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An act to ordain and institute the civil code of the Philippines : [continued from last issue] : book IV : obligations and contracts

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Part of The Lawyers Journal

Title

An act to ordain and institute the civil code of the Philippines : [continued from last issue] : book IV : obligations and contracts

Language

English

Source

The Lawyers Journal XIV (5) May 31, 1949

Year

1949

Subject

Civil law--Philippines

Obligations (Law)--Philippines

Contracts--Philippines

Rights

Fulltext

AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES BOOK IV OBLIGATIONS AND CONTRACTS Titlt f.- OBUGATIONS C H APTU l GENERAL PROVISIONS Al\T. 1176. An obligation is a juridiol ncccs· sity to gi•·t, 10 do or not to do. (n) A"T. 1177. Oblii;nions uise fron1: (I) bw; (Z) ConcrJcu; (J) Quui-contncu; (.f) Acts or ominions punished by h1w; arul (I) Quasi-ddictJ. (108. h) Al\T. 1178. Obliguions dnivcd from bw arc uot prn umc<I. Only 1hosc upren\y determined ~ in this Code or in specill hws arc dcmandabk, and shall br regulated by the precepts of the bw which e1tablilhc1 them; and a1 10 whu Ins nor bun fon~n, by the pro•·isiom of this Book. ( IOllO} A1<T. 117.9. Obligations u ising from contucu ha\'c the force of hw between the contucting paniH and should be complied 9.·ith in good hith. (IO!i h) A11.T. I 180. Obliguion• derived from quas1comr:acts 5hall b<' subject to the provi•ioni of Ch•p1er I, Tide XVII, of this Book. (n) An. !!SI. Civil obligation1 ari1ing from criminal offtMtl sh•ll be govcrntd by che penal hws, subjtct to the provisions of article 2197. rnd of th~ pertinent pro•·i1ions of Chlpier ?, PreliminH)' T itle, on Human Rclniom, and of Title XVUI of this Book, rtguh1ing damagts. ( 1092J) An. 11&2. Oblii;Hions derived /rom quasi-dc1icu shall be governtd by the pro•·isions of Ch•ptcr 1, T itle XVII of t his Book, :rnd by s~cial law1. (IG9h) C11AI'Tl3ll. 2 NATURE AND EFl'ECT OF OBLIGATIONS All.T. llBl. E•·ery person obliged to givt something i1 also obliged to nke cart of it with the proper diligence of a good father of a family, unlcu the hw or the nipubtion of the paniu rtquirc1 anothtt standard of cart. (1094>) A1.T. 1184. The creditor hu :a right to the fruiu of the thing from the time the obliguion IO ddivcr it ari~s. Howc•·cr, he shall acquire no real right OVH it until 1hc umc hn b«n dtlivertd 10 him. (1091) A"T. 1181. When wh•t is to be delivered is a determinate thing, the creditor, in addition to tht right gran1ed him by arricle 1190, nuy compd 11.t debtor 10 make the ddi•·ery. If the thing is indetcrminue or generic, he may ask that the obliguion be complied wi1h at the n:penseofthedcbtor. If the obligor dd:ays, or has promise.! to deliver the nmc thing to two or mort persom who do not han 1he umc imere1c, he .1hall be rupomible for any fortuitous evtnt until he has dfrcted the delivery. ( 1096) AllT. 1186. The obligation 10 giYe a determinate 1hing includes that of ddivcring all in ac· ccuiom and acceuorics, f''tn though they m:ay not have h«n nwntioneJ. (1097a) A1.T. ll&7: If :a ~rson obliged to Jo something fails to do it, the nme sh:all be executed ot hi1 COit. This ume rule shall be observed if he dots i1 in con1nvemion {)f the tenor of che obligu ion. Fur· 270 (CONTINUED FROM LAST ISSUE] 1hcrmorc, it In• )' be dccrud that whu hu bce11 poorly tlvnc lH. unJonc. (1098) A,_T, 1188. When the obligation comins in not doing, and the obligor dots whac hu been for· bidden him, it slull 3]so be undone at his expense. ( 10'19a) 1\RT. 11 &9. Those obliged to Jdivcr or to do 5onmhi_ng incur in dd~y from t he time tl•e obligce judiciolly or tXtrajuJidally dem111Js from them the fulJ11lnwnt of their obligation. l lowe••r, the denund by the crcJitor shall 11ot b, ncceuary in order thH dehy may exist: ( 1) \Vhm the oblignion or the hw expressly so dcclarts ~ or (2) When from the nuure and the circum.1unce1 of the obligalion it appun that the de•ign.iion of the time when the 1hing i1 to be dcliv•·rcd or the service is co br rcnd~rcd wu • conirolling motive for the e.1ublishmen1 of the con· trJCI; or (l) When demmd woulJ be usdc1s, u when the ob!igor +.a1 rendered ic beyond his power to perform. In reciprocal obligotions, neither pu1y incurs in dcl.y if the 01her docs not comply or is not ready 10 comply in a prOJ"'r manner wi1h what is incumbent upon him. From chc moment one of the p•rci" fulfills his obligation, delay by 1hc ocher begin•. ( I IOOa) A1tT. 1190. T hose who in the ~dorm:ance of their obliguions arc gui11y of fraud, negligence, or dd:ay, and those who in any m•nner con tr~­ ,·cnc the tenor thereof, are liable for d;im;iges. {1101) ART. 1191. Rc1ponsibilicy orising from fnud i1 J emand:able in all obligations. Any waiver of an action for (u<ure fnud i1 void. (1102a) A1.T, 1192. Respon1ibili1y ;iri~ing from negligence in the pcdorm:ance of every kind of obligatiun is abo dem:and.blc, but such liability may be regulated by the coun1, according to the circumnrnces. {l !Ol) ART. 119). The fault or negligence of the obligor consists in the omission of chat diligence which is required by the nature of the oblignion rnd correspond• with the circumstance• of the pcrO{)llS, of the time and of the place. When negligence shows bad faith, the provi1ions of ankles 1191 :and 2221, paragraph 2, shall apply. If the bw or contract docs not state the dili· xencc which is 10 be obscn·ed in 1he pcrform:anct, chu which is expected of a good fuher of a fa. mily shall be required. {1104:1) Au. 1194. Except in cases cxprculy specified by the bw. or when it ii othcrwi!C declared by nipuhtion, or when the n:11ure of 1hc obligJtion require1 the auumption of risk, no person, shall be respon1ible for those even\! which could not lot fore1ten, or which, though forcsctn, were inc•·iublc. ( 110h) A1\'r. 119!. Usurious tunsaciions .1hall be go•·crocJ by special bws. {n) ART, 1196. The receipt of the principal by the creJi1or. without rescrntion wi1h ropect to the in· tcrcst, sh.II give rise to chc pre•umption that u id inter~st ha1 been p:aid. Tht receipt of a lacer insullmenc of a debt without rescrvoiion :11 to prior installments, shall likewise raise the presumption thn such insialtmcnu h>ve been paiJ. (11101) A11·r. 1197. The creditors, after having pursued the prOj>e<ty i11 possession of t he debtor to uti1fy their claims, may exercise all the rights ond bring all chc onions of the Inter for the ume purpose, s.vc those which arc inherent in his person; th~y m:ay also impugn 1hc acn which the debtor may h:a•·e done to dcfrauJ them. {1111) A11T. 1198. Subjtct to die hws, all righu ac· quired in virtue of rn oblignion arc transmissible, if thue has been no nipuluion 10 the contrary. (11 12) Oll'l'ERENT KINDS OF OBLIGATIONS S1.<:TION 1.- Purt am/ Conditio11~t Oblig~liom A11T. 1199. E1·ery oblignion whose pcrformantt JotsnotdcpcnJ upon a fucurcoruncttt:1in evem, or up0n a past nenc unknown 10 the plriie1, is demand:ablc at once. E•·cry obligition which contain• a resolutory con· dition shall aho be demandable, without prejuJict to thceffe,tsof the happening of the .-·ent. (1113) A&T. 1200. When the debtor binds himsc:lf to P•)' when his muns permit him to do so, the obligation shall be dttmed to be one with a period, subject to the provision of 3rticle 12 17. (n) AllT. 1201. In conditional obligations, the acquisition of rights, as well 3S the utinguishmtnt orlossoftho1c alreadyacquircd, shall depcndupon the happening of the event which constitutes the condirion. ( 1114) An. 1202. When the fulfillment of the condition depend1 upon the sole will of 1he debtor, the conditional obligation slull be void. If it depends upon dunce or upon the will of J third person, the obligation shall nkc effect in conformity .,,.;th the provisions of this Code. (Ill!) ART. 1203. Impossible conditions, those contrary to good customs or public policy and chore prohibited by law •hall annul 1hc oblignion which depends upon chem, If the obligation is divisible, that p~n thereof .,.,hich is not affcctcJ by the impossible or unbwful condition sholl be valid. T he condi1ion not 10 do an impos1ible thing shall be COMiJered u not having been agreed upon. {l l lh) A11T. 1 20~. The condition that some tYtnt happen at a determinate time shall extinguish 1he oblig11ion :as soon 31 the time expires or if it has become indubinble 1hn the e\'ent will not uite phcc. {1117) ART. 1201. The condition that some event will not h•p~n at l determinate 1ime shall render the obliguign effective from 1hc moment the time indicated hn elapsed, or if i1 !us become evident that theevtntcannotoccur. If no time hu been fixed, the conJicion shdl be deemed fulfilled at such time a• may have probably b«n contemplated, beoring in mind the nature of the oblignion. (1118) An. 1206. The condition shall be dcemeJ fulfilled when the obligor Yoluntarily prevents iu fulfi\lmcnl. (1119) ART. 1207. The effects of a condition•[ obliga· tiontogivc,oncethccondition has been fulfilled, shall rcuoact co the day of the constiiucion of chc obligation. NtYtrthcleu, when the oblig~tion imposes rccipr1Kal presu1ions upon the parties. the fruits and intere1ts during the pendcncy of the condition .i;hall be dcemcJ 10 h:ave been mutually compenu ted. If 1he oblig11ion ii unibtenl, the debtor 1hall appropriate 1hc fruin anJ intcrtsts rocciveJ, unless from the nature and circumstonces of t he obligation it shoulJ be inferred that the intention of the person constituting t he u me was different. In obligations lo do anJ not 10 do, the couru shall determine, in nch case, 1he retroactive eff«t of the condition rhat Ins been compEtJ with. (1120) A,_T, 1208. The creditor moy, before the fut. fillment of the condition, bring the appropriate actions for theprtservationofhis right. The debtor may rtcOYer what during die same l ime he ha1 paid by miS!ake in c:11e of a suspcnsi\"C condition. ( 112 11) ART. 1209. When t he conditi{)n! have b.:en imposed with the intution of Suspending the effi· May JI , 1949 ncy of an obligation to give, the following rul" shall be observed in cue of the improvoment, lou or determination of the thing during the pendency of the condition: (\) If the thing i• lost without the fault of the debtor, the obligation shall beutinguished; (2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damage•; it is understood thu the thing is lost when 1t pt"rishu, or goes out of commerce, or disappears in such a way thu iu uistcnce i~ unknown or it cannot be recovered; {}) When 1he thing deteriorates without the fault of the debrnr, the impairment i• to be borne by the cnditor; (") If it deteriorates through the hult oi thc debtor, the creditor may choose between the re•cission of 1he oblignion and its fulfillment, with indemnity for damages in either caJe; (j) If the thing is improved by its nuure, or by time, 1he impro•·ement shall inure to the benefit(:: t~; i:rc1sit~~pro•«d at the n _ pensc o' the debtor, he shall ha•·c no other right thrn that i;ranttd totheusufructuary, (1122) Au. 12 10. \'\'hen the conditions ha•·• fo r their purpose th~ cxtinguishmrnt of an obligation to giYe, the parties, upon the fulfillment of uid conditions, shall return touch other what they have received. In case of the loss, deterioration or impro•·cment of the thing, the provi1ions which, with respect to the debtor, are bid down in the preceding orticle shall be •pplied 10 the party who i1 bound to return. As for oblibnions to db and not to do, the provisions of the second paraguph of ariicle 1207 shall be observed al regards the effect of thcu1inguishmen1 of the obligltion. (\Ill) A11T. 1211. The po>A·er to rescind oblignions is implied in reciprocal ones, in case one of the obligon should not comply with wftat is incumbent upon him. The injured pHty nuy chOOK between the fulfillment and the rescission of 1hc obligation, >A·ith the payment of damages in either case. H e may aho seek rescission, evCn after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescinion claimed. unless there be just cause authorizing the fixing of a period. This is undcrnood to be without prejudice to the rights of 1hird persons who have acquired the thing, in accordance with ar1icln l40J and 1"08 and the Mortgage bw. (112") ART. 1211. In case both parties have commincd a breach of the obligation, the liability of the fint infoctor shall be equiubly tempered by the court!. If it cannot be dncrmincd which of the parties first violated the contract, the same shall be deemed cxtingui•hed, and each shall bear his own d•mages. (n) StcTION 2.-0b/;goli~"I with o PuioJ AJ.T. 1211. Obliguiom for whose fulfillment a day certain hu been fixed, shall be dcmandabl~ only when that day comH. Obligations with a resolutory period take effect at once, but termi .. ate upon arrival of the day certain. A day ccruin i1 understood to be that which must neccsurlly come, although it may not be known when. If the uncutainty consi1u in whether the day will come or not, the obliguion is conditional, and it shall be rcgulaud by the rules of the preceding Section. (112h) AllT. 121". In cue of los~, dnerioration or improvement of the thing before the arrival of the day certain, the rule• in article 1201 shall be obocrved. (n) Au. 121'. Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or believing thn the obligation has May Ji, 1949 become due and dcmandab\c, may be recovered, with the fruiu and intcrens. (1126a) ART. 1216. Whenever in an obligation a period i1 de1ig11atcd, it is presumed to have been esubJ;,hcd for the benefit of both 1hc creditor and the debtor, unlen .from th~ twor of the ume or other ciTcumsunccs it should appear that the p<:riod has bccn cstablished in favor of one or of the other. (1127) ART. 12 17. If the obligation doc• not fix a period, but from its nature and the circumstances it cm be inferred 1hat a period wu intended, the courts may fix the duration thereof. The courts shall also fix the duration of the period when it depends upon 1hc will of the debtor. In every caJe, the courts shall determine mch period u may under the circumstmces h•ve been probably contemplated by the parties. Once fi~cd by the courts, the period cannot be changed by 1hcm. ( 112h) ART. 1211. The debtor shall lo•c e•·cry right to make use of the ·period: ( ! ) Whrn after the obligation has been contracud, he becomes insolvent, unless he gives a i;uaranty Or•ecurity for t he debt; (2) When he does not furnish to the creditor the i;uaranties or se<:uritics which he hu promised: ()) Whc.n by his own 3cu h~ hu imp•ir•d 11id guaunties or occurities after their enab!i.hmtnt, and when through a fortuitous event they di1· appear, unless he immcdiatdy gi>'es new onc1 cqu•l1 )· utisf•ctory; (") When the debtor violues any undertaking, i1\ comi<ler~tion of which the creditor •greed to the period: (!) When d1e cr~di1ur Utempn to 3bscond. {1129a) Si:cno1< l.-Altrr11i1lirr Obl1gi1l•ous /\J.T. 1219. A ptrson alternatively bound by different prenuion• •lull completely perform one of them. The creditor cannot 'be compelled to receive pH! ofoneandp•rtoftheothtrundertaking. (!Ill) ART. 1220. The right of choice belongs to the debtor, unless it has been uprcss!y granted to 1hc creditor. The debtor shall have no right to choose those prcstations which arc imponible, unlawfol or which could not have been the object of the obliguion. (Elll) Ain. 1221. The chuice •hall produce no effect except from the time it lus been communicated. ( !Ill) ART. 1222. The debtor shall lose the right of choice when among the prcstations whereby he is alternatively bound, only one is pucticabk (t!H) ART. 1221. If through the creditor's acts the debtor cannot make a choice according to the tcrm1 of 1he obliguion, the latter may rescind 1he contract with damages. (n) ART. 1224. The creditor shall ha.·c a right to indemnity for damages when, through the hulc of the debtor, all the things >A·hich arc alternatively the object of the obligation have been lost, or the compliance of the obligation ]us become impo<1iblo. The indemnity shall be fi~cd taking u a basis the value of the last thing which disappeared or that of the ocn·ice which b>t became imponible. Damage1 other than the value of the last thing or •ervice may also be awarded. ( I Illa) ART. 1221. w";: n the choice ha. been expressly given to the creditor, the obligation shall cease to be alternative from the day when the •dcction has been communicated to the debtor. Until then the responsibility of 1he debtor sh11l be governed by the following rules: ( I ) lfoneofthe1hingsfalostthroughafortuitous event, he shall perform the obligation by delivering that which the creditor should choose from amoni; the remainder, or that which remains if only one subsists; THE LA WYERS JOURNAL Civil Code (2) If the lou of one of the thini;s occur; through the fault of the debtor, the creditor may claim any of those subsiS!ing, or the price of th at which, through the fault of the former, has disappeared, with a right to damages; (l) Tfa11thtthingsarclostthroughthefault ofthedcbtor,thcchoiceby '1hccrcditorshallfall upon the price of any one of them, also with indemnity for damages. The same rules shall be applied to obligation• to do or not to do in case one, some or all of the prestations should become impossible. (11J6a) Au. 1226. When only one prenation hu been agreed upon, but the obligor m•y render another in substitution, the obligation is coiled faculutivc. The loss or deterioration of the thing intended u 2 substitute, 1hrough the negligence of 1heobligor, docs not render him liable. But once the subnitution has been made, 1hc obligor is liable for thelossofthesubHitutconaccountofhi.delay, nci;ligence or fraud. (n) Sl!i;TrON 4.