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REPUBLIC ACT NO. 386

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

CHAPTER I
EFFECT AND APPLICATION OF LAWS

Article 1. This Act shall be known as the

"Civil Code of the Philippines." (n)

Art. 2. Laws shall take effect after fifteen

days following the completion of their
publication in any newspaper of general
circulation (E.O. 200), unless it is otherwise
provided. This Code shall take effect one
year after such publication. (1a)

Art. 3. Ignorance of the law excuses no one

from compliance therewith. (2)

Art. 4. Laws shall have no retroactive effect,

unless the contrary is provided. (3)

Art. 5. Acts executed against the provisions

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

Art. 6. Rights may be waived, unless the

waiver is contrary to law, public order,
public policy, morals, or good customs, or
prejudicial to a third person with a right
recognized by law. (4a)

Art. 7. Laws are repealed only by

subsequent ones, and their violation or non-
observance shall not be excused by disuse,
or custom or practice to the contrary.

When the courts declared a law to be

inconsistent with the Constitution, the
former shall be void and the latter shall
govern.

Administrative or executive acts, orders and

regulations shall be valid only when they are
not contrary to the laws or the Constitution.
(5a)
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Art. 8. Judicial decisions applying or

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

Art. 9. No judge or court shall decline to

render judgment by reason of the silence,
obscurity or insufficiency of the laws. (6)

Art. 10. In case of doubt in the

interpretation or application of laws, it is
presumed that the lawmaking body intended
right and justice to prevail. (n)

Art. 11. Customs which are contrary to law,

public order or public policy shall not be
countenanced. (n)

Art. 12. A custom must be proved as a fact,

according to the rules of evidence. (n)

Art. 13. When the laws speak of years,

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

If months are designated by their name, they

shall be computed by the number of days
which they respectively have.

In computing a period, the first day shall be

excluded, and the last day included. (7a)

Art. 14. Penal laws and those of public

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

Art. 15. Laws relating to family rights and

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

Art. 16. Real property as well as personal

property is subject to the law of the country
where it is stipulated.
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However, intestate and testamentary

successions, both with respect to the order of
succession and to the amount of
successional rights and to the intrinsic
validity of testamentary provisions, shall be
regulated by the national law of the person
whose succession is under consideration,
whatever may be the nature of the property
and regardless of the country wherein said
property may be found. (10a)

Art. 17. The forms and solemnities of

contracts, wills, and other public instruments
shall be governed by the laws of the country
in which they are executed.

When the acts referred to are executed

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

Prohibitive laws concerning persons, their

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

Art. 18. In matters which are governed by

the Code of Commerce and special laws,
their deficiency shall be supplied by the
provisions of this Code. (16a)

CHAPTER 2
HUMAN RELATIONS (n)

Art. 19. Every person must, in the exercise

of his rights and in the performance of his
duties, act with justice, give everyone his
due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law,

wilfully or negligently causes damage to
another, shall indemnify the latter for the
same.
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Art. 21. Any person who wilfully causes loss

or injury to another in a manner that is
contrary to morals, good customs or public
policy shall compensate the latter for the
damage.

Art. 22. Every person who through an act of

performance by another, or any other means,
acquires or comes into possession of
something at the expense of the latter
without just or legal ground, shall return the
same to him.

Art. 23. Even when an act or event causing

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

Art. 24. In all contractual, property or other

relations, when one of the parties is at a
disadvantage on account of his moral
dependence, ignorance, indigence, mental
weakness, tender age or other handicap, the
courts must be vigilant for his protection.

Art. 25. Thoughtless extravagance in

expenses for pleasure or display during a
period of acute public want or emergency
may be stopped by order of the courts at the
instance of any government or private
charitable institution.

Art. 26. Every person shall respect the

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

(1) Prying into the privacy of

another's residence:

(2) Meddling with or disturbing the

private life or family relations of
another;

(3) Intriguing to cause another to be

alienated from his friends;
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(4) Vexing or humiliating another on

account of his religious beliefs, lowly
station in life, place of birth, physical
defect, or other personal condition.

Art. 27. Any person suffering material or

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

Art. 28. Unfair competition in agricultural,

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

Art. 29. When the accused in a criminal

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

If in a criminal case the judgment of

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

Art. 30. When a separate civil action is

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

Art. 31. When the civil action is based on an

obligation not arising from the act or
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omission complained of as a felony, such

civil action may proceed independently of
the criminal proceedings and regardless of
the result of the latter.

Art. 32. Any public officer or employee, or

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

(1) Freedom of religion;

(2) Freedom of speech;

(3) Freedom to write for the press or

to maintain a periodical publication;

(4) Freedom from arbitrary or illegal

detention;

(5) Freedom of suffrage;

(6) The right against deprivation of

property without due process of law;

(7) The right to a just compensation

when private property is taken for
public use;

(8) The right to the equal protection

of the laws;

(9) The right to be secure in one's

person, house, papers, and effects
against unreasonable searches and
seizures;

(10) The liberty of abode and of

changing the same;

(11) The privacy of communication

and correspondence;

(12) The right to become a member

of associations or societies for
purposes not contrary to law;
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(13) The right to take part in a

peaceable assembly to petition the
government for redress of grievances;

(14) The right to be free from

involuntary servitude in any form;

(15) The right of the accused against

excessive bail;

(16) The right of the accused to be

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

(17) Freedom from being compelled

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

(18) Freedom from excessive fines,

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

(19) Freedom of access to the courts.

In any of the cases referred to in this article,

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

The indemnity shall include moral damages.

Exemplary damages may also be
adjudicated.
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The responsibility herein set forth is not

demandable from a judge unless his act or
omission constitutes a violation of the Penal
Code or other penal statute.

Art. 33. In cases of defamation, fraud, and

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

Art. 34. When a member of a city or

municipal police force refuses or fails to
render aid or protection to any person in
case of danger to life or property, such peace
officer shall be primarily liable for damages,
and the city or municipality shall be
subsidiarily responsible therefor. The civil
action herein recognized shall be
independent of any criminal proceedings,
and a preponderance of evidence shall
suffice to support such action.

Art. 35. When a person, claiming to be

injured by a criminal offense, charges
another with the same, for which no
independent civil action is granted in this
Code or any special law, but the justice of
the peace finds no reasonable grounds to
believe that a crime has been committed, or
the prosecuting attorney refuses or fails to
institute criminal proceedings, the complaint
may bring a civil action for damages against
the alleged offender. Such civil action may
be supported by a preponderance of
evidence. Upon the defendant's motion, the
court may require the plaintiff to file a bond
to indemnify the defendant in case the
complaint should be found to be malicious.

If during the pendency of the civil action, an

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

Art. 36. Pre-judicial questions which must

be decided before any criminal prosecution
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may be instituted or may proceed, shall be

governed by rules of court which the
Supreme Court shall promulgate and which
shall not be in conflict with the provisions of
this Code.

BOOK I
PERSONS

Title I. - CIVIL PERSONALITY

CHAPTER 1
GENERAL PROVISIONS

Art. 37. Juridical capacity, which is the

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

Art. 38. Minority, insanity or imbecility, the

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

Art. 39. The following circumstances,

among others, modify or limit capacity to
act: age, insanity, imbecility, the state of
being a deaf-mute, penalty, prodigality,
family relations, alienage, absence,
insolvency and trusteeship. The
consequences of these circumstances are
governed in this Code, other codes, the
Rules of Court, and in special laws.
Capacity to act is not limited on account of
religious belief or political opinion.

A married woman, twenty-one years of age

or over, is qualified for all acts of civil life,
except in cases specified by law. (n)

CHAPTER 2
NATURAL PERSONS

Art. 40. Birth determines personality; but the

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conceived child shall be considered born for

all purposes that are favorable to it, provided
it be born later with the conditions specified
in the following article. (29a)

Art. 41. For civil purposes, the fetus is

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

Art. 42. Civil personality is extinguished by

death.

The effect of death upon the rights and

obligations of the deceased is determined by
law, by contract and by will. (32a)

Art. 43. If there is a doubt, as between two

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

CHAPTER 3
JURIDICAL PERSONS

Art. 44. The following are juridical persons:

(1) The State and its political
subdivisions;

(2) Other corporations, institutions

and entities for public interest or
purpose, created by law; their
personality begins as soon as they
have been constituted according to
law;

(3) Corporations, partnerships and

associations for private interest or
purpose to which the law grants a
juridical personality, separate and
distinct from that of each shareholder,
partner or member. (35a)
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Art. 45. Juridical persons mentioned in Nos.

1 and 2 of the preceding article are governed
by the laws creating or recognizing them.

Private corporations are regulated by laws of

general application on the subject.

Partnerships and associations for private

interest or purpose are governed by the
provisions of this Code concerning
partnerships. (36 and 37a)

Art. 46. Juridical persons may acquire and

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

Art. 47. Upon the dissolution of

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

Title II. - CITIZENSHIP AND DOMICILE

Art. 48. The following are citizens of the

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

(2) Those born in the Philippines of

foreign parents who, before the
adoption of said Constitution, had
been elected to public office in the
Philippines;

(3) Those whose fathers are citizens

of the Philippines;

(4) Those whose mothers are citizens

of the Philippines and, upon reaching
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the age of majority, elect Philippine

citizenship;

(5) Those who are naturalized in

accordance with law. (n)

Art. 49. Naturalization and the loss and

reacquisition of citizenship of the
Philippines are governed by special laws. (n)

Art. 50. For the exercise of civil rights and

the fulfillment of civil obligations, the
domicile of natural persons is the place of
their habitual residence. (40a)

Art. 51. When the law creating or

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

Title III. - MARRIAGE

CHAPTER 1
REQUISITES OF MARRIAGE

Art. 52. Marriage is not a mere contract but

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

Art. 53. No marriage shall be solemnized

unless all these requisites are complied with:

(1) Legal capacity of the contracting

parties;

(2) Their consent, freely given;

(3) Authority of the person

performing the marriage; and

(4) A marriage license, except in a

marriage of exceptional character
(Sec. 1a, Art. 3613).
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Art. 54. Any male of the age of sixteen years

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

Art. 55. No particular form for the ceremony

of marriage is required, but the parties with
legal capacity to contract marriage must
declare, in the presence of the person
solemnizing the marriage and of two
witnesses of legal age, that they take each
other as husband and wife. This declaration
shall be set forth in an instrument in
triplicate, signed by signature or mark by the
contracting parties and said two witnesses
and attested by the person solemnizing the
marriage.

In case of a marriage on the point of death,

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

Art. 56. Marriage may be solemnized by:

(1) The Chief Justice and Associate

Justices of the Supreme Court;

(2) The Presiding Justice and the

Justices of the Court of Appeals;

(3) Judges of the Courts of First

Instance;

(4) Mayors of cities and

municipalities;

(5) Municipal judges and justices of

the peace;

(6) Priests, rabbis, ministers of the

gospel of any denomination, church,
religion or sect, duly registered, as
provided in Article 92; and

(7) Ship captains, airplane chiefs,

military commanders, and consuls and
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vice-consuls in special cases provided

in Articles 74 and 75. (4a)

Art. 57. The marriage shall be solemnized

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

Art. 58. Save marriages of an exceptional

character authorized in Chapter 2 of this
Title, but not those under Article 75, no
marriage shall be solemnized without a
license first being issued by the local civil
registrar of the municipality where either
contracting party habitually resides. (7a)

Art. 59. The local civil registrar shall issue

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

(1) Full name of the contracting party;

(2) Place of birth;

(3) Age, date of birth;

(4) Civil status (single, widow or

widower, or divorced);
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(5) If divorced, how and when the

previous marriage was dissolved;

(6) Present residence;

(7) Degree of relationship of the

contracting parties;

(8) Full name of the father;

(9) Residence of the father;

(10) Full name of the mother;

(11) Residence of the mother;

(12) Full name and residence of the

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

Art. 60. The local civil registrar, upon

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

If either of the contracting parties is unable

to produce his baptismal or birth certificate
or a certified copy of either because of the
destruction or loss of the original, or if it is
shown by an affidavit of such party or of
any other person that such baptismal or birth
certificate has not yet been received though
the same has been requested of the person
having custody thereof at least fifteen days
prior to the date of the application, such
party may furnish in lieu thereof his
residence certificate for the current year or
any previous years, to show the age stated in
his application or, in the absence thereof, an
instrument drawn up and sworn to before the
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local civil registrar concerned or any public

official authorized to solemnize marriage.
Such instrument shall contain the sworn
declaration of two witnesses, of lawful age,
of either sex, setting forth the full name,
profession, and residence of such
contracting party and of his or her parents, if
known, and the place and date of birth of
such party. The nearest of kin of the
contracting parties shall be preferred as
witnesses, and in their default, persons well
known in the province or the locality for
their honesty and good repute.

The exhibition of baptismal or birth

certificates shall not be required if the
parents of the contracting parties appear
personally before the local civil registrar
concerned and swear to the correctness of
the lawful age of said parties, as stated in the
application, or when the local civil registrar
shall, by merely looking at the applicants
upon their personally appearing before him,
be convinced that either or both of them
have the required age. (8a)

Art. 61. In case either of the contracting

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

In case either or both of the contracting

parties, being neither widowed nor divorced,
are less than twenty years of age as regards
the male and less than eighteen years as
regards the female, they shall, in addition to
the requirements of the preceding articles,
exhibit to the local civil registrar, the
consent to their marriage, of their father,
mother or guardian, or persons having legal
charge of them, in the order mentioned.
Such consent shall be in writing, under oath
taken with the appearance of the interested
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parties before the proper local civil registrar

or in the form of an affidavit made in the
presence of two witnesses and attested
before any official authorized by law to
administer oaths. (9a)

Art. 62. Males above twenty but under

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

Art. 63. The local civil registrar shall post

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

Art. 64. Upon being advised of any alleged

impediment to the marriage, the local civil
registrar shall forthwith make an
investigation, examining persons under oath.
If he is convicted that there is an
impediment to the marriage, it shall be his
duty to withhold the marriage license, unless
he is otherwise ordered by a competent
court. (n)
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Art. 65. The local civil registrar shall

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

Art. 66. When either or both of the

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

Art. 67. The marriage certificate in which

the contracting parties shall state that they
take each other as husband and wife, shall
also contain:

(1) The full names and domiciles of

the contracting parties;

(2) The age of each;

(3) A statement that the proper

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

(4) A statement that the guardian or

parent has been informed of the
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marriage, if the male is between the

ages of twenty and twenty-five years,
and the female between eighteen and
twenty-three years of age. (15a)

Art. 68. It shall be the duty of the person

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

Art. 69. It shall be the duty of the local civil

registrar to prepare the documents required
by this Title, and to administer oaths to all
interested parties without any charge in both
cases.

The documents and affidavits filed in

connection with applications for marriage
licenses shall be exempt from the
documentary stamp tax. (17a)

Art. 70. The local civil registrar concerned

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

Art. 71. All marriages performed outside the

Philippines in accordance with the laws in
force in the country where they were
performed, and valid there as such, shall
also be valid in this country, except
bigamous, polygamous, or incestuous
 20

marriages as determined by Philippine law.

(19a)

CHAPTER 2
MARRIAGES OF EXCEPTIONAL
CHARACTER

Art. 72. In case either of the contracting

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

Art. 73. The original of the affidavit required

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

Art. 74. A marriage in articulo mortis may

also be solemnized by the captain of a ship
or chief of an airplane during a voyage, or
by the commanding officer of a military
unit, in the absence of a chaplain, during
 21

war. The duties mentioned in the two

preceding articles shall be complied with by
the ship captain, airplane chief or
commanding officer. (n)

Art. 75. Marriages between Filipino citizens

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

Art. 76. No marriage license shall be

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

Art. 77. In case two persons married in

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

Art. 78. Marriages between Mohammedans

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

However, twenty years after approval of this

Code, all marriages performed between
 22

Mohammedans or pagans shall be

solemnized in accordance with the
provisions of this Code. But the President
of the Philippines, upon recommendation of
the Secretary of the Interior, may at any time
before the expiration of said period, by
proclamation, make any of said provisions
applicable to the Mohammedan and non-
Christian inhabitants of any of the non-
Christian provinces. (25a)

Art. 79. Mixed marriages between a

Christian male and a Mohammedan or pagan
female shall be governed by the general
provision of this Title and not by those of
the last preceding article, but mixed
marriages between a Mohammedan or pagan
male and a Christian female may be
performed under the provisions of the last
preceding article if so desired by the
contracting parties, subject, however, in the
latter case to the provisions of the second
paragraph of said article. (26)

CHAPTER 3
VOID AND VOIDABLE MARRIAGES

Art. 80. The following marriages shall be

void from the beginning:
(1) Those contracted under the ages of
sixteen and fourteen years by the male
and female respectively, even with the
consent of the parents;

(2) Those solemnized by any person

not legally authorized to perform
marriages;

(3) Those solemnized without a

marriage license, save marriages of
exceptional character;

(4) Bigamous or polygamous

marriages not falling under Article 83,
Number 2;

(5) Incestuous marriages mentioned in

Article 81;
 23

(6) Those where one or both

contracting parties have been found
guilty of the killing of the spouse of
either of them;

(7) Those between stepbrothers and

stepsisters and other marriages
specified in Article 82. (n)

Art. 81. Marriages between the following

are incestuous and void from their
performance, whether the relationship
between the parties be legitimate or
illegitimate:

(1) Between ascendants and

descendants of any degree;

(2) Between brothers and sisters,

whether of the full or half blood;

(3) Between collateral relatives by

blood within the fourth civil degree.
(28a)

Art. 82. The following marriages shall also

be void from the beginning:
(1) Between stepfathers and
stepdaughters, and stepmothers and
stepsons;

(2) Between the adopting father or

mother and the adopted, between the
latter and the surviving spouse of the
former, and between the former and
the surviving spouse of the latter;

(3) Between the legitimate children of

the adopter and the adopted. (28a)

Art. 83. Any marriage subsequently

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

(2) The first spouse had been absent

for seven consecutive years at the
time of the second marriage without
 24

the spouse present having news of the

absentee being alive, or if the
absentee, though he has been absent
for less than seven years, is generally
considered as dead and believed to be
so by the spouse present at the time of
contracting such subsequent marriage,
or if the absentee is presumed dead
according to Articles 390 and 391.
The marriage so contracted shall be
valid in any of the three cases until
declared null and void by a competent
court. (29a)

Art. 84. No marriage license shall be issued

to a widow till after three hundred days
following the death of her husband, unless in
the meantime she has given birth to a child.
(n)

Art. 85. A marriage may be annulled for any

of the following causes, existing at the time
of the marriage:

(1) That the party in whose behalf it is

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

(2) In a subsequent marriage under

Article 83, Number 2, that the former
husband or wife believed to be dead
was in fact living and the marriage
with such former husband or wife was
then in force;

(3) That either party was of unsound

mind, unless such party, after coming
to reason, freely cohabited with the
other as husband or wife;
 25

(4) That the consent of either party

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

(5) That the consent of either party

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

(6) That either party was, at the time

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

Art. 86. Any of the following circumstances

shall constitute fraud referred to in Number
4 of the preceding article:
(1) Misrepresentation as to the
identity of one of the contracting
parties;

(2) Non-disclosure of the previous

conviction of the other party of a
crime involving moral turpitude, and
the penalty imposed was
imprisonment for two years or more;

(3) Concealment by the wife of the

fact that at the time of the marriage,
she was pregnant by a man other than
her husband.

No other misrepresentation or deceit as to

character, rank, fortune or chastity shall
constitute such fraud as will give grounds
for action for the annulment of marriage. (n)

Art. 87. The action for annulment of

marriage must be commenced by the parties
and within the periods as follows:

(1) For causes mentioned in Number

1 of Article 85, by the party whose
parent or guardian did not give his or
 26

her consent, within four years after

attaining the age of twenty or eighteen
years, as the case may be; or by the
parent or guardian or person having
legal charge, at any time before such
party has arrived at the age of twenty
or eighteen years;

(2) For causes mentioned in Number

2 of Article 85, by the spouse who has
been absent, during his or her
lifetime; or by either spouse of the
subsequent marriage during the
lifetime of the other;

(3) For causes mentioned in Number

3 of Article 85, by the sane spouse,
who had no knowledge of the other's
insanity; or by any relative or
guardian of the party of unsound
mind, at any time before the death of
either party;

(4) For causes mentioned in Number

4, by the injured party, within four
years after the discovery of the fraud;

(5) For causes mentioned in Number

5, by the injured party, within four
years from the time the force or
intimidation ceased;

(6) For causes mentioned in Number

6, by the injured party, within eight
years after the marriage. (31a)

Art. 88. No judgment annulling a marriage

shall be promulgated upon a stipulation of
facts or by confession of judgment.

Art. 89. Children conceived or born of

marriages which are void from the
beginning shall have the same status, rights
and obligations as acknowledged natural
children, and are called natural children by
legal fiction.

Children conceived of voidable marriages

before the decree of annulment shall be
considered as legitimate; and children
conceived thereafter shall have the same
status, rights and obligations as
 27

acknowledged natural children, and are also

called natural children by legal fiction. (n)

Art. 90. When a marriage is annulled, the

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

Art. 91. Damages may be awarded in the

following cases when the marriage is
judicially annulled or declared void from the
beginning:

(1) If there has been fraud, force or

intimidation in obtaining the consent
of one of the contracting parties;

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

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

(3) If the person solemnizing the

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

(4) If a bigamous or polygamous

marriage was celebrated, and the
impediment was concealed from the
plaintiff by the party disqualified;

(5) If in an incestuous marriage, or a

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

(6) If one party was insane and the

other was aware thereof at the time of
the marriage. (n)

CHAPTER 4
 28

AUTHORITY TO SOLEMNIZE
MARRIAGES

Art. 92. Every priest, or minister, or rabbi

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

Art. 93. Freedom of religion shall be

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

Art. 94. The public official in charge of

registration of priests and ministers shall
cancel the authorization issued to a bishop,
head, priest, rabbi, pastor or minister of the
gospel of any denomination, church, sect, or
religion, on his own initiative or at the
request of any interested party, upon
showing that the church, sect or religion
whose ministers have been authorized to
solemnize marriage is no longer in
operation. The cancellation of the
authorization granted to a priest, pastor or
minister shall likewise be ordered upon the
request of the bishop, head, or lawful
 29

authorities of the denomination, church, sect

or religion to which he belongs. (35a)

Art. 95. The public official in charge of

registration of priests and ministers, with the
approval of the proper head of Department,
is hereby authorized to prepare the necessary
forms and to promulgate regulations for the
purpose of enforcing the provisions of this
Title. Said official may also by regulations
fix and collect fees for the authorization of
priests and ministers to solemnize marriages.
(36a)

Art. 96. The existing laws which punish acts

or omissions concerning the marriage
license, solemnization of marriage, authority
to solemnize marriages, and other acts or
omissions relative to the celebration of
marriage shall remain and continue to be in
force. (n)

Title IV. - LEGAL SEPARATION

Art. 97. A petition for legal separation may

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

(2) An attempt by one spouse against

the life of the other. (n)

Art. 98. In every case the court must take

steps, before granting the legal separation,
toward the reconciliation of the spouses, and
must be fully satisfied that such
reconciliation is highly improbable. (n)

Art. 99. No person shall be entitled to a legal

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

Art. 100. The legal separation may be

claimed only by the innocent spouse,
 30

provided there has been no condonation of

or consent to the adultery or concubinage.
Where both spouses are offenders, a legal
separation cannot be claimed by either of
them. Collusion between the parties to
obtain legal separation shall cause the
dismissal of the petition. (3a, Act No. 2710)

Art. 101. No decree of legal separation shall

be promulgated upon a stipulation of facts or
by confession of judgment.

In case of non-appearance of the defendant,

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

Art. 102. An action for legal separation

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

Art. 103. An action for legal separation shall

in no case be tried before six months shall
have elapsed since the filing of the petition.
(5a, Act 2710)

Art. 104. After the filing of the petition for

legal separation, the spouses shall be entitled
to live separately from each other and
manage their respective property.

The husband shall continue to manage the

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

Art. 105. During the pendency of legal

separation proceedings the court shall make
provision for the care of the minor children
 31

in accordance with the circumstances and

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

Art. 106. The decree of legal separation

shall have the following effects:

(1) The spouses shall be entitled to

live separately from each other, but
marriage bonds shall not be severed;

(2) The conjugal partnership of gains

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

(3) The custody of the minor children

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

(4) The offending spouse shall be

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

Art. 107. The innocent spouse, after a decree

of legal separation has been granted, may
revoke the donations by reason of marriage
made by him or by her to the offending
spouse. Alienation and mortgages made
before the notation of the complaint for
 32

revocation in the Registry of Property shall

be valid.

This action lapses after four years following

the date the decree became final. (n)

Art. 108. Reconciliation stops the

proceedings for legal separation and
rescinds the decree of legal separation
already rendered.

The revival of the conjugal partnership of

gains or of the absolute conjugal community
of property shall be governed by Article 195.
(10a. Act 2710)

Title V. - RIGHTS AND OBLIGATIONS

BETWEEN HUSBAND AND WIFE

Art. 109. The husband and wife are obliged

to live together, observe mutual respect and
fidelity, and render mutual help and support.
(56a)

Art. 110. The husband shall fix the residence

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

Art. 111. The husband is responsible for the

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

Art. 112. The husband is the administrator of

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

Art. 113. The husband must be joined in all

suits by or against the wife, except:
 33

(1) When they are judicially

separated;

(2) If they have in fact been separated

for at least one year;

(3) When there is a separation of

property agreed upon in the marriage
settlements;

(4) If the administration of all the

property in the marriage has been
transferred to her, in accordance with
Articles 196 and 197;

(5) When the litigation is between the

husband and wife;

(6) If the suit concerns her

paraphernal property;

(7) When the action is upon the civil

liability arising from a criminal
offense;

(8) If the litigation is incidental to the

profession, occupation or business in
which she is engaged;

(9) In any civil action referred to in

Articles 25 to 35; and

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

In the cases mentioned in Nos. 7 to

10, the husband must be joined as a
party defendant if the third paragraph
of Article 163 is applicable. (n)

Art. 114. The wife cannot, without the

husband's consent acquire any property by
gratuitous title, except from her ascendants,
descendants, parents-in-law, and collateral
relatives within the fourth degree. (n)

Art. 115. The wife manages the affairs of the

household. She may purchase things
necessary for the support of the family, and
the conjugal partnership shall be bound
thereby. She may borrow money for this
purpose, if the husband fails to deliver the
proper sum. The purchase of jewelry and
 34

precious objects is voidable, unless the

transaction has been expressly or tacitly
approved by the husband, or unless the price
paid is from her paraphernal property. (62a)

Art. 116. When one of the spouses neglects

his or her duties to the conjugal union or
brings danger, dishonor or material injury
upon the other, the injured party may apply
to the court for relief.

The court may counsel the offender to

comply with his or her duties, and take such
measures as may be proper. (n)

Art. 117. The wife may exercise any

profession or occupation or engage in
business. However, the husband may object,
provided:

(1) His income is sufficient for the

family, according to its social
standing, and

(2) His opposition is founded on

serious and valid grounds.

In case of disagreement on this question, the

parents and grandparents as well as the
family council, if any, shall be consulted. If
no agreement is still arrived at, the court will
decide whatever may be proper and in the
best interest of the family. (n)

Title VI. - PROPERTY RELATIONS

BETWEEN HUSBAND AND WIFE

CHAPTER 1
GENERAL PROVISIONS

Art. 118. The property relations between

husband and wife shall be governed in the
following order:
(1) By contract executed before the
marriage;

(2) By the provisions of this Code;

and

(3) By custom. (1315a)

 35

Art. 119. The future spouses may in the

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

Art. 120. A minor who according to law may

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

Art. 121. In order that any modification in

the marriage settlements may be valid, it
must be made before the celebration of the
marriage, subject to the provisions of Article
191. (1319a)

Art. 122. The marriage settlements and any

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

Art. 123. For the validity of marriage

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

Art. 124. If the marriage is between a citizen

of the Philippines and a foreigner, whether
celebrated in the Philippines or abroad, the
following rules shall prevail:

(1) If the husband is a citizen of the

Philippines while the wife is a
 36

foreigner, the provisions of this Code

shall govern their relations;

(2) If the husband is a foreigner and

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

Art. 125. Everything stipulated in the

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

CHAPTER 2
DONATIONS BY REASON OF
MARRIAGE

Art. 126. Donations by reasons of marriage

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

Art. 127. These donations are governed by

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

Art. 128. Minors may make and receive

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

Art. 129. Express acceptance is not

necessary for the validity of these donations.
(1330)

Art. 130. The future spouses may give each

other in their marriage settlements as much
as one-fifth of their present property, and
 37

with respect to their future property, only in

the event of death, to the extent laid down
by the provisions of this Code referring to
testamentary succession. (1331a)

Art. 131. The donor by reason of marriage

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

Art. 132. A donation by reason of marriage

is not revocable, save in the following cases:

(1) If it is conditional and the

condition is not complied with;

(2) If the marriage is not celebrated;

(3) When the marriage takes place

without the consent of the parents or
guardian, as required by law;

(4) When the marriage is annulled,

and the donee acted in bad faith;

(5) Upon legal separation, the donee

being the guilty spouse;

(6) When the donee has committed an

act of ingratitude as specified by the
provisions of this Code on donations
in general. (1333a)

Art. 133. Every donation between the

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

Neither does this prohibition apply to

moderate gifts which the spouses may give
each other on the occasion of any family
rejoicing. (1334a)

Art. 134. Donations during the marriage by

one of the spouses to the children whom the
other spouse had by another marriage, or to
persons of whom the other spouse is a
presumptive heir at the time of the donation
 38

are voidable, at the instance of the donor's

heirs after his death. (1335a)

CHAPTER 3
PARAPHERNAL PROPERTY

Art. 135. All property brought by the wife to

the marriage, as well as all property she
acquires during the marriage, in accordance
with article 148, is paraphernal. (1381a)

Art. 136. The wife retains the ownership of

the paraphernal property. (1382)

Art. 137. The wife shall have the

administration of the paraphernal property,
unless she delivers the same to the husband
by means of a public instrument
empowering him to administer it.

In this case, the public instrument shall be

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

Art. 138. The fruits of the paraphernal

property form part of the assets of the
conjugal partnership, and shall be subject to
the payment of the expenses of the marriage.

The property itself shall also be subject to

the daily expenses of the family, if the
property of the conjugal partnership and the
husband's capital are not sufficient therefor.
(1385a)

Art. 139. The personal obligations of the

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

Art. 140. A married woman of age may

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

Art. 141. The alienation of any paraphernal

property administered by the husband gives
 39

a right to the wife to require the constitution

of a mortgage or any other security for the
amount of the price which the husband may
have received. (1390a)

CHAPTER 4
CONJUGAL PARTNERSHIP OF GAINS

SECTION 1. - General Provisions

Art. 142. By means of the conjugal

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

Art. 143. All property of the conjugal

partnership of gains is owned in common by
the husband and wife. (n)

Art. 144. When a man and a woman live

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

Art. 145. The conjugal partnership shall

commence precisely on the date of the
celebration of the marriage. Any stipulation
to the contrary shall be void. (1393)

Art. 146. Waiver of the gains or of the

effects of this partnership during marriage
cannot be made except in case of judicial
separation.

When the waiver takes place by reason of

separation, or after the marriage has been
dissolved or annulled, the same shall appear
in a public instrument, and the creditors
shall have the right which Article 1052
grants them. (1394a)
 40

Art. 147. The conjugal partnership shall be

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

SECTION 2. - Exclusive Property of Each

Spouse

Art. 148. The following shall be the

exclusive property of each spouse:
(1) That which is brought to the
marriage as his or her own;

(2) That which each acquires, during

the marriage, by lucrative title;

(3) That which is acquired by right of

redemption or by exchange with other
property belonging to only one of the
spouses;

(4) That which is purchased with

exclusive money of the wife or of the
husband. (1396)

Art. 149. Whoever gives or promises capital

to the husband shall not be subject to
warranty against eviction, except in case of
fraud. (1937)

Art. 150. Property donated or left by will to

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

Art. 151. If the donations are onerous, the

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

Art. 152. If some credit payable in a certain

number of years, or a life pension, should
pertain to one of the spouses, the provisions
of Articles 156 and 157 shall be observed to
 41

determine what constitutes the paraphernal

property and what forms the capital of the
husband. (1400a)

SECTION 3. - Conjugal Partnership

Property

Art. 153. The following are conjugal

partnership property:
(1) That which is acquired by onerous
title during the marriage at the
expense of the common fund, whether
the acquisition be for the partnership,
or for only one of the spouses;

(2) That which is obtained by the

industry, or work, or as salary of the
spouses, or of either of them;

(3) The fruits, rents or interests

received or due during the marriage,
coming from the common property or
from the exclusive property of each
spouse. (1401)

Art. 154. That share of the hidden treasure

which the law awards to the finder or the
proprietor belongs to the conjugal
partnership. (n)

Art. 155. Things acquired by occupation,

such as fishing and hunting, pertain to the
conjugal partnership of gains. (n)

Art. 156. Whenever an amount or credit

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

Art. 157. The right to an annuity, whether

perpetual or of life, and the right of usufruct,
belonging to one of the spouses shall form a
part of his or her separate property, but the
fruits, pensions and interests due during the
marriage shall belong to the partnership.
 42

The usufruct which the spouses have over

the property of their children, though of
another marriage, shall be included in this
provision. (1403a)

Art. 158. Improvements, whether for utility

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

Buildings constructed, at the expense of the

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

Art. 159. Whenever the paraphernal

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

Art. 160. All property of the marriage is

presumed to belong to the conjugal
partnership, unless it be proved that it
pertains exclusively to the husband or to the
wife. (1407)

SECTION 4. - Charges Upon and

Obligation
of the Conjugal Partnership

Art. 161. The conjugal partnership shall be

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

(2) Arrears or income due, during the

marriage, from obligations which
 43

constitute a charge upon property of

either spouse or of the partnership;

(3) Minor repairs or for mere

preservation made during the
marriage upon the separate property
of either the husband or the wife;
major repairs shall not be charged to
the partnership;

(4) Major or minor repairs upon the

conjugal partnership property;

(5) The maintenance of the family and

the education of the children of both
husband and wife, and of legitimate
children of one of the spouses;

(6) Expenses to permit the spouses to

complete a professional, vocational or
other course. (1408a)

Art. 162. The value of what is donated or

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

Art. 163. The payment of debts contracted

by the husband or the wife before the
marriage shall not be charged to the
conjugal partnership.

Neither shall the fines and pecuniary

indemnities imposed upon them be charged
to the partnership.

However, the payment of debts contracted

by the husband or the wife before the
marriage, and that of fines and indemnities
imposed upon them, may be enforced
against the partnership assets after the
responsibilities enumerated in Article 161
have been covered, if the spouse who is
bound should have no exclusive property or
if it should be insufficient; but at the time of
the liquidation of the partnership such
spouse shall be charged for what has been
 44

paid for the purpose above-mentioned.

(1410)

Art. 164. Whatever may be lost during the

marriage in any kind of gambling, betting or
game, whether permitted or prohibited by
law, shall be borne by the loser, and shall not
be charged to the conjugal partnership.
(1411a)

SECTION 5. - Administration of the

Conjugal Partnership

Art. 165. The husband is the administrator

of the conjugal partnership. (1412a)

Art. 166. Unless the wife has been declared

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

This article shall not apply to property

acquired by the conjugal partnership before
the effective date of this Code. (1413a)

Art. 167. In case of abuse of powers of

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

Art. 168. The wife may, by express authority

of the husband embodied in a public
instrument, administer the conjugal
partnership property. (n)

Art. 169. The wife may also by express

authority of the husband appearing in a
public instrument, administer the latter's
estate. (n)

Art. 170. The husband or the wife may

dispose by will of his or her half of the
conjugal partnership profits. (1414a)
 45

Art. 171. The husband may dispose of the

conjugal partnership property for the
purposes specified in Articles 161 and 162.
(1415a)

Art. 172. The wife cannot bind the conjugal

partnership without the husband's consent
except in cases provided by law. (1416a)

Art. 173. The wife may, during the marriage,

and within ten years from the transaction
questioned, ask the courts for the annulment
of any contract of the husband entered into
without her consent, when such consent is
required, or any act or contract of the
husband which tends to defraud her or
impair her interest in the conjugal
partnership property. Should the wife fail to
exercise this right, she or her heirs, after the
dissolution of the marriage, may demand the
value of property fraudulently alienated by
the husband. (n)

Art. 174. With the exception of moderate

donations for charity, neither husband nor
wife can donate any property of the conjugal
partnership without the consent of the other.
(n)

SECTION 6. - Dissolution of the Conjugal

Partnership

Art. 175. The conjugal partnership of gains

terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal

separation;

(3) When the marriage is annulled;

(4) In case of judicial separation of

property under Article 191. (1417a)

Art. 176. In case of legal separation, the

guilty spouse shall forfeit his or her share of
the conjugal partnership profits, which shall
be awarded to the children of both, and the
children of the guilty spouse had by a prior
marriage. However, if the conjugal
 46

partnership property came mostly or entirely

from the work or industry, or from the
wages and salaries, or from the fruits of the
separate property of the guilty spouse, this
forfeiture shall not apply.

In case there are no children, the innocent

spouse shall be entitled to all the net profits.
(n)

Art. 177. In case of annulment of the

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

Art. 178. The separation in fact between

husband and wife without judicial approval,
shall not affect the conjugal partnership,
except that:

(1) The spouse who leaves the

conjugal home or refuses to live
therein, without just cause, shall not
have a right to be supported;

(2) When the consent of one spouse to

any transaction of the other is
required by law, judicial authorization
shall be necessary;

(3) If the husband has abandoned the

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

SECTION 7. - Liquidation of the Conjugal

Partnership

Art. 179. Upon the dissolution of the

conjugal partnership, an inventory shall be
formed, but such inventory shall not be
necessary:
(1) If, after the dissolution of the
partnership, one of the spouses should
have renounced its effects and
consequences in due time; or
 47

(2) When separation of property has

preceded the dissolution of the
partnership. (1418a)

Art. 180. The bed and bedding which the

spouses ordinarily use shall not be included
in the inventory. These effects, as well as the
clothing for their ordinary use, shall be
delivered to the surviving spouse. (1420)

Art. 181. The inventory having been

completed, the paraphernal property shall
first be paid. Then, the debts and charges
against the conjugal partnership shall be
paid. (1422a)

Art. 182. The debts, charges and obligations

of the conjugal partnership having been
paid; the capital of the husband shall be
liquidated and paid to the amount of the
property inventoried. (1423a)

Art. 183. The deductions from the

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

Art. 184. The loss or deterioration of the

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

Those suffered by real property shall not be

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

Art. 185. The net remainder of the conjugal

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

Art. 186. The mourning apparel of the

widow shall be paid for out of the estate of
the deceased husband. (1427a)
 48

Art. 187. With regard to the formation of the

inventory, rules for appraisal and sale of
property of the conjugal partnership, and
other matters which are not expressly
determined in the present Chapter, the Rules
of Court on the administration of estates of
deceased persons shall be observed. (1428a)

Art. 188. From the common mass of

property support shall be given to the
surviving spouse and to the children during
the liquidation of the inventoried property
and until what belongs to them is delivered;
but from this shall be deducted that amount
received for support which exceeds the fruits
or rents pertaining to them. (1430)

Art. 189. Whenever the liquidation of the

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

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

Art. 190. In the absence of an express

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

Art. 191. The husband or the wife may ask

for the separation of property, and it shall be
decreed when the spouse of the petitioner
has been sentenced to a penalty which
carries with it civil interdiction, or has been
declared absent, or when legal separation
has been granted.
 49

In case of abuse of powers of administration

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

In all these cases, it is sufficient to present

the final judgment which has been entered
against the guilty or absent spouse. (1433a)

The husband and the wife may agree upon

the dissolution of the conjugal partnership
during the marriage, subject to judicial
approval. All the creditors of the husband
and of the wife, as well as of the conjugal
partnership shall be notified of any petition
for judicial approval or the voluntary
dissolution of the conjugal partnership, so
that any such creditors may appear at the
hearing to safeguard his interests. Upon
approval of the petition for dissolution of the
conjugal partnership, the court shall take
such measures as may protect the creditors
and other third persons.

After dissolution of the conjugal partnership,

the provisions of Articles 214 and 215 shall
apply. The provisions of this Code
concerning the effect of partition stated in
Articles 498 to 501 shall be applicable.
(1433a)

Art. 192. Once the separation of property

has been ordered, the conjugal partnership
shall be dissolved, and its liquidation shall
be made in conformity with what has been
established by this Code.

However, without prejudice to the

provisions of Article 292, the husband and
the wife shall be reciprocally liable for their
support during the separation, and for the
support and education of their children; all
in proportion to their respective property.

The share of the spouse who is under civil

interdiction or absent shall be administered
in accordance with the Rules of Court.
(1434a)
 50

Art. 193. The complaint for separation and

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

Art. 194. The separation of property shall

not prejudice the rights previously acquired
by creditors. (1438)

Art. 195. The separation of property ceases:

(1) Upon reconciliation of the

spouses, in case of legal separation;

(2) When the civil interdiction

terminates;

(3) When the absent spouse appears;

(4) When the court, at the instance of

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

(5) When the husband, who has

abandoned the wife, rejoins her.

In the above cases, the property relations

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

The spouses shall state, in a public

document, all the property which they return
to the marriage and which shall constitute
the separate property of each.

This public document shall be recorded in

the Registry of Property.

In the cases referred to in this article, all the

property brought in shall be deemed to be
newly contributed, even though all or some
may be the same which existed before the
liquidation effected by reason of the
separation. (1439a)
 51

Art. 196. With the conjugal partnership

subsisting, the administration of all classes
of property in the marriage may be
transferred by the courts to the wife:

(1) When she becomes the guardian of

her husband;

(2) When she asks for the declaration

of his absence;

(3) In case of civil interdiction of the

husband.

The courts may also confer the

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

Art. 197. The wife to whom the

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

CHAPTER 6
SYSTEM OF ABSOLUTE COMMUNITY
(n)

Art. 198. In case the future spouses agree in

the marriage settlements that the system of
absolute community shall govern their
property relations during marriage, the
following provisions shall be of
supplementary application.

Art. 199. In the absence of stipulation to the

contrary, the community shall consist of all
present and future property of the spouses
not excepted by law.

Art. 200. Neither spouse may renounce any

inheritance without the consent of the other.
In case of conflict, the court shall decide the
 52

question, after consulting the family council,

if there is any.

Art. 201. The following shall be excluded

from the community:

(1) Property acquired by gratuitous

title by either spouse, when it is
provided by the donor or testator that
it shall not become a part of the
community;

(2) Property inherited by either

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

(3) A portion of the property of either

spouse equivalent to the presumptive
legitime of the children by a former
marriage;

(4) Personal belongings of either

spouse.

However, all the fruits and income of the

foregoing classes of property shall be
included in the community.

Art. 202. Ante-nuptial debts of either spouse

shall not be paid from the community, unless
the same have redounded to the benefit of
the family.

Art. 203. Debts contracted by both spouses

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

Art. 204. Debts contracted by either spouse

without the consent of the other shall be
chargeable against the community to the
extent that the family may have been
benefited thereby.

Art. 205. Indemnities that must be paid by

either spouse on account of a crime or of a
quasi-delict shall be paid from the common
 53

assets, without any obligation to make

reimbursement.

Art. 206. The ownership, administration,

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

Art. 207. Neither spouse may alienate or

encumber any common property without the
consent of the other. In case of unjustifiable
refusal by the other spouse, the courts may
grant the necessary consent.

Art. 208. The absolute community of

property shall be dissolved on any of the
grounds specified in Article 175.

Art. 209. When there is a separation in fact

between husband and wife, without judicial
approval, the provisions of Article 178 shall
apply.

Art. 210. Upon the dissolution and

liquidation of the community, the net assets
shall be divided equally between the
husband and the wife or their heirs. In case
of legal separation or annulment of
marriage, the provisions of Articles 176 and
177 shall apply to the net profits acquired
during the marriage.

Art. 211. Liquidation of the absolute

community shall be governed by the Rules
of Court on the administration of the estate
of deceased persons.

CHAPTER 7
SYSTEM OF COMPLETE SEPARATION
OF PROPERTY (n)

Art. 212. Should the future spouses agree in

the marriage settlements that their property
relations during marriage shall be based
upon the system of complete separation of
property, the following provisions shall
supplement the marriage settlements.

Art. 213. Separation of property may refer to

present or future property or both. It may be
 54

total or partial. In the latter case, the

property not agreed upon as separate shall
pertain to the conjugal partnership of gains.

Art. 214. Each spouse shall own, dispose of,

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

Art. 215. Each spouse shall proportionately

bear the family expenses.

Title VII. - THE FAMILY (n)

CHAPTER 1
THE FAMILY AS AN INSTITUTION

Art. 216. The family is a basic social

institution which public policy cherishes and
protects.

Art. 217. Family relations shall include

those:

(1) Between husband and wife;

(2) Between parent and child;

(3) Among other ascendants and their

descendants;

(4) Among brothers and sisters.

Art. 218. The law governs family relations.

No custom, practice or agreement which is
destructive of the family shall be recognized
or given any effect.

Art. 219. Mutual aid, both moral and

material, shall be rendered among members
of the same family. Judicial and
administrative officials shall foster this
mutual assistance.

Art. 220. In case of doubt, all presumptions

favor the solidarity of the family. Thus,
every intendment of law or facts leans
toward the validity of marriage, the
indissolubility of the marriage bonds, the
 55

legitimacy of children, the community of

property during marriage, the authority of
parents over their children, and the validity
of defense for any member of the family in
case of unlawful aggression.

Art. 221. The following shall be void and of

no effect:

(1) Any contract for personal

separation between husband and wife;

(2) Every extra-judicial agreement,

during marriage, for the dissolution of
the conjugal partnership of gains or of
the absolute community of property
between husband and wife;

(3) Every collusion to obtain a decree

of legal separation, or of annulment of
marriage;

(4) Any simulated alienation of

property with intent to deprive the
compulsory heirs of their legitime.

Art. 222. No suit shall be filed or maintained

between members of the same family unless
it should appear that earnest efforts toward a
compromise have been made, but that the
same have failed, subject to the limitations
in Article 2035.

CHAPTER 2
THE FAMILY HOME (n)

SECTION 1. - General Provisions

Art. 223. The family home is the dwelling

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

Art. 224. The family home may be

established judicially or extrajudicially.

SECTION 2. - Judicial Constitution of the

Family Home
 56

Art. 225. The family home may be

constituted by a verified petition to the
Court of First Instance by the owner of the
property, and by approval thereof by the
court.

Art. 226. The following shall be

beneficiaries of the family home:

(1) The person establishing the same;

(2) His or her spouse;

(3) His or her parents, ascendants,

descendants, brothers and sisters,
whether the relationship be legitimate
or otherwise, who are living in the
family home and who depend upon
him for support.

Art. 227. The family home may also be set

up by an unmarried person who is the head
of a family or household.

Art. 228. If the petitioner is married, the

family home may be selected from the
conjugal partnership or community property,
or from the separate property of the
husband, or, with the consent of the wife,
from her paraphernal property.

Art. 229. The petition shall contain the

following particulars:

(1) Description of the property;

(2) An estimate of its actual value;

(3) A statement that the petitioner is

actually residing in the premises;

(4) The encumbrances thereon;

(5) The names and addresses of all the

creditors of the petitioner and of all
mortgagees and other persons who
have an interest in the property;

(6) The names of the other

beneficiaries specified in Article 226.
 57

Art. 230. Creditors, mortgagees and all other

persons who have an interest in the estate
shall be notified of the petition, and given an
opportunity to present their objections
thereto. The petition shall, moreover, be
published once a week for three consecutive
weeks in a newspaper of general circulation.

Art. 231. If the court finds that the actual

value of the proposed family home does not
exceed twenty thousand pesos, or thirty
thousand pesos in chartered cities, and that
no third person is prejudiced, the petition
shall be approved. Should any creditor
whose claim is unsecured, oppose the
establishment of the family home, the court
shall grant the petition if the debtor gives
sufficient security for the debt.

Art. 232. The family home, after its creation

by virtue of judicial approval, shall be
exempt from execution, forced sale, or
attachment, except:

(1) For nonpayment of taxes; or

(2) In satisfaction of a judgment on a

debt secured by a mortgage
constituted on the immovable before
or after the establishment of the
family home.

In case of insolvency of the person

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

Art. 233. The order of the court approving

the establishment of the family home shall
be recorded in the Registry of Property.

Art. 234. When there is danger that a person

obliged to give support may lose his or her
fortune because of grave mismanagement or
on account of riotous living, his or her
spouse, if any, and a majority of those
entitled to be supported by him or by her
may petition the Court of First Instance for
the creation of the family home.
 58

Art. 235. The family home may be sold,

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

Art. 236. The family home may be dissolved

upon the petition of the person who has
constituted the same, with the written
consent of his or her spouse and of at least
one half of all the other beneficiaries who
are eighteen years of age or over. The court
may grant the petition if it is satisfactorily
shown that the best interest of the family
requires the dissolution of the family home.

Art. 237. In case of legal separation or

annulment of marriage, the family home
shall be dissolved, and the property shall
cease to be exempt from execution, forced
sale or attachment.

Art. 238. Upon the death of the person who

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

Art. 239. The family home shall not be

subject to payment of the debts of the
deceased, unless in his will the contrary is
stated. However, the claims mentioned in
Article 232 shall not be adversely affected
by the death of the person who has
established the family home.
 59

SECTION 3. - Extra-judicial Creation of the

Family Home

Art. 240. The family home may be

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

Art. 241. The declaration setting up the

family home shall be under oath and shall
contain:

(1) A statement that the claimant is the

owner of, and is actually residing in
the premises;

(2) A description of the property;

(3) An estimate of its actual value;

and

(4) The names of the claimant's

spouse and the other beneficiaries
mentioned in Article 226.

Art. 242. The recording in the Registry of

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

Art. 243. The family home extrajudicially

formed shall be exempt from execution,
forced sale or attachment, except:

(1) For nonpayment of taxes;

(2) For debts incurred before the

declaration was recorded in the
Registry of Property;

(3) For debts secured by mortgages on

the premises before or after such
record of the declaration;

(4) For debts due to laborers,

mechanics, architects, builders,
material-men and others who have
rendered service or furnished material
for the prosecution of the building.
 60

Art. 244. The provisions of Articles 226 to

228 and 235 to 238 are likewise applicable
to family homes extrajudicially established.

Art. 245. Upon the death of the person who

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

Art. 246. No declaration for the extrajudicial

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

Art. 247. When a creditor whose claim is not

mentioned in Article 243 obtains a judgment
in his favor, and he has reasonable grounds
to believe that the family home of the
judgment debtor is worth more than the
amount mentioned in Article 231, he may
apply to the Court of First Instance for an
order directing the sale of the property under
execution.

Art. 248. The hearing on the petition,

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

Art. 249. At the sale under execution

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

(1) To the amount mentioned in

Article 231;

(2) To the judgment and the costs.

 61

The excess, if any, belongs to the person

constituting the family home.

Art. 250. The amount mentioned in Article

231 thus received by the person who has
established the family home, or as much
thereof as the court may determine, shall be
invested in constitution of a new family
home. The court shall take measures to
enforce this provision.

Art. 251. In case of insolvency of the person

creating the family home, the claims
specified in Article 243 may be satisfied
notwithstanding the insolvency proceedings.

If the assignee has reasonable grounds to

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

CHAPTER 3
THE FAMILY COUNCIL (n)

Art. 252. The Court of First Instance may,

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

Art. 253. The family council shall be

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

Art. 254. The family council shall elect its

chairman, and shall meet at the call of the
latter or upon order of the court.

Title VIII. - PATERNITY AND FILIATION

CHAPTER 1
LEGITIMATE CHILDREN

Art. 255. Children born after one hundred

 62

and eighty days following the celebration of

the marriage, and before three hundred days
following its dissolution or the separation of
the spouses shall be presumed to be
legitimate.

Against this presumption no evidence shall

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

This physical impossibility may be caused:

(1) By the impotence of the husband;

(2) By the fact that the husband and

wife were living separately, in such a
way that access was not possible;

(3) By the serious illness of the

husband. (108a)

Art. 256. The child shall be presumed

legitimate, although the mother may have
declared against its legitimacy or may have
been sentenced as an adulteress. (109)

Art. 257. Should the wife commit adultery at

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

Art. 258. A child born within one hundred

eighty days following the celebration of the
marriage is prima facie presumed to be
legitimate. Such a child is conclusively
presumed to be legitimate in any of these
cases:

(1) If the husband, before the

marriage, knew of the pregnancy of
the wife;
 63

(2) If he consented, being present, to

the putting of his surname on the
record of birth of the child;

(3) If he expressly or tacitly

recognized the child as his own.
(110a)

Art. 259. If the marriage is dissolved by the

death of the husband, and the mother
contracted another marriage within three
hundred days following such death, these
rules shall govern:

(1) A child born before one hundred

eighty days after the solemnization of
the subsequent marriage is disputably
presumed to have been conceived
during the former marriage, provided
it be born within three hundred days
after the death of the former husband:

(2) A child born after one hundred

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

Art. 260. If after a judgment annulling a

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

The same obligation shall devolve upon a

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

Art. 261. There is no presumption of

legitimacy or illegitimacy of a child born
after three hundred days following the
 64

dissolution of the marriage or the separation

of the spouses. Whoever alleges the
legitimacy or the illegitimacy of such child
must prove his allegation. (n)

Art. 262. The heirs of the husband may

impugn the legitimacy of the child only in
the following cases:

(1) If the husband should die before

the expiration of the period fixed for
bringing his action;

(2) If he should die after the filing of

the complaint, without having
desisted from the same;

(3) If the child was born after the

death of the husband. (112)

Art. 263. The action to impugn the

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

If he or his heirs are absent, the period shall

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

Art. 264. Legitimate children shall have the

right:

(1) To bear the surnames of the father

and of the mother;

(2) To receive support from them,

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

(3) To the legitime and other

successional rights which this Code
recognizes in their favor. (114)

CHAPTER 2
 65

PROOF OF FILIATION OF LEGITIMATE

CHILDREN

Art. 265. The filiation of legitimate children

is proved by the record of birth appearing in
the Civil Register, or by an authentic
document or a final judgment. (115)

Art. 266. In the absence of the titles

indicated in the preceding article, the
filiation shall be proved by the continuous
possession of status of a legitimate child.
(116)

Art. 267. In the absence of a record of birth,

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

Art. 268. The action to claim his legitimacy

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

The action already commenced by the child

is transmitted upon his death to the heirs, if
the proceeding has not yet lapsed. (118)

CHAPTER 3
LEGITIMATED CHILDREN

Art. 269. Only natural children can be

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

Art. 270. Legitimation shall take place by

the subsequent marriage between the
parents. (120a)

Art. 271. Only natural children who have

been recognized by the parents before or
after the celebration of the marriage, or have
been declared natural children by final
 66

judgment, may be considered legitimated by

subsequent marriage.

If a natural child is recognized or judicially

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

Art. 272. Children who are legitimated by

subsequent marriage shall enjoy the same
rights as legitimate children. (122)

Art. 273. Legitimation shall take effect from

the time of the child's birth. (123a)

Art. 274. The legitimation of children who

died before the celebration of the marriage
shall benefit their descendants. (124)

Art. 275. Legitimation may be impugned by

those who are prejudiced in their rights,
when it takes place in favor of those who do
not have the legal condition of natural
children or when the requisites laid down in
this Chapter are not complied with. (128a)

CHAPTER 4
ILLEGITIMATE CHILDREN

SECTION 1. - Recognition of Natural

Children

Art. 276. A natural child may be recognized

by the father and mother jointly, or by only
one of them. (129)

Art. 277. In case the recognition is made by

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

Art. 278. Recognition shall be made in the

record of birth, a will, a statement before a
 67

court of record, or in any authentic writing.

(131a)

Art. 279. A minor who may not contract

marriage without parental consent cannot
acknowledge a natural child, unless the
parent or guardian approves the
acknowledgment or unless the recognition is
made in a will. (n)

Art. 280. When the father or the mother

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

Art. 281. A child who is of age cannot be

recognized without his consent.

When the recognition of a minor does not

take place in a record of birth or in a will,
judicial approval shall be necessary.

A minor can in any case impugn the

recognition within four years following the
attainment of his majority. (133a)

Art. 282. A recognized natural child has the

right:

(1) To bear the surname of the parent

recognizing him:

(2) To receive support from such

parent, in conformity with article 291;

(3) To receive, in a proper case, the

hereditary portion which is
determined in this Code. (134)

Art. 283. In any of the following cases, the

father is obliged to recognize the child as his
natural child:
(1) In cases of rape, abduction or
seduction, when the period of the
offense coincides more or less with
that of the conception;

(2) When the child is in continuous

possession of status of a child of the
 68

alleged father by the direct acts of the

latter or of his family;

(3) When the child was conceived

during the time when the mother
cohabited with the supposed father;

(4) When the child has in his favor

any evidence or proof that the
defendant is his father. (n)

Art. 284. The mother is obliged to recognize

her natural child:

(1) In any of the cases referred to in

the preceding article, as between the
child and the mother;

(2) When the birth and the identity of

the child are clearly proved. (136a)

Art. 285. The action for the recognition of

natural children may be brought only during
the lifetime of the presumed parents, except
in the following cases:

(1) If the father or mother died during

the minority of the child, in which
case the latter may file the action
before the expiration of four years
from the attainment of his majority;

(2) If after the death of the father or of

the mother a document should appear
of which nothing had been heard and
in which either or both parents
recognize the child.

In this case, the action must be commenced

within four years from the finding of the
document. (137a)

Art. 286. The recognition made in favor of a

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

SECTION 2. - Other Illegitimate Children

 69

Art. 287. Illegitimate children other than

natural in accordance with Article 269 and
other than natural children by legal fiction
are entitled to support and such successional
rights as are granted in this Code. (n)

Art. 288. Minor children mentioned in the

preceding article are under the parental
authority of the mother. (n)

Art. 289. Investigation of the paternity or

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

Title IX. - SUPPORT

Art. 290. Support is everything that is

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

Support also includes the education of the

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

Art. 291. The following are obliged to

support each other to the whole extent set
forth in the preceding article:

(1) The spouses;

(2) Legitimate ascendants and

descendants;

(3) Parents and acknowledged natural

children and the legitimate or
illegitimate descendants of the latter;

(4) Parents and natural children by

legal fiction and the legitimate and
illegitimate descendants of the latter;

(5) Parents and illegitimate children

who are not natural.
 70

Brothers and sisters owe their legitimate and

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

Art. 292. During the proceedings for legal

separation, or for annulment of marriage, the
spouses and children, shall be supported
from the conjugal partnership property. After
the final judgment of legal separation, or of
annulment of marriage, the obligation of
mutual support between the spouses ceases.
However, in case of legal separation, the
court may order that the guilty spouse shall
give support to the innocent one, the
judgment specifying the terms of such order.
(n)

Art. 293. In an action for legal separation or

annulment of marriage, attorney's fees and
expenses for litigation shall be charged to
the conjugal partnership property, unless the
action fails. (n)

Art. 294. The claim for support, when

proper and two or more persons are obliged
to give it, shall be made in the following
order:

(1) From the spouse;

(2) From the descendants of the

nearest degree;

(3) From the ascendants, also of the

nearest degree;

(4) From the brothers and sisters.

Among descendants and ascendants the

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

Art. 295. When the obligation to give

support falls upon two or more persons, the
 71

payment of the same shall be divided

between them in proportion to the resources
of each.

However, in case of urgent need and by

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

When two or more recipients at the same

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

Art. 296. The amount of support, in the

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

Art. 297. Support in the cases referred to in

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

Art. 298. The obligation to give support

shall be demandable from the time the
person who has a right to receive the same
needs it for maintenance, but it shall not be
paid except from the date it is extrajudicially
demanded.

Payment shall be made monthly in advance,

and when the recipient dies, his heirs shall
not be obliged to return what he has received
in advance. (148a)

Art. 299. The person obliged to give support

may, at his option, fulfill his obligation
either by paying the allowance fixed, or by
receiving and maintaining in his house the
 72

person who has a right to receive support.

The latter alternative cannot be availed of in
case there is a moral or legal obstacle
thereto. (149a)

Art. 300. The obligation to furnish support

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

Art. 301. The right to receive support cannot

be renounced; nor can it be transmitted to a
third person. Neither can it be compensated
with what the recipient owes the obligor.

However, support in arrears may be

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

Art. 302. Neither the right to receive legal

support nor any money or property obtained
as such support or any pension or gratuity
from the government is subject to
attachment or execution. (n)

Art. 303. The obligation to give support

shall also cease:

(1) Upon the death of the recipient;

(2) When the resources of the obligor

have been reduced to the point where
he cannot give the support without
neglecting his own needs and those of
his family;

(3) When the recipient may engage in

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

(4) When the recipient, be he a forced

heir or not, has committed some act
which gives rise to disinheritance;

(5) When the recipient is a

descendant, brother or sister of the
obligor and the need for support is
caused by his or her bad conduct or
 73

by the lack of application to work, so

long as this cause subsists. (152a)

Art. 304. The foregoing provisions shall be

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

Title X. - FUNERALS (n)

Art. 305. The duty and the right to make

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

Art. 306. Every funeral shall be in keeping

with the social position of the deceased.

Art. 307. The funeral shall be in accordance

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

Art. 308. No human remains shall be

retained, interred, disposed of or exhumed
without the consent of the persons
mentioned in articles 294 and 305.

Art. 309. Any person who shows disrespect

to the dead, or wrongfully interferes with a
funeral shall be liable to the family of the
deceased for damages, material and moral.

Art. 310. The construction of a tombstone or

mausoleum shall be deemed a part of the
funeral expenses, and shall be chargeable to
the conjugal partnership property, if the
deceased is one of the spouses.
 74

Title XI. - PARENTAL AUTHORITY

CHAPTER 1
GENERAL PROVISIONS

Art. 311. The father and mother jointly

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

Children are obliged to obey their parents so

long as they are under parental power, and to
observe respect and reverence toward them
always.

Recognized natural and adopted children

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

Natural children by legal fiction are under

the joint authority of the father and mother,
as provided in the first paragraph of this
article. (154a)

Art. 312. Grandparents shall be consulted by

all members of the family on all important
family questions. (n)

Art. 313. Parental authority cannot be

renounced or transferred, except in cases of
guardianship or adoption approved by the
courts, or emancipation by concession.

The courts may, in cases specified by law,

deprive parents of their authority. (n)

Art. 314. A foundling shall be under the

parental authority of the person or institution
that has reared the same. (n)

Art. 315. No descendant can be compelled,

in a criminal case, to testify against his
parents and ascendants. (n)

CHAPTER 2
EFFECT OF PARENTAL AUTHORITY
 75

UPON THE PERSONS OF THE

CHILDREN

Art. 316. The father and the mother have,

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

(2) The power to correct them and to

punish them moderately. (155)

Art. 317. The courts may appoint a guardian

of the child' s property, or a guardian ad
litem when the best interest of the child so
requires. (n)

Art. 318. Upon cause being shown by the

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

Art. 319. The father and the mother shall

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

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

Art. 320. The father, or in his absence the

mother, is the legal administrator of the
property pertaining to the child under
parental authority. If the property is worth
more than two thousand pesos, the father or
mother shall give a bond subject to the
 76

approval of the Court of First Instance.

(159a)

Art. 321. The property which the

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

Art. 322. A child who earns money or

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

Art. 323. The fruits and interest of the child's

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

Art. 324. Whatever the child may acquire

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

Art. 325. The property or income donated,

bequeathed or devised to the unemancipated
child for the expenses of his education and
instruction shall pertain to him in ownership
and usufruct; but the father or mother shall
administer the same, if in the donation or
testamentary provision the contrary has not
been stated. (162)
 77

Art. 326. When the property of the child is

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

CHAPTER 4
EXTINGUISHMENT OF PARENTAL
AUTHORITY

Art. 327. Parental authority terminates:

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

(2) Upon emancipation;

(3) Upon adoption of the child;

(4) Upon the appointment of a general

guardian. (167a)

Art. 328. The mother who contracts a

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

The court may also appoint a guardian of the

child's property in case the father should
contract a subsequent marriage. (168a)

Art. 329. When the mother of an illegitimate

child marries a man other than its father, the
court may appoint a guardian for the child.
(n)

Art. 330. The father and in a proper case the

mother, shall lose authority over their
children:

(1) When by final judgment in a

criminal case the penalty of
deprivation of said authority is
imposed upon him or her;
 78

(2) When by a final judgment in legal

separation proceedings such loss of
authority is declared. (169a)

Art. 331. Parental authority is suspended by

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

Art. 332. The courts may deprive the parents

of their authority or suspend the exercise of
the same if they should treat their children
with excessive harshness or should give
them corrupting orders, counsels, or
examples, or should make them beg or
abandon them. In these cases, the courts
may also deprive the parents in whole or in
part, of the usufruct over the child's
property, or adopt such measures as they
may deem advisable in the interest of the
child. (171a)

Art. 333. If the widowed mother who has

contracted a subsequent marriage should
again become a widow, she shall recover
from this moment her parental authority
over all her unemancipated children. (172)

CHAPTER 5
ADOPTION

Art. 334. Every person of age, who is in full

possession of his civil rights, may adopt.
(173a)

Art. 335. The following cannot adopt:

(1) Those who have legitimate,

legitimated, acknowledged natural
children, or natural children by legal
fiction;

(2) The guardian, with respect to the

ward, before the final approval of his
accounts;

(3) A married person, without the

consent of the other spouse;

(4) Non-resident aliens;

 79

(5) Resident aliens with whose

government the Republic of the
Philippines has broken diplomatic
relations;

(6) Any person who has been

convicted of a crime involving moral
turpitude, when the penalty imposed
was six months' imprisonment or
more. (174a)

Art. 336. The husband and wife may jointly

adopt. Parental authority shall, in such case,
be exercised as if the child were their own
by nature. (n)

Art. 337. Any person, even if of age, may be

adopted, provided the adopter is sixteen
years older. (173a)

Art. 338. The following may be adopted:

(1) The natural child, by the natural

father or mother;

(2) Other illegitimate children, by the

father or mother;

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

step-mother. (n)

Art. 339. The following cannot be adopted:

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

(2) An alien with whose government

the Republic of the Philippines has
broken diplomatic relations;

(3) A person who has already been

adopted. (n)

Art. 340. The written consent of the

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

(2) The parents, guardian or person in

charge of the person to be adopted. (n)

Art. 341. The adoption shall:

 80

(1) Give to the adopted person the

same rights and duties as if he were a
legitimate child of the adopter:

(2) Dissolve the authority vested in

the parents by nature;

(3) Make the adopted person a legal

heir of the adopter;

(4) Entitle the adopted person to use

the adopter's surname. (n)

Art. 342. The adopter shall not be a legal

heir of the adopted person, whose parents by
nature shall inherit from him. (177a)

Art. 343. If the adopter is survived by

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

Art. 344. The adopter may donate property,

by an act inter vivos or by will, to the
adopted person, who shall acquire
ownership thereof. (n)

Art. 345. The proceedings for adoption shall

be governed by the Rules of Court insofar as
they are not in conflict with this Code. (n)

Art. 346. The adoption shall be recorded in

the local civil register. (179a)

Art. 347. A minor or other incapacitated

person may, through a guardian ad litem, ask
for the rescission of the adoption on the
same grounds that cause the loss of parental
authority. (n)

Art. 348. The adopter may petition the court

for revocation of the adoption in any of
these cases:

(1) If the adopted person has

attempted against the life of the
adopter;

(2) When the adopted minor has

abandoned the home of the adopter
for more than three years;
 81

(3) When by other acts the adopted

person has definitely repudiated the
adoption. (n)

CHAPTER 6
SUBSTITUTE PARENTAL AUTHORITY
(n)

Art. 349. The following persons shall

exercise substitute parental authority:
(1) Guardians;

(2) Teachers and professors;

(3) Heads of children's homes,

orphanages, and similar institutions;

(4) Directors of trade establishments,

with regard to apprentices;

(5) Grandparents;

(6) The oldest brother or sister.

Art. 350. The persons named in the

preceding article shall exercise reasonable
supervision over the conduct of the child.

Art. 351. A general guardian or a guardian

over the person shall have the same
authority over the ward's person as the
parents. With regard to the child's property,
the Rules of Court on guardianship shall
govern.

Art. 352. The relations between teacher and

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

Art. 353. Apprentices shall be treated

humanely. No corporal punishment against
the apprentice shall be permitted.

Art. 354. Grandparents and in their default

the oldest brother or sister shall exercise
parental authority in case of death or
absence of the child's parents. If the parents
 82

are living, or if the child is under

guardianship, the grandparents may give
advice and counsel to the child, to the
parents or to the guardian.

Art. 355. Substitute parental authority shall

be exercised by the grandparents in the
following order:

(1) Paternal grandparents;

(2) Maternal grandparents.

Title XII. - CARE AND EDUCATION OF

CHILDREN

Art. 356. Every child:

(1) Is entitled to parental care;

(2) Shall receive at least elementary

education;

(3) Shall be given moral and civic

training by the parents or guardian;

(4) Has a right to live in an

atmosphere conducive to his physical,
moral and intellectual development.

Art. 357. Every child shall:

(1) Obey and honor his parents or

guardian;

(2) Respect his grandparents, old

relatives, and persons holding
substitute parental authority;

(3) Exert his utmost for his education

and training;

(4) Cooperate with the family in all

matters that make for the good of the
same.

Art. 358. Every parent and every person

holding substitute parental authority shall
see to it that the rights of the child are
respected and his duties complied with, and
shall particularly, by precept and example,
imbue the child with highmindedness, love
of country, veneration for the national
 83

heroes, fidelity to democracy as a way of

life, and attachment to the ideal of
permanent world peace.

Art. 359. The government promotes the full

growth of the faculties of every child. For
this purpose, the government will establish,
whenever possible:

(1) Schools in every barrio,

municipality and city where optional
religious instruction shall be taught as
part of the curriculum at the option of
the parent or guardian;

(2) Puericulture and similar centers;

(3) Councils for the Protection of

Children; and

(4) Juvenile courts.

Art. 360. The Council for the Protection of

Children shall look after the welfare of
children in the municipality. It shall, among
other functions:

(1) Foster the education of every child

in the municipality;

(2) Encourage the cultivation of the

duties of parents;

(3) Protect and assist abandoned or

mistreated children, and orphans;

(4) Take steps to prevent juvenile

delinquency;

(5) Adopt measures for the health of

children;

(6) Promote the opening and

maintenance of playgrounds;

(7) Coordinate the activities of

organizations devoted to the welfare
of children, and secure their
cooperation.
 84

Art. 361. Juvenile courts will be established,

as far as practicable, in every chartered city
or large municipality.

Art. 362. Whenever a child is found

delinquent by any court, the father, mother,
or guardian may in a proper case be
judicially admonished.

Art. 363. In all questions on the care,

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

Title XIII. - USE OF SURNAMES (n)

Art. 364. Legitimate and legitimated

children shall principally use the surname of
the father.

Art. 365. An adopted child shall bear the

surname of the adopter.

Art. 366. A natural child acknowledged by

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

Art. 367. Natural children by legal fiction

shall principally employ the surname of the
father.

Art. 368. Illegitimate children referred to in

Article 287 shall bear the surname of the
mother.

Art. 369. Children conceived before the

decree annulling a voidable marriage shall
principally use the surname of the father.

Art. 370. A married woman may use:

(1) Her maiden first name and

surname and add her husband's
surname, or
 85

(2) Her maiden first name and her

husband's surname or

(3) Her husband's full name, but

prefixing a word indicating that she is
his wife, such as "Mrs."

Art. 371. In case of annulment of marriage,

and the wife is the guilty party, she shall
resume her maiden name and surname. If
she is the innocent spouse, she may resume
her maiden name and surname. However,
she may choose to continue employing her
former husband's surname, unless:

(1) The court decrees otherwise, or

(2) She or the former husband is

married again to another person.

Art. 372. When legal separation has been

granted, the wife shall continue using her
name and surname employed before the
legal separation.

Art. 373. A widow may use the deceased

husband's surname as though he were still
living, in accordance with Article 370.

Art. 374. In case of identity of names and

surnames, the younger person shall be
obliged to use such additional name or
surname as will avoid confusion.

Art. 375. In case of identity of names and

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

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

surname, or

(2) Add the Roman Numerals II, III,

and so on.

Art. 376. No person can change his name or

surname without judicial authority.

Art. 377. Usurpation of a name and surname

may be the subject of an action for damages
and other relief.
 86

Art. 378. The unauthorized or unlawful use

of another person's surname gives a right of
action to the latter.

Art. 379. The employment of pen names or

stage names is permitted, provided it is done
in good faith and there is no injury to third
persons. Pen names and stage names cannot
be usurped.

Art. 380. Except as provided in the

preceding article, no person shall use
different names and surnames.

Title XIV. - ABSENCE

CHAPTER 1
PROVISIONAL MEASURES IN CASE OF
ABSENCE

Art. 381. When a person disappears from his

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

This same rule shall be observed when

under similar circumstances the power
conferred by the absentee has expired.
(181a)

Art. 382. The appointment referred to in the

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

Art. 383. In the appointment of a

representative, the spouse present shall be
preferred when there is no legal separation.

If the absentee left no spouse, or if the

spouse present is a minor, any competent
person may be appointed by the court.
 87

(183a)

CHAPTER 2
DECLARATION OF ABSENCE

Art. 384. Two years having elapsed without

any news about the absentee or since the
receipt of the last news, and five years in
case the absentee has left a person in charge
of the administration of his property, his
absence may be declared. (184)

Art. 385. The following may ask for the

declaration of absence:

(1) The spouse present;

(2) The heirs instituted in a will, who

may present an authentic copy of the
same;

(3) The relatives who may succeed by

the law of intestacy;

(4) Those who may have over the

property of the absentee some right
subordinated to the condition of his
death. (185)

Art. 386. The judicial declaration of absence

shall not take effect until six months after its
publication in a newspaper of general
circulation. (186a)

CHAPTER 3
ADMINISTRATION OF THE PROPERTY
OF THE ABSENTEE

Art. 387. An administrator of the absentee's

property shall be appointed in accordance
with Article 383. (187a)

Art. 388. The wife who is appointed as an

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

Art. 389. The administration shall cease in

any of the following cases:
 88

(1) When the absentee appears

personally or by means of an agent;

(2) When the death of the absentee is

proved and his testate or intestate
heirs appear;

(3) When a third person appears,

showing by a proper document that he
has acquired the absentee's property
by purchase or other title.

