or city where the deceased last resided
in the Philippines, and the real estate to the municipalities or cities,
respectively, in which the same is situated.

If the deceased never resided in the Philippines, the whole estate shall be
assigned to the respective municipalities or cities where the same is located.

Such estate shall be for the benefit of public schools, and public charitable
institutions and centers, in such municipalities or cities. The court shall
distribute the estate as the respective needs of each beneficiary may
warrant.

The court, at the instance of an interested party, or on its own motion, may
order the establishment of a permanent trust, so that only the income from
the property shall be used. (956a)

Art. 1014. If a person legally entitled to the estate of the deceased appears
and files a claim thereto with the court within five years from the date the
property was delivered to the State, such person shall be entitled to the
possession of the same, or if sold the municipality or city shall be
accountable to him for such part of the proceeds as may not have been
lawfully spent. (n)

CHAPTER 4
PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSIONS

SECTION 1. - Right of Accretion

Art. 1015. Accretion is a right by virtue of which, when two or more persons
are called to the same inheritance, devise or legacy, the part assigned to the
one who renounces or cannot receive his share, or who died before the
testator, is added or incorporated to that of his co-heirs, co-devisees, or co-
legatees. (n)

Art. 1016. In order that the right of accretion may take place in a
testamentary succession, it shall be necessary:

(1) That two or more persons be called to the same inheritance, or to

the same portion thereof, pro indiviso; and

(2) That one of the persons thus called die before the testator, or
renounce the inheritance, or be incapacitated to receive it. (928a)

Art. 1017. The words "one-half for each" or "in equal shares" or any others
which, though designating an aliquot part, do not identify it by such
description as shall make each heir the exclusive owner of determinate
property, shall not exclude the right of accretion.

In case of money or fungible goods, if the share of each heir is not

earmarked, there shall be a right of accretion. (983a)

Art. 1018. In legal succession the share of the person who repudiates the
inheritance shall always accrue to his co-heirs. (981)
Art. 1019. The heirs to whom the portion goes by the right of accretion take
it in the same proportion that they inherit. (n)

Art. 1020. The heirs to whom the inheritance accrues shall succeed to all the
rights and obligations which the heir who renounced or could not receive it
would have had. (984)

Art. 1021. Among the compulsory heirs the right of accretion shall take
place only when the free portion is left to two or more of them, or to any
one of them and to a stranger.

Should the part repudiated be the legitime, the other co-heirs shall succeed
to it in their own right, and not by the right of accretion. (985)

Art. 1022. In testamentary succession, when the right of accretion does not
take place, the vacant portion of the instituted heirs, if no substitute has
been designated, shall pass to the legal heirs of the testator, who shall
receive it with the same charges and obligations. (986)

Art. 1023. Accretion shall also take place among devisees, legatees and
usufructuaries under the same conditions established for heirs. (987a)

SECTION 2. - Capacity to Succeed by Will of by Intestacy

Art. 1024. Persons not incapacitated by law may succeed by will or ab

intestato.

The provisions relating to incapacity by will are equally applicable to

intestate succession. (744, 914)

Art. 1025. In order to be capacitated to inherit, the heir, devisee or legatee

must be living at the moment the succession opens, except in case of
representation, when it is proper.

A child already conceived at the time of the death of the decedent is capable
of succeeding provided it be born later under the conditions prescribed in
article 41. (n)

Art. 1026. A testamentary disposition may be made to the State, provinces,

municipal corporations, private corporations, organizations, or
associations for religious, scientific, cultural, educational, or charitable
purposes.

All other corporations or entities may succeed under a will, unless there is a
provision to the contrary in their charter or the laws of their creation, and
always subject to the same. (746a)
Art. 1027. The following are incapable of succeeding:

(1) The priest who heard the confession of the testator during his last
illness, or the minister of the gospel who extended spiritual aid to him
during the same period;

(2) The relatives of such priest or minister of the gospel within the
fourth degree, the church, order, chapter, community, organization,
or institution to which such priest or minister may belong;

(3) A guardian with respect to testamentary dispositions given by a

ward in his favor before the final accounts of the guardianship have
been approved, even if the testator should die after the approval
thereof; nevertheless, any provision made by the ward in favor of the
guardian when the latter is his ascendant, descendant, brother, sister,
or spouse, shall be valid;

(4) Any attesting witness to the execution of a will, the spouse,

parents, or children, or any one claiming under such witness, spouse,
parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took
care of the testator during his last illness;

(6) Individuals, associations and corporations not permitted by law to

inherit. (745, 752, 753, 754a)

Art. 1028. The prohibitions mentioned in article 739, concerning donations

inter vivos shall apply to testamentary provisions. (n)

Art. 1029. Should the testator dispose of the whole or part of his property
for prayers and pious works for the benefit of his soul, in general terms and
without specifying its application, the executor, with the court's approval
shall deliver one-half thereof or its proceeds to the church or denomination
to which the testator may belong, to be used for such prayers and pious
works, and the other half to the State, for the purposes mentioned in Article
1013. (747a)

Art. 1030. Testamentary provisions in favor of the poor in general, without

designation of particular persons or of any community, shall be deemed
limited to the poor living in the domicile of the testator at the time of his
death, unless it should clearly appear that his intention was otherwise.

The designation of the persons who are to be considered as poor and the
distribution of the property shall be made by the person appointed by the
testator for the purpose; in default of such person, by the executor, and
should there be no executor, by the justice of the peace, the mayor, and the
municipal treasurer, who shall decide by a majority of votes all questions
that may arise. In all these cases, the approval of the Court of First Instance
shall be necessary.

The preceding paragraph shall apply when the testator has disposed of his
property in favor of the poor of a definite locality. (749a)

Art. 1031. A testamentary provision in favor of a disqualified person, even

though made under the guise of an onerous contract, or made through an
intermediary, shall be void. (755)

Art. 1032. The following are incapable of succeeding by reason of

unworthiness:

(1) Parents who have abandoned their children or induced their

daughters to lead a corrupt or immoral life, or attempted against
their virtue;

(2) Any person who has been convicted of an attempt against the life
of the testator, his or her spouse, descendants, or ascendants;

(3) Any person who has accused the testator of a crime for which the
law prescribes imprisonment for six years or more, if the accusation
has been found groundless;

(4) Any heir of full age who, having knowledge of the violent death of
the testator, should fail to report it to an officer of the law within a
month, unless the authorities have already taken action; this
prohibition shall not apply to cases wherein, according to law, there is
no obligation to make an accusation;

(5) Any person convicted of adultery or concubinage with the spouse

of the testator;

(6) Any person who by fraud, violence, intimidation, or undue

influence should cause the testator to make a will or to change one
already made;

(7) Any person who by the same means prevents another from making
a will, or from revoking one already made, or who supplants,
conceals, or alters the latter's will;

(8) Any person who falsifies or forges a supposed will of the decedent.
(756, 673, 674a)
Art. 1033. The cause of unworthiness shall be without effect if the testator
had knowledge thereof at the time he made the will, or if, having known of
them subsequently, he should condone them in writing. (757a)

Art. 1034. In order to judge the capacity of the heir, devisee or legatee, his
qualification at the time of the death of the decedent shall be the criterion.

In cases falling under Nos. 2, 3, or 5 of Article 1032, it shall be necessary to

wait until final judgment is rendered, and in the case falling under No. 4,
the expiration of the month allowed for the report.

If the institution, devise or legacy should be conditional, the time of the

compliance with the condition shall also be considered. (758a)

Art. 1035. If the person excluded from the inheritance by reason of

incapacity should be a child or descendant of the decedent and should have
children or descendants, the latter shall acquire his right to the legitime.

The person so excluded shall not enjoy the usufruct and administration of
the property thus inherited by his children. (761a)

Art. 1036. Alienations of hereditary property, and acts of administration

performed by the excluded heir, before the judicial order of exclusion, are
valid as to the third persons who acted in good faith; but the co-heirs shall
have a right to recover damages from the disqualified heir. (n)

Art. 1037. The unworthy heir who is excluded from the succession has a
right to demand indemnity or any expenses incurred in the preservation of
the hereditary property, and to enforce such credits as he may have against
the estate. (n)

Art. 1038. Any person incapable of succession, who, disregarding the

prohibition stated in the preceding articles, entered into the possession of
the hereditary property, shall be obliged to return it together it its
accessions.

He shall be liable for all the fruits and rents he may have received, or could
have received through the exercise of due diligence. (760a)

Art. 1039. Capacity to succeed is governed by the law of the nation of the
decedent. (n)

Art. 1040. The action for a declaration of incapacity and for the recovery of
the inheritance, devise or legacy shall be brought within five years from the
time the disqualified person took possession thereof. It may be brought by
any one who may have an interest in the succession. (762a)
 SECTION 3. - Acceptance and Repudiation of the Inheritance

Art. 1041. The acceptance or repudiation of the inheritance is an act which

is purely voluntary and free. (988)

Art. 1042. The effects of the acceptance or repudiation shall always retroact
to the moment of the death of the decedent. (989)

Art. 1043. No person may accept or repudiate an inheritance unless he is

certain of the death of the person from whom he is to inherit, and of his
right to the inheritance. (991)

Art. 1044. Any person having the free disposal of his property may accept or
repudiate an inheritance.

Any inheritance left to minors or incapacitated persons may be accepted by

their parents or guardians. Parents or guardians may repudiate the
inheritance left to their wards only by judicial authorization.

The right to accept an inheritance left to the poor shall belong to the
persons designated by the testator to determine the beneficiaries and
distribute the property, or in their default, to those mentioned in Article
1030. (992a)

Art. 1045. The lawful representatives of corporations, associations,

institutions and entities qualified to acquire property may accept any
inheritance left to the latter, but in order to repudiate it, the approval of the
court shall be necessary. (993a)

Art. 1046. Public official establishments can neither accept nor repudiate
an inheritance without the approval of the government. (994)

Art. 1047. A married woman of age may repudiate an inheritance without

the consent of her husband. (995a)

Art. 1048. Deaf-mutes who can read and write may accept or repudiate the
inheritance personally or through an agent. Should they not be able to read
and write, the inheritance shall be accepted by their guardians. These
guardians may repudiate the same with judicial approval. (996a)

Art. 1049. Acceptance may be express or tacit.

An express acceptance must be made in a public or private document.

A tacit acceptance is one resulting from acts by which the intention to

accept is necessarily implied, or which one would have no right to do except
in the capacity of an heir.
Acts of mere preservation or provisional administration do not imply an
acceptance of the inheritance if, through such acts, the title or capacity of
an heir has not been assumed. (999a)

Art. 1050. An inheritance is deemed accepted:

(1) If the heirs sells, donates, or assigns his right to a stranger, or to

his co-heirs, or to any of them;

(2) If the heir renounces the same, even though gratuitously, for the
benefit of one or more of his co-heirs;

(3) If he renounces it for a price in favor of all his co-heirs

indiscriminately; but if this renunciation should be gratuitous, and
the co-heirs in whose favor it is made are those upon whom the
portion renounced should devolve by virtue of accretion, the
inheritance shall not be deemed as accepted. (1000)

Art. 1051. The repudiation of an inheritance shall be made in a public or

authentic instrument, or by petition presented to the court having
jurisdiction over the testamentary or intestate proceedings. (1008)

Art. 1052. If the heir repudiates the inheritance to the prejudice of his own
creditors, the latter may petition the court to authorize them to accept it in
the name of the heir.

The acceptance shall benefit the creditors only to an extent sufficient to

cover the amount of their credits. The excess, should there be any, shall in
no case pertain to the renouncer, but shall be adjudicated to the persons to
whom, in accordance with the rules established in this Code, it may belong.
(1001)

Art. 1053. If the heir should die without having accepted or repudiated the
inheritance his right shall be transmitted to his heirs. (1006)

Art. 1054. Should there be several heirs called to the inheritance, some of
them may accept and the others may repudiate it. (1007a)

Art. 1055. If a person, who is called to the same inheritance as an heir by

will and ab intestato, repudiates the inheritance in his capacity as a
testamentary heir, he is understood to have repudiated it in both capacities.

Should he repudiate it as an intestate heir, without knowledge of his being a

testamentary heir, he may still accept it in the latter capacity. (1009)
Art. 1056. The acceptance or repudiation of an inheritance, once made, is
irrevocable, and cannot be impugned, except when it was made through any
of the causes that vitiate consent, or when an unknown will appears. (997)

Art. 1057. Within thirty days after the court has issued an order for the
distribution of the estate in accordance with the Rules of Court, the heirs,
devisees and legatees shall signify to the court having jurisdiction whether
they accept or repudiate the inheritance.

If they do not do so within that time, they are deemed to have accepted the
inheritance. (n)

SECTION 4. - Executors and Administrators

Art. 1058. All matters relating to the appointment, powers and duties of
executors and administrators and concerning the administration of estates
of deceased persons shall be governed by the Rules of Court. (n)

Art. 1059. If the assets of the estate of a decedent which can be applied to
the payment of debts are not sufficient for that purpose, the provisions of
Articles 2239 to 2251 on Preference of Credits shall be observed, provided
that the expenses referred to in Article 2244, No. 8, shall be those involved
in the administration of the decedent's estate. (n)

Art. 1060. A corporation or association authorized to conduct the business

of a trust company in the Philippines may be appointed as an executor,
administrator, guardian of an estate, or trustee, in like manner as an
individual; but it shall not be appointed guardian of the person of a ward. (n)

SECTION 5. - Collation

Art. 1061. Every compulsory heir, who succeeds with other compulsory
heirs, must bring into the mass of the estate any property or right which he
may have received from the decedent, during the lifetime of the latter, by
way of donation, or any other gratuitous title, in order that it may be
computed in the determination of the legitime of each heir, and in the
account of the partition. (1035a)

Art. 1062. Collation shall not take place among compulsory heirs if the
donor should have so expressly provided, or if the donee should repudiate
the inheritance, unless the donation should be reduced as inofficious. (1036)

Art. 1063. Property left by will is not deemed subject to collation, if the
testator has not otherwise provided, but the legitime shall in any case
remain unimpaired. (1037)
Art. 1064. When the grandchildren, who survive with their uncles, aunts, or
cousins, inherit from their grandparents in representation of their father
or mother, they shall bring to collation all that their parents, if alive, would
have been obliged to bring, even though such grandchildren have not
inherited the property.

They shall also bring to collation all that they may have received from the
decedent during his lifetime, unless the testator has provided otherwise, in
which case his wishes must be respected, if the legitime of the co-heirs is
not prejudiced. (1038)

Art. 1065. Parents are not obliged to bring to collation in the inheritance of
their ascendants any property which may have been donated by the latter to
their children. (1039)

Art. 1066. Neither shall donations to the spouse of the child be brought to
collation; but if they have been given by the parent to the spouses jointly,
the child shall be obliged to bring to collation one-half of the thing donated.
(1040)

Art. 1067. Expenses for support, education, medical attendance, even in

extraordinary illness, apprenticeship, ordinary equipment, or customary
gifts are not subject to collation. (1041)

Art. 1068. Expenses incurred by the parents in giving their children a

professional, vocational or other career shall not be brought to collation
unless the parents so provide, or unless they impair the legitime; but when
their collation is required, the sum which the child would have spent if he
had lived in the house and company of his parents shall be deducted
therefrom. (1042a)

Art. 1069. Any sums paid by a parent in satisfaction of the debts of his
children, election expenses, fines, and similar expenses shall be brought to
collation. (1043a)

Art. 1070. Wedding gifts by parents and ascendants consisting of jewelry,

clothing, and outfit, shall not be reduced as inofficious except insofar as
they may exceed one-tenth of the sum which is disposable by will. (1044)

Art. 1071. The same things donated are not to be brought to collation and
partition, but only their value at the time of the donation, even though their
just value may not then have been assessed.

Their subsequent increase or deterioration and even their total loss or

destruction, be it accidental or culpable, shall be for the benefit or account
and risk of the donee. (1045a)
Art. 1072. In the collation of a donation made by both parents, one-half
shall be brought to the inheritance of the father, and the other half, to that
of the mother. That given by one alone shall be brought to collation in his or
her inheritance. (1046a)

Art. 1073. The donee's share of the estate shall be reduced by an amount
equal to that already received by him; and his co-heirs shall receive an
equivalent, as much as possible, in property of the same nature, class and
quality. (1047)

Art. 1074. Should the provisions of the preceding article be impracticable, if

the property donated was immovable, the co-heirs shall be entitled to
receive its equivalent in cash or securities, at the rate of quotation; and
should there be neither cash or marketable securities in the estate, so much
of the other property as may be necessary shall be sold at public auction.

If the property donated was movable, the co-heirs shall only have a right to
select an equivalent of other personal property of the inheritance at its just
price. (1048)

Art. 1075. The fruits and interest of the property subject to collation shall
not pertain to the estate except from the day on which the succession is
opened.

For the purpose of ascertaining their amount, the fruits and interest of the
property of the estate of the same kind and quality as that subject to
collation shall be made the standard of assessment. (1049)

Art. 1076. The co-heirs are bound to reimburse to the donee the necessary
expenses which he has incurred for the preservation of the property
donated to him, though they may not have augmented its value.

The donee who collates in kind an immovable which has been given to him
must be reimbursed by his co-heirs for the improvements which have
increased the value of the property, and which exist at the time the partition
if effected.

As to works made on the estate for the mere pleasure of the donee, no
reimbursement is due him for them; he has, however, the right to remove
them, if he can do so without injuring the estate. (n)

Art. 1077. Should any question arise among the co-heirs upon the obligation
to bring to collation or as to the things which are subject to collation, the
distribution of the estate shall not be interrupted for this reason, provided
adequate security is given. (1050)
 SECTION 6. - Partition and Distribution of the Estate

SUBSECTION 1. - Partition

Art. 1078. Where there are two or more heirs, the whole estate of the
decedent is, before its partition, owned in common by such heirs, subject to
the payment of debts of the deceased. (n)

Art. 1079. Partition, in general, is the separation, division and assignment

of a thing held in common among those to whom it may belong. The thing
itself may be divided, or its value. (n)

Art. 1080. Should a person make partition of his estate by an act inter vivos,
or by will, such partition shall be respected, insofar as it does not prejudice
the legitime of the compulsory heirs.

A parent who, in the interest of his or her family, desires to keep any
agricultural, industrial, or manufacturing enterprise intact, may avail
himself of the right granted him in this article, by ordering that the legitime
of the other children to whom the property is not assigned, be paid in cash.
(1056a)

Art. 1081. A person may, by an act inter vivos or mortis causa, intrust the
mere power to make the partition after his death to any person who is not
one of the co-heirs.

The provisions of this and of the preceding article shall be observed even
should there be among the co-heirs a minor or a person subject to
guardianship; but the mandatary, in such case, shall make an inventory of
the property of the estate, after notifying the co-heirs, the creditors, and the
legatees or devisees. (1057a)

Art. 1082. Every act which is intended to put an end to indivision among co-
heirs and legatees or devisees is deemed to be a partition, although it
should purport to be a sale, and exchange, a compromise, or any other
transaction. (n)

Art. 1083. Every co-heir has a right to demand the division of the estate
unless the testator should have expressly forbidden its partition, in which
case the period of indivision shall not exceed twenty years as provided in
article 494. This power of the testator to prohibit division applies to the
legitime.

Even though forbidden by the testator, the co-ownership terminates when

any of the causes for which partnership is dissolved takes place, or when
the court finds for compelling reasons that division should be ordered,
upon petition of one of the co-heirs. (1051a)
Art. 1084. Voluntary heirs upon whom some condition has been imposed
cannot demand a partition until the condition has been fulfilled; but the
other co-heirs may demand it by giving sufficient security for the rights
which the former may have in case the condition should be complied with,
and until it is known that the condition has not been fulfilled or can never
be complied with, the partition shall be understood to be provisional. (1054a)

Art. 1085. In the partition of the estate, equality shall be observed as far as
possible, dividing the property into lots, or assigning to each of the co-heirs
things of the same nature, quality and kind. (1061)

Art. 1086. Should a thing be indivisible, or would be much impaired by its

being divided, it may be adjudicated to one of the heirs, provided he shall
pay the others the excess in cash.

Nevertheless, if any of the heirs should demand that the thing be sold at
public auction and that strangers be allowed to bid, this must be done. (1062)

Art. 1087. In the partition the co-heirs shall reimburse one another for the
income and fruits which each one of them may have received from any
property of the estate, for any useful and necessary expenses made upon
such property, and for any damage thereto through malice or neglect. (1063)

Art. 1088. Should any of the heirs sell his hereditary rights to a stranger
before the partition, any or all of the co-heirs may be subrogated to the
rights of the purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one month from the time they were
notified in writing of the sale by the vendor. (1067a)

Art. 1089. The titles of acquisition or ownership of each property shall be

delivered to the co-heir to whom said property has been adjudicated. (1065a)

Art. 1090. When the title comprises two or more pieces of land which have
been assigned to two or more co-heirs, or when it covers one piece of land
which has been divided between two or more co-heirs, the title shall be
delivered to the one having the largest interest, and authentic copies of the
title shall be furnished to the other co-heirs at the expense of the estate. If
the interest of each co-heir should be the same, the oldest shall have the
title. (1066a)

SUBSECTION 2. - Effects of Partition

Art. 1091. A partition legally made confers upon each heir the exclusive
ownership of the property adjudicated to him. (1068)
Art. 1092. After the partition has been made, the co-heirs shall be
reciprocally bound to warrant the title to, and the quality of, each property
adjudicated. (1069a)

Art. 1093. The reciprocal obligation of warranty referred to in the preceding

article shall be proportionate to the respective hereditary shares of the co-
heirs, but if any one of them should be insolvent, the other co-heirs shall be
liable for his part in the same proportion, deducting the part corresponding
to the one who should be indemnified.

Those who pay for the insolvent heir shall have a right of action against him
for reimbursement, should his financial condition improve. (1071)

Art. 1094. An action to enforce the warranty among heirs must be brought
within ten years from the date the right of action accrues. (n)

Art. 1095. If a credit should be assigned as collectible, the co-heirs shall not
be liable for the subsequent insolvency of the debtor of the estate, but only
for his insolvency at the time the partition is made.

The warranty of the solvency of the debtor can only be enforced during the
five years following the partition.

Co-heirs do not warrant bad debts, if so known to, and accepted by, the
distributee. But if such debts are not assigned to a co-heir, and should be
collected, in whole or in part, the amount collected shall be distributed
proportionately among the heirs. (1072a)

Art. 1096. The obligation of warranty among co-heirs shall cease in the
following cases:

(1) When the testator himself has made the partition, unless it
appears, or it may be reasonably presumed, that his intention was
otherwise, but the legitime shall always remain unimpaired;

(2) When it has been so expressly stipulated in the agreement of

partition, unless there has been bad faith;

(3) When the eviction is due to a cause subsequent to the partition, or

has been caused by the fault of the distributee of the property. (1070a)

SUBSECTION 3. - Rescission and Nullity of Partition

Art. 1097. A partition may be rescinded or annulled for the same causes as
contracts. (1073a)
Art. 1098. A partition, judicial or extra-judicial, may also be rescinded on
account of lesion, when any one of the co-heirs received things whose value
is less, by at least one-fourth, than the share to which he is entitled,
considering the value of the things at the time they were adjudicated. (1074a)

Art. 1099. The partition made by the testator cannot be impugned on the
ground of lesion, except when the legitime of the compulsory heirs is
thereby prejudiced, or when it appears or may reasonably be presumed,
that the intention of the testator was otherwise. (1075)

Art. 1100. The action for rescission on account of lesion shall prescribe
after four years from the time the partition was made. (1076)

Art. 1101. The heir who is sued shall have the option of indemnifying the
plaintiff for the loss, or consenting to a new partition.

Indemnity may be made by payment in cash or by the delivery of a thing of

the same kind and quality as that awarded to the plaintiff.

If a new partition is made, it shall affect neither those who have not been
prejudiced nor those have not received more than their just share. (1077a)

Art. 1102. An heir who has alienated the whole or a considerable part of the
real property adjudicated to him cannot maintain an action for rescission
on the ground of lesion, but he shall have a right to be indemnified in cash.
(1078a)

Art. 1103. The omission of one or more objects or securities of the

inheritance shall not cause the rescission of the partition on the ground of
lesion, but the partition shall be completed by the distribution of the objects
or securities which have been omitted. (1079a)

Art. 1104. A partition made with preterition of any of the compulsory heirs
shall not be rescinded, unless it be proved that there was bad faith or fraud
on the part of the other persons interested; but the latter shall be
proportionately obliged to pay to the person omitted the share which
belongs to him. (1080)

Art. 1105. A partition which includes a person believed to be an heir, but

who is not, shall be void only with respect to such person. (1081a)

Title V. - PRESCRIPTION

CHAPTER 1
GENERAL PROVISIONS
Art. 1106. By prescription, one acquires ownership and other real rights
through the lapse of time in the manner and under the conditions laid down
by law.

In the same way, rights and conditions are lost by prescription. (1930a)

Art. 1107. Persons who are capable of acquiring property or rights by the
other legal modes may acquire the same by means of prescription.

Minors and other incapacitated persons may acquire property or rights by

prescription, either personally or through their parents, guardians or legal
representatives. (1931a)

Art. 1108. Prescription, both acquisitive and extinctive, runs against:

(1) Minors and other incapacitated persons who have parents,

guardians or other legal representatives;

(2) Absentees who have administrators, either appointed by them

before their disappearance, or appointed by the courts;

(3) Persons living abroad, who have managers or administrators;

(4) Juridical persons, except the State and its subdivisions.

Persons who are disqualified from administering their property have

a right to claim damages from their legal representatives whose
negligence has been the cause of prescription. (1932a)

Art. 1109. Prescription does not run between husband and wife, even
though there be a separation of property agreed upon in the marriage
settlements or by judicial decree.

Neither does prescription run between parents and children, during the
minority or insanity of the latter, and between guardian and ward during
the continuance of the guardianship. (n)

Art. 1110. Prescription, acquisitive and extinctive, runs in favor of, or

against a married woman. (n)

Art. 1111. Prescription obtained by a co-proprietor or a co-owner shall

benefit the others. (1933)

Art. 1112. Persons with capacity to alienate property may renounce

prescription already obtained, but not the right to prescribe in the future.
Prescription is deemed to have been tacitly renounced when the
renunciation results from acts which imply the abandonment of the right
acquired. (1935)

Art. 1113. All things which are within the commerce of men are susceptible
of prescription, unless otherwise provided. Property of the State or any of
its subdivisions not patrimonial in character shall not be the object of
prescription. (1936a)

Art. 1114. Creditors and all other persons interested in making the
prescription effective may avail themselves thereof notwithstanding the
express or tacit renunciation by the debtor or proprietor. (1937)

Art. 1115. The provisions of the present Title are understood to be without
prejudice to what in this Code or in special laws is established with respect
to specific cases of prescription. (1938)

Art. 1116. Prescription already running before the effectivity of this Code
shall be governed by laws previously in force; but if since the time this Code
took effect the entire period herein required for prescription should elapse,
the present Code shall be applicable, even though by the former laws a
longer period might be required. (1939)

CHAPTER 2
PRESCRIPTION OF OWNERSHIP AND OTHER REAL RIGHTS

Art. 1117. Acquisitive prescription of dominion and other real rights may be
ordinary or extraordinary.

Ordinary acquisitive prescription requires possession of things in good

faith and with just title for the time fixed by law. (1940a)

Art. 1118. Possession has to be in the concept of an owner, public, peaceful

and uninterrupted. (1941)

Art. 1119. Acts of possessory character executed in virtue of license or by

mere tolerance of the owner shall not be available for the purposes of
possession. (1942)

Art. 1120. Possession is interrupted for the purposes of prescription,

naturally or civilly. (1943)

Art. 1121. Possession is naturally interrupted when through any cause it

should cease for more than one year.
The old possession is not revived if a new possession should be exercised by
the same adverse claimant. (1944a)

Art. 1122. If the natural interruption is for only one year or less, the time
elapsed shall be counted in favor of the prescription. (n)

Art. 1123. Civil interruption is produced by judicial summons to the

possessor. (1945a)

Art. 1124. Judicial summons shall be deemed not to have been issued and
shall not give rise to interruption:

(1) If it should be void for lack of legal solemnities;

(2) If the plaintiff should desist from the complaint or should allow
the proceedings to lapse;

(3) If the possessor should be absolved from the complaint.

In all these cases, the period of the interruption shall be counted for
the prescription. (1946a)

Art. 1125. Any express or tacit recognition which the possessor may make of
the owner's right also interrupts possession. (1948)

Art. 1126. Against a title recorded in the Registry of Property, ordinary

prescription of ownership or real rights shall not take place to the prejudice
of a third person, except in virtue of another title also recorded; and the
time shall begin to run from the recording of the latter.

As to lands registered under the Land Registration Act, the provisions of

that special law shall govern. (1949a)

Art. 1127. The good faith of the possessor consists in the reasonable belief
that the person from whom he received the thing was the owner thereof,
and could transmit his ownership. (1950a)

Art. 1128. The conditions of good faith required for possession in Articles
526, 527, 528, and 529 of this Code are likewise necessary for the
determination of good faith in the prescription of ownership and other real
rights. (1951)

Art. 1129. For the purposes of prescription, there is just title when the
adverse claimant came into possession of the property through one of the
modes recognized by law for the acquisition of ownership or other real
rights, but the grantor was not the owner or could not transmit any right. (n)
Art. 1130. The title for prescription must be true and valid. (1953)

Art. 1131. For the purposes of prescription, just title must be proved; it is
never presumed. (1954a)

Art. 1132. The ownership of movables prescribes through uninterrupted

possession for four years in good faith.

The ownership of personal property also prescribes through uninterrupted

possession for eight years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of
which he has been illegally deprived, as well as with respect to movables
acquired in a public sale, fair, or market, or from a merchant's store the
provisions of Articles 559 and 1505 of this Code shall be observed. (1955a)

Art. 1133. Movables possessed through a crime can never be acquired

through prescription by the offender. (1956a)

Art. 1134. Ownership and other real rights over immovable property are
acquired by ordinary prescription through possession of ten years. (1957a)

Art. 1135. In case the adverse claimant possesses by mistake an area

greater, or less than that expressed in his title, prescription shall be based
on the possession. (n)

Art. 1136. Possession in wartime, when the civil courts are not open, shall
not be counted in favor of the adverse claimant.

Art. 1137. Ownership and other real rights over immovables also prescribe
through uninterrupted adverse possession thereof for thirty years, without
need of title or of good faith. (1959a)

Art. 1138. In the computation of time necessary for prescription the

following rules shall be observed:

(1) The present possessor may complete the period necessary for
prescription by tacking his possession to that of his grantor or
predecessor in interest;

(2) It is presumed that the present possessor who was also the
possessor at a previous time, has continued to be in possession during
the intervening time, unless there is proof to the contrary;

(3) The first day shall be excluded and the last day included. (1960a)

CHAPTER 3
 PRESCRIPTION OF ACTIONS

Art. 1139. Actions prescribe by the mere lapse of time fixed by law. (1961)

Art. 1140. Actions to recover movables shall prescribe eight years from the
time the possession thereof is lost, unless the possessor has acquired the
ownership by prescription for a less period, according to Articles 1132, and
without prejudice to the provisions of Articles 559, 1505, and 1133. (1962a)

Art. 1141. Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition

of ownership and other real rights by prescription. (1963)

Art. 1142. A mortgage action prescribes after ten years. (1964a)

Art. 1143. The following rights, among others specified elsewhere in this
Code, are not extinguished by prescription:

(1) To demand a right of way, regulated in Article 649;

(2) To bring an action to abate a public or private nuisance. (n)

Art. 1144. The following actions must be brought within ten years from the
time the right of action accrues:
(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (n)

Art. 1145. The following actions must be commenced within six years:
(1) Upon an oral contract;

(2) Upon a quasi-contract. (n)

Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity, or conduct
of any public officer involving the exercise of powers or authority arising
from Martial Law including the arrest, detention and/or trial of the
plaintiff, the same must be brought within one (1) year. (As amended by PD No. 1755,
Dec. 24, 1980.)
Art. 1147. The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation. (n)

Art. 1148. The limitations of action mentioned in Articles 1140 to 1142, and
1144 to 1147 are without prejudice to those specified in other parts of this
Code, in the Code of Commerce, and in special laws. (n)

Art. 1149. All other actions whose periods are not fixed in this Code or in
other laws must be brought within five years from the time the right of
action accrues. (n)

Art. 1150. The time for prescription for all kinds of actions, when there is no
special provision which ordains otherwise, shall be counted from the day
they may be brought. (1969)

Art. 1151. The time for the prescription of actions which have for their
object the enforcement of obligations to pay principal with interest or
annuity runs from the last payment of the annuity or of the interest. (1970a)

Art. 1152. The period for prescription of actions to demand the fulfillment
of obligation declared by a judgment commences from the time the
judgment became final. (1971)

Art. 1153. The period for prescription of actions to demand accounting runs
from the day the persons who should render the same cease in their
functions.

The period for the action arising from the result of the accounting runs
from the date when said result was recognized by agreement of the
interested parties. (1972)

Art. 1154. The period during which the obligee was prevented by a
fortuitous event from enforcing his right is not reckoned against him. (n)

Art. 1155. The prescription of actions is interrupted when they are filed
before the court, when there is a written extrajudicial demand by the
creditors, and when there is any written acknowledgment of the debt by the
debtor. (1973a)

BOOK IV

OBLIGATIONS AND CONTRACTS

 Title. I. - OBLIGATIONS

CHAPTER 1
GENERAL PROVISIONS

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

Art. 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts. (1089a)

Art. 1158. Obligations derived from law are not presumed. Only those
expressly determined in this Code or in special laws are demandable, and
shall be regulated by the precepts of the law which establishes them; and as
to what has not been foreseen, by the provisions of this Book. (1090)

Art. 1159. Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith. (1091a)

Art. 1160. Obligations derived from quasi-contracts shall be subject to the

provisions of Chapter 1, Title XVII, of this Book. (n)

Art. 1161. Civil obligations arising from criminal offenses shall be governed
by the penal laws, subject to the provisions of Article 2177, and of the
pertinent provisions of Chapter 2, Preliminary Title, on Human Relations,
and of Title XVIII of this Book, regulating damages. (1092a)

Art. 1162. Obligations derived from quasi-delicts shall be governed by the

provisions of Chapter 2, Title XVII of this Book, and by special laws. (1093a)

CHAPTER 2
NATURE AND EFFECT OF OBLIGATIONS

Art. 1163. Every person obliged to give something is also obliged to take care
of it with the proper diligence of a good father of a family, unless the law or
the stipulation of the parties requires another standard of care. (1094a)
Art. 1164. The creditor has a right to the fruits of the thing from the time the
obligation to deliver it arises. However, he shall acquire no real right over it
until the same has been delivered to him. (1095)

Art. 1165. When what is to be delivered is a determinate thing, the creditor,

in addition to the right granted him by Article 1170, may compel the debtor
to make the delivery.

If the thing is indeterminate or generic, he may ask that the obligation be

complied with at the expense of the debtor.

If the obligor delays, or has promised to deliver the same thing to two or
more persons who do not have the same interest, he shall be responsible for
any fortuitous event until he has effected the delivery. (1096)

Art. 1166. The obligation to give a determinate thing includes that of

delivering all its accessions and accessories, even though they may not have
been mentioned. (1097a)

Art. 1167. If a person obliged to do something fails to do it, the same shall be
executed at his cost.

This same rule shall be observed if he does it in contravention of the tenor

of the obligation. Furthermore, it may be decreed that what has been poorly
done be undone. (1098)

Art. 1168. When the obligation consists in not doing, and the obligor does
what has been forbidden him, it shall also be undone at his expense.
(1099a)

Art. 1169. Those obliged to deliver or to do something incur in delay from

the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that
delay may exist:

(1) When the obligation or the law expressly so declare; or

(2) When from the nature and the circumstances of the obligation it
appears that the designation of the time when the thing is to be
delivered or the service is to be rendered was a controlling motive for
the establishment of the contract; or

(3) When demand would be useless, as when the obligor has rendered
it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills his
obligation, delay by the other begins. (1100a)

Art. 1170. Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages. (1101)

Art. 1171. Responsibility arising from fraud is demandable in all obligations.

Any waiver of an action for future fraud is void. (1102a)

Art. 1172. Responsibility arising from negligence in the performance of

every kind of obligation is also demandable, but such liability may be
regulated by the courts, according to the circumstances. (1103)

Art. 1173. The 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 circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of Articles 1171 and
2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in
the performance, that which is expected of a good father of a family shall be
required. (1104a)

Art. 1174. Except in cases expressly specified by the law, or when it is

otherwise declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which, though foreseen, were
inevitable. (1105a)

Art. 1175. Usurious transactions shall be governed by special laws. (n)

Art. 1176. The receipt of the principal by the creditor without reservation
with respect to the interest, shall give rise to the presumption that said
interest has been paid.

The receipt of a later installment of a debt without reservation as to prior

installments, shall likewise raise the presumption that such installments
have been paid. (1110a)

Art. 1177. The creditors, after having pursued the property in possession of
the debtor to satisfy their claims, may exercise all the rights and bring all
the actions of 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 them. (1111)
Art. 1178. Subject to the laws, all rights acquired in virtue of an obligation
are transmissible, if there has been no stipulation to the contrary. (1112)

CHAPTER 3
DIFFERENT KINDS OF OBLIGATIONS

SECTION 1. - Pure and Conditional Obligations

Art. 1179. Every obligation whose performance does not depend upon a
future or uncertain event, or upon a past event unknown to the parties, is
demandable at once.

Every obligation which contains a resolutory condition shall also be

demandable, without prejudice to the effects of the happening of the event.
(1113)

Art. 1180. When the debtor binds himself to pay when his means permit
him to do so, the obligation shall be deemed to be one with a period, subject
to the provisions of Article 1197. (n)

Art. 1181. In conditional obligations, the acquisition of rights, as well as the

extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition. (1114)

Art. 1182. When the fulfillment of the condition depends upon the sole will
of the debtor, the conditional obligation shall be void. If it depends upon
chance or upon the will of a third person, the obligation shall take effect in
conformity with the provisions of this Code. (1115)

Art. 1183. Impossible conditions, those contrary to good customs or public

policy and those prohibited by law shall annul the obligation which depends
upon them. If the obligation is divisible, that part thereof which is not
affected by the impossible or unlawful condition shall be valid.

The condition not to do an impossible thing shall be considered as not

having been agreed upon. (1116a)

Art. 1184. The condition that some event happen at a determinate time shall
extinguish the obligation as soon as the time expires or if it has become
indubitable that the event will not take place. (1117)

Art. 1185. The condition that some event will not happen at a determinate
time shall render the obligation effective from the moment the time
indicated has elapsed, or if it has become evident that the event cannot
occur.
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 obligation. (1118)

Art. 1186. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment. (1119)

Art. 1187. 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. Nevertheless, when the obligation imposes reciprocal
prestations upon the parties, the fruits and interests during the pendency of
the condition shall be deemed to have been mutually compensated. If the
obligation is unilateral, the debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances of the obligation it
should be inferred that the intention of the person constituting the same
was different.

In obligations to do and not to do, the courts shall determine, in each case,
the retroactive effect of the condition that has been complied with. (1120)

Art. 1188. The creditor may, before the fulfillment of the condition, bring
the appropriate actions for the preservation of his right.

The debtor may recover what during the same time he has paid by mistake
in case of a suspensive condition. (1121a)

Art. 1189. When the conditions have been imposed with the intention of
suspending the efficacy of an obligation to give, the following rules shall be
observed in case of the improvement, loss or deterioration of the thing
during the pendency of the condition:

(1) If the thing is lost without the fault of the debtor, the obligation
shall be extinguished;

(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 it
perishes, or goes out of commerce, or disappears in such a way that
its existence is unknown or it cannot be recovered;

(3) When the thing deteriorates without the fault of the debtor, the
impairment is to be borne by the creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may
choose between the rescission of the obligation and its fulfillment,
with indemnity for damages in either case;
 (5) If the thing is improved by its nature, or by time, the improvement
shall inure to the benefit of the creditor;

(6) If it is improved at the expense of the debtor, he shall have no

other right than that granted to the usufructuary. (1122)

Art. 1190. When the conditions have for their purpose the extinguishment
of an obligation to give, the parties, upon the fulfillment of said conditions,
shall return to each other what they have received.

In case of the loss, deterioration or improvement of the thing, the

provisions which, with respect to the debtor, are laid down in the preceding
article shall be applied to the party who is bound to return.

As for the obligations to do and not to do, the provisions of the second
paragraph of Article 1187 shall be observed as regards the effect of the
extinguishment of the obligation. (1123)

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in

case one of the obligors should not comply with what is incumbent upon
him.

The injured party may choose between the fulfillment and the rescission of
the obligation, with the payment of damages in either case. He may also
seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.

The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons

who have acquired the thing, in accordance with Articles 1385 and 1388 and
the Mortgage Law. (1124)

Art. 1192. In case both parties have committed a breach of the obligation,
the liability of the first infractor shall be equitably tempered by the courts.
If it cannot be determined which of the parties first violated the contract,
the same shall be deemed extinguished, and each shall bear his own
damages. (n)

SECTION 2. - Obligations with a Period

Art. 1193. Obligations for whose fulfillment a day certain has been fixed,
shall be demandable only when that day comes.
Obligations with a resolutory period take effect at once, but terminate upon
arrival of the day certain.

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, the
obligation is conditional, and it shall be regulated by the rules of the
preceding Section. (1125a)

Art. 1194. In case of loss, deterioration or improvement of the thing before

the arrival of the day certain, the rules in Article 1189 shall be observed. (n)

Art. 1195. Anything paid or delivered before the arrival of the period, the
obligor being unaware of the period or believing that the obligation has
become due and demandable, may be recovered, with the fruits and
interests. (1126a)

Art. 1196. Whenever in an obligation a period is designated, it is presumed

to have been established for the benefit of both the creditor and the debtor,
unless from the tenor of the same or other circumstances it should appear
that the period has been established in favor of one or of the other. (1127)

Art. 1197. If the obligation does not fix a period, but from its nature and the
circumstances it can be inferred that a period was intended, the courts may
fix the duration thereof.

