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Obligations and contracts pdf
Operations Management and TQM (Silliman University)
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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 engageorr
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
est
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: Obser
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
st
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 have 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
st
i
csofanObl
i
gat
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
y a ver
b. Li
t
er
al
l
y obl
i
gar
e means
"
t
obi
ndsecur
el
y
.
"I
nt
heear
l
yRomanl
aw,
t
he l
aw on obl
i
gat
i
ons cont
ai
ned a l
i
t
er
al
meani
ng. I
t meant bei
ng "
bound i
n
chai
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 have t
he debt
or
pl
acedi
n chai
nsandsol
dt
osl
aver
yi
nt
he
mar
ke
tpl
ace f
ort
hr
ee 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 chopped i
nt
o pi
eces and f
ed t
ot
he
fishesi
nt
her
i
verorsol
dt
osl
aver
yacr
oss
t
heTi
ber
.Li
t
t
l
ebyl
i
t
t
l
e,t
hesever
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
n chai
ns.
" Rat
her
,
obl
i
gat
i
on wasl
ooked upon as"
bi
ndi
ngi
n
l
aw.
"Thel
aw hasnow beenhumani
z
ed.
1. I
tr
epr
esent
s an excl
usi
vel
y pr
i
vat
e
i
nt
er
est
2. I
t cr
eat
es t
i
es t
hat ar
e by nat
ur
e
t
r
ansi
t
or
y
3. I
ti
nvol
ves t
he power t
o make t
he
j
ur
i
di
cal t
i
e effect
i
ve i
n case of nonf
ul
fil
l
ment
t
hr
ough
an
economi
c
equi
val
ent obt
ai
ned f
r
om t
he debt
or
'
s
pat
r
i
mony
.
Li
nes ofDevel
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
semphasi
z
ed r
at
her
t
han t
hef
or
m. Spi
r
i
t
ual
i
z
edmeans"
made
abst
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
equi
r
ed st
r
i
ct
compl
i
ancew/f
or
mf
orval
i
di
t
y
.
Ar
t
. 1156. An obl
i
gat
i
on i
s a
j
ur
i
di
calnecessi
t
yt
ogi
ve,t
odoornott
o
do.
2.Thepr
i
nc
i
pl
eofaut
onomyofwi
l
li
snow
bei
ng si
gni
fic
ant
l
yr
est
r
i
c
t
ed ormodi
fied.
I
n Roman l
aw,t
he par
t
i
es can ent
eri
nt
o
anyagr
eementt
hatt
heywi
sh. Now,t
hey
can ent
eri
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
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cust
oms, publ
i
c or
der
, 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
ved,however
,t
hat t
hi
s wi
l
l gi
ve a
gr
eat
ert
endency f
ort
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
ormustanswerwi
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
lpr
oper
t
y of t
he
debt
orcan bel
evi
ed upon 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
her
e ar
e many)
w/car
eexempt
edf
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
her
e ar
e moves t
o st
andar
di
z
e
t
he r
ul
es on handl
i
ng goods, l
e
t
t
er
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
hese r
ul
es
uni
f
or
m.Thi
si
sbec.t
r
adewi
l
lal
waysfind
aconveni
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
ede
t
er
mi
ned at
t
het
i
meoft
heexecut
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 att
he const
i
t
ut
i
on oft
he
obl
i
gat
i
on and t
heot
hert
obede
t
er
mi
ned
subsequent
l
yi
n accor
dance w/ a cr
i
t
er
i
a
t
hati
spr
evi
ousl
yest
abl
i
shed.
c.An obl
i
gat
i
on i
nw/ct
hesubj
ect
i
s de
t
er
mi
ned i
n accor
dance w/ hi
s
r
el
at
i
on t
oat
hi
ngand t
her
ef
ori
tchanges
wher
et
het
hi
ngpassesf
r
om oneper
son t
o
anot
her
.
Thi
s i
s a pr
oper
t
yl
i
nked
obl
i
gat
i
on.
3. Obj
ec
toft
heobl
i
gat
i
on.
- Thi
sr
ef
er
st
o
t
he conduct or act
i
vi
t
y t
hat must be
obser
ved byt
hedebt
or
. Theobj
ectoft
he
obl
i
gat
i
on i
sal
waysanact
i
vi
t
yorconduct
,
t
hepr
est
at
i
on.
Requi
si
t
esofanobj
ect
:
a.I
tmustbel
i
ci
t
.
b.I
tmustbepossi
bl
e.
c. I
t must be de
t
er
mi
nat
e or
de
t
er
mi
nabl
e.
d. I
tmusthavepecuni
ar
yval
ueso
t
hati
fnotper
f
or
med i
ti
s conver
t
ed i
nt
o
damages.
Essent
i
alEl
ement
sofanObl
i
gat
i
on:
1. Ac
t
i
ve Subj
ec
t
.
- Thi
sr
ef
er
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
ve
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
ef
er
st
ot
he
debt
orort
heobl
i
gor
.I
fyou wantt
obea
ci
vi
l
i
st
,debt
ori
sused i
n an obl
i
gat
i
on t
o
gi
vewhi
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
usaloft
hedebt
ort
oper
f
or
m,
t
he cr
edi
t
or can go t
o cour
t
. When a
per
son says"
Ipr
omi
set
opayyou when I
l
i
ke t
o,
"t
her
ei
s no obl
i
gat
i
on her
e bec.
t
her
ei
snovi
nc
ul
um j
ur
i
s
Al
lt
hese fir
st t
hr
ee f
our el
ement
s ar
e
agr
eedupon bycomment
at
or
sasessent
i
al
el
ement
s. The f
ol
l
owi
ng t
wo ar
e bei
ng
debat
ed.
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.
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6. For
m.
- Thi
si
scont
r
over
si
al
. Thi
si
s
accept
abl
e onl
y i
ff
or
m means some
mani
f
est
at
i
onoft
hei
nt
entoft
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
ssi
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 over
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
on asi
fi
ti
sonl
yoneoft
hem when
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. Yes,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
efivesour
cesofobl
gat
i
ons.Law i
s
bot
ht
heul
t
i
mat
eand a pr
oxi
mat
esour
ce
ofobl
i
gat
i
ons.
Sour
ces of Obl
i
gat
i
ons accor
di
ng t
o
SanchezRoman.
- Accor
di
ng t
o Sanchez
Roman, t
her
e ar
e onl
y 2 sour
ces of
obl
i
gat
i
ons: Law andAct
s. Thel
at
t
erar
e
f
ur
t
hercl
assi
fied,asf
ol
l
ows: (
1) l
i
ci
tact
s
cr
eat
ed by concur
r
ence of wi
l
l
s
(
cont
r
act
s)
;(
2) l
i
ci
tact
sei
t
hervol
unt
ar
y
or i
nvol
unt
ar
y w/o concur
r
ence ofwi
l
l
s
(
quasi
cont
r
act
)
;(
3) i
l
l
i
ci
t act
s of ci
vi
l
char
act
er w/c ar
e not puni
shabl
e,
vol
unt
ar
y or i
nvol
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
evol
unt
ar
y and ar
epuni
shabl
e by
l
aw (
cr
i
mes.
)
SAGRADA ORDEN VS.NACOCO [
91 P
503] - I
fdef
.
appel
l
ant(
NaCoCo)i
sl
i
abl
e
atal
l
,i
t
sobl
i
gat
i
onsmustar
i
sef
r
om any
oft
he 4 sour
ces ofobl
i
gat
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
er
ed i
nt
o t
he pr
emi
ses and
occupi
edi
tw/t
heper
mi
ssi
on oft
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
gence 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,such t
hatt
he Al
i
en Pr
op.
Cust
odi
an ori
t
sper
mi
t
t
ee(
def
.
appel
l
ant
)
maybehel
dr
esponsi
bl
ef
ort
hesupposed
i
l
l
egal
i
t
yoft
heoccupat
i
on oft
hepr
op.by
sai
d Tekkosho. The APA had t
he cont
r
ol
and admi
n.oft
hepr
op.notassuccessor
t
ot
hei
nt
er
est
soft
heenemyhol
deroft
he
t
i
t
l
e, t
he T. Tekkosho, but by expr
ess
pr
ovi
si
on ofl
aw. Nei
t
heri
si
tat
r
ust
eeof
t
hef
or
merowner
,t
hepl
t
ffappel
l
eeher
ei
n,
buta t
r
ust
ee oft
he US Govt
,i
ni
t
s own
r
i
ght
,t
ot
heexcl
usi
on of
,and agai
nstt
he
cl
ai
m ort
i
t
l
e of
,t
heenemy 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
ust
eeoft
heUS Govt
,w/
powert
odi
sposeofi
tbysal
eorot
her
wi
se,
as t
hough i
t wer
et
he absol
ut
e owner
.
Ther
ef
or
e,even i
fdef
.wer
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
d owner
,but
t
het
heUSGovt
.
Bal
ane: I
st
heenumer
at
i
on i
n Ar
t
.1157
excl
usi
veormer
el
yi
l
l
ust
r
at
i
ve? Thesense
t
hatt
hecaseofSagr
adaOr
den t
el
l
susi
s
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t
hat t
he enumer
at
i
o i
s excl
usi
ve. I
n
r
esol
vi
ng t
he i
ssue of whe
t
her t
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
gat
i
on t
o pay r
ent
al
s, t
hat
obl
i
gat
i
onmustar
i
sef
r
om ei
t
heroft
hefive
(
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
cat
i
on oft
hi
sr
ul
i
ngi
st
hat
,t
hesefive
(
5)ar
et
heonl
ysour
cesofobl
i
gat
i
ons.
Thepr
obl
em w/Ar
t
.1157i
st
hati
t
mi
ght not cover al
l si
t
uat
i
ons. For
exampl
e: Car
al
e uses Dove as hi
s soap.
He t
hen hear
s an adver
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
eFeb.29,1996.So,
Car
al
e st
opped usi
ng Dove and st
ar
t
ed
usi
ngTi
de.Hewasabl
et
oconsumeal
l30
wr
apper
son Feb.29,1996. Het
hen went
t
o Pr
oct
or& Gambl
e(
P & G)t
o exchange
t
he30Ti
dewr
apper
sf
orat
umbl
er
. ButP
&Gt
ol
d Car
al
et
hatt
hei
rt
umbl
er
sr
un
out ofst
ock. Car
al
e cont
r
act
ed a ski
n
al
l
er
gyasar
esul
tofusi
ngTi
dei
nt
aki
nga
bat
h. Thequest
i
on i
s: DoesP & G have
anyobl
i
gat
i
on t
oCar
al
e. I
fwel
ookatAr
t
.
1157,t
hi
ssi
t
uat
i
on doesnotf
al
li
n anyof
t
he five sour
ces. So,we know have a
pr
obl
em. The Ger
man Ci
vi
lCode (
BGB)
cover
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
er
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
ewar
df
ort
he per
f
or
mance ofan act
,i
n
par
t
i
cul
arf
ort
hepr
oduct
i
on ofar
esul
t
,i
s
bound t
opayar
ewar
dt
oanyper
son who
hasper
f
or
med t
heact
,even i
fhedi
d not
actwi
t
havi
ew t
ot
her
ewar
d.
Not
e:
We now have a DTI
r
egul
at
i
on cover
i
ngt
hi
ssi
t
uat
i
on. Thi
si
s
an admi
ni
st
r
at
i
ve r
egul
at
i
on w/c has t
he
f
or
ceofl
aw. Buti
twoul
dhavebeen be
t
t
er
t
o have pl
aced t
hi
sr
ul
ei
n al
aw r
at
her
t
hani
namer
eadmi
ni
st
r
at
i
ver
egul
at
i
on.
Ar
t
i
cl
es 1158 -1162 speci
f
yt
he gener
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
ved
f
r
om l
aw ar
e not pr
esumed.Onl
yt
hose
expr
essl
y de
t
er
mi
ned i
nt
hi
s Code or i
n
speci
all
awsar
edemandabl
e,and shal
lbe
r
egul
at
edbyt
hepr
ecept
soft
hel
aw whi
ch
est
abl
i
shed 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
ceofl
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: Ther
ear
et
wopar
t
si
n Ar
t
.1159.
The fir
stpar
ti
st
hatobl
i
gat
i
ons der
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
.
) Thesecond
par
ti
st
hatt
her
e mustbe 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
scust
omer
sf
or
t
he damages caused t
he cust
omer
'
s car
,
w/c had been ent
r
ust
ed i
nt
oi
t
s cust
ody
.
Pl
t
ff. t
her
ef
or
e was i
n l
aw j
ust
i
fied i
n
maki
nggood such damagesandr
el
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 such
undi
sput
ed 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
eachoft
hei
rcont
r
act
.
Ar
t
.1160.Obl
i
gat
i
onsder
i
vedf
r
om
quasi
cont
r
act
s shal
l be subj
ect t
ot
he
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pr
ovi
si
onsofChapt
er1,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 shal
lbe gover
ned
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
yTi
t
l
e,
on Human Rel
at
i
ons,and ofTi
t
l
eXVI
I
Iof
t
hi
sBook,r
egul
at
i
ngdamages.
Ar
t
.
2177.
Responsi
bi
l
i
t
y f
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
st
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
gence under t
he
PenalCode.Butt
hepl
ai
nt
i
ff
cannot r
ecover 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
vedf
r
om
quasi
del
i
ct
s shal
l be gover
ned by t
he
pr
ovi
si
ons ofChapt
er2,Ti
t
l
eXVI
Ioft
hi
s
Book,andbyspeci
all
aws.
Bal
ane: The Code Commi
ssi
on di
d not
chooset
ouset
or
t
. Thi
si
sbec.t
or
tdoes
not exact
l
y have t
he same meani
ng as
quasi
del
i
ct
. Tor
tcover
si
nt
ent
i
onalt
or
t
s
w/c i
n quasi
del
i
cti
s consi
der
ed as ci
vi
l
l
i
abi
l
i
t
y ar
i
si
ng f
r
om act
s or omi
ssi
ons
puni
shabl
ebyl
aw. Ther
ear
esomequasi
del
i
ct
sw/car
enotcover
ed byt
or
t
. Dean
Bocobo suggest
ed t
heanci
entt
er
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
ed by one agai
nst t
he ot
her
r
egar
di
ngt
hear
eacover
edbyt
hecont
r
act
.
I
f you l
ook at Ar
t
. 2176, you ge
tt
he
i
mpr
essi
on t
hati
ft
her
ei
sa cont
r
actbe
t
.
t
hepar
t
i
es,t
hepar
t
i
escannotbel
i
abl
ef
or
quasi
del
i
ct on an ar
ea cover
ed by t
he
cont
r
act
. The case ofCangco has not
r
eal
l
yr
esol
vet
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
encei
nconceptbe
t
.cont
r
actand
quasi
del
i
cti
st
hati
nacont
r
act
,t
her
ei
sa
pr
eexi
st
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
cal t
i
e.
Jur
i
di
calt
i
ei
snotbor
nebyavi
ol
at
i
on.I
n
quasi
del
i
ct
,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 concent
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
vercan be sued
undercul
pa cont
r
act
ual
. Thi
si
s wr
ong.
The dr
i
vercannotbe sued as he has no
pr
i
vi
t
yofcont
r
actw/t
hepassenger
.
]
So,t
hequest
i
on now i
s:I
si
tpossi
bl
et
hat
even i
ft
her
ei
sacont
r
actbe
t
.t
hepar
t
i
es,
a quasi
del
i
ct can st
i
l
lbe commi
t
t
ed by
one agai
nstt
he ot
herr
egar
di
ng t
he ar
ea
cover
edbyt
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
neaBusCo.
,Mol
i
nai
sa
dr
i
verofone oft
he buses ofAl
i
nea Bus
Co. Lagdameo r
odet
hebusbei
ng dr
i
ven
by Mol
i
na. As a r
esul
t oft
he r
eckl
ess
dr
i
vi
ng of Mol
i
na, Lagdameo suffer
ed
i
nj
ur
i
es. I
nt
hi
s case,Lagdameo has a
choi
ce- he can sue on ei
t
hercont
r
act
,
quasi
del
i
ctoron cr
i
me. I
fhedeci
ded t
o
sue on t
he br
each 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
enceoft
hecont
r
act
)and t
hati
twas
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lOMoARcPSD|22267210
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
ver
. Thedef
enseoft
hedr
i
verwoul
d be
di
l
i
gence i
n dr
i
vi
ng (
or f
or
t
ui
t
ous event
.
)
Thedef
enseoft
hecommon car
r
i
erwoul
d
be di
l
i
gence i
n t
he sel
ect
i
on and
super
vi
si
onofempl
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 hasbeen sent
enced t
o pay
ci
vi
ll
i
abi
l
i
t
y
,t
heempl
oyer(
Al
i
neaBusCo.
)
i
s subsi
di
ar
i
l
y l
i
abl
e.
I
f Mol
i
na i
s
i
nsol
vent
,Al
i
neaBusCo.wi
l
lpay
.
whom hedesi
gnat
esorper
mi
t
st
or
un i
t
,
wher
et
hecari
soccupi
ed and bei
ngused
att
het
i
meoft
hei
nj
ur
yf
ort
hepl
easur
eof
ot
hermember
soft
heowner
'
sf
ami
l
yt
han
t
hechi
l
ddr
i
vi
ngi
t
.
Not
i
ce t
hatt
he choi
ce ofcause of
act
i
on wi
l
lde
t
er
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
hequest
i
onofwhom t
osue.
Ar
t
. 2175. Any per
son who i
s
const
r
ai
ned t
o pay t
he t
axes ofanot
her
shal
lbe ent
i
t
l
ed t
or
ei
mbur
sement f
r
om
t
hel
at
t
er
.
Agai
n,r
emembert
hati
nt
hi
scase,
t
hevi
ct
i
m hasachoi
ce. Pr
ovi
ded t
hathe
i
sconsi
st
entw/ hi
st
heor
y and pr
ovi
ded,
f
ur
t
her
,t
hathe cannot r
ecover damages
t
wi
cef
ort
hesamei
nj
ur
y
.
Not
e: Ther
ei
sst
i
l
la br
ewi
ngcont
r
over
sy
amongci
vi
l
i
st
sw/r
egar
dt
ot
hi
squest
i
on.
Thi
si
sonl
ymyopi
ni
on.
GUTI
ERREZVS.GUTI
ERREZ [
56P177]One G,a passengeri
n at
r
uck,r
ecover
s
damagesi
nt
heamountofP5,
000f
r
om t
he
ownerofapvt
.aut
omobi
l
enoti
nt
hecar
,
t
he machi
ne bei
ng oper
at
ed by a son 18
yr
s.ofage,w/ot
hermember
soft
hef
ami
l
y
accomadat
ed t
her
ei
n, and f
r
om t
he
chauffeur and owner of t
he t
r
uck w/c
col
l
i
ded w/ t
he pvt
. 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
schi
l
dr
en,
A.Quasi
Cont
r
act
s
Ar
t
. 2142.
Cer
t
ai
n l
awf
ul
,
vol
unt
ar
y and uni
l
at
er
alact
s gi
ve r
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
ust
l
y
enr
i
ched or benefit
ed at t
he expense of
anot
her
.
Ar
t
.22.Ever
yper
son whot
hr
ough
an actofper
f
or
mance by anot
her
,orany
ot
her means, acqui
r
es or comes i
nt
o
possessi
on ofsome
t
hi
ngatt
heexpenseof
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.Evenwhenanactorevent
causi
ngdamaget
oanot
her
'
spr
oper
t
ywas
notdue t
ot
he f
aul
tornegl
i
gence oft
he
def
endant
,t
he l
at
t
er shal
l be l
i
abl
ef
or
i
ndemni
t
yi
ft
hr
ough t
he actoreventhe
wasbenefit
t
ed.
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 Gest
i
o
Ar
t
. 2144. Whoever vol
unt
ar
i
l
y
t
akeschar
geoft
heagencyormanagement
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of t
he busi
ness or pr
oper
t
y of anot
her
,
wi
t
hout any power f
r
om t
he l
at
t
er
,i
s
obl
i
ged t
o cont
i
nue t
he same unt
i
lt
he
t
er
mi
nat
i
on oft
heaffai
randi
t
si
nci
dent
s,
or t
or
equi
r
et
he per
son concer
ned t
o
subst
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
nei
t
heroft
hesei
nst
ances:
(
1)When t
hepr
oper
t
y orbusi
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
stcase,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 shal
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
her wi
t
hout bei
ng
aut
hor
i
z
ed by t
he l
at
t
er
,or
unl
esshehasbyl
aw ar
i
ght
t
or
epr
esenthi
m.
A cont
r
act ent
er
ed
i
nt
oi
nt
henameofanot
her
by one who has no
aut
hor
i
t
y
or
l
egal
r
epr
esent
at
i
on,or who has
act
ed beyond hi
s power
s,
shal
l be unenf
or
ceabl
e,
unl
ess i
t i
s r
at
i
fied,
expr
essl
y or i
mpl
i
edl
y
, by
t
heper
son on whosebehal
f
i
thasbeen execut
ed,bef
or
e
i
ti
sr
evoked by t
he ot
her
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
er
ed
i
nt
oi
nt
henameofanot
her
per
sonbyonewhohasbeen
gi
ven no aut
hor
i
t
y orl
egal
r
epr
esent
at
i
on,or who has
act
edbeyondhi
spower
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
herofa f
ami
l
y
,and
pay t
hedamages whi
ch t
hr
ough hi
sf
aul
t
ornegl
i
gencemaybesuffer
edbyt
heowner
of t
he pr
oper
t
y or busi
ness under
management
.
The cour
t
s may
,however
,i
ncr
ease
or moder
at
et
he i
ndemni
t
y accor
di
ng t
o
t
heci
r
cumst
ancesofeachcase.
Ar
t
.2146. I
ft
heoffici
ousmanager
del
egat
est
oanot
herper
son al
lorsomeof
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
er t
owar
dt
he
owneroft
hebusi
ness.
The r
esponsi
bi
l
i
t
y oft
wo or mor
e
offici
ous manager
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
nent
danger
.
Ar
t
.2147. The offici
ous manager
shal
lbel
i
abl
ef
oranyf
or
t
ui
t
ousevent
:
(
1) I
f he under
t
akes r
i
sky
oper
at
i
ons whi
ch t
he owner was not
accust
omedt
oembar
kupon;
(
2) I
f he has pr
ef
er
r
ed hi
s own
i
nt
er
estt
ot
hatoft
heowner
;
(
3)I
fhef
ai
l
st
or
e
t
ur
nt
hepr
oper
t
y
orbusi
nessaf
t
erdemandbyt
heowner
;
(
4)I
fheassumed t
hemanagement
i
nbadf
ai
t
h.
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Ar
t
. 2148. Except when t
he
management was assumed t
o save t
he
pr
oper
t
y or busi
ness f
r
om i
mmi
nent
danger
,t
he offici
ous manager shal
l be
l
i
abl
ef
orf
or
t
ui
t
ousevent
s:
(
1)I
fhei
smani
f
est
l
yunfitt
ocar
r
y
ont
hemanagement
;
(
2) I
f by hi
s i
nt
er
vent
i
on he
pr
event
ed a mor
e compe
t
entper
son 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
heeffect
sofan expr
essagency
,
even i
ft
he busi
ness may nothave been
successf
ul
.
Ar
t
.2150.Al
t
hough t
he offici
ous
managementmaynothavebeen expr
essl
y
r
at
i
fied, t
he owner 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
er
est
, and shal
l
r
ei
mbur
se t
he offici
ous manager f
or t
he
necessar
yandusef
ulexpensesandf
ort
he
damages whi
ch t
he l
at
t
er may have
suffer
edi
nt
heper
f
or
manceofhi
sdut
i
es.
The same obl
i
gat
i
on shal
l be
i
ncumbent upon hi
m
when t
he
management had f
or i
t
s pur
pose t
he
pr
event
i
on ofan i
mmi
nentand mani
f
est
l
oss,al
t
hough no benefitmay have been
der
i
ved.
Ar
t
.2151. Even t
hough t
heowner
di
d notder
i
ve any benefitand t
her
e has
been noi
mmi
nentand mani
f
estdangert
o
t
he pr
oper
t
y or busi
ness, t
he owner i
s
l
i
abl
e asundert
hefir
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
heowner
.
Ar
t
.2152. The offici
ous manager
i
sper
sonal
l
yl
i
abl
ef
orcont
r
act
swhi
ch he
hasent
er
ed i
nt
o wi
t
ht
hi
r
d per
sons,even
t
hough heact
edi
nt
henameoft
heowner
and t
hi
r
d per
sons.Thesepr
ovi
si
ons shal
l
notappl
y:
(
1)I
ft
he owner has expr
essl
y or
t
aci
t
l
yr
at
i
fiedt
hemanagement
,or
(
2) When t
he cont
r
act r
ef
er
st
o
t
hi
ngs per
t
ai
ni
ng t
o t
he owner of t
he
busi
ness.