In these cases the administrator shall cease

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

CHAPTER 4
PRESUMPTION OF DEATH

Art. 390. After an absence of seven years, it

being unknown whether or not the absentee
still lives, he shall be presumed dead for all
purposes, except for those of succession.

The absentee shall not be presumed dead for

the purpose of opening his succession till
after an absence of ten years. If he
disappeared after the age of seventy-five
years, an absence of five years shall be
sufficient in order that his succession may
be opened. (n)

Art. 391. The following shall be presumed

dead for all purposes, including the division
of the estate among the heirs:

(1) A person on board a vessel lost

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

(2) A person in the armed forces who

has taken part in war, and has been
missing for four years;

(3) A person who has been in danger

of death under other circumstances
and his existence has not been known
for four years. (n)
 89

Art. 392. If the absentee appears, or without

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

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

Art. 393. Whoever claims a right pertaining

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

Art. 394. Without prejudice to the provision

of the preceding article, upon the opening of
a succession to which an absentee is called,
his share shall accrue to his co-heirs, unless
he has heirs, assigns, or a representative.
They shall all, as the case may be, make an
inventory of the property. (196a)

Art. 395. The provisions of the preceding

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

Art. 396. Those who may have entered upon

the inheritance shall appropriate the fruits
received in good faith so long as the
absentee does not appear, or while his
representatives or successors in interest do
not bring the proper actions. (198)

Title XV. - EMANCIPATION AND AGE

OF MAJORITY
 90

CHAPTER 1
EMANCIPATION

Art. 397. Emancipation takes place:

(1) By the marriage of the minor;

(2) By the attainment of majority;

(3) By the concession of the father or

of the mother who exercise parental
authority. (314)

Art. 398. Emancipation treated of in No. 3

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

Art. 399. Emancipation by marriage or by

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

Art. 400. In order that emancipation by

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

Art. 401. Emancipation is final or

irrevocable. (319a)

CHAPTER 2
AGE OF MAJORITY

Art. 402. Majority commences upon the

attainment of the age of twenty-one years.

The person who has reached majority is

qualified for all acts of civil life, save the
exceptions established by this Code in
special cases. (320a)
 91

Art. 403. Notwithstanding the provisions of

the preceding article, a daughter above
twenty-one but below twenty-three years of
age cannot leave the parental home without
the consent of the father or mother in whose
company she lives, except to become a wife,
or when she exercises a profession or
calling, or when the father or mother has
contracted a subsequent marriage. (321a)

Art. 404. An orphan who is minor may, at

the instance of any relative or other person,
obtain emancipation by concession upon an
order of the Court of First Instance. (322a)

Art. 405. For the concession and approval

referred to in the preceding article it is
necessary:

(1) That the minor be eighteen years

of age;

(2) That he consent thereto; and

(3) That the concession be deemed

convenient for the minor.

The concession shall be recorded in the

Civil Register. (323a)

Art. 406. The provisions of Article 399 are

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

Title XVI. - CIVIL REGISTER

Art. 407. Acts, events and judicial decrees

concerning the civil status of persons shall
be recorded in the civil register. (325a)

Art. 408. The following shall be entered in

the civil register:

(1) Births;
(2) marriages;
(3) deaths;
 92

(4) legal separations;

(5) annulments of marriage;
(6) judgments declaring marriages
void from the beginning;
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural
children;
(10) naturalization;
(11) loss, or (12) recovery of
citizenship;
(13) civil interdiction;
(14) judicial determination of
filiation;
(15) voluntary emancipation of a
minor; and
(16) changes of name. (326a)

Art. 409. In cases of legal separation,

adoption, naturalization and other judicial
orders mentioned in the preceding article, it
shall be the duty of the clerk of the court
which issued the decree to ascertain whether
the same has been registered, and if this has
not been done, to send a copy of said decree
to the civil registry of the city or
municipality where the court is functioning.
(n)

Art. 410. The books making up the civil

register and all documents relating thereto
shall be considered public documents and
shall be prima facie evidence of the facts
therein contained. (n)

Art. 411. Every civil registrar shall be civilly

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

Art. 412. No entry in a civil register shall be

changed or corrected, without a judicial
order. (n)

Art. 413. All other matters pertaining to the

registration of civil status shall be governed
by special laws. (n)
 93

BOOK II

PROPERTY, OWNERSHIP, AND ITS

MODIFICATIONS

Title I. - CLASSIFICATION OF
PROPERTY

PRELIMINARY PROVISIONS

Art. 414. All things which are or may be the

object of appropriation are considered
either:

(1) Immovable or real property; or

(2) Movable or personal property.

(333)

CHAPTER 1
IMMOVABLE PROPERTY

Art. 415. The following are immovable

property:

(1) Land, buildings, roads and

constructions of all kinds adhered to
the soil;

(2) Trees, plants, and growing fruits,

while they are attached to the land or
form an integral part of an
immovable;

(3) Everything attached to an

immovable in a fixed manner, in such
a way that it cannot be separated
therefrom without breaking the
material or deterioration of the object;

(4) Statues, reliefs, paintings or other

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

(5) Machinery, receptacles,

instruments or implements intended
 94

by the owner of the tenement for an

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

(6) Animal houses, pigeon-houses,

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

(7) Fertilizer actually used on a piece

of land;

(8) Mines, quarries, and slag dumps,

while the matter thereof forms part of
the bed, and waters either running or
stagnant;

(9) Docks and structures which,

though floating, are intended by their
nature and object to remain at a fixed
place on a river, lake, or coast;

(10) Contracts for public works, and

servitudes and other real rights over
immovable property. (334a)

CHAPTER 2
MOVABLE PROPERTY

Art. 416. The following things are deemed

to be personal property:
(1) Those movables susceptible of
appropriation which are not included
in the preceding article;

(2) Real property which by any

special provision of law is considered
as personal property;

(3) Forces of nature which are

brought under control by science; and

(4) In general, all things which can be

transported from place to place
 95

without impairment of the real

property to which they are fixed.
(335a)

Art. 417. The following are also considered

as personal property:

(1) Obligations and actions which

have for their object movables or
demandable sums; and

(2) Shares of stock of agricultural,

commercial and industrial entities,
although they may have real estate.
(336a)

Art. 418. Movable property is either

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

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

Art. 419. Property is either of public

dominion or of private ownership. (338)

Art. 420. The following things are property

of public dominion:

(1) Those intended for public use,

such as roads, canals, rivers, torrents,
ports and bridges constructed by the
State, banks, shores, roadsteads, and
others of similar character;

(2) Those which belong to the State,

without being for public use, and are
intended for some public service or
for the development of the national
wealth. (339a)

Art. 421. All other property of the State,

which is not of the character stated in the
preceding article, is patrimonial property.
(340a)

Art. 422. Property of public dominion, when

no longer intended for public use or for
 96

public service, shall form part of the

patrimonial property of the State. (341a)

Art. 423. The property of provinces, cities,

and municipalities is divided into property
for public use and patrimonial property.
(343)

Art. 424. Property for public use, in the

provinces, cities, and municipalities, consist
of the provincial roads, city streets,
municipal streets, the squares, fountains,
public waters, promenades, and public
works for public service paid for by said
provinces, cities, or municipalities.

All other property possessed by any of them

is patrimonial and shall be governed by this
Code, without prejudice to the provisions of
special laws. (344a)

Art. 425. Property of private ownership,

besides the patrimonial property of the State,
provinces, cities, and municipalities,
consists of all property belonging to private
persons, either individually or collectively.
(345a)

PROVISIONS COMMON TO THE THREE

PRECEDING CHAPTERS

Art. 426. Whenever by provision of the law,

or an individual declaration, the expression
"immovable things or property," or
"movable things or property," is used, it
shall be deemed to include, respectively, the
things enumerated in Chapter 1 and Chapter
2.

Whenever the word "muebles," or

"furniture," is used alone, it shall not be
deemed to include money, credits,
commercial securities, stocks and bonds,
jewelry, scientific or artistic collections,
books, medals, arms, clothing, horses or
carriages and their accessories, grains,
liquids and merchandise, or other things
which do not have as their principal object
 97

the furnishing or ornamenting of a building,

except where from the context of the law, or
the individual declaration, the contrary
clearly appears. (346a)

Title II. - OWNERSHIP

CHAPTER 1
OWNERSHIP IN GENERAL

Art. 427. Ownership may be exercised over

things or rights. (n)

Art. 428. The owner has the right to enjoy

and dispose of a thing, without other
limitations than those established by law.

The owner has also a right of action against

the holder and possessor of the thing in
order to recover it. (348a)

Art. 429. The owner or lawful possessor of a

thing has the right to exclude any person
from the enjoyment and disposal thereof.
For this purpose, he may use such force as
may be reasonably necessary to repel or
prevent an actual or threatened unlawful
physical invasion or usurpation of his
property. (n)

Art. 430. Every owner may enclose or fence

his land or tenements by means of walls,
ditches, live or dead hedges, or by any other
means without detriment to servitudes
constituted thereon. (388)

Art. 431. The owner of a thing cannot make

use thereof in such manner as to injure the
rights of a third person. (n)

Art. 432. The owner of a thing has no right

to prohibit the interference of another with
the same, if the interference is necessary to
avert an imminent danger and the threatened
damage, compared to the damage arising to
the owner from the interference, is much
greater. The owner may demand from the
person benefited indemnity for the damage
to him. (n)
 98

Art. 433. Actual possession under claim of

ownership raises disputable presumption of
ownership. The true owner must resort to
judicial process for the recovery of the
property. (n)

Art. 434. In an action to recover, the

property must be identified, and the plaintiff
must rely on the strength of his title and not
on the weakness of the defendant's claim.
(n)

Art. 435. No person shall be deprived of his

property except by competent authority and
for public use and always upon payment of
just compensation.

Should this requirement be not first

complied with, the courts shall protect and,
in a proper case, restore the owner in his
possession. (349a)

Art. 436. When any property is condemned

or seized by competent authority in the
interest of health, safety or security, the
owner thereof shall not be entitled to
compensation, unless he can show that such
condemnation or seizure is unjustified. (n)

Art. 437. The owner of a parcel of land is

the owner of its surface and of everything
under it, and he can construct thereon any
works or make any plantations and
excavations which he may deem proper,
without detriment to servitudes and subject
to special laws and ordinances. He cannot
complain of the reasonable requirements of
aerial navigation. (350a)

Art. 438. Hidden treasure belongs to the

owner of the land, building, or other
property on which it is found.

Nevertheless, when the discovery is made

on the property of another, or of the State or
any of its subdivisions, and by chance, one-
half thereof shall be allowed to the finder. If
the finder is a trespasser, he shall not be
entitled to any share of the treasure.

If the things found be of interest to science

of the arts, the State may acquire them at
 99

their just price, which shall be divided in

conformity with the rule stated. (351a)

Art. 439. By treasure is understood, for legal

purposes, any hidden and unknown deposit
of money, jewelry, or other precious objects,
the lawful ownership of which does not
appear. (352)

CHAPTER 3
RIGHT OF ACCESSION

GENERAL PROVISIONS

Art. 440. The ownership of property gives

the right by accession to everything which is
produced thereby, or which is incorporated
or attached thereto, either naturally or
artificially. (353)

SECTION 1. - Right of Accession with

Respect to
What is Produced by Property

Art. 441. To the owner belongs:

(1) The natural fruits;

(2) The industrial fruits;

(3) The civil fruits. (354)

Art. 442. Natural fruits are the spontaneous

products of the soil, and the young and other
products of animals.

Industrial fruits are those produced by lands

of any kind through cultivation or labor.

Civil fruits are the rents of buildings, the

price of leases of lands and other property
and the amount of perpetual or life annuities
or other similar income. (355a)

Art. 443. He who receives the fruits has the

obligation to pay the expenses made by a
third person in their production, gathering,
and preservation. (356)

Art. 444. Only such as are manifest or born

are considered as natural or industrial fruits.
 100

With respect to animals, it is sufficient that

they are in the womb of the mother,
although unborn. (357)

SECTION 2. - Right of Accession with

Respect
to Immovable Property

Art. 445. Whatever is built, planted or sown

on the land of another and the improvements
or repairs made thereon, belong to the owner
of the land, subject to the provisions of the
following articles. (358)

Art. 446. All works, sowing, and planting

are presumed made by the owner and at his
expense, unless the contrary is proved. (359)

Art. 447. The owner of the land who makes

thereon, personally or through another,
plantings, constructions or works with the
materials of another, shall pay their value;
and, if he acted in bad faith, he shall also be
obliged to the reparation of damages. The
owner of the materials shall have the right to
remove them only in case he can do so
without injury to the work constructed, or
without the plantings, constructions or
works being destroyed. However, if the
landowner acted in bad faith, the owner of
the materials may remove them in any event,
with a right to be indemnified for damages.
(360a)

Art. 448. The owner of the land on which

anything has been built, sown or planted in
good faith, shall have the right to
appropriate as his own the works, sowing or
planting, after payment of the indemnity
provided for in Articles 546 and 548, or to
oblige the one who built or planted to pay
the price of the land, and the one who
sowed, the proper rent. However, the builder
or planter cannot be obliged to buy the land
if its value is considerably more than that of
the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land
does not choose to appropriate the building
or trees after proper indemnity. The parties
shall agree upon the terms of the lease and
 101

in case of disagreement, the court shall fix

the terms thereof. (361a)

Art. 449. He who builds, plants or sows in

bad faith on the land of another, loses what
is built, planted or sown without right to
indemnity. (362)

Art. 450. The owner of the land on which

anything has been built, planted or sown in
bad faith may demand the demolition of the
work, or that the planting or sowing be
removed, in order to replace things in their
former condition at the expense of the
person who built, planted or sowed; or he
may compel the builder or planter to pay the
price of the land, and the sower the proper
rent. (363a)

Art. 451. In the cases of the two preceding

articles, the landowner is entitled to
damages from the builder, planter or sower.
(n)

Art. 452. The builder, planter or sower in

bad faith is entitled to reimbursement for the
necessary expenses of preservation of the
land. (n)

Art. 453. If there was bad faith, not only on

the part of the person who built, planted or
sowed on the land of another, but also on the
part of the owner of such land, the rights of
one and the other shall be the same as
though both had acted in good faith.

It is understood that there is bad faith on the

part of the landowner whenever the act was
done with his knowledge and without
opposition on his part. (354a)

Art. 454. When the landowner acted in bad

faith and the builder, planter or sower
proceeded in good faith, the provisions of
article 447 shall apply. (n)

Art. 455. If the materials, plants or seeds

belong to a third person who has not acted in
bad faith, the owner of the land shall answer
subsidiarily for their value and only in the
event that the one who made use of them has
no property with which to pay.
 102

This provision shall not apply if the owner

makes use of the right granted by article
450. If the owner of the materials, plants or
seeds has been paid by the builder, planter or
sower, the latter may demand from the
landowner the value of the materials and
labor. (365a)

Art. 456. In the cases regulated in the

preceding articles, good faith does not
necessarily exclude negligence, which gives
right to damages under article 2176. (n)

Art. 457. To the owners of lands adjoining

the banks of rivers belong the accretion
which they gradually receive from the
effects of the current of the waters. (336)

Art. 458. The owners of estates adjoining

ponds or lagoons do not acquire the land left
dry by the natural decrease of the waters, or
lose that inundated by them in extraordinary
floods. (367)

Art. 459. Whenever the current of a river,

creek or torrent segregates from an estate on
its bank a known portion of land and
transfers it to another estate, the owner of
the land to which the segregated portion
belonged retains the ownership of it,
provided that he removes the same within
two years. (368a)

Art. 460. Trees uprooted and carried away

by the current of the waters belong to the
owner of the land upon which they may be
cast, if the owners do not claim them within
six months. If such owners claim them, they
shall pay the expenses incurred in gathering
them or putting them in a safe place. (369a)

Art. 461. River beds which are abandoned

through the natural change in the course of
the waters ipso facto belong to the owners
whose lands are occupied by the new course
in proportion to the area lost. However, the
owners of the lands adjoining the old bed
shall have the right to acquire the same by
paying the value thereof, which value shall
not exceed the value of the area occupied by
the new bed. (370a)
 103

Art. 462. Whenever a river, changing its

course by natural causes, opens a new bed
through a private estate, this bed shall
become of public dominion. (372a)

Art. 463. Whenever the current of a river

divides itself into branches, leaving a piece
of land or part thereof isolated, the owner of
the land retains his ownership. He also
retains it if a portion of land is separated
from the estate by the current. (374)

Art. 464. Islands which may be formed on

the seas within the jurisdiction of the
Philippines, on lakes, and on navigable or
floatable rivers belong to the State. (371a)

Art. 465. Islands which through successive

accumulation of alluvial deposits are formed
in non-navigable and non-floatable rivers,
belong to the owners of the margins or
banks nearest to each of them, or to the
owners of both margins if the island is in the
middle of the river, in which case it shall be
divided longitudinally in halves. If a single
island thus formed be more distant from one
margin than from the other, the owner of the
nearer margin shall be the sole owner
thereof. (373a)

SECTION 3. - Right of Accession

with Respect to Movable Property

Art. 466. Whenever two movable things

belonging to different owners are, without
bad faith, united in such a way that they
form a single object, the owner of the
principal thing acquires the accessory,
indemnifying the former owner thereof for
its value. (375)

Art. 467. The principal thing, as between

two things incorporated, is deemed to be that
to which the other has been united as an
ornament, or for its use or perfection. (376)

Art. 468. If it cannot be determined by the

rule given in the preceding article which of
the two things incorporated is the principal
one, the thing of the greater value shall be so
 104

considered, and as between two things of

equal value, that of the greater volume.

In painting and sculpture, writings, printed

matter, engraving and lithographs, the board,
metal, stone, canvas, paper or parchment
shall be deemed the accessory thing. (377)

Art. 469. Whenever the things united can be

separated without injury, their respective
owners may demand their separation.

Nevertheless, in case the thing united for the

use, embellishment or perfection of the
other, is much more precious than the
principal thing, the owner of the former may
demand its separation, even though the thing
to which it has been incorporated may suffer
some injury. (378)

Art. 470. Whenever the owner of the

accessory thing has made the incorporation
in bad faith, he shall lose the thing
incorporated and shall have the obligation to
indemnify the owner of the principal thing
for the damages he may have suffered.

If the one who has acted in bad faith is the

owner of the principal thing, the owner of
the accessory thing shall have a right to
choose between the former paying him its
value or that the thing belonging to him be
separated, even though for this purpose it be
necessary to destroy the principal thing; and
in both cases, furthermore, there shall be
indemnity for damages.

If either one of the owners has made the

incorporation with the knowledge and
without the objection of the other, their
respective rights shall be determined as
though both acted in good faith. (379a)

Art. 471. Whenever the owner of the

material employed without his consent has a
right to an indemnity, he may demand that
this consist in the delivery of a thing equal
in kind and value, and in all other respects,
to that employed, or else in the price thereof,
according to expert appraisal. (380)
 105

Art. 472. If by the will of their owners two

things of the same or different kinds are
mixed, or if the mixture occurs by chance,
and in the latter case the things are not
separable without injury, each owner shall
acquire a right proportional to the part
belonging to him, bearing in mind the value
of the things mixed or confused. (381)

Art. 473. If by the will of only one owner,

but in good faith, two things of the same or
different kinds are mixed or confused, the
rights of the owners shall be determined by
the provisions of the preceding article.

If the one who caused the mixture or

confusion acted in bad faith, he shall lose
the thing belonging to him thus mixed or
confused, besides being obliged to pay
indemnity for the damages caused to the
owner of the other thing with which his own
was mixed. (382)

Art. 474. One who in good faith employs the

material of another in whole or in part in
order to make a thing of a different kind,
shall appropriate the thing thus transformed
as his own, indemnifying the owner of the
material for its value.

If the material is more precious than the

transformed thing or is of more value, its
owner may, at his option, appropriate the
new thing to himself, after first paying
indemnity for the value of the work, or
demand indemnity for the material.

If in the making of the thing bad faith

intervened, the owner of the material shall
have the right to appropriate the work to
himself without paying anything to the
maker, or to demand of the latter that he
indemnify him for the value of the material
and the damages he may have suffered.
However, the owner of the material cannot
appropriate the work in case the value of the
latter, for artistic or scientific reasons, is
considerably more than that of the material.
(383a)
 106

Art. 475. In the preceding articles,

sentimental value shall be duly appreciated.
(n)

CHAPTER 3
QUIETING OF TITLE (n)

Art. 476. Whenever there is a cloud on title

to real property or any interest therein, by
reason of any instrument, record, claim,
encumbrance or proceeding which is
apparently valid or effective but is in truth
and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to
said title, an action may be brought to
remove such cloud or to quiet the title.

An action may also be brought to prevent a

cloud from being cast upon title to real
property or any interest therein.

Art. 477. The plaintiff must have legal or

equitable title to, or interest in the real
property which is the subject matter of the
action. He need not be in possession of said
property.

Art. 478. There may also be an action to

quiet title or remove a cloud therefrom when
the contract, instrument or other obligation
has been extinguished or has terminated, or
has been barred by extinctive prescription.

Art. 479. The plaintiff must return to the

defendant all benefits he may have received
from the latter, or reimburse him for
expenses that may have redounded to the
plaintiff's benefit.

Art. 480. The principles of the general law

on the quieting of title are hereby adopted
insofar as they are not in conflict with this
Code.

Art. 481. The procedure for the quieting of

title or the removal of a cloud therefrom
shall be governed by such rules of court as
the Supreme Court shall promulgated.

CHAPTER 4
 107

RUINOUS BUILDINGS AND TREES IN

DANGER OF FALLING

Art. 482. If a building, wall, column, or any

other construction is in danger of falling, the
owner shall be obliged to demolish it or to
execute the necessary work in order to
prevent it from falling.

If the proprietor does not comply with this

obligation, the administrative authorities
may order the demolition of the structure at
the expense of the owner, or take measures
to insure public safety. (389a)

Art. 483. Whenever a large tree threatens to

fall in such a way as to cause damage to the
land or tenement of another or to travelers
over a public or private road, the owner of
the tree shall be obliged to fell and remove
it; and should he not do so, it shall be done
at his expense by order of the administrative
authorities. (390a)

Title III. - CO-OWNERSHIP

Art. 484. There is co-ownership whenever

the ownership of an undivided thing or right
belongs to different persons.

In default of contracts, or of special

provisions, co-ownership shall be governed
by the provisions of this Title. (392)

Art. 485. The share of the co-owners, in the

benefits as well as in the charges, shall be
proportional to their respective interests.
Any stipulation in a contract to the contrary
shall be void.

The portions belonging to the co-owners in

the co-ownership shall be presumed equal,
unless the contrary is proved. (393a)

Art. 486. Each co-owner may use the thing

owned in common, provided he does so in
accordance with the purpose for which it is
intended and in such a way as not to injure
the interest of the co-ownership or prevent
the other co-owners from using it according
 108

to their rights. The purpose of the co-

ownership may be changed by agreement,
express or implied. (394a)

Art. 487. Any one of the co-owners may

bring an action in ejectment. (n)

Art. 488. Each co-owner shall have a right to

compel the other co-owners to contribute to
the expenses of preservation of the thing or
right owned in common and to the taxes.
Any one of the latter may exempt himself
from this obligation by renouncing so much
of his undivided interest as may be
equivalent to his share of the expenses and
taxes. No such waiver shall be made if it is
prejudicial to the co-ownership. (395a)

Art. 489. Repairs for preservation may be

made at the will of one of the co-owners, but
he must, if practicable, first notify his co-
owners of the necessity for such repairs.
Expenses to improve or embellish the thing
shall be decided upon by a majority as
determined in Article 492. (n)

Art. 490. Whenever the different stories of a

house belong to different owners, if the titles
of ownership do not specify the terms under
which they should contribute to the
necessary expenses and there exists no
agreement on the subject, the following
rules shall be observed:

(1) The main and party walls, the roof

and the other things used in common,
shall be preserved at the expense of
all the owners in proportion to the
value of the story belonging to each;

(2) Each owner shall bear the cost of

maintaining the floor of his story; the
floor of the entrance, front door,
common yard and sanitary works
common to all, shall be maintained at
the expense of all the owners pro rata;

(3) The stairs from the entrance to the

first story shall be maintained at the
expense of all the owners pro rata,
with the exception of the owner of the
 109

ground floor; the stairs from the first

to the second story shall be preserved
at the expense of all, except the owner
of the ground floor and the owner of
the first story; and so on successively.
(396)

Art. 491. None of the co-owners shall,

without the consent of the others, make
alterations in the thing owned in common,
even though benefits for all would result
therefrom. However, if the withholding of
the consent by one or more of the co-owners
is clearly prejudicial to the common interest,
the courts may afford adequate relief. (397a)

Art. 492. For the administration and better

enjoyment of the thing owned in common,
the resolutions of the majority of the co-
owners shall be binding.

There shall be no majority unless the

resolution is approved by the co-owners who
represent the controlling interest in the
object of the co-ownership.

Should there be no majority, or should the

resolution of the majority be seriously
prejudicial to those interested in the property
owned in common, the court, at the instance
of an interested party, shall order such
measures as it may deem proper, including
the appointment of an administrator.

Whenever a part of the thing belongs

exclusively to one of the co-owners, and the
remainder is owned in common, the
preceding provision shall apply only to the
part owned in common. (398)

Art. 493. Each co-owner shall have the full

ownership of his part and of the fruits and
benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and
even substitute another person in its
enjoyment, except when personal rights are
involved. But the effect of the alienation or
the mortgage, with respect to the co-owners,
shall be limited to the portion which may be
alloted to him in the division upon the
termination of the co-ownership. (399)
 110

Art. 494. No co-owner shall be obliged to

remain in the co-ownership. Each co-owner
may demand at any time the partition of the
thing owned in common, insofar as his share
is concerned.

Nevertheless, an agreement to keep the thing

undivided for a certain period of time, not
exceeding ten years, shall be valid. This
term may be extended by a new agreement.

A donor or testator may prohibit partition for

a period which shall not exceed twenty
years.

Neither shall there be any partition when it

is prohibited by law.

No prescription shall run in favor of a co-

owner or co-heir against his co-owners or
co-heirs so long as he expressly or impliedly
recognizes the co-ownership. (400a)

Art. 495. Notwithstanding the provisions of

the preceding article, the co-owners cannot
demand a physical division of the thing
owned in common, when to do so would
render it unserviceable for the use for which
it is intended. But the co-ownership may be
terminated in accordance with Article 498.
(401a)

Art. 496. Partition may be made by

agreement between the parties or by judicial
proceedings. Partition shall be governed by
the Rules of Court insofar as they are
consistent with this Code. (402)

Art. 497. The creditors or assignees of the

co-owners may take part in the division of
the thing owned in common and object to its
being effected without their concurrence.
But they cannot impugn any partition
already executed, unless there has been
fraud, or in case it was made
notwithstanding a formal opposition
presented to prevent it, without prejudice to
the right of the debtor or assignor to
maintain its validity. (403)

Art. 498. Whenever the thing is essentially

indivisible and the co-owners cannot agree
 111

that it be allotted to one of them who shall

indemnify the others, it shall be sold and its
proceeds distributed. (404)

Art. 499. The partition of a thing owned in

common shall not prejudice third persons,
who shall retain the rights of mortgage,
servitude or any other real rights belonging
to them before the division was made.
Personal rights pertaining to third persons
against the co-ownership shall also remain
in force, notwithstanding the partition. (405)

Art. 500. Upon partition, there shall be a

mutual accounting for benefits received and
reimbursements for expenses made.
Likewise, each co-owner shall pay for
damages caused by reason of his negligence
or fraud. (n)

Art. 501. Every co-owner shall, after

partition, be liable for defects of title and
quality of the portion assigned to each of the
other co-owners. (n)

Title IV. - SOME SPECIAL PROPERTIES

CHAPTER I
WATERS

SECTION 1. - Ownership of Waters

Art. 502. The following are of public

dominion:

(1) Rivers and their natural beds;

(2) Continuous or intermittent waters

of springs and brooks running in their
natural beds and the beds themselves;

(3) Waters rising continuously or

intermittently on lands of public
dominion;

(4) Lakes and lagoons formed by

Nature on public lands, and their
beds;
 112

(5) Rain waters running through

ravines or sand beds, which are also
of public dominion;

(6) Subterranean waters on public

lands;

(7) Waters found within the zone of

operation of public works, even if
constructed by a contractor;

(8) Waters rising continuously or

intermittently on lands belonging to
private persons, to the State, to a
province, or to a city or a municipality
from the moment they leave such
lands;

(9) The waste waters of fountains,

sewers and public establishments.
(407)

Art. 503. The following are of private

ownership:

(1) Continuous or intermittent waters

rising on lands of private ownership,
while running through the same;

(2) Lakes and lagoons, and their beds,

formed by Nature on such lands;

(3) Subterranean waters found on the

same;

(4) Rain waters falling on said lands,

as long as they remain within the
boundaries;

(5) The beds of flowing waters,

continuous or intermittent, formed by
rain water, and those of brooks,
crossing lands which are not of public
dominion.

In every drain or aqueduct, the water,

bed, banks and floodgates shall be
considered as an integral part of the
land of building for which the waters
are intended. The owners of lands,
through which or along the
boundaries of which the aqueduct
 113

passes, cannot claim ownership over

it, or any right to the use of its bed or
banks, unless the claim is based on
titles of ownership specifying the
right or ownership claimed. (408)

SECTION 2. - The Use of Public Waters

Art. 504. The use of public waters is

acquired:

(1) By administrative concession;

(2) By prescription for ten years.

The extent of the rights and obligations of

the use shall be that established, in the first
case, by the terms of the concession, and, in
the second case, by the manner and form in
which the waters have been used. (409a)

Art. 505. Every concession for the use of

waters is understood to be without prejudice
to third persons. (410)

Art. 506. The right to make use of public

waters is extinguished by the lapse of the
concession and by non-user for five years.
(411a)

SECTION 3. - The Use of Waters of Private

Ownership

Art. 507. The owner of a piece of land on

which a spring or brook rises, be it
continuous or intermittent, may use its
waters while they run through the same, but
after the waters leave the land they shall
become public, and their use shall be
governed by the Special Law of Waters of
August 3, 1866, and by the Irrigation Law.
(412a)

Art. 508. The private ownership of the beds

of rain waters does not give a right to make
works or constructions which may change
their course to the damage of third persons,
or whose destruction, by the force of floods,
may cause such damage. (413)
 114

Art. 509. No one may enter private property

to search waters or make use of them
without permission from the owners, except
as provided by the Mining Law. (414a)

Art. 510. The ownership which the

proprietor of a piece of land has over the
waters rising thereon does not prejudice the
rights which the owners of lower estates
may have legally acquired to the use thereof.
(415)

Art. 511. Every owner of a piece of land has

the right to construct within his property,
reservoirs for rain waters, provided he
causes no damage to the public or to third
persons. (416)

SECTION 4. - Subterranean Waters

Art. 512. Only the owner of a piece of land,

or another person with his permission, may
make explorations thereon for subterranean
waters, except as provided by the Mining
Law.

Explorations for subterranean waters on

lands of public dominion may be made only
with the permission of the administrative
authorities. (417a)

Art. 513. Waters artificially brought forth in

accordance with the Special Law of Waters
of August 3, 1866, belong to the person who
brought them up. (418)

Art. 514. When the owner of waters

artificially brought to the surface abandons
them to their natural course, they shall
become of public dominion. (419)

SECTION 5. - General Provisions

Art. 515. The owner of a piece of land on

which there are defensive works to check
waters, or on which, due to a change of their
course, it may be necessary to reconstruct
such works, shall be obliged, at his election,
either to make the necessary repairs or
 115

construction himself, or to permit them to be

done, without damage to him, by the owners
of the lands which suffer or are clearly
exposed to suffer injury. (420)

Art. 516. The provisions of the preceding

article are applicable to the case in which it
may be necessary to clear a piece of land of
matter, whose accumulation or fall may
obstruct the course of the waters, to the
damage or peril of third persons. (421)

Art. 517. All the owners who participate in

the benefits arising from the works referred
to in the two preceding articles, shall be
obliged to contribute to the expenses of
construction in proportion to their respective
interests. Those who by their fault may have
caused the damage shall be liable for the
expenses. (422)

Art. 518. All matters not expressly

determined by the provisions of this Chapter
shall be governed by the special Law of
Waters of August 3, 1866, and by the
Irrigation Law. (425a)

CHAPTER 2
MINERALS

Art. 519. Mining claims and rights and other

matters concerning minerals and mineral
lands are governed by special laws. (427a)

CHAPTER 3
TRADE-MARKS AND TRADE-NAMES

Art. 520. A trade-mark or trade-name duly

registered in the proper government bureau
or office is owned by and pertains to the
person, corporation, or firm registering the
same, subject to the provisions of special
laws. (n)

Art. 521. The goodwill of a business is

property, and may be transferred together
with the right to use the name under which
the business is conducted. (n)
 116

Art. 522. Trade-marks and trade-names are

governed by special laws. (n)

Title V. - POSSESSION

CHAPTER 1
POSSESSION AND THE KINDS
THEREOF

Art. 523. Possession is the holding of a thing

or the enjoyment of a right. (430a)

Art. 524. Possession may be exercised in

one's own name or in that of another. (413a)

Art. 525. The possession of things or rights

may be had in one of two concepts: either in
the concept of owner, or in that of the holder
of the thing or right to keep or enjoy it, the
ownership pertaining to another person.
(432)

Art. 526. He is deemed a possessor in good

faith who is not aware that there exists in his
title or mode of acquisition any flaw which
invalidates it.

He is deemed a possessor in bad faith who

possesses in any case contrary to the
foregoing.

Mistake upon a doubtful or difficult question

of law may be the basis of good faith. (433a)

Art. 527. Good faith is always presumed,

and upon him who alleges bad faith on the
part of a possessor rests the burden of proof.
(434)

Art. 528. Possession acquired in good faith

does not lose this character except in the
case and from the moment facts exist which
show that the possessor is not unaware that
he possesses the thing improperly or
wrongfully. (435a)

Art. 529. It is presumed that possession

continues to be enjoyed in the same
character in which it was acquired, until the
contrary is proved. (436)
 117

Art. 530. Only things and rights which are

susceptible of being appropriated may be the
object of possession. (437)

CHAPTER 2
ACQUISITION OF POSSESSION

Art. 531. Possession is acquired by the

material occupation of a thing or the
exercise of a right, or by the fact that it is
subject to the action of our will, or by the
proper acts and legal formalities established
for acquiring such right. (438a)

Art. 532. Possession may be acquired by the

same person who is to enjoy it, by his legal
representative, by his agent, or by any
person without any power whatever: but in
the last case, the possession shall not be
considered as acquired until the person in
whose name the act of possession was
executed has ratified the same, without
prejudice to the juridical consequences of
negotiorum gestio in a proper case. (439a)

Art. 533. The possession of hereditary

property is deemed transmitted to the heir
without interruption and from the moment of
the death of the decedent, in case the
inheritance is accepted.

One who validly renounces an inheritance is

deemed never to have possessed the same.
(440)

Art. 534. On who succeeds by hereditary

title shall not suffer the consequences of the
wrongful possession of the decedent, if it is
not shown that he was aware of the flaws
affecting it; but the effects of possession in
good faith shall not benefit him except from
the date of the death of the decedent. (442)

Art. 535. Minors and incapacitated persons

may acquire the possession of things; but
they need the assistance of their legal
representatives in order to exercise the rights
which from the possession arise in their
favor. (443)
 118

Art. 536. In no case may possession be

acquired through force or intimidation as
long as there is a possessor who objects
thereto. He who believes that he has an
action or a right to deprive another of the
holding of a thing, must invoke the aid of
the competent court, if the holder should
refuse to deliver the thing. (441a)

Art. 537. Acts merely tolerated, and those

executed clandestinely and without the
knowledge of the possessor of a thing, or by
violence, do not affect possession. (444)

Art. 538. Possession as a fact cannot be

recognized at the same time in two different
personalities except in the cases of co-
possession. Should a question arise
regarding the fact of possession, the present
possessor shall be preferred; if there are two
possessors, the one longer in possession; if
the dates of the possession are the same, the
one who presents a title; and if all these
conditions are equal, the thing shall be
placed in judicial deposit pending
determination of its possession or ownership
through proper proceedings. (445)

CHAPTER 3
EFFECTS OF POSSESSION

Art. 539. Every possessor has a right to be

respected in his possession; and should he
be disturbed therein he shall be protected in
or restored to said possession by the means
established by the laws and the Rules of
Court.

A possessor deprived of his possession

through forcible entry may within ten days
from the filing of the complaint present a
motion to secure from the competent court,
in the action for forcible entry, a writ of
preliminary mandatory injunction to restore
him in his possession. The court shall decide
the motion within thirty (30) days from the
filing thereof. (446a)
 119

Art. 540. Only the possession acquired and

enjoyed in the concept of owner can serve as
a title for acquiring dominion. (447)

Art. 541. A possessor in the concept of

owner has in his favor the legal presumption
that he possesses with a just title and he
cannot be obliged to show or prove it.
(448a)

Art. 542. The possession of real property

presumes that of the movables therein, so
long as it is not shown or proved that they
should be excluded. (449)

Art. 543. Each one of the participants of a

thing possessed in common shall be deemed
to have exclusively possessed the part which
may be allotted to him upon the division
thereof, for the entire period during which
the co-possession lasted. Interruption in the
possession of the whole or a part of a thing
possessed in common shall be to the
prejudice of all the possessors. However, in
case of civil interruption, the Rules of Court
shall apply. (450a)

Art. 544. A possessor in good faith is

entitled to the fruits received before the
possession is legally interrupted.

Natural and industrial fruits are considered

received from the time they are gathered or
severed.

Civil fruits are deemed to accrue daily and

belong to the possessor in good faith in that
proportion. (451)

Art. 545. If at the time the good faith ceases,

there should be any natural or industrial
fruits, the possessor shall have a right to a
part of the expenses of cultivation, and to a
part of the net harvest, both in proportion to
the time of the possession.

The charges shall be divided on the same

basis by the two possessors.

The owner of the thing may, should he so

desire, give the possessor in good faith the
right to finish the cultivation and gathering
 120

of the growing fruits, as an indemnity for his

part of the expenses of cultivation and the
net proceeds; the possessor in good faith
who for any reason whatever should refuse
to accept this concession, shall lose the right
to be indemnified in any other manner.
(452a)

Art. 546. Necessary expenses shall be

refunded to every possessor; but only the
possessor in good faith may retain the thing
until he has been reimbursed therefor.

Useful expenses shall be refunded only to

the possessor in good faith with the same
right of retention, the person who has
defeated him in the possession having the
option of refunding the amount of the
expenses or of paying the increase in value
which the thing may have acquired by
reason thereof. (453a)

Art. 547. If the useful improvements can be

removed without damage to the principal
thing, the possessor in good faith may
remove them, unless the person who
recovers the possession exercises the option
under paragraph 2 of the preceding article.
(n)

Art. 548. Expenses for pure luxury or mere

pleasure shall not be refunded to the
possessor in good faith; but he may remove
the ornaments with which he has
embellished the principal thing if it suffers
no injury thereby, and if his successor in the
possession does not prefer to refund the
amount expended. (454)

Art. 549. The possessor in bad faith shall

reimburse the fruits received and those
which the legitimate possessor could have
received, and shall have a right only to the
expenses mentioned in paragraph 1 of
Article 546 and in Article 443. The expenses
incurred in improvements for pure luxury or
mere pleasure shall not be refunded to the
possessor in bad faith, but he may remove
the objects for which such expenses have
been incurred, provided that the thing
suffers no injury thereby, and that the lawful
 121

possessor does not prefer to retain them by

paying the value they may have at the time
he enters into possession. (445a)

Art. 550. The costs of litigation over the

property shall be borne by every possessor.
(n)

Art. 551. Improvements caused by nature or

time shall always insure to the benefit of the
person who has succeeded in recovering
possession. (456)

Art. 552. A possessor in good faith shall not

be liable for the deterioration or loss of the
thing possessed, except in cases in which it
is proved that he has acted with fraudulent
intent or negligence, after the judicial
summons.

A possessor in bad faith shall be liable for

deterioration or loss in every case, even if
caused by a fortuitous event. (457a)

Art. 553. One who recovers possession shall

not be obliged to pay for improvements
which have ceased to exist at the time he
takes possession of the thing. (458)

Art. 554. A present possessor who shows his

possession at some previous time, is
presumed to have held possession also
during the intermediate period, in the
absence of proof to the contrary. (459)

Art. 555. A possessor may lose his

possession:

(1) By the abandonment of the thing;

(2) By an assignment made to another

either by onerous or gratuitous title;

(3) By the destruction or total loss of

the thing, or because it goes out of
commerce;

(4) By the possession of another,

subject to the provisions of Article
537, if the new possession has lasted
longer than one year. But the real
 122

right of possession is not lost till after

the lapse of ten years. (460a)

Art. 556. The possession of movables is not

deemed lost so long as they remain under
the control of the possessor, even though for
the time being he may not know their
whereabouts. (461)

Art. 557. The possession of immovables and

of real rights is not deemed lost, or
transferred for purposes of prescription to
the prejudice of third persons, except in
accordance with the provisions of the
Mortgage Law and the Land Registration
laws. (462a)

Art. 558. Acts relating to possession,

executed or agreed to by one who possesses
a thing belonging to another as a mere
holder to enjoy or keep it, in any character,
do not bind or prejudice the owner, unless he
gave said holder express authority to do
such acts, or ratifies them subsequently.
(463)

Art. 559. The possession of movable

property acquired in good faith is equivalent
to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived
thereof may recover it from the person in
possession of the same.

If the possessor of a movable lost or which

the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the
owner cannot obtain its return without
reimbursing the price paid therefor. (464a)

Art. 560. Wild animals are possessed only

while they are under one's control;
domesticated or tamed animals are
considered domestic or tame if they retain
the habit of returning to the premises of the
possessor. (465)

Art. 561. One who recovers, according to

law, possession unjustly lost, shall be
deemed for all purposes which may redound
to his benefit, to have enjoyed it without
 123

interruption. (466)

Title VI. - USUFRUCT

CHAPTER 1
USUFRUCT IN GENERAL

Art. 562. Usufruct gives a right to enjoy the

property of another with the obligation of
preserving its form and substance, unless the
title constituting it or the law otherwise
provides. (467)

Art. 563. Usufruct is constituted by law, by

the will of private persons expressed in acts
inter vivos or in a last will and testament,
and by prescription. (468)

Art. 564. Usufruct may be constituted on the

whole or a part of the fruits of the thing, in
favor of one more persons, simultaneously
or successively, and in every case from or to
a certain day, purely or conditionally. It may
also be constituted on a right, provided it is
not strictly personal or intransmissible. (469)

Art. 565. The rights and obligations of the

usufructuary shall be those provided in the
title constituting the usufruct; in default of
such title, or in case it is deficient, the
provisions contained in the two following
Chapters shall be observed. (470)

CHAPTER 2
RIGHTS OF THE USUFRUCTUARY

Art. 566. The usufructuary shall be entitled

to all the natural, industrial and civil fruits of
the property in usufruct. With respect to
hidden treasure which may be found on the
land or tenement, he shall be considered a
stranger. (471)

Art. 567. Natural or industrial fruits growing

at the time the usufruct begins, belong to the
usufructuary.

Those growing at the time the usufruct

terminates, belong to the owner.
 124

In the preceding cases, the usufructuary, at

the beginning of the usufruct, has no
obligation to refund to the owner any
expenses incurred; but the owner shall be
obliged to reimburse at the termination of
the usufruct, from the proceeds of the
growing fruits, the ordinary expenses of
cultivation, for seed, and other similar
expenses incurred by the usufructuary.

The provisions of this article shall not

prejudice the rights of third persons,
acquired either at the beginning or at the
termination of the usufruct. (472)

Art. 568. If the usufructuary has leased the

lands or tenements given in usufruct, and the
usufruct should expire before the
termination of the lease, he or his heirs and
successors shall receive only the
proportionate share of the rent that must be
paid by the lessee. (473)

Art. 569. Civil fruits are deemed to accrue

daily, and belong to the usufructuary in
proportion to the time the usufruct may last.
(474)

Art. 570. Whenever a usufruct is constituted

on the right to receive a rent or periodical
pension, whether in money or in fruits, or in
the interest on bonds or securities payable to
bearer, each payment due shall be
considered as the proceeds or fruits of such
right.

Whenever it consists in the enjoyment of

benefits accruing from a participation in any
industrial or commercial enterprise, the date
of the distribution of which is not fixed,
such benefits shall have the same character.

In either case they shall be distributed as

civil fruits, and shall be applied in the
manner prescribed in the preceding article.
(475)

Art. 571. The usufructuary shall have the

right to enjoy any increase which the thing
in usufruct may acquire through accession,
the servitudes established in its favor, and, in
 125

general, all the benefits inherent therein.

(479)

Art. 572. The usufructuary may personally

enjoy the thing in usufruct, lease it to
another, or alienate his right of usufruct,
even by a gratuitous title; but all the
contracts he may enter into as such
usufructuary shall terminate upon the
expiration of the usufruct, saving leases of
rural lands, which shall be considered as
subsisting during the agricultural year. (480)

Art. 573. Whenever the usufruct includes

things which, without being consumed,
gradually deteriorate through wear and tear,
the usufructuary shall have the right to make
use thereof in accordance with the purpose
for which they are intended, and shall not be
obliged to return them at the termination of
the usufruct except in their condition at that
time; but he shall be obliged to indemnify
the owner for any deterioration they may
have suffered by reason of his fraud or
negligence. (481)

Art. 574. Whenever the usufruct includes

things which cannot be used without being
consumed, the usufructuary shall have the
right to make use of them under the
obligation of paying their appraised value at
the termination of the usufruct, if they were
appraised when delivered. In case they were
not appraised, he shall have the right to
return at the same quantity and quality, or
pay their current price at the time the
usufruct ceases. (482)

Art. 575. The usufructuary of fruit-bearing

trees and shrubs may make use of the dead
trunks, and even of those cut off or uprooted
by accident, under the obligation to replace
them with new plants. (483a)

Art. 576. If in consequence of a calamity or

extraordinary event, the trees or shrubs shall
have disappeared in such considerable
number that it would not be possible or it
would be too burdensome to replace them,
the usufructuary may leave the dead, fallen
or uprooted trunks at the disposal of the
 126

owner, and demand that the latter remove

them and clear the land. (484a)

Art. 577. The usufructuary of woodland may

enjoy all the benefits which it may produce
according to its nature.

If the woodland is a copse or consists of

timber for building, the usufructuary may do
such ordinary cutting or felling as the owner
was in the habit of doing, and in default of
this, he may do so in accordance with the
custom of the place, as to the manner,
amount and season.

In any case the felling or cutting of trees

shall be made in such manner as not to
prejudice the preservation of the land.

In nurseries, the usufructuary may make the

necessary thinnings in order that the
remaining trees may properly grow.

With the exception of the provisions of the

preceding paragraphs, the usufructuary
cannot cut down trees unless it be to restore
or improve some of the things in usufruct,
and in such case shall first inform the owner
of the necessity for the work. (485)

Art. 578. The usufructuary of an action to

recover real property or a real right, or any
movable property, has the right to bring the
action and to oblige the owner thereof to
give him the authority for this purpose and
to furnish him whatever proof he may have.
If in consequence of the enforcement of the
action he acquires the thing claimed, the
usufruct shall be limited to the fruits, the
dominion remaining with the owner. (486)

Art. 579. The usufructuary may make on the

property held in usufruct such useful
improvements or expenses for mere pleasure
as he may deem proper, provided he does
not alter its form or substance; but he shall
have no right to be indemnified therefor. He
may, however, remove such improvements,
should it be possible to do so without
damage to the property. (487)
 127

Art. 580. The usufructuary may set off the

improvements he may have made on the
property against any damage to the same.
(488)

Art. 581. The owner of property the usufruct

of which is held by another, may alienate it,
but he cannot alter its form or substance, or
do anything thereon which may be
prejudicial to the usufructuary. (489)

Art. 582. The usufructuary of a part of a

thing held in common shall exercise all the
rights pertaining to the owner thereof with
respect to the administration and the
collection of fruits or interest. Should the co-
ownership cease by reason of the division of
the thing held in common, the usufruct of
the part allotted to the co-owner shall belong
to the usufructuary. (490)

CHAPTER 3
OBLIGATIONS OF THE
USUFRUCTUARY

Art. 583. The usufructuary, before entering

upon the enjoyment of the property, is
obliged:
(1) To make, after notice to the owner
or his legitimate representative, an
inventory of all the property, which
shall contain an appraisal of the
movables and a description of the
condition of the immovables;

(2) To give security, binding himself

to fulfill the obligations imposed upon
him in accordance with this Chapter.
(491)

Art. 584. The provisions of No. 2 of the

preceding article shall not apply to the donor
who has reserved the usufruct of the
property donated, or to the parents who are
usufructuaries of their children's property,
except when the parents contract a second
marriage. (492a)

Art. 585. The usufructuary, whatever may be

the title of the usufruct, may be excused
 128

from the obligation of making an inventory

or of giving security, when no one will be
injured thereby. (493)

Art. 586. Should the usufructuary fail to

give security in the cases in which he is
bound to give it, the owner may demand that
the immovables be placed under
administration, that the movables be sold,
that the public bonds, instruments of credit
payable to order or to bearer be converted
into registered certificates or deposited in a
bank or public institution, and that the
capital or sums in cash and the proceeds of
the sale of the movable property be invested
in safe securities.

The interest on the proceeds of the sale of

the movables and that on public securities
and bonds, and the proceeds of the property
placed under administration, shall belong to
the usufructuary.

Furthermore, the owner may, if he so

prefers, until the usufructuary gives security
or is excused from so doing, retain in his
possession the property in usufruct as
administrator, subject to the obligation to
deliver to the usufructuary the net proceeds
thereof, after deducting the sums which may
be agreed upon or judicially allowed him for
such administration. (494)

Art. 587. If the usufructuary who has not

given security claims, by virtue of a promise
under oath, the delivery of the furniture
necessary for his use, and that he and his
family be allowed to live in a house included
in the usufruct, the court may grant this
petition, after due consideration of the facts
of the case.

The same rule shall be observed with respect

to implements, tools and other movable
property necessary for an industry or
vocation in which he is engaged.

If the owner does not wish that certain

articles be sold because of their artistic
worth or because they have a sentimental
value, he may demand their delivery to him
 129

upon his giving security for the payment of

the legal interest on their appraised value.
(495)

Art. 588. After the security has been given

by the usufructuary, he shall have a right to
all the proceeds and benefits from the day on
which, in accordance with the title
constituting the usufruct, he should have
commenced to receive them. (496)

Art. 589. The usufructuary shall take care of

the things given in usufruct as a good father
of a family. (497)

Art. 590. A usufructuary who alienates or

leases his right of usufruct shall answer for
any damage which the things in usufruct
may suffer through the fault or negligence of
the person who substitutes him. (498)

Art. 591. If the usufruct be constituted on a

flock or herd of livestock, the usufructuary
shall be obliged to replace with the young
thereof the animals that die each year from
natural causes, or are lost due to the rapacity
of beasts of prey.

If the animals on which the usufruct is

constituted should all perish, without the
fault of the usufructuary, on account of some
contagious disease or any other uncommon
event, the usufructuary shall fulfill his
obligation by delivering to the owner the
remains which may have been saved from
the misfortune.

Should the herd or flock perish in part, also

by accident and without the fault of the
usufructuary, the usufruct shall continue on
the part saved.

Should the usufruct be on sterile animals, it

shall be considered, with respect to its
effects, as though constituted on fungible
things. (499a)

Art. 592. The usufructuary is obliged to

make the ordinary repairs needed by the
thing given in usufruct.
 130

By ordinary repairs are understood such as

are required by the wear and tear due to the
natural use of the thing and are
indispensable for its preservation. Should
the usufructuary fail to make them after
demand by the owner, the latter may make
them at the expense of the usufructuary.
(500)

Art. 593. Extraordinary repairs shall be at

the expense of the owner. The usufructuary
is obliged to notify the owner when the need
for such repairs is urgent. (501)

Art. 594. If the owner should make the

extraordinary repairs, he shall have a right to
demand of the usufructuary the legal interest
on the amount expended for the time that the
usufruct lasts.

Should he not make them when they are

indispensable for the preservation of the
thing, the usufructuary may make them; but
he shall have a right to demand of the
owner, at the termination of the usufruct, the
increase in value which the immovable may
have acquired by reason of the repairs.
(502a)

Art. 595. The owner may construct any

works and make any improvements of which
the immovable in usufruct is susceptible, or
make new plantings thereon if it be rural,
provided that such acts do not cause a
diminution in the value of the usufruct or
prejudice the right of the usufructuary. (503)

Art. 596. The payment of annual charges

and taxes and of those considered as a lien
on the fruits, shall be at the expense of the
usufructuary for all the time that the usufruct
lasts. (504)

Art. 597. The taxes which, during the

usufruct, may be imposed directly on the
capital, shall be at the expense of the owner.

If the latter has paid them, the usufructuary

shall pay him the proper interest on the sums
which may have been paid in that character;
and, if the said sums have been advanced by
 131

the usufructuary, he shall recover the

amount thereof at the termination of the
usufruct. (505)

Art. 598. If the usufruct be constituted on

the whole of a patrimony, and if at the time
of its constitution the owner has debts, the
provisions of Articles 758 and 759 relating
to donations shall be applied, both with
respect to the maintenance of the usufruct
and to the obligation of the usufructuary to
pay such debts.

The same rule shall be applied in case the

owner is obliged, at the time the usufruct is
constituted, to make periodical payments,
even if there should be no known capital.
(506)

Art. 599. The usufructuary may claim any

matured credits which form a part of the
usufruct if he has given or gives the proper
security. If he has been excused from giving
security or has been able to give it, or if that
given is not sufficient, he shall need the
authorization of the owner, or of the court in
default thereof, to collect such credits.

The usufructuary who has given security

may use the capital he has collected in any
manner he may deem proper. The
usufructuary who has not given security
shall invest the said capital at interest upon
agreement with the owner; in default of such
agreement, with judicial authorization; and,
in every case, with security sufficient to
preserve the integrity of the capital in
usufruct. (507)

Art. 600. The usufructuary of a mortgaged

immovable shall not be obliged to pay the
debt for the security of which the mortgage
was constituted.

Should the immovable be attached or sold

judicially for the payment of the debt, the
owner shall be liable to the usufructuary for
whatever the latter may lose by reason
thereof. (509)
 132

Art. 601. The usufructuary shall be obliged

to notify the owner of any act of a third
person, of which he may have knowledge,
that may be prejudicial to the rights of
ownership, and he shall be liable should he
not do so, for damages, as if they had been
caused through his own fault. (511)

Art. 602. The expenses, costs and liabilities

in suits brought with regard to the usufruct
shall be borne by the usufructuary. (512)

CHAPTER 4
EXTINGUISHMENT OF USUFRUCT

Art. 603. Usufruct is extinguished:

(1) By the death of the usufructuary,
unless a contrary intention clearly
appears;

(2) By the expiration of the period for

which it was constituted, or by the
fulfillment of any resolutory condition
provided in the title creating the
usufruct;

(3) By merger of the usufruct and

ownership in the same person;

(4) By renunciation of the

usufructuary;

(5) By the total loss of the thing in

usufruct;

(6) By the termination of the right of

the person constituting the usufruct;

(7) By prescription. (513a)

Art. 604. If the thing given in usufruct

should be lost only in part, the right shall
continue on the remaining part. (514)

Art. 605. Usufruct cannot be constituted in

favor of a town, corporation, or association
for more than fifty years. If it has been
constituted, and before the expiration of
such period the town is abandoned, or the
corporation or association is dissolved, the
 133

usufruct shall be extinguished by reason

thereof. (515a)

Art. 606. A usufruct granted for the time that

may elapse before a third person attains a
certain age, shall subsist for the number of
years specified, even if the third person
should die before the period expires, unless
such usufruct has been expressly granted
only in consideration of the existence of
such person. (516)

Art. 607. If the usufruct is constituted on

immovable property of which a building
forms part, and the latter should be
destroyed in any manner whatsoever, the
usufructuary shall have a right to make use
of the land and the materials.

The same rule shall be applied if the

usufruct is constituted on a building only
and the same should be destroyed. But in
such a case, if the owner should wish to
construct another building, he shall have a
right to occupy the land and to make use of
the materials, being obliged to pay to the
usufructuary, during the continuance of the
usufruct, the interest upon the sum
equivalent to the value of the land and of the
materials. (517)

Art. 608. If the usufructuary shares with the

owner the insurance of the tenement given
in usufruct, the former shall, in case of loss,
continue in the enjoyment of the new
building, should one be constructed, or shall
receive the interest on the insurance
indemnity if the owner does not wish to
rebuild.

Should the usufructuary have refused to

contribute to the insurance, the owner
insuring the tenement alone, the latter shall
receive the full amount of the insurance
indemnity in case of loss, saving always the
right granted to the usufructuary in the
preceding article. (518a)

Art. 609. Should the thing in usufruct be

expropriated for public use, the owner shall
be obliged either to replace it with another
 134

thing of the same value and of similar

conditions, or to pay the usufructuary the
legal interest on the amount of the indemnity
for the whole period of the usufruct. If the
owner chooses the latter alternative, he shall
give security for the payment of the interest.
(519)

Art. 610. A usufruct is not extinguished by

bad use of the thing in usufruct; but if the
abuse should cause considerable injury to
the owner, the latter may demand that the
thing be delivered to him, binding himself to
pay annually to the usufructuary the net
proceeds of the same, after deducting the
expenses and the compensation which may
be allowed him for its administration. (520)

Art. 611. A usufruct constituted in favor of

several persons living at the time of its
constitution shall not be extinguished until
death of the last survivor. (521)

Art. 612. Upon the termination of the

usufruct, the thing in usufruct shall be
delivered to the owner, without prejudice to
the right of retention pertaining to the
usufructuary or his heirs for taxes and
extraordinary expenses which should be
reimbursed. After the delivery has been
made, the security or mortgage shall be
cancelled. (522a)

Title VII. - EASEMENTS OF

SERVITUDES

CHAPTER 1
EASEMENTS IN GENERAL

SECTION 1. - Different Kinds of Easements

Art. 613. An easement or servitude is an

encumbrance imposed upon an immovable
for the benefit of another immovable
belonging to a different owner.

The immovable in favor of which the

easement is established is called the
dominant estate; that which is subject
thereto, the servient estate. (530)
 135

Art. 614. Servitudes may also be established

for the benefit of a community, or of one or
more persons to whom the encumbered
estate does not belong. (531)

Art. 615. Easements may be continuous or

discontinuous, apparent or nonapparent.

Continuous easements are those the use of

which is or may be incessant, without the
intervention of any act of man.

Discontinuous easements are those which

are used at intervals and depend upon the
acts of man.

Apparent easements are those which are

made known and are continually kept in
view by external signs that reveal the use
and enjoyment of the same.

Nonapparent easements are those which

show no external indication of their
existence. (532)

Art. 616. Easements are also positive or

negative.

A positive easement is one which imposes

upon the owner of the servient estate the
obligation of allowing something to be done
or of doing it himself, and a negative
easement, that which prohibits the owner of
the servient estate from doing something
which he could lawfully do if the easement
did not exist. (533)

Art. 617. Easements are inseparable from

the estate to which they actively or passively
belong. (534)

Art. 618. Easements are indivisible. If the

servient estate is divided between two or
more persons, the easement is not modified,
and each of them must bear it on the part
which corresponds to him.

If it is the dominant estate that is divided

between two or more persons, each of them
may use the easement in its entirety, without
changing the place of its use, or making it
more burdensome in any other way. (535)
 136

Art. 619. Easements are established either

by law or by the will of the owners. The
former are called legal and the latter
voluntary easements. (536)

SECTION 2. - Modes of Acquiring

Easements

Art. 620. Continuous and apparent

easements are acquired either by virtue of a
title or by prescription of ten years. (537a)

Art. 621. In order to acquire by prescription

the easements referred to in the preceding
article, the time of possession shall be
computed thus: in positive easements, from
the day on which the owner of the dominant
estate, or the person who may have made
use of the easement, commenced to exercise
it upon the servient estate; and in negative
easements, from the day on which the owner
of the dominant estate forbade, by an
instrument acknowledged before a notary
public, the owner of the servient estate, from
executing an act which would be lawful
without the easement. (538a)

Art. 622. Continuous nonapparent

easements, and discontinuous ones, whether
apparent or not, may be acquired only by
virtue of a title. (539)

Art. 623. The absence of a document or

proof showing the origin of an easement
which cannot be acquired by prescription
may be cured by a deed of recognition by
the owner of the servient estate or by a final
judgment. (540a)

Art. 624. The existence of an apparent sign

of easement between two estates, established
or maintained by the owner of both, shall be
considered, should either of them be
alienated, as a title in order that the
easement may continue actively and
passively, unless, at the time the ownership
of the two estates is divided, the contrary
should be provided in the title of
conveyance of either of them, or the sign
aforesaid should be removed before the
 137

execution of the deed. This provision shall

also apply in case of the division of a thing
owned in common by two or more persons.
(541a)

Art. 625. Upon the establishment of an

easement, all the rights necessary for its use
are considered granted. (542)

Art. 626. The owner of the dominant estate

cannot use the easement except for the
benefit of the immovable originally
contemplated. Neither can he exercise the
easement in any other manner than that
previously established. (n)

SECTION 3. - Rights and Obligations

of the Owners of the Dominant and Servient
Estates

Art. 627. The owner of the dominant estate

may make, at his own expense, on the
servient state any works necessary for the
use and preservation of the servitude, but
without altering it or rendering it more
burdensome.

For this purpose he shall notify the owner of

the servient estate, and shall choose the most
convenient time and manner so as to cause
the least inconvenience to the owner of the
servient estate. (543a)

Art. 628. Should there be several dominant

estates, the owners of all of them shall be
obliged to contribute to the expenses
referred to in the preceding article, in
proportion to the benefits which each may
derive from the work. Any one who does not
wish to contribute may exempt himself by
renouncing the easement for the benefit of
the others.

If the owner of the servient estate should

make use of the easement in any manner
whatsoever, he shall also be obliged to
contribute to the expenses in the proportion
stated, saving an agreement to the contrary.
(544)
 138

Art. 629. The owner of the servient estate

cannot impair, in any manner whatsoever,
the use of the servitude.

Nevertheless, if by reason of the place

originally assigned, or of the manner
established for the use of the easement, the
same should become very inconvenient to
the owner of the servient estate, or should
prevent him from making any important
works, repairs or improvements thereon, it
may be changed at his expense, provided he
offers another place or manner equally
convenient and in such a way that no injury
is caused thereby to the owner of the
dominant estate or to those who may have a
right to the use of the easement. (545)

Art. 630. The owner of the servient estate

retains the ownership of the portion on
which the easement is established, and may
use the same in such a manner as not to
affect the exercise of the easement. (n)

SECTION 4. - Modes of Extinguishment of

Easements

Art. 631. Easements are extinguished:

(1) By merger in the same person of

the ownership of the dominant and
servient estates;

(2) By nonuser for ten years; with

respect to discontinuous easements,
this period shall be computed from
the day on which they ceased to be
used; and, with respect to continuous
easements, from the day on which an
act contrary to the same took place;

(3) When either or both of the estates

fall into such condition that the
easement cannot be used; but it shall
revive if the subsequent condition of
the estates or either of them should
again permit its use, unless when the
use becomes possible, sufficient time
for prescription has elapsed, in
 139

accordance with the provisions of the

preceding number;

(4) By the expiration of the term or

the fulfillment of the condition, if the
easement is temporary or conditional;

(5) By the renunciation of the owner

of the dominant estate;

(6) By the redemption agreed upon

between the owners of the dominant
and servient estates. (546a)

Art. 632. The form or manner of using the

easement may prescribe as the easement
itself, and in the same way. (547a)

Art. 633. If the dominant estate belongs to

several persons in common, the use of the
easement by any one of them prevents
prescription with respect to the others. (548)

CHAPTER 2
LEGAL EASEMENTS

SECTION 1. - General Provisions

Art. 634. Easements imposed by law have

for their object either public use or the
interest of private persons. (549)

Art. 635. All matters concerning easements

established for public or communal use shall
be governed by the special laws and
regulations relating thereto, and, in the
absence thereof, by the provisions of this
Title. (550)

Art. 636. Easements established by law in

the interest of private persons or for private
use shall be governed by the provisions of
this Title, without prejudice to the provisions
of general or local laws and ordinances for
the general welfare.

These easements may be modified by

agreement of the interested parties,
whenever the law does not prohibit it or no
injury is suffered by a third person. (551a)
 140

SECTION 2. - Easements Relating to Waters

Art. 637. Lower estates are obliged to

receive the waters which naturally and
without the intervention of man descend
from the higher estates, as well as the stones
or earth which they carry with them.

The owner of the lower estate cannot

construct works which will impede this
easement; neither can the owner of the
higher estate make works which will
increase the burden. (552)

Art. 638. The banks of rivers and streams,

even in case they are of private ownership,
are subject throughout their entire length and
within a zone of three meters along their
margins, to the easement of public use in the
general interest of navigation, floatage,
fishing and salvage.

Estates adjoining the banks of navigable or

floatable rivers are, furthermore, subject to
the easement of towpath for the exclusive
service of river navigation and floatage.

If it be necessary for such purpose to occupy

lands of private ownership, the proper
indemnity shall first be paid. (553a)

Art. 639. Whenever for the diversion or

taking of water from a river or brook, or for
the use of any other continuous or
discontinuous stream, it should be necessary
to build a dam, and the person who is to
construct it is not the owner of the banks, or
lands which must support it, he may
establish the easement of abutment of a dam,
after payment of the proper indemnity. (554)

Art. 640. Compulsory easements for

drawing water or for watering animals can
be imposed only for reasons of public use in
favor of a town or village, after payment of
the proper indemnity. (555)

Art. 641. Easements for drawing water and

for watering animals carry with them the
obligation of the owners of the servient
estates to allow passage to persons and
 141

animals to the place where such easements

are to be used, and the indemnity shall
include this service. (556)

Art. 642. Any person who may wish to use

upon his own estate any water of which he
can dispose shall have the right to make it
flow through the intervening estates, with
the obligation to indemnify their owners, as
well as the owners of the lower estates upon
which the waters may filter or descend.
(557)

Art. 643. One desiring to make use of the

right granted in the preceding article is
obliged:

(1) To prove that he can dispose of the

water and that it is sufficient for the
use for which it is intended;

(2) To show that the proposed right of

way is the most convenient and the
least onerous to third persons;

(3) To indemnify the owner of the

servient estate in the manner
determined by the laws and
regulations. (558)

Art. 644. The easement of aqueduct for

private interest cannot be imposed on
buildings, courtyards, annexes, or outhouses,
or on orchards or gardens already existing.
(559)

Art. 645. The easement of aqueduct does not

prevent the owner of the servient estate from
closing or fencing it, or from building over
the aqueduct in such manner as not to cause
the latter any damage, or render necessary
repairs and cleanings impossible. (560)

Art. 646. For legal purposes, the easement of

aqueduct shall be considered as continuous
and apparent, even though the flow of the
water may not be continuous, or its use
depends upon the needs of the dominant
estate, or upon a schedule of alternate days
or hours. (561)
 142

Art. 647. One who for the purpose of

irrigating or improving his estate, has to
construct a stop lock or sluice gate in the
bed of the stream from which the water is to
be taken, may demand that the owners of the
banks permit its construction, after payment
of damages, including those caused by the
new easement to such owners and to the
other irrigators. (562)

Art. 648. The establishment, extent, form

and conditions of the servitudes of waters, to
which this section refers, shall be governed
by the special laws relating thereto insofar
as no provision therefor is made in this
Code. (563a)

SECTION 3. - Easement of Right of Way

Art. 649. The owner, or any person who by

virtue of a real right may cultivate or use
any immovable, which is surrounded by
other immovables pertaining to other
persons and without adequate outlet to a
public highway, is entitled to demand a right
of way through the neighboring estates, after
payment of the proper indemnity.

Should this easement be established in such

a manner that its use may be continuous for
all the needs of the dominant estate,
establishing a permanent passage, the
indemnity shall consist of the value of the
land occupied and the amount of the damage
caused to the servient estate.

In case the right of way is limited to the

necessary passage for the cultivation of the
estate surrounded by others and for the
gathering of its crops through the servient
estate without a permanent way, the
indemnity shall consist in the payment of the
damage caused by such encumbrance.

This easement is not compulsory if the

isolation of the immovable is due to the
proprietor's own acts. (564a)

Art. 650. The easement of right of way shall

be established at the point least prejudicial
 143

to the servient estate, and, insofar as

consistent with this rule, where the distance
from the dominant estate to a public
highway may be the shortest. (565)

Art. 651. The width of the easement of right

of way shall be that which is sufficient for
the needs of the dominant estate, and may
accordingly be changed from time to time.
(566a)

Art. 652. Whenever a piece of land acquired

by sale, exchange or partition, is surrounded
by other estates of the vendor, exchanger, or
co-owner, he shall be obliged to grant a right
of way without indemnity.

In case of a simple donation, the donor shall

be indemnified by the donee for the
establishment of the right of way. (567a)

Art. 653. In the case of the preceding article,

if it is the land of the grantor that becomes
isolated, he may demand a right of way after
paying a indemnity. However, the donor
shall not be liable for indemnity. (n)

Art. 654. If the right of way is permanent,

the necessary repairs shall be made by the
owner of the dominant estate. A
proportionate share of the taxes shall be
reimbursed by said owner to the proprietor
of the servient estate. (n)

Art. 655. If the right of way granted to a

surrounded estate ceases to be necessary
because its owner has joined it to another
abutting on a public road, the owner of the
servient estate may demand that the
easement be extinguished, returning what he
may have received by way of indemnity.
The interest on the indemnity shall be
deemed to be in payment of rent for the use
of the easement.

The same rule shall be applied in case a new

road is opened giving access to the isolated
estate.

In both cases, the public highway must

substantially meet the needs of the dominant
 144

estate in order that the easement may be

extinguished. (568a)

Art. 656. If it be indispensable for the

construction, repair, improvement, alteration
or beautification of a building, to carry
materials through the estate of another, or to
raise therein scaffolding or other objects
necessary for the work, the owner of such
estate shall be obliged to permit the act, after
receiving payment of the proper indemnity
for the damage caused him. (569a)

Art. 657. Easements of the right of way for

the passage of livestock known as animal
path, animal trail or any other, and those for
watering places, resting places and animal
folds, shall be governed by the ordinances
and regulations relating thereto, and, in the
absence thereof, by the usages and customs
of the place.

Without prejudice to rights legally acquired,

the animal path shall not exceed in any case
the width of 75 meters, and the animal trail
that of 37 meters and 50 centimeters.

Whenever it is necessary to establish a

compulsory easement of the right of way or
for a watering place for animals, the
provisions of this Section and those of
Articles 640 and 641 shall be observed. In
this case the width shall not exceed 10
meters. (570a)

SECTION 4. - Easement of Party Wall

Art. 658. The easement of party wall shall

be governed by the provisions of this Title,
by the local ordinances and customs insofar
as they do not conflict with the same, and by
the rules of co-ownership. (571a)

Art. 659. The existence of an easement of

party wall is presumed, unless there is a title,
or exterior sign, or proof to the contrary:

(1) In dividing walls of adjoining

buildings up to the point of common
elevation;
 145

(2) In dividing walls of gardens or

yards situated in cities, towns, or in
rural communities;

(3) In fences, walls and live hedges

dividing rural lands. (572)

Art. 660. It is understood that there is an

exterior sign, contrary to the easement of
party wall:

(1) Whenever in the dividing wall of

buildings there is a window or
opening;

(2) Whenever the dividing wall is, on

one side, straight and plumb on all its
facement, and on the other, it has
similar conditions on the upper part,
but the lower part slants or projects
outward;

(3) Whenever the entire wall is built

within the boundaries of one of the
estates;

(4) Whenever the dividing wall bears

the burden of the binding beams,
floors and roof frame of one of the
buildings, but not those of the others;

(5) Whenever the dividing wall

between courtyards, gardens, and
tenements is constructed in such a
way that the coping sheds the water
upon only one of the estates;

(6) Whenever the dividing wall, being

built of masonry, has stepping stones,
which at certain intervals project from
the surface on one side only, but not
on the other;

(7) Whenever lands inclosed by

fences or live hedges adjoin others
which are not inclosed.

In all these cases, the ownership of the

walls, fences or hedges shall be deemed to
belong exclusively to the owner of the
property or tenement which has in its favor
 146

the presumption based on any one of these

signs. (573)

Art. 661. Ditches or drains opened between

two estates are also presumed as common to
both, if there is no title or sign showing the
contrary.

There is a sign contrary to the part-

ownership whenever the earth or dirt
removed to open the ditch or to clean it is
only on one side thereof, in which case the
ownership of the ditch shall belong
exclusively to the owner of the land having
this exterior sign in its favor. (574)

Art. 662. The cost of repairs and

construction of party walls and the
maintenance of fences, live hedges, ditches,
and drains owned in common, shall be borne
by all the owners of the lands or tenements
having the party wall in their favor, in
proportion to the right of each.

Nevertheless, any owner may exempt

himself from contributing to this charge by
renouncing his part-ownership, except when
the party wall supports a building belonging
to him. (575)

Art. 663. If the owner of a building,

supported by a party wall desires to
demolish the building, he may also renounce
his part-ownership of the wall, but the cost
of all repairs and work necessary to prevent
any damage which the demolition may cause
to the party wall, on this occasion only, shall
be borne by him. (576)

Art. 664. Every owner may increase the

height of the party wall, doing at his own
expense and paying for any damage which
may be caused by the work, even though
such damage be temporary.

The expenses of maintaining the wall in the

part newly raised or deepened at its
foundation shall also be paid for by him;
and, in addition, the indemnity for the
increased expenses which may be necessary
for the preservation of the party wall by
 147

reason of the greater height or depth which

has been given it.