The courts shall also fix the duration of the period when it depends upon
the will of the debtor.

In every case, the courts shall determine such period as may under the
circumstances have been probably contemplated by the parties. Once fixed
by the courts, the period cannot be changed by them. (1128a)

Art. 1198. The debtor shall lose every right to make use of the period:

(1) When after the obligation has been contracted, he becomes insolvent,
unless he gives a guaranty or security for the debt;

(2) When he does not furnish to the creditor the guaranties or securities
which he has promised;

(3) When by his own acts he has impaired said guaranties or securities after
their establishment, and when through a fortuitous event they disappear,
unless he immediately gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in consideration of which the
creditor agreed to the period;

(5) When the debtor attempts to abscond. (1129a)

SECTION 3. - Alternative Obligations

Art. 1199. A person alternatively bound by different prestations shall

completely perform one of them.

The creditor cannot be compelled to receive part of one and part of the
other undertaking. (1131)

Art. 1200. The right of choice belongs to the debtor, unless it has been
expressly granted to the creditor.

The debtor shall have no right to choose those prestations which are
impossible, unlawful or which could not have been the object of the
obligation. (1132)

Art. 1201. The choice shall produce no effect except from the time it has
been communicated. (1133)

Art. 1202. The debtor shall lose the right of choice when among the
prestations whereby he is alternatively bound, only one is practicable.
(1134)

Art. 1203. If through the creditor's acts the debtor cannot make a choice
according to the terms of the obligation, the latter may rescind the contract
with damages. (n)

Art. 1204. The creditor shall have a right to indemnity for damages when,
through the fault of the debtor, all the things which are alternatively the
object of the obligation have been lost, or the compliance of the obligation
has become impossible.

The indemnity shall be fixed taking as a basis the value of the last thing
which disappeared, or that of the service which last became impossible.

Damages other than the value of the last thing or service may also be
awarded. (1135a)

Art. 1205. When the choice has been expressly given to the creditor, the
obligation shall cease to be alternative from the day when the selection has
been communicated to the debtor.
Until then the responsibility of the debtor shall be governed by the
following rules:

(1) If one of the things is lost through a fortuitous event, he shall

perform the obligation by delivering that which the creditor should
choose from among the remainder, or that which remains if only one
subsists;

(2) If the loss of one of the things occurs through the fault of the
debtor, the creditor may claim any of those subsisting, or the price of
that which, through the fault of the former, has disappeared, with a
right to damages;

(3) If all the things are lost through the fault of the debtor, the choice
by the creditor shall fall upon the price of any one of them, also with
indemnity for damages.

The same rules shall be applied to obligations to do or not to do in case one,

some or all of the prestations should become impossible. (1136a)

Art. 1206. When only one prestation has been agreed upon, but the obligor
may render another in substitution, the obligation is called facultative.

The loss or deterioration of the thing intended as a substitute, through the

negligence of the obligor, does not render him liable. But once the
substitution has been made, the obligor is liable for the loss of the
substitute on account of his delay, negligence or fraud. (n)

SECTION 4. - Joint and Solidary Obligations

Art. 1207. The concurrence of two or more creditors or of two or more

debtors in one and the same obligation does not imply that each one of the
former has a right to demand, or that each one of the latter is bound to
render, entire compliance with the prestation. There is a solidary liability
only when the obligation expressly so states, or when the law or the nature
of the obligation requires solidarity. (1137a)

Art. 1208. If from the law, or the nature or the wording of the obligations to
which the preceding article refers the contrary does not appear, the credit
or debt shall be presumed to be divided into as many shares as there are
creditors or debtors, the credits or debts being considered distinct from one
another, subject to the Rules of Court governing the multiplicity of suits.
(1138a)

Art. 1209. If the division is impossible, the right of the creditors may be
prejudiced only by their collective acts, and the debt can be enforced only by
proceeding against all the debtors. If one of the latter should be insolvent,
the others shall not be liable for his share. (1139)

Art. 1210. The indivisibility of an obligation does not necessarily give rise to
solidarity. Nor does solidarity of itself imply indivisibility. (n)

Art. 1211. Solidarity may exist although the creditors and the debtors may
not be bound in the same manner and by the same periods and conditions.
(1140)

Art. 1212. Each one of the solidary creditors may do whatever may be useful
to the others, but not anything which may be prejudicial to the latter.
(1141a)

Art. 1213. A solidary creditor cannot assign his rights without the consent of
the others. (n)

Art. 1214. The debtor may pay any one of the solidary creditors; but if any
demand, judicial or extrajudicial, has been made by one of them, payment
should be made to him. (1142a)

Art. 1215. Novation, compensation, confusion or remission of the debt,

made by any of the solidary creditors or with any of the solidary debtors,
shall extinguish the obligation, without prejudice to the provisions of
Article 1219.

The creditor who may have executed any of these acts, as well as he who
collects the debt, shall be liable to the others for the share in the obligation
corresponding to them. (1143)

Art. 1216. The creditor may proceed against any one of the solidary debtors
or some or all of them simultaneously. The demand made against one of
them shall not be an obstacle to those which may subsequently be directed
against the others, so long as the debt has not been fully collected. (1144a)

Art. 1217. Payment made by one of the solidary debtors extinguishes the
obligation. If two or more solidary debtors offer to pay, the creditor may
choose which offer to accept.

He who made the payment may claim from his co-debtors only the share
which corresponds to each, with the interest for the payment already made.
If the payment is made before the debt is due, no interest for the
intervening period may be demanded.

When one of the solidary debtors cannot, because of his insolvency,

reimburse his share to the debtor paying the obligation, such share shall be
borne by all his co-debtors, in proportion to the debt of each. (1145a)
Art. 1218. Payment by a solidary debtor shall not entitle him to
reimbursement from his co-debtors if such payment is made after the
obligation has prescribed or become illegal. (n)

Art. 1219. The remission made by the creditor of the share which affects one
of the solidary debtors does not release the latter from his responsibility
towards the co-debtors, in case the debt had been totally paid by anyone of
them before the remission was effected. (1146a)

Art. 1220. The remission of the whole obligation, obtained by one of the
solidary debtors, does not entitle him to reimbursement from his co-
debtors. (n)

Art. 1221. If the thing has been lost or if the prestation has become
impossible without the fault of the solidary debtors, the obligation shall be
extinguished.

If there was fault on the part of any one of them, all shall be responsible to
the creditor, for the price and the payment of damages and interest, without
prejudice to their action against the guilty or negligent debtor.

If through a fortuitous event, the thing is lost or the performance has

become impossible after one of the solidary debtors has incurred in delay
through the judicial or extrajudicial demand upon him by the creditor, the
provisions of the preceding paragraph shall apply. (1147a)

Art. 1222. A solidary debtor may, in actions filed by the creditor, avail
himself of all defenses which are derived from the nature of the obligation
and of those which are personal to him, or pertain to his own share. With
respect to those which personally belong to the others, he may avail himself
thereof only as regards that part of the debt for which the latter are
responsible. (1148a)

SECTION 5. - Divisible and Indivisible Obligations

Art. 1223. The divisibility or indivisibility of the things that are the object of
obligations in which there is only one debtor and only one creditor does not
alter or modify the provisions of Chapter 2 of this Title. (1149)

Art. 1224. A joint indivisible obligation gives rise to indemnity for damages
from the time anyone of the debtors does not comply with his undertaking.
The debtors who may have been ready to fulfill their promises shall not
contribute to the indemnity beyond the corresponding portion of the price
of the thing or of the value of the service in which the obligation consists.
(1150)
Art. 1225. For the purposes of the preceding articles, obligations to give
definite things and those which are not susceptible of partial performance
shall be deemed to be indivisible.

When the obligation has for its object the execution of a certain number of
days of work, the accomplishment of work by metrical units, or analogous
things which by their nature are susceptible of partial performance, it shall
be divisible.

However, even though the object or service may be physically divisible, an

obligation is indivisible if so provided by law or intended by the parties.

In obligations not to do, divisibility or indivisibility shall be determined by

the character of the prestation in each particular case. (1151a)

SECTION 6. - Obligations with a Penal Clause

Art. 1226. In obligations with a penal clause, the penalty shall substitute the
indemnity for damages and the payment of interests in case of
noncompliance, if there is no stipulation to the contrary. Nevertheless,
damages shall be paid if the obligor refuses to pay the penalty or is guilty of
fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in accordance with

the provisions of this Code. (1152a)

Art. 1227. The debtor cannot exempt himself from the performance of the
obligation by paying the penalty, save in the case where this right has been
expressly reserved for him. Neither can the creditor demand the fulfillment
of the obligation and the satisfaction of the penalty at the same time, unless
this right has been clearly granted him. However, if after the creditor has
decided to require the fulfillment of the obligation, the performance thereof
should become impossible without his fault, the penalty may be enforced.
(1153a)

Art. 1228. Proof of actual damages suffered by the creditor is not necessary
in order that the penalty may be demanded. (n)

Art. 1229. The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even
if there has been no performance, the penalty may also be reduced by the
courts if it is iniquitous or unconscionable. (1154a)

Art. 1230. The nullity of the penal clause does not carry with it that of the
principal obligation.
The nullity of the principal obligation carries with it that of the penal
clause. (1155)

CHAPTER 4
EXTINGUISHMENT OF OBLIGATIONS

GENERAL PROVISIONS

Art. 1231. Obligations are extinguished:

(1) By payment or performance:

(2) By the loss of the thing due:

(3) By the condonation or remission of the debt;

(4) By the confusion or merger of the rights of creditor and debtor;

(5) By compensation;

(6) By novation.

Other causes of extinguishment of obligations, such as annulment,

rescission, fulfillment of a resolutory condition, and prescription, are
governed elsewhere in this Code. (1156a)

SECTION 1. - Payment or Performance

Art. 1232. Payment means not only the delivery of money but also the
performance, in any other manner, of an obligation. (n)

Art. 1233. A debt shall not be understood to have been paid unless the thing
or service in which the obligation consists has been completely delivered or
rendered, as the case may be. (1157)

Art. 1234. If the obligation has been substantially performed in good faith,
the obligor may recover as though there had been a strict and complete
fulfillment, less damages suffered by the obligee. (n)

Art. 1235. When the obligee accepts the performance, knowing its
incompleteness or irregularity, and without expressing any protest or
objection, the obligation is deemed fully complied with. (n)

Art. 1236. The creditor is not bound to accept payment or performance by a

third person who has no interest in the fulfillment of the obligation, unless
there is a stipulation to the contrary.
Whoever pays for another may demand from the debtor what he has paid,
except that if he paid without the knowledge or against the will of the
debtor, he can recover only insofar as the payment has been beneficial to
the debtor. (1158a)

Art. 1237. Whoever pays on behalf of the debtor without the knowledge or
against the will of the latter, cannot compel the creditor to subrogate him in
his rights, such as those arising from a mortgage, guaranty, or penalty.
(1159a)

Art. 1238. Payment made by a third person who does not intend to be
reimbursed by the debtor is deemed to be a donation, which requires the
debtor's consent. But the payment is in any case valid as to the creditor who
has accepted it. (n)

Art. 1239. In obligations to give, payment made by one who does not have
the free disposal of the thing due and capacity to alienate it shall not be
valid, without prejudice to the provisions of Article 1427 under the Title on
"Natural Obligations." (1160a)

Art. 1240. Payment shall be made to the person in whose favor the
obligation has been constituted, or his successor in interest, or any person
authorized to receive it. (1162a)

Art. 1241. Payment to a person who is incapacitated to administer his

property shall be valid if he has kept the thing delivered, or insofar as the
payment has been beneficial to him.

Payment made to a third person shall also be valid insofar as it has

redounded to the benefit of the creditor. Such benefit to the creditor need
not be proved in the following cases:

(1) If after the payment, the third person acquires the creditor's
rights;

(2) If the creditor ratifies the payment to the third person;

(3) If by the creditor's conduct, the debtor has been led to believe that
the third person had authority to receive the payment. (1163a)

Art. 1242. Payment made in good faith to any person in possession of

the credit shall release the debtor. (1164)

Art. 1243. Payment made to the creditor by the debtor after the latter has
been judicially ordered to retain the debt shall not be valid. (1165)
Art. 1244. The debtor of a thing cannot compel the creditor to receive a
different one, although the latter may be of the same value as, or more
valuable than that which is due.

In obligations to do or not to do, an act or forbearance cannot be

substituted by another act or forbearance against the obligee's will. (1166a)

Art. 1245. Dation in payment, whereby property is alienated to the creditor

in satisfaction of a debt in money, shall be governed by the law of sales. (n)

Art. 1246. When the obligation consists in the delivery of an indeterminate

or generic thing, whose quality and circumstances have not been stated, the
creditor cannot demand a thing of superior quality. Neither can the debtor
deliver a thing of inferior quality. The purpose of the obligation and other
circumstances shall be taken into consideration. (1167a)

Art. 1247. Unless it is otherwise stipulated, the extrajudicial expenses

required by the payment shall be for the account of the debtor. With regard
to judicial costs, the Rules of Court shall govern. (1168a)

Art. 1248. Unless there is an express stipulation to that effect, the creditor
cannot be compelled partially to receive the prestations in which the
obligation consists. Neither may the debtor be required to make partial
payments.

However, when the debt is in part liquidated and in part unliquidated, the
creditor may demand and the debtor may effect the payment of the former
without waiting for the liquidation of the latter. (1169a)

Art. 1249. The payment of debts in money shall be made in the currency
stipulated, and if it is not possible to deliver such currency, then in the
currency which is legal tender in the Philippines.

The delivery of promissory notes payable to order, or bills of exchange or

other mercantile documents shall produce the effect of payment only when
they have been cashed, or when through the fault of the creditor they have
been impaired.

In the meantime, the action derived from the original obligation shall be
held in the abeyance. (1170)

Art. 1250. In case an extraordinary inflation or deflation of the currency

stipulated should supervene, the value of the currency at the time of the
establishment of the obligation shall be the basis of payment, unless there is
an agreement to the contrary. (n)

Art. 1251. Payment shall be made in the place designated in the obligation.
There being no express stipulation and if the undertaking is to deliver a
determinate thing, the payment shall be made wherever the thing might be
at the moment the obligation was constituted.

In any other case the place of payment shall be the domicile of the debtor.

If the debtor changes his domicile in bad faith or after he has incurred in
delay, the additional expenses shall be borne by him.

These provisions are without prejudice to venue under the Rules of Court.
(1171a)

SUBSECTION 1. - Application of Payments

Art. 1252. He who has various debts of the same kind in favor of one and the
same creditor, may declare at the time of making the payment, to which of
them the same must be applied. Unless the parties so stipulate, or when the
application of payment is made by the party for whose benefit the term has
been constituted, application shall not be made as to debts which are not yet
due.

If the debtor accepts from the creditor a receipt in which an application of

the payment is made, the former cannot complain of the same, unless there
is a cause for invalidating the contract. (1172a)

Art. 1253. If the debt produces interest, payment of the principal shall not
be deemed to have been made until the interests have been covered. (1173)

Art. 1254. When the payment cannot be applied in accordance with the
preceding rules, or if application can not be inferred from other
circumstances, the debt which is most onerous to the debtor, among those
due, shall be deemed to have been satisfied.

If the debts due are of the same nature and burden, the payment shall be
applied to all of them proportionately. (1174a)

SUBSECTION 2. - Payment by Cession

Art. 1255. The debtor may cede or assign his property to his creditors in
payment of his debts. This cession, unless there is stipulation to the
contrary, shall only release the debtor from responsibility for the net
proceeds of the thing assigned. The agreements which, on the effect of the
cession, are made between the debtor and his creditors shall be governed
by special laws. (1175a)
 SUBSECTION 3. - Tender of Payment and Consignation

Art. 1256. If the creditor to whom tender of payment has been made refuses
without just cause to accept it, the debtor shall be released from
responsibility by the consignation of the thing or sum due.

Consignation alone shall produce the same effect in the following cases:

(1) When the creditor is absent or unknown, or does not appear at the
place of payment;

(2) When he is incapacitated to receive the payment at the time it is

due;

(3) When, without just cause, he refuses to give a receipt;

(4) When two or more persons claim the same right to collect;

(5) When the title of the obligation has been lost. (1176a)

Art. 1257. In order that the consignation of the thing due may release the
obligor, it must first be announced to the persons interested in the
fulfillment of the obligation.

The consignation shall be ineffectual if it is not made strictly in consonance

with the provisions which regulate payment. (1177)

Art. 1258. Consignation shall be made by depositing the things due at the
disposal of judicial authority, before whom the tender of payment shall be
proved, in a proper case, and the announcement of the consignation in
other cases.

The consignation having been made, the interested parties shall also be
notified thereof. (1178)

Art. 1259. The expenses of consignation, when properly made, shall be

charged against the creditor. (1178)

Art. 1260. Once the consignation has been duly made, the debtor may ask
the judge to order the cancellation of the obligation.

Before the creditor has accepted the consignation, or before a judicial

declaration that the consignation has been properly made, the debtor may
withdraw the thing or the sum deposited, allowing the obligation to remain
in force. (1180)
Art. 1261. If, the consignation having been made, the creditor should
authorize the debtor to withdraw the same, he shall lose every preference
which he may have over the thing. The co-debtors, guarantors and sureties
shall be released. (1181a)

SECTION 2. - Loss of the Thing Due

Art. 1262. An obligation which consists in the delivery of a determinate

thing shall be extinguished if it should be lost or destroyed without the fault
of the debtor, and before he has incurred in delay.

When by law or stipulation, the obligor is liable even for fortuitous events,
the loss of the thing does not extinguish the obligation, and he shall be
responsible for damages. The same rule applies when the nature of the
obligation requires the assumption of risk. (1182a)

Art. 1263. In an obligation to deliver a generic thing, the loss or destruction

of anything of the same kind does not extinguish the obligation. (n)

Art. 1264. The courts shall determine whether, under the circumstances,
the partial loss of the object of the obligation is so important as to
extinguish the obligation. (n)

Art. 1265. 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 the provisions of article 1165. This
presumption does not apply in case of earthquake, flood, storm, or other
natural calamity. (1183a)

Art. 1266. The debtor in obligations to do shall also be released when the
prestation becomes legally or physically impossible without the fault of the
obligor. (1184a)

Art. 1267. When the service has become so difficult as to be manifestly

beyond the contemplation of the parties, the obligor may also be released
therefrom, in whole or in part. (n)

Art. 1268. When the debt of a thing certain and determinate proceeds from
a criminal offense, the debtor shall not be exempted from the payment of its
price, whatever may be the cause for the loss, unless the thing having been
offered by him to the person who should receive it, the latter refused
without justification to accept it. (1185)

Art. 1269. The obligation having been extinguished by the loss of the thing,
the creditor shall have all the rights of action which the debtor may have
against third persons by reason of the loss. (1186)

SECTION 3. - Condonation or Remission of the Debt

Art. 1270. Condonation or remission is essentially gratuitous, and requires

the acceptance by the obligor. It may be made expressly or impliedly.

One and the other kind shall be subject to the rules which govern
inofficious donations. Express condonation shall, furthermore, comply
with the forms of donation. (1187)

Art. 1271. The delivery of a private document evidencing a credit, made

voluntarily by the creditor to the debtor, implies the renunciation of the
action which the former had against the latter.

If in order to nullify this waiver it should be claimed to be inofficious, the

debtor and his heirs may uphold it by proving that the delivery of the
document was made in virtue of payment of the debt. (1188)

Art. 1272. Whenever the private document in which the debt appears is
found in the possession of the debtor, it shall be presumed that the creditor
delivered it voluntarily, unless the contrary is proved. (1189)

Art. 1273. The renunciation of the principal debt shall extinguish the
accessory obligations; but the waiver of the latter shall leave the former in
force. (1190)

Art. 1274. It is presumed that the accessory obligation of pledge has been
remitted when the thing pledged, after its delivery to the creditor, is found
in the possession of the debtor, or of a third person who owns the thing.
(1191a)

SECTION 4. - Confusion or Merger of Rights

Art. 1275. The obligation is extinguished from the time the characters of
creditor and debtor are merged in the same person. (1192a)

Art. 1276. Merger which takes place in the person of the principal debtor or
creditor benefits the guarantors. Confusion which takes place in the person
of any of the latter does not extinguish the obligation. (1193)

Art. 1277. Confusion does not extinguish a joint obligation except as regards
the share corresponding to the creditor or debtor in whom the two
characters concur. (1194)
 SECTION 5. - Compensation

Art. 1278. Compensation shall take place when two persons, in their own
right, are creditors and debtors of each other. (1195)

Art. 1279. In order that compensation may be proper, it is necessary:

(1) That each one of the obligors be bound principally, and that he be
at the same time a principal creditor of the other;

(2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if
the latter has been stated;

(3) That the two debts be due;

(4) That they be liquidated and demandable;

(5) That over neither of them there be any retention or controversy,

commenced by third persons and communicated in due time to the
debtor. (1196)

Art. 1280. Notwithstanding the provisions of the preceding article, the

guarantor may set up compensation as regards what the creditor may owe
the principal debtor. (1197)

Art. 1281. Compensation may be total or partial. When the two debts are of
the same amount, there is a total compensation. (n)

Art. 1282. The parties may agree upon the compensation of debts which are
not yet due. (n)

Art. 1283. If one of the parties to a suit over an obligation has a claim for
damages against the other, the former may set it off by proving his right to
said damages and the amount thereof. (n)

Art. 1284. When one or both debts are rescissible or voidable, they may be
compensated against each other before they are judicially rescinded or
avoided. (n)

Art. 1285. The debtor who has consented to the assignment of rights made
by a creditor in favor of a third person, cannot set up against the assignee
the compensation which would pertain to him against the assignor, unless
the assignor was notified by the debtor at the time he gave his consent, that
he reserved his right to the compensation.
If the creditor communicated the cession to him but the debtor did not
consent thereto, the latter may set up the compensation of debts previous to
the cession, but not of subsequent ones.

If the assignment is made without the knowledge of the debtor, he may set
up the compensation of all credits prior to the same and also later ones
until he had knowledge of the assignment. (1198a)

Art. 1286. Compensation takes place by operation of law, even though the
debts may be payable at different places, but there shall be an indemnity for
expenses of exchange or transportation to the place of payment. (1199a)

Art. 1287. Compensation shall not be proper when one of the debts arises
from a depositum or from the obligations of a depositary or of a bailee in
commodatum.

Neither can compensation be set up against a creditor who has a claim for
support due by gratuitous title, without prejudice to the provisions of
paragraph 2 of Article 301. (1200a)

Art. 1288. Neither shall there be compensation if one of the debts consists
in civil liability arising from a penal offense. (n)

Art. 1289. If a person should have against him several debts which are
susceptible of compensation, the rules on the application of payments shall
apply to the order of the compensation. (1201)

Art. 1290. When all the requisites mentioned in Article 1279 are present,
compensation takes effect by operation of law, and extinguishes both debts
to the concurrent amount, even though the creditors and debtors are not
aware of the compensation. (1202a)

SECTION 6. - Novation

Art. 1291. Obligations may be modified by:

(1) Changing their object or principal conditions;

(2) Substituting the person of the debtor;

(3) Subrogating a third person in the rights of the creditor. (1203)

Art. 1292. In order that an obligation may be extinguished by another which

substitute the same, it is imperative that it be so declared in unequivocal
terms, or that the old and the new obligations be on every point
incompatible with each other. (1204)
Art. 1293. 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 the latter, but not without the consent of the creditor. Payment by
the new debtor gives him the rights mentioned in Articles 1236 and 1237.
(1205a)

Art. 1294. If the substitution is without the knowledge or against the will of
the debtor, the new debtor's insolvency or non-fulfillment of the obligations
shall not give rise to any liability on the part of the original debtor. (n)

Art. 1295. The insolvency of the new debtor, who has been proposed by the
original debtor and accepted by the creditor, shall not revive the action of
the latter against the original obligor, except when said insolvency was
already existing and of public knowledge, or known to the debtor, when the
delegated his debt. (1206a)

Art. 1296. When the principal obligation is extinguished in consequence of a

novation, accessory obligations may subsist only insofar as they may benefit
third persons who did not give their consent. (1207)

Art. 1297. If the new obligation is void, the original one shall subsist, unless
the parties intended that the former relation should be extinguished in any
event. (n)

Art. 1298. The novation is void if the original obligation was void, except
when annulment may be claimed only by the debtor or when ratification
validates acts which are voidable. (1208a)

Art. 1299. If the original obligation was subject to a suspensive or

resolutory condition, the new obligation shall be under the same condition,
unless it is otherwise stipulated. (n)

Art. 1300. Subrogation of a third person in the rights of the creditor is

either legal or conventional. The former is not presumed, except in cases
expressly mentioned in this Code; the latter must be clearly established in
order that it may take effect. (1209a)

Art. 1301. Conventional subrogation of a third person requires the consent

of the original parties and of the third person. (n)

Art. 1302. It is presumed that there is legal subrogation:

(1) When a creditor pays another creditor who is preferred, even

without the debtor's knowledge;

(2) When a third person, not interested in the obligation, pays with
the express or tacit approval of the debtor;
 (3) When, even without the knowledge of the debtor, a person
interested in the fulfillment of the obligation pays, without prejudice
to the effects of confusion as to the latter's share. (1210a)

Art. 1303. Subrogation transfers to the persons subrogated the credit with
all the rights thereto appertaining, either against the debtor or against third
person, be they guarantors or possessors of mortgages, subject to
stipulation in a conventional subrogation. (1212a)

Art. 1304. A creditor, to whom partial payment has been made, may
exercise his right for the remainder, and he shall be preferred to the person
who has been subrogated in his place in virtue of the partial payment of the
same credit. (1213)

Title II. - CONTRACTS

CHAPTER 1
GENERAL PROVISIONS

Art. 1305. A contract is a meeting of minds between two persons whereby

one binds himself, with respect to the other, to give something or to render
some service. (1254a)

Art. 1306. The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy.
(1255a)

Art. 1307. Innominate contracts shall be regulated by the stipulations of the

parties, by the provisions of Titles I and II of this Book, by the rules
governing the most analogous nominate contracts, and by the customs of
the place. (n)

Art. 1308. The contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them. (1256a)

Art. 1309. The determination of the performance may be left to a third

person, whose decision shall not be binding until it has been made known
to both contracting parties. (n)

Art. 1310. The determination shall not be obligatory if it is evidently

inequitable. In such case, the courts shall decide what is equitable under
the circumstances. (n)

Art. 1311. Contracts take effect only between the parties, their assigns and
heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by
provision of law. The heir is not liable beyond the value of the property he
received from the decedent.

If a contract should contain some stipulation in favor of a third person, he

may demand its fulfillment provided he communicated his acceptance to
the obligor before its revocation. A mere incidental benefit or interest of a
person is not sufficient. The contracting parties must have clearly and
deliberately conferred a favor upon a third person. (1257a)

Art. 1312. In contracts creating real rights, third persons who come into
possession of the object of the contract are bound thereby, subject to the
provisions of the Mortgage Law and the Land Registration Laws. (n)

Art. 1313. Creditors are protected in cases of contracts intended to defraud

them. (n)

Art. 1314. Any third person who induces another to violate his contract shall
be liable for damages to the other contracting party. (n)

Art. 1315. Contracts are perfected by mere consent, and from that moment
the parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature,
may be in keeping with good faith, usage and law. (1258)

Art. 1316. Real contracts, such as deposit, pledge and Commodatum, are not
perfected until the delivery of the object of the obligation. (n)

Art. 1317. No one may contract in the name of another without being
authorized by the latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority
or legal representation, or who has acted beyond his powers, shall be
unenforceable, unless it is ratified, expressly or impliedly, by the person on
whose behalf it has been executed, before it is revoked by the other
contracting party. (1259a)

CHAPTER 2
ESSENTIAL REQUISITES OF CONTRACTS

GENERAL PROVISIONS

Art. 1318. There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;

 (3) Cause of the obligation which is established. (1261)

SECTION 1. - Consent

Art. 1319. Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer.

Acceptance made by letter or telegram does not bind the offerer except
from the time it came to his knowledge. The contract, in such a case, is
presumed to have been entered into in the place where the offer was made.
(1262a)

Art. 1320. An acceptance may be express or implied. (n)

Art. 1321. The person making the offer may fix the time, place, and manner
of acceptance, all of which must be complied with. (n)

Art. 1322. An offer made through an agent is accepted from the time
acceptance is communicated to him. (n)

Art. 1323. An offer becomes ineffective upon the death, civil interdiction,
insanity, or insolvency of either party before acceptance is conveyed. (n)

Art. 1324. When the offerer has allowed the offeree a certain period to
accept, the offer may be withdrawn at any time before acceptance by
communicating such withdrawal, except when the option is founded upon a
consideration, as something paid or promised. (n)

Art. 1325. Unless it appears otherwise, business advertisements of things

for sale are not definite offers, but mere invitations to make an offer. (n)

Art. 1326. Advertisements for bidders are simply invitations to make

proposals, and the advertiser is not bound to accept the highest or lowest
bidder, unless the contrary appears. (n)

Art. 1327. The following cannot give consent to a contract:

(1) Unemancipated minors;

(2) Insane or demented persons, and deaf-mutes who do not know

how to write. (1263a)

Art. 1328. Contracts entered into during a lucid interval are valid. Contracts
agreed to in a state of drunkenness or during a hypnotic spell are voidable.
(n)
Art. 1329. The incapacity declared in Article 1327 is subject to the
modifications determined by law, and is understood to be without prejudice
to special disqualifications established in the laws. (1264)

Art. 1330. A contract where consent is given through mistake, violence,

intimidation, undue influence, or fraud is voidable. (1265a)

Art. 1331. In order that mistake may invalidate consent, it should refer to
the substance of the thing which is the object of the contract, or to those
conditions which have principally moved one or both parties to enter into
the contract.

Mistake as to the identity or qualifications of one of the parties will vitiate

consent only when such identity or qualifications have been the principal
cause of the contract.

A simple mistake of account shall give rise to its correction. (1266a)

Art. 1332. When one of the parties is unable to read, or if the contract is in a
language not understood by him, and mistake or fraud is alleged, the
person enforcing the contract must show that the terms thereof have been
fully explained to the former. (n)

Art. 1333. There is no mistake if the party alleging it knew the doubt,
contingency or risk affecting the object of the contract. (n)

Art. 1334. Mutual error as to the legal effect of an agreement when the real
purpose of the parties is frustrated, may vitiate consent. (n)

Art. 1335. There is violence when in order to wrest consent, serious or

irresistible force is employed.

There is intimidation when one of the contracting parties is compelled by a

reasonable and well-grounded fear of an imminent and grave evil upon his
person or property, or upon the person or property of his spouse,
descendants or ascendants, to give his consent.

To determine the degree of intimidation, the age, sex and condition of the
person shall be borne in mind.

A threat to enforce one's claim through competent authority, if the claim is

just or legal, does not vitiate consent. (1267a)

Art. 1336. Violence or intimidation shall annul the obligation, although it

may have been employed by a third person who did not take part in the
contract. (1268)
Art. 1337. There is undue influence when a person takes improper
advantage of his power over the will of another, depriving the latter of a
reasonable freedom of choice. The following circumstances shall be
considered: the confidential, family, spiritual and other relations between
the parties, or the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or was ignorant or in
financial distress. (n)

Art. 1338. There is fraud when, through insidious words or machinations of

one of the contracting parties, the other is induced to enter into a contract
which, without them, he would not have agreed to. (1269)

Art. 1339. Failure to disclose facts, when there is a duty to reveal them, as
when the parties are bound by confidential relations, constitutes fraud. (n)

Art. 1340. The usual exaggerations in trade, when the other party had an
opportunity to know the facts, are not in themselves fraudulent. (n)

Art. 1341. A mere expression of an opinion does not signify fraud, unless
made by an expert and the other party has relied on the former's special
knowledge. (n)

Art. 1342. Misrepresentation by a third person does not vitiate consent,

unless such misrepresentation has created substantial mistake and the
same is mutual. (n)

Art. 1343. Misrepresentation made in good faith is not fraudulent but may
constitute error. (n)

Art. 1344. In order that fraud may make a contract voidable, it should be
serious and should not have been employed by both contracting parties.

Incidental fraud only obliges the person employing it to pay damages.

(1270)

Art. 1345. Simulation of a contract may be absolute or relative. The former

takes place when the parties do not intend to be bound at all; the latter,
when the parties conceal their true agreement. (n)

Art. 1346. An absolutely simulated or fictitious contract is void. A relative

simulation, when it does not prejudice a third person and is not intended
for any purpose contrary to law, morals, good customs, public order or
public policy binds the parties to their real agreement. (n)

SECTION 2. - Object of Contracts

Art. 1347. All things which are not outside the commerce of men, including
future things, may be the object of a contract. All rights which are not
intransmissible may also be the object of contracts.

No contract may be entered into upon future inheritance except in cases

expressly authorized by law.

All services which are not contrary to law, morals, good customs, public
order or public policy may likewise be the object of a contract. (1271a)

Art. 1348. Impossible things or services cannot be the object of contracts.

(1272)

Art. 1349. The 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 contract, provided it is possible to determine the same,
without the need of a new contract between the parties. (1273)

SECTION 3. - Cause of Contracts

Art. 1350. In onerous contracts the cause is understood to be, for each
contracting party, the prestation or promise of a thing or service by the
other; in remuneratory ones, the service or benefit which is remunerated;
and in contracts of pure beneficence, the mere liberality of the benefactor.
(1274)

Art. 1351. The particular motives of the parties in entering into a contract
are different from the cause thereof. (n)

Art. 1352. Contracts without cause, or with unlawful cause, produce no

effect whatever. The cause is unlawful if it is contrary to law, morals, good
customs, public order or public policy. (1275a)

Art. 1353. The statement of a false cause in contracts shall render them
void, if it should not be proved that they were founded upon another cause
which is true and lawful. (1276)

Art. 1354. Although the cause is not stated in the contract, it is presumed
that it exists and is lawful, unless the debtor proves the contrary. (1277)

Art. 1355. Except in cases specified by law, lesion or inadequacy of cause

shall not invalidate a contract, unless there has been fraud, mistake or
undue influence. (n)
 CHAPTER 3
FORM OF CONTRACTS

Art. 1356. Contracts shall be obligatory, in whatever form they may have
been entered into, provided all the essential requisites for their validity are
present. However, when the law requires that a contract be in some form in
order that it may be valid or enforceable, or that a contract be proved in a
certain way, that requirement is absolute and indispensable. In such cases,
the right of the parties stated in the following article cannot be exercised.
(1278a)

Art. 1357. If the law requires a document or other special form, as in the
acts and contracts enumerated in the following article, the contracting
parties may 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. (1279a)

Art. 1358. The following must appear in a public document:

(1) Acts and contracts which have for their object the creation,
transmission, modification or extinguishment of real rights over
immovable property; sales of real property or of an interest therein a
governed by Articles 1403, No. 2, and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or of

those of the conjugal partnership of gains;

(3) The power to administer property, or any other power which has
for its object an act appearing or which should appear in a public
document, or should prejudice a third person;

(4) The cession of actions or rights proceeding from an act appearing

in a public document.

All other contracts where the amount involved exceeds five hundred pesos
must appear in writing, even a private one. But sales of goods, chattels or
things in action are governed by Articles, 1403, No. 2 and 1405. (1280a)

CHAPTER 4
REFORMATION OF INSTRUMENTS (n)

Art. 1359. When, there having been a meeting of the minds of the parties to
a contract, their true intention is not expressed in the instrument
purporting to embody the agreement, by reason of mistake, fraud,
inequitable conduct or accident, one of the parties may ask for the
reformation of the instrument to the end that such true intention may be
expressed.
If mistake, fraud, inequitable conduct, or accident has prevented a meeting
of the minds of the parties, the proper remedy is not reformation of the
instrument but annulment of the contract.

Art. 1360. The principles of the general law on the reformation of

instruments are hereby adopted insofar as they are not in conflict with the
provisions of this Code.

Art. 1361. When a mutual mistake of the parties causes the failure of the
instrument to disclose their real agreement, said instrument may be
reformed.

Art. 1362. If one party was mistaken and the other acted fraudulently or
inequitably in such a way that the instrument does not show their true
intention, the former may ask for the reformation of the instrument.

Art. 1363. When one party was mistaken and the other knew or believed
that the instrument did not state their real agreement, but concealed that
fact from the former, the instrument may be reformed.

Art. 1364. 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,
the instrument does not express the true intention of the parties, the courts
may order that the instrument be reformed.

Art. 1365. If two 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 of repurchase, reformation of the instrument is
proper.

Art. 1366. There shall be no reformation in the following cases:

(1) Simple donations inter vivos wherein no condition is imposed;

(2) Wills;

(3) When the real agreement is void.

Art. 1367. When one of the parties has brought an action to enforce the
instrument, he cannot subsequently ask for its reformation.

Art. 1368. Reformation may be ordered at the instance of either party or his
successors in interest, if the mistake was mutual; otherwise, upon petition
of the injured party, or his heirs and assigns.
Art. 1369. The procedure for the reformation of instrument shall be
governed by rules of court to be promulgated by the Supreme Court.

CHAPTER 5
INTERPRETATION OF CONTRACTS

Art. 1370. If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulations
shall control.

If the words appear to be contrary to the evident intention of the parties,

the latter shall prevail over the former. (1281)

Art. 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.
(1282)

Art. 1372. However general the terms of a contract may be, they shall not be
understood to comprehend things that are distinct and cases that are
different from those upon which the parties intended to agree. (1283)

Art. 1373. If some stipulation of any contract should admit of several

meanings, it shall be understood as bearing that import which is most
adequate to render it effectual. (1284)

Art. 1374. The various stipulations of a contract shall be interpreted

together, attributing to the doubtful ones that sense which may result from
all of them taken jointly. (1285)

Art. 1375. Words which may have different significations shall be

understood in that which is most in keeping with the nature and object of
the contract. (1286)

Art. 1376. The usage or custom of the place shall be borne in mind in the
interpretation of the ambiguities of a contract, and shall fill the omission of
stipulations which are ordinarily established. (1287)

Art. 1377. The interpretation of obscure words or stipulations in a contract

shall not favor the party who caused the obscurity. (1288)

Art. 1378. When it is absolutely impossible to settle doubts by the rules

established in the preceding articles, and the doubts refer to incidental
circumstances of a gratuitous contract, the least transmission of rights and
interests shall prevail. If the contract is onerous, the doubt shall be settled
in favor of the greatest reciprocity of interests.
If the doubts are cast upon the principal object of the contract in such a way
that it cannot be known what may have been the intention or will of the
parties, the contract shall be null and void. (1289)

Art. 1379. The principles of interpretation stated in Rule 123 of the Rules of
Court shall likewise be observed in the construction of contracts. (n)

CHAPTER 6
RESCISSIBLE CONTRACTS

Art. 1380. Contracts validly agreed upon may be rescinded in the cases
established by law. (1290)

Art. 1381. The following contracts are rescissible:

(1) Those which are entered into by guardians whenever the wards
whom they represent suffer lesion by more than one-fourth of the
value of the things which are the object thereof;

(2) Those agreed upon in representation of absentees, if the latter

suffer the lesion stated in the preceding number;

(3) Those undertaken in fraud of creditors when the latter cannot in

any other manner collect the claims due them;

(4) Those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and approval of
the litigants or of competent judicial authority;

(5) All other contracts specially declared by law to be subject to

rescission. (1291a)

Art. 1382. Payments made in a state of insolvency for obligations to whose

fulfillment the debtor could not be compelled at the time they were effected,
are also rescissible. (1292)

Art. 1383. The action for rescission is subsidiary; it cannot be instituted

except when the party suffering damage has no other legal means to obtain
reparation for the same. (1294)

Art. 1384. Rescission shall be only to the extent necessary to cover the
damages caused. (n)

Art. 1385. Rescission creates the obligation to return the things which were
the object of the contract, together with their fruits, and the price with its
interest; consequently, it can be carried out only when he who demands
rescission can return whatever he may be obliged to restore.

Neither shall rescission take place when the things which are the object of
the contract are legally in the possession of third persons who did not act in
bad faith.

In this case, indemnity for damages may be demanded from the person
causing the loss. (1295)

Art. 1386. Rescission referred to in Nos. 1 and 2 of Article 1381 shall not
take place with respect to contracts approved by the courts. (1296a)

Art. 1387. All contracts by virtue of which the debtor alienates property by
gratuitous title are presumed to have been entered into in fraud of
creditors, when the donor did not reserve sufficient property to pay all
debts contracted before the donation.

Alienations by onerous title are also presumed fraudulent when made by

persons against whom some judgment has been issued. The decision or
attachment need not refer to the property alienated, and need not have
been obtained by the party seeking the rescission.

In addition to these presumptions, the design to defraud creditors may be

proved in any other manner recognized by the law of evidence. (1297a)

Art. 1388. Whoever acquires in bad faith the things alienated in fraud of
creditors, shall indemnify the latter for damages suffered by them on
account of the alienation, whenever, due to any cause, it should be
impossible for him to return them.

If there are two or more alienations, the first acquirer shall be liable first,
and so on successively. (1298a)

Art. 1389. The action to claim rescission must be commenced within four
years.

For persons under guardianship and for absentees, the period of four years
shall not begin until the termination of the former's incapacity, or until the
domicile of the latter is known. (1299)

CHAPTER 7
VOIDABLE CONTRACTS

Art. 1390. The following contracts are voidable or annullable, even though
there may have been no damage to the contracting parties:
 (1) Those where one of the parties is incapable of giving consent to a
contract;

(2) Those where the consent is vitiated by mistake, violence,

intimidation, undue influence or fraud.

These contracts are binding, unless they are annulled by a proper action in
court. They are susceptible of ratification. (n)

Art. 1391. The action for annulment shall be brought within four years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time

the defect of the consent ceases.

In case of mistake or fraud, from the time of the discovery of the

same.

And when the action refers to contracts entered into by minors or other
incapacitated persons, from the time the guardianship ceases. (1301a)

Art. 1392. Ratification extinguishes the action to annul a voidable contract.

