Title. IOBLIGATIONS CHAPTER 1 - GENERAL PROVISIONS Art. 1156. An obligation is a juridical necessity to give, to do or not to do. n!Art. 115". #bligations arise $ro%&1! 'a()*! Contracts)+! ,uasi-contracts)Lawcenter.ph-! Acts or o%issions .unis/ed by la() and5! ,uasi-delicts. 1012a!Art. 1151. #bligations derived $ro% la( are not .resu%ed. #nly t/ose e3.ressly deter%ined in t/is Code or in s.ecial la(s are de%andable, and s/all be regulated by t/e .rece.ts o$ t/e la( (/ic/ establis/es t/e%) and as to (/at /as not been $oreseen, by t/e .rovisions o$ t/is 4oo5. 1020!Art. 1152. #bligations arising $ro% contracts /ave t/e $orce o$ la( bet(een t/e contracting .arties and s/ould be co%.lied (it/ in good $ait/. 1021a!Art. 1160. #bligations derived $ro% 6uasi-contracts s/all be subject to t/e .rovisions o$ C/a.ter 1, Title 7899, o$ t/is 4oo5. n!Art. 1161. Civil obligations arising $ro% cri%inal o$$enses s/all be governed by t/e .enal la(s, subject to t/e .rovisions o$ Article *1"", and o$ t/e .ertinent .rovisions o$ C/a.ter *, Preli%inary Title, on Hu%an Relations, and o$ Title 78999 o$ t/is 4oo5, regulating da%ages. 102*a!Art. 116*. #bligations derived $ro% 6uasi-delicts s/all be governed by t/e .rovisions o$ C/a.ter *, Title 7899 o$ t/is 4oo5, and by s.ecial la(s. 102+a! CHAPTER * - NATURE AND EFFECT OF OBLIGATIONS Art. 116+. Every .erson obliged to give so%et/ing is also obliged to ta5e care o$ it (it/ t/e .ro.er diligence o$ a good $at/er o$ a $a%ily, unless t/e la( or t/e sti.ulation o$ t/e .arties re6uires anot/er standard o$ care. 102-a!Art. 116-. T/e creditor /as a rig/t to t/e $ruits o$ t/e t/ing $ro% t/e ti%e t/e obligation to deliver it arises. Ho(ever, /e s/all ac6uire no real rig/t over it until t/e sa%e /as been delivered to /i%. 1025!Art. 1165. :/en (/at is to be delivered is a deter%inate t/ing, t/e creditor, in addition to t/e rig/t granted /i% by Article 11"0, %ay co%.el t/e debtor to %a5e t/e delivery.9$ t/e t/ing is indeter%inate or generic, /e %ay as5 t/at t/e obligation be co%.lied (it/ at t/e e3.ense o$ t/e debtor.9$ t/e obligor delays, or /as .ro%ised to deliver t/e sa%e t/ing to t(o or %ore .ersons (/o do not /ave t/e sa%e interest, /e s/all be res.onsible $or any $ortuitous event until /e /as e$$ected t/e delivery. 1026!Art. 1166. T/e obligation to give a deter%inate t/ing includes t/at o$ delivering all its accessions and accessories, even t/oug/ t/ey %ay not /ave been %entioned. 102"a!Art. 116". 9$ a .erson obliged to do so%et/ing $ails to do it, t/e sa%e s/all be e3ecuted at /is cost.T/is sa%e rule s/all be observed i$ /e does it in contravention o$ t/e tenor o$ t/e obligation. ;urt/er%ore, it %ay be decreed t/at (/at /as been .oorly done be undone. 1021!Art. 1161. :/en t/e obligation consists in not doing, and t/e obligor does (/at /as been $orbidden /i%, it s/all also be undone at /is e3.ense. 1022a!Art. 1162. T/ose obliged to deliver or to do so%et/ing incur in delay $ro% t/e ti%e t/e obligee judicially or e3trajudicially de%ands $ro% t/e% t/e $ul$ill%ent o$ t/eir obligation.Ho(ever, t/e de%and by t/e creditor s/all not be necessary in order t/at delay %ay e3ist&1! :/en t/e obligation or t/e la( e3.ressly so declare) or*! :/en $ro% t/e nature and t/e circu%stances o$ t/e obligation it a..ears t/at t/e designation o$ t/e ti%e (/en t/e t/ing is to be delivered or t/e service is to be rendered (as a controlling %otive $or t/e establis/%ent o$ t/e contract) or+! :/en de%and (ould be useless, as (/en t/e obligor /as rendered it beyond /is .o(er to .er$or%.9n reci.rocal obligations, neit/er .arty incurs in delay i$ t/e ot/er does not co%.ly or is not ready to co%.ly in a .ro.er %anner (it/ (/at is incu%bent u.on /i%. ;ro% t/e %o%ent one o$ t/e .arties $ul$ills /is obligation, delay by t/e ot/er begins. 1100a!Art. 11"0. T/ose (/o in t/e .er$or%ance o$ t/eir obligations are guilty o$ $raud, negligence, or delay, and t/ose (/o in any %anner contravene t/e tenor t/ereo$, are liable $or da%ages. 1101!Art. 11"1. Res.onsibility arising $ro% $raud is de%andable in all obligations. Any (aiver o$ an action $or $uture $raud is void. 110*a!Art. 11"*. Res.onsibility arising $ro% negligence in t/e .er$or%ance o$ every 5ind o$ obligation is also de%andable, but suc/ liability %ay be regulated by t/e courts, according to t/e circu%stances. 110+!Art. 11"+. T/e $ault or negligence o$ t/e obligor consists in t/e o%ission o$ t/at diligence (/ic/ is re6uired by t/e nature o$ t/e obligation and corres.onds (it/ t/e circu%stances o$ t/e .ersons, o$ t/e ti%e and o$ t/e .lace. :/en negligence s/o(s bad $ait/, t/e .rovisions o$ Articles 11"1 and **01, .aragra./ *, s/all a..ly.9$ t/e la( or contract does not state t/e diligence (/ic/ is to be observed in t/e .er$or%ance, t/at (/ic/ is e3.ected o$ a good $at/er o$ a $a%ily s/all be re6uired. 110-a!Art. 11"-. E3ce.t in cases e3.ressly s.eci$ied by t/e la(, or (/en it is ot/er(ise declared by sti.ulation, or (/en t/e nature o$ t/e obligation re6uires t/e assu%.tion o$ ris5, no .erson s/all be res.onsible $or t/ose events (/ic/ could not be $oreseen, or (/ic/, t/oug/ $oreseen, (ere inevitable. 1105a!Art. 11"5. 1. ? Pure and Conditional #bligations Art. 11"2. Every obligation (/ose .er$or%ance does not de.end u.on a $uture or uncertain event, or u.on a .ast event un5no(n to t/e .arties, is de%andable at once.Every obligation (/ic/ contains a resolutory condition s/all also be de%andable, (it/out .rejudice to t/e e$$ects o$ t/e /a..ening o$ t/e event. 111+!Art. 1110. :/en t/e debtor binds /i%sel$ to .ay (/en /is %eans .er%it /i% to do so, t/e obligation s/all be dee%ed to be one (it/ a .eriod, subject to t/e .rovisions o$ Article 112". n!Art. 1111. 9n conditional obligations, t/e ac6uisition o$ rig/ts, as (ell as t/e e3tinguis/%ent or loss o$ t/ose already ac6uired,s/all de.end u.on t/e /a..ening o$ t/e event (/ic/ constitutes t/e condition. 111-!Art. 111*. :/en t/e $ul$ill%ent o$ t/e condition de.ends u.on t/e sole (ill o$ t/e debtor, t/e conditional obligation s/all be void. 9$ it de.ends u.on c/ance or u.on t/e (ill o$ a t/ird .erson, t/e obligation s/all ta5e e$$ect in con$or%ity (it/ t/e .rovisions o$ t/is Code. 1115!Art. 111+. 9%.ossible conditions, t/ose contrary to good custo%s or .ublic .olicy and t/ose .ro/ibited by la( s/all annul t/e obligation (/ic/ de.ends u.on t/e%. 9$ t/e obligation is divisible, t/at .art t/ereo$ (/ic/ is not a$$ected by t/e i%.ossible or unla($ul condition s/all be valid.T/e condition not to do an i%.ossible t/ing s/all be considered as not /aving been agreed u.on. 1116a!Art. 111-. T/e condition t/at so%e event /a..en at a deter%inate ti%e s/all e3tinguis/ t/e obligation as soon as t/e ti%e e3.ires or i$ it /as beco%e indubitable t/at t/e event (ill not ta5e .lace. 111"!Art. 1115. T/e condition t/at so%e event (ill not /a..en at a deter%inate ti%e s/all render t/e obligation e$$ective $ro% t/e %o%ent t/e ti%e indicated /as ela.sed, or i$ it /as beco%e evident t/at t/e event cannot occur.9$ no ti%e /as been $i3ed, t/e condition s/all be dee%ed $ul$illed at suc/ ti%e as %ay /ave .robably been conte%.lated, bearing in %ind t/e nature o$ t/e obligation. 1111!Art. 1116. T/e condition s/all be dee%ed $ul$illed (/en t/e obligor voluntarily .revents its $ul$ill%ent. 1112!Art. 111". T/e e$$ects o$ a conditional obligation to give, once t/e condition /as been $ul$illed, s/all retroact to t/e day o$ t/e constitution o$ t/e obligation. >evert/eless, (/en t/e obligation i%.oses reci.rocal .restations u.on t/e .arties, t/e $ruits and interests during t/e .endency o$ t/e condition s/all be dee%ed to /ave been %utually co%.ensated. 9$ t/e obligation is unilateral, t/e debtor s/all a..ro.riate t/e $ruits and interests received, unless $ro% t/e nature and circu%stances o$ t/e obligation it s/ould be in$erred t/at t/e intention o$ t/e .erson constituting t/e sa%e (as di$$erent.9n obligations to do and not to do, t/e courts s/all deter%ine, in eac/ case, t/e retroactive e$$ect o$ t/e condition t/at /as been co%.lied (it/. 11*0!Art. 1111. T/e creditor %ay, be$ore t/e $ul$ill%ent o$ t/e condition, bring t/e a..ro.riate actions $or t/e .reservation o$ /is rig/t.T/e debtor %ay recover (/at during t/e sa%e ti%e /e /as .aid by %ista5e in case o$ a sus.ensive condition. 11*1a!Art. 1112. :/en t/e conditions /ave been i%.osed (it/ t/e intention o$ sus.ending t/e e$$icacy o$ an obligation to give, t/e $ollo(ing rules s/all be observed in case o$ t/e i%.rove%ent, loss or deterioration o$ t/e t/ing during t/e .endency o$ t/e condition&1! 9$ t/e t/ing is lost (it/out t/e $ault o$ t/e debtor, t/e obligation s/all be e3tinguis/ed)*! 9$ t/e t/ing is lost t/roug/ t/e $ault o$ t/e debtor, /e s/all be obliged to .ay da%ages) it is understood t/at t/e t/ing is lost(/en it .eris/es, or goes out o$ co%%erce, or disa..ears in suc/ a (ay t/at its e3istence is un5no(n or it cannot be recovered)+! :/en t/e t/ing deteriorates (it/out t/e $ault o$ t/e debtor, t/e i%.air%ent is to be borne by t/e creditor)-! 9$ it deteriorates t/roug/ t/e $ault o$ t/e debtor, t/e creditor %ay c/oose bet(een t/e rescission o$ t/e obligation and its $ul$ill%ent, (it/ inde%nity $or da%ages in eit/er case)5! 9$ t/e t/ing is i%.roved by its nature, or by ti%e, t/e i%.rove%ent s/all inure to t/e bene$it o$ t/e creditor)6! 9$ it is i%.roved at t/e e3.ense o$ t/e debtor, /e s/all /ave no ot/er rig/t t/an t/at granted to t/e usu$ructuary. 11**!Art. 1120. :/en t/e conditions /ave $or t/eir .ur.ose t/e e3tinguis/%ent o$ an obligation to give, t/e .arties, u.on t/e $ul$ill%ent o$ said conditions, s/all return to eac/ ot/er (/at t/ey /ave received.9n case o$ t/e loss, deterioration or i%.rove%ent o$ t/e t/ing, t/e .rovisions (/ic/, (it/ res.ect to t/e debtor, are laid do(n in t/e .receding article s/all be a..lied to t/e .arty (/o is bound to return.As $or t/e obligations to do and not to do, t/e .rovisions o$ t/e second .aragra./ o$ Article 111" s/all be observed as regards t/e e$$ect o$ t/e e3tinguis/%ent o$ t/e obligation. 11*+!Art. 1121. T/e .o(er to rescind obligations is i%.lied in reci.rocal ones, in case one o$ t/e obligors s/ould not co%.ly (it/ (/at is incu%bent u.on /i%.T/e injured .arty %ay c/oose bet(een t/e $ul$ill%ent and t/e rescission o$ t/e obligation, (it/ t/e .ay%ent o$ da%ages in eit/er case. He %ay also see5 rescission, even a$ter /e /as c/osen $ul$ill%ent, i$ t/e latter s/ould beco%e i%.ossible.T/e court s/all decree t/e rescission clai%ed, unless t/ere be just cause aut/ori@ing t/e $i3ing o$ a .eriod.T/is is understood to be (it/out .rejudice to t/e rig/ts o$ t/ird .ersons (/o /ave ac6uired t/e t/ing, in accordance (it/ Articles 1+15 and 1+11 and t/e Aortgage 'a(. 11*-!Art. 112*. 9n case bot/ .arties /ave co%%itted a breac/ o$ t/e obligation, t/e liability o$ t/e $irst in$ractor s/all be e6uitably te%.ered by t/e courts. 9$ it cannot be deter%ined (/ic/ o$ t/e .arties $irst violated t/e contract, t/e sa%e s/all be dee%ed e3tinguis/ed, and eac/ s/all bear /is o(n da%ages. n! =ECT9#> *. ? #bligations (it/ a Period Art. 112+. #bligations $or (/ose $ul$ill%ent a day certain /as been $i3ed, s/all be de%andable only (/en t/at day co%es.