If the party wall cannot bear the increased

height, the owner desiring to raise it shall be
obliged to reconstruct it at his own expense
and, if for this purpose it be necessary to
make it thicker, he shall give the space
required from his own land. (577)

Art. 665. The other owners who have not

contributed in giving increased height, depth
or thickness to the wall may, nevertheless,
acquire the right of part-ownership therein,
by paying proportionally the value of the
work at the time of the acquisition and of the
land used for its increased thickness. (578a)

Art. 666. Every part-owner of a party wall

may use it in proportion to the right he may
have in the co-ownership, without
interfering with the common and respective
uses by the other co-owners. (579a)

SECTION 5. - Easement of Light and View

Art. 667. No part-owner may, without the

consent of the others, open through the party
wall any window or aperture of any kind.
(580)

Art. 668. The period of prescription for the

acquisition of an easement of light and view
shall be counted:

(1) From the time of the opening of

the window, if it is through a party
wall; or

(2) From the time of the formal

prohibition upon the proprietor of the
adjoining land or tenement, if the
window is through a wall on the
dominant estate. (n)

Art. 669. When the distances in Article 670

are not observed, the owner of a wall which
is not party wall, adjoining a tenement or
piece of land belonging to another, can make
in it openings to admit light at the height of
the ceiling joints or immediately under the
 148

ceiling, and of the size of thirty centimeters

square, and, in every case, with an iron
grating imbedded in the wall and with a wire
screen.

Nevertheless, the owner of the tenement or

property adjoining the wall in which the
openings are made can close them should he
acquire part-ownership thereof, if there be
no stipulation to the contrary.

He can also obstruct them by constructing a

building on his land or by raising a wall
thereon contiguous to that having such
openings, unless an easement of light has
been acquired. (581a)

Art. 670. No windows, apertures, balconies,

or other similar projections which afford a
direct view upon or towards an adjoining
land or tenement can be made, without
leaving a distance of two meters between the
wall in which they are made and such
contiguous property.

Neither can side or oblique views upon or

towards such conterminous property be had,
unless there be a distance of sixty
centimeters.

The nonobservance of these distances does

not give rise to prescription. (582a)

Art. 671. The distance referred to in the

preceding article shall be measured in cases
of direct views from the outer line of the
wall when the openings do not project, from
the outer line of the latter when they do, and
in cases of oblique view from the dividing
line between the two properties. (583)

Art. 672. The provisions of Article 670 are

not applicable to buildings separated by a
public way or alley, which is not less than
three meters wide, subject to special
regulations and local ordinances. (584a)

Art. 673. Whenever by any title a right has

been acquired to have direct views,
balconies or belvederes overlooking an
adjoining property, the owner of the servient
estate cannot build thereon at less than a
 149

distance of three meters to be measured in

the manner provided in Article 671. Any
stipulation permitting distances less than
those prescribed in Article 670 is void.
(585a)

SECTION 6. - Drainage of Buildings

Art. 674. The owner of a building shall be

obliged to construct its roof or covering in
such manner that the rain water shall fall on
his own land or on a street or public place,
and not on the land of his neighbor, even
though the adjacent land may belong to two
or more persons, one of whom is the owner
of the roof. Even if it should fall on his own
land, the owner shall be obliged to collect
the water in such a way as not to cause
damage to the adjacent land or tenement.
(586a)

Art. 675. The owner of a tenement or a piece

of land, subject to the easement of receiving
water falling from roofs, may build in such
manner as to receive the water upon his own
roof or give it another outlet in accordance
with local ordinances or customs, and in
such a way as not to cause any nuisance or
damage whatever to the dominant estate.
(587)

Art. 676. Whenever the yard or court of a

house is surrounded by other houses, and it
is not possible to give an outlet through the
house itself to the rain water collected
thereon, the establishment of an easement of
drainage can be demanded, giving an outlet
to the water at the point of the contiguous
lands or tenements where its egress may be
easiest, and establishing a conduit for the
drainage in such manner as to cause the least
damage to the servient estate, after payment
of the property indemnity. (583)

SECTION 7. - Intermediate Distances

and Works for Certain Constructions and
Plantings

Art. 677. No constructions can be built or

 150

plantings made near fortified places or

fortresses without compliance with the
conditions required in special laws,
ordinances, and regulations relating thereto.
(589)

Art. 678. No person shall build any

aqueduct, well, sewer, furnace, forge,
chimney, stable, depository of corrosive
substances, machinery, or factory which by
reason of its nature or products is dangerous
or noxious, without observing the distances
prescribed by the regulations and customs of
the place, and without making the necessary
protective works, subject, in regard to the
manner thereof, to the conditions prescribed
by such regulations. These prohibitions
cannot be altered or renounced by
stipulation on the part of the adjoining
proprietors.

In the absence of regulations, such

precautions shall be taken as may be
considered necessary, in order to avoid any
damage to the neighboring lands or
tenements. (590a)

Art. 679. No trees shall be planted near a

tenement or piece of land belonging to
another except at the distance authorized by
the ordinances or customs of the place, and,
in the absence thereof, at a distance of at
least two meters from the dividing line of
the estates if tall trees are planted and at a
distance of at least fifty centimeters if shrubs
or small trees are planted.

Every landowner shall have the right to

demand that trees hereafter planted at a
shorter distance from his land or tenement
be uprooted.

The provisions of this article also apply to

trees which have grown spontaneously.
(591a)

Art. 680. If the branches of any tree should

extend over a neighboring estate, tenement,
garden or yard, the owner of the latter shall
have the right to demand that they be cut off
insofar as they may spread over his property,
 151

and, if it be the roots of a neighboring tree

which should penetrate into the land of
another, the latter may cut them off himself
within his property. (592)

Art. 681. Fruits naturally falling upon

adjacent land belong to the owner of said
land. (n)

SECTION 8. - Easement Against Nuisance

(n)

Art. 682. Every building or piece of land is

subject to the easement which prohibits the
proprietor or possessor from committing
nuisance through noise, jarring, offensive
odor, smoke, heat, dust, water, glare and
other causes.

Art. 683. Subject to zoning, health, police

and other laws and regulations, factories and
shops may be maintained provided the least
possible annoyance is caused to the
neighborhood.

SECTION 9. - Lateral and Subjacent

Support (n)

Sec. 684. No proprietor shall make such

excavations upon his land as to deprive any
adjacent land or building of sufficient lateral
or subjacent support.

Art. 685. Any stipulation or testamentary

provision allowing excavations that cause
danger to an adjacent land or building shall
be void.

Art. 686. The legal easement of lateral and

subjacent support is not only for buildings
standing at the time the excavations are
made but also for constructions that may be
erected.

Art. 687. Any proprietor intending to make

any excavation contemplated in the three
preceding articles shall notify all owners of
adjacent lands.
 152

CHAPTER 3
VOLUNTARY EASEMENTS

Art. 688. Every owner of a tenement or

piece of land may establish thereon the
easements which he may deem suitable, and
in the manner and form which he may deem
best, provided he does not contravene the
laws, public policy or public order. (594)

Art. 689. The owner of a tenement or piece

of land, the usufruct of which belongs to
another, may impose thereon, without the
consent of the usufructuary, any servitudes
which will not injure the right of usufruct.
(595)

Art. 690. Whenever the naked ownership of

a tenement or piece of land belongs to one
person and the beneficial ownership to
another, no perpetual voluntary easement
may be established thereon without the
consent of both owners. (596)

Art. 691. In order to impose an easement on

an undivided tenement, or piece of land, the
consent of all the co-owners shall be
required.

The consent given by some only, must be

held in abeyance until the last one of all the
co-owners shall have expressed his
conformity.

But the consent given by one of the co-

owners separately from the others shall bind
the grantor and his successors not to prevent
the exercise of the right granted. (597a)

Art. 692. The title and, in a proper case, the

possession of an easement acquired by
prescription shall determine the rights of the
dominant estate and the obligations of the
servient estate. In default thereof, the
easement shall be governed by such
provisions of this Title as are applicable
thereto. (598)

Art. 693. If the owner of the servient estate

should have bound himself, upon the
establishment of the easement, to bear the
 153

cost of the work required for the use and

preservation thereof, he may free himself
from this obligation by renouncing his
property to the owner of the dominant estate.
(599)

Title VIII. - NUISANCE (n)

Art. 694. A nuisance is any act, omission,

establishment, business, condition of
property, or anything else which:

(1) Injures or endangers the health or

safety of others; or

(2) Annoys or offends the senses; or

(3) Shocks, defies or disregards

decency or morality; or

(4) Obstructs or interferes with the

free passage of any public highway or
street, or any body of water; or

(5) Hinders or impairs the use of

property.

Art. 695. Nuisance is either public or

private. A public nuisance affects a
community or neighborhood or any
considerable number of persons, although
the extent of the annoyance, danger or
damage upon individuals may be unequal. A
private nuisance is one that is not included
in the foregoing definition.

Art. 696. Every successive owner or

possessor of property who fails or refuses to
abate a nuisance in that property started by a
former owner or possessor is liable therefor
in the same manner as the one who created
it.

Art. 697. The abatement of a nuisance does

not preclude the right of any person injured
to recover damages for its past existence.

Art. 698. Lapse of time cannot legalize any

nuisance, whether public or private.
 154

Art. 699. The remedies against a public

nuisance are:

(1) A prosecution under the Penal

Code or any local ordinance: or

(2) A civil action; or

(3) Abatement, without judicial

proceedings.

Art. 700. The district health officer shall

take care that one or all of the remedies
against a public nuisance are availed of.

Art. 701. If a civil action is brought by

reason of the maintenance of a public
nuisance, such action shall be commenced
by the city or municipal mayor.

Art. 702. The district health officer shall

determine whether or not abatement, without
judicial proceedings, is the best remedy
against a public nuisance.

Art. 703. A private person may file an action

on account of a public nuisance, if it is
specially injurious to himself.

Art. 704. Any private person may abate a

public nuisance which is specially injurious
to him by removing, or if necessary, by
destroying the thing which constitutes the
same, without committing a breach of the
peace, or doing unnecessary injury. But it is
necessary:

(1) That demand be first made upon

the owner or possessor of the property
to abate the nuisance;

(2) That such demand has been

rejected;

(3) That the abatement be approved

by the district health officer and
executed with the assistance of the
local police; and

(4) That the value of the destruction

does not exceed three thousand pesos.
 155

Art. 705. The remedies against a private

nuisance are:

(1) A civil action; or

(2) Abatement, without judicial

proceedings.

Art. 706. Any person injured by a private

nuisance may abate it by removing, or if
necessary, by destroying the thing which
constitutes the nuisance, without committing
a breach of the peace or doing unnecessary
injury. However, it is indispensable that the
procedure for extrajudicial abatement of a
public nuisance by a private person be
followed.

Art. 707. A private person or a public

official extrajudicially abating a nuisance
shall be liable for damages:

(1) If he causes unnecessary injury; or

(2) If an alleged nuisance is later

declared by the courts to be not a real
nuisance.

Title IX. - REGISTRY OF PROPERTY

Art. 708. The Registry of Property has for its

object the inscription or annotation of acts
and contracts relating to the ownership and
other rights over immovable property. (605)

Art. 709. The titles of ownership, or of other

rights over immovable property, which are
not duly inscribed or annotated in the
Registry of Property shall not prejudice third
persons. (606)

Art. 710. The books in the Registry of

Property shall be public for those who have
a known interest in ascertaining the status of
the immovables or real rights annotated or
inscribed therein. (607)

Art. 711. For determining what titles are

subject to inscription or annotation, as well
as the form, effects, and cancellation of
inscriptions and annotations, the manner of
keeping the books in the Registry, and the
 156

value of the entries contained in said books,

the provisions of the Mortgage Law, the
Land Registration Act, and other special
laws shall govern. (608a)

BOOK III

DIFFERENT MODES OF ACQUIRING

OWNERSHIP

PRELIMINARY PROVISION

Art. 712. Ownership is acquired by

occupation and by intellectual creation.

Ownership and other real rights over

property are acquired and transmitted by
law, by donation, by estate and intestate
succession, and in consequence of certain
contracts, by tradition.

They may also be acquired by means of

prescription. (609a)

Title I. - OCCUPATION

Art. 713. Things appropriable by nature

which are without an owner, such as animals
that are the object of hunting and fishing,
hidden treasure and abandoned movables,
are acquired by occupation. (610)

Art. 714. The ownership of a piece of land

cannot be acquired by occupation. (n)

Art. 715. The right to hunt and to fish is

regulated by special laws. (611)

Art. 716. The owner of a swarm of bees

shall have a right to pursue them to another's
land, indemnifying the possessor of the
latter for the damage. If the owner has not
pursued the swarm, or ceases to do so within
two consecutive days, the possessor of the
land may occupy or retain the same. The
owner of domesticated animals may also
claim them within twenty days to be counted
from their occupation by another person.
This period having expired, they shall
 157

pertain to him who has caught and kept

them. (612a)

Art. 717. Pigeons and fish which from their

respective breeding places pass to another
pertaining to a different owner shall belong
to the latter, provided they have not been
enticed by some article of fraud. (613a)

Art. 718. He who by chance discovers

hidden treasure in another's property shall
have the right granted him in article 438 of
this Code. (614)

Art. 719. Whoever finds a movable, which is

not treasure, must return it to its previous
possessor. If the latter is unknown, the finder
shall immediately deposit it with the mayor
of the city or municipality where the finding
has taken place.

The finding shall be publicly announced by

the mayor for two consecutive weeks in the
way he deems best.

If the movable cannot be kept without

deterioration, or without expenses which
considerably diminish its value, it shall be
sold at public auction eight days after the
publication.

Six months from the publication having

elapsed without the owner having appeared,
the thing found, or its value, shall be
awarded to the finder. The finder and the
owner shall be obliged, as the case may be,
to reimburse the expenses. (615a)

Art. 720. If the owner should appear in time,

he shall be obliged to pay, as a reward to the
finder, one-tenth of the sum or of the price
of the thing found. (616a)

Title II. - INTELLECTUAL CREATION

Art. 721. By intellectual creation, the

following persons acquire ownership:
(1) The author with regard to his
literary, dramatic, historical, legal,
philosophical, scientific or other
work;
 158

(2) The composer; as to his musical

composition;

(3) The painter, sculptor, or other

artist, with respect to the product of
his art;

(4) The scientist or technologist or

any other person with regard to his
discovery or invention. (n)

Art. 722. The author and the composer,

mentioned in Nos. 1 and 2 of the preceding
article, shall have the ownership of their
creations even before the publication of the
same. Once their works are published, their
rights are governed by the Copyright laws.

The painter, sculptor or other artist shall

have dominion over the product of his art
even before it is copyrighted.

The scientist or technologist has the

ownership of his discovery or invention
even before it is patented. (n)

Art. 723. Letters and other private

communications in writing are owned by the
person to whom they are addressed and
delivered, but they cannot be published or
disseminated without the consent of the
writer or his heirs. However, the court may
authorize their publication or dissemination
if the public good or the interest of justice so
requires. (n)

Art. 724. Special laws govern copyright and

patent. (429a)

Title III. - DONATION

CHAPTER 1
NATURE OF DONATIONS

Art. 725. Donation is an act of liberality

whereby a person disposes gratuitously of a
thing or right in favor of another, who
accepts it. (618a)

Art. 726. When a person gives to another a

thing or right on account of the latter's
 159

merits or of the services rendered by him to

the donor, provided they do not constitute a
demandable debt, or when the gift imposes
upon the donee a burden which is less than
the value of the thing given, there is also a
donation. (619)

Art. 727. Illegal or impossible conditions in

simple and remuneratory donations shall be
considered as not imposed. (n)

Art. 728. Donations which are to take effect

upon the death of the donor partake of the
nature of testamentary provisions, and shall
be governed by the rules established in the
Title on Succession. (620)

Art. 729. When the donor intends that the

donation shall take effect during the lifetime
of the donor, though the property shall not
be delivered till after the donor's death, this
shall be a donation inter vivos. The fruits of
the property from the time of the acceptance
of the donation, shall pertain to the donee,
unless the donor provides otherwise. (n)

Art. 730. The fixing of an event or the

imposition of a suspensive condition, which
may take place beyond the natural
expectation of life of the donor, does not
destroy the nature of the act as a donation
inter vivos, unless a contrary intention
appears. (n)

Art. 731. When a person donates something,

subject to the resolutory condition of the
donor's survival, there is a donation inter
vivos. (n)

Art. 732. Donations which are to take effect

inter vivos shall be governed by the general
provisions on contracts and obligations in all
that is not determined in this Title. (621)

Art. 733. Donations with an onerous cause

shall be governed by the rules on contracts
and remuneratory donations by the
provisions of the present Title as regards that
portion which exceeds the value of the
burden imposed. (622)
 160

Art. 734. The donation is perfected from the

moment the donor knows of the acceptance
by the donee. (623)

CHAPTER 2
PERSONS WHO MAY GIVE OR
RECEIVE A DONATION

Art. 735. All persons who may contract and

dispose of their property may make a
donation. (624)

Art. 736. Guardians and trustees cannot

donate the property entrusted to them. (n)

Art. 737. The donor's capacity shall be

determined as of the time of the making of
the donation. (n)

Art. 738. Al those who are not specially

disqualified by law therefor may accept
donations. (625)

Art. 739. The following donations shall be

void:

(1) Those made between persons who

were guilty of adultery or
concubinage at the time of the
donation;

(2) Those made between persons

found guilty of the same criminal
offense, in consideration thereof;

(3) Those made to a public officer or

his wife, descedants and ascendants,
by reason of his office.

In the case referred to in No. 1, the action

for declaration of nullity may be brought by
the spouse of the donor or donee; and the
guilt of the donor and donee may be proved
by preponderance of evidence in the same
action. (n)

Art. 740. Incapacity to succeed by will shall

be applicable to donations inter vivos. (n)

Art. 741. Minors and others who cannot

enter into a contract may become donees but
 161

acceptance shall be done through their

parents or legal representatives. (626a)

Art. 742. Donations made to conceived and

unborn children may be accepted by those
persons who would legally represent them if
they were already born. (627)

Art. 743. Donations made to incapacitated

persons shall be void, though simulated
under the guise of another contract or
through a person who is interposed. (628)

Art. 744. Donations of the same thing to two

or more different donees shall be governed
by the provisions concerning the sale of the
same thing to two or more different persons.
(n)

Art. 745. The donee must accept the

donation personally, or through an
authorized person with a special power for
the purpose, or with a general and sufficient
power; otherwise, the donation shall be void.
(630)

Art. 746. Acceptance must be made during

the lifetime of the donor and of the donee.
(n)

Art. 747. Persons who accept donations in

representation of others who may not do so
by themselves, shall be obliged to make the
notification and notation of which Article
749 speaks. (631)

Art. 748. The donation of a movable may be

made orally or in writing.

An oral donation requires the simultaneous

delivery of the thing or of the document
representing the right donated.

If the value of the personal property donated

exceeds five thousand pesos, the donation
and the acceptance shall be made in writing,
otherwise, the donation shall be void. (632a)

Art. 749. In order that the donation of an

immovable may be valid, it must be made in
a public document, specifying therein the
 162

property donated and the value of the

charges which the donee must satisfy.

The acceptance may be made in the same

deed of donation or in a separate public
document, but it shall not take effect unless
it is done during the lifetime of the donor.

If the acceptance is made in a separate

instrument, the donor shall be notified
thereof in an authentic form, and this step
shall be noted in both instruments. (633)

CHAPTER 3
EFFECT OF DONATIONS AND
LIMITATIONS THEREON

Art. 750. The donations may comprehend all

the present property of the donor, or part
thereof, provided he reserves, in full
ownership or in usufruct, sufficient means
for the support of himself, and of all
relatives who, at the time of the acceptance
of the donation, are by law entitled to be
supported by the donor. Without such
reservation, the donation shall be reduced in
petition of any person affected. (634a)

Art. 751. Donations cannot comprehend

future property.

By future property is understood anything

which the donor cannot dispose of at the
time of the donation. (635)

Art. 752. The provisions of Article 750

notwithstanding, no person may give or
receive, by way of donation, more than he
may give or receive by will.

The donation shall be inofficious in all that

it may exceed this limitation. (636)

Art. 753. When a donation is made to

several persons jointly, it is understood to be
in equal shares, and there shall be no right of
accretion among them, unless the donor has
otherwise provided.

The preceding paragraph shall not be

applicable to donations made to the husband
 163

and wife jointly, between whom there shall

be a right of accretion, if the contrary has
not been provided by the donor. (637)

Art. 754. The donee is subrogated to all the

rights and actions which in case of eviction
would pertain to the donor. The latter, on the
other hand, is not obliged to warrant the
things donated, save when the donation is
onerous, in which case the donor shall be
liable for eviction to the concurrence of the
burden.

The donor shall also be liable for eviction or

hidden defects in case of bad faith on his
part. (638a)

Art. 755. The right to dispose of some of the

things donated, or of some amount which
shall be a charge thereon, may be reserved
by the donor; but if he should die without
having made use of this right, the property
or amount reserved shall belong to the
donee. (639)

Art. 756. The ownership of property may

also be donated to one person and the
usufruct to another or others, provided all
the donees are living at the time of the
donation. (640a)

Art. 757. Reversion may be validly

established in favor of only the donor for
any case and circumstances, but not in favor
of other persons unless they are all living at
the time of the donation.

Any reversion stipulated by the donor in

favor of a third person in violation of what is
provided in the preceding paragraph shall be
void, but shall not nullify the donation.
(614a)

Art. 758. When the donation imposes upon

the donee the obligation to pay the debts of
the donor, if the clause does not contain any
declaration to the contrary, the former is
understood to be liable to pay only the debts
which appear to have been previously
contracted. In no case shall the donee be
responsible for the debts exceeding the value
 164

of the property donated, unless a contrary

intention clearly appears. (642a)

Art. 759. There being no stipulation

regarding the payment of debts, the donee
shall be responsible therefor only when the
donation has been made in fraud of
creditors.

The donation is always presumed to be in

fraud of creditors, when at the time thereof
the donor did not reserve sufficient property
to pay his debts prior to the donation. (643)

CHAPTER 4
REVOCATION AND REDUCTION OF
DONATIONS

Art. 760. Every donation inter vivos, made

by a person having no children or
descendants, legitimate or legitimated by
subsequent marriage, or illegitimate, may be
revoked or reduced as provided in the next
article, by the happening of any of these
events:
(1) If the donor, after the donation,
should have legitimate or legitimated
or illegitimate children, even though
they be posthumous;

(2) If the child of the donor, whom the

latter believed to be dead when he
made the donation, should turn out to
be living;

(3) If the donor subsequently adopt a

minor child. (644a)

Art. 761. In the cases referred to in the

preceding article, the donation shall be
revoked or reduced insofar as it exceeds the
portion that may be freely disposed of by
will, taking into account the whole estate of
the donor at the time of the birth, appearance
or adoption of a child. (n)

Art. 762. Upon the revocation or reduction

of the donation by the birth, appearance or
adoption of a child, the property affected
 165

shall be returned or its value if the donee has

sold the same.

If the property is mortgaged, the donor may

redeem the mortgage, by paying the amount
guaranteed, with a right to recover the same
from the donee.

When the property cannot be returned, it

shall be estimated at what it was worth at the
time of the donation. (645a)

Art. 763. The action for revocation or

reduction on the grounds set forth in article
760 shall prescribe after four years from the
birth of the first child, or from his
legitimation, recognition or adoption, or
from the judicial declaration of filiation, or
from the time information was received
regarding the existence of the child believed
dead.

This action cannot be renounced, and is

transmitted, upon the death of the donor, to
his legitimate and illegitimate children and
descendants. (646a)

Art. 764. The donation shall be revoked at

the instance of the donor, when the donee
fails to comply with any of the conditions
which the former imposed upon the latter.

In this case, the property donated shall be

returned to the donor, the alienations made
by the donee and the mortgages imposed
thereon by him being void, with the
limitations established, with regard to third
persons, by the Mortgage Law and the Land
Registration Laws.

This action shall prescribe after four years

from the noncompliance with the condition,
may be transmitted to the heirs of the donor,
and may be exercised against the donee's
heirs. (647a)

Art. 765. The donation may also be revoked

at the instance of the donor, by reason of
ingratitude in the following cases:

(1) If the donee should commit some

offense against the person, the honor
 166

or the property of the donor, or of his

wife or children under his parental
authority;

(2) If the donee imputes to the donor

any criminal offense, or any act
involving moral turpitude, even
though he should prove it, unless the
crime or the act has been committed
against the donee himself, his wife or
children under his authority;

(3) If he unduly refuses him support

when the donee is legally or morally
bound to give support to the donor.
(648a)

Art. 766. Although the donation is revoked

on account of ingratitude, nevertheless, the
alienations and mortgages effected before
the notation of the complaint for revocation
in the Registry of Property shall subsist.
Later ones shall be void. (649)

Art. 767. In the case referred to in the first

paragraph of the preceding article, the donor
shall have a right to demand from the donee
the value of property alienated which he
cannot recover from third persons, or the
sum for which the same has been
mortgaged.

The value of said property shall be fixed as

of the time of the donation. (650)

Art. 768. When the donation is revoked for

any of the causes stated in Article 760, or by
reason of ingratitude, or when it is reduced
because it is inofficious, the donee shall not
return the fruits except from the filing of the
complaint.

If the revocation is based upon

noncompliance with any of the conditions
imposed in the donation, the donee shall
return not only the property but also the
fruits thereof which he may have received
after having failed to fulfill the condition.
(651)

Art. 769. The action granted to the donor by

reason of ingratitude cannot be renounced in
 167

advance. This action prescribes within one

year, to be counted from the time the donor
had knowledge of the fact and it was
possible for him to bring the action. (652)

Art. 770. This action shall not be transmitted

to the heirs of the donor, if the latter did not
institute the same, although he could have
done so, and even if he should die before the
expiration of one year.

Neither can this action be brought against

the heir of the donee, unless upon the latter's
death the complaint has been filed. (653)

Art. 771. Donations which in accordance

with the provisions of Article 752, are
inofficious, bearing in mind the estimated
net value of the donor's property at the time
of his death, shall be reduced with regard to
the excess; but this reduction shall not
prevent the donations from taking effect
during the life of the donor, nor shall it bar
the donee from appropriating the fruits.

For the reduction of donations the provisions

of this Chapter and of Articles 911 and 912
of this Code shall govern. (654)

Art. 772. Only those who at the time of the

donor's death have a right to the legitime
and their heirs and successors in interest
may ask for the reduction or inofficious
donations.

Those referred to in the preceding paragraph

cannot renounce their right during the
lifetime of the donor, either by express
declaration, or by consenting to the
donation.

The donees, devisees and legatees, who are

not entitled to the legitime and the creditors
of the deceased can neither ask for the
reduction nor avail themselves thereof.
(655a)

Art. 773. If, there being two or more

donations, the disposable portion is not
sufficient to cover all of them, those of the
more recent date shall be suppressed or
 168

reduced with regard to the excess. (656)

Title IV. - SUCCESSION

CHAPTER 1
GENERAL PROVISIONS

Art. 774. Succession is a mode of

acquisition by virtue of which the property,
rights and obligations to the extent of the
value of the inheritance, of a person are
transmitted through his death to another or
others either by his will or by operation of
law. (n)

Art. 775. In this Title, "decedent" is the

general term applied to the person whose
property is transmitted through succession,
whether or not he left a will. If he left a will,
he is also called the testator. (n)

Art. 776. The inheritance includes all the

property, rights and obligations of a person
which are not extinguished by his death.
(659)

Art. 777. The rights to the succession are

transmitted from the moment of the death of
the decedent. (657a)

Art. 778. Succession may be:

(1) Testamentary;

(2) Legal or intestate; or

(3) Mixed. (n)

Art. 779. Testamentary succession is that

which results from the designation of an
heir, made in a will executed in the form
prescribed by law. (n)

Art. 780. Mixed succession is that effected

partly by will and partly by operation of law.
(n)

Art. 781. The inheritance of a person

includes not only the property and the
transmissible rights and obligations existing
at the time of his death, but also those which
 169

have accrued thereto since the opening of

the succession. (n)

Art. 782. An heir is a person called to the

succession either by the provision of a will
or by operation of law.

Devisees and legatees are persons to whom

gifts of real and personal property are
respectively given by virtue of a will. (n)

CHAPTER 2
TESTAMENTARY SUCCESSION

SECTION 1. - Wills

SUBSECTION 1. - Wills in General

Art. 783. A will is an act whereby a person is

permitted, with the formalities prescribed by
law, to control to a certain degree the
disposition of this estate, to take effect after
his death. (667a)

Art. 784. The making of a will is a strictly

personal act; it cannot be left in whole or in
part of the discretion of a third person, or
accomplished through the instrumentality of
an agent or attorney. (670a)

Art. 785. The duration or efficacy of the

designation of heirs, devisees or legatees, or
the determination of the portions which they
are to take, when referred to by name,
cannot be left to the discretion of a third
person. (670a)

Art. 786. The testator may entrust to a third

person the distribution of specific property
or sums of money that he may leave in
general to specified classes or causes, and
also the designation of the persons,
institutions or establishments to which such
property or sums are to be given or applied.
(671a)

Art. 787. The testator may not make a

testamentary disposition in such manner that
another person has to determine whether or
not it is to be operative. (n)
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Art. 788. If a testamentary disposition

admits of different interpretations, in case of
doubt, that interpretation by which the
disposition is to be operative shall be
preferred. (n)

Art. 789. When there is an imperfect

description, or when no person or property
exactly answers the description, mistakes
and omissions must be corrected, if the error
appears from the context of the will or from
extrinsic evidence, excluding the oral
declarations of the testator as to his
intention; and when an uncertainty arises
upon the face of the will, as to the
application of any of its provisions, the
testator's intention is to be ascertained from
the words of the will, taking into
consideration the circumstances under which
it was made, excluding such oral
declarations. (n)

Art. 790. The words of a will are to be taken

in their ordinary and grammatical sense,
unless a clear intention to use them in
another sense can be gathered, and that other
can be ascertained.

Technical words in a will are to be taken in

their technical sense, unless the context
clearly indicates a contrary intention, or
unless it satisfactorily appears that he was
unacquainted with such technical sense.
(675a)

Art. 791. The words of a will are to receive

an interpretation which will give to every
expression some effect, rather than one
which will render any of the expressions
inoperative; and of two modes of
interpreting a will, that is to be preferred
which will prevent intestacy. (n)

Art. 792. The invalidity of one of several

dispositions contained in a will does not
result in the invalidity of the other
dispositions, unless it is to be presumed that
the testator would not have made such other
dispositions if the first invalid disposition
had not been made. (n)
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Art. 793. Property acquired after the making

of a will shall only pass thereby, as if the
testator had possessed it at the time of
making the will, should it expressly appear
by the will that such was his intention. (n)

Art. 794. Every devise or legacy shall cover

all the interest which the testator could
device or bequeath in the property disposed
of, unless it clearly appears from the will
that he intended to convey a less interest. (n)

Art. 795. The validity of a will as to its form

depends upon the observance of the law in
force at the time it is made. (n)

SUBSECTION 2. - Testamentary Capacity

and Intent

Art. 796. All persons who are not expressly

prohibited by law may make a will. (662)

Art. 797. Persons of either sex under

eighteen years of age cannot make a will. (n)

Art. 798. In order to make a will it is

essential that the testator be of sound mind
at the time of its execution. (n)

Art. 799. To be of sound mind, it is not

necessary that the testator be in full
possession of all his reasoning faculties, or
that his mind be wholly unbroken,
unimpaired, or unshattered by disease,
injury or other cause.

It shall be sufficient if the testator was able

at the time of making the will to know the
nature of the estate to be disposed of, the
proper objects of his bounty, and the
character of the testamentary act. (n)

Art. 800. The law presumes that every

person is of sound mind, in the absence of
proof to the contrary.

The burden of proof that the testator was not

of sound mind at the time of making his
dispositions is on the person who opposes
the probate of the will; but if the testator,
one month, or less, before making his will
 172

was publicly known to be insane, the person

who maintains the validity of the will must
prove that the testator made it during a lucid
interval. (n)

Art. 801. Supervening incapacity does not

invalidate an effective will, nor is the will of
an incapable validated by the supervening of
capacity. (n)

Art. 802. A married woman may make a will

without the consent of her husband, and
without the authority of the court. (n)

Art. 803. A married woman may dispose by

will of all her separate property as well as
her share of the conjugal partnership or
absolute community property. (n)

SUBSECTION 3. - Forms of Wills

Art. 804. Every will must be in writing and

executed in a language or dialect known to
the testator. (n)

Art. 805. Every will, other than a

holographic will, must be subscribed at the
end thereof by the testator himself or by the
testator's name written by some other person
in his presence, and by his express direction,
and attested and subscribed by three or more
credible witnesses in the presence of the
testator and of one another.

The testator or the person requested by him

to write his name and the instrumental
witnesses of the will, shall also sign, as
aforesaid, each and every page thereof,
except the last, on the left margin, and all
the pages shall be numbered correlatively in
letters placed on the upper part of each page.

The attestation shall state the number of

pages used upon which the will is written,
and the fact that the testator signed the will
and every page thereof, or caused some
other person to write his name, under his
express direction, in the presence of the
instrumental witnesses, and that the latter
witnessed and signed the will and all the
 173

pages thereof in the presence of the testator

and of one another.

If the attestation clause is in a language not

known to the witnesses, it shall be
interpreted to them. (n)

Art. 806. Every will must be acknowledged

before a notary public by the testator and the
witnesses. The notary public shall not be
required to retain a copy of the will, or file
another with the Office of the Clerk of
Court. (n)

Art. 807. If the testator be deaf, or a deaf-

mute, he must personally read the will, if
able to do so; otherwise, he shall designate
two persons to read it and communicate to
him, in some practicable manner, the
contents thereof. (n)

Art. 808. If the testator is blind, the will

shall be read to him twice; once, by one of
the subscribing witnesses, and again, by the
notary public before whom the will is
acknowledged. (n)

Art. 809. In the absence of bad faith,

forgery, or fraud, or undue and improper
pressure and influence, defects and
imperfections in the form of attestation or in
the language used therein shall not render
the will invalid if it is proved that the will
was in fact executed and attested in
substantial compliance with all the
requirements of Article 805. (n)

Art. 810. A person may execute a

holographic will which must be entirely
written, dated, and signed by the hand of the
testator himself. It is subject to no other
form, and may be made in or out of the
Philippines, and need not be witnessed.
(678, 688a)

Art. 811. In the probate of a holographic

will, it shall be necessary that at least one
witness who knows the handwriting and
signature of the testator explicitly declare
that the will and the signature are in the
handwriting of the testator. If the will is
 174

contested, at least three of such witnesses

shall be required.

In the absence of any competent witness

referred to in the preceding paragraph, and if
the court deem it necessary, expert
testimony may be resorted to. (619a)

Art. 812. In holographic wills, the

dispositions of the testator written below his
signature must be dated and signed by him
in order to make them valid as testamentary
dispositions. (n)

Art. 813. When a number of dispositions

appearing in a holographic will are signed
without being dated, and the last disposition
has a signature and a date, such date
validates the dispositions preceding it,
whatever be the time of prior dispositions.
(n)

Art. 814. In case of any insertion,

cancellation, erasure or alteration in a
holographic will, the testator must
authenticate the same by his full signature.
(n)

Art. 815. When a Filipino is in a foreign

country, he is authorized to make a will in
any of the forms established by the law of
the country in which he may be. Such will
may be probated in the Philippines. (n)

Art. 816. The will of an alien who is abroad

produces effect in the Philippines if made
with the formalities prescribed by the law of
the place in which he resides, or according
to the formalities observed in his country, or
in conformity with those which this Code
prescribes. (n)

Art. 817. A will made in the Philippines by a

citizen or subject of another country, which
is executed in accordance with the law of the
country of which he is a citizen or subject,
and which might be proved and allowed by
the law of his own country, shall have the
same effect as if executed according to the
laws of the Philippines. (n)
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Art. 818. Two or more persons cannot make

a will jointly, or in the same instrument,
either for their reciprocal benefit or for the
benefit of a third person. (669)

Art. 819. Wills, prohibited by the preceding

article, executed by Filipinos in a foreign
country shall not be valid in the Philippines,
even though authorized by the laws of the
country where they may have been
executed. (733a)

SUBSECTION 4. - Witnesses to Wills

Art. 820. Any person of sound mind and of

the age of eighteen years or more, and not
bind, deaf or dumb, and able to read and
write, may be a witness to the execution of a
will mentioned in Article 805 of this Code.
(n)

Art. 821. The following are disqualified

from being witnesses to a will:

(1) Any person not domiciled in the

Philippines;

(2) Those who have been convicted of

falsification of a document, perjury or
false testimony. (n)

Art. 822. If the witnesses attesting the

execution of a will are competent at the time
of attesting, their becoming subsequently
incompetent shall not prevent the allowance
of the will. (n)

Art. 823. If a person attests the execution of

a will, to whom or to whose spouse, or
parent, or child, a devise or legacy is given
by such will, such devise or legacy shall, so
far only as concerns such person, or spouse,
or parent, or child of such person, or any one
claiming under such person or spouse, or
parent, or child, be void, unless there are
three other competent witnesses to such will.
However, such person so attesting shall be
admitted as a witness as if such devise or
legacy had not been made or given. (n)
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Art. 824. A mere charge on the estate of the

testator for the payment of debts due at the
time of the testator's death does not prevent
his creditors from being competent
witnesses to his will. (n)

SUBSECTION 5. - Codicils and

Incorporation by Reference

Art. 825. A codicil is supplement or addition

to a will, made after the execution of a will
and annexed to be taken as a part thereof, by
which disposition made in the original will
is explained, added to, or altered. (n)

Art. 826. In order that a codicil may be

effective, it shall be executed as in the case
of a will. (n)

Art. 827. If a will, executed as required by

this Code, incorporates into itself by
reference any document or paper, such
document or paper shall not be considered a
part of the will unless the following
requisites are present:

(1) The document or paper referred to

in the will must be in existence at the
time of the execution of the will;

(2) The will must clearly describe and

identify the same, stating among other
things the number of pages thereof;

(3) It must be identified by clear and

satisfactory proof as the document or
paper referred to therein; and

(4) It must be signed by the testator

and the witnesses on each and every
page, except in case of voluminous
books of account or inventories. (n)

SUBSECTION 6. - Revocation of Wills and

Testamentary Dispositions

Art. 828. A will may be revoked by the

testator at any time before his death. Any
waiver or restriction of this right is void.
(737a)
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Art. 829. A revocation done outside the

Philippines, by a person who does not have
his domicile in this country, is valid when it
is done according to the law of the place
where the will was made, or according to the
law of the place in which the testator had his
domicile at the time; and if the revocation
takes place in this country, when it is in
accordance with the provisions of this Code.
(n)

Art. 830. No will shall be revoked except in

the following cases:

(1) By implication of law; or

(2) By some will, codicil, or other

writing executed as provided in case
of wills; or

(3) By burning, tearing, cancelling, or

obliterating the will with the intention
of revoking it, by the testator himself,
or by some other person in his
presence, and by his express direction.
If burned, torn, cancelled, or
obliterated by some other person,
without the express direction of the
testator, the will may still be
established, and the estate distributed
in accordance therewith, if its
contents, and due execution, and the
fact of its unauthorized destruction,
cancellation, or obliteration are
established according to the Rules of
Court. (n)

Art. 831. Subsequent wills which do not

revoke the previous ones in an express
manner, annul only such dispositions in the
prior wills as are inconsistent with or
contrary to those contained in the latter
wills. (n)

Art. 832. A revocation made in a subsequent

will shall take effect, even if the new will
should become inoperative by reason of the
incapacity of the heirs, devisees or legatees
designated therein, or by their renunciation.
(740a)
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Art. 833. A revocation of a will based on a

false cause or an illegal cause is null and
void. (n)

Art. 834. The recognition of an illegitimate

child does not lose its legal effect, even
though the will wherein it was made should
be revoked. (714)

SUBSECTION 7. - Republication and

Revival of Wills

Art. 835. The testator cannot republish,

without reproducing in a subsequent will,
the dispositions contained in a previous one
which is void as to its form. (n)

Art. 836. The execution of a codicil

referring to a previous will has the effect of
republishing the will as modified by the
codicil. (n)

Art. 837. If after making a will, the testator

makes a second will expressly revoking the
first, the revocation of the second will does
not revive the first will, which can be
revived only by another will or codicil.
(739a)

SUBSECTION 8. - Allowance and

Disallowance of Wills

Art. 838. No will shall pass either real or

personal property unless it is proved and
allowed in accordance with the Rules of
Court.

The testator himself may, during his

lifetime, petition the court having
jurisdiction for the allowance of his will. In
such case, the pertinent provisions of the
Rules of Court for the allowance of wills
after the testator's a death shall govern.

The Supreme Court shall formulate such

additional Rules of Court as may be
necessary for the allowance of wills on
petition of the testator.
 179

Subject to the right of appeal, the allowance

of the will, either during the lifetime of the
testator or after his death, shall be
conclusive as to its due execution. (n)

Art. 839. The will shall be disallowed in any

of the following cases:

(1) If the formalities required by law

have not been complied with;

(2) If the testator was insane, or

otherwise mentally incapable of
making a will, at the time of its
execution;

(3) If it was executed through force or

under duress, or the influence of fear,
or threats;

(4) If it was procured by undue and

improper pressure and influence, on
the part of the beneficiary or of some
other person;

(5) If the signature of the testator was

procured by fraud;

(6) If the testator acted by mistake or

did not intend that the instrument he
signed should be his will at the time
of affixing his signature thereto. (n)

SECTION 2. - Institution of Heir

Art. 840. Institution of heir is an act by

virtue of which a testator designates in his
will the person or persons who are to
succeed him in his property and
transmissible rights and obligations. (n)

Art. 841. A will shall be valid even though it

should not contain an institution of an heir,
or such institution should not comprise the
entire estate, and even though the person so
instituted should not accept the inheritance
or should be incapacitated to succeed.

In such cases the testamentary dispositions

made in accordance with law shall be
complied with and the remainder of the
estate shall pass to the legal heirs. (764)
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Art. 842. One who has no compulsory heirs

may dispose by will of all his estate or any
part of it in favor of any person having
capacity to succeed.

One who has compulsory heirs may dispose

of his estate provided he does not
contravene the provisions of this Code with
regard to the legitime of said heirs. (763a)

Art. 843. The testator shall designate the

heir by his name and surname, and when
there are two persons having the same
names, he shall indicate some circumstance
by which the instituted heir may be known.

Even though the testator may have omitted

the name of the heir, should he designate
him in such manner that there can be no
doubt as to who has been instituted, the
institution shall be valid. (772)

Art. 844. An error in the name, surname, or

circumstances of the heir shall not vitiate the
institution when it is possible, in any other
manner, to know with certainty the person
instituted.

If among persons having the same names

and surnames, there is a similarity of
circumstances in such a way that, even with
the use of the other proof, the person
instituted cannot be identified, none of them
shall be an heir. (773a)

Art. 845. Every disposition in favor of an

unknown person shall be void, unless by
some event or circumstance his identity
becomes certain. However, a disposition in
favor of a definite class or group of persons
shall be valid. (750a)

Art. 846. Heirs instituted without

designation of shares shall inherit in equal
parts. (765)

Art. 847. When the testator institutes some

heirs individually and others collectively as
when he says, "I designate as my heirs A
and B, and the children of C," those
collectively designated shall be considered
as individually instituted, unless it clearly
 181

appears that the intention of the testator was

otherwise. (769a)

Art. 848. If the testator should institute his

brothers and sisters, and he has some of full
blood and others of half blood, the
inheritance shall be distributed equally
unless a different intention appears. (770a)

Art. 849. When the testator calls to the

succession a person and his children they are
all deemed to have been instituted
simultaneously and not successively. (771)

Art. 850. The statement of a false cause for

the institution of an heir shall be considered
as not written, unless it appears from the
will that the testator would not have made
such institution if he had known the falsity
of such cause. (767a)

Art. 851. If the testator has instituted only

one heir, and the institution is limited to an
aliquot part of the inheritance, legal
succession takes place with respect to the
remainder of the estate.

The same rule applies if the testator has

instituted several heirs, each being limited to
an aliquot part, and all the parts do not cover
the whole inheritance. (n)

Art. 852. If it was the intention of the

testator that the instituted heirs should
become sole heirs to the whole estate, or the
whole free portion, as the case may be, and
each of them has been instituted to an
aliquot part of the inheritance and their
aliquot parts together do not cover the whole
inheritance, or the whole free portion, each
part shall be increased proportionally. (n)

Art. 853. If each of the instituted heirs has

been given an aliquot part of the inheritance,
and the parts together exceed the whole
inheritance, or the whole free portion, as the
case may be, each part shall be reduced
proportionally. (n)

Art. 854. The preterition or omission of one,

some, or all of the compulsory heirs in the
direct line, whether living at the time of the
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execution of the will or born after the death

of the testator, shall annul the institution of
heir; but the devises and legacies shall be
valid insofar as they are not inofficious.

If the omitted compulsory heirs should die

before the testator, the institution shall be
effectual, without prejudice to the right of
representation. (814a)

Art. 855. The share of a child or descendant

omitted in a will must first be taken from the
part of the estate not disposed of by the will,
if any; if that is not sufficient, so much as
may be necessary must be taken
proportionally from the shares of the other
compulsory heirs. (1080a)

Art. 856. A voluntary heir who dies before

the testator transmits nothing to his heirs.

A compulsory heir who dies before the

testator, a person incapacitated to succeed,
and one who renounces the inheritance, shall
transmit no right to his own heirs except in
cases expressly provided for in this Code.
(766a)

SECTION 3. - Substitution of Heirs

Art. 857. Substitution is the appointment of

another heir so that he may enter into the
inheritance in default of the heir originally
instituted. (n)

Art. 858. Substitution of heirs may be:

(1) Simple or common;

(2) Brief or compendious;

(3) Reciprocal; or

(4) Fideicommissary. (n)

Art. 859. The testator may designate one or

more persons to substitute the heir or heirs
instituted in case such heir or heirs should
die before him, or should not wish, or should
be incapacitated to accept the inheritance.
 183

A simple substitution, without a statement of

the cases to which it refers, shall comprise
the three mentioned in the preceding
paragraph, unless the testator has otherwise
provided. (774)

Art. 860. Two or more persons may be

substituted for one; and one person for two
or more heirs. (778)

Art. 861. If heirs instituted in unequal shares

should be reciprocally substituted, the
substitute shall acquire the share of the heir
who dies, renounces, or is incapacitated,
unless it clearly appears that the intention of
the testator was otherwise. If there are more
than one substitute, they shall have the same
share in the substitution as in the institution.
(779a)

Art. 862. The substitute shall be subject to

the same charges and conditions imposed
upon the instituted heir, unless and testator
has expressly provided the contrary, or the
charges or conditions are personally
applicable only to the heir instituted. (780)

Art. 863. A fideicommissary substitution by

virtue of which the fiduciary or first heir
instituted is entrusted with the obligation to
preserve and to transmit to a second heir the
whole or part of the inheritance, shall be
valid and shall take effect, provided such
substitution does not go beyond one degree
from the heir originally instituted, and
provided further, that the fiduciary or first
heir and the second heir are living at the
time of the death of the testator. (781a)

Art. 864. A fideicommissary substitution can

never burden the legitime. (782a)

Art. 865. Every fideicommissary

substitution must be expressly made in order
that it may be valid.

The fiduciary shall be obliged to deliver the

inheritance to the second heir, without other
deductions than those which arise from
legitimate expenses, credits and
 184

improvements, save in the case where the

testator has provided otherwise. (783)

Art. 866. The second heir shall acquire a

right to the succession from the time of the
testator's death, even though he should die
before the fiduciary. The right of the second
heir shall pass to his heirs. (784)

Art. 867. The following shall not take effect:

(1) Fideicommissary substitutions

which are not made in an express
manner, either by giving them this
name, or imposing upon the fiduciary
the absolute obligation to deliver the
property to a second heir;

(2) Provisions which contain a

perpetual prohibition to alienate, and
even a temporary one, beyond the
limit fixed in article 863;

(3) Those which impose upon the heir

the charge of paying to various
persons successively, beyond the limit
prescribed in article 863, a certain
income or pension;

(4) Those which leave to a person the

whole part of the hereditary property
in order that he may apply or invest
the same according to secret
instructions communicated to him by
the testator. (785a)

Art. 868. The nullity of the fideicommissary

substitution does not prejudice the validity
of the institution of the heirs first
designated; the fideicommissary clause shall
simply be considered as not written. (786)

Art. 869. A provision whereby the testator

leaves to a person the whole or part of the
inheritance, and to another the usufruct,
shall be valid. If he gives the usufruct to
various persons, not simultaneously, but
successively, the provisions of Article 863
shall apply. (787a)

Art. 870. The dispositions of the testator

declaring all or part of the estate inalienable
 185

for more than twenty years are void. (n)

SECTION 4. - Conditional Testamentary

Dispositions
and Testamentary Dispositions With a Term

Art. 871. The institution of an heir may be

made conditionally, or for a certain purpose
or cause. (790a)

Art. 872. The testator cannot impose any

charge, condition, or substitution whatsoever
upon the legitimes prescribed in this Code.
Should he do so, the same shall be
considered as not imposed. (813a)

Art. 873. Impossible conditions and those

contrary to law or good customs shall be
considered as not imposed and shall in no
manner prejudice the heir, even if the
testator should otherwise provide. (792a)

Art. 874. An absolute condition not to

contract a first or subsequent marriage shall
be considered as not written unless such
condition has been imposed on the widow or
widower by the deceased spouse, or by the
latter's ascendants or descendants.

Nevertheless, the right of usufruct, or an

allowance or some personal prestation may
be devised or bequeathed to any person for
the time during which he or she should
remain unmarried or in widowhood. (793a)

Art. 875. Any disposition made upon the

condition that the heir shall make some
provision in his will in favor of the testator
or of any other person shall be void. (794a)

Art. 876. Any purely potestative condition

imposed upon an heir must be fulfilled by
him as soon as he learns of the testator's
death.

This rule shall not apply when the condition,

already complied with, cannot be fulfilled
again. (795a)

Art. 877. If the condition is casual or mixed,

it shall be sufficient if it happens or be
 186

fulfilled at any time before or after the death

of the testator, unless he has provided
otherwise.

Should it have existed or should it have been

fulfilled at the time the will was executed
and the testator was unaware thereof, it shall
be deemed as complied with.

If he had knowledge thereof, the condition

shall be considered fulfilled only when it is
of such a nature that it can no longer exist or
be complied with again. (796)

Art. 878. A disposition with a suspensive

term does not prevent the instituted heir
from acquiring his rights and transmitting
them to his heirs even before the arrival of
the term. (799a)

Art. 879. If the potestative condition

imposed upon the heir is negative, or
consists in not doing or not giving
something, he shall comply by giving a
security that he will not do or give that
which has been prohibited by the testator,
and that in case of contravention he will
return whatever he may have received,
together with its fruits and interests. (800a)

Art. 880. If the heir be instituted under a

suspensive condition or term, the estate shall
be placed under administration until the
condition is fulfilled, or until it becomes
certain that it cannot be fulfilled, or until the
arrival of the term.

The same shall be done if the heir does not

give the security required in the preceding
article. (801a)

Art. 881. The appointment of the

administrator of the estate mentioned in the
preceding article, as well as the manner of
the administration and the rights and
obligations of the administrator shall be
governed by the Rules of Court. (804a)

Art. 882. The statement of the object of the

institution, or the application of the property
left by the testator, or the charge imposed by
 187

him, shall not be considered as a condition

unless it appears that such was his intention.

That which has been left in this manner may

be claimed at once provided that the
instituted heir or his heirs give security for
compliance with the wishes of the testator
and for the return of anything he or they
may receive, together with its fruits and
interests, if he or they should disregard this
obligation. (797a)

Art. 883. When without the fault of the heir,

an institution referred to in the preceding
article cannot take effect in the exact manner
stated by the testator, it shall be complied
with in a manner most analogous to and in
conformity with his wishes.

If the person interested in the condition

should prevent its fulfillment, without the
fault of the heir, the condition shall be
deemed to have been complied with. (798a)

Art. 884. Conditions imposed by the testator

upon the heirs shall be governed by the rules
established for conditional obligations in all
matters not provided for by this Section.
(791a)

Art. 885. The designation of the day or time

when the effects of the institution of an heir
shall commence or cease shall be valid.

In both cases, the legal heir shall be

considered as called to the succession until
the arrival of the period or its expiration. But
in the first case he shall not enter into
possession of the property until after having
given sufficient security, with the
intervention of the instituted heir. (805)

SECTION 5. - Legitime

Art. 886. Legitime is that part of the

testator's property which he cannot dispose
of because the law has reserved it for certain
heirs who are, therefore, called compulsory
heirs. (806)
 188

Art. 887. The following are compulsory

heirs:

(1) Legitimate children and

descendants, with respect to their
legitimate parents and ascendants;

(2) In default of the foregoing,

legitimate parents and ascendants,
with respect to their legitimate
children and descendants;

(3) The widow or widower;

(4) Acknowledged natural children,

and natural children by legal fiction;

(5) Other illegitimate children

referred to in Article 287.

Compulsory heirs mentioned in Nos. 3, 4,

and 5 are not excluded by those in Nos. 1
and 2; neither do they exclude one another.

In all cases of illegitimate children, their

filiation must be duly proved.

The father or mother of illegitimate children

of the three classes mentioned, shall inherit
from them in the manner and to the extent
established by this Code. (807a)

Art. 888. The legitime of legitimate children

and descendants consists of one-half of the
hereditary estate of the father and of the
mother.

The latter may freely dispose of the

remaining half, subject to the rights of
illegitimate children and of the surviving
spouse as hereinafter provided. (808a)

Art. 889. The legitime of legitimate parents

or ascendants consists of one-half of the
hereditary estates of their children and
descendants.

The children or descendants may freely

dispose of the other half, subject to the
rights of illegitimate children and of the
surviving spouse as hereinafter provided.
(809a)
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Art. 890. The legitime reserved for the

legitimate parents shall be divided between
them equally; if one of the parents should
have died, the whole shall pass to the
survivor.

If the testator leaves neither father nor

mother, but is survived by ascendants of
equal degree of the paternal and maternal
lines, the legitime shall be divided equally
between both lines. If the ascendants should
be of different degrees, it shall pertain
entirely to the ones nearest in degree of
either line. (810)

Art. 891. The ascendant who inherits from

his descendant any property which the latter
may have acquired by gratuitous title from
another ascendant, or a brother or sister, is
obliged to reserve such property as he may
have acquired by operation of law for the
benefit of relatives who are within the third
degree and who belong to the line from
which said property came. (871)

Art. 892. If only one legitimate child or

descendant of the deceased survives, the
widow or widower shall be entitled to one-
fourth of the hereditary estate. In case of a
legal separation, the surviving spouse may
inherit if it was the deceased who had given
cause for the same.

If there are two or more legitimate children

or descendants, the surviving spouse shall be
entitled to a portion equal to the legitime of
each of the legitimate children or
descendants.

In both cases, the legitime of the surviving

spouse shall be taken from the portion that
can be freely disposed of by the testator.
(834a)

Art. 893. If the testator leaves no legitimate

descendants, but leaves legitimate
ascendants, the surviving spouse shall have
a right to one-fourth of the hereditary estate.

This fourth shall be taken from the free

portion of the estate. (836a)
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Art. 894. If the testator leaves illegitimate

children, the surviving spouse shall be
entitled to one-third of the hereditary estate
of the deceased and the illegitimate children
to another third. The remaining third shall be
at the free disposal of the testator. (n)

Art. 895. The legitime of each of the

acknowledged natural children and each of
the natural children by legal fiction shall
consist of one-half of the legitime of each of
the legitimate children or descendants.

The legitime of an illegitimate child who is

neither an acknowledged natural, nor a
natural child by legal fiction, shall be equal
in every case to four-fifths of the legitime of
an acknowledged natural child.

The legitime of the illegitimate children

shall be taken from the portion of the estate
at the free disposal of the testator, provided
that in no case shall the total legitime of
such illegitimate children exceed that free
portion, and that the legitime of the
surviving spouse must first be fully satisfied.
(840a)

Art. 896. Illegitimate children who may

survive with legitimate parents or
ascendants of the deceased shall be entitled
to one-fourth of the hereditary estate to be
taken from the portion at the free disposal of
the testator. (841a)

Art. 897. When the widow or widower

survives with legitimate children or
descendants, and acknowledged natural
children, or natural children by legal fiction,
such surviving spouse shall be entitled to a
portion equal to the legitime of each of the
legitimate children which must be taken
from that part of the estate which the testator
can freely dispose of. (n)

Art. 898. If the widow or widower survives

with legitimate children or descendants, and
with illegitimate children other than
acknowledged natural, or natural children by
legal fiction, the share of the surviving
 191

spouse shall be the same as that provided in

the preceding article. (n)

Art. 899. When the widow or widower

survives with legitimate parents or
ascendants and with illegitimate children,
such surviving spouse shall be entitled to
one-eighth of the hereditary estate of the
deceased which must be taken from the free
portion, and the illegitimate children shall be
entitled to one-fourth of the estate which
shall be taken also from the disposable
portion. The testator may freely dispose of
the remaining one-eighth of the estate. (n)

Art. 900. If the only survivor is the widow

or widower, she or he shall be entitled to
one-half of the hereditary estate of the
deceased spouse, and the testator may freely
dispose of the other half. (837a)

If the marriage between the surviving spouse

and the testator was solemnized in articulo
mortis, and the testator died within three
months from the time of the marriage, the
legitime of the surviving spouse as the sole
heir shall be one-third of the hereditary
estate, except when they have been living as
husband and wife for more than five years.
In the latter case, the legitime of the
surviving spouse shall be that specified in
the preceding paragraph. (n)

Art. 901. When the testator dies leaving

illegitimate children and no other
compulsory heirs, such illegitimate children
shall have a right to one-half of the
hereditary estate of the deceased.

The other half shall be at the free disposal of

the testator. (842a)

Art. 902. The rights of illegitimate children

set forth in the preceding articles are
transmitted upon their death to their
descendants, whether legitimate or
illegitimate. (843a)

Art. 903. The legitime of the parents who

have an illegitimate child, when such child
leaves neither legitimate descendants, nor a
 192

surviving spouse, nor illegitimate children,

is one-half of the hereditary estate of such
illegitimate child. If only legitimate or
illegitimate children are left, the parents are
not entitled to any legitime whatsoever. If
only the widow or widower survives with
parents of the illegitimate child, the legitime
of the parents is one-fourth of the hereditary
estate of the child, and that of the surviving
spouse also one-fourth of the estate. (n)

Art. 904. The testator cannot deprive his

compulsory heirs of their legitime, except in
cases expressly specified by law.

Neither can he impose upon the same any

burden, encumbrance, condition, or
substitution of any kind whatsoever. (813a)

Art. 905. Every renunciation or compromise

as regards a future legitime between the
person owing it and his compulsory heirs is
void, and the latter may claim the same upon
the death of the former; but they must bring
to collation whatever they may have
received by virtue of the renunciation or
compromise. (816)

Art. 906. Any compulsory heir to whom the

testator has left by any title less than the
legitime belonging to him may demand that
the same be fully satisfied. (815)

Art. 907. Testamentary dispositions that

impair or diminish the legitime of the
compulsory heirs shall be reduced on
petition of the same, insofar as they may be
inofficious or excessive. (817)

Art. 908. To determine the legitime, the

value of the property left at the death of the
testator shall be considered, deducting all
debts and charges, which shall not include
those imposed in the will.

To the net value of the hereditary estate,

shall be added the value of all donations by
the testator that are subject to collation, at
the time he made them. (818a)

Art. 909. Donations given to children shall

be charged to their legitime.
 193

Donations made to strangers shall be

charged to that part of the estate of which
the testator could have disposed by his last
will.

Insofar as they may be inofficious or may

exceed the disposable portion, they shall be
reduced according to the rules established by
this Code. (819a)

Art. 910. Donations which an illegitimate

child may have received during the lifetime
of his father or mother, shall be charged to
his legitime.

Should they exceed the portion that can be

freely disposed of, they shall be reduced in
the manner prescribed by this Code. (847a)

Art. 911. After the legitime has been

determined in accordance with the three
preceding articles, the reduction shall be
made as follows:

(1) Donations shall be respected as

long as the legitime can be covered,
reducing or annulling, if necessary,
the devises or legacies made in the
will;

(2) The reduction of the devises or

legacies shall be pro rata, without any
distinction whatever.

If the testator has directed that a

certain devise or legacy be paid in
preference to others, it shall not suffer
any reduction until the latter have
been applied in full to the payment of
the legitime.

(3) If the devise or legacy consists of

a usufruct or life annuity, whose value
may be considered greater than that of
the disposable portion, the
compulsory heirs may choose
between complying with the
testamentary provision and delivering
to the devisee or legatee the part of
the inheritance of which the testator
could freely dispose. (820a)
 194

Art. 912. If the devise subject to reduction

should consist of real property, which cannot
be conveniently divided, it shall go to the
devisee if the reduction does not absorb one-
half of its value; and in a contrary case, to
the compulsory heirs; but the former and the
latter shall reimburse each other in cash for
what respectively belongs to them.

The devisee who is entitled to a legitime

may retain the entire property, provided its
value does not exceed that of the disposable
portion and of the share pertaining to him as
legitime. (821)

Art. 913. If the heirs or devisees do not

choose to avail themselves of the right
granted by the preceding article, any heir or
devisee who did not have such right may
exercise it; should the latter not make use of
it, the property shall be sold at public
auction at the instance of any one of the
interested parties. (822)

Art. 914. The testator may devise and

bequeath the free portion as he may deem
fit. (n)

SECTION 6. - Disinheritance

Art. 915. A compulsory heir may, in

consequence of disinheritance, be deprived
of his legitime, for causes expressly stated
by law. (848a)

Art. 916. Disinheritance can be effected only

through a will wherein the legal cause
therefor shall be specified. (849)

Art. 917. The burden of proving the truth of

the cause for disinheritance shall rest upon
the other heirs of the testator, if the
disinherited heir should deny it. (850)

Art. 918. Disinheritance without a

specification of the cause, or for a cause the
truth of which, if contradicted, is not proved,
or which is not one of those set forth in this
Code, shall annul the institution of heirs
insofar as it may prejudice the person
 195

disinherited; but the devises and legacies

and other testamentary dispositions shall be
valid to such extent as will not impair the
legitime. (851a)

Art. 919. The following shall be sufficient

causes for the disinheritance of children and
descendants, legitimate as well as
illegitimate:

(1) When a child or descendant has

been found guilty of an attempt
against the life of the testator, his or
her spouse, descendants, or
ascendants;

(2) When a child or descendant has

accused the testator of a crime for
which the law prescribes
imprisonment for six years or more, if
the accusation has been found
groundless;

(3) When a child or descendant has

been convicted of adultery or
concubinage with the spouse of the
testator;

(4) When a child or descendant by

fraud, violence, intimidation, or undue
influence causes the testator to make a
will or to change one already made;

(5) A refusal without justifiable cause

to support the parent or ascendant
who disinherits such child or
descendant;

(6) Maltreatment of the testator by

word or deed, by the child or
descendant;

(7) When a child or descendant leads

a dishonorable or disgraceful life;

(8) Conviction of a crime which

carries with it the penalty of civil
interdiction. (756, 853, 674a)

Art. 920. The following shall be sufficient

causes for the disinheritance of parents or
 196

ascendants, whether legitimate or

illegitimate:
(1) When the parents have abandoned
their children or induced their
daughters to live a corrupt or immoral
life, or attempted against their virtue;

(2) When the parent or ascendant has

been convicted of an attempt against
the life of the testator, his or her
spouse, descendants, or ascendants;

(3) When the parent or ascendant has

accused the testator of a crime for
which the law prescribes
imprisonment for six years or more, if
the accusation has been found to be
false;

(4) When the parent or ascendant has

been convicted of adultery or
concubinage with the spouse of the
testator;

(5) When the parent or ascendant by

fraud, violence, intimidation, or undue
influence causes the testator to make a
will or to change one already made;

(6) The loss of parental authority for

causes specified in this Code;

(7) The refusal to support the children

or descendants without justifiable
cause;

(8) An attempt by one of the parents

against the life of the other, unless
there has been a reconciliation
between them. (756, 854, 674a)

Art. 921. The following shall be sufficient

causes for disinheriting a spouse:
(1) When the spouse has been
convicted of an attempt against the
life of the testator, his or her
descendants, or ascendants;

(2) When the spouse has accused the

testator of a crime for which the law
prescribes imprisonment of six years
 197

or more, and the accusation has been

found to be false;

(3) When the spouse by fraud,

violence, intimidation, or undue
influence cause the testator to make a
will or to change one already made;

(4) When the spouse has given cause

for legal separation;

(5) When the spouse has given

grounds for the loss of parental
authority;

(6) Unjustifiable refusal to support the

children or the other spouse. (756,
855, 674a)

Art. 922. A subsequent reconciliation

between the offender and the offended
person deprives the latter of the right to
disinherit, and renders ineffectual any
disinheritance that may have been made.
(856)

Art. 923. The children and descendants of

the person disinherited shall take his or her
place and shall preserve the rights of
compulsory heirs with respect to the
legitime; but the disinherited parent shall not
have the usufruct or administration of the
property which constitutes the legitime.
(857)

SECTION 7. - Legacies and Devises

Art. 924. All things and rights which are

within the commerce of man be bequeathed
or devised. (865a)

Art. 925. A testator may charge with

legacies and devises not only his
compulsory heirs but also the legatees and
devisees.

The latter shall be liable for the charge only

to the extent of the value of the legacy or the
devise received by them. The compulsory
heirs shall not be liable for the charge
 198

beyond the amount of the free portion given

them. (858a)

Art. 926. When the testator charges one of

the heirs with a legacy or devise, he alone
shall be bound.

Should he not charge anyone in particular,

all shall be liable in the same proportion in
which they may inherit. (859)

Art. 927. If two or more heirs take

possession of the estate, they shall be
solidarily liable for the loss or destruction of
a thing devised or bequeathed, even though
only one of them should have been
negligent. (n)

Art. 928. The heir who is bound to deliver

the legacy or devise shall be liable in case of
eviction, if the thing is indeterminate and is
indicated only by its kind. (860)

Art. 929. If the testator, heir, or legatee owns

only a part of, or an interest in the thing
bequeathed, the legacy or devise shall be
understood limited to such part or interest,
unless the testator expressly declares that he
gives the thing in its entirety. (864a)

Art. 930. The legacy or devise of a thing

belonging to another person is void, if the
testator erroneously believed that the thing
pertained to him. But if the thing
bequeathed, though not belonging to the
testator when he made the will, afterwards
becomes his, by whatever title, the
disposition shall take effect. (862a)

Art. 931. If the testator orders that a thing

belonging to another be acquired in order
that it be given to a legatee or devisee, the
heir upon whom the obligation is imposed or
the estate must acquire it and give the same
to the legatee or devisee; but if the owner of
the thing refuses to alienate the same, or
demands an excessive price therefor, the heir
or the estate shall only be obliged to give the
just value of the thing. (861a)

Art. 932. The legacy or devise of a thing

which at the time of the execution of the will
 199

already belonged to the legatee or devisee

shall be ineffective, even though another
person may have some interest therein.

If the testator expressly orders that the thing

be freed from such interest or encumbrance,
the legacy or devise shall be valid to that
extent. (866a)

Art. 933. If the thing bequeathed belonged

to the legatee or devisee at the time of the
execution of the will, the legacy or devise
shall be without effect, even though it may
have subsequently alienated by him.

If the legatee or devisee acquires it

gratuitously after such time, he can claim
nothing by virtue of the legacy or devise; but
if it has been acquired by onerous title he
can demand reimbursement from the heir or
the estate. (878a)

Art. 934. If the testator should bequeath or

devise something pledged or mortgaged to
secure a recoverable debt before the
execution of the will, the estate is obliged to
pay the debt, unless the contrary intention
appears.

The same rule applies when the thing is

pledged or mortgaged after the execution of
the will.

Any other charge, perpetual or temporary,

with which the thing bequeathed is
burdened, passes with it to the legatee or
devisee. (867a)

Art. 935. The legacy of a credit against a

third person or of the remission or release of
a debt of the legatee shall be effective only
as regards that part of the credit or debt
existing at the time of the death of the
testator.

In the first case, the estate shall comply with

the legacy by assigning to the legatee all
rights of action it may have against the
debtor. In the second case, by giving the
legatee an acquittance, should he request
one.
 200

In both cases, the legacy shall comprise all

interests on the credit or debt which may be
due the testator at the time of his death.
(870a)

Art. 936. The legacy referred to in the

preceding article shall lapse if the testator,
after having made it, should bring an action
against the debtor for the payment of his
debt, even if such payment should not have
been effected at the time of his death.

The legacy to the debtor of the thing pledged

by him is understood to discharge only the
right of pledge. (871)

Art. 937. A generic legacy of release or

remission of debts comprises those existing
at the time of the execution of the will, but
not subsequent ones. (872)

Art. 938. A legacy or devise made to a

creditor shall not be applied to his credit,
unless the testator so expressly declares.

In the latter case, the creditor shall have the

right to collect the excess, if any, of the
credit or of the legacy or devise. (837a)

Art. 939. If the testator orders the payment

of what he believes he owes but does not in
fact owe, the disposition shall be considered
as not written. If as regards a specified debt
more than the amount thereof is ordered
paid, the excess is not due, unless a contrary
intention appears.

The foregoing provisions are without

prejudice to the fulfillment of natural
obligations. (n)

Art. 940. In alternative legacies or devises,

the choice is presumed to be left to the heir
upon whom the obligation to give the legacy
or devise may be imposed, or the executor
or administrator of the estate if no particular
heir is so obliged.

If the heir, legatee or devisee, who may have

been given the choice, dies before making it,
this right shall pass to the respective heirs.
 201

Once made, the choice is irrevocable.

In the alternative legacies or devises, except

as herein provided, the provisions of this
Code regulating obligations of the same kind
shall be observed, save such modifications
as may appear from the intention expressed
by the testator. (874a)

Art. 941. A legacy of generic personal

property shall be valid even if there be no
things of the same kind in the estate.

A devise of indeterminate real property shall

be valid only if there be immovable property
of its kind in the estate.

The right of choice shall belong to the

executor or administrator who shall comply
with the legacy by the delivery of a thing
which is neither of inferior nor of superior
quality. (875a)

Art. 942. Whenever the testator expressly

leaves the right of choice to the heir, or to
the legatee or devisee, the former may give
or the latter may choose whichever he may
prefer. (876a)

Art. 943. If the heir, legatee or devisee

cannot make the choice, in case it has been
granted him, his right shall pass to his heirs;
but a choice once made shall be irrevocable.
(877a)

Art. 944. A legacy for education lasts until

the legatee is of age, or beyond the age of
majority in order that the legatee may finish
some professional, vocational or general
course, provided he pursues his course
diligently.

A legacy for support lasts during the lifetime

of the legatee, if the testator has not
otherwise provided.

If the testator has not fixed the amount of

such legacies, it shall be fixed in accordance
with the social standing and the
circumstances of the legatee and the value of
the estate.
 202

If the testator or during his lifetime used to

give the legatee a certain sum of money or
other things by way of support, the same
amount shall be deemed bequeathed, unless
it be markedly disproportionate to the value
of the estate. (879a)

Art. 945. If a periodical pension, or a certain

annual, monthly, or weekly amount is
bequeathed, the legatee may petition the
court for the first installment upon the death
of the testator, and for the following ones
which shall be due at the beginning of each
period; such payment shall not be returned,
even though the legatee should die before
the expiration of the period which has
commenced. (880a)

Art. 946. If the thing bequeathed should be

subject to a usufruct, the legatee or devisee
shall respect such right until it is legally
extinguished. (868a)

Art. 947. The legatee or devisee acquires a

right to the pure and simple legacies or
devises from the death of the testator, and
transmits it to his heirs. (881a)

Art. 948. If the legacy or device is of a

specific and determinate thing pertaining to
the testator, the legatee or devisee acquires
the ownership thereof upon the death of the
testator, as well as any growing fruits, or
unborn offspring of animals, or uncollected
income; but not the income which was due
and unpaid before the latter's death.

From the moment of the testator's death, the

thing bequeathed shall be at the risk of the
legatee or devisee, who shall, therefore, bear
its loss or deterioration, and shall be
benefited by its increase or improvement,
without prejudice to the responsibility of the
executor or administrator. (882a)

Art. 949. If the bequest should not be of a

specific and determinate thing, but is generic
or of quantity, its fruits and interests from
the time of the death of the testator shall
pertain to the legatee or devisee if the
testator has expressly so ordered. (884a)
 203

Art. 950. If the estate should not be

sufficient to cover all the legacies or devises,
their payment shall be made in the following
order:

(1) Remuneratory legacies or devises;

(2) Legacies or devises declared by

the testator to be preferential;

(3) Legacies for support;

(4) Legacies for education;

(5) Legacies or devises of a specific,

determinate thing which forms a part
of the estate;

(6) All others pro rata. (887a)

Art. 951. The thing bequeathed shall be

delivered with all its accessories and
accessories and in the condition in which it
may be upon the death of the testator. (883a)

Art. 952. The heir, charged with a legacy or

devise, or the executor or administrator of
the estate, must deliver the very thing
bequeathed if he is able to do so and cannot
discharge this obligation by paying its value.

Legacies of money must be paid in cash,

even though the heir or the estate may not
have any.

The expenses necessary for the delivery of

the thing bequeathed shall be for the account
of the heir or the estate, but without
prejudice to the legitime. (886a)

Art. 953. The legatee or devisee cannot take

possession of the thing bequeathed upon his
own authority, but shall request its delivery
and possession of the heir charged with the
legacy or devise, or of the executor or
administrator of the estate should he be
authorized by the court to deliver it. (885a)

Art. 954. The legatee or devisee cannot

accept a part of the legacy or devise and
repudiate the other, if the latter be onerous.
 204

Should he die before having accepted the

legacy or devise, leaving several heirs, some
of the latter may accept and the others may
repudiate the share respectively belonging to
them in the legacy or devise. (889a)

Art. 955. The legatee or devisee of two

legacies or devises, one of which is onerous,
cannot renounce the onerous one and accept
the other. If both are onerous or gratuitous,
he shall be free to accept or renounce both,
or to renounce either. But if the testator
intended that the two legacies or devises
should be inseparable from each other, the
legatee or devisee must either accept or
renounce both.

