Oblicon - Provisions Reviewer Pages 1-26 (Print)

8/13/2019 Oblicon - Provisions Reviewer Pages 1-26 (Print)

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OBLIGATIONS

Nature

Definition

1156 An obligationis a juridical necessity to give, to do, or not to do.

Sources

1157 Obligations arise from:(1) a!"(#) $ontracts"(%) &uasi'contracts"() Actsor omissions unis*ed by la!" and(5) &uasi'delicts

115+ Obligations derived from la! are not resumed. Only t*ose eresslydetermined in t*is $ode or in secial la!s are demandable, and s*allbe regulated by t*e recets of t*e la! !*ic* establis*es t*em" andas to !*at *as not been foreseenby t*e rovisions of t*is -oo.

115/ Obligations arising from contracts*ave t*e forceof la!bet!een t*econtracting artiesand s*ould be comlied !it* in good fait*.

1160 Obligations derived from uasi'contractss*all be subject to t*erovisions of $*ater 1, 2itle 34, of t*is -oo.

1161 $ivil obligationsarising from criminal offenses s*all be governed byt*e enalla!s, subject to t*e rovisions of Article #177, and of t*eertinent rovisions of $*ater #, reliminary 2itle, on uman

8elations, and of 2itle 34 of t*is -oo, regulating damages.116# Obligations derived from uasi'delictss*all be governed by t*e

rovisions of $*ater #, 2itle 34 of t*is -oo, and by secial la!s.

#1#(&uasi'contracts)

$ertain la!ful, voluntary, and unilateral actsgive rise to t*e juridicalrelation of uasi'contract to t*e end t*at no one s*all be unjustlyenric*edor benefited at t*e eense of anot*er.

#176(&uasi'delicts)

9*oever by actor omissioncauses damage to anot*er, t*ere beingfault or negligence, is obliged to ay for t*e damagedone. uc* faultor negligence, if t*ere is no re'eisting contractual relationbet!eent*e arties, is called a uasi'delictand is governed by t*e rovisionsof t*is $*ater.

#177 8esonsibilityfor fault or negligence under t*e receding article isentirely searate and distinctfrom civil liabilityarising from negligenceunder t*e enal $ode. -ut t*e laintiff cannotrecover damages t!icefor t*e same act or omission of t*e defendant.

#1+0 2*e obligation imosed by Article #176 is demandablenot only for

one;s o!n acts or omissions, but also for t*ose of ersons for !*omone is resonsible.2*e fat*er, and in case of *is deat*or incaacity, t*e mot*er, areresonsible for t*e damages caused by t*e minor c*ildren!*o liveint*eir comany.


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2*e resonsibilitytreated of in t*is article s*all cease!*en t*eersons *erein mentioned rove t*at t*ey observed all t*e diligenceof a good fat*erof a familyto revent damage.

8$ #1+

8$ #1/

8o$, 8ule 111

Possible Classifications

By enforceability

1#% Obligations are civil or natural. $ivil obligations give a rig*tofactionto comel t*eir erformance. >atural obligations, notbeing based on ositive la! but on euityand natural la!, donot grant a rig*t of action to enforce t*eir erformance, but aftervoluntary fulfillmentby t*e obligor, t*ey aut*ori?e t*e retentionof !*at *as been delivered or rendered by reason t*ereof.ome natural obligations are set fort* in t*e follo!ing articles.

1# 9*en a rig*t to sueuon a civil obligation *as lased byetinctive rescrition, t*e obligor !*o voluntarilyerforms t*econtract cannotrecover !*at *e *as delivered or t*e valueoft*e service *e *as rendered.

1#5 9*en !it*out t*e no!ledgeor against t*e!ill of t*e debtor, at*irderson aysa debt !*ic* t*e obligor is not legally bound to

ay because t*e action t*ereon *as rescribed, but t*e debtorlater voluntarilyreimburses t*e t*irderson, t*e obligorcannotrecover !*at *e *as aid.

1#6 9*en a minorbet!een eighteenand twenty-one*years of age!*o *as entered into a contract!it*outt*e consent of t*earent or guardian, after t*e annulmentof t*e contractvoluntarilyreturns t*e !*ole t*ing or rice received,not!it*standing t*e fact t*at *e *as not been benefitedt*ereby,t*ere is norig*t to demand t*e t*ing or rice t*us returned.

1#7 9*en a minor bet!een eighteen and twenty-one*years of age,!*o *as entered into a contract !it*out t*e consent of t*earent or guardian, voluntarily aysa sum of money or deliversa fungible t*ingin fulfillment of t*e obligation, t*ere s*all be norig*t to recover t*e same from t*e oblige !*o *as sent orconsumed it in good fait*.

1#+ 9*en, after an action to enforce a civil obligation *as failed, t*e

defendant voluntarilyerforms t*e obligation, *e cannotdemandt*e return of !*at *e *as delivered or t*e aymentof t*e valueof t*e service *e *as rendered.

1#/ 9*en a testateor intestate*eir voluntarily ays a debt of t*edecedenteceeding t*e value of t*e roerty !*ic* *e receivedby!ill or by t*e la! of intestacyfrom t*e estateof t*edeceased, t*e ayment is validand cannot be rescindedby t*eayer.

By number of parties

ole @ unilateral

oint @ bilateral

$ollective

1#07 2*e concurrence of t!oor more creditors or of t!o or moredebtorsin one and t*e same obligation does not imly t*at eac*one of t*e former *as a rig*t to demand, or t*at eac* one of t*elatter is bound to render, entire comliance !it* t*e restation.

2*ere is a solidaryliability only !*en t*e obligation eressly sostates, or !*en t*e la! or t*e nature of t*e obligation reuiressolidarity.

1#0+ f from t*e la!, or t*e nature or t*e!ordingof t*e obligations to!*ic* t*e receding article refers t*e contrary does not aear,t*e creditor debt s*all be resumed to be divided into as manys*aresas t*ere are creditorsor debtors, t*e credits or debtsbeing considered distinctfrom one anot*er, subject to t*e 8ulesof $ourt governing t*e multilicity of suits.

By nature of parties undertain!

Bnilateral

8ecirocal

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By presence of conditions

117/(Bnconditional @ ure)

=very obligation !*ose erformancedoes not deend uon afuture or uncertainevent, or uon a ast event unno!n to t*earties, is demandableat once.

=very obligation !*ic* contains a resolutorycondition s*all alsobe demandable, !it*out rejudiceto t*e effectsof t*e*aening of t*e event.

11+0($onditional)eriod

9*en t*e debtor binds*imself to ay!*en *is means ermit*im to do so, t*e obligation s*all be deemed to be one!it* aeriod, subject to t*e rovisions of Article 11/7.

11/% Obligations for !*ose fulfillmenta day *as been fieds*all bedemandableonly !*en t*at daycomes.

