OBLIGATIONS AND
CONTRACTS
An obl
i
gat
i
on i
sa j
ur
i
di
c
alr
el
at
i
on
(
bec.t
her
ear
e2par
t
i
es)wher
ebyaper
son
shoul
d engage orr
ef
r
ai
nf
r
om engagi
ng i
n
ac
er
t
ai
n ac
t
i
vi
t
yf
ort
hesat
i
sf
ac
t
i
on oft
he
pr
i
vat
ei
nt
er
est
sofanot
her
,whoi
nc
aseof
nonf
ul
fil
ment of suc
h dut
y may obt
ai
n
f
r
om t
he pat
r
i
mony oft
he f
or
mert
hr
ough
pr
oper j
udi
c
i
al pr
oc
eedi
ngs t
he ver
y
pr
es
t
at
i
on due or i
n def
aul
tt
her
eof
,t
he
ec
onomi
c equi
val
ent (
damages) t
hat i
t
r
epr
esent
s.(
Di
azPi
er
o.
)
Ti
t
l
eI
.-OBLI
GATI
ONS
CHAPTER 1.-GENERALPROVI
SI
ONS
Bal
ane: Obse
r
vat
i
on on t
het
i
t
l
eofBook
I
V,"
Obl
i
gat
i
ons and Cont
r
act
s.
" Book I
V
s
t
ar
t
s wi
t
h an i
naccur
acy
. I
t gi
ves t
he
i
mpr
essi
on t
hatobl
i
gat
i
ons and cont
r
act
s
ar
eoft
hesamest
at
us
,w/ct
heyar
enot
.A
cont
r
act i
s onl
y one of t
he sour
ces of
obl
i
gat
i
ons. Book I
V shoul
d hav
e been
si
mpl
yt
i
t
l
ed"
Obl
i
gat
i
ons.
"
Now,t
hi
si
sal
ong but compl
e
t
e
defini
t
i
on.
Char
act
er
i
s
t
i
csofanObl
i
g
at
i
on:
Et
ymol
ogy
.
- The wor
d obl
i
gat
i
on comes
f
r
om t
wo Lat
i
n wor
ds,l
i
gar
e,meani
ng "
t
o
bi
nd"and obw/ci
sapr
oposi
t
i
on used t
o
i
nt
ensi
f
ya v
er
b. Li
t
e
r
al
l
y obl
i
gar
e means
"
t
obi
ndsecur
el
y
.
"I
nt
hee
ar
l
yRomanl
aw,
t
he l
aw on obl
i
g
at
i
ons cont
ai
ned a l
i
t
e
r
al
me
ani
ng. I
t meant bei
ng "
bound i
n
c
hai
ns.
" The enf
or
cement ofcr
edi
t was
bar
bar
i
c. I
ft
he cr
edi
t
ori
s notpai
d,t
he
cr
edi
t
orhas t
he r
i
ghtt
o hav
et
he debt
or
pl
acedi
nc
hai
nsandsol
dt
osl
aver
yi
nt
he
mar
ke
tpl
ace f
ort
hr
e
e days. Pr
oceeds of
t
hesal
ewi
l
lbeusedt
opayt
hedebt
.I
ft
he
debt
ori
snotbought
,t
hedebt
orwi
l
lei
t
her
be c
hopped i
nt
o pi
eces and f
ed t
ot
he
fishesi
nt
her
i
v
erorsol
dt
osl
av
er
yacr
oss
t
heTi
be
r
.Li
t
t
l
ebyl
i
t
t
l
e,t
hese
ver
i
t
yoft
he
l
aw wasmi
t
i
gat
ed. I
n Ci
cer
o'
st
i
me,t
her
e
wasnomor
e"
bi
ndi
ngi
nc
hai
ns.
" Rat
he
r
,
obl
i
gat
i
on wasl
ookedupon as"
bi
ndi
ngi
n
l
aw.
"Thel
aw hasnow beenhumani
z
ed.
1. I
tr
epr
esent
s an e
xcl
usi
vel
y pr
i
vat
e
i
nt
e
r
e
st
2. I
t cr
eat
e
st
i
es t
hat ar
e by nat
ur
e
t
r
ansi
t
or
y
3. I
ti
nv
ol
ves t
he powe
rt
o make t
he
j
ur
i
di
cal t
i
e e
ffe
ct
i
ve i
n case of nonf
ul
fil
l
ment
t
hr
ough
an
e
conomi
c
equi
val
ent obt
ai
ned f
r
om t
he de
bt
or
'
s
pat
r
i
mony
.
Li
nes ofDev
el
opmenti
n Moder
n Law on
Obl
i
gat
i
ons
:
1. Pr
ogr
essi
ve spi
r
i
t
ual
i
zat
i
on oft
he l
aw
on obl
i
gat
i
ons.
- Thi
s means t
hat t
he
i
nt
entoft
hepar
t
i
esi
se
mphasi
z
ed r
at
her
t
han t
hef
or
m. Spi
r
i
t
ual
i
z
edmeans"
made
abs
t
r
act
.
" The emphasi
s now i
s on t
he
"
mee
t
i
ng oft
hemi
nds"oft
hepar
t
i
es. I
n
t
he Roman l
aw,obl
i
gat
i
ons
,par
t
i
cul
ar
l
y
,
cont
r
act
ual obl
i
gat
i
ons, r
e
qui
r
e
d s
t
r
i
ct
compl
i
ancew/f
or
mf
orv
al
i
di
t
y
.
Ar
t
. 1156. An obl
i
gat
i
on i
s a
j
ur
i
di
calne
cessi
t
yt
ogi
ve,t
o do ornott
o
do.
2.Thepr
i
nc
i
pl
eofaut
onomyofwi
l
li
snow
bei
ng si
gni
fic
ant
l
yr
es
t
r
i
c
t
ed ormodi
fied.
I
n Roman l
aw,t
he par
t
i
es can ent
eri
nt
o
any agr
ee
mentt
hatt
heywi
sh. Now,t
hey
can ent
e
ri
nt
oanyagr
eementpr
ovi
dedt
he
samei
snotcont
r
ar
yt
ol
aw,mor
al
s,good
Bal
ane: Defini
t
i
on.
- Ar
t
.1156gi
vesusa
si
mpl
e but i
ncompl
e
t
e defini
t
i
on. I
ti
s
i
ncompl
e
t
ebec.i
tl
ooksatobl
i
gat
i
on onl
y
f
r
om t
he poi
ntofvi
ew oft
he debt
or
. A
be
t
t
erdefini
t
i
onwoul
dbe,
1
cus
t
oms, publ
i
c or
de
r
,or publ
i
c pol
i
cy
.
The r
eason f
ort
hi
si
s Soci
alJust
i
ce and
some pol
i
cy consi
der
at
i
ons. I
thas been
obser
v
ed, howev
er
,t
hat t
hi
s wi
l
l gi
ve a
gr
e
at
e
rt
e
nde
ncy f
or t
he govtt
oi
nt
er
f
er
e
i
nt
opr
i
vat
eaffai
r
s.
3. Themi
t
i
gat
i
on oft
hepr
i
nc
i
pl
et
hatt
he
debt
ormus
tanswerwi
t
h al
lhi
s pr
oper
t
y
f
orhi
sobl
i
gat
i
on.
-I
nRomanl
aw,t
hi
swas
absol
ut
e. Now, not al
l pr
oper
t
y of t
he
debt
orc
an bel
evi
edupon f
ort
hepur
pose
ofsat
i
sf
yi
ngan obl
i
gat
i
on. Now,t
her
ear
e
some pr
oper
t
i
es (
i
nf
act
,t
he
r
e ar
e many)
w/car
eexempt
e
df
r
om at
t
achmentorl
evy
,
l
i
ket
hef
ami
l
yhome.
4. Weaki
ng oft
he pr
i
nc
i
pl
et
hatl
i
abi
l
i
t
y
r
esul
t
sf
r
om r
esponsi
bi
l
i
t
y.
- Thi
si
sbec.of
Soci
al Just
i
ce consi
der
at
i
ons. (
kul
ang
i
t
o.
.
.
.
)
5.
Tendenc
y of uni
t
y i
n moder
n
l
egi
sl
at
i
on.
- I
n t
he ASEAN r
egi
on, f
or
i
nst
ance,t
he
r
e ar
e mov
es t
os
t
andar
di
z
e
t
he r
ul
es on handl
i
ng goods, l
e
t
t
e
r
s of
cr
edi
t
,bank t
r
ansact
i
ons,e
t
c. Ther
ei
s
now t
he t
endency t
o make t
he
se r
ul
es
uni
f
or
m.Thi
si
sbec.t
r
adewi
l
lal
waysfind
aconv
eni
entway
.
On t
he fir
stt
wo el
ement
s: They
mustbede
t
er
mi
nat
eorde
t
er
mi
nabl
e. The
f
ol
l
owi
ngar
epossi
bl
ecombi
nat
i
ons:
a. Bot
h par
t
i
es ar
e de
t
er
mi
ned at
t
het
i
meoft
hee
xecut
i
onoft
heobl
i
gat
i
on.
b.An obl
i
gat
i
on wher
ei
n onepar
t
y
i
s de
t
er
mi
ned at t
he cons
t
i
t
ut
i
on oft
he
obl
i
gat
i
on and t
heot
he
rt
obede
t
er
mi
ned
subsequent
l
yi
n accor
dance w/ a cr
i
t
e
r
i
a
t
hati
spr
evi
ousl
yest
abl
i
shed.
c.Anobl
i
gat
i
on i
nw/ct
hesubj
ect
i
s de
t
e
r
mi
ned i
n accor
dance w/ hi
s
r
el
at
i
on t
oat
hi
ngand t
her
ef
ori
tc
hanges
wher
et
het
hi
ngpass
esf
r
om onepe
r
sont
o
anot
he
r
.
Thi
s i
s a pr
ope
r
t
yl
i
nked
obl
i
gat
i
on.
3.Obj
ec
toft
heobl
i
gat
i
on.
- Thi
sr
e
f
er
st
o
t
he conduct or act
i
vi
t
y t
hat mus
t be
obser
v
ed byt
hedebt
or
. Theobj
ectoft
he
obl
i
gat
i
oni
sal
waysanact
i
vi
t
yorconduct
,
t
hepr
es
t
at
i
on.
Requi
si
t
esofanobj
ect
:
a.I
tmus
tbel
i
ci
t
.
b.I
tmustbepossi
bl
e.
c. I
t mus
t be de
t
e
r
mi
nat
e or
de
t
er
mi
nabl
e.
d.I
tmus
thavepecuni
ar
yval
ueso
t
hati
fnotper
f
or
med i
ti
sc
onv
er
t
e
di
nt
o
damages.
Essent
i
alEl
ement
sofanObl
i
gat
i
on:
1. Ac
t
i
ve Subj
ec
t
.
- Thi
sr
ef
e
r
st
ot
he
cr
edi
t
orort
he obl
i
gee. St
r
i
ct
l
y speaki
ng
t
he t
wo ar
e not t
he same. A cr
edi
t
or
gener
al
l
y used i
n an obl
i
gat
i
on t
o gi
v
e
whi
l
e obl
i
gee i
s used i
n an obl
i
gat
i
on t
o
do.
2. Passi
ve Subj
ec
t
.
- Thi
sr
e
f
er
st
ot
he
debt
orort
heobl
i
gor
.I
fy
ou wantt
obea
ci
vi
l
i
s
t
,debt
ori
sused i
n an obl
i
gat
i
on t
o
gi
v
ewhi
l
eobl
i
gori
sused i
n an obl
i
gat
i
on
t
odo.
4. Vi
nc
ul
um j
ur
i
s(
l
egal t
i
e)
.
- Upon
def
aul
torr
ef
us
aloft
hedebt
ort
oper
f
or
m,
t
he cr
e
di
t
or can go t
o cour
t
. When a
per
son s
ays"
Ipr
omi
set
opayy
ou when I
l
i
ke t
o,
"t
her
ei
s no obl
i
g
at
i
on her
e bec.
t
her
ei
snovi
nc
ul
um j
ur
i
s
Al
lt
he
se fir
s
tt
hr
ee f
our el
ement
s ar
e
agr
e
edupon bycomment
at
or
sasessent
i
al
el
ement
s. The f
ol
l
owi
ng t
wo ar
e bei
ng
debat
e
d.
5.Causadebendi
/obl
i
gat
i
ones(
Cast
an)
.
Thi
s i
s what makes t
he obl
i
gat
i
on
demandabl
e. Thi
si
st
hepr
oxi
mat
ewhyof
anobl
i
gat
i
on.
6. For
m.
- Thi
si
sc
ont
r
ov
er
si
al
. Thi
si
s
accept
abl
e onl
y i
ff
or
m means some
mani
f
es
t
at
i
onoft
hei
nt
e
ntoft
hepar
t
i
es.
I
.Sour
cesofObl
i
gat
i
ons
Ar
t
.1157.Obl
i
gat
i
onsar
i
sef
r
om:
(
1)Law;
(
2)Cont
r
act
s;
(
3)Quasi
cont
r
act
s;
(
4)Act
s oromi
s
si
ons puni
shed by
l
aw;and
(
5)Quasi
del
i
ct
s
Bal
ane: Law asasour
ceofobl
i
gat
i
on.
-I
am under t
he i
mpr
essi
on t
hat al
l
obl
i
gat
i
onsar
eder
i
ved f
r
om l
aw. I
ti
smy
opi
ni
on t
hat t
her
ei
s an ov
er
l
ap i
nt
he
enumer
at
i
on bec.al
lobl
i
gat
i
onsar
i
sef
r
om
l
aw. So,whati
st
hei
dea ofenumer
at
i
ng
l
aw as onl
y one of t
he sour
ces of an
obl
i
gat
i
onasi
fi
ti
sonl
yoneoft
hem whe
n
t
he f
ourfind t
hei
rsour
ces i
nl
aw? I
si
t
t
r
ue t
hat l
aw i
s t
he onl
y sour
ce of
obl
i
gat
i
on? Yes and No. Ye
s,l
aw i
st
he
onl
ysour
ceofobl
i
gat
i
on i
fyou t
al
kofi
ti
n
t
heul
t
i
mat
esense. No,i
fyou ar
et
al
ki
ng
ofl
aw asapr
oxi
mat
esour
ce.I
nt
hi
scase,
t
her
ear
efives
our
cesofobl
gat
i
ons.Law i
s
bot
ht
heul
t
i
mat
eand apr
oxi
mat
esour
ce
ofobl
i
gat
i
ons
.
Sour
ces of Obl
i
gat
i
ons accor
di
ng t
o
Sanc
hezRoman.
- Accor
di
ng t
o Sanchez
Roman, t
her
e ar
e onl
y 2 sour
ces of
obl
i
gat
i
ons: Law andAc
t
s. Thel
at
t
e
rar
e
f
ur
t
he
rcl
assi
fied,asf
ol
l
ows: (
1) l
i
ci
tact
s
cr
eat
e
d by concur
r
e
nce of wi
l
l
s
(
cont
r
act
s)
;(
2) l
i
ci
tact
sei
t
herv
ol
unt
ar
y
or i
nv
ol
unt
ar
y w/o concur
r
ence ofwi
l
l
s
(
quasi
c
ont
r
act
)
;(
3) i
l
l
i
ci
t act
s of c
i
v
i
l
c
har
act
e
r w/c ar
e not puni
shabl
e,
v
ol
unt
ar
y or i
nv
ol
unt
ar
y(
t
or
t
s and al
l
damagesar
i
si
ngf
r
om del
ay)
;(
4)i
l
l
i
ci
tact
s
w/car
ev
ol
unt
ar
y and ar
epuni
shabl
e by
l
aw (
cr
i
mes.
)
SAGRADA ORDEN VS.NACOCO [
91 P
503] - I
fde
f
.
appel
l
ant(
NaCoCo)i
sl
i
abl
e
atal
l
,i
t
sobl
i
gat
i
onsmus
tar
i
sef
r
om any
oft
he 4 sour
ces ofobl
i
g
at
i
ons,namel
y
,
l
aw,cont
r
actorquasicont
r
act
,cr
i
me,or
negl
i
gence. (
Ar
t
. 1089, OCC.
) Def
.
appel
l
anti
snotgui
l
t
yofanyoffenseatal
l
,
bec. i
t ent
e
r
e
d i
nt
o t
he pr
emi
ses and
occupi
edi
tw/t
heper
mi
ssi
onoft
heent
i
t
y
w/ch had t
he l
egalcont
r
oland admi
n.
t
her
eof
,t
he Al
i
en Pr
op. Admi
n. (
APA)
Nei
t
her was t
her
e any negl
i
genc
e on i
t
s
par
t
.Ther
ewasal
sonopr
i
vi
t
y(
ofcont
r
act
or obl
i
gat
i
on)be
t
.t
he APA and Tai
wan
Tekkosho,w/chadsecur
edt
hepossessi
on
oft
hepr
op.f
r
om t
hepl
t
ffappel
l
eebyt
he
use ofdur
ess,s
uch t
hatt
he Al
i
en Pr
op.
Cus
t
odi
an ori
t
sper
mi
t
t
e
e(
def
.
appel
l
ant
)
maybehel
dr
esponsi
bl
ef
ort
hes
upposed
i
l
l
egal
i
t
y oft
heoccupat
i
on oft
hepr
op.by
sai
d Tekkosho. TheAPA had t
he cont
r
ol
and admi
n.oft
hepr
op.notassuccessor
t
ot
hei
nt
er
e
st
soft
heenemyhol
deroft
he
t
i
t
l
e, t
he T. Tekkosho, but by expr
e
ss
pr
ovi
si
on ofl
aw. Nei
t
heri
si
tat
r
us
t
eeof
t
hef
or
merowne
r
,t
hepl
t
ffappel
l
eeher
ei
n,
buta t
r
us
t
e
e oft
he US Govt
,i
ni
t
s own
r
i
ght
,t
ot
heexcl
usi
on of
,and agai
ns
tt
he
cl
ai
m ort
i
t
l
eof
,t
heene
my owner
. Fr
om
Aug. 1946, when def
.
appel
l
ant t
ook
possessi
on,t
ot
hedat
eoft
hej
udgmenton
2/28/48,t
heAPAhadt
heabsol
ut
econt
r
ol
oft
hepr
op.ast
r
us
t
eeoft
heUS Govt
,w/
powert
odi
sposeofi
tbysal
eorot
he
r
wi
se,
as t
hough i
t we
r
et
he absol
ut
e owne
r
.
Ther
ef
or
e
,e
ven i
fdef
.we
r
el
i
abl
et
ot
he
APA f
orr
ent
al
s
,t
hesewoul
d notaccr
uet
o
t
hebenefitoft
hepl
t
ff.
,t
heol
downer
,but
t
het
heUSGovt
.
Bal
ane: I
st
heenumer
at
i
on i
n Ar
t
.1157
e
xcl
usi
veormer
el
yi
l
l
ust
r
at
i
ve? Thesense
t
hatt
hecaseofSagr
ada Or
den t
e
l
l
susi
s
t
hat t
he enumer
at
i
o i
s excl
usi
v
e. I
n
r
esol
vi
ng t
he i
ssue of whe
t
he
rt
he def
.
shoul
d be l
i
abl
et
o pay r
ent
al
s,t
he SC
usedt
hepr
ocessofexcl
usi
on.Fort
her
et
o
be an obl
i
g
at
i
on t
o pay r
e
nt
al
s, t
hat
obl
i
gat
i
onmus
tar
i
s
ef
r
om ei
t
heroft
hefiv
e
(
5)sour
ces ofobl
i
gat
i
ons
.I
fi
tdoes not
,
t
hen t
her
ei
s no obl
i
gat
i
on. The cl
ear
i
mpl
i
c
at
i
on oft
hi
sr
ul
i
ngi
st
hat
,t
hesefive
(
5)ar
et
heonl
ys
our
cesofobl
i
gat
i
ons.
Thepr
obl
em w/Ar
t
.1157i
st
hati
t
mi
ght not cov
er al
l si
t
uat
i
ons. For
e
xampl
e: Car
al
e uses Dov
e as hi
ss
oap.
He t
hen hear
s an adv
er
t
i
sement f
r
om
Pr
oct
or& Gambl
et
hati
ti
soffer
i
ngani
ce
t
umbl
er f
or t
hose who can col
l
ect 30
wr
apper
sofTi
debef
or
eFe
b.29,1996.So,
Car
al
es
t
opped usi
ng Dove and st
ar
t
ed
usi
ngTi
de.Hewasabl
et
oconsumeal
l30
wr
apper
son Feb.29,1996. Het
he
n went
t
oPr
oct
or& Gambl
e(
P & G)t
oe
xchange
t
he30Ti
dewr
apper
sf
orat
umbl
er
.ButP
&Gt
ol
d Car
al
et
hatt
hei
rt
umbl
er
sr
un
out ofs
t
oc
k. Car
al
e cont
r
act
ed a ski
n
al
l
er
gyasar
e
sul
tofus
i
ngTi
dei
nt
aki
nga
bat
h. Theques
t
i
on i
s: DoesP & G hav
e
anyobl
i
gat
i
on t
oCar
al
e.I
fwel
ookatAr
t
.
1157,t
hi
ssi
t
uat
i
on doesnotf
al
li
nanyof
t
he fiv
e sour
ces. So,we know hav
ea
pr
obl
e
m. The Ger
man Ci
vi
lCode (
BGB)
cov
er
st
hi
ssi
t
uat
i
on.TheBGB hasasi
xt
h
sour
ce ofobl
i
gat
i
on,t
he Ausl
obung,w/c
meansa uni
l
at
e
r
aloffer
. Ar
t
.657 oft
he
BGB pr
ovi
des:
Ar
t
. 657. Bi
ndi
ng pr
omi
se. A
per
sonwho,bypubl
i
cnot
i
ce,announcesa
r
e
war
df
or t
he per
f
or
manc
e ofan act
,i
n
par
t
i
cul
arf
ort
hepr
oduct
i
on ofar
esul
t
,i
s
bound t
opayar
e
war
dt
oanyper
son who
hasper
f
or
med t
he act
,ev
en i
fhedi
d not
actwi
t
havi
e
wt
ot
her
e
war
d.
Not
e
:
We now have a DTI
r
egul
at
i
on c
ov
er
i
ngt
hi
ss
i
t
uat
i
on. Thi
si
s
an admi
ni
s
t
r
at
i
ve r
egul
at
i
on w/c has t
he
f
or
ceofl
aw. Buti
twoul
dhav
ebeenbe
t
t
er
t
o hav
e pl
aced t
hi
sr
ul
ei
n al
aw r
at
her
t
hani
namer
eadmi
ni
s
t
r
at
i
ver
egul
at
i
on.
Ar
t
i
cl
es 1158 -1162 speci
f
yt
he gene
r
al
pr
i
nci
pl
es r
egar
di
ng t
he sour
ces of
obl
i
gat
i
onenumer
at
edi
nAr
t
.1157.
Ar
t
. 1158. Obl
i
gat
i
ons der
i
v
ed
f
r
om l
aw ar
e not pr
esumed.Onl
yt
hose
e
xpr
essl
y de
t
er
mi
ned i
nt
hi
s Code or i
n
speci
all
awsar
edemandabl
e,and s
hal
lbe
r
egul
at
e
dbyt
hepr
ecept
soft
hel
aw whi
ch
es
t
abl
i
s
hed t
hem;and ast
owhathasnot
been f
or
eseen,by t
he pr
ovi
si
ons oft
hi
s
Book.
Ar
t
.1159.Obl
i
gat
i
onsar
i
si
ngf
r
om
cont
r
act
shavet
hef
or
c
eofl
aw be
t
weent
he
cont
r
act
i
ng par
t
i
es and shoul
d be
compl
i
edwi
t
hi
ngoodf
ai
t
h.
Bal
ane: The
r
ear
et
wopar
t
si
n Ar
t
.1159.
The fir
stpar
ti
st
hatobl
i
gat
i
ons de
r
i
ved
f
r
om cont
r
acthast
hef
or
ceofl
aw be
t
.t
he
cont
r
act
i
ngpar
t
i
es(
j
usc
i
vi
l
i
.
) Thes
econd
par
ti
st
hatt
her
e mus
tbe compl
i
ance i
n
goodf
ai
t
h(
j
usgent
i
um.
)
PEOPLE'
S
CAR
VS. COMMANDO
SECURI
TY [
51SCRA 40]- Pl
t
ff.(
Peopl
e'
s
Car
)wasi
nl
aw l
i
abl
et
oi
t
scus
t
omer
sf
or
t
he damages caused t
he cus
t
omer
'
s car
,
w/c had been ent
r
us
t
ed i
nt
oi
t
s cus
t
ody
.
Pl
t
ff. t
he
r
e
f
or
e was i
n l
aw j
us
t
i
fied i
n
maki
nggood s
uc
h damagesandr
e
l
yi
ngi
n
t
ur
nondef
.
(
CommandoSecur
i
t
y)t
ohonor
i
t
s cont
r
act and i
ndemni
f
yi
tf
or suc
h
undi
sput
e
d damages, w/c had been
caused di
r
ect
l
y by t
he unl
awf
ul and
wr
ongf
ulact
s ofdef
.
'
s secur
i
t
y guar
di
n
br
eac
hoft
hei
rcont
r
ac
t
.
Ar
t
.1160.Obl
i
gat
i
onsder
i
v
edf
r
om
quasi
cont
r
act
s shal
l be subj
e
ct t
ot
he
pr
ovi
si
onsofChapt
e
r1,Ti
t
l
eXVI
I
Ioft
hi
s
Book.
Ar
t
.1161.Ci
vi
lobl
i
gat
i
ons ar
i
si
ng
f
r
om cr
i
mi
naloffenses s
hal
lbe gover
ne
d
byt
hepenall
aws,subj
ectt
ot
hepr
ovi
si
ons
of ar
t
i
cl
e 2177, and of t
he per
t
i
nent
pr
ovi
si
onsofChapt
er2,Pr
el
i
mi
nar
y Ti
t
l
e,
on Human Rel
at
i
ons,and ofTi
t
l
eXVI
I
Iof
t
hi
sBook,r
e
gul
at
i
ngdamages.
Ar
t
.
2177.
Respons
i
bi
l
i
t
yf
or f
aul
t or
negl
i
gence
under
t
he
pr
ecedi
ng ar
t
i
cl
ei
s ent
i
r
el
y
separ
at
e and di
s
t
i
nct f
r
om
t
he ci
vi
l l
i
abi
l
i
t
y ar
i
si
ng
f
r
om negl
i
genc
e unde
rt
he
Pe
nalCode.Butt
hepl
ai
nt
i
ff
cannot r
ecov
er damages
t
wi
ce f
or t
he same act or
omi
ssi
onoft
hedef
endant
.
Ar
t
.1162.Obl
i
gat
i
onsder
i
v
edf
r
om
quasi
del
i
c
t
s shal
l be gov
er
ned by t
he
pr
ovi
si
onsofChapt
e
r2,Ti
t
l
e XVI
Ioft
hi
s
Book,andbyspeci
all
aws
.
Bal
ane: The Code Commi
ssi
on di
d not
c
hooset
ouset
or
t
. Thi
si
sbec.t
or
tdoes
not exact
l
y hav
et
he s
ame meani
ng as
quasi
del
i
c
t
. Tor
tcover
si
nt
ent
i
onalt
or
t
s
w/c i
n quasi
del
i
cti
s consi
der
e
d as ci
vi
l
l
i
abi
l
i
t
y ar
i
si
ng f
r
om ac
t
s or omi
ssi
ons
puni
shabl
ebyl
aw. The
r
ear
esomequasi
del
i
ct
sw/car
enotc
over
ed byt
or
t
. Dean
Bocobo sugges
t
ed t
he anci
e
ntt
e
r
m c
ul
pa
aqui
l
i
ana. But t
hi
s di
d not mer
i
tt
he
appr
ovaloft
heCodeCommi
ssi
on.
Quest
i
on: I
ft
her
ei
s a cont
r
actbe
t
.t
he
par
t
i
es, can t
her
e be a quasi
del
i
ct
commi
t
t
e
d by one agai
ns
t t
he ot
her
r
egar
di
ngt
hear
eacover
edbyt
hecont
r
act
.
I
fy
ou l
ook at Ar
t
. 2176, y
ou ge
tt
he
i
mpr
essi
on t
hati
ft
her
ei
sa cont
r
ac
tbe
t
.
t
hepar
t
i
es,t
hepar
t
i
escannotbel
i
abl
ef
or
quasi
del
i
c
t on an ar
e
a cover
ed by t
he
cont
r
act
. The case ofCangco has not
r
eal
l
yr
esol
v
et
hi
scont
r
over
sy
.
CANGCO VS.MANI
LA RAI
LROAD CO. [
38
P768]- Bal
ane:Ther
ear
et
woi
mpor
t
ant
pr
i
nci
pl
est
hatwel
ear
nf
r
om t
hi
scase:(
1)
Thedi
ffer
e
ncei
nconceptbe
t
.c
ont
r
actand
quasi
del
i
c
ti
st
hati
nacont
r
act
,t
he
r
ei
sa
pr
eexi
s
t
i
ng j
ur
i
di
calt
i
e be
t
.t
he par
t
i
es.
Vi
ol
at
i
on of t
he cont
r
act gi
ves r
i
se t
o
l
i
abi
l
i
t
y but not t
o t
he j
ur
i
di
c
al t
i
e.
Jur
i
di
calt
i
ei
snotbor
nebyavi
ol
at
i
on.I
n
quasi
del
i
c
t
,i
ti
spr
eci
sel
yt
hewr
ongf
ulact
w/cgi
vesr
i
set
ot
hej
ur
i
di
calt
i
e. Li
abi
l
i
t
y
andj
ur
i
di
calt
i
ear
esi
mul
t
aneous.
(
2) Cont
r
act
s and quasi
del
i
ct
s
cr
eat
et
wo conc
ent
r
i
c ci
r
cl
es w/ quasi
del
i
ctast
hebi
ggerci
r
cl
e.
[
Not
e
: Ther
ei
sal
i
t
t
l
emi
st
akei
n Cangco.
The SC sai
dt
hatt
he dr
i
v
ercan be sued
undercul
pa cont
r
act
ual
. Thi
si
s wr
ong.
The dr
i
verc
annotbe sued as he has no
pr
i
vi
t
yofcont
r
actw/t
hepassenger
.
]
So,t
heques
t
i
onnow i
s:I
si
tpossi
bl
et
hat
e
ven i
ft
he
r
ei
sacont
r
actbe
t
.t
hepar
t
i
es,
a quasi
del
i
ct can s
t
i
l
lbe commi
t
t
e
d by
one agai
ns
tt
he ot
her r
egar
di
ng t
he ar
ea
cov
er
e
dbyt
hecont
r
act
? Yes,accor
di
ngt
o
t
he case ofAr
ane
t
av
.de Joya,57 SCRA
59. The same act can gi
ve r
i
se t
o
obl
i
gat
i
onsar
i
si
ngf
r
om di
ffer
entsour
ces.
Forexampl
e,Al
i
neai
st
heownerof
abusco.
,t
heAl
i
ne
a BusCo.
,Mol
i
nai
sa
dr
i
v
erofone oft
he bus
es ofAl
i
ne
a Bus
Co. Lagdameo r
odet
hebusbe
i
ng dr
i
v
en
by Mol
i
na. As a r
esul
t oft
he r
ec
kl
ess
dr
i
vi
ng of Mol
i
na, Lagdameo suffer
ed
i
nj
ur
i
es. I
nt
hi
sc
ase,Lagdameo has a
c
hoi
ce- he can sue on ei
t
hercont
r
act
,
quasi
del
i
c
toron cr
i
me. I
fhedeci
ded t
o
sue on t
he br
eac
h of t
he cont
r
act of
car
r
i
age, al
l he has t
o pr
ove i
s t
he
(
exi
st
e
nceoft
hecont
r
act
)and t
hati
twas
notper
f
or
med.I
nt
hi
scase,hecansuet
he
common car
r
i
erbutnott
hedr
i
verbec.he
hasnocont
r
actw/t
hedr
i
ver
.
I
fhe sues on quasi
del
i
ct
,he can
sue bot
h t
he common car
r
i
er and t
he
dr
i
v
er
. Thedef
enseoft
hedr
i
verwoul
dbe
di
l
i
gence i
n dr
i
vi
ng (
or f
or
t
ui
t
ous ev
ent
.
)
Thedef
enseoft
hec
ommon c
ar
r
i
erwoul
d
be di
l
i
gence i
n t
he sel
ect
i
on and
super
vi
si
onofe
mpl
oyees.
I
fhe sues undercr
i
me,he has t
o
sue t
he dr
i
ver
. I
n case t
he dr
i
ver i
s
convi
ct
ed and has been sent
enced t
o pay
ci
vi
ll
i
abi
l
i
t
y
,t
heempl
oy
er(
Al
i
neaBusCo.
)
i
s subsi
di
ar
i
l
y l
i
abl
e
.
I
f Mol
i
na i
s
i
nsol
v
ent
,Al
i
neaBusCo.wi
l
lpay
.
whom hedesi
gnat
esorper
mi
t
st
or
un i
t
,
wher
et
hecari
soccupi
ed andbei
ngused
att
het
i
meoft
hei
nj
ur
yf
ort
hepl
easur
eof
ot
hermember
soft
heowner
'
sf
ami
l
yt
han
t
hec
hi
l
ddr
i
vi
ngi
t
.
Not
i
ce t
hatt
he choi
ce ofcause of
act
i
on wi
l
lde
t
e
r
mi
ne t
hr
ee t
hi
ngs: t
he
t
heor
y oft
he pl
ai
nt
i
ff,t
he def
ense oft
he
def
.andt
heques
t
i
onofwhom t
osue
.
Ar
t
. 2175. Any per
son who i
s
cons
t
r
ai
ned t
o pay t
he t
axes ofanot
he
r
shal
lbe ent
i
t
l
ed t
or
ei
mbur
sement f
r
om
t
hel
at
t
e
r
.
Agai
n,r
emembert
hati
nt
hi
scase,
t
hevi
c
t
i
m hasac
hoi
ce. Pr
ovi
ded t
hathe
i
sconsi
s
t
e
ntw/ hi
st
heor
y and pr
ovi
ded,
f
ur
t
he
r
,t
hathe cannot r
ecov
er damages
t
wi
cef
ort
hesamei
nj
ur
y
.
Not
e
: The
r
ei
ss
t
i
l
labr
e
wi
ng cont
r
over
s
y
amongci
vi
l
i
s
t
sw/ r
egar
dt
ot
hi
squest
i
on.
Thi
si
sonl
ymyopi
ni
on.
GUTI
ERREZVS.GUTI
ERREZ [
56P177]One G,a passenger i
n at
r
uck,r
e
cov
er
s
damagesi
nt
heamountofP5,
000f
r
om t
he
ownerofa pv
t
.aut
omobi
l
enoti
nt
hec
ar
,
t
he mac
hi
ne bei
ng oper
at
e
d by a son 18
yr
s.ofage
,w/ot
he
rmember
soft
hef
ami
l
y
accomadat
ed t
her
e
i
n, and f
r
om t
he
c
hauffeur and owner of t
he t
r
uc
k w/c
col
l
i
ded w/ t
he pv
t
. aut
omobi
l
e on a
br
i
dge,causi
ngphysi
cali
nj
ur
i
est
oG asa
r
esul
toft
heaut
omobi
l
eacci
dent
.
Thehead ofahouse,t
heownerof
an aut
omobi
l
e,who mai
nt
ai
ns i
tf
or t
he
gener
aluse ofhi
sf
ami
l
y
,i
sl
i
abl
ef
ori
t
s
negl
i
gentoper
at
i
on byoneofhi
sc
hi
l
dr
en,
A.Quasi
Cont
r
ac
t
s
Ar
t
. 2142.
Cer
t
ai
n l
awf
ul
,
v
ol
unt
ar
y and uni
l
at
er
alact
s gi
v
er
i
se t
o
t
he j
ur
i
di
calr
el
at
i
on ofquasi
cont
r
actt
o
t
he end t
hat no one shal
l be unj
us
t
l
y
enr
i
c
hed or benefit
e
d at t
he expense of
anot
he
r
.
Ar
t
.22.Ev
er
yper
son whot
hr
ough
an actofper
f
or
mance by anot
he
r
,orany
ot
her means, acqui
r
es or comes i
nt
o
possessi
on ofsome
t
hi
ngatt
heexpens
eof
t
he l
at
t
er wi
t
hout j
ust or l
egal gr
ound
shal
lr
e
t
ur
nt
hesamet
ohi
m.
Ar
t
.23.Ev
enwhen anactore
vent
causi
ngdamaget
oanot
her
'
spr
oper
t
ywas
notdue t
ot
he f
aul
torne
gl
i
gence oft
he
def
endant
,t
he l
at
t
e
r shal
l be l
i
abl
ef
or
i
ndemni
t
yi
ft
hr
ough t
he actorev
enthe
wasbene
fit
t
e
d.
1.Benefit
sConf
er
r
edVol
unt
ar
i
l
y
(
a)Pr
eser
vat
i
onofPr
oper
t
yorBusi
ness
(
1)Negot
i
or
um Ges
t
i
o
Ar
t
. 2144. Whoever vol
unt
ar
i
l
y
t
ake
sc
har
g
eoft
heagencyormanagement
of t
he busi
ness or pr
oper
t
y of anot
he
r
,
wi
t
hout any powe
rf
r
om t
he l
at
t
e
r
,i
s
obl
i
ged t
o cont
i
nue t
he same unt
i
lt
he
t
e
r
mi
nat
i
on oft
heaffai
rand i
t
si
nc
i
dent
s,
or t
or
equi
r
et
he per
son concer
ne
d t
o
subs
t
i
t
ut
e hi
m, i
ft
he owner i
s i
n a
posi
t
i
on t
o do so.Thi
sj
ur
i
di
calr
el
at
i
on
doesnotar
i
sei
ne
i
t
heroft
hesei
ns
t
anc
es:
(
1)When t
hepr
oper
t
yorbusi
ness
i
snotnegl
ect
edorabandoned;
(
2)I
fi
nf
actt
hemanagerhasbeen
t
aci
t
l
yaut
hor
i
z
edbyt
heowner
;
I
nt
he fir
s
tcase,t
he pr
ovi
si
ons of
ar
t
i
cl
es 1317, 1403, No. 1, and 1404
r
egar
di
ng unat
hor
i
z
ed cont
r
act
s s
hal
l
gover
n.
I
nt
he second case,t
he r
ul
es on
agency i
n Ti
t
l
e X oft
hi
s Book shal
lbe
appl
i
cabl
e.
Ar
t
.1317. No one
maycont
r
acti
nt
henameof
anot
he
r wi
t
hout bei
ng
aut
hor
i
z
ed by t
he l
at
t
e
r
,or
unl
esshehasbyl
aw ar
i
ght
t
or
epr
esenthi
m.
A cont
r
act ent
e
r
ed
i
nt
oi
nt
henameofanot
he
r
by one who has no
aut
hor
i
t
y
or
l
egal
r
epr
esent
at
i
on,or who has
act
e
d beyond hi
s power
s
,
shal
l be unenf
or
ceabl
e,
unl
ess i
t i
s r
at
i
fied,
e
xpr
essl
y or i
mpl
i
edl
y
, by
t
heper
son on whosebehal
f
i
thasbeen e
xecut
ed,bef
or
e
i
ti
sr
ev
oked by t
he ot
he
r
cont
r
act
i
ngpar
t
y
.
Ar
t
. 1403.
The
f
ol
l
owi
ng cont
r
act
s ar
e
unenf
or
ceabl
e, unl
ess t
hey
ar
er
at
i
fied:
(
1) Those ent
e
r
ed
i
nt
oi
nt
henameofanot
he
r
per
sonbyonewhohasbeen
gi
v
en no aut
hor
i
t
y or l
egal
r
epr
esent
at
i
on,or who has
act
e
dbe
y
ondhi
spowe
r
s;
Ar
t
.
1404.
Unaut
hor
i
z
ed cont
r
act
s ar
e
gover
ned by ar
t
i
cl
e 1317
andt
hepr
i
nci
pl
esofagency
i
nTi
t
l
eX oft
hi
sBook.
Ar
t
.2145. The offici
ous manager
shal
l per
f
or
m hi
s dut
i
es wi
t
h al
lt
he
di
l
i
genceofa good f
at
he
rofa f
ami
l
y
,and
pay t
hedamages whi
ch t
hr
ough hi
sf
aul
t
orne
gl
i
gencemaybesuffer
edbyt
heowner
of t
he pr
oper
t
y or busi
ness under
management
.
The cour
t
s may
,howe
ve
r
,i
ncr
e
ase
or moder
at
et
he i
nde
mni
t
y accor
di
ng t
o
t
heci
r
cums
t
ancesofeac
hcase.
Ar
t
.2146. I
ft
heoffici
ousmanager
del
egat
est
oanot
herpe
r
son al
lors
omeof
hi
sdut
i
es,heshal
lbel
i
abl
ef
ort
heact
sof
t
he del
egat
e
, wi
t
hout pr
ej
udi
ce t
o t
he
di
r
ectobl
i
gat
i
on oft
he l
at
t
e
rt
owar
dt
he
owneroft
hebusi
ness.
The r
espons
i
bi
l
i
t
y oft
wo or mor
e
offic
i
ous manage
r
s shal
l be sol
i
dar
y
,
unl
ess t
he managementwas assumed t
o
savet
het
hi
ngorbusi
nessf
r
om i
mmi
ne
nt
danger
.
Ar
t
.2147. The offici
ous manager
shal
lbel
i
abl
ef
oranyf
or
t
ui
t
ouse
v
ent
:
(
1) I
f he under
t
akes r
i
sky
oper
at
i
ons whi
c
h t
he owner was not
accus
t
omedt
oe
mbar
kupon;
(
2) I
f he has pr
ef
er
r
ed hi
s own
i
nt
e
r
e
stt
ot
hatoft
heowner
;
(
3)I
fhef
ai
l
st
or
e
t
ur
nt
hepr
oper
t
y
orbusi
nessaf
t
e
rde
mandbyt
heowne
r
;
(
4)I
fheassumed t
hemanagement
i
nbadf
ai
t
h.
Ar
t
. 2148.
Except when t
he
management was assumed t
o sav
et
he
pr
oper
t
y or busi
ne
ss f
r
om i
mmi
ne
nt
danger
,t
he offici
ous manager shal
l be
l
i
abl
ef
orf
or
t
ui
t
ousev
ent
s:
(
1)I
fhei
smani
f
es
t
l
yunfitt
ocar
r
y
ont
hemanagement
;
(
2) I
f by hi
s i
nt
er
vent
i
on he
pr
e
vent
ed a mor
e compe
t
entper
s
on f
r
om
t
aki
ngupt
hemanagement
.
Ar
t
.2149. The r
at
i
ficat
i
on oft
he
managementbyt
heowneroft
hebusi
ness
pr
oducest
hee
ffect
sofan e
xpr
e
ssagency
,
e
ven i
ft
he busi
ness may nothav
e been
successf
ul
.
Ar
t
.2150.Al
t
hough t
he offici
ous
managementmaynothavebeen e
xpr
essl
y
r
at
i
fied, t
he owne
r of t
he pr
oper
t
y or
busi
nesswhoenj
oyst
headvant
agesoft
he
same shal
l be l
i
abl
e f
or obl
i
gat
i
ons
i
ncur
r
ed i
n hi
s i
nt
e
r
e
st
, and shal
l
r
ei
mbur
se t
he offici
ous manager f
or t
he
necessar
yandusef
ulexpensesandf
ort
he
damages whi
c
h t
he l
at
t
er may have
suffer
e
di
nt
heper
f
or
manceofhi
sdut
i
es.
The same obl
i
gat
i
on s
hal
l be
i
ncumbent upon hi
m
when t
he
management had f
or i
t
s pur
pose t
he
pr
e
vent
i
on ofan i
mmi
nent and mani
f
es
t
l
oss,al
t
hough no benefitmay have been
der
i
ved.
Ar
t
.2151. Ev
en t
hough t
heowner
di
d notder
i
v
e any bene
fitand t
he
r
e has
been noi
mmi
nentand mani
f
es
tdangert
o
t
he pr
oper
t
y or busi
ness, t
he owner i
s
l
i
abl
e asundert
he fir
stpar
agr
aph oft
he
pr
ecedi
ngar
t
i
cl
e,pr
ovi
ded:
(
1)Theoffici
ousmanagerhasact
ed
i
ngoodf
ai
t
h;
(
2) The pr
oper
t
y or busi
ness i
s
i
nt
act
,r
eadyt
ober
e
t
ur
nedt
ot
heowne
r
.
Ar
t
.2152. The offici
ous manager
i
sper
sonal
l
yl
i
abl
ef
orc
ont
r
ac
t
swhi
c
h he
has ent
e
r
ed i
nt
o wi
t
ht
hi
r
d per
sons
,e
ven
t
hough heact
e
di
nt
henameoft
heowner
and t
hi
r
d per
sons.Thesepr
ovi
s
i
onsshal
l
notappl
y:
(
1)I
ft
he owne
r has expr
essl
y or
t
aci
t
l
yr
at
i
fiedt
hemanag
ement
,or
(
2) When t
he cont
r
act r
ef
er
st
o
t
hi
ngs per
t
ai
ni
ng t
ot
he owner of t
he
busi
ness.
Ar
t
. 2153. The management i
s
e
xt
i
ngui
shed:
(
1)Whe
nt
heowne
rr
e
pudi
at
esi
tor
put
sanendt
he
r
e
t
o;
(
2) When t
he offici
ous manager
wi
t
hdr
aws f
r
om t
he managementsubj
ect
t
ot
hepr
ovi
si
onsofar
t
i
cl
e2144;
Ar
t
.2144. Whoe
ver
v
ol
unt
ar
i
l
yt
akes char
ge of
t
he agency or management
oft
he busi
ness orpr
oper
t
y
of anot
her
, wi
t
hout any
power f
r
om t
he l
at
t
e
r
,i
s
obl
i
ged t
o c
ont
i
nue t
he
same unt
i
lt
he t
er
mi
nat
i
on
of t
he affai
r and i
t
s
i
nci
dent
s,ort
or
equi
r
et
he
per
son
concer
ne
d
t
o
subs
t
i
t
ut
ehi
m,i
ft
heowner
i
si
naposi
t
i
ont
odoso.xxx
(
3)By t
hedeat
h,ci
vi
li
nt
er
di
ct
i
on,
i
nsani
t
y ori
nsol
v
encyoft
heownerort
he
offic
i
ousmanager
.
(
2)Fi
nderofLos
tPr
oper
t
y
Ar
t
. 2171.
The r
i
ght
s and
obl
i
gat
i
ons oft
he finder ofl
os
tper
sonal
pr
oper
t
ys
hal
lbegov
er
ned byar
t
i
cl
es719
and720.
Ar
t
. 719. Whoe
ver
finds a mov
abl
e, whi
c
hi
s
nott
r
easur
e,mus
tr
e
t
ur
ni
t
t
oi
t
s pr
e
vi
ous possessor
.I
f
t
he l
at
t
e
ri
s unknown,t
he
finder shal
l i
mmedi
at
e
l
y
deposi
ti
twi
t
ht
hemayorof
t
he ci
t
y or muni
ci
pal
i
t
y
wher
et
hefindi
nghast
aken
pl
ace.
The findi
ng s
hal
lbe
publ
i
cl
y announced by t
he
may
or f
or t
wo consecut
i
ve
weeksi
nt
hewayhedeems
bes
t
.
I
f t
he
movabl
e
cannot be kept wi
t
hout
de
t
er
i
or
at
i
on,orwi
t
houtt
he
e
xpens
es
whi
ch
consi
der
abl
y di
mi
ni
sh i
t
s
v
al
ue, i
t shal
l be sol
d at
publ
i
c auct
i
on ei
ght days
af
t
e
rt
hepubl
i
cat
i
on.
Si
x mont
hsf
r
om t
he
publ
i
cat
i
on havi
ng el
apsed
wi
t
hout t
he owner havi
ng
appear
ed,t
he t
hi
ng f
ound,
or i
t
s val
ue, shal
l be
awar
ded t
ot
he finder
.The
finder and t
he owne
r shal
l
beobl
i
ged,ast
hec
asemay
be, t
o r
ei
mbur
se t
he
e
xpens
es.
Ar
t
. 720. I
ft
he
owner shoul
d appear i
n
t
i
me,heshal
lbeobl
i
g
ed t
o
pay
, as a r
ewar
d t
o t
he
finder
,one
t
ent
hoft
hesum
oroft
he pr
i
ce oft
he t
hi
ng
f
ound.
Ar
t
. 2172. The r
i
ght of ev
er
y
possessori
n good f
ai
t
ht
or
ei
mbur
sement
f
or necessar
y and usef
ul e
xpenses i
s
gover
nedbyar
t
i
cl
e546.
Ar
t
.546. Necessar
y
e
xpens
es shal
lbe r
e
f
unded
t
oe
ver
ypossessor
;butonl
y
t
he possessori
n good f
ai
t
h
may r
e
t
ai
nt
he t
hi
ng unt
i
l
he has been r
ei
mbur
sed
t
her
ef
or
.
Usef
ul
expenses
shal
l be r
ef
unded onl
yt
o
t
he possessori
n good f
ai
t
h
wi
t
ht
hes
amer
i
ghtofr
e
t
ent
i
on, t
he per
son who has
def
eat
ed hi
m
i
n
t
he
possessi
on
havi
ng t
he
opt
i
on of r
e
f
undi
ng t
he
amountoft
he expenses or
of payi
ng t
he i
ncr
ease i
n
v
al
ue whi
c
ht
he t
hi
ng may
hav
e acqui
r
e
d by r
eason
t
her
eof
.
(
b)Payment
sbyThi
r
dPer
sons
Ar
t
.2173. Whe
n at
hi
r
d per
son,
wi
t
houtt
heknowl
edgeoft
hedebt
or
,pays
t
he debt
,t
he r
i
ght
s of t
he f
or
mer ar
e
gover
nedbyar
t
i
cl
es1236and1237.
Ar
t
. 1236. The cr
edi
t
or i
s not
bound t
o acceptpaymentorper
f
or
mance
by a t
hi
r
d per
s
on who has no i
nt
e
r
es
ti
n
t
he f
ul
fil
l
ment of t
he obl
i
gat
i
on, unl
ess
t
her
ei
sas
t
i
pul
at
i
ont
ot
hecont
r
ar
y
.
Whoe
ver pays f
or anot
her may
demandf
r
om t
hedebt
orwhathehaspai
d,
e
xcept t
hat i
f he pai
d wi
t
hout t
he
knowl
edgeoragai
nstt
hewi
l
loft
hede
bt
or
,
hecanr
e
coveronl
yi
nsof
arast
hepayment
hasbeenbenefici
alt
ot
hedebt
or
.
Ar
t
.1237. Whoev
erpayson behal
f
oft
he debt
or wi
t
hout t
he knowl
edge or
agai
nstt
hewi
l
loft
hel
at
t
e
r
,cannotcompel
t
hec
r
edi
t
ort
osubr
ogat
ehi
mi
n hi
sr
i
ght
s
suc
h as t
hose ar
i
si
ng f
r
om a mor
t
gage,
guar
ant
y
,orpenal
t
y
.
2.Benefit
sI
nvol
unt
ar
i
l
yConf
er
r
ed
(
a)Sol
ut
i
oI
ndebi
t
i
Ar
t
. 2154. I
f some
t
hi
ng was
r
ecei
v
edwhen t
he
r
ei
snor
i
ghtt
ode
mand
i
t
,and i
t was undul
y del
i
ver
ed t
hr
ough
mi
st
ake,t
heobl
i
gat
i
ont
or
e
t
ur
ni
tar
i
ses.
Ar
t
.2155. Paymentbyr
eason ofa
mi
st
akei
nt
hec
onst
r
uct
i
on orappl
i
cat
i
on
ofa doubt
f
ulordi
fficul
tques
t
i
on ofl
aw
may come wi
t
hi
n t
he scope of t
he
pr
ecedi
ngar
t
i
cl
e.
Ar
t
. 2156. I
ft
he payer was i
n
doubtwhe
t
he
rt
he debtwasdue
,hemay
r
ecov
eri
fhepr
ov
est
hati
twasnotdue.
Ar
t
.2157.Ther
esponsi
bi
l
i
t
yoft
wo
or mor
e payees, when t
her
e has been
paymentofwhati
snotdue,i
ssol
i
dar
y
.
Ar
t
. 2158. When t
he pr
oper
t
y
del
i
ver
ed ormoneypai
dbel
ongst
oat
hi
r
d
per
son,t
he pay
ee shal
lcompl
y wi
t
ht
he
pr
ovi
si
onsofar
t
i
cl
e1984.
Ar
t
. 1984.
The
deposi
t
ar
y cannot demand
t
hatt
hedeposi
t
orpr
ovehi
s
owner
shi
p of t
he t
hi
ng
deposi
t
ed.
Nev
er
t
hel
ess,shoul
d
he di
scover t
hat t
he t
hi
ng
hasbeens
t
ol
enandwhoi
t
s
t
r
ue owner i
s, he must
advi
se t
he l
at
t
e
r of t
he
deposi
t
.
I
ft
heowne
r
,i
n spi
t
e
of suc
h i
nf
or
mat
i
on, does
not cl
ai
m i
t wi
t
hi
n t
he
per
i
od of one mont
h, t
he
deposi
t
ar
y shal
lbe r
el
i
eved
of al
l r
e
sponsi
bi
l
i
t
y by
r
e
t
ur
ni
ng
t
he
t
hi
ng
deposi
t
edt
ot
hedeposi
t
or
.
I
ft
hede
posi
t
ar
yhas
r
easonabl
e gr
ounds t
o
bel
i
eve t
hat t
he t
hi
ng has
not been l
awf
ul
l
y acqui
r
e
d
byt
hede
posi
t
or
,t
hef
or
me
r
mayr
e
t
ur
nt
hesame.
Ar
t
.2159. Whoev
er i
n bad f
ai
t
h
accept
san unduepayment
,shal
lpayl
egal
i
nt
e
r
e
sti
fa sum ofmone
yi
si
nv
ol
v
ed,or
shal
lbel
i
abl
ef
orf
r
ui
t
sr
ec
ei
v
ed orwhi
c
h
shoul
d hav
e been r
ecei
v
ed i
ft
he t
hi
ng
pr
oducesf
r
ui
t
s.
Hes
hal
lf
ur
t
her
mor
ebeans
wer
abl
e
f
or any l
oss or i
mpai
r
ment oft
he t
hi
ng
f
r
om any cause,and f
ordamages t
ot
he
per
son whodel
i
ver
e
dt
het
hi
ng,unt
i
li
ti
s
r
ecov
er
e
d.
Ar
t
.2160. He who i
n good f
ai
t
h
accept
sanunduepaymentoft
hi
ngcer
t
ai
n
and de
t
e
r
mi
nat
eshal
lonl
yber
esponsi
bl
e
f
ort
hei
mpai
r
mentorl
ossoft
hes
ameor
i
t
s accessor
i
es and accessi
ons i
nsof
aras
he has t
her
e
by been be
nefit
e
d.I
fhe has
al
i
enat
ed i
t
,he shal
lr
e
t
ur
nt
he pr
i
ce or
assi
gnt
heact
i
ont
oc
ol
l
ectt
hesum.
Ar
t
. 2161.
As r
egar
ds t
he
r
ei
mbur
sement f
or i
mpr
ov
ement
s and
e
xpens
es i
ncur
r
ed by hi
m who undul
y
r
ecei
v
edt
het
hi
ng,t
hepr
ovi
si
onsofTi
t
l
eV
ofBookI
Is
hal
lgover
n.
Ar
t
.2162.Heshal
lbee
xemptf
r
om
t
heobl
i
gat
i
on t
or
es
t
or
ewho,bel
i
e
vi
ng i
n
good f
ai
t
h t
hat t
he payment was bei
ng
madeofal
egi
t
i
mat
eandsubsi
s
t
i
ngcl
ai
m,
des
t
r
oyed t
he document
,or al
l
owed t
he
act
i
on t
opr
escr
i
be,orgav
eupt
hepl
edges,
orcanc
el
l
ed t
he guar
ant
i
es f
orhi
sr
i
ght
.
He who pai
d undul
y may pr
oceed onl
y
agai
nstt
het
r
uedebt
orort
heguar
ant
or
s
wi
t
hr
e
gar
dt
o whom t
he act
i
on i
ss
t
i
l
l
effect
i
v
e.
Ar
t
. 2163. I
ti
s pr
esumed t
hat
t
her
e was a mi
st
ake i
n t
he payment i
f
some
t
hi
ng whi
c
h had ne
ver be
en due or
had al
r
e
ady been pai
d was del
i
ver
ed;but
he f
r
om whom t
he r
e
t
ur
ni
s cl
ai
med may
pr
ov
et
hatt
he del
i
ver
y was made outof
l
i
ber
al
i
t
yorf
oranyot
herj
us
tcause.
(
1)Di
s
t
i
ngui
shedf
r
om Nat
ur
alObl
i
gat
i
ons
Ar
t
.1423. Obl
i
gat
i
onsar
eci
vi
lor
nat
ur
al
.Ci
vi
lobl
i
g
at
i
ons gi
ve a r
i
ght of
act
i
on t
o compel t
hei
r per
f
or
manc
e.
Nat
ur
alobl
i
gat
i
ons, not bei
ng based on
posi
t
i
v
el
aw buton e
qui
t
yandnat
ur
all
aw,
do notgr
anta r
i
ghtofact
i
on t
o enf
or
ce
t
hei
r per
f
or
mance, but af
t
er v
ol
unt
ar
y
f
ul
fil
l
ment by t
he obl
i
gor
,t
hey aut
hor
i
z
e
t
her
e
t
ent
i
onofwhathasbeen del
i
v
er
e
dor
r
ender
e
d byr
eason t
her
eof
.Some nat
ur
al
obl
i
gat
i
ons ar
e se
tf
or
t
hi
nt
he f
ol
l
owi
ng
ar
t
i
cl
es.
Ar
t
. 1424. When a r
i
ght t
o sue
upon a ci
vi
l obl
i
gat
i
on has l
apsed by
e
xt
i
nct
i
v
e pr
esc
r
i
pt
i
on, t
he obl
i
gor who
v
ol
unt
ar
i
l
y per
f
or
ms t
he c
ont
r
actcannot
r
ecov
erwhathehasdel
i
v
er
e
d ort
hev
al
ue
oft
heser
vi
cehehasr
e
nde
r
ed.
Ar
t
. 1425. When wi
t
hout t
he
knowl
edgeoragai
nstt
hewi
l
loft
hede
bt
or
,
at
hi
r
d per
son pays a debt whi
c
h t
he
obl
i
gori
snotl
eg
al
l
yboundt
opaybecause
t
heact
i
on t
her
eon haspr
escr
i
bed,butt
he
debt
or l
at
e
r vol
unt
ar
i
l
y r
ei
mbur
ses t
he
t
hi
r
d per
s
on,t
he obl
i
gor cannot r
ecover
whathehaspai
d.
Ar
t
.1428.When,af
t
eran act
i
on t
o
enf
or
ce a ci
vi
lobl
i
gat
i
on has f
ai
l
ed,t
he
def
endant v
ol
unt
ar
i
l
y pe
r
f
or
ms t
he
obl
i
gat
i
on,hecannotdemandt
her
e
t
ur
nof
whathe has del
i
v
er
ed ort
he paymentof
t
hev
al
ueoft
hes
er
v
i
c
ehehasr
ende
r
e
d.
Ar
t
. 1429. When a t
es
t
at
e or
i
nt
es
t
at
ehei
rv
ol
unt
ar
i
l
ypaysadebtoft
he
decedent exceedi
ng t
he v
al
ue of t
he
pr
oper
t
y whi
ch he r
ecei
ved by wi
l
lor by
t
hel
aw ofi
nt
es
t
acyf
r
om t
hees
t
at
eoft
he
deceased,t
hepaymenti
sval
i
dandcannot
ber
esci
ndedbyt
hepaye
r
.
Ar
t
.1430. When awi
l
li
sde
cl
ar
ed
v
oi
d because i
thas notbeen exe
cut
e
di
n
accor
dancewi
t
ht
hef
or
mal
i
t
i
esr
e
qui
r
edby
l
aw,butoneoft
hei
nt
es
t
at
ehei
r
s,af
t
ert
he
se
t
t
l
ementoft
he de
bt
s oft
he deceased,
paysa l
egacyi
n compl
i
ancewi
t
h ac
l
ause
i
n t
he def
ec
t
i
ve wi
l
l
,t
he payment i
s
effect
i
v
eandi
r
r
ev
ocabl
e.
Ar
t
.1960. I
ft
he bor
r
owe
r pays
i
nt
e
r
e
st when t
her
e has been no
s
t
i
pul
at
i
on t
her
ef
or
,t
hepr
ovi
s
i
onsoft
hi
s
Code concer
ni
ng sol
ut
i
o i
ndebi
t
i
, or
nat
ur
alobl
i
gat
i
ons,shal
lbe appl
i
ed,as
t
hecasemaybe
.
Ar
t
.1956. Noi
nt
e
r
e
stshal
lbedue
unl
essi
thasbe
en e
xpr
essl
ys
t
i
pul
at
ed i
n
wr
i
t
i
ng.
(
b)Per
f
or
manceofObl
i
gat
i
onsi
mposed by
l
aw i
nt
hei
nt
e
r
estoft
hepubl
i
c
(
1)Suppor
t
Ar
t
. 2164. When, wi
t
hout t
he
knowl
edge oft
he per
son obl
i
ged t
o gi
ve
suppor
t
,i
ti
sgi
v
enbyast
r
ange
r
,t
hel
at
t
e
r
shal
lhavea r
i
ghtt
o cl
ai
m t
hesamef
r
om
t
hef
or
mer
,unl
essi
tappear
st
hathegave
i
toutofpi
e
t
yand wi
t
houti
nt
entofbei
ng
r
epai
d.
suppor
tt
ot
heneedyi
ndi
vi
dual
,wi
t
hr
i
ght
ofr
ei
mbur
sementf
r
om t
hepe
r
son obl
i
ged
t
o gi
v
e suppor
t
.Thi
s Ar
t
i
cl
e shal
lappl
y
par
t
i
cul
ar
l
ywhent
hef
at
herormot
he
rofa
c
hi
l
d under t
he age ofmaj
or
i
t
y unj
us
t
l
y
r
ef
use
st
os
uppor
torf
ai
l
st
ogi
v
es
uppor
t
t
ot
hechi
l
dwhenur
gent
l
yneeded.(
I
d.
)
(
3)Funer
ale
xpenses
Ar
t
.2165. When f
une
r
alexpenses
ar
ebor
ne by a t
hi
r
d per
s
on,wi
t
houtt
he
knowl
edge of t
hose r
e
l
at
i
v
es who we
r
e
obl
i
ged t
o gi
ve suppor
tt
ot
he deceased,
sai
dr
e
l
at
i
ves shal
lr
e
i
mbur
se t
he t
hi
r
d
per
son, shoul
d t
he l
at
t
er cl
ai
m
r
ei
mbur
sement
.
Ar
t
. 2166. When t
he pe
r
son
obl
i
gedt
osuppor
tanor
phan,orani
nsane
orot
heri
ndi
gentper
son unj
ust
l
yr
ef
uses
t
o gi
v
e suppor
tt
ot
he l
at
t
e
r
, any t
hi
r
d
per
son mayf
ur
ni
sh suppor
tt
ot
heneedy
i
ndi
vi
dual
, wi
t
h r
i
ght of r
ei
mbur
sement
f
r
om t
he per
son obl
i
ged t
o gi
ve s
uppor
t
.
The pr
ovi
si
ons oft
hi
s ar
t
i
cl
e appl
y when
t
he f
at
her or mot
her of a chi
l
d under
ei
ght
een y
ear
s ofage unj
ust
l
yr
ef
us
es t
o
suppor
thi
m.
Ar
t
.2165. When f
une
r
alexpenses
ar
ebor
ne by a t
hi
r
d per
s
on,wi
t
houtt
he
knowl
edge of t
hose r
e
l
at
i
v
es who we
r
e
obl
i
ged t
o gi
ve suppor
tt
ot
he deceased,
sai
dr
e
l
at
i
ves shal
lr
e
i
mbur
se t
he t
hi
r
d
per
son, shoul
d t
he l
at
t
er cl
ai
m
r
ei
mbur
sement
.
(
4)Heal
t
horsaf
e
t
yr
e
gul
at
i
onr
epr
oper
t
y
Ar
t
.2169. Whe
nt
hegover
nment
,
upon t
he f
ai
l
ur
e ofany per
son t
o compl
y
wi
t
h heal
t
h or s
af
e
t
y r
egul
at
i
ons
concer
ni
ng pr
oper
t
y
,under
t
ake
st
odot
he
necessar
ywor
k,e
v
enoverhi
sobj
ect
i
on,he
shal
lbel
i
abl
et
opayt
heexpenses.
(
5) Const
r
ai
nt of l
i
f
e or pr
oper
t
y on
occasi
onofandacci
dentorcal
ami
t
y
(
2)Unj
us
tr
ef
usalt
o suppor
tan or
phan,
i
nsaneorot
heri
ndi
gent
Ar
t
. 206. When, wi
t
hout t
he
knowl
edge oft
he per
son obl
i
ged t
o gi
ve
suppor
t
,i
ti
sgi
v
enbyast
r
ange
r
,t
hel
at
t
e
r
shal
lhavea r
i
ghtt
o cl
ai
m t
hesamef
r
om
t
hef
or
mer
,unl
essi
tappear
st
hathegave
i
twi
t
houti
nt
e
nt
i
on ofbei
ng r
ei
mbur
sed.
