REPUBLIC ACT NO.

386 AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES
PRELIMINARY TITLE CHAPTER I EFFECT AND APPLICATION OF LAWS
Article 1. This Act shall be known as the "Civil Code of the Philippines." (n) Art. 2. Laws shall take effect after fifteen days following the completion of their p blication in the !fficial "a#ette$ nless it is otherwise pro%ided. This &ode shall take effect one year after s ch p blication. (1a) Art. '. (gnorance of the law e)c ses no one from compliance therewith. (2) Art. *. Laws shall ha%e no retroacti%e effect$ nless the contrary is pro%ided. (') Art. 5. Acts e)ec ted against the pro%isions of mandatory or prohibitory laws shall be %oid$ e)cept when the law itself a thori#es their %alidity. (*a) Art. 6. +ights may be wai%ed$ nless the wai%er is contrary to law$ p blic order$ p blic policy$ morals$ or good c stoms$ or pre, dicial to a third person with a right recogni#ed by law. (*a) Art. -. Laws are repealed only by s bse. ent ones$ and their %iolation or non/obser%ance shall not be e)c sed by dis se$ or c stom or practice to the contrary. 0hen the co rts declared a law to be inconsistent with the &onstit tion$ the former shall be %oid and the latter shall go%ern. Administrati%e or e)ec ti%e acts$ orders and reg lations shall be %alid only when they are not contrary to the laws or the &onstit tion. (5a) Art. 1. 2 dicial decisions applying or interpreting the laws or the &onstit tion shall form a part of the legal system of the 3hilippines. (n) Art. 4. 5o , dge or co rt shall decline to render , dgment by reason of the silence$ obsc rity or ins fficiency of the laws. (6) Art. 16. (n case of do bt in the interpretation or application of laws$ it is pres med that the lawmaking body intended right and , stice to pre%ail. (n) Art. 11. & stoms which are contrary to law$ p blic order or p blic policy shall not be co ntenanced. (n) Art. 12. A c stom m st be pro%ed as a fact$ according to the r les of e%idence. (n)

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Art. 1'. 0hen the laws speak of years$ months$ days or nights$ it shall be nderstood that years are of three h ndred si)ty/fi%e days each7 months$ of thirty days7 days$ of twenty/fo r ho rs7 and nights from s nset to s nrise. (f months are designated by their name$ they shall be comp ted by the n mber of days which they respecti%ely ha%e. (n comp ting a period$ the first day shall be e)cl ded$ and the last day incl ded. (-a) Art. 1*. 3enal laws and those of p blic sec rity and safety shall be obligatory pon all who li%e or so,o rn in the 3hilippine territory$ s b,ect to the principles of p blic international law and to treaty stip lations. (1a) Art. 15. Laws relating to family rights and d ties$ or to the stat s$ condition and legal capacity of persons are binding pon citi#ens of the 3hilippines$ e%en tho gh li%ing abroad. (4a) Art. 16. +eal property as well as personal property is s b,ect to the law of the co ntry where it is stip lated. 8owe%er$ intestate and testamentary s ccessions$ both with respect to the order of s ccession and to the amo nt of s ccessional rights and to the intrinsic %alidity of testamentary pro%isions$ shall be reg lated by the national law of the person whose s ccession is nder consideration$ whate%er may be the nat re of the property and regardless of the co ntry wherein said property may be fo nd. (16a) Art. 1-. The forms and solemnities of contracts$ wills$ and other p blic instr ments shall be go%erned by the laws of the co ntry in which they are e)ec ted. 0hen the acts referred to are e)ec ted before the diplomatic or cons lar officials of the +ep blic of the 3hilippines in a foreign co ntry$ the solemnities established by 3hilippine laws shall be obser%ed in their e)ec tion. 3rohibiti%e laws concerning persons$ their acts or property$ and those which ha%e$ for their ob,ect$ p blic order$ p blic policy and good c stoms shall not be rendered ineffecti%e by laws or , dgments prom lgated$ or by determinations or con%entions agreed pon in a foreign co ntry. (11a) Art. 11. (n matters which are go%erned by the &ode of &ommerce and special laws$ their deficiency shall be s pplied by the pro%isions of this &ode. (16a)

CHAPTER 2 HUMAN RELATIONS (n)

Art. 14. 9%ery person m st$ in the e)ercise of his rights and in the performance of his d ties$ act with , stice$ gi%e e%eryone his d e$ and obser%e honesty and good faith. Art. 26. 9%ery person who$ contrary to law$ wilf lly or negligently ca ses damage to another$ shall indemnify the latter for the same.

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Art. 21. Any person who wilf lly ca ses loss or in, ry to another in a manner that is contrary to morals$ good c stoms or p blic policy shall compensate the latter for the damage. Art. 22. 9%ery person who thro gh an act of performance by another$ or any other means$ ac. ires or comes into possession of something at the e)pense of the latter witho t , st or legal gro nd$ shall ret rn the same to him. Art. 2'. 9%en when an act or e%ent ca sing damage to another:s property was not d e to the fa lt or negligence of the defendant$ the latter shall be liable for indemnity if thro gh the act or e%ent he was benefited. Art. 2*. (n all contract al$ property or other relations$ when one of the parties is at a disad%antage on acco nt of his moral dependence$ ignorance$ indigence$ mental weakness$ tender age or other handicap$ the co rts m st be %igilant for his protection. Art. 25. Tho ghtless e)tra%agance in e)penses for pleas re or display d ring a period of ac te p blic want or emergency may be stopped by order of the co rts at the instance of any go%ernment or pri%ate charitable instit tion. Art. 26. 9%ery person shall respect the dignity$ personality$ pri%acy and peace of mind of his neighbors and other persons. The following and similar acts$ tho gh they may not constit te a criminal offense$ shall prod ce a ca se of action for damages$ pre%ention and other relief; (1) 3rying into the pri%acy of another:s residence; (2) <eddling with or dist rbing the pri%ate life or family relations of another7 (') (ntrig ing to ca se another to be alienated from his friends7 (*) =e)ing or h miliating another on acco nt of his religio s beliefs$ lowly station in life$ place of birth$ physical defect$ or other personal condition. Art. 2-. Any person s ffering material or moral loss beca se a p blic ser%ant or employee ref ses or neglects$ witho t , st ca se$ to perform his official d ty may file an action for damages and other relief against he latter$ witho t pre, dice to any disciplinary administrati%e action that may be taken. Art. 21. >nfair competition in agric lt ral$ commercial or ind strial enterprises or in labor thro gh the se of force$ intimidation$ deceit$ machination or any other n, st$ oppressi%e or highhanded method shall gi%e rise to a right of action by the person who thereby s ffers damage. Art. 24. 0hen the acc sed in a criminal prosec tion is ac. itted on the gro nd that his g ilt has not been pro%ed beyond reasonable do bt$ a ci%il action for damages for the same act or omission may be instit ted. ? ch action re. ires only a preponderance of e%idence. >pon motion of the defendant$ the co rt may re. ire the plaintiff to file a bond to answer for damages in case the complaint sho ld be fo nd to be malicio s. (f in a criminal case the , dgment of ac. ittal is based pon reasonable do bt$ the co rt shall so declare. (n the absence of any declaration to that effect$ it may be inferred from the te)t of the decision whether or not the ac. ittal is d e to that gro nd.

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Art. '6. 0hen a separate ci%il action is bro ght to demand ci%il liability arising from a criminal offense$ and no criminal proceedings are instit ted d ring the pendency of the ci%il case$ a preponderance of e%idence shall likewise be s fficient to pro%e the act complained of. Art. '1. 0hen the ci%il action is based on an obligation not arising from the act or omission complained of as a felony$ s ch ci%il action may proceed independently of the criminal proceedings and regardless of the res lt of the latter. Art. '2. Any p blic officer or employee$ or any pri%ate indi%id al$ who directly or indirectly obstr cts$ defeats$ %iolates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages; (1) @reedom of religion7 (2) @reedom of speech7 (') @reedom to write for the press or to maintain a periodical p blication7 (*) @reedom from arbitrary or illegal detention7 (5) @reedom of s ffrage7 (6) The right against depri%ation of property witho t d e process of law7 (-) The right to a , st compensation when pri%ate property is taken for p blic se7 (1) The right to the e. al protection of the laws7 (4) The right to be sec re in one:s person$ ho se$ papers$ and effects against nreasonable searches and sei# res7 (16) The liberty of abode and of changing the same7 (11) The pri%acy of comm nication and correspondence7 (12) The right to become a member of associations or societies for p rposes not contrary to law7 (1') The right to take part in a peaceable assembly to petition the go%ernment for redress of grie%ances7 (1*) The right to be free from in%ol ntary ser%it de in any form7 (15) The right of the acc sed against e)cessi%e bail7 (16) The right of the acc sed to be heard by himself and co nsel$ to be informed of the nat re and ca se of the acc sation against him$ to ha%e a speedy and p blic trial$ to meet the witnesses face to face$ and to ha%e comp lsory process to sec re the attendance of witness in his behalf7

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(1-) @reedom from being compelled to be a witness against one:s self$ or from being forced to confess g ilt$ or from being ind ced by a promise of imm nity or reward to make s ch confession$ e)cept when the person confessing becomes a ?tate witness7 (11) @reedom from e)cessi%e fines$ or cr el and n s al p nishment$ nless the same is imposed or inflicted in accordance with a stat te which has not been , dicially declared nconstit tional7 and (14) @reedom of access to the co rts. (n any of the cases referred to in this article$ whether or not the defendant:s act or omission constit tes a criminal offense$ the aggrie%ed party has a right to commence an entirely separate and distinct ci%il action for damages$ and for other relief. ? ch ci%il action shall proceed independently of any criminal prosec tion (if the latter be instit ted)$ and mat be pro%ed by a preponderance of e%idence. The indemnity shall incl de moral damages. 9)emplary damages may also be ad, dicated. The responsibility herein set forth is not demandable from a , dge nless his act or omission constit tes a %iolation of the 3enal &ode or other penal stat te. Art. ''. (n cases of defamation$ fra d$ and physical in, ries a ci%il action for damages$ entirely separate and distinct from the criminal action$ may be bro ght by the in, red party. ? ch ci%il action shall proceed independently of the criminal prosec tion$ and shall re. ire only a preponderance of e%idence. Art. '*. 0hen a member of a city or m nicipal police force ref ses or fails to render aid or protection to any person in case of danger to life or property$ s ch peace officer shall be primarily liable for damages$ and the city or m nicipality shall be s bsidiary responsible therefore. The ci%il action herein recogni#ed shall be independent of any criminal proceedings$ and a preponderance of e%idence shall s ffice to s pport s ch action. Art. '5. 0hen a person$ claiming to be in, red by a criminal offense$ charges another with the same$ for which no independent ci%il action is granted in this &ode or any special law$ b t the , stice of the peace finds no reasonable gro nds to belie%e that a crime has been committed$ or the prosec ting attorney ref ses or fails to instit te criminal proceedings$ the complaint may bring a ci%il action for damages against the alleged offender. ? ch ci%il action may be s pported by a preponderance of e%idence. >pon the defendant:s motion$ the co rt may re. ire the plaintiff to file a bond to indemnify the defendant in case the complaint sho ld be fo nd to be malicio s. (f d ring the pendency of the ci%il action$ an information sho ld be presented by the prosec ting attorney$ the ci%il action shall be s spended ntil the termination of the criminal proceedings. Art. '6. 3re/, dicial . estions which m st be decided before any criminal prosec tion may be instit ted or may proceed$ shall be go%erned by r les of co rt which the ? preme &o rt shall prom lgate and which shall not be in conflict with the pro%isions of this &ode.

Tit ! I. " CIVIL PERSONALITY CHAPTER #

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$ENERAL PROVISIONS
Art. '-. 2 ridical capacity$ which is the fitness to be the s b,ect of legal relations$ is inherent in e%ery nat ral person and is lost only thro gh death. &apacity to act$ which is the power to do acts with legal effect$ is ac. ired and may be lost. (n) Art. '1. <inority$ insanity or imbecility$ the state of being a deaf/m te$ prodigality and ci%il interdiction are mere restrictions on capacity to act$ and do not e)empt the incapacitated person from certain obligations$ as when the latter arise from his acts or from property relations$ s ch as easements. ('2a) Art. '4. The following circ mstances$ among others$ modify or limit capacity to act; age$ insanity$ imbecility$ the state of being a deaf/m te$ penalty$ prodigality$ family relations$ alienage$ absence$ insol%ency and tr steeship. The conse. ences of these circ mstances are go%erned in this &ode$ other codes$ the + les of &o rt$ and in special laws. &apacity to act is not limited on acco nt of religio s belief or political opinion. A married woman$ twenty/one years of age or o%er$ is . alified for all acts of ci%il life$ e)cept in cases specified by law. (n)

CHAPTER 2 NATURAL PERSONS

Art. *6. Airth determines personality7 b t the concei%ed child shall be considered born for all p rposes that are fa%orable to it$ pro%ided it be born later with the conditions specified in the following article. (24a) Art. *1. @or ci%il p rposes$ the fet s is considered born if it is ali%e at the time it is completely deli%ered from the mother:s womb. 8owe%er$ if the fet s had an intra/ terine life of less than se%en months$ it is not deemed born if it dies within twenty/fo r ho rs after its complete deli%ery from the maternal womb. ('6a) Art. *2. &i%il personality is e)ting ished by death. The effect of death pon the rights and obligations of the deceased is determined by law$ by contract and by will. ('2a) Art. *'. (f there is a do bt$ as between two or more persons who are called to s cceed each other$ as to which of them died first$ whoe%er alleges the death of one prior to the other$ shall pro%e the same7 in the absence of proof$ it is pres med that they died at the same time and there shall be no transmission of rights from one to the other. ('')

CHAPTER 3 %URIDICAL PERSONS

Art. **. The following are , ridical persons; (1) The ?tate and its political s bdi%isions7

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(2) !ther corporations$ instit tions and entities for p blic interest or p rpose$ created by law7 their personality begins as soon as they ha%e been constit ted according to law7 (') &orporations$ partnerships and associations for pri%ate interest or p rpose to which the law grants a , ridical personality$ separate and distinct from that of each shareholder$ partner or member. ('5a) Art. *5. 2 ridical persons mentioned in 5os. 1 and 2 of the preceding article are go%erned by the laws creating or recogni#ing them. 3ri%ate corporations are reg lated by laws of general application on the s b,ect. 3artnerships and associations for pri%ate interest or p rpose are go%erned by the pro%isions of this &ode concerning partnerships. ('6 and '-a) Art. *6. 2 ridical persons may ac. ire and possess property of all kinds$ as well as inc r obligations and bring ci%il or criminal actions$ in conformity with the laws and reg lations of their organi#ation. ('1a) Art. *-. >pon the dissol tion of corporations$ instit tions and other entities for p blic interest or p rpose mentioned in 5o. 2 of Article **$ their property and other assets shall be disposed of in p rs ance of law or the charter creating them. (f nothing has been specified on this point$ the property and other assets shall be applied to similar p rposes for the benefit of the region$ pro%ince$ city or m nicipality which d ring the e)istence of the instit tion deri%ed the principal benefits from the same. ('4a)

Tit ! II. " CITI&ENSHIP AND DOMICILE

Art. *1. The following are citi#ens of the 3hilippines; (1) Those who were citi#ens of the 3hilippines at the time of the adoption of the &onstit tion of the 3hilippines7 (2) Those born in the 3hilippines of foreign parents who$ before the adoption of said &onstit tion$ had been elected to p blic office in the 3hilippines7 (') Those whose fathers are citi#ens of the 3hilippines7 (*) Those whose mothers are citi#ens of the 3hilippines and$ pon reaching the age of ma,ority$ elect 3hilippine citi#enship7 (5) Those who are nat rali#ed in accordance with law. (n) Art. *4. 5at rali#ation and the loss and reac. isition of citi#enship of the 3hilippines are go%erned by special laws. (n) Art. 56. @or the e)ercise of ci%il rights and the f lfillment of ci%il obligations$ the domicile of nat ral persons is the place of their habit al residence. (*6a)

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Art. 51. 0hen the law creating or recogni#ing them$ or any other pro%ision does not fi) the domicile of , ridical persons$ the same shall be nderstood to be the place where their legal representation is established or where they e)ercise their principal f nctions. (*1a)

Tit ! III. " MARRIA$E CHAPTER # RE'UISITES OF MARRIA$E

Art. 52. <arriage is not a mere contract b t an in%iolable social instit tion. (ts nat re$ conse. ences and incidents are go%erned by law and not s b,ect to stip lation$ e)cept that the marriage settlements may to a certain e)tent fi) the property relations d ring the marriage. (n) Art. 5'. 5o marriage shall be solemni#ed nless all these re. isites are complied with; (1) Legal capacity of the contracting parties7 (2) Their consent$ freely gi%en7 (') A thority of the person performing the marriage7 and (*) A marriage license$ e)cept in a marriage of e)ceptional character (?ec. 1a$ Art. '61'). Art. 5*. Any male of the age of si)teen years or pwards$ and any female of the age of fo rteen years or pwards$ not nder any of the impediments mentioned in Articles 16 to 1*$ may contract marriage. (2) Art. 55. 5o partic lar form for the ceremony of marriage is re. ired$ b t the parties with legal capacity to contract marriage m st declare$ in the presence of the person solemni#ing the marriage and of two witnesses of legal age$ that they take each other as h sband and wife. This declaration shall be set forth in an instr ment in triplicate$ signed by signat re or mark by the contracting parties and said two witnesses and attested by the person solemni#ing the marriage. (n case of a marriage on the point of death$ when the dying party$ being physically nable$ cannot sign the instr ment by signat re or mark$ it shall be s fficient for one of the witnesses to the marriage to sign in his name$ which fact shall be attested by the minister solemni#ing the marriage. (') Art. 56. <arriage may be solemni#ed by; (1) The &hief 2 stice and Associate 2 stices of the ? preme &o rt7 (2) The 3residing 2 stice and the 2 stices of the &o rt of Appeals7 (') 2 dges of the &o rts of @irst (nstance7 (*) <ayors of cities and m nicipalities7

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(5) < nicipal , dges and , stices of the peace7 (6) 3riests$ rabbis$ ministers of the gospel of any denomination$ ch rch$ religion or sect$ d ly registered$ as pro%ided in Article 427 and (-) ?hip captains$ airplane chiefs$ military commanders$ and cons ls and %ice/cons ls in special cases pro%ided in Articles -* and -5. (*a) Art. 5-. The marriage shall be solemni#ed p blicly in the office of the , dge in open co rt or of the mayor7 or in the ch rch$ chapel or temple$ as the case may be$ and not elsewhere$ e)cept in cases of marriages contracted on the point of death or in remote places in accordance with Article -2 of this &ode$ or in case of marriage referred to in Article -6 or when one of the parents or the g ardian of the female or the latter herself if o%er eighteen years of age re. est it in writing$ in which cases the marriage may be solemni#ed at a ho se or place designated by said parent or g ardian of the female or by the latter herself in a sworn statement to that effect. (5a) Art. 51. ?a%e marriages of an e)ceptional character a thori#ed in &hapter 2 of this Title$ b t not those nder Article -5$ no marriage shall be solemni#ed witho t a license first being iss ed by the local ci%il registrar of the m nicipality where either contracting party habit ally resides. (-a) Art. 54. The local ci%il registrar shall iss e the proper license if each of the contracting parties swears separately before him or before any p blic official a thori#ed to administer oaths$ to an application in writing setting forth that s ch party has the necessary . alifications for contracting marriage. The applicants$ their parents or g ardians shall not be re. ired to e)hibit their residence certificates in any formality in connection with the sec ring of the marriage license. ? ch application shall insofar as possible contain the following data; (1) @ ll name of the contracting party7 (2) 3lace of birth7 (') Age$ date of birth7 (*) &i%il stat s (single$ widow or widower$ or di%orced)7 (5) (f di%orced$ how and when the pre%io s marriage was dissol%ed7 (6) 3resent residence7 (-) Begree of relationship of the contracting parties7 (1) @ ll name of the father7 (4) +esidence of the father7 (16) @ ll name of the mother7 (11) +esidence of the mother7

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(12) @ ll name and residence of the g ardian or person ha%ing charge$ in case the contracting party has neither father nor mother and is nder the age of twenty years$ if a male$ or eighteen years if a female. (-a) Art. 66. The local ci%il registrar$ pon recei%ing s ch application$ shall re. ire the e)hibition of the original baptismal or birth certificates of the contracting parties or copies of s ch doc ments d ly attested by the persons ha%ing c stody of the originals. These certificates or certified copies of the doc ments re. ired by this article need not to be sworn to and shall be e)empt from the doc mentary stamp ta). The signat re and official title of the person iss ing the certificate shall be s fficient proof of its a thenticity. (f either of the contracting parties is nable to prod ce his baptismal or birth certificate or a certified copy of either beca se of the destr ction or loss of the original$ or if it is shown by an affida%it of s ch party or of any other person that s ch baptismal or birth certificate has not yet been recei%ed tho gh the same has been re. ested of the person ha%ing c stody thereof at least fifteen days prior to the date of the application$ s ch party may f rnish in lie thereof his residence certificate for the c rrent year or any pre%io s years$ to show the age stated in his application or$ in the absence thereof$ an instr ment drawn p and sworn to before the local ci%il registrar concerned or any p blic official a thori#ed to solemni#e marriage. ? ch instr ment shall contain the sworn declaration of two witnesses$ of lawf l age$ of either se)$ setting forth the f ll name$ profession$ and residence of s ch contracting party and of his or her parents$ if known$ and the place and date of birth of s ch party. The nearest of kin of the contracting parties shall be preferred as witnesses$ and in their defa lt$ persons well known in the pro%ince or the locality for their honesty and good rep te. The e)hibition of baptismal or birth certificates shall not be re. ired if the parents of the contracting parties appear personally before the local ci%il registrar concerned and swear to the correctness of the lawf l age of said parties$ as stated in the application$ or when the local ci%il registrar shall$ by merely looking at the applicants pon their personally appearing before him$ be con%inced that either or both of them ha%e the re. ired age. (1a) Art. 61. (n case either of the contracting parties is a widowed or di%orced person$ the same shall be re. ired to f rnish$ instead of the baptismal or birth certificate re. ired in the last preceding article$ the death certificate of the deceased spo se or the decree of the di%orce co rt$ as the case may be. (n case the death certificate cannot be fo nd$ the party shall make an affida%it setting forth this circ mstance and his or her act al ci%il stat s and the name and the date of the death of the deceased spo se. (n case either or both of the contracting parties$ being neither widowed nor di%orced$ are less than twenty years of age as regards the male and less than eighteen years as regards the female$ they shall$ in addition to the re. irements of the preceding articles$ e)hibit to the local ci%il registrar$ the consent to their marriage$ of their father$ mother or g ardian$ or persons ha%ing legal charge of them$ in the order mentioned. ? ch consent shall be in writing$ nder oath taken with the appearance of the interested parties before the proper local ci%il registrar or in the form of an affida%it made in the presence of two witnesses and attested before any official a thori#ed by law to administer oaths. (4a) Art. 62. <ales abo%e twenty b t nder twenty/fi%e years of age$ or females abo%e eighteen b t nder twenty/three years of age$ shall be obliged to ask their parents or g ardian for ad%ice pon the intended marriage. (f they do not obtain s ch ad%ice$ or if it be nfa%orable$ the marriage shall not take place till after three months following the completion of the p blication of the application for marriage license. A sworn statement by the contracting parties to the effect that s ch ad%ice has been so ght$ together with the written ad%ice

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gi%en$ if any$ shall accompany the application for marriage license. ?ho ld the parents or g ardian ref se to gi%e any ad%ice$ this fact shall be stated in the sworn declaration. (n) Art. 6'. The local ci%il registrar shall post d ring ten consec ti%e days at the main door of the b ilding where he has his office a notice$ the location of which shall not be changed once it has been placed$ setting forth the f ll names and domiciles of the applicants for a marriage license and other information gi%en in the application. This notice shall re. est all persons ha%ing knowledge of any impediment to the marriage to ad%ise the local registrar thereof. The license shall be iss ed after the completion of the p blication$ nless the local ci%il registrar recei%es information pon any alleged impediment to the marriage. (16a) Art. 6*. >pon being ad%ised of any alleged impediment to the marriage$ the local ci%il registrar shall forthwith make an in%estigation$ e)amining persons nder oath. (f he is con%icted that there is an impediment to the marriage$ it shall be his d ty to withhold the marriage license$ nless he is otherwise ordered by a competent co rt. (n) Art. 65. The local ci%il registrar shall demand the pre%io s payment of fees re. ired by law or reg lations for each license iss ed. 5o other s m shall be collected$ in the nat re of a fee or ta) of any kind$ for the iss ance of a marriage license. <arriage licenses shall be iss ed free of charge to indigent parties$ when both male and female do not each own assessed real property in e)cess of fi%e h ndred pesos$ a fact certified to$ witho t cost$ by the pro%incial treas rer$ or in the absence thereof$ by a statement d ly sworn to by the contracting parties before the local ci%il registrar. The license shall be %alid in any part of the 3hilippines7 b t it shall be good for no more than one h ndred and twenty days from the date on which it is iss ed and shall be deemed canceled at the e)piration of said period if the interested parties ha%e not made se of it. (11a) Art. 66. 0hen either or both of the contracting parties are citi#ens or s b,ects of a foreign co ntry$ it shall be necessary$ before a marriage license can be obtained$ to pro%ide themsel%es with a certificate of legal capacity to contract marriage$ to be iss ed by their respecti%e diplomatic or cons lar officials. (1'a) Art. 6-. The marriage certificate in which the contracting parties shall state that they take each other as h sband and wife$ shall also contain; (1) The f ll names and domiciles of the contracting parties7 (2) The age of each7 (') A statement that the proper marriage license has been iss ed according to law and that the contracting parties ha%e the consent of their parents in case the male is nder twenty or the female nder eighteen years of age7 and (*) A statement that the g ardian or parent has been informed of the marriage$ if the male is between the ages of twenty and twenty/fi%e years$ and the female between eighteen and twenty/three years of age. (15a) Art. 61. (t shall be the d ty of the person solemni#ing the marriage to f rnish to either of the contracting parties one of the three copies of the marriage contract referred to in Article 55$ and to send another copy of the doc ment not later than fifteen days after the marriage took place to the local ci%il registrar concerned$ whose d ty it shall be to iss e the proper receipt to any person sending a marriage contract solemni#ed by him$ incl ding marriages of an e)ceptional character. The official$ priest$ or minister solemni#ing the marriage shall

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retain the third copy of the marriage contract$ the marriage license and the affida%it of the interested party regarding the solemni#ation of the marriage in a place other than those mentioned in Article 5- if there be any s ch affida%it$ in the files that he m st keep. (16a) Art. 64. (t shall be the d ty of the local ci%il registrar to prepare the doc ments re. ired by this Title$ and to administer oaths to all interested parties witho t any charge in both cases. The doc ments and affida%its filed in connection with applications for marriage licenses shall be e)empt from the doc mentary stamp ta). (1-a) Art. -6. The local ci%il registrar concerned shall enter all applications for marriage licenses filed with him in a register book strictly in the order in which the same shall be recei%ed. 8e shall enter in said register the names of the applicants$ the date on which the marriage license was iss ed$ and s ch other data as may be necessary. (11a) Art. -1. All marriages performed o tside the 3hilippines in accordance with the laws in force in the co ntry where they were performed$ and %alid there as s ch$ shall also be %alid in this co ntry$ e)cept bigamo s$ polygamo s$ or incest o s marriages as determined by 3hilippine law. (14a)

CHAPTER 2 MARRIA$ES OF E(CEPTIONAL CHARACTER

Art. -2. (n case either of the contracting parties is on the point of death or the female has her habit al residence at a place more than fifteen kilometers distant from the m nicipal b ilding and there is no comm nication by railroad or by pro%incial or local highways between the former and the latter$ the marriage may be solemni#ed witho t necessity of a marriage license7 b t in s ch cases the official$ priest$ or minister solemni#ing it shall state in an affida%it made before the local ci%il registrar or any person a thori#ed by law to administer oaths that the marriage was performed in artic lo mortis or at a place more than fifteen kilometers distant from the m nicipal b ilding concerned$ in which latter case he shall gi%e the name of the barrio where the marriage was solemni#ed. The person who solemni#ed the marriage shall also state$ in either case$ that he took the necessary steps to ascertain the ages and relationship of the contracting parties and that there was in his opinion no legal impediment to the marriage at the time that it was solemni#ed. (26) Art. -'. The original of the affida%it re. ired in the last preceding article$ together with a copy of the marriage contract$ shall be sent by the person solemni#ing the marriage to the local ci%il registrar of the m nicipality where it was performed within the period of thirty days$ after the performance of the marriage. The local ci%il registrar shall$ howe%er$ before filing the papers$ re. ire the payment into the m nicipal treas ry of the legal fees re. ired in Article 65. (21) Art. -*. A marriage in artic lo mortis may also be solemni#ed by the captain of a ship or chief of an airplane d ring a %oyage$ or by the commanding officer of a military nit$ in the absence of a chaplain$ d ring war. The d ties mentioned in the two preceding articles shall be complied with by the ship captain$ airplane chief or commanding officer. (n) Art. -5. <arriages between @ilipino citi#ens abroad may be solemni#ed by cons ls and %ice/ cons ls of the +ep blic of the 3hilippines. The d ties of the local ci%il registrar and of a , dge or , stice of the peace or mayor with regard to the celebration of marriage shall be performed by s ch cons ls and %ice/cons ls. (n)

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Art. -6. 5o marriage license shall be necessary when a man and a woman who ha%e attained the age of ma,ority and who$ being nmarried$ ha%e li%ed together as h sband and wife for at least fi%e years$ desire to marry each other. The contracting parties shall state the foregoing facts in an affida%it before any person a thori#ed by law to administer oaths. The official$ priest or minister who solemni#ed the marriage shall also state in an affida%it that he took steps to ascertain the ages and other . alifications of the contracting parties and that he fo nd no legal impediment to the marriage. (n) Art. --. (n case two persons married in accordance with law desire to ratify their nion in conformity with the reg lations$ rites$ or practices of any ch rch$ sect$ or religion it shall no longer be necessary to comply with the re. irements of &hapter 1 of this Title and any ratification made shall merely be considered as a p rely religio s ceremony. (2') Art. -1. <arriages between <ohammedans or pagans who li%e in the non/&hristian pro%inces may be performed in accordance with their c stoms$ rites or practices. 5o marriage license or formal re. isites shall be necessary. 5or shall the persons solemni#ing these marriages be obliged to comply with Article 42. 8owe%er$ twenty years after appro%al of this &ode$ all marriages performed between <ohammedans or pagans shall be solemni#ed in accordance with the pro%isions of this &ode. A t the 3resident of the 3hilippines$ pon recommendation of the ?ecretary of the (nterior$ may at any time before the e)piration of said period$ by proclamation$ make any of said pro%isions applicable to the <ohammedan and non/&hristian inhabitants of any of the non/&hristian pro%inces. (25a) Art. -4. <i)ed marriages between a &hristian male and a <ohammedan or pagan female shall be go%erned by the general pro%ision of this Title and not by those of the last preceding article$ b t mi)ed marriages between a <ohammedan or pagan male and a &hristian female may be performed nder the pro%isions of the last preceding article if so desired by the contracting parties$ s b,ect$ howe%er$ in the latter case to the pro%isions of the second paragraph of said article. (26)

CHAPTER 3 VOID AND VOIDABLE MARRIA$ES

Art. 16. The following marriages shall be %oid from the beginning; (1) Those contracted nder the ages of si)teen and fo rteen years by the male and female respecti%ely$ e%en with the consent of the parents7 (2) Those solemni#ed by any person not legally a thori#ed to perform marriages7 (') Those solemni#ed witho t a marriage license$ sa%e marriages of e)ceptional character7 (*) Aigamo s or polygamo s marriages not falling nder Article 1'$ 5 mber 27 (5) (ncest o s marriages mentioned in Article 117

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(6) Those where one or both contracting parties ha%e been fo nd g ilty of the killing of the spo se of either of them7 (-) Those between stepbrothers and stepsisters and other marriages specified in Article 12. (n) Art. 11. <arriages between the following are incest o s and %oid from their performance$ whether the relationship between the parties be legitimate or illegitimate; (1) Aetween ascendants and descendants of any degree7 (2) Aetween brothers and sisters$ whether of the f ll or half blood7 (') Aetween collateral relati%es by blood within the fo rth ci%il degree. (21a) Art. 12. The following marriages shall also be %oid from the beginning; (1) Aetween stepfathers and stepda ghters$ and stepmothers and stepsons7 (2) Aetween the adopting father or mother and the adopted$ between the latter and the s r%i%ing spo se of the former$ and between the former and the s r%i%ing spo se of the latter7 (') Aetween the legitimate children of the adopter and the adopted. (21a) Art. 1'. Any marriage s bse. ently contracted by any person d ring the lifetime of the first spo se of s ch person with any person other than s ch first spo se shall be illegal and %oid from its performance$ nless; (1) The first marriage was ann lled or dissol%ed7 or (2) The first spo se had been absent for se%en consec ti%e years at the time of the second marriage witho t the spo se present ha%ing news of the absentee being ali%e$ or if the absentee$ tho gh he has been absent for less than se%en years$ is generally considered as dead and belie%ed to be so by the spo se present at the time of contracting s ch s bse. ent marriage$ or if the absentee is pres med dead according to Articles '46 and '41. The marriage so contracted shall be %alid in any of the three cases ntil declared n ll and %oid by a competent co rt. (24a) Art. 1*. 5o marriage license shall be iss ed to a widow till after three h ndred days following the death of her h sband$ nless in the meantime she has gi%en birth to a child. (n) Art. 15. A marriage may be ann lled for any of the following ca ses$ e)isting at the time of the marriage; (1) That the party in whose behalf it is so ght to ha%e the marriage ann lled was between the ages of si)teen and twenty years$ if male$ or between the ages of fo rteen and eighteen years$ if female$ and the marriage was solemni#ed witho t the consent of the parent$ g ardian or person ha%ing a thority o%er the party$ nless after attaining the ages of twenty or eighteen years$ as the case may be$ s ch party freely cohabited with the other and both li%ed together as h sband and wife7 (2) (n a s bse. ent marriage nder Article 1'$ 5 mber 2$ that the former h sband or wife belie%ed to be dead was in fact li%ing and the marriage with s ch former h sband or wife was then in force7

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(') That either party was of nso nd mind$ nless s ch party$ after coming to reason$ freely cohabited with the other as h sband or wife7 (*) That the consent of either party was obtained by fra d$ nless s ch party afterwards$ with f ll knowledge of the facts constit ting the fra d$ freely cohabited with the other as her h sband or his wife$ as the case may be7 (5) That the consent of either party was obtained by force or intimidation$ nless the %iolence or threat ha%ing disappeared$ s ch party afterwards freely cohabited with the other as her h sband or his wife$ as the case may be7 (6) That either party was$ at the time of marriage$ physically incapable of entering into the married state$ and s ch incapacity contin es$ and appears to be inc rable. ('6a) Art. 16. Any of the following circ mstances shall constit te fra d referred to in 5 mber * of the preceding article; (1) <isrepresentation as to the identity of one of the contracting parties7 (2) 5on/disclos re of the pre%io s con%iction of the other party of a crime in%ol%ing moral t rpit de$ and the penalty imposed was imprisonment for two years or more7 (') &oncealment by the wife of the fact that at the time of the marriage$ she was pregnant by a man other than her h sband. 5o other misrepresentation or deceit as to character$ rank$ fort ne or chastity shall constit te s ch fra d as will gi%e gro nds for action for the ann lment of marriage. (n) Art. 1-. The action for ann lment of marriage m st be commenced by the parties and within the periods as follows; (1) @or ca ses mentioned in 5 mber 1 of Article 15$ by the party whose parent or g ardian did not gi%e his or her consent$ within fo r years after attaining the age of twenty or eighteen years$ as the case may be7 or by the parent or g ardian or person ha%ing legal charge$ at any time before s ch party has arri%ed at the age of twenty or eighteen years7 (2) @or ca ses mentioned in 5 mber 2 of Article 15$ by the spo se who has been absent$ d ring his or her lifetime7 or by either spo se of the s bse. ent marriage d ring the lifetime of the other7 (') @or ca ses mentioned in 5 mber ' of Article 15$ by the sane spo se$ who had no knowledge of the other:s insanity7 or by any relati%e or g ardian of the party of nso nd mind$ at any time before the death of either party7 (*) @or ca ses mentioned in 5 mber *$ by the in, red party$ within fo r years after the disco%ery of the fra d7 (5) @or ca ses mentioned in 5 mber 5$ by the in, red party$ within fo r years from the time the force or intimidation ceased7

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(6) @or ca ses mentioned in 5 mber 6$ by the in, red party$ within eight years after the marriage. ('1a) Art. 11. 5o , dgment ann lling a marriage shall be prom lgated or by confession of , dgment. pon a stip lation of facts

Art. 14. &hildren concei%ed or born of marriages which are %oid from the beginning shall ha%e the same stat s$ rights and obligations as acknowledged nat ral children$ and are called nat ral children by legal fiction. &hildren concei%ed of %oidable marriages before the decree of ann lment shall be considered as legitimate7 and children concei%ed thereafter shall ha%e the same stat s$ rights and obligations as acknowledged nat ral children$ and are also called nat ral children by legal fiction. (n) Art. 46. 0hen a marriage is ann lled$ the co rt shall award the c stody of the children as it may deem best$ and make pro%ision for their ed cation and s pport. Attorney:s fees and e)penses inc rred in the litigation shall be charged to the con, gal partnership property$ nless the action fails. (''a) Art. 41. Bamages may be awarded in the following cases when the marriage is , dicially ann lled or declared %oid from the beginning; (1) (f there has been fra d$ force or intimidation in obtaining the consent of one of the contracting parties7 (2) (f either party was$ at the time of the marriage$ physically incapable of entering into the married state$ and the other party was naware thereof7 (') (f the person solemni#ing the marriage was not legally a thori#ed to perform marriages$ and that fact was known to one of the contracting parties$ b t he or she concealed it from the other7 (*) (f a bigamo s or polygamo s marriage was celebrated$ and the impediment was concealed from the plaintiff by the party dis. alified7 (5) (f in an incest o s marriage$ or a marriage between a stepbrother and a stepsister or other marriage prohibited by article 12$ the relationship was known to only one of the contracting parties b t was not disclosed to the other7 (6) (f one party was insane and the other was aware thereof at the time of the marriage. (n)

CHAPTER ) AUTHORITY TO SOLEMNI&E MARRIA$ES

Art. 42. 9%ery priest$ or minister$ or rabbi a thori#ed by his denomination$ ch rch$ sect$ or religion to solemni#e marriage shall send to the proper go%ernment office a sworn statement setting forth his f ll name and domicile$ and that he is a thori#ed by his denomination$ ch rch$ sect$ or religion to solemni#e marriage$ attaching to said statement a certified copy of his appointment. The director of the proper go%ernment office$ pon recei%ing s ch sworn

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statement containing the information re. ired$ and being satisfied that the denomination$ ch rch$ sect$ or region of the applicant operates in the 3hilippines$ shall record the name of s ch priest or minister in a s itable register and iss e to him an a thori#ation to solemni#e marriage. ?aid priest or minister or rabbi shall be obliged to e)hibit his a thori#ation to the contracting parties$ to their parents$ grandparents$ g ardians$ or persons in charge demanding the same. 5o priest or minister not ha%ing the re. ired a thori#ation may solemni#e marriage. ('*a) Art. 4'. @reedom of religion shall be obser%ed by p blic officials in the iss ance of a thori#ation to solemni#e marriages. &onse. ently$ no p blic official shall attempt to in. ire into the tr th or %alidity of any religio s doctrine held by the applicant or by his ch rch. (n) Art. 4*. The p blic official in charge of registration of priests and ministers shall cancel the a thori#ation iss ed to a bishop$ head$ priest$ rabbi$ pastor or minister of the gospel of any denomination$ ch rch$ sect$ or religion$ on his own initiati%e or at the re. est of any interested party$ pon showing that the ch rch$ sect or religion whose ministers ha%e been a thori#ed to solemni#e marriage is no longer in operation. The cancellation of the a thori#ation granted to a priest$ pastor or minister shall likewise be ordered pon the re. est of the bishop$ head$ or lawf l a thorities of the denomination$ ch rch$ sect or religion to which he belongs. ('5a) Art. 45. The p blic official in charge of registration of priests and ministers$ with the appro%al of the proper head of Bepartment$ is hereby a thori#ed to prepare the necessary forms and to prom lgate reg lations for the p rpose of enforcing the pro%isions of this Title. ?aid official may also by reg lations fi) and collect fees for the a thori#ation of priests and ministers to solemni#e marriages. ('6a) Art. 46. The e)isting laws which p nish acts or omissions concerning the marriage license$ solemni#ation of marriage$ a thority to solemni#e marriages$ and other acts or omissions relati%e to the celebration of marriage shall remain and contin e to be in force. (n)

Tit ! IV. " LE$AL SEPARATION

Art. 4-. A petition for legal separation may be filed; (1) @or ad ltery on the part of the wife and for conc binage on the part of the h sband as defined in the 3enal &ode7 or (2) An attempt by one spo se against the life of the other. (n) Art. 41. (n e%ery case the co rt m st take steps$ before granting the legal separation$ toward the reconciliation of the spo ses$ and m st be f lly satisfied that s ch reconciliation is highly improbable. (n) Art. 44. 5o person shall be entitled to a legal separation who has not resided in the 3hilippines for one year prior to the filing of the petition$ nless the ca se for the legal separation has taken place within the territory of this +ep blic. (?ec. 2a$ Act 5o. 2-16) Art. 166. The legal separation may be claimed only by the innocent spo se$ pro%ided there has been no condonation of or consent to the ad ltery or conc binage. 0here both spo ses

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are offenders$ a legal separation cannot be claimed by either of them. &oll sion between the parties to obtain legal separation shall ca se the dismissal of the petition. ('a$ Act 5o. 2-16) Art. 161. 5o decree of legal separation shall be prom lgated pon a stip lation of facts or by confession of , dgment. (n case of non/appearance of the defendant$ the co rt shall order the prosec ting attorney to in. ire whether or not a coll sion between the parties e)ists. (f there is no coll sion$ the prosec ting attorney shall inter%ene for the ?tate in order to take care that the e%idence for the plaintiff is not fabricated. (n) Art. 162. An action for legal separation cannot be filed e)cept within one year from and after the date on which the plaintiff became cogni#ant of the ca se and within fi%e years from and after the date when s ch ca se occ rred. (*a$ Act 2-16) Art. 16'. An action for legal separation shall in no case be tried before si) months shall ha%e elapsed since the filing of the petition. (5a$ Act 2-16) Art. 16*. After the filing of the petition for legal separation$ the spo ses shall be entitled to li%e separately from each other and manage their respecti%e property. The h sband shall contin e to manage the con, gal partnership property b t if the co rt deems it proper$ it may appoint another to manage said property$ in which case the administrator shall ha%e the same rights and d ties as a g ardian and shall not be allowed to dispose of the income or of the capital e)cept in accordance with the orders of the co rt. (6$ Act 2-16) Art. 165. B ring the pendency of legal separation proceedings the co rt shall make pro%ision for the care of the minor children in accordance with the circ mstances and may order the con, gal partnership property or the income therefrom to be set aside for their s pport7 and in defa lt thereof said minor children shall be cared for in conformity with the pro%isions of this &ode7 b t the &o rt shall abstain from making any order in this respect in case the parents ha%e by m t al agreement$ made pro%ision for the care of said minor children and these are$ in the , dgment of the co rt$ well cared for. (-a$ Act 2-16) Art. 166. The decree of legal separation shall ha%e the following effects; (1) The spo ses shall be entitled to li%e separately from each other$ b t marriage bonds shall not be se%ered7 (2) The con, gal partnership of gains or the absol te con, gal comm nity of property shall be dissol%ed and li. idated$ b t the offending spo se shall ha%e no right to any share of the profits earned by the partnership or comm nity$ witho t pre, dice to the pro%isions of Article 1-67 (') The c stody of the minor children shall be awarded to the innocent spo se$ nless otherwise directed by the co rt in the interest of said minors$ for whom said co rt may appoint a g ardian7 (*) The offending spo se shall be dis. alified from inheriting from the innocent spo se by intestate s ccession. <oreo%er$ pro%isions in fa%or of the offending spo se made in the will of the innocent one shall be re%oked by operation of law. (n)

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Art. 16-. The innocent spo se$ after a decree of legal separation has been granted$ may re%oke the donations by reason of marriage made by him or by her to the offending spo se. Alienation and mortgages made before the notation of the complaint for re%ocation in the +egistry of 3roperty shall be %alid. This action lapses after fo r years following the date the decree became final. (n) Art. 161. +econciliation stops the proceedings for legal separation and rescinds the decree of legal separation already rendered. The re%i%al of the con, gal partnership of gains or of the absol te con, gal comm nity of property shall be go%erned by Article 145. (16a. Act 2-16)

Tit ! V. " RI$HTS AND OBLI$ATIONS BETWEEN HUSBAND AND WIFE

Art. 164. The h sband and wife are obliged to li%e together$ obser%e m t al respect and fidelity$ and render m t al help and s pport. (56a) Art. 116. The h sband shall fi) the residence of the family. A t the co rt may e)empt the wife from li%ing with the h sband if he sho ld li%e abroad nless in the ser%ice of the +ep blic. (51a) Art. 111. The h sband is responsible for the s pport of the wife and the rest of the family. These e)penses shall be met first from the con, gal property$ then from the h sband:s capital$ and lastly from the wife:s paraphernal property. (n case there is a separation of property$ by stip lation in the marriage settlements$ the h sband and wife shall contrib te proportionately to the family e)penses. (n) Art. 112. The h sband is the administrator of the con, gal property$ nless there is a stip lation in the marriage settlements conferring the administration pon the wife. ?he may also administer the con, gal partnership in other cases specified in this &ode. (n) Art. 11'. The h sband m st be ,oined in all s its by or against the wife$ e)cept; (1) 0hen they are , dicially separated7 (2) (f they ha%e in fact been separated for at least one year7 (') 0hen there is a separation of property agreed pon in the marriage settlements7 (*) (f the administration of all the property in the marriage has been transferred to her$ in accordance with Articles 146 and 14-7 (5) 0hen the litigation is between the h sband and wife7 (6) (f the s it concerns her paraphernal property7

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(-) 0hen the action is pon the ci%il liability arising from a criminal offense7 (1) (f the litigation is incidental to the profession$ occ pation or b siness in which she is engaged7 (4) (n any ci%il action referred to in Articles 25 to '57 and (16) (n an action pon a . asi/delict. (n the cases mentioned in 5os. - to 16$ the h sband m st be ,oined as a party defendant if the third paragraph of Article 16' is applicable. (n) Art. 11*. The wife cannot$ witho t the h sband:s consent ac. ire any property by grat ito s title$ e)cept from her ascendants$ descendants$ parents/in/law$ and collateral relati%es within the fo rth degree. (n) Art. 115. The wife manages the affairs of the ho sehold. ?he may p rchase things necessary for the s pport of the family$ and the con, gal partnership shall be bo nd thereby. ?he may borrow money for this p rpose$ if the h sband fails to deli%er the proper s m. The p rchase of ,ewelry and precio s ob,ects is %oidable$ nless the transaction has been e)pressly or tacitly appro%ed by the h sband$ or nless the price paid is from her paraphernal property. (62a) Art. 116. 0hen one of the spo ses neglects his or her d ties to the con, gal nion or brings danger$ dishonor or material in, ry pon the other$ the in, red party may apply to the co rt for relief. The co rt may co nsel the offender to comply with his or her d ties$ and take s ch meas res as may be proper. (n) Art. 11-. The wife may e)ercise any profession or occ pation or engage in b siness. 8owe%er$ the h sband may ob,ect$ pro%ided; (1) 8is income is s fficient for the family$ according to its social standing$ and (2) 8is opposition is fo nded on serio s and %alid gro nds. (n case of disagreement on this . estion$ the parents and grandparents as well as the family co ncil$ if any$ shall be cons lted. (f no agreement is still arri%ed at$ the co rt will decide whate%er may be proper and in the best interest of the family. (n)

Tit ! VI. " PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE CHAPTER # $ENERAL PROVISIONS
Art. 111. The property relations between h sband and wife shall be go%erned in the following order; (1) Ay contract e)ec ted before the marriage7

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(2) Ay the pro%isions of this &ode7 and (') Ay c stom. (1'15a) Art. 114. The f t re spo ses may in the marriage settlements agree pon absol te or relati%e comm nity of property$ or pon complete separation of property$ or pon any other regime. (n the absence of marriage settlements$ or when the same are %oid$ the system of relati%e comm nity or con, gal partnership of gains as established in this &ode$ shall go%ern the property relations between h sband and wife. (n) Art. 126. A minor who according to law may contract marriage$ may also e)ec te his or her marriage settlements7 b t they shall be %alid only if the persons designated by law to gi%e consent to the marriage of the minor take part in the ante/n ptial agreement. (n the absence of the parents or of a g ardian$ the consent to the marriage settlements will be gi%en by the family co ncil. (1'11a) Art. 121. (n order that any modification in the marriage settlements may be %alid$ it m st be made before the celebration of the marriage$ s b,ect to the pro%isions of Article 141. (1'14a) Art. 122. The marriage settlements and any modification thereof shall be go%erned by the ?tat te of @ra ds$ and e)ec ted before the celebration of the marriage. They shall not pre, dice third persons nless they are recorded in the +egistry of 3roperty. (1'21a) Art. 12'. @or the %alidity of marriage settlements e)ec ted by any person pon whom a sentence of ci%il interdiction has been prono nced$ the presence and participation of the g ardian shall be indispensable$ who for this p rpose shall be designated by a competent co rt$ in accordance with the pro%isions of the + les of &o rt. (1'2'a) Art. 12*. (f the marriage is between a citi#en of the 3hilippines and a foreigner$ whether celebrated in the 3hilippines or abroad$ the following r les shall pre%ail; (1) (f the h sband is a citi#en of the 3hilippines while the wife is a foreigner$ the pro%isions of this &ode shall go%ern their relations7 (2) (f the h sband is a foreigner and the wife is a citi#en of the 3hilippines$ the laws of the h sband:s co ntry shall be followed$ witho t pre, dice to the pro%isions of this &ode with regard to immo%able property. (1'25a) Art. 125. 9%erything stip lated in the settlements or contracts referred articles in consideration of a f t re marriage shall be rendered %oid whate%er$ if the marriage sho ld not take place. 8owe%er$ those stip depend pon the celebration of the marriage shall be to in the preceding and witho t effect lations that do not %alid. (1'26a)

CHAPTER 2 DONATIONS BY REASON OF MARRIA$E

Art. 126. Bonations by reasons of marriage are those which are made before its celebration$ in consideration of the same and in fa%or of one or both of the f t re spo ses. (1'2-)

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Art. 12-. These donations are go%erned by the r les on ordinary donations established in Title ((( of Aook ((($ e)cept as to their form which shall be reg lated by the ?tat te of @ra ds7 and insofar as they are not modified by the following articles. (1'21a) Art. 121. <inors may make and recei%e donations in their ante/n ptial contract$ pro%ided they are a thori#ed by the persons who are to gi%e their consent to the marriage of said minors. (1'24a) Art. 124. 9)press acceptance is not necessary for the %alidity of these donations. (1''6) Art. 1'6. The f t re spo ses may gi%e each other in their marriage settlements as m ch as one/fifth of their present property$ and with respect to their f t re property$ only in the e%ent of death$ to the e)tent laid down by the pro%isions of this &ode referring to testamentary s ccession. (1''1a) Art. 1'1. The donor by reason of marriage shall release the property donated from mortgages and all other enc mbrances pon the same$ with the e)ception of easements$ nless in the marriage settlements or in the contracts the contrary has been stip lated. (1''2a) Art. 1'2. A donation by reason of marriage is not re%ocable$ sa%e in the following cases; (1) (f it is conditional and the condition is not complied with7 (2) (f the marriage is not celebrated7 (') 0hen the marriage takes place witho t the consent of the parents or g ardian$ as re. ired by law7 (*) 0hen the marriage is ann lled$ and the donee acted in bad faith7 (5) >pon legal separation$ the donee being the g ilty spo se7 (6) 0hen the donee has committed an act of ingratit de as specified by the pro%isions of this &ode on donations in general. (1'''a) Art. 1''. 9%ery donation between the spo ses d ring the marriage shall be %oid. This prohibition does not apply when the donation takes effect after the death of the donor. 5either does this prohibition apply to moderate gifts which the spo ses may gi%e each other on the occasion of any family re,oicing. (1''*a) Art. 1'*. Bonations d ring the marriage by one of the spo ses to the children whom the other spo se had by another marriage$ or to persons of whom the other spo se is a pres mpti%e heir at the time of the donation are %oidable$ at the instance of the donor:s heirs after his death. (1''5a)

CHAPTER 3 PARAPHERNAL PROPERTY

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Art. 1'5. All property bro ght by the wife to the marriage$ as well as all property she ac. ires d ring the marriage$ in accordance with article 1*1$ is paraphernal. (1'11a) Art. 1'6. The wife retains the ownership of the paraphernal property. (1'12) Art. 1'-. The wife shall ha%e the administration of the paraphernal property$ nless she deli%ers the same to the h sband by means of a p blic instr ment empowering him to administer it. (n this case$ the p blic instr ment shall be recorded in the +egistry of 3roperty. As for the mo%ables$ the h sband shall gi%e ade. ate sec rity. (1'1*a) Art. 1'1. The fr its of the paraphernal property form part of the assets of the con, gal partnership$ and shall be s b,ect to the payment of the e)penses of the marriage. The property itself shall also be s b,ect to the daily e)penses of the family$ if the property of the con, gal partnership and the h sband:s capital are not s fficient therefor. (1'15a) Art. 1'4. The personal obligations of the h sband can not be enforced against the fr its of the paraphernal property$ nless it be pro%ed that they redo nded to the benefit of the family. (1'16) Art. 1*6. A married woman of age may mortgage$ enc mber$ alienate or otherwise dispose of her paraphernal property$ witho t the permission of the h sband$ and appear alone in co rt to litigate with regard to the same. (n) Art. 1*1. The alienation of any paraphernal property administered by the h sband gi%es a right to the wife to re. ire the constit tion of a mortgage or any other sec rity for the amo nt of the price which the h sband may ha%e recei%ed. (1'46a)

CHAPTER ) CON%U$AL PARTNERSHIP OF $AINS SECTION #. " $!n!*+ P*,-i.i,n.

Art. 1*2. Ay means of the con, gal partnership of gains the h sband common f nd the fr its of their separate property and the income ind stry$ and di%ide e. ally$ pon the dissol tion of the marriage or of net gains or benefits obtained indiscriminately by either spo se d (1'42a) and wife place in a from their work or the partnership$ the ring the marriage.

Art. 1*'. All property of the con, gal partnership of gains is owned in common by the h sband and wife. (n) Art. 1**. 0hen a man and a woman li%e together as h sband and wife$ b t they are not married$ or their marriage is %oid from the beginning$ the property ac. ired by either or both of them thro gh their work or ind stry or their wages and salaries shall be go%erned by the r les on co/ownership. (n)

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Art. 1*5. The con, gal partnership shall commence precisely on the date of the celebration of the marriage. Any stip lation to the contrary shall be %oid. (1'4') Art. 1*6. 0ai%er of the gains or of the effects of this partnership d ring marriage cannot be made e)cept in case of , dicial separation. 0hen the wai%er takes place by reason of separation$ or after the marriage has been dissol%ed or ann lled$ the same shall appear in a p blic instr ment$ and the creditors shall ha%e the right which Article 1652 grants them. (1'4*a) Art. 1*-. The con, gal partnership shall be go%erned by the r les on the contract of partnership in all that is not in conflict with what is e)pressly determined in this &hapter. (1'45)

SECTION 2. " E/0 1.i-! P*,2!*t3 ,4 E+05 S2,1.!

Art. 1*1. The following shall be the e)cl si%e property of each spo se; (1) That which is bro ght to the marriage as his or her own7 (2) That which each ac. ires$ d ring the marriage$ by l crati%e title7 (') That which is ac. ired by right of redemption or by e)change with other property belonging to only one of the spo ses7 (*) That which is p rchased with e)cl si%e money of the wife or of the h sband. (1'46) Art. 1*4. 0hoe%er gi%es or promises capital to the h sband shall not be s b,ect to warranty against e%iction$ e)cept in case of fra d. (14'-) Art. 156. 3roperty donated or left by will to the spo ses$ ,ointly and with designation of determinate shares$ shall pertain to the wife as paraphernal property$ and to the h sband as capital$ in the proportion specified by the donor or testator$ and in the absence of designation$ share and share alike$ witho t pre, dice to what is pro%ided in Article -5'. (1'41a) Art. 151. (f the donations are onero s$ the amo nt of the charges shall be ded cted from the paraphernal property or from the h sband:s capital$ whene%er they ha%e been borne by the con, gal partnership. (1'44a) Art. 152. (f some credit payable in a certain n mber of years$ or a life pension$ sho ld pertain to one of the spo ses$ the pro%isions of Articles 156 and 15- shall be obser%ed to determine what constit tes the paraphernal property and what forms the capital of the h sband. (1*66a)

SECTION 3. " C,n617+ P+*tn!*.5i2 P*,2!*t3

Art. 15'. The following are con, gal partnership property;

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(1) That which is ac. ired by onero s title d ring the marriage at the e)pense of the common f nd$ whether the ac. isition be for the partnership$ or for only one of the spo ses7 (2) That which is obtained by the ind stry$ or work$ or as salary of the spo ses$ or of either of them7 (') The fr its$ rents or interests recei%ed or d e d ring the marriage$ coming from the common property or from the e)cl si%e property of each spo se. (1*61) Art. 15*. That share of the hidden treas re which the law awards to the finder or the proprietor belongs to the con, gal partnership. (n) Art. 155. Things ac. ired by occ pation$ s ch as fishing and h nting$ pertain to the con, gal partnership of gains. (n) Art. 156. 0hene%er an amo nt or credit payable in a certain n mber of years belongs to one of the spo ses$ the s ms which may be collected by installments d e d ring the marriage shall not pertain to the con, gal partnership$ b t shall be considered capital of the h sband or of the wife$ as the credit may belong to one or the other spo se. (1*62) Art. 15-. The right to an ann ity$ whether perpet al or of life$ and the right of s fr ct$ belonging to one of the spo ses shall form a part of his or her separate property$ b t the fr its$ pensions and interests d e d ring the marriage shall belong to the partnership. The s fr ct which the spo ses ha%e o%er the property of their children$ tho gh of another marriage$ shall be incl ded in this pro%ision. (1*6'a) Art. 151. (mpro%ements$ whether for tility or adornment$ made on the separate property of the spo ses thro gh ad%ancements from the partnership or thro gh the ind stry of either the h sband or the wife$ belong to the con, gal partnership. A ildings constr cted$ at the e)pense of the partnership$ d ring the marriage on land belonging to one of the spo ses$ also pertain to the partnership$ b t the %al e of the land shall be reimb rsed to the spo se who owns the same. (1*6*a) Art. 154. 0hene%er the paraphernal property or the h sband:s capital consists$ in whole or in part$ of li%estock e)isting pon the dissol tion of the partnership$ the n mber of animals e)ceeding that bro ght to the marriage shall be deemed to be of the con, gal partnership. (1*65a) Art. 166. All property of the marriage is pres med to belong to the con, gal partnership$ nless it be pro%ed that it pertains e)cl si%ely to the h sband or to the wife. (1*6-)

SECTION ). " C5+*7!. U2,n +n8 O9 i7+ti,n ,4 t5! C,n617+ P+*tn!*.5i2

Art. 161. The con, gal partnership shall be liable for; (1) All debts and obligations contracted by the h sband for the benefit of the con, gal partnership$ and those contracted by the wife$ also for the same p rpose$ in the cases where she may legally bind the partnership7

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(2) Arrears or income d e$ d ring the marriage$ from obligations which constit te a charge pon property of either spo se or of the partnership7 (') <inor repairs or for mere preser%ation made d ring the marriage pon the separate property of either the h sband or the wife7 ma,or repairs shall not be charged to the partnership7 (*) <a,or or minor repairs pon the con, gal partnership property7 (5) The maintenance of the family and the ed cation of the children of both h sband and wife$ and of legitimate children of one of the spo ses7 (6) 9)penses to permit the spo ses to complete a professional$ %ocational or other co rse. (1*61a) Art. 162. The %al e of what is donated or promised to the common children by the h sband$ only for sec ring their f t re or the finishing of a career$ or by both spo ses thro gh a common agreement$ shall also be charged to the con, gal partnership$ when they ha%e not stip lated that it is to be satisfied from the property of one of them$ in whole or in part. (1*64) Art. 16'. The payment of debts contracted by the h sband or the wife before the marriage shall not be charged to the con, gal partnership. 5either shall the fines and pec niary indemnities imposed partnership. pon them be charged to the

8owe%er$ the payment of debts contracted by the h sband or the wife before the marriage$ and that of fines and indemnities imposed pon them$ may be enforced against the partnership assets after the responsibilities en merated in Article 161 ha%e been co%ered$ if the spo se who is bo nd sho ld ha%e no e)cl si%e property or if it sho ld be ins fficient7 b t at the time of the li. idation of the partnership s ch spo se shall be charged for what has been paid for the p rpose abo%e/mentioned. (1*16) Art. 16*. 0hate%er may be lost d ring the marriage in any kind of gambling$ betting or game$ whether permitted or prohibited by law$ shall be borne by the loser$ and shall not be charged to the con, gal partnership. (1*11a)

SECTION :. " A8;ini.t*+ti,n ,4 t5! C,n617+ P+*tn!*.5i2

Art. 165. The h sband is the administrator of the con, gal partnership. (1*12a) Art. 166. >nless the wife has been declared a non compos mentis or a spendthrift$ or is nder ci%il interdiction or is confined in a leprosari m$ the h sband cannot alienate or enc mber any real property of the con, gal partnership witho t the wife:s consent. (f she ref ses nreasonably to gi%e her consent$ the co rt may compel her to grant the same. This article shall not apply to property ac. ired by the con, gal partnership before the effecti%e date of this &ode. (1*1'a)

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Art. 16-. (n case of ab se of powers of administration of the con, gal partnership property by the h sband$ the co rts$ on petition of the wife$ may pro%ide for recei%ership$ or administration by the wife$ or separation of property. (n) Art. 161. The wife may$ by e)press a thority of the h sband embodied in a p blic instr ment$ administer the con, gal partnership property. (n) Art. 164. The wife may also by e)press a thority of the h sband appearing in a p blic instr ment$ administer the latter:s estate. (n) Art. 1-6. The h sband or the wife may dispose by will of his or her half of the con, gal partnership profits. (1*1*a) Art. 1-1. The h sband may dispose of the con, gal partnership property for the p rposes specified in Articles 161 and 162. (1*15a) Art. 1-2. The wife cannot bind the con, gal partnership witho t the h sband:s consent e)cept in cases pro%ided by law. (1*16a) Art. 1-'. The wife may$ d ring the marriage$ and within ten years from the transaction . estioned$ ask the co rts for the ann lment of any contract of the h sband entered into witho t her consent$ when s ch consent is re. ired$ or any act or contract of the h sband which tends to defra d her or impair her interest in the con, gal partnership property. ?ho ld the wife fail to e)ercise this right$ she or her heirs$ after the dissol tion of the marriage$ may demand the %al e of property fra d lently alienated by the h sband. (n) Art. 1-*. 0ith the e)ception of moderate donations for charity$ neither h sband nor wife can donate any property of the con, gal partnership witho t the consent of the other. (n)

SECTION 6. " Di.., 1ti,n ,4 t5! C,n617+ P+*tn!*.5i2

Art. 1-5. The con, gal partnership of gains terminates; (1) >pon the death of either spo se7 (2) 0hen there is a decree of legal separation7 (') 0hen the marriage is ann lled7 (*) (n case of , dicial separation of property nder Article 141. (1*1-a) Art. 1-6. (n case of legal separation$ the g ilty spo se shall forfeit his or her share of the con, gal partnership profits$ which shall be awarded to the children of both$ and the children of the g ilty spo se had by a prior marriage. 8owe%er$ if the con, gal partnership property came mostly or entirely from the work or ind stry$ or from the wages and salaries$ or from the fr its of the separate property of the g ilty spo se$ this forfeit re shall not apply.

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(n case there are no children$ the innocent spo se shall be entitled to all the net profits. (n) Art. 1--. (n case of ann lment of the marriage$ the spo se who acted in bad faith or ga%e ca se for ann lment shall forfeit his or her share of the con, gal partnership profits. The pro%ision of the preceding article shall go%ern. (n) Art. 1-1. The separation in fact between h sband and wife witho t , dicial appro%al$ shall not affect the con, gal partnership$ e)cept that; (1) The spo se who lea%es the con, gal home or ref ses to li%e therein$ witho t , st ca se$ shall not ha%e a right to be s pported7 (2) 0hen the consent of one spo se to any transaction of the other is re. ired by law$ , dicial a thori#ation shall be necessary7 (') (f the h sband has abandoned the wife witho t , st ca se for at least one year$ she may petition the co rt for a recei%ership$ or administration by her of the con, gal partnership property$ or separation of property. (n)

SECTION <. " Li=1i8+ti,n ,4 t5! C,n617+ P+*tn!*.5i2

Art. 1-4. >pon the dissol tion of the con, gal partnership$ an in%entory shall be formed$ b t s ch in%entory shall not be necessary; (1) (f$ after the dissol tion of the partnership$ one of the spo ses sho ld ha%e reno nced its effects and conse. ences in d e time7 or (2) 0hen separation of property has preceded the dissol tion of the partnership. (1*11a) Art. 116. The bed and bedding which the spo ses ordinarily se shall not be incl ded in the in%entory. These effects$ as well as the clothing for their ordinary se$ shall be deli%ered to the s r%i%ing spo se. (1*26) Art. 111. The in%entory ha%ing been completed$ the paraphernal property shall first be paid. Then$ the debts and charges against the con, gal partnership shall be paid. (1*22a) Art. 112. The debts$ charges and obligations of the con, gal partnership ha%ing been paid7 the capital of the h sband shall be li. idated and paid to the amo nt of the property in%entoried. (1*2'a) Art. 11'. The ded ctions from the in%entoried property ha%ing been made as pro%ided in the two preceding articles$ the remainder of said property shall constit te the credit of the con, gal partnership. (1*2*) Art. 11*. The loss or deterioration of the mo%ables belonging to either spo se$ altho gh thro gh fort ito s e%ent$ shall be paid from the con, gal partnership of gains$ sho ld there be any. Those s ffered by real property shall not be reimb rsable in any case$ e)cept those on paraphernal property administered by the h sband$ when the losses were d e to his fa lt. 8e shall pay for the same. (1*25a)

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Art. 115. The net remainder of the con, gal partnership of gains shall be di%ided e. ally between the h sband and the wife or their respecti%e heirs$ nless a different basis of di%ision was agreed pon in the marriage settlements. (1*26a) Art. 116. The mo rning apparel of the widow shall be paid for o t of the estate of the deceased h sband. (1*2-a) Art. 11-. 0ith regard to the formation of the in%entory$ r les for appraisal and sale of property of the con, gal partnership$ and other matters which are not e)pressly determined in the present &hapter$ the + les of &o rt on the administration of estates of deceased persons shall be obser%ed. (1*21a) Art. 111. @rom the common mass of property s pport shall be gi%en to the s r%i%ing spo se and to the children d ring the li. idation of the in%entoried property and ntil what belongs to them is deli%ered7 b t from this shall be ded cted that amo nt recei%ed for s pport which e)ceeds the fr its or rents pertaining to them. (1*'6) Art. 114. 0hene%er the li. idation of the partnership of two or more marriages contracted by the same person sho ld be carried o t at the same time$ in order to determine the capital of each partnership all kinds of proof in the absence of in%entories shall be admitted7 and in case of do bt$ the partnership property shall be di%ided between the different partnerships in proportion to the d ration of each and to the property belonging to the respecti%e spo ses. (1*'1)

CHAPTER : SEPARATION OF PROPERTY OF THE SPOUSES AND ADMINISTRATION OF PROPERTY BY THE WIFE DURIN$ THE MARRIA$E
Art. 146. (n the absence of an e)press declaration in the marriage settlements$ the separation of property between spo ses d ring the marriage shall not take place sa%e in %irt e of a , dicial order. (1*'2a) Art. 141. The h sband or the wife may ask for the separation of property$ and it shall be decreed when the spo se of the petitioner has been sentenced to a penalty which carries with it ci%il interdiction$ or has been declared absent$ or when legal separation has been granted. (n case of ab se of powers of administration of the con, gal partnership property by the h sband$ or in case of abandonment by the h sband$ separation of property may also be ordered by the co rt$ according to the pro%isions of Articles 16- and 1-1$ 5o. '. (n all these cases$ it is s fficient to present the final , dgment which has been entered against the g ilty or absent spo se. (1*''a) The h sband and the wife may agree pon the dissol tion of the con, gal partnership d ring the marriage$ s b,ect to , dicial appro%al. All the creditors of the h sband and of the wife$ as well as of the con, gal partnership shall be notified of any petition for , dicial appro%al or the %ol ntary dissol tion of the con, gal partnership$ so that any s ch creditors may appear at the hearing to safeg ard his interests. >pon appro%al of the petition for dissol tion of the con, gal partnership$ the co rt shall take s ch meas res as may protect the creditors and other third persons.