Obligations !it* a resolutoryeriod tae effect at once, butterminateuon arrival of t*e daycertain.

A day certainis understood to be t*at !*ic* must necessarilycome, alt*oug* it may not be no!n!*en.

f t*e uncertaintyconsists in !*et*er t*e day !ill come or not,t*e obligation is conditional, and it s*all be regulated by t*erules of t*e receding ection.

11+($onditional)=vent

2*e condition t*at some event *aen at a determinatetimes*all etinguis*t*e obligation as soon as t*e time eiresor if it*as become indubitablet*at t*e event !ill nottae lace.

11+5 2*e condition t*at some event !ill not *aen at a determinatetime s*all render t*e obligation effectivefrom t*e momentt*etime indicated *as elased, or if it *as become evidentt*at t*eevent cannot occur.

f notime *as been fied, t*e condition s*all be deemed fulfilledat suc* time as may *ave robably been contemlated, bearingin mind t*e nature of t*e obligation.

1##6($onditional)enal clause

n obligations !it* a enal clause, t*e enalty s*all substitutet*e indemnityfor damagesand t*e ayment of interestsin caseof noncomliance, if t*ere is nostiulation to t*e contrary.>evert*eless, damages s*all be aid if t*e obligor refusestoay t*e enalty or is guilty of fraudin t*e fulfillment of t*eobligation.

2*e enalty may be enforcedonly !*en it is demandableinaccordance !it* t*e rovisions of t*is $ode.

By "ariability of obli!ation

Cefinitive

11//(Alternative)

A erson alternatively boundby different restationss*allcomletelyerform one of t*em.

2*e creditorcannot be comelled to receive artof one and artof t*e ot*er undertaing.

By di"isibility of obli!ation

1##% 2*e divisibilityor indivisibilityof t*e t*ingst*at are t*e object ofobligations in !*ic* t*ere is only one debtorand only onecreditordoes not alteror modify t*e rovisions of $*ater # oft*is 2itle.

1## Ajoint indivisibleobligation gives rise to indemnityfor damages

from t*e time anyone of t*e debtors does notcomly !it* *isundertaing. 2*e debtors!*o may *ave been ready to fulfillt*eir romises s*all not contribute to t*e indemnitybeyond t*ecorresondingortionof t*e riceof t*e t*ing or of t*e valueoft*e servicein !*ic* t*e obligation consists.

1##5 Dor t*e uroses of t*e receding articles, obligations to givedefinitet*ings and t*ose !*ic* are not suscetibleof artialerformance s*all be deemed to be indivisible.

9*en t*e obligation *as for its object t*e eecutionof a certainnumber of days of!or, t*e accomlis*ment of !or by metricalunits, or analogoust*ings !*ic* by t*eir nature are suscetible

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or artialerformance, it s*all be divisible.

o!ever, even t*oug* t*e object or service may be *ysicallydivisible, an obligation is indivisibleif so rovidedby la! orintendedby t*e arties.

n obligationsnot to do, divisibility or indivisibility s*all bedetermined by t*e c*aracterof t*e restation in eac* articular

case.

B#$AC%

&raud 'dolo(

1171 8esonsibilityarising from fraud is demandablein allobligations. Any!aiverof an action for futurefraud is void.

Ne!li!ence 'culpa(

117# 8esonsibility arising from negligence in t*e erformance ofeveryind of obligation is also demandable, but suc* liabilitymay be regulatedby t*e courts, according to t*e circumstances.

117% 2*e fault or negligenceof t*e obligor consists in t*e omissionoft*at diligence !*ic* is reuired by t*e nature of t*e obligationand corresonds !it* t*e circumstancesof t*e ersons, of t*etimeand of t*e lace. 9*en negligence s*o!s badfait*, t*e

rovisions of articles 1171 and ##01, aragra* #, s*all aly.

f t*e la! or contract does not state t*e diligence!*ic* is to beobserved in t*e erformance, t*at !*ic* is eected of a goodfat*er of a family s*all be reuired.

##01 (#) n case of fraud, badfait*, malice or!antonattitude, t*e obligors*all be resonsiblefor all damages !*ic* may be reasonablyattributed to t*e non'erformanceof t*e obligation.

Delay 'mora(

116/(n unilateral obligations)

2*ose obligated to deliveror to dosomet*ing incur in delayfromt*e time t*e obligeejudiciallyor etrajudiciallydemands fromt*em t*e fulfillment of t*eir obligation.

o!ever, t*e demandby t*e creditor s*all notbe necessary inorder t*at delay may eist:

(1) 9*en t*e obligation or t*e la! eressly so declare"or

(#) 9*en from t*e natureand t*e circumstancesof t*eobligation it aears t*at t*e designationof t*e time!*en t*e t*ing is to be delivered or t*e service is to berendered!as a controllingmotive for t*eestablis*ment of t*e contract" or

(%) 9*en demand !ould be useless, as !*en t*e obligor*as rendered it beyond*is o!er to erform.

n recirocalobligations, neit*erarty incurs in delay if t*e ot*erdoes notcomly or is not readyto comly in a roer manner!it* !*at is incumbent uon *im. Drom t*e moment one of t*earties fulfills*is obligation, delay by t*e ot*er begins.

115/ Obligations arising from contracts *ave t*e force ofla! bet!eent*e contractingarties and s*ould be comlied !it* in goodfait*.

11/# n case bot* arties *ave committed a breac*of t*e obligation,

t*e liability of t*e first infractors*all be euitably temeredbyt*e courts. f it cannot be determined !*ic* of t*e arties firstviolated t*e contract, t*e same s*all be deemed etinguis*ed,and eac* s*all bear*is o!n damages.

8emedies for -reac*

)* Performance

1165 9*en !*at is to be delivered is a determinatet*ing, t*e creditor,in addition to t*e rig*t granted *im by article 1170, may comel


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t*e debtorto maet*e delivery.

f t*e t*ing is indeterminateor generic, *e may ast*at t*eobligation be comlied !it*at t*e eenseof t*e debtor.

f t*e obligor delays, or *as romised to deliver t*e same t*ingto t!o or more ersons !*o do not*ave t*e same interest, *es*all be resonsible for any fortuitousevent until *e *as effected

t*e delivery.Obli!ation to Gi"e

Specific performance: To deliver specific thing

1# 2*e debtor of a t*ing cannotcomel t*e creditor to receiveadifferent one, alt*oug* t*e latter may be of t*e samevalue as, ormore valuablet*an t*at !*ic* is due.

1170 2*ose !*o in t*e erformance of t*eir obligations are guilty offraud, negligence, or delay, and t*ose !*o in any mannercontravenet*e tenor t*ereof, are liablefor damages.

1165 (1) 9*en !*at is to be delivered is a determinatet*ing, t*e creditor,in addition to t*e rig*t granted *im by article 1170, may comelt*e debtorto mae t*e delivery.