(
Fami
l
yCode.
)
Ar
t
.207. When t
heper
son obl
i
ged
t
ot
o suppor
tanot
herunj
ust
l
yr
ef
uses or
f
ai
l
st
ogi
v
esuppor
twhen ur
gent
l
yneeded
byt
hel
at
t
e
r
,anyt
hi
r
dper
son mayf
ur
ni
sh
Ar
t
. 2167. Whe
n t
hr
ough an
acci
dentorot
hercauseaper
soni
si
nj
ur
ed
orbecomess
er
i
ousl
yi
l
l
,and hei
st
r
eat
e
d
orhel
pedwhi
l
ehei
snoti
n acondi
t
i
on t
o
gi
v
e consent t
o a cont
r
ac
t
,he shal
lbe
l
i
abl
e t
o pay f
or t
he ser
vi
ces of t
he
physi
ci
an or ot
he
r pe
r
son ai
di
ng hi
m,
unl
esst
heser
vi
ceshasbeen r
e
nde
r
edout
ofpur
eg
ener
osi
t
y
.
Ar
t
. 2168. When dur
i
ng a fir
e,
flood,s
t
or
m,orot
he
rcal
ami
t
y
,pr
oper
t
yi
s
saved f
r
om dest
r
uct
i
on byanot
herper
son
wi
t
houtt
he knowl
edge oft
he owne
r
,t
he
l
at
t
er i
s bound t
o pay t
he f
or
mer j
ust
compensat
i
on.
Ar
t
. 2174. Whe
n i
n a smal
l
communi
t
yamaj
or
i
t
yoft
hei
nhabi
t
ant
sof
agedeci
de upon a measur
ef
orpr
ot
e
ct
i
on
agai
nst l
awl
essness,fir
e,flood,s
t
or
m or
ot
hercal
ami
t
y
,anyonewhoobj
ect
st
ot
he
pl
an and r
ef
uses t
o cont
r
i
but
et
ot
he
e
xpens
es buti
s benefit
t
e
d by t
he pr
oj
ect
ase
xecut
eds
hal
lbel
i
abl
et
opayhi
sshar
e
ofsai
dexpenses.
Ar
t
.2170. When by acci
dent or
ot
herf
or
t
ui
t
ouse
v
ent
,mov
abl
e
ssepar
at
el
y
per
t
ai
ni
ng t
ot
wo or mor
e per
sons ar
e
commi
ngl
ed orconf
used,t
her
ul
eson coowner
shi
pshal
lbeappl
i
cabl
e.
B.Quasi
del
i
ct
s
Ar
t
. 2176. Whoever by act or
omi
ssi
on c
ausesdamaget
oanot
her
,t
her
e
bei
ngf
aul
tornegl
i
gence,i
sobl
i
gedt
opay
f
or t
he damage done. Such f
aul
t or
negl
i
gence, i
ft
he
r
e i
s no pr
e
exi
st
i
ng
cont
r
act
ualr
el
at
i
on be
t
weent
hepar
t
i
es,i
s
cal
l
edaquasi
del
i
c
tandi
sgover
nedbyt
he
pr
ovi
si
onsoft
hi
sChapt
e
r
.
Ar
t
.2177. Responsi
bi
l
i
t
yf
orf
aul
t
ornegl
i
gence undert
he pr
ecedi
ng ar
t
i
cl
e
i
s ent
i
r
el
y separ
at
e and di
st
i
nctf
r
om t
he
ci
vi
ll
i
abi
l
i
t
yar
i
si
ngf
r
om negl
i
genceunder
t
he PenalCode.Butt
he pl
ai
nt
i
ff cannot
r
ecov
erdamagest
wi
cef
ort
hes
ameactor
omi
ssi
onoft
hedef
endant
.
Ar
t
.2180. Theobl
i
gat
i
on i
mposed
byar
t
i
cl
e2176i
sdemandabl
enotonl
yf
or
one'
s own act
soromi
ssi
ons,butal
so f
or
t
hose of per
sons f
or whom one i
s
r
esponsi
bl
e.
Thef
at
herand,i
ncaseofhi
sde
at
h
ori
ncapaci
t
y
,t
he mot
he
r
,ar
er
esponsi
bl
e
f
or t
he damages caused by t
he mi
nor
c
hi
l
dr
enwhol
i
vei
nt
hei
rcompany
.
Guar
di
ans ar
el
i
abl
ef
or damages
caused by t
he mi
nor
s or i
ncapaci
t
at
ed
per
sonswhoar
eundert
hei
raut
hor
i
t
yand
l
i
vei
nt
hei
rcompany
.
The owner
s and manage
r
s ofan
es
t
abl
i
s
hment or ent
e
r
pr
i
s
e ar
el
i
kewi
se
r
esponsi
bl
ef
or damages caused by t
hei
r
empl
oyee
si
nt
heser
vi
ceoft
hebr
anc
hesi
n
whi
c
ht
he l
at
t
e
r ar
ee
mpl
oyed or on t
he
occasi
onoft
hei
rf
unct
i
ons.
Empl
oy
er
s shal
lbe l
i
abl
ef
or t
he
damages caused by t
hei
r empl
oyees and
househol
dhel
per
sact
i
ngwi
t
hi
nt
hescope
oft
hei
rassi
gne
dt
asks,e
ven t
hough t
he
f
or
merar
enotengag
ed i
n anybusi
nessor
i
ndus
t
r
y
.
The St
at
ei
sr
e
sponsi
bl
ei
n l
i
ke
manner when i
t act
st
hr
ough a speci
al
agent
;butnotwhen t
hedamagehasbe
en
caused by t
he offici
alt
o whom t
he t
ask
donepr
oper
l
yper
t
ai
ns,i
nwhi
c
hcasewhat
i
s pr
ovi
ded i
n ar
t
i
cl
e 2176 shal
l be
appl
i
cabl
e.
Last
l
y
, t
e
acher
s or heads of
es
t
abl
i
s
hment
sofar
t
sand t
r
adesshal
lbe
l
i
abl
ef
ordamages caus
ed by t
hei
rpupi
l
s
and st
udent
s or appr
ent
i
ces,so l
ong as
t
heyr
emai
ni
nt
hei
rcus
t
ody
.
Ther
esponsi
bi
l
i
t
yt
r
eat
e
dofi
nt
hi
s
ar
t
i
cl
e shal
l cease when t
he per
sons
her
ei
nment
i
onedpr
ov
et
hatt
he
yobse
r
ved
al
lt
hedi
l
i
genc
eofagoodf
at
herofaf
ami
l
y
t
opr
ev
entdamage.
Ar
t
.2182. I
ft
he mi
norori
ns
ane
per
son c
ausi
ngdamagehasnopar
ent
sor
guar
di
an,t
hemi
norori
ns
aneper
sonshal
l
beanswer
abl
ewi
t
hhi
sownpr
oper
t
yi
nan
act
i
on agai
ns
thi
m whe
r
e a guar
di
an ad
l
i
t
e
m shal
lbeappoi
nt
ed.
Ar
t
.2194.Ther
esponsi
bi
l
i
t
yoft
wo
ormor
eper
sons who ar
el
i
abl
ef
orquasi
del
i
cti
ssol
i
dar
y
.
Ar
t
.1728.The cont
r
act
ori
sl
i
abl
e
f
or al
lt
he cl
ai
ms ofl
abor
e
r
s and ot
her
s
empl
oyed byhi
m,and oft
hi
r
dper
sonsf
or
deat
h or physi
cal i
nj
ur
i
es dur
i
ng t
he
cons
t
r
uct
i
on.
Ar
t
.1763. A common car
r
i
er i
s
r
esponsi
bl
e f
or i
nj
ur
i
es suffer
e
d by a
passengeron acc
ountoft
hewi
l
f
ulact
sor
negl
i
gence of ot
her passenger
s or of
s
t
r
anger
s
, i
f t
he c
ommon car
r
i
er
'
s
empl
oyee
s t
hr
ough t
he e
xer
ci
s
e of t
he
di
l
i
genceofagoodf
at
herofaf
ami
l
ycoul
d
hav
e pr
e
vent
ed or s
t
opped t
he act or
omi
ssi
on.
Ar
t
. 218.
The s
chool
, i
t
s
admi
ni
s
t
r
at
or
s and t
eac
he
r
s, or t
he
i
ndi
vi
dual
,ent
i
t
y or i
ns
t
i
t
ut
i
ons engaged
i
nc
hi
l
d car
e shal
lhav
e speci
alpar
ent
al
aut
hor
i
t
yandr
es
ponsi
bi
l
i
t
yovert
hemi
nor
c
hi
l
d whi
l
e under t
hei
r s
uper
v
i
si
on,
i
nst
r
uct
i
onorcus
t
ody
.
Aut
hor
i
t
y and r
esponsi
bi
l
i
t
y shal
l
appl
yt
o al
laut
hor
i
z
ed act
i
vi
t
i
es whe
t
he
r
i
nsi
de or out
si
de t
he pr
emi
s
es of t
he
sc
hoolent
i
t
yori
nst
i
t
ut
i
on.(
Fami
l
yCode.
)
e
xe
r
c
i
sed t
he pr
oper di
l
i
gence r
equi
r
ed
undert
hepar
t
i
cul
arci
r
cums
t
ances.
Al
lot
hercasesnotcov
er
ed byt
hi
s
and t
he pr
ec
edi
ng ar
t
i
cl
es shal
l be
gover
ned by t
he pr
ovi
si
ons of t
he Ci
vi
l
Codeonquasi
del
i
ct
s.(
I
d.
)
C.Law
Ar
t
. 1158. Obl
i
gat
i
ons der
i
v
ed
f
r
om l
aw ar
e not pr
esumed.Onl
yt
hose
e
xpr
essl
y de
t
er
mi
ned i
nt
hi
s Code or i
n
speci
all
awsar
edemandabl
e,and s
hal
lbe
r
egul
at
e
dbyt
hepr
ecept
soft
hel
aw whi
ch
es
t
abl
i
s
hest
hem;and ast
owhathasnot
been f
or
eseen,by t
he pr
ovi
si
ons oft
hi
s
Book.
Ar
t
.294. The cl
ai
m f
or suppor
t
,
when pr
operand t
wo ormor
eper
sonsar
e
obl
i
ged t
o gi
v
ei
t
,shal
lbe made i
nt
he
f
ol
l
owi
ngor
der
:
(
1)Fr
om t
hes
pouse;
(
2) Fr
om t
he descendant
s of t
he
near
es
tdegr
e
e;
(
3)Fr
om t
he ascendant
s
, al
so of
t
henear
es
tdegr
ee;
(
4)Fr
om t
hebr
ot
he
r
sandsi
st
e
r
s
.
Among
descendant
s
and
ascendant
st
he or
de
ri
n whi
c
ht
hey ar
e
cal
l
ed t
ot
he i
nt
e
st
at
e successi
on oft
he
per
son who has a r
i
ghtt
o cl
ai
m suppor
t
shal
lbeobser
ved.
Under t
he NCC, f
ol
l
ow t
he or
de
r of
i
nt
es
t
at
esuccessi
on
Ar
t
.219.Thosegi
vent
heaut
hor
i
t
y
and r
e
sponsi
bi
l
i
t
y under t
he pr
ecedi
ng
Ar
t
i
cl
e shal
lbe pr
i
nci
pal
l
y and sol
i
dar
i
l
y
l
i
abl
ef
ordamages c
aused by t
he act
s or
omi
ssi
ons of t
he unemanci
pat
ed mi
nor
.
The par
e
nt
s
,j
udi
ci
al guar
di
ans or t
he
per
sonsexe
r
c
i
si
ng par
ent
alaut
hor
i
t
yover
sai
dmi
norshal
lbesubsi
di
ar
i
l
yl
i
abl
e.
The r
espect
i
v
el
i
abi
l
i
t
i
es of t
hose
r
ef
er
r
ed t
oi
n t
he pr
ecedi
ng par
agr
aph
shal
lnot appl
yi
fi
ti
s pr
ov
ed t
hatt
hey
Ar
t
.199. Whenever t
wo or mor
e
per
sonsar
eobl
i
gedt
ogi
v
esuppor
t
,
t
hel
i
abi
l
i
t
y shal
lde
v
ol
veupon t
he
f
ol
l
owi
ng per
sons i
n t
he or
der
her
ei
npr
ovi
ded:
(
1)Thespouse;
(
2)Thedescendant
si
nt
henear
e
st
degr
ee;
(
3)The ascendant
si
nt
he near
e
st
degr
ee;
(
4) The br
ot
her
s and si
s
t
er
s
.
(
Fami
l
yCode.
)
Ar
t
.448.Theowneroft
hel
andon
whi
c
h anyt
hi
ng has be
en bui
l
t
,s
own,or
pl
ant
ed i
n good f
ai
t
h,shal
lhavet
her
i
ght
t
o appr
opr
i
at
e as hi
s own t
he wor
ks,
sowi
ng or pl
ant
i
ng,af
t
e
rpaymentoft
he
i
ndemi
ni
t
ypr
ovi
dedf
ori
nar
t
i
cl
e
s546and
548,or t
o obl
i
ge t
he one who bui
l
t or
pl
ant
ed t
o pay t
he pr
i
c
e oft
hel
and,and
t
he one who sowed, t
he pr
oper r
ent
.
Howev
er
,t
hebui
l
derorpl
ant
ercannotbe
obl
i
ged t
o buy t
he l
and i
fi
t
sv
al
ue i
s
consi
der
abl
y mor
e t
han t
hat of t
he
bui
l
di
ng ort
r
ees.I
n such case,he shal
l
pay r
e
asonabl
er
ent
,i
ft
he owner oft
he
l
and does notc
hoose t
o appr
opr
i
at
et
he
bui
l
di
ng or t
r
ees af
t
er pr
oper i
ndemni
t
y
.
Thepar
t
i
ess
hal
lagr
eeupon t
het
e
r
msof
t
hel
easeandi
n caseofdi
sagr
eement
,t
he
cour
tshal
lfixt
het
e
r
mst
her
eof
.
Ar
t
.546. Necessar
y
e
xpens
es shal
lbe r
e
f
unded
t
oe
ver
ypossessor
;butonl
y
t
he possessori
n good f
ai
t
h
may r
e
t
ai
nt
he t
hi
ng unt
i
l
he has been r
ei
mbur
sed
t
her
ef
or
.
Usef
ul
expenses
shal
l be r
ef
unded onl
yt
o
t
he possessori
n good f
ai
t
h
wi
t
ht
hes
amer
i
ghtofr
e
t
ent
i
on, t
he per
son who has
def
eat
ed hi
m
i
n
t
he
possessi
on
havi
ng t
he
opt
i
on of r
e
f
undi
ng t
he
amountoft
he expenses or
of payi
ng t
he i
ncr
ease i
n
v
al
ue whi
c
ht
he t
hi
ng may
hav
e acqui
r
e
d by r
eason
t
her
eof
.
Ar
t
.548. Expens
es
f
or pur
e l
uxur
y or me
r
e
pl
easur
e shal
l not be
r
ef
undedt
ot
hepossessori
n
good f
ai
t
h; but he may
r
emov
et
heor
nament
s wi
t
h
whi
c
h he has embel
l
i
shed
t
he pr
i
nci
pal t
hi
ng i
fi
t
suffer
s no i
nj
ur
y t
her
eby
,
and i
fhi
s successori
nt
he
possessi
on does not pr
e
f
e
r
t
o r
ef
und t
he amount
e
xpended.
Ar
t
.636. Easement
s es
t
abl
i
s
hed
byl
aw i
nt
hei
nt
e
r
estofpr
i
vat
eper
s
onsor
f
or pr
i
vat
e use shal
lbe gover
ned by t
he
pr
ovi
si
ons oft
hi
s Ti
t
l
e,wi
t
houtpr
ej
udi
ce
t
ot
he pr
ovi
si
ons ofg
ener
alorl
ocall
aws
andor
di
nancesf
ort
heg
ener
alwel
f
ar
e.
These easement
s may be modi
fied
by agr
eement of t
he i
nt
e
r
est
e
d par
t
i
es,
whenev
ert
hel
aw doesnotpr
ohi
bi
ti
torno
i
nj
ur
yi
ssuffer
edbyat
hi
r
dper
son.
Ar
t
. 2014. No act
i
on can be
mai
nt
ai
nedbyt
hewi
nnerf
ort
hecol
l
ect
i
on
ofwhathehaswon i
n agameofc
hance.
Butany l
oser i
n a game ofc
hanc
e may
r
ecov
erhi
sl
os
sf
r
om t
hewi
nner
,wi
t
hl
egal
i
nt
e
r
e
stf
r
om t
het
i
mehepai
dt
heamount
l
ost
,and subsi
di
ar
i
l
yf
r
om t
heoper
at
oror
manageroft
hegambl
i
nghouse.
D.Cont
r
act
s
Ar
t
.1159.Obl
i
gat
i
onsar
i
si
ngf
r
om
cont
r
act
shavet
hef
or
c
eofl
aw be
t
weent
he
cont
r
act
i
ng par
t
i
es and shoul
d be
compl
i
edwi
t
hi
ngoodf
ai
t
h.
Ar
t
.1306. Thecont
r
act
i
ngpar
t
i
es
may e
st
abl
i
sh suc
hs
t
i
pul
at
i
ons
,c
l
auses,
t
e
r
ms and condi
t
i
ons as t
he
y may deem
conveni
ent
,pr
ovi
ded t
heyar
enotcont
r
ar
y
t
ol
aw,mor
al
s,goodcust
oms,publ
i
cor
de
r
,
orpubl
i
cpol
i
cy
.
E.Del
i
ct
Ar
t
.1161.Ci
vi
lobl
i
gat
i
ons ar
i
si
ng
f
r
om cr
i
mi
naloffenses s
hal
lbe gover
ne
d
byt
hepenall
aws,subj
ectt
ot
hepr
ovi
si
ons
of ar
t
i
cl
e 2177, and of t
he per
t
i
nent
pr
ovi
si
onsofChapt
er2,Pr
el
i
mi
nar
y Ti
t
l
e,
on Human Rel
at
i
ons,and ofTi
t
l
eXVI
I
Iof
t
hi
sBook,r
e
gul
at
i
ngdamages.
cor
r
el
at
et
hi
sw/Ar
t
.100,RPC
Ar
t
.100. Ci
vi
lLi
abi
l
i
t
yofaper
son
gui
l
t
y off
el
ony.
- Ev
er
y pe
r
son cr
i
mi
nal
l
y
l
i
abl
ef
oraf
el
onyi
sal
soci
vi
l
l
yl
i
abl
e.
Ar
t
. 108. Obl
i
gat
i
on t
o make
r
es
t
or
at
i
on, r
e
par
at
i
on f
or damages,
i
ndemni
ficat
i
on f
orc
onsequent
i
aldamages
and act
i
on t
o demand t
he same -Upon
whom i
tdev
ol
v
es.-Theobl
i
g
at
i
on t
omake
r
es
t
or
at
i
on orr
epar
at
i
on f
ordamagesand
i
ndemni
ficat
i
on f
orc
onsequent
i
aldamages
de
vol
v
es upon t
he hei
r
s of t
he per
son
l
i
abl
e.
The act
i
on t
o de
mand r
e
s
t
or
at
i
on,
r
epar
at
i
on, and i
ndemni
ficat
i
on l
i
ke
wi
se
descends t
o t
he hei
r
s of t
he per
s
on
i
nj
ur
ed.(
Revi
sedPenalCode.
)
Ar
t
.89. How cr
i
mi
nall
i
abi
l
i
t
yi
s
t
ot
al
l
yext
i
ngui
shed.-Cr
i
mi
nall
i
abi
l
i
t
yi
s
t
ot
al
l
ye
xt
i
ngui
shed:
1. Byt
hede
at
h oft
hec
onvi
ct
,as
t
o t
he per
s
onal penal
t
i
es; and as t
o
pecuni
ar
y penal
t
i
es, l
i
abi
l
i
t
yt
he
r
ef
or i
s
e
xt
i
ngui
shed onl
y when t
he de
at
h oft
he
offende
roccur
sbe
f
or
efinalj
udgment
.
2.Byser
vi
ceoft
hesent
ence;
3. By amnes
t
y
,whi
c
h compl
e
t
e
l
y
e
xt
i
ngui
shest
hepenal
t
yandal
li
t
seffect
s
;
4.Byabsol
ut
epar
don;
5.Bypr
esc
r
i
pt
i
onoft
hecr
i
me;
6.Bypr
esc
r
i
pt
i
onoft
hepenal
t
y
;
7. Byt
hemar
r
i
ageoft
heoffended
woman,aspr
ovi
ded i
n Ar
t
i
cl
e 344 oft
hi
s
Code.(
I
d.
)
Ar
t
. 344. xxx I
n
cases
of
seduct
i
on,
abduct
i
on,
act
s
of
l
asci
vi
ousnessandr
ape,t
he
mar
r
i
age of t
he offende
r
wi
t
h t
he offended par
t
y
shal
l
ext
i
ngui
sh
t
he
cr
i
mi
nalact
i
on orr
emi
tt
he
penal
t
y al
r
eady i
mposed
upon hi
m.Thepr
ovi
s
i
onsof
t
hi
spar
agr
aph s
hal
lal
sobe
appl
i
cabl
e t
o t
he copr
i
nci
pal
s,accompl
i
ces and
accessor
i
es af
t
e
rt
hef
actof
t
he
abovement
i
oned
cr
i
mes.(
I
d.
)
Bal
ane: Cr
i
measasour
c
eofobl
i
gat
i
on.
Ther
e ar
e many cr
i
mes f
r
om w/c, ci
vi
l
l
i
abi
l
i
t
y ar
i
ses i
n t
hei
r commi
ssi
on, i
n
addi
t
i
on t
ot
he cr
i
mi
nalpenal
t
y at
t
ached
t
ot
he
m. Thi
sunder
l
i
nest
het
woaspect
s
i
n acr
i
me: one,asan offenseagai
ns
tt
he
s
t
at
e
,and t
wo as an offense agai
ns
tt
he
vi
ct
i
m. I
ti
si
nt
he l
at
t
erc
ase t
hatci
vi
l
l
i
abi
l
i
t
yi
sr
e
cov
er
abl
e.
Asf
arascr
i
mei
sconcer
ned,ci
vi
l
l
aw i
snotconcer
nedw/t
hepenall
i
abi
l
i
t
y
butonl
yw/t
heci
vi
ll
i
ab.
(
noti
nBavi
er
a'
sout
l
i
ne)
CHAPTER 2.
- NATURE AND EFFECTOF
OBLI
GATI
ONS
Ar
t
i
cl
es 1163 - 1168 i
nr
el
at
i
on t
o Ar
t
.
1156.
Bal
ane: Thr
eet
ypes ofobl
i
gat
i
ons
.
-(
1)
obl
i
gat
i
ont
ogi
ve;(
2)obl
i
gat
i
ont
odo;and
(
3)obl
i
gat
i
onnott
odo.
I
.Obl
i
gat
i
ont
ogi
ve
A.Speci
fict
hi
ng
B.Gener
i
ct
hi
ng
I
I
.Todo
I
I
I
. Not t
o do (
t
hi
si
ncl
udes al
l
negat
i
ve obl
i
gat
i
ons l
i
ke obl
i
gat
i
on nott
o
gi
v
e.
)
Ki
nds of per
f
or
mance.
- (
1) spec
i
fic
per
f
or
manc
e(
pe
r
f
or
manc
e by t
he debt
or
hi
msel
f
)
; (
2)
subs
t
i
t
ut
e per
f
or
manc
e
(
per
f
or
manceatt
hee
xpens
eoft
hedebt
or
)
;
(
3) equi
val
ent per
f
or
manc
e (
gr
ant of
damages.
)
Ar
t
i
cl
es 1163 -1166 cov
er obl
i
gat
i
on t
o
gi
v
e.
Thr
eeAccessor
yObl
i
g
at
i
ons
:
1. Ar
t
.1163.
- Tot
akecar
eoft
het
hi
ng
w/t
hedi
l
i
genceofagoodf
at
herofaf
ami
l
y
unt
i
lact
ualdel
i
ver
y
.
2.Ar
t
.1164.
-T
ode
l
i
vert
hef
r
ui
t
st
ot
he
cr
edi
t
or(
f
r
ui
t
spr
oducedaf
t
erobl
i
gat
i
on t
o
del
i
verar
i
ses.
)
3. Ar
t
.1166.
-T
odel
i
veraccessi
onsand
accessor
i
es.
Ar
t
.1163. Ev
er
ype
r
son obl
i
ge
dt
o
gi
v
esome
t
hi
ngi
sal
soobl
i
gedt
ot
akecar
e
ofi
twi
t
ht
he pr
operdi
l
i
gence ofa good
f
at
he
r ofa f
ami
l
y
,unl
ess t
he l
aw or t
he
s
t
i
pul
at
i
on oft
hepar
t
i
esr
equi
r
esanot
he
r
s
t
andar
dofcar
e.
Ar
t
.1164. Thecr
edi
t
orhasar
i
ght
t
ot
hef
r
ui
t
soft
het
hi
ngf
r
om t
het
i
met
he
obl
i
gat
i
on t
o del
i
ver ar
i
ses. Howe
ver
,he
shal
lhave no r
e
alr
i
ghtoveri
tunt
i
lt
he
samehasbeendel
i
ver
edt
ohi
m.
Bal
ane: Fr
om t
he t
i
me t
he obl
i
gat
i
on
ar
i
ses,t
he cr
edi
t
or has a per
sonalr
i
ght
agai
nstt
hedebt
orast
ot
hef
r
ui
t
s. Buthe
has no r
ealr
i
ghtov
er t
hem unt
i
lact
ual
del
i
ver
y
. Real r
i
ght i
sar
i
ght w/c i
s
enf
or
ceabl
e agai
ns
tt
he whol
e wor
l
d. He
has onl
yt
he per
sonalr
i
ght agai
ns
tt
he
debt
orw/ r
eg
ar
dt
ot
heundel
i
ver
ed f
r
ui
t
s.
Thi
si
s bec.oft
he pr
i
nci
pl
e Non nudi
s
pac
t
i
s, sed t
r
adi
t
i
one, domi
ni
a r
er
um
t
r
ansf
er
ent
ur
.
"
(
I
t i
s not by me
r
e
agr
e
ement
,butby del
i
v
er
y
,i
s owne
r
shi
p
t
r
ansf
er
r
ed.
)Per
sonalr
i
ghtar
i
sesf
r
om t
he
t
i
me t
he obl
i
gat
i
on t
o del
i
v
er ar
i
ses
wher
e
ast
her
ealr
i
ghtdoesnotar
i
seunt
i
l
act
ualdel
i
v
er
y
.
Ar
t
i
cl
es1165-1167.
-Remedi
e
sAvai
l
abl
e
t
o t
he Cr
edi
t
or (
speci
fic per
f
or
mance,
subs
t
i
t
ut
e
per
f
or
mance,
equi
val
ent
per
f
or
mance.
)
A.I
nobl
i
g
at
i
onst
ogi
ve
1. Ade
t
e
r
mi
nat
et
hi
ng
a.Speci
ficpe
r
f
or
mance
b.Equi
val
entper
f
or
mance
2.Agene
r
i
ct
hi
ng,al
lr
emedi
e
sar
e
avai
l
abl
e
B. I
n an obl
i
gat
i
on t
o do, make a
di
s
t
i
nct
i
on:
1. Obl
i
gat
i
on t
o do w/c i
s pur
el
y
per
sonal
,onl
y equi
val
e
ntper
f
or
mance i
s
avai
l
abl
e
2. Obl
i
gat
i
on t
o do w/c i
s not
per
sonal
a.subs
t
i
t
ut
eper
f
or
mance
b.equi
val
entpe
r
f
or
mance
Not
e t
hat i
n obl
i
gat
i
ons t
o do,
speci
ficper
f
or
mancei
snotav
ai
l
abl
e. The
r
easonf
ort
hi
si
st
hats
peci
ficper
f
or
mance
wi
l
lgi
ver
i
set
oi
nvol
unt
ar
ys
er
vi
t
ude.
C.Obl
i
gat
i
onnott
odo
1.subs
t
i
t
ut
epe
r
f
or
mance
2.equi
val
entpe
r
f
or
mance.
I
n al
lt
hese cases,t
he cr
edi
t
or has t
he
opt
i
on ofr
esol
ut
i
on or r
esci
ssi
on under
Ar
t
.1191. I
n addi
t
i
on,hecan al
so cl
ai
m
damat
e
s.
Ar
t
. 1165. When whati
st
o be
del
i
ver
ed i
s a de
t
er
mi
nat
e t
hi
ng, t
he
cr
edi
t
or
,i
n addi
t
i
on t
ot
he r
i
ghtgr
ant
e
d
hi
m by ar
t
i
cl
e 1170, may compel t
he
debt
or
kt
omaket
hedel
i
v
er
y
.
I
ft
he t
hi
ng i
si
nde
t
er
mi
nat
e or
gener
i
c,hemayaskt
hatt
heobl
i
gat
i
on be
compl
i
edwi
t
hatt
hee
xpenseoft
hedebt
or
.
I
f t
he obl
i
gor del
ays, or has
pr
omi
sed t
odel
i
vert
hes
amet
hi
ngt
ot
wo
ormor
eper
sonswhodonothavet
hes
ame
i
nt
e
r
e
st
,he shal
lbe r
esponsi
bl
ef
or any
f
or
t
ui
t
ous e
ventunt
i
lhe has effect
e
dt
he
del
i
ver
y
.
Ar
t
.1166. Theobl
i
gat
i
on t
ogi
vea
de
t
er
mi
nat
e t
hi
ng i
ncl
udes t
hat of
del
i
ver
i
ng i
t
s acce
ssi
ons and accessor
i
es,
e
ven t
hough t
he
y may not hav
e been
ment
i
oned.
Ar
t
.1167.I
faper
son obl
i
gedt
odo
some
t
hi
ngf
ai
l
st
odoi
t
,t
hes
ames
hal
lbe
e
xecut
e
dathi
scost
.
Thi
ssamer
ul
es
hal
lbeobser
vedi
f
hedoesi
ti
nc
ont
r
avent
i
on oft
het
enorof
t
he obl
i
gat
i
on. Fur
t
he
r
mor
e,i
t may be
decr
eedt
hatwhathasbeenpoor
l
ydonebe
undone.
Ar
t
. 1168. When t
he obl
i
gat
i
on
consi
st
si
n notdoi
ngand t
heobl
i
gordoes
whathasbeen f
or
bi
dden hi
m,i
tshal
lal
so
beundoneathi
se
xpens
e.
Ar
t
i
cl
es 1169 - 1174.
- I
r
r
egul
ar
i
t
y of
Pe
r
f
or
manc
e.
Bal
ane:
TwoCl
assesofI
r
r
egul
ar
i
t
yofPer
f
or
manc
e:
I
.At
t
r
i
but
abl
et
ot
hede
bt
or
A.Fr
aud
B.Negl
i
gence
C.Del
ay
I
I
.Notat
t
r
i
but
abl
et
ot
hede
bt
or
A.For
t
ui
t
ousev
ent
.
Ar
t
.1169. Thoseobl
i
ged t
odel
i
ver
ort
odosome
t
hi
ngi
nc
uri
n del
ayf
r
om t
he
t
i
met
heobl
i
geej
udi
ci
al
l
yorext
r
aj
udi
ci
al
l
y
demandsf
r
om t
he
mt
hef
ul
fil
l
mentoft
hei
r
obl
i
gat
i
on.
Howev
er
, t
he demand by t
he
cr
edi
t
or shal
lnot be necessar
yi
n or
de
r
t
hatdel
aymaye
xi
s
t
:
(
1)When t
heobl
i
gat
i
on ort
hel
aw
e
xpr
essl
ys
odecl
ar
e;
(
2)When f
r
om t
henat
ur
e and t
he
ci
r
cums
t
ancesoft
heobl
i
g
at
i
on i
tappe
ar
s
t
hatt
hedesi
gnat
i
on oft
het
i
mewhen t
he
t
hi
ngi
st
obedel
i
ver
edort
hes
er
vi
cei
st
o
be r
ende
r
e
d was a cont
r
ol
l
i
ng mot
i
v
ef
or
t
hees
t
abl
i
shmentoft
hecont
r
act
;
(
3) When demand woul
d be
usel
ess,aswhen t
heobl
i
gorhasr
ende
r
e
d
i
tbey
ondhi
spowe
rt
oper
f
or
m.
I
n r
eci
pr
ocal obl
i
gat
i
ons, nei
t
her
par
t
yi
ncur
si
n del
ayi
ft
heot
herdoesnot
compl
y or i
s not r
eady t
o compl
yi
na
pr
oper manner wi
t
h what i
si
ncumbent
upon hi
m.Fr
om t
he momentone oft
he
par
t
i
esf
ul
fil
l
shi
sobl
i
g
at
i
on,del
aybyt
he
ot
herbegi
ns.
Bal
ane:
Whe
n doesdel
ayse
ti
n?- Del
ayse
t
si
ni
n
t
hef
ol
l
owi
ngmanne
r
:
1.
For Reci
pr
ocal si
mul
t
aneous
obl
i
gat
i
ons.
- by t
he r
e
adi
ne
ss ofone of
t
hepar
t
i
es t
o per
f
or
m and hi
sl
e
t
t
i
ng t
he
ot
herpar
t
y know;and t
he ot
herpar
t
yi
s
notr
eadyt
ocompl
yi
napr
opermannerw/
whati
si
ncumbentuponhi
m.
2. ForRec
i
pr
ocalobl
i
gat
i
onsw/car
enot
si
mul
t
aneous.
- Gen.Rul
e: Demand i
s
necessar
y(
Ar
t
. 1169, par
. 1.
) Thi
si
s
cal
l
edmor
asol
vendiexper
sona.
Except
i
on: When demand i
s not
necessar
y(
t
hee
xcept
i
onsar
ef
oundi
n Ar
t
.
1169,par
.2.
)Thi
si
scal
l
edmor
asol
vendi
exr
e
What ki
nd of de
mand i
s necessar
y?Judi
c
i
alore
xt
r
aj
udi
ci
al
Except
i
ons
:
(
1) When t
he obl
i
gat
i
on or t
he l
aw
expr
essl
y sodec
l
ar
e.
- when t
hec
ont
r
act
says t
hat w/o t
he necessi
t
y ofdemand,
def
aul
t se
t
si
n upon t
he f
ai
l
ur
e of t
he
obl
i
gor t
o per
f
or
m on due dat
e
. The
r
e
must be some
t
hi
ng i
nt
he cont
r
act w/c
e
xpl
i
ci
t
l
ys
t
at
e
st
hat t
he demand i
s not
necessar
yi
nor
dert
hatde
l
aymays
e
ti
n.
(
2) When f
r
om t
he nat
ur
e and t
he
c
i
r
c
ums
t
anc
es oft
he obl
i
gat
i
on i
tappear
s
t
hatt
hedesi
gnat
i
on oft
het
i
me when t
he
t
hi
ngi
st
obedel
i
ver
ed ort
heser
vi
c
ei
st
o
be r
ender
ed was a c
ont
r
ol
l
i
ng mot
i
ve f
or
t
hees
t
abl
i
shmentoft
hec
ont
r
ac
t
.
I
l
l
us
t
r
at
i
on: Bong Bayl
on i
s
ge
t
t
i
ng mar
r
i
ed i
n Val
ent
i
nes '
96. I
nno
Sot
t
o was supposed t
o make El
l
a'
s(
t
he
br
i
de)weddi
nggown. Feb.14 comes,no
gown was del
i
ver
ed. El
l
a ge
t
smar
r
i
ed i
n
bl
uej
eansandt
shi
r
t
.Fi
nal
l
y
,onFeb.15,
I
nno del
i
v
er
st
he gown. xxx El
l
a sues
I
nno f
orbr
eac
h. I
nno says t
her
ewasno
demand. I
n t
hi
s case, demand i
s not
necessar
yi
nor
dert
hatde
l
aymaye
xi
s
t
.
(
3)When demand woul
d be usel
ess,as
when t
he obl
i
gorhas r
ender
ed i
tbeyond
hi
spo
wert
oper
f
or
m.
-Exampl
ei
st
hecase
ofChavezv
.Gonz
al
es
,i
nf
r
a.
BALANE CASES:
AGCAOI
LIVS.GSI
S [
165 S 1] - Ther
e
wast
he
n a pe
r
f
ect
e
d cont
r
actofsal
ebe
t
.
t
he par
t
i
es;t
her
e had been a mee
t
i
ng of
t
hemi
ndsupon t
hepur
c
hasebyAgcaoi
l
i
ofade
t
er
mi
nat
ehouseandl
oti
nt
heGSI
S
Housi
ng Pr
oj
ect at Nangka, Mar
i
ki
na,
Ri
z
al
, at a defini
t
e pr
i
ce payabl
e i
n
amor
t
i
z
at
i
onsatP31.
56permo.
,andf
r
om
t
hemomentt
hepar
t
i
esacqui
r
ed t
her
i
ght
t
or
e
ci
pr
ocal
l
y demand per
f
or
manc
e. I
t
was,t
obesur
e,t
hedut
yoft
heGSI
S,as
sel
l
er
,t
o de
l
i
ver t
he t
hi
ng sol
d i
n a
condi
t
i
on s
ui
t
abl
ef
ori
t
senj
oymentbyt
he
buy
er f
or t
he pur
pose cont
e
mpl
at
ed, i
n
ot
herwor
ds,t
ode
l
i
vert
hehousesubj
ectof
t
hecont
r
acti
n ar
easonabl
yl
i
vabl
es
t
at
e
.
Thi
si
tf
ai
l
edt
odo.
xxx
Si
nce GSI
S di
d not f
ul
fil
lt
hat
obl
i
gat
i
on,and wasnotwi
l
l
i
ng t
oputt
he
housei
n habi
t
abl
es
t
at
e,i
tcannoti
nv
oke
Agcoi
l
i
'
s s
uspensi
on of payment of
amor
t
i
z
at
i
on as cause t
o cancel t
he
cont
r
actbe
t
.t
hem. I
ti
s axi
omat
i
ct
hat
"
(
i
)
nr
eci
pr
ocalobl
i
gat
i
ons
,nei
t
her par
t
y
i
ncur
si
n del
ay i
ft
he ot
her does not
compl
y or i
s not r
eady t
o compl
yi
na
pr
oper manner wi
t
h what i
si
ncumbent
uponhi
m.
SSS VS. MOONWALK [
221 S 119] Requi
si
t
es i
n or
dert
hatdebt
or ma be i
n
def
aul
t
;Nec
essi
t
y ofdemand.
- T
o be i
n
def
aul
t"
xxxi
sdi
ffer
entf
r
om mer
edel
ayi
n
t
hegr
ammat
i
cals
ense,bec.i
ti
nvol
v
est
he
begi
nni
ng ofa speci
alc
ondi
t
i
on ors
t
at
us
w/c has i
t
s own pecul
i
ar e
ffect
s or
r
esul
t
s.
"I
n or
de
rt
hatt
hedebt
ormaybe
i
ndef
aul
ti
ti
snecessar
yt
hatt
hef
ol
l
owi
ng
r
equi
si
t
es be pr
esent
: (
1) t
hat t
he
obl
i
gat
i
on be demandabl
e and al
r
eady
l
i
qui
dat
ed; (
2) t
hat t
he debt
or del
ays
per
f
or
manc
e; and (
3) t
hat t
he c
r
edi
t
or
r
equi
r
es t
he per
f
or
manc
e j
udi
c
i
al
l
y or
ext
r
aj
udi
c
i
al
l
y. Def
aul
t ge
ner
al
l
y begi
ns
f
r
om t
hemomentt
hecr
edi
t
orde
mandst
he
per
f
or
mance oft
he obl
i
gat
i
on. Noweher
e
i
n t
hi
s case di
d i
t appear t
hat SSS
demanded f
r
om Moonwal
kt
hepaymentof
i
t
s mont
hl
y amor
t
i
z
at
i
on. Nei
t
he
r di
di
t
show t
hat pe
t
i
t
i
oner demanded t
he
payment oft
he s
t
i
pul
at
ed penal
t
y upon
t
he f
ai
l
ur
e of Moonwal
k t
o mee
t i
t
s
mont
hl
y amor
t
i
z
at
i
on.
What t
he
compl
ai
nti
t
sel
fshowedwast
hatSSSt
r
i
ed
t
o enf
or
ce t
he obl
i
gat
i
on some
t
hi
me i
n
Sept
,1977 by f
or
e
cl
osi
ng t
he r
e
ale
st
at
e
mor
t
gages e
xecut
e
d by Moonwal
ki
nf
av
or
ofSSS. Butt
hi
sf
or
ecl
osur
edi
dnotpush
t
hr
ough upon Moonwal
k'
sr
eque
st
s and
pr
omi
sest
opayi
nf
ul
l
. Thene
xtdemand
f
or payment happened on Oct
. 1,1979
when SSS i
ssued a St
at
e
mentofAccount
t
oMoonwal
k. And i
n accor
dancew/sai
d
s
t
at
e
ment
,Moonwal
k pai
di
t
sl
oan i
nf
ul
l
.
Whati
scl
ear
,t
her
ef
or
e,i
st
hatMoonwal
k
was ne
v
er i
n def
aul
t bec. SSS nev
er
compel
l
edpe
r
f
or
manc
e.
Ar
t
. 1170. Those who i
n t
he
per
f
or
mance oft
hei
robl
i
gat
i
on ar
e gui
l
t
y
off
r
aud,negl
i
gence or del
ay
,and t
hose
who i
n any manne
rcont
r
av
ene t
he t
enor
t
her
eof
,ar
el
i
abl
ef
ordamages.
BALANE CASES:
ARRI
ETAVS.NARI
C [
10S79]- Onewho
assumesacont
r
act
ualobl
i
gat
i
on andf
ai
l
s
t
o per
f
or
m t
he same on account ofhi
s
i
nabi
l
i
t
y
t
o
mee
t c
er
t
ai
n
bank
r
equi
r
ement
swhi
c
hi
nabi
l
i
t
yhekne
w and
was awar
e ofwhen he ent
er
ed i
nt
ot
he
cont
r
act
,shoul
dbehel
dl
i
abl
ei
n damages
f
orbr
eac
hofcont
r
act
.
UnderAr
t
.1170,notonl
y debt
or
s
gui
l
t
y off
r
aud,negl
i
gence ordef
aul
tbut
al
soe
v
er
ydebt
or
,i
ng
ener
al
,whof
ai
l
st
he
per
f
or
manceofhi
sobl
i
g
at
i
on i
sbound t
o
i
ndemni
f
yf
or t
he l
osses and damages
causedt
he
r
e
by
.
Meani
ng ofphr
ase"
i
n any manner
c
ont
r
avene t
he t
enor
" of t
he obl
i
gat
i
on.
The phr
ase i
ncl
udes any i
l
l
i
ci
tt
ask w/c
i
mpai
r
st
hes
t
r
i
ctandf
ai
t
hf
ulf
ul
fil
l
mentof
t
he obl
i
g
at
i
on,or ev
er
y ki
nd ofdef
ect
i
ve
per
f
or
mance.
Bal
ane: Thi
sphr
asei
sa cat
c
hal
l
pr
ovi
si
on. Atwor
s
t
,i
ti
sasuper
flui
t
y
. At
bes
t
,t
her
ei
sasaf
e
t
yne
tj
usti
ncaset
he
r
e
i
s a cul
pabl
ei
r
r
egul
ar
i
t
y ofper
f
or
mance
w/ci
snotcover
ed byf
r
aud,negl
i
genc
eor
del
ay
.I
nt
hi
scase,t
heSC wasappar
ent
l
y
notsur
e as t
o whatc
at
egor
yt
he br
each
f
el
l
.
Thi
s phr
ase i
s not r
eal
l
y an
i
ndependentgr
ound.
TELEFAST VS.CASTRO [
158 s445] - I
n
t
he case at bar
, pe
t
i
t
i
oner and pr
i
vat
e
r
espondentSofia C.Cr
ouc
he
nt
er
edi
nt
oa
cont
r
act whe
r
e
by
,f
or a f
ee, pe
t
i
t
i
one
r
under
t
ook t
o send sai
d pr
i
vat
e
r
espondent
'
s message ov
er
s
eas by
t
e
l
egr
am. Thi
s, pe
t
i
t
i
oner di
d not do,
despi
t
e per
f
or
mance by sai
d pvt
.r
esp.of
her obl
i
gat
i
on by payi
ng t
he r
equi
r
ed
c
har
g
es. Pe
t
i
t
i
onerwast
her
ef
or
egui
l
t
yof
cont
r
av
eni
ng i
t
sobl
i
gat
i
on t
o sai
d pr
i
v
at
e
r
espondentandi
st
husl
i
abl
ef
ordamages.
NPC VS.CA [
161 S 334] - NPC c
annot
esc
apel
i
abi
l
i
t
y bec
.i
t
snegl
i
genc
ewast
he
saved f
r
om dest
r
uct
i
on byanot
herper
son
wi
t
houtt
he knowl
edge oft
he owne
r
,t
he
l
at
t
er i
s bound t
o pay t
he f
or
mer j
ust
compensat
i
on.
Ar
t
. 2174. Whe
n i
n a smal
l
communi
t
yamaj
or
i
t
yoft
hei
nhabi
t
ant
sof
agedeci
de upon a measur
ef
orpr
ot
e
ct
i
on
agai
nst l
awl
essness,fir
e,flood,s
t
or
m or
ot
hercal
ami
t
y
,anyonewhoobj
ect
st
ot
he
pl
an and r
ef
uses t
o cont
r
i
but
et
ot
he
e
xpens
es buti
s benefit
t
e
d by t
he pr
oj
ect
ase
xecut
eds
hal
lbel
i
abl
et
opayhi
sshar
e
ofsai
dexpenses.
Ar
t
.2170. When by acci
dent or
ot
herf
or
t
ui
t
ouse
v
ent
,mov
abl
e
ssepar
at
el
y
per
t
ai
ni
ng t
ot
wo or mor
e per
sons ar
e
commi
ngl
ed orconf
used,t
her
ul
eson coowner
shi
pshal
lbeappl
i
cabl
e.
one'
s own act
soromi
ssi
ons,butal
so f
or
t
hose of per
sons f
or whom one i
s
r
esponsi
bl
e.
Thef
at
herand,i
ncaseofhi
sde
at
h
ori
ncapaci
t
y
,t
he mot
he
r
,ar
er
esponsi
bl
e
f
or t
he damages caused by t
he mi
nor
c
hi
l
dr
enwhol
i
vei
nt
hei
rcompany
.
Guar
di
ans ar
el
i
abl
ef
or damages
caused by t
he mi
nor
s or i
ncapaci
t
at
ed
per
sonswhoar
eundert
hei
raut
hor
i
t
yand
l
i
vei
nt
hei
rcompany
.
The owner
s and manage
r
s ofan
es
t
abl
i
s
hment or ent
e
r
pr
i
s
e ar
el
i
kewi
se
r
esponsi
bl
ef
or damages caused by t
hei
r
empl
oyee
si
nt
heser
vi
ceoft
hebr
anc
hesi
n
whi
c
ht
he l
at
t
e
r ar
ee
mpl
oyed or on t
he
occasi
onoft
hei
rf
unct
i
ons.
Empl
oy
er
s shal
lbe l
i
abl
ef
or t
he
damages caused by t
hei
r empl
oyees and
househol
dhel
per
sact
i
ngwi
t
hi
nt
hescope
oft
hei
rassi
gne
dt
asks,e
ven t
hough t
he
f
or
merar
enotengag
ed i
n anybusi
nessor
i
ndus
t
r
y
.
The St
at
ei
sr
e
sponsi
bl
ei
n l
i
ke
manner when i
t act
st
hr
ough a speci
al
B.Quasi
del
i
ct
s
Ar
t
. 2176. Whoever by act or
omi
ssi
on c
ausesdamaget
oanot
her
,t
her
e
bei
ngf
aul
tornegl
i
gence,i
sobl
i
gedt
opay
f
or t
he damage done. Such f
aul
t or
negl
i
gence, i
ft
he
r
e i
s no pr
e
exi
st
i
ng
cont
r
act
ualr
el
at
i
on be
t
weent
hepar
t
i
es,i
s
cal
l
edaquasi
del
i
c
tandi
sgover
nedbyt
he
pr
ovi
si
onsoft
hi
sChapt
e
r
.
Ar
t
.2177. Responsi
bi
l
i
t
yf
orf
aul
t
ornegl
i
gence undert
he pr
ecedi
ng ar
t
i
cl
e
i
s ent
i
r
el
y separ
at
e and di
st
i
nctf
r
om t
he
ci
vi
ll
i
abi
l
i
t
yar
i
si
ngf
r
om negl
i
genceunder
t
he PenalCode.Butt
he pl
ai
nt
i
ff cannot
r
ecov
erdamagest
wi
cef
ort
hes
ameactor
omi
ssi
onoft
hedef
endant
.
Ar
t
.2180. Theobl
i
gat
i
on i
mposed
byar
t
i
cl
e2176i
sdemandabl
enotonl
yf
or
agent
;butnotwhen t
hedamagehasbe
en
caused by t
he offici
alt
o whom t
he t
ask
donepr
oper
l
yper
t
ai
ns,i
nwhi
c
hcasewhat
i
s pr
ovi
ded i
n ar
t
i
cl
e 2176 shal
l be
appl
i
cabl
e.
Last
l
y
, t
e
acher
s or heads of
es
t
abl
i
s
hment
sofar
t
sand t
r
adesshal
lbe
l
i
abl
ef
ordamages caus
ed by t
hei
rpupi
l
s
and st
udent
s or appr
ent
i
ces,so l
ong as
t
heyr
emai
ni
nt
hei
rcus
t
ody
.
Ther
esponsi
bi
l
i
t
yt
r
eat
e
dofi
nt
hi
s
ar
t
i
cl
e shal
l cease when t
he per
sons
her
ei
nment
i
onedpr
ov
et
hatt
he
yobse
r
ved
al
lt
hedi
l
i
genc
eofagoodf
at
herofaf
ami
l
y
t
opr
ev
entdamage.
Ar
t
.2182. I
ft
he mi
norori
ns
ane
per
son c
ausi
ngdamagehasnopar
ent
sor
guar
di
an,t
hemi
norori
ns
aneper
sonshal
l
beanswer
abl
ewi
t
hhi
sownpr
oper
t
yi
nan
act
i
on agai
ns
thi
m whe
r
e a guar
di
an ad
l
i
t
e
m shal
lbeappoi
nt
ed.
Ar
t
.2194.Ther
esponsi
bi
l
i
t
yoft
wo
ormor
eper
sons who ar
el
i
abl
ef
orquasi
del
i
cti
ssol
i
dar
y
.
Ar
t
.1728.The cont
r
act
ori
sl
i
abl
e
f
or al
lt
he cl
ai
ms ofl
abor
e
r
s and ot
her
s
empl
oyed byhi
m,and oft
hi
r
dper
sonsf
or
deat
h or physi
cal i
nj
ur
i
es dur
i
ng t
he
cons
t
r
uct
i
on.
Ar
t
.1763. A common car
r
i
er i
s
r
esponsi
bl
e f
or i
nj
ur
i
es suffer
e
d by a
passengeron acc
ountoft
hewi
l
f
ulact
sor
negl
i
gence of ot
her passenger
s or of
s
t
r
anger
s
, i
f t
he c
ommon car
r
i
er
'
s
empl
oyee
s t
hr
ough t
he e
xer
ci
s
e of t
he
di
l
i
genceofagoodf
at
herofaf
ami
l
ycoul
d
hav
e pr
e
vent
ed or s
t
opped t
he act or
omi
ssi
on.
Ar
t
. 218.
The s
chool
, i
t
s
admi
ni
s
t
r
at
or
s and t
eac
he
r
s, or t
he
i
ndi
vi
dual
,ent
i
t
y or i
ns
t
i
t
ut
i
ons engaged
i
nc
hi
l
d car
e shal
lhav
e speci
alpar
ent
al
aut
hor
i
t
yandr
es
ponsi
bi
l
i
t
yovert
hemi
nor
c
hi
l
d whi
l
e under t
hei
r s
uper
v
i
si
on,
i
nst
r
uct
i
onorcus
t
ody
.
Aut
hor
i
t
y and r
esponsi
bi
l
i
t
y shal
l
appl
yt
o al
laut
hor
i
z
ed act
i
vi
t
i
es whe
t
he
r
i
nsi
de or out
si
de t
he pr
emi
s
es of t
he
sc
hoolent
i
t
yori
nst
i
t
ut
i
on.(
Fami
l
yCode.
)
e
xe
r
c
i
sed t
he pr
oper di
l
i
gence r
equi
r
ed
undert
hepar
t
i
cul
arci
r
cums
t
ances.
Al
lot
hercasesnotcov
er
ed byt
hi
s
and t
he pr
ec
edi
ng ar
t
i
cl
es shal
l be
gover
ned by t
he pr
ovi
si
ons of t
he Ci
vi
l
Codeonquasi
del
i
ct
s.(
I
d.
)
C.Law
Ar
t
. 1158. Obl
i
gat
i
ons der
i
v
ed
f
r
om l
aw ar
e not pr
esumed.Onl
yt
hose
e
xpr
essl
y de
t
er
mi
ned i
nt
hi
s Code or i
n
speci
all
awsar
edemandabl
e,and s
hal
lbe
r
egul
at
e
dbyt
hepr
ecept
soft
hel
aw whi
ch
es
t
abl
i
s
hest
hem;and ast
owhathasnot
been f
or
eseen,by t
he pr
ovi
si
ons oft
hi
s
Book.
Ar
t
.294. The cl
ai
m f
or suppor
t
,
when pr
operand t
wo ormor
eper
sonsar
e
obl
i
ged t
o gi
v
ei
t
,shal
lbe made i
nt
he
f
ol
l
owi
ngor
der
:
(
1)Fr
om t
hes
pouse;
(
2) Fr
om t
he descendant
s of t
he
near
es
tdegr
e
e;
(
3)Fr
om t
he ascendant
s
, al
so of
t
henear
es
tdegr
ee;
(
4)Fr
om t
hebr
ot
he
r
sandsi
st
e
r
s
.
Among
descendant
s
and
ascendant
st
he or
de
ri
n whi
c
ht
hey ar
e
cal
l
ed t
ot
he i
nt
e
st
at
e successi
on oft
he
per
son who has a r
i
ghtt
o cl
ai
m suppor
t
shal
lbeobser
ved.
Under t
he NCC, f
ol
l
ow t
he or
de
r of
i
nt
es
t
at
esuccessi
on
Ar
t
.219.Thosegi
vent
heaut
hor
i
t
y
and r
e
sponsi
bi
l
i
t
y under t
he pr
ecedi
ng
Ar
t
i
cl
e shal
lbe pr
i
nci
pal
l
y and sol
i
dar
i
l
y
l
i
abl
ef
ordamages c
aused by t
he act
s or
omi
ssi
ons of t
he unemanci
pat
ed mi
nor
.
Ar
t
.199. Whenever t
wo or mor
e
per
sonsar
eobl
i
gedt
ogi
v
esuppor
t
,
t
hel
i
abi
l
i
t
y shal
lde
v
ol
veupon t
he
The par
e
nt
s
,j
udi
ci
al guar
di
ans or t
he
per
sonsexe
r
c
i
si
ng par
ent
alaut
hor
i
t
yover
sai
dmi
norshal
lbesubsi
di
ar
i
l
yl
i
abl
e.
The r
espect
i
v
el
i
abi
l
i
t
i
es of t
hose
r
ef
er
r
ed t
oi
n t
he pr
ecedi
ng par
agr
aph
shal
lnot appl
yi
fi
ti
s pr
ov
ed t
hatt
hey
(
3)The ascendant
si
nt
he near
e
st
f
ol
l
owi
ng per
sons i
n t
he or
der
her
ei
npr
ovi
ded:
(
1)Thespouse;
(
2)Thedescendant
si
nt
henear
e
st
degr
ee;
Ar
t
.548. Expens
es
degr
ee;
(
4) The br
ot
her
s and si
s
t
er
s
.
(
Fami
l
yCode.
)
Ar
t
.448.Theowneroft
hel
andon
whi
c
h anyt
hi
ng has be
en bui
l
t
,s
own,or
pl
ant
ed i
n good f
ai
t
h,shal
lhavet
her
i
ght
t
o appr
opr
i
at
e as hi
s own t
he wor
ks,
sowi
ng or pl
ant
i
ng,af
t
e
rpaymentoft
he
i
ndemi
ni
t
ypr
ovi
dedf
ori
nar
t
i
cl
e
s546and
548,or t
o obl
i
ge t
he one who bui
l
t or
pl
ant
ed t
o pay t
he pr
i
c
e oft
hel
and,and
t
he one who sowed, t
he pr
oper r
ent
.
Howev
er
,t
hebui
l
derorpl
ant
ercannotbe
obl
i
ged t
o buy t
he l
and i
fi
t
sv
al
ue i
s
consi
der
abl
y mor
e t
han t
hat of t
he
bui
l
di
ng ort
r
ees.I
n such case,he shal
l
pay r
e
asonabl
er
ent
,i
ft
he owner oft
he
l
and does notc
hoose t
o appr
opr
i
at
et
he
bui
l
di
ng or t
r
ees af
t
er pr
oper i
ndemni
t
y
.
Thepar
t
i
ess
hal
lagr
eeupon t
het
e
r
msof
t
hel
easeandi
n caseofdi
sagr
eement
,t
he
cour
tshal
lfixt
het
e
r
mst
her
eof
.
Ar
t
.546. Necessar
y
e
xpens
es shal
lbe r
e
f
unded
t
oe
ver
ypossessor
;butonl
y
t
he possessori
n good f
ai
t
h
may r
e
t
ai
nt
he t
hi
ng unt
i
l
he has been r
ei
mbur
sed
t
her
ef
or
.
Usef
ul
expenses
shal
l be r
ef
unded onl
yt
o
t
he possessori
n good f
ai
t
h
wi
t
ht
hes
amer
i
ghtofr
e
t
ent
i
on, t
he per
son who has
def
eat
ed hi
m
i
n
t
he
possessi
on
havi
ng t
he
opt
i
on of r
e
f
undi
ng t
he
amountoft
he expenses or
of payi
ng t
he i
ncr
ease i
n
v
al
ue whi
c
ht
he t
hi
ng may
hav
e acqui
r
e
d by r
eason
t
her
eof
.
f
or pur
e l
uxur
y or me
r
e
pl
easur
e shal
l not be
r
ef
undedt
ot
hepossessori
n
good f
ai
t
h; but he may
r
emov
et
heor
nament
s wi
t
h
whi
c
h he has embel
l
i
shed
t
he pr
i
nci
pal t
hi
ng i
fi
t
suffer
s no i
nj
ur
y t
her
eby
,
and i
fhi
s successori
nt
he
possessi
on does not pr
e
f
e
r
t
o r
ef
und t
he amount
e
xpended.
Ar
t
.636. Easement
s es
t
abl
i
s
hed
byl
aw i
nt
hei
nt
e
r
estofpr
i
vat
eper
s
onsor
f
or pr
i
vat
e use shal
lbe gover
ned by t
he
pr
ovi
si
ons oft
hi
s Ti
t
l
e,wi
t
houtpr
ej
udi
ce
t
ot
he pr
ovi
si
ons ofg
ener
alorl
ocall
aws
andor
di
nancesf
ort
heg
ener
alwel
f
ar
e.
These easement
s may be modi
fied
by agr
eement of t
he i
nt
e
r
est
e
d par
t
i
es,
whenev
ert
hel
aw doesnotpr
ohi
bi
ti
torno
i
nj
ur
yi
ssuffer
edbyat
hi
r
dper
son.
Ar
t
. 2014. No act
i
on can be
mai
nt
ai
nedbyt
hewi
nnerf
ort
hecol
l
ect
i
on
ofwhathehaswon i
n agameofc
hance.
Butany l
oser i
n a game ofc
hanc
e may
r
ecov
erhi
sl
os
sf
r
om t
hewi
nner
,wi
t
hl
egal
i
nt
e
r
e
stf
r
om t
het
i
mehepai
dt
heamount
l
ost
,and subsi
di
ar
i
l
yf
r
om t
heoper
at
oror
manageroft
hegambl
i
nghouse.
D.Cont
r
act
s
Ar
t
.1159.Obl
i
gat
i
onsar
i
si
ngf
r
om
cont
r
act
shavet
hef
or
c
eofl
aw be
t
weent
he
cont
r
act
i
ng par
t
i
es and shoul
d be
compl
i
edwi
t
hi
ngoodf
ai
t
h.
Ar
t
.1306. Thecont
r
act
i
ngpar
t
i
es
may e
st
abl
i
sh suc
hs
t
i
pul
at
i
ons
,c
l
auses,
t
e
r
ms and condi
t
i
ons as t
he
y may deem
conveni
ent
,pr
ovi
ded t
heyar
enotcont
r
ar
y
t
ol
aw,mor
al
s,goodcust
oms,publ
i
cor
de
r
,
orpubl
i
cpol
i
cy
.
E.Del
i
ct
Ar
t
.1161.Ci
vi
lobl
i
gat
i
ons ar
i
si
ng
f
r
om cr
i
mi
naloffenses s
hal
lbe gover
ne
d
byt
hepenall
aws,subj
ectt
ot
hepr
ovi
si
ons
of ar
t
i
cl
e 2177, and of t
he per
t
i
nent
pr
ovi
si
onsofChapt
er2,Pr
el
i
mi
nar
y Ti
t
l
e,
pecuni
ar
y penal
t
i
es, l
i
abi
l
i
t
yt
he
r
ef
or i
s
e
xt
i
ngui
shed onl
y when t
he de
at
h oft
he
offende
roccur
sbe
f
or
efinalj
udgment
.
2.Byser
vi
ceoft
hesent
ence;
3. By amnes
t
y
,whi
c
h compl
e
t
e
l
y
e
xt
i
ngui
shest
hepenal
t
yandal
li
t
seffect
s
;
4.Byabsol
ut
epar
don;
5.Bypr
esc
r
i
pt
i
onoft
hecr
i
me;
6.Bypr
esc
r
i
pt
i
onoft
hepenal
t
y
;
7. Byt
hemar
r
i
ageoft
heoffended
woman,aspr
ovi
ded i
n Ar
t
i
cl
e 344 oft
hi
s
Code.(
I
d.
)
Ar
t
. 344. xxx I
n
cases
of
seduct
i
on,
abduct
i
on,
act
s
of
l
asci
vi
ousnessandr
ape,t
he
on Human Rel
at
i
ons,and ofTi
t
l
eXVI
I
Iof
t
hi
sBook,r
e
gul
at
i
ngdamages.
cor
r
el
at
et
hi
sw/Ar
t
.100,RPC
Ar
t
.100. Ci
vi
lLi
abi
l
i
t
yofaper
son
gui
l
t
y off
el
ony.
- Ev
er
y pe
r
son cr
i
mi
nal
l
y
l
i
abl
ef
oraf
el
onyi
sal
soci
vi
l
l
yl
i
abl
e.
Ar
t
. 108. Obl
i
gat
i
on t
o make
r
es
t
or
at
i
on, r
e
par
at
i
on f
or damages,
i
ndemni
ficat
i
on f
orc
onsequent
i
aldamages
and act
i
on t
o demand t
he same -Upon
whom i
tdev
ol
v
es.-Theobl
i
g
at
i
on t
omake
r
es
t
or
at
i
on orr
epar
at
i
on f
ordamagesand
i
ndemni
ficat
i
on f
orc
onsequent
i
aldamages
de
vol
v
es upon t
he hei
r
s of t
he per
son
l
i
abl
e.
The act
i
on t
o de
mand r
e
s
t
or
at
i
on,
r
epar
at
i
on, and i
ndemni
ficat
i
on l
i
ke
wi
se
descends t
o t
he hei
r
s of t
he per
s
on
i
nj
ur
ed.(
Revi
sedPenalCode.
)
Ar
t
.89. How cr
i
mi
nall
i
abi
l
i
t
yi
s
t
ot
al
l
yext
i
ngui
shed.-Cr
i
mi
nall
i
abi
l
i
t
yi
s
t
ot
al
l
ye
xt
i
ngui
shed:
1. Byt
hede
at
h oft
hec
onvi
ct
,as
t
o t
he per
s
onal penal
t
i
es; and as t
o
mar
r
i
age of t
he offende
r
wi
t
h t
he offended par
t
y
shal
l
ext
i
ngui
sh
t
he
cr
i
mi
nalact
i
on orr
emi
tt
he
penal
t
y al
r
eady i
mposed
upon hi
m.Thepr
ovi
s
i
onsof
t
hi
spar
agr
aph s
hal
lal
sobe
appl
i
cabl
e t
o t
he copr
i
nci
pal
s,accompl
i
ces and
accessor
i
es af
t
e
rt
hef
actof
t
he
abovement
i
oned
cr
i
mes.(
I
d.
)
Bal
ane: Cr
i
measasour
c
eofobl
i
gat
i
on.
Ther
e ar
e many cr
i
mes f
r
om w/c, ci
vi
l
l
i
abi
l
i
t
y ar
i
ses i
n t
hei
r commi
ssi
on, i
n
addi
t
i
on t
ot
he cr
i
mi
nalpenal
t
y at
t
ached
t
ot
he
m. Thi
sunder
l
i
nest
het
woaspect
s
i
n acr
i
me: one,asan offenseagai
ns
tt
he
s
t
at
e
,and t
wo as an offense agai
ns
tt
he
vi
ct
i
m. I
ti
si
nt
he l
at
t
erc
ase t
hatci
vi
l
l
i
abi
l
i
t
yi
sr
e
cov
er
abl
e.