Any compulsory heir who is at the same

time a legatee or devisee may waive the
inheritance and accept the legacy or devise,
or renounce the latter and accept the former,
or waive or accept both. (890a)

Art. 956. If the legatee or devisee cannot or

is unwilling to accept the legacy or devise,
or if the legacy or devise for any reason
should become ineffective, it shall be
merged into the mass of the estate, except in
cases of substitution and of the right of
accretion. (888a)

Art. 957. The legacy or devise shall be

without effect:

(1) If the testator transforms the thing

bequeathed in such a manner that it
does not retain either the form or the
denomination it had;

(2) If the testator by any title or for

any cause alienates the thing
bequeathed or any part thereof, it
being understood that in the latter
case the legacy or devise shall be
without effect only with respect to the
part thus alienated. If after the
alienation the thing should again
belong to the testator, even if it be by
reason of nullity of the contract, the
legacy or devise shall not thereafter
be valid, unless the reacquisition shall
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have been effected by virtue of the

exercise of the right of repurchase;

(3) If the thing bequeathed is totally

lost during the lifetime of the testator,
or after his death without the heir's
fault. Nevertheless, the person obliged
to pay the legacy or devise shall be
liable for eviction if the thing
bequeathed should not have been
determinate as to its kind, in
accordance with the provisions of
Article 928. (869a)

Art. 958. A mistake as to the name of the

thing bequeathed or devised, is of no
consequence, if it is possible to identify the
thing which the testator intended to bequeath
or devise. (n)

Art. 959. A disposition made in general

terms in favor of the testator's relatives shall
be understood to be in favor of those nearest
in degree. (751)

CHAPTER 3
LEGAL OR INTESTATE SUCCESSION

SECTION 1. - General Provisions

Art. 960. Legal or intestate succession takes

place:
(1) If a person dies without a will, or
with a void will, or one which has
subsequently lost its validity;

(2) When the will does not institute an

heir to, or dispose of all the property
belonging to the testator. In such case,
legal succession shall take place only
with respect to the property of which
the testator has not disposed;

(3) If the suspensive condition

attached to the institution of heir does
not happen or is not fulfilled, or if the
heir dies before the testator, or
repudiates the inheritance, there being
no substitution, and no right of
accretion takes place;
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(4) When the heir instituted is

incapable of succeeding, except in
cases provided in this Code. (912a)

Art. 961. In default of testamentary heirs,

the law vests the inheritance, in accordance
with the rules hereinafter set forth, in the
legitimate and illegitimate relatives of the
deceased, in the surviving spouse, and in the
State. (913a)

Art. 962. In every inheritance, the relative

nearest in degree excludes the more distant
ones, saving the right of representation when
it properly takes place.

Relatives in the same degree shall inherit in

equal shares, subject to the provisions of
article 1006 with respect to relatives of the
full and half blood, and of Article 987,
paragraph 2, concerning division between
the paternal and maternal lines. (912a)

SUBSECTION 1. - Relationship

Art. 963. Proximity of relationship is

determined by the number of generations.
Each generation forms a degree. (915)

Art. 964. A series of degrees forms a line,

which may be either direct or collateral.

A direct line is that constituted by the series

of degrees among ascendants and
descendants.

A collateral line is that constituted by the

series of degrees among persons who are not
ascendants and descendants, but who come
from a common ancestor. (916a)

Art. 965. The direct line is either descending

or ascending.

The former unites the head of the family

with those who descend from him.

The latter binds a person with those from

whom he descends. (917)
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Art. 966. In the line, as many degrees are

counted as there are generations or persons,
excluding the progenitor.

In the direct line, ascent is made to the

common ancestor. Thus, the child is one
degree removed from the parent, two from
the grandfather, and three from the great-
grandparent.

In the collateral line, ascent is made to the

common ancestor and then descent is made
to the person with whom the computation is
to be made. Thus, a person is two degrees
removed from his brother, three from his
uncle, who is the brother of his father, four
from his first cousin, and so forth. (918a)

Art. 967. Full blood relationship is that

existing between persons who have the same
father and the same mother.

Half blood relationship is that existing

between persons who have the same father,
but not the same mother, or the same
mother, but not the same father. (920a)

Art. 968. If there are several relatives of the

same degree, and one or some of them are
unwilling or incapacitated to succeed, his
portion shall accrue to the others of the same
degree, save the right of representation when
it should take place. (922)

Art. 969. If the inheritance should be

repudiated by the nearest relative, should
there be one only, or by all the nearest
relatives called by law to succeed, should
there be several, those of the following
degree shall inherit in their own right and
cannot represent the person or persons
repudiating the inheritance. (923)

SUBSECTION 2. - Right of Representation

Art. 970. Representation is a right created by

fiction of law, by virtue of which the
representative is raised to the place and the
degree of the person represented, and
acquires the rights which the latter would
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have if he were living or if he could have

inherited. (942a)

Art. 971. The representative is called to the

succession by the law and not by the person
represented. The representative does not
succeed the person represented but the one
whom the person represented would have
succeeded. (n)

Art. 972. The right of representation takes

place in the direct descending line, but never
in the ascending.

In the collateral line, it takes place only in

favor of the children of brothers or sisters,
whether they be of the full or half blood.
(925)

Art. 973. In order that representation may

take place, it is necessary that the
representative himself be capable of
succeeding the decedent. (n)

Art. 974. Whenever there is succession by

representation, the division of the estate
shall be made per stirpes, in such manner
that the representative or representatives
shall not inherit more than what the person
they represent would inherit, if he were
living or could inherit. (926a)

Art. 975. When children of one or more

brothers or sisters of the deceased survive,
they shall inherit from the latter by
representation, if they survive with their
uncles or aunts. But if they alone survive,
they shall inherit in equal portions. (927)

Art. 976. A person may represent him whose

inheritance he has renounced. (928a)

Art. 977. Heirs who repudiate their share

may not be represented. (929a)

SECTION 2. - Order of Intestate Succession

SUBSECTION 1. - Descending Direct Line

Art. 978. Succession pertains, in the first

place, to the descending direct line. (930)
 209

Art. 979. Legitimate children and their

descendants succeed the parents and other
ascendants, without distinction as to sex or
age, and even if they should come from
different marriages.

An adopted child succeeds to the property of

the adopting parents in the same manner as a
legitimate child. (931a)

Art. 980. The children of the deceased shall

always inherit from him in their own right,
dividing the inheritance in equal shares.
(932)

Art. 981. Should children of the deceased

and descendants of other children who are
dead, survive, the former shall inherit in
their own right, and the latter by right of
representation. (934a)

Art. 982. The grandchildren and other

descendants shall inherit by right of
representation, and if any one of them
should have died, leaving several heirs, the
portion pertaining to him shall be divided
among the latter in equal portions. (933)

Art. 983. If illegitimate children survive

with legitimate children, the shares of the
former shall be in the proportions prescribed
by Article 895. (n)

Art. 984. In case of the death of an adopted

child, leaving no children or descendants,
his parents and relatives by consanguinity
and not by adoption, shall be his legal heirs.
(n)

SUBSECTION 2. - Ascending Direct Line

Art. 985. In default of legitimate children

and descendants of the deceased, his parents
and ascendants shall inherit from him, to the
exclusion of collateral relatives. (935a)

Art. 986. The father and mother, if living,

shall inherit in equal shares.
 210

Should one only of them survive, he or she

shall succeed to the entire estate of the child.
(936)

Art. 987. In default of the father and mother,

the ascendants nearest in degree shall
inherit.

Should there be more than one of equal

degree belonging to the same line they shall
divide the inheritance per capita; should they
be of different lines but of equal degree,
one-half shall go to the paternal and the
other half to the maternal ascendants. In
each line the division shall be made per
capita. (937)

SUBSECTION 3. - Illegitimate Children

Art. 988. In the absence of legitimate

descendants or ascendants, the illegitimate
children shall succeed to the entire estate of
the deceased. (939a)

Art. 989. If, together with illegitimate

children, there should survive descendants
of another illegitimate child who is dead, the
former shall succeed in their own right and
the latter by right of representation. (940a)

Art. 990. The hereditary rights granted by

the two preceding articles to illegitimate
children shall be transmitted upon their
death to their descendants, who shall inherit
by right of representation from their
deceased grandparent. (941a)

Art. 991. If legitimate ascendants are left,

the illegitimate children shall divide the
inheritance with them, taking one-half of the
estate, whatever be the number of the
ascendants or of the illegitimate children.
(942-841a)

Art. 992. An illegitimate child has no right

to inherit ab intestato from the legitimate
children and relatives of his father or
mother; nor shall such children or relatives
inherit in the same manner from the
illegitimate child. (943a)
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Art. 993. If an illegitimate child should die

without issue, either legitimate or
illegitimate, his father or mother shall
succeed to his entire estate; and if the child's
filiation is duly proved as to both parents,
who are both living, they shall inherit from
him share and share alike. (944)

Art. 994. In default of the father or mother,

an illegitimate child shall be succeeded by
his or her surviving spouse who shall be
entitled to the entire estate.

If the widow or widower should survive

with brothers and sisters, nephews and
nieces, she or he shall inherit one-half of the
estate, and the latter the other half. (945a)

SUBSECTION 4. - Surviving Spouse

Art. 995. In the absence of legitimate

descendants and ascendants, and illegitimate
children and their descendants, whether
legitimate or illegitimate, the surviving
spouse shall inherit the entire estate, without
prejudice to the rights of brothers and
sisters, nephews and nieces, should there be
any, under article 1001. (946a)

Art. 996. If a widow or widower and

legitimate children or descendants are left,
the surviving spouse has in the succession
the same share as that of each of the
children. (834a)

Art. 997. When the widow or widower

survives with legitimate parents or
ascendants, the surviving spouse shall be
entitled to one-half of the estate, and the
legitimate parents or ascendants to the other
half. (836a)

Art. 998. If a widow or widower survives

with illegitimate children, such widow or
widower shall be entitled to one-half of the
inheritance, and the illegitimate children or
their descendants, whether legitimate or
illegitimate, to the other half. (n)
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Art. 999. When the widow or widower

survives with legitimate children or their
descendants and illegitimate children or
their descendants, whether legitimate or
illegitimate, such widow or widower shall
be entitled to the same share as that of a
legitimate child. (n)

Art. 1000. If legitimate ascendants, the

surviving spouse, and illegitimate children
are left, the ascendants shall be entitled to
one-half of the inheritance, and the other
half shall be divided between the surviving
spouse and the illegitimate children so that
such widow or widower shall have one-
fourth of the estate, and the illegitimate
children the other fourth. (841a)

Art. 1001. Should brothers and sisters or

their children survive with the widow or
widower, the latter shall be entitled to one-
half of the inheritance and the brothers and
sisters or their children to the other half.
(953, 837a)

Art. 1002. In case of a legal separation, if

the surviving spouse gave cause for the
separation, he or she shall not have any of
the rights granted in the preceding articles.
(n)

SUBSECTION 5. - Collateral Relatives

Art. 1003. If there are no descendants,

ascendants, illegitimate children, or a
surviving spouse, the collateral relatives
shall succeed to the entire estate of the
deceased in accordance with the following
articles. (946a)

Art. 1004. Should the only survivors be

brothers and sisters of the full blood, they
shall inherit in equal shares. (947)

Art. 1005. Should brothers and sisters

survive together with nephews and nieces,
who are the children of the descendant's
brothers and sisters of the full blood, the
former shall inherit per capita, and the latter
per stirpes. (948)
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Art. 1006. Should brother and sisters of the

full blood survive together with brothers and
sisters of the half blood, the former shall be
entitled to a share double that of the latter.
(949)

Art. 1007. In case brothers and sisters of the

half blood, some on the father's and some on
the mother's side, are the only survivors, all
shall inherit in equal shares without
distinction as to the origin of the property.
(950)

Art. 1008. Children of brothers and sisters of

the half blood shall succeed per capita or per
stirpes, in accordance with the rules laid
down for the brothers and sisters of the full
blood. (915)

Art. 1009. Should there be neither brothers

nor sisters nor children of brothers or sisters,
the other collateral relatives shall succeed to
the estate.

The latter shall succeed without distinction

of lines or preference among them by reason
of relationship by the whole blood. (954a)

Art. 1010. The right to inherit ab intestato

shall not extend beyond the fifth degree of
relationship in the collateral line. (955a)

SUBSECTION 6. - The State

Art. 1011. In default of persons entitled to

succeed in accordance with the provisions of
the preceding Sections, the State shall
inherit the whole estate. (956a)

Art. 1012. In order that the State may take

possession of the property mentioned in the
preceding article, the pertinent provisions of
the Rules of Court must be observed. (958a)

Art. 1013. After the payment of debts and

charges, the personal property shall be
assigned to the municipality or city where
the deceased last resided in the Philippines,
and the real estate to the municipalities or
cities, respectively, in which the same is
situated.
 214

If the deceased never resided in the

Philippines, the whole estate shall be
assigned to the respective municipalities or
cities where the same is located.

Such estate shall be for the benefit of public

schools, and public charitable institutions
and centers, in such municipalities or cities.
The court shall distribute the estate as the
respective needs of each beneficiary may
warrant.

The court, at the instance of an interested

party, or on its own motion, may order the
establishment of a permanent trust, so that
only the income from the property shall be
used. (956a)

Art. 1014. If a person legally entitled to the

estate of the deceased appears and files a
claim thereto with the court within five
years from the date the property was
delivered to the State, such person shall be
entitled to the possession of the same, or if
sold the municipality or city shall be
accountable to him for such part of the
proceeds as may not have been lawfully
spent. (n)

CHAPTER 4
PROVISIONS COMMON TO TESTATE
AND INTESTATE SUCCESSIONS

SECTION 1. - Right of Accretion

Art. 1015. Accretion is a right by virtue of

which, when two or more persons are called
to the same inheritance, devise or legacy, the
part assigned to the one who renounces or
cannot receive his share, or who died before
the testator, is added or incorporated to that
of his co-heirs, co-devisees, or co-legatees.
(n)

Art. 1016. In order that the right of accretion

may take place in a testamentary succession,
it shall be necessary:

(1) That two or more persons be

called to the same inheritance, or to
 215

the same portion thereof, pro indiviso;

and

(2) That one of the persons thus called

die before the testator, or renounce the
inheritance, or be incapacitated to
receive it. (928a)

Art. 1017. The words "one-half for each" or

"in equal shares" or any others which,
though designating an aliquot part, do not
identify it by such description as shall make
each heir the exclusive owner of determinate
property, shall not exclude the right of
accretion.

In case of money or fungible goods, if the

share of each heir is not earmarked, there
shall be a right of accretion. (983a)

Art. 1018. In legal succession the share of

the person who repudiates the inheritance
shall always accrue to his co-heirs. (981)

Art. 1019. The heirs to whom the portion

goes by the right of accretion take it in the
same proportion that they inherit. (n)

Art. 1020. The heirs to whom the

inheritance accrues shall succeed to all the
rights and obligations which the heir who
renounced or could not receive it would
have had. (984)

Art. 1021. Among the compulsory heirs the

right of accretion shall take place only when
the free portion is left to two or more of
them, or to any one of them and to a
stranger.

Should the part repudiated be the legitime,

the other co-heirs shall succeed to it in their
own right, and not by the right of accretion.
(985)

Art. 1022. In testamentary succession, when

the right of accretion does not take place, the
vacant portion of the instituted heirs, if no
substitute has been designated, shall pass to
the legal heirs of the testator, who shall
receive it with the same charges and
obligations. (986)
 216

Art. 1023. Accretion shall also take place

among devisees, legatees and usufructuaries
under the same conditions established for
heirs. (987a)

SECTION 2. - Capacity to Succeed by Will

of by Intestacy

Art. 1024. Persons not incapacitated by law

may succeed by will or ab intestato.

The provisions relating to incapacity by will

are equally applicable to intestate
succession. (744, 914)

Art. 1025. In order to be capacitated to

inherit, the heir, devisee or legatee must be
living at the moment the succession opens,
except in case of representation, when it is
proper.

A child already conceived at the time of the

death of the decedent is capable of
succeeding provided it be born later under
the conditions prescribed in article 41. (n)

Art. 1026. A testamentary disposition may

be made to the State, provinces, municipal
corporations, private corporations,
organizations, or associations for religious,
scientific, cultural, educational, or charitable
purposes.

All other corporations or entities may

succeed under a will, unless there is a
provision to the contrary in their charter or
the laws of their creation, and always subject
to the same. (746a)

Art. 1027. The following are incapable of

succeeding:

(1) The priest who heard the

confession of the testator during his
last illness, or the minister of the
gospel who extended spiritual aid to
him during the same period;

(2) The relatives of such priest or

minister of the gospel within the
fourth degree, the church, order,
 217

chapter, community, organization, or

institution to which such priest or
minister may belong;

(3) A guardian with respect to

testamentary dispositions given by a
ward in his favor before the final
accounts of the guardianship have
been approved, even if the testator
should die after the approval thereof;
nevertheless, any provision made by
the ward in favor of the guardian
when the latter is his ascendant,
descendant, brother, sister, or spouse,
shall be valid;

(4) Any attesting witness to the

execution of a will, the spouse,
parents, or children, or any one
claiming under such witness, spouse,
parents, or children;

(5) Any physician, surgeon, nurse,

health officer or druggist who took
care of the testator during his last
illness;

(6) Individuals, associations and

corporations not permitted by law to
inherit. (745, 752, 753, 754a)

Art. 1028. The prohibitions mentioned in

article 739, concerning donations inter vivos
shall apply to testamentary provisions. (n)

Art. 1029. Should the testator dispose of the

whole or part of his property for prayers and
pious works for the benefit of his soul, in
general terms and without specifying its
application, the executor, with the court's
approval shall deliver one-half thereof or its
proceeds to the church or denomination to
which the testator may belong, to be used
for such prayers and pious works, and the
other half to the State, for the purposes
mentioned in Article 1013. (747a)

Art. 1030. Testamentary provisions in favor

of the poor in general, without designation
of particular persons or of any community,
shall be deemed limited to the poor living in
 218

the domicile of the testator at the time of his

death, unless it should clearly appear that his
intention was otherwise.

The designation of the persons who are to be

considered as poor and the distribution of
the property shall be made by the person
appointed by the testator for the purpose; in
default of such person, by the executor, and
should there be no executor, by the justice of
the peace, the mayor, and the municipal
treasurer, who shall decide by a majority of
votes all questions that may arise. In all
these cases, the approval of the Court of
First Instance shall be necessary.

The preceding paragraph shall apply when

the testator has disposed of his property in
favor of the poor of a definite locality.
(749a)

Art. 1031. A testamentary provision in favor

of a disqualified person, even though made
under the guise of an onerous contract, or
made through an intermediary, shall be void.
(755)

Art. 1032. The following are incapable of

succeeding by reason of unworthiness:

(1) Parents who have abandoned their

children or induced their daughters to
lead a corrupt or immoral life, or
attempted against their virtue;

(2) Any person who has been

convicted of an attempt against the
life of the testator, his or her spouse,
descendants, or ascendants;

(3) Any person who has accused the

testator of a crime for which the law
prescribes imprisonment for six years
or more, if the accusation has been
found groundless;

(4) Any heir of full age who, having

knowledge of the violent death of the
testator, should fail to report it to an
officer of the law within a month,
unless the authorities have already
taken action; this prohibition shall not
 219

apply to cases wherein, according to

law, there is no obligation to make an
accusation;

(5) Any person convicted of adultery

or concubinage with the spouse of the
testator;

(6) Any person who by fraud,

violence, intimidation, or undue
influence should cause the testator to
make a will or to change one already
made;

(7) Any person who by the same

means prevents another from making
a will, or from revoking one already
made, or who supplants, conceals, or
alters the latter's will;

(8) Any person who falsifies or forges

a supposed will of the decedent. (756,
673, 674a)

Art. 1033. The cause of unworthiness shall

be without effect if the testator had
knowledge thereof at the time he made the
will, or if, having known of them
subsequently, he should condone them in
writing. (757a)

Art. 1034. In order to judge the capacity of

the heir, devisee or legatee, his qualification
at the time of the death of the decedent shall
be the criterion.

In cases falling under Nos. 2, 3, or 5 of

Article 1032, it shall be necessary to wait
until final judgment is rendered, and in the
case falling under No. 4, the expiration of
the month allowed for the report.

If the institution, devise or legacy should be

conditional, the time of the compliance with
the condition shall also be considered.
(758a)

Art. 1035. If the person excluded from the

inheritance by reason of incapacity should
be a child or descendant of the decedent and
should have children or descendants, the
latter shall acquire his right to the legitime.
 220

The person so excluded shall not enjoy the

usufruct and administration of the property
thus inherited by his children. (761a)

Art. 1036. Alienations of hereditary

property, and acts of administration
performed by the excluded heir, before the
judicial order of exclusion, are valid as to
the third persons who acted in good faith;
but the co-heirs shall have a right to recover
damages from the disqualified heir. (n)

Art. 1037. The unworthy heir who is

excluded from the succession has a right to
demand indemnity or any expenses incurred
in the preservation of the hereditary
property, and to enforce such credits as he
may have against the estate. (n)

Art. 1038. Any person incapable of

succession, who, disregarding the
prohibition stated in the preceding articles,
entered into the possession of the hereditary
property, shall be obliged to return it
together it its accessions.

He shall be liable for all the fruits and rents

he may have received, or could have
received through the exercise of due
diligence. (760a)

Art. 1039. Capacity to succeed is governed

by the law of the nation of the decedent. (n)

Art. 1040. The action for a declaration of

incapacity and for the recovery of the
inheritance, devise or legacy shall be
brought within five years from the time the
disqualified person took possession thereof.
It may be brought by any one who may have
an interest in the succession. (762a)

SECTION 3. - Acceptance and Repudiation

of the Inheritance

Art. 1041. The acceptance or repudiation of

the inheritance is an act which is purely
voluntary and free. (988)
 221

Art. 1042. The effects of the acceptance or

repudiation shall always retroact to the
moment of the death of the decedent. (989)

Art. 1043. No person may accept or

repudiate an inheritance unless he is certain
of the death of the person from whom he is
to inherit, and of his right to the inheritance.
(991)

Art. 1044. Any person having the free

disposal of his property may accept or
repudiate an inheritance.

Any inheritance left to minors or

incapacitated persons may be accepted by
their parents or guardians. Parents or
guardians may repudiate the inheritance left
to their wards only by judicial authorization.

The right to accept an inheritance left to the

poor shall belong to the persons designated
by the testator to determine the beneficiaries
and distribute the property, or in their
default, to those mentioned in Article 1030.
(992a)

Art. 1045. The lawful representatives of

corporations, associations, institutions and
entities qualified to acquire property may
accept any inheritance left to the latter, but
in order to repudiate it, the approval of the
court shall be necessary. (993a)

Art. 1046. Public official establishments can

neither accept nor repudiate an inheritance
without the approval of the government.
(994)

Art. 1047. A married woman of age may

repudiate an inheritance without the consent
of her husband. (995a)

Art. 1048. Deaf-mutes who can read and

write may accept or repudiate the
inheritance personally or through an agent.
Should they not be able to read and write,
the inheritance shall be accepted by their
guardians. These guardians may repudiate
the same with judicial approval. (996a)
 222

Art. 1049. Acceptance may be express or

tacit.

An express acceptance must be made in a

public or private document.

A tacit acceptance is one resulting from acts

by which the intention to accept is
necessarily implied, or which one would
have no right to do except in the capacity of
an heir.

Acts of mere preservation or provisional

administration do not imply an acceptance
of the inheritance if, through such acts, the
title or capacity of an heir has not been
assumed. (999a)

Art. 1050. An inheritance is deemed

accepted:

(1) If the heirs sells, donates, or

assigns his right to a stranger, or to his
co-heirs, or to any of them;

(2) If the heir renounces the same,

even though gratuitously, for the
benefit of one or more of his co-heirs;

(3) If he renounces it for a price in

favor of all his co-heirs
indiscriminately; but if this
renunciation should be gratuitous, and
the co-heirs in whose favor it is made
are those upon whom the portion
renounced should devolve by virtue of
accretion, the inheritance shall not be
deemed as accepted. (1000)

Art. 1051. The repudiation of an inheritance

shall be made in a public or authentic
instrument, or by petition presented to the
court having jurisdiction over the
testamentary or intestate proceedings.
(1008)

Art. 1052. If the heir repudiates the

inheritance to the prejudice of his own
creditors, the latter may petition the court to
authorize them to accept it in the name of
the heir.
 223

The acceptance shall benefit the creditors

only to an extent sufficient to cover the
amount of their credits. The excess, should
there be any, shall in no case pertain to the
renouncer, but shall be adjudicated to the
persons to whom, in accordance with the
rules established in this Code, it may belong.
(1001)

Art. 1053. If the heir should die without

having accepted or repudiated the
inheritance his right shall be transmitted to
his heirs. (1006)

Art. 1054. Should there be several heirs

called to the inheritance, some of them may
accept and the others may repudiate it.
(1007a)

Art. 1055. If a person, who is called to the

same inheritance as an heir by will and ab
intestato, repudiates the inheritance in his
capacity as a testamentary heir, he is
understood to have repudiated it in both
capacities.

Should he repudiate it as an intestate heir,

without knowledge of his being a
testamentary heir, he may still accept it in
the latter capacity. (1009)

Art. 1056. The acceptance or repudiation of

an inheritance, once made, is irrevocable,
and cannot be impugned, except when it was
made through any of the causes that vitiate
consent, or when an unknown will appears.
(997)

Art. 1057. Within thirty days after the court

has issued an order for the distribution of the
estate in accordance with the Rules of Court,
the heirs, devisees and legatees shall signify
to the court having jurisdiction whether they
accept or repudiate the inheritance.

If they do not do so within that time, they

are deemed to have accepted the inheritance.
(n)

SECTION 4. - Executors and Administrators

 224

Art. 1058. All matters relating to the

appointment, powers and duties of executors
and administrators and concerning the
administration of estates of deceased
persons shall be governed by the Rules of
Court. (n)

Art. 1059. If the assets of the estate of a

decedent which can be applied to the
payment of debts are not sufficient for that
purpose, the provisions of Articles 2239 to
2251 on Preference of Credits shall be
observed, provided that the expenses
referred to in Article 2244, No. 8, shall be
those involved in the administration of the
decedent's estate. (n)

Art. 1060. A corporation or association

authorized to conduct the business of a trust
company in the Philippines may be
appointed as an executor, administrator,
guardian of an estate, or trustee, in like
manner as an individual; but it shall not be
appointed guardian of the person of a ward.
(n)

SECTION 5. - Collation

Art. 1061. Every compulsory heir, who

succeeds with other compulsory heirs, must
bring into the mass of the estate any
property or right which he may have
received from the decedent, during the
lifetime of the latter, by way of donation, or
any other gratuitous title, in order that it may
be computed in the determination of the
legitime of each heir, and in the account of
the partition. (1035a)

Art. 1062. Collation shall not take place

among compulsory heirs if the donor should
have so expressly provided, or if the donee
should repudiate the inheritance, unless the
donation should be reduced as inofficious.
(1036)

Art. 1063. Property left by will is not

deemed subject to collation, if the testator
 225

has not otherwise provided, but the legitime

shall in any case remain unimpaired. (1037)

Art. 1064. When the grandchildren, who

survive with their uncles, aunts, or cousins,
inherit from their grandparents in
representation of their father or mother, they
shall bring to collation all that their parents,
if alive, would have been obliged to bring,
even though such grandchildren have not
inherited the property.

They shall also bring to collation all that

they may have received from the decedent
during his lifetime, unless the testator has
provided otherwise, in which case his
wishes must be respected, if the legitime of
the co-heirs is not prejudiced. (1038)

Art. 1065. Parents are not obliged to bring to

collation in the inheritance of their
ascendants any property which may have
been donated by the latter to their children.
(1039)

Art. 1066. Neither shall donations to the

spouse of the child be brought to collation;
but if they have been given by the parent to
the spouses jointly, the child shall be obliged
to bring to collation one-half of the thing
donated. (1040)

Art. 1067. Expenses for support, education,

medical attendance, even in extraordinary
illness, apprenticeship, ordinary equipment,
or customary gifts are not subject to
collation. (1041)

Art. 1068. Expenses incurred by the parents

in giving their children a professional,
vocational or other career shall not be
brought to collation unless the parents so
provide, or unless they impair the legitime;
but when their collation is required, the sum
which the child would have spent if he had
lived in the house and company of his
parents shall be deducted therefrom. (1042a)

Art. 1069. Any sums paid by a parent in

satisfaction of the debts of his children,
election expenses, fines, and similar
 226

expenses shall be brought to collation.

(1043a)

Art. 1070. Wedding gifts by parents and

ascendants consisting of jewelry, clothing,
and outfit, shall not be reduced as
inofficious except insofar as they may
exceed one-tenth of the sum which is
disposable by will. (1044)

Art. 1071. The same things donated are not

to be brought to collation and partition, but
only their value at the time of the donation,
even though their just value may not then
have been assessed.

Their subsequent increase or deterioration

and even their total loss or destruction, be it
accidental or culpable, shall be for the
benefit or account and risk of the donee.
(1045a)

Art. 1072. In the collation of a donation

made by both parents, one-half shall be
brought to the inheritance of the father, and
the other half, to that of the mother. That
given by one alone shall be brought to
collation in his or her inheritance. (1046a)

Art. 1073. The donee's share of the estate

shall be reduced by an amount equal to that
already received by him; and his co-heirs
shall receive an equivalent, as much as
possible, in property of the same nature,
class and quality. (1047)

Art. 1074. Should the provisions of the

preceding article be impracticable, if the
property donated was immovable, the co-
heirs shall be entitled to receive its
equivalent in cash or securities, at the rate of
quotation; and should there be neither cash
or marketable securities in the estate, so
much of the other property as may be
necessary shall be sold at public auction.

If the property donated was movable, the co-

heirs shall only have a right to select an
equivalent of other personal property of the
inheritance at its just price. (1048)
 227

Art. 1075. The fruits and interest of the

property subject to collation shall not pertain
to the estate except from the day on which
the succession is opened.

For the purpose of ascertaining their

amount, the fruits and interest of the
property of the estate of the same kind and
quality as that subject to collation shall be
made the standard of assessment. (1049)

Art. 1076. The co-heirs are bound to

reimburse to the donee the necessary
expenses which he has incurred for the
preservation of the property donated to him,
though they may not have augmented its
value.

The donee who collates in kind an

immovable which has been given to him
must be reimbursed by his co-heirs for the
improvements which have increased the
value of the property, and which exist at the
time the partition if effected.

As to works made on the estate for the mere

pleasure of the donee, no reimbursement is
due him for them; he has, however, the right
to remove them, if he can do so without
injuring the estate. (n)

Art. 1077. Should any question arise among

the co-heirs upon the obligation to bring to
collation or as to the things which are
subject to collation, the distribution of the
estate shall not be interrupted for this reason,
provided adequate security is given. (1050)

SECTION 6. - Partition and Distribution of

the Estate

SUBSECTION 1. - Partition

Art. 1078. Where there are two or more

heirs, the whole estate of the decedent is,
before its partition, owned in common by
such heirs, subject to the payment of debts
of the deceased. (n)
 228

Art. 1079. Partition, in general, is the

separation, division and assignment of a
thing held in common among those to whom
it may belong. The thing itself may be
divided, or its value. (n)

Art. 1080. Should a person make partition of

his estate by an act inter vivos, or by will,
such partition shall be respected, insofar as it
does not prejudice the legitime of the
compulsory heirs.

A parent who, in the interest of his or her

family, desires to keep any agricultural,
industrial, or manufacturing enterprise
intact, may avail himself of the right granted
him in this article, by ordering that the
legitime of the other children to whom the
property is not assigned, be paid in cash.
(1056a)

Art. 1081. A person may, by an act inter

vivos or mortis causa, intrust the mere
power to make the partition after his death to
any person who is not one of the co-heirs.

The provisions of this and of the preceding

article shall be observed even should there
be among the co-heirs a minor or a person
subject to guardianship; but the mandatary,
in such case, shall make an inventory of the
property of the estate, after notifying the co-
heirs, the creditors, and the legatees or
devisees. (1057a)

Art. 1082. Every act which is intended to put

an end to indivision among co-heirs and
legatees or devisees is deemed to be a
partition, although it should purport to be a
sale, and exchange, a compromise, or any
other transaction. (n)

Art. 1083. Every co-heir has a right to

demand the division of the estate unless the
testator should have expressly forbidden its
partition, in which case the period of
indivision shall not exceed twenty years as
provided in article 494. This power of the
testator to prohibit division applies to the
legitime.
 229

Even though forbidden by the testator, the

co-ownership terminates when any of the
causes for which partnership is dissolved
takes place, or when the court finds for
compelling reasons that division should be
ordered, upon petition of one of the co-heirs.
(1051a)

Art. 1084. Voluntary heirs upon whom some

condition has been imposed cannot demand
a partition until the condition has been
fulfilled; but the other co-heirs may demand
it by giving sufficient security for the rights
which the former may have in case the
condition should be complied with, and until
it is known that the condition has not been
fulfilled or can never be complied with, the
partition shall be understood to be
provisional. (1054a)

Art. 1085. In the partition of the estate,

equality shall be observed as far as possible,
dividing the property into lots, or assigning
to each of the co-heirs things of the same
nature, quality and kind. (1061)

Art. 1086. Should a thing be indivisible, or

would be much impaired by its being
divided, it may be adjudicated to one of the
heirs, provided he shall pay the others the
excess in cash.

Nevertheless, if any of the heirs should

demand that the thing be sold at public
auction and that strangers be allowed to bid,
this must be done. (1062)

Art. 1087. In the partition the co-heirs shall

reimburse one another for the income and
fruits which each one of them may have
received from any property of the estate, for
any useful and necessary expenses made
upon such property, and for any damage
thereto through malice or neglect. (1063)

Art. 1088. Should any of the heirs sell his

hereditary rights to a stranger before the
partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by
reimbursing him for the price of the sale,
provided they do so within the period of one
 230

month from the time they were notified in

writing of the sale by the vendor. (1067a)

Art. 1089. The titles of acquisition or

ownership of each property shall be
delivered to the co-heir to whom said
property has been adjudicated. (1065a)

Art. 1090. When the title comprises two or

more pieces of land which have been
assigned to two or more co-heirs, or when it
covers one piece of land which has been
divided between two or more co-heirs, the
title shall be delivered to the one having the
largest interest, and authentic copies of the
title shall be furnished to the other co-heirs
at the expense of the estate. If the interest of
each co-heir should be the same, the oldest
shall have the title. (1066a)

SUBSECTION 2. - Effects of Partition

Art. 1091. A partition legally made confers

upon each heir the exclusive ownership of
the property adjudicated to him. (1068)

Art. 1092. After the partition has been made,

the co-heirs shall be reciprocally bound to
warrant the title to, and the quality of, each
property adjudicated. (1069a)

Art. 1093. The reciprocal obligation of

warranty referred to in the preceding article
shall be proportionate to the respective
hereditary shares of the co-heirs, but if any
one of them should be insolvent, the other
co-heirs shall be liable for his part in the
same proportion, deducting the part
corresponding to the one who should be
indemnified.

Those who pay for the insolvent heir shall

have a right of action against him for
reimbursement, should his financial
condition improve. (1071)

Art. 1094. An action to enforce the warranty

among heirs must be brought within ten
years from the date the right of action
accrues. (n)
 231

Art. 1095. If a credit should be assigned as

collectible, the co-heirs shall not be liable
for the subsequent insolvency of the debtor
of the estate, but only for his insolvency at
the time the partition is made.

The warranty of the solvency of the debtor

can only be enforced during the five years
following the partition.

Co-heirs do not warrant bad debts, if so

known to, and accepted by, the distributee.
But if such debts are not assigned to a co-
heir, and should be collected, in whole or in
part, the amount collected shall be
distributed proportionately among the heirs.
(1072a)

Art. 1096. The obligation of warranty

among co-heirs shall cease in the following
cases:

(1) When the testator himself has

made the partition, unless it appears,
or it may be reasonably presumed,
that his intention was otherwise, but
the legitime shall always remain
unimpaired;

(2) When it has been so expressly

stipulated in the agreement of
partition, unless there has been bad
faith;

(3) When the eviction is due to a

cause subsequent to the partition, or
has been caused by the fault of the
distributee of the property. (1070a)

SUBSECTION 3. - Rescission and Nullity

of Partition

Art. 1097. A partition may be rescinded or

annulled for the same causes as contracts.
(1073a)

Art. 1098. A partition, judicial or extra-

judicial, may also be rescinded on account
of lesion, when any one of the co-heirs
received things whose value is less, by at
least one-fourth, than the share to which he
is entitled, considering the value of the
 232

things at the time they were adjudicated.

(1074a)

Art. 1099. The partition made by the testator

cannot be impugned on the ground of lesion,
except when the legitime of the compulsory
heirs is thereby prejudiced, or when it
appears or may reasonably be presumed,
that the intention of the testator was
otherwise. (1075)

Art. 1100. The action for rescission on

account of lesion shall prescribe after four
years from the time the partition was made.
(1076)

Art. 1101. The heir who is sued shall have

the option of indemnifying the plaintiff for
the loss, or consenting to a new partition.

Indemnity may be made by payment in cash

or by the delivery of a thing of the same
kind and quality as that awarded to the
plaintiff.

If a new partition is made, it shall affect

neither those who have not been prejudiced
nor those have not received more than their
just share. (1077a)

Art. 1102. An heir who has alienated the

whole or a considerable part of the real
property adjudicated to him cannot maintain
an action for rescission on the ground of
lesion, but he shall have a right to be
indemnified in cash. (1078a)

Art. 1103. The omission of one or more

objects or securities of the inheritance shall
not cause the rescission of the partition on
the ground of lesion, but the partition shall
be completed by the distribution of the
objects or securities which have been
omitted. (1079a)

Art. 1104. A partition made with preterition

of any of the compulsory heirs shall not be
rescinded, unless it be proved that there was
bad faith or fraud on the part of the other
persons interested; but the latter shall be
proportionately obliged to pay to the person
 233

omitted the share which belongs to him.

(1080)

Art. 1105. A partition which includes a

person believed to be an heir, but who is not,
shall be void only with respect to such
person. (1081a)

Title V. - PRESCRIPTION

CHAPTER 1
GENERAL PROVISIONS

Art. 1106. By prescription, one acquires

ownership and other real rights through the
lapse of time in the manner and under the
conditions laid down by law.

In the same way, rights and conditions are

lost by prescription. (1930a)

Art. 1107. Persons who are capable of

acquiring property or rights by the other
legal modes may acquire the same by means
of prescription.

Minors and other incapacitated persons may

acquire property or rights by prescription,
either personally or through their parents,
guardians or legal representatives. (1931a)

Art. 1108. Prescription, both acquisitive and

extinctive, runs against:

(1) Minors and other incapacitated

persons who have parents, guardians
or other legal representatives;

(2) Absentees who have

administrators, either appointed by
them before their disappearance, or
appointed by the courts;

(3) Persons living abroad, who have

managers or administrators;

(4) Juridical persons, except the State

and its subdivisions.

Persons who are disqualified from

administering their property have a
 234

right to claim damages from their

legal representatives whose
negligence has been the cause of
prescription. (1932a)

Art. 1109. Prescription does not run between

husband and wife, even though there be a
separation of property agreed upon in the
marriage settlements or by judicial decree.

Neither does prescription run between

parents and children, during the minority or
insanity of the latter, and between guardian
and ward during the continuance of the
guardianship. (n)

Art. 1110. Prescription, acquisitive and

extinctive, runs in favor of, or against a
married woman. (n)

Art. 1111. Prescription obtained by a co-

proprietor or a co-owner shall benefit the
others. (1933)

Art. 1112. Persons with capacity to alienate

property may renounce prescription already
obtained, but not the right to prescribe in the
future.

Prescription is deemed to have been tacitly

renounced when the renunciation results
from acts which imply the abandonment of
the right acquired. (1935)

Art. 1113. All things which are within the

commerce of men are susceptible of
prescription, unless otherwise provided.
Property of the State or any of its
subdivisions not patrimonial in character
shall not be the object of prescription.
(1936a)

Art. 1114. Creditors and all other persons

interested in making the prescription
effective may avail themselves thereof
notwithstanding the express or tacit
renunciation by the debtor or proprietor.
(1937)

Art. 1115. The provisions of the present Title

are understood to be without prejudice to
what in this Code or in special laws is
 235

established with respect to specific cases of

prescription. (1938)

Art. 1116. Prescription already running

before the effectivity of this Code shall be
governed by laws previously in force; but if
since the time this Code took effect the
entire period herein required for prescription
should elapse, the present Code shall be
applicable, even though by the former laws a
longer period might be required. (1939)

CHAPTER 2
PRESCRIPTION OF OWNERSHIP AND
OTHER REAL RIGHTS

Art. 1117. Acquisitive prescription of

dominion and other real rights may be
ordinary or extraordinary.

Ordinary acquisitive prescription requires

possession of things in good faith and with
just title for the time fixed by law. (1940a)

Art. 1118. Possession has to be in the

concept of an owner, public, peaceful and
uninterrupted. (1941)

Art. 1119. Acts of possessory character

executed in virtue of license or by mere
tolerance of the owner shall not be available
for the purposes of possession. (1942)

Art. 1120. Possession is interrupted for the

purposes of prescription, naturally or civilly.
(1943)

Art. 1121. Possession is naturally interrupted

when through any cause it should cease for
more than one year.

The old possession is not revived if a new

possession should be exercised by the same
adverse claimant. (1944a)

Art. 1122. If the natural interruption is for

only one year or less, the time elapsed shall
be counted in favor of the prescription. (n)

Art. 1123. Civil interruption is produced by

judicial summons to the possessor. (1945a)
 236

Art. 1124. Judicial summons shall be

deemed not to have been issued and shall
not give rise to interruption:

(1) If it should be void for lack of

legal solemnities;

(2) If the plaintiff should desist from

the complaint or should allow the
proceedings to lapse;

(3) If the possessor should be

absolved from the complaint.

In all these cases, the period of the

interruption shall be counted for the
prescription. (1946a)

Art. 1125. Any express or tacit recognition

which the possessor may make of the
owner's right also interrupts possession.
(1948)

Art. 1126. Against a title recorded in the

Registry of Property, ordinary prescription
of ownership or real rights shall not take
place to the prejudice of a third person,
except in virtue of another title also
recorded; and the time shall begin to run
from the recording of the latter.

As to lands registered under the Land

Registration Act, the provisions of that
special law shall govern. (1949a)

Art. 1127. The good faith of the possessor

consists in the reasonable belief that the
person from whom he received the thing
was the owner thereof, and could transmit
his ownership. (1950a)

Art. 1128. The conditions of good faith

required for possession in Articles 526, 527,
528, and 529 of this Code are likewise
necessary for the determination of good faith
in the prescription of ownership and other
real rights. (1951)

Art. 1129. For the purposes of prescription,

there is just title when the adverse claimant
came into possession of the property through
one of the modes recognized by law for the
 237

acquisition of ownership or other real rights,

but the grantor was not the owner or could
not transmit any right. (n)

Art. 1130. The title for prescription must be

true and valid. (1953)

Art. 1131. For the purposes of prescription,

just title must be proved; it is never
presumed. (1954a)

Art. 1132. The ownership of movables

prescribes through uninterrupted possession
for four years in good faith.

The ownership of personal property also

prescribes through uninterrupted possession
for eight years, without need of any other
condition.

With regard to the right of the owner to

recover personal property lost or of which
he has been illegally deprived, as well as
with respect to movables acquired in a
public sale, fair, or market, or from a
merchant's store the provisions of Articles
559 and 1505 of this Code shall be
observed. (1955a)

Art. 1133. Movables possessed through a

crime can never be acquired through
prescription by the offender. (1956a)

Art. 1134. Ownership and other real rights

over immovable property are acquired by
ordinary prescription through possession of
ten years. (1957a)

Art. 1135. In case the adverse claimant

possesses by mistake an area greater, or less
than that expressed in his title, prescription
shall be based on the possession. (n)

Art. 1136. Possession in wartime, when the

civil courts are not open, shall not be
counted in favor of the adverse claimant.

Art. 1137. Ownership and other real rights

over immovables also prescribe through
uninterrupted adverse possession thereof for
thirty years, without need of title or of good
faith. (1959a)
 238

Art. 1138. In the computation of time

necessary for prescription the following
rules shall be observed:

(1) The present possessor may

complete the period necessary for
prescription by tacking his possession
to that of his grantor or predecessor in
interest;

(2) It is presumed that the present

possessor who was also the possessor
at a previous time, has continued to be
in possession during the intervening
time, unless there is proof to the
contrary;

(3) The first day shall be excluded and

the last day included. (1960a)

CHAPTER 3
PRESCRIPTION OF ACTIONS

Art. 1139. Actions prescribe by the mere

lapse of time fixed by law. (1961)

Art. 1140. Actions to recover movables shall

prescribe eight years from the time the
possession thereof is lost, unless the
possessor has acquired the ownership by
prescription for a less period, according to
Articles 1132, and without prejudice to the
provisions of Articles 559, 1505, and 1133.
(1962a)

Art. 1141. Real actions over immovables

prescribe after thirty years.

This provision is without prejudice to what

is established for the acquisition of
ownership and other real rights by
prescription. (1963)

Art. 1142. A mortgage action prescribes

after ten years. (1964a)

Art. 1143. The following rights, among

others specified elsewhere in this Code, are
not extinguished by prescription:

(1) To demand a right of way,

regulated in Article 649;
 239

(2) To bring an action to abate a

public or private nuisance. (n)

Art. 1144. The following actions must be

brought within ten years from the time the
right of action accrues:
(1) Upon a written contract;

(2) Upon an obligation created by

law;

(3) Upon a judgment. (n)

Art. 1145. The following actions must be

commenced within six years:
(1) Upon an oral contract;

(2) Upon a quasi-contract. (n)

Art. 1146. The following actions must be

instituted within four years:
(1) Upon an injury to the rights of the
plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out

of any act, activity, or conduct of any public
officer involving the exercise of powers or
authority arising from Martial Law
including the arrest, detention and/or trial of
the plaintiff, the same must be brought
within one (1) year. (As amended by PD No.
1755, Dec. 24, 1980.)

Art. 1147. The following actions must be

filed within one year:

(1) For forcible entry and detainer;

(2) For defamation. (n)

Art. 1148. The limitations of action

mentioned in Articles 1140 to 1142, and
1144 to 1147 are without prejudice to those
specified in other parts of this Code, in the
Code of Commerce, and in special laws. (n)

Art. 1149. All other actions whose periods

are not fixed in this Code or in other laws
must be brought within five years from the
time the right of action accrues. (n)
 240

Art. 1150. The time for prescription for all

kinds of actions, when there is no special
provision which ordains otherwise, shall be
counted from the day they may be brought.
(1969)

Art. 1151. The time for the prescription of

actions which have for their object the
enforcement of obligations to pay principal
with interest or annuity runs from the last
payment of the annuity or of the interest.
(1970a)

Art. 1152. The period for prescription of

actions to demand the fulfillment of
obligation declared by a judgment
commences from the time the judgment
became final. (1971)

Art. 1153. The period for prescription of

actions to demand accounting runs from the
day the persons who should render the same
cease in their functions.

The period for the action arising from the

result of the accounting runs from the date
when said result was recognized by
agreement of the interested parties. (1972)

Art. 1154. The period during which the

obligee was prevented by a fortuitous event
from enforcing his right is not reckoned
against him. (n)

Art. 1155. The prescription of actions is

interrupted when they are filed before the
court, when there is a written extrajudicial
demand by the creditors, and when there is
any written acknowledgment of the debt by
the debtor. (1973a)

BOOK IV

OBLIGATIONS AND CONTRACTS

Title. I. - OBLIGATIONS

CHAPTER 1
GENERAL PROVISIONS
 241

Art. 1156. An obligation is a juridical

necessity to give, to do or not to do. (n)

Art. 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by

law; and

(5) Quasi-delicts. (1089a)

Art. 1158. Obligations derived from law are

not presumed. Only those expressly
determined in this Code or in special laws
are demandable, and shall be regulated by
the precepts of the law which establishes
them; and as to what has not been foreseen,
by the provisions of this Book. (1090)

Art. 1159. Obligations arising from contracts

have the force of law between the
contracting parties and should be complied
with in good faith. (1091a)

Art. 1160. Obligations derived from quasi-

contracts shall be subject to the provisions
of Chapter 1, Title XVII, of this Book. (n)

Art. 1161. Civil obligations arising from

criminal offenses shall be governed by the
penal laws, subject to the provisions of
Article 2177, and of the pertinent provisions
of Chapter 2, Preliminary Title, on Human
Relations, and of Title XVIII of this Book,
regulating damages. (1092a)

Art. 1162. Obligations derived from quasi-

delicts shall be governed by the provisions
of Chapter 2, Title XVII of this Book, and
by special laws. (1093a)

CHAPTER 2
NATURE AND EFFECT OF
OBLIGATIONS
 242

Art. 1163. Every person obliged to give

something is also obliged to take care of it
with the proper diligence of a good father of
a family, unless the law or the stipulation of
the parties requires another standard of care.
(1094a)

Art. 1164. The creditor has a right to the

fruits of the thing from the time the
obligation to deliver it arises. However, he
shall acquire no real right over it until the
same has been delivered to him. (1095)

Art. 1165. When what is to be delivered is a

determinate thing, the creditor, in addition to
the right granted him by Article 1170, may
compel the debtor to make the delivery.

If the thing is indeterminate or generic, he

may ask that the obligation be complied
with at the expense of the debtor.

If the obligor delays, or has promised to

deliver the same thing to two or more
persons who do not have the same interest,
he shall be responsible for any fortuitous
event until he has effected the delivery.
(1096)

Art. 1166. The obligation to give a

determinate thing includes that of delivering
all its accessions and accessories, even
though they may not have been mentioned.
(1097a)

Art. 1167. If a person obliged to do

something fails to do it, the same shall be
executed at his cost.

This same rule shall be observed if he does

it in contravention of the tenor of the
obligation. Furthermore, it may be decreed
that what has been poorly done be undone.
(1098)

Art. 1168. When the obligation consists in

not doing, and the obligor does what has
been forbidden him, it shall also be undone
at his expense. (1099a)
 243

Art. 1169. Those obliged to deliver or to do

something incur in delay from the time the
obligee judicially or extrajudicially demands
from them the fulfillment of their obligation.

However, the demand by the creditor shall

not be necessary in order that delay may
exist:

(1) When the obligation or the law

expressly so declare; or

(2) When from the nature and the

circumstances of the obligation it
appears that the designation of the
time when the thing is to be delivered
or the service is to be rendered was a
controlling motive for the
establishment of the contract; or

(3) When demand would be useless,

as when the obligor has rendered it
beyond his power to perform.

In reciprocal obligations, neither party

incurs in delay if the other does not comply
or is not ready to comply in a proper manner
with what is incumbent upon him. From the
moment one of the parties fulfills his
obligation, delay by the other begins.
(1100a)

Art. 1170. Those who in the performance of

their obligations are guilty of fraud,
negligence, or delay, and those who in any
manner contravene the tenor thereof, are
liable for damages. (1101)

Art. 1171. Responsibility arising from fraud

is demandable in all obligations. Any waiver
of an action for future fraud is void. (1102a)

Art. 1172. Responsibility arising from

negligence in the performance of every kind
of obligation is also demandable, but such
liability may be regulated by the courts,
according to the circumstances. (1103)

Art. 1173. The fault or negligence of the

obligor consists in the omission of that
diligence which is required by the nature of
the obligation and corresponds with the
 244

circumstances of the persons, of the time

and of the place. When negligence shows
bad faith, the provisions of Articles 1171
and 2201, paragraph 2, shall apply.

If the law or contract does not state the

diligence which is to be observed in the
performance, that which is expected of a
good father of a family shall be required.
(1104a)

Art. 1174. Except in cases expressly

specified by the law, or when it is otherwise
declared by stipulation, or when the nature
of the obligation requires the assumption of
risk, no person shall be responsible for those
events which could not be foreseen, or
which, though foreseen, were inevitable.
(1105a)

Art. 1175. Usurious transactions shall be

governed by special laws. (n)

Art. 1176. The receipt of the principal by the

creditor without reservation with respect to
the interest, shall give rise to the
presumption that said interest has been paid.

The receipt of a later installment of a debt

without reservation as to prior installments,
shall likewise raise the presumption that
such installments have been paid. (1110a)

Art. 1177. The creditors, after having

pursued the property in possession of the
debtor to satisfy their claims, may exercise
all the rights and bring all the actions of the
latter for the same purpose, save those which
are inherent in his person; they may also
impugn the acts which the debtor may have
done to defraud them. (1111)

Art. 1178. Subject to the laws, all rights

acquired in virtue of an obligation are
transmissible, if there has been no
stipulation to the contrary. (1112)

CHAPTER 3
DIFFERENT KINDS OF OBLIGATIONS
 245

SECTION 1. - Pure and Conditional

Obligations

Art. 1179. Every obligation whose

performance does not depend upon a future
or uncertain event, or upon a past event
unknown to the parties, is demandable at
once.

Every obligation which contains a resolutory

condition shall also be demandable, without
prejudice to the effects of the happening of
the event. (1113)

Art. 1180. When the debtor binds himself to

pay when his means permit him to do so, the
obligation shall be deemed to be one with a
period, subject to the provisions of Article
1197. (n)

Art. 1181. In conditional obligations, the

acquisition of rights, as well as the
extinguishment or loss of those already
acquired, shall depend upon the happening
of the event which constitutes the condition.
(1114)

Art. 1182. When the fulfillment of the

condition depends upon the sole will of the
debtor, the conditional obligation shall be
void. If it depends upon chance or upon the
will of a third person, the obligation shall
take effect in conformity with the provisions
of this Code. (1115)

Art. 1183. Impossible conditions, those

contrary to good customs or public policy
and those prohibited by law shall annul the
obligation which depends upon them. If the
obligation is divisible, that part thereof
which is not affected by the impossible or
unlawful condition shall be valid.

The condition not to do an impossible thing

shall be considered as not having been
agreed upon. (1116a)

Art. 1184. The condition that some event

happen at a determinate time shall
extinguish the obligation as soon as the time
 246

expires or if it has become indubitable that

the event will not take place. (1117)

Art. 1185. The condition that some event

will not happen at a determinate time shall
render the obligation effective from the
moment the time indicated has elapsed, or if
it has become evident that the event cannot
occur.

If no time has been fixed, the condition shall

be deemed fulfilled at such time as may
have probably been contemplated, bearing in
mind the nature of the obligation. (1118)

Art. 1186. The condition shall be deemed

fulfilled when the obligor voluntarily
prevents its fulfillment. (1119)

Art. 1187. The effects of a conditional

obligation to give, once the condition has
been fulfilled, shall retroact to the day of the
constitution of the obligation. Nevertheless,
when the obligation imposes reciprocal
prestations upon the parties, the fruits and
interests during the pendency of the
condition shall be deemed to have been
mutually compensated. If the obligation is
unilateral, the debtor shall appropriate the
fruits and interests received, unless from the
nature and circumstances of the obligation it
should be inferred that the intention of the
person constituting the same was different.

In obligations to do and not to do, the courts

shall determine, in each case, the retroactive
effect of the condition that has been
complied with. (1120)

Art. 1188. The creditor may, before the

fulfillment of the condition, bring the
appropriate actions for the preservation of
his right.

The debtor may recover what during the

same time he has paid by mistake in case of
a suspensive condition. (1121a)

Art. 1189. When the conditions have been

imposed with the intention of suspending
the efficacy of an obligation to give, the
following rules shall be observed in case of
 247

the improvement, loss or deterioration of the

thing during the pendency of the condition:

(1) If the thing is lost without the fault

of the debtor, the obligation shall be
extinguished;

(2) If the thing is lost through the fault

of the debtor, he shall be obliged to
pay damages; it is understood that the
thing is lost when it perishes, or goes
out of commerce, or disappears in
such a way that its existence is
unknown or it cannot be recovered;

(3) When the thing deteriorates

without the fault of the debtor, the
impairment is to be borne by the
creditor;

(4) If it deteriorates through the fault

of the debtor, the creditor may choose
between the rescission of the
obligation and its fulfillment, with
indemnity for damages in either case;

(5) If the thing is improved by its

nature, or by time, the improvement
shall inure to the benefit of the
creditor;

(6) If it is improved at the expense of

the debtor, he shall have no other right
than that granted to the usufructuary.
(1122)

Art. 1190. When the conditions have for

their purpose the extinguishment of an
obligation to give, the parties, upon the
fulfillment of said conditions, shall return to
each other what they have received.

In case of the loss, deterioration or

improvement of the thing, the provisions
which, with respect to the debtor, are laid
down in the preceding article shall be
applied to the party who is bound to return.

As for the obligations to do and not to do,

the provisions of the second paragraph of
Article 1187 shall be observed as regards the
 248

effect of the extinguishment of the

obligation. (1123)

Art. 1191. The power to rescind obligations

is implied in reciprocal ones, in case one of
the obligors should not comply with what is
incumbent upon him.

The injured party may choose between the

fulfillment and the rescission of the
obligation, with the payment of damages in
either case. He may also seek rescission,
even after he has chosen fulfillment, if the
latter should become impossible.

The court shall decree the rescission

claimed, unless there be just cause
authorizing the fixing of a period.

This is understood to be without prejudice to

the rights of third persons who have
acquired the thing, in accordance with
Articles 1385 and 1388 and the Mortgage
Law. (1124)

Art. 1192. In case both parties have

committed a breach of the obligation, the
liability of the first infractor shall be
equitably tempered by the courts. If it cannot
be determined which of the parties first
violated the contract, the same shall be
deemed extinguished, and each shall bear
his own damages. (n)

SECTION 2. - Obligations with a Period

Art. 1193. Obligations for whose fulfillment

a day certain has been fixed, shall be
demandable only when that day comes.

Obligations with a resolutory period take

effect at once, but terminate upon arrival of
the day certain.

A day certain is understood to be that which

must necessarily come, although it may not
be known when.

If the uncertainty consists in whether the day

will come or not, the obligation is
 249

conditional, and it shall be regulated by the

rules of the preceding Section. (1125a)

Art. 1194. In case of loss, deterioration or

improvement of the thing before the arrival
of the day certain, the rules in Article 1189
shall be observed. (n)

Art. 1195. Anything paid or delivered before

the arrival of the period, the obligor being
unaware of the period or believing that the
obligation has become due and demandable,
may be recovered, with the fruits and
interests. (1126a)

Art. 1196. Whenever in an obligation a

period is designated, it is presumed to have
been established for the benefit of both the
creditor and the debtor, unless from the
tenor of the same or other circumstances it
should appear that the period has been
established in favor of one or of the other.
(1127)

Art. 1197. If the obligation does not fix a

period, but from its nature and the
circumstances it can be inferred that a period
was intended, the courts may fix the
duration thereof.

The courts shall also fix the duration of the

period when it depends upon the will of the
debtor.

In every case, the courts shall determine

such period as may under the circumstances
have been probably contemplated by the
parties. Once fixed by the courts, the period
cannot be changed by them. (1128a)

Art. 1198. The debtor shall lose every right

to make use of the period:

(1) When after the obligation has been

contracted, he becomes insolvent, unless he
gives a guaranty or security for the debt;

(2) When he does not furnish to the creditor

the guaranties or securities which he has
promised;
 250

(3) When by his own acts he has impaired

said guaranties or securities after their
establishment, and when through a
fortuitous event they disappear, unless he
immediately gives new ones equally
satisfactory;

(4) When the debtor violates any

undertaking, in consideration of which the
creditor agreed to the period;

(5) When the debtor attempts to abscond.

(1129a)

SECTION 3. - Alternative Obligations

Art. 1199. A person alternatively bound by

different prestations shall completely
perform one of them.

The creditor cannot be compelled to receive

part of one and part of the other undertaking.
(1131)

Art. 1200. The right of choice belongs to the

debtor, unless it has been expressly granted
to the creditor.

The debtor shall have no right to choose

those prestations which are impossible,
unlawful or which could not have been the
object of the obligation. (1132)

Art. 1201. The choice shall produce no

effect except from the time it has been
communicated. (1133)

Art. 1202. The debtor shall lose the right of

choice when among the prestations whereby
he is alternatively bound, only one is
practicable. (1134)

Art. 1203. If through the creditor's acts the

debtor cannot make a choice according to
the terms of the obligation, the latter may
rescind the contract with damages. (n)

Art. 1204. The creditor shall have a right to

indemnity for damages when, through the
fault of the debtor, all the things which are
alternatively the object of the obligation
 251

have been lost, or the compliance of the

obligation has become impossible.

The indemnity shall be fixed taking as a

basis the value of the last thing which
disappeared, or that of the service which last
became impossible.

Damages other than the value of the last

thing or service may also be awarded.
(1135a)

Art. 1205. When the choice has been

expressly given to the creditor, the
obligation shall cease to be alternative from
the day when the selection has been
communicated to the debtor.

Until then the responsibility of the debtor

shall be governed by the following rules:

(1) If one of the things is lost through

a fortuitous event, he shall perform
the obligation by delivering that
which the creditor should choose from
among the remainder, or that which
remains if only one subsists;

(2) If the loss of one of the things

occurs through the fault of the debtor,
the creditor may claim any of those
subsisting, or the price of that which,
through the fault of the former, has
disappeared, with a right to damages;

(3) If all the things are lost through

the fault of the debtor, the choice by
the creditor shall fall upon the price of
any one of them, also with indemnity
for damages.

The same rules shall be applied to

obligations to do or not to do in case one,
some or all of the prestations should become
impossible. (1136a)

Art. 1206. When only one prestation has

been agreed upon, but the obligor may
render another in substitution, the obligation
is called facultative.
 252

The loss or deterioration of the thing

intended as a substitute, through the
negligence of the obligor, does not render
him liable. But once the substitution has
been made, the obligor is liable for the loss
of the substitute on account of his delay,
negligence or fraud. (n)

SECTION 4. - Joint and Solidary

Obligations

Art. 1207. The concurrence of two or more

creditors or of two or more debtors in one
and the same obligation does not imply that
each one of the former has a right to
demand, or that each one of the latter is
bound to render, entire compliance with the
prestation. There is a solidary liability only
when the obligation expressly so states, or
when the law or the nature of the obligation
requires solidarity. (1137a)

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

the wording of the obligations to which the
preceding article refers the contrary does not
appear, the credit or debt shall be presumed
to be divided into as many shares as there
are creditors or debtors, the credits or debts
being considered distinct from one another,
subject to the Rules of Court governing the
multiplicity of suits. (1138a)

Art. 1209. If the division is impossible, the

right of the creditors may be prejudiced only
by their collective acts, and the debt can be
enforced only by proceeding against all the
debtors. If one of the latter should be
insolvent, the others shall not be liable for
his share. (1139)

Art. 1210. The indivisibility of an obligation

does not necessarily give rise to solidarity.
Nor does solidarity of itself imply
indivisibility. (n)

Art. 1211. Solidarity may exist although the

creditors and the debtors may not be bound
in the same manner and by the same periods
and conditions. (1140)
 253

Art. 1212. Each one of the solidary creditors

may do whatever may be useful to the
others, but not anything which may be
prejudicial to the latter. (1141a)

Art. 1213. A solidary creditor cannot assign

his rights without the consent of the others.
(n)

Art. 1214. The debtor may pay any one of

the solidary creditors; but if any demand,
judicial or extrajudicial, has been made by
one of them, payment should be made to
him. (1142a)

Art. 1215. Novation, compensation,

confusion or remission of the debt, made by
any of the solidary creditors or with any of
the solidary debtors, shall extinguish the
obligation, without prejudice to the
provisions of Article 1219.

The creditor who may have executed any of

these acts, as well as he who collects the
debt, shall be liable to the others for the
share in the obligation corresponding to
them. (1143)

Art. 1216. The creditor may proceed against

any one of the solidary debtors or some or
all of them simultaneously. The demand
made against one of them shall not be an
obstacle to those which may subsequently be
directed against the others, so long as the
debt has not been fully collected. (1144a)

Art. 1217. Payment made by one of the

solidary debtors extinguishes the obligation.
If two or more solidary debtors offer to pay,
the creditor may choose which offer to
accept.

He who made the payment may claim from

his co-debtors only the share which
corresponds to each, with the interest for the
payment already made. If the payment is
made before the debt is due, no interest for
the intervening period may be demanded.

When one of the solidary debtors cannot,

because of his insolvency, reimburse his
share to the debtor paying the obligation,
 254

such share shall be borne by all his co-

debtors, in proportion to the debt of each.
(1145a)

Art. 1218. Payment by a solidary debtor

shall not entitle him to reimbursement from
his co-debtors if such payment is made after
the obligation has prescribed or become
illegal. (n)

Art. 1219. The remission made by the

creditor of the share which affects one of the
solidary debtors does not release the latter
from his responsibility towards the co-
debtors, in case the debt had been totally
paid by anyone of them before the remission
was effected. (1146a)

Art. 1220. The remission of the whole

obligation, obtained by one of the solidary
debtors, does not entitle him to
reimbursement from his co-debtors. (n)

Art. 1221. If the thing has been lost or if the

prestation has become impossible without
the fault of the solidary debtors, the
obligation shall be extinguished.

If there was fault on the part of any one of

them, all shall be responsible to the creditor,
for the price and the payment of damages
and interest, without prejudice to their action
against the guilty or negligent debtor.

If through a fortuitous event, the thing is lost

or the performance has become impossible
after one of the solidary debtors has incurred
in delay through the judicial or extrajudicial
demand upon him by the creditor, the
provisions of the preceding paragraph shall
apply. (1147a)

Art. 1222. A solidary debtor may, in actions

filed by the creditor, avail himself of all
defenses which are derived from the nature
of the obligation and of those which are
personal to him, or pertain to his own share.
With respect to those which personally
belong to the others, he may avail himself
thereof only as regards that part of the debt
 255

for which the latter are responsible. (1148a)

SECTION 5. - Divisible and Indivisible

Obligations

Art. 1223. The divisibility or indivisibility of

the things that are the object of obligations
in which there is only one debtor and only
one creditor does not alter or modify the
provisions of Chapter 2 of this Title. (1149)

Art. 1224. A joint indivisible obligation

gives rise to indemnity for damages from the
time anyone of the debtors does not comply
with his undertaking. The debtors who may
have been ready to fulfill their promises
shall not contribute to the indemnity beyond
the corresponding portion of the price of the
thing or of the value of the service in which
the obligation consists. (1150)

Art. 1225. For the purposes of the preceding

articles, obligations to give definite things
and those which are not susceptible of
partial performance shall be deemed to be
indivisible.

When the obligation has for its object the

execution of a certain number of days of
work, the accomplishment of work by
metrical units, or analogous things which by
their nature are susceptible of partial
performance, it shall be divisible.

However, even though the object or service

may be physically divisible, an obligation is
indivisible if so provided by law or intended
by the parties.

In obligations not to do, divisibility or

indivisibility shall be determined by the
character of the prestation in each particular
case. (1151a)

SECTION 6. - Obligations with a Penal

Clause

Art. 1226. In obligations with a penal clause,

the penalty shall substitute the indemnity for
 256

damages and the payment of interests in

case of noncompliance, if there is no
stipulation to the contrary. Nevertheless,
damages shall be paid if the obligor refuses
to pay the penalty or is guilty of fraud in the
fulfillment of the obligation.

The penalty may be enforced only when it is

demandable in accordance with the
provisions of this Code. (1152a)

Art. 1227. The debtor cannot exempt

himself from the performance of the
obligation by paying the penalty, save in the
case where this right has been expressly
reserved for him. Neither can the creditor
demand the fulfillment of the obligation and
the satisfaction of the penalty at the same
time, unless this right has been clearly
granted him. However, if after the creditor
has decided to require the fulfillment of the
obligation, the performance thereof should
become impossible without his fault, the
penalty may be enforced. (1153a)

Art. 1228. Proof of actual damages suffered

by the creditor is not necessary in order that
the penalty may be demanded. (n)

Art. 1229. The judge shall equitably reduce

the penalty when the principal obligation has
been partly or irregularly complied with by
the debtor. Even if there has been no
performance, the penalty may also be
reduced by the courts if it is iniquitous or
unconscionable. (1154a)

Art. 1230. The nullity of the penal clause

does not carry with it that of the principal
obligation.

The nullity of the principal obligation carries

with it that of the penal clause. (1155)

CHAPTER 4
EXTINGUISHMENT OF OBLIGATIONS

GENERAL PROVISIONS

Art. 1231. Obligations are extinguished:

 257

(1) By payment or performance:

(2) By the loss of the thing due:

(3) By the condonation or remission

of the debt;

(4) By the confusion or merger of the

rights of creditor and debtor;

(5) By compensation;

(6) By novation.

Other causes of extinguishment of

obligations, such as annulment, rescission,
fulfillment of a resolutory condition, and
prescription, are governed elsewhere in this
Code. (1156a)

SECTION 1. - Payment or Performance

Art. 1232. Payment means not only the

delivery of money but also the performance,
in any other manner, of an obligation. (n)

Art. 1233. A debt shall not be understood to

have been paid unless the thing or service in
which the obligation consists has been
completely delivered or rendered, as the
case may be. (1157)

Art. 1234. If the obligation has been

substantially performed in good faith, the
obligor may recover as though there had
been a strict and complete fulfillment, less
damages suffered by the obligee. (n)

Art. 1235. When the obligee accepts the

performance, knowing its incompleteness or
irregularity, and without expressing any
protest or objection, the obligation is
deemed fully complied with. (n)

Art. 1236. The creditor is not bound to

accept payment or performance by a third
person who has no interest in the fulfillment
of the obligation, unless there is a stipulation
to the contrary.

Whoever pays for another may demand from

the debtor what he has paid, except that if he
 258

paid without the knowledge or against the

will of the debtor, he can recover only
insofar as the payment has been beneficial to
the debtor. (1158a)

Art. 1237. Whoever pays on behalf of the

debtor without the knowledge or against the
will of the latter, cannot compel the creditor
to subrogate him in his rights, such as those
arising from a mortgage, guaranty, or
penalty. (1159a)

Art. 1238. Payment made by a third person

who does not intend to be reimbursed by the
debtor is deemed to be a donation, which
requires the debtor's consent. But the
payment is in any case valid as to the
creditor who has accepted it. (n)

Art. 1239. In obligations to give, payment

made by one who does not have the free
disposal of the thing due and capacity to
alienate it shall not be valid, without
prejudice to the provisions of Article 1427
under the Title on "Natural Obligations."
(1160a)

Art. 1240. Payment shall be made to the

person in whose favor the obligation has
been constituted, or his successor in interest,
or any person authorized to receive it.
(1162a)

Art. 1241. Payment to a person who is

incapacitated to administer his property shall
be valid if he has kept the thing delivered, or
insofar as the payment has been beneficial to
him.

Payment made to a third person shall also be

valid insofar as it has redounded to the
benefit of the creditor. Such benefit to the
creditor need not be proved in the following
cases:

(1) If after the payment, the third

person acquires the creditor's rights;

(2) If the creditor ratifies the payment

to the third person;
 259

(3) If by the creditor's conduct, the

debtor has been led to believe that the
third person had authority to receive
the payment. (1163a)

Art. 1242. Payment made in good

faith to any person in possession of
the credit shall release the debtor.
(1164)

Art. 1243. Payment made to the creditor by

the debtor after the latter has been judicially
ordered to retain the debt shall not be valid.
(1165)

Art. 1244. The debtor of a thing cannot

compel the creditor to receive a different
one, although the latter may be of the same
value as, or more valuable than that which is
due.

In obligations to do or not to do, an act or

forbearance cannot be substituted by another
act or forbearance against the obligee's will.
(1166a)

Art. 1245. Dation in payment, whereby

property is alienated to the creditor in
satisfaction of a debt in money, shall be
governed by the law of sales. (n)

Art. 1246. When the obligation consists in

the delivery of an indeterminate or generic
thing, whose quality and circumstances have
not been stated, the creditor cannot demand
a thing of superior quality. Neither can the
debtor deliver a thing of inferior quality. The
purpose of the obligation and other
circumstances shall be taken into
consideration. (1167a)

Art. 1247. Unless it is otherwise stipulated,

the extrajudicial expenses required by the
payment shall be for the account of the
debtor. With regard to judicial costs, the
Rules of Court shall govern. (1168a)

Art. 1248. Unless there is an express

stipulation to that effect, the creditor cannot
be compelled partially to receive the
prestations in which the obligation consists.
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Neither may the debtor be required to make

partial payments.

However, when the debt is in part liquidated

and in part unliquidated, the creditor may
demand and the debtor may effect the
payment of the former without waiting for
the liquidation of the latter. (1169a)

Art. 1249. The payment of debts in money

shall be made in the currency stipulated, and
if it is not possible to deliver such currency,
then in the currency which is legal tender in
the Philippines.

The delivery of promissory notes payable to

order, or bills of exchange or other
mercantile documents shall produce the
effect of payment only when they have been
cashed, or when through the fault of the
creditor they have been impaired.

In the meantime, the action derived from the

original obligation shall be held in the
abeyance. (1170)

Art. 1250. In case an extraordinary inflation

or deflation of the currency stipulated should
supervene, the value of the currency at the
time of the establishment of the obligation
shall be the basis of payment, unless there is
an agreement to the contrary. (n)

Art. 1251. Payment shall be made in the

place designated in the obligation.

There being no express stipulation and if the

undertaking is to deliver a determinate thing,
the payment shall be made wherever the
thing might be at the moment the obligation
was constituted.

In any other case the place of payment shall

be the domicile of the debtor.

If the debtor changes his domicile in bad

faith or after he has incurred in delay, the
additional expenses shall be borne by him.

These provisions are without prejudice to

venue under the Rules of Court. (1171a)
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SUBSECTION 1. - Application of Payments

Art. 1252. He who has various debts of the

same kind in favor of one and the same
creditor, may declare at the time of making
the payment, to which of them the same
must be applied. Unless the parties so
stipulate, or when the application of
payment is made by the party for whose
benefit the term has been constituted,
application shall not be made as to debts
which are not yet due.

If the debtor accepts from the creditor a

receipt in which an application of the
payment is made, the former cannot
complain of the same, unless there is a cause
for invalidating the contract. (1172a)

Art. 1253. If the debt produces interest,

payment of the principal shall not be
deemed to have been made until the interests
have been covered. (1173)

Art. 1254. When the payment cannot be

applied in accordance with the preceding
rules, or if application can not be inferred
from other circumstances, the debt which is
most onerous to the debtor, among those
due, shall be deemed to have been satisfied.