1176 2*e receitof t*e rincial by t*e creditor !it*out reservation!it* resect to t*e interest, s*all give rise to t*e resumtiont*at said interest *as been aid.

2*e receit of a later installmentof a debt !it*out reservationasto riorinstallments, s*all lie!ise raise t*e resumtiont*atsuc* installments*ave been aid.

Specific performance: To deliver generic thing

1#6 9*en t*e obligation consists in t*e delivery of an indeterminateor generic t*ing, !*ose ualityand circumstances*ave notbeen stated, t*e creditor cannot demand a t*ing of suerioruality. >eit*ercan t*e debtor delivera t*ing of inferioruality.2*e uroseof t*e obligation and ot*er circumstances s*all betaen into consideration.

Specific performance: To preserve

116% =very erson obligedto give somet*ingis also obliged to taecareof t !it* t*e roer diligenceof a good fat*erof a family,unless t*e la! or t*e stiulation of t*e arties reuire anot*er

standard of care.Specific performance: to deliver all its accessions

1166 2*e obligation to give a determinate t*ing includes t*at ofdelivering all its accessions and accessories, even t*oug* t*eymay not*ave been mentioned.

116 2*e creditor *as a rig*t to t*e fruits of t*e t*ing from t*e time t*eobligation to deliverit arises. o!ever, *e s*all acuireno realrig*t over it until t*e same*as been deliveredto *im.

1176(interest)

2*e receitof t*e rincial by t*e creditor !it*out reservation!it* resect to t*e interest, s*all give rise to t*e resumtiont*at said interest *as been aid.

2*e receit of a laterinstallment of a debt !it*out reservation asto riorinstallments, s*all lie!ise raise t*e resumtiont*atsuc* installments *ave beenaid.

Substituted performance

1165 (%) f t*e obligor delaysor *as romisedto deliver t*e same t*ing tot!o or more ersons !*o do not *ave t*e same interest, *es*all be resonsiblefor any fortuitousevent until *e *as effectedt*e delivery.

Obli!ation to Do

1167 f a erson obliged to do somet*ing failsto do it, t*e same s*allbe eecutedat *is cost.

2*is samerule s*all be observed if *e does it in contraventionoft*e tenorof t*e obligation. Durt*ermore, it may be decreed t*at

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!*at *as been oorly done be undone.

Obli!ation Not to Do

116+ 9*en t*e obligation consists in not doing, and t*e obligor does!*at *as been forbidden*im, it s*all also be undoneat *iseense.

+* Dama!es

1170 2*ose !*o in t*e erformance of t*eir obligations are guilty offraud, negligence, or delay, and t*ose !*o in any manner

contravene t*e tenor t*ereof, are liable for damages.Unilateral Obligations

1171 8esonsibility arising from fraud is demandablein allobligations. Any !aiver of an action for future fraud is void.

Reciprocal Obligations

11/# n case bot* arties *ave committed a breac*of t*e obligation,t*e liability of t*e first infractors*all be euitably temeredbyt*e courts. f it cannot be determined !*ic* of t*e arties firstviolated t*e contract, t*e same s*all be deemed etinguis*ed,and eac*s*all bear *is o!n damages.

,* #escission

11/1 2*e o!er to rescindobligations is imliedin recirocalones, incase one of t*e obligors s*ould not comly !it* !*at isincumbentuon *im.

2*e injuredarty may c*oosebet!een t*e fulfillmentand t*e

rescissionof t*e obligation, !it* t*e aymentof damages ineit*er case. e may also see rescission, even after*e *asc*osen fulfillment, if t*e latter s*ould become imossible.

2*e court s*all decree t*e rescission clamed, unless t*ere bejustcause aut*ori?ing t*e fiingof a eriod.

2*e is understood to be!it*outrejudice to t*e rig*tsof t*irdersons !*o *ave acuiredt*e t*ing, in accordance !it* articles1%+5 and 1%++ and t*e Eortgage a!.

11/# (see above

17+6 =very artneris a debtorof t*e artners*ifor !*atever *e may*ave romised to contribute t*ereto.

e s*all also be bound for!arrantyin case of eviction!it*regard to secificand determinatet*ings !*ic* *e may *avecontributed to t*e artners*i, in t*e same cases and in t*e

same manner as t*e vendoris bound!it* resect to t*evendee. e s*all also be liablefor t*e fruitst*ereof from t*etime t*ey s*ould *ave been delivered, !it*out t*e needof anydemand.

17++ A artner!*o *as undertaen to contributea sum of money andfails to do so becomes a debtorfor t*e interestand damagesfrom t*e time *e s*ould *ave comlied!it* *is obligation.

2*e same rule alies to any amount*e may *ave taen fromt*e artners*icoffers, and *is liabilitys*all begin from t*e time*e convertedt*e amount to *is o!n use.

1+ n a contract of sale of ersonalroerty t*e rice of !*ic* isayable in nstallments, t*e vendor may eercise any of t*efollo!ing remedies:

(1) =act fulfillment of t*e obligation, s*ould t*e vendee

fail to ay"(#) $ancelt*e sale, s*ould t*e vendeeFs failureto aycover t!oor moreinstallments"

(%) Dorecloset*e c*attelmortgage on t*e t*ing sold, ifone *as been constituted, s*ould t*e vendeeFs failureto ay cover t!o or more installments. n t*is case, *es*all *ave nofurt*eraction against t*e urc*asertorecover any unaid balance of t*e rice. Anyagreementto t*e contrary s*all be void.

1+5 2*e receding article s*all be alied to contracts urorting tobe leasesof ersonal roerty !it* otionto buy, !*en t*elessor *as derivedt*e lessee of t*e ossessionor enjoyment

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of t*e t*ing.

1+6 n t*e case referred to in t*e t!o receding articles, a stiulationt*at t*e installmentsor rents aid s*all notbe returned to t*evendee or lessee s*all be valid insofar as t*e same may not beunconscionableunder t*e circumstances.

-* Subsidiary #emedies

1177(!ccion subrogatoria

2*e creditors, after *aving ursuedt*e roertyin ossessionoft*e debtor to satisfyt*eir claims, may eerciseall t*e rig*ts and

bringall t*e actionsof t*e latter for t*e same urose, savet*ose !*ic* are in*erentin *is erson" t*ey may also imugnt*e acts !*ic* t*e debtor may *ave done to defraudt*em.

1%+1 2*e follo!ing contracts are rescissible:

(1) 2*ose !*ic* are entered into by guardians!*enevert*e!ards!*om t*ey reresent suffer lesionby moret*an one'fourt* of t*e valueof t*e t*ings!*ic* aret*e objectt*ereof"

(#) 2*ose agreeduon in reresentationof absentees, ift*e lattersuffer t*e lesion stated in t*e recedingnumber"

(%) 2*ose undertaen in fraud of creditors!*en t*e lattercannotin any ot*er manner collectt*e claims duet*em"

() 2*ose !*ic* refer to t*ings under litigationif t*ey*ave been enteredinto by t*e defendant!it*out t*eno!ledgeand arovalof t*e litigants or ofcometentjudicial aut*ority"

(5) Allot*er contracts seciallydeclared by la!to besubject to rescission.