Ar
t
. 2153. The management i
s
ext
i
ngui
shed:
(
1)When t
heownerr
epudi
at
esi
tor
put
sanendt
her
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. Whoever
vol
unt
ar
i
l
yt
akes char
ge of
t
he agency ormanagement
oft
hebusi
ness orpr
oper
t
y
of anot
her
, wi
t
hout any
power f
r
om t
he l
at
t
er
,i
s
obl
i
ged t
o cont
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
ned
t
o
subst
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
yori
nsol
vencyoft
heownerort
he
offici
ousmanager
.
(
2)Fi
nderofLostPr
oper
t
y
Ar
t
. 2171.
The r
i
ght
s and
obl
i
gat
i
ons oft
he finder ofl
ostper
sonal
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pr
oper
t
yshal
lbegover
ned byar
t
i
cl
es719
and720.
Ar
t
. 719. Whoever
finds a movabl
e, whi
ch i
s
nott
r
easur
e,mustr
e
t
ur
ni
t
t
oi
t
s pr
evi
ous possessor
.I
f
t
he l
at
t
er i
s unknown,t
he
finder shal
l i
mmedi
at
el
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 shal
lbe
publ
i
cl
y announced by t
he
mayor f
or t
wo consecut
i
ve
weeksi
nt
hewayhedeems
best
.
I
f t
he
movabl
e
cannot be kept wi
t
hout
de
t
er
i
or
at
i
on,orwi
t
houtt
he
expenses
whi
ch
consi
der
abl
y di
mi
ni
sh i
t
s
val
ue, i
t shal
l be sol
d at
publ
i
c auct
i
on ei
ght days
af
t
ert
hepubl
i
cat
i
on.
Si
xmont
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
finderand t
he owner shal
l
beobl
i
ged,ast
hecasemay
be, t
o r
ei
mbur
se t
he
expenses.
Ar
t
. 720. I
ft
he
owner shoul
d appear i
n
t
i
me,heshal
lbeobl
i
ged t
o
pay
, as a r
ewar
d t
o t
he
finder
,onet
ent
h oft
hesum
oroft
he pr
i
ce oft
he t
hi
ng
f
ound.
Ar
t
. 2172. The r
i
ght of ever
y
possessori
n good f
ai
t
ht
or
ei
mbur
sement
f
or necessar
y and usef
ul expenses i
s
gover
nedbyar
t
i
cl
e546.
Ar
t
.546. Necessar
y
expenses shal
lbe r
ef
unded
t
oever
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
hesamer
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
ef
undi
ng t
he
amountoft
he expenses or
of payi
ng t
he i
ncr
ease i
n
val
ue whi
ch t
he t
hi
ng may
have acqui
r
ed by r
eason
t
her
eof
.
(
b)Payment
sbyThi
r
dPer
sons
Ar
t
.2173. When a t
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
son who hasno i
nt
er
esti
n
t
he f
ul
fil
l
ment of t
he obl
i
gat
i
on, unl
ess
t
her
ei
sast
i
pul
at
i
ont
ot
hecont
r
ar
y
.
Whoever pays f
or anot
her may
demandf
r
om t
hedebt
orwhathehaspai
d,
except t
hat i
f he pai
d wi
t
hout t
he
knowl
edgeoragai
nstt
hewi
l
loft
hedebt
or
,
hecanr
ecoveronl
yi
nsof
arast
hepayment
hasbeenbenefici
alt
ot
hedebt
or
.
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lOMoARcPSD|22267210
Ar
t
.1237. Whoeverpayson behal
f
oft
he debt
or wi
t
hout t
he knowl
edge or
agai
nstt
hewi
l
loft
hel
at
t
er
,cannotcompel
t
hecr
edi
t
ort
osubr
ogat
ehi
mi
n hi
sr
i
ght
s
such 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
vedwhen t
her
ei
snor
i
ghtt
odemand
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
heconst
r
uct
i
on orappl
i
cat
i
on
ofa doubt
f
ulordi
fficul
tquest
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
hert
hedebtwasdue,hemay
r
ecoveri
fhepr
ovest
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
edormoneypai
dbel
ongst
oat
hi
r
d
per
son,t
he payee 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.
Never
t
hel
ess,shoul
d
he di
scover t
hat t
he t
hi
ng
hasbeen st
ol
en andwhoi
t
s
t
r
ue owner i
s, he must
advi
se t
he l
at
t
er of t
he
deposi
t
.
I
ft
heowner
,i
n spi
t
e
of such 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
esponsi
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
hedeposi
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
ed
byt
hedeposi
t
or
,t
hef
or
mer
mayr
e
t
ur
nt
hesame.
Ar
t
.2159. Whoever i
n bad f
ai
t
h
accept
san unduepayment
,shal
lpayl
egal
i
nt
er
esti
fa sum ofmoney i
si
nvol
ved,or
shal
lbel
i
abl
ef
orf
r
ui
t
sr
ecei
ved orwhi
ch
shoul
d have been r
ecei
ved i
ft
he t
hi
ng
pr
oducesf
r
ui
t
s.
Heshal
lf
ur
t
her
mor
ebeanswer
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
ed t
het
hi
ng,unt
i
li
ti
s
r
ecover
ed.
Ar
t
.2160. He who i
n good f
ai
t
h
accept
sanunduepaymentoft
hi
ngcer
t
ai
n
and de
t
er
mi
nat
eshal
lonl
yber
esponsi
bl
e
f
ort
hei
mpai
r
mentorl
ossoft
hesameor
i
t
s accessor
i
es and accessi
ons i
nsof
aras
he has t
her
eby been benefit
ed.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
ocol
l
ectt
hesum.
Ar
t
. 2161.
As r
egar
ds t
he
r
ei
mbur
sement f
or i
mpr
ovement
s and
expenses i
ncur
r
ed by hi
m who undul
y
r
ecei
vedt
het
hi
ng,t
hepr
ovi
si
onsofTi
t
l
eV
ofBookI
Ishal
lgover
n.
Ar
t
.2162.Heshal
lbeexemptf
r
om
t
heobl
i
gat
i
on t
or
es
t
or
ewho,bel
i
evi
ng i
n
good f
ai
t
ht
hat t
he payment was bei
ng
madeofal
egi
t
i
mat
eandsubsi
st
i
ngcl
ai
m,
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lOMoARcPSD|22267210
dest
r
oyed t
he document
, or al
l
owed t
he
act
i
on t
opr
escr
i
be,orgaveupt
hepl
edges,
orcancel
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
egar
dt
o whom t
he act
i
on i
s st
i
l
l
effect
i
ve.
Ar
t
. 2163. I
ti
s pr
esumed t
hat
t
her
e was a mi
st
ake i
nt
he payment i
f
some
t
hi
ng whi
ch had neverbeen due or
had al
r
eady been pai
d was del
i
ver
ed;but
hef
r
om whom t
her
e
t
ur
ni
scl
ai
med may
pr
ove t
hatt
he del
i
ver
y was made outof
l
i
ber
al
i
t
yorf
oranyot
herj
ustcause.
(
1)Di
st
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
gat
i
ons gi
ve a r
i
ght of
act
i
on t
o compel t
hei
r per
f
or
mance.
Nat
ur
alobl
i
gat
i
ons,not bei
ng based on
posi
t
i
vel
aw butonequi
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 vol
unt
ar
y
f
ul
fil
l
mentby t
he obl
i
gor
,t
hey aut
hor
i
z
e
t
her
e
t
ent
i
onofwhathasbeendel
i
ver
edor
r
ender
ed byr
eason t
her
eof
.Somenat
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
ext
i
nct
i
ve pr
escr
i
pt
i
on, t
he obl
i
gor who
vol
unt
ar
i
l
y per
f
or
ms t
he cont
r
actcannot
r
ecoverwhathehasdel
i
ver
ed ort
heval
ue
oft
heser
vi
cehehasr
ender
ed.
Ar
t
. 1425. When wi
t
hout t
he
knowl
edgeoragai
nstt
hewi
l
loft
hedebt
or
,
at
hi
r
d per
son pays a debt whi
ch t
he
obl
i
gori
snotl
egal
l
yboundt
opaybecause
t
heact
i
on t
her
eon haspr
escr
i
bed,butt
he
debt
or l
at
er vol
unt
ar
i
l
y r
ei
mbur
ses t
he
t
hi
r
d per
son,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 vol
unt
ar
i
l
y per
f
or
ms t
he
obl
i
gat
i
on,hecannotdemandt
her
e
t
ur
nof
whathe has del
i
ver
ed ort
he paymentof
t
heval
ueoft
heser
vi
cehehasr
ender
ed.
Ar
t
. 1429. When a t
est
at
e or
i
nt
est
at
ehei
rvol
unt
ar
i
l
ypaysadebtoft
he
decedent exceedi
ng t
he val
ue of t
he
pr
oper
t
y whi
ch he r
ecei
ved by wi
l
lorby
t
hel
aw ofi
nt
est
acyf
r
om t
heest
at
eoft
he
deceased,t
hepaymenti
sval
i
dandcannot
ber
esci
ndedbyt
hepayer
.
Ar
t
.1430. When awi
l
li
sdecl
ar
ed
voi
d because i
thas notbeen execut
ed i
n
accor
dancewi
t
ht
hef
or
mal
i
t
i
esr
equi
r
edby
l
aw,butoneoft
hei
nt
est
at
ehei
r
s,af
t
ert
he
se
t
t
l
ementoft
he debt
s oft
he deceased,
paysal
egacyi
n compl
i
ancewi
t
h acl
ause
i
n t
he def
ect
i
ve wi
l
l
,t
he payment i
s
effect
i
veandi
r
r
evocabl
e.
Ar
t
.1960. I
ft
he bor
r
ower pays
i
nt
er
est when t
her
e has been no
st
i
pul
at
i
on t
her
ef
or
,t
hepr
ovi
si
ons oft
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
er
estshal
lbedue
unl
essi
thasbeen expr
essl
yst
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
er
estoft
hepubl
i
c
(
1)Suppor
t
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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
venbyast
r
anger
,t
hel
at
t
er
shal
lhavear
i
ghtt
ocl
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
heper
son obl
i
ged
t
o gi
ve suppor
t
.Thi
s Ar
t
i
cl
e shal
lappl
y
par
t
i
cul
ar
l
ywhent
hef
at
herormot
herofa
chi
l
d under t
he age ofmaj
or
i
t
y unj
ust
l
y
r
ef
usest
osuppor
torf
ai
l
st
ogi
vesuppor
t
t
ot
hechi
l
dwhenur
gent
l
yneeded.(
I
d.
)
(
3)Funer
alexpenses
Ar
t
.2165. When f
uner
alexpenses
ar
e bor
ne by a t
hi
r
d per
son,wi
t
houtt
he
knowl
edge of t
hose r
el
at
i
ves who wer
e
obl
i
ged t
o gi
ve suppor
tt
ot
he deceased,
sai
dr
el
at
i
ves shal
lr
ei
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 per
son
obl
i
gedt
osuppor
tanor
phan,orani
nsane
orot
heri
ndi
gentper
son unj
ust
l
yr
ef
uses
t
o gi
ve suppor
tt
ot
he l
at
t
er
,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 suppor
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 year
s ofage unj
ust
l
yr
ef
uses t
o
suppor
thi
m.
Ar
t
.2165. When f
uner
alexpenses
ar
e bor
ne by a t
hi
r
d per
son,wi
t
houtt
he
knowl
edge of t
hose r
el
at
i
ves who wer
e
obl
i
ged t
o gi
ve suppor
tt
ot
he deceased,
sai
dr
el
at
i
ves shal
lr
ei
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
egul
at
i
onr
epr
oper
t
y
Ar
t
.2169. When t
hegover
nment
,
upon t
he f
ai
l
ur
eofany per
son t
o compl
y
wi
t
h heal
t
h or saf
e
t
y r
egul
at
i
ons
concer
ni
ngpr
oper
t
y
,under
t
akest
odot
he
necessar
ywor
k,evenoverhi
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
ustr
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
venbyast
r
anger
,t
hel
at
t
er
shal
lhavear
i
ghtt
ocl
ai
m t
hesamef
r
om
t
hef
or
mer
,unl
essi
tappear
st
hathegave
i
twi
t
houti
nt
ent
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
vesuppor
twhen ur
gent
l
yneeded
byt
hel
at
t
er
,anyt
hi
r
dper
son mayf
ur
ni
sh
Ar
t
. 2167. When t
hr
ough an
acci
dentorot
hercauseaper
soni
si
nj
ur
ed
orbecomesser
i
ousl
yi
l
l
,and hei
st
r
eat
ed
orhel
pedwhi
l
ehei
snoti
n acondi
t
i
on t
o
gi
ve consent t
o a cont
r
act
,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
her per
son ai
di
ng hi
m,
unl
esst
heser
vi
ceshasbeen r
ender
edout
ofpur
egener
osi
t
y
.
Ar
t
. 2168. When dur
i
ng a fir
e,
flood,s
t
or
m,orot
hercal
ami
t
y
,pr
oper
t
yi
s
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lOMoARcPSD|22267210
saved f
r
om dest
r
uct
i
on byanot
herper
son
wi
t
houtt
he knowl
edge oft
he owner
,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. When i
n a smal
l
communi
t
yamaj
or
i
t
yoft
hei
nhabi
t
ant
sof
agedeci
deupon a measur
ef
orpr
ot
ect
i
on
agai
nstl
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
o t
he
expenses buti
s benefit
t
ed by t
he pr
oj
ect
asexecut
edshal
lbel
i
abl
et
opayhi
sshar
e
ofsai
dexpenses.
Ar
t
.2170. When by acci
dent or
ot
herf
or
t
ui
t
ousevent
,movabl
essepar
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 causesdamaget
oanot
her
,t
her
e
bei
ngf
aul
tornegl
i
gence,i
sobl
i
ged t
opay
f
or t
he damage done. Such f
aul
t or
negl
i
gence, i
ft
her
e i
s no pr
eexi
st
i
ng
cont
r
act
ualr
el
at
i
onbe
t
weent
hepar
t
i
es,i
s
cal
l
edaquasi
del
i
ctandi
sgover
nedbyt
he
pr
ovi
si
onsoft
hi
sChapt
er
.
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
ecoverdamagest
wi
cef
ort
hesameactor
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'
sown 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
sdeat
h
ori
ncapaci
t
y
,t
he mot
her
,ar
er
esponsi
bl
e
f
or t
he damages caused by t
he mi
nor
chi
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 manager
s ofan
est
abl
i
shment or ent
er
pr
i
se ar
el
i
kewi
se
r
esponsi
bl
ef
or damages caused by t
hei
r
empl
oyeesi
nt
heser
vi
ceoft
hebr
anchesi
n
whi
ch t
he l
at
t
er ar
e empl
oyed or on t
he
occasi
onoft
hei
rf
unct
i
ons.
Empl
oyer
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
gned t
asks,even t
hough t
he
f
or
merar
enotengagedi
n anybusi
nessor
i
ndust
r
y
.
The St
at
ei
sr
esponsi
bl
ei
n l
i
ke
manner when i
t act
st
hr
ough a speci
al
agent
;butnotwhen t
hedamagehasbeen
caused by t
he offici
alt
o whom t
he t
ask
donepr
oper
l
yper
t
ai
ns,i
nwhi
chcasewhat
i
s pr
ovi
ded i
n ar
t
i
cl
e 2176 shal
l be
appl
i
cabl
e.
Last
l
y
, t
eacher
s or heads of
est
abl
i
shment
sofar
t
sandt
r
adesshal
lbe
l
i
abl
ef
ordamages caused 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
rcust
ody
.
Ther
esponsi
bi
l
i
t
yt
r
eat
edofi
nt
hi
s
ar
t
i
cl
e shal
l cease when t
he per
sons
her
ei
nment
i
onedpr
ovet
hatt
heyobser
ved
al
lt
hedi
l
i
genceofagoodf
at
herofaf
ami
l
y
t
opr
eventdamage.
Ar
t
.2182. I
ft
he mi
norori
nsane
per
son causi
ngdamagehasnopar
ent
sor
guar
di
an,t
hemi
norori
nsaneper
sonshal
l
beanswer
abl
ewi
t
hhi
sown pr
oper
t
yi
nan
act
i
on agai
nsthi
m wher
e a guar
di
an ad
l
i
t
em shal
lbeappoi
nt
ed.
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Ar
t
.2194.Ther
esponsi
bi
l
i
t
yoft
wo
ormor
eper
sonswho 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
oral
lt
he cl
ai
ms ofl
abor
er
s and ot
her
s
empl
oyed byhi
m,and oft
hi
r
d per
sonsf
or
deat
h or physi
cal i
nj
ur
i
es dur
i
ng t
he
const
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
ed by a
passengeron accountoft
hewi
l
f
ulact
sor
negl
i
gence of ot
her passenger
s or of
st
r
anger
s, i
f t
he common car
r
i
er
'
s
empl
oyees t
hr
ough t
he exer
ci
se of t
he
di
l
i
genceofagoodf
at
herofaf
ami
l
ycoul
d
have pr
event
ed or s
t
opped t
he act or
omi
ssi
on.
Ar
t
. 218.
The school
, i
t
s
admi
ni
st
r
at
or
s and t
eacher
s, or t
he
i
ndi
vi
dual
,ent
i
t
y or i
nst
i
t
ut
i
ons engaged
i
n chi
l
d car
e shal
lhave speci
alpar
ent
al
aut
hor
i
t
yandr
esponsi
bi
l
i
t
yovert
hemi
nor
chi
l
d whi
l
e under t
hei
r super
vi
si
on,
i
nst
r
uct
i
onorcust
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
her
i
nsi
de or out
si
de t
he pr
emi
ses of t
he
schoolent
i
t
yori
nst
i
t
ut
i
on.(
Fami
l
yCode.
)
exer
ci
sed t
he pr
oper di
l
i
gence r
equi
r
ed
undert
hepar
t
i
cul
arci
r
cumst
ances.
Al
lot
hercasesnotcover
ed byt
hi
s
and t
he pr
ecedi
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
ved
f
r
om l
aw ar
e not pr
esumed.Onl
yt
hose
expr
essl
y de
t
er
mi
ned i
nt
hi
s Code or i
n
speci
all
awsar
edemandabl
e,and shal
lbe
r
egul
at
edbyt
hepr
ecept
soft
hel
aw whi
ch
est
abl
i
shest
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
woormor
eper
sonsar
e
obl
i
ged t
o gi
ve i
t
,shal
lbe made i
nt
he
f
ol
l
owi
ngor
der
:
(
1)Fr
om t
hespouse;
(
2)Fr
om t
he descendant
s of t
he
near
estdegr
ee;
(
3)Fr
om t
he ascendant
s,al
so of
t
henear
estdegr
ee;
(
4)Fr
om t
hebr
ot
her
sandsi
st
er
s.
Among
descendant
s
and
ascendant
st
he or
der i
n whi
ch t
hey ar
e
cal
l
ed t
ot
he i
nt
est
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
der of
i
nt
est
at
esuccessi
on
Ar
t
.219.Thosegi
vent
heaut
hor
i
t
y
and r
esponsi
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 caused by t
he act
s or
omi
ssi
ons of t
he unemanci
pat
ed mi
nor
.
The par
ent
s, j
udi
ci
al guar
di
ans or t
he
per
sonsexer
ci
si
ngpar
ent
alaut
hor
i
t
yover
sai
dmi
norshal
lbesubsi
di
ar
i
l
yl
i
abl
e.
The r
espect
i
ve l
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
lnotappl
yi
fi
ti
s pr
oved t
hatt
hey
Ar
t
.199. Whenever t
wo or mor
e
per
sonsar
eobl
i
gedt
ogi
vesuppor
t
,
t
hel
i
abi
l
i
t
yshal
ldevol
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
est
degr
ee;
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lOMoARcPSD|22267210
(
3)The ascendant
si
nt
he near
est
degr
ee;
(
4) The br
ot
her
s and si
st
er
s.
(
Fami
l
yCode.
)
Ar
t
.448. Theowneroft
hel
andon
whi
ch anyt
hi
ng has been bui
l
t
,sown,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 orpl
ant
i
ng,af
t
erpaymentoft
he
i
ndemi
ni
t
ypr
ovi
dedf
ori
nar
t
i
cl
es546and
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
ce oft
he l
and,and
t
he one who sowed, t
he pr
oper r
ent
.
However
,t
hebui
l
derorpl
ant
ercannotbe
obl
i
ged t
o buy t
he l
and i
fi
t
s val
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
easonabl
er
ent
,i
ft
he owner oft
he
l
and does notchoose 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
esshal
lagr
eeupon t
het
er
msof
t
hel
easeand i
n caseofdi
sagr
eement
,t
he
cour
tshal
lfixt
het
er
mst
her
eof
.
Ar
t
.546. Necessar
y
expenses shal
lbe r
ef
unded
t
oever
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
hesamer
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
ef
undi
ng t
he
amountoft
he expenses or
of payi
ng t
he i
ncr
ease i
n
val
ue whi
ch t
he t
hi
ng may
have acqui
r
ed by r
eason
t
her
eof
.
Ar
t
.548. Expenses
f
or pur
e l
uxur
y or mer
e
pl
easur
e shal
l not be
r
ef
undedt
ot
hepossessori
n
good f
ai
t
h; but he may
r
emove t
he or
nament
s wi
t
h
whi
ch he has embel
l
i
shed
t
he pr
i
nci
pal t
hi
ng i
fi
t
suffer
s no i
nj
ur
yt
her
eby
,
and i
fhi
s successori
nt
he
possessi
on does not pr
ef
er
t
o r
ef
und t
he amount
expended.
Ar
t
.636. Easement
s est
abl
i
shed
byl
aw i
nt
hei
nt
er
estofpr
i
vat
eper
sonsor
f
orpr
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 ofgener
alorl
ocall
aws
andor
di
nancesf
ort
hegener
alwel
f
ar
e.
These easement
s may be modi
fied
by agr
eement of t
he i
nt
er
est
ed par
t
i
es,
whenevert
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 a gameofchance.
Butany l
oser i
n a game ofchance may
r
ecoverhi
sl
ossf
r
om t
hewi
nner
,wi
t
hl
egal
i
nt
er
estf
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
ceofl
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.
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lOMoARcPSD|22267210
Ar
t
.1306. Thecont
r
act
i
ngpar
t
i
es
may est
abl
i
sh such st
i
pul
at
i
ons,cl
auses,
t
er
ms and condi
t
i
ons as t
hey may deem
conveni
ent
,pr
ovi
dedt
heyar
enotcont
r
ar
y
t
ol
aw,mor
al
s,goodcust
oms,publ
i
cor
der
,
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 shal
lbe gover
ned
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
yTi
t
l
e,
on Human Rel
at
i
ons,and ofTi
t
l
eXVI
I
Iof
t
hi
sBook,r
egul
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.
- Ever
yper
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
est
or
at
i
on, r
epar
at
i
on f
or damages,
i
ndemni
ficat
i
on f
orconsequent
i
aldamages
and act
i
on t
o demand t
he same -Upon
whom i
tdevol
ves.-Theobl
i
gat
i
on t
omake
r
est
or
at
i
on orr
epar
at
i
on f
ordamagesand
i
ndemni
ficat
i
on f
orconsequent
i
aldamages
devol
ves upon t
he hei
r
s of t
he per
son
l
i
abl
e.
The act
i
on t
o demand r
es
t
or
at
i
on,
r
epar
at
i
on, and i
ndemni
ficat
i
on l
i
kewi
se
descends t
o t
he hei
r
s of t
he per
son
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
yext
i
ngui
shed:
1. Byt
hedeat
h oft
heconvi
ct
,as
t
o t
he per
sonal penal
t
i
es; and as t
o
pecuni
ar
y penal
t
i
es, l
i
abi
l
i
t
yt
her
ef
or i
s
ext
i
ngui
shed onl
y when t
he deat
h oft
he
offenderoccur
sbef
or
efinalj
udgment
.
2.Byser
vi
ceoft
hesent
ence;
3. By amnest
y
,whi
ch compl
e
t
el
y
ext
i
ngui
shest
hepenal
t
yandal
li
t
seffect
s;
4.Byabsol
ut
epar
don;
5.Bypr
escr
i
pt
i
onoft
hecr
i
me;
6.Bypr
escr
i
pt
i
onoft
hepenal
t
y;
7. Byt
hemar
r
i
ageoft
heoffended
woman,aspr
ovi
ded i
n Ar
t
i
cl
e344 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 offender
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
si
onsof
t
hi
spar
agr
aph shal
lal
sobe
appl
i
cabl
e t
o t
he copr
i
nci
pal
s,accompl
i
cesand
accessor
i
es af
t
ert
hef
actof
t
he
abovement
i
oned
cr
i
mes.(
I
d.
)
Bal
ane: Cr
i
measasour
ceofobl
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
hem. Thi
sunder
l
i
nest
het
woaspect
s
i
n acr
i
me: one,asan offenseagai
nstt
he
st
at
e,and t
wo as an offense agai
nstt
he
vi
ct
i
m. I
ti
si
nt
he l
at
t
ercase t
hatci
vi
l
l
i
abi
l
i
t
yi
sr
ecover
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.
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(
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
on t
ogi
ve;(
2)obl
i
gat
i
on t
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
ve.