#bligations (it/ a resolutory .eriod ta5e e$$ect at once, but ter%inate u.on arrival o$ t/e day certain.A day certain is understood to be t/at (/ic/ %ust necessarily co%e, alt/oug/ it %ay not be 5no(n (/en.9$ t/e uncertainty consists in (/et/er t/e day (ill co%e or not, t/e obligation is conditional, and it s/all be regulated by t/e rules o$ t/e .receding =ection. 11*5a!Art. 112-. 9n case o$ loss, deterioration or i%.rove%ent o$ t/e t/ing be$ore t/e arrival o$ t/e day certain, t/e rules in Article 1112 s/all be observed. n!Art. 1125. Anyt/ing .aid or delivered be$ore t/e arrival o$ t/e .eriod, t/e obligor being una(are o$ t/e .eriod or believing t/att/e obligation /as beco%e due and de%andable, %ay be recovered, (it/ t/e $ruits and interests. 11*6a!Art. 1126. :/enever in an obligation a .eriod is designated, it is .resu%ed to /ave been establis/ed $or t/e bene$it o$ bot/ t/e creditor and t/e debtor, unless $ro% t/e tenor o$ t/e sa%e or ot/er circu%stances it s/ould a..ear t/at t/e .eriod /as been establis/ed in $avor o$ one or o$ t/e ot/er. 11*"!Art. 112". 9$ t/e obligation does not $i3 a .eriod, but $ro% its nature and t/e circu%stances it can be in$erred t/at a .eriod (as intended, t/e courts %ay $i3 t/e duration t/ereo$.T/e courts s/all also $i3 t/e duration o$ t/e .eriod (/en it de.ends u.on t/e (ill o$ t/e debtor.9n every case, t/e courts s/all deter%ine suc/ .eriod as %ay under t/e circu%stances /ave been .robably conte%.lated by t/e .arties. #nce $i3ed by t/e courts, t/e .eriod cannot be c/anged by t/e%. 11*1a!Art. 1121. T/e debtor s/all lose every rig/t to %a5e use o$ t/e .eriod&1! :/en a$ter t/e obligation /as been contracted, /e beco%es insolvent, unless /e gives a guaranty or security $or t/e debt)*! :/en /e does not $urnis/ to t/e creditor t/e guaranties or securities (/ic/ /e /as .ro%ised)+! :/en by /is o(n acts /e /as i%.aired said guaranties or securities a$ter t/eir establis/%ent, and (/en t/roug/ a $ortuitous event t/ey disa..ear, unless /e i%%ediately gives ne( ones e6ually satis$actory)-! :/en t/e debtor violates any underta5ing, in consideration o$ (/ic/ t/e creditor agreed to t/e .eriod)5! :/en t/e debtor atte%.ts to abscond. 11*2a! =ECT9#> +. ? Alternative #bligations Art. 1122. A .erson alternatively bound by di$$erent .restations s/all co%.letely .er$or% one o$ t/e%.T/e creditor cannot be co%.elled to receive .art o$ one and .art o$ t/e ot/er underta5ing. 11+1!Art. 1*00. T/e rig/t o$ c/oice belongs to t/e debtor, unless it /as been e3.ressly granted to t/e creditor.T/e debtor s/all /ave no rig/t to c/oose t/ose .restations (/ic/ are i%.ossible, unla($ul or (/ic/ could not /ave been t/e object o$ t/e obligation. 11+*!Art. 1*01. T/e c/oice s/all .roduce no e$$ect e3ce.t $ro% t/e ti%e it /as been co%%unicated. 11++!Art. 1*0*. T/e debtor s/all lose t/e rig/t o$ c/oice (/en a%ong t/e .restations (/ereby /e is alternatively bound, only one is .racticable. 11+-!Art. 1*0+. 9$ t/roug/ t/e creditorBs acts t/e debtor cannot %a5e a c/oice according to t/e ter%s o$ t/e obligation, t/e latter %ay rescind t/e contract (it/ da%ages. n!Art. 1*0-. T/e creditor s/all /ave a rig/t to inde%nity $or da%ages (/en, t/roug/ t/e $ault o$ t/e debtor, all t/e t/ings (/ic/ are alternatively t/e object o$ t/e obligation /ave been lost, or t/e co%.liance o$ t/e obligation /as beco%e i%.ossible.T/e inde%nity s/all be $i3ed ta5ing as a basis t/e value o$ t/e last t/ing (/ic/ disa..eared, or t/at o$ t/e service (/ic/ last beca%e i%.ossible.Ca%ages ot/er t/an t/e value o$ t/e last t/ing or service %ay also be a(arded. 11+5a!Art. 1*05. :/en t/e c/oice /as been e3.ressly given to t/e creditor, t/e obligation s/all cease to be alternative $ro% t/e day(/en t/e selection /as been co%%unicated to t/e debtor. -. ? Doint and =olidary #bligations Art. 1*0". T/e concurrence o$ t(o or %ore creditors or o$ t(o or %ore debtors in one and t/e sa%e obligation does not i%.lyt/at eac/ one o$ t/e $or%er /as a rig/t to de%and, or t/at eac/ one o$ t/e latter is bound to render, entire co%.liance (it/ t/e .restation. T/ere is a solidary liability only (/en t/e obligation e3.ressly so states, or (/en t/e la( or t/e nature o$ t/e obligation re6uires solidarity. 11+"a!Art. 1*01. 9$ $ro% t/e la(, or t/e nature or t/e (ording o$ t/e obligations to (/ic/ t/e .receding article re$ers t/e contrary does not a..ear, t/e credit or debt s/all be .resu%ed to be divided into as %any s/ares as t/ere are creditors or debtors, t/e credits or debts being considered distinct $ro% one anot/er, subject to t/e Rules o$ Court governing t/e %ulti.licity o$ suits. 11+1a!Art. 1*02. 9$ t/e division is i%.ossible, t/e rig/t o$ t/e creditors %ay be .rejudiced only by t/eir collective acts, and t/e debt can be en$orced only by .roceeding against all t/e debtors. 9$ one o$ t/e latter s/ould be insolvent, t/e ot/ers s/all not be liable $or /is s/are. 11+2!Art. 1*10. T/e indivisibility o$ an obligation does not necessarily give rise to solidarity. >or does solidarity o$ itsel$ i%.ly indivisibility. n!Art. 1*11. =olidarity %ay e3ist alt/oug/ t/e creditors and t/e debtors %ay not be bound in t/e sa%e %anner and by t/e sa%e .eriods and conditions. 11-0!Art. 1*1*. Eac/ one o$ t/e solidary creditors %ay do (/atever %ay be use$ul to t/e ot/ers, but not anyt/ing (/ic/ %ay be .rejudicial to t/e latter. 11-1a!Art. 1*1+. A solidary creditor cannot assign /is rig/ts (it/out t/e consent o$ t/e ot/ers. n!Art. 1*1-. T/e debtor %ay .ay any one o$ t/e solidary creditors) but i$ any de%and, judicial or e3trajudicial, /as been %ade by one o$ t/e%, .ay%ent s/ould be %ade to /i%. 11-*a!Art. 1*15. >ovation, co%.ensation, con$usion or re%ission o$ t/e debt, %ade by any o$ t/e solidary creditors or (it/ any o$ t/e solidary debtors, s/all e3tinguis/ t/e obligation, (it/out .rejudice to t/e .rovisions o$ Article 1*12.T/e creditor (/o %ay /ave e3ecuted any o$ t/ese acts, as (ell as /e (/o collects t/e debt, s/all be liable to t/e ot/ers $or t/e s/are in t/e obligation corres.onding to t/e%. 11-+!Art. 1*16. T/e creditor %ay .roceed against any one o$ t/e solidary debtors or so%e or all o$ t/e% si%ultaneously. T/e de%and %ade against one o$ t/e% s/all not be an obstacle to t/ose (/ic/ %ay subse6uently be directed against t/e ot/ers,so long as t/e debt /as not been $ully collected. 11--a!Art. 1*1". Pay%ent %ade by one o$ t/e solidary debtors e3tinguis/es t/e obligation. 9$ t(o or %ore solidary debtors o$$er to .ay, t/e creditor %ay c/oose (/ic/ o$$er to acce.t.He (/o %ade t/e .ay%ent %ay clai% $ro% /is co-debtors only t/e s/are (/ic/ corres.onds to eac/, (it/ t/e interest $or t/e.ay%ent already %ade. 9$ t/e .ay%ent is %ade be$ore t/e debt is due, no interest $or t/e intervening .eriod %ay be de%anded.:/en one o$ t/e solidary debtors cannot, because o$ /is insolvency, rei%burse /is s/are to t/e debtor .aying t/e obligation, suc/ s/are s/all be borne by all /is co-debtors, in .ro.ortion to t/e debt o$ eac/. 11-5a!Art. 1*11. Pay%ent by a solidary debtor s/all not entitle /i% to rei%burse%ent $ro% /is co-debtors i$ suc/ .ay%ent is %ade a$ter t/e obligation /as .rescribed or beco%e illegal. n!Art. 1*12. T/e re%ission %ade by t/e creditor o$ t/e s/are (/ic/ a$$ects one o$ t/e solidary debtors does not release t/e latter $ro% /is res.onsibility to(ards t/e co-debtors, in case t/e debt /ad been totally .aid by anyone o$ t/e% be$ore t/e re%ission (as e$$ected. 11-6a!Art. 1**0. T/e re%ission o$ t/e (/ole obligation, obtained by one o$ t/e solidary debtors, does not entitle /i% to rei%burse%ent $ro% /is co-debtors. n!Art. 1**1. 9$ t/e t/ing /as been lost or i$ t/e .restation /as beco%e i%.ossible (it/out t/e $ault o$ t/e solidary debtors, t/e obligation s/all be e3tinguis/ed.9$ t/ere (as $ault on t/e .art o$ any one o$ t/e%, all s/all be res.onsible to t/e creditor, $or t/e .rice and t/e .ay%ent o$ da%ages and interest, (it/out .rejudice to t/eir action against t/e guilty or negligent debtor.9$ t/roug/ a $ortuitous event, t/e t/ing is lost or t/e .er$or%ance /as beco%e i%.ossible a$ter one o$ t/e solidary debtors /as incurred in delay t/roug/ t/e judicial or e3trajudicial de%and u.on /i% by t/e creditor, t/e .rovisions o$ t/e .receding .aragra./ s/all a..ly. 11-"a!Art. 1***. A solidary debtor %ay, in actions $iled by t/e creditor, avail /i%sel$ o$ all de$enses (/ic/ are derived $ro% t/e nature o$ t/e obligation and o$ t/ose (/ic/ are .ersonal to /i%, or .ertain to /is o(n s/are. :it/ res.ect to t/ose (/ic/ .ersonally belong to t/e ot/ers, /e %ay avail /i%sel$ t/ereo$ only as regards t/at .art o$ t/e debt $or (/ic/ t/e latter are res.onsible. 11-1a! =ECT9#> 5. ? Civisible and 9ndivisible #bligations Art. 1**+. T/e divisibility or indivisibility o$ t/e t/ings t/at are t/e object o$ obligations in (/ic/ t/ere is only one debtor and only one creditor does not alter or %odi$y t/e .rovisions o$ C/a.ter * o$ t/is Title. 11-2!Art. 1**-. A joint indivisible obligation gives rise to inde%nity $or da%ages $ro% t/e ti%e anyone o$ t/e debtors does not co%.ly (it/ /is underta5ing. T/e debtors (/o %ay /ave been ready to $ul$ill t/eir .ro%ises s/all not contribute to t/e inde%nity beyond t/e corres.onding .ortion o$ t/e .rice o$ t/e t/ing or o$ t/e value o$ t/e service in (/ic/ t/e obligation consists. 1150!Art. 1**5. ;or t/e .ur.oses o$ t/e .receding articles, obligations to give de$inite t/ings and t/ose (/ic/ are not susce.tible o$ .artial .er$or%ance s/all be dee%ed to be indivisible.:/en t/e obligation /as $or its object t/e e3ecution o$ a certain nu%ber o$ days o$ (or5, t/e acco%.lis/%ent o$ (or5 by %etrical units, or analogous t/ings (/ic/ by t/eir nature are susce.tible o$ .artial .er$or%ance, it s/all be divisible.Ho(ever, even t/oug/ t/e object or service %ay be ./ysically divisible, an obligation is indivisible i$ so .rovided by la( or intended by t/e .arties.9n obligations not to do, divisibility or indivisibility s/all be deter%ined by t/e c/aracter o$ t/e .restation in eac/ .articular case. 1151a! =ECT9#> 6. ? #bligations (it/ a Penal Clause Art. 1**6. 9n obligations (it/ a .enal clause, t/e .enalty s/all substitute t/e inde%nity $or da%ages and t/e .ay%ent o$ interests in case o$ nonco%.liance, i$ t/ere is no sti.ulation to t/e contrary. >evert/eless, da%ages s/all be .aid i$ t/e obligor re$uses to .ay t/e .enalty or is guilty o$ $raud in t/e $ul$ill%ent o$ t/e obligation.T/e .enalty %ay be en$orced only (/en it is de%andable in accordance (it/ t/e .rovisions o$ t/is Code. 115*a!Art. 1**". T/e debtor cannot e3e%.t /i%sel$ $ro% t/e .er$or%ance o$ t/e obligation by .aying t/e .enalty, save in t/e case (/ere t/is rig/t /as been e3.ressly reserved $or /i%. >eit/er can t/e creditor de%and t/e $ul$ill%ent o$ t/e obligation and t/e satis$action o$ t/e .enalty at t/e sa%e ti%e, unless t/is rig/t /as been clearly granted /i%. Ho(ever, i$ a$ter t/e creditor /as decided to re6uire t/e $ul$ill%ent o$ t/e obligation, t/e .er$or%ance t/ereo$ s/ould beco%e i%.ossible (it/out /is $ault, t/e .enalty %ay be en$orced. 115+a!Art. 1**1. Proo$ o$ actual da%ages su$$ered by t/e creditor is not necessary in order t/at t/e .enalty %ay be de%anded. n!Art. 1**2. T/e judge s/all e6uitably reduce t/e .enalty (/en t/e .rinci.al obligation /as been .artly or irregularly co%.lied (it/ by t/e debtor. Even i$ t/ere /as been no .er$or%ance, t/e .enalty %ay also be reduced by t/e courts i$ it is ini6uitous orunconscionable. 