(1309a)

Art. 1393. Ratification may be effected expressly or tacitly. It is understood

that there is a tacit ratification if, with knowledge of the reason which
renders the contract voidable and such reason having ceased, the person
who has a right to invoke it should execute an act which necessarily implies
an intention to waive his right. (1311a)

Art. 1394. Ratification may be effected by the guardian of the incapacitated

person. (n)

Art. 1395. Ratification does not require the conformity of the contracting
party who has no right to bring the action for annulment. (1312)

Art. 1396. Ratification cleanses the contract from all its defects from the
moment it was constituted. (1313)

Art. 1397. The action for the annulment of contracts may be instituted by all
who are thereby obliged principally or subsidiarily. However, persons who
are capable cannot allege the incapacity of those with whom they
contracted; nor can those who exerted intimidation, violence, or undue
influence, or employed fraud, or caused mistake base their action upon
these flaws of the contract. (1302a)
Art. 1398. An obligation having been annulled, the contracting parties shall
restore to each other the things which have been the subject matter of the
contract, with their fruits, and the price with its interest, except in cases
provided by law.

In obligations to render service, the value thereof shall be the basis for
damages. (1303a)

Art. 1399. When the defect of the contract consists in the incapacity of one
of the parties, the incapacitated person is not obliged to make any
restitution except insofar as he has been benefited by the thing or price
received by him. (1304)

Art. 1400. Whenever the person obliged by the decree of annulment to

return the thing can not do so because it has been lost through his fault, he
shall return the fruits received and the value of the thing at the time of the
loss, with interest from the same date. (1307a)

Art. 1401. The action for annulment of contracts shall be extinguished when
the thing which is the object thereof is lost through the fraud or fault of the
person who has a right to institute the proceedings.

If the right of action is based upon the incapacity of any one of the
contracting parties, the loss of the thing shall not be an obstacle to the
success of the action, unless said loss took place through the fraud or fault
of the plaintiff. (1314a)

Art. 1402. As long as one of the contracting parties does not restore what in
virtue of the decree of annulment he is bound to return, the other cannot be
compelled to comply with what is incumbent upon him. (1308)

CHAPTER 8
UNENFORCEABLE CONTRACTS (n)

Art. 1403. The following contracts are unenforceable, unless they are
ratified:
(1) Those entered into in the name of another person by one who has
been given no authority or legal representation, or who has acted
beyond his powers;

(2) Those that do not comply with the Statute of Frauds as set forth in
this number. In the following cases an agreement hereafter made
shall be unenforceable by action, unless the same, or some note or
memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot
 be received without the writing, or a secondary evidence of its
contents:

(a) An agreement that by its terms is not to be performed within

a year from the making thereof;

(b) A special promise to answer for the debt, default, or

miscarriage of another;

(c) An agreement made in consideration of marriage, other than

a mutual promise to marry;

(d) An agreement for the sale of goods, chattels or things in

action, at a price not less than five hundred pesos, unless the
buyer accept and receive part of such goods and chattels, or the
evidences, or some of them, of such things in action or pay at
the time some part of the purchase money; but when a sale is
made by auction and entry is made by the auctioneer in his sales
book, at the time of the sale, of the amount and kind of property
sold, terms of sale, price, names of the purchasers and person
on whose account the sale is made, it is a sufficient
memorandum;

(e) An agreement of the leasing for a longer period than one

year, or for the sale of real property or of an interest therein;

(f) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving consent to a

contract.
Art. 1404. Unauthorized contracts are governed by Article 1317 and the
principles of agency in Title X of this Book.

Art. 1405. Contracts infringing the Statute of Frauds, referred to in No. 2 of

Article 1403, are ratified by the failure to object to the presentation of oral
evidence to prove the same, or by the acceptance of benefit under them.

Art. 1406. When a contract is enforceable under the Statute of Frauds, and
a public document is necessary for its registration in the Registry of Deeds,
the parties may avail themselves of the right under Article 1357.

Art. 1407. In a contract where both parties are incapable of giving consent,
express or implied ratification by the parent, or guardian, as the case may
be, of one of the contracting parties shall give the contract the same effect
as if only one of them were incapacitated.
If ratification is made by the parents or guardians, as the case may be, of
both contracting parties, the contract shall be validated from the inception.

Art. 1408. Unenforceable contracts cannot be assailed by third persons.

CHAPTER 9
VOID AND INEXISTENT CONTRACTS

Art. 1409. The following contracts are inexistent and void from the
beginning:
(1) Those whose cause, object or purpose is contrary to law, morals,
good customs, public order or public policy;

(2) Those which are absolutely simulated or fictitious;

(3) Those whose cause or object did not exist at the time of the
transaction;

(4) Those whose object is outside the commerce of men;

(5) Those which contemplate an impossible service;

(6) Those where the intention of the parties relative to the principal
object of the contract cannot be ascertained;

(7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set up the
defense of illegality be waived.

Art. 1410. The action or defense for the declaration of the inexistence of a
contract does not prescribe.

Art. 1411. When the nullity proceeds from the illegality of the cause or
object of the contract, and the act constitutes a criminal offense, both
parties being in pari delicto, they shall have no action against each other,
and both shall be prosecuted. Moreover, the provisions of the Penal Code
relative to the disposal of effects or instruments of a crime shall be
applicable to the things or the price of the contract.

This rule shall be applicable when only one of the parties is guilty; but the
innocent one may claim what he has given, and shall not be bound to
comply with his promise. (1305)

Art. 1412. If the act in which the unlawful or forbidden cause consists does
not constitute a criminal offense, the following rules shall be observed:
 (1) When the fault is on the part of both contracting parties, neither
may recover what he has given by virtue of the contract, or demand
the performance of the other's undertaking;

(2) When only one of the contracting parties is at fault, he cannot

recover what he has given by reason of the contract, or ask for the
fulfillment of what has been promised him. The other, who is not at
fault, may demand the return of what he has given without any
obligation to comply his promise. (1306)

Art. 1413. Interest paid in excess of the interest allowed by the usury laws
may be recovered by the debtor, with interest thereon from the date of the
payment.

Art. 1414. When money is paid or property delivered for an illegal purpose,
the contract may be repudiated by one of the parties before the purpose has
been accomplished, or before any damage has been caused to a third
person. In such case, the courts may, if the public interest will thus be
subserved, allow the party repudiating the contract to recover the money or
property.

Art. 1415. Where one of the parties to an illegal contract is incapable of

giving consent, the courts may, if the interest of justice so demands allow
recovery of money or property delivered by the incapacitated person.

Art. 1416. When the agreement is not illegal per se but is merely prohibited,
and the prohibition by the law is designated for the protection of the
plaintiff, he may, if public policy is thereby enhanced, recover what he has
paid or delivered.

Art. 1417. When the price of any article or commodity is determined by

statute, or by authority of law, any person paying any amount in excess of
the maximum price allowed may recover such excess.

Art. 1418. When the law fixes, or authorizes the fixing of the maximum
number of hours of labor, and a contract is entered into whereby a laborer
undertakes to work longer than the maximum thus fixed, he may demand
additional compensation for service rendered beyond the time limit.

Art. 1419. When the law sets, or authorizes the setting of a minimum wage
for laborers, and a contract is agreed upon by which a laborer accepts a
lower wage, he shall be entitled to recover the deficiency.

Art. 1420. In case of a divisible contract, if the illegal terms can be separated
from the legal ones, the latter may be enforced.
Art. 1421. The defense of illegality of contract is not available to third
persons whose interests are not directly affected.

Art. 1422. A contract which is the direct result of a previous illegal contract,
is also void and inexistent.

Title III. - NATURAL OBLIGATIONS

Art. 1423. Obligations are civil or natural. Civil obligations give a right of
action to compel their performance. Natural obligations, not being based on
positive law but on equity and natural law, do not grant a right of action to
enforce their performance, but after voluntary fulfillment by the obligor,
they authorize the retention of what has been delivered or rendered by
reason thereof. Some natural obligations are set forth in the following
articles.

Art. 1424. When a right to sue upon a civil obligation has lapsed by
extinctive prescription, the obligor who voluntarily performs the contract
cannot recover what he has delivered or the value of the service he has
rendered.

Art. 1425. When without the knowledge or against the will of the debtor, a
third person pays a debt which the obligor is not legally bound to pay
because the action thereon has prescribed, but the debtor later voluntarily
reimburses the third person, the obligor cannot recover what he has paid.

Art. 1426. When a minor between eighteen and twenty-one years of age who
has entered into a contract without the consent of the parent or guardian,
after the annulment of the contract voluntarily returns the whole thing or
price received, notwithstanding the fact the he has not been benefited
thereby, there is no right to demand the thing or price thus returned.

Art. 1427. When a minor between eighteen and twenty-one years of age,
who has entered into a contract without the consent of the parent or
guardian, voluntarily pays a sum of money or delivers a fungible thing in
fulfillment of the obligation, there shall be no right to recover the same
from the obligee who has spent or consumed it in good faith. (1160A)

Art. 1428. When, after an action to enforce a civil obligation has failed the
defendant voluntarily performs the obligation, he cannot demand the
return of what he has delivered or the payment of the value of the service he
has rendered.

Art. 1429. When a testate or intestate heir voluntarily pays a debt of the
decedent exceeding the value of the property which he received by will or by
the law of intestacy from the estate of the deceased, the payment is valid
and cannot be rescinded by the payer.

Art. 1430. When a will is declared void because it has not been executed in
accordance with the formalities required by law, but one of the intestate
heirs, after the settlement of the debts of the deceased, pays a legacy in
compliance with a clause in the defective will, the payment is effective and
irrevocable.

Title IV. - ESTOPPEL (n)

Art. 1431. Through estoppel an admission or representation is rendered

conclusive upon the person making it, and cannot be denied or disproved as
against the person relying thereon.

Art. 1432. The principles of estoppel are hereby adopted insofar as they are
not in conflict with the provisions of this Code, the Code of Commerce, the
Rules of Court and special laws.

Art. 1433. Estoppel may be in pais or by deed.

Art. 1434. When a person who is not the owner of a thing sells or alienates
and delivers it, and later the seller or grantor acquires title thereto, such
title passes by operation of law to the buyer or grantee.

Art. 1435. If a person in representation of another sells or alienates a thing,

the former cannot subsequently set up his own title as against the buyer or
grantee.

Art. 1436. A lessee or a bailee is estopped from asserting title to the thing
leased or received, as against the lessor or bailor.

Art. 1437. When in a contract between third persons concerning immovable

property, one of them is misled by a person with respect to the ownership
or real right over the real estate, the latter is precluded from asserting his
legal title or interest therein, provided all these requisites are present:

(1) There must be fraudulent representation or wrongful concealment

of facts known to the party estopped;

(2) The party precluded must intend that the other should act upon
the facts as misrepresented;

(3) The party misled must have been unaware of the true facts; and
 (4) The party defrauded must have acted in accordance with the
misrepresentation.

Art. 1438. One who has allowed another to assume apparent ownership of
personal property for the purpose of making any transfer of it, cannot, if he
received the sum for which a pledge has been constituted, set up his own
title to defeat the pledge of the property, made by the other to a pledgee who
received the same in good faith and for value.

Art. 1439. Estoppel is effective only as between the parties thereto or their
successors in interest.

Title V. - TRUSTS (n)

CHAPTER 1
GENERAL PROVISIONS

Art. 1440. A person who establishes a trust is called the trustor; one in
whom confidence is reposed as regards property for the benefit of another
person is known as the trustee; and the person for whose benefit the trust
has been created is referred to as the beneficiary.

Art. 1441. Trusts are either express or implied. Express trusts are created by
the intention of the trustor or of the parties. Implied trusts come into being
by operation of law.

Art. 1442. The principles of the general law of trusts, insofar as they are not
in conflict with this Code, the Code of Commerce, the Rules of Court and
special laws are hereby adopted.

CHAPTER 2
EXPRESS TRUSTS

Art. 1443. No express trusts concerning an immovable or any interest

therein may be proved by parol evidence.

Art. 1444. No particular words are required for the creation of an express
trust, it being sufficient that a trust is clearly intended.

Art. 1445. No trust shall fail because the trustee appointed declines the
designation, unless the contrary should appear in the instrument
constituting the trust.

Art. 1446. Acceptance by the beneficiary is necessary. Nevertheless, if the

trust imposes no onerous condition upon the beneficiary, his acceptance
shall be presumed, if there is no proof to the contrary.

CHAPTER 3
IMPLIED TRUSTS

Art. 1447. The enumeration of the following cases of implied trust does not
exclude others established by the general law of trust, but the limitation
laid down in Article 1442 shall be applicable.

Art. 1448. There is an implied trust when property is sold, and the legal
estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property. The former is the
trustee, while the latter is the beneficiary. However, if the person to whom
the title is conveyed is a child, legitimate or illegitimate, of the one paying
the price of the sale, no trust is implied by law, it being disputably
presumed that there is a gift in favor of the child.

Art. 1449. There is also an implied trust when a donation is made to a

person but it appears that although the legal estate is transmitted to the
donee, he nevertheless is either to have no beneficial interest or only a part
thereof.

Art. 1450. If the price of a sale of property is loaned or paid by one person
for the benefit of another and the conveyance is made to the lender or payor
to secure the payment of the debt, a trust arises by operation of law in favor
of the person to whom the money is loaned or for whom its is paid. The
latter may redeem the property and compel a conveyance thereof to him.

Art. 1451. When land passes by succession to any person and he causes the
legal title to be put in the name of another, a trust is established by
implication of law for the benefit of the true owner.

Art. 1452. If two 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, a trust is created by force of law in favor of the others in
proportion to the interest of each.

Art. 1453. 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 is an implied trust in favor of the person whose benefit is
contemplated.

Art. 1454. If an absolute conveyance of property is made in order to secure

the performance of an obligation of the grantor toward the grantee, a trust
by virtue of law is established. If the fulfillment of the obligation is offered
by the grantor when it becomes due, he may demand the reconveyance of
the property to him.

Art. 1455. When any trustee, guardian or other person holding a fiduciary
relationship uses trust funds for the purchase of property and causes the
conveyance to be made to him or to a third person, a trust is established by
operation of law in favor of the person to whom the funds belong.

Art. 1456. If property is acquired through mistake or fraud, the person

obtaining it is, by force of law, considered a trustee of an implied trust for
the benefit of the person from whom the property comes.

Art. 1457. An implied trust may be proved by oral evidence.

Title VI. - SALES

CHAPTER 1
NATURE AND FORM OF THE CONTRACT

Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.

A contract of sale may be absolute or conditional. (1445a)

Art. 1459. The thing must be licit and the vendor must have a right to
transfer the ownership thereof at the time it is delivered. (n)

Art. 1460. A thing is determinate when it is particularly designated or

physical segregated from all other of the same class.

The requisite that a thing be determinate is satisfied if at the time the

contract is entered into, the thing is capable of being made determinate
without the necessity of a new or further agreement between the parties.
(n)

Art. 1461. Things having a potential existence may be the object of the
contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed subject to

the condition that the thing will come into existence.

The sale of a vain hope or expectancy is void. (n)

Art. 1462. The goods which form the subject of a contract of sale may be
either existing goods, owned or possessed by the seller, or goods to be
manufactured, raised, or acquired by the seller after the perfection of the
contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller

depends upon a contingency which may or may not happen. (n)

Art. 1463. The sole owner of a thing may sell an undivided interest therein.
(n)

Art. 1464. In the case of fungible goods, there may be a sale of an undivided
share of a specific mass, though the seller purports to sell and the buyer to
buy a definite number, weight or measure of the goods in the mass, and
though the number, weight or measure of the goods in the mass is
undetermined. By such a sale the buyer becomes owner in common of such
a share of the mass as the number, weight or measure bought bears to the
number, weight or measure of the mass. If the mass contains less than the
number, weight or measure bought, the buyer becomes the owner of the
whole mass and the seller is bound to make good the deficiency from goods
of the same kind and quality, unless a contrary intent appears. (n)

Art. 1465. Things subject to a resolutory condition may be the object of the
contract of sale. (n)

Art. 1466. In construing a contract containing provisions characteristic of

both the contract of sale and of the contract of agency to sell, the essential
clauses of the whole instrument shall be considered. (n)

Art. 1467. A contract for the delivery at a certain price of an article which
the vendor in the ordinary course of his business manufactures or procures
for the general market, whether the same is on hand at the time or not, is a
contract of sale, but if the goods are to be manufactured specially for the
customer and upon his special order, and not for the general market, it is a
contract for a piece of work. (n)

Art. 1468. If the consideration of the contract consists partly in money, and
partly in another thing, the transaction shall be characterized by the
manifest intention of the parties. If such intention does not clearly appear,
it shall be considered a barter if the value of the thing given as a part of the
consideration exceeds the amount of the money or its equivalent;
otherwise, it is a sale. (1446a)

Art. 1469. In order that the price may be considered certain, it shall be
sufficient that it be so with reference to another thing certain, or that the
determination thereof be left to the judgment of a special person or
persons.
Should such person or persons be unable or unwilling to fix it, the contract
shall be inefficacious, unless the parties subsequently agree upon the price.

If the third person or persons acted in bad faith or by mistake, the courts
may fix the price.

Where such third person or persons are prevented from fixing the price or
terms by fault of the seller or the buyer, the party not in fault may have such
remedies against the party in fault as are allowed the seller or the buyer, as
the case may be. (1447a)

Art. 1470. Gross inadequacy of price does not affect a contract of sale,
except as it may indicate a defect in the consent, or that the parties really
intended a donation or some other act or contract. (n)

Art. 1471. If the price is simulated, the sale is void, but the act may be shown
to have been in reality a donation, or some other act or contract. (n)

Art. 1472. The price of securities, grain, liquids, and other things shall also
be considered certain, when the price fixed is that which the thing sold
would have on a definite day, or in a particular exchange or market, or
when an amount is fixed above or below the price on such day, or in such
exchange or market, provided said amount be certain. (1448)

Art. 1473. The fixing of the price can never be left to the discretion of one of
the contracting parties. However, if the price fixed by one of the parties is
accepted by the other, the sale is perfected. (1449a)

Art. 1474. Where the price cannot be determined in accordance with the
preceding articles, or in any other manner, the contract is inefficacious.
However, if the thing or any part thereof has been delivered to and
appropriated by the buyer he must pay a reasonable price therefor. What is
a reasonable price is a question of fact dependent on the circumstances of
each particular case. (n)

Art. 1475. The contract of sale is perfected at the moment there is a meeting
of minds upon the thing which is the object of the contract and upon the
price.

From that moment, the parties may reciprocally demand performance,

subject to the provisions of the law governing the form of contracts. (1450a)

Art. 1476. In the case of a sale by auction:

(1) Where goods are put up for sale by auction in lots, each lot is the
subject of a separate contract of sale.
 (2) A sale by auction is perfected when the auctioneer announces its
perfection by the fall of the hammer, or in other customary manner.
Until such announcement is made, any bidder may retract his bid;
and the auctioneer may withdraw the goods from the sale unless the
auction has been announced to be without reserve.

(3) A right to bid may be reserved expressly by or on behalf of the

seller, unless otherwise provided by law or by stipulation.

(4) Where notice has not been given that a sale by auction is subject to
a right to bid on behalf of the seller, it shall not be lawful for the seller
to bid himself or to employ or induce any person to bid at such sale on
his behalf or for the auctioneer, to employ or induce any person to bid
at such sale on behalf of the seller or knowingly to take any bid from
the seller or any person employed by him. Any sale contravening this
rule may be treated as fraudulent by the buyer. (n)

Art. 1477. The ownership of the thing sold shall be transferred to the vendee
upon the actual or constructive delivery thereof. (n)

Art. 1478. The parties may stipulate that ownership in the thing shall not
pass to the purchaser until he has fully paid the price. (n)

Art. 1479. A promise to buy and sell a determinate thing for a price certain
is reciprocally demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a

price certain is binding upon the promissor if the promise is supported by a
consideration distinct from the price. (1451a)

Art. 1480. Any injury to or benefit from the thing sold, after the contract has
been perfected, from the moment of the perfection of the contract to the
time of delivery, shall be governed by Articles 1163 to 1165, and 1262.

This rule shall apply to the sale of fungible things, made independently and
for a single price, or without consideration of their weight, number, or
measure.

Should fungible things be sold for a price fixed according to weight,

number, or measure, the risk shall not be imputed to the vendee until they
have been weighed, counted, or measured and delivered, unless the latter
has incurred in delay. (1452a)

Art. 1481. In the contract of sale of goods by description or by sample, the

contract may be rescinded if the bulk of the goods delivered do not
correspond with the description or the sample, and if the contract be by
sample as well as description, it is not sufficient that the bulk of goods
correspond with the sample if they do not also correspond with the
description.

The buyer shall have a reasonable opportunity of comparing the bulk with
the description or the sample. (n)

Art. 1482. Whenever earnest money is given in a contract of sale, it shall be

considered as part of the price and as proof of the perfection of the
contract. (1454a)

Art. 1483. Subject to the provisions of the Statute of Frauds and of any other
applicable statute, a contract of sale may be made in writing, or by word of
mouth, or partly in writing and partly by word of mouth, or may be inferred
from the conduct of the parties. (n)

Art. 1484. In a contract of sale of personal property the price of which is

payable in installments, the vendor may exercise any of the following
remedies:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or
more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been
constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement
to the contrary shall be void. (1454-A-a)

Art. 1485. The preceding article shall be applied to contracts purporting to

be leases of personal property with option to buy, when the lessor has
deprived the lessee of the possession or enjoyment of the thing. (1454-A-a)

Art. 1486. In the case referred to in two preceding articles, a stipulation that
the installments or rents paid shall not be returned to the vendee or lessee
shall be valid insofar as the same may not be unconscionable under the
circumstances. (n)

Art. 1487. The expenses for the execution and registration of the sale shall
be borne by the vendor, unless there is a stipulation to the contrary. (1455a)

Art. 1488. The expropriation of property for public use is governed by

special laws. (1456)

CHAPTER 2
 CAPACITY TO BUY OR SELL

Art. 1489. All persons who are authorized in this Code to obligate
themselves, may enter into a contract of sale, saving the modifications
contained in the following articles.

Where necessaries are those sold and delivered to a minor or other person
without capacity to act, he must pay a reasonable price therefor.
Necessaries are those referred to in Article 290. (1457a)

Art. 1490. The husband and the wife cannot sell property to each other,
except:

(1) When a separation of property was agreed upon in the marriage

settlements; or

(2) When there has been a judicial separation or property under

Article 191. (1458a)

Art. 1491. The following persons cannot acquire by purchase, even at a

public or judicial auction, either in person or through the mediation of
another:
(1) The guardian, the property of the person or persons who may be
under his guardianship;

(2) Agents, the property whose administration or sale may have been
entrusted to them, unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under

administration;

(4) Public officers and employees, the property of the State or of any
subdivision thereof, or of any government-owned or controlled
corporation, or institution, the administration of which has been
intrusted to them; this provision shall apply to judges and
government experts who, in any manner whatsoever, take part in the
sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and

inferior courts, and other officers and employees connected with the
administration of justice, the property and rights in litigation or
levied upon an execution before the court within whose jurisdiction
or territory they exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply to lawyers,
with respect to the property and rights which may be the object of any
litigation in which they may take part by virtue of their profession.
 (6) Any others specially disqualified by law. (1459a)

Art. 1492. The prohibitions in the two preceding articles are applicable to
sales in legal redemption, compromises and renunciations. (n)

CHAPTER 3
EFFECTS OF THE CONTRACT
WHEN THE THING SOLD HAS BEEN LOST

Art. 1493. If at the time the contract of sale is perfected, the thing which is
the object of the contract has been entirely lost, the contract shall be
without any effect.

But if the thing should have been lost in part only, the vendee may choose
between withdrawing from the contract and demanding the remaining part,
paying its price in proportion to the total sum agreed upon. (1460a)

Art. 1494. Where the parties purport a sale of specific goods, and the goods
without the knowledge of the seller have perished in part or have wholly or
in a material part so deteriorated in quality as to be substantially changed
in character, the buyer may at his option treat the sale:

(1) As avoided; or

(2) As valid in all of the existing goods or in so much thereof as have

not deteriorated, and as binding the buyer to pay the agreed price for
the goods in which the ownership will pass, if the sale was divisible.
(n)

CHAPTER 4
OBLIGATIONS OF THE VENDOR

SECTION 1. - General Provisions

Art. 1495. The vendor is bound to transfer the ownership of and deliver, as
well as warrant the thing which is the object of the sale. (1461a)

Art. 1496. The ownership of the thing sold is acquired by the vendee from
the moment it is delivered to him in any of the ways specified in Articles
1497 to 1501, or in any other manner signifying an agreement that the
possession is transferred from the vendor to the vendee. (n)

SECTION 2. - Delivery of the Thing Sold

Art. 1497. The thing sold shall be understood as delivered, when it is placed
in the control and possession of the vendee. (1462a)

Art. 1498. When the sale is made through a public instrument, the
execution thereof shall be equivalent to the delivery of the thing which is
the object of the contract, if from the deed the contrary does not appear or
cannot clearly be inferred.

With regard to movable property, its delivery may also be made by the
delivery of the keys of the place or depository where it is stored or kept.
(1463a)

Art. 1499. The delivery of movable property may likewise be made by the
mere consent or agreement of the contracting parties, if the thing sold
cannot be transferred to the possession of the vendee at the time of the sale,
or if the latter already had it in his possession for any other reason. (1463a)

Art. 1500. There may also be tradition constitutum possessorium. (n)

Art. 1501. With respect to incorporeal property, the provisions of the first
paragraph of article 1498 shall govern. In any other case wherein said
provisions are not applicable, the placing of the titles of ownership in the
possession of the vendee or the use by the vendee of his rights, with the
vendor's consent, shall be understood as a delivery. (1464)

Art. 1502. When goods are delivered to the buyer "on sale or return" to give
the buyer an option to return the goods instead of paying the price, the
ownership passes to the buyer of delivery, but he may revest the ownership
in the seller by returning or tendering the goods within the time fixed in the
contract, or, if no time has been fixed, within a reasonable time. (n)

When goods are delivered to the buyer on approval or on trial or on

satisfaction, or other similar terms, the ownership therein passes to the
buyer:

(1) When he signifies his approval or acceptance to the seller or does

any other act adopting the transaction;

(2) If he does not signify his approval or acceptance to the seller, but
retains the goods without giving notice of rejection, then if a time has
been fixed for the return of the goods, on the expiration of such time,
and, if no time has been fixed, on the expiration of a reasonable time.
What is a reasonable time is a question of fact. (n)

Art. 1503. When there is a contract of sale of specific goods, the seller may,
by the terms of the contract, reserve the right of possession or ownership in
the goods until certain conditions have been fulfilled. The right of
possession or ownership may be thus reserved notwithstanding the delivery
of the goods to the buyer or to a carrier or other bailee for the purpose of
transmission to the buyer.

Where goods are shipped, and by the bill of lading the goods are deliverable
to the seller or his agent, or to the order of the seller or of his agent, the
seller thereby reserves the ownership in the goods. But, if except for the
form of the bill of lading, the ownership would have passed to the buyer on
shipment of the goods, the seller's property in the goods shall be deemed to
be only for the purpose of securing performance by the buyer of his
obligations under the contract.

Where goods are shipped, and by the bill of lading the goods are deliverable
to order of the buyer or of his agent, but possession of the bill of lading is
retained by the seller or his agent, the seller thereby reserves a right to the
possession of the goods as against the buyer.

Where the seller of goods draws on the buyer for the price and transmits
the bill of exchange and bill of lading together to the buyer to secure
acceptance or payment of the bill of exchange, the buyer is bound to return
the bill of lading if he does not honor the bill of exchange, and if he
wrongfully retains the bill of lading he acquires no added right thereby. If,
however, the bill of lading provides that the goods are deliverable to the
buyer or to the order of the buyer, or is indorsed in blank, or to the buyer by
the consignee named therein, one who purchases in good faith, for value,
the bill of lading, or goods from the buyer will obtain the ownership in the
goods, although the bill of exchange has not been honored, provided that
such purchaser has received delivery of the bill of lading indorsed by the
consignee named therein, or of the goods, without notice of the facts
making the transfer wrongful. (n)

Art. 1504. Unless otherwise agreed, the goods remain at the seller's risk
until the ownership therein is transferred to the buyer, but when the
ownership therein is transferred to the buyer the goods are at the buyer's
risk whether actual delivery has been made or not, except that:

(1) Where delivery of the goods has been made to the buyer or to a
bailee for the buyer, in pursuance of the contract and the ownership
in the goods has been retained by the seller merely to secure
performance by the buyer of his obligations under the contract, the
goods are at the buyer's risk from the time of such delivery;

(2) Where actual delivery has been delayed through the fault of either
the buyer or seller the goods are at the risk of the party in fault. (n)
Art. 1505. Subject to the provisions of this Title, where goods are sold by a
person who is not the owner thereof, and who does not sell them under
authority or with the consent of the owner, the buyer acquires no better
title to the goods than the seller had, unless the owner of the goods is by his
conduct precluded from denying the seller's authority to sell.

Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other
provision of law enabling the apparent owner of goods to dispose of
them as if he were the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale
or under the order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in

accordance with the Code of Commerce and special laws. (n)

Art. 1506. Where the seller of goods has a voidable title thereto, but his title
has not been avoided at the time of the sale, the buyer acquires a good title
to the goods, provided he buys them in good faith, for value, and without
notice of the seller's defect of title. (n)

Art. 1507. A document of title in which it is stated that the goods referred to
therein will be delivered to the bearer, or to the order of any person named
in such document is a negotiable document of title. (n)

Art. 1508. A negotiable document of title may be negotiated by delivery:

(1) Where by the terms of the document the carrier, warehouseman

or other bailee issuing the same undertakes to deliver the goods to the
bearer; or

(2) Where by the terms of the document the carrier, warehouseman

or other bailee issuing the same undertakes to deliver the goods to the
order of a specified person, and such person or a subsequent
endorsee of the document has indorsed it in blank or to the bearer.

Where by the terms of a negotiable document of title the goods are

deliverable to bearer or where a negotiable document of title has been
indorsed in blank or to bearer, any holder may indorse the same to himself
or to any specified person, and in such case the document shall thereafter
be negotiated only by the endorsement of such endorsee. (n)

Art. 1509. A negotiable document of title may be negotiated by the

endorsement of the person to whose order the goods are by the terms of the
document deliverable. Such endorsement may be in blank, to bearer or to a
specified person. If indorsed to a specified person, it may be again
negotiated by the endorsement of such person in blank, to bearer or to
another specified person. Subsequent negotiations may be made in like
manner. (n)

Art. 1510. If a document of title which contains an undertaking by a carrier,

warehouseman or other bailee to deliver the goods to bearer, to a specified
person or order of a specified person or which contains words of like
import, has placed upon it the words "not negotiable," "non-negotiable" or
the like, such document may nevertheless be negotiated by the holder and is
a negotiable document of title within the meaning of this Title. But nothing
in this Title contained shall be construed as limiting or defining the effect
upon the obligations of the carrier, warehouseman, or other bailee issuing
a document of title or placing thereon the words "not negotiable," "non-
negotiable," or the like. (n)

Art. 1511. A document of title which is not in such form that it can be
negotiated by delivery may be transferred by the holder by delivery to a
purchaser or donee. A non-negotiable document cannot be negotiated and
the endorsement of such a document gives the transferee no additional
right. (n)

Art. 1512. A negotiable document of title may be negotiated:

(1) By the owner therefor; or

(2) By any person to whom the possession or custody of the document

has been entrusted by the owner, if, by the terms of the document the
bailee issuing the document undertakes to deliver the goods to the
order of the person to whom the possession or custody of the
document has been entrusted, or if at the time of such entrusting the
document is in such form that it may be negotiated by delivery. (n)

Art. 1513. A person to whom a negotiable document of title has been duly
negotiated acquires thereby:
(1) Such title to the goods as the person negotiating the document to
him had or had ability to convey to a purchaser in good faith for value
and also such title to the goods as the person to whose order the goods
were to be delivered by the terms of the document had or had ability
to convey to a purchaser in good faith for value; and

(2) The direct obligation of the bailee issuing the document to hold
possession of the goods for him according to the terms of the
document as fully as if such bailee had contracted directly with him.
(n)
Art. 1514. A person to whom a document of title has been transferred, but
not negotiated, acquires thereby, as against the transferor, the title to the
goods, subject to the terms of any agreement with the transferor.

If the document is non-negotiable, such person also acquires the right to

notify the bailee who issued the document of the transfer thereof, and
thereby to acquire the direct obligation of such bailee to hold possession of
the goods for him according to the terms of the document.

Prior to the notification to such bailee by the transferor or transferee of a

non-negotiable document of title, the title of the transferee to the goods and
the right to acquire the obligation of such bailee may be defeated by the levy
of an attachment of execution upon the goods by a creditor of the
transferor, or by a notification to such bailee by the transferor or a
subsequent purchaser from the transfer of a subsequent sale of the goods
by the transferor. (n)

Art. 1515. Where a negotiable document of title is transferred for value by

delivery, and the endorsement of the transferor is essential for negotiation,
the transferee acquires a right against the transferor to compel him to
endorse the document unless a contrary intention appears. The negotiation
shall take effect as of the time when the endorsement is actually made. (n)

Art. 1516. A person who for value negotiates or transfers a document of title
by endorsement or delivery, including one who assigns for value a claim
secured by a document of title unless a contrary intention appears,
warrants:

(1) That the document is genuine;

(2) That he has a legal right to negotiate or transfer it;

(3) That he has knowledge of no fact which would impair the validity
or worth of the document; and

(4) That he has a right to transfer the title to the goods and that the
goods are merchantable or fit for a particular purpose, whenever
such warranties would have been implied if the contract of the parties
had been to transfer without a document of title the goods
represented thereby. (n)

Art. 1517. The endorsement of a document of title shall not make the
endorser liable for any failure on the part of the bailee who issued the
document or previous endorsers thereof to fulfill their respective
obligations. (n)
Art. 1518. The validity of the negotiation of a negotiable document of title is
not impaired by the fact that the negotiation was a breach of duty on the
part of the person making the negotiation, or by the fact that the owner of
the document was deprived of the possession of the same by loss, theft,
fraud, accident, mistake, duress, or conversion, if the person to whom the
document was negotiated or a person to whom the document was
subsequently negotiated paid value therefor in good faith without notice of
the breach of duty, or loss, theft, fraud, accident, mistake, duress or
conversion. (n)

Art. 1519. If goods are delivered to a bailee by the owner or by a person

whose act in conveying the title to them to a purchaser in good faith for
value would bind the owner and a negotiable document of title is issued for
them they cannot thereafter, while in possession of such bailee, be attached
by garnishment or otherwise or be levied under an execution unless the
document be first surrendered to the bailee or its negotiation enjoined. The
bailee shall in no case be compelled to deliver up the actual possession of
the goods until the document is surrendered to him or impounded by the
court. (n)

Art. 1520. A creditor whose debtor is the owner of a negotiable document of

title shall be entitled to such aid from courts of appropriate jurisdiction by
injunction and otherwise in attaching such document or in satisfying the
claim by means thereof as is allowed at law or in equity in regard to
property which cannot readily be attached or levied upon by ordinary legal
process. (n)

Art. 1521. Whether it is for the buyer to take possession of the goods or of
the seller to send them to the buyer is a question depending in each case on
the contract, express or implied, between the parties. Apart from any such
contract, express or implied, or usage of trade to the contrary, the place of
delivery is the seller's place of business if he has one, and if not his
residence; but in case of a contract of sale of specific goods, which to the
knowledge of the parties when the contract or the sale was made were in
some other place, then that place is the place of delivery.

Where by a contract of sale the seller is bound to send the goods to the
buyer, but no time for sending them is fixed, the seller is bound to send
them within a reasonable time.

Where the goods at the time of sale are in the possession of a third person,
the seller has not fulfilled his obligation to deliver to the buyer unless and
until such third person acknowledges to the buyer that he holds the goods
on the buyer's behalf.

Demand or tender of delivery may be treated as ineffectual unless made at a

reasonable hour. What is a reasonable hour is a question of fact.
Unless otherwise agreed, the expenses of and incidental to putting the
goods into a deliverable state must be borne by the seller. (n)

Art. 1522. Where the seller delivers to the buyer a quantity of goods less
than he contracted to sell, the buyer may reject them, but if the buyer
accepts or retains the goods so delivered, knowing that the seller is not
going to perform the contract in full, he must pay for them at the contract
rate. If, however, the buyer has used or disposed of the goods delivered
before he knows that the seller is not going to perform his contract in full,
the buyer shall not be liable for more than the fair value to him of the goods
so received.

Where the seller delivers to the buyer a quantity of goods larger than he
contracted to sell, the buyer may accept the goods included in the contract
and reject the rest. If the buyer accepts the whole of the goods so delivered
he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted to sell mixed
with goods of a different description not included in the contract, the buyer
may accept the goods which are in accordance with the contract and reject
the rest.

In the preceding two paragraphs, if the subject matter is indivisible, the

buyer may reject the whole of the goods.

The provisions of this article are subject to any usage of trade, special
agreement, or course of dealing between the parties. (n)

Art. 1523. Where, in pursuance of a contract of sale, the seller is authorized

or required to send the goods to the buyer, delivery of the goods to a
carrier, whether named by the buyer or not, for the purpose of
transmission to the buyer is deemed to be a delivery of the goods to the
buyer, except in the case provided for in Article 1503, first, second and third
paragraphs, or unless a contrary intent appears.

Unless otherwise authorized by the buyer, the seller must make such
contract with the carrier on behalf of the buyer as may be reasonable,
having regard to the nature of the goods and the other circumstances of the
case. If the seller omit so to do, and the goods are lost or damaged in course
of transit, the buyer may decline to treat the delivery to the carrier as a
delivery to himself, or may hold the seller responsible in damages.

Unless otherwise agreed, where goods are sent by the seller to the buyer
under circumstances in which the seller knows or ought to know that it is
usual to insure, the seller must give such notice to the buyer as may enable
him to insure them during their transit, and, if the seller fails to do so, the
goods shall be deemed to be at his risk during such transit. (n)
Art. 1524. The vendor shall not be bound to deliver the thing sold, if the
vendee has not paid him the price, or if no period for the payment has been
fixed in the contract. (1466)

Art. 1525. The seller of goods is deemed to be an unpaid seller within the
meaning of this Title:

(1) When the whole of the price has not been paid or tendered;

(2) When a bill of exchange or other negotiable instrument has been

received as conditional payment, and the condition on which it was
received has been broken by reason of the dishonor of the
instrument, the insolvency of the buyer, or otherwise.

In Articles 1525 to 1535 the term "seller" includes an agent of the seller to
whom the bill of lading has been indorsed, or a consignor or agent who has
himself paid, or is directly responsible for the price, or any other person
who is in the position of a seller. (n)

Art. 1526. Subject to the provisions of this Title, notwithstanding that the
ownership in the goods may have passed to the buyer, the unpaid seller of
goods, as such, has:

(1) A lien on the goods or right to retain them for the price while he is
in possession of them;

(2) In case of the insolvency of the buyer, a right of stopping the goods
in transitu after he has parted with the possession of them;

(3) A right of resale as limited by this Title;

(4) A right to rescind the sale as likewise limited by this Title.

Where the ownership in the goods has not passed to the buyer, the unpaid
seller has, in addition to his other remedies a right of withholding delivery
similar to and coextensive with his rights of lien and stoppage in transitu
where the ownership has passed to the buyer. (n)

Art. 1527. Subject to the provisions of this Title, the unpaid seller of goods
who is in possession of them is entitled to retain possession of them until
payment or tender of the price in the following cases, namely:

(1) Where the goods have been sold without any stipulation as to
credit;

(2) Where the goods have been sold on credit, but the term of credit
has expired;
 (3) Where the buyer becomes insolvent.

The seller may exercise his right of lien notwithstanding that he is in

possession of the goods as agent or bailee for the buyer. (n)

Art. 1528. Where an unpaid seller has made part delivery of the goods, he
may exercise his right of lien on the remainder, unless such part delivery
has been made under such circumstances as to show an intent to waive the
lien or right of retention. (n)

Art. 1529. The unpaid seller of goods loses his lien thereon:

(1) When he delivers the goods to a carrier or other bailee for the
purpose of transmission to the buyer without reserving the
ownership in the goods or the right to the possession thereof;

(2) When the buyer or his agent lawfully obtains possession of the
goods;

(3) By waiver thereof.

The unpaid seller of goods, having a lien thereon, does not lose his lien by
reason only that he has obtained judgment or decree for the price of the
goods. (n)

Art. 1530. Subject to the provisions of this Title, when the buyer of goods is
or becomes insolvent, the unpaid seller who has parted with the possession
of the goods has the right of stopping them in transitu, that is to say, he may
resume possession of the goods at any time while they are in transit, and he
will then become entitled to the same rights in regard to the goods as he
would have had if he had never parted with the possession. (n)

Art. 1531. Goods are in transit within the meaning of the preceding article:

(1) From the time when they are delivered to a carrier by land, water,
or air, or other bailee for the purpose of transmission to the buyer,
until the buyer, or his agent in that behalf, takes delivery of them
from such carrier or other bailee;

(2) If the goods are rejected by the buyer, and the carrier or other
bailee continues in possession of them, even if the seller has refused
to receive them back.

Goods are no longer in transit within the meaning of the preceding article:
(1) If the buyer, or his agent in that behalf, obtains delivery of the
goods before their arrival at the appointed destination;
 (2) If, after the arrival of the goods at the appointed destination, the
carrier or other bailee acknowledges to the buyer or his agent that he
holds the goods on his behalf and continues in possession of them as
bailee for the buyer or his agent; and it is immaterial that further
destination for the goods may have been indicated by the buyer;

(3) If the carrier or other bailee wrongfully refuses to deliver the

goods to the buyer or his agent in that behalf.

If the goods are delivered to a ship, freight train, truck, or airplane

chartered by the buyer, it is a question depending on the circumstances of
the particular case, whether they are in the possession of the carrier as such
or as agent of the buyer.