-/uiu/ ,,,.J Sulidury Obfigalio'1$ ART. 1227. The concurrence of two or more creditors or of two or more debton in one and the umc obligation doc~ not imply that each one of t he former has a right to demand, or that each one of the lancr is bound to render, entire complianc( with • the prestation. There is a 50lidory liability only when the obligation c:<pre<Sly so notes, or when the law or the nature of the obligation requires solidarity. (lll7a) A11T. 1228. If from the hw, or the nature or the wording of the obligations to which the preceding article refers the contrJry docs not appcH, 1he credit or debt shall be presumed lO be di1·ided into as nuny equal ;lures a• there arc crcdi1on or debtors, the credits or dcbu being considcrc.t dininct from one another, subject to the Rules of Court go•·etning the multiplicity of suits. (I 138~) A11T. 1229. If the division is impos.ible, the right of the creditors may be prejudiced only by their collective acts, and the debt can be enforced onlybyprocecdingagain1t•llthedebton. Hone of the lauer should be imolvent, the others 1hall not be liable for his share. {109) ART. 12JO. The indivisibility of an obligation docs not neceuarily give rioc to solidarity. Nor docs solidarity of iuelf imply indivisibility. (n ) Au. 1211. Soliduity may uist although the creditors and the debtors nuy not be bound in the ume manner ond by 1he •ame periods and conditions. (1140) AMT. !Zll. Each one of ~he •olid.ry crediton may do whatever may be useful to the other!, but not •nything which m•y be prejudicial to the laua. (114la) A11T. 12ll. A solidary creditor cannot 2.,ign his rights without the consent of the others. (n) A11T. 12H. The debtor may pay any one of the so!idJry creditors; but if any demand, judicial or extrajudicial, has been made by one of them, payment should be made to him. (11"2a) A11T. 1231. Novuion, compensation, confusion or remission of the debt, made by any of the 50]idary creditors or wi1h any of the mlidary debtors,shallexiini;uishthcoblii;ation.'A•ithoutprcjudicetoCheprovisiomofarticlc IH1. The creditor who may have executed any of thc1e an., as well a. he who colkcu the debt, sha ll ~ liabletotheotheroforthe•hatein theoblii;•tion corresponding to them. (ll"l) ART. 1216. The creditor may proceed 2i;•in1t any one of the solidary debtors or some or all of them simultaneouoly. The demand made ag•inst one of them shall not be an obn~clc to those whid1 may subsequently be directed against the other" so loni; as 1he debt has not been fully collected. (llHa) Au. 1237. Payment m~de by one of the solidary debtors extinguishes the qbligation. If two or more solid.ry debtors offer to pay, 1hc creditor may choose which offer lO accept. He who made the parment may daim his codebrors only the ohare which"correspond• touch, 271 Civil Code with the imereu for 1hc p•yment alrudy made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. Whrn one of the wlidary debtor~ cannot, becrnse of his insolvency, rcimbuuc his share to 1he d,·bior paying the obligation, such •lure shall be borncbyallhiscodcb1ors, inproportiontothedebt of c.1ch. (llHa) ART. 1238. Payment hr• wlidary debtor shall not entitle him to reimbursement from his codcbtors if such payment h made ofur the obliguion hu prescribed or become illegal. (n) ART. 12}9. Tho remission made by the creditor of the share which affects one of the solidary debtors docs not uleuc the lauer from his re~­ ponsibility towards the codcbtors, in cue the debt had been totally paid by anyont of them before the remission wu effected. (11 46a) ART. 1240. The rcminion of the whole obligation, obtained hr one of the solidary debtors, docs not entitle him 10 reimbursement from his codcb1on. (o) ART. IHI. If the thing hu hl:cn lost or if the presution has become impossible without the fault of the solidity debtors, the oblignion shall be utinguished. If there was fault on the pHt of my one of them, all shall be responsible to 1hc creditor, for the price and the payment of damages and intcrcn, without prejudice to their action, •s•inst the guilty or negligent debtor. If through a fortuitous event, the thing is lost or the performance has become impossible after one of 1b' soliduy dtbtoU hu incurred in deby through the judicial or u1u-judicial dem•nd upon him by the neditor, the provhions of the preceding pani;raph shall apply. (11'47a) A"T. 1242. A solidary debtor may, in actions filed by 1hc creditor, avail himself of all defenses ... hich arc deri"cd from the nature of the obligation •nd of those which arc personal 10 him, or pertain to hi' own share. With respect to those which personally belong to the others, he may aviil himself thereof ooly n rtgards thot part of the debt for which ·the Inter arc respon,ible. {1148a) An. 1241. The di\'isibility or indivisibility of the things that uc the object of obligations in which there is only one debtor and only one creditor docs not alter or m'ldify the provi•ion1 of Chapter 2 of chis Title. ( 110) An. 1 lH. A joint indivUibk obliguion gives rise to indemnity for d•mages from the time anyone of the debtors doe• not comply with his undert>king. T he debtors who may hne been ready 10 fulfill their promises •h•ll not contribute to the indemnity beyond the corresponding ponion of the price of the thing or of the value of the serv ice in which the obligation co'n•i•ts. (llfO) AJ.T. 1241. For the purposes of the preceding articles, obliguiom to give dcfiniu things and those which arc not susceptible of putial performance shall be deemed to be indivi1iblc. When the obliguion has for its object the c1tecu1ion of a certain number of days of work, the accomplishment of work by metrical units, or an•logous things which hr their nature are rnsceptible uf partial performance, it 1hal! be divisible. However, even though the object or .si:rvice may be physically divisible, an obliguion i1 indivisible if so provided by law or intended by the panics. l nobligationsnoltodo,divisibilityorindivisibility shall be determined by the character of the prestaiion in each pHticular cue. ( l!Ila) SECTION 6.-0bUgativm with a Pe11al Cfau<t AllT. 1246. In obligations wid1 a pen•I d•usc, the penJl!y shall subnitute the indemnity for damage! and the payment of inuresu in case of noncoropli•nce, if 1hcre is no nipulation to the con272 trHy. Neverthde11, damages sh:all be 1uid if the oblisor rduseJ to p•y the penalty or iJ guilty of fraud in the fulfillment of the obligation. The penalty may be enforced only when it is dcmandable in accordance with the provision• of this Code. (1112a) AJ.T. 1247. The debtor cannot c1tempt himself from the performance of the obligation by paying the penalty, U\'e in the ca>c where this right has been cxprcnly rcscn·ed for him. Neither can the creditor demand the fulfillment of the obligation and the ntisfaction of the pen~lty >t the same time, unlen this risht has been clearly granted him. Howe\'er, if after the creditor has decided to require the fulfillment of the obligAtion, the performance thereof should become impouiblc without his fault, the pc1ulty may be enforced. (lHh) AJ.T. INS. Proof of :ac!Ual damages suffered by the creditor is not necesnry in order thn the penalty m•y be demanded. (n) An. 120. The judse shall equitably rcdu~c the pcnllty when the principal obligation has been p.rdy or irregululy complied wi1h by the debtor. Enn if there has been no p<'•formAnce, the penalty may also be reduced by the courts if ii is iniquitou1 or unconscion.ble. (llHA) A'-T· 12l0. The nullity of th1: penal clause doc1 not carrf with it that of the principd obligation. The nullity of the principal obligation CHries "·ith it that of the penal cbuse. ( l lSI) EXT INGUISHMENT OF OBLlGA TlONS 1211. Obligations arc u1ingui1hed: (I} By payment or performance; (2) By the Ion of the 1hing due; (l) By the condon~tion or rcminion of 1he debt; ('1) By the confusion or merger of the righu of creditor and debtor;· (I) By compensation; (6) By novation. Other c:auses of utingu,.hment of obligation!, such as annulmen1, rescinion, fulfillment of a rewlutory condition, and prescription, arc governed clsc ... ·herc in this Code. ( llSh) S~Cl'ION t.-/'a)lllfllf or J'nfvr111~11a ART. lll2. Payment rncan1 not only the deli"ery of money but also the performoncc, in :anr other manner, of an obliguion. (n) t\1tT. i21J. A debt shall not be undcmood to ha.·c been paid unlcs1 the thing or service in which the oblig:aion con!ists has been 'omplctdr delivered or rendered, al the case may be. ( 1117) ART. IH4. If the obligation has been sub· 1tantially performed in good faith, 1he obligor may recover u though there had been • nrict and complete fulfillment, less dam•ges suffered by the obligor. (n) A,_T, l2J:l. When the obligee accepts the performance, knowing its incompletenen or irregularity, ~nd without upressing any protest or objection, the obligation is deemed fully complied with. (n) AJ.T. IH6. The creditor is not bound 10 accept payment or performance by a third person who hu no interest in the fulfillment of the obligation, unlen there is a stipubtion to the contruy. Wlioc\'er pays for another may demand from the debtor what he has paid, except tint if he paid without the knowledge or against the will of the debtor, he crn recover only insofar as the payment has hl:cn benefici>l to the debtor. ( llSh) AJ.T. 12J7. Whoever pays on behalf of the debtor without the knowledge or againll the will of the huer, c.nnot compel the creditor to subrosate him in his rights, such as th0'5c arising from a mortgage, guaranty, or penalty. ( I U9A) AJ.T. IHS. Payment made by a third persnn who docs not intend to be reimbursed by 1he THE LAWYERS JOURNAL debtor is deemed to be a donation, which rcquirc1 the debtor'J consent. But the payment is in any case vaiid as to the creditor .,ho has accepted 1t. (o) AJ.T. 12!9. In obligations to give, p1yment nude by one who docs not have the free disposal of the thing d11e and capacity to alienate it sh.11 not be valid, without prciudice to the provisions of irtidc 1447 under the Title on .. Natural Obligations." (1160a) A'-T. 1260. Payment shall be mlde to the person in who1e favor the 'obligation has been conllitutcd, orhissuccessorininterc11,orlnypcrsonauthorized lo receive it. (1162a) AkT. 126l. Payment to a person who is incaplC"itatcd to :administer his propenr shall be ulid if he has kept the thing delivered, or insofar as the payment hu been hl:ncficial to him. Payment made 10 a third person shall •lso be nlidinsofarasithasrcdoundcdtothcbenefitof the creditor. Such benefit to the creditor need not be pro•·ed in the following cases: (1) lfaftcrthcpayrnent,thcthird person:acquircs ihe creditor's righu; (2) If the creditor ratifies the parment to the third person; (l) If by the creditor's conduct, the debtnr hashl:en led to believe that the third person had •Uthori.ty to receive th1: payment. (IUh) AkT. 1262. Payment made in good faith to ,ny person in po.senion of the credit 1hall rcle.se the debtor. (116'1) t\"T. 1261. Payment made to the creditor by the debtor after the latter has hl:cn judiciallr ordered to retain the debt shall not be valid. (110) ART. 1264. The debtor of • l hing CAnnot compel the creditor to receive a different one, although the latter may be of the nme value i<, or more valuable than that which is due. In obligations to do or uot to do, an act or forbcHancc cannot be substituted by another act or forbearance against the obligce's will. (1!66•) A'-T· l26l . Dation in payment, whereby property is alienated tothecreditorinsatisfactionof a debt in money, shall be governed by the law of sale1. (n) AJ.T. 1266. When the oblisation consins in the delivery of on indeterminate or generic thing, whow quality and circ umstances have nnl been stoted, the creditor cannot demand a thing of superior quality. Neither can the debtor deliver a thing of inferior quality. The purpo1e of the obligHion and other circumstances shall be taken into consider.tion ( 1167a) AJ.T. 1!67. Unless it is otherwise stipulated, 1hc extra-judicial expenses required by the payment 1hall be for the account of the debtor. With rcgud to judici•l C0'5ts, the Rules of Court shlll govern. · (1168a) AJ.T. 1268. Unless there is an express nipul•tion to th>t cffoct, the creditor cannot be compelled partially to receive the prestations in which the oblig.iion consists. Neither may the debtor be required to m•kc pani•l payments. However, when the debt is in part liquidated and in put unllquidated, the creditor may demand and the llebtor may effoct the payment of the fo rmer without waiting for the liquidation of the latter. (1169a) ART. 1269. The payment of debts in money shall be made in tl1e currency stipulated, and if it is not possible to deliver such currency, then in the currency which i• legal tender in the Philippines. The delivery of promi.rory 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 hult of the creditor they h>ve been impaired. In the meantime, the action derived from the original obligation shall be held in abcy>nCC. (1170) A"T. 1270. In case an uuaordinary inflation or deflation of the currency Stipulated should suMay 31, 1949 pervcnc, the value of the currency at the time of the establi•hment of the obligation shall be the basis of payment, unleu there i• m agreement to the contrary. (n) ART. 127!. Payment shall be made in the phce designated in the oblig.uion. There being no Cl<preu stipuluion and if the undertaking is to deliver a determinate thin~, the payment shall be made wherever the thing might be at the moment the obligation was constituted. In any other enc the pl.cc of payment shall be the domicile of the debtor. If the debtor changes his domicile in bad faith or after he ]u5 incurred in dehy, the additio1ul eltpen1es shall be borne by him. These provisions HC "·itl1out prejudice to 1·cnuc under the Rules of Court. ( 1!7 1a) SUBSECTION 1.-Aflfl/icalio11 of Pay1tu11/s ART. 1272. He who ha1 various debts of the 1ame kind in favor of one and the same creditor, may dedarc at the time of making the payment, to which of them the same must ' be applied. Unlc" the puties so stipulate, or when the applkation of payment is made by the party for who..: benefit the term has been constituted, 2pplicuion shall not be m•de as 10 debt$ "·hich ue not yet due, If the debtor •Cccpts from the cnditor a receipt in which 2n application of the p•yment is nude, the former cannot complain of the same, unlc51 there i• a cause for innlidating 1he contr•ct. (ll7h) ART. 1273. If the debt produce• interen, p2ymcnt of the prindp•l ,lull not be deemed to luvc been made until the intercsu have bttn covcnd (1173) ART. 127-4. When the payment cannot be applied in accordance with the preceding rules, or if applicnion can not be inferred from other circum•Unce1, the debt which is most onerom to the debtor, among tho:\C due, sh all be deemed to hal'e been utisfied. If the debu due arc of the same nHure an.! burden, the payment shall be applied to 211 of them proportio1utely .. (1174 a) 1\H. !275. The debtor m2y cede or assign hi• property to hi• creditor• in pa)'ment of his debts. Th is cession, unles• there is stipulation to the coutrny, shall only rdea>e the debtor from responsibility for the net proceeds of the thing .. signed. The agreement< which, on the effect of the ceuion, HC made bet"·een the debtor and his creditor• 1h~ll be gove rned by special laws. (117h) Sv1:1s>.CTION J.-Tr.,drr of Pdy111rnl dfl<I Cu11>ig•111lio11 ART. 1276. If the creditor to whom tender of p2yment ha. been ma.de refu.es without just cause to accept it, the debtor 1lull be rdeued from r••ponsibility by the con<ignation of the thing or sum due. Consign~tion alone shall produce the umc effect in the following cases: (l) When the creditor isabsentorunknown,or does not appear at the place of payment; (2) When he is incapaciutcd to receive the payment at the time it is due; (3) When, without jun cause, he refu~s to give a receipt: (4) When two or more person• claim the same right to collect: (5) When the tide of the obligltion has been lon. (l\76a) ART. 1277. In order dut the consignHion of the thing due may release the obligor, it musr first be announced to the pcrwns interested in the fulfillment of the obligation. The consignati<>n shall be ineffectual if it is not m•de strictly in con•Onance with the provisions which reguhte payment. (1177) M:iy 31, 1949 ART. 1278. Consignation sha!l be made by depositing the things due at1he disposal of judicial authority, before whom the tender of p•yment shall be proved, in a proper ca.e, and the announcement ofthecon•ignationinothercases. The consignation having been made, the intcrtsted p.rties shall also bc notified thercof. (ll78) ART. 1279. The expcn.es of consignation, when properly made, shall be charged against the creditor, (1179) ART. 1280. Once 1he consignation has been duly made, the debtor may a•k the judge to order the cancelhtion of the obligation. Beforcthccrcditorhasacceptcdthcconsignation, 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. 1281. 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 1he thing, The codebtors, guarantorJ and sureties shall be released. (118 l a) SECTION 2.