.* $/tin!uis0ment of Liability

117 =cet in cases eressly secified by t*e la!, or !*en it isot*er!ise declared by stiulation, or !*en t*e natureo t*eobligation reuires t*e assumtionof ris, noerson s*all beresonsiblefor t*ose events!*ic* could not be foreseen, or!*ic*, t*oug* foreseen, !ere inevitable.

$ffect of loss1deterioration1impro"ement

11+/ 9*en t*e conditions *ave been imosed!it* t*e intentionofsusending t*e efficacyof an obligation to give, t*e follo!ingrules s*all be observed in case of t*e imrovement, loss ordeteriorationof t*e t*ing during t*e endencyof t*e condition:

(1) f t*e t*ing is lost!it*outt*e fault of t*e debtor, t*eobligation s*all be etinguis*ed"

(#) f t*e t*ing is lost t*roug*t*e fault of t*e debtor, *es*all be obligedto aydamages" it is understood t*att*e t*ing is lost !*en it eris*es, or goes out ofcommerce, or disaearsin suc* a !ay t*at itseistence is unno!nor it cannot be recovered"

(%) 9*en t*e t*ing deteriorates!it*out t*e fault of t*edebtor, t*e imairmentis to be borne by t*e creditor"

() f it deteriorates t*roug* t*e fault of t*e debtor, t*ecreditor may c*oose bet!een t*e rescissionof t*eobligation and its fulfillment, !it* indemnityfordamages in eit*er case"

(5) f t*e t*ing is imrovedby its nature, or by time, t*eimrovement s*all inureto t*e benefitof t*e creditor"

(6) f it is imroved at t*e eense of t*e debtor, *e s*all*ave noot*er rig*t t*an t*at granted to t*eusufructuary

11/ n case of loss, deterioration, or imrovement of t*e t*ing beforet*e arrival of t*e day certain, t*e rules in Article 11+/ s*all beobserved.

566'571 8ig*ts of t*e Bsufructuary

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$2TING3IS%4$NT O& OBLIGATIONS

Payment or Performance

1#%1 Obligations are etinguis*ed:

(1) -y ayment or erformance(#) -y loss of t*e t*ing due

(%) -y t*e condonation or remission of t*e debt() -y t*e confusion or merger of t*e rig*ts of creditor

and debtor(5) -y comensation(6) -y novation

Ot*er causes of etinguis*ment of obligations suc* asannulment, rescission, fulfillment of a resolutorycondition, andrescrition, are governed else!*ere in t*is $ode.

1#%# aymentmeans not only t*e deliveryof money but also t*eerformance, in any ot*er manner, of an obligation.

o! made

1#%% A debts*all not be understood to *ave been aidunless t*et*ing or service in !*ic* t*e obligation consists *as beencomletely delivered or rendered, as t*e case may be.

1#+ Bnless t*ere is an eress stiulation to t*at effect, t*e creditor

cannot be comelled to artially receive t*e restationsin !*ic*t*e obligationconsists. >eit*ermay t*e debtor be reuiredtomae artialayments.

o!ever, !*en t*e debt is in art liuidatedand in artunliuidated, t*e creditor may demandand t*e debtor may effectt*e ayment of t*e former!it*out!aiting for t*e liuidation oft*e latter.

1#/ 2*e ayment of debts in money s*all be made in t*e currencystiulated, and if it is not ossible to deliver suc* currency, t*enin t*e currency !*ic* is legaltenderin t*e *iliines.

2*e delivery of romissorynotes ayable to order, or billsofec*angeor ot*er mercantiledocuments s*all roduce t*eeffect of ayment only !*en t*ey *ave been cas*ed, or !*ent*roug* t*e faultof t*e creditor t*ey *ave been imaired.

n t*e meantime, t*e action derived from t*e originalobligations*all be *eld in abeyance.

1#50 n case an etraordinaryinflation or deflation of t*e currencystiulated s*ould suervene, t*e valueof t*e currency at t*etimeof t*e establis*ment of t*e obligation s*all be t*e basisofayment, unlesst*ere is anagreementto t*e contrary.

>o substitution

1# 2*e debtor of a t*ing cannot comelt*e creditor to receiveadifferentone, alt*oug* t*e latter may be of t*e samevalue as, ormorevaluable t*an t*at !*ic* is due.

n obligations to do or not to do, an act of forbearance cannot besubstitutedby anot*er act or forbearance againstt*e obligee;s!ill.

1#6 9*en t*e obligation consists in t*e delivery of an indeterminateor generic t*ing, !*ose ualityand circumstances *ave not

been stated, t*e creditor cannotdemand a t*ing of suerioruality. >eit*er can t*e debtor deliver a t*ing of inferioruality.2*e uroseof t*e obligation and ot*er circumstancess*all betaen into consideration.

$osts@eenses

1#7 Bnless it is ot*er!ise stiulated, t*e etrajudicialeensesreuired by t*e ayments*all be for t*e accountof t*e debtor.9it* regard tojudicialcosts, t*e 8ules of $ourts*all govern.

-y !*om

' Cebtor

1#%6 2*e creditor is not bound to accett*e ayment or erformance

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' 2*ird erson by a t*ird erson !*o *as no interest in t*e fulfillment of t*eobligation, unless t*ere is a stiulationto t*e contrary.

9*oever aysfor anot*er may demandfrom t*e debtor !*at *e*as aid, ecet t*at if *e aid!it*outt*e no!ledge or againstt*e !ill of t*e debtor, *e can only recoveronly insofar as t*eayment *as been beneficial to t*e debtor.

1#%7 9*oever ays on be*alf of t*e debtor !it*out t*e no!ledgeor

against t*e !ill of t*e latter, cannotcomel t*e creditor tosubrogate*im in *is rig*ts, suc* as t*ose arising from amortgage, guaranty, or enalty.

1#%+ aymentmade by a t*ird erson !*o does not intend to bereimbursedby t*e debtor is deemed to be a donation, !*ic*reuires t*e debtor;s consent. -ut t*e ayment is in any casevalidas to t*e creditor!*o *as accetedit.

1#%/ n obligations to give, ayment made by one !*o does not *avet*e free disosal of t*e t*ing dueand caacity to alienateit s*allnot be valid, !it*out rejudice to t*e rovisions of Article 1#7under t*e 2itle on G>atural Obligations.H

1#7 9*en a minor bet!een eig*teen and t!enty'one years of age,!*o *as entered into a contract !it*out t*e consentof t*earent of guardian, voluntarilyays a sum of money or deliversa fungible t*ing in fulfillment of t*e obligation, t*ere s*all be norig*t to recovert*e same from t*e oblige!*o *as sentorconsumedit in goodfait*.