If part delivery of the goods has been made to the buyer, or his agent in that
behalf, the remainder of the goods may be stopped in transitu, unless such
part delivery has been under such circumstances as to show an agreement
with the buyer to give up possession of the whole of the goods. (n)

Art. 1532. The unpaid seller may exercise his right of stoppage in transitu
either by obtaining actual possession of the goods or by giving notice of his
claim to the carrier or other bailee in whose possession the goods are. Such
notice may be given either to the person in actual possession of the goods or
to his principal. In the latter case the notice, to be effectual, must be given
at such time and under such circumstances that the principal, by the
exercise of reasonable diligence, may prevent a delivery to the buyer.

When notice of stoppage in transitu is given by the seller to the carrier, or

other bailee in possession of the goods, he must redeliver the goods to, or
according to the directions of, the seller. The expenses of such delivery
must be borne by the seller. If, however, a negotiable document of title
representing the goods has been issued by the carrier or other bailee, he
shall not obliged to deliver or justified in delivering the goods to the seller
unless such document is first surrendered for cancellation. (n)

Art. 1533. Where the goods are of perishable nature, or where the seller
expressly reserves the right of resale in case the buyer should make default,
or where the buyer has been in default in the payment of the price for an
unreasonable time, an unpaid seller having a right of lien or having stopped
the goods in transitu may resell the goods. He shall not thereafter be liable
to the original buyer upon the contract of sale or for any profit made by
such resale, but may recover from the buyer damages for any loss
occasioned by the breach of the contract of sale.

Where a resale is made, as authorized in this article, the buyer acquires a

good title as against the original buyer.
It is not essential to the validity of resale that notice of an intention to resell
the goods be given by the seller to the original buyer. But where the right to
resell is not based on the perishable nature of the goods or upon an express
provision of the contract of sale, the giving or failure to give such notice
shall be relevant in any issue involving the question whether the buyer had
been in default for an unreasonable time before the resale was made.

It is not essential to the validity of a resale that notice of the time and place
of such resale should be given by the seller to the original buyer.

The seller is bound to exercise reasonable care and judgment in making a

resale, and subject to this requirement may make a resale either by public
or private sale. He cannot, however, directly or indirectly buy the goods. (n)

Art. 1534. An unpaid seller having the right of lien or having stopped the
goods in transitu, may rescind the transfer of title and resume the
ownership in the goods, where he expressly reserved the right to do so in
case the buyer should make default, or where the buyer has been in default
in the payment of the price for an unreasonable time. The seller shall not
thereafter be liable to the buyer upon the contract of sale, but may recover
from the buyer damages for any loss occasioned by the breach of the
contract.

The transfer of title shall not be held to have been rescinded by an unpaid
seller until he has manifested by notice to the buyer or by some other overt
act an intention to rescind. It is not necessary that such overt act should be
communicated to the buyer, but the giving or failure to give notice to the
buyer of the intention to rescind shall be relevant in any issue involving the
question whether the buyer had been in default for an unreasonable time
before the right of rescission was asserted. (n)

Art. 1535. Subject to the provisions of this Title, the unpaid seller's right of
lien or stoppage in transitu is not affected by any sale, or other disposition
of the goods which the buyer may have made, unless the seller has assented
thereto.

If, however, a negotiable document of title has been issued for goods, no
seller's lien or right of stoppage in transitu shall defeat the right of any
purchaser for value in good faith to whom such document has been
negotiated, whether such negotiation be prior or subsequent to the
notification to the carrier, or other bailee who issued such document, of the
seller's claim to a lien or right of stoppage in transitu. (n)

Art. 1536. The vendor is not bound to deliver the thing sold in case the
vendee should lose the right to make use of the terms as provided in Article
1198. (1467a)
Art. 1537. The vendor is bound to deliver the thing sold and its accessions
and accessories in the condition in which they were upon the perfection of
the contract.

All the fruits shall pertain to the vendee from the day on which the contract
was perfected. (1468a)

Art. 1538. In case of loss, deterioration or improvement of the thing before

its delivery, the rules in Article 1189 shall be observed, the vendor being
considered the debtor. (n)

Art. 1539. The obligation to deliver the thing sold includes that of placing in
the control of the vendee all that is mentioned in the contract, in conformity
with the following rules:

If the sale of real estate should be made with a statement of its area, at the
rate of a certain price for a unit of measure or number, the vendor shall be
obliged to deliver to the vendee, if the latter should demand it, all that may
have been stated in the contract; but, should this be not possible, the vendee
may choose between a proportional reduction of the price and the
rescission of the contract, provided that, in the latter case, the lack in the
area be not less than one-tenth of that stated.

The same shall be done, even when the area is the same, if any part of the
immovable is not of the quality specified in the contract.

The rescission, in this case, shall only take place at the will of the vendee,
when the inferior value of the thing sold exceeds one-tenth of the price
agreed upon.

Nevertheless, if the vendee would not have bought the immovable had he
known of its smaller area of inferior quality, he may rescind the sale.
(1469a)

Art. 1540. If, in the case of the preceding article, there is a greater area or
number in the immovable than that stated in the contract, the vendee may
accept the area included in the contract and reject the rest. If he accepts the
whole area, he must pay for the same at the contract rate. (1470a)

Art. 1541. The provisions of the two preceding articles shall apply to judicial
sales. (n)

Art. 1542. In the sale of real estate, made for a lump sum and not at the rate
of a certain sum for a unit of measure or number, there shall be no increase
or decrease of the price, although there be a greater or less area or number
than that stated in the contract.
The same rule shall be applied when two or more immovables as sold for a
single price; but if, besides mentioning the boundaries, which is
indispensable in every conveyance of real estate, its area or number should
be designated in the contract, the vendor shall be bound to deliver all that is
included within said boundaries, even when it exceeds the area or number
specified in the contract; and, should he not be able to do so, he shall suffer
a reduction in the price, in proportion to what is lacking in the area or
number, unless the contract is rescinded because the vendee does not
accede to the failure to deliver what has been stipulated. (1471)

Art. 1543. The actions arising from Articles 1539 and 1542 shall prescribe in
six months, counted from the day of delivery. (1472a)

Art. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person

acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person

who in good faith was first in the possession; and, in the absence thereof, to
the person who presents the oldest title, provided there is good faith. (1473)

SECTION 3. - Conditions and Warranties

Art. 1545. Where the obligation of either party to a contract of sale is subject
to any condition which is not performed, such party may refuse to proceed
with the contract or he may waive performance of the condition. If the
other party has promised that the condition should happen or be
performed, such first mentioned party may also treat the nonperformance
of the condition as a breach of warranty.

Where the ownership in the thing has not passed, the buyer may treat the
fulfillment by the seller of his obligation to deliver the same as described
and as warranted expressly or by implication in the contract of sale as a
condition of the obligation of the buyer to perform his promise to accept
and pay for the thing. (n)

Art. 1546. Any affirmation of fact or any promise by the seller relating to the
thing is an express warranty if the natural tendency of such affirmation or
promise is to induce the buyer to purchase the same, and if the buyer
purchase the thing relying thereon. No affirmation of the value of the thing,
nor any statement purporting to be a statement of the seller's opinion only,
shall be construed as a warranty, unless the seller made such affirmation or
statement as an expert and it was relied upon by the buyer. (n)
Art. 1547. In a contract of sale, unless a contrary intention appears, there is:

(1) An implied warranty on the part of the seller that he has a right to
sell the thing at the time when the ownership is to pass, and that the
buyer shall from that time have and enjoy the legal and peaceful
possession of the thing;

(2) An implied warranty that the thing shall be free from any hidden
faults or defects, or any charge or encumbrance not declared or
known to the buyer.

This Article shall not, however, be held to render liable a sheriff,

auctioneer, mortgagee, pledgee, or other person professing to sell by virtue
of authority in fact or law, for the sale of a thing in which a third person has
a legal or equitable interest. (n)

SUBSECTION 1. - Warranty in Case of Eviction

Art. 1548. Eviction shall take place whenever by a final judgment based on a
right prior to the sale or an act imputable to the vendor, the vendee is
deprived of the whole or of a part of the thing purchased.

The vendor shall answer for the eviction even though nothing has been said
in the contract on the subject.

The contracting parties, however, may increase, diminish, or suppress this

legal obligation of the vendor. (1475a)

Art. 1549. The vendee need not appeal from the decision in order that the
vendor may become liable for eviction. (n)

Art. 1550. When adverse possession had been commenced before the sale
but the prescriptive period is completed after the transfer, the vendor shall
not be liable for eviction. (n)

Art. 1551. If the property is sold for nonpayment of taxes due and not made
known to the vendee before the sale, the vendor is liable for eviction. (n)

Art. 1552. The judgment debtor is also responsible for eviction in judicial
sales, unless it is otherwise decreed in the judgment. (n)

Art. 1553. Any stipulation exempting the vendor from the obligation to
answer for eviction shall be void, if he acted in bad faith. (1476)

Art. 1554. If the vendee has renounced the right to warranty in case of
eviction, and eviction should take place, the vendor shall only pay the value
which the thing sold had at the time of the eviction. Should the vendee have
made the waiver with knowledge of the risks of eviction and assumed its
consequences, the vendor shall not be liable. (1477)

Art. 1555. When the warranty has been agreed upon or nothing has been
stipulated on this point, in case eviction occurs, the vendee shall have the
right to demand of the vendor:

(1) The return of the value which the thing sold had at the time of the
eviction, be it greater or less than the price of the sale;

(2) The income or fruits, if he has been ordered to deliver them to the
party who won the suit against him;

(3) The costs of the suit which caused the eviction, and, in a proper
case, those of the suit brought against the vendor for the warranty;

(4) The expenses of the contract, if the vendee has paid them;

(5) The damages and interests, and ornamental expenses, if the sale
was made in bad faith. (1478)

Art. 1556. Should the vendee lose, by reason of the eviction, a part of the
thing sold of such importance, in relation to the whole, that he would not
have bought it without said part, he may demand the rescission of the
contract; but with the obligation to return the thing without other
encumbrances that those which it had when he acquired it.

He may exercise this right of action, instead of enforcing the vendor's

liability for eviction.

The same rule shall be observed when two or more things have been jointly
sold for a lump sum, or for a separate price for each of them, if it should
clearly appear that the vendee would not have purchased one without the
other. (1479a)

Art. 1557. The warranty cannot be enforced until a final judgment has been
rendered, whereby the vendee loses the thing acquired or a part thereof.
(1480)

Art. 1558. The vendor shall not be obliged to make good the proper
warranty, unless he is summoned in the suit for eviction at the instance of
the vendee. (1481a)

Art. 1559. The defendant vendee shall ask, within the time fixed in the Rules
of Court for answering the complaint, that the vendor be made a co-
defendant. (1482a)
Art. 1560. If the immovable sold should be encumbered with any non-
apparent burden or servitude, not mentioned in the agreement, of such a
nature that it must be presumed that the vendee would not have acquired it
had he been aware thereof, he may ask for the rescission of the contract,
unless he should prefer the appropriate indemnity. Neither right can be
exercised if the non-apparent burden or servitude is recorded in the
Registry of Property, unless there is an express warranty that the thing is
free from all burdens and encumbrances.

Within one year, to be computed from the execution of the deed, the vendee
may bring the action for rescission, or sue for damages.

One year having elapsed, he may only bring an action for damages within an
equal period, to be counted from the date on which he discovered the
burden or servitude. (1483a)

SUBSECTION 2. - Warranty Against Hidden Defects

of or Encumbrances Upon the Thing Sold

Art. 1561. The vendor shall be responsible for warranty against the hidden
defects which the thing sold may have, should they render it unfit for the
use for which it is intended, or should they diminish its fitness for such use
to such an extent that, had the vendee been aware thereof, he would not
have acquired it or would have given a lower price for it; but said vendor
shall not be answerable for patent defects or those which may be visible, or
for those which are not visible if the vendee is an expert who, by reason of
his trade or profession, should have known them. (1484a)

Art. 1562. In a sale of goods, there is an implied warranty or condition as to

the quality or fitness of the goods, as follows:

(1) Where the buyer, expressly or by implication, makes known to the

seller the particular purpose for which the goods are acquired, and it
appears that the buyer relies on the seller's skill or judgment
(whether he be the grower or manufacturer or not), there is an
implied warranty that the goods shall be reasonably fit for such
purpose;

(2) Where the goods are brought by description from a seller who
deals in goods of that description (whether he be the grower or
manufacturer or not), there is an implied warranty that the goods
shall be of merchantable quality. (n)

Art. 1563. In the case of contract of sale of a specified article under its
patent or other trade name, there is no warranty as to its fitness for any
particular purpose, unless there is a stipulation to the contrary. (n)
Art. 1564. An implied warranty or condition as to the quality or fitness for a
particular purpose may be annexed by the usage of trade. (n)

Art. 1565. In the case of a contract of sale by sample, if the seller is a dealer
in goods of that kind, there is an implied warranty that the goods shall be
free from any defect rendering them unmerchantable which would not be
apparent on reasonable examination of the sample. (n)

Art. 1566. The vendor is responsible to the vendee for any hidden faults or
defects in the thing sold, even though he was not aware thereof.

This provision shall not apply if the contrary has been stipulated, and the
vendor was not aware of the hidden faults or defects in the thing sold.
(1485)

Art. 1567. In the cases of Articles 1561, 1562, 1564, 1565 and 1566, the vendee
may elect between withdrawing from the contract and demanding a
proportionate reduction of the price, with damages in either case. (1486a)

Art. 1568. If the thing sold should be lost in consequence of the hidden
faults, and the vendor was aware of them, he shall bear the loss, and shall
be obliged to return the price and refund the expenses of the contract, with
damages. If he was not aware of them, he shall only return the price and
interest thereon, and reimburse the expenses of the contract which the
vendee might have paid. (1487a)

Art. 1569. If the thing sold had any hidden fault at the time of the sale, and
should thereafter be lost by a fortuitous event or through the fault of the
vendee, the latter may demand of the vendor the price which he paid, less
the value which the thing had when it was lost.

If the vendor acted in bad faith, he shall pay damages to the vendee. (1488a)

Art. 1570. The preceding articles of this Subsection shall be applicable to

judicial sales, except that the judgment debtor shall not be liable for
damages. (1489a)

Art. 1571. Actions arising from the provisions of the preceding ten articles
shall be barred after six months, from the delivery of the thing sold. (1490)

Art. 1572. If two or more animals are sold together, whether for a lump sum
or for a separate price for each of them, the redhibitory defect of one shall
only give rise to its redhibition, and not that of the others; unless it should
appear that the vendee would not have purchased the sound animal or
animals without the defective one.
The latter case shall be presumed when a team, yoke pair, or set is bought,
even if a separate price has been fixed for each one of the animals
composing the same. (1491)

Art. 1573. The provisions of the preceding article with respect to the sale of
animals shall in like manner be applicable to the sale of other things. (1492)

Art. 1574. There is no warranty against hidden defects of animals sold at

fairs or at public auctions, or of live stock sold as condemned. (1493a)

Art. 1575. The sale of animals suffering from contagious diseases shall be
void.

A contract of sale of animals shall also be void if the use or service for which
they are acquired has been stated in the contract, and they are found to be
unfit therefor. (1494a)

Art. 1576. If the hidden defect of animals, even in case a professional

inspection has been made, should be of such a nature that expert
knowledge is not sufficient to discover it, the defect shall be considered as
redhibitory.

But if the veterinarian, through ignorance or bad faith should fail to

discover or disclose it, he shall be liable for damages. (1495)

Art. 1577. The redhibitory action, based on the faults or defects of animals,
must be brought within forty days from the date of their delivery to the
vendee.

This action can only be exercised with respect to faults and defects which
are determined by law or by local customs. (1496a)

Art. 1578. If the animal should die within three days after its purchase, the
vendor shall be liable if the disease which cause the death existed at the
time of the contract. (1497a)

Art. 1579. If the sale be rescinded, the animal shall be returned in the
condition in which it was sold and delivered, the vendee being answerable
for any injury due to his negligence, and not arising from the redhibitory
fault or defect. (1498)

Art. 1580. In the sale of animals with redhibitory defects, the vendee shall
also enjoy the right mentioned in article 1567; but he must make use thereof
within the same period which has been fixed for the exercise of the
redhibitory action. (1499)
Art. 1581. The form of sale of large cattle shall be governed by special laws.
(n)

CHAPTER 5
OBLIGATIONS OF THE VENDEE

Art. 1582. The vendee is bound to accept delivery and to pay the price of the
thing sold at the time and place stipulated in the contract.

If the time and place should not have been stipulated, the payment must be
made at the time and place of the delivery of the thing sold. (1500a)

Art. 1583. Unless otherwise agreed, the buyer of goods is not bound to
accept delivery thereof by installments.

Where there is a contract of sale of goods to be delivered by stated

installments, which are to be separately paid for, and the seller makes
defective deliveries in respect of one or more instalments, or the buyer
neglects or refuses without just cause to take delivery of or pay for one
more instalments, it depends in each case on the terms of the contract and
the circumstances of the case, whether the breach of contract is so material
as to justify the injured party in refusing to proceed further and suing for
damages for breach of the entire contract, or whether the breach is
severable, giving rise to a claim for compensation but not to a right to treat
the whole contract as broken. (n)

Art. 1584. Where goods are delivered to the buyer, which he has not
previously examined, he is not deemed to have accepted them unless and
until he has had a reasonable opportunity of examining them for the
purpose of ascertaining whether they are in conformity with the contract if
there is no stipulation to the contrary.

Unless otherwise agreed, when the seller tenders delivery of goods to the
buyer, he is bound, on request, to afford the buyer a reasonable opportunity
of examining the goods for the purpose of ascertaining whether they are in
conformity with the contract.

Where goods are delivered to a carrier by the seller, in accordance with an

order from or agreement with the buyer, upon the terms that the goods
shall not be delivered by the carrier to the buyer until he has paid the price,
whether such terms are indicated by marking the goods with the words
"collect on delivery," or otherwise, the buyer is not entitled to examine the
goods before the payment of the price, in the absence of agreement or usage
of trade permitting such examination. (n)
Art. 1585. The buyer is deemed to have accepted the goods when he
intimates to the seller that he has accepted them, or when the goods have
been delivered to him, and he does any act in relation to them which is
inconsistent with the ownership of the seller, or when, after the lapse of a
reasonable time, he retains the goods without intimating to the seller that
he has rejected them. (n)

Art. 1586. In the absence of express or implied agreement of the parties,

acceptance of the goods by the buyer shall not discharge the seller from
liability in damages or other legal remedy for breach of any promise or
warranty in the contract of sale. But, if, after acceptance of the goods, the
buyer fails to give notice to the seller of the breach in any promise of
warranty within a reasonable time after the buyer knows, or ought to know
of such breach, the seller shall not be liable therefor. (n)

Art. 1587. Unless otherwise agreed, where goods are delivered to the buyer,
and he refuses to accept them, having the right so to do, he is not bound to
return them to the seller, but it is sufficient if he notifies the seller that he
refuses to accept them. If he voluntarily constitutes himself a depositary
thereof, he shall be liable as such. (n)

Art. 1588. If there is no stipulation as specified in the first paragraph of

article 1523, when the buyer's refusal to accept the goods is without just
cause, the title thereto passes to him from the moment they are placed at
his disposal. (n)

Art. 1589. The vendee shall owe interest for the period between the delivery
of the thing and the payment of the price, in the following three cases:

(1) Should it have been so stipulated;

(2) Should the thing sold and delivered produce fruits or income;

(3) Should he be in default, from the time of judicial or extrajudicial

demand for the payment of the price. (1501a)

Art. 1590. Should the vendee be disturbed in the possession or ownership of

the thing acquired, or should he have reasonable grounds to fear such
disturbance, by a vindicatory action or a foreclosure of mortgage, he may
suspend the payment of the price until the vendor has caused the
disturbance or danger to cease, unless the latter gives security for the
return of the price in a proper case, or it has been stipulated that,
notwithstanding any such contingency, the vendee shall be bound to make
the payment. A mere act of trespass shall not authorize the suspension of
the payment of the price. (1502a)
Art. 1591. Should the vendor have reasonable grounds to fear the loss of
immovable property sold and its price, he may immediately sue for the
rescission of the sale.

Should such ground not exist, the provisions of Article 1191 shall be
observed. (1503)

Art. 1592. In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the
rescission of the contract shall of right take place, the vendee may pay, even
after the expiration of the period, as long as no demand for rescission of the
contract has been made upon him either judicially or by a notarial act. After
the demand, the court may not grant him a new term. (1504a)

Art. 1593. With respect to movable property, the rescission of the sale shall
of right take place in the interest of the vendor, if the vendee, upon the
expiration of the period fixed for the delivery of the thing, should not have
appeared to receive it, or, having appeared, he should not have tendered the
price at the same time, unless a longer period has been stipulated for its
payment. (1505)

CHAPTER 6
ACTIONS FOR BREACH OF CONTRACT OF SALE OF GOODS

Art. 1594. Actions for breach of the contract of sale of goods shall be
governed particularly by the provisions of this Chapter, and as to matters
not specifically provided for herein, by other applicable provisions of this
Title. (n)

Art. 1595. Where, under a contract of sale, the ownership of the goods has
passed to the buyer and he wrongfully neglects or refuses to pay for the
goods according to the terms of the contract of sale, the seller may maintain
an action against him for the price of the goods.

Where, under a contract of sale, the price is payable on a certain day,

irrespective of delivery or of transfer of title and the buyer wrongfully
neglects or refuses to pay such price, the seller may maintain an action for
the price although the ownership in the goods has not passed. But it shall be
a defense to such an action that the seller at any time before the judgment
in such action has manifested an inability to perform the contract of sale on
his part or an intention not to perform it.

Although the ownership in the goods has not passed, if they cannot readily
be resold for a reasonable price, and if the provisions of article 1596, fourth
paragraph, are not applicable, the seller may offer to deliver the goods to
the buyer, and, if the buyer refuses to receive them, may notify the buyer
that the goods are thereafter held by the seller as bailee for the buyer.
Thereafter the seller may treat the goods as the buyer's and may maintain
an action for the price. (n)

Art. 1596. Where the buyer wrongfully neglects or refuses to accept and pay
for the goods, the seller may maintain an action against him for damages
for nonacceptance.

The measure of damages is the estimated loss directly and naturally

resulting in the ordinary course of events from the buyer's breach of
contract.

Where there is an available market for the goods in question, the measure
of damages is, in the absence of special circumstances showing proximate
damage of a different amount, the difference between the contract price
and the market or current price at the time or times when the goods ought
to have been accepted, or, if no time was fixed for acceptance, then at the
time of the refusal to accept.

If, while labor or expense of material amount is necessary on the part of the
seller to enable him to fulfill his obligations under the contract of sale, the
buyer repudiates the contract or notifies the seller to proceed no further
therewith, the buyer shall be liable to the seller for labor performed or
expenses made before receiving notice of the buyer's repudiation or
countermand. The profit the seller would have made if the contract or the
sale had been fully performed shall be considered in awarding the damages.
(n)

Art. 1597. Where the goods have not been delivered to the buyer, and the
buyer has repudiated the contract of sale, or has manifested his inability to
perform his obligations thereunder, or has committed a breach thereof, the
seller may totally rescind the contract of sale by giving notice of his election
so to do to the buyer. (n)

Art. 1598. Where the seller has broken a contract to deliver specific or
ascertained goods, a court may, on the application of the buyer, direct that
the contract shall be performed specifically, without giving the seller the
option of retaining the goods on payment of damages. The judgment or
decree may be unconditional, or upon such terms and conditions as to
damages, payment of the price and otherwise, as the court may deem just.
(n)

Art. 1599. Where there is a breach of warranty by the seller, the buyer may,
at his election:
(1) Accept or keep the goods and set up against the seller, the breach
of warranty by way of recoupment in diminution or extinction of the
price;

(2) Accept or keep the goods and maintain an action against the seller
for damages for the breach of warranty;

(3) Refuse to accept the goods, and maintain an action against the
seller for damages for the breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods or if
the goods have already been received, return them or offer to return
them to the seller and recover the price or any part thereof which has
been paid.

When the buyer has claimed and been granted a remedy in anyone of
these ways, no other remedy can thereafter be granted, without
prejudice to the provisions of the second paragraph of Article 1191.

Where the goods have been delivered to the buyer, he cannot rescind
the sale if he knew of the breach of warranty when he accepted the
goods without protest, or if he fails to notify the seller within a
reasonable time of the election to rescind, or if he fails to return or to
offer to return the goods to the seller in substantially as good
condition as they were in at the time the ownership was transferred to
the buyer. But if deterioration or injury of the goods is due to the
breach or warranty, such deterioration or injury shall not prevent the
buyer from returning or offering to return the goods to the seller and
rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do so, he
shall cease to be liable for the price upon returning or offering to
return the goods. If the price or any part thereof has already been
paid, the seller shall be liable to repay so much thereof as has been
paid, concurrently with the return of the goods, or immediately after
an offer to return the goods in exchange for repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do so, if
the seller refuses to accept an offer of the buyer to return the goods,
the buyer shall thereafter be deemed to hold the goods as bailee for
the seller, but subject to a lien to secure payment of any portion of the
price which has been paid, and with the remedies for the enforcement
of such lien allowed to an unpaid seller by Article 1526.

(5) In the case of breach of warranty of quality, such loss, in the

absence of special circumstances showing proximate damage of a
greater amount, is the difference between the value of the goods at the
 time of delivery to the buyer and the value they would have had if they
had answered to the warranty. (n)

CHAPTER 7
EXTINGUISHMENT OF SALE

Art. 1600. Sales are extinguished by the same causes as all other
obligations, by those stated in the preceding articles of this Title, and by
conventional or legal redemption. (1506)

SECTION 1. - Conventional Redemption

Art. 1601. Conventional redemption shall take place when the vendor
reserves the right to repurchase the thing sold, with the obligation to
comply with the provisions of Article 1616 and other stipulations which may
have been agreed upon. (1507)

Art. 1602. The contract shall be presumed to be an equitable mortgage, in

any of the following cases:

(1) When the price of a sale with right to repurchase is unusually

inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase

another instrument extending the period of redemption or granting a
new period is executed;

(4) When the purchaser retains for himself a part of the purchase
price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be

received by the vendee as rent or otherwise shall be considered as interest
which shall be subject to the usury laws. (n)

Art. 1603. In case of doubt, a contract purporting to be a sale with right to

repurchase shall be construed as an equitable mortgage. (n)
Art. 1604. The provisions of Article 1602 shall also apply to a contract
purporting to be an absolute sale. (n)

Art. 1605. In the cases referred to in Articles 1602 and 1604, the apparent
vendor may ask for the reformation of the instrument. (n)

Art. 1606. The right referred to in Article 1601, in the absence of an express
agreement, shall last four years from the date of the contract.

Should there be an agreement, the period cannot exceed ten years.

However, the vendor may still exercise the right to repurchase within thirty
days from the time final judgment was rendered in a civil action on the
basis that the contract was a true sale with right to repurchase. (1508a)

Art. 1607. In case of real property, the consolidation of ownership in the

vendee by virtue of the failure of the vendor to comply with the provisions
of article 1616 shall not be recorded in the Registry of Property without a
judicial order, after the vendor has been duly heard. (n)

Art. 1608. The vendor may bring his action against every possessor whose
right is derived from the vendee, even if in the second contract no mention
should have been made of the right to repurchase, without prejudice to the
provisions of the Mortgage Law and the Land Registration Law with respect
to third persons. (1510)

Art. 1609. The vendee is subrogated to the vendor's rights and actions.
(1511)

Art. 1610. The creditors of the vendor cannot make use of the right of
redemption against the vendee, until after they have exhausted the property
of the vendor. (1512)

Art. 1611. In a sale with a right to repurchase, the vendee of a part of an

undivided immovable who acquires the whole thereof in the case of article
498, may compel the vendor to redeem the whole property, if the latter
wishes to make use of the right of redemption. (1513)

Art. 1612. If several persons, jointly and in the same contract, should sell an
undivided immovable with a right of repurchase, none of them may
exercise this right for more than his respective share.

The same rule shall apply if the person who sold an immovable alone has
left several heirs, in which case each of the latter may only redeem the part
which he may have acquired. (1514)
Art. 1613. In the case of the preceding article, the vendee may demand of all
the vendors or co-heirs that they come to an agreement upon the purchase
of the whole thing sold; and should they fail to do so, the vendee cannot be
compelled to consent to a partial redemption. (1515)

Art. 1614. Each one of the co-owners of an undivided immovable who may
have sold his share separately, may independently exercise the right of
repurchase as regards his own share, and the vendee cannot compel him to
redeem the whole property. (1516)

Art. 1615. If the vendee should leave several heirs, the action for
redemption cannot be brought against each of them except for his own
share, whether the thing be undivided, or it has been partitioned among
them.

But if the inheritance has been divided, and the thing sold has been
awarded to one of the heirs, the action for redemption may be instituted
against him for the whole. (1517)

Art. 1616. The vendor cannot avail himself of the right of repurchase
without returning to the vendee the price of the sale, and in addition:

(1) The expenses of the contract, and any other legitimate payments
made by reason of the sale;

(2) The necessary and useful expenses made on the thing sold. (1518)

Art. 1617. If at the time of the execution of the sale there should be on the
land, visible or growing fruits, there shall be no reimbursement for or
prorating of those existing at the time of redemption, if no indemnity was
paid by the purchaser when the sale was executed.

Should there have been no fruits at the time of the sale and some exist at the
time of redemption, they shall be prorated between the redemptioner and
the vendee, giving the latter the part corresponding to the time he
possessed the land in the last year, counted from the anniversary of the date
of the sale. (1519a)

Art. 1618. The vendor who recovers the thing sold shall receive it free from
all charges or mortgages constituted by the vendee, but he shall respect the
leases which the latter may have executed in good faith, and in accordance
with the custom of the place where the land is situated. (1520)

SECTION 2. - Legal Redemption

Art. 1619. Legal redemption is the right to be subrogated, upon the same
terms and conditions stipulated in the contract, in the place of one who
acquires a thing by purchase or dation in payment, or by any other
transaction whereby ownership is transmitted by onerous title. (1521a)

Art. 1620. A co-owner of a thing may exercise the right of redemption in

case the shares of all the other co-owners or of any of them, are sold to a
third person. If the price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption,

they may only do so in proportion to the share they may respectively have in
the thing owned in common. (1522a)

Art. 1621. The owners of adjoining lands shall also have the right of
redemption when a piece of rural land, the area of which does not exceed
one hectare, is alienated, unless the grantee does not own any rural land.

This right is not applicable to adjacent lands which are separated by brooks,
drains, ravines, roads and other apparent servitudes for the benefit of other
estates.

If two or more adjoining owners desire to exercise the right of redemption

at the same time, the owner of the adjoining land of smaller area shall be
preferred; and should both lands have the same area, the one who first
requested the redemption. (1523a)

Art. 1622. Whenever a piece of urban land which is so small and so situated
that a major portion thereof cannot be used for any practical purpose
within a reasonable time, having been bought merely for speculation, is
about to be re-sold, the owner of any adjoining land has a right of pre-
emption at a reasonable price.

If the re-sale has been perfected, the owner of the adjoining land shall have
a right of redemption, also at a reasonable price.

When two or more owners of adjoining lands wish to exercise the right of

pre-emption or redemption, the owner whose intended use of the land in

question appears best justified shall be preferred. (n)

Art. 1623. The right of legal pre-emption or redemption shall not be

exercised except within thirty days from the notice in writing by the
prospective vendor, or by the vendor, as the case may be. The deed of sale
shall not be recorded in the Registry of Property, unless accompanied by an
affidavit of the vendor that he has given written notice thereof to all
possible redemptioners.
The right of redemption of co-owners excludes that of adjoining owners.
(1524a)

CHAPTER 8
ASSIGNMENT OF CREDITS AND OTHER INCORPOREAL RIGHTS

Art. 1624. An assignment of creditors and other incorporeal rights shall be

perfected in accordance with the provisions of Article 1475. (n)

Art. 1625. An assignment of a credit, right or action shall produce no effect

as against third person, unless it appears in a public instrument, or the
instrument is recorded in the Registry of Property in case the assignment
involves real property. (1526)

Art. 1626. The debtor who, before having knowledge of the assignment,
pays his creditor shall be released from the obligation. (1527)

Art. 1627. The assignment of a credit includes all the accessory rights, such
as a guaranty, mortgage, pledge or preference. (1528)

Art. 1628. The vendor in good faith shall be responsible for the existence
and legality of the credit at the time of the sale, unless it should have been
sold as doubtful; but not for the solvency of the debtor, unless it has been so
expressly stipulated or unless the insolvency was prior to the sale and of
common knowledge.

Even in these cases he shall only be liable for the price received and for the
expenses specified in No. 1 of Article 1616.

The vendor in bad faith shall always be answerable for the payment of all
expenses, and for damages. (1529)

Art. 1629. In case the assignor in good faith should have made himself
responsible for the solvency of the debtor, and the contracting parties
should not have agreed upon the duration of the liability, it shall last for
one year only, from the time of the assignment if the period had already
expired.

If the credit should be payable within a term or period which has not yet
expired, the liability shall cease one year after the maturity. (1530a)

Art. 1630. One who sells an inheritance without enumerating the things of
which it is composed, shall only be answerable for his character as an heir.
(1531)
Art. 1631. One who sells for a lump sum the whole of certain rights, rents, or
products, shall comply by answering for the legitimacy of the whole in
general; but he shall not be obliged to warrant each of the various parts of
which it may be composed, except in the case of eviction from the whole or
the part of greater value. (1532a)

Art. 1632. Should the vendor have profited by some of the fruits or received
anything from the inheritance sold, he shall pay the vendee thereof, if the
contrary has not been stipulated. (1533)

Art. 1633. The vendee shall, on his part, reimburse the vendor for all that
the latter may have paid for the debts of and charges on the estate and
satisfy the credits he may have against the same, unless there is an
agreement to the contrary. (1534)

Art. 1634. When a credit or other incorporeal right in litigation is sold, the
debtor shall have a right to extinguish it by reimbursing the assignee for the
price the latter paid therefor, the judicial costs incurred by him, and the
interest on the price from the day on which the same was paid.

A credit or other incorporeal right shall be considered in litigation from the

time the complaint concerning the same is answered.

The debtor may exercise his right within thirty days from the date the
assignee demands payment from him. (1535)

Art. 1635. From the provisions of the preceding article shall be excepted the
assignments or sales made:

(1) To a co-heir or co-owner of the right assigned;

(2) To a creditor in payment of his credit;

(3) To the possessor of a tenement or piece of land which is subject to

the right in litigation assigned. (1536)

CHAPTER 9
GENERAL PROVISIONS

Art. 1636. In the preceding articles in this Title governing the sale of goods,
unless the context or subject matter otherwise requires:
(1) "Document of title to goods" includes any bill of lading, dock
warrant, "quedan," or warehouse receipt or order for the delivery of
goods, or any other document used in the ordinary course of business
in the sale or transfer of goods, as proof of the possession or control
of the goods, or authorizing or purporting to authorize the possessor
 of the document to transfer or receive, either by endorsement or by
delivery, goods represented by such document.

"Goods" includes all chattels personal but not things in action or

money of legal tender in the Philippines. The term includes growing
fruits or crops.

"Order" relating to documents of title means an order by

endorsement on the documents.

"Quality of goods" includes their state or condition.

"Specific goods" means goods identified and agreed upon at the time
a contract of sale is made.

An antecedent or pre-existing claim, whether for money or not,

constitutes "value" where goods or documents of title are taken either
in satisfaction thereof or as security therefor.

(2) A person is insolvent within the meaning of this Title who either
has ceased to pay his debts in the ordinary course of business or
cannot pay his debts as they become due, whether insolvency
proceedings have been commenced or not.

(3) Goods are in a "deliverable state" within the meaning of this Title
when they are in such a state that the buyer would, under the
contract, be bound to take delivery of them. (n)

Art. 1637. The provisions of this Title are subject to the rules laid down by
the Mortgage Law and the Land Registration Law with regard to immovable
property. (1537a)

Title VII. - BARTER OR EXCHANGE

Art. 1638. By the contract of barter or exchange one of the parties binds
himself to give one thing in consideration of the other's promise to give
another thing. (1538a)

Art. 1639. If one of the contracting parties, having received the thing
promised him in barter, should prove that it did not belong to the person
who gave it, he cannot be compelled to deliver that which he offered in
exchange, but he shall be entitled to damages. (1539a)

Art. 1640. One who loses by eviction the thing received in barter may
recover that which he gave in exchange with a right to damages, or he may
only demand an indemnity for damages. However, he can only make use of
the right to recover the thing which he has delivered while the same
remains in the possession of the other party, and without prejudice to the
rights acquired in good faith in the meantime by a third person. (1540a)

Art. 1641. As to all matters not specifically provided for in this Title, barter
shall be governed by the provisions of the preceding Title relating to sales.
(1541a)

Title VIII. - LEASE

CHAPTER 1
GENERAL PROVISIONS

Art. 1642. The contract of lease may be of things, or of work and service.
(1542)

Art. 1643. In the lease of things, one of the parties binds himself to give to
another the enjoyment or use of a thing for a price certain, and for a period
which may be definite or indefinite. However, no lease for more than
ninety-nine years shall be valid. (1543a)

Art. 1644. In the lease of work or service, one of the parties binds himself to
execute a piece of work or to render to the other some service for a price
certain, but the relation of principal and agent does not exist between them.
(1544a)

Art. 1645. Consumable goods cannot be the subject matter of a contract of

lease, except when they are merely to be exhibited or when they are
accessory to an industrial establishment. (1545a)

CHAPTER 2
LEASE OF RURAL AND URBAN LANDS

SECTION 1. - General Provisions

Art. 1646. The persons disqualified to buy referred to in Articles 1490 and
1491, are also disqualified to become lessees of the things mentioned
therein. (n)

Art. 1647. If a lease is to be recorded in the Registry of Property, the

following persons cannot constitute the same without proper authority: the
husband with respect to the wife's paraphernal real estate, the father or
guardian as to the property of the minor or ward, and the manager without
special power. (1548a)
Art. 1648. Every lease of real estate may be recorded in the Registry of
Property. Unless a lease is recorded, it shall not be binding upon third
persons. (1549a)

Art. 1649. The lessee cannot assign the lease without the consent of the
lessor, unless there is a stipulation to the contrary. (n)

Art. 1650. When in the contract of lease of things there is no express

prohibition, the lessee may sublet the thing leased, in whole or in part,
without prejudice to his responsibility for the performance of the contract
toward the lessor. (1550)

Art. 1651. Without prejudice to his obligation toward the sublessor, the
sublessee is bound to the lessor for all acts which refer to the use and
preservation of the thing leased in the manner stipulated between the
lessor and the lessee. (1551)

Art. 1652. The sublessee is subsidiarily liable to the lessor for any rent due
from the lessee. However, the sublessee shall not be responsible beyond the
amount of rent due from him, in accordance with the terms of the sublease,
at the time of the extrajudicial demand by the lessor.

Payments of rent in advance by the sublessee shall be deemed not to have

been made, so far as the lessor's claim is concerned, unless said payments
were effected in virtue of the custom of the place. (1552a)

Art. 1653. The provisions governing warranty, contained in the Title on

Sales, shall be applicable to the contract of lease.

In the cases where the return of the price is required, reduction shall be
made in proportion to the time during which the lessee enjoyed the thing.
(1553)

SECTION 2. - Rights and Obligations of the Lessor and the Lessee

Art. 1654. The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a
condition as to render it fit for the use intended;

(2) To make on the same during the lease all the necessary repairs in
order to keep it suitable for the use to which it has been devoted,
unless there is a stipulation to the contrary;

(3) To maintain the lessee in the peaceful and adequate enjoyment of

the lease for the entire duration of the contract. (1554a)
Art. 1655. If the thing leased is totally destroyed by a fortuitous event, the
lease is extinguished. If the destruction is partial, the lessee may choose
between a proportional reduction of the rent and a rescission of the lease.
(n)

Art. 1656. The lessor of a business or industrial establishment may continue

engaging in the same business or industry to which the lessee devotes the
thing leased, unless there is a stipulation to the contrary. (n)

Art. 1657. The lessee is obliged:

(1) To pay the price of the lease according to the terms stipulated;

(2) To use the thing leased as a diligent father of a family, devoting it

to the use stipulated; and in the absence of stipulation, to that which
may be inferred from the nature of the thing leased, according to the
custom of the place;

(3) To pay expenses for the deed of lease. (1555)

Art. 1658. The lessee may suspend the payment of the rent in case the lessor
fails to make the necessary repairs or to maintain the lessee in peaceful and
adequate enjoyment of the property leased. (n)

Art. 1659. If the lessor or the lessee should not comply with the obligations
set forth in Articles 1654 and 1657, the aggrieved party may ask for the
rescission of the contract and indemnification for damages, or only the
latter, allowing the contract to remain in force. (1556)

Art. 1660. If a dwelling place or any other building intended for human
habitation is in such a condition that its use brings imminent and serious
danger to life or health, the lessee may terminate the lease at once by
notifying the lessor, even if at the time the contract was perfected the
former knew of the dangerous condition or waived the right to rescind the
lease on account of this condition. (n)

Art. 1661. The lessor cannot alter the form of the thing leased in such a way
as to impair the use to which the thing is devoted under the terms of the
lease. (1557a)

Art. 1662. If during the lease it should become necessary to make some
urgent repairs upon the thing leased, which cannot be deferred until the
termination of the lease, the lessee is obliged to tolerate the work, although
it may be very annoying to him, and although during the same, he may be
deprived of a part of the premises.
If the repairs last more than forty days the rent shall be reduced in
proportion to the time - including the first forty days - and the part of the
property of which the lessee has been deprived.

When the work is of such a nature that the portion which the lessee and his
family need for their dwelling becomes uninhabitable, he may rescind the
contract if the main purpose of the lease is to provide a dwelling place for
the lessee. (1558a)

Art. 1663. The lessee is obliged to bring to the knowledge of the proprietor,
within the shortest possible time, every usurpation or untoward act which
any third person may have committed or may be openly preparing to carry
out upon the thing leased.