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After dissol tion of the con, gal partnership$ the pro%isions of Articles 21* and 215 shall apply. The pro%isions of this &ode concerning the effect of partition stated in Articles *41 to 561 shall be applicable. (1*''a) Art. 142. !nce the separation of property has been ordered$ the con, gal partnership shall be dissol%ed$ and its li. idation shall be made in conformity with what has been established by this &ode. 8owe%er$ witho t pre, dice to the pro%isions of Article 242$ the h sband and the wife shall be reciprocally liable for their s pport d ring the separation$ and for the s pport and ed cation of their children7 all in proportion to their respecti%e property. The share of the spo se who is nder ci%il interdiction or absent shall be administered in accordance with the + les of &o rt. (1*'*a) Art. 14'. The complaint for separation and the final , dgment declaring the same$ shall be noted and recorded in the proper registers of property$ if the , dgment sho ld refer to immo%able property. (1*'-) Art. 14*. The separation of property shall not pre, dice the rights pre%io sly ac. ired by creditors. (1*'1) Art. 145. The separation of property ceases; (1) >pon reconciliation of the spo ses$ in case of legal separation7 (2) 0hen the ci%il interdiction terminates7 (') 0hen the absent spo se appears7 (*) 0hen the co rt$ at the instance of the wife$ a thori#es the h sband to res me the administration of the con, gal partnership$ the co rt being satisfied that the h sband will not again ab se his powers as an administrator7 (5) 0hen the h sband$ who has abandoned the wife$ re,oins her. (n the abo%e cases$ the property relations between the spo ses shall be go%erned by the same r les as before the separation$ witho t pre, dice to the acts and contracts legally e)ec ted d ring the separation. The spo ses shall state$ in a p blic doc ment$ all the property which they ret rn to the marriage and which shall constit te the separate property of each. This p blic doc ment shall be recorded in the +egistry of 3roperty. (n the cases referred to in this article$ all the property bro ght in shall be deemed to be newly contrib ted$ e%en tho gh all or some may be the same which e)isted before the li. idation effected by reason of the separation. (1*'4a) Art. 146. 0ith the con, gal partnership s bsisting$ the administration of all classes of property in the marriage may be transferred by the co rts to the wife;

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(1) 0hen she becomes the g ardian of her h sband7 (2) 0hen she asks for the declaration of his absence7 (') (n case of ci%il interdiction of the h sband. The co rts may also confer the administration to the wife$ with s ch limitation as they may deem ad%isable$ if the h sband sho ld become a f giti%e from , stice or be in hiding as a defendant in a criminal case$ or if$ being absol tely nable to administer$ he sho ld ha%e failed to pro%ide for administration. (1**1a) Art. 14-. The wife to whom the administration of all the property of the marriage is transferred shall ha%e$ with respect to said property$ the same powers and responsibility which the h sband has when he is the administrator$ b t always s b,ect to the pro%isions of the last paragraph of the preceding article. (1**2a)

CHAPTER 6 SYSTEM OF ABSOLUTE COMMUNITY (n)

Art. 141. (n case the f t re spo ses agree in the marriage settlements that the system of absol te comm nity shall go%ern their property relations d ring marriage$ the following pro%isions shall be of s pplementary application. Art. 144. (n the absence of stip lation to the contrary$ the comm nity shall consist of all present and f t re property of the spo ses not e)cepted by law. Art. 266. 5either spo se may reno nce any inheritance witho t the consent of the other. (n case of conflict$ the co rt shall decide the . estion$ after cons lting the family co ncil$ if there is any. Art. 261. The following shall be e)cl ded from the comm nity; (1) 3roperty ac. ired by grat ito s title by either spo se$ when it is pro%ided by the donor or testator that it shall not become a part of the comm nity7 (2) 3roperty inherited by either h sband or wife thro gh the death of a child by a former marriage$ there being brothers or sisters of the f ll blood of the deceased child7 (') A portion of the property of either spo se e. i%alent to the pres mpti%e legitime of the children by a former marriage7 (*) 3ersonal belongings of either spo se. 8owe%er$ all the fr its and income of the foregoing classes of property shall be incl ded in the comm nity. Art. 262. Ante/n ptial debts of either spo se shall not be paid from the comm nity$ the same ha%e redo nded to the benefit of the family. nless

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Art. 26'. Bebts contracted by both spo ses or by one of them with the consent of the other shall be paid from the comm nity. (f the common property is ins fficient to co%er common debts$ the same may be enforced against the separate property of the spo ses$ who shall be e. ally liable. Art. 26*. Bebts contracted by either spo se witho t the consent of the other shall be chargeable against the comm nity to the e)tent that the family may ha%e been benefited thereby. Art. 265. (ndemnities that m st be paid by either spo se on acco nt of a crime or of a . asi/ delict shall be paid from the common assets$ witho t any obligation to make reimb rsement. Art. 266. The ownership$ administration$ possession and en,oyment of the common property belong to both spo ses ,ointly. (n case of disagreement$ the co rts shall settle the diffic lty. Art. 26-. 5either spo se may alienate or enc mber any common property witho t the consent of the other. (n case of n, stifiable ref sal by the other spo se$ the co rts may grant the necessary consent. Art. 261. The absol te comm nity of property shall be dissol%ed on any of the gro nds specified in Article 1-5. Art. 264. 0hen there is a separation in fact between h sband and wife$ witho t , dicial appro%al$ the pro%isions of Article 1-1 shall apply. Art. 216. >pon the dissol tion and li. idation of the comm nity$ the net assets shall be di%ided e. ally between the h sband and the wife or their heirs. (n case of legal separation or ann lment of marriage$ the pro%isions of Articles 1-6 and 1-- shall apply to the net profits ac. ired d ring the marriage. Art. 211. Li. idation of the absol te comm nity shall be go%erned by the + les of &o rt on the administration of the estate of deceased persons.

CHAPTER < SYSTEM OF COMPLETE SEPARATION OF PROPERTY (n)

Art. 212. ?ho ld the f t re spo ses agree in the marriage settlements that their property relations d ring marriage shall be based pon the system of complete separation of property$ the following pro%isions shall s pplement the marriage settlements. Art. 21'. ?eparation of property may refer to present or f t re property or both. (t may be total or partial. (n the latter case$ the property not agreed pon as separate shall pertain to the con, gal partnership of gains. Art. 21*. 9ach spo se shall own$ dispose of$ possess$ administer and en,oy his or her own separate estate$ witho t the consent of the other. All earnings from any profession$ b siness or ind stry shall likewise belong to each spo se.

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Art. 215. 9ach spo se shall proportionately bear the family e)penses.

Tit ! VII. " THE FAMILY (n) CHAPTER # THE FAMILY AS AN INSTITUTION
Art. 216. The family is a basic social instit tion which p blic policy cherishes and protects. Art. 21-. @amily relations shall incl de those; (1) Aetween h sband and wife7 (2) Aetween parent and child7 (') Among other ascendants and their descendants7 (*) Among brothers and sisters. Art. 211. The law go%erns family relations. 5o c stom$ practice or agreement which is destr cti%e of the family shall be recogni#ed or gi%en any effect. Art. 214. < t al aid$ both moral and material$ shall be rendered among members of the same family. 2 dicial and administrati%e officials shall foster this m t al assistance. Art. 226. (n case of do bt$ all pres mptions fa%or the solidarity of the family. Th s$ e%ery intendment of law or facts leans toward the %alidity of marriage$ the indissol bility of the marriage bonds$ the legitimacy of children$ the comm nity of property d ring marriage$ the a thority of parents o%er their children$ and the %alidity of defense for any member of the family in case of nlawf l aggression. Art. 221. The following shall be %oid and of no effect; (1) Any contract for personal separation between h sband and wife7 (2) 9%ery e)tra/, dicial agreement$ d ring marriage$ for the dissol tion of the con, gal partnership of gains or of the absol te comm nity of property between h sband and wife7 (') 9%ery coll sion to obtain a decree of legal separation$ or of ann lment of marriage7 (*) Any sim lated alienation of property with intent to depri%e the comp lsory heirs of their legitime. Art. 222. 5o s it shall be filed or maintained between members of the same family nless it sho ld appear that earnest efforts toward a compromise ha%e been made$ b t that the same ha%e failed$ s b,ect to the limitations in Article 26'5.

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CHAPTER 2 THE FAMILY HOME (n) SECTION #. " $!n!*+ P*,-i.i,n.

Art. 22'. The family home is the dwelling ho se where a person and his family reside$ and the land on which it is sit ated. (f constit ted as herein pro%ided$ the family home shall be e)empt from e)ec tion$ forced sale or attachment$ e)cept as pro%ided in Articles 2'2 and 2*'. Art. 22*. The family home may be established , dicially or e)tra, dicially.

SECTION 2. " %18i0i+ C,n.tit1ti,n ,4 t5! F+;i 3 H,;!

Art. 225. The family home may be constit ted by a %erified petition to the &o rt of @irst (nstance by the owner of the property$ and by appro%al thereof by the co rt. Art. 226. The following shall be beneficiaries of the family home; (1) The person establishing the same7 (2) 8is or her spo se7 (') 8is or her parents$ ascendants$ descendants$ brothers and sisters$ whether the relationship be legitimate or otherwise$ who are li%ing in the family home and who depend pon him for s pport. Art. 22-. The family home may also be set p by an nmarried person who is the head of a family or ho sehold. Art. 221. (f the petitioner is married$ the family home may be selected from the con, gal partnership or comm nity property$ or from the separate property of the h sband$ or$ with the consent of the wife$ from her paraphernal property. Art. 224. The petition shall contain the following partic lars; (1) Bescription of the property7 (2) An estimate of its act al %al e7 (') A statement that the petitioner is act ally residing in the premises7 (*) The enc mbrances thereon7 (5) The names and addresses of all the creditors of the petitioner and of all mortgagees and other persons who ha%e an interest in the property7

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(6) The names of the other beneficiaries specified in Article 226. Art. 2'6. &reditors$ mortgagees and all other persons who ha%e an interest in the estate shall be notified of the petition$ and gi%en an opport nity to present their ob,ections thereto. The petition shall$ moreo%er$ be p blished once a week for three consec ti%e weeks in a newspaper of general circ lation. Art. 2'1. (f the co rt finds that the act al %al e of the proposed family home does not e)ceed twenty tho sand pesos$ or thirty tho sand pesos in chartered cities$ and that no third person is pre, diced$ the petition shall be appro%ed. ?ho ld any creditor whose claim is nsec red$ oppose the establishment of the family home$ the co rt shall grant the petition if the debtor gi%es s fficient sec rity for the debt. Art. 2'2. The family home$ after its creation by %irt e of , dicial appro%al$ shall be e)empt from e)ec tion$ forced sale$ or attachment$ e)cept; (1) @or nonpayment of ta)es7 or (2) (n satisfaction of a , dgment on a debt sec red by a mortgage constit ted on the immo%able before or after the establishment of the family home. (n case of insol%ency of the person constit ting the family home$ the property shall not be considered one of the assets to be taken possession of by the assignee for the benefit of creditors. Art. 2''. The order of the co rt appro%ing the establishment of the family home shall be recorded in the +egistry of 3roperty. Art. 2'*. 0hen there is danger that a person obliged to gi%e s pport may lose his or her fort ne beca se of gra%e mismanagement or on acco nt of rioto s li%ing$ his or her spo se$ if any$ and a ma,ority of those entitled to be s pported by him or by her may petition the &o rt of @irst (nstance for the creation of the family home. Art. 2'5. The family home may be sold$ alienated or enc mbered by the person who has constit ted the same$ with the consent of his or her spo se$ and with the appro%al of the co rt. 8owe%er$ the family home shall nder no circ mstances be donated as long as there are beneficiaries. (n case of sale$ the price or s ch portion thereof as may be determined by the co rt shall be sed in ac. iring property which shall be formed into a new family home. Any s m of money obtained thro gh an enc mbrance on the family home shall be sed in the interest of the beneficiaries. The co rt shall take meas res to implement the last two pro%isions. Art. 2'6. The family home may be dissol%ed pon the petition of the person who has constit ted the same$ with the written consent of his or her spo se and of at least one half of all the other beneficiaries who are eighteen years of age or o%er. The co rt may grant the petition if it is satisfactorily shown that the best interest of the family re. ires the dissol tion of the family home. Art. 2'-. (n case of legal separation or ann lment of marriage$ the family home shall be dissol%ed$ and the property shall cease to be e)empt from e)ec tion$ forced sale or attachment.

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Art. 2'1. >pon the death of the person who has set p the family home$ the same shall contin e$ nless he desired otherwise in his will. The heirs cannot ask for its partition d ring the first ten years following the death of the person constit ting the same$ nless the co rt finds powerf l reasons therefor. Art. 2'4. The family home shall not be s b,ect to payment of the debts of the deceased$ nless in his will the contrary is stated. 8owe%er$ the claims mentioned in Article 2'2 shall not be ad%ersely affected by the death of the person who has established the family home.

SECTION 3. " E/t*+"618i0i+ C*!+ti,n ,4 t5! F+;i 3 H,;!

Art. 2*6. The family home may be e)tra, dicially constit ted by recording in the +egistry of 3roperty a p blic instr ment wherein a person declares that he thereby establishes a family home o t of a dwelling place with the land on which it is sit ated. Art. 2*1. The declaration setting p the family home shall be nder oath and shall contain; (1) A statement that the claimant is the owner of$ and is act ally residing in the premises7 (2) A description of the property7 (') An estimate of its act al %al e7 and (*) The names of the claimant:s spo se and the other beneficiaries mentioned in Article 226. Art. 2*2. The recording in the +egistry of 3roperty of the declaration referred to in the two preceding articles is the operati%e act which creates the family home. Art. 2*'. The family home e)tra, dicially formed shall be e)empt from e)ec tion$ forced sale or attachment$ e)cept; (1) @or nonpayment of ta)es7 (2) @or debts inc rred before the declaration was recorded in the +egistry of 3roperty7 (') @or debts sec red by mortgages on the premises before or after s ch record of the declaration7 (*) @or debts d e to laborers$ mechanics$ architects$ b ilders$ material/men and others who ha%e rendered ser%ice or f rnished material for the prosec tion of the b ilding. Art. 2**. The pro%isions of Articles 226 to 221 and 2'5 to 2'1 are likewise applicable to family homes e)tra, dicially established.

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Art. 2*5. >pon the death of the person who has e)tra, dicially constit ted the family home$ the property shall not be liable for his debts other than those mentioned in Article 2*'. 8owe%er$ he may pro%ide in his will that the family home shall be s b,ect to payment of debts not specified in Article 2*'. Art. 2*6. 5o declaration for the e)tra, dicial establishment of the family home shall be recorded in the +egistry of 3roperty if the estimated act al %al e of the b ilding and the land e)ceeds the amo nt stated in Article 2'1. Art. 2*-. 0hen a creditor whose claim is not mentioned in Article 2*' obtains a , dgment in his fa%or$ and he has reasonable gro nds to belie%e that the family home of the , dgment debtor is worth more than the amo nt mentioned in Article 2'1$ he may apply to the &o rt of @irst (nstance for an order directing the sale of the property nder e)ec tion. Art. 2*1. The hearing on the petition$ appraisal of the %al e of the family home$ the sale nder e)ec tion and other matters relati%e to the proceedings shall be go%erned by s ch pro%isions in the + les of &o rt as the ? preme &o rt shall prom lgate on the s b,ect$ pro%ided they are not inconsistent with this &ode. Art. 2*4. At the sale nder e)ec tion referred to in the two preceding articles$ no bid shall be considered nless it e)ceeds the amo nt specified in Article 2'1. The proceeds of the sale shall be applied in the following order; (1) To the amo nt mentioned in Article 2'17 (2) To the , dgment and the costs. The e)cess$ if any$ belongs to the person constit ting the family home. Art. 256. The amo nt mentioned in Article 2'1 th s recei%ed by the person who has established the family home$ or as m ch thereof as the co rt may determine$ shall be in%ested in constit tion of a new family home. The co rt shall take meas res to enforce this pro%ision. Art. 251. (n case of insol%ency of the person creating the family home$ the claims specified in Article 2*' may be satisfied notwithstanding the insol%ency proceedings. (f the assignee has reasonable gro nds to belie%e that the act al %al e of the family home e)ceeds the amo nt fi)ed in Article 2'1$ he may take action nder the pro%isions of Articles 2*-$ 2*1 and 2*4.

CHAPTER 3 THE FAMILY COUNCIL (n)

Art. 252. The &o rt of @irst (nstance may$ pon application of any member of the family$ a relati%e$ or a friend$ appoint a family co ncil$ whose d ty it shall be to ad%ise the co rt$ the spo ses$ the parents$ g ardians and the family on important family . estions. Art. 25'. The family co ncil shall be composed of fi%e members$ who shall be relati%es of the parties concerned. A t the co rt may appoint one or two friends of the family.

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Art. 25*. The family co ncil shall elect its chairman$ and shall meet at the call of the latter or pon order of the co rt.

Tit ! VIII. " PATERNITY AND FILIATION CHAPTER # LE$ITIMATE CHILDREN

Art. 255. &hildren born after one h ndred and eighty days following the celebration of the marriage$ and before three h ndred days following its dissol tion or the separation of the spo ses shall be pres med to be legitimate. Against this pres mption no e%idence shall be admitted other than that of the physical impossibility of the h sband:s ha%ing access to his wife within the first one h ndred and twenty days of three h ndred which preceded the birth of the child. This physical impossibility may be ca sed; (1) Ay the impotence of the h sband7 (2) Ay the fact that the h sband and wife were li%ing separately$ in s ch a way that access was not possible7 (') Ay the serio s illness of the h sband. (161a) Art. 256. The child shall be pres med legitimate$ altho gh the mother may ha%e declared against its legitimacy or may ha%e been sentenced as an ad lteress. (164) Art. 25-. ?ho ld the wife commit ad ltery at or abo t the time of the conception of the child$ b t there was no physical impossibility of access between her and her h sband as set forth in Article 255$ the child is prima facie pres med to be illegitimate if it appears highly improbable$ for ethnic reasons$ that the child is that of the h sband. @or the p rposes of this article$ the wife:s ad ltery need not be pro%ed in a criminal case. (n) Art. 251. A child born within one h ndred eighty days following the celebration of the marriage is prima facie pres med to be legitimate. ? ch a child is concl si%ely pres med to be legitimate in any of these cases; (1) (f the h sband$ before the marriage$ knew of the pregnancy of the wife7 (2) (f he consented$ being present$ to the p tting of his s rname on the record of birth of the child7 (') (f he e)pressly or tacitly recogni#ed the child as his own. (116a) Art. 254. (f the marriage is dissol%ed by the death of the h sband$ and the mother contracted another marriage within three h ndred days following s ch death$ these r les shall go%ern; (1) A child born before one h ndred eighty days after the solemni#ation of the s bse. ent marriage is disp tably pres med to ha%e been concei%ed d ring the

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former marriage$ pro%ided it be born within three h ndred days after the death of the former h sband; (2) A child born after one h ndred eighty days following the celebration of the s bse. ent marriage is prima facie pres med to ha%e been concei%ed d ring s ch marriage$ e%en tho gh it be born within the three h ndred days after the death of the former h sband. (n) Art. 266. (f after a , dgment ann lling a marriage$ the former wife sho ld belie%e herself to be pregnant by the former h sband$ she shall$ within thirty days from the time she became aware of her pregnancy$ notify the former h sband or his heirs of that fact. 8e or his heirs may ask the co rt to take meas res to pre%ent a sim lation of birth. The same obligation shall de%ol%e pon a widow who belie%es herself to ha%e been left pregnant by the deceased h sband$ or pon the wife who belie%es herself to be pregnant by her h sband from whom she has been legally separated. (n) Art. 261. There is no pres mption of legitimacy or illegitimacy of a child born after three h ndred days following the dissol tion of the marriage or the separation of the spo ses. 0hoe%er alleges the legitimacy or the illegitimacy of s ch child m st pro%e his allegation. (n) Art. 262. The heirs of the h sband may imp gn the legitimacy of the child only in the following cases; (1) (f the h sband sho ld die before the e)piration of the period fi)ed for bringing his action7 (2) (f he sho ld die after the filing of the complaint$ witho t ha%ing desisted from the same7 (') (f the child was born after the death of the h sband. (112) Art. 26'. The action to imp gn the legitimacy of the child shall be bro ght within one year from the recording of the birth in the &i%il +egister$ if the h sband sho ld be in the same place$ or in a proper case$ any of his heirs. (f he or his heirs are absent$ the period shall be eighteen months if they sho ld reside in the 3hilippines7 and two years if abroad. (f the birth of the child has been concealed$ the term shall be co nted from the disco%ery of the fra d. (11'a) Art. 26*. Legitimate children shall ha%e the right; (1) To bear the s rnames of the father and of the mother7 (2) To recei%e s pport from them$ from their ascendants and in a proper case$ from their brothers and sisters$ in conformity with Article 2417 (') To the legitime and other s ccessional rights which this &ode recogni#es in their fa%or. (11*)

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CHAPTER 2 PROOF OF FILIATION OF LE$ITIMATE CHILDREN

Art. 265. The filiation of legitimate children is pro%ed by the record of birth appearing in the &i%il +egister$ or by an a thentic doc ment or a final , dgment. (115) Art. 266. (n the absence of the titles indicated in the preceding article$ the filiation shall be pro%ed by the contin o s possession of stat s of a legitimate child. (116) Art. 26-. (n the absence of a record of birth$ a thentic doc ment$ final , dgment or possession of stat s$ legitimate filiation may be pro%ed by any other means allowed by the + les of &o rt and special laws. (11-a) Art. 261. The action to claim his legitimacy may be bro ght by the child d ring all his lifetime$ and shall be transmitted to his heirs if he sho ld die d ring his minority or in a state of insanity. (n these cases the heirs shall ha%e a period of fi%e years within which to instit te the action. The action already commenced by the child is transmitted pon his death to the heirs$ if the proceeding has not yet lapsed. (111)

CHAPTER 3 LE$ITIMATED CHILDREN

Art. 264. !nly nat ral children can be legitimated. &hildren born o tside wedlock of parents who$ at the time of the conception of the former$ were not dis. alified by any impediment to marry each other$ are nat ral. (114a) Art. 2-6. Legitimation shall take place by the s bse. ent marriage between the parents. (126a) Art. 2-1. !nly nat ral children who ha%e been recogni#ed by the parents before or after the celebration of the marriage$ or ha%e been declared nat ral children by final , dgment$ may be considered legitimated by s bse. ent marriage. (f a nat ral child is recogni#ed or , dicially declared as nat ral$ s ch recognition or declaration shall e)tend to his or her brothers or sisters of the f ll blood; 3ro%ided$ That the consent of the latter shall be implied if they do not imp gn the recognition within fo r years from the time of s ch recognition$ or in case they are minors$ within fo r years following the attainment of ma,ority. (121a) Art. 2-2. &hildren who are legitimated by s bse. ent marriage shall en,oy the same rights as legitimate children. (122) Art. 2-'. Legitimation shall take effect from the time of the child:s birth. (12'a) Art. 2-*. The legitimation of children who died before the celebration of the marriage shall benefit their descendants. (12*)

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Art. 2-5. Legitimation may be imp gned by those who are pre, diced in their rights$ when it takes place in fa%or of those who do not ha%e the legal condition of nat ral children or when the re. isites laid down in this &hapter are not complied with. (121a)

CHAPTER ) ILLE$ITIMATE CHILDREN SECTION #. " R!0,7niti,n ,4 N+t1*+ C5i 8*!n

Art. 2-6. A nat ral child may be recogni#ed by the father and mother ,ointly$ or by only one of them. (124) Art. 2--. (n case the recognition is made by only one of the parents$ it shall be pres med that the child is nat ral$ if the parent recogni#ing it had legal capacity to contract marriage at the time of the conception. (1'6) Art. 2-1. +ecognition shall be made in the record of birth$ a will$ a statement before a co rt of record$ or in any a thentic writing. (1'1a) Art. 2-4. A minor who may not contract marriage witho t parental consent cannot acknowledge a nat ral child$ nless the parent or g ardian appro%es the acknowledgment or nless the recognition is made in a will. (n) Art. 216. 0hen the father or the mother makes the recognition separately$ he or she shall not re%eal the name of the person with whom he or she had the child7 neither shall he or she state any circ mstance whereby the other parent may be identified. (1'2a) Art. 211. A child who is of age cannot be recogni#ed witho t his consent. 0hen the recognition of a minor does not take place in a record of birth or in a will$ , dicial appro%al shall be necessary. A minor can in any case imp gn the recognition within fo r years following the attainment of his ma,ority. (1''a) Art. 212. A recogni#ed nat ral child has the right; (1) To bear the s rname of the parent recogni#ing him; (2) To recei%e s pport from s ch parent$ in conformity with article 2417 (') To recei%e$ in a proper case$ the hereditary portion which is determined in this &ode. (1'*) Art. 21'. (n any of the following cases$ the father is obliged to recogni#e the child as his nat ral child; (1) (n cases of rape$ abd ction or sed ction$ when the period of the offense coincides more or less with that of the conception7

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(2) 0hen the child is in contin o s possession of stat s of a child of the alleged father by the direct acts of the latter or of his family7 (') 0hen the child was concei%ed d ring the time when the mother cohabited with the s pposed father7 (*) 0hen the child has in his fa%or any e%idence or proof that the defendant is his father. (n) Art. 21*. The mother is obliged to recogni#e her nat ral child; (1) (n any of the cases referred to in the preceding article$ as between the child and the mother7 (2) 0hen the birth and the identity of the child are clearly pro%ed. (1'6a) Art. 215. The action for the recognition of nat ral children may be bro ght only d ring the lifetime of the pres med parents$ e)cept in the following cases; (1) (f the father or mother died d ring the minority of the child$ in which case the latter may file the action before the e)piration of fo r years from the attainment of his ma,ority7 (2) (f after the death of the father or of the mother a doc ment sho ld appear of which nothing had been heard and in which either or both parents recogni#e the child. (n this case$ the action m st be commenced within fo r years from the finding of the doc ment. (1'-a) Art. 216. The recognition made in fa%or of a child who does not possess all the conditions stated in Article 264$ or in which the re. irements of the law ha%e not been f lfilled$ may be imp gned by those who are pre, diced by s ch recognition. (1'-)

SECTION 2. " Ot5!* I !7iti;+t! C5i 8*!n

Art. 21-. (llegitimate children other than nat ral in accordance with Article 264 and other than nat ral children by legal fiction are entitled to s pport and s ch s ccessional rights as are granted in this &ode. (n) Art. 211. <inor children mentioned in the preceding article are of the mother. (n) nder the parental a thority

Art. 214. (n%estigation of the paternity or maternity of children mentioned in the two preceding articles is permitted nder the circ mstances specified in Articles 21' and 21*. (n)

Tit ! I(. " SUPPORT

Art. 246. ? pport is e%erything that is indispensable for s stenance$ dwelling$ clothing and medical attendance$ according to the social position of the family.

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? pport also incl des the ed cation of the person entitled to be s pported ntil he completes his ed cation or training for some profession$ trade or %ocation$ e%en beyond the age of ma,ority. (12*a) Art. 241. The following are obliged to s pport each other to the whole e)tent set forth in the preceding article; (1) The spo ses7 (2) Legitimate ascendants and descendants7 (') 3arents and acknowledged nat ral children and the legitimate or illegitimate descendants of the latter7 (*) 3arents and nat ral children by legal fiction and the legitimate and illegitimate descendants of the latter7 (5) 3arents and illegitimate children who are not nat ral. Arothers and sisters owe their legitimate and nat ral brothers and sisters$ altho gh they are only of the half/blood$ the necessaries for life$ when by a physical or mental defect$ or any other ca se not imp table to the recipients$ the latter cannot sec re their s bsistence. This assistance incl des$ in a proper case$ e)penses necessary for elementary ed cation and for professional or %ocational training. (1*'a) Art. 242. B ring the proceedings for legal separation$ or for ann lment of marriage$ the spo ses and children$ shall be s pported from the con, gal partnership property. After the final , dgment of legal separation$ or of ann lment of marriage$ the obligation of m t al s pport between the spo ses ceases. 8owe%er$ in case of legal separation$ the co rt may order that the g ilty spo se shall gi%e s pport to the innocent one$ the , dgment specifying the terms of s ch order. (n) Art. 24'. (n an action for legal separation or ann lment of marriage$ attorney:s fees and e)penses for litigation shall be charged to the con, gal partnership property$ nless the action fails. (n) Art. 24*. The claim for s pport$ when proper and two or more persons are obliged to gi%e it$ shall be made in the following order; (1) @rom the spo se7 (2) @rom the descendants of the nearest degree7 (') @rom the ascendants$ also of the nearest degree7 (*) @rom the brothers and sisters. Among descendants and ascendants the order in which they are called to the intestate s ccession of the person who has a right to claim s pport shall be obser%ed. (1**) Art. 245. 0hen the obligation to gi%e s pport falls pon two or more persons$ the payment of the same shall be di%ided between them in proportion to the reso rces of each.

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8owe%er$ in case of rgent need and by special circ mstances$ the , dge may order only one of them to f rnish the s pport pro%isionally$ witho t pre, dice to his right to claim from the other obligors the share d e from them. 0hen two or more recipients at the same time claim s pport from one and the same person legally obliged to gi%e it$ and the latter sho ld not ha%e s fficient means to satisfy all$ the order established in the preceding article shall be followed$ nless the conc rrent obligees sho ld be the spo se and a child s b,ect to parental a thority$ in which case the latter shall be preferred. (1*5) Art. 246. The amo nt of s pport$ in the cases referred to in the fi%e n mbers of article 241$ shall be in proportion to the reso rces or means of the gi%er and to the necessities of the recipient. (1*6a) Art. 24-. ? pport in the cases referred to in the preceding article shall be red ced or increased proportionately$ according to the red ction or increase of the needs of the recipient and the reso rces of the person obliged to f rnish the same. (1*-) Art. 241. The obligation to gi%e s pport shall be demandable from the time the person who has a right to recei%e the same needs it for maintenance$ b t it shall not be paid e)cept from the date it is e)tra, dicially demanded. 3ayment shall be made monthly in ad%ance$ and when the recipient dies$ his heirs shall not be obliged to ret rn what he has recei%ed in ad%ance. (1*1a) Art. 244. The person obliged to gi%e s pport may$ at his option$ f lfill his obligation either by paying the allowance fi)ed$ or by recei%ing and maintaining in his ho se the person who has a right to recei%e s pport. The latter alternati%e cannot be a%ailed of in case there is a moral or legal obstacle thereto. (1*4a) Art. '66. The obligation to f rnish s pport ceases pon the death of the obligor$ e%en if he may be bo nd to gi%e it in compliance with a final , dgment. (156) Art. '61. The right to recei%e s pport cannot be reno nced7 nor can it be transmitted to a third person. 5either can it be compensated with what the recipient owes the obligor. 8owe%er$ s pport in arrears may be compensated and reno nced$ and the right to demand the same may be transmitted by onero s or grat ito s title. (151) Art. '62. 5either the right to recei%e legal s pport nor any money or property obtained as s ch s pport or any pension or grat ity from the go%ernment is s b,ect to attachment or e)ec tion. (n) Art. '6'. The obligation to gi%e s pport shall also cease; (1) >pon the death of the recipient7 (2) 0hen the reso rces of the obligor ha%e been red ced to the point where he cannot gi%e the s pport witho t neglecting his own needs and those of his family7

65

(') 0hen the recipient may engage in a trade$ profession$ or ind stry$ or has obtained work$ or has impro%ed his fort ne in s ch a way that he no longer needs the allowance for his s bsistence7 (*) 0hen the recipient$ be he a forced heir or not$ has committed some act which gi%es rise to disinheritance7 (5) 0hen the recipient is a descendant$ brother or sister of the obligor and the need for s pport is ca sed by his or her bad cond ct or by the lack of application to work$ so long as this ca se s bsists. (152a) Art. '6*. The foregoing pro%isions shall be applicable to other cases where$ in %irt e of this &ode or of any other law$ by will$ or by stip lation there is a right to recei%e s pport$ sa%e what is stip lated$ ordered by the testator or pro%ided by law for the special case. (15'a)

Tit ! (. " FUNERALS (n)

Art. '65. The d ty and the right to make arrangements for the f neral of a relati%e shall be in accordance with the order established for s pport$ nder Article 24*. (n case of descendants of the same degree$ or of brothers and sisters$ the oldest shall be preferred. (n case of ascendants$ the paternal shall ha%e a better right. Art. '66. 9%ery f neral shall be in keeping with the social position of the deceased. Art. '6-. The f neral shall be in accordance with the e)pressed wishes of the deceased. (n the absence of s ch e)pression$ his religio s beliefs or affiliation shall determine the f neral rites. (n case of do bt$ the form of the f neral shall be decided pon by the person obliged to make arrangements for the same$ after cons lting the other members of the family. Art. '61. 5o h man remains shall be retained$ interred$ disposed of or e)h med witho t the consent of the persons mentioned in articles 24* and '65. Art. '64. Any person who shows disrespect to the dead$ or wrongf lly interferes with a f neral shall be liable to the family of the deceased for damages$ material and moral. Art. '16. The constr ction of a tombstone or ma sole m shall be deemed a part of the f neral e)penses$ and shall be chargeable to the con, gal partnership property$ if the deceased is one of the spo ses.

Tit ! (I. " PARENTAL AUTHORITY CHAPTER # $ENERAL PROVISIONS

Art. '11. The father and mother ,ointly e)ercise parental a thority o%er their legitimate children who are not emancipated. (n case of disagreement$ the father:s decision shall pre%ail$ nless there is a , dicial order to the contrary. &hildren are obliged to obey their parents so long as they are obser%e respect and re%erence toward them always. nder parental power$ and to

65

+ecogni#ed nat ral and adopted children who are nder the age of ma,ority are parental a thority of the father or mother recogni#ing or adopting them$ and are same obligation stated in the preceding paragraph.

nder the nder the

5at ral children by legal fiction are nder the ,oint a thority of the father and mother$ as pro%ided in the first paragraph of this article. (15*a) Art. '12. "randparents shall be cons lted by all members of the family on all important family . estions. (n) Art. '1'. 3arental a thority cannot be reno nced or transferred$ e)cept in cases of g ardianship or adoption appro%ed by the co rts$ or emancipation by concession. The co rts may$ in cases specified by law$ depri%e parents of their a thority. (n) Art. '1*. A fo ndling shall be has reared the same. (n) nder the parental a thority of the person or instit tion that

Art. '15. 5o descendant can be compelled$ in a criminal case$ to testify against his parents and ascendants. (n)

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

Art. '16. The father and the mother ha%e$ with respect to their nemancipated children; (1) The d ty to s pport them$ to ha%e them in their company$ ed cate and instr ct them in keeping with their means and to represent them in all actions which may redo nd to their benefit7 (2) The power to correct them and to p nish them moderately. (155) Art. '1-. The co rts may appoint a g ardian of the child: s property$ or a g ardian ad litem when the best interest of the child so re. ires. (n) Art. '11. >pon ca se being shown by the parents$ the local mayor may aid them in the e)ercise of their a thority o%er the child. (f the child is to be kept in a children:s home or similar instit tion for not more than one month$ an order of the , stice of the peace or m nicipal , dge shall be necessary$ after d e hearing$ where the child shall be heard. @or his p rpose$ the co rt may appoint a g ardian ad litem. (156a) Art. '14. The father and the mother shall satisfy the s pport for the detained child7 b t they shall not ha%e any inter%ention in the regime of the instit tion where the child is detained. They may lift the detention when they deem it opport ne$ with the appro%al of the co rt. (151a)

CHAPTER 3

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EFFECT OF PARENTAL AUTHORITY ON THE PROPERTY OF THE CHILDREN

Art. '26. The father$ or in his absence the mother$ is the legal administrator of the property pertaining to the child nder parental a thority. (f the property is worth more than two tho sand pesos$ the father or mother shall gi%e a bond s b,ect to the appro%al of the &o rt of @irst (nstance. (154a) Art. '21. The property which the nemancipated child has ac. ired or may ac. ire with his work or ind stry$ or by any l crati%e title$ belongs to the child in ownership$ and in s fr ct to the father or mother nder whom he is nder parental a thority and in whose company he li%es7 b t if the child$ with the parent:s consent$ sho ld li%e independently from them$ he shall be considered as emancipated for all p rposes relati%e to said property$ and he shall ha%e o%er it dominion$ s fr ct and administration. (166) Art. '22. A child who earns money or ac. ires property with his own work or ind stry shall be entitled to a reasonable allowance from the earnings$ in addition to the e)penses made by the parents for his s pport and ed cation. (n) Art. '2'. The fr its and interest of the child:s property referred to in article '21 shall be applied first to the e)penses for the s pport and ed cation of the child. After they ha%e been f lly met$ the debts of the con, gal partnership which ha%e redo nded to the benefit of the family may be paid from said fr its and interest. (n) Art. '2*. 0hate%er the child may ac. ire with the capital or property of the parents belongs to the latter in ownership and in s fr ct. A t if the parents sho ld e)pressly grant him all or part of the profits that he may obtain$ s ch profits shall not be charged against his legitime. (161) Art. '25. The property or income donated$ be. eathed or de%ised to the nemancipated child for the e)penses of his ed cation and instr ction shall pertain to him in ownership and s fr ct7 b t the father or mother shall administer the same$ if in the donation or testamentary pro%ision the contrary has not been stated. (162) Art. '26. 0hen the property of the child is worth more than two tho sand pesos$ the father or mother shall be considered a g ardian of the child:s property$ s b,ect to the d ties and obligations of g ardians nder the + les of &o rt. (n)

CHAPTER ) E(TIN$UISHMENT OF PARENTAL AUTHORITY

Art. '2-. 3arental a thority terminates; (1) >pon the death of the parents or of the child7 (2) >pon emancipation7 (') >pon adoption of the child7 (*) >pon the appointment of a general g ardian. (16-a)

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Art. '21. The mother who contracts a s bse. ent marriage loses the parental a thority o%er her children$ nless the deceased h sband$ father of the latter$ has e)pressly pro%ided in his will that his widow might marry again$ and has ordered that in s ch case she sho ld keep and e)ercise parental a thority o%er their children. The co rt may also appoint a g ardian of the child:s property in case the father sho ld contract a s bse. ent marriage. (161a) Art. '24. 0hen the mother of an illegitimate child marries a man other than its father$ the co rt may appoint a g ardian for the child. (n) Art. ''6. The father and in a proper case the mother$ shall lose a thority o%er their children; (1) 0hen by final , dgment in a criminal case the penalty of depri%ation of said a thority is imposed pon him or her7 (2) 0hen by a final , dgment in legal separation proceedings s ch loss of a thority is declared. (164a) Art. ''1. 3arental a thority is s spended by the incapacity or absence of the father$ or in a proper case of the mother$ , dicially declared$ and also by ci%il interdiction. (1-6) Art. ''2. The co rts may depri%e the parents of their a thority or s spend the e)ercise of the same if they sho ld treat their children with e)cessi%e harshness or sho ld gi%e them corr pting orders$ co nsels$ or e)amples$ or sho ld make them beg or abandon them. (n these cases$ the co rts may also depri%e the parents in whole or in part$ of the s fr ct o%er the child:s property$ or adopt s ch meas res as they may deem ad%isable in the interest of the child. (1-1a) Art. '''. (f the widowed mother who has contracted a s bse. ent marriage sho ld again become a widow$ she shall reco%er from this moment her parental a thority o%er all her nemancipated children. (1-2)

CHAPTER : ADOPTION
Art. ''*. 9%ery person of age$ who is in f ll possession of his ci%il rights$ may adopt. (1-'a) Art. ''5. The following cannot adopt; (1) Those who ha%e legitimate$ legitimated$ acknowledged nat ral children$ or nat ral children by legal fiction7 (2) The g ardian$ with respect to the ward$ before the final appro%al of his acco nts7 (') A married person$ witho t the consent of the other spo se7 (*) 5on/resident aliens7 (5) +esident aliens with whose go%ernment the +ep blic of the 3hilippines has broken diplomatic relations7

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(6) Any person who has been con%icted of a crime in%ol%ing moral t rpit de$ when the penalty imposed was si) months: imprisonment or more. (1-*a) Art. ''6. The h sband and wife may ,ointly adopt. 3arental a thority shall$ in s ch case$ be e)ercised as if the child were their own by nat re. (n) Art. ''-. Any person$ e%en if of age$ may be adopted$ pro%ided the adopter is si)teen years older. (1-'a)

Art. ''1. The following may be adopted; (1) The nat ral child$ by the nat ral father or mother7 (2) !ther illegitimate children$ by the father or mother7 (') A step/child$ by the step/father or step/mother. (n) Art. ''4. The following cannot be adopted; (1) A married person$ witho t the written consent of the other spo se7 (2) An alien with whose go%ernment the +ep blic of the 3hilippines has broken diplomatic relations7 (') A person who has already been adopted. (n) Art. '*6. The written consent of the following to the adoption shall be necessary; (1) The person to be adopted$ if fo rteen years of age or o%er7 (2) The parents$ g ardian or person in charge of the person to be adopted. (n) Art. '*1. The adoption shall; (1) "i%e to the adopted person the same rights and d ties as if he were a legitimate child of the adopter; (2) Bissol%e the a thority %ested in the parents by nat re7 (') <ake the adopted person a legal heir of the adopter7 (*) 9ntitle the adopted person to se the adopter:s s rname. (n) Art. '*2. The adopter shall not be a legal heir of the adopted person$ whose parents by nat re shall inherit from him. (1--a) Art. '*'. (f the adopter is s r%i%ed by legitimate parents or ascendants and by an adopted person$ the latter shall not ha%e more s ccession rights than an acknowledged nat ral child. (n)

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Art. '**. The adopter may donate property$ by an act inter %i%o or by will$ to the adopted person$ who shall ac. ire ownership thereof. (n) Art. '*5. The proceedings for adoption shall be go%erned by the + les of &o rt insofar as they are not in conflict with this &ode. (n) Art. '*6. The adoption shall be recorded in the local ci%il register. (1-4a) Art. '*-. A minor or other incapacitated person may$ thro gh a g ardian ad litem$ ask for the rescission of the adoption on the same gro nds that ca se the loss of parental a thority. (n) Art. '*1. The adopter may petition the co rt for re%ocation of the adoption in any of these cases; (1) (f the adopted person has attempted against the life of the adopter7 (2) 0hen the adopted minor has abandoned the home of the adopter for more than three years7 (') 0hen by other acts the adopted person has definitely rep diated the adoption. (n)

CHAPTER 6 SUBSTITUTE PARENTAL AUTHORITY (n)

Art. '*4. The following persons shall e)ercise s bstit te parental a thority; (1) " ardians7 (2) Teachers and professors7 (') 8eads of children:s homes$ orphanages$ and similar instit tions7 (*) Birectors of trade establishments$ with regard to apprentices7 (5) "randparents7 (6) The oldest brother or sister. Art. '56. The persons named in the preceding article shall e)ercise reasonable s per%ision o%er the cond ct of the child. Art. '51. A general g ardian or a g ardian o%er the person shall ha%e the same a thority o%er the ward:s person as the parents. 0ith regard to the child:s property$ the + les of &o rt on g ardianship shall go%ern. Art. '52. The relations between teacher and p pil$ professor and st dent$ are fi)ed by go%ernment reg lations and those of each school or instit tion. (n no case shall corporal p nishment be co ntenanced. The teacher or professor shall c lti%ate the best potentialities of the heart and mind of the p pil or st dent.

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Art. '5'. Apprentices shall be treated h manely. 5o corporal p nishment against the apprentice shall be permitted. Art. '5*. "randparents and in their defa lt the oldest brother or sister shall e)ercise parental a thority in case of death or absence of the child:s parents. (f the parents are li%ing$ or if the child is nder g ardianship$ the grandparents may gi%e ad%ice and co nsel to the child$ to the parents or to the g ardian. Art. '55. ? bstit te parental a thority shall be e)ercised by the grandparents in the following order; (1) 3aternal grandparents7 (2) <aternal grandparents.

Tit ! (II. " CARE AND EDUCATION OF CHILDREN

Art. '56. 9%ery child; (1) (s entitled to parental care7 (2) ?hall recei%e at least elementary ed cation7 (') ?hall be gi%en moral and ci%ic training by the parents or g ardian7 (*) 8as a right to li%e in an atmosphere cond ci%e to his physical$ moral and intellect al de%elopment. Art. '5-. 9%ery child shall; (1) !bey and honor his parents or g ardian7 (2) +espect his grandparents$ old relati%es$ and persons holding s bstit te parental a thority7 (') 9)ert his tmost for his ed cation and training7 (*) &ooperate with the family in all matters that make for the good of the same. Art. '51. 9%ery parent and e%ery person holding s bstit te parental a thority shall see to it that the rights of the child are respected and his d ties complied with$ and shall partic larly$ by precept and e)ample$ imb e the child with highmindedness$ lo%e of co ntry$ %eneration for the national heroes$ fidelity to democracy as a way of life$ and attachment to the ideal of permanent world peace. Art. '54. The go%ernment promotes the f ll growth of the fac lties of e%ery child. @or this p rpose$ the go%ernment will establish$ whene%er possible; (1) ?chools in e%ery barrio$ m nicipality and city where optional religio s instr ction shall be ta ght as part of the c rric l m at the option of the parent or g ardian7 (2) 3 eric lt re and similar centers7

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(') &o ncils for the 3rotection of &hildren7 and (*) 2 %enile co rts. Art. '66. The &o ncil for the 3rotection of &hildren shall look after the welfare of children in the m nicipality. (t shall$ among other f nctions; (1) @oster the ed cation of e%ery child in the m nicipality7 (2) 9nco rage the c lti%ation of the d ties of parents7 (') 3rotect and assist abandoned or mistreated children$ and orphans7 (*) Take steps to pre%ent , %enile delin. ency7 (5) Adopt meas res for the health of children7 (6) 3romote the opening and maintenance of playgro nds7 (-) &oordinate the acti%ities of organi#ations de%oted to the welfare of children$ and sec re their cooperation. Art. '61. 2 %enile co rts will be established$ as far as practicable$ in e%ery chartered city or large m nicipality. Art. '62. 0hene%er a child is fo nd delin. ent by any co rt$ the father$ mother$ or g ardian may in a proper case be , dicially admonished. Art. '6'. (n all . estions on the care$ c stody$ ed cation and property of children the latter:s welfare shall be paramo nt. 5o mother shall be separated from her child nder se%en years of age$ nless the co rt finds compelling reasons for s ch meas re.

Tit ! (III. " USE OF SURNAMES (n)

Art. '6*. Legitimate and legitimated children shall principally se the s rname of the father. Art. '65. An adopted child shall bear the s rname of the adopter. Art. '66. A nat ral child acknowledged by both parents shall principally se the s rname of the father. (f recogni#ed by only one of the parents$ a nat ral child shall employ the s rname of the recogni#ing parent. Art. '6-. 5at ral children by legal fiction shall principally employ the s rname of the father. Art. '61. (llegitimate children referred to in Article 21- shall bear the s rname of the mother. Art. '64. &hildren concei%ed before the decree ann lling a %oidable marriage shall principally se the s rname of the father.

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Art. '-6. A married woman may se; (1) 8er maiden first name and s rname and add her h sband:s s rname$ or (2) 8er maiden first name and her h sband:s s rname or (') 8er h sband:s f ll name$ b t prefi)ing a word indicating that she is his wife$ s ch as "Mrs." Art. '-1. (n case of ann lment of marriage$ and the wife is the g ilty party$ she shall res me her maiden name and s rname. (f she is the innocent spo se$ she may res me her maiden name and s rname. 8owe%er$ she may choose to contin e employing her former h sband:s s rname$ nless; (1) The co rt decrees otherwise$ or (2) ?he or the former h sband is married again to another person. Art. '-2. 0hen legal separation has been granted$ the wife shall contin e and s rname employed before the legal separation. sing her name

Art. '-'. A widow may se the deceased h sband:s s rname as tho gh he were still li%ing$ in accordance with Article '-6. Art. '-*. (n case of identity of names and s rnames$ the yo nger person shall be obliged to se s ch additional name or s rname as will a%oid conf sion. Art. '-5. (n case of identity of names and s rnames between ascendants and descendants$ the word "Junior" can be sed only by a son. "randsons and other direct male descendants shall either; (1) Add a middle name or the mother:s s rname$ or (2) Add the +oman 5 merals (($ ((($ and so on. Art. '-6. 5o person can change his name or s rname witho t , dicial a thority. Art. '--. >s rpation of a name and s rname may be the s b,ect of an action for damages and other relief. Art. '-1. The na thori#ed or action to the latter. nlawf l se of another person:s s rname gi%es a right of

Art. '-4. The employment of pen names or stage names is permitted$ pro%ided it is done in good faith and there is no in, ry to third persons. 3en names and stage names cannot be s rped. Art. '16. 9)cept as pro%ided in the preceding article$ no person shall and s rnames. se different names

Tit ! (IV. " ABSENCE

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CHAPTER # PROVISIONAL MEASURES IN CASE OF ABSENCE

Art. '11. 0hen a person disappears from his domicile$ his whereabo ts being nknown$ and witho t lea%ing an agent to administer his property$ the , dge$ at the instance of an interested party$ a relati%e$ or a friend$ may appoint a person to represent him in all that may be necessary. This same r le shall be obser%ed when nder similar circ mstances the power conferred by the absentee has e)pired. (111a) Art. '12. The appointment referred to in the preceding article ha%ing been made$ the , dge shall take the necessary meas res to safeg ard the rights and interests of the absentee and shall specify the powers$ obligations and rem neration of his representati%e$ reg lating them$ according to the circ mstances$ by the r les concerning g ardians. (112) Art. '1'. (n the appointment of a representati%e$ the spo se present shall be preferred when there is no legal separation. (f the absentee left no spo se$ or if the spo se present is a minor$ any competent person may be appointed by the co rt. (11'a)

CHAPTER 2 DECLARATION OF ABSENCE

Art. '1*. Two years ha%ing elapsed witho t any news abo t the absentee or since the receipt of the last news$ and fi%e years in case the absentee has left a person in charge of the administration of his property$ his absence may be declared. (11*) Art. '15. The following may ask for the declaration of absence; (1) The spo se present7 (2) The heirs instit ted in a will$ who may present an a thentic copy of the same7 (') The relati%es who may s cceed by the law of intestacy7 (*) Those who may ha%e o%er the property of the absentee some right s bordinated to the condition of his death. (115) Art. '16. The , dicial declaration of absence shall not take effect p blication in a newspaper of general circ lation. (116a) ntil si) months after its

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CHAPTER 3 ADMINISTRATION OF THE PROPERTY OF THE ABSENTEE

Art. '1-. An administrator of the absentee:s property shall be appointed in accordance with Article '1'. (11-a) Art. '11. The wife who is appointed as an administratri) of the h sband:s property cannot alienate or enc mber the h sband:s property$ or that of the con, gal partnership$ witho t , dicial a thority. (111a) Art. '14. The administration shall cease in any of the following cases; (1) 0hen the absentee appears personally or by means of an agent7 (2) 0hen the death of the absentee is pro%ed and his testate or intestate heirs appear7 (') 0hen a third person appears$ showing by a proper doc ment that he has ac. ired the absentee:s property by p rchase or other title. (n these cases the administrator shall cease in the performance of his office$ and the property shall be at the disposal of those who may ha%e a right thereto. (146)

CHAPTER ) PRESUMPTION OF DEATH

Art. '46. After an absence of se%en years$ it being nknown whether or not the absentee still li%es$ he shall be pres med dead for all p rposes$ e)cept for those of s ccession. The absentee shall not be pres med dead for the p rpose of opening his s ccession till after an absence of ten years. (f he disappeared after the age of se%enty/fi%e years$ an absence of fi%e years shall be s fficient in order that his s ccession may be opened. (n) Art. '41. The following shall be pres med dead for all p rposes$ incl ding the di%ision of the estate among the heirs; (1) A person on board a %essel lost d ring a sea %oyage$ or an aeroplane which is missing$ who has not been heard of for fo r years since the loss of the %essel or aeroplane7 (2) A person in the armed forces who has taken part in war$ and has been missing for fo r years7 (') A person who has been in danger of death e)istence has not been known for fo r years. (n) nder other circ mstances and his

Art. '42. (f the absentee appears$ or witho t appearing his e)istence is pro%ed$ he shall reco%er his property in the condition in which it may be fo nd$ and the price of any property

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that may ha%e been alienated or the property ac. ired therewith7 b t he cannot claim either fr its or rents. (14*)

CHAPTER : EFFECT OF ABSENCE UPON THE CONTIN$ENT RI$HTS OF THE ABSENTEE

Art. '4'. 0hoe%er claims a right pertaining to a person whose e)istence is not recogni#ed m st pro%e that he was li%ing at the time his e)istence was necessary in order to ac. ire said right. (145) Art. '4*. 0itho t pre, dice to the pro%ision of the preceding article$ pon the opening of a s ccession to which an absentee is called$ his share shall accr e to his co/heirs$ nless he has heirs$ assigns$ or a representati%e. They shall all$ as the case may be$ make an in%entory of the property. (146a) Art. '45. The pro%isions of the preceding article are nderstood to be witho t pre, dice to the action of petition for inheritance or other rights which are %ested in the absentee$ his representati%es or s ccessors in interest. These rights shall not be e)ting ished sa%e by lapse of time fi)ed for prescription. (n the record that is made in the +egistry of the real estate which accr es to the coheirs$ the circ mstance of its being s b,ect to the pro%isions of this article shall be stated. (14-) Art. '46. Those who may ha%e entered pon the inheritance shall appropriate the fr its recei%ed in good faith so long as the absentee does not appear$ or while his representati%es or s ccessors in interest do not bring the proper actions. (141)

Tit ! (V. " EMANCIPATION AND A$E OF MA%ORITY CHAPTER # EMANCIPATION

Art. '4-. 9mancipation takes place; (1) Ay the marriage of the minor7 (2) Ay the attainment of ma,ority7 (') Ay the concession of the father or of the mother who e)ercise parental a thority. ('1*)

65

Art. '41. 9mancipation treated of in 5o. ' of the preceding article shall be effected in a p blic instr ment which shall be recorded in the &i%il +egister$ and nless so recorded$ it shall take no effect against third persons. ('16a) Art. '44. 9mancipation by marriage or by %ol ntary concession shall terminate parental a thority o%er the child:s person. (t shall enable the minor to administer his property as tho gh he were of age$ b t he cannot borrow money or alienate or enc mber real property witho t the consent of his father or mother$ or g ardian. 8e can s e and be s ed in co rt only with the assistance of his father$ mother or g ardian. ('1-a) Art. *66. (n order that emancipation by concession of the father or of the mother may take place$ it is re. ired that the minor be eighteen years of age$ and that he gi%e his consent thereto. ('11) Art. *61. 9mancipation is final or irre%ocable. ('14a)

CHAPTER 2 A$E OF MA%ORITY

Art. *62. <a,ority commences pon the attainment of the age of twenty/one years. The person who has reached ma,ority is . alified for all acts of ci%il life$ sa%e the e)ceptions established by this &ode in special cases. ('26a) Art. *6'. 5otwithstanding the pro%isions of the preceding article$ a da ghter abo%e twenty/ one b t below twenty/three years of age cannot lea%e the parental home witho t the consent of the father or mother in whose company she li%es$ e)cept to become a wife$ or when she e)ercises a profession or calling$ or when the father or mother has contracted a s bse. ent marriage. ('21a) Art. *6*. An orphan who is minor may$ at the instance of any relati%e or other person$ obtain emancipation by concession pon an order of the &o rt of @irst (nstance. ('22a) Art. *65. @or the concession and appro%al referred to in the preceding article it is necessary; (1) That the minor be eighteen years of age7 (2) That he consent thereto7 and (') That the concession be deemed con%enient for the minor. The concession shall be recorded in the &i%il +egister. ('2'a) Art. *66. The pro%isions of Article '44 are applicable to an orphan who has been emancipated according to Article *6*. The co rt will gi%e the necessary appro%al with respect to the contracts mentioned in Article '44. (n litigations$ a g ardian ad litem for the minor shall be appointed by the co rt. ('2*a)

65

Tit ! (VI. " CIVIL RE$ISTER

Art. *6-. Acts$ e%ents and , dicial decrees concerning the ci%il stat s of persons shall be recorded in the ci%il register. ('25a) Art. *61. The following shall be entered in the ci%il register; (1) Airths7 (2) marriages7 (') deaths7 (*) legal separations7 (5) ann lments of marriage7 (6) , dgments declaring marriages %oid from the beginning7 (-) legitimations7 (1) adoptions7 (4) acknowledgments of nat ral children7 (16) nat rali#ation7 (11) loss$ or (12) reco%ery of citi#enship7 (1') ci%il interdiction7 (1*) , dicial determination of filiation7 (15) %ol ntary emancipation of a minor7 and (16) changes of name. ('26a) Art. *64. (n cases of legal separation$ adoption$ nat rali#ation and other , dicial orders mentioned in the preceding article$ it shall be the d ty of the clerk of the co rt which iss ed the decree to ascertain whether the same has been registered$ and if this has not been done$ to send a copy of said decree to the ci%il registry of the city or m nicipality where the co rt is f nctioning. (n) Art. *16. The books making p the ci%il register and all doc ments relating thereto shall be considered p blic doc ments and shall be prima facie e%idence of the facts therein contained. (n) Art. *11. 9%ery ci%il registrar shall be ci%illy responsible for any na thori#ed alteration made in any ci%il register$ to any person s ffering damage thereby. 8owe%er$ the ci%il registrar may e)empt himself from s ch liability if he pro%es that he has taken e%ery reasonable preca tion to pre%ent the nlawf l alteration. (n) Art. *12. 5o entry in a ci%il register shall be changed or corrected$ witho t a , dicial order. (n) Art. *1'. All other matters pertaining to the registration of ci%il stat s shall be go%erned by special laws. (n)

REPUBLIC ACT NO. 386 AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES BOO> II

65

PROPERTY? OWNERSHIP? AND ITS MODIFICATIONS Tit ! I. " CLASSIFICATION OF PROPERTY

3+9L(<(5A+C 3+!=(?(!5? Art. *1*. All things which are or may be the ob,ect of appropriation are considered either; (1) (mmo%able or real property7 or (2) <o%able or personal property. (''')

CHAPTER # IMMOVABLE PROPERTY

Art. *15. The following are immo%able property; (1) Land$ b ildings$ roads and constr ctions of all kinds adhered to the soil7 (2) Trees$ plants$ and growing fr its$ while they are attached to the land or form an integral part of an immo%able7 (') 9%erything attached to an immo%able in a fi)ed manner$ in s ch a way that it cannot be separated therefrom witho t breaking the material or deterioration of the ob,ect7 (*) ?tat es$ reliefs$ paintings or other ob,ects for se or ornamentation$ placed in b ildings or on lands by the owner of the immo%able in s ch a manner that it re%eals the intention to attach them permanently to the tenements7 (5) <achinery$ receptacles$ instr ments or implements intended by the owner of the tenement for an ind stry or works which may be carried on in a b ilding or on a piece of land$ and which tend directly to meet the needs of the said ind stry or works7 (6) Animal ho ses$ pigeon/ho ses$ beehi%es$ fish ponds or breeding places of similar nat re$ in case their owner has placed them or preser%es them with the intention to ha%e them permanently attached to the land$ and forming a permanent part of it7 the animals in these places are incl ded7 (-) @ertili#er act ally sed on a piece of land7 (1) <ines$ . arries$ and slag d mps$ while the matter thereof forms part of the bed$ and waters either r nning or stagnant7 (4) Bocks and str ct res which$ tho gh floating$ are intended by their nat re and ob,ect to remain at a fi)ed place on a ri%er$ lake$ or coast7 (16) &ontracts for p blic works$ and ser%it des and other real rights o%er immo%able property. (''*a)

65

CHAPTER 2 MOVABLE PROPERTY

Art. *16. The following things are deemed to be personal property; (1) Those mo%ables s sceptible of appropriation which are not incl ded in the preceding article7 (2) +eal property which by any special pro%ision of law is considered as personal property7 (') @orces of nat re which are bro ght nder control by science7 and (*) (n general$ all things which can be transported from place to place witho t impairment of the real property to which they are fi)ed. (''5a) Art. *1-. The following are also considered as personal property; (1) !bligations and actions which ha%e for their ob,ect mo%ables or demandable s ms7 and (2) ?hares of stock of agric lt ral$ commercial and ind strial entities$ altho gh they may ha%e real estate. (''6a) Art. *11. <o%able property is either cons mable or noncons mable. To the first class belong those mo%ables which cannot be sed in a manner appropriate to their nat re witho t their being cons med7 to the second class belong all the others. (''-)

CHAPTER 3 PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELON$S

Art. *14. 3roperty is either of p blic dominion or of pri%ate ownership. (''1) Art. *26. The following things are property of p blic dominion; (1) Those intended for p blic se$ s ch as roads$ canals$ ri%ers$ torrents$ ports and bridges constr cted by the ?tate$ banks$ shores$ roadsteads$ and others of similar character7 (2) Those which belong to the ?tate$ witho t being for p blic se$ and are intended for some p blic ser%ice or for the de%elopment of the national wealth. (''4a) Art. *21. All other property of the ?tate$ which is not of the character stated in the preceding article$ is patrimonial property. ('*6a) Art. *22. 3roperty of p blic dominion$ when no longer intended for p blic ser%ice$ shall form part of the patrimonial property of the ?tate. ('*1a) se or for p blic

Art. *2'. The property of pro%inces$ cities$ and m nicipalities is di%ided into property for p blic se and patrimonial property. ('*')

65

Art. *2*. 3roperty for p blic se$ in the pro%inces$ cities$ and m nicipalities$ consist of the pro%incial roads$ city streets$ m nicipal streets$ the s. ares$ fo ntains$ p blic waters$ promenades$ and p blic works for p blic ser%ice paid for by said pro%inces$ cities$ or m nicipalities. All other property possessed by any of them is patrimonial and shall be go%erned by this &ode$ witho t pre, dice to the pro%isions of special laws. ('**a) Art. *25. 3roperty of pri%ate ownership$ besides the patrimonial property of the ?tate$ pro%inces$ cities$ and m nicipalities$ consists of all property belonging to pri%ate persons$ either indi%id ally or collecti%ely. ('*5a)

PROVISIONS COMMON TO THE THREE PRECEDIN$ CHAPTERS

Art. *26. 0hene%er by pro%ision of the law$ or an indi%id al declaration$ the e)pression "immovable things or property," or "movable things or property," is sed$ it shall be deemed to incl de$ respecti%ely$ the things en merated in &hapter 1 and &hapter 2. 0hene%er the word "muebles," or "furniture," is sed alone$ it shall not be deemed to incl de money$ credits$ commercial sec rities$ stocks and bonds$ ,ewelry$ scientific or artistic collections$ books$ medals$ arms$ clothing$ horses or carriages and their accessories$ grains$ li. ids and merchandise$ or other things which do not ha%e as their principal ob,ect the f rnishing or ornamenting of a b ilding$ e)cept where from the conte)t of the law$ or the indi%id al declaration$ the contrary clearly appears. ('*6a)

Tit ! II. " OWNERSHIP CHAPTER # OWNERSHIP IN $ENERAL

Art. *2-. !wnership may be e)ercised o%er things or rights. (n) Art. *21. The owner has the right to en,oy and dispose of a thing$ witho t other limitations than those established by law. The owner has also a right of action against the holder and possessor of the thing in order to reco%er it. ('*1a) Art. *24. The owner or lawf l possessor of a thing has the right to e)cl de any person from the en,oyment and disposal thereof. @or this p rpose$ he may se s ch force as may be reasonably necessary to repel or pre%ent an act al or threatened nlawf l physical in%asion or s rpation of his property. (n) Art. *'6. 9%ery owner may enclose or fence his land or tenements by means of walls$ ditches$ li%e or dead hedges$ or by any other means witho t detriment to ser%it des constit ted thereon. ('11)

65

Art. *'1. The owner of a thing cannot make rights of a third person. (n)

se thereof in s ch manner as to in, re the

Art. *'2. The owner of a thing has no right to prohibit the interference of another with the same$ if the interference is necessary to a%ert an imminent danger and the threatened damage$ compared to the damage arising to the owner from the interference$ is m ch greater. The owner may demand from the person benefited indemnity for the damage to him. (n) Art. *''. Act al possession nder claim of ownership raises disp table pres mption of ownership. The tr e owner m st resort to , dicial process for the reco%ery of the property. (n) Art. *'*. (n an action to reco%er$ the property m st be identified$ and the plaintiff m st rely on the strength of his title and not on the weakness of the defendant:s claim. (n) Art. *'5. 5o person shall be depri%ed of his property e)cept by competent a thority and for p blic se and always pon payment of , st compensation. ?ho ld this re. irement be not first complied with$ the co rts shall protect and$ in a proper case$ restore the owner in his possession. ('*4a) Art. *'6. 0hen any property is condemned or sei#ed by competent a thority in the interest of health$ safety or sec rity$ the owner thereof shall not be entitled to compensation$ nless he can show that s ch condemnation or sei# re is n, stified. (n) Art. *'-. The owner of a parcel of land is the owner of its s rface and of e%erything nder it$ and he can constr ct thereon any works or make any plantations and e)ca%ations which he may deem proper$ witho t detriment to ser%it des and s b,ect to special laws and ordinances. 8e cannot complain of the reasonable re. irements of aerial na%igation. ('56a) Art. *'1. 8idden treas re belongs to the owner of the land$ b ilding$ or other property on which it is fo nd. 5e%ertheless$ when the disco%ery is made on the property of another$ or of the ?tate or any of its s bdi%isions$ and by chance$ one/half thereof shall be allowed to the finder. (f the finder is a trespasser$ he shall not be entitled to any share of the treas re. (f the things fo nd be of interest to science of the arts$ the ?tate may ac. ire them at their , st price$ which shall be di%ided in conformity with the r le stated. ('51a) Art. *'4. Ay treas re is nderstood$ for legal p rposes$ any hidden and nknown deposit of money$ ,ewelry$ or other precio s ob,ects$ the lawf l ownership of which does not appear. ('52)

CHAPTER 3 RI$HT OF ACCESSION $ENERAL PROVISIONS

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Art. **6. The ownership of property gi%es the right by accession to e%erything which is prod ced thereby$ or which is incorporated or attached thereto$ either nat rally or artificially. ('5')

SECTION #. " Ri75t ,4 A00!..i,n @it5 R!.2!0t t, W5+t i. P*,810!8 93 P*,2!*t3

Art. **1. To the owner belongs; (1) The nat ral fr its7 (2) The ind strial fr its7 (') The ci%il fr its. ('5*) Art. **2. 5at ral fr its are the spontaneo s prod cts of the soil$ and the yo ng and other prod cts of animals. (nd strial fr its are those prod ced by lands of any kind thro gh c lti%ation or labor. &i%il fr its are the rents of b ildings$ the price of leases of lands and other property and the amo nt of perpet al or life ann ities or other similar income. ('55a) Art. **'. 8e who recei%es the fr its has the obligation to pay the e)penses made by a third person in their prod ction$ gathering$ and preser%ation. ('56) Art. ***. !nly s ch as are manifest or born are considered as nat ral or ind strial fr its. 0ith respect to animals$ it is s fficient that they are in the womb of the mother$ altho gh nborn. ('5-)

SECTION 2. " Ri75t ,4 A00!..i,n @it5 R!.2!0t t, I;;,-+9 ! P*,2!*t3

Art. **5. 0hate%er is b ilt$ planted or sown on the land of another and the impro%ements or repairs made thereon$ belong to the owner of the land$ s b,ect to the pro%isions of the following articles. ('51) Art. **6. All works$ sowing$ and planting are pres med made by the owner and at his e)pense$ nless the contrary is pro%ed. ('54) Art. **-. The owner of the land who makes thereon$ personally or thro gh another$ plantings$ constr ctions or works with the materials of another$ shall pay their %al e7 and$ if he acted in bad faith$ he shall also be obliged to the reparation of damages. The owner of the materials shall ha%e the right to remo%e them only in case he can do so witho t in, ry to the work constr cted$ or witho t the plantings$ constr ctions or works being destroyed. 8owe%er$ if the landowner acted in bad faith$ the owner of the materials may remo%e them in any e%ent$ with a right to be indemnified for damages. ('66a)

65

Art. **1. The owner of the land on which anything has been b ilt$ sown or planted in good faith$ shall ha%e the right to appropriate as his own the works$ sowing or planting$ after payment of the indemnity pro%ided for in Articles 5*6 and 5*1$ or to oblige the one who b ilt or planted to pay the price of the land$ and the one who sowed$ the proper rent. 8owe%er$ the b ilder or planter cannot be obliged to b y the land if its %al e is considerably more than that of the b ilding or trees. (n s ch case$ he shall pay reasonable rent$ if the owner of the land does not choose to appropriate the b ilding or trees after proper indemnity. The parties shall agree pon the terms of the lease and in case of disagreement$ the co rt shall fi) the terms thereof. ('61a) Art. **4. 8e who b ilds$ plants or sows in bad faith on the land of another$ loses what is b ilt$ planted or sown witho t right to indemnity. ('62) Art. *56. The owner of the land on which anything has been b ilt$ planted or sown in bad faith may demand the demolition of the work$ or that the planting or sowing be remo%ed$ in order to replace things in their former condition at the e)pense of the person who b ilt$ planted or sowed7 or he may compel the b ilder or planter to pay the price of the land$ and the sower the proper rent. ('6'a) Art. *51. (n the cases of the two preceding articles$ the landowner is entitled to damages from the b ilder$ planter or sower. (n) Art. *52. The b ilder$ planter or sower in bad faith is entitled to reimb rsement for the necessary e)penses of preser%ation of the land. (n) Art. *5'. (f there was bad faith$ not only on the part of the person who b ilt$ planted or sowed on the land of another$ b t also on the part of the owner of s ch land$ the rights of one and the other shall be the same as tho gh both had acted in good faith. (t is nderstood that there is bad faith on the part of the landowner whene%er the act was done with his knowledge and witho t opposition on his part. ('5*a) Art. *5*. 0hen the landowner acted in bad faith and the b ilder$ planter or sower proceeded in good faith$ the pro%isions of article **- shall apply. (n) Art. *55. (f the materials$ plants or seeds belong to a third person who has not acted in bad faith$ the owner of the land shall answer s bsidiarily for their %al e and only in the e%ent that the one who made se of them has no property with which to pay. This pro%ision shall not apply if the owner makes se of the right granted by article *56. (f the owner of the materials$ plants or seeds has been paid by the b ilder$ planter or sower$ the latter may demand from the landowner the %al e of the materials and labor. ('65a) Art. *56. (n the cases reg lated in the preceding articles$ good faith does not necessarily e)cl de negligence$ which gi%es right to damages nder article 21-6. (n) Art. *5-. To the owners of lands ad,oining the banks of ri%ers belong the accretion which they grad ally recei%e from the effects of the c rrent of the waters. (''6) Art. *51. The owners of estates ad,oining ponds or lagoons do not ac. ire the land left dry by the nat ral decrease of the waters$ or lose that in ndated by them in e)traordinary floods. ('6-)

65

Art. *54. 0hene%er the c rrent of a ri%er$ creek or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate$ the owner of the land to which the segregated portion belonged retains the ownership of it$ pro%ided that he remo%es the same within two years. ('61a) Art. *66. Trees prooted and carried away by the c rrent of the waters belong to the owner of the land pon which they may be cast$ if the owners do not claim them within si) months. (f s ch owners claim them$ they shall pay the e)penses inc rred in gathering them or p tting them in a safe place. ('64a) Art. *61. +i%er beds which are abandoned thro gh the nat ral change in the co rse of the waters ipso facto belong to the owners whose lands are occ pied by the new co rse in proportion to the area lost. 8owe%er$ the owners of the lands ad,oining the old bed shall ha%e the right to ac. ire the same by paying the %al e thereof$ which %al e shall not e)ceed the %al e of the area occ pied by the new bed. ('-6a) Art. *62. 0hene%er a ri%er$ changing its co rse by nat ral ca ses$ opens a new bed thro gh a pri%ate estate$ this bed shall become of p blic dominion. ('-2a) Art. *6'. 0hene%er the c rrent of a ri%er di%ides itself into branches$ lea%ing a piece of land or part thereof isolated$ the owner of the land retains his ownership. 8e also retains it if a portion of land is separated from the estate by the c rrent. ('-*) Art. *6*. (slands which may be formed on the seas within the , risdiction of the 3hilippines$ on lakes$ and on na%igable or floatable ri%ers belong to the ?tate. ('-1a) Art. *65. (slands which thro gh s ccessi%e acc m lation of all %ial deposits are formed in non/na%igable and non/floatable ri%ers$ belong to the owners of the margins or banks nearest to each of them$ or to the owners of both margins if the island is in the middle of the ri%er$ in which case it shall be di%ided longit dinally in hal%es. (f a single island th s formed be more distant from one margin than from the other$ the owner of the nearer margin shall be the sole owner thereof. ('-'a)

SECTION 3. " Ri75t ,4 A00!..i,n @it5 R!.2!0t t, M,-+9 ! P*,2!*t3

Art. *66. 0hene%er two mo%able things belonging to different owners are$ witho t bad faith$ nited in s ch a way that they form a single ob,ect$ the owner of the principal thing ac. ires the accessory$ indemnifying the former owner thereof for its %al e. ('-5) Art. *6-. The principal thing$ as between two things incorporated$ is deemed to be that to which the other has been nited as an ornament$ or for its se or perfection. ('-6) Art. *61. (f it cannot be determined by the r le gi%en in the preceding article which of the two things incorporated is the principal one$ the thing of the greater %al e shall be so considered$ and as between two things of e. al %al e$ that of the greater %ol me. (n painting and sc lpt re$ writings$ printed matter$ engra%ing and lithographs$ the board$ metal$ stone$ can%as$ paper or parchment shall be deemed the accessory thing. ('--)

65

Art. *64. 0hene%er the things nited can be separated witho t in, ry$ their respecti%e owners may demand their separation. 5e%ertheless$ in case the thing nited for the se$ embellishment or perfection of the other$ is m ch more precio s than the principal thing$ the owner of the former may demand its separation$ e%en tho gh the thing to which it has been incorporated may s ffer some in, ry. ('-1) Art. *-6. 0hene%er the owner of the accessory thing has made the incorporation in bad faith$ he shall lose the thing incorporated and shall ha%e the obligation to indemnify the owner of the principal thing for the damages he may ha%e s ffered. (f the one who has acted in bad faith is the owner of the principal thing$ the owner of the accessory thing shall ha%e a right to choose between the former paying him its %al e or that the thing belonging to him be separated$ e%en tho gh for this p rpose it be necessary to destroy the principal thing7 and in both cases$ f rthermore$ there shall be indemnity for damages. (f either one of the owners has made the incorporation with the knowledge and witho t the ob,ection of the other$ their respecti%e rights shall be determined as tho gh both acted in good faith. ('-4a) Art. *-1. 0hene%er the owner of the material employed witho t his consent has a right to an indemnity$ he may demand that this consist in the deli%ery of a thing e. al in kind and %al e$ and in all other respects$ to that employed$ or else in the price thereof$ according to e)pert appraisal. ('16) Art. *-2. (f by the will of their owners two things of the same or different kinds are mi)ed$ or if the mi)t re occ rs by chance$ and in the latter case the things are not separable witho t in, ry$ each owner shall ac. ire a right proportional to the part belonging to him$ bearing in mind the %al e of the things mi)ed or conf sed. ('11) Art. *-'. (f by the will of only one owner$ b t in good faith$ two things of the same or different kinds are mi)ed or conf sed$ the rights of the owners shall be determined by the pro%isions of the preceding article. (f the one who ca sed the mi)t re or conf sion acted in bad faith$ he shall lose the thing belonging to him th s mi)ed or conf sed$ besides being obliged to pay indemnity for the damages ca sed to the owner of the other thing with which his own was mi)ed. ('12) Art. *-*. !ne who in good faith employs the material of another in whole or in part in order to make a thing of a different kind$ shall appropriate the thing th s transformed as his own$ indemnifying the owner of the material for its %al e. (f the material is more precio s than the transformed thing or is of more %al e$ its owner may$ at his option$ appropriate the new thing to himself$ after first paying indemnity for the %al e of the work$ or demand indemnity for the material. (f in the making of the thing bad faith inter%ened$ the owner of the material shall ha%e the right to appropriate the work to himself witho t paying anything to the maker$ or to demand of the latter that he indemnify him for the %al e of the material and the damages he may ha%e s ffered. 8owe%er$ the owner of the material cannot appropriate the work in case the

65

%al e of the latter$ for artistic or scientific reasons$ is considerably more than that of the material. ('1'a) Art. *-5. (n the preceding articles$ sentimental %al e shall be d ly appreciated. (n)

CHAPTER 3 'UIETIN$ OF TITLE (n)

Art. *-6. 0hene%er there is a clo d on title to real property or any interest therein$ by reason of any instr ment$ record$ claim$ enc mbrance or proceeding which is apparently %alid or effecti%e b t is in tr th and in fact in%alid$ ineffecti%e$ %oidable$ or nenforceable$ and may be pre, dicial to said title$ an action may be bro ght to remo%e s ch clo d or to . iet the title. An action may also be bro ght to pre%ent a clo d from being cast pon title to real property or any interest therein. Art. *--. The plaintiff m st ha%e legal or e. itable title to$ or interest in the real property which is the s b,ect matter of the action. 8e need not be in possession of said property. Art. *-1. There may also be an action to . iet title or remo%e a clo d therefrom when the contract$ instr ment or other obligation has been e)ting ished or has terminated$ or has been barred by e)tincti%e prescription. Art. *-4. The plaintiff m st ret rn to the defendant all benefits he may ha%e recei%ed from the latter$ or reimb rse him for e)penses that may ha%e redo nded to the plaintiff:s benefit. Art. *16. The principles of the general law on the . ieting of title are hereby adopted insofar as they are not in conflict with this &ode. Art. *11. The proced re for the . ieting of title or the remo%al of a clo d therefrom shall be go%erned by s ch r les of co rt as the ? preme &o rt shall prom lgated.