2o !*om

1#0' $reditor

ayments*all be made to t*e erson in !*ose favort*eobligation*as been constituted, or *is successorin interest, orany erson aut*ori?edto receiveit.

1#1' 2*ird erson

ayment to a erson !*o is incaacitatedto administer *isroerty s*all bevalidif *e *as ett*e t*ing delivered, orinsofar as t*e ayment *as been beneficial to *im.

ayment made to a t*ird erson s*all also be validinsofar as it*as redoundedto t*e benefit of t*e creditor. uc* benefitto t*ecreditor need not be roved in t*e follo!ing cases:

(1) f aftert*e ayment, t*e t*irderson acuires t*ecreditor;s rig*ts

(#) f t*e creditor ratifiest*e ayment to t*e t*irderson(%) f by t*e creditor;s conduct, t*e debtor*as been led to

believet*at t*e t*ird erson *ad aut*ority to receivet*e ayment

1## ayment made in goodfait* to any erson in ossessionofcredit s*all release t*e debtor.

9*ere made

1#51 ayment s*all be made in t*e lacedesignated in t*e obligation.

2*ere being no eressstiulation and if t*e undertaingis todeliver a determinatet*ing, t*e ayment s*all be made!*erever t*e t*ing mig*t be att*e momentt*e obligation !asconstituted.

n any ot*er case t*e laceof ayment s*all be t*e domicileoft*e debtor.

f t*e debtor c*anges*is domicilein bad fait* or after*e *asincurred in delay, t*e additional eensess*all be borneby *im.

2*ese rovisions are !it*out rejudice to venue under t*e 8ulesof $ourt.

Alication

1#5# e !*o *as variousdebts of t*e sameind in favor of one andt*e samecreditor, may declareat t*e time of maingt*eayment, to !*ic* of t*em t*e same must be alied. Bnlesst*e arties so stiulate, or !*en t*e alicationof ayment ismade by t*e arty for!*osebenefitt*e term*as beenconstituted, alication s*all not be madeas to debts!*ic* arenot yet due.

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10/17

f t*e debtor accetsfrom t*e creditor a receitin !*ic* analication of t*e ayment is made, t*e former cannot comlainof t*e same, unless t*ere is a cause for invalidatingt*e contract.

1#5% f t*e debt roduces interest, ayment of t*e rincials*all notbe deemed to *ave been madeuntil t*e interests*ave beencovered.

1#5 9*en t*e ayment cannotbe alied in accordance !it* t*e

receding rules, or if alication cannot be inferredfrom ot*ercircumstances, t*e debt !*ic* is most onerousto t*e debtor,among t*ose due, s*all be deemed to *ave been satisfied.

f t*e debtsdue are of t*e samenature and burden, t*eayments*all be alied to allof t*em roortionately.

nvalid ayment

1#% ayment made to t*e creditor by t*e debtor after t*e latter*asbeenjudiciallyorderedto retaint*e debt s*all not be valid.

Ot*er forms of ayment

1#55($ession)

2*e debtor may cedeor assign*is roerty to *is creditors inayment of *is debts. 2*is cession, unless t*ere is stiulation tot*e contrary, s*all only releaset*e debtor from resonsibilityfort*e net roceeds of t*e t*ing assigned. 2*e agreements!*ic*,on t*e effect of t*e cession, are made bet!een t*e debtorand*is creditorss*all be governedby secialla!s.

1#5(Cation in ayment) Cationin ayment, !*ereby roertyis alienatedto t*e creditorin satisfactionof a debtin money, s*all be governed by t*e la!of sales.

1#56(2ender of ayment and consignation)

f t*e creditor to !*om tender of ayment *as been maderefuses!it*outjustcause to accetit, t*e debtor s*all bereleasedfrom resonsibilityby t*e consignationof t*e t*ing orsumdue.

$onsignationalone s*all roducet*e same effect in t*efollo!ing cases:

(1) 9*en t*e creditor is absentor unno!n, or doesnotaear at t*e laceof ayment

(#) 9*en *e is incaacitatedto receivet*e ayment att*e time it is due

(%) 9*en, !it*outjustcause, *e refusesto give a receit() 9*en t!oor moreersons claim t*e samerig*tto

collect(5) 9*en t*e titleof t*e obligation*as been lost

1#57 n order t*at t*e consignationof t*e t*ing due may releaset*eobligor, it must first be announced to t*e ersons interestedint*efulfillmentof t*e obligation.

2*e consignation s*all be ineffectualif it is notmade strictlyinconsonance !it* t*e rovisions !*ic* regulateayment.

1#5+ $onsignation s*all be made by deositingt*e t*ingsdueat t*edisosalofjudicialaut*ority, before !*om t*e tenderof ayments*all be roved, in a roer case, and t*e announcementof t*econsignation in ot*er cases.

2*e consignation *aving been made, t*e interestedarties s*allalso be notifiedt*ereof.

1#5/ 2*e eensesof consignation, !*en roerlymade, s*all be

c*arged against t*e creditor.1#60 Once t*e consignation *as been duly made, t*e debtor may ast*ejudgeto order t*e cancellationof t*e obligation.

-efore t*e creditor *as accetedt*e consignation, or before ajudicial declarationt*at t*e consignation *asbeen roerlymade, t*e debtor may!it*dra!t*e t*ing or t*e sumdeosited,allo!ing t*e obligationto remain in force.

1#61 f, t*e consignation *aving been made, t*e creditor s*ouldaut*ori?e t*e debtor to!it*dra!t*e same, *e s*all lose everyreference!*ic* *e may *ave over t*e t*ing, t*e co'debtors,guarantors, and suretiess*all be released.

10


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LOSS O& A T%ING D3$ 1 I4POSSIBILIT5 O& P$#&O#4ANC$

Loss of t0e t0in! due 'Obli!ation to Gi"e(

Obli!ation to deli"er a determinate t0in!

1#6#

An obligation !*ic* consists in t*e deliveryof a determinatet*ing s*all be etinguis*edif it s*ould be lostor destroyed!it*out t*e faultof t*e debtor, and before*e *as incurred indelay.

9*en by la! or stiulation, t*e obligoris liableeven forfortuitousevents, t*e loss of t*e t*ing does notetinguis*t*eobligation, and *e s*all be resonsiblefor damages. 2*e samerule alies !*en t*e nature of t*e obligation reuires t*eassumtion of ris.

1#6+ 9*en t*e debt of a t*ing certain and determinateroceeds froma criminaloffense, t*e debtor s*all not be eemtedfrom t*eayment of its rice,!*atevermay be t*e causefor t*e loss,unless t*e t*ing *aving been offered by *im to t*e erson!*os*ould receiveit, t*e latter refused!it*outjustification to accetit.