Asf
arascr
i
mei
sconcer
ned,ci
vi
l
l
aw i
snotconcer
nedw/t
hepenall
i
abi
l
i
t
y
butonl
yw/t
heci
vi
ll
i
ab.
(
noti
nBavi
er
a'
sout
l
i
ne)
CHAPTER 2.
- NATURE AND EFFECTOF
OBLI
GATI
ONS
Ar
t
i
cl
es 1163 - 1168 i
nr
el
at
i
on t
o Ar
t
.
1156.
Bal
ane: Thr
eet
ypes ofobl
i
gat
i
ons
.
-(
1)
obl
i
gat
i
ont
ogi
ve;(
2)obl
i
gat
i
ont
odo;and
(
3)obl
i
gat
i
onnott
odo.
I
.Obl
i
gat
i
ont
ogi
ve
A.Speci
fict
hi
ng
B.Gener
i
ct
hi
ng
I
I
.Todo
I
I
I
. Not t
o do (
t
hi
si
ncl
udes al
l
negat
i
ve obl
i
gat
i
ons l
i
ke obl
i
gat
i
on nott
o
gi
v
e.
)
Ki
nds of per
f
or
mance.
- (
1) spec
i
fic
per
f
or
manc
e(
pe
r
f
or
manc
e by t
he debt
or
hi
msel
f
)
; (
2)
subs
t
i
t
ut
e per
f
or
manc
e
(
per
f
or
manceatt
hee
xpens
eoft
hedebt
or
)
;
(
3) equi
val
ent per
f
or
manc
e (
gr
ant of
damages.
)
Ar
t
i
cl
es 1163 -1166 cov
er obl
i
gat
i
on t
o
gi
v
e.
Thr
eeAccessor
yObl
i
g
at
i
ons
:
1. Ar
t
.1163.
- Tot
akecar
eoft
het
hi
ng
w/t
hedi
l
i
genceofagoodf
at
herofaf
ami
l
y
Ar
t
.1164. Thecr
edi
t
orhasar
i
ght
t
ot
hef
r
ui
t
soft
het
hi
ngf
r
om t
het
i
met
he
obl
i
gat
i
on t
o del
i
ver ar
i
ses. Howe
ver
,he
shal
lhave no r
e
alr
i
ghtoveri
tunt
i
lt
he
samehasbeendel
i
ver
edt
ohi
m.
Bal
ane: Fr
om t
he t
i
me t
he obl
i
gat
i
on
ar
i
ses,t
he cr
edi
t
or has a per
sonalr
i
ght
agai
nstt
hedebt
orast
ot
hef
r
ui
t
s. Buthe
has no r
ealr
i
ghtov
er t
hem unt
i
lact
ual
del
i
ver
y
. Real r
i
ght i
sar
i
ght w/c i
s
enf
or
ceabl
e agai
ns
tt
he whol
e wor
l
d. He
has onl
yt
he per
sonalr
i
ght agai
ns
tt
he
debt
orw/ r
eg
ar
dt
ot
heundel
i
ver
ed f
r
ui
t
s.
Thi
si
s bec.oft
he pr
i
nci
pl
e Non nudi
s
pac
t
i
s, sed t
r
adi
t
i
one, domi
ni
a r
er
um
t
r
ansf
er
ent
ur
.
"
(
I
t i
s not by me
r
e
agr
e
ement
,butby del
i
v
er
y
,i
s owne
r
shi
p
t
r
ansf
er
r
ed.
)Per
sonalr
i
ghtar
i
sesf
r
om t
he
t
i
me t
he obl
i
gat
i
on t
o del
i
v
er ar
i
ses
wher
e
ast
her
ealr
i
ghtdoesnotar
i
seunt
i
l
act
ualdel
i
v
er
y
.
Ar
t
i
cl
es1165-1167.
-Remedi
e
sAvai
l
abl
e
t
o t
he Cr
edi
t
or (
speci
fic per
f
or
mance,
subs
t
i
t
ut
e
per
f
or
mance,
equi
val
ent
per
f
or
mance.
)
A.I
nobl
i
g
at
i
onst
ogi
ve
1. Ade
t
e
r
mi
nat
et
hi
ng
a.Speci
ficpe
r
f
or
mance
b.Equi
val
entper
f
or
mance
unt
i
lact
ualdel
i
ver
y
.
2.Ar
t
.1164.
-T
ode
l
i
vert
hef
r
ui
t
st
ot
he
cr
edi
t
or(
f
r
ui
t
spr
oducedaf
t
erobl
i
gat
i
on t
o
del
i
verar
i
ses.
)
3. Ar
t
.1166.
-T
odel
i
veraccessi
onsand
accessor
i
es.
Ar
t
.1163. Ev
er
ype
r
son obl
i
ge
dt
o
gi
v
esome
t
hi
ngi
sal
soobl
i
gedt
ot
akecar
e
ofi
twi
t
ht
he pr
operdi
l
i
gence ofa good
f
at
he
r ofa f
ami
l
y
,unl
ess t
he l
aw or t
he
s
t
i
pul
at
i
on oft
hepar
t
i
esr
equi
r
esanot
he
r
s
t
andar
dofcar
e.
2.Agene
r
i
ct
hi
ng,al
lr
emedi
e
sar
e
avai
l
abl
e
B. I
n an obl
i
gat
i
on t
o do, make a
di
s
t
i
nct
i
on:
1. Obl
i
gat
i
on t
o do w/c i
s pur
el
y
per
sonal
,onl
y equi
val
e
ntper
f
or
mance i
s
avai
l
abl
e
2. Obl
i
gat
i
on t
o do w/c i
s not
per
sonal
a.subs
t
i
t
ut
eper
f
or
mance
b.equi
val
entpe
r
f
or
mance
Not
e t
hat i
n obl
i
gat
i
ons t
o do,
speci
ficper
f
or
mancei
snotav
ai
l
abl
e. The
r
easonf
ort
hi
si
st
hats
peci
ficper
f
or
mance
wi
l
lgi
ver
i
set
oi
nvol
unt
ar
ys
er
vi
t
ude.
C.Obl
i
gat
i
onnott
odo
1.subs
t
i
t
ut
epe
r
f
or
mance
2.equi
val
entpe
r
f
or
mance.
I
n al
lt
hese cases,t
he cr
edi
t
or has t
he
opt
i
on ofr
esol
ut
i
on or r
esci
ssi
on under
Ar
t
.1191. I
n addi
t
i
on,hecan al
so cl
ai
m
damat
e
s.
Ar
t
. 1165. When whati
st
o be
del
i
ver
ed i
s a de
t
er
mi
nat
e t
hi
ng, t
he
cr
edi
t
or
,i
n addi
t
i
on t
ot
he r
i
ghtgr
ant
e
d
hi
m by ar
t
i
cl
e 1170, may compel t
he
debt
or
kt
omaket
hedel
i
v
er
y
.
I
ft
he t
hi
ng i
si
nde
t
er
mi
nat
e or
gener
i
c,hemayaskt
hatt
heobl
i
gat
i
on be
compl
i
edwi
t
hatt
hee
xpenseoft
hedebt
or
.
I
f t
he obl
i
gor del
ays, or has
pr
omi
sed t
odel
i
vert
hes
amet
hi
ngt
ot
wo
ormor
eper
sonswhodonothavet
hes
ame
i
nt
e
r
e
st
,he shal
lbe r
esponsi
bl
ef
or any
f
or
t
ui
t
ous e
ventunt
i
lhe has effect
e
dt
he
del
i
ver
y
.
Ar
t
.1166. Theobl
i
gat
i
on t
ogi
vea
de
t
er
mi
nat
e t
hi
ng i
ncl
udes t
hat of
del
i
ver
i
ng i
t
s acce
ssi
ons and accessor
i
es,
e
ven t
hough t
he
y may not hav
e been
ment
i
oned.
Ar
t
.1167.I
faper
son obl
i
gedt
odo
some
t
hi
ngf
ai
l
st
odoi
t
,t
hes
ames
hal
lbe
e
xecut
e
dathi
scost
.
Thi
ssamer
ul
es
hal
lbeobser
vedi
f
hedoesi
ti
nc
ont
r
avent
i
on oft
het
enorof
t
he obl
i
gat
i
on. Fur
t
he
r
mor
e,i
t may be
decr
eedt
hatwhathasbeenpoor
l
ydonebe
undone.
Ar
t
. 1168. When t
he obl
i
gat
i
on
consi
st
si
n notdoi
ngand t
heobl
i
gordoes
whathasbeen f
or
bi
dden hi
m,i
tshal
lal
so
beundoneathi
se
xpens
e.
Ar
t
i
cl
es 1169 - 1174.
- I
r
r
egul
ar
i
t
y of
Pe
r
f
or
manc
e.
Bal
ane:
TwoCl
assesofI
r
r
egul
ar
i
t
yofPer
f
or
manc
e:
I
.At
t
r
i
but
abl
et
ot
hede
bt
or
A.Fr
aud
B.Negl
i
gence
C.Del
ay
I
I
.Notat
t
r
i
but
abl
et
ot
hede
bt
or
A.For
t
ui
t
ousev
ent
.
Ar
t
.1169. Thoseobl
i
ged t
odel
i
ver
ort
odosome
t
hi
ngi
nc
uri
n del
ayf
r
om t
he
t
i
met
heobl
i
geej
udi
ci
al
l
yorext
r
aj
udi
ci
al
l
y
demandsf
r
om t
he
mt
hef
ul
fil
l
mentoft
hei
r
obl
i
gat
i
on.
Howev
er
, t
he demand by t
he
cr
edi
t
or shal
lnot be necessar
yi
n or
de
r
t
hatdel
aymaye
xi
s
t
:
(
1)When t
heobl
i
gat
i
on ort
hel
aw
e
xpr
essl
ys
odecl
ar
e;
(
2)When f
r
om t
henat
ur
e and t
he
ci
r
cums
t
ancesoft
heobl
i
g
at
i
on i
tappe
ar
s
t
hatt
hedesi
gnat
i
on oft
het
i
mewhen t
he
t
hi
ngi
st
obedel
i
ver
edort
hes
er
vi
cei
st
o
be r
ende
r
e
d was a cont
r
ol
l
i
ng mot
i
v
ef
or
t
hees
t
abl
i
shmentoft
hecont
r
act
;
(
3) When demand woul
d be
usel
ess,aswhen t
heobl
i
gorhasr
ende
r
e
d
i
tbey
ondhi
spowe
rt
oper
f
or
m.
I
n r
eci
pr
ocal obl
i
gat
i
ons, nei
t
her
par
t
yi
ncur
si
n del
ayi
ft
heot
herdoesnot
compl
y or i
s not r
eady t
o compl
yi
na
pr
oper manner wi
t
h what i
si
ncumbent
upon hi
m.Fr
om t
he momentone oft
he
par
t
i
esf
ul
fil
l
shi
sobl
i
g
at
i
on,del
aybyt
he
ot
herbegi
ns.
Bal
ane:
Whe
n doesdel
ayse
ti
n?- Del
ayse
t
si
ni
n
t
hef
ol
l
owi
ngmanne
r
:
1.
For Reci
pr
ocal si
mul
t
aneous
obl
i
gat
i
ons.
- by t
he r
e
adi
ne
ss ofone of
t
hepar
t
i
es t
o per
f
or
m and hi
sl
e
t
t
i
ng t
he
ot
herpar
t
y know;and t
he ot
herpar
t
yi
s
Sot
t
o was supposed t
o make El
l
a'
s(
t
he
br
i
de)weddi
nggown. Feb.14 comes,no
gown was del
i
ver
ed. El
l
a ge
t
smar
r
i
ed i
n
bl
uej
eansandt
shi
r
t
.Fi
nal
l
y
,onFeb.15,
I
nno del
i
v
er
st
he gown. xxx El
l
a sues
I
nno f
orbr
eac
h. I
nno says t
her
ewasno
demand. I
n t
hi
s case, demand i
s not
necessar
yi
nor
dert
hatde
l
aymaye
xi
s
t
.
(
3)When demand woul
d be usel
ess,as
when t
he obl
i
gorhas r
ender
ed i
tbeyond
notr
eadyt
ocompl
yi
napr
opermannerw/
whati
si
ncumbentuponhi
m.
2. ForRec
i
pr
ocalobl
i
gat
i
onsw/car
enot
si
mul
t
aneous.
- Gen.Rul
e: Demand i
s
necessar
y(
Ar
t
. 1169, par
. 1.
) Thi
si
s
cal
l
edmor
asol
vendiexper
sona.
Except
i
on: When demand i
s not
necessar
y(
t
hee
xcept
i
onsar
ef
oundi
n Ar
t
.
1169,par
.2.
)Thi
si
scal
l
edmor
asol
vendi
exr
e
What ki
nd of de
mand i
s necessar
y?Judi
c
i
alore
xt
r
aj
udi
ci
al
Except
i
ons
:
(
1) When t
he obl
i
gat
i
on or t
he l
aw
expr
essl
y sodec
l
ar
e.
- when t
hec
ont
r
act
says t
hat w/o t
he necessi
t
y ofdemand,
def
aul
t se
t
si
n upon t
he f
ai
l
ur
e of t
he
obl
i
gor t
o per
f
or
m on due dat
e
. The
r
e
must be some
t
hi
ng i
nt
he cont
r
act w/c
e
xpl
i
ci
t
l
ys
t
at
e
st
hat t
he demand i
s not
necessar
yi
nor
dert
hatde
l
aymays
e
ti
n.
(
2) When f
r
om t
he nat
ur
e and t
he
c
i
r
c
ums
t
anc
es oft
he obl
i
gat
i
on i
tappear
s
t
hatt
hedesi
gnat
i
on oft
het
i
me when t
he
t
hi
ngi
st
obedel
i
ver
ed ort
heser
vi
c
ei
st
o
be r
ender
ed was a c
ont
r
ol
l
i
ng mot
i
ve f
or
t
hees
t
abl
i
shmentoft
hec
ont
r
ac
t
.
I
l
l
us
t
r
at
i
on: Bong Bayl
on i
s
ge
t
t
i
ng mar
r
i
ed i
n Val
ent
i
nes '
96. I
nno
hi
spo
wert
oper
f
or
m.
-Exampl
ei
st
hecase
ofChavezv
.Gonz
al
es
,i
nf
r
a.
BALANE CASES:
AGCAOI
LIVS.GSI
S [
165 S 1] - Ther
e
wast
he
n a pe
r
f
ect
e
d cont
r
actofsal
ebe
t
.
t
he par
t
i
es;t
her
e had been a mee
t
i
ng of
t
hemi
ndsupon t
hepur
c
hasebyAgcaoi
l
i
ofade
t
er
mi
nat
ehouseandl
oti
nt
heGSI
S
Housi
ng Pr
oj
ect at Nangka, Mar
i
ki
na,
Ri
z
al
, at a defini
t
e pr
i
ce payabl
e i
n
amor
t
i
z
at
i
onsatP31.
56permo.
,andf
r
om
t
hemomentt
hepar
t
i
esacqui
r
ed t
her
i
ght
t
or
e
ci
pr
ocal
l
y demand per
f
or
manc
e. I
t
was,t
obesur
e,t
hedut
yoft
heGSI
S,as
sel
l
er
,t
o de
l
i
ver t
he t
hi
ng sol
d i
n a
condi
t
i
on s
ui
t
abl
ef
ori
t
senj
oymentbyt
he
buy
er f
or t
he pur
pose cont
e
mpl
at
ed, i
n
ot
herwor
ds,t
ode
l
i
vert
hehousesubj
ectof
t
hecont
r
acti
n ar
easonabl
yl
i
vabl
es
t
at
e
.
Thi
si
tf
ai
l
edt
odo.
xxx
Si
nce GSI
S di
d not f
ul
fil
lt
hat
obl
i
gat
i
on,and wasnotwi
l
l
i
ng t
oputt
he
housei
n habi
t
abl
es
t
at
e,i
tcannoti
nv
oke
Agcoi
l
i
'
s s
uspensi
on of payment of
amor
t
i
z
at
i
on as cause t
o cancel t
he
cont
r
actbe
t
.t
hem. I
ti
s axi
omat
i
ct
hat
"
(
i
)
nr
eci
pr
ocalobl
i
gat
i
ons
,nei
t
her par
t
y
i
ncur
si
n del
ay i
ft
he ot
her does not
compl
y or i
s not r
eady t
o compl
yi
na
pr
oper manner wi
t
h what i
si
ncumbent
uponhi
m.
SSS VS. MOONWALK [
221 S 119] Requi
si
t
es i
n or
dert
hatdebt
or ma be i
n
def
aul
t
;Nec
essi
t
y ofdemand.
- T
o be i
n
def
aul
t"
xxxi
sdi
ffer
entf
r
om mer
edel
ayi
n
t
hegr
ammat
i
cals
ense,bec.i
ti
nvol
v
est
he
begi
nni
ng ofa speci
alc
ondi
t
i
on ors
t
at
us
w/c has i
t
s own pecul
i
ar e
ffect
s or
r
esul
t
s.
"I
n or
de
rt
hatt
hedebt
ormaybe
i
ndef
aul
ti
ti
snecessar
yt
hatt
hef
ol
l
owi
ng
r
equi
si
t
es be pr
esent
: (
1) t
hat t
he
obl
i
gat
i
on be demandabl
e and al
r
eady
l
i
qui
dat
ed; (
2) t
hat t
he debt
or del
ays
per
f
or
manc
e; and (
3) t
hat t
he c
r
edi
t
or
r
equi
r
es t
he per
f
or
manc
e j
udi
c
i
al
l
y or
ext
r
aj
udi
c
i
al
l
y. Def
aul
t ge
ner
al
l
y begi
ns
f
r
om t
hemomentt
hecr
edi
t
orde
mandst
he
per
f
or
mance oft
he obl
i
gat
i
on. Noweher
e
i
n t
hi
s case di
d i
t appear t
hat SSS
demanded f
r
om Moonwal
kt
hepaymentof
i
t
s mont
hl
y amor
t
i
z
at
i
on. Nei
t
he
r di
di
t
show t
hat pe
t
i
t
i
oner demanded t
he
payment oft
he s
t
i
pul
at
ed penal
t
y upon
t
he f
ai
l
ur
e of Moonwal
k t
o mee
t i
t
s
mont
hl
y amor
t
i
z
at
i
on.
What t
he
compl
ai
nti
t
sel
fshowedwast
hatSSSt
r
i
ed
t
o enf
or
ce t
he obl
i
gat
i
on some
t
hi
me i
n
Sept
,1977 by f
or
e
cl
osi
ng t
he r
e
ale
st
at
e
mor
t
gages e
xecut
e
d by Moonwal
ki
nf
av
or
ARRI
ETAVS.NARI
C [
10S79]- Onewho
assumesacont
r
act
ualobl
i
gat
i
on andf
ai
l
s
t
o per
f
or
m t
he same on account ofhi
s
i
nabi
l
i
t
y
t
o
mee
t c
er
t
ai
n
bank
r
equi
r
ement
swhi
c
hi
nabi
l
i
t
yhekne
w and
was awar
e ofwhen he ent
er
ed i
nt
ot
he
cont
r
act
,shoul
dbehel
dl
i
abl
ei
n damages
f
orbr
eac
hofcont
r
act
.
UnderAr
t
.1170,notonl
y debt
or
s
gui
l
t
y off
r
aud,negl
i
gence ordef
aul
tbut
al
soe
v
er
ydebt
or
,i
ng
ener
al
,whof
ai
l
st
he
per
f
or
manceofhi
sobl
i
g
at
i
on i
sbound t
o
i
ndemni
f
yf
or t
he l
osses and damages
causedt
he
r
e
by
.
Meani
ng ofphr
ase"
i
n any manner
c
ont
r
avene t
he t
enor
" of t
he obl
i
gat
i
on.
The phr
ase i
ncl
udes any i
l
l
i
ci
tt
ask w/c
i
mpai
r
st
hes
t
r
i
ctandf
ai
t
hf
ulf
ul
fil
l
mentof
t
he obl
i
g
at
i
on,or ev
er
y ki
nd ofdef
ect
i
ve
per
f
or
mance.
Bal
ane: Thi
sphr
asei
sa cat
c
hal
l
pr
ovi
si
on. Atwor
s
t
,i
ti
sasuper
flui
t
y
. At
bes
t
,t
her
ei
sasaf
e
t
yne
tj
usti
ncaset
he
r
e
i
s a cul
pabl
ei
r
r
egul
ar
i
t
y ofper
f
or
mance
w/ci
snotcover
ed byf
r
aud,negl
i
genc
eor
del
ay
.I
nt
hi
scase,t
heSC wasappar
ent
l
y
notsur
e as t
o whatc
at
egor
yt
he br
each
ofSSS. Butt
hi
sf
or
ecl
osur
edi
dnotpush
t
hr
ough upon Moonwal
k'
sr
eque
st
s and
pr
omi
sest
opayi
nf
ul
l
. Thene
xtdemand
f
or payment happened on Oct
. 1,1979
when SSS i
ssued a St
at
e
mentofAccount
t
oMoonwal
k. And i
n accor
dancew/sai
d
s
t
at
e
ment
,Moonwal
k pai
di
t
sl
oan i
nf
ul
l
.
Whati
scl
ear
,t
her
ef
or
e,i
st
hatMoonwal
k
was ne
v
er i
n def
aul
t bec. SSS nev
er
compel
l
edpe
r
f
or
manc
e.
Ar
t
. 1170. Those who i
n t
he
per
f
or
mance oft
hei
robl
i
gat
i
on ar
e gui
l
t
y
off
r
aud,negl
i
gence or del
ay
,and t
hose
who i
n any manne
rcont
r
av
ene t
he t
enor
t
her
eof
,ar
el
i
abl
ef
ordamages.
BALANE CASES:
f
el
l
.
Thi
s phr
ase i
s not r
eal
l
y an
i
ndependentgr
ound.
TELEFAST VS.CASTRO [
158 s445] - I
n
t
he case at bar
, pe
t
i
t
i
oner and pr
i
vat
e
r
espondentSofia C.Cr
ouc
he
nt
er
edi
nt
oa
cont
r
act whe
r
e
by
,f
or a f
ee, pe
t
i
t
i
one
r
under
t
ook t
o send sai
d pr
i
vat
e
r
espondent
'
s message ov
er
s
eas by
t
e
l
egr
am. Thi
s, pe
t
i
t
i
oner di
d not do,
despi
t
e per
f
or
mance by sai
d pvt
.r
esp.of
her obl
i
gat
i
on by payi
ng t
he r
equi
r
ed
c
har
g
es. Pe
t
i
t
i
onerwast
her
ef
or
egui
l
t
yof
cont
r
av
eni
ng i
t
sobl
i
gat
i
on t
o sai
d pr
i
v
at
e
r
espondentandi
st
husl
i
abl
ef
ordamages.
NPC VS.CA [
161 S 334] - NPC c
annot
esc
apel
i
abi
l
i
t
y bec
.i
t
snegl
i
genc
ewast
he
pr
oxi
mat
ec
ause oft
he l
oss and damage
even t
hough t
he t
yphoon was an ac
tof
God.
-I
ti
scl
earf
r
om t
heappel
l
at
ecour
t
'
s
deci
si
on t
hatbased on i
t
sfindi
ngsoff
act
andt
hatoft
het
r
i
alcour
t
'
s,pe
t
i
t
i
onerNPC
wasundoubt
edl
y negl
i
gentbec.i
topened
t
hespi
l
l
way gat
e
soft
he AngatDam onl
y
att
hehei
ghtoft
yphoon"
We
l
mi
ng"wheni
t
knew v
er
y wel
lt
hati
twas s
af
ert
o hav
e
opened t
hesamegr
adual
l
yand e
ar
l
i
er
,as
i
twasal
s
o undeni
abl
et
hatNPC knew of
t
hecomi
ng oft
het
yphoon atl
eas
t4days
bef
.i
tact
ual
l
ys
t
r
uc
k. And ev
en t
hough
t
het
yphoon wasanactofGodorwhatwe
maycal
lf
or
c
emaj
eur
e,NPC cannotescape
l
i
abi
l
i
t
y bec. i
t
s negl
i
gence was t
he
pr
oxi
mat
e cause oft
he l
oss and damage.
Aswehav
esai
di
nJuanNakpi
l& Sonsv
s.
CA,144SCRA596,
Thus,i
fupon t
he happeni
ng ofa
f
or
t
ui
t
ous e
vent or an actofGod,t
her
e
concur
s
a
cor
r
espondi
ng
f
r
aud,
negl
i
gence, del
ay or v
i
ol
at
i
on or
cont
r
av
ent
i
on i
n any manneroft
het
e
nor
oft
he obl
i
gat
i
on as pr
ovi
ded f
or i
n Ar
t
.
1170,w/cr
esul
t
si
n al
ossordamage,t
he
obl
i
gor cannot escape l
i
abi
l
i
t
y
.
The
pr
i
nci
pl
e embodi
ed i
n t
he act of God
doct
r
i
nest
r
i
ct
l
yr
equi
r
est
hatt
heac
tmus
t
be one oc
c
asi
oned exc
l
usi
vel
y by t
he
vi
ol
enc
eofnat
ur
eandhumanagenc
i
esar
e
t
o be exc
l
uded f
r
om c
r
eat
i
ng or ent
er
i
ng
i
nt
ot
he c
ause oft
he mi
sc
hi
ef
. When t
he
effect
, t
he cause of w/c i
s t
o be
consi
der
ed, i
sf
ound t
o be i
n par
tt
he
r
esul
foft
hepar
t
i
ci
pat
i
on ofman,whe
t
her
i
tbef
r
om act
i
vei
nt
er
vent
i
on ornegl
e
ct
,or
f
ai
l
ur
et
o act
,t
he whol
e occur
ence i
s
t
her
eby humani
z
ed, as i
t was, and
r
emov
ed f
r
om t
he r
ul
e
s appl
i
cabl
et
ot
he
act
sofGod. Thus,i
thasbe
en hel
dt
hat
when t
henegl
i
genc
e ofa per
son concur
s
w/anactofGodi
npr
oduci
ngal
oss,suc
h
per
son i
s not exempt f
r
om l
i
abi
l
i
t
y by
showi
ng t
hatt
he i
mmedi
at
ecause oft
he
he mus
t be f
r
ee f
r
om any pr
evi
ous
negl
i
genc
e ormi
sc
onduc
tby w/ct
he l
oss
ordamagemayhavebeenoc
c
asi
oned.
RCPIVS.RODRI
GUEZ [
182 S 889] Resp.Rodr
i
guez and RCPIent
e
r
ed i
nt
oa
cont
r
actwher
e
byf
oraf
eeRCPIunder
t
ook
t
o send t
he r
espondent
'
s message
over
seas.When,t
her
ef
or
e,r
e
sp.Rodr
i
guez
pai
d RCPIt
o del
i
verhi
smessageov
er
seas
by t
el
egr
am, RCPI obl
i
gat
ed i
t
sel
f t
o
t
r
ansmi
tt
he messages t
ot
he addr
essee.
Cl
ear
l
y
, RCPI r
ene
ged on i
t
s obl
i
g
at
i
on
wheni
tf
ai
l
edt
odel
i
vert
hemessagesort
o
i
nf
or
m t
hes
enderaboutt
henondel
i
v
er
y
,
t
husmaki
ngi
tl
i
abl
ef
ordamages.
Fr
aud
Bal
ane: I
si
tcor
r
ectt
osay t
hatf
r
aud i
n
Ar
t
. 1170 means decei
t or i
nsi
duous
machi
nat
i
ons? No.
LEGASPI OI
L VS. CA [
224 S 213] Defini
t
i
onofFr
aud.
-I
ngener
al
,f
r
audmay
bedefined ast
hev
ol
unt
ar
ye
xecut
i
on ofa
wr
ongf
ulact
,orwi
l
l
f
ulomi
s
si
on,knowi
ng
and i
nt
endi
ng t
he effect
s w/c nat
ur
al
l
y
and necessar
i
l
y ar
i
se f
r
om suc
h act or
omi
ssi
on;t
hef
r
audr
e
f
er
r
edt
oi
nAr
t
.1170
i
st
hedel
i
ber
at
eandi
nt
ent
i
onale
vasi
onof
t
he nor
malf
ul
fil
l
ment ofobl
i
gat
i
on;i
ti
s
di
s
t
i
ngui
shed f
r
om negl
i
gence by t
he
pr
esence of del
i
ber
at
e i
nt
ent
, w/c i
s
l
ac
ki
ngi
nt
hel
at
t
e
r
.
Bal
ane: Fr
aud as used i
n Ar
t
.1170 i
s
di
ffer
entf
r
om f
r
audasac
ausef
orvi
t
i
at
i
on
of consent i
n cont
r
act
s(
mor
e pr
oper
l
y
cal
l
ed decei
t w/c pr
ev
ent
st
he cont
r
act
f
r
om ar
i
si
ng;t
hi
si
sf
ound i
n Ar
t
.1380,e
t
seq.
)
damagewast
heactofGod. Tobeexempt
f
r
om l
i
abi
l
i
t
yf
orl
ossbec
.ofan ac
tofGod,
Effect
sofFr
aud:
1. Cr
edi
t
or may i
nsi
s
t on per
f
or
mance,
speci
ficorsubs
t
i
t
ut
e(
Ar
t
.1233.
)
Q:Whati
sasynonym f
orf
r
audasus
edi
n
Ar
t
.1170?
A:Mal
i
ce.
ni
nedaysaf
t
e
rr
ec
ei
pfoft
hec
r
e
di
tmemo.
Cl
ear
l
y
,pe
t
i
t
i
onerbank was r
e
mi
ss i
ni
t
s
dut
y and obl
i
gat
i
on t
ot
r
eat pvt
.r
esp'
s
account w/ t
he hi
ghes
t degr
ee of car
e,
2. Cr
edi
t
or may r
esol
ve/ r
e
sci
nd (
Ar
t
.
1191.
)
3.Damage
si
ne
i
t
herc
ase(
Ar
t
.1170.
)
Del
ay i
s t
he nonf
ul
fil
l
ment of t
he
obl
i
gat
i
onw/r
e
spectt
ot
i
me.
consi
der
i
ng t
he fiduci
ar
y nat
ur
e of t
he
r
el
at
i
onshi
p.Thebanki
sunderobl
i
gat
i
on
t
ot
r
eatt
heaccount
s ofi
t
sdeposi
t
or
sw/
me
t
i
cul
ous car
e, whe
t
her suc
h account
consi
st
sonl
yofaf
e
w hundr
edpesosorof
mi
l
l
i
ons.I
tmus
tbe
art
hebl
amef
orf
ai
l
i
ng
t
o di
scover t
he mi
s
t
ake of i
t
s empl
oy
ee
despi
t
e t
he es
t
abl
i
shed
pr
ocedur
e
r
equi
r
i
ng bank paper
st
o pass t
hr
ough
bank per
s
onnelwhosedut
yi
ti
st
oc
heck
andcount
e
r
chec
kt
hem f
orpossi
bl
eer
r
or
s.
Respons
i
bi
l
i
t
y ar
i
si
ng f
r
om negl
i
gence i
n
t
heper
f
or
manc
eofever
yki
ndofobl
i
gat
i
on
i
sde
mandabl
e
.xxx
Ki
ndsofDel
ay:
I
I
.Di
l
i
gencer
equi
r
e
d
1. Mor
a Sol
vendi - del
ay i
n t
he
per
f
or
mance(
ont
hepar
toft
hedebt
or
)
;
2. Mor
a Ac
c
i
pi
endi - del
ay i
n t
he
accept
ance(
ont
hepar
toft
hec
r
e
di
t
or
)
;
3.Compensat
i
onMor
ae-mut
ualdel
ay
Bal
ane:
Negl
i
gence
Negl
i
gence i
st
he absence of some
t
hi
ng
t
hatshoul
dbet
her
e
-duedi
l
i
gence.
Del
ay
Ar
t
. 1171. Reponsi
bi
l
i
t
y ar
i
si
ng
f
r
om f
r
aud i
s demandabl
e i
n al
l
obl
i
gat
i
ons. Any wai
v
er ofan act
i
on f
or
f
ut
ur
ef
r
audi
svoi
d.
Ar
t
.1172. Responsi
bi
l
i
t
y ar
i
si
ng
f
r
om negl
i
gence i
n t
he per
f
or
mance of
e
ver
y ki
nd of obl
i
gat
i
on i
s al
so
demandabl
e,butsuch l
i
abi
l
i
t
yshal
l may
be r
e
gul
at
e
d by t
he cour
t
s
,accor
di
ng t
o
t
heci
r
cums
t
ances.
Negl
i
gence i
s cover
ed by Ar
t
i
cl
es 1170,
1172and1173
Ar
t
.1173. Thef
aul
tornegl
i
gence
oft
heobl
i
gorconsi
s
t
si
nt
heomi
ssi
on of
t
hat di
l
i
gence whi
ch i
sr
equi
r
ed by t
he
nat
ur
e oft
he obl
i
gat
i
on and cor
r
esponds
wi
t
ht
heci
r
cums
t
ancesoft
heper
sons
,of
t
het
i
meandoft
hepl
ace.Whennegl
i
genc
e
showsbad f
ai
t
h,t
hepr
ovi
si
onsofar
t
i
cl
es
1171and2201,par
agr
aph2,shal
lappl
y
.
BALANE CASE:
Ar
t
.
1171.
Respons
i
bi
l
i
t
y ar
i
si
ng f
r
om
f
r
aud i
s demandabl
ei
n al
l
obl
i
gat
i
ons. Any wai
ver of
an act
i
on f
orf
ut
ur
ef
r
aud i
s
v
oi
d.
METROBANK VS.CA [
237 S 761] - As
bor
neoutbyt
her
ecor
ds,t
hedi
shonor
i
ng
oft
he r
esp.
'
s che
cks c
ommi
t
t
ed t
hr
ough
negl
i
gence by t
he pe
t
i
t
i
oner bank on
4/6/82 wasr
ect
i
fied onl
y on 4/15/82 or
Ar
t
.2201.xxx
(
2) I
nc
ont
r
act
sand
quasi
cont
r
act
s,
t
he
damages f
or whi
ch t
he
obl
i
gor who act
ed i
n good
f
ai
t
hi
sl
i
abl
eshal
lbet
hose
t
hat ar
et
he nat
ur
al and
pr
obabl
e consequences of
t
hebr
e
achoft
heobl
i
gat
i
on,
and whi
ch t
he par
t
i
es hav
e
f
or
eseen or c
oul
d have
r
easonabl
yf
or
eseen at t
he
t
i
me t
he obl
i
gat
i
on was
cons
t
i
t
ut
ed.
I
n caseoff
r
aud,bad
f
ai
t
h, mal
i
ce or want
on
at
t
i
t
ude,t
heobl
i
gorshal
lbe
r
esponsi
bl
ef
oral
ldamages
whi
c
h may be r
easonabl
y
at
t
r
i
but
ed t
o t
he nonper
f
or
mance
of
t
he
obl
i
gat
i
on.
Bal
ane:
JI
MENEZ VS.CI
TY OF MANI
LA [
150 S
510] - Ci
t
y ofMl
a.f
ai
l
ed t
oexer
c
i
se t
he
di
l
i
genc
eofagoodf
at
herofaf
ami
l
yw/ci
s
a def
ense i
n quasi
del
i
c
t
.
- As a de
f
ense
agai
nst l
i
abi
l
i
t
y on t
he basi
s of quasi
del
i
ct
, one must have exer
ci
s
ed t
he
di
l
i
genceofagoodf
at
herofaf
ami
l
y
.The
r
e
i
s no ar
gumentt
hati
ti
st
he dut
y oft
he
Ci
t
yofMl
a.t
oe
xer
ci
ser
easonabl
ec
ar
et
o
keept
hepubl
i
cmar
ke
tr
easonabl
ys
af
ef
or
peopl
e f
r
e
quent
i
ng t
he pl
ace f
or t
hei
r
mar
ke
t
i
ng needs.
Whi
l
e i
t may be
conceded t
hat t
he f
ul
fil
l
ment of such
dut
i
esi
se
xt
r
emel
ydi
fficul
tdur
i
ngs
t
or
ms
and floods,i
tmust
,howev
er
,beadmi
t
t
ed
t
hator
di
nar
ypr
ecaut
i
onscoul
dhav
ebeen
t
ake
ndur
i
nggoodwe
at
hert
omi
ni
mi
z
et
he
danger
s t
o l
i
f
e and l
i
mb under t
hose
di
fficul
tci
r
cums
t
ances. Fori
nst
ance,t
he
dr
ai
nage hol
e coul
d have been pl
ac
ed
undert
hes
t
al
l
si
ns
t
eadofon t
hepassage
Negl
i
gence i
st
he absence of some
t
hi
ng
t
hatshoul
dbet
her
e
-di
l
i
gence.
Measur
eofDueDi
l
i
gence.
- The
r
ear
et
wo
gui
des:
(
1)
Di
l
i
gence demanded by
ci
r
cums
t
ancesofper
son,pl
aceandt
i
me
(
2)Car
er
e
qui
r
e
dofagoodf
at
he
rof
af
ami
l
y(
fict
i
onalbonuspat
erf
ami
l
i
aswho
wast
heembodi
mentofcar
e,caut
i
on and
pr
ot
ect
i
oni
nRomanl
aw.
)
I
ncommonl
aw,t
hedegr
eeofcar
er
e
qui
r
e
d
i
st
hedi
l
i
genc
eofapr
udentbusi
nessman.
Thi
si
sact
ual
l
yt
hesameast
hedi
l
i
gence
ofagoodf
at
herofaf
ami
l
y
.
Effect
sofNegl
i
gence:
1. Cr
edi
t
or may i
nsi
s
t on per
f
or
mance,
speci
ficorsubs
t
i
t
ut
e(
Ar
t
.1233.
)
2. Cr
edi
t
or may r
esol
ve/ r
e
sci
nd (
Ar
t
.
1191.
)
3.Damage
si
ne
i
t
herc
ase(
Ar
t
.1170.
)
BALANE CASE:
ways. Ev
en mor
ei
mpor
t
anti
st
he f
act
,
t
hatt
he Ci
t
y shoul
d hav
e seen t
oi
tt
hat
t
he openi
ngs we
r
e cover
ed. Sadl
y
,t
he
e
vi
dence i
ndi
cat
e
s t
hat l
ong bef
or
e
pe
t
i
t
i
oner f
el
li
nt
ot
he openi
ng, i
t was
al
r
eady uncov
er
ed,and 5 mos.af
t
er t
he
i
nci
denthappene
d,t
he openi
ng was s
t
i
l
l
uncover
ed. Mor
eov
er
, whi
l
e t
her
e ar
e
findi
ngs t
hat dur
i
ng floods t
he v
endor
s
r
emov
et
hei
r
on gr
i
l
l
st
ohas
t
en t
heflow of
wat
e
r
,t
he
r
e i
s no s
howi
ng t
hat such
pr
act
i
ce has e
ver been pr
ohi
bi
t
e
d,muc
h
l
esspenal
i
z
ed byt
heCi
t
yofMl
a. Nei
t
her
was i
t shown t
hat any si
gn had been
pl
aced t
her
e
about
st
o war
n passer
sby of
t
hei
mpendi
ngdanger
.
Ext
r
aor
di
nar
ydi
l
i
gencer
equi
r
ed
A.I
nnke
eper
Ar
t
. 2000.
The r
e
sponsi
bi
l
i
t
y
r
ef
er
r
ed t
oi
nt
he t
wo pr
ecedi
ng ar
t
i
cl
es
shal
li
ncl
ude t
hel
oss of
,ori
nj
ur
yt
ot
he
per
sonalpr
oper
t
yoft
hegues
t
scaused by
t
hes
er
vant
sore
mpl
oyeesoft
hekeeper
sof
hot
e
l
sori
nnsaswel
lasbys
t
r
anger
s;but
nott
hatwhi
c
hmaypr
oceedf
r
om anyf
or
ce
maj
eur
e. The f
act t
hat t
r
avel
l
er
s ar
e
cons
t
r
ai
ned t
or
el
yon t
hevi
gi
l
anceoft
he
keeper of t
he hot
e
l
ss or i
nns shal
l be
consi
der
ed i
n de
t
e
r
mi
ni
ng t
he degr
ee of
car
er
e
qui
r
edofhi
m.
Ar
t
.2001. The actofa t
hi
e
for
r
obber
,who has e
nt
er
e
dt
he hot
e
li
s not
deemed f
or
ce maj
eur
e,unl
ess i
ti
s done
wi
t
h t
he us
e of ar
ms or t
hr
ough an
i
r
r
esi
st
i
bl
ef
or
ce.
B.CommonCar
r
i
er
s
Ar
t
.1733. Common c
ar
r
i
er
s,f
r
om
t
he nat
ur
e of t
he
i
r busi
ness and f
or
r
easons of publ
i
c pol
i
cy
, ar
e bound t
o
obser
v
e ext
r
aor
di
nar
y di
l
i
gence i
n t
he
vi
gi
l
anceovert
hegoodsandf
ort
hes
af
e
t
y
of t
he passenger
st
r
anspor
t
e
d by t
he
m,
accor
di
ngt
oal
lt
hec
i
r
c
ums
t
ancesofeac
h
case.
Such ext
r
aor
di
nar
ydi
l
i
gencei
nt
he
vi
gi
l
ance ov
er t
he goods i
s f
ur
t
her
e
xpr
essed i
n ar
t
i
cl
es 1734, 1735, and
1745, Nos. 5, 6, and 7, whi
l
e t
he
e
xt
r
aor
di
nar
y di
l
i
gence f
or t
he saf
e
t
y of
passenger
si
sf
ur
t
herse
tf
or
t
hi
n ar
t
i
cl
es
1755and1756.
Ar
t
.1734. Common car
r
i
e
r
s ar
e
r
esponsi
bl
ef
or t
he l
oss,dest
r
uct
i
on,or
(
4)The char
act
e
r oft
he goods or
def
ect
si
nt
hepacki
ngori
nt
hecont
ai
ner
s;
(
5)Or
deroractofcompe
t
e
ntpubl
i
c
aut
hor
i
t
y
.
C.LesseeofAgr
i
cul
t
ur
all
and
Ar
t
.1680.Thel
esseeshal
lhav
eno
r
i
ghtt
oar
educt
i
on oft
her
entonaccount
oft
he s
t
er
i
l
i
t
y oft
he l
and l
e
ased,or by
r
easonoft
hel
ossoff
r
ui
t
sduet
oor
di
nar
y
f
or
t
ui
t
ous event
s;butheshal
lhav
e such
r
i
ghti
nc
aseofl
ossofmor
et
han onehal
f
of t
he f
r
ui
t
st
hr
ough ext
r
aor
di
nar
y and
unf
or
eseen f
or
t
ui
t
ous e
v
ent
s,sav
e al
ways
when t
her
ei
sas
peci
fics
t
i
pul
at
i
on t
ot
he
cont
r
ar
y
.
Ext
r
aor
di
nar
yf
or
t
ui
t
ousev
ent
sar
e
under
s
t
ood t
o be: fir
e, war
, pest
i
l
ence,
unusual flood, l
ocus
t
s, ear
t
hquake, or
ot
her
s whi
c
h ar
e uncommon,and whi
c
h
t
he cont
r
act
i
ng par
t
i
es coul
d not hav
e
r
easonabl
yf
or
eseen.
I
I
I
.Lossduet
oFor
t
ui
t
ousEv
ent
s
Ar
t
. 1174.
Except i
n cases
e
xpr
essl
y speci
fied by l
aw, or when i
t
ot
her
wi
sedecl
ar
ed bys
t
i
pul
at
i
on,orwhen
t
he nat
ur
e oft
he obl
i
gat
i
on r
equi
r
es t
he
assumpt
i
on of r
i
sk, no per
son shal
l be
r
esponsi
bl
ef
ort
hose ev
ent
s whi
ch c
oul
d
notbef
or
eseen,orwhi
c
h,
t
houghf
or
eseen,
wer
ei
nevi
t
abl
e.
C.Obl
i
gat
i
onswi
t
haper
i
od
3. As t
ot
i
me.
- A per
i
od al
ways r
e
f
ert
o
t
hef
ut
ur
e,whi
l
eacondi
t
i
on mayr
e
f
ert
oa
pas
tev
entunknownt
ot
hepar
t
i
es.
1.Ki
nds
Ar
t
.1193. Obl
i
gat
i
ons f
orwhose
f
ul
fil
l
ment a day cer
t
ai
n has been fixed,
shal
lbe demandabl
e onl
y when t
hatday
comes.
Obl
i
gat
i
ons wi
t
h a r
esol
ut
or
y
per
i
od t
ake e
ffectatonce,butt
er
mi
nat
e
uponar
r
i
valoft
hedaycer
t
ai
n.
A day cer
t
ai
ni
s under
s
t
ood t
o be
t
hat whi
ch mus
t ne
cessar
i
l
y come,
al
t
houghi
tmaynotbeknownwhe
n.
I
f t
he uncer
t
ai
nt
y consi
st
s i
n
whe
t
he
rt
he day wi
l
l come or not
,t
he
obl
i
gat
i
on i
s condi
t
i
onal
,and i
tshal
lbe
r
egul
at
e
d by t
he r
ul
es of t
he pr
ecedi
ng
Sect
i
on.
4. Ast
owi
l
lofdebt
or
.
- Ac
ondi
t
i
on w/c
depends e
xcl
usi
vel
y on t
he wi
l
l of t
he
debt
orannul
st
heobl
i
gat
i
on,butaper
i
od
l
ef
tt
ot
he de
bt
or
'
s wi
l
lme
r
e
l
y empower
s
t
hecour
tt
ofixsuc
hper
i
od.
Bal
ane:
I
n a(
sus
pensi
ve)t
e
r
m,t
heobl
i
gat
i
on has
al
r
eady ar
i
sen e
xcept t
hat i
ti
s not ye
t
demandabl
e.
Ar
t
. 1194.
I
n case of l
oss,
de
t
er
i
or
at
i
on ori
mpr
ov
ementoft
het
hi
ng
bef
or
et
he ar
r
i
valoft
he day cer
t
ai
n,t
he
r
ul
esi
nar
t
i
cl
e1189shal
lbeobser
ved.
I
VTol
ent
i
no:
ConceptofTe
r
m.
- At
er
m orper
i
od i
sa
spaceoft
i
mew/c,e
xer
t
i
ngani
nfluenc
eon
obl
i
gat
i
onsasaconsequenc
eofaj
ur
i
di
cal
act
, sus
pends t
hei
r demandabi
l
i
t
y or
de
t
er
mi
nes
t
he
i
r
ext
i
ngui
shement
.
(
Manr
esa.
)
Di
s
t
i
ngui
shedf
r
om Condi
t
i
on:
1. As t
of
ul
fil
l
ment
.
- A condi
t
i
on i
s an
uncer
t
ai
n ev
ent
,whi
l
eat
er
m i
san ev
ent
t
hatmus
tnecessar
i
l
ycome,whe
t
heron a
dat
eknown bef
or
ehand orata t
i
mew/c
cannotbepr
ede
t
e
r
mi
ne
d.
2. As t
oi
nfluenc
e on t
he obl
i
gat
i
on.
Whi
l
e a condi
t
i
on gi
v
es r
i
se t
o an
obl
i
gat
i
on or e
xt
i
ngui
shes one al
r
eady
e
xi
si
t
i
ng,a per
i
od hasno effectupon t
he
e
xi
s
t
ence of obl
i
gat
i
ons, but onl
yt
hei
r
demandabi
l
i
t
y or per
f
or
manc
e. Bec. of
t
hi
sdi
ffer
ence,aper
i
oddoesnotcar
r
yw/
i
t
, e
xcept whe
n t
he
r
e i
s a speci
al
agr
e
ement
,anyr
e
t
r
oact
i
v
eeffect
.
Ar
t
.1189. When t
he condi
t
i
ons
hav
e been i
mposed wi
t
ht
he i
nt
ent
i
on of
suspendi
ngt
heefficacyofanobl
i
gat
i
on t
o
gi
v
e,t
hef
ol
l
owi
ngr
ul
ess
hal
lbeobser
v
ed
i
n case of t
he i
mpr
ovement
,l
oss or
de
t
er
i
or
at
i
on of t
he t
hi
ng dur
i
ng t
he
pendencyoft
hecondi
t
i
on.
(
1)I
ft
he t
hi
ng i
sl
os
twi
t
houtt
he
f
aul
toft
hedebt
or
,t
heobl
i
gat
i
on s
hal
lbe
e
xt
i
ngui
shed;
(
2)I
ft
het
hi
ng i
sl
ostt
hr
ough t
he
f
aul
toft
hedebt
or
,heshal
lbe obl
i
ged t
o
pay damages
;i
ti
s under
s
t
ood t
hat t
he
t
hi
ngi
sl
ostwhen i
tpe
r
i
s
hes,orgoe
sout
ofcommer
ce,ordi
sappear
si
ns
uch away
t
hati
t
se
xi
s
t
e
nc
ei
sunknown ori
tcannot
ber
ecover
ed;
(
3) When t
he t
hi
ng de
t
er
i
or
at
es
wi
t
hout t
he f
aul
t of t
he debt
or
,t
he
i
mpai
r
menti
st
obebor
nebyt
hecr
edi
t
or
;
(
4) I
fi
t de
t
e
r
i
or
at
es t
hr
ough t
he
f
aul
toft
hedebt
or
,t
hec
r
edi
t
ormayc
hoose
be
t
ween t
he r
esci
s
si
on oft
he obl
i
gat
i
on
and i
t
sf
ul
fil
l
ment
, wi
t
h i
ndemi
ni
t
yf
or
damagesi
ne
i
t
hercase:
(
5)I
ft
he t
hi
ng i
si
mpr
ov
ed by i
t
s
nat
ur
e,orbyt
i
me,t
hei
mpr
ov
ementshal
l
i
nur
et
ot
hebe
nefitoft
hecr
edi
t
or
;
(
6)I
fi
ti
si
mpr
ov
ed att
heexpense
oft
hedebt
or
,hes
hal
lhav
eno ot
he
rr
i
ght
t
hant
hatgr
ant
e
dt
ot
heusuf
r
uct
uar
y
.
Bal
ane:The
r
ear
et
hr
eer
equi
si
t
esi
nor
der
f
orAr
t
.1189t
oappl
y1. Ther
ei
sl
oss,de
t
e
r
i
or
at
i
on or
del
ay
2. The
r
ei
san obl
i
gat
i
on t
odel
i
ver
a de
t
er
mi
nat
et
hi
ng (
on t
he par
t oft
he
debt
or
)
3. Ther
ei
sl
oss,de
t
e
r
i
or
at
i
on or
i
mpr
ov
ementbe
f
or
et
he happeni
ng oft
he
condi
t
i
on.
4.Thecondi
t
i
onhappens.
Ri
ght
sofausuf
r
uc
t
uar
y
Ar
t
. 579.
The
usuf
r
uct
uar
y may make on
t
he pr
oper
t
y hel
d i
n
usuf
r
uct
s
uch
usef
ul
i
mpr
ov
ement
s or expenses
f
ormer
epl
eas
ur
eashemay
deem pr
oper
, pr
ovi
ded he
does not al
t
e
ri
t
sf
or
m or
subs
t
ance; but he shal
l
hav
e no r
i
ght t
o be
i
ndemni
fied t
her
ef
or
. He
may
,howe
ver
,r
emove suc
h
i
mpr
ov
ement
s
,shoul
di
tbe
possi
bl
et
o do so wi
t
hout
damaget
ot
hepr
oper
t
y
.
(
noti
nBavi
er
a'
sout
l
i
ne)
Ar
t
. 1195. Anyt
hi
ng pai
d or
del
i
ver
ed bef
or
et
he ar
r
i
valoft
he pe
r
i
od,
t
heobl
i
gorbei
ngunawar
eoft
hepe
r
i
odor
bel
i
evi
ng t
hatt
he obl
i
gat
i
on has become
due and demandabl
e,may be r
ecov
er
e
d,
wi
t
ht
hef
r
ui
t
sandi
nt
er
es
t
s.
Bal
ane: Mi
st
aken Pr
emat
ur
e Del
i
ver
y
.
Thi
s ar
t
i
cl
e assumes 2 t
hi
ngs: (
1) t
he
del
i
ver
y was by mi
st
ake;(
2) t
he mi
st
ake
wasdi
scover
edbef
.t
het
er
m ar
r
i
v
es
.
Bot
ht
het
hi
ngsand t
hef
r
ui
t
scan
ber
ecover
ed.
I
ft
het
er
m hasal
r
eadyar
r
i
v
ed,t
he
ques
t
i
on i
smootand academi
c. Butcan
her
ecov
ert
hef
r
ui
t
spr
oduced dur
i
ng t
he
meant
i
me? I
tdependson whatschoolof
t
houghtyouf
ol
l
ow:
1. Accor
di
ng t
o one school of
t
hought
,t
hede
bt
ori
sent
i
t
l
edt
ot
hef
r
ui
t
s
pr
oducedi
nt
hemeant
i
me(
Tol
ent
i
no.
)
2. Accor
di
ngt
oanot
hers
chool of
t
hought
,al
lt
hef
r
ui
t
sr
e
cei
v
ed dur
i
ng t
he
pendencyoft
het
e
r
m bel
ongt
ot
hecr
edi
t
or
(
Cagui
oa.
)
Whe
n f
r
ui
t
s & i
nt
e
r
e
st
s cannot be
r
ecov
er
e
d not
wi
t
hst
andi
ng pr
e
mat
ur
e
del
i
ver
y:
1. When t
heobl
i
gat
i
on i
sr
eci
pr
ocaland
t
her
ehasbeen pr
emat
ur
eper
f
or
manc
e(
by
bot
hpar
t
i
es)
;
2. Whe
nt
he obl
i
gat
i
on i
sa l
oan i
n w/c
t
hedebt
ori
sboundt
opayi
nt
e
r
e
st
;
3. When t
he per
i
od i
sf
ort
he c
r
e
di
t
or
'
s
e
xcl
usi
vebenefit
;
4. When t
hedebt
ori
sawar
eoft
heper
i
od
andpaysanyway
.
2.Pr
esumedf
orwhosebe
nefit
Ar
t
. 1196.
Whenev
er i
n an
obl
i
gat
i
on a per
i
od i
s desi
gnat
ed, i
ti
s
pr
esumed t
ohav
ebeen e
s
t
abl
i
shedf
ort
he
benefitofbot
ht
hec
r
edi
t
orandt
hedebt
or
,
unl
essf
r
om t
het
e
noroft
hesameorot
her
ci
r
cums
t
ances i
tshoul
d appear t
hatt
he
per
i
odhasbeenes
t
abl
i
shedi
nf
avorofone
oroft
heot
he
r
.
Bal
ane: Gener
al r
ul
e: I
f a pe
r
i
od i
s
at
t
ac
hedi
nanobl
i
gat
i
on,t
hepr
esumpt
i
on
i
st
hati
ti
sf
ort
hebenefitofbot
h par
t
i
es.
The consequence i
s t
hat t
he cr
edi
t
or
cannotc
ompelt
hepe
r
f
or
mancebe
f
or
et
he
ar
r
i
val of t
he t
er
m; t
he debt
or cannot
compelaccept
anc
e bef
.t
he ar
r
i
valoft
he
t
e
r
m.
I
ft
he t
e
r
m i
s f
or t
he benefit of t
he
cr
edi
t
or
.
- The cr
edi
t
or can de
mand
per
f
or
mance anyt
i
me; but t
he debt
or
cannoti
nsi
stonpaymentbef
.t
heper
i
od.
I
ft
het
er
mi
sf
ort
hebenefitoft
hedebt
or
.
The cr
e
di
t
orcannotde
mand pe
r
f
or
mance
anyt
i
me; but t
he debt
or can i
nsi
s
t on
per
f
or
manceanyt
i
me.
I
l
l
us
t
r
at
i
ons
: "
I pr
omi
se t
o pay
wi
t
hi
n 60 days.
" Thi
si
sa t
er
m f
ort
he
benefitoft
hedebt
or
.
"
Ipr
omi
set
o payCl
ar
at
hes
um of
P100,
000 on or bef
or
e Oct
. 31, 1996.
"
Thi
si
sat
er
mf
ort
hebenefitoft
hede
bt
or
.
3.Whenpe
r
i
odi
sfixed
Ar
t
.1197. I
ft
he obl
i
gat
i
on does
notfix a per
i
od,butf
r
om i
t
s nat
ur
e and
t
heci
r
cums
t
ancesi
tcanbei
nf
er
r
edt
hata
per
i
od was i
nt
ended,t
he cour
t
s may fix
t
hedur
at
i
ont
he
r
e
of
.
The cour
t
s shal
l al
so fix t
he
dur
at
i
on oft
he per
i
od when i
t depends
upont
hewi
l
loft
hedebt
or
.
I
n e
v
er
y case, t
he cour
t
s shal
l
de
t
er
mi
ne s
uch per
i
od as may undert
he
ci
r
cums
t
ances hav
e been pr
obabl
y
cont
e
mpl
at
e
d byt
hepar
t
i
es.Onc
efixed by
t
hecour
t
s
,t
heper
i
od cannotbechanged
byt
hem.
Bal
ane: Caseswher
et
heCour
t
smayfixa
per
i
od.
1.Ar
t
.1197,par
.1
Ar
t
.1197. I
ft
he obl
i
gat
i
on does
notfix a per
i
od,butf
r
om i
t
s nat
ur
e and
t
heci
r
cums
t
ancesi
tcanbei
nf
er
r
edt
hata
per
i
od was i
nt
ended,t
he cour
t
s may fix
t
hedur
at
i
ont
he
r
e
of
.
xxx
Except
i
ons
: (
a)Ar
t
.1682
Ar
t
i
cl
e 1682. The l
easeofa pi
ece
ofr
ur
all
and,whe
ni
t
s dur
at
i
on has not
been fixed, i
s under
s
t
ood t
o have been
made f
or al
lt
he t
i
me necessar
yf
or t
he
gat
her
i
ng oft
he f
r
ui
t
s whi
c
ht
he whol
e
es
t
at
el
eased may yi
el
di
n one year
,or
whi
c
hi
tmayyi
el
d once,al
t
hough t
wo or
mor
ey
ear
s may hav
et
o el
apse f
or t
he
pur
pose.
Ar
t
.1687,fir
s
t
sent
ence
Ar
t
i
cl
e 1687. I
ft
heper
i
od f
ort
he
l
easehasnotbeen fixed,i
ti
sunder
s
t
ood
t
obef
r
om yeart
oyear
,i
ft
her
entagr
eed
upon i
sannual
;f
r
om mont
ht
omont
h,i
fi
t
i
smont
hl
y;f
r
om week t
owe
ek,i
ft
her
ent
i
sweekl
y;and f
r
om dayt
oday
,i
ft
her
ent
i
st
obepai
ddai
l
y
.
xxx
(
b) Ar
t
. 1606 i
n
pact
oder
e
t
r
os
al
ewher
et
heper
i
od i
snot
speci
fiedbyt
hepar
t
i
es
Ar
t
.1606. Ther
i
ghtr
ef
e
r
r
e
dt
oi
n
ar
t
i
cl
e 1601 (
t
he r
i
ght of convent
i
onal
r
edempt
i
on on t
he par
toft
he v
endor a
r
et
r
o)
,i
n t
he absence of an e
xpr
ess
agr
e
ement
,shal
ll
as
tf
oury
ear
sf
r
om t
he
dat
eoft
hecont
r
ac
t
.
xxx
(
c)
cont
r
act of
ser
vi
cesf
oran i
ndefini
t
et
e
r
m(
bec.fixi
ng
ofa per
i
od by t
he cour
t
s may amountt
o
i
nv
ol
unt
ar
yser
vi
t
ude)
2.Ar
t
.1197,par
.2
Ar
t
.1197.xxx
The cour
t
s shal
l al
so fix t
he
dur
at
i
on oft
he per
i
od when i
t depends
upont
hewi
l
loft
hedebt
or
.
3.Ar
t
.1191,par
.3
Ar
t
.1191.xxx
xxx
The cour
t shal
l decr
ee t
he
r
esci
s
si
on cl
ai
med,unl
ess t
her
e be j
ust
causeaut
hor
i
z
i
ngt
hefixi
ngofaper
i
od.
xxx
When fixi
ng a per
i
od i
s mer
ef
or
mal
i
t
y.
Whe
r
et
he def
. vi
r
t
ual
l
y admi
t
t
e
d nonper
f
or
mancebyr
e
t
ur
ni
ngt
het
ypewr
i
t
erhe
was obl
i
ged t
or
epai
ri
n a nonwor
ki
ng
condi
t
i
on,w/ esse
nt
i
alpar
t
s,mi
ssi
ng,he
cannoti
nv
okeAr
t
.1197 oft
heNCC. The
t
i
me f
or compl
i
ance havi
ng e
vi
dent
l
y
e
xpi
r
ed, and t
her
e bei
ng a br
each of
cont
r
act by nonper
f
or
mance, i
t was
academi
c f
or t
he pl
t
ff. t
o hav
e fir
s
t
pe
t
i
t
i
oned t
hec
our
tf
ofixape
r
i
od f
ort
he
per
f
or
mance oft
he cont
r
act be
f
or
e fil
i
ng
hi
sc
ompl
ai
nti
nt
hi
sc
ase. Thefixi
ngofa
per
i
odwoul
dt
husbeamer
ef
or
mal
i
t
yand
woul
dser
venopur
poset
hant
ode
l
ay
.
4. Ar
t
.1687,second,t
hi
r
d and f
our
t
h
sent
ences
Ar
t
. 1687. xxx Howe
ver
, ev
en
t
hough a mont
hl
yr
ent i
s pai
d,and no
per
i
od f
or t
he l
eas
e has bee
n se
t
,t
he
cour
t
smayfixa l
ongert
e
r
mf
ort
hel
ease
af
t
e
rt
hel
esseehasoccupi
edt
hepr
emi
ses
f
orov
eroneyear
.I
ft
her
enti
sweekl
y
,t
he
cour
t
s may l
i
kewi
se de
t
e
r
mi
ne a l
onger
per
i
od af
t
er t
he l
essee has been i
n
possessi
on f
orov
ersi
xmont
hs
.I
n caseof
dai
l
yr
ent
,t
hecour
t
smayal
sofixal
onger
per
i
od af
t
e
rt
he l
essee has s
t
ayed i
nt
he
pl
acef
oroveronemont
h.
5.Ar
t
.1180
Ar
t
.1180. Whe
nt
hedebt
orbi
nds
hi
msel
ft
opaywhen hi
smeansper
mi
thi
m
t
odos
o,t
heobl
i
gat
i
on shal
lbedeemedt
o
be one wi
t
h a per
i
od, subj
ect t
o t
he
pr
ovi
si
onsofar
t
i
cl
e1197.
BALANE CASES:
CHAVEZ V.GONZALES [
32 SCRA 547] Wher
e obl
i
gat
i
on does not fix a per
i
od;
ENCARNACI
ON V.BALDOMAR [
77P470]
- Thecont
i
nuance and f
ul
fil
l
mentoft
he
cont
r
act of l
e
ase cannot be made t
o
depend sol
el
y and excl
usi
v
el
y upon t
he
f
r
eeanduncont
r
ol
l
edchoi
ceoft
hel
essees
be
t
.cont
i
nui
ng payi
ng t
her
ent
al
sornot
,
compl
e
t
e
l
ydepr
i
vi
ngt
heownerofal
lsayi
n
t
he mat
t
er
. For i
ft
hi
s we
r
e al
l
owed,so
l
ongasde
f
s.e
l
ect
e
dt
ocont
i
nuet
hel
ease
by cont
i
nui
ng t
he paymentoft
he r
ent
al
s
t
he owne
r woul
d nev
er be abl
e t
o
di
scont
i
nue i
t
; conv
er
s
el
y
, al
t
hough t
he
owners
houl
ddesi
r
et
hel
easet
ocont
i
nue,
t
he l
essees coul
d effect
i
vel
yt
hwar
t hi
s
pur
posei
ft
heyshoul
d pr
e
f
ert
ot
e
r
mi
nat
e
t
he cont
r
act by t
he si
mpl
e expedi
ent of
s
t
oppi
ngpaymentoft
her
ent
al
s. Thi
s,of
cour
se,i
spr
ohi
bi
t
e
dbyar
t
.1256,NCC.
ELEI
ZEUI V. LAWN TENNI
S CLUB [
2
P309] - The t
e
r
m of a l
ease whose
t
e
r
mi
nat
i
on i
sexpr
essl
yl
e
f
tt
ot
hewi
l
lof
t
he l
essee mus
t be fixed by t
he cour
t
s
accor
di
ng t
ot
hec
har
act
erand condi
t
i
ons
oft
hemut
ualunder
t
aki
ngs,i
n an act
i
on
br
oughtf
ort
hatpur
posexxx.
PHI
LBANKI
NG V.LUISHE [
21SCRA53]Al
easet
oanal
i
en f
orar
easonabl
eper
i
od
i
sv
al
i
d.
LI
M V.PEOPLE [
133 SCRA 333] - I
ti
s
cl
eari
nt
heagr
eementt
hatt
hepr
oceedsof
t
he sal
e oft
he t
obacco shoul
d be t
ur
ned
over t
ot
he compl
ai
nant as soon as t
he
samewass
ol
d,or
,t
hatt
heobl
i
gat
i
on was
i
mmedi
at
el
y demandabl
e as soon as t
he
t
obaccowasdi
sposedof
.Hence,Ar
t
.1197
oft
heNCC,w/cpr
ovi
dest
hatt
hecour
t
s
mayfix t
hedur
at
i
on oft
heobl
i
gat
i
on i
fi
t
doesnotfixape
r
i
od,doesnotappl
y
.