CHAPTER ) RUINOUS BUILDIN$S AND TREES IN DAN$ER OF FALLIN$

Art. *12. (f a b ilding$ wall$ col mn$ or any other constr ction is in danger of falling$ the owner shall be obliged to demolish it or to e)ec te the necessary work in order to pre%ent it from falling. (f the proprietor does not comply with this obligation$ the administrati%e a thorities may order the demolition of the str ct re at the e)pense of the owner$ or take meas res to ins re p blic safety. ('14a) Art. *1'. 0hene%er a large tree threatens to fall in s ch a way as to ca se damage to the land or tenement of another or to tra%elers o%er a p blic or pri%ate road$ the owner of the tree shall be obliged to fell and remo%e it7 and sho ld he not do so$ it shall be done at his

65

e)pense

by

order

of

the

administrati%e

a thorities.

('46a)

Tit ! III. " CO"OWNERSHIP

Art. *1*. There is co/ownership whene%er the ownership of an belongs to different persons. ndi%ided thing or right

(n defa lt of contracts$ or of special pro%isions$ co/ownership shall be go%erned by the pro%isions of this Title. ('42) Art. *15. The share of the co/owners$ in the benefits as well as in the charges$ shall be proportional to their respecti%e interests. Any stip lation in a contract to the contrary shall be %oid. The portions belonging to the co/owners in the co/ownership shall be pres med e. al$ nless the contrary is pro%ed. ('4'a) Art. *16. 9ach co/owner may se the thing owned in common$ pro%ided he does so in accordance with the p rpose for which it is intended and in s ch a way as not to in, re the interest of the co/ownership or pre%ent the other co/owners from sing it according to their rights. The p rpose of the co/ownership may be changed by agreement$ e)press or implied. ('4*a) Art. *1-. Any one of the co/owners may bring an action in e,ectment. (n) Art. *11. 9ach co/owner shall ha%e a right to compel the other co/owners to contrib te to the e)penses of preser%ation of the thing or right owned in common and to the ta)es. Any one of the latter may e)empt himself from this obligation by reno ncing so m ch of his ndi%ided interest as may be e. i%alent to his share of the e)penses and ta)es. 5o s ch wai%er shall be made if it is pre, dicial to the co/ownership. ('45a) Art. *14. +epairs for preser%ation may be made at the will of one of the co/owners$ b t he m st$ if practicable$ first notify his co/owners of the necessity for s ch repairs. 9)penses to impro%e or embellish the thing shall be decided pon by a ma,ority as determined in Article *42. (n) Art. *46. 0hene%er the different stories of a ho se belong to different owners$ if the titles of ownership do not specify the terms nder which they sho ld contrib te to the necessary e)penses and there e)ists no agreement on the s b,ect$ the following r les shall be obser%ed; (1) The main and party walls$ the roof and the other things sed in common$ shall be preser%ed at the e)pense of all the owners in proportion to the %al e of the story belonging to each7 (2) 9ach owner shall bear the cost of maintaining the floor of his story7 the floor of the entrance$ front door$ common yard and sanitary works common to all$ shall be maintained at the e)pense of all the owners pro rata7 (') The stairs from the entrance to the first story shall be maintained at the e)pense of all the owners pro rata$ with the e)ception of the owner of the gro nd floor7 the stairs from the first to the second story shall be preser%ed at the e)pense of all$

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e)cept the owner of the gro nd floor and the owner of the first story7 and so on s ccessi%ely. ('46) Art. *41. 5one of the co/owners shall$ witho t the consent of the others$ make alterations in the thing owned in common$ e%en tho gh benefits for all wo ld res lt therefrom. 8owe%er$ if the withholding of the consent by one or more of the co/owners is clearly pre, dicial to the common interest$ the co rts may afford ade. ate relief. ('4-a) Art. *42. @or the administration and better en,oyment of the thing owned in common$ the resol tions of the ma,ority of the co/owners shall be binding. There shall be no ma,ority nless the resol tion is appro%ed by the co/owners who represent the controlling interest in the ob,ect of the co/ownership. ?ho ld there be no ma,ority$ or sho ld the resol tion of the ma,ority be serio sly pre, dicial to those interested in the property owned in common$ the co rt$ at the instance of an interested party$ shall order s ch meas res as it may deem proper$ incl ding the appointment of an administrator. 0hene%er a part of the thing belongs e)cl si%ely to one of the co/owners$ and the remainder is owned in common$ the preceding pro%ision shall apply only to the part owned in common. ('41) Art. *4'. 9ach co/owner shall ha%e the f ll ownership of his part and of the fr its and benefits pertaining thereto$ and he may therefore alienate$ assign or mortgage it$ and e%en s bstit te another person in its en,oyment$ e)cept when personal rights are in%ol%ed. A t the effect of the alienation or the mortgage$ with respect to the co/owners$ shall be limited to the portion which may be alloted to him in the di%ision pon the termination of the co/ ownership. ('44) Art. *4*. 5o co/owner shall be obliged to remain in the co/ownership. 9ach co/owner may demand at any time the partition of the thing owned in common$ insofar as his share is concerned. 5e%ertheless$ an agreement to keep the thing ndi%ided for a certain period of time$ not e)ceeding ten years$ shall be %alid. This term may be e)tended by a new agreement. A donor or testator may prohibit partition for a period which shall not e)ceed twenty years. 5either shall there be any partition when it is prohibited by law. 5o prescription shall r n in fa%or of a co/owner or co/heir against his co/owners or co/heirs ., ,n7 +. 5! !/2*!.. 3 ,* i;2 i!8 3 *!0,7niA!. the co/ownership. (*66a) Art. *45. 5otwithstanding the pro%isions of the preceding article$ the co/owners cannot demand a physical di%ision of the thing owned in common$ when to do so wo ld render it nser%iceable for the se for which it is intended. A t the co/ownership may be terminated in accordance with Article *41. (*61a) Art. *46. 3artition may be made by agreement between the parties or by , dicial proceedings. 3artition shall be go%erned by the + les of &o rt insofar as they are consistent with this &ode. (*62)

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Art. *4-. The creditors or assignees of the co/owners may take part in the di%ision of the thing owned in common and ob,ect to its being effected witho t their conc rrence. A t they cannot imp gn any partition already e)ec ted$ nless there has been fra d$ or in case it was made notwithstanding a formal opposition presented to pre%ent it$ witho t pre, dice to the right of the debtor or assignor to maintain its %alidity. (*6') Art. *41. 0hene%er the thing is essentially indi%isible and the co/owners cannot agree that it be allotted to one of them who shall indemnify the others$ it shall be sold and its proceeds distrib ted. (*6*) Art. *44. The partition of a thing owned in common shall not pre, dice third persons$ who shall retain the rights of mortgage$ ser%it de or any other real rights belonging to them before the di%ision was made. 3ersonal rights pertaining to third persons against the co/ ownership shall also remain in force$ notwithstanding the partition. (*65) Art. 566. >pon partition$ there shall be a m t al acco nting for benefits recei%ed and reimb rsements for e)penses made. Likewise$ each co/owner shall pay for damages ca sed by reason of his negligence or fra d. (n) Art. 561. 9%ery co/owner shall$ after partition$ be liable for defects of title and . ality of the portion assigned to each of the other co/owners. (n)

Tit ! IV. " SOME SPECIAL PROPERTIES CHAPTER I WATERS SECTION #. " O@n!*.5i2 ,4 W+t!*.
Art. 562. The following are of p blic dominion; (1) +i%ers and their nat ral beds7 (2) &ontin o s or intermittent waters of springs and brooks r nning in their nat ral beds and the beds themsel%es7 (') 0aters rising contin o sly or intermittently on lands of p blic dominion7 (*) Lakes and lagoons formed by 5at re on p blic lands$ and their beds7 (5) +ain waters r nning thro gh ra%ines or sand beds$ which are also of p blic dominion7

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(6) ? bterranean waters on p blic lands7 (-) 0aters fo nd within the #one of operation of p blic works$ e%en if constr cted by a contractor7 (1) 0aters rising contin o sly or intermittently on lands belonging to pri%ate persons$ to the ?tate$ to a pro%ince$ or to a city or a m nicipality from the moment they lea%e s ch lands7 (4) The waste waters of fo ntains$ sewers and p blic establishments. (*6-) Art. 56'. The following are of pri%ate ownership; (1) &ontin o s or intermittent waters rising on lands of pri%ate ownership$ while r nning thro gh the same7 (2) Lakes and lagoons$ and their beds$ formed by 5at re on s ch lands7 (') ? bterranean waters fo nd on the same7 (*) +ain waters falling on said lands$ as long as they remain within the bo ndaries7 (5) The beds of flowing waters$ contin o s or intermittent$ formed by rain water$ and those of brooks$ crossing lands which are not of p blic dominion. (n e%ery drain or a. ed ct$ the water$ bed$ banks and floodgates shall be considered as an integral part of the land of b ilding for which the waters are intended. The owners of lands$ thro gh which or along the bo ndaries of which the a. ed ct passes$ cannot claim ownership o%er it$ or any right to the se of its bed or banks$ nless the claim is based on titles of ownership specifying the right or ownership claimed. (*61)

SECTION 2. " T5! U.! ,4 P19 i0 W+t!*.

Art. 56*. The se of p blic waters is ac. ired; (1) Ay administrati%e concession7 (2) Ay prescription for ten years. The e)tent of the rights and obligations of the se shall be that established$ in the first case$ by the terms of the concession$ and$ in the second case$ by the manner and form in which the waters ha%e been sed. (*64a) Art. 565. 9%ery concession for the third persons. (*16) se of waters is nderstood to be witho t pre, dice to

Art. 566. The right to make se of p blic waters is e)ting ished by the lapse of the concession and by non/ ser for fi%e years. (*11a)

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SECTION 3. " T5! U.! ,4 W+t!*. ,4 P*i-+t! O@n!*.5i2

Art. 56-. The owner of a piece of land on which a spring or brook rises$ be it contin o s or intermittent$ may se its waters while they r n thro gh the same$ b t after the waters lea%e the land they shall become p blic$ and their se shall be go%erned by the ?pecial Law of 0aters of A g st '$ 1166$ and by the (rrigation Law. (*12a) Art. 561. The pri%ate ownership of the beds of rain waters does not gi%e a right to make works or constr ctions which may change their co rse to the damage of third persons$ or whose destr ction$ by the force of floods$ may ca se s ch damage. (*1') Art. 564. 5o one may enter pri%ate property to search waters or make se of them witho t permission from the owners$ e)cept as pro%ided by the <ining Law. (*1*a) Art. 516. The ownership which the proprietor of a piece of land has o%er the waters rising thereon does not pre, dice the rights which the owners of lower estates may ha%e legally ac. ired to the se thereof. (*15) Art. 511. 9%ery owner of a piece of land has the right to constr ct within his property$ reser%oirs for rain waters$ pro%ided he ca ses no damage to the p blic or to third persons. (*16)

SECTION ). " S19t!**+n!+n W+t!*.

Art. 512. !nly the owner of a piece of land$ or another person with his permission$ may make e)plorations thereon for s bterranean waters$ e)cept as pro%ided by the <ining Law. 9)plorations for s bterranean waters on lands of p blic dominion may be made only with the permission of the administrati%e a thorities. (*1-a) Art. 51'. 0aters artificially bro ght forth in accordance with the ?pecial Law of 0aters of A g st '$ 1166$ belong to the person who bro ght them p. (*11) Art. 51*. 0hen the owner of waters artificially bro ght to the s rface abandons them to their nat ral co rse$ they shall become of p blic dominion. (*14)

SECTION :. " $!n!*+ P*,-i.i,n.

Art. 515. The owner of a piece of land on which there are defensi%e works to check waters$ or on which$ d e to a change of their co rse$ it may be necessary to reconstr ct s ch works$ shall be obliged$ at his election$ either to make the necessary repairs or constr ction himself$ or to permit them to be done$ witho t damage to him$ by the owners of the lands which s ffer or are clearly e)posed to s ffer in, ry. (*26) Art. 516. The pro%isions of the preceding article are applicable to the case in which it may be necessary to clear a piece of land of matter$ whose acc m lation or fall may obstr ct the co rse of the waters$ to the damage or peril of third persons. (*21)

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Art. 51-. All the owners who participate in the benefits arising from the works referred to in the two preceding articles$ shall be obliged to contrib te to the e)penses of constr ction in proportion to their respecti%e interests. Those who by their fa lt may ha%e ca sed the damage shall be liable for the e)penses. (*22) Art. 511. All matters not e)pressly determined by the pro%isions of this &hapter shall be go%erned by the special Law of 0aters of A g st '$ 1166$ and by the (rrigation Law. (*25a)

CHAPTER 2 MINERALS
Art. 514. <ining claims and rights and other matters concerning minerals and mineral lands are go%erned by special laws. (*2-a)

CHAPTER 3 TRADE"MAR>S AND TRADE"NAMES

Art. 526. A trade/mark or trade/name d ly registered in the proper go%ernment b rea or office is owned by and pertains to the person$ corporation$ or firm registering the same$ s b,ect to the pro%isions of special laws. (n) Art. 521. The goodwill of a b siness is property$ and may be transferred together with the right to se the name nder which the b siness is cond cted. (n) Art. 522. Trade/marks and trade/names are go%erned by special laws. (n)

Tit ! V. " POSSESSION CHAPTER # POSSESSION AND THE >INDS THEREOF

Art. 52'. 3ossession is the holding of a thing or the en,oyment of a right. (*'6a) Art. 52*. 3ossession may be e)ercised in one:s own name or in that of another. (*1'a) Art. 525. The possession of things or rights may be had in one of two concepts; either in the concept of owner$ or in that of the holder of the thing or right to keep or en,oy it$ the ownership pertaining to another person. (*'2) Art. 526. 8e is deemed a possessor in good faith who is not aware that there e)ists in his title or mode of ac. isition any flaw which in%alidates it.

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8e is deemed a possessor in bad faith who possesses in any case contrary to the foregoing. <istake pon a do btf l or diffic lt . estion of law may be the basis of good faith. (*''a) Art. 52-. "ood faith is always pres med$ and pon him who alleges bad faith on the part of a possessor rests the b rden of proof. (*'*) Art. 521. 3ossession ac. ired in good faith does not lose this character e)cept in the case and from the moment facts e)ist which show that the possessor is not naware that he possesses the thing improperly or wrongf lly. (*'5a) Art. 524. (t is pres med that possession contin es to be en,oyed in the same character in which it was ac. ired$ ntil the contrary is pro%ed. (*'6) Art. 5'6. !nly things and rights which are s sceptible of being appropriated may be the ob,ect of possession. (*'-)

CHAPTER 2 AC'UISITION OF POSSESSION

Art. 5'1. 3ossession is ac. ired by the material occ pation of a thing or the e)ercise of a right$ or by the fact that it is s b,ect to the action of o r will$ or by the proper acts and legal formalities established for ac. iring s ch right. (*'1a) Art. 5'2. 3ossession may be ac. ired by the same person who is to en,oy it$ by his legal representati%e$ by his agent$ or by any person witho t any power whate%er; b t in the last case$ the possession shall not be considered as ac. ired ntil the person in whose name the act of possession was e)ec ted has ratified the same$ witho t pre, dice to the , ridical conse. ences of negotior m gestio in a proper case. (*'4a) Art. 5''. The possession of hereditary property is deemed transmitted to the heir witho t interr ption and from the moment of the death of the decedent$ in case the inheritance is accepted. !ne who %alidly reno nces an inheritance is deemed ne%er to ha%e possessed the same. (**6) Art. 5'*. !n who s cceeds by hereditary title shall not s ffer the conse. ences of the wrongf l possession of the decedent$ if it is not shown that he was aware of the flaws affecting it7 b t the effects of possession in good faith shall not benefit him e)cept from the date of the death of the decedent. (**2) Art. 5'5. <inors and incapacitated persons may ac. ire the possession of things7 b t they need the assistance of their legal representati%es in order to e)ercise the rights which from the possession arise in their fa%or. (**') Art. 5'6. (n no case may possession be ac. ired thro gh force or intimidation as long as there is a possessor who ob,ects thereto. 8e who belie%es that he has an action or a right to depri%e another of the holding of a thing$ m st in%oke the aid of the competent co rt$ if the holder sho ld ref se to deli%er the thing. (**1a)

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Art. 5'-. Acts merely tolerated$ and those e)ec ted clandestinely and witho t the knowledge of the possessor of a thing$ or by %iolence$ do not affect possession. (***) Art. 5'1. 3ossession as a fact cannot be recogni#ed at the same time in two different personalities e)cept in the cases of co/possession. ?ho ld a . estion arise regarding the fact of possession$ the present possessor shall be preferred7 if there are two possessors$ the one longer in possession7 if the dates of the possession are the same$ the one who presents a title7 and if all these conditions are e. al$ the thing shall be placed in , dicial deposit pending determination of its possession or ownership thro gh proper proceedings. (**5)

CHAPTER 3 EFFECTS OF POSSESSION

Art. 5'4. 9%ery possessor has a right to be respected in his possession7 and sho ld he be dist rbed therein he shall be protected in or restored to said possession by the means established by the laws and the + les of &o rt. A possessor depri%ed of his possession thro gh forcible entry may within ten days from the filing of the complaint present a motion to sec re from the competent co rt$ in the action for forcible entry$ a writ of preliminary mandatory in, nction to restore him in his possession. The co rt shall decide the motion within thirty ('6) days from the filing thereof. (**6a) Art. 5*6. !nly the possession ac. ired and en,oyed in the concept of owner can ser%e as a title for ac. iring dominion. (**-) Art. 5*1. A possessor in the concept of owner has in his fa%or the legal pres mption that he possesses with a , st title and he cannot be obliged to show or pro%e it. (**1a) Art. 5*2. The possession of real property pres mes that of the mo%ables therein$ so long as it is not shown or pro%ed that they sho ld be e)cl ded. (**4) Art. 5*'. 9ach one of the participants of a thing possessed in common shall be deemed to ha%e e)cl si%ely possessed the part which may be allotted to him pon the di%ision thereof$ for the entire period d ring which the co/possession lasted. (nterr ption in the possession of the whole or a part of a thing possessed in common shall be to the pre, dice of all the possessors. 8owe%er$ in case of ci%il interr ption$ the + les of &o rt shall apply. (*56a) Art. 5**. A possessor in good faith is entitled to the fr its recei%ed before the possession is legally interr pted. 5at ral and ind strial fr its are considered recei%ed from the time they are gathered or se%ered. &i%il fr its are deemed to accr e daily and belong to the possessor in good faith in that proportion. (*51) Art. 5*5. (f at the time the good faith ceases$ there sho ld be any nat ral or ind strial fr its$ the possessor shall ha%e a right to a part of the e)penses of c lti%ation$ and to a part of the net har%est$ both in proportion to the time of the possession. The charges shall be di%ided on the same basis by the two possessors.

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The owner of the thing may$ sho ld he so desire$ gi%e the possessor in good faith the right to finish the c lti%ation and gathering of the growing fr its$ as an indemnity for his part of the e)penses of c lti%ation and the net proceeds7 the possessor in good faith who for any reason whate%er sho ld ref se to accept this concession$ shall lose the right to be indemnified in any other manner. (*52a) Art. 5*6. 5ecessary e)penses shall be ref nded to e%ery possessor7 b t only the possessor in good faith may retain the thing ntil he has been reimb rsed therefor. >sef l e)penses shall be ref nded only to the possessor in good faith with the same right of retention$ the person who has defeated him in the possession ha%ing the option of ref nding the amo nt of the e)penses or of paying the increase in %al e which the thing may ha%e ac. ired by reason thereof. (*5'a) Art. 5*-. (f the sef l impro%ements can be remo%ed witho t damage to the principal thing$ the possessor in good faith may remo%e them$ nless the person who reco%ers the possession e)ercises the option nder paragraph 2 of the preceding article. (n) Art. 5*1. 9)penses for p re l ) ry or mere pleas re shall not be ref nded to the possessor in good faith7 b t he may remo%e the ornaments with which he has embellished the principal thing if it s ffers no in, ry thereby$ and if his s ccessor in the possession does not prefer to ref nd the amo nt e)pended. (*5*) Art. 5*4. The possessor in bad faith shall reimb rse the fr its recei%ed and those which the legitimate possessor co ld ha%e recei%ed$ and shall ha%e a right only to the e)penses mentioned in paragraph 1 of Article 5*6 and in Article **'. The e)penses inc rred in impro%ements for p re l ) ry or mere pleas re shall not be ref nded to the possessor in bad faith$ b t he may remo%e the ob,ects for which s ch e)penses ha%e been inc rred$ pro%ided that the thing s ffers no in, ry thereby$ and that the lawf l possessor does not prefer to retain them by paying the %al e they may ha%e at the time he enters into possession. (**5a) Art. 556. The costs of litigation o%er the property shall be borne by e%ery possessor. (n) Art. 551. (mpro%ements ca sed by nat re or time shall always ins re to the benefit of the person who has s cceeded in reco%ering possession. (*56) Art. 552. A possessor in good faith shall not be liable for the deterioration or loss of the thing possessed$ e)cept in cases in which it is pro%ed that he has acted with fra d lent intent or negligence$ after the , dicial s mmons. A possessor in bad faith shall be liable for deterioration or loss in e%ery case$ e%en if ca sed by a fort ito s e%ent. (*5-a) Art. 55'. !ne who reco%ers possession shall not be obliged to pay for impro%ements which ha%e ceased to e)ist at the time he takes possession of the thing. (*51) Art. 55*. A present possessor who shows his possession at some pre%io s time$ is pres med to ha%e held possession also d ring the intermediate period$ in the absence of proof to the contrary. (*54) Art. 555. A possessor may lose his possession;

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(1) Ay the abandonment of the thing7 (2) Ay an assignment made to another either by onero s or grat ito s title7 (') Ay the destr ction or total loss of the thing$ or beca se it goes o t of commerce7 (*) Ay the possession of another$ s b,ect to the pro%isions of Article 5'-$ if the new possession has lasted longer than one year. A t the real right of possession is not lost till after the lapse of ten years. (*66a) Art. 556. The possession of mo%ables is not deemed lost so long as they remain nder the control of the possessor$ e%en tho gh for the time being he may not know their whereabo ts. (*61) Art. 55-. The possession of immo%ables and of real rights is not deemed lost$ or transferred for p rposes of prescription to the pre, dice of third persons$ e)cept in accordance with the pro%isions of the <ortgage Law and the Land +egistration laws. (*62a) Art. 551. Acts relating to possession$ e)ec ted or agreed to by one who possesses a thing belonging to another as a mere holder to en,oy or keep it$ in any character$ do not bind or pre, dice the owner$ nless he ga%e said holder e)press a thority to do s ch acts$ or ratifies them s bse. ently. (*6') Art. 554. The possession of mo%able property ac. ired in good faith is e. i%alent to a title. 5e%ertheless$ one who has lost any mo%able or has been nlawf lly depri%ed thereof may reco%er it from the person in possession of the same. (f the possessor of a mo%able lost or which the owner has been nlawf lly depri%ed$ has ac. ired it in good faith at a p blic sale$ the owner cannot obtain its ret rn witho t reimb rsing the price paid therefor. (*6*a) Art. 566. 0ild animals are possessed only while they are nder one:s control7 domesticated or tamed animals are considered domestic or tame if they retain the habit of ret rning to the premises of the possessor. (*65) Art. 561. !ne who reco%ers$ according to law$ possession n, stly lost$ shall be deemed for all p rposes which may redo nd to his benefit$ to ha%e en,oyed it witho t interr ption. (*66)

Tit ! VI. " USUFRUCT CHAPTER # USUFRUCT IN $ENERAL

Art. 562. >s fr ct gi%es a right to en,oy the property of another with the obligation of preser%ing its form and s bstance$ nless the title constit ting it or the law otherwise pro%ides. (*6-) Art. 56'. >s fr ct is constit ted by law$ by the will of pri%ate persons e)pressed in acts inter %i%os or in a last will and testament$ and by prescription. (*61)

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Art. 56*. >s fr ct may be constit ted on the whole or a part of the fr its of the thing$ in fa%or of one more persons$ sim ltaneo sly or s ccessi%ely$ and in e%ery case from or to a certain day$ p rely or conditionally. (t may also be constit ted on a right$ pro%ided it is not strictly personal or intransmissible. (*64) Art. 565. The rights and obligations of the s fr ct ary shall be those pro%ided in the title constit ting the s fr ct7 in defa lt of s ch title$ or in case it is deficient$ the pro%isions contained in the two following &hapters shall be obser%ed. (*-6)

CHAPTER 2 RI$HTS OF THE USUFRUCTUARY

Art. 566. The s fr ct ary shall be entitled to all the nat ral$ ind strial and ci%il fr its of the property in s fr ct. 0ith respect to hidden treas re which may be fo nd on the land or tenement$ he shall be considered a stranger. (*-1) Art. 56-. 5at ral or ind strial fr its growing at the time the s fr ct ary. s fr ct begins$ belong to the

Those growing at the time the s fr ct terminates$ belong to the owner. (n the preceding cases$ the s fr ct ary$ at the beginning of the s fr ct$ has no obligation to ref nd to the owner any e)penses inc rred7 b t the owner shall be obliged to reimb rse at the termination of the s fr ct$ from the proceeds of the growing fr its$ the ordinary e)penses of c lti%ation$ for seed$ and other similar e)penses inc rred by the s fr ct ary. The pro%isions of this article shall not pre, dice the rights of third persons$ ac. ired either at the beginning or at the termination of the s fr ct. (*-2) Art. 561. (f the s fr ct ary has leased the lands or tenements gi%en in s fr ct$ and the s fr ct sho ld e)pire before the termination of the lease$ he or his heirs and s ccessors shall recei%e only the proportionate share of the rent that m st be paid by the lessee. (*-') Art. 564. &i%il fr its are deemed to accr e daily$ and belong to the s fr ct ary in proportion to the time the s fr ct may last. (*-*) Art. 5-6. 0hene%er a s fr ct is constit ted on the right to recei%e a rent or periodical pension$ whether in money or in fr its$ or in the interest on bonds or sec rities payable to bearer$ each payment d e shall be considered as the proceeds or fr its of s ch right. 0hene%er it consists in the en,oyment of benefits accr ing from a participation in any ind strial or commercial enterprise$ the date of the distrib tion of which is not fi)ed$ s ch benefits shall ha%e the same character. (n either case they shall be distrib ted as ci%il fr its$ and shall be applied in the manner prescribed in the preceding article. (*-5)

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Art. 5-1. The s fr ct ary shall ha%e the right to en,oy any increase which the thing in s fr ct may ac. ire thro gh accession$ the ser%it des established in its fa%or$ and$ in general$ all the benefits inherent therein. (*-4) Art. 5-2. The s fr ct ary may personally en,oy the thing in s fr ct$ lease it to another$ or alienate his right of s fr ct$ e%en by a grat ito s title7 b t all the contracts he may enter into as s ch s fr ct ary shall terminate pon the e)piration of the s fr ct$ sa%ing leases of r ral lands$ which shall be considered as s bsisting d ring the agric lt ral year. (*16) Art. 5-'. 0hene%er the s fr ct incl des things which$ witho t being cons med$ grad ally deteriorate thro gh wear and tear$ the s fr ct ary shall ha%e the right to make se thereof in accordance with the p rpose for which they are intended$ and shall not be obliged to ret rn them at the termination of the s fr ct e)cept in their condition at that time7 b t he shall be obliged to indemnify the owner for any deterioration they may ha%e s ffered by reason of his fra d or negligence. (*11) Art. 5-*. 0hene%er the s fr ct incl des things which cannot be sed witho t being cons med$ the s fr ct ary shall ha%e the right to make se of them nder the obligation of paying their appraised %al e at the termination of the s fr ct$ if they were appraised when deli%ered. (n case they were not appraised$ he shall ha%e the right to ret rn at the same . antity and . ality$ or pay their c rrent price at the time the s fr ct ceases. (*12) Art. 5-5. The s fr ct ary of fr it/bearing trees and shr bs may make se of the dead tr nks$ and e%en of those c t off or prooted by accident$ nder the obligation to replace them with new plants. (*1'a) Art. 5-6. (f in conse. ence of a calamity or e)traordinary e%ent$ the trees or shr bs shall ha%e disappeared in s ch considerable n mber that it wo ld not be possible or it wo ld be too b rdensome to replace them$ the s fr ct ary may lea%e the dead$ fallen or prooted tr nks at the disposal of the owner$ and demand that the latter remo%e them and clear the land. (*1*a) Art. 5--. The s fr ct ary of woodland may en,oy all the benefits which it may prod ce according to its nat re. (f the woodland is a copse or consists of timber for b ilding$ the s fr ct ary may do s ch ordinary c tting or felling as the owner was in the habit of doing$ and in defa lt of this$ he may do so in accordance with the c stom of the place$ as to the manner$ amo nt and season. (n any case the felling or c tting of trees shall be made in s ch manner as not to pre, dice the preser%ation of the land. (n n rseries$ the s fr ct ary may make the necessary thinnings in order that the remaining trees may properly grow. 0ith the e)ception of the pro%isions of the preceding paragraphs$ the s fr ct ary cannot c t down trees nless it be to restore or impro%e some of the things in s fr ct$ and in s ch case shall first inform the owner of the necessity for the work. (*15) Art. 5-1. The s fr ct ary of an action to reco%er real property or a real right$ or any mo%able property$ has the right to bring the action and to oblige the owner thereof to gi%e him the a thority for this p rpose and to f rnish him whate%er proof he may ha%e. (f in

65

conse. ence of the enforcement of the action he ac. ires the thing claimed$ the shall be limited to the fr its$ the dominion remaining with the owner. (*16)

s fr ct

Art. 5-4. The s fr ct ary may make on the property held in s fr ct s ch sef l impro%ements or e)penses for mere pleas re as he may deem proper$ pro%ided he does not alter its form or s bstance7 b t he shall ha%e no right to be indemnified therefor. 8e may$ howe%er$ remo%e s ch impro%ements$ sho ld it be possible to do so witho t damage to the property. (*1-) Art. 516. The s fr ct ary may set off the impro%ements he may ha%e made on the property against any damage to the same. (*11) Art. 511. The owner of property the s fr ct of which is held by another$ may alienate it$ b t he cannot alter its form or s bstance$ or do anything thereon which may be pre, dicial to the s fr ct ary. (*14) Art. 512. The s fr ct ary of a part of a thing held in common shall e)ercise all the rights pertaining to the owner thereof with respect to the administration and the collection of fr its or interest. ?ho ld the co/ownership cease by reason of the di%ision of the thing held in common$ the s fr ct of the part allotted to the co/owner shall belong to the s fr ct ary. (*46)

CHAPTER 3 OBLI$ATIONS OF THE USUFRUCTUARY

Art. 51'. The s fr ct ary$ before entering pon the en,oyment of the property$ is obliged; (1) To make$ after notice to the owner or his legitimate representati%e$ an in%entory of all the property$ which shall contain an appraisal of the mo%ables and a description of the condition of the immo%ables7 (2) To gi%e sec rity$ binding himself to f lfill the obligations imposed accordance with this &hapter. (*41) pon him in

Art. 51*. The pro%isions of 5o. 2 of the preceding article shall not apply to the donor who has reser%ed the s fr ct of the property donated$ or to the parents who are s fr ct aries of their children:s property$ e)cept when the parents contract a second marriage. (*42a) Art. 515. The s fr ct ary$ whate%er may be the title of the s fr ct$ may be e)c sed from the obligation of making an in%entory or of gi%ing sec rity$ when no one will be in, red thereby. (*4') Art. 516. ?ho ld the s fr ct ary fail to gi%e sec rity in the cases in which he is bo nd to gi%e it$ the owner may demand that the immo%ables be placed nder administration$ that the mo%ables be sold$ that the p blic bonds$ instr ments of credit payable to order or to bearer be con%erted into registered certificates or deposited in a bank or p blic instit tion$ and that the capital or s ms in cash and the proceeds of the sale of the mo%able property be in%ested in safe sec rities.

65

The interest on the proceeds of the sale of the mo%ables and that on p blic sec rities and bonds$ and the proceeds of the property placed nder administration$ shall belong to the s fr ct ary. @ rthermore$ the owner may$ if he so prefers$ ntil the s fr ct ary gi%es sec rity or is e)c sed from so doing$ retain in his possession the property in s fr ct as administrator$ s b,ect to the obligation to deli%er to the s fr ct ary the net proceeds thereof$ after ded cting the s ms which may be agreed pon or , dicially allowed him for s ch administration. (*4*) Art. 51-. (f the s fr ct ary who has not gi%en sec rity claims$ by %irt e of a promise nder oath$ the deli%ery of the f rnit re necessary for his se$ and that he and his family be allowed to li%e in a ho se incl ded in the s fr ct$ the co rt may grant this petition$ after d e consideration of the facts of the case. The same r le shall be obser%ed with respect to implements$ tools and other mo%able property necessary for an ind stry or %ocation in which he is engaged. (f the owner does not wish that certain articles be sold beca se of their artistic worth or beca se they ha%e a sentimental %al e$ he may demand their deli%ery to him pon his gi%ing sec rity for the payment of the legal interest on their appraised %al e. (*45) Art. 511. After the sec rity has been gi%en by the s fr ct ary$ he shall ha%e a right to all the proceeds and benefits from the day on which$ in accordance with the title constit ting the s fr ct$ he sho ld ha%e commenced to recei%e them. (*46) Art. 514. The s fr ct ary shall take care of the things gi%en in s fr ct as a good father of a family. (*4-) Art. 546. A s fr ct ary who alienates or leases his right of s fr ct shall answer for any damage which the things in s fr ct may s ffer thro gh the fa lt or negligence of the person who s bstit tes him. (*41) Art. 541. (f the s fr ct be constit ted on a flock or herd of li%estock$ the s fr ct ary shall be obliged to replace with the yo ng thereof the animals that die each year from nat ral ca ses$ or are lost d e to the rapacity of beasts of prey. (f the animals on which the s fr ct is constit ted sho ld all perish$ witho t the fa lt of the s fr ct ary$ on acco nt of some contagio s disease or any other ncommon e%ent$ the s fr ct ary shall f lfill his obligation by deli%ering to the owner the remains which may ha%e been sa%ed from the misfort ne. ?ho ld the herd or flock perish in part$ also by accident and witho t the fa lt of the s fr ct ary$ the s fr ct shall contin e on the part sa%ed. ?ho ld the s fr ct be on sterile animals$ it shall be considered$ with respect to its effects$ as tho gh constit ted on f ngible things. (*44a) Art. 542. The s fr ct ary is obliged to make the ordinary repairs needed by the thing gi%en in s fr ct. Ay ordinary repairs are nderstood s ch as are re. ired by the wear and tear d e to the nat ral se of the thing and are indispensable for its preser%ation. ?ho ld the s fr ct ary

65

fail to make them after demand by the owner$ the latter may make them at the e)pense of the s fr ct ary. (566) Art. 54'. 9)traordinary repairs shall be at the e)pense of the owner. The obliged to notify the owner when the need for s ch repairs is rgent. (561) s fr ct ary is

Art. 54*. (f the owner sho ld make the e)traordinary repairs$ he shall ha%e a right to demand of the s fr ct ary the legal interest on the amo nt e)pended for the time that the s fr ct lasts. ?ho ld he not make them when they are indispensable for the preser%ation of the thing$ the s fr ct ary may make them7 b t he shall ha%e a right to demand of the owner$ at the termination of the s fr ct$ the increase in %al e which the immo%able may ha%e ac. ired by reason of the repairs. (562a) Art. 545. The owner may constr ct any works and make any impro%ements of which the immo%able in s fr ct is s sceptible$ or make new plantings thereon if it be r ral$ pro%ided that s ch acts do not ca se a dimin tion in the %al e of the s fr ct or pre, dice the right of the s fr ct ary. (56') Art. 546. The payment of ann al charges and ta)es and of those considered as a lien on the fr its$ shall be at the e)pense of the s fr ct ary for all the time that the s fr ct lasts. (56*) Art. 54-. The ta)es which$ d ring the s fr ct$ may be imposed directly on the capital$ shall be at the e)pense of the owner. (f the latter has paid them$ the s fr ct ary shall pay him the proper interest on the s ms which may ha%e been paid in that character7 and$ if the said s ms ha%e been ad%anced by the s fr ct ary$ he shall reco%er the amo nt thereof at the termination of the s fr ct. (565) Art. 541. (f the s fr ct be constit ted on the whole of a patrimony$ and if at the time of its constit tion the owner has debts$ the pro%isions of Articles -51 and -54 relating to donations shall be applied$ both with respect to the maintenance of the s fr ct and to the obligation of the s fr ct ary to pay s ch debts. The same r le shall be applied in case the owner is obliged$ at the time the s fr ct is constit ted$ to make periodical payments$ e%en if there sho ld be no known capital. (566) Art. 544. The s fr ct ary may claim any mat red credits which form a part of the s fr ct if he has gi%en or gi%es the proper sec rity. (f he has been e)c sed from gi%ing sec rity or has been able to gi%e it$ or if that gi%en is not s fficient$ he shall need the a thori#ation of the owner$ or of the co rt in defa lt thereof$ to collect s ch credits. The s fr ct ary who has gi%en sec rity may se the capital he has collected in any manner he may deem proper. The s fr ct ary who has not gi%en sec rity shall in%est the said capital at interest pon agreement with the owner7 in defa lt of s ch agreement$ with , dicial a thori#ation7 and$ in e%ery case$ with sec rity s fficient to preser%e the integrity of the capital in s fr ct. (56-) Art. 666. The s fr ct ary of a mortgaged immo%able shall not be obliged to pay the debt for the sec rity of which the mortgage was constit ted.

65

?ho ld the immo%able be attached or sold , dicially for the payment of the debt$ the owner shall be liable to the s fr ct ary for whate%er the latter may lose by reason thereof. (564) Art. 661. The s fr ct ary shall be obliged to notify the owner of any act of a third person$ of which he may ha%e knowledge$ that may be pre, dicial to the rights of ownership$ and he shall be liable sho ld he not do so$ for damages$ as if they had been ca sed thro gh his own fa lt. (511) Art. 662. The e)penses$ costs and liabilities in s its bro ght with regard to the s fr ct shall be borne by the s fr ct ary. (512)

CHAPTER ) E(TIN$UISHMENT OF USUFRUCT

Art. 66'. >s fr ct is e)ting ished; (1) Ay the death of the s fr ct ary$ nless a contrary intention clearly appears7 (2) Ay the e)piration of the period for which it was constit ted$ or by the f lfillment of any resol tory condition pro%ided in the title creating the s fr ct7 (') Ay merger of the s fr ct and ownership in the same person7 (*) Ay ren nciation of the s fr ct ary7 (5) Ay the total loss of the thing in s fr ct7 (6) Ay the termination of the right of the person constit ting the s fr ct7 (-) Ay prescription. (51'a) Art. 66*. (f the thing gi%en in s fr ct sho ld be lost only in part$ the right shall contin e on the remaining part. (51*) Art. 665. >s fr ct cannot be constit ted in fa%or of a town$ corporation$ or association for more than fifty years. (f it has been constit ted$ and before the e)piration of s ch period the town is abandoned$ or the corporation or association is dissol%ed$ the s fr ct shall be e)ting ished by reason thereof. (515a) Art. 666. A s fr ct granted for the time that may elapse before a third person attains a certain age$ shall s bsist for the n mber of years specified$ e%en if the third person sho ld die before the period e)pires$ nless s ch s fr ct has been e)pressly granted only in consideration of the e)istence of s ch person. (516) Art. 66-. (f the s fr ct is constit ted on immo%able property of which a b ilding forms part$ and the latter sho ld be destroyed in any manner whatsoe%er$ the s fr ct ary shall ha%e a right to make se of the land and the materials. The same r le shall be applied if the s fr ct is constit ted on a b ilding only and the same sho ld be destroyed. A t in s ch a case$ if the owner sho ld wish to constr ct another

65

b ilding$ he shall ha%e a right to occ py the land and to make se of the materials$ being obliged to pay to the s fr ct ary$ d ring the contin ance of the s fr ct$ the interest pon the s m e. i%alent to the %al e of the land and of the materials. (51-) Art. 661. (f the s fr ct ary shares with the owner the ins rance of the tenement gi%en in s fr ct$ the former shall$ in case of loss$ contin e in the en,oyment of the new b ilding$ sho ld one be constr cted$ or shall recei%e the interest on the ins rance indemnity if the owner does not wish to reb ild. ?ho ld the s fr ct ary ha%e ref sed to contrib te to the ins rance$ the owner ins ring the tenement alone$ the latter shall recei%e the f ll amo nt of the ins rance indemnity in case of loss$ sa%ing always the right granted to the s fr ct ary in the preceding article. (511a) Art. 664. ?ho ld the thing in s fr ct be e)propriated for p blic se$ the owner shall be obliged either to replace it with another thing of the same %al e and of similar conditions$ or to pay the s fr ct ary the legal interest on the amo nt of the indemnity for the whole period of the s fr ct. (f the owner chooses the latter alternati%e$ he shall gi%e sec rity for the payment of the interest. (514) Art. 616. A s fr ct is not e)ting ished by bad se of the thing in s fr ct7 b t if the ab se sho ld ca se considerable in, ry to the owner$ the latter may demand that the thing be deli%ered to him$ binding himself to pay ann ally to the s fr ct ary the net proceeds of the same$ after ded cting the e)penses and the compensation which may be allowed him for its administration. (526) Art. 611. A s fr ct constit ted in fa%or of se%eral persons li%ing at the time of its constit tion shall not be e)ting ished ntil death of the last s r%i%or. (521) Art. 612. >pon the termination of the s fr ct$ the thing in s fr ct shall be deli%ered to the owner$ witho t pre, dice to the right of retention pertaining to the s fr ct ary or his heirs for ta)es and e)traordinary e)penses which sho ld be reimb rsed. After the deli%ery has been made$ the sec rity or mortgage shall be cancelled. (522a)

Tit ! VII. " EASEMENTS OF SERVITUDES CHAPTER # EASEMENTS IN $ENERAL SECTION #. " Di44!*!nt >in8. ,4 E+.!;!nt.
Art. 61'. An easement or ser%it de is an enc mbrance imposed benefit of another immo%able belonging to a different owner. pon an immo%able for the

The immo%able in fa%or of which the easement is established is called the dominant estate7 that which is s b,ect thereto$ the ser%ient estate. (5'6) Art. 61*. ?er%it des may also be established for the benefit of a comm nity$ or of one or more persons to whom the enc mbered estate does not belong. (5'1) Art. 615. 9asements may be contin o s or discontin o s$ apparent or nonapparent.

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&ontin o s easements are those the inter%ention of any act of man.

se of which is or may be incessant$ witho t the

Biscontin o s easements are those which are sed at inter%als and depend pon the acts of man. Apparent easements are those which are made known and are contin ally kept in %iew by e)ternal signs that re%eal the se and en,oyment of the same. 5onapparent easements are those which show no e)ternal indication of their e)istence. (5'2) Art. 616. 9asements are also positi%e or negati%e. A positi%e easement is one which imposes pon the owner of the ser%ient estate the obligation of allowing something to be done or of doing it himself$ and a negati%e easement$ that which prohibits the owner of the ser%ient estate from doing something which he co ld lawf lly do if the easement did not e)ist. (5'') Art. 61-. 9asements are inseparable from the estate to which they acti%ely or passi%ely belong. (5'*) Art. 611. 9asements are indi%isible. (f the ser%ient estate is di%ided between two or more persons$ the easement is not modified$ and each of them m st bear it on the part which corresponds to him. (f it is the dominant estate that is di%ided between two or more persons$ each of them may se the easement in its entirety$ witho t changing the place of its se$ or making it more b rdensome in any other way. (5'5) Art. 614. 9asements are established either by law or by the will of the owners. The former are called legal and the latter %ol ntary easements. (5'6)

SECTION 2. " M,8!. ,4 A0=1i*in7 E+.!;!nt.

Art. 626. &ontin o s and apparent easements are ac. ired either by %irt e of a title or by prescription of ten years. (5'-a) Art. 621. (n order to ac. ire by prescription the easements referred to in the preceding article$ the time of possession shall be comp ted th s; in positi%e easements$ from the day on which the owner of the dominant estate$ or the person who may ha%e made se of the easement$ commenced to e)ercise it pon the ser%ient estate7 and in negati%e easements$ from the day on which the owner of the dominant estate forbade$ by an instr ment acknowledged before a notary p blic$ the owner of the ser%ient estate$ from e)ec ting an act which wo ld be lawf l witho t the easement. (5'1a) Art. 622. &ontin o s nonapparent easements$ and discontin o s ones$ whether apparent or not$ may be ac. ired only by %irt e of a title. (5'4)

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Art. 62'. The absence of a doc ment or proof showing the origin of an easement which cannot be ac. ired by prescription may be c red by a deed of recognition by the owner of the ser%ient estate or by a final , dgment. (5*6a) Art. 62*. The e)istence of an apparent sign of easement between two estates$ established or maintained by the owner of both$ shall be considered$ sho ld either of them be alienated$ as a title in order that the easement may contin e acti%ely and passi%ely$ nless$ at the time the ownership of the two estates is di%ided$ the contrary sho ld be pro%ided in the title of con%eyance of either of them$ or the sign aforesaid sho ld be remo%ed before the e)ec tion of the deed. This pro%ision shall also apply in case of the di%ision of a thing owned in common by two or more persons. (5*1a) Art. 625. >pon the establishment of an easement$ all the rights necessary for its considered granted. (5*2) se are

Art. 626. The owner of the dominant estate cannot se the easement e)cept for the benefit of the immo%able originally contemplated. 5either can he e)ercise the easement in any other manner than that pre%io sly established. (n)

SECTION 3. " Ri75t. +n8 O9 i7+ti,n. ,4 t5! O@n!*. ,4 t5! D,;in+nt +n8 S!*-i!nt E.t+t!.
Art. 62-. The owner of the dominant estate may make$ at his own e)pense$ on the ser%ient state any works necessary for the se and preser%ation of the ser%it de$ b t witho t altering it or rendering it more b rdensome. @or this p rpose he shall notify the owner of the ser%ient estate$ and shall choose the most con%enient time and manner so as to ca se the least incon%enience to the owner of the ser%ient estate. (5*'a) Art. 621. ?ho ld there be se%eral dominant estates$ the owners of all of them shall be obliged to contrib te to the e)penses referred to in the preceding article$ in proportion to the benefits which each may deri%e from the work. Any one who does not wish to contrib te may e)empt himself by reno ncing the easement for the benefit of the others. (f the owner of the ser%ient estate sho ld make se of the easement in any manner whatsoe%er$ he shall also be obliged to contrib te to the e)penses in the proportion stated$ sa%ing an agreement to the contrary. (5**) Art. 624. The owner of the ser%ient estate cannot impair$ in any manner whatsoe%er$ the se of the ser%it de. 5e%ertheless$ if by reason of the place originally assigned$ or of the manner established for the se of the easement$ the same sho ld become %ery incon%enient to the owner of the ser%ient estate$ or sho ld pre%ent him from making any important works$ repairs or impro%ements thereon$ it may be changed at his e)pense$ pro%ided he offers another place or manner e. ally con%enient and in s ch a way that no in, ry is ca sed thereby to the owner of the dominant estate or to those who may ha%e a right to the se of the easement. (5*5)

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Art. 6'6. The owner of the ser%ient estate retains the ownership of the portion on which the easement is established$ and may se the same in s ch a manner as not to affect the e)ercise of the easement. (n)

SECTION ). " M,8!. ,4 E/tin71i.5;!nt ,4 E+.!;!nt.

Art. 6'1. 9asements are e)ting ished; (1) Ay merger in the same person of the ownership of the dominant and ser%ient estates7 (2) Ay non ser for ten years7 with respect to discontin o s easements$ this period shall be comp ted from the day on which they ceased to be sed7 and$ with respect to contin o s easements$ from the day on which an act contrary to the same took place7 (') 0hen either or both of the estates fall into s ch condition that the easement cannot be sed7 b t it shall re%i%e if the s bse. ent condition of the estates or either of them sho ld again permit its se$ nless when the se becomes possible$ s fficient time for prescription has elapsed$ in accordance with the pro%isions of the preceding n mber7 (*) Ay the e)piration of the term or the f lfillment of the condition$ if the easement is temporary or conditional7 (5) Ay the ren nciation of the owner of the dominant estate7 (6) Ay the redemption agreed pon between the owners of the dominant and ser%ient estates. (5*6a) Art. 6'2. The form or manner of and in the same way. (5*-a) sing the easement may prescribe as the easement itself$

Art. 6''. (f the dominant estate belongs to se%eral persons in common$ the se of the easement by any one of them pre%ents prescription with respect to the others. (5*1)

CHAPTER 2 LE$AL EASEMENTS SECTION #. " $!n!*+ P*,-i.i,n.

Art. 6'*. 9asements imposed by law ha%e for their ob,ect either p blic se or the interest of pri%ate persons. (5*4)

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Art. 6'5. All matters concerning easements established for p blic or comm nal se shall be go%erned by the special laws and reg lations relating thereto$ and$ in the absence thereof$ by the pro%isions of this Title. (556) Art. 6'6. 9asements established by law in the interest of pri%ate persons or for pri%ate se shall be go%erned by the pro%isions of this Title$ witho t pre, dice to the pro%isions of general or local laws and ordinances for the general welfare. These easements may be modified by agreement of the interested parties$ whene%er the law does not prohibit it or no in, ry is s ffered by a third person. (551a)

SECTION 2. " E+.!;!nt. R! +tin7 t, W+t!*.

Art. 6'-. Lower estates are obliged to recei%e the waters which nat rally and witho t the inter%ention of man descend from the higher estates$ as well as the stones or earth which they carry with them. The owner of the lower estate cannot constr ct works which will impede this easement7 neither can the owner of the higher estate make works which will increase the b rden. (552) Art. 6'1. The banks of ri%ers and streams$ e%en in case they are of pri%ate ownership$ are s b,ect thro gho t their entire length and within a #one of three meters along their margins$ to the easement of p blic se in the general interest of na%igation$ floatage$ fishing and sal%age. 9states ad,oining the banks of na%igable or floatable ri%ers are$ f rthermore$ s b,ect to the easement of towpath for the e)cl si%e ser%ice of ri%er na%igation and floatage. (f it be necessary for s ch p rpose to occ py lands of pri%ate ownership$ the proper indemnity shall first be paid. (55'a) Art. 6'4. 0hene%er for the di%ersion or taking of water from a ri%er or brook$ or for the se of any other contin o s or discontin o s stream$ it sho ld be necessary to b ild a dam$ and the person who is to constr ct it is not the owner of the banks$ or lands which m st s pport it$ he may establish the easement of ab tment of a dam$ after payment of the proper indemnity. (55*) Art. 6*6. &omp lsory easements for drawing water or for watering animals can be imposed only for reasons of p blic se in fa%or of a town or %illage$ after payment of the proper indemnity. (555) Art. 6*1. 9asements for drawing water and for watering animals carry with them the obligation of the owners of the ser%ient estates to allow passage to persons and animals to the place where s ch easements are to be sed$ and the indemnity shall incl de this ser%ice. (556) Art. 6*2. Any person who may wish to se pon his own estate any water of which he can dispose shall ha%e the right to make it flow thro gh the inter%ening estates$ with the obligation to indemnify their owners$ as well as the owners of the lower estates pon which the waters may filter or descend. (55-)

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Art. 6*'. !ne desiring to make se of the right granted in the preceding article is obliged; (1) To pro%e that he can dispose of the water and that it is s fficient for the which it is intended7 se for

(2) To show that the proposed right of way is the most con%enient and the least onero s to third persons7 (') To indemnify the owner of the ser%ient estate in the manner determined by the laws and reg lations. (551) Art. 6**. The easement of a. ed ct for pri%ate interest cannot be imposed on b ildings$ co rtyards$ anne)es$ or o tho ses$ or on orchards or gardens already e)isting. (554) Art. 6*5. The easement of a. ed ct does not pre%ent the owner of the ser%ient estate from closing or fencing it$ or from b ilding o%er the a. ed ct in s ch manner as not to ca se the latter any damage$ or render necessary repairs and cleanings impossible. (566) Art. 6*6. @or legal p rposes$ the easement of a. ed ct shall be considered as contin o s and apparent$ e%en tho gh the flow of the water may not be contin o s$ or its se depends pon the needs of the dominant estate$ or pon a sched le of alternate days or ho rs. (561) Art. 6*-. !ne who for the p rpose of irrigating or impro%ing his estate$ has to constr ct a stop lock or sl ice gate in the bed of the stream from which the water is to be taken$ may demand that the owners of the banks permit its constr ction$ after payment of damages$ incl ding those ca sed by the new easement to s ch owners and to the other irrigators. (562) Art. 6*1. The establishment$ e)tent$ form and conditions of the ser%it des of waters$ to which this section refers$ shall be go%erned by the special laws relating thereto insofar as no pro%ision therefor is made in this &ode. (56'a)

SECTION 3. " E+.!;!nt ,4 Ri75t ,4 W+3

Art. 6*4. The owner$ or any person who by %irt e of a real right may c lti%ate or se any immo%able$ which is s rro nded by other immo%ables pertaining to other persons and witho t ade. ate o tlet to a p blic highway$ is entitled to demand a right of way thro gh the neighboring estates$ after payment of the proper indemnity. ?ho ld this easement be established in s ch a manner that its se may be contin o s for all the needs of the dominant estate$ establishing a permanent passage$ the indemnity shall consist of the %al e of the land occ pied and the amo nt of the damage ca sed to the ser%ient estate. (n case the right of way is limited to the necessary passage for the c lti%ation of the estate s rro nded by others and for the gathering of its crops thro gh the ser%ient estate witho t a permanent way$ the indemnity shall consist in the payment of the damage ca sed by s ch enc mbrance. This easement is not comp lsory if the isolation of the immo%able is d e to the proprietor:s own acts. (56*a)

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Art. 656. The easement of right of way shall be established at the point least pre, dicial to the ser%ient estate$ and$ insofar as consistent with this r le$ where the distance from the dominant estate to a p blic highway may be the shortest. (565) Art. 651. The width of the easement of right of way shall be that which is s fficient for the needs of the dominant estate$ and may accordingly be changed from time to time. (566a) Art. 652. 0hene%er a piece of land ac. ired by sale$ e)change or partition$ is s rro nded by other estates of the %endor$ e)changer$ or co/owner$ he shall be obliged to grant a right of way witho t indemnity. (n case of a simple donation$ the donor shall be indemnified by the donee for the establishment of the right of way. (56-a) Art. 65'. (n the case of the preceding article$ if it is the land of the grantor that becomes isolated$ he may demand a right of way after paying a indemnity. 8owe%er$ the donor shall not be liable for indemnity. (n) Art. 65*. (f the right of way is permanent$ the necessary repairs shall be made by the owner of the dominant estate. A proportionate share of the ta)es shall be reimb rsed by said owner to the proprietor of the ser%ient estate. (n) Art. 655. (f the right of way granted to a s rro nded estate ceases to be necessary beca se its owner has ,oined it to another ab tting on a p blic road$ the owner of the ser%ient estate may demand that the easement be e)ting ished$ ret rning what he may ha%e recei%ed by way of indemnity. The interest on the indemnity shall be deemed to be in payment of rent for the se of the easement. The same r le shall be applied in case a new road is opened gi%ing access to the isolated estate. (n both cases$ the p blic highway m st s bstantially meet the needs of the dominant estate in order that the easement may be e)ting ished. (561a) Art. 656. (f it be indispensable for the constr ction$ repair$ impro%ement$ alteration or bea tification of a b ilding$ to carry materials thro gh the estate of another$ or to raise therein scaffolding or other ob,ects necessary for the work$ the owner of s ch estate shall be obliged to permit the act$ after recei%ing payment of the proper indemnity for the damage ca sed him. (564a) Art. 65-. 9asements of the right of way for the passage of li%estock known as animal path$ animal trail or any other$ and those for watering places$ resting places and animal folds$ shall be go%erned by the ordinances and reg lations relating thereto$ and$ in the absence thereof$ by the sages and c stoms of the place. 0itho t pre, dice to rights legally ac. ired$ the animal path shall not e)ceed in any case the width of -5 meters$ and the animal trail that of '- meters and 56 centimeters. 0hene%er it is necessary to establish a comp lsory easement of the right of way or for a watering place for animals$ the pro%isions of this ?ection and those of Articles 6*6 and 6*1 shall be obser%ed. (n this case the width shall not e)ceed 16 meters. (5-6a)

65

SECTION ). " E+.!;!nt ,4 P+*t3 W+

Art. 651. The easement of party wall shall be go%erned by the pro%isions of this Title$ by the local ordinances and c stoms insofar as they do not conflict with the same$ and by the r les of co/ownership. (5-1a) Art. 654. The e)istence of an easement of party wall is pres med$ e)terior sign$ or proof to the contrary; nless there is a title$ or

(1) (n di%iding walls of ad,oining b ildings p to the point of common ele%ation7 (2) (n di%iding walls of gardens or yards sit ated in cities$ towns$ or in r ral comm nities7 (') (n fences$ walls and li%e hedges di%iding r ral lands. (5-2) Art. 666. (t is nderstood that there is an e)terior sign$ contrary to the easement of party wall; (1) 0hene%er in the di%iding wall of b ildings there is a window or opening7 (2) 0hene%er the di%iding wall is$ on one side$ straight and pl mb on all its facement$ and on the other$ it has similar conditions on the pper part$ b t the lower part slants or pro,ects o tward7 (') 0hene%er the entire wall is b ilt within the bo ndaries of one of the estates7 (*) 0hene%er the di%iding wall bears the b rden of the binding beams$ floors and roof frame of one of the b ildings$ b t not those of the others7 (5) 0hene%er the di%iding wall between co rtyards$ gardens$ and tenements is constr cted in s ch a way that the coping sheds the water pon only one of the estates7 (6) 0hene%er the di%iding wall$ being b ilt of masonry$ has stepping stones$ which at certain inter%als pro,ect from the s rface on one side only$ b t not on the other7 (-) 0hene%er lands inclosed by fences or li%e hedges ad,oin others which are not inclosed. (n all these cases$ the ownership of the walls$ fences or hedges shall be deemed to belong e)cl si%ely to the owner of the property or tenement which has in its fa%or the pres mption based on any one of these signs. (5-') Art. 661. Bitches or drains opened between two estates are also pres med as common to both$ if there is no title or sign showing the contrary. There is a sign contrary to the part/ownership whene%er the earth or dirt remo%ed to open the ditch or to clean it is only on one side thereof$ in which case the ownership of the ditch shall belong e)cl si%ely to the owner of the land ha%ing this e)terior sign in its fa%or. (5-*)

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Art. 662. The cost of repairs and constr ction of party walls and the maintenance of fences$ li%e hedges$ ditches$ and drains owned in common$ shall be borne by all the owners of the lands or tenements ha%ing the party wall in their fa%or$ in proportion to the right of each. 5e%ertheless$ any owner may e)empt himself from contrib ting to this charge by reno ncing his part/ownership$ e)cept when the party wall s pports a b ilding belonging to him. (5-5) Art. 66'. (f the owner of a b ilding$ s pported by a party wall desires to demolish the b ilding$ he may also reno nce his part/ownership of the wall$ b t the cost of all repairs and work necessary to pre%ent any damage which the demolition may ca se to the party wall$ on this occasion only$ shall be borne by him. (5-6) Art. 66*. 9%ery owner may increase the height of the party wall$ doing at his own e)pense and paying for any damage which may be ca sed by the work$ e%en tho gh s ch damage be temporary. The e)penses of maintaining the wall in the part newly raised or deepened at its fo ndation shall also be paid for by him7 and$ in addition$ the indemnity for the increased e)penses which may be necessary for the preser%ation of the party wall by reason of the greater height or depth which has been gi%en it. (f the party wall cannot bear the increased height$ the owner desiring to raise it shall be obliged to reconstr ct it at his own e)pense and$ if for this p rpose it be necessary to make it thicker$ he shall gi%e the space re. ired from his own land. (5--) Art. 665. The other owners who ha%e not contrib ted in gi%ing increased height$ depth or thickness to the wall may$ ne%ertheless$ ac. ire the right of part/ownership therein$ by paying proportionally the %al e of the work at the time of the ac. isition and of the land sed for its increased thickness. (5-1a) Art. 666. 9%ery part/owner of a party wall may se it in proportion to the right he may ha%e in the co/ownership$ witho t interfering with the common and respecti%e ses by the other co/owners. (5-4a)

SECTION :. " E+.!;!nt ,4 Li75t +n8 Vi!@

Art. 66-. 5o part/owner may$ witho t the consent of the others$ open thro gh the party wall any window or apert re of any kind. (516) Art. 661. The period of prescription for the ac. isition of an easement of light and %iew shall be co nted; (1) @rom the time of the opening of the window$ if it is thro gh a party wall7 or (2) @rom the time of the formal prohibition pon the proprietor of the ad,oining land or tenement$ if the window is thro gh a wall on the dominant estate. (n) Art. 664. 0hen the distances in Article 6-6 are not obser%ed$ the owner of a wall which is not party wall$ ad,oining a tenement or piece of land belonging to another$ can make in it openings to admit light at the height of the ceiling ,oints or immediately nder the ceiling$

65

and of the si#e of thirty centimeters s. are$ and$ in e%ery case$ with an iron grating imbedded in the wall and with a wire screen. 5e%ertheless$ the owner of the tenement or property ad,oining the wall in which the openings are made can close them sho ld he ac. ire part/ownership thereof$ if there be no stip lation to the contrary. 8e can also obstr ct them by constr cting a b ilding on his land or by raising a wall thereon contig o s to that ha%ing s ch openings$ nless an easement of light has been ac. ired. (511a) Art. 6-6. 5o windows$ apert res$ balconies$ or other similar pro,ections which afford a direct %iew pon or towards an ad,oining land or tenement can be made$ witho t lea%ing a distance of two meters between the wall in which they are made and s ch contig o s property. 5either can side or obli. e %iews pon or towards s ch contermino s property be had$ nless there be a distance of si)ty centimeters. The nonobser%ance of these distances does not gi%e rise to prescription. (512a) Art. 6-1. The distance referred to in the preceding article shall be meas red in cases of direct %iews from the o ter line of the wall when the openings do not pro,ect$ from the o ter line of the latter when they do$ and in cases of obli. e %iew from the di%iding line between the two properties. (51') Art. 6-2. The pro%isions of Article 6-6 are not applicable to b ildings separated by a p blic way or alley$ which is not less than three meters wide$ s b,ect to special reg lations and local ordinances. (51*a) Art. 6-'. 0hene%er by any title a right has been ac. ired to ha%e direct %iews$ balconies or bel%ederes o%erlooking an ad,oining property$ the owner of the ser%ient estate cannot b ild thereon at less than a distance of three meters to be meas red in the manner pro%ided in Article 6-1. Any stip lation permitting distances less than those prescribed in Article 6-6 is %oid. (515a)

SECTION 6. " D*+in+7! ,4 B1i 8in7.

Art. 6-*. The owner of a b ilding shall be obliged to constr ct its roof or co%ering in s ch manner that the rain water shall fall on his own land or on a street or p blic place$ and not on the land of his neighbor$ e%en tho gh the ad,acent land may belong to two or more persons$ one of whom is the owner of the roof. 9%en if it sho ld fall on his own land$ the owner shall be obliged to collect the water in s ch a way as not to ca se damage to the ad,acent land or tenement. (516a) Art. 6-5. The owner of a tenement or a piece of land$ s b,ect to the easement of recei%ing water falling from roofs$ may b ild in s ch manner as to recei%e the water pon his own roof or gi%e it another o tlet in accordance with local ordinances or c stoms$ and in s ch a way as not to ca se any n isance or damage whate%er to the dominant estate. (51-)

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Art. 6-6. 0hene%er the yard or co rt of a ho se is s rro nded by other ho ses$ and it is not possible to gi%e an o tlet thro gh the ho se itself to the rain water collected thereon$ the establishment of an easement of drainage can be demanded$ gi%ing an o tlet to the water at the point of the contig o s lands or tenements where its egress may be easiest$ and establishing a cond it for the drainage in s ch manner as to ca se the least damage to the ser%ient estate$ after payment of the property indemnity. (51')

SECTION <. " Int!*;!8i+t! Di.t+n0!. +n8 W,*B. 4,* C!*t+in C,n.t*10ti,n. +n8 P +ntin7. Art. 6--. 5o constr ctions can be b ilt or plantings made near fortified places or fortresses witho t compliance with the conditions re. ired in special laws$ ordinances$ and reg lations relating thereto. (514) Art. 6-1. 5o person shall b ild any a. ed ct$ well$ sewer$ f rnace$ forge$ chimney$ stable$ depository of corrosi%e s bstances$ machinery$ or factory which by reason of its nat re or prod cts is dangero s or no)io s$ witho t obser%ing the distances prescribed by the reg lations and c stoms of the place$ and witho t making the necessary protecti%e works$ s b,ect$ in regard to the manner thereof$ to the conditions prescribed by s ch reg lations. These prohibitions cannot be altered or reno nced by stip lation on the part of the ad,oining proprietors. (n the absence of reg lations$ s ch preca tions shall be taken as may be considered necessary$ in order to a%oid any damage to the neighboring lands or tenements. (546a) Art. 6-4. 5o trees shall be planted near a tenement or piece of land belonging to another e)cept at the distance a thori#ed by the ordinances or c stoms of the place$ and$ in the absence thereof$ at a distance of at least two meters from the di%iding line of the estates if tall trees are planted and at a distance of at least fifty centimeters if shr bs or small trees are planted. 9%ery landowner shall ha%e the right to demand that trees hereafter planted at a shorter distance from his land or tenement be prooted. The pro%isions of this article also apply to trees which ha%e grown spontaneo sly. (541a) Art. 616. (f the branches of any tree sho ld e)tend o%er a neighboring estate$ tenement$ garden or yard$ the owner of the latter shall ha%e the right to demand that they be c t off insofar as they may spread o%er his property$ and$ if it be the roots of a neighboring tree which sho ld penetrate into the land of another$ the latter may c t them off himself within his property. (542) Art. 611. @r its nat rally falling pon ad,acent land belong to the owner of said land. (n)

SECTION 8. " E+.!;!nt A7+in.t N1i.+n0! (n)

Art. 612. 9%ery b ilding or piece of land is s b,ect to the easement which prohibits the

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proprietor or possessor from committing n isance thro gh noise$ ,arring$ offensi%e odor$ smoke$ heat$ d st$ water$ glare and other ca ses. Art. 61'. ? b,ect to #oning$ health$ police and other laws and reg lations$ factories and shops may be maintained pro%ided the least possible annoyance is ca sed to the neighborhood.

SECTION C. " L+t!*+ +n8 S196+0!nt S122,*t (n)

?ec. 61*. 5o proprietor shall make s ch e)ca%ations pon his land as to depri%e any ad,acent land or b ilding of s fficient lateral or s b,acent s pport. Art. 615. Any stip lation or testamentary pro%ision allowing e)ca%ations that ca se danger to an ad,acent land or b ilding shall be %oid. Art. 616. The legal easement of lateral and s b,acent s pport is not only for b ildings standing at the time the e)ca%ations are made b t also for constr ctions that may be erected. Art. 61-. Any proprietor intending to make any e)ca%ation contemplated in the three preceding articles shall notify all owners of ad,acent lands.