-Lou of tl1c Thi11g Due ART. I 2&2. An obligation whid1 consins 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 lus 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 re•ponsible for damages. The u mc rule applies when the nature of the obligation requires the assumption of risk. (11822) ART. 128l. In an obligation to deliver a generic thing, the loss or destruction of anything of the some kind dots not cninguish the obligation. (•) ART. 1284. The courts shall determine whether, under the circumstances, the partial loss of the object of the obligation is so important a! to extingui•h the obligation, (n) ART. 1285. Whenever the thing i• Ion in the po1se.,ion of the debtor, it shall be pre•umed that thelol!"'asdue tohisfault,unlt.,there is proof to the contury, ~nd without prejudice to the provi•ions of article 1185. Thi• prernmption docs not apply in cas.c of earthquake, flood, 5torm Gr other natural calamity. ( 118h) ART. 1286. The debtor in obligations to do •hall also be rduscd when the pre1ta1ion becomes legally or physic.Uy impo1•ihle, without the fault oftheobligor. ( 11842) ART. 1287. When the •er\'ice has become so difficult as to be manifc•tly beyond the contempbtion of the parties, the obligor may also be re· leased therefrom, in whole or in part. (n) ART. ll88. When the debt of a thing ccttJin and determinate proceeds from a criminal offen.e, the debtor slul! 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 pen.on who should receive it, the lattH refused without justific;1tion to accept it. (llSf) ART. 1289. The obligHion having been extinguished by the loss of the thing, the creditor shall have all the rights of action which the debtor nuy luve againn third persons by reason of the loss. (1186) 5 1.CTION 3.-Co111fu11,,/iou or Reminio" of /b{ Debi ART. 1290. Condonation or _.remission is e.sentially gratuitous, and requires the acceptance by the ob!igor. It may be made expreHly or impliedly. One and the other kind shall be rnbject to the rul''' which go,·cm inofficious dvnations. Express rnndonativn shall, furthermore, comply with 'the fornu of donation. (1187) ART. 1291. The delivery of a private document evidencing a credit, made voluntarily by the THE LA WYERS JOURNAL Civil Code creditor to the debtor, implies the renunciation of the action which the former had against the Inter. If in order to nullify this waivu it should be claimed to be inofficious, the debtor and his hein may uphold it by proving that the delivery of the document was made in virtue of payment of the debt. (!US) ART. 1292. \Vhenever the private document in which the debt appears is found in the possession of the debtor, it >ha!! be pre1umed that the creditor delivered it voluntarily, unless the contrary is proved. (1189) 0 All«. 129). The renunciation of the principal debt 1hallextinguish the accessory obligations; but the waiver of the btter shall le2vc the former in force. (1190) ART. 1194. It is prernmcd thu 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. (ll9la) SECTION 4.--Co11fu1im1 or Mrrger of Righ/1 ART. 1295. The obligation is extinguished from the time the characters of creditor md debtor are merged in the same penon. (11922) ART, 1296. Merger which takes place in the person of the principal debtor or creditor benefits the guarantors, Confusion which takes place in the p<'UOn of any of the latter does not e1ttinguish the obligation. (1191) ART. 1297. Confusion docs not extinguish a joint obligation except as regards the share corresponding to the creditor or debtor in whom the two characters concur. (1194) SECTION 1.--Co111fl1"11ldlio11 ART. 1298. Compensation shall take place when two persons, in their own right, arc creditors 2nd debtors of each other. ( 119~) ART. 1299. In order that compensation may be proper, it is necessary: (I) That each one of the obligors be bound 1irincip>lly, and that he be at the same time a principal creditor of the other; (2) Th.r both debts consist in a sum of money, or if the things due are consumable, 1hey be of the same kind, 2nd also of the same quality if the latter hJs been ~ t ate d; (l) That the two debts be due; (4) That they be liquidated 2nd demand2blc; (f) That o.-er neither of them there be any retention or controversy, commenced by third persons 2nd communicated in due time to the debtor. (tl96) ART. 1:100. Notwith•unding the provisions of the preceding article, the guarantor may set up compcnoacion as regards what the creditor may ow• the principal debtor. (1197) ART. 1301. Compemnlon may be tot~l or partial. 'W'hen the two debts arc of the same amount, there i• a total compensation. (n) ART. 1302. The parties may agree upon the compensation of debts which arc not yet due. (n) ART. llOl. If one of the puties to a ~uit over an obligation ha• 2 cl.im for damages against the other, the former may set it off by proving hi1 right to said damages and the amount thereof. (•) ART. 1}04. When one or both debts arc rcscis•ihle or voidable, they may be compensated against each other before they arc judicially rescinded or ·2voided. (n) ART. IJOf. T he debtor who Jiu consented to the as•ignment of rights made by a creditor in f2vor of a third pl'rson, cmnot set up against the assignee the compcnsatiop which would pertain 10 him against the assignor, unless tbe aniguor was r10tified by the debtor at the time he gave his conwnt, that he res.crved his right to the compcnsation. 27) Civil Code If the creditor communic•ted the cnsion to him but the debtor did not consent thereto, the latter m>y set up the compenution of dcbu previous to the ce.,ion, but not of subsequent on••· If the usignment is nude without the knowledge of the debtor, he may set U? the compenution of all crediu prior to the umc and also hter ones until he lud knowledge of the assignment. (119h) Ao,T. \l06. Compensation t>kes place by operation of la"'• even though the debts 1my be p•Yablc n different pbces, but there shal\ be an indemnity for expenses of c~change or transporution to the pl.cc of payment. (1199•) ART. 1)07. Compensation shall not be proper when one of the debt$ arises from a depositum or from the obligations of a depositary or of a b•ilcc in commodatum. Neither e>n compcnution be set U? against a creditor who has a claim fo r suppon due by gratuitous tide, without prejudice to the provisions of p•ngnph 2 of article lll. (1!00>) ART. \JOS. Neither shall thue be compenution if one of the debts comisu in ' ci•·il Ji.bility arising from a pcn>I offense. (n) ART. 1309. If a person should h•VC against him scveul debts "·hich arc suscept ible of compensation, the rules on the •pplicnion of p>ymenu shall applr to the order of the compens•tio;m. (1201) ART. IJIO. When all 1he requisites mentioned in article 1299 are present, compenu1ion takes cff~t by operation of hw, and extinguishes both debts IO the concurrent amount, even though the creditor• and debtors arc not •WHC of the compcnudon. (IZOla) St:CTION 6.-Nor4/iQ11 ART. l JI l. Oblignion1 may be modified br: { I ) Changing their object or principal conditions; (2) Sub1tituting the pcnon of the debtor; {)) Subrogning a third person in the righu of the creditor. {120J) ART. IJl2. In order th•t an obligation may be extingui1hed by another which subuirntes 1he same, it is impcrativC that it be so declared i•l unequivoc•l terms, or that the old and new obligations be on every point incompatible with ••ch other. (120•) ART. Ill}. Novnion which consi11s in 11ubnituting • new debtor in the phce of the original one, nuy be made even without the knowledge or against the will of the I.lier, but not without the consent of the creditor. Payment by the new debtor giveJ him the rights mentioned in anicle1 IH6 •nd 12'7. {120.la) ART. 131'4. If the substitution is without the knowledge or against the will of the debtor, the new debtor's insolvency or non-fulfillment of 1he obligation 1hal\ not give rise co •ny li>bility on the part of the original debtor. (n) A~T. !Jll. The insolvency of the new debtor, who has been proposed by the original debtor and accepted by the creditor, sh>ll not revive tho action of the laucr against the original obligor, except when uid insolvency wu •lrudy existing and of public knowledge, or known to the debtor, when he dc!eg>ted his debt. (1206>) Au. 1Jl6. When the principal obligation i1 extingui,hed in consequence of a novation, •ccessory obligations m•y 1ub1ist only insofar as they may benefit third persons who did not give their consent. (1207) ART. 1}17. If the new obligation ;, void, the originalonesh>llsub1ist,unleutheparticsintended that the former 1'1nion •hould be extinguished inanyevent. {n) ART. 1Jl8. The novation i< void if the origi· nal obligation wu void, except when rnnulmcnt m•y be claimed only by the debtor, or when u· tification validnes acu which ore voidable. • (120h) ART. 1Jl9. If the original obliguion w•S 1ubjcct to• suspensive or re1olutory condition, the 274 new obligation shall be under the ume condition, unlcu it is otherwise stipulated. {n) ART. IJ20. Subrognion of a third person in the rights of the creditor is either leg•l or conventional. The former is not presumed, except in ca ... expressly mentioned in thi• Code; the l3 ttcr must be clnrly c.ublished in order thn it m•Y uke effect. ( l 209a) ART. IJZI. Com•entional rnbrog>tion of a third person requires the consent of the original pnties and of the third person. (n) ART. 1J22. It is presumed thn thue is leg•\ •ubrogation: ( I ) When a creditor pays mother creditor who is preferred, even without the debtor's knowle<lge; (2) When a third person, not interested in the oblignion, p•ys with the expreu or ucit approval of the debtor; {J) '11' hen, even without the knowledge of the debtor, a person intereucd in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the 1.iter's share. (l2 10a) ART. IJ2J. Subrogation transfers 10 the person subrogncd the credit with all the rights thereto appcruining, either •&•inst the debtor or against third 1>ersons, be they i;uat>n<ors or possessors of mongages, subjttt to stipulation in• corwcntionol subrogation. (12123) ART. I J2'*. A creditor, 10 whom p•rti>l payment has bet:n made, may exercise his righ1 for 1he ~~0ai~~3e;, ::;~ ]::bsr~~l~te~ r:cfl:~;edpl:;e t~: ~:::: of the parti•I payment of the ume credit. ( 121J) T11/,. //.-CONTRACTS Cl!APTHI I GENERAL PROVISIONS 1321. A contract is a meeting of minds between two pcr•ons whereby one binds himsdf, with respect to the other, to give something or to render some 1ervice . .(IZl•a) Ao,T. JJ26. The contr.cting parties nur c11ablish such stipul.tions, cl•usc., terms and condition• as they nuy deem convenie11t, pro•·ided they ore not contrny to bw, morals, good customs, public order, or 1>ublic policy. (lHh) Ao,T. IJ2 7. lnnomin>te contr>et< shall be regulated br the stipulations of 1he parties, by the ?<ovisions of T itles I and II of this Book, b}' 1he rules governing the most anJlogous nominate contracts, and by the customs of the place. (n) A11T. JJ28. The contract must bind both conuacting pntie•; its validity or compliance nnnot be [ef1 to the will of one of them. (l216a) A11T. IJ29. The dcterminotion of 1hc pi:rformance m•y be left to a third perso,,, "·bo1e decision sh>ll not be binding until it has been made known to both contracting p>rtics. {n) ART. IJJO. The determination shall not be obligatory if it is evidently inequiublc. Jn •uch ca<c, the court• sh•ll decide wh>t is equitable under the circum<tanas. ( n) A11T. IJJl. Controcts t•ke effect only bctwe<n the ?artic., their usigns •nd hcin, except in case where the righu and oblig>1ion1 ari1ing from the contract arc not tunsmi .. iblc by their nHure, or by •tipul>1ion or by provi•ion of law. The heir is not !iJble 0.yond the value of the property he received from the decedent. If • contract ;hould contain some 1tipubtion in f.vor of a 1hird person, he may demand in fulfillment provided he communicned his acceptmcc to the obligor before iu revontion. A mere incidennl benefit or interest of a person is not sufficient. The contracting p.rtics mu<e have ck>rly and delibentely conferred • favor upon a third person. (12l7•) A11T. JJJ2. In contr>cts creating real rigbt<, third person• who come into posseuion of 1he object of the contract He bound thereby, subject 10 the provision• of the Mong•ge bw and the Land Registration laws. (n) THE LAWYERS JOURNAL A11.T. llH. Crcditon arc protected in cues of contracts intended to defr>ud them. (n) Ao,T. lJH. Any 1hird person who induces another to violate his contract shall be liable for damages to the other contracting party. {n) A11T. \JJL Contracts arc perfected by mere consent, and from that moment the parties ore bound not only to the fulfillment of wh•t has bet:n•expre.,ly stipulated but also to all the consequences which, according to their nuure, may be in ket:ping with good h!th, uiagc md bw. (1218) . AaT. 1H6. Ru! contracU, such as dcposii, pledge and commodatum, arc not perfected until the delivery of the object of 1heobliga1ion. (n) ART. IJ}7. No one may contract in the name of another without being •uthorized by the !.ttcr, or unle5' heh .. by law a right to represent him. A contract entered into in the n>1ne of another by one who h•• no authority or legal representation, or who has acted beyond his powers, shall be unenforcnble, unless it i1 ratified, expressly or impliedly, by the person on whose behalf it hu been executed, before it is revoked by the other conirac1ing party. (12l9a) CHAPTER 2 ESSENT IAL REQUISITES OF CONTRACTS Gr1ur~/ Prol'irion ART. ! JJS. There is no contract unless the following requisites concur: (I) Consent of the contr>'1ing panics; (2) Object cert,in , .. hich is the 1ubjc(1 matter of the contract: {)) Cause of the oblig>1 ion which is e<ubHihed. {1261) ART. ]}}9. Consent is mwifcsted b}' tile mteting of the offer •nd the acceptrnce upon the thin;;: and the cause which are to constitute the contract. The offer mun be cuuin and the >ecepunce •b1olu1e. A qu>lified acccpt>nce constitute• a coun1er-offcr. Acceptance mode by letter or telegram docs not bind the offerer except frotn 1he time ic came to hi< knowledge. The contract, in such a case, is presumed to have been entered into in the plau where the offer was made. {1262a) Ao,T. 1}40. An aC<'Cptancc nuy be express or implied. (n) A11T. IHI. The per;-0" making the offrr may fix the time, place, an<l manner of ac"ptancc, all of which must be complied with. (n) ART. 1 H2. An offer m•dc through an agent is accepted from the time acceptance is communicated to him. (n) ART. IJH. An offer becomes ineffec.tive upon the death, civil interdiction,inunit)',orinsolvency of either party beforeacceptanceisconvered. (n) Ao,T. 1}44. When the offerer has allowed the offerce a cert•in period to .ccept, the offer may be withdrawn at rn}' time before acccpuncc by communicating such withdr•W•l, except when the option is founded upon a consideration, as something p>id or promised. (n) An. lHl. Unless it appears otherwise, bu1incss advertisements o( things for s.lc arc not definite offers, but mere invitations to make rn offer. (n) ART. I H6. Advertisements for bidders are simply invitnions to make proposals, and the advcrtii.cr is not bound to occcpt the highest or lowest bidder, unless the contury appears. (n) Ao,T. IH7. The follo"·ing nnnot gi\'e consent co a contract: ( I) Unemancipucd minors; (2) Insane or demented persons, and dufmutos who do not know how to write. (126J>) Ao,T. 1}48. Controcts entered into during a lucid interval are valid. Controcl>• agreed to in a state of drunkenn~-. or during ~ hypnotic spell are voidable. (n) · 1'.fay 31, 1949 An. I H9. The incapai;:ity dedored in article 1)47 i1 subject to die modific•riom determined by law, and i• un~entoo<I to be withom prejudice to spcciol di•qualificHions e•ubli•hed in the la"''· (ll64) ART. llfO. A contract where con•cnl i• gi\"cn through mi.ioke, \"iolencc, intimidation, undue influence, or fraud is voidJble. (l!6h) ART. I.Ill. In ordor thu mistake may in\"alidJte consenc, it 1hould rder IO the sub•toncc of the thing which is the object of the co1>tuct, or to those conditions "·hich ha\"e principally moved one or bmh panics to encer into 1hc contract, i\lisuke as to the identity or qu•lifica1ions of one of the plrtie< will vitiue con~nt. A simple lllis1ak" of a"ount slull give rise tn its cornction. (1!66a) AllT. lll2. \Vhen one of 1l1e par1iu is unable 10 read, or if the contract is io a bnguage not understood b}' him. and mistake nr fraud is alleged, the person enforcing the contract mun ohow that the terms ther"of have bttn fully c.~plaincd 10 the former. (n) A~T. l HJ. There i< no misukc if the party alleging it kne"" the doubt, contingency or risk affecting the object of 1hecontrJct, (n) ART. l.IH. i\lisuke on a doubtful question of la"', or on the construction or application thueof, nuy "iti:uc comcnt. (n) An. IJH. Thtre is \"iolrncc when in order tO wrest con..,nt, serious or irrcsi>tiblc force is emplo1·ed. There is in1imiduion when one of the comncting puties is compe\l~d hr a reuon•blc and wc\lgrounded fur of an imminent and gu\"e c\'il upon his perwn or property, or upon the perron or property of his spou..,, desccndanlS or ascend•nU, to give his consent. To determine the degree of the intimidation, the age, sex and condition of die person shall be borne in mind. A 1hrut to enforce one"s claim through compctenc au1hority, if the claim is jun or legal, dot-s not \"itiuc coment. (IZ67a) AllT. 1316. Violence or intimidation 5hall annul the obligation, :rlthough it may ha\"e b«n employed bra third p<"l!<ln 1•;ho did not take port in the coniract. (!Z68) ART. 1}17. 