1#6/ 2*e obligation *aving been etinguis*edby t*e lossof t*e t*ing,t*e creditor s*all *ave all t*e rig*tsof action!*ic* t*e debtormay *ave against t*irdersons by reasonof t*e loss.

Obli!ation to deli"er a !eneric t0in!

1#6% n an obligation to deliver a generic t*ing, t*e lossor destructionof anyt*ing of t*e same ind does not etinguis*t*e obligation.

Partial loss

1#6 2*e courtss*all determine !*et*er, under t*e circumstances,t*e artialloss of t*e object of t*e obligation is so imortantasto etinguis*t*e obligation.

"resumptions

1#65 9*enever t*e t*ingis lostin t*e ossessionof t*e debtor, its*all be resumedt*at t*e loss !as due to *is fault, unlesst*ere is roofto t*e contrary, and!it*out rejudice to t*erovisions of article 1165. 2*is resumtion does not aly incase of eart*uae, flood, storm, or ot*er naturalcalamity.

1165 9*en!*atis to be delivered is a determinatet*ing, t*e creditor,in addition to t*e rig*t granted *im by Article 1170, may comelt*e debtor to maet*e delivery.

f t*e t*ing is indeterminateor generic, *e may ast*at t*eobligationbe comlied!it* at t*e eenseof t*e debtor.

f t*e obligor delays, or *as romisedto delivert*e same t*ingto t!o or more ersons !*o do not *ave t*e sameinterest, *es*all be resonsiblefor any fortuitousevent until *e *as effectedt*e delivery.

Impossibility of performance 'obli!ation to do(

1#66 2*e obligation to give a determinate t*ing includes t*at of

deliveringall its accessionsand accessories,even t*oug* t*eymay not *ave been mentioned.

1#67 f a erson obliged to do somet*ing failsto do it, t*e sames*allbe eecutedat *iscost.

2*is same rule s*all be observedif *e does it in contraventionoft*e tenor of t*e obligation. Durt*ermore, it may be decreedt*at!*at *as been oorly done be undone.

Condonation or remission of t0e debt

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1#70 $ondonationor remissionis essentially gratuitous, and reuirest*e accetanceby t*e obligor. t may be made eresslyorimliedly.

Oneand t*e ot*erind s*all be subject to t*e rules !*ic*govern inofficiousdonations. =resscondonation s*all,furt*ermore, comly !it* t*e formsof donation.

1#71

$reditor;s renunciation of action

2*e deliveryof a rivatedocument evidencinga credit, made

voluntarilyby t*e creditor to t*e debtor, imliest*e renunciationof t*e action !*ic* t*e former *ad against t*e latter.

f in order to nullifyt*is !aiver it s*ould be claimed to beinofficious, t*e debtor and *is *eirs may u*old it by rovingt*att*e deliveryof t*e document !as made in virtueof aymentoft*e debt.

1#7# 9*enever t*e rivatedocument in !*ic* t*e debtaears isfoundin t*e ossessionof t*e debtor, it s*all be resumed t*att*e creditor deliveredit voluntarily, unless t*e contraryis roved.

1#7% 2*e renunciationof t*e rincialdebt s*all etinguis* t*eaccessoryobligations" but t*e!aiverof t*e latter s*all leave t*eformer in force.

1#7 t is resumed t*at t*e accessoryobligation of ledge*as beenremitted!*en t*e t*ingledged, afterits delivery to t*e creditor,is foundin t*e ossessionof t*e debtor, or of a t*irderson !*oo!nst*e t*ing.

Confusion or mer!er of ri!0ts of t0e creditor

1#75 2*e obligation is etinguis*edfrom t*e time t*e c*aractersofcreditor and debtor are mergedin t*e sameerson.

1#76 Eerger!*ic* taes lace in t*e erson of t*e rincialdebtororcreditorbenefitst*e guarantors. $onfusion!*ic* taes lace int*e erson of any of t*e latter doesnot etinguis*t*e obligation.

1#77 $onfusiondoes not etinguis* ajoint obligation ecet asregards t*e s*arecorresonding to t*e creditoror debtorin

!*om t*e t!oc*aracters concur.

Compensation

1#7+ $omensations*all tae lace !*en t!oersons, in t*eir o!nrig*t, are creditorsand debtors of eac* ot*er.

1#+6 $omensation taes lace by oerationof la!, even t*oug* t*edebtsmay be ayableat differentlaces, but t*ere s*all be anindemnityfor eensesof ec*angeor transortationto t*elaceof ayment.

1#+/ f a erson s*ould *ave against *im severaldebts !*ic* aresuscetibleof comensation, t*e rules on t*e alication ofayments s*allaly to t*e orderof t*e comensation.

1#/0 9*en all t*e reuisitesmentioned in Article 1#7/ are resent,comensation taes effectby oeration of la!, and etinguis*es

bot*debts to t*e concurrent amount, even t*oug* t*e creditorsand debtors are not a!areof t*e comensation.

Re#uisites

1#7/ n order t*at comensation may beroer, it is necessary:

(1) 2*at eac* one of t*e obligors be boundrincially,and t*at *e be at t*e same timea rincialcreditor oft*e ot*er"

(#) 2*at bot*debts consist in a sumof money, or if t*et*ings due are consumable, t*ey be of t*e sameind,and also of t*e sameuality if t*e latter *as been

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13/17

stated(%) 2*at t*e t!o debts be due() 2*at t*ey be liuidatedand demandable(5) 2*at over neit*erof t*em t*ere be anyretentionor

controversy, commencedby t*irdersons andcommunicatedin due timeto t*e debtor.

1#+7 $omensation s*all not be roer!*en one of t*e debts arisesfrom a deositumor from t*e obligationsof a deositaryor of a

baileein commodatum.

>eit*ercan comensation be set u against a creditor !*o *asa claimfor suortdue by gratuitous title,!it*out rejudicetot*e rovisions of aragra* # of Article %01.

1#++ >eit*er s*all t*ere be comensation if one of t*e debts consistsin civilliability arising from a enaloffense.

1#+# 2*e arties may agreeuon t*e comensation of debts !*ic*are not yet due.

1#+% f one of t*e arties to a suit overan obligation *as a claimfordamagesagainst t*e ot*er, t*e former may set it offby roving*is rig*t to said damages and t*e amount t*ereof.

1#+ 9*en one or bot* debts are rescissible or voidable, t*ey may becomensatedagainst eac* ot*er beforet*ey arejudiciallyrescinded or avoided.

$inds

1#+1 $omensation may be totalor artial. 9*en t*e t!o debts are oft*e sameamount, t*ere is a total comensation.

%rdersons; interests

1#+0ot!it*standing t*e rovisions of t*e receding article, t*eguarantormay set u comensation as regards !*at t*e creditormay o!et*e rincialdebtor.