ARANETA,I
NC.V.PHI
L.SUGAR ESTATES
[
20SCRA 330]- xxx Ar
t
.1197i
nv
ol
v
esa
t
wo-s
t
e
p pr
ocess. (
1) The Cour
tmus
t
fir
st de
t
er
mi
ne t
hat "
t
he obl
i
g
at
i
on does
not fix a per
i
od.
"(
or t
hatt
he per
i
od i
s
made t
o depend upon t
he wi
l
l of t
he
debt
or
)
,
" but f
r
om t
he nat
ur
e and t
he
ci
r
cums
t
ances i
t can be i
nf
er
r
ed t
hat a
per
i
od was i
nt
ended.
"
(
2)
Thi
s
pr
el
i
mi
nar
y poi
ntse
t
t
l
ed,t
heCour
tmus
t
t
hen pr
oc
eed t
ot
he second st
e
p, and
deci
de what per
i
od was "
pr
obabl
y
cont
e
mpl
at
e
d by t
he par
t
i
es.
" So t
hat
,
ul
t
i
mat
el
y
,t
heCour
tcan notfix a per
i
od
mer
el
ybec
.i
ni
t
sopi
ni
on i
ti
sorshoul
dbe
r
easonabl
e,butmus
tse
tt
het
i
met
hatt
he
par
t
i
esar
eshownt
ohavei
nt
e
nded.xxx
MI
LLARE V.HERNANDO [
151 SCRA 484]
Par
. 1 of Ar
t
. 1197 i
s cl
ear
l
y
i
nappl
i
cabl
e,si
nce t
he Cont
r
actofLease
di
di
nf
actfixan or
i
gi
nalpe
r
i
od of5 yr
s.
,
w/chadexpi
r
e
d. I
ti
sal
s
ocl
earf
r
om par
.
13oft
hecont
r
actt
hatt
hepar
t
i
esr
eser
v
ed
t
ot
he
msel
v
est
hef
acul
t
yofagr
eei
ngupon
t
he per
i
od oft
he r
ene
walcont
r
act
. The
2nd par
. of Ar
t
. 1197 i
s equal
l
y
i
nappl
i
cabl
e s
i
nce t
he dur
at
i
on of t
he
r
enewalper
i
od was notl
ef
tt
ot
he wi
l
lof
t
hel
essee al
one,butr
at
hert
ot
hewi
l
lof
bot
h t
he l
e
ssor and t
he l
esse
e. Most
i
mpor
t
ant
l
y
,Ar
t
.1197 appl
i
esonl
y wher
e
acont
r
actofl
eas
ecl
ear
l
ye
xi
s
t
s.Her
e,t
he
cont
r
actwasnotr
enewe
datal
l
,t
he
r
ewas
i
nf
actnocont
r
actatal
lt
heper
i
od ofw/c
coul
dhavebeenfixed.
Ar
t
.1180. Whe
nt
hedebt
orbi
nds
hi
msel
ft
opaywhen hi
smeansper
mi
thi
m
t
odos
o,t
heobl
i
gat
i
on shal
lbedeemedt
o
be one wi
t
h a per
i
od, subj
ect t
o t
he
pr
ovi
si
onsofar
t
i
cl
e1197.
4.Whendebt
orl
osest
hebenefitofper
i
od
Ar
t
.1198. The de
bt
or shal
ll
ose
e
ver
yr
i
ghtt
omakeuseoft
heper
i
od:
(
1)Whe
n af
t
er t
he obl
i
gat
i
on has
been cont
r
act
ed, he becomes i
nsol
vent
,
unl
esshegi
v
esaguar
ant
yorsecur
i
t
yf
or
t
hedebt
;
(
2)Whenhedoesnotf
ur
ni
sht
ot
he
cr
edi
t
ort
heguar
ant
i
esorsecur
i
t
i
eswhi
c
h
hehaspr
omi
sed;
(
3)When by hi
s own act
s he has
i
mpai
r
eds
ai
dguar
ant
i
esorsecur
i
t
i
esaf
t
er
t
hei
res
t
abl
i
shment
,and when t
hr
ough a
f
or
t
ui
t
ouse
v
entt
he
ydi
sappear
,unl
esshe
i
mmedi
at
el
y gi
v
es new ones equal
l
y
sat
i
sf
act
or
y;
(
4)When t
he debt
or vi
ol
at
es any
under
t
aki
ng,i
nconsi
der
at
i
onofwhi
c
ht
he
cr
edi
t
oragr
eedt
ot
heper
i
od;
(
5) When t
he debt
or at
t
empt
st
o
abscond.
(
6) Ar
t
.2109 -I
ft
he cr
edi
t
or i
s
decei
vedont
hesubs
t
anceorqual
i
t
yoft
he
t
hi
ngpl
edged,hemaye
i
t
hercl
ai
m anot
he
r
t
hi
ng i
ni
t
s st
e
ad,or de
mand i
mmedi
at
e
paymentoft
hepr
i
nci
palobl
i
gat
i
on. (
The
si
xt
hgr
oundwasaddedbyPr
of
.Bal
ane.
)
(
7)Accel
er
at
i
oncl
ause
Bal
ane:I
nnumberone
,f
act
uali
nsol
vency
i
s enough. A j
udi
ci
al decl
ar
at
i
on of
i
nsol
v
encyi
snotr
e
qui
r
ed.
2.Ac
c
or
di
ngt
opl
ur
al
i
t
yofobj
ec
t
s:
A.Si
mpl
e
B.Mul
t
i
pl
e
1. Conj
unct
i
ve wher
et
he
debt
or mus
t per
f
or
m mor
e t
han one
pr
es
t
at
i
on
2. Al
t
e
r
nat
i
ve Obl
i
gat
i
ons
wher
et
hedebt
ormustper
f
or
m anyoft
he
pr
es
t
at
i
ons
3. Facul
t
at
i
v
e wher
e onl
y
one t
hi
ng i
s due but t
he debt
or has
r
eser
v
ed t
he r
i
ght t
o subst
i
t
ut
ei
t w/
anot
he
r(
I
V Tol
ent
i
no)(
Ar
t
.1206.
)
Al
t
e
r
nat
i
veObl
i
gat
i
ons
Ar
t
.1199. A per
son al
t
e
r
nat
i
vel
y
bound by di
ffer
ent pr
e
s
t
at
i
ons shal
l
compl
e
t
e
l
yper
f
or
m oneoft
hem.
Thec
r
e
di
t
orcannotbecompel
l
edt
o
r
ecei
v
e par
tofone and par
toft
he ot
her
under
t
aki
ng.
Tol
ent
i
no:Thec
har
act
er
i
st
i
cofal
t
e
r
nat
i
ve
obl
i
gat
i
ons i
st
hat
,sever
alobj
e
ct
s bei
ng
due,t
hef
ul
fil
l
mentofonei
ssuffici
entxxx.
Ar
t
. 1200. The r
i
ght of choi
ce
bel
ongs t
ot
he debt
or
,unl
ess i
thas been
e
xpr
essl
ygr
ant
edt
ot
hec
r
e
di
t
or
.
The debt
or shal
lhave no r
i
ghtt
o
c
hoose t
hose pr
est
at
i
ons whi
ch ar
e
i
mpossi
bl
e,unl
awf
ulor whi
ch coul
d not
hav
ebeent
heobj
ectoft
heobl
i
g
at
i
on.
Bal
ane: Towhom doest
her
i
ghtofchoi
ce
bel
ong? Gene
r
alr
ul
e: T
ot
hedebt
or(
Ar
t
.
1200.
)
Except
i
on:
When e
xpr
essl
y
gr
ant
edt
ot
hecr
edi
t
or
Ther
ei
sat
hi
r
d possi
bi
l
i
t
y whe
r
e
t
hec
hoi
cemaybemadebyat
hi
r
d per
son
uponagr
ee
mentoft
hepar
t
i
es
.
Q: Whati
st
he t
echni
calt
e
r
m of
t
he actofmaki
ng a choi
ce i
n al
t
e
r
nat
i
ve
obl
i
gat
i
ons?
A:Concent
r
at
i
on.
Ar
t
. 1201.
The choi
ce shal
l
pr
oduce no effectexceptf
r
om t
he t
i
me i
t
hasbeencommuni
c
at
ed.
Bal
ane:Requi
r
ementofCommuni
c
at
i
onof
c
hoi
ce.
- I
ft
he c
hoi
ce bel
ongs t
ot
he
cr
edi
t
or
,ofcour
s
e,hehast
ocommuni
cat
e
hi
sc
hoi
cet
ot
hedebt
or
.Thedebt
ori
snot
apr
ophe
t
.
Q: I
ft
he c
hoi
ce bel
ongs t
ot
he
debt
or
,why r
equi
r
ec
ommuni
cat
i
on be
f
or
e
per
f
or
mance i
ft
he c
hoi
ce bel
ongs t
o hi
m
anyway?
A:
To gi
ve t
he cr
edi
t
or an
oppor
t
uni
t
yt
o consent t
ot
he choi
ce or
i
mpugni
t
.(
Ongv
.Se
mpi
oDy
,46P592.
)
BUThow cant
hec
r
edi
t
ori
mpugni
t
i
ft
he choi
ce bel
ongs t
ot
he debt
or
. The
be
t
t
err
e
ason woul
dbet
ogi
v
et
hecr
edi
t
or
ac
hancet
opr
epar
ef
ort
hepe
r
f
or
mance.
Ar
t
i
cl
es 1202 t
o 1205 t
al
k oft
he l
oss of
some
of t
he pr
est
at
i
ons
be
f
or
e
per
f
or
mance.
1.I
ft
hechoi
cei
sdebt
or
'
s
a. Whe
n onl
yonepr
est
at
i
on i
sl
ef
t
(
whe
t
her or not t
he t
he r
es
t of t
he
pr
es
t
at
i
ons hav
e been l
ost t
hr
ough
f
or
t
ui
t
ouse
ventort
hr
ough t
hef
aul
toft
he
debt
or
)
,t
he debt
or may per
f
or
m t
he one
t
hati
sl
ef
t
.
-Ar
t
.1202.
Ar
t
.1202. The de
bt
or shal
ll
ose
t
he r
i
ght of c
hoi
ce when among t
he
pr
es
t
at
i
ons wher
eby he i
s al
t
e
r
nat
i
vel
y
bound,onl
yonei
spr
act
i
cabl
e.
b. I
ft
hec
hoi
cei
sl
i
mi
t
ed t
hr
ough
t
hecr
e
di
t
or
'
sown act
s,t
hedebt
orcan ask
f
orr
esol
ut
i
onpl
usdamages.
-Ar
t
.1203
Ar
t
.1203. I
ft
hr
ough t
hecr
e
di
t
or
'
s
act
st
he debt
or cannot make a choi
ce
accor
di
ng t
ot
he t
e
r
ms oft
he obl
i
gat
i
on,
t
he l
at
t
er may r
esci
nd t
he c
ont
r
actwi
t
h
damages.
c. I
fe
v
er
yt
hi
ngi
sl
ostt
hr
ough t
he
debt
or
'
s f
aul
t
,t
he l
at
t
e
r i
s l
i
abl
e t
o
i
ndemni
f
yt
hec
r
edi
t
orf
ordamages.
- Ar
t
.
1204.
Ar
t
.1204.Thecr
edi
t
orshal
lhavea
r
i
ght t
o i
ndemni
t
y f
or damages when,
t
hr
ough t
he f
aul
t oft
he debt
or
,al
lt
he
t
hi
ngswhi
ch ar
eal
t
er
nat
i
v
el
yt
heobj
ectof
t
he obl
i
g
at
i
on hav
e been l
os
t
, or t
he
compl
i
ance oft
he obl
i
gat
i
on has become
i
mpossi
bl
e.
Thei
ndemni
t
yshal
lbefixedt
aki
ng
asabasi
st
heval
ueoft
hel
as
tt
hi
ngwhi
ch
di
sappear
e
d,ort
hatoft
he ser
vi
ce whi
ch
l
as
tbecamei
mpossi
bl
e.
Damage
s ot
her t
han t
he val
ue of
t
he l
as
tt
hi
ng or ser
vi
c
e may al
so be
awar
ded.
d. I
fsomet
hi
ngsar
el
os
tt
hr
ough
t
he debt
or
'
sf
aul
t
,t
he debt
or can s
t
i
l
l
c
hoosef
r
om t
hoser
e
mai
ni
ng.
e. I
fal
lar
el
os
tt
hr
ough f
or
t
ui
t
ous
e
vent
,t
heobl
i
g
at
i
oni
sext
i
ngui
shed.
f
.I
fal
lpr
es
t
at
i
onsbutonear
el
os
t
t
hr
ough f
or
t
ui
t
ous e
vent
, and t
he
r
emai
ni
ngpr
est
at
i
on wasl
os
tt
hr
ough t
he
debt
or
'
s f
aul
t
,t
he l
at
t
e
r i
s l
i
abl
e t
o
i
ndemni
f
yt
hecr
edi
t
orf
ordamages.
g. I
fal
lbutone ar
el
os
tt
hr
ough
t
hef
aul
toft
hede
borandt
hel
as
tonewas
l
ostt
hr
ough t
hr
ough f
or
t
ui
t
ouse
vent
,t
he
obl
i
gat
i
oni
sext
i
ngui
shed.
2.Choi
cei
st
hecr
edi
t
or
'
s
Ar
t
.1205. When t
he c
hoi
ce has
been expr
essl
y gi
ven t
ot
he cr
e
di
t
or
,t
he
obl
i
gat
i
on shal
l cease t
o be al
t
e
r
nat
i
ve
f
r
om t
hedaywhen t
hesel
ect
i
on hasbeen
communi
cat
e
dt
ot
hede
bt
or
.
Unt
i
lt
hen t
her
espons
i
bi
l
i
t
y oft
he
debt
orshal
lbe gov
er
ned by t
he f
ol
l
owi
ng
r
ul
es:
(
1) I
f one of t
he t
hi
ngs i
sl
os
t
t
hr
ough a f
or
t
ui
t
ous ev
ent
, he shal
l
per
f
or
m t
he obl
i
gat
i
on by de
l
i
v
er
i
ng t
hat
whi
c
h t
he cr
edi
t
or shoul
d c
hoose f
r
om
among t
he r
e
mai
nde
r
, or t
hat whi
ch
r
emai
nsi
fonl
yonesubsi
s
t
s;
(
2)I
ft
he l
oss ofone oft
he t
hi
ngs
occur
st
hr
ough t
hef
aul
toft
hedebt
or
,t
he
cr
edi
t
ormayc
l
ai
m anyoft
hosesubsi
st
i
ng,
or t
he pr
i
ce oft
hat whi
ch,t
hr
ough t
he
f
aul
toft
hef
or
mer
,hasdi
sappear
ed,wi
t
ha
r
i
ghtt
odamages;
(
3)I
fal
lt
het
hi
ngsar
el
os
tt
hr
ough
t
he f
aul
toft
he debt
or
,t
he c
hoi
ce by t
he
cr
edi
t
orshal
lf
al
lupont
hepr
i
ceofanyone
oft
hem,al
sowi
t
hi
ndemni
t
yf
ordamages.
Thes
amer
ul
ess
hal
lbeappl
i
ed t
o
obl
i
gat
i
onst
odoornott
odoi
nc
aseone,
some or al
l of t
he pr
es
t
at
i
ons s
houl
d
becomei
mpossi
bl
e
.
a. I
foneorsomear
el
ostt
hr
ough
f
or
t
ui
t
ous e
vent
,t
he c
r
edi
t
ormay choose
f
r
om t
hose r
emai
ni
ng.
- Ar
t
.1205 (
1)
,
supr
a.
b. I
foneorsomear
el
ostt
hr
ough
t
he debt
or
'
sf
aul
t
,t
hecr
edi
t
orhas c
hoi
ce
f
r
om t
he r
e
mai
nder or t
he val
ue oft
he
t
hi
ngsl
os
tpl
usdamages.
- Ar
t
.1205(
2)
,
supr
a.
c. I
f al
l ar
el
os
tt
hr
ough t
he
debt
or
'
sf
aul
t
,t
he c
hoi
ce oft
he cr
edi
t
or
shal
lf
al
lupont
hepr
i
c
eofanyoft
hem,w/
i
ndemni
t
yf
or damages.
- Ar
t
.1205 (
3)
,
supr
a.
d. I
fsome ar
el
os
tt
hr
ough t
he
cr
edi
t
or
'
sf
aul
t
,t
he cr
e
di
t
or may c
hoose
f
r
om t
her
e
mai
nde
r
.
e. I
fal
lar
el
os
tt
hr
ough f
or
t
ui
t
ous
e
vent
,t
heobl
i
g
at
i
oni
sext
i
ngui
shed.
f
. I
f al
l ar
e l
os
tt
hr
ough t
he
cr
edi
t
or
'
s f
aul
t
, t
he obl
i
g
at
i
on i
s
e
xt
i
ngui
shed.
Facul
t
at
i
veobl
i
gat
i
ons
Ar
t
. 1206.
When onl
y one
pr
es
t
at
i
on hasbeen agr
eed upon,butt
he
obl
i
gor may r
ender anot
her i
n subs
t
i
t
ut
i
on,t
heobl
i
g
at
i
oni
scal
l
edf
acul
t
at
i
ve.
The l
oss or de
t
er
i
or
at
i
on of t
he
t
hi
ng i
nt
ended as a subs
t
i
t
ut
e
,t
hr
ough
t
he negl
i
gence of t
he obl
i
gor
, does not
r
ender hi
m l
i
abl
e
. But once t
he
subs
t
i
t
ut
i
on hasbeen made,t
heobl
i
gori
s
l
i
abl
ef
or t
he l
oss of t
he subs
t
i
t
ut
e on
accountofhi
sdel
ay
,negl
i
genceorf
r
aud.
2. Ast
onul
l
i
t
y: I
nal
t
e
r
nat
i
v
eobl
i
g
at
i
ons,
t
he nul
l
i
t
y of one pr
es
t
at
i
on does not
i
nv
al
i
dat
et
he obl
i
gat
i
on, w/c i
ss
t
i
l
li
n
f
or
cew/r
espectt
ot
hosew/chavenovi
ce;
whi
l
ei
n f
acul
t
at
i
v
e, t
he nul
l
i
t
y of t
he
pr
i
nci
pal pr
es
t
at
i
on i
nval
i
dat
e
s t
he
obl
i
gat
i
onandt
hecr
e
di
t
orcannotdemand
t
hesubst
i
t
ut
eev
enwhent
hi
si
sval
i
d.
3.Ast
oc
hoi
c
e:I
nal
t
e
r
nat
i
ve,t
her
i
ghtt
o
c
hoosemaybegi
v
en t
ot
hecr
edi
t
or
;whi
l
e
i
nf
acul
t
at
i
ve,onl
yt
hedebt
or c
an c
hoose
t
hesubst
i
t
ut
epr
es
t
at
i
on.
4. Ast
oeffec
tofl
oss: I
nal
t
er
nat
i
ve,onl
y
t
hei
mpossi
bi
l
i
t
yofal
lt
hepr
es
t
at
i
onsdue
w/o f
aul
toft
he debt
or ext
i
ngui
shes t
he
obl
i
gat
i
on; whi
l
e i
n f
acul
t
at
i
v
e, t
he
i
mpossi
bi
l
i
t
y oft
hepr
i
nci
palpr
est
at
i
on i
s
suffici
ent t
o ext
i
ngui
sh t
he obl
i
g
at
i
on,
e
veni
ft
hesubs
t
i
t
ut
ei
spossi
bl
e.
Bal
ane: Facul
t
at
i
ve obl
i
g
at
i
ons al
ways
i
nv
ol
vec
hoi
cebyt
hedebt
or
.
I
nt
heor
y
,i
ti
seasyt
odi
s
t
i
ngui
sh
af
acul
t
at
i
v
eobl
i
gat
i
on f
r
om an al
t
er
nat
i
ve
one. But i
n pr
act
i
ce, i
ti
s di
fficul
tt
o
di
s
t
i
ngui
sh t
het
wo. You j
us
thav
et
ofind
outwhatt
hepar
t
i
esr
e
al
l
yi
nt
ended.
3.Ac
c
or
di
ngt
oPl
ur
al
i
t
yofsubj
ec
t
s:
A.Joi
ntandSol
i
dar
yObl
i
gat
i
ons
a.Joi
ntObl
i
gat
i
ons
I
V Tol
ent
i
no:
Al
t
e
r
nat
i
ve.
-
Di
s
t
i
ngui
shed
f
r
om
1. Ast
oc
ont
ent
soft
heobl
i
gat
i
on: I
nt
he
al
t
e
r
nat
i
ve,t
her
e ar
ev
ar
i
ous pr
es
t
at
i
ons
al
l of w/c const
i
t
ut
e par
t
s of t
he
obl
i
gat
i
on;whi
l
ei
nf
acul
t
at
i
ve,onl
yt
he
pr
i
nci
pal pr
est
at
i
on c
onst
i
t
ut
e
s t
he
obl
i
gat
i
on, t
he accessor
y bei
ng onl
ya
meanst
of
aci
l
i
t
at
epayment
.
Bal
ane: Joi
nt Obl
i
gat
i
on.
- A j
oi
nt
obl
i
gat
i
oni
sonei
nw/ceac
hoft
hede
bt
or
s
i
sl
i
abl
eonl
yf
orapr
opor
t
i
onat
epar
toft
he
debtoreac
h cr
edi
t
ori
sent
i
t
l
ed onl
yt
oa
pr
opor
t
i
onat
epar
toft
hec
r
e
di
t
.
I
nj
oi
nt obl
i
gat
i
ons, t
her
e ar
e as
many obl
i
g
at
i
ons as t
her
e ar
e de
bt
or
s
mul
t
i
pl
i
edbyt
henumberofcr
edi
t
or
s.
Ther
e ar
e t
hr
e
e ki
nds of j
oi
nt
obl
i
gat
i
ons: (
1) Ac
t
i
ve j
oi
nt whe
r
et
he
obl
i
gat
i
oni
sj
oi
ntont
hecr
edi
t
or
'
ss
i
de;(
2)
Passi
ve j
oi
ntwher
et
he obl
i
gat
i
on i
sj
oi
nt
on t
hedebt
or
'
ssi
de;and(
3) Mul
t
i
pl
eJoi
nt
wher
et
he
r
e ar
e mul
t
i
pl
e par
t
i
es on each
si
deofaj
oi
ntobl
i
gat
i
on.
I
VTol
ent
i
no:Thej
oi
ntobl
i
gat
i
onhasbeen
v
ar
i
ousl
y t
e
r
med manc
omunada or
manc
omunada si
mpl
e or pr
or
at
a. The
phr
ase"
Wepr
omi
s
et
o pay
,
"used by2 or
mor
esi
gner
s,cr
eat
e
sapr
or
at
al
i
abi
l
i
t
y
.
Effect
sofJoi
ntLi
abi
l
i
t
y
:
1. Thedemand byonec
r
edi
t
orupon one
debt
or
,pr
oducest
heeffect
sofdef
aul
tonl
y
w/ r
espe
ctt
ot
hecr
edi
t
orwho demanded
and t
hede
bt
oron whom t
hedemandwas
made,butnotw/r
e
spectt
ot
heot
he
r
s;
2. Thei
nt
er
r
upt
i
on ofpr
e
scr
i
pt
i
on byt
he
j
udi
ci
aldemand ofone cr
edi
t
or upon a
debt
or
,doesnotbe
nefitt
heot
hercr
edi
t
or
s
nori
nt
er
r
uptt
he pr
escr
i
pt
i
on as t
o ot
her
debt
or
s
. On t
hes
amepr
i
nc
i
pl
e,apar
t
i
al
paymentorac
knowl
edgementmadebyone
ofse
ver
alj
oi
ntdebt
or
s doesnots
t
op t
he
r
unni
ng oft
hes
t
at
ut
eofl
i
mi
t
at
i
onsast
o
t
heot
her
s;
3. The vi
ces ofeac
h obl
i
gat
i
on ar
i
si
ng
f
r
om t
he per
s
onalde
f
ect ofa par
t
i
cul
ar
debt
or or c
r
edi
t
or does not affect t
he
obl
i
gat
i
onorr
i
ght
soft
heot
he
r
s;
4. The i
nsol
v
ency ofa de
bt
or does not
i
ncr
e
ase t
he r
e
sponsi
bi
l
i
t
y of hi
s codebt
or
s
,nordoesi
taut
hor
i
z
eacr
edi
t
ort
o
demandanyt
hi
ngf
r
om hi
scocr
edi
t
or
s;
5. I
nt
he j
oi
nt di
vi
si
bl
e obl
i
gat
i
on,t
he
def
enseofr
esj
udi
c
at
ai
snote
xt
endedf
r
om
onede
bt
ort
oanot
he
r
.(
Manr
esa.
)
Ar
t
.1208. I
ff
r
om t
he l
aw,ort
he
nat
ur
eort
hewor
di
ngoft
heobl
i
gat
i
onst
o
whi
c
h t
he pr
ecedi
ng ar
t
i
cl
e r
ef
er
s t
he
cont
r
ar
y does not appear
,t
he c
r
edi
t or
debtshal
lbepr
esumed t
o bedi
vi
ded i
nt
o
as many e
qual shar
es as t
her
e ar
e
cr
edi
t
or
s orde
bt
or
s,t
he c
r
edi
t
s ordebt
s
bei
ng consi
der
ed di
st
i
nct f
r
om one
anot
he
r
, subj
ect t
ot
he Rul
es of Cour
t
gover
ni
ngt
hemul
t
i
pl
i
ci
t
yofsui
t
s.
Ar
t
. 1209. I
ft
he di
vi
si
on i
s
i
mpossi
bl
e,t
her
i
ghtoft
hecr
edi
t
or
smay
bepr
ej
udi
ced onl
ybyt
hei
rcol
l
ect
i
veact
s,
and t
he debt can be enf
or
ced onl
y by
pr
oceedi
ngagai
ns
tal
lt
hedebt
or
s.I
foneof
t
he l
at
t
e
r shoul
d be i
ns
ol
vent
,t
he ot
he
r
shal
lnotbel
i
abl
ef
orhi
sshar
e.
Ar
t
.1210. Thei
ndi
vi
si
bi
l
i
t
y ofan
obl
i
gat
i
on doesnotnecessar
i
l
ygi
v
er
i
set
o
sol
i
dar
i
t
y
. Nor does sol
i
dar
i
t
y of i
t
sel
f
i
mpl
yi
ndi
vi
si
bi
l
i
t
y
.
Di
s
t
i
ngui
shedf
r
om Sol
i
dar
yObl
i
gat
i
ons
Ar
t
. 1224. A j
oi
nt i
ndi
vi
si
bl
e
obl
i
gat
i
on gi
ves r
i
se t
o i
nde
mni
t
y f
or
damages f
r
om t
he t
i
me anyone of t
he
debt
or
s does not compl
y wi
t
h hi
s
under
t
aki
ng.The debt
or
s who may hav
e
been r
eady t
of
ul
fil
lt
hei
r pr
omi
ses shal
l
notcont
r
i
but
et
ot
hei
ndemni
t
ybeyondt
he
cor
r
espondi
ng por
t
i
on oft
he pr
i
ce oft
he
t
hi
ng or of t
he val
ue of t
he ser
vi
ce i
n
whi
c
ht
heobl
i
gat
i
onc
onsi
s
t
s.
b.Sol
i
dar
yobl
i
gat
i
ons
Bal
ane:Sol
i
dar
yObl
i
gat
i
ons.
- A sol
i
dar
y
obl
i
gat
i
oni
sonei
nw/ct
hede
bt
ori
sl
i
abl
e
f
ort
hee
nt
i
r
eobl
i
gat
i
on ore
ach cr
e
di
t
ori
s
ent
i
t
l
ed t
o demand t
he whol
e obl
i
gat
i
on.
Ther
ei
s onl
y one obl
i
gat
i
on i
s a sol
i
dar
y
obl
i
gat
i
on.
Ther
ear
et
hr
e
eki
ndsofsol
i
dar
i
t
y:
(
1) Ac
t
i
vesol
i
dar
y wher
et
her
ear
esev
er
al
cr
edi
t
or
s w/ one debt
or i
n a sol
i
dar
y
obl
i
gat
i
on; (
2) Passi
ve sol
i
dar
i
t
y whe
r
e
t
her
ei
s one cr
edi
t
or w/ sev
er
aldebt
or
s
sol
i
dar
ybound;(
3)Mi
xedSol
i
dar
i
t
ywher
e
t
her
e ar
e se
ver
al cr
e
di
t
or
s and sev
er
al
debt
or
si
nasol
i
dar
yobl
i
gat
i
on.
I
V Tol
ent
i
no: Sol
i
dar
y obl
i
gat
i
ons may
al
so be r
ef
er
r
ed t
o as manc
omunada
sol
i
dar
i
aorj
oi
ntandsev
er
alori
nsol
i
dum.
I
t has al
so been he
l
d t
hat t
he t
e
r
ms
"
j
unt
os o separ
adament
e"i
n a pr
omi
ssor
y
not
ec
r
eat
esas
ol
i
dar
yr
esponsi
bi
l
i
t
y;t
hat
wher
et
her
ear
enowor
dsusedt
oi
ndi
cat
e
t
he c
har
act
e
r ofa l
i
abi
l
i
t
y
,t
he phr
ase "
I
pr
omi
set
opay
,
"f
ol
l
owe
dbyt
hesi
gnat
ur
es
of 2 or mor
e per
s
ons
, gi
ves r
i
se t
o an
i
ndi
vi
dualorsol
i
dar
yr
esponsi
bi
l
i
t
y
. The
wor
ds "
i
ndi
vi
dual
l
y and col
l
ect
i
vel
y" al
so
cr
eat
e a sol
i
dar
yl
i
abi
l
i
t
y
. So does an
agr
e
ee
mentt
o be "
i
ndi
vi
dual
l
yl
i
abi
l
e"or
"
i
ndi
vi
dual
l
yandj
oi
nt
l
yl
i
abl
e.
"
(
i
)
Ac
t
i
ve
Sol
i
dar
i
t
y
Ar
t
. 1211. Sol
i
dar
i
t
y may exi
s
t
al
t
hough t
he cr
edi
t
or
s and t
he debt
or
s
may notbe bound i
nt
he s
ame manne
r
andbyt
hes
ameper
i
odsandcondi
t
i
ons.
Ar
t
.1207. Theconcur
r
enc
eoft
wo
ormor
ecr
e
di
t
or
soroft
woormor
edebt
or
s
i
n one and t
he same obl
i
gat
i
on does not
i
mpl
yt
hate
ach one oft
he f
or
merhas a
r
i
ghtt
o demand,ort
hateach one oft
he
l
at
t
eri
sboundt
or
e
nde
r
,ent
i
r
ecompl
i
ance
wi
t
h t
he pr
es
t
at
i
on. The
r
e i
s sol
i
dar
y
l
i
abi
l
i
t
yonl
ywhent
heobl
i
gat
i
on expr
essl
y
sos
t
at
es,orwhe
nt
hel
aw ort
henat
ur
eof
t
heobl
i
gat
i
onr
e
qui
r
e
ssol
i
dar
i
t
y
.
Bal
ane: When i
san obl
i
gat
i
on w/sev
er
al
par
t
i
es on ei
t
he
r si
de Joi
ntor Sol
i
dar
y?
The pr
esumpt
i
on i
st
hatan obl
i
gat
i
on i
s
j
oi
ntbec.aj
oi
ntobl
i
gat
i
on i
sl
essoner
ous
t
hatas
ol
i
dar
yone.
Ther
ei
ssol
i
dar
yobl
i
gat
i
on onl
yi
n
t
hr
ee cases: (
1) when t
he obl
i
gat
i
on
e
xpr
essl
ysos
t
at
es;or(
2)when t
hel
aw or
t
he (
3)nat
ur
e oft
he obl
i
gat
i
on r
equi
r
es
sol
i
dar
i
t
y
.
Char
act
er
i
s
t
i
csofAct
i
veSol
i
dar
i
t
y:
1. Si
nce i
ti
sar
eci
pr
ocalagency
,t
he
deat
h of a sol
i
dar
y c
r
e
di
t
or does not
t
r
ansmi
tt
hesol
i
dar
i
t
yt
oeac
h ofhi
shei
r
s
but t
o al
l of t
hem t
aken t
oge
t
her
. (
I
V
Tol
ent
i
no)
;
2. Each cr
edi
t
orr
epr
esent
sot
her
si
nt
he
actofr
equi
r
i
ng payment
,and i
n al
lo
t
her
ac
t
sw/ct
endt
osec
ur
et
hec
r
edi
tormake
i
t mor
e advant
ageous. Henc
e, i
f he
r
ec
ei
ves onl
y a par
t
i
alpayment
,he mus
t
di
vi
dei
tamongt
heot
herc
r
edi
t
or
s.Hec
an
i
nt
er
r
upt t
he per
i
od of pr
esc
r
i
pt
i
on or
r
endert
hedebt
ori
ndef
aul
t
,f
ort
hebenefit
ofal
lot
herc
r
edi
t
or
s;
3. A c
r
edi
tonce pai
di
s shar
ed e
qual
l
y
among t
he cr
edi
t
or
s unl
ess a di
ffer
ent
i
nt
ent
i
onappear
s;
4.Debt
ormaypayanyoft
hec
r
e
di
t
or
sbut
i
fany demand,j
udi
ci
alore
xt
r
aj
udi
ci
ali
s
made on hi
m,he mustpay onl
yt
o one
demandi
ngpayment(
Ar
t
.1214)
;
5. One c
r
edi
t
or does not r
epr
esent t
he
ot
her
si
n suc
hac
t
sasnovat
i
on(
eveni
ft
he
c
r
edi
t bec
omes mor
e advant
ageous)
,
c
ompensat
i
on and r
emi
ssi
on. I
n t
hese
c
ases,even i
ft
he debt
ori
sr
el
eased,t
he
ot
herc
r
edi
t
or
sc
an s
t
i
l
lenf
or
c
et
hei
rr
i
ght
s
agai
nst t
he c
r
edi
t
or who made t
he
novat
i
on,c
ompensat
i
onorr
emi
ssi
on;
6. Eac
hc
r
edi
t
ormay r
enounc
e hi
sr
i
ght
evenagai
nstt
hewi
l
loft
hedebt
or
,and t
he
l
at
t
erneednott
her
eaf
t
erpayt
heobl
i
gat
i
on
t
ot
hef
or
mer
.
(
Par
t
s i
n i
t
al
i
c
s wer
e t
ake
n f
r
om I
V
Tol
ent
i
no.
)
I
V Tol
ent
i
no: When t
he l
aw r
equi
r
e
s
sol
i
dar
i
t
y
.
The l
i
abi
l
i
t
y of j
oi
nt
t
or
t
f
easor
s,w/c i
nc
l
ude al
lpe
r
sons who
commmand,i
ns
t
i
gat
e,pr
omot
e
,encour
age,
advi
se,count
e
ncance,c
ooper
at
ei
n,ai
d or
abe
tt
he commi
ssi
on of a t
or
t
, or who
appr
ov
e ofi
t
,af
t
eri
ti
s done,i
fdone f
or
t
hei
rbenefit
.
Char
act
er
i
s
t
i
csofPassi
v
eSol
i
dar
i
t
y:
1.Eac
hdebt
ormayber
equi
r
edt
opayt
he
ent
i
r
eobl
i
gat
i
on butaf
t
erpayment
,hec
an
r
ecov
erf
r
om t
hecode
bt
or
st
hei
rr
espect
i
ve
shar
es (
t
hi
s i
s some
t
hi
ng si
mi
l
ar t
o
subr
ogat
i
on)
;
2. I
nt
e
r
r
upt
i
on ofpr
escr
i
pt
i
on as t
o one
debt
or affect
s al
lt
he ot
her
s; but t
he
r
enunc
i
at
i
on by one debt
orofpr
esc
r
i
pt
i
on
al
r
eady had does notpr
ej
udi
c
et
heo
t
her
s,
bec
.t
heext
i
ngui
shmentoft
heobl
i
gat
i
onby
pr
esc
r
i
pt
i
on ext
i
ngui
shes al
so t
he mut
ual
r
epr
esent
at
i
onamongt
hesol
i
dar
ydebt
or
s.
Sol
i
dar
i
t
yf
r
om Nat
ur
e of Obl
i
gat
i
ons.
Li
abi
l
i
t
y may ar
i
se f
r
om t
he pr
ovi
si
ons of
ar
t
i
cl
es19 t
o22oft
heNCC. I
f2 ormor
e
per
sonsact
i
ngj
oi
nt
l
ybecomel
i
abi
l
eunder
t
hese pr
ovi
s
i
ons,t
he
i
rl
i
abi
l
i
t
y shoul
d be
sol
i
dar
y bec. of t
he nat
ur
e of t
he
obl
i
gat
i
on. xxx The act
s gi
v
i
ng r
i
se t
o
l
i
abi
l
i
t
y under t
hese ar
t
i
cl
es have a
common el
ement
- t
he
y ar
e mor
al
l
y
wr
ong. A mor
alwr
ong cannotbedi
vi
ded
i
nt
o par
t
s
;hence,t
he l
i
abi
l
i
t
yf
ori
tmus
t
bes
ol
i
dar
y
.
BALANE CASES:
3. Thedebt
orwhoi
sr
equi
r
ed t
opaymay
setup by way ofc
ompensat
i
on hi
s own
c
l
ai
m agai
ns
tt
hec
r
edi
t
or
,i
nt
hi
sc
ase,t
he
effec
ti
st
hesameast
hatofpayment
;
4. Thet
ot
alr
emi
ssi
on oft
hedebti
nf
avor
ofa debt
or r
el
eases al
lt
he debt
or
s;but
when t
hi
sr
emi
ssi
onaffec
t
sonl
yt
heshar
e
ofone debt
or
,t
he ot
her debt
or
s ar
es
t
i
l
l
l
i
abl
ef
ort
hebal
anc
eoft
heobl
i
gat
i
on.
5. Al
lt
hedebt
or
sar
el
i
abl
ef
ort
hel
ossof
t
het
hi
ng due,even i
fsuc
hl
oss i
sc
aused
by t
he f
aul
tofonl
y one oft
hem,or by
f
or
t
ui
t
ouseventaf
t
eroneoft
hedebt
or
shas
i
nc
ur
r
edi
ndel
ay;
6.Thei
nt
er
est
sduebyr
easonoft
hedel
ay
ofone oft
he debt
or
s ar
e bor
ne by al
lof
t
hem.
(
Wor
ds i
n i
t
al
i
cs we
r
e t
ake
n f
r
om I
V
Tol
ent
i
no.
)
RONQUI
LLO V.CA [
132 S274] - Cl
e
ar
l
y
t
hen, by t
he expr
ess t
e
r
m of t
he
compr
omi
se agr
eement and t
he dec
i
s
i
on
based upon i
t
, t
he def
s. obl
i
gat
ed
t
hemsel
v
es t
o pay t
hei
r obl
i
gat
i
on
"
i
ndi
vi
dual
l
y and j
oi
nt
l
y
.
"
The t
e
r
m
"
i
ndi
vi
dual
l
y" has t
he same meani
ng as
"
col
l
ect
i
vel
y
,
""
separ
at
e
l
y
,
""
di
s
t
i
nct
i
v
el
y
,
"
"
r
espect
i
vel
y"or"
s
ev
er
al
l
y
.
" An agr
eement
t
o be "
i
ndi
vi
dual
l
y l
i
abl
e" undoubt
e
dl
y
cr
eat
e
sas
ever
alobl
i
gat
i
on,anda"
se
ver
al
obl
i
gat
i
on"i
s one by w/c one i
ndi
vi
dual
bi
nds hi
msel
f t
o per
f
or
m t
he whol
d
obl
i
gat
i
on.
xxx
[
T]
he phr
as
e j
unt
os or
separ
adament
e use
d i
n t
he p/n i
s an
e
xpr
ess s
t
at
e
ment maki
ng each of t
he
per
sons who si
gned i
ti
ndi
vi
dual
l
yl
i
abl
e
f
ort
hepaymentoft
hef
ul
lamountoft
he
obl
i
gat
i
on cont
ai
nedt
her
ei
n. xxx I
nt
he
absenceofafindi
ngoff
act
st
hatt
hede
f
s.
madet
hemsel
v
esi
ndi
vi
dual
l
yl
i
abl
ef
ort
he
debt
si
ncur
r
edt
heyar
ee
achl
i
abl
eonl
yf
or
1/2ofsai
damount
. Theobl
i
gat
i
on i
nt
he
case at bar bei
ng descr
i
bed as
"
i
ndi
vi
dual
l
y and j
oi
nt
l
y
,
"t
he s
ame i
s
t
her
ef
or
e enf
or
ceabl
e agai
ns
t one of t
he
numer
ousobl
i
gor
s.
MALAYAN I
NSURANCE V.CA [
165 S 536]
- The di
r
ec
tl
i
abi
l
i
t
y oft
hei
nsur
erunder
i
ndemni
t
y c
ont
r
ac
t
s agai
ns
t t
hi
r
dpar
t
y
l
i
abi
l
i
t
ydoesnotmeant
hatt
hei
nsur
erc
an
be hel
d sol
i
dar
i
l
yl
i
abl
e wi
t
ht
he i
nsur
ed
and/ ort
heot
herpar
t
i
es f
ound atf
aul
t
.
Whi
l
ei
ti
st
r
uet
hatwhe
r
et
hei
nsur
ance
cont
r
act pr
ovi
de f
or i
ndemni
t
y agai
nst
l
i
abi
l
i
t
yt
o3r
d pe
r
sons,suc
h 3r
d per
s
ons
can di
r
ect
l
y suet
hei
nsur
e
r
,howe
ver
,t
he
di
r
ect l
i
abi
l
i
t
y of t
he i
nsur
er unde
rt
he
i
ndemni
t
y cont
r
act
s agai
nst t
hi
r
d par
t
y
l
i
ab.does notmean t
hatt
he i
nsur
ercan
be hel
d sol
i
dar
i
l
yl
i
abl
e w/ t
he i
nsur
ed
and/ ort
he ot
he
rpar
t
i
es f
ound atf
aul
t
.
The l
i
ab. of t
he i
nsur
er i
s based on
cont
r
act
;t
hatoft
he i
ns
ur
e
di
s based on
t
or
t
.
I
nt
he case at bar
,pe
t
i
t
i
oner as
i
nsur
erofSi
oChoy
,i
sl
i
abl
et
or
espondent
Val
l
ej
os,buti
tc
annot
,asi
ncor
r
e
ct
l
y hel
d
by t
he t
r
i
al cour
t
, be made "
sol
i
dar
i
l
y"
l
i
abl
e w/ t
he 2 pr
i
nci
pal t
or
t
f
e
asor
s
,
namel
yr
espondent
s Si
o Choy and San
Leon Ri
ce Mi
l
l
,I
nc. For i
f pe
t
i
t
i
one
r
i
nsur
er wer
e sol
i
dar
i
l
yl
i
abl
e w/ sai
d2
r
espondent
s by r
eason oft
he i
ndemni
t
y
cont
r
act
, agai
nst 3r
d par
t
y l
i
ai
bi
l
i
t
yunderw/cani
nsur
ercan bedi
r
ect
l
ysued
by a 3r
d par
t
y
-t
hi
s wi
l
lr
es
ul
ti
n a
vi
ol
at
i
on of t
he pr
i
nc
i
pl
es under
l
yi
ng
sol
i
dar
y obl
i
gat
i
ons and i
ns
ur
ance
cont
r
act
s
.
RCBC V.CA [
178 S 739] - Whe
r
e an
obl
i
gat
i
on e
xpr
essl
y s
t
at
e
s a sol
i
dar
y
l
i
abi
l
i
t
yt
he concur
r
enc
e of 2 or mor
e
cr
edi
t
or
sor2 ormor
ede
bt
or
si
n oneand
t
hesameobl
i
gat
i
on i
mpl
i
est
hateach ofof
t
hef
or
merhasar
i
ghtt
odemand,ort
hat
eac
h oneoft
hel
at
t
e
ri
sbound t
or
ende
r
,
ent
i
r
ec
ompl
i
ance w/ t
he pr
es
t
at
i
on (
Ar
t
.
1207.
) The cr
edi
t
ormay pr
oceed agai
ns
t
anyoneoft
hesol
i
dar
ydebt
or
sorsomeor
al
loft
hem s
i
mul
t
aneousl
y
.
QUI
SI
MBI
NG V.CA [
189 S 325] - Joi
nt
obl
i
gat
i
on di
s
t
i
ngui
shed f
r
om sol
i
dar
y
obl
i
gat
i
ons; Conc
ept of ac
t
i
ve sol
i
dar
i
t
yDi
s
t
i
ngui
ng i
tf
r
om t
he j
oi
nt obl
i
gat
i
on,
Tol
ent
i
no make
st
he ff. obser
vat
i
on: A
j
oi
ntobl
i
gat
i
on i
sonei
n w/ceac
h oft
he
debt
or
si
sl
i
abl
e onl
yf
ora pr
opor
t
i
onat
e
par
t of t
he debt
, and eac
h cr
edi
t
or i
s
ent
i
t
l
edonl
yt
oapr
opor
t
i
onat
epar
toft
he
cr
edi
t
. A sol
i
dar
yobl
i
gat
i
on i
sonei
nw/c
eac
h debt
or i
s l
i
abl
e f
or t
he ent
i
r
e
obl
i
gat
i
on,and e
ach cr
edi
t
ori
sent
i
t
l
ed t
o
demand t
he whol
e obl
i
gat
i
on. Henc
e,i
n
t
hef
or
mer
,each cr
edi
t
orcan r
ecoveronl
y
hi
s shar
e of t
he obl
i
gat
i
on, and e
ach
debt
orcan bemade t
opay onl
y hi
spar
t
;
wher
e
as,i
nt
he l
at
t
e
r
,e
ach c
r
edi
t
or may
enf
or
ce t
he ent
i
r
e obl
i
gat
i
on, and eac
h
debormaybeobl
i
gedt
opayi
ti
nf
ul
l
.
The same wor
k descr
i
bes t
he
concept of act
i
ve sol
i
dar
i
t
yt
hus: The
essenceofac
t
i
ves
ol
i
dar
i
t
yconsi
s
t
si
nt
he
aut
hor
i
t
y of eac
h cr
edi
t
or t
o cl
ai
m and
enf
or
cet
he r
i
ght
s ofal
l
,w/ t
he r
esul
t
i
ng
obl
i
gat
i
on of payi
ng ev
er
y one what
bel
ongs t
ohi
m;t
he
r
ei
sno mer
ger
,muc
h
l
ess a r
enunci
at
i
on of r
i
ght
s, but onl
y
mut
ualr
es
t
i
t
ut
i
on.
REPUBLI
C PLANTERS BANK [
216 S 738]
- Ani
ns
t
r
umentw/cbegi
nsw/"
I
,
""
WE"or
"
Ei
t
herofus"pr
omi
set
opay,whensi
gned
by t
wo or mor
e per
sons, makes t
hem
sol
i
dar
i
l
yl
i
abl
e. Thef
actt
hatt
hesi
ngul
ar
pr
onoun i
s used i
ndi
c
at
es t
hat t
he
pr
omi
se i
si
ndi
vi
dual as t
o each ot
he
r
;
meani
ng t
hat each of t
he cosi
gne
r
si
s
deemed t
o hav
e made an i
nde
pendent
si
ngul
arpr
omi
set
opayt
henot
esi
nf
ul
l
.
I
n t
he case at bar
,t
he sol
i
dar
y
l
i
abi
l
i
t
yofpr
i
vat
er
esp.F.Canl
asi
smade
cl
ear
er and cer
t
ai
n, w/o r
eason f
or
ambi
gui
t
y
,by t
he pr
esence oft
he phr
ase
"
j
oi
nt and s
ev
er
al
" as descr
i
bi
ng t
he
uncondi
t
i
onalpr
omi
set
opayt
ot
heor
der
ofRepubl
i
cPl
ant
e
r
sBank.xxx
CERNA V.CA [
220 SCRA 517] - Onl
y
Del
gadosi
ngedt
hep/nandaccor
di
nl
y
,he
wast
heonl
yoneboundbyt
hecont
r
actof
l
oan. Nowher
e di
di
tappeari
nt
he p/n
t
hatpe
t
i
t
i
onerwasacodebt
or
.Thel
aw i
s
cl
ear t
hat "
(
c)
ont
r
act
s t
ake effect onl
y
be
t
ween t
he par
t
i
es xxx" But by some
s
t
r
e
t
c
h oft
he i
magi
nat
i
on,pe
t
i
t
i
onerwas
hel
ds
ol
i
dar
i
l
yl
i
abl
ef
ort
hedebtal
l
egedl
y
bec.hewasacomor
t
gagoroft
hepr
i
nci
pal
debt
or
,Del
gado. Thi
si
gnor
es t
he basi
c
pr
ecept t
hat "
(
t
)
he
r
ei
s sol
i
dar
yl
i
abi
l
i
t
y
onl
y when t
he obl
i
g
at
i
on expr
e
ssl
y so
s
t
at
e
s,orwhent
hel
aw ort
henat
ur
eoft
he
obl
i
gat
i
onr
equi
r
ess
ol
i
dar
i
t
y
.
Ar
t
.1212.Eac
honeoft
hesol
i
dar
y
cr
edi
t
or
smaydowhat
ev
ermaybeus
ef
ult
o
t
heot
her
s,butnotanyt
hi
ngwhi
c
h maybe
pr
ej
udi
ci
alt
ot
hel
at
t
er
.
Bal
ane: Ther
ei
san appar
entconfli
ctbe
t
.
Ar
t
.1212and1215. Ar
t
.1212s
t
at
est
hat
t
heagencyext
endsonl
yt
ot
hi
ngsw/cwi
l
l
benefital
lcoc
r
e
di
t
or
s. Butnotanyt
hi
ng
w/c i
s pr
ej
udi
ci
calt
ot
he l
at
t
e
r
. I
n Ar
t
.
1215,hec
an doan act
spr
ej
udi
ci
alt
ot
he
ot
hercr
e
di
t
or
s
,l
i
ker
emi
ssi
onf
ori
nst
ance
.
Ar
t
. 1213. A sol
i
dar
y cr
edi
t
or
cannot assi
gn hi
s r
i
ght
s wi
t
hout t
he
consentoft
heot
her
s.
Ar
t
.1214.Thedebt
ormaypayany
one oft
he sol
i
dar
yc
r
e
di
t
or
s;buti
fany
demand,j
udi
ci
alorext
r
aj
udi
ci
al
,hasbeen
madebyoneoft
hem,payments
houl
d be
madet
ohi
m.
Bal
ane:Gener
alRul
e.
- Adebt
ormaypay
anyoft
hesol
i
dar
ycr
edi
t
or
s.
Except
i
on.
-I
fdemandi
smadeby
onecr
edi
t
orupon t
hede
bt
or
,i
n w/cc
ase
t
hel
at
t
e
rmus
tpayt
hede
mandi
ngcr
edi
t
or
onl
y
.
Cases:
1.Debt
oruponwhom demandwas
madepayst
oacr
e
di
t
orot
he
rt
hant
heone
who madet
hede
mand i
n vi
ol
at
i
on ofAr
t
.
1214.
- Thi
si
s consi
der
ed paymentt
oa
t
hi
r
d per
s
on (
Ar
t
.1241,par
.2)and t
he
debt
orcan st
i
l
lbe made t
o payt
hedebt
.
Theonl
yc
oncessi
on gi
v
en t
ot
hedebt
ori
s
t
hathei
s al
l
owed t
o deductt
heshar
e of
t
he r
ecei
vi
ng cr
edi
t
or f
r
om t
he t
ot
al
amount due e
ven i
f he pai
dt
he ent
i
r
e
amountduet
ot
hatc
r
edi
t
or
.
2. Cr
e
di
t
or A makes demand on
debt
orY.Doesi
tmeant
hathecannotpay
t
he shar
e per
t
ai
ni
ng t
o cr
edi
t
or B?
Accor
di
ng t
oc
omment
at
or
s he can. But
t
hi
si
s danger
ous be
c.t
he
r
e may al
r
e
ady
be an agr
eement on t
he par
t of t
he
cr
edi
t
or
s
.
3. Ther
ear
et
hr
eecr
edi
t
or
s-A,B
& C and t
her
ear
et
hr
eede
bt
or
s-X,Y&
Z. A make
s a demand on Y. X pays B.
Thi
si
snotcover
edbyAr
t
.1214.
Ar
t
.
1215.
Novat
i
on,
compensat
i
on,conf
usi
on or r
e
mi
ssi
on of
t
he debt
, made by any of t
he sol
i
dar
y
cr
edi
t
or
s or wi
t
h any of t
he sol
i
dar
y
debt
or
s
, shal
l ext
i
ngui
sh t
he obl
i
gat
i
on,
wi
t
hout pr
ej
udi
ce t
o t
he pr
ovi
si
ons of
ar
t
i
cl
e1219.
The cr
edi
t
or who may hav
e
e
xecut
e
d any oft
hese act
s
,aswel
las he
whoc
ol
l
ect
st
hede
bt
,shal
lbel
i
abl
et
ot
he
ot
her
sf
or t
he shar
ei
n t
he obl
i
gat
i
on
cor
r
espondi
ngt
ot
he
m.
Ar
t
. 1219.
The
r
emi
ssi
on made by t
he
cr
edi
t
oroft
he shar
e whi
c
h
affect
s one oft
he sol
i
dar
y
debt
or
sdoesnotr
el
easet
he
l
at
t
erf
r
om hi
sr
esponsi
bi
l
i
t
y
t
owar
ds t
he codebt
or
s
,i
n
case t
he debt had been
t
ot
al
l
y pai
d by anyone of
t
hem be
f
or
et
he r
emi
ssi
on
waseffect
ed.
Ar
t
.1915. I
ft
wo ormor
eper
s
ons
hav
e appoi
nt
e
d an agent f
or a common
t
r
ansact
i
on orunder
t
aki
ng,t
hey shal
lbe
sol
i
dar
i
l
yl
i
abl
et
ot
he agent f
or al
lt
he
consequencesoft
heagency
.
Bavi
e
r
a: Pr
i
nc
i
pal
s ar
e al
ways l
i
abl
e
sol
i
dar
i
l
y;Agent
s ar
e notl
i
abl
es
ol
i
dar
i
l
y
unl
essexpr
e
ssl
ys
t
i
pul
at
ed
(
i
i
)
Passi
ve
Sol
i
dar
i
t
y
Ar
t
. 1216. The cr
edi
t
or may
pr
oceed ag
ai
ns
t any one oft
he sol
i
dar
y
debt
or
s or some or al
l of t
hem si
mul
t
aneousl
y
.Thedemand madeagai
ns
tone
oft
hem shal
lnotbean obs
t
acl
et
ot
hose
whi
c
h may subsequent
l
y be di
r
ect
ed
agai
nstt
heot
he
r
s,sol
ongast
hedebthas
notbeenf
ul
l
ycol
l
ect
ed.
BALANE CASES:
PNB V.I
NDEPENDENT PLANTERS [
122
SCRA 113]- I
foneoft
heal
l
egedsol
i
dar
y
debt
os di
es dur
i
ng t
he pendenc
y of t
he
c
ol
l
ec
t
i
on c
ase,t
he c
our
twher
e sai
dc
ase
i
s pendi
ng r
e
t
ai
ns j
ur
i
sdi
c
t
i
on t
oc
ont
i
nue
hear
i
ngt
hec
har
geasagai
ns
tt
hesur
vi
vi
ng
def
endant
s.
- I
ti
s cr
yt
alcl
e
ar t
hatAr
t
.
1216 i
st
he appl
i
cabl
e pr
ovi
si
on i
nt
hi
s
mat
t
e
r
. Sai
d pr
ovi
si
on gi
ves t
he c
r
e
di
t
or
t
her
i
ghtt
opr
oceed agai
ns
tanyoneoft
he
sol
i
dar
y debt
or
s or some or al
loft
hem
si
mul
t
aneousl
y
.Thec
hoi
c
ei
sundoubt
edl
y
l
ef
tt
ot
he sol
i
dar
yc
r
edi
t
or t
o det
er
mi
ne
agai
nstwhome he wi
l
lenf
or
c
ec
ol
l
ec
t
i
on.
I
n case of t
he deat
h of t
he sol
i
dar
y
debt
or
s
, he (
t
he c
r
e
di
t
or
)may
,i
f he so
c
hooses, pr
oceed agai
ns
tt
he sur
vi
vi
ng
sol
i
dar
y debt
or
s w/o necessi
t
y offil
i
ng a
cl
ai
mi
nt
hee
st
at
eoft
hedeceaseddebt
or
s
.
I
ti
snotmandat
or
yf
orhi
mt
ohavet
hec
ase
di
smi
ssed agai
nst t
he sur
vi
vi
ng debt
or
s
and fil
ei
t
sc
l
ai
m i
n t
he est
at
e of t
he
dec
easedsol
i
dar
ydebt
or
.
Rul
es of Pr
oc
edur
ec
anno
t pr
evai
l
oversubst
ant
i
vel
aw.
-I
fSec.6,Rul
e86,
ROC we
r
e appl
i
ed l
i
t
er
al
l
y
, Ar
t
. 1216
woul
d,i
n effect
,be r
epeal
ed si
nc
e under
t
he ROC,pe
t
i
t
i
onerhas no c
hoi
ce butt
o
pr
oceed agai
ns
tt
he est
at
e of Manuel
Bar
r
edo onl
y
. Obvi
ousl
y
,t
hi
s pr
ovi
si
on
di
mi
ni
shes t
he Bank'
sr
i
ght under t
he
NCC t
opr
oceed agai
ns
tany one,someor
al
l of t
he sol
i
dar
y debt
or
s. Such a
cons
t
r
uct
i
on i
s not sanc
t
i
one
d by t
he
pr
i
nci
pl
e xxx t
hat a s
ubst
ant
i
ve l
aw
cannotbe amended by a pr
ocedur
all
aw.
Ot
her
wi
ses
t
at
ed,Sec
.6ofRul
e86cannot
be made t
o pr
ev
ai
lover Ar
t
. 1216, t
he
f
or
merbei
ngme
r
e
l
y pr
oce
dur
al
,whi
l
et
he
l
at
t
er
,subs
t
ant
i
v
e.
OUANO V.ALEONAR [
202 SCRA 619] The c
r
edi
t
ormay pr
oc
eed agai
ns
tany one
oft
he sol
i
dar
y debt
or or some or al
lof
t
hem si
mul
t
aneousl
y.
- I
ft
hat wer
et
o
happen,pe
t
i
t
i
one
rhasonl
yi
t
sel
ft
obl
ame.
I
tal
l
owed t
he pe
r
i
od f
or appealt
ol
apse
w/o appeal
i
ng. Ar
t
.1216 pr
ovi
des t
hat
"
[
T]
he cr
edi
t
or may pr
oceed agai
nst any
oneoft
hesol
i
dar
yde
bororsomeoral
lof
t
hem si
mul
t
aneousl
y
.
" Thus I
PI
, as
sol
i
dar
y cr
edi
t
or
,has t
he r
i
ghtt
o enf
or
ce
t
het
r
i
alcour
t
'
sdeci
si
on agai
ns
tpe
t
i
t
i
oner
OASI
.
xxx
Ar
t
.1217.Paymentmadebyoneof
t
he sol
i
dar
y debt
or
s ext
i
ngui
shes t
he
obl
i
gat
i
on.I
ft
wo ormor
esol
i
dar
ydebt
or
s
offert
opay
,t
hec
r
e
di
t
ormayc
hoosewhi
ch
offert
oaccept
.
He who made t
he payment may
cl
ai
m f
r
om hi
s codebt
or
s onl
yt
he shar
e
whi
c
h cor
r
e
sponds t
o each, wi
t
h t
he
i
nt
e
r
e
stf
ort
he paymental
r
eady made.I
f
t
he paymenti
s made bef
or
et
he debt i
s
due,no i
nt
e
r
e
stf
ort
hei
nt
er
v
eni
ngper
i
od
maybede
manded.
Whe
n one oft
he sol
i
dar
y debt
or
s
cannot
, because of hi
s i
nsol
venc
y
,
r
ei
mbur
se hi
s shar
et
ot
he debt
orpayi
ng
t
he obl
i
gat
i
on,suc
h shar
eshal
lbe bor
ne
byal
lhi
scode
bt
or
s
,i
n pr
opor
t
i
on t
ot
he
debtofeac
h.
Ar
t
.1218. Paymentby a sol
i
dar
y
debt
or shal
l not ent
i
t
l
e hi
m
t
o
r
ei
mbur
sementf
r
om hi
scodebt
or
si
fsuch
paymenti
s made af
t
ert
heobl
i
gat
i
on has
pr
escr
i
bedorbecomei
l
l
egal
.
Ar
t
.1219. Ther
emi
ssi
on madeby
t
hecr
edi
t
oroft
heshar
ewhi
ch affect
sone
oft
hes
ol
i
dar
yde
bt
or
sdoesnotr
el
easet
he
l
at
t
er f
r
om hi
sr
esponsi
bi
l
i
t
yt
owar
ds t
he
codebt
or
s, i
n case t
he debt has been
t
ot
al
l
y pai
d by anyone oft
hem bef
or
et
he
r
emi
ssi
onwaseffect
ed.
Bal
ane: EffectofRemi
ssi
on.
- Pr
obl
em:
Sol
i
dar
ydebt
or
sW,X,Y & Z ar
ei
ndebt
e
d
t
oA f
orP12,
000. A r
e
mi
t
st
hes
har
eofY
(
P3,
000.
)
Q:CanYbesued?
A: Yes,f
or t
he P9,
000 (
P12,
000
l
essP3,
000shar
eofY.
)
Q:Supposi
ngX i
si
nsol
v
ent
?
A: Y can s
t
i
l
l be made t
o
cont
r
i
but
e
. Remi
ssi
on wi
l
lbenefitY onl
y
i
n so f
aras hi
s shar
ei
s concer
ned. Hi
s
l
i
abi
l
i
t
yi
n case ofi
nsol
vency ofone cocr
edi
t
ori
snotaffect
e
d.
Q: Can A demandt
heP9,
000f
r
om
Y.
A: Yes. But he can r
ecov
er t
he
samef
r
om W,X& Z.
Ar
t
.1220. The r
e
mi
ssi
on oft
he
whol
e obl
i
gat
i
on,obt
ai
ne
d by one oft
he
sol
i
dar
y de
bt
or
s,does notent
i
t
l
e hi
m t
o
r
ei
mbur
sementf
r
om hi
scodebt
or
s.
Ar
t
.1221. I
ft
he t
hi
ng has been
l
ost or i
ft
he pr
es
t
at
i
on has become
i
mpossi
bl
ewi
t
houtt
hef
aul
toft
hesol
i
dar
y
debt
or
s
, t
he obl
i
gat
i
on shal
l be
e
xt
i
ngui
shed.
I
ft
he
r
ewasf
aul
ton t
hepar
tofany
oneoft
hem,al
lshal
lber
esponsi
bl
et
ot
he
cr
edi
t
or
,f
ort
hepr
i
ceand t
hepaymentof
damagesandi
nt
er
est
,wi
t
houtpr
ej
udi
cet
o
t
hei
ract
i
on agai
ns
tt
hegui
l
t
yorne
gl
i
gent
debt
or
.
I
ft
hr
ough a f
or
t
ui
t
ous event
,t
he
t
hi
ng i
s l
ost or t
he per
f
or
mance has
becomei
mpossi
bl
eaf
t
eroneoft
hesol
i
dar
y
debt
or
shasi
ncur
r
ed i
n de
l
ayt
hr
ough t
he
j
udi
ci
alorext
r
aj
udi
ci
aldemand upon hi
m
by t
he cr
edi
t
or
,t
he pr
ovi
si
ons of t
he
pr
ecedi
ngpar
agr
aphshal
lappl
y
.
Ar
t
.1895. I
fsol
i
dar
i
t
y has been
agr
e
ed upon, each of t
he agent
s i
s
r
esponsi
bl
ef
ort
he nonf
ul
fil
l
mentoft
he
agency
,and f
ort
he f
aul
tornegl
i
gence of
hi
sf
el
l
ow agent
s
,e
xcepti
nt
hel
at
t
e
rc
ase
when t
he f
el
l
ow agent
s act
ed beyond t
he
scopeoft
hei
raut
hor
i
t
y
.
Ar
t
.1222. A sol
i
dar
y debt
ormay
,
i
n act
i
ons fil
ed by t
he cr
edi
t
or
, av
ai
l
hi
msel
fofal
ldef
enses whi
c
h ar
e der
i
v
ed
f
r
om t
he nat
ur
e oft
he obl
i
gat
i
on and of
t
hose whi
ch ar
e per
sonal t
o hi
m, or
per
t
ai
nt
ohi
sown shar
e.Wi
t
hr
espectt
o
t
hose whi
ch per
sonal
l
y bel
ong t
o t
he
ot
her
s,he may avai
lhi
msel
ft
her
eofonl
y
asr
egar
dst
hatpar
toft
hede
btf
orwhi
c
h
t
hel
at
t
e
rar
er
espons
i
bl
e.
Bal
ane:
Thr
eeDef
ensesi
nPassi
v
eSol
i
dar
i
t
y:
1. Those der
i
v
ed f
r
om t
he nat
ur
e oft
he
obl
i
gat
i
on i
s a t
ot
al def
ense, e.
g.
,
pr
escr
i
pt
i
on,i
l
l
egal
i
t
yofobl
i
gat
i
on.
2. Thosedef
ense
sper
sonalt
ot
hedebt
or
def
endant
, e.
g.
,i
ns
ani
t
y
. I
fi
ti
nvol
v
es
vi
t
i
at
i
on ofcons
ent
,t
ot
alde
f
ens
e. I
fi
t
i
nv
ol
ves a s
peci
alt
er
m ora condi
t
i
on,a
par
t
i
aldef
ense.