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 circutnstances •hall be considered: die confidential, family, spiritu>I and 01hcr relations betw.,.,n the parties, or the £act that 1he person alleged to have b«n unduly influenced was suffering from mental wuknns, or w" ignorant or in financial distress. {n) An. 1)18. There is fnud when, through insidious words or machinations of one of the contracting panic•, the other is induced to entu into a contract which, without them, he would not ha\"e agrud to. (1269) A~T. lll9. Failure to disclose hct5, when there is a dut}' !O re\'nl them, as when the panics uc bound by confidential rdations, cons1i1otti fr3ud. (n) AMT. 1)60. The usud exagger.tion in trade, when the otiler pHty had an opportunity to know the hns, H C not in thrmselves fraudulent. (n) A~T. 1J6l. A mere expression of an opinion docs not signify fraud. unless made by •n expert and the other party hJS relied on 1he former"s speci>l knowledge. (n) ART. 1)62. i\liireprcr.entation by a third person dot-• not viti11t consent, unless such misrepresentation hn crutcd rnbsuntial misuke. (n) A~T. JJ,6l. i\lisreprescntuion made in good faith is not fr.udulent but ml}' conltitute error '"' A~T. 1364. In order thu fraud may make a comracl \"Oid.bk it should be ..,rious and shou ld not !ia,•e been ,•mploycd by OOth contracting pHJ\·by 31, 1949 lncid~nu\ fraud only ololigc5 rhe pUS-On employing it to P•Y d•mages. (1270) Att.T. I J6l. Simulation of a con1rae1 may ~ absolute or relative. The former nkes phce when the panics do not intend 10 be bound at all; the latter, when die parties conceal their uue agreement. (n) ART. 1366. An 3bsolu1cly simuhtcd or fictitious contr~ct is void. A rehti\"e simuh1ion. when it dot-s l\Ot prejudice a tl>lrd pennn and i• not intended for aoy purpo•c contrary 10 bw, morJls, good cu11om" public order or public policy binds the pHtics to their rral agrermcnl. (n) St.<'TlON 2.-0hjrrl of Co11/rad• AR'r. [)67. All 1hing< which ar~ not ot1uid~ 1hc com111crcc of 1nen, including furnrc 1hings, may be the objcc1 of a cmuraci. All rights which arc no1 intrrnsminiblc nlly al<o be the object uf No conir~ct may be entered into upon future inhcrilJllCC except ' in cues cxprcnly authorized l..y hw. All sen•ices which arc not contrary to law, mo· uls, good cuHoms, public order or public polic}' may likewis.. be the object of a contract. (1271>) AMT. 1368. Impossible thing• or services cannot be the object of contracts. (IZ72) A~T. il69. The object of e\"ery contr.ct mun be determinate as to its kind. The hn tint the qu~nti1y is not determinJtc shall not be on obnade to the cxisiericc of the contract, pro .. idcd it i• possible to determine the nn>e, without the need of a neVI' contract between the parties. ( ll 7J) Si:cTrON 3.-Ca11sr of Co11trac/s IJ70. In onerous contracts the cau~ is undcntood 10 be, for each contrJcting party, the prc1tation or promise of a thing or JCrvice by the other; in remuneratory ones, the scr\"icc or benefit which is remunerated; and in contracts oi pure beneficence, the ,;.ere li~rality of 1he benefactor. (IZ74) A~T 1}71. The panicular motives of the pH1ies in rniering imo a contract are differcut from the C•usc thereof. ( n) A~T. ll72. Contracts without cau~. or with unlawful cause, produce no effect whatever. The cause is unlaw ful if it is contrary to law, morals, good customs, public order or public policy. (127Ja) At1.T. ll7J. The statemrnt of a fal1c cou5C in contracts shall render tl1cm void, if it should not be proved that 1hcy were founded upon another cause which is true and hwful. {1276) Ait.T. ll74. Although tl1e cou~ is not noted in the contract, it i• pre>umed that it exisn and i1 lawful, unlcu 1hc dcbior proves the contrary. (1277) ART. lJ7L Except in cases specified by l>W, lesion or inadequacy of cause shall not invalidate a conirac1, unlen there has been fraud, misuke or undue influence. (n) C1urT1C R l FORMS OF CONTRACTS A11.T. I J76. Contracts >h~ll be obligatorr. in whatc\'Cr form they may lnve ~en entered into, provided all the essential rcquisi1cs for their validity arc present. Ho"•cvcr, when the law requires thn a contracr be in some form in order that it may be valid or enforceable, or that a contract be pro\•ed in a certain way, that requirement 15 abwlutc and indispensable. In 1uch cases, the right of the parties natcd in the followil'g article connot be txerciscd. {127h) A~T. ll77. If the bw require> • document or other speciJ\ form, a< in 1he oci. and contrJCf< cnumer•ted in the following anick 1ht con1rac1ing por1ie1 may compel each oilier to obscr\"e 1hJt form, once the contnn has becu perfcc1cd. Thi• T H E LA WYERS JOURNAL Civil Code righ1 moy be txcrci!<'d simulnneou1ly with tlie ac1ion upon the contract. (1279a) ART. 1378. The following must appear in a public documcm: (I) Acts and con1roc11 which have for their object the creation, 1ransmi1>ion, modification or cxtinguishment of rcol rights over immovable property; ules of real property or of an interc1t ther~­ in arc go\"erned by article1 142), No. 2, and 1421; (2) The cession, repudiation or renunciation of hercdiury rights or of those of the conjugll l'Htnership of gain$; (.I) T he power to administer propeny, or my other power which hu for its object an acr appearing or whic'1 should appear in a public doi;umcni, or should prejudice a third person; (4) The cession of ac1ions or riglu.s proc.,.,ding from'" act appe.ring in a public document. All odier contracu where the amount involved exceeds fi•·c hundred pew• must appear in wricing, even a private one. But ulcs of gooch, chattel• or things in action arc governed by article• 1423, No. 2 and 142f. (l280a) REFORMATION OF INSTRUMENTS (n) Ait.T·. ll7,. When, there having been a mttting of the minds of the parties to a contract, their true intention isnotexpre1sed in 1hein<troment purporting to embody 1he agrttment, by reason of rpistoke, fr•ud, inequitable conduct or accident, one of the panics may uk for the reformnion of the in11rument to the end that such true intention may be exprened. If mi;takc, fraud, in~quicablc conduct, or occident has prevented a meeting of the minds of the ponies, the proper remedy is not reformation ol the instrument but annulmtnt of the contract. ART. IJSO. The principles of the general law on the reforma1ion ol Instrument! are herebv adopted insofar u they arc not in conflict with the provi•ions ol this Code. A~T. 1381. When a mutual minokc of the parties causes the failure of the instrument to di1closc their real ogrcemcnt, uid instrument may be reformed. Ait.T. ll82. If one puty wu mistaken and 1he other acted fraudulently or inequitably in such a way that the instrument docs not show their true intention, the former may ask for the reform•· tion of 1he instrument. ART. 083. When one party was misuken and the other knew or ~lie\'cd thot the instrument did not state their rul agreement, but concealed that fact from the former, the instrument m•y be reformed. Ait.T. 1)84, When through the ignor.nce, lack of 1kill, negligence or bod faith on the part of the person drafting the instrument or of the clerk or typist, the innrument docs not express the true intmtion of the panics, the coons may order that the innrumcnt be reformed. ART. IJSL If two parde• agrte upon the mortg•ge or pledge of real or personol property. but th" in11rument states 1hat the property is sold absol.ndy or with a right 0£ repurchase, reformation of 1he in5trumcnt is proper. ART. ll86. There shall be no reformation in the following cases: (l) Simple donations i11/rr 1fr01 wherein condition is imposed; (2) Wills; (J) When the real agreement is \"Oid. ART. ll87. When one ol the panics hu brought an action to enforce 1he instrument, he cannot subsequently aok for iu reformation. An. 1)88. Reformation may Ix ordered >t t he instance of either party or his succenon in interest. i( the mi•ukc was mutual: pchcrwise, upon pcti1ion of the injurtd p.r1y, or his l1'irs ond anigns. AkT. 1l 89. The procedure for 1hc reformJtion of instruments shall be governed by rules of court 10 be promu!garcd by the Suprrme Court. 275 Civil Code CHAPTEll J INTERPRETATION OF CONTRACTS AllT. 1).90. If the terms of a contract arc clnr and lca\•e no doubt upon the intention of the contracting parties, the literal meaning of its 1tipul:itions shall control. 1£ the words appear to be concruy to the n idem inttntion of the parties, the httcr shall prevail OVH the former. (1281) AllT. ll.91. In order to judge the intention of the contncting partil'I, their conttmpormeous and 1ubscquent acts sholl be principolly considereJ. (1282) AllT. tln. H owever general the tcrm1 of a contract may be, they shall not be understood to comprehend things that arc distinct and ca<es that arc different from those upon which the parties intended to agree. (1281) AllT. l}.9J. Jf some stipulation of any controct should admit of senora! mcani11gs, it shall bc undcrnood u bearing thu impon which is most adequate to render it effectual. ( 121'4) AllT. 13.94. The vuious stipulations of a contract shall bc interpreted togethu, attributing to the doubtful ones that sense which m ay result from all of them taken jointly. (12H) AllT. IJ.9S. Words which may han different significations shall be undentood in that which is most in kttping with the noture and object of the contract. (12&&) MT. 1396. The usage or cunom of the place shall bc borne in mind in the interpretation of 1he ambig\litiu of a comuct, and shall fill the ominion of stipuhtiom which are ordinuily esublished. (2n7) AllT. ll.97. The interpretation of ob1curc words or stipulations in a contract shall not fnor the party who causcd the obscurity. (1288) AllT. !HS. When it is absolutdy imponible to settle doubts by the rul!'S establi1bed in the preceding articles, and the doubu refer to incidental circumstances of a gratuitous contract, the luH transminion of rights .and interesu shall prevail. If the contract i1 onerou.,1hedoubtshall be settled in favor of the greatest reciprocity of interests. If the doubts are cut upon the principal object of the contract in such a way that it cannot be known what may have bttn the intention or will oftheparties,thccontract shallbcnulland\'oid. (128.9) AllT. l l.9.9. The principles of interpretation 1tatcd in Rule 121 of the Rules of Court shall likewi"' bc observed in the conslruction of con(•) CHAPTEll 6 RESCISSl8LE CONTRACTS ..\J.T. HOO. Contncu volidly agreed upon may bc rescinded in the cases esublishcd by law. ( 12.90) AllT. 1'401. The following contncu arc rcscissibk-: (1) Those which are entered into by guardians whenever the wards "'hom they represent suffer lesion by more than one-fourth of the value of the things which arc the object thereof; (2) ThO'le agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding number; (3) Those undertaken in fraud of creditori when the fatter cannot in any othu monncr collttt the claims due them; ('4) Thosc which refer to things under litigation, if they have bttn entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority; (f) All other contracts 1pecially declared by law to be subject to rescission. (12.91a) 276 AllT. 1'402. Paymmts made in a state of insol· vtncy for obligations to whose fulfillment the debtor could not be compelled at the time they were dfeeted, arc also rescissible. ( 12.92) ART. 140). The action for resds•ion is subsidiary; it cannot be in•tituted e~cept when the patty suffering damage lns no other legal muns !O obtain reparation for the ume. (129'4) AllT. H 0-4. Resciuion shall be only to the utmt n«:essary to cover the damages caused. (n) AllT. 140L Rcsciuion creates the obligation to return the things which were the object o( the contuct, together with their fruits, and the price with its interest; consequently, it can bc carried out only when he who demands re.cission can return whuevu he may be obliged to re1tore. Neither shall rescinion take pl•ce when the things which arc the obje<;:t of the contract arc legally in the possession of third pcnons who did not act in bad faith. In this case, indemnity for damages may be demanded from the person causing the loss. (12.9j) AllT. 1406. Rescission rderred to in Nos. 1 and 2 of article 1401 slnll not take place with respect to contracts approved by the couru. (129'1) AfT. 1407. All contracts by virtue of which the debtor alienates propeny by gratuitous tide arc presumed 10 ha\'C been entered into in fraud of creditors, when the donor did not reserve sufficient property to pay all debts contracted before the Jonuion. Alienations by onc"rouJ title arc also presumed fraudulent when m ade by persons against whom some judgment has been rendered in any instance or some writ of att achment haJ been iuued. The decision or attachment nttd not refer to the property alienated, and need not have bttn obtained by 1he party m:king the rescission. 111 addition to these presumptions, the design 10 defraud crediiors m•y be proved in any other manner rccognii:cd by the hw of evidence. (12.97a) A1"T. HOS. WhoeYet acquires in bad hith the things alienued in frzud of crediton, sball indemnify the latur for damages suffered by them on account of the olienation, whenever, due to any cause, it should be impossible for him to return them. If there arc two or more alicnalio1u, the firn acquircrshallbcliabletofine,andsoonsucccssively. (12.9&a) AllT. 140.9. The action to claim rescission mun be commenced within four yean. For persons under guardianship and for absentees, the period of four years shall not bcgin until the tcrminuion of the formor's incapacity, or until the domicile of 1he latter is known. (12.9.9) CHAPTEll 7 VOIDABLE CONTRACTS AllT. 1'410. The following contracts arc yoid· able or annullable, even though there may have bttn no damoge to the contracting parties: (1) Those where one of the parties is incapable of giving consent to a contract; (2) Those whtrc the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. These contracts arc binding, unless they are annulled by a proper action in court. They are 1usceptible of ratification. (n) AllT. 1'411. The action for annulment shall be brought within four years. This period shall begin: In cases of intimid11ion, violence or undue influence, from the time the defect of the consent In care of mistake or fraud, from the time of 1he discovery of the same. And when the action refers m controcu entered into by minors or other incapacitated pcnons, from the time 1he guardianship ceases. (llOh) THE LAWYERS JOURNAL AllT. 1'412. Ratificuion extinguishes the action to annul a voidable controct. (ll0.9a) AllT. HD. Ratification may be effected upressly or tacitly. It is understood that there i1 a ncit ratification if, with knowledge of the re.son which renders the contract voidable and Juch reason having ceased, the person who has a right to invoke it should uccute an act which neceuarily implies an in1ention to waive his right. (lllla) AllT. 1414. Ratification may bc effected by the guardian of th~ incapacitated person. (n) AllT. 1'411. Ratification does not require the conformity of the contracting party who has no right to bring the action for annulment. ( 1112) AllT. HI&. Ratification cleanses the contract from all iu defecn from the moment it wn constituted. (IJU) AllT. 1'417. The action for the annulment of contracts may be instituted by all who are thereby obliged principally .or subsidiarily. H owever, 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 b1e their action upon these flaws of the contract. {l l02a) A1"T .. 1418. An obligation having bttn annulleJ, the controcting parties shall re11ore to each other the t hings wbich have been the subject mu1er of the contract, with their fruits, and the price with iu interest, except in ca"'s provided by law. In obligations torender•ervice,thevaluethere· of shall be 1he ba•is for damages. ( IJOJa) A1"T. lH.9. 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 ucept insofar as he has been bcnefiteJ by the thing or price received by him. (ll0-1 ) A1"T. 1420. Whenever the person obliged by the decree of annulment to return the thing cannot do JO becausc it has been Ion through his fau!1, hesholl return the fruits received and the value of the thing at the time of the loss, wi1h interest from the same date. (ll07a) AllT. 1'421. The action for annulment of contraCB sh~ll be extinguished when t he thing which i1 the object thereofis 1011 ihrough the fnudor fault of the person who has a right to institute the proceedings. If the right of action is based upon the incapacity of any one of the contracting parties, the loss of the thing shall not be an obstacle to tht succeu o( the action, unless said loss took place through the fraud or fault of the plaintiff. ( Ulh) AllT. 1'422. As long u one of the contr.cting p.rtics doc:s not restore what in virtue of the decree of annulment he is bound to return, the other cannot bc compelled to comply with what i1 incumbent upon him. {IJOS) CHAl'TEll 8 UNENFORCEABLE CONTRACTS (n) A1"T. l42J. The following contracts He enforceable, unless they are ratified: { l) Those entered into in the nomc of another person by one who has been given no authority or legal npre~entation, 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 c~KJ an agreement hereafter made shall bc unenforceable by action, unless the Jame, or some note or memorandum thereof, , be in writing, and •ub1cribedby thepartycharged,orby his agent; evidence, therefore, of 1he agreement cannot be received without the writing, or a secondary tvidenee of in contents: May 31, 1949 (<1} An •grccmem thH by its urms is not to be performed within a yr.tr from the making thereof; (b} A special promise 10 •nswcc for the debt, default, or misc.rriage of ano1hu; (c) An agreement made in consideration of m~rrbge, other thrn a mutual promise to marry; (<f) An agreement for the ulc of goods, chattels or things in action, H a price not le$! 1han five hundred pesos, unleu the buyer accept and rcccil'e port of such goods and chat1eh, or the evidences, or $0me of them, of such things in action, or pay at the time some parr of the purchase money; but "·hen a u lc is made by auction and entry is made by 1hc auctioneer in his sales book, at _the time of the ule, of the •mount rnd kin<I of property wld, terms of ulc, price, names of the purchasers and person on who•e account the ulc is made, it is a >ufficicnt mcmor3ndum; (' ) An agrecmrnt for the lusing for • longer pcrriod th•n one yeor, or f~r the u lc of rul property or of •n interest therein; (/) A repreit:ntation u to the credit of a third person. (}) Those whnc both parties arc incap•ble of giving consent 10 a contract. Al\l'. 