He is also obliged to advise the owner, with the same urgency, of the need of
all repairs included in No. 2 of Article 1654.

In both cases the lessee shall be liable for the damages which, through his
negligence, may be suffered by the proprietor.

If the lessor fails to make urgent repairs, the lessee, in order to avoid an
imminent danger, may order the repairs at the lessor's cost. (1559a)

Art. 1664. The lessor is not obliged to answer for a mere act of trespass
which a third person may cause on the use of the thing leased; but the lessee
shall have a direct action against the intruder.

There is a mere act of trespass when the third person claims no right
whatever. (1560a)

Art. 1665. The lessee shall return the thing leased, upon the termination of
the lease, as he received it, save what has been lost or impaired by the lapse
of time, or by ordinary wear and tear, or from an inevitable cause. (1561a)

Art. 1666. In the absence of a statement concerning the condition of the

thing at the time the lease was constituted, the law presumes that the lessee
received it in good condition, unless there is proof to the contrary. (1562)

Art. 1667. The lessee is responsible for the deterioration or loss of the thing
leased, unless he proves that it took place without his fault. This burden of
proof on the lessee does not apply when the destruction is due to
earthquake, flood, storm or other natural calamity. (1563a)

Art. 1668. The lessee is liable for any deterioration caused by members of
his household and by guests and visitors. (1564a)
Art. 1669. If the lease was made for a determinate time, it ceases upon the
day fixed, without the need of a demand. (1565)

Art. 1670. If at the end of the contract the lessee should continue enjoying
the thing leased for fifteen days with the acquiescence of the lessor, and
unless a notice to the contrary by either party has previously been given, it
is understood that there is an implied new lease, not for the period of the
original contract, but for the time established in Articles 1682 and 1687. The
other terms of the original contract shall be revived. (1566a)

Art. 1671. If the lessee continues enjoying the thing after the expiration of
the contract, over the lessor's objection, the former shall be subject to the
responsibilities of a possessor in bad faith. (n)

Art. 1672. In case of an implied new lease, the obligations contracted by a

third person for the security of the principal contract shall cease with
respect to the new lease. (1567)

Art. 1673. The lessor may judicially eject the lessee for any of the following
causes:

(1) When the period agreed upon, or that which is fixed for the
duration of leases under Articles 1682 and 1687, has expired;

(2) Lack of payment of the price stipulated;

(3) Violation of any of the conditions agreed upon in the contract;

(4) When the lessee devotes the thing leased to any use or service not
stipulated which causes the deterioration thereof; or if he does not
observe the requirement in No. 2 of Article 1657, as regards the use
thereof.

The ejectment of tenants of agricultural lands is governed by special laws.

(1569a)

Art. 1674. In ejectment cases where an appeal is taken the remedy granted
in Article 539, second paragraph, shall also apply, if the higher court is
satisfied that the lessee's appeal is frivolous or dilatory, or that the lessor's
appeal is prima facie meritorious. The period of ten days referred to in said
article shall be counted from the time the appeal is perfected. (n)

Art. 1675. Except in cases stated in Article 1673, the lessee shall have a right
to make use of the periods established in Articles 1682 and 1687. (1570)

Art. 1676. The purchaser of a piece of land which is under a lease that is not
recorded in the Registry of Property may terminate the lease, save when
there is a stipulation to the contrary in the contract of sale, or when the
purchaser knows of the existence of the lease.

If the buyer makes use of this right, the lessee may demand that he be
allowed to gather the fruits of the harvest which corresponds to the current
agricultural year and that the vendor indemnify him for damages suffered.

If the sale is fictitious, for the purpose of extinguishing the lease, the
supposed vendee cannot make use of the right granted in the first
paragraph of this article. The sale is presumed to be fictitious if at the time
the supposed vendee demands the termination of the lease, the sale is not
recorded in the Registry of Property. (1571a)

Art. 1677. The purchaser in a sale with the right of redemption cannot make
use of the power to eject the lessee until the end of the period for the
redemption. (1572)

Art. 1678. If the lessee makes, in good faith, useful improvements which are
suitable to the use for which the lease is intended, without altering the form
or substance of the property leased, the lessor upon the termination of the
lease shall pay the lessee one-half of the value of the improvements at that
time. Should the lessor refuse to reimburse said amount, the lessee may
remove the improvements, even though the principal thing may suffer
damage thereby. He shall not, however, cause any more impairment upon
the property leased than is necessary.

With regard to ornamental expenses, the lessee shall not be entitled to any
reimbursement, but he may remove the ornamental objects, provided no
damage is caused to the principal thing, and the lessor does not choose to
retain them by paying their value at the time the lease is extinguished. (n)

Art. 1679. If nothing has been stipulated concerning the place and the time
for the payment of the lease, the provisions or Article 1251 shall be observed
as regards the place; and with respect to the time, the custom of the place
shall be followed. (1574)

SECTION 3. - Special Provisions for Leases of Rural Lands

Art. 1680. The lessee shall have no right to a reduction of the rent on
account of the sterility of the land leased, or by reason of the loss of fruits
due to ordinary fortuitous events; but he shall have such right in case of the
loss of more than one-half of the fruits through extraordinary and
unforeseen fortuitous events, save always when there is a specific
stipulation to the contrary.
Extraordinary fortuitous events are understood to be: fire, war, pestilence,
unusual flood, locusts, earthquake, or others which are uncommon, and
which the contracting parties could not have reasonably foreseen. (1575)

Art. 1681. Neither does the lessee have any right to a reduction of the rent if
the fruits are lost after they have been separated from their stalk, root or
trunk. (1576)

Art. 1682. The lease of a piece of rural land, when its duration has not been
fixed, is understood to have been for all the time necessary for the
gathering of the fruits which the whole estate leased may yield in one year,
or which it may yield once, although two or more years have to elapse for
the purpose. (1577a)

Art. 1683. The outgoing lessee shall allow the incoming lessee or the lessor
the use of the premises and other means necessary for the preparatory
labor for the following year; and, reciprocally, the incoming lessee or the
lessor is under obligation to permit the outgoing lessee to do whatever may
be necessary for the gathering or harvesting and utilization of the fruits, all
in accordance with the custom of the place. (1578a)

Art. 1684. Land tenancy on shares shall be governed by special laws, the
stipulations of the parties, the provisions on partnership and by the
customs of the place. (1579a)

Art. 1685. The tenant on shares cannot be ejected except in cases specified
by law. (n)

SECTION 4. - Special Provisions of the Lease of Urban Lands

Art. 1686. In default of a special stipulation, the custom of the place shall be
observed with regard to the kind of repairs on urban property for which the
lessor shall be liable. In case of doubt it is understood that the repairs are
chargeable against him. (1580a)

Art. 1687. If the period for the lease has not been fixed, it is understood to
be from year to year, if the rent agreed upon is annual; from month to
month, if it is monthly; from week to week, if the rent is weekly; and from
day to day, if the rent is to be paid daily. However, even though a monthly
rent is paid, and no period for the lease has been set, the courts may fix a
longer term for the lease after the lessee has occupied the premises for over
one year. If the rent is weekly, the courts may likewise determine a longer
period after the lessee has been in possession for over six months. In case
of daily rent, the courts may also fix a longer period after the lessee has
stayed in the place for over one month. (1581a)
Art. 1688. When the lessor of a house, or part thereof, used as a dwelling for
a family, or when the lessor of a store, or industrial establishment, also
leases the furniture, the lease of the latter shall be deemed to be for the
duration of the lease of the premises. (1582)

CHAPTER 3
WORK AND LABOR

SECTION 1. - Household Service (n)

Art. 1689. Household service shall always be reasonably compensated. Any

stipulation that household service is without compensation shall be void.
Such compensation shall be in addition to the house helper's lodging, food,
and medical attendance.

Art. 1690. The head of the family shall furnish, free of charge, to the house
helper, suitable and sanitary quarters as well as adequate food and medical
attendance.

Art. 1691. If the house helper is under the age of eighteen years, the head of
the family shall give an opportunity to the house helper for at least
elementary education. The cost of such education shall be a part of the
house helper's compensation, unless there is a stipulation to the contrary.

Art. 1692. No contract for household service shall last for more than two
years. However, such contract may be renewed from year to year.

Art. 1693. The house helper's clothes shall be subject to stipulation.

However, any contract for household service shall be void if thereby the
house helper cannot afford to acquire suitable clothing.

Art. 1694. The head of the family shall treat the house helper in a just and
humane manner. In no case shall physical violence be used upon the house
helper.

Art. 1695. House helper shall not be required to work more than ten hours a
day. Every house helper shall be allowed four days' vacation each month,
with pay.

Art. 1696. In case of death of the house helper, the head of the family shall
bear the funeral expenses if the house helper has no relatives in the place
where the head of the family lives, with sufficient means therefor.

Art. 1697. If the period for household service is fixed neither the head of the
family nor the house helper may terminate the contract before the
expiration of the term, except for a just cause. If the house helper is
unjustly dismissed, he shall be paid the compensation already earned plus
that for fifteen days by way of indemnity. If the house helper leaves without
justifiable reason, he shall forfeit any salary due him and unpaid, for not
exceeding fifteen days.

Art. 1698. If the duration of the household service is not determined either
by stipulation or by the nature of the service, the head of the family or the
house helper may give notice to put an end to the service relation, according
to the following rules:

(1) If the compensation is paid by the day, notice may be given on any
day that the service shall end at the close of the following day;

(2) If the compensation is paid by the week, notice may be given, at

the latest on the first business day of the week, that the service shall
be terminated at the end of the seventh day from the beginning of the
week;

(3) If the compensation is paid by the month, notice may be given, at

the latest, on the fifth day of the month, that the service shall cease at
the end of the month.

Art. 1699. Upon the extinguishment of the service relation, the house helper
may demand from the head of the family a written statement on the nature
and duration of the service and the efficiency and conduct of the house
helper.

SECTION 2. - Contract of Labor (n)

Art. 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good. Therefore, such contracts are subject to the
special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar
subjects.

Art. 1701. Neither capital nor labor shall act oppressively against the other,
or impair the interest or convenience of the public.

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall
be construed in favor of the safety and decent living for the laborer.

Art. 1703. No contract which practically amounts to involuntary servitude,

under any guise whatsoever, shall be valid.

Art. 1704. In collective bargaining, the labor union or members of the board
or committee signing the contract shall be liable for non-fulfillment thereof.
Art. 1705. The laborer's wages shall be paid in legal currency.

Art. 1706. Withholding of the wages, except for a debt due, shall not be
made by the employer.

Art. 1707. The laborer's wages shall be a lien on the goods manufactured or
the work done.

Art. 1708. The laborer's wages shall not be subject to execution or

attachment, except for debts incurred for food, shelter, clothing and
medical attendance.

Art. 1709. The employer shall neither seize nor retain any tool or other
articles belonging to the laborer.

Art. 1710. Dismissal of laborers shall be subject to the supervision of the

Government, under special laws.

Art. 1711. Owners of enterprises and other employers are obliged to pay
compensation for the death of or injuries to their laborers, workmen,
mechanics or other employees, even though the event may have been purely
accidental or entirely due to a fortuitous cause, if the death or personal
injury arose out of and in the course of the employment. The employer is
also liable for compensation if the employee contracts any illness or disease
caused by such employment or as the result of the nature of the
employment. If the mishap was due to the employee's own notorious
negligence, or voluntary act, or drunkenness, the employer shall not be
liable for compensation. When the employee's lack of due care contributed
to his death or injury, the compensation shall be equitably reduced.

Art. 1712. If the death or injury is due to the negligence of a fellow worker,
the latter and the employer shall be solidarily liable for compensation. If a
fellow worker's intentional malicious act is the only cause of the death or
injury, the employer shall not be answerable, unless it should be shown that
the latter did not exercise due diligence in the selection or supervision of
the plaintiff's fellow worker.

SECTION 3. - Contract for a Piece of Work

Art. 1713. By the contract for a piece of work the contractor binds himself to
execute a piece of work for the employer, in consideration of a certain price
or compensation. The contractor may either employ only his labor or skill,
or also furnish the material. (1588a)

Art. 1714. If the contractor agrees to produce the work from material
furnished by him, he shall deliver the thing produced to the employer and
transfer dominion over the thing. This contract shall be governed by the
following articles as well as by the pertinent provisions on warranty of title
and against hidden defects and the payment of price in a contract of sale.
(n)

Art. 1715. The contract shall execute the work in such a manner that it has
the qualities agreed upon and has no defects which destroy or lessen its
value or fitness for its ordinary or stipulated use. Should the work be not of
such quality, the employer may require that the contractor remove the
defect or execute another work. If the contract fails or refuses to comply
with this obligation, the employer may have the defect removed or another
work executed, at the contractor's cost. (n)

Art. 1716. An agreement waiving or limiting the contractor's liability for any
defect in the work is void if the contractor acted fraudulently. (n)

Art. 1717. If the contractor bound himself to furnish the material, he shall
suffer the loss if the work should be destroyed before its delivery, save
when there has been delay in receiving it. (1589)

Art. 1718. The contractor who has undertaken to put only his work or skill,
cannot claim any compensation if the work should be destroyed before its
delivery, unless there has been delay in receiving it, or if the destruction
was caused by the poor quality of the material, provided this fact was
communicated in due time to the owner. If the material is lost through a
fortuitous event, the contract is extinguished. (1590a)

Art. 1719. Acceptance of the work by the employer relieves the contractor of
liability for any defect in the work, unless:

(1) The defect is hidden and the employer is not, by his special
knowledge, expected to recognize the same; or

(2) The employer expressly reserves his rights against the contractor
by reason of the defect. (n)

Art. 1720. The price or compensation shall be paid at the time and place of
delivery of the work, unless there is a stipulation to the contrary. If the
work is to be delivered partially, the price or compensation for each part
having been fixed, the sum shall be paid at the time and place of delivery, in
the absence if stipulation. (n)

Art. 1721. If, in the execution of the work, an act of the employer is required,
and he incurs in delay or fails to perform the act, the contractor is entitled
to a reasonable compensation.
The amount of the compensation is computed, on the one hand, by the
duration of the delay and the amount of the compensation stipulated, and
on the other hand, by what the contractor has saved in expenses by reason
of the delay or is able to earn by a different employment of his time and
industry. (n)

Art. 1722. If the work cannot be completed on account of a defect in the

material furnished by the employer, or because of orders from the
employer, without any fault on the part of the contractor, the latter has a
right to an equitable part of the compensation proportionally to the work
done, and reimbursement for proper expenses made. (n)

Art. 1723. The engineer or architect who drew up the plans and
specifications for a building is liable for damages if within fifteen years
from the completion of the structure, the same should collapse by reason of
a defect in those plans and specifications, or due to the defects in the
ground. The contractor is likewise responsible for the damages if the edifice
falls, within the same period, on account of defects in the construction or
the use of materials of inferior quality furnished by him, or due to any
violation of the terms of the contract. If the engineer or architect supervises
the construction, he shall be solidarily liable with the contractor.

Acceptance of the building, after completion, does not imply waiver of any
of the cause of action by reason of any defect mentioned in the preceding
paragraph.

The action must be brought within ten years following the collapse of the
building. (n)

Art. 1724. The contractor who undertakes to build a structure or any other
work for a stipulated price, in conformity with plans and specifications
agreed upon with the land-owner, can neither withdraw from the contract
nor demand an increase in the price on account of the higher cost of labor
or materials, save when there has been a change in the plans and
specifications, provided:

(1) Such change has been authorized by the proprietor in writing; and

(2) The additional price to be paid to the contractor has been

determined in writing by both parties. (1593a)

Art. 1725. The owner may withdraw at will from the construction of the
work, although it may have been commenced, indemnifying the contractor
for all the latter's expenses, work, and the usefulness which the owner may
obtain therefrom, and damages. (1594a)
Art. 1726. When a piece of work has been entrusted to a person by reason of
his personal qualifications, the contract is rescinded upon his death.

In this case the proprietor shall pay the heirs of the contractor in
proportion to the price agreed upon, the value of the part of the work done,
and of the materials prepared, provided the latter yield him some benefit.

The same rule shall apply if the contractor cannot finish the work due to
circumstances beyond his control. (1595)

Art. 1727. The contractor is responsible for the work done by persons
employed by him. (1596)

Art. 1728. The contractor is liable for all the claims of laborers and others
employed by him, and of third persons for death or physical injuries during
the construction. (n)

Art. 1729. Those who put their labor upon or furnish materials for a piece of
work undertaken by the contractor have an action against the owner up to
the amount owing from the latter to the contractor at the time the claim is
made. However, the following shall not prejudice the laborers, employees
and furnishers of materials:

(1) Payments made by the owner to the contractor before they are
due;

(2) Renunciation by the contractor of any amount due him from the
owner.

This article is subject to the provisions of special laws. (1597a)

Art. 1730. If it is agreed that the work shall be accomplished to the

satisfaction of the proprietor, it is understood that in case of disagreement
the question shall be subject to expert judgment.

If the work is subject to the approval of a third person, his decision shall be
final, except in case of fraud or manifest error. (1598a)

Art. 1731. He who has executed work upon a movable has a right to retain it
by way of pledge until he is paid. (1600)

SECTION 4. - Common Carriers (n)

SUBSECTION 1. - General Provisions

Art. 1732. Common carriers are persons, corporations, firms or

associations engaged in the business of carrying or transporting passengers
or goods or both, by land, water, or air, for compensation, offering their
services to the public.

Art. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the passengers transported
by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further

expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set forth
in Articles 1755 and 1756.

SUBSECTION 2. - Vigilance Over Goods

Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following
causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act of omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the

containers;

(5) Order or act of competent public authority.

Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of
the preceding article, if the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as
required in Article 1733.

Art. 1736. The extraordinary responsibility of the common carrier lasts

from the time the goods are unconditionally placed in the possession of,
and received by the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them, without prejudice to the provisions of
Article 1738.

Art. 1737. The common carrier's duty to observe extraordinary diligence

over the goods remains in full force and effect even when they are
temporarily unloaded or stored in transit, unless the shipper or owner has
made use of the right of stoppage in transitu.

Art. 1738. The extraordinary liability of the common carrier continues to be

operative even during the time the goods are stored in a warehouse of the
carrier at the place of destination, until the consignee has been advised of
the arrival of the goods and has had reasonable opportunity thereafter to
remove them or otherwise dispose of them.

Art. 1739. In order that the common carrier may be exempted from
responsibility, the natural disaster must have been the proximate and only
cause of the loss. However, the common carrier must exercise due diligence
to prevent or minimize loss before, during and after the occurrence of
flood, storm or other natural disaster in order that the common carrier
may be exempted from liability for the loss, destruction, or deterioration of
the goods. The same duty is incumbent upon the common carrier in case of
an act of the public enemy referred to in Article 1734, No. 2.

Art. 1740. If the common carrier negligently incurs in delay in transporting

the goods, a natural disaster shall not free such carrier from responsibility.

Art. 1741. If the shipper or owner merely contributed to the loss,

destruction or deterioration of the goods, the proximate cause thereof
being the negligence of the common carrier, the latter shall be liable in
damages, which however, shall be equitably reduced.

Art. 1742. Even if the loss, destruction, or deterioration of the goods should
be caused by the character of the goods, or the faulty nature of the packing
or of the containers, the common carrier must exercise due diligence to
forestall or lessen the loss.

Art. 1743. If through the order of public authority the goods are seized or
destroyed, the common carrier is not responsible, provided said public
authority had power to issue the order.

Art. 1744. A stipulation between the common carrier and the shipper or
owner limiting the liability of the former for the loss, destruction, or
deterioration of the goods to a degree less than extraordinary diligence
shall be valid, provided it be:

(1) In writing, signed by the shipper or owner;

(2) Supported by a valuable consideration other than the service

rendered by the common carrier; and

(3) Reasonable, just and not contrary to public policy.

Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss,
destruction, or deterioration of the goods;

(3) That the common carrier need not observe any diligence in the
custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less
than that of a good father of a family, or of a man of ordinary
prudence in the vigilance over the movables transported;

(5) That the common carrier shall not be responsible for the acts or
omission of his or its employees;

(6) That the common carrier's liability for acts committed by thieves,
or of robbers who do not act with grave or irresistible threat, violence
or force, is dispensed with or diminished;

(7) That the common carrier is not responsible for the loss,
destruction, or deterioration of goods on account of the defective
condition of the car, vehicle, ship, airplane or other equipment used
in the contract of carriage.

Art. 1746. An agreement limiting the common carrier's liability may be

annulled by the shipper or owner if the common carrier refused to carry the
goods unless the former agreed to such stipulation.

Art. 1747. If the common carrier, without just cause, delays the
transportation of the goods or changes the stipulated or usual route, the
contract limiting the common carrier's liability cannot be availed of in case
of the loss, destruction, or deterioration of the goods.

Art. 1748. An agreement limiting the common carrier's liability for delay on
account of strikes or riots is valid.

Art. 1749. A stipulation that the common carrier's liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or
owner declares a greater value, is binding.

Art. 1750. A contract fixing the sum that may be recovered. by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it
is reasonable and just under the circumstances, and has been fairly and
freely agreed upon.
Art. 1751. The fact that the common carrier has no competitor along the line
or route, or a part thereof, to which the contract refers shall be taken into
consideration on the question of whether or not a stipulation limiting the
common carrier's liability is reasonable, just and in consonance with public
policy.

Art. 1752. Even when there is an agreement limiting the liability of the
common carrier in the vigilance over the goods, the common carrier is
disputably presumed to have been negligent in case of their loss,
destruction or deterioration.

Art. 1753. The law of the country to which the goods are to be transported
shall govern the liability of the common carrier for their loss, destruction
or deterioration.

Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the
passenger's baggage which is not in his personal custody or in that of his
employee. As to other baggage, the rules in Articles 1998 and 2000 to 2003
concerning the responsibility of hotel-keepers shall be applicable.

SUBSECTION 3. - Safety of Passengers

Art. 1755. A common carrier is bound to carry the passengers safely as far
as human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances.

Art. 1756. In case of death of or injuries to passengers, common carriers are

presumed to have been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence as prescribed in Articles
1733 and 1755.

Art. 1757. The responsibility of a common carrier for the safety of

passengers as required in Articles 1733 and 1755 cannot be dispensed with
or lessened by stipulation, by the posting of notices, by statements on
tickets, or otherwise.

Art. 1758. When a passenger is carried gratuitously, a stipulation limiting

the common carrier's liability for negligence is valid, but not for wilful acts
or gross negligence.

The reduction of fare does not justify any limitation of the common
carrier's liability.

Art. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or wilful acts of the former's employees,
although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and
supervision of their employees.

Art. 1760. The common carrier's responsibility prescribed in the preceding

article cannot be eliminated or limited by stipulation, by the posting of
notices, by statements on the tickets or otherwise.

Art. 1761. The passenger must observe the diligence of a good father of a
family to avoid injury to himself.

Art. 1762. The contributory negligence of the passenger does not bar
recovery of damages for his death or injuries, if the proximate cause thereof
is the negligence of the common carrier, but the amount of damages shall
be equitably reduced.

Art. 1763. A common carrier is responsible for injuries suffered by a

passenger on account of the wilful acts or negligence of other passengers or
of strangers, if the common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the
act or omission.

SUBSECTION 4. - Common Provisions

Art. 1764. Damages in cases comprised in this Section shall be awarded in

accordance with Title XVIII of this Book, concerning Damages. Article 2206
shall also apply to the death of a passenger caused by the breach of contract
by a common carrier.

Art. 1765. The Public Service Commission may, on its own motion or on
petition of any interested party, after due hearing, cancel the certificate of
public convenience granted to any common carrier that repeatedly fails to
comply with his or its duty to observe extraordinary diligence as prescribed
in this Section.

Art. 1766. In all matters not regulated by this Code, the rights and
obligations of common carriers shall be governed by the Code of Commerce
and by special laws.

Title IX. - PARTNERSHIP

CHAPTER 1
 GENERAL PROVISIONS

Art. 1767. By the contract of partnership two or more persons bind

themselves to contribute money, property, or industry to a common fund,
with the intention of dividing the profits among themselves.

Two or more persons may also form a partnership for the exercise of a
profession. (1665a)

Art. 1768. The partnership has a judicial personality separate and distinct
from that of each of the partners, even in case of failure to comply with the
requirements of Article 1772, first paragraph. (n)

Art. 1769. In determining whether a partnership exists, these rules shall

apply:

(1) Except as provided by Article 1825, persons who are not partners
as to each other are not partners as to third persons;

(2) Co-ownership or co-possession does not of itself establish a

partnership, whether such-co-owners or co-possessors do or do not
share any profits made by the use of the property;

(3) The sharing of gross returns does not of itself establish a

partnership, whether or not the persons sharing them have a joint or
common right or interest in any property from which the returns are
derived;

(4) The receipt by a person of a share of the profits of a business is

prima facie evidence that he is a partner in the business, but no such
inference shall be drawn if such profits were received in payment:

(a) As a debt by installments or otherwise;

(b) As wages of an employee or rent to a landlord;

(c) As an annuity to a widow or representative of a deceased

partner;

(d) As interest on a loan, though the amount of payment vary

with the profits of the business;

(e) As the consideration for the sale of a goodwill of a business

or other property by installments or otherwise. (n)
Art. 1770. A partnership must have a lawful object or purpose, and must be
established for the common benefit or interest of the partners.

When an unlawful partnership is dissolved by a judicial decree, the profits

shall be confiscated in favor of the State, without prejudice to the
provisions of the Penal Code governing the confiscation of the instruments
and effects of a crime. (1666a)

Art. 1771. A partnership may be constituted in any form, except where

immovable property or real rights are contributed thereto, in which case a
public instrument shall be necessary. (1667a)

Art. 1772. Every contract of partnership having a capital of three thousand

pesos or more, in money or property, shall appear in a public instrument,
which must be recorded in the Office of the Securities and Exchange
Commission.

Failure to comply with the requirements of the preceding paragraph shall

not affect the liability of the partnership and the members thereof to third
persons. (n)

Art. 1773. A contract of partnership is void, whenever immovable property

is contributed thereto, if an inventory of said property is not made, signed
by the parties, and attached to the public instrument. (1668a)

Art. 1774. Any immovable property or an interest therein may be acquired

in the partnership name. Title so acquired can be conveyed only in the
partnership name. (n)

Art. 1775. Associations and societies, whose articles are kept secret among
the members, and wherein any one of the members may contract in his own
name with third persons, shall have no juridical personality, and shall be
governed by the provisions relating to co-ownership. (1669)

Art. 1776. As to its object, a partnership is either universal or particular. As

regards the liability of the partners, a partnership may be general or
limited. (1671a)

Art. 1777. A universal partnership may refer to all the present property or to
all the profits. (1672)

Art. 1778. A partnership of all present property is that in which the partners
contribute all the property which actually belongs to them to a common
fund, with the intention of dividing the same among themselves, as well as
all the profits which they may acquire therewith. (1673)
Art. 1779. In a universal partnership of all present property, the property
which belongs to each of the partners at the time of the constitution of the
partnership, becomes the common property of all the partners, as well as
all the profits which they may acquire therewith.

A stipulation for the common enjoyment of any other profits may also be
made; but the property which the partners may acquire subsequently by
inheritance, legacy, or donation cannot be included in such stipulation,
except the fruits thereof. (1674a)

Art. 1780. A universal partnership of profits comprises all that the partners
may acquire by their industry or work during the existence of the
partnership.

Movable or immovable property which each of the partners may possess at

the time of the celebration of the contract shall continue to pertain
exclusively to each, only the usufruct passing to the partnership. (1675)

Art. 1781. Articles of universal partnership, entered into without

specification of its nature, only constitute a universal partnership of profits.
(1676)

Art. 1782. Persons who are prohibited from giving each other any donation
or advantage cannot enter into universal partnership. (1677)

Art. 1783. A particular partnership has for its object determinate things,
their use or fruits, or specific undertaking, or the exercise of a profession or
vocation. (1678)

CHAPTER 2
OBLIGATIONS OF THE PARTNERS

SECTION 1. - Obligations of the Partners Among Themselves

Art. 1784. A partnership begins from the moment of the execution of the
contract, unless it is otherwise stipulated. (1679)

Art. 1785. When a partnership for a fixed term or particular undertaking is

continued after the termination of such term or particular undertaking
without any express agreement, the rights and duties of the partners
remain the same as they were at such termination, so far as is consistent
with a partnership at will.

A continuation of the business by the partners or such of them as habitually

acted therein during the term, without any settlement or liquidation of the
partnership affairs, is prima facie evidence of a continuation of the
partnership. (n)

Art. 1786. Every partner is a debtor of the partnership for whatever he may
have promised to contribute thereto.

He shall also be bound for warranty in case of eviction with regard to

specific and determinate things which he may have contributed to the
partnership, in the same cases and in the same manner as the vendor is
bound with respect to the vendee. He shall also be liable for the fruits
thereof from the time they should have been delivered, without the need of
any demand. (1681a)

Art. 1787. When the capital or a part thereof which a partner is bound to
contribute consists of goods, their appraisal must be made in the manner
prescribed in the contract of partnership, and in the absence of stipulation,
it shall be made by experts chosen by the partners, and according to current
prices, the subsequent changes thereof being for account of the
partnership. (n)

Art. 1788. A partner who has undertaken to contribute a sum of money and
fails to do so becomes a debtor for the interest and damages from the time
he should have complied with his obligation.

The same rule applies to any amount he may have taken from the
partnership coffers, and his liability shall begin from the time he converted
the amount to his own use. (1682)

Art. 1789. An industrial partner cannot engage in business for himself,

unless the partnership expressly permits him to do so; and if he should do
so, the capitalist partners may either exclude him from the firm or avail
themselves of the benefits which he may have obtained in violation of this
provision, with a right to damages in either case. (n)

Art. 1790. Unless there is a stipulation to the contrary, the partners shall
contribute equal shares to the capital of the partnership. (n)

Art. 1791. If there is no agreement to the contrary, in case of an imminent

loss of the business of the partnership, any partner who refuses to
contribute an additional share to the capital, except an industrial partner,
to save the venture, shall he obliged to sell his interest to the other partners.
(n)

Art. 1792. If a partner authorized to manage collects a demandable sum

which was owed to him in his own name, from a person who owed the
partnership another sum also demandable, the sum thus collected shall be
applied to the two credits in proportion to their amounts, even though he
may have given a receipt for his own credit only; but should he have given it
for the account of the partnership credit, the amount shall be fully applied
to the latter.

The provisions of this article are understood to be without prejudice to the

right granted to the other debtor by Article 1252, but only if the personal
credit of the partner should be more onerous to him. (1684)

Art. 1793. A partner who has received, in whole or in part, his share of a
partnership credit, when the other partners have not collected theirs, shall
be obliged, if the debtor should thereafter become insolvent, to bring to the
partnership capital what he received even though he may have given receipt
for his share only. (1685a)

Art. 1794. Every partner is responsible to the partnership for damages

suffered by it through his fault, and he cannot compensate them with the
profits and benefits which he may have earned for the partnership by his
industry. However, the courts may equitably lessen this responsibility if
through the partner's extraordinary efforts in other activities of the
partnership, unusual profits have been realized. (1686a)

Art. 1795. The risk of specific and determinate things, which are not
fungible, contributed to the partnership so that only their use and fruits
may be for the common benefit, shall be borne by the partner who owns
them.

If the things contribute are fungible, or cannot be kept without

deteriorating, or if they were contributed to be sold, the risk shall be borne
by the partnership. In the absence of stipulation, the risk of the things
brought and appraised in the inventory, shall also be borne by the
partnership, and in such case the claim shall be limited to the value at
which they were appraised. (1687)

Art. 1796. The partnership shall be responsible to every partner for the
amounts he may have disbursed on behalf of the partnership and for the
corresponding interest, from the time the expense are made; it shall also
answer to each partner for the obligations he may have contracted in good
faith in the interest of the partnership business, and for risks in
consequence of its management. (1688a)

Art. 1797. The losses and profits shall be distributed in conformity with the
agreement. If only the share of each partner in the profits has been agreed
upon, the share of each in the losses shall be in the same proportion.

In the absence of stipulation, the share of each partner in the profits and
losses shall be in proportion to what he may have contributed, but the
industrial partner shall not be liable for the losses. As for the profits, the
industrial partner shall receive such share as may be just and equitable
under the circumstances. If besides his services he has contributed capital,
he shall also receive a share in the profits in proportion to his capital.
(1689a)

Art. 1798. If the partners have agreed to intrust to a third person the
designation of the share of each one in the profits and losses, such
designation may be impugned only when it is manifestly inequitable. In no
case may a partner who has begun to execute the decision of the third
person, or who has not impugned the same within a period of three months
from the time he had knowledge thereof, complain of such decision.

The designation of losses and profits cannot be intrusted to one of the

partners. (1690)

Art. 1799. A stipulation which excludes one or more partners from any
share in the profits or losses is void. (1691)

Art. 1800. The partner who has been appointed manager in the articles of
partnership may execute all acts of administration despite the opposition of
his partners, unless he should act in bad faith; and his power is irrevocable
without just or lawful cause. The vote of the partners representing the
controlling interest shall be necessary for such revocation of power.

A power granted after the partnership has been constituted may be revoked
at any time. (1692a)

Art. 1801. If two or more partners have been intrusted with the
management of the partnership without specification of their respective
duties, or without a stipulation that one of them shall not act without the
consent of all the others, each one may separately execute all acts of
administration, but if any of them should oppose the acts of the others, the
decision of the majority shall prevail. In case of a tie, the matter shall be
decided by the partners owning the controlling interest. (1693a)

Art. 1802. In case it should have been stipulated that none of the managing
partners shall act without the consent of the others, the concurrence of all
shall be necessary for the validity of the acts, and the absence or disability
of any one of them cannot be alleged, unless there is imminent danger of
grave or irreparable injury to the partnership. (1694)

Art. 1803. When the manner of management has not been agreed upon, the
following rules shall be observed:

(1) All the partners shall be considered agents and whatever any one
of them may do alone shall bind the partnership, without prejudice to
the provisions of Article 1801.
 (2) None of the partners may, without the consent of the others, make
any important alteration in the immovable property of the
partnership, even if it may be useful to the partnership. But if the
refusal of consent by the other partners is manifestly prejudicial to
the interest of the partnership, the court's intervention may be
sought. (1695a)

Art. 1804. Every partner may associate another person with him in his
share, but the associate shall not be admitted into the partnership without
the consent of all the other partners, even if the partner having an associate
should be a manager. (1696)

Art. 1805. The partnership books shall be kept, subject to any agreement
between the partners, at the principal place of business of the partnership,
and every partner shall at any reasonable hour have access to and may
inspect and copy any of them. (n)

Art. 1806. Partners shall render on demand true and full information of all
things affecting the partnership to any partner or the legal representative of
any deceased partner or of any partner under legal disability. (n)

Art. 1807. Every partner must account to the partnership for any benefit,
and hold as trustee for it any profits derived by him without the consent of
the other partners from any transaction connected with the formation,
conduct, or liquidation of the partnership or from any use by him of its
property. (n)

Art. 1808. The capitalist partners cannot engage for their own account in
any operation which is of the kind of business in which the partnership is
engaged, unless there is a stipulation to the contrary.

Any capitalist partner violating this prohibition shall bring to the common
funds any profits accruing to him from his transactions, and shall
personally bear all the losses. (n)

Art. 1809. Any partner shall have the right to a formal account as to
partnership affairs:

(1) If he is wrongfully excluded from the partnership business or

possession of its property by his co-partners;

(2) If the right exists under the terms of any agreement;

(3) As provided by article 1807;

(4) Whenever other circumstances render it just and reasonable. (n)

 SECTION 2. - Property Rights of a Partner

Art. 1810. The property rights of a partner are:

(1) His rights in specific partnership property;

(2) His interest in the partnership; and

(3) His right to participate in the management. (n)

Art. 1811. A partner is co-owner with his partners of specific partnership

property.

The incidents of this co-ownership are such that:

(1) A partner, subject to the provisions of this Title and to any

agreement between the partners, has an equal right with his partners
to possess specific partnership property for partnership purposes;
but he has no right to possess such property for any other purpose
without the consent of his partners;

(2) A partner's right in specific partnership property is not assignable

except in connection with the assignment of rights of all the partners
in the same property;

(3) A partner's right in specific partnership property is not subject to

attachment or execution, except on a claim against the partnership.
When partnership property is attached for a partnership debt the
partners, or any of them, or the representatives of a deceased
partner, cannot claim any right under the homestead or exemption
laws;

(4) A partner's right in specific partnership property is not subject to

legal support under Article 291. (n)

Art. 1812. A partner's interest in the partnership is his share of the profits
and surplus. (n)

Art. 1813. A conveyance by a partner of his whole interest in the partnership

does not of itself dissolve the partnership, or, as against the other partners
in the absence of agreement, entitle the assignee, during the continuance of
the partnership, to interfere in the management or administration of the
partnership business or affairs, or to require any information or account of
partnership transactions, or to inspect the partnership books; but it merely
entitles the assignee to receive in accordance with his contract the profits to
which the assigning partner would otherwise be entitled. However, in case
of fraud in the management of the partnership, the assignee may avail
himself of the usual remedies.
In case of a dissolution of the partnership, the assignee is entitled to receive
his assignor's interest and may require an account from the date only of the
last account agreed to by all the partners. (n)

Art. 1814. Without prejudice to the preferred rights of partnership creditors

under Article 1827, on due application to a competent court by any
judgment creditor of a partner, the court which entered the judgment, or
any other court, may charge the interest of the debtor partner with payment
of the unsatisfied amount of such judgment debt with interest thereon; and
may then or later appoint a receiver of his share of the profits, and of any
other money due or to fall due to him in respect of the partnership, and
make all other orders, directions, accounts and inquiries which the debtor
partner might have made, or which the circumstances of the case may
require.

The interest charged may be redeemed at any time before foreclosure, or in

case of a sale being directed by the court, may be purchased without thereby
causing a dissolution:

(1) With separate property, by any one or more of the partners; or

(2) With partnership property, by any one or more of the partners

with the consent of all the partners whose interests are not so charged
or sold.

Nothing in this Title shall be held to deprive a partner of his right, if any,
under the exemption laws, as regards his interest in the partnership. (n)

SECTION 3. - Obligations of the Partners

With Regard to Third Persons

Art. 1815. Every partnership shall operate under a firm name, which may or
may not include the name of one or more of the partners.

Those who, not being members of the partnership, include their names in
the firm name, shall be subject to the liability of a partner. (n)

Art. 1816. All partners, including industrial ones, shall be liable pro rata
with all their property and after all the partnership assets have been
exhausted, for the contracts which may be entered into in the name and for
the account of the partnership, under its signature and by a person
authorized to act for the partnership. However, any partner may enter into
a separate obligation to perform a partnership contract. (n)

Art. 1817. Any stipulation against the liability laid down in the preceding
article shall be void, except as among the partners. (n)
Art. 1818. Every partner is an agent of the partnership for the purpose of its
business, and the act of every partner, including the execution in the
partnership name of any instrument, for apparently carrying on in the
usual way the business of the partnership of which he is a member binds
the partnership, unless the partner so acting has in fact no authority to act
for the partnership in the particular matter, and the person with whom he
is dealing has knowledge of the fact that he has no such authority.

An act of a partner which is not apparently for the carrying on of business

of the partnership in the usual way does not bind the partnership unless
authorized by the other partners.

Except when authorized by the other partners or unless they have

abandoned the business, one or more but less than all the partners have no
authority to:

(1) Assign the partnership property in trust for creditors or on the

assignee's promise to pay the debts of the partnership;

(2) Dispose of the good-will of the business;

(3) Do any other act which would make it impossible to carry on the
ordinary business of a partnership;

(4) Confess a judgment;

(5) Enter into a compromise concerning a partnership claim or

liability;

(6) Submit a partnership claim or liability to arbitration;

(7) Renounce a claim of the partnership.

No act of a partner in contravention of a restriction on authority shall bind

the partnership to persons having knowledge of the restriction. (n)

Art. 1819. Where title to real property is in the partnership name, any
partner may convey title to such property by a conveyance executed in the
partnership name; but the partnership may recover such property unless
the partner's act binds the partnership under the provisions of the first
paragraph of article 1818, or unless such property has been conveyed by the
grantee or a person claiming through such grantee to a holder for value
without knowledge that the partner, in making the conveyance, has
exceeded his authority.

Where title to real property is in the name of the partnership, a conveyance

executed by a partner, in his own name, passes the equitable interest of the
partnership, provided the act is one within the authority of the partner
under the provisions of the first paragraph of Article 1818.

Where title to real property is in the name of one or more but not all the
partners, and the record does not disclose the right of the partnership, the
partners in whose name the title stands may convey title to such property,
but the partnership may recover such property if the partners' act does not
bind the partnership under the provisions of the first paragraph of Article
1818, unless the purchaser or his assignee, is a holder for value, without
knowledge.

Where the title to real property is in the name of one or more or all the
partners, or in a third person in trust for the partnership, a conveyance
executed by a partner in the partnership name, or in his own name, passes
the equitable interest of the partnership, provided the act is one within the
authority of the partner under the provisions of the first paragraph of
Article 1818.