115-a!Art. 1*+0. T/e nullity o$ t/e .enal clause does not carry (it/ it t/at o$ t/e .rinci.al obligation.T/e nullity o$ t/e .rinci.al obligation carries (it/ it t/at o$ t/e .enal clause. 1155! CHAPTER -b - EXTINGUISHENT OF OBLIGATIONS EE>ERA' PR#89=9#>= Art. 1*+1. #bligations are e3tinguis/ed&1! 4y .ay%ent or .er$or%ance&*! 4y t/e loss o$ t/e t/ing due&+! 4y t/e condonation or re%ission o$ t/e debt)-! 4y t/e con$usion or %erger o$ t/e rig/ts o$ creditor and debtor)5! 4y co%.ensation)6! 4y novation.#t/er causes o$ e3tinguis/%ent o$ obligations, suc/ as annul%ent, rescission, $ul$ill%ent o$ a resolutory condition, and .rescri.tion, are governed else(/ere in t/is Code. 1156a! =ECT9#> 1. ? Pay%ent or Per$or%ance Art. 1*+*. Pay%ent %eans not only t/e delivery o$ %oney but also t/e .er$or%ance, in any ot/er %anner, o$ an obligation. n!Art. 1*++. A debt s/all not be understood to /ave been .aid unless t/e t/ing or service in (/ic/ t/e obligation consists /as been co%.letely delivered or rendered, as t/e case %ay be. 115"!Art. 1*+-. 9$ t/e obligation /as been substantially .er$or%ed in good $ait/, t/e obligor %ay recover as t/oug/ t/ere /ad beena strict and co%.lete $ul$ill%ent, less da%ages su$$ered by t/e obligee. n!Art. 1*+5. :/en t/e obligee acce.ts t/e .er$or%ance, 5no(ing its inco%.leteness or irregularity, and (it/out e3.ressing any .rotest or objection, t/e obligation is dee%ed $ully co%.lied (it/. n!Art. 1*+6. T/e creditor is not bound to acce.t .ay%ent or .er$or%ance by a t/ird .erson (/o /as no interest in t/e $ul$ill%ento$ t/e obligation, unless t/ere is a sti.ulation to t/e contrary.:/oever .ays $or anot/er %ay de%and $ro% t/e debtor (/at /e /as .aid, e3ce.t t/at i$ /e .aid (it/out t/e 5no(ledge or against t/e (ill o$ t/e debtor, /e can recover only inso$ar as t/e .ay%ent /as been bene$icial to t/e debtor. 1151a!Art. 1*+". :/oever .ays on be/al$ o$ t/e debtor (it/out t/e 5no(ledge or against t/e (ill o$ t/e latter, cannot co%.el t/e creditor to subrogate /i% in /is rig/ts, suc/ as t/ose arising $ro% a %ortgage, guaranty, or .enalty. 1152a!Art. 1*+1. Pay%ent %ade by a t/ird .erson (/o does not intend to be rei%bursed by t/e debtor is dee%ed to be a donation,(/ic/ re6uires t/e debtorBs consent. 4ut t/e .ay%ent is in any case valid as to t/e creditor (/o /as acce.ted it. n!Art. 1*+2. 9n obligations to give, .ay%ent %ade by one (/o does not /ave t/e $ree dis.osal o$ t/e t/ing due and ca.acity to alienate it s/all not be valid, (it/out .rejudice to t/e .rovisions o$ Article 1-*" under t/e Title on F>atural #bligations.G 1160a!Art. 1*-0. Pay%ent s/all be %ade to t/e .erson in (/ose $avor t/e obligation /as been constituted, or /is successor in interest, or any .erson aut/ori@ed to receive it. 116*a!Art. 1*-1. Pay%ent to a .erson (/o is inca.acitated to ad%inister /is .ro.erty s/all be valid i$ /e /as 5e.t t/e t/ing delivered, or inso$ar as t/e .ay%ent /as been bene$icial to /i%.Pay%ent %ade to a t/ird .erson s/all also be valid inso$ar as it /as redounded to t/e bene$it o$ t/e creditor. =uc/ bene$it to t/e creditor need not be .roved in t/e $ollo(ing cases&1! 9$ a$ter t/e .ay%ent, t/e t/ird .erson ac6uires t/e creditorBs rig/ts)*! 9$ t/e creditor rati$ies t/e .ay%ent to t/e t/ird .erson)+! 9$ by t/e creditorBs conduct, t/e debtor /as been led to believe t/at t/e t/ird .erson /ad aut/ority to receive t/e .ay%ent. 116+a!Art. 1*-*. Pay%ent %ade in good $ait/ to any .erson in .ossession o$ t/e credit s/all release t/e debtor. 116-!Art. 1*-+. Pay%ent %ade to t/e creditor by t/e debtor a$ter t/e latter /as been judicially ordered to retain t/e debt s/all not be valid. 1165!Art. 1*--. T/e debtor o$ a t/ing cannot co%.el t/e creditor to receive a di$$erent one, alt/oug/ t/e latter %ay be o$ t/e sa%e value as, or %ore valuable t/an t/at (/ic/ is due.9n obligations to do or not to do, an act or $orbearance cannot be substituted by anot/er act or $orbearance against t/e obligeeBs (ill. 1166a!Art. 1*-5. Cation in .ay%ent, (/ereby .ro.erty is alienated to t/e creditor in satis$action o$ a debt in %oney, s/all be governed by t/e la( o$ sales. n!Art. 1*-6. :/en t/e obligation consists in t/e delivery o$ an indeter%inate or generic t/ing, (/ose 6uality and circu%stances/ave not been stated, t/e creditor cannot de%and a t/ing o$ su.erior 6uality. >eit/er can t/e debtor deliver a t/ing o$ in$erior6uality. T/e .ur.ose o$ t/e obligation and ot/er circu%stances s/all be ta5en into consideration. 116"a!Art. 1*-". *. ? 'oss o$ t/e T/ing Cue Art. 1*6*. An obligation (/ic/ consists in t/e delivery o$ a deter%inate t/ing s/all be e3tinguis/ed i$ it s/ould be lost or destroyed (it/out t/e $ault o$ t/e debtor, and be$ore /e /as incurred in delay.:/en by la( or sti.ulation, t/e obligor is liable even $or $ortuitous events, t/e loss o$ t/e t/ing does not e3tinguis/ t/e obligation, and /e s/all be res.onsible $or da%ages. T/e sa%e rule a..lies (/en t/e nature o$ t/e obligation re6uires t/e assu%.tion o$ ris5. 111*a!Art. 1*6+. 9n an obligation to deliver a generic t/ing, t/e loss or destruction o$ anyt/ing o$ t/e sa%e 5ind does not e3tinguis/ t/e obligation. n!Art. 1*6-. T/e courts s/all deter%ine (/et/er, under t/e circu%stances, t/e .artial loss o$ t/e object o$ t/e obligation is so i%.ortant as to e3tinguis/ t/e obligation. n!Art. 1*65. :/enever t/e t/ing is lost in t/e .ossession o$ t/e debtor, it s/all be .resu%ed t/at t/e loss (as due to /is $ault, unless t/ere is .roo$ to t/e contrary, and (it/out .rejudice to t/e .rovisions o$ article 1165. T/is .resu%.tion does not a..ly in case o$ eart/6ua5e, $lood, stor%, or ot/er natural cala%ity. 111+a!Art. 1*66. T/e debtor in obligations to do s/all also be released (/en t/e .restation beco%es legally or ./ysically i%.ossible (it/out t/e $ault o$ t/e obligor. 111-a!Art. 1*6". :/en t/e service /as beco%e so di$$icult as to be %ani$estly beyond t/e conte%.lation o$ t/e .arties, t/e obligor %ay also be released t/ere$ro%, in (/ole or in .art. n!Art. 1*61. :/en t/e debt o$ a t/ing certain and deter%inate .roceeds $ro% a cri%inal o$$ense, t/e debtor s/all not be e3e%.ted $ro% t/e .ay%ent o$ its .rice, (/atever %ay be t/e cause $or t/e loss, unless t/e t/ing /aving been o$$ered by /i% to t/e .erson (/o s/ould receive it, t/e latter re$used (it/out justi$ication to acce.t it. 1115!Art. 1*62. T/e obligation /aving been e3tinguis/ed by t/e loss o$ t/e t/ing, t/e creditor s/all /ave all t/e rig/ts o$ action (/ic/ t/e debtor %ay /ave against t/ird .ersons by reason o$ t/e loss. 1116! =ECT9#> +. ? Condonation or Re%ission o$ t/e Cebt Art. 1*"0. Condonation or re%ission is essentially gratuitous, and re6uires t/e acce.tance by t/e obligor. 9t %ay be %ade e3.ressly or i%.liedly.#ne and t/e ot/er 5ind s/all be subject to t/e rules (/ic/ govern ino$$icious donations. E3.ress condonation s/all, $urt/er%ore, co%.ly (it/ t/e $or%s o$ donation. 111"!Art. 1*"1. T/e delivery o$ a .rivate docu%ent evidencing a credit, %ade voluntarily by t/e creditor to t/e debtor, i%.lies t/e renunciation o$ t/e action (/ic/ t/e $or%er /ad against t/e latter.9$ in order to nulli$y t/is (aiver it s/ould be clai%ed to be ino$$icious, t/e debtor and /is /eirs %ay u./old it by .roving t/at t/e delivery o$ t/e docu%ent (as %ade in virtue o$ .ay%ent o$ t/e debt. 1111!Art. 1*"*. :/enever t/e .rivate docu%ent in (/ic/ t/e debt a..ears is $ound in t/e .ossession o$ t/e debtor, it s/all be .resu%ed t/at t/e creditor delivered it voluntarily, unless t/e contrary is .roved. 1112!Art. 1*"+. T/e renunciation o$ t/e .rinci.al debt s/all e3tinguis/ t/e accessory obligations) but t/e (aiver o$ t/e latter s/all leave t/e $or%er in $orce. 1120!Art. 1*"-. 9t is .resu%ed t/at t/e accessory obligation o$ .ledge /as been re%itted (/en t/e t/ing .ledged, a$ter its delivery to t/e creditor, is $ound in t/e .ossession o$ t/e debtor, or o$ a t/ird .erson (/o o(ns t/e t/ing. 1121a! =ECT9#> -. ? Con$usion or Aerger o$ Rig/ts Art. 1*"5. T/e obligation is e3tinguis/ed $ro% t/e ti%e t/e c/aracters o$ creditor and debtor are %erged in t/e sa%e .erson. 112*a!Art. 1*"6. Aerger (/ic/ ta5es .lace in t/e .erson o$ t/e .rinci.al debtor or creditor bene$its t/e guarantors. Con$usion (/ic/ ta5es .lace in t/e .erson o$ any o$ t/e latter does not e3tinguis/ t/e obligation. 112+!Art. 1*"". Con$usion does not e3tinguis/ a joint obligation e3ce.t as regards t/e s/are corres.onding to t/e creditor or debtor in (/o% t/e t(o c/aracters concur. 112-! =ECT9#> 5. ? Co%.ensation Art. 1*"1. Co%.ensation s/all ta5e .lace (/en t(o .ersons, in t/eir o(n rig/t, are creditors and debtors o$ eac/ ot/er. 1125!Art. 1*"2. 9n order t/at co%.ensation %ay be .ro.er, it is necessary&1! T/at eac/ one o$ t/e obligors be bound .rinci.ally, and t/at /e be at t/e sa%e ti%e a .rinci.al creditor o$ t/e ot/er)*! T/at bot/ debts consist in a su% o$ %oney, or i$ t/e t/ings due are consu%able, t/ey be o$ t/e sa%e 5ind, and also o$ t/esa%e 6uality i$ t/e latter /as been stated)+! T/at t/e t(o debts be due)-! T/at t/ey be li6uidated and de%andable)5! T/at over neit/er o$ t/e% t/ere be any retention or controversy, co%%enced by t/ird .ersons and co%%unicated in due ti%e to t/e debtor. 1126!Art. 1*10. >ot(it/standing t/e .rovisions o$ t/e .receding article, t/e guarantor %ay set u. co%.ensation as regards (/at t/e creditor %ay o(e t/e .rinci.al debtor. 112"!Art. 1*11. Co%.ensation %ay be total or .artial. :/en t/e t(o debts are o$ t/e sa%e a%ount, t/ere is a total co%.ensation.n!Art. 1*1*. T/e .arties %ay agree u.on t/e co%.ensation o$ debts (/ic/ are not yet due. n!Art. 1*1+. 9$ one o$ t/e .arties to a suit over an obligation /as a clai% $or da%ages against t/e ot/er, t/e $or%er %ay set it o$$by .roving /is rig/t to said da%ages and t/e a%ount t/ereo$. n!Art. 1*1-. :/en one or bot/ debts are rescissible or voidable, t/ey %ay be co%.ensated against eac/ ot/er be$ore t/ey arejudicially rescinded or avoided. n!Art. 1*15. T/e debtor (/o /as consented to t/e assign%ent o$ rig/ts %ade by a creditor in $avor o$ a t/ird .erson, cannot set u. against t/e assignee t/e co%.ensation (/ic/ (ould .ertain to /i% against t/e assignor, unless t/e assignor (as noti$ied by t/e debtor at t/e ti%e /e gave /is consent, t/at /e reserved /is rig/t to t/e co%.ensation.9$ t/e creditor co%%unicated t/e cession to /i% but t/e debtor did not consent t/ereto, t/e latter %ay set u. t/e co%.ensation o$ debts .revious to t/e cession, but not o$ subse6uent ones.9$ t/e assign%ent is %ade (it/out t/e 5no(ledge o$ t/e debtor, /e %ay set u. t/e co%.ensation o$ all credits .rior to t/e sa%e and also later ones until /e /ad 5no(ledge o$ t/e assign%ent. 1121a!Art. 1*16. Co%.ensation ta5es .lace by o.eration o$ la(, even t/oug/ t/e debts %ay be .ayable at di$$erent .laces, but t/ere s/all be an inde%nity $or e3.enses o$ e3c/ange or trans.ortation to t/e .lace o$ .ay%ent. 1122a!Art. 1*1". Co%.ensation s/all not be .ro.er (/en one o$ t/e debts arises $ro% a de.ositu% or $ro% t/e obligations o$ a de.ositary or o$ a bailee in co%%odatu%.>eit/er can co%.ensation be set u. against a creditor (/o /as a clai% $or su..ort due by gratuitous title, (it/out .rejudice to t/e .rovisions o$ .aragra./ * o$ Article +01. 