142-1. Unauthorio:rd contracts ore gov<rncd by article 1337 and the principles of agency in Title X of this 'Book. Al\T. 1421. Contucu infringing the Sututc of Frauds, rcforred to in No. 2 of •rtide !4H, arc ratified by 1he failure to object to 1he prei.entation of oul evidence to prove the ume, or by the acceptance of benefits under 1hcm. Al\T. 1426. When • contract is enforce>ble undH the Statute of 1:r>uds, and a public doeument i~ necnury for its registration in the Registry of D..'Cds, the panics may •vail themselves of the right under article 1377. Al\T. 1427. Jn a contract where both p1rtie1 are incapable of gi\'ing coni.ent, expreu or implied r11ific>tion by the pare~t, or guardian, aJ the case m>y be, of one of the contracting parties shall give the con1uct the um• effect as if only one oi them were incapacitated. If ratification is made by the parenu or guordi>ns, 11 the case may be, of both contncting parties, the contr1ct shall be V>lidated from the incep1ion. 1428. Unenforcc;ib]e contracts "nnot be asuiled by third pcr$0nS. CttAPTI!,_ 9 VOlD OR INEX ISTENT CONTRACTSI AR1·. 1429. The following contrac!s arc inexinent and void from 1he beginning: (I) Those whose cause, object or purpoi.e is contrary to law, morih, good customs, public order or public policy; (2) Thoi.e which ore absolutely simulated or fie· titious; p) Thme whose cauK or object did not c~ist at the time of 1he transaction; {4) Thoi.e whose object i1 outside the commerce of men; (f) Those which contemplate an impossible service; (6) Those where 1he intention of the panieJ rdnive to the principal object of the contract cannot be aicertained; · (7) Those cxpreuly prohibited or dedored void by l1w. These contracts cannot be ratified. Neither can the right to set up the defense of illegali1y be waived. 1New, cxcep{ articles !4ll and 14)2 ~ lay 31, 1949 Al\T, l4JO. The action or defense for the declaration of the inexisunce of a contracc docs not prescribe. Al\T. 14}1. When the nullity proeecds from the illegality of the cause or object of the contr>Ct, and the act constitutes a criminal offense, both parties being in pariilr/iclo, they sha1\ have no action agaimt coch other, and both shall be prosecuted. Moreover, the provisions of 1he Pen•l Code relative to the dispoul of dfe'1S or instrumenll of a crime shall be •pplicablc to the things or thr priceof1hecontract. Thi1 rule .dull bc applicable when only one of the parties i1 guilty; but thr innocent one m ~)' claim wha! he has givrn, and shall not Ix: bound to comply with his promise. (DOI) Al\T. 102. If the ae1 in which the unlawful or forbidden cause comiS{! doe! not cons1i1ute • criminal offense, 1he following rules 1hall bc observed: {1) When the fault is on 1hc pan of both controcting panics, 17cither may recover whot h•• has given by virtue of the contract, or dcmrnd the perform.nee of the other's undertaking; (2) When only one of the contrac1ing panics is H fault, 11' cannot recover what he hM given by real-On of the contract, or .,k for the fulfillment of what hu been promised him. The other, who is not at fault, may demand the return of what he ha' given without any obligation to comply with his p0romisc. (006) Au. 1433. Interest paid ln excess of the interest allowed by 1he usury l1ws may be recovtred by the debtor, with interest thtreon from the dite of the payment. Au. 1434. When money is paid or proper!)' delivered for ~n illegil purpose, the comrac{ may be rcpudiHcd by one of the panics before t11c purpose hu b<:en accomplished, or before any damage hu been c1uscd to a third person. In such cue, the courts may, ;f the public inures! will 1hu1 be subserved, allow 1he party repudiHing the contract to rl'Cover the money or prop<.:rty. Al\T, 1411. Where one of 1he P•rtics to an illeg1l contract is incapable of giving conunt, 1hc couru may, if the intcren of justice $0 demands, allow recovery of money or property delivered by the incapacitated person. Al\T. 1436. When the asrcement is not illegal p~r It bu{ is merdy prohibittd, and 1hc prohibition by the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered. Al\l'. 107. When the price of any article or commodity i• determined by statute, or by authority of law, any person p>ying any amount in excen of the maximum price allowed nuy recover such excel!. Al\T. 1411. When the hw fixes, or authorizes the fixing of the maximum number of hours of bbor, and a controct is entered into whereby a I.borer undertakes to work longer than the m;iximum thus fixed, he may demand addition•[ compensation for service rendered beyond the time limit. Al\T. 14l9. When the law i.ets, or authorio;cs the sctting of a minimum wage for laborerJ, and a contract is agreed upon by which a hboru accepts a lower wage, he shall be emitled to recover the deficiency. A&T. !HO. In cue of a divisible con1rac1, if the illegal terms can be separated from the legal ones, the Inter may be enforced. Al\T. 1441. The dcfeni.e of illeg>lity of contracts is not available to third persons whose interests arc not directly affected. Al\l', 1442. A contr>et which is the direct result of> prcvious illegal contrac1, is also void ond inexisten!. rHE LA WYERS JOURNAL Civil Code 1'11/e 111.-NA'fUKAL OBLIGATJONS 1 Al\T. 1443. Obliga!iom arc civil or natural. Civil obligations give a right of action to compel their performance. Natur1l obligations, not being based on pcuitivc law but on equity and notufll law, do nol grant a right of action to enforce their performance, but after voluntary fulfillmen t by the oblii;or, d1ey authorio:e 1he retention of what has been delivered or rendered by reason thereof. Some natural obliguions are set forth in the following articles: Al\T. 1444. When a right to sue upon a ci\'11 obligation has lapsed by extinctive prescription, tht obligor who voluntarily performs the contract can· not ucovcr what he has delivered or the value of the scrvice he hn rendered. J\l\T. IHS. When without the knowledge or •gainst the will of the debtor, a third pcrl-On pays a debt which thcobligor is not legally bound t:i pay because the action thereon ]us prescribed, but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he ha• paid. J\11T. 1446. When a minor be1 .. ·ecn eightttn and twenty-one years of age who has entered into a contract without the consent of the p•ren, or i;uHdiari, after the annulment of the contract voluntarily returns the whole thing or price rece!ved, notwithstanding the f•ct that he has not been benefited thereby, there ii no right to demand the thing or price thus returned. A11l'. 1447. When a minor between eighteen and twenty-oneyearJofage,whohasenteredinto •contract without the consent of the parent or guudian, voluntarily pays a rum of money or delivers a fungible thing in fulfillment of the oblig•tion, there shall be no right to reco\•rr the ume from the obliger who has spent or consumed it in good faith. {1160a) Al\T. 1448. When, after an action 10 enforce a civil obligation has failed, the defendant volunuri ly performs the obligation, he cannot demand the return of what he bas dtli,·ered or the payment of the value of 1he service ht hu rendered. A11.l'. 1449. When a tenatc or intestate heir •·oluntarily pay1 a debt of 1he decedent exceeding the ulue of the prol"'rty which he received by will or by 1he law of intestacy fron• the estate of the deccosed, the payment is valid and cannot be rescinded by the payer. Al\T. 1-110. When a will is declared void b.:ciusc it ha. not b.:cn executed in .ccordance with the form•litics required by law, but one of tht intestate heirs, after the ~ettlement of the debu of the deccued, pays a legacy in compliance with • d•use in the defective will, the payment i1 effective and irrevoc•ble. Title lV.-ES'fOl'PEL (11) 1451. Through estoppcl an admission or repre1entationisrenderedconclusiveupon1hepc:r1-0n making if, and cannot be denied or disproved a• agaimt the.person relying thereon. Al\T, 14J2. The principles of enoppel are hereby adopted in1-0far u they arc not in conflict with the provisions of this Code, the Code of Commerce, the Rules of Court and special l.ws. Al\T. HO. E!toppcl may be ;,, pair or by deed. AJ.T. HH. When a per$0n who is not tht owner of a thing i.ells or alienates and delivcu ;t. and later the teller or grantor ac:quirts tide thereto, suchtitlcpanesbyoperat ion of lawtothcbuyer or grantee. Al\T. 1415. If a perl-On ,in representation of another sells or •lienatt• a thing, rhe former cannot subsequently set up his own 1itlc as against tht buyer or graniee. l New, txcrpt •rticlt 1447. 277 Civil Code A11.T. 1416. A lessee or • b>ilei> is estopJXd from assening cide to 1hc 1hing Je.s.:J or received, osagainsit hclessororbailor. AllT. Hl7. When in a contract between third persons concerning immovable property, one of them is misled by • person wi1h res1:w.:ct to the ownership or reil right over 1he rul cstite, the Inter is precluded frmn osserting his ltgal tide or in1cren therein,providedalltheserequisitesarepresen1: (I) There mun be frauduknt rcpreseotuion or wrongful conculmen1 of facts known to the party cscoppe-d; (2) The party precluded must intend 1hu the other •hould 3Ct upon the focu u misreprucntod; (l) The pany misled must hH·c been unawH• of tho true hcts; •nd ('4) The party defouded must h•"• ocied iu Kcordance with tho misrepresenution. ART. 14!8. Oue who Ins ollowcd onother co 01sume •ppHent ownership of personal proputy for the purpose of nuking any transfer of it, cannot, if he received tho •um for which a pledge has been constitu1cd, sec up his own title co· defeat the pledge of the property, m•de by the other to• pledgec who received the umc in good faith and forvo lue. ART. 14!~- Enoppel is effective only as between the parties chcrtto or their succtssors in inTit/r V.-TIWSTS (>J) C11APTLll I GENERAL PROVISIONS ART, 1460. A person who escablishc1 a trust is called the trustor; one in whom confidence is reposed as regard~ property for the benofit of another penon is known u the trustee; and the • peuon for whose benefit che HUit hu been created i• referred to as the beneficiary. ART. 1461. Trusts ore either expreu or implied. Express tru1ts arc cruted by chc intention of the cru1tor or of the partiu. Implied trust! come into being by opcution of law. ART. 1462. The principles of the gcneril l•w of uusu, insofar a• they arc not in conflict with this Code, the Code of Commerce, the Rules of Court ond •pccial fa,.,., arc hereby adopted. CHAPTEk 2 EXPRESS TRUSTS ART. H O. No cxpren uuns concuning an immovable or any interest therein nuy be proved byparolevidenco. ART. 1464. No particuhr words arc required forthccreocion of anexpresstrun,icbcingsufficient chot •trust is dearly intended. Af;T. 146.1. No crust shall fail because the trustee appointed declines the designation, unle<s the i;ontury should appcar ·in the instrument connituting thc trun. ART. 1466. Acceptance by the beneficiary is necesury. Nevenhe]e,., if the trun impo~s no ontrou• condition upon the beneficiary, his acccptrnce 1hall be presumed, if 1hue is no proof to the contrary. CttAl'TllR ) IMPLIED TRUSTS ART. 1467. The enumeration of the following cases of implied trun docs not exclude others established by the general law of tru1t, but the limitation hid do,.,·n in article 1462 shall be applicabk Af;T, 1468. There is an implied trust when prope-rty i• sold, and the legal esute i1 granted to oncpanybutthepriceispaidbyonothcrforthe purpose of having the beneficial interest of the property. The former is the trustee, while the lucer is the bcncficiuy. H owe\'er, if the person to whom the title is con1·eyed i• a i;hild, legitimate or illegitimate, of the one paying the price of the 278 s.lc, no trust i1 implied by law, it being disputably presumed tlut there is a gift in favor of the child. ART. 1469. There is also an implied trust when a donation is made to a person but it appears thu although the legal esutc is transmitted to 1hc donec, he nevcrthcleu iseicher to ha\'C no beneficial interestoronly•partthereof. ART. 1470. If the price of a ulc of property is loaned or paid byonepersonforthebcnefitof ano1her and the conveyance is made to the lender or r•ycr co secure 1lic pap11cnt of the debt, a trust arise1 by operation of l•w in favor of the person to whom the money is loaned or for whom it i• paid. The latter may redeem the property and compel• con1·cyancc thereof co him. AllT. 1471. When l.nd passes by 1ucce.,ion to lny prrson and he causes the legal title to be put in the name of onother, a HUit is csubli•hod by imp!icuioll of bw for the benefit of tho true A,.T, 1472. If two or more persons agree to purcho~ property and by common con~nt the legal title i1 token in the name of one of 1hem for the bendit of all, a tru<t i< created by force of low in fa1·or of the otheu in proportion to the interon of uch. ART. 147), When propcny is conveyed to a person in rcl!.nce upon his dedared intention to holditfor,ortransferictoano1hcrorthegumor, there is an implied trust in hvor of the person whose benefit is concempla1ed. A11.T. 1474. If >IL absolut,e co1weyancc of propeny is made in order to se.:urc the performance of an obligation of the grrntor toward the grantee, a trust by virtue of law is estoblishcd. If the fulfillment of the oblig•tion is offered by the grantor when it becomes due. he m•y demand the rcconvcyance of the property co him. ART. 1471. When ~ny tru1tce, guardim or other person holding a fiduciary relationship usc1 trust funds for the purch•se of property md nu.cs the conveyance to be made 10 him or to a third person, • cruse is enablished by operation of law in favor of the person i:o whom the funds belong. ART. 1476. If property is acquired through minake or fraud, the pe-rson obtaining it is, by force of law, considered a trusttc of m implied crust for 1he benefit of the person from whom the property comes. ART. 1477. An implied nu>t may be proved by oral evidence. Tit lt Vl.-SALES CHAPTER I NATURE AND FORM 01' THE CONTRACT ART. 1478. By the contract of ule one of the contr.cting parties obligate himself to tran1fcr the Gwnenhip of and to deliver a dcterminue thing, ond the other to P•Y therefor a price certain in money or its equivalent. A contract of ule may be obsolute or conditional. ( IHh) ART. 1479. The thing must be licit and the \'endor must ha>·e :a right 10 uan1fer the ownership thereof at the tim~ it is delivered. (n) ART. 1480. A thing is determinate when it i1 particularly designated or physically segregated from all others of tho same class. The requisite that a thing be determinate is •ati<fied if at the time the cont ract is entered into, the thing is capable of being made determinoce without the ncces1ity of a new or furchcr agreement between 1hc parties. {n) ART. 1481. Things having a pottntial existence may be the object of the contract of sale. The efficacy of the ulc of a mere hope or expectancy is deemed 1ubject to the condition thu tho thing will come into exincnce. The sale of• vain hope or cxpcnancy is void. (n) ART. 102. The goods which form the subject of a contract of .,]e may be either existing goods, owned or possnsed by the seller, or goods to he T HE LA WYERS JO URN AL manuhcturcd, raised, or acquirrd by the seller after the perfection of the contract of sale, in this Title called "future goods." There may be a contract of u !e of goods, whose 2cquisition by the seller depends upon a contingency which m2y or may not happt-n. {n) ART. 148). The sole owner of a thing may sell an undivided interest therein. {n) A11.T. 1484. In the case of fungible goods, there m•y be a sale of an undivided share of 2 spedfic mass, though 1hc s.elln purports to sell and the buyer to buy a definite number, weight or measure of the goods in che m•S!, and though the number, weight or measure of the goods in the m31$ is und.etermined. By $Uch a u!e the buyer becomes owner in common of such a share of them.,< as the number, weight. or measure bought burs to the number, weight or mea<ure of the mau. If the mass contains leu thon the number, weight or measure bought, the buyer become! the owner of the whole mass and the seller Is bound to make good the deficiency from goods of the same kind and qu.lity, unless a conttar)' l!itent appears. (n) ART. 1481. Things subjcc1 to a resolutory condition moy be the object of the contract of uk (•) ART. 1486. In construing a contact containing provisions chaucteristic of both the contract ofule2ndofthecontractofagencytose\1, the essential clauses of the whole instrument shall be considered. (n) Af;T. 1487. A contract for tho delivery 2t a certain price of on orticle which tho vendor in the ordinary course of his busineu manuhcturcs or procures for the general market, whether the same is on hand •t the time or not, is a contract of nlc, but if the goods arc to be manufactured specially for the cunomer and upon his spcci•l order, •nd not for the gentral market, it ~ is a contract for a piece of work. (n) A11.T. 1488. If che consideration of the conIT.Ct consists partly in money, ond partly in another thing, the tranuction shall be characteri1.ed by the manifest intention of che parties. If 1Uch intention docs not clurly appear, it 1hal1 be con1idered a barter if the value of the thing given •s a pHt of the consideration exceeds the amount of the money or its equiv•lcnt; otherwise, it is a sale. (1H6>) ART. 1489. In order that the price may be considered cortain, it shall be sufficient thot it be 10 with reference to another thing certain. or that the determination thereof b.., left to the judg" ment of a spe-cified person or persons. Should iUch pcr1on or person• be unable or unwilling to fix it, tho contract 1hall be ineffkacious, un!e~s the parties subsequently agree upon the price. If the third person or persom acted in bad