Where the title to real property is in the name of all the partners a
conveyance executed by all the partners passes all their rights in such
property. (n)

Art. 1820. An admission or representation made by any partner concerning

partnership affairs within the scope of his authority in accordance with this
Title is evidence against the partnership. (n)

Art. 1821. Notice to any partner of any matter relating to partnership

affairs, and the knowledge of the partner acting in the particular matter,
acquired while a partner or then present to his mind, and the knowledge of
any other partner who reasonably could and should have communicated it
to the acting partner, operate as notice to or knowledge of the partnership,
except in the case of fraud on the partnership, committed by or with the
consent of that partner. (n)

Art. 1822. Where, by any wrongful act or omission of any partner acting in
the ordinary course of the business of the partnership or with the authority
of co-partners, loss or injury is caused to any person, not being a partner in
the partnership, or any penalty is incurred, the partnership is liable
therefor to the same extent as the partner so acting or omitting to act. (n)

Art. 1823. The partnership is bound to make good the loss:

(1) Where one partner acting within the scope of his apparent
authority receives money or property of a third person and
misapplies it; and
 (2) Where the partnership in the course of its business receives
money or property of a third person and the money or property so
received is misapplied by any partner while it is in the custody of the
partnership. (n)

Art. 1824. All partners are liable solidarily with the partnership for
everything chargeable to the partnership under Articles 1822 and 1823. (n)

Art. 1825. When a person, by words spoken or written or by conduct,

represents himself, or consents to another representing him to anyone, as a
partner in an existing partnership or with one or more persons not actual
partners, he is liable to any such persons to whom such representation has
been made, who has, on the faith of such representation, given credit to the
actual or apparent partnership, and if he has made such representation or
consented to its being made in a public manner he is liable to such person,
whether the representation has or has not been made or communicated to
such person so giving credit by or with the knowledge of the apparent
partner making the representation or consenting to its being made:

(1) When a partnership liability results, he is liable as though he were

an actual member of the partnership;

(2) When no partnership liability results, he is liable pro rata with the
other persons, if any, so consenting to the contract or representation
as to incur liability, otherwise separately.

When a person has been thus represented to be a partner in an existing

partnership, or with one or more persons not actual partners, he is an
agent of the persons consenting to such representation to bind them to the
same extent and in the same manner as though he were a partner in fact,
with respect to persons who rely upon the representation. When all the
members of the existing partnership consent to the representation, a
partnership act or obligation results; but in all other cases it is the joint act
or obligation of the person acting and the persons consenting to the
representation. (n)

Art. 1826. A person admitted as a partner into an existing partnership is

liable for all the obligations of the partnership arising before his admission
as though he had been a partner when such obligations were incurred,
except that this liability shall be satisfied only out of partnership property,
unless there is a stipulation to the contrary. (n)

Art. 1827. The creditors of the partnership shall be preferred to those of

each partner as regards the partnership property. Without prejudice to this
right, the private creditors of each partner may ask the attachment and
public sale of the share of the latter in the partnership assets. (n)
 CHAPTER 3
DISSOLUTION AND WINDING UP

Art. 1828. The dissolution of a partnership is the change in the relation of

the partners caused by any partner ceasing to be associated in the carrying
on as distinguished from the winding up of the business. (n)

Art. 1829. On dissolution the partnership is not terminated, but continues

until the winding up of partnership affairs is completed. (n)

Art. 1830. Dissolution is caused:

(1) Without violation of the agreement between the partners:

(a) By the termination of the definite term or particular
undertaking specified in the agreement;

(b) By the express will of any partner, who must act in good
faith, when no definite term or particular is specified;

(c) By the express will of all the partners who have not assigned
their interests or suffered them to be charged for their separate
debts, either before or after the termination of any specified
term or particular undertaking;

(d) By the expulsion of any partner from the business bona fide
in accordance with such a power conferred by the agreement
between the partners;

(2) In contravention of the agreement between the partners, where

the circumstances do not permit a dissolution under any other
provision of this article, by the express will of any partner at any time;

(3) By any event which makes it unlawful for the business of the
partnership to be carried on or for the members to carry it on in
partnership;

(4) When a specific thing which a partner had promised to contribute

to the partnership, perishes before the delivery; in any case by the
loss of the thing, when the partner who contributed it having reserved
the ownership thereof, has only transferred to the partnership the use
or enjoyment of the same; but the partnership shall not be dissolved
by the loss of the thing when it occurs after the partnership has
acquired the ownership thereof;

(5) By the death of any partner;

 (6) By the insolvency of any partner or of the partnership;

(7) By the civil interdiction of any partner;

(8) By decree of court under the following article. (1700a and 1701a)

Art. 1831. On application by or for a partner the court shall decree a

dissolution whenever:
(1) A partner has been declared insane in any judicial proceeding or is
shown to be of unsound mind;

(2) A partner becomes in any other way incapable of performing his

part of the partnership contract;

(3) A partner has been guilty of such conduct as tends to affect

prejudicially the carrying on of the business;

(4) A partner wilfully or persistently commits a breach of the

partnership agreement, or otherwise so conducts himself in matters
relating to the partnership business that it is not reasonably
practicable to carry on the business in partnership with him;

(5) The business of the partnership can only be carried on at a loss;

(6) Other circumstances render a dissolution equitable.

On the application of the purchaser of a partner's interest under Article

1813 or 1814:
(1) After the termination of the specified term or particular
undertaking;

(2) At any time if the partnership was a partnership at will when the
interest was assigned or when the charging order was issued. (n)

Art. 1832. Except so far as may be necessary to wind up partnership affairs

or to complete transactions begun but not then finished, dissolution
terminates all authority of any partner to act for the partnership:
(1) With respect to the partners:
(a) When the dissolution is not by the act, insolvency or death of
a partner; or

(b) When the dissolution is by such act, insolvency or death of a

partner, in cases where article 1833 so requires;

(2) With respect to persons not partners, as declared in article 1834.

(n)
Art. 1833. Where the dissolution is caused by the act, death or insolvency of
a partner, each partner is liable to his co-partners for his share of any
liability created by any partner acting for the partnership as if the
partnership had not been dissolved unless:
(1) The dissolution being by act of any partner, the partner acting for
the partnership had knowledge of the dissolution; or

(2) The dissolution being by the death or insolvency of a partner, the

partner acting for the partnership had knowledge or notice of the
death or insolvency.

Art. 1834. After dissolution, a partner can bind the partnership, except as
provided in the third paragraph of this article:
(1) By any act appropriate for winding up partnership affairs or
completing transactions unfinished at dissolution;

(2) By any transaction which would bind the partnership if

dissolution had not taken place, provided the other party to the
transaction:

(a) Had extended credit to the partnership prior to dissolution

and had no knowledge or notice of the dissolution; or

(b) Though he had not so extended credit, had nevertheless

known of the partnership prior to dissolution, and, having no
knowledge or notice of dissolution, the fact of dissolution had
not been advertised in a newspaper of general circulation in the
place (or in each place if more than one) at which the
partnership business was regularly carried on.

The liability of a partner under the first paragraph, No. 2, shall be satisfied
out of partnership assets alone when such partner had been prior to
dissolution:
(1) Unknown as a partner to the person with whom the contract is
made; and

(2) So far unknown and inactive in partnership affairs that the

business reputation of the partnership could not be said to have been
in any degree due to his connection with it.

The partnership is in no case bound by any act of a partner after

dissolution:
(1) Where the partnership is dissolved because it is unlawful to carry
on the business, unless the act is appropriate for winding up
partnership affairs; or

(2) Where the partner has become insolvent; or

 (3) Where the partner has no authority to wind up partnership
affairs; except by a transaction with one who:

(a) Had extended credit to the partnership prior to dissolution

and had no knowledge or notice of his want of authority; or

(b) Had not extended credit to the partnership prior to

dissolution, and, having no knowledge or notice of his want of
authority, the fact of his want of authority has not been
advertised in the manner provided for advertising the fact of
dissolution in the first paragraph, No. 2 (b).

Nothing in this article shall affect the liability under Article 1825 of any
person who, after dissolution, represents himself or consents to another
representing him as a partner in a partnership engaged in carrying
business. (n)

Art. 1835. The dissolution of the partnership does not of itself discharge the
existing liability of any partner.

A partner is discharged from any existing liability upon dissolution of the

partnership by an agreement to that effect between himself, the partnership
creditor and the person or partnership continuing the business; and such
agreement may be inferred from the course of dealing between the creditor
having knowledge of the dissolution and the person or partnership
continuing the business.

The individual property of a deceased partner shall be liable for all

obligations of the partnership incurred while he was a partner, but subject
to the prior payment of his separate debts. (n)

Art. 1836. Unless otherwise agreed, the partners who have not wrongfully
dissolved the partnership or the legal representative of the last surviving
partner, not insolvent, has the right to wind up the partnership affairs,
provided, however, that any partner, his legal representative or his
assignee, upon cause shown, may obtain winding up by the court. (n)

Art. 1837. When dissolution is caused in any way, except in contravention of

the partnership agreement, each partner, as against his co-partners and all
persons claiming through them in respect of their interests in the
partnership, unless otherwise agreed, may have the partnership property
applied to discharge its liabilities, and the surplus applied to pay in cash the
net amount owing to the respective partners. But if dissolution is caused by
expulsion of a partner, bona fide under the partnership agreement and if
the expelled partner is discharged from all partnership liabilities, either by
payment or agreement under the second paragraph of Article 1835, he shall
receive in cash only the net amount due him from the partnership.
When dissolution is caused in contravention of the partnership agreement
the rights of the partners shall be as follows:

(1) Each partner who has not caused dissolution wrongfully shall
have:

(a) All the rights specified in the first paragraph of this article,
and

(b) The right, as against each partner who has caused the
dissolution wrongfully, to damages breach of the agreement.

(2) The partners who have not caused the dissolution wrongfully, if
they all desire to continue the business in the same name either by
themselves or jointly with others, may do so, during the agreed term
for the partnership and for that purpose may possess the partnership
property, provided they secure the payment by bond approved by the
court, or pay any partner who has caused the dissolution wrongfully,
the value of his interest in the partnership at the dissolution, less any
damages recoverable under the second paragraph, No. 1 (b) of this
article, and in like manner indemnify him against all present or
future partnership liabilities.

(3) A partner who has caused the dissolution wrongfully shall have:

(a) If the business is not continued under the provisions of the

second paragraph, No. 2, all the rights of a partner under the
first paragraph, subject to liability for damages in the second
paragraph, No. 1 (b), of this article.

(b) If the business is continued under the second paragraph,

No. 2, of this article, the right as against his co-partners and all
claiming through them in respect of their interests in the
partnership, to have the value of his interest in the partnership,
less any damage caused to his co-partners by the dissolution,
ascertained and paid to him in cash, or the payment secured by
a bond approved by the court, and to be released from all
existing liabilities of the partnership; but in ascertaining the
value of the partner's interest the value of the good-will of the
business shall not be considered. (n)

Art. 1838. Where a partnership contract is rescinded on the ground of the

fraud or misrepresentation of one of the parties thereto, the party entitled
to rescind is, without prejudice to any other right, entitled:
(1) To a lien on, or right of retention of, the surplus of the partnership
property after satisfying the partnership liabilities to third persons
 for any sum of money paid by him for the purchase of an interest in
the partnership and for any capital or advances contributed by him;

(2) To stand, after all liabilities to third persons have been satisfied,
in the place of the creditors of the partnership for any payments made
by him in respect of the partnership liabilities; and

(3) To be indemnified by the person guilty of the fraud or making the

representation against all debts and liabilities of the partnership. (n)

Art. 1839. In settling accounts between the partners after dissolution, the
following rules shall be observed, subject to any agreement to the contrary:
(1) The assets of the partnership are:

(a) The partnership property,

(b) The contributions of the partners necessary for the payment

of all the liabilities specified in No. 2.

(2) The liabilities of the partnership shall rank in order of payment, as

follows:

(a) Those owing to creditors other than partners,

(b) Those owing to partners other than for capital and profits,

(c) Those owing to partners in respect of capital,

(d) Those owing to partners in respect of profits.

(3) The assets shall be applied in the order of their declaration in No.
1 of this article to the satisfaction of the liabilities.

(4) The partners shall contribute, as provided by article 1797, the

amount necessary to satisfy the liabilities.

(5) An assignee for the benefit of creditors or any person appointed by

the court shall have the right to enforce the contributions specified in
the preceding number.

(6) Any partner or his legal representative shall have the right to
enforce the contributions specified in No. 4, to the extent of the
amount which he has paid in excess of his share of the liability.

(7) The individual property of a deceased partner shall be liable for

the contributions specified in No. 4.
 (8) When partnership property and the individual properties of the
partners are in possession of a court for distribution, partnership
creditors shall have priority on partnership property and separate
creditors on individual property, saving the rights of lien or secured
creditors.

(9) Where a partner has become insolvent or his estate is insolvent,

the claims against his separate property shall rank in the following
order:

(a) Those owing to separate creditors;

(b) Those owing to partnership creditors;

(c) Those owing to partners by way of contribution. (n)

Art. 1840. In the following cases creditors of the dissolved partnership are
also creditors of the person or partnership continuing the business:
(1) When any new partner is admitted into an existing partnership, or
when any partner retires and assigns (or the representative of the
deceased partner assigns) his rights in partnership property to two or
more of the partners, or to one or more of the partners and one or
more third persons, if the business is continued without liquidation
of the partnership affairs;

(2) When all but one partner retire and assign (or the representative
of a deceased partner assigns) their rights in partnership property to
the remaining partner, who continues the business without
liquidation of partnership affairs, either alone or with others;

(3) When any partner retires or dies and the business of the dissolved
partnership is continued as set forth in Nos. 1 and 2 of this article,
with the consent of the retired partners or the representative of the
deceased partner, but without any assignment of his right in
partnership property;

(4) When all the partners or their representatives assign their rights
in partnership property to one or more third persons who promise to
pay the debts and who continue the business of the dissolved
partnership;

(5) When any partner wrongfully causes a dissolution and the

remaining partners continue the business under the provisions of
article 1837, second paragraph, No. 2, either alone or with others, and
without liquidation of the partnership affairs;
 (6) When a partner is expelled and the remaining partners continue
the business either alone or with others without liquidation of the
partnership affairs.

The liability of a third person becoming a partner in the partnership

continuing the business, under this article, to the creditors of the dissolved
partnership shall be satisfied out of the partnership property only, unless
there is a stipulation to the contrary.

When the business of a partnership after dissolution is continued under

any conditions set forth in this article the creditors of the dissolved
partnership, as against the separate creditors of the retiring or deceased
partner or the representative of the deceased partner, have a prior right to
any claim of the retired partner or the representative of the deceased
partner against the person or partnership continuing the business, on
account of the retired or deceased partner's interest in the dissolved
partnership or on account of any consideration promised for such interest
or for his right in partnership property.

Nothing in this article shall be held to modify any right of creditors to set
aside any assignment on the ground of fraud.

The use by the person or partnership continuing the business of the

partnership name, or the name of a deceased partner as part thereof, shall
not of itself make the individual property of the deceased partner liable for
any debts contracted by such person or partnership. (n)

Art. 1841. When any partner retires or dies, and the business is continued
under any of the conditions set forth in the preceding article, or in Article
1837, second paragraph, No. 2, without any settlement of accounts as
between him or his estate and the person or partnership continuing the
business, unless otherwise agreed, he or his legal representative as against
such person or partnership may have the value of his interest at the date of
dissolution ascertained, and shall receive as an ordinary creditor an
amount equal to the value of his interest in the dissolved partnership with
interest, or, at his option or at the option of his legal representative, in lieu
of interest, the profits attributable to the use of his right in the property of
the dissolved partnership; provided that the creditors of the dissolved
partnership as against the separate creditors, or the representative of the
retired or deceased partner, shall have priority on any claim arising under
this article, as provided Article 1840, third paragraph. (n)

Art. 1842. The right to an account of his interest shall accrue to any partner,
or his legal representative as against the winding up partners or the
surviving partners or the person or partnership continuing the business, at
the date of dissolution, in the absence of any agreement to the contrary. (n)
 CHAPTER 4
LIMITED PARTNERSHIP (n)

Art. 1843. A limited partnership is one formed by two or more persons

under the provisions of the following article, having as members one or
more general partners and one or more limited partners. The limited
partners as such shall not be bound by the obligations of the partnership.

Art. 1844. Two or more persons desiring to form a limited partnership

shall:

(1) Sign and swear to a certificate, which shall state -

(a) The name of the partnership, adding thereto the word

"Limited";

(b) The character of the business;

(c) The location of the principal place of business;

(d) The name and place of residence of each member, general

and limited partners being respectively designated;

(e) The term for which the partnership is to exist;

(f) The amount of cash and a description of and the agreed value
of the other property contributed by each limited partner;

(g) The additional contributions, if any, to be made by each

limited partner and the times at which or events on the
happening of which they shall be made;

(h) The time, if agreed upon, when the contribution of each

limited partner is to be returned;

(i) The share of the profits or the other compensation by way of

income which each limited partner shall receive by reason of his
contribution;

(j) The right, if given, of a limited partner to substitute an

assignee as contributor in his place, and the terms and
conditions of the substitution;

(k) The right, if given, of the partners to admit additional

limited partners;
 (l) The right, if given, of one or more of the limited partners to
priority over other limited partners, as to contributions or as to
compensation by way of income, and the nature of such
priority;

(m) The right, if given, of the remaining general partner or

partners to continue the business on the death, retirement, civil
interdiction, insanity or insolvency of a general partner; and

(n) The right, if given, of a limited partner to demand and

receive property other than cash in return for his contribution.

(2) File for record the certificate in the Office of the Securities and
Exchange Commission.
A limited partnership is formed if there has been substantial compliance in
good faith with the foregoing requirements.

Art. 1845. The contributions of a limited partner may be cash or property,

but not services.

Art. 1846. The surname of a limited partner shall not appear in the
partnership name unless:

(1) It is also the surname of a general partner, or

(2) Prior to the time when the limited partner became such, the
business has been carried on under a name in which his surname
appeared.

A limited partner whose surname appears in a partnership name contrary

to the provisions of the first paragraph is liable as a general partner to
partnership creditors who extend credit to the partnership without actual
knowledge that he is not a general partner.

Art. 1847. If the certificate contains a false statement, one who suffers loss
by reliance on such statement may hold liable any party to the certificate
who knew the statement to be false:

(1) At the time he signed the certificate, or

(2) Subsequently, but within a sufficient time before the statement

was relied upon to enable him to cancel or amend the certificate, or to
file a petition for its cancellation or amendment as provided in Article
1865.
Art. 1848. A limited partner shall not become liable as a general partner
unless, in addition to the exercise of his rights and powers as a limited
partner, he takes part in the control of the business.

Art. 1849. After the formation of a lifted partnership, additional limited

partners may be admitted upon filing an amendment to the original
certificate in accordance with the requirements of Article 1865.

Art. 1850. A general partner shall have all the rights and powers and be
subject to all the restrictions and liabilities of a partner in a partnership
without limited partners. However, without the written consent or
ratification of the specific act by all the limited partners, a general partner
or all of the general partners have no authority to:

(1) Do any act in contravention of the certificate;

(2) Do any act which would make it impossible to carry on the

ordinary business of the partnership;

(3) Confess a judgment against the partnership;

(4) Possess partnership property, or assign their rights in specific

partnership property, for other than a partnership purpose;

(5) Admit a person as a general partner;

(6) Admit a person as a limited partner, unless the right so to do is

given in the certificate;

(7) Continue the business with partnership property on the death,

retirement, insanity, civil interdiction or insolvency of a general
partner, unless the right so to do is given in the certificate.

Art. 1851. A limited partner shall have the same rights as a general partner
to:
(1) Have the partnership books kept at the principal place of business
of the partnership, and at a reasonable hour to inspect and copy any
of them;

(2) Have on demand true and full information of all things affecting
the partnership, and a formal account of partnership affairs
whenever circumstances render it just and reasonable; and

(3) Have dissolution and winding up by decree of court.

A limited partner shall have the right to receive a share of the profits or
other compensation by way of income, and to the return of his contribution
as provided in Articles 1856 and 1857.

Art. 1852. Without prejudice to the provisions of Article 1848, a person who
has contributed to the capital of a business conducted by a person or
partnership erroneously believing that he has become a limited partner in a
limited partnership, is not, by reason of his exercise of the rights of a
limited partner, a general partner with the person or in the partnership
carrying on the business, or bound by the obligations of such person or
partnership, provided that on ascertaining the mistake he promptly
renounces his interest in the profits of the business, or other compensation
by way of income.

Art. 1853. A person may be a general partner and a limited partner in the
same partnership at the same time, provided that this fact shall be stated in
the certificate provided for in Article 1844.

A person who is a general, and also at the same time a limited partner, shall
have all the rights and powers and be subject to all the restrictions of a
general partner; except that, in respect to his contribution, he shall have the
rights against the other members which he would have had if he were not
also a general partner.

Art. 1854. A limited partner also may loan money to and transact other
business with the partnership, and, unless he is also a general partner,
receive on account of resulting claims against the partnership, with general
creditors, a pro rata share of the assets. No limited partner shall in respect
to any such claim:

(1) Receive or hold as collateral security and partnership property, or

(2) Receive from a general partner or the partnership any payment,

conveyance, or release from liability if at the time the assets of the
partnership are not sufficient to discharge partnership liabilities to
persons not claiming as general or limited partners.

The receiving of collateral security, or payment, conveyance, or release in

violation of the foregoing provisions is a fraud on the creditors of the
partnership.

Art. 1855. Where there are several limited partners the members may agree
that one or more of the limited partners shall have a priority over other
limited partners as to the return of their contributions, as to their
compensation by way of income, or as to any other matter. If such an
agreement is made it shall be stated in the certificate, and in the absence of
such a statement all the limited partners shall stand upon equal footing.
Art. 1856. A limited partner may receive from the partnership the share of
the profits or the compensation by way of income stipulated for in the
certificate; provided that after such payment is made, whether from
property of the partnership or that of a general partner, the partnership
assets are in excess of all liabilities of the partnership except liabilities to
limited partners on account of their contributions and to general partners.

Art. 1857. A limited partner shall not receive from a general partner or out
of partnership property any part of his contributions until:

(1) All liabilities of the partnership, except liabilities to general

partners and to limited partners on account of their contributions,
have been paid or there remains property of the partnership
sufficient to pay them;

(2) The consent of all members is had, unless the return of the
contribution may be rightfully demanded under the provisions of the
second paragraph; and

(3) The certificate is cancelled or so amended as to set forth the

withdrawal or reduction.

Subject to the provisions of the first paragraph, a limited partner may

rightfully demand the return of his contribution:
(1) On the dissolution of a partnership; or

(2) When the date specified in the certificate for its return has
arrived, or

(3) After he has six months' notice in writing to all other members, if
no time is specified in the certificate, either for the return of the
contribution or for the dissolution of the partnership.

In the absence of any statement in the certificate to the contrary or the

consent of all members, a limited partner, irrespective of the nature of his
contribution, has only the right to demand and receive cash in return for
his contribution.

A limited partner may have the partnership dissolved and its affairs wound
up when:

(1) He rightfully but unsuccessfully demands the return of his

contribution, or

(2) The other liabilities of the partnership have not been paid, or the
partnership property is insufficient for their payment as required by
 the first paragraph, No. 1, and the limited partner would otherwise be
entitled to the return of his contribution.

Art. 1858. A limited partner is liable to the partnership:

(1) For the difference between his contribution as actually made and
that stated in the certificate as having been made; and

(2) For any unpaid contribution which he agreed in the certificate to

make in the future at the time and on the conditions stated in the
certificate.

A limited partner holds as trustee for the partnership:

(1) Specific property stated in the certificate as contributed by him,
but which was not contributed or which has been wrongfully
returned, and

(2) Money or other property wrongfully paid or conveyed to him on

account of his contribution.

The liabilities of a limited partner as set forth in this article can be waived
or compromised only by the consent of all members; but a waiver or
compromise shall not affect the right of a creditor of a partnership who
extended credit or whose claim arose after the filing and before a
cancellation or amendment of the certificate, to enforce such liabilities.

When a contributor has rightfully received the return in whole or in part of

the capital of his contribution, he is nevertheless liable to the partnership
for any sum, not in excess of such return with interest, necessary to
discharge its liabilities to all creditors who extended credit or whose claims
arose before such return.

Art. 1859. A limited partner's interest is assignable.

A substituted limited partner is a person admitted to all the rights of a

limited partner who has died or has assigned his interest in a partnership.

An assignee, who does not become a substituted limited partner, has no

right to require any information or account of the partnership transactions
or to inspect the partnership books; he is only entitled to receive the share
of the profits or other compensation by way of income, or the return of his
contribution, to which his assignor would otherwise be entitled.

An assignee shall have the right to become a substituted limited partner if

all the members consent thereto or if the assignor, being thereunto
empowered by the certificate, gives the assignee that right.
An assignee becomes a substituted limited partner when the certificate is
appropriately amended in accordance with Article 1865.

The substituted limited partner has all the rights and powers, and is subject
to all the restrictions and liabilities of his assignor, except those liabilities
of which he was ignorant at the time he became a limited partner and which
could not be ascertained from the certificate.

The substitution of the assignee as a limited partner does not release the
assignor from liability to the partnership under Articles 1847 and 1848.

Art. 1860. The retirement, death, insolvency, insanity or civil interdiction of

a general partner dissolves the partnership, unless the business is
continued by the remaining general partners:

(1) Under a right so to do stated in the certificate, or

(2) With the consent of all members.

Art. 1861. On the death of a limited partner his executor or administrator

shall have all the rights of a limited partner for the purpose of setting his
estate, and such power as the deceased had to constitute his assignee a
substituted limited partner.

The estate of a deceased limited partner shall be liable for all his liabilities
as a limited partner.

Art. 1862. On due application to a court of competent jurisdiction by any

creditor of a limited partner, the court may charge the interest of the
indebted limited partner with payment of the unsatisfied amount of such
claim, and may appoint a receiver, and make all other orders, directions
and inquiries which the circumstances of the case may require.

The interest may be redeemed with the separate property of any general
partner, but may not be redeemed with partnership property.

The remedies conferred by the first paragraph shall not be deemed

exclusive of others which may exist.

Nothing in this Chapter shall be held to deprive a limited partner of his

statutory exemption.

Art. 1863. In setting accounts after dissolution the liabilities of the

partnership shall be entitled to payment in the following order:
 (1) Those to creditors, in the order of priority as provided by law,
except those to limited partners on account of their contributions,
and to general partners;

(2) Those to limited partners in respect to their share of the profits

and other compensation by way of income on their contributions;

(3) Those to limited partners in respect to the capital of their

contributions;

(4) Those to general partners other than for capital and profits;

(5) Those to general partners in respect to profits;

(6) Those to general partners in respect to capital.

Subject to any statement in the certificate or to subsequent agreement,

limited partners share in the partnership assets in respect to their claims
for capital, and in respect to their claims for profits or for compensation by
way of income on their contribution respectively, in proportion to the
respective amounts of such claims.

Art. 1864. The certificate shall be cancelled when the partnership is

dissolved or all limited partners cease to be such.

A certificate shall be amended when:

(1) There is a change in the name of the partnership or in the amount

or character of the contribution of any limited partner;

(2) A person is substituted as a limited partner;

(3) An additional limited partner is admitted;

(4) A person is admitted as a general partner;

(5) A general partner retires, dies, becomes insolvent or insane, or is

sentenced to civil interdiction and the business is continued under
Article 1860;

(6) There is a change in the character of the business of the

partnership;

(7) There is a false or erroneous statement in the certificate;

(8) There is a change in the time as stated in the certificate for the
dissolution of the partnership or for the return of a contribution;
 (9) A time is fixed for the dissolution of the partnership, or the return
of a contribution, no time having been specified in the certificate, or

(10) The members desire to make a change in any other statement in

the certificate in order that it shall accurately represent the
agreement among them.

Art. 1865. The writing to amend a certificate shall:

(1) Conform to the requirements of Article 1844 as far as necessary to
set forth clearly the change in the certificate which it is desired to
make; and

(2) Be signed and sworn to by all members, and an amendment

substituting a limited partner or adding a limited or general partner
shall be signed also by the member to be substituted or added, and
when a limited partner is to be substituted, the amendment shall also
be signed by the assigning limited partner.

The writing to cancel a certificate shall be signed by all members.

A person desiring the cancellation or amendment of a certificate, if any

person designated in the first and second paragraphs as a person who must
execute the writing refuses to do so, may petition the court to order a
cancellation or amendment thereof.

If the court finds that the petitioner has a right to have the writing executed
by a person who refuses to do so, it shall order the Office of the Securities
and Exchange Commission where the certificate is recorded, to record the
cancellation or amendment of the certificate; and when the certificate is to
be amended, the court shall also cause to be filed for record in said office a
certified copy of its decree setting forth the amendment.

A certificate is amended or cancelled when there is filed for record in the

Office of the Securities and Exchange Commission, where the certificate is
recorded:

(1) A writing in accordance with the provisions of the first or second

paragraph, or

(2) A certified copy of the order of the court in accordance with the
provisions of the fourth paragraph;

(3) After the certificate is duly amended in accordance with this

article, the amended certified shall thereafter be for all purposes the
certificate provided for in this Chapter.
Art. 1866. A contributor, unless he is a general partner, is not a proper
party to proceedings by or against a partnership, except where the object is
to enforce a limited partner's right against or liability to the partnership.

Art. 1867. A limited partnership formed under the law prior to the
effectivity of this Code, may become a limited partnership under this
Chapter by complying with the provisions of Article 1844, provided the
certificate sets forth:

(1) The amount of the original contribution of each limited partner,

and the time when the contribution was made; and

(2) That the property of the partnership exceeds the amount sufficient
to discharge its liabilities to persons not claiming as general or
limited partners by an amount greater than the sum of the
contributions of its limited partners.

A limited partnership formed under the law prior to the effectivity of this
Code, until or unless it becomes a limited partnership under this Chapter,
shall continue to be governed by the provisions of the old law.

Title X. - AGENCY

CHAPTER 1
NATURE, FORM AND KINDS OF AGENCY

Art. 1868. By the contract of agency a person binds himself to render some
service or to do something in representation or on behalf of another, with
the consent or authority of the latter. (1709a)

Art. 1869. Agency may be express, or implied from the acts of the principal,
from his silence or lack of action, or his failure to repudiate the agency,
knowing that another person is acting on his behalf without authority.

Agency may be oral, unless the law requires a specific form. (1710a)

Art. 1870. Acceptance by the agent may also be express, or implied from his
acts which carry out the agency, or from his silence or inaction according to
the circumstances. (n)

Art. 1871. Between persons who are present, the acceptance of the agency
may also be implied if the principal delivers his power of attorney to the
agent and the latter receives it without any objection. (n)

Art. 1872. Between persons who are absent, the acceptance of the agency
cannot be implied from the silence of the agent, except:
 (1) When the principal transmits his power of attorney to the agent,
who receives it without any objection;

(2) When the principal entrusts to him by letter or telegram a power

of attorney with respect to the business in which he is habitually
engaged as an agent, and he did not reply to the letter or telegram. (n)

Art. 1873. If a person specially informs another or states by public

advertisement that he has given a power of attorney to a third person, the
latter thereby becomes a duly authorized agent, in the former case with
respect to the person who received the special information, and in the latter
case with regard to any person.

The power shall continue to be in full force until the notice is rescinded in
the same manner in which it was given. (n)

Art. 1874. When a sale of a piece of land or any interest therein is through
an agent, the authority of the latter shall be in writing; otherwise, the sale
shall be void. (n)

Art. 1875. Agency is presumed to be for a compensation, unless there is

proof to the contrary. (n)

Art. 1876. An agency is either general or special.

The former comprises all the business of the principal. The latter, one or
more specific transactions. (1712)

Art. 1877. An agency couched in general terms comprises only acts of

administration, even if the principal should state that he withholds no
power or that the agent may execute such acts as he may consider
appropriate, or even though the agency should authorize a general and
unlimited management. (n)

Art. 1878. Special powers of attorney are necessary in the following cases:

(1) To make such payments as are not usually considered as acts of

administration;

(2) To effect novations which put an end to obligations already in

existence at the time the agency was constituted;

(3) To compromise, to submit questions to arbitration, to renounce

the right to appeal from a judgment, to waive objections to the venue
of an action or to abandon a prescription already acquired;

(4) To waive any obligation gratuitously;

 (5) To enter into any contract by which the ownership of an
immovable is transmitted or acquired either gratuitously or for a
valuable consideration;

(6) To make gifts, except customary ones for charity or those made to
employees in the business managed by the agent;

(7) To loan or borrow money, unless the latter act be urgent and
indispensable for the preservation of the things which are under
administration;

(8) To lease any real property to another person for more than one
year;

(9) To bind the principal to render some service without

compensation;

(10) To bind the principal in a contract of partnership;

(11) To obligate the principal as a guarantor or surety;

(12) To create or convey real rights over immovable property;

(13) To accept or repudiate an inheritance;

(14) To ratify or recognize obligations contracted before the agency;

(15) Any other act of strict dominion. (n)

Art. 1879. A special power to sell excludes the power to mortgage; and a
special power to mortgage does not include the power to sell. (n)

Art. 1880. A special power to compromise does not authorize submission to

arbitration. (1713a)

Art. 1881. The agent must act within the scope of his authority. He may do
such acts as may be conducive to the accomplishment of the purpose of the
agency. (1714a)

Art. 1882. The limits of the agent's authority shall not be considered
exceeded should it have been performed in a manner more advantageous to
the principal than that specified by him. (1715)

Art. 1883. If an agent acts in his own name, the principal has no right of
action against the persons with whom the agent has contracted; neither
have such persons against the principal.
In such case the agent is the one directly bound in favor of the person with
whom he has contracted, as if the transaction were his own, except when
the contract involves things belonging to the principal.

The provisions of this article shall be understood to be without prejudice to

the actions between the principal and agent. (1717)

CHAPTER 2
OBLIGATIONS OF THE AGENT

Art. 1884. The agent is bound by his acceptance to carry out the agency, and
is liable for the damages which, through his non-performance, the principal
may suffer.

He must also finish the business already begun on the death of the
principal, should delay entail any danger. (1718)

Art. 1885. In case a person declines an agency, he is bound to observe the

diligence of a good father of a family in the custody and preservation of the
goods forwarded to him by the owner until the latter should appoint an
agent or take charge of the goods. (n)

Art. 1886. Should there be a stipulation that the agent shall advance the
necessary funds, he shall be bound to do so except when the principal is
insolvent. (n)

Art. 1887. In the execution of the agency, the agent shall act in accordance
with the instructions of the principal.

In default thereof, he shall do all that a good father of a family would do, as
required by the nature of the business. (1719)

Art. 1888. An agent shall not carry out an agency if its execution would
manifestly result in loss or damage to the principal. (n)

Art. 1889. The agent shall be liable for damages if, there being a conflict
between his interests and those of the principal, he should prefer his own.
(n)

Art. 1890. If the agent has been empowered to borrow money, he may
himself be the lender at the current rate of interest. If he has been
authorized to lend money at interest, he cannot borrow it without the
consent of the principal. (n)
Art. 1891. Every agent is bound to render an account of his transactions and
to deliver to the principal whatever he may have received by virtue of the
agency, even though it may not be owing to the principal.

Every stipulation exempting the agent from the obligation to render an

account shall be void. (1720a)

Art. 1892. The agent may appoint a substitute if the principal has not
prohibited him from doing so; but he shall be responsible for the acts of the
substitute:

(1) When he was not given the power to appoint one;

(2) When he was given such power, but without designating the
person, and the person appointed was notoriously incompetent or
insolvent.

All acts of the substitute appointed against the prohibition of the principal
shall be void. (1721)

Art. 1893. In the cases mentioned in Nos. 1 and 2 of the preceding article,
the principal may furthermore bring an action against the substitute with
respect to the obligations which the latter has contracted under the
substitution. (1722a)

Art. 1894. The responsibility of two or more agents, even though they have
been appointed simultaneously, is not solidary, if solidarity has not been
expressly stipulated. (1723)

Art. 1895. If solidarity has been agreed upon, each of the agents is
responsible for the non-fulfillment of agency, and for the fault or negligence
of his fellows agents, except in the latter case when the fellow agents acted
beyond the scope of their authority. (n)

Art. 1896. The agent owes interest on the sums he has applied to his own
use from the day on which he did so, and on those which he still owes after
the extinguishment of the agency. (1724a)

Art. 1897. The agent who acts as such is not personally liable to the party
with whom he contracts, unless he expressly binds himself or exceeds the
limits of his authority without giving such party sufficient notice of his
powers. (1725)

Art. 1898. If the agent contracts in the name of the principal, exceeding the
scope of his authority, and the principal does not ratify the contract, it shall
be void if the party with whom the agent contracted is aware of the limits of
the powers granted by the principal. In this case, however, the agent is
liable if he undertook to secure the principal's ratification. (n)

Art. 1899. If a duly authorized agent acts in accordance with the orders of
the principal, the latter cannot set up the ignorance of the agent as to
circumstances whereof he himself was, or ought to have been, aware. (n)

Art. 1900. So far as third persons are concerned, an act is deemed to have
been performed within the scope of the agent's authority, if such act is
within the terms of the power of attorney, as written, even if the agent has
in fact exceeded the limits of his authority according to an understanding
between the principal and the agent. (n)

Art. 1901. A third person cannot set up the fact that the agent has exceeded
his powers, if the principal has ratified, or has signified his willingness to
ratify the agent's acts. (n)

Art. 1902. A third person with whom the agent wishes to contract on behalf
of the principal may require the presentation of the power of attorney, or
the instructions as regards the agency. Private or secret orders and
instructions of the principal do not prejudice third persons who have relied
upon the power of attorney or instructions shown them. (n)

Art. 1903. The commission agent shall be responsible for the goods received
by him in the terms and conditions and as described in the consignment,
unless upon receiving them he should make a written statement of the
damage and deterioration suffered by the same. (n)

Art. 1904. The commission agent who handles goods of the same kind and
mark, which belong to different owners, shall distinguish them by
countermarks, and designate the merchandise respectively belonging to
each principal. (n)

Art. 1905. The commission agent cannot, without the express or implied
consent of the principal, sell on credit. Should he do so, the principal may
demand from him payment in cash, but the commission agent shall be
entitled to any interest or benefit, which may result from such sale. (n)

Art. 1906. Should the commission agent, with authority of the principal, sell
on credit, he shall so inform the principal, with a statement of the names of
the buyers. Should he fail to do so, the sale shall be deemed to have been
made for cash insofar as the principal is concerned. (n)

Art. 1907. Should the commission agent receive on a sale, in addition to the
ordinary commission, another called a guarantee commission, he shall bear
the risk of collection and shall pay the principal the proceeds of the sale on
the same terms agreed upon with the purchaser. (n)
Art. 1908. The commission agent who does not collect the credits of his
principal at the time when they become due and demandable shall be liable
for damages, unless he proves that he exercised due diligence for that
purpose. (n)

Art. 1909. The agent is responsible not only for fraud, but also for
negligence, which shall be judged with more or less rigor by the courts,
according to whether the agency was or was not for a compensation. (1726)

CHAPTER 3
OBLIGATIONS OF THE PRINCIPAL

Art. 1910. The principal must comply with all the obligations which the
agent may have contracted within the scope of his authority.

As for any obligation wherein the agent has exceeded his power, the
principal is not bound except when he ratifies it expressly or tacitly. (1727)

Art. 1911. Even when the agent has exceeded his authority, the principal is
solidarily liable with the agent if the former allowed the latter to act as
though he had full powers. (n)

Art. 1912. The principal must advance to the agent, should the latter so
request, the sums necessary for the execution of the agency.

Should the agent have advanced them, the principal must reimburse him
therefor, even if the business or undertaking was not successful, provided
the agent is free from all fault.

The reimbursement shall include interest on the sums advanced, from the
day on which the advance was made. (1728)

Art. 1913. The principal must also indemnify the agent for all the damages
which the execution of the agency may have caused the latter, without fault
or negligence on his part. (1729)

Art. 1914. The agent may retain in pledge the things which are the object of
the agency until the principal effects the reimbursement and pays the
indemnity set forth in the two preceding articles. (1730)

Art. 1915. If two or more persons have appointed an agent for a common
transaction or undertaking, they shall be solidarily liable to the agent for all
the consequences of the agency. (1731)

Art. 1916. When two persons contract with regard to the same thing, one of
them with the agent and the other with the principal, and the two contracts
are incompatible with each other, that of prior date shall be preferred,
without prejudice to the provisions of Article 1544. (n)

Art. 1917. In the case referred to in the preceding article, if the agent has
acted in good faith, the principal shall be liable in damages to the third
person whose contract must be rejected. If the agent acted in bad faith, he
alone shall be responsible. (n)

Art. 1918. The principal is not liable for the expenses incurred by the agent
in the following cases:

(1) If the agent acted in contravention of the principal's instructions,

unless the latter should wish to avail himself of the benefits derived
from the contract;

(2) When the expenses were due to the fault of the agent;

(3) When the agent incurred them with knowledge that an

unfavorable result would ensue, if the principal was not aware
thereof;

(4) When it was stipulated that the expenses would be borne by the
agent, or that the latter would be allowed only a certain sum. (n)

CHAPTER 4
MODES OF EXTINGUISHMENT OF AGENCY

Art. 1919. Agency is extinguished:

(1) By its revocation;

(2) By the withdrawal of the agent;

(3) By the death, civil interdiction, insanity or insolvency of the

principal or of the agent;

(4) By the dissolution of the firm or corporation which entrusted or

accepted the agency;

(5) By the accomplishment of the object or purpose of the agency;

(6) By the expiration of the period for which the agency was
constituted. (1732a)

Art. 1920. The principal may revoke the agency at will, and compel the agent
to return the document evidencing the agency. Such revocation may be
express or implied. (1733a)
Art. 1921. If the agency has been entrusted for the purpose of contracting
with specified persons, its revocation shall not prejudice the latter if they
were not given notice thereof. (1734)

Art. 1922. If the agent had general powers, revocation of the agency does
not prejudice third persons who acted in good faith and without knowledge
of the revocation. Notice of the revocation in a newspaper of general
circulation is a sufficient warning to third persons. (n)

Art. 1923. The appointment of a new agent for the same business or
transaction revokes the previous agency from the day on which notice
thereof was given to the former agent, without prejudice to the provisions
of the two preceding articles. (1735a)

Art. 1924. The agency is revoked if the principal directly manages the
business entrusted to the agent, dealing directly with third persons. (n)

Art. 1925. When two or more principals have granted a power of attorney
for a common transaction, any one of them may revoke the same without
the consent of the others. (n)

Art. 1926. A general power of attorney is revoked by a special one granted to

another agent, as regards the special matter involved in the latter. (n)

Art. 1927. An agency cannot be revoked if a bilateral contract depends upon

it, or if it is the means of fulfilling an obligation already contracted, or if a
partner is appointed manager of a partnership in the contract of
partnership and his removal from the management is unjustifiable. (n)

Art. 1928. The agent may withdraw from the agency by giving due notice to
the principal. If the latter should suffer any damage by reason of the
withdrawal, the agent must indemnify him therefor, unless the agent
should base his withdrawal upon the impossibility of continuing the
performance of the agency without grave detriment to himself. (1736a)

Art. 1929. The agent, even if he should withdraw from the agency for a valid
reason, must continue to act until the principal has had reasonable
opportunity to take the necessary steps to meet the situation. (1737a)

Art. 1930. The agency shall remain in full force and effect even after the
death of the principal, if it has been constituted in the common interest of
the latter and of the agent, or in the interest of a third person who has
accepted the stipulation in his favor. (n)

Art. 1931. Anything done by the agent, without knowledge of the death of the
principal or of any other cause which extinguishes the agency, is valid and
shall be fully effective with respect to third persons who may have
contracted with him in good faith. (1738)

Art. 1932. If the agent dies, his heirs must notify the principal thereof, and
in the meantime adopt such measures as the circumstances may demand in
the interest of the latter. (1739)

Title XI. - LOAN

GENERAL PROVISIONS

Art. 1933. By the contract of loan, one of the parties delivers to another,
either something not consumable so that the latter may use the same for a
certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the condition
that the same amount of the same kind and quality shall be paid, in which
case the contract is simply called a loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay interest.