)
Ki
nds of per
f
or
mance.
- (
1) spec
i
fic
per
f
or
manc
e(
per
f
or
mance by t
he debt
or
hi
msel
f
)
; (
2)
subst
i
t
ut
e per
f
or
manc
e
(
per
f
or
manceatt
heexpenseoft
hedebt
or
)
;
(
3) equi
val
ent per
f
or
manc
e (
gr
ant of
damages.
)
Ar
t
i
cl
es 1163 -1166 cover obl
i
gat
i
on t
o
gi
ve.
Thr
eeAccessor
yObl
i
gat
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.
- Todel
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.
- Todel
i
veraccessi
onsand
accessor
i
es.
Ar
t
.1163. Ever
yper
son obl
i
ged t
o
gi
vesome
t
hi
ngi
sal
soobl
i
ged t
ot
akecar
e
ofi
twi
t
ht
he pr
operdi
l
i
gence ofa good
f
at
herofa f
ami
l
y
,unl
ess t
he l
aw ort
he
st
i
pul
at
i
on oft
hepar
t
i
esr
equi
r
esanot
her
st
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
verar
i
ses. However
,he
shal
lhave no r
ealr
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
ghtovert
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
nstt
he whol
e wor
l
d. He
has onl
yt
he per
sonalr
i
ght agai
nst t
he
debt
orw/r
egar
dt
ot
heundel
i
ver
edf
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 mer
e
agr
eement
,butby del
i
ver
y
,i
s owner
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
ver ar
i
ses
wher
east
her
ealr
i
ghtdoesnotar
i
seunt
i
l
act
ualdel
i
ver
y
.
Ar
t
i
cl
es1165-1167.
- Remedi
esAvai
l
abl
e
t
o t
he Cr
edi
t
or (
speci
fic per
f
or
mance,
subst
i
t
ut
e
per
f
or
mance,
equi
val
ent
per
f
or
mance.
)
A.I
nobl
i
gat
i
onst
ogi
ve
1. Ade
t
er
mi
nat
et
hi
ng
a.Speci
ficper
f
or
mance
b.Equi
val
entper
f
or
mance
2.A gener
i
ct
hi
ng,al
lr
emedi
esar
e
avai
l
abl
e
B. I
n an obl
i
gat
i
on t
o do, make a
di
st
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
entper
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.subst
i
t
ut
eper
f
or
mance
b.equi
val
entper
f
or
mance
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Not
e t
hat i
n obl
i
gat
i
ons t
o do,
speci
ficper
f
or
mancei
snotavai
l
abl
e. The
r
easonf
ort
hi
si
st
hatspeci
ficper
f
or
mance
wi
l
lgi
ver
i
set
oi
nvol
unt
ar
yser
vi
t
ude.
C.Obl
i
gat
i
onnott
odo
1.subst
i
t
ut
eper
f
or
mance
2.equi
val
entper
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
socl
ai
m
damat
es.
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
ed
hi
m by ar
t
i
cl
e 1170, may compel t
he
debt
or
kt
omaket
hedel
i
ver
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
heexpenseoft
hedebt
or
.
I
f t
he obl
i
gor del
ays, or has
pr
omi
sed t
odel
i
vert
hesamet
hi
ngt
ot
wo
ormor
eper
sonswhodonothavet
hesame
i
nt
er
est
,he shal
lbe r
esponsi
bl
ef
or any
f
or
t
ui
t
ous eventunt
i
lhe has effect
ed t
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 accessi
ons and accessor
i
es,
even t
hough t
hey may not have been
ment
i
oned.
Ar
t
.1167.I
faper
sonobl
i
gedt
odo
some
t
hi
ngf
ai
l
st
odoi
t
,t
hesameshal
lbe
execut
edathi
scost
.
Thi
ssamer
ul
eshal
lbeobser
vedi
f
hedoesi
ti
n cont
r
avent
i
on oft
het
enorof
t
he obl
i
gat
i
on. Fur
t
her
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
ngandt
heobl
i
gordoes
whathasbeen f
or
bi
dden hi
m,i
tshal
lal
so
beundoneathi
sexpense.
Ar
t
i
cl
es 1169 - 1174.
- I
r
r
egul
ar
i
t
y of
Per
f
or
mance.
Bal
ane:
TwoCl
assesofI
r
r
egul
ar
i
t
yofPer
f
or
mance:
I
.At
t
r
i
but
abl
et
ot
hedebt
or
A.Fr
aud
B.Negl
i
gence
C.Del
ay
I
I
.Notat
t
r
i
but
abl
et
ot
hedebt
or
A.For
t
ui
t
ousevent
.
Ar
t
.1169. Thoseobl
i
ged t
odel
i
ver
ort
odosome
t
hi
ngi
ncuri
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
hem t
hef
ul
fil
l
mentoft
hei
r
obl
i
gat
i
on.
However
, t
he demand by t
he
cr
edi
t
or shal
lnot be necessar
yi
n or
der
t
hatdel
aymayexi
st
:
(
1)When t
heobl
i
gat
i
on ort
hel
aw
expr
essl
ysodecl
ar
e;
(
2)When f
r
om t
he nat
ur
eand t
he
ci
r
cumst
ancesoft
heobl
i
gat
i
on i
tappear
s
t
hatt
hedesi
gnat
i
on oft
het
i
mewhen t
he
t
hi
ngi
st
obedel
i
ver
edort
heser
vi
cei
st
o
be r
ender
ed was a cont
r
ol
l
i
ng mot
i
ve f
or
t
heest
abl
i
shmentoft
hecont
r
act
;
(
3) When demand woul
d be
usel
ess,aswhen t
heobl
i
gorhasr
ender
ed
i
tbeyondhi
spowert
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
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par
t
i
esf
ul
fil
l
shi
sobl
i
gat
i
on,del
aybyt
he
ot
herbegi
ns.
Bal
ane:
When doesdel
ayse
ti
n?- Del
ayse
t
si
ni
n
t
hef
ol
l
owi
ngmanner
:
1.
For Reci
pr
ocal si
mul
t
aneous
obl
i
gat
i
ons.
- by t
he r
eadi
ness ofone of
t
hepar
t
i
est
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. ForReci
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
heexcept
i
onsar
ef
oundi
nAr
t
.
1169,par
.2.
)Thi
si
scal
l
edmor
asol
vendi
exr
e
What ki
nd of demand i
s necessar
y?Judi
ci
alorext
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
hecont
r
act
says t
hatw/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. Ther
e
must be some
t
hi
ng i
nt
he cont
r
act w/c
expl
i
ci
t
l
ys
t
at
es t
hat t
he demand i
s not
necessar
yi
nor
dert
hatdel
aymayse
ti
n.
(
2) When f
r
om t
he nat
ur
e and t
he
c
i
r
c
umst
anc
es oft
he obl
i
gat
i
on i
tappear
s
t
hatt
hedesi
gnat
i
on oft
he t
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
heest
abl
i
shmentoft
hec
ont
r
ac
t
.
I
l
l
ust
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 wasdel
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
ver
st
he gown. xxx El
l
a sues
I
nno f
orbr
each. I
nno says t
her
ewasno
demand. I
nt
hi
s case, demand i
s not
necessar
yi
nor
dert
hatdel
aymayexi
st
.
(
3)When demand woul
d be usel
ess,as
when t
he obl
i
gorhas r
ender
ed i
tbeyond
hi
spowert
oper
f
or
m.
-Exampl
ei
st
hecase
ofChavezv
.Gonz
al
es,i
nf
r
a.
BALANE CASES:
165 S 1] - Ther
e
AGCAOI
LIVS.GSI
S [
wast
hen a per
f
ect
ed 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
chasebyAgcaoi
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
eci
pr
ocal
l
y demand per
f
or
mance. I
t
was,t
o besur
e,t
hedut
y oft
heGSI
S,as
sel
l
er
,t
o del
i
ver t
he t
hi
ng sol
d i
n a
condi
t
i
on sui
t
abl
ef
ori
t
senj
oymentbyt
he
buyer f
or t
he pur
pose cont
empl
at
ed, i
n
ot
herwor
ds,t
odel
i
vert
hehousesubj
ectof
t
hecont
r
acti
n ar
easonabl
yl
i
vabl
est
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
nvoke
Agcoi
l
i
'
s suspensi
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.
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lOMoARcPSD|22267210
SSS VS. MOONWALK [
221 S 119] Requi
si
t
es i
n or
dert
hatdebt
orma be i
n
def
aul
t
;Nec
essi
t
y ofdemand.
- To be i
n
def
aul
t"
xxxi
sdi
ffer
entf
r
om mer
edel
ayi
n
t
hegr
ammat
i
calsense,bec.i
ti
nvol
vest
he
begi
nni
ng ofaspeci
alcondi
t
i
on ors
t
at
us
w/c has i
t
s own pecul
i
ar effect
s or
r
esul
t
s.
"I
n or
dert
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 gener
al
l
y begi
ns
f
r
om t
hemomentt
hecr
edi
t
ordemandst
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
herdi
di
t
show t
hat pe
t
i
t
i
oner demanded t
he
payment oft
he st
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
hatSSS t
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
ecl
osi
ng t
he r
ealest
at
e
mor
t
gagesexecut
ed byMoonwal
ki
nf
avor
ofSSS. Butt
hi
sf
or
ecl
osur
edi
d notpush
t
hr
ough upon Moonwal
k'
sr
equest
s and
pr
omi
sest
opayi
nf
ul
l
. Thenextdemand
f
or payment happened on Oct
.1,1979
when SSS i
ssued a St
at
ementofAccount
t
oMoonwal
k. And i
n accor
dancew/ sai
d
st
at
ement
,Moonwal
k pai
di
t
sl
oan i
nf
ul
l
.
Whati
scl
ear
,t
her
ef
or
e,i
st
hatMoonwal
k
was never i
n def
aul
t bec. SSS never
compel
l
edper
f
or
mance.
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 mannercont
r
avene 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 cer
t
ai
n
bank
r
equi
r
ement
swhi
ch i
nabi
l
i
t
yheknew 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
eachofcont
r
act
.
UnderAr
t
.1170,notonl
y debt
or
s
gui
l
t
y off
r
aud,negl
i
gence ordef
aul
tbut
al
soever
ydebt
or
,i
n gener
al
,whof
ai
l
st
he
per
f
or
manceofhi
sobl
i
gat
i
on i
sbound t
o
i
ndemni
f
y f
or t
he l
osses and damages
causedt
her
eby
.
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
hest
r
i
ctandf
ai
t
hf
ulf
ul
fil
l
mentof
t
he obl
i
gat
i
on,or ever
y ki
nd ofdef
ect
i
ve
per
f
or
mance.
Bal
ane: Thi
sphr
asei
sa cat
chal
l
pr
ovi
si
on. Atwor
st
,i
ti
sasuper
flui
t
y
. At
best
,t
her
ei
sasaf
e
t
yne
tj
usti
ncaset
her
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
genceor
del
ay
.I
nt
hi
scase,t
heSC wasappar
ent
l
y
notsur
e as t
o whatcat
egor
yt
he br
each
f
el
l
. Thi
s phr
ase i
s not r
eal
l
y an
i
ndependentgr
ound.
TELEFASTVS.CASTRO [
158s445] - I
n
t
he case at bar
, pe
t
i
t
i
oner and pr
i
vat
e
r
espondentSofiaC.Cr
ouch ent
er
edi
nt
oa
cont
r
act wher
eby
,f
or a f
ee, pe
t
i
t
i
oner
under
t
ook t
o send sai
d pr
i
vat
e
r
espondent
'
s message over
seas by
t
el
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
char
ges. Pe
t
i
t
i
onerwast
her
ef
or
egui
l
t
yof
cont
r
aveni
ng i
t
sobl
i
gat
i
on t
o sai
d pr
i
vat
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
ybec
.i
t
snegl
i
genc
ewast
he
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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
esoft
heAngatDam onl
y
att
hehei
ghtoft
yphoon"
Wel
mi
ng"wheni
t
knew ver
y wel
lt
hati
twas saf
ert
o have
opened t
hesamegr
adual
l
yand ear
l
i
er
,as
i
twasal
so undeni
abl
et
hatNPC knew of
t
hecomi
ngoft
het
yphoon atl
east4 days
bef
.i
tact
ual
l
y st
r
uck. And even t
hough
t
het
yphoon wasan actofGodorwhatwe
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.
Aswehavesai
di
nJuanNakpi
l& Sonsvs.
CA,144SCRA596,
Thus,i
fupon t
he happeni
ng ofa
f
or
t
ui
t
ous eventor an actofGod,t
her
e
concur
s
a
cor
r
espondi
ng
f
r
aud,
negl
i
gence, del
ay or vi
ol
at
i
on or
cont
r
avent
i
on i
n anymanneroft
het
enor
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
tmust
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
ect
,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
emoved f
r
om t
he r
ul
es appl
i
cabl
et
ot
he
act
sofGod. Thus,i
thasbeen hel
dt
hat
when t
he negl
i
gence ofa per
son concur
s
w/anactofGodi
npr
oduci
ngal
oss,such
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
e cause oft
he
damagewast
heactofGod. Tobeexempt
f
r
om l
i
abi
l
i
t
yf
orl
ossbec
.ofanac
tofGod,
he must 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
er
ed i
nt
oa
cont
r
actwher
ebyf
oraf
eeRCPIunder
t
ook
t
o send t
he r
espondent
'
s message
over
seas.When,t
her
ef
or
e,r
esp.Rodr
i
guez
pai
d RCPIt
odel
i
verhi
smessageover
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
eneged on i
t
s obl
i
gat
i
on
when i
tf
ai
l
edt
odel
i
vert
hemessagesort
o
i
nf
or
m t
hesenderaboutt
henondel
i
ver
y
,
t
husmaki
ngi
tl
i
abl
ef
ordamages.
Fr
aud
Bal
ane: I
si
tcor
r
ectt
o say 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
hevol
unt
ar
yexecut
i
on ofa
wr
ongf
ulact
,orwi
l
l
f
ulomi
ssi
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 such act or
omi
ssi
on;t
hef
r
audr
ef
er
r
edt
oi
nAr
t
.1170
i
st
hedel
i
ber
at
eand i
nt
ent
i
onalevasi
on of
t
he nor
malf
ul
fil
l
ment ofobl
i
gat
i
on;i
ti
s
di
st
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
acki
ngi
nt
hel
at
t
er
.
Bal
ane: Fr
aud as used i
n Ar
t
.1170 i
s
di
ffer
entf
r
om f
r
audasacausef
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
event
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.
)
Q:Whati
sasynonym f
orf
r
audasusedi
n
Ar
t
.1170?
A:Mal
i
ce.
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lOMoARcPSD|22267210
Effect
sofFr
aud:
1. Cr
edi
t
or may i
nsi
st on per
f
or
mance,
speci
ficorsubst
i
t
ut
e(
Ar
t
.1233.
)
2. Cr
edi
t
or may r
esol
ve/ r
esci
nd (
Ar
t
.
1191.
)
3.Damagesi
nei
t
hercase(
Ar
t
.1170.
)
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
Del
ay i
s t
he nonf
ul
fil
l
ment of t
he
obl
i
gat
i
onw/r
espectt
ot
i
me.
ni
nedaysaf
t
err
ecei
pfoft
hecr
edi
tmemo.
Cl
ear
l
y
,pe
t
i
t
i
onerbank was r
emi
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
ghest degr
ee of car
e,
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
sofi
t
sdeposi
t
or
sw/
me
t
i
cul
ous car
e, whe
t
her such account
consi
st
sonl
yofaf
ew hundr
edpesosorof
mi
l
l
i
ons.I
tmustbeart
hebl
amef
orf
ai
l
i
ng
t
o di
scover t
he mi
st
ake of i
t
s empl
oyee
despi
t
e t
he est
abl
i
shed
pr
ocedur
e
r
equi
r
i
ng bank paper
st
o pass t
hr
ough
bank per
sonnelwhosedut
yi
ti
st
ocheck
andcount
er
checkt
hem f
orpossi
bl
eer
r
or
s.
Responsi
bi
l
i
t
y ar
i
si
ng f
r
om negl
i
gence i
n
t
heper
f
or
manceofever
yki
ndofobl
i
gat
i
on
i
sdemandabl
e.xxx
I
I
.Di
l
i
gencer
equi
r
ed
Ki
ndsofDel
ay:
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
hecr
edi
t
or
)
;
3.Compensat
i
onMor
ae-mut
ualdel
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
verofan 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
ever
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
egul
at
ed by t
he cour
t
s,accor
di
ng t
o
t
heci
r
cumst
ances.
Bal
ane:
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
st
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
cumst
ancesoft
heper
sons,of
t
het
i
meandoft
hepl
ace.Whennegl
i
gence
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.
Responsi
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
audi
s
voi
d.
METROBANK VS.CA [
237 S 761] - As
bor
neoutbyt
her
ecor
ds,t
hedi
shonor
i
ng
oft
he r
esp.
'
s checks commi
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
n cont
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
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lOMoARcPSD|22267210
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
each oft
heobl
i
gat
i
on,
and whi
ch t
hepar
t
i
es have
f
or
eseen or coul
d have
r
easonabl
yf
or
eseen at t
he
t
i
me t
he obl
i
gat
i
on was
const
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
ch 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:
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.
- Ther
ear
et
wo
gui
des:
(
1)
Di
l
i
gence demanded by
ci
r
cumst
ancesofper
son,pl
aceandt
i
me
(
2)Car
er
equi
r
edofagoodf
at
herof
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
equi
r
ed
i
st
hedi
l
i
genceofapr
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
st on per
f
or
mance,
speci
ficorsubst
i
t
ut
e(
Ar
t
.1233.
)
2. Cr
edi
t
or may r
esol
ve/ r
esci
nd (
Ar
t
.
1191.
)
3.Damagesi
nei
t
hercase(
Ar
t
.1170.
)
BALANE CASE:
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 def
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
sed t
he
di
l
i
genceofagoodf
at
herofaf
ami
l
y
.Ther
e
i
sno ar
gumentt
hati
ti
st
hedut
y oft
he
Ci
t
yofMl
a.t
oexer
ci
ser
easonabl
ecar
et
o
keept
hepubl
i
cmar
ke
tr
easonabl
ysaf
ef
or
peopl
e f
r
equent
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
sext
r
emel
ydi
fficul
tdur
i
ngs
t
or
ms
and floods,i
tmust
,however
,beadmi
t
t
ed
t
hator
di
nar
ypr
ecaut
i
onscoul
dhavebeen
t
akendur
i
nggoodweat
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
cumst
ances. Fori
nst
ance,t
he
dr
ai
nage hol
e coul
d have been pl
aced
undert
hest
al
l
si
nst
ead ofon t
hepassage
ways. Even mor
ei
mpor
t
anti
st
he f
act
,
t
hatt
he Ci
t
y shoul
d have seen t
oi
tt
hat
t
he openi
ngs wer
e cover
ed. Sadl
y
,t
he
evi
dence i
ndi
cat
es 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 uncover
ed,and 5 mos.af
t
er t
he
i
nci
denthappened,t
he openi
ng was st
i
l
l
uncover
ed. Mor
eover
, whi
l
e t
her
e ar
e
findi
ngs t
hat dur
i
ng floods t
he vendor
s
r
emovet
hei
r
on gr
i
l
l
st
ohast
en t
heflow of
wat
er
,t
her
e i
s no showi
ng t
hat such
pr
act
i
ce has ever been pr
ohi
bi
t
ed,much
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
eabout
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
nnkeeper
Ar
t
. 2000.
The r
esponsi
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
udet
hel
ossof
,ori
nj
ur
yt
ot
he
per
sonalpr
oper
t
yoft
heguest
scaused by
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t
heser
vant
sorempl
oyeesoft
hekeeper
sof
hot
el
sori
nnsaswel
lasbyst
r
anger
s;but
nott
hatwhi
ch maypr
oceedf
r
om anyf
or
ce
maj
eur
e. The f
act t
hat t
r
avel
l
er
s ar
e
const
r
ai
ned t
or
el
yon t
hevi
gi
l
anceoft
he
keeper of t
he hot
el
ss or i
nns shal
l be
consi
der
ed i
n de
t
er
mi
ni
ng t
he degr
ee of
car
er
equi
r
edofhi
m.
Ar
t
.2001. The actofa t
hi
efor
r
obber
,who has ent
er
ed t
he hot
eli
s not
deemed f
or
ce maj
eur
e,unl
ess i
ti
s done
wi
t
h t
he use 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 car
r
i
er
s,f
r
om
t
he nat
ur
e of t
hei
r busi
ness and f
or
r
easons of publ
i
c pol
i
cy
, ar
e bound t
o
obser
ve ext
r
aor
di
nar
y di
l
i
gence i
n t
he
vi
gi
l
anceovert
hegoodsand f
ort
hesaf
e
t
y
of t
he passenger
st
r
anspor
t
ed by t
hem,
accor
di
ngt
oal
lt
heci
r
cumst
ancesofeach
case.
Such ext
r
aor
di
nar
ydi
l
i
gencei
nt
he
vi
gi
l
ance over t
he goods i
s f
ur
t
her
expr
essed i
n ar
t
i
cl
es 1734, 1735, and
1745, Nos. 5, 6, and 7, whi
l
e t
he
ext
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
er
s ar
e
r
esponsi
bl
ef
or t
he l
oss, dest
r
uct
i
on, or
de
t
er
i
or
at
i
onoft
hegoods,unl
esst
hesame
i
sduet
oanyoft
hef
ol
l
owi
ngcausesonl
y:
(
1) Fl
ood, st
or
m, ear
t
hquake,
l
i
ght
ni
ng, or ot
her nat
ur
al di
sast
er or
cal
ami
t
y;
(
2)Actoft
hepubl
i
cenemyi
n war
,
whe
t
heri
nt
er
nat
i
onalorci
vi
l
;
(
3)Actoromi
ssi
on oft
he shi
pper
orowneroft
hegoods;
(
4)The char
act
er oft
he goods or
def
ect
si
nt
hepacki
ngori
nt
hecont
ai
ner
s;
(
5)Or
deroractofcompe
t
entpubl
i
c
aut
hor
i
t
y
.
C.LesseeofAgr
i
cul
t
ur
all
and
Ar
t
.1680.Thel
esseeshal
lhaveno
r
i
ghtt
oar
educt
i
on oft
her
enton account
oft
he s
t
er
i
l
i
t
y oft
he l
and l
eased,or by
r
eason oft
hel
ossoff
r
ui
t
sduet
oor
di
nar
y
f
or
t
ui
t
ous event
s;butheshal
lhavesuch
r
i
ghti
n caseofl
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 event
s,save al
ways
when t
her
ei
saspeci
ficst
i
pul
at
i
on t
ot
he
cont
r
ar
y
.
Ext
r
aor
di
nar
yf
or
t
ui
t
ousevent
sar
e
under
st
ood t
o be: fir
e, war
, pest
i
l
ence,
unusual flood, l
ocust
s, ear
t
hquake, or
ot
her
s whi
ch ar
e uncommon,and whi
ch
t
he cont
r
act
i
ng par
t
i
es coul
d not have
r
easonabl
yf
or
eseen.
I
I
I
.Lossduet
oFor
t
ui
t
ousEvent
s
Ar
t
. 1174.
Except i
n cases
expr
essl
y speci
fied by l
aw, or when i
t
ot
her
wi
sedecl
ar
edbyst
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 ofr
i
sk,no per
son shal
lbe
r
esponsi
bl
ef
ort
hose event
s whi
ch coul
d
notbef
or
eseen,orwhi
ch,
t
houghf
or
eseen,
wer
ei
nevi
t
abl
e.
Bal
ane:
Gener
al Rul
e: The happeni
ng of a
f
or
t
ui
t
ouseventexoner
at
est
hedebt
orf
r
om
l
i
abi
l
i
t
y
.
Except
i
ons:
1.When t
hel
aw sospeci
fies.
- e.
g.
,i
ft
he
debt
ori
sal
r
eadyi
n del
ay (
Ar
t
.1165,par
.
3.
)
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lOMoARcPSD|22267210
2.Whent
hepar
t
i
essoagr
ee
3. When t
he nat
ur
e of t
he obl
i
gat
i
on
r
equi
r
es t
he assumpt
i
on ofr
i
sk,e.
g.
,an
i
nsur
ancecont
r
act
.
BALANE CASES:
NAKPI
L & SONS VS.CA [
144 S 596] Requi
si
t
es f
orexempt
i
on f
r
om l
i
abi
l
i
t
y due
t
oan"
ac
tofGod.
"
- Toexemptt
heobl
i
gor
f
r
om l
i
abi
l
i
t
yunderAr
t
.1174,f
orabr
each
ofanobl
i
gat
i
on duet
oan"
actofGod,
"t
he
f
ol
l
owi
ngmustconcur
:
(
a) t
hecauseoft
hebr
each oft
he
obl
i
gat
i
on mustbei
ndependentoft
hewi
l
l
oft
hedebt
or
;
(
b) t
he event must be ei
t
her
unf
or
seeabl
eorunavoi
dabl
e;
(
c) t
he eventmustbe such as t
o
r
enderi
ti
mpossi
bl
ef
ort
hedebt
ort
of
ul
fil
l
hi
sobl
i
gat
i
oni
nanor
malmanner
;and
(
d)t
hedebt
ormustbef
eef
r
om any
par
t
i
ci
pat
i
on i
n, or aggr
avat
i
on of t
he
i
nj
ur
yt
ot
hecr
edi
t
or
.