1#+5Assignee (of t*e credit)

2*e debtor !*o *as consentedto t*e assignmentof rig*tsmadeby a creditor in favor of a t*irderson, cannot set u against t*eassigneet*e comensation !*ic* !ould ertain to *im againstt*e assignor, unless t*e assignor !as notifiedby t*e debtor att*e time *e gave *is consent, t*at *e reserved *is rig*t to t*ecomensation.

f t*e creditor communicatedt*e cessionto *im but t*e debtordid not consent t*ereto, t*e latter may set u t*e comensationof debts revious to t*e cession, but not of subseuentones.

f t*e assignmentis made!it*out t*e no!ledge of t*e debtor,*e may set u t*e comensation of allcredits rior to t*e sameand also laterones until *e *ad no!ledgeof t*e assignment.

NO6ATION

1#/1 Obligations may be modifiedby:

(1) $*angingt*eir objector rincial conditions(#) ubstitutingt*e ersonof t*e debtor(%) ubrogating a t*irderson in t*e rig*tsof t*e creditor

Ob7ecti"e no"ation'C0an!in! t0e ob7ect or principal conditions(

1#/# n order t*at an obligation may be etinguis*ed by anot*er !*ic*substitutet*e same, it is imerative t*at it be so declaredinuneuivocal terms, or t*at t*e oldand t*e ne!obligations be onevery oint incomatible!it* eac* ot*er.

Sub7ecti"e no"ation'Substitutin! t0e person of t0e debtor(

1#/% >ovation!*ic* consists in substituting a ne! debtor in t*e laceof t*e original one, may be made even!it*outt*e no!ledge oragainst t*e !ill of t*e latter, but not !it*out t*e consentof t*ecreditor. aymentby t*e ne! debtor gives*im t*e rig*tsmentioned in Articles 1#%6 and 1#%7.

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14/17

1#/ f t*e substitution is!it*outt*e no!ledgeor against t*e !ill oft*e debtor, t*e ne! debtorFs insolvencyor non'fulfillment of t*eobligationss*all not giverise to any liabilityon t*e art of t*eoriginal debtor.

1#/5 2*e insolvencyof t*e ne! debtor, !*o *as been roosedbyt*e originaldebtor and accetedby t*e creditor, s*all not revivet*e action of t*e latter against t*e original obligor, ecet !*ensaid insolvency !as already eisting and of ublic no!ledge, or

no!n to t*e debtor, !*en t*e delegated*is debt.Subro!ation'Subro!atin! a ,rdperson in ri!0ts of t0e creditor(

1%00 ubrogationof a t*ird erson in t*e rig*ts of t*e creditor is eit*erlegal or conventional. 2*e former is not resumed, ecet incases eressly mentioned in t*is $ode" t*e latter must beclearly establis*edin order t*at it may tae effect.

1%01 $onventional subrogation of a t*irderson reuires t*e consentof t*e originalarties and of t*e t*irderson.

1%0# t is resumed t*at t*ere is legal subrogation:

(1) 9*en a creditor aysanot*er creditor!*o isreferred, even !it*out t*e debtorFs no!ledge

(#) 9*en a t*ird erson, not interestedin t*e obligation,ays !it* t*e eress or tacitaroval of t*e debtor

(%) 9*en, even!it*out t*e no!ledge of t*e debtor, aerson interested in t*e fulfillmentof t*e obligationays, !it*out rejudice to t*e effects of confusionasto t*e latterFs s*are

1%0% ubrogation transfers to t*e ersons subrogated t*e credit!it*all t*e rig*ts t*ereto aertaining, eit*er against t*e debtororagainst t*irderson, be t*ey guarantorsor ossessors ofmortgages, subject to stiulationin a conventionalsubrogation.

$ffects of No"ation

1#/6 9*en t*e rincial obligation is etinguis*ed in conseuence ofa novation, accessoryobligations may subsist only insofar ast*ey may benefitt*ird ersons!*o did notgive t*eir consent.

1#/7 f t*e ne! obligation is void, t*e originalone s*all subsist, unlesst*e arties intended t*at t*e former relation s*ould beetinguis*edin any event.

1#/+ 2*e novationis void if t*e originalobligation !as void, ecet!*en annulmentmay be claimedonly by t*e debtoror !*enratification validates acts !*ic* are voidable.

1#// f t*e original obligation !as subject to a susensiveorresolutorycondition, t*e ne! obligation s*all be undert*e samecondition, unless it is ot*er!isestiulated.

1%0 A creditor, to !*om artialayment *as been made, mayeercise*is rig*tfor t*e remainder, and *e s*all be referredtot*e erson!*o *as been subrogatedin *is lacein virtue of t*eartial aymentof t*e same credit.

8INDS O& OBLIGATIONS

Pure Obli!ations

117/ =very obligation !*ose erformancedoes not deend uon afutureor uncertainevent, or uon a ast event unno!nto t*earties, is demandableat once.

=very obligation !*ic* contains a resolutory condition s*all alsobe demandable, !it*out rejudice to t*e effectsof t*e*aeningof t*e event.

Conditional Obli!ations

11+0 9*en t*e debtor binds*imself to ay!*en *is means ermit*im to do so, t*e obligation s*all be deemed to be one !it*aeriod, subject to t*e rovisions of Article 11/7.

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11+1 n conditional obligations, t*e acuisition of rig*ts, as !ell as t*eetinguis*mentor lossof t*ose already acuired, s*all deenduon t*e *aeningof t*e event !*ic* constitutest*e condition.

11+# 9*en t*e fulfillment of t*e condition deends uon t*e sole !illof t*e debtor, t*e conditionalobligation s*all be void. f itdeends uon c*ance or uon t*e!illof a t*ird erson, t*eobligation s*all tae effect in conformity!it* t*e rovisions oft*is $ode.

11+%mossible conditions

mossible conditions, t*ose contrary to good customs or ublicolicy and t*ose ro*ibitedby la!s*all annul t*e obligation!*ic* deendsuon t*em. f t*e obligationis divisible, t*at artt*ereof !*ic* is not affected by t*e imossibleor unla!fulcondition s*all be valid.

2*e condition not to do an imossible t*ings*all be consideredas not *aving been agreed uon.

11+ositive

2*e condition t*at some event *aen at a determinate times*all etinguis*t*e obligationas soon as t*e time eiresor if it*as become indubitablet*at t*e event !ill not tae lace.

11+5>egative

2*e conditiont*at some event !ill not *aen at a determinatetime s*all render t*e obligationeffective from t*e momentt*etime indicated *as elased, or if it *as become evidentt*at t*eevent cannot occur.

f no time *as been fied, t*e condition s*all be deemedfulfilledat suc* time as may *ave robably been contemlated, bearingin mind t*e nature of t*e obligation.