If the debts due are of the same nature and

burden, the payment shall be applied to all
of them proportionately. (1174a)

SUBSECTION 2. - Payment by Cession

Art. 1255. The debtor may cede or assign his

property to his creditors in payment of his
debts. This cession, unless there is
stipulation to the contrary, shall only release
the debtor from responsibility for the net
proceeds of the thing assigned. The
agreements which, on the effect of the
cession, are made between the debtor and
his creditors shall be governed by special
laws. (1175a)

SUBSECTION 3. - Tender of Payment and

Consignation
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Art. 1256. If the creditor to whom tender of

payment has been made refuses without just
cause to accept it, the debtor shall be
released from responsibility by the
consignation of the thing or sum due.

Consignation alone shall produce the same

effect in the following cases:

(1) When the creditor is absent or

unknown, or does not appear at the
place of payment;

(2) When he is incapacitated to

receive the payment at the time it is
due;

(3) When, without just cause, he

refuses to give a receipt;

(4) When two or more persons claim

the same right to collect;

(5) When the title of the obligation

has been lost. (1176a)

Art. 1257. In order that the consignation of

the thing due may release the obligor, it
must first be announced to the persons
interested in the fulfillment of the
obligation.

The consignation shall be ineffectual if it is

not made strictly in consonance with the
provisions which regulate payment. (1177)

Art. 1258. Consignation shall be made by

depositing the things due at the disposal of
judicial authority, before whom the tender of
payment shall be proved, in a proper case,
and the announcement of the consignation in
other cases.

The consignation having been made, the

interested parties shall also be notified
thereof. (1178)

Art. 1259. The expenses of consignation,

when properly made, shall be charged
against the creditor. (1178)
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Art. 1260. Once the consignation has been

duly made, the debtor may ask the judge to
order the cancellation of the obligation.

Before the creditor has accepted the

consignation, or before a judicial declaration
that the consignation has been properly
made, the debtor may withdraw the thing or
the sum deposited, allowing the obligation
to remain in force. (1180)

Art. 1261. If, the consignation having been

made, the creditor should authorize the
debtor to withdraw the same, he shall lose
every preference which he may have over
the thing. The co-debtors, guarantors and
sureties shall be released. (1181a)

SECTION 2. - Loss of the Thing Due

Art. 1262. An obligation which consists in

the delivery of a determinate thing shall be
extinguished if it should be lost or destroyed
without the fault of the debtor, and before he
has incurred in delay.

When by law or stipulation, the obligor is

liable even for fortuitous events, the loss of
the thing does not extinguish the obligation,
and he shall be responsible for damages. The
same rule applies when the nature of the
obligation requires the assumption of risk.
(1182a)

Art. 1263. In an obligation to deliver a

generic thing, the loss or destruction of
anything of the same kind does not
extinguish the obligation. (n)

Art. 1264. The courts shall determine

whether, under the circumstances, the partial
loss of the object of the obligation is so
important as to extinguish the obligation. (n)

Art. 1265. Whenever the thing is lost in the

possession of the debtor, it shall be
presumed that the loss was due to his fault,
unless there is proof to the contrary, and
without prejudice to the provisions of article
1165. This presumption does not apply in
 264

case of earthquake, flood, storm, or other

natural calamity. (1183a)

Art. 1266. The debtor in obligations to do

shall also be released when the prestation
becomes legally or physically impossible
without the fault of the obligor. (1184a)

Art. 1267. When the service has become so

difficult as to be manifestly beyond the
contemplation of the parties, the obligor
may also be released therefrom, in whole or
in part. (n)

Art. 1268. When the debt of a thing certain

and determinate proceeds from a criminal
offense, the debtor shall not be exempted
from the payment of its price, whatever may
be the cause for the loss, unless the thing
having been offered by him to the person
who should receive it, the latter refused
without justification to accept it. (1185)

Art. 1269. The obligation having been

extinguished by the loss of the thing, the
creditor shall have all the rights of action
which the debtor may have against third
persons by reason of the loss. (1186)

SECTION 3. - Condonation or Remission of

the Debt

Art. 1270. Condonation or remission is

essentially gratuitous, and requires the
acceptance by the obligor. It may be made
expressly or impliedly.

One and the other kind shall be subject to

the rules which govern inofficious
donations. Express condonation shall,
furthermore, comply with the forms of
donation. (1187)

Art. 1271. The delivery of a private

document evidencing a credit, made
voluntarily by the creditor to the debtor,
implies the renunciation of the action which
the former had against the latter.

If in order to nullify this waiver it should be

claimed to be inofficious, the debtor and his
 265

heirs may uphold it by proving that the

delivery of the document was made in virtue
of payment of the debt. (1188)

Art. 1272. Whenever the private document

in which the debt appears is found in the
possession of the debtor, it shall be
presumed that the creditor delivered it
voluntarily, unless the contrary is proved.
(1189)

Art. 1273. The renunciation of the principal

debt shall extinguish the accessory
obligations; but the waiver of the latter shall
leave the former in force. (1190)

Art. 1274. It is presumed that the accessory

obligation of pledge has been remitted when
the thing pledged, after its delivery to the
creditor, is found in the possession of the
debtor, or of a third person who owns the
thing. (1191a)

SECTION 4. - Confusion or Merger of

Rights

Art. 1275. The obligation is extinguished

from the time the characters of creditor and
debtor are merged in the same person.
(1192a)

Art. 1276. Merger which takes place in the

person of the principal debtor or creditor
benefits the guarantors. Confusion which
takes place in the person of any of the latter
does not extinguish the obligation. (1193)

Art. 1277. Confusion does not extinguish a

joint obligation except as regards the share
corresponding to the creditor or debtor in
whom the two characters concur. (1194)

SECTION 5. - Compensation

Art. 1278. Compensation shall take place

when two persons, in their own right, are
creditors and debtors of each other. (1195)

Art. 1279. In order that compensation may

be proper, it is necessary:
 266

(1) That each one of the obligors be

bound principally, and that he be at
the same time a principal creditor of
the other;

(2) That both debts consist in a sum of

money, or if the things due are
consumable, they be of the same kind,
and also of the same quality if the
latter has been stated;

(3) That the two debts be due;

(4) That they be liquidated and

demandable;

(5) That over neither of them there be

any retention or controversy,
commenced by third persons and
communicated in due time to the
debtor. (1196)

Art. 1280. Notwithstanding the provisions of

the preceding article, the guarantor may set
up compensation as regards what the
creditor may owe the principal debtor.
(1197)

Art. 1281. Compensation may be total or

partial. When the two debts are of the same
amount, there is a total compensation. (n)

Art. 1282. The parties may agree upon the

compensation of debts which are not yet
due. (n)

Art. 1283. If one of the parties to a suit over

an obligation has a claim for damages
against the other, the former may set it off
by proving his right to said damages and the
amount thereof. (n)

Art. 1284. When one or both debts are

rescissible or voidable, they may be
compensated against each other before they
are judicially rescinded or avoided. (n)

Art. 1285. The debtor who has consented to

the assignment of rights made by a creditor
in favor of a third person, cannot set up
against the assignee the compensation which
would pertain to him against the assignor,
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unless the assignor was notified by the

debtor at the time he gave his consent, that
he reserved his right to the compensation.

If the creditor communicated the cession to

him but the debtor did not consent thereto,
the latter may set up the compensation of
debts previous to the cession, but not of
subsequent ones.

If the assignment is made without the

knowledge of the debtor, he may set up the
compensation of all credits prior to the same
and also later ones until he had knowledge
of the assignment. (1198a)

Art. 1286. Compensation takes place by

operation of law, even though the debts may
be payable at different places, but there shall
be an indemnity for expenses of exchange or
transportation to the place of payment.
(1199a)

Art. 1287. Compensation shall not be proper

when one of the debts arises from a
depositum or from the obligations of a
depositary or of a bailee in commodatum.

Neither can compensation be set up against

a creditor who has a claim for support due
by gratuitous title, without prejudice to the
provisions of paragraph 2 of Article 301.
(1200a)

Art. 1288. Neither shall there be

compensation if one of the debts consists in
civil liability arising from a penal offense.
(n)

Art. 1289. If a person should have against

him several debts which are susceptible of
compensation, the rules on the application of
payments shall apply to the order of the
compensation. (1201)

Art. 1290. When all the requisites mentioned

in Article 1279 are present, compensation
takes effect by operation of law, and
extinguishes both debts to the concurrent
amount, even though the creditors and
debtors are not aware of the compensation.
 268

(1202a)

SECTION 6. - Novation

Art. 1291. Obligations may be modified by:

(1) Changing their object or principal
conditions;

(2) Substituting the person of the

debtor;

(3) Subrogating a third person in the

rights of the creditor. (1203)

Art. 1292. In order that an obligation may be

extinguished by another which substitute the
same, it is imperative that it be so declared
in unequivocal terms, or that the old and the
new obligations be on every point
incompatible with each other. (1204)

Art. 1293. Novation which consists in

substituting a new debtor in the place of the
original one, may be made even without the
knowledge or against the will of the latter,
but not without the consent of the creditor.
Payment by the new debtor gives him the
rights mentioned in Articles 1236 and 1237.
(1205a)

Art. 1294. If the substitution is without the

knowledge or against the will of the debtor,
the new debtor's insolvency or non-
fulfillment of the obligations shall not give
rise to any liability on the part of the original
debtor. (n)

Art. 1295. The insolvency of the new debtor,

who has been proposed by the original
debtor and accepted by the creditor, shall not
revive the action of the latter against the
original obligor, except when said
insolvency was already existing and of
public knowledge, or known to the debtor,
when the delegated his debt. (1206a)

Art. 1296. When the principal obligation is

extinguished in consequence of a novation,
accessory obligations may subsist only
insofar as they may benefit third persons
who did not give their consent. (1207)
 269

Art. 1297. If the new obligation is void, the

original one shall subsist, unless the parties
intended that the former relation should be
extinguished in any event. (n)

Art. 1298. The novation is void if the

original obligation was void, except when
annulment may be claimed only by the
debtor or when ratification validates acts
which are voidable. (1208a)

Art. 1299. If the original obligation was

subject to a suspensive or resolutory
condition, the new obligation shall be under
the same condition, unless it is otherwise
stipulated. (n)

Art. 1300. Subrogation of a third person in

the rights of the creditor is either legal or
conventional. The former is not presumed,
except in cases expressly mentioned in this
Code; the latter must be clearly established
in order that it may take effect. (1209a)

Art. 1301. Conventional subrogation of a

third person requires the consent of the
original parties and of the third person. (n)

Art. 1302. It is presumed that there is legal

subrogation:

(1) When a creditor pays another

creditor who is preferred, even
without the debtor's knowledge;

(2) When a third person, not

interested in the obligation, pays with
the express or tacit approval of the
debtor;

(3) When, even without the

knowledge of the debtor, a person
interested in the fulfillment of the
obligation pays, without prejudice to
the effects of confusion as to the
latter's share. (1210a)

Art. 1303. Subrogation transfers to the

persons subrogated the credit with all the
rights thereto appertaining, either against the
debtor or against third person, be they
guarantors or possessors of mortgages,
 270

subject to stipulation in a conventional

subrogation. (1212a)

Art. 1304. A creditor, to whom partial

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

Title II. - CONTRACTS

CHAPTER 1
GENERAL PROVISIONS

Art. 1305. A contract is a meeting of minds

between two persons whereby one binds
himself, with respect to the other, to give
something or to render some service.
(1254a)

Art. 1306. The contracting parties may

establish such stipulations, clauses, terms
and conditions as they may deem
convenient, provided they are not contrary
to law, morals, good customs, public order,
or public policy. (1255a)

Art. 1307. Innominate contracts shall be

regulated by the stipulations of the parties,
by the provisions of Titles I and II of this
Book, by the rules governing the most
analogous nominate contracts, and by the
customs of the place. (n)

Art. 1308. The contract must bind both

contracting parties; its validity or
compliance cannot be left to the will of one
of them. (1256a)

Art. 1309. The determination of the

performance may be left to a third person,
whose decision shall not be binding until it
has been made known to both contracting
parties. (n)

Art. 1310. The determination shall not be

obligatory if it is evidently inequitable. In
such case, the courts shall decide what is
equitable under the circumstances. (n)
 271

Art. 1311. Contracts take effect only

between the parties, their assigns and heirs,
except in case where the rights and
obligations arising from the contract are not
transmissible by their nature, or by
stipulation or by provision of law. The heir
is not liable beyond the value of the property
he received from the decedent.

If a contract should contain some stipulation

in favor of a third person, he may demand its
fulfillment provided he communicated his
acceptance to the obligor before its
revocation. A mere incidental benefit or
interest of a person is not sufficient. The
contracting parties must have clearly and
deliberately conferred a favor upon a third
person. (1257a)

Art. 1312. In contracts creating real rights,

third persons who come into possession of
the object of the contract are bound thereby,
subject to the provisions of the Mortgage
Law and the Land Registration Laws. (n)

Art. 1313. Creditors are protected in cases of

contracts intended to defraud them. (n)

Art. 1314. Any third person who induces

another to violate his contract shall be liable
for damages to the other contracting party.
(n)

Art. 1315. Contracts are perfected by mere

consent, and from that moment the parties
are bound not only to the fulfillment of what
has been expressly stipulated but also to all
the consequences which, according to their
nature, may be in keeping with good faith,
usage and law. (1258)

Art. 1316. Real contracts, such as deposit,

pledge and Commodatum, are not perfected
until the delivery of the object of the
obligation. (n)

Art. 1317. No one may contract in the name

of another without being authorized by the
latter, or unless he has by law a right to
represent him.
 272

A contract entered into in the name of

another by one who has no authority or legal
representation, or who has acted beyond his
powers, shall be unenforceable, unless it is
ratified, expressly or impliedly, by the
person on whose behalf it has been
executed, before it is revoked by the other
contracting party. (1259a)

CHAPTER 2
ESSENTIAL REQUISITES OF
CONTRACTS

GENERAL PROVISIONS

Art. 1318. There is no contract unless the

following requisites concur:
(1) Consent of the contracting parties;

(2) Object certain which is the subject

matter of the contract;

(3) Cause of the obligation which is

established. (1261)

SECTION 1. - Consent

Art. 1319. Consent is manifested by the

meeting of the offer and the acceptance
upon the thing and the cause which are to
constitute the contract. The offer must be
certain and the acceptance absolute. A
qualified acceptance constitutes a counter-
offer.

Acceptance made by letter or telegram does

not bind the offerer except from the time it
came to his knowledge. The contract, in
such a case, is presumed to have been
entered into in the place where the offer was
made. (1262a)

Art. 1320. An acceptance may be express or

implied. (n)

Art. 1321. The person making the offer may

fix the time, place, and manner of
acceptance, all of which must be complied
with. (n)
 273

Art. 1322. An offer made through an agent is

accepted from the time acceptance is
communicated to him. (n)

Art. 1323. An offer becomes ineffective

upon the death, civil interdiction, insanity, or
insolvency of either party before acceptance
is conveyed. (n)

Art. 1324. When the offerer has allowed the

offeree a certain period to accept, the offer
may be withdrawn at any time before
acceptance by communicating such
withdrawal, except when the option is
founded upon a consideration, as something
paid or promised. (n)

Art. 1325. Unless it appears otherwise,

business advertisements of things for sale
are not definite offers, but mere invitations
to make an offer. (n)

Art. 1326. Advertisements for bidders are

simply invitations to make proposals, and
the advertiser is not bound to accept the
highest or lowest bidder, unless the contrary
appears. (n)

Art. 1327. The following cannot give

consent to a contract:

(1) Unemancipated minors;

(2) Insane or demented persons, and

deaf-mutes who do not know how to
write. (1263a)

Art. 1328. Contracts entered into during a

lucid interval are valid. Contracts agreed to
in a state of drunkenness or during a
hypnotic spell are voidable. (n)

Art. 1329. The incapacity declared in Article

1327 is subject to the modifications
determined by law, and is understood to be
without prejudice to special disqualifications
established in the laws. (1264)

Art. 1330. A contract where consent is given

through mistake, violence, intimidation,
undue influence, or fraud is voidable.
(1265a)
 274

Art. 1331. In order that mistake may

invalidate consent, it should refer to the
substance of the thing which is the object of
the contract, or to those conditions which
have principally moved one or both parties
to enter into the contract.

Mistake as to the identity or qualifications of

one of the parties will vitiate consent only
when such identity or qualifications have
been the principal cause of the contract.

A simple mistake of account shall give rise

to its correction. (1266a)

Art. 1332. When one of the parties is unable

to read, or if the contract is in a language not
understood by him, and mistake or fraud is
alleged, the person enforcing the contract
must show that the terms thereof have been
fully explained to the former. (n)

Art. 1333. There is no mistake if the party

alleging it knew the doubt, contingency or
risk affecting the object of the contract. (n)

Art. 1334. Mutual error as to the legal effect

of an agreement when the real purpose of
the parties is frustrated, may vitiate consent.
(n)

Art. 1335. There is violence when in order

to wrest consent, serious or irresistible force
is employed.

There is intimidation when one of the

contracting parties is compelled by a
reasonable and well-grounded fear of an
imminent and grave evil upon his person or
property, or upon the person or property of
his spouse, descendants or ascendants, to
give his consent.

To determine the degree of intimidation, the

age, sex and condition of the person shall be
borne in mind.

A threat to enforce one's claim through

competent authority, if the claim is just or
legal, does not vitiate consent. (1267a)
 275

Art. 1336. Violence or intimidation shall

annul the obligation, although it may have
been employed by a third person who did
not take part in the contract. (1268)

Art. 1337. There is undue influence when a

person takes improper advantage of his
power over the will of another, depriving the
latter of a reasonable freedom of choice. The
following circumstances shall be considered:
the confidential, family, spiritual and other
relations between the parties, or the fact that
the person alleged to have been unduly
influenced was suffering from mental
weakness, or was ignorant or in financial
distress. (n)

Art. 1338. There is fraud when, through

insidious words or machinations of one of
the contracting parties, the other is induced
to enter into a contract which, without them,
he would not have agreed to. (1269)

Art. 1339. Failure to disclose facts, when

there is a duty to reveal them, as when the
parties are bound by confidential relations,
constitutes fraud. (n)

Art. 1340. The usual exaggerations in trade,

when the other party had an opportunity to
know the facts, are not in themselves
fraudulent. (n)

Art. 1341. A mere expression of an opinion

does not signify fraud, unless made by an
expert and the other party has relied on the
former's special knowledge. (n)

Art. 1342. Misrepresentation by a third

person does not vitiate consent, unless such
misrepresentation has created substantial
mistake and the same is mutual. (n)

Art. 1343. Misrepresentation made in good

faith is not fraudulent but may constitute
error. (n)

Art. 1344. In order that fraud may make a

contract voidable, it should be serious and
should not have been employed by both
contracting parties.
 276

Incidental fraud only obliges the person

employing it to pay damages. (1270)

Art. 1345. Simulation of a contract may be

absolute or relative. The former takes place
when the parties do not intend to be bound
at all; the latter, when the parties conceal
their true agreement. (n)

Art. 1346. An absolutely simulated or

fictitious contract is void. A relative
simulation, when it does not prejudice a
third person and is not intended for any
purpose contrary to law, morals, good
customs, public order or public policy binds
the parties to their real agreement. (n)

SECTION 2. - Object of Contracts

Art. 1347. All things which are not outside

the commerce of men, including future
things, may be the object of a contract. All
rights which are not intransmissible may
also be the object of contracts.

No contract may be entered into upon future

inheritance except in cases expressly
authorized by law.

All services which are not contrary to law,

morals, good customs, public order or public
policy may likewise be the object of a
contract. (1271a)

Art. 1348. Impossible things or services

cannot be the object of contracts. (1272)

Art. 1349. The object of every contract must

be determinate as to its kind. The fact that
the quantity is not determinate shall not be
an obstacle to the existence of the contract,
provided it is possible to determine the
same, without the need of a new contract
between the parties. (1273)

SECTION 3. - Cause of Contracts

Art. 1350. In onerous contracts the cause is

understood to be, for each contracting party,
the prestation or promise of a thing or
 277

service by the other; in remuneratory ones,

the service or benefit which is remunerated;
and in contracts of pure beneficence, the
mere liberality of the benefactor. (1274)

Art. 1351. The particular motives of the

parties in entering into a contract are
different from the cause thereof. (n)

Art. 1352. Contracts without cause, or with

unlawful cause, produce no effect whatever.
The cause is unlawful if it is contrary to law,
morals, good customs, public order or public
policy. (1275a)

Art. 1353. The statement of a false cause in

contracts shall render them void, if it should
not be proved that they were founded upon
another cause which is true and lawful.
(1276)

Art. 1354. Although the cause is not stated

in the contract, it is presumed that it exists
and is lawful, unless the debtor proves the
contrary. (1277)

Art. 1355. Except in cases specified by law,

lesion or inadequacy of cause shall not
invalidate a contract, unless there has been
fraud, mistake or undue influence. (n)

CHAPTER 3
FORM OF CONTRACTS

Art. 1356. Contracts shall be obligatory, in

whatever form they may have been entered
into, provided all the essential requisites for
their validity are present. However, when
the law requires that a contract be in some
form in order that it may be valid or
enforceable, or that a contract be proved in a
certain way, that requirement is absolute and
indispensable. In such cases, the right of the
parties stated in the following article cannot
be exercised. (1278a)

Art. 1357. If the law requires a document or

other special form, as in the acts and
contracts enumerated in the following
article, the contracting parties may compel
 278

each other to observe that form, once the

contract has been perfected. This right may
be exercised simultaneously with the action
upon the contract. (1279a)

Art. 1358. The following must appear in a

public document:

(1) Acts and contracts which have for

their object the creation, transmission,
modification or extinguishment of
real rights over immovable property;
sales of real property or of an interest
therein a governed by Articles 1403,
No. 2, and 1405;

(2) The cession, repudiation or

renunciation of hereditary rights or of
those of the conjugal partnership of
gains;

(3) The power to administer property,

or any other power which has for its
object an act appearing or which
should appear in a public document,
or should prejudice a third person;

(4) The cession of actions or rights

proceeding from an act appearing in a
public document.

All other contracts where the amount

involved exceeds five hundred pesos must
appear in writing, even a private one. But
sales of goods, chattels or things in action
are governed by Articles, 1403, No. 2 and
1405. (1280a)

CHAPTER 4
REFORMATION OF INSTRUMENTS (n)

Art. 1359. When, there having been a

meeting of the minds of the parties to a
contract, their true intention is not expressed
in the instrument purporting to embody the
agreement, by reason of mistake, fraud,
inequitable conduct or accident, one of the
parties may ask for the reformation of the
instrument to the end that such true intention
may be expressed.
 279

If mistake, fraud, inequitable conduct, or

accident has prevented a meeting of the
minds of the parties, the proper remedy is
not reformation of the instrument but
annulment of the contract.

Art. 1360. The principles of the general law

on the reformation of instruments are hereby
adopted insofar as they are not in conflict
with the provisions of this Code.

Art. 1361. When a mutual mistake of the

parties causes the failure of the instrument to
disclose their real agreement, said
instrument may be reformed.

Art. 1362. If one party was mistaken and the

other acted fraudulently or inequitably in
such a way that the instrument does not
show their true intention, the former may
ask for the reformation of the instrument.

Art. 1363. When one party was mistaken

and the other knew or believed that the
instrument did not state their real agreement,
but concealed that fact from the former, the
instrument may be reformed.

Art. 1364. When through the ignorance, lack

of skill, negligence or bad faith on the part
of the person drafting the instrument or of
the clerk or typist, the instrument does not
express the true intention of the parties, the
courts may order that the instrument be
reformed.

Art. 1365. If two parties agree upon the

mortgage or pledge of real or personal
property, but the instrument states that the
property is sold absolutely or with a right of
repurchase, reformation of the instrument is
proper.

Art. 1366. There shall be no reformation in

the following cases:

(1) Simple donations inter vivos

wherein no condition is imposed;

(2) Wills;

(3) When the real agreement is void.

 280

Art. 1367. When one of the parties has

brought an action to enforce the instrument,
he cannot subsequently ask for its
reformation.

Art. 1368. Reformation may be ordered at

the instance of either party or his successors
in interest, if the mistake was mutual;
otherwise, upon petition of the injured party,
or his heirs and assigns.

Art. 1369. The procedure for the reformation

of instrument shall be governed by rules of
court to be promulgated by the Supreme
Court.

CHAPTER 5
INTERPRETATION OF CONTRACTS

Art. 1370. If the terms of a contract are clear

and leave no doubt upon the intention of the
contracting parties, the literal meaning of its
stipulations shall control.

If the words appear to be contrary to the

evident intention of the parties, the latter
shall prevail over the former. (1281)

Art. 1371. In order to judge the intention of

the contracting parties, their
contemporaneous and subsequent acts shall
be principally considered. (1282)

Art. 1372. However general the terms of a

contract may be, they shall not be
understood to comprehend things that are
distinct and cases that are different from
those upon which the parties intended to
agree. (1283)

Art. 1373. If some stipulation of any

contract should admit of several meanings, it
shall be understood as bearing that import
which is most adequate to render it effectual.
(1284)

Art. 1374. The various stipulations of a

contract shall be interpreted together,
attributing to the doubtful ones that sense
which may result from all of them taken
jointly. (1285)
 281

Art. 1375. Words which may have different

significations shall be understood in that
which is most in keeping with the nature and
object of the contract. (1286)

Art. 1376. The usage or custom of the place

shall be borne in mind in the interpretation
of the ambiguities of a contract, and shall fill
the omission of stipulations which are
ordinarily established. (1287)

Art. 1377. The interpretation of obscure

words or stipulations in a contract shall not
favor the party who caused the obscurity.
(1288)

Art. 1378. When it is absolutely impossible

to settle doubts by the rules established in
the preceding articles, and the doubts refer
to incidental circumstances of a gratuitous
contract, the least transmission of rights and
interests shall prevail. If the contract is
onerous, the doubt shall be settled in favor
of the greatest reciprocity of interests.

If the doubts are cast upon the principal

object of the contract in such a way that it
cannot be known what may have been the
intention or will of the parties, the contract
shall be null and void. (1289)

Art. 1379. The principles of interpretation

stated in Rule 123 of the Rules of Court
shall likewise be observed in the
construction of contracts. (n)

CHAPTER 6
RESCISSIBLE CONTRACTS

Art. 1380. Contracts validly agreed upon

may be rescinded in the cases established by
law. (1290)

Art. 1381. The following contracts are

rescissible:

(1) Those which are entered into by

guardians whenever the wards whom
they represent suffer lesion by more
than one-fourth of the value of the
things which are the object thereof;
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(2) Those agreed upon in

representation of absentees, if the
latter suffer the lesion stated in the
preceding number;

(3) Those undertaken in fraud of

creditors when the latter cannot in any
other manner collect the claims due
them;

(4) Those which refer to things under

litigation if they have been entered
into by the defendant without the
knowledge and approval of the
litigants or of competent judicial
authority;

(5) All other contracts specially

declared by law to be subject to
rescission. (1291a)

Art. 1382. Payments made in a state of

insolvency for obligations to whose
fulfillment the debtor could not be
compelled at the time they were effected, are
also rescissible. (1292)

Art. 1383. The action for rescission is

subsidiary; it cannot be instituted except
when the party suffering damage has no
other legal means to obtain reparation for
the same. (1294)

Art. 1384. Rescission shall be only to the

extent necessary to cover the damages
caused. (n)

Art. 1385. Rescission creates the obligation

to return the things which were the object of
the contract, together with their fruits, and
the price with its interest; consequently, it
can be carried out only when he who
demands rescission can return whatever he
may be obliged to restore.

Neither shall rescission take place when the

things which are the object of the contract
are legally in the possession of third persons
who did not act in bad faith.
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In this case, indemnity for damages may be

demanded from the person causing the loss.
(1295)

Art. 1386. Rescission referred to in Nos. 1

and 2 of Article 1381 shall not take place
with respect to contracts approved by the
courts. (1296a)

Art. 1387. All contracts by virtue of which

the debtor alienates property by gratuitous
title are presumed to have been entered into
in fraud of creditors, when the donor did not
reserve sufficient property to pay all debts
contracted before the donation.

Alienations by onerous title are also

presumed fraudulent when made by persons
against whom some judgment has been
issued. The decision or attachment need not
refer to the property alienated, and need not
have been obtained by the party seeking the
rescission.

In addition to these presumptions, the design

to defraud creditors may be proved in any
other manner recognized by the law of
evidence. (1297a)

Art. 1388. Whoever acquires in bad faith the

things alienated in fraud of creditors, shall
indemnify the latter for damages suffered by
them on account of the alienation, whenever,
due to any cause, it should be impossible for
him to return them.

If there are two or more alienations, the first

acquirer shall be liable first, and so on
successively. (1298a)

Art. 1389. The action to claim rescission

must be commenced within four years.

For persons under guardianship and for

absentees, the period of four years shall not
begin until the termination of the former's
incapacity, or until the domicile of the latter
is known. (1299)

CHAPTER 7
VOIDABLE CONTRACTS
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Art. 1390. The following contracts are

voidable or annullable, even though there
may have been no damage to the contracting
parties:
(1) Those where one of the parties is
incapable of giving consent to a
contract;

(2) Those where the consent is

vitiated by mistake, violence,
intimidation, undue influence or
fraud.

These contracts are binding, unless they are

annulled by a proper action in court. They
are susceptible of ratification. (n)

Art. 1391. The action for annulment shall be

brought within four years.

This period shall begin:

In cases of intimidation, violence or

undue influence, from the time the
defect of the consent ceases.

In case of mistake or fraud, from the

time of the discovery of the same.

And when the action refers to contracts

entered into by minors or other incapacitated
persons, from the time the guardianship
ceases. (1301a)

Art. 1392. Ratification extinguishes the

action to annul a voidable contract. (1309a)

Art. 1393. Ratification may be effected

expressly or tacitly. It is understood that
there is a tacit ratification if, with knowledge
of the reason which renders the contract
voidable and such reason having ceased, the
person who has a right to invoke it should
execute an act which necessarily implies an
intention to waive his right. (1311a)

Art. 1394. Ratification may be effected by

the guardian of the incapacitated person. (n)

Art. 1395. Ratification does not require the

conformity of the contracting party who has
 285

no right to bring the action for annulment.

(1312)

Art. 1396. Ratification cleanses the contract

from all its defects from the moment it was
constituted. (1313)

Art. 1397. The action for the annulment of

contracts may be instituted by all who are
thereby obliged principally or subsidiarily.
However, persons who are capable cannot
allege the incapacity of those with whom
they contracted; nor can those who exerted
intimidation, violence, or undue influence,
or employed fraud, or caused mistake base
their action upon these flaws of the contract.
(1302a)

Art. 1398. An obligation having been

annulled, the contracting parties shall restore
to each other the things which have been the
subject matter of the contract, with their
fruits, and the price with its interest, except
in cases provided by law.

In obligations to render service, the value

thereof shall be the basis for damages.
(1303a)

Art. 1399. When the defect of the contract

consists in the incapacity of one of the
parties, the incapacitated person is not
obliged to make any restitution except
insofar as he has been benefited by the thing
or price received by him. (1304)

Art. 1400. Whenever the person obliged by

the decree of annulment to return the thing
can not do so because it has been lost
through his fault, he shall return the fruits
received and the value of the thing at the
time of the loss, with interest from the same
date. (1307a)

Art. 1401. The action for annulment of

contracts shall be extinguished when the
thing which is the object thereof is lost
through the fraud or fault of the person who
has a right to institute the proceedings.

If the right of action is based upon the

incapacity of any one of the contracting
 286

parties, the loss of the thing shall not be an

obstacle to the success of the action, unless
said loss took place through the fraud or
fault of the plaintiff. (1314a)

Art. 1402. As long as one of the contracting

parties does not restore what in virtue of the
decree of annulment he is bound to return,
the other cannot be compelled to comply
with what is incumbent upon him. (1308)

CHAPTER 8
UNENFORCEABLE CONTRACTS (n)

Art. 1403. The following contracts are

unenforceable, unless they are ratified:
(1) Those entered into in the name of
another person by one who has been
given no authority or legal
representation, or who has acted
beyond his powers;

(2) Those that do not comply with the

Statute of Frauds as set forth in this
number. In the following cases an
agreement hereafter made shall be
unenforceable by action, unless the
same, or some note or memorandum,
thereof, be in writing, and subscribed
by the party charged, or by his agent;
evidence, therefore, of the agreement
cannot be received without the
writing, or a secondary evidence of its
contents:

(a) An agreement that by its

terms is not to be performed
within a year from the making
thereof;

(b) A special promise to answer

for the debt, default, or
miscarriage of another;

(c) An agreement made in

consideration of marriage, other
than a mutual promise to
marry;
 287

(d) An agreement for the sale of

goods, chattels or things in
action, at a price not less than
five hundred pesos, unless the
buyer accept and receive part of
such goods and chattels, or the
evidences, or some of them, of
such things in action or pay at
the time some part of the
purchase money; but when a
sale is made by auction and
entry is made by the auctioneer
in his sales book, at the time of
the sale, of the amount and kind
of property sold, terms of sale,
price, names of the purchasers
and person on whose account
the sale is made, it is a
sufficient memorandum;

(e) An agreement of the leasing

for a longer period than one
year, or for the sale of real
property or of an interest
therein;

(f) A representation as to the

credit of a third person.

(3) Those where both parties are

incapable of giving consent to a
contract.
Art. 1404. Unauthorized contracts are
governed by Article 1317 and the principles
of agency in Title X of this Book.

Art. 1405. Contracts infringing the Statute of

Frauds, referred to in No. 2 of Article 1403,
are ratified by the failure to object to the
presentation of oral evidence to prove the
same, or by the acceptance of benefit under
them.

Art. 1406. When a contract is enforceable

under the Statute of Frauds, and a public
document is necessary for its registration in
the Registry of Deeds, the parties may avail
themselves of the right under Article 1357.

Art. 1407. In a contract where both parties

are incapable of giving consent, express or
 288

implied ratification by the parent, or

guardian, as the case may be, of one of the
contracting parties shall give the contract the
same effect as if only one of them were
incapacitated.

If ratification is made by the parents or

guardians, as the case may be, of both
contracting parties, the contract shall be
validated from the inception.

Art. 1408. Unenforceable contracts cannot

be assailed by third persons.

CHAPTER 9
VOID AND INEXISTENT CONTRACTS

Art. 1409. The following contracts are

inexistent and void from the beginning:
(1) Those whose cause, object or
purpose is contrary to law, morals,
good customs, public order or public
policy;

(2) Those which are absolutely

simulated or fictitious;

(3) Those whose cause or object did

not exist at the time of the transaction;

(4) Those whose object is outside the

commerce of men;

(5) Those which contemplate an

impossible service;

(6) Those where the intention of the

parties relative to the principal object
of the contract cannot be ascertained;

(7) Those expressly prohibited or

declared void by law.

These contracts cannot be ratified. Neither

can the right to set up the defense of
illegality be waived.

Art. 1410. The action or defense for the

declaration of the inexistence of a contract
does not prescribe.
 289

Art. 1411. When the nullity proceeds from

the illegality of the cause or object of the
contract, and the act constitutes a criminal
offense, both parties being in pari delicto,
they shall have no action against each other,
and both shall be prosecuted. Moreover, the
provisions of the Penal Code relative to the
disposal of effects or instruments of a crime
shall be applicable to the things or the price
of the contract.

This rule shall be applicable when only one

of the parties is guilty; but the innocent one
may claim what he has given, and shall not
be bound to comply with his promise.
(1305)

Art. 1412. If the act in which the unlawful or

forbidden cause consists does not constitute
a criminal offense, the following rules shall
be observed:

(1) When the fault is on the part of

both contracting parties, neither may
recover what he has given by virtue of
the contract, or demand the
performance of the other's
undertaking;

(2) When only one of the contracting

parties is at fault, he cannot recover
what he has given by reason of the
contract, or ask for the fulfillment of
what has been promised him. The
other, who is not at fault, may demand
the return of what he has given
without any obligation to comply his
promise. (1306)

Art. 1413. Interest paid in excess of the

interest allowed by the usury laws may be
recovered by the debtor, with interest
thereon from the date of the payment.

Art. 1414. When money is paid or property

delivered for an illegal purpose, the contract
may be repudiated by one of the parties
before the purpose has been accomplished,
or before any damage has been caused to a
third person. In such case, the courts may, if
the public interest will thus be subserved,
 290

allow the party repudiating the contract to

recover the money or property.

Art. 1415. Where one of the parties to an

illegal contract is incapable of giving
consent, the courts may, if the interest of
justice so demands allow recovery of money
or property delivered by the incapacitated
person.

Art. 1416. When the agreement is not illegal

per se but is merely prohibited, and the
prohibition by the law is designated for the
protection of the plaintiff, he may, if public
policy is thereby enhanced, recover what he
has paid or delivered.

Art. 1417. When the price of any article or

commodity is determined by statute, or by
authority of law, any person paying any
amount in excess of the maximum price
allowed may recover such excess.

Art. 1418. When the law fixes, or authorizes

the fixing of the maximum number of hours
of labor, and a contract is entered into
whereby a laborer undertakes to work longer
than the maximum thus fixed, he may
demand additional compensation for service
rendered beyond the time limit.

Art. 1419. When the law sets, or authorizes

the setting of a minimum wage for laborers,
and a contract is agreed upon by which a
laborer accepts a lower wage, he shall be
entitled to recover the deficiency.

Art. 1420. In case of a divisible contract, if

the illegal terms can be separated from the
legal ones, the latter may be enforced.

Art. 1421. The defense of illegality of

contract is not available to third persons
whose interests are not directly affected.

Art. 1422. A contract which is the direct

result of a previous illegal contract, is also
void and inexistent.

Title III. - NATURAL OBLIGATIONS

 291

Art. 1423. Obligations are civil or natural.

Civil obligations give a right of action to
compel their performance. Natural
obligations, not being based on positive law
but on equity and natural law, do not grant a
right of action to enforce their performance,
but after voluntary fulfillment by the
obligor, they authorize the retention of what
has been delivered or rendered by reason
thereof. Some natural obligations are set
forth in the following articles.

Art. 1424. When a right to sue upon a civil

obligation has lapsed by extinctive
prescription, the obligor who voluntarily
performs the contract cannot recover what
he has delivered or the value of the service
he has rendered.

Art. 1425. When without the knowledge or

against the will of the debtor, a third person
pays a debt which the obligor is not legally
bound to pay because the action thereon has
prescribed, but the debtor later voluntarily
reimburses the third person, the obligor
cannot recover what he has paid.

Art. 1426. When a minor between eighteen

and twenty-one years of age who has
entered into a contract without the consent
of the parent or guardian, after the
annulment of the contract voluntarily returns
the whole thing or price received,
notwithstanding the fact the he has not been
benefited thereby, there is no right to
demand the thing or price thus returned.

Art. 1427. When a minor between eighteen

and twenty-one years of age, who has
entered into a contract without the consent
of the parent or guardian, voluntarily pays a
sum of money or delivers a fungible thing in
fulfillment of the obligation, there shall be
no right to recover the same from the
obligee who has spent or consumed it in
good faith. (1160A)

Art. 1428. When, after an action to enforce a

civil obligation has failed the defendant
voluntarily performs the obligation, he
 292

cannot demand the return of what he has

delivered or the payment of the value of the
service he has rendered.

Art. 1429. When a testate or intestate heir

voluntarily pays a debt of the decedent
exceeding the value of the property which
he received by will or by the law of
intestacy from the estate of the deceased, the
payment is valid and cannot be rescinded by
the payer.

Art. 1430. When a will is declared void

because it has not been executed in
accordance with the formalities required by
law, but one of the intestate heirs, after the
settlement of the debts of the deceased, pays
a legacy in compliance with a clause in the
defective will, the payment is effective and
irrevocable.

Title IV. - ESTOPPEL (n)

Art. 1431. Through estoppel an admission or

representation is rendered conclusive upon
the person making it, and cannot be denied
or disproved as against the person relying
thereon.

Art. 1432. The principles of estoppel are

hereby adopted insofar as they are not in
conflict with the provisions of this Code, the
Code of Commerce, the Rules of Court and
special laws.

Art. 1433. Estoppel may be in pais or by

deed.

Art. 1434. When a person who is not the

owner of a thing sells or alienates and
delivers it, and later the seller or grantor
acquires title thereto, such title passes by
operation of law to the buyer or grantee.

Art. 1435. If a person in representation of

another sells or alienates a thing, the former
cannot subsequently set up his own title as
against the buyer or grantee.
 293

Art. 1436. A lessee or a bailee is estopped

from asserting title to the thing leased or
received, as against the lessor or bailor.

Art. 1437. When in a contract between third

persons concerning immovable property,
one of them is misled by a person with
respect to the ownership or real right over
the real estate, the latter is precluded from
asserting his legal title or interest therein,
provided all these requisites are present:

(1) There must be fraudulent

representation or wrongful
concealment of facts known to the
party estopped;

(2) The party precluded must intend

that the other should act upon the
facts as misrepresented;

(3) The party misled must have been

unaware of the true facts; and

(4) The party defrauded must have

acted in accordance with the
misrepresentation.

Art. 1438. One who has allowed another to

assume apparent ownership of personal
property for the purpose of making any
transfer of it, cannot, if he received the sum
for which a pledge has been constituted, set
up his own title to defeat the pledge of the
property, made by the other to a pledgee
who received the same in good faith and for
value.

Art. 1439. Estoppel is effective only as

between the parties thereto or their
successors in interest.

Title V. - TRUSTS (n)

CHAPTER 1
GENERAL PROVISIONS

Art. 1440. A person who establishes a trust

is called the trustor; one in whom
confidence is reposed as regards property for
the benefit of another person is known as the
 294

trustee; and the person for whose benefit the

trust has been created is referred to as the
beneficiary.

Art. 1441. Trusts are either express or

implied. Express trusts are created by the
intention of the trustor or of the parties.
Implied trusts come into being by operation
of law.

Art. 1442. The principles of the general law

of trusts, insofar as they are not in conflict
with this Code, the Code of Commerce, the
Rules of Court and special laws are hereby
adopted.

CHAPTER 2
EXPRESS TRUSTS

Art. 1443. No express trusts concerning an

immovable or any interest therein may be
proved by parol evidence.

Art. 1444. No particular words are required

for the creation of an express trust, it being
sufficient that a trust is clearly intended.

Art. 1445. No trust shall fail because the

trustee appointed declines the designation,
unless the contrary should appear in the
instrument constituting the trust.

Art. 1446. Acceptance by the beneficiary is

necessary. Nevertheless, if the trust imposes
no onerous condition upon the beneficiary,
his acceptance shall be presumed, if there is
no proof to the contrary.

CHAPTER 3
IMPLIED TRUSTS

Art. 1447. The enumeration of the following

cases of implied trust does not exclude
others established by the general law of
trust, but the limitation laid down in Article
1442 shall be applicable.

Art. 1448. There is an implied trust when

property is sold, and the legal estate is
granted to one party but the price is paid by
 295

another for the purpose of having the

beneficial interest of the property. The
former is the trustee, while the latter is the
beneficiary. However, if the person to whom
the title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of
the sale, no trust is implied by law, it being
disputably presumed that there is a gift in
favor of the child.

Art. 1449. There is also an implied trust

when a donation is made to a person but it
appears that although the legal estate is
transmitted to the donee, he nevertheless is
either to have no beneficial interest or only a
part thereof.

Art. 1450. If the price of a sale of property is

loaned or paid by one person for the benefit
of another and the conveyance is made to
the lender or payor to secure the payment of
the debt, a trust arises by operation of law in
favor of the person to whom the money is
loaned or for whom its is paid. The latter
may redeem the property and compel a
conveyance thereof to him.

Art. 1451. When land passes by succession

to any person and he causes the legal title to
be put in the name of another, a trust is
established by implication of law for the
benefit of the true owner.

Art. 1452. If two or more persons agree to

purchase property and by common consent
the legal title is taken in the name of one of
them for the benefit of all, a trust is created
by force of law in favor of the others in
proportion to the interest of each.

Art. 1453. When property is conveyed to a

person in reliance upon his declared
intention to hold it for, or transfer it to
another or the grantor, there is an implied
trust in favor of the person whose benefit is
contemplated.

Art. 1454. If an absolute conveyance of

property is made in order to secure the
performance of an obligation of the grantor
toward the grantee, a trust by virtue of law is
 296

established. If the fulfillment of the

obligation is offered by the grantor when it
becomes due, he may demand the
reconveyance of the property to him.

Art. 1455. When any trustee, guardian or

other person holding a fiduciary relationship
uses trust funds for the purchase of property
and causes the conveyance to be made to
him or to a third person, a trust is established
by operation of law in favor of the person to
whom the funds belong.

Art. 1456. If property is acquired through

mistake or fraud, the person obtaining it is,
by force of law, considered a trustee of an
implied trust for the benefit of the person
from whom the property comes.

Art. 1457. An implied trust may be proved

by oral evidence.

Title VI. - SALES

CHAPTER 1
NATURE AND FORM OF THE
CONTRACT

Art. 1458. By the contract of sale one of the

contracting parties obligates himself to
transfer the ownership and to deliver a
determinate thing, and the other to pay
therefor a price certain in money or its
equivalent.

A contract of sale may be absolute or

conditional. (1445a)

Art. 1459. The thing must be licit and the

vendor must have a right to transfer the
ownership thereof at the time it is delivered.
(n)

Art. 1460. A thing is determinate when it is

particularly designated or physical
segregated from all other of the same class.

The requisite that a thing be determinate is

satisfied if at the time the contract is entered
into, the thing is capable of being made
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determinate without the necessity of a new

or further agreement between the parties. (n)

Art. 1461. Things having a potential

existence may be the object of the contract
of sale.

The efficacy of the sale of a mere hope or

expectancy is deemed subject to the
condition that the thing will come into
existence.

The sale of a vain hope or expectancy is

void. (n)

Art. 1462. The goods which form the subject

of a contract of sale may be either existing
goods, owned or possessed by the seller, or
goods to be manufactured, raised, or
acquired by the seller after the perfection of
the contract of sale, in this Title called
"future goods."

There may be a contract of sale of goods,

whose acquisition by the seller depends
upon a contingency which may or may not
happen. (n)

Art. 1463. The sole owner of a thing may

sell an undivided interest therein. (n)

Art. 1464. In the case of fungible goods,

there may be a sale of an undivided share of
a specific mass, though the seller purports to
sell and the buyer to buy a definite number,
weight or measure of the goods in the mass,
and though the number, weight or measure
of the goods in the mass is undetermined.
By such a sale the buyer becomes owner in
common of such a share of the mass as the
number, weight or measure bought bears to
the number, weight or measure of the mass.
If the mass contains less than the number,
weight or measure bought, the buyer
becomes the owner of the whole mass and
the seller is bound to make good the
deficiency from goods of the same kind and
quality, unless a contrary intent appears. (n)

Art. 1465. Things subject to a resolutory

condition may be the object of the contract
of sale. (n)
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Art. 1466. In construing a contract

containing provisions characteristic of both
the contract of sale and of the contract of
agency to sell, the essential clauses of the
whole instrument shall be considered. (n)

Art. 1467. A contract for the delivery at a

certain price of an article which the vendor
in the ordinary course of his business
manufactures or procures for the general
market, whether the same is on hand at the
time or not, is a contract of sale, but if the
goods are to be manufactured specially for
the customer and upon his special order, and
not for the general market, it is a contract for
a piece of work. (n)

Art. 1468. If the consideration of the

contract consists partly in money, and partly
in another thing, the transaction shall be
characterized by the manifest intention of
the parties. If such intention does not clearly
appear, it shall be considered a barter if the
value of the thing given as a part of the
consideration exceeds the amount of the
money or its equivalent; otherwise, it is a
sale. (1446a)

Art. 1469. In order that the price may be

considered certain, it shall be sufficient that
it be so with reference to another thing
certain, or that the determination thereof be
left to the judgment of a special person or
persons.

Should such person or persons be unable or

unwilling to fix it, the contract shall be
inefficacious, unless the parties
subsequently agree upon the price.

If the third person or persons acted in bad

faith or by mistake, the courts may fix the
price.

Where such third person or persons are

prevented from fixing the price or terms by
fault of the seller or the buyer, the party not
in fault may have such remedies against the
party in fault as are allowed the seller or the
buyer, as the case may be. (1447a)
 299

Art. 1470. Gross inadequacy of price does

not affect a contract of sale, except as it may
indicate a defect in the consent, or that the
parties really intended a donation or some
other act or contract. (n)

Art. 1471. If the price is simulated, the sale

is void, but the act may be shown to have
been in reality a donation, or some other act
or contract. (n)

Art. 1472. The price of securities, grain,

liquids, and other things shall also be
considered certain, when the price fixed is
that which the thing sold would have on a
definite day, or in a particular exchange or
market, or when an amount is fixed above or
below the price on such day, or in such
exchange or market, provided said amount
be certain. (1448)

Art. 1473. The fixing of the price can never

be left to the discretion of one of the
contracting parties. However, if the price
fixed by one of the parties is accepted by the
other, the sale is perfected. (1449a)

Art. 1474. Where the price cannot be

determined in accordance with the preceding
articles, or in any other manner, the contract
is inefficacious. However, if the thing or any
part thereof has been delivered to and
appropriated by the buyer he must pay a
reasonable price therefor. What is a
reasonable price is a question of fact
dependent on the circumstances of each
particular case. (n)

Art. 1475. The contract of sale is perfected

at the moment there is a meeting of minds
upon the thing which is the object of the
contract and upon the price.

From that moment, the parties may

reciprocally demand performance, subject to
the provisions of the law governing the form
of contracts. (1450a)

Art. 1476. In the case of a sale by auction:

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(1) Where goods are put up for sale by

auction in lots, each lot is the subject
of a separate contract of sale.

(2) A sale by auction is perfected

when the auctioneer announces its
perfection by the fall of the hammer,
or in other customary manner. Until
such announcement is made, any
bidder may retract his bid; and the
auctioneer may withdraw the goods
from the sale unless the auction has
been announced to be without reserve.

(3) A right to bid may be reserved

expressly by or on behalf of the seller,
unless otherwise provided by law or
by stipulation.

(4) Where notice has not been given

that a sale by auction is subject to a
right to bid on behalf of the seller, it
shall not be lawful for the seller to bid
himself or to employ or induce any
person to bid at such sale on his
behalf or for the auctioneer, to employ
or induce any person to bid at such
sale on behalf of the seller or
knowingly to take any bid from the
seller or any person employed by him.
Any sale contravening this rule may
be treated as fraudulent by the buyer.
(n)

Art. 1477. The ownership of the thing sold

shall be transferred to the vendee upon the
actual or constructive delivery thereof. (n)

Art. 1478. The parties may stipulate that

ownership in the thing shall not pass to the
purchaser until he has fully paid the price.
(n)

Art. 1479. A promise to buy and sell a

determinate thing for a price certain is
reciprocally demandable.

An accepted unilateral promise to buy or to

sell a determinate thing for a price certain is
binding upon the promissor if the promise is
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supported by a consideration distinct from

the price. (1451a)

Art. 1480. Any injury to or benefit from the

thing sold, after the contract has been
perfected, from the moment of the
perfection of the contract to the time of
delivery, shall be governed by Articles 1163
to 1165, and 1262.

This rule shall apply to the sale of fungible

things, made independently and for a single
price, or without consideration of their
weight, number, or measure.

Should fungible things be sold for a price

fixed according to weight, number, or
measure, the risk shall not be imputed to the
vendee until they have been weighed,
counted, or measured and delivered, unless
the latter has incurred in delay. (1452a)

Art. 1481. In the contract of sale of goods by

description or by sample, the contract may
be rescinded if the bulk of the goods
delivered do not correspond with the
description or the sample, and if the contract
be by sample as well as description, it is not
sufficient that the bulk of goods correspond
with the sample if they do not also
correspond with the description.

The buyer shall have a reasonable

opportunity of comparing the bulk with the
description or the sample. (n)

Art. 1482. Whenever earnest money is given

in a contract of sale, it shall be considered as
part of the price and as proof of the
perfection of the contract. (1454a)

Art. 1483. Subject to the provisions of the

Statute of Frauds and of any other applicable
statute, a contract of sale may be made in
writing, or by word of mouth, or partly in
writing and partly by word of mouth, or may
be inferred from the conduct of the parties.
(n)

Art. 1484. In a contract of sale of personal

property the price of which is payable in
 302

installments, the vendor may exercise any of

the following remedies:

(1) Exact fulfillment of the obligation,

should the vendee fail to pay;

(2) Cancel the sale, should the

vendee's failure to pay cover two or
more installments;

(3) Foreclose the chattel mortgage on

the thing sold, if one has been
constituted, should the vendee's
failure to pay cover two or more
installments. In this case, he shall
have no further action against the
purchaser to recover any unpaid
balance of the price. Any agreement
to the contrary shall be void. (1454-A-
a)

Art. 1485. The preceding article shall be

applied to contracts purporting to be leases
of personal property with option to buy,
when the lessor has deprived the lessee of
the possession or enjoyment of the thing.
(1454-A-a)

Art. 1486. In the case referred to in two

preceding articles, a stipulation that the
installments or rents paid shall not be
returned to the vendee or lessee shall be
valid insofar as the same may not be
unconscionable under the circumstances. (n)

Art. 1487. The expenses for the execution

and registration of the sale shall be borne by
the vendor, unless there is a stipulation to
the contrary. (1455a)

Art. 1488. The expropriation of property for

public use is governed by special laws.
(1456)

CHAPTER 2
CAPACITY TO BUY OR SELL

Art. 1489. All persons who are authorized in

this Code to obligate themselves, may enter
into a contract of sale, saving the
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modifications contained in the following

articles.

Where necessaries are those sold and

delivered to a minor or other person without
capacity to act, he must pay a reasonable
price therefor. Necessaries are those referred
to in Article 290. (1457a)

Art. 1490. The husband and the wife cannot

sell property to each other, except:

(1) When a separation of property was

agreed upon in the marriage
settlements; or

(2) When there has been a judicial

separation or property under Article
191. (1458a)

Art. 1491. The following persons cannot

acquire by purchase, even at a public or
judicial auction, either in person or through
the mediation of another:
(1) The guardian, the property of the
person or persons who may be under
his guardianship;

(2) Agents, the property whose

administration or sale may have been
entrusted to them, unless the consent
of the principal has been given;

(3) Executors and administrators, the

property of the estate under
administration;

(4) Public officers and employees, the

property of the State or of any
subdivision thereof, or of any
government-owned or controlled
corporation, or institution, the
administration of which has been
intrusted to them; this provision shall
apply to judges and government
experts who, in any manner
whatsoever, take part in the sale;

(5) Justices, judges, prosecuting

attorneys, clerks of superior and
inferior courts, and other officers and
employees connected with the
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administration of justice, the property

and rights in litigation or levied upon
an execution before the court within
whose jurisdiction or territory they
exercise their respective functions;
this prohibition includes the act of
acquiring by assignment and shall
apply to lawyers, with respect to the
property and rights which may be the
object of any litigation in which they
may take part by virtue of their
profession.

(6) Any others specially disqualified

by law. (1459a)

Art. 1492. The prohibitions in the two

preceding articles are applicable to sales in
legal redemption, compromises and
renunciations. (n)

CHAPTER 3
EFFECTS OF THE CONTRACT
WHEN THE THING SOLD HAS BEEN
LOST

Art. 1493. If at the time the contract of sale

is perfected, the thing which is the object of
the contract has been entirely lost, the
contract shall be without any effect.

But if the thing should have been lost in part

only, the vendee may choose between
withdrawing from the contract and
demanding the remaining part, paying its
price in proportion to the total sum agreed
upon. (1460a)

Art. 1494. Where the parties purport a sale

of specific goods, and the goods without the
knowledge of the seller have perished in part
or have wholly or in a material part so
deteriorated in quality as to be substantially
changed in character, the buyer may at his
option treat the sale:

(1) As avoided; or

(2) As valid in all of the existing

goods or in so much thereof as have
not deteriorated, and as binding the
 305

buyer to pay the agreed price for the

goods in which the ownership will
pass, if the sale was divisible. (n)

CHAPTER 4
OBLIGATIONS OF THE VENDOR

SECTION 1. - General Provisions

Art. 1495. The vendor is bound to transfer

the ownership of and deliver, as well as
warrant the thing which is the object of the
sale. (1461a)

Art. 1496. The ownership of the thing sold is

acquired by the vendee from the moment it
is delivered to him in any of the ways
specified in Articles 1497 to 1501, or in any
other manner signifying an agreement that
the possession is transferred from the vendor
to the vendee. (n)

SECTION 2. - Delivery of the Thing Sold

Art. 1497. The thing sold shall be

understood as delivered, when it is placed in
the control and possession of the vendee.
(1462a)

Art. 1498. When the sale is made through a

public instrument, the execution thereof
shall be equivalent to the delivery of the
thing which is the object of the contract, if
from the deed the contrary does not appear
or cannot clearly be inferred.

With regard to movable property, its

delivery may also be made by the delivery
of the keys of the place or depository where
it is stored or kept. (1463a)

Art. 1499. The delivery of movable property

may likewise be made by the mere consent
or agreement of the contracting parties, if
the thing sold cannot be transferred to the
possession of the vendee at the time of the
sale, or if the latter already had it in his
possession for any other reason. (1463a)
 306

Art. 1500. There may also be tradition

constitutum possessorium. (n)

Art. 1501. With respect to incorporeal

property, the provisions of the first
paragraph of article 1498 shall govern. In
any other case wherein said provisions are
not applicable, the placing of the titles of
ownership in the possession of the vendee or
the use by the vendee of his rights, with the
vendor's consent, shall be understood as a
delivery. (1464)

Art. 1502. When goods are delivered to the

buyer "on sale or return" to give the buyer
an option to return the goods instead of
paying the price, the ownership passes to the
buyer of delivery, but he may revest the
ownership in the seller by returning or
tendering the goods within the time fixed in
the contract, or, if no time has been fixed,
within a reasonable time. (n)

When goods are delivered to the buyer on

approval or on trial or on satisfaction, or
other similar terms, the ownership therein
passes to the buyer:

(1) When he signifies his approval or

acceptance to the seller or does any
other act adopting the transaction;

(2) If he does not signify his approval

or acceptance to the seller, but retains
the goods without giving notice of
rejection, then if a time has been fixed
for the return of the goods, on the
expiration of such time, and, if no
time has been fixed, on the expiration
of a reasonable time. What is a
reasonable time is a question of fact.
(n)

Art. 1503. When there is a contract of sale

of specific goods, the seller may, by the
terms of the contract, reserve the right of
possession or ownership in the goods until
certain conditions have been fulfilled. The
right of possession or ownership may be
thus reserved notwithstanding the delivery
of the goods to the buyer or to a carrier or
 307

other bailee for the purpose of transmission

to the buyer.

Where goods are shipped, and by the bill of

lading the goods are deliverable to the seller
or his agent, or to the order of the seller or of
his agent, the seller thereby reserves the
ownership in the goods. But, if except for
the form of the bill of lading, the ownership
would have passed to the buyer on shipment
of the goods, the seller's property in the
goods shall be deemed to be only for the
purpose of securing performance by the
buyer of his obligations under the contract.

Where goods are shipped, and by the bill of

lading the goods are deliverable to order of
the buyer or of his agent, but possession of
the bill of lading is retained by the seller or
his agent, the seller thereby reserves a right
to the possession of the goods as against the
buyer.

Where the seller of goods draws on the

buyer for the price and transmits the bill of
exchange and bill of lading together to the
buyer to secure acceptance or payment of
the bill of exchange, the buyer is bound to
return the bill of lading if he does not honor
the bill of exchange, and if he wrongfully
retains the bill of lading he acquires no
added right thereby. If, however, the bill of
lading provides that the goods are
deliverable to the buyer or to the order of the
buyer, or is indorsed in blank, or to the
buyer by the consignee named therein, one
who purchases in good faith, for value, the
bill of lading, or goods from the buyer will
obtain the ownership in the goods, although
the bill of exchange has not been honored,
provided that such purchaser has received
delivery of the bill of lading indorsed by the
consignee named therein, or of the goods,
without notice of the facts making the
transfer wrongful. (n)

Art. 1504. Unless otherwise agreed, the

goods remain at the seller's risk until the
ownership therein is transferred to the buyer,
but when the ownership therein is
transferred to the buyer the goods are at the
 308

buyer's risk whether actual delivery has been

made or not, except that:

(1) Where delivery of the goods has

been made to the buyer or to a bailee
for the buyer, in pursuance of the
contract and the ownership in the
goods has been retained by the seller
merely to secure performance by the
buyer of his obligations under the
contract, the goods are at the buyer's
risk from the time of such delivery;

(2) Where actual delivery has been

delayed through the fault of either the
buyer or seller the goods are at the
risk of the party in fault. (n)

Art. 1505. Subject to the provisions of this

Title, where goods are sold by a person who
is not the owner thereof, and who does not
sell them under authority or with the consent
of the owner, the buyer acquires no better
title to the goods than the seller had, unless
the owner of the goods is by his conduct
precluded from denying the seller's authority
to sell.

Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act,

recording laws, or any other provision
of law enabling the apparent owner of
goods to dispose of them as if he were
the true owner thereof;

(2) The validity of any contract of sale

under statutory power of sale or under
the order of a court of competent
jurisdiction;

(3) Purchases made in a merchant's

store, or in fairs, or markets, in
accordance with the Code of
Commerce and special laws. (n)

Art. 1506. Where the seller of goods has a

voidable title thereto, but his title has not
been avoided at the time of the sale, the
buyer acquires a good title to the goods,
provided he buys them in good faith, for
 309

value, and without notice of the seller's

defect of title. (n)

Art. 1507. A document of title in which it is

stated that the goods referred to therein will
be delivered to the bearer, or to the order of
any person named in such document is a
negotiable document of title. (n)

Art. 1508. A negotiable document of title

may be negotiated by delivery:

(1) Where by the terms of the

document the carrier, warehouseman
or other bailee issuing the same
undertakes to deliver the goods to the
bearer; or

(2) Where by the terms of the

document the carrier, warehouseman
or other bailee issuing the same
undertakes to deliver the goods to the
order of a specified person, and such
person or a subsequent endorsee of
the document has indorsed it in blank
or to the bearer.

Where by the terms of a negotiable

document of title the goods are deliverable
to bearer or where a negotiable document of
title has been indorsed in blank or to bearer,
any holder may indorse the same to himself
or to any specified person, and in such case
the document shall thereafter be negotiated
only by the endorsement of such endorsee.
(n)

Art. 1509. A negotiable document of title

may be negotiated by the endorsement of the
person to whose order the goods are by the
terms of the document deliverable. Such
endorsement may be in blank, to bearer or to
a specified person. If indorsed to a specified
person, it may be again negotiated by the
endorsement of such person in blank, to
bearer or to another specified person.
Subsequent negotiations may be made in
like manner. (n)

Art. 1510. If a document of title which

contains an undertaking by a carrier,
 310

warehouseman or other bailee to deliver the

goods to bearer, to a specified person or
order of a specified person or which
contains words of like import, has placed
upon it the words "not negotiable," "non-
negotiable" or the like, such document may
nevertheless be negotiated by the holder and
is a negotiable document of title within the
meaning of this Title. But nothing in this
Title contained shall be construed as limiting
or defining the effect upon the obligations of
the carrier, warehouseman, or other bailee
issuing a document of title or placing
thereon the words "not negotiable," "non-
negotiable," or the like. (n)

Art. 1511. A document of title which is not

in such form that it can be negotiated by
delivery may be transferred by the holder by
delivery to a purchaser or donee. A non-
negotiable document cannot be negotiated
and the endorsement of such a document
gives the transferee no additional right. (n)

Art. 1512. A negotiable document of title

may be negotiated:

(1) By the owner therefor; or

(2) By any person to whom the

possession or custody of the
document has been entrusted by the
owner, if, by the terms of the
document the bailee issuing the
document undertakes to deliver the
goods to the order of the person to
whom the possession or custody of
the document has been entrusted, or if
at the time of such entrusting the
document is in such form that it may
be negotiated by delivery. (n)

Art. 1513. A person to whom a negotiable

document of title has been duly negotiated
acquires thereby:
(1) Such title to the goods as the
person negotiating the document to
him had or had ability to convey to a
purchaser in good faith for value and
also such title to the goods as the
person to whose order the goods were
 311

to be delivered by the terms of the

document had or had ability to convey
to a purchaser in good faith for value;
and

(2) The direct obligation of the bailee

issuing the document to hold
possession of the goods for him
according to the terms of the
document as fully as if such bailee
had contracted directly with him. (n)

Art. 1514. A person to whom a document of

title has been transferred, but not negotiated,
acquires thereby, as against the transferor,
the title to the goods, subject to the terms of
any agreement with the transferor.

If the document is non-negotiable, such

person also acquires the right to notify the
bailee who issued the document of the
transfer thereof, and thereby to acquire the
direct obligation of such bailee to hold
possession of the goods for him according to
the terms of the document.

Prior to the notification to such bailee by the

transferor or transferee of a non-negotiable
document of title, the title of the transferee
to the goods and the right to acquire the
obligation of such bailee may be defeated by
the levy of an attachment of execution upon
the goods by a creditor of the transferor, or
by a notification to such bailee by the
transferor or a subsequent purchaser from
the transfer of a subsequent sale of the goods
by the transferor. (n)

Art. 1515. Where a negotiable document of

title is transferred for value by delivery, and
the endorsement of the transferor is essential
for negotiation, the transferee acquires a
right against the transferor to compel him to
endorse the document unless a contrary
intention appears. The negotiation shall take
effect as of the time when the endorsement
is actually made. (n)

Art. 1516. A person who for value negotiates

or transfers a document of title by
endorsement or delivery, including one who
 312

assigns for value a claim secured by a

document of title unless a contrary intention
appears, warrants:

(1) That the document is genuine;

(2) That he has a legal right to

negotiate or transfer it;

(3) That he has knowledge of no fact

which would impair the validity or
worth of the document; and

(4) That he has a right to transfer the

title to the goods and that the goods
are merchantable or fit for a particular
purpose, whenever such warranties
would have been implied if the
contract of the parties had been to
transfer without a document of title
the goods represented thereby. (n)

Art. 1517. The endorsement of a document

of title shall not make the endorser liable for
any failure on the part of the bailee who
issued the document or previous endorsers
thereof to fulfill their respective obligations.
(n)

Art. 1518. The validity of the negotiation of

a negotiable document of title is not
impaired by the fact that the negotiation was
a breach of duty on the part of the person
making the negotiation, or by the fact that
the owner of the document was deprived of
the possession of the same by loss, theft,
fraud, accident, mistake, duress, or
conversion, if the person to whom the
document was negotiated or a person to
whom the document was subsequently
negotiated paid value therefor in good faith
without notice of the breach of duty, or loss,
theft, fraud, accident, mistake, duress or
conversion. (n)

Art. 1519. If goods are delivered to a bailee

by the owner or by a person whose act in
conveying the title to them to a purchaser in
good faith for value would bind the owner
and a negotiable document of title is issued
for them they cannot thereafter, while in
 313

possession of such bailee, be attached by

garnishment or otherwise or be levied under
an execution unless the document be first
surrendered to the bailee or its negotiation
enjoined. The bailee shall in no case be
compelled to deliver up the actual
possession of the goods until the document
is surrendered to him or impounded by the
court. (n)

Art. 1520. A creditor whose debtor is the

owner of a negotiable document of title shall
be entitled to such aid from courts of
appropriate jurisdiction by injunction and
otherwise in attaching such document or in
satisfying the claim by means thereof as is
allowed at law or in equity in regard to
property which cannot readily be attached or
levied upon by ordinary legal process. (n)

Art. 1521. Whether it is for the buyer to take

possession of the goods or of the seller to
send them to the buyer is a question
depending in each case on the contract,
express or implied, between the parties.
Apart from any such contract, express or
implied, or usage of trade to the contrary, the
place of delivery is the seller's place of
business if he has one, and if not his
residence; but in case of a contract of sale of
specific goods, which to the knowledge of
the parties when the contract or the sale was
made were in some other place, then that
place is the place of delivery.

Where by a contract of sale the seller is

bound to send the goods to the buyer, but no
time for sending them is fixed, the seller is
bound to send them within a reasonable
time.

Where the goods at the time of sale are in

the possession of a third person, the seller
has not fulfilled his obligation to deliver to
the buyer unless and until such third person
acknowledges to the buyer that he holds the
goods on the buyer's behalf.

Demand or tender of delivery may be treated

as ineffectual unless made at a reasonable
 314

hour. What is a reasonable hour is a question

of fact.

Unless otherwise agreed, the expenses of

and incidental to putting the goods into a
deliverable state must be borne by the seller.
(n)

Art. 1522. Where the seller delivers to the

buyer a quantity of goods less than he
contracted to sell, the buyer may reject
them, but if the buyer accepts or retains the
goods so delivered, knowing that the seller
is not going to perform the contract in full,
he must pay for them at the contract rate. If,
however, the buyer has used or disposed of
the goods delivered before he knows that the
seller is not going to perform his contract in
full, the buyer shall not be liable for more
than the fair value to him of the goods so
received.

Where the seller delivers to the buyer a

quantity of goods larger than he contracted
to sell, the buyer may accept the goods
included in the contract and reject the rest. If
the buyer accepts the whole of the goods so
delivered he must pay for them at the
contract rate.

Where the seller delivers to the buyer the

goods he contracted to sell mixed with
goods of a different description not included
in the contract, the buyer may accept the
goods which are in accordance with the
contract and reject the rest.

In the preceding two paragraphs, if the

subject matter is indivisible, the buyer may
reject the whole of the goods.

The provisions of this article are subject to

any usage of trade, special agreement, or
course of dealing between the parties. (n)

Art. 1523. Where, in pursuance of a contract

of sale, the seller is authorized or required to
send the goods to the buyer, delivery of the
goods to a carrier, whether named by the
buyer or not, for the purpose of transmission
to the buyer is deemed to be a delivery of
 315

the goods to the buyer, except in the case

provided for in Article 1503, first, second
and third paragraphs, or unless a contrary
intent appears.

Unless otherwise authorized by the buyer,

the seller must make such contract with the
carrier on behalf of the buyer as may be
reasonable, having regard to the nature of
the goods and the other circumstances of the
case. If the seller omit so to do, and the
goods are lost or damaged in course of
transit, the buyer may decline to treat the
delivery to the carrier as a delivery to
himself, or may hold the seller responsible
in damages.

Unless otherwise agreed, where goods are

sent by the seller to the buyer under
circumstances in which the seller knows or
ought to know that it is usual to insure, the
seller must give such notice to the buyer as
may enable him to insure them during their
transit, and, if the seller fails to do so, the
goods shall be deemed to be at his risk
during such transit. (n)

Art. 1524. The vendor shall not be bound to

deliver the thing sold, if the vendee has not
paid him the price, or if no period for the
payment has been fixed in the contract.
(1466)

Art. 1525. The seller of goods is deemed to

be an unpaid seller within the meaning of
this Title:

(1) When the whole of the price has

not been paid or tendered;

(2) When a bill of exchange or other

negotiable instrument has been
received as conditional payment, and
the condition on which it was
received has been broken by reason of
the dishonor of the instrument, the
insolvency of the buyer, or otherwise.

In Articles 1525 to 1535 the term "seller"

includes an agent of the seller to whom the
bill of lading has been indorsed, or a
 316

consignor or agent who has himself paid, or

is directly responsible for the price, or any
other person who is in the position of a
seller. (n)

Art. 1526. Subject to the provisions of this

Title, notwithstanding that the ownership in
the goods may have passed to the buyer, the
unpaid seller of goods, as such, has:

(1) A lien on the goods or right to

retain them for the price while he is in
possession of them;

(2) In case of the insolvency of the

buyer, a right of stopping the goods in
transitu after he has parted with the
possession of them;

(3) A right of resale as limited by this

Title;

(4) A right to rescind the sale as

likewise limited by this Title.

Where the ownership in the goods has not

passed to the buyer, the unpaid seller has, in
addition to his other remedies a right of
withholding delivery similar to and
coextensive with his rights of lien and
stoppage in transitu where the ownership has
passed to the buyer. (n)

Art. 1527. Subject to the provisions of this

Title, the unpaid seller of goods who is in
possession of them is entitled to retain
possession of them until payment or tender
of the price in the following cases, namely:

(1) Where the goods have been sold

without any stipulation as to credit;

(2) Where the goods have been sold

on credit, but the term of credit has
expired;

(3) Where the buyer becomes

insolvent.

The seller may exercise his right of lien

notwithstanding that he is in possession of
 317

the goods as agent or bailee for the buyer.

(n)

Art. 1528. Where an unpaid seller has made

part delivery of the goods, he may exercise
his right of lien on the remainder, unless
such part delivery has been made under such
circumstances as to show an intent to waive
the lien or right of retention. (n)

Art. 1529. The unpaid seller of goods loses

his lien thereon:

(1) When he delivers the goods to a

carrier or other bailee for the purpose
of transmission to the buyer without
reserving the ownership in the goods
or the right to the possession thereof;

(2) When the buyer or his agent

lawfully obtains possession of the
goods;

(3) By waiver thereof.

The unpaid seller of goods, having a lien

thereon, does not lose his lien by reason
only that he has obtained judgment or decree
for the price of the goods. (n)

Art. 1530. Subject to the provisions of this

Title, when the buyer of goods is or becomes
insolvent, the unpaid seller who has parted
with the possession of the goods has the
right of stopping them in transitu, that is to
say, he may resume possession of the goods
at any time while they are in transit, and he
will then become entitled to the same rights
in regard to the goods as he would have had
if he had never parted with the possession.
(n)

Art. 1531. Goods are in transit within the

meaning of the preceding article:

(1) From the time when they are

delivered to a carrier by land, water,
or air, or other bailee for the purpose
of transmission to the buyer, until the
buyer, or his agent in that behalf,
takes delivery of them from such
carrier or other bailee;
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(2) If the goods are rejected by the

buyer, and the carrier or other bailee
continues in possession of them, even
if the seller has refused to receive
them back.

Goods are no longer in transit within the

meaning of the preceding article:
(1) If the buyer, or his agent in that
behalf, obtains delivery of the goods
before their arrival at the appointed
destination;

(2) If, after the arrival of the goods at

the appointed destination, the carrier
or other bailee acknowledges to the
buyer or his agent that he holds the
goods on his behalf and continues in
possession of them as bailee for the
buyer or his agent; and it is
immaterial that further destination for
the goods may have been indicated by
the buyer;

(3) If the carrier or other bailee

wrongfully refuses to deliver the
goods to the buyer or his agent in that
behalf.