Bal
ane:Someoft
heel
ement
swer
e
pr
esenti
nt
hi
scase.Whatwasabsentwas
t
hel
astel
ement
.
NAKPI
L & SONS VS.CA [
160 S 334] "
Onewho negl
i
gent
l
y cr
eat
esadanger
ous
condi
t
i
on cannot escape l
i
abi
l
i
t
yf
or t
he
nat
ur
al and pr
obabl
e consequences
t
her
eof
,al
t
hough t
heactofat
hi
r
dper
son,
or an act of God f
or w/c he i
s not
r
esponsi
bl
e,i
nt
er
venes t
o pr
eci
pi
t
at
et
he
l
oss.
"(
ci
t
i
ngTuckerv
.Mi
l
an,49OG 4379,
4380.
)
QUI
SI
MBI
NG VS.CA [
189S605]- PAL'
s
f
ai
l
ur
et
ot
ake c
er
t
ai
n st
eps t
hata c
er
t
ai
n
passenger i
n hi
ndsi
ght bel
i
eves shoul
d
have been t
aken i
s nott
he negl
i
genc
e or
mi
sc
onduc
tw/cmi
ngl
es w/ f
or
c
emaj
eur
e
as an ac
t
i
ve and c
ooper
at
i
ve c
ause.
- A
car
ef
ulanal
ysi
soft
her
ecor
di
nr
el
at
i
on t
o
t
hememor
andaandot
herpl
eadi
ngsoft
he
par
t
i
es, convi
nces t
hi
s Cour
t of t
he
cor
r
ect
nessoft
heessent
i
alconcl
usi
on of
bot
ht
het
r
i
alandappel
l
at
ecour
t
st
hatt
he
evi
dencedoesi
ndeedf
ai
lt
opr
oveanywant
otdi
l
i
gence on t
he par
tofPAL,or t
hat
,
mor
e speci
fical
l
y
,i
thad f
ai
l
ed t
o compl
y
wi
t
h appl
i
cabl
er
egul
at
i
ons,oruni
ver
sal
l
y
accept
ed and obser
ved pr
ocedur
es t
o
pr
ecl
udehi
j
acki
ng;andt
hatt
hepar
t
i
cul
ar
act
s si
ngl
ed out by t
he pe
t
i
t
i
oner
s as
supposedl
y demonst
r
at
i
ve of negl
i
gence
wer
e,i
nt
hel
i
ghtoft
heci
r
cumst
ances of
t
he case, not i
n t
r
ut
h negl
i
gent act
s
"
suffici
entt
o over
come t
he f
or
ce maj
eur
e
nat
ur
eoft
hear
med r
obber
y
.
" TheCour
t
qui
t
e agr
ees, t
oo, w/ t
he Appel
l
at
e
Tr
i
bunal
'
s wr
y obser
vat
i
on t
hat PAL'
s
f
ai
l
ur
e t
o t
ake cer
t
ai
n s
t
eps t
hat a
passenger i
n hi
ndsi
ght bel
i
eves shoul
d
have been t
aken i
s nott
he negl
i
gence or
mi
sconductw/cmi
ngl
esw/f
or
cemaj
eur
e
asanact
i
veandcooper
at
i
vecause.
"
BACHELOR EXPRESSVS.CA [
188S216]
- The r
unni
ng amuck oft
he passenger
wast
hepr
oxi
mat
ecauseoft
hei
nci
dentas
i
tt
r
i
gger
ed off a commot
i
on and pani
c
among t
he passenger
s such t
hat t
he
passenger
ss
t
ar
t
edr
unni
ngt
ot
hesol
eexi
t
shovi
ngeach ot
herr
esul
t
i
ngi
nt
hef
al
l
i
ng
off t
he bus by passenger
s Be
t
er and
Raut
r
autcausi
ng t
hem f
at
ali
nj
ur
i
es w/c
ki
l
l
ed t
hem. The sudden act of t
he
passengerwhost
abbed anot
herpassenger
i
nt
he bus i
s w/i
nt
he cont
ext off
or
c
e
maj
eur
e.
However
,i
n or
dert
hata common
car
r
i
er may be absol
ved f
r
om l
i
abi
l
i
t
yi
n
caseoff
or
c
emaj
eur
e,i
ti
snotenough t
hat
t
heacci
dentwascaused byf
or
c
emaj
eur
e.
Thec
ommon c
ar
r
i
ermustst
i
l
lpr
ovet
hati
t
was notnegl
i
genti
nc
ausi
ng t
he i
nj
ur
i
es
r
esul
t
i
ngf
r
om suc
hac
c
i
dent
.
Consi
der
i
ngt
hef
act
ualfindi
ngsof
t
he CAt
he bus dr
i
ver di
d not
i
mmedi
at
el
ys
t
op t
hebusatt
hehei
ghtof
t
hecommot
i
on;t
hebuswasspeedi
ngf
r
om
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lOMoARcPSD|22267210
af
ul
lst
op;t
he vi
ct
i
ms f
el
lf
r
om t
he bus
dor
rwhen i
twasopenedorgavewaywhi
l
e
t
he bus was st
i
l
lr
unni
ng;t
he conduct
or
pani
ckedandbl
ew hi
swhi
st
l
eaf
t
erpeopl
e
hadal
r
eadyf
al
l
enoff t
hebus;andt
hebus
was not pr
oper
l
y equi
pped w/ door
si
n
accor
dance w/ l
aw- i
ti
s cl
ear t
hat
pe
t
i
t
i
oner
s have f
ai
l
ed t
o over
come t
he
pr
esumpt
i
on off
aul
tand negl
i
gencef
ound
i
nt
hel
aw gover
ni
ngcommoncar
r
i
er
s.
The pe
t
i
t
i
oner
'
s ar
gumentt
hatt
he
pe
t
i
t
i
oner
s "
ar
e not i
nsur
er
s of t
hei
r
passenger
s"deser
ves no mer
i
ti
n vi
ew of
t
hef
ai
l
ur
eoft
hepe
t
i
t
i
oner
st
opr
ovet
hat
t
he deat
hs of t
he 2 passenger
s wer
e
excl
usi
vel
yduet
of
or
c
emaj
eur
eandnott
o
t
he f
ai
l
ur
e oft
he pe
t
i
t
i
oner
st
o obser
ve
ext
r
aor
di
nar
y di
l
i
gence i
n t
r
anspor
t
i
ng
saf
el
yt
he passenger
st
ot
hei
rdest
i
nat
i
on
aswar
r
ant
edbyl
aw.
NPC VS.CA [
222 S 415] - Pe
t
i
t
i
oner
s
cannotbehear
dt
oi
nvoket
heactofGodor
f
or
c
emaj
eur
et
oescapel
i
abi
l
i
t
yf
ort
hel
oss
or damage sust
ai
ned by t
he pvt
.
r
espondent
s si
nce t
hey
,t
he pe
t
i
t
i
oner
s,
wer
egui
l
t
yofnegl
i
gence. Theeventt
hen
wasnotoccasi
onedexcl
usi
vel
ybyanactof
God or f
or
c
e maj
eur
e;a human f
act
or
negl
i
gence or i
mpr
udencehad
i
nt
er
vened. The effectt
hen oft
he f
or
c
e
maj
eur
ei
n quest
i
on may be deemed t
o
have,even i
fonl
ypar
t
l
y
,r
esul
t
ed f
r
om t
he
par
t
i
ci
pat
i
on ofman. Thus,t
he whol
e
occur
ence was t
her
eby humani
z
ed,as i
t
wer
e, and r
emoved f
r
om t
he r
ul
es
appl
i
cabl
et
oact
sofGod.
SI
A VS. CA [
222 S 24] - SBTC'
s
negl
i
gence aggr
avat
ed t
he i
nj
ur
y or
damaget
ot
hepe
t
i
t
i
onerw/cr
esul
t
edf
r
om
t
he l
oss or i
nj
ur
y or damage t
o t
he
pe
t
i
t
i
oner w/c r
esul
t
ed f
r
om t
he l
oss or
dest
r
uct
i
on oft
hest
ampcol
l
ect
i
on. SBTC
wasawar
eoft
hefloodsof1985and1986;
i
t al
so knew t
hat t
he floodwat
er
s
i
nundat
ed t
he r
oom wher
e Saf
e Deposi
t
BoxNo.54wasl
ocat
ed. I
nvi
ew t
her
eof
,i
t
shoul
d havel
ostno t
i
me i
n not
i
f
yi
ng t
he
pe
t
i
t
i
oneri
n or
dert
hatt
heboxcoul
dhave
been oped t
or
e
t
r
i
eve t
he st
amps, t
hus
savi
ngt
hesamef
r
om f
ur
t
herde
t
er
i
or
at
i
on
and l
oss. I
n t
hi
sr
espect
,i
tf
ai
l
ed t
o
exer
ci
set
hr
easonabl
ecar
eand pr
udence
expect
ed of a good f
at
her of a f
ami
l
y
,
t
her
eby becomi
ng a par
t
y t
o t
he
aggr
avat
i
on of t
he i
nj
ur
y or l
oss.
Accor
di
ngl
y
,t
he af
or
ement
i
oned f
our
t
h
char
act
er
i
st
i
c(
t
hedebt
ormustbef
eef
r
om
anypar
t
i
ci
pat
i
on i
n,oraggr
avat
i
on oft
he
i
nj
ur
yt
ot
hecr
edi
t
or
)ofaf
or
t
ui
t
ousevent
i
sabsent
.xxx
NPC VS.CA [
223 S 649] - Pe
t
i
t
i
oner
s
haver
ai
sed t
hesamei
ssuesand def
enses
as i
nt
he 2 ot
her deci
ded cases t
her
ei
n
ment
i
oned. Pr
edi
ct
abl
y t
her
ef
or
e, t
hi
s
pe
t
i
t
i
on mustper
f
or
ce be di
smi
ssed bec.
t
hel
osses and damagessust
ai
ned byt
he
pr
i
vat
e r
esp.
'
s had been pr
oxi
mat
el
y
causedbyt
henegl
i
genceoft
hepe
t
i
t
i
oner
s,
al
t
hough t
he t
yphoon w/c pr
eceded t
he
floodi
ng coul
d be consi
der
ed as a f
or
c
e
maj
eur
e.
A.Except
i
ons
1.Expr
essPr
ovi
si
onofLaw
Deposi
t
ar
y
Ar
t
.1979. Thedeposi
t
ar
yi
sl
i
abl
e
f
or t
he l
oss of t
he t
hi
ng t
hr
ough a
f
or
t
ui
t
ousevent
:
(
1)I
fi
ti
ssost
i
pul
at
ed;
(
2)I
fheusest
het
hi
ngwi
t
houtt
he
deposi
t
or
'
sper
mi
ssi
on;
(
3)I
fhedel
aysi
t
sr
e
t
ur
n;
(
4)I
fheal
l
owsot
her
st
ousei
t
,even
t
hough he hi
msel
f may have been
aut
hor
i
z
edt
ouset
hesame.
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(
2) I
f by hi
s i
nt
er
vent
i
on he
pr
event
ed a mor
e compe
t
entper
son f
r
om
t
aki
ngupt
hemanagement
.
Bai
l
eei
ncommodat
um
Ar
t
.1942. Thebai
l
ee i
sl
i
abl
ef
or
t
hel
ossoft
het
hi
ng,even i
fi
tshoul
d be
t
hr
oughaf
or
t
ui
t
ousevent
:
(
1)I
fhe devot
es t
he t
hi
ng t
o any
pur
pose di
ffer
ent f
r
om t
hatf
or whi
ch i
t
hasbeenl
oaned;
(
2)I
fhe keeps i
tl
onger t
han t
he
per
i
od
st
i
pul
at
ed, or af
t
er t
he
accompl
i
shmentoft
he use f
orwhi
ch t
he
commodat
um hasbeenconst
i
t
ut
ed;
(
3)I
ft
he t
hi
ng l
oaned has been
del
i
ver
ed wi
t
h appr
ai
sal of i
t
s val
ue,
unl
esst
her
ei
sast
i
pul
at
i
on exempt
i
ngt
he
bai
l
ee f
r
om r
esponsi
bi
l
i
t
yi
n case of a
f
or
t
ui
t
ousevent
;
(
4)I
fhel
endsorl
easest
het
hi
ngt
o
at
hi
r
dper
son,whoi
snotamemberofhi
s
househol
d;
(
5)I
f
,bei
ngabl
et
osaveei
t
hert
he
t
hi
ng bor
r
owed or hi
s own t
hi
ng, he
choosest
osavet
hel
at
t
er
.
Negot
i
or
um Gest
i
o
Ar
t
.2147. The offici
ous manager
shal
lbel
i
abl
ef
oranyf
or
t
ui
t
ousevent
:
(
1) I
f he under
t
akes r
i
sky
oper
at
i
ons whi
ch t
he owner was not
accust
omedt
oembar
kupon;
(
2) I
f he has pr
ef
er
r
ed hi
s own
i
nt
er
estt
ot
hatoft
heowner
;
(
3)I
fhef
ai
l
st
or
e
t
ur
nt
hepr
oper
t
y
orbusi
nessaf
t
erdemandbyt
heowner
;
(
4)I
fheassumed t
hemanagement
i
nbadf
ai
t
h.
Payeei
nSol
ut
i
oI
ndebi
t
i
Ar
t
.2159. Whoever i
n bad f
ai
t
h
accept
san unduepayment
,shal
lpayl
egal
i
nt
er
esti
fa sum ofmoney i
si
nvol
ved,or
shal
lbel
i
abl
ef
orf
r
ui
t
sr
ecei
ved orwhi
ch
shoul
d have been r
ecei
ved i
ft
he t
hi
ng
pr
oducesf
r
ui
t
s.
Heshal
lf
ur
t
her
mor
ebeanswer
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
ed t
het
hi
ng,unt
i
li
ti
s
r
ecover
ed.
Lessee
Ar
t
. 1648. Ever
yl
ease of r
eal
est
at
emay ber
ecor
ded i
nt
heRegi
st
r
y of
Pr
oper
t
y
. Unl
ess a l
ease i
sr
ecor
ded, i
t
shal
lnotbebi
ndi
ngupont
hi
r
dper
sons.
Ar
t
.1671. I
ft
hel
esseecont
i
nues
enj
oyi
ng t
he t
hi
ng af
t
ert
he expi
r
at
i
on of
t
he cont
r
act
,over t
he l
essor
'
s obj
ect
i
on,
t
he f
or
mer shal
l be subj
ect t
o t
he
r
esponsi
bi
l
i
t
i
esofapossessori
nbadf
ai
t
h.
Ar
t
.552.xxx.
A possessor i
n bad f
ai
t
h shal
lbe
l
i
abl
ef
or de
t
er
i
or
at
i
on or l
oss i
n ever
y
case,eveni
fcausedbyaf
or
t
ui
t
ousevent
.
I
ndependentCont
r
act
or
Ar
t
. 2148. Except when t
he
management was assumed t
o save t
he
pr
oper
t
y or busi
ness f
r
om i
mmi
nent
danger
,t
he offici
ous manager shal
l be
l
i
abl
ef
orf
or
t
ui
t
ousevent
s:
(
1)I
fhei
smani
f
est
l
yunfitt
ocar
r
y
ont
hemanagement
;
Ar
t
. 1727. The cont
r
act
or i
s
r
esponsi
bl
ef
ort
hewor
k donebyper
sons
empl
oyedbyhi
m.
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lOMoARcPSD|22267210
Ar
t
.1728. Thecont
r
act
ori
sl
i
abl
e
f
oral
lt
he cl
ai
ms ofl
abor
er
s and ot
her
s
empl
oyed byhi
m,and oft
hi
r
d per
sonsf
or
deat
h or physi
cal i
nj
ur
i
es dur
i
ng t
he
const
r
uct
i
on.
CommonCar
r
i
er
Ar
t
.1763. A common car
r
i
er i
s
r
esponsi
bl
e f
or i
nj
ur
i
es suffer
ed by a
passengeron accountoft
hewi
l
f
ulact
sor
negl
i
gence of ot
her passenger
s or of
st
r
anger
s, i
f t
he common car
r
i
er
'
s
empl
oyees t
hr
ough t
he exer
ci
se of t
he
di
l
i
genceofagoodf
at
herofaf
ami
l
ycoul
d
have pr
event
ed or s
t
opped t
he act or
omi
ssi
on.
(
2)When f
r
om t
he nat
ur
eand t
he
ci
r
cumst
ancesoft
heobl
i
gat
i
on i
tappear
s
t
hatt
hedesi
gnat
i
on oft
het
i
mewhen t
he
t
hi
ngi
st
obedel
i
ver
edort
heser
vi
cei
st
o
be r
ender
ed was a cont
r
ol
l
i
ng mot
i
ve f
or
t
heest
abl
i
shmentoft
hecont
r
act
;
(
3) When demand woul
d be
usel
ess,aswhen t
heobl
i
gorhasr
ender
ed
i
tbeyondhi
spowert
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
gat
i
on,del
aybyt
he
ot
herbegi
ns.
Ar
t
.552.xxx
A possessor i
n bad f
ai
t
h shal
lbe
l
i
abl
ef
or de
t
er
i
or
at
i
on or l
oss i
n ever
y
case,eveni
fcausedbyaf
or
t
ui
t
ousevent
.
2.Mor
aordef
aul
t
b.Mor
aacci
pi
endi
a.Mor
asol
vendi
Ar
t
.1718. Thecont
r
act
orwhohas
under
t
aken t
o putonl
y hi
s wor
k orski
l
l
,
cannotcl
ai
m anycompensat
i
oni
ft
hewor
k
shoul
d be dest
r
oyed bef
or
ei
t
s del
i
ver
y
,
unl
esst
her
ehasbeendel
ayi
nr
ecei
vi
ngi
t
,
or i
ft
he dest
r
uct
i
on was caused by t
he
poorqual
i
t
yoft
hemat
er
i
al
,pr
ovi
ded t
hi
s
f
actwascommuni
cat
ed i
n duet
i
met
ot
he
owner
.I
ft
he mat
er
i
ali
sl
ost t
hr
ough a
f
or
t
ui
t
ous event
, t
he cont
r
act i
s
ext
i
ngui
shed.
Ar
t
.1165.xxx.
xxx
I
f t
he obl
i
gor del
ays, or has
pr
omi
sed t
odel
i
vert
hesamet
hi
ngt
ot
wo
ormor
eper
sonswhodonothavet
hesame
i
nt
er
est
,he shal
lbe r
esponsi
bl
ef
or any
f
or
t
ui
t
ous eventunt
i
lhe has effect
ed t
he
del
i
ver
y
.
Ar
t
.1169. Thoseobl
i
ged t
odel
i
ver
ort
odosome
t
hi
ngi
ncuri
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
hem t
hef
ul
fil
l
mentoft
hei
r
obl
i
gat
i
on.
However
, t
he demand by t
he
cr
edi
t
or shal
lnot be necessar
yi
n or
der
t
hatdel
aymayexi
st
:
(
1)When t
heobl
i
gat
i
on ort
hel
aw
expr
essl
ysodecl
ar
e;
Ar
t
. 1504.
Unl
ess ot
her
wi
se
agr
eed,t
he goods r
emai
n att
he sel
l
er
'
s
r
i
sk unt
i
l t
he owner
shi
p t
her
ei
n i
s
t
r
ansf
er
r
ed t
ot
he buyer
, but when t
he
owner
shi
p t
her
ei
n i
st
r
ansf
er
r
ed t
ot
he
buyer t
he goods ar
e att
he buyer
'
sr
i
sk
whe
t
heract
ualdel
i
ver
yhasbeen madeor
not
,exceptt
hat
:
(
1)Wher
edel
i
ver
yoft
hegoodshas
been madet
ot
hebuyerort
o a bai
l
eef
or
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t
he buyer
,i
n pur
suance oft
he cont
r
act
and t
heowner
shi
pi
nt
hegoodshasbeen
r
e
t
ai
ned by t
he sel
l
er mer
el
yt
o secur
e
per
f
or
mance by t
he buyer of hi
s
obl
i
gat
i
ons undert
hecont
r
act
,t
hegoods
ar
e att
he buyer
'
sr
i
sk f
r
om t
he t
i
me of
suchdel
i
ver
y;
(
2)Wher
eact
ualdel
i
ver
yhasbeen
del
ayed t
hr
ough t
he f
aul
t of ei
t
her t
he
buyerorsel
l
ert
hegoodsar
eatt
her
i
skof
t
hepar
t
yi
nf
aul
t
.
3.Expr
essagr
eement
Ar
t
.1306. Thecont
r
act
i
ngpar
t
i
es
may est
abl
i
sh such st
i
pul
at
i
ons,cl
auses,
t
er
ms and condi
t
i
ons as t
hey may deem
conveni
ent
,pr
ovi
dedt
heyar
enotcont
r
ar
y
t
ol
aw,mor
al
s,goodcust
oms,publ
i
cor
der
,
orpubl
i
cpol
i
cy
.
4.Al
eat
or
yCont
r
act
Ar
t
.2010.Byanal
eat
or
ycont
r
act
,
oneoft
hepar
t
i
esorbot
hr
eci
pr
ocal
l
ybi
nd
t
hemsel
ves t
o gi
ve ort
o do some
t
hi
ng i
n
consi
der
at
i
on ofwhatt
heot
hershal
lgi
ve
or do upon t
he happeni
ng ofan event
whi
ch i
suncer
t
ai
n,orwhi
ch i
st
ooccurat
ani
nde
t
er
mi
nat
et
i
me.
(
noti
nBavi
er
a'
sout
l
i
ne)
Ar
t
.1175. Usur
i
ous t
r
ansact
i
ons
shal
lbegover
nedbyspeci
all
aws.
Tol
ent
i
no:
Usur
y
.
- Usur
yi
st
he cont
r
act
i
ng f
oror
r
ecei
vi
ng some
t
hi
ng i
n excess of t
he
amount al
l
owed by l
aw f
or t
he l
oan or
f
or
bear
anceormoney
,goodsorchat
t
el
s.
Speci
all
aw on usur
y
.
- The Usur
y Law
wasActNo.2655. Thi
sl
aw wasr
epeal
ed
dur
i
ng t
he per
i
od ofmar
t
i
all
aw,l
eavi
ng
par
t
i
esf
r
eet
ost
i
pul
at
ehi
gherr
at
es.
Ar
t
. 1176. The r
ecei
pt of t
he
pr
i
nci
pal by t
he cr
edi
t
or wi
t
hout
r
eser
vat
i
on wi
t
h r
espect t
ot
he i
nt
er
est
shal
lgi
ver
i
set
ot
hepr
esumpt
i
ont
hatsai
d
i
nt
er
esthasbeenpai
d.
Ther
ecei
ptofal
at
eri
nst
al
l
mentof
a debt wi
t
hout r
eser
vat
i
on as t
o pr
i
or
i
nst
al
l
ment
s, shal
l l
i
kewi
se r
ai
se t
he
pr
esumpt
i
on t
hatsuch i
nst
al
l
ment
s have
beenpai
d.
Ar
t
. 1177. The cr
edi
t
or
s, af
t
er
havi
ngpur
suedt
hepr
oper
t
yi
npossessi
on
oft
he debt
ort
o sat
i
sf
yt
hei
rcl
ai
ms,may
exer
ci
se al
lt
he r
i
ght
s and br
i
ng al
lt
he
act
i
onsoft
hel
at
t
erf
ort
hesamepur
pose,
save t
hose whi
ch ar
ei
nher
ent i
n hi
s
per
son;t
hey may al
so i
mpugn t
he act
s
whi
cht
hedebt
ormayhavedonet
odef
r
aud
t
hem.
Bal
ane: Agai
nst what can t
he obl
i
gee
demandper
f
or
mance?
1. Agai
nstnonexemptpr
oper
t
i
es oft
he
debt
or
.
- Thedebt
ori
sl
i
abl
ewi
t
h al
lhi
s
pr
oper
t
y
, pr
esent and f
ut
ur
e, f
or t
he
f
ul
fil
l
mentofhi
sobl
i
gat
i
ons,subj
ectt
ot
he
exempt
i
onspr
ovi
dedbyl
aw.(
Ar
t
.2236.
)
2. I
fnumber one i
s nog enought
,t
he
cr
edi
t
orgoest
oanycl
ai
msw/ct
hedebt
or
may have agai
nstt
hi
r
d per
sons. Thi
si
s
cal
l
ed ac
c
i
on subr
ogat
or
i
a, wher
ei
n t
he
cr
edi
t
ori
ssubr
ogat
ed i
nt
her
i
ght
soft
he
debt
or
.
3. Ac
c
i
on paul
i
ana (
Ar
t
i
cl
es 138789)
.