CHAPTER 3 VOLUNTARY EASEMENTS

Art. 611. 9%ery owner of a tenement or piece of land may establish thereon the easements which he may deem s itable$ and in the manner and form which he may deem best$ pro%ided he does not contra%ene the laws$ p blic policy or p blic order. (54*) Art. 614. The owner of a tenement or piece of land$ the s fr ct of which belongs to another$ may impose thereon$ witho t the consent of the s fr ct ary$ any ser%it des which will not in, re the right of s fr ct. (545) Art. 646. 0hene%er the naked ownership of a tenement or piece of land belongs to one person and the beneficial ownership to another$ no perpet al %ol ntary easement may be established thereon witho t the consent of both owners. (546) Art. 641. (n order to impose an easement on an consent of all the co/owners shall be re. ired. ndi%ided tenement$ or piece of land$ the

The consent gi%en by some only$ m st be held in abeyance owners shall ha%e e)pressed his conformity.

ntil the last one of all the co/

A t the consent gi%en by one of the co/owners separately from the others shall bind the grantor and his s ccessors not to pre%ent the e)ercise of the right granted. (54-a) Art. 642. The title and$ in a proper case$ the possession of an easement ac. ired by prescription shall determine the rights of the dominant estate and the obligations of the

65

ser%ient estate. (n defa lt thereof$ the easement shall be go%erned by s ch pro%isions of this Title as are applicable thereto. (541) Art. 64'. (f the owner of the ser%ient estate sho ld ha%e bo nd himself$ pon the establishment of the easement$ to bear the cost of the work re. ired for the se and preser%ation thereof$ he may free himself from this obligation by reno ncing his property to the owner of the dominant estate. (544)

Tit ! VIII. " NUISANCE (n)

Art. 64*. A n isance is any act$ omission$ establishment$ b siness$ condition of property$ or anything else which; (1) (n, res or endangers the health or safety of others7 or (2) Annoys or offends the senses7 or (') ?hocks$ defies or disregards decency or morality7 or (*) !bstr cts or interferes with the free passage of any p blic highway or street$ or any body of water7 or (5) 8inders or impairs the se of property. Art. 645. 5 isance is either p blic or pri%ate. A p blic n isance affects a comm nity or neighborhood or any considerable n mber of persons$ altho gh the e)tent of the annoyance$ danger or damage pon indi%id als may be ne. al. A pri%ate n isance is one that is not incl ded in the foregoing definition. Art. 646. 9%ery s ccessi%e owner or possessor of property who fails or ref ses to abate a n isance in that property started by a former owner or possessor is liable therefor in the same manner as the one who created it. Art. 64-. The abatement of a n isance does not precl de the right of any person in, red to reco%er damages for its past e)istence. Art. 641. Lapse of time cannot legali#e any n isance$ whether p blic or pri%ate. Art. 644. The remedies against a p blic n isance are; (1) A prosec tion nder the 3enal &ode or any local ordinance; or (2) A ci%il action7 or (') Abatement$ witho t , dicial proceedings. Art. -66. The district health officer shall take care that one or all of the remedies against a p blic n isance are a%ailed of. Art. -61. (f a ci%il action is bro ght by reason of the maintenance of a p blic n isance$ s ch action shall be commenced by the city or m nicipal mayor.

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Art. -62. The district health officer shall determine whether or not abatement$ witho t , dicial proceedings$ is the best remedy against a p blic n isance. Art. -6'. A pri%ate person may file an action on acco nt of a p blic n isance$ if it is specially in, rio s to himself. Art. -6*. Any pri%ate person may abate a p blic n isance which is specially in, rio s to him by remo%ing$ or if necessary$ by destroying the thing which constit tes the same$ witho t committing a breach of the peace$ or doing nnecessary in, ry. A t it is necessary; (1) That demand be first made pon the owner or possessor of the property to abate the n isance7 (2) That s ch demand has been re,ected7 (') That the abatement be appro%ed by the district health officer and e)ec ted with the assistance of the local police7 and (*) That the %al e of the destr ction does not e)ceed three tho sand pesos. Art. -65. The remedies against a pri%ate n isance are; (1) A ci%il action7 or (2) Abatement$ witho t , dicial proceedings. Art. -66. Any person in, red by a pri%ate n isance may abate it by remo%ing$ or if necessary$ by destroying the thing which constit tes the n isance$ witho t committing a breach of the peace or doing nnecessary in, ry. 8owe%er$ it is indispensable that the proced re for e)tra, dicial abatement of a p blic n isance by a pri%ate person be followed. Art. -6-. A pri%ate person or a p blic official e)tra, dicially abating a n isance shall be liable for damages; (1) (f he ca ses nnecessary in, ry7 or (2) (f an alleged n isance is later declared by the co rts to be not a real n isance.

Tit ! I(. " RE$ISTRY OF PROPERTY

Art. -61. The +egistry of 3roperty has for its ob,ect the inscription or annotation of acts and contracts relating to the ownership and other rights o%er immo%able property. (665) Art. -64. The titles of ownership$ or of other rights o%er immo%able property$ which are not d ly inscribed or annotated in the +egistry of 3roperty shall not pre, dice third persons. (666) Art. -16. The books in the +egistry of 3roperty shall be p blic for those who ha%e a known interest in ascertaining the stat s of the immo%ables or real rights annotated or inscribed therein. (66-)

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Art. -11. @or determining what titles are s b,ect to inscription or annotation$ as well as the form$ effects$ and cancellation of inscriptions and annotations$ the manner of keeping the books in the +egistry$ and the %al e of the entries contained in said books$ the pro%isions of the <ortgage Law$ the Land +egistration Act$ and other special laws shall go%ern. (661a

REPUBLIC ACT NO. 386 AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES BOO> IV OBLI$ATIONS AND CONTRACTS Tit !. I. " OBLI$ATIONS CHAPTER # $ENERAL PROVISIONS
Art. 1156. An obligation is a , ridical necessity to gi%e$ to do or not to do. (n)

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Art. 115-. !bligations arise from; (1) Law7 (2) &ontracts7 (') D asi/contracts7 (*) Acts or omissions p nished by law7 and (5) D asi/delicts. (1614a) Art. 1151. !bligations deri%ed from law are not pres med. !nly those e)pressly determined in this &ode or in special laws are demandable$ and shall be reg lated by the precepts of the law which establishes them7 and as to what has not been foreseen$ by the pro%isions of this Aook. (1646) Art. 1154. !bligations arising from contracts ha%e the force of law between the contracting parties and sho ld be complied with in good faith. (1641a) Art. 1166. !bligations deri%ed from . asi/contracts shall be s b,ect to the pro%isions of &hapter 1$ Title E=(($ of this Aook. (n) Art. 1161. &i%il obligations arising from criminal offenses shall be go%erned by the penal laws$ s b,ect to the pro%isions of Article 21--$ and of the pertinent pro%isions of &hapter 2$ 3reliminary Title$ on 8 man +elations$ and of Title E=((( of this Aook$ reg lating damages. (1642a) Art. 1162. !bligations deri%ed from . asi/delicts shall be go%erned by the pro%isions of &hapter 2$ Title E=(( of this Aook$ and by special laws. (164'a)

CHAPTER 2 NATURE AND EFFECT OF OBLI$ATIONS

Art. 116'. 9%ery person obliged to gi%e something is also obliged to take care of it with the proper diligence of a good father of a family$ nless the law or the stip lation of the parties re. ires another standard of care. (164*a) Art. 116*. The creditor has a right to the fr its of the thing from the time the obligation to deli%er it arises. 8owe%er$ he shall ac. ire no real right o%er it ntil the same has been deli%ered to him. (1645) Art. 1165. 0hen what is to be deli%ered is a determinate thing$ the creditor$ in addition to the right granted him by Article 11-6$ may compel the debtor to make the deli%ery.

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(f the thing is indeterminate or generic$ he may ask that the obligation be complied with at the e)pense of the debtor. (f the obligor delays$ or has promised to deli%er the same thing to two or more persons who do not ha%e the same interest$ he shall be responsible for any fort ito s e%ent ntil he has effected the deli%ery. (1646) Art. 1166. The obligation to gi%e a determinate thing incl des that of deli%ering all its accessions and accessories$ e%en tho gh they may not ha%e been mentioned. (164-a) Art. 116-. (f a person obliged to do something fails to do it$ the same shall be e)ec ted at his cost. This same r le shall be obser%ed if he does it in contra%ention of the tenor of the obligation. @ rthermore$ it may be decreed that what has been poorly done be ndone. (1641) Art. 1161. 0hen the obligation consists in not doing$ and the obligor does what has been forbidden him$ it shall also be ndone at his e)pense. (1644a) Art. 1164. Those obliged to deli%er or to do something inc r in delay from the time the obligee , dicially or e)tra, dicially demands from them the f lfillment of their obligation. 8owe%er$ the demand by the creditor shall not be necessary in order that delay may e)ist; (1) 0hen the obligation or the law e)pressly so declare7 or (2) 0hen from the nat re and the circ mstances of the obligation it appears that the designation of the time when the thing is to be deli%ered or the ser%ice is to be rendered was a controlling moti%e for the establishment of the contract7 or (') 0hen demand wo ld be power to perform. seless$ as when the obligor has rendered it beyond his

(n reciprocal obligations$ neither party inc rs in delay if the other does not comply or is not ready to comply in a proper manner with what is inc mbent pon him. @rom the moment one of the parties f lfills his obligation$ delay by the other begins. (1166a) Art. 11-6. Those who in the performance of their obligations are g ilty of fra d$ negligence$ or delay$ and those who in any manner contra%ene the tenor thereof$ are liable for damages. (1161) Art. 11-1. +esponsibility arising from fra d is demandable in all obligations. Any wai%er of an action for f t re fra d is %oid. (1162a) Art. 11-2. +esponsibility arising from negligence in the performance of e%ery kind of obligation is also demandable$ b t s ch liability may be reg lated by the co rts$ according to the circ mstances. (116') Art. 11-'. The fa lt or negligence of the obligor consists in the omission of that diligence which is re. ired by the nat re of the obligation and corresponds with the circ mstances of the persons$ of the time and of the place. 0hen negligence shows bad faith$ the pro%isions of Articles 11-1 and 2261$ paragraph 2$ shall apply.

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(f the law or contract does not state the diligence which is to be obser%ed in the performance$ that which is e)pected of a good father of a family shall be re. ired. (116*a) Art. 11-*. 9)cept in cases e)pressly specified by the law$ or when it is otherwise declared by stip lation$ or when the nat re of the obligation re. ires the ass mption of risk$ no person shall be responsible for those e%ents which co ld not be foreseen$ or which$ tho gh foreseen$ were ine%itable. (1165a) Art. 11-5. >s rio s transactions shall be go%erned by special laws. (n) Art. 11-6. The receipt of the principal by the creditor witho t reser%ation with respect to the interest$ shall gi%e rise to the pres mption that said interest has been paid. The receipt of a later installment of a debt witho t reser%ation as to prior installments$ shall likewise raise the pres mption that s ch installments ha%e been paid. (1116a) Art. 11--. The creditors$ after ha%ing p rs ed the property in possession of the debtor to satisfy their claims$ may e)ercise all the rights and bring all the actions of the latter for the same p rpose$ sa%e those which are inherent in his person7 they may also imp gn the acts which the debtor may ha%e done to defra d them. (1111) Art. 11-1. ? b,ect to the laws$ all rights ac. ired in %irt e of an obligation are transmissible$ if there has been no stip lation to the contrary. (1112)

CHAPTER 3 DIFFERENT >INDS OF OBLI$ATIONS SECTION #. " P1*! +n8 C,n8iti,n+ O9 i7+ti,n.
Art. 11-4. 9%ery obligation whose performance does not depend pon a f t re or e%ent$ or pon a past e%ent nknown to the parties$ is demandable at once. ncertain

9%ery obligation which contains a resol tory condition shall also be demandable$ witho t pre, dice to the effects of the happening of the e%ent. (111') Art. 1116. 0hen the debtor binds himself to pay when his means permit him to do so$ the obligation shall be deemed to be one with a period$ s b,ect to the pro%isions of Article 114-. (n) Art. 1111. (n conditional obligations$ the ac. isition of rights$ as well as the e)ting ishment or loss of those already ac. ired$ shall depend pon the happening of the e%ent which constit tes the condition. (111*) Art. 1112. 0hen the f lfillment of the condition depends pon the sole will of the debtor$ the conditional obligation shall be %oid. (f it depends pon chance or pon the will of a third person$ the obligation shall take effect in conformity with the pro%isions of this &ode. (1115) Art. 111'. (mpossible conditions$ those contrary to good c stoms or p blic policy and those prohibited by law shall ann l the obligation which depends pon them. (f the obligation is di%isible$ that part thereof which is not affected by the impossible or nlawf l condition shall be %alid.

65

The condition not to do an impossible thing shall be considered as not ha%ing been agreed pon. (1116a) Art. 111*. The condition that some e%ent happen at a determinate time shall e)ting ish the obligation as soon as the time e)pires or if it has become ind bitable that the e%ent will not take place. (111-) Art. 1115. The condition that some e%ent will not happen at a determinate time shall render the obligation effecti%e from the moment the time indicated has elapsed$ or if it has become e%ident that the e%ent cannot occ r. (f no time has been fi)ed$ the condition shall be deemed f lfilled at s ch time as may ha%e probably been contemplated$ bearing in mind the nat re of the obligation. (1111) Art. 1116. The condition shall be deemed f lfilled when the obligor %ol ntarily pre%ents its f lfillment. (1114) Art. 111-. The effects of a conditional obligation to gi%e$ once the condition has been f lfilled$ shall retroact to the day of the constit tion of the obligation. 5e%ertheless$ when the obligation imposes reciprocal prestations pon the parties$ the fr its and interests d ring the pendency of the condition shall be deemed to ha%e been m t ally compensated. (f the obligation is nilateral$ the debtor shall appropriate the fr its and interests recei%ed$ nless from the nat re and circ mstances of the obligation it sho ld be inferred that the intention of the person constit ting the same was different. (n obligations to do and not to do$ the co rts shall determine$ in each case$ the retroacti%e effect of the condition that has been complied with. (1126) Art. 1111. The creditor may$ before the f lfillment of the condition$ bring the appropriate actions for the preser%ation of his right. The debtor may reco%er what d ring the same time he has paid by mistake in case of a s spensi%e condition. (1121a) Art. 1114. 0hen the conditions ha%e been imposed with the intention of s spending the efficacy of an obligation to gi%e$ the following r les shall be obser%ed in case of the impro%ement$ loss or deterioration of the thing d ring the pendency of the condition; (1) (f the thing is lost witho t the fa lt of the debtor$ the obligation shall be e)ting ished7 (2) (f the thing is lost thro gh the fa lt of the debtor$ he shall be obliged to pay damages7 it is nderstood that the thing is lost when it perishes$ or goes o t of commerce$ or disappears in s ch a way that its e)istence is nknown or it cannot be reco%ered7 (') 0hen the thing deteriorates witho t the fa lt of the debtor$ the impairment is to be borne by the creditor7 (*) (f it deteriorates thro gh the fa lt of the debtor$ the creditor may choose between the rescission of the obligation and its f lfillment$ with indemnity for damages in either case7

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(5) (f the thing is impro%ed by its nat re$ or by time$ the impro%ement shall in re to the benefit of the creditor7 (6) (f it is impro%ed at the e)pense of the debtor$ he shall ha%e no other right than that granted to the s fr ct ary. (1122) Art. 1146. 0hen the conditions ha%e for their p rpose the e)ting ishment of an obligation to gi%e$ the parties$ pon the f lfillment of said conditions$ shall ret rn to each other what they ha%e recei%ed. (n case of the loss$ deterioration or impro%ement of the thing$ the pro%isions which$ with respect to the debtor$ are laid down in the preceding article shall be applied to the party who is bo nd to ret rn. As for the obligations to do and not to do$ the pro%isions of the second paragraph of Article 111- shall be obser%ed as regards the effect of the e)ting ishment of the obligation. (112') Art. 1141. The power to rescind obligations is implied in reciprocal ones$ in case one of the obligors sho ld not comply with what is inc mbent pon him. The in, red party may choose between the f lfillment and the rescission of the obligation$ with the payment of damages in either case. 8e may also seek rescission$ e%en after he has chosen f lfillment$ if the latter sho ld become impossible. The co rt shall decree the rescission claimed$ fi)ing of a period. nless there be , st ca se a thori#ing the

This is nderstood to be witho t pre, dice to the rights of third persons who ha%e ac. ired the thing$ in accordance with Articles 1'15 and 1'11 and the <ortgage Law. (112*) Art. 1142. (n case both parties ha%e committed a breach of the obligation$ the liability of the first infractor shall be e. itably tempered by the co rts. (f it cannot be determined which of the parties first %iolated the contract$ the same shall be deemed e)ting ished$ and each shall bear his own damages. (n)

SECTION 2. " O9 i7+ti,n. @it5 + P!*i,8

Art. 114'. !bligations for whose f lfillment a day certain has been fi)ed$ shall be demandable only when that day comes. !bligations with a resol tory period take effect at once$ b t terminate day certain. pon arri%al of the

A day certain is nderstood to be that which m st necessarily come$ altho gh it may not be known when. (f the ncertainty consists in whether the day will come or not$ the obligation is conditional$ and it shall be reg lated by the r les of the preceding ?ection. (1125a) Art. 114*. (n case of loss$ deterioration or impro%ement of the thing before the arri%al of the day certain$ the r les in Article 1114 shall be obser%ed. (n)

65

Art. 1145. Anything paid or deli%ered before the arri%al of the period$ the obligor being naware of the period or belie%ing that the obligation has become d e and demandable$ may be reco%ered$ with the fr its and interests. (1126a) Art. 1146. 0hene%er in an obligation a period is designated$ it is pres med to ha%e been established for the benefit of both the creditor and the debtor$ nless from the tenor of the same or other circ mstances it sho ld appear that the period has been established in fa%or of one or of the other. (112-) Art. 114-. (f the obligation does not fi) a period$ b t from its nat re and the circ mstances it can be inferred that a period was intended$ the co rts may fi) the d ration thereof. The co rts shall also fi) the d ration of the period when it depends debtor. pon the will of the

(n e%ery case$ the co rts shall determine s ch period as may nder the circ mstances ha%e been probably contemplated by the parties. !nce fi)ed by the co rts$ the period cannot be changed by them. (1121a) Art. 1141. The debtor shall lose e%ery right to make se of the period; (1) 0hen after the obligation has been contracted$ he becomes insol%ent$ g aranty or sec rity for the debt7 nless he gi%es a

(2) 0hen he does not f rnish to the creditor the g aranties or sec rities which he has promised7 (') 0hen by his own acts he has impaired said g aranties or sec rities after their establishment$ and when thro gh a fort ito s e%ent they disappear$ nless he immediately gi%es new ones e. ally satisfactory7 (*) 0hen the debtor %iolates any to the period7 ndertaking$ in consideration of which the creditor agreed

(5) 0hen the debtor attempts to abscond. (1124a)

SECTION 3. " A t!*n+ti-! O9 i7+ti,n.

Art. 1144. A person alternati%ely bo nd by different prestations shall completely perform one of them. The creditor cannot be compelled to recei%e part of one and part of the other (11'1) ndertaking.

Art. 1266. The right of choice belongs to the debtor$ nless it has been e)pressly granted to the creditor. The debtor shall ha%e no right to choose those prestations which are impossible$ nlawf l or which co ld not ha%e been the ob,ect of the obligation. (11'2)

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Art. 1261. The choice shall prod ce no effect e)cept from the time it has been comm nicated. (11'') Art. 1262. The debtor shall lose the right of choice when among the prestations whereby he is alternati%ely bo nd$ only one is practicable. (11'*) Art. 126'. (f thro gh the creditor:s acts the debtor cannot make a choice according to the terms of the obligation$ the latter may rescind the contract with damages. (n) Art. 126*. The creditor shall ha%e a right to indemnity for damages when$ thro gh the fa lt of the debtor$ all the things which are alternati%ely the ob,ect of the obligation ha%e been lost$ or the compliance of the obligation has become impossible. The indemnity shall be fi)ed taking as a basis the %al e of the last thing which disappeared$ or that of the ser%ice which last became impossible. Bamages other than the %al e of the last thing or ser%ice may also be awarded. (11'5a) Art. 1265. 0hen the choice has been e)pressly gi%en to the creditor$ the obligation shall cease to be alternati%e from the day when the selection has been comm nicated to the debtor. >ntil then the responsibility of the debtor shall be go%erned by the following r les; (1) (f one of the things is lost thro gh a fort ito s e%ent$ he shall perform the obligation by deli%ering that which the creditor sho ld choose from among the remainder$ or that which remains if only one s bsists7 (2) (f the loss of one of the things occ rs thro gh the fa lt of the debtor$ the creditor may claim any of those s bsisting$ or the price of that which$ thro gh the fa lt of the former$ has disappeared$ with a right to damages7 (') (f all the things are lost thro gh the fa lt of the debtor$ the choice by the creditor shall fall pon the price of any one of them$ also with indemnity for damages. The same r les shall be applied to obligations to do or not to do in case one$ some or all of the prestations sho ld become impossible. (11'6a) Art. 1266. 0hen only one prestation has been agreed pon$ b t the obligor may render another in s bstit tion$ the obligation is called fac ltati%e. The loss or deterioration of the thing intended as a s bstit te$ thro gh the negligence of the obligor$ does not render him liable. A t once the s bstit tion has been made$ the obligor is liable for the loss of the s bstit te on acco nt of his delay$ negligence or fra d. (n)

SECTION ). " %,int +n8 S, i8+*3 O9 i7+ti,n.

Art. 126-. The conc rrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand$ or that each one of the latter is bo nd to render$ entire compliance with the prestation. There

65

is a solidary liability only when the obligation e)pressly so states$ or when the law or the nat re of the obligation re. ires solidarity. (11'-a) Art. 1261. (f from the law$ or the nat re or the wording of the obligations to which the preceding article refers the contrary does not appear$ the credit or debt shall be pres med to be di%ided into as many shares as there are creditors or debtors$ the credits or debts being considered distinct from one another$ s b,ect to the + les of &o rt go%erning the m ltiplicity of s its. (11'1a) Art. 1264. (f the di%ision is impossible$ the right of the creditors may be pre, diced only by their collecti%e acts$ and the debt can be enforced only by proceeding against all the debtors. (f one of the latter sho ld be insol%ent$ the others shall not be liable for his share. (11'4) Art. 1216. The indi%isibility of an obligation does not necessarily gi%e rise to solidarity. 5or does solidarity of itself imply indi%isibility. (n) Art. 1211. ?olidarity may e)ist altho gh the creditors and the debtors may not be bo nd in the same manner and by the same periods and conditions. (11*6) Art. 1212. 9ach one of the solidary creditors may do whate%er may be b t not anything which may be pre, dicial to the latter. (11*1a) sef l to the others$

Art. 121'. A solidary creditor cannot assign his rights witho t the consent of the others. (n) Art. 121*. The debtor may pay any one of the solidary creditors7 b t if any demand$ , dicial or e)tra, dicial$ has been made by one of them$ payment sho ld be made to him. (11*2a) Art. 1215. 5o%ation$ compensation$ conf sion or remission of the debt$ made by any of the solidary creditors or with any of the solidary debtors$ shall e)ting ish the obligation$ witho t pre, dice to the pro%isions of Article 1214. The creditor who may ha%e e)ec ted any of these acts$ as well as he who collects the debt$ shall be liable to the others for the share in the obligation corresponding to them. (11*') Art. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them sim ltaneo sly. The demand made against one of them shall not be an obstacle to those which may s bse. ently be directed against the others$ so long as the debt has not been f lly collected. (11**a) Art. 121-. 3ayment made by one of the solidary debtors e)ting ishes the obligation. (f two or more solidary debtors offer to pay$ the creditor may choose which offer to accept. 8e who made the payment may claim from his co/debtors only the share which corresponds to each$ with the interest for the payment already made. (f the payment is made before the debt is d e$ no interest for the inter%ening period may be demanded. 0hen one of the solidary debtors cannot$ beca se of his insol%ency$ reimb rse his share to the debtor paying the obligation$ s ch share shall be borne by all his co/debtors$ in proportion to the debt of each. (11*5a)

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Art. 1211. 3ayment by a solidary debtor shall not entitle him to reimb rsement from his co/ debtors if s ch payment is made after the obligation has prescribed or become illegal. (n) Art. 1214. The remission made by the creditor of the share which affects one of the solidary debtors does not release the latter from his responsibility towards the co/debtors$ in case the debt had been totally paid by anyone of them before the remission was effected. (11*6a) Art. 1226. The remission of the whole obligation$ obtained by one of the solidary debtors$ does not entitle him to reimb rsement from his co/debtors. (n) Art. 1221. (f the thing has been lost or if the prestation has become impossible witho t the fa lt of the solidary debtors$ the obligation shall be e)ting ished. (f there was fa lt on the part of any one of them$ all shall be responsible to the creditor$ for the price and the payment of damages and interest$ witho t pre, dice to their action against the g ilty or negligent debtor. (f thro gh a fort ito s e%ent$ the thing is lost or the performance has become impossible after one of the solidary debtors has inc rred in delay thro gh the , dicial or e)tra, dicial demand pon him by the creditor$ the pro%isions of the preceding paragraph shall apply. (11*-a) Art. 1222. A solidary debtor may$ in actions filed by the creditor$ a%ail himself of all defenses which are deri%ed from the nat re of the obligation and of those which are personal to him$ or pertain to his own share. 0ith respect to those which personally belong to the others$ he may a%ail himself thereof only as regards that part of the debt for which the latter are responsible. (11*1a)

SECTION :. " Di-i.i9 ! +n8 In8i-i.i9 ! O9 i7+ti,n.

Art. 122'. The di%isibility or indi%isibility of the things that are the ob,ect of obligations in which there is only one debtor and only one creditor does not alter or modify the pro%isions of &hapter 2 of this Title. (11*4) Art. 122*. A ,oint indi%isible obligation gi%es rise to indemnity for damages from the time anyone of the debtors does not comply with his ndertaking. The debtors who may ha%e been ready to f lfill their promises shall not contrib te to the indemnity beyond the corresponding portion of the price of the thing or of the %al e of the ser%ice in which the obligation consists. (1156) Art. 1225. @or the p rposes of the preceding articles$ obligations to gi%e definite things and those which are not s sceptible of partial performance shall be deemed to be indi%isible. 0hen the obligation has for its ob,ect the e)ec tion of a certain n mber of days of work$ the accomplishment of work by metrical nits$ or analogo s things which by their nat re are s sceptible of partial performance$ it shall be di%isible. 8owe%er$ e%en tho gh the ob,ect or ser%ice may be physically di%isible$ an obligation is indi%isible if so pro%ided by law or intended by the parties.

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(n obligations not to do$ di%isibility or indi%isibility shall be determined by the character of the prestation in each partic lar case. (1151a)

SECTION 6. " O9 i7+ti,n. @it5 + P!n+ C +1.!

Art. 1226. (n obligations with a penal cla se$ the penalty shall s bstit te the indemnity for damages and the payment of interests in case of noncompliance$ if there is no stip lation to the contrary. 5e%ertheless$ damages shall be paid if the obligor ref ses to pay the penalty or is g ilty of fra d in the f lfillment of the obligation. The penalty may be enforced only when it is demandable in accordance with the pro%isions of this &ode. (1152a) Art. 122-. The debtor cannot e)empt himself from the performance of the obligation by paying the penalty$ sa%e in the case where this right has been e)pressly reser%ed for him. 5either can the creditor demand the f lfillment of the obligation and the satisfaction of the penalty at the same time$ nless this right has been clearly granted him. 8owe%er$ if after the creditor has decided to re. ire the f lfillment of the obligation$ the performance thereof sho ld become impossible witho t his fa lt$ the penalty may be enforced. (115'a) Art. 1221. 3roof of act al damages s ffered by the creditor is not necessary in order that the penalty may be demanded. (n) Art. 1224. The , dge shall e. itably red ce the penalty when the principal obligation has been partly or irreg larly complied with by the debtor. 9%en if there has been no performance$ the penalty may also be red ced by the co rts if it is ini. ito s or nconscionable. (115*a) Art. 12'6. The n llity of the penal cla se does not carry with it that of the principal obligation. The n llity of the principal obligation carries with it that of the penal cla se. (1155)

CHAPTER ) E(TIN$UISHMENT OF OBLI$ATIONS $ENERAL PROVISIONS

Art. 12'1. !bligations are e)ting ished; (1) Ay payment or performance; (2) Ay the loss of the thing d e; (') Ay the condonation or remission of the debt7 (*) Ay the conf sion or merger of the rights of creditor and debtor7 (5) Ay compensation7 (6) Ay no%ation.

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!ther ca ses of e)ting ishment of obligations$ s ch as ann lment$ rescission$ f lfillment of a resol tory condition$ and prescription$ are go%erned elsewhere in this &ode. (1156a)

SECTION #. " P+3;!nt ,* P!*4,*;+n0!

Art. 12'2. 3ayment means not only the deli%ery of money b t also the performance$ in any other manner$ of an obligation. (n) Art. 12''. A debt shall not be nderstood to ha%e been paid nless the thing or ser%ice in which the obligation consists has been completely deli%ered or rendered$ as the case may be. (115-) Art. 12'*. (f the obligation has been s bstantially performed in good faith$ the obligor may reco%er as tho gh there had been a strict and complete f lfillment$ less damages s ffered by the obligee. (n) Art. 12'5. 0hen the obligee accepts the performance$ knowing its incompleteness or irreg larity$ and witho t e)pressing any protest or ob,ection$ the obligation is deemed f lly complied with. (n) Art. 12'6. The creditor is not bo nd to accept payment or performance by a third person who has no interest in the f lfillment of the obligation$ nless there is a stip lation to the contrary. 0hoe%er pays for another may demand from the debtor what he has paid$ e)cept that if he paid witho t the knowledge or against the will of the debtor$ he can reco%er only insofar as the payment has been beneficial to the debtor. (1151a) Art. 12'-. 0hoe%er pays on behalf of the debtor witho t the knowledge or against the will of the latter$ cannot compel the creditor to s brogate him in his rights$ s ch as those arising from a mortgage$ g aranty$ or penalty. (1154a) Art. 12'1. 3ayment made by a third person who does not intend to be reimb rsed by the debtor is deemed to be a donation$ which re. ires the debtor:s consent. A t the payment is in any case %alid as to the creditor who has accepted it. (n) Art. 12'4. (n obligations to gi%e$ payment made by one who does not ha%e the free disposal of the thing d e and capacity to alienate it shall not be %alid$ witho t pre, dice to the pro%isions of Article 1*2- nder the Title on FNatural Obligations.F (1166a) Art. 12*6. 3ayment shall be made to the person in whose fa%or the obligation has been constit ted$ or his s ccessor in interest$ or any person a thori#ed to recei%e it. (1162a) Art. 12*1. 3ayment to a person who is incapacitated to administer his property shall be %alid if he has kept the thing deli%ered$ or insofar as the payment has been beneficial to him. 3ayment made to a third person shall also be %alid insofar as it has redo nded to the benefit of the creditor. ? ch benefit to the creditor need not be pro%ed in the following cases; (1) (f after the payment$ the third person ac. ires the creditor:s rights7

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(2) (f the creditor ratifies the payment to the third person7 (') (f by the creditor:s cond ct$ the debtor has been led to belie%e that the third person had a thority to recei%e the payment. (116'a) Art. 12*2. 3ayment made in good faith to any person in possession of the credit shall release the debtor. (116*) Art. 12*'. 3ayment made to the creditor by the debtor after the latter has been , dicially ordered to retain the debt shall not be %alid. (1165) Art. 12**. The debtor of a thing cannot compel the creditor to recei%e a different one$ altho gh the latter may be of the same %al e as$ or more %al able than that which is d e. (n obligations to do or not to do$ an act or forbearance cannot be s bstit ted by another act or forbearance against the obligee:s will. (1166a) Art. 12*5. Bation in payment$ whereby property is alienated to the creditor in satisfaction of a debt in money$ shall be go%erned by the law of sales. (n) Art. 12*6. 0hen the obligation consists in the deli%ery of an indeterminate or generic thing$ whose . ality and circ mstances ha%e not been stated$ the creditor cannot demand a thing of s perior . ality. 5either can the debtor deli%er a thing of inferior . ality. The p rpose of the obligation and other circ mstances shall be taken into consideration. (116-a) Art. 12*-. >nless it is otherwise stip lated$ the e)tra, dicial e)penses re. ired by the payment shall be for the acco nt of the debtor. 0ith regard to , dicial costs$ the + les of &o rt shall go%ern. (1161a) Art. 12*1. >nless there is an e)press stip lation to that effect$ the creditor cannot be compelled partially to recei%e the prestations in which the obligation consists. 5either may the debtor be re. ired to make partial payments. 8owe%er$ when the debt is in part li. idated and in part nli. idated$ the creditor may demand and the debtor may effect the payment of the former witho t waiting for the li. idation of the latter. (1164a) Art. 12*4. The payment of debts in money shall be made in the c rrency stip lated$ and if it is not possible to deli%er s ch c rrency$ then in the c rrency which is legal tender in the 3hilippines. The deli%ery of promissory notes payable to order$ or bills of e)change or other mercantile doc ments shall prod ce the effect of payment only when they ha%e been cashed$ or when thro gh the fa lt of the creditor they ha%e been impaired. (n the meantime$ the action deri%ed from the original obligation shall be held in the abeyance. (11-6) Art. 1256. (n case an e)traordinary inflation or deflation of the c rrency stip lated sho ld s per%ene$ the %al e of the c rrency at the time of the establishment of the obligation shall be the basis of payment$ nless there is an agreement to the contrary. (n)

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Art. 1251. 3ayment shall be made in the place designated in the obligation. There being no e)press stip lation and if the ndertaking is to deli%er a determinate thing$ the payment shall be made where%er the thing might be at the moment the obligation was constit ted. (n any other case the place of payment shall be the domicile of the debtor. (f the debtor changes his domicile in bad faith or after he has inc rred in delay$ the additional e)penses shall be borne by him. These pro%isions are witho t pre, dice to %en e nder the + les of &o rt. (11-1a)

SUBSECTION #. " A22 i0+ti,n ,4 P+3;!nt.

Art. 1252. 8e who has %ario s debts of the same kind in fa%or of one and the same creditor$ may declare at the time of making the payment$ to which of them the same m st be applied. >nless the parties so stip late$ or when the application of payment is made by the party for whose benefit the term has been constit ted$ application shall not be made as to debts which are not yet d e. (f the debtor accepts from the creditor a receipt in which an application of the payment is made$ the former cannot complain of the same$ nless there is a ca se for in%alidating the contract. (11-2a) Art. 125'. (f the debt prod ces interest$ payment of the principal shall not be deemed to ha%e been made ntil the interests ha%e been co%ered. (11-') Art. 125*. 0hen the payment cannot be applied in accordance with the preceding r les$ or if application can not be inferred from other circ mstances$ the debt which is most onero s to the debtor$ among those d e$ shall be deemed to ha%e been satisfied. (f the debts d e are of the same nat re and b rden$ the payment shall be applied to all of them proportionately. (11-*a)

SUBSECTION 2. " P+3;!nt 93 C!..i,n

Art. 1255. The debtor may cede or assign his property to his creditors in payment of his debts. This cession$ nless there is stip lation to the contrary$ shall only release the debtor from responsibility for the net proceeds of the thing assigned. The agreements which$ on the effect of the cession$ are made between the debtor and his creditors shall be go%erned by special laws. (11-5a)

SUBSECTION 3. " T!n8!* ,4 P+3;!nt +n8 C,n.i7n+ti,n

Art. 1256. (f the creditor to whom tender of payment has been made ref ses witho t , st

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ca se to accept it$ the debtor shall be released from responsibility by the consignation of the thing or s m d e. &onsignation alone shall prod ce the same effect in the following cases; (1) 0hen the creditor is absent or payment7 nknown$ or does not appear at the place of

(2) 0hen he is incapacitated to recei%e the payment at the time it is d e7 (') 0hen$ witho t , st ca se$ he ref ses to gi%e a receipt7 (*) 0hen two or more persons claim the same right to collect7 (5) 0hen the title of the obligation has been lost. (11-6a) Art. 125-. (n order that the consignation of the thing d e may release the obligor$ it m st first be anno nced to the persons interested in the f lfillment of the obligation. The consignation shall be ineffect al if it is not made strictly in consonance with the pro%isions which reg late payment. (11--) Art. 1251. &onsignation shall be made by depositing the things d e at the disposal of , dicial a thority$ before whom the tender of payment shall be pro%ed$ in a proper case$ and the anno ncement of the consignation in other cases. The consignation ha%ing been made$ the interested parties shall also be notified thereof. (11-1) Art. 1254. The e)penses of consignation$ when properly made$ shall be charged against the creditor. (11-1) Art. 1266. !nce the consignation has been d ly made$ the debtor may ask the , dge to order the cancellation of the obligation. Aefore the creditor has accepted the consignation$ or before a , dicial declaration that the consignation has been properly made$ the debtor may withdraw the thing or the s m deposited$ allowing the obligation to remain in force. (1116) Art. 1261. (f$ the consignation ha%ing been made$ the creditor sho ld a thori#e the debtor to withdraw the same$ he shall lose e%ery preference which he may ha%e o%er the thing. The co/debtors$ g arantors and s reties shall be released. (1111a)

SECTION 2. " L,.. ,4 t5! T5in7 D1!

Art. 1262. An obligation which consists in the deli%ery of a determinate thing shall be e)ting ished if it sho ld be lost or destroyed witho t the fa lt of the debtor$ and before he has inc rred in delay.

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0hen by law or stip lation$ the obligor is liable e%en for fort ito s e%ents$ the loss of the thing does not e)ting ish the obligation$ and he shall be responsible for damages. The same r le applies when the nat re of the obligation re. ires the ass mption of risk. (1112a) Art. 126'. (n an obligation to deli%er a generic thing$ the loss or destr ction of anything of the same kind does not e)ting ish the obligation. (n) Art. 126*. The co rts shall determine whether$ nder the circ mstances$ the partial loss of the ob,ect of the obligation is so important as to e)ting ish the obligation. (n) Art. 1265. 0hene%er the thing is lost in the possession of the debtor$ it shall be pres med that the loss was d e to his fa lt$ nless there is proof to the contrary$ and witho t pre, dice to the pro%isions of article 1165. This pres mption does not apply in case of earth. ake$ flood$ storm$ or other nat ral calamity. (111'a) Art. 1266. The debtor in obligations to do shall also be released when the prestation becomes legally or physically impossible witho t the fa lt of the obligor. (111*a) Art. 126-. 0hen the ser%ice has become so diffic lt as to be manifestly beyond the contemplation of the parties$ the obligor may also be released therefrom$ in whole or in part. (n) Art. 1261. 0hen the debt of a thing certain and determinate proceeds from a criminal offense$ the debtor shall not be e)empted from the payment of its price$ whate%er may be the ca se for the loss$ nless the thing ha%ing been offered by him to the person who sho ld recei%e it$ the latter ref sed witho t , stification to accept it. (1115) Art. 1264. The obligation ha%ing been e)ting ished by the loss of the thing$ the creditor shall ha%e all the rights of action which the debtor may ha%e against third persons by reason of the loss. (1116)

SECTION 3. " C,n8,n+ti,n ,* R!;i..i,n ,4 t5! D!9t

Art. 12-6. &ondonation or remission is essentially grat ito s$ and re. ires the acceptance by the obligor. (t may be made e)pressly or impliedly. !ne and the other kind shall be s b,ect to the r les which go%ern inofficio s donations. 9)press condonation shall$ f rthermore$ comply with the forms of donation. (111-) Art. 12-1. The deli%ery of a pri%ate doc ment e%idencing a credit$ made %ol ntarily by the creditor to the debtor$ implies the ren nciation of the action which the former had against the latter. (f in order to n llify this wai%er it sho ld be claimed to be inofficio s$ the debtor and his heirs may phold it by pro%ing that the deli%ery of the doc ment was made in %irt e of payment of the debt. (1111)

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Art. 12-2. 0hene%er the pri%ate doc ment in which the debt appears is fo nd in the possession of the debtor$ it shall be pres med that the creditor deli%ered it %ol ntarily$ nless the contrary is pro%ed. (1114) Art. 12-'. The ren nciation of the principal debt shall e)ting ish the accessory obligations7 b t the wai%er of the latter shall lea%e the former in force. (1146) Art. 12-*. (t is pres med that the accessory obligation of pledge has been remitted when the thing pledged$ after its deli%ery to the creditor$ is fo nd in the possession of the debtor$ or of a third person who owns the thing. (1141a)

SECTION ). " C,n41.i,n ,* M!*7!* ,4 Ri75t.

Art. 12-5. The obligation is e)ting ished from the time the characters of creditor and debtor are merged in the same person. (1142a) Art. 12-6. <erger which takes place in the person of the principal debtor or creditor benefits the g arantors. &onf sion which takes place in the person of any of the latter does not e)ting ish the obligation. (114') Art. 12--. &onf sion does not e)ting ish a ,oint obligation e)cept as regards the share corresponding to the creditor or debtor in whom the two characters conc r. (114*)

SECTION :. " C,;2!n.+ti,n Art. 12-1. &ompensation shall take place when two persons$ in their own right$ are creditors and debtors of each other. (1145) Art. 12-4. (n order that compensation may be proper$ it is necessary; (1) That each one of the obligors be bo nd principally$ and that he be at the same time a principal creditor of the other7 (2) That both debts consist in a s m of money$ or if the things d e are cons mable$ they be of the same kind$ and also of the same . ality if the latter has been stated7 (') That the two debts be d e7 (*) That they be li. idated and demandable7 (5) That o%er neither of them there be any retention or contro%ersy$ commenced by third persons and comm nicated in d e time to the debtor. (1146) Art. 1216. 5otwithstanding the pro%isions of the preceding article$ the g arantor may set p compensation as regards what the creditor may owe the principal debtor. (114-) Art. 1211. &ompensation may be total or partial. 0hen the two debts are of the same amo nt$ there is a total compensation. (n)

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Art. 1212. The parties may agree pon the compensation of debts which are not yet d e. (n) Art. 121'. (f one of the parties to a s it o%er an obligation has a claim for damages against the other$ the former may set it off by pro%ing his right to said damages and the amo nt thereof. (n) Art. 121*. 0hen one or both debts are rescissible or %oidable$ they may be compensated against each other before they are , dicially rescinded or a%oided. (n) Art. 1215. The debtor who has consented to the assignment of rights made by a creditor in fa%or of a third person$ cannot set p against the assignee the compensation which wo ld pertain to him against the assignor$ nless the assignor was notified by the debtor at the time he ga%e his consent$ that he reser%ed his right to the compensation. (f the creditor comm nicated the cession to him b t the debtor did not consent thereto$ the latter may set p the compensation of debts pre%io s to the cession$ b t not of s bse. ent ones. (f the assignment is made witho t the knowledge of the debtor$ he may set p the compensation of all credits prior to the same and also later ones ntil he had knowledge of the assignment. (1141a) Art. 1216. &ompensation takes place by operation of law$ e%en tho gh the debts may be payable at different places$ b t there shall be an indemnity for e)penses of e)change or transportation to the place of payment. (1144a) Art. 121-. &ompensation shall not be proper when one of the debts arises from a deposit m or from the obligations of a depositary or of a bailee in commodat m. 5either can compensation be set p against a creditor who has a claim for s pport d e by grat ito s title$ witho t pre, dice to the pro%isions of paragraph 2 of Article '61. (1266a) Art. 1211. 5either shall there be compensation if one of the debts consists in ci%il liability arising from a penal offense. (n) Art. 1214. (f a person sho ld ha%e against him se%eral debts which are s sceptible of compensation$ the r les on the application of payments shall apply to the order of the compensation. (1261) Art. 1246. 0hen all the re. isites mentioned in Article 12-4 are present$ compensation takes effect by operation of law$ and e)ting ishes both debts to the conc rrent amo nt$ e%en tho gh the creditors and debtors are not aware of the compensation. (1262a)

SECTION 6. " N,-+ti,n

Art. 1241. !bligations may be modified by; (1) &hanging their ob,ect or principal conditions7 (2) ? bstit ting the person of the debtor7

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(') ? brogating a third person in the rights of the creditor. (126') Art. 1242. (n order that an obligation may be e)ting ished by another which s bstit te the same$ it is imperati%e that it be so declared in ne. i%ocal terms$ or that the old and the new obligations be on e%ery point incompatible with each other. (126*) Art. 124'. 5o%ation which consists in s bstit ting a new debtor in the place of the original one$ may be made e%en witho t the knowledge or against the will of the latter$ b t not witho t the consent of the creditor. 3ayment by the new debtor gi%es him the rights mentioned in Articles 12'6 and 12'-. (1265a) Art. 124*. (f the s bstit tion is witho t the knowledge or against the will of the debtor$ the new debtor:s insol%ency or non/f lfillment of the obligations shall not gi%e rise to any liability on the part of the original debtor. (n) Art. 1245. The insol%ency of the new debtor$ who has been proposed by the original debtor and accepted by the creditor$ shall not re%i%e the action of the latter against the original obligor$ e)cept when said insol%ency was already e)isting and of p blic knowledge$ or known to the debtor$ when the delegated his debt. (1266a) Art. 1246. 0hen the principal obligation is e)ting ished in conse. ence of a no%ation$ accessory obligations may s bsist only insofar as they may benefit third persons who did not gi%e their consent. (126-) Art. 124-. (f the new obligation is %oid$ the original one shall s bsist$ nless the parties intended that the former relation sho ld be e)ting ished in any e%ent. (n) Art. 1241. The no%ation is %oid if the original obligation was %oid$ e)cept when ann lment may be claimed only by the debtor or when ratification %alidates acts which are %oidable. (1261a) Art. 1244. (f the original obligation was s b,ect to a s spensi%e or resol tory condition$ the new obligation shall be nder the same condition$ nless it is otherwise stip lated. (n) Art. 1'66. ? brogation of a third person in the rights of the creditor is either legal or con%entional. The former is not pres med$ e)cept in cases e)pressly mentioned in this &ode7 the latter m st be clearly established in order that it may take effect. (1264a) Art. 1'61. &on%entional s brogation of a third person re. ires the consent of the original parties and of the third person. (n) Art. 1'62. (t is pres med that there is legal s brogation; (1) 0hen a creditor pays another creditor who is preferred$ e%en witho t the debtor:s knowledge7 (2) 0hen a third person$ not interested in the obligation$ pays with the e)press or tacit appro%al of the debtor7 (') 0hen$ e%en witho t the knowledge of the debtor$ a person interested in the f lfillment of the obligation pays$ witho t pre, dice to the effects of conf sion as to the latter:s share. (1216a)

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Art. 1'6'. ? brogation transfers to the persons s brogated the credit with all the rights thereto appertaining$ either against the debtor or against third person$ be they g arantors or possessors of mortgages$ s b,ect to stip lation in a con%entional s brogation. (1212a) Art. 1'6*. A creditor$ to whom partial payment has been made$ may e)ercise his right for the remainder$ and he shall be preferred to the person who has been s brogated in his place in %irt e of the partial payment of the same credit. (121')

Tit ! II. " CONTRACTS CHAPTER # $ENERAL PROVISIONS

Art. 1'65. A contract is a meeting of minds between two persons whereby one binds himself$ with respect to the other$ to gi%e something or to render some ser%ice. (125*a) Art. 1'66. The contracting parties may establish s ch stip lations$ cla ses$ terms and conditions as they may deem con%enient$ pro%ided they are not contrary to law$ morals$ good c stoms$ p blic order$ or p blic policy. (1255a) Art. 1'6-. (nnominate contracts shall be reg lated by the stip lations of the parties$ by the pro%isions of Titles ( and (( of this Aook$ by the r les go%erning the most analogo s nominate contracts$ and by the c stoms of the place. (n) Art. 1'61. The contract m st bind both contracting parties7 its %alidity or compliance cannot be left to the will of one of them. (1256a) Art. 1'64. The determination of the performance may be left to a third person$ whose decision shall not be binding ntil it has been made known to both contracting parties. (n) Art. 1'16. The determination shall not be obligatory if it is e%idently ine. itable. (n s ch case$ the co rts shall decide what is e. itable nder the circ mstances. (n) Art. 1'11. &ontracts take effect only between the parties$ their assigns and heirs$ e)cept in case where the rights and obligations arising from the contract are not transmissible by their nat re$ or by stip lation or by pro%ision of law. The heir is not liable beyond the %al e of the property he recei%ed from the decedent. (f a contract sho ld contain some stip lation in fa%or of a third person$ he may demand its f lfillment pro%ided he comm nicated his acceptance to the obligor before its re%ocation. A mere incidental benefit or interest of a person is not s fficient. The contracting parties m st ha%e clearly and deliberately conferred a fa%or pon a third person. (125-a) Art. 1'12. (n contracts creating real rights$ third persons who come into possession of the ob,ect of the contract are bo nd thereby$ s b,ect to the pro%isions of the <ortgage Law and the Land +egistration Laws. (n) Art. 1'1'. &reditors are protected in cases of contracts intended to defra d them. (n) Art. 1'1*. Any third person who ind ces another to %iolate his contract shall be liable for damages to the other contracting party. (n)

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Art. 1'15. &ontracts are perfected by mere consent$ and from that moment the parties are bo nd not only to the f lfillment of what has been e)pressly stip lated b t also to all the conse. ences which$ according to their nat re$ may be in keeping with good faith$ sage and law. (1251) Art. 1'16. +eal contracts$ s ch as deposit$ pledge and &ommodat m$ are not perfected ntil the deli%ery of the ob,ect of the obligation. (n) Art. 1'1-. 5o one may contract in the name of another witho t being a thori#ed by the latter$ or nless he has by law a right to represent him. A contract entered into in the name of another by one who has no a thority or legal representation$ or who has acted beyond his powers$ shall be nenforceable$ nless it is ratified$ e)pressly or impliedly$ by the person on whose behalf it has been e)ec ted$ before it is re%oked by the other contracting party. (1254a)

CHAPTER 2 ESSENTIAL RE'UISITES OF CONTRACTS $ENERAL PROVISIONS

Art. 1'11. There is no contract nless the following re. isites conc r; (1) &onsent of the contracting parties7 (2) !b,ect certain which is the s b,ect matter of the contract7 (') &a se of the obligation which is established. (1261) ?9&T(!5 1. / &onsent Art. 1'14. &onsent is manifested by the meeting of the offer and the acceptance pon the thing and the ca se which are to constit te the contract. The offer m st be certain and the acceptance absol te. A . alified acceptance constit tes a co nter/offer. Acceptance made by letter or telegram does not bind the offerer e)cept from the time it came to his knowledge. The contract$ in s ch a case$ is pres med to ha%e been entered into in the place where the offer was made. (1262a) Art. 1'26. An acceptance may be e)press or implied. (n) Art. 1'21. The person making the offer may fi) the time$ place$ and manner of acceptance$ all of which m st be complied with. (n) Art. 1'22. An offer made thro gh an agent is accepted from the time acceptance is comm nicated to him. (n) Art. 1'2'. An offer becomes ineffecti%e pon the death$ ci%il interdiction$ insanity$ or insol%ency of either party before acceptance is con%eyed. (n)

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Art. 1'2*. 0hen the offerer has allowed the offeree a certain period to accept$ the offer may be withdrawn at any time before acceptance by comm nicating s ch withdrawal$ e)cept when the option is fo nded pon a consideration$ as something paid or promised. (n) Art. 1'25. >nless it appears otherwise$ b siness ad%ertisements of things for sale are not definite offers$ b t mere in%itations to make an offer. (n) Art. 1'26. Ad%ertisements for bidders are simply in%itations to make proposals$ and the ad%ertiser is not bo nd to accept the highest or lowest bidder$ nless the contrary appears. (n) Art. 1'2-. The following cannot gi%e consent to a contract; (1) >nemancipated minors7 (2) (nsane or demented persons$ and deaf/m tes who do not know how to write. (126'a) Art. 1'21. &ontracts entered into d ring a l cid inter%al are %alid. &ontracts agreed to in a state of dr nkenness or d ring a hypnotic spell are %oidable. (n) Art. 1'24. The incapacity declared in Article 1'2- is s b,ect to the modifications determined by law$ and is nderstood to be witho t pre, dice to special dis. alifications established in the laws. (126*) Art. 1''6. A contract where consent is gi%en thro gh mistake$ %iolence$ intimidation$ infl ence$ or fra d is %oidable. (1265a) nd e

Art. 1''1. (n order that mistake may in%alidate consent$ it sho ld refer to the s bstance of the thing which is the ob,ect of the contract$ or to those conditions which ha%e principally mo%ed one or both parties to enter into the contract. <istake as to the identity or . alifications of one of the parties will %itiate consent only when s ch identity or . alifications ha%e been the principal ca se of the contract. A simple mistake of acco nt shall gi%e rise to its correction. (1266a) Art. 1''2. 0hen one of the parties is nable to read$ or if the contract is in a lang age not nderstood by him$ and mistake or fra d is alleged$ the person enforcing the contract m st show that the terms thereof ha%e been f lly e)plained to the former. (n) Art. 1'''. There is no mistake if the party alleging it knew the do bt$ contingency or risk affecting the ob,ect of the contract. (n) Art. 1''*. < t al error as to the legal effect of an agreement when the real p rpose of the parties is fr strated$ may %itiate consent. (n) Art. 1''5. There is %iolence when in order to wrest consent$ serio s or irresistible force is employed.

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There is intimidation when one of the contracting parties is compelled by a reasonable and well/gro nded fear of an imminent and gra%e e%il pon his person or property$ or pon the person or property of his spo se$ descendants or ascendants$ to gi%e his consent. To determine the degree of intimidation$ the age$ se) and condition of the person shall be borne in mind. A threat to enforce one:s claim thro gh competent a thority$ if the claim is , st or legal$ does not %itiate consent. (126-a) Art. 1''6. =iolence or intimidation shall ann l the obligation$ altho gh it may ha%e been employed by a third person who did not take part in the contract. (1261) Art. 1''-. There is nd e infl ence when a person takes improper ad%antage of his power o%er the will of another$ depri%ing the latter of a reasonable freedom of choice. The following circ mstances shall be considered; the confidential$ family$ spirit al and other relations between the parties$ or the fact that the person alleged to ha%e been nd ly infl enced was s ffering from mental weakness$ or was ignorant or in financial distress. (n) Art. 1''1. There is fra d when$ thro gh insidio s words or machinations of one of the contracting parties$ the other is ind ced to enter into a contract which$ witho t them$ he wo ld not ha%e agreed to. (1264) Art. 1''4. @ail re to disclose facts$ when there is a d ty to re%eal them$ as when the parties are bo nd by confidential relations$ constit tes fra d. (n) Art. 1'*6. The s al e)aggerations in trade$ when the other party had an opport nity to know the facts$ are not in themsel%es fra d lent. (n) Art. 1'*1. A mere e)pression of an opinion does not signify fra d$ nless made by an e)pert and the other party has relied on the former:s special knowledge. (n) Art. 1'*2. <isrepresentation by a third person does not %itiate consent$ misrepresentation has created s bstantial mistake and the same is m t al. (n) nless s ch

Art. 1'*'. <isrepresentation made in good faith is not fra d lent b t may constit te error. (n) Art. 1'**. (n order that fra d may make a contract %oidable$ it sho ld be serio s and sho ld not ha%e been employed by both contracting parties. (ncidental fra d only obliges the person employing it to pay damages. (12-6) Art. 1'*5. ?im lation of a contract may be absol te or relati%e. The former takes place when the parties do not intend to be bo nd at all7 the latter$ when the parties conceal their tr e agreement. (n) Art. 1'*6. An absol tely sim lated or fictitio s contract is %oid. A relati%e sim lation$ when it does not pre, dice a third person and is not intended for any p rpose contrary to law$ morals$ good c stoms$ p blic order or p blic policy binds the parties to their real agreement. (n)

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SECTION 2. " O96!0t ,4 C,nt*+0t.

Art. 1'*-. All things which are not o tside the commerce of men$ incl ding f t re things$ may be the ob,ect of a contract. All rights which are not intransmissible may also be the ob,ect of contracts. 5o contract may be entered into a thori#ed by law. pon f t re inheritance e)cept in cases e)pressly

All ser%ices which are not contrary to law$ morals$ good c stoms$ p blic order or p blic policy may likewise be the ob,ect of a contract. (12-1a) Art. 1'*1. (mpossible things or ser%ices cannot be the ob,ect of contracts. (12-2) Art. 1'*4. The ob,ect of e%ery contract m st be determinate as to its kind. The fact that the . antity is not determinate shall not be an obstacle to the e)istence of the contract$ pro%ided it is possible to determine the same$ witho t the need of a new contract between the parties. (12-')

SECTION 3. " C+1.! ,4 C,nt*+0t.

Art. 1'56. (n onero s contracts the ca se is nderstood to be$ for each contracting party$ the prestation or promise of a thing or ser%ice by the other7 in rem neratory ones$ the ser%ice or benefit which is rem nerated7 and in contracts of p re beneficence$ the mere liberality of the benefactor. (12-*) Art. 1'51. The partic lar moti%es of the parties in entering into a contract are different from the ca se thereof. (n) Art. 1'52. &ontracts witho t ca se$ or with nlawf l ca se$ prod ce no effect whate%er. The ca se is nlawf l if it is contrary to law$ morals$ good c stoms$ p blic order or p blic policy. (12-5a) Art. 1'5'. The statement of a false ca se in contracts shall render them %oid$ if it sho ld not be pro%ed that they were fo nded pon another ca se which is tr e and lawf l. (12-6) Art. 1'5*. Altho gh the ca se is not stated in the contract$ it is pres med that it e)ists and is lawf l$ nless the debtor pro%es the contrary. (12--) Art. 1'55. 9)cept in cases specified by law$ lesion or inade. acy of ca se shall not in%alidate a contract$ nless there has been fra d$ mistake or nd e infl ence. (n)

CHAPTER 3 FORM OF CONTRACTS

Art. 1'56. &ontracts shall be obligatory$ in whate%er form they may ha%e been entered into$

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pro%ided all the essential re. isites for their %alidity are present. 8owe%er$ when the law re. ires that a contract be in some form in order that it may be %alid or enforceable$ or that a contract be pro%ed in a certain way$ that re. irement is absol te and indispensable. (n s ch cases$ the right of the parties stated in the following article cannot be e)ercised. (12-1a) Art. 1'5-. (f the law re. ires a doc ment or other special form$ as in the acts and contracts en merated in the following article$ the contracting parties may compel each other to obser%e that form$ once the contract has been perfected. This right may be e)ercised sim ltaneo sly with the action pon the contract. (12-4a) Art. 1'51. The following m st appear in a p blic doc ment; (1) Acts and contracts which ha%e for their ob,ect the creation$ transmission$ modification or e)ting ishment of real rights o%er immo%able property7 sales of real property or of an interest therein a go%erned by Articles 1*6'$ 5o. 2$ and 1*657 (2) The cession$ rep diation or ren nciation of hereditary rights or of those of the con, gal partnership of gains7 (') The power to administer property$ or any other power which has for its ob,ect an act appearing or which sho ld appear in a p blic doc ment$ or sho ld pre, dice a third person7 (*) The cession of actions or rights proceeding from an act appearing in a p blic doc ment. All other contracts where the amo nt in%ol%ed e)ceeds fi%e h ndred pesos m st appear in writing$ e%en a pri%ate one. A t sales of goods$ chattels or things in action are go%erned by Articles$ 1*6'$ 5o. 2 and 1*65. (1216a)

CHAPTER ) REFORMATION OF INSTRUMENTS (n)

Art. 1'54. 0hen$ there ha%ing been a meeting of the minds of the parties to a contract$ their tr e intention is not e)pressed in the instr ment p rporting to embody the agreement$ by reason of mistake$ fra d$ ine. itable cond ct or accident$ one of the parties may ask for the reformation of the instr ment to the end that s ch tr e intention may be e)pressed. (f mistake$ fra d$ ine. itable cond ct$ or accident has pre%ented a meeting of the minds of the parties$ the proper remedy is not reformation of the instr ment b t ann lment of the contract. Art. 1'66. The principles of the general law on the reformation of instr ments are hereby adopted insofar as they are not in conflict with the pro%isions of this &ode. Art. 1'61. 0hen a m t al mistake of the parties ca ses the fail re of the instr ment to disclose their real agreement$ said instr ment may be reformed. Art. 1'62. (f one party was mistaken and the other acted fra d lently or ine. itably in s ch a way that the instr ment does not show their tr e intention$ the former may ask for the reformation of the instr ment.

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Art. 1'6'. 0hen one party was mistaken and the other knew or belie%ed that the instr ment did not state their real agreement$ b t concealed that fact from the former$ the instr ment may be reformed. Art. 1'6*. 0hen thro gh the ignorance$ lack of skill$ negligence or bad faith on the part of the person drafting the instr ment or of the clerk or typist$ the instr ment does not e)press the tr e intention of the parties$ the co rts may order that the instr ment be reformed. Art. 1'65. (f two parties agree pon the mortgage or pledge of real or personal property$ b t the instr ment states that the property is sold absol tely or with a right of rep rchase$ reformation of the instr ment is proper. Art. 1'66. There shall be no reformation in the following cases; (1) ?imple donations inter %i%os wherein no condition is imposed7 (2) 0ills7 (') 0hen the real agreement is %oid. Art. 1'6-. 0hen one of the parties has bro ght an action to enforce the instr ment$ he cannot s bse. ently ask for its reformation. Art. 1'61. +eformation may be ordered at the instance of either party or his s ccessors in interest$ if the mistake was m t al7 otherwise$ pon petition of the in, red party$ or his heirs and assigns. Art. 1'64. The proced re for the reformation of instr ment shall be go%erned by r les of co rt to be prom lgated by the ? preme &o rt.

CHAPTER : INTERPRETATION OF CONTRACTS

Art. 1'-6. (f the terms of a contract are clear and lea%e no do bt pon the intention of the contracting parties$ the literal meaning of its stip lations shall control. (f the words appear to be contrary to the e%ident intention of the parties$ the latter shall pre%ail o%er the former. (1211) Art. 1'-1. (n order to , dge the intention of the contracting parties$ their contemporaneo s and s bse. ent acts shall be principally considered. (1212) Art. 1'-2. 8owe%er general the terms of a contract may be$ they shall not be nderstood to comprehend things that are distinct and cases that are different from those pon which the parties intended to agree. (121') Art. 1'-'. (f some stip lation of any contract sho ld admit of se%eral meanings$ it shall be nderstood as bearing that import which is most ade. ate to render it effect al. (121*)

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Art. 1'-*. The %ario s stip lations of a contract shall be interpreted together$ attrib ting to the do btf l ones that sense which may res lt from all of them taken ,ointly. (1215) Art. 1'-5. 0ords which may ha%e different significations shall be nderstood in that which is most in keeping with the nat re and ob,ect of the contract. (1216) Art. 1'-6. The sage or c stom of the place shall be borne in mind in the interpretation of the ambig ities of a contract$ and shall fill the omission of stip lations which are ordinarily established. (121-) Art. 1'--. The interpretation of obsc re words or stip lations in a contract shall not fa%or the party who ca sed the obsc rity. (1211) Art. 1'-1. 0hen it is absol tely impossible to settle do bts by the r les established in the preceding articles$ and the do bts refer to incidental circ mstances of a grat ito s contract$ the least transmission of rights and interests shall pre%ail. (f the contract is onero s$ the do bt shall be settled in fa%or of the greatest reciprocity of interests. (f the do bts are cast pon the principal ob,ect of the contract in s ch a way that it cannot be known what may ha%e been the intention or will of the parties$ the contract shall be n ll and %oid. (1214) Art. 1'-4. The principles of interpretation stated in + le 12' of the + les of &o rt shall likewise be obser%ed in the constr ction of contracts. (n)

CHAPTER 6 RESCISSIBLE CONTRACTS

Art. 1'16. &ontracts %alidly agreed (1246) pon may be rescinded in the cases established by law.

Art. 1'11. The following contracts are rescissible; (1) Those which are entered into by g ardians whene%er the wards whom they represent s ffer lesion by more than one/fo rth of the %al e of the things which are the ob,ect thereof7 (2) Those agreed pon in representation of absentees$ if the latter s ffer the lesion stated in the preceding n mber7 (') Those ndertaken in fra d of creditors when the latter cannot in any other manner collect the claims d e them7 (*) Those which refer to things nder litigation if they ha%e been entered into by the defendant witho t the knowledge and appro%al of the litigants or of competent , dicial a thority7 (5) All other contracts specially declared by law to be s b,ect to rescission. (1241a) Art. 1'12. 3ayments made in a state of insol%ency for obligations to whose f lfillment the debtor co ld not be compelled at the time they were effected$ are also rescissible. (1242)

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Art. 1'1'. The action for rescission is s bsidiary7 it cannot be instit ted e)cept when the party s ffering damage has no other legal means to obtain reparation for the same. (124*) Art. 1'1*. +escission shall be only to the e)tent necessary to co%er the damages ca sed. (n) Art. 1'15. +escission creates the obligation to ret rn the things which were the ob,ect of the contract$ together with their fr its$ and the price with its interest7 conse. ently$ it can be carried o t only when he who demands rescission can ret rn whate%er he may be obliged to restore. 5either shall rescission take place when the things which are the ob,ect of the contract are legally in the possession of third persons who did not act in bad faith. (n this case$ indemnity for damages may be demanded from the person ca sing the loss. (1245) Art. 1'16. +escission referred to in 5os. 1 and 2 of Article 1'11 shall not take place with respect to contracts appro%ed by the co rts. (1246a) Art. 1'1-. All contracts by %irt e of which the debtor alienates property by grat ito s title are pres med to ha%e been entered into in fra d of creditors$ when the donor did not reser%e s fficient property to pay all debts contracted before the donation. Alienations by onero s title are also pres med fra d lent when made by persons against whom some , dgment has been iss ed. The decision or attachment need not refer to the property alienated$ and need not ha%e been obtained by the party seeking the rescission. (n addition to these pres mptions$ the design to defra d creditors may be pro%ed in any other manner recogni#ed by the law of e%idence. (124-a) Art. 1'11. 0hoe%er ac. ires in bad faith the things alienated in fra d of creditors$ shall indemnify the latter for damages s ffered by them on acco nt of the alienation$ whene%er$ d e to any ca se$ it sho ld be impossible for him to ret rn them. (f there are two or more alienations$ the first ac. irer shall be liable first$ and so on s ccessi%ely. (1241a) Art. 1'14. The action to claim rescission m st be commenced within fo r years. @or persons nder g ardianship and for absentees$ the period of fo r years shall not begin ntil the termination of the former:s incapacity$ or ntil the domicile of the latter is known. (1244)

CHAPTER < VOIDABLE CONTRACTS

Art. 1'46. The following contracts are %oidable or ann llable$ e%en tho gh there may ha%e been no damage to the contracting parties; (1) Those where one of the parties is incapable of gi%ing consent to a contract7 (2) Those where the consent is %itiated by mistake$ %iolence$ intimidation$ infl ence or fra d. nd e

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These contracts are binding$ nless they are ann lled by a proper action in co rt. They are s sceptible of ratification. (n) Art. 1'41. The action for ann lment shall be bro ght within fo r years. This period shall begin; (n cases of intimidation$ %iolence or consent ceases. nd e infl ence$ from the time the defect of the

(n case of mistake or fra d$ from the time of the disco%ery of the same. And when the action refers to contracts entered into by minors or other incapacitated persons$ from the time the g ardianship ceases. (1'61a) Art. 1'42. +atification e)ting ishes the action to ann l a %oidable contract. (1'64a) Art. 1'4'. +atification may be effected e)pressly or tacitly. (t is nderstood that there is a tacit ratification if$ with knowledge of the reason which renders the contract %oidable and s ch reason ha%ing ceased$ the person who has a right to in%oke it sho ld e)ec te an act which necessarily implies an intention to wai%e his right. (1'11a) Art. 1'4*. +atification may be effected by the g ardian of the incapacitated person. (n) Art. 1'45. +atification does not re. ire the conformity of the contracting party who has no right to bring the action for ann lment. (1'12) Art. 1'46. +atification cleanses the contract from all its defects from the moment it was constit ted. (1'1') Art. 1'4-. The action for the ann lment of contracts may be instit ted by all who are thereby obliged principally or s bsidiarily. 8owe%er$ persons who are capable cannot allege the incapacity of those with whom they contracted7 nor can those who e)erted intimidation$ %iolence$ or nd e infl ence$ or employed fra d$ or ca sed mistake base their action pon these flaws of the contract. (1'62a) Art. 1'41. An obligation ha%ing been ann lled$ the contracting parties shall restore to each other the things which ha%e been the s b,ect matter of the contract$ with their fr its$ and the price with its interest$ e)cept in cases pro%ided by law. (n obligations to render ser%ice$ the %al e thereof shall be the basis for damages. (1'6'a) Art. 1'44. 0hen the defect of the contract consists in the incapacity of one of the parties$ the incapacitated person is not obliged to make any restit tion e)cept insofar as he has been benefited by the thing or price recei%ed by him. (1'6*) Art. 1*66. 0hene%er the person obliged by the decree of ann lment to ret rn the thing can not do so beca se it has been lost thro gh his fa lt$ he shall ret rn the fr its recei%ed and the %al e of the thing at the time of the loss$ with interest from the same date. (1'6-a)

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Art. 1*61. The action for ann lment of contracts shall be e)ting ished when the thing which is the ob,ect thereof is lost thro gh the fra d or fa lt of the person who has a right to instit te the proceedings. (f the right of action is based pon the incapacity of any one of the contracting parties$ the loss of the thing shall not be an obstacle to the s ccess of the action$ nless said loss took place thro gh the fra d or fa lt of the plaintiff. (1'1*a) Art. 1*62. As long as one of the contracting parties does not restore what in %irt e of the decree of ann lment he is bo nd to ret rn$ the other cannot be compelled to comply with what is inc mbent pon him. (1'61)

CHAPTER 8 UNENFORCEABLE CONTRACTS (n)

Art. 1*6'. The following contracts are nenforceable$ nless they are ratified; (1) Those entered into in the name of another person by one who has been gi%en no a thority or legal representation$ or who has acted beyond his powers7 (2) Those that do not comply with the ?tat te of @ra ds as set forth in this n mber. (n the following cases an agreement hereafter made shall be nenforceable by action$ nless the same$ or some note or memorand m$ thereof$ be in writing$ and s bscribed by the party charged$ or by his agent7 e%idence$ therefore$ of the agreement cannot be recei%ed witho t the writing$ or a secondary e%idence of its contents; (a) An agreement that by its terms is not to be performed within a year from the making thereof7 (b) A special promise to answer for the debt$ defa lt$ or miscarriage of another7 (c) An agreement made in consideration of marriage$ other than a m t al promise to marry7 (d) An agreement for the sale of goods$ chattels or things in action$ at a price not less than fi%e h ndred pesos$ nless the b yer accept and recei%e part of s ch goods and chattels$ or the e%idences$ or some of them$ of s ch things in action or pay at the time some part of the p rchase money7 b t when a sale is made by a ction and entry is made by the a ctioneer in his sales book$ at the time of the sale$ of the amo nt and kind of property sold$ terms of sale$ price$ names of the p rchasers and person on whose acco nt the sale is made$ it is a s fficient memorand m7 (e) An agreement of the leasing for a longer period than one year$ or for the sale of real property or of an interest therein7 (f) A representation as to the credit of a third person. (') Those where both parties are incapable of gi%ing consent to a contract. Art. 1*6*. >na thori#ed contracts are go%erned by Article 1'1- and the principles of agency in Title E of this Aook.

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Art. 1*65. &ontracts infringing the ?tat te of @ra ds$ referred to in 5o. 2 of Article 1*6'$ are ratified by the fail re to ob,ect to the presentation of oral e%idence to pro%e the same$ or by the acceptance of benefit nder them. Art. 1*66. 0hen a contract is enforceable nder the ?tat te of @ra ds$ and a p blic doc ment is necessary for its registration in the +egistry of Beeds$ the parties may a%ail themsel%es of the right nder Article 1'5-. Art. 1*6-. (n a contract where both parties are incapable of gi%ing consent$ e)press or implied ratification by the parent$ or g ardian$ as the case may be$ of one of the contracting parties shall gi%e the contract the same effect as if only one of them were incapacitated. (f ratification is made by the parents or g ardians$ as the case may be$ of both contracting parties$ the contract shall be %alidated from the inception. Art. 1*61. >nenforceable contracts cannot be assailed by third persons.