1*00a!Art. 1*11. >eit/er s/all t/ere be co%.ensation i$ one o$ t/e debts consists in civil liability arising $ro% a .enal o$$ense. n!Art. 1*12. 9$ a .erson s/ould /ave against /i% several debts (/ic/ are susce.tible o$ co%.ensation, t/e rules on t/e a..lication o$ .ay%ents s/all a..ly to t/e order o$ t/e co%.ensation. 1*01!Art. 1*20. :/en all t/e re6uisites %entioned in Article 1*"2 are .resent, co%.ensation ta5es e$$ect by o.eration o$ la(, and e3tinguis/es bot/ debts to t/e concurrent a%ount, even t/oug/ t/e creditors and debtors are not a(are o$ t/e co%.ensation. 1*0*a! =ECT9#> 6. ? >ovation Art. 1*21. #bligations %ay be %odi$ied by&1! C/anging t/eir object or .rinci.al conditions)*! =ubstituting t/e .erson o$ t/e debtor)+! =ubrogating a t/ird .erson in t/e rig/ts o$ t/e creditor. 1*0+!Art. 1*2*. 9n order t/at an obligation %ay be e3tinguis/ed by anot/er (/ic/ substitute t/e sa%e, it is i%.erative t/at it be so declared in une6uivocal ter%s, or t/at t/e old and t/e ne( obligations be on every .oint inco%.atible (it/ eac/ ot/er. 1*0-!Art. 1*2+. >ovation (/ic/ consists in substituting a ne( debtor in t/e .lace o$ t/e original one, %ay be %ade even (it/out t/e 5no(ledge or against t/e (ill o$ t/e latter, but not (it/out t/e consent o$ t/e creditor. Pay%ent by t/e ne( debtor gives /i% t/e rig/ts %entioned in Articles 1*+6 and 1*+". 1*05a!Art. 1*2-. 9$ t/e substitution is (it/out t/e 5no(ledge or against t/e (ill o$ t/e debtor, t/e ne( debtorBs insolvency or non-$ul$ill%ent o$ t/e obligations s/all not give rise to any liability on t/e .art o$ t/e original debtor. n!Art. 1*25. T/e insolvency o$ t/e ne( debtor, (/o /as been .ro.osed by t/e original debtor and acce.ted by t/e creditor, s/all not revive t/e action o$ t/e latter against t/e original obligor, e3ce.t (/en said insolvency (as already e3isting and o$ .ublic 5no(ledge, or 5no(n to t/e debtor, (/en t/e delegated /is debt. 1*06a!Art. 1*26. :/en t/e .rinci.al obligation is e3tinguis/ed in conse6uence o$ a novation, accessory obligations %ay subsist only inso$ar as t/ey %ay bene$it t/ird .ersons (/o did not give t/eir consent. 1*0"!Art. 1*2". 9$ t/e ne( obligation is void, t/e original one s/all subsist, unless t/e .arties intended t/at t/e $or%er relation s/ould be e3tinguis/ed in any event. n!Art. 1*21. T/e novation is void i$ t/e original obligation (as void, e3ce.t (/en annul%ent %ay be clai%ed only by t/e debtor or (/en rati$ication validates acts (/ic/ are voidable. 1*01a!Art. 1*22. 9$ t/e original obligation (as subject to a sus.ensive or resolutory condition, t/e ne( obligation s/all be under t/e sa%e condition, unless it is ot/er(ise sti.ulated. n!Art. 1+00. =ubrogation o$ a t/ird .erson in t/e rig/ts o$ t/e creditor is eit/er legal or conventional. T/e $or%er is not .resu%ed, e3ce.t in cases e3.ressly %entioned in t/is Code) t/e latter %ust be clearly establis/ed in order t/at it %ay ta5e e$$ect. 1*02a!Art. 1+01. Conventional subrogation o$ a t/ird .erson re6uires t/e consent o$ t/e original .arties and o$ t/e t/ird .erson. n!Art. 1+0*. 9t is .resu%ed t/at t/ere is legal subrogation&1! :/en a creditor .ays anot/er creditor (/o is .re$erred, even (it/out t/e debtorBs 5no(ledge)*! :/en a t/ird .erson, not interested in t/e obligation, .ays (it/ t/e e3.ress or tacit a..roval o$ t/e debtor)+! :/en, even (it/out t/e 5no(ledge o$ t/e debtor, a .erson interested in t/e $ul$ill%ent o$ t/e obligation .ays, (it/out .rejudice to t/e e$$ects o$ con$usion as to t/e latterBs s/are. 1*10a!Art. 1+0+. =ubrogation trans$ers to t/e .ersons subrogated t/e credit (it/ all t/e rig/ts t/ereto a..ertaining, eit/er against t/e debtor or against t/ird .erson, be t/ey guarantors or .ossessors o$ %ortgages, subject to sti.ulation in a conventional subrogation. 1*1*a!Art. 1+0-. A creditor, to (/o% .artial .ay%ent /as been %ade, %ay e3ercise /is rig/t $or t/e re%ainder, and /e s/all be .re$erred to t/e .erson (/o /as been subrogated in /is .lace in virtue o$ t/e .artial .ay%ent o$ t/e sa%e credit. 1*1+! Title IICONTRACTS CHAPTER 1 - GENERAL PROVISIONS Art. 1+05. A contract is a %eeting o$ %inds bet(een t(o .ersons (/ereby one binds /i%sel$, (it/ res.ect to t/e ot/er, to give so%et/ing or to render so%e service. 1*5-a!Art. 1+06. T/e contracting .arties %ay establis/ suc/ sti.ulations, clauses, ter%s and conditions as t/ey %ay dee% convenient, .rovided t/ey are not contrary to la(, %orals, good custo%s, .ublic order, or .ublic .olicy. 1*55a!Art. 1+0". 9nno%inate contracts s/all be regulated by t/e sti.ulations o$ t/e .arties, by t/e .rovisions o$ Titles 9 and 99 o$ t/is 4oo5, by t/e rules governing t/e %ost analogous no%inate contracts, and by t/e custo%s o$ t/e .lace. n!Art. 1+01. T/e contract %ust bind bot/ contracting .arties) its validity or co%.liance cannot be le$t to t/e (ill o$ one o$ t/e%. 1*56a!Art. 1+02. T/e deter%ination o$ t/e .er$or%ance %ay be le$t to a t/ird .erson, (/ose decision s/all not be binding until it /asbeen %ade 5no(n to bot/ contracting .arties. n!Art. 1+10. T/e deter%ination s/all not be obligatory i$ it is evidently ine6uitable. 9n suc/ case, t/e courts s/all decide (/at is e6uitable under t/e circu%stances. n!Art. 1+11. Contracts ta5e e$$ect only bet(een t/e .arties, t/eir assigns and /eirs, e3ce.t in case (/ere t/e rig/ts and obligations arising $ro% t/e contract are not trans%issible by t/eir nature, or by sti.ulation or by .rovision o$ la(. T/e /eir is not liable beyond t/e value o$ t/e .ro.erty /e received $ro% t/e decedent.9$ a contract s/ould contain so%e sti.ulation in $avor o$ a t/ird .erson, /e %ay de%and its $ul$ill%ent .rovided /e co%%unicated /is acce.tance to t/e obligor be$ore its revocation. A %ere incidental bene$it or interest o$ a .erson is not su$$icient. T/e contracting .arties %ust /ave clearly and deliberately con$erred a $avor u.on a t/ird .erson. 1*5"a!Art. 1+1*. 9n contracts creating real rig/ts, t/ird .ersons (/o co%e into .ossession o$ t/e object o$ t/e contract are bound t/ereby, subject to t/e .rovisions o$ t/e Aortgage 'a( and t/e 'and Registration 'a(s. n!Art. 1+1+. Creditors are .rotected in cases o$ contracts intended to de$raud t/e%. n!Art. 1+1-. Any t/ird .erson (/o induces anot/er to violate /is contract s/all be liable $or da%ages to t/e ot/er contracting .arty. n!Art. 1+15. Contracts are .er$ected by %ere consent, and $ro% t/at %o%ent t/e .arties are bound not only to t/e $ul$ill%ent o$(/at /as been e3.ressly sti.ulated but also to all t/e conse6uences (/ic/, according to t/eir nature, %ay be in 5ee.ing (it/good $ait/, usage and la(. 1*51!Art. 1+16. Real contracts, suc/ as de.osit, .ledge and Co%%odatu%, are not .er$ected until t/e delivery o$ t/e object o$ t/e obligation. n!Art. 1+1". >o one %ay contract in t/e na%e o$ anot/er (it/out being aut/ori@ed by t/e latter, or unless /e /as by la( a rig/t to re.resent /i%.A contract entered into in t/e na%e o$ anot/er by one (/o /as no aut/ority or legal re.resentation, or (/o /as acted beyond/is .o(ers, s/all be unen$orceable, unless it is rati$ied, e3.ressly or i%.liedly, by t/e .erson on (/ose be/al$ it /as been e3ecuted, be$ore it is revo5ed by t/e ot/er contracting .arty. 1*52a! CHAPTER * - ESSENTIAL RE!UISITES OF CONTRACTS EE>ERA' PR#89=9#>= Art. 1+11. T/ere is no contract unless t/e $ollo(ing re6uisites concur&1! Consent o$ t/e contracting .arties)*! #bject certain (/ic/ is t/e subject %atter o$ t/e contract)+! Cause o$ t/e obligation (/ic/ is establis/ed. 1*61! =ECT9#> 1. ? Consent Art. 1+12. Consent is %ani$ested by t/e %eeting o$ t/e o$$er and t/e acce.tance u.on t/e t/ing and t/e cause (/ic/ are to constitute t/e contract. T/e o$$er %ust be certain and t/e acce.tance absolute. A 6uali$ied acce.tance constitutes a counter-o$$er.Acce.tance %ade by letter or telegra% does not bind t/e o$$erer e3ce.t $ro% t/e ti%e it ca%e to /is 5no(ledge. T/e contract, in suc/ a case, is .resu%ed to /ave been entered into in t/e .lace (/ere t/e o$$er (as %ade. 1*6*a!Art. 1+*0. An acce.tance %ay be e3.ress or i%.lied. n!Art. 1+*1. T/e .erson %a5ing t/e o$$er %ay $i3 t/e ti%e, .lace, and %anner o$ acce.tance, all o$ (/ic/ %ust be co%.lied (it/. n!Art. 1+**. An o$$er %ade t/roug/ an agent is acce.ted $ro% t/e ti%e acce.tance is co%%unicated to /i%. n!Art. 1+*+. An o$$er beco%es ine$$ective u.on t/e deat/, civil interdiction, insanity, or insolvency o$ eit/er .arty be$ore acce.tance is conveyed. n!Art. 1+*-. :/en t/e o$$erer /as allo(ed t/e o$$eree a certain .eriod to acce.t, t/e o$$er %ay be (it/dra(n at any ti%e be$oreacce.tance by co%%unicating suc/ (it/dra(al, e3ce.t (/en t/e o.tion is $ounded u.on a consideration, as so%et/ing .aidor .ro%ised. n!Art. 1+*5. o contract %ay be entered into u.on $uture in/eritance e3ce.t in cases e3.ressly aut/ori@ed by la(.All services (/ic/ are not contrary to la(, %orals, good custo%s, .ublic order or .ublic .olicy %ay li5e(ise be t/e object o$ acontract. 1*"1a!Art. 1+-1. 9%.ossible t/ings or services cannot be t/e object o$ contracts. 1*"*!Art. 1+-2. T/e object o$ every contract %ust be deter%inate as to its 5ind. T/e $act t/at t/e 6uantity is not deter%inate s/all not be an obstacle to t/e e3istence o$ t/e contract, .rovided it is .ossible to deter%ine t/e sa%e, (it/out t/e need o$ a ne( contract bet(een t/e .arties. 1*"+! =ECT9#> +. ? Cause o$ Contracts Art. 1+50. 9n onerous contracts t/e cause is understood to be, $or eac/ contracting .arty, t/e .restation or .ro%ise o$ a t/ingor service by t/e ot/er) in re%uneratory ones, t/e service or bene$it (/ic/ is re%unerated) and in contracts o$ .ure bene$icence, t/e %ere liberality o$ t/e bene$actor. 1*"-!Art. 1+51. T/e .articular %otives o$ t/e .arties in entering into a contract are di$$erent $ro% t/e cause t/ereo$. n!Art. 1+5*. Contracts (it/out cause, or (it/ unla($ul cause, .roduce no e$$ect (/atever. T/e cause is unla($ul i$ it is contraryto la(, %orals, good custo%s, .ublic order or .ublic .olicy. 1*"5a!Art. 1+5+. T/e state%ent o$ a $alse cause in contracts s/all render t/e% void, i$ it s/ould not be .roved t/at t/ey (ere $ounded u.on anot/er cause (/ic/ is true and la($ul. 1*"6!Art. 1+5-. Alt/oug/ t/e cause is not stated in t/e contract, it is .resu%ed t/at it e3ists and is la($ul, unless t/e debtor .rovest/e contrary. 1*""!Art. 1+55. E3ce.t in cases s.eci$ied by la(, lesion or inade6uacy o$ cause s/all not invalidate a contract, unless t/ere /as been $raud, %ista5e or undue in$luence. n! CHAPTER + - FOR OF CONTRACTS Art. 1+56. Contracts s/all be obligatory, in (/atever $or% t/ey %ay /ave been entered into, .rovided all t/e essential re6uisites $or t/eir validity are .resent. Ho(ever, (/en t/e la( re6uires t/at a contract be in so%e $or% in order t/at it %ay be valid or en$orceable, or t/at a contract be .roved in a certain (ay, t/at re6uire%ent is absolute and indis.ensable. 9n suc/cases, t/e rig/t o$ t/e .arties stated in t/e $ollo(ing article cannot be e3ercised. 1*"1a!Art. 1+5". 9$ t/e la( re6uires a docu%ent or ot/er s.ecial $or%, as in t/e acts and contracts enu%erated in t/e $ollo(ing article, t/e contracting .arties %ay co%.el eac/ ot/er to observe t/at $or%, once t/e contract /as been .er$ected. T/is rig/t %ay be e3ercised si%ultaneously (it/ t/e action u.on t/e contract. 