If the goods are delivered to a ship, freight

train, truck, or airplane chartered by the
buyer, it is a question depending on the
circumstances of the particular case, whether
they are in the possession of the carrier as
such or as agent of the buyer.

If part delivery of the goods has been made

to the buyer, or his agent in that behalf, the
remainder of the goods may be stopped in
transitu, unless such part delivery has been
under such circumstances as to show an
agreement with the buyer to give up
possession of the whole of the goods. (n)

Art. 1532. The unpaid seller may exercise

his right of stoppage in transitu either by
obtaining actual possession of the goods or
by giving notice of his claim to the carrier or
other bailee in whose possession the goods
are. Such notice may be given either to the
person in actual possession of the goods or
 319

to his principal. In the latter case the notice,

to be effectual, must be given at such time
and under such circumstances that the
principal, by the exercise of reasonable
diligence, may prevent a delivery to the
buyer.

When notice of stoppage in transitu is given

by the seller to the carrier, or other bailee in
possession of the goods, he must redeliver
the goods to, or according to the directions
of, the seller. The expenses of such delivery
must be borne by the seller. If, however, a
negotiable document of title representing the
goods has been issued by the carrier or other
bailee, he shall not obliged to deliver or
justified in delivering the goods to the seller
unless such document is first surrendered for
cancellation. (n)

Art. 1533. Where the goods are of

perishable nature, or where the seller
expressly reserves the right of resale in case
the buyer should make default, or where the
buyer has been in default in the payment of
the price for an unreasonable time, an
unpaid seller having a right of lien or having
stopped the goods in transitu may resell the
goods. He shall not thereafter be liable to the
original buyer upon the contract of sale or
for any profit made by such resale, but may
recover from the buyer damages for any loss
occasioned by the breach of the contract of
sale.

Where a resale is made, as authorized in this

article, the buyer acquires a good title as
against the original buyer.

It is not essential to the validity of resale that

notice of an intention to resell the goods be
given by the seller to the original buyer. But
where the right to resell is not based on the
perishable nature of the goods or upon an
express provision of the contract of sale, the
giving or failure to give such notice shall be
relevant in any issue involving the question
whether the buyer had been in default for an
unreasonable time before the resale was
made.
 320

It is not essential to the validity of a resale

that notice of the time and place of such
resale should be given by the seller to the
original buyer.

The seller is bound to exercise reasonable

care and judgment in making a resale, and
subject to this requirement may make a
resale either by public or private sale. He
cannot, however, directly or indirectly buy
the goods. (n)

Art. 1534. An unpaid seller having the right

of lien or having stopped the goods in
transitu, may rescind the transfer of title and
resume the ownership in the goods, where
he expressly reserved the right to do so in
case the buyer should make default, or
where the buyer has been in default in the
payment of the price for an unreasonable
time. The seller shall not thereafter be liable
to the buyer upon the contract of sale, but
may recover from the buyer damages for
any loss occasioned by the breach of the
contract.

The transfer of title shall not be held to have

been rescinded by an unpaid seller until he
has manifested by notice to the buyer or by
some other overt act an intention to rescind.
It is not necessary that such overt act should
be communicated to the buyer, but the
giving or failure to give notice to the buyer
of the intention to rescind shall be relevant
in any issue involving the question whether
the buyer had been in default for an
unreasonable time before the right of
rescission was asserted. (n)

Art. 1535. Subject to the provisions of this

Title, the unpaid seller's right of lien or
stoppage in transitu is not affected by any
sale, or other disposition of the goods which
the buyer may have made, unless the seller
has assented thereto.

If, however, a negotiable document of title

has been issued for goods, no seller's lien or
right of stoppage in transitu shall defeat the
right of any purchaser for value in good faith
to whom such document has been
 321

negotiated, whether such negotiation be

prior or subsequent to the notification to the
carrier, or other bailee who issued such
document, of the seller's claim to a lien or
right of stoppage in transitu. (n)

Art. 1536. The vendor is not bound to

deliver the thing sold in case the vendee
should lose the right to make use of the
terms as provided in Article 1198. (1467a)

Art. 1537. The vendor is bound to deliver

the thing sold and its accessions and
accessories in the condition in which they
were upon the perfection of the contract.

All the fruits shall pertain to the vendee

from the day on which the contract was
perfected. (1468a)

Art. 1538. In case of loss, deterioration or

improvement of the thing before its delivery,
the rules in Article 1189 shall be observed,
the vendor being considered the debtor. (n)

Art. 1539. The obligation to deliver the

thing sold includes that of placing in the
control of the vendee all that is mentioned in
the contract, in conformity with the
following rules:

If the sale of real estate should be made with

a statement of its area, at the rate of a certain
price for a unit of measure or number, the
vendor shall be obliged to deliver to the
vendee, if the latter should demand it, all
that may have been stated in the contract;
but, should this be not possible, the vendee
may choose between a proportional
reduction of the price and the rescission of
the contract, provided that, in the latter case,
the lack in the area be not less than one-
tenth of that stated.

The same shall be done, even when the area

is the same, if any part of the immovable is
not of the quality specified in the contract.

The rescission, in this case, shall only take

place at the will of the vendee, when the
inferior value of the thing sold exceeds one-
tenth of the price agreed upon.
 322

Nevertheless, if the vendee would not have

bought the immovable had he known of its
smaller area of inferior quality, he may
rescind the sale. (1469a)

Art. 1540. If, in the case of the preceding

article, there is a greater area or number in
the immovable than that stated in the
contract, the vendee may accept the area
included in the contract and reject the rest. If
he accepts the whole area, he must pay for
the same at the contract rate. (1470a)

Art. 1541. The provisions of the two

preceding articles shall apply to judicial
sales. (n)

Art. 1542. In the sale of real estate, made for

a lump sum and not at the rate of a certain
sum for a unit of measure or number, there
shall be no increase or decrease of the price,
although there be a greater or less area or
number than that stated in the contract.

The same rule shall be applied when two or

more immovables as sold for a single price;
but if, besides mentioning the boundaries,
which is indispensable in every conveyance
of real estate, its area or number should be
designated in the contract, the vendor shall
be bound to deliver all that is included
within said boundaries, even when it
exceeds the area or number specified in the
contract; and, should he not be able to do so,
he shall suffer a reduction in the price, in
proportion to what is lacking in the area or
number, unless the contract is rescinded
because the vendee does not accede to the
failure to deliver what has been stipulated.
(1471)

Art. 1543. The actions arising from Articles

1539 and 1542 shall prescribe in six months,
counted from the day of delivery. (1472a)

Art. 1544. If the same thing should have

been sold to different vendees, the
ownership shall be transferred to the person
who may have first taken possession thereof
in good faith, if it should be movable
property.
 323

Should it be immovable property, the

ownership shall belong to the person
acquiring it who in good faith first recorded
it in the Registry of Property.

Should there be no inscription, the

ownership shall pertain to the person who in
good faith was first in the possession; and,
in the absence thereof, to the person who
presents the oldest title, provided there is
good faith. (1473)

SECTION 3. - Conditions and Warranties

Art. 1545. Where the obligation of either

party to a contract of sale is subject to any
condition which is not performed, such party
may refuse to proceed with the contract or
he may waive performance of the condition.
If the other party has promised that the
condition should happen or be performed,
such first mentioned party may also treat the
nonperformance of the condition as a breach
of warranty.

Where the ownership in the thing has not

passed, the buyer may treat the fulfillment
by the seller of his obligation to deliver the
same as described and as warranted
expressly or by implication in the contract of
sale as a condition of the obligation of the
buyer to perform his promise to accept and
pay for the thing. (n)

Art. 1546. Any affirmation of fact or any

promise by the seller relating to the thing is
an express warranty if the natural tendency
of such affirmation or promise is to induce
the buyer to purchase the same, and if the
buyer purchase the thing relying thereon. No
affirmation of the value of the thing, nor any
statement purporting to be a statement of the
seller's opinion only, shall be construed as a
warranty, unless the seller made such
affirmation or statement as an expert and it
was relied upon by the buyer. (n)

Art. 1547. In a contract of sale, unless a

contrary intention appears, there is:
 324

(1) An implied warranty on the part of

the seller that he has a right to sell the
thing at the time when the ownership
is to pass, and that the buyer shall
from that time have and enjoy the
legal and peaceful possession of the
thing;

(2) An implied warranty that the thing

shall be free from any hidden faults or
defects, or any charge or encumbrance
not declared or known to the buyer.

This Article shall not, however, be held to

render liable a sheriff, auctioneer,
mortgagee, pledgee, or other person
professing to sell by virtue of authority in
fact or law, for the sale of a thing in which a
third person has a legal or equitable interest.
(n)

SUBSECTION 1. - Warranty in Case of

Eviction

Art. 1548. Eviction shall take place

whenever by a final judgment based on a
right prior to the sale or an act imputable to
the vendor, the vendee is deprived of the
whole or of a part of the thing purchased.

The vendor shall answer for the eviction

even though nothing has been said in the
contract on the subject.

The contracting parties, however, may

increase, diminish, or suppress this legal
obligation of the vendor. (1475a)

Art. 1549. The vendee need not appeal from

the decision in order that the vendor may
become liable for eviction. (n)

Art. 1550. When adverse possession had

been commenced before the sale but the
prescriptive period is completed after the
transfer, the vendor shall not be liable for
eviction. (n)

Art. 1551. If the property is sold for

nonpayment of taxes due and not made
 325

known to the vendee before the sale, the

vendor is liable for eviction. (n)

Art. 1552. The judgment debtor is also

responsible for eviction in judicial sales,
unless it is otherwise decreed in the
judgment. (n)

Art. 1553. Any stipulation exempting the

vendor from the obligation to answer for
eviction shall be void, if he acted in bad
faith. (1476)

Art. 1554. If the vendee has renounced the

right to warranty in case of eviction, and
eviction should take place, the vendor shall
only pay the value which the thing sold had
at the time of the eviction. Should the
vendee have made the waiver with
knowledge of the risks of eviction and
assumed its consequences, the vendor shall
not be liable. (1477)

Art. 1555. When the warranty has been

agreed upon or nothing has been stipulated
on this point, in case eviction occurs, the
vendee shall have the right to demand of the
vendor:

(1) The return of the value which the

thing sold had at the time of the
eviction, be it greater or less than the
price of the sale;

(2) The income or fruits, if he has

been ordered to deliver them to the
party who won the suit against him;

(3) The costs of the suit which caused

the eviction, and, in a proper case,
those of the suit brought against the
vendor for the warranty;

(4) The expenses of the contract, if the

vendee has paid them;

(5) The damages and interests, and

ornamental expenses, if the sale was
made in bad faith. (1478)

Art. 1556. Should the vendee lose, by reason

of the eviction, a part of the thing sold of
 326

such importance, in relation to the whole,

that he would not have bought it without
said part, he may demand the rescission of
the contract; but with the obligation to return
the thing without other encumbrances that
those which it had when he acquired it.

He may exercise this right of action, instead

of enforcing the vendor's liability for
eviction.

The same rule shall be observed when two

or more things have been jointly sold for a
lump sum, or for a separate price for each of
them, if it should clearly appear that the
vendee would not have purchased one
without the other. (1479a)

Art. 1557. The warranty cannot be enforced

until a final judgment has been rendered,
whereby the vendee loses the thing acquired
or a part thereof. (1480)

Art. 1558. The vendor shall not be obliged

to make good the proper warranty, unless he
is summoned in the suit for eviction at the
instance of the vendee. (1481a)

Art. 1559. The defendant vendee shall ask,

within the time fixed in the Rules of Court
for answering the complaint, that the vendor
be made a co-defendant. (1482a)

Art. 1560. If the immovable sold should be

encumbered with any non-apparent burden
or servitude, not mentioned in the
agreement, of such a nature that it must be
presumed that the vendee would not have
acquired it had he been aware thereof, he
may ask for the rescission of the contract,
unless he should prefer the appropriate
indemnity. Neither right can be exercised if
the non-apparent burden or servitude is
recorded in the Registry of Property, unless
there is an express warranty that the thing is
free from all burdens and encumbrances.

Within one year, to be computed from the

execution of the deed, the vendee may bring
the action for rescission, or sue for damages.
 327

One year having elapsed, he may only bring

an action for damages within an equal
period, to be counted from the date on which
he discovered the burden or servitude.
(1483a)

SUBSECTION 2. - Warranty Against

Hidden Defects
of or Encumbrances Upon the Thing Sold

Art. 1561. The vendor shall be responsible

for warranty against the hidden defects
which the thing sold may have, should they
render it unfit for the use for which it is
intended, or should they diminish its fitness
for such use to such an extent that, had the
vendee been aware thereof, he would not
have acquired it or would have given a
lower price for it; but said vendor shall not
be answerable for patent defects or those
which may be visible, or for those which are
not visible if the vendee is an expert who, by
reason of his trade or profession, should
have known them. (1484a)

Art. 1562. In a sale of goods, there is an

implied warranty or condition as to the
quality or fitness of the goods, as follows:

(1) Where the buyer, expressly or by

implication, makes known to the
seller the particular purpose for which
the goods are acquired, and it appears
that the buyer relies on the seller's
skill or judgment (whether he be the
grower or manufacturer or not), there
is an implied warranty that the goods
shall be reasonably fit for such
purpose;

(2) Where the goods are brought by

description from a seller who deals in
goods of that description (whether he
be the grower or manufacturer or not),
there is an implied warranty that the
goods shall be of merchantable
quality. (n)

Art. 1563. In the case of contract of sale of a

specified article under its patent or other
 328

trade name, there is no warranty as to its

fitness for any particular purpose, unless
there is a stipulation to the contrary. (n)

Art. 1564. An implied warranty or condition

as to the quality or fitness for a particular
purpose may be annexed by the usage of
trade. (n)

Art. 1565. In the case of a contract of sale by

sample, if the seller is a dealer in goods of
that kind, there is an implied warranty that
the goods shall be free from any defect
rendering them unmerchantable which
would not be apparent on reasonable
examination of the sample. (n)

Art. 1566. The vendor is responsible to the

vendee for any hidden faults or defects in
the thing sold, even though he was not
aware thereof.

This provision shall not apply if the contrary

has been stipulated, and the vendor was not
aware of the hidden faults or defects in the
thing sold. (1485)

Art. 1567. In the cases of Articles 1561,

1562, 1564, 1565 and 1566, the vendee may
elect between withdrawing from the contract
and demanding a proportionate reduction of
the price, with damages in either case.
(1486a)

Art. 1568. If the thing sold should be lost in

consequence of the hidden faults, and the
vendor was aware of them, he shall bear the
loss, and shall be obliged to return the price
and refund the expenses of the contract, with
damages. If he was not aware of them, he
shall only return the price and interest
thereon, and reimburse the expenses of the
contract which the vendee might have paid.
(1487a)

Art. 1569. If the thing sold had any hidden

fault at the time of the sale, and should
thereafter be lost by a fortuitous event or
through the fault of the vendee, the latter
may demand of the vendor the price which
 329

he paid, less the value which the thing had

when it was lost.

If the vendor acted in bad faith, he shall pay

damages to the vendee. (1488a)

Art. 1570. The preceding articles of this

Subsection shall be applicable to judicial
sales, except that the judgment debtor shall
not be liable for damages. (1489a)

Art. 1571. Actions arising from the

provisions of the preceding ten articles shall
be barred after six months, from the delivery
of the thing sold. (1490)

Art. 1572. If two or more animals are sold

together, whether for a lump sum or for a
separate price for each of them, the
redhibitory defect of one shall only give rise
to its redhibition, and not that of the others;
unless it should appear that the vendee
would not have purchased the sound animal
or animals without the defective one.

The latter case shall be presumed when a

team, yoke pair, or set is bought, even if a
separate price has been fixed for each one of
the animals composing the same. (1491)

Art. 1573. The provisions of the preceding

article with respect to the sale of animals
shall in like manner be applicable to the sale
of other things. (1492)

Art. 1574. There is no warranty against

hidden defects of animals sold at fairs or at
public auctions, or of live stock sold as
condemned. (1493a)

Art. 1575. The sale of animals suffering

from contagious diseases shall be void.

A contract of sale of animals shall also be

void if the use or service for which they are
acquired has been stated in the contract, and
they are found to be unfit therefor. (1494a)

Art. 1576. If the hidden defect of animals,

even in case a professional inspection has
been made, should be of such a nature that
expert knowledge is not sufficient to
 330

discover it, the defect shall be considered as

redhibitory.

But if the veterinarian, through ignorance or

bad faith should fail to discover or disclose
it, he shall be liable for damages. (1495)

Art. 1577. The redhibitory action, based on

the faults or defects of animals, must be
brought within forty days from the date of
their delivery to the vendee.

This action can only be exercised with

respect to faults and defects which are
determined by law or by local customs.
(1496a)

Art. 1578. If the animal should die within

three days after its purchase, the vendor
shall be liable if the disease which cause the
death existed at the time of the contract.
(1497a)

Art. 1579. If the sale be rescinded, the

animal shall be returned in the condition in
which it was sold and delivered, the vendee
being answerable for any injury due to his
negligence, and not arising from the
redhibitory fault or defect. (1498)

Art. 1580. In the sale of animals with

redhibitory defects, the vendee shall also
enjoy the right mentioned in article 1567;
but he must make use thereof within the
same period which has been fixed for the
exercise of the redhibitory action. (1499)

Art. 1581. The form of sale of large cattle

shall be governed by special laws. (n)

CHAPTER 5
OBLIGATIONS OF THE VENDEE

Art. 1582. The vendee is bound to accept

delivery and to pay the price of the thing
sold at the time and place stipulated in the
contract.

If the time and place should not have been

stipulated, the payment must be made at the
 331

time and place of the delivery of the thing

sold. (1500a)

Art. 1583. Unless otherwise agreed, the

buyer of goods is not bound to accept
delivery thereof by installments.

Where there is a contract of sale of goods to

be delivered by stated installments, which
are to be separately paid for, and the seller
makes defective deliveries in respect of one
or more instalments, or the buyer neglects or
refuses without just cause to take delivery of
or pay for one more instalments, it depends
in each case on the terms of the contract and
the circumstances of the case, whether the
breach of contract is so material as to justify
the injured party in refusing to proceed
further and suing for damages for breach of
the entire contract, or whether the breach is
severable, giving rise to a claim for
compensation but not to a right to treat the
whole contract as broken. (n)

Art. 1584. Where goods are delivered to the

buyer, which he has not previously
examined, he is not deemed to have
accepted them unless and until he has had a
reasonable opportunity of examining them
for the purpose of ascertaining whether they
are in conformity with the contract if there is
no stipulation to the contrary.

Unless otherwise agreed, when the seller

tenders delivery of goods to the buyer, he is
bound, on request, to afford the buyer a
reasonable opportunity of examining the
goods for the purpose of ascertaining
whether they are in conformity with the
contract.

Where goods are delivered to a carrier by

the seller, in accordance with an order from
or agreement with the buyer, upon the terms
that the goods shall not be delivered by the
carrier to the buyer until he has paid the
price, whether such terms are indicated by
marking the goods with the words "collect
on delivery," or otherwise, the buyer is not
entitled to examine the goods before the
payment of the price, in the absence of
 332

agreement or usage of trade permitting such

examination. (n)

Art. 1585. The buyer is deemed to have

accepted the goods when he intimates to the
seller that he has accepted them, or when the
goods have been delivered to him, and he
does any act in relation to them which is
inconsistent with the ownership of the seller,
or when, after the lapse of a reasonable time,
he retains the goods without intimating to
the seller that he has rejected them. (n)

Art. 1586. In the absence of express or

implied agreement of the parties, acceptance
of the goods by the buyer shall not discharge
the seller from liability in damages or other
legal remedy for breach of any promise or
warranty in the contract of sale. But, if, after
acceptance of the goods, the buyer fails to
give notice to the seller of the breach in any
promise of warranty within a reasonable
time after the buyer knows, or ought to
know of such breach, the seller shall not be
liable therefor. (n)

Art. 1587. Unless otherwise agreed, where

goods are delivered to the buyer, and he
refuses to accept them, having the right so to
do, he is not bound to return them to the
seller, but it is sufficient if he notifies the
seller that he refuses to accept them. If he
voluntarily constitutes himself a depositary
thereof, he shall be liable as such. (n)

Art. 1588. If there is no stipulation as

specified in the first paragraph of article
1523, when the buyer's refusal to accept the
goods is without just cause, the title thereto
passes to him from the moment they are
placed at his disposal. (n)

Art. 1589. The vendee shall owe interest for

the period between the delivery of the thing
and the payment of the price, in the
following three cases:

(1) Should it have been so stipulated;

(2) Should the thing sold and

delivered produce fruits or income;
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(3) Should he be in default, from the

time of judicial or extrajudicial
demand for the payment of the price.
(1501a)

Art. 1590. Should the vendee be disturbed in

the possession or ownership of the thing
acquired, or should he have reasonable
grounds to fear such disturbance, by a
vindicatory action or a foreclosure of
mortgage, he may suspend the payment of
the price until the vendor has caused the
disturbance or danger to cease, unless the
latter gives security for the return of the
price in a proper case, or it has been
stipulated that, notwithstanding any such
contingency, the vendee shall be bound to
make the payment. A mere act of trespass
shall not authorize the suspension of the
payment of the price. (1502a)

Art. 1591. Should the vendor have

reasonable grounds to fear the loss of
immovable property sold and its price, he
may immediately sue for the rescission of
the sale.

Should such ground not exist, the provisions

of Article 1191 shall be observed. (1503)

Art. 1592. In the sale of immovable

property, even though it may have been
stipulated that upon failure to pay the price
at the time agreed upon the rescission of the
contract shall of right take place, the vendee
may pay, even after the expiration of the
period, as long as no demand for rescission
of the contract has been made upon him
either judicially or by a notarial act. After
the demand, the court may not grant him a
new term. (1504a)

Art. 1593. With respect to movable property,

the rescission of the sale shall of right take
place in the interest of the vendor, if the
vendee, upon the expiration of the period
fixed for the delivery of the thing, should
not have appeared to receive it, or, having
appeared, he should not have tendered the
price at the same time, unless a longer
period has been stipulated for its payment.
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(1505)

CHAPTER 6
ACTIONS FOR BREACH OF CONTRACT
OF SALE OF GOODS

Art. 1594. Actions for breach of the contract

of sale of goods shall be governed
particularly by the provisions of this
Chapter, and as to matters not specifically
provided for herein, by other applicable
provisions of this Title. (n)

Art. 1595. Where, under a contract of sale,

the ownership of the goods has passed to the
buyer and he wrongfully neglects or refuses
to pay for the goods according to the terms
of the contract of sale, the seller may
maintain an action against him for the price
of the goods.

Where, under a contract of sale, the price is

payable on a certain day, irrespective of
delivery or of transfer of title and the buyer
wrongfully neglects or refuses to pay such
price, the seller may maintain an action for
the price although the ownership in the
goods has not passed. But it shall be a
defense to such an action that the seller at
any time before the judgment in such action
has manifested an inability to perform the
contract of sale on his part or an intention
not to perform it.

Although the ownership in the goods has not

passed, if they cannot readily be resold for a
reasonable price, and if the provisions of
article 1596, fourth paragraph, are not
applicable, the seller may offer to deliver the
goods to the buyer, and, if the buyer refuses
to receive them, may notify the buyer that
the goods are thereafter held by the seller as
bailee for the buyer. Thereafter the seller
may treat the goods as the buyer's and may
maintain an action for the price. (n)

Art. 1596. Where the buyer wrongfully

neglects or refuses to accept and pay for the
goods, the seller may maintain an action
against him for damages for nonacceptance.
 335

The measure of damages is the estimated

loss directly and naturally resulting in the
ordinary course of events from the buyer's
breach of contract.

Where there is an available market for the

goods in question, the measure of damages
is, in the absence of special circumstances
showing proximate damage of a different
amount, the difference between the contract
price and the market or current price at the
time or times when the goods ought to have
been accepted, or, if no time was fixed for
acceptance, then at the time of the refusal to
accept.

If, while labor or expense of material

amount is necessary on the part of the seller
to enable him to fulfill his obligations under
the contract of sale, the buyer repudiates the
contract or notifies the seller to proceed no
further therewith, the buyer shall be liable to
the seller for labor performed or expenses
made before receiving notice of the buyer's
repudiation or countermand. The profit the
seller would have made if the contract or the
sale had been fully performed shall be
considered in awarding the damages. (n)

Art. 1597. Where the goods have not been

delivered to the buyer, and the buyer has
repudiated the contract of sale, or has
manifested his inability to perform his
obligations thereunder, or has committed a
breach thereof, the seller may totally rescind
the contract of sale by giving notice of his
election so to do to the buyer. (n)

Art. 1598. Where the seller has broken a

contract to deliver specific or ascertained
goods, a court may, on the application of the
buyer, direct that the contract shall be
performed specifically, without giving the
seller the option of retaining the goods on
payment of damages. The judgment or
decree may be unconditional, or upon such
terms and conditions as to damages,
payment of the price and otherwise, as the
court may deem just. (n)
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Art. 1599. Where there is a breach of

warranty by the seller, the buyer may, at his
election:

(1) Accept or keep the goods and set

up against the seller, the breach of
warranty by way of recoupment in
diminution or extinction of the price;

(2) Accept or keep the goods and

maintain an action against the seller
for damages for the breach of
warranty;

(3) Refuse to accept the goods, and

maintain an action against the seller
for damages for the breach of
warranty;

(4) Rescind the contract of sale and

refuse to receive the goods or if the
goods have already been received,
return them or offer to return them to
the seller and recover the price or any
part thereof which has been paid.

When the buyer has claimed and been

granted a remedy in anyone of these
ways, no other remedy can thereafter
be granted, without prejudice to the
provisions of the second paragraph of
Article 1191.

Where the goods have been delivered

to the buyer, he cannot rescind the
sale if he knew of the breach of
warranty when he accepted the goods
without protest, or if he fails to notify
the seller within a reasonable time of
the election to rescind, or if he fails to
return or to offer to return the goods
to the seller in substantially as good
condition as they were in at the time
the ownership was transferred to the
buyer. But if deterioration or injury of
the goods is due to the breach or
warranty, such deterioration or injury
shall not prevent the buyer from
returning or offering to return the
goods to the seller and rescinding the
sale.
 337

Where the buyer is entitled to rescind

the sale and elects to do so, he shall
cease to be liable for the price upon
returning or offering to return the
goods. If the price or any part thereof
has already been paid, the seller shall
be liable to repay so much thereof as
has been paid, concurrently with the
return of the goods, or immediately
after an offer to return the goods in
exchange for repayment of the price.

Where the buyer is entitled to rescind

the sale and elects to do so, if the
seller refuses to accept an offer of the
buyer to return the goods, the buyer
shall thereafter be deemed to hold the
goods as bailee for the seller, but
subject to a lien to secure payment of
any portion of the price which has
been paid, and with the remedies for
the enforcement of such lien allowed
to an unpaid seller by Article 1526.

(5) In the case of breach of warranty

of quality, such loss, in the absence of
special circumstances showing
proximate damage of a greater
amount, is the difference between the
value of the goods at the time of
delivery to the buyer and the value
they would have had if they had
answered to the warranty. (n)

CHAPTER 7
EXTINGUISHMENT OF SALE

Art. 1600. Sales are extinguished by the

same causes as all other obligations, by
those stated in the preceding articles of this
Title, and by conventional or legal
redemption. (1506)

SECTION 1. - Conventional Redemption

Art. 1601. Conventional redemption shall

take place when the vendor reserves the
right to repurchase the thing sold, with the
obligation to comply with the provisions of
 338

Article 1616 and other stipulations which

may have been agreed upon. (1507)

Art. 1602. The contract shall be presumed to

be an equitable mortgage, in any of the
following cases:

(1) When the price of a sale with right

to repurchase is unusually inadequate;

(2) When the vendor remains in

possession as lessee or otherwise;

(3) When upon or after the expiration

of the right to repurchase another
instrument extending the period of
redemption or granting a new period
is executed;

(4) When the purchaser retains for

himself a part of the purchase price;

(5) When the vendor binds himself to

pay the taxes on the thing sold;

(6) In any other case where it may be

fairly inferred that the real intention
of the parties is that the transaction
shall secure the payment of a debt or
the performance of any other
obligation.

In any of the foregoing cases, any money,

fruits, or other benefit to be received by the
vendee as rent or otherwise shall be
considered as interest which shall be subject
to the usury laws. (n)

Art. 1603. In case of doubt, a contract

purporting to be a sale with right to
repurchase shall be construed as an equitable
mortgage. (n)

Art. 1604. The provisions of Article 1602

shall also apply to a contract purporting to
be an absolute sale. (n)

Art. 1605. In the cases referred to in Articles

1602 and 1604, the apparent vendor may ask
for the reformation of the instrument. (n)
 339

Art. 1606. The right referred to in Article

1601, in the absence of an express
agreement, shall last four years from the
date of the contract.

Should there be an agreement, the period

cannot exceed ten years.

However, the vendor may still exercise the

right to repurchase within thirty days from
the time final judgment was rendered in a
civil action on the basis that the contract was
a true sale with right to repurchase. (1508a)

Art. 1607. In case of real property, the

consolidation of ownership in the vendee by
virtue of the failure of the vendor to comply
with the provisions of article 1616 shall not
be recorded in the Registry of Property
without a judicial order, after the vendor has
been duly heard. (n)

Art. 1608. The vendor may bring his action

against every possessor whose right is
derived from the vendee, even if in the
second contract no mention should have
been made of the right to repurchase,
without prejudice to the provisions of the
Mortgage Law and the Land Registration
Law with respect to third persons. (1510)

Art. 1609. The vendee is subrogated to the

vendor's rights and actions. (1511)

Art. 1610. The creditors of the vendor

cannot make use of the right of redemption
against the vendee, until after they have
exhausted the property of the vendor. (1512)

Art. 1611. In a sale with a right to

repurchase, the vendee of a part of an
undivided immovable who acquires the
whole thereof in the case of article 498, may
compel the vendor to redeem the whole
property, if the latter wishes to make use of
the right of redemption. (1513)

Art. 1612. If several persons, jointly and in

the same contract, should sell an undivided
immovable with a right of repurchase, none
of them may exercise this right for more
than his respective share.
 340

The same rule shall apply if the person who

sold an immovable alone has left several
heirs, in which case each of the latter may
only redeem the part which he may have
acquired. (1514)

Art. 1613. In the case of the preceding

article, the vendee may demand of all the
vendors or co-heirs that they come to an
agreement upon the purchase of the whole
thing sold; and should they fail to do so, the
vendee cannot be compelled to consent to a
partial redemption. (1515)

Art. 1614. Each one of the co-owners of an

undivided immovable who may have sold
his share separately, may independently
exercise the right of repurchase as regards
his own share, and the vendee cannot
compel him to redeem the whole property.
(1516)

Art. 1615. If the vendee should leave several

heirs, the action for redemption cannot be
brought against each of them except for his
own share, whether the thing be undivided,
or it has been partitioned among them.

But if the inheritance has been divided, and

the thing sold has been awarded to one of
the heirs, the action for redemption may be
instituted against him for the whole. (1517)

Art. 1616. The vendor cannot avail himself

of the right of repurchase without returning
to the vendee the price of the sale, and in
addition:

(1) The expenses of the contract, and

any other legitimate payments made
by reason of the sale;

(2) The necessary and useful expenses

made on the thing sold. (1518)

Art. 1617. If at the time of the execution of

the sale there should be on the land, visible
or growing fruits, there shall be no
reimbursement for or prorating of those
existing at the time of redemption, if no
indemnity was paid by the purchaser when
the sale was executed.
 341

Should there have been no fruits at the time

of the sale and some exist at the time of
redemption, they shall be prorated between
the redemptioner and the vendee, giving the
latter the part corresponding to the time he
possessed the land in the last year, counted
from the anniversary of the date of the sale.
(1519a)

Art. 1618. The vendor who recovers the

thing sold shall receive it free from all
charges or mortgages constituted by the
vendee, but he shall respect the leases which
the latter may have executed in good faith,
and in accordance with the custom of the
place where the land is situated. (1520)

SECTION 2. - Legal Redemption

Art. 1619. Legal redemption is the right to

be subrogated, upon the same terms and
conditions stipulated in the contract, in the
place of one who acquires a thing by
purchase or dation in payment, or by any
other transaction whereby ownership is
transmitted by onerous title. (1521a)

Art. 1620. A co-owner of a thing may

exercise the right of redemption in case the
shares of all the other co-owners or of any of
them, are sold to a third person. If the price
of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable
one.

Should two or more co-owners desire to

exercise the right of redemption, they may
only do so in proportion to the share they
may respectively have in the thing owned in
common. (1522a)

Art. 1621. The owners of adjoining lands

shall also have the right of redemption when
a piece of rural land, the area of which does
not exceed one hectare, is alienated, unless
the grantee does not own any rural land.

This right is not applicable to adjacent lands

which are separated by brooks, drains,
 342

ravines, roads and other apparent servitudes

for the benefit of other estates.

If two or more adjoining owners desire to

exercise the right of redemption at the same
time, the owner of the adjoining land of
smaller area shall be preferred; and should
both lands have the same area, the one who
first requested the redemption. (1523a)

Art. 1622. Whenever a piece of urban land

which is so small and so situated that a
major portion thereof cannot be used for any
practical purpose within a reasonable time,
having been bought merely for speculation,
is about to be re-sold, the owner of any
adjoining land has a right of pre-emption at
a reasonable price.

If the re-sale has been perfected, the owner

of the adjoining land shall have a right of
redemption, also at a reasonable price.

When two or more owners of adjoining

lands wish to exercise the right of

pre-emption or redemption, the owner

whose intended use of the land in question
appears best justified shall be preferred. (n)

Art. 1623. The right of legal pre-emption or

redemption shall not be exercised except
within thirty days from the notice in writing
by the prospective vendor, or by the vendor,
as the case may be. The deed of sale shall
not be recorded in the Registry of Property,
unless accompanied by an affidavit of the
vendor that he has given written notice
thereof to all possible redemptioners.

The right of redemption of co-owners

excludes that of adjoining owners. (1524a)

CHAPTER 8
ASSIGNMENT OF CREDITS AND
OTHER INCORPOREAL RIGHTS

Art. 1624. An assignment of creditors and

other incorporeal rights shall be perfected in
accordance with the provisions of Article
1475. (n)
 343

Art. 1625. An assignment of a credit, right

or action shall produce no effect as against
third person, unless it appears in a public
instrument, or the instrument is recorded in
the Registry of Property in case the
assignment involves real property. (1526)

Art. 1626. The debtor who, before having

knowledge of the assignment, pays his
creditor shall be released from the
obligation. (1527)

Art. 1627. The assignment of a credit

includes all the accessory rights, such as a
guaranty, mortgage, pledge or preference.
(1528)

Art. 1628. The vendor in good faith shall be

responsible for the existence and legality of
the credit at the time of the sale, unless it
should have been sold as doubtful; but not
for the solvency of the debtor, unless it has
been so expressly stipulated or unless the
insolvency was prior to the sale and of
common knowledge.

Even in these cases he shall only be liable

for the price received and for the expenses
specified in No. 1 of Article 1616.

The vendor in bad faith shall always be

answerable for the payment of all expenses,
and for damages. (1529)

Art. 1629. In case the assignor in good faith

should have made himself responsible for
the solvency of the debtor, and the
contracting parties should not have agreed
upon the duration of the liability, it shall last
for one year only, from the time of the
assignment if the period had already
expired.

If the credit should be payable within a term

or period which has not yet expired, the
liability shall cease one year after the
maturity. (1530a)

Art. 1630. One who sells an inheritance

without enumerating the things of which it is
composed, shall only be answerable for his
character as an heir. (1531)
 344

Art. 1631. One who sells for a lump sum the

whole of certain rights, rents, or products,
shall comply by answering for the
legitimacy of the whole in general; but he
shall not be obliged to warrant each of the
various parts of which it may be composed,
except in the case of eviction from the whole
or the part of greater value. (1532a)

Art. 1632. Should the vendor have profited

by some of the fruits or received anything
from the inheritance sold, he shall pay the
vendee thereof, if the contrary has not been
stipulated. (1533)

Art. 1633. The vendee shall, on his part,

reimburse the vendor for all that the latter
may have paid for the debts of and charges
on the estate and satisfy the credits he may
have against the same, unless there is an
agreement to the contrary. (1534)

Art. 1634. When a credit or other

incorporeal right in litigation is sold, the
debtor shall have a right to extinguish it by
reimbursing the assignee for the price the
latter paid therefor, the judicial costs
incurred by him, and the interest on the price
from the day on which the same was paid.

A credit or other incorporeal right shall be

considered in litigation from the time the
complaint concerning the same is answered.

The debtor may exercise his right within

thirty days from the date the assignee
demands payment from him. (1535)

Art. 1635. From the provisions of the

preceding article shall be excepted the
assignments or sales made:

(1) To a co-heir or co-owner of the

right assigned;

(2) To a creditor in payment of his

credit;

(3) To the possessor of a tenement or

piece of land which is subject to the
right in litigation assigned. (1536)
 345

CHAPTER 9
GENERAL PROVISIONS

Art. 1636. In the preceding articles in this

Title governing the sale of goods, unless the
context or subject matter otherwise requires:
(1) "Document of title to goods"
includes any bill of lading, dock
warrant, "quedan," or warehouse
receipt or order for the delivery of
goods, or any other document used in
the ordinary course of business in the
sale or transfer of goods, as proof of
the possession or control of the goods,
or authorizing or purporting to
authorize the possessor of the
document to transfer or receive, either
by endorsement or by delivery, goods
represented by such document.

"Goods" includes all chattels personal

but not things in action or money of
legal tender in the Philippines. The
term includes growing fruits or crops.

"Order" relating to documents of title

means an order by endorsement on
the documents.

"Quality of goods" includes their state

or condition.

"Specific goods" means goods

identified and agreed upon at the time
a contract of sale is made.

An antecedent or pre-existing claim,

whether for money or not, constitutes
"value" where goods or documents of
title are taken either in satisfaction
thereof or as security therefor.

(2) A person is insolvent within the

meaning of this Title who either has
ceased to pay his debts in the ordinary
course of business or cannot pay his
debts as they become due, whether
insolvency proceedings have been
commenced or not.
 346

(3) Goods are in a "deliverable state"

within the meaning of this Title when
they are in such a state that the buyer
would, under the contract, be bound
to take delivery of them. (n)

Art. 1637. The provisions of this Title are

subject to the rules laid down by the
Mortgage Law and the Land Registration
Law with regard to immovable property.
(1537a)

Title VII. - BARTER OR EXCHANGE

Art. 1638. By the contract of barter or

exchange one of the parties binds himself to
give one thing in consideration of the other's
promise to give another thing. (1538a)

Art. 1639. If one of the contracting parties,

having received the thing promised him in
barter, should prove that it did not belong to
the person who gave it, he cannot be
compelled to deliver that which he offered
in exchange, but he shall be entitled to
damages. (1539a)

Art. 1640. One who loses by eviction the

thing received in barter may recover that
which he gave in exchange with a right to
damages, or he may only demand an
indemnity for damages. However, he can
only make use of the right to recover the
thing which he has delivered while the same
remains in the possession of the other party,
and without prejudice to the rights acquired
in good faith in the meantime by a third
person. (1540a)

Art. 1641. As to all matters not specifically

provided for in this Title, barter shall be
governed by the provisions of the preceding
Title relating to sales. (1541a)

Title VIII. - LEASE

CHAPTER 1
GENERAL PROVISIONS
 347

Art. 1642. The contract of lease may be of

things, or of work and service. (1542)

Art. 1643. In the lease of things, one of the

parties binds himself to give to another the
enjoyment or use of a thing for a price
certain, and for a period which may be
definite or indefinite. However, no lease for
more than ninety-nine years shall be valid.
(1543a)

Art. 1644. In the lease of work or service,

one of the parties binds himself to execute a
piece of work or to render to the other some
service for a price certain, but the relation of
principal and agent does not exist between
them. (1544a)

Art. 1645. Consumable goods cannot be the

subject matter of a contract of lease, except
when they are merely to be exhibited or
when they are accessory to an industrial
establishment. (1545a)

CHAPTER 2
LEASE OF RURAL AND URBAN LANDS

SECTION 1. - General Provisions

Art. 1646. The persons disqualified to buy

referred to in Articles 1490 and 1491, are
also disqualified to become lessees of the
things mentioned therein. (n)

Art. 1647. If a lease is to be recorded in the

Registry of Property, the following persons
cannot constitute the same without proper
authority: the husband with respect to the
wife's paraphernal real estate, the father or
guardian as to the property of the minor or
ward, and the manager without special
power. (1548a)

Art. 1648. Every lease of real estate may be

recorded in the Registry of Property. Unless
a lease is recorded, it shall not be binding
upon third persons. (1549a)
 348

Art. 1649. The lessee cannot assign the lease

without the consent of the lessor, unless
there is a stipulation to the contrary. (n)

Art. 1650. When in the contract of lease of

things there is no express prohibition, the
lessee may sublet the thing leased, in whole
or in part, without prejudice to his
responsibility for the performance of the
contract toward the lessor. (1550)

Art. 1651. Without prejudice to his

obligation toward the sublessor, the
sublessee is bound to the lessor for all acts
which refer to the use and preservation of
the thing leased in the manner stipulated
between the lessor and the lessee. (1551)

Art. 1652. The sublessee is subsidiarily

liable to the lessor for any rent due from the
lessee. However, the sublessee shall not be
responsible beyond the amount of rent due
from him, in accordance with the terms of
the sublease, at the time of the extrajudicial
demand by the lessor.

Payments of rent in advance by the

sublessee shall be deemed not to have been
made, so far as the lessor's claim is
concerned, unless said payments were
effected in virtue of the custom of the place.
(1552a)

Art. 1653. The provisions governing

warranty, contained in the Title on Sales,
shall be applicable to the contract of lease.

In the cases where the return of the price is

required, reduction shall be made in
proportion to the time during which the
lessee enjoyed the thing. (1553)

SECTION 2. - Rights and Obligations of the

Lessor and the Lessee

Art. 1654. The lessor is obliged:

(1) To deliver the thing which is the

object of the contract in such a
condition as to render it fit for the use
intended;
 349

(2) To make on the same during the

lease all the necessary repairs in order
to keep it suitable for the use to which
it has been devoted, unless there is a
stipulation to the contrary;

(3) To maintain the lessee in the

peaceful and adequate enjoyment of
the lease for the entire duration of the
contract. (1554a)

Art. 1655. If the thing leased is totally

destroyed by a fortuitous event, the lease is
extinguished. If the destruction is partial, the
lessee may choose between a proportional
reduction of the rent and a rescission of the
lease. (n)

Art. 1656. The lessor of a business or

industrial establishment may continue
engaging in the same business or industry to
which the lessee devotes the thing leased,
unless there is a stipulation to the contrary.
(n)

Art. 1657. The lessee is obliged:

(1) To pay the price of the lease

according to the terms stipulated;

(2) To use the thing leased as a

diligent father of a family, devoting it
to the use stipulated; and in the
absence of stipulation, to that which
may be inferred from the nature of the
thing leased, according to the custom
of the place;

(3) To pay expenses for the deed of

lease. (1555)

Art. 1658. The lessee may suspend the

payment of the rent in case the lessor fails to
make the necessary repairs or to maintain
the lessee in peaceful and adequate
enjoyment of the property leased. (n)

Art. 1659. If the lessor or the lessee should

not comply with the obligations set forth in
Articles 1654 and 1657, the aggrieved party
may ask for the rescission of the contract
and indemnification for damages, or only
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the latter, allowing the contract to remain in

force. (1556)

Art. 1660. If a dwelling place or any other

building intended for human habitation is in
such a condition that its use brings imminent
and serious danger to life or health, the
lessee may terminate the lease at once by
notifying the lessor, even if at the time the
contract was perfected the former knew of
the dangerous condition or waived the right
to rescind the lease on account of this
condition. (n)

Art. 1661. The lessor cannot alter the form

of the thing leased in such a way as to
impair the use to which the thing is devoted
under the terms of the lease. (1557a)

Art. 1662. If during the lease it should

become necessary to make some urgent
repairs upon the thing leased, which cannot
be deferred until the termination of the lease,
the lessee is obliged to tolerate the work,
although it may be very annoying to him,
and although during the same, he may be
deprived of a part of the premises.

If the repairs last more than forty days the

rent shall be reduced in proportion to the
time - including the first forty days - and the
part of the property of which the lessee has
been deprived.

When the work is of such a nature that the

portion which the lessee and his family need
for their dwelling becomes uninhabitable, he
may rescind the contract if the main purpose
of the lease is to provide a dwelling place
for the lessee. (1558a)

Art. 1663. The lessee is obliged to bring to

the knowledge of the proprietor, within the
shortest possible time, every usurpation or
untoward act which any third person may
have committed or may be openly preparing
to carry out upon the thing leased.

He is also obliged to advise the owner, with

the same urgency, of the need of all repairs
included in No. 2 of Article 1654.
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In both cases the lessee shall be liable for

the damages which, through his negligence,
may be suffered by the proprietor.

If the lessor fails to make urgent repairs, the

lessee, in order to avoid an imminent danger,
may order the repairs at the lessor's cost.
(1559a)

Art. 1664. The lessor is not obliged to

answer for a mere act of trespass which a
third person may cause on the use of the
thing leased; but the lessee shall have a
direct action against the intruder.

There is a mere act of trespass when the

third person claims no right whatever.
(1560a)

Art. 1665. The lessee shall return the thing

leased, upon the termination of the lease, as
he received it, save what has been lost or
impaired by the lapse of time, or by ordinary
wear and tear, or from an inevitable cause.
(1561a)

Art. 1666. In the absence of a statement

concerning the condition of the thing at the
time the lease was constituted, the law
presumes that the lessee received it in good
condition, unless there is proof to the
contrary. (1562)

Art. 1667. The lessee is responsible for the

deterioration or loss of the thing leased,
unless he proves that it took place without
his fault. This burden of proof on the lessee
does not apply when the destruction is due
to earthquake, flood, storm or other natural
calamity. (1563a)

Art. 1668. The lessee is liable for any

deterioration caused by members of his
household and by guests and visitors.
(1564a)

Art. 1669. If the lease was made for a

determinate time, it ceases upon the day
fixed, without the need of a demand. (1565)

Art. 1670. If at the end of the contract the

lessee should continue enjoying the thing
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leased for fifteen days with the acquiescence

of the lessor, and unless a notice to the
contrary by either party has previously been
given, it is understood that there is an
implied new lease, not for the period of the
original contract, but for the time established
in Articles 1682 and 1687. The other terms
of the original contract shall be revived.
(1566a)

Art. 1671. If the lessee continues enjoying

the thing after the expiration of the contract,
over the lessor's objection, the former shall
be subject to the responsibilities of a
possessor in bad faith. (n)

Art. 1672. In case of an implied new lease,

the obligations contracted by a third person
for the security of the principal contract
shall cease with respect to the new lease.
(1567)

Art. 1673. The lessor may judicially eject

the lessee for any of the following causes:

(1) When the period agreed upon, or

that which is fixed for the duration of
leases under Articles 1682 and 1687,
has expired;

(2) Lack of payment of the price

stipulated;

(3) Violation of any of the conditions

agreed upon in the contract;

(4) When the lessee devotes the thing

leased to any use or service not
stipulated which causes the
deterioration thereof; or if he does not
observe the requirement in No. 2 of
Article 1657, as regards the use
thereof.

The ejectment of tenants of agricultural

lands is governed by special laws. (1569a)

Art. 1674. In ejectment cases where an

appeal is taken the remedy granted in Article
539, second paragraph, shall also apply, if
the higher court is satisfied that the lessee's
appeal is frivolous or dilatory, or that the
 353

lessor's appeal is prima facie meritorious.

The period of ten days referred to in said
article shall be counted from the time the
appeal is perfected. (n)

Art. 1675. Except in cases stated in Article

1673, the lessee shall have a right to make
use of the periods established in Articles
1682 and 1687. (1570)

Art. 1676. The purchaser of a piece of land

which is under a lease that is not recorded in
the Registry of Property may terminate the
lease, save when there is a stipulation to the
contrary in the contract of sale, or when the
purchaser knows of the existence of the
lease.

If the buyer makes use of this right, the

lessee may demand that he be allowed to
gather the fruits of the harvest which
corresponds to the current agricultural year
and that the vendor indemnify him for
damages suffered.

If the sale is fictitious, for the purpose of

extinguishing the lease, the supposed vendee
cannot make use of the right granted in the
first paragraph of this article. The sale is
presumed to be fictitious if at the time the
supposed vendee demands the termination
of the lease, the sale is not recorded in the
Registry of Property. (1571a)

Art. 1677. The purchaser in a sale with the

right of redemption cannot make use of the
power to eject the lessee until the end of the
period for the redemption. (1572)

Art. 1678. If the lessee makes, in good faith,

useful improvements which are suitable to
the use for which the lease is intended,
without altering the form or substance of the
property leased, the lessor upon the
termination of the lease shall pay the lessee
one-half of the value of the improvements at
that time. Should the lessor refuse to
reimburse said amount, the lessee may
remove the improvements, even though the
principal thing may suffer damage thereby.
He shall not, however, cause any more
 354

impairment upon the property leased than is

necessary.

With regard to ornamental expenses, the

lessee shall not be entitled to any
reimbursement, but he may remove the
ornamental objects, provided no damage is
caused to the principal thing, and the lessor
does not choose to retain them by paying
their value at the time the lease is
extinguished. (n)

Art. 1679. If nothing has been stipulated

concerning the place and the time for the
payment of the lease, the provisions or
Article 1251 shall be observed as regards the
place; and with respect to the time, the
custom of the place shall be followed.
(1574)

SECTION 3. - Special Provisions for Leases

of Rural Lands

Art. 1680. The lessee shall have no right to a

reduction of the rent on account of the
sterility of the land leased, or by reason of
the loss of fruits due to ordinary fortuitous
events; but he shall have such right in case
of the loss of more than one-half of the fruits
through extraordinary and unforeseen
fortuitous events, save always when there is
a specific stipulation to the contrary.

Extraordinary fortuitous events are

understood to be: fire, war, pestilence,
unusual flood, locusts, earthquake, or others
which are uncommon, and which the
contracting parties could not have
reasonably foreseen. (1575)

Art. 1681. Neither does the lessee have any

right to a reduction of the rent if the fruits
are lost after they have been separated from
their stalk, root or trunk. (1576)

Art. 1682. The lease of a piece of rural land,

when its duration has not been fixed, is
understood to have been for all the time
necessary for the gathering of the fruits
which the whole estate leased may yield in
 355

one year, or which it may yield once,

although two or more years have to elapse
for the purpose. (1577a)

Art. 1683. The outgoing lessee shall allow

the incoming lessee or the lessor the use of
the premises and other means necessary for
the preparatory labor for the following year;
and, reciprocally, the incoming lessee or the
lessor is under obligation to permit the
outgoing lessee to do whatever may be
necessary for the gathering or harvesting and
utilization of the fruits, all in accordance
with the custom of the place. (1578a)

Art. 1684. Land tenancy on shares shall be

governed by special laws, the stipulations of
the parties, the provisions on partnership and
by the customs of the place. (1579a)

Art. 1685. The tenant on shares cannot be

ejected except in cases specified by law. (n)

SECTION 4. - Special Provisions of the

Lease of Urban Lands

Art. 1686. In default of a special stipulation,

the custom of the place shall be observed
with regard to the kind of repairs on urban
property for which the lessor shall be liable.
In case of doubt it is understood that the
repairs are chargeable against him. (1580a)

Art. 1687. If the period for the lease has not

been fixed, it is understood to be from year
to year, if the rent agreed upon is annual;
from month to month, if it is monthly; from
week to week, if the rent is weekly; and
from day to day, if the rent is to be paid
daily. However, even though a monthly rent
is paid, and no period for the lease has been
set, the courts may fix a longer term for the
lease after the lessee has occupied the
premises for over one year. If the rent is
weekly, the courts may likewise determine a
longer period after the lessee has been in
possession for over six months. In case of
daily rent, the courts may also fix a longer
period after the lessee has stayed in the place
for over one month. (1581a)
 356

Art. 1688. When the lessor of a house, or

part thereof, used as a dwelling for a family,
or when the lessor of a store, or industrial
establishment, also leases the furniture, the
lease of the latter shall be deemed to be for
the duration of the lease of the premises.
(1582)

CHAPTER 3
WORK AND LABOR

SECTION 1. - Household Service (n)

Art. 1689. Household service shall always

be reasonably compensated. Any stipulation
that household service is without
compensation shall be void. Such
compensation shall be in addition to the
house helper's lodging, food, and medical
attendance.

Art. 1690. The head of the family shall

furnish, free of charge, to the house helper,
suitable and sanitary quarters as well as
adequate food and medical attendance.

Art. 1691. If the house helper is under the

age of eighteen years, the head of the family
shall give an opportunity to the house helper
for at least elementary education. The cost
of such education shall be a part of the
house helper's compensation, unless there is
a stipulation to the contrary.

Art. 1692. No contract for household service

shall last for more than two years. However,
such contract may be renewed from year to
year.

Art. 1693. The house helper's clothes shall

be subject to stipulation. However, any
contract for household service shall be void
if thereby the house helper cannot afford to
acquire suitable clothing.

Art. 1694. The head of the family shall treat

the house helper in a just and humane
manner. In no case shall physical violence
be used upon the house helper.
 357

Art. 1695. House helper shall not be

required to work more than ten hours a day.
Every house helper shall be allowed four
days' vacation each month, with pay.

Art. 1696. In case of death of the house

helper, the head of the family shall bear the
funeral expenses if the house helper has no
relatives in the place where the head of the
family lives, with sufficient means therefor.

Art. 1697. If the period for household

service is fixed neither the head of the
family nor the house helper may terminate
the contract before the expiration of the
term, except for a just cause. If the house
helper is unjustly dismissed, he shall be paid
the compensation already earned plus that
for fifteen days by way of indemnity. If the
house helper leaves without justifiable
reason, he shall forfeit any salary due him
and unpaid, for not exceeding fifteen days.

Art. 1698. If the duration of the household

service is not determined either by
stipulation or by the nature of the service,
the head of the family or the house helper
may give notice to put an end to the service
relation, according to the following rules:

(1) If the compensation is paid by the

day, notice may be given on any day
that the service shall end at the close
of the following day;

(2) If the compensation is paid by the

week, notice may be given, at the
latest on the first business day of the
week, that the service shall be
terminated at the end of the seventh
day from the beginning of the week;

(3) If the compensation is paid by the

month, notice may be given, at the
latest, on the fifth day of the month,
that the service shall cease at the end
of the month.

Art. 1699. Upon the extinguishment of the

service relation, the house helper may
demand from the head of the family a
 358

written statement on the nature and duration

of the service and the efficiency and conduct
of the house helper.

SECTION 2. - Contract of Labor (n)

Art. 1700. The relations between capital and

labor are not merely contractual. They are so
impressed with public interest that labor
contracts must yield to the common good.
Therefore, such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of
labor and similar subjects.

Art. 1701. Neither capital nor labor shall act

oppressively against the other, or impair the
interest or convenience of the public.

Art. 1702. In case of doubt, all labor

legislation and all labor contracts shall be
construed in favor of the safety and decent
living for the laborer.

Art. 1703. No contract which practically

amounts to involuntary servitude, under any
guise whatsoever, shall be valid.

Art. 1704. In collective bargaining, the labor

union or members of the board or committee
signing the contract shall be liable for non-
fulfillment thereof.

Art. 1705. The laborer's wages shall be paid

in legal currency.

Art. 1706. Withholding of the wages, except

for a debt due, shall not be made by the
employer.

Art. 1707. The laborer's wages shall be a

lien on the goods manufactured or the work
done.

Art. 1708. The laborer's wages shall not be

subject to execution or attachment, except
for debts incurred for food, shelter, clothing
and medical attendance.
 359

Art. 1709. The employer shall neither seize

nor retain any tool or other articles
belonging to the laborer.

Art. 1710. Dismissal of laborers shall be

subject to the supervision of the
Government, under special laws.

Art. 1711. Owners of enterprises and other

employers are obliged to pay compensation
for the death of or injuries to their laborers,
workmen, mechanics or other employees,
even though the event may have been purely
accidental or entirely due to a fortuitous
cause, if the death or personal injury arose
out of and in the course of the employment.
The employer is also liable for
compensation if the employee contracts any
illness or disease caused by such
employment or as the result of the nature of
the employment. If the mishap was due to
the employee's own notorious negligence, or
voluntary act, or drunkenness, the employer
shall not be liable for compensation. When
the employee's lack of due care contributed
to his death or injury, the compensation shall
be equitably reduced.

Art. 1712. If the death or injury is due to the

negligence of a fellow worker, the latter and
the employer shall be solidarily liable for
compensation. If a fellow worker's
intentional malicious act is the only cause of
the death or injury, the employer shall not be
answerable, unless it should be shown that
the latter did not exercise due diligence in
the selection or supervision of the plaintiff's
fellow worker.

SECTION 3. - Contract for a Piece of Work

Art. 1713. By the contract for a piece of

work the contractor binds himself to execute
a piece of work for the employer, in
consideration of a certain price or
compensation. The contractor may either
employ only his labor or skill, or also
furnish the material. (1588a)
 360

Art. 1714. If the contractor agrees to

produce the work from material furnished by
him, he shall deliver the thing produced to
the employer and transfer dominion over the
thing. This contract shall be governed by the
following articles as well as by the pertinent
provisions on warranty of title and against
hidden defects and the payment of price in a
contract of sale. (n)

Art. 1715. The contract shall execute the

work in such a manner that it has the
qualities agreed upon and has no defects
which destroy or lessen its value or fitness
for its ordinary or stipulated use. Should the
work be not of such quality, the employer
may require that the contractor remove the
defect or execute another work. If the
contract fails or refuses to comply with this
obligation, the employer may have the
defect removed or another work executed, at
the contractor's cost. (n)

Art. 1716. An agreement waiving or limiting

the contractor's liability for any defect in the
work is void if the contractor acted
fraudulently. (n)

Art. 1717. If the contractor bound himself to

furnish the material, he shall suffer the loss
if the work should be destroyed before its
delivery, save when there has been delay in
receiving it. (1589)

Art. 1718. The contractor who has

undertaken to put only his work or skill,
cannot claim any compensation if the work
should be destroyed before its delivery,
unless there has been delay in receiving it,
or if the destruction was caused by the poor
quality of the material, provided this fact
was communicated in due time to the owner.
If the material is lost through a fortuitous
event, the contract is extinguished. (1590a)

Art. 1719. Acceptance of the work by the

employer relieves the contractor of liability
for any defect in the work, unless:

(1) The defect is hidden and the

employer is not, by his special
 361

knowledge, expected to recognize the

same; or

(2) The employer expressly reserves

his rights against the contractor by
reason of the defect. (n)

Art. 1720. The price or compensation shall

be paid at the time and place of delivery of
the work, unless there is a stipulation to the
contrary. If the work is to be delivered
partially, the price or compensation for each
part having been fixed, the sum shall be paid
at the time and place of delivery, in the
absence if stipulation. (n)

Art. 1721. If, in the execution of the work,

an act of the employer is required, and he
incurs in delay or fails to perform the act,
the contractor is entitled to a reasonable
compensation.

The amount of the compensation is

computed, on the one hand, by the duration
of the delay and the amount of the
compensation stipulated, and on the other
hand, by what the contractor has saved in
expenses by reason of the delay or is able to
earn by a different employment of his time
and industry. (n)

Art. 1722. If the work cannot be completed

on account of a defect in the material
furnished by the employer, or because of
orders from the employer, without any fault
on the part of the contractor, the latter has a
right to an equitable part of the
compensation proportionally to the work
done, and reimbursement for proper
expenses made. (n)

Art. 1723. The engineer or architect who

drew up the plans and specifications for a
building is liable for damages if within
fifteen years from the completion of the
structure, the same should collapse by
reason of a defect in those plans and
specifications, or due to the defects in the
ground. The contractor is likewise
responsible for the damages if the edifice
falls, within the same period, on account of
 362

defects in the construction or the use of

materials of inferior quality furnished by
him, or due to any violation of the terms of
the contract. If the engineer or architect
supervises the construction, he shall be
solidarily liable with the contractor.

Acceptance of the building, after

completion, does not imply waiver of any of
the cause of action by reason of any defect
mentioned in the preceding paragraph.

The action must be brought within ten years

following the collapse of the building. (n)

Art. 1724. The contractor who undertakes to

build a structure or any other work for a
stipulated price, in conformity with plans
and specifications agreed upon with the
land-owner, can neither withdraw from the
contract nor demand an increase in the price
on account of the higher cost of labor or
materials, save when there has been a
change in the plans and specifications,
provided:

(1) Such change has been authorized

by the proprietor in writing; and

(2) The additional price to be paid to

the contractor has been determined in
writing by both parties. (1593a)

Art. 1725. The owner may withdraw at will

from the construction of the work, although
it may have been commenced, indemnifying
the contractor for all the latter's expenses,
work, and the usefulness which the owner
may obtain therefrom, and damages. (1594a)

Art. 1726. When a piece of work has been

entrusted to a person by reason of his
personal qualifications, the contract is
rescinded upon his death.

In this case the proprietor shall pay the heirs

of the contractor in proportion to the price
agreed upon, the value of the part of the
work done, and of the materials prepared,
provided the latter yield him some benefit.
 363

The same rule shall apply if the contractor

cannot finish the work due to circumstances
beyond his control. (1595)

Art. 1727. The contractor is responsible for

the work done by persons employed by him.
(1596)

Art. 1728. The contractor is liable for all the

claims of laborers and others employed by
him, and of third persons for death or
physical injuries during the construction. (n)

Art. 1729. Those who put their labor upon or

furnish materials for a piece of work
undertaken by the contractor have an action
against the owner up to the amount owing
from the latter to the contractor at the time
the claim is made. However, the following
shall not prejudice the laborers, employees
and furnishers of materials:

(1) Payments made by the owner to

the contractor before they are due;

(2) Renunciation by the contractor of

any amount due him from the owner.

This article is subject to the provisions of

special laws. (1597a)

Art. 1730. If it is agreed that the work shall

be accomplished to the satisfaction of the
proprietor, it is understood that in case of
disagreement the question shall be subject to
expert judgment.

If the work is subject to the approval of a

third person, his decision shall be final,
except in case of fraud or manifest error.
(1598a)

Art. 1731. He who has executed work upon

a movable has a right to retain it by way of
pledge until he is paid. (1600)

SECTION 4. - Common Carriers (n)

SUBSECTION 1. - General Provisions

Art. 1732. Common carriers are persons,

 364

corporations, firms or associations engaged

in the business of carrying or transporting
passengers or goods or both, by land, water,
or air, for compensation, offering their
services to the public.

Art. 1733. Common carriers, from the nature

of their business and for reasons of public
policy, are bound to observe extraordinary
diligence in the vigilance over the goods and
for the safety of the passengers transported
by them, according to all the circumstances
of each case.

Such extraordinary diligence in the vigilance

over the goods is further expressed in
Articles 1734, 1735, and 1745, Nos. 5, 6,
and 7, while the extraordinary diligence for
the safety of the passengers is further set
forth in Articles 1755 and 1756.

SUBSECTION 2. - Vigilance Over Goods

Art. 1734. Common carriers are responsible

for the loss, destruction, or deterioration of
the goods, unless the same is due to any of
the following causes only:
(1) Flood, storm, earthquake,
lightning, or other natural disaster or
calamity;

(2) Act of the public enemy in war,

whether international or civil;

(3) Act of omission of the shipper or

owner of the goods;

(4) The character of the goods or

defects in the packing or in the
containers;

(5) Order or act of competent public

authority.

Art. 1735. In all cases other than those

mentioned in Nos. 1, 2, 3, 4, and 5 of the
preceding article, if the goods are lost,
destroyed or deteriorated, common carriers
are presumed to have been at fault or to have
acted negligently, unless they prove that
 365

they observed extraordinary diligence as

required in Article 1733.

Art. 1736. The extraordinary responsibility

of the common carrier lasts from the time
the goods are unconditionally placed in the
possession of, and received by the carrier for
transportation until the same are delivered,
actually or constructively, by the carrier to
the consignee, or to the person who has a
right to receive them, without prejudice to
the provisions of Article 1738.

Art. 1737. The common carrier's duty to

observe extraordinary diligence over the
goods remains in full force and effect even
when they are temporarily unloaded or
stored in transit, unless the shipper or owner
has made use of the right of stoppage in
transitu.

Art. 1738. The extraordinary liability of the

common carrier continues to be operative
even during the time the goods are stored in
a warehouse of the carrier at the place of
destination, until the consignee has been
advised of the arrival of the goods and has
had reasonable opportunity thereafter to
remove them or otherwise dispose of them.

Art. 1739. In order that the common carrier

may be exempted from responsibility, the
natural disaster must have been the
proximate and only cause of the loss.
However, the common carrier must exercise
due diligence to prevent or minimize loss
before, during and after the occurrence of
flood, storm or other natural disaster in order
that the common carrier may be exempted
from liability for the loss, destruction, or
deterioration of the goods. The same duty is
incumbent upon the common carrier in case
of an act of the public enemy referred to in
Article 1734, No. 2.

Art. 1740. If the common carrier negligently

incurs in delay in transporting the goods, a
natural disaster shall not free such carrier
from responsibility.
 366

Art. 1741. If the shipper or owner merely

contributed to the loss, destruction or
deterioration of the goods, the proximate
cause thereof being the negligence of the
common carrier, the latter shall be liable in
damages, which however, shall be equitably
reduced.

Art. 1742. Even if the loss, destruction, or

deterioration of the goods should be caused
by the character of the goods, or the faulty
nature of the packing or of the containers,
the common carrier must exercise due
diligence to forestall or lessen the loss.

Art. 1743. If through the order of public

authority the goods are seized or destroyed,
the common carrier is not responsible,
provided said public authority had power to
issue the order.

Art. 1744. A stipulation between the

common carrier and the shipper or owner
limiting the liability of the former for the
loss, destruction, or deterioration of the
goods to a degree less than extraordinary
diligence shall be valid, provided it be:

(1) In writing, signed by the shipper

or owner;

(2) Supported by a valuable

consideration other than the service
rendered by the common carrier; and

(3) Reasonable, just and not contrary

to public policy.

Art. 1745. Any of the following or similar

stipulations shall be considered
unreasonable, unjust and contrary to public
policy:
(1) That the goods are transported at
the risk of the owner or shipper;

(2) That the common carrier will not

be liable for any loss, destruction, or
deterioration of the goods;

(3) That the common carrier need not

observe any diligence in the custody
of the goods;
 367

(4) That the common carrier shall

exercise a degree of diligence less
than that of a good father of a family,
or of a man of ordinary prudence in
the vigilance over the movables
transported;

(5) That the common carrier shall not

be responsible for the acts or omission
of his or its employees;

(6) That the common carrier's liability

for acts committed by thieves, or of
robbers who do not act with grave or
irresistible threat, violence or force, is
dispensed with or diminished;

(7) That the common carrier is not

responsible for the loss, destruction,
or deterioration of goods on account
of the defective condition of the car,
vehicle, ship, airplane or other
equipment used in the contract of
carriage.

Art. 1746. An agreement limiting the

common carrier's liability may be annulled
by the shipper or owner if the common
carrier refused to carry the goods unless the
former agreed to such stipulation.

Art. 1747. If the common carrier, without

just cause, delays the transportation of the
goods or changes the stipulated or usual
route, the contract limiting the common
carrier's liability cannot be availed of in case
of the loss, destruction, or deterioration of
the goods.

Art. 1748. An agreement limiting the

common carrier's liability for delay on
account of strikes or riots is valid.

Art. 1749. A stipulation that the common

carrier's liability is limited to the value of
the goods appearing in the bill of lading,
unless the shipper or owner declares a
greater value, is binding.

Art. 1750. A contract fixing the sum that

may be recovered. by the owner or shipper
for the loss, destruction, or deterioration of
 368

the goods is valid, if it is reasonable and just

under the circumstances, and has been fairly
and freely agreed upon.

Art. 1751. The fact that the common carrier

has no competitor along the line or route, or
a part thereof, to which the contract refers
shall be taken into consideration on the
question of whether or not a stipulation
limiting the common carrier's liability is
reasonable, just and in consonance with
public policy.

Art. 1752. Even when there is an agreement

limiting the liability of the common carrier
in the vigilance over the goods, the common
carrier is disputably presumed to have been
negligent in case of their loss, destruction or
deterioration.

Art. 1753. The law of the country to which

the goods are to be transported shall govern
the liability of the common carrier for their
loss, destruction or deterioration.

Art. 1754. The provisions of Articles 1733

to 1753 shall apply to the passenger's
baggage which is not in his personal custody
or in that of his employee. As to other
baggage, the rules in Articles 1998 and 2000
to 2003 concerning the responsibility of
hotel-keepers shall be applicable.

SUBSECTION 3. - Safety of Passengers

Art. 1755. A common carrier is bound to

carry the passengers safely as far as human
care and foresight can provide, using the
utmost diligence of very cautious persons,
with a due regard for all the circumstances.

Art. 1756. In case of death of or injuries to

passengers, common carriers are presumed
to have been at fault or to have acted
negligently, unless they prove that they
observed extraordinary diligence as
prescribed in Articles 1733 and 1755.

Art. 1757. The responsibility of a common

carrier for the safety of passengers as
 369

required in Articles 1733 and 1755 cannot

be dispensed with or lessened by stipulation,
by the posting of notices, by statements on
tickets, or otherwise.

Art. 1758. When a passenger is carried

gratuitously, a stipulation limiting the
common carrier's liability for negligence is
valid, but not for wilful acts or gross
negligence.

The reduction of fare does not justify any

limitation of the common carrier's liability.

Art. 1759. Common carriers are liable for

the death of or injuries to passengers
through the negligence or wilful acts of the
former's employees, although such
employees may have acted beyond the scope
of their authority or in violation of the orders
of the common carriers.

This liability of the common carriers does

not cease upon proof that they exercised all
the diligence of a good father of a family in
the selection and supervision of their
employees.

Art. 1760. The common carrier's

responsibility prescribed in the preceding
article cannot be eliminated or limited by
stipulation, by the posting of notices, by
statements on the tickets or otherwise.

Art. 1761. The passenger must observe the

diligence of a good father of a family to
avoid injury to himself.

Art. 1762. The contributory negligence of

the passenger does not bar recovery of
damages for his death or injuries, if the
proximate cause thereof is the negligence of
the common carrier, but the amount of
damages shall be equitably reduced.

Art. 1763. A common carrier is responsible

for injuries suffered by a passenger on
account of the wilful acts or negligence of
other passengers or of strangers, if the
common carrier's employees through the
exercise of the diligence of a good father of
a family could have prevented or stopped
 370

the act or omission.

SUBSECTION 4. - Common Provisions

Art. 1764. Damages in cases comprised in

this Section shall be awarded in accordance
with Title XVIII of this Book, concerning
Damages. Article 2206 shall also apply to
the death of a passenger caused by the
breach of contract by a common carrier.

Art. 1765. The Public Service Commission

may, on its own motion or on petition of any
interested party, after due hearing, cancel the
certificate of public convenience granted to
any common carrier that repeatedly fails to
comply with his or its duty to observe
extraordinary diligence as prescribed in this
Section.

Art. 1766. In all matters not regulated by

this Code, the rights and obligations of
common carriers shall be governed by the
Code of Commerce and by special laws.

Title IX. - PARTNERSHIP

CHAPTER 1
GENERAL PROVISIONS

Art. 1767. By the contract of partnership

two or more persons bind themselves to
contribute money, property, or industry to a
common fund, with the intention of dividing
the profits among themselves.

Two or more persons may also form a

partnership for the exercise of a profession.
(1665a)

Art. 1768. The partnership has a judicial

personality separate and distinct from that of
each of the partners, even in case of failure
to comply with the requirements of Article
1772, first paragraph. (n)

Art. 1769. In determining whether a

partnership exists, these rules shall apply:
 371

(1) Except as provided by Article

1825, persons who are not partners as
to each other are not partners as to
third persons;

(2) Co-ownership or co-possession

does not of itself establish a
partnership, whether such-co-owners
or co-possessors do or do not share
any profits made by the use of the
property;

(3) The sharing of gross returns does

not of itself establish a partnership,
whether or not the persons sharing
them have a joint or common right or
interest in any property from which
the returns are derived;

(4) The receipt by a person of a share

of the profits of a business is prima
facie evidence that he is a partner in
the business, but no such inference
shall be drawn if such profits were
received in payment:

(a) As a debt by installments or

otherwise;

(b) As wages of an employee or

rent to a landlord;

(c) As an annuity to a widow or

representative of a deceased
partner;

(d) As interest on a loan,

though the amount of payment
vary with the profits of the
business;

(e) As the consideration for the

sale of a goodwill of a business
or other property by
installments or otherwise. (n)

Art. 1770. A partnership must have a lawful

object or purpose, and must be established
for the common benefit or interest of the
partners.
 372

When an unlawful partnership is dissolved

by a judicial decree, the profits shall be
confiscated in favor of the State, without
prejudice to the provisions of the Penal
Code governing the confiscation of the
instruments and effects of a crime. (1666a)

Art. 1771. A partnership may be constituted

in any form, except where immovable
property or real rights are contributed
thereto, in which case a public instrument
shall be necessary. (1667a)

Art. 1772. Every contract of partnership

having a capital of three thousand pesos or
more, in money or property, shall appear in a
public instrument, which must be recorded
in the Office of the Securities and Exchange
Commission.

Failure to comply with the requirements of

the preceding paragraph shall not affect the
liability of the partnership and the members
thereof to third persons. (n)

Art. 1773. A contract of partnership is void,

whenever immovable property is contributed
thereto, if an inventory of said property is
not made, signed by the parties, and attached
to the public instrument. (1668a)

Art. 1774. Any immovable property or an

interest therein may be acquired in the
partnership name. Title so acquired can be
conveyed only in the partnership name. (n)

Art. 1775. Associations and societies, whose

articles are kept secret among the members,
and wherein any one of the members may
contract in his own name with third persons,
shall have no juridical personality, and shall
be governed by the provisions relating to co-
ownership. (1669)

Art. 1776. As to its object, a partnership is

either universal or particular. As regards the
liability of the partners, a partnership may be
general or limited. (1671a)

Art. 1777. A universal partnership may refer

to all the present property or to all the
profits. (1672)
 373

Art. 1778. A partnership of all present

property is that in which the partners
contribute all the property which actually
belongs to them to a common fund, with the
intention of dividing the same among
themselves, as well as all the profits which
they may acquire therewith. (1673)

Art. 1779. In a universal partnership of all

present property, the property which belongs
to each of the partners at the time of the
constitution of the partnership, becomes the
common property of all the partners, as well
as all the profits which they may acquire
therewith.