3. Those def
enses per
sonal t
o ot
he
r
debt
or
s
,e.
g.
,par
t
i
aldef
ense,i
sa def
ense
as t
ot
he shar
e cor
r
espondi
ng t
o ot
her
debt
or
s
.
)
BALANE CASE:
UNI
VERSALMOTORSV.CA [
205S448]When t
he obl
i
gat
i
on oft
he o
t
hersol
i
dar
y
debt
or
si
ssodependentont
hatoft
hei
rc
osol
i
dar
y debt
or
,t
her
el
easeoft
heonewho
appeal
ed,pr
o
vi
ded i
tbe noton gr
ounds
per
sonalt
o suc
h appeal
i
ng pr
i
vat
er
esp.
oper
at
esas wel
last
ot
heot
her
swhodi
d
notappeal
. I
ti
sf
ort
hi
sr
e
ason,t
hata
deci
si
on orj
udgmenti
nf
av
oroft
hepr
i
vat
e
r
esp.who appeal
ed c
an bei
nvoked asr
es
j
udi
c
at
abyt
heot
he
rpr
i
vat
er
espondent
s.
xxx I
ti
s obvi
ous t
hatt
her
esp.
cour
tcommi
t
t
e
dnoer
r
ori
nr
ul
i
ngt
hati
t
s
deci
si
on i
nur
es t
ot
he benefit ofal
lt
he
pr
i
v
at
er
esps.r
egar
dl
ess oft
he f
actt
hat
onl
yoneappeal
ed. I
ti
se
r
r
oneoust
or
ul
e
t
hatt
hedeci
si
onoft
het
r
i
alcour
tc
oul
dbe
r
e
ve
r
sed as t
ot
he appeal
i
ng pr
v
at
er
esp.
and cont
i
nue i
nf
or
ce agai
nst t
he ot
her
pvt
.r
esps. The l
at
t
er c
oul
d notr
emai
n
bound af
t
e
rt
hef
or
merhad been r
el
eased;
al
t
hough t
he ot
her pvt
.r
esps had not
j
oi
nedi
nt
heappeal
,t
hedeci
s
i
on r
ende
r
ed
byt
her
es
p.cour
ti
nur
edt
ot
hei
rbenefit
.
Ar
t
.
1215.
Novat
i
on,
compensat
i
on,conf
usi
on or r
e
mi
ssi
on of
t
he debt
, made by any of t
he sol
i
dar
y
cr
edi
t
or
s or wi
t
h any of t
he sol
i
dar
y
debt
or
s
, shal
l ext
i
ngui
sh t
he obl
i
gat
i
on,
wi
t
hout pr
ej
udi
ce t
o t
he pr
ovi
si
ons of
ar
t
i
cl
e1219.
The cr
edi
t
or who may hav
e
e
xecut
e
d any oft
hese act
s
,aswel
las he
whoc
ol
l
ect
st
hede
bt
,shal
lbel
i
abl
et
ot
he
ot
her
sf
or t
he shar
ei
n t
he obl
i
gat
i
on
cor
r
espondi
ngt
ot
he
m.
Ar
t
. 1219.
The
r
emi
ssi
on made by t
he
cr
edi
t
oroft
he shar
e whi
c
h
affect
s one oft
he sol
i
dar
y
debt
or
sdoesnotr
el
easet
he
l
at
t
erf
r
om hi
sr
esponsi
bi
l
i
t
y
t
owar
ds t
he codebt
or
s
,i
n
case t
he debt had been
t
ot
al
l
y pai
d by anyone of
t
hem be
f
or
et
he r
emi
ssi
on
waseffect
ed.
4.Ac
c
or
di
ngt
oPer
f
or
manc
e:
I
ndi
vi
si
bl
e
Obl
i
gat
i
ons
and
Di
v
i
si
bl
e
Bal
ane: Thi
s ki
nd of obl
i
gat
i
ons has
some
t
hi
ng t
odow/ t
hepr
es
t
at
i
on,nott
o
t
het
hi
ng.
Di
vi
si
bl
e
obl
i
gat
i
on
i
s
one
suscept
i
bl
e of par
t
i
al per
f
or
manc
e. An
i
ndi
vi
si
bl
e obl
i
gat
i
on i
s one t
hatmus
tbe
per
f
or
medi
noneac
t
.
Gener
al r
ul
e:
Obl
i
gat
i
on i
s
i
ndi
vi
si
bl
e w/c means t
hati
t has t
o be
per
f
or
med i
n one actsi
ngl
y
. Why? Bec
.
t
he l
aw pr
ovi
des so: Unl
e
ss t
her
ei
s an
e
xpr
ess s
t
i
pul
at
i
on t
o t
hat effect
,t
he
cr
edi
t
or cannotbe compel
l
ed par
t
i
al
l
yt
o
r
ecei
v
e t
he pr
es
t
at
i
ons i
n whi
ch t
he
obl
i
gat
i
on consi
s
t
s. Nei
t
he
r may t
he
debt
or be r
e
qui
r
e
d t
o make par
t
i
al
payment
s
.xxx (
Ar
t
.1248,par
.1.
)
Thr
ee Except
i
ons t
o t
he Rul
e on
I
ndi
vi
si
bi
l
i
t
y:
1. When t
he par
t
i
es so pr
ovi
de. (
Ar
t
.
1248,par
.1.
)
2. Whe
n t
he nat
ur
e of t
he obl
i
gat
i
on
necessar
i
l
yent
ai
l
spe
r
f
or
mancei
npar
t
s
.
3.Whe
r
et
hel
aw pr
ovi
desot
he
r
wi
se.
Di
vi
si
bi
l
i
t
y of Obl
i
gat
i
on di
s
t
i
ngui
shed
f
r
om di
vi
si
bi
l
i
t
yofobj
ect
.
- Di
vi
si
bi
l
i
t
yof
obl
i
gat
i
on or pr
e
s
t
at
i
on does not
necessar
i
l
y mean a di
vi
si
bl
e obl
i
gat
i
on.
Di
vi
si
bi
l
i
t
y ofobj
ect i
s not t
he same as
di
vi
si
bi
l
i
t
yofobl
i
gat
i
on.Butt
her
ev
er
s
ei
s
not t
he s
ame. I
ndi
vi
si
bi
l
i
t
y of obj
e
ct
meansani
ndi
vi
si
bi
l
eobl
i
gat
i
on.
Ar
t
. 1223. The di
vi
si
bi
l
i
t
y or
i
ndi
vi
si
bi
l
i
t
y of t
he t
hi
ngs t
hat ar
et
he
obj
e
ctofobl
i
gat
i
onsi
n whi
c
ht
her
ei
sonl
y
onede
bt
orand onl
yonecr
edi
t
ordoesnot
al
t
e
rormodi
f
yt
hepr
ovi
si
onsofChapt
e
r2
of t
hi
s Ti
t
l
e (
Nat
ur
e and Effect of
Obl
i
gat
i
ons)
.
Ar
t
. 1224. A j
oi
nt i
ndi
vi
si
bl
e
obl
i
gat
i
on gi
ves r
i
se t
o i
nde
mni
t
y f
or
damages f
r
om t
he t
i
me anyone of t
he
debt
or
s does not compl
y wi
t
h hi
s
under
t
aki
ng.The debt
or
s who may hav
e
been r
eady t
of
ul
fil
lt
hei
r pr
omi
ses shal
l
notcont
r
i
but
et
ot
hei
ndemni
t
ybeyondt
he
cor
r
espondi
ng por
t
i
on oft
he pi
ce oft
he
t
hi
ng or of t
he val
ue of t
he ser
vi
ce i
n
whi
c
ht
heobl
i
gat
i
onc
onsi
s
t
s.
suscept
i
bl
eofpar
t
i
alper
f
or
manceshal
lbe
deemedt
obei
ndi
vi
si
bl
e.
Whe
n t
he obl
i
gat
i
on has f
or i
t
s
obj
e
ctt
heexecut
i
onofacer
t
ai
nnumberof
daysofwor
k,t
heaccompl
i
shmentofwor
k
by me
t
r
i
cal uni
t
s, or anal
ogous t
hi
ngs
whi
c
h by t
he
i
r nat
ur
e ar
es
uscept
i
bl
e of
par
t
i
alper
f
or
mance,i
tshal
lbedi
vi
si
bl
e.
Howev
er
,ev
en t
hough t
heobj
ector
ser
vi
ce may be physi
cal
l
y di
vi
si
bl
e
, an
obl
i
gat
i
on i
si
ndi
vi
si
bl
ei
fso pr
ovi
ded by
l
aw ori
nt
endedbyt
hepar
t
i
es.
I
n obl
i
gat
i
onsnott
odo,di
vi
si
bi
l
i
t
y
ori
ndi
vi
si
bi
l
i
t
ys
hal
lbede
t
e
r
mi
nedbyt
he
c
har
act
e
r of t
he pr
es
t
at
i
on i
n eac
h
par
t
i
cul
arcase.
Ar
t
. 1209. I
ft
he di
vi
si
on i
s
i
mpossi
bl
e,t
her
i
ghtoft
hecr
edi
t
or
smay
bepr
ej
udi
ced onl
ybyt
hei
rcol
l
ect
i
veact
s,
and t
he debt can be enf
or
ced onl
y by
pr
oceedi
ngagai
ns
tal
lt
hedebt
or
s.I
foneof
t
he l
at
t
e
rshoul
d be i
nsol
vent
,t
he ot
her
s
shal
lnotbel
i
abl
ef
orhi
sshar
e.
Exampl
esofI
ndi
vi
si
bl
eObl
i
gat
i
ons
(
1)Byvi
r
t
ueofi
t
sobj
ect
Ar
t
. 618.
Easement
s ar
e
i
ndi
vi
si
bl
e
.I
ft
hes
er
vi
entest
at
ei
sdi
v
i
ded
be
t
ween t
wo or mor
e per
s
ons
, t
he
easement i
s not modi
fied, and eac
h of
t
hem mus
t bear i
t on t
he par
t whi
ch
cor
r
espondst
ohi
m.
I
fi
ti
st
hedomi
nantes
t
at
et
hati
s
di
vi
dedbe
t
weent
woormor
eper
sons
,eac
h
of t
hem may use t
he easement i
n i
t
s
ent
i
r
e
t
y
,wi
t
houtc
hangi
ng t
hepl
aceofi
t
s
use,ormaki
ngi
tmor
ebur
dens
omei
nany
ot
herway
.
(
2)Expr
esspr
ovi
si
onofl
aw
Ar
t
.1225. Fort
hepur
posesoft
he
pr
ecedi
ng ar
t
i
cl
es, obl
i
gat
i
ons t
o gi
v
e
defini
t
et
hi
ngs and t
hose whi
ch ar
e not
Ar
t
.2089. A pl
e
dgeormor
t
gagei
s
i
ndi
vi
si
bl
e
,ev
en t
hough t
he debtmay be
di
vi
ded among t
he successor
si
ni
nt
er
est
oft
hedebt
ororoft
hecr
edi
t
or
.
Ther
ef
or
e
,t
hedebt
or
'
shei
rwhohas
pai
d apar
toft
hedebtc
annotask f
ort
he
pr
opor
t
i
onat
e e
xt
i
ngui
shment of t
he
pl
edgeormor
t
g
ag
easl
ong ast
hedebti
s
notcompl
e
t
el
ys
at
i
sfied.
Nei
t
hercan t
hecr
e
di
t
or
'
shei
rwho
r
ecei
v
ed hi
s shar
e oft
he debtr
e
t
ur
nt
he
pl
edge or cancel t
he mor
t
gage
,t
ot
he
pr
ej
udi
ce oft
heot
herhei
r
swho havenot
beenpai
d.
Fr
om t
hese pr
ovi
si
ons, i
t i
s
e
xpect
ed t
he case i
n whi
c
h,t
her
e bei
ng
se
ver
alt
hi
ngsgi
ven i
n mor
t
gageorpl
edge,
eac
h one of t
he
m guar
ant
ees onl
y a
de
t
er
mi
nat
epor
t
i
onoft
hec
r
e
di
t
.
Thedebt
or
,i
nt
hi
sc
ase,shal
lhav
e
ar
i
ghtt
ot
heext
i
ngui
shmentoft
hepl
edge
ormor
t
gageast
hepor
t
i
on oft
hedebtf
or
whi
c
heacht
hi
ngi
sspeci
al
l
yanswe
r
abl
ei
s
sat
i
sfied.
Ar
t
.2090. The i
ndi
vi
si
bi
l
i
t
y ofa
pl
edge ormor
t
g
ag
ei
s notaffect
ed by t
he
f
act t
hat t
he debt
or
s ar
e not sol
i
dar
i
l
y
l
i
abl
e.
Ar
t
. 1612. I
f se
ver
al per
sons,
j
oi
nt
l
y and i
nt
he same cont
r
act
,shoul
d
sel
lan undi
vi
ded i
mmovabl
e wi
t
h ar
i
ght
ofr
epur
c
hase,noneoft
hem mayexer
ci
s
e
t
hi
sr
i
ght f
or mor
et
han hi
sr
e
spect
i
v
e
shar
e.
The same r
ul
e shal
lappl
yi
ft
he
per
son who sol
d an i
mmov
abl
eal
one has
l
ef
tsev
er
alhei
r
s
,i
nwhi
chc
aseeac
hoft
he
l
at
t
ermayonl
yr
edeem t
hepar
twhi
c
h he
mayhav
eacqui
r
ed.
shoul
d t
he
yf
ai
lt
o do so, t
he vendee
cannotbecompel
l
e
dt
ocons
entt
oapar
t
i
al
r
edempt
i
on.
Ar
t
. 1248. Unl
ess t
her
ei
s an
e
xpr
ess s
t
i
pul
at
i
on t
o t
hat effect
,t
he
cr
edi
t
or cannotbe compel
l
ed par
t
i
al
l
yt
o
r
ecei
v
e t
he pr
es
t
at
i
ons i
n whi
ch t
he
obl
i
gat
i
onconsi
s
t
s.Nei
t
hermayt
hedebt
or
ber
equi
r
e
dt
omakepar
t
i
alpayment
s
.
Howev
er
,when t
hedebti
si
n par
t
l
i
qui
dat
e
d and i
n par
tunl
i
qui
dat
e
d,t
he
cr
edi
t
ormaydemand and t
hedebt
ormay
effectt
he paymentoft
he f
or
me
rwi
t
hout
wai
t
i
ngf
ort
hel
i
qui
dat
i
onoft
hel
at
t
e
r
.
Ar
t
. 1583.
Unl
ess ot
he
r
wi
se
agr
e
ed,t
hebuyerofgoodsi
snotboundt
o
acceptdel
i
v
er
yt
he
r
eofbyi
ns
t
al
l
ment
s
.
Whe
r
et
her
ei
sacont
r
actofs
al
eof
goods t
o be del
i
v
er
ed by s
t
at
e
d
i
nst
al
l
ment
s,whi
ch ar
et
o be separ
at
e
l
y
pai
df
or
,and t
he sel
l
e
r makes def
ect
i
v
e
del
i
ver
i
es i
n r
e
spect of one or mor
e
i
nst
al
l
ment
s, or t
he buy
er negl
ect
s or
r
ef
use
swi
t
houtj
us
tcauset
ot
akedel
i
v
er
y
oforpay f
orone ormor
ei
ns
t
al
l
ment
s,i
t
dependsi
n eac
h caseon t
het
er
msoft
he
cont
r
act and t
he ci
r
cums
t
ances of t
he
case,whe
t
hert
hebr
e
ach ofc
ont
r
acti
ss
o
mat
e
r
i
alast
oj
us
t
i
f
yt
hei
nj
ur
ed par
t
yi
n
r
ef
usi
ng t
o pr
oceed f
ur
t
he
rand sui
ng f
or
damagesf
orbr
eac
h oft
heent
i
r
ec
ont
r
act
,
orwhe
t
hert
hebr
e
ach i
ss
ev
er
abl
e,gi
vi
ng
r
i
set
oacl
ai
mf
orcompensat
i
on butnott
o
ar
i
ght t
ot
r
e
at t
he whol
e cont
r
ac
t as
br
oken.
(
3)Expr
essagr
eee
ment
Ar
t
. 1613. I
n t
he case of t
he
pr
ecedi
ngar
t
i
cl
e,t
hev
endeemayde
mand
ofal
lt
he vendor
s or cohei
r
st
hat t
hey
come t
o an agr
eement upon t
he
r
epur
c
haseoft
hewhol
et
hi
ng sol
d;anbd
Ar
t
.1714. I
ft
hec
ont
r
ac
t
oragr
ees
t
o pr
oduce t
he wor
k f
r
om mat
e
r
i
al
f
ur
ni
shed by hi
m, he shal
l del
i
ver t
he
t
hi
ng pr
oduced t
o t
he empl
oy
er and
t
r
ansf
er domi
ni
on over t
he t
hi
ng. Thi
s
cont
r
actshal
lbegov
er
nedbyt
hef
ol
l
owi
ng
ar
t
i
cl
es as we
l
l as by t
he pe
r
t
i
nent
pr
ovi
si
onson war
r
ant
yoft
i
t
l
eandagai
nst
hi
ddendef
ect
sandt
hepaymentofpr
i
cei
n
acont
r
actofs
al
e
.
(
a) I
ft
her
ei
sas
t
i
pul
at
i
on t
hat
bot
h penal
t
yand damagesar
er
ecover
abl
e
i
ncaseofbr
eac
h
(
b) I
ft
heobl
i
gorr
e
f
usest
opayt
he
penal
t
y
(
c) I
ft
heobl
i
gori
sgui
l
t
yoff
r
aud
i
nt
hef
ul
fil
l
mentofhi
sobl
i
gat
i
on.
5.Ac
c
or
di
ngt
oSanc
t
i
onsf
orBr
eac
h:
A.Si
mpl
e
B.Obl
i
gat
i
onswi
t
haPenalCl
ause
Bal
ane:
Ar
t
i
cl
es 1226 t
o 1230 on obl
i
gat
i
on w/ a
penal cl
ause i
st
he same as l
i
qui
dat
e
d
damagesf
oundi
nAr
t
i
cl
es2226t
o2228by
aut
hor
i
t
yofLamber
tv
.Fox,26Phi
l
.588.
Pe
nal Cl
ause.
- A penal cl
ause i
s an
accessor
y under
t
aki
ng t
o assume gr
eat
e
r
l
i
abi
l
i
t
yi
n caseofbr
each. Thepur
posei
s
t
os
t
r
engt
hen t
he coer
ci
ve f
or
c
e of t
he
obl
i
gat
i
on. When a penal cl
ause i
s
pr
esent
,damagesdonothavet
obepr
oved.
Char
act
er
i
s
t
i
csofPe
nalCl
ause:
1. Subsi
di
ar
y(
al
socal
l
e
d al
t
er
nat
i
ve)w/c
means t
hatupon nonper
f
or
manc
e,onl
y
t
hepenal
t
ymaybedemanded.
Except
i
on: Wher
e penal
t
yi
sj
oi
nt
(
cumul
at
i
ve) - wher
e bot
ht
he pr
i
nc
i
pal
under
t
aki
ng and penal
t
y may be
demanded - Ar
t
.1227,secondse
nt
e
nce:
"
xxx unl
ess t
hi
sr
i
ght has been cl
ear
l
y
gr
ant
edhi
m.
" Not
i
cet
hewor
dcl
ear
l
y(
not
e
xpl
i
ci
t
l
y)w/cmeanst
hatt
her
i
ghtcanbe
cl
ear
l
ygr
ant
e
dbyi
mpl
i
cat
i
on.
2. Exc
l
usi
ve w/c means t
hat a penal
cl
ausei
sf
orr
e
par
at
i
on. I
tt
akest
hepl
ace
ofdamages.
Except
i
on: When i
ti
s f
or t
he
puni
shmenti
n w/ccasebot
h penal
t
yand
damagesmaybede
manded,namel
y-
Ar
t
.1226. I
n obl
i
g
at
i
ons wi
t
ha
penalcl
ause,t
hepenal
t
y shal
lsubst
i
t
ut
e
t
he i
ndemni
t
y f
or damages and t
he
payment of i
nt
e
r
es
t
s i
n c
ase of noncompl
i
ance,i
ft
he
r
ei
snos
t
i
pul
at
i
ont
ot
he
cont
r
ar
y
.Nev
er
t
hel
ess,damages shal
lbe
pai
d i
ft
he obl
i
gor r
ef
uses t
o pay t
he
penal
t
y or i
s gui
l
t
y of f
r
aud i
n t
he
f
ul
fil
l
mentoft
heobl
i
gat
i
on.
The penal
t
y may be enf
or
ced onl
y
when i
ti
sdemandabl
ei
naccor
dancewi
t
h
t
hepr
ovi
si
onsoft
hi
sCode.
BALANE CASES:
BACHRACH V.ESPI
RI
TU [
52 P 346] Ar
t
. 1152 of t
he OCC per
mi
t
s t
he
agr
e
ementupon a pe
nal
t
y apar
tf
r
om t
he
i
nt
e
r
e
st
. Shoul
d t
her
e be suc
h an
agr
e
ement
,t
he penal
t
y xxx does not
i
ncl
udet
hei
nt
e
r
es
t
,and assuc
ht
het
wo
ar
edi
ffer
entand di
s
t
i
nctt
hi
ngsw/cmay
be demanded separ
at
e
l
y
. The penal
t
yi
s
not t
o be added t
ot
he i
nt
er
es
tf
or t
he
de
t
er
mi
nat
i
on of whe
t
he
r t
he i
nt
er
est
e
xceeds t
he r
at
e fixed by l
aw,si
nce sai
d
r
at
ewasfixedonl
yf
ort
hei
nt
e
r
e
st
.
ROBESFRANCI
SCO V.CFI [
86 S 59] Pe
t
i
t
i
oner cont
ends t
hat t
he deed of
absol
ut
e sal
e execut
e
d be
t
.t
he par
t
i
es
s
t
i
pul
at
es t
hatshoul
dt
he v
endor f
ai
lt
o
i
ssuet
het
r
ans
f
ercer
t
.oft
i
t
l
ew/i
n 6mos.
f
r
om t
he dat
e of f
ul
l payment
,i
t shal
l
r
ef
undt
ot
hevendeet
het
ot
alamountpai
d
f
or w/ i
nt
e
r
est at t
he r
at
e of 4% p.
a.
,
hence,t
hev
endeei
sboundbyt
het
er
msof
t
he pr
ovi
si
on and cannot r
ecov
er mor
e
t
hanwhati
sagr
eedupon.xxx
HELD:
The f
or
egoi
ng ar
gument of
pe
t
i
t
i
oner i
st
ot
al
l
y de
voi
d ofmer
i
t
. We
woul
d agr
eew/ pe
t
i
t
i
oneri
ft
hec
l
ausei
n
ques
t
i
on wer
et
obeconsi
der
edasape
nal
cl
ause. Nev
er
t
hel
ess, f
or v
er
y obvi
ous
r
easons,sai
d cl
ause doesnotconvey any
penal
t
y
,f
or even wi
t
houti
t
,pur
s
uantt
o
Ar
t
.2209oft
heNCC,t
hev
endeewoul
dbe
ent
i
t
l
edt
or
ecovert
heamountpai
dbyher
w/ l
egalr
at
eofi
nt
er
es
tw/ci
s even mor
e
t
hant
he4% pr
o
vi
dedf
ori
nt
hecl
ause.
Bal
ane: The SC consi
der
ed t
he 4%
i
nt
e
r
e
stasnotapenalcl
ausebec.i
tdoes
not st
r
engt
he
nt
he coer
ci
v
ef
or
ce oft
he
obl
i
gat
i
on.
PAMI
NTUAN V.CA [
94S 556] - Wehol
d
t
hat appel
l
ant
'
s cont
ent
i
on cannot be
sus
t
ai
nedbec.t
hese
condsent
enceofar
t
.
1226 i
t
sel
f pr
ovi
des t
hat "
never
t
he
l
e
ss,
damagess
hal
lbepai
di
ft
heobl
i
gorxxxi
s
gui
l
t
y off
r
aud i
nt
he f
ul
fil
l
ment oft
he
obl
i
gat
i
on.
" xxx The t
r
i
alcour
tand t
he
CA f
ound t
hat Pami
nt
uan was gui
l
t
y of
f
r
aud bec.he di
d not make a compl
e
t
e
del
i
ver
y oft
he pl
as
t
i
c shee
t
i
ngs and he
over
pr
i
cedt
hesame. xxx
Penal
t
yandLi
qui
dat
eddamages.
Ther
ei
s no j
us
t
i
ficat
i
on f
or t
he NCC t
o
makean appar
e
ntdi
st
i
nct
i
on be
t
.pe
nal
t
y
and l
i
qui
dat
ed damages bec.t
he se
t
t
l
ed
r
ul
ei
st
hat t
he
r
ei
s no di
ffer
e
nce be
t
.
penal
t
yand l
i
qui
dat
eddamagesi
nsof
aras
l
egalr
e
sul
t
sar
econcer
nedandei
t
he
rmay
ber
ecov
er
ed w/o t
henecessi
t
y ofpr
ovi
ng
act
ualdamage
sand bot
h mayber
e
duced
whenpr
oper
.
xxx
Wef
ur
t
herhol
dt
hatj
ust
i
cewoul
d
be adequat
el
y done i
n t
hi
s case by
al
l
owi
ng Yu Pi
ng Kun Co.
,I
nc.t
or
ecov
er
onl
yt
he act
ualdamages pr
ov
en,and not
t
o awar
dt
oi
tt
he s
t
i
pul
at
e
dl
i
qui
dat
e
d
damagesofP10,
000 f
oranybr
each oft
he
cont
r
act
. Thepr
oven damages super
sede
t
hest
i
pul
at
edl
i
qui
dat
eddamages.
Thi
s vi
e
w finds suppor
ti
n t
he
opi
ni
on ofManr
esa t
hati
nc
asesoff
r
aud
t
hedi
ffer
encebe
t
.t
hepr
ov
endamagesand
t
hes
t
i
pul
at
edpenal
t
ymayber
ec
over
ed.
COUNTRYBANKERS V.CA [
201S458] A pr
ovi
si
on w/c cal
l
sf
ort
he f
or
f
ei
t
ur
e of
t
he r
emai
ni
ng deposi
t st
i
l
l i
n t
he
possessi
on oft
hel
essor
,w/o pr
ej
udi
cet
o
any ot
her obl
i
gat
i
on s
t
i
l
l owi
ng, i
n t
he
e
ventoft
het
e
r
mi
nat
i
on orc
anc
el
l
at
i
on of
t
he agr
e
ement by r
eason oft
he l
essee'
s
vi
ol
at
i
on of any of t
he t
er
ms and
condi
t
i
ons of t
he agr
eement i
s a penal
cl
auset
hatmaybeval
i
dl
yent
e
r
edi
nt
o. A
penal c
l
ause i
s an ac
c
essor
y obl
i
gat
i
on
w/c t
he par
t
i
es at
t
ac
h t
o a pr
i
nc
i
pal
obl
i
gat
i
on f
ort
he pur
pose ofi
nsur
i
ng t
he
per
f
or
manc
et
her
eof by i
mposi
ng on t
he
debt
or a spec
i
al pr
es
t
at
i
on (
gener
al
l
y
c
onsi
s
t
i
ng i
nt
he payment of a sum of
money)i
nc
aset
heobl
i
gat
i
oni
snotf
ul
fil
l
ed
or i
si
r
r
egul
ar
l
y or i
nadequat
el
yf
ul
fil
l
ed.
Asag
ener
alr
ul
e,i
nobl
i
gat
i
onsw/apenal
cl
ause, t
he penal
t
y shal
l subst
i
t
ut
et
he
i
ndemni
t
yf
ordamagesandt
hepaymentof
i
nt
e
r
e
st
si
n caseofnoncompl
i
ance. Thi
s
i
s speci
fical
l
y pr
ovi
ded f
or i
n Ar
t
.1226,
par
. 1. I
n suc
h case, pr
oof of act
ual
damages suffer
ed by t
he c
r
edi
t
or i
s not
necessar
yi
nor
dert
hatt
hepenal
t
ymaybe
demanded.xxx
Butt
her
ear
ec
aseswhen bot
ht
he
penal
t
y and t
he act
ualdamages may be
r
ecov
er
e
d, suc
h as when t
he
r
e i
s a
s
t
i
pul
at
i
on t
ot
he cont
r
ar
y or when t
he
obl
i
gori
sgui
l
t
yoff
r
aud.
Bal
ane: Count
r
y Banke
r
s case i
s be
t
t
e
r
t
han Pami
nt
uan v
.CA. Bot
ht
he penal
t
y
and damages ar
e r
ecover
abl
e i
n
e
xcept
i
onal ci
r
c
ums
t
ances. You do not
mer
get
het
wo.
SSS V.MOONWALK [
221 S 119] - A
penalcl
ausei
san accessor
y under
t
aki
ng
t
o assume gr
eat
e
rl
i
abi
l
i
t
y i
n case of
br
eac
h. I
thasadoubl
ef
unct
i
on: (
1) t
o
pr
ovi
def
orl
i
qui
dat
eddamages
;and (
2) t
o
s
t
r
engt
hen t
he coer
ci
ve f
or
ce of t
he
obl
i
gat
i
on by t
he t
hr
e
at of gr
eat
e
r
r
esponsi
bi
l
i
t
yi
nt
heev
entofbr
eac
h.Fr
om
t
hef
or
e
goi
ng,i
ti
scl
eart
hatape
nalcl
ause
i
si
nt
e
nded t
o pr
e
v
ent t
he obl
i
gor f
r
om
def
aul
t
i
ng i
n t
he per
f
or
mance of hi
s
obl
i
gat
i
on. Thus, i
ft
her
e s
houl
d be
def
aul
t
,t
hepenal
t
ymaybeenf
or
c
ed.
Ar
t
. 1227. The de
bt
or c
annot
e
xe
mpt hi
msel
ff
r
om t
he per
f
or
mance of
t
heobl
i
gat
i
on bypayi
ngt
hepenal
t
y
,sav
e
i
n t
he case wher
et
hi
sr
i
ght has been
e
xpr
essl
yr
eser
v
edf
orhi
m.Nei
t
hercant
he
cr
edi
t
or de
mand t
he f
ul
fil
l
ment of t
he
obl
i
gat
i
on and t
he sat
i
sf
act
i
on of t
he
penal
t
yatt
hes
amet
i
me,unl
esst
hi
sr
i
ght
has been cl
ear
l
y gr
ant
ed hi
m.Howev
er
,i
f
af
t
e
rt
hecr
edi
t
orhasdeci
dedt
or
equi
r
et
he
f
ul
fil
l
ment of t
he obl
i
gat
i
on, t
he
per
f
or
mance t
her
eof shoul
d become
i
mpossi
bl
e wi
t
houthi
sf
aul
t
,t
he pe
nal
t
y
maybeenf
or
ced.
Ar
t
.1228. Pr
oofofact
ualdamages
suffer
e
d by t
he cr
edi
t
ori
s notnecessar
y
i
nor
der t
hat t
he penal
t
y may be
demanded.
Bavi
e
r
a:
Cour
t
s enf
or
ce cont
r
act
s
accor
di
ngt
ot
hei
rt
e
r
ms
Ar
t
. 1229.
The j
udge shal
l
equi
t
abl
yr
educe t
he penal
t
y when t
he
pr
i
nci
pal obl
i
gat
i
on has been par
t
l
y or
i
r
r
egul
ar
l
y compl
i
ed wi
t
h by t
he debt
or
.
Ev
eni
ft
her
ehasbeennoper
f
or
mance,t
he
penal
t
ymayal
sober
educedbyt
hecour
t
s
i
fi
ti
si
ni
qui
t
ousorunconsci
onabl
e.
Ar
t
.1230. Thenul
l
i
t
yoft
hepenal
cl
ause does notcar
r
y wi
t
hi
tt
hatoft
he
pr
i
nci
palobl
i
gat
i
on.
The nul
l
i
t
y of t
he pr
i
nci
pal
obl
i
gat
i
on car
r
i
erwi
t
hi
tt
hatoft
hepenal
cl
ause.
1. Di
st
i
ngui
shed
obl
i
gat
i
ons
f
r
om
al
t
e
r
nat
i
ve
Ar
t
. 1227. The de
bt
or c
annot
e
xe
mpt hi
msel
ff
r
om t
he per
f
or
mance of
t
heobl
i
gat
i
on bypayi
ngt
hepenal
t
y
,sav
e
i
n t
he case wher
e hi
sr
i
ght has been
e
xpr
essl
yr
eser
v
edf
orhi
m.Nei
t
hercant
he
cr
edi
t
or de
mand t
he f
ul
fil
l
ment of t
he
obl
i
gat
i
on and t
he sat
i
sf
act
i
on of t
he
penal
t
yatt
hes
amet
i
me,unl
esst
hi
sr
i
ght
has been cl
ear
l
y gr
ant
ed hi
m.Howev
er
,i
f
af
t
e
rt
hecr
edi
t
orhasdeci
dedt
or
equi
r
et
he
f
ul
fil
l
ment of t
he obl
i
gat
i
on, t
he
per
f
or
mance t
her
eof shoul
d become
i
mpossi
bl
e wi
t
houthi
sf
aul
t
,t
he pe
nal
t
y
maybeenf
or
ced.
Ar
t
. 1200. The r
i
ght of choi
ce
bel
ongs t
ot
he debt
or
,unl
ess i
thas been
e
xpr
essl
ygr
ant
edt
ot
hec
r
e
di
t
or
.
The debt
or shal
lhave no r
i
ghtt
o
c
hoose t
hose pr
est
at
i
ons whi
ch ar
e
i
mpossi
bl
e,unl
awf
ulor whi
ch coul
d not
hav
ebeent
heobj
ectoft
heobl
i
g
at
i
on.
2. Di
st
i
ngui
shed
obl
i
gat
i
ons
f
r
om
f
acul
t
at
i
v
e
Ar
t
. 1227. The de
bt
or c
annot
e
xe
mpt hi
msel
ff
r
om t
he per
f
or
mance of
t
heobl
i
gat
i
on bypayi
ngt
hepenal
t
y
,sav
e
i
n t
he case wher
et
hi
sr
i
ght has been
e
xpr
essl
yr
eser
v
edf
orhi
m.Nei
t
hercant
he
cr
edi
t
or de
mand t
he f
ul
fil
l
ment of t
he
obl
i
gat
i
on and t
he sat
i
sf
act
i
on of t
he
penal
t
yatt
hes
amet
i
me,unl
esst
hi
sr
i
ght
has been cl
ear
l
y gr
ant
ed hi
m.Howev
er
,i
f
af
t
e
rt
hecr
edi
t
orhasdeci
dedt
or
equi
r
et
he
f
ul
fil
l
ment of t
he obl
i
gat
i
on, t
he
per
f
or
mance t
her
eof shoul
d become
i
mpossi
bl
e wi
t
houthi
sf
aul
t
,t
he pe
nal
t
y
maybeenf
or
ced.
Ar
t
. 1206.
When onl
y one
pr
es
t
at
i
on hasbeen agr
eed upon,butt
he
obl
i
gor may r
ender anot
her i
n subs
t
i
t
ut
i
on,t
heobl
i
g
at
i
oni
scal
l
edf
acul
t
at
i
ve.
The l
oss or de
t
er
i
or
at
i
on of t
he
t
hi
ng i
nt
ended as a subs
t
i
t
ut
e
,t
hr
ough
t
he ne
gl
i
gence of t
he obl
i
gor does not
r
ender hi
m l
i
abl
e
. But once t
he
subs
t
i
t
ut
i
on hasbeen made,t
heobl
i
gori
s
l
i
abl
ef
or t
he l
oss of t
he subs
t
i
t
ut
e on
accountofhi
sdel
ay
,negl
i
genceorf
r
aud.
t
hen we hav
e el
ev
en modes of
e
xt
i
ngui
shi
ng an obl
i
gat
i
on under Ar
t
.
1231.
Thi
s enumer
at
i
on i
snote
xcl
usi
v
e.
Ot
her modes of e
xt
i
ngui
shi
ng an
obl
i
gat
i
onar
et
hef
ol
l
owi
ng:
1.Deat
h,par
t
i
cul
ar
l
ywher
et
heobl
i
gat
i
on
i
s pur
e
l
y per
sonal
,e
.
g.
, deat
h of one
par
t
nerdi
ss
ol
vest
hapar
t
ner
shi
p.
2.Renunci
at
i
onbyt
hecr
e
di
t
or
3.Compr
omi
se
4.Ar
r
i
v
alofr
esol
ut
or
yt
e
r
m
5. Mut
ualdesi
st
anc
e or mut
uo di
senso
(
Saur
av
.DBP.
)
6. I
n some cases,uni
l
at
er
alwi
t
hdr
awal
,
e.
g.
,i
n par
t
ne
r
shi
p, any par
t
ner can
wi
t
hdr
aw anyt
i
mef
r
om t
hepar
t
ne
r
shi
p.
7. I
n somecases,change ofci
vi
ls
t
at
us,
e.
g.
,i
fmar
r
i
agei
sannul
ed,i
te
xt
i
ngui
shes
obl
i
gat
i
ons l
i
ke t
he obl
i
gat
i
on t
o gi
ve
suppor
t
,amongot
her
s.
8. Unf
or
s
een ev
ent
s(
r
ebus si
cst
ant
i
bus)
(
Ar
t
.1267.
)
9.Wantofi
nt
er
est
V.Ext
i
ngui
shmentofObl
i
gat
i
ons
Ar
t
. 1231.
Obl
i
gat
i
ons ar
e
e
xt
i
ngui
shed:
(
1)Bypaymentorper
f
or
mance;
(
2)Byt
hel
ossoft
het
hi
ngdue
;
(
3) By t
he condonat
i
on or
r
emi
ssi
onoft
hedebt
;
(
4)By t
he conf
usi
on ormer
gerof
t
her
i
ght
soft
hecr
edi
t
oranddebt
or
;
(
5)Bycompensat
i
on;
(
6)Bynovat
i
on.
Ot
hercauses ofext
i
ngui
shmentof
obl
i
gat
i
ons, such
as
annul
ment
,
r
esci
s
si
on, f
ul
fil
l
ment of a r
esol
ut
or
y
condi
t
i
on,and pr
esc
r
i
pt
i
on ar
e gover
ned
el
sewher
ei
nt
hi
sCode.
Bal
ane: Ar
t
.1231 gi
vesus t
en modesof
e
xt
i
gui
shi
ng an obl
i
gat
i
on. One of t
he
modes ment
i
oned i
sr
e
sci
ssi
on. But i
t
doesnott
el
luswhe
t
hert
hi
si
sr
esci
ssi
on
underAr
t
.1191 (
r
e
sol
ut
i
on)orr
esci
ssi
on
underAr
t
.1380,e
t
.seq. I
fi
tmeansbot
h,
I
l
l
us
t
r
at
i
on:
Car
al
e owns a
r
es
t
aur
ant
. Hehi
r
esMol
i
naasac
hef
.I
n
t
he cont
r
actofe
mpl
oyment
,t
he
r
e was a
s
t
i
pul
at
i
on t
hat i
f Mol
i
na r
esi
gns f
r
om
Car
al
e'
s r
e
s
t
aur
ant
, he cannot seek
empl
oymentf
r
om anot
herr
es
t
aur
antf
ora
per
i
odoffiv
eyear
s
. Subsequent
l
y
,Mol
i
na
r
esi
gnsf
r
om Car
al
e'
sr
e
s
t
aur
antandwant
s
t
oappl
yt
o Mi
l
do'
sHouseofChi
c
ken. I
n
t
hi
scase,Mol
i
na cannotwor
k w/ Mi
l
do'
s
bec.oft
hes
t
i
pul
at
i
on i
nt
he cont
r
acthe
si
gned w/ Car
al
e
. Suppose, howev
er
,
Car
al
e, cl
oses down hi
sr
e
s
t
aur
ant and
engag
es i
n at
ot
al
l
y di
ffer
entbus
i
ness,a
cons
t
r
uct
i
onbusi
ness,f
ore
xampl
e,Mol
i
na
can appl
yf
orwor
k atMi
l
do'
se
ven bef
or
e
t
hel
apseoft
hefiv
ey
earpr
ohi
bi
t
i
veper
i
od.
I
nt
hi
sc
ase,Mol
i
nacanmakeouta
caseofe
xt
i
ngui
shmentofobl
i
gat
i
onont
he
gr
ound ofwantofi
nt
er
est
. The obv
i
ous
pur
pose oft
he s
t
i
pul
at
i
on i
st
o pr
ev
ent
unf
ai
rcompe
t
i
t
i
on.
10.Judi
ci
ali
nsol
v
ency
BALANE CASE:
SAURA I
MPORT & EXPORT BANK VS.
DBP [
44S445]- Wher
eaf
t
e
rappr
ovalof
hi
sl
oan,t
hebor
r
ower
,i
nst
eadofi
nsi
s
t
i
ng
f
or i
t
sr
e
l
eas
e,aske
dt
hat t
he mor
t
gage
gi
v
en as secur
i
t
y be cancel
l
ed and t
he
cr
edi
t
oracceded t
he
r
e
t
o,t
heact
i
on t
aken
by bot
h par
t
i
es was i
n t
he nat
ur
e of
mut
ualdesi
s
t
ance- whatManr
esa t
er
ms
"
mut
uo di
senso" - w/c i
s a mode of
e
xt
i
ngui
shi
ng obl
i
g
at
i
ons. I
ti
sa conc
ept
t
hatder
i
ves f
r
om t
he pr
i
nci
pl
et
hatsi
nce
mut
ualagr
eementc
an c
r
e
at
e a cont
r
act
,
mut
ualdi
sagr
eementby t
he par
t
i
es can
causei
t
se
xt
i
ngui
shement
.
A.PaymentorPer
f
or
mance
Bal
ane'
s Out
l
i
ne of t
he Ar
t
i
cl
es on
Payment
:
Requi
si
t
esofPaymentorPer
f
or
mance:
I
.
Re:Thepr
e
st
at
i
on
1.I
dent
i
t
y
2.I
nt
egr
i
t
y
3.I
ndi
vi
si
bi
l
i
t
y
I
I
.
Re:Thepar
t
i
es
1.Pay
or
/obl
i
gor
/debt
or
2.Pay
ee/obl
i
gee/c
r
e
di
t
or
I
I
I
.
Re
:Ti
meandpl
ance
I
.Wi
t
hr
espec
tt
opr
e
st
at
i
on:
1.I
dent
i
t
y
a.I
fs
peci
ficpr
est
at
i
on,t
hi
s
r
equi
si
t
emeanst
hatt
hev
er
yt
hi
ng
orser
vi
cemus
tbedel
i
ver
ed. (
Ar
t
.
1244.
)
b. I
fgener
i
c,t
he r
equi
si
t
e
r
equi
r
es t
he del
i
ver
y ofsome
t
hi
ng
of ne
i
t
her i
nf
er
i
or or super
i
or
qual
i
t
y(
Ar
t
. 1246)
. I
t mus
t be
some
t
hi
ngi
nt
hemi
ddl
e
.I
ncaseof
money
,t
her
ear
es
peci
alr
ul
es:
(
i
) Gov
er
ni
ng r
ul
e:
RA 529 as amended by RA
4100- I
n case of money
debt
s,y
ou wi
l
lhav
et
opay
i
n l
egal t
e
nder i
n t
he
Phi
l
i
ppi
nes.
Thi
s l
aw
super
sedesAr
t
.1249.
I
f
t
he
par
t
i
es
s
t
i
pul
at
et
hatpaymentwi
l
l
bemadei
nf
or
ei
gncur
r
ency
,
t
heobl
i
gat
i
on t
opayi
sv
al
i
d
butt
heobl
i
gat
i
on t
o payi
n
f
or
ei
gn cur
r
ency i
s v
oi
d.
Payment wi
l
l be made i
n
Phi
l
.cur
r
ency
.
How doyou c
onver
t
?
I
nc
aseofan obl
i
gat
i
on w/c
i
s not a l
oan i
n f
or
ei
gn
cur
r
enc
y
,i
fi
ncur
r
edbef
.RA
529,c
onv
er
si
on mus
tbeas
of t
he t
i
me t
he obl
i
g
at
i
on
was i
ncur
r
ed. I
fi
nc
ur
r
e
d
af
t
e
r RA 529 became
effect
i
v
e, t
he conv
er
s
i
on
mustbe as oft
he t
i
me t
he
obl
i
gat
i
on was i
ncur
r
ed
(
Kal
al
ov
.Luz
.
)I
ft
hel
oani
s
i
n f
or
ei
gn cur
r
ency
, t
he
conver
si
on i
sasoft
het
i
me
ofpayment
.(
RA529.
)
(
i
i
)
Payment i
n
negot
i
abl
epape
r
- Thi
smay
be r
ef
used by t
he c
r
e
di
t
or
.
Paymenti
nmanager
'
sc
hec
k
or cer
t
i
fied c
hec
k i
s not
payment i
n l
egal t
e
nde
r
.
The r
ul
i
ng i
n Se
ner
i
s has
been r
ev
er
sedi
nt
hec
aseof
Bi
shop of Mal
ol
os. The
Mal
ol
os r
ul
i
ng i
s be
t
t
er
. I
f
ound i
thar
dt
oacceptt
hat
manager
'
sc
heckorc
er
t
i
fied
c
he
ck i
s good as l
e
gal
t
e
nde
r
. Ther
e ar
e al
ways
r
i
sks t
o w/c cashi
er
'
s
c
he
cksar
esubj
e
ct
. Whati
f
af
t
e
r havi
ng i
ssued a
cashi
e
r
'
schec
k,t
hedr
awe
ebank cl
oses,whathappens
t
oyourcashi
er
'
sc
hec
k?
I
n
any
ev
ent
,
payment by chec
k can be
r
ef
use
dbyt
hec
r
edi
t
or
.And
e
ven i
fpaymentbychec
ki
s
accept
edbyt
hecr
edi
t
or
,t
he
accept
ance i
s i
s onl
y a
pr
ovi
si
onal payment unt
i
l
t
hec
hec
ki
s(
a)encashedor
(
b) when t
hr
ough t
hef
aul
t
of t
he cr
edi
t
or t
he
y have
been i
mpai
r
e
d. Thec
aseof
Namar
co v
.Feder
at
i
on, 49
SCRA 238, i
nt
er
pr
e
t
s t
he
phr
ase "
when t
hr
ough t
he
f
aul
t of t
he cr
edi
t
or
,t
hey
hav
e been i
mpai
r
ed" as t
o
appl
y onl
yt
oa c
hec
k used
i
n payment i
fi
ssued by a
per
son ot
her t
han t
he
debt
or
. Why? Bec.i
ft
he
c
he
ck was i
ssued by t
he
debt
orhi
msel
f
,al
lt
hatt
he
debt
orhavet
odoi
st
oi
ssue
anot
he
rchec
k.
I
n bot
h cases, t
he
r
ei
sa
v
ol
unt
ar
yc
hangei
nt
heobj
ect
.
2. I
nt
egr
i
t
y.
- Ther
e mus
t be
del
i
ver
yoft
heent
i
r
epr
es
t
at
i
on due. (
Ar
t
.
1233.
) Theexcept
i
onst
ot
her
equi
r
e
ment
ofi
nt
egr
i
t
yar
e:
a. I
n case of subst
ant
i
al
per
f
or
mance i
n good f
ai
t
h (
Ar
t
.
1234.
)Thi
si
sanequi
t
yr
ul
e.
b. I
n case of wai
v
er of
obl
i
gee/c
r
e
di
t
or(
Ar
t
.1235.
)
c. I
n caseofappl
i
cat
i
on of
payment
s i
f sev
er
al debt
s ar
e
equal
l
yoner
ous(
Ar
t
.1254,par
.2.
)
3. I
ndi
vi
si
bi
l
i
t
y.
- Thi
smeanst
hat
t
heobl
i
gormustper
f
or
mt
hepr
est
at
i
on i
n
one act and not i
n par
t
s
. (
Ar
t
.1248.
)
Ther
e ar
e sev
er
al except
i
ons t
o t
hi
s
r
equi
r
ement
:
a. I
n case or expr
es
s
s
t
i
pul
at
i
on.(
Ar
t
.1248.
)
b. I
n case of pr
est
at
i
ons
w/c necessar
i
l
y ent
ai
l par
t
i
al
per
f
or
mance.(
Ar
t
.1225,par
.2)
c. I
ft
he debti
sl
i
qui
dat
ed
i
n par
tand unl
i
qui
dat
ed i
n par
t
.
(
Ar
t
.1248.
)
d. I
n caseofj
oi
ntdi
vi
si
bl
e
obl
i
gat
i
ons(
Ar
t
.1208.
)
(
i
i
i
) Rev
al
uat
i
on i
n
e. I
n sol
i
dar
y obl
i
gat
i
ons
case
of
e
xt
r
aor
di
nar
y
when t
hedebt
or
sar
eboundunde
r
i
nflat
i
on or deflat
i
on (
Ar
t
.
di
ffer
ent t
e
r
ms and condi
t
i
ons.
1250.
)
- Thi
sr
ul
ehasne
ver
(
Ar
t
.1211.
)
been used. I
t was onl
y
f
.I
n compensat
i
on whe
na
dur
i
ng
t
he
Japanese
bal
ancei
sl
e
f
t
.(
Ar
t
.1290.
)
occupat
i
on t
hatt
her
ewasa
g. I
ft
he wor
k i
st
o be
r
ecogni
t
i
on ofe
xt
r
aor
di
nar
y
del
i
ver
ed par
t
i
al
l
y
,t
he pr
i
ce or
i
nflat
i
oni
nt
hi
scount
r
y
.
compensat
i
on f
oreach par
thavi
ng
beenfixed.(
Ar
t
.1720.
)
c.Except
i
onst
ot
her
equi
r
ementof
h.
I
n case of sev
er
al
i
dent
i
t
y
guar
ant
or
s who de
mand t
he r
i
ght
(
i
) Dac
i
on en pago (
Ar
t
.
ofdi
vi
si
on.(
Ar
t
.2065.
)
1245.
)
(
i
i
)Novat
i
on
i
.I
nc
aseofi
mpossi
bi
l
i
t
yor
e
xt
r
eme di
ffic
ul
t
y of si
ngl
e
per
f
or
mance.
I
I
.Wi
t
hr
espec
tt
ot
hepar
t
i
es
Ther
ear
et
wopar
t
i
esi
nv
ol
ved:
1.Pay
or
/obl
i
gor
/debt
or
2.Pay
ee/obl
i
gee/c
r
e
di
t
or
Requi
r
e
ment
s
:
1. Ar
t
.1226 -1238. Who shoul
dt
he
payorbe:
a. Wi
t
houtneed oft
he c
r
e
di
t
or
'
s
consent
(
1)Thedebt
orhi
msel
f
(
2)Hi
shei
r
sorassi
gns
(
3)Hi
sagent
(
4)Any
onei
nt
e
r
e
st
e
di
nt
he
f
ul
fil
l
ment of t
he obl
i
gat
i
on, e.
g.
, a
guar
ant
or
b. Wi
t
ht
he c
r
e
di
t
or
'
s consentAnyone. Thi
si
sadepar
t
ur
ef
r
om t
her
ul
e
i
nt
heOl
d Ci
vi
lCodew/cdi
d notr
equi
r
e
consentont
hepar
toft
hec
r
e
di
t
or
.
c. Effect ofpayment by a t
hi
r
d
per
son:
(
1) I
ft
he paymentwas w/
t
he debt
or
'
s consent
,he becomes
t
heagentoft
hedebt
or
. Theeffect
i
s subr
ogat
i
on (
Ar
t
i
cl
es 12361237.
) Exce
pt
i
on: I
ft
he per
son
payi
ngi
nt
endedi
tt
obeadonat
i
on.
(
Ar
t
.1238.
)
(
2) I
fpaymentwaswi
t
hout
t
he debt
or
'
s c
onsent
,t
he t
hi
r
d
per
son may de
mand r
epaymentt
o
t
heext
entt
hatt
hedebt
orhasbeen
benefit
e
d.(
Ar
t
.1236,par
.2.
)
2.Whomaybet
hepay
ee?
a. The obl
i
gee pr
oper (
Ar
t
i
cl
es
1240,1626.
)
b.Hi
ss
uccessorort
r
ans
f
er
ee(
Ar
t
.
1240.
)
c.Hi
sagent(
i
bi
d.
)
d. Anyt
hi
r
d pe
r
son subj
ectt
ot
he
f
ol
l
owi
ngqual
i
ficat
i
ons:
(
1)pr
ovi
dedi
tr
e
doundedt
o
t
heobl
i
g
ee'
sbenefitandonl
yt
ot
he
e
xt
e
ntofs
uch benefit
.(
Ar
t
.1241,
par
.2.
)
(
2) I
fi
tf
al
l
s under Ar
t
.
1241,par
.2 nos.1,2 & 3,benefit
i
sdeemedt
obet
ot
al
.
e. Anyone i
n possessi
on of t
he
cr
edi
t
.(
Ar
t
.1242.
)
I
n al
lt
hese fiv
e(
5) cases, i
ti
s
r
equi
r
ed t
hat t
he debt shoul
d not hav
e
beengar
ni
shed.(
Ar
t
.1243.
)
I
I
I
. Wi
t
hr
espectt
ot
het
i
meand pl
ac
eof
payment
1. When payment t
o be made:
Whe
ndue
2.Pl
ace(
Ar
t
.1251.
)
a.
Pr
i
mar
y r
ul
e:
As
s
t
i
pul
at
ed
b. Secondar
yr
ul
e: Pl
ace
wher
et
het
hi
ngwasatt
het
i
met
he
obl
i
gat
i
on was cons
t
i
t
ut
e
d i
ft
he
obl
i
gat
i
on i
s t
o del
i
ver a
de
t
er
mi
nat
et
hi
ng.
c. Ter
t
i
ar
yr
ul
e: At t
he
debt
or
'
sdomi
c
i
l
e
Ar
t
. 1232. Payment means not
onl
yt
he del
i
v
er
y ofmoney butal
so t
he
per
f
or
mance,i
n any ot
hermanne
r
,ofan
obl
i
gat
i
on.
Bal
ane: PaymentorPer
f
or
manc
ear
eused
i
nt
e
r
c
hangeabl
y
. Butt
e
c
hni
cal
l
y
,payment
i
s used i
n obl
i
gat
i
ons t
o gi
v
e wher
e
as
per
f
or
mance i
s used i
n obl
i
g
at
i
ons t
o do.
Payment
/per
f
or
mancei
st
hepar
adi
gmat
i
c
mode ofext
i
ngui
shmentofan obl
i
g
at
i
on.
I
ti
st
heonl
y nor
malwayofext
i
ngui
shi
ng
anobl
i
gat
i
on.
Ar
t
.1233. A debt shal
l not be
under
s
t
ood t
o have been pai
d unl
ess t
he
t
hi
ng or ser
vi
ce i
n whi
c
ht
he obl
i
gat
i
on
consi
st
s has been compl
e
t
el
y del
i
v
er
ed or
r
ender
e
d,ast
hec
asemaybe.
Ar
t
.1234. I
ft
he obl
i
gat
i
on has
beens
ubst
ant
i
al
l
ype
r
f
or
medi
ngoodf
ai
t
h,
t
he obl
i
gor may r
ecover as t
hough t
her
e
hadbeen as
t
r
i
ctandcompl
e
t
ef
ul
fil
l
ment
,
l
essdamagessuffer
edbyt
heobl
i
gee.
BALANE CASES:
LEGARDA HERMANOS V.SALDANA [
55S
324] - The Cour
t
'
s doct
r
i
ne i
n J.
M.
Tuason v
.Javi
eri
sf
ul
l
y appl
i
cabl
et
ot
he
pr
esentcase.
J.
M.TUASON V.JAVI
ER [
31S 829] - I
n
t
he i
nt
er
es
t ofj
ust
i
ce and equi
t
y
,cour
t
maygr
antt
hevendeeane
wt
er
m wher
ehe
subs
t
ant
i
al
l
y per
f
or
med i
n good f
ai
t
h
accor
di
ng t
o Ar
t
.1234,r
egar
dl
ess ofAr
t
.
1592oft
hesameCode.
TAYAG V.CA [
219S480]- Bot
ht
het
r
i
al
cour
tandt
heappel
l
at
ec
our
t
swer
ecor
r
ect
i
n sus
t
ai
ni
ng t
he cl
ai
m of pvt r
esps.
anchor
ed on e
st
oppel or wai
ver by
accept
anceofdel
ayedpayment
sunderAr
t
.
1235 consi
der
i
ng t
hatt
he he
i
r
s ofJuan
Gal
i
ci
a,Sr
.accommodat
e
d pvt
.r
esp.by
accept
i
ngt
hel
at
t
e
r
'
sdel
ay
edpayment
snot
onl
y bey
ond t
he gr
ace per
i
ods but al
so
dur
i
ng t
he pendenc
y of t
he case f
or
speci
ficper
f
or
mance. I
ndeed,t
her
i
ghtt
o
r
esci
nd i
s not absol
ut
e and wi
l
lnot be
gr
ant
ed whe
r
e wher
e t
he
r
e has been
subs
t
ant
i
al c
ompl
i
anc
e
by
par
t
i
al
payment
s
. By and l
ar
ge, pe
t
i
t
i
oner
s'
act
uat
i
on i
s suscept
i
bl
e of but one
cons
t
r
uct
i
on-t
hatt
heyar
enow es
t
opped
f
r
om r
enegi
ng f
r
om t
hei
rcommi
t
menton
accountofaccept
ance ofbenefit
s ar
i
si
ng
f
r
om over
dueaccount
sofpvt
.r
esps.
Ar
t
. 1235. When t
he obl
i
g
ee
accept
s t
he per
f
or
manc
e, knowi
ng i
t
s
i
ncompl
e
t
e
nessori
r
r
e
gul
ar
i
t
y
,andwi
t
hout
e
xpr
essi
ng any pr
ot
e
st or obj
ect
i
on,t
he
obl
i
gat
i
oni
sdeemedf
ul
l
ycompl
i
edwi
t
h.
BALANE CASES:
PRESBI
TERO V.CA [
217S 372] - Unde
r
Ar
t
. 1234, i
ft
he obl
i
gat
i
on has been
subs
t
ant
i
al
l
yper
f
or
med i
n GF,t
heobl
i
gor
(
pr
i
vat
e r
esp. Leonar
do Canoso) may
r
ecov
erast
hough t
her
ehad been ast
r
i
ct
and coml
e
t
e f
ul
fil
l
ment
,l
ess damages
suffer
e
d by t
he obl
i
g
ee (
Pr
esbi
t
e
r
o.
)
Mor
e
over
,when t
he obl
i
gee accept
st
he
per
f
or
mance as what happened i
n t
hi
s
case, knowi
ng i
t
s i
nc
ompl
e
t
e
ne
ss or
i
r
r
egul
ar
i
t
y
, and w/o expr
e
ssi
ng any
pr
ot
es
t or obj
e
ct
i
on, t
he obl
i
g
at
i
on i
s
deemedf
ul
l
ycompl
i
edw/.
AZCONA V.JAMANDRE [
151 S 317] xxx I
ft
he pe
t
i
t
i
oneri
sf
ussy enough t
o
i
nv
okei
tnow,i
ts
t
andst
or
e
ason t
hathe
woul
d hav
ef
ussed i
tt
oo i
nt
her
ecei
pthe
wi
l
l
i
ngl
y si
gne
d af
t
er accept
i
ng, w/o
r
eser
v
at
i
on and appar
ent
l
y w/o pr
ot
e
s
t
onl
yP7,
000.Ar
t
.1235i
sappl
i
cabl
e
.
xxx
Pe
t
i
t
i
oner says t
hat he coul
d not
demand paymentoft
he bal
anc
e ofP200
on 10/26/60, dat
e of r
ecei
pt bec
.t
he
r
ent
alf
ort
hecr
opyear19611962wasdue
on orbef
or
e1/30/61. Butt
hi
swoul
dnot
hav
e pr
e
vent
ed hi
m f
r
om r
eser
vi
ng i
nt
he
r
ecei
pt hi
sr
i
ght t
o col
l
ect t
he bal
ance
when i
tf
el
l due. Mor
eover
,t
her
e i
s
e
vi
dencei
nt
her
ecor
dt
hatwhen t
hedue
dat
ear
r
i
ved,hemadeanydemand,wr
i
t
t
en
orv
er
bal
,f
ort
hepaymentoft
hatamount
.
PAGSI
BI
GAN V.CA [
221S202]- Wehol
d
t
hatt
hepaymentamount
i
ngt
oP8,
500f
or
t
he bal
ance ofP3,
558.
20 as of8/26/78
pl
us t
he P1,
000 i
twas asked t
o pay on
4/24/84woul
datt
hev
er
yl
eas
tcons
t
i
t
ut
e
subs
t
ant
i
alpe
r
f
or
mance. xxx Pe
t
i
t
i
oner
i
nt
hi
sc
asehast
her
i
ghtt
omov
ef
ort
he
cancel
l
at
i
on of t
he mor
t
gage and t
he
r
el
ease of t
he mor
t
gaged pr
op.
, upon
paymentoft
hebal
anceoft
hel
oan.xxx
Thus,asi
de f
r
om t
hef
actt
hatt
he
r
esp.bankwases
t
oppedf
r
om enf
or
ci
ngi
t
s
r
i
ght t
o f
or
ecl
ose by vi
r
t
ue of i
t
s
accept
ance oft
he del
ayed payment
sf
ora
per
i
od of mor
e t
han si
x year
s
, t
he
appl
i
cat
i
onofsuc
hpaymentt
ot
hei
nt
e
r
es
t
and t
he pr
i
nci
paldur
i
ng t
he fir
s
tt
hr
e
e
payment
s const
i
t
ut
e
s a vi
r
t
ualwai
ver of
t
he accel
er
at
i
on cl
ause pr
ovi
ded i
n t
he
cont
r
act
.Wec
annotsus
t
ai
nt
hel
egal
i
t
yof
t
hef
or
ecl
osur
eundert
hepecul
i
arf
act
sof
t
hi
s case, bec. t
her
e i
s subst
ant
i
al
per
f
or
manceoft
heobl
i
gat
i
on on t
hepar
t
ofpe
t
i
t
i
oner
.xxx
1.Towhom paymentshoul
dbemade
Ar
t
.1240. Paymentshal
lbemade
t
ot
heper
soni
nwhosef
avort
heobl
i
g
at
i
on
hasbeen cons
t
i
t
ut
e
d,orhi
ssuccessori
n
i
nt
e
r
e
st
, or any per
son aut
hor
i
z
ed t
o
r
ecei
v
ei
t
.
BALANE CASES:
ARANAS V. TUTAAN [
127 S 828] Paymentby j
udgmentdebt
ort
ot
hewr
ong
par
t
y doesnotext
i
ngui
sh j
udgmentdebt
.
The bur
den of r
ecov
er
i
ng t
he supposed
payment
s oft
he cash di
vi
dends made by
UTEX t
ot
hewr
ongpar
t
i
esCas
t
anedaand
Manuelsquar
el
yf
al
l
s upon i
t
sel
fby i
t
s
own act
i
on and c
annotbepas
sed byi
tt
o
pe
t
i
t
i
oner
s as i
nnocent par
t
i
es. I
ti
s
el
ement
ar
y t
hat payment made by a
j
udgmentdebt
ort
o a wr
ong par
t
ycannot
e
xt
i
ngui
sht
hej
udgmentobl
i
gat
i
onofsuc
h
debt
ort
oi
t
scr
edi
t
or
.xxx
PAL V.CA [
181 S 557] - A paymenti
n
or
der t
o be effec
t
i
ve t
o di
sc
har
ge an
obl
i
gat
i
on mus
t be made t
ot
he pr
oper
par
t
i
es.
-I
n gener
al
,a payment
,i
n or
der
t
o be effect
i
v
et
o di
schar
ge an obl
i
gat
i
on,
mustbemadet
ot
hepr
operper
son.Thus,
payment mus
t be made t
ot
he obl
i
gee
hi
msel
for t
o an agenthavi
ng aut
hor
i
t
y
,
e
xpr
essori
mpl
i
ed,t
or
ecei
vet
hepar
t
i
cul
ar
payment
. Paymentmade t
o one havi
ng
appar
entaut
hor
i
t
yt
or
ecei
ve t
he money
wi
l
l
,asar
ul
e,bet
r
eat
e
dast
hough act
ual
aut
hor
i
t
y had been gi
v
en f
or i
t
sr
ecei
pt
.
Li
ke
wi
se,i
fpaymenti
smadet
oonewhoby
l
aw i
saut
hor
i
z
ed t
oactf
ort
hec
r
edi
t
or
,i
t
wi
l
l wor
k a di
schar
g
e. The r
e
cei
pt of
money due on a j
udgmentby an officer
aut
hor
i
z
ed by l
aw t
o accept i
t wi
l
l
,
t
her
ef
or
es
at
i
sf
yt
hedebt
.
xxx Thet
heor
yi
swher
eapayment
i
s made t
o a per
s
on aut
hor
i
z
ed and
r
ecogni
z
ed byt
hecr
edi
t
or
,t
hepaymentt
o
suc
h a per
son so aut
hor
i
z
ed i
s dee
med
paymentt
ot
hecr
e
di
t
or
.xxx
Unl
ess aut
hor
i
zed by l
aw or by
c
onsentoft
heobl
i
gee,a publ
i
coffic
erhas
noaut
hor
i
t
yt
oac
c
eptanyt
hi
ng ot
hert
han
moneyi
npaymentofanobl
i
gat
i
onundera
j
udgmentbei
ngexec
ut
ed.