1*"2a!Art. 1+51. T/e $ollo(ing %ust a..ear in a .ublic docu%ent&1! Acts and contracts (/ic/ /ave $or t/eir object t/e creation, trans%ission, %odi$ication or e3tinguis/%ent o$ real rig/ts over i%%ovable .ro.erty) sales o$ real .ro.erty or o$ an interest t/erein a governed by Articles 1-0+, >o. *, and 1-05)*! T/e cession, re.udiation or renunciation o$ /ereditary rig/ts or o$ t/ose o$ t/e conjugal .artners/i. o$ gains)+! T/e .o(er to ad%inister .ro.erty, or any ot/er .o(er (/ic/ /as $or its object an act a..earing or (/ic/ s/ould a..ear in a .ublic docu%ent, or s/ould .rejudice a t/ird .erson)-! T/e cession o$ actions or rig/ts .roceeding $ro% an act a..earing in a .ublic docu%ent.All ot/er contracts (/ere t/e a%ount involved e3ceeds $ive /undred .esos %ust a..ear in (riting, even a .rivate one. 4ut sales o$ goods, c/attels or t/ings in action are governed by Articles, 1-0+, >o. * and 1-05. 1*10a! CHAPTER - - REFORATION OF INSTRUENTS "n# Art. 1+52. :/en, t/ere /aving been a %eeting o$ t/e %inds o$ t/e .arties to a contract, t/eir true intention is not e3.ressed in t/e instru%ent .ur.orting to e%body t/e agree%ent, by reason o$ %ista5e, $raud, ine6uitable conduct or accident, one o$ t/e .arties %ay as5 $or t/e re$or%ation o$ t/e instru%ent to t/e end t/at suc/ true intention %ay be e3.ressed.9$ %ista5e, $raud, ine6uitable conduct, or accident /as .revented a %eeting o$ t/e %inds o$ t/e .arties, t/e .ro.er re%edy is not re$or%ation o$ t/e instru%ent but annul%ent o$ t/e contract.Art. 1+60. T/e .rinci.les o$ t/e general la( on t/e re$or%ation o$ instru%ents are /ereby ado.ted inso$ar as t/ey are not in con$lict (it/ t/e .rovisions o$ t/is Code.Art. 1+61. :/en a %utual %ista5e o$ t/e .arties causes t/e $ailure o$ t/e instru%ent to disclose t/eir real agree%ent, said instru%ent %ay be re$or%ed.Art. 1+6*. 9$ one .arty (as %ista5en and t/e ot/er acted $raudulently or ine6uitably in suc/ a (ay t/at t/e instru%ent does not s/o( t/eir true intention, t/e $or%er %ay as5 $or t/e re$or%ation o$ t/e instru%ent.Art. 1+6+. :/en one .arty (as %ista5en and t/e ot/er 5ne( or believed t/at t/e instru%ent did not state t/eir real agree%ent, but concealed t/at $act $ro% t/e $or%er, t/e instru%ent %ay be re$or%ed.Art. 1+6-. :/en t/roug/ t/e ignorance, lac5 o$ s5ill, negligence or bad $ait/ on t/e .art o$ t/e .erson dra$ting t/e instru%ent or o$ t/e cler5 or ty.ist, t/e instru%ent does not e3.ress t/e true intention o$ t/e .arties, t/e courts %ay order t/at t/e instru%ent be re$or%ed.Art. 1+65. 9$ t(o .arties agree u.on t/e %ortgage or .ledge o$ real or .ersonal .ro.erty, but t/e instru%ent states t/at t/e .ro.erty is sold absolutely or (it/ a rig/t o$ re.urc/ase, re$or%ation o$ t/e instru%ent is .ro.er.Art. 1+66. T/ere s/all be no re$or%ation in t/e $ollo(ing cases&1! =i%.le donations inter vivos (/erein no condition is i%.osed)*! :ills)+! :/en t/e real agree%ent is void.Art. 1+6". :/en one o$ t/e .arties /as broug/t an action to en$orce t/e instru%ent, /e cannot subse6uently as5 $or its re$or%ation.Art. 1+61. Re$or%ation %ay be ordered at t/e instance o$ eit/er .arty or /is successors in interest, i$ t/e %ista5e (as %utual) ot/er(ise, u.on .etition o$ t/e injured .arty, or /is /eirs and assigns.Art. 1+62. T/e .rocedure $or t/e re$or%ation o$ instru%ent s/all be governed by rules o$ court to be .ro%ulgated by t/e =u.re%e Court. CHAPTER 5 - INTERPRETATION OF CONTRACTS Art. 1+"0. 9$ t/e ter%s o$ a contract are clear and leave no doubt u.on t/e intention o$ t/e contracting .arties, t/e literal %eaning o$ its sti.ulations s/all control.9$ t/e (ords a..ear to be contrary to t/e evident intention o$ t/e .arties, t/e latter s/all .revail over t/e $or%er. 1*11!Art. 1+"1. 9n order to judge t/e intention o$ t/e contracting .arties, t/eir conte%.oraneous and subse6uent acts s/all be .rinci.ally considered. 1*1*!Art. 1+"*. Ho(ever general t/e ter%s o$ a contract %ay be, t/ey s/all not be understood to co%.re/end t/ings t/at are distinct and cases t/at are di$$erent $ro% t/ose u.on (/ic/ t/e .arties intended to agree. 1*1+!Art. 1+"+. 9$ so%e sti.ulation o$ any contract s/ould ad%it o$ several %eanings, it s/all be understood as bearing t/at i%.ort (/ic/ is %ost ade6uate to render it e$$ectual. 1*1-!Art. 1+"-. T/e various sti.ulations o$ a contract s/all be inter.reted toget/er, attributing to t/e doubt$ul ones t/at sense (/ic/ %ay result $ro% all o$ t/e% ta5en jointly. 1*15!Art. 1+"5. :ords (/ic/ %ay /ave di$$erent signi$ications s/all be understood in t/at (/ic/ is %ost in 5ee.ing (it/ t/e nature and object o$ t/e contract. 1*16!Art. 1+"6. T/e usage or custo% o$ t/e .lace s/all be borne in %ind in t/e inter.retation o$ t/e a%biguities o$ a contract, and s/all $ill t/e o%ission o$ sti.ulations (/ic/ are ordinarily establis/ed. 1*1"!Art. 1+"". T/e inter.retation o$ obscure (ords or sti.ulations in a contract s/all not $avor t/e .arty (/o caused t/e obscurity.1*11!Art. 1+"1. :/en it is absolutely i%.ossible to settle doubts by t/e rules establis/ed in t/e .receding articles, and t/e doubts re$er to incidental circu%stances o$ a gratuitous contract, t/e least trans%ission o$ rig/ts and interests s/all .revail. 9$ t/e contract is onerous, t/e doubt s/all be settled in $avor o$ t/e greatest reci.rocity o$ interests.9$ t/e doubts are cast u.on t/e .rinci.al object o$ t/e contract in suc/ a (ay t/at it cannot be 5no(n (/at %ay /ave been t/e intention or (ill o$ t/e .arties, t/e contract s/all be null and void. 1*12!Art. 1+"2. T/e .rinci.les o$ inter.retation stated in Rule 1*+ o$ t/e Rules o$ Court s/all li5e(ise be observed in t/e construction o$ contracts. n! CHAPTER 6 - RESCISSIBLE CONTRACTS Art. 1+10. Contracts validly agreed u.on %ay be rescinded in t/e cases establis/ed by la(. 1*20!Art. 1+11. T/e $ollo(ing contracts are rescissible&1! T/ose (/ic/ are entered into by guardians (/enever t/e (ards (/o% t/ey re.resent su$$er lesion by %ore t/an one-$ourt/ o$ t/e value o$ t/e t/ings (/ic/ are t/e object t/ereo$)*! T/ose agreed u.on in re.resentation o$ absentees, i$ t/e latter su$$er t/e lesion stated in t/e .receding nu%ber)+! T/ose underta5en in $raud o$ creditors (/en t/e latter cannot in any ot/er %anner collect t/e clai%s due t/e%)-! T/ose (/ic/ re$er to t/ings under litigation i$ t/ey /ave been entered into by t/e de$endant (it/out t/e 5no(ledge and a..roval o$ t/e litigants or o$ co%.etent judicial aut/ority)5! All ot/er contracts s.ecially declared by la( to be subject to rescission. 1*21a!Art. 1+1*. Pay%ents %ade in a state o$ insolvency $or obligations to (/ose $ul$ill%ent t/e debtor could not be co%.elled at t/e ti%e t/ey (ere e$$ected, are also rescissible. 1*2*!Art. 1+1+. T/e action $or rescission is subsidiary) it cannot be instituted e3ce.t (/en t/e .arty su$$ering da%age /as no ot/er legal %eans to obtain re.aration $or t/e sa%e. 1*2-!Lawcenter.phArt. 1+1-. Rescission s/all be only to t/e e3tent necessary to cover t/e da%ages caused. n!Art. 1+15. Rescission creates t/e obligation to return t/e t/ings (/ic/ (ere t/e object o$ t/e contract, toget/er (it/ t/eir $ruits, and t/e .rice (it/ its interest) conse6uently, it can be carried out only (/en /e (/o de%ands rescission can return (/atever /e %ay be obliged to restore.>eit/er s/all rescission ta5e .lace (/en t/e t/ings (/ic/ are t/e object o$ t/e contract are legally in t/e .ossession o$ t/ird .ersons (/o did not act in bad $ait/.9n t/is case, inde%nity $or da%ages %ay be de%anded $ro% t/e .erson causing t/e loss. 1*25!Art. 1+16. Rescission re$erred to in >os. 1 and * o$ Article 1+11 s/all not ta5e .lace (it/ res.ect to contracts a..roved by t/e courts. 1*26a!Art. 1+1". All contracts by virtue o$ (/ic/ t/e debtor alienates .ro.erty by gratuitous title are .resu%ed to /ave been enteredinto in $raud o$ creditors, (/en t/e donor did not reserve su$$icient .ro.erty to .ay all debts contracted be$ore t/e donation.Lawcenter.phAlienations by onerous title are also .resu%ed $raudulent (/en %ade by .ersons against (/o% so%e judg%ent /as been issued. T/e decision or attac/%ent need not re$er to t/e .ro.erty alienated, and need not /ave been obtained by t/e .arty see5ing t/e rescission.9n addition to t/ese .resu%.tions, t/e design to de$raud creditors %ay be .roved in any ot/er %anner recogni@ed by t/e la(o$ evidence. 1*2"a!Art. 1+11. :/oever ac6uires in bad $ait/ t/e t/ings alienated in $raud o$ creditors, s/all inde%ni$y t/e latter $or da%ages su$$ered by t/e% on account o$ t/e alienation, (/enever, due to any cause, it s/ould be i%.ossible $or /i% to return t/e%.9$ t/ere are t(o or %ore alienations, t/e $irst ac6uirer s/all be liable $irst, and so on successively. 1*21a!Art. 1+12. T/e action to clai% rescission %ust be co%%enced (it/in $our years.;or .ersons under guardians/i. and $or absentees, t/e .eriod o$ $our years s/all not begin until t/e ter%ination o$ t/e $or%erBs inca.acity, or until t/e do%icile o$ t/e latter is 5no(n. 1*22! CHAPTER " - VOIDABLE CONTRACTS Art. 1+20. T/e $ollo(ing contracts are voidable or annullable, even t/oug/ t/ere %ay /ave been no da%age to t/e contracting .arties&1! T/ose (/ere one o$ t/e .arties is inca.able o$ giving consent to a contract)*! T/ose (/ere t/e consent is vitiated by %ista5e, violence, inti%idation, undue in$luence or $raud.T/ese contracts are binding, unless t/ey are annulled by a .ro.er action in court. T/ey are susce.tible o$ rati$ication. n!Art. 1+21. T/e action $or annul%ent s/all be broug/t (it/in $our years.T/is .eriod s/all begin&9n cases o$ inti%idation, violence or undue in$luence, $ro% t/e ti%e t/e de$ect o$ t/e consent ceases.9n case o$ %ista5e or $raud, $ro% t/e ti%e o$ t/e discovery o$ t/e sa%e.And (/en t/e action re$ers to contracts entered into by %inors or ot/er inca.acitated .ersons, $ro% t/e ti%e t/e guardians/i. ceases. 1+01a!Art. 1+2*. Rati$ication e3tinguis/es t/e action to annul a voidable contract. 1+02a!Art. 1+2+. Rati$ication %ay be e$$ected e3.ressly or tacitly. 9t is understood t/at t/ere is a tacit rati$ication i$, (it/ 5no(ledge o$ t/e reason (/ic/ renders t/e contract voidable and suc/ reason /aving ceased, t/e .erson (/o /as a rig/t to invo5e it s/ould e3ecute an act (/ic/ necessarily i%.lies an intention to (aive /is rig/t. 1+11a!Art. 1+2-. Rati$ication %ay be e$$ected by t/e guardian o$ t/e inca.acitated .erson. n!Art. 1+25. Rati$ication does not re6uire t/e con$or%ity o$ t/e contracting .arty (/o /as no rig/t to bring t/e action $or annul%ent. 1+1*!Art. 1+26. Rati$ication cleanses t/e contract $ro% all its de$ects $ro% t/e %o%ent it (as constituted. 1+1+!Art. 1+2". T/e action $or t/e annul%ent o$ contracts %ay be instituted by all (/o are t/ereby obliged .rinci.ally or subsidiarily. Ho(ever, .ersons (/o are ca.able cannot allege t/e inca.acity o$ t/ose (it/ (/o% t/ey contracted) nor can t/ose (/o e3erted inti%idation, violence, or undue in$luence, or e%.loyed $raud, or caused %ista5e base t/eir action u.on t/ese $la(s o$ t/e contract. 