A stipulation for the common enjoyment of

any other profits may also be made; but the
property which the partners may acquire
subsequently by inheritance, legacy, or
donation cannot be included in such
stipulation, except the fruits thereof. (1674a)

Art. 1780. A universal partnership of profits

comprises all that the partners may acquire
by their industry or work during the
existence of the partnership.

Movable or immovable property which each

of the partners may possess at the time of
the celebration of the contract shall continue
to pertain exclusively to each, only the
usufruct passing to the partnership. (1675)

Art. 1781. Articles of universal partnership,

entered into without specification of its
nature, only constitute a universal
partnership of profits. (1676)

Art. 1782. Persons who are prohibited from

giving each other any donation or advantage
cannot enter into universal partnership.
(1677)

Art. 1783. A particular partnership has for its

object determinate things, their use or fruits,
or specific undertaking, or the exercise of a
profession or vocation. (1678)

CHAPTER 2
OBLIGATIONS OF THE PARTNERS
 374

SECTION 1. - Obligations of the Partners

Among Themselves

Art. 1784. A partnership begins from the

moment of the execution of the contract,
unless it is otherwise stipulated. (1679)

Art. 1785. When a partnership for a fixed

term or particular undertaking is continued
after the termination of such term or
particular undertaking without any express
agreement, the rights and duties of the
partners remain the same as they were at
such termination, so far as is consistent with
a partnership at will.

A continuation of the business by the

partners or such of them as habitually acted
therein during the term, without any
settlement or liquidation of the partnership
affairs, is prima facie evidence of a
continuation of the partnership. (n)

Art. 1786. Every partner is a debtor of the

partnership for whatever he may have
promised to contribute thereto.

He shall also be bound for warranty in case

of eviction with regard to specific and
determinate things which he may have
contributed to the partnership, in the same
cases and in the same manner as the vendor
is bound with respect to the vendee. He shall
also be liable for the fruits thereof from the
time they should have been delivered,
without the need of any demand. (1681a)

Art. 1787. When the capital or a part thereof

which a partner is bound to contribute
consists of goods, their appraisal must be
made in the manner prescribed in the
contract of partnership, and in the absence of
stipulation, it shall be made by experts
chosen by the partners, and according to
current prices, the subsequent changes
thereof being for account of the partnership.
(n)

Art. 1788. A partner who has undertaken to

contribute a sum of money and fails to do so
 375

becomes a debtor for the interest and

damages from the time he should have
complied with his obligation.

The same rule applies to any amount he may

have taken from the partnership coffers, and
his liability shall begin from the time he
converted the amount to his own use. (1682)

Art. 1789. An industrial partner cannot

engage in business for himself, unless the
partnership expressly permits him to do so;
and if he should do so, the capitalist partners
may either exclude him from the firm or
avail themselves of the benefits which he
may have obtained in violation of this
provision, with a right to damages in either
case. (n)

Art. 1790. Unless there is a stipulation to the

contrary, the partners shall contribute equal
shares to the capital of the partnership. (n)

Art. 1791. If there is no agreement to the

contrary, in case of an imminent loss of the
business of the partnership, any partner who
refuses to contribute an additional share to
the capital, except an industrial partner, to
save the venture, shall he obliged to sell his
interest to the other partners. (n)

Art. 1792. If a partner authorized to manage

collects a demandable sum which was owed
to him in his own name, from a person who
owed the partnership another sum also
demandable, the sum thus collected shall be
applied to the two credits in proportion to
their amounts, even though he may have
given a receipt for his own credit only; but
should he have given it for the account of
the partnership credit, the amount shall be
fully applied to the latter.

The provisions of this article are understood

to be without prejudice to the right granted
to the other debtor by Article 1252, but only
if the personal credit of the partner should be
more onerous to him. (1684)

Art. 1793. A partner who has received, in

whole or in part, his share of a partnership
 376

credit, when the other partners have not

collected theirs, shall be obliged, if the
debtor should thereafter become insolvent,
to bring to the partnership capital what he
received even though he may have given
receipt for his share only. (1685a)

Art. 1794. Every partner is responsible to

the partnership for damages suffered by it
through his fault, and he cannot compensate
them with the profits and benefits which he
may have earned for the partnership by his
industry. However, the courts may equitably
lessen this responsibility if through the
partner's extraordinary efforts in other
activities of the partnership, unusual profits
have been realized. (1686a)

Art. 1795. The risk of specific and

determinate things, which are not fungible,
contributed to the partnership so that only
their use and fruits may be for the common
benefit, shall be borne by the partner who
owns them.

If the things contribute are fungible, or

cannot be kept without deteriorating, or if
they were contributed to be sold, the risk
shall be borne by the partnership. In the
absence of stipulation, the risk of the things
brought and appraised in the inventory, shall
also be borne by the partnership, and in such
case the claim shall be limited to the value at
which they were appraised. (1687)

Art. 1796. The partnership shall be

responsible to every partner for the amounts
he may have disbursed on behalf of the
partnership and for the corresponding
interest, from the time the expense are made;
it shall also answer to each partner for the
obligations he may have contracted in good
faith in the interest of the partnership
business, and for risks in consequence of its
management. (1688a)

Art. 1797. The losses and profits shall be

distributed in conformity with the
agreement. If only the share of each partner
in the profits has been agreed upon, the
 377

share of each in the losses shall be in the

same proportion.

In the absence of stipulation, the share of

each partner in the profits and losses shall be
in proportion to what he may have
contributed, but the industrial partner shall
not be liable for the losses. As for the
profits, the industrial partner shall receive
such share as may be just and equitable
under the circumstances. If besides his
services he has contributed capital, he shall
also receive a share in the profits in
proportion to his capital. (1689a)

Art. 1798. If the partners have agreed to

intrust to a third person the designation of
the share of each one in the profits and
losses, such designation may be impugned
only when it is manifestly inequitable. In no
case may a partner who has begun to
execute the decision of the third person, or
who has not impugned the same within a
period of three months from the time he had
knowledge thereof, complain of such
decision.

The designation of losses and profits cannot

be intrusted to one of the partners. (1690)

Art. 1799. A stipulation which excludes one

or more partners from any share in the
profits or losses is void. (1691)

Art. 1800. The partner who has been

appointed manager in the articles of
partnership may execute all acts of
administration despite the opposition of his
partners, unless he should act in bad faith;
and his power is irrevocable without just or
lawful cause. The vote of the partners
representing the controlling interest shall be
necessary for such revocation of power.

A power granted after the partnership has

been constituted may be revoked at any
time. (1692a)

Art. 1801. If two or more partners have been

intrusted with the management of the
partnership without specification of their
 378

respective duties, or without a stipulation

that one of them shall not act without the
consent of all the others, each one may
separately execute all acts of administration,
but if any of them should oppose the acts of
the others, the decision of the majority shall
prevail. In case of a tie, the matter shall be
decided by the partners owning the
controlling interest. (1693a)

Art. 1802. In case it should have been

stipulated that none of the managing
partners shall act without the consent of the
others, the concurrence of all shall be
necessary for the validity of the acts, and the
absence or disability of any one of them
cannot be alleged, unless there is imminent
danger of grave or irreparable injury to the
partnership. (1694)

Art. 1803. When the manner of management

has not been agreed upon, the following
rules shall be observed:

(1) All the partners shall be

considered agents and whatever any
one of them may do alone shall bind
the partnership, without prejudice to
the provisions of Article 1801.

(2) None of the partners may, without

the consent of the others, make any
important alteration in the immovable
property of the partnership, even if it
may be useful to the partnership. But
if the refusal of consent by the other
partners is manifestly prejudicial to
the interest of the partnership, the
court's intervention may be sought.
(1695a)

Art. 1804. Every partner may associate

another person with him in his share, but the
associate shall not be admitted into the
partnership without the consent of all the
other partners, even if the partner having an
associate should be a manager. (1696)

Art. 1805. The partnership books shall be

kept, subject to any agreement between the
partners, at the principal place of business of
 379

the partnership, and every partner shall at

any reasonable hour have access to and may
inspect and copy any of them. (n)

Art. 1806. Partners shall render on demand

true and full information of all things
affecting the partnership to any partner or
the legal representative of any deceased
partner or of any partner under legal
disability. (n)

Art. 1807. Every partner must account to the

partnership for any benefit, and hold as
trustee for it any profits derived by him
without the consent of the other partners
from any transaction connected with the
formation, conduct, or liquidation of the
partnership or from any use by him of its
property. (n)

Art. 1808. The capitalist partners cannot

engage for their own account in any
operation which is of the kind of business in
which the partnership is engaged, unless
there is a stipulation to the contrary.

Any capitalist partner violating this

prohibition shall bring to the common funds
any profits accruing to him from his
transactions, and shall personally bear all the
losses. (n)

Art. 1809. Any partner shall have the right to

a formal account as to partnership affairs:

(1) If he is wrongfully excluded from

the partnership business or possession
of its property by his co-partners;

(2) If the right exists under the terms

of any agreement;

(3) As provided by article 1807;

(4) Whenever other circumstances

render it just and reasonable. (n)

SECTION 2. - Property Rights of a Partner

Art. 1810. The property rights of a partner

are:
 380

(1) His rights in specific partnership

property;

(2) His interest in the partnership; and

(3) His right to participate in the

management. (n)

Art. 1811. A partner is co-owner with his

partners of specific partnership property.

The incidents of this co-ownership are such

that:

(1) A partner, subject to the provisions

of this Title and to any agreement
between the partners, has an equal
right with his partners to possess
specific partnership property for
partnership purposes; but he has no
right to possess such property for any
other purpose without the consent of
his partners;

(2) A partner's right in specific

partnership property is not assignable
except in connection with the
assignment of rights of all the partners
in the same property;

(3) A partner's right in specific

partnership property is not subject to
attachment or execution, except on a
claim against the partnership. When
partnership property is attached for a
partnership debt the partners, or any
of them, or the representatives of a
deceased partner, cannot claim any
right under the homestead or
exemption laws;

(4) A partner's right in specific

partnership property is not subject to
legal support under Article 291. (n)

Art. 1812. A partner's interest in the

partnership is his share of the profits and
surplus. (n)

Art. 1813. A conveyance by a partner of his

whole interest in the partnership does not of
itself dissolve the partnership, or, as against
 381

the other partners in the absence of

agreement, entitle the assignee, during the
continuance of the partnership, to interfere
in the management or administration of the
partnership business or affairs, or to require
any information or account of partnership
transactions, or to inspect the partnership
books; but it merely entitles the assignee to
receive in accordance with his contract the
profits to which the assigning partner would
otherwise be entitled. However, in case of
fraud in the management of the partnership,
the assignee may avail himself of the usual
remedies.

In case of a dissolution of the partnership,

the assignee is entitled to receive his
assignor's interest and may require an
account from the date only of the last
account agreed to by all the partners. (n)

Art. 1814. Without prejudice to the preferred

rights of partnership creditors under Article
1827, on due application to a competent
court by any judgment creditor of a partner,
the court which entered the judgment, or any
other court, may charge the interest of the
debtor partner with payment of the
unsatisfied amount of such judgment debt
with interest thereon; and may then or later
appoint a receiver of his share of the profits,
and of any other money due or to fall due to
him in respect of the partnership, and make
all other orders, directions, accounts and
inquiries which the debtor partner might
have made, or which the circumstances of
the case may require.

The interest charged may be redeemed at

any time before foreclosure, or in case of a
sale being directed by the court, may be
purchased without thereby causing a
dissolution:

(1) With separate property, by any one

or more of the partners; or

(2) With partnership property, by any

one or more of the partners with the
consent of all the partners whose
interests are not so charged or sold.
 382

Nothing in this Title shall be held to deprive

a partner of his right, if any, under the
exemption laws, as regards his interest in the
partnership. (n)

SECTION 3. - Obligations of the Partners

With Regard to Third Persons

Art. 1815. Every partnership shall operate

under a firm name, which may or may not
include the name of one or more of the
partners.

Those who, not being members of the

partnership, include their names in the firm
name, shall be subject to the liability of a
partner. (n)

Art. 1816. All partners, including industrial

ones, shall be liable pro rata with all their
property and after all the partnership assets
have been exhausted, for the contracts which
may be entered into in the name and for the
account of the partnership, under its
signature and by a person authorized to act
for the partnership. However, any partner
may enter into a separate obligation to
perform a partnership contract. (n)

Art. 1817. Any stipulation against the

liability laid down in the preceding article
shall be void, except as among the partners.
(n)

Art. 1818. Every partner is an agent of the

partnership for the purpose of its business,
and the act of every partner, including the
execution in the partnership name of any
instrument, for apparently carrying on in the
usual way the business of the partnership of
which he is a member binds the partnership,
unless the partner so acting has in fact no
authority to act for the partnership in the
particular matter, and the person with whom
he is dealing has knowledge of the fact that
he has no such authority.

An act of a partner which is not apparently

for the carrying on of business of the
partnership in the usual way does not bind
 383

the partnership unless authorized by the

other partners.

Except when authorized by the other

partners or unless they have abandoned the
business, one or more but less than all the
partners have no authority to:

(1) Assign the partnership property in

trust for creditors or on the assignee's
promise to pay the debts of the
partnership;

(2) Dispose of the good-will of the

business;

(3) Do any other act which would

make it impossible to carry on the
ordinary business of a partnership;

(4) Confess a judgment;

(5) Enter into a compromise

concerning a partnership claim or
liability;

(6) Submit a partnership claim or

liability to arbitration;

(7) Renounce a claim of the

partnership.

No act of a partner in contravention of a

restriction on authority shall bind the
partnership to persons having knowledge of
the restriction. (n)

Art. 1819. Where title to real property is in

the partnership name, any partner may
convey title to such property by a
conveyance executed in the partnership
name; but the partnership may recover such
property unless the partner's act binds the
partnership under the provisions of the first
paragraph of article 1818, or unless such
property has been conveyed by the grantee
or a person claiming through such grantee to
a holder for value without knowledge that
the partner, in making the conveyance, has
exceeded his authority.
 384

Where title to real property is in the name of

the partnership, a conveyance executed by a
partner, in his own name, passes the
equitable interest of the partnership,
provided the act is one within the authority
of the partner under the provisions of the
first paragraph of Article 1818.

Where title to real property is in the name of

one or more but not all the partners, and the
record does not disclose the right of the
partnership, the partners in whose name the
title stands may convey title to such
property, but the partnership may recover
such property if the partners' act does not
bind the partnership under the provisions of
the first paragraph of Article 1818, unless
the purchaser or his assignee, is a holder for
value, without knowledge.

Where the title to real property is in the

name of one or more or all the partners, or in
a third person in trust for the partnership, a
conveyance executed by a partner in the
partnership name, or in his own name,
passes the equitable interest of the
partnership, provided the act is one within
the authority of the partner under the
provisions of the first paragraph of Article
1818.

Where the title to real property is in the

name of all the partners a conveyance
executed by all the partners passes all their
rights in such property. (n)

Art. 1820. An admission or representation

made by any partner concerning partnership
affairs within the scope of his authority in
accordance with this Title is evidence
against the partnership. (n)

Art. 1821. Notice to any partner of any

matter relating to partnership affairs, and the
knowledge of the partner acting in the
particular matter, acquired while a partner or
then present to his mind, and the knowledge
of any other partner who reasonably could
and should have communicated it to the
acting partner, operate as notice to or
knowledge of the partnership, except in the
 385

case of fraud on the partnership, committed

by or with the consent of that partner. (n)

Art. 1822. Where, by any wrongful act or

omission of any partner acting in the
ordinary course of the business of the
partnership or with the authority of co-
partners, loss or injury is caused to any
person, not being a partner in the
partnership, or any penalty is incurred, the
partnership is liable therefor to the same
extent as the partner so acting or omitting to
act. (n)

Art. 1823. The partnership is bound to make

good the loss:

(1) Where one partner acting within

the scope of his apparent authority
receives money or property of a third
person and misapplies it; and

(2) Where the partnership in the

course of its business receives money
or property of a third person and the
money or property so received is
misapplied by any partner while it is
in the custody of the partnership. (n)

Art. 1824. All partners are liable solidarily

with the partnership for everything
chargeable to the partnership under Articles
1822 and 1823. (n)

Art. 1825. When a person, by words spoken

or written or by conduct, represents himself,
or consents to another representing him to
anyone, as a partner in an existing
partnership or with one or more persons not
actual partners, he is liable to any such
persons to whom such representation has
been made, who has, on the faith of such
representation, given credit to the actual or
apparent partnership, and if he has made
such representation or consented to its being
made in a public manner he is liable to such
person, whether the representation has or
has not been made or communicated to such
person so giving credit by or with the
knowledge of the apparent partner making
 386

the representation or consenting to its being

made:

(1) When a partnership liability

results, he is liable as though he were
an actual member of the partnership;

(2) When no partnership liability

results, he is liable pro rata with the
other persons, if any, so consenting to
the contract or representation as to
incur liability, otherwise separately.

When a person has been thus represented to

be a partner in an existing partnership, or
with one or more persons not actual
partners, he is an agent of the persons
consenting to such representation to bind
them to the same extent and in the same
manner as though he were a partner in fact,
with respect to persons who rely upon the
representation. When all the members of the
existing partnership consent to the
representation, a partnership act or
obligation results; but in all other cases it is
the joint act or obligation of the person
acting and the persons consenting to the
representation. (n)

Art. 1826. A person admitted as a partner

into an existing partnership is liable for all
the obligations of the partnership arising
before his admission as though he had been
a partner when such obligations were
incurred, except that this liability shall be
satisfied only out of partnership property,
unless there is a stipulation to the contrary.
(n)

Art. 1827. The creditors of the partnership

shall be preferred to those of each partner as
regards the partnership property. Without
prejudice to this right, the private creditors
of each partner may ask the attachment and
public sale of the share of the latter in the
partnership assets. (n)

CHAPTER 3
DISSOLUTION AND WINDING UP
 387

Art. 1828. The dissolution of a partnership is

the change in the relation of the partners
caused by any partner ceasing to be
associated in the carrying on as
distinguished from the winding up of the
business. (n)

Art. 1829. On dissolution the partnership is

not terminated, but continues until the
winding up of partnership affairs is
completed. (n)

Art. 1830. Dissolution is caused:

(1) Without violation of the agreement

between the partners:
(a) By the termination of the
definite term or particular
undertaking specified in the
agreement;

(b) By the express will of any

partner, who must act in good
faith, when no definite term or
particular is specified;

(c) By the express will of all

the partners who have not
assigned their interests or
suffered them to be charged for
their separate debts, either
before or after the termination
of any specified term or
particular undertaking;

(d) By the expulsion of any

partner from the business bona
fide in accordance with such a
power conferred by the
agreement between the
partners;

(2) In contravention of the agreement

between the partners, where the
circumstances do not permit a
dissolution under any other provision
of this article, by the express will of
any partner at any time;
 388

(3) By any event which makes it

unlawful for the business of the
partnership to be carried on or for the
members to carry it on in partnership;

(4) When a specific thing which a

partner had promised to contribute to
the partnership, perishes before the
delivery; in any case by the loss of the
thing, when the partner who
contributed it having reserved the
ownership thereof, has only
transferred to the partnership the use
or enjoyment of the same; but the
partnership shall not be dissolved by
the loss of the thing when it occurs
after the partnership has acquired the
ownership thereof;

(5) By the death of any partner;

(6) By the insolvency of any partner

or of the partnership;

(7) By the civil interdiction of any

partner;

(8) By decree of court under the

following article. (1700a and 1701a)

Art. 1831. On application by or for a partner

the court shall decree a dissolution
whenever:
(1) A partner has been declared insane
in any judicial proceeding or is shown
to be of unsound mind;

(2) A partner becomes in any other

way incapable of performing his part
of the partnership contract;

(3) A partner has been guilty of such

conduct as tends to affect
prejudicially the carrying on of the
business;

(4) A partner wilfully or persistently

commits a breach of the partnership
agreement, or otherwise so conducts
himself in matters relating to the
partnership business that it is not
 389

reasonably practicable to carry on the

business in partnership with him;

(5) The business of the partnership

can only be carried on at a loss;

(6) Other circumstances render a

dissolution equitable.

On the application of the purchaser of a

partner's interest under Article 1813 or 1814:
(1) After the termination of the
specified term or particular
undertaking;

(2) At any time if the partnership was

a partnership at will when the interest
was assigned or when the charging
order was issued. (n)

Art. 1832. Except so far as may be necessary

to wind up partnership affairs or to complete
transactions begun but not then finished,
dissolution terminates all authority of any
partner to act for the partnership:
(1) With respect to the partners:
(a) When the dissolution is not
by the act, insolvency or death
of a partner; or

(b) When the dissolution is by

such act, insolvency or death of
a partner, in cases where article
1833 so requires;

(2) With respect to persons not

partners, as declared in article 1834.
(n)
Art. 1833. Where the dissolution is caused
by the act, death or insolvency of a partner,
each partner is liable to his co-partners for
his share of any liability created by any
partner acting for the partnership as if the
partnership had not been dissolved unless:
(1) The dissolution being by act of
any partner, the partner acting for the
partnership had knowledge of the
dissolution; or

(2) The dissolution being by the death

or insolvency of a partner, the partner
acting for the partnership had
 390

knowledge or notice of the death or

insolvency.

Art. 1834. After dissolution, a partner can

bind the partnership, except as provided in
the third paragraph of this article:
(1) By any act appropriate for
winding up partnership affairs or
completing transactions unfinished at
dissolution;

(2) By any transaction which would

bind the partnership if dissolution had
not taken place, provided the other
party to the transaction:

(a) Had extended credit to the

partnership prior to dissolution
and had no knowledge or notice
of the dissolution; or

(b) Though he had not so

extended credit, had
nevertheless known of the
partnership prior to dissolution,
and, having no knowledge or
notice of dissolution, the fact of
dissolution had not been
advertised in a newspaper of
general circulation in the place
(or in each place if more than
one) at which the partnership
business was regularly carried
on.

The liability of a partner under the first

paragraph, No. 2, shall be satisfied out of
partnership assets alone when such partner
had been prior to dissolution:
(1) Unknown as a partner to the
person with whom the contract is
made; and

(2) So far unknown and inactive in

partnership affairs that the business
reputation of the partnership could not
be said to have been in any degree
due to his connection with it.

The partnership is in no case bound by any

act of a partner after dissolution:
 391

(1) Where the partnership is dissolved

because it is unlawful to carry on the
business, unless the act is appropriate
for winding up partnership affairs; or

(2) Where the partner has become

insolvent; or

(3) Where the partner has no authority

to wind up partnership affairs; except
by a transaction with one who:

(a) Had extended credit to the

partnership prior to dissolution
and had no knowledge or notice
of his want of authority; or

(b) Had not extended credit to

the partnership prior to
dissolution, and, having no
knowledge or notice of his
want of authority, the fact of his
want of authority has not been
advertised in the manner
provided for advertising the
fact of dissolution in the first
paragraph, No. 2 (b).

Nothing in this article shall affect the

liability under Article 1825 of any person
who, after dissolution, represents himself or
consents to another representing him as a
partner in a partnership engaged in carrying
business. (n)

Art. 1835. The dissolution of the partnership

does not of itself discharge the existing
liability of any partner.

A partner is discharged from any existing

liability upon dissolution of the partnership
by an agreement to that effect between
himself, the partnership creditor and the
person or partnership continuing the
business; and such agreement may be
inferred from the course of dealing between
the creditor having knowledge of the
dissolution and the person or partnership
continuing the business.

The individual property of a deceased

partner shall be liable for all obligations of
 392

the partnership incurred while he was a

partner, but subject to the prior payment of
his separate debts. (n)

Art. 1836. Unless otherwise agreed, the

partners who have not wrongfully dissolved
the partnership or the legal representative of
the last surviving partner, not insolvent, has
the right to wind up the partnership affairs,
provided, however, that any partner, his
legal representative or his assignee, upon
cause shown, may obtain winding up by the
court. (n)

Art. 1837. When dissolution is caused in any

way, except in contravention of the
partnership agreement, each partner, as
against his co-partners and all persons
claiming through them in respect of their
interests in the partnership, unless otherwise
agreed, may have the partnership property
applied to discharge its liabilities, and the
surplus applied to pay in cash the net
amount owing to the respective partners. But
if dissolution is caused by expulsion of a
partner, bona fide under the partnership
agreement and if the expelled partner is
discharged from all partnership liabilities,
either by payment or agreement under the
second paragraph of Article 1835, he shall
receive in cash only the net amount due him
from the partnership.

When dissolution is caused in contravention

of the partnership agreement the rights of
the partners shall be as follows:

(1) Each partner who has not caused

dissolution wrongfully shall have:

(a) All the rights specified in

the first paragraph of this
article, and

(b) The right, as against each

partner who has caused the
dissolution wrongfully, to
damages breach of the
agreement.
 393

(2) The partners who have not caused

the dissolution wrongfully, if they all
desire to continue the business in the
same name either by themselves or
jointly with others, may do so, during
the agreed term for the partnership
and for that purpose may possess the
partnership property, provided they
secure the payment by bond approved
by the court, or pay any partner who
has caused the dissolution wrongfully,
the value of his interest in the
partnership at the dissolution, less any
damages recoverable under the
second paragraph, No. 1 (b) of this
article, and in like manner indemnify
him against all present or future
partnership liabilities.

(3) A partner who has caused the

dissolution wrongfully shall have:

(a) If the business is not

continued under the provisions
of the second paragraph, No. 2,
all the rights of a partner under
the first paragraph, subject to
liability for damages in the
second paragraph, No. 1 (b), of
this article.

(b) If the business is continued

under the second paragraph,
No. 2, of this article, the right
as against his co-partners and
all claiming through them in
respect of their interests in the
partnership, to have the value
of his interest in the
partnership, less any damage
caused to his co-partners by the
dissolution, ascertained and
paid to him in cash, or the
payment secured by a bond
approved by the court, and to
be released from all existing
liabilities of the partnership; but
in ascertaining the value of the
partner's interest the value of
 394

the good-will of the business

shall not be considered. (n)

Art. 1838. Where a partnership contract is

rescinded on the ground of the fraud or
misrepresentation of one of the parties
thereto, the party entitled to rescind is,
without prejudice to any other right, entitled:
(1) To a lien on, or right of retention
of, the surplus of the partnership
property after satisfying the
partnership liabilities to third persons
for any sum of money paid by him for
the purchase of an interest in the
partnership and for any capital or
advances contributed by him;

(2) To stand, after all liabilities to

third persons have been satisfied, in
the place of the creditors of the
partnership for any payments made by
him in respect of the partnership
liabilities; and

(3) To be indemnified by the person

guilty of the fraud or making the
representation against all debts and
liabilities of the partnership. (n)

Art. 1839. In settling accounts between the

partners after dissolution, the following rules
shall be observed, subject to any agreement
to the contrary:
(1) The assets of the partnership are:

(a) The partnership property,

(b) The contributions of the

partners necessary for the
payment of all the liabilities
specified in No. 2.

(2) The liabilities of the partnership

shall rank in order of payment, as
follows:

(a) Those owing to creditors

other than partners,
 395

(b) Those owing to partners

other than for capital and
profits,

(c) Those owing to partners in

respect of capital,

(d) Those owing to partners in

respect of profits.

(3) The assets shall be applied in the

order of their declaration in No. 1 of
this article to the satisfaction of the
liabilities.

(4) The partners shall contribute, as

provided by article 1797, the amount
necessary to satisfy the liabilities.

(5) An assignee for the benefit of

creditors or any person appointed by
the court shall have the right to
enforce the contributions specified in
the preceding number.

(6) Any partner or his legal

representative shall have the right to
enforce the contributions specified in
No. 4, to the extent of the amount
which he has paid in excess of his
share of the liability.

(7) The individual property of a

deceased partner shall be liable for the
contributions specified in No. 4.

(8) When partnership property and the

individual properties of the partners
are in possession of a court for
distribution, partnership creditors
shall have priority on partnership
property and separate creditors on
individual property, saving the rights
of lien or secured creditors.

(9) Where a partner has become

insolvent or his estate is insolvent, the
claims against his separate property
shall rank in the following order:
 396

(a) Those owing to separate

creditors;

(b) Those owing to partnership

creditors;

(c) Those owing to partners by

way of contribution. (n)

Art. 1840. In the following cases creditors of

the dissolved partnership are also creditors
of the person or partnership continuing the
business:
(1) When any new partner is admitted
into an existing partnership, or when
any partner retires and assigns (or the
representative of the deceased partner
assigns) his rights in partnership
property to two or more of the
partners, or to one or more of the
partners and one or more third
persons, if the business is continued
without liquidation of the partnership
affairs;

(2) When all but one partner retire and

assign (or the representative of a
deceased partner assigns) their rights
in partnership property to the
remaining partner, who continues the
business without liquidation of
partnership affairs, either alone or
with others;

(3) When any partner retires or dies

and the business of the dissolved
partnership is continued as set forth in
Nos. 1 and 2 of this article, with the
consent of the retired partners or the
representative of the deceased partner,
but without any assignment of his
right in partnership property;

(4) When all the partners or their

representatives assign their rights in
partnership property to one or more
third persons who promise to pay the
debts and who continue the business
of the dissolved partnership;
 397

(5) When any partner wrongfully

causes a dissolution and the remaining
partners continue the business under
the provisions of article 1837, second
paragraph, No. 2, either alone or with
others, and without liquidation of the
partnership affairs;

(6) When a partner is expelled and the

remaining partners continue the
business either alone or with others
without liquidation of the partnership
affairs.

The liability of a third person becoming a

partner in the partnership continuing the
business, under this article, to the creditors
of the dissolved partnership shall be satisfied
out of the partnership property only, unless
there is a stipulation to the contrary.

When the business of a partnership after

dissolution is continued under any
conditions set forth in this article the
creditors of the dissolved partnership, as
against the separate creditors of the retiring
or deceased partner or the representative of
the deceased partner, have a prior right to
any claim of the retired partner or the
representative of the deceased partner
against the person or partnership continuing
the business, on account of the retired or
deceased partner's interest in the dissolved
partnership or on account of any
consideration promised for such interest or
for his right in partnership property.

Nothing in this article shall be held to

modify any right of creditors to set aside any
assignment on the ground of fraud.

The use by the person or partnership

continuing the business of the partnership
name, or the name of a deceased partner as
part thereof, shall not of itself make the
individual property of the deceased partner
liable for any debts contracted by such
person or partnership. (n)

Art. 1841. When any partner retires or dies,

and the business is continued under any of
 398

the conditions set forth in the preceding

article, or in Article 1837, second paragraph,
No. 2, without any settlement of accounts as
between him or his estate and the person or
partnership continuing the business, unless
otherwise agreed, he or his legal
representative as against such person or
partnership may have the value of his
interest at the date of dissolution
ascertained, and shall receive as an ordinary
creditor an amount equal to the value of his
interest in the dissolved partnership with
interest, or, at his option or at the option of
his legal representative, in lieu of interest,
the profits attributable to the use of his right
in the property of the dissolved partnership;
provided that the creditors of the dissolved
partnership as against the separate creditors,
or the representative of the retired or
deceased partner, shall have priority on any
claim arising under this article, as provided
Article 1840, third paragraph. (n)

Art. 1842. The right to an account of his

interest shall accrue to any partner, or his
legal representative as against the winding
up partners or the surviving partners or the
person or partnership continuing the
business, at the date of dissolution, in the
absence of any agreement to the contrary.
(n)

CHAPTER 4
LIMITED PARTNERSHIP (n)

Art. 1843. A limited partnership is one

formed by two or more persons under the
provisions of the following article, having as
members one or more general partners and
one or more limited partners. The limited
partners as such shall not be bound by the
obligations of the partnership.

Art. 1844. Two or more persons desiring to

form a limited partnership shall:

(1) Sign and swear to a certificate,

which shall state -
 399

(a) The name of the

partnership, adding thereto the
word "Limited";

(b) The character of the

business;

(c) The location of the principal

place of business;

(d) The name and place of

residence of each member,
general and limited partners
being respectively designated;

(e) The term for which the

partnership is to exist;

(f) The amount of cash and a

description of and the agreed
value of the other property
contributed by each limited
partner;

(g) The additional

contributions, if any, to be
made by each limited partner
and the times at which or
events on the happening of
which they shall be made;

(h) The time, if agreed upon,

when the contribution of each
limited partner is to be
returned;

(i) The share of the profits or

the other compensation by way
of income which each limited
partner shall receive by reason
of his contribution;

(j) The right, if given, of a

limited partner to substitute an
assignee as contributor in his
place, and the terms and
conditions of the substitution;

(k) The right, if given, of the

partners to admit additional
limited partners;
 400

(l) The right, if given, of one or

more of the limited partners to
priority over other limited
partners, as to contributions or
as to compensation by way of
income, and the nature of such
priority;

(m) The right, if given, of the

remaining general partner or
partners to continue the
business on the death,
retirement, civil interdiction,
insanity or insolvency of a
general partner; and

(n) The right, if given, of a

limited partner to demand and
receive property other than cash
in return for his contribution.

(2) File for record the certificate in the

Office of the Securities and Exchange
Commission.

A limited partnership is formed if there has

been substantial compliance in good faith
with the foregoing requirements.

Art. 1845. The contributions of a limited

partner may be cash or property, but not
services.

Art. 1846. The surname of a limited partner

shall not appear in the partnership name
unless:

(1) It is also the surname of a general

partner, or

(2) Prior to the time when the limited

partner became such, the business has
been carried on under a name in
which his surname appeared.

A limited partner whose surname appears in

a partnership name contrary to the
provisions of the first paragraph is liable as a
general partner to partnership creditors who
extend credit to the partnership without
actual knowledge that he is not a general
partner.
 401

Art. 1847. If the certificate contains a false

statement, one who suffers loss by reliance
on such statement may hold liable any party
to the certificate who knew the statement to
be false:

(1) At the time he signed the

certificate, or

(2) Subsequently, but within a

sufficient time before the statement
was relied upon to enable him to
cancel or amend the certificate, or to
file a petition for its cancellation or
amendment as provided in Article
1865.

Art. 1848. A limited partner shall not

become liable as a general partner unless, in
addition to the exercise of his rights and
powers as a limited partner, he takes part in
the control of the business.

Art. 1849. After the formation of a lifted

partnership, additional limited partners may
be admitted upon filing an amendment to the
original certificate in accordance with the
requirements of Article 1865.

Art. 1850. A general partner shall have all

the rights and powers and be subject to all
the restrictions and liabilities of a partner in
a partnership without limited partners.
However, without the written consent or
ratification of the specific act by all the
limited partners, a general partner or all of
the general partners have no authority to:

(1) Do any act in contravention of the

certificate;

(2) Do any act which would make it

impossible to carry on the ordinary
business of the partnership;

(3) Confess a judgment against the

partnership;

(4) Possess partnership property, or

assign their rights in specific
partnership property, for other than a
partnership purpose;
 402

(5) Admit a person as a general

partner;

(6) Admit a person as a limited

partner, unless the right so to do is
given in the certificate;

(7) Continue the business with

partnership property on the death,
retirement, insanity, civil interdiction
or insolvency of a general partner,
unless the right so to do is given in the
certificate.

Art. 1851. A limited partner shall have the

same rights as a general partner to:
(1) Have the partnership books kept at
the principal place of business of the
partnership, and at a reasonable hour
to inspect and copy any of them;

(2) Have on demand true and full

information of all things affecting the
partnership, and a formal account of
partnership affairs whenever
circumstances render it just and
reasonable; and

(3) Have dissolution and winding up

by decree of court.

A limited partner shall have the right to

receive a share of the profits or other
compensation by way of income, and to the
return of his contribution as provided in
Articles 1856 and 1857.

Art. 1852. Without prejudice to the

provisions of Article 1848, a person who has
contributed to the capital of a business
conducted by a person or partnership
erroneously believing that he has become a
limited partner in a limited partnership, is
not, by reason of his exercise of the rights of
a limited partner, a general partner with the
person or in the partnership carrying on the
business, or bound by the obligations of
such person or partnership, provided that on
ascertaining the mistake he promptly
renounces his interest in the profits of the
 403

business, or other compensation by way of

income.

Art. 1853. A person may be a general partner

and a limited partner in the same partnership
at the same time, provided that this fact shall
be stated in the certificate provided for in
Article 1844.

A person who is a general, and also at the

same time a limited partner, shall have all
the rights and powers and be subject to all
the restrictions of a general partner; except
that, in respect to his contribution, he shall
have the rights against the other members
which he would have had if he were not also
a general partner.

Art. 1854. A limited partner also may loan

money to and transact other business with
the partnership, and, unless he is also a
general partner, receive on account of
resulting claims against the partnership, with
general creditors, a pro rata share of the
assets. No limited partner shall in respect to
any such claim:

(1) Receive or hold as collateral

security and partnership property, or

(2) Receive from a general partner or

the partnership any payment,
conveyance, or release from liability
if at the time the assets of the
partnership are not sufficient to
discharge partnership liabilities to
persons not claiming as general or
limited partners.

The receiving of collateral security, or

payment, conveyance, or release in violation
of the foregoing provisions is a fraud on the
creditors of the partnership.

Art. 1855. Where there are several limited

partners the members may agree that one or
more of the limited partners shall have a
priority over other limited partners as to the
return of their contributions, as to their
compensation by way of income, or as to
any other matter. If such an agreement is
 404

made it shall be stated in the certificate, and

in the absence of such a statement all the
limited partners shall stand upon equal
footing.

Art. 1856. A limited partner may receive

from the partnership the share of the profits
or the compensation by way of income
stipulated for in the certificate; provided that
after such payment is made, whether from
property of the partnership or that of a
general partner, the partnership assets are in
excess of all liabilities of the partnership
except liabilities to limited partners on
account of their contributions and to general
partners.

Art. 1857. A limited partner shall not receive

from a general partner or out of partnership
property any part of his contributions until:

(1) All liabilities of the partnership,

except liabilities to general partners
and to limited partners on account of
their contributions, have been paid or
there remains property of the
partnership sufficient to pay them;

(2) The consent of all members is had,

unless the return of the contribution
may be rightfully demanded under the
provisions of the second paragraph;
and

(3) The certificate is cancelled or so

amended as to set forth the
withdrawal or reduction.

Subject to the provisions of the first

paragraph, a limited partner may rightfully
demand the return of his contribution:
(1) On the dissolution of a
partnership; or

(2) When the date specified in the

certificate for its return has arrived, or

(3) After he has six months' notice in

writing to all other members, if no
time is specified in the certificate,
either for the return of the
 405

contribution or for the dissolution of

the partnership.

In the absence of any statement in the

certificate to the contrary or the consent of
all members, a limited partner, irrespective
of the nature of his contribution, has only
the right to demand and receive cash in
return for his contribution.

A limited partner may have the partnership

dissolved and its affairs wound up when:

(1) He rightfully but unsuccessfully

demands the return of his
contribution, or

(2) The other liabilities of the

partnership have not been paid, or the
partnership property is insufficient for
their payment as required by the first
paragraph, No. 1, and the limited
partner would otherwise be entitled to
the return of his contribution.

Art. 1858. A limited partner is liable to the

partnership:
(1) For the difference between his
contribution as actually made and that
stated in the certificate as having been
made; and

(2) For any unpaid contribution which

he agreed in the certificate to make in
the future at the time and on the
conditions stated in the certificate.

A limited partner holds as trustee for the

partnership:
(1) Specific property stated in the
certificate as contributed by him, but
which was not contributed or which
has been wrongfully returned, and

(2) Money or other property

wrongfully paid or conveyed to him
on account of his contribution.

The liabilities of a limited partner as set

forth in this article can be waived or
compromised only by the consent of all
members; but a waiver or compromise shall
 406

not affect the right of a creditor of a

partnership who extended credit or whose
claim arose after the filing and before a
cancellation or amendment of the certificate,
to enforce such liabilities.

When a contributor has rightfully received

the return in whole or in part of the capital
of his contribution, he is nevertheless liable
to the partnership for any sum, not in excess
of such return with interest, necessary to
discharge its liabilities to all creditors who
extended credit or whose claims arose
before such return.

Art. 1859. A limited partner's interest is

assignable.

A substituted limited partner is a person

admitted to all the rights of a limited partner
who has died or has assigned his interest in a
partnership.

An assignee, who does not become a

substituted limited partner, has no right to
require any information or account of the
partnership transactions or to inspect the
partnership books; he is only entitled to
receive the share of the profits or other
compensation by way of income, or the
return of his contribution, to which his
assignor would otherwise be entitled.

An assignee shall have the right to become a

substituted limited partner if all the members
consent thereto or if the assignor, being
thereunto empowered by the certificate,
gives the assignee that right.

An assignee becomes a substituted limited

partner when the certificate is appropriately
amended in accordance with Article 1865.

The substituted limited partner has all the

rights and powers, and is subject to all the
restrictions and liabilities of his assignor,
except those liabilities of which he was
ignorant at the time he became a limited
partner and which could not be ascertained
from the certificate.
 407

The substitution of the assignee as a limited

partner does not release the assignor from
liability to the partnership under Articles
1847 and 1848.

Art. 1860. The retirement, death, insolvency,

insanity or civil interdiction of a general
partner dissolves the partnership, unless the
business is continued by the remaining
general partners:

(1) Under a right so to do stated in the

certificate, or

(2) With the consent of all members.

Art. 1861. On the death of a limited partner

his executor or administrator shall have all
the rights of a limited partner for the purpose
of setting his estate, and such power as the
deceased had to constitute his assignee a
substituted limited partner.

The estate of a deceased limited partner

shall be liable for all his liabilities as a
limited partner.

Art. 1862. On due application to a court of

competent jurisdiction by any creditor of a
limited partner, the court may charge the
interest of the indebted limited partner with
payment of the unsatisfied amount of such
claim, and may appoint a receiver, and make
all other orders, directions and inquiries
which the circumstances of the case may
require.

The interest may be redeemed with the

separate property of any general partner, but
may not be redeemed with partnership
property.

The remedies conferred by the first

paragraph shall not be deemed exclusive of
others which may exist.

Nothing in this Chapter shall be held to

deprive a limited partner of his statutory
exemption.

Art. 1863. In setting accounts after

dissolution the liabilities of the partnership
 408

shall be entitled to payment in the following

order:

(1) Those to creditors, in the order of

priority as provided by law, except
those to limited partners on account of
their contributions, and to general
partners;

(2) Those to limited partners in

respect to their share of the profits and
other compensation by way of income
on their contributions;

(3) Those to limited partners in

respect to the capital of their
contributions;

(4) Those to general partners other

than for capital and profits;

(5) Those to general partners in

respect to profits;

(6) Those to general partners in

respect to capital.

Subject to any statement in the certificate or

to subsequent agreement, limited partners
share in the partnership assets in respect to
their claims for capital, and in respect to
their claims for profits or for compensation
by way of income on their contribution
respectively, in proportion to the respective
amounts of such claims.

Art. 1864. The certificate shall be cancelled

when the partnership is dissolved or all
limited partners cease to be such.

A certificate shall be amended when:

(1) There is a change in the name of

the partnership or in the amount or
character of the contribution of any
limited partner;

(2) A person is substituted as a limited

partner;

(3) An additional limited partner is

admitted;
 409

(4) A person is admitted as a general

partner;

(5) A general partner retires, dies,

becomes insolvent or insane, or is
sentenced to civil interdiction and the
business is continued under Article
1860;

(6) There is a change in the character

of the business of the partnership;

(7) There is a false or erroneous

statement in the certificate;

(8) There is a change in the time as

stated in the certificate for the
dissolution of the partnership or for
the return of a contribution;

(9) A time is fixed for the dissolution

of the partnership, or the return of a
contribution, no time having been
specified in the certificate, or

(10) The members desire to make a

change in any other statement in the
certificate in order that it shall
accurately represent the agreement
among them.

Art. 1865. The writing to amend a certificate

shall:
(1) Conform to the requirements of
Article 1844 as far as necessary to set
forth clearly the change in the
certificate which it is desired to make;
and

(2) Be signed and sworn to by all

members, and an amendment
substituting a limited partner or
adding a limited or general partner
shall be signed also by the member to
be substituted or added, and when a
limited partner is to be substituted, the
amendment shall also be signed by
the assigning limited partner.

The writing to cancel a certificate shall be

signed by all members.
 410

A person desiring the cancellation or

amendment of a certificate, if any person
designated in the first and second paragraphs
as a person who must execute the writing
refuses to do so, may petition the court to
order a cancellation or amendment thereof.

If the court finds that the petitioner has a

right to have the writing executed by a
person who refuses to do so, it shall order
the Office of the Securities and Exchange
Commission where the certificate is
recorded, to record the cancellation or
amendment of the certificate; and when the
certificate is to be amended, the court shall
also cause to be filed for record in said
office a certified copy of its decree setting
forth the amendment.

A certificate is amended or cancelled when

there is filed for record in the Office of the
Securities and Exchange Commission,
where the certificate is recorded:

(1) A writing in accordance with the

provisions of the first or second
paragraph, or

(2) A certified copy of the order of the

court in accordance with the
provisions of the fourth paragraph;

(3) After the certificate is duly

amended in accordance with this
article, the amended certified shall
thereafter be for all purposes the
certificate provided for in this
Chapter.

Art. 1866. A contributor, unless he is a

general partner, is not a proper party to
proceedings by or against a partnership,
except where the object is to enforce a
limited partner's right against or liability to
the partnership.

Art. 1867. A limited partnership formed

under the law prior to the effectivity of this
Code, may become a limited partnership
under this Chapter by complying with the
 411

provisions of Article 1844, provided the

certificate sets forth:

(1) The amount of the original

contribution of each limited partner,
and the time when the contribution
was made; and

(2) That the property of the

partnership exceeds the amount
sufficient to discharge its liabilities to
persons not claiming as general or
limited partners by an amount greater
than the sum of the contributions of
its limited partners.

A limited partnership formed under the law

prior to the effectivity of this Code, until or
unless it becomes a limited partnership
under this Chapter, shall continue to be
governed by the provisions of the old law.

Title X. - AGENCY

CHAPTER 1
NATURE, FORM AND KINDS OF
AGENCY

Art. 1868. By the contract of agency a

person binds himself to render some service
or to do something in representation or on
behalf of another, with the consent or
authority of the latter. (1709a)

Art. 1869. Agency may be express, or

implied from the acts of the principal, from
his silence or lack of action, or his failure to
repudiate the agency, knowing that another
person is acting on his behalf without
authority.

Agency may be oral, unless the law requires

a specific form. (1710a)

Art. 1870. Acceptance by the agent may also

be express, or implied from his acts which
carry out the agency, or from his silence or
inaction according to the circumstances. (n)

Art. 1871. Between persons who are present,

the acceptance of the agency may also be
 412

implied if the principal delivers his power of

attorney to the agent and the latter receives it
without any objection. (n)

Art. 1872. Between persons who are absent,

the acceptance of the agency cannot be
implied from the silence of the agent,
except:

(1) When the principal transmits his

power of attorney to the agent, who
receives it without any objection;

(2) When the principal entrusts to him

by letter or telegram a power of
attorney with respect to the business
in which he is habitually engaged as
an agent, and he did not reply to the
letter or telegram. (n)

Art. 1873. If a person specially informs

another or states by public advertisement
that he has given a power of attorney to a
third person, the latter thereby becomes a
duly authorized agent, in the former case
with respect to the person who received the
special information, and in the latter case
with regard to any person.

The power shall continue to be in full force

until the notice is rescinded in the same
manner in which it was given. (n)

Art. 1874. When a sale of a piece of land or

any interest therein is through an agent, the
authority of the latter shall be in writing;
otherwise, the sale shall be void. (n)

Art. 1875. Agency is presumed to be for a

compensation, unless there is proof to the
contrary. (n)

Art. 1876. An agency is either general or

special.

The former comprises all the business of the

principal. The latter, one or more specific
transactions. (1712)

Art. 1877. An agency couched in general

terms comprises only acts of administration,
even if the principal should state that he
 413

withholds no power or that the agent may

execute such acts as he may consider
appropriate, or even though the agency
should authorize a general and unlimited
management. (n)

Art. 1878. Special powers of attorney are

necessary in the following cases:

(1) To make such payments as are not

usually considered as acts of
administration;

(2) To effect novations which put an

end to obligations already in existence
at the time the agency was
constituted;

(3) To compromise, to submit

questions to arbitration, to renounce
the right to appeal from a judgment,
to waive objections to the venue of an
action or to abandon a prescription
already acquired;

(4) To waive any obligation

gratuitously;

(5) To enter into any contract by

which the ownership of an immovable
is transmitted or acquired either
gratuitously or for a valuable
consideration;

(6) To make gifts, except customary

ones for charity or those made to
employees in the business managed
by the agent;

(7) To loan or borrow money, unless

the latter act be urgent and
indispensable for the preservation of
the things which are under
administration;

(8) To lease any real property to

another person for more than one
year;

(9) To bind the principal to render

some service without compensation;
 414

(10) To bind the principal in a

contract of partnership;

(11) To obligate the principal as a

guarantor or surety;

(12) To create or convey real rights

over immovable property;

(13) To accept or repudiate an

inheritance;

(14) To ratify or recognize obligations

contracted before the agency;

(15) Any other act of strict dominion.

(n)

Art. 1879. A special power to sell excludes

the power to mortgage; and a special power
to mortgage does not include the power to
sell. (n)

Art. 1880. A special power to compromise

does not authorize submission to arbitration.
(1713a)

Art. 1881. The agent must act within the

scope of his authority. He may do such acts
as may be conducive to the accomplishment
of the purpose of the agency. (1714a)

Art. 1882. The limits of the agent's authority

shall not be considered exceeded should it
have been performed in a manner more
advantageous to the principal than that
specified by him. (1715)

Art. 1883. If an agent acts in his own name,

the principal has no right of action against
the persons with whom the agent has
contracted; neither have such persons
against the principal.

In such case the agent is the one directly

bound in favor of the person with whom he
has contracted, as if the transaction were his
own, except when the contract involves
things belonging to the principal.

The provisions of this article shall be

understood to be without prejudice to the
 415

actions between the principal and agent.

(1717)

CHAPTER 2
OBLIGATIONS OF THE AGENT

Art. 1884. The agent is bound by his

acceptance to carry out the agency, and is
liable for the damages which, through his
non-performance, the principal may suffer.

He must also finish the business already

begun on the death of the principal, should
delay entail any danger. (1718)

Art. 1885. In case a person declines an

agency, he is bound to observe the diligence
of a good father of a family in the custody
and preservation of the goods forwarded to
him by the owner until the latter should
appoint an agent or take charge of the goods.
(n)

Art. 1886. Should there be a stipulation that

the agent shall advance the necessary funds,
he shall be bound to do so except when the
principal is insolvent. (n)

Art. 1887. In the execution of the agency,

the agent shall act in accordance with the
instructions of the principal.

In default thereof, he shall do all that a good

father of a family would do, as required by
the nature of the business. (1719)

Art. 1888. An agent shall not carry out an

agency if its execution would manifestly
result in loss or damage to the principal. (n)

Art. 1889. The agent shall be liable for

damages if, there being a conflict between
his interests and those of the principal, he
should prefer his own. (n)

Art. 1890. If the agent has been empowered

to borrow money, he may himself be the
lender at the current rate of interest. If he has
been authorized to lend money at interest, he
cannot borrow it without the consent of the
principal. (n)
 416

Art. 1891. Every agent is bound to render an

account of his transactions and to deliver to
the principal whatever he may have received
by virtue of the agency, even though it may
not be owing to the principal.

Every stipulation exempting the agent from

the obligation to render an account shall be
void. (1720a)

Art. 1892. The agent may appoint a

substitute if the principal has not prohibited
him from doing so; but he shall be
responsible for the acts of the substitute:

(1) When he was not given the power

to appoint one;

(2) When he was given such power,

but without designating the person,
and the person appointed was
notoriously incompetent or insolvent.

All acts of the substitute appointed against

the prohibition of the principal shall be void.
(1721)

Art. 1893. In the cases mentioned in Nos. 1

and 2 of the preceding article, the principal
may furthermore bring an action against the
substitute with respect to the obligations
which the latter has contracted under the
substitution. (1722a)

Art. 1894. The responsibility of two or more

agents, even though they have been
appointed simultaneously, is not solidary, if
solidarity has not been expressly stipulated.
(1723)

Art. 1895. If solidarity has been agreed

upon, each of the agents is responsible for
the non-fulfillment of agency, and for the
fault or negligence of his fellows agents,
except in the latter case when the fellow
agents acted beyond the scope of their
authority. (n)

Art. 1896. The agent owes interest on the

sums he has applied to his own use from the
day on which he did so, and on those which
 417

he still owes after the extinguishment of the

agency. (1724a)

Art. 1897. The agent who acts as such is not

personally liable to the party with whom he
contracts, unless he expressly binds himself
or exceeds the limits of his authority without
giving such party sufficient notice of his
powers. (1725)

Art. 1898. If the agent contracts in the name

of the principal, exceeding the scope of his
authority, and the principal does not ratify
the contract, it shall be void if the party with
whom the agent contracted is aware of the
limits of the powers granted by the principal.
In this case, however, the agent is liable if he
undertook to secure the principal's
ratification. (n)

Art. 1899. If a duly authorized agent acts in

accordance with the orders of the principal,
the latter cannot set up the ignorance of the
agent as to circumstances whereof he
himself was, or ought to have been, aware.
(n)

Art. 1900. So far as third persons are

concerned, an act is deemed to have been
performed within the scope of the agent's
authority, if such act is within the terms of
the power of attorney, as written, even if the
agent has in fact exceeded the limits of his
authority according to an understanding
between the principal and the agent. (n)

Art. 1901. A third person cannot set up the

fact that the agent has exceeded his powers,
if the principal has ratified, or has signified
his willingness to ratify the agent's acts. (n)

Art. 1902. A third person with whom the

agent wishes to contract on behalf of the
principal may require the presentation of the
power of attorney, or the instructions as
regards the agency. Private or secret orders
and instructions of the principal do not
prejudice third persons who have relied
upon the power of attorney or instructions
shown them. (n)
 418

Art. 1903. The commission agent shall be

responsible for the goods received by him in
the terms and conditions and as described in
the consignment, unless upon receiving
them he should make a written statement of
the damage and deterioration suffered by the
same. (n)

Art. 1904. The commission agent who

handles goods of the same kind and mark,
which belong to different owners, shall
distinguish them by countermarks, and
designate the merchandise respectively
belonging to each principal. (n)

Art. 1905. The commission agent cannot,

without the express or implied consent of
the principal, sell on credit. Should he do so,
the principal may demand from him
payment in cash, but the commission agent
shall be entitled to any interest or benefit,
which may result from such sale. (n)

Art. 1906. Should the commission agent,

with authority of the principal, sell on credit,
he shall so inform the principal, with a
statement of the names of the buyers. Should
he fail to do so, the sale shall be deemed to
have been made for cash insofar as the
principal is concerned. (n)

Art. 1907. Should the commission agent

receive on a sale, in addition to the ordinary
commission, another called a guarantee
commission, he shall bear the risk of
collection and shall pay the principal the
proceeds of the sale on the same terms
agreed upon with the purchaser. (n)

Art. 1908. The commission agent who does

not collect the credits of his principal at the
time when they become due and demandable
shall be liable for damages, unless he proves
that he exercised due diligence for that
purpose. (n)

Art. 1909. The agent is responsible not only

for fraud, but also for negligence, which
shall be judged with more or less rigor by
the courts, according to whether the agency
 419

was or was not for a compensation. (1726)

CHAPTER 3
OBLIGATIONS OF THE PRINCIPAL

Art. 1910. The principal must comply with

all the obligations which the agent may have
contracted within the scope of his authority.

As for any obligation wherein the agent has

exceeded his power, the principal is not
bound except when he ratifies it expressly or
tacitly. (1727)

Art. 1911. Even when the agent has

exceeded his authority, the principal is
solidarily liable with the agent if the former
allowed the latter to act as though he had
full powers. (n)

Art. 1912. The principal must advance to the

agent, should the latter so request, the sums
necessary for the execution of the agency.

Should the agent have advanced them, the

principal must reimburse him therefor, even
if the business or undertaking was not
successful, provided the agent is free from
all fault.

The reimbursement shall include interest on

the sums advanced, from the day on which
the advance was made. (1728)

Art. 1913. The principal must also

indemnify the agent for all the damages
which the execution of the agency may have
caused the latter, without fault or negligence
on his part. (1729)

Art. 1914. The agent may retain in pledge

the things which are the object of the agency
until the principal effects the reimbursement
and pays the indemnity set forth in the two
preceding articles. (1730)

Art. 1915. If two or more persons have

appointed an agent for a common
transaction or undertaking, they shall be
solidarily liable to the agent for all the
consequences of the agency. (1731)
 420

Art. 1916. When two persons contract with

regard to the same thing, one of them with
the agent and the other with the principal,
and the two contracts are incompatible with
each other, that of prior date shall be
preferred, without prejudice to the
provisions of Article 1544. (n)

Art. 1917. In the case referred to in the

preceding article, if the agent has acted in
good faith, the principal shall be liable in
damages to the third person whose contract
must be rejected. If the agent acted in bad
faith, he alone shall be responsible. (n)

Art. 1918. The principal is not liable for the

expenses incurred by the agent in the
following cases:

(1) If the agent acted in contravention

of the principal's instructions, unless
the latter should wish to avail himself
of the benefits derived from the
contract;

(2) When the expenses were due to

the fault of the agent;

(3) When the agent incurred them

with knowledge that an unfavorable
result would ensue, if the principal
was not aware thereof;

(4) When it was stipulated that the

expenses would be borne by the
agent, or that the latter would be
allowed only a certain sum. (n)

CHAPTER 4
MODES OF EXTINGUISHMENT OF
AGENCY

Art. 1919. Agency is extinguished:

(1) By its revocation;

(2) By the withdrawal of the agent;

(3) By the death, civil interdiction,

insanity or insolvency of the principal
or of the agent;
 421

(4) By the dissolution of the firm or

corporation which entrusted or
accepted the agency;

(5) By the accomplishment of the

object or purpose of the agency;

(6) By the expiration of the period for

which the agency was constituted.
(1732a)

Art. 1920. The principal may revoke the

agency at will, and compel the agent to
return the document evidencing the agency.
Such revocation may be express or implied.
(1733a)

Art. 1921. If the agency has been entrusted

for the purpose of contracting with specified
persons, its revocation shall not prejudice
the latter if they were not given notice
thereof. (1734)

Art. 1922. If the agent had general powers,

revocation of the agency does not prejudice
third persons who acted in good faith and
without knowledge of the revocation. Notice
of the revocation in a newspaper of general
circulation is a sufficient warning to third
persons. (n)

Art. 1923. The appointment of a new agent

for the same business or transaction revokes
the previous agency from the day on which
notice thereof was given to the former agent,
without prejudice to the provisions of the
two preceding articles. (1735a)

Art. 1924. The agency is revoked if the

principal directly manages the business
entrusted to the agent, dealing directly with
third persons. (n)

Art. 1925. When two or more principals

have granted a power of attorney for a
common transaction, any one of them may
revoke the same without the consent of the
others. (n)

Art. 1926. A general power of attorney is

revoked by a special one granted to another
 422

agent, as regards the special matter involved

in the latter. (n)

Art. 1927. An agency cannot be revoked if a

bilateral contract depends upon it, or if it is
the means of fulfilling an obligation already
contracted, or if a partner is appointed
manager of a partnership in the contract of
partnership and his removal from the
management is unjustifiable. (n)

Art. 1928. The agent may withdraw from the

agency by giving due notice to the principal.
If the latter should suffer any damage by
reason of the withdrawal, the agent must
indemnify him therefor, unless the agent
should base his withdrawal upon the
impossibility of continuing the performance
of the agency without grave detriment to
himself. (1736a)

Art. 1929. The agent, even if he should

withdraw from the agency for a valid reason,
must continue to act until the principal has
had reasonable opportunity to take the
necessary steps to meet the situation.
(1737a)

Art. 1930. The agency shall remain in full

force and effect even after the death of the
principal, if it has been constituted in the
common interest of the latter and of the
agent, or in the interest of a third person who
has accepted the stipulation in his favor. (n)

Art. 1931. Anything done by the agent,

without knowledge of the death of the
principal or of any other cause which
extinguishes the agency, is valid and shall be
fully effective with respect to third persons
who may have contracted with him in good
faith. (1738)

Art. 1932. If the agent dies, his heirs must

notify the principal thereof, and in the
meantime adopt such measures as the
circumstances may demand in the interest of
the latter. (1739)

Title XI. - LOAN

 423

GENERAL PROVISIONS

Art. 1933. By the contract of loan, one of the

parties delivers to another, either something
not consumable so that the latter may use the
same for a certain time and return it, in
which case the contract is called a
commodatum; or money or other
consumable thing, upon the condition that
the same amount of the same kind and
quality shall be paid, in which case the
contract is simply called a loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a

stipulation to pay interest.

In commodatum the bailor retains the

ownership of the thing loaned, while in
simple loan, ownership passes to the
borrower. (1740a)

Art. 1934. An accepted promise to deliver

something by way of commodatum or
simple loan is binding upon parties, but the
commodatum or simple loan itself shall not
be perfected until the delivery of the object
of the contract. (n)

CHAPTER 1
COMMODATUM

SECTION 1 - Nature of Commodatum

Art. 1935. The bailee in commodatum

acquires the used of the thing loaned but not
its fruits; if any compensation is to be paid
by him who acquires the use, the contract
ceases to be a commodatum. (1941a)

Art. 1936. Consumable goods may be the

subject of commodatum if the purpose of the
contract is not the consumption of the
object, as when it is merely for exhibition.
(n)

Art. 1937. Movable or immovable property

may be the object of commodatum. (n)
 424

Art. 1938. The bailor in commodatum need

not be the owner of the thing loaned. (n)

Art. 1939. Commodatum is purely personal

in character. Consequently:

(1) The death of either the bailor or

the bailee extinguishes the contract;

(2) The bailee can neither lend nor

lease the object of the contract to a
third person. However, the members
of the bailee's household may make
use of the thing loaned, unless there is
a stipulation to the contrary, or unless
the nature of the thing forbids such
use. (n)

Art. 1940. A stipulation that the bailee may

make use of the fruits of the thing loaned is
valid. (n)

SECTION 2. - Obligations of the Bailee

Art. 1941. The bailee is obliged to pay for

the ordinary expenses for the use and
preservation of the thing loaned. (1743a)

Art. 1942. The bailee is liable for the loss of

the thing, even if it should be through a
fortuitous event:

(1) If he devotes the thing to any

purpose different from that for which
it has been loaned;

(2) If he keeps it longer than the

period stipulated, or after the
accomplishment of the use for which
the commodatum has been
constituted;

(3) If the thing loaned has been

delivered with appraisal of its value,
unless there is a stipulation exemption
the bailee from responsibility in case
of a fortuitous event;

(4) If he lends or leases the thing to a

third person, who is not a member of
his household;
 425

(5) If, being able to save either the

thing borrowed or his own thing, he
chose to save the latter. (1744a and
1745)

Art. 1943. The bailee does not answer for

the deterioration of the thing loaned due
only to the use thereof and without his fault.
(1746)

Art. 1944. The bailee cannot retain the thing

loaned on the ground that the bailor owes
him something, even though it may be by
reason of expenses. However, the bailee has
a right of retention for damages mentioned
in Article 1951. (1747a)

Art. 1945. When there are two or more

bailees to whom a thing is loaned in the
same contract, they are liable solidarily.
(1748a)

SECTION 3. - Obligations of the Bailor

Art. 1946. The bailor cannot demand the

return of the thing loaned till after the
expiration of the period stipulated, or after
the accomplishment of the use for which the
commodatum has been constituted.
However, if in the meantime, he should have
urgent need of the thing, he may demand its
return or temporary use.

In case of temporary use by the bailor, the

contract of commodatum is suspended while
the thing is in the possession of the bailor.
(1749a)

Art. 1947. The bailor may demand the thing

at will, and the contractual relation is called
a precarium, in the following cases:

(1) If neither the duration of the

contract nor the use to which the thing
loaned should be devoted, has been
stipulated; or

(2) If the use of the thing is merely

tolerated by the owner. (1750a)
 426

Art. 1948. The bailor may demand the

immediate return of the thing if the bailee
commits any act of ingratitude specified in
Article 765. (n)

Art. 1949. The bailor shall refund the

extraordinary expenses during the contract
for the preservation of the thing loaned,
provided the bailee brings the same to the
knowledge of the bailor before incurring
them, except when they are so urgent that
the reply to the notification cannot be
awaited without danger.

If the extraordinary expenses arise on the

occasion of the actual use of the thing by the
bailee, even though he acted without fault,
they shall be borne equally by both the
bailor and the bailee, unless there is a
stipulation to the contrary. (1751a)

Art. 1950. If, for the purpose of making use

of the thing, the bailee incurs expenses other
than those referred to in Articles 1941 and
1949, he is not entitled to reimbursement.
(n)

Art. 1951. The bailor who, knowing the

flaws of the thing loaned, does not advise
the bailee of the same, shall be liable to the
latter for the damages which he may suffer
by reason thereof. (1752)

Art. 1952. The bailor cannot exempt himself

from the payment of expenses or damages
by abandoning the thing to the bailee. (n)

CHAPTER 2
SIMPLE LOAN OR MUTUUM

Art. 1953. A person who receives a loan of

money or any other fungible thing acquires
the ownership thereof, and is bound to pay
to the creditor an equal amount of the same
kind and quality. (1753a)

Art. 1954. A contract whereby one person

transfers the ownership of non-fungible
things to another with the obligation on the
part of the latter to give things of the same
 427

kind, quantity, and quality shall be

considered a barter. (n)

Art. 1955. The obligation of a person who

borrows money shall be governed by the
provisions of Articles 1249 and 1250 of this
Code.

If what was loaned is a fungible thing other

than money, the debtor owes another thing
of the same kind, quantity and quality, even
if it should change in value. In case it is
impossible to deliver the same kind, its
value at the time of the perfection of the
loan shall be paid. (1754a)

Art. 1956. No interest shall be due unless it

has been expressly stipulated in writing.
(1755a)

Art. 1957. Contracts and stipulations, under

any cloak or device whatever, intended to
circumvent the laws against usury shall be
void. The borrower may recover in
accordance with the laws on usury. (n)

Art. 1958. In the determination of the

interest, if it is payable in kind, its value
shall be appraised at the current price of the
products or goods at the time and place of
payment. (n)

Art. 1959. Without prejudice to the

provisions of Article 2212, interest due and
unpaid shall not earn interest. However, the
contracting parties may by stipulation
capitalize the interest due and unpaid, which
as added principal, shall earn new interest.
(n)

Art. 1960. If the borrower pays interest

when there has been no stipulation therefor,
the provisions of this Code concerning
solutio indebiti, or natural obligations, shall
be applied, as the case may be. (n)

Art. 1961. Usurious contracts shall be

governed by the Usury Law and other
special laws, so far as they are not
inconsistent with this Code. (n)
 428

Title XII. - DEPOSIT

CHAPTER 1
DEPOSIT IN GENERAL AND ITS
DIFFERENT KINDS

Art. 1962. A deposit is constituted from the

moment a person receives a thing belonging
to another, with the obligation of safely
keeping it and of returning the same. If the
safekeeping of the thing delivered is not the
principal purpose of the contract, there is no
deposit but some other contract. (1758a)

Art. 1963. An agreement to constitute a

deposit is binding, but the deposit itself is
not perfected until the delivery of the thing.
(n)

Art. 1964. A deposit may be constituted

judicially or extrajudicially. (1759)

Art. 1965. A deposit is a gratuitous contract,

except when there is an agreement to the
contrary, or unless the depositary is engaged
in the business of storing goods. (1760a)

Art. 1966. Only movable things may be the

object of a deposit. (1761)

Art. 1967. An extrajudicial deposit is either

voluntary or necessary. (1762)

CHAPTER 2
VOLUNTARY DEPOSIT

SECTION 1. - General Provisions

Art. 1968. A voluntary deposit is that

wherein the delivery is made by the will of
the depositor. A deposit may also be made
by two or more persons each of whom
believes himself entitled to the thing
deposited with a third person, who shall
deliver it in a proper case to the one to
whom it belongs. (1763)

Art. 1969. A contract of deposit may be

entered into orally or in writing. (n)
 429

Art. 1970. If a person having capacity to

contract accepts a deposit made by one who
is incapacitated, the former shall be subject
to all the obligations of a depositary, and
may be compelled to return the thing by the
guardian, or administrator, of the person
who made the deposit, or by the latter
himself if he should acquire capacity. (1764)

Art. 1971. If the deposit has been made by a

capacitated person with another who is not,
the depositor shall only have an action to
recover the thing deposited while it is still in
the possession of the depositary, or to
compel the latter to pay him the amount by
which he may have enriched or benefited
himself with the thing or its price. However,
if a third person who acquired the thing
acted in bad faith, the depositor may bring
an action against him for its recovery.
(1765a)

SECTION 2. - Obligations of the Depositary

Art. 1972. The depositary is obliged to keep

the thing safely and to return it, when
required, to the depositor, or to his heirs and
successors, or to the person who may have
been designated in the contract. His
responsibility, with regard to the safekeeping
and the loss of the thing, shall be governed
by the provisions of Title I of this Book.

If the deposit is gratuitous, this fact shall be

taken into account in determining the degree
of care that the depositary must observe.
(1766a)

Art. 1973. Unless there is a stipulation to the

contrary, the depositary cannot deposit the
thing with a third person. If deposit with a
third person is allowed, the depositary is
liable for the loss if he deposited the thing
with a person who is manifestly careless or
unfit. The depositary is responsible for the
negligence of his employees. (n)

Art. 1974. The depositary may change the

way of the deposit if under the
circumstances he may reasonably presume
 430

that the depositor would consent to the

change if he knew of the facts of the
situation. However, before the depositary
may make such change, he shall notify the
depositor thereof and wait for his decision,
unless delay would cause danger. (n)

Art. 1975. The depositary holding

certificates, bonds, securities or instruments
which earn interest shall be bound to collect
the latter when it becomes due, and to take
such steps as may be necessary in order that
the securities may preserve their value and
the rights corresponding to them according
to law.

The above provision shall not apply to

contracts for the rent of safety deposit boxes.
(n)

Art. 1976. Unless there is a stipulation to the

contrary, the depositary may commingle
grain or other articles of the same kind and
quality, in which case the various depositors
shall own or have a proportionate interest in
the mass. (n)

Art. 1977. The depositary cannot make use

of the thing deposited without the express
permission of the depositor.

Otherwise, he shall be liable for damages.

However, when the preservation of the thing

deposited requires its use, it must be used
but only for that purpose. (1767a)

Art. 1978. When the depositary has

permission to use the thing deposited, the
contract loses the concept of a deposit and
becomes a loan or commodatum, except
where safekeeping is still the principal
purpose of the contract.

The permission shall not be presumed, and

its existence must be proved. (1768a)

Art. 1979. The depositary is liable for the

loss of the thing through a fortuitous event:

(1) If it is so stipulated;
 431

(2) If he uses the thing without the

depositor's permission;

(3) If he delays its return;

(4) If he allows others to use it, even

though he himself may have been
authorized to use the same. (n)

Art. 1980. Fixed, savings, and current

deposits of money in banks and similar
institutions shall be governed by the
provisions concerning simple loan. (n)

Art. 1981. When the thing deposited is

delivered closed and sealed, the depositary
must return it in the same condition, and he
shall be liable for damages should the seal or
lock be broken through his fault.

Fault on the part of the depositary is

presumed, unless there is proof to the
contrary.

As regards the value of the thing deposited,

the statement of the depositor shall be
accepted, when the forcible opening is
imputable to the depositary, should there be
no proof to the contrary. However, the courts
may pass upon the credibility of the
depositor with respect to the value claimed
by him.

When the seal or lock is broken, with or

without the depositary's fault, he shall keep
the secret of the deposit. (1769a)

Art. 1982. When it becomes necessary to

open a locked box or receptacle, the
depositary is presumed authorized to do so,
if the key has been delivered to him; or
when the instructions of the depositor as
regards the deposit cannot be executed
without opening the box or receptacle. (n)

Art. 1983. The thing deposited shall be

returned with all its products, accessories
and accessions.

Should the deposit consist of money, the

provisions relative to agents in article 1896
shall be applied to the depositary. (1770)
 432

Art. 1984. The depositary cannot demand

that the depositor prove his ownership of the
thing deposited.

Nevertheless, should he discover that the

thing has been stolen and who its true owner
is, he must advise the latter of the deposit.

If the owner, in spite of such information,

does not claim it within the period of one
month, the depositary shall be relieved of all
responsibility by returning the thing
deposited to the depositor.

If the depositary has reasonable grounds to

believe that the thing has not been lawfully
acquired by the depositor, the former may
return the same. (1771a)

Art. 1985. When there are two or more

depositors, if they are not solidary, and the
thing admits of division, each one cannot
demand more than his share.

When there is solidarity or the thing does

not admit of division, the provisions of
Articles 1212 and 1214 shall govern.
However, if there is a stipulation that the
thing should be returned to one of the
depositors, the depositary shall return it only
to the person designated. (1772a)

Art. 1986. If the depositor should lose his

capacity to contract after having made the
deposit, the thing cannot be returned except
to the persons who may have the
administration of his property and rights.
(1773)

Art. 1987. If at the time the deposit was

made a place was designated for the return
of the thing, the depositary must take the
thing deposited to such place; but the
expenses for transportation shall be borne by
the depositor.

If no place has been designated for the

return, it shall be made where the thing
deposited may be, even if it should not be
the same place where the deposit was made,
provided that there was no malice on the
part of the depositary. (1774)
 433

Art. 1988. The thing deposited must be

returned to the depositor upon demand, even
though a specified period or time for such
return may have been fixed.