-I
nt
heabse
nce
ofanagr
eement
,ei
t
he
re
xpr
essori
mpl
i
ed,
paymentmeanst
hedi
sc
har
g
eofadebtor
obl
i
gat
i
oni
nmoneyandunl
esst
hepar
t
i
es
soagr
e
e,adebt
orhasnor
i
ght
s
,exceptat
hi
s own per
i
l
,t
o subst
i
t
ut
e some
t
hi
ng i
n
l
i
eu ofcash asmedi
um ofpaymentofhi
s
debt
. Consequent
l
y
,Unl
essaut
hor
i
z
edby
l
aw orbyc
onsentoft
heobl
i
gee,a publ
i
c
offic
erhasnoaut
hor
i
t
yt
oacceptanyt
hi
ng
ot
her t
han mone
y i
n payment of an
obl
i
gat
i
on under a j
udgment bei
ng
e
xecut
e
d.
St
r
i
ct
l
y speaki
ng, t
he
accept
ancebyt
hesher
i
ff oft
hepe
t
i
t
i
one
r
'
s
c
he
cks,i
nt
hecaseatbar
,doesnot
,perse,
oper
at
e as a di
schar
ge oft
he j
udgment
debt
.
Ar
t
.1241. Payment t
o a per
son
who i
si
nc
apac
i
t
at
ed t
o admi
ni
s
t
er hi
s
pr
oper
t
y shal
lbeval
i
di
fhe has keptt
he
t
hi
ngdel
i
ver
ed,ori
nsof
arast
hepayment
hasbeenbenefici
alt
ohi
m.
Payment made t
oat
hi
r
d per
s
on
shal
l al
s
o be val
i
d i
nsof
ar as i
t has
r
edounded t
ot
he be
nefitoft
he cr
e
di
t
or
.
Such benefitt
ot
he c
r
e
di
t
orneed notbe
pr
ov
edi
nt
hef
ol
l
owi
ngc
ases:
(
1)I
faf
t
ert
he payment
,t
he t
hi
r
d
per
sonsacqui
r
est
hecr
e
di
t
or
'
sr
i
ght
s
;
(
2) I
ft
he cr
edi
t
or r
at
i
fies t
he
paymentt
ot
het
hi
r
dpe
r
son;
(
3)I
fbyt
hec
r
edi
t
or
'
sconduct
,t
he
debt
or has been l
e
dt
o bel
i
e
ve t
hat t
he
t
hi
r
d per
son had aut
hor
i
t
yt
or
ecei
v
et
he
payment
.
Bavi
e
r
a:Numbert
hr
eei
sEst
oppeli
nPai
s
Ar
t
.1242. Paymentmadei
n good
f
ai
t
ht
o any per
son i
n possessi
on oft
he
cr
edi
tshal
lr
e
l
easet
hedebt
or
.
(
Assi
gnment of Cr
edi
t
s and Ot
her
I
ncor
por
e
alRi
ght
s)
Ar
t
.1626. Thede
bt
orwho,bef
or
e
havi
ngknowl
edgeoft
heassi
gnment
,pays
hi
s cr
e
di
t
or shal
l be r
el
eased f
r
om t
he
obl
i
gat
i
on.
2.Whoshal
lmakepayment
Ar
t
. 1236. The cr
edi
t
or i
s not
bound t
o acceptpaymentorper
f
or
mance
by a t
hi
r
d per
s
on who has no i
nt
e
r
es
ti
n
t
he f
ul
fil
l
ment of t
he obl
i
gat
i
on, unl
ess
t
her
ei
sas
t
i
pul
at
i
ont
ot
hecont
r
ar
y
.
Whoe
ver pays f
or anot
her may
demandf
r
om t
hedebt
orwhathehaspai
d,
e
xcept t
hat i
f he pai
d wi
t
hout t
he
knowl
edgeoragai
nstt
hewi
l
loft
hede
bt
or
,
hecanr
e
coveronl
yi
nsof
arast
hepayment
hasbeenbenefici
alt
ot
hedebt
or
.
Ar
t
.1237. Whoev
erpayson behal
f
oft
he debt
or wi
t
hout t
he knowl
edge or
agai
nstt
hewi
l
loft
hel
at
t
e
r
,cannotcompel
t
hecr
edi
t
ort
osubr
ogat
ehi
mi
n hi
sr
i
ght
s,
suc
h as t
hose ar
i
si
ng f
r
om a mor
t
gage,
guar
ant
y
,orpenal
t
y
.
Ar
t
. 1238. Payment made by a
t
hi
r
d per
son who does noti
nt
end t
o be
r
ei
mbur
sedbyt
hede
bt
ori
sdeemedt
obea
donat
i
on, whi
ch r
equi
r
es t
he debt
or
'
s
consent
.Butt
he paymenti
si
n any case
v
al
i
d ast
ot
he cr
edi
t
orwho hasaccept
e
d
i
t
.
(
Ot
herQuasi
Cont
r
act
s)
Ar
t
.2173. Whe
n at
hi
r
d per
son,
wi
t
houtt
heknowl
edgeoft
hedebt
or
,pays
t
he debt
,t
he r
i
ght
s of t
he f
or
mer ar
e
gover
nedbyar
t
i
cl
es1236and1237.
Ar
t
.1239. I
n obl
i
gat
i
ons t
o gi
v
e,
paymentmadebyone who doesnothav
e
t
he f
r
ee di
sposal of t
he t
hi
ng due and
capaci
t
yt
o al
i
enat
ei
ts
hal
lnotbe v
al
i
d,
wi
t
hout pr
ej
udi
ce t
o t
he pr
ovi
si
ons of
ar
t
i
cl
e 1427 under t
he Ti
t
l
e on "
Nat
ur
al
Obl
i
gat
i
ons
.
"
Ar
t
.1427. Whe
na
mi
norbe
t
weenei
ght
een and
t
went
y
one year
s of age,
who has ent
er
e
d i
nt
o a
cont
r
act
wi
t
hout
t
he
consent of t
he par
ent or
guar
di
an,v
ol
unt
ar
i
l
ypaysa
sum ofmone
y ordel
i
ver
sa
f
ungi
bl
et
hi
ngi
nf
ul
fil
l
ment
oft
heobl
i
gat
i
on,t
he
r
es
hal
l
be no r
i
ght t
or
ecover t
he
same f
r
om t
he obl
i
gee who
hasspentorconsumedi
ti
n
goodf
ai
t
h.
NOTE:ageofmaj
or
i
t
yi
snow 18.
Ar
t
.1243. Paymentmade t
ot
he
cr
edi
t
orby t
he debt
oraf
t
e
rt
he l
at
t
e
rhas
been j
udi
ci
al
l
y or
de
r
ed t
or
e
t
ai
nt
he debt
shal
lnotbev
al
i
d.
Ar
t
.1244. The debt
orofa t
hi
ng
cannot compelt
he cr
edi
t
or t
or
ecei
ve a
di
ffer
entone,al
t
hough t
hel
at
t
ermaybeof
t
hes
amev
al
ueas,ormor
eval
uabl
et
han
t
hatwhi
chi
sdue.
I
nobl
i
gat
i
onst
odoornott
odo,an
actorf
or
bear
ance cannotbe subst
i
t
ut
ed
by anot
heractorf
or
bear
anceagai
ns
tt
he
obl
i
gee'
swi
l
l
.
Ar
t
. 1245. Dat
i
on i
n payment
,
wher
e
by pr
oper
t
y i
s al
i
enat
e
d t
o t
he
cr
edi
t
ori
n sat
i
sf
act
i
on ofadebti
n mone
y
,
shal
lbegov
er
nedbyt
hel
aw ofsal
es.
BALANE CASES:
FI
LI
NVEST V.PHI
L.ACETYLENE [
111 S
421] - We find appel
l
ant
'
s cont
ent
i
on
de
voi
d of per
suasi
v
e f
or
ce. The mer
e
r
e
t
ur
n oft
he mor
t
gaged mot
orv
ehi
cl
e by
t
hemor
t
gagor
,t
hehe
r
ei
n appel
l
ant
,t
ot
he
mor
t
gagee,t
he he
r
ei
n appel
l
ee,does not
cons
t
i
t
ut
e dat
i
on i
n payment i
n t
he
absence,expr
e
ss or i
mpl
i
ed oft
he t
r
ue
i
nt
ent
i
onoft
hepar
t
i
es.
Dac
i
on en pago, accor
di
ng t
o
Manr
esa, i
s t
he t
r
ansmi
ssi
on of t
he
owner
shi
p ofa t
hi
ng by t
he debt
ort
ot
he
c
r
edi
t
oras an ac
c
ept
ed equi
val
entoft
he
per
f
or
manc
eofanobl
i
gat
i
on.I
n dac
i
onen
pago,as a s
peci
almode ofpayment
,t
he
debt
oroffer
sanot
hert
hi
ng t
ot
hec
r
edi
t
or
whoaccept
si
tasequi
val
entofpaymentof
anout
s
t
andi
ngde
bt
.
Dac
i
on en pago i
nt
he nat
ur
e of
sal
e.
- Theunder
t
aki
ngr
eal
l
ypar
t
akesi
n
ones
enseoft
henat
ur
eofsal
e,t
hati
s,t
he
cr
edi
t
or i
s r
e
al
l
y buyi
ng t
he t
hi
ng or
pr
oper
t
yoft
hede
bt
or
,paymentf
orw/ci
s
t
obechar
g
edagai
ns
tt
hedebt
or
'
sdebt
.As
suc
h,t
hee
ssent
i
alel
ement
sofacont
r
act
ofsal
e,namel
y
,consent
,obj
ect cer
t
ai
n,
and cause or consi
der
at
i
on mus
t be
pr
esent
.
Dac
i
on en pago i
n i
t
s moder
n
c
onc
ept
.
- I
ni
t
s moder
n concept
, what
act
ual
l
yt
akespl
ace i
n dac
i
on en pago i
s
an obj
ect
i
v
e novat
i
on of t
he obl
i
gat
i
on
wher
et
he t
hi
ng offer
ed as an accept
ed
equi
val
ent of t
he per
f
or
mance of an
obl
i
gat
i
on i
s consi
der
ed as t
he obj
e
ctof
t
he cont
r
act of s
al
e, whi
l
et
he debt i
s
consi
der
ed ast
hepur
c
hasepr
i
ce. I
n any
case, common consent i
s an essent
i
al
pr
er
equi
si
t
e,bei
tsal
eornovat
i
on,t
ohave
t
heeffectoft
ot
al
l
ye
xt
i
ngui
shi
ng t
hede
bt
orobl
i
gat
i
on.
CI
TI
ZENS SURETY V.CA [
162 S 738] Ther
ei
snodat
i
on i
n paymentwhen t
her
e
i
s no obl
i
gat
i
on t
o be ext
i
ngui
shed.
- The
t
r
ansact
i
on coul
c not be dat
i
on i
n
payment
. xxx
[
W]
hen t
he deed of
assi
gnmentwase
xecut
edon 12/4/59,t
he
obl
i
gat
i
on oft
he assi
gnor t
or
e
f
und t
he
assi
gnee h ad not y
e
tar
i
sen. I
n ot
he
r
wor
ds
,t
her
ewasno obl
i
gat
i
on ye
ton t
he
par
t of t
he pe
t
i
t
i
one
r
, Ci
t
i
z
ens' t
o pay
Si
nger Sewi
ng Mac
hi
ne Co. The
r
e was
not
hi
ng t
o be e
xt
i
ngui
shed on t
hatdat
e
,
hence,t
he
r
ec
oul
dnothavebe
en adat
i
on
i
npayment
.
Ar
t
. 1246. When t
he obl
i
gat
i
on
consi
st
s i
n t
he de
l
i
ver
y of an
i
nde
t
er
mi
nat
e or gener
i
c t
hi
ng, whose
qual
i
t
y and ci
r
cums
t
ances have notbeen
s
t
at
e
d,t
hec
r
e
di
t
orcannotde
mandat
hi
ng
ofsuper
i
orqual
i
t
y
.Nei
t
he
rc
an t
hedebt
or
del
i
ver a t
hi
ng of i
nf
er
i
or qual
i
t
y
. The
pur
pose of t
he obl
i
gat
i
on and ot
her
ci
r
cums
t
ances shal
l be t
aken i
nt
o
consi
der
at
i
on.
Ar
t
.1247. Unl
ess i
ti
s ot
he
r
wi
se
s
t
i
pul
at
ed, t
he ext
r
aj
udi
ci
al e
xpens
es
r
equi
r
ed by t
he paymentshal
lbe f
ort
he
account of t
he debt
or
. Wi
t
h r
egar
dt
o
j
udi
ci
al cos
t
s, t
he Rul
es of Cour
t shal
l
gover
n.
Ar
t
. 1248. Unl
ess t
her
ei
s an
e
xpr
ess s
t
i
pul
at
i
on t
o t
hat effect
,t
he
cr
edi
t
or cannotbe compel
l
ed par
t
i
al
l
yt
o
r
ecei
v
e t
he pr
es
t
at
i
ons i
n whi
ch t
he
obl
i
gat
i
on consi
s
t
s. Nei
t
he
r may t
he
debt
or be r
e
qui
r
e
d t
o make par
t
i
al
payment
s
.
Howev
er
,when t
hedebti
si
n par
t
l
i
qui
dat
e
d and i
n par
t unl
i
qui
dat
ed,t
he
cr
edi
t
ormaydemand and t
hedebt
ormay
effectt
he paymentoft
he f
or
me
rwi
t
hout
wai
t
i
ngf
ort
hel
i
qui
dat
i
onoft
hel
at
t
e
r
.
Canl
as'f
ees
,t
hel
i
e
n on hi
s shar
eoft
he
es
t
at
ei
st
he
r
eby ext
i
ngui
shed- a qui
t
e
obvi
ous pr
oposi
t
i
on, t
o be sur
e. The
cl
ausec
annotbeconst
r
ued asgr
ant
i
ngt
o
any oft
he obl
i
gor
s
, by i
mpl
i
cat
i
on, t
he
opt
i
on t
o pay i
n i
ns
t
al
l
ment
s, or as
i
mpl
i
e
dl
y bi
ndi
ngon t
heobl
i
g
eet
o accept
paymentbypar
t
s.xxx
Ar
t
.1249.Thepaymentofdebt
si
n
money shal
l be made i
n t
he cur
r
ency
s
t
i
pul
at
ed, and i
fi
ti
s not possi
bl
et
o
del
i
ver suc
h cur
r
e
ncy
, t
hen i
n t
he
cur
r
enc
y whi
ch i
sl
egal t
e
nder i
n t
he
Phi
l
i
ppi
nes.
The del
i
ver
y of pr
omi
ssor
y not
es
payabl
et
o or
der
,or bi
l
l
s ofexc
hange or
ot
hermer
cant
i
l
edocument
sshal
lpr
oduc
e
t
heeffectofpaymentonl
ywhen t
he
yhave
been c
ashed,orwhen t
hr
ough t
hef
aul
tof
t
hecr
edi
t
ort
he
yhavebe
eni
mpai
r
ed.
I
nt
hemeant
i
me,t
heact
i
onder
i
v
ed
f
r
om t
he or
i
gi
nalobl
i
gat
i
on shal
lbe hel
d
i
nabe
yance.
BALANE CASES:
BALANE CASE:
NASSER V.CUEVAS [
188S812]- The
r
e
i
snot
hi
ngi
nt
heci
t
e
dpr
ovi
sot
oj
ust
i
f
yt
he
r
eadi
ngt
hatt
hepe
t
i
t
i
one
rwoul
dgi
vet
oi
t
.
The par
.i
n w/ci
ti
sf
ound doesno mor
e
t
han es
t
abl
i
sh "
on al
lt
hepr
oper
t
i
esoft
he
Es
t
at
e
, r
e
al and per
sonal
, her
ei
n
adj
udi
cat
ed and ot
her pr
oper
t
i
es notye
t
adj
udi
cat
ed,ac
har
gi
ngl
i
e
n xxx t
os
ecur
e
t
he paymentof(
Canl
as'
)at
t
or
ney'
sf
ees;
"
t
hi
s,w/ t
heexpr
ess agr
eementofal
lt
he
si
gnat
or
i
e
s. The pr
ovi
so t
hat"
upon f
ul
l
paymentoft
hecor
r
espondi
ngl
i
abi
l
i
t
yofa
par
t
y t
he l
i
en on hi
s/her shar
e i
s
e
xt
i
ngui
shed,
"evi
dent
l
y cont
empl
at
e
st
he
pr
obabi
l
i
t
yt
hatt
he hei
r
s obl
i
ge
dt
o pay
Canl
as'f
eeswoul
d pay atdi
ffer
e
ntt
i
mes,
anddenot
e
snot
hi
ngmor
et
han t
hati
fone
oft
heobl
i
gor
ssepar
at
el
ypayshi
sshar
ei
n
KALALO V.LUZ [
34 S 337] - UnderRA
529,i
ft
heobl
i
gat
i
on wasi
ncur
r
edpr
i
ort
o
t
heenact
menti
n apar
t
i
cul
arki
ndofcoi
n
orcur
r
e
ncyot
he
rt
han t
hePhi
l
.cur
r
ency
t
he same shal
l be di
sc
har
g
ed i
n Phi
l
.
cur
r
enc
ymeasur
e
datt
hepr
ev
ai
l
i
ngr
at
eof
e
xchang
e att
he t
i
me t
he obl
i
gat
i
on was
i
ncur
r
ed. RA 529doesnotpr
ovi
def
ort
he
r
at
e ofe
xchange f
or t
he paymentoft
he
obl
i
gat
i
on i
nc
ur
r
e
d af
t
ert
hee
nac
t
mentot
sai
d Act
. The l
ogi
calconcl
usi
on i
st
hat
t
he r
at
e of e
xchange shoul
d be t
hat
pr
e
vai
l
i
ngatt
het
i
meofpaymentf
orsuc
h
cont
r
act
s
.
PONCE V.CA [
90 S 533] - I
ti
st
o be
not
e
dt
hatwhi
l
e an agr
eementt
o pay i
n
dol
l
ar
si
sdecl
ar
edasnul
landv
oi
dandof
no effect
, what t
he l
aw speci
fical
l
y
pr
ohi
bi
t
si
s payment i
n cur
r
enc
y ot
he
r
t
han l
egalt
e
nder
. I
t does not def
eat a
cr
edi
t
or
'
s cl
ai
m f
or payment
, as i
t
speci
fical
l
y pr
ovi
des t
hat "
ev
er
y ot
he
r
domest
i
cobl
i
gat
i
onxxxwhe
t
he
rornotany
suc
h pr
ovi
si
on ast
opaymenti
scont
ai
ned
t
her
ei
n ormade w/ r
espectt
he
r
e
t
o,shal
l
be di
sc
har
ged upon paymenti
n any coi
n
orc
ur
r
encyw/catt
het
i
meofpaymenti
s
l
egalt
ender f
orpubl
i
c and pv
t
.us
e.
" A
cont
r
ar
yr
ul
e woul
d al
l
ow a per
son t
o
pr
ofit or enr
i
ch hi
msel
fi
ne
qui
t
abl
y at
anot
he
r
'
se
xpense.
NEW PACI
FI
C TI
MBER V.SENERI
S[
101S
686] - I
ti
st
o be e
mphasi
z
ed t
hatt
he
c
he
ck deposi
t
e
d by t
he pe
t
i
t
i
oner i
nt
he
amount of P50,
000 i
s not an or
di
nar
y
c
he
ck but a Cashi
er
'
s c
hec
k of t
he
Equi
t
abl
e Banki
ng Cor
p.
,a bank ofgood
s
t
andi
ng and r
eput
at
i
on. I
twas e
v
en a
cer
t
i
fied cr
ossed c
hec
k. I
ti
s wel
lknown
and accept
ed pr
act
i
ce i
n t
he busi
ness
sect
ort
hataCashi
er
'
sc
hec
ki
sdeemedas
c
ash.
Mor
e
over
,s
i
ncet
hes
ai
dchec
k has
been c
er
t
i
fied byt
hedr
awe
ebank,byt
he
cer
t
i
ficat
i
on,t
hef
undsr
epr
esent
e
d byt
he
c
he
ckar
et
r
ansf
er
r
edf
r
om t
hec
r
e
di
toft
he
makert
ot
hatoft
hepay
eeorhol
der
,and
f
or al
li
nt
ent
s and pur
poses, t
he l
at
t
e
r
becomest
hedeposi
t
oroft
hedr
aweebank,
w/ r
i
ght
s and dut
i
es of one i
n suc
h
si
t
uat
i
on. Whe
r
ea c
hec
ki
sc
er
t
i
fied by
t
he bank on w/c i
t i
s dr
awn, t
he
cer
t
i
ficat
i
on i
s equi
v
al
ent t
o accept
ance.
Sai
dcer
t
i
ficat
i
on"
i
mpl
i
e
st
hatt
hec
hec
ki
s
dr
awn upon s
uffici
entf
undsi
nt
hehands
of t
he dr
awe
e, t
hat t
hey have been s
e
t
apar
tf
or
ti
t
s sat
i
sf
act
i
on,and t
hatt
he
y
shal
lbes
o appl
i
ed whenevert
hec
heck i
s
pr
esent
ed f
or payment
.
I
t i
s an
under
s
t
andi
ng t
hat t
he c
heck i
s good
t
hen,and shal
lcont
i
nue good,and t
hi
s
agr
e
ementi
sasbi
ndi
ngon t
hebankasi
t
s
not
e
si
nci
r
cul
at
i
on,ac
er
t
i
ficat
eofdeposi
t
payabl
et
ot
he or
der oft
he deposi
t
or
,or
any ot
herobl
i
gat
i
on i
tcan assume. The
obj
e
ct of cer
t
i
f
yi
ng a chec
k, as r
egar
ds
bot
h par
t
i
es,i
st
oenabl
et
hehol
dert
ouse
i
tas money.
" When t
he hol
derpr
ocur
es
t
he c
hec
k t
o be cer
t
i
fied, "
t
he c
hec
k
oper
at
e
sasan assi
gnmentofapar
toft
he
f
unds t
o t
he cr
edi
t
or
s.
" Henc
e, t
he
e
xcept
i
on t
ot
he r
ul
e enunci
at
ed under
Sec.63oft
heCB Actt
ot
heeffectt
hat"
a
c
he
ck w/c has been cl
ear
ed and cr
edi
t
e
d
t
ot
he accoun of t
he cr
edi
t
or shal
l be
equi
val
entt
o a del
i
ver
yt
ot
he cr
edi
t
ori
n
cash i
n an amountequalt
ot
he amount
cr
edi
t
edt
ohi
saccount
"shal
lappl
yi
nt
hi
s
case.
BI
SHOPOFMALOLOS V.I
AC [
191S411]
- Si
nceanegot
i
abl
ei
ns
t
r
umenti
sonl
ya
subs
t
i
t
ut
ef
ormoney and notmone
y
,t
he
del
i
ver
y ofsuc
h an i
ns
t
r
umentdoes not
,
by i
t
sel
f
,oper
at
e as payment
. Ac
hec
k,
whe
t
her a manager
'
sc
hec
k or or
di
nar
y
c
hec
k,i
snotl
egalt
ender
,andan offerofa
c
he
ck i
n paymentofa debti
snota v
al
i
d
t
e
nder of payment and may be r
e
f
used
r
ecei
ptbyt
heobl
i
geeorcr
e
di
t
or
.
DBP V. SI
MA WEI [
219 S 736] Not
wi
t
hs
t
andi
ng t
he abov
e, i
t does not
necessar
i
l
yf
ol
l
ow t
hat t
he dr
awe
r Si
ma
Weii
sf
r
eedf
r
om l
i
abi
l
i
t
yt
ope
t
i
t
i
onerbank
under t
he l
oan evi
denc
ed by t
he p/n
agr
e
ed t
o byhe
r
. Heral
l
egat
i
on t
hatshe
haspai
dt
hebal
anceofherl
oan w/t
he2
c
he
ckspayabl
et
o pe
t
i
t
i
onerBank hasno
mer
i
tf
or xxx t
hese c
hec
ks we
r
e ne
ver
del
i
ver
ed t
o pe
t
i
t
i
one
r Bank. And ev
en
gr
ant
i
ng,w/o admi
t
t
i
ng,t
hat t
her
e was
del
i
ver
yt
oope
t
i
t
i
onerBank,t
hedel
i
ver
yof
c
he
cks i
n paymentofan obl
i
gat
i
on does
not const
i
t
ut
e payment unl
ess t
hey ar
e
cashed ort
hei
rv
al
uei
si
mpai
r
e
dt
hr
ough
t
he f
aul
toft
he cr
edi
t
or
. None oft
hese
e
xcept
i
onswer
eal
l
egedbyr
esp.Si
maWei
.
TI
BAJA V.CA [
223S272]- I
nt
her
ecent
cases ofPAL v
.CA and Roman Cat
hol
i
c
Bi
shop ofMal
ol
osv
.I
AC,t
hi
sCour
thel
d
t
hat
- "
A c
hec
k, whe
t
her a manager
'
s
c
he
ck or or
di
nar
y c
heck, i
s not l
egal
t
e
nde
r
,and anofferofac
hec
ki
n payment
ofadebti
snotav
al
i
dt
enderofpayment
and mayber
ef
used r
ece
i
ptbyt
heobl
i
gee
orcr
edi
t
or
.
" The r
ul
i
ng i
nt
hese 2 cases
mer
el
y appl
i
e
st
he s
t
at
ut
or
y pr
ovi
si
ons
w/cl
aydown t
her
ul
et
hata c
heck i
snot
l
egalt
e
nderandt
hatacr
edi
t
ormayv
al
i
dl
y
r
ef
usepaymentbyc
hec
k,whe
t
heri
tbea
manager
'
s c
hec
k, c
ashi
er
'
s c
hec
k or
per
sonalc
hec
k.
PALANCAV.CA [
238S593]- I
nt
hecase
at bar
,t
he cl
ear under
s
t
andi
ng of t
he
par
t
i
esi
st
hatt
her
eshoul
d bean upwar
d
adj
us
t
ment of t
he pur
c
hase pr
i
c
e t
he
momentt
he
r
ei
sade
t
er
i
or
at
i
onoft
hePhi
l
.
vi
savi
s t
he US dol
l
ar
. Thi
s i
s t
he
"
mone
t
ar
y fluct
uat
i
on" c
ont
empl
at
ed by
t
hem as woul
d j
us
t
i
f
yt
he adj
us
t
ment
.
Undert
hi
s scenar
i
o,i
ti
s an i
dl
et
ask t
o
de
t
er
mi
ne whe
t
hert
he cont
r
acthas been
vi
si
t
edbyan"
ext
r
aor
di
nar
yi
nflat
i
on"ast
o
t
r
i
ggert
heoper
at
i
on ofAr
t
.1250. Whi
l
e
t
he cont
r
act may cont
ai
n an "
e
scal
at
or
cl
ause"pr
ovi
di
ngt
hati
nt
heoccur
enc
eof
cer
t
ai
ne
vent
s
,t
hecont
r
actpr
i
ces
hal
lbe
i
ncr
e
asedt
oafixedper
cent
ageoft
hebase
pr
i
ce,s
t
i
l
lt
heaut
onomy oft
hepar
t
i
est
o
pr
ovi
de such escal
at
or cl
auses may be
l
i
mi
t
e
d by l
aw. The pe
t
i
t
i
on shoul
d be
di
smi
ssed on t
he gr
ound t
hat t
he
s
t
i
pul
at
i
on oft
hepar
t
i
esi
si
nv
i
ol
at
i
on of
RA529,asamended.
xxx
We cannot gr
antt
he pe
t
i
t
i
on but
notont
hegr
oundsr
el
i
e
dupon byt
het
r
i
al
cour
tandt
heCA t
hatt
her
eshoul
d bean
"
e
xt
r
aor
di
nar
y
i
nflat
i
on" bef
or
e
a
s
t
i
pul
at
i
on f
or an upwar
d adj
us
t
ment of
t
hepur
c
hasepr
i
cecanbeenf
or
c
ed.
1. xxx The pe
t
i
t
i
on shoul
d be
di
smi
ssed on t
he gr
ound t
hat t
he
s
t
i
pul
at
i
on oft
hepar
t
i
esi
si
nv
i
ol
at
i
on of
RA529,aka,CuencoLaw.
The Cour
tci
t
e
d Sec.1 oft
hesai
d
l
aw.
xxx [
T]
he sai
dl
aw pr
ohi
bi
t
st
wo
t
hi
ngs i
n al
l domes
t
i
c cont
r
act
s: (
1)
gi
vi
ng t
he obl
i
gee t
he r
i
ght t
or
equi
r
e
paymenti
naspeci
fiedcur
r
enc
yot
hert
han
Phi
l
.cur
r
ency;and (
2) gi
vi
ngt
heobl
i
gee
t
her
i
ghtt
or
equi
r
epayment"
i
nanamount
of money of t
he Phi
l
i
ppi
nes measur
ed
t
her
eby
.
"
Whe
nt
hepar
t
i
ess
t
i
pul
at
edt
hati
n
t
he ev
ent of mone
t
ar
y fluct
uat
i
on, t
he
unpai
d bal
ance account of t
he her
e
i
n
v
endee on t
he af
or
esai
d subdi
vi
si
on l
ot
shal
lbe i
nc
r
e
ased pr
opor
t
i
onat
e
l
y on t
he
basi
s oft
he pr
esentv
al
ue ofpeso t
ot
he
USdol
l
a,t
heobl
i
geewasgi
v
en t
her
i
ghtt
o
demand payment of t
he bal
. of t
he
pur
c
has
epr
i
ce"
i
n anamountofmoneyof
t
he Phi
l
s.measur
e
d"by a f
or
ei
gn coi
n or
cur
r
enc
y
.
xxx Congr
ess passed RA 529,
havi
ng i
n mi
nd t
he pr
eser
v
at
i
on of t
he
v
al
ue oft
he Phi
l
.peso. A cur
r
enc
y has
v
al
uebec.peopl
ear
ewi
l
l
i
ngt
oaccepti
ti
n
e
xchang
ef
or goods and ser
vi
ces and i
n
paymentf
ordebt
s.xxx I
fi
ns
t
e
ad oft
he
Phi
l
. cur
r
ency
,t
he peopl
e woul
d use a
f
or
ei
gn cur
r
e
ncy as t
he mode ofpayment
oras basi
sf
ormeasur
i
ng t
he amountof
money t
o be pai
di
n Phi
l
.cur
r
ency
,suc
h
usage woul
d adver
sel
y affect t
he
confidence of t
he publ
i
c on t
he Phi
l
.
mone
t
ar
ysys
t
e
m.
2. Thel
i
ber
al
i
z
at
i
on oft
hef
or
ei
gn
e
xchang
e r
e
gul
at
i
ons on r
ecei
pt
s and
di
sbur
sement
s of r
esi
dent
s ar
i
si
ng f
r
om
bot
h nont
r
adeand t
r
adet
r
ansact
i
onsdi
d
notr
epealori
n any way amend RA 529.
I
n essence, sai
d CB Ci
r
cul
ar
s mer
el
y
al
l
owed t
he f
r
e
e sal
e and pur
chase of
f
or
ei
gn exchange out
si
de t
he banki
ng
sys
t
em and ot
her t
r
ans
ac
t
i
ons i
nv
ol
vi
ng
f
or
ei
gn cur
r
ency pr
e
vi
ousl
y subj
ectt
o CB
cont
r
ol
.
Ar
t
.1250.I
ncaseane
xt
r
aor
di
nar
y
i
nflat
i
on or deflat
i
on of t
he cur
r
ency
s
t
i
pul
at
ed shoul
d super
vene,t
heval
ueof
t
he cur
r
e
ncy at t
he t
i
me of t
he
es
t
abl
i
s
hment oft
he obl
i
g
at
i
on shal
lbe
t
he basi
s ofpayment
,unl
ess t
he
r
ei
s an
agr
e
ementt
ot
hecont
r
ar
y
.
Bavi
e
r
a: Thi
sar
t
i
cl
e appl
i
es t
o cont
r
ac
t
s
onl
y
EXTRAORDI
NARY means unusual
or be
yond t
he common fluct
uat
i
on, not
f
or
eseen
BALANE CASES:
VELASCO V.MERALCO [
42 S 556] Fr
om t
he empl
oyment of t
he wor
ds
"
e
xt
r
aor
di
nar
yi
nflat
i
on ordeflat
i
on oft
he
cur
r
enc
ys
t
i
pul
at
e
d"i
nAr
t
.1250,i
tcanbe
seen t
hatt
hesameenvi
sages cont
r
act
ual
obl
i
gat
i
ons wher
e a speci
fic cur
r
ency i
s
sl
ect
ed by t
he par
t
i
es as t
he medi
um of
payment
; he
nce i
t i
s i
nappl
i
cabl
e t
o
obl
i
gat
i
onsar
i
si
ngf
r
om t
or
tand notf
r
om
cont
r
act
. Besi
des,t
her
ei
s no showi
ng
t
hatt
hef
act
ualassumpt
i
on ofsai
d ar
t
i
cl
e
hascomei
nt
oexi
s
t
ence.
COMMI
SSI
ONER OF PUBLI
C HI
GHWAYS
V.BURGOS [
96S 831] - Ar
t
.1250 does
appl
i
es onl
yt
o caseswher
ea cont
r
actor
agr
e
ementi
si
nv
ol
v
ed. I
tdoes notappl
y
wher
et
heobl
i
gat
i
ont
opayar
i
sesf
r
om l
aw,
i
ndependentofc
ont
r
act
s. The t
aki
ng of
pr
i
v
at
epr
oper
t
ybyt
hegovti
nt
hee
xer
c
i
se
ofi
t
spowerofe
mni
nentdomai
n doesnot
gi
v
er
i
set
oacont
r
act
ualobl
i
gat
i
on.
FI
LI
PI
NO PI
PE & FOUNDRY CORP V.
NAWASA
[
161 S 32] - Ext
r
aor
di
nar
y
I
nflat
i
on Defined.
- Ext
r
aor
di
nar
yi
nflat
i
on
e
xi
st
s when "
t
her
e i
s a decr
ease or
i
ncr
e
ase i
nt
he pur
c
hasi
ng power oft
he
Phi
l
.cur
r
ency w/c i
s unusualorbe
yond
t
he c
ommon fluct
uat
i
on i
nt
he v
al
ue of
sai
d cur
r
ency
, and suc
h decr
ease or
i
ncr
e
ase coul
d nothav
e been r
easonabl
y
f
or
eseen or was mani
f
es
t
l
y beyond t
he
cont
e
mpl
at
i
on oft
hepar
t
i
esatt
het
i
meof
t
hees
t
abl
i
shmentoft
heobl
i
g
at
i
on.
The t
r
i
al cour
t poi
nt
ed out
,
howe
ver
, t
hat t
hi
s i
s a wor
l
dwi
de
occur
ence, but har
dl
y pr
oof t
hat t
he
i
nflat
i
on i
se
xt
r
aor
di
nar
yi
n t
he sense
cont
e
mpl
at
e
d i
n Ar
t
. 1250, w/c was
adopt
ed by t
he Code Commi
ssi
on t
o
pr
ovi
de "
a j
ust sol
ut
i
on" t
o t
he
"
uncer
t
ai
nt
y and conf
usi
on asa r
esul
tof
cont
r
act
s ent
er
e
di
nt
o orpayment
s made
dur
i
ng t
he l
as
t war
.
" Whi
l
e appel
l
ant
'
s
v
ol
umi
nous s
t
at
i
s
t
i
cs and r
ecor
ds pr
oved
t
hat t
he
r
e has been a decl
i
ne i
n t
he
pur
c
has
i
ng powe
r oft
he Phi
l
.pes
o,t
hi
s
downwar
df
al
loft
he cur
r
ency c
annotbe
consi
der
ed "
e
xt
r
aor
di
nar
y
.
"I
ti
ssi
mpl
ya
uni
ver
salt
r
end t
hathas nots
par
e
d our
count
r
y
.
DELROSARI
O V.SHELL [
164S556]- I
n
t
hecaseatbar
,whi
l
enoe
xpr
essr
e
f
er
ence
has been made t
o me
t
al
l
i
c cont
ent
,t
her
e
none
t
hel
essi
sar
e
duct
i
on i
n parv
al
ueor
i
nt
hepur
chas
i
ngpowerofPhi
l
.cur
r
ency
.
Ev
en assumi
ngt
he
r
ehasbeen no offici
al
de
val
uat
i
on as t
he t
e
r
m i
st
e
chni
cal
l
y
under
s
t
ood,t
hef
acti
st
hatt
her
ehasbeen
a di
muni
t
i
on or l
esseni
ng i
n t
he
pur
c
has
i
ng poweroft
he peso,t
hust
her
e
has been a "
depr
eci
at
i
on" (
opposi
t
e of
"
appr
e
ci
at
i
on.
"
) Mor
eover
,when l
aymen
unski
l
l
ed i
nt
he semant
i
cs ofeconomi
cs
use t
he t
er
ms "
de
val
uat
i
on" or
"
depr
eci
at
i
on"t
he
ycer
t
ai
nl
ymeant
hem i
n
t
hei
ror
di
nar
y si
gni
ficat
i
on- dec
r
e
ase i
n
v
al
ue. Hence, as cont
empl
at
e
d by t
he
par
t
i
esher
e
i
ni
nt
hei
rl
e
aseagr
eement
,t
he
t
e
r
m "
de
val
uat
i
on" may be r
egar
ded as
synonymous w/ "
depr
e
ci
at
i
on,
" f
or
cer
t
ai
nl
y bot
hr
ef
ert
o a dec
r
ease i
nt
he
v
al
ueoft
hecur
r
ency
. Ther
ent
al
ss
houl
d
t
her
ef
or
e, by t
hei
r agr
eement
, be
pr
opor
t
i
onat
el
yi
nc
r
e
ased.
3.Paymentbycesi
on(
Subsect
i
on2.
)
4.Consi
gnat
i
on(
Subsect
i
on3.
)
SANGRADOR V.VALDERAMA [
168S215]
- Si
nce pe
t
i
t
i
one
r
sf
ai
l
ed t
o pr
ov
et
he
super
v
eni
ngofe
xt
r
aor
di
nar
yi
nflat
i
on be
t
.
4/6/84 and 12/7/84- no pr
oof
s wer
e
pr
esent
ed on how much,f
ori
ns
t
ance,t
he
pr
i
ce i
ndex of goods and se
r
vi
ces had
r
i
sen dur
i
ng t
he i
nt
e
r
veni
ng per
i
od-an
e
xt
r
aor
di
nar
y
i
nflat
i
on
c
annot be
assumed;cons
equent
l
y
,t
he
r
ei
snor
e
ason
orbasi
s,l
e
galorf
act
ual
,f
oradj
ust
i
ngt
he
v
al
ueoft
hePhi
l
.pesoi
nt
hese
t
t
l
ementof
r
espondent
s'obl
i
gat
i
on.
Ar
t
. 1245. Dat
i
on i
n payment
,
wher
e
by pr
oper
t
y i
s al
i
enat
e
d t
o t
he
cr
edi
t
ori
n sat
i
sf
act
i
on ofadebti
n mone
y
,
shal
lbegov
er
nedbyt
hel
aw ofsal
es.
(
noti
nBavi
er
a'
sout
l
i
ne)
Ar
t
.1251. Paymentshal
lbemade
i
nt
hepl
acedesi
gnat
edi
nt
heobl
i
gat
i
on.
Ther
ebei
ng no e
xpr
esss
t
i
pul
at
i
on
and i
ft
he under
t
aki
ng i
st
o del
i
ver a
de
t
er
mi
nat
et
hi
ng,t
he payment shal
lbe
made wher
e
v
ert
het
hi
ng mi
ghtbe att
he
momentt
heobl
i
gat
i
onwascons
t
i
t
ut
e
d.
I
n any ot
he
r case t
he pl
ace of
payment shal
l be t
he domi
ci
l
e of t
he
debt
or
.
I
ft
he debt
orc
hanges hi
s domi
ci
l
e
i
n bad f
ai
t
h or af
t
er he has i
ncur
r
e
di
n
del
ay
,t
he addi
t
i
onal e
xpenses shal
l be
bor
nebyhi
m.
These pr
ovi
si
ons ar
e wi
t
hout
pr
ej
udi
ce t
o venue under t
he Rul
es of
Cour
t
.
FourSpeci
alKi
ndsofPayment
s:
1.Dac
i
onenpago(
Ar
t
.1245.
)
2. Appl
i
cat
i
on ofpayment
s (
Subsect
i
on
1.
)
Di
scussi
on:
1.Dac
i
onenpago
Bal
ane: Dac
i
on en pago (
I
n Roman l
aw,
cal
l
ed "
dat
i
o i
n sol
ut
um"
,i
n Fr
ench,
"
dat
i
on en pai
ement
,
"i
n Spani
sh,"
dac
i
on
en pago.
"
) Dat
i
on i
n paymenti
spossi
bl
e
onl
yi
ft
her
ei
sadebti
nmoney
.I
nst
e
adof
money
,a t
hi
ngi
sdel
i
v
er
ed i
n sat
i
sf
act
i
on
oft
hedebti
nmoney
.
Dat
i
on i
n paymenti
s gover
ned by
t
hel
aw on sal
esbec.i
ti
sasi
ft
hec
r
e
di
t
or
i
snow t
hev
endee,
andt
hedebt
orbecomes
now t
hevendor
.
Dat
i
on en pago i
se
xpl
ai
ned i
nt
he
caseofFi
l
i
nvestv
.Phi
lAce
t
y
l
e
ne,supr
a.
Ther
e ar
et
wo ways atl
ooki
ng at
daci
onenpago:
1. Cl
as
si
calway whe
r
edac
i
on en
pagoi
st
r
e
at
edasas
al
e
.
2. Moder
n concept w/c t
r
e
at
s
dac
i
onenpagoasanovat
i
on.
Cas
t
an has anot
he
r vi
e
w- Bot
h
ar
ewr
ong. A dac
i
onenpagoi
snotas
al
e
bec.t
he
r
ei
s no i
nt
e
nt
i
on t
o ent
eri
nt
oa
cont
r
actofs
al
e. I
ti
snotal
so a novat
i
on
bec. i
n novat
i
on, t
he ol
d obl
i
gat
i
on i
s
e
xt
i
ngui
shed and a new obl
i
g
at
i
on t
akes
i
t
s pl
ace. Buthe
r
e
,t
he ol
d obl
i
g
at
i
on i
s
e
xt
i
ngui
shed.
What t
akes i
t
s pl
ace?
Not
hi
ng.Sowhati
si
t
?I
ti
sas
peci
alf
or
m
ofpaymentw/cr
e
sembl
esas
al
e
.
Ther
e ar
e t
wo mor
e t
hi
ngs t
o
r
ememberi
nt
hecasesofFi
l
i
nvestv
.Phi
l
.
Acyt
el
ene,supr
a.and Lopez v
.CA,114
SCRA671:
1. Dac
i
on en pago can t
akepl
ace
onl
yi
fbot
hpar
t
i
esconsent
.
2. T
owhatext
enti
st
heobl
i
g
at
i
on
e
xt
i
ngui
shed? Upt
ot
hev
al
ueoft
het
hi
ng
gi
v
en (
t
het
hi
ngmus
tbeappr
ai
sed)unl
ess
t
he par
t
i
es agr
e
e on
a
t
o
t
al
e
xt
i
ngui
shment
.(
Lopez
.v
.CA,s
upr
a.
)
2.Appl
i
cat
i
onofPayment
Bal
ane:
Appl
i
cat
i
on of payment
(
I
mput
ac
i
on i
n Spani
sh)i
st
hedesi
gnat
i
on
ofadebtwhi
chi
sbei
ngpai
dbyt
hedebt
or
who has se
ver
alobl
i
gat
i
ons oft
he same
ki
nd i
nf
avoroft
he cr
edi
t
ort
o whom t
he
paymenti
smade(
quot
i
ngTol
ent
i
no.
)
Rul
es whe
r
et
he amount sent by
t
he debt
ort
ot
hecr
edi
t
ori
sl
esst
han al
l
t
hati
sdue.
Fi
r
s
tr
ul
e: Appl
yi
n accor
dancew/
t
heagr
e
ement
.
Sec
ond r
ul
e: Debt
ormayappl
yt
he
amount(
an obvi
ousl
i
mi
t
at
i
on bec.oft
he
pr
i
nci
pl
es of i
ndi
vi
si
bi
l
i
t
y and i
nt
e
gr
i
t
y)
wher
et
he
r
ewoul
dbepar
t
i
alpayment
.
Thi
r
dr
ul
e: Cr
edi
t
orcan maket
he
appl
i
cat
i
on.
Four
t
hr
ul
e: Appl
yt
ot
he mos
t
one
r
ousdebt
.(
Ar
t
.1252,par
.1.
)
What ar
e t
he r
ul
es t
o
de
t
er
mi
new/ci
st
hemostone
r
ous
debt
?
1. I
fone i
si
nt
e
r
es
tpayi
ng
and t
heot
heri
snot
,t
hedebtw/c
i
si
nt
e
r
e
stpayi
ngi
smor
eone
r
ous.
2. I
fonei
sa secur
ed debt
and t
he ot
he
ri
s not
,t
he s
ecur
ed
debti
smor
eone
r
ous
3. I
fbot
h ar
ei
nt
er
estf
r
ee,
one i
s ol
der t
han t
he fir
s
t
,t
he
newe
r one i
s mor
e oneous bec.
pr
escr
i
pt
i
on wi
l
lt
ake l
onger w/
r
espectt
ot
hene
we
rdebt
.
Fi
f
t
hr
ul
e: Pr
opor
t
i
onalappl
i
cat
i
on
i
ft
hedebt
sar
ee
qual
l
yoner
ous.
Ar
t
.1252. He who has var
i
ous
debt
soft
hes
ameki
ndi
nf
avorofoneand
t
hes
amec
r
edi
t
or
,maydecl
ar
eatt
het
i
me
ofmaki
ngt
hepayment
,t
owhi
ch oft
he
m
t
he same mus
t be appl
i
ed. Unl
ess t
he
par
t
i
es so s
t
i
pul
at
e, or when t
he
appl
i
cat
i
on of payment i
s made by t
he
par
t
yf
orwhosebenefitt
het
er
m hasbeen
cons
t
i
t
ut
ed,appl
i
cat
i
on shal
lnotbemade
ast
ode
bt
swhi
c
har
enotye
tdue
.
I
ft
he debt
or accept
s f
r
om t
he
cr
edi
t
ora r
ecei
pti
n whi
ch an appl
i
cat
i
on
oft
hepaymenti
smade,t
hef
or
mercannot
compl
ai
n oft
he s
ame,unl
ess t
her
ei
sa
causef
ori
nval
i
dat
i
ngt
hec
ont
r
act
.
Ar
t
.1253. I
ft
he debt pr
oduces
i
nt
e
r
e
st
,paymentoft
hepr
i
nci
palshal
lnot
be deemed t
o have been made unt
i
lt
he
i
nt
e
r
e
st
shav
ebeenc
over
ed.
Ar
t
. 1254. When t
he payment
cannotbeappl
i
ed i
n ac
cor
dancewi
t
ht
he
pr
ecedi
ng r
ul
es,ori
fappl
i
cat
i
on can not
bei
nf
er
r
ed f
r
om ot
herci
r
cums
t
ances,t
he
debtwhi
ch i
smostoner
oust
ot
hedebt
or
,
amongt
hosedue,shal
lbedeemedt
ohav
e
beensat
i
sfied.
I
ft
he debt
s due ar
e oft
he same
nat
ur
eand bur
den,t
hepaymentshal
lbe
appl
i
edt
oal
loft
he
m pr
opor
t
i
onat
e
l
y
.
(
noti
nBavi
er
a'
sout
l
i
ne)
Subsect
i
on2.
- PaymentbyCessi
on
Bal
ane: Conceptofpaymentby c
essi
on.
Pr
oper
t
yi
st
ur
nedoverbyt
hedebt
ort
ot
he
cr
edi
t
or who acqui
r
e
st
he r
i
ghtt
os
el
li
t
and di
vi
de t
he ne
t pr
oceeds among
t
hemsel
v
es.
Whyi
spaymentby c
essi
on aspeci
alf
or
m
of payment
?Bec. t
he
r
e i
s no
compl
e
t
e
nessofper
f
or
mance(
r
e
:i
nt
egr
i
t
y
.
)
I
nmostcases,t
he
r
ewi
l
lbeabal
ancedue.
Di
ffer
ence be
t
ween dac
i
on en pago and
paymentbyc
essi
on.
-I
n dac
i
on en pago,
t
her
ei
sa t
r
ansf
e
rofowner
s
hi
pf
r
om t
he
debt
or t
ot
he cr
edi
t
or
. I
n payment by
c
esi
on,t
he
r
ei
s no t
r
ans
f
erofowner
s
hi
p.
The cr
edi
t
or
s si
mpl
y acqui
r
et
he r
i
ghtt
o
sel
lt
hepr
oper
t
i
esoft
hede
bt
orand appl
y
t
hepr
oceedsoft
hes
al
et
ot
hes
at
i
sf
act
i
on
oft
hei
rcr
edi
t
.
Does payment by c
essi
on t
e
r
mi
nat
e al
l
debt
sdue?- Gener
al
l
y
,no. Butonl
yt
o
t
he e
xt
ent of t
he ne
t pr
oceeds. The
e
xt
i
ngui
shment of t
he obl
i
g
at
i
on i
s pr
o
t
ant
o. Thi
si
st
o be di
s
t
i
ngui
shed f
r
om
Legalcessi
on whe
r
et
heext
i
ngui
shmentof
t
he obl
i
g
at
i
on i
st
ot
al
. Legalces
si
on i
s
gover
nedbyt
heI
ns
ol
vencyLaw.
Ar
t
.1255. Thede
bt
ormayc
edeor
assi
gn hi
s pr
oper
t
yt
o hi
s cr
edi
t
or
si
n
paymentofhi
sdebt
s
. Thi
scesi
on,unl
e
ss
t
her
ei
ss
t
i
pul
at
i
on t
ot
he cont
r
ar
y
,shal
l
onl
yr
el
easet
hedebt
orf
r
om r
esponsi
bi
l
i
t
y
f
ort
hene
tpr
oceedsoft
het
hi
ngassi
gned.
Theagr
eement
swhi
c
h,ont
hee
ffectoft
he
cessi
on,ar
emadebe
t
ween t
hedebt
orand
hi
s cr
edi
t
or
sshal
lbe gover
ne
d byspeci
al
l
aws.
ac
c
i
pi
endi (
when t
he cr
edi
t
or w/o j
us
t
cause,r
e
f
usest
oacceptpayment
.
)
Consequence whe
nt
he c
r
e
di
t
or w/o j
ust
cause,r
ef
uses t
o acce
ptpayment
- The
debt
or may j
ust del
ay payment
. But
some
t
hi
ngs
t
i
l
lhangsabov
ehi
shead. He
i
st
her
ef
or
e
,gi
ven t
he opt
i
on t
oc
onsi
gn.
Di
s
t
i
ngui
sh t
hi
sf
r
om BGB (
Ger
man Ci
vi
l
Code) w/c st
at
es t
hat mor
a ac
c
i
pi
endi
e
xt
i
ngui
shest
heobl
i
gat
i
on.
Ar
t
.1256. I
ft
hec
r
edi
t
ort
o whom
t
e
nderofpaymenthasbeen mader
e
f
uses
wi
t
houtj
ustcauset
oaccepti
t
,t
hedebt
or
shal
lber
el
easedf
r
om r
esponsi
bi
l
i
t
ybyt
he
consi
gnat
i
onoft
het
hi
ngorsum due.
Consi
gnat
i
on al
one shal
lpr
oduce
t
hesamee
ffecti
nt
hef
ol
l
owi
ngcases:
(
1)When t
hecr
e
di
t
ori
s absentor
unknown,ordoesnotappearatt
hepl
ace
ofpayment
;
(
2) When he i
si
ncapaci
t
at
e
d t
o
r
ecei
v
et
hepaymentatt
het
i
mei
ti
sdue;
(
3)When,wi
t
hout j
ustcause,he
r
ef
use
st
ogi
v
ear
ecei
pt
;
(
4) When t
wo or mor
e per
sons
cl
ai
mt
hes
amer
i
ghtt
ocol
l
e
ct
;
(
5)Whe
nt
het
i
t
l
eoft
heobl
i
gat
i
on
hasbeenl
os
t
.
B.Tende
rofPaymentandConsi
gnat
i
on
Subsect
i
on3.
- TenderofPayment&
Consi
gnat
i
on
Bal
ane: The t
i
t
l
e of t
he subsect
i
on i
s
wr
ong. I
tshoul
d havebeen Consi
gnat
i
on
onl
y because t
hati
st
he speci
almode of
paymentandnott
het
enderofpayment
.I
t
i
saspeci
almodeofpaymentbec.payment
i
s made not t
ot
he cr
e
di
t
or but t
ot
he
cour
t
.
Consi
gnat
i
on i
s an opt
i
on on t
he
par
t of t
he debt
or bec. consi
gnat
i
on
assumes t
hat t
he cr
e
di
t
or was i
n mor
a
BALANE CASES:
SOCO V. MI
LI
TANTE [
123 S 160] Consi
gnat
i
on Defined.
- Consi
gnat
i
on i
s
t
heactofdeposi
t
i
ngt
het
hi
ngduew/ t
he
cour
torj
udi
ci
alaut
hor
i
t
i
eswhene
vert
he
cr
edi
t
orc
annotacceptorr
e
f
usest
oaccept
paymentand i
tgener
al
l
yr
e
qui
r
esa pr
i
or
t
e
nderofpayment
.
Requi
si
t
esofaVal
i
dConsi
gnat
i
on.
Thede
bt
ormus
tshow (
1)t
hatt
he
r
ewasa
debtdue;(
2) t
hatt
hec
onsi
gnat
i
on oft
he
obl
i
gat
i
onhadbeenmadebec.t
hecr
edi
t
or
t
o whom t
ender of payment was made
r
ef
use
dt
oaccepti
t
,orbec.hewasabsent
or i
ncapaci
t
at
e
d,or bec.sev
er
alper
sons
cl
ai
med t
o be ent
i
t
l
ed t
o r
ecei
ve t
he
amountdue;(
3) t
hatpr
e
vi
ous not
i
ce of
t
he consi
gnat
i
on had been gi
ven t
ot
he
per
soni
nt
e
r
e
st
e
di
nt
hepe
r
f
or
manceoft
he
obl
i
gat
i
on(
Ar
t
.1257)
;(
4)t
hatt
heamount
duewaspl
acedatt
hedi
sposaloft
hecour
t
(
consi
gnat
i
on pr
oper
)
;(
5) t
hataf
t
e
rt
he
consi
gnat
i
on had be
en made t
he per
son
i
nt
e
r
e
st
e
d was not
i
f
ed t
her
eof (
sec
ond
not
i
ce.
)
Fai
l
ur
e of any of t
hese
r
equi
r
ement
si
senoughgr
oundt
or
endera
consi
gnat
i
oni
neffect
i
v
e.
ALFONSO V.CA [
168 S 545] - Such
r
ej
ect
i
on r
ende
r
e
d t
he pr
oposal of f
r
ee
r
ent
alw/of
or
ceandeffect
. Def
.t
her
ef
or
e
wasdut
ybound t
opayt
her
ent
al
sast
hey
f
al
ldue i
n or
der t
o abor
tany ej
ect
ment
pr
oceedi
ngs agai
ns
t hi
m.
.I
ft
he l
essor
r
ef
use
st
o acceptt
he payment
,as i
nt
he
caseatbar
,def
.hadar
emedypr
ovi
dedf
or
by l
aw,namel
y consi
gnat
i
on i
n cour
tor
deposi
ti
nabanki
nt
hel
essor
r
'
snamew/
duenot
i
cet
ot
hel
essor
. Unf
or
t
unat
el
y
,i
t
i
sofr
ecor
dt
hatdef
.di
d notav
ai
lofs
uch
r
emedy so t
hatwhen pl
ai
nt
i
ffs fil
ed t
he
ej
ect
ment pr
oceedi
ngs agai
ns
t hi
m, t
he
r
ent
al
scor
r
e
spondi
ngt
het
hemo.ofApr
i
l
t
oJul
y1984hadnoty
e
tbeen pai
dbydef
.
Tende
r of payment i
s not enoughconsi
gnat
i
on mus
t f
ol
l
ow i
n or
de
r t
o
e
xt
i
ngui
sh t
hedebt
. Ot
her
wi
se,f
ai
l
ur
et
o
compl
y w/ t
he r
equi
r
ement
s pr
ovi
ded f
or
underSec.5,par
.(
b)
,PB 25 i
sa gr
ound
f
or ej
ect
ment
. Del
ay
ed consi
gnat
i
on or
deposi
twi
l
lnotdo.
TAYAG V. CA [
219 S 480] - xxx
[
P]
e
t
i
t
i
oner
sar
guet
hatt
her
ewasnov
al
i
d
t
e
nderofpaymentnorconsi
gnat
i
on oft
he
sum ofP18,
520 w/ct
hey acknowl
edge t
o
hav
ebeen deposi
t
ed i
n cour
ton 1/22/81
fiv
ey
e
ar
saf
t
e
rt
heamountofP27,
000had
t
o be pai
d.xxx Agai
ns
tt
hi
s sugges
t
i
on
i
gnor
es t
he f
act t
hat consi
gnat
i
on al
one
pr
oducedt
heeffectofpaymenti
nt
hecase
atbar bec.i
twas es
t
abl
i
shed t
hat2 or
mor
ehei
r
sofJuanGal
i
ci
a,Sr
.cl
ai
medt
he
samer
i
ghtt
ocol
l
ect
.
MANI
LA REMANANTV.CA [
231S 272] xxx[
U]
pon consi
gnat
i
on byt
heVe
nt
ani
l
l
as
oft
hesum due,t
het
r
i
alcour
tmaye
nt
e
r
j
udgment cancel
l
i
ng t
he t
i
t
l
e of t
he
pe
t
i
t
i
oner ov
er t
he pr
oper
t
y and
t
r
ansf
er
r
i
ngt
hesamet
ot
her
esponde
nt
s.
Thi
sj
udgment
sshal
lhav
et
hes
amef
or
ce
and effectasa conveyanc
e dul
y execut
ed
i
n accor
danc
ew/ t
her
equi
r
ement
soft
he
l
aw.
Ar
t
. 1257. I
n or
de
r t
hat t
he
consi
gnat
i
on oft
het
hi
ngduemayr
el
ease
t
heobl
i
gor
,i
tmustfir
s
tbeannounced t
o
t
heper
sonsi
nt
er
est
e
di
nt
hef
ul
fil
l
mentof
t
heobl
i
gat
i
on.
The
consi
gnat
i
on
shal
l be
i
neffect
ual i
fi
ti
s not made s
t
r
i
ct
l
yi
n
consonance wi
t
h t
he pr
ovi
si
ons whi
ch
r
egul
at
epayment
.
Ar
t
.1258. Consi
gnat
i
on shal
lbe
madebydeposi
t
i
ng t
het
hi
ngsdueatt
he
di
sposalofj
udi
ci
alaut
hor
i
t
y
,bef
or
ewhom
t
het
e
nderofpaymentshal
lbepr
oved,i
na
pr
opercase,andt
heannouncementoft
he
consi
gnat
i
oni
not
he
rcases.
The consi
gnat
i
on havi
ng been
made,t
he i
nt
e
r
e
st
e
d par
t
i
es shal
lal
so be
not
i
fiedt
her
eof
.
Ar
t
. 1259.
The expens
es of
consi
gnat
i
on,when pr
oper
l
y made,shal
l
bec
har
gedagai
ns
tt
hec
r
edi
t
or
.
Ar
t
.1260. Onc
et
he consi
gnat
i
on
has been dul
y made,t
hedebt
ormayask
t
hej
udge t
oor
dert
he cancel
l
at
i
on oft
he
obl
i
gat
i
on.
Bef
or
et
hec
r
e
di
t
orhasaccept
edt
he
consi
gnat
i
on, or bef
or
e a j
udi
ci
al
decl
ar
at
i
ont
hatt
heconsi
gnat
i
onhasbeen
pr
oper
l
y made,t
he debt
or may wi
t
hdr
aw
t
he t
hi
ng ort
he sum de
posi
t
ed,al
l
owi
ng
t
heobl
i
gat
i
ont
or
e
mai
ni
nf
or
ce.
Ar
t
. 1261. I
f
,t
he consi
gnat
i
on
havi
ng been made, t
he cr
e
di
t
or shoul
d
aut
hor
i
z
et
hedebt
ort
owi
t
hdr
aw t
hesame,
he shal
ll
ose ev
er
y pr
ef
e
r
ence whi
ch he
may hav
e ov
ert
he t
hi
ng.The codebt
or
s
,
guar
ant
or
sandsur
e
t
i
esshal
lber
el
eased.
C.LossorI
mpossi
bi
l
i
t
yofPe
r
f
or
mance
Bal
ane: Appl
i
cabl
e pr
ovi
si
ons.
- I
n an
obl
i
gat
i
on t
ogi
veade
t
e
r
mi
nat
et
hi
ng(
Ar
t
.
1262)
;i
n an obl
i
g
at
i
on t
o gi
ve a g
ener
i
c
t
hi
ng (
Ar
t
.1263)
;i
n an obl
i
gat
i
on t
o do
(
Ar
t
.1266.
)
Ther
ear
et
woki
ndsofi
mpossi
bi
l
i
t
y
of per
f
or
mance:
(
1)
an or
i
gi
nal
i
mpossi
bi
l
i
t
y and
(
2) super
v
eni
ng
i
mpossi
bi
l
i
t
y
. The ki
nd of i
mpossi
bl
i
t
y
t
al
ke
d about he
r
e i
s super
veni
ng
i
mpossi
bi
l
i
t
y
. An or
i
gi
nal i
mpossi
bi
l
i
t
y
makest
heobl
i
gat
i
on v
oi
d. I
twi
l
lbecase
of an obl
i
gat
i
on w/o a cause (
s
ee Ar
t
.
1409,no.2 "
t
hose wher
et
he cause or
obj
e
ct di
d not exi
st at t
he t
i
me oft
he
t
r
ansact
i
on"
-t
hephr
ase"
di
dnote
xi
stat
t
het
i
meoft
het
r
ansact
i
on"i
si
naccur
at
e
;
i
ti
spossi
bl
et
oent
eri
nt
oc
ont
r
act
swher
e
t
heobj
ectdi
d notexi
statt
het
i
meoft
he
t
r
ansact
i
on, e.
g.
,cont
r
act ov
er a f
ut
ur
e
t
hi
ng;t
hephr
aseshoul
dhav
ebeen "
coul
d
note
xi
st
"
)Ac
ont
r
actwhosepr
es
t
at
i
on i
s
i
mpossi
bl
e at t
he begi
nni
ng i
s not t
he
concer
n ofl
ossoft
hi
ngdue/i
mpossi
bi
l
i
t
y
ofper
f
or
mance.
Ar
t
. 1262. An obl
i
g
at
i
on whi
c
h
consi
st
si
nt
he de
l
i
ver
y ofa de
t
er
mi
nat
e
t
hi
ngshal
lbee
xt
i
ngui
shed i
fi
tshoul
dbe
l
ostordes
t
r
oyed wi
t
houtt
he f
aul
toft
he
debt
or
, and be
f
or
e he has i
ncur
r
ed i
n
del
ay
.
Whe
n by l
aw or s
t
i
pul
at
i
on, t
he
obl
i
gori
sl
i
abl
ee
v
en f
orf
or
t
ui
t
ouse
v
ent
s
,
t
he l
oss oft
he t
hi
ng does notext
i
ngui
sh
t
heobl
i
g
at
i
on,andheshal
lber
esponsi
bl
e
f
ordamages.Thesamer
ul
eappl
i
eswhen
t
he nat
ur
e oft
he obl
i
gat
i
on r
equi
r
es t
he
assumpt
i
onofr
i
sk.
Bal
ane: Ar
t
. 1262 i
s t
he same as
f
or
t
ui
t
ouse
v
enti
nAr
t
.1174.Theeffecti
s
t
hesame:Theobl
i
gat
i
oni
sext
i
ngui
s
hedi
f
t
he obl
i
g
at
i
on i
st
o del
i
vera de
t
e
r
mi
nat
e
t
hi
ng. I
ft
he obl
i
gat
i
on i
s t del
i
ver a
gener
i
c t
hi
ng, t
he obl
i
gat
i
on i
s not
e
xt
i
ngui
shed.
Genus nunquam per
i
t
(
"
Genus ne
v
er per
i
she
s.
" Thi
s i
s t
he
gener
alr
ul
e. Butwhati
snotcov
er
ed by
t
hi
sr
ul
ei
s an obl
i
gat
i
on t
o del
i
ver a
l
i
mi
t
e
d gener
i
c(
some
t
hi
ng i
n be
t
.speci
fic
and gene
r
i
ct
hi
ng)
, e.
g.
,"
For P3,
000, I
pr
omi
se t
o del
i
v
er t
o you one of my
wat
c
hes.
" Thi
s obl
i
gat
i
on doesnotr
e
al
l
y
f
al
lunder e
i
t
herAr
t
.1262 or Ar
t
.1263.
Butt
hi
s obl
i
gat
i
on r
eal
l
yf
al
l
s underAr
t
.
1262. I
nt
hi
scase,t
heobl
i
gat
i
on maybe
e
xt
i
ngui
shed byt
hel
oss ofal
lt
he t
hi
ngs
t
hr
oughf
or
t
ui
t
ousev
ent
.
Ar
t
. 1263. I
n an obl
i
gat
i
on t
o
del
i
ver a gener
i
c t
hi
ng, t
he l
oss or
des
t
r
uct
i
on ofanyt
hi
ng oft
he same ki
nd
doesnotext
i
ngui
sht
heobl
i
gat
i
on.
Ar
t
. 1264.