1+0*a!Art. 1+21. An obligation /aving been annulled, t/e contracting .arties s/all restore to eac/ ot/er t/e t/ings (/ic/ /ave been t/e subject %atter o$ t/e contract, (it/ t/eir $ruits, and t/e .rice (it/ its interest, e3ce.t in cases .rovided by la(.9n obligations to render service, t/e value t/ereo$ s/all be t/e basis $or da%ages. 1+0+a!Art. 1+22. :/en t/e de$ect o$ t/e contract consists in t/e inca.acity o$ one o$ t/e .arties, t/e inca.acitated .erson is not obliged to %a5e any restitution e3ce.t inso$ar as /e /as been bene$ited by t/e t/ing or .rice received by /i%. 1+0-!Art. 1-00. :/enever t/e .erson obliged by t/e decree o$ annul%ent to return t/e t/ing can not do so because it /as been lost t/roug/ /is $ault, /e s/all return t/e $ruits received and t/e value o$ t/e t/ing at t/e ti%e o$ t/e loss, (it/ interest $ro% t/e sa%e date. 1+0"a!Art. 1-01. T/e action $or annul%ent o$ contracts s/all be e3tinguis/ed (/en t/e t/ing (/ic/ is t/e object t/ereo$ is lost t/roug/ t/e $raud or $ault o$ t/e .erson (/o /as a rig/t to institute t/e .roceedings.9$ t/e rig/t o$ action is based u.on t/e inca.acity o$ any one o$ t/e contracting .arties, t/e loss o$ t/e t/ing s/all not be an obstacle to t/e success o$ t/e action, unless said loss too5 .lace t/roug/ t/e $raud or $ault o$ t/e .lainti$$. 1+1-a!Art. 1-0*. As long as one o$ t/e contracting .arties does not restore (/at in virtue o$ t/e decree o$ annul%ent /e is bound toreturn, t/e ot/er cannot be co%.elled to co%.ly (it/ (/at is incu%bent u.on /i%. 1+01! CHAPTER 1 - UNENFORCEABLE CONTRACTS "n# Art. 1-0+. T/e $ollo(ing contracts are unen$orceable, unless t/ey are rati$ied&1! T/ose entered into in t/e na%e o$ anot/er .erson by one (/o /as been given no aut/ority or legal re.resentation, or (/o /as acted beyond /is .o(ers)*! T/ose t/at do not co%.ly (it/ t/e =tatute o$ ;rauds as set $ort/ in t/is nu%ber. 9n t/e $ollo(ing cases an agree%ent /erea$ter %ade s/all be unen$orceable by action, unless t/e sa%e, or so%e note or %e%orandu%, t/ereo$, be in (riting, andsubscribed by t/e .arty c/arged, or by /is agent) evidence, t/ere$ore, o$ t/e agree%ent cannot be received (it/out t/e (riting, or a secondary evidence o$ its contents&a! An agree%ent t/at by its ter%s is not to be .er$or%ed (it/in a year $ro% t/e %a5ing t/ereo$)b! A s.ecial .ro%ise to ans(er $or t/e debt, de$ault, or %iscarriage o$ anot/er)c! An agree%ent %ade in consideration o$ %arriage, ot/er t/an a %utual .ro%ise to %arry)d! An agree%ent $or t/e sale o$ goods, c/attels or t/ings in action, at a .rice not less t/an $ive /undred .esos, unless t/e buyer acce.t and receive .art o$ suc/ goods and c/attels, or t/e evidences, or so%e o$ t/e%, o$ suc/ t/ings in action or .ayat t/e ti%e so%e .art o$ t/e .urc/ase %oney) but (/en a sale is %ade by auction and entry is %ade by t/e auctioneer in /issales boo5, at t/e ti%e o$ t/e sale, o$ t/e a%ount and 5ind o$ .ro.erty sold, ter%s o$ sale, .rice, na%es o$ t/e .urc/asers and .erson on (/ose account t/e sale is %ade, it is a su$$icient %e%orandu%)e! An agree%ent o$ t/e leasing $or a longer .eriod t/an one year, or $or t/e sale o$ real .ro.erty or o$ an interest t/erein)$! A re.resentation as to t/e credit o$ a t/ird .erson.+! T/ose (/ere bot/ .arties are inca.able o$ giving consent to a contract.Art. 1-0-. eit/er can t/e rig/t to set u. t/e de$ense o$ illegality be (aived.Art. 1-10. T/e action or de$ense $or t/e declaration o$ t/e ine3istence o$ a contract does not .rescribe. Art. 1-11. :/en t/e nullity .roceeds $ro% t/e illegality o$ t/e cause or object o$ t/e contract, and t/e act constitutes a cri%inal o$$ense, bot/ .arties being in .ari delicto, t/ey s/all /ave no action against eac/ ot/er, and bot/ s/all be .rosecuted. Aoreover, t/e .rovisions o$ t/e Penal Code relative to t/e dis.osal o$ e$$ects or instru%ents o$ a cri%e s/all be a..licable to t/e t/ings or t/e .rice o$ t/e contract.T/is rule s/all be a..licable (/en only one o$ t/e .arties is guilty) but t/e innocent one %ay clai% (/at /e /as given, and s/all not be bound to co%.ly (it/ /is .ro%ise. 1+05!Art. 1-1*. 9$ t/e act in (/ic/ t/e unla($ul or $orbidden cause consists does not constitute a cri%inal o$$ense, t/e $ollo(ing rules s/all be observed&1! :/en t/e $ault is on t/e .art o$ bot/ contracting .arties, neit/er %ay recover (/at /e /as given by virtue o$ t/e contract, or de%and t/e .er$or%ance o$ t/e ot/erBs underta5ing)*! :/en only one o$ t/e contracting .arties is at $ault, /e cannot recover (/at /e /as given by reason o$ t/e contract, or as5 $or t/e $ul$ill%ent o$ (/at /as been .ro%ised /i%. T/e ot/er, (/o is not at $ault, %ay de%and t/e return o$ (/at /e /as given (it/out any obligation to co%.ly /is .ro%ise. 1+06!Art. 1-1+. 9nterest .aid in e3cess o$ t/e interest allo(ed by t/e usury la(s %ay be recovered by t/e debtor, (it/ interest t/ereon $ro% t/e date o$ t/e .ay%ent.Art. 1-1-. :/en %oney is .aid or .ro.erty delivered $or an illegal .ur.ose, t/e contract %ay be re.udiated by one o$ t/e .arties be$ore t/e .ur.ose /as been acco%.lis/ed, or be$ore any da%age /as been caused to a t/ird .erson. 9n suc/ case, t/e courts %ay, i$ t/e .ublic interest (ill t/us be subserved, allo( t/e .arty re.udiating t/e contract to recover t/e %oney or .ro.erty.Art. 1-15. :/ere one o$ t/e .arties to an illegal contract is inca.able o$ giving consent, t/e courts %ay, i$ t/e interest o$ justice so de%ands allo( recovery o$ %oney or .ro.erty delivered by t/e inca.acitated .erson.Art. 1-16. :/en t/e agree%ent is not illegal .er se but is %erely .ro/ibited, and t/e .ro/ibition by t/e la( is designated $or t/e .rotection o$ t/e .lainti$$, /e %ay, i$ .ublic .olicy is t/ereby en/anced, recover (/at /e /as .aid or delivered.Art. 1-1". :/en t/e .rice o$ any article or co%%odity is deter%ined by statute, or by aut/ority o$ la(, any .erson .aying anya%ount in e3cess o$ t/e %a3i%u% .rice allo(ed %ay recover suc/ e3cess.Art. 1-11. :/en t/e la( $i3es, or aut/ori@es t/e $i3ing o$ t/e %a3i%u% nu%ber o$ /ours o$ labor, and a contract is entered into (/ereby a laborer underta5es to (or5 longer t/an t/e %a3i%u% t/us $i3ed, /e %ay de%and additional co%.ensation $orservice rendered beyond t/e ti%e li%it.Art. 1-12. :/en t/e la( sets, or aut/ori@es t/e setting o$ a %ini%u% (age $or laborers, and a contract is agreed u.on by (/ic/ a laborer acce.ts a lo(er (age, /e s/all be entitled to recover t/e de$iciency.Art. 1-*0. 9n case o$ a divisible contract, i$ t/e illegal ter%s can be se.arated $ro% t/e legal ones, t/e latter %ay be en$orced.Art. 1-*1. T/e de$ense o$ illegality o$ contract is not available to t/ird .ersons (/ose interests are not directly a$$ected.Art. 1-**. A contract (/ic/ is t/e direct result o$ a .revious illegal contract, is also void and ine3istent. Title IIINATURAL OBLIGATIONSArt. 1-*+. #bligations are civil or natural. Civil obligations give a rig/t o$ action to co%.el t/eir .er$or%ance. >atural obligations, not being based on .ositive la( but on e6uity and natural la(, do not grant a rig/t o$ action to en$orce t/eir .er$or%ance, but a$ter voluntary $ul$ill%ent by t/e obligor, t/ey aut/ori@e t/e retention o$ (/at /as been delivered or rendered by reason t/ereo$. =o%e natural obligations are set $ort/ in t/e $ollo(ing articles.Art. 1-*-. :/en a rig/t to sue u.on a civil obligation /as la.sed by e3tinctive .rescri.tion, t/e obligor (/o voluntarily .er$or%s t/e contract cannot recover (/at /e /as delivered or t/e value o$ t/e service /e /as rendered.Art. 1-*5. :/en (it/out t/e 5no(ledge or against t/e (ill o$ t/e debtor, a t/ird .erson .ays a debt (/ic/ t/e obligor is not legally bound to .ay because t/e action t/ereon /as .rescribed, but t/e debtor later voluntarily rei%burses t/e t/ird .erson, t/e obligor cannot recover (/at /e /as .aid.Art. 1-*6. :/en a %inor bet(een eig/teen and t(enty-one years o$ age (/o /as entered into a contract (it/out t/e consento$ t/e .arent or guardian, a$ter t/e annul%ent o$ t/e contract voluntarily returns t/e (/ole t/ing or .rice received, not(it/standing t/e $act t/e /e /as not been bene$ited t/ereby, t/ere is no rig/t to de%and t/e t/ing or .rice t/us returned.Art. 1-*". :/en a %inor bet(een eig/teen and t(enty-one years o$ age, (/o /as entered into a contract (it/out t/e consent o$ t/e .arent or guardian, voluntarily .ays a su% o$ %oney or delivers a $ungible t/ing in $ul$ill%ent o$ t/e obligation, t/ere s/all be no rig/t to recover t/e sa%e $ro% t/e obligee (/o /as s.ent or consu%ed it in good $ait/. 1160A!Art. 1-*1. :/en, a$ter an action to en$orce a civil obligation /as $ailed t/e de$endant voluntarily .er$or%s t/e obligation, /e cannot de%and t/e return o$ (/at /e /as delivered or t/e .ay%ent o$ t/e value o$ t/e service /e /as rendered.Art. 1-*2. :/en a testate or intestate /eir voluntarily .ays a debt o$ t/e decedent e3ceeding t/e value o$ t/e .ro.erty (/ic/ /e received by (ill or by t/e la( o$ intestacy $ro% t/e estate o$ t/e deceased, t/e .ay%ent is valid and cannot be rescinded by t/e .ayer.Art. 1-+0. :/en a (ill is declared void because it /as not been e3ecuted in accordance (it/ t/e $or%alities re6uired by la(, but one o$ t/e intestate /eirs, a$ter t/e settle%ent o$ t/e debts o$ t/e deceased, .ays a legacy in co%.liance (it/ a clause int/e de$ective (ill, t/e .ay%ent is e$$ective and irrevocable. Title IVESTOPPEL (n) Art. 1-+1. T/roug/ esto..el an ad%ission or re.resentation is rendered conclusive u.on t/e .erson %a5ing it, and cannot be denied or dis.roved as against t/e .erson relying t/ereon.Art. 1-+*. T/e .rinci.les o$ esto..el are /ereby ado.ted inso$ar as t/ey are not in con$lict (it/ t/e .rovisions o$ t/is Code, t/e Code o$ Co%%erce, t/e Rules o$ Court and s.ecial la(s.Art. 1-++. Esto..el %ay be in .ais or by deed.Art. 1-+-. :/en a .erson (/o is not t/e o(ner o$ a t/ing sells or alienates and delivers it, and later t/e seller or grantor ac6uires title t/ereto, suc/ title .asses by o.eration o$ la( to t/e buyer or grantee.Art. 1-+5. 9$ a .erson in re.resentation o$ anot/er sells or alienates a t/ing, t/e $or%er cannot subse6uently set u. /is o(n title as against t/e buyer or grantee.Art. 1-+6. A lessee or a bailee is esto..ed $ro% asserting title to t/e t/ing leased or received, as against t/e lessor or bailor.Art. 1-+". :/en in a contract bet(een t/ird .ersons concerning i%%ovable .ro.erty, one o$ t/e% is %isled by a .erson (it/ res.ect to t/e o(ners/i. or real rig/t over t/e real estate, t/e latter is .recluded $ro% asserting /is legal title or interest t/erein, .rovided all t/ese re6uisites are .resent&1! T/ere %ust be $raudulent re.resentation or (rong$ul conceal%ent o$ $acts 5no(n to t/e .arty esto..ed)*! T/e .arty .recluded %ust intend t/at t/e ot/er s/ould act u.on t/e $acts as %isre.resented)+! T/e .arty %isled %ust /ave been una(are o$ t/e true $acts) and-! T/e .arty de$rauded %ust /ave acted in accordance (it/ t/e %isre.resentation.Art. 1-+1. #ne (/o /as allo(ed anot/er to assu%e a..arent o(ners/i. o$ .ersonal .ro.erty $or t/e .ur.ose o$ %a5ing any trans$er o$ it, cannot, i$ /e received t/e su% $or (/ic/ a .ledge /as been constituted, set u. /is o(n title to de$eat t/e .ledgeo$ t/e .ro.erty, %ade by t/e ot/er to a .ledgee (/o received t/e sa%e in good $ait/ and $or value.Art. 1-+2. Esto..el is e$$ective only as bet(een t/e .arties t/ereto or t/eir successors in interest. Title VTRUSTS (n) CHAPTER 1 - GENERAL PROVISIONS Art. 1--0. A .erson (/o establis/es a trust is called t/e trustor) one in (/o% con$idence is re.osed as regards .ro.erty $or t/e bene$it o$ anot/er .erson is 5no(n as t/e trustee) and t/e .erson $or (/ose bene$it t/e trust /as been created is re$erred to as t/e bene$iciary.Art. 1--1. Trusts are eit/er e3.ress or i%.lied. E3.ress trusts are created by t/e intention o$ t/e trustor or o$ t/e .arties. 