CHAPTER C VOID AND INE(ISTENT CONTRACTS

Art. 1*64. The following contracts are ine)istent and %oid from the beginning; (1) Those whose ca se$ ob,ect or p rpose is contrary to law$ morals$ good c stoms$ p blic order or p blic policy7 (2) Those which are absol tely sim lated or fictitio s7 (') Those whose ca se or ob,ect did not e)ist at the time of the transaction7 (*) Those whose ob,ect is o tside the commerce of men7 (5) Those which contemplate an impossible ser%ice7 (6) Those where the intention of the parties relati%e to the principal ob,ect of the contract cannot be ascertained7 (-) Those e)pressly prohibited or declared %oid by law. These contracts cannot be ratified. 5either can the right to set p the defense of illegality be wai%ed. Art. 1*16. The action or defense for the declaration of the ine)istence of a contract does not prescribe. Art. 1*11. 0hen the n llity proceeds from the illegality of the ca se or ob,ect of the contract$ and the act constit tes a criminal offense$ both parties being in pari delicto$ they shall ha%e no action against each other$ and both shall be prosec ted. <oreo%er$ the pro%isions of the 3enal &ode relati%e to the disposal of effects or instr ments of a crime shall be applicable to the things or the price of the contract. This r le shall be applicable when only one of the parties is g ilty7 b t the innocent one may claim what he has gi%en$ and shall not be bo nd to comply with his promise. (1'65)

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Art. 1*12. (f the act in which the nlawf l or forbidden ca se consists does not constit te a criminal offense$ the following r les shall be obser%ed; (1) 0hen the fa lt is on the part of both contracting parties$ neither may reco%er what he has gi%en by %irt e of the contract$ or demand the performance of the other:s ndertaking7 (2) 0hen only one of the contracting parties is at fa lt$ he cannot reco%er what he has gi%en by reason of the contract$ or ask for the f lfillment of what has been promised him. The other$ who is not at fa lt$ may demand the ret rn of what he has gi%en witho t any obligation to comply his promise. (1'66) Art. 1*1'. (nterest paid in e)cess of the interest allowed by the s ry laws may be reco%ered by the debtor$ with interest thereon from the date of the payment. Art. 1*1*. 0hen money is paid or property deli%ered for an illegal p rpose$ the contract may be rep diated by one of the parties before the p rpose has been accomplished$ or before any damage has been ca sed to a third person. (n s ch case$ the co rts may$ if the p blic interest will th s be s bser%ed$ allow the party rep diating the contract to reco%er the money or property. Art. 1*15. 0here one of the parties to an illegal contract is incapable of gi%ing consent$ the co rts may$ if the interest of , stice so demands allow reco%ery of money or property deli%ered by the incapacitated person. Art. 1*16. 0hen the agreement is not illegal per se b t is merely prohibited$ and the prohibition by the law is designated for the protection of the plaintiff$ he may$ if p blic policy is thereby enhanced$ reco%er what he has paid or deli%ered. Art. 1*1-. 0hen the price of any article or commodity is determined by stat te$ or by a thority of law$ any person paying any amo nt in e)cess of the ma)im m price allowed may reco%er s ch e)cess. Art. 1*11. 0hen the law fi)es$ or a thori#es the fi)ing of the ma)im m n mber of ho rs of labor$ and a contract is entered into whereby a laborer ndertakes to work longer than the ma)im m th s fi)ed$ he may demand additional compensation for ser%ice rendered beyond the time limit. Art. 1*14. 0hen the law sets$ or a thori#es the setting of a minim m wage for laborers$ and a contract is agreed pon by which a laborer accepts a lower wage$ he shall be entitled to reco%er the deficiency. Art. 1*26. (n case of a di%isible contract$ if the illegal terms can be separated from the legal ones$ the latter may be enforced. Art. 1*21. The defense of illegality of contract is not a%ailable to third persons whose interests are not directly affected. Art. 1*22. A contract which is the direct res lt of a pre%io s illegal contract$ is also %oid and ine)istent.

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Tit ! III. " NATURAL OBLI$ATIONS

Art. 1*2'. !bligations are ci%il or nat ral. &i%il obligations gi%e a right of action to compel their performance. 5at ral obligations$ not being based on positi%e law b t on e. ity and nat ral law$ do not grant a right of action to enforce their performance$ b t after %ol ntary f lfillment by the obligor$ they a thori#e the retention of what has been deli%ered or rendered by reason thereof. ?ome nat ral obligations are set forth in the following articles. Art. 1*2*. 0hen a right to s e pon a ci%il obligation has lapsed by e)tincti%e prescription$ the obligor who %ol ntarily performs the contract cannot reco%er what he has deli%ered or the %al e of the ser%ice he has rendered. Art. 1*25. 0hen witho t the knowledge or against the will of the debtor$ a third person pays a debt which the obligor is not legally bo nd to pay beca se the action thereon has prescribed$ b t the debtor later %ol ntarily reimb rses the third person$ the obligor cannot reco%er what he has paid. Art. 1*26. 0hen a minor between eighteen and twenty/one years of age who has entered into a contract witho t the consent of the parent or g ardian$ after the ann lment of the contract %ol ntarily ret rns the whole thing or price recei%ed$ notwithstanding the fact the he has not been benefited thereby$ there is no right to demand the thing or price th s ret rned. Art. 1*2-. 0hen a minor between eighteen and twenty/one years of age$ who has entered into a contract witho t the consent of the parent or g ardian$ %ol ntarily pays a s m of money or deli%ers a f ngible thing in f lfillment of the obligation$ there shall be no right to reco%er the same from the obligee who has spent or cons med it in good faith. (1166A) Art. 1*21. 0hen$ after an action to enforce a ci%il obligation has failed the defendant %ol ntarily performs the obligation$ he cannot demand the ret rn of what he has deli%ered or the payment of the %al e of the ser%ice he has rendered. Art. 1*24. 0hen a testate or intestate heir %ol ntarily pays a debt of the decedent e)ceeding the %al e of the property which he recei%ed by will or by the law of intestacy from the estate of the deceased$ the payment is %alid and cannot be rescinded by the payer. Art. 1*'6. 0hen a will is declared %oid beca se it has not been e)ec ted in accordance with the formalities re. ired by law$ b t one of the intestate heirs$ after the settlement of the debts of the deceased$ pays a legacy in compliance with a cla se in the defecti%e will$ the payment is effecti%e and irre%ocable.

Tit ! IV. " ESTOPPEL (n)

Art. 1*'1. Thro gh estoppel an admission or representation is rendered concl si%e pon the person making it$ and cannot be denied or dispro%ed as against the person relying thereon. Art. 1*'2. The principles of estoppel are hereby adopted insofar as they are not in conflict with the pro%isions of this &ode$ the &ode of &ommerce$ the + les of &o rt and special laws. Art. 1*''. 9stoppel may be in pais or by deed.

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Art. 1*'*. 0hen a person who is not the owner of a thing sells or alienates and deli%ers it$ and later the seller or grantor ac. ires title thereto$ s ch title passes by operation of law to the b yer or grantee. Art. 1*'5. (f a person in representation of another sells or alienates a thing$ the former cannot s bse. ently set p his own title as against the b yer or grantee. Art. 1*'6. A lessee or a bailee is estopped from asserting title to the thing leased or recei%ed$ as against the lessor or bailor. Art. 1*'-. 0hen in a contract between third persons concerning immo%able property$ one of them is misled by a person with respect to the ownership or real right o%er the real estate$ the latter is precl ded from asserting his legal title or interest therein$ pro%ided all these re. isites are present; (1) There m st be fra d lent representation or wrongf l concealment of facts known to the party estopped7 (2) The party precl ded m st intend that the other sho ld act misrepresented7 (') The party misled m st ha%e been naware of the tr e facts7 and (*) The party defra ded m st ha%e acted in accordance with the misrepresentation. Art. 1*'1. !ne who has allowed another to ass me apparent ownership of personal property for the p rpose of making any transfer of it$ cannot$ if he recei%ed the s m for which a pledge has been constit ted$ set p his own title to defeat the pledge of the property$ made by the other to a pledgee who recei%ed the same in good faith and for %al e. Art. 1*'4. 9stoppel is effecti%e only as between the parties thereto or their s ccessors in interest. pon the facts as

Tit ! V. " TRUSTS (n) CHAPTER # $ENERAL PROVISIONS

Art. 1**6. A person who establishes a tr st is called the tr stor7 one in whom confidence is reposed as regards property for the benefit of another person is known as the tr stee7 and the person for whose benefit the tr st has been created is referred to as the beneficiary. Art. 1**1. Tr sts are either e)press or implied. 9)press tr sts are created by the intention of the tr stor or of the parties. (mplied tr sts come into being by operation of law. Art. 1**2. The principles of the general law of tr sts$ insofar as they are not in conflict with this &ode$ the &ode of &ommerce$ the + les of &o rt and special laws are hereby adopted.

CHAPTER 2 E(PRESS TRUSTS

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Art. 1**'. 5o e)press tr sts concerning an immo%able or any interest therein may be pro%ed by parol e%idence. Art. 1***. 5o partic lar words are re. ired for the creation of an e)press tr st$ it being s fficient that a tr st is clearly intended. Art. 1**5. 5o tr st shall fail beca se the tr stee appointed declines the designation$ the contrary sho ld appear in the instr ment constit ting the tr st. nless

Art. 1**6. Acceptance by the beneficiary is necessary. 5e%ertheless$ if the tr st imposes no onero s condition pon the beneficiary$ his acceptance shall be pres med$ if there is no proof to the contrary.

CHAPTER 3 IMPLIED TRUSTS

Art. 1**-. The en meration of the following cases of implied tr st does not e)cl de others established by the general law of tr st$ b t the limitation laid down in Article 1**2 shall be applicable. Art. 1**1. There is an implied tr st when property is sold$ and the legal estate is granted to one party b t the price is paid by another for the p rpose of ha%ing the beneficial interest of the property. The former is the tr stee$ while the latter is the beneficiary. 8owe%er$ if the person to whom the title is con%eyed is a child$ legitimate or illegitimate$ of the one paying the price of the sale$ no tr st is implied by law$ it being disp tably pres med that there is a gift in fa%or of the child. Art. 1**4. There is also an implied tr st when a donation is made to a person b t it appears that altho gh the legal estate is transmitted to the donee$ he ne%ertheless is either to ha%e no beneficial interest or only a part thereof. Art. 1*56. (f the price of a sale of property is loaned or paid by one person for the benefit of another and the con%eyance is made to the lender or payor to sec re the payment of the debt$ a tr st arises by operation of law in fa%or of the person to whom the money is loaned or for whom its is paid. The latter may redeem the property and compel a con%eyance thereof to him. Art. 1*51. 0hen land passes by s ccession to any person and he ca ses the legal title to be p t in the name of another$ a tr st is established by implication of law for the benefit of the tr e owner. Art. 1*52. (f two or more persons agree to p rchase property and by common consent the legal title is taken in the name of one of them for the benefit of all$ a tr st is created by force of law in fa%or of the others in proportion to the interest of each. Art. 1*5'. 0hen property is con%eyed to a person in reliance pon his declared intention to hold it for$ or transfer it to another or the grantor$ there is an implied tr st in fa%or of the person whose benefit is contemplated. Art. 1*5*. (f an absol te con%eyance of property is made in order to sec re the performance of an obligation of the grantor toward the grantee$ a tr st by %irt e of law is established. (f

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the f lfillment of the obligation is offered by the grantor when it becomes d e$ he may demand the recon%eyance of the property to him. Art. 1*55. 0hen any tr stee$ g ardian or other person holding a fid ciary relationship ses tr st f nds for the p rchase of property and ca ses the con%eyance to be made to him or to a third person$ a tr st is established by operation of law in fa%or of the person to whom the f nds belong. Art. 1*56. (f property is ac. ired thro gh mistake or fra d$ the person obtaining it is$ by force of law$ considered a tr stee of an implied tr st for the benefit of the person from whom the property comes. Art. 1*5-. An implied tr st may be pro%ed by oral e%idence.

Tit ! VI. " SALES CHAPTER # NATURE AND FORM OF THE CONTRACT
Art. 1*51. Ay the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deli%er a determinate thing$ and the other to pay therefor a price certain in money or its e. i%alent. A contract of sale may be absol te or conditional. (1**5a) Art. 1*54. The thing m st be licit and the %endor m st ha%e a right to transfer the ownership thereof at the time it is deli%ered. (n) Art. 1*66. A thing is determinate when it is partic larly designated or physical segregated from all other of the same class. The re. isite that a thing be determinate is satisfied if at the time the contract is entered into$ the thing is capable of being made determinate witho t the necessity of a new or f rther agreement between the parties. (n) Art. 1*61. Things ha%ing a potential e)istence may be the ob,ect of the contract of sale. The efficacy of the sale of a mere hope or e)pectancy is deemed s b,ect to the condition that the thing will come into e)istence. The sale of a %ain hope or e)pectancy is %oid. (n) Art. 1*62. The goods which form the s b,ect of a contract of sale may be either e)isting goods$ owned or possessed by the seller$ or goods to be man fact red$ raised$ or ac. ired by the seller after the perfection of the contract of sale$ in this Title called Ffuture goods.F There may be a contract of sale of goods$ whose ac. isition by the seller depends contingency which may or may not happen. (n) Art. 1*6'. The sole owner of a thing may sell an ndi%ided interest therein. (n) pon a

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Art. 1*6*. (n the case of f ngible goods$ there may be a sale of an ndi%ided share of a specific mass$ tho gh the seller p rports to sell and the b yer to b y a definite n mber$ weight or meas re of the goods in the mass$ and tho gh the n mber$ weight or meas re of the goods in the mass is ndetermined. Ay s ch a sale the b yer becomes owner in common of s ch a share of the mass as the n mber$ weight or meas re bo ght bears to the n mber$ weight or meas re of the mass. (f the mass contains less than the n mber$ weight or meas re bo ght$ the b yer becomes the owner of the whole mass and the seller is bo nd to make good the deficiency from goods of the same kind and . ality$ nless a contrary intent appears. (n) Art. 1*65. Things s b,ect to a resol tory condition may be the ob,ect of the contract of sale. (n) Art. 1*66. (n constr ing a contract containing pro%isions characteristic of both the contract of sale and of the contract of agency to sell$ the essential cla ses of the whole instr ment shall be considered. (n) Art. 1*6-. A contract for the deli%ery at a certain price of an article which the %endor in the ordinary co rse of his b siness man fact res or proc res for the general market$ whether the same is on hand at the time or not$ is a contract of sale$ b t if the goods are to be man fact red specially for the c stomer and pon his special order$ and not for the general market$ it is a contract for a piece of work. (n) Art. 1*61. (f the consideration of the contract consists partly in money$ and partly in another thing$ the transaction shall be characteri#ed by the manifest intention of the parties. (f s ch intention does not clearly appear$ it shall be considered a barter if the %al e of the thing gi%en as a part of the consideration e)ceeds the amo nt of the money or its e. i%alent7 otherwise$ it is a sale. (1**6a) Art. 1*64. (n order that the price may be considered certain$ it shall be s fficient that it be so with reference to another thing certain$ or that the determination thereof be left to the , dgment of a special person or persons. ?ho ld s ch person or persons be nable or nwilling to fi) it$ the contract shall be inefficacio s$ nless the parties s bse. ently agree pon the price. (f the third person or persons acted in bad faith or by mistake$ the co rts may fi) the price. 0here s ch third person or persons are pre%ented from fi)ing the price or terms by fa lt of the seller or the b yer$ the party not in fa lt may ha%e s ch remedies against the party in fa lt as are allowed the seller or the b yer$ as the case may be. (1**-a) Art. 1*-6. "ross inade. acy of price does not affect a contract of sale$ e)cept as it may indicate a defect in the consent$ or that the parties really intended a donation or some other act or contract. (n) Art. 1*-1. (f the price is sim lated$ the sale is %oid$ b t the act may be shown to ha%e been in reality a donation$ or some other act or contract. (n) Art. 1*-2. The price of sec rities$ grain$ li. ids$ and other things shall also be considered certain$ when the price fi)ed is that which the thing sold wo ld ha%e on a definite day$ or in a partic lar e)change or market$ or when an amo nt is fi)ed abo%e or below the price on s ch day$ or in s ch e)change or market$ pro%ided said amo nt be certain. (1**1)

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Art. 1*-'. The fi)ing of the price can ne%er be left to the discretion of one of the contracting parties. 8owe%er$ if the price fi)ed by one of the parties is accepted by the other$ the sale is perfected. (1**4a) Art. 1*-*. 0here the price cannot be determined in accordance with the preceding articles$ or in any other manner$ the contract is inefficacio s. 8owe%er$ if the thing or any part thereof has been deli%ered to and appropriated by the b yer he m st pay a reasonable price therefor. 0hat is a reasonable price is a . estion of fact dependent on the circ mstances of each partic lar case. (n) Art. 1*-5. The contract of sale is perfected at the moment there is a meeting of minds pon the thing which is the ob,ect of the contract and pon the price. @rom that moment$ the parties may reciprocally demand performance$ s b,ect to the pro%isions of the law go%erning the form of contracts. (1*56a) Art. 1*-6. (n the case of a sale by a ction; (1) 0here goods are p t separate contract of sale. p for sale by a ction in lots$ each lot is the s b,ect of a

(2) A sale by a ction is perfected when the a ctioneer anno nces its perfection by the fall of the hammer$ or in other c stomary manner. >ntil s ch anno ncement is made$ any bidder may retract his bid7 and the a ctioneer may withdraw the goods from the sale nless the a ction has been anno nced to be witho t reser%e. (') A right to bid may be reser%ed e)pressly by or on behalf of the seller$ otherwise pro%ided by law or by stip lation. nless

(*) 0here notice has not been gi%en that a sale by a ction is s b,ect to a right to bid on behalf of the seller$ it shall not be lawf l for the seller to bid himself or to employ or ind ce any person to bid at s ch sale on his behalf or for the a ctioneer$ to employ or ind ce any person to bid at s ch sale on behalf of the seller or knowingly to take any bid from the seller or any person employed by him. Any sale contra%ening this r le may be treated as fra d lent by the b yer. (n) Art. 1*--. The ownership of the thing sold shall be transferred to the %endee pon the act al or constr cti%e deli%ery thereof. (n) Art. 1*-1. The parties may stip late that ownership in the thing shall not pass to the p rchaser ntil he has f lly paid the price. (n) Art. 1*-4. A promise to b y and sell a determinate thing for a price certain is reciprocally demandable. An accepted nilateral promise to b y or to sell a determinate thing for a price certain is binding pon the promissor if the promise is s pported by a consideration distinct from the price. (1*51a) Art. 1*16. Any in, ry to or benefit from the thing sold$ after the contract has been perfected$ from the moment of the perfection of the contract to the time of deli%ery$ shall be go%erned by Articles 116' to 1165$ and 1262.

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This r le shall apply to the sale of f ngible things$ made independently and for a single price$ or witho t consideration of their weight$ n mber$ or meas re. ?ho ld f ngible things be sold for a price fi)ed according to weight$ n mber$ or meas re$ the risk shall not be imp ted to the %endee ntil they ha%e been weighed$ co nted$ or meas red and deli%ered$ nless the latter has inc rred in delay. (1*52a) Art. 1*11. (n the contract of sale of goods by description or by sample$ the contract may be rescinded if the b lk of the goods deli%ered do not correspond with the description or the sample$ and if the contract be by sample as well as description$ it is not s fficient that the b lk of goods correspond with the sample if they do not also correspond with the description. The b yer shall ha%e a reasonable opport nity of comparing the b lk with the description or the sample. (n) Art. 1*12. 0hene%er earnest money is gi%en in a contract of sale$ it shall be considered as part of the price and as proof of the perfection of the contract. (1*5*a) Art. 1*1'. ? b,ect to the pro%isions of the ?tat te of @ra ds and of any other applicable stat te$ a contract of sale may be made in writing$ or by word of mo th$ or partly in writing and partly by word of mo th$ or may be inferred from the cond ct of the parties. (n) Art. 1*1*. (n a contract of sale of personal property the price of which is payable in installments$ the %endor may e)ercise any of the following remedies; (1) 9)act f lfillment of the obligation$ sho ld the %endee fail to pay7 (2) &ancel the sale$ sho ld the %endee:s fail re to pay co%er two or more installments7 (') @oreclose the chattel mortgage on the thing sold$ if one has been constit ted$ sho ld the %endee:s fail re to pay co%er two or more installments. (n this case$ he shall ha%e no f rther action against the p rchaser to reco%er any npaid balance of the price. Any agreement to the contrary shall be %oid. (1*5*/A/a) Art. 1*15. The preceding article shall be applied to contracts p rporting to be leases of personal property with option to b y$ when the lessor has depri%ed the lessee of the possession or en,oyment of the thing. (1*5*/A/a) Art. 1*16. (n the case referred to in two preceding articles$ a stip lation that the installments or rents paid shall not be ret rned to the %endee or lessee shall be %alid insofar as the same may not be nconscionable nder the circ mstances. (n) Art. 1*1-. The e)penses for the e)ec tion and registration of the sale shall be borne by the %endor$ nless there is a stip lation to the contrary. (1*55a) Art. 1*11. The e)propriation of property for p blic se is go%erned by special laws. (1*56)

CHAPTER 2 CAPACITY TO BUY OR SELL

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Art. 1*14. All persons who are a thori#ed in this &ode to obligate themsel%es$ may enter into a contract of sale$ sa%ing the modifications contained in the following articles. 0here necessaries are those sold and deli%ered to a minor or other person witho t capacity to act$ he m st pay a reasonable price therefor. 5ecessaries are those referred to in Article 246. (1*5-a) Art. 1*46. The h sband and the wife cannot sell property to each other$ e)cept; (1) 0hen a separation of property was agreed pon in the marriage settlements7 or (2) 0hen there has been a , dicial separation or property nder Article 141. (1*51a) Art. 1*41. The following persons cannot ac. ire by p rchase$ e%en at a p blic or , dicial a ction$ either in person or thro gh the mediation of another; (1) The g ardian$ the property of the person or persons who may be nder his g ardianship7 (2) Agents$ the property whose administration or sale may ha%e been entr sted to them$ nless the consent of the principal has been gi%en7 (') 9)ec tors and administrators$ the property of the estate nder administration7 (*) 3 blic officers and employees$ the property of the ?tate or of any s bdi%ision thereof$ or of any go%ernment/owned or controlled corporation$ or instit tion$ the administration of which has been intr sted to them7 this pro%ision shall apply to , dges and go%ernment e)perts who$ in any manner whatsoe%er$ take part in the sale7 (5) 2 stices$ , dges$ prosec ting attorneys$ clerks of s perior and inferior co rts$ and other officers and employees connected with the administration of , stice$ the property and rights in litigation or le%ied pon an e)ec tion before the co rt within whose , risdiction or territory they e)ercise their respecti%e f nctions7 this prohibition incl des the act of ac. iring by assignment and shall apply to lawyers$ with respect to the property and rights which may be the ob,ect of any litigation in which they may take part by %irt e of their profession. (6) Any others specially dis. alified by law. (1*54a) Art. 1*42. The prohibitions in the two preceding articles are applicable to sales in legal redemption$ compromises and ren nciations. (n)

CHAPTER 3 EFFECTS OF THE CONTRACT WHEN THE THIN$ SOLD HAS BEEN LOST
Art. 1*4'. (f at the time the contract of sale is perfected$ the thing which is the ob,ect of the contract has been entirely lost$ the contract shall be witho t any effect. A t if the thing sho ld ha%e been lost in part only$ the %endee may choose between withdrawing from the contract and demanding the remaining part$ paying its price in proportion to the total s m agreed pon. (1*66a)

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Art. 1*4*. 0here the parties p rport a sale of specific goods$ and the goods witho t the knowledge of the seller ha%e perished in part or ha%e wholly or in a material part so deteriorated in . ality as to be s bstantially changed in character$ the b yer may at his option treat the sale; (1) As a%oided7 or (2) As %alid in all of the e)isting goods or in so m ch thereof as ha%e not deteriorated$ and as binding the b yer to pay the agreed price for the goods in which the ownership will pass$ if the sale was di%isible. (n)

CHAPTER ) OBLI$ATIONS OF THE VENDOR SECTION #. " $!n!*+ P*,-i.i,n.

Art. 1*45. The %endor is bo nd to transfer the ownership of and deli%er$ as well as warrant the thing which is the ob,ect of the sale. (1*61a) Art. 1*46. The ownership of the thing sold is ac. ired by the %endee from the moment it is deli%ered to him in any of the ways specified in Articles 1*4- to 1561$ or in any other manner signifying an agreement that the possession is transferred from the %endor to the %endee. (n)

SECTION 2. " D! i-!*3 ,4 t5! T5in7 S, 8

Art. 1*4-. The thing sold shall be nderstood as deli%ered$ when it is placed in the control and possession of the %endee. (1*62a) Art. 1*41. 0hen the sale is made thro gh a p blic instr ment$ the e)ec tion thereof shall be e. i%alent to the deli%ery of the thing which is the ob,ect of the contract$ if from the deed the contrary does not appear or cannot clearly be inferred. 0ith regard to mo%able property$ its deli%ery may also be made by the deli%ery of the keys of the place or depository where it is stored or kept. (1*6'a) Art. 1*44. The deli%ery of mo%able property may likewise be made by the mere consent or agreement of the contracting parties$ if the thing sold cannot be transferred to the possession of the %endee at the time of the sale$ or if the latter already had it in his possession for any other reason. (1*6'a) Art. 1566. There may also be tradition constitutum possessorium. (n)

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Art. 1561. 0ith respect to incorporeal property$ the pro%isions of the first paragraph of article 1*41 shall go%ern. (n any other case wherein said pro%isions are not applicable$ the placing of the titles of ownership in the possession of the %endee or the se by the %endee of his rights$ with the %endor:s consent$ shall be nderstood as a deli%ery. (1*6*) Art. 1562. 0hen goods are deli%ered to the b yer "on sale or return" to gi%e the b yer an option to ret rn the goods instead of paying the price$ the ownership passes to the b yer of deli%ery$ b t he may re%est the ownership in the seller by ret rning or tendering the goods within the time fi)ed in the contract$ or$ if no time has been fi)ed$ within a reasonable time. (n) 0hen goods are deli%ered to the b yer on appro%al or on trial or on satisfaction$ or other similar terms$ the ownership therein passes to the b yer; (1) 0hen he signifies his appro%al or acceptance to the seller or does any other act adopting the transaction7 (2) (f he does not signify his appro%al or acceptance to the seller$ b t retains the goods witho t gi%ing notice of re,ection$ then if a time has been fi)ed for the ret rn of the goods$ on the e)piration of s ch time$ and$ if no time has been fi)ed$ on the e)piration of a reasonable time. 0hat is a reasonable time is a . estion of fact. (n) Art. 156'. 0hen there is a contract of sale of specific goods$ the seller may$ by the terms of the contract$ reser%e the right of possession or ownership in the goods ntil certain conditions ha%e been f lfilled. The right of possession or ownership may be th s reser%ed notwithstanding the deli%ery of the goods to the b yer or to a carrier or other bailee for the p rpose of transmission to the b yer. 0here goods are shipped$ and by the bill of lading the goods are deli%erable to the seller or his agent$ or to the order of the seller or of his agent$ the seller thereby reser%es the ownership in the goods. A t$ if e)cept for the form of the bill of lading$ the ownership wo ld ha%e passed to the b yer on shipment of the goods$ the seller:s property in the goods shall be deemed to be only for the p rpose of sec ring performance by the b yer of his obligations nder the contract. 0here goods are shipped$ and by the bill of lading the goods are deli%erable to order of the b yer or of his agent$ b t possession of the bill of lading is retained by the seller or his agent$ the seller thereby reser%es a right to the possession of the goods as against the b yer. 0here the seller of goods draws on the b yer for the price and transmits the bill of e)change and bill of lading together to the b yer to sec re acceptance or payment of the bill of e)change$ the b yer is bo nd to ret rn the bill of lading if he does not honor the bill of e)change$ and if he wrongf lly retains the bill of lading he ac. ires no added right thereby. (f$ howe%er$ the bill of lading pro%ides that the goods are deli%erable to the b yer or to the order of the b yer$ or is indorsed in blank$ or to the b yer by the consignee named therein$ one who p rchases in good faith$ for %al e$ the bill of lading$ or goods from the b yer will obtain the ownership in the goods$ altho gh the bill of e)change has not been honored$ pro%ided that s ch p rchaser has recei%ed deli%ery of the bill of lading indorsed by the consignee named therein$ or of the goods$ witho t notice of the facts making the transfer wrongf l. (n)

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Art. 156*. >nless otherwise agreed$ the goods remain at the seller:s risk ntil the ownership therein is transferred to the b yer$ b t when the ownership therein is transferred to the b yer the goods are at the b yer:s risk whether act al deli%ery has been made or not$ e)cept that; (1) 0here deli%ery of the goods has been made to the b yer or to a bailee for the b yer$ in p rs ance of the contract and the ownership in the goods has been retained by the seller merely to sec re performance by the b yer of his obligations nder the contract$ the goods are at the b yer:s risk from the time of s ch deli%ery7 (2) 0here act al deli%ery has been delayed thro gh the fa lt of either the b yer or seller the goods are at the risk of the party in fa lt. (n) Art. 1565. ? b,ect to the pro%isions of this Title$ where goods are sold by a person who is not the owner thereof$ and who does not sell them nder a thority or with the consent of the owner$ the b yer ac. ires no better title to the goods than the seller had$ nless the owner of the goods is by his cond ct precl ded from denying the seller:s a thority to sell. 5othing in this Title$ howe%er$ shall affect; (1) The pro%isions of any factors: act$ recording laws$ or any other pro%ision of law enabling the apparent owner of goods to dispose of them as if he were the tr e owner thereof7 (2) The %alidity of any contract of sale nder stat tory power of sale or order of a co rt of competent , risdiction7 nder the

(') 3 rchases made in a merchant:s store$ or in fairs$ or markets$ in accordance with the &ode of &ommerce and special laws. (n) Art. 1566. 0here the seller of goods has a %oidable title thereto$ b t his title has not been a%oided at the time of the sale$ the b yer ac. ires a good title to the goods$ pro%ided he b ys them in good faith$ for %al e$ and witho t notice of the seller:s defect of title. (n) Art. 156-. A doc ment of title in which it is stated that the goods referred to therein will be deli%ered to the bearer$ or to the order of any person named in s ch doc ment is a negotiable doc ment of title. (n) Art. 1561. A negotiable doc ment of title may be negotiated by deli%ery; (1) 0here by the terms of the doc ment the carrier$ wareho seman or other bailee iss ing the same ndertakes to deli%er the goods to the bearer7 or (2) 0here by the terms of the doc ment the carrier$ wareho seman or other bailee iss ing the same ndertakes to deli%er the goods to the order of a specified person$ and s ch person or a s bse. ent endorsee of the doc ment has indorsed it in blank or to the bearer. 0here by the terms of a negotiable doc ment of title the goods are deli%erable to bearer or where a negotiable doc ment of title has been indorsed in blank or to bearer$ any holder may indorse the same to himself or to any specified person$ and in s ch case the doc ment shall thereafter be negotiated only by the endorsement of s ch endorsee. (n)

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Art. 1564. A negotiable doc ment of title may be negotiated by the endorsement of the person to whose order the goods are by the terms of the doc ment deli%erable. ? ch endorsement may be in blank$ to bearer or to a specified person. (f indorsed to a specified person$ it may be again negotiated by the endorsement of s ch person in blank$ to bearer or to another specified person. ? bse. ent negotiations may be made in like manner. (n) Art. 1516. (f a doc ment of title which contains an ndertaking by a carrier$ wareho seman or other bailee to deli%er the goods to bearer$ to a specified person or order of a specified person or which contains words of like import$ has placed pon it the words "not negotiable," "non-negotiable" or the like$ s ch doc ment may ne%ertheless be negotiated by the holder and is a negotiable doc ment of title within the meaning of this Title. A t nothing in this Title contained shall be constr ed as limiting or defining the effect pon the obligations of the carrier$ wareho seman$ or other bailee iss ing a doc ment of title or placing thereon the words "not negotiable," "non-negotiable," or the like. (n) Art. 1511. A doc ment of title which is not in s ch form that it can be negotiated by deli%ery may be transferred by the holder by deli%ery to a p rchaser or donee. A non/negotiable doc ment cannot be negotiated and the endorsement of s ch a doc ment gi%es the transferee no additional right. (n) Art. 1512. A negotiable doc ment of title may be negotiated; (1) Ay the owner therefor7 or (2) Ay any person to whom the possession or c stody of the doc ment has been entr sted by the owner$ if$ by the terms of the doc ment the bailee iss ing the doc ment ndertakes to deli%er the goods to the order of the person to whom the possession or c stody of the doc ment has been entr sted$ or if at the time of s ch entr sting the doc ment is in s ch form that it may be negotiated by deli%ery. (n) Art. 151'. A person to whom a negotiable doc ment of title has been d ly negotiated ac. ires thereby; (1) ? ch title to the goods as the person negotiating the doc ment to him had or had ability to con%ey to a p rchaser in good faith for %al e and also s ch title to the goods as the person to whose order the goods were to be deli%ered by the terms of the doc ment had or had ability to con%ey to a p rchaser in good faith for %al e7 and (2) The direct obligation of the bailee iss ing the doc ment to hold possession of the goods for him according to the terms of the doc ment as f lly as if s ch bailee had contracted directly with him. (n) Art. 151*. A person to whom a doc ment of title has been transferred$ b t not negotiated$ ac. ires thereby$ as against the transferor$ the title to the goods$ s b,ect to the terms of any agreement with the transferor. (f the doc ment is non/negotiable$ s ch person also ac. ires the right to notify the bailee who iss ed the doc ment of the transfer thereof$ and thereby to ac. ire the direct obligation of s ch bailee to hold possession of the goods for him according to the terms of the doc ment. 3rior to the notification to s ch bailee by the transferor or transferee of a non/negotiable doc ment of title$ the title of the transferee to the goods and the right to ac. ire the obligation of s ch bailee may be defeated by the le%y of an attachment of e)ec tion pon

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the goods by a creditor of the transferor$ or by a notification to s ch bailee by the transferor or a s bse. ent p rchaser from the transfer of a s bse. ent sale of the goods by the transferor. (n) Art. 1515. 0here a negotiable doc ment of title is transferred for %al e by deli%ery$ and the endorsement of the transferor is essential for negotiation$ the transferee ac. ires a right against the transferor to compel him to endorse the doc ment nless a contrary intention appears. The negotiation shall take effect as of the time when the endorsement is act ally made. (n) Art. 1516. A person who for %al e negotiates or transfers a doc ment of title by endorsement or deli%ery$ incl ding one who assigns for %al e a claim sec red by a doc ment of title nless a contrary intention appears$ warrants; (1) That the doc ment is gen ine7 (2) That he has a legal right to negotiate or transfer it7 (') That he has knowledge of no fact which wo ld impair the %alidity or worth of the doc ment7 and (*) That he has a right to transfer the title to the goods and that the goods are merchantable or fit for a partic lar p rpose$ whene%er s ch warranties wo ld ha%e been implied if the contract of the parties had been to transfer witho t a doc ment of title the goods represented thereby. (n) Art. 151-. The endorsement of a doc ment of title shall not make the endorser liable for any fail re on the part of the bailee who iss ed the doc ment or pre%io s endorsers thereof to f lfill their respecti%e obligations. (n) Art. 1511. The %alidity of the negotiation of a negotiable doc ment of title is not impaired by the fact that the negotiation was a breach of d ty on the part of the person making the negotiation$ or by the fact that the owner of the doc ment was depri%ed of the possession of the same by loss$ theft$ fra d$ accident$ mistake$ d ress$ or con%ersion$ if the person to whom the doc ment was negotiated or a person to whom the doc ment was s bse. ently negotiated paid %al e therefor in good faith witho t notice of the breach of d ty$ or loss$ theft$ fra d$ accident$ mistake$ d ress or con%ersion. (n) Art. 1514. (f goods are deli%ered to a bailee by the owner or by a person whose act in con%eying the title to them to a p rchaser in good faith for %al e wo ld bind the owner and a negotiable doc ment of title is iss ed for them they cannot thereafter$ while in possession of s ch bailee$ be attached by garnishment or otherwise or be le%ied nder an e)ec tion nless the doc ment be first s rrendered to the bailee or its negotiation en,oined. The bailee shall in no case be compelled to deli%er p the act al possession of the goods ntil the doc ment is s rrendered to him or impo nded by the co rt. (n) Art. 1526. A creditor whose debtor is the owner of a negotiable doc ment of title shall be entitled to s ch aid from co rts of appropriate , risdiction by in, nction and otherwise in attaching s ch doc ment or in satisfying the claim by means thereof as is allowed at law or in e. ity in regard to property which cannot readily be attached or le%ied pon by ordinary legal process. (n)

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Art. 1521. 0hether it is for the b yer to take possession of the goods or of the seller to send them to the b yer is a . estion depending in each case on the contract$ e)press or implied$ between the parties. Apart from any s ch contract$ e)press or implied$ or sage of trade to the contrary$ the place of deli%ery is the seller:s place of b siness if he has one$ and if not his residence7 b t in case of a contract of sale of specific goods$ which to the knowledge of the parties when the contract or the sale was made were in some other place$ then that place is the place of deli%ery. 0here by a contract of sale the seller is bo nd to send the goods to the b yer$ b t no time for sending them is fi)ed$ the seller is bo nd to send them within a reasonable time. 0here the goods at the time of sale are in the possession of a third person$ the seller has not f lfilled his obligation to deli%er to the b yer nless and ntil s ch third person acknowledges to the b yer that he holds the goods on the b yer:s behalf. Bemand or tender of deli%ery may be treated as ineffect al ho r. 0hat is a reasonable ho r is a . estion of fact. nless made at a reasonable

>nless otherwise agreed$ the e)penses of and incidental to p tting the goods into a deli%erable state m st be borne by the seller. (n) Art. 1522. 0here the seller deli%ers to the b yer a . antity of goods less than he contracted to sell$ the b yer may re,ect them$ b t if the b yer accepts or retains the goods so deli%ered$ knowing that the seller is not going to perform the contract in f ll$ he m st pay for them at the contract rate. (f$ howe%er$ the b yer has sed or disposed of the goods deli%ered before he knows that the seller is not going to perform his contract in f ll$ the b yer shall not be liable for more than the fair %al e to him of the goods so recei%ed. 0here the seller deli%ers to the b yer a . antity of goods larger than he contracted to sell$ the b yer may accept the goods incl ded in the contract and re,ect the rest. (f the b yer accepts the whole of the goods so deli%ered he m st pay for them at the contract rate. 0here the seller deli%ers to the b yer the goods he contracted to sell mi)ed with goods of a different description not incl ded in the contract$ the b yer may accept the goods which are in accordance with the contract and re,ect the rest. (n the preceding two paragraphs$ if the s b,ect matter is indi%isible$ the b yer may re,ect the whole of the goods. The pro%isions of this article are s b,ect to any sage of trade$ special agreement$ or co rse of dealing between the parties. (n) Art. 152'. 0here$ in p rs ance of a contract of sale$ the seller is a thori#ed or re. ired to send the goods to the b yer$ deli%ery of the goods to a carrier$ whether named by the b yer or not$ for the p rpose of transmission to the b yer is deemed to be a deli%ery of the goods to the b yer$ e)cept in the case pro%ided for in Article 156'$ first$ second and third paragraphs$ or nless a contrary intent appears. >nless otherwise a thori#ed by the b yer$ the seller m st make s ch contract with carrier on behalf of the b yer as may be reasonable$ ha%ing regard to the nat re of goods and the other circ mstances of the case. (f the seller omit so to do$ and the goods lost or damaged in co rse of transit$ the b yer may decline to treat the deli%ery to carrier as a deli%ery to himself$ or may hold the seller responsible in damages. the the are the

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>nless otherwise agreed$ where goods are sent by the seller to the b yer nder circ mstances in which the seller knows or o ght to know that it is s al to ins re$ the seller m st gi%e s ch notice to the b yer as may enable him to ins re them d ring their transit$ and$ if the seller fails to do so$ the goods shall be deemed to be at his risk d ring s ch transit. (n) Art. 152*. The %endor shall not be bo nd to deli%er the thing sold$ if the %endee has not paid him the price$ or if no period for the payment has been fi)ed in the contract. (1*66) Art. 1525. The seller of goods is deemed to be an Title; npaid seller within the meaning of this

(1) 0hen the whole of the price has not been paid or tendered7 (2) 0hen a bill of e)change or other negotiable instr ment has been recei%ed as conditional payment$ and the condition on which it was recei%ed has been broken by reason of the dishonor of the instr ment$ the insol%ency of the b yer$ or otherwise. (n Articles 1525 to 15'5 the term "seller" incl des an agent of the seller to whom the bill of lading has been indorsed$ or a consignor or agent who has himself paid$ or is directly responsible for the price$ or any other person who is in the position of a seller. (n) Art. 1526. ? b,ect to the pro%isions of this Title$ notwithstanding that the ownership in the goods may ha%e passed to the b yer$ the npaid seller of goods$ as s ch$ has; (1) A lien on the goods or right to retain them for the price while he is in possession of them7 (2) (n case of the insol%ency of the b yer$ a right of stopping the goods in transit after he has parted with the possession of them7 (') A right of resale as limited by this Title7 (*) A right to rescind the sale as likewise limited by this Title. 0here the ownership in the goods has not passed to the b yer$ the npaid seller has$ in addition to his other remedies a right of withholding deli%ery similar to and coe)tensi%e with his rights of lien and stoppage in transit where the ownership has passed to the b yer. (n) Art. 152-. ? b,ect to the pro%isions of this Title$ the npaid seller of goods who is in possession of them is entitled to retain possession of them ntil payment or tender of the price in the following cases$ namely; (1) 0here the goods ha%e been sold witho t any stip lation as to credit7 (2) 0here the goods ha%e been sold on credit$ b t the term of credit has e)pired7 (') 0here the b yer becomes insol%ent. The seller may e)ercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the b yer. (n)

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Art. 1521. 0here an npaid seller has made part deli%ery of the goods$ he may e)ercise his right of lien on the remainder$ nless s ch part deli%ery has been made nder s ch circ mstances as to show an intent to wai%e the lien or right of retention. (n) Art. 1524. The npaid seller of goods loses his lien thereon; (1) 0hen he deli%ers the goods to a carrier or other bailee for the p rpose of transmission to the b yer witho t reser%ing the ownership in the goods or the right to the possession thereof7 (2) 0hen the b yer or his agent lawf lly obtains possession of the goods7 (') Ay wai%er thereof. The npaid seller of goods$ ha%ing a lien thereon$ does not lose his lien by reason only that he has obtained , dgment or decree for the price of the goods. (n) Art. 15'6. ? b,ect to the pro%isions of this Title$ when the b yer of goods is or becomes insol%ent$ the npaid seller who has parted with the possession of the goods has the right of stopping them in transit $ that is to say$ he may res me possession of the goods at any time while they are in transit$ and he will then become entitled to the same rights in regard to the goods as he wo ld ha%e had if he had ne%er parted with the possession. (n) Art. 15'1. "oods are in transit within the meaning of the preceding article; (1) @rom the time when they are deli%ered to a carrier by land$ water$ or air$ or other bailee for the p rpose of transmission to the b yer$ ntil the b yer$ or his agent in that behalf$ takes deli%ery of them from s ch carrier or other bailee7 (2) (f the goods are re,ected by the b yer$ and the carrier or other bailee contin es in possession of them$ e%en if the seller has ref sed to recei%e them back. "oods are no longer in transit within the meaning of the preceding article; (1) (f the b yer$ or his agent in that behalf$ obtains deli%ery of the goods before their arri%al at the appointed destination7 (2) (f$ after the arri%al of the goods at the appointed destination$ the carrier or other bailee acknowledges to the b yer or his agent that he holds the goods on his behalf and contin es in possession of them as bailee for the b yer or his agent7 and it is immaterial that f rther destination for the goods may ha%e been indicated by the b yer7 (') (f the carrier or other bailee wrongf lly ref ses to deli%er the goods to the b yer or his agent in that behalf. (f the goods are deli%ered to a ship$ freight train$ tr ck$ or airplane chartered by the b yer$ it is a . estion depending on the circ mstances of the partic lar case$ whether they are in the possession of the carrier as s ch or as agent of the b yer. (f part deli%ery of the goods has been made to the b yer$ or his agent in that behalf$ the remainder of the goods may be stopped in transit $ nless s ch part deli%ery has been

65

nder s ch circ mstances as to show an agreement with the b yer to gi%e p possession of the whole of the goods. (n) Art. 15'2. The npaid seller may e)ercise his right of stoppage in transit either by obtaining act al possession of the goods or by gi%ing notice of his claim to the carrier or other bailee in whose possession the goods are. ? ch notice may be gi%en either to the person in act al possession of the goods or to his principal. (n the latter case the notice$ to be effect al$ m st be gi%en at s ch time and nder s ch circ mstances that the principal$ by the e)ercise of reasonable diligence$ may pre%ent a deli%ery to the b yer. 0hen notice of stoppage in transit is gi%en by the seller to the carrier$ or other bailee in possession of the goods$ he m st redeli%er the goods to$ or according to the directions of$ the seller. The e)penses of s ch deli%ery m st be borne by the seller. (f$ howe%er$ a negotiable doc ment of title representing the goods has been iss ed by the carrier or other bailee$ he shall not obliged to deli%er or , stified in deli%ering the goods to the seller nless s ch doc ment is first s rrendered for cancellation. (n) Art. 15''. 0here the goods are of perishable nat re$ or where the seller e)pressly reser%es the right of resale in case the b yer sho ld make defa lt$ or where the b yer has been in defa lt in the payment of the price for an nreasonable time$ an npaid seller ha%ing a right of lien or ha%ing stopped the goods in transit may resell the goods. 8e shall not thereafter be liable to the original b yer pon the contract of sale or for any profit made by s ch resale$ b t may reco%er from the b yer damages for any loss occasioned by the breach of the contract of sale. 0here a resale is made$ as a thori#ed in this article$ the b yer ac. ires a good title as against the original b yer. (t is not essential to the %alidity of resale that notice of an intention to resell the goods be gi%en by the seller to the original b yer. A t where the right to resell is not based on the perishable nat re of the goods or pon an e)press pro%ision of the contract of sale$ the gi%ing or fail re to gi%e s ch notice shall be rele%ant in any iss e in%ol%ing the . estion whether the b yer had been in defa lt for an nreasonable time before the resale was made. (t is not essential to the %alidity of a resale that notice of the time and place of s ch resale sho ld be gi%en by the seller to the original b yer. The seller is bo nd to e)ercise reasonable care and , dgment in making a resale$ and s b,ect to this re. irement may make a resale either by p blic or pri%ate sale. 8e cannot$ howe%er$ directly or indirectly b y the goods. (n) Art. 15'*. An npaid seller ha%ing the right of lien or ha%ing stopped the goods in transit $ may rescind the transfer of title and res me the ownership in the goods$ where he e)pressly reser%ed the right to do so in case the b yer sho ld make defa lt$ or where the b yer has been in defa lt in the payment of the price for an nreasonable time. The seller shall not thereafter be liable to the b yer pon the contract of sale$ b t may reco%er from the b yer damages for any loss occasioned by the breach of the contract. The transfer of title shall not be held to ha%e been rescinded by an npaid seller ntil he has manifested by notice to the b yer or by some other o%ert act an intention to rescind. (t is not necessary that s ch o%ert act sho ld be comm nicated to the b yer$ b t the gi%ing or fail re to gi%e notice to the b yer of the intention to rescind shall be rele%ant in any iss e

65

in%ol%ing the . estion whether the b yer had been in defa lt for an before the right of rescission was asserted. (n)

nreasonable time

Art. 15'5. ? b,ect to the pro%isions of this Title$ the npaid seller:s right of lien or stoppage in transit is not affected by any sale$ or other disposition of the goods which the b yer may ha%e made$ nless the seller has assented thereto. (f$ howe%er$ a negotiable doc ment of title has been iss ed for goods$ no seller:s lien or right of stoppage in transit shall defeat the right of any p rchaser for %al e in good faith to whom s ch doc ment has been negotiated$ whether s ch negotiation be prior or s bse. ent to the notification to the carrier$ or other bailee who iss ed s ch doc ment$ of the seller:s claim to a lien or right of stoppage in transit . (n) Art. 15'6. The %endor is not bo nd to deli%er the thing sold in case the %endee sho ld lose the right to make se of the terms as pro%ided in Article 1141. (1*6-a) Art. 15'-. The %endor is bo nd to deli%er the thing sold and its accessions and accessories in the condition in which they were pon the perfection of the contract. All the fr its shall pertain to the %endee from the day on which the contract was perfected. (1*61a) Art. 15'1. (n case of loss$ deterioration or impro%ement of the thing before its deli%ery$ the r les in Article 1114 shall be obser%ed$ the %endor being considered the debtor. (n) Art. 15'4. The obligation to deli%er the thing sold incl des that of placing in the control of the %endee all that is mentioned in the contract$ in conformity with the following r les; (f the sale of real estate sho ld be made with a statement of its area$ at the rate of a certain price for a nit of meas re or n mber$ the %endor shall be obliged to deli%er to the %endee$ if the latter sho ld demand it$ all that may ha%e been stated in the contract7 b t$ sho ld this be not possible$ the %endee may choose between a proportional red ction of the price and the rescission of the contract$ pro%ided that$ in the latter case$ the lack in the area be not less than one/tenth of that stated. The same shall be done$ e%en when the area is the same$ if any part of the immo%able is not of the . ality specified in the contract. The rescission$ in this case$ shall only take place at the will of the %endee$ when the inferior %al e of the thing sold e)ceeds one/tenth of the price agreed pon. 5e%ertheless$ if the %endee wo ld not ha%e bo ght the immo%able had he known of its smaller area of inferior . ality$ he may rescind the sale. (1*64a) Art. 15*6. (f$ in the case of the preceding article$ there is a greater area or n mber in the immo%able than that stated in the contract$ the %endee may accept the area incl ded in the contract and re,ect the rest. (f he accepts the whole area$ he m st pay for the same at the contract rate. (1*-6a) Art. 15*1. The pro%isions of the two preceding articles shall apply to , dicial sales. (n)

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Art. 15*2. (n the sale of real estate$ made for a l mp s m and not at the rate of a certain s m for a nit of meas re or n mber$ there shall be no increase or decrease of the price$ altho gh there be a greater or less area or n mber than that stated in the contract. The same r le shall be applied when two or more immo%able as sold for a single price7 b t if$ besides mentioning the bo ndaries$ which is indispensable in e%ery con%eyance of real estate$ its area or n mber sho ld be designated in the contract$ the %endor shall be bo nd to deli%er all that is incl ded within said bo ndaries$ e%en when it e)ceeds the area or n mber specified in the contract7 and$ sho ld he not be able to do so$ he shall s ffer a red ction in the price$ in proportion to what is lacking in the area or n mber$ nless the contract is rescinded beca se the %endee does not accede to the fail re to deli%er what has been stip lated. (1*-1) Art. 15*'. The actions arising from Articles 15'4 and 15*2 shall prescribe in si) months$ co nted from the day of deli%ery. (1*-2a) Art. 15**. (f the same thing sho ld ha%e been sold to different %endees$ the ownership shall be transferred to the person who may ha%e first taken possession thereof in good faith$ if it sho ld be mo%able property. ?ho ld it be immo%able property$ the ownership shall belong to the person ac. iring it who in good faith first recorded it in the +egistry of 3roperty. ?ho ld there be no inscription$ the ownership shall pertain to the person who in good faith was first in the possession7 and$ in the absence thereof$ to the person who presents the oldest title$ pro%ided there is good faith. (1*-')

SECTION 3. " C,n8iti,n. +n8 W+**+nti!.

Art. 15*5. 0here the obligation of either party to a contract of sale is s b,ect to any condition which is not performed$ s ch party may ref se to proceed with the contract or he may wai%e performance of the condition. (f the other party has promised that the condition sho ld happen or be performed$ s ch first mentioned party may also treat the nonperformance of the condition as a breach of warranty. 0here the ownership in the thing has not passed$ the b yer may treat the f lfillment by the seller of his obligation to deli%er the same as described and as warranted e)pressly or by implication in the contract of sale as a condition of the obligation of the b yer to perform his promise to accept and pay for the thing. (n) Art. 15*6. Any affirmation of fact or any promise by the seller relating to the thing is an e)press warranty if the nat ral tendency of s ch affirmation or promise is to ind ce the b yer to p rchase the same$ and if the b yer p rchase the thing relying thereon. 5o affirmation of the %al e of the thing$ nor any statement p rporting to be a statement of the seller:s opinion only$ shall be constr ed as a warranty$ nless the seller made s ch affirmation or statement as an e)pert and it was relied pon by the b yer. (n) Art. 15*-. (n a contract of sale$ nless a contrary intention appears$ there is; (1) An implied warranty on the part of the seller that he has a right to sell the thing at the time when the ownership is to pass$ and that the b yer shall from that time ha%e and en,oy the legal and peacef l possession of the thing7

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(2) An implied warranty that the thing shall be free from any hidden fa lts or defects$ or any charge or enc mbrance not declared or known to the b yer. This Article shall not$ howe%er$ be held to render liable a sheriff$ a ctioneer$ mortgagee$ pledgee$ or other person professing to sell by %irt e of a thority in fact or law$ for the sale of a thing in which a third person has a legal or e. itable interest. (n)

SUBSECTION #. " W+**+nt3 in C+.! ,4 E-i0ti,n

Art. 15*1. 9%iction shall take place whene%er by a final , dgment based on a right prior to the sale or an act imp table to the %endor$ the %endee is depri%ed of the whole or of a part of the thing p rchased. The %endor shall answer for the e%iction e%en tho gh nothing has been said in the contract on the s b,ect. The contracting parties$ howe%er$ may increase$ diminish$ or s ppress this legal obligation of the %endor. (1*-5a) Art. 15*4. The %endee need not appeal from the decision in order that the %endor may become liable for e%iction. (n) Art. 1556. 0hen ad%erse possession had been commenced before the sale b t the prescripti%e period is completed after the transfer$ the %endor shall not be liable for e%iction. (n) Art. 1551. (f the property is sold for nonpayment of ta)es d e and not made known to the %endee before the sale$ the %endor is liable for e%iction. (n) Art. 1552. The , dgment debtor is also responsible for e%iction in , dicial sales$ otherwise decreed in the , dgment. (n) nless it is

Art. 155'. Any stip lation e)empting the %endor from the obligation to answer for e%iction shall be %oid$ if he acted in bad faith. (1*-6) Art. 155*. (f the %endee has reno nced the right to warranty in case of e%iction$ and e%iction sho ld take place$ the %endor shall only pay the %al e which the thing sold had at the time of the e%iction. ?ho ld the %endee ha%e made the wai%er with knowledge of the risks of e%iction and ass med its conse. ences$ the %endor shall not be liable. (1*--) Art. 1555. 0hen the warranty has been agreed pon or nothing has been stip lated on this point$ in case e%iction occ rs$ the %endee shall ha%e the right to demand of the %endor; (1) The ret rn of the %al e which the thing sold had at the time of the e%iction$ be it greater or less than the price of the sale7 (2) The income or fr its$ if he has been ordered to deli%er them to the party who won the s it against him7 (') The costs of the s it which ca sed the e%iction$ and$ in a proper case$ those of the s it bro ght against the %endor for the warranty7

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(*) The e)penses of the contract$ if the %endee has paid them7 (5) The damages and interests$ and ornamental e)penses$ if the sale was made in bad faith. (1*-1) Art. 1556. ?ho ld the %endee lose$ by reason of the e%iction$ a part of the thing sold of s ch importance$ in relation to the whole$ that he wo ld not ha%e bo ght it witho t said part$ he may demand the rescission of the contract7 b t with the obligation to ret rn the thing witho t other enc mbrances that those which it had when he ac. ired it. 8e may e)ercise this right of action$ instead of enforcing the %endor:s liability for e%iction. The same r le shall be obser%ed when two or more things ha%e been ,ointly sold for a l mp s m$ or for a separate price for each of them$ if it sho ld clearly appear that the %endee wo ld not ha%e p rchased one witho t the other. (1*-4a) Art. 155-. The warranty cannot be enforced ntil a final , dgment has been rendered$ whereby the %endee loses the thing ac. ired or a part thereof. (1*16) Art. 1551. The %endor shall not be obliged to make good the proper warranty$ s mmoned in the s it for e%iction at the instance of the %endee. (1*11a) nless he is

Art. 1554. The defendant %endee shall ask$ within the time fi)ed in the + les of &o rt for answering the complaint$ that the %endor be made a co/defendant. (1*12a) Art. 1566. (f the immo%able sold sho ld be enc mbered with any non/apparent b rden or ser%it de$ not mentioned in the agreement$ of s ch a nat re that it m st be pres med that the %endee wo ld not ha%e ac. ired it had he been aware thereof$ he may ask for the rescission of the contract$ nless he sho ld prefer the appropriate indemnity. 5either right can be e)ercised if the non/apparent b rden or ser%it de is recorded in the +egistry of 3roperty$ nless there is an e)press warranty that the thing is free from all b rdens and enc mbrances. 0ithin one year$ to be comp ted from the e)ec tion of the deed$ the %endee may bring the action for rescission$ or s e for damages. !ne year ha%ing elapsed$ he may only bring an action for damages within an e. al period$ to be co nted from the date on which he disco%ered the b rden or ser%it de. (1*1'a)

SUBSECTION 2. " W+**+nt3 A7+in.t Hi88!n D!4!0t. ,4 ,* En01;9*+n0!. U2,n t5! T5in7 S, 8
Art. 1561. The %endor shall be responsible for warranty against the hidden defects which the thing sold may ha%e$ sho ld they render it nfit for the se for which it is intended$ or sho ld they diminish its fitness for s ch se to s ch an e)tent that$ had the %endee been aware thereof$ he wo ld not ha%e ac. ired it or wo ld ha%e gi%en a lower price for it7 b t said %endor shall not be answerable for patent defects or those which may be %isible$ or for those which are not %isible if the %endee is an e)pert who$ by reason of his trade or profession$ sho ld ha%e known them. (1*1*a) Art. 1562. (n a sale of goods$ there is an implied warranty or condition as to the . ality or fitness of the goods$ as follows;

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(1) 0here the b yer$ e)pressly or by implication$ makes known to the seller the partic lar p rpose for which the goods are ac. ired$ and it appears that the b yer relies on the seller:s skill or , dgment (whether he be the grower or man fact rer or not)$ there is an implied warranty that the goods shall be reasonably fit for s ch p rpose7 (2) 0here the goods are bro ght by description from a seller who deals in goods of that description (whether he be the grower or man fact rer or not)$ there is an implied warranty that the goods shall be of merchantable . ality. (n) Art. 156'. (n the case of contract of sale of a specified article nder its patent or other trade name$ there is no warranty as to its fitness for any partic lar p rpose$ nless there is a stip lation to the contrary. (n) Art. 156*. An implied warranty or condition as to the . ality or fitness for a partic lar p rpose may be anne)ed by the sage of trade. (n) Art. 1565. (n the case of a contract of sale by sample$ if the seller is a dealer in goods of that kind$ there is an implied warranty that the goods shall be free from any defect rendering them nmerchantable which wo ld not be apparent on reasonable e)amination of the sample. (n) Art. 1566. The %endor is responsible to the %endee for any hidden fa lts or defects in the thing sold$ e%en tho gh he was not aware thereof. This pro%ision shall not apply if the contrary has been stip lated$ and the %endor was not aware of the hidden fa lts or defects in the thing sold. (1*15) Art. 156-. (n the cases of Articles 1561$ 1562$ 156*$ 1565 and 1566$ the %endee may elect between withdrawing from the contract and demanding a proportionate red ction of the price$ with damages in either case. (1*16a) Art. 1561. (f the thing sold sho ld be lost in conse. ence of the hidden fa %endor was aware of them$ he shall bear the loss$ and shall be obliged to ret and ref nd the e)penses of the contract$ with damages. (f he was not aware shall only ret rn the price and interest thereon$ and reimb rse the e)penses of which the %endee might ha%e paid. (1*1-a) lts$ and the rn the price of them$ he the contract

Art. 1564. (f the thing sold had any hidden fa lt at the time of the sale$ and sho ld thereafter be lost by a fort ito s e%ent or thro gh the fa lt of the %endee$ the latter may demand of the %endor the price which he paid$ less the %al e which the thing had when it was lost. (f the %endor acted in bad faith$ he shall pay damages to the %endee. (1*11a) Art. 15-6. The preceding articles of this ? bsection shall be applicable to , dicial sales$ e)cept that the , dgment debtor shall not be liable for damages. (1*14a) Art. 15-1. Actions arising from the pro%isions of the preceding ten articles shall be barred after si) months$ from the deli%ery of the thing sold. (1*46) Art. 15-2. (f two or more animals are sold together$ whether for a l mp s m or for a separate price for each of them$ the redhibitory defect of one shall only gi%e rise to its

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redhibition$ and not that of the others7 nless it sho ld appear that the %endee wo ld not ha%e p rchased the so nd animal or animals witho t the defecti%e one. The latter case shall be pres med when a team$ yoke pair$ or set is bo ght$ e%en if a separate price has been fi)ed for each one of the animals composing the same. (1*41) Art. 15-'. The pro%isions of the preceding article with respect to the sale of animals shall in like manner be applicable to the sale of other things. (1*42) Art. 15-*. There is no warranty against hidden defects of animals sold at fairs or at p blic a ctions$ or of li%e stock sold as condemned. (1*4'a) Art. 15-5. The sale of animals s ffering from contagio s diseases shall be %oid. A contract of sale of animals shall also be %oid if the se or ser%ice for which they are ac. ired has been stated in the contract$ and they are fo nd to be nfit therefor. (1*4*a) Art. 15-6. (f the hidden defect of animals$ e%en in case a professional inspection has been made$ sho ld be of s ch a nat re that e)pert knowledge is not s fficient to disco%er it$ the defect shall be considered as redhibitory. A t if the %eterinarian$ thro gh ignorance or bad faith sho ld fail to disco%er or disclose it$ he shall be liable for damages. (1*45) Art. 15--. The redhibitory action$ based on the fa lts or defects of animals$ m st be bro ght within forty days from the date of their deli%ery to the %endee. This action can only be e)ercised with respect to fa lts and defects which are determined by law or by local c stoms. (1*46a) Art. 15-1. (f the animal sho ld die within three days after its p rchase$ the %endor shall be liable if the disease which ca se the death e)isted at the time of the contract. (1*4-a) Art. 15-4. (f the sale be rescinded$ the animal shall be ret rned in the condition in which it was sold and deli%ered$ the %endee being answerable for any in, ry d e to his negligence$ and not arising from the redhibitory fa lt or defect. (1*41) Art. 1516. (n the sale of animals with redhibitory defects$ the %endee shall also en,oy the right mentioned in article 156-7 b t he m st make se thereof within the same period which has been fi)ed for the e)ercise of the redhibitory action. (1*44) Art. 1511. The form of sale of large cattle shall be go%erned by special laws. (n)

CHAPTER : OBLI$ATIONS OF THE VENDEE

Art. 1512. The %endee is bo nd to accept deli%ery and to pay the price of the thing sold at the time and place stip lated in the contract. (f the time and place sho ld not ha%e been stip lated$ the payment m st be made at the time and place of the deli%ery of the thing sold. (1566a)

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Art. 151'. >nless otherwise agreed$ the b yer of goods is not bo nd to accept deli%ery thereof by installments. 0here there is a contract of sale of goods to be deli%ered by stated installments$ which are to be separately paid for$ and the seller makes defecti%e deli%eries in respect of one or more instalments$ or the b yer neglects or ref ses witho t , st ca se to take deli%ery of or pay for one more instalments$ it depends in each case on the terms of the contract and the circ mstances of the case$ whether the breach of contract is so material as to , stify the in, red party in ref sing to proceed f rther and s ing for damages for breach of the entire contract$ or whether the breach is se%erable$ gi%ing rise to a claim for compensation b t not to a right to treat the whole contract as broken. (n) Art. 151*. 0here goods are deli%ered to the b yer$ which he has not pre%io sly e)amined$ he is not deemed to ha%e accepted them nless and ntil he has had a reasonable opport nity of e)amining them for the p rpose of ascertaining whether they are in conformity with the contract if there is no stip lation to the contrary. >nless otherwise agreed$ when the seller tenders deli%ery of goods to the b yer$ he is bo nd$ on re. est$ to afford the b yer a reasonable opport nity of e)amining the goods for the p rpose of ascertaining whether they are in conformity with the contract. 0here goods are deli%ered to a carrier by the seller$ in accordance with an order from or agreement with the b yer$ pon the terms that the goods shall not be deli%ered by the carrier to the b yer ntil he has paid the price$ whether s ch terms are indicated by marking the goods with the words Fcollect on deli%ery$F or otherwise$ the b yer is not entitled to e)amine the goods before the payment of the price$ in the absence of agreement or sage of trade permitting s ch e)amination. (n) Art. 1515. The b yer is deemed to ha%e accepted the goods when he intimates to the seller that he has accepted them$ or when the goods ha%e been deli%ered to him$ and he does any act in relation to them which is inconsistent with the ownership of the seller$ or when$ after the lapse of a reasonable time$ he retains the goods witho t intimating to the seller that he has re,ected them. (n) Art. 1516. (n the absence of e)press or implied agreement of the parties$ acceptance of the goods by the b yer shall not discharge the seller from liability in damages or other legal remedy for breach of any promise or warranty in the contract of sale. A t$ if$ after acceptance of the goods$ the b yer fails to gi%e notice to the seller of the breach in any promise of warranty within a reasonable time after the b yer knows$ or o ght to know of s ch breach$ the seller shall not be liable therefore. (n) Art. 151-. >nless otherwise agreed$ where goods are deli%ered to the b yer$ and he ref ses to accept them$ ha%ing the right so to do$ he is not bo nd to ret rn them to the seller$ b t it is s fficient if he notifies the seller that he ref ses to accept them. (f he %ol ntarily constit tes himself a depositary thereof$ he shall be liable as s ch. (n) Art. 1511. (f there is no stip lation as specified in the first paragraph of article 152'$ when the b yer:s ref sal to accept the goods is witho t , st ca se$ the title thereto passes to him from the moment they are placed at his disposal. (n) Art. 1514. The %endee shall owe interest for the period between the deli%ery of the thing and the payment of the price$ in the following three cases;

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(1) ?ho ld it ha%e been so stip lated7 (2) ?ho ld the thing sold and deli%ered prod ce fr its or income7 (') ?ho ld he be in defa lt$ from the time of , dicial or e)tra, dicial demand for the payment of the price. (1561a) Art. 1546. ?ho ld the %endee be dist rbed in the possession or ownership of the thing ac. ired$ or sho ld he ha%e reasonable gro nds to fear s ch dist rbance$ by a %indicatory action or a foreclos re of mortgage$ he may s spend the payment of the price ntil the %endor has ca sed the dist rbance or danger to cease$ nless the latter gi%es sec rity for the ret rn of the price in a proper case$ or it has been stip lated that$ notwithstanding any s ch contingency$ the %endee shall be bo nd to make the payment. A mere act of trespass shall not a thori#e the s spension of the payment of the price. (1562a) Art. 1541. ?ho ld the %endor ha%e reasonable gro nds to fear the loss of immo%able property sold and its price$ he may immediately s e for the rescission of the sale. ?ho ld s ch gro nd not e)ist$ the pro%isions of Article 1141 shall be obser%ed. (156') Art. 1542. (n the sale of immo%able property$ e%en tho gh it may ha%e been stip lated that pon fail re to pay the price at the time agreed pon the rescission of the contract shall of right take place$ the %endee may pay$ e%en after the e)piration of the period$ as long as no demand for rescission of the contract has been made pon him either , dicially or by a notarial act. After the demand$ the co rt may not grant him a new term. (156*a) Art. 154'. 0ith respect to mo%able property$ the rescission of the sale shall of right take place in the interest of the %endor$ if the %endee$ pon the e)piration of the period fi)ed for the deli%ery of the thing$ sho ld not ha%e appeared to recei%e it$ or$ ha%ing appeared$ he sho ld not ha%e tendered the price at the same time$ nless a longer period has been stip lated for its payment. (1565)

CHAPTER 6 ACTIONS FOR BREACH OF CONTRACT OF SALE OF $OODS

Art. 154*. Actions for breach of the contract of sale of goods shall be go%erned partic larly by the pro%isions of this &hapter$ and as to matters not specifically pro%ided for herein$ by other applicable pro%isions of this Title. (n) Art. 1545. 0here$ nder a contract of sale$ the ownership of the goods has passed to the b yer and he wrongf lly neglects or ref ses to pay for the goods according to the terms of the contract of sale$ the seller may maintain an action against him for the price of the goods. 0here$ nder a contract of sale$ the price is payable on a certain day$ irrespecti%e of deli%ery or of transfer of title and the b yer wrongf lly neglects or ref ses to pay s ch price$ the seller may maintain an action for the price altho gh the ownership in the goods has not passed. A t it shall be a defense to s ch an action that the seller at any time before the , dgment in s ch action has manifested an inability to perform the contract of sale on his part or an intention not to perform it. Altho gh the ownership in the goods has not passed$ if they cannot readily be resold for a reasonable price$ and if the pro%isions of article 1546$ fo rth paragraph$ are not applicable$ the seller may offer to deli%er the goods to the b yer$ and$ if the b yer ref ses to recei%e

65

them$ may notify the b yer that the goods are thereafter held by the seller as bailee for the b yer. Thereafter the seller may treat the goods as the b yer:s and may maintain an action for the price. (n) Art. 1546. 0here the b yer wrongf lly neglects or ref ses to accept and pay for the goods$ the seller may maintain an action against him for damages for nonacceptance. The meas re of damages is the estimated loss directly and nat rally res lting in the ordinary co rse of e%ents from the b yer:s breach of contract. 0here there is an a%ailable market for the goods in . estion$ the meas re of damages is$ in the absence of special circ mstances showing pro)imate damage of a different amo nt$ the difference between the contract price and the market or c rrent price at the time or times when the goods o ght to ha%e been accepted$ or$ if no time was fi)ed for acceptance$ then at the time of the ref sal to accept. (f$ while labor or e)pense of material amo nt is necessary on the part of the seller to enable him to f lfill his obligations nder the contract of sale$ the b yer rep diates the contract or notifies the seller to proceed no f rther therewith$ the b yer shall be liable to the seller for labor performed or e)penses made before recei%ing notice of the b yer:s rep diation or co ntermand. The profit the seller wo ld ha%e made if the contract or the sale had been f lly performed shall be considered in awarding the damages. (n) Art. 154-. 0here the goods ha%e not been deli%ered to the b yer$ and the b yer has rep diated the contract of sale$ or has manifested his inability to perform his obligations there nder$ or has committed a breach thereof$ the seller may totally rescind the contract of sale by gi%ing notice of his election so to do to the b yer. (n) Art. 1541. 0here the seller has broken a contract to deli%er specific or ascertained goods$ a co rt may$ on the application of the b yer$ direct that the contract shall be performed specifically$ witho t gi%ing the seller the option of retaining the goods on payment of damages. The , dgment or decree may be nconditional$ or pon s ch terms and conditions as to damages$ payment of the price and otherwise$ as the co rt may deem , st. (n) Art. 1544. 0here there is a breach of warranty by the seller$ the b yer may$ at his election; (1) Accept or keep the goods and set p against the seller$ the breach of warranty by way of reco pment in dimin tion or e)tinction of the price7 (2) Accept or keep the goods and maintain an action against the seller for damages for the breach of warranty7 (') +ef se to accept the goods$ and maintain an action against the seller for damages for the breach of warranty7 (*) +escind the contract of sale and ref se to recei%e the goods or if the goods ha%e already been recei%ed$ ret rn them or offer to ret rn them to the seller and reco%er the price or any part thereof which has been paid.

0hen the b yer has claimed and been granted a remedy in anyone of these ways$ no other remedy can thereafter be granted$ witho t pre, dice to the pro%isions of the second paragraph of Article 1141.