This provision shall not apply when the

thing is judicially attached while in the
depositary's possession, or should he have
been notified of the opposition of a third
person to the return or the removal of the
thing deposited. In these cases, the
depositary must immediately inform the
depositor of the attachment or opposition.
(1775)

Art. 1989. Unless the deposit is for a

valuable consideration, the depositary who
may have justifiable reasons for not keeping
the thing deposited may, even before the
time designated, return it to the depositor;
and if the latter should refuse to receive it,
the depositary may secure its consignation
from the court. (1776a)

Art. 1990. If the depositary by force majeure

or government order loses the thing and
receives money or another thing in its place,
he shall deliver the sum or other thing to the
depositor. (1777a)

Art. 1991. The depositor's heir who in good

faith may have sold the thing which he did
not know was deposited, shall only be bound
to return the price he may have received or
to assign his right of action against the buyer
in case the price has not been paid him.
(1778)

SECTION 3. - Obligations of the Depositor

Art. 1992. If the deposit is gratuitous, the

depositor is obliged to reimburse the
depositary for the expenses he may have
incurred for the preservation of the thing
deposited. (1779a)

Art. 1993. The depositor shall reimburse the

depositary for any loss arising from the
character of the thing deposited, unless at
the time of the constitution of the deposit the
 434

former was not aware of, or was not

expected to know the dangerous character of
the thing, or unless he notified the
depositary of the same, or the latter was
aware of it without advice from the
depositor. (n)

Art. 1994. The depositary may retain the

thing in pledge until the full payment of
what may be due him by reason of the
deposit. (1780)

Art. 1995. A deposit its extinguished:

(1) Upon the loss or destruction of the

thing deposited;

(2) In case of a gratuitous deposit,

upon the death of either the depositor
or the depositary. (n)

CHAPTER 3
NECESSARY DEPOSIT

Art. 1996. A deposit is necessary:

(1) When it is made in compliance
with a legal obligation;

(2) When it takes place on the

occasion of any calamity, such as fire,
storm, flood, pillage, shipwreck, or
other similar events. (1781a)

Art. 1997. The deposit referred to in No. 1

of the preceding article shall be governed by
the provisions of the law establishing it, and
in case of its deficiency, by the rules on
voluntary deposit.

The deposit mentioned in No. 2 of the

preceding article shall be regulated by the
provisions concerning voluntary deposit and
by Article 2168. (1782)

Art. 1998. The deposit of effects made by

the travellers in hotels or inns shall also be
regarded as necessary. The keepers of hotels
or inns shall be responsible for them as
depositaries, provided that notice was given
to them, or to their employees, of the effects
brought by the guests and that, on the part of
the latter, they take the precautions which
 435

said hotel-keepers or their substitutes

advised relative to the care and vigilance of
their effects. (1783)

Art. 1999. The hotel-keeper is liable for the

vehicles, animals and articles which have
been introduced or placed in the annexes of
the hotel. (n)

Art. 2000. The responsibility referred to in

the two preceding articles shall include the
loss of, or injury to the personal property of
the guests caused by the servants or
employees of the keepers of hotels or inns as
well as strangers; but not that which may
proceed from any force majeure. The fact
that travellers are constrained to rely on the
vigilance of the keeper of the hotels or inns
shall be considered in determining the
degree of care required of him. (1784a)

Art. 2001. The act of a thief or robber, who

has entered the hotel is not deemed force
majeure, unless it is done with the use of
arms or through an irresistible force. (n)

Art. 2002. The hotel-keeper is not liable for

compensation if the loss is due to the acts of
the guest, his family, servants or visitors, or
if the loss arises from the character of the
things brought into the hotel. (n)

Art. 2003. The hotel-keeper cannot free

himself from responsibility by posting
notices to the effect that he is not liable for
the articles brought by the guest. Any
stipulation between the hotel-keeper and the
guest whereby the responsibility of the
former as set forth in articles 1998 to 2001 is
suppressed or diminished shall be void. (n)

Art. 2004. The hotel-keeper has a right to

retain the things brought into the hotel by
the guest, as a security for credits on account
of lodging, and supplies usually furnished to
hotel guests. (n)

CHAPTER 4
SEQUESTRATION OR JUDICIAL
DEPOSIT
 436

Art. 2005. A judicial deposit or sequestration

takes place when an attachment or seizure of
property in litigation is ordered. (1785)

Art. 2006. Movable as well as immovable

property may be the object of sequestration.
(1786)

Art. 2007. The depositary of property or

objects sequestrated cannot be relieved of
his responsibility until the controversy
which gave rise thereto has come to an end,
unless the court so orders. (1787a)

Art. 2008. The depositary of property

sequestrated is bound to comply, with
respect to the same, with all the obligations
of a good father of a family. (1788)

Art. 2009. As to matters not provided for in

this Code, judicial sequestration shall be
governed by the Rules of Court. (1789)

Title XIII. - ALEATORY CONTRACTS

GENERAL PROVISIONS

Art. 2010. By an aleatory contract, one of

the parties or both reciprocally bind
themselves to give or to do something in
consideration of what the other shall give or
do upon the happening of an event which is
uncertain, or which is to occur at an
indeterminate time. (1790)

CHAPTER 1
INSURANCE

Art. 2011. The contract of insurance is

governed by special laws. Matters not
expressly provided for in such special laws
shall be regulated by this Code. (n)

Art. 2012. Any person who is forbidden

from receiving any donation under Article
739 cannot be named beneficiary of a life
insurance policy by the person who cannot
make any donation to him, according to said
 437

article. (n)

CHAPTER 2
GAMBLING

Art. 2013. A game of chance is that which

depends more on chance or hazard than or
skill or ability. For the purposes of the
following articles, in case of doubt a game is
deemed to be one of chance. (n)

Art. 2014. No action can be maintained by

the winner for the collection of what he has
won in a game of chance. But any loser in a
game of chance may recover his loss from
the winner, with legal interest from the time
he paid the amount lost, and subsidiarily
from the operator or manager of the
gambling house. (1799a)

Art. 2015. If cheating or deceit is committed

by the winner, he, and subsidiarily the
operator or manager of the gambling house,
shall pay by way of exemplary damages, not
less than the equivalent of the sum lost, in
addition to the latter amount. If both the
winner and the loser have perpetrated fraud,
no action for recovery can be brought by
either. (n)

Art. 2016. If the loser refuses or neglects to

bring an action to recover what has been
lost, his or her creditors, spouse,
descendants or other persons entitled to be
supported by the loser may institute the
action. The sum thereby obtained shall be
applied to the creditors' claims, or to the
support of the spouse or relatives, as the
case may be. (n)

Art. 2017. The provisions of Article 2014

and 2016 apply when two or more persons
bet in a game of chance, although they take
no active part in the game itself. (1799a)

Art. 2018. If a contract which purports to be

for the delivery of goods, securities or shares
of stock is entered into with the intention
that the difference between the price
stipulated and the exchange or market price
 438

at the time of the pretended delivery shall be

paid by the loser to the winner, the
transaction is null and void. The loser may
recover what he has paid. (n)

Art. 2019. Betting on the result of sports,

athletic competitions, or games of skill may
be prohibited by local ordinances. (n)

Art. 2020. The loser in any game which is

not one of chance, when there is no local
ordinance which prohibits betting therein, is
under obligation to pay his loss, unless the
amount thereof is excessive under the
circumstances. In the latter case, the court
shall reduce the loss to the proper sum.
(1801a)

CHAPTER 3
LIFE ANNUITY

Art. 2021. The aleatory contract of life

annuity binds the debtor to pay an annual
pension or income during the life of one or
more determinate persons in consideration
of a capital consisting of money or other
property, whose ownership is transferred to
him at once with the burden of the income.
(1802a)

Art. 2022. The annuity may be constituted

upon the life of the person who gives the
capital, upon that of a third person, or upon
the lives of various persons, all of whom
must be living at the time the annuity is
established.

It may also be constituted in favor of the

person or persons upon whose life or lives
the contract is entered into, or in favor of
another or other persons. (1803)

Art. 2023. Life annuity shall be void if

constituted upon the life of a person who
was already dead at the time the contract
was entered into, or who was at that time
suffering from an illness which caused his
death within twenty days following said
date. (1804)
 439

Art. 2024. The lack of payment of the

income due does not authorize the recipient
of the life annuity to demand the
reimbursement of the capital or to retake
possession of the property alienated, unless
there is a stipulation to the contrary; he shall
have only a right judicially to claim the
payment of the income in arrears and to
require a security for the future income,
unless there is a stipulation to the contrary.
(1805a)

Art. 2025. The income corresponding to the

year in which the person enjoying it dies
shall be paid in proportion to the days during
which he lived; if the income should be paid
by installments in advance, the whole
amount of the installment which began to
run during his life shall be paid. (1806)

Art. 2026. He who constitutes an annuity by

gratuitous title upon his property, may
provide at the time the annuity is established
that the same shall not be subject to
execution or attachment on account of the
obligations of the recipient of the annuity. If
the annuity was constituted in fraud of
creditors, the latter may ask for the
execution or attachment of the property.
(1807a)

Art. 2027. No annuity shall be claimed

without first proving the existence of the
person upon whose life the annuity is
constituted. (1808)

Title XIV. - COMPROMISES AND

ARBITRATIONS

CHAPTER 1
COMPROMISES

Art. 2028. A compromise is a contract

whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end
to one already commenced. (1809a)

Art. 2029. The court shall endeavor to

persuade the litigants in a civil case to agree
upon some fair compromise. (n)
 440

Art. 2030. Every civil action or proceeding

shall be suspended:

(1) If willingness to discuss a possible

compromise is expressed by one or
both parties; or

(2) If it appears that one of the parties,

before the commencement of the
action or proceeding, offered to
discuss a possible compromise but the
other party refused the offer.

The duration and terms of the suspension of

the civil action or proceeding and similar
matters shall be governed by such provisions
of the rules of court as the Supreme Court
shall promulgate. Said rules of court shall
likewise provide for the appointment and
duties of amicable compounders. (n)

Art. 2031. The courts may mitigate the

damages to be paid by the losing party who
has shown a sincere desire for a
compromise. (n)

Art. 2032. The court's approval is necessary

in compromises entered into by guardians,
parents, absentee's representatives, and
administrators or executors of decedent's
estates. (1810a)

Art. 2033. Juridical persons may

compromise only in the form and with the
requisites which may be necessary to
alienate their property. (1812a)

Art. 2034. There may be a compromise upon

the civil liability arising from an offense; but
such compromise shall not extinguish the
public action for the imposition of the legal
penalty. (1813)

Art. 2035. No compromise upon the

following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a

legal separation;

(3) Any ground for legal separation;

 441

(4) Future support;

(5) The jurisdiction of courts;

(6) Future legitime. (1814a)

Art. 2036. A compromise comprises only

those objects which are definitely stated
therein, or which by necessary implication
from its terms should be deemed to have
been included in the same.

A general renunciation of rights is

understood to refer only to those that are
connected with the dispute which was the
subject of the compromise. (1815)

Art. 2037. A compromise has upon the

parties the effect and authority of res
judicata; but there shall be no execution
except in compliance with a judicial
compromise. (1816)

Art. 2038. A compromise in which there is

mistake, fraud, violence, intimidation, undue
influence, or falsity of documents, is subject
to the provisions of Article 1330 of this
Code.

However, one of parties cannot set up a

mistake of fact as against the other if the
latter, by virtue of the compromise, has
withdrawn from a litigation already
commenced. (1817a)

Art. 2039. When the parties compromise

generally on all differences which they
might have with each other, the discovery of
documents referring to one or more but not
to all of the questions settled shall not itself
be a cause for annulment or rescission of the
compromise, unless said documents have
been concealed by one of the parties.

But the compromise may be annulled or

rescinded if it refers only to one thing to
which one of the parties has no right, as
shown by the newly-discovered documents.
(n)

Art. 2040. If after a litigation has been

decided by a final judgment, a compromise
 442

should be agreed upon, either or both parties

being unaware of the existence of the final
judgment, the compromise may be
rescinded.

Ignorance of a judgment which may be

revoked or set aside is not a valid ground for
attacking a compromise. (1819a)

Art. 2041. If one of the parties fails or

refuses to abide by the compromise, the
other party may either enforce the
compromise or regard it as rescinded and
insist upon his original demand. (n)

CHAPTER 2
ARBITRATIONS

Art. 2042. The same persons who may enter

into a compromise may submit their
controversies to one or more arbitrators for
decision. (1820a)

Art. 2043. The provisions of the preceding

Chapter upon compromises shall also be
applicable to arbitrations. (1821a)

Art. 2044. Any stipulation that the

arbitrators' award or decision shall be final,
is valid, without prejudice to Articles 2038,
2039, and 2040. (n)

Art. 2045. Any clause giving one of the

parties power to choose more arbitrators
than the other is void and of no effect. (n)

Art. 2046. The appointment of arbitrators

and the procedure for arbitration shall be
governed by the provisions of such rules of
court as the Supreme Court shall
promulgate. (n)

Title XV. - GUARANTY

CHAPTER 1
NATURE AND EXTENT OF GUARANTY

Art. 2047. By guaranty a person, called the

guarantor, binds himself to the creditor to
 443

fulfill the obligation of the principal debtor

in case the latter should fail to do so.

If a person binds himself solidarily with the

principal debtor, the provisions of Section 4,
Chapter 3, Title I of this Book shall be
observed. In such case the contract is called
a suretyship. (1822a)

Art. 2048. A guaranty is gratuitous, unless

there is a stipulation to the contrary. (n)

Art. 2049. A married woman may guarantee

an obligation without the husband's consent,
but shall not thereby bind the conjugal
partnership, except in cases provided by law.
(n)

Art. 2050. If a guaranty is entered into

without the knowledge or consent, or against
the will of the principal debtor, the
provisions of Articles 1236 and 1237 shall
apply. (n)

Art. 2051. A guaranty may be conventional,

legal or judicial, gratuitous, or by onerous
title.

It may also be constituted, not only in favor

of the principal debtor, but also in favor of
the other guarantor, with the latter's consent,
or without his knowledge, or even over his
objection. (1823)

Art. 2052. A guaranty cannot exist without a

valid obligation.

Nevertheless, a guaranty may be constituted

to guarantee the performance of a voidable
or an unenforceable contract. It may also
guarantee a natural obligation. (1824a)

Art. 2053. A guaranty may also be given as

security for future debts, the amount of
which is not yet known; there can be no
claim against the guarantor until the debt is
liquidated. A conditional obligation may
also be secured. (1825a)

Art. 2054. A guarantor may bind himself for

less, but not for more than the principal
 444

debtor, both as regards the amount and the

onerous nature of the conditions.

Should he have bound himself for more, his

obligations shall be reduced to the limits of
that of the debtor. (1826)

Art. 2055. A guaranty is not presumed; it

must be express and cannot extend to more
than what is stipulated therein.

If it be simple or indefinite, it shall

compromise not only the principal
obligation, but also all its accessories,
including the judicial costs, provided with
respect to the latter, that the guarantor shall
only be liable for those costs incurred after
he has been judicially required to pay.
(1827a)

Art. 2056. One who is obliged to furnish a

guarantor shall present a person who
possesses integrity, capacity to bind himself,
and sufficient property to answer for the
obligation which he guarantees. The
guarantor shall be subject to the jurisdiction
of the court of the place where this
obligation is to be complied with. (1828a)

Art. 2057. If the guarantor should be

convicted in first instance of a crime
involving dishonesty or should become
insolvent, the creditor may demand another
who has all the qualifications required in the
preceding article. The case is excepted
where the creditor has required and
stipulated that a specified person should be
the guarantor. (1829a)

CHAPTER 2
EFFECTS OF GUARANTY

SECTION 1. - Effects of Guaranty

Between the Guarantor and the Creditor

Art. 2058. The guarantor cannot be

compelled to pay the creditor unless the
latter has exhausted all the property of the
debtor, and has resorted to all the legal
remedies against the debtor. (1830a)
 445

Art. 2059. The excussion shall not take

place:

(1) If the guarantor has expressly

renounced it;

(2) If he has bound himself solidarily

with the debtor;

(3) In case of insolvency of the

debtor;

(4) When he has absconded, or cannot

be sued within the Philippines unless
he has left a manager or
representative;

(5) If it may be presumed that an

execution on the property of the
principal debtor would not result in
the satisfaction of the obligation.
(1831a)

Art. 2060. In order that the guarantor may

make use of the benefit of exclusion, he
must set it up against the creditor upon the
latter's demand for payment from him, and
point out to the creditor available property
of the debtor within Philippine territory,
sufficient to cover the amount of the debt.
(1832)

Art. 2061. The guarantor having fulfilled all

the conditions required in the preceding
article, the creditor who is negligent in
exhausting the property pointed out shall
suffer the loss, to the extent of said property,
for the insolvency of the debtor resulting
from such negligence. (1833a)

Art. 2062. In every action by the creditor,

which must be against the principal debtor
alone, except in the cases mentioned in
Article 2059, the former shall ask the court
to notify the guarantor of the action. The
guarantor may appear so that he may, if he
so desire, set up such defenses as are granted
him by law. The benefit of excussion
mentioned in Article 2058 shall always be
unimpaired, even if judgment should be
rendered against the principal debtor and the
 446

guarantor in case of appearance by the latter.

(1834a)

Art. 2063. A compromise between the

creditor and the principal debtor benefits the
guarantor but does not prejudice him. That
which is entered into between the guarantor
and the creditor benefits but does not
prejudice the principal debtor. (1835a)

Art. 2064. The guarantor of a guarantor shall

enjoy the benefit of excussion, both with
respect to the guarantor and to the principal
debtor. (1836)

Art. 2065. Should there be several

guarantors of only one debtor and for the
same debt, the obligation to answer for the
same is divided among all. The creditor
cannot claim from the guarantors except the
shares which they are respectively bound to
pay, unless solidarity has been expressly
stipulated.

The benefit of division against the co-

guarantors ceases in the same cases and for
the same reasons as the benefit of excussion
against the principal debtor. (1837)

SECTION 2. - Effects of Guaranty

Between the Debtor and the Guarantor

Art. 2066. The guarantor who pays for a

debtor must be indemnified by the latter.

The indemnity comprises:

(1) The total amount of the debt;

(2) The legal interests thereon from

the time the payment was made
known to the debtor, even though it
did not earn interest for the creditor;

(3) The expenses incurred by the

guarantor after having notified the
debtor that payment had been
demanded of him;

(4) Damages, if they are due. (1838a)

 447

Art. 2067. The guarantor who pays is

subrogated by virtue thereof to all the rights
which the creditor had against the debtor.

If the guarantor has compromised with the

creditor, he cannot demand of the debtor
more than what he has really paid. (1839)

Art. 2068. If the guarantor should pay

without notifying the debtor, the latter may
enforce against him all the defenses which
he could have set up against the creditor at
the time the payment was made. (1840)

Art. 2069. If the debt was for a period and

the guarantor paid it before it became due,
he cannot demand reimbursement of the
debtor until the expiration of the period
unless the payment has been ratified by the
debtor. (1841a)

Art. 2070. If the guarantor has paid without

notifying the debtor, and the latter not being
aware of the payment, repeats the payment,
the former has no remedy whatever against
the debtor, but only against the creditor.
Nevertheless, in case of a gratuitous
guaranty, if the guarantor was prevented by
a fortuitous event from advising the debtor
of the payment, and the creditor becomes
insolvent, the debtor shall reimburse the
guarantor for the amount paid. (1842a)

Art. 2071. The guarantor, even before

having paid, may proceed against the
principal debtor:

(1) When he is sued for the payment;

(2) In case of insolvency of the

principal debtor;

(3) When the debtor has bound

himself to relieve him from the
guaranty within a specified period,
and this period has expired;

(4) When the debt has become

demandable, by reason of the
expiration of the period for payment;
 448

(5) After the lapse of ten years, when

the principal obligation has no fixed
period for its maturity, unless it be of
such nature that it cannot be
extinguished except within a period
longer than ten years;

(6) If there are reasonable grounds to

fear that the principal debtor intends
to abscond;

(7) If the principal debtor is in

imminent danger of becoming
insolvent.

In all these cases, the action of the guarantor

is to obtain release from the guaranty, or to
demand a security that shall protect him
from any proceedings by the creditor and
from the danger of insolvency of the debtor.
(1834a)

Art. 2072. If one, at the request of another,

becomes a guarantor for the debt of a third
person who is not present, the guarantor who
satisfies the debt may sue either the person
so requesting or the debtor for
reimbursement. (n)

SECTION 3. - Effects of Guaranty as

Between Co-Guarantors

Art. 2073. When there are two or more

guarantors of the same debtor and for the
same debt, the one among them who has
paid may demand of each of the others the
share which is proportionally owing from
him.

If any of the guarantors should be insolvent,

his share shall be borne by the others,
including the payer, in the same proportion.

The provisions of this article shall not be

applicable, unless the payment has been
made by virtue of a judicial demand or
unless the principal debtor is insolvent.
(1844a)

Art. 2074. In the case of the preceding

article, the co-guarantors may set up against
 449

the one who paid, the same defenses which

would have pertained to the principal debtor
against the creditor, and which are not
purely personal to the debtor. (1845)

Art. 2075. A sub-guarantor, in case of the

insolvency of the guarantor for whom he
bound himself, is responsible to the co-
guarantors in the same terms as the
guarantor. (1846)

CHAPTER 3
EXTINGUISHMENT OF GUARANTY

Art. 2076. The obligation of the guarantor is

extinguished at the same time as that of the
debtor, and for the same causes as all other
obligations. (1847)

Art. 2077. If the creditor voluntarily accepts

immovable or other property in payment of
the debt, even if he should afterwards lose
the same through eviction, the guarantor is
released. (1849)

Art. 2078. A release made by the creditor in

favor of one of the guarantors, without the
consent of the others, benefits all to the
extent of the share of the guarantor to whom
it has been granted. (1850)

Art. 2079. An extension granted to the

debtor by the creditor without the consent of
the guarantor extinguishes the guaranty. The
mere failure on the part of the creditor to
demand payment after the debt has become
due does not of itself constitute any
extention of time referred to herein. (1851a)

Art. 2080. The guarantors, even though they

be solidary, are released from their
obligation whenever by some act of the
creditor they cannot be subrogated to the
rights, mortgages, and preference of the
latter. (1852)

Art. 2081. The guarantor may set up against

the creditor all the defenses which pertain to
the principal debtor and are inherent in the
debt; but not those that are personal to the
 450

debtor. (1853)

CHAPTER 4
LEGAL AND JUDICIAL BONDS

Art. 2082. The bondsman who is to be

offered in virtue of a provision of law or of a
judicial order shall have the qualifications
prescribed in Article 2056 and in special
laws. (1854a)

Art. 2083. If the person bound to give a

bond in the cases of the preceding article,
should not be able to do so, a pledge or
mortgage considered sufficient to cover his
obligation shall be admitted in lieu thereof.
(1855)

Art. 2084. A judicial bondsman cannot

demand the exhaustion of the property of the
principal debtor.

A sub-surety in the same case, cannot

demand the exhaustion of the property of the
debtor of the surety.

Title XVI. - PLEDGE, MORTGAGE AND

ANTICHRESIS

CHAPTER 1
PROVISIONS COMMON TO PLEDGE
AND MORTGAGE

Art. 2085. The following requisites are

essential to the contracts of pledge and
mortgage:
(1) That they be constituted to secure
the fulfillment of a principal
obligation;

(2) That the pledgor or mortgagor be

the absolute owner of the thing
pledged or mortgaged;

(3) That the persons constituting the

pledge or mortgage have the free
disposal of their property, and in the
absence thereof, that they be legally
authorized for the purpose.
 451

Third persons who are not parties to the

principal obligation may secure the latter by
pledging or mortgaging their own property.
(1857)

Art. 2086. The provisions of Article 2052

are applicable to a pledge or mortgage. (n)

Art. 2087. It is also of the essence of these

contracts that when the principal obligation
becomes due, the things in which the pledge
or mortgage consists may be alienated for
the payment to the creditor. (1858)

Art. 2088. The creditor cannot appropriate

the things given by way of pledge or
mortgage, or dispose of them. Any
stipulation to the contrary is null and void.
(1859a)

Art. 2089. A pledge or mortgage is

indivisible, even though the debt may be
divided among the successors in interest of
the debtor or of the creditor.

Therefore, the debtor's heir who has paid a

part of the debt cannot ask for the
proportionate extinguishment of the pledge
or mortgage as long as the debt is not
completely satisfied.

Neither can the creditor's heir who received

his share of the debt return the pledge or
cancel the mortgage, to the prejudice of the
other heirs who have not been paid.

From these provisions is expected the case

in which, there being several things given in
mortgage or pledge, each one of them
guarantees only a determinate portion of the
credit.

The debtor, in this case, shall have a right to

the extinguishment of the pledge or
mortgage as the portion of the debt for
which each thing is specially answerable is
satisfied. (1860)

Art. 2090. The indivisibility of a pledge or

mortgage is not affected by the fact that the
debtors are not solidarily liable. (n)
 452

Art. 2091. The contract of pledge or

mortgage may secure all kinds of
obligations, be they pure or subject to a
suspensive or resolutory condition. (1861)

Art. 2092. A promise to constitute a pledge

or mortgage gives rise only to a personal
action between the contracting parties,
without prejudice to the criminal
responsibility incurred by him who defrauds
another, by offering in pledge or mortgage
as unencumbered, things which he knew
were subject to some burden, or by
misrepresenting himself to be the owner of
the same. (1862)

CHAPTER 2
PLEDGE

Art. 2093. In addition to the requisites

prescribed in Article 2085, it is necessary, in
order to constitute the contract of pledge,
that the thing pledged be placed in the
possession of the creditor, or of a third
person by common agreement. (1863)

Art. 2094. All movables which are within

commerce may be pledged, provided they
are susceptible of possession. (1864)

Art. 2095. Incorporeal rights, evidenced by

negotiable instruments, bills of lading,
shares of stock, bonds, warehouse receipts
and similar documents may also be pledged.
The instrument proving the right pledged
shall be delivered to the creditor, and if
negotiable, must be indorsed. (n)

Art. 2096. A pledge shall not take effect

against third persons if a description of the
thing pledged and the date of the pledge do
not appear in a public instrument. (1865a)

Art. 2097. With the consent of the pledgee,

the thing pledged may be alienated by the
pledgor or owner, subject to the pledge. The
ownership of the thing pledged is
transmitted to the vendee or transferee as
soon as the pledgee consents to the
 453

alienation, but the latter shall continue in

possession. (n)

Art. 2098. The contract of pledge gives a

right to the creditor to retain the thing in his
possession or in that of a third person to
whom it has been delivered, until the debt is
paid. (1866a)

Art. 2099. The creditor shall take care of the

thing pledged with the diligence of a good
father of a family; he has a right to the
reimbursement of the expenses made for its
preservation, and is liable for its loss or
deterioration, in conformity with the
provisions of this Code. (1867)

Art. 2100. The pledgee cannot deposit the

thing pledged with a third person, unless
there is a stipulation authorizing him to do
so.

The pledgee is responsible for the acts of his

agents or employees with respect to the
thing pledged. (n)

Art. 2101. The pledgor has the same

responsibility as a bailor in commodatum in
the case under Article 1951. (n)

Art. 2102. If the pledge earns or produces

fruits, income, dividends, or interests, the
creditor shall compensate what he receives
with those which are owing him; but if none
are owing him, or insofar as the amount may
exceed that which is due, he shall apply it to
the principal. Unless there is a stipulation to
the contrary, the pledge shall extend to the
interest and earnings of the right pledged.

In case of a pledge of animals, their

offspring shall pertain to the pledgor or
owner of animals pledged, but shall be
subject to the pledge, if there is no
stipulation to the contrary. (1868a)

Art. 2103. Unless the thing pledged is

expropriated, the debtor continues to be the
owner thereof.

Nevertheless, the creditor may bring the

actions which pertain to the owner of the
 454

thing pledged in order to recover it from, or

defend it against a third person. (1869)

Art. 2104. The creditor cannot use the thing

pledged, without the authority of the owner,
and if he should do so, or should misuse the
thing in any other way, the owner may ask
that it be judicially or extrajudicially
deposited. When the preservation of the
thing pledged requires its use, it must be
used by the creditor but only for that
purpose. (1870a)

Art. 2105. The debtor cannot ask for the

return of the thing pledged against the will
of the creditor, unless and until he has paid
the debt and its interest, with expenses in a
proper case. (1871)

Art. 2106. If through the negligence or

wilful act of the pledgee, the thing pledged
is in danger of being lost or impaired, the
pledgor may require that it be deposited with
a third person. (n)

Art. 2107. If there are reasonable grounds to

fear the destruction or impairment of the
thing pledged, without the fault of the
pledgee, the pledgor may demand the return
of the thing, upon offering another thing in
pledge, provided the latter is of the same
kind as the former and not of inferior
quality, and without prejudice to the right of
the pledgee under the provisions of the
following article.

The pledgee is bound to advise the pledgor,

without delay, of any danger to the thing
pledged. (n)

Art. 2108. If, without the fault of the

pledgee, there is danger of destruction,
impairment, or diminution in value of the
thing pledged, he may cause the same to be
sold at a public sale. The proceeds of the
auction shall be a security for the principal
obligation in the same manner as the thing
originally pledged. (n)

Art. 2109. If the creditor is deceived on the

substance or quality of the thing pledged, he
 455

may either claim another thing in its stead,

or demand immediate payment of the
principal obligation. (n)

Art. 2110. If the thing pledged is returned by

the pledgee to the pledgor or owner, the
pledge is extinguished. Any stipulation to
the contrary shall be void.

If subsequent to the perfection of the pledge,

the thing is in the possession of the pledgor
or owner, there is a prima facie presumption
that the same has been returned by the
pledgee. This same presumption exists if the
thing pledged is in the possession of a third
person who has received it from the pledgor
or owner after the constitution of the pledge.
(n)

Art. 2111. A statement in writing by the

pledgee that he renounces or abandons the
pledge is sufficient to extinguish the pledge.
For this purpose, neither the acceptance by
the pledgor or owner, nor the return of the
thing pledged is necessary, the pledgee
becoming a depositary. (n)

Art. 2112. The creditor to whom the credit

has not been satisfied in due time, may
proceed before a Notary Public to the sale of
the thing pledged. This sale shall be made at
a public auction, and with notification to the
debtor and the owner of the thing pledged in
a proper case, stating the amount for which
the public sale is to be held. If at the first
auction the thing is not sold, a second one
with the same formalities shall be held; and
if at the second auction there is no sale
either, the creditor may appropriate the thing
pledged. In this case he shall be obliged to
give an acquittance for his entire claim.
(1872a)

Art. 2113. At the public auction, the pledgor

or owner may bid. He shall, moreover, have
a better right if he should offer the same
terms as the highest bidder.

The pledgee may also bid, but his offer shall

not be valid if he is the only bidder. (n)
 456

Art. 2114. All bids at the public auction shall

offer to pay the purchase price at once. If
any other bid is accepted, the pledgee is
deemed to have been received the purchase
price, as far as the pledgor or owner is
concerned. (n)

Art. 2115. The sale of the thing pledged

shall extinguish the principal obligation,
whether or not the proceeds of the sale are
equal to the amount of the principal
obligation, interest and expenses in a proper
case. If the price of the sale is more than
said amount, the debtor shall not be entitled
to the excess, unless it is otherwise agreed.
If the price of the sale is less, neither shall
the creditor be entitled to recover the
deficiency, notwithstanding any stipulation
to the contrary. (n)

Art. 2116. After the public auction, the

pledgee shall promptly advise the pledgor or
owner of the result thereof. (n)

Art. 2117. Any third person who has any

right in or to the thing pledged may satisfy
the principal obligation as soon as the latter
becomes due and demandable.(n)

Art. 2118. If a credit which has been

pledged becomes due before it is redeemed,
the pledgee may collect and receive the
amount due. He shall apply the same to the
payment of his claim, and deliver the
surplus, should there be any, to the pledgor.
(n)

Art. 2119. If two or more things are pledged,

the pledgee may choose which he will cause
to be sold, unless there is a stipulation to the
contrary. He may demand the sale of only as
many of the things as are necessary for the
payment of the debt. (n)

Art. 2120. If a third party secures an

obligation by pledging his own movable
property under the provisions of Article
2085 he shall have the same rights as a
guarantor under Articles 2066 to 2070, and
Articles 2077 to 2081. He is not prejudiced
 457

by any waiver of defense by the principal

obligor. (n)

Art. 2121. Pledges created by operation of

law, such as those referred to in Articles 546,
1731, and 1994, are governed by the
foregoing articles on the possession, care
and sale of the thing as well as on the
termination of the pledge. However, after
payment of the debt and expenses, the
remainder of the price of the sale shall be
delivered to the obligor. (n)

Art. 2122. A thing under a pledge by

operation of law may be sold only after
demand of the amount for which the thing is
retained. The public auction shall take place
within one month after such demand. If,
without just grounds, the creditor does not
cause the public sale to be held within such
period, the debtor may require the return of
the thing. (n)

Art. 2123. With regard to pawnshops and

other establishments, which are engaged in
making loans secured by pledges, the special
laws and regulations concerning them shall
be observed, and subsidiarily, the provisions
of this Title. (1873a)

CHAPTER 3
MORTGAGE

Art. 2124. Only the following property may

be the object of a contract of mortgage:
(1) Immovables;

(2) Alienable real rights in accordance

with the laws, imposed upon
immovables.

Nevertheless, movables may be the object of

a chattel mortgage. (1874a)

Art. 2125. In addition to the requisites stated

in Article 2085, it is indispensable, in order
that a mortgage may be validly constituted,
that the document in which it appears be
recorded in the Registry of Property. If the
 458

instrument is not recorded, the mortgage is

nevertheless binding between the parties.

The persons in whose favor the law

establishes a mortgage have no other right
than to demand the execution and the
recording of the document in which the
mortgage is formalized. (1875a)

Art. 2126. The mortgage directly and

immediately subjects the property upon
which it is imposed, whoever the possessor
may be, to the fulfillment of the obligation
for whose security it was constituted. (1876)

Art. 2127. The mortgage extends to the

natural accessions, to the improvements,
growing fruits, and the rents or income not
yet received when the obligation becomes
due, and to the amount of the indemnity
granted or owing to the proprietor from the
insurers of the property mortgaged, or in
virtue of expropriation for public use, with
the declarations, amplifications and
limitations established by law, whether the
estate remains in the possession of the
mortgagor, or it passes into the hands of a
third person. (1877)

Art. 2128. The mortgage credit may be

alienated or assigned to a third person, in
whole or in part, with the formalities
required by law. (1878)

Art. 2129. The creditor may claim from a

third person in possession of the mortgaged
property, the payment of the part of the
credit secured by the property which said
third person possesses, in the terms and with
the formalities which the law establishes.
(1879)

Art. 2130. A stipulation forbidding the

owner from alienating the immovable
mortgaged shall be void. (n)

Art. 2131. The form, extent and

consequences of a mortgage, both as to its
constitution, modification and
extinguishment, and as to other matters not
included in this Chapter, shall be governed
 459

by the provisions of the Mortgage Law and

of the Land Registration Law. (1880a)

CHAPTER 4
ANTICHRESIS

Art. 2132. By the contract of antichresis the

creditor acquires the right to receive the
fruits of an immovable of his debtor, with
the obligation to apply them to the payment
of the interest, if owing, and thereafter to the
principal of his credit. (1881)

Art. 2133. The actual market value of the

fruits at the time of the application thereof to
the interest and principal shall be the
measure of such application. (n)

Art. 2134. The amount of the principal and

of the interest shall be specified in writing;
otherwise, the contract of antichresis shall
be void. (n)

Art. 2135. The creditor, unless there is a

stipulation to the contrary, is obliged to pay
the taxes and charges upon the estate.

He is also bound to bear the expenses

necessary for its preservation and repair.

The sums spent for the purposes stated in

this article shall be deducted from the fruits.
(1882)

Art. 2136. The debtor cannot reacquire the

enjoyment of the immovable without first
having totally paid what he owes the
creditor.

But the latter, in order to exempt himself

from the obligations imposed upon him by
the preceding article, may always compel
the debtor to enter again upon the enjoyment
of the property, except when there is a
stipulation to the contrary. (1883)

Art. 2137. The creditor does not acquire the

ownership of the real estate for non-payment
of the debt within the period agreed upon.
 460

Every stipulation to the contrary shall be

void. But the creditor may petition the court
for the payment of the debt or the sale of the
real property. In this case, the Rules of Court
on the foreclosure of mortgages shall apply.
(1884a)

Art. 2138. The contracting parties may

stipulate that the interest upon the debt be
compensated with the fruits of the property
which is the object of the antichresis,
provided that if the value of the fruits should
exceed the amount of interest allowed by the
laws against usury, the excess shall be
applied to the principal. (1885a)

Art. 2139. The last paragraph of Article

2085, and Articles 2089 to 2091 are
applicable to this contract. (1886a)

CHAPTER 5
CHATTEL MORTGAGE

Art. 2140. By a chattel mortgage, personal

property is recorded in the Chattel Mortgage
Register as a security for the performance of
an obligation. If the movable, instead of
being recorded, is delivered to the creditor
or a third person, the contract is a pledge and
not a chattel mortgage. (n)

Art. 2141. The provisions of this Code on

pledge, insofar as they are not in conflict
with the Chattel Mortgage Law shall be
applicable to chattel mortgages. (n)

Title XVII. - EXTRA-CONTRACTUAL

OBLIGATIONS

CHAPTER 1
QUASI-CONTRACTS

Art. 2142. Certain lawful, voluntary and

unilateral acts give rise to the juridical
relation of quasi-contract to the end that no
one shall be unjustly enriched or benefited at
the expense of another. (n)
 461

Art. 2143. The provisions for quasi-

contracts in this Chapter do not exclude
other quasi-contracts which may come
within the purview of the preceding article.
(n)

SECTION 1. - Negotiorum Gestio

Art. 2144. Whoever voluntarily takes charge

of the agency or management of the
business or property of another, without any
power from the latter, is obliged to continue
the same until the termination of the affair
and its incidents, or to require the person
concerned to substitute him, if the owner is
in a position to do so. This juridical relation
does not arise in either of these instances:
(1) When the property or business is
not neglected or abandoned;

(2) If in fact the manager has been

tacitly authorized by the owner.

In the first case, the provisions of Articles

1317, 1403, No. 1, and 1404 regarding
unauthorized contracts shall govern.

In the second case, the rules on agency in

Title X of this Book shall be applicable.
(1888a)

Art. 2145. The officious manager shall

perform his duties with all the diligence of a
good father of a family, and pay the
damages which through his fault or
negligence may be suffered by the owner of
the property or business under management.

The courts may, however, increase or

moderate the indemnity according to the
circumstances of each case. (1889a)

Art. 2146. If the officious manager delegates

to another person all or some of his duties,
he shall be liable for the acts of the delegate,
without prejudice to the direct obligation of
the latter toward the owner of the business.

The responsibility of two or more officious

managers shall be solidary, unless the
 462

management was assumed to save the thing

or business from imminent danger. (1890a)

Art. 2147. The officious manager shall be

liable for any fortuitous event:

(1) If he undertakes risky operations

which the owner was not accustomed
to embark upon;

(2) If he has preferred his own interest

to that of the owner;

(3) If he fails to return the property or

business after demand by the owner;

(4) If he assumed the management in

bad faith. (1891a)

Art. 2148. Except when the management

was assumed to save property or business
from imminent danger, the officious
manager shall be liable for fortuitous events:
(1) If he is manifestly unfit to carry on
the management;

(2) If by his intervention he prevented

a more competent person from taking
up the management. (n)

Art. 2149. The ratification of the

management by the owner of the business
produces the effects of an express agency,
even if the business may not have been
successful. (1892a)

Art. 2150. Although the officious

management may not have been expressly
ratified, the owner of the property or
business who enjoys the advantages of the
same shall be liable for obligations incurred
in his interest, and shall reimburse the
officious manager for the necessary and
useful expenses and for the damages which
the latter may have suffered in the
performance of his duties.

The same obligation shall be incumbent

upon him when the management had for its
purpose the prevention of an imminent and
manifest loss, although no benefit may have
been derived. (1893)
 463

Art. 2151. Even though the owner did not

derive any benefit and there has been no
imminent and manifest danger to the
property or business, the owner is liable as
under the first paragraph of the preceding
article, provided:

(1) The officious manager has acted in

good faith, and

(2) The property or business is intact,

ready to be returned to the owner. (n)

Art. 2152. The officious manager is

personally liable for contracts which he has
entered into with third persons, even though
he acted in the name of the owner, and there
shall be no right of action between the
owner and third persons. These provisions
shall not apply:
(1) If the owner has expressly or
tacitly ratified the management, or

(2) When the contract refers to things

pertaining to the owner of the
business. (n)

Art. 2153. The management is extinguished:

(1) When the owner repudiates it or
puts an end thereto;

(2) When the officious manager

withdraws from the management,
subject to the provisions of Article
2144;

(3) By the death, civil interdiction,

insanity or insolvency of the owner or
the officious manager. (n)

SECTION 2. - Solutio Indebiti

Art. 2154. If something is received when

there is no right to demand it, and it was
unduly delivered through mistake, the
obligation to return it arises. (1895)

Art. 2155. Payment by reason of a mistake

in the construction or application of a
doubtful or difficult question of law may
 464

come within the scope of the preceding

article. (n)

Art. 2156. If the payer was in doubt whether

the debt was due, he may recover if he
proves that it was not due. (n)

Art. 2157. The responsibility of two or more

payees, when there has been payment of
what is not due, is solidary. (n)

Art. 2158. When the property delivered or

money paid belongs to a third person, the
payee shall comply with the provisions of
article 1984. (n)

Art. 2159. Whoever in bad faith accepts an

undue payment, shall pay legal interest if a
sum of money is involved, or shall be liable
for fruits received or which should have
been received if the thing produces fruits.

He shall furthermore be answerable for any

loss or impairment of the thing from any
cause, and for damages to the person who
delivered the thing, until it is recovered.
(1896a)

Art. 2160. He who in good faith accepts an

undue payment of a thing certain and
determinate shall only be responsible for the
impairment or loss of the same or its
accessories and accessions insofar as he has
thereby been benefited. If he has alienated it,
he shall return the price or assign the action
to collect the sum. (1897)

Art. 2161. As regards the reimbursement for

improvements and expenses incurred by him
who unduly received the thing, the
provisions of Title V of Book II shall
govern. (1898)

Art. 2162. He shall be exempt from the

obligation to restore who, believing in good
faith that the payment was being made of a
legitimate and subsisting claim, destroyed
the document, or allowed the action to
prescribe, or gave up the pledges, or
cancelled the guaranties for his right. He
who paid unduly may proceed only against
 465

the true debtor or the guarantors with regard

to whom the action is still effective. (1899)

Art. 2163. It is presumed that there was a

mistake in the payment if something which
had never been due or had already been paid
was delivered; but he from whom the return
is claimed may prove that the delivery was
made out of liberality or for any other just
cause. (1901)

SECTION 3. - Other Quasi-Contracts

Art. 2164. When, without the knowledge of

the person obliged to give support, it is
given by a stranger, the latter shall have a
right to claim the same from the former,
unless it appears that he gave it out of piety
and without intention of being repaid.
(1894a)

Art. 2165. When funeral expenses are borne

by a third person, without the knowledge of
those relatives who were obliged to give
support to the deceased, said relatives shall
reimburse the third person, should the latter
claim reimbursement. (1894a)

Art. 2166. When the person obliged to

support an orphan, or an insane or other
indigent person unjustly refuses to give
support to the latter, any third person may
furnish support to the needy individual, with
right of reimbursement from the person
obliged to give support. The provisions of
this article apply when the father or mother
of a child under eighteen years of age
unjustly refuses to support him.

Art. 2167. When through an accident or

other cause a person is injured or becomes
seriously ill, and he is treated or helped
while he is not in a condition to give consent
to a contract, he shall be liable to pay for the
services of the physician or other person
aiding him, unless the service has been
rendered out of pure generosity.

Art. 2168. When during a fire, flood, storm,

or other calamity, property is saved from
 466

destruction by another person without the

knowledge of the owner, the latter is bound
to pay the former just compensation.

Art. 2169. When the government, upon the

failure of any person to comply with health
or safety regulations concerning property,
undertakes to do the necessary work, even
over his objection, he shall be liable to pay
the expenses.

Art. 2170. When by accident or other

fortuitous event, movables separately
pertaining to two or more persons are
commingled or confused, the rules on co-
ownership shall be applicable.

Art. 2171. The rights and obligations of the

finder of lost personal property shall be
governed by Articles 719 and 720.

Art. 2172. The right of every possessor in

good faith to reimbursement for necessary
and useful expenses is governed by Article
546.

Art. 2173. When a third person, without the

knowledge of the debtor, pays the debt, the
rights of the former are governed by Articles
1236 and 1237.

Art. 2174. When in a small community a

nationality of the inhabitants of age decide
upon a measure for protection against
lawlessness, fire, flood, storm or other
calamity, any one who objects to the plan
and refuses to contribute to the expenses but
is benefited by the project as executed shall
be liable to pay his share of said expenses.

Art. 2175. Any person who is constrained to

pay the taxes of another shall be entitled to
reimbursement from the latter.

CHAPTER 2
QUASI-DELICTS

Art. 2176. Whoever by act or omission

causes damage to another, there being fault
or negligence, is obliged to pay for the
damage done. Such fault or negligence, if
 467

there is no pre-existing contractual relation

between the parties, is called a quasi-delict
and is governed by the provisions of this
Chapter. (1902a)

Art. 2177. Responsibility for fault or

negligence under the preceding article is
entirely separate and distinct from the civil
liability arising from negligence under the
Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission
of the defendant. (n)

Art. 2178. The provisions of Articles 1172 to

1174 are also applicable to a quasi-delict. (n)

Art. 2179. When the plaintiff's own

negligence was the immediate and
proximate cause of his injury, he cannot
recover damages. But if his negligence was
only contributory, the immediate and
proximate cause of the injury being the
defendant's lack of due care, the plaintiff
may recover damages, but the courts shall
mitigate the damages to be awarded. (n)

Art. 2180. The obligation imposed by

Article 2176 is demandable not only for
one's own acts or omissions, but also for
those of persons for whom one is
responsible.

The father and, in case of his death or

incapacity, the mother, are responsible for
the damages caused by the minor children
who live in their company.

Guardians are liable for damages caused by

the minors or incapacitated persons who are
under their authority and live in their
company.

The owners and managers of an

establishment or enterprise are likewise
responsible for damages caused by their
employees in the service of the branches in
which the latter are employed or on the
occasion of their functions.

Employers shall be liable for the damages

caused by their employees and household
helpers acting within the scope of their
 468

assigned tasks, even though the former are

not engaged in any business or industry.

The State is responsible in like manner when

it acts through a special agent; but not when
the damage has been caused by the official
to whom the task done properly pertains, in
which case what is provided in Article 2176
shall be applicable.

Lastly, teachers or heads of establishments

of arts and trades shall be liable for damages
caused by their pupils and students or
apprentices, so long as they remain in their
custody.

The responsibility treated of in this article

shall cease when the persons herein
mentioned prove that they observed all the
diligence of a good father of a family to
prevent damage. (1903a)

Art. 2181. Whoever pays for the damage

caused by his dependents or employees may
recover from the latter what he has paid or
delivered in satisfaction of the claim. (1904)

Art. 2182. If the minor or insane person

causing damage has no parents or guardian,
the minor or insane person shall be
answerable with his own property in an
action against him where a guardian ad litem
shall be appointed. (n)

Art. 2183. The possessor of an animal or

whoever may make use of the same is
responsible for the damage which it may
cause, although it may escape or be lost.
This responsibility shall cease only in case
the damage should come from force majeure
or from the fault of the person who has
suffered damage. (1905)

Art. 2184. In motor vehicle mishaps, the

owner is solidarily liable with his driver, if
the former, who was in the vehicle, could
have, by the use of the due diligence,
prevented the misfortune. It is disputably
presumed that a driver was negligent, if he
had been found guilty or reckless driving or
 469

violating traffic regulations at least twice

within the next preceding two months.

If the owner was not in the motor vehicle,

the provisions of Article 2180 are
applicable. (n)

Art. 2185. Unless there is proof to the

contrary, it is presumed that a person driving
a motor vehicle has been negligent if at the
time of the mishap, he was violating any
traffic regulation. (n)

Art. 2186. Every owner of a motor vehicle

shall file with the proper government office
a bond executed by a government-controlled
corporation or office, to answer for damages
to third persons. The amount of the bond
and other terms shall be fixed by the
competent public official. (n)

Art. 2187. Manufacturers and processors of

foodstuffs, drinks, toilet articles and similar
goods shall be liable for death or injuries
caused by any noxious or harmful
substances used, although no contractual
relation exists between them and the
consumers. (n)

Art. 2188. There is prima facie presumption

of negligence on the part of the defendant if
the death or injury results from his
possession of dangerous weapons or
substances, such as firearms and poison,
except when the possession or use thereof is
indispensable in his occupation or business.
(n)

Art. 2189. Provinces, cities and

municipalities shall be liable for damages
for the death of, or injuries suffered by, any
person by reason of the defective condition
of roads, streets, bridges, public buildings,
and other public works under their control or
supervision. (n)

Art. 2190. The proprietor of a building or

structure is responsible for the damages
resulting from its total or partial collapse, if
it should be due to the lack of necessary
repairs. (1907)
 470

Art. 2191. Proprietors shall also be

responsible for damages caused:

(1) By the explosion of machinery

which has not been taken care of with
due diligence, and the inflammation
of explosive substances which have
not been kept in a safe and adequate
place;

(2) By excessive smoke, which may

be harmful to persons or property;

(3) By the falling of trees situated at

or near highways or lanes, if not
caused by force majeure;

(4) By emanations from tubes, canals,

sewers or deposits of infectious
matter, constructed without
precautions suitable to the place.
(1908)

Art. 2192. If damage referred to in the two

preceding articles should be the result of any
defect in the construction mentioned in
Article 1723, the third person suffering
damages may proceed only against the
engineer or architect or contractor in
accordance with said article, within the
period therein fixed. (1909)

Art. 2193. The head of a family that lives in

a building or a part thereof, is responsible
for damages caused by things thrown or
falling from the same. (1910)

Art. 2194. The responsibility of two or more

persons who are liable for quasi-delict is
solidary. (n)

Title XVIII. - DAMAGES

CHAPTER 1
GENERAL PROVISIONS

Art. 2195. The provisions of this Title shall

be respectively applicable to all obligations
mentioned in Article 1157.
 471

Art. 2196. The rules under this Title are

without prejudice to special provisions on
damages formulated elsewhere in this Code.
Compensation for workmen and other
employees in case of death, injury or illness
is regulated by special laws. Rules
governing damages laid down in other laws
shall be observed insofar as they are not in
conflict with this Code.

Art. 2197. Damages may be:

(1) Actual or compensatory;

(2) Moral;

(3) Nominal;

(4) Temperate or moderate;

(5) Liquidated; or

(6) Exemplary or corrective.

Art. 2198. The principles of the general law

on damages are hereby adopted insofar as
they are not inconsistent with this Code.

CHAPTER 2
ACTUAL OR COMPENSATORY
DAMAGES

Art. 2199. Except as provided by law or by

stipulation, one is entitled to an adequate
compensation only for such pecuniary loss
suffered by him as he has duly proved. Such
compensation is referred to as actual or
compensatory damages.

Art. 2200. Indemnification for damages

shall comprehend not only the value of the
loss suffered, but also that of the profits
which the obligee failed to obtain. (1106)

Art. 2201. In contracts and quasi-contracts,

the damages for which the obligor who
acted in good faith is liable shall be those
that are the natural and probable
consequences of the breach of the
obligation, and which the parties have
foreseen or could have reasonably foreseen
at the time the obligation was constituted.
 472

In case of fraud, bad faith, malice or wanton

attitude, the obligor shall be responsible for
all damages which may be reasonably
attributed to the non-performance of the
obligation. (1107a)

Art. 2202. In crimes and quasi-delicts, the

defendant shall be liable for all damages
which are the natural and probable
consequences of the act or omission
complained of. It is not necessary that such
damages have been foreseen or could have
reasonably been foreseen by the defendant.

Art. 2203. The party suffering loss or injury

must exercise the diligence of a good father
of a family to minimize the damages
resulting from the act or omission in
question.

Art. 2204. In crimes, the damages to be

adjudicated may be respectively increased or
lessened according to the aggravating or
mitigating circumstances.

Art. 2205. Damages may be recovered:

(1) For loss or impairment of earning

capacity in cases of temporary or
permanent personal injury;

(2) For injury to the plaintiff's

business standing or commercial
credit.

Art. 2206. The amount of damages for death

caused by a crime or quasi-delict shall be at
least three thousand pesos, even though
there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for
the loss of the earning capacity of the
deceased, and the indemnity shall be
paid to the heirs of the latter; such
indemnity shall in every case be
assessed and awarded by the court,
unless the deceased on account of
permanent physical disability not
caused by the defendant, had no
earning capacity at the time of his
death;
 473

(2) If the deceased was obliged to

give support according to the
provisions of Article 291, the
recipient who is not an heir called to
the decedent's inheritance by the law
of testate or intestate succession, may
demand support from the person
causing the death, for a period not
exceeding five years, the exact
duration to be fixed by the court;

(3) The spouse, legitimate and

illegitimate descendants and
ascendants of the deceased may
demand moral damages for mental
anguish by reason of the death of the
deceased.

Art. 2207. If the plaintiff's property has been

insured, and he has received indemnity from
the insurance company for the injury or loss
arising out of the wrong or breach of
contract complained of, the insurance
company shall be subrogated to the rights of
the insured against the wrongdoer or the
person who has violated the contract. If the
amount paid by the insurance company does
not fully cover the injury or loss, the
aggrieved party shall be entitled to recover
the deficiency from the person causing the
loss or injury.

Art. 2208. In the absence of stipulation,

attorney's fees and expenses of litigation,
other than judicial costs, cannot be
recovered, except:

(1) When exemplary damages are

awarded;

(2) When the defendant's act or

omission has compelled the plaintiff
to litigate with third persons or to
incur expenses to protect his interest;

(3) In criminal cases of malicious

prosecution against the plaintiff;

(4) In case of a clearly unfounded

civil action or proceeding against the
plaintiff;
 474

(5) Where the defendant acted in

gross and evident bad faith in refusing
to satisfy the plaintiff's plainly valid,
just and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of

wages of household helpers, laborers
and skilled workers;

(8) In actions for indemnity under

workmen's compensation and
employer's liability laws;

(9) In a separate civil action to

recover civil liability arising from a
crime;

(10) When at least double judicial

costs are awarded;

(11) In any other case where the court

deems it just and equitable that
attorney's fees and expenses of
litigation should be recovered.

In all cases, the attorney's fees and expenses

of litigation must be reasonable.

Art. 2209. If the obligation consists in the

payment of a sum of money, and the debtor
incurs in delay, the indemnity for damages,
there being no stipulation to the contrary,
shall be the payment of the interest agreed
upon, and in the absence of stipulation, the
legal interest, which is six per cent per
annum. (1108)

Art. 2210. Interest may, in the discretion of

the court, be allowed upon damages
awarded for breach of contract.

Art. 2211. In crimes and quasi-delicts,

interest as a part of the damages may, in a
proper case, be adjudicated in the discretion
of the court.

Art. 2212. Interest due shall earn legal

interest from the time it is judicially
demanded, although the obligation may be
silent upon this point. (1109a)
 475

Art. 2213. Interest cannot be recovered upon

unliquidated claims or damages, except
when the demand can be established with
reasonably certainty.

Art. 2214. In quasi-delicts, the contributory

negligence of the plaintiff shall reduce the
damages that he may recover.

Art. 2215. In contracts, quasi-contracts, and

quasi-delicts, the court may equitably
mitigate the damages under circumstances
other than the case referred to in the
preceding article, as in the following
instances:

(1) That the plaintiff himself has

contravened the terms of the contract;

(2) That the plaintiff has derived some

benefit as a result of the contract;

(3) In cases where exemplary

damages are to be awarded, that the
defendant acted upon the advice of
counsel;

(4) That the loss would have resulted

in any event;

(5) That since the filing of the action,

the defendant has done his best to
lessen the plaintiff's loss or injury.

CHAPTER 3
OTHER KINDS OF DAMAGES

Art. 2216. No proof of pecuniary loss is

necessary in order that moral, nominal,
temperate, liquidated or exemplary damages,
may be adjudicated. The assessment of such
damages, except liquidated ones, is left to
the discretion of the court, according to the
circumstances of each case.

SECTION 1. - Moral Damages

Art. 2217. Moral damages include physical

suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation,
 476

and similar injury. Though incapable of

pecuniary computation, moral damages may
be recovered if they are the proximate result
of the defendant's wrongful act for omission.

Art. 2218. In the adjudication of moral

damages, the sentimental value of property,
real or personal, may be considered.

Art. 2219. Moral damages may be recovered

in the following and analogous cases:

(1) A criminal offense resulting in

physical injuries;

(2) Quasi-delicts causing physical

injuries;

(3) Seduction, abduction, rape, or

other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or

arrest;

(6) Illegal search;

(7) Libel, slander or any other form of

defamation;

(8) Malicious prosecution;

(9) Acts mentioned in Article 309;

(10) Acts and actions referred to in

Articles 21, 26, 27, 28, 29, 30, 32, 34,
and 35.

The parents of the female seduced,

abducted, raped, or abused, referred to in
No. 3 of this article, may also recover moral
damages.

The spouse, descendants, ascendants, and

brothers and sisters may bring the action
mentioned in No. 9 of this article, in the
order named.

Art. 2220. Willful injury to property may be

a legal ground for awarding moral damages
if the court should find that, under the
circumstances, such damages are justly due.
 477

The same rule applies to breaches of

contract where the defendant acted
fraudulently or in bad faith.

SECTION 2. - Nominal Damages

Art. 2221. Nominal damages are adjudicated

in order that a right of the plaintiff, which
has been violated or invaded by the
defendant, may be vindicated or recognized,
and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.

Art. 2222. The court may award nominal

damages in every obligation arising from
any source enumerated in Article 1157, or in
every case where any property right has
been invaded.

Art. 2223. The adjudication of nominal

damages shall preclude further contest upon
the right involved and all accessory
questions, as between the parties to the suit,
or their respective heirs and assigns.

SECTION 3. - Temperate or Moderate

Damages

Art. 2224. Temperate or moderate damages,

which are more than nominal but less than
compensatory damages, may be recovered
when the court finds that some pecuniary
loss has been suffered but its amount can
not, from the nature of the case, be provided
with certainty.

Art. 2225. Temperate damages must be

reasonable under the circumstances.

SECTION 4. - Liquidated Damages

Art. 2226. Liquidated damages are those

agreed upon by the parties to a contract, to
be paid in case of breach thereof.

Art. 2227. Liquidated damages, whether

intended as an indemnity or a penalty, shall
 478

be equitably reduced if they are iniquitous or

unconscionable.

Art. 2228. When the breach of the contract

committed by the defendant is not the one
contemplated by the parties in agreeing upon
the liquidated damages, the law shall
determine the measure of damages, and not
the stipulation.

SECTION 5. - Exemplary or Corrective

Damages

Art. 2229. Exemplary or corrective damages

are imposed, by way of example or
correction for the public good, in addition to
the moral, temperate, liquidated or
compensatory damages.

Art. 2230. In criminal offenses, exemplary

damages as a part of the civil liability may
be imposed when the crime was committed
with one or more aggravating circumstances.
Such damages are separate and distinct from
fines and shall be paid to the offended party.

Art. 2231. In quasi-delicts, exemplary

damages may be granted if the defendant
acted with gross negligence.

Art. 2232. In contracts and quasi-contracts,

the court may award exemplary damages if
the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.

Art. 2233. Exemplary damages cannot be

recovered as a matter of right; the court will
decide whether or not they should be
adjudicated.

Art. 2234. While the amount of the

exemplary damages need not be proved, the
plaintiff must show that he is entitled to
moral, temperate or compensatory damages
before the court may consider the question
of whether or not exemplary damages
should be awarded. In case liquidated
damages have been agreed upon, although
no proof of loss is necessary in order that
such liquidated damages may be recovered,
 479

nevertheless, before the court may consider

the question of granting exemplary in
addition to the liquidated damages, the
plaintiff must show that he would be entitled
to moral, temperate or compensatory
damages were it not for the stipulation for
liquidated damages.

Art. 2235. A stipulation whereby exemplary

damages are renounced in advance shall be
null and void.

Title XIX. - CONCURRENCE AND

PREFERENCE
OF CREDITS

CHAPTER 1
GENERAL PROVISIONS

Art. 2236. The debtor is liable with all his

property, present and future, for the
fulfillment of his obligations, subject to the
exemptions provided by law. (1911a)

Art. 2237. Insolvency shall be governed by

special laws insofar as they are not
inconsistent with this Code. (n)

Art. 2238. So long as the conjugal

partnership or absolute community subsists,
its property shall not be among the assets to
be taken possession of by the assignee for
the payment of the insolvent debtor's
obligations, except insofar as the latter have
redounded to the benefit of the family. If it is
the husband who is insolvent, the
administration of the conjugal partnership of
absolute community may, by order of the
court, be transferred to the wife or to a third
person other than the assignee. (n)

Art. 2239. If there is property, other than

that mentioned in the preceding article,
owned by two or more persons, one of
whom is the insolvent debtor, his undivided
share or interest therein shall be among the
assets to be taken possession of by the
assignee for the payment of the insolvent
debtor's obligations. (n)
 480

Art. 2240. Property held by the insolvent

debtor as a trustee of an express or implied
trust, shall be excluded from the insolvency
proceedings. (n)

CHAPTER 2
CLASSIFICATION OF CREDITS

Art. 2241. With reference to specific

movable property of the debtor, the
following claims or liens shall be preferred:
(1) Duties, taxes and fees due thereon
to the State or any subdivision
thereof;

(2) Claims arising from

misappropriation, breach of trust, or
malfeasance by public officials
committed in the performance of their
duties, on the movables, money or
securities obtained by them;

(3) Claims for the unpaid price of

movables sold, on said movables, so
long as they are in the possession of
the debtor, up to the value of the
same; and if the movable has been
resold by the debtor and the price is
still unpaid, the lien may be enforced
on the price; this right is not lost by
the immobilization of the thing by
destination, provided it has not lost its
form, substance and identity; neither
is the right lost by the sale of the thing
together with other property for a
lump sum, when the price thereof can
be determined proportionally;

(4) Credits guaranteed with a pledge

so long as the things pledged are in
the hands of the creditor, or those
guaranteed by a chattel mortgage,
upon the things pledged or
mortgaged, up to the value thereof;

(5) Credits for the making, repair,

safekeeping or preservation of
personal property, on the movable
thus made, repaired, kept or
possessed;
 481

(6) Claims for laborers' wages, on the

goods manufactured or the work
done;

(7) For expenses of salvage, upon the

goods salvaged;

(8) Credits between the landlord and

the tenant, arising from the contract of
tenancy on shares, on the share of
each in the fruits or harvest;

(9) Credits for transportation, upon

the goods carried, for the price of the
contract and incidental expenses, until
their delivery and for thirty days
thereafter;

(10) Credits for lodging and supplies

usually furnished to travellers by hotel
keepers, on the movables belonging to
the guest as long as such movables are
in the hotel, but not for money loaned
to the guests;

(11) Credits for seeds and expenses

for cultivation and harvest advanced
to the debtor, upon the fruits
harvested;

(12) Credits for rent for one year,

upon the personal property of the
lessee existing on the immovable
leased and on the fruits of the same,
but not on money or instruments of
credit;

(13) Claims in favor of the depositor

if the depositary has wrongfully sold
the thing deposited, upon the price of
the sale.

In the foregoing cases, if the

movables to which the lien or
preference attaches have been
wrongfully taken, the creditor may
demand them from any possessor,
within thirty days from the unlawful
seizure. (1922a)

Art. 2242. With reference to specific

immovable property and real rights of the
 482

debtor, the following claims, mortgages and

liens shall be preferred, and shall constitute
an encumbrance on the immovable or real
right:
(1) Taxes due upon the land or
building;

(2) For the unpaid price of real

property sold, upon the immovable
sold;

(3) Claims of laborers, masons,

mechanics and other workmen, as
well as of architects, engineers and
contractors, engaged in the
construction, reconstruction or repair
of buildings, canals or other works,
upon said buildings, canals or other
works;

(4) Claims of furnishers of materials

used in the construction,
reconstruction, or repair of buildings,
canals or other works, upon said
buildings, canals or other works;

(5) Mortgage credits recorded in the

Registry of Property, upon the real
estate mortgaged;

(6) Expenses for the preservation or

improvement of real property when
the law authorizes reimbursement,
upon the immovable preserved or
improved;

(7) Credits annotated in the Registry

of Property, in virtue of a judicial
order, by attachments or executions,
upon the property affected, and only
as to later credits;

(8) Claims of co-heirs for warranty in

the partition of an immovable among
them, upon the real property thus
divided;

(9) Claims of donors or real property

for pecuniary charges or other
conditions imposed upon the donee,
upon the immovable donated;
 483

(10) Credits of insurers, upon the

property insured, for the insurance
premium for two years. (1923a)

Art. 2243. The claims or credits enumerated

in the two preceding articles shall be
considered as mortgages or pledges of real
or personal property, or liens within the
purview of legal provisions governing
insolvency. Taxes mentioned in No. 1,
Article 2241, and No. 1, Article 2242, shall
first be satisfied. (n)

Art. 2244. With reference to other property,

real and personal, of the debtor, the
following claims or credits shall be preferred
in the order named:

(1) Proper funeral expenses for the

debtor, or children under his or her
parental authority who have no
property of their own, when approved
by the court;

(2) Credits for services rendered the

insolvent by employees, laborers, or
household helpers for one year
preceding the commencement of the
proceedings in insolvency;

(3) Expenses during the last illness of

the debtor or of his or her spouse and
children under his or her parental
authority, if they have no property of
their own;

(4) Compensation due the laborers or

their dependents under laws providing
for indemnity for damages in cases of
labor accident, or illness resulting
from the nature of the employment;

(5) Credits and advancements made to

the debtor for support of himself or
herself, and family, during the last
year preceding the insolvency;

(6) Support during the insolvency

proceedings, and for three months
thereafter;
 484

(7) Fines and civil indemnification

arising from a criminal offense;

(8) Legal expenses, and expenses

incurred in the administration of the
insolvent's estate for the common
interest of the creditors, when
properly authorized and approved by
the court;

(9) Taxes and assessments due the

national government, other than those
mentioned in Articles 2241, No. 1,
and 2242, No. 1;

(10) Taxes and assessments due any

province, other than those referred to
in Articles 2241, No. 1, and 2242, No.
1;

(11) Taxes and assessments due any

city or municipality, other than those
indicated in Articles 2241, No. 1, and
2242, No. 1;

(12) Damages for death or personal

injuries caused by a quasi-delict;

(13) Gifts due to public and private

institutions of charity or beneficence;

(14) Credits which, without special

privilege, appear in (a) a public
instrument; or (b) in a final judgment,
if they have been the subject of
litigation. These credits shall have
preference among themselves in the
order of priority of the dates of the
instruments and of the judgments,
respectively. (1924a)

Art. 2245. Credits of any other kind or class,

or by any other right or title not comprised
in the four preceding articles, shall enjoy no
preference. (1925)

CHAPTER 3
ORDER OF PREFERENCE OF CREDITS

Art. 2246. Those credits which enjoy

preference with respect to specific
movables, exclude all others to the extent of
 485

the value of the personal property to which

the preference refers.

Art. 2247. If there are two or more credits

with respect to the same specific movable
property, they shall be satisfied pro rata,
after the payment of duties, taxes and fees
due the State or any subdivision thereof.
(1926a)

Art. 2248. Those credits which enjoy

preference in relation to specific real
property or real rights, exclude all others to
the extent of the value of the immovable or
real right to which the preference refers.

Art. 2249. If there are two or more credits

with respect to the same specific real
property or real rights, they shall be satisfied
pro rata, after the payment of the taxes and
assessments upon the immovable property
or real right. (1927a)

Art. 2250. The excess, if any, after the

payment of the credits which enjoy
preference with respect to specific property,
real or personal, shall be added to the free
property which the debtor may have, for the
payment of the other credits. (1928a)

Art. 2251. Those credits which do not enjoy

any preference with respect to specific
property, and those which enjoy preference,
as to the amount not paid, shall be satisfied
according to the following rules:

(1) In the order established in Article 2244;

(2) Common credits referred to in Article

2245 shall be paid pro rata regardless of
dates. (1929a)

TRANSITIONAL PROVISIONS

Art. 2252. Changes made and new

provisions and rules laid down by this Code
which may prejudice or impair vested or
acquired rights in accordance with the old
legislation shall have no retroactive effect.
 486

For the determination of the applicable law

in cases which are not specified elsewhere in
this Code, the following articles shall be
observed: (Pars. 1 and 2, Transitional
Provisions).

Art. 2253. The Civil Code of 1889 and other

previous laws shall govern rights
originating, under said laws, from acts done
or events which took place under their
regime, even though this Code may regulate
them in a different manner, or may not
recognize them. But if a right should be
declared for the first time in this Code, it
shall be effective at once, even though the
act or event which gives rise thereto may
have been done or may have occurred under
prior legislation, provided said new right
does not prejudice or impair any vested or
acquired right, of the same origin. (Rule 1)

Art. 2254. No vested or acquired right can

arise from acts or omissions which are
against the law or which infringe upon the
rights of others. (n)

Art. 2255. The former laws shall regulate

acts and contracts with a condition or period,
which were executed or entered into before
the effectivity of this Code, even though the
condition or period may still be pending at
the time this body of laws goes into effect.
(n)

Art. 2256. Acts and contracts under the

regime of the old laws, if they are valid in
accordance therewith, shall continue to be
fully operative as provided in the same, with
the limitations established in these rules. But
the revocation or modification of these acts
and contracts after the beginning of the
effectivity of this Code, shall be subject to
the provisions of this new body of laws.
(Rule 2a)

Art. 2257. Provisions of this Code which

attach a civil sanction or penalty or a
deprivation of rights to acts or omissions
which were not penalized by the former
laws, are not applicable to those who, when
said laws were in force, may have executed
 487

the act or incurred in the omission forbidden

or condemned by this Code.

If the fault is also punished by the previous

legislation, the less severe sanction shall be
applied.

If a continuous or repeated act or omission

was commenced before the beginning of the
effectivity of this Code, and the same
subsists or is maintained or repeated after
this body of laws has become operative, the
sanction or penalty prescribed in this Code
shall be applied, even though the previous
laws may not have provided any sanction or
penalty therefor. (Rule 3a)

Art. 2258. Actions and rights which came

into being but were not exercised before the
effectivity of this Code, shall remain in full
force in conformity with the old legislation;
but their exercise, duration and the
procedure to enforce them shall be regulated
by this Code and by the Rules of Court. If
the exercise of the right or of the action was
commenced under the old laws, but is
pending on the date this Code takes effect,
and the procedure was different from that
established in this new body of laws, the
parties concerned may choose which method
or course to pursue. (Rule 4)

Art. 2259. The capacity of a married woman

to execute acts and contracts is governed by
this Code, even if her marriage was
celebrated under the former laws. (n)

Art. 2260. The voluntary recognition of a

natural child shall take place according to
this Code, even if the child was born before
the effectivity of this body of laws. (n)

Art. 2261. The exemption prescribed in

Article 302 shall also be applicable to any
support, pension or gratuity already existing
or granted before this Code becomes
effective. (n)

Art. 2262. Guardians of the property of

minors, appointed by the courts before this
Code goes into effect, shall continue to act
 488

as such, notwithstanding the provisions of

Article 320. (n)

Art. 2263. Rights to the inheritance of a

person who died, with or without a will,
before the effectivity of this Code, shall be
governed by the Civil Code of 1889, by
other previous laws, and by the Rules of
Court. The inheritance of those who, with or
without a will, die after the beginning of the
effectivity of this Code, shall be adjudicated
and distributed in accordance with this new
body of laws and by the Rules of Court; but
the testamentary provisions shall be carried
out insofar as they may be permitted by this
Code. Therefore, legitimes, betterments,
legacies and bequests shall be respected;
however, their amount shall be reduced if in
no other manner can every compulsory heir
be given his full share according to this
Code. (Rule 12a)

Art. 2264. The status and rights of natural

children by legal fiction referred to in article
89 and illegitimate children mentioned in
Article 287, shall also be acquired by
children born before the effectivity of this
Code. (n)

Art. 2265. The right of retention of real or

personal property arising after this Code
becomes effective, includes those things
which came into the creditor's possession
before said date. (n)

Art. 2266. The following shall have not only

prospective but also retroactive effect:

(1) Article 315, whereby a descendant

cannot be compelled, in a criminal
case, to testify against his parents and
ascendants;

(2) Articles 101 and 88, providing

against collusion in cases of legal
separation and annulment of
marriage;

(3) Articles 283, 284, and 289,

concerning the proof of illegitimate
filiation;
 489

(4) Article 838, authorizing the

probate of a will on petition of the
testator himself;

(5) Articles 1359 to 1369, relative to

the reformation of instruments;

(6) Articles 476 to 481, regulating

actions to quiet title;

(7) Articles 2029 to 2031, which are

designed to promote compromise. (n)

Art. 2267. The following provisions shall

apply not only to future cases but also to
those pending on the date this Code
becomes effective:
(1) Article 29, Relative to criminal
prosecutions wherein the accused is
acquitted on the ground that his guilt
has not been proved beyond
reasonable doubt;

(2) Article 33, concerning cases of

defamation, fraud, and physical
injuries. (n)

Art. 2268. Suits between members of the

same family which are pending at the time
this Code goes into effect shall be
suspended, under such terms as the court
may determine, in order that compromise
may be earnestly sought, or, in case of legal
separation proceedings, for the purpose of
effecting, if possible, a reconciliation. (n)

Art. 2269. The principles upon which the

preceding transitional provisions are based
shall, by analogy, be applied to cases not
specifically regulated by them. (Rule 13a)

REPEALING CLAUSE

Art. 2270. The following laws and

regulations are hereby repealed:
(1) Those parts and provisions of the
Civil Code of 1889 which are in force
on the date when this new Civil Code
becomes effective:
 490

(2) The provisions of the Code of

Commerce governing sales,
partnership, agency, loan, deposit and
guaranty;

(3) The provisions of the Code of

Civil Procedure on prescription as far
as inconsistent with this Code; and

(4) All laws, Acts, parts of Acts, rules

of court, executive orders, and
administrative regulations which are
inconsistent with this Code. (n)

Approved, June 18, 1949.