In commodatum the bailor retains the ownership of the thing loaned, while
in simple loan, ownership passes to the borrower. (1740a)

Art. 1934. An accepted promise to deliver something by way of

commodatum or simple loan is binding upon parties, but the commodatum
or simple loan itself shall not be perfected until the delivery of the object of
the contract. (n)

CHAPTER 1
COMMODATUM

SECTION 1 - Nature of Commodatum

Art. 1935. The bailee in commodatum acquires the used of the thing loaned
but not its fruits; if any compensation is to be paid by him who acquires the
use, the contract ceases to be a commodatum. (1941a)

Art. 1936. Consumable goods may be the subject of commodatum if the

purpose of the contract is not the consumption of the object, as when it is
merely for exhibition. (n)

Art. 1937. Movable or immovable property may be the object of

commodatum. (n)
Art. 1938. The bailor in commodatum need not be the owner of the thing
loaned. (n)

Art. 1939. Commodatum is purely personal in character. Consequently:

(1) The death of either the bailor or the bailee extinguishes the
contract;

(2) The bailee can neither lend nor lease the object of the contract to a
third person. However, the members of the bailee's household may
make use of the thing loaned, unless there is a stipulation to the
contrary, or unless the nature of the thing forbids such use. (n)

Art. 1940. A stipulation that the bailee may make use of the fruits of the
thing loaned is valid. (n)

SECTION 2. - Obligations of the Bailee

Art. 1941. The bailee is obliged to pay for the ordinary expenses for the use
and preservation of the thing loaned. (1743a)

Art. 1942. The bailee is liable for the loss of the thing, even if it should be
through a fortuitous event:

(1) If he devotes the thing to any purpose different from that for which
it has been loaned;

(2) If he keeps it longer than the period stipulated, or after the

accomplishment of the use for which the commodatum has been
constituted;

(3) If the thing loaned has been delivered with appraisal of its value,
unless there is a stipulation exemption the bailee from responsibility
in case of a fortuitous event;

(4) If he lends or leases the thing to a third person, who is not a

member of his household;

(5) If, being able to save either the thing borrowed or his own thing,
he chose to save the latter. (1744a and 1745)

Art. 1943. The bailee does not answer for the deterioration of the thing
loaned due only to the use thereof and without his fault. (1746)

Art. 1944. The bailee cannot retain the thing loaned on the ground that the
bailor owes him something, even though it may be by reason of expenses.
However, the bailee has a right of retention for damages mentioned in
Article 1951. (1747a)

Art. 1945. When there are two or more bailees to whom a thing is loaned in
the same contract, they are liable solidarily. (1748a)

SECTION 3. - Obligations of the Bailor

Art. 1946. The bailor cannot demand the return of the thing loaned till after
the expiration of the period stipulated, or after the accomplishment of the
use for which the commodatum has been constituted. However, if in the
meantime, he should have urgent need of the thing, he may demand its
return or temporary use.

In case of temporary use by the bailor, the contract of commodatum is

suspended while the thing is in the possession of the bailor. (1749a)

Art. 1947. The bailor may demand the thing at will, and the contractual
relation is called a precarium, in the following cases:

(1) If neither the duration of the contract nor the use to which the
thing loaned should be devoted, has been stipulated; or

(2) If the use of the thing is merely tolerated by the owner. (1750a)

Art. 1948. The bailor may demand the immediate return of the thing if the
bailee commits any act of ingratitude specified in Article 765. (n)

Art. 1949. The bailor shall refund the extraordinary expenses during the
contract for the preservation of the thing loaned, provided the bailee brings
the same to the knowledge of the bailor before incurring them, except when
they are so urgent that the reply to the notification cannot be awaited
without danger.

If the extraordinary expenses arise on the occasion of the actual use of the
thing by the bailee, even though he acted without fault, they shall be borne
equally by both the bailor and the bailee, unless there is a stipulation to the
contrary. (1751a)

Art. 1950. If, for the purpose of making use of the thing, the bailee incurs
expenses other than those referred to in Articles 1941 and 1949, he is not
entitled to reimbursement. (n)

Art. 1951. The bailor who, knowing the flaws of the thing loaned, does not
advise the bailee of the same, shall be liable to the latter for the damages
which he may suffer by reason thereof. (1752)
Art. 1952. The bailor cannot exempt himself from the payment of expenses
or damages by abandoning the thing to the bailee. (n)

CHAPTER 2
SIMPLE LOAN OR MUTUUM

Art. 1953. A person who receives a loan of money or any other fungible
thing acquires the ownership thereof, and is bound to pay to the creditor an
equal amount of the same kind and quality. (1753a)

Art. 1954. A contract whereby one person transfers the ownership of non-
fungible things to another with the obligation on the part of the latter to
give things of the same kind, quantity, and quality shall be considered a
barter. (n)

Art. 1955. The obligation of a person who borrows money shall be governed
by the provisions of Articles 1249 and 1250 of this Code.

If what was loaned is a fungible thing other than money, the debtor owes
another thing of the same kind, quantity and quality, even if it should
change in value. In case it is impossible to deliver the same kind, its value at
the time of the perfection of the loan shall be paid. (1754a)

Art. 1956. No interest shall be due unless it has been expressly stipulated in
writing. (1755a)

Art. 1957. Contracts and stipulations, under any cloak or device whatever,
intended to circumvent the laws against usury shall be void. The borrower
may recover in accordance with the laws on usury. (n)

Art. 1958. In the determination of the interest, if it is payable in kind, its

value shall be appraised at the current price of the products or goods at the
time and place of payment. (n)

Art. 1959. Without prejudice to the provisions of Article 2212, interest due
and unpaid shall not earn interest. However, the contracting parties may by
stipulation capitalize the interest due and unpaid, which as added principal,
shall earn new interest. (n)

Art. 1960. If the borrower pays interest when there has been no stipulation
therefor, the provisions of this Code concerning solutio indebiti, or natural
obligations, shall be applied, as the case may be. (n)

Art. 1961. Usurious contracts shall be governed by the Usury Law and other
special laws, so far as they are not inconsistent with this Code. (n)
 Title XII. - DEPOSIT

CHAPTER 1
DEPOSIT IN GENERAL AND ITS DIFFERENT KINDS

Art. 1962. A deposit is constituted from the moment a person receives a

thing belonging to another, with the obligation of safely keeping it and of
returning the same. If the safekeeping of the thing delivered is not the
principal purpose of the contract, there is no deposit but some other
contract. (1758a)

Art. 1963. An agreement to constitute a deposit is binding, but the deposit

itself is not perfected until the delivery of the thing. (n)

Art. 1964. A deposit may be constituted judicially or extrajudicially. (1759)

Art. 1965. A deposit is a gratuitous contract, except when there is an

agreement to the contrary, or unless the depositary is engaged in the
business of storing goods. (1760a)

Art. 1966. Only movable things may be the object of a deposit. (1761)

Art. 1967. An extrajudicial deposit is either voluntary or necessary. (1762)

CHAPTER 2
VOLUNTARY DEPOSIT

SECTION 1. - General Provisions

Art. 1968. A voluntary deposit is that wherein the delivery is made by the
will of the depositor. A deposit may also be made by two or more persons
each of whom believes himself entitled to the thing deposited with a third
person, who shall deliver it in a proper case to the one to whom it belongs.
(1763)

Art. 1969. A contract of deposit may be entered into orally or in writing. (n)

Art. 1970. If a person having capacity to contract accepts a deposit made by

one who is incapacitated, the former shall be subject to all the obligations of
a depositary, and may be compelled to return the thing by the guardian, or
administrator, of the person who made the deposit, or by the latter himself
if he should acquire capacity. (1764)

Art. 1971. If the deposit has been made by a capacitated person with another
who is not, the depositor shall only have an action to recover the thing
deposited while it is still in the possession of the depositary, or to compel
the latter to pay him the amount by which he may have enriched or
benefited himself with the thing or its price. However, if a third person who
acquired the thing acted in bad faith, the depositor may bring an action
against him for its recovery. (1765a)

SECTION 2. - Obligations of the Depositary

Art. 1972. The depositary is obliged to keep the thing safely and to return it,
when required, to the depositor, or to his heirs and successors, or to the
person who may have been designated in the contract. His responsibility,
with regard to the safekeeping and the loss of the thing, shall be governed
by the provisions of Title I of this Book.

If the deposit is gratuitous, this fact shall be taken into account in

determining the degree of care that the depositary must observe. (1766a)

Art. 1973. Unless there is a stipulation to the contrary, the depositary

cannot deposit the thing with a third person. If deposit with a third person
is allowed, the depositary is liable for the loss if he deposited the thing with
a person who is manifestly careless or unfit. The depositary is responsible
for the negligence of his employees. (n)

Art. 1974. The depositary may change the way of the deposit if under the
circumstances he may reasonably presume that the depositor would
consent to the change if he knew of the facts of the situation. However,
before the depositary may make such change, he shall notify the depositor
thereof and wait for his decision, unless delay would cause danger. (n)

Art. 1975. The depositary holding certificates, bonds, securities or

instruments which earn interest shall be bound to collect the latter when it
becomes due, and to take such steps as may be necessary in order that the
securities may preserve their value and the rights corresponding to them
according to law.

The above provision shall not apply to contracts for the rent of safety
deposit boxes. (n)

Art. 1976. Unless there is a stipulation to the contrary, the depositary may
commingle grain or other articles of the same kind and quality, in which
case the various depositors shall own or have a proportionate interest in
the mass. (n)

Art. 1977. The depositary cannot make use of the thing deposited without
the express permission of the depositor.

Otherwise, he shall be liable for damages.

However, when the preservation of the thing deposited requires its use, it
must be used but only for that purpose. (1767a)

Art. 1978. When the depositary has permission to use the thing deposited,
the contract loses the concept of a deposit and becomes a loan or
commodatum, except where safekeeping is still the principal purpose of the
contract.

The permission shall not be presumed, and its existence must be proved.
(1768a)

Art. 1979. The depositary is liable for the loss of the thing through a
fortuitous event:

(1) If it is so stipulated;

(2) If he uses the thing without the depositor's permission;

(3) If he delays its return;

(4) If he allows others to use it, even though he himself may have been
authorized to use the same. (n)

Art. 1980. Fixed, savings, and current deposits of money in banks and
similar institutions shall be governed by the provisions concerning simple
loan. (n)

Art. 1981. When the thing deposited is delivered closed and sealed, the
depositary must return it in the same condition, and he shall be liable for
damages should the seal or lock be broken through his fault.

Fault on the part of the depositary is presumed, unless there is proof to the
contrary.

As regards the value of the thing deposited, the statement of the depositor
shall be accepted, when the forcible opening is imputable to the depositary,
should there be no proof to the contrary. However, the courts may pass
upon the credibility of the depositor with respect to the value claimed by
him.

When the seal or lock is broken, with or without the depositary's fault, he
shall keep the secret of the deposit. (1769a)

Art. 1982. When it becomes necessary to open a locked box or receptacle,

the depositary is presumed authorized to do so, if the key has been
delivered to him; or when the instructions of the depositor as regards the
deposit cannot be executed without opening the box or receptacle. (n)
Art. 1983. The thing deposited shall be returned with all its products,
accessories and accessions.

Should the deposit consist of money, the provisions relative to agents in

article 1896 shall be applied to the depositary. (1770)

Art. 1984. The depositary cannot demand that the depositor prove his
ownership of the thing deposited.

Nevertheless, should he discover that the thing has been stolen and who its
true owner is, he must advise the latter of the deposit.

If the owner, in spite of such information, does not claim it within the
period of one month, the depositary shall be relieved of all responsibility by
returning the thing deposited to the depositor.

If the depositary has reasonable grounds to believe that the thing has not
been lawfully acquired by the depositor, the former may return the same.
(1771a)

Art. 1985. When there are two or more depositors, if they are not solidary,
and the thing admits of division, each one cannot demand more than his
share.

When there is solidarity or the thing does not admit of division, the
provisions of Articles 1212 and 1214 shall govern. However, if there is a
stipulation that the thing should be returned to one of the depositors, the
depositary shall return it only to the person designated. (1772a)

Art. 1986. If the depositor should lose his capacity to contract after having
made the deposit, the thing cannot be returned except to the persons who
may have the administration of his property and rights. (1773)

Art. 1987. If at the time the deposit was made a place was designated for the
return of the thing, the depositary must take the thing deposited to such
place; but the expenses for transportation shall be borne by the depositor.

If no place has been designated for the return, it shall be made where the
thing deposited may be, even if it should not be the same place where the
deposit was made, provided that there was no malice on the part of the
depositary. (1774)

Art. 1988. The thing deposited must be returned to the depositor upon
demand, even though a specified period or time for such return may have
been fixed.
This provision shall not apply when the thing is judicially attached while in
the depositary's possession, or should he have been notified of the
opposition of a third person to the return or the removal of the thing
deposited. In these cases, the depositary must immediately inform the
depositor of the attachment or opposition. (1775)

Art. 1989. Unless the deposit is for a valuable consideration, the depositary
who may have justifiable reasons for not keeping the thing deposited may,
even before the time designated, return it to the depositor; and if the latter
should refuse to receive it, the depositary may secure its consignation from
the court. (1776a)

Art. 1990. If the depositary by force majeure or government order loses the
thing and receives money or another thing in its place, he shall deliver the
sum or other thing to the depositor. (1777a)

Art. 1991. The depositor's heir who in good faith may have sold the thing
which he did not know was deposited, shall only be bound to return the
price he may have received or to assign his right of action against the buyer
in case the price has not been paid him. (1778)

SECTION 3. - Obligations of the Depositor

Art. 1992. If the deposit is gratuitous, the depositor is obliged to reimburse

the depositary for the expenses he may have incurred for the preservation
of the thing deposited. (1779a)

Art. 1993. The depositor shall reimburse the depositary for any loss arising
from the character of the thing deposited, unless at the time of the
constitution of the deposit the former was not aware of, or was not expected
to know the dangerous character of the thing, or unless he notified the
depositary of the same, or the latter was aware of it without advice from the
depositor. (n)

Art. 1994. The depositary may retain the thing in pledge until the full
payment of what may be due him by reason of the deposit. (1780)

Art. 1995. A deposit its extinguished:

(1) Upon the loss or destruction of the thing deposited;

(2) In case of a gratuitous deposit, upon the death of either the

depositor or the depositary. (n)

CHAPTER 3
NECESSARY DEPOSIT
Art. 1996. A deposit is necessary:
(1) When it is made in compliance with a legal obligation;

(2) When it takes place on the occasion of any calamity, such as fire,
storm, flood, pillage, shipwreck, or other similar events. (1781a)

Art. 1997. The deposit referred to in No. 1 of the preceding article shall be
governed by the provisions of the law establishing it, and in case of its
deficiency, by the rules on voluntary deposit.

The deposit mentioned in No. 2 of the preceding article shall be regulated

by the provisions concerning voluntary deposit and by Article 2168. (1782)

Art. 1998. The deposit of effects made by the travellers in hotels or inns
shall also be regarded as necessary. The keepers of hotels or inns shall be
responsible for them as depositaries, provided that notice was given to
them, or to their employees, of the effects brought by the guests and that, on
the part of the latter, they take the precautions which said hotel-keepers or
their substitutes advised relative to the care and vigilance of their effects.
(1783)

Art. 1999. The hotel-keeper is liable for the vehicles, animals and articles
which have been introduced or placed in the annexes of the hotel. (n)

Art. 2000. The responsibility referred to in the two preceding articles shall
include the loss of, or injury to the personal property of the guests caused
by the servants or employees of the keepers of hotels or inns as well as
strangers; but not that which may proceed from any force majeure. The fact
that travellers are constrained to rely on the vigilance of the keeper of the
hotels or inns shall be considered in determining the degree of care
required of him. (1784a)

Art. 2001. The act of a thief or robber, who has entered the hotel is not
deemed force majeure, unless it is done with the use of arms or through an
irresistible force. (n)

Art. 2002. The hotel-keeper is not liable for compensation if the loss is due
to the acts of the guest, his family, servants or visitors, or if the loss arises
from the character of the things brought into the hotel. (n)

Art. 2003. The hotel-keeper cannot free himself from responsibility by

posting notices to the effect that he is not liable for the articles brought by
the guest. Any stipulation between the hotel-keeper and the guest whereby
the responsibility of the former as set forth in articles 1998 to 2001 is
suppressed or diminished shall be void. (n)
Art. 2004. The hotel-keeper has a right to retain the things brought into the
hotel by the guest, as a security for credits on account of lodging, and
supplies usually furnished to hotel guests. (n)

CHAPTER 4
SEQUESTRATION OR JUDICIAL DEPOSIT

Art. 2005. A judicial deposit or sequestration takes place when an

attachment or seizure of property in litigation is ordered. (1785)

Art. 2006. Movable as well as immovable property may be the object of

sequestration. (1786)

Art. 2007. The depositary of property or objects sequestrated cannot be

relieved of his responsibility until the controversy which gave rise thereto
has come to an end, unless the court so orders. (1787a)

Art. 2008. The depositary of property sequestrated is bound to comply,

with respect to the same, with all the obligations of a good father of a
family. (1788)

Art. 2009. As to matters not provided for in this Code, judicial

sequestration shall be governed by the Rules of Court. (1789)

Title XIII. - ALEATORY CONTRACTS

GENERAL PROVISIONS

Art. 2010. By an aleatory contract, one of the parties or both reciprocally

bind themselves to give or to do something in consideration of what the
other shall give or do upon the happening of an event which is uncertain, or
which is to occur at an indeterminate time. (1790)

CHAPTER 1
INSURANCE

Art. 2011. The contract of insurance is governed by special laws. Matters not
expressly provided for in such special laws shall be regulated by this Code.
(n)

Art. 2012. Any person who is forbidden from receiving any donation under
Article 739 cannot be named beneficiary of a life insurance policy by the
person who cannot make any donation to him, according to said article. (n)
 CHAPTER 2
GAMBLING

Art. 2013. A game of chance is that which depends more on chance or

hazard than or skill or ability. For the purposes of the following articles, in
case of doubt a game is deemed to be one of chance. (n)

Art. 2014. No action can be maintained by the winner for the collection of
what he has won in a game of chance. But any loser in a game of chance may
recover his loss from the winner, with legal interest from the time he paid
the amount lost, and subsidiarily from the operator or manager of the
gambling house. (1799a)

Art. 2015. If cheating or deceit is committed by the winner, he, and

subsidiarily the operator or manager of the gambling house, shall pay by
way of exemplary damages, not less than the equivalent of the sum lost, in
addition to the latter amount. If both the winner and the loser have
perpetrated fraud, no action for recovery can be brought by either. (n)

Art. 2016. If the loser refuses or neglects to bring an action to recover what
has been lost, his or her creditors, spouse, descendants or other persons
entitled to be supported by the loser may institute the action. The sum
thereby obtained shall be applied to the creditors' claims, or to the support
of the spouse or relatives, as the case may be. (n)

Art. 2017. The provisions of Article 2014 and 2016 apply when two or more
persons bet in a game of chance, although they take no active part in the
game itself. (1799a)

Art. 2018. If a contract which purports to be for the delivery of goods,

securities or shares of stock is entered into with the intention that the
difference between the price stipulated and the exchange or market price at
the time of the pretended delivery shall be paid by the loser to the winner,
the transaction is null and void. The loser may recover what he has paid. (n)

Art. 2019. Betting on the result of sports, athletic competitions, or games of

skill may be prohibited by local ordinances. (n)

Art. 2020. The loser in any game which is not one of chance, when there is
no local ordinance which prohibits betting therein, is under obligation to
pay his loss, unless the amount thereof is excessive under the
circumstances. In the latter case, the court shall reduce the loss to the
proper sum. (1801a)

CHAPTER 3
LIFE ANNUITY
Art. 2021. The aleatory contract of life annuity binds the debtor to pay an
annual pension or income during the life of one or more determinate
persons in consideration of a capital consisting of money or other property,
whose ownership is transferred to him at once with the burden of the
income. (1802a)

Art. 2022. The annuity may be constituted upon the life of the person who
gives the capital, upon that of a third person, or upon the lives of various
persons, all of whom must be living at the time the annuity is established.

It may also be constituted in favor of the person or persons upon whose life
or lives the contract is entered into, or in favor of another or other persons.
(1803)

Art. 2023. Life annuity shall be void if constituted upon the life of a person
who was already dead at the time the contract was entered into, or who was
at that time suffering from an illness which caused his death within twenty
days following said date. (1804)

Art. 2024. The lack of payment of the income due does not authorize the
recipient of the life annuity to demand the reimbursement of the capital or
to retake possession of the property alienated, unless there is a stipulation
to the contrary; he shall have only a right judicially to claim the payment of
the income in arrears and to require a security for the future income,
unless there is a stipulation to the contrary. (1805a)

Art. 2025. The income corresponding to the year in which the person
enjoying it dies shall be paid in proportion to the days during which he
lived; if the income should be paid by installments in advance, the whole
amount of the installment which began to run during his life shall be paid.
(1806)

Art. 2026. He who constitutes an annuity by gratuitous title upon his

property, may provide at the time the annuity is established that the same
shall not be subject to execution or attachment on account of the
obligations of the recipient of the annuity. If the annuity was constituted in
fraud of creditors, the latter may ask for the execution or attachment of the
property. (1807a)

Art. 2027. No annuity shall be claimed without first proving the existence of
the person upon whose life the annuity is constituted. (1808)

Title XIV. - COMPROMISES AND ARBITRATIONS

CHAPTER 1
 COMPROMISES

Art. 2028. A compromise is a contract whereby the parties, by making

reciprocal concessions, avoid a litigation or put an end to one already
commenced. (1809a)

Art. 2029. The court shall endeavor to persuade the litigants in a civil case
to agree upon some fair compromise. (n)

Art. 2030. Every civil action or proceeding shall be suspended:

(1) If willingness to discuss a possible compromise is expressed by

one or both parties; or

(2) If it appears that one of the parties, before the commencement of

the action or proceeding, offered to discuss a possible compromise
but the other party refused the offer.

The duration and terms of the suspension of the civil action or proceeding
and similar matters shall be governed by such provisions of the rules of
court as the Supreme Court shall promulgate. Said rules of court shall
likewise provide for the appointment and duties of amicable compounders.
(n)

Art. 2031. The courts may mitigate the damages to be paid by the losing
party who has shown a sincere desire for a compromise. (n)

Art. 2032. The court's approval is necessary in compromises entered into by

guardians, parents, absentee's representatives, and administrators or
executors of decedent's estates. (1810a)

Art. 2033. Juridical persons may compromise only in the form and with the
requisites which may be necessary to alienate their property. (1812a)

Art. 2034. There may be a compromise upon the civil liability arising from
an offense; but such compromise shall not extinguish the public action for
the imposition of the legal penalty. (1813)

Art. 2035. No compromise upon the following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a legal separation;

(3) Any ground for legal separation;

(4) Future support;

 (5) The jurisdiction of courts;

(6) Future legitime. (1814a)

Art. 2036. A compromise comprises only those objects which are definitely
stated therein, or which by necessary implication from its terms should be
deemed to have been included in the same.

A general renunciation of rights is understood to refer only to those that are

connected with the dispute which was the subject of the compromise. (1815)

Art. 2037. A compromise has upon the parties the effect and authority of res
judicata; but there shall be no execution except in compliance with a
judicial compromise. (1816)

Art. 2038. A compromise in which there is mistake, fraud, violence,

intimidation, undue influence, or falsity of documents, is subject to the
provisions of Article 1330 of this Code.

However, one of parties cannot set up a mistake of fact as against the other
if the latter, by virtue of the compromise, has withdrawn from a litigation
already commenced. (1817a)

Art. 2039. When the parties compromise generally on all differences which
they might have with each other, the discovery of documents referring to
one or more but not to all of the questions settled shall not itself be a cause
for annulment or rescission of the compromise, unless said documents
have been concealed by one of the parties.

But the compromise may be annulled or rescinded if it refers only to one

thing to which one of the parties has no right, as shown by the newly-
discovered documents. (n)

Art. 2040. If after a litigation has been decided by a final judgment, a

compromise should be agreed upon, either or both parties being unaware
of the existence of the final judgment, the compromise may be rescinded.

Ignorance of a judgment which may be revoked or set aside is not a valid

ground for attacking a compromise. (1819a)

Art. 2041. If one of the parties fails or refuses to abide by the compromise,
the other party may either enforce the compromise or regard it as
rescinded and insist upon his original demand. (n)

CHAPTER 2
ARBITRATIONS
Art. 2042. The same persons who may enter into a compromise may submit
their controversies to one or more arbitrators for decision. (1820a)

Art. 2043. The provisions of the preceding Chapter upon compromises shall
also be applicable to arbitrations. (1821a)

Art. 2044. Any stipulation that the arbitrators' award or decision shall be
final, is valid, without prejudice to Articles 2038, 2039, and 2040. (n)

Art. 2045. Any clause giving one of the parties power to choose more
arbitrators than the other is void and of no effect. (n)

Art. 2046. The appointment of arbitrators and the procedure for

arbitration shall be governed by the provisions of such rules of court as the
Supreme Court shall promulgate. (n)

Title XV. - GUARANTY

CHAPTER 1
NATURE AND EXTENT OF GUARANTY

Art. 2047. By guaranty a person, called the guarantor, binds himself to the
creditor to fulfill the obligation of the principal debtor in case the latter
should fail to do so.

If a person binds himself solidarily with the principal debtor, the provisions
of Section 4, Chapter 3, Title I of this Book shall be observed. In such case
the contract is called a suretyship. (1822a)

Art. 2048. A guaranty is gratuitous, unless there is a stipulation to the

contrary. (n)

Art. 2049. A married woman may guarantee an obligation without the

husband's consent, but shall not thereby bind the conjugal partnership,
except in cases provided by law. (n)

Art. 2050. If a guaranty is entered into without the knowledge or consent,

or against the will of the principal debtor, the provisions of Articles 1236
and 1237 shall apply. (n)

Art. 2051. A guaranty may be conventional, legal or judicial, gratuitous, or

by onerous title.
It may also be constituted, not only in favor of the principal debtor, but also
in favor of the other guarantor, with the latter's consent, or without his
knowledge, or even over his objection. (1823)

Art. 2052. A guaranty cannot exist without a valid obligation.

Nevertheless, a guaranty may be constituted to guarantee the performance

of a voidable or an unenforceable contract. It may also guarantee a natural
obligation. (1824a)

Art. 2053. A guaranty may also be given as security for future debts, the
amount of which is not yet known; there can be no claim against the
guarantor until the debt is liquidated. A conditional obligation may also be
secured. (1825a)

Art. 2054. A guarantor may bind himself for less, but not for more than the
principal debtor, both as regards the amount and the onerous nature of the
conditions.

Should he have bound himself for more, his obligations shall be reduced to
the limits of that of the debtor. (1826)

Art. 2055. A guaranty is not presumed; it must be express and cannot

extend to more than what is stipulated therein.

If it be simple or indefinite, it shall compromise not only the principal

obligation, but also all its accessories, including the judicial costs, provided
with respect to the latter, that the guarantor shall only be liable for those
costs incurred after he has been judicially required to pay. (1827a)

Art. 2056. One who is obliged to furnish a guarantor shall present a person
who possesses integrity, capacity to bind himself, and sufficient property to
answer for the obligation which he guarantees. The guarantor shall be
subject to the jurisdiction of the court of the place where this obligation is
to be complied with. (1828a)

Art. 2057. If the guarantor should be convicted in first instance of a crime

involving dishonesty or should become insolvent, the creditor may demand
another who has all the qualifications required in the preceding article. The
case is excepted where the creditor has required and stipulated that a
specified person should be the guarantor. (1829a)

CHAPTER 2
EFFECTS OF GUARANTY

SECTION 1. - Effects of Guaranty

 Between the Guarantor and the Creditor

Art. 2058. The guarantor cannot be compelled to pay the creditor unless the
latter has exhausted all the property of the debtor, and has resorted to all
the legal remedies against the debtor. (1830a)

Art. 2059. The excussion shall not take place:

(1) If the guarantor has expressly renounced it;

(2) If he has bound himself solidarily with the debtor;

(3) In case of insolvency of the debtor;

(4) When he has absconded, or cannot be sued within the Philippines

unless he has left a manager or representative;

(5) If it may be presumed that an execution on the property of the

principal debtor would not result in the satisfaction of the obligation.
(1831a)

Art. 2060. In order that the guarantor may make use of the benefit of
exclusion, he must set it up against the creditor upon the latter's demand
for payment from him, and point out to the creditor available property of
the debtor within Philippine territory, sufficient to cover the amount of the
debt. (1832)

Art. 2061. The guarantor having fulfilled all the conditions required in the
preceding article, the creditor who is negligent in exhausting the property
pointed out shall suffer the loss, to the extent of said property, for the
insolvency of the debtor resulting from such negligence. (1833a)

Art. 2062. In every action by the creditor, which must be against the
principal debtor alone, except in the cases mentioned in Article 2059, the
former shall ask the court to notify the guarantor of the action. The
guarantor may appear so that he may, if he so desire, set up such defenses
as are granted him by law. The benefit of excussion mentioned in Article
2058 shall always be unimpaired, even if judgment should be rendered
against the principal debtor and the guarantor in case of appearance by the
latter. (1834a)

Art. 2063. A compromise between the creditor and the principal debtor
benefits the guarantor but does not prejudice him. That which is entered
into between the guarantor and the creditor benefits but does not prejudice
the principal debtor. (1835a)
Art. 2064. The guarantor of a guarantor shall enjoy the benefit of excussion,
both with respect to the guarantor and to the principal debtor. (1836)

Art. 2065. Should there be several guarantors of only one debtor and for the
same debt, the obligation to answer for the same is divided among all. The
creditor cannot claim from the guarantors except the shares which they are
respectively bound to pay, unless solidarity has been expressly stipulated.

The benefit of division against the co-guarantors ceases in the same cases
and for the same reasons as the benefit of excussion against the principal
debtor. (1837)

SECTION 2. - Effects of Guaranty

Between the Debtor and the Guarantor

Art. 2066. The guarantor who pays for a debtor must be indemnified by the
latter.

The indemnity comprises:

(1) The total amount of the debt;

(2) The legal interests thereon from the time the payment was made
known to the debtor, even though it did not earn interest for the
creditor;

(3) The expenses incurred by the guarantor after having notified the
debtor that payment had been demanded of him;

(4) Damages, if they are due. (1838a)

Art. 2067. The guarantor who pays is subrogated by virtue thereof to all the
rights which the creditor had against the debtor.

If the guarantor has compromised with the creditor, he cannot demand of

the debtor more than what he has really paid. (1839)

Art. 2068. If the guarantor should pay without notifying the debtor, the
latter may enforce against him all the defenses which he could have set up
against the creditor at the time the payment was made. (1840)

Art. 2069. If the debt was for a period and the guarantor paid it before it
became due, he cannot demand reimbursement of the debtor until the
expiration of the period unless the payment has been ratified by the debtor.
(1841a)
Art. 2070. If the guarantor has paid without notifying the debtor, and the
latter not being aware of the payment, repeats the payment, the former has
no remedy whatever against the debtor, but only against the creditor.
Nevertheless, in case of a gratuitous guaranty, if the guarantor was
prevented by a fortuitous event from advising the debtor of the payment,
and the creditor becomes insolvent, the debtor shall reimburse the
guarantor for the amount paid. (1842a)

Art. 2071. The guarantor, even before having paid, may proceed against the
principal debtor:

(1) When he is sued for the payment;

(2) In case of insolvency of the principal debtor;

(3) When the debtor has bound himself to relieve him from the
guaranty within a specified period, and this period has expired;

(4) When the debt has become demandable, by reason of the

expiration of the period for payment;

(5) After the lapse of ten years, when the principal obligation has no
fixed period for its maturity, unless it be of such nature that it cannot
be extinguished except within a period longer than ten years;

(6) If there are reasonable grounds to fear that the principal debtor
intends to abscond;

(7) If the principal debtor is in imminent danger of becoming

insolvent.

In all these cases, the action of the guarantor is to obtain release from the
guaranty, or to demand a security that shall protect him from any
proceedings by the creditor and from the danger of insolvency of the
debtor. (1834a)

Art. 2072. If one, at the request of another, becomes a guarantor for the
debt of a third person who is not present, the guarantor who satisfies the
debt may sue either the person so requesting or the debtor for
reimbursement. (n)

SECTION 3. - Effects of Guaranty as Between Co-Guarantors

Art. 2073. When there are two or more guarantors of the same debtor and
for the same debt, the one among them who has paid may demand of each
of the others the share which is proportionally owing from him.
If any of the guarantors should be insolvent, his share shall be borne by the
others, including the payer, in the same proportion.

The provisions of this article shall not be applicable, unless the payment has
been made by virtue of a judicial demand or unless the principal debtor is
insolvent. (1844a)

Art. 2074. In the case of the preceding article, the co-guarantors may set up
against the one who paid, the same defenses which would have pertained to
the principal debtor against the creditor, and which are not purely personal
to the debtor. (1845)

Art. 2075. A sub-guarantor, in case of the insolvency of the guarantor for

whom he bound himself, is responsible to the co-guarantors in the same
terms as the guarantor. (1846)

CHAPTER 3
EXTINGUISHMENT OF GUARANTY

Art. 2076. The obligation of the guarantor is extinguished at the same time
as that of the debtor, and for the same causes as all other obligations. (1847)

Art. 2077. If the creditor voluntarily accepts immovable or other property in

payment of the debt, even if he should afterwards lose the same through
eviction, the guarantor is released. (1849)

Art. 2078. A release made by the creditor in favor of one of the guarantors,
without the consent of the others, benefits all to the extent of the share of
the guarantor to whom it has been granted. (1850)

Art. 2079. An extension granted to the debtor by the creditor without the
consent of the guarantor extinguishes the guaranty. The mere failure on the
part of the creditor to demand payment after the debt has become due does
not of itself constitute any extention of time referred to herein. (1851a)

Art. 2080. The guarantors, even though they be solidary, are released from
their obligation whenever by some act of the creditor they cannot be
subrogated to the rights, mortgages, and preference of the latter. (1852)

Art. 2081. The guarantor may set up against the creditor all the defenses
which pertain to the principal debtor and are inherent in the debt; but not
those that are personal to the debtor. (1853)

CHAPTER 4
LEGAL AND JUDICIAL BONDS
Art. 2082. The bondsman who is to be offered in virtue of a provision of law
or of a judicial order shall have the qualifications prescribed in Article 2056
and in special laws. (1854a)

Art. 2083. If the person bound to give a bond in the cases of the preceding
article, should not be able to do so, a pledge or mortgage considered
sufficient to cover his obligation shall be admitted in lieu thereof. (1855)

Art. 2084. A judicial bondsman cannot demand the exhaustion of the

property of the principal debtor.

A sub-surety in the same case, cannot demand the exhaustion of the

property of the debtor of the surety.

Title XVI. - PLEDGE, MORTGAGE AND ANTICHRESIS

CHAPTER 1
PROVISIONS COMMON TO PLEDGE AND MORTGAGE

Art. 2085. The following requisites are essential to the contracts of pledge
and mortgage:
(1) That they be constituted to secure the fulfillment of a principal
obligation;

(2) That the pledgor or mortgagor be the absolute owner of the thing
pledged or mortgaged;

(3) That the persons constituting the pledge or mortgage have the free
disposal of their property, and in the absence thereof, that they be
legally authorized for the purpose.

Third persons who are not parties to the principal obligation may secure
the latter by pledging or mortgaging their own property. (1857)

Art. 2086. The provisions of Article 2052 are applicable to a pledge or

mortgage. (n)

Art. 2087. It is also of the essence of these contracts that when the principal
obligation becomes due, the things in which the pledge or mortgage consists
may be alienated for the payment to the creditor. (1858)

Art. 2088. The creditor cannot appropriate the things given by way of
pledge or mortgage, or dispose of them. Any stipulation to the contrary is
null and void. (1859a)
Art. 2089. A pledge or mortgage is indivisible, even though the debt may be
divided among the successors in interest of the debtor or of the creditor.

Therefore, the debtor's heir who has paid a part of the debt cannot ask for
the proportionate extinguishment of the pledge or mortgage as long as the
debt is not completely satisfied.

Neither can the creditor's heir who received his share of the debt return the
pledge or cancel the mortgage, to the prejudice of the other heirs who have
not been paid.

From these provisions is expected the case in which, there being several
things given in mortgage or pledge, each one of them guarantees only a
determinate portion of the credit.

The debtor, in this case, shall have a right to the extinguishment of the
pledge or mortgage as the portion of the debt for which each thing is
specially answerable is satisfied. (1860)

Art. 2090. The indivisibility of a pledge or mortgage is not affected by the

fact that the debtors are not solidarily liable. (n)

Art. 2091. The contract of pledge or mortgage may secure all kinds of
obligations, be they pure or subject to a suspensive or resolutory condition.
(1861)

Art. 2092. A promise to constitute a pledge or mortgage gives rise only to a

personal action between the contracting parties, without prejudice to the
criminal responsibility incurred by him who defrauds another, by offering
in pledge or mortgage as unencumbered, things which he knew were
subject to some burden, or by misrepresenting himself to be the owner of
the same. (1862)

CHAPTER 2
PLEDGE

Art. 2093. In addition to the requisites prescribed in Article 2085, it is

necessary, in order to constitute the contract of pledge, that the thing
pledged be placed in the possession of the creditor, or of a third person by
common agreement. (1863)

Art. 2094. All movables which are within commerce may be pledged,
provided they are susceptible of possession. (1864)

Art. 2095. Incorporeal rights, evidenced by negotiable instruments, bills of

lading, shares of stock, bonds, warehouse receipts and similar documents
may also be pledged. The instrument proving the right pledged shall be
delivered to the creditor, and if negotiable, must be indorsed. (n)

Art. 2096. A pledge shall not take effect against third persons if a
description of the thing pledged and the date of the pledge do not appear in
a public instrument. (1865a)

Art. 2097. With the consent of the pledgee, the thing pledged may be
alienated by the pledgor or owner, subject to the pledge. The ownership of
the thing pledged is transmitted to the vendee or transferee as soon as the
pledgee consents to the alienation, but the latter shall continue in
possession. (n)

Art. 2098. The contract of pledge gives a right to the creditor to retain the
thing in his possession or in that of a third person to whom it has been
delivered, until the debt is paid. (1866a)

Art. 2099. The creditor shall take care of the thing pledged with the
diligence of a good father of a family; he has a right to the reimbursement of
the expenses made for its preservation, and is liable for its loss or
deterioration, in conformity with the provisions of this Code. (1867)

Art. 2100. The pledgee cannot deposit the thing pledged with a third person,
unless there is a stipulation authorizing him to do so.

The pledgee is responsible for the acts of his agents or employees with
respect to the thing pledged. (n)

Art. 2101. The pledgor has the same responsibility as a bailor in

commodatum in the case under Article 1951. (n)

Art. 2102. If the pledge earns or produces fruits, income, dividends, or

interests, the creditor shall compensate what he receives with those which
are owing him; but if none are owing him, or insofar as the amount may
exceed that which is due, he shall apply it to the principal. Unless there is a
stipulation to the contrary, the pledge shall extend to the interest and
earnings of the right pledged.

In case of a pledge of animals, their offspring shall pertain to the pledgor or

owner of animals pledged, but shall be subject to the pledge, if there is no
stipulation to the contrary. (1868a)

Art. 2103. Unless the thing pledged is expropriated, the debtor continues to
be the owner thereof.
Nevertheless, the creditor may bring the actions which pertain to the owner
of the thing pledged in order to recover it from, or defend it against a third
person. (1869)

Art. 2104. The creditor cannot use the thing pledged, without the authority
of the owner, and if he should do so, or should misuse the thing in any other
way, the owner may ask that it be judicially or extrajudicially deposited.
When the preservation of the thing pledged requires its use, it must be used
by the creditor but only for that purpose. (1870a)

Art. 2105. The debtor cannot ask for the return of the thing pledged against
the will of the creditor, unless and until he has paid the debt and its
interest, with expenses in a proper case. (1871)

Art. 2106. If through the negligence or wilful act of the pledgee, the thing
pledged is in danger of being lost or impaired, the pledgor may require that
it be deposited with a third person. (n)

Art. 2107. If there are reasonable grounds to fear the destruction or

impairment of the thing pledged, without the fault of the pledgee, the
pledgor may demand the return of the thing, upon offering another thing in
pledge, provided the latter is of the same kind as the former and not of
inferior quality, and without prejudice to the right of the pledgee under the
provisions of the following article.