9%.lied trusts co%e into being by o.eration o$ la(.Art. 1--*. T/e .rinci.les o$ t/e general la( o$ trusts, inso$ar as t/ey are not in con$lict (it/ t/is Code, t/e Code o$ Co%%erce, t/e Rules o$ Court and s.ecial la(s are /ereby ado.ted. CHAPTER * - EXPRESS TRUSTS Art. 1--+. >o e3.ress trusts concerning an i%%ovable or any interest t/erein %ay be .roved by .arol evidence.Art. 1---. >o .articular (ords are re6uired $or t/e creation o$ an e3.ress trust, it being su$$icient t/at a trust is clearly intended.Art. 1--5. >o trust s/all $ail because t/e trustee a..ointed declines t/e designation, unless t/e contrary s/ould a..ear in t/e instru%ent constituting t/e trust.Art. 1--6. Acce.tance by t/e bene$iciary is necessary. >evert/eless, i$ t/e trust i%.oses no onerous condition u.on t/e bene$iciary, /is acce.tance s/all be .resu%ed, i$ t/ere is no .roo$ to t/e contrary. CHAPTER + - IPLIED TRUSTS Art. 1--". T/e enu%eration o$ t/e $ollo(ing cases o$ i%.lied trust does not e3clude ot/ers establis/ed by t/e general la( o$ trust, but t/e li%itation laid do(n in Article 1--* s/all be a..licable.Art. 1--1. T/ere is an i%.lied trust (/en .ro.erty is sold, and t/e legal estate is granted to one .arty but t/e .rice is .aid by anot/er $or t/e .ur.ose o$ /aving t/e bene$icial interest o$ t/e .ro.erty. T/e $or%er is t/e trustee, (/ile t/e latter is t/e bene$iciary. Ho(ever, i$ t/e .erson to (/o% t/e title is conveyed is a c/ild, legiti%ate or illegiti%ate, o$ t/e one .aying t/e .rice o$ t/e sale, no trust is i%.lied by la(, it being dis.utably .resu%ed t/at t/ere is a gi$t in $avor o$ t/e c/ild.Art. 1--2. T/ere is also an i%.lied trust (/en a donation is %ade to a .erson but it a..ears t/at alt/oug/ t/e legal estate is trans%itted to t/e donee, /e nevert/eless is eit/er to /ave no bene$icial interest or only a .art t/ereo$.Art. 1-50. 9$ t/e .rice o$ a sale o$ .ro.erty is loaned or .aid by one .erson $or t/e bene$it o$ anot/er and t/e conveyance is %ade to t/e lender or .ayor to secure t/e .ay%ent o$ t/e debt, a trust arises by o.eration o$ la( in $avor o$ t/e .erson to (/o% t/e %oney is loaned or $or (/o% its is .aid. T/e latter %ay redee% t/e .ro.erty and co%.el a conveyance t/ereo$ to /i%.Art. 1-51. :/en land .asses by succession to any .erson and /e causes t/e legal title to be .ut in t/e na%e o$ anot/er, a trust is establis/ed by i%.lication o$ la( $or t/e bene$it o$ t/e true o(ner.Art. 1-5*. 9$ t(o or %ore .ersons agree to .urc/ase .ro.erty and by co%%on consent t/e legal title is ta5en in t/e na%e o$ one o$ t/e% $or t/e bene$it o$ all, a trust is created by $orce o$ la( in $avor o$ t/e ot/ers in .ro.ortion to t/e interest o$ eac/.Art. 1-5+. :/en .ro.erty is conveyed to a .erson in reliance u.on /is declared intention to /old it $or, or trans$er it to anot/er or t/e grantor, t/ere is an i%.lied trust in $avor o$ t/e .erson (/ose bene$it is conte%.lated.Art. 1-5-. 9$ an absolute conveyance o$ .ro.erty is %ade in order to secure t/e .er$or%ance o$ an obligation o$ t/e grantor to(ard t/e grantee, a trust by virtue o$ la( is establis/ed. 9$ t/e $ul$ill%ent o$ t/e obligation is o$$ered by t/e grantor (/en it beco%es due, /e %ay de%and t/e reconveyance o$ t/e .ro.erty to /i%.Art. 1-55. :/en any trustee, guardian or ot/er .erson /olding a $iduciary relations/i. uses trust $unds $or t/e .urc/ase o$ .ro.erty and causes t/e conveyance to be %ade to /i% or to a t/ird .erson, a trust is establis/ed by o.eration o$ la( in $avor o$ t/e .erson to (/o% t/e $unds belong.Art. 1-56. 9$ .ro.erty is ac6uired t/roug/ %ista5e or $raud, t/e .erson obtaining it is, by $orce o$ la(, considered a trustee o$ an i%.lied trust $or t/e bene$it o$ t/e .erson $ro% (/o% t/e .ro.erty co%es.Art. 1-5". An i%.lied trust %ay be .roved by oral evidence. Title VISALES CHAPTER 1 - NATURE AND FOR OF THE CONTRACT Art. 1-51. 4y t/e contract o$ sale one o$ t/e contracting .arties obligates /i%sel$ to trans$er t/e o(ners/i. and to deliver a deter%inate t/ing, and t/e ot/er to .ay t/ere$or a .rice certain in %oney or its e6uivalent.A contract o$ sale %ay be absolute or conditional. 1--5a!Art. 1-52. T/e t/ing %ust be licit and t/e vendor %ust /ave a rig/t to trans$er t/e o(ners/i. t/ereo$ at t/e ti%e it is delivered. n!Art. 1-60. A t/ing is deter%inate (/en it is .articularly designated or ./ysical segregated $ro% all ot/er o$ t/e sa%e class.T/e re6uisite t/at a t/ing be deter%inate is satis$ied i$ at t/e ti%e t/e contract is entered into, t/e t/ing is ca.able o$ being %ade deter%inate (it/out t/e necessity o$ a ne( or $urt/er agree%ent bet(een t/e .arties. n!Art. 1-61. T/ings /aving a .otential e3istence %ay be t/e object o$ t/e contract o$ sale.T/e e$$icacy o$ t/e sale o$ a %ere /o.e or e3.ectancy is dee%ed subject to t/e condition t/at t/e t/ing (ill co%e into e3istence.T/e sale o$ a vain /o.e or e3.ectancy is void. n!Art. 1-6*. T/e goods (/ic/ $or% t/e subject o$ a contract o$ sale %ay be eit/er e3isting goods, o(ned or .ossessed by t/e seller, or goods to be %anu$actured, raised, or ac6uired by t/e seller a$ter t/e .er$ection o$ t/e contract o$ sale, in t/is Title called F$uture goods.GT/ere %ay be a contract o$ sale o$ goods, (/ose ac6uisition by t/e seller de.ends u.on a contingency (/ic/ %ay or %ay not /a..en. n!Art. 1-6+. T/e sole o(ner o$ a t/ing %ay sell an undivided interest t/erein. n!Art. 1-6-. 9n t/e case o$ $ungible goods, t/ere %ay be a sale o$ an undivided s/are o$ a s.eci$ic %ass, t/oug/ t/e seller .ur.orts to sell and t/e buyer to buy a de$inite nu%ber, (eig/t or %easure o$ t/e goods in t/e %ass, and t/oug/ t/e nu%ber,(eig/t or %easure o$ t/e goods in t/e %ass is undeter%ined. 4y suc/ a sale t/e buyer beco%es o(ner in co%%on o$ suc/ a s/are o$ t/e %ass as t/e nu%ber, (eig/t or %easure boug/t bears to t/e nu%ber, (eig/t or %easure o$ t/e %ass. 9$ t/e %ass contains less t/an t/e nu%ber, (eig/t or %easure boug/t, t/e buyer beco%es t/e o(ner o$ t/e (/ole %ass and t/e seller is bound to %a5e good t/e de$iciency $ro% goods o$ t/e sa%e 5ind and 6uality, unless a contrary intent a..ears. n!Art. 1-65. T/ings subject to a resolutory condition %ay be t/e object o$ t/e contract o$ sale. n!Art. 1-66. 9n construing a contract containing .rovisions c/aracteristic o$ bot/ t/e contract o$ sale and o$ t/e contract o$ agency to sell, t/e essential clauses o$ t/e (/ole instru%ent s/all be considered. n!Art. 1-6". A contract $or t/e delivery at a certain .rice o$ an article (/ic/ t/e vendor in t/e ordinary course o$ /is business %anu$actures or .rocures $or t/e general %ar5et, (/et/er t/e sa%e is on /and at t/e ti%e or not, is a contract o$ sale, but i$ t/e goods are to be %anu$actured s.ecially $or t/e custo%er and u.on /is s.ecial order, and not $or t/e general %ar5et, it is a contract $or a .iece o$ (or5. n!Art. 1-61. 9$ t/e consideration o$ t/e contract consists .artly in %oney, and .artly in anot/er t/ing, t/e transaction s/all be c/aracteri@ed by t/e %ani$est intention o$ t/e .arties. 9$ suc/ intention does not clearly a..ear, it s/all be considered a barteri$ t/e value o$ t/e t/ing given as a .art o$ t/e consideration e3ceeds t/e a%ount o$ t/e %oney or its e6uivalent) ot/er(ise, it is a sale. 1--6a!Art. 1-62. 9n order t/at t/e .rice %ay be considered certain, it s/all be su$$icient t/at it be so (it/ re$erence to anot/er t/ing certain, or t/at t/e deter%ination t/ereo$ be le$t to t/e judg%ent o$ a s.ecial .erson or .ersons.=/ould suc/ .erson or .ersons be unable or un(illing to $i3 it, t/e contract s/all be ine$$icacious, unless t/e .arties subse6uently agree u.on t/e .rice.9$ t/e t/ird .erson or .ersons acted in bad $ait/ or by %ista5e, t/e courts %ay $i3 t/e .rice.:/ere suc/ t/ird .erson or .ersons are .revented $ro% $i3ing t/e .rice or ter%s by $ault o$ t/e seller or t/e buyer, t/e .arty not in $ault %ay /ave suc/ re%edies against t/e .arty in $ault as are allo(ed t/e seller or t/e buyer, as t/e case %ay be. 1--"a!Art. 1-"0. Eross inade6uacy o$ .rice does not a$$ect a contract o$ sale, e3ce.t as it %ay indicate a de$ect in t/e consent, or t/at t/e .arties really intended a donation or so%e ot/er act or contract. n!Art. 1-"1. 9$ t/e .rice is si%ulated, t/e sale is void, but t/e act %ay be s/o(n to /ave been in reality a donation, or so%e ot/er act or contract. n!Art. 1-"*. T/e .rice o$ securities, grain, li6uids, and ot/er t/ings s/all also be considered certain, (/en t/e .rice $i3ed is t/at(/ic/ t/e t/ing sold (ould /ave on a de$inite day, or in a .articular e3c/ange or %ar5et, or (/en an a%ount is $i3ed above or belo( t/e .rice on suc/ day, or in suc/ e3c/ange or %ar5et, .rovided said a%ount be certain. 1--1!Art. 1-"+. T/e $i3ing o$ t/e .rice can never be le$t to t/e discretion o$ one o$ t/e contracting .arties. Ho(ever, i$ t/e .rice $i3ed by one o$ t/e .arties is acce.ted by t/e ot/er, t/e sale is .er$ected. 1--2a!Art. 1-"-. :/ere t/e .rice cannot be deter%ined in accordance (it/ t/e .receding articles, or in any ot/er %anner, t/e contract is ine$$icacious. Ho(ever, i$ t/e t/ing or any .art t/ereo$ /as been delivered to and a..ro.riated by t/e buyer /e %ust .ay a reasonable .rice t/ere$or. :/at is a reasonable .rice is a 6uestion o$ $act de.endent on t/e circu%stances o$ eac/ .articular case. n!Art. 1-"5. T/e contract o$ sale is .er$ected at t/e %o%ent t/ere is a %eeting o$ %inds u.on t/e t/ing (/ic/ is t/e object o$ t/e contract and u.on t/e .rice.;ro% t/at %o%ent, t/e .arties %ay reci.rocally de%and .er$or%ance, subject to t/e .rovisions o$ t/e la( governing t/e $or% o$ contracts. 1-50a!Art. 1-"6. 9n t/e case o$ a sale by auction&1! :/ere goods are .ut u. $or sale by auction in lots, eac/ lot is t/e subject o$ a se.arate contract o$ sale.*! A sale by auction is .er$ected (/en t/e auctioneer announces its .er$ection by t/e $all o$ t/e /a%%er, or in ot/er custo%ary %anner. 1. ? Eeneral Provisions Art. 1-25. T/e vendor is bound to trans$er t/e o(ners/i. o$ and deliver, as (ell as (arrant t/e t/ing (/ic/ is t/e object o$ t/e sale. 1-61a!Art. 1-26. T/e o(ners/i. o$ t/e t/ing sold is ac6uired by t/e vendee $ro% t/e %o%ent it is delivered to /i% in any o$ t/e (ays s.eci$ied in Articles 1-2" to 1501, or in any ot/er %anner signi$ying an agree%ent t/at t/e .ossession is trans$erred $ro% t/e vendor to t/e vendee. n! =ECT9#> *. ? Celivery o$ t/e T/ing =old Art. 1-2". T/e t/ing sold s/all be understood as delivered, (/en it is .laced in t/e control and .ossession o$ t/e vendee. 1-6*a!Art. 1-21. :/en t/e sale is %ade t/roug/ a .ublic instru%ent, t/e e3ecution t/ereo$ s/all be e6uivalent to t/e delivery o$ t/et/ing (/ic/ is t/e object o$ t/e contract, i$ $ro% t/e deed t/e contrary does not a..ear or cannot clearly be in$erred.:it/ regard to %ovable .ro.erty, its delivery %ay also be %ade by t/e delivery o$ t/e 5eys o$ t/e .lace or de.ository (/ere itis stored or 5e.t. 1-6+a!Art. 1-22. T/e delivery o$ %ovable .ro.erty %ay li5e(ise be %ade by t/e %ere consent or agree%ent o$ t/e contracting .arties, i$ t/e t/ing sold cannot be trans$erred to t/e .ossession o$ t/e vendee at t/e ti%e o$ t/e sale, or i$ t/e latter already /ad it in /is .ossession $or any ot/er reason. 