Thi
si
st
he r
i
ghtofcr
edi
t
or
st
o se
tasi
de
f
r
audul
entt
r
ansf
er
sw/ct
hedebt
ormade
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lOMoARcPSD|22267210
so much ofi
tas i
s necessar
yt
o pay t
he
debt
s.
Ar
t
.1178. Subj
ectt
ot
hel
aws,al
l
r
i
ght
s acqui
r
ed i
n vi
r
t
ue ofan obl
i
gat
i
on
ar
et
r
ansmi
ssi
bl
e, i
ft
her
e has been no
st
i
pul
at
i
ont
ot
hecont
r
ar
y
.
CHAPTER 3.
-DI
FFERENTKI
NDSOF
OBLI
GATI
ONS
Sect
i
on1.
-Pur
eandCondi
t
i
onal
Obl
i
gat
i
ons
Bal
ane: Ar
t
i
cl
es 1179 - 1230.
- The
t
r
oubl
ew/ t
hecl
assi
ficat
i
on i
st
hatt
her
e
i
snosyst
em.
Cl
assi
ficat
i
onofObl
i
gat
i
ons:
1.
.Ac
c
or
di
ngt
oc
r
i
t
er
i
aofdemandabi
l
i
t
y:
a.Pur
e
b.Condi
t
i
onal
c.W/at
er
m
2.Ac
c
or
di
ngt
opl
ur
al
i
t
yofobj
ec
t
s:
a.Si
ngl
e
b.Al
t
er
nat
i
ve
c.Facul
t
at
i
ve
3.Ac
c
or
di
ngt
oPl
ur
al
i
t
yofsubj
ec
t
s:
a.Joi
nt
b.Sol
i
dar
y
4.Ac
c
or
di
ngt
oPer
f
or
manc
e:
a.Di
vi
si
bl
e
b.I
ndi
vi
si
bl
e
5.Ac
c
or
di
ngt
oSanc
t
i
onsf
orBr
eac
h:
a.Si
mpl
e
b.W/apenalcl
ause
I
V.Di
ffer
entTypesofCi
vi
lObl
i
gat
i
ons
1.Ast
oCr
i
t
er
i
aofDemandabi
l
i
t
y
A. Pur
e Obl
i
gat
i
on.
- A pur
e
obl
i
gat
i
on i
s one w/c i
s notsubj
ectt
oa
condi
t
i
onorat
er
m.
Ar
t
.1179.Ever
y obl
i
gat
i
on whose
per
f
or
mance does not depend upon a
f
ut
ur
eoruncer
t
ai
n event
,orupon a past
event unknown t
o t
he par
t
i
es, i
s
demandabl
eatonce.
Ever
y obl
i
gat
i
on whi
ch cont
ai
ns a
r
esol
ut
or
y condi
t
i
on shal
l al
so be
demandabl
e, wi
t
hout pr
ej
udi
ce t
o t
he
effect
soft
hehappeni
ngoft
heevent
.
PAY V.PALANCA [
57 SCRA 618] - Fr
om
t
hemanneri
n w/ct
hep/n wasexecut
ed,
i
twoul
dappeart
hatpe
t
i
t
i
onerwashopef
ul
t
hatt
hesat
i
sf
act
i
on ofhi
scr
edi
tcoul
d be
r
eal
i
z
ed ei
t
her t
hr
ough t
he debt
or sued
r
ecei
vi
ngcash paymentf
r
om t
heest
at
eof
t
he l
at
e Car
l
os Pal
anca pr
esumpt
i
vel
y as
oneoft
hehei
r
s,or
,asexpr
essed t
her
ei
n,
"
upon demand.
" Ther
ei
s not
hi
ng i
nt
he
r
ecor
dt
hatwoul
di
ndi
cat
ewhe
t
herornot
t
hefir
stal
t
er
nat
i
vewasf
ul
fil
l
ed. Whati
s
undeni
abl
ei
st
haton 8/26/67,mor
et
han
15 yr
s.af
t
ert
heexecut
i
on oft
he p/n on
1/30/52, t
hi
s pe
t
i
t
i
on was fil
ed. The
def
ense i
nt
er
posed was pr
escr
i
pt
i
on. I
t
s
mer
i
ti
sr
at
herobvi
ous. Ar
t
.1179,par
.1
saysso.xxx
The obl
i
gat
i
on bei
ng due and
demandabl
e, i
t woul
d appear t
hat t
he
fil
i
ngoft
hesui
taf
t
er15yr
s.wasmucht
oo
l
at
e.
B.Condi
t
i
onalObl
i
gat
i
ons
Ar
t
. 1181.
I
n condi
t
i
onal
obl
i
gat
i
ons,t
he acqui
si
t
i
on ofr
i
ght
s,as
wel
last
heext
i
ngui
shmentorl
ossoft
hose
al
r
eady acqui
r
ed,shal
ldepend upon t
he
happeni
ng oft
heeventwhi
ch const
i
t
ut
es
t
hecondi
t
i
on.
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Bal
ane: A c
ondi
t
i
on i
s a f
ut
ur
e and
uncer
t
ai
n eventupon w/can obl
i
gat
i
on or
pr
ovi
si
oni
smadet
odepend.xxx Fut
ur
i
t
y
and uncer
t
ai
nt
y must concur as
char
act
er
i
st
i
csoft
heevent
.(
I
VTol
ent
i
no.
)
A past t
hi
ng can never be a
condi
t
i
on. A condi
t
i
on i
s al
ways f
ut
ur
e
anduncer
t
ai
n.
Past event unknown t
o t
he
par
t
i
es.
-I
ti
sr
eal
l
yt
heknowl
edgeoft
he
eventw/cconst
i
t
ut
est
hef
ut
ur
e. I
ti
st
he
knowl
edge w/c i
sf
ut
ur
e and uncer
t
ai
n.
Forexampl
e,when Isay" Iwi
l
lt
r
eatyou
f
orl
unchi
fyouge
tt
hehi
ghestscor
ei
nt
he
Ci
vi
lLaw Fi
nalExams(
on t
heassumpt
i
on
t
hat Pr
of
. Bal
ane has al
r
eady fini
shed
checki
ng t
he paper
s.
)
" Her
e,t
he event
(
ge
t
t
i
ngt
hehi
ghestscor
e)i
sal
r
eadyapast
event
, ye
tt
he knowl
edge i
sf
ut
ur
e and
uncer
t
ai
n.
Condi
t
i
oncompar
edt
oat
er
m.
- As
t
o el
ement of f
ut
ur
i
t
y
, condi
t
i
on and
el
ementar
et
hesame. They di
fferi
nt
he
aspect of cer
t
ai
nt
y- a condi
t
i
on i
s
uncer
t
ai
nwher
easat
er
mi
scer
t
ai
n.
Obl
i
gat
i
ons wi
t
h a r
esol
ut
or
y
per
i
od t
ake effectatonce,butt
er
mi
nat
e
uponar
r
i
valoft
hedaycer
t
ai
n.
A day cer
t
ai
ni
s under
st
ood t
o be
t
hat whi
ch must necessar
i
l
y come,
al
t
houghi
tmaynotbeknownwhen.
I
f t
he uncer
t
ai
nt
y consi
st
s i
n
whe
t
her t
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
ed by t
he r
ul
es oft
he pr
ecedi
ng
Sect
i
on.
Bal
ane: A t
er
m i
sa f
ut
ur
e anc cer
t
ai
n
event upon w/c t
he demandabi
l
i
t
y (
or
ext
i
ngui
shment
)ofanobl
i
gat
i
ondepends.
At
er
m orper
i
od i
s an i
nt
er
valof
t
i
me, w/c, exer
t
i
ng an i
nfluence on an
obl
i
gat
i
on asa consequenceofa j
ur
i
di
cal
act
,ei
t
hersuspends i
t
s demandabi
l
i
t
y or
pr
oducesi
t
sext
i
ngui
shment
.(
Manr
esa.
)
At
er
m canei
t
herbe:
1. suspensi
ve condi
t
i
on (
ex di
e- f
r
om
t
heday)oronet
hear
r
i
valofw/cwi
l
lmake
t
heobl
i
gat
i
ondemandabl
e
2. r
esol
ut
or
ycondi
t
i
on (
i
ndi
e-i
nt
ot
he
day) or one t
he ar
r
i
val of w/c wi
l
l
ext
i
ngui
sht
heobl
i
gat
i
on.
Ki
ndsofCondi
t
i
onalObl
i
gat
i
ons
Condi
t
i
onscanei
t
herbe:
1.
Suspensi
ve
condi
t
i
on
(
condi
t
i
on
pr
ecedent
) wher
ei
n
t
he
happeni
ng oft
he eventgi
ves bi
r
t
ht
o an
obl
i
gat
i
on
2. Resol
ut
or
ycondi
t
i
on (
condi
t
i
on
subsequent
)wher
ei
nt
hehappeni
ngoft
he
eventwi
l
lext
i
ngui
sht
heobl
i
gat
i
on.
Di
st
i
ngui
shedf
r
om t
er
m orper
i
od
Ar
t
.1193. Obl
i
gat
i
ons f
orwhose
f
ul
fil
l
menta day cer
t
ai
n has been fixed,
shal
lbe demandabl
e onl
y when t
hatday
comes.
(
i
)Condi
t
i
onpr
ecedent
Ar
t
. 1187. The effect
s of a
condi
t
i
onal obl
i
gat
i
on t
o gi
ve, once t
he
condi
t
i
on hasbeen f
ul
fil
l
ed,shal
lr
e
t
r
oact
t
o t
he day of t
he const
i
t
ut
i
on of t
he
obl
i
gat
i
on. Never
t
hel
ess, when t
he
obl
i
gat
i
on i
mposes r
eci
pr
ocalpr
est
at
i
ons
upon t
hepar
t
i
es,t
hef
r
ui
t
sand i
nt
er
est
s
dur
i
ngt
hependencyoft
hecondi
t
i
on shal
l
be deemed t
o have been mut
ual
l
y
compensat
ed. I
f t
he obl
i
gat
i
on i
s
uni
l
at
er
al
,t
hedebt
orshal
lappr
opr
i
at
et
he
f
r
ui
t
s and i
nt
er
est
sr
ecei
ved,unl
ess f
r
om
t
he nat
ur
e and ci
r
cumst
ances of t
he
obl
i
gat
i
on i
tshoul
d be i
nf
er
r
ed t
hatt
he
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lOMoARcPSD|22267210
i
nt
ent
i
on oft
he per
son const
i
t
ut
i
ng t
he
samewasdi
ffer
ent
.
I
n obl
i
gat
i
onst
odoand nott
odo,
t
he cour
t
s shal
lde
t
er
mi
ne,i
n each case,
t
her
e
t
r
oact
i
veeffectoft
hecondi
t
i
on t
hat
hasbeencompl
i
edwi
t
h.
Bal
ane: Thi
s ar
t
i
cl
er
ef
er
st
o suspensi
ve
condi
t
i
on. Thi
sar
t
i
cl
ese
t
sf
or
t
ht
her
ul
e
of r
e
t
r
oact
i
vi
t
yi
n an obl
i
gat
i
on t
o gi
ve.
Thi
sr
ul
ei
sl
ogi
calbuti
mpr
act
i
cal
. Many
moder
nCi
vi
lCodeshavedi
scar
dedi
t
.
No Re
t
r
oact
i
vi
t
y ast
ot
heFr
ui
t
s.
Not
i
ce t
hatt
her
ei
s no r
e
t
r
oact
i
vi
t
y wi
t
h
r
espect t
o t
he f
r
ui
t
s. The f
r
ui
t
s ar
e
deemed t
o cancelouteach ot
her
.I
fonl
y
one oft
he t
hi
ng pr
oduces f
r
ui
t
s,t
her
ei
s
noobl
i
gat
i
ont
odel
i
vert
hef
r
ui
t
s.
(
i
i
)Condi
t
i
onsubsequent
Ar
t
.1190. When t
he condi
t
i
ons
havef
ort
hei
rpur
poset
heext
i
ngui
shment
ofan obl
i
gat
i
on t
ogi
ve,t
hepar
t
i
es,upon
t
he f
ul
fil
l
ment of sai
d condi
t
i
ons, shal
l
r
e
t
ur
n t
o each ot
her what t
hey have
r
ecei
ved.
I
n caseoft
hel
oss,de
t
er
i
or
at
i
on or
i
mpr
ovementoft
he t
hi
ng,t
he pr
ovi
si
ons
whi
ch,wi
t
hr
espectt
ot
hedebt
or
,ar
el
ai
d
down i
n t
he pr
ecedi
ng ar
t
i
cl
e shal
l be
appl
i
ed t
ot
he par
t
y who i
s bound t
o
r
e
t
ur
n.
Asf
orobl
i
gat
i
onst
odoand nott
o
do,t
hepr
ovi
si
onsoft
hesecondpar
agr
aph
of ar
t
i
cl
e 1187 shal
l be obser
ved as
r
egar
dst
heeffectoft
heext
i
ngui
shmentof
t
heobl
i
gat
i
on.
Ar
t
.1187.xxx
I
n obl
i
gat
i
ons t
o do
and not t
o do,t
he cour
t
s
shal
l de
t
er
mi
ne, i
n each
case,t
her
e
t
r
oact
i
veeffectof
t
hecondi
t
i
on t
hathasbeen
compl
i
edwi
t
h.
Bal
ane: Ar
t
. 1190 r
ef
er
st
or
esol
ut
or
y
condi
t
i
ons. Thi
si
sj
ustt
he opposi
t
e of
Ar
t
.1189.
3.Ki
ndsofcondi
t
i
ons
Ar
t
.1182. When t
hef
ul
fil
l
mentof
t
he condi
t
i
on depends upon t
he sol
e wi
l
l
oft
he debt
or
,t
he condi
t
i
onalobl
i
gat
i
on
shal
lbevoi
d.I
fi
tdependsupon chanceor
upon t
he wi
l
l of a t
hi
r
d per
son, t
he
obl
i
gat
i
on shal
lt
ake effecti
n conf
or
mi
t
y
wi
t
ht
hepr
ovi
si
onsoft
hi
sCode.
Bal
ane: We ar
e t
al
ki
ng her
e of a
suspensi
vecondi
t
i
on.
Fi
r
st sent
ence of Ar
t
. 1182.
The
condi
t
i
on mustbesuspensi
ve,pot
est
at
i
ve
anddependson t
hesol
ewi
l
loft
hedebt
or
.
E.
g.
,"
Ipr
omi
set
osel
lyoumycarf
orP1.
00
wheneverIl
i
ke.
"
Q:Whydoesi
tmaket
heobl
i
gat
i
onvoi
d?
A:Bec.suchanobl
i
gat
i
onl
acksoneoft
he
essent
i
al el
ement
s of an obl
i
gat
i
on, t
he
vi
nc
ul
um j
ur
i
s, t
he bi
ndi
ng f
or
ce- t
he
meansbyw/ci
ti
senf
or
ceabl
ei
ncour
t
.I
n
t
hi
scase,t
her
ei
snobi
ndi
ngf
or
ce. Ther
e
i
snoobl
i
gat
i
on.I
ti
saj
oke.
Pot
est
at
i
ve Condi
t
i
on i
s one w/c
depends sol
el
y on t
he wi
l
lofei
t
her one
par
t
y
. E.
g.
,"Iwi
l
lgi
veyou mypl
ant
at
i
on
i
n Davao pr
ovi
ded you r
esi
de i
n Davao
per
manent
l
y
.
"
CasualCondi
t
i
on i
sonewher
et
he
condi
t
i
on i
smadet
odepend upon at
hi
r
d
per
son orupon chance. E.
g.
,"
Iwi
l
lgi
ve
you my l
and i
n Fl
or
i
dabl
anca i
f Mt
.
Pi
nat
uboer
upt
st
hi
syear
.
"
Mi
xed Condi
t
i
on i
s one w/c
dependspar
t
l
yupon t
hewi
l
lofoneoft
he
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lOMoARcPSD|22267210
par
t
i
esand par
t
l
yon ei
t
herchanceort
he
wi
l
lofat
hi
r
dper
son.
Q: Whati
ft
he condi
t
i
on i
s suspensi
ve,
pot
est
at
i
veand dependssol
el
yon t
hewi
l
l
oft
hecr
edi
t
or
,i
st
hecondi
t
i
onalobl
i
gat
i
on
val
i
d?
A:Yes.I
nf
act
,t
heobl
i
gat
i
oni
snotevena
condi
t
i
on obl
i
gat
i
on.
I
t i
s a pur
e
obl
i
gat
i
on,bi
ndi
ngatonce.
can swi
m acr
oss t
he Paci
fic Ocean f
or2
hour
s.
"
(
2) I
mpossi
bl
ei
nl
aw orone w/c
at
t
aches an i
l
l
egal condi
t
i
on, e.
g.
,"
I
pr
omi
set
osel
lmycart
oMr
.M f
orP2 on
condi
t
i
on t
hat he bur
ns t
he Col
l
ege of
Law.
"
EffectofI
mpossi
bl
eCondi
t
i
on.
-I
tannul
s
t
he obl
i
gat
i
on w/c depends upon t
hem.
The ent
i
r
ej
ur
i
di
calt
i
ei
st
ai
nt
ed by t
he
i
mpossi
bl
e condi
t
i
on. Cor
r
el
at
et
hi
s w/
Ar
t
i
cl
es 727and873.
BALANE CASES:
SMI
TH BELL V.SOTELO MATTI [
44 P
874] - Wher
et
he f
ul
fil
l
ment of t
he
condi
t
i
on does notdepend on t
he wi
l
lof
t
he obl
i
gor
,buton t
hatofa 3r
d per
son
whocan,i
n nowaybecompel
l
ed t
ocar
r
y
i
tout
,t
heobl
i
gor
'
spar
toft
hecont
r
acti
s
compl
i
ed w/,i
fhe does al
lt
hati
si
n hi
s
power
, and i
tt
hen becomes i
ncumbent
upont
heot
hercont
r
act
i
ngpar
t
yt
ocompl
y
w/t
het
er
msoft
hecont
r
act
.
(
noti
nBavi
er
a'
sout
l
i
ne)
Ar
t
.1183. I
mpossi
bl
e condi
t
i
ons,
t
hosecont
r
ar
yt
o good cust
omsorpubl
i
c
pol
i
cy and t
hose pr
ohi
bi
t
ed by l
aw shal
l
annult
heobl
i
gat
i
on whi
ch dependsupon
t
hem. I
ft
he obl
i
gat
i
on i
s di
vi
si
bl
e,t
hat
par
tt
her
eofwhi
ch i
s notaffect
ed by t
he
i
mpossi
bl
e orunl
awf
ulcondi
t
i
on shal
lbe
val
i
d.
The condi
t
i
on not t
o do an
i
mpossi
bl
et
hi
ng shal
lbe consi
der
ed as
nothavi
ngbeenagr
eedupon.
Bal
ane: Thi
s r
ef
er
s t
o a suspensi
ve
condi
t
i
on.
Ther
e ar
e 2 cl
asses ofi
mpossi
bl
e
condi
t
i
ons:
(
1) I
mpossi
bl
e i
n f
act
, e.
g.
,"
I
pr
omi
set
osel
lmycart
oMr
.M f
orP2i
fhe
Ar
t
. 727. I
l
l
egal or i
mpossi
bl
e
condi
t
i
ons i
n si
mpl
e and r
emuner
at
or
y
donat
i
ons shal
l be consi
der
ed as not
i
mposed.
Ar
t
. 873. I
mpossi
bl
e condi
t
i
ons
andt
hosecont
r
ar
yt
ol
aw orgoodcust
oms
shal
lbe consi
der
ed as noti
mposed and
shal
li
nnomannerpr
ej
udi
cet
hehei
r
,even
i
ft
het
est
at
orshoul
dot
her
wi
sepr
ovi
de.
Accor
di
ng t
o Tol
ent
i
no:
I
n
cont
r
act
s,an i
mpossi
bl
econdi
t
i
on annul
s
t
he cont
r
act
. I
n gr
at
ui
t
ous di
sposi
t
i
ons,
t
he i
mpossi
bl
e condi
t
i
on i
s si
mpl
y
di
sr
egar
ded.
The fir
st st
at
ement i
si
naccur
at
e
bec. donat
i
on i
s a cont
r
act and i
n a
donat
i
on, t
he i
mpossi
bl
e condi
t
i
on does
not annul t
he cont
r
act
. I
ti
s si
mpl
y
di
sr
egar
ded. The pr
operway t
o say i
ti
s
t
hat
: I
n an oner
ous t
r
ansact
i
on, an
i
mpossi
bl
econdi
t
i
on annul
st
hecondi
t
i
on
obl
i
gat
i
on. I
n agr
at
ui
t
ousdi
sposi
t
i
on,as
i
n adonat
i
on ort
est
ament
ar
ydi
sposi
t
i
on,
an i
mpossi
bl
e condi
t
i
on at
t
ached t
ot
he
di
sposi
t
i
on i
s si
mpl
y consi
der
ed as not
i
mposed.
Q:Whyi
st
her
eadi
ffer
ence?
A:
Bec.i
n a donat
i
on aswel
lasi
na
t
est
ament
ar
y di
sposi
t
i
on, t
he c
ausa or
consi
der
at
i
on i
st
hel
i
ber
al
i
t
yoft
hedonor
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lOMoARcPSD|22267210
ort
est
at
or
,ast
hecasemaybe.Eveni
fyou
t
akeaway t
hei
mpossi
bl
e condi
t
i
on,t
her
e
i
s st
i
l
la r
eason f
or t
he di
sposi
t
i
on t
o
exi
st
- l
i
ber
al
i
t
y
. They (
donat
i
on and
t
est
ament
ar
y di
sposi
t
i
on)have bot
ht
hei
r
under
pi
nni
ngs,l
i
ber
al
i
t
y
.
But i
n an oner
ous t
r
ansact
i
on,
si
nce an oner
ous pr
est
at
i
on w/c i
s
r
eci
pr
ocal
r
equi
r
es
concomi
t
t
t
ant
per
f
or
mances, t
hat i
mpossi
bl
e condi
t
i
on
becomes par
toft
he c
ausa. Ther
ef
or
e,i
f
t
hecondi
t
i
on i
si
mpossi
bl
e,t
her
ei
sf
ai
l
ur
e
ofc
ausa. I
n no c
ausa,t
her
ei
s al
so no
cont
r
act
.
Par
as'out
l
i
neoni
mpossi
bl
econdi
t
i
ons:
1. Posi
t
i
vesuspensi
vecondi
t
i
on t
odoan
i
mpossi
bl
e/ i
l
l
egalt
hi
ng- Theobl
i
gat
i
on
i
svoi
d(
Ar
t
.1183,par
.1.
)
2. A negat
i
ve condi
t
i
on (
not t
o do an
i
mpossi
bl
et
hi
ng)
- Just di
sr
egar
d t
he
condi
t
i
on(
Ar
t
.1183,par
.2.
)
3. A condi
t
i
on nott
o do an i
l
l
egalt
hi
ng
(
negat
i
ve)
- Thi
si
snotexpr
essl
ypr
ovi
ded
f
ori
nt
he pr
ovi
si
on buti
si
mpl
i
ed. The
obl
i
gat
i
on i
s val
i
d. E.
g."
Iwi
l
lsel
lyou a
pi
ece ofl
and pr
ovi
ded you do notpl
ant
mar
i
j
uanaoni
t
.
"
Ar
t
.1184.Thecondi
t
i
ont
hatsome
event wi
l
l not happen at a de
t
er
mi
nat
e
t
i
me shal
l ext
i
ngui
sh t
he obl
i
gat
i
on as
soon as t
he t
i
me expi
r
es or i
fi
t has
becomei
ndubi
t
abl
et
hatt
heeventwi
l
lnot
t
akepl
ace.
Bal
ane: Thi
s ar
t
i
cl
er
ef
er
st
o suspensi
ve
condi
t
i
ons. I
ft
hecondi
t
i
on i
sr
esol
ut
or
y
,
t
heeffecti
st
heopposi
t
e.
Ar
t
.1185.Thecondi
t
i
ont
hatsome
evenwi
l
lnothappen atade
t
er
mi
nat
et
i
me
shal
lr
ender t
he obl
i
gat
i
on effect
i
ve f
r
om
t
he moment t
he t
i
me i
ndi
cat
ed has
el
apsed,ori
fi
thas become evi
dentt
hat
t
heeventcannotoccur
.
I
f no t
i
me has been fixed, t
he
condi
t
i
on shal
lbedeemedf
ul
fil
l
edatsuch
t
i
me as may have pr
obabl
y been
cont
empl
at
ed,bear
i
ngi
n mi
nd t
henat
ur
e
oft
heobl
i
gat
i
on.
Bal
ane: Thi
sar
t
i
cl
er
ef
er
st
oasuspensi
ve
condi
t
i
on.
Ar
t
.1186. Thecondi
t
i
on shal
lbe
deemed f
ul
fil
l
ed when t
he obl
i
gor
vol
unt
ar
i
l
ypr
event
si
t
sf
ul
fil
l
ment
.
Bal
ane: Thi
sar
t
i
cl
er
ef
er
st
oasuspensi
ve
condi
t
i
on.