The pledgee is bound to advise the pledgor, without delay, of any danger to
the thing pledged. (n)

Art. 2108. If, without the fault of the pledgee, there is danger of destruction,
impairment, or diminution in value of the thing pledged, he may cause the
same to be sold at a public sale. The proceeds of the auction shall be a
security for the principal obligation in the same manner as the thing
originally pledged. (n)

Art. 2109. If the creditor is deceived on the substance or quality of the thing
pledged, he may either claim another thing in its stead, or demand
immediate payment of the principal obligation. (n)

Art. 2110. If the thing pledged is returned by the pledgee to the pledgor or
owner, the pledge is extinguished. Any stipulation to the contrary shall be
void.

If subsequent to the perfection of the pledge, the thing is in the possession

of the pledgor or owner, there is a prima facie presumption that the same
has been returned by the pledgee. This same presumption exists if the thing
pledged is in the possession of a third person who has received it from the
pledgor or owner after the constitution of the pledge. (n)
Art. 2111. A statement in writing by the pledgee that he renounces or
abandons the pledge is sufficient to extinguish the pledge. For this purpose,
neither the acceptance by the pledgor or owner, nor the return of the thing
pledged is necessary, the pledgee becoming a depositary. (n)

Art. 2112. The creditor to whom the credit has not been satisfied in due
time, may proceed before a Notary Public to the sale of the thing pledged.
This sale shall be made at a public auction, and with notification to the
debtor and the owner of the thing pledged in a proper case, stating the
amount for which the public sale is to be held. If at the first auction the
thing is not sold, a second one with the same formalities shall be held; and
if at the second auction there is no sale either, the creditor may appropriate
the thing pledged. In this case he shall be obliged to give an acquittance for
his entire claim. (1872a)

Art. 2113. At the public auction, the pledgor or owner may bid. He shall,
moreover, have a better right if he should offer the same terms as the
highest bidder.

The pledgee may also bid, but his offer shall not be valid if he is the only
bidder. (n)

Art. 2114. All bids at the public auction shall offer to pay the purchase price
at once. If any other bid is accepted, the pledgee is deemed to have been
received the purchase price, as far as the pledgor or owner is concerned. (n)

Art. 2115. The sale of the thing pledged shall extinguish the principal
obligation, whether or not the proceeds of the sale are equal to the amount
of the principal obligation, interest and expenses in a proper case. If the
price of the sale is more than said amount, the debtor shall not be entitled
to the excess, unless it is otherwise agreed. If the price of the sale is less,
neither shall the creditor be entitled to recover the deficiency,
notwithstanding any stipulation to the contrary. (n)

Art. 2116. After the public auction, the pledgee shall promptly advise the
pledgor or owner of the result thereof. (n)

Art. 2117. Any third person who has any right in or to the thing pledged may
satisfy the principal obligation as soon as the latter becomes due and
demandable.(n)

Art. 2118. If a credit which has been pledged becomes due before it is
redeemed, the pledgee may collect and receive the amount due. He shall
apply the same to the payment of his claim, and deliver the surplus, should
there be any, to the pledgor. (n)
Art. 2119. If two or more things are pledged, the pledgee may choose which
he will cause to be sold, unless there is a stipulation to the contrary. He may
demand the sale of only as many of the things as are necessary for the
payment of the debt. (n)

Art. 2120. If a third party secures an obligation by pledging his own

movable property under the provisions of Article 2085 he shall have the
same rights as a guarantor under Articles 2066 to 2070, and Articles 2077
to 2081. He is not prejudiced by any waiver of defense by the principal
obligor. (n)

Art. 2121. Pledges created by operation of law, such as those referred to in

Articles 546, 1731, and 1994, are governed by the foregoing articles on the
possession, care and sale of the thing as well as on the termination of the
pledge. However, after payment of the debt and expenses, the remainder of
the price of the sale shall be delivered to the obligor. (n)

Art. 2122. A thing under a pledge by operation of law may be sold only after
demand of the amount for which the thing is retained. The public auction
shall take place within one month after such demand. If, without just
grounds, the creditor does not cause the public sale to be held within such
period, the debtor may require the return of the thing. (n)

Art. 2123. With regard to pawnshops and other establishments, which are
engaged in making loans secured by pledges, the special laws and
regulations concerning them shall be observed, and subsidiarily, the
provisions of this Title. (1873a)

CHAPTER 3
MORTGAGE

Art. 2124. Only the following property may be the object of a contract of
mortgage:
(1) Immovables;

(2) Alienable real rights in accordance with the laws, imposed upon
immovables.

Nevertheless, movables may be the object of a chattel mortgage. (1874a)

Art. 2125. In addition to the requisites stated in Article 2085, it is

indispensable, in order that a mortgage may be validly constituted, that the
document in which it appears be recorded in the Registry of Property. If the
instrument is not recorded, the mortgage is nevertheless binding between
the parties.
The persons in whose favor the law establishes a mortgage have no other
right than to demand the execution and the recording of the document in
which the mortgage is formalized. (1875a)

Art. 2126. The mortgage directly and immediately subjects the property
upon which it is imposed, whoever the possessor may be, to the fulfillment
of the obligation for whose security it was constituted. (1876)

Art. 2127. The mortgage extends to the natural accessions, to the

improvements, growing fruits, and the rents or income not yet received
when the obligation becomes due, and to the amount of the indemnity
granted or owing to the proprietor from the insurers of the property
mortgaged, or in virtue of expropriation for public use, with the
declarations, amplifications and limitations established by law, whether the
estate remains in the possession of the mortgagor, or it passes into the
hands of a third person. (1877)

Art. 2128. The mortgage credit may be alienated or assigned to a third

person, in whole or in part, with the formalities required by law. (1878)

Art. 2129. The creditor may claim from a third person in possession of the
mortgaged property, the payment of the part of the credit secured by the
property which said third person possesses, in the terms and with the
formalities which the law establishes. (1879)

Art. 2130. A stipulation forbidding the owner from alienating the

immovable mortgaged shall be void. (n)

Art. 2131. The form, extent and consequences of a mortgage, both as to its
constitution, modification and extinguishment, and as to other matters not
included in this Chapter, shall be governed by the provisions of the
Mortgage Law and of the Land Registration Law. (1880a)

CHAPTER 4
ANTICHRESIS

Art. 2132. By the contract of antichresis the creditor acquires the right to
receive the fruits of an immovable of his debtor, with the obligation to apply
them to the payment of the interest, if owing, and thereafter to the principal
of his credit. (1881)

Art. 2133. The actual market value of the fruits at the time of the application
thereof to the interest and principal shall be the measure of such
application. (n)
Art. 2134. The amount of the principal and of the interest shall be specified
in writing; otherwise, the contract of antichresis shall be void. (n)

Art. 2135. The creditor, unless there is a stipulation to the contrary, is

obliged to pay the taxes and charges upon the estate.

He is also bound to bear the expenses necessary for its preservation and
repair.

The sums spent for the purposes stated in this article shall be deducted
from the fruits. (1882)

Art. 2136. The debtor cannot reacquire the enjoyment of the immovable
without first having totally paid what he owes the creditor.

But the latter, in order to exempt himself from the obligations imposed
upon him by the preceding article, may always compel the debtor to enter
again upon the enjoyment of the property, except when there is a
stipulation to the contrary. (1883)

Art. 2137. The creditor does not acquire the ownership of the real estate for
non-payment of the debt within the period agreed upon.

Every stipulation to the contrary shall be void. But the creditor may petition
the court for the payment of the debt or the sale of the real property. In this
case, the Rules of Court on the foreclosure of mortgages shall apply.
(1884a)

Art. 2138. The contracting parties may stipulate that the interest upon the
debt be compensated with the fruits of the property which is the object of
the antichresis, provided that if the value of the fruits should exceed the
amount of interest allowed by the laws against usury, the excess shall be
applied to the principal. (1885a)

Art. 2139. The last paragraph of Article 2085, and Articles 2089 to 2091 are
applicable to this contract. (1886a)

CHAPTER 5
CHATTEL MORTGAGE

Art. 2140. By a chattel mortgage, personal property is recorded in the

Chattel Mortgage Register as a security for the performance of an
obligation. If the movable, instead of being recorded, is delivered to the
creditor or a third person, the contract is a pledge and not a chattel
mortgage. (n)
Art. 2141. The provisions of this Code on pledge, insofar as they are not in
conflict with the Chattel Mortgage Law shall be applicable to chattel
mortgages. (n)

Title XVII. - EXTRA-CONTRACTUAL OBLIGATIONS

CHAPTER 1
QUASI-CONTRACTS

Art. 2142. Certain lawful, voluntary and unilateral acts give rise to the
juridical relation of quasi-contract to the end that no one shall be unjustly
enriched or benefited at the expense of another. (n)

Art. 2143. The provisions for quasi-contracts in this Chapter do not exclude
other quasi-contracts which may come within the purview of the preceding
article. (n)

SECTION 1. - Negotiorum Gestio

Art. 2144. Whoever voluntarily takes charge of the agency or management

of the business or property of another, without any power from the latter, is
obliged to continue the same until the termination of the affair and its
incidents, or to require the person concerned to substitute him, if the
owner is in a position to do so. This juridical relation does not arise in
either of these instances:
(1) When the property or business is not neglected or abandoned;

(2) If in fact the manager has been tacitly authorized by the owner.

In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404
regarding unauthorized contracts shall govern.

In the second case, the rules on agency in Title X of this Book shall be
applicable. (1888a)

Art. 2145. The officious manager shall perform his duties with all the
diligence of a good father of a family, and pay the damages which through
his fault or negligence may be suffered by the owner of the property or
business under management.

The courts may, however, increase or moderate the indemnity according to

the circumstances of each case. (1889a)
Art. 2146. If the officious manager delegates to another person all or some
of his duties, he shall be liable for the acts of the delegate, without prejudice
to the direct obligation of the latter toward the owner of the business.

The responsibility of two or more officious managers shall be solidary,

unless the management was assumed to save the thing or business from
imminent danger. (1890a)

Art. 2147. The officious manager shall be liable for any fortuitous event:

(1) If he undertakes risky operations which the owner was not

accustomed to embark upon;

(2) If he has preferred his own interest to that of the owner;

(3) If he fails to return the property or business after demand by the

owner;

(4) If he assumed the management in bad faith. (1891a)

Art. 2148. Except when the management was assumed to save property or
business from imminent danger, the officious manager shall be liable for
fortuitous events:
(1) If he is manifestly unfit to carry on the management;

(2) If by his intervention he prevented a more competent person from

taking up the management. (n)

Art. 2149. The ratification of the management by the owner of the business
produces the effects of an express agency, even if the business may not have
been successful. (1892a)

Art. 2150. Although the officious management may not have been expressly
ratified, the owner of the property or business who enjoys the advantages of
the same shall be liable for obligations incurred in his interest, and shall
reimburse the officious manager for the necessary and useful expenses and
for the damages which the latter may have suffered in the performance of
his duties.

The same obligation shall be incumbent upon him when the management
had for its purpose the prevention of an imminent and manifest loss,
although no benefit may have been derived. (1893)

Art. 2151. Even though the owner did not derive any benefit and there has
been no imminent and manifest danger to the property or business, the
owner is liable as under the first paragraph of the preceding article,
provided:
 (1) The officious manager has acted in good faith, and

(2) The property or business is intact, ready to be returned to the

owner. (n)

Art. 2152. The officious manager is personally liable for contracts which he
has entered into with third persons, even though he acted in the name of
the owner, and there shall be no right of action between the owner and
third persons. These provisions shall not apply:
(1) If the owner has expressly or tacitly ratified the management, or

(2) When the contract refers to things pertaining to the owner of the
business. (n)

Art. 2153. The management is extinguished:

(1) When the owner repudiates it or puts an end thereto;

(2) When the officious manager withdraws from the management,

subject to the provisions of Article 2144;

(3) By the death, civil interdiction, insanity or insolvency of the owner

or the officious manager. (n)

SECTION 2. - Solutio Indebiti

Art. 2154. If something is received when there is no right to demand it, and
it was unduly delivered through mistake, the obligation to return it arises.
(1895)

Art. 2155. Payment by reason of a mistake in the construction or application

of a doubtful or difficult question of law may come within the scope of the
preceding article. (n)

Art. 2156. If the payer was in doubt whether the debt was due, he may
recover if he proves that it was not due. (n)

Art. 2157. The responsibility of two or more payees, when there has been
payment of what is not due, is solidary. (n)

Art. 2158. When the property delivered or money paid belongs to a third
person, the payee shall comply with the provisions of article 1984. (n)

Art. 2159. Whoever in bad faith accepts an undue payment, shall pay legal
interest if a sum of money is involved, or shall be liable for fruits received
or which should have been received if the thing produces fruits.
He shall furthermore be answerable for any loss or impairment of the thing
from any cause, and for damages to the person who delivered the thing,
until it is recovered. (1896a)

Art. 2160. He who in good faith accepts an undue payment of a thing certain
and determinate shall only be responsible for the impairment or loss of the
same or its accessories and accessions insofar as he has thereby been
benefited. If he has alienated it, he shall return the price or assign the
action to collect the sum. (1897)

Art. 2161. As regards the reimbursement for improvements and expenses

incurred by him who unduly received the thing, the provisions of Title V of
Book II shall govern. (1898)

Art. 2162. He shall be exempt from the obligation to restore who, believing
in good faith that the payment was being made of a legitimate and
subsisting claim, destroyed the document, or allowed the action to
prescribe, or gave up the pledges, or cancelled the guaranties for his right.
He who paid unduly may proceed only against the true debtor or the
guarantors with regard to whom the action is still effective. (1899)

Art. 2163. It is presumed that there was a mistake in the payment if

something which had never been due or had already been paid was
delivered; but he from whom the return is claimed may prove that the
delivery was made out of liberality or for any other just cause. (1901)

SECTION 3. - Other Quasi-Contracts

Art. 2164. When, without the knowledge of the person obliged to give
support, it is given by a stranger, the latter shall have a right to claim the
same from the former, unless it appears that he gave it out of piety and
without intention of being repaid. (1894a)

Art. 2165. When funeral expenses are borne by a third person, without the
knowledge of those relatives who were obliged to give support to the
deceased, said relatives shall reimburse the third person, should the latter
claim reimbursement. (1894a)

Art. 2166. When the person obliged to support an orphan, or an insane or

other indigent person unjustly refuses to give support to the latter, any
third person may furnish support to the needy individual, with right of
reimbursement from the person obliged to give support. The provisions of
this article apply when the father or mother of a child under eighteen years
of age unjustly refuses to support him.
Art. 2167. When through an accident or other cause a person is injured or
becomes seriously ill, and he is treated or helped while he is not in a
condition to give consent to a contract, he shall be liable to pay for the
services of the physician or other person aiding him, unless the service has
been rendered out of pure generosity.

Art. 2168. When during a fire, flood, storm, or other calamity, property is
saved from destruction by another person without the knowledge of the
owner, the latter is bound to pay the former just compensation.

Art. 2169. When the government, upon the failure of any person to comply
with health or safety regulations concerning property, undertakes to do the
necessary work, even over his objection, he shall be liable to pay the
expenses.

Art. 2170. When by accident or other fortuitous event, movables separately

pertaining to two or more persons are commingled or confused, the rules
on co-ownership shall be applicable.

Art. 2171. The rights and obligations of the finder of lost personal property
shall be governed by Articles 719 and 720.

Art. 2172. The right of every possessor in good faith to reimbursement for
necessary and useful expenses is governed by Article 546.

Art. 2173. When a third person, without the knowledge of the debtor, pays
the debt, the rights of the former are governed by Articles 1236 and 1237.

Art. 2174. When in a small community a nationality of the inhabitants of age

decide upon a measure for protection against lawlessness, fire, flood, storm
or other calamity, any one who objects to the plan and refuses to contribute
to the expenses but is benefited by the project as executed shall be liable to
pay his share of said expenses.

Art. 2175. Any person who is constrained to pay the taxes of another shall be
entitled to reimbursement from the latter.

CHAPTER 2
QUASI-DELICTS

Art. 2176. Whoever by act or omission causes damage to another, there

being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
Chapter. (1902a)
Art. 2177. Responsibility for fault or negligence under the preceding article
is entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. But the plaintiff cannot recover damages
twice for the same act or omission of the defendant. (n)

Art. 2178. The provisions of Articles 1172 to 1174 are also applicable to a
quasi-delict. (n)

Art. 2179. When the plaintiff's own negligence was the immediate and
proximate cause of his injury, he cannot recover damages. But if his
negligence was only contributory, the immediate and proximate cause of
the injury being the defendant's lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the damages to be awarded. (n)

Art. 2180. The obligation imposed by Article 2176 is demandable not only
for one's own acts or omissions, but also for those of persons for whom one
is responsible.

The father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in their
company.

Guardians are liable for damages caused by the minors or incapacitated

persons who are under their authority and live in their company.

The owners and managers of an establishment or enterprise are likewise

responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their
functions.

Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry.

The State is responsible in like manner when it acts through a special agent;
but not when the damage has been caused by the official to whom the task
done properly pertains, in which case what is provided in Article 2176 shall
be applicable.

Lastly, teachers or heads of establishments of arts and trades shall be liable

for damages caused by their pupils and students or apprentices, so long as
they remain in their custody.

The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damage. (1903a)
Art. 2181. Whoever pays for the damage caused by his dependents or
employees may recover from the latter what he has paid or delivered in
satisfaction of the claim. (1904)

Art. 2182. If the minor or insane person causing damage has no parents or
guardian, the minor or insane person shall be answerable with his own
property in an action against him where a guardian ad litem shall be
appointed. (n)

Art. 2183. The possessor of an animal or whoever may make use of the same
is responsible for the damage which it may cause, although it may escape or
be lost. This responsibility shall cease only in case the damage should come
from force majeure or from the fault of the person who has suffered
damage. (1905)

Art. 2184. In motor vehicle mishaps, the owner is solidarily liable with his
driver, if the former, who was in the vehicle, could have, by the use of the
due diligence, prevented the misfortune. It is disputably presumed that a
driver was negligent, if he had been found guilty or reckless driving or
violating traffic regulations at least twice within the next preceding two
months.

If the owner was not in the motor vehicle, the provisions of Article 2180 are
applicable. (n)

Art. 2185. Unless there is proof to the contrary, it is presumed that a person
driving a motor vehicle has been negligent if at the time of the mishap, he
was violating any traffic regulation. (n)

Art. 2186. Every owner of a motor vehicle shall file with the proper
government office a bond executed by a government-controlled corporation
or office, to answer for damages to third persons. The amount of the bond
and other terms shall be fixed by the competent public official. (n)

Art. 2187. Manufacturers and processors of foodstuffs, drinks, toilet

articles and similar goods shall be liable for death or injuries caused by any
noxious or harmful substances used, although no contractual relation
exists between them and the consumers. (n)

Art. 2188. There is prima facie presumption of negligence on the part of the
defendant if the death or injury results from his possession of dangerous
weapons or substances, such as firearms and poison, except when the
possession or use thereof is indispensable in his occupation or business. (n)

Art. 2189. Provinces, cities and municipalities shall be liable for damages
for the death of, or injuries suffered by, any person by reason of the
defective condition of roads, streets, bridges, public buildings, and other
public works under their control or supervision. (n)

Art. 2190. The proprietor of a building or structure is responsible for the

damages resulting from its total or partial collapse, if it should be due to the
lack of necessary repairs. (1907)

Art. 2191. Proprietors shall also be responsible for damages caused:

(1) By the explosion of machinery which has not been taken care of
with due diligence, and the inflammation of explosive substances
which have not been kept in a safe and adequate place;

(2) By excessive smoke, which may be harmful to persons or

property;

(3) By the falling of trees situated at or near highways or lanes, if not

caused by force majeure;

(4) By emanations from tubes, canals, sewers or deposits of infectious

matter, constructed without precautions suitable to the place. (1908)

Art. 2192. If damage referred to in the two preceding articles should be the
result of any defect in the construction mentioned in Article 1723, the third
person suffering damages may proceed only against the engineer or
architect or contractor in accordance with said article, within the period
therein fixed. (1909)

Art. 2193. The head of a family that lives in a building or a part thereof, is
responsible for damages caused by things thrown or falling from the same.
(1910)

Art. 2194. The responsibility of two or more persons who are liable for
quasi-delict is solidary. (n)

Title XVIII. - DAMAGES

CHAPTER 1
GENERAL PROVISIONS

Art. 2195. The provisions of this Title shall be respectively applicable to all
obligations mentioned in Article 1157.

Art. 2196. The rules under this Title are without prejudice to special
provisions on damages formulated elsewhere in this Code. Compensation
for workmen and other employees in case of death, injury or illness is
regulated by special laws. Rules governing damages laid down in other laws
shall be observed insofar as they are not in conflict with this Code.

Art. 2197. Damages may be:

(1) Actual or compensatory;

(2) Moral;

(3) Nominal;

(4) Temperate or moderate;

(5) Liquidated; or

(6) Exemplary or corrective.

Art. 2198. The principles of the general law on damages are hereby adopted
insofar as they are not inconsistent with this Code.

CHAPTER 2
ACTUAL OR COMPENSATORY DAMAGES

Art. 2199. Except as provided by law or by stipulation, one is entitled to an

adequate compensation only for such pecuniary loss suffered by him as he
has duly proved. Such compensation is referred to as actual or
compensatory damages.

Art. 2200. Indemnification for damages shall comprehend not only the
value of the loss suffered, but also that of the profits which the obligee
failed to obtain. (1106)

Art. 2201. In contracts and quasi-contracts, the damages for which the
obligor who acted in good faith is liable shall be those that are the natural
and probable consequences of the breach of the obligation, and which the
parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the non-
performance of the obligation. (1107a)

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all
damages which are the natural and probable consequences of the act or
omission complained of. It is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the defendant.
Art. 2203. The party suffering loss or injury must exercise the diligence of a
good father of a family to minimize the damages resulting from the act or
omission in question.

Art. 2204. In crimes, the damages to be adjudicated may be respectively

increased or lessened according to the aggravating or mitigating
circumstances.

Art. 2205. Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary

or permanent personal injury;

(2) For injury to the plaintiff's business standing or commercial

credit.

Art. 2206. The amount of damages for death caused by a crime or quasi-
delict shall be at least three thousand pesos, even though there may have
been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the
latter; such indemnity shall in every case be assessed and awarded by
the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the
time of his death;

(2) If the deceased was obliged to give support according to the

provisions of Article 291, the recipient who is not an heir called to the
decedent's inheritance by the law of testate or intestate succession,
may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court;

(3) The spouse, legitimate and illegitimate descendants and

ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.

Art. 2207. If the plaintiff's property has been insured, and he has received
indemnity from the insurance company for the injury or loss arising out of
the wrong or breach of contract complained of, the insurance company
shall be subrogated to the rights of the insured against the wrongdoer or
the person who has violated the contract. If the amount paid by the
insurance company does not fully cover the injury or loss, the aggrieved
party shall be entitled to recover the deficiency from the person causing the
loss or injury.

Art. 2208. In the absence of stipulation, attorney's fees and expenses of

litigation, other than judicial costs, cannot be recovered, except:
 (1) When exemplary damages are awarded;

(2) When the defendant's act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his
interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against

the plaintiff;

(5) Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff's plainly valid, just and demandable
claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers

and skilled workers;

(8) In actions for indemnity under workmen's compensation and

employer's liability laws;

(9) In a separate civil action to recover civil liability arising from a

crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be

reasonable.

Art. 2209. If the obligation consists in the payment of a sum of money, and
the debtor incurs in delay, the indemnity for damages, there being no
stipulation to the contrary, shall be the payment of the interest agreed
upon, and in the absence of stipulation, the legal interest, which is six per
cent per annum. (1108)

Art. 2210. Interest may, in the discretion of the court, be allowed upon
damages awarded for breach of contract.

Art. 2211. In crimes and quasi-delicts, interest as a part of the damages may,
in a proper case, be adjudicated in the discretion of the court.
Art. 2212. Interest due shall earn legal interest from the time it is judicially
demanded, although the obligation may be silent upon this point. (1109a)

Art. 2213. Interest cannot be recovered upon unliquidated claims or

damages, except when the demand can be established with reasonably
certainty.

Art. 2214. In quasi-delicts, the contributory negligence of the plaintiff shall

reduce the damages that he may recover.

Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may

equitably mitigate the damages under circumstances other than the case
referred to in the preceding article, as in the following instances:

(1) That the plaintiff himself has contravened the terms of the
contract;

(2) That the plaintiff has derived some benefit as a result of the
contract;

(3) In cases where exemplary damages are to be awarded, that the

defendant acted upon the advice of counsel;

(4) That the loss would have resulted in any event;

(5) That since the filing of the action, the defendant has done his best
to lessen the plaintiff's loss or injury.

CHAPTER 3
OTHER KINDS OF DAMAGES

Art. 2216. No proof of pecuniary loss is necessary in order that moral,

nominal, temperate, liquidated or exemplary damages, may be adjudicated.
The assessment of such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances of each case.

SECTION 1. - Moral Damages

Art. 2217. Moral damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation, and similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are the proximate
result of the defendant's wrongful act for omission.

Art. 2218. In the adjudication of moral damages, the sentimental value of

property, real or personal, may be considered.
Art. 2219. Moral damages may be recovered in the following and analogous
cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in Article 309;

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32,
34, and 35.

The parents of the female seduced, abducted, raped, or abused, referred to

in No. 3 of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring
the action mentioned in No. 9 of this article, in the order named.

Art. 2220. Willful injury to property may be a legal ground for awarding
moral damages if the court should find that, under the circumstances, such
damages are justly due. The same rule applies to breaches of contract where
the defendant acted fraudulently or in bad faith.

SECTION 2. - Nominal Damages

Art. 2221. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.

Art. 2222. The court may award nominal damages in every obligation
arising from any source enumerated in Article 1157, or in every case where
any property right has been invaded.
Art. 2223. The adjudication of nominal damages shall preclude further
contest upon the right involved and all accessory questions, as between the
parties to the suit, or their respective heirs and assigns.

SECTION 3. - Temperate or Moderate Damages

Art. 2224. Temperate or moderate damages, which are more than nominal
but less than compensatory damages, may be recovered when the court
finds that some pecuniary loss has been suffered but its amount can not,
from the nature of the case, be provided with certainty.

Art. 2225. Temperate damages must be reasonable under the

circumstances.

SECTION 4. - Liquidated Damages

Art. 2226. Liquidated damages are those agreed upon by the parties to a
contract, to be paid in case of breach thereof.

Art. 2227. Liquidated damages, whether intended as an indemnity or a

penalty, shall be equitably reduced if they are iniquitous or unconscionable.

Art. 2228. When the breach of the contract committed by the defendant is
not the one contemplated by the parties in agreeing upon the liquidated
damages, the law shall determine the measure of damages, and not the
stipulation.

SECTION 5. - Exemplary or Corrective Damages

Art. 2229. Exemplary or corrective damages are imposed, by way of

example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.

Art. 2230. In criminal offenses, exemplary damages as a part of the civil

liability may be imposed when the crime was committed with one or more
aggravating circumstances. Such damages are separate and distinct from
fines and shall be paid to the offended party.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the

defendant acted with gross negligence.

Art. 2232. In contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.
Art. 2233. Exemplary damages cannot be recovered as a matter of right; the
court will decide whether or not they should be adjudicated.

Art. 2234. While the amount of the exemplary damages need not be proved,
the plaintiff must show that he is entitled to moral, temperate or
compensatory damages before the court may consider the question of
whether or not exemplary damages should be awarded. In case liquidated
damages have been agreed upon, although no proof of loss is necessary in
order that such liquidated damages may be recovered, nevertheless, before
the court may consider the question of granting exemplary in addition to
the liquidated damages, the plaintiff must show that he would be entitled to
moral, temperate or compensatory damages were it not for the stipulation
for liquidated damages.

Art. 2235. A stipulation whereby exemplary damages are renounced in

advance shall be null and void.

Title XIX. - CONCURRENCE AND PREFERENCE

OF CREDITS

CHAPTER 1
GENERAL PROVISIONS

Art. 2236. The debtor is liable with all his property, present and future, for
the fulfillment of his obligations, subject to the exemptions provided by law.
(1911a)

Art. 2237. Insolvency shall be governed by special laws insofar as they are
not inconsistent with this Code. (n)

Art. 2238. So long as the conjugal partnership or absolute community

subsists, its property shall not be among the assets to be taken possession of
by the assignee for the payment of the insolvent debtor's obligations, except
insofar as the latter have redounded to the benefit of the family. If it is the
husband who is insolvent, the administration of the conjugal partnership of
absolute community may, by order of the court, be transferred to the wife
or to a third person other than the assignee. (n)

Art. 2239. If there is property, other than that mentioned in the preceding
article, owned by two or more persons, one of whom is the insolvent debtor,
his undivided share or interest therein shall be among the assets to be taken
possession of by the assignee for the payment of the insolvent debtor's
obligations. (n)
Art. 2240. Property held by the insolvent debtor as a trustee of an express
or implied trust, shall be excluded from the insolvency proceedings. (n)

CHAPTER 2
CLASSIFICATION OF CREDITS

Art. 2241. With reference to specific movable property of the debtor, the
following claims or liens shall be preferred:
(1) Duties, taxes and fees due thereon to the State or any subdivision
thereof;

(2) Claims arising from misappropriation, breach of trust, or

malfeasance by public officials committed in the performance of their
duties, on the movables, money or securities obtained by them;

(3) Claims for the unpaid price of movables sold, on said movables, so
long as they are in the possession of the debtor, up to the value of the
same; and if the movable has been resold by the debtor and the price
is still unpaid, the lien may be enforced on the price; this right is not
lost by the immobilization of the thing by destination, provided it has
not lost its form, substance and identity; neither is the right lost by
the sale of the thing together with other property for a lump sum,
when the price thereof can be determined proportionally;

(4) Credits guaranteed with a pledge so long as the things pledged are
in the hands of the creditor, or those guaranteed by a chattel
mortgage, upon the things pledged or mortgaged, up to the value
thereof;

(5) Credits for the making, repair, safekeeping or preservation of

personal property, on the movable thus made, repaired, kept or
possessed;

(6) Claims for laborers' wages, on the goods manufactured or the

work done;

(7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the
contract of tenancy on shares, on the share of each in the fruits or
harvest;

(9) Credits for transportation, upon the goods carried, for the price of
the contract and incidental expenses, until their delivery and for
thirty days thereafter;
 (10) Credits for lodging and supplies usually furnished to travellers by
hotel keepers, on the movables belonging to the guest as long as such
movables are in the hotel, but not for money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest
advanced to the debtor, upon the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the
lessee existing on the immovable leased and on the fruits of the same,
but not on money or instruments of credit;

(13) Claims in favor of the depositor if the depositary has wrongfully

sold the thing deposited, upon the price of the sale.

In the foregoing cases, if the movables to which the lien or preference

attaches have been wrongfully taken, the creditor may demand them
from any possessor, within thirty days from the unlawful seizure.
(1922a)

Art. 2242. With reference to specific immovable property and real rights of
the debtor, the following claims, mortgages and liens shall be preferred,
and shall constitute an encumbrance on the immovable or real right:
(1) Taxes due upon the land or building;

(2) For the unpaid price of real property sold, upon the immovable
sold;

(3) Claims of laborers, masons, mechanics and other workmen, as

well as of architects, engineers and contractors, engaged in the
construction, reconstruction or repair of buildings, canals or other
works, upon said buildings, canals or other works;

(4) Claims of furnishers of materials used in the construction,

reconstruction, or repair of buildings, canals or other works, upon
said buildings, canals or other works;

(5) Mortgage credits recorded in the Registry of Property, upon the

real estate mortgaged;

(6) Expenses for the preservation or improvement of real property

when the law authorizes reimbursement, upon the immovable
preserved or improved;

(7) Credits annotated in the Registry of Property, in virtue of a judicial

order, by attachments or executions, upon the property affected, and
only as to later credits;
 (8) Claims of co-heirs for warranty in the partition of an immovable
among them, upon the real property thus divided;

(9) Claims of donors or real property for pecuniary charges or other

conditions imposed upon the donee, upon the immovable donated;

(10) Credits of insurers, upon the property insured, for the insurance
premium for two years. (1923a)

Art. 2243. The claims or credits enumerated in the two preceding articles
shall be considered as mortgages or pledges of real or personal property, or
liens within the purview of legal provisions governing insolvency. Taxes
mentioned in No. 1, Article 2241, and No. 1, Article 2242, shall first be
satisfied. (n)

Art. 2244. With reference to other property, real and personal, of the
debtor, the following claims or credits shall be preferred in the order
named:

(1) Proper funeral expenses for the debtor, or children under his or
her parental authority who have no property of their own, when
approved by the court;

(2) Credits for services rendered the insolvent by employees,

laborers, or household helpers for one year preceding the
commencement of the proceedings in insolvency;

(3) Expenses during the last illness of the debtor or of his or her
spouse and children under his or her parental authority, if they have
no property of their own;

(4) Compensation due the laborers or their dependents under laws

providing for indemnity for damages in cases of labor accident, or
illness resulting from the nature of the employment;

(5) Credits and advancements made to the debtor for support of

himself or herself, and family, during the last year preceding the
insolvency;

(6) Support during the insolvency proceedings, and for three months
thereafter;

(7) Fines and civil indemnification arising from a criminal offense;

(8) Legal expenses, and expenses incurred in the administration of

the insolvent's estate for the common interest of the creditors, when
properly authorized and approved by the court;
 (9) Taxes and assessments due the national government, other than
those mentioned in Articles 2241, No. 1, and 2242, No. 1;

(10) Taxes and assessments due any province, other than those
referred to in Articles 2241, No. 1, and 2242, No. 1;

(11) Taxes and assessments due any city or municipality, other than
those indicated in Articles 2241, No. 1, and 2242, No. 1;

(12) Damages for death or personal injuries caused by a quasi-delict;

(13) Gifts due to public and private institutions of charity or

beneficence;

(14) Credits which, without special privilege, appear in (a) a public

instrument; or (b) in a final judgment, if they have been the subject of
litigation. These credits shall have preference among themselves in
the order of priority of the dates of the instruments and of the
judgments, respectively. (1924a)

Art. 2245. Credits of any other kind or class, or by any other right or title
not comprised in the four preceding articles, shall enjoy no preference.
(1925)

CHAPTER 3
ORDER OF PREFERENCE OF CREDITS

Art. 2246. Those credits which enjoy preference with respect to specific
movables, exclude all others to the extent of the value of the personal
property to which the preference refers.

Art. 2247. If there are two or more credits with respect to the same specific
movable property, they shall be satisfied pro rata, after the payment of
duties, taxes and fees due the State or any subdivision thereof. (1926a)

Art. 2248. Those credits which enjoy preference in relation to specific real
property or real rights, exclude all others to the extent of the value of the
immovable or real right to which the preference refers.

Art. 2249. If there are two or more credits with respect to the same specific
real property or real rights, they shall be satisfied pro rata, after the
payment of the taxes and assessments upon the immovable property or real
right. (1927a)

Art. 2250. The excess, if any, after the payment of the credits which enjoy
preference with respect to specific property, real or personal, shall be
added to the free property which the debtor may have, for the payment of
the other credits. (1928a)

Art. 2251. Those credits which do not enjoy any preference with respect to
specific property, and those which enjoy preference, as to the amount not
paid, shall be satisfied according to the following rules:

(1) In the order established in Article 2244;

(2) Common credits referred to in Article 2245 shall be paid pro rata
regardless of dates. (1929a)

TRANSITIONAL PROVISIONS

Art. 2252. Changes made and new provisions and rules laid down by this
Code which may prejudice or impair vested or acquired rights in
accordance with the old legislation shall have no retroactive effect.

For the determination of the applicable law in cases which are not specified
elsewhere in this Code, the following articles shall be observed: (Pars. 1 and
2, Transitional Provisions).

Art. 2253. The Civil Code of 1889 and other previous laws shall govern
rights originating, under said laws, from acts done or events which took
place under their regime, even though this Code may regulate them in a
different manner, or may not recognize them. But if a right should be
declared for the first time in this Code, it shall be effective at once, even
though the act or event which gives rise thereto may have been done or may
have occurred under prior legislation, provided said new right does not
prejudice or impair any vested or acquired right, of the same origin. (Rule
1)

Art. 2254. No vested or acquired right can arise from acts or omissions
which are against the law or which infringe upon the rights of others. (n)

Art. 2255. The former laws shall regulate acts and contracts with a
condition or period, which were executed or entered into before the
effectivity of this Code, even though the condition or period may still be
pending at the time this body of laws goes into effect. (n)

Art. 2256. Acts and contracts under the regime of the old laws, if they are
valid in accordance therewith, shall continue to be fully operative as
provided in the same, with the limitations established in these rules. But
the revocation or modification of these acts and contracts after the
beginning of the effectivity of this Code, shall be subject to the provisions of
this new body of laws. (Rule 2a)
Art. 2257. Provisions of this Code which attach a civil sanction or penalty or
a deprivation of rights to acts or omissions which were not penalized by the
former laws, are not applicable to those who, when said laws were in force,
may have executed the act or incurred in the omission forbidden or
condemned by this Code.

If the fault is also punished by the previous legislation, the less severe
sanction shall be applied.

If a continuous or repeated act or omission was commenced before the

beginning of the effectivity of this Code, and the same subsists or is
maintained or repeated after this body of laws has become operative, the
sanction or penalty prescribed in this Code shall be applied, even though
the previous laws may not have provided any sanction or penalty therefor.
(Rule 3a)

Art. 2258. Actions and rights which came into being but were not exercised
before the effectivity of this Code, shall remain in full force in conformity
with the old legislation; but their exercise, duration and the procedure to
enforce them shall be regulated by this Code and by the Rules of Court. If
the exercise of the right or of the action was commenced under the old laws,
but is pending on the date this Code takes effect, and the procedure was
different from that established in this new body of laws, the parties
concerned may choose which method or course to pursue. (Rule 4)

Art. 2259. The capacity of a married woman to execute acts and contracts is
governed by this Code, even if her marriage was celebrated under the
former laws. (n)

Art. 2260. The voluntary recognition of a natural child shall take place
according to this Code, even if the child was born before the effectivity of
this body of laws. (n)

Art. 2261. The exemption prescribed in Article 302 shall also be applicable
to any support, pension or gratuity already existing or granted before this
Code becomes effective. (n)

Art. 2262. Guardians of the property of minors, appointed by the courts

before this Code goes into effect, shall continue to act as such,
notwithstanding the provisions of Article 320. (n)

Art. 2263. Rights to the inheritance of a person who died, with or without a
will, before the effectivity of this Code, shall be governed by the Civil Code
of 1889, by other previous laws, and by the Rules of Court. The inheritance
of those who, with or without a will, die after the beginning of the effectivity
of this Code, shall be adjudicated and distributed in accordance with this
new body of laws and by the Rules of Court; but the testamentary provisions
shall be carried out insofar as they may be permitted by this Code.
Therefore, legitimes, betterments, legacies and bequests shall be respected;
however, their amount shall be reduced if in no other manner can every
compulsory heir be given his full share according to this Code. (Rule 12a)

Art. 2264. The status and rights of natural children by legal fiction referred
to in article 89 and illegitimate children mentioned in Article 287, shall also
be acquired by children born before the effectivity of this Code. (n)

Art. 2265. The right of retention of real or personal property arising after
this Code becomes effective, includes those things which came into the
creditor's possession before said date. (n)

Art. 2266. The following shall have not only prospective but also retroactive
effect:

(1) Article 315, whereby a descendant cannot be compelled, in a

criminal case, to testify against his parents and ascendants;

(2) Articles 101 and 88, providing against collusion in cases of legal
separation and annulment of marriage;

(3) Articles 283, 284, and 289, concerning the proof of illegitimate
filiation;

(4) Article 838, authorizing the probate of a will on petition of the

testator himself;

(5) Articles 1359 to 1369, relative to the reformation of instruments;

(6) Articles 476 to 481, regulating actions to quiet title;

(7) Articles 2029 to 2031, which are designed to promote

compromise. (n)

Art. 2267. The following provisions shall apply not only to future cases but
also to those pending on the date this Code becomes effective:
(1) Article 29, Relative to criminal prosecutions wherein the accused
is acquitted on the ground that his guilt has not been proved beyond
reasonable doubt;

(2) Article 33, concerning cases of defamation, fraud, and physical

injuries. (n)

Art. 2268. Suits between members of the same family which are pending at
the time this Code goes into effect shall be suspended, under such terms as
the court may determine, in order that compromise may be earnestly
sought, or, in case of legal separation proceedings, for the purpose of
effecting, if possible, a reconciliation. (n)

Art. 2269. The principles upon which the preceding transitional provisions
are based shall, by analogy, be applied to cases not specifically regulated by
them. (Rule 13a)

REPEALING CLAUSE

Art. 2270. The following laws and regulations are hereby repealed:
(1) Those parts and provisions of the Civil Code of 1889 which are in
force on the date when this new Civil Code becomes effective:

(2) The provisions of the Code of Commerce governing sales,

partnership, agency, loan, deposit and guaranty;

(3) The provisions of the Code of Civil Procedure on prescription as

far as inconsistent with this Code; and

(4) All laws, Acts, parts of Acts, rules of court, executive orders, and
administrative regulations which are inconsistent with this Code. (n)

Approved, June 18, 1949.

Back to home | Back to main

Table of Contents

 o PRELIMINARY TITLE
Articles 1-36
o BOOK I
Articles 37-413
o BOOK II
Articles 414-711
o BOOK III
Articles 712-1155
o BOOK IV
Articles 1156-2270
o APPENDICES
o

Philippine Laws

o POLITICAL &
INTERNATIONAL LAW
o LABOR LAW
o CIVIL LAW
o TAXATION LAW
o MERCANTILE/
COMMERCIAL LAW
o CRIMINAL LAW
o LEGAL ETHICS & PRACTICAL EXERCISES
o REMEDIAL LAW
o

Related Materials:

REPOSITORY OF LAWS, STATUTES & CODES

PHILIPPINE SUPREME COURT DECISIONS ON-LINE

US SUPREME COURT DECISIONS ON-LINE

 1997-2010 All Rights Reserved . www.chanrobles.com