faith or by minake, the cour11 may fix the price. Where such third person or person• are prevented from fixing the price or terms by fault of the seller or the buyer, the party not in fault may have 1uch remedies against the party in fault as arc allowed the ~ lle r or the buyer, u the '""' may be. (IH7a) ART. 1490. Gross inadequacy of price docs not affect a contract of sale, except as it may indicne a defect in the cons.:nt, or dut the parties really intended a donation or some other act or conuoct. (•) ART. 1491. If the price is simuloccd, the sale is void, but the act may be shown to ha"e been in reality a don•tion, or some other .ct or contract. (•) ART. H92. The price of securities, grain, liquids, ond other thing• shall also be considered certain, when the price fixed is that which the thing sold would h•ve on a definite day, or in particular exchonge or makct, or when an amount i• fixed abo"e or below the price on such da}', or in such exchange or market, provided uid amount be certain. (1448) ART. 149J. The fixing of .tho price can never be left to the discrecionofoneof the parties. H owMay 31, 1949 ever, if the price fixed by one of the p•rties .ccept· cd by the othn, the sale is perfected. (14491) AllT. 14H. Where the price e>nnot be determined in •ccord•nce with the preceding 1rticks, or in any other m•nner, the contr1ct is ineffic•· cious. However, if the thing or 1ny pHt therwf hu been deli..ered to and 1pproprined by the buyer, he must pay 1 reasonable price therefor. Whn i1 1 rosonable price is a question of f1ct dependent on the c;reum1unces of each pHticubr cue. (n) AllT. 14!H. The contract of u\e is perfected n the moment there is a meeting of minds upon the thing which is the object of the comr2ct and upon the price. From that moment, the puties may re<.:iproc1lly demand performance, subject to the provisions of the law governing the form of contracts. (lOOa) A"T· 1496. In case of a ule by auction: (l) Where goods arc put up fors1lebyauclion in Jou, uch lot is subject of 1 separne contract of nk (2) A sale by auction is perfecu'd when the ;i.uctioncer announcC5 its perfection by the fall of the h•mmer, or in other cu1tomary m1nner. Until rnch 1nnouncement is made, any bidder m1y retuct his bid; and the 1uctioneer may withdr1w the goods from ulc unless the auction hu been 1nnounced to be without restrve. (l) A right to bid may be reserved upreuly by or on behalf of the seller, unless otherwise pro· vided by law or by stipulation. (4) Where notice hu not been given that• sile by 1uction is subjcet to a right 10 bid on bch1lf of the seller, it slull not be lawful for the seller to bid himself or to employ or induce 1ny person to bid at such u !e on his beh>lf, or for the auction«•, to employ or induce any person to bid >t such ule on beh.lf of the seller or know· ingly to uke any bid from 1he 5cller or any other person employed by him. Any ule contravening this rule may be u eu ed as fuudulent by the buytr. (n) An. 14!17. The ownership of the thing •old •hall be tu11sferred to the vend~c upon the actual or constructive deliver)' thereof. (n) A11T. 1498. The panies m•y stipulate 1hu ownership in the thing shall not pus to the pur· chaser until he ha. fully p1id the price. {n) AP.T. 1499. A promise to buy 2nd 5el\ a d~· tuminue thing for a price ceruin ii rtciprocally dem1ndabk An 1ccepted unilncra\ promise to buy or sell a deurminne thing for a price ccruin is binding upon the promisor if the promise is supported by a consideration dininct from the price. (14!1•) ART. 1100. Any injury to or benefit from the thing sold, after the contract has been perfected, from the moment of the pufcetion of the con· tract to the time of deliHry, shall be governed by utides 1181 10 1181, and 1282. This rule shall apply fo the ulc of fungible things, made independently and for a single price, or without considention of their weight, number, Should fungible things be sold forapricefixe.J according to weight, number, or meuure, the risk shall not be imputed to the vendee until they hne been weighed, counud, or me.sured, •nd delivned, unlcs• the hucr ha1 incurred in dday. 04121) A.,T. 1!01. In 1 contr•ct of ulc of goods by description, or by umplc, the contnct may be rescinded if the bulk of the goods delivered do not correspond with the de1eription or the umplc, and if the contract be by sample •• well as by description, it is not sufficient thu the bulk of goods correspond with the sample if they do not also correspond with 1he dcs.cription. The buyer shall have a reasonable opportunity of comparing the bulk with the dncription or the s.mple. (n) ART. 1!02. Whenever earnest money is given in a contract of sale, it shall be considered u part May Jl, 1949 of the price and as proof of the perfection of the contract. (i'IHa) A1'.T. 1103. Subject 10 the provision1 of the Statute of Fuuds and of any other applicable natute, 1 contuct of nle may be m1de in writing, or hy word of mouth, or pntly in wri1ing and partly by word of mouth, or m1y be inferred from the conJuct of the puties. (n) Au. ll0-1. In a contr•ct of ule of persona! property the price of which is p•yable in install· ments, the vendor niay exercise 1ny of the following remedies: (I) Euct fulfillment of the obligation, should thevendeefailtopay; (2) Cancel the salt, should the vcndee's failure to P•Y cover 1wo or more installments; (l) Foreclose the chute\ mortgage on the thiugsold, ifonehHbeenconstituted,should 1he vendcc't failure 10 p•y covu two or more installments. In this case, he shall have no further action ~gainst 1he purchaser to recover any unpaid balance of · the price. Any agreement to the contrary sh11\ be void. (141'1-A.a) ART. ISOJ. The preceding arJicle shall be •Pplied to contr>eu purporting to be leases of per+ sonal property with option to buy, when the lessor has depri\'ed the lossco of the posses•ion or enjoy· ment of the0 thing. (14i'l·A·a} AkT. 1106. In the cue1 referred to in the two preceding uticlts, a stipulation that the install· menu or rcnu paid 1h~ll not be returned to the vendce or lessee sh.J I-be valid in•ofar u the ume may nor be unconscionable under the circum· stances. (n) AkT. liOi. The expenses for the execution md rcginruion of the nle shall be borne by the ven· dor, unlcn there is a stipulation to the contrary. (\Oh) An. I 108. The expropriuion of property for public u1e i• governed by special laws. (14J6) C11.-rTI!" 2 CAPACITY l'O BUY OR SELL AllT. 110?. All persons who arc authorized in this Code to obligate them'>Clves, may enter into a contract of ule, saving the modification1 con· tained in the following articles. Where nccc•u rirs ue sold and delivered to a minor or other person without C1p1City to act, he mu•t pay a reasonable price therefor. Neces· saric• are rho•e referred to in article 310. (1'417a) AllT. 1110. The husband and the wife cannot ,,.11 property to each other, netpt: (I) When a iepantion of property was agreed upon in 1hc marriage scttlm1cnt1; or (2) When there bu been • judici>l sepHation of property under 1nicle 211. (14lh) Al\T. \fl!. The following pers.ons cannot acquire by purch•sc, even at a public or judicial auction, either in person or through the media· tion of another: ( I) The guudian, the property of t he person or persons who may be under his guardianship; (2) Agenu, the property whose •dministration or ule .nuy have been intru1ted to 1hcm, unless theconsentofthcprincip•lhasbecngi\'Cu; ()) Exccuton and •dmininntors, tho property of the estne under administrations; (4) · Public officer& and cmplorces, the propertr of the State or of any subdivision thereof, or of my government owned or controlled corpoution, or institution, the administration of which has been instrusted to 1hem; this provision sh.II apply to judges and government experts who, in any m~nner whatroenr, take put in the sale; (l) Justices, judges, prosecuting 1ttorneys, clt rks of superior 1nd inferior courts, and other officers 1nd employees connected with the adminis· trationof justice, thepropeny and rights in liti· gation or levied upon an execution before the court within whose juri1diction or territory they eurci1e their respective functions; this prohibi· tie>n includes the act of acquiring by assignment THE LA WYERS JOURNAL Civil Code 30J thall apply to lawycr5, with respect to the prot>e1ty 2nd dghu which may be the object of ny i.tiguion in 'Vl'hich they may uke pnt by virtue nf il1eir profes1ion; (6) Any others ~pccially di1qualified by law. (109a) Au. 1!12. The prohibitions in the two pre· ceding articles are applicable to sales in legal re· dcmption, compromises and renunciation!. (n) \:HAPTU ) EFFECTS OF Tr.IE CONTRACT WHEN THE THING SOLD HAS BEEN LOST AP.T. llll. If 11 the time the contract of 1alt is perfected, 1he thing whieh i• the object of the contract has been entirely lost, the contract shall be without •ny effect. But if the thing should hal'e been lo1t in part only, the vendee may choo1e between withdrdwing from the contract and demanding the remaining p.rt, paying its price in proportion to the total sum agreed upon. (14601) A"T. Ill~. Where the parties purport a .ale of specific goods, and the goods· wi1hout the knowledge of the 1ellcr have peri1hed in pan or have wholly· or in a material part so deteriorated in quolity as to be 5ub11mtially chrngcd in chuacter, 1he buyer may al his option treat the sale: (I) As avoided; or (2) A1 valid in all of the ex is1ing goods or in 10 much thereof a! have not deteriorated, md as binding the buyer to pay the agreed price for the good1 in which the ownership will pass, if 1he 1ale was divisible. CHAPTEI\ 4 OBLIGATIONS OF THE VENDOR SECTION 1.-Gtntr.rJ Ptodiions A.,T, IJI J. The vendor is bound to transfer lhe ownenhip of and deliver, u wdl a. war!lnl the thing which is the object of the nit. ( l46h) A.,T. ll16. The ownership of the thing sold i• acquired by the vendce from the momen1 it is de· hHttd to him in 1ny of the ways specified in aniclcs IJl7 to 1121, or in 1ny other mrnncr sig· niiyins 1n •grccmcnt thn the posicuion is uan•fcrred from the vendor tv the vendee. (n) SECTION 2.-Dt/h•try of lbr Thmg Su/d A.,T, IJl7. The thing sold shall be un<lcr>1uoJ as ddivcred, when it is pbced in the control and po•session of 1he vcndee. (146h) Au. lJJ8. When the sale i1 nude through ~ public instrumen{, the uecution th~rcof shall be equ;valent to the delivery of the thing which is the object of the contract, if from the deed the COl!lury .lacs not appc:ar or cannot clearly be inferred. 'X'ith regud 10 movable property, iu delivery mar also ht" made by the delivery of the keys of the place t;>r depository where it is 1torcd or kept. (146h) AJ.T. 111?. The deliverr of movable propcnr m•y likewii.c be made by the mere consent or agreement of the contracting parties, if the thing sold cannot he transferred tothcposseuionofthe Hndee at tlie time of the 1ak, or if 1he l•tter alrt1dy had i1 in his posseuion for any other rnson. (1463a) Ji.1\1. 1120. Thuc may also be uadition <Wllfiluf1rn1 ponrnorium. (n) A.,T. 1121. With respect to incorporu! propcrty, the proviiions of 1he first paragraph ofar· 1iele 1118 sh•ll govern. In any other case wherein uid provisions arc not 1Pplicahle, the placing of the tides of ownership in the possession of the Yendce or the use by the vendec of hi1 rights, with the vendor's consent, d1all be understood ~· 1 deliv~ry. (1464) 279 Civil Code Ain. 1122. When goods arc ddivcred to the buyer "on ulc or return" to gi'"c the burn an option to return the goods i111teld of pa)·ing the price, the o••ncrship pu1cs to the buyer on dcli\"cry, buc he mJy revcn the ownenhip in the seller by returniog or tendering the good1 within the time fi~ed in the contru, or, if no time ha1 bun fi~ed, within a reasonable time. (n) When goods arc delivered to the buyer on ap· proval or on trial or on ntisfaction, or oihcr 1imihr terms, the ownership therein panu to the buyer: ( \) w·hen he signifies his appronl or acccevunce to tht ~llu or docs any other act adoptini: the tnn s~c tion; (l ) If l'c Jocs nor ~ ignify his approul or acccptance 10 thc seller, but rctains the goods "'ithout gi\•mg notlce of rejection, then if a time hl• l-een f11ed for the return of the goods, on the npiration of such time, and, if no time hu ~en fixed, on the o:piutioo of a ru•onable 1imr. Whn 11 a rea•onable time is a question of fact. ( o) Aa.T. ] j2). Where 1here is a comuct of ul( of specific goods, the seller may, by the turns of the cont ract, re1crvc the right of posi<J$ion or o•·ncrship in the good• until ceruin condi1 ions have been fulfilled. The right of pouession or ownership nuy be thus resen·ed notwithstanding the delivery of the goods to the buyer or to • carrier of other bailee for the purpose of tran~­ misiion IO the buyer. Whore goods uc .1hipped, and by the bill of bding the goods arc dcli,,crable to the selkr or his agent,ortotheordcrof thestlterorof hi< •sent, the seller thereby reser..cs the ownerohip in the goods. But, if except for the form of tho bill of hding, the ownership •·ould have pasi<d 10 the buyer on shipment of the good•, the 1oller'• f>ropcrty in the goods shall be d«med to be onlr for the purpose of securing performance by tlw bu,.er of his oblignions under the contract. Where goods uc .1hippe1!, a~d by the bill of lading the i;oods are dcli,·crable 10 order of the buru or of his ai;cnt, but possession of the bill of lading is retained by the seller or his 1gent, the .1ellor thereby reserves a right to the pouo1ion of the goods as again!t the buyer. \li'here the seller of goods duws on 1he burcr for 1he price and tunsmits the bill of uclun~c and bill of hdins togeihcr to the buyer to i<curc acceptance or payment of the bill of exchange, the bureri1bound rn return the bill of lading if ho do(1 not honor die bill of exchange. and if he wrongfull y retains 1hc bill of bding he acquiH• no added right 1hcrebr. If, ho••e\·cr. 1hc bill of lading pro•·idcs due 1hc sooJ$ "e deliverable to the buyer or 10 the order of the bu)'er, or;, indorsed in hhnk, or 10 the buyer by the con•igncc named therein, one • ·ho purcha ~i in good fai1h, for ,·aluc, the bili of lading. or goods from the buyer "·ill obta in the ownership in the goods, althoughthebillofe:tchangeha1notb...,,,nhonorcd, provided thu such purcha<er has reeeivcd dcliwry of 1he bill of lading indorRd by the con.1ignoo named therein, or of the goods, withou1 notice of the facts makini; the transfer wrongful. (n) Aiu. l!Z'4. Unlc5s otherwi.e agrccJ , 1he good5 remain n the ,1.Cllcr"5 ri>k until the ownership therein is uan.lfcrred 10 lhc bu yer. but when the ownership ll1ucin i1 tumferrcd to the bllyer 1hc goods He at the buyer"• risk whedier aduJI dcli - \"cry hu been midc or not, except 1hat: {I) Where deli•·ery of the goods bas been made to 1hc buyer or to a bailee for the bu )'<r. in pursuance of the contract and the o .. ·ncrship in the goods hls been retained by the "'Iler merel y to secure perfonmnce by the burcr of his obtii;uions under the contr3Ct, t he goods arc at 1he buyer's risk from the 1ime of such delivery; (2) Where acrnal deli•·cry has bem delayed through the fa ult of either the buyer or icller the good1 >re a1 the risk of the party ln fault. (o) A11T. IS21. Subjec1 to the pto\"isions of this Tide, where goods arc sold by a person who is 280 not the owner tl1errof, and who d0('5 not sell them under authorit)' or wi1h the consen1 of tl1e owner, the bu)'<r acquires no beuer tide to the goods than 1hc seller had, unless the owner of die goods ii by hi, conduct procludcd from denying tlie >eller's authority 10 sell. Nothing in this Title, however, 5hall affect: (l) The provisions of any factors' acts, recording laws, or my mher provision of law enabling the apparent owner of goods to dispose of 1hem ~s if he were the uue owner thereof; (2) The ulidity of .ny contrac1 of sale under starnrory power of sale or under the order of a court of competent jurisdiction; (l ) Purcl1Jses made in a merchmt'• store, or in fain, or markets, in accordance with the Code of Commerce and ipecial hws. (n) J\llT. ll26. Where the seller of goods has a void.1blc title thereto, hue his tide hu not been voidc1I at the time of the sale, the buyer acquires • goo1I tide to the goods, provided he buys them in good faith, for value, and ••i1hout notice of the seller's defect of tide. {n) A11:r. 1127. A document of tide i" "·hich it is suted that the goods referred 10 therein will be 1!clivercd to the ~arcr, or to the order of any person named in such document is a negotiable docun1cnt uf 'tide. (n) J\ll.T. H28. A negotiable document of tide nny bcnegoiiatcd by delivery: ( \) Where by 1he Hrnu of the document the c>rricr, warehouseman. or ocher bailee i.1uing the same undcrukes to dcliHr the goods to the bearer: or (2) Where b)• the terms of the document the .: arrier, w>rehou5omln or other bailee issuing 1he u mc undcrukes to deliver the goods to the order of a specified pct1011, 3nd such person or a subsequent indonec of the <locumc11t !us indorsed it in bllnk or to the bearer. Where by the terim of a negotiable document of 1idc the good• •Tc delivcublc to bearer or where a negoti>blc docum~n! of titl~ h>s bttn indoncd in bhnk or to beai:tr . .ny holder m•y indonc the umc to hinuclf or to anr 5pecificd person, and in such osc th< document shall thcrelfter be negotiated only by the indorsement of lioch indonce. (n) A11;1·. 