Doct
r
i
ne of Const
r
uct
i
ve Compl
i
ance.
Ther
ear
et
hr
eer
equi
si
t
esi
nor
dert
hatt
hi
s
ar
t
i
cl
emayappl
y:
1. I
nt
enton t
hepar
toft
heobl
i
gor
t
opr
eventf
ul
fil
l
mentoft
hecondi
t
i
on.The
i
nt
entdoesnothavet
obemal
i
ci
ous.
2. Act
ualpr
event
i
on ofcompl
i
ance
(
byt
heobl
i
gor
)
Const
r
uct
i
ve compl
i
ance can have
appl
i
cat
i
on onl
y i
f t
he condi
t
i
on i
s
pot
est
at
i
ve. I
t can al
so appl
yt
o Mi
xed
condi
t
i
on as t
ot
hatpar
tw/c t
he obl
i
gor
shoul
dper
f
or
m.
BALANE CASES:
TAYAG V.CA [
219SCRA480]- I
nsof
aras
t
he3r
di
t
em oft
hecont
r
acti
sconcer
ned,
xxxr
esp.cour
tappl
i
ed Ar
t
.1186,NCC on
const
r
uct
i
ve f
ul
fil
l
ment w/c pe
t
i
t
i
oner
s
cl
ai
m shoul
d not have been appr
eci
at
ed
bec.t
heyar
et
heobl
i
geeswhi
l
et
hepr
ovi
so
i
n poi
nt speaks of t
he obl
i
gor
. But
,
pe
t
i
t
i
oner
s must concede t
hat i
n a
r
eci
pr
ocal obl
i
gat
i
on l
i
ke a cont
r
act of
pur
chase, bot
h par
t
i
es ar
e mut
ual
l
y
obl
i
gor
sand al
soobl
i
gees,and any oft
he
cont
r
act
i
ng par
t
i
es may
, upon nonf
ul
fil
l
mentbyt
heot
herpr
i
vyofhi
spar
tof
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lOMoARcPSD|22267210
t
hepr
est
at
i
on,r
esci
ndt
hecont
r
actorseek
f
ul
fil
l
ment
. I
n shor
t
,i
ti
s puer
i
l
ef
or
pe
t
i
t
i
oner
st
o say t
hatt
hey ar
et
he onl
y
obl
i
geesundert
hecont
r
actsi
ncet
heyar
e
al
so bound as obl
i
gor
st
or
espect t
he
st
i
pul
at
i
on i
n per
mi
t
t
i
ng pvt
.r
esp. t
o
assume t
he l
oan w/ t
he Phi
. Ve
t
er
ans
Bank w/c pe
t
i
t
i
oner
si
mpeded when t
hey
pai
dt
hebal
anceofsai
dl
oan. Asvendor
s,
t
heyar
esupposedt
oexecut
et
hefinaldeed
ofsal
euponf
ul
lpaymentoft
hebal
anceas
de
t
er
mi
nedher
eaf
t
er
.
Ar
r
t
. 1188. The cr
edi
t
or may
,
bef
or
et
he f
ul
fil
l
ment of t
he condi
t
i
on,
br
i
ng t
he appr
opr
i
at
e act
i
ons f
or t
he
pr
eser
vat
i
onofhi
sr
i
ght
.
The debt
or may r
ecover what
dur
i
ng t
he same t
i
me he has pai
d by
mi
st
akei
ncaseofasuspensi
vecondi
t
i
on.
Bal
ane: Thi
s ar
t
i
cl
er
ef
er
st
o suspensi
ve
condi
t
i
ons.
Br
i
ng t
he appr
or
i
at
e act
i
ons .
.
.
Accor
di
ng t
o Mr
.Just
i
ce JBL Reyes,t
he
phr
ase "
may xxx br
i
ng t
he appr
opr
i
at
e
act
i
ons"i
si
naccur
at
e. To br
i
ngact
i
on i
s
t
o fil
e a sui
t
. But t
he cr
edi
t
or i
s not
r
est
r
i
ct
ed t
ofil
i
ngasui
t
. Thepr
operver
b
i
snot"
br
i
ng"but"
t
ake.
" Forexampl
e,i
na
sal
e of l
and subj
ect t
o suspensi
ve
condi
t
i
on, t
he cr
edi
t
or shoul
d have t
he
suspensi
ve condi
t
i
on annot
at
ed on t
he
t
i
t
l
eoft
hel
and. Thi
si
snotbr
i
ngi
ng an
appr
opr
i
at
e act
i
on but t
aki
ng an
appr
opr
i
at
eact
i
on.
The pr
i
nci
pl
e i
n t
hi
s ar
t
i
cl
e i
s:
Vi
gi
l
ant
i
bus et non dor
mi
ent
i
bus j
ur
a
subveni
untw/c means t
hatt
he l
aws ai
d
t
hosewhoar
evi
gi
l
ant
,nott
hosewhosl
eep
upont
hei
rr
i
ght
s.
Q: WhydoesAr
t
.1188gi
vet
hecr
edi
t
ora
r
ecor
se al
t
hough t
echni
cal
l
yt
he cr
edi
t
or
st
i
l
lhavenor
i
ght
?
A: Bec. as a mat
t
er of f
act
, al
t
hough
t
echni
cal
l
yt
hecr
edi
t
orst
i
l
lhavenor
i
ght
,
he i
s al
r
eady expect
i
ng a r
i
ght
. You
cannot l
e
tt
he cr
edi
t
or si
t and f
ol
d hi
s
ar
msand wai
tf
orhi
sr
i
ghtofexpect
ancy
t
ober
ender
edi
l
l
usor
y
.
Resci
ssi
on
Ar
t
.1191. The power t
or
esci
nd
obl
i
gat
i
onsi
si
mpl
i
edi
nr
eci
pr
ocalones,i
n
caseoneoft
heobl
i
gor
sshoul
dnotcompl
y
wi
t
hwhati
si
ncumbentuponhi
m.
The i
nj
ur
ed par
t
y may choose
be
t
ween t
hef
ul
fil
l
mentand t
her
esci
ssi
on
of t
he obl
i
gat
i
on, wi
t
h t
he payment of
damagesi
n ei
t
hercase.Hemayal
soseek
r
esci
ssi
on, even af
t
er he has chosen
f
ul
fil
l
ment
,i
ft
he l
at
t
er shoul
d become
i
mpossi
bl
e.
The cour
t shal
l decr
ee t
he
r
esci
ssi
on cl
ai
med,unl
ess t
her
e by j
ust
causeaut
hor
i
z
i
ngt
hefixi
ngofaper
i
od.
Thi
si
s under
st
ood t
o be wi
t
hout
pr
ej
udi
ce t
ot
he r
i
ght
s oft
hi
r
d per
sons
who have acqui
r
ed t
he t
hi
ng, i
n
accor
dance wi
t
h ar
t
i
cl
es 1385 and 1388
andt
heMor
t
gageLaw.
Ar
t
i
cl
e
1385.
Resci
ssi
on
cr
eat
es t
he
obl
i
gat
i
on t
o r
e
t
ur
n t
he
t
hi
ngs whi
ch wer
e t
he
obj
ect of t
he cont
r
act
,
t
oge
t
her wi
t
h t
hei
rf
r
ui
t
s,
and t
he pr
i
ce wi
t
h i
t
s
i
nt
er
est
; consequent
l
y
, i
t
can be car
r
i
ed out onl
y
when he who demands
r
esci
ssi
on
can
r
e
t
ur
n
what
everhemaybeobl
i
ged
t
or
est
or
e.
Nei
t
her
shal
l
r
esci
ssi
on t
ake pl
ace when
t
he t
hi
ngs whi
ch ar
et
he
obj
ect of t
he cont
r
act ar
e
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lOMoARcPSD|22267210
l
egal
l
yi
nt
he possessi
on of
t
hi
r
d per
sons who di
d not
acti
nbadf
ai
t
h.
I
n
t
hi
s
case,
i
ndemi
t
yf
or damages may
be demanded f
r
om t
he
per
soncausi
ngt
hel
oss.
1. Bot
h pr
est
at
i
on ar
i
se f
r
om t
he
samesour
ce
2. Each pr
est
at
i
on i
si
nt
ended t
o
be t
he count
er
par
t or equi
val
ent oft
he
ot
her(
qui
dpr
oquo)
BALANE CASES:
Ar
t
i
cl
e
1388.
Whoever acqui
r
es i
n bad
f
ai
t
ht
het
hi
ngsal
i
enat
ed i
n
f
r
aud of cr
edi
t
or
s, shal
l
i
ndemni
f
y t
he l
at
t
er f
or
damages suffer
ed by t
hem
on
account
of t
he
al
i
enat
i
on,whenever
,duet
o
any cause, i
t shoul
d be
i
mpossi
bl
ef
orhi
mt
or
e
t
ur
n
t
hem.
I
ft
her
e ar
et
wo or
mor
e al
i
enat
i
ons, t
he fir
st
acqui
r
ershal
lbel
i
abl
efir
st
,
andsoonsuccessi
vel
y
.
Bal
ane:
Q: Why i
st
hi
s ar
t
i
cl
ei
nt
hi
s Sect
i
on
ent
i
t
l
ed
"
Pur
e
and
Condi
t
i
onal
Obl
i
gat
i
ons.
" I
st
her
e a connect
i
on be
t
.
t
he r
i
ght of r
esci
ssi
on and Pur
e and
condi
t
i
onalobl
i
gat
i
ons?
A: Yes. I
n ar
eci
pr
ocalobl
i
gat
i
on,br
each
by one par
t
y i
s a t
aci
t r
esol
ut
or
y
condi
t
i
on. Thi
s means t
hat t
he ot
her
par
t
ywhoi
svi
ct
i
mi
z
ed byt
hebr
each may
decl
ar
et
heobl
i
gat
i
onr
esol
ved.
Not
e: Ar
t
. 1191 r
ef
er
s t
o r
eci
pr
ocal
obl
i
gat
i
ons (
mut
ual
, i
mpl
es some
cor
r
espondence)
,e.
g.
,a cont
r
act ofsal
e
w/ci
st
hemostr
eci
pr
ocalofal
lcont
r
act
s,
t
he ar
chi
t
ype, t
he pr
ot
ot
ype, t
he
par
adi
gm,t
he di
st
i
l
l
at
i
on ofal
lr
eci
pr
ocal
obl
i
gat
i
ons.
Twor
equi
si
t
esofaReci
pr
ocalObl
i
gat
i
ons:
UNVI
VERSAL FOOD CORP V. CA [
33
SCRA 1] - Resc
i
ssi
on f
or br
eac
h of
c
ont
r
ac
tand r
esc
i
ssi
on byr
eason ofl
esi
on
orec
onomi
c pr
ej
udi
c
e,di
st
i
ngui
shed.
- A
r
esci
ssi
onf
orbr
eachofcont
r
actunderAr
t
.
1191,NCC i
snotpr
edi
cat
ed on i
nj
ur
yt
o
economi
ci
nt
er
est
s oft
he par
t
y pl
t
ff.but
on t
he br
each off
ai
t
h by t
he def
.
,t
hat
vi
ol
at
est
her
eci
pr
oci
t
ybe
t
.t
hepar
t
i
es. I
t
i
snota subsi
di
ar
y act
i
on,and Ar
t
.1191
maybescanned w/o di
scl
osi
ng anywher
e
t
hatt
heact
i
on f
orr
esci
ssi
on t
her
eunderi
s
subor
di
nat
ed t
o anyt
hi
ng ot
her t
han t
he
cul
pabl
e br
each ofhi
s obl
i
gat
i
ons by t
he
def
. Thi
sr
esci
ssi
on i
sa pr
i
nci
palact
i
on
r
e
t
al
i
at
or
yi
n char
act
er
,i
t bei
ng unj
ust
t
hata par
t
y be hel
d bound t
of
ul
fil
lhi
s
pr
omi
seswhen t
heot
hervi
ol
at
eshi
s. As
expr
essed i
nt
heol
d Lat
i
n aphor
i
sm: Non
ser
vandifidem,non est fides ser
vanda.
Hence,t
he r
epar
at
i
on ofdamages f
ort
he
br
eachi
spur
el
ysecondar
y
.
On t
heot
herhand,i
n ar
esci
ssi
on
byr
eason ofl
esi
on oreconomi
cpr
ej
udi
ce
underARt
.1381,etseq.
,NCC,t
hecause
ofact
i
on i
ssubor
di
nat
ed t
ot
heexi
st
ence
oft
hatpr
ej
udi
ce,
bec.i
ti
st
her
ai
sond'et
r
e
as wel
las t
he measur
e oft
he r
i
ght t
o
r
esci
nd.Hence,wher
et
hedef
.makesgood
t
hedamagecaused,t
heact
i
on cannotbe
mai
nt
ai
ned or cont
i
nued, as expr
essl
y
pr
ovi
dedi
n Ar
t
s.1383and1384. Butt
he
oper
at
i
on oft
hese 2 ar
t
i
cl
es i
sl
i
mi
t
ed t
o
cases ofr
esci
ssi
on f
orl
esi
on enumer
at
ed
i
n Ar
t
.1381 and doesnotappl
yt
o cases
underAr
t
.1191.
Resc
i
ssi
on under t
he Ci
vi
lCode.
The 2 i
nst
ances of r
esci
ssi
on ar
e
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lOMoARcPSD|22267210
def
ect
i
vel
y t
er
med "
r
esci
ssi
on" w/o
di
st
i
nct
i
on be
t
.t
henundert
heNCC unl
i
ke
t
he pr
evi
ous OCC, t
hat di
ffer
ent
i
at
ed
"
r
esol
ut
i
on"f
orbr
each ofst
i
pul
at
i
onsf
r
om
"
r
esci
ssi
on"byr
easonofl
esi
onordamage.
2. Oncer
esol
ut
i
on i
savai
l
edof
,t
her
ei
sa
dut
y of mut
ual r
est
i
t
ut
i
on be
t
. t
he
par
t
i
es- when a r
eci
pr
ocalobl
i
gat
i
on i
s
r
esol
ved, t
he effect i
s t
o cancel t
he
j
ur
i
di
cal r
el
at
i
on. Par
t
i
es shoul
d be
r
est
or
edt
ot
hei
rst
at
usquoant
e
Bal
ane:
Doct
i
nesl
ai
ddowni
nt
hi
scase:
1. Resol
ut
i
on i
s not pr
edi
cat
ed on
economi
ci
nj
ur
ybutonbr
eachorvi
ol
at
i
on
2. I
ti
s nota subsi
di
ar
yr
emedy buta
pr
i
nci
palonew/ci
sr
e
t
al
i
at
or
yi
nnat
ur
e.
MAGDALENA ESTATE V.MYRI
CK [
71 P
344] - Thecont
r
actofsal
econt
ai
nsno
pr
ovi
si
on aut
hor
i
z
i
ng t
he vendor
,i
nt
he
eventoff
ai
l
ur
eoft
hevendeet
ocont
i
nuei
n
t
he payment of t
he st
i
pul
at
ed mont
hl
y
i
nst
al
l
ment
s,t
or
e
t
ai
nt
heamount
spai
dt
o
hi
m onaccountoft
hepur
chasepr
i
ce.The
cl
ai
m,t
her
ef
or
e,oft
he pe
t
i
t
i
oner t
hati
t
has t
he r
i
ghtt
of
or
f
ei
tsai
d sums i
ni
t
s
f
avori
s unt
enabl
e. xxx [
H]
e may choose
be
t
. demandi
ng t
he f
ul
fil
l
ment of t
he
cont
r
actori
t
sr
esol
ut
i
on. Theser
emedi
es
ar
e al
t
er
nat
i
ve and not cumul
at
i
ve,and
t
hepe
t
i
t
i
oneri
nt
hi
scase,havi
ng el
ect
ed
t
ocancelt
hecont
r
act
,cannotavai
lhi
msel
f
of t
he ot
her r
emedy of exact
i
ng
per
f
or
mance. As a consequence oft
he
r
esol
ut
i
on,t
hepar
t
i
esshoul
d ber
est
or
ed,
as f
ar as pr
act
i
cabl
e, t
ot
hei
r or
i
gi
nal
si
t
uat
i
onw/ccanbeappr
oxi
mat
edonl
yby
or
der
i
ng,aswedo now,t
her
e
t
ur
n oft
he
t
hi
ngsw/cwer
et
heobj
ectoft
hecont
r
act
,
w/ t
hei
rf
r
ui
t
s and of t
he pr
i
ce, w/
i
nt
er
est
,comput
ed f
r
om t
he dat
e oft
he
i
nst
i
t
ut
i
onoft
heact
i
on.
Bal
ane:
UPV.DE LOSANGELES [
35SCRA 102]Ther
ei
snot
hi
ngi
nt
hel
aw t
hatpr
ohi
bi
t
s
t
he par
t
i
es f
r
om ent
er
i
ng i
nt
o agr
eement
t
hatvi
ol
at
i
on oft
het
er
msoft
hecont
r
act
woul
d cause cancel
l
at
i
on t
her
eof
, even
w/ocour
ti
nt
er
vent
i
on. I
n ot
herwor
ds,i
t
i
s not al
ways necessar
yf
or t
he i
nj
ur
ed
par
t
yt
or
esor
tt
ocour
tf
orr
esci
ssi
onoft
he
cont
r
act
.
Ofcour
se,i
tmustbe under
st
ood
t
hat t
he act of a par
t
yi
n t
r
eat
i
ng a
cont
r
act as cancel
l
ed or r
esol
ved on
account of i
nf
r
act
i
ons by t
he ot
her
cont
r
act
i
ngpar
t
ymustbemadeknown t
o
t
heot
herand i
sal
wayspr
ovi
si
onal
,bei
ng
eversubj
ectt
oscr
ut
i
nyand r
evi
ew byt
he
pr
opercour
t
.I
ft
heot
herpar
t
ydeni
est
hat
r
esci
ssi
on i
sj
ust
i
fied,i
ti
sf
r
eet
or
esor
tt
o
j
udi
ci
alact
i
on i
ni
t
sown behal
f
,andbr
i
ng
t
he mat
t
er t
o cour
t
. Then,shoul
dt
he
cour
t
,af
t
erdue hear
i
ng,deci
de t
hatt
he
r
esol
ut
i
on of t
he cont
r
act was not
war
r
act
ed,t
he r
esponsi
bl
e par
t
y wi
l
lbe
sent
enced t
o damages; i
n t
he cont
r
ar
y
case,t
her
esol
ut
i
on wi
l
lbeaffir
med,and
t
heconsequenti
ndemni
t
y awar
ded t
ot
he
par
t
ypr
ej
udi
ced.
I
n ot
her wor
ds, t
he par
t
y who
deemst
hecont
r
actvi
ol
at
ed mayconsi
der
i
t r
esol
ved or r
esci
nded, and act
accor
di
ngl
y
, w/o pr
evi
ous cour
t act
i
on,
buti
tpr
oc
eeds ati
t
s own r
i
sk. Fori
ti
s
onl
y t
he final j
udgment of t
he
cor
r
epondi
ng cour
tt
hatwi
l
lconcl
usi
vel
y
andfinal
l
yse
t
t
l
ewhe
t
hert
heact
i
on t
aken
wasorwasnotcor
r
ecti
nl
aw.xxx
Doct
r
i
nesl
ai
ddowni
nt
hi
scase:
1. Ri
ght of r
esol
ut
i
on i
s i
mpl
i
ed i
n
r
eci
pr
ocalcont
r
act
s.
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lOMoARcPSD|22267210
Angel
es,supr
a.and Zul
ue
t
av
.Mar
i
ano,
supr
a.
Bal
ane:
Doct
r
i
nesl
ai
ddowni
nt
hi
scase:
1. Ri
ght or r
esol
ut
i
on i
n Ar
t
.1191 i
s
i
mpl
ed.
-I
ti
savai
l
abl
eeven i
ft
her
ei
sno
st
i
pul
at
i
on i
nt
he cont
r
act
.(
Thi
si
s not
new; i
t mer
el
yr
ei
t
er
at
es what was l
ai
d
downi
nMagdal
enaEst
at
ev
.Myr
i
ck.
)
2. Ri
ghtofr
esol
ut
i
on may be exer
ci
sed
ext
r
aj
udi
ci
al
l
y and wi
l
lt
ake effect upon
communi
cat
i
on by t
he aggr
i
eved par
t
yt
o
t
hebr
eachi
ngpar
t
y
.
3. Exer
ci
seoft
hi
sr
i
ghti
sal
wayssubj
ect
t
oj
udi
ci
alr
evi
ew. I
ti
s up t
ot
he ot
her
par
t
yt
ogot
ot
hecour
t
.
These doct
r
i
nes ar
ei
mpl
i
ed f
r
om t
hese
r
ul
i
ngsi
nt
hi
scase:
a. I
ft
he aggr
i
ved par
t
y has not ye
t
per
f
or
med hi
spr
est
at
i
on,al
lhehast
odo
i
st
or
ef
uset
oper
f
or
mi
fher
esol
ves.
b. I
f he has al
r
eady per
f
or
med, upon
r
esol
ut
i
on,hecan demand r
est
i
t
ut
i
on. I
f
her
ef
uses,hecansuef
orr
ecover
yandnot
f
orr
esol
ut
i
on (
f
ort
he r
e
t
ur
n ofwhatyou
gave.
)
ZULUETA V.MARI
ANO [
111SCRA 206] Tr
ue,t
hecont
r
actbe
t
.t
hepar
t
i
espr
ovi
ded
f
orext
r
aj
udi
ci
alr
esci
ssi
on. Thi
shasl
egal
effect
,however
,wher
et
heot
herpar
t
ydoes
notoppose i
t
. Wher
ei
ti
s obj
ect
ed t
o,a
j
udi
ci
alde
t
er
mi
nat
i
on oft
hei
ssue i
sst
i
l
l
necessar
y
. "
A st
i
pul
at
i
on ent
i
t
l
i
ng one
par
t
yt
ot
ake possessi
on oft
he l
and and
bui
l
di
ng i
ft
he ot
her par
t
y vi
ol
at
es t
he
cont
r
actdoesnotexpr
opr
i
ovi
gor
econf
er
upon t
he f
or
mer t
he r
i
ght t
o t
ake
possessi
on t
her
eof i
f obj
ect
ed t
o w/o
j
udi
ci
ali
nt
er
vent
i
onandde
t
er
mi
nat
i
on.
"
PALAY,I
NC.V.CLAVE [
124 SCRA 638] r
ei
t
er
at
ed t
he r
ul
i
ng i
n UP v
. De l
os
ANGELES V.CALASANZ [
135 SCRA 323]
- r
ei
t
er
at
ed t
he r
ul
i
ng i
n UP v
.De l
os
Angel
es,supr
a.andUFC vCA,supr
a.
BOYSAW V. I
NTERPHI
L PROMOTI
ONS
[
148SCRA 635] - Ther
ei
snodoubtt
hat
t
he cont
r
act i
n quest
i
on gave r
i
se t
o
r
eci
pr
ocal obl
i
gat
i
ons.
"
Reci
pr
ocal
obl
i
gat
i
ons ar
et
hose w/c ar
i
se f
r
om t
he
same cause,and i
n w/c each par
t
yi
sa
debt
or and a cr
edi
t
or oft
he ot
her
,such
t
hat t
he obl
i
gat
i
on ofone i
s dependent
upon t
heobl
i
gat
i
on oft
heot
her
.Theyar
e
t
o be per
f
or
med si
mul
t
aneousl
y
,so t
hat
t
he per
f
or
mance of one i
s condi
t
i
oned
upon t
he si
mul
t
aneous f
ul
fil
l
mentoft
he
ot
her
.
Thepowert
or
esci
ndi
sgi
ven t
ot
he
i
nj
ur
ed par
t
y
. Wher
et
hepl
t
ff i
st
hepar
t
y
who di
d notper
f
or
mt
he under
t
aki
ng w/c
he was bound by t
he t
er
ms of t
he
agr
eementt
oper
f
or
m,hei
snotent
i
t
l
ed t
o
i
nsi
stupon t
heper
f
or
manc
eoft
hec
ont
r
ac
t
by t
hedef
.
,orr
ec
overdamagesby r
eason
ofhi
sownbr
eac
h.
PI
LI
PI
NASBANK V.I
AC [
151SCRA 546]Aut
omat
i
cr
esci
ssi
on cannotbeavai
l
ed of
wher
e t
her
e i
s a cl
ear wai
ver of t
he
st
i
pul
at
ed r
i
ghtofaut
omat
i
cr
esci
ssi
on as
evi
denced byt
hemanyext
ensi
onsgr
ant
ed
t
o pr
vt r
esps.by pe
t
i
t
i
oner t
o pay t
hei
r
ar
r
ear
ages and updat
et
hei
ri
nst
al
l
ment
paymentundert
hecont
r
act
.