11+69*en effective@demandable

2*e conditions*all be deemed fulfilled!*en t*e obligorvoluntarily revents its fulfillment.

11+7=ffects !*en condition is fulfilled

2*e effects of a conditional obligation to give, once t*e condition*as been fulfilled, s*all retroactto t*e day of t*e constitution oft*e obligation. >evert*eless, !*en t*e obligationimosesrecirocal restations uon t*e arties, t*e fruits and interestsduring t*e endencyof t*e condition s*all be deemed to *avebeen mutually comensated. f t*e obligation is unilateral, t*edebtor s*all aroriate t*e fruits and interestsreceived, unlessfrom t*e natureand circumstancesof t*e obligationit s*ould beinferredt*at t*e intentionof t*e erson constituting t*e same!as different.

n obligationsto do and not to do, t*e courtss*all determine, in

eac* case, t*e retroactive effect of t*e condition t*at *as beencomlied!it*.

11++usensive condition(condition recedent)

2*e creditormay, before t*e fulfillmentof t*e condition, bring t*earoriate actionsfor t*e reservation of *is rig*t.

2*e debtormay recover!*at during t*e same time *e *as aidby mistaein case of a susensive condition.

11+/8esolutory condition(condition subseuent)

9*en t*e conditions*ave been imosed !it* t*e intention ofsusendingt*e efficacyof an obligation to give, t*e follo!ingrules s*all be observed in case of t*e imrovement, loss ordeteriorationof t*e t*ing during t*e endency of t*e condition:

(1) f t*e t*ing is lost!it*out t*e fault of t*e debtor, t*eobligation s*all be etinguis*ed"

(#) f t*e t*ing is lost t*roug* t*e fault of t*e debtor, *es*all be obliged to ay damages" it is understood t*att*e t*ing is lost!*en it eris*es, or goes out ofcommerce, or disaearsin suc* a !ay t*at itseistenceis unno!n or it cannot be recovered"

(%) 9*en t*e t*ing deteriorates!it*out t*e fault of t*edebtor, t*e imairment is to be borne by t*e creditor"

() f it deteriorates t*roug* t*e fault of t*e debtor, t*ecreditor may c*oose bet!een t*e rescission of t*eobligation and its fulfillment, !it* indemnity fordamages in eit*er case"

(5) f t*e t*ing is imroved by its nature, or by time, t*eimrovement s*all inure to t*e benefit of t*e creditor"

(6) f it is imroved at t*e eense of t*e debtor, *e s*all

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*ave no ot*er rig*t t*an t*at granted to t*eusufructuary.

11/0 9*en t*e conditions *ave for t*eir urose t*e etinguis*mentof an obligation to give, t*e arties, uon t*e fulfillment of saidconditions, s*all return to eac* ot*er !*at t*ey *ave received.n case of t*e loss, deterioration or imrovement of t*e t*ing, t*erovisions !*ic*, !it* resect to t*e debtor, are laid do!n in t*ereceding article s*all be alied to t*e arty !*o is bound to

return.

As for t*e obligations to do and not to do, t*e rovisions of t*esecond aragra* of Article 11+7 s*all be observed as regardst*e effect of t*e etinguis*mentof t*e obligation.

11/18escission of recirocal obligations

2*e o!er to rescind obligationsis imlied in recirocalones, incase one of t*e obligorss*ould not comly !it* !*at isincumbentuon *im.

2*e injured artymay c*oose bet!een t*e fulfillment and t*erescission of t*e obligation, !it* t*e ayment of damages ineit*er case. e may also see rescission, even after *e *asc*osen fulfillment, if t*e latter s*ould become imossible.

2*e court s*all decree t*e rescission claimed, unless t*ere bejust cause aut*ori?ing t*e fiing of a eriod.

2*is is understood to be !it*out rejudice to t*e rig*ts of t*irdersons!*o *ave acuired t*e t*ing, in accordance !it*Articles 1%+5and 1%++and t*e Eortgagea!.

11/# n case bot* arties *ave committed a breac* of t*e obligation,t*e liability of t*e first infractors*all be euitably temered byt*e courts. f it cannot be determined !*ic* of t*e arties firstviolatedt*e contract, t*e same s*all be deemed etinguis*ed,and eac* s*all bear *is o!n damages.

Obli!ations 9it0 a Period

11/% Obligationsfor !*ose fulfillment a day certain *as been fied,s*all be demandable only !*en t*at day comes.Obligations !it* a resolutoryeriod tae effect at once, butterminate uon arrival of t*e day certain.

A day certain is understoodto be t*at !*ic* must necessarilycome, alt*oug* it may not be no!n !*en.

f t*e uncertainty consistsin !*et*er t*e day !ill come or not,t*e obligation is conditional, and it s*all be regulated by t*e rulesof t*e receding ection.

11/oss, deterioration, or imrovement of t*e t*ing

n case of loss, deterioration or imrovement of t*e t*ing beforet*e arrival of t*e day certain, t*e rules in Article 11+/s*all beobserved.

11/5ayment in advance

Anyt*ing aid or delivered before t*e arrivalof t*e eriod, t*eobligor being una!are of t*e eriod or believing t*at t*eobligation *as become due and demandable, may be recovered,!it* t*e fruits and interests.

11/6Dor !*ose benefit

9*enever in an obligation a eriod is designated, it is resumedto *ave been establis*ed for t*e benefit of bot* t*e creditor and

t*e debtor, unless from t*e tenor of t*e same or ot*ercircumstances it s*ould aear t*at t*e eriod *as beenestablis*edin favor of one or of t*e ot*er.

11/79*en $ourts may fi t*e duration

f t*e obligationdoes not fi a eriod, but from its nature and t*ecircumstancesit can be inferred t*at a eriod !as intended, t*ecourts may fi t*e duration t*ereof.

2*e courts s*all also fi t*e durationof t*e eriod !*en itdeends uon t*e !ill of t*e debtor.

n every case, t*e courtss*all determine suc* eriod as mayunder t*e circumstances*ave been robably contemlated by

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t*e arties. Once fied by t*e courts, t*e eriod cannot bec*anged by t*em.

11/+ 2*e debtor s*all lose every rig*t to mae use of t*e eriod:(1) 9*en after t*e obligation *as been contracted, *e

becomes insolvent, unless *e gives a guaranty orsecurity for t*e debt

(#) 9*en *e does not furnis* to t*e creditor t*eguaranties or securities!*ic* *e *as romised

(%) 9*en by *is o!n acts *e *as imaired saidguaranties or securities after t*eir establis*ment, and!*en t*roug* a fortuitousevent t*ey disaear,unless *e immediately gives ne! ones euallysatisfactory

() 9*en t*e debtor violates any undertaing, inconsideration of !*ic* t*e creditoragreed to t*eeriod

(5) 9*en t*e debtor attemts to abscond

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Oblicon - Provisions Reviewer Pages 1-26 (Print)