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0here the goods ha%e been deli%ered to the b yer$ he cannot rescind the sale if he knew of the breach of warranty when he accepted the goods witho t protest$ or if he fails to notify the seller within a reasonable time of the election to rescind$ or if he fails to ret rn or to offer to ret rn the goods to the seller in s bstantially as good condition as they were in at the time the ownership was transferred to the b yer. A t if deterioration or in, ry of the goods is d e to the breach or warranty$ s ch deterioration or in, ry shall not pre%ent the b yer from ret rning or offering to ret rn the goods to the seller and rescinding the sale. 0here the b yer is entitled to rescind the sale and elects to do so$ he shall cease to be liable for the price pon ret rning or offering to ret rn the goods. (f the price or any part thereof has already been paid$ the seller shall be liable to repay so m ch thereof as has been paid$ conc rrently with the ret rn of the goods$ or immediately after an offer to ret rn the goods in e)change for repayment of the price. 0here the b yer is entitled to rescind the sale and elects to do so$ if the seller ref ses to accept an offer of the b yer to ret rn the goods$ the b yer shall thereafter be deemed to hold the goods as bailee for the seller$ b t s b,ect to a lien to sec re payment of any portion of the price which has been paid$ and with the remedies for the enforcement of s ch lien allowed to an npaid seller by Article 1526. (5) (n the case of breach of warranty of . ality$ s ch loss$ in the absence of special circ mstances showing pro)imate damage of a greater amo nt$ is the difference between the %al e of the goods at the time of deli%ery to the b yer and the %al e they wo ld ha%e had if they had answered to the warranty. (n)

CHAPTER < E(TIN$UISHMENT OF SALE

Art. 1666. ?ales are e)ting ished by the same ca ses as all other obligations$ by those stated in the preceding articles of this Title$ and by con%entional or legal redemption. (1566)

SECTION #. " C,n-!nti,n+ R!8!;2ti,n

Art. 1661. &on%entional redemption shall take place when the %endor reser%es the right to rep rchase the thing sold$ with the obligation to comply with the pro%isions of Article 1616 and other stip lations which may ha%e been agreed pon. (156-) Art. 1662. The contract shall be pres med to be an e. itable mortgage$ in any of the following cases; (1) 0hen the price of a sale with right to rep rchase is n s ally inade. ate7 (2) 0hen the %endor remains in possession as lessee or otherwise7 (') 0hen pon or after the e)piration of the right to rep rchase another instr ment e)tending the period of redemption or granting a new period is e)ec ted7 (*) 0hen the p rchaser retains for himself a part of the p rchase price7 (5) 0hen the %endor binds himself to pay the ta)es on the thing sold7

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(6) (n any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall sec re the payment of a debt or the performance of any other obligation. (n any of the foregoing cases$ any money$ fr its$ or other benefit to be recei%ed by the %endee as rent or otherwise shall be considered as interest which shall be s b,ect to the s ry laws. (n) Art. 166'. (n case of do bt$ a contract p rporting to be a sale with right to rep rchase shall be constr ed as an e. itable mortgage. (n) Art. 166*. The pro%isions of Article 1662 shall also apply to a contract p rporting to be an absol te sale. (n) Art. 1665. (n the cases referred to in Articles 1662 and 166*$ the apparent %endor may ask for the reformation of the instr ment. (n) Art. 1666. The right referred to in Article 1661$ in the absence of an e)press agreement$ shall last fo r years from the date of the contract. ?ho ld there be an agreement$ the period cannot e)ceed ten years. 8owe%er$ the %endor may still e)ercise the right to rep rchase within thirty days from the time final , dgment was rendered in a ci%il action on the basis that the contract was a tr e sale with right to rep rchase. (1561a) Art. 166-. (n case of real property$ the consolidation of ownership in the %endee by %irt e of the fail re of the %endor to comply with the pro%isions of article 1616 shall not be recorded in the +egistry of 3roperty witho t a , dicial order$ after the %endor has been d ly heard. (n) Art. 1661. The %endor may bring his action against e%ery possessor whose right is deri%ed from the %endee$ e%en if in the second contract no mention sho ld ha%e been made of the right to rep rchase$ witho t pre, dice to the pro%isions of the <ortgage Law and the Land +egistration Law with respect to third persons. (1516) Art. 1664. The %endee is s brogated to the %endor:s rights and actions. (1511) Art. 1616. The creditors of the %endor cannot make se of the right of redemption against the %endee$ ntil after they ha%e e)ha sted the property of the %endor. (1512) Art. 1611. (n a sale with a right to rep rchase$ the %endee of a part of an ndi%ided immo%able who ac. ires the whole thereof in the case of article *41$ may compel the %endor to redeem the whole property$ if the latter wishes to make se of the right of redemption. (151') Art. 1612. (f se%eral persons$ ,ointly and in the same contract$ sho ld sell an ndi%ided immo%able with a right of rep rchase$ none of them may e)ercise this right for more than his respecti%e share. The same r le shall apply if the person who sold an immo%able alone has left se%eral heirs$ in which case each of the latter may only redeem the part which he may ha%e ac. ired. (151*)

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Art. 161'. (n the case of the preceding article$ the %endee may demand of all the %endors or co/heirs that they come to an agreement pon the p rchase of the whole thing sold7 and sho ld they fail to do so$ the %endee cannot be compelled to consent to a partial redemption. (1515) Art. 161*. 9ach one of the co/owners of an ndi%ided immo%able$ who may ha%e sold his share separately$ may independently e)ercise the right of rep rchase as regards his own share$ and the %endee cannot compel him to redeem the whole property. (1516) Art. 1615. (f the %endee sho ld lea%e se%eral heirs$ the action for redemption cannot be bro ght against each of them e)cept for his own share$ whether the thing be ndi%ided$ or it has been partitioned among them. A t if the inheritance has been di%ided$ and the thing sold has been awarded to one of the heirs$ the action for redemption may be instit ted against him for the whole. (151-) Art. 1616. The %endor cannot a%ail himself of the right of rep rchase witho t ret rning to the %endee the price of the sale$ and in addition; (1) The e)penses of the contract$ and any other legitimate payments made by reason of the sale7 (2) The necessary and sef l e)penses made on the thing sold. (1511) Art. 161-. (f at the time of the e)ec tion of the sale there sho ld be on the land$ %isible or growing fr its$ there shall be no reimb rsement for or prorating of those e)isting at the time of redemption$ if no indemnity was paid by the p rchaser when the sale was e)ec ted. ?ho ld there ha%e been no fr its at the time of the sale and some e)ist at the time of redemption$ they shall be prorated between the redemptioner and the %endee$ gi%ing the latter the part corresponding to the time he possessed the land in the last year$ co nted from the anni%ersary of the date of the sale. (1514a) Art. 1611. The %endor who reco%ers the thing sold shall recei%e it free from all charges or mortgages constit ted by the %endee$ b t he shall respect the leases which the latter may ha%e e)ec ted in good faith$ and in accordance with the c stom of the place where the land is sit ated. (1526)

SECTION 2. " L!7+ R!8!;2ti,n

Art. 1614. Legal redemption is the right to be s brogated$ pon the same terms and conditions stip lated in the contract$ in the place of one who ac. ires a thing by p rchase or dation in payment$ or by any other transaction whereby ownership is transmitted by onero s title. (1521a) Art. 1626. A co/owner of a thing may e)ercise the right of redemption in case the shares of all the other co/owners or of any of them$ are sold to a third person. (f the price of the alienation is grossly e)cessi%e$ the redemptioner shall pay only a reasonable one. ?ho ld two or more co/owners desire to e)ercise the right of redemption$ they may only do so in proportion to the share they may respecti%ely ha%e in the thing owned in common. (1522a)

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Art. 1621. The owners of ad,oining lands shall also ha%e the right of redemption when a piece of r ral land$ the area of which does not e)ceed one hectare$ is alienated$ nless the grantee does not own any r ral land. This right is not applicable to ad,acent lands which are separated by brooks$ drains$ ra%ines$ roads and other apparent ser%it des for the benefit of other estates. (f two or more ad,oining owners desire to e)ercise the right of redemption at the same time$ the owner of the ad,oining land of smaller area shall be preferred7 and sho ld both lands ha%e the same area$ the one who first re. ested the redemption. (152'a) Art. 1622. 0hene%er a piece of rban land which is so small and so sit ated that a ma,or portion thereof cannot be sed for any practical p rpose within a reasonable time$ ha%ing been bo ght merely for spec lation$ is abo t to be re/sold$ the owner of any ad,oining land has a right of pre/emption at a reasonable price. (f the re/sale has been perfected$ the owner of the ad,oining land shall ha%e a right of redemption$ also at a reasonable price. 0hen two or more owners of ad,oining lands wish to e)ercise the right of pre/emption or redemption$ the owner whose intended best , stified shall be preferred. (n) se of the land in . estion appears

Art. 162'. The right of legal pre/emption or redemption shall not be e)ercised e)cept within thirty days from the notice in writing by the prospecti%e %endor$ or by the %endor$ as the case may be. The deed of sale shall not be recorded in the +egistry of 3roperty$ nless accompanied by an affida%it of the %endor that he has gi%en written notice thereof to all possible redemptioners. The right of redemption of co/owners e)cl des that of ad,oining owners. (152*a)

CHAPTER 8 ASSI$NMENT OF CREDITS AND OTHER INCORPOREAL RI$HTS

Art. 162*. An assignment of creditors and other incorporeal rights shall be perfected in accordance with the pro%isions of Article 1*-5. (n) Art. 1625. An assignment of a credit$ right or action shall prod ce no effect as against third person$ nless it appears in a p blic instr ment$ or the instr ment is recorded in the +egistry of 3roperty in case the assignment in%ol%es real property. (1526) Art. 1626. The debtor who$ before ha%ing knowledge of the assignment$ pays his creditor shall be released from the obligation. (152-) Art. 162-. The assignment of a credit incl des all the accessory rights$ s ch as a g aranty$ mortgage$ pledge or preference. (1521)

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Art. 1621. The %endor in good faith shall be responsible for the e)istence and legality of the credit at the time of the sale$ nless it sho ld ha%e been sold as do btf l7 b t not for the sol%ency of the debtor$ nless it has been so e)pressly stip lated or nless the insol%ency was prior to the sale and of common knowledge. 9%en in these cases he shall only be liable for the price recei%ed and for the e)penses specified in 5o. 1 of Article 1616. The %endor in bad faith shall always be answerable for the payment of all e)penses$ and for damages. (1524) Art. 1624. (n case the assignor in good faith sho ld ha%e made himself responsible for the sol%ency of the debtor$ and the contracting parties sho ld not ha%e agreed pon the d ration of the liability$ it shall last for one year only$ from the time of the assignment if the period had already e)pired. (f the credit sho ld be payable within a term or period which has not yet e)pired$ the liability shall cease one year after the mat rity. (15'6a) Art. 16'6. !ne who sells an inheritance witho t en merating the things of which it is composed$ shall only be answerable for his character as an heir. (15'1) Art. 16'1. !ne who sells for a l mp s m the whole of certain rights$ rents$ or prod cts$ shall comply by answering for the legitimacy of the whole in general7 b t he shall not be obliged to warrant each of the %ario s parts of which it may be composed$ e)cept in the case of e%iction from the whole or the part of greater %al e. (15'2a) Art. 16'2. ?ho ld the %endor ha%e profited by some of the fr its or recei%ed anything from the inheritance sold$ he shall pay the %endee thereof$ if the contrary has not been stip lated. (15'') Art. 16''. The %endee shall$ on his part$ reimb rse the %endor for all that the latter may ha%e paid for the debts of and charges on the estate and satisfy the credits he may ha%e against the same$ nless there is an agreement to the contrary. (15'*) Art. 16'*. 0hen a credit or other incorporeal right in litigation is sold$ the debtor shall ha%e a right to e)ting ish it by reimb rsing the assignee for the price the latter paid therefor$ the , dicial costs inc rred by him$ and the interest on the price from the day on which the same was paid. A credit or other incorporeal right shall be considered in litigation from the time the complaint concerning the same is answered. The debtor may e)ercise his right within thirty days from the date the assignee demands payment from him. (15'5) Art. 16'5. @rom the pro%isions of the preceding article shall be e)cepted the assignments or sales made; (1) To a co/heir or co/owner of the right assigned7 (2) To a creditor in payment of his credit7

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(') To the possessor of a tenement or piece of land which is s b,ect to the right in litigation assigned. (15'6) &8A3T9+ 4 "959+AL 3+!=(?(!5? Art. 16'6. (n the preceding articles in this Title go%erning the sale of goods$ nless the conte)t or s b,ect matter otherwise re. ires; (1) " ocument of title to goods" incl des any bill of lading$ dock warrant$ F. edan$F or wareho se receipt or order for the deli%ery of goods$ or any other doc ment sed in the ordinary co rse of b siness in the sale or transfer of goods$ as proof of the possession or control of the goods$ or a thori#ing or p rporting to a thori#e the possessor of the doc ment to transfer or recei%e$ either by endorsement or by deli%ery$ goods represented by s ch doc ment. "!oods" incl des all chattels personal b t not things in action or money of legal tender in the 3hilippines. The term incl des growing fr its or crops. "Order" relating to doc ments of title means an order by endorsement on the doc ments. ""uality of goods" incl des their state or condition. "#pecific goods" means goods identified and agreed sale is made. pon at the time a contract of

An antecedent or pre/e)isting claim$ whether for money or not$ constit tes F%al eF where goods or doc ments of title are taken either in satisfaction thereof or as sec rity therefor. (2) A person is insol%ent within the meaning of this Title who either has ceased to pay his debts in the ordinary co rse of b siness or cannot pay his debts as they become d e$ whether insol%ency proceedings ha%e been commenced or not. (') "oods are in a "deliverable state" within the meaning of this Title when they are in s ch a state that the b yer wo ld$ nder the contract$ be bo nd to take deli%ery of them. (n) Art. 16'-. The pro%isions of this Title are s b,ect to the r les laid down by the <ortgage Law and the Land +egistration Law with regard to immo%able property. (15'-a)

Tit ! VII. " BARTER OR E(CHAN$E

Art. 16'1. Ay the contract of barter or e)change one of the parties binds himself to gi%e one thing in consideration of the other:s promise to gi%e another thing. (15'1a) Art. 16'4. (f one of the contracting parties$ ha%ing recei%ed the thing promised him in barter$ sho ld pro%e that it did not belong to the person who ga%e it$ he cannot be compelled to deli%er that which he offered in e)change$ b t he shall be entitled to damages. (15'4a) Art. 16*6. !ne who loses by e%iction the thing recei%ed in barter may reco%er that which he ga%e in e)change with a right to damages$ or he may only demand an indemnity for

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damages. 8owe%er$ he can only make se of the right to reco%er the thing which he has deli%ered while the same remains in the possession of the other party$ and witho t pre, dice to the rights ac. ired in good faith in the meantime by a third person. (15*6a) Art. 16*1. As to all matters not specifically pro%ided for in this Title$ barter shall be go%erned by the pro%isions of the preceding Title relating to sales. (15*1a)

Tit ! VIII. " LEASE CHAPTER # $ENERAL PROVISIONS

Art. 16*2. The contract of lease may be of things$ or of work and ser%ice. (15*2) Art. 16*'. (n the lease of things$ one of the parties binds himself to gi%e to another the en,oyment or se of a thing for a price certain$ and for a period which may be definite or indefinite. 8owe%er$ no lease for more than ninety/nine years shall be %alid. (15*'a) Art. 16**. (n the lease of work or ser%ice$ one of the parties binds himself to e)ec te a piece of work or to render to the other some ser%ice for a price certain$ b t the relation of principal and agent does not e)ist between them. (15**a) Art. 16*5. &ons mable goods cannot be the s b,ect matter of a contract of lease$ e)cept when they are merely to be e)hibited or when they are accessory to an ind strial establishment. (15*5a)

CHAPTER 2 LEASE OF RURAL AND URBAN LANDS SECTION #. " $!n!*+ P*,-i.i,n.
Art. 16*6. The persons dis. alified to b y referred to in Articles 1*46 and 1*41$ are also dis. alified to become lessees of the things mentioned therein. (n) Art. 16*-. (f a lease is to be recorded in the +egistry of 3roperty$ the following persons cannot constit te the same witho t proper a thority; the h sband with respect to the wife:s paraphernal real estate$ the father or g ardian as to the property of the minor or ward$ and the manager witho t special power. (15*1a) Art. 16*1. 9%ery lease of real estate may be recorded in the +egistry of 3roperty. >nless a lease is recorded$ it shall not be binding pon third persons. (15*4a) Art. 16*4. The lessee cannot assign the lease witho t the consent of the lessor$ nless there is a stip lation to the contrary. (n) Art. 1656. 0hen in the contract of lease of things there is no e)press prohibition$ the lessee may s blet the thing leased$ in whole or in part$ witho t pre, dice to his responsibility for the performance of the contract toward the lessor. (1556)

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Art. 1651. 0itho t pre, dice to his obligation toward the s blessor$ the s blessee is bo nd to the lessor for all acts which refer to the se and preser%ation of the thing leased in the manner stip lated between the lessor and the lessee. (1551) Art. 1652. The s blessee is s bsidiarily liable to the lessor for any rent d e from the lessee. 8owe%er$ the s blessee shall not be responsible beyond the amo nt of rent d e from him$ in accordance with the terms of the s blease$ at the time of the e)tra, dicial demand by the lessor. 3ayments of rent in ad%ance by the s blessee shall be deemed not to ha%e been made$ so far as the lessor:s claim is concerned$ nless said payments were effected in %irt e of the c stom of the place. (1552a) Art. 165'. The pro%isions go%erning warranty$ contained in the Title on ?ales$ shall be applicable to the contract of lease. (n the cases where the ret rn of the price is re. ired$ red ction shall be made in proportion to the time d ring which the lessee en,oyed the thing. (155')

SECTION 2. " Ri75t. +n8 O9 i7+ti,n. ,4 t5! L!..,* +n8 t5! L!..!!
Art. 165*. The lessor is obliged; (1) To deli%er the thing which is the ob,ect of the contract in s ch a condition as to render it fit for the se intended7 (2) To make on the same d ring the lease all the necessary repairs in order to keep it s itable for the se to which it has been de%oted$ nless there is a stip lation to the contrary7 (') To maintain the lessee in the peacef l and ade. ate en,oyment of the lease for the entire d ration of the contract. (155*a) Art. 1655. (f the thing leased is totally destroyed by a fort ito s e%ent$ the lease is e)ting ished. (f the destr ction is partial$ the lessee may choose between a proportional red ction of the rent and a rescission of the lease. (n) Art. 1656. The lessor of a b siness or ind strial establishment may contin e engaging in the same b siness or ind stry to which the lessee de%otes the thing leased$ nless there is a stip lation to the contrary. (n) Art. 165-. The lessee is obliged; (1) To pay the price of the lease according to the terms stip lated7 (2) To se the thing leased as a diligent father of a family$ de%oting it to the se stip lated7 and in the absence of stip lation$ to that which may be inferred from the nat re of the thing leased$ according to the c stom of the place7 (') To pay e)penses for the deed of lease. (1555)

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Art. 1651. The lessee may s spend the payment of the rent in case the lessor fails to make the necessary repairs or to maintain the lessee in peacef l and ade. ate en,oyment of the property leased. (n) Art. 1654. (f the lessor or the lessee sho ld not comply with the obligations set forth in Articles 165* and 165-$ the aggrie%ed party may ask for the rescission of the contract and indemnification for damages$ or only the latter$ allowing the contract to remain in force. (1556) Art. 1666. (f a dwelling place or any other b ilding intended for h man habitation is in s ch a condition that its se brings imminent and serio s danger to life or health$ the lessee may terminate the lease at once by notifying the lessor$ e%en if at the time the contract was perfected the former knew of the dangero s condition or wai%ed the right to rescind the lease on acco nt of this condition. (n) Art. 1661. The lessor cannot alter the form of the thing leased in s ch a way as to impair the se to which the thing is de%oted nder the terms of the lease. (155-a) Art. 1662. (f d ring the lease it sho ld become necessary to make some rgent repairs pon the thing leased$ which cannot be deferred ntil the termination of the lease$ the lessee is obliged to tolerate the work$ altho gh it may be %ery annoying to him$ and altho gh d ring the same$ he may be depri%ed of a part of the premises. (f the repairs last more than forty days the rent shall be red ced in proportion to the time / incl ding the first forty days / and the part of the property of which the lessee has been depri%ed. 0hen the work is of s ch a nat re that the portion which the lessee and his family need for their dwelling becomes ninhabitable$ he may rescind the contract if the main p rpose of the lease is to pro%ide a dwelling place for the lessee. (1551a) Art. 166'. The lessee is obliged to bring to the knowledge of the proprietor$ within the shortest possible time$ e%ery s rpation or ntoward act which any third person may ha%e committed or may be openly preparing to carry o t pon the thing leased. 8e is also obliged to ad%ise the owner$ with the same incl ded in 5o. 2 of Article 165*. rgency$ of the need of all repairs

(n both cases the lessee shall be liable for the damages which$ thro gh his negligence$ may be s ffered by the proprietor. (f the lessor fails to make rgent repairs$ the lessee$ in order to a%oid an imminent danger$ may order the repairs at the lessor:s cost. (1554a) Art. 166*. The lessor is not obliged to answer for a mere act of trespass which a third person may ca se on the se of the thing leased7 b t the lessee shall ha%e a direct action against the intr der. There is a mere act of trespass when the third person claims no right whate%er. (1566a) Art. 1665. The lessee shall ret rn the thing leased$ pon the termination of the lease$ as he recei%ed it$ sa%e what has been lost or impaired by the lapse of time$ or by ordinary wear and tear$ or from an ine%itable ca se. (1561a)

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Art. 1666. (n the absence of a statement concerning the condition of the thing at the time the lease was constit ted$ the law pres mes that the lessee recei%ed it in good condition$ nless there is proof to the contrary. (1562) Art. 166-. The lessee is responsible for the deterioration or loss of the thing leased$ nless he pro%es that it took place witho t his fa lt. This b rden of proof on the lessee does not apply when the destr ction is d e to earth. ake$ flood$ storm or other nat ral calamity. (156'a) Art. 1661. The lessee is liable for any deterioration ca sed by members of his ho sehold and by g ests and %isitors. (156*a) Art. 1664. (f the lease was made for a determinate time$ it ceases witho t the need of a demand. (1565) pon the day fi)ed$

Art. 16-6. (f at the end of the contract the lessee sho ld contin e en,oying the thing leased for fifteen days with the ac. iescence of the lessor$ and nless a notice to the contrary by either party has pre%io sly been gi%en$ it is nderstood that there is an implied new lease$ not for the period of the original contract$ b t for the time established in Articles 1612 and 161-. The other terms of the original contract shall be re%i%ed. (1566a) Art. 16-1. (f the lessee contin es en,oying the thing after the e)piration of the contract$ o%er the lessor:s ob,ection$ the former shall be s b,ect to the responsibilities of a possessor in bad faith. (n) Art. 16-2. (n case of an implied new lease$ the obligations contracted by a third person for the sec rity of the principal contract shall cease with respect to the new lease. (156-) Art. 16-'. The lessor may , dicially e,ect the lessee for any of the following ca ses; (1) 0hen the period agreed pon$ or that which is fi)ed for the d ration of leases nder Articles 1612 and 161-$ has e)pired7 (2) Lack of payment of the price stip lated7 (') =iolation of any of the conditions agreed pon in the contract7 (*) 0hen the lessee de%otes the thing leased to any se or ser%ice not stip lated which ca ses the deterioration thereof7 or if he does not obser%e the re. irement in 5o. 2 of Article 165-$ as regards the se thereof. The e,ectment of tenants of agric lt ral lands is go%erned by special laws. (1564a) Art. 16-*. (n e,ectment cases where an appeal is taken the remedy granted in Article 5'4$ second paragraph$ shall also apply$ if the higher co rt is satisfied that the lessee:s appeal is fri%olo s or dilatory$ or that the lessor:s appeal is prima facie meritorio s. The period of ten days referred to in said article shall be co nted from the time the appeal is perfected. (n) Art. 16-5. 9)cept in cases stated in Article 16-'$ the lessee shall ha%e a right to make se of the periods established in Articles 1612 and 161-. (15-6)

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Art. 16-6. The p rchaser of a piece of land which is nder a lease that is not recorded in the +egistry of 3roperty may terminate the lease$ sa%e when there is a stip lation to the contrary in the contract of sale$ or when the p rchaser knows of the e)istence of the lease. (f the b yer makes se of this right$ the lessee may demand that he be allowed to gather the fr its of the har%est which corresponds to the c rrent agric lt ral year and that the %endor indemnify him for damages s ffered. (f the sale is fictitio s$ for the p rpose of e)ting ishing the lease$ the s pposed %endee cannot make se of the right granted in the first paragraph of this article. The sale is pres med to be fictitio s if at the time the s pposed %endee demands the termination of the lease$ the sale is not recorded in the +egistry of 3roperty. (15-1a) Art. 16--. The p rchaser in a sale with the right of redemption cannot make power to e,ect the lessee ntil the end of the period for the redemption. (15-2) se of the

Art. 16-1. (f the lessee makes$ in good faith$ sef l impro%ements which are s itable to the se for which the lease is intended$ witho t altering the form or s bstance of the property leased$ the lessor pon the termination of the lease shall pay the lessee one/half of the %al e of the impro%ements at that time. ?ho ld the lessor ref se to reimb rse said amo nt$ the lessee may remo%e the impro%ements$ e%en tho gh the principal thing may s ffer damage thereby. 8e shall not$ howe%er$ ca se any more impairment pon the property leased than is necessary. 0ith regard to ornamental e)penses$ the lessee shall not be entitled to any reimb rsement$ b t he may remo%e the ornamental ob,ects$ pro%ided no damage is ca sed to the principal thing$ and the lessor does not choose to retain them by paying their %al e at the time the lease is e)ting ished. (n) Art. 16-4. (f nothing has been stip lated concerning the place and the time for the payment of the lease$ the pro%isions or Article 1251 shall be obser%ed as regards the place7 and with respect to the time$ the c stom of the place shall be followed. (15-*)

?9&T(!5 '. / ?pecial 3ro%isions for Leases of + ral Lands Art. 1616. The lessee shall ha%e no right to a red ction of the rent on acco nt of the sterility of the land leased$ or by reason of the loss of fr its d e to ordinary fort ito s e%ents7 b t he shall ha%e s ch right in case of the loss of more than one/half of the fr its thro gh e)traordinary and nforeseen fort ito s e%ents$ sa%e always when there is a specific stip lation to the contrary. 9)traordinary fort ito s e%ents are nderstood to be; fire$ war$ pestilence$ n s al flood$ loc sts$ earth. ake$ or others which are ncommon$ and which the contracting parties co ld not ha%e reasonably foreseen. (15-5) Art. 1611. 5either does the lessee ha%e any right to a red ction of the rent if the fr its are lost after they ha%e been separated from their stalk$ root or tr nk. (15-6) Art. 1612. The lease of a piece of r ral land$ when its d ration has not been fi)ed$ is nderstood to ha%e been for all the time necessary for the gathering of the fr its which the whole estate leased may yield in one year$ or which it may yield once$ altho gh two or more years ha%e to elapse for the p rpose. (15--a)

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Art. 161'. The o tgoing lessee shall allow the incoming lessee or the lessor the se of the premises and other means necessary for the preparatory labor for the following year7 and$ reciprocally$ the incoming lessee or the lessor is nder obligation to permit the o tgoing lessee to do whate%er may be necessary for the gathering or har%esting and tili#ation of the fr its$ all in accordance with the c stom of the place. (15-1a) Art. 161*. Land tenancy on shares shall be go%erned by special laws$ the stip lations of the parties$ the pro%isions on partnership and by the c stoms of the place. (15-4a) Art. 1615. The tenant on shares cannot be e,ected e)cept in cases specified by law. (n)

SECTION ). " S2!0i+ P*,-i.i,n. ,4 t5! L!+.! ,4 U*9+n L+n8.

Art. 1616. (n defa lt of a special stip lation$ the c stom of the place shall be obser%ed with regard to the kind of repairs on rban property for which the lessor shall be liable. (n case of do bt it is nderstood that the repairs are chargeable against him. (1516a) Art. 161-. (f the period for the lease has not been fi)ed$ it is nderstood to be from year to year$ if the rent agreed pon is ann al7 from month to month$ if it is monthly7 from week to week$ if the rent is weekly7 and from day to day$ if the rent is to be paid daily. 8owe%er$ e%en tho gh a monthly rent is paid$ and no period for the lease has been set$ the co rts may fi) a longer term for the lease after the lessee has occ pied the premises for o%er one year. (f the rent is weekly$ the co rts may likewise determine a longer period after the lessee has been in possession for o%er si) months. (n case of daily rent$ the co rts may also fi) a longer period after the lessee has stayed in the place for o%er one month. (1511a) Art. 1611. 0hen the lessor of a ho se$ or part thereof$ sed as a dwelling for a family$ or when the lessor of a store$ or ind strial establishment$ also leases the f rnit re$ the lease of the latter shall be deemed to be for the d ration of the lease of the premises. (1512)

CHAPTER 3 WOR> AND LABOR SECTION #. " H,1.!5, 8 S!*-i0! (n)

Art. 1614. 8o sehold ser%ice shall always be reasonably compensated. Any stip lation that ho sehold ser%ice is witho t compensation shall be %oid. ? ch compensation shall be in addition to the ho se helper:s lodging$ food$ and medical attendance. Art. 1646. The head of the family shall f rnish$ free of charge$ to the ho se helper$ s itable and sanitary . arters as well as ade. ate food and medical attendance. Art. 1641. (f the ho se helper is nder the age of eighteen years$ the head of the family shall gi%e an opport nity to the ho se helper for at least elementary ed cation. The cost of s ch ed cation shall be a part of the ho se helper:s compensation$ nless there is a stip lation to the contrary. Art. 1642. 5o contract for ho sehold ser%ice shall last for more than two years. 8owe%er$ s ch contract may be renewed from year to year.

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Art. 164'. The ho se helper:s clothes shall be s b,ect to stip lation. 8owe%er$ any contract for ho sehold ser%ice shall be %oid if thereby the ho se helper cannot afford to ac. ire s itable clothing. Art. 164*. The head of the family shall treat the ho se helper in a , st and h mane manner. (n no case shall physical %iolence be sed pon the ho se helper. Art. 1645. 8o se helper shall not be re. ired to work more than ten ho rs a day. 9%ery ho se helper shall be allowed fo r days: %acation each month$ with pay. Art. 1646. (n case of death of the ho se helper$ the head of the family shall bear the f neral e)penses if the ho se helper has no relati%es in the place where the head of the family li%es$ with s fficient means therefor. Art. 164-. (f the period for ho sehold ser%ice is fi)ed neither the head of the family nor the ho se helper may terminate the contract before the e)piration of the term$ e)cept for a , st ca se. (f the ho se helper is n, stly dismissed$ he shall be paid the compensation already earned pl s that for fifteen days by way of indemnity. (f the ho se helper lea%es witho t , stifiable reason$ he shall forfeit any salary d e him and npaid$ for not e)ceeding fifteen days. Art. 1641. (f the d ration of the ho sehold ser%ice is not determined either by stip lation or by the nat re of the ser%ice$ the head of the family or the ho se helper may gi%e notice to p t an end to the ser%ice relation$ according to the following r les; (1) (f the compensation is paid by the day$ notice may be gi%en on any day that the ser%ice shall end at the close of the following day7 (2) (f the compensation is paid by the week$ notice may be gi%en$ at the latest on the first b siness day of the week$ that the ser%ice shall be terminated at the end of the se%enth day from the beginning of the week7 (') (f the compensation is paid by the month$ notice may be gi%en$ at the latest$ on the fifth day of the month$ that the ser%ice shall cease at the end of the month. Art. 1644. >pon the e)ting ishment of the ser%ice relation$ the ho se helper may demand from the head of the family a written statement on the nat re and d ration of the ser%ice and the efficiency and cond ct of the ho se helper.

SECTION 2. " C,nt*+0t ,4 L+9,* (n)

Art. 1-66. The relations between capital and labor are not merely contract al. They are so impressed with p blic interest that labor contracts m st yield to the common good. Therefore$ s ch contracts are s b,ect to the special laws on labor nions$ collecti%e bargaining$ strikes and locko ts$ closed shop$ wages$ working conditions$ ho rs of labor and similar s b,ects. Art. 1-61. 5either capital nor labor shall act oppressi%ely against the other$ or impair the interest or con%enience of the p blic. Art. 1-62. (n case of do bt$ all labor legislation and all labor contracts shall be constr ed in fa%or of the safety and decent li%ing for the laborer.

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Art. 1-6'. 5o contract which practically amo nts to in%ol ntary ser%it de$ whatsoe%er$ shall be %alid.

nder any g ise

Art. 1-6*. (n collecti%e bargaining$ the labor nion or members of the board or committee signing the contract shall be liable for non/f lfillment thereof. Art. 1-65. The laborer:s wages shall be paid in legal c rrency. Art. 1-66. 0ithholding of the wages$ e)cept for a debt d e$ shall not be made by the employer. Art. 1-6-. The laborer:s wages shall be a lien on the goods man fact red or the work done. Art. 1-61. The laborer:s wages shall not be s b,ect to e)ec tion or attachment$ e)cept for debts inc rred for food$ shelter$ clothing and medical attendance. Art. 1-64. The employer shall neither sei#e nor retain any tool or other articles belonging to the laborer. Art. 1-16. Bismissal of laborers shall be s b,ect to the s per%ision of the "o%ernment$ nder special laws. Art. 1-11. !wners of enterprises and other employers are obliged to pay compensation for the death of or in, ries to their laborers$ workmen$ mechanics or other employees$ e%en tho gh the e%ent may ha%e been p rely accidental or entirely d e to a fort ito s ca se$ if the death or personal in, ry arose o t of and in the co rse of the employment. The employer is also liable for compensation if the employee contracts any illness or disease ca sed by s ch employment or as the res lt of the nat re of the employment. (f the mishap was d e to the employee:s own notorio s negligence$ or %ol ntary act$ or dr nkenness$ the employer shall not be liable for compensation. 0hen the employee:s lack of d e care contrib ted to his death or in, ry$ the compensation shall be e. itably red ced. Art. 1-12. (f the death or in, ry is d e to the negligence of a fellow worker$ the latter and the employer shall be solidarily liable for compensation. (f a fellow worker:s intentional malicio s act is the only ca se of the death or in, ry$ the employer shall not be answerable$ nless it sho ld be shown that the latter did not e)ercise d e diligence in the selection or s per%ision of the plaintiff:s fellow worker.

SECTION 3. " C,nt*+0t 4,* + Pi!0! ,4 W,*B

Art. 1-1'. Ay the contract for a piece of work the contractor binds himself to e)ec te a piece of work for the employer$ in consideration of a certain price or compensation. The contractor may either employ only his labor or skill$ or also f rnish the material. (1511a) Art. 1-1*. (f the contractor agrees to prod ce the work from material f rnished by him$ he shall deli%er the thing prod ced to the employer and transfer dominion o%er the thing. This contract shall be go%erned by the following articles as well as by the pertinent pro%isions on warranty of title and against hidden defects and the payment of price in a contract of sale. (n) Art. 1-15. The contract shall e)ec te the work in s ch a manner that it has the . alities agreed pon and has no defects which destroy or lessen its %al e or fitness for its ordinary

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or stip lated se. ?ho ld the work be not of s ch . ality$ the employer may re. ire that the contractor remo%e the defect or e)ec te another work. (f the contract fails or ref ses to comply with this obligation$ the employer may ha%e the defect remo%ed or another work e)ec ted$ at the contractor:s cost. (n) Art. 1-16. An agreement wai%ing or limiting the contractor:s liability for any defect in the work is %oid if the contractor acted fra d lently. (n) Art. 1-1-. (f the contractor bo nd himself to f rnish the material$ he shall s ffer the loss if the work sho ld be destroyed before its deli%ery$ sa%e when there has been delay in recei%ing it. (1514) Art. 1-11. The contractor who has ndertaken to p t only his work or skill$ cannot claim any compensation if the work sho ld be destroyed before its deli%ery$ nless there has been delay in recei%ing it$ or if the destr ction was ca sed by the poor . ality of the material$ pro%ided this fact was comm nicated in d e time to the owner. (f the material is lost thro gh a fort ito s e%ent$ the contract is e)ting ished. (1546a) Art. 1-14. Acceptance of the work by the employer relie%es the contractor of liability for any defect in the work$ nless; (1) The defect is hidden and the employer is not$ by his special knowledge$ e)pected to recogni#e the same7 or (2) The employer e)pressly reser%es his rights against the contractor by reason of the defect. (n) Art. 1-26. The price or compensation shall be paid at the time and place of deli%ery of the work$ nless there is a stip lation to the contrary. (f the work is to be deli%ered partially$ the price or compensation for each part ha%ing been fi)ed$ the s m shall be paid at the time and place of deli%ery$ in the absence if stip lation. (n) Art. 1-21. (f$ in the e)ec tion of the work$ an act of the employer is re. ired$ and he inc rs in delay or fails to perform the act$ the contractor is entitled to a reasonable compensation. The amo nt of the compensation is comp ted$ on the one hand$ by the d ration of the delay and the amo nt of the compensation stip lated$ and on the other hand$ by what the contractor has sa%ed in e)penses by reason of the delay or is able to earn by a different employment of his time and ind stry. (n) Art. 1-22. (f the work cannot be completed on acco nt of a defect in the material f rnished by the employer$ or beca se of orders from the employer$ witho t any fa lt on the part of the contractor$ the latter has a right to an e. itable part of the compensation proportionally to the work done$ and reimb rsement for proper e)penses made. (n) Art. 1-2'. The engineer or architect who drew p the plans and specifications for a b ilding is liable for damages if within fifteen years from the completion of the str ct re$ the same sho ld collapse by reason of a defect in those plans and specifications$ or d e to the defects in the gro nd. The contractor is likewise responsible for the damages if the edifice falls$ within the same period$ on acco nt of defects in the constr ction or the se of materials of inferior . ality f rnished by him$ or d e to any %iolation of the terms of the contract. (f the engineer or architect s per%ises the constr ction$ he shall be solidarily liable with the contractor.

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Acceptance of the b ilding$ after completion$ does not imply wai%er of any of the ca se of action by reason of any defect mentioned in the preceding paragraph. The action m st be bro ght within ten years following the collapse of the b ilding. (n) Art. 1-2*. The contractor who ndertakes to b ild a str ct re or any other work for a stip lated price$ in conformity with plans and specifications agreed pon with the land/ owner$ can neither withdraw from the contract nor demand an increase in the price on acco nt of the higher cost of labor or materials$ sa%e when there has been a change in the plans and specifications$ pro%ided; (1) ? ch change has been a thori#ed by the proprietor in writing7 and (2) The additional price to be paid to the contractor has been determined in writing by both parties. (154'a) Art. 1-25. The owner may withdraw at will from the constr ction of the work$ altho gh it may ha%e been commenced$ indemnifying the contractor for all the latter:s e)penses$ work$ and the sef lness which the owner may obtain therefrom$ and damages. (154*a) Art. 1-26. 0hen a piece of work has been entr sted to a person by reason of his personal . alifications$ the contract is rescinded pon his death. (n this case the proprietor shall pay the heirs of the contractor in proportion to the price agreed pon$ the %al e of the part of the work done$ and of the materials prepared$ pro%ided the latter yield him some benefit. The same r le shall apply if the contractor cannot finish the work d e to circ mstances beyond his control. (1545) Art. 1-2-. The contractor is responsible for the work done by persons employed by him. (1546) Art. 1-21. The contractor is liable for all the claims of laborers and others employed by him$ and of third persons for death or physical in, ries d ring the constr ction. (n) Art. 1-24. Those who p t their labor pon or f rnish materials for a piece of work ndertaken by the contractor ha%e an action against the owner p to the amo nt owing from the latter to the contractor at the time the claim is made. 8owe%er$ the following shall not pre, dice the laborers$ employees and f rnishers of materials; (1) 3ayments made by the owner to the contractor before they are d e7 (2) +en nciation by the contractor of any amo nt d e him from the owner. This article is s b,ect to the pro%isions of special laws. (154-a) Art. 1-'6. (f it is agreed that the work shall be accomplished to the satisfaction of the proprietor$ it is nderstood that in case of disagreement the . estion shall be s b,ect to e)pert , dgment.

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(f the work is s b,ect to the appro%al of a third person$ his decision shall be final$ e)cept in case of fra d or manifest error. (1541a) Art. 1-'1. 8e who has e)ec ted work pledge ntil he pon a mo%able has a right to retain it by way of is paid. (1666)

SECTION ). " C,;;,n C+**i!*. (n) SUBSECTION #. " $!n!*+ P*,-i.i,n.

Art. 1-'2. &ommon carriers are persons$ corporations$ firms or associations engaged in the b siness of carrying or transporting passengers or goods or both$ by land$ water$ or air$ for compensation$ offering their ser%ices to the p blic. Art. 1-''. &ommon carriers$ from the nat re of their b siness and for reasons of p blic policy$ are bo nd to obser%e e)traordinary diligence in the %igilance o%er the goods and for the safety of the passengers transported by them$ according to all the circ mstances of each case. ? ch e)traordinary diligence in the %igilance o%er the goods is f rther e)pressed in Articles 1-'*$ 1-'5$ and 1-*5$ 5os. 5$ 6$ and -$ while the e)traordinary diligence for the safety of the passengers is f rther set forth in Articles 1-55 and 1-56.

SUBSECTION 2. " Vi7i +n0! O-!* $,,8.

Art. 1-'*. &ommon carriers are responsible for the loss$ destr ction$ or deterioration of the goods$ nless the same is d e to any of the following ca ses only; (1) @lood$ storm$ earth. ake$ lightning$ or other nat ral disaster or calamity7 (2) Act of the p blic enemy in war$ whether international or ci%il7 (') Act of omission of the shipper or owner of the goods7 (*) The character of the goods or defects in the packing or in the containers7 (5) !rder or act of competent p blic a thority. Art. 1-'5. (n all cases other than those mentioned in 5os. 1$ 2$ '$ *$ and 5 of the preceding article$ if the goods are lost$ destroyed or deteriorated$ common carriers are pres med to ha%e been at fa lt or to ha%e acted negligently$ nless they pro%e that they obser%ed e)traordinary diligence as re. ired in Article 1-''. Art. 1-'6. The e)traordinary responsibility of the common carrier lasts from the time goods are nconditionally placed in the possession of$ and recei%ed by the carrier transportation ntil the same are deli%ered$ act ally or constr cti%ely$ by the carrier to consignee$ or to the person who has a right to recei%e them$ witho t pre, dice to pro%isions of Article 1-'1. the for the the

Art. 1-'-. The common carrier:s d ty to obser%e e)traordinary diligence o%er the goods remains in f ll force and effect e%en when they are temporarily nloaded or stored in transit$ nless the shipper or owner has made se of the right of stoppage in transitu.

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Art. 1-'1. The e)traordinary liability of the common carrier contin es to be operati%e e%en d ring the time the goods are stored in a wareho se of the carrier at the place of destination$ ntil the consignee has been ad%ised of the arri%al of the goods and has had reasonable opport nity thereafter to remo%e them or otherwise dispose of them. Art. 1-'4. (n order that the common carrier may be e)empted from responsibility$ the nat ral disaster m st ha%e been the pro)imate and only ca se of the loss. 8owe%er$ the common carrier m st e)ercise d e diligence to pre%ent or minimi#e loss before$ d ring and after the occ rrence of flood$ storm or other nat ral disaster in order that the common carrier may be e)empted from liability for the loss$ destr ction$ or deterioration of the goods. The same d ty is inc mbent pon the common carrier in case of an act of the p blic enemy referred to in Article 1-'*$ 5o. 2. Art. 1-*6. (f the common carrier negligently inc rs in delay in transporting the goods$ a nat ral disaster shall not free s ch carrier from responsibility. Art. 1-*1. (f the shipper or owner merely contrib ted to the loss$ destr ction or deterioration of the goods$ the pro)imate ca se thereof being the negligence of the common carrier$ the latter shall be liable in damages$ which howe%er$ shall be e. itably red ced. Art. 1-*2. 9%en if the loss$ destr ction$ or deterioration of the goods sho ld be ca sed by the character of the goods$ or the fa lty nat re of the packing or of the containers$ the common carrier m st e)ercise d e diligence to forestall or lessen the loss. Art. 1-*'. (f thro gh the order of p blic a thority the goods are sei#ed or destroyed$ the common carrier is not responsible$ pro%ided said p blic a thority had power to iss e the order. Art. 1-**. A stip lation between the common carrier and the shipper or owner limiting the liability of the former for the loss$ destr ction$ or deterioration of the goods to a degree less than e)traordinary diligence shall be %alid$ pro%ided it be; (1) (n writing$ signed by the shipper or owner7 (2) ? pported by a %al able consideration other than the ser%ice rendered by the common carrier7 and (') +easonable$ , st and not contrary to p blic policy. Art. 1-*5. Any of the following or similar stip lations shall be considered n, st and contrary to p blic policy; (1) That the goods are transported at the risk of the owner or shipper7 nreasonable$

(2) That the common carrier will not be liable for any loss$ destr ction$ or deterioration of the goods7 (') That the common carrier need not obser%e any diligence in the c stody of the goods7 (*) That the common carrier shall e)ercise a degree of diligence less than that of a good father of a family$ or of a man of ordinary pr dence in the %igilance o%er the mo%ables transported7

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(5) That the common carrier shall not be responsible for the acts or omission of his or its employees7 (6) That the common carrier:s liability for acts committed by thie%es$ or of robbers who do not act with gra%e or irresistible threat$ %iolence or force$ is dispensed with or diminished7 (-) That the common carrier is not responsible for the loss$ destr ction$ or deterioration of goods on acco nt of the defecti%e condition of the car$ %ehicle$ ship$ airplane or other e. ipment sed in the contract of carriage. Art. 1-*6. An agreement limiting the common carrier:s liability may be ann lled by the shipper or owner if the common carrier ref sed to carry the goods nless the former agreed to s ch stip lation. Art. 1-*-. (f the common carrier$ witho t , st ca se$ delays the transportation of the goods or changes the stip lated or s al ro te$ the contract limiting the common carrier:s liability cannot be a%ailed of in case of the loss$ destr ction$ or deterioration of the goods. Art. 1-*1. An agreement limiting the common carrier:s liability for delay on acco nt of strikes or riots is %alid. Art. 1-*4. A stip lation that the common carrier:s liability is limited to the %al e of the goods appearing in the bill of lading$ nless the shipper or owner declares a greater %al e$ is binding. Art. 1-56. A contract fi)ing the s m that may be reco%ered. by the owner or shipper for the loss$ destr ction$ or deterioration of the goods is %alid$ if it is reasonable and , st nder the circ mstances$ and has been fairly and freely agreed pon. Art. 1-51. The fact that the common carrier has no competitor along the line or ro te$ or a part thereof$ to which the contract refers shall be taken into consideration on the . estion of whether or not a stip lation limiting the common carrier:s liability is reasonable$ , st and in consonance with p blic policy. Art. 1-52. 9%en when there is an agreement limiting the liability of the common carrier in the %igilance o%er the goods$ the common carrier is disp tably pres med to ha%e been negligent in case of their loss$ destr ction or deterioration. Art. 1-5'. The law of the co ntry to which the goods are to be transported shall go%ern the liability of the common carrier for their loss$ destr ction or deterioration. Art. 1-5*. The pro%isions of Articles 1-'' to 1-5' shall apply to the passenger:s baggage which is not in his personal c stody or in that of his employee. As to other baggage$ the r les in Articles 1441 and 2666 to 266' concerning the responsibility of hotel/keepers shall be applicable.

SUBSECTION 3. " S+4!t3 ,4 P+..!n7!*.

Art. 1-55. A common carrier is bo nd to carry the passengers safely as far as h man care and foresight can pro%ide$ sing the tmost diligence of %ery ca tio s persons$ with a d e regard for all the circ mstances.

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Art. 1-56. (n case of death of or in, ries to passengers$ common carriers are pres med to ha%e been at fa lt or to ha%e acted negligently$ nless they pro%e that they obser%ed e)traordinary diligence as prescribed in Articles 1-'' and 1-55. Art. 1-5-. The responsibility of a common carrier for the safety of passengers as re. ired in Articles 1-'' and 1-55 cannot be dispensed with or lessened by stip lation$ by the posting of notices$ by statements on tickets$ or otherwise. Art. 1-51. 0hen a passenger is carried grat ito sly$ a stip lation limiting the common carrier:s liability for negligence is %alid$ b t not for wilf l acts or gross negligence. The red ction of fare does not , stify any limitation of the common carrier:s liability. Art. 1-54. &ommon carriers are liable for the death of or in, ries to passengers thro gh the negligence or wilf l acts of the former:s employees$ altho gh s ch employees may ha%e acted beyond the scope of their a thority or in %iolation of the orders of the common carriers. This liability of the common carriers does not cease pon proof that they e)ercised all the diligence of a good father of a family in the selection and s per%ision of their employees. Art. 1-66. The common carrier:s responsibility prescribed in the preceding article cannot be eliminated or limited by stip lation$ by the posting of notices$ by statements on the tickets or otherwise. Art. 1-61. The passenger m st obser%e the diligence of a good father of a family to a%oid in, ry to himself. Art. 1-62. The contrib tory negligence of the passenger does not bar reco%ery of damages for his death or in, ries$ if the pro)imate ca se thereof is the negligence of the common carrier$ b t the amo nt of damages shall be e. itably red ced. Art. 1-6'. A common carrier is responsible for in, ries s ffered by a passenger on acco nt of the wilf l acts or negligence of other passengers or of strangers$ if the common carrier:s employees thro gh the e)ercise of the diligence of a good father of a family co ld ha%e pre%ented or stopped the act or omission.

SUBSECTION ). " C,;;,n P*,-i.i,n.

Art. 1-6*. Bamages in cases comprised in this ?ection shall be awarded in accordance with Title E=((( of this Aook$ concerning Bamages. Article 2266 shall also apply to the death of a passenger ca sed by the breach of contract by a common carrier. Art. 1-65. The 3 blic ?er%ice &ommission may$ on its own motion or on petition of any interested party$ after d e hearing$ cancel the certificate of p blic con%enience granted to any common carrier that repeatedly fails to comply with his or its d ty to obser%e e)traordinary diligence as prescribed in this ?ection. Art. 1-66. (n all matters not reg lated by this &ode$ the rights and obligations of common carriers shall be go%erned by the &ode of &ommerce and by special laws.

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Tit ! I(. " PARTNERSHIP CHAPTER # $ENERAL PROVISIONS

Art. 1-6-. Ay the contract of partnership two or more persons bind themsel%es to contrib te money$ property$ or ind stry to a common f nd$ with the intention of di%iding the profits among themsel%es. Two or more persons may also form a partnership for the e)ercise of a profession. (1665a) Art. 1-61. The partnership has a , dicial personality separate and distinct from that of each of the partners$ e%en in case of fail re to comply with the re. irements of Article 1--2$ first paragraph. (n) Art. 1-64. (n determining whether a partnership e)ists$ these r les shall apply; (1) 9)cept as pro%ided by Article 1125$ persons who are not partners as to each other are not partners as to third persons7 (2) &o/ownership or co/possession does not of itself establish a partnership$ whether s ch/co/owners or co/possessors do or do not share any profits made by the se of the property7 (') The sharing of gross ret rns does not of itself establish a partnership$ whether or not the persons sharing them ha%e a ,oint or common right or interest in any property from which the ret rns are deri%ed7 (*) The receipt by a person of a share of the profits of a b siness is prima facie e%idence that he is a partner in the b siness$ b t no s ch inference shall be drawn if s ch profits were recei%ed in payment;

(a) As a debt by installments or otherwise7 (b) As wages of an employee or rent to a landlord7 (c) As an ann ity to a widow or representati%e of a deceased partner7 (d) As interest on a loan$ tho gh the amo nt of payment %ary with the profits of the b siness7 (e) As the consideration for the sale of a goodwill of a b siness or other property by installments or otherwise. (n) Art. 1--6. A partnership m st ha%e a lawf l ob,ect or p rpose$ and m st be established for the common benefit or interest of the partners. 0hen an nlawf l partnership is dissol%ed by a , dicial decree$ the profits shall be confiscated in fa%or of the ?tate$ witho t pre, dice to the pro%isions of the 3enal &ode go%erning the confiscation of the instr ments and effects of a crime. (1666a)

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Art. 1--1. A partnership may be constit ted in any form$ e)cept where immo%able property or real rights are contrib ted thereto$ in which case a p blic instr ment shall be necessary. (166-a) Art. 1--2. 9%ery contract of partnership ha%ing a capital of three tho sand pesos or more$ in money or property$ shall appear in a p blic instr ment$ which m st be recorded in the !ffice of the ?ec rities and 9)change &ommission. @ail re to comply with the re. irements of the preceding paragraph shall not affect the liability of the partnership and the members thereof to third persons. (n) Art. 1--'. A contract of partnership is %oid$ whene%er immo%able property is contrib ted thereto$ if an in%entory of said property is not made$ signed by the parties$ and attached to the p blic instr ment. (1661a) Art. 1--*. Any immo%able property or an interest therein may be ac. ired in the partnership name. Title so ac. ired can be con%eyed only in the partnership name. (n) Art. 1--5. Associations and societies$ whose articles are kept secret among the members$ and wherein any one of the members may contract in his own name with third persons$ shall ha%e no , ridical personality$ and shall be go%erned by the pro%isions relating to co/ ownership. (1664) Art. 1--6. As to its ob,ect$ a partnership is either ni%ersal or partic lar. As regards the liability of the partners$ a partnership may be general or limited. (16-1a) Art. 1---. A (16-2) ni%ersal partnership may refer to all the present property or to all the profits.

Art. 1--1. A partnership of all present property is that in which the partners contrib te all the property which act ally belongs to them to a common f nd$ with the intention of di%iding the same among themsel%es$ as well as all the profits which they may ac. ire therewith. (16-') Art. 1--4. (n a ni%ersal partnership of all present property$ the property which belongs to each of the partners at the time of the constit tion of the partnership$ becomes the common property of all the partners$ as well as all the profits which they may ac. ire therewith. A stip lation for the common en,oyment of any other profits may also be made7 b t the property which the partners may ac. ire s bse. ently by inheritance$ legacy$ or donation cannot be incl ded in s ch stip lation$ e)cept the fr its thereof. (16-*a) Art. 1-16. A ni%ersal partnership of profits comprises all that the partners may ac. ire by their ind stry or work d ring the e)istence of the partnership. <o%able or immo%able property which each of the partners may possess at the time of the celebration of the contract shall contin e to pertain e)cl si%ely to each$ only the s fr ct passing to the partnership. (16-5) Art. 1-11. Articles of ni%ersal partnership$ entered into witho t specification of its nat re$ only constit te a ni%ersal partnership of profits. (16-6)

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Art. 1-12. 3ersons who are prohibited from gi%ing each other any donation or ad%antage cannot enter into ni%ersal partnership. (16--) Art. 1-1'. A partic lar partnership has for its ob,ect determinate things$ their se or fr its$ or specific ndertaking$ or the e)ercise of a profession or %ocation. (16-1)

CHAPTER 2 OBLI$ATIONS OF THE PARTNERS SECTION #. " O9 i7+ti,n. ,4 t5! P+*tn!*. A;,n7 T5!;.! -!.
Art. 1-1*. A partnership begins from the moment of the e)ec tion of the contract$ is otherwise stip lated. (16-4) nless it

Art. 1-15. 0hen a partnership for a fi)ed term or partic lar ndertaking is contin ed after the termination of s ch term or partic lar ndertaking witho t any e)press agreement$ the rights and d ties of the partners remain the same as they were at s ch termination$ so far as is consistent with a partnership at will. A contin ation of the b siness by the partners or s ch of them as habit ally acted therein d ring the term$ witho t any settlement or li. idation of the partnership affairs$ is prima facie e%idence of a contin ation of the partnership. (n) Art. 1-16. 9%ery partner is a debtor of the partnership for whate%er he may ha%e promised to contrib te thereto. 8e shall also be bo nd for warranty in case of e%iction with regard to specific and determinate things which he may ha%e contrib ted to the partnership$ in the same cases and in the same manner as the %endor is bo nd with respect to the %endee. 8e shall also be liable for the fr its thereof from the time they sho ld ha%e been deli%ered$ witho t the need of any demand. (1611a) Art. 1-1-. 0hen the capital or a part thereof which a partner is bo nd to contrib te consists of goods$ their appraisal m st be made in the manner prescribed in the contract of partnership$ and in the absence of stip lation$ it shall be made by e)perts chosen by the partners$ and according to c rrent prices$ the s bse. ent changes thereof being for acco nt of the partnership. (n) Art. 1-11. A partner who has ndertaken to contrib te a s m of money and fails to do so becomes a debtor for the interest and damages from the time he sho ld ha%e complied with his obligation. The same r le applies to any amo nt he may ha%e taken from the partnership coffers$ and his liability shall begin from the time he con%erted the amo nt to his own se. (1612) Art. 1-14. An ind strial partner cannot engage in b siness for himself$ nless the partnership e)pressly permits him to do so7 and if he sho ld do so$ the capitalist partners may either e)cl de him from the firm or a%ail themsel%es of the benefits which he may ha%e obtained in %iolation of this pro%ision$ with a right to damages in either case. (n)

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Art. 1-46. >nless there is a stip lation to the contrary$ the partners shall contrib te e. al shares to the capital of the partnership. (n) Art. 1-41. (f there is no agreement to the contrary$ in case of an imminent loss of the b siness of the partnership$ any partner who ref ses to contrib te an additional share to the capital$ e)cept an ind strial partner$ to sa%e the %ent re$ shall he obliged to sell his interest to the other partners. (n) Art. 1-42. (f a partner a thori#ed to manage collects a demandable s m which was owed to him in his own name$ from a person who owed the partnership another s m also demandable$ the s m th s collected shall be applied to the two credits in proportion to their amo nts$ e%en tho gh he may ha%e gi%en a receipt for his own credit only7 b t sho ld he ha%e gi%en it for the acco nt of the partnership credit$ the amo nt shall be f lly applied to the latter. The pro%isions of this article are nderstood to be witho t pre, dice to the right granted to the other debtor by Article 1252$ b t only if the personal credit of the partner sho ld be more onero s to him. (161*) Art. 1-4'. A partner who has recei%ed$ in whole or in part$ his share of a partnership credit$ when the other partners ha%e not collected theirs$ shall be obliged$ if the debtor sho ld thereafter become insol%ent$ to bring to the partnership capital what he recei%ed e%en tho gh he may ha%e gi%en receipt for his share only. (1615a) Art. 1-4*. 9%ery partner is responsible to the partnership for damages s ffered by it thro gh his fa lt$ and he cannot compensate them with the profits and benefits which he may ha%e earned for the partnership by his ind stry. 8owe%er$ the co rts may e. itably lessen this responsibility if thro gh the partner:s e)traordinary efforts in other acti%ities of the partnership$ n s al profits ha%e been reali#ed. (1616a) Art. 1-45. The risk of specific and determinate things$ which are not f ngible$ contrib ted to the partnership so that only their se and fr its may be for the common benefit$ shall be borne by the partner who owns them. (f the things contrib te are f ngible$ or cannot be kept witho t deteriorating$ or if they were contrib ted to be sold$ the risk shall be borne by the partnership. (n the absence of stip lation$ the risk of the things bro ght and appraised in the in%entory$ shall also be borne by the partnership$ and in s ch case the claim shall be limited to the %al e at which they were appraised. (161-) Art. 1-46. The partnership shall be responsible to e%ery partner for the amo nts he may ha%e disb rsed on behalf of the partnership and for the corresponding interest$ from the time the e)pense are made7 it shall also answer to each partner for the obligations he may ha%e contracted in good faith in the interest of the partnership b siness$ and for risks in conse. ence of its management. (1611a) Art. 1-4-. The losses and profits shall be distrib ted in conformity with the agreement. (f only the share of each partner in the profits has been agreed pon$ the share of each in the losses shall be in the same proportion. (n the absence of stip lation$ the share of each partner in the profits and losses shall be in proportion to what he may ha%e contrib ted$ b t the ind strial partner shall not be liable for the losses. As for the profits$ the ind strial partner shall recei%e s ch share as may be , st

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and e. itable nder the circ mstances. (f besides his ser%ices he has contrib ted capital$ he shall also recei%e a share in the profits in proportion to his capital. (1614a) Art. 1-41. (f the partners ha%e agreed to intr st to a third person the designation of the share of each one in the profits and losses$ s ch designation may be imp gned only when it is manifestly ine. itable. (n no case may a partner who has beg n to e)ec te the decision of the third person$ or who has not imp gned the same within a period of three months from the time he had knowledge thereof$ complain of s ch decision. The designation of losses and profits cannot be intr sted to one of the partners. (1646) Art. 1-44. A stip lation which e)cl des one or more partners from any share in the profits or losses is %oid. (1641) Art. 1166. The partner who has been appointed manager in the articles of partnership may e)ec te all acts of administration despite the opposition of his partners$ nless he sho ld act in bad faith7 and his power is irre%ocable witho t , st or lawf l ca se. The %ote of the partners representing the controlling interest shall be necessary for s ch re%ocation of power. A power granted after the partnership has been constit ted may be re%oked at any time. (1642a) Art. 1161. (f two or more partners ha%e been intr sted with the management of the partnership witho t specification of their respecti%e d ties$ or witho t a stip lation that one of them shall not act witho t the consent of all the others$ each one may separately e)ec te all acts of administration$ b t if any of them sho ld oppose the acts of the others$ the decision of the ma,ority shall pre%ail. (n case of a tie$ the matter shall be decided by the partners owning the controlling interest. (164'a) Art. 1162. (n case it sho ld ha%e been stip lated that none of the managing partners shall act witho t the consent of the others$ the conc rrence of all shall be necessary for the %alidity of the acts$ and the absence or disability of any one of them cannot be alleged$ nless there is imminent danger of gra%e or irreparable in, ry to the partnership. (164*) Art. 116'. 0hen the manner of management has not been agreed shall be obser%ed; pon$ the following r les

(1) All the partners shall be considered agents and whate%er any one of them may do alone shall bind the partnership$ witho t pre, dice to the pro%isions of Article 1161. (2) 5one of the partners may$ witho t the consent of the others$ make any important alteration in the immo%able property of the partnership$ e%en if it may be sef l to the partnership. A t if the ref sal of consent by the other partners is manifestly pre, dicial to the interest of the partnership$ the co rt:s inter%ention may be so ght. (1645a) Art. 116*. 9%ery partner may associate another person with him in his share$ b t the associate shall not be admitted into the partnership witho t the consent of all the other partners$ e%en if the partner ha%ing an associate sho ld be a manager. (1646)

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Art. 1165. The partnership books shall be kept$ s b,ect to any agreement between the partners$ at the principal place of b siness of the partnership$ and e%ery partner shall at any reasonable ho r ha%e access to and may inspect and copy any of them. (n) Art. 1166. 3artners shall render on demand tr e and f ll information of all things affecting the partnership to any partner or the legal representati%e of any deceased partner or of any partner nder legal disability. (n) Art. 116-. 9%ery partner m st acco nt to the partnership for any benefit$ and hold as tr stee for it any profits deri%ed by him witho t the consent of the other partners from any transaction connected with the formation$ cond ct$ or li. idation of the partnership or from any se by him of its property. (n) Art. 1161. The capitalist partners cannot engage for their own acco nt in any operation which is of the kind of b siness in which the partnership is engaged$ nless there is a stip lation to the contrary. Any capitalist partner %iolating this prohibition shall bring to the common f nds any profits accr ing to him from his transactions$ and shall personally bear all the losses. (n) Art. 1164. Any partner shall ha%e the right to a formal acco nt as to partnership affairs; (1) (f he is wrongf lly e)cl ded from the partnership b siness or possession of its property by his co/partners7 (2) (f the right e)ists nder the terms of any agreement7 (') As pro%ided by article 116-7 (*) 0hene%er other circ mstances render it , st and reasonable. (n)

SECTION 2. " P*,2!*t3 Ri75t. ,4 + P+*tn!*

Art. 1116. The property rights of a partner are; (1) 8is rights in specific partnership property7 (2) 8is interest in the partnership7 and (') 8is right to participate in the management. (n) Art. 1111. A partner is co/owner with his partners of specific partnership property. The incidents of this co/ownership are s ch that; (1) A partner$ s b,ect to the pro%isions of this Title and to any agreement between the partners$ has an e. al right with his partners to possess specific partnership property for partnership p rposes7 b t he has no right to possess s ch property for any other p rpose witho t the consent of his partners7 (2) A partner:s right in specific partnership property is not assignable e)cept in connection with the assignment of rights of all the partners in the same property7

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(') A partner:s right in specific partnership property is not s b,ect to attachment or e)ec tion$ e)cept on a claim against the partnership. 0hen partnership property is attached for a partnership debt the partners$ or any of them$ or the representati%es of a deceased partner$ cannot claim any right nder the homestead or e)emption laws7 (*) A partner:s right in specific partnership property is not s b,ect to legal s pport nder Article 241. (n) Art. 1112. A partner:s interest in the partnership is his share of the profits and s rpl s. (n) Art. 111'. A con%eyance by a partner of his whole interest in the partnership does not of itself dissol%e the partnership$ or$ as against the other partners in the absence of agreement$ entitle the assignee$ d ring the contin ance of the partnership$ to interfere in the management or administration of the partnership b siness or affairs$ or to re. ire any information or acco nt of partnership transactions$ or to inspect the partnership books7 b t it merely entitles the assignee to recei%e in accordance with his contract the profits to which the assigning partner wo ld otherwise be entitled. 8owe%er$ in case of fra d in the management of the partnership$ the assignee may a%ail himself of the s al remedies. (n case of a dissol tion of the partnership$ the assignee is entitled to recei%e his assignor:s interest and may re. ire an acco nt from the date only of the last acco nt agreed to by all the partners. (n) Art. 111*. 0itho t pre, dice to the preferred rights of partnership creditors nder Article 112-$ on d e application to a competent co rt by any , dgment creditor of a partner$ the co rt which entered the , dgment$ or any other co rt$ may charge the interest of the debtor partner with payment of the nsatisfied amo nt of s ch , dgment debt with interest thereon7 and may then or later appoint a recei%er of his share of the profits$ and of any other money d e or to fall d e to him in respect of the partnership$ and make all other orders$ directions$ acco nts and in. iries which the debtor partner might ha%e made$ or which the circ mstances of the case may re. ire. The interest charged may be redeemed at any time before foreclos re$ or in case of a sale being directed by the co rt$ may be p rchased witho t thereby ca sing a dissol tion; (1) 0ith separate property$ by any one or more of the partners7 or (2) 0ith partnership property$ by any one or more of the partners with the consent of all the partners whose interests are not so charged or sold. 5othing in this Title shall be held to depri%e a partner of his right$ if any$ e)emption laws$ as regards his interest in the partnership. (n) nder the

SECTION 3. " O9 i7+ti,n. ,4 t5! P+*tn!*. Wit5 R!7+*8 t, T5i*8 P!*.,n.

Art. 1115. 9%ery partnership shall operate nder a firm name$ which may or may not incl de the name of one or more of the partners. Those who$ not being members of the partnership$ incl de their names in the firm name$ shall be s b,ect to the liability of a partner. (n)

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Art. 1116. All partners$ incl ding ind strial ones$ shall be liable pro rata with all their property and after all the partnership assets ha%e been e)ha sted$ for the contracts which may be entered into in the name and for the acco nt of the partnership$ nder its signat re and by a person a thori#ed to act for the partnership. 8owe%er$ any partner may enter into a separate obligation to perform a partnership contract. (n) Art. 111-. Any stip lation against the liability laid down in the preceding article shall be %oid$ e)cept as among the partners. (n) Art. 1111. 9%ery partner is an agent of the partnership for the p rpose of its b siness$ and the act of e%ery partner$ incl ding the e)ec tion in the partnership name of any instr ment$ for apparently carrying on in the s al way the b siness of the partnership of which he is a member binds the partnership$ nless the partner so acting has in fact no a thority to act for the partnership in the partic lar matter$ and the person with whom he is dealing has knowledge of the fact that he has no s ch a thority. An act of a partner which is not apparently for the carrying on of b siness of the partnership in the s al way does not bind the partnership nless a thori#ed by the other partners. 9)cept when a thori#ed by the other partners or nless they ha%e abandoned the b siness$ one or more b t less than all the partners ha%e no a thority to; (1) Assign the partnership property in tr st for creditors or on the assignee:s promise to pay the debts of the partnership7 (2) Bispose of the good/will of the b siness7 (') Bo any other act which wo ld make it impossible to carry on the ordinary b siness of a partnership7 (*) &onfess a , dgment7 (5) 9nter into a compromise concerning a partnership claim or liability7 (6) ? bmit a partnership claim or liability to arbitration7 (-) +eno nce a claim of the partnership. 5o act of a partner in contra%ention of a restriction on a thority shall bind the partnership to persons ha%ing knowledge of the restriction. (n) Art. 1114. 0here title to real property is in the partnership name$ any partner may con%ey title to s ch property by a con%eyance e)ec ted in the partnership name7 b t the partnership may reco%er s ch property nless the partner:s act binds the partnership nder the pro%isions of the first paragraph of article 1111$ or nless s ch property has been con%eyed by the grantee or a person claiming thro gh s ch grantee to a holder for %al e witho t knowledge that the partner$ in making the con%eyance$ has e)ceeded his a thority. 0here title to real property is in the name of the partnership$ a con%eyance e)ec ted by a partner$ in his own name$ passes the e. itable interest of the partnership$ pro%ided the act is one within the a thority of the partner nder the pro%isions of the first paragraph of Article 1111.