11 2!1. A negotiable document of tide m•Y be ncgoliucd by the indor~ment of the person 10 who1c order 1he good1 arc by the tcrm1 of the document ddiverabk Such indor,1.Cmcn1 may be in bbnk, to bearer or rn a ~ pccificd pcrso11. If indum:d to• •pccified person, ii may~ again ncgoti•tcJ by the indori.m1cnt of such person in bhnk, to bearer or io •noth~r •ptcified person. Subsequent m'gotiuion> 111ay be made in like manner. (n) A11T. 1110. If a document of title which conlli1" l n undertaking by a nrrier, •·art housenun or 01hrr bailee to dcli1·er the goods to bearer, to a •pcci fied person or order of a specified person or which contain! words of like import, has placed upon it the words "not negotiable,'' "non-negoti3ble" pr die like, .1uch document may n<l'Crthelen ~negotiated b>· the holder and i1 a negotiable documc1\I of title within the meaning of this Tide. Bot nothing in thi1 Title conuined .h.11 be construed as limiting or defining the effect upon the obligHioul of 1he carrier, •·are!iou1enun, or other bailee i .. uing a docume11t of litle or phcing thereon the •·ord• "not negotiable," " non-negotiable," or the like. (n) A11T. 1131. A document of title • ·hich i1 not in such form that i1 nn be negotiated hr ddiHry may be tra111forrcd by the liolder by delil'cry to a purchaser or dontt. A non-n(sotiable d<>eument cannot be negotiated and the indorscmcnt of $uch a document gil'CS the tr3n1ferce no addition•! right. (n) A11T. lll2. A negoti~b!c documeut of title nuy ~negotiated : ( 1) By the owner thueof; or (2) By any person to whom the posi<ssion or custody of 1he document hu been entrusted by the owner, if, by the tcrm1 of the document the THE LA WYERS JOURNAL bailee i .. uing the document underukcs 10 deli>·cr the goods io d10 order of 1he person 10 ••hom the poncssion or custody of the document has ~cn entrusted, or if at 1he time of 5uch entruning the document is in such form that it m•y be negoliued by delivery. (n) An. HH. A person to whom a negotiable document of tide has been duly ncgoti•1cd acqui rt1 1hereby: ( I ) Such title to the good, as 1he person negotiating the document to him had or had 1bi\i1y to convey to a purchaser in good faith for value rnd also such title to the goods as the penon to whose order the goods were to be delivered by the terms of the document had or had ability to convey to a purchaser in good faith for value; md (2) The direct obligation of the bailee inuing the document 10 hold pos,1.CMion of the goods for him according to the terms of the document u fully as if such bailee had conructed directly with him. (n) AlT. l lH. A person to whom a document ,,f tide has ~en uansfcrrcd, bur not neg:o1iated, acquires thereby, as against the transferor, 1he tit!~ to 1he goods, subje<:t to tht terms of any agreement with the transferor. If t be document is nol\-negotiable, such pctiOn also acquires the right to notify t he bailee who iuued the document of the transfer t hereof, and thereby to acquire the direct obligation of such bailee 10 hold possession of the goods fo r him according rn tlic ierms of the document, Prior to the notification to 1uch bailee by the tr~nsfcror or tr1n5foree of a non-negotiable document of title, the title of the umsfcrcc to the goods and the right to acquire the obligation of such bailee may be dcfu1ed by the levy of an attachment or uccution upon the goods by 3 credi1or of die tran1fcror, or br a notifin1iun to suchbailcebythctran1fcrororasub>equen1 pureha1cr from the transferor of a subsequ:nt ule of 1he goods by the transferor. (n) A11T. \j)f. Where a negotiable doc ument ol title is transferred fo r value by dcliverr, and tht indorsement of the transferor is essential for negotiation, the tran1ferec acquire! a righ1agai1nt1lic tran1feror to compel him to indorsc the docmncnl unless a contrary int<nlion appears. The negotiation shall nke effect as of ihe lime when 1he indorsement is actually made. (n) A11T. ll36. A person who for uluc iwgotiatu or tran ~ fcrs a documenl of title by indorKmtnt or delivery, including one who assigns for \•aluc a claim secured by a document of title unlcos a contrary intention appears, warranu: (I) Thu 1hc dCKumr nt ;, genuine; (2) That he hls a kg•l right rn nrgoti•it or tu111fer it; (l) That he hu koo"·kdgc of no hct •·hich would impair 1he validity or •·orth of the documen1; and (4) Thac he has a right 10 tran5fcr the 1idr to the goods and chat the goods arc merchaniable or fit for a particular purpose, whenever 1uch •·atrantics would liavc been implied if 1he contract of the pu1ies had ~en IO tran1fcr without a document of ' titlc the goods represented thereby. (n) A11T. 107. The indorscment of a document of title 1lull not make the indorser liable for any failure 011 the l)Ht of the bailee who issued tht document or previous indorsers thereof to fulfill their respecd•·c obligatiom. (n) AllT. 1138. T lie validity of the negotiation of ~ negotiable document of title is not impaired br thefacttbatthcnegotinion••a•abrcachofduty on the pu1 of the person nuking the negotiation, or by tbc facr. that the owner of 1he document wu depri\·ed of 1hc possession of the Jome by Ion, theft, fraud, accident, mi1tlke, duress, or coovcr5ion, if the person to whom the document was negotiated or a person to wholn the document was subsequently negotiated paid value therefor in good faith without notice of the brel'h of duty, or loss, thdt, fraud, accident, mi~t•ke, durc•s or eonversion. (n) May 31, 1949 AKT, lfl9. If goods are delivered to a bailee by the owner or by a person whose act in conveying the tide to them to a purchaser in good faith for nlue would bind the owner and a negotiable document of tide is iuucd for them they nnnot thereafter, while in poucssio11 of rnch bailee, be atuched by guni<hment or otherwise or be Jc,·icJ under an execution unkH tlw document be fint rnrrrndered to the bailee or iu negotiation enjoined, The bailee shall in no use be com· pelkd 10 deliver up the actual possenion of the goods until the document is 5uucndered to him or in1pounded by 1he court. (n) AKT. 1140. A cn:ditor whoie debtor is the owuer 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 utisfying the claim by mcan1 thereof u i1 allowed at hw or in equity in regard to property which cannot rndily be atuchcd or levied upon by ordin>ry legal process. {o) AKT. IHI. Whether it is for the buyer to uke possenion of the goods or for the Kller to send them to the buyer is a question depending in each caie on the contract, express or implied, bet"''ttn the putics. Aput from any rnch contract, express or implied. or uugc of trade to the contnry, the place of delinry i1 the Kller's place of busineu if he hn one, and if not his residence; but in enc of a contract of ulc of specific goods, which to the knowledge of the partit1 when the contract or the ulc "'l• made wuc in some other pbce, then that place ;, the pbee of dc[i,·ery, Where by a contract of nlc the Ki!cr is bound to send the goods to the buyer, but no time for ..:nding, them is fixed, tl1e seller is bound to stnd them "'ithin a reasonable time. Where the goods at 1he time of ule arc in the pcmession of a third person. the seller lus not fulfilled his obligation to deliver to the buyer unless and until such 1hird person acknowledges to the bu)'tr that he holds 1he good• on the burer's behalf. Ikmand or tender of dcli .. cry may be trc>ted u incffectu>l unleu nude at a rusonable hour. Whu i1 a reasonable hour is a question of fac1. Unless other,..•i..: agreed, the upcn..:s of and incidental to putting the good1 into a ddivcub\e state mun be borne by the seller. (n) AJ.T. 1142. Whcre the iellcr deliven to the burer a quantity of goods less tlun he contuctrd to 1cll, the buyer may reject them, but if the buyer accepts or reuim the goods so dcfo·cred. knowing that the seller is not going to perforrn the contract in full, he must pay fo r them at the contract nu. If, howe\'er, the buyu hu used or disposc.d of the goods delivered before he knows chat the seller i1 not going 10- pcrform his contract in fu11,thebuycrshall not be liable for more dun the fair value to him of 1he goods so received. \Vhcre the seller dcli•·crs to the buyer a qunti1y of goods larger than he contucicd to sc.11, the buyer may accept the goods included in the con· traC\ and reject the rest. I( the buyer accepu the whole of the goods'° deli••ercd he must pay for tl1em JC the contract nte. \\:'hcrethesellerdeliverstochebuyerthegoods hr contracted to Kil mixed with goods of a different description not included in the contract, the buyer may accept the goods which uc in acconbncc with the contract and reject the rut. In the prcccding two paragraphs, if the subject m>1trr is indivi•ible, the buyer may reject the whole of the good•. The provisions of this uticlc uc subject to any usage of trade, special agreement, or courie of duling betw«n the parties. (n) AKT. lf4). Where, in pursuance of a contract ofn!c,thesc.!leri1authorizedorrequircdtosc.nd the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or no1, for the purpose of transmission to the burer is deemed to be a Jdivery of the goods to the buyer, JHay 31, 1949 except in the caKs provided for in utlcle 112', first, second and third paragraphs, or unless a contrary intent appcus. Unless otherwise. authorized by the buyer, the seller must make such contract "''ith the carrier on behalf of the buyer 1s may be rcuonablc, hav· ing regard to the nHure of 1he goods and the other circumsunces of the cue. If the sc.ller omit so to do, and the goods- arc Ion or damaged in course. of transit, the buyer may dcdinc to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible in. damages. Unless othcrwi!C agreed, where goods arc sent by the seller to the buyer under circumitance1 in which the seller knows or ought to know thu ii is usul to insure, the seller must give such notice to the buyer as may enable him to inrure them during their transit, and, if the 11eller fails to do so, the goods shall be deemed to be at his risk during such transit. (n) AKT. 1544. The vendor 1h21l not be bound to dcli»cr the 1hing sold, if the \'endee has not paicl him the price, or' if no IX'riod for the payment hu been fiKed in the coutract. (1466) ART. !Hf. The sclkr of goods is deemed to be an unpaid 11ellcr within the meaning of thi• Title: (!) Whci1 the whole of the price has not been paid or tendered; (2) '\X'hcn a bill of c~change or other nego· tiable instrument hu been received u conditional payment, and the condition on which ic Wal receil'cd has been brok"Cn by fenon of the dishonor of the instrument, the insolvency of the buyer, or other ... ·i!C. In articles 1145 to HH the term "scllu" includt1 an agent of the seller to who111 the bill of bding has been indoucd, or a consignor or agent who hu himself paid, or is directly rcspomib\c fo r the price, or any other person who is in the position of a seller. {n) AKT, 1146. Subjcci 10 the provision! of this Title, notwithstanding that the ownership in the goods may have puscJ to the buyer, the unpaid seller of goods, as such, hu: {I ) A lien on the goods or right to renin chem for the price while he is in possession of them; (2) In case of the insolvency of the buyer, A right of stopping the good• iu tr11111itu after he h11 parted with the possc.ssion of them; (l) A right of resale u limited by this Title; (4) A right to re•dnd the ulc u likc"·ise limited by this Tide. \X'hcre 1hc ownership in goods hu not pu~J to the bu}'H, the unpaid seller has, in addition to hi1 01hcr rcmedic1, 1 right of withholding delivery simihr to and coextensive with hio righn of lien and stoppage;., lr11mil11 "·here the ownership has paucd to the burcr. (n) AKT. !f47. Subject to the provi•iom of this Titlr, the unpaid sc.ller of go<Mls who is in po1Ks1ion of them is entitled to ret ain possc.nion <>f them until payment or tender of the price in the following cases, namely: (I) Where the goods have been i.old without my stipulation al to ncdit; (2) Where the goods have been sold on credit, but the term of credit his expired; (l) Where the burcr becomes insolvent. The seller may exercise his right of lien notwithstanding that he 11 in possession of the good• as agent or bailee for the buyer. (n) AKT. 1!48. Where an unpaid sc.ller hu mad• part dtlivery of the good1, he may exercise his right of lien on the remainder, unlen such part ddivery lus been made under such circumstances a1 to show an intent to waive the lien or right of retention. (n) AKT. 11-19. The unpaid sdkr of goods loses hi1 lien thereon: {I) When he delivers the goods to a curier or other bailee for the purpoK of transmiS$ion to the buyer "'ithout reserving the ownership in the goods or the right to the poneHion thereof; THE LA WYERS JOURNAL Civil Code (2) When the buyer or his age~t lawfully obtain po!S('uion of the goods; (l) By waivtr thtrfof. The unpaid ~lier of goods, hal'ing a lien thereon, docs not lose his lim by reason only that he has obtained judgmc11t or decree for the price of the goods. {n) · AKT. !HO. Subject to the provisions of thi• Title, when the buyer of goods is or becomes insolvent, the unpaid !Clter who has parted with the possession of t h,f goods lia1 the right of no1>ping them in lrd11Silll, that is to U)' , he may resume possc.uion of the goods at any time while they arc in transit, ~nd he will then become entitled to the same rights in reg.rd 10 the g<.><><ls H he would have had if he had ne,·er pJrtcd with the po1scHion. (n) ART. !ff]. Goods arc in tran<it "'ithin the meaning of the pr"eding article: (1) From the time whm they arc deli1·errd lo a carrier by land, water, or air, or ocher bail« for the purpose of tran•.mi11ion to the buyer, until the buyer, or his agent in that behalf, take1 delivery of them from such carrier or ocher bailee, (2) lf 1hc goods are rejected by the buyer, and the carrier or other bailee continues in po~­ scuion of then>. e•·en if che seller h21 refused to receive. them back. Goods HC no longer in transit wi1hin the meaning of the preceding article: {I) If 1he buyer. vr his agent in that be· half. obuirn delivery of tl1c goods before thcir arri•·.11 at 1he appoi1ued <leuination; (2) If, after the arri•·al of the goods at the appointed deninuion, the carrier or other bailee acknowledges 10 the buyer or his J);Cllt that he holds the goods on his behalf and continues in possc1sion of them as bailee for 1he buyer or his agcm; and it is immaterial that further dcstin.1tion for the goods may ha,·e been indicated hr the buyer; (}) If the curicr or other bail« wrongfully rcfu<c5 to dcli•·er the goods to the buyer or hi• agent in that behalf. If the goods arc ddinred to a ship, freight train. truck, or airplane chartered by the buyer, it i1 a quenion depending on the circumstances of the panicubr case, whet!ier they arc in the posse11ion of the carrier as such or a• agent of the buyer. If part delivery of the goods hn been made to the buyer. or his agent in that ~half, tloe remainder of 1hc goods m~y be 1toppcd ;,I /r,111· sit11, unlcH $ueh put ddi>•fry h3s been under such circumnanccs as 10 1lrow >11 ai;rccmtnt with th~ burcr to gh·c up po1se51lo11 of the whole of iii.· goods. (n) ART. I.II!. The unp.>t! :;clkr >Olf e.,erci•e hi< right of 1toppage ;,, lr1111fi/11 either b)' obtaining •ctual possc.ssion of 1he goods or br giving notic~ of his cbim to the carrier or other bailee in "'ho:;c pos!<!ssio11 the goods arc. Such notice m•)' be given either to the !X'fSOn in ~crn•l possession ol the goods or to hi< principll. In the latter caw the notice, to be effectual, must be given at such time 2nd und,•r Juch cir~um<ta11ces th.1: the princip.•I. by 1he exercise of rc.so1ublc diligcnn, ma)' prevent a delivery to the buyer. When no1icc of stoppage;,, tr11m;111 is givf11 br tl1e seller 10 the carrier, or other bail« i11 pos.cuion of the goods. he must redeliver the goods to. or accordi11g to ihc direc1ions of. the seller. The npcMe~ ot rnch ddi\'Cry mun bc borne by tile 1eller. If, however, a negotiable document of title representing the goods has been inued by the carrier or other bailee, he sh<11l not be obliged to deli,.cr or juuified in dclinring the goods to the seller unless such document is first surrendered for cancellation. (n) AH. lllJ. Where the goods <1re of peri1hab!e nuurc, or where the idler expressly reS('rves cht right of resale in case the bu'ycr should make default, or where the buyer lu• been in default in the payment of the price for an unreasonable t im~. rn unpaid dlrr having: a right of lien or havini; stopped the goods;,, trJui;/11 m3y resdl the goods. 