SONGCUAN V.I
AC [
191 SCRA 28] Nei
t
herdo we agr
ee t
hatt
he r
i
ghtoft
he
Al
vi
ar
st
or
epur
chase may be r
esci
nded
underAr
t
.1191. Songcuan asser
t
st
hat
t
heOct
.10,1966cont
r
actheent
er
edi
nt
o
w/ t
he Al
vi
ar
s cr
eat
ed a r
eci
pr
ocal
Downloaded by Assault Pro (assaultpro1003@gmail.com)
lOMoARcPSD|22267210
obl
i
gat
i
on be
t
.t
hem-f
orhi
mt
or
econvey
t
hesubj
ectpr
emi
sesandf
ort
heAl
vi
ar
st
o
l
easet
her
eal
t
i
est
ohi
m- andt
her
ef
usal
oft
hel
at
t
ert
of
ul
fil
lt
hei
robl
i
gat
i
on gi
ves
hi
mt
her
i
ght
,under1191,t
or
esci
nd "
t
he
r
i
ght of[
t
he Al
vi
ar
s]t
or
epur
chase" t
he
r
eal
t
i
es. Thepowert
or
esci
nd obl
i
gat
i
ons
i
si
mpl
i
edi
nr
eci
pr
ocalones,i
ncaseoneof
t
heobl
i
gor
sshoul
dnotcompl
yw/whati
s
i
ncumbentupon hi
m. xxx" (
Ar
t
.1191.
)
Theci
t
edl
aw i
snotappl
i
cabl
ei
nt
hi
scase.
Al
t
hough t
hepar
t
i
esar
eeach obl
i
gorand
obl
i
gee oft
he ot
her
,t
hei
r cor
r
espondi
ng
obl
i
gat
i
on can har
dl
ybecal
l
ed r
eci
pr
ocal
.
I
nr
eci
pr
ocalobl
i
gat
i
ons,t
heobl
i
gat
i
on of
one i
s a r
esol
ut
or
y condi
t
i
on of t
he
obl
i
gat
i
on oft
heot
her
,t
henonf
ul
fil
l
ment
ofw/cent
i
t
l
es t
heot
herpar
t
yt
or
esci
nd
t
hecont
r
act
.I
nt
hecaseatbar
,t
her
ear
e
2 separ
at
e and di
st
i
nctobl
i
gat
i
ons,each
i
ndependentoft
heot
her
.Theobl
i
gat
i
onof
Songcuan t
or
econvey t
hepr
oper
t
yi
snot
dependenton t
heobi
gat
i
on oft
heAl
vi
ar
s
t
ol
ease t
he pr
emi
ses t
ot
he f
or
mer
. The
obl
i
gat
i
onoft
heAl
vi
ar
si
snotan essent
i
al
par
toft
hecont
r
act
. Thi
si
sevi
denti
nt
he
wor
di
ngs of t
he "
P.
S. (
Addi
t
i
onal
condi
t
i
ons)
,
"i
t
sel
fw/cs
t
at
est
hat"
i
nt
he
event(
t
he Al
vi
ar
s)exer
ci
sed t
he r
i
ghtof
r
epur
chase xxx and becomes t
he owner
and possessoroft
hepr
emi
ses,t
heyshal
l
xxxbeobl
i
gedt
ogi
ve(
Songcuan)t
her
i
ght
ofl
ease and ar
exxx obl
i
ged t
o execut
ea
l
ease cont
r
actxxx.
" I
n ot
herwor
ds,t
he
obl
i
gat
i
on of t
he Al
vi
ar
s t
o l
ease t
o
Songcuant
hesubj
ectpr
emi
sesar
i
sesonl
y
af
t
ert
hel
at
t
erhad r
econveyed t
her
eal
t
i
es
t
ot
hem.
RAMOS V.CA [
179 SCRA 719] - The
r
i
ghtt
or
esci
nd acont
r
actmaybewai
ved.
I
nt
hecaseatbar
,t
her
emedypr
ovi
ded i
s
notr
esci
ssi
on undert
heNCC butt
hatse
t
f
or
t
hi
nt
he r
ul
es and r
egul
at
i
ons f
ort
he
Makat
iSt
ockExchange.
PRESBI
TERO V.CA [
217 SCRA 372] Resci
ssi
on of a cont
r
act wi
l
l not be
per
mi
t
t
edf
orasl
i
ghtorcasualbr
each,but
onl
yf
orsuchsubst
ant
i
alandf
undament
al
br
each aswoul
d def
eatt
heever
yobj
ectof
t
he par
t
i
es i
n maki
ng t
heagr
eement
;t
he
quest
i
on ofwhe
t
herabr
eachofcont
r
acti
s
subst
ant
i
aldepends upon t
he at
t
endi
ng
ci
r
cumst
ances.
TAYAG V.CA [
219 SCRA 480] - The
suggest
i
on ofpe
t
i
t
i
oner
st
hatt
hecovenant
must be cancel
l
ed i
n t
he l
i
ght of pvt
.
r
espondent
'
s socal
l
ed br
each seems t
o
over
l
ook pe
t
i
t
i
oner
'
s demeanor who,
i
nst
ead of i
mmedi
at
el
y fil
i
ng t
he case
pr
eci
sel
yt
or
esci
nd t
hei
nst
r
umentbec.of
noncompl
i
ance, al
l
owed pvt
.r
esp. t
o
effectnumer
ouspayment
spost
er
i
ort
ot
he
gr
aceper
i
odpr
ovi
dedi
nt
hecont
r
act
.Thi
s
apat
hy ofpe
t
i
t
i
oner
s who even per
mi
t
t
ed
pvt
.r
esp.t
ot
aket
hei
ni
t
i
at
i
vei
n fil
i
ngt
he
sui
tf
orspeci
ficper
f
or
manceagai
nstt
hem,
i
s aki
nt
o wai
verorabondonmentoft
he
r
i
ghtt
or
esci
nd nor
mal
l
yconf
er
r
edbyAr
t
.
1191,NCC.
xxx
I
ndeed,t
he r
i
ghtt
or
esc
i
nd i
s not
absol
ut
e and wi
l
lnotbe gr
ant
ed wher
e
t
her
e had been subst
ant
i
alc
ompl
i
anc
e by
par
t
i
al payment
s.
By and l
ar
ge,
pe
t
i
t
i
oner
'
sact
uat
i
on i
ssuscept
i
bl
eofbut
one cont
r
uct
i
on- t
hat t
hey ar
e now
est
opped f
r
om r
enegi
ng f
r
om t
hei
r
commi
t
menton accountofaccept
ance of
benefit
s ar
i
si
ng f
r
om over
due account
s of
pvt
.r
esp.
BI
NALBAGAN V.CA [
219SCRA 777] - A
par
t
y t
o a cont
r
act cannot demand
per
f
or
mance of t
he ot
her par
t
y'
s
pbl
i
gat
i
ons unl
ess he i
si
n a posi
t
i
on t
o
compl
yw/hi
sown obl
i
gat
i
ons. Si
mi
l
ar
l
y
,
t
he r
i
ght t
or
esci
nd a cont
r
act can be
demanded onl
yi
fapar
t
yt
her
e
t
oi
sr
eady
,
wi
l
l
i
ng and abl
et
o compl
y w/ hi
s own
obl
i
gat
i
onst
her
eunder
.
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BALANE CASE:
VERMEN V.CA [224 SCRA 549] - I
n
r
eci
pr
ocalobl
i
gat
i
ons,t
he per
f
or
mance of
one i
s condi
t
i
oned on t
he si
mul
t
aneous
f
ul
fil
l
mentoft
heot
herobl
i
gat
i
on.xxx
Gener
al
l
y
,r
esci
ssi
on ofa cont
r
act
wi
l
lnotbeper
mi
t
t
edf
orasl
i
ghtorcasual
br
each butonl
yf
orsuch subst
ant
i
aland
f
undament
albr
each as woul
d def
eatt
he
ver
yobj
ectoft
hepar
t
i
esi
n execut
i
ngt
he
agr
eeemt
n.
PRUDENCE REALTY V.CA [
231 SCRA
379] - Habana seeks r
esci
ssi
on oft
he
compr
omi
se agr
eement under Ar
t
.1191.
However
,t
hi
s pr
ovi
si
on appl
i
es onl
y t
o
r
ec
i
pr
oc
alobl
i
gat
i
onsi
n gener
aland nott
o
obl
i
gat
i
ons ar
i
si
ng f
r
om a j
udi
c
i
al
c
ompr
omi
se xxx.Thus: Judgmentupon
agr
eementoft
he par
t
i
es i
s mor
et
han a
mer
econt
r
actbi
ndi
ng upon t
hem;havi
ng
t
he sanct
i
on oft
he cour
tand ent
er
ed as
i
t
sde
t
er
mi
nat
i
on oft
hecont
r
over
syi
thas
t
hef
or
ceandeffectofanyot
herj
udgment
.
Quest
i
ons:
1. Can t
hepar
t
i
essuppr
esst
hi
sr
i
ghtt
o
r
esol
vei
nAr
t
.1191?
2. Can t
hey st
i
pul
at
et
hatt
he r
i
ghtof
r
esol
ut
i
on mustbeexer
ci
sed onl
yt
hr
ough
t
hecour
t
s?
3.Cant
hepar
t
i
esst
i
pul
at
et
hatt
her
ewi
l
l
be no mut
ual r
est
i
t
ut
i
on i
n case of
r
esol
ut
i
on?
Ar
t
.1192. I
n case bot
h par
t
i
es
havecommi
t
t
edabr
each oft
heobl
i
gat
i
on,
t
he l
i
abi
l
i
t
y oft
he fir
sti
nf
r
act
orshal
lbe
equi
t
abl
yt
emper
ed by t
he cour
t
s. I
fi
t
cannotbede
t
er
mi
nedwhi
ch oft
hepar
t
i
es
fir
stvi
ol
at
ed t
hecont
r
act
,t
hesameshal
l
be deemed ext
i
ngui
shed,and each shal
l
bearhi
sowndamages.
CENTRALV.CA [
231SCRA 379] - Si
nce
I
sl
and Savi
ngs Bank was i
n def
aul
ti
n
f
ul
fil
l
i
ng i
t
s r
eci
pr
ocal obl
i
t
ai
on under
t
hei
rl
oan agr
eement
,Sul
pi
ci
o Tol
ent
i
no,
underAr
t
.1191 may choose be
t
.speci
fic
per
f
or
manceorr
esci
ssi
on w/ damages i
n
ei
t
her case. But si
nce I
sl
and i
s now
pr
ohi
bi
t
ed f
r
om doi
ngf
ur
t
herbusi
nessby
t
heMone
t
ar
yBoar
dResol
ut
i
on,wecannot
gr
antspeci
fic per
f
or
mance i
nf
avor ofS.
Tol
ent
i
no.
Resci
ssi
on i
st
he onl
y al
t
er
nat
i
ve
r
emedy l
ef
t
. We r
ul
e, however
,t
hat
r
esci
ssi
on i
s onl
yf
or t
he P63,
000 l
oan,
bec.t
hebank i
si
n def
aul
tonl
yi
nsof
aras
such amounti
sconcer
ned,ast
her
ei
sno
doubt t
hat t
he bank f
ai
l
ed t
o gi
ve t
he
P63,
000. As f
arast
he par
t
i
alr
el
ease of
P17T, w/c S. Tol
ent
i
no accept
ed and
execut
ed a p/n t
o coveri
t
,t
he bank was
deemed t
ohavecompl
i
ed w/i
t
sr
eci
pr
ocal
obl
i
gat
i
ont
of
ur
ni
shaP17Tl
oan.Thep/n
gave r
i
se t
o S. Tol
ent
i
no'
s r
eci
pr
ocal
obl
i
gat
i
on t
o pay t
he P17T l
oan when i
t
f
al
l
s due. Hi
sf
ai
l
ur
et
o pay t
he over
due
amor
t
i
z
at
i
onsundert
hep/n madehi
m a
par
t
yi
n def
aul
t
, hence not ent
i
l
t
ed t
o
r
esci
ssi
on.I
ft
her
ei
sar
i
ghtt
or
esci
ndt
he
p/n,i
tshal
lbel
ongt
ot
heaggr
i
evedpar
t
y
,
t
hati
s,I
sl
and.I
fTol
ent
i
nohadnotsi
gned
ap/n se
t
t
i
ngt
hedat
ef
orpaymentofP17T
w/i
n3yr
s.
,hewoul
dbeent
i
t
l
edt
oaskf
or
r
esci
ssi
onoft
heent
i
r
el
oanbec.hecannot
possi
bl
ybei
ndef
aul
tast
her
ewasnodat
e
f
orhi
mt
oper
f
or
m hi
sr
eci
pr
ocalobl
i
gat
i
on
t
opay
.
xxx We r
ul
et
hatt
he l
i
abi
l
i
t
y of
I
sl
and f
ordamages i
n notf
ur
ni
shi
ng t
he
ent
i
r
el
oan i
s offse
t by t
he l
i
abi
l
i
t
y of
Sul
pi
ci
o M.Tol
ent
i
no f
ordamages,i
nt
he
f
or
m ofpenal
t
i
es and sur
char
ges,f
ornot
payi
nghi
sover
dueP17,
000debt(
t
hecour
t
ci
t
i
ngAr
t
.1192.
)
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C.Obl
i
gat
i
onswi
t
haper
i
od
3. Ast
ot
i
me.
- A per
i
od al
waysr
ef
ert
o
t
hef
ut
ur
e,whi
l
eacondi
t
i
on mayr
ef
ert
oa
pasteventunknownt
ot
hepar
t
i
es.
1.Ki
nds
Ar
t
.1193. Obl
i
gat
i
ons f
orwhose
f
ul
fil
l
menta 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 effectatonce,butt
er
mi
nat
e
uponar
r
i
valoft
hedaycer
t
ai
n.
A day cer
t
ai
ni
s under
st
ood t
o be
t
hat whi
ch must necessar
i
l
y come,
al
t
houghi
tmaynotbeknownwhen.
I
f t
he uncer
t
ai
nt
y consi
st
s i
n
whe
t
her t
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
ed by t
he r
ul
es oft
he pr
ecedi
ng
Sect
i
on.
4. Ast
owi
l
lofdebt
or
.
- A condi
t
i
on w/c
depends excl
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 debt
or
'
s wi
l
lmer
el
y empower
s
t
hecour
tt
ofixsuchper
i
od.
Bal
ane:
I
n a(
suspensi
ve)t
er
m,t
heobl
i
gat
i
on has
al
r
eady ar
i
sen except 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
ovementoft
he t
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:
ConceptofTer
m.
- At
er
m orper
i
od i
sa
spaceoft
i
mew/c,exer
t
i
ngani
nfluenceon
obl
i
gat
i
onsasaconsequenceofaj
ur
i
di
cal
act
, suspends t
hei
r demandabi
l
i
t
y or
de
t
er
mi
nes
t
hei
r
ext
i
ngui
shement
.
(
Manr
esa.
)
Di
st
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 event
,whi
l
ea t
er
m i
san event
t
hatmustnecessar
i
l
ycome,whe
t
heron a
dat
eknown bef
or
ehand orata t
i
mew/c
cannotbepr
ede
t
er
mi
ned.
2. As t
oi
nfluenc
e on t
he obl
i
gat
i
on.
Whi
l
e a condi
t
i
on gi
ves r
i
se t
o an
obl
i
gat
i
on or ext
i
ngui
shes one al
r
eady
exi
si
t
i
ng,a per
i
od hasno effectupon t
he
exi
st
ence of obl
i
gat
i
ons, but onl
yt
hei
r
demandabi
l
i
t
y or per
f
or
mance. Bec. of
t
hi
sdi
ffer
ence,aper
i
oddoesnotcar
r
yw/
i
t
, except when t
her
e i
s a speci
al
agr
eement
,anyr
e
t
r
oact
i
veeffect
.
Ar
t
.1189. When t
he condi
t
i
ons
have been i
mposed wi
t
ht
he i
nt
ent
i
on of
suspendi
ngt
heefficacyofan obl
i
gat
i
on t
o
gi
ve,t
hef
ol
l
owi
ngr
ul
esshal
lbeobser
ved
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
ostwi
t
houtt
he
f
aul
toft
hedebt
or
,t
heobl
i
gat
i
on shal
lbe
ext
i
ngui
shed;
(
2)I
ft
het
hi
ng i
sl
ostt
hr
ough t
he
f
aul
toft
hedebt
or
,heshal
lbeobl
i
ged t
o
pay damages;i
ti
s under
st
ood t
hat t
he
t
hi
ngi
sl
ostwhen i
tper
i
shes,orgoesout
ofcommer
ce,ordi
sappear
si
n such away
t
hati
t
sexi
st
encei
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
er
i
or
at
es t
hr
ough t
he
f
aul
toft
hedebt
or
,t
hecr
edi
t
ormaychoose
be
t
ween t
he r
esci
ssi
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
nei
t
hercase:
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(
5)I
ft
he t
hi
ng i
si
mpr
oved by i
t
s
nat
ur
e,orbyt
i
me,t
hei
mpr
ovementshal
l
i
nur
et
ot
hebenefitoft
hecr
edi
t
or
;
(
6)I
fi
ti
si
mpr
oved att
heexpense
oft
hedebt
or
,heshal
lhavenoot
herr
i
ght
t
hant
hatgr
ant
edt
ot
heusuf
r
uct
uar
y
.
Bal
ane:Ther
ear
et
hr
eer
equi
si
t
esi
nor
der
f
orAr
t
.1189t
oappl
y1. Ther
ei
sl
oss,de
t
er
i
or
at
i
on or
del
ay
2. Ther
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
er
i
or
at
i
on or
i
mpr
ovementbef
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
such
usef
ul
i
mpr
ovement
s or expenses
f
ormer
epl
easur
eashemay
deem pr
oper
, pr
ovi
ded he
does not al
t
er i
t
sf
or
m or
subst
ance; but he shal
l
have no r
i
ght t
o be
i
ndemni
fied t
her
ef
or
. He
may
,however
,r
emove such
i
mpr
ovement
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 per
i
od,
t
heobl
i
gorbei
ngunawar
eoft
heper
i
od or
bel
i
evi
ng t
hatt
he obl
i
gat
i
on has become
due and demandabl
e,may be r
ecover
ed,
wi
t
ht
hef
r
ui
t
sandi
nt
er
est
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
ves.
Bot
ht
het
hi
ngsand t
hef
r
ui
t
scan
ber
ecover
ed.
I
ft
het
er
m hasal
r
eadyar
r
i
ved,t
he
quest
i
on i
smootand academi
c. Butcan
her
ecovert
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
hedebt
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
herschool of
t
hought
,al
lt
hef
r
ui
t
sr
ecei
ved dur
i
ngt
he
pendencyoft
het
er
m bel
ongt
ot
hecr
edi
t
or
(
Cagui
oa.
)
When f
r
ui
t
s & i
nt
er
est
s cannot be
r
ecover
ed not
wi
t
hst
andi
ng pr
emat
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
mance(
by
bot
hpar
t
i
es)
;
2. When t
he obl
i
gat
i
on i
sa l
oan i
n w/c
t
hedebt
ori
sboundt
opayi
nt
er
est
;
3. When t
he per
i
od i
sf
ort
he cr
edi
t
or
'
s
excl
usi
vebenefit
;
4. When t
hedebt
ori
sawar
eoft
heper
i
od
andpaysanyway
.
2.Pr
esumedf
orwhosebenefit
Ar
t
. 1196.
Whenever i
n an
obl
i
gat
i
on a per
i
od i
s desi
gnat
ed, i
ti
s
pr
esumedt
ohavebeen est
abl
i
shed f
ort
he
benefitofbot
ht
hecr
edi
t
orandt
hedebt
or
,
unl
essf
r
om t
het
enoroft
hesameorot
her
ci
r
cumst
ances i
tshoul
d appear t
hatt
he
per
i
odhasbeenest
abl
i
shedi
nf
avorofone
oroft
heot
her
.
Bal
ane: Gener
al r
ul
e: I
f a per
i
od i
s
at
t
achedi
n anobl
i
gat
i
on,t
hepr
esumpt
i
on
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i
st
hati
ti
sf
ort
hebenefitofbot
h par
t
i
es.
The consequence i
s t
hat t
he cr
edi
t
or
cannotcompelt
heper
f
or
mancebef
or
et
he
ar
r
i
val of t
he t
er
m; t
he debt
or cannot
compelaccept
ance bef
.t
he ar
r
i
valoft
he
t
er
m.
I
ft
he t
er
m i
s f
or t
he benefit of t
he
cr
edi
t
or
.
- The cr
edi
t
or can demand
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
edi
t
orcannotdemand per
f
or
mance
anyt
i
me; but t
he debt
or can i
nsi
st on
per
f
or
manceanyt
i
me.
I
l
l
ust
r
at
i
ons: "
I pr
omi
se t
o pay
wi
t
hi
n 60 days.
" Thi
si
sat
er
m f
ort
he
benefitoft
hedebt
or
.
"
Ipr
omi
set
opayCl
ar
at
hesum of
P100,
000 on or bef
or
e Oct
. 31, 1996.
"
Thi
si
sat
er
mf
ort
hebenefitoft
hedebt
or
.
3.Whenper
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
cumst
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
her
eof
.
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 ever
y case, t
he cour
t
s shal
l
de
t
er
mi
ne such per
i
od as may undert
he
ci
r
cumst
ances have been pr
obabl
y
cont
empl
at
edbyt
hepar
t
i
es.Oncefixedby
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
cumst
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
her
eof
.
xxx
Except
i
ons: (
a)Ar
t
.1682
Ar
t
i
cl
e1682. Thel
easeofa pi
ece
ofr
ur
all
and,when i
t
s dur
at
i
on has not
been fixed, i
s under
st
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
ch t
he whol
e
est
at
el
eased may yi
el
di
n one year
,or
whi
ch i
tmayyi
el
d once,al
t
hough t
wo or
mor
e year
s may have t
o el
apse f
or t
he
pur
pose.
Ar
t
.1687,fir
st
sent
ence
Ar
t
i
cl
e 1687. I
ft
heper
i
od f
ort
he
l
easehasnotbeen fixed,i
ti
sunder
st
ood
t
o bef
r
om yeart
o year
,i
ft
her
entagr
eed
uponi
sannual
;f
r
om mont
ht
omont
h,i
fi
t
i
smont
hl
y;f
r
om week t
oweek,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
osal
ewher
et
heper
i
odi
snot
speci
fiedbyt
hepar
t
i
es
Ar
t
.1606. Ther
i
ghtr
ef
er
r
ed t
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 vendor a
r
et
r
o)
,i
n t
he absence of an expr
ess
agr
eement
,shal
ll
astf
ouryear
sf
r
om t
he
dat
eoft
hecont
r
act
.
xxx
(
c)
cont
r
act of
ser
vi
cesf
oran i
ndefini
t
et
er
m (
bec.fixi
ng
ofa per
i
od byt
hecour
t
s may amountt
o
i
nvol
unt
ar
yser
vi
t
ude)
2.Ar
t
.1197,par
.2
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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
ssi
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.
Wher
et
he def
. vi
r
t
ual
l
y admi
t
t
ed 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/ essent
i
alpar
t
s,mi
ssi
ng,he
cannoti
nvokeAr
t
.1197 oft
heNCC. The
t
i
me f
or compl
i
ance havi
ng evi
dent
l
y
expi
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 have fir
st
pe
t
i
t
i
oned t
hecour
tf
ofixaper
i
od f
ort
he
per
f
or
mance oft
he cont
r
actbef
or
e fil
i
ng
hi
scompl
ai
nti
nt
hi
scase. Thefixi
ngofa
per
i
odwoul
dt
husbeamer
ef
or
mal
i
t
yand
woul
dser
venopur
poset
hant
odel
ay
.
4. Ar
t
.1687,second,t
hi
r
d and f
our
t
h
sent
ences
Ar
t
. 1687. xxx However
, even
t
hough a mont
hl
yr
ent i
s pai
d,and no
per
i
od f
or t
he l
ease has been se
t
,t
he
cour
t
smayfixal
ongert
er
mf
ort
hel
ease
af
t
ert
hel
esseehasoccupi
edt
hepr
emi
ses
f
oroveroneyear
.I
ft
her
enti
sweekl
y
,t
he
cour
t
s may l
i
kewi
se de
t
er
mi
ne a l
onger
per
i
od af
t
er t
he l
essee has been i
n
possessi
on f
oroversi
xmont
hs. I
n caseof
dai
l
yr
ent
,t
hecour
t
smayal
sofixal
onger
per
i
od af
t
ert
he l
essee has st
ayed i
nt
he
pl
acef
oroveronemont
h.
5.Ar
t
.1180
Ar
t
.1180. When t
hedebt
orbi
nds
hi
msel
ft
opaywhenhi
smeansper
mi
thi
m
t
odoso,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:
ENCARNACI
ON V.BALDOMAR [
77P470]
- Thecont
i
nuance and f
ul
fil
l
mentoft
he
cont
r
act of l
ease cannot be made t
o
depend sol
el
y and excl
usi
vel
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
el
ydepr
i
vi
ngt
heownerofal
lsayi
n
t
he mat
t
er
. For i
ft
hi
s wer
e al
l
owed,so
l
ongasdef
s.el
ect
ed t
ocont
i
nuet
hel
ease
by cont
i
nui
ng t
he paymentoft
he r
ent
al
s
t
he owner woul
d never be abl
e t
o
di
scont
i
nue i
t
; conver
sel
y
, al
t
hough t
he
ownershoul
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
ef
ert
ot
er
mi
nat
e
t
he cont
r
act by t
he si
mpl
e expedi
ent of
st
oppi
ngpaymentoft
her
ent
al
s. Thi
s,of
cour
se,i
spr
ohi
bi
t
edbyar
t
.1256,NCC.