The cour
t
s shal
l
de
t
er
mi
ne,
whe
t
her
,
under
t
he
ci
r
cums
t
ances, t
he par
t
i
al l
oss of t
he
obj
e
ctoft
heobl
i
gat
i
on i
ss
oi
mpor
t
antas
t
oext
i
ngui
sht
heobl
i
g
at
i
on.
Ar
t
.1265. Whenevert
he t
hi
ng i
s
l
osti
nt
heposse
ssi
onoft
hedebt
or
,i
tshal
l
bepr
esumed t
hatt
hel
osswasduet
ohi
s
f
aul
t
,unl
esst
he
r
ei
spr
ooft
ot
hecont
r
ar
y
,
and wi
t
houtpr
ej
udi
cet
ot
hepr
ovi
si
onsof
ar
t
i
cl
e 1165.Thi
s pr
esumpt
i
on does not
appl
yi
n caseofear
t
hquake,flood,s
t
or
m,
orot
hernat
ur
alcal
ami
t
y
.
Ar
t
. 1165. Whe
n
whati
st
obedel
i
v
er
ed i
sa
de
t
er
mi
nat
e t
hi
ng, t
he
cr
edi
t
or
,i
n addi
t
i
on t
ot
he
r
i
ghtgr
ant
ed hi
m byar
t
i
cl
e
1170, may compel t
he
debt
ort
omaket
hedel
i
v
er
y
.
I
f t
he
t
hi
ng
i
s
i
nde
t
er
mi
nat
eorgener
i
c,he
mayask t
hatt
heobl
i
g
at
i
on
be compl
i
ed wi
t
h at t
he
e
xpens
eoft
hedebt
or
.
I
ft
heobl
i
gordel
ays,or
has pr
omi
sed t
o del
i
vert
he
same t
hi
ng t
ot
wo ormor
e
per
sons who do not hav
e
t
he same i
nt
er
est
,he shal
l
be r
e
spons
i
bl
e f
or any
f
or
t
ui
t
ouseventunt
i
lhehas
effect
e
dt
hedel
i
ver
y
.
Ar
t
.1170. Those who
i
nt
he per
f
or
mance oft
hei
r
obl
i
gat
i
ons ar
e gui
l
t
y of
f
r
aud,negl
i
gence,or de
l
ay
,
and t
hose who i
n any
manner cont
r
avene t
he
t
e
nort
her
e
of ar
el
i
abl
ef
or
damages.
Ar
t
. 1266.
The debt
or i
n
obl
i
gat
i
ons t
o do shal
l al
so be r
e
l
eased
when t
he pr
es
t
at
i
on becomes l
e
gal
l
y or
physi
cal
l
yi
mpossi
bl
e wi
t
houtt
he f
aul
tof
t
heobl
i
gor
.
Bal
ane:
Obj
ect
i
v
e and Subj
ect
i
ve
I
mpossi
bi
l
i
t
y
.
- I
n obj
ect
i
v
ei
mpossi
bi
l
i
t
y
,
t
he actcannot be done by anyone.The
effect of obj
ect
i
v
e i
mpossi
bi
l
i
t
y i
s t
o
e
xt
i
ngui
sh t
he obl
i
gat
i
on. I
n subj
ect
i
ve
i
mpossi
bi
l
i
t
y
, t
he obl
i
gat
i
on becomes
i
mpossi
bl
eonl
y w/ r
espectt
ot
heobl
i
gor
.
Ther
e ar
e 3 vi
e
ws as t
ot
he effect ofa
subj
ect
i
v
ei
mpossi
bi
l
i
t
y: (
1) One vi
e
w
hol
ds t
hat t
he obl
i
gat
i
on i
s not
e
xt
i
ngui
shed. The obl
i
gor shoul
d ask
anot
he
rt
odo t
heobl
i
g
at
i
on. (
2) Anot
her
vi
ew hol
ds t
hat t
he obl
i
gat
i
on i
s
e
xt
i
ngui
shed.
(
3) A t
hi
r
d vi
ew
di
s
t
i
ngui
shes one pr
es
t
at
i
on w/c i
s ver
y
per
sonaland one w/c ar
e not per
sonal
suc
h t
hat subj
ect
i
ve i
mpossi
bi
l
i
t
y i
sa
cause f
or ext
i
ngui
shes a v
er
y per
sonal
obl
i
gat
i
on butnotanobl
i
gat
i
on w/ci
snot
v
er
ype
r
sonal
.
BALANE CASES:
PEOPLE V. FRANKLI
N [
39 S 363] Appel
ant now cont
ends t
hat t
he l
owe
r
cour
t shoul
d have r
el
eased i
tf
r
om al
l
l
i
abi
l
i
t
y undert
he bai
lbond pos
t
ed by i
t
bec.i
t
sf
ai
l
ur
et
o pr
oduce and sur
r
ender
t
heaccuse
d wasduet
ot
henegl
i
genceof
t
hePhi
l
.Govti
t
sel
fi
ni
ssui
ng a passpor
t
t
o sai
d accused,t
her
eby enabl
i
ng her t
o
l
eav
et
he count
r
y
. I
n suppor
t of t
hi
s
cont
e
nt
i
on,t
hepr
ovi
si
onsofAr
t
.1266ar
e
i
nv
oked.
HELD: Ar
t
.1266,NCC doesnotappl
yt
oa
sur
et
y uponabai
lbond.
- Ar
t
.1266does
notappl
yt
oasur
e
t
yupon abai
lbond,as
sai
dAr
t
.s
peaksofar
el
at
i
on be
t
.adebt
or
andcr
edi
t
or
,w/cdoesnotexi
s
ti
nt
hecase
ofasur
e
t
yuponabai
lbond,ononehand,
and t
he St
at
e
,on t
he ot
he
r
. For whi
l
e
sur
e
t
i
esuponabai
lbond(
orr
ecogni
z
ance)
can di
schar
g
et
hemsel
vesf
r
om l
i
abi
l
i
t
y by
sur
r
ende
r
i
ng t
hei
r pr
i
nci
pal
,sur
e
t
i
es on
or
di
nar
y bonds or commer
ci
alcont
r
act
s
,
asag
ener
alr
ul
e,c
an onl
yber
el
eased by
paymentoft
hedebtorper
f
or
manceoft
he
acts
t
i
pul
at
e
d.
I
MMACULATA V.NAVARRO [
160S 211] Wehe
r
ebygr
antsai
d al
t
er
nat
i
ve cause of
act
i
on or pr
aye
r
. Whi
l
et
he sal
e was
or
i
gi
nal
l
yexecut
edsome
t
i
ngi
n Dec.1969,
i
t was onl
y on Fe
b. 3,1974 whe
n, as
pr
ay
ed f
orbypr
vt
.r
es,and asor
de
r
ed by
t
hecour
taquo,adeed ofconveyancewas
f
or
mal
l
y execut
ed. Si
nce t
he offer t
o
r
edeem was made on 3/24/75,t
hi
s was
cl
ear
l
y w/i
n t
he 5yr
. per
i
od of l
e
gal
r
edempt
i
onal
l
owedbyt
hePubl
i
cLandAct
.
PNCC V.NLRC [
193 S 401] - Anobl
i
gor
shal
lber
el
eased f
r
om hi
sobl
i
gat
i
on when
t
he pr
es
t
at
i
on has bec
ome l
egal
l
y or
physi
c
al
l
yi
mpossi
bl
e wi
t
houtf
aul
ton hi
s
par
t
.
.
- Pe
t
i
t
i
onercannotbehel
dl
i
abl
ef
or
br
eac
h ofcont
r
ac
tf
ort
hr
eer
easons. xxx
The second r
eason i
sf
ound i
nt
he r
ul
e
t
hatan obl
i
gorshal
lber
el
eased f
r
om hi
s
obl
i
gat
i
onwhent
hepr
est
at
i
onhasbe
come
l
egal
l
y orphysi
cal
l
yi
mpossi
bl
e w/o f
aul
t
onhi
spar
t
.Thesuper
v
eni
ngi
mpossi
bi
l
i
t
y
ofper
f
or
mance,based upon some f
act
or
i
ndependent of t
he wi
l
l of t
he obl
i
gor
,
r
el
eases t
he obl
i
gor f
r
om hi
s obl
i
gat
i
on
af
t
e
rr
es
t
i
t
ut
i
on of what he may hav
e
r
ecei
v
ed,i
fany
,i
n advancef
r
om t
heot
her
cont
r
act
i
ng par
t
y;t
he obl
i
gor i
ncur
s no
l
i
abi
l
i
t
yf
or damage
sf
or hi
si
nabi
l
i
t
yt
o
per
f
or
m.
Ar
t
.1267. When t
he s
er
vi
c
e has
become so di
fficul
t as t
o be mani
f
es
t
l
y
be
yond t
he cont
empl
at
i
on oft
he par
t
i
es,
t
heobl
i
gormayal
sober
el
easedt
her
ef
r
om,
i
nwhol
eori
npar
t
.
Bal
ane: Rebus si
cs
t
ant
i
bus.
- Li
t
er
al
l
y
means"
t
hi
ngsast
he
ys
t
and.
"I
ti
sshor
t
f
orc
l
ausul
ar
ebussi
cs
t
ant
i
bus(
"
agr
e
ement
of t
hi
ngs as t
hey s
t
and.
"
) Thi
si
sa
pr
i
nci
pl
e ofi
nt
e
r
nat
i
onall
aw w/c hol
ds
t
hatwhe
n 2 count
r
i
esent
eri
nt
o at
r
eat
y
,
t
hey ent
er t
aki
ng i
nt
o account t
he
ci
r
cums
t
ances att
he t
i
me i
twas ent
e
r
e
d
i
nt
oandshoul
dt
heci
r
cums
t
ancesc
hange
ast
omaket
hef
ul
fil
l
mentoft
het
r
eat
yv
er
y
di
fficul
t
,onemayask f
orat
e
r
mi
nat
i
on of
t
het
r
eat
y
. Thi
spr
i
nci
pl
eofi
nt
e
r
nat
i
onal
l
aw hasspi
l
l
edov
eri
nt
oCi
vi
ll
aw.
Thi
s doct
r
i
ne i
s al
so cal
l
ed t
he
doct
r
i
ne of e
xt
r
eme di
fficul
t
y and
f
r
us
t
r
at
i
onofcommer
ci
alobj
ect
.
I
thasf
our(
4)r
e
qui
si
t
es:
1. The ev
entorc
hange coul
d not
hav
e been f
or
eseen at t
he t
i
me of t
he
e
xecut
i
onoft
hecont
r
act
.
2. Theev
entorc
hangemakest
he
per
f
or
mance e
xt
r
emel
y di
fficul
t but not
i
mpossi
bl
e.
3.Theev
entmustnotbeduet
oan
actofei
t
herpar
t
y
.
4. The cont
r
act i
sf
or a f
ut
ur
e
pr
es
t
at
i
on. I
ft
hecont
r
acti
sofi
mmedi
at
e
f
ul
fil
l
ment
,t
he gr
oss i
ne
qual
i
t
y of t
he
r
eci
pr
ocalpr
est
at
i
on mayi
nv
ol
v
el
esi
on or
wantofcause
.
I
nt
he case ofNaga,t
he cour
tdi
d
not consi
der t
he 4t
h el
ement as an
el
ement
.
The at
t
i
t
ude oft
he cour
t
s on t
hi
s
doct
r
i
nei
sv
er
ys
t
r
i
ct
. Thi
spr
i
nci
pl
ehas
al
ways been s
t
r
i
ct
l
y appl
i
ed. To gi
ve i
ta
l
i
ber
al appl
i
cat
i
on i
st
o under
mi
ne t
he
bi
ndi
ng f
or
ce of an obl
i
gat
i
on. Ev
er
y
obl
i
gat
i
on i
s di
fficul
t
. The per
f
or
manc
e
must be ext
r
emel
y di
fficul
ti
n or
de
rf
or
r
ebussi
cs
t
ant
i
bust
oappl
y
.
BALANE CASES:
LAGUNA V.MANABAT [
59 S 650] - Ar
t
.
1680, i
t wi
l
l be obser
v
ed i
s a speci
al
pr
ovi
si
on f
or l
eases ofr
ur
all
ands
. No
ot
herl
e
galpr
ovi
si
onmakesi
tappl
i
c
abl
et
o
or
di
nar
yl
eases.xxx
Ev
en i
ft
he ci
t
e
d ar
t
i
ecl
e we
r
ea
gener
al r
ul
e on l
ease, i
t
s pr
ovi
si
ons
nev
er
t
hel
ess do notext
e
nd t
o pe
t
i
t
i
oner
s.
One oft
her
equi
si
t
e
si
st
hatt
hecauseof
t
he l
oss oft
he f
r
ui
t
s oft
he l
eased pr
op.
mustbe an "
e
xt
r
aor
di
nar
y and unf
or
seen
f
or
t
ui
t
ous ev
ent
.
" The ci
r
cums
t
ances of
t
hec
asef
ai
lt
os
at
i
sf
ys
uch r
equi
si
t
e
. xxx
[
T]
heal
l
eged c
ausesf
ort
hesuspensi
on of
oper
at
i
onson t
hel
i
nesl
e
ased,namel
y
,t
he
hi
gh pr
i
ces ofspar
e par
t
s and gasol
i
ne
andt
her
educt
i
onoft
hedol
l
aral
l
ocat
i
ons
,
"
al
r
e
adyexi
st
edwhent
hecont
r
actofl
eas
e
was e
xec
ut
ed.
" The cause ofpe
t
i
t
i
oner
s'
i
nabi
l
i
t
yt
o oper
at
e on t
he l
i
ne
s cannot
,
t
her
ef
or
e,beascr
i
bed t
of
or
t
ui
t
ous ev
ent
s
orci
r
c
ums
t
ancesbe
yondt
hei
rcont
r
ol
,but
t
ot
hei
rownv
ol
unt
ar
ydesi
s
t
ance
.
xxx Pe
r
f
or
mancei
snote
xcusedby
subsequent i
nabi
l
i
t
y t
o per
f
or
m, by
unf
or
s
een di
fficul
t
i
es, by unusual or
unexpec
t
ed expenses, by dange
r
, by
i
nevi
t
abl
e acci
dent
, by t
he br
eaki
ng of
machi
ner
y
, by s
t
r
i
kes, by si
c
kness, by
f
ai
l
ur
e ofa par
t
yt
o avai
lhi
msel
foft
he
benefit
st
o be had undert
he c
ont
r
ac
t
,by
weat
herc
ondi
t
i
ons,byfinanc
i
als
t
r
i
ngenc
y,
orby s
t
agnat
i
on ofbusi
ness. Nei
t
heri
s
per
f
or
manc
e exc
used by t
he f
ac
tt
hatt
he
c
ont
r
ac
t t
ur
ns out t
o be har
d and
i
mpr
o
vi
dent
,unpr
ofit
abl
e or i
npr
ac
t
i
c
abl
e,
i
l
l
advi
s
ed or ev
en f
ool
i
sh, or l
ess
pr
ofit
abl
e,orunexpec
t
edl
ybur
densome.
OCCENA V.JABSON [
73 S 637] Respondent
'
s compl
ai
ntseeks notr
el
ease
f
r
om t
hesubdi
vi
si
on c
ont
r
actbutt
hatt
he
cour
t"
r
ender j
udgement modi
f
yi
ng t
he
t
e
r
msand condi
t
i
ons oft
hecont
r
act
.
.
.by
fixi
ng t
he pr
oper shar
e
s t
hat shoul
d
per
t
ai
nt
ot
he he
r
ei
n par
t
i
es out oft
he
gr
oss pr
oceeds f
r
om t
he s
al
e
s of
subdi
vi
ded l
ot
s of subj
ect subdi
vi
si
on.
"
Ar
t
.1267 does notgr
antt
he cour
t
st
hi
s
aut
hor
i
t
yt
or
emake,modi
f
y
,orr
e
vi
se t
he
cont
r
actort
ofixt
hedi
vi
si
onofshar
esbe
t
.
t
hepar
t
i
esascont
r
act
ual
l
ys
t
i
pul
at
ed w/
t
he f
or
ceofl
aw be
t
.t
he par
t
i
es,so as t
o
subs
t
i
t
ut
e i
t
s own t
e
r
ms f
or t
hose
cov
enant
edbyt
hepar
t
i
est
hemsel
ves.
Bal
ane: I
nt
hi
scaset
hei
nt
er
pr
e
t
at
i
on of
t
he cour
ti
st
oo l
i
t
e
r
al
. Accor
di
ng t
ot
he
cour
t
,i
t can r
el
ease a debt
or f
r
om t
he
obl
i
gat
i
on but i
t cannot make t
he
obl
i
gat
i
on l
i
ght
er
. Buti
fyou l
ook atAr
t
.
1267,par
t
i
alr
el
easei
spe
r
mi
t
t
e
d.
NAGA TELEPHONE V.CA [
230 S 351] Thet
er
m"
ser
vi
c
e"shoul
dbeunder
s
t
oodas
r
ef
er
r
i
ng t
o t
he "
per
f
or
manc
e" of t
he
obl
i
gat
i
on.
- Ar
t
.1267 speaksof"
ser
vi
c
e"
w/chasbecomeso di
fficul
t
. Taki
ng i
nt
o
consi
der
at
i
on t
he r
at
i
onal
e behi
nd t
hi
s
pr
ovi
si
on, t
he t
er
m "
ser
vi
ce" shoul
d be
under
s
t
ood
as
r
e
f
er
r
i
ng
t
o
t
he
"
pe
r
f
or
manc
e" oft
he obl
i
gat
i
on. I
nt
he
pr
esentcase,t
he obl
i
gat
i
on ofpr
vt
.r
esp.
consi
st
si
n al
l
owi
ng pe
t
i
t
i
oner
st
o use i
t
s
post
si
n Naga Ci
t
y
, w/c i
st
he ser
vi
ce
cont
e
mpl
at
e
di
ns
ai
dar
t
i
cl
e.Fur
t
her
mor
e,
abar
er
eadi
ngoft
hi
sar
t
i
cl
er
ev
eal
st
hati
t
i
s nota r
equi
r
ementt
he
r
eundert
hatt
he
cont
r
actbe f
or f
ut
ur
e ser
vi
ce w/ f
ut
ur
e
unusualc
hang
e. Accdg.t
oTol
ent
i
no,Ar
t
.
1267 s
t
at
e
si
n our l
aw t
he doct
r
i
ne of
unf
or
s
een e
vent
s. Thi
si
ssai
dt
obebased
on t
he di
scr
edi
t
ed t
heor
y of r
ebus si
c
s
t
ant
i
bus i
n publ
i
c i
nt
er
nat
i
onal l
aw;
undert
hi
st
heor
y
,t
hepar
t
i
ess
t
i
pul
at
ei
n
t
he l
i
ghtofcer
t
ai
n pr
evai
l
i
ng condi
t
i
ons,
and once t
hese condi
t
i
ons cease t
oe
xi
s
t
t
he cont
r
act al
so ceases t
o exi
st
.
Consi
der
i
ng pr
act
i
cal needs and t
he
demands of equi
t
y and good f
ai
t
h, t
he
di
sappear
ance oft
he basi
s ofa cont
r
act
gi
v
esr
i
set
oar
i
ghtt
or
el
i
e
fi
nf
av
oroft
he
par
t
ypr
ej
udi
ce
d.
Bal
ane
: The Cour
twentt
oo f
ari
nt
hi
s
case. I
te
ven went t
o t
he ext
ent of
s
t
i
pul
at
i
ng f
ort
hepar
t
i
es i
nt
he name of
equi
t
y
.
Ar
t
.1268. When t
he debt of a
t
hi
ng cer
t
ai
n and de
t
er
mi
nat
e pr
oceeds
f
r
om a cr
i
mi
naloffense,t
he debt
orshal
l
notbe exempt
ed f
r
om t
he paymentofi
t
s
pr
i
ce,what
ev
ermay be t
he cause f
ort
he
l
oss,unl
esst
het
hi
nghavi
ngbe
en offer
ed
byhi
mt
ot
heper
sonwhoshoul
dr
e
cei
v
ei
t
,
t
he l
at
t
err
e
f
us
ed wi
t
houtj
us
t
i
ficat
i
on t
o
accepti
t
.
r
equi
r
es t
he accept
ance by t
he obl
i
gor
.I
t
maybemadee
xpr
e
ssl
yori
mpl
i
edl
y
.
One and t
he ot
her ki
nd shal
lbe
subj
ect t
o t
he r
ul
es whi
c
h gov
er
n
i
noffic
i
ous donat
i
ons. Expr
e
ss condonat
i
on shal
l
,f
ur
t
he
r
mor
e,compl
y wi
t
ht
he
f
or
msofdonat
i
on.
1.ModesofCondonat
i
on
a.Bywi
l
l
Ar
t
.1269. The obl
i
gat
i
on hav
i
ng
beenext
i
ngui
shedbyt
hel
ossoft
het
hi
ng,
t
he cr
edi
t
or shal
lhave al
lt
he r
i
ght
s of
act
i
on whi
ch t
hedebt
ormayhaveagai
ns
t
t
hi
r
dpe
r
sonsbyr
e
asonoft
hel
oss.
D.Condonat
i
onorRemi
ssi
on
Bal
ane: Condonat
i
on orr
emi
ssi
on i
s an
act of l
i
ber
al
i
t
y by vi
r
t
ue of w/c
, w/o
r
ecei
v
i
ng any equi
val
ent
, t
he cr
edi
t
or
r
enounces enf
or
cement of an obl
i
gat
i
on
w/ci
sext
i
ngui
shedi
nwhol
eori
npar
t
.
Thi
shasf
our(
4)r
equi
si
t
es:
1. Debtt
hati
sexi
st
i
ng. You can
r
emi
tade
btev
enbe
f
or
ei
ti
sdue.
2.
Renunci
at
i
on mus
t be
gr
at
ui
t
ous. I
fr
enunci
at
i
on i
s f
or a
consi
der
at
i
on,t
hemodeofe
xt
i
ngui
shment
may be some
t
hi
ng el
se. I
t may be
novat
i
on,compr
omi
s
eofdac
i
onenpago.
3.Accept
anc
ebyt
hedebt
or
4.Capaci
t
yoft
hepar
t
i
es.
The f
or
m of donat
i
on mus
t be
obser
v
ed. I
ft
he condonat
i
on i
nvol
ves
movabl
es,appl
y Ar
t
.748. I
fi
ti
nvol
ves
i
mmov
abl
es,appl
yAr
t
.749.Butnot
et
hat
t
hecr
e
di
t
ormayj
ustr
ef
uset
ocol
l
ect(
w/o
obser
vi
ng any f
or
m.
) I
nt
hi
s case,t
he
obl
i
gat
i
on wi
l
l be e
xt
i
ngui
shed not by
vi
r
t
ueofcondonat
i
on butbywai
verunde
r
Ar
t
.6.
Ar
t
. 1270.
Condonat
i
on or
r
emi
ssi
on i
s essent
i
al
l
y gr
at
ui
t
ous, and
Ar
t
.935. The l
egacy ofa cr
edi
t
agai
nstat
hi
r
d pe
r
son oroft
her
emi
ssi
on
orr
e
l
easeofadebtoft
hel
egat
ees
hal
lbe
effect
i
v
e onl
y as r
e
gar
ds t
hatpar
toft
he
cr
edi
tordebtexi
st
i
ng att
he t
i
me oft
he
deat
hoft
het
e
st
at
or
.
I
nt
he fir
s
tcase,t
he est
at
e shal
l
compl
ywi
t
ht
hel
egacybyassi
gni
ngt
ot
he
l
egat
ee al
lr
i
ght
s ofact
i
on i
t may have
agai
nstt
hedebt
or
.I
nt
hesecond case,by
gi
vi
ng t
he l
egat
e
e an acqui
t
t
ance,shoul
d
her
eques
tone.
I
n bot
h cases, t
he l
egacy shal
l
compr
i
seal
li
nt
er
est
son t
hecr
edi
tordebt
whi
c
h maybeduet
het
est
at
oratt
het
i
me
ofhi
sde
at
h.
Ar
t
.936. Thel
egacyr
e
f
er
r
ed t
oi
n
t
he pr
ecedi
ng ar
t
i
cl
e shal
ll
apse i
ft
he
t
e
s
t
at
or
,af
t
erhavi
ngmadei
t
,shoul
dbr
i
ng
anact
i
onagai
ns
tt
hedebt
orf
orpaymentof
hi
sde
bt
,e
v
en i
fsuc
h payments
houl
d not
hav
ebeeneffect
edatt
het
i
meofhi
sdeat
h.
The l
egacy t
ot
he debt
or of t
he
t
hi
ng pl
edged by hi
m i
s under
s
t
ood t
o
di
schar
g
eonl
yt
her
i
ghtofpl
edge.
b.ByAgr
eement
Ar
t
. 1270.
Condonat
i
on or
r
emi
ssi
on i
s essent
i
al
l
y gr
at
ui
t
ous, and
r
equi
r
es t
he accept
ance by t
he obl
i
gor
.I
t
maybemadee
xpr
e
ssl
yori
mpl
i
edl
y
.
One and t
he ot
her ki
nd shal
lbe
subj
ect t
o t
he r
ul
es whi
c
h gov
er
n
i
noffic
i
ous donat
i
ons. Expr
e
ss condonat
i
on shal
l
,f
ur
t
he
r
mor
e,compl
y wi
t
ht
he
f
or
msofdonat
i
on.
Ar
t
. 746.
Accept
anc
e mus
t be
madedur
i
ngt
hel
i
f
e
t
i
meoft
hedonorand
oft
hedonee.
Ar
t
.752. The pr
ovi
si
on ofar
t
i
cl
e
750 not
wi
t
hst
andi
ng,no per
son maygi
ve
orr
ec
ei
v
e,bywayofdonat
i
on,mor
et
han
hemaygi
veorr
e
cei
vebywi
l
l
.
Thedonat
i
on shal
lbei
noffici
ousi
n
al
lt
hati
tmaye
xceedt
hi
sl
i
mi
t
at
i
on.
Ar
t
. 750.
The
donat
i
on may compr
ehend
al
lt
he pr
esent pr
oper
t
y of
t
he donor
,or par
tt
he
r
eof
,
pr
ovi
ded her
eser
ves,i
nf
ul
l
owner
shi
p or i
n usuf
r
uc
t
,
suffici
ent means f
or t
he
suppor
t ofhi
msel
f
,and of
al
lr
e
l
at
i
veswho,att
het
i
me
of t
he accept
ance of t
he
donat
i
on ar
ebyl
aw ent
i
t
l
ed
t
o be suppor
t
e
d by t
he
donor
.
Wi
t
hout
such
r
eser
v
at
i
on, t
he donat
i
on
shal
lber
educedon pe
t
i
t
i
on
ofanyper
sonaffect
ed.
Ar
t
. 748. The donat
i
on of a
movabl
emaybemadeor
al
l
yori
nwr
i
t
i
ng.
An or
al donat
i
on r
equi
r
e
s t
he
si
mul
t
aneous del
i
v
er
y oft
he t
hi
ng or of
t
he document r
epr
esent
i
ng t
he r
i
ght
donat
e
d.
I
ft
hev
al
ueoft
hepe
r
sonalpr
oper
t
y
donat
e
dexceedsfiv
et
hr
ousand pesos,t
he
donat
i
on and t
he accept
ance s
hal
l be
made i
n wr
i
t
i
ng.Ot
he
r
wi
se,t
hedonat
i
on
shal
lbevoi
d.
Ar
t
. 749. I
n or
de
r t
hat t
he
donat
i
on ofan i
mmov
abl
emaybev
al
i
d,i
t
must be made i
n a publ
i
c document
,
speci
f
yi
ng t
her
ei
n t
he pr
oper
t
y donat
ed
and t
he val
ue oft
he c
har
g
es whi
c
ht
he
doneemus
ts
at
i
sf
y
.
Theaccept
anc
emaybemadei
nt
he
same deed ofdonat
i
on or i
n a separ
at
e
publ
i
c document
, but i
t shal
l not t
ake
effectunl
essi
ti
sdonedur
i
ngt
hel
i
f
e
t
i
me
oft
hedonor
.
I
ft
he accept
anc
ei
s made i
n a
separ
at
ei
ns
t
r
ument
,t
he donor shal
lbe
not
i
f
ed t
he
r
eofi
n an aut
hent
i
cf
or
m,and
t
hi
s s
t
ep shal
l be not
ed i
n bot
h
i
nst
r
ument
s.
2.Pr
esumpt
i
onofCondonat
i
on
Bal
ane: Ar
t
i
cl
es1271and1272r
ef
ert
oa
ki
nd of i
mpl
i
ed r
e
nunci
at
i
on when t
he
cr
edi
t
ordi
v
es
t
shi
msel
foft
hepr
oofcr
e
di
t
.
Accor
di
ng t
o De di
ego,t
hi
s pr
ovi
si
on i
s
absur
d and i
mmor
ali
nt
hati
taut
hor
i
z
es
t
hedebt
orandhi
she
i
r
st
opr
ov
et
hatt
hey
pai
dt
he debt
,when t
he pr
ovi
s
i
on i
t
sel
f
assumest
hatt
her
ehasbeen ar
emi
ssi
on,
w/ci
sgr
at
ui
t
ous.(
Tol
ent
i
no.
)
Ar
t
.1271.Thedel
i
v
er
yofapr
i
vat
e
document
, e
vi
denci
ng a cr
edi
t
, made
v
ol
unt
ar
i
l
y by t
he cr
edi
t
or t
ot
he debt
or
,
i
mpl
i
e
st
he r
e
nunci
at
i
on of t
he act
i
on
whi
c
ht
hef
or
merhadagai
ns
tt
hel
at
t
e
r
.
I
fi
n or
de
rt
o nul
l
i
f
yt
hi
s wai
veri
t
shoul
d be cl
ai
med t
o be i
noffici
ous,t
he
debt
or and hi
s hei
r
s may uphol
di
t by
pr
ovi
di
ng t
hat t
he del
i
ver
y of t
he
documentwasmadei
nv
i
r
t
ueofpayment
oft
hedebt
.
Li
mi
t
ed t
oPr
i
vat
eDocument
.
- Ar
t
.1271
has no appl
i
cat
i
on t
o publ
i
c document
s
bec.t
her
ei
sal
waysac
opyi
nt
hear
chi
ves
w/ccanbeusedt
opr
ov
et
hecr
edi
t
.
Pr
i
v
at
e document r
e
f
er
s t
o t
he
or
i
gi
nalor
i
gi
nali
n or
derf
orAr
t
.1271 t
o
appl
y
.(
Tr
ansPac
i
fic
.v
.CA,s
upr
a.
)
BALANE CASES:
TRANSPACI
FI
C V.CA [
234 S 494] - I
t
may notbe ami
s
st
o add t
hatAr
t
.1271
r
ai
sesapr
esumpt
i
on,notofpayment
,but
of t
he r
enunci
at
i
on of t
he cr
e
di
t whe
r
e
mor
ec
onvi
ci
nge
vi
dencewoul
dber
equi
r
ed
t
han whatnor
mal
l
ywoul
d becal
l
edf
ort
o
pr
ov
epayment
. Ther
at
i
onal
ef
oral
l
owi
ng
t
he pr
esumpt
i
on of r
e
nunci
at
i
on i
nt
he
del
i
ver
y of a pr
i
vat
ei
ns
t
r
ument i
st
hat
,
unl
i
ke t
hatofa publ
i
ci
ns
t
r
ument
,t
her
e
coul
d bej
us
tone copy oft
hee
vi
dence of
cr
edi
t
. Whe
r
e sev
er
alor
i
gi
nal
s ar
e made
outofapr
i
vat
edocument
,t
hei
nt
endment
oft
he l
aw woul
dt
hus be t
or
ef
ert
ot
he
del
i
ver
yonl
yoft
heor
i
gi
nalor
i
gi
nalr
at
her
t
han t
ot
he or
i
gi
naldupl
i
c
at
e ofw/c t
he
debor woul
d nor
mal
l
yr
e
t
ai
n a copy
. I
t
woul
dt
husbeabsur
di
fAr
t
.1271 we
r
et
o
beappl
i
e
ddi
ffer
ent
l
y
.
Ar
t
.1272. Whenever t
he pr
i
vat
e
document i
n whi
c
ht
he debt appear
si
s
f
ound i
nt
he possessi
on oft
he debt
or
,i
t
shal
l be pr
esumed t
hat t
he cr
edi
t
or
del
i
ver
edi
tv
ol
unt
ar
i
l
y
,unl
esst
hecont
r
ar
y
i
spr
oved.
Rul
e131,Sec.5(
b)
,(
j
)
,(
k)
,Rul
esofCour
t
.
pl
easechec
kag
ai
n
Rul
e 131, Sec. 5.
Di
sput
abl
e
pr
esumpt
i
ons.
The
f
ol
l
owi
ng
pr
esumpt
i
ons
ar
e
s
at
i
sf
act
or
y
i
f
uncont
r
adi
ct
ed,butmay be c
ont
r
adi
ct
ed
andover
comebyot
herevi
dence:
xxx
(
b)Thatan unl
awf
ulactwasdone
wi
t
hanunl
awf
uli
nt
ent
;
xxx
(
j
) That a per
son f
ound i
n
possessi
on ofat
hi
ngt
akeni
nt
hedoi
ngof
awr
ongf
ulacti
st
het
akeranddoeroft
he
whol
e act
;ot
he
r
wi
se,t
hatt
hi
ngs whi
c
ha
per
son poss
esses, or exer
ci
s
es act
s of
owner
shi
pov
er
,ar
eowne
dbyhi
m;
(
k)Thata per
son i
n possessi
on of
an or
de
r on hi
msel
ff
or t
he payment of
money
,or t
he del
i
ver
y ofanyt
hi
ng,has
pai
d t
he money or del
i
ver
ed t
he t
hi
ng
accor
di
ngl
y;
xxx
Under t
he 1985 Rul
es of Cour
t
, as
amended
Rul
e 131, Sec. 3. Di
sput
abl
e
pr
esumpt
i
ons.
The
f
ol
l
owi
ng
pr
esumpt
i
ons
ar
e
s
at
i
sf
act
or
y
i
f
uncont
r
adi
ct
ed,butmay be c
ont
r
adi
ct
ed
andover
comebyot
herevi
dence:
xxx
(
c) That a per
son i
nt
ends t
he
or
di
nar
y consequences of hi
s vol
unt
ar
y
act
;
xxx
(
f
) That mone
y pai
d by one t
o
anot
he
rwasduet
ot
hel
at
t
e
r
;
(
g)Thatat
hi
ngdel
i
v
er
edbyonet
o
anot
he
rbel
ongedt
ot
hel
at
t
e
r
;
(
h)Thatan obl
i
gat
i
on del
i
v
er
ed up
t
ot
hedebt
orhasbeenpai
d;
(
i
)Thatpr
i
orr
ent
sori
nst
al
l
ment
s
had been pai
d when ar
ecei
ptf
ort
hel
at
e
r
onesi
spr
oduced;
(
k)Thata per
son i
n possessi
on of
anor
deronhi
msel
ff
ort
hepaymentoft
he
y
money
,or t
he del
i
ver
y ofanyt
hi
ng,has
pai
d t
he money or del
i
ver
ed t
he t
hi
ng
accor
di
ngl
y;
xxx
3.EffectofPar
t
i
alRemi
ssi
on
Ar
t
.1273. Ther
enunci
at
i
on oft
he
pr
i
nci
pal debt shal
l ext
i
ngui
sh t
he
accessor
y obl
i
gat
i
ons; but t
he wai
ver of
t
hel
at
t
e
rshal
ll
eavet
hef
or
meri
nf
or
ce.
cont
r
actofpl
edge,t
hatt
het
hi
ng pl
edged
bepl
acedi
nt
hepossessi
on oft
hecr
edi
t
or
,
orofat
hi
r
dper
sonbycommonagr
eement
.
(
Ext
i
ngui
shmentofGuar
ant
y)
Ar
t
.2076. The obl
i
gat
i
on oft
he
guar
ant
ori
sext
i
ngui
shedatt
hes
amet
i
me
as t
hatoft
he de
bt
or
,and f
or t
he same
causesasal
lot
herobl
i
gat
i
ons.
Ar
t
.2105. The debt
orcannotask
f
ort
her
e
t
ur
n oft
het
hi
ngpl
edged agai
ns
t
t
hewi
l
loft
hecr
edi
t
or
,unl
essandunt
i
lhe
has pai
dt
he debtand i
t
si
nt
er
es
t
,wi
t
h
e
xpens
esi
napr
opercase.
Ar
t
.2080. The guar
ant
or
s
,ev
en
t
hough t
heybesol
i
dar
y
,ar
er
el
easedf
r
om
t
hei
r obl
i
gat
i
on whene
verby some actof
t
hecr
edi
t
ort
hey cannotbesubr
ogat
ed t
o
t
he r
i
ght
s
,mor
t
g
ag
es,and pr
ef
e
r
ences of
t
hel
at
t
e
r
.
(
Pr
ovi
si
ons Common t
o Pl
edge and
Mor
t
g
ag
e)
Ar
t
.2085. Thef
ol
l
owi
ngr
equi
si
t
e
s
ar
eessent
i
alt
ot
hecont
r
act
sofpl
e
dgeand
mor
t
gage:
(
1) That t
hey be const
i
t
ut
ed t
o
secur
e t
he f
ul
fil
l
ment of a pr
i
nci
pal
obl
i
gat
i
on;
xxx
Ar
t
.1274. I
ti
spr
esumedt
hatt
he
accessor
y obl
i
gat
i
on ofpl
edge has been
r
emi
t
t
e
d when t
het
hi
ng pl
e
dged,af
t
e
ri
t
s
del
i
ver
yt
ot
he cr
edi
t
or
,i
sf
ound i
nt
he
possessi
on of t
he debt
or
,or of a t
hi
r
d
per
sonwhoownst
het
hi
ng.
Bal
ane:Theacce
sor
yobl
i
gat
i
onofpl
edged
i
se
xt
i
ngui
shedbec.pl
edgei
sapossessor
y
l
i
en. Thepr
esumpt
i
on i
nt
hi
scasei
st
hat
t
he pl
e
dgee has sur
r
ende
r
e
d t
he t
hi
ng
pl
edged t
ot
he pl
edgor
. Thi
si
s not a
concl
usi
ve pr
esumpt
i
on accor
di
ng t
o Ar
t
.
2110,par
.2.
Ar
t
. 2093. I
n addi
t
i
on t
o t
he
r
equi
si
t
es pr
escr
i
bed i
n ar
t
i
cl
e2085,i
ti
s
necessar
y
,i
n or
de
r t
o const
i
t
ut
e t
he
E.Conf
usi
onorMer
gerofRi
ght
s
Ar
t
. 1275.
The obl
i
gat
i
on i
s
e
xt
i
ngui
shed f
r
om t
het
i
met
hec
har
act
er
s
ofcr
e
di
t
or and de
bt
orar
e mer
ged i
nt
he
sameper
son.
Bal
ane: Conf
usi
on i
st
hemee
t
i
ng i
n one
per
son oft
hequal
i
t
i
esoft
hec
r
edi
t
orand
debt
orwi
t
hr
e
spec
tt
ot
hesameobl
i
gat
i
on.
Ther
ear
et
wo(
2)r
equi
si
t
es:
1. I
tmus
tt
akepl
acebe
t
ween t
he
cr
edi
t
or and t
he pr
i
nci
pl
e debt
or (
Ar
t
.
1276.
)
2. Thever
ysameobl
i
gat
i
on mus
t
bei
nvol
ved.
ddd
Rat
i
onal
e.
- Yoube
comeyourowncr
edi
t
or
ory
ou becomeyourown debt
or
. So how
cany
ous
ueyour
se
l
f
.
Whatmaycauseamer
gerorconf
usi
on?(
1) Succe
ssi
on, whe
t
he
r compul
sor
y
,
t
e
s
t
ament
ar
y or i
nt
e
st
at
e;(
2) Donat
i
on;
(
3)Negot
i
at
i
onofanegot
i
abl
ei
ns
t
r
ument
.
Because ofi
t
s nat
ur
e,conf
usi
on/
mer
ger may ov
er
l
ap w/ ot
her causes of
e
xt
i
ngui
shment
. Fore
xampl
e,Iowe Ms.
Ol
or
e
sP100,
000.Shebe
queat
ht
omet
hat
cr
edi
t
. And t
hen she di
ed. I
nt
hi
scase,
t
her
ei
s ext
i
ngui
she
mnt bot
h by mer
ger
.
Buti
nt
hi
sc
ase,me
r
gercoul
d ov
er
l
ap w/
payment
.
(
nori
nBavi
er
a'
sout
l
i
ne)
Ar
t
. 1276. Mer
g
er whi
ch t
akes
pl
acei
nt
heper
son oft
hepr
i
nci
paldebt
or
or cr
e
di
t
or benefit
s t
he guar
ant
or
s.
Conf
usi
on whi
c
ht
akespl
acei
nt
hepe
r
son
ofanyoft
hel
at
t
e
rdoesnotext
i
ngui
sh t
he
obl
i
gat
i
on.
Bal
ane: Thi
si
s per
f
ect
l
yi
n consonance
w/Ar
t
.1275.
1.Pr
i
nci
palPar
t
i
es
Ar
t
. 1276. Mer
g
er whi
ch t
akes
pl
acei
nt
heper
son oft
hepr
i
nci
paldebt
or
or cr
e
di
t
or benefit
s t
he guar
ant
or
s.
Conf
usi
on whi
c
ht
akespl
acei
nt
hepe
r
son
ofanyoft
hel
at
t
e
rdoesnotext
i
ngui
sh t
he
obl
i
gat
i
on.
2.Amongguar
ant
or
s
(
Effect
s of Guar
ant
y as Be
t
ween CoGuar
ant
or
s)
Ar
t
.2073. Whe
nt
he
r
ear
et
wo or
mor
e guar
ant
or
s oft
he same debt
or and
f
or t
he s
ame debt
,t
he one among t
hem
who haspai
d maydemand ofeach oft
he
ot
her
st
he shar
e whi
c
hi
s pr
opor
t
i
onal
l
y
owi
ngf
r
om hi
m.
I
fanyoft
heguar
ant
or
sshoul
d be
i
nsol
v
ent
,hi
ss
har
eshal
lbebor
nedbyt
he
ot
her
s,i
nc
l
udi
ng t
he payer
,i
nt
he same
pr
opor
t
i
on.
The pr
ovi
si
ons oft
hi
s ar
t
i
cl
eshal
l
notbeappl
i
c
abl
e,unl
esst
hepaymenthas
been madei
nv
i
r
t
ueofa j
udi
ci
aldemand
orunl
esst
hepr
i
nci
paldebt
ori
si
nsol
v
ent
.
3.Joi
ntObl
i
g
at
i
ons
Ar
t
. 1277. Conf
usi
on does not
e
xt
i
ngui
sh a j
oi
nt obl
i
gat
i
on except as
r
egar
ds t
he shar
e cor
r
espondi
ng t
ot
he
cr
edi
t
or or debt
or i
n whom t
he t
wo
c
har
act
e
r
sconcur
.
4.Sol
i
dar
yObl
i
gat
i
ons
Ar
t
.
1215.
Novat
i
on,
compensat
i
on,conf
usi
on or r
e
mi
ssi
on of
t
he debt
, made by any of t
he sol
i
dar
y
cr
edi
t
or
s or wi
t
h any of t
he sol
i
dar
y
debt
or
s
, shal
l ext
i
ngui
sh t
he obl
i
gat
i
on,
wi
t
hout pr
ej
udi
ce t
o t
he pr
ovi
si
ons of
ar
t
i
cl
e1219.
The cr
edi
t
or who may hav
e
e
xecut
e
d any oft
hese act
s
,aswel
las he
whoc
ol
l
ect
st
hede
bt
,shal
lbel
i
abl
et
ot
he
ot
her
sf
or t
he shar
ei
n t
he obl
i
gat
i
on
cor
r
espondi
ngt
ot
he
m.
Ar
t
i
cl
e 1219. The
r
emi
ssi
on made by t
he
cr
edi
t
oroft
he shar
e whi
c
h
affect
s one oft
he sol
i
dar
y
debt
or
sdoesnotr
el
easet
he
l
at
t
erf
r
om hi
sr
esponsi
bi
l
i
t
y
t
owar
ds t
he codebt
or
s
,i
n
case t
he debt had been
t
ot
al
l
y pai
d by anyone of
t
hem be
f
or
et
he r
emi
ssi
on
waseffect
ed.
Ar
t
. 1216. The cr
edi
t
or may
pr
oceed agai
nstanyofoneoft
hes
ol
i
dar
y
debt
or
s or some or al
l of t
hem
si
mul
t
aneousl
y
.Thede
mandmadeagai
nst
one oft
hem shal
lnotbe an obst
acl
et
o
t
hosewhi
c
h maysubsequent
l
ybedi
r
e
ct
ed
agai
nstt
heot
he
r
s,sol
ongast
hedebthas
notbeenf
ul
l
ycol
l
ect
ed.
Ar
t
.1217.Paymentmadebyoneof
t
he sol
i
dar
y debt
or
s ext
i
ngui
shes t
he
obl
i
gat
i
on.I
ft
wo ormor
esol
i
dar
ydebt
or
s
offert
opay
,t
hec
r
e
di
t
ormayc
hoosewhi
ch
offert
oaccept
.
He who made t
he payment may
cl
ai
m f
r
om hi
s codebt
or
s onl
yt
he shar
e
whi
c
h cor
r
e
sponds t
o each, wi
t
h t
he
i
nt
e
r
e
stf
ort
he paymental
r
eady made.I
f
t
he paymenti
s made bef
or
et
he debt i
s
due,no i
nt
e
r
e
stf
ort
hei
nt
er
v
eni
ngper
i
od
maybede
manded.
Whe
n one oft
he sol
i
dar
y debt
or
s
cannot
, because of hi
s i
nsol
venc
y
,
r
ei
mbur
se hi
s shar
et
ot
he debt
orpayi
ng
t
he obl
i
gat
i
on,suc
h shar
eshal
lbe bor
ne
byal
lhi
scode
bt
or
s
,i
n pr
opor
t
i
on t
ot
he
debtofeac
h.
5.I
ndi
vi
si
bl
eObl
i
gat
i
ons
Ar
t
. 1209. I
ft
he di
vi
si
on i
s
i
mpossi
bl
e,t
her
i
ghtoft
hecr
edi
t
or
smay
bepr
ej
udi
ced onl
ybyt
hei
rcol
l
ect
i
veact
s,
and t
he debt can be enf
or
ced onl
y by
pr
oceedi
ngagai
ns
tal
lt
hedebt
or
s.I
foneof
t
he l
at
t
e
rshoul
d be i
nsol
vent
,t
he ot
her
s
shal
lnotbel
i
abl
ef
orhi
sshar
e.
Ar
t
.1224. A j
oi
nti
ndi
vi
si
bl
egi
ves
r
i
se t
oi
ndemni
t
yf
or damages f
r
om t
he
t
i
meany
oneoft
hedebt
or
sdoesnocompl
y
wi
t
h hi
s under
t
aki
ng. The debt
or
s who
may have been r
e
ady t
o f
ul
fil
lt
he
i
r
pr
omi
ses s
hal
l not cont
r
i
but
e t
o t
he
i
ndemni
t
y be
y
ond t
he cor
r
espondi
ng
por
t
i
on oft
hepr
i
ceoft
het
hi
ngoroft
he
v
al
ueoft
heser
vi
cei
nwhi
cht
heobl
i
g
at
i
on
consi
st
s.
F.Compensat
i
on
Bal
ane: Defini
t
i
on of Compensat
i
on.
Compensat
i
on i
samodeofe
xt
i
ngui
shi
ng,
t
ot
heconcur
r
e
ntamount
,t
heobl
i
gat
i
ons
oft
hoseper
sonswhoi
nt
hei
rownr
i
ghtar
e
r
eci
pr
ocal
l
y debt
or
s and cr
edi
t
or
s ofeach
ot
her
.(
Cast
an.
)
Pe
r
haps, next t
o payment
,
compensat
i
on i
st
he mos
tcommon mode
ofext
i
ngui
shi
nganobl
i
gat
i
on.
Di
s
t
i
ngui
shedf
r
om Conf
usi
on.
-I
n
compensat
i
on,t
her
e ar
e 2 par
t
i
es and 2
debt
s,whe
r
eas i
n conf
usi
on,t
he
r
e ar
e2
debt
sandonl
y1par
t
y
.
Ar
t
. 1278. Compensat
i
on shal
l
t
akepl
acewhen t
woper
sons,i
nt
hei
rown
r
i
ght
,ar
ec
r
e
di
t
or
s and debt
or
s ofeac
h
ot
her
.
BALANE CASES:
GAN TI
ON V.CA [
28 S 235] - Awar
d of
at
t
or
ney'
s f
ees as subj
ec
t of l
egal
c
ompensat
i
on.
- The awar
di
s made i
n
f
avoroft
hel
i
t
i
gant
,notofhi
scounsel
,and
i
s j
us
t
i
fied by way of i
nde
mni
t
y f
or
damages r
ecover
abl
ebyt
he f
or
meri
nt
he
casesenumer
at
ed i
n Ar
t
.2208. I
ti
st
he
l
i
t
i
gant
, not hi
s counsel
, who i
s t
he
j
udgementcr
edi
t
or and who may enf
or
ce
t
he j
udgmentby e
xecut
i
on. Such cr
edi
t
,
t
her
ef
or
e,may pr
oper
l
y be t
he s
ubj
ectof
l
egal compensat
i
on. Qui
t
e obvi
ousl
y
,i
t
woul
d be unj
us
tt
o compelpe
t
i
t
i
oner t
o
payhi
sdebtf
orP500when admi
t
t
e
dl
yhi
s
cr
edi
t
ori
si
ndebt
e
dt
o hi
m f
ormor
et
han
P4,
000.
PNB V.ONG ACERO [
148S166]- Ther
e
i
s no c
ompensat
i
on wher
et
he par
t
i
es ar
e
notc
r
edi
t
or
s and debt
or
s ofeac
ho
t
her
.
Thei
nsuper
abl
eobst
acl
et
ot
hesuccessof
PNB'
s cause i
st
he f
act
ualfindi
ng oft
he
I
AC t
hati
thas notpr
oven by compe
t
e
nt
e
vi
dence t
hati
ti
s a cr
edi
t
or ofI
SABEL.
The onl
y evi
dence pr
esent
ed by PNB
t
owar
dst
hi
send c
onsi
s
t
sof2 document
s
mar
ked i
ni
t
sbehal
f
. Butast
heI
AC has
cogent
l
y obser
ved, t
hese document
s do
notpr
ov
eanyi
ndebt
e
dnessofI
SABELA t
o
PNB. Al
lt
he
y do pr
ov
ei
st
hata l
e
t
t
erof
cr
edi
t mi
ght hav
e been opened f
or
I
SABELA by PNB,butnott
hatt
he cr
edi
t
was e
verav
ai
l
ed of[
by I
SABELA"
sf
or
e
i
gn
cor
r
espondent(
MAN)
]
,or t
hatt
he goods
t
her
ebycov
er
ed wer
ei
nf
actshi
pped,and
r
ecei
v
edbyI
SABELA.
FRANCI
AV.I
AC [
162S753]- [
T]
her
ecan
be no offse
t
t
i
ng of t
axes agai
ns
tt
he
cl
ai
mst
hatt
het
axpayermayhaveagai
ns
t
t
hegovt
. A per
son c
annotr
e
f
us
et
opaya
t
axon t
hegr
ound t
hatt
hegovtoweshi
m
anamounte
qualt
oorgr
eat
e
rt
hant
het
ax
bei
ng col
l
ect
ed. The col
l
ect
i
on ofa t
ax
cannot awai
tt
he r
es
ul
t
s of a l
awsui
t
agai
nstt
hegovt
.
Ac
l
ai
mf
ort
axesi
snotsuchade
bt
,
demand, cont
r
act or j
udgment as i
s
al
l
owedt
obes
e
t
off xxx Thegene
r
alr
ul
e
based on gr
oundsofpubl
i
cpol
i
cyi
swel
l
se
t
t
l
ed t
hatno se
t
off admi
ssi
bl
e agai
nst
demands f
or t
axes l
e
vi
ed f
or ge
ner
al or
l
ocalgover
nment
alpur
poses. Ther
eason
onw/ct
hegen.r
ul
ei
sbase
d,i
st
hatt
axes
ar
enoti
nt
henat
ur
eofcont
r
act
sbe
t
.t
he
par
t
y and par
t
y butgr
ow outofdut
yt
o,
andar
et
heposi
t
i
veact
soft
hegovtt
ot
he
maki
ngandenf
or
ci
ngofw/c,t
heper
sonal
consent of i
ndi
vi
dual t
axpayer
si
s not
r
equi
r
ed. xxx (
Republ
i
c v
. Mambul
ao
Lumber
.
)
I
n Cor
der
ov
.Gonda,wehel
dt
hat
:
"
xxxi
nt
e
r
nalr
ev
enuet
axescannotbet
he
subj
ect of compens
at
i
on: Reason: govt
and t
axpayer '
ar
e not mut
ual
l
y cr
edi
t
or
s
and debt
or
sofe
ach ot
herunderAr
t
.1278
and a "
c
l
ai
mf
ort
axe
si
snotsuch adebt
,
demand, cont
r
act or j
udgment as i
s
al
l
owedt
obese
t
off.
Ar
t
. 1286. Compens
at
i
on t
akes
pl
acebyoper
at
i
on ofl
aw,e
v
en t
hough t
he
debt
s may be payabl
e atdi
ffer
entpl
aces,
but t
he
r
e shal
l be an i
ndemni
t
y f
or
e
xpens
esofe
xc
hangeort
r
anspor
t
at
i
on t
o
t
hepl
aceofpayment
.
1.Di
ffer
entKi
ndsofCompens
at
i
on:
a. Legal Compensat
i
on (
Ar
t
i
cl
es
1279,1290)w/ct
akespl
aceaut
omat
i
cal
l
y
byoper
at
i
on ofl
aw onceal
lt
her
equi
si
t
e
s
ar
epr
e
se
nt
.
Ar
t
. 1279.
I
n or
de
r t
hat
compensat
i
on may be pr
oper
, i
t i
s
necessar
y:
(
1)Thateachoneoft
heobl
i
gor
sbe
bound pr
i
nci
pal
l
y
,and t
hathe be att
he
samet
i
meapr
i
nci
palcr
edi
t
oroft
heot
he
r
;
(
2)That bot
h debt
s consi
s
ti
na
sum ofmoney
,or i
ft
he t
hi
ngs due ar
e
consumabl
e,t
heybeoft
hesameki
nd,and
al
so oft
he same qual
i
t
yi
ft
he l
at
t
e
rhas
beens
t
at
ed;
(
3)Thatt
het
wodebt
sbedue;
(
4) That t
hey be l
i
qui
dat
ed and
demandabl
e;
(
5)Thatovernei
t
he
roft
hem t
her
e
by any r
e
t
ent
i
on or cont
r
over
sy
,
commenced by t
hi
r
d per
sons and
communi
cat
e
di
nduet
i
met
ot
hedebt
or
.
Bal
ane:
Requi
si
t
esunderAr
t
.1279:
1. Mut
ualDebt
or
sand Cr
edi
t
or
s.
Thepar
t
i
esmus
tbemut
ual
l
yde
bt
or
sand
cr
edi
t
or
s(
1)i
nt
hei
rownr
i
ght
,and(
2)as
pr
i
nci
pal
s. The
r
ec
anbenocompens
at
i
on
i
f1 par
t
y occupi
es onl
yar
epr
esent
at
i
ve
capaci
t
y
. Li
ke
wi
se, t
her
e can be no
compensat
i
on i
fi
n oneobl
i
gat
i
on,a par
t
y
i
s a pr
i
nci
pal obl
i
gor and i
n anot
her
obl
i
gat
i
on,hei
saguar
ant
or
.
2. Fungi
bl
e Thi
ngs Due.
- The
wor
d consummabl
ei
s wr
ong. UnderAr
t
.
418,c
onsummabl
et
hi
ngs ar
et
hose w/c
cannotbeusedi
namannerappr
opr
i
at
et
o
t
hei
rnat
ur
ew/ot
hei
rbei
ngc
onsumed.I
n
ar
eci
pr
ocalobl
i
gat
i
on t
o del
i
v
er hor
ses,
t
he t
hi
ngs due ar
enotconsummabl
e
;ye
t
t
her
e can be compensat
i
on. (
Tol
ent
i
no.
)
The pr
opert
er
mi
nol
ogy i
s"
f
ungi
bl
e"w/c
r
ef
er
st
ot
hi
ngs oft
he same ki
nd w/c i
n
paymentcanbesubs
t
i
t
ut
edf
oranot
her
.
3. Mat
ur
i
t
y ofDebt
s.
- Bot
h debt
s
mustbeduet
oper
mi
tc
ompensat
i
on.
4. Demandabl
e and Li
qui
dat
ed
Debt
s.
- Tol
e
nt
i
no: Demandabl
e means
t
hat t
he debt
s ar
e enf
or
c
eabl
ei
n cour
t
,
t
her
ebei
ngnoappar
entdef
ens
esi
nher
e
nt
i
nt
he
m. The obl
i
gat
i
ons mus
t be ci
vi
l
obl
i
gat
i
ons, e
xcl
udi
ng t
hose t
hat ar
e
pur
el
y nat
ur
al
. xxx Bef
or
eaj
udi
ci
al
decr
ee of r
es
ci
ssi
on or annul
ment
,a
r
esci
s
si
bl
e or voi
dabl
e debt i
sv
al
i
d and
demandabl
e; hence, i
t can
be
compensat
e
d.
A debt i
s l
i
qui
dat
ed when i
t
s
e
xi
s
t
enceandamountar
ede
t
e
r
mi
ned.xxx
And a debti
s consi
der
ed l
i
qui
dat
ed,not
onl
y when i
ti
s e
xpr
e
ssed al
r
eady i
n
defini
t
e figur
es w/c do not r
equi
r
e
v
er
i
ficat
i
on, but al
so when
t
he
de
t
er
mi
nat
i
on of t
he exact amount
depends onl
y on a si
mpl
e ar
i
t
hme
t
i
cal
oper
at
i
on.xxx
of par
agr
aph 2 of ar
t
i
cl
e
301.
Ar
t
. 1288. Nei
t
he
r
shal
lt
her
ebec
ompens
at
i
on
i
foneoft
hedebt
sconsi
s
t
s
i
nc
i
v
i
ll
i
abi
l
i
t
y ar
i
si
ngf
r
om
apenaloffense.
Ar
t
. 1794. Ev
er
y
par
t
neri
sr
es
ponsi
bl
et
ot
he
par
t
ner
s
hi
p f
or damages
suffer
e
d by i
tt
hr
ough hi
s
f
aul
t
, and he cannot
compensat
et
hem wi
t
ht
he
pr
ofit
s and benefit
s whi
ch
hemayhaveear
ned f
ort
he
par
t
ner
s
hi
pbyhi
si
ndus
t
r
y
.
Howev
er
,t
he cour
t
s may
equi
t
abl
y
l
essen
t
hi
s
r
esponsi
bi
l
i
t
yi
ft
hr
ough t
he
par
t
ner
'
s
ext
r
aor
di
nar
y
effor
t
si
n ot
he
ract
i
vi
t
i
es of
t
he par
t
ner
shi
p, unusual
pr
ofit
shavebeenr
eal
i
z
ed.
5.Debtmustnotbegar
ni
shed.
(
addi
t
i
onalr
e
qui
r
e
ment
)
6. Compensat
i
on i
s notpr
ohi
bi
t
ed
by any pr
o
vi
si
on ofl
aw l
i
keAr
t
i
cl
es1287,
1288and1794.
Ar
t
.
1287.
Compensat
i
on shal
lnotbe
pr
oper when one of t
he
debt
s ar
i
ses f
r
om
a
deposi
t
um or f
r
om t
he
obl
i
gat
i
ons ofa deposi
t
ar
y
or of a
bai
l
e
e i
n
commodat
um.
Nei
t
her
can
compensat
i
on be se
t up
agai
nstac
r
e
di
t
orwhohasa
cl
ai
m f
or suppor
t due by
gr
at
ui
t
ous t
i
t
l
e, wi
t
hout
pr
ej
udi
ce t
ot
he pr
ovi
si
ons
BALANE CASES:
REPUBLI
C V.DE LOS ANGELES [
98 S
103] - Compensat
i
on ofdebt
s ar
i
si
ng
even wi
t
houtpr
oofofl
i
qui
dat
i
on ofc
l
ai
m,
wher
et
hec
l
ai
mi
sundi
sput
ed.
- Pr
oofof
t
he l
i
qui
dat
i
on ofa cl
ai
m,i
n or
der t
hat
t
her
ebecompensat
i
on ofdebt
s,i
spr
oper
i
fs
uchcl
ai
mi
sdi
sput
ed.But
,i
ft
hecl
ai
m
i
s undi
sput
ed,as i
nt
he case atbar
,t
he
s
t
at
e
menti
ss
uffici
entand noot
herpr
oof
mayber
e
qui
r
e
d.xxx
SOLI
NAPV.DELROSARI
O [
123S 640] Pe
t
i
t
i
onercont
endst
hatr
espondentj
udge
gr
av
el
y abused he
r di
scr
e
t
i
on i
n not
decl
ar
i
ng t
he mut
ual obl
i
gat
i
ons of t
he
par
t
i
ese
xt
i
ngui
hsed t
ot
hee
xt
e
ntoft
hei
r
r
espect
i
v
e amount
s. He r
el
i
e
s on Ar
t
.
1278 t
ot
heeffectt
hatcompensat
i
on shal
l
t
ake pl
ace when 2 per
sons,i
nt
hei
rown
r
i
ght
,ar
ec
r
e
di
t
or
s and debt
or
s ofeac
h
ot
her
. Thear
gumentf
ai
l
st
oconsi
derAr
t
.
1279w/cpr
ovi
dest
hatcompensat
i
on can
t
ake pl
ace onl
yi
f bot
h obl
i
gat
i
ons ar
e
l
i
qui
dat
e
d. I
n t
he case at bar
,t
he
pe
t
i
t
i
oner
'
sc
l
ai
m agai
ns
tt
her
esp.Lut
er
os
i
ss
t
i
l
lpe
ndi
ngde
t
e
r
mi
nat
i
onbyt
hecour
t
.
Whi
l
ei
ti
s notf
or Us t
o pass upon t
he
mer
i
t
soft
hepl
t
ff'
scauseofact
i
on i
nt
hat
case,i
t appear
st
hatt
he cl
ai
m asser
t
ed
t
her
ei
ni
sdi
sput
e
dbyt
heLut
er
oson bot
h
f
act
ual and l
egal gr
ounds. Mor
e
,t
he
count
e
r
cl
ai
m i
nt
er
posed by t
hem, i
f
ul
t
i
mat
el
yf
ound t
o be mer
i
t
or
i
ous, can
def
eat pe
t
i
t
i
oner
'
s demand. Upon t
hi
s
pr
emi
se,hi
scl
ai
m i
nt
hatcasecannotbe
cat
e
gor
i
z
ed as l
i
qui
dat
e
d cr
edi
tw/c may
pr
oper
l
y be s
e
t
off agai
nsthi
s obl
i
g
at
i
on.
Compensat
i
on c
annot t
ake pl
ac
e wher
e
one'
sc
l
ai
m agi
ns
tt
he ot
her i
ss
t
i
l
lt
he
subbj
ec
t of c
our
tl
i
t
i
gat
i
on. I
ti
s a
r
equi
r
ement
,f
or c
ompensat
i
on t
o t
ake
pl
ac
e,t
hatt
heamounti
nvol
ved bec
er
t
ai
n
andl
i
qui
dat
ed.
SYCI
P V . CA
[
134 S 317]
Compensat
i
on c
annot t
ake pl
ac
e wher
e,
wi
t
hr
espec
tt
ot
he money i
nvol
ved i
nt
he
est
af
ac
ase,t
he c
ompl
ai
nantwas mer
el
y
ac
t
i
ng as agentofanot
her
.I
n set
off t
he
t
wo per
sons mus
ti
nt
hei
r own r
i
ghtbe
c
r
edi
t
or and debt
or of eac
h o
t
her
.
Pe
t
i
t
i
onercont
endst
hatr
esp.CA e
r
r
ed i
n
not appl
yi
ng t
he pr
ovi
si
ons on
compensat
i
on or se
t
t
i
ngoff debt
s under
Ar
t
. 1278 and 1279, despi
t
e e
vi
dence
showi
ngt
hatJoseLapuzs
t
i
l
lowedhi
m an
amountofmor
et
han P5,
000 and i
n not
di
smi
ssi
ngt
heappealconsi
der
i
ngt
hatt
he
l
at
t
eri
snotl
egal
l
yt
heagr
i
v
edpar
t
y
. Thi
s
cont
e
nt
i
on i
s unt
enabl
e
. Compensat
i
on
cannott
ake pl
ace i
nt
hi
sc
ase si
nc
et
he
e
vi
denceshowst
hatJoseLapuzi
sonl
yan
agen ofAl
ber
tSmi
t
h and/ orDr
.Dwi
ght
Di
l
l
. Compensat
i
ont
akespl
aceonl
ywhen
t
wo per
sons i
n t
hei
r own r
i
ght ar
e
cr
edi
t
or
s and debt
or
s ofeac
h ot
he
r
,and
t
hat eac
h one oft
he obl
i
gor
si
s bound
pr
i
nci
pal
l
y and i
s at t
he same t
i
me a
pr
i
nci
palcr
edi
t
oroft
he ot
he
r
. Mor
e
over
,
xxx Lapuz di
d not consent t
ot
he offse
t
t
i
ng of hi
s obl
i
gat
i
on w/ pe
t
i
t
i
oner
'
s
obl
i
gat
i
ont
opayf
ort
he500shar
es.