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0here title to real property is in the name of one or more b t not all the partners$ and the record does not disclose the right of the partnership$ the partners in whose name the title stands may con%ey title to s ch property$ b t the partnership may reco%er s ch property if the partners: act does not bind the partnership nder the pro%isions of the first paragraph of Article 1111$ nless the p rchaser or his assignee$ is a holder for %al e$ witho t knowledge. 0here the title to real property is in the name of one or more or all the partners$ or in a third person in tr st for the partnership$ a con%eyance e)ec ted by a partner in the partnership name$ or in his own name$ passes the e. itable interest of the partnership$ pro%ided the act is one within the a thority of the partner nder the pro%isions of the first paragraph of Article 1111. 0here the title to real property is in the name of all the partners a con%eyance e)ec ted by all the partners passes all their rights in s ch property. (n) Art. 1126. An admission or representation made by any partner concerning partnership affairs within the scope of his a thority in accordance with this Title is e%idence against the partnership. (n) Art. 1121. 5otice to any partner of any matter relating to partnership affairs$ and the knowledge of the partner acting in the partic lar matter$ ac. ired while a partner or then present to his mind$ and the knowledge of any other partner who reasonably co ld and sho ld ha%e comm nicated it to the acting partner$ operate as notice to or knowledge of the partnership$ e)cept in the case of fra d on the partnership$ committed by or with the consent of that partner. (n) Art. 1122. 0here$ by any wrongf l act or omission of any partner acting in the ordinary co rse of the b siness of the partnership or with the a thority of co/partners$ loss or in, ry is ca sed to any person$ not being a partner in the partnership$ or any penalty is inc rred$ the partnership is liable therefor to the same e)tent as the partner so acting or omitting to act. (n) Art. 112'. The partnership is bo nd to make good the loss; (1) 0here one partner acting within the scope of his apparent a thority recei%es money or property of a third person and misapplies it7 and (2) 0here the partnership in the co rse of its b siness recei%es money or property of a third person and the money or property so recei%ed is misapplied by any partner while it is in the c stody of the partnership. (n) Art. 112*. All partners are liable solitarily with the partnership for e%erything chargeable to the partnership nder Articles 1122 and 112'. (n) Art. 1125. 0hen a person$ by words spoken or written or by cond ct$ represents himself$ or consents to another representing him to anyone$ as a partner in an e)isting partnership or with one or more persons not act al partners$ he is liable to any s ch persons to whom s ch representation has been made$ who has$ on the faith of s ch representation$ gi%en credit to the act al or apparent partnership$ and if he has made s ch representation or consented to its being made in a p blic manner he is liable to s ch person$ whether the representation has or has not been made or comm nicated to s ch person so gi%ing credit by or with the knowledge of the apparent partner making the representation or consenting to its being made;

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(1) 0hen a partnership liability res lts$ he is liable as tho gh he were an act al member of the partnership7 (2) 0hen no partnership liability res lts$ he is liable pro rata with the other persons$ if any$ so consenting to the contract or representation as to inc r liability$ otherwise separately. 0hen a person has been th s represented to be a partner in an e)isting partnership$ or with one or more persons not act al partners$ he is an agent of the persons consenting to s ch representation to bind them to the same e)tent and in the same manner as tho gh he were a partner in fact$ with respect to persons who rely pon the representation. 0hen all the members of the e)isting partnership consent to the representation$ a partnership act or obligation res lts7 b t in all other cases it is the ,oint act or obligation of the person acting and the persons consenting to the representation. (n) Art. 1126. A person admitted as a partner into an e)isting partnership is liable for all the obligations of the partnership arising before his admission as tho gh he had been a partner when s ch obligations were inc rred$ e)cept that this liability shall be satisfied only o t of partnership property$ nless there is a stip lation to the contrary. (n) Art. 112-. The creditors of the partnership shall be preferred to those of each partner as regards the partnership property. 0itho t pre, dice to this right$ the pri%ate creditors of each partner may ask the attachment and p blic sale of the share of the latter in the partnership assets. (n)

CHAPTER 3 DISSOLUTION AND WINDIN$ UP

Art. 1121. The dissol tion of a partnership is the change in the relation of the partners ca sed by any partner ceasing to be associated in the carrying on as disting ished from the winding p of the b siness. (n) Art. 1124. !n dissol tion the partnership is not terminated$ b t contin es p of partnership affairs is completed. (n) Art. 11'6. Bissol tion is ca sed; (1) 0itho t %iolation of the agreement between the partners; (a) Ay the termination of the definite term or partic lar in the agreement7 ntil the winding

ndertaking specified

(b) Ay the e)press will of any partner$ who m st act in good faith$ when no definite term or partic lar is specified7 (c) Ay the e)press will of all the partners who ha%e not assigned their interests or s ffered them to be charged for their separate debts$ either before or after the termination of any specified term or partic lar ndertaking7

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(d) Ay the e)p lsion of any partner from the b siness bona fide in accordance with s ch a power conferred by the agreement between the partners7 (2) (n contra%ention of the agreement between the partners$ where the circ mstances do not permit a dissol tion nder any other pro%ision of this article$ by the e)press will of any partner at any time7 (') Ay any e%ent which makes it nlawf l for the b siness of the partnership to be carried on or for the members to carry it on in partnership7 (*) 0hen a specific thing which a partner had promised to contrib te to the partnership$ perishes before the deli%ery7 in any case by the loss of the thing$ when the partner who contrib ted it ha%ing reser%ed the ownership thereof$ has only transferred to the partnership the se or en,oyment of the same7 b t the partnership shall not be dissol%ed by the loss of the thing when it occ rs after the partnership has ac. ired the ownership thereof7 (5) Ay the death of any partner7 (6) Ay the insol%ency of any partner or of the partnership7 (-) Ay the ci%il interdiction of any partner7 (1) Ay decree of co rt nder the following article. (1-66a and 1-61a) Art. 11'1. !n application by or for a partner the co rt shall decree a dissol tion whene%er; (1) A partner has been declared insane in any , dicial proceeding or is shown to be of nso nd mind7 (2) A partner becomes in any other way incapable of performing his part of the partnership contract7 (') A partner has been g ilty of s ch cond ct as tends to affect pre, dicially the carrying on of the b siness7 (*) A partner wilf lly or persistently commits a breach of the partnership agreement$ or otherwise so cond cts himself in matters relating to the partnership b siness that it is not reasonably practicable to carry on the b siness in partnership with him7 (5) The b siness of the partnership can only be carried on at a loss7 (6) !ther circ mstances render a dissol tion e. itable. !n the application of the p rchaser of a partner:s interest nder Article 111' or 111*; (1) After the termination of the specified term or partic lar ndertaking7 (2) At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was iss ed. (n) Art. 11'2. 9)cept so far as may be necessary to wind p partnership affairs or to complete transactions beg n b t not then finished$ dissol tion terminates all a thority of any partner to act for the partnership;

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(1) 0ith respect to the partners; (a) 0hen the dissol tion is not by the act$ insol%ency or death of a partner7 or (b) 0hen the dissol tion is by s ch act$ insol%ency or death of a partner$ in cases where article 11'' so re. ires7 (2) 0ith respect to persons not partners$ as declared in article 11'*. (n) Art. 11''. 0here the dissol tion is ca sed by the act$ death or insol%ency of a partner$ each partner is liable to his co/partners for his share of any liability created by any partner acting for the partnership as if the partnership had not been dissol%ed nless; (1) The dissol tion being by act of any partner$ the partner acting for the partnership had knowledge of the dissol tion7 or (2) The dissol tion being by the death or insol%ency of a partner$ the partner acting for the partnership had knowledge or notice of the death or insol%ency. Art. 11'*. After dissol tion$ a partner can bind the partnership$ e)cept as pro%ided in the third paragraph of this article; (1) Ay any act appropriate for winding p partnership affairs or completing transactions nfinished at dissol tion7 (2) Ay any transaction which wo ld bind the partnership if dissol tion had not taken place$ pro%ided the other party to the transaction; (a) 8ad e)tended credit to the partnership prior to dissol tion and had no knowledge or notice of the dissol tion7 or (b) Tho gh he had not so e)tended credit$ had ne%ertheless known of the partnership prior to dissol tion$ and$ ha%ing no knowledge or notice of dissol tion$ the fact of dissol tion had not been ad%ertised in a newspaper of general circ lation in the place (or in each place if more than one) at which the partnership b siness was reg larly carried on. The liability of a partner nder the first paragraph$ 5o. 2$ shall be satisfied o t of partnership assets alone when s ch partner had been prior to dissol tion; (1) >nknown as a partner to the person with whom the contract is made7 and (2) ?o far nknown and inacti%e in partnership affairs that the b siness rep tation of the partnership co ld not be said to ha%e been in any degree d e to his connection with it. The partnership is in no case bo nd by any act of a partner after dissol tion; (1) 0here the partnership is dissol%ed beca se it is nlawf l to carry on the b siness$ nless the act is appropriate for winding p partnership affairs7 or (2) 0here the partner has become insol%ent7 or (') 0here the partner has no a thority to wind transaction with one who; p partnership affairs7 e)cept by a

(a) 8ad e)tended credit to the partnership prior to dissol tion and had no knowledge or notice of his want of a thority7 or

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(b) 8ad not e)tended credit to the partnership prior to dissol tion$ and$ ha%ing no knowledge or notice of his want of a thority$ the fact of his want of a thority has not been ad%ertised in the manner pro%ided for ad%ertising the fact of dissol tion in the first paragraph$ 5o. 2 (b). 5othing in this article shall affect the liability nder Article 1125 of any person who$ after dissol tion$ represents himself or consents to another representing him as a partner in a partnership engaged in carrying b siness. (n) Art. 11'5. The dissol tion of the partnership does not of itself discharge the e)isting liability of any partner. A partner is discharged from any e)isting liability pon dissol tion of the partnership by an agreement to that effect between himself$ the partnership creditor and the person or partnership contin ing the b siness7 and s ch agreement may be inferred from the co rse of dealing between the creditor ha%ing knowledge of the dissol tion and the person or partnership contin ing the b siness. The indi%id al property of a deceased partner shall be liable for all obligations of the partnership inc rred while he was a partner$ b t s b,ect to the prior payment of his separate debts. (n) Art. 11'6. >nless otherwise agreed$ the partners who ha%e not wrongf lly dissol%ed the partnership or the legal representati%e of the last s r%i%ing partner$ not insol%ent$ has the right to wind p the partnership affairs$ pro%ided$ howe%er$ that any partner$ his legal representati%e or his assignee$ pon ca se shown$ may obtain winding p by the co rt. (n) Art. 11'-. 0hen dissol tion is ca sed in any way$ e)cept in contra%ention of the partnership agreement$ each partner$ as against his co/partners and all persons claiming thro gh them in respect of their interests in the partnership$ nless otherwise agreed$ may ha%e the partnership property applied to discharge its liabilities$ and the s rpl s applied to pay in cash the net amo nt owing to the respecti%e partners. A t if dissol tion is ca sed by e)p lsion of a partner$ bona fide nder the partnership agreement and if the e)pelled partner is discharged from all partnership liabilities$ either by payment or agreement nder the second paragraph of Article 11'5$ he shall recei%e in cash only the net amo nt d e him from the partnership. 0hen dissol tion is ca sed in contra%ention of the partnership agreement the rights of the partners shall be as follows;

(1)

9ach partner who has not ca sed dissol tion wrongf lly shall ha%e; (a) All the rights specified in the first paragraph of this article$ and (b) The right$ as against each partner who has ca sed the dissol tion wrongf lly$ to damages breach of the agreement.

(2) The partners who ha%e not ca sed the dissol tion wrongf lly$ if they all desire to contin e the b siness in the same name either by themsel%es or ,ointly with others$ may do so$ d ring the agreed term for the partnership and for that p rpose may possess the partnership property$ pro%ided they sec re the payment by bond appro%ed by the co rt$ or pay any partner who has ca sed the dissol tion wrongf lly$ the %al e of his interest in the partnership at the dissol tion$ less any damages

65

reco%erable nder the second paragraph$ 5o. 1 (b) of this article$ and in like manner indemnify him against all present or f t re partnership liabilities. (') A partner who has ca sed the dissol tion wrongf lly shall ha%e; (a) (f the b siness is not contin ed nder the pro%isions of the second paragraph$ 5o. 2$ all the rights of a partner nder the first paragraph$ s b,ect to liability for damages in the second paragraph$ 5o. 1 (b)$ of this article. (b) (f the b siness is contin ed nder the second paragraph$ 5o. 2$ of this article$ the right as against his co/partners and all claiming thro gh them in respect of their interests in the partnership$ to ha%e the %al e of his interest in the partnership$ less any damage ca sed to his co/partners by the dissol tion$ ascertained and paid to him in cash$ or the payment sec red by a bond appro%ed by the co rt$ and to be released from all e)isting liabilities of the partnership7 b t in ascertaining the %al e of the partner:s interest the %al e of the good/will of the b siness shall not be considered. (n) Art. 11'1. 0here a partnership contract is rescinded on the gro nd of the fra d or misrepresentation of one of the parties thereto$ the party entitled to rescind is$ witho t pre, dice to any other right$ entitled; (1) To a lien on$ or right of retention of$ the s rpl s of the partnership property after satisfying the partnership liabilities to third persons for any s m of money paid by him for the p rchase of an interest in the partnership and for any capital or ad%ances contrib ted by him7 (2) To stand$ after all liabilities to third persons ha%e been satisfied$ in the place of the creditors of the partnership for any payments made by him in respect of the partnership liabilities7 and (') To be indemnified by the person g ilty of the fra d or making the representation against all debts and liabilities of the partnership. (n) Art. 11'4. (n settling acco nts between the partners after dissol tion$ the following r les shall be obser%ed$ s b,ect to any agreement to the contrary; (1) The assets of the partnership are; (a) The partnership property$ (b) The contrib tions of the partners necessary for the payment of all the liabilities specified in 5o. 2. (2) The liabilities of the partnership shall rank in order of payment$ as follows; (a) Those owing to creditors other than partners$ (b) Those owing to partners other than for capital and profits$ (c) Those owing to partners in respect of capital$ (d) Those owing to partners in respect of profits. (') The assets shall be applied in the order of their declaration in 5o. 1 of this article to the satisfaction of the liabilities.

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(*) The partners shall contrib te$ as pro%ided by article 1-4-$ the amo nt necessary to satisfy the liabilities. (5) An assignee for the benefit of creditors or any person appointed by the co rt shall ha%e the right to enforce the contrib tions specified in the preceding n mber. (6) Any partner or his legal representati%e shall ha%e the right to enforce the contrib tions specified in 5o. *$ to the e)tent of the amo nt which he has paid in e)cess of his share of the liability. (-) The indi%id al property of a deceased partner shall be liable for the contrib tions specified in 5o. *. (1) 0hen partnership property and the indi%id al properties of the partners are in possession of a co rt for distrib tion$ partnership creditors shall ha%e priority on partnership property and separate creditors on indi%id al property$ sa%ing the rights of lien or sec red creditors. (4) 0here a partner has become insol%ent or his estate is insol%ent$ the claims against his separate property shall rank in the following order; (a) Those owing to separate creditors7 (b) Those owing to partnership creditors7 (c) Those owing to partners by way of contrib tion. (n) Art. 11*6. (n the following cases creditors of the dissol%ed partnership are also creditors of the person or partnership contin ing the b siness; (1) 0hen any new partner is admitted into an e)isting partnership$ or when any partner retires and assigns (or the representati%e of the deceased partner assigns) his rights in partnership property to two or more of the partners$ or to one or more of the partners and one or more third persons$ if the b siness is contin ed witho t li. idation of the partnership affairs7 (2) 0hen all b t one partner retire and assign (or the representati%e of a deceased partner assigns) their rights in partnership property to the remaining partner$ who contin es the b siness witho t li. idation of partnership affairs$ either alone or with others7 (') 0hen any partner retires or dies and the b siness of the dissol%ed partnership is contin ed as set forth in 5os. 1 and 2 of this article$ with the consent of the retired partners or the representati%e of the deceased partner$ b t witho t any assignment of his right in partnership property7 (*) 0hen all the partners or their representati%es assign their rights in partnership property to one or more third persons who promise to pay the debts and who contin e the b siness of the dissol%ed partnership7 (5) 0hen any partner wrongf lly ca ses a dissol tion and the remaining partners contin e the b siness nder the pro%isions of article 11'-$ second paragraph$ 5o. 2$ either alone or with others$ and witho t li. idation of the partnership affairs7

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(6) 0hen a partner is e)pelled and the remaining partners contin e the b siness either alone or with others witho t li. idation of the partnership affairs. The liability of a third person becoming a partner in the partnership contin ing the b siness$ nder this article$ to the creditors of the dissol%ed partnership shall be satisfied o t of the partnership property only$ nless there is a stip lation to the contrary. 0hen the b siness of a partnership after dissol tion is contin ed nder any conditions set forth in this article the creditors of the dissol%ed partnership$ as against the separate creditors of the retiring or deceased partner or the representati%e of the deceased partner$ ha%e a prior right to any claim of the retired partner or the representati%e of the deceased partner against the person or partnership contin ing the b siness$ on acco nt of the retired or deceased partner:s interest in the dissol%ed partnership or on acco nt of any consideration promised for s ch interest or for his right in partnership property. 5othing in this article shall be held to modify any right of creditors to set aside any assignment on the gro nd of fra d. The se by the person or partnership contin ing the b siness of the partnership name$ or the name of a deceased partner as part thereof$ shall not of itself make the indi%id al property of the deceased partner liable for any debts contracted by s ch person or partnership. (n) Art. 11*1. 0hen any partner retires or dies$ and the b siness is contin ed nder any of the conditions set forth in the preceding article$ or in Article 11'-$ second paragraph$ 5o. 2$ witho t any settlement of acco nts as between him or his estate and the person or partnership contin ing the b siness$ nless otherwise agreed$ he or his legal representati%e as against s ch person or partnership may ha%e the %al e of his interest at the date of dissol tion ascertained$ and shall recei%e as an ordinary creditor an amo nt e. al to the %al e of his interest in the dissol%ed partnership with interest$ or$ at his option or at the option of his legal representati%e$ in lie of interest$ the profits attrib table to the se of his right in the property of the dissol%ed partnership7 pro%ided that the creditors of the dissol%ed partnership as against the separate creditors$ or the representati%e of the retired or deceased partner$ shall ha%e priority on any claim arising nder this article$ as pro%ided Article 11*6$ third paragraph. (n) Art. 11*2. The right to an acco nt of his interest shall accr e to any partner$ or his legal representati%e as against the winding p partners or the s r%i%ing partners or the person or partnership contin ing the b siness$ at the date of dissol tion$ in the absence of any agreement to the contrary. (n)

CHAPTER ) LIMITED PARTNERSHIP (n)

Art. 11*'. A limited partnership is one formed by two or more persons nder the pro%isions of the following article$ ha%ing as members one or more general partners and one or more limited partners. The limited partners as s ch shall not be bo nd by the obligations of the partnership.

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Art. 11**. Two or more persons desiring to form a limited partnership shall; (1) ?ign and swear to a certificate$ which shall state / (a) The name of the partnership$ adding thereto the word "$imited"7 (b) The character of the b siness7 (c) The location of the principal place of b siness7 (d) The name and place of residence of each member$ general and limited partners being respecti%ely designated7 (e) The term for which the partnership is to e)ist7 (f) The amo nt of cash and a description of and the agreed %al e of the other property contrib ted by each limited partner7 (g) The additional contrib tions$ if any$ to be made by each limited partner and the times at which or e%ents on the happening of which they shall be made7 (h) The time$ if agreed to be ret rned7 pon$ when the contrib tion of each limited partner is

(i) The share of the profits or the other compensation by way of income which each limited partner shall recei%e by reason of his contrib tion7 (,) The right$ if gi%en$ of a limited partner to s bstit te an assignee as contrib tor in his place$ and the terms and conditions of the s bstit tion7 (k) The right$ if gi%en$ of the partners to admit additional limited partners7 (l) The right$ if gi%en$ of one or more of the limited partners to priority o%er other limited partners$ as to contrib tions or as to compensation by way of income$ and the nat re of s ch priority7 (m) The right$ if gi%en$ of the remaining general partner or partners to contin e the b siness on the death$ retirement$ ci%il interdiction$ insanity or insol%ency of a general partner7 and (n) The right$ if gi%en$ of a limited partner to demand and recei%e property other than cash in ret rn for his contrib tion. (2) @ile for record the certificate in the !ffice of the ?ec rities and 9)change &ommission. A limited partnership is formed if there has been s bstantial compliance in good faith with the foregoing re. irements. Art. 11*5. The contrib tions of a limited partner may be cash or property$ b t not ser%ices. Art. 11*6. The s rname of a limited partner shall not appear in the partnership name nless;

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(1) (t is also the s rname of a general partner$ or (2) 3rior to the time when the limited partner became s ch$ the b siness has been carried on nder a name in which his s rname appeared. A limited partner whose s rname appears in a partnership name contrary to the pro%isions of the first paragraph is liable as a general partner to partnership creditors who e)tend credit to the partnership witho t act al knowledge that he is not a general partner. Art. 11*-. (f the certificate contains a false statement$ one who s ffers loss by reliance on s ch statement may hold liable any party to the certificate who knew the statement to be false; (1) At the time he signed the certificate$ or (2) ? bse. ently$ b t within a s fficient time before the statement was relied pon to enable him to cancel or amend the certificate$ or to file a petition for its cancellation or amendment as pro%ided in Article 1165. Art. 11*1. A limited partner shall not become liable as a general partner nless$ in addition to the e)ercise of his rights and powers as a limited partner$ he takes part in the control of the b siness. Art. 11*4. After the formation of a lifted partnership$ additional limited partners may be admitted pon filing an amendment to the original certificate in accordance with the re. irements of Article 1165. Art. 1156. A general partner shall ha%e all the rights and powers and be s b,ect to all the restrictions and liabilities of a partner in a partnership witho t limited partners. 8owe%er$ witho t the written consent or ratification of the specific act by all the limited partners$ a general partner or all of the general partners ha%e no a thority to; (1) Bo any act in contra%ention of the certificate7 (2) Bo any act which wo ld make it impossible to carry on the ordinary b siness of the partnership7 (') &onfess a , dgment against the partnership7 (*) 3ossess partnership property$ or assign their rights in specific partnership property$ for other than a partnership p rpose7 (5) Admit a person as a general partner7 (6) Admit a person as a limited partner$ certificate7 nless the right so to do is gi%en in the

(-) &ontin e the b siness with partnership property on the death$ retirement$ insanity$ ci%il interdiction or insol%ency of a general partner$ nless the right so to do is gi%en in the certificate. Art. 1151. A limited partner shall ha%e the same rights as a general partner to;

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(1) 8a%e the partnership books kept at the principal place of b siness of the partnership$ and at a reasonable ho r to inspect and copy any of them7 (2) 8a%e on demand tr e and f ll information of all things affecting the partnership$ and a formal acco nt of partnership affairs whene%er circ mstances render it , st and reasonable7 and (') 8a%e dissol tion and winding p by decree of co rt. A limited partner shall ha%e the right to recei%e a share of the profits or other compensation by way of income$ and to the ret rn of his contrib tion as pro%ided in Articles 1156 and 115-. Art. 1152. 0itho t pre, dice to the pro%isions of Article 11*1$ a person who has contrib ted to the capital of a b siness cond cted by a person or partnership erroneo sly belie%ing that he has become a limited partner in a limited partnership$ is not$ by reason of his e)ercise of the rights of a limited partner$ a general partner with the person or in the partnership carrying on the b siness$ or bo nd by the obligations of s ch person or partnership$ pro%ided that on ascertaining the mistake he promptly reno nces his interest in the profits of the b siness$ or other compensation by way of income. Art. 115'. A person may be a general partner and a limited partner in the same partnership at the same time$ pro%ided that this fact shall be stated in the certificate pro%ided for in Article 11**. A person who is a general$ and also at the same time a limited partner$ shall ha%e all the rights and powers and be s b,ect to all the restrictions of a general partner7 e)cept that$ in respect to his contrib tion$ he shall ha%e the rights against the other members which he wo ld ha%e had if he were not also a general partner. Art. 115*. A limited partner also may loan money to and transact other b siness with the partnership$ and$ nless he is also a general partner$ recei%e on acco nt of res lting claims against the partnership$ with general creditors$ a pro rata share of the assets. 5o limited partner shall in respect to any s ch claim; (1) +ecei%e or hold as collateral sec rity and partnership property$ or (2) +ecei%e from a general partner or the partnership any payment$ con%eyance$ or release from liability if at the time the assets of the partnership are not s fficient to discharge partnership liabilities to persons not claiming as general or limited partners. The recei%ing of collateral sec rity$ or payment$ con%eyance$ or release in %iolation of the foregoing pro%isions is a fra d on the creditors of the partnership. Art. 1155. 0here there are se%eral limited partners the members may agree that one or more of the limited partners shall ha%e a priority o%er other limited partners as to the ret rn of their contrib tions$ as to their compensation by way of income$ or as to any other matter. (f s ch an agreement is made it shall be stated in the certificate$ and in the absence of s ch a statement all the limited partners shall stand pon e. al footing. Art. 1156. A limited partner may recei%e from the partnership the share of the profits or the compensation by way of income stip lated for in the certificate7 pro%ided that after s ch

65

payment is made$ whether from property of the partnership or that of a general partner$ the partnership assets are in e)cess of all liabilities of the partnership e)cept liabilities to limited partners on acco nt of their contrib tions and to general partners. Art. 115-. A limited partner shall not recei%e from a general partner or o t of partnership property any part of his contrib tions ntil; (1) All liabilities of the partnership$ e)cept liabilities to general partners and to limited partners on acco nt of their contrib tions$ ha%e been paid or there remains property of the partnership s fficient to pay them7 (2) The consent of all members is had$ nless the ret rn of the contrib tion may be rightf lly demanded nder the pro%isions of the second paragraph7 and (') The certificate is cancelled or so amended as to set forth the withdrawal or red ction. ? b,ect to the pro%isions of the first paragraph$ a limited partner may rightf lly demand the ret rn of his contrib tion; (1) !n the dissol tion of a partnership7 or (2) 0hen the date specified in the certificate for its ret rn has arri%ed$ or (') After he has si) months: notice in writing to all other members$ if no time is specified in the certificate$ either for the ret rn of the contrib tion or for the dissol tion of the partnership. (n the absence of any statement in the certificate to the contrary or the consent of all members$ a limited partner$ irrespecti%e of the nat re of his contrib tion$ has only the right to demand and recei%e cash in ret rn for his contrib tion. A limited partner may ha%e the partnership dissol%ed and its affairs wo nd p when; (1) 8e rightf lly b t ns ccessf lly demands the ret rn of his contrib tion$ or (2) The other liabilities of the partnership ha%e not been paid$ or the partnership property is ins fficient for their payment as re. ired by the first paragraph$ 5o. 1$ and the limited partner wo ld otherwise be entitled to the ret rn of his contrib tion. Art. 1151. A limited partner is liable to the partnership; (1) @or the difference between his contrib tion as act ally made and that stated in the certificate as ha%ing been made7 and (2) @or any npaid contrib tion which he agreed in the certificate to make in the f t re at the time and on the conditions stated in the certificate. A limited partner holds as tr stee for the partnership; (1) ?pecific property stated in the certificate as contrib ted by him$ b t which was not contrib ted or which has been wrongf lly ret rned$ and (2) <oney or other property wrongf lly paid or con%eyed to him on acco nt of his contrib tion.

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The liabilities of a limited partner as set forth in this article can be wai%ed or compromised only by the consent of all members7 b t a wai%er or compromise shall not affect the right of a creditor of a partnership who e)tended credit or whose claim arose after the filing and before a cancellation or amendment of the certificate$ to enforce s ch liabilities. 0hen a contrib tor has rightf lly recei%ed the ret rn in whole or in part of the capital of his contrib tion$ he is ne%ertheless liable to the partnership for any s m$ not in e)cess of s ch ret rn with interest$ necessary to discharge its liabilities to all creditors who e)tended credit or whose claims arose before s ch ret rn. Art. 1154. A limited partner:s interest is assignable. A s bstit ted limited partner is a person admitted to all the rights of a limited partner who has died or has assigned his interest in a partnership. An assignee$ who does not become a s bstit ted limited partner$ has no right to re. ire any information or acco nt of the partnership transactions or to inspect the partnership books7 he is only entitled to recei%e the share of the profits or other compensation by way of income$ or the ret rn of his contrib tion$ to which his assignor wo ld otherwise be entitled. An assignee shall ha%e the right to become a s bstit ted limited partner if all the members consent thereto or if the assignor$ being there nto empowered by the certificate$ gi%es the assignee that right. An assignee becomes a s bstit ted limited partner when the certificate is appropriately amended in accordance with Article 1165. The s bstit ted limited partner has all the rights and powers$ and is s b,ect to all the restrictions and liabilities of his assignor$ e)cept those liabilities of which he was ignorant at the time he became a limited partner and which co ld not be ascertained from the certificate. The s bstit tion of the assignee as a limited partner does not release the assignor from liability to the partnership nder Articles 11*- and 11*1. Art. 1166. The retirement$ death$ insol%ency$ insanity or ci%il interdiction of a general partner dissol%es the partnership$ nless the b siness is contin ed by the remaining general partners; (1) >nder a right so to do stated in the certificate$ or (2) 0ith the consent of all members. Art. 1161. !n the death of a limited partner his e)ec tor or administrator shall ha%e all the rights of a limited partner for the p rpose of setting his estate$ and s ch power as the deceased had to constit te his assignee a s bstit ted limited partner. The estate of a deceased limited partner shall be liable for all his liabilities as a limited partner. Art. 1162. !n d e application to a co rt of competent , risdiction by any creditor of a limited partner$ the co rt may charge the interest of the indebted limited partner with payment of

65

the nsatisfied amo nt of s ch claim$ and may appoint a recei%er$ and make all other orders$ directions and in. iries which the circ mstances of the case may re. ire. The interest may be redeemed with the separate property of any general partner$ b t may not be redeemed with partnership property. The remedies conferred by the first paragraph shall not be deemed e)cl si%e of others which may e)ist. 5othing in this &hapter shall be held to depri%e a limited partner of his stat tory e)emption. Art. 116'. (n setting acco nts after dissol tion the liabilities of the partnership shall be entitled to payment in the following order; (1) Those to creditors$ in the order of priority as pro%ided by law$ e)cept those to limited partners on acco nt of their contrib tions$ and to general partners7 (2) Those to limited partners in respect to their share of the profits and other compensation by way of income on their contrib tions7 (') Those to limited partners in respect to the capital of their contrib tions7 (*) Those to general partners other than for capital and profits7 (5) Those to general partners in respect to profits7 (6) Those to general partners in respect to capital. ? b,ect to any statement in the certificate or to s bse. ent agreement$ limited partners share in the partnership assets in respect to their claims for capital$ and in respect to their claims for profits or for compensation by way of income on their contrib tion respecti%ely$ in proportion to the respecti%e amo nts of s ch claims. Art. 116*. The certificate shall be cancelled when the partnership is dissol%ed or all limited partners cease to be s ch. A certificate shall be amended when; (1) There is a change in the name of the partnership or in the amo nt or character of the contrib tion of any limited partner7 (2) A person is s bstit ted as a limited partner7 (') An additional limited partner is admitted7 (*) A person is admitted as a general partner7 (5) A general partner retires$ dies$ becomes insol%ent or insane$ or is sentenced to ci%il interdiction and the b siness is contin ed nder Article 11667 (6) There is a change in the character of the b siness of the partnership7

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(-) There is a false or erroneo s statement in the certificate7 (1) There is a change in the time as stated in the certificate for the dissol tion of the partnership or for the ret rn of a contrib tion7 (4) A time is fi)ed for the dissol tion of the partnership$ or the ret rn of a contrib tion$ no time ha%ing been specified in the certificate$ or (16) The members desire to make a change in any other statement in the certificate in order that it shall acc rately represent the agreement among them. Art. 1165. The writing to amend a certificate shall; (1) &onform to the re. irements of Article 11** as far as necessary to set forth clearly the change in the certificate which it is desired to make7 and (2) Ae signed and sworn to by all members$ and an amendment s bstit ting a limited partner or adding a limited or general partner shall be signed also by the member to be s bstit ted or added$ and when a limited partner is to be s bstit ted$ the amendment shall also be signed by the assigning limited partner. The writing to cancel a certificate shall be signed by all members. A person desiring the cancellation or amendment of a certificate$ if any person designated in the first and second paragraphs as a person who m st e)ec te the writing ref ses to do so$ may petition the co rt to order a cancellation or amendment thereof. (f the co rt finds that the petitioner has a right to ha%e the writing e)ec ted by a person who ref ses to do so$ it shall order the !ffice of the ?ec rities and 9)change &ommission where the certificate is recorded$ to record the cancellation or amendment of the certificate7 and when the certificate is to be amended$ the co rt shall also ca se to be filed for record in said office a certified copy of its decree setting forth the amendment. A certificate is amended or cancelled when there is filed for record in the !ffice of the ?ec rities and 9)change &ommission$ where the certificate is recorded; (1) A writing in accordance with the pro%isions of the first or second paragraph$ or (2) A certified copy of the order of the co rt in accordance with the pro%isions of the fo rth paragraph7 (') After the certificate is d ly amended in accordance with this article$ the amended certified shall thereafter be for all p rposes the certificate pro%ided for in this &hapter. Art. 1166. A contrib tor$ nless he is a general partner$ is not a proper party to proceedings by or against a partnership$ e)cept where the ob,ect is to enforce a limited partner:s right against or liability to the partnership. Art. 116-. A limited partnership formed nder the law prior to the effecti%ity of this &ode$ may become a limited partnership nder this &hapter by complying with the pro%isions of Article 11**$ pro%ided the certificate sets forth;

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(1) The amo nt of the original contrib tion of each limited partner$ and the time when the contrib tion was made7 and (2) That the property of the partnership e)ceeds the amo nt s fficient to discharge its liabilities to persons not claiming as general or limited partners by an amo nt greater than the s m of the contrib tions of its limited partners. A limited partnership formed nder the law prior to the effecti%ity of this &ode$ ntil or nless it becomes a limited partnership nder this &hapter$ shall contin e to be go%erned by the pro%isions of the old law.

Tit ! (. " A$ENCY CHAPTER # NATURE? FORM AND >INDS OF A$ENCY

Art. 1161. Ay the contract of agency a person binds himself to render some ser%ice or to do something in representation or on behalf of another$ with the consent or a thority of the latter. (1-64a) Art. 1164. Agency may be e)press$ or implied from the acts of the principal$ from his silence or lack of action$ or his fail re to rep diate the agency$ knowing that another person is acting on his behalf witho t a thority. Agency may be oral$ nless the law re. ires a specific form. (1-16a) Art. 11-6. Acceptance by the agent may also be e)press$ or implied from his acts which carry o t the agency$ or from his silence or inaction according to the circ mstances. (n) Art. 11-1. Aetween persons who are present$ the acceptance of the agency may also be implied if the principal deli%ers his power of attorney to the agent and the latter recei%es it witho t any ob,ection. (n) Art. 11-2. Aetween persons who are absent$ the acceptance of the agency cannot be implied from the silence of the agent$ e)cept; (1) 0hen the principal transmits his power of attorney to the agent$ who recei%es it witho t any ob,ection7 (2) 0hen the principal entr sts to him by letter or telegram a power of attorney with respect to the b siness in which he is habit ally engaged as an agent$ and he did not reply to the letter or telegram. (n) Art. 11-'. (f a person specially informs another or states by p blic ad%ertisement that he has gi%en a power of attorney to a third person$ the latter thereby becomes a d ly a thori#ed agent$ in the former case with respect to the person who recei%ed the special information$ and in the latter case with regard to any person. The power shall contin e to be in f ll force ntil the notice is rescinded in the same manner in which it was gi%en. (n)

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Art. 11-*. 0hen a sale of a piece of land or any interest therein is thro gh an agent$ the a thority of the latter shall be in writing7 otherwise$ the sale shall be %oid. (n) Art. 11-5. Agency is pres med to be for a compensation$ contrary. (n) Art. 11-6. An agency is either general or special. The former comprises all the b siness of the principal. The latter$ one or more specific transactions. (1-12) Art. 11--. An agency co ched in general terms comprises only acts of administration$ e%en if the principal sho ld state that he withholds no power or that the agent may e)ec te s ch acts as he may consider appropriate$ or e%en tho gh the agency sho ld a thori#e a general and nlimited management. (n) Art. 11-1. ?pecial powers of attorney are necessary in the following cases; (1) To make s ch payments as are not s ally considered as acts of administration7 (2) To effect no%ations which p t an end to obligations already in e)istence at the time the agency was constit ted7 (') To compromise$ to s bmit . estions to arbitration$ to reno nce the right to appeal from a , dgment$ to wai%e ob,ections to the %en e of an action or to abandon a prescription already ac. ired7 (*) To wai%e any obligation grat ito sly7 (5) To enter into any contract by which the ownership of an immo%able is transmitted or ac. ired either grat ito sly or for a %al able consideration7 (6) To make gifts$ e)cept c stomary ones for charity or those made to employees in the b siness managed by the agent7 (-) To loan or borrow money$ nless the latter act be rgent and indispensable for the preser%ation of the things which are nder administration7 (1) To lease any real property to another person for more than one year7 (4) To bind the principal to render some ser%ice witho t compensation7 (16) To bind the principal in a contract of partnership7 (11) To obligate the principal as a g arantor or s rety7 (12) To create or con%ey real rights o%er immo%able property7 (1') To accept or rep diate an inheritance7 (1*) To ratify or recogni#e obligations contracted before the agency7 nless there is proof to the

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(15) Any other act of strict dominion. (n) Art. 11-4. A special power to sell e)cl des the power to mortgage7 and a special power to mortgage does not incl de the power to sell. (n) Art. 1116. A special power to compromise does not a thori#e s bmission to arbitration. (1-1'a) Art. 1111. The agent m st act within the scope of his a thority. 8e may do s ch acts as may be cond ci%e to the accomplishment of the p rpose of the agency. (1-1*a) Art. 1112. The limits of the agent:s a thority shall not be considered e)ceeded sho ld it ha%e been performed in a manner more ad%antageo s to the principal than that specified by him. (1-15) Art. 111'. (f an agent acts in his own name$ the principal has no right of action against the persons with whom the agent has contracted7 neither ha%e s ch persons against the principal. (n s ch case the agent is the one directly bo nd in fa%or of the person with whom he has contracted$ as if the transaction were his own$ e)cept when the contract in%ol%es things belonging to the principal. The pro%isions of this article shall be nderstood to be witho t pre, dice to the actions between the principal and agent. (1-1-)

CHAPTER 2 OBLI$ATIONS OF THE A$ENT

Art. 111*. The agent is bo nd by his acceptance to carry o t the agency$ and is liable for the damages which$ thro gh his non/performance$ the principal may s ffer. 8e m st also finish the b siness already beg n on the death of the principal$ sho ld delay entail any danger. (1-11) Art. 1115. (n case a person declines an agency$ he is bo nd to obser%e the diligence of a good father of a family in the c stody and preser%ation of the goods forwarded to him by the owner ntil the latter sho ld appoint an agent or take charge of the goods. (n) Art. 1116. ?ho ld there be a stip lation that the agent shall ad%ance the necessary f nds$ he shall be bo nd to do so e)cept when the principal is insol%ent. (n) Art. 111-. (n the e)ec tion of the agency$ the agent shall act in accordance with the instr ctions of the principal. (n defa lt thereof$ he shall do all that a good father of a family wo ld do$ as re. ired by the nat re of the b siness. (1-14) Art. 1111. An agent shall not carry o t an agency if its e)ec tion wo ld manifestly res lt in loss or damage to the principal. (n)

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Art. 1114. The agent shall be liable for damages if$ there being a conflict between his interests and those of the principal$ he sho ld prefer his own. (n) Art. 1146. (f the agent has been empowered to borrow money$ he may himself be the lender at the c rrent rate of interest. (f he has been a thori#ed to lend money at interest$ he cannot borrow it witho t the consent of the principal. (n) Art. 1141. 9%ery agent is bo nd to render an acco nt of his transactions and to deli%er to the principal whate%er he may ha%e recei%ed by %irt e of the agency$ e%en tho gh it may not be owing to the principal. 9%ery stip lation e)empting the agent from the obligation to render an acco nt shall be %oid. (1-26a) Art. 1142. The agent may appoint a s bstit te if the principal has not prohibited him from doing so7 b t he shall be responsible for the acts of the s bstit te; (1) 0hen he was not gi%en the power to appoint one7 (2) 0hen he was gi%en s ch power$ b t witho t designating the person$ and the person appointed was notorio sly incompetent or insol%ent. All acts of the s bstit te appointed against the prohibition of the principal shall be %oid. (1-21) Art. 114'. (n the cases mentioned in 5os. 1 and 2 of the preceding article$ the principal may f rthermore bring an action against the s bstit te with respect to the obligations which the latter has contracted nder the s bstit tion. (1-22a) Art. 114*. The responsibility of two or more agents$ e%en tho gh they ha%e been appointed sim ltaneo sly$ is not solidary$ if solidarity has not been e)pressly stip lated. (1-2') Art. 1145. (f solidarity has been agreed pon$ each of the agents is responsible for the non/ f lfillment of agency$ and for the fa lt or negligence of his fellows agents$ e)cept in the latter case when the fellow agents acted beyond the scope of their a thority. (n) Art. 1146. The agent owes interest on the s ms he has applied to his own se from the day on which he did so$ and on those which he still owes after the e)ting ishment of the agency. (1-2*a) Art. 114-. The agent who acts as s ch is not personally liable to the party with whom he contracts$ nless he e)pressly binds himself or e)ceeds the limits of his a thority witho t gi%ing s ch party s fficient notice of his powers. (1-25) Art. 1141. (f the agent contracts in the name of the principal$ e)ceeding the scope of his a thority$ and the principal does not ratify the contract$ it shall be %oid if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. (n this case$ howe%er$ the agent is liable if he ndertook to sec re the principal:s ratification. (n)

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Art. 1144. (f a d ly a thori#ed agent acts in accordance with the orders of the principal$ the latter cannot set p the ignorance of the agent as to circ mstances whereof he himself was$ or o ght to ha%e been$ aware. (n) Art. 1466. ?o far as third persons are concerned$ an act is deemed to ha%e been performed within the scope of the agent:s a thority$ if s ch act is within the terms of the power of attorney$ as written$ e%en if the agent has in fact e)ceeded the limits of his a thority according to an nderstanding between the principal and the agent. (n) Art. 1461. A third person cannot set p the fact that the agent has e)ceeded his powers$ if the principal has ratified$ or has signified his willingness to ratify the agent:s acts. (n) Art. 1462. A third person with whom the agent wishes to contract on behalf of the principal may re. ire the presentation of the power of attorney$ or the instr ctions as regards the agency. 3ri%ate or secret orders and instr ctions of the principal do not pre, dice third persons who ha%e relied pon the power of attorney or instr ctions shown them. (n) Art. 146'. The commission agent shall be responsible for the goods recei%ed by him in the terms and conditions and as described in the consignment$ nless pon recei%ing them he sho ld make a written statement of the damage and deterioration s ffered by the same. (n) Art. 146*. The commission agent who handles goods of the same kind and mark$ which belong to different owners$ shall disting ish them by co ntermarks$ and designate the merchandise respecti%ely belonging to each principal. (n) Art. 1465. The commission agent cannot$ witho t the e)press or implied consent of the principal$ sell on credit. ?ho ld he do so$ the principal may demand from him payment in cash$ b t the commission agent shall be entitled to any interest or benefit$ which may res lt from s ch sale. (n) Art. 1466. ?ho ld the commission agent$ with a thority of the principal$ sell on credit$ he shall so inform the principal$ with a statement of the names of the b yers. ?ho ld he fail to do so$ the sale shall be deemed to ha%e been made for cash insofar as the principal is concerned. (n) Art. 146-. ?ho ld the commission agent recei%e on a sale$ in addition to the ordinary commission$ another called a g arantee commission$ he shall bear the risk of collection and shall pay the principal the proceeds of the sale on the same terms agreed pon with the p rchaser. (n) Art. 1461. The commission agent who does not collect the credits of his principal at the time when they become d e and demandable shall be liable for damages$ nless he pro%es that he e)ercised d e diligence for that p rpose. (n) Art. 1464. The agent is responsible not only for fra d$ b t also for negligence$ which shall be , dged with more or less rigor by the co rts$ according to whether the agency was or was not for a compensation. (1-26)

CHAPTER 3 OBLI$ATIONS OF THE PRINCIPAL

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Art. 1416. The principal m st comply with all the obligations which the agent may ha%e contracted within the scope of his a thority. As for any obligation wherein the agent has e)ceeded his power$ the principal is not bo nd e)cept when he ratifies it e)pressly or tacitly. (1-2-) Art. 1411. 9%en when the agent has e)ceeded his a thority$ the principal is solidarily liable with the agent if the former allowed the latter to act as tho gh he had f ll powers. (n) Art. 1412. The principal m st ad%ance to the agent$ sho ld the latter so re. est$ the s ms necessary for the e)ec tion of the agency. ?ho ld the agent ha%e ad%anced them$ the principal m st reimb rse him therefor$ e%en if the b siness or ndertaking was not s ccessf l$ pro%ided the agent is free from all fa lt. The reimb rsement shall incl de interest on the s ms ad%anced$ from the day on which the ad%ance was made. (1-21) Art. 141'. The principal m st also indemnify the agent for all the damages which the e)ec tion of the agency may ha%e ca sed the latter$ witho t fa lt or negligence on his part. (1-24) Art. 141*. The agent may retain in pledge the things which are the ob,ect of the agency ntil the principal effects the reimb rsement and pays the indemnity set forth in the two preceding articles. (1-'6) Art. 1415. (f two or more persons ha%e appointed an agent for a common transaction or ndertaking$ they shall be solidarily liable to the agent for all the conse. ences of the agency. (1-'1) Art. 1416. 0hen two persons contract with regard to the same thing$ one of them with the agent and the other with the principal$ and the two contracts are incompatible with each other$ that of prior date shall be preferred$ witho t pre, dice to the pro%isions of Article 15**. (n) Art. 141-. (n the case referred to in the preceding article$ if the agent has acted in good faith$ the principal shall be liable in damages to the third person whose contract m st be re,ected. (f the agent acted in bad faith$ he alone shall be responsible. (n) Art. 1411. The principal is not liable for the e)penses inc rred by the agent in the following cases; (1) (f the agent acted in contra%ention of the principal:s instr ctions$ nless the latter sho ld wish to a%ail himself of the benefits deri%ed from the contract7 (2) 0hen the e)penses were d e to the fa lt of the agent7 (') 0hen the agent inc rred them with knowledge that an ens e$ if the principal was not aware thereof7 nfa%orable res lt wo ld

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(*) 0hen it was stip lated that the e)penses wo ld be borne by the agent$ or that the latter wo ld be allowed only a certain s m. (n)

CHAPTER ) MODES OF E(TIN$UISHMENT OF A$ENCY

Art. 1414. Agency is e)ting ished; (1) Ay its re%ocation7 (2) Ay the withdrawal of the agent7 (') Ay the death$ ci%il interdiction$ insanity or insol%ency of the principal or of the agent7 (*) Ay the dissol tion of the firm or corporation which entr sted or accepted the agency7 (5) Ay the accomplishment of the ob,ect or p rpose of the agency7 (6) Ay the e)piration of the period for which the agency was constit ted. (1-'2a) Art. 1426. The principal may re%oke the agency at will$ and compel the agent to ret rn the doc ment e%idencing the agency. ? ch re%ocation may be e)press or implied. (1-''a) Art. 1421. (f the agency has been entr sted for the p rpose of contracting with specified persons$ its re%ocation shall not pre, dice the latter if they were not gi%en notice thereof. (1-'*) Art. 1422. (f the agent had general powers$ re%ocation of the agency does not pre, dice third persons who acted in good faith and witho t knowledge of the re%ocation. 5otice of the re%ocation in a newspaper of general circ lation is a s fficient warning to third persons. (n) Art. 142'. The appointment of a new agent for the same b siness or transaction re%okes the pre%io s agency from the day on which notice thereof was gi%en to the former agent$ witho t pre, dice to the pro%isions of the two preceding articles. (1-'5a) Art. 142*. The agency is re%oked if the principal directly manages the b siness entr sted to the agent$ dealing directly with third persons. (n) Art. 1425. 0hen two or more principals ha%e granted a power of attorney for a common transaction$ any one of them may re%oke the same witho t the consent of the others. (n) Art. 1426. A general power of attorney is re%oked by a special one granted to another agent$ as regards the special matter in%ol%ed in the latter. (n) Art. 142-. An agency cannot be re%oked if a bilateral contract depends pon it$ or if it is the means of f lfilling an obligation already contracted$ or if a partner is appointed manager of a partnership in the contract of partnership and his remo%al from the management is n, stifiable. (n)

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Art. 1421. The agent may withdraw from the agency by gi%ing d e notice to the principal. (f the latter sho ld s ffer any damage by reason of the withdrawal$ the agent m st indemnify him therefor$ nless the agent sho ld base his withdrawal pon the impossibility of contin ing the performance of the agency witho t gra%e detriment to himself. (1-'6a) Art. 1424. The agent$ e%en if he sho ld withdraw from the agency for a %alid reason$ m st contin e to act ntil the principal has had reasonable opport nity to take the necessary steps to meet the sit ation. (1-'-a) Art. 14'6. The agency shall remain in f ll force and effect e%en after the death of the principal$ if it has been constit ted in the common interest of the latter and of the agent$ or in the interest of a third person who has accepted the stip lation in his fa%or. (n) Art. 14'1. Anything done by the agent$ witho t knowledge of the death of the principal or of any other ca se which e)ting ishes the agency$ is %alid and shall be f lly effecti%e with respect to third persons who may ha%e contracted with him in good faith. (1-'1) Art. 14'2. (f the agent dies$ his heirs m st notify the principal thereof$ and in the meantime adopt s ch meas res as the circ mstances may demand in the interest of the latter. (1-'4)

Tit ! (I. " LOAN $ENERAL PROVISIONS

Art. 14''. Ay the contract of loan$ one of the parties deli%ers to another$ either something not cons mable so that the latter may se the same for a certain time and ret rn it$ in which case the contract is called a commodat m7 or money or other cons mable thing$ pon the condition that the same amo nt of the same kind and . ality shall be paid$ in which case the contract is simply called a loan or mutuum. Commodatum is essentially grat ito s. ?imple loan may be grat ito s or with a stip lation to pay interest. (n commodatum the bailor retains the ownership of the thing loaned$ while in simple loan$ ownership passes to the borrower. (1-*6a) Art. 14'*. An accepted promise to deli%er something by way of commodatum or simple loan is binding pon parties$ b t the commodatum or simple loan itself shall not be perfected ntil the deli%ery of the ob,ect of the contract. (n)

CHAPTER # COMMODATUM SECTION # " N+t1*! ,4 Commodatum

Art. 14'5. The bailee in commodatum ac. ires the sed of the thing loaned b t not its fr its7 if any compensation is to be paid by him who ac. ires the se$ the contract ceases to be a commodatum. (14*1a)

65

Art. 14'6. &ons mable goods may be the s b,ect of commodatum if the p rpose of the contract is not the cons mption of the ob,ect$ as when it is merely for e)hibition. (n) Art. 14'-. <o%able or immo%able property may be the ob,ect of commodatum. (n) Art. 14'1. The bailor in commodatum need not be the owner of the thing loaned. (n) Art. 14'4. Commodatum is p rely personal in character. &onse. ently; (1) The death of either the bailor or the bailee e)ting ishes the contract7 (2) The bailee can neither lend nor lease the ob,ect of the contract to a third person. 8owe%er$ the members of the bailee:s ho sehold may make se of the thing loaned$ nless there is a stip lation to the contrary$ or nless the nat re of the thing forbids s ch se. (n) Art. 14*6. A stip lation that the bailee may make %alid. (n) se of the fr its of the thing loaned is

SECTION 2. " O9 i7+ti,n. ,4 t5! B+i !!

Art. 14*1. The bailee is obliged to pay for the ordinary e)penses for the preser%ation of the thing loaned. (1-*'a) se and

Art. 14*2. The bailee is liable for the loss of the thing$ e%en if it sho ld be thro gh a fort ito s e%ent; (1) (f he de%otes the thing to any p rpose different from that for which it has been loaned7 (2) (f he keeps it longer than the period stip lated$ or after the accomplishment of the se for which the commodatum has been constit ted7 (') (f the thing loaned has been deli%ered with appraisal of its %al e$ nless there is a stip lation e)emption the bailee from responsibility in case of a fort ito s e%ent7 (*) (f he lends or leases the thing to a third person$ who is not a member of his ho sehold7 (5) (f$ being able to sa%e either the thing borrowed or his own thing$ he chose to sa%e the latter. (1-**a and 1-*5) Art. 14*'. The bailee does not answer for the deterioration of the thing loaned d e only to the se thereof and witho t his fa lt. (1-*6) Art. 14**. The bailee cannot retain the thing loaned on the gro nd that the bailor owes him something$ e%en tho gh it may be by reason of e)penses. 8owe%er$ the bailee has a right of retention for damages mentioned in Article 1451. (1-*-a) Art. 14*5. 0hen there are two or more bailees to whom a thing is loaned in the same contract$ they are liable solidarily. (1-*1a)

65

SECTION 3. " O9 i7+ti,n. ,4 t5! B+i ,*

Art. 14*6. The bailor cannot demand the ret rn of the thing loaned till after the e)piration of the period stip lated$ or after the accomplishment of the se for which the commodatum has been constit ted. 8owe%er$ if in the meantime$ he sho ld ha%e rgent need of the thing$ he may demand its ret rn or temporary se. (n case of temporary se by the bailor$ the contract of commodatum is s spended while the thing is in the possession of the bailor. (1-*4a) Art. 14*-. The bailor may demand the thing at will$ and the contract al relation is called a precari m$ in the following cases; (1) (f neither the d ration of the contract nor the sho ld be de%oted$ has been stip lated7 or se to which the thing loaned

(2) (f the se of the thing is merely tolerated by the owner. (1-56a) Art. 14*1. The bailor may demand the immediate ret rn of the thing if the bailee commits any act of ingratit de specified in Article -65. (n) Art. 14*4. The bailor shall ref nd the e)traordinary e)penses d ring the contract for the preser%ation of the thing loaned$ pro%ided the bailee brings the same to the knowledge of the bailor before inc rring them$ e)cept when they are so rgent that the reply to the notification cannot be awaited witho t danger. (f the e)traordinary e)penses arise on the occasion of the act al se of the thing by the bailee$ e%en tho gh he acted witho t fa lt$ they shall be borne e. ally by both the bailor and the bailee$ nless there is a stip lation to the contrary. (1-51a) Art. 1456. (f$ for the p rpose of making se of the thing$ the bailee inc rs e)penses other than those referred to in Articles 14*1 and 14*4$ he is not entitled to reimb rsement. (n) Art. 1451. The bailor who$ knowing the flaws of the thing loaned$ does not ad%ise the bailee of the same$ shall be liable to the latter for the damages which he may s ffer by reason thereof. (1-52) Art. 1452. The bailor cannot e)empt himself from the payment of e)penses or damages by abandoning the thing to the bailee. (n)

CHAPTER 2 SIMPLE LOAN OR MUTUUM

Art. 145'. A person who recei%es a loan of money or any other f ngible thing ac. ires the

65

ownership thereof$ and is bo nd to pay to the creditor an e. al amo nt of the same kind and . ality. (1-5'a) Art. 145*. A contract whereby one person transfers the ownership of non/f ngible things to another with the obligation on the part of the latter to gi%e things of the same kind$ . antity$ and . ality shall be considered a barter. (n) Art. 1455. The obligation of a person who borrows money shall be go%erned by the pro%isions of Articles 12*4 and 1256 of this &ode. (f what was loaned is a f ngible thing other than money$ the debtor owes another thing of the same kind$ . antity and . ality$ e%en if it sho ld change in %al e. (n case it is impossible to deli%er the same kind$ its %al e at the time of the perfection of the loan shall be paid. (1-5*a) Art. 1456. 5o interest shall be d e nless it has been e)pressly stip lated in writing. (1-55a) Art. 145-. &ontracts and stip lations$ nder any cloak or de%ice whate%er$ intended to circ m%ent the laws against s ry shall be %oid. The borrower may reco%er in accordance with the laws on s ry. (n) Art. 1451. (n the determination of the interest$ if it is payable in kind$ its %al e shall be appraised at the c rrent price of the prod cts or goods at the time and place of payment. (n) Art. 1454. 0itho t pre, dice to the pro%isions of Article 2212$ interest d e and npaid shall not earn interest. 8owe%er$ the contracting parties may by stip lation capitali#e the interest d e and npaid$ which as added principal$ shall earn new interest. (n) Art. 1466. (f the borrower pays interest when there has been no stip lation therefor$ the pro%isions of this &ode concerning solutio indebiti$ or nat ral obligations$ shall be applied$ as the case may be. (n) Art. 1461. >s rio s contracts shall be go%erned by the >s ry Law and other special laws$ so far as they are not inconsistent with this &ode. (n)

Tit ! (II. " DEPOSIT CHAPTER # DEPOSIT IN $ENERAL AND ITS DIFFERENT >INDS
Art. 1462. A deposit is constit ted from the moment a person recei%es a thing belonging to another$ with the obligation of safely keeping it and of ret rning the same. (f the safekeeping of the thing deli%ered is not the principal p rpose of the contract$ there is no deposit b t some other contract. (1-51a) Art. 146'. An agreement to constit te a deposit is binding$ b t the deposit itself is not perfected ntil the deli%ery of the thing. (n) Art. 146*. A deposit may be constit ted , dicially or e)tra, dicially. (1-54) Art. 1465. A deposit is a grat ito s contract$ e)cept when there is an agreement to the contrary$ or nless the depositary is engaged in the b siness of storing goods. (1-66a)

65

Art. 1466. !nly mo%able things may be the ob,ect of a deposit. (1-61) Art. 146-. An e)tra, dicial deposit is either %ol ntary or necessary. (1-62)

CHAPTER 2 VOLUNTARY DEPOSIT SECTION #. " $!n!*+ P*,-i.i,n.

Art. 1461. A %ol ntary deposit is that wherein the deli%ery is made by the will of the depositor. A deposit may also be made by two or more persons each of whom belie%es himself entitled to the thing deposited with a third person$ who shall deli%er it in a proper case to the one to whom it belongs. (1-6') Art. 1464. A contract of deposit may be entered into orally or in writing. (n) Art. 14-6. (f a person ha%ing capacity to contract accepts a deposit made by one who is incapacitated$ the former shall be s b,ect to all the obligations of a depositary$ and may be compelled to ret rn the thing by the g ardian$ or administrator$ of the person who made the deposit$ or by the latter himself if he sho ld ac. ire capacity. (1-6*) Art. 14-1. (f the deposit has been made by a capacitated person with another who is not$ the depositor shall only ha%e an action to reco%er the thing deposited while it is still in the possession of the depositary$ or to compel the latter to pay him the amo nt by which he may ha%e enriched or benefited himself with the thing or its price. 8owe%er$ if a third person who ac. ired the thing acted in bad faith$ the depositor may bring an action against him for its reco%ery. (1-65a)

SECTION 2. " O9 i7+ti,n. ,4 t5! D!2,.it+*3

Art. 14-2. The depositary is obliged to keep the thing safely and to ret rn it$ when re. ired$ to the depositor$ or to his heirs and s ccessors$ or to the person who may ha%e been designated in the contract. 8is responsibility$ with regard to the safekeeping and the loss of the thing$ shall be go%erned by the pro%isions of Title ( of this Aook. (f the deposit is grat ito s$ this fact shall be taken into acco nt in determining the degree of care that the depositary m st obser%e. (1-66a) Art. 14-'. >nless there is a stip lation to the contrary$ the depositary cannot deposit the thing with a third person. (f deposit with a third person is allowed$ the depositary is liable for the loss if he deposited the thing with a person who is manifestly careless or nfit. The depositary is responsible for the negligence of his employees. (n) Art. 14-*. The depositary may change the way of the deposit if nder the circ mstances he may reasonably pres me that the depositor wo ld consent to the change if he knew of the facts of the sit ation. 8owe%er$ before the depositary may make s ch change$ he shall notify the depositor thereof and wait for his decision$ nless delay wo ld ca se danger. (n) Art. 14-5. The depositary holding certificates$ bonds$ sec rities or instr ments which earn interest shall be bo nd to collect the latter when it becomes d e$ and to take s ch steps as may be necessary in order that the sec rities may preser%e their %al e and the rights corresponding to them according to law.

65

The abo%e pro%ision shall not apply to contracts for the rent of safety deposit bo)es. (n) Art. 14-6. >nless there is a stip lation to the contrary$ the depositary may commingle grain or other articles of the same kind and . ality$ in which case the %ario s depositors shall own or ha%e a proportionate interest in the mass. (n) Art. 14--. The depositary cannot make permission of the depositor. !therwise$ he shall be liable for damages. 8owe%er$ when the preser%ation of the thing deposited re. ires its se$ it m st be sed b t only for that p rpose. (1-6-a) Art. 14-1. 0hen the depositary has permission to se the thing deposited$ the contract loses the concept of a deposit and becomes a loan or commodat m$ e)cept where safekeeping is still the principal p rpose of the contract. The permission shall not be pres med$ and its e)istence m st be pro%ed. (1-61a) Art. 14-4. The depositary is liable for the loss of the thing thro gh a fort ito s e%ent; (1) (f it is so stip lated7 (2) (f he ses the thing witho t the depositor:s permission7 (') (f he delays its ret rn7 (*) (f he allows others to se it$ e%en tho gh he himself may ha%e been a thori#ed to se the same. (n) Art. 1416. @i)ed$ sa%ings$ and c rrent deposits of money in banks and similar instit tions shall be go%erned by the pro%isions concerning simple loan. (n) Art. 1411. 0hen the thing deposited is deli%ered closed and sealed$ the depositary m st ret rn it in the same condition$ and he shall be liable for damages sho ld the seal or lock be broken thro gh his fa lt. @a lt on the part of the depositary is pres med$ nless there is proof to the contrary. As regards the %al e of the thing deposited$ the statement of the depositor shall be accepted$ when the forcible opening is imp table to the depositary$ sho ld there be no proof to the contrary. 8owe%er$ the co rts may pass pon the credibility of the depositor with respect to the %al e claimed by him. 0hen the seal or lock is broken$ with or witho t the depositary:s fa lt$ he shall keep the secret of the deposit. (1-64a) Art. 1412. 0hen it becomes necessary to open a locked bo) or receptacle$ the depositary is pres med a thori#ed to do so$ if the key has been deli%ered to him7 or when the instr ctions of the depositor as regards the deposit cannot be e)ec ted witho t opening the bo) or receptacle. (n) se of the thing deposited witho t the e)press

65

Art. 141'. The thing deposited shall be ret rned with all its prod cts$ accessories and accessions. ?ho ld the deposit consist of money$ the pro%isions relati%e to agents in article 1146 shall be applied to the depositary. (1--6) Art. 141*. The depositary cannot demand that the depositor pro%e his ownership of the thing deposited. 5e%ertheless$ sho ld he disco%er that the thing has been stolen and who its tr e owner is$ he m st ad%ise the latter of the deposit. (f the owner$ in spite of s ch information$ does not claim it within the period of one month$ the depositary shall be relie%ed of all responsibility by ret rning the thing deposited to the depositor. (f the depositary has reasonable gro nds to belie%e that the thing has not been lawf lly ac. ired by the depositor$ the former may ret rn the same. (1--1a) Art. 1415. 0hen there are two or more depositors$ if they are not solidary$ and the thing admits of di%ision$ each one cannot demand more than his share. 0hen there is solidarity or the thing does not admit of di%ision$ the pro%isions of Articles 1212 and 121* shall go%ern. 8owe%er$ if there is a stip lation that the thing sho ld be ret rned to one of the depositors$ the depositary shall ret rn it only to the person designated. (1--2a) Art. 1416. (f the depositor sho ld lose his capacity to contract after ha%ing made the deposit$ the thing cannot be ret rned e)cept to the persons who may ha%e the administration of his property and rights. (1--') Art. 141-. (f at the time the deposit was made a place was designated for the ret rn of the thing$ the depositary m st take the thing deposited to s ch place7 b t the e)penses for transportation shall be borne by the depositor. (f no place has been designated for the ret rn$ it shall be made where the thing deposited may be$ e%en if it sho ld not be the same place where the deposit was made$ pro%ided that there was no malice on the part of the depositary. (1--*) Art. 1411. The thing deposited m st be ret rned to the depositor tho gh a specified period or time for s ch ret rn may ha%e been fi)ed. pon demand$ e%en

This pro%ision shall not apply when the thing is , dicially attached while in the depositary:s possession$ or sho ld he ha%e been notified of the opposition of a third person to the ret rn or the remo%al of the thing deposited. (n these cases$ the depositary m st immediately inform the depositor of the attachment or opposition. (1--5) Art. 1414. >nless the deposit is for a %al able consideration$ the depositary who may ha%e , stifiable reasons for not keeping the thing deposited may$ e%en before the time designated$ ret rn it to the depositor7 and if the latter sho ld ref se to recei%e it$ the depositary may sec re its consignation from the co rt. (1--6a)

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Art. 1446. (f the depositary by force ma,e re or go%ernment order loses the thing and recei%es money or another thing in its place$ he shall deli%er the s m or other thing to the depositor. (1---a) Art. 1441. The depositor:s heir who in good faith may ha%e sold the thing which he did not know was deposited$ shall only be bo nd to ret rn the price he may ha%e recei%ed or to assign his right of action against the b yer in case the price has not been paid him. (1--1)

SECTION 3. " O9 i7+ti,n. ,4 t5! D!2,.it,*

Art. 1442. (f the deposit is grat ito s$ the depositor is obliged to reimb rse the depositary for the e)penses he may ha%e inc rred for the preser%ation of the thing deposited. (1--4a) Art. 144'. The depositor shall reimb rse the depositary for any loss arising from the character of the thing deposited$ nless at the time of the constit tion of the deposit the former was not aware of$ or was not e)pected to know the dangero s character of the thing$ or nless he notified the depositary of the same$ or the latter was aware of it witho t ad%ice from the depositor. (n) Art. 144*. The depositary may retain the thing in pledge be d e him by reason of the deposit. (1-16) Art. 1445. A deposit its e)ting ished; (1) >pon the loss or destr ction of the thing deposited7 (2) (n case of a grat ito s deposit$ depositary. (n) pon the death of either the depositor or the ntil the f ll payment of what may

CHAPTER 3 NECESSARY DEPOSIT

Art. 1446. A deposit is necessary; (1) 0hen it is made in compliance with a legal obligation7 (2) 0hen it takes place on the occasion of any calamity$ s ch as fire$ storm$ flood$ pillage$ shipwreck$ or other similar e%ents. (1-11a) Art. 144-. The deposit referred to in 5o. 1 of the preceding article shall be go%erned by the pro%isions of the law establishing it$ and in case of its deficiency$ by the r les on %ol ntary deposit. The deposit mentioned in 5o. 2 of the preceding article shall be reg lated by the pro%isions concerning %ol ntary deposit and by Article 2161. (1-12) Art. 1441. The deposit of effects made by the tra%ellers in hotels or inns shall also be regarded as necessary. The keepers of hotels or inns shall be responsible for them as depositaries$ pro%ided that notice was gi%en to them$ or to their employees$ of the effects bro ght by the g ests and that$ on the part of the latter$ they take the preca tions which

65

said hotel/keepers or their s bstit tes ad%ised relati%e to the care and %igilance of their effects. (1-1') Art. 1444. The hotel/keeper is liable for the %ehicles$ animals and articles which ha%e been introd ced or placed in the anne)es of the hotel. (n) Art. 2666. The responsibility referred to in the two preceding articles shall incl de the loss of$ or in, ry to the personal property of the g ests ca sed by the ser%ants or employees of the keepers of hotels or inns as well as strangers7 b t not that which may proceed from any force ma,e re. The fact that tra%ellers are constrained to rely on the %igilance of the keeper of the hotels or inns shall be considered in determining the degree of care re. ired of him. (1-1*a) Art. 2661. The act of a thief or robber$ who has entered the hotel is not deemed force ma,e re$ nless it is done with the se of arms or thro gh an irresistible force. (n) Art. 2662. The hotel/keeper is not liable for compensation if the loss is d e to the acts of the g est$ his family$ ser%ants or %isitors$ or if the loss arises from the character of the things bro ght into the hotel. (n) Art. 266'. The hotel/keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles bro ght by the g est. Any stip lation between the hotel/keeper and the g est whereby the responsibility of the former as set forth in articles 1441 to 2661 is s ppressed or diminished shall be %oid. (n) Art. 266*. The hotel/keeper has a right to retain the things bro ght into the hotel by the g est$ as a sec rity for credits on acco nt of lodging$ and s pplies s ally f rnished to hotel g ests. (n)

CHAPTER ) SE'UESTRATION OR %UDICIAL DEPOSIT

Art. 2665. A , dicial deposit or se. estration takes place when an attachment or sei# re of property in litigation is ordered. (1-15) Art. 2666. <o%able as well as immo%able property may be the ob,ect of se. estration. (1-16) Art. 266-. The depositary of property or ob,ects se. estrated cannot be relie%ed of his responsibility ntil the contro%ersy which ga%e rise thereto has come to an end$ nless the co rt so orders. (1-1-a) Art. 2661. The depositary of property se. estrated is bo nd to comply$ with respect to the same$ with all the obligations of a good father of a family. (1-11) Art. 2664. As to matters not pro%ided for in this &ode$ , dicial se. estration shall be go%erned by the + les of &o rt. (1-14)

Tit ! (III. " ALEATORY CONTRACTS $ENERAL PROVISIONS

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Art. 2616. Ay an aleatory contract$ one of the parties or both reciprocally bind themsel%es to gi%e or to do something in consideration of what the other shall gi%e or do pon the happening of an e%ent which is ncertain$ or which is to occ r at an indeterminate time. (1-46)

CHAPTER # INSURANCE
Art. 2611. The contract of ins rance is go%erned by special laws. <atters not e)pressly pro%ided for in s ch special laws shall be reg lated by this &ode. (n) Art. 2612. Any person who is forbidden from recei%ing any donation nder Article -'4 cannot be named beneficiary of a life ins rance policy by the person who cannot make any donation to him$ according to said article. (n)

CHAPTER 2 $AMBLIN$
Art. 261'. A game of chance is that which depends more on chance or ha#ard than or skill or ability. @or the p rposes of the following articles$ in case of do bt a game is deemed to be one of chance. (n) Art. 261*. 5o action can be maintained by the winner for the collection of what he has won in a game of chance. A t any loser in a game of chance may reco%er his loss from the winner$ with legal interest from the time he paid the amo nt lost$ and s bsidiarily from the operator or manager of the gambling ho se. (1-44a) Art. 2615. (f cheating or deceit is committed by the winner$ he$ and s bsidiarily the operator or manager of the gambling ho se$ shall pay by way of e)emplary damages$ not less than the e. i%alent of the s m lost$ in addition to the latter amo nt. (f both the winner and the loser ha%e perpetrated fra d$ no action for reco%ery can be bro ght by either. (n) Art. 2616. (f the loser ref ses or neglects to bring an action to reco%er what has been lost$ his or her creditors$ spo se$ descendants or other persons entitled to be s pported by the loser may instit te the action. The s m thereby obtained shall be applied to the creditors: claims$ or to the s pport of the spo se or relati%es$ as the case may be. (n) Art. 261-. The pro%isions of Article 261* and 2616 apply when two or more persons bet in a game of chance$ altho gh they take no acti%e part in the game itself. (1-44a) Art. 2611. (f a contract which p rports to be for the deli%ery of goods$ sec rities or shares of stock is entered into with the intention that the difference between the price stip lated and the e)change or market price at the time of the pretended deli%ery shall be paid by the loser to the winner$ the transaction is n ll and %oid. The loser may reco%er what he has paid. (n) Art. 2614. Aetting on the res lt of sports$ athletic competitions$ or games of skill may be prohibited by local ordinances. (n) Art. 2626. The loser in any game which is not one of chance$ when there is no local ordinance which prohibits betting therein$ is nder obligation to pay his loss$ nless the amo nt thereof is e)cessi%e nder the circ mstances. (n the latter case$ the co rt shall

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red ce

the

loss

to

the

proper

s m.