281 Civil Code lie shall not theroftcr be liable to the <.1rigin•l buyer upon 1hccontract of sale or for any prnfit made by such rculc, but may rec<.1ver from the buyrr damages for any l<.111 <.1ccnioned by the breach of 1he contract <.1f ulc. Whue a re•ale is nude, as aud1orized in 1his arcide, the buyer ocquiru a good title as agaimt the original buyer. It is n<.1t essential to 1he '';1lidity of a nsale th.at notice 0£ an intention w resdl the goods be gi1·cn by the ~ lfor to the original buyer. But where the right to resell is not based on the perishable nature of the gooth or upon an express provision <.1f the contract of ule, the giving or failuretogivcsuchnoticcshallberclevantinany i11ue involving the question whether 1he buyu had bttn in default for .n unreasonable time before the resale was made. h is no1 nsential to the validity of a r~sile 1hn notice of 1h.c time and place of rnch reule should be given b)' the sdlcr to the original buyer. The seller is bound t<.1 exercise rusonable cU't and judgment in making a resale, and subject to this requirement ma}' make a rculc either by public or private ulc. He cannm, however, directly or indirect!)' buy the goods. •(n) A'-T· UH. An unpaid seller luving the right of lien or having stopped the goods in tr11 .. silu, ma)" rescind the transfrr of title and rernn1e the ownership in 1he goods, where he expressly reservcd 1he right to do so in case 1he buyer should m•ke default, or where the buyer bu been in dcfoul1 in the payment of the price for an unrusonable time. The 1eller sh>ll not 1heruftcr be liable l<.1 the buyer upon the contract of ule, but nuy rec<.1ver from the buyer dam•g:es for any 1<.111 occasioned by 1he bruch of t he contr"t. The transfer of title shall not be hdd to have been rescinded by an unpoid 1eller until he ha~ manifested by notice 10 the buyer <.1r by some <.1ther O\"ertactaninttn1i<.1ntorescind. ltisnotneccls.ry that such 01·crt an 1hould be communicated to the buyer, but the givini; <.1r failure t<.1 gi,·e notice 10 the buyer of the intention 10 rescind shall be relevant in any issue involving the ques1ion whether the buyc;r had bttn in ddault for an unreasonoblc time before the right of rescission was asserted. (n) A,.T. ll ll. Subject 10 the provision <.1f 1hi1 Title, the unpaid selltr's right of lien <.1r U<.1ppage ;,. tr~mit11 is not affected by any ule, <.1r <.1ther di1position of the goods which the buytr may havr made, unless the seller h21 assented thereto. If, ho"levu, a negotiable document of tide hn been issued for goods, no seller's lien<.1r right of stoppoge ;., tro1'silu 1hall ddot the right of my purchaser for value in good foith t<.1 wh<.1m such document hos been negotiated, whether such negotiation be prior or subsequent to 1he notification 10 the carrier, or 01her boilee wh<.1 i55ued such document, of the seller's claim t<.1 a lien or right of sioppage ;,. tro,.silu. (n) AllT. 1116. The vendor · is not bound t<.I deliver tht thingmld incaoe the,·endcc: should lose the right to make use of the term as provided in article 1218. (i467a) A'-T· 1117. The vend<.1r is bound t<.1 ddiver the thing sold and ii! accessi<.1n1 Jnd accessories in the condition in which they were upon the perfection of 1he contract. _ All the fruits shall pertain to the vond•e from the day <.1n which the cont ract wu perfected. (H6h) A'-T- !Ht. In cue <.1f l<.1Ss, deteri<.1rati<.1n or improvement of the thing before its delivuy, 1he rules in anicle 120!J shall be observed, the ''cndor being c<.1nsidcred the debtor. An. HS,. T he obligation t<.1 deliver 1he thins •<.1ld include1 thH of pl.acing in the control of the vcndec all th>t h mentioned in the contract, in conformity with the following rulc1: If the sale <.1f rtal esute should be made with .a ltattment of its arta, at the rue of a ceruin price for a unic of measure or number, the vendor 1hall be obliged to deliver to the vendtt, if the latter should demand ir, oil that may have 282 been stated in the cuntun; but, should thi1 be not possible, che vcndtt may choose between a proportional reducti<.1n<.1f1heprice3nd the rc'Cission<.1f rhe contracr, provided that, in the latter cue, the lack in the area be not less than <.1ne-rcn1h of th.at stated. The same shall be done, even when the area i• the ume, if any part of the immovable is not of rhc quJlity specified in the contract. T he rescission, in this case, shall only uke phce •t che will <.1f the vendee, whm the inferior 1•,]ue ..,f the thing ~<.1ld exceeds one-tenth of the pric~ agreed upon. Nevenheless, if the vendee w<.1uld not have bought the immovable had he kn<.1wn of its smaller aru or inferior quality, he ma}" rescind the u le. ( 146!Ja) A'-T. 1160. If, in the case of lhe preceding article, lhere in a greater area or numbcr in 1he immo,·able thm that stated in the c<.1ntract, the vcndcc nuy accept 1hc arn included in the contract and reject tho! rest. If he accepu the whole area, he must pay for the umc at the c<.1ntract Ute. (1470a) A'-T. 1)"61. The provisions of the tw<.1 pr~ceding articles shall apply wjuJicial sales. (n) A'-T· 1S62 . . In the sale of real ouu, made for a lump sum and n<.1t at the rate of a ceruin sum for a unit of measure or number, there shall be no incrcase or decrease of the price, although there be a greater or less area <.1r number chon thn suttd in the cohtratt. • T he same rule >hall be applied when two <.1r m<.1rc immo\"abks are sold for a •inglc price; but if, besides memi<.1ning the b<.lundaries, which;, indispensable in every c<.1nveyance <.1f real csrar•. its arn or number sh<.1uld be designated in the contr.acc, the venJor shall be bound w dcliver a!l that is included "'ithin said boundHics, even " 'hen it e~ceeds the area ur numbH specified in the contract; and, should he not be able t<.I do •o, he shall suffer a reductiou in the price, in proportion to what is lacking in .the area or number, unless the contract is rescinded because the vendee d..,es not accede t<.1 che failure to deliver what h•s been 01ipulitcd. (147 1) A'-T. 1)"0. The actions arising from .rtid~• I l 19 Jnd 1162 shall pre5cribc "' si,; months, counted from the day ol delivery. ( 147h) An. 1164. If the oome thiog shou\J ha''" been sold 1<.1 different veudces, the ownership slull be transferred to the person who may have l i1·st taken po5>ession therc<.1f in good faith, if it should Ix m<.1vable property. Should it be immovable pr<.1pnty, the ownership shall belong t<.1 the perwn acquirins ic who in good f•ith iirst recorded it in the Regisuy of l'r<.1pert y. Sh<.1u\J there be n<.1 inscription, the ownenhip •hall pertain 10 the pers<.1n who in good faith was first in the possession; Jnd, in the absence 1hcroof, t<.1 the person who presents the olde5t title, pr<.1vided there is i;ood faith. (!47J) SLCTION J.-CcmJiliom a11J W~rr~11/ill A,.T, 1161. Where the oblignion of either pHty t<.1 a con1ran of ule is subject to any c<.1nJition which ••not performed, such pnty mar refuse 1<.1 proceed •••ith the c<.1ntract or he may waive performance of the co,,dition. If the other party has promised that the c<.10Jition •hould happen or be performed, such first mentioned p>tlY may also treat the nonperformance <.1f the conditi<.111 as a breach <.1f warranty. Where the ownership in the t hing has not pos>cd, the buy~r may ucat the fulfillment by the. sell~r of hi> obligation 10 deliver the same as described and as warranted exprtuly or by implicnion in the contr•Cl of sale as a condition of the <.1bligui<.1n of the buyer 1<.1 perform his promise 1<.1 accept and pay for the thing. (n) A'-T· 1166. An)' affirmati<.1n oi fact or •"Y pr<.1mise by the seller rehting to 1he thing is Jll express warra111y if the natural tendency ..,f such THE LA WYERS JOURNAL affirmation or promise is t<.1 induce the buru to purchase the .. me, and if the buyer purchases the thing rdyins thereon. No affirmation of the 1•a!ue ..,f the thins. nor any stotemcnt purporting to be a stuement ..,f the seller's opinion only, shall be construed as a warranty, unless the seller made such affirmation or sutemcnt as an expert and it wa~ relied upan by the buyer. (n) A,.T. lS67. In a contract of sale, unless a co111r.1ry intention oppc.rs, there is: { I) An implied ,war ranty on the pan of the seller that he has a right to sell the thing at the time when t he ownership is t<.I pa~s, and that the buyer shall from that time have and enjoy the legal and peaceful posscssi<.1n <.1f the t hing; (2) An implied warranty that 1he thing shall be free from any hidden foults or defects, or any charge or encumbrance n<.1t ded>red w known to the buyer. This article shall n<.1t, however, be held to render liable• sheriff, aucti<.1n«r, mortgage, pledgee, <.1r <.1ther person profcs~ing to .ell by virtue of authority in fact or law, for the uk of a thins in which a third person has a legal or cquitJblc interest. (n) ART. 1~68. Evicti<.11> •hall take place wheoevcr by a final judginent based on a right prior to the sale <.1t on act imputable 1<.1 the vendor, the nnde<: ;, deprived of the wh<.1le or of a put ..,f the thing purchased. The vond<.1r •hall an1wer for 1hc eviction even th<.1ugh n<.1lhini; ha• been soid in the contract on the ,ubject. The comracring p~nic 1, h<.1wevcr, roay incrca,., dimini1h, <.1r >npprc>> this lcgol oblig•tion of the ,·end<.>r. (1"7!a) AR·r. 1 16~ . i"h•· vc11dcc need not appe•l from the decision in order that the vendor mly become liable for e•·iction. (n) A'-T· 1170. When ~ dvcr"" posse>1ion had b«n commenced before the sale but 1he prescriptive period i• completed after the tr;1nsler, the vend<.1r shall not be liable for eviction. (n) An. 1!71. If the pr<.1peny is sold for n<.1llp>)"mcnt of uxeJ due and not made known co the vendce before the sale, the nnd<.1r is liable for eviction. (n) A'-T· lj72. The judgment debtor is al•o respon1ible for eviction in judicial salts, unleu it is otherwise decreed in the 1udgmen1. (n) A'-T· lj7J. Any stipulatiml exempting: the vendor from the oblig•tion to answer for eviction shall be viod, if he octcd in bad foith. A'-T· 1174. If the vcndcc lus renounced the right t<.1 warranty in ca"' of evicti<.1n, ""d eviction should uke place, the \"endor shall only pay the value which the thing sold had at the time of the eviction. Should the vendee have made the waiver with kn<.1wledgc of the risks of e\·iction and urnmed its con!<'quences, the vendor shall not be li>ble. {1477) A,.T. ]j7$. When 1he ""irr•nty hu bccn agreed upon <.If nothing ha• been stipuhted on this point, in °casc evicti<.1n occurs, 1he 1 ·cndce shall have the right to demand <.1f the vclldor! (\) The return of the v~luc which the rhing wld had at the time of the evicti<.1n, be it greater or less than the price of the ule; (2) The income or fruits, if he has been ordered t<.I deliver them !<.I the pony who won the suit ag1imt him; (J) The costs <.1f the suit which caused the eviction, and, in a proper cue, th<.1se of the suit brought •gainst the •·endor for the warranty; (4) T he expcn.cs of the contract, if the vendtt bu paid them; (j) The domages and interests. and ornamental expenses, if the sole WJS made in bad faith. (1478) A,.T. IJ76. Should the vendee lose, by rnson <.1fthe eviction, a part<.1fthe.1hing soldof 1uch importance, in re!.tion ro the " 'h<.1lc, thit he w<.1uld May }l, 1949 not h>ve bought it "'Idiom s.1id pJrl, h~ m•Y demand d•c rescission of the comr•ct; but with the obligation to return the thing without other encumbrancn thm tho1e which it had when he acquired it. He may eurcis.c thi• righr of action, inl!c3d of enforcing the \'cndor'• liability for C\'ictlon. The ume rule shall be observed when rwo or more thingl h•ve been jointly sold for a 111mp !\Im, or for a s.cpante price for each of them, if it should clearly appear that the nndee would not hn·c purchued 011e without the other. {"479a) ART. 1177. The WHrJnty cannot be euforud until a final judgment hu b«n rendered, whueb)' the vcndtt lose• the d1ing JCquired or a put thereof. { 1~80) ART. ll7S. The vendor shall not be obliged ro make j!OOd the proper warranty, unless he is iummoned in the suit for niction at the insunce c.f die •·endec. ( 148h) A.,T. 1179. The ddendant ''cndee iha\l ask, within the time fixed in the Rules of Co11rt for answering the complaint, thu the vendor be made a co-dde11dan-. (148h) A.,T. \HO. If the immo1•ablc sold sho11ld be encumbered with any non-apparent burden or servitude, not mentioned in the agrttmcnt, of such a 1uture that it mun be presumed thn the \'endee would not have acq11ired it had he been aw>re thereof, he may aok for the rcscis.ion of the contr~ct, unless he should prefer the appropriate indemnity. Neither right can be exercised if the nonappar~nt burden or SC'l'Vilude is recorded in the Regi.cry of Property, unless there i1 an expreu warranty thn 1hc thing is frtt from all burdens and encumbrances. Within 011e yur, to be comp111ed from the cucution of 1hc deed, the •·endee may bring the action for res.:ission, or sue for damages. One yur lnving davsed, he may only bring an action for damages within m equal period, to he counted from the date on which he discovered the burden or servitude. (148h) SvB5ECTION 2.-Warranl)' Against Hitldrn DtftclJ o/ or Enrnmbra11cts Upoir thr Thi11g So/,/ A"T- 11a1. The vendor shall be responsible for w>rranty against 1hc hidden dtf...:ts which the thing sold Ill>)' have, should they render it unfir for the use for which it i• i11tcnded, or should they diminish iu fitnen for such use 10 such an u:1ent rhH , had the vendtt been aw>re thereof, he wo11ld not have acquired it or would have given a lower price for it; but uid vendor Jhall not be mswenble fo r patent defects or those which may be visible, or for thO!e which arc not vi1iblc if the vendee is an npen who, by reason of his trade or profession, should lnve known them. (1484a) Au. 11&2. In a sale of goo<h, there i1 an implied warrant)' or condition as to the quality or fitness of the goods, as follows: {l) Wheu do<' buyer, cxprc»I)' or by impli· cation, nukes known to the seller the particular purpose for which the goods are required, and it ippears thn the buyer rdin on the seller'• skill or judgment (whether he be the grower or minufacturer or not), there is an implkd warranty thit the goods shall be rnsonably fit for 1uch pur,,...; (2) Where the goods arc bought by description from a seller who de.I~ in goods of that description {whether he be the grower or manufacturer or not), there is an implied warranty that the good> sh.11 be of merchanublc quality. (n) ART. I!&). In the ca1e of conc ract of sale of a specified article under its p~tcnt or other trade nJme, thuc is no wHr~nty n 10 i11 fitn.:ss for any particula r purpose, 11nle>1 there is a stipulation to the contrary. (n) An. I 184. An implied warramy or condition as IOthe quality or fi1nen for a particul.r purpo~e may be anncged by the unge of trade. { n) A11T. 1181. In the case of a comract of sale by nmple, if the s'cller is a dealer in goods of that kind, there is an implied warranty that the goods shall be free from any d.-fect rendering them unmerchantable which would not be apparenc on rca· sonJblc examination of the umplc. {n) Au. !lilt>.. The vendor i~ responsible to the vendec for any hidden hulu or defects in the thing sold, even though he was not aware thereof. This provision •hall not apply if the contrary has been stipulated, and the vendor was not awH• of the hidden faults "or defeeu in the thing sold. (1'481) A"T· 087. In the casc1 of articles 1181 . ll 82, l!a-4, 1.181 and llH6. the vendee nuy el"t between withdrawing from the conlroct and demanding • proportionate reduction of the price, with damages ineithercase. (IH6a) Au. 1188. If the thing 1old should be lost in co11scquence of the hidden hults, and the vendor was aware of them, he sh•ll bear 1he 1011, and ,hall be obliged to return the price and refund the expenses of the conuact,.with damagu. If he was not •Ware of them, he shall only return 1he price and internt thereon, and reimburse the expenses of the con tract which the vcndce might have paid. (1487a) Au. 1!89. If the d 1ing sold lud any hidden fault at the time of the uk, and should tbtreaftcr bc lost by a fortuirnus e1·cntorthrough the fault of the vcndee, the l•tter may dcma11d of the vendor the price which he paid, less the value which the thing had when it Wal lost. If the vendor acted in bad faith, he 1hall pay damages 10 the vmdtt. (148h) A"T· 1190. The preceding articles of this Sub· scction shall be applicable to judicial sales n;cept tint the judgment debtor shall not be liable for damagei. {140a) A"T· 1191. Actions arising from the provisions of the preceding ten articles shall be barred after Civil Code six momhs, from the deli1·crr of the thing solJ. (1490) Au. ll 92. If two or more aimmls are sold together, whether for a lump sum or for a separate price for each of them, 1he redhibitory defect of one shall only give risc toits rcdhibition,and not 1hat of the others; unless it should appear that the vendec would not have purchased the sound animal or animals without the defecti1·e one. The latter case shall be presumed when a tum, yoke, pair, or set is bought, even if a separ1tc price has been fixca for uch one of the animal• composing the same. {1491) ART. ll9l. The provisions of the preceding u1icle with respect to the sale of animals shall in like man11cr be ap1•lic,blc to the u lc of other things. (H92) A11T. I S9~. T here i• no warranty against hidden de fccn of •nimals sold at fairi or 3t public auctions, or of livestock sold as condemned. ( 1"9h) Al\T, 119~ . The sale of animals suffering from cont>gious disuse.! shall be void. A contract of sale of animals 1h.ll also be 1·oid if the u1e or service fo r which they arc acquired hubcenstatcdinthecontract,andthcyarefound to be unfit therefor. (149'4a) A11T: 1196. If the hidden dtfcct of animal., even in eJse a professional inspection hu been made, •hou1d be of such a nature that n:pcrt knowledge i1 not sufficient 10 discover it, the defect sha ll be considered as redhibitoq·. lfot if the vtterinari>n, through ignounce or bJd faith, should fail to discover or di1c\05e it. he shall be liable for damages. ( 149q A.,T, 1197. T he redhibitory action, based on the faulu or defecu 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 faulu and defects which are determined by law or by local cusiom1. (1496•) AH. 1!98. If the animal shou ld die within three diys after its purchase, the vendor shall be 1i>ble, if the dis.case which caused the death uisttd at the time of the contract. (!07a) A11T. 1199. If the sale be rescinded, the •inm3I 1h•ll be returned in the condition in which it wa1 sold and delivered, the vend«: being answerable for any injury due to his nc11!igence, and not arising from the redhihitory fault or defect. ( 1"9&) AR'r. 1600. In the sale of animil1 with redhibitory defects, the vendee shall enjoy the right mentioned in article 1187; but he must make use thereof within the same period which has been fixed for the exercise of the redhibitory action. {1499) AllT. 160!. The form of sale of large cattle shall be governed by special laws. (n) (To be Continued) PARACALE LUMBER & HARDWARE C ·O., INC. Lumber Dealer & Building Contractor Office & Yard: 600-611 Soler St., Manila • CHUA UONG CHAN TONG President Manager M:q' 31, 1949 THE LAWYERS JOURNAL 283

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