CI
A.MARI
TI
MA V.CA [
135 S 593] Compensat
i
onc
annott
akepl
ac
ewher
eone
oft
hedebt
si
snotl
i
qui
dat
edaswhent
her
e
i
s a r
unni
ng i
nt
er
est s
t
i
l
lt
o be pai
d
t
her
eon.
- Mor
e,t
hel
egali
nt
e
r
estpayabl
e
f
r
om 2/3/51 on t
he sum ofP40,
797.
54,
r
epr
esent
i
ng usef
ule
xpens
es i
ncur
r
ed by
PANORI
ENTAL,i
s al
so s
t
i
l
lunl
i
qui
dat
ed
si
nc
ei
nt
er
e
stdoesnots
t
opaccr
ui
ng"
unt
i
l
t
heexpensesar
ef
ul
l
ypai
d.
"Thus,wefind
w/o basi
s REPUBLI
C'
s al
l
egat
i
on t
hat
PANORI
ENTAL'
S cl
ai
m i
nt
he amountof
P40,
797.
54
was
e
xt
i
ngui
shed
by
compensat
i
on s
i
ncet
her
e
nt
al
spayabl
eby
PANORI
ENTAL amountt
o P59,
500 whi
l
e
t
he expenses r
e
ac
h onl
y P40,
797.
54.
Deduct
i
ng t
he l
at
t
e
r amount f
r
om t
he
f
or
mer
,REPUBLI
Cc
l
ai
mst
hatP18,
702.
46
woul
ds
t
i
l
lbeowi
ng byPANORI
ENTAL t
o
REPUBLI
C. Thatar
gumentl
osessi
ghtof
t
hef
actt
hatt
ot
hesum ofP40,
797.
54wi
l
l
s
t
i
l
lhave t
o be added t
he l
egalr
at
e of
i
nt
e
r
e
st "
f
r
om Fe
b. 3, 1951 unt
i
lf
ul
l
y
pai
d.
"
I
NTERNATI
ONAL CORPORATE BANK V.
I
AC [
163 S 296] - Requi
si
t
e ofl
egal
c
ompensat
i
onunderAr
t
.1279.
- Pe
t
i
t
i
one
r
cont
e
nds t
hat af
t
er f
or
ecl
osi
ng t
he
mor
t
gage,t
he
r
ei
ss
t
i
l
lduef
r
om pr
vt
.r
esps
asdefici
encyt
heamountofP6.
81 mi
l
l
i
on
agai
nstw/ci
thast
her
i
ghtt
oappl
yorse
t
off pr
vt
.r
espondent
'
smoneymar
ke
tcl
ai
m
ofP1,
062,
063.
83. The ar
gumenti
s w/o
mer
i
t
. Compensat
i
on shal
lt
ake pl
ace
when t
wo per
s
ons
,i
nt
hei
rown r
i
ghtar
e
cr
edi
t
or
sanddebt
or
sofeachot
he
r
.When
al
lt
he r
equi
si
t
es ment
i
oned i
n Ar
t
.1279
ar
epr
esent
,compensat
i
on t
akeseffectby
oper
at
i
on ofl
aw,e
ven w/o t
heconsentor
knowl
edgeoft
hede
bt
or
s
.(
Ar
t
.1290.
)Ar
t
.
1279 r
equi
r
esamongot
her
s
,t
hati
n or
der
t
hatl
egalc
ompensat
i
on shal
lt
ake pl
ace,
'
t
he t
wo debt
s be due
' and '
t
hey be
l
i
qui
dat
e
d
and
de
mandabl
e
.
'
Compensat
i
on i
s not pr
oper wher
et
he
cl
ai
m oft
he pe
r
son asser
t
i
ng t
he s
e
t
off
agai
nst t
he ot
he
r i
s not cl
ear nor
l
i
qui
dat
e
d;compens
at
i
on cannotext
endt
o
unl
i
qui
dat
ed,di
sput
ed cl
ai
m ar
i
s
i
ng f
r
om
br
eac
hofcont
r
ac
t
.The
r
ecanbenodoubt
t
hatpe
t
i
t
i
oneri
si
nde
bt
edt
opr
vtr
esp. i
n
t
heamountofP1,
062,
063.
83r
epr
esent
i
ng
t
he pr
oceeds of he
r mone
y mar
ke
t
i
nv
est
ment
. Thi
s i
s admi
t
t
e
d. But
whe
t
he
rpr
vt
.r
espi
si
ndebt
e
dt
ope
t
i
t
i
oner
i
n t
he amount of P6.
81 mi
l
l
i
on
r
epr
esent
i
ng t
he defici
ency bal
ance af
t
e
r
t
hef
or
ecl
osur
eoft
hemor
t
gagee
xecut
e
dt
o
secur
e t
he l
oan ext
ended t
o her
,i
s
vi
gor
ousl
y di
sput
e
d. Thi
s ci
r
c
ums
t
ance
pr
e
vent
sl
egalcompens
at
i
on f
r
om t
aki
ng
pl
ace.
ONG V.CA [
177 S 402] - Requi
si
t
es of
Compensat
i
on.
- Fer
mi
n obvi
ousl
ycannot
t
ake r
ef
uge i
n Ar
t
.1279. As t
he r
esp.
Cour
tcor
r
e
ct
l
y obser
v
ed i
n hol
di
ng t
hat
t
he above pr
ovi
si
on was not appl
i
c
abl
e:
Thei
ns
t
antcasedoesnotcer
t
ai
nl
ysat
i
sf
y
t
he above because (
1) appel
l
anti
snota
debt
orofappel
l
e,i
ti
sonl
yt
hel
at
t
e
rwho
i
si
ndebt
e
dt
o appel
l
ant
;(
2) t
he debt
s,
e
ven admi
t
t
i
ng,t
hat t
he del
i
ver
y oft
he
z
i
pper
st
o pl
t
ff.i
s a debt
,do not bot
h
consi
sti
n asum ofmone
ynorar
et
he
yof
t
hesamequal
i
t
yandki
nd.xxx
PI
ONEER I
NSURANCE V.CA [
180 S 126]
- Compensat
i
on shal
lt
akepl
ace when 2
per
sons,i
nt
he
i
rown r
i
ght
,ar
e cr
edi
t
or
s
and debt
or
s ofeach ot
her
. Whe
n al
lt
he
r
equi
si
t
es ment
i
oned i
n Ar
t
. 1279 ar
e
pr
esent
, compensat
i
on t
akes effect by
oper
at
i
on ofl
aw,e
ven w/o t
heconsentor
knowl
edgeoft
hede
bt
or
s
.(
Ar
t
.1290.
)Ar
t
.
1279 r
e
qui
r
es mong ot
he
r
s,t
hati
n or
der
t
hatl
egalc
ompensat
i
on shal
lt
ake pl
ace,
t
he2 debt
sbedueand t
he
ybel
i
qui
dat
ed
and demandabl
e
. Compens
at
i
on i
s not
pr
oper whe
r
et
he cl
ai
m of t
he per
son
asser
t
i
ng t
he se
t
off agai
nstt
he ot
he
ri
s
not cl
e
ar nor l
i
qui
dat
ed; compensat
i
on
cannot ext
end t
o unl
i
qui
dat
ed,di
s
put
ed
cl
ai
m ar
i
si
ngf
r
om br
eac
hofcont
r
act
.
SI
LAHI
S MARKETI
NG V.I
AC [
180S 21] Compensat
i
on i
s not pr
oper wher
et
he
cl
ai
m oft
he pe
r
son asser
t
i
ng t
he s
e
t
off
agai
nst t
he ot
he
r i
s not cl
ear nor
l
i
qui
dat
e
d;compens
at
i
on cannotext
endt
o
unl
i
qui
dat
ed,di
sput
edcl
ai
me
xi
s
t
i
ngf
r
om
br
eac
hofcont
r
act
.xxx
Undoubt
edl
y
,pe
t
i
t
i
one
radmi
t
st
he
v
al
i
di
t
y of i
t
s out
s
t
andi
ng account
s w/
pr
vt
.r
esp.i
nt
heamountofP22,
213.
75as
cont
ai
nedi
ni
t
sans
wer
.Butwhe
t
herpr
vt
.
r
esp.i
sl
i
abl
et
o payt
hepe
t
i
t
i
onera 20%
mar
gi
n or compensat
i
on on t
he subj
ect
sal
e t
o Dol
e Phi
l
s.
,I
nc. i
s vi
gor
ousl
y
di
sput
ed. Thi
s ci
r
c
ums
t
ance pr
ev
ent
s
l
egalcompensat
i
onf
r
om t
aki
ngpl
ac
e.
Ar
t
. 1280. Not
wi
t
hs
t
andi
ng t
he
pr
ovi
si
ons of t
he pr
ecedi
ng ar
t
i
cl
e, t
he
guar
ant
or may se
t up compensat
i
on as
r
egar
ds what t
he cr
edi
t
or may owe t
he
pr
i
nci
paldebt
or
.
Ar
t
.1283.I
foneoft
hepar
t
i
est
oa
sui
t ov
er an obl
i
gat
i
on has a cl
ai
m f
or
damagesagai
ns
tt
heot
her
,t
hef
or
mermay
se
ti
t off by pr
ovi
ng hi
sr
i
ght t
o sai
d
damagesandt
heamountt
her
e
of
.
EffectofLegalCompens
at
i
on
Ar
t
.1289. I
faper
son shoul
dhave
agai
nst hi
m s
ev
er
al debt
s whi
ch ar
e
suscept
i
bl
eofcompensat
i
on,t
her
ul
eson
t
heappl
i
cat
i
on ofpayment
sshal
lappl
yt
o
t
heor
deroft
hecompensat
i
on.
Ar
t
.1290. When al
lt
her
equi
si
t
e
s
ment
i
oned i
n ar
t
i
cl
e 1279 ar
e pr
esent
,
compensat
i
on t
akese
ffectbyoper
at
i
on of
l
aw,and ext
i
ngui
shes bot
h debt
st
ot
he
concur
r
ent amount
, ev
en t
hough t
he
cr
edi
t
or
sand debt
or
sar
enotawar
eoft
he
compensat
i
on.
Ar
t
.1279. I
n or
de
r
t
hat compensat
i
on may be
pr
oper
,i
ti
sne
cessar
y:
(
1)Thateac
h one of
t
he obl
i
gor
s be bound
pr
i
nci
pal
l
y
,and t
hathe be
att
hesamet
i
meapr
i
nci
pal
cr
edi
t
oroft
heot
he
r
;
(
2)That bot
h debt
s
consi
sti
n a sum ofmoney
,
or i
ft
he t
hi
ngs due ar
e
consumabl
e,t
he
y beoft
he
same ki
nd,and al
so oft
he
same qual
i
t
yi
ft
he l
at
t
e
r
hasbeenst
at
e
d;
(
3) That t
he t
wo
debt
sbedue;
(
4) That t
he
y be
l
i
qui
dat
e
danddemandabl
e
;
(
5)Thatovernei
t
her
of t
hem t
her
e by any
r
e
t
ent
i
on or cont
r
over
sy
,
commenced
by
t
hi
r
d
per
sons and communi
cat
e
d
i
nduet
i
met
ot
hedebt
or
.
BALANE CASE:
MI
NDANAO PORTLAND CEMENT V. CA
[
120 S 930] - Aut
omat
i
cc
ompensat
i
on,
r
equi
si
t
es of
, pr
esent
; Ext
i
ngui
shment of
t
wodebt
sar
i
si
ngf
r
om finaland exec
ut
or
y
j
udgment
s due t
o c
ompensat
i
on by
oper
at
i
on ofl
aw.
- I
ti
s cl
ear f
r
om t
he
r
ecor
dt
hat bot
h cor
por
at
i
ons,pe
t
i
t
i
oner
Mi
ndanao Por
t
l
and Cement Cor
p.
(
appel
l
ant
)and r
e
sp.Pacwel
d St
eelCor
p.
(
appel
l
ee)
,wer
ec
r
e
di
t
or
s and debt
or
s of
eac
h ot
her
,t
hei
r debt
s t
o each ot
her
consi
st
i
ng i
n final and execut
or
y
j
udgement
soft
heCFIi
n2separ
at
ecases,
or
der
i
ngt
hepaymentt
oeach ot
he
roft
he
sum ofP10Tbywayofat
t
or
ney'
sf
ees.The
2 obl
i
gat
i
ons,t
he
r
e
f
or
e,r
e
spect
i
v
el
yoffse
t
eac
h ot
he
r
, compensat
i
on havi
ng t
ake
n
effectbyoper
at
i
on ofl
aw ande
xt
i
ngui
shed
bot
h debt
st
ot
he concur
r
entamountof
P10T,pur
suantt
ot
he pr
ovi
si
ons ofAr
t
.
1278, 1279 and 1290, si
nce al
lt
he
r
equi
si
t
es pr
ovi
ded i
n Ar
t
. 1279 f
or
aut
omat
i
ccompensat
i
on "
e
v
en t
hough t
he
cr
edi
t
or
sand debt
or
sar
enotawar
eoft
he
compensat
i
on"wer
edul
ypr
esent
.
b. Fac
ul
t
at
i
ve Compensat
i
on w/c
t
ake
s pl
ac
e when c
ompensat
i
on i
s
cl
ai
mabl
e by onl
y one oft
he par
t
i
es but
notoft
heot
her
,e.
g.
,Ar
t
i
cl
es1287,1288.
Ar
t
.1287. Compensat
i
on shal
lnot
be pr
oper when one oft
he debt
s ar
i
ses
f
r
om a deposi
t
um orf
r
om t
heobl
i
gat
i
ons
of a de
posi
t
ar
y or of a bai
l
ee i
n
commodat
um.
Nei
t
hercancompens
at
i
onbese
tup
agai
nst a cr
e
di
t
or who has a cl
ai
m f
or
suppor
t due by gr
at
ui
t
ous t
i
t
l
e,wi
t
hout
pr
ej
udi
cet
ot
hepr
ovi
si
onsofpar
agr
aph 2
ofar
t
i
cl
e301.
Ar
t
.301. The r
i
ght
t
or
ecei
ves
uppor
tc
annotbe
r
enounced; nor can i
t be
t
r
ansmi
t
t
ed t
o a t
hi
r
d
per
son. Nei
t
he
r can i
t be
compensat
e
d wi
t
h whatt
he
r
eci
pi
entowest
heobl
i
gor
.
Howev
er
,suppor
ti
n
ar
r
ear
smaybecompensat
e
d
and r
enounc
ed, and t
he
r
i
ght t
o demand t
he same
may be t
r
ans
mi
t
t
ed by
one
r
ousorgr
at
ui
t
oust
i
t
l
e.
Bavi
e
r
a: Not
et
hatAr
t
.301 oft
heNCC i
s
notf
oundi
nFC
Bal
ane: The deposi
t
ar
y cannot se
t up
compensat
i
on w/ r
e
spect t
ot
he t
hi
ngs
deposi
t
ed t
o hi
m. Butt
he deposi
t
orcan
se
tupt
hec
ompensat
i
on.
Ar
t
.1288. Nei
t
he
r shal
lt
he
r
e be
compensat
i
on i
foneoft
hedebt
sc
onsi
s
t
s
i
n ci
vi
ll
i
abi
l
i
t
y ar
i
si
ng f
r
om a penal
offens
e.
c.
Cont
r
ac
t
ual
/ Convent
i
onal
c
ompensat
i
on w/c t
akes pl
ace when
par
t
i
es agr
ee t
o se
t
off e
ven i
f t
he
r
equi
si
t
es ofl
egalcompesnat
i
on ar
e not
pr
esent
,e
.
g.
,Ar
t
.1282.
Ar
t
.1282. The par
t
i
es may agr
ee
upon t
hecompens
at
i
on ofdebt
swhi
ch ar
e
noty
e
tdue.
Tol
ent
i
no: Vol
unt
ar
yCompens
at
i
on i
snot
l
i
mi
t
e
dt
oobl
i
g
at
i
onsw/car
enoty
e
tdue
.
Thepar
t
i
esmaycompensat
ebyagr
eement
any obl
i
gat
i
ons, i
n w/c t
he obj
ect
i
ve
r
equi
si
t
espr
ovi
ded f
orl
egalcompensat
i
on
ar
enotpr
e
sent
.xx
d. Judi
c
i
al Compensat
i
on when
decr
eedbyt
hecour
ti
n acasewhe
r
et
her
e
i
sacount
er
cl
ai
m,suc
hast
hatpr
ovi
dedi
n
Ar
t
.1283.
Ar
t
.1283.I
foneoft
hepar
t
i
est
oa
sui
t ov
er an obl
i
gat
i
on has a cl
ai
m f
or
damagesagai
ns
tt
heot
her
,t
hef
or
mermay
se
ti
t off by pr
ovi
ng hi
sr
i
ght t
o sai
d
damagesandt
heamountt
her
e
of
.
EffectofAssi
gnmentofCr
edi
t
Ar
t
.1285. The debt
or who has
consent
e
d t
ot
he assi
gnment of r
i
ght
s
made by a cr
e
di
t
or i
n f
avor of a t
hi
r
d
per
son,cannotse
tupagai
ns
tt
heassi
gnee
t
hecompens
at
i
on whi
c
h woul
d per
t
ai
nt
o
hi
m agai
ns
tt
he assi
gnor
, unl
ess t
he
assi
gnorwasnot
i
fied byt
hedebt
oratt
he
t
i
meheg
av
ehi
sconsent
,t
hather
eser
v
ed
hi
sr
i
ghtt
ot
hecompensat
i
on.
I
ft
he cr
edi
t
or communi
cat
ed t
he
cessi
on t
o hi
m but t
he debt
or di
d not
consentt
her
e
t
o,t
hel
at
t
ermays
e
tup t
he
compensat
i
on of debt
s pr
evi
ous t
ot
he
cessi
on,butnotofsubsequentones.
I
ft
heassi
gnmenti
smadewi
t
hout
t
heknowl
edgeoft
hede
bt
or
,hemays
e
tup
t
hecompens
at
i
on ofal
lc
r
e
di
t
spr
i
ort
ot
he
same and al
so l
at
er ones unt
i
l he had
knowl
edgeoft
heassi
gnment
.
Bal
ane: Ther
ear
e3 si
t
uat
i
onsc
over
ed i
n
t
hi
sar
t
i
cl
e:
1. Assi
gnment w/ t
he debt
or
'
s
consent
;
2. Assi
gnment w/ t
he debt
or
'
s
knowl
edgebutw/ohi
sconsent
;and
3. Assi
gnment w/o t
he debt
or
'
s
knowl
edge (
and obvi
ousl
y w/o hi
s
consent
.
)
Rul
es:
1. Assi
gnmentw/ t
he debt
or
'
sc
onsent
.
Debt
orcannotse
tup compensat
i
on atal
l
unl
esst
her
i
ghti
sr
es
er
ved.
2. Assi
gnmentw/t
hedebt
or
'
sknowl
edge
butw/ohi
sc
onsent
.
- Thedebt
orcan se
t
up compensat
i
on w/ a cr
e
di
t al
r
eady
e
xi
st
i
ngatt
het
i
meoft
heassi
gnment
.
3.
Assi
gnment w/o t
he debt
or
'
s
knowl
edge.
- Debt
or can se
t up as
compensat
i
on any cr
edi
te
xi
st
i
ng at t
he
t
i
meheac
qui
r
edknowl
edgee
v
eni
fi
tar
ose
af
t
e
rt
heact
ualassi
gnment
.
BALANE CASE:
SESBRENO V. CA
[
222 S 466] Compensat
i
onmaydef
eatassi
gnee'
sr
i
ght
s
bef
or
enot
i
c
eoft
he assi
gnmenti
sgi
vent
o
t
he debt
or
.
- I
n ot
her wor
ds, pe
t
i
t
i
oner
not
i
fied Del
t
a of hi
sr
i
ght
s as assi
gnee
af
t
e
r compensat
i
on had t
ake
n pl
ac
e by
oper
at
i
on of l
aw bec. t
he offse
t
t
i
ng
i
nst
r
ument
shadbot
hr
eac
he
dmat
ur
i
t
y
.I
t
i
sa fir
ml
ys
e
t
t
l
ed doct
r
i
net
hatt
her
i
ght
s
ofanassi
gneear
enotanygr
e
at
e
rt
hant
he
r
i
ght
soft
heassi
gnor
,s
i
ncet
heassi
gneei
s
mer
el
y subs
t
i
t
ut
ed i
n t
he pl
ace of t
he
assi
ngor and t
hat t
he ass
i
gnee acqui
r
es
hi
sr
i
ght
ssubj
ectt
ot
heequi
t
i
es-i
.
e.
,t
he
def
enses-w/c t
he debt
orcoul
d have se
t
up agai
ns
tt
he or
i
gi
nal assi
gnor bef
or
e
not
i
ceoft
heassi
ngmentwasgi
ven t
ot
he
debt
or
.Att
het
i
met
hatDel
t
awasfir
s
tput
t
onot
i
ceoft
heassi
ngmenti
n pe
t
i
t
i
oner
'
s
f
avoron 7/14/81,DMC PN NO.2731had
al
r
eadybeen di
schar
ged bycompensat
i
on.
Si
nce t
he assi
gnor Phi
l
finance coul
d not
hav
et
hen compel
l
ed payment anew by
Del
t
a ofDMC PN No.2731,pe
t
i
t
i
one
r
,as
assi
gnee of Phi
l
finance, i
s si
mi
l
ar
l
y
di
sabl
ed f
r
om col
l
ect
i
ng f
r
om Del
t
at
he
por
t
i
onoft
heNot
eassi
gnedt
ohi
m.
(
noti
nBavi
er
a'
sout
l
i
ne)
Ar
t
.1284.Whenoneorbot
hdebt
s
ar
er
e
sci
ssi
bl
e or v
oi
dabl
e,t
hey may be
compensat
e
d agai
ns
t eac
h ot
her bef
or
e
t
heyar
ej
udi
ci
al
l
yr
ecsi
ndedorav
oi
ded.
subs
t
i
t
ut
i
ngt
hepe
r
sonoft
hedebt
or
,orby
subr
ogat
i
ngat
hi
r
dper
son i
nt
her
i
ght
sof
t
hecr
edi
t
or
.(
Manr
esa.
)
Nov
at
i
oni
st
hemostunusualmode
ofe
xt
i
ngui
shi
ng an obl
i
g
at
i
on. I
ti
st
he
onl
y mode whe
r
e
by an obl
i
gat
i
on i
s
e
xt
i
ngui
shed and a new obl
i
g
at
i
on i
s
cr
eat
e
dt
ot
akei
t
spl
ace. Theot
hermodes
ofext
i
ngui
shi
nganobl
i
gat
i
on ar
eabsol
ut
e
i
nt
he sens
et
hatt
he e
xt
i
ngui
shment of
t
heobl
i
gat
i
on i
st
ot
al(
w/t
heexcept
i
on of
compr
omi
se.
) Nov
at
i
on, on t
he ot
her
hand,i
sa r
el
at
i
ve mode ofe
xt
i
ngui
shi
ng
anobl
i
gat
i
on.
Cl
assi
ficat
i
onofNov
at
i
on:
1. Subj
ec
t
i
ve(
Per
sonal
)ornovat
i
on
byachangeofsubj
ect
a. Ac
t
i
ve subj
ec
t
i
ve or a
c
hange of cr
e
di
t
or
; al
so known as
subr
ogat
i
on.
b. Passi
ve subj
ec
t
i
ve or a
c
hangeofdebt
or
2. Obj
ec
t
i
ve (
Real
)ornovat
i
on by
c
hange i
nt
he obj
e
ctor i
nt
he pr
i
nc
i
pal
condi
t
i
ons
. Novat
i
on by a c
hange i
nt
he
pr
i
nci
pal condi
t
i
ons i
s t
he mos
t
pr
obl
e
mat
i
cki
ndofnovat
i
on be
c.you hav
e
t
ode
t
e
r
mi
newhe
t
herornott
hec
hangei
n
t
he condi
t
i
ons i
s pr
i
nci
pal or me
r
e
l
y
i
nci
dent
al
. For e
xampl
e,a c
hange f
r
om
s
t
r
ai
ghtt
e
r
mst
oi
ns
t
al
l
mentt
er
msand a
c
hange f
r
om
noni
nt
er
e
st bear
i
ng
obl
i
gat
i
on t
o an i
nt
e
r
es
tbear
i
ng one ar
e
c
hangesi
nt
hepr
i
nci
palcondi
t
i
ons.
G.Novat
i
on
Concept ofNov
at
i
on.
- Nov
at
i
on i
st
he
e
xt
i
ngui
shment of an obl
i
gat
i
on by t
he
subs
t
i
t
ut
i
on orc
hangeoft
heobl
i
gat
i
on by
a subsequent one w/c ext
i
ngui
shes or
modi
fies t
he fir
st
,ei
t
herby changi
ng t
he
obj
e
ct of pr
i
nci
pal condi
t
i
ons
, or by
3. Mi
xed novat
i
on w/c i
s a
combi
nat
i
on of bot
h subj
ect
i
ve and
obj
e
ct
i
v
enov
at
i
on.
Requi
si
t
esofNov
at
i
on:
1. The
r
e mus
t be a pr
e
vi
ous v
al
i
d
obl
i
gat
i
on;
2.Agr
eementoft
he par
t
i
es t
o cr
e
at
et
he
new obl
i
gat
i
on;
3.Ext
i
ngui
shmentoft
heol
dobl
i
gat
i
on.(
I
woul
dc
onsi
dert
hi
san effect
,r
at
hert
han
ar
equi
si
t
eofnov
at
i
on-Bal
ane)
;
4.Val
i
di
t
yoft
hene
w obl
i
g
at
i
on.
(
Ti
uSi
ucov
.Habana,45P707.
)
Ar
t
. 1292. I
n or
der t
hat an
obl
i
gat
i
on maybee
xt
i
ngui
shedbyanot
he
r
whi
c
h subs
t
i
t
ut
et
hes
ame,i
ti
si
mper
at
i
ve
t
hat i
t be s
o decl
ar
ed i
n unequi
v
ocal
t
e
r
ms, or t
hat t
he ol
d and t
he ne
w
obl
i
gat
i
onsbeon ev
er
ypoi
nti
ncompat
i
bl
e
wi
t
heachot
her
.
BALANE CASES:
FUAV.YAP [
74P287]- Appel
l
eobt
ai
ne
d
i
nt
he CFI
Ml
a.a j
udgement sent
enci
ng
appel
ant
s t
o pay P1,
538.
04 w/ l
eg
al
i
nt
e
r
e
st and cos
t
s.
Subsequent
l
y
,
appel
l
ant
se
xecut
edamor
t
gagei
nf
av
orof
appel
l
e, wher
ei
n i
t was s
t
i
pul
at
ed t
hat
t
hei
r obl
i
gat
i
on under t
he j
udgmentwas
r
educed t
oP1,
200 w/cwasmadepayabl
e
i
n 4 ins
t
al
l
ment
sofP300;t
hatt
osecur
e
t
he paymentt
he s
ai
d P1,
200,a c
amar
i
n
bel
ongi
ng t
o appel
l
ant
swasmor
t
gaged t
o
appel
l
ee; t
hat i
n case t
he appel
l
ant
s
def
aul
t
ed i
nt
he payment ofany oft
he
i
nst
al
l
ment
s,t
heywoul
dpayt
enper
centof
t
heunpai
dbal
.asat
t
or
ney'
sf
e
es,pl
ust
he
cost
s of t
he act
i
on t
o be br
ought by
appel
l
eebyr
easonofsuchdef
aul
t
,andt
he
f
ur
t
he
ramountofP338,r
epr
esent
i
ng t
he
di
scountconcededt
oappel
l
ant
s.
HELD: Theappel
l
ant
'
sl
i
abi
l
i
t
yundert
he
j
udgment had been e
xt
i
ngui
s
hed by t
he
s
t
at
e
ment e
vi
denced by t
he mor
t
gage
e
xecut
e
d by t
he
m i
nf
av
oroft
he appel
l
e.
Al
t
hough sai
d mor
t
gagedi
d notexpr
essl
y
cancel t
he ol
d obl
i
gat
i
on, t
hi
s was
i
mpl
i
e
dl
y novat
ged by r
eason of
i
ncompat
i
bi
l
i
t
yr
e
sul
t
i
ngf
r
om t
hef
actt
hat
,
wher
e
ast
hej
udgementwasf
orP1,
538.
04
payabl
e atone t
i
me,di
d notpr
ovi
de f
or
at
t
or
ney'
sf
ees,and was notsecur
ed,t
he
new obl
i
gat
i
on i
sf
or P1200 payabl
ei
n
i
nst
al
l
ment
s,s
t
i
pul
at
es f
orat
t
or
ney'
sf
e
es
and i
s secur
e
d by a mor
t
gage. The l
at
e
r
agr
e
ementdi
d notmer
el
ye
xt
end t
het
i
me
t
o pay t
he j
udgment
,bec.i
twas t
her
ei
n
r
eci
t
ed t
hat appel
l
ant
s pr
omi
sed t
o pay
P1,
200 t
o appel
l
ee as a se
t
t
l
ementoft
he
sai
dj
udgment
. Sai
dj
udgmentcannotbe
sai
dt
o have been s
e
t
t
l
ed,unl
ess i
twas
e
xt
i
ngui
shed.
MI
LLAR V.CA [
38 S 642] - Whe
r
et
he
new obl
i
gat
i
on mer
el
yr
ei
t
e
r
at
esorr
at
i
fies
t
he ol
d obl
i
gat
i
on, al
t
hough t
he f
or
mer
effect
s but mi
nor al
t
er
at
i
ons or s
l
i
ght
modi
ficat
i
ons w/ r
espectt
ot
he c
ause or
obj
e
ct or condi
t
i
ons of t
he l
at
t
er
, such
c
hangesdo noteffect
uat
eanysubs
t
ant
i
al
i
ncompat
i
bi
l
i
t
y be
t
.t
he 2 obl
i
gat
i
ons.
Onl
y t
hose essent
i
al and pr
i
nci
pal
c
hangesi
nt
r
oduced byt
henew obl
i
gat
i
on
pr
oduci
ng an al
t
e
r
at
i
on ormodi
ficat
i
on of
t
hee
ssenceoft
heol
d obl
i
gat
i
on r
e
sul
ti
n
i
mpl
i
e
d novat
i
on. I
nt
hecaseatbar
,t
he
mer
er
educt
i
on oft
he amountdue i
n no
sense const
i
t
ut
e
s a suffici
enti
ndi
ci
um of
i
ncompat
i
bi
l
i
t
y
,especi
al
l
yi
nt
hel
i
ghtof(
a)
t
heexpl
anat
i
on byt
hepe
t
i
t
i
onert
hatt
he
r
educedi
ndebt
e
dnesswast
her
esul
toft
he
par
t
i
alpayment
smadebyt
her
esp.bef
or
e
t
he e
xecut
i
on of t
he c
hat
t
el mor
t
gage
agr
e
ement
,and(
b)t
hel
at
t
er
'
sadmi
s
si
ons
bear
i
ngt
he
r
e
on.
SANDI
CO V. PI
GUI
NG [
42 S 322] Nov
at
i
on r
esul
t
si
n 2s
t
i
pul
at
i
ons
- onet
o
e
xt
i
ngui
shane
xi
st
i
ngobl
i
g
at
i
on,t
heot
her
t
o subs
t
i
t
ut
e a ne
w one i
n i
t
s pl
ace.
Fundament
ali
ti
st
hatnovat
i
on effect
sa
subs
t
i
t
ut
i
on or modi
ficat
i
on of an
obl
i
gat
i
on
by
anot
he
r
or
an
e
xt
i
ngui
shment ofone obl
i
gat
i
on by t
he
cr
eat
i
on ofanot
he
r
.I
nt
hecaseathand,
we f
ai
lt
o see what new or modi
fied
obl
i
gat
i
on ar
oseoutoft
hepaymentbyt
he
r
esp.oft
her
e
ducedamountofP4,
000and
subs
t
i
t
ut
ed t
he mone
t
ar
y l
i
abi
l
i
t
y f
or
P6,
000 of t
he sai
d r
esp. under t
he
appel
l
at
e cour
t
'
sj
udgment
. Addi
t
i
onal
l
y
,
t
o sus
t
ai
n novat
i
on necessi
t
at
e
st
hatt
he
same be so decl
ar
ed i
n unequi
v
ocal
t
e
r
ms- cl
ear
l
y and unmi
st
akabl
y shown
byt
hee
xpr
essagr
eementoft
hepar
t
i
esor
byact
sofequi
val
enti
mpor
t
-ort
hatt
he
r
e
i
scompl
e
t
eands
ubst
ant
i
ali
ncompat
i
bi
l
i
t
y
be
t
.t
he2obl
i
g
at
i
ons.
NPC V.DAYRI
T[
125S849]- Novat
i
oni
s
never pr
esumed but mus
t be expl
i
c
i
t
l
y
s
t
at
ed; No novat
i
on i
n t
he absenc
e of
expl
i
c
i
tnovat
i
onori
nc
ompat
i
bi
l
i
t
yonever
y
poi
nt bet
ween t
he ol
d and t
he new
agr
eement
soft
hepar
t
i
es.
-I
nt
hecaseat
bar
,t
her
ei
snot
hi
ngi
nt
heMay14,1982
agr
e
ement w/c suppor
t
st
he pe
t
i
t
i
oner
'
s
cont
e
nt
i
on. The
r
e i
s ne
i
t
her e
xpl
i
ci
t
novat
i
onnori
ncompat
i
bi
l
i
t
yonev
er
ypoi
nt
be
t
.t
he"
ol
d"andt
he"
new"agr
eement
s.
COCHI
NGYAN V.R & B SURETY [
151 S
339]- Novat
i
ondefined.
- Novat
i
oni
st
he
e
xt
i
ngui
shment of an obl
i
gat
i
on by t
he
subs
t
i
t
ut
i
on orc
hangeoft
heobl
i
gat
i
on by
asubsequentonew/ct
e
r
mi
nat
esi
t
,ei
t
her
by c
hangi
ng i
t
s obj
ect or pr
i
nci
pal
condi
t
i
ons
,orbysubst
i
t
ut
i
ngane
w debt
or
i
npl
ac
eoft
heol
done,orbysubr
ogat
i
nga
t
hi
r
d per
son t
ot
he r
i
ght
s oft
hecr
e
di
t
or
.
Nov
at
i
on t
hr
ough achangeoft
heobj
ector
pr
i
nci
pal condi
t
i
ons of an exi
st
i
ng
obl
i
gat
i
on i
sr
ef
er
r
e
dt
o as obj
ec
t
i
ve (
or
r
eal
)novat
i
on. Novat
i
on byt
hechangeof
ei
t
he
rt
he pe
r
son oft
he debt
ororoft
he
cr
edi
t
or i
s descr
i
bed as subj
ec
t
i
ve (
or
per
sonal
)novat
i
on. Novat
i
on mayal
so be
bot
h obj
ect
i
ve and subj
ect
i
v
e(
mi
xed)at
t
he same t
i
me. I
n bot
h obj
ect
i
v
e and
subj
ect
i
v
e novat
i
on, a dual pur
pose i
s
ac
hi
ev
ed- an obl
i
gat
i
on i
s ext
i
ngui
shed
andanew onei
scr
eat
e
di
nl
i
eut
her
eof
.
No
vat
i
on i
s never pr
esumed.
- I
f
obj
e
ct
i
v
e nov
at
i
on i
st
ot
ake pl
ace,i
ti
s
i
mper
at
i
ve t
hat t
he new obl
i
gat
i
on
e
xpr
essl
ydecl
ar
et
hatt
heol
d obl
i
gat
i
on i
s
t
her
eby ext
i
ngui
shed, or t
hat t
he ne
w
obl
i
gat
i
on be on e
ver
y poi
nti
ncompat
i
bl
e
w/ t
he ol
d one. Nov
at
i
on i
s nev
er
pr
esumed;i
tmus
tbee
st
abl
i
shedei
t
he
rby
t
he di
sc
har
ge of t
he ol
d de
bt by t
he
e
xpr
esst
e
r
msoft
hene
w agr
eement
,orby
t
heact
soft
hepar
t
i
eswhosei
nt
ent
i
on t
o
di
ssol
ve t
he ol
d obl
i
gat
i
on as a
consi
der
at
i
on oft
hee
mer
genceoft
henew
onemus
tbecl
ear
l
ydi
scer
ni
bl
e.
I
f ol
d debt
or i
s not r
el
eased, no
novat
i
on oc
c
ur
s and t
het
hi
r
d per
son who
assumed t
he obl
i
gat
i
on bec
omes a c
odebt
ororsur
e
t
y orac
osur
e
t
y.
- Agai
n,i
f
subj
ect
i
v
e novat
i
on by a c
hange i
nt
he
per
son oft
he deboti
st
o occur
,i
ti
s not
enough t
hatt
hej
ur
i
di
calr
el
at
i
on be
t
.t
he
par
t
i
est
ot
heor
i
gi
nalc
ont
r
ac
ti
se
xt
ended
t
oat
hi
r
d pe
r
son. I
ti
sessent
i
alt
hatt
he
ol
d debt
orber
el
easedf
r
omtheobl
i
gat
i
on,
and t
he t
hi
r
d pe
r
son orne
w debt
ort
ake
t
hepl
ac
ei
nt
he new r
el
at
i
on. I
Ft
he ol
d
debt
ori
snotr
el
eased,nonovat
i
on occur
s
andt
het
hi
r
dper
sonwhohasassumedt
he
ol
bl
i
gat
i
on oft
hedebt
orbecomesmer
e
l
ya
codebt
ororsur
e
t
yorac
osur
e
t
y
.
No
vat
i
on i
s noti
mpl
i
ed when t
he
par
t
i
es t
ot
he new obl
i
gat
i
on expr
essl
y
negat
ed t
hel
apsi
ng oft
heol
d obl
i
gat
i
on.
Nei
t
her can t
he pe
t
i
t
i
one
r
s anc
hor t
hei
r
def
ense on i
mpl
i
ed novat
i
on. Absentan
unequi
v
ocaldecl
ar
at
i
on ofext
i
ngui
shment
ofa pr
ee
xi
s
t
i
ng obl
i
gat
i
on,a showi
ng of
compl
e
t
ei
ncompat
i
bi
l
i
t
y be
t
.t
he ol
d and
t
he new obl
i
gat
i
on (
and not
hi
ng el
se)
woul
d sust
ai
n a findi
ng of novat
i
on by
i
mpl
i
c
at
i
on. Butwher
e,as i
nt
hi
sc
ase,
t
hepar
t
i
est
ot
hene
w obl
i
gat
i
on e
xpr
essl
y
r
ecogni
z
et
he cont
i
nui
ng exi
s
t
ence and
v
al
i
di
t
y oft
he ol
d one
, wher
e,i
n ot
her
wor
ds
,t
he par
t
i
es e
xpr
essl
y negat
e
dt
he
l
apsi
ngoft
heol
d obl
i
gat
i
on,t
he
r
ec
an be
no novat
i
on. The i
ssue of i
mpl
i
ed n
ovat
i
oni
snotr
eac
hedatal
l
.
BALI
LA V.I
AC [
155S 262] - Subsequent
mut
ual agr
eement
s and ac
t
i
ons of
pet
i
t
i
oner
s and pr
i
vat
e r
espondent
s
al
l
owi
ngt
hef
or
merext
ensi
onoft
i
met
opay
t
hei
r obl
i
gat
i
ons and i
n i
ns
t
al
l
ment
s
novat
ed and amended t
he per
i
od of
paymentdec
r
eed by t
he t
r
i
alc
our
ti
ni
t
s
j
udgement by c
ompr
omi
se.
- The f
act
t
her
ef
or
e r
emai
ns t
hat t
he amount of
P84,
000payabl
eonorbef
or
eMay15,1981
decr
eed byt
het
r
i
alcour
ti
ni
t
sj
udgment
bycompr
omi
sewasnovat
e
d and amended
byt
hes
ubsequentmut
ualagr
eement
sand
act
i
ons of pe
t
i
t
i
oner
s and pr
vt
.r
esps
.
Pe
t
i
t
i
oner
spai
dt
heaf
or
es
t
at
e
d amounton
an i
ns
t
al
l
mentbasi
sand t
hey wer
e gi
v
en
bypr
vt
.r
e
spsnol
esst
han 8ext
ensi
onsof
t
i
me t
o pay t
hei
r obl
i
gat
i
on. These
t
r
ansact
i
ons t
ook pl
ac
e dur
i
ng t
he
pendency oft
he mot
i
on f
orr
econ.oft
he
or
der oft
he t
r
i
alcour
t dat
e
d 4/26/83,
dur
i
ng t
he pedency of t
he pe
t
i
t
i
on f
or
cer
t
i
or
ar
ibef
or
et
heI
AC andaf
t
ert
hefil
i
ng
oft
he pe
t
i
t
i
on bef
.Us. Thi
sanswer
st
he
cl
ai
m oft
he r
esps.on t
he f
ai
l
ur
e oft
he
pe
t
i
t
i
oner
st
o pr
esente
vi
dences orpr
oof
s
of payment i
nt
he l
ower cour
t and t
he
appel
l
at
ecour
t
.
PEOPLE'
SBANK V.SYVEL'
S[
164S247]Whendoesnovat
i
ont
akepl
ac
e;Novat
i
oni
s
never pr
esumed.
- Novat
i
on t
ake
s pl
ace
when t
he obj
ectorpr
i
nci
palcondi
t
i
on of
an obl
i
gat
i
on i
sc
hanged oral
t
er
ed. I
ti
s
el
ement
ar
y t
hat nov
at
i
on i
s ne
v
er
pr
esumed;i
tmus
tbe e
xpl
i
ci
t
l
ys
t
at
e
d or
t
her
emus
tbemani
f
es
ti
ncompat
i
bi
l
i
t
ybe
t
.
t
he ol
d and t
he new obl
i
gat
i
ons i
ne
ver
y
aspect
.
Absenc
e ofexi
s
t
enc
e ofan expl
i
c
i
t
novat
i
on nor i
nc
ompat
i
bi
l
i
t
y bet
ween t
he
ol
dand t
henew agr
eement
s.
-I
nt
hecase
atbar
,t
her
ei
s not
hi
ng i
nt
he REM w/c
suppor
t
s appel
l
ant
s' submi
ssi
on. The
cont
r
act on i
t
sf
ace does not show t
he
e
xi
s
t
ence of an expl
i
ci
t novat
i
on nor
i
ncompat
i
bi
l
i
t
yon e
ver
ypoi
ntbe
t
.t
heol
d
and t
he new agr
ee
ment
s as t
he second
cont
r
acte
vi
dent
l
yi
ndi
cat
e
st
hatt
hesame
wase
xecut
edasnew addi
t
i
onalsecur
i
t
yt
o
t
he CM pr
evi
ousl
y ent
er
ed i
nt
o by t
he
par
t
i
es.
No
vat
i
on was noti
nt
ended i
nt
he
c
ase at baras t
he REM was t
aken as
addi
t
i
onalsec
ur
i
t
yf
ort
he per
f
or
manc
e of
t
hec
ont
r
ac
t
.
BROADWAY CENTRUM V.TROPI
CAL HUT
[
224 S 302] - We st
ar
t w/ t
he basi
c
concept
i
on t
hat novat
i
on i
s t
he
e
xt
i
ngui
shment of an obl
i
gat
i
on by t
he
subs
t
i
t
ut
i
on of t
hat obl
i
gat
i
on w/ a
subsequentone,w/ct
e
r
mi
nat
e
si
t
,ei
t
her
by c
hangi
ng i
t
s obj
ect or pr
i
nci
pal
condi
t
i
onsorbys
ubst
i
t
ut
i
ngane
w debt
or
i
npl
ac
eoft
heol
done,orbysubr
ogat
i
nga
3r
d per
son t
ot
he r
i
ght
s oft
he cr
edi
t
or
.
xxx
I
fobj
ec
t
i
venovat
i
oni
st
ot
akepl
ac
e,
i
ti
s essent
i
al t
hat t
he new obl
i
gat
i
on
expr
essl
ydec
l
ar
et
hatt
heol
d obl
i
gat
i
on i
s
t
o be ext
i
ngui
shed or t
hat t
he new
obl
i
gat
i
on be on ever
y poi
nti
nc
ompat
i
bl
e
w/t
heol
done.xxx
Ar
t
. 1291. Obl
i
gat
i
ons may be
modi
fiedby:
(
1) Changi
ng t
he
i
r obj
e
ct or
pr
i
nci
palcondi
t
i
ons;
(
2)Subst
i
t
ut
i
ng t
he per
s
on oft
he
debt
or
;
(
3)Subr
ogat
i
ng a t
hi
r
d per
son i
n
t
her
i
ght
soft
hecr
edi
t
or
.
BALANE CASE:
LAND BANK V.CA [
181S610]- Noneof
t
he r
equi
r
ement
s ofno
vat
i
on ei
t
heroft
he
subj
ec
tmat
t
eroft
hebond agr
eementorof
subr
ogat
i
on oft
he c
r
edi
t
or t
her
eunder
,i
s
vi
si
bl
ei
nt
he i
ns
t
antc
ase.
- Fi
nal
l
y
,i
ti
s
not easy t
o unde
r
s
t
and t
he t
hr
ust of
r
espondent
'
s ar
gumentt
hatnovat
i
on had
t
ake
npl
acei
nr
espectoft
hei
rbondswhe
n
t
heyhad t
hei
rr
egi
s
t
er
ed bonds conver
t
e
d
i
nt
obear
erbonds. I
fr
espondent
smeant
o
suggestt
hatt
hepr
i
nt
ed t
er
ms oft
he new
bear
er bonds we
r
e somehow novat
e
d by
t
henot
at
i
on t
he
yhad i
ns
er
t
e
di
nt
heLBP
For
ms64 soast
oobl
i
gat
et
heLand Bank
t
opayapor
t
i
on oft
heNov
.21,1974-May
20, 1975 i
nt
er
est not t
ot
he hol
der or
bear
erofsuc
h bonds (
as r
equi
r
ed by t
he
t
e
r
ms t
her
e
of
) but r
at
he
r t
o t
he
r
espondent
s, s
uch sugges
t
i
on mus
t be
fir
ml
yr
ej
ect
ed. Noneoft
her
equi
r
ement
s
ofnov
at
i
on ei
t
heroft
hesubj
ectmat
t
e
rof
t
he bond agr
e
ement or of (
par
t
i
al
)
subr
ogat
i
on of t
he cr
edi
t
or (
obl
i
gee)
t
her
eunder
,i
svi
si
bl
ei
nt
he i
ns
t
antcase.
Ofe
quali
mpor
t
ance i
st
he f
actt
hatt
he
uni
l
at
er
alnot
at
i
on oft
her
espondent
swas
not i
nser
t
e
d i
n t
he new bear
er bond
cer
t
i
ficat
es. The mi
sc
hi
efi
mpl
i
ci
ti
nt
he
(
assumed)sugges
t
i
on oft
he r
espondent
s
i
spl
ai
nt
osee.
Subj
ect
i
veNovat
i
on
a. I
n case of act
i
ve subj
ect
i
ve
novat
i
on(
Ar
t
.1300-subr
ogat
i
on)
:
Ar
t
.1300. Subr
ogat
i
on ofa t
hi
r
d
per
son i
n t
he r
i
ght
s of t
he cr
e
di
t
or i
s
ei
t
he
rl
egalorconvent
i
onal
.Thef
or
meri
s
not pr
esumed,e
xcepti
n cases e
xpr
essl
y
ment
i
onedi
nt
hi
sCode;t
hel
at
t
e
rmus
tbe
cl
ear
l
yest
abl
i
shed i
n oror
dert
hati
tmay
t
akee
ffect
.
(
i
) Legal(
Ar
t
.1302)
-I
nal
l
cases of Ar
t
. 1302, subr
ogat
i
on
t
ake
spl
acebyoper
at
i
onofl
aw.
Ar
t
. 1302. I
ti
s pr
esumed t
hat
t
her
ei
sl
eg
alsubr
ogat
i
on:
(
1)When a cr
edi
t
or pay
s anot
her
cr
edi
t
orwhoi
spr
ef
er
r
ed,e
v
en wi
t
houtt
he
debt
or
'
sknowl
edge;
(
2) When a t
hi
r
d per
son, not
i
nt
e
r
e
st
e
di
nt
heobl
i
gat
i
on,payswi
t
ht
he
e
xpr
essort
aci
tappr
ov
aloft
hedebt
or
;
(
3) When, ev
en wi
t
hout t
he
knowl
edge of t
he debt
or
, a per
son
i
nt
e
r
e
st
e
di
nt
he f
ul
fil
l
mentoft
he obl
i
g
at
i
on pays,wi
t
houtpr
ej
udi
cet
ot
hee
ffect
s
ofconf
usi
onast
ot
hel
at
t
er
'
sshar
e;
(
i
i
)
Conv
ent
i
onal
/
Cont
r
act
ual(
Ar
t
.1301)
- Consent
oft
he3par
t
i
es(
ol
dcr
edi
t
or
,debt
or
andnew c
r
edi
t
or
)ar
er
equi
r
ed.
Ar
t
. 1301.
Conv
ent
i
onal
subr
ogat
i
on ofat
hi
r
d per
s
on r
equi
r
est
he
consentoft
heor
i
gi
nalpar
t
i
esand oft
he
t
hi
r
dpe
r
son.
Q: I
si
tpossi
bl
ef
ora cr
e
di
t
ort
o
t
r
ansf
er hi
s cr
e
di
t w/o cons
ent of t
he
debt
or
?
A:Yes.Butt
hi
si
snotnovat
i
onbu
anassi
gnmentofr
i
ght
sunderAr
t
.1624.
Assi
gnmenti
sal
s
o a novat
i
on but
muchsi
mpl
e
r
.Buti
snotsubr
ogat
i
on.
(
1)Ki
nds
(
a)Legal
Ar
t
. 1302. I
ti
s pr
esumed t
hat
t
her
ei
sl
eg
alsubr
ogat
i
on:
(
1)When a cr
edi
t
or pay
s anot
her
cr
edi
t
orwhoi
spr
ef
er
r
ed,e
v
en wi
t
houtt
he
debt
or
'
sknowl
edge;
(
2) When a t
hi
r
d per
son, not
i
nt
e
r
e
st
e
di
nt
heobl
i
gat
i
on,payswi
t
ht
he
e
xpr
essort
aci
tappr
ov
aloft
hedebt
or
;
(
3) When, ev
en wi
t
hout t
he
knowl
edge of t
he debt
or
, a per
son
i
nt
e
r
e
st
e
di
nt
he f
ul
fil
l
mentoft
he obl
i
g
at
i
on pays,wi
t
houtpr
ej
udi
cet
ot
hee
ffect
s
ofconf
usi
onast
ot
hel
at
t
er
'
sshar
e;
Ar
t
. 1177. The cr
edi
t
or
s, af
t
er
havi
ngpur
s
uedt
hepr
oper
t
yi
npos
sessi
on
oft
he debt
ort
o sat
i
sf
yt
hei
rcl
ai
ms,may
e
xe
r
c
i
se al
lt
he r
i
ght
s and br
i
ng al
lt
he
act
i
onsoft
hel
at
t
erf
ort
hes
amepur
pose,
save t
hos
e whi
c
h ar
e i
nhe
r
e
nt i
n hi
s
per
son;t
hey may al
so i
mpugn t
he act
s
whi
c
ht
hedebt
ormayhavedonet
ode
f
r
aud
t
hem.
(
Convent
i
onalRedempt
i
on)
Ar
t
. 1610. The c
r
e
di
t
or
s of t
he
v
endor cannot make use oft
he r
i
ght of
r
edempt
i
on agai
ns
tt
hev
endee,unt
i
laf
t
e
r
t
hey hav
e exhaust
e
dt
he pr
oper
t
y oft
he
v
endor
.
Ar
t
.1629. I
nc
aset
heassi
gnori
n
good f
ai
t
h shoul
d hav
e made hi
msel
f
r
esponsi
bl
ef
ort
hes
ol
v
encyoft
hedebt
or
,
and t
he cont
r
act
i
ng par
t
i
es shoul
d not
hav
e agr
e
ed upon t
he dur
at
i
on of t
he
l
i
abi
l
i
t
y
,i
tshal
ll
as
tf
oroney
earonl
y
,f
r
om
t
he t
i
me oft
he ass
i
gnmenti
ft
he per
i
od
hadal
r
e
adye
xpi
r
ed.
I
ft
he c
r
edi
t shoul
d be payabl
e
wi
t
hi
n at
er
m orpe
r
i
od whi
ch hasnoty
e
t
e
xpi
r
ed,t
he l
i
abi
l
i
t
y shal
lcease one y
ear
af
t
e
rt
hemat
ur
i
t
y
.
Ar
t
.2207.I
ft
hepl
ai
nt
i
ff'
spr
oper
t
y
has been i
nsur
ed, and he has r
ecei
ved
i
ndemni
t
yf
r
om t
hei
nsur
ancecompanyf
or
t
hei
nj
ur
yorl
ossar
i
si
ngoutoft
hewr
ong
or br
eac
h ofcont
r
actcompl
ai
ned of
,t
he
i
nsur
ancecompanyshal
lbes
ubr
ogat
e
dt
o
t
he r
i
ght
s of t
he i
nsur
ed agai
nst t
he
wr
ongdoerort
heper
son who hasvi
ol
at
ed
t
he cont
r
act
.I
ft
he amount pai
d by t
he
i
nsur
ance company does not f
ul
l
y cov
er
t
he i
nj
ur
y or l
oss, t
he aggr
i
e
ved par
t
y
shal
lbe ent
i
t
l
ed t
or
ecovert
he defici
ency
f
r
om t
hepe
r
sonc
ausi
ngt
hel
ossori
nj
ur
y
.
(
2)Effect
Ar
t
.1729. Those who put t
hei
r
l
aborupon orf
ur
ni
sh mat
e
r
i
al
sf
orapi
e
ce
ofwor
kunder
t
ake
n byt
hecont
r
act
orhave
an at
i
on agai
nst t
he owner up t
ot
he
amount owi
ng f
r
om t
he l
at
t
er t
o t
he
cont
r
act
oratt
het
i
met
hecl
ai
m i
smade.
Howev
er
,t
hef
ol
l
owi
ng shal
lnotpr
ej
udi
ce
t
he l
abor
e
r
s,empl
oyees and f
ur
ni
she
r
s of
mat
e
r
i
al
s
:
(
1)Payment
smadebyt
heowne
rt
o
t
hecont
r
ac
t
orbef
or
et
he
yar
edue;
(
2)Renunci
ai
onbyt
hecont
r
act
or
ofanyamountduehi
mf
r
om t
heowner
.
Thi
sar
t
i
cl
ei
ssubj
ectt
ot
he
pr
ovi
si
onsofspeci
all
aws.
(
Assi
gnmentofCr
edi
t
sandOt
he
r
I
ncor
por
e
alRi
ght
s)
Ar
t
. 1304. A cr
edi
t
or
,t
o whom
par
t
i
al payment has been made, may
e
xe
r
c
i
sehi
sr
i
ghtf
ort
her
emai
nde
r
,andhe
shal
lbe pr
e
f
er
r
ed t
ot
he per
son who has
been subr
ogat
e
di
n hi
s pl
ace i
n vi
r
t
ue of
t
hepar
t
i
alpaymentoft
hesamecr
edi
t
.
Ar
t
.1303.Subr
ogat
i
on t
r
ansf
er
st
o
t
he per
son subr
ogat
e
dt
he c
r
e
di
twi
t
h al
l
t
he r
i
ght
s t
her
e
t
o apper
t
ai
ni
ng, ei
t
her
agai
nst t
he de
bt
or or agai
ns
t t
hi
r
d
per
sons,bet
heyguar
ant
or
sorpossessor
s
ofmor
t
gages,subj
ectt
os
t
i
pul
at
i
on i
na
convent
i
onalsubr
ogat
i
on.
b. Passi
v
e Subj
ect
i
v
e Novat
i
on
(
Subst
i
t
ut
i
onoft
hedebt
or
)
Ar
t
.1293.Nov
at
i
onwhi
c
hconsi
s
t
s
i
nsubst
i
t
ut
i
ngane
w debt
ori
nt
hepl
aceof
t
he or
i
gi
nal one
, may be made e
v
en
wi
t
houtt
heknowl
edgeoragai
ns
tt
hewi
l
l
oft
hel
at
t
e
r
,butnotwi
t
houtt
heconsent
oft
hecr
edi
t
or
.Paymentbyt
henew debt
or
gi
v
eshi
mt
her
i
ght
sment
i
oned i
n ar
t
i
cl
es
1236and1237.
Ar
t
. 1236.
The
cr
edi
t
or i
s not bound t
o
accept
payment
or
per
f
or
mance by a t
hi
r
d
per
son who hasno i
nt
er
est
i
n t
he f
ul
fil
l
ment of t
he
obl
i
gat
i
on,unl
esst
he
r
ei
sa
s
t
i
pul
at
i
ont
ot
hecont
r
ar
y
.
Whoe
ver pays f
or
anot
he
r may demand f
r
om
t
he debt
or what he has
pai
d,e
xceptt
hati
fhepai
d
wi
t
hout t
he knowl
edge or
agai
nst t
he wi
l
l of t
he
debt
or
,he can r
ecoveronl
y
i
nsof
arast
he paymenthas
been benefici
al t
o t
he
debt
or
.
Ar
t
.1237. Whoe
ver
payson behal
foft
hedebt
or
wi
t
hout t
he knowl
edge or
agai
nstt
hewi
l
loft
hel
at
t
e
r
,
cannotcompelt
he cr
edi
t
or
t
o subr
ogat
e hi
m i
n hi
s
r
i
ght
s, suc
h as t
hose
ar
i
si
ng f
r
om a mor
t
gage
,
guar
ant
yorpenal
t
y
.
r
esp.Dual
an onl
yunder
t
ook ei
t
hert
opay
orel
se al
l
ow t
he l
and'
s bei
ng sol
di
ft
he
mor
t
gage cr
edi
t
or coul
d not or di
d not
obt
ai
n paymentf
r
om t
he pr
i
nci
paldebt
or
when t
he debt mat
ur
ed. Not
hi
ng el
se.
Cer
t
ai
nl
y
,t
he buy
er di
d not obl
i
gat
e
d
hi
msel
ft
o r
epl
ace t
he debor i
n t
he
pr
i
nci
palobl
i
gat
i
on,and hecoul
d notdo
soi
nl
aw w/ot
hecr
edi
t
or
'
sconsent
.(
Ar
t
.
1293)
The obl
i
g
at
i
on t
o di
sc
har
ge t
he
mor
t
gagei
ndebt
ednesst
her
ef
or
e,r
e
mai
ned
on t
he shoul
der
s oft
he or
i
gi
naldebt
or
s
and t
hei
r hei
r
s,pe
t
i
t
i
oner
s he
r
e
i
n,si
nce
t
he r
ecor
di
s de
voi
d of any e
vi
denc
e of
cont
r
ar
yi
nt
e
nt
.xxx
Ar
t
.1835.xxx
A par
t
ner
shi
pi
s di
schar
ged f
r
om
any e
xi
s
t
i
ng l
i
abi
l
i
t
y upon di
ssol
ut
i
on of
t
he par
t
ner
shi
p by an agr
eementt
ot
hat
effect be
t
ween hi
msel
f
,t
he par
t
ner
shi
p
cr
edi
t
or and t
he per
s
on or par
t
ne
r
shi
p
cont
i
nui
ng t
he busi
ness; and such
agr
e
ementmaybei
nf
er
r
edf
r
om t
hecour
se
of deal
i
ng be
t
ween t
he cr
e
di
t
or havi
ng
knowl
edge of t
he di
ssol
ut
i
on and t
he
per
son or par
t
ner
s
hi
p c
ont
i
nui
ng t
he
busi
ness.
Effectofi
nsol
v
encyofnew debt
or
Ar
t
.1294. I
ft
he subst
i
t
ut
i
on i
s
wi
t
houtt
heknowl
edgeoragai
ns
tt
hewi
l
l
oft
hedebt
or
,t
henew debt
or
'
si
nsol
v
ency
or nonf
ul
fil
l
mentoft
he obl
i
gat
i
on shal
l
notgi
ver
i
set
oanyl
i
abi
l
i
t
yon t
hepar
tof
t
heor
i
gi
naldebt
or
.
BALANE CASE:
RODRI
GUEZ V.REYES [
37 S 195] - By
buyi
ng t
he pr
oper
t
y cov
er
ed by TCT No.
48979 w/ not
i
ce t
hati
twas mor
t
g
ag
ed,
Ar
t
.1295. The i
nsol
vency oft
he
new debt
or
,whohasbeen pr
oposedbyt
he
or
i
gi
nal debt
or and accept
ed by t
he
cr
edi
t
or
,shal
lnotr
e
vi
vet
heact
i
on oft
he
l
at
t
er agai
nstt
he or
i
gi
nalobl
i
gor
,e
xcept
when s
ai
di
nsol
vencywasal
r
eadye
xi
st
i
ng
and ofpubl
i
cknowl
edge,orknown t
ot
he
debt
or
,whenhedel
egat
edhi
sdebt
.
Bal
ane: Passi
v
e Subj
ect
i
ve Novat
i
onAr
t
i
cl
es1293and1295
Ar
t
.1293t
al
ksofexpr
omi
ssi
on(
not
upon t
he ol
d debt
or
'
si
ni
t
i
at
i
v
e. I
tcoul
d
beupon t
hei
ni
t
i
at
i
veoft
hec
r
edi
t
ororof
t
henew debt
or
.
)
Ar
t
. 1295 t
al
ks of del
egac
i
on
(
c
hangeatt
heol
ddebt
or
'
si
ni
t
i
at
i
ve.
)
I
n expr
omi
ssi
on,t
hec
hangei
nt
he
per
son of t
he de
bt
or i
s not upon t
he
i
ni
t
i
at
i
veoft
heol
d debt
or
,whe
t
he
rornot
he g
ave hi
s consent
. As soon as a new
debt
orand cr
edi
t
oragr
e
e,novat
i
on t
akes
pl
ace.
I
n bot
h cases, t
he i
nt
e
nt of t
he
par
t
i
esmus
tbet
or
el
easet
heol
ddebt
or
.
What i
st
he di
ffer
ence i
n effect
be
t
weenexpr
omi
ssi
onanddel
egac
i
on?
I
n expr
omi
ssi
on,t
he r
el
easeoft
he
ol
d debt
ori
sabsol
ut
e(
ev
en i
fi
tt
ur
nsout
t
hatt
hene
w debt
ori
si
nsol
vent
.
)
I
ndel
egac
i
on,t
her
el
easeoft
heol
d
debt
ori
s notabsol
ut
e
. He may be hel
d
l
i
abl
e(
1) i
ft
he ne
w debt
orwas al
r
eady
i
nsol
v
entatt
het
i
meoft
hedel
egac
i
on;and
(
2) suc
hi
nsol
v
ency wasei
t
herknown t
o
t
heol
ddebt
ororofpubl
i
cknowl
edge.
Cases of expr
omi
ssi
on ar
e qui
t
e
r
ar
e.
EffectofNovat
i
on
Ar
t
. 1296. When t
he pr
i
nc
i
pal
obl
i
gat
i
on i
sext
i
ngui
shed i
n consequence
ofa novat
i
on,accessor
y obl
i
gat
i
ons may
subsi
stonl
yi
nsof
ar as t
he
y may be
nefit
t
hi
r
d per
sons who di
d not gi
ve t
hei
r
consent
.
Bal
ane: Effectofnovat
i
on ast
oaccessor
y
obl
i
gat
i
ons.
- Accessor
y obl
i
gat
i
ons may
subsi
stonl
yi
nsof
ar as t
he
y may be
nefit
t
hi
r
d per
sons who di
d not gi
ve t
hei
r
consent
,e
.
g.
,s
t
i
pul
at
i
onpourat
r
ui
Gener
alr
ul
e: I
n a novat
i
on,t
he
accesor
yobl
i
gat
i
oni
sext
i
ngui
shed.
Except
i
on: I
n an act
i
v
e subj
ect
i
v
e
novat
i
on, t
he guar
ant
or
s, pl
edgor
s
,
mor
t
gagor
sar
enotr
e
l
eased.
Look at Ar
t
. 1303, accessor
y
obl
i
gat
i
onsar
enote
xt
i
ngui
shed. Sot
her
e
i
s a confli
ct
. How do you r
e
sol
v
e?
Accor
di
ng t
o comment
at
or
s,Ar
t
.1303 i
s
ane
xcept
i
ont
oAr
t
.1296.
Ar
t
.1297. I
ft
hene
w obl
i
gat
i
on i
s
v
oi
d,t
heor
i
gi
naloneshal
lsubsi
s
t
,unl
ess
t
he par
t
i
es i
nt
e
nded t
hat t
he f
or
mer
r
el
at
i
on shoul
d be ext
i
ngui
shed i
n any
e
vent
.
Ar
t
.1298. Thenovat
i
on i
svoi
di
f
t
he or
i
gi
nal obl
i
gat
i
on was v
oi
d, except
when annul
mentmay becl
ai
med onl
y by
t
he debt
or
,or when r
at
i
ficat
i
on val
i
dat
e
s
act
swhi
char
ev
oi
dabl
e.
Ar
t
.1299.I
ft
heor
i
gi
nalobl
i
gat
i
on
wassubj
ectt
oa suspensi
v
e orr
esol
ut
or
y
condi
t
i
on, t
he ne
w obl
i
g
at
i
on shal
l be
under t
he same condi
t
i
on, unl
ess i
ti
s
ot
her
wi
ses
t
i
pul
at
e
d.