(1161a)

CHAPTER 3 LIFE ANNUITY

Art. 2621. The aleatory contract of life ann ity binds the debtor to pay an ann al pension or income d ring the life of one or more determinate persons in consideration of a capital consisting of money or other property$ whose ownership is transferred to him at once with the b rden of the income. (1162a) Art. 2622. The ann ity may be constit ted pon the life of the person who gi%es the capital$ pon that of a third person$ or pon the li%es of %ario s persons$ all of whom m st be li%ing at the time the ann ity is established. (t may also be constit ted in fa%or of the person or persons pon whose life or li%es the contract is entered into$ or in fa%or of another or other persons. (116') Art. 262'. Life ann ity shall be %oid if constit ted pon the life of a person who was already dead at the time the contract was entered into$ or who was at that time s ffering from an illness which ca sed his death within twenty days following said date. (116*) Art. 262*. The lack of payment of the income d e does not a thori#e the recipient of the life ann ity to demand the reimb rsement of the capital or to retake possession of the property alienated$ nless there is a stip lation to the contrary7 he shall ha%e only a right , dicially to claim the payment of the income in arrears and to re. ire a sec rity for the f t re income$ nless there is a stip lation to the contrary. (1165a) Art. 2625. The income corresponding to the year in which the person en,oying it dies shall be paid in proportion to the days d ring which he li%ed7 if the income sho ld be paid by installments in ad%ance$ the whole amo nt of the installment which began to r n d ring his life shall be paid. (1166) Art. 2626. 8e who constit tes an ann ity by grat ito s title pon his property$ may pro%ide at the time the ann ity is established that the same shall not be s b,ect to e)ec tion or attachment on acco nt of the obligations of the recipient of the ann ity. (f the ann ity was constit ted in fra d of creditors$ the latter may ask for the e)ec tion or attachment of the property. (116-a) Art. 262-. 5o ann ity shall be claimed witho t first pro%ing the e)istence of the person pon whose life the ann ity is constit ted. (1161)

Tit ! (IV. " COMPROMISES AND ARBITRATIONS CHAPTER # COMPROMISES

Art. 2621. A compromise is a contract whereby the parties$ by making reciprocal concessions$ a%oid a litigation or p t an end to one already commenced. (1164a) Art. 2624. The co rt shall endea%or to pers ade the litigants in a ci%il case to agree some fair compromise. (n) pon

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Art. 26'6. 9%ery ci%il action or proceeding shall be s spended; (1) (f willingness to disc ss a possible compromise is e)pressed by one or both parties7 or (2) (f it appears that one of the parties$ before the commencement of the action or proceeding$ offered to disc ss a possible compromise b t the other party ref sed the offer. The d ration and terms of the s spension of the ci%il action or proceeding and similar matters shall be go%erned by s ch pro%isions of the r les of co rt as the ? preme &o rt shall prom lgate. ?aid r les of co rt shall likewise pro%ide for the appointment and d ties of amicable compo nders. (n) Art. 26'1. The co rts may mitigate the damages to be paid by the losing party who has shown a sincere desire for a compromise. (n) Art. 26'2. The co rt:s appro%al is necessary in compromises entered into by g ardians$ parents$ absentee:s representati%es$ and administrators or e)ec tors of decedent:s estates. (1116a) Art. 26''. 2 ridical persons may compromise only in the form and with the re. isites which may be necessary to alienate their property. (1112a) Art. 26'*. There may be a compromise pon the ci%il liability arising from an offense7 b t s ch compromise shall not e)ting ish the p blic action for the imposition of the legal penalty. (111') Art. 26'5. 5o compromise pon the following . estions shall be %alid; (1) The ci%il stat s of persons7 (2) The %alidity of a marriage or a legal separation7 (') Any gro nd for legal separation7 (*) @ t re s pport7 (5) The , risdiction of co rts7 (6) @ t re legitime. (111*a) Art. 26'6. A compromise comprises only those ob,ects which are definitely stated therein$ or which by necessary implication from its terms sho ld be deemed to ha%e been incl ded in the same. A general ren nciation of rights is nderstood to refer only to those that are connected with the disp te which was the s b,ect of the compromise. (1115) Art. 26'-. A compromise has pon the parties the effect and a thority of res , dicata7 b t there shall be no e)ec tion e)cept in compliance with a , dicial compromise. (1116)

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Art. 26'1. A compromise in which there is mistake$ fra d$ %iolence$ intimidation$ nd e infl ence$ or falsity of doc ments$ is s b,ect to the pro%isions of Article 1''6 of this &ode. 8owe%er$ one of parties cannot set p a mistake of fact as against the other if the latter$ by %irt e of the compromise$ has withdrawn from a litigation already commenced. (111-a) Art. 26'4. 0hen the parties compromise generally on all differences which they might ha%e with each other$ the disco%ery of doc ments referring to one or more b t not to all of the . estions settled shall not itself be a ca se for ann lment or rescission of the compromise$ nless said doc ments ha%e been concealed by one of the parties. A t the compromise may be ann lled or rescinded if it refers only to one thing to which one of the parties has no right$ as shown by the newly/disco%ered doc ments. (n) Art. 26*6. (f after a litigation has been decided by a final , dgment$ a compromise sho ld be agreed pon$ either or both parties being naware of the e)istence of the final , dgment$ the compromise may be rescinded. (gnorance of a , dgment which may be re%oked or set aside is not a %alid gro nd for attacking a compromise. (1114a) Art. 26*1. (f one of the parties fails or ref ses to abide by the compromise$ the other party may either enforce the compromise or regard it as rescinded and insist pon his original demand. (n)

CHAPTER 2 ARBITRATIONS
Art. 26*2. The same persons who may enter into a compromise may s bmit their contro%ersies to one or more arbitrators for decision. (1126a) Art. 26*'. The pro%isions of the preceding &hapter applicable to arbitrations. (1121a) pon compromises shall also be

Art. 26**. Any stip lation that the arbitrators: award or decision shall be final$ is %alid$ witho t pre, dice to Articles 26'1$ 26'4$ and 26*6. (n) Art. 26*5. Any cla se gi%ing one of the parties power to choose more arbitrators than the other is %oid and of no effect. (n) Art. 26*6. The appointment of arbitrators and the proced re for arbitration shall be go%erned by the pro%isions of s ch r les of co rt as the ? preme &o rt shall prom lgate. (n)

Tit ! (V. " $UARANTY CHAPTER # NATURE AND E(TENT OF $UARANTY

Art. 26*-. Ay g aranty a person$ called the g arantor$ binds himself to the creditor to f lfill the obligation of the principal debtor in case the latter sho ld fail to do so.

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(f a person binds himself solidarily with the principal debtor$ the pro%isions of ?ection *$ &hapter '$ Title ( of this Aook shall be obser%ed. (n s ch case the contract is called a s retyship. (1122a) Art. 26*1. A g aranty is grat ito s$ nless there is a stip lation to the contrary. (n) Art. 26*4. A married woman may g arantee an obligation witho t the h sband:s consent$ b t shall not thereby bind the con, gal partnership$ e)cept in cases pro%ided by law. (n) Art. 2656. (f a g aranty is entered into witho t the knowledge or consent$ or against the will of the principal debtor$ the pro%isions of Articles 12'6 and 12'- shall apply. (n) Art. 2651. A g aranty may be con%entional$ legal or , dicial$ grat ito s$ or by onero s title. (t may also be constit ted$ not only in fa%or of the principal debtor$ b t also in fa%or of the other g arantor$ with the latter:s consent$ or witho t his knowledge$ or e%en o%er his ob,ection. (112') Art. 2652. A g aranty cannot e)ist witho t a %alid obligation. 5e%ertheless$ a g aranty may be constit ted to g arantee the performance of a %oidable or an nenforceable contract. (t may also g arantee a nat ral obligation. (112*a) Art. 265'. A g aranty may also be gi%en as sec rity for f t re debts$ the amo nt of which is not yet known7 there can be no claim against the g arantor ntil the debt is li. idated. A conditional obligation may also be sec red. (1125a) Art. 265*. A g arantor may bind himself for less$ b t not for more than the principal debtor$ both as regards the amo nt and the onero s nat re of the conditions. ?ho ld he ha%e bo nd himself for more$ his obligations shall be red ced to the limits of that of the debtor. (1126) Art. 2655. A g aranty is not pres med7 it m st be e)press and cannot e)tend to more than what is stip lated therein. (f it be simple or indefinite$ it shall compromise not only the principal obligation$ b t also all its accessories$ incl ding the , dicial costs$ pro%ided with respect to the latter$ that the g arantor shall only be liable for those costs inc rred after he has been , dicially re. ired to pay. (112-a) Art. 2656. !ne who is obliged to f rnish a g arantor shall present a person who possesses integrity$ capacity to bind himself$ and s fficient property to answer for the obligation which he g arantees. The g arantor shall be s b,ect to the , risdiction of the co rt of the place where this obligation is to be complied with. (1121a) Art. 265-. (f the g arantor sho ld be con%icted in first instance of a crime in%ol%ing dishonesty or sho ld become insol%ent$ the creditor may demand another who has all the . alifications re. ired in the preceding article. The case is e)cepted where the creditor has re. ired and stip lated that a specified person sho ld be the g arantor. (1124a)

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CHAPTER 2 EFFECTS OF $UARANTY SECTION #. " E44!0t. ,4 $1+*+nt3 B!t@!!n t5! $1+*+nt,* +n8 t5! C*!8it,*
Art. 2651. The g arantor cannot be compelled to pay the creditor nless the latter has e)ha sted all the property of the debtor$ and has resorted to all the legal remedies against the debtor. (11'6a) Art. 2654. The e)c ssion shall not take place; (1) (f the g arantor has e)pressly reno nced it7 (2) (f he has bo nd himself solidarily with the debtor7 (') (n case of insol%ency of the debtor7 (*) 0hen he has absconded$ or cannot be s ed within the 3hilippines left a manager or representati%e7 nless he has

(5) (f it may be pres med that an e)ec tion on the property of the principal debtor wo ld not res lt in the satisfaction of the obligation. (11'1a) Art. 2666. (n order that the g arantor may make se of the benefit of e)cl sion$ he m st set it p against the creditor pon the latter:s demand for payment from him$ and point o t to the creditor a%ailable property of the debtor within 3hilippine territory$ s fficient to co%er the amo nt of the debt. (11'2) Art. 2661. The g arantor ha%ing f lfilled all the conditions re. ired in the preceding article$ the creditor who is negligent in e)ha sting the property pointed o t shall s ffer the loss$ to the e)tent of said property$ for the insol%ency of the debtor res lting from s ch negligence. (11''a) Art. 2662. (n e%ery action by the creditor$ which m st be against the principal debtor alone$ e)cept in the cases mentioned in Article 2654$ the former shall ask the co rt to notify the g arantor of the action. The g arantor may appear so that he may$ if he so desire$ set p s ch defenses as are granted him by law. The benefit of e)c ssion mentioned in Article 2651 shall always be nimpaired$ e%en if , dgment sho ld be rendered against the principal debtor and the g arantor in case of appearance by the latter. (11'*a) Art. 266'. A compromise between the creditor and the principal debtor benefits the g arantor b t does not pre, dice him. That which is entered into between the g arantor and the creditor benefits b t does not pre, dice the principal debtor. (11'5a) Art. 266*. The g arantor of a g arantor shall en,oy the benefit of e)c ssion$ both with respect to the g arantor and to the principal debtor. (11'6) Art. 2665. ?ho ld there be se%eral g arantors of only one debtor and for the same debt$ the obligation to answer for the same is di%ided among all. The creditor cannot claim from the g arantors e)cept the shares which they are respecti%ely bo nd to pay$ nless solidarity has been e)pressly stip lated.

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The benefit of di%ision against the co/g arantors ceases in the same cases and for the same reasons as the benefit of e)c ssion against the principal debtor. (11'-)

SECTION 2. " E44!0t. ,4 $1+*+nt3 B!t@!!n t5! D!9t,* +n8 t5! $1+*+nt,*
Art. 2666. The g arantor who pays for a debtor m st be indemnified by the latter. The indemnity comprises; (1) The total amo nt of the debt7 (2) The legal interests thereon from the time the payment was made known to the debtor$ e%en tho gh it did not earn interest for the creditor7 (') The e)penses inc rred by the g arantor after ha%ing notified the debtor that payment had been demanded of him7 (*) Bamages$ if they are d e. (11'1a) Art. 266-. The g arantor who pays is s brogated by %irt e thereof to all the rights which the creditor had against the debtor. (f the g arantor has compromised with the creditor$ he cannot demand of the debtor more than what he has really paid. (11'4) Art. 2661. (f the g arantor sho ld pay witho t notifying the debtor$ the latter may enforce against him all the defenses which he co ld ha%e set p against the creditor at the time the payment was made. (11*6) Art. 2664. (f the debt was for a period and the g arantor paid it before it became d e$ he cannot demand reimb rsement of the debtor ntil the e)piration of the period nless the payment has been ratified by the debtor. (11*1a) Art. 26-6. (f the g arantor has paid witho t notifying the debtor$ and the latter not being aware of the payment$ repeats the payment$ the former has no remedy whate%er against the debtor$ b t only against the creditor. 5e%ertheless$ in case of a grat ito s g aranty$ if the g arantor was pre%ented by a fort ito s e%ent from ad%ising the debtor of the payment$ and the creditor becomes insol%ent$ the debtor shall reimb rse the g arantor for the amo nt paid. (11*2a) Art. 26-1. The g arantor$ e%en before ha%ing paid$ may proceed against the principal debtor; (1) 0hen he is s ed for the payment7 (2) (n case of insol%ency of the principal debtor7 (') 0hen the debtor has bo nd himself to relie%e him from the g aranty within a specified period$ and this period has e)pired7

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(*) 0hen the debt has become demandable$ by reason of the e)piration of the period for payment7 (5) After the lapse of ten years$ when the principal obligation has no fi)ed period for its mat rity$ nless it be of s ch nat re that it cannot be e)ting ished e)cept within a period longer than ten years7 (6) (f there are reasonable gro nds to fear that the principal debtor intends to abscond7 (-) (f the principal debtor is in imminent danger of becoming insol%ent. (n all these cases$ the action of the g arantor is to obtain release from the g aranty$ or to demand a sec rity that shall protect him from any proceedings by the creditor and from the danger of insol%ency of the debtor. (11'*a) Art. 26-2. (f one$ at the re. est of another$ becomes a g arantor for the debt of a third person who is not present$ the g arantor who satisfies the debt may s e either the person so re. esting or the debtor for reimb rsement. (n)

SECTION 3. " E44!0t. ,4 $1+*+nt3 +. B!t@!!n C,"$1+*+nt,*.

Art. 26-'. 0hen there are two or more g arantors of the same debtor and for the same debt$ the one among them who has paid may demand of each of the others the share which is proportionally owing from him. (f any of the g arantors sho ld be insol%ent$ his share shall be borne by the others$ incl ding the payer$ in the same proportion. The pro%isions of this article shall not be applicable$ nless the payment has been made by %irt e of a , dicial demand or nless the principal debtor is insol%ent. (11**a) Art. 26-*. (n the case of the preceding article$ the co/g arantors may set p against the one who paid$ the same defenses which wo ld ha%e pertained to the principal debtor against the creditor$ and which are not p rely personal to the debtor. (11*5) Art. 26-5. A s b/g arantor$ in case of the insol%ency of the g arantor for whom he bo nd himself$ is responsible to the co/g arantors in the same terms as the g arantor. (11*6)

CHAPTER 3 E(TIN$UISHMENT OF $UARANTY

Art. 26-6. The obligation of the g arantor is e)ting ished at the same time as that of the debtor$ and for the same ca ses as all other obligations. (11*-) Art. 26--. (f the creditor %ol ntarily accepts immo%able or other property in payment of the debt$ e%en if he sho ld afterwards lose the same thro gh e%iction$ the g arantor is released. (11*4)

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Art. 26-1. A release made by the creditor in fa%or of one of the g arantors$ witho t the consent of the others$ benefits all to the e)tent of the share of the g arantor to whom it has been granted. (1156) Art. 26-4. An e)tension granted to the debtor by the creditor witho t the consent of the g arantor e)ting ishes the g aranty. The mere fail re on the part of the creditor to demand payment after the debt has become d e does not of itself constit te any e)tention of time referred to herein. (1151a) Art. 2616. The g arantors$ e%en tho gh they be solidary$ are released from their obligation whene%er by some act of the creditor they cannot be s brogated to the rights$ mortgages$ and preference of the latter. (1152) Art. 2611. The g arantor may set p against the creditor all the defenses which pertain to the principal debtor and are inherent in the debt7 b t not those that are personal to the debtor. (115')

CHAPTER ) LE$AL AND %UDICIAL BONDS

Art. 2612. The bondsman who is to be offered in %irt e of a pro%ision of law or of a , dicial order shall ha%e the . alifications prescribed in Article 2656 and in special laws. (115*a) Art. 261'. (f the person bo nd to gi%e a bond in the cases of the preceding article$ sho ld not be able to do so$ a pledge or mortgage considered s fficient to co%er his obligation shall be admitted in lie thereof. (1155) Art. 261*. A , dicial bondsman cannot demand the e)ha stion of the property of the principal debtor. A s b/s rety in the same case$ cannot demand the e)ha stion of the property of the debtor of the s rety.

Tit ! (VI. " PLED$E? MORT$A$E AND ANTICHRESIS CHAPTER # PROVISIONS COMMON TO PLED$E AND MORT$A$E
Art. 2615. The following re. isites are essential to the contracts of pledge and mortgage; (1) That they be constit ted to sec re the f lfillment of a principal obligation7 (2) That the pledgor or mortgagor be the absol te owner of the thing pledged or mortgaged7

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(') That the persons constit ting the pledge or mortgage ha%e the free disposal of their property$ and in the absence thereof$ that they be legally a thori#ed for the p rpose. Third persons who are not parties to the principal obligation may sec re the latter by pledging or mortgaging their own property. (115-) Art. 2616. The pro%isions of Article 2652 are applicable to a pledge or mortgage. (n) Art. 261-. (t is also of the essence of these contracts that when the principal obligation becomes d e$ the things in which the pledge or mortgage consists may be alienated for the payment to the creditor. (1151) Art. 2611. The creditor cannot appropriate the things gi%en by way of pledge or mortgage$ or dispose of them. Any stip lation to the contrary is n ll and %oid. (1154a) Art. 2614. A pledge or mortgage is indi%isible$ e%en tho gh the debt may be di%ided among the s ccessors in interest of the debtor or of the creditor. Therefore$ the debtor:s heir who has paid a part of the debt cannot ask for the proportionate e)ting ishment of the pledge or mortgage as long as the debt is not completely satisfied. 5either can the creditor:s heir who recei%ed his share of the debt ret rn the pledge or cancel the mortgage$ to the pre, dice of the other heirs who ha%e not been paid. @rom these pro%isions is e)pected the case in which$ there being se%eral things gi%en in mortgage or pledge$ each one of them g arantees only a determinate portion of the credit. The debtor$ in this case$ shall ha%e a right to the e)ting ishment of the pledge or mortgage as the portion of the debt for which each thing is specially answerable is satisfied. (1166) Art. 2646. The indi%isibility of a pledge or mortgage is not affected by the fact that the debtors are not solidarily liable. (n) Art. 2641. The contract of pledge or mortgage may sec re all kinds of obligations$ be they p re or s b,ect to a s spensi%e or resol tory condition. (1161) Art. 2642. A promise to constit te a pledge or mortgage gi%es rise only to a personal action between the contracting parties$ witho t pre, dice to the criminal responsibility inc rred by him who defra ds another$ by offering in pledge or mortgage as nenc mbered$ things which he knew were s b,ect to some b rden$ or by misrepresenting himself to be the owner of the same. (1162)

CHAPTER 2 PLED$E
Art. 264'. (n addition to the re. isites prescribed in Article 2615$ it is necessary$ in order to constit te the contract of pledge$ that the thing pledged be placed in the possession of the creditor$ or of a third person by common agreement. (116') Art. 264*. All mo%ables which are within commerce may be pledged$ pro%ided they are s sceptible of possession. (116*)

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Art. 2645. (ncorporeal rights$ e%idenced by negotiable instr ments$ bills of lading$ shares of stock$ bonds$ wareho se receipts and similar doc ments may also be pledged. The instr ment pro%ing the right pledged shall be deli%ered to the creditor$ and if negotiable$ m st be indorsed. (n) Art. 2646. A pledge shall not take effect against third persons if a description of the thing pledged and the date of the pledge do not appear in a p blic instr ment. (1165a) Art. 264-. 0ith the consent of the pledgee$ the thing pledged may be alienated by the pledgor or owner$ s b,ect to the pledge. The ownership of the thing pledged is transmitted to the %endee or transferee as soon as the pledgee consents to the alienation$ b t the latter shall contin e in possession. (n) Art. 2641. The contract of pledge gi%es a right to the creditor to retain the thing in his possession or in that of a third person to whom it has been deli%ered$ ntil the debt is paid. (1166a) Art. 2644. The creditor shall take care of the thing pledged with the diligence of a good father of a family7 he has a right to the reimb rsement of the e)penses made for its preser%ation$ and is liable for its loss or deterioration$ in conformity with the pro%isions of this &ode. (116-) Art. 2166. The pledgee cannot deposit the thing pledged with a third person$ nless there is a stip lation a thori#ing him to do so. The pledgee is responsible for the acts of his agents or employees with respect to the thing pledged. (n) Art. 2161. The pledgor has the same responsibility as a bailor in commodat m in the case nder Article 1451. (n) Art. 2162. (f the pledge earns or prod ces fr its$ income$ di%idends$ or interests$ the creditor shall compensate what he recei%es with those which are owing him7 b t if none are owing him$ or insofar as the amo nt may e)ceed that which is d e$ he shall apply it to the principal. >nless there is a stip lation to the contrary$ the pledge shall e)tend to the interest and earnings of the right pledged. (n case of a pledge of animals$ their offspring shall pertain to the pledgor or owner of animals pledged$ b t shall be s b,ect to the pledge$ if there is no stip lation to the contrary. (1161a) Art. 216'. >nless the thing pledged is e)propriated$ the debtor contin es to be the owner thereof. 5e%ertheless$ the creditor may bring the actions which pertain to the owner of the thing pledged in order to reco%er it from$ or defend it against a third person. (1164) Art. 216*. The creditor cannot se the thing pledged$ witho t the a thority of the owner$ and if he sho ld do so$ or sho ld mis se the thing in any other way$ the owner may ask that it be , dicially or e)tra, dicially deposited. 0hen the preser%ation of the thing pledged re. ires its se$ it m st be sed by the creditor b t only for that p rpose. (11-6a)

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Art. 2165. The debtor cannot ask for the ret rn of the thing pledged against the will of the creditor$ nless and ntil he has paid the debt and its interest$ with e)penses in a proper case. (11-1) Art. 2166. (f thro gh the negligence or wilf l act of the pledgee$ the thing pledged is in danger of being lost or impaired$ the pledgor may re. ire that it be deposited with a third person. (n) Art. 216-. (f there are reasonable gro nds to fear the destr ction or impairment of the thing pledged$ witho t the fa lt of the pledgee$ the pledgor may demand the ret rn of the thing$ pon offering another thing in pledge$ pro%ided the latter is of the same kind as the former and not of inferior . ality$ and witho t pre, dice to the right of the pledgee nder the pro%isions of the following article. The pledgee is bo nd to ad%ise the pledgor$ witho t delay$ of any danger to the thing pledged. (n) Art. 2161. (f$ witho t the fa lt of the pledgee$ there is danger of destr ction$ impairment$ or dimin tion in %al e of the thing pledged$ he may ca se the same to be sold at a p blic sale. The proceeds of the a ction shall be a sec rity for the principal obligation in the same manner as the thing originally pledged. (n) Art. 2164. (f the creditor is decei%ed on the s bstance or . ality of the thing pledged$ he may either claim another thing in its stead$ or demand immediate payment of the principal obligation. (n) Art. 2116. (f the thing pledged is ret rned by the pledgee to the pledgor or owner$ the pledge is e)ting ished. Any stip lation to the contrary shall be %oid. (f s bse. ent to the perfection of the pledge$ the thing is in the possession of the pledgor or owner$ there is a prima facie pres mption that the same has been ret rned by the pledgee. This same pres mption e)ists if the thing pledged is in the possession of a third person who has recei%ed it from the pledgor or owner after the constit tion of the pledge. (n) Art. 2111. A statement in writing by the pledgee that he reno nces or abandons the pledge is s fficient to e)ting ish the pledge. @or this p rpose$ neither the acceptance by the pledgor or owner$ nor the ret rn of the thing pledged is necessary$ the pledgee becoming a depositary. (n) Art. 2112. The creditor to whom the credit has not been satisfied in d e time$ may proceed before a 5otary 3 blic to the sale of the thing pledged. This sale shall be made at a p blic a ction$ and with notification to the debtor and the owner of the thing pledged in a proper case$ stating the amo nt for which the p blic sale is to be held. (f at the first a ction the thing is not sold$ a second one with the same formalities shall be held7 and if at the second a ction there is no sale either$ the creditor may appropriate the thing pledged. (n this case he shall be obliged to gi%e an ac. ittance for his entire claim. (11-2a) Art. 211'. At the p blic a ction$ the pledgor or owner may bid. 8e shall$ moreo%er$ ha%e a better right if he sho ld offer the same terms as the highest bidder. The pledgee may also bid$ b t his offer shall not be %alid if he is the only bidder. (n)

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Art. 211*. All bids at the p blic a ction shall offer to pay the p rchase price at once. (f any other bid is accepted$ the pledgee is deemed to ha%e been recei%ed the p rchase price$ as far as the pledgor or owner is concerned. (n) Art. 2115. The sale of the thing pledged shall e)ting ish the principal obligation$ whether or not the proceeds of the sale are e. al to the amo nt of the principal obligation$ interest and e)penses in a proper case. (f the price of the sale is more than said amo nt$ the debtor shall not be entitled to the e)cess$ nless it is otherwise agreed. (f the price of the sale is less$ neither shall the creditor be entitled to reco%er the deficiency$ notwithstanding any stip lation to the contrary. (n) Art. 2116. After the p blic a ction$ the pledgee shall promptly ad%ise the pledgor or owner of the res lt thereof. (n) Art. 211-. Any third person who has any right in or to the thing pledged may satisfy the principal obligation as soon as the latter becomes d e and demandable.(n) Art. 2111. (f a credit which has been pledged becomes d e before it is redeemed$ the pledgee may collect and recei%e the amo nt d e. 8e shall apply the same to the payment of his claim$ and deli%er the s rpl s$ sho ld there be any$ to the pledgor. (n) Art. 2114. (f two or more things are pledged$ the pledgee may choose which he will ca se to be sold$ nless there is a stip lation to the contrary. 8e may demand the sale of only as many of the things as are necessary for the payment of the debt. (n) Art. 2126. (f a third party sec res an obligation by pledging his own mo%able property nder the pro%isions of Article 2615 he shall ha%e the same rights as a g arantor nder Articles 2666 to 26-6$ and Articles 26-- to 2611. 8e is not pre, diced by any wai%er of defense by the principal obligor. (n) Art. 2121. 3ledges created by operation of law$ s ch as those referred to in Articles 5*6$ 1-'1$ and 144*$ are go%erned by the foregoing articles on the possession$ care and sale of the thing as well as on the termination of the pledge. 8owe%er$ after payment of the debt and e)penses$ the remainder of the price of the sale shall be deli%ered to the obligor. (n) Art. 2122. A thing nder a pledge by operation of law may be sold only after demand of the amo nt for which the thing is retained. The p blic a ction shall take place within one month after s ch demand. (f$ witho t , st gro nds$ the creditor does not ca se the p blic sale to be held within s ch period$ the debtor may re. ire the ret rn of the thing. (n) Art. 212'. 0ith regard to pawnshops and other establishments$ which are engaged in making loans sec red by pledges$ the special laws and reg lations concerning them shall be obser%ed$ and s bsidiarily$ the pro%isions of this Title. (11-'a)

CHAPTER 3 MORT$A$E
Art. 212*. !nly the following property may be the ob,ect of a contract of mortgage; (1) (mmo%ables7 (2) Alienable real rights in accordance with the laws$ imposed pon immo%ables.

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5e%ertheless$ mo%ables may be the ob,ect of a chattel mortgage. (11-*a) Art. 2125. (n addition to the re. isites stated in Article 2615$ it is indispensable$ in order that a mortgage may be %alidly constit ted$ that the doc ment in which it appears be recorded in the +egistry of 3roperty. (f the instr ment is not recorded$ the mortgage is ne%ertheless binding between the parties. The persons in whose fa%or the law establishes a mortgage ha%e no other right than to demand the e)ec tion and the recording of the doc ment in which the mortgage is formali#ed. (11-5a) Art. 2126. The mortgage directly and immediately s b,ects the property pon which it is imposed$ whoe%er the possessor may be$ to the f lfillment of the obligation for whose sec rity it was constit ted. (11-6) Art. 212-. The mortgage e)tends to the nat ral accessions$ to the impro%ements$ growing fr its$ and the rents or income not yet recei%ed when the obligation becomes d e$ and to the amo nt of the indemnity granted or owing to the proprietor from the ins rers of the property mortgaged$ or in %irt e of e)propriation for p blic se$ with the declarations$ amplifications and limitations established by law$ whether the estate remains in the possession of the mortgagor$ or it passes into the hands of a third person. (11--) Art. 2121. The mortgage credit may be alienated or assigned to a third person$ in whole or in part$ with the formalities re. ired by law. (11-1) Art. 2124. The creditor may claim from a third person in possession of the mortgaged property$ the payment of the part of the credit sec red by the property which said third person possesses$ in the terms and with the formalities which the law establishes. (11-4) Art. 21'6. A stip lation forbidding the owner from alienating the immo%able mortgaged shall be %oid. (n) Art. 21'1. The form$ e)tent and conse. ences of a mortgage$ both as to its constit tion$ modification and e)ting ishment$ and as to other matters not incl ded in this &hapter$ shall be go%erned by the pro%isions of the <ortgage Law and of the Land +egistration Law. (1116a)

CHAPTER ) ANTICHRESIS
Art. 21'2. Ay the contract of antichresis the creditor ac. ires the right to recei%e the fr its of an immo%able of his debtor$ with the obligation to apply them to the payment of the interest$ if owing$ and thereafter to the principal of his credit. (1111) Art. 21''. The act al market %al e of the fr its at the time of the application thereof to the interest and principal shall be the meas re of s ch application. (n) Art. 21'*. The amo nt of the principal and of the interest shall be specified in writing7 otherwise$ the contract of antichresis shall be %oid. (n)

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Art. 21'5. The creditor$ nless there is a stip lation to the contrary$ is obliged to pay the ta)es and charges pon the estate. 8e is also bo nd to bear the e)penses necessary for its preser%ation and repair. The s ms spent for the p rposes stated in this article shall be ded cted from the fr its. (1112) Art. 21'6. The debtor cannot reac. ire the en,oyment of the immo%able witho t first ha%ing totally paid what he owes the creditor. A t the latter$ in order to e)empt himself from the obligations imposed pon him by the preceding article$ may always compel the debtor to enter again pon the en,oyment of the property$ e)cept when there is a stip lation to the contrary. (111') Art. 21'-. The creditor does not ac. ire the ownership of the real estate for non/payment of the debt within the period agreed pon. 9%ery stip lation to the contrary shall be %oid. A t the creditor may petition the co rt for the payment of the debt or the sale of the real property. (n this case$ the + les of &o rt on the foreclos re of mortgages shall apply. (111*a) Art. 21'1. The contracting parties may stip late that the interest pon the debt be compensated with the fr its of the property which is the ob,ect of the antichresis$ pro%ided that if the %al e of the fr its sho ld e)ceed the amo nt of interest allowed by the laws against s ry$ the e)cess shall be applied to the principal. (1115a) Art. 21'4. The last paragraph of Article 2615$ and Articles 2614 to 2641 are applicable to this contract. (1116a)

CHAPTER : CHATTEL MORT$A$E

Art. 21*6. Ay a chattel mortgage$ personal property is recorded in the &hattel <ortgage +egister as a sec rity for the performance of an obligation. (f the mo%able$ instead of being recorded$ is deli%ered to the creditor or a third person$ the contract is a pledge and not a chattel mortgage. (n) Art. 21*1. The pro%isions of this &ode on pledge$ insofar as they are not in conflict with the &hattel <ortgage Law shall be applicable to chattel mortgages. (n)

Tit ! (VII. " E(TRA"CONTRACTUAL OBLI$ATIONS CHAPTER # 'UASI"CONTRACTS

Art. 21*2. &ertain lawf l$ %ol ntary and nilateral acts gi%e rise to the , ridical relation of . asi/contract to the end that no one shall be n, stly enriched or benefited at the e)pense of another. (n)

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Art. 21*'. The pro%isions for . asi/contracts in this &hapter do not e)cl de other . asi/ contracts which may come within the p r%iew of the preceding article. (n)

SECTION #. " Negotiorum Gestio

Art. 21**. 0hoe%er %ol ntarily takes charge of the agency or management of the b siness or property of another$ witho t any power from the latter$ is obliged to contin e the same ntil the termination of the affair and its incidents$ or to re. ire the person concerned to s bstit te him$ if the owner is in a position to do so. This , ridical relation does not arise in either of these instances; (1) 0hen the property or b siness is not neglected or abandoned7 (2) (f in fact the manager has been tacitly a thori#ed by the owner. (n the first case$ the pro%isions of Articles 1'1-$ 1*6'$ 5o. 1$ and 1*6* regarding na thori#ed contracts shall go%ern. (n the second case$ the r les on agency in Title E of this Aook shall be applicable. (1111a) Art. 21*5. The officio s manager shall perform his d ties with all the diligence of a good father of a family$ and pay the damages which thro gh his fa lt or negligence may be s ffered by the owner of the property or b siness nder management. The co rts may$ howe%er$ increase or moderate the indemnity according to the circ mstances of each case. (1114a) Art. 21*6. (f the officio s manager delegates to another person all or some of his d ties$ he shall be liable for the acts of the delegate$ witho t pre, dice to the direct obligation of the latter toward the owner of the b siness. The responsibility of two or more officio s managers shall be solidary$ nless the management was ass med to sa%e the thing or b siness from imminent danger. (1146a) Art. 21*-. The officio s manager shall be liable for any fort ito s e%ent; (1) (f he ndertakes risky operations which the owner was not acc stomed to embark pon7 (2) (f he has preferred his own interest to that of the owner7 (') (f he fails to ret rn the property or b siness after demand by the owner7 (*) (f he ass med the management in bad faith. (1141a) Art. 21*1. 9)cept when the management was ass med to sa%e property or b siness from imminent danger$ the officio s manager shall be liable for fort ito s e%ents; (1) (f he is manifestly nfit to carry on the management7 (2) (f by his inter%ention he pre%ented a more competent person from taking management. (n) p the

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Art. 21*4. The ratification of the management by the owner of the b siness prod ces the effects of an e)press agency$ e%en if the b siness may not ha%e been s ccessf l. (1142a) Art. 2156. Altho gh the officio s management may not ha%e been e)pressly ratified$ the owner of the property or b siness who en,oys the ad%antages of the same shall be liable for obligations inc rred in his interest$ and shall reimb rse the officio s manager for the necessary and sef l e)penses and for the damages which the latter may ha%e s ffered in the performance of his d ties. The same obligation shall be inc mbent pon him when the management had for its p rpose the pre%ention of an imminent and manifest loss$ altho gh no benefit may ha%e been deri%ed. (114') Art. 2151. 9%en tho gh the owner did not deri%e any benefit and there has been no imminent and manifest danger to the property or b siness$ the owner is liable as nder the first paragraph of the preceding article$ pro%ided; (1) The officio s manager has acted in good faith$ and (2) The property or b siness is intact$ ready to be ret rned to the owner. (n) Art. 2152. The officio s manager is personally liable for contracts which he has entered into with third persons$ e%en tho gh he acted in the name of the owner$ and there shall be no right of action between the owner and third persons. These pro%isions shall not apply; (1) (f the owner has e)pressly or tacitly ratified the management$ or (2) 0hen the contract refers to things pertaining to the owner of the b siness. (n) Art. 215'. The management is e)ting ished; (1) 0hen the owner rep diates it or p ts an end thereto7 (2) 0hen the officio s manager withdraws from the management$ s b,ect to the pro%isions of Article 21**7 (') Ay the death$ ci%il interdiction$ insanity or insol%ency of the owner or the officio s manager. (n)

SECTION 2. " Solutio Indebiti

Art. 215*. (f something is recei%ed when there is no right to demand it$ and it was deli%ered thro gh mistake$ the obligation to ret rn it arises. (1145) nd ly

Art. 2155. 3ayment by reason of a mistake in the constr ction or application of a do btf l or diffic lt . estion of law may come within the scope of the preceding article. (n) Art. 2156. (f the payer was in do bt whether the debt was d e$ he may reco%er if he pro%es that it was not d e. (n) Art. 215-. The responsibility of two or more payees$ when there has been payment of what is not d e$ is solidary. (n)

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Art. 2151. 0hen the property deli%ered or money paid belongs to a third person$ the payee shall comply with the pro%isions of article 141*. (n) Art. 2154. 0hoe%er in bad faith accepts an nd e payment$ shall pay legal interest if a s m of money is in%ol%ed$ or shall be liable for fr its recei%ed or which sho ld ha%e been recei%ed if the thing prod ces fr its. 8e shall f rthermore be answerable for any loss or impairment of the thing from any ca se$ and for damages to the person who deli%ered the thing$ ntil it is reco%ered. (1146a) Art. 2166. 8e who in good faith accepts an nd e payment of a thing certain and determinate shall only be responsible for the impairment or loss of the same or its accessories and accessions insofar as he has thereby been benefited. (f he has alienated it$ he shall ret rn the price or assign the action to collect the s m. (114-) Art. 2161. As regards the reimb rsement for impro%ements and e)penses inc rred by him who nd ly recei%ed the thing$ the pro%isions of Title = of Aook (( shall go%ern. (1141) Art. 2162. 8e shall be e)empt from the obligation to restore who$ belie%ing in good faith that the payment was being made of a legitimate and s bsisting claim$ destroyed the doc ment$ or allowed the action to prescribe$ or ga%e p the pledges$ or cancelled the g aranties for his right. 8e who paid nd ly may proceed only against the tr e debtor or the g arantors with regard to whom the action is still effecti%e. (1144) Art. 216'. (t is pres med that there was a mistake in the payment if something which had ne%er been d e or had already been paid was deli%ered7 b t he from whom the ret rn is claimed may pro%e that the deli%ery was made o t of liberality or for any other , st ca se. (1461)

SECTION 3. " Ot5!* '1+.i"C,nt*+0t.

Art. 216*. 0hen$ witho t the knowledge of the person obliged to gi%e s pport$ it is gi%en by a stranger$ the latter shall ha%e a right to claim the same from the former$ nless it appears that he ga%e it o t of piety and witho t intention of being repaid. (114*a) Art. 2165. 0hen f neral e)penses are borne by a third person$ witho t the knowledge of those relati%es who were obliged to gi%e s pport to the deceased$ said relati%es shall reimb rse the third person$ sho ld the latter claim reimb rsement. (114*a) Art. 2166. 0hen the person obliged to s pport an orphan$ or an insane or other indigent person n, stly ref ses to gi%e s pport to the latter$ any third person may f rnish s pport to the needy indi%id al$ with right of reimb rsement from the person obliged to gi%e s pport. The pro%isions of this article apply when the father or mother of a child nder eighteen years of age n, stly ref ses to s pport him. Art. 216-. 0hen thro gh an accident or other ca se a person is in, red or becomes serio sly ill$ and he is treated or helped while he is not in a condition to gi%e consent to a contract$ he shall be liable to pay for the ser%ices of the physician or other person aiding him$ nless the ser%ice has been rendered o t of p re generosity. Art. 2161. 0hen d ring a fire$ flood$ storm$ or other calamity$ property is sa%ed from destr ction by another person witho t the knowledge of the owner$ the latter is bo nd to pay the former , st compensation.

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Art. 2164. 0hen the go%ernment$ pon the fail re of any person to comply with health or safety reg lations concerning property$ ndertakes to do the necessary work$ e%en o%er his ob,ection$ he shall be liable to pay the e)penses. Art. 21-6. 0hen by accident or other fort ito s e%ent$ mo%ables separately pertaining to two or more persons are commingled or conf sed$ the r les on co/ownership shall be applicable. Art. 21-1. The rights and obligations of the finder of lost personal property shall be go%erned by Articles -14 and -26. Art. 21-2. The right of e%ery possessor in good faith to reimb rsement for necessary and sef l e)penses is go%erned by Article 5*6. Art. 21-'. 0hen a third person$ witho t the knowledge of the debtor$ pays the debt$ the rights of the former are go%erned by Articles 12'6 and 12'-. Art. 21-*. 0hen in a small comm nity a nationality of the inhabitants of age decide pon a meas re for protection against lawlessness$ fire$ flood$ storm or other calamity$ any one who ob,ects to the plan and ref ses to contrib te to the e)penses b t is benefited by the pro,ect as e)ec ted shall be liable to pay his share of said e)penses. Art. 21-5. Any person who is constrained to pay the ta)es of another shall be entitled to reimb rsement from the latter.

CHAPTER 2 'UASI"DELICTS
Art. 21-6. 0hoe%er by act or omission ca ses damage to another$ there being fa lt or negligence$ is obliged to pay for the damage done. ? ch fa lt or negligence$ if there is no pre/e)isting contract al relation between the parties$ is called a . asi/delict and is go%erned by the pro%isions of this &hapter. (1462a) Art. 21--. +esponsibility for fa lt or negligence nder the preceding article is entirely separate and distinct from the ci%il liability arising from negligence nder the 3enal &ode. A t the plaintiff cannot reco%er damages twice for the same act or omission of the defendant. (n) Art. 21-1. The pro%isions of Articles 11-2 to 11-* are also applicable to a . asi/delict. (n) Art. 21-4. 0hen the plaintiff:s own negligence was the immediate and pro)imate ca se of his in, ry$ he cannot reco%er damages. A t if his negligence was only contrib tory$ the immediate and pro)imate ca se of the in, ry being the defendant:s lack of d e care$ the plaintiff may reco%er damages$ b t the co rts shall mitigate the damages to be awarded. (n) Art. 2116. The obligation imposed by Article 21-6 is demandable not only for one:s own acts or omissions$ b t also for those of persons for whom one is responsible. The father and$ in case of his death or incapacity$ the mother$ are responsible for the damages ca sed by the minor children who li%e in their company.

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" ardians are liable for damages ca sed by the minors or incapacitated persons who are nder their a thority and li%e in their company. The owners and managers of an establishment or enterprise are likewise responsible for damages ca sed by their employees in the ser%ice of the branches in which the latter are employed or on the occasion of their f nctions. 9mployers shall be liable for the damages ca sed by their employees and ho sehold helpers acting within the scope of their assigned tasks$ e%en tho gh the former are not engaged in any b siness or ind stry. The ?tate is responsible in like manner when it acts thro gh a special agent7 b t not when the damage has been ca sed by the official to whom the task done properly pertains$ in which case what is pro%ided in Article 21-6 shall be applicable. Lastly$ teachers or heads of establishments of arts and trades shall be liable for damages ca sed by their p pils and st dents or apprentices$ so long as they remain in their c stody. The responsibility treated of in this article shall cease when the persons herein mentioned pro%e that they obser%ed all the diligence of a good father of a family to pre%ent damage. (146'a) Art. 2111. 0hoe%er pays for the damage ca sed by his dependents or employees may reco%er from the latter what he has paid or deli%ered in satisfaction of the claim. (146*) Art. 2112. (f the minor or insane person ca sing damage has no parents or g ardian$ the minor or insane person shall be answerable with his own property in an action against him where a g ardian ad litem shall be appointed. (n) Art. 211'. The possessor of an animal or whoe%er may make se of the same is responsible for the damage which it may ca se$ altho gh it may escape or be lost. This responsibility shall cease only in case the damage sho ld come from force ma,e re or from the fa lt of the person who has s ffered damage. (1465) Art. 211*. (n motor %ehicle mishaps$ the owner is solidarily liable with his dri%er$ if the former$ who was in the %ehicle$ co ld ha%e$ by the se of the d e diligence$ pre%ented the misfort ne. (t is disp tably pres med that a dri%er was negligent$ if he had been fo nd g ilty or reckless dri%ing or %iolating traffic reg lations at least twice within the ne)t preceding two months. (f the owner was not in the motor %ehicle$ the pro%isions of Article 2116 are applicable. (n) Art. 2115. >nless there is proof to the contrary$ it is pres med that a person dri%ing a motor %ehicle has been negligent if at the time of the mishap$ he was %iolating any traffic reg lation. (n) Art. 2116. 9%ery owner of a motor %ehicle shall file with the proper go%ernment office a bond e)ec ted by a go%ernment/controlled corporation or office$ to answer for damages to third persons. The amo nt of the bond and other terms shall be fi)ed by the competent p blic official. (n)

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Art. 211-. <an fact rers and processors of foodst ffs$ drinks$ toilet articles and similar goods shall be liable for death or in, ries ca sed by any no)io s or harmf l s bstances sed$ altho gh no contract al relation e)ists between them and the cons mers. (n) Art. 2111. There is prima facie pres mption of negligence on the part of the defendant if the death or in, ry res lts from his possession of dangero s weapons or s bstances$ s ch as firearms and poison$ e)cept when the possession or se thereof is indispensable in his occ pation or b siness. (n) Art. 2114. 3ro%inces$ cities and m nicipalities shall be liable for damages for the death of$ or in, ries s ffered by$ any person by reason of the defecti%e condition of roads$ streets$ bridges$ p blic b ildings$ and other p blic works nder their control or s per%ision. (n) Art. 2146. The proprietor of a b ilding or str ct re is responsible for the damages res lting from its total or partial collapse$ if it sho ld be d e to the lack of necessary repairs. (146-) Art. 2141. 3roprietors shall also be responsible for damages ca sed; (1) Ay the e)plosion of machinery which has not been taken care of with d e diligence$ and the inflammation of e)plosi%e s bstances which ha%e not been kept in a safe and ade. ate place7 (2) Ay e)cessi%e smoke$ which may be harmf l to persons or property7 (') Ay the falling of trees sit ated at or near highways or lanes$ if not ca sed by force ma,e re7 (*) Ay emanations from t bes$ canals$ sewers or deposits of infectio s matter$ constr cted witho t preca tions s itable to the place. (1461) Art. 2142. (f damage referred to in the two preceding articles sho ld be the res lt of any defect in the constr ction mentioned in Article 1-2'$ the third person s ffering damages may proceed only against the engineer or architect or contractor in accordance with said article$ within the period therein fi)ed. (1464) Art. 214'. The head of a family that li%es in a b ilding or a part thereof$ is responsible for damages ca sed by things thrown or falling from the same. (1416) Art. 214*. The responsibility of two or more persons who are liable for . asi/delict is solidary. (n)

Tit ! (VIII. " DAMA$ES CHAPTER # $ENERAL PROVISIONS

Art. 2145. The pro%isions of this Title shall be respecti%ely applicable to all obligations mentioned in Article 115-. Art. 2146. The r les nder this Title are witho t pre, dice to special pro%isions on damages form lated elsewhere in this &ode. &ompensation for workmen and other employees in case

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of death$ in, ry or illness is reg lated by special laws. + les go%erning damages laid down in other laws shall be obser%ed insofar as they are not in conflict with this &ode. Art. 214-. Bamages may be; (1) Act al or compensatory7 (2) <oral7 (') 5ominal7 (*) Temperate or moderate7 (5) Li. idated7 or (6) 9)emplary or correcti%e. Art. 2141. The principles of the general law on damages are hereby adopted insofar as they are not inconsistent with this &ode.

CHAPTER 2 ACTUAL OR COMPENSATORY DAMA$ES

Art. 2144. 9)cept as pro%ided by law or by stip lation$ one is entitled to an ade. ate compensation only for s ch pec niary loss s ffered by him as he has d ly pro%ed. ? ch compensation is referred to as act al or compensatory damages. Art. 2266. (ndemnification for damages shall comprehend not only the %al e of the loss s ffered$ b t also that of the profits which the obligee failed to obtain. (1166) Art. 2261. (n contracts and . asi/contracts$ the damages for which the obligor who acted in good faith is liable shall be those that are the nat ral and probable conse. ences of the breach of the obligation$ and which the parties ha%e foreseen or co ld ha%e reasonably foreseen at the time the obligation was constit ted. (n case of fra d$ bad faith$ malice or wanton attit de$ the obligor shall be responsible for all damages which may be reasonably attrib ted to the non/performance of the obligation. (116-a) Art. 2262. (n crimes and . asi/delicts$ the defendant shall be liable for all damages which are the nat ral and probable conse. ences of the act or omission complained of. (t is not necessary that s ch damages ha%e been foreseen or co ld ha%e reasonably been foreseen by the defendant. Art. 226'. The party s ffering loss or in, ry m st e)ercise the diligence of a good father of a family to minimi#e the damages res lting from the act or omission in . estion. Art. 226*. (n crimes$ the damages to be ad, dicated may be respecti%ely increased or lessened according to the aggra%ating or mitigating circ mstances. Art. 2265. Bamages may be reco%ered;

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(1) @or loss or impairment of earning capacity in cases of temporary or permanent personal in, ry7 (2) @or in, ry to the plaintiff:s b siness standing or commercial credit. Art. 2266. The amo nt of damages for death ca sed by a crime or . asi/delict shall be at least three tho sand pesos$ e%en tho gh there may ha%e been mitigating circ mstances. (n addition; (1) The defendant shall be liable for the loss of the earning capacity of the deceased$ and the indemnity shall be paid to the heirs of the latter7 s ch indemnity shall in e%ery case be assessed and awarded by the co rt$ nless the deceased on acco nt of permanent physical disability not ca sed by the defendant$ had no earning capacity at the time of his death7 (2) (f the deceased was obliged to gi%e s pport according to the pro%isions of Article 241$ the recipient who is not an heir called to the decedent:s inheritance by the law of testate or intestate s ccession$ may demand s pport from the person ca sing the death$ for a period not e)ceeding fi%e years$ the e)act d ration to be fi)ed by the co rt7 (') The spo se$ legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental ang ish by reason of the death of the deceased. Art. 226-. (f the plaintiff:s property has been ins red$ and he has recei%ed indemnity from the ins rance company for the in, ry or loss arising o t of the wrong or breach of contract complained of$ the ins rance company shall be s brogated to the rights of the ins red against the wrongdoer or the person who has %iolated the contract. (f the amo nt paid by the ins rance company does not f lly co%er the in, ry or loss$ the aggrie%ed party shall be entitled to reco%er the deficiency from the person ca sing the loss or in, ry. Art. 2261. (n the absence of stip lation$ attorney:s fees and e)penses of litigation$ other than , dicial costs$ cannot be reco%ered$ e)cept; (1) 0hen e)emplary damages are awarded7 (2) 0hen the defendant:s act or omission has compelled the plaintiff to litigate with third persons or to inc r e)penses to protect his interest7 (') (n criminal cases of malicio s prosec tion against the plaintiff7 (*) (n case of a clearly nfo nded ci%il action or proceeding against the plaintiff7 (5) 0here the defendant acted in gross and e%ident bad faith in ref sing to satisfy the plaintiff:s plainly %alid$ , st and demandable claim7 (6) (n actions for legal s pport7 (-) (n actions for the reco%ery of wages of ho sehold helpers$ laborers and skilled workers7

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(1) (n actions for indemnity laws7

nder workmen:s compensation and employer:s liability

(4) (n a separate ci%il action to reco%er ci%il liability arising from a crime7 (16) 0hen at least do ble , dicial costs are awarded7 (11) (n any other case where the co rt deems it , st and e. itable that attorney:s fees and e)penses of litigation sho ld be reco%ered. (n all cases$ the attorney:s fees and e)penses of litigation m st be reasonable. Art. 2264. (f the obligation consists in the payment of a s m of money$ and the debtor inc rs in delay$ the indemnity for damages$ there being no stip lation to the contrary$ shall be the payment of the interest agreed pon$ and in the absence of stip lation$ the legal interest$ which is si) per cent per ann m. (1161) Art. 2216. (nterest may$ in the discretion of the co rt$ be allowed pon damages awarded for breach of contract. Art. 2211. (n crimes and . asi/delicts$ interest as a part of the damages may$ in a proper case$ be ad, dicated in the discretion of the co rt. Art. 2212. (nterest d e shall earn legal interest from the time it is , dicially demanded$ altho gh the obligation may be silent pon this point. (1164a) Art. 221'. (nterest cannot be reco%ered pon nli. idated claims or damages$ e)cept when the demand can be established with reasonably certainty. Art. 221*. (n . asi/delicts$ the contrib tory negligence of the plaintiff shall red ce the damages that he may reco%er. Art. 2215. (n contracts$ . asi/contracts$ and . asi/delicts$ the co rt may e. itably mitigate the damages nder circ mstances other than the case referred to in the preceding article$ as in the following instances; (1) That the plaintiff himself has contra%ened the terms of the contract7 (2) That the plaintiff has deri%ed some benefit as a res lt of the contract7 (') (n cases where e)emplary damages are to be awarded$ that the defendant acted pon the ad%ice of co nsel7 (*) That the loss wo ld ha%e res lted in any e%ent7 (5) That since the filing of the action$ the defendant has done his best to lessen the plaintiff:s loss or in, ry.

CHAPTER 3 OTHER >INDS OF DAMA$ES

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Art. 2216. 5o proof of pec niary loss is necessary in order that moral$ nominal$ temperate$ li. idated or e)emplary damages$ may be ad, dicated. The assessment of s ch damages$ e)cept li. idated ones$ is left to the discretion of the co rt$ according to the circ mstances of each case.

SECTION #. " M,*+ D+;+7!.

Art. 221-. <oral damages incl de physical s ffering$ mental ang ish$ fright$ serio s an)iety$ besmirched rep tation$ wo nded feelings$ moral shock$ social h miliation$ and similar in, ry. Tho gh incapable of pec niary comp tation$ moral damages may be reco%ered if they are the pro)imate res lt of the defendant:s wrongf l act for omission. Art. 2211. (n the ad, dication of moral damages$ the sentimental %al e of property$ real or personal$ may be considered. Art. 2214. <oral damages may be reco%ered in the following and analogo s cases; (1) A criminal offense res lting in physical in, ries7 (2) D asi/delicts ca sing physical in, ries7 (') ?ed ction$ abd ction$ rape$ or other lasci%io s acts7 (*) Ad ltery or conc binage7 (5) (llegal or arbitrary detention or arrest7 (6) (llegal search7 (-) Libel$ slander or any other form of defamation7 (1) <alicio s prosec tion7 (4) Acts mentioned in Article '647 (16) Acts and actions referred to in Articles 21$ 26$ 2-$ 21$ 24$ '6$ '2$ '*$ and '5. The parents of the female sed ced$ abd cted$ raped$ or ab sed$ referred to in 5o. ' of this article$ may also reco%er moral damages. The spo se$ descendants$ ascendants$ and brothers and sisters may bring the action mentioned in 5o. 4 of this article$ in the order named. Art. 2226. 0illf l in, ry to property may be a legal gro nd for awarding moral damages if the co rt sho ld find that$ nder the circ mstances$ s ch damages are , stly d e. The same r le applies to breaches of contract where the defendant acted fra d lently or in bad faith.

SECTION 2. " N,;in+ D+;+7!.

Art. 2221. 5ominal damages are ad, dicated in order that a right of the plaintiff$ which has

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been %iolated or in%aded by the defendant$ may be %indicated or recogni#ed$ and not for the p rpose of indemnifying the plaintiff for any loss s ffered by him. Art. 2222. The co rt may award nominal damages in e%ery obligation arising from any so rce en merated in Article 115-$ or in e%ery case where any property right has been in%aded. Art. 222'. The ad, dication of nominal damages shall precl de f rther contest pon the right in%ol%ed and all accessory . estions$ as between the parties to the s it$ or their respecti%e heirs and assigns.

SECTION 3. " T!;2!*+t! ,* M,8!*+t! D+;+7!.

Art. 222*. Temperate or moderate damages$ which are more than nominal b t less than compensatory damages$ may be reco%ered when the co rt finds that some pec niary loss has been s ffered b t its amo nt can not$ from the nat re of the case$ be pro%ided with certainty. Art. 2225. Temperate damages m st be reasonable nder the circ mstances.

SECTION ). " Li=1i8+t!8 D+;+7!.

Art. 2226. Li. idated damages are those agreed paid in case of breach thereof. pon by the parties to a contract$ to be

Art. 222-. Li. idated damages$ whether intended as an indemnity or a penalty$ shall be e. itably red ced if they are ini. ito s or nconscionable. Art. 2221. 0hen the breach of the contract committed by the defendant is not the one contemplated by the parties in agreeing pon the li. idated damages$ the law shall determine the meas re of damages$ and not the stip lation.

SECTION :. " E/!;2 +*3 ,* C,**!0ti-! D+;+7!.

Art. 2224. 9)emplary or correcti%e damages are imposed$ by way of e)ample or correction for the p blic good$ in addition to the moral$ temperate$ li. idated or compensatory damages. Art. 22'6. (n criminal offenses$ e)emplary damages as a part of the ci%il liability may be imposed when the crime was committed with one or more aggra%ating circ mstances. ? ch damages are separate and distinct from fines and shall be paid to the offended party. Art. 22'1. (n . asi/delicts$ e)emplary damages may be granted if the defendant acted with gross negligence. Art. 22'2. (n contracts and . asi/contracts$ the co rt may award e)emplary damages if the defendant acted in a wanton$ fra d lent$ reckless$ oppressi%e$ or male%olent manner. Art. 22''. 9)emplary damages cannot be reco%ered as a matter of right7 the co rt will decide whether or not they sho ld be ad, dicated.

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Art. 22'*. 0hile the amo nt of the e)emplary damages need not be pro%ed$ the plaintiff m st show that he is entitled to moral$ temperate or compensatory damages before the co rt may consider the . estion of whether or not e)emplary damages sho ld be awarded. (n case li. idated damages ha%e been agreed pon$ altho gh no proof of loss is necessary in order that s ch li. idated damages may be reco%ered$ ne%ertheless$ before the co rt may consider the . estion of granting e)emplary in addition to the li. idated damages$ the plaintiff m st show that he wo ld be entitled to moral$ temperate or compensatory damages were it not for the stip lation for li. idated damages. Art. 22'5. A stip lation whereby e)emplary damages are reno nced in ad%ance shall be n ll and %oid.

Tit ! (I(. " CONCURRENCE AND PREFERENCE OF CREDITS CHAPTER # $ENERAL PROVISIONS
Art. 22'6. The debtor is liable with all his property$ present and f t re$ for the f lfillment of his obligations$ s b,ect to the e)emptions pro%ided by law. (1411a) Art. 22'-. (nsol%ency shall be go%erned by special laws insofar as they are not inconsistent with this &ode. (n) Art. 22'1. ?o long as the con, gal partnership or absol te comm nity s bsists$ its property shall not be among the assets to be taken possession of by the assignee for the payment of the insol%ent debtor:s obligations$ e)cept insofar as the latter ha%e redo nded to the benefit of the family. (f it is the h sband who is insol%ent$ the administration of the con, gal partnership of absol te comm nity may$ by order of the co rt$ be transferred to the wife or to a third person other than the assignee. (n) Art. 22'4. (f there is property$ other than that mentioned in the preceding article$ owned by two or more persons$ one of whom is the insol%ent debtor$ his ndi%ided share or interest therein shall be among the assets to be taken possession of by the assignee for the payment of the insol%ent debtor:s obligations. (n) Art. 22*6. 3roperty held by the insol%ent debtor as a tr stee of an e)press or implied tr st$ shall be e)cl ded from the insol%ency proceedings. (n)

CHAPTER 2 CLASSIFICATION OF CREDITS

Art. 22*1. 0ith reference to specific mo%able property of the debtor$ the following claims or liens shall be preferred; (1) B ties$ ta)es and fees d e thereon to the ?tate or any s bdi%ision thereof7 (2) &laims arising from misappropriation$ breach of tr st$ or malfeasance by p blic officials committed in the performance of their d ties$ on the mo%ables$ money or sec rities obtained by them7

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(') &laims for the npaid price of mo%ables sold$ on said mo%ables$ so long as they are in the possession of the debtor$ p to the %al e of the same7 and if the mo%able has been resold by the debtor and the price is still npaid$ the lien may be enforced on the price7 this right is not lost by the immobili#ation of the thing by destination$ pro%ided it has not lost its form$ s bstance and identity7 neither is the right lost by the sale of the thing together with other property for a l mp s m$ when the price thereof can be determined proportionally7 (*) &redits g aranteed with a pledge so long as the things pledged are in the hands of the creditor$ or those g aranteed by a chattel mortgage$ pon the things pledged or mortgaged$ p to the %al e thereof7 (5) &redits for the making$ repair$ safekeeping or preser%ation of personal property$ on the mo%able th s made$ repaired$ kept or possessed7 (6) &laims for laborers: wages$ on the goods man fact red or the work done7 (-) @or e)penses of sal%age$ pon the goods sal%aged7 (1) &redits between the landlord and the tenant$ arising from the contract of tenancy on shares$ on the share of each in the fr its or har%est7 (4) &redits for transportation$ pon the goods carried$ for the price of the contract and incidental e)penses$ ntil their deli%ery and for thirty days thereafter7 (16) &redits for lodging and s pplies s ally f rnished to tra%ellers by hotel keepers$ on the mo%ables belonging to the g est as long as s ch mo%ables are in the hotel$ b t not for money loaned to the g ests7 (11) &redits for seeds and e)penses for c lti%ation and har%est ad%anced to the debtor$ pon the fr its har%ested7 (12) &redits for rent for one year$ pon the personal property of the lessee e)isting on the immo%able leased and on the fr its of the same$ b t not on money or instr ments of credit7 (1') &laims in fa%or of the depositor if the depositary has wrongf lly sold the thing deposited$ pon the price of the sale. (n the foregoing cases$ if the mo%ables to which the lien or preference attaches ha%e been wrongf lly taken$ the creditor may demand them from any possessor$ within thirty days from the nlawf l sei# re. (1422a) Art. 22*2. 0ith reference to specific immo%able property and real rights of the debtor$ the following claims$ mortgages and liens shall be preferred$ and shall constit te an enc mbrance on the immo%able or real right; (1) Ta)es d e pon the land or b ilding7 (2) @or the npaid price of real property sold$ pon the immo%able sold7

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(') &laims of laborers$ masons$ mechanics and other workmen$ as well as of architects$ engineers and contractors$ engaged in the constr ction$ reconstr ction or repair of b ildings$ canals or other works$ pon said b ildings$ canals or other works7 (*) &laims of f rnishers of materials sed in the constr ction$ reconstr ction$ or repair of b ildings$ canals or other works$ pon said b ildings$ canals or other works7 (5) <ortgage credits recorded in the +egistry of 3roperty$ mortgaged7 pon the real estate

(6) 9)penses for the preser%ation or impro%ement of real property when the law a thori#es reimb rsement$ pon the immo%able preser%ed or impro%ed7 (-) &redits annotated in the +egistry of 3roperty$ in %irt e of a , dicial order$ by attachments or e)ec tions$ pon the property affected$ and only as to later credits7 (1) &laims of co/heirs for warranty in the partition of an immo%able among them$ pon the real property th s di%ided7 (4) &laims of donors or real property for pec niary charges or other conditions imposed pon the donee$ pon the immo%able donated7 (16) &redits of ins rers$ pon the property ins red$ for the ins rance premi m for two years. (142'a) Art. 22*'. The claims or credits en merated in the two preceding articles shall be considered as mortgages or pledges of real or personal property$ or liens within the p r%iew of legal pro%isions go%erning insol%ency. Ta)es mentioned in 5o. 1$ Article 22*1$ and 5o. 1$ Article 22*2$ shall first be satisfied. (n) Art. 22**. 0ith reference to other property$ real and personal$ of the debtor$ the following claims or credits shall be preferred in the order named; (1) 3roper f neral e)penses for the debtor$ or children nder his or her parental a thority who ha%e no property of their own$ when appro%ed by the co rt7 (2) &redits for ser%ices rendered the insol%ent by employees$ laborers$ or ho sehold helpers for one year preceding the commencement of the proceedings in insol%ency7 (') 9)penses d ring the last illness of the debtor or of his or her spo se and children nder his or her parental a thority$ if they ha%e no property of their own7 (*) &ompensation d e the laborers or their dependents nder laws pro%iding for indemnity for damages in cases of labor accident$ or illness res lting from the nat re of the employment7 (5) &redits and ad%ancements made to the debtor for s pport of himself or herself$ and family$ d ring the last year preceding the insol%ency7 (6) ? pport d ring the insol%ency proceedings$ and for three months thereafter7 (-) @ines and ci%il indemnification arising from a criminal offense7

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(1) Legal e)penses$ and e)penses inc rred in the administration of the insol%ent:s estate for the common interest of the creditors$ when properly a thori#ed and appro%ed by the co rt7 (4) Ta)es and assessments d e the national go%ernment$ other than those mentioned in Articles 22*1$ 5o. 1$ and 22*2$ 5o. 17 (16) Ta)es and assessments d e any pro%ince$ other than those referred to in Articles 22*1$ 5o. 1$ and 22*2$ 5o. 17 (11) Ta)es and assessments d e any city or m nicipality$ other than those indicated in Articles 22*1$ 5o. 1$ and 22*2$ 5o. 17 (12) Bamages for death or personal in, ries ca sed by a . asi/delict7 (1') "ifts d e to p blic and pri%ate instit tions of charity or beneficence7 (1*) &redits which$ witho t special pri%ilege$ appear in (a) a p blic instr ment7 or (b) in a final , dgment$ if they ha%e been the s b,ect of litigation. These credits shall ha%e preference among themsel%es in the order of priority of the dates of the instr ments and of the , dgments$ respecti%ely. (142*a) Art. 22*5. &redits of any other kind or class$ or by any other right or title not comprised in the fo r preceding articles$ shall en,oy no preference. (1425)

CHAPTER 3 ORDER OF PREFERENCE OF CREDITS

Art. 22*6. Those credits which en,oy preference with respect to specific mo%ables$ e)cl de all others to the e)tent of the %al e of the personal property to which the preference refers. Art. 22*-. (f there are two or more credits with respect to the same specific mo%able property$ they shall be satisfied pro rata$ after the payment of d ties$ ta)es and fees d e the ?tate or any s bdi%ision thereof. (1426a) Art. 22*1. Those credits which en,oy preference in relation to specific real property or real rights$ e)cl de all others to the e)tent of the %al e of the immo%able or real right to which the preference refers. Art. 22*4. (f there are two or more credits with respect to the same specific real property or real rights$ they shall be satisfied pro rata$ after the payment of the ta)es and assessments pon the immo%able property or real right. (142-a) Art. 2256. The e)cess$ if any$ after the payment of the credits which en,oy preference with respect to specific property$ real or personal$ shall be added to the free property which the debtor may ha%e$ for the payment of the other credits. (1421a) Art. 2251. Those credits which do not en,oy any preference with respect to specific property$ and those which en,oy preference$ as to the amo nt not paid$ shall be satisfied according to the following r les; (1) (n the order established in Article 22**7

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(2) &ommon credits referred to in Article 22*5 shall be paid pro rata regardless of dates. (1424a)

TRANSITIONAL PROVISIONS
Art. 2252. &hanges made and new pro%isions and r les laid down by this &ode which may pre, dice or impair %ested or ac. ired rights in accordance with the old legislation shall ha%e no retroacti%e effect. @or the determination of the applicable law in cases which are not specified elsewhere in this &ode$ the following articles shall be obser%ed; (3ars. 1 and 2$ Transitional 3ro%isions). Art. 225'. The &i%il &ode of 1114 and other pre%io s laws shall go%ern rights originating$ nder said laws$ from acts done or e%ents which took place nder their regime$ e%en tho gh this &ode may reg late them in a different manner$ or may not recogni#e them. A t if a right sho ld be declared for the first time in this &ode$ it shall be effecti%e at once$ e%en tho gh the act or e%ent which gi%es rise thereto may ha%e been done or may ha%e occ rred nder prior legislation$ pro%ided said new right does not pre, dice or impair any %ested or ac. ired right$ of the same origin. (+ le 1) Art. 225*. 5o %ested or ac. ired right can arise from acts or omissions which are against the law or which infringe pon the rights of others. (n) Art. 2255. The former laws shall reg late acts and contracts with a condition or period$ which were e)ec ted or entered into before the effecti%ity of this &ode$ e%en tho gh the condition or period may still be pending at the time this body of laws goes into effect. (n) Art. 2256. Acts and contracts nder the regime of the old laws$ if they are %alid in accordance therewith$ shall contin e to be f lly operati%e as pro%ided in the same$ with the limitations established in these r les. A t the re%ocation or modification of these acts and contracts after the beginning of the effecti%ity of this &ode$ shall be s b,ect to the pro%isions of this new body of laws. (+ le 2a) Art. 225-. 3ro%isions of this &ode which attach a ci%il sanction or penalty or a depri%ation of rights to acts or omissions which were not penali#ed by the former laws$ are not applicable to those who$ when said laws were in force$ may ha%e e)ec ted the act or inc rred in the omission forbidden or condemned by this &ode. (f the fa lt is also p nished by the pre%io s legislation$ the less se%ere sanction shall be applied. (f a contin o s or repeated act or omission was commenced before the beginning of the effecti%ity of this &ode$ and the same s bsists or is maintained or repeated after this body of laws has become operati%e$ the sanction or penalty prescribed in this &ode shall be applied$ e%en tho gh the pre%io s laws may not ha%e pro%ided any sanction or penalty therefor. (+ le 'a) Art. 2251. Actions and rights which came into being b t were not e)ercised before the effecti%ity of this &ode$ shall remain in f ll force in conformity with the old legislation7 b t their e)ercise$ d ration and the proced re to enforce them shall be reg lated by this &ode and by the + les of &o rt. (f the e)ercise of the right or of the action was commenced nder the old laws$ b t is pending on the date this &ode takes effect$ and the proced re was

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different from that established in this new body of laws$ the parties concerned may choose which method or co rse to p rs e. (+ le *) Art. 2254. The capacity of a married woman to e)ec te acts and contracts is go%erned by this &ode$ e%en if her marriage was celebrated nder the former laws. (n) Art. 2266. The %ol ntary recognition of a nat ral child shall take place according to this &ode$ e%en if the child was born before the effecti%ity of this body of laws. (n) Art. 2261. The e)emption prescribed in Article '62 shall also be applicable to any s pport$ pension or grat ity already e)isting or granted before this &ode becomes effecti%e. (n) Art. 2262. " ardians of the property of minors$ appointed by the co rts before this &ode goes into effect$ shall contin e to act as s ch$ notwithstanding the pro%isions of Article '26. (n) Art. 226'. +ights to the inheritance of a person who died$ with or witho t a will$ before the effecti%ity of this &ode$ shall be go%erned by the &i%il &ode of 1114$ by other pre%io s laws$ and by the + les of &o rt. The inheritance of those who$ with or witho t a will$ die after the beginning of the effecti%ity of this &ode$ shall be ad, dicated and distrib ted in accordance with this new body of laws and by the + les of &o rt7 b t the testamentary pro%isions shall be carried o t insofar as they may be permitted by this &ode. Therefore$ legitimes$ betterments$ legacies and be. ests shall be respected7 howe%er$ their amo nt shall be red ced if in no other manner can e%ery comp lsory heir be gi%en his f ll share according to this &ode. (+ le 12a) Art. 226*. The stat s and rights of nat ral children by legal fiction referred to in article 14 and illegitimate children mentioned in Article 21-$ shall also be ac. ired by children born before the effecti%ity of this &ode. (n) Art. 2265. The right of retention of real or personal property arising after this &ode becomes effecti%e$ incl des those things which came into the creditor:s possession before said date. (n) Art. 2266. The following shall ha%e not only prospecti%e b t also retroacti%e effect; (1) Article '15$ whereby a descendant cannot be compelled$ in a criminal case$ to testify against his parents and ascendants7 (2) Articles 161 and 11$ pro%iding against coll sion in cases of legal separation and ann lment of marriage7 (') Articles 21'$ 21*$ and 214$ concerning the proof of illegitimate filiation7 (*) Article 1'1$ a thori#ing the probate of a will on petition of the testator himself7 (5) Articles 1'54 to 1'64$ relati%e to the reformation of instr ments7 (6) Articles *-6 to *11$ reg lating actions to . iet title7 (-) Articles 2624 to 26'1$ which are designed to promote compromise. (n)

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Art. 226-. The following pro%isions shall apply not only to f t re cases b t also to those pending on the date this &ode becomes effecti%e; (1) Article 24$ +elati%e to criminal prosec tions wherein the acc sed is ac. itted on the gro nd that his g ilt has not been pro%ed beyond reasonable do bt7 (2) Article ''$ concerning cases of defamation$ fra d$ and physical in, ries. (n) Art. 2261. ? its between members of the same family which are pending at the time this &ode goes into effect shall be s spended$ nder s ch terms as the co rt may determine$ in order that compromise may be earnestly so ght$ or$ in case of legal separation proceedings$ for the p rpose of effecting$ if possible$ a reconciliation. (n) Art. 2264. The principles pon which the preceding transitional pro%isions are based shall$ by analogy$ be applied to cases not specifically reg lated by them. (+ le 1'a)

REPEALIN$ CLAUSE
Art. 22-6. The following laws and reg lations are hereby repealed; (1) Those parts and pro%isions of the &i%il &ode of 1114 which are in force on the date when this new &i%il &ode becomes effecti%e; (2) The pro%isions of the &ode of &ommerce go%erning sales$ partnership$ agency$ loan$ deposit and g aranty7 (') The pro%isions of the &ode of &i%il 3roced re on prescription as far as inconsistent with this &ode7 and (*) All laws$ Acts$ parts of Acts$ r les of co rt$ e)ec ti%e orders$ and administrati%e reg lations which are inconsistent with this &ode. (n)

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