1-6+a!Art. 1500. T/ere %ay also be tradition constitutu% .ossessoriu%. n!Art. 1501. :it/ res.ect to incor.oreal .ro.erty, t/e .rovisions o$ t/e $irst .aragra./ o$ article 1-21 s/all govern. 9n any ot/er case (/erein said .rovisions are not a..licable, t/e .lacing o$ t/e titles o$ o(ners/i. in t/e .ossession o$ t/e vendee or t/e use by t/e vendee o$ /is rig/ts, (it/ t/e vendorBs consent, s/all be understood as a delivery. 1-6-!Art. 150*. :/en goods are delivered to t/e buyer Fon sale or returnG to give t/e buyer an o.tion to return t/e goods instead o$ .aying t/e .rice, t/e o(ners/i. .asses to t/e buyer o$ delivery, but /e %ay revest t/e o(ners/i. in t/e seller by returning or tendering t/e goods (it/in t/e ti%e $i3ed in t/e contract, or, i$ no ti%e /as been $i3ed, (it/in a reasonable ti%e. n!:/en goods are delivered to t/e buyer on a..roval or on trial or on satis$action, or ot/er si%ilar ter%s, t/e o(ners/i. t/erein .asses to t/e buyer&1! :/en /e signi$ies /is a..roval or acce.tance to t/e seller or does any ot/er act ado.ting t/e transaction)*! 9$ /e does not signi$y /is a..roval or acce.tance to t/e seller, but retains t/e goods (it/out giving notice o$ rejection, t/en i$ a ti%e /as been $i3ed $or t/e return o$ t/e goods, on t/e e3.iration o$ suc/ ti%e, and, i$ no ti%e /as been $i3ed, on t/ee3.iration o$ a reasonable ti%e. :/at is a reasonable ti%e is a 6uestion o$ $act. n!Art. 150+. :/en t/ere is a contract o$ sale o$ s.eci$ic goods, t/e seller %ay, by t/e ter%s o$ t/e contract, reserve t/e rig/t o$ .ossession or o(ners/i. in t/e goods until certain conditions /ave been $ul$illed. T/e rig/t o$ .ossession or o(ners/i. %ay be t/us reserved not(it/standing t/e delivery o$ t/e goods to t/e buyer or to a carrier or ot/er bailee $or t/e .ur.ose o$ trans%ission to t/e buyer.:/ere goods are s/i..ed, and by t/e bill o$ lading t/e goods are deliverable to t/e seller or /is agent, or to t/e order o$ t/e seller or o$ /is agent, t/e seller t/ereby reserves t/e o(ners/i. in t/e goods. 4ut, i$ e3ce.t $or t/e $or% o$ t/e bill o$ lading, t/e o(ners/i. (ould /ave .assed to t/e buyer on s/i.%ent o$ t/e goods, t/e sellerBs .ro.erty in t/e goods s/all be dee%ed to be only $or t/e .ur.ose o$ securing .er$or%ance by t/e buyer o$ /is obligations under t/e contract.:/ere goods are s/i..ed, and by t/e bill o$ lading t/e goods are deliverable to order o$ t/e buyer or o$ /is agent, but .ossession o$ t/e bill o$ lading is retained by t/e seller or /is agent, t/e seller t/ereby reserves a rig/t to t/e .ossession o$ t/e goods as against t/e buyer.:/ere t/e seller o$ goods dra(s on t/e buyer $or t/e .rice and trans%its t/e bill o$ e3c/ange and bill o$ lading toget/er to t/e buyer to secure acce.tance or .ay%ent o$ t/e bill o$ e3c/ange, t/e buyer is bound to return t/e bill o$ lading i$ /e does not /onor t/e bill o$ e3c/ange, and i$ /e (rong$ully retains t/e bill o$ lading /e ac6uires no added rig/t t/ereby. 9$, /o(ever, t/e bill o$ lading .rovides t/at t/e goods are deliverable to t/e buyer or to t/e order o$ t/e buyer, or is indorsed in blan5, or tot/e buyer by t/e consignee na%ed t/erein, one (/o .urc/ases in good $ait/, $or value, t/e bill o$ lading, or goods $ro% t/e buyer (ill obtain t/e o(ners/i. in t/e goods, alt/oug/ t/e bill o$ e3c/ange /as not been /onored, .rovided t/at suc/ .urc/aser /as received delivery o$ t/e bill o$ lading indorsed by t/e consignee na%ed t/erein, or o$ t/e goods, (it/out noticeo$ t/e $acts %a5ing t/e trans$er (rong$ul. n!Art. 150-. ot/ing in t/is Title, /o(ever, s/all a$$ect&1! T/e .rovisions o$ any $actorsB act, recording la(s, or any ot/er .rovision o$ la( enabling t/e a..arent o(ner o$ goods to dis.ose o$ t/e% as i$ /e (ere t/e true o(ner t/ereo$)*! T/e validity o$ any contract o$ sale under statutory .o(er o$ sale or under t/e order o$ a court o$ co%.etent jurisdiction)+! Purc/ases %ade in a %erc/antBs store, or in $airs, or %ar5ets, in accordance (it/ t/e Code o$ Co%%erce and s.ecial la(s. n!Art. 1506. :/ere t/e seller o$ goods /as a voidable title t/ereto, but /is title /as not been avoided at t/e ti%e o$ t/e sale, t/ebuyer ac6uires a good title to t/e goods, .rovided /e buys t/e% in good $ait/, $or value, and (it/out notice o$ t/e sellerBs de$ect o$ title. n!Art. 150". A docu%ent o$ title in (/ic/ it is stated t/at t/e goods re$erred to t/erein (ill be delivered to t/e bearer, or to t/e order o$ any .erson na%ed in suc/ docu%ent is a negotiable docu%ent o$ title. n!Art. 1501. A negotiable docu%ent o$ title %ay be negotiated by delivery&1! :/ere by t/e ter%s o$ t/e docu%ent t/e carrier, (are/ouse%an or ot/er bailee issuing t/e sa%e underta5es to deliver t/e goods to t/e bearer) or*! :/ere by t/e ter%s o$ t/e docu%ent t/e carrier, (are/ouse%an or ot/er bailee issuing t/e sa%e underta5es to deliver t/e goods to t/e order o$ a s.eci$ied .erson, and suc/ .erson or a subse6uent endorsee o$ t/e docu%ent /as indorsed it in blan5 or to t/e bearer.:/ere by t/e ter%s o$ a negotiable docu%ent o$ title t/e goods are deliverable to bearer or (/ere a negotiable docu%ent o$ title /as been indorsed in blan5 or to bearer, any /older %ay indorse t/e sa%e to /i%sel$ or to any s.eci$ied .erson, and in suc/ case t/e docu%ent s/all t/erea$ter be negotiated only by t/e endorse%ent o$ suc/ endorsee. n!Art. 1502. A negotiable docu%ent o$ title %ay be negotiated by t/e endorse%ent o$ t/e .erson to (/ose order t/e goods are by t/e ter%s o$ t/e docu%ent deliverable. =uc/ endorse%ent %ay be in blan5, to bearer or to a s.eci$ied .erson. 9$ indorsed to a s.eci$ied .erson, it %ay be again negotiated by t/e endorse%ent o$ suc/ .erson in blan5, to bearer or to anot/er s.eci$ied .erson. =ubse6uent negotiations %ay be %ade in li5e %anner. n!Art. 1510. 9$ a docu%ent o$ title (/ic/ contains an underta5ing by a carrier, (are/ouse%an or ot/er bailee to deliver t/e goods to bearer, to a s.eci$ied .erson or order o$ a s.eci$ied .erson or (/ic/ contains (ords o$ li5e i%.ort, /as .laced u.onit t/e (ords Fnot negotiable,G Fnon-negotiableG or t/e li5e, suc/ docu%ent %ay nevert/eless be negotiated by t/e /older and is a negotiable docu%ent o$ title (it/in t/e %eaning o$ t/is Title. 4ut not/ing in t/is Title contained s/all be construed as li%iting or de$ining t/e e$$ect u.on t/e obligations o$ t/e carrier, (are/ouse%an, or ot/er bailee issuing a docu%ent o$ title or.lacing t/ereon t/e (ords Fnot negotiable,G Fnon-negotiable,G or t/e li5e. n!Lawcenter.phArt. 1511. A docu%ent o$ title (/ic/ is not in suc/ $or% t/at it can be negotiated by delivery %ay be trans$erred by t/e /older by delivery to a .urc/aser or donee. A non-negotiable docu%ent cannot be negotiated and t/e endorse%ent o$ suc/ a docu%ent gives t/e trans$eree no additional rig/t. n!Art. 151*. A negotiable docu%ent o$ title %ay be negotiated&1! 4y t/e o(ner t/ere$or) or*! 4y any .erson to (/o% t/e .ossession or custody o$ t/e docu%ent /as been entrusted by t/e o(ner, i$, by t/e ter%s o$ t/e docu%ent t/e bailee issuing t/e docu%ent underta5es to deliver t/e goods to t/e order o$ t/e .erson to (/o% t/e .ossession or custody o$ t/e docu%ent /as been entrusted, or i$ at t/e ti%e o$ suc/ entrusting t/e docu%ent is in suc/ $or% t/at it %ay be negotiated by delivery. n!Art. 151+. A .erson to (/o% a negotiable docu%ent o$ title /as been duly negotiated ac6uires t/ereby&Lawcenter.ph1! =uc/ title to t/e goods as t/e .erson negotiating t/e docu%ent to /i% /ad or /ad ability to convey to a .urc/aser in good$ait/ $or value and also suc/ title to t/e goods as t/e .erson to (/ose order t/e goods (ere to be delivered by t/e ter%s o$ t/e docu%ent /ad or /ad ability to convey to a .urc/aser in good $ait/ $or value) and*! T/e direct obligation o$ t/e bailee issuing t/e docu%ent to /old .ossession o$ t/e goods $or /i% according to t/e ter%s o$t/e docu%ent as $ully as i$ suc/ bailee /ad contracted directly (it/ /i%. n!Art. 151-. A .erson to (/o% a docu%ent o$ title /as been trans$erred, but not negotiated, ac6uires t/ereby, as against t/e trans$eror, t/e title to t/e goods, subject to t/e ter%s o$ any agree%ent (it/ t/e trans$eror.9$ t/e docu%ent is non-negotiable, suc/ .erson also ac6uires t/e rig/t to noti$y t/e bailee (/o issued t/e docu%ent o$ t/e trans$er t/ereo$, and t/ereby to ac6uire t/e direct obligation o$ suc/ bailee to /old .ossession o$ t/e goods $or /i% accordingto t/e ter%s o$ t/e docu%ent.Prior to t/e noti$ication to suc/ bailee by t/e trans$eror or trans$eree o$ a non-negotiable docu%ent o$ title, t/e title o$ t/e trans$eree to t/e goods and t/e rig/t to ac6uire t/e obligation o$ suc/ bailee %ay be de$eated by t/e levy o$ an attac/%ent o$ e3ecution u.on t/e goods by a creditor o$ t/e trans$eror, or by a noti$ication to suc/ bailee by t/e trans$eror or a subse6uent .urc/aser $ro% t/e trans$er o$ a subse6uent sale o$ t/e goods by t/e trans$eror. n!Art. 1515. :/ere a negotiable docu%ent o$ title is trans$erred $or value by delivery, and t/e endorse%ent o$ t/e trans$eror is essential $or negotiation, t/e trans$eree ac6uires a rig/t against t/e trans$eror to co%.el /i% to endorse t/e docu%ent unless a contrary intention a..ears. T/e negotiation s/all ta5e e$$ect as o$ t/e ti%e (/en t/e endorse%ent is actually %ade. n!Art. 1516. A .erson (/o $or value negotiates or trans$ers a docu%ent o$ title by endorse%ent or delivery, including one (/o assigns $or value a clai% secured by a docu%ent o$ title unless a contrary intention a..ears, (arrants&1! T/at t/e docu%ent is genuine)*! T/at /e /as a legal rig/t to negotiate or trans$er it)+! T/at /e /as 5no(ledge o$ no $act (/ic/ (ould i%.air t/e validity or (ort/ o$ t/e docu%ent) and-! T/at /e /as a rig/t to trans$er t/e title to t/e goods and t/at t/e goods are %erc/antable or $it $or a .articular .ur.ose, (/enever suc/ (arranties (ould /ave been i%.lied i$ t/e contract o$ t/e .arties /ad been to trans$er (it/out a docu%ent o$ title t/e goods re.resented t/ereby. n!Art. 151". T/e endorse%ent o$ a docu%ent o$ title s/all not %a5e t/e endorser liable $or any $ailure on t/e .art o$ t/e bailee (/o issued t/e docu%ent or .revious endorsers t/ereo$ to $ul$ill t/eir res.ective obligations. n!Art. 1511. T/e validity o$ t/e negotiation o$ a negotiable docu%ent o$ title is not i%.aired by t/e $act t/at t/e negotiation (as a breac/ o$ duty on t/e .art o$ t/e .erson %a5ing t/e negotiation, or by t/e $act t/at t/e o(ner o$ t/e docu%ent (as de.rived o$ t/e .ossession o$ t/e sa%e by loss, t/e$t, $raud, accident, %ista5e, duress, or conversion, i$ t/e .erson to (/o% t/e docu%ent (as negotiated or a .erson to (/o% t/e docu%ent (as subse6uently negotiated .aid value t/ere$or in good $ait/ (it/out notice o$ t/e breac/ o$ duty, or loss, t/e$t, $raud, accident, %ista5e, duress or conversion. n!Art. 1512. 9$ goods are delivered to a bailee by t/e o(ner or by a .erson (/ose act in conveying t/e title to t/e% to a .urc/aser in good $ait/ $or value (ould bind t/e o(ner and a negotiable docu%ent o$ title is issued $or t/e% t/ey cannot t/erea$ter, (