ELEI
ZEUI V. LAWN TENNI
S CLUB [
2
P309] - The t
er
m of a l
ease whose
t
er
mi
nat
i
on i
sexpr
essl
yl
ef
tt
ot
hewi
l
lof
t
he l
essee must be fixed by t
he cour
t
s
accor
di
ngt
ot
hechar
act
erand condi
t
i
ons
oft
hemut
ualunder
t
aki
ngs,i
n an act
i
on
br
oughtf
ort
hatpur
posexxx.
CHAVEZ V.GONZALES [
32 SCRA 547] Wher
e obl
i
gat
i
on does not fix a per
i
od;
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lOMoARcPSD|22267210
PHI
LBANKI
NG V.LUISHE [
21SCRA53]Al
easet
oan al
i
en f
orar
easonabl
eper
i
od
i
sval
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
samewassol
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
mayfixt
hedur
at
i
on oft
heobl
i
gat
i
on i
fi
t
doesnotfixaper
i
od,doesnotappl
y
.
ARANETA,I
NC.V.PHI
L.SUGAR ESTATES
[
20SCRA 330]- xxx Ar
t
.1197i
nvol
vesa
t
wo-st
ep pr
ocess. (
1) The Cour
tmust
fir
st de
t
er
mi
ne t
hat "
t
he obl
i
gat
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
cumst
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
tmust
t
hen pr
oceed t
ot
he second st
ep, and
deci
de what per
i
od was "
pr
obabl
y
cont
empl
at
ed 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
oni
ti
sorshoul
dbe
r
easonabl
e,butmustse
tt
het
i
met
hatt
he
par
t
i
esar
eshownt
ohavei
nt
ended.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
nalper
i
od of5 yr
s.
,
w/chadexpi
r
ed. I
ti
sal
socl
earf
r
om par
.
13oft
hecont
r
actt
hatt
hepar
t
i
esr
eser
ved
t
ot
hemsel
vest
hef
acul
t
yofagr
eei
ngupon
t
he per
i
od oft
he r
enewalcont
r
act
. The
2nd par
. of Ar
t
. 1197 i
s equal
l
y
i
nappl
i
cabl
e si
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
esseeal
one,butr
at
hert
ot
hewi
l
lof
bot
h t
he l
essor and t
he l
essee. Most
i
mpor
t
ant
l
y
,Ar
t
.1197 appl
i
esonl
y wher
e
acont
r
actofl
easecl
ear
l
yexi
st
s.Her
e,t
he
cont
r
actwasnotr
enewedatal
l
,t
her
ewas
i
nf
actnocont
r
actatal
lt
heper
i
odofw/c
coul
dhavebeenfixed.
Ar
t
.1180. When t
hedebt
orbi
nds
hi
msel
ft
opaywhenhi
smeansper
mi
thi
m
t
odoso,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 debt
or shal
ll
ose
ever
yr
i
ghtt
omakeuseoft
heper
i
od:
(
1)When af
t
er t
he obl
i
gat
i
on has
been cont
r
act
ed, he becomes i
nsol
vent
,
unl
esshegi
vesaguar
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
ch
hehaspr
omi
sed;
(
3)When by hi
s own act
s he has
i
mpai
r
edsai
dguar
ant
i
esorsecur
i
t
i
esaf
t
er
t
hei
rest
abl
i
shment
,and when t
hr
ough a
f
or
t
ui
t
ouseventt
heydi
sappear
,unl
esshe
i
mmedi
at
el
y gi
ves 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
cht
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
hesubst
anceorqual
i
t
yoft
he
t
hi
ngpl
edged,hemayei
t
hercl
ai
m anot
her
t
hi
ng i
ni
t
s st
ead,ordemand i
mmedi
at
e
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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
vencyi
snotr
equi
r
ed.
2.Ac
c
or
di
ngt
opl
ur
al
i
t
yofobj
ec
t
s:
A.Si
mpl
e
Bal
ane: Towhom doest
her
i
ghtofchoi
ce
bel
ong? Gener
alr
ul
e: Tot
hedebt
or(
Ar
t
.
1200.
)
Except
i
on:
When expr
essl
y
gr
ant
edt
ot
hecr
edi
t
or
Ther
ei
sa t
hi
r
d possi
bi
l
i
t
y wher
e
t
hechoi
cemaybemadebyat
hi
r
dper
son
uponagr
eementoft
hepar
t
i
es.
Q: Whati
st
he t
echni
calt
er
m of
t
he actofmaki
ng a choi
ce i
n al
t
er
nat
i
ve
obl
i
gat
i
ons?
A:Concent
r
at
i
on.
B.Mul
t
i
pl
e
1. Conj
unct
i
ve wher
et
he
debt
or must per
f
or
m mor
e t
han one
pr
est
at
i
on
2. Al
t
er
nat
i
ve Obl
i
gat
i
ons
wher
et
hedebt
ormustper
f
or
m anyoft
he
pr
est
at
i
ons
3. Facul
t
at
i
ve wher
e onl
y
one t
hi
ng i
s due but t
he debt
or has
r
eser
ved t
he r
i
ght t
o subst
i
t
ut
ei
t w/
anot
her(
I
VTol
ent
i
no)(
Ar
t
.1206.
)
Al
t
er
nat
i
veObl
i
gat
i
ons
Ar
t
.1199. A per
son al
t
er
nat
i
vel
y
bound by di
ffer
ent pr
es
t
at
i
ons shal
l
compl
e
t
el
yper
f
or
m oneoft
hem.
Thecr
edi
t
orcannotbecompel
l
edt
o
r
ecei
ve par
tofone and par
toft
he ot
her
under
t
aki
ng.
Tol
ent
i
no: Thechar
act
er
i
st
i
cofal
t
er
nat
i
ve
obl
i
gat
i
ons i
st
hat
,sever
alobj
ect
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
thasbeen
expr
essl
ygr
ant
edt
ot
hecr
edi
t
or
.
The debt
orshal
lhave no r
i
ghtt
o
choose t
hose pr
est
at
i
ons whi
ch ar
e
i
mpossi
bl
e,unl
awf
ulor whi
ch coul
d not
havebeent
heobj
ectoft
heobl
i
gat
i
on.
Ar
t
. 1201.
The choi
ce shal
l
pr
oduce no effectexceptf
r
om t
he t
i
me i
t
hasbeencommuni
cat
ed.
Bal
ane:Requi
r
ementofCommuni
cat
i
onof
choi
ce.
- I
ft
he choi
ce bel
ongs t
ot
he
cr
edi
t
or
,ofcour
se,hehast
ocommuni
cat
e
hi
schoi
cet
ot
hedebt
or
. Thedebt
ori
snot
apr
ophe
t
.
Q: I
ft
he choi
ce bel
ongs t
ot
he
debt
or
,whyr
equi
r
ecommuni
cat
i
on bef
or
e
per
f
or
mance i
ft
he choi
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
.Sempi
oDy
,46P592.
)
BUThow cant
hecr
edi
t
ori
mpugni
t
i
ft
he choi
ce bel
ongs t
ot
he debt
or
. The
be
t
t
err
eason woul
d bet
ogi
vet
hecr
edi
t
or
achancet
opr
epar
ef
ort
heper
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 bef
or
e
per
f
or
mance.
1.I
ft
hechoi
cei
sdebt
or
'
s
a. When onl
yonepr
est
at
i
on i
sl
ef
t
(
whe
t
her or not t
he t
he r
est of t
he
pr
est
at
i
ons have been l
ost t
hr
ough
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f
or
t
ui
t
ouseventort
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 debt
or shal
ll
ose
t
he r
i
ght of choi
ce when among t
he
pr
est
at
i
ons wher
eby he i
s al
t
er
nat
i
vel
y
bound,onl
yonei
spr
act
i
cabl
e.
b. I
ft
hechoi
cei
sl
i
mi
t
ed t
hr
ough
t
hecr
edi
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
edi
t
or
'
s
act
st
he debt
or cannot make a choi
ce
accor
di
ng t
ot
he t
er
ms oft
he obl
i
gat
i
on,
t
he l
at
t
er may r
esci
nd t
he cont
r
actwi
t
h
damages.
c. I
fever
yt
hi
ngi
sl
ostt
hr
ough t
he
debt
or
'
s f
aul
t
,t
he l
at
t
er i
s l
i
abl
e t
o
i
ndemni
f
yt
hecr
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
vel
yt
heobj
ectof
t
he obl
i
gat
i
on have been l
ost
, 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
astt
hi
ngwhi
ch
di
sappear
ed,ort
hatoft
he ser
vi
ce whi
ch
l
astbecamei
mpossi
bl
e.
Damages ot
her t
han t
he val
ue of
t
he l
ast t
hi
ng or ser
vi
ce may al
so be
awar
ded.
d. I
fsomet
hi
ngsar
el
ostt
hr
ough
t
he debt
or
'
sf
aul
t
,t
he debt
or can st
i
l
l
choosef
r
om t
hoser
emai
ni
ng.
e. I
fal
lar
el
ostt
hr
ough f
or
t
ui
t
ous
event
,t
heobl
i
gat
i
oni
sext
i
ngui
shed.
f
.I
fal
lpr
est
at
i
onsbutonear
el
ost
t
hr
ough f
or
t
ui
t
ous event
, and t
he
r
emai
ni
ngpr
est
at
i
on wasl
ostt
hr
ough t
he
debt
or
'
s f
aul
t
,t
he l
at
t
er i
s l
i
abl
e t
o
i
ndemni
f
yt
hecr
edi
t
orf
ordamages.
g. I
fal
lbutone ar
el
ostt
hr
ough
t
hef
aul
toft
hedeborandt
hel
astonewas
l
ostt
hr
ough t
hr
ough f
or
t
ui
t
ousevent
,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 choi
ce has
been expr
essl
y gi
ven t
ot
he cr
edi
t
or
,t
he
obl
i
gat
i
on shal
l cease t
o be al
t
er
nat
i
ve
f
r
om t
hedaywhen t
hesel
ect
i
on hasbeen
communi
cat
edt
ot
hedebt
or
.
Unt
i
lt
hen t
her
esponsi
bi
l
i
t
yoft
he
debt
orshal
lbe gover
ned by t
he f
ol
l
owi
ng
r
ul
es:
(
1) I
f one of t
he t
hi
ngs i
sl
ost
t
hr
ough a f
or
t
ui
t
ous event
, he shal
l
per
f
or
m t
he obl
i
gat
i
on by del
i
ver
i
ng t
hat
whi
ch t
he cr
edi
t
or shoul
d choose f
r
om
among t
he r
emai
nder
, or t
hat whi
ch
r
emai
nsi
fonl
yonesubsi
st
s;
(
2)I
ft
hel
oss ofone oft
het
hi
ngs
occur
st
hr
ough t
hef
aul
toft
hedebt
or
,t
he
cr
edi
t
ormaycl
ai
m anyoft
hosesubsi
st
i
ng,
or t
he pr
i
ce oft
hatwhi
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
ostt
hr
ough
t
he f
aul
toft
he debt
or
,t
he choi
ce by t
he
cr
edi
t
orshal
lf
al
lupont
hepr
i
ceofanyone
oft
hem,al
sowi
t
hi
ndemni
t
yf
ordamages.
Thesamer
ul
esshal
lbeappl
i
ed t
o
obl
i
gat
i
onst
odoornott
odoi
n caseone,
some or al
l of t
he pr
es
t
at
i
ons shoul
d
becomei
mpossi
bl
e.
a. I
foneorsomear
el
ostt
hr
ough
f
or
t
ui
t
ous event
,t
he cr
edi
t
ormay choose
f
r
om t
hose r
emai
ni
ng.
- Ar
t
. 1205 (
1)
,
supr
a.
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lOMoARcPSD|22267210
b. I
foneorsomear
el
ostt
hr
ough
t
hedebt
or
'
sf
aul
t
,t
hecr
edi
t
orhaschoi
ce
f
r
om t
he r
emai
nder or t
he val
ue oft
he
t
hi
ngsl
ostpl
usdamages.
- Ar
t
.1205 (
2)
,
supr
a.
c. I
f al
l ar
el
ost t
hr
ough t
he
debt
or
'
sf
aul
t
,t
he choi
ce oft
he cr
edi
t
or
shal
lf
al
lupont
hepr
i
ceofanyoft
hem,w/
i
ndemni
t
yf
or damages.
- Ar
t
.1205 (
3)
,
supr
a.
d. I
fsome ar
el
ost t
hr
ough t
he
cr
edi
t
or
'
sf
aul
t
,t
he cr
edi
t
or may choose
f
r
om t
her
emai
nder
.
e. I
fal
lar
el
ostt
hr
ough f
or
t
ui
t
ous
event
,t
heobl
i
gat
i
oni
sext
i
ngui
shed.
f
. I
f al
l ar
e l
ost t
hr
ough t
he
cr
edi
t
or
'
s f
aul
t
, t
he obl
i
gat
i
on i
s
ext
i
ngui
shed.
Facul
t
at
i
veobl
i
gat
i
ons
Ar
t
. 1206.
When onl
y one
pr
est
at
i
on hasbeen agr
eed upon,butt
he
obl
i
gor may r
ender anot
her i
n subst
i
t
ut
i
on,t
heobl
i
gat
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 subst
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
subst
i
t
ut
i
on hasbeen made,t
heobl
i
gori
s
l
i
abl
ef
or t
he l
oss of t
he subst
i
t
ut
e on
accountofhi
sdel
ay
,negl
i
genceorf
r
aud.
2. Ast
onul
l
i
t
y: I
nal
t
er
nat
i
veobl
i
gat
i
ons,
t
he nul
l
i
t
y of one pr
est
at
i
on does not
i
nval
i
dat
et
he obl
i
gat
i
on, w/c i
s st
i
l
li
n
f
or
cew/r
espectt
ot
hosew/chavenovi
ce;
whi
l
ei
n f
acul
t
at
i
ve, t
he nul
l
i
t
y of t
he
pr
i
nci
pal pr
est
at
i
on i
nval
i
dat
es t
he
obl
i
gat
i
on andt
hecr
edi
t
orcannotdemand
t
hesubst
i
t
ut
eevenwhent
hi
si
sval
i
d.
3.Ast
oc
hoi
c
e: I
nal
t
er
nat
i
ve,t
her
i
ghtt
o
choosemaybegi
ven t
ot
hecr
edi
t
or
;whi
l
e
i
nf
acul
t
at
i
ve,onl
yt
hedebt
or can choose
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
est
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
ve, t
he
i
mpossi
bi
l
i
t
yoft
hepr
i
nci
palpr
est
at
i
on i
s
suffici
ent t
o ext
i
ngui
sh t
he obl
i
gat
i
on,
eveni
ft
hesubst
i
t
ut
ei
spossi
bl
e.
Bal
ane: Facul
t
at
i
ve obl
i
gat
i
ons al
ways
i
nvol
vechoi
cebyt
hedebt
or
.
I
nt
heor
y
,i
ti
seasyt
odi
st
i
ngui
sh
af
acul
t
at
i
veobl
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
st
i
ngui
sh t
het
wo. You j
usthavet
ofind
outwhatt
hepar
t
i
esr
eal
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
er
nat
i
ve.
-
Di
st
i
ngui
shed
f
r
om
1. Ast
oc
ont
ent
soft
heobl
i
gat
i
on: I
nt
he
al
t
er
nat
i
ve,t
her
e ar
e var
i
ous pr
est
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 const
i
t
ut
es t
he
obl
i
gat
i
on, t
he accessor
y bei
ng onl
y a
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/ceachoft
hedebt
or
s
i
sl
i
abl
eonl
yf
orapr
opor
t
i
onat
epar
toft
he
debtoreach cr
edi
t
ori
sent
i
t
l
ed onl
yt
oa
pr
opor
t
i
onat
epar
toft
hecr
edi
t
.
I
nj
oi
nt obl
i
gat
i
ons, t
her
e ar
e as
many obl
i
gat
i
ons as t
her
e ar
e debt
or
s
mul
t
i
pl
i
edbyt
henumberofcr
edi
t
or
s.
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Ther
e ar
e t
hr
ee ki
nds of j
oi
nt
obl
i
gat
i
ons: (
1) Ac
t
i
ve j
oi
nt wher
et
he
obl
i
gat
i
oni
sj
oi
ntont
hecr
edi
t
or
'
ssi
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
her
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
var
i
ousl
y t
er
med manc
omunada or
manc
omunada si
mpl
e or pr
or
at
a. The
phr
ase"
Wepr
omi
set
o pay
,
"used by2 or
mor
esi
gner
s,cr
eat
esapr
or
at
al
i
abi
l
i
t
y
.
Effect
sofJoi
ntLi
abi
l
i
t
y:
1. Thedemand byonecr
edi
t
orupon one
debt
or
,pr
oducest
heeffect
sofdef
aul
tonl
y
w/ r
espectt
ot
hecr
edi
t
orwho demanded
and t
hedebt
oron whom t
hedemand was
made,butnotw/r
espectt
ot
heot
her
s;
2. Thei
nt
er
r
upt
i
on ofpr
escr
i
pt
i
on byt
he
j
udi
ci
aldemand ofone cr
edi
t
or upon a
debt
or
,doesnotbenefitt
heot
hercr
edi
t
or
s
nori
nt
er
r
uptt
hepr
escr
i
pt
i
on ast
o ot
her
debt
or
s. On t
hesamepr
i
nci
pl
e,apar
t
i
al
paymentoracknowl
edgementmadebyone
ofsever
alj
oi
ntdebt
or
s does nots
t
op t
he
r
unni
ngoft
hest
at
ut
eofl
i
mi
t
at
i
onsast
o
t
heot
her
s;
3. The vi
ces ofeach obl
i
gat
i
on ar
i
si
ng
f
r
om t
he per
sonaldef
ect ofa par
t
i
cul
ar
debt
or or cr
edi
t
or does not affect t
he
obl
i
gat
i
onorr
i
ght
soft
heot
her
s;
4. The i
nsol
vency ofa debt
or does not
i
ncr
ease t
he r
esponsi
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
snotext
endedf
r
om
onedebt
ort
oanot
her
.(
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
ch 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 cr
edi
t or
debtshal
lbepr
esumed t
obedi
vi
ded i
nt
o
as many equal shar
es as t
her
e ar
e
cr
edi
t
or
s ordebt
or
s,t
he cr
edi
t
s ordebt
s
bei
ng consi
der
ed di
st
i
nct f
r
om one
anot
her
, 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
nstal
lt
hedebt
or
s.I
foneof
t
he l
at
t
ershoul
d be i
nsol
vent
,t
he ot
her
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
ver
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
st
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
ndemni
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 have
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 oft
he val
ue oft
he ser
vi
ce i
n
whi
cht
heobl
i
gat
i
onconsi
st
s.
b.Sol
i
dar
yobl
i
gat
i
ons
Bal
ane:Sol
i
dar
yObl
i
gat
i
ons.
- Asol
i
dar
y
obl
i
gat
i
oni
sonei
nw/ct
hedebt
ori
sl
i
abl
e
f
ort
heent
i
r
eobl
i
gat
i
on oreach cr
edi
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.
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Ther
ear
et
hr
eeki
ndsofsol
i
dar
i
t
y:
(
1) Ac
t
i
vesol
i
dar
ywher
et
her
ear
esever
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 wher
e
t
her
ei
s one cr
edi
t
or w/ sever
aldebt
or
s
sol
i
dar
ybound;(
3)Mi
xedSol
i
dar
i
t
ywher
e
t
her
e ar
e sever
al cr
edi
t
or
s and sever
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
ntandsever
alori
nsol
i
dum.
I
t has al
so been hel
d t
hat t
he t
er
ms
"
j
unt
os osepar
adament
e"i
n a pr
omi
ssor
y
not
ecr
eat
esasol
i
dar
yr
esponsi
bi
l
i
t
y;t
hat
wher
et
her
ear
enowor
dsused t
oi
ndi
cat
e
t
he char
act
erofa l
i
abi
l
i
t
y
,t
he phr
ase "
I
pr
omi
set
opay
,
"f
ol
l
owedbyt
hesi
gnat
ur
es
of2 or mor
e per
sons, 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
eeementt
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
)
Act
i
ve
Sol
i
dar
i
t
y
Ar
t
. 1211. Sol
i
dar
i
t
y may exi
st
al
t
hough t
he cr
edi
t
or
s and t
he debt
or
s
may notbe bound i
nt
he same manner
andbyt
hesameper
i
odsandcondi
t
i
ons.
Ar
t
.1207. Theconcur
r
enceoft
wo
ormor
ecr
edi
t
or
soroft
woormor
edebt
or
s
i
n one and t
he same obl
i
gat
i
on does not
i
mpl
yt
hateach one oft
he f
or
merhas a
r
i
ghtt
o demand,ort
hateach one oft
he
l
at
t
eri
sboundt
or
ender
,ent
i
r
ecompl
i
ance
wi
t
h t
he pr
est
at
i
on. Ther
e i
s sol
i
dar
y
l
i
abi
l
i
t
yonl
ywhen t
heobl
i
gat
i
on expr
essl
y
sost
at
es,orwhen t
hel
aw ort
henat
ur
eof
t
heobl
i
gat
i
onr
equi
r
essol
i
dar
i
t
y
.
Bal
ane: When i
san obl
i
gat
i
on w/sever
al
par
t
i
es on ei
t
her si
de Joi
ntorSol
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
hatasol
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
expr
essl
ysost
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
st
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 cr
edi
t
or does not
t
r
ansmi
tt
hesol
i
dar
i
t
yt
oeach ofhi
shei
r
s
but t
o al
lof 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
lot
her
ac
t
sw/ct
end t
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 must
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 cr
edi
tonce pai
di
s shar
ed equal
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
hecr
edi
t
or
sbut
i
fany demand,j
udi
ci
alorext
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
nsuc
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 st
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;
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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
cs wer
e t
aken f
r
om I
V
Tol
ent
i
no.
)
I
V Tol
ent
i
no: When t
he l
aw r
equi
r
es
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
ncl
ude al
lper
sons who
commmand,i
nst
i
gat
e,pr
omot
e,encour
age,
advi
se,count
encance,cooper
at
ei
n,ai
d or
abe
tt
he commi
ssi
on of a t
or
t
, or who
appr
ove ofi
t
,af
t
eri
ti
s done,i
fdone f
or
t
hei
rbenefit
.
Char
act
er
i
st
i
csofPassi
veSol
i
dar
i
t
y:
1.Eachdebt
ormayber
equi
r
edt
opayt
he
ent
i
r
eobl
i
gat
i
on butaf
t
erpayment
,hecan
r
ecoverf
r
om t
hecodebt
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
er
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 doesnotpr
ej
udi
c
et
heot
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
es19t
o22oft
heNCC. I
f2ormor
e
per
sonsact
i
ngj
oi
nt
l
ybecomel
i
abi
l
eunder
t
hese pr
ovi
si
ons,t
hei
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
vi
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
hey ar
e mor
al
l
y
wr
ong. A mor
alwr
ongcannotbedi
vi
ded
i
nt
o par
t
s;hence,t
hel
i
abi
l
i
t
yf
ori
tmust
besol
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
nstt
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
on affec
t
sonl
yt
heshar
e
ofone debt
or
,t
he ot
her debt
or
s ar
e st
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
ossi
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 wer
e t
aken f
r
om I
V
Tol
ent
i
no.
)
132S 274] - Cl
ear
l
y
RONQUI
LLO V.CA [
t
hen, by t
he expr
ess t
er
m of t
he
compr
omi
se agr
eement and t
he deci
si
on
based upon i
t
, t
he def
s. obl
i
gat
ed
t
hemsel
ves 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
er
m
"
i
ndi
vi
dual
l
y" has t
he same meani
ng as
"
col
l
ect
i
vel
y
,
""
separ
at
el
y
,
""
di
st
i
nct
i
vel
y
,
"
"
r
espect
i
vel
y"or"
sever
al
l
y
.
" An agr
eement
t
o be "
i
ndi
vi
dual
l
y l
i
abl
e" undoubt
edl
y
cr
eat
esasever
alobl
i
gat
i
on,anda"
sever
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
ase j
unt
os or
separ
adament
e used i
n t
he p/n i
s an
expr
ess s
t
at
ement 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
hedef
s.
madet
hemsel
vesi
ndi
vi
dual
l
yl
i
abl
ef
ort
he
debt
si
ncur
r
edt
heyar
eeachl
i
abl
eonl
yf
or
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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 same i
s
t
her
ef
or
e enf
or
ceabl
e agai
nst one of t
he
numer
ousobl
i
gor
s.
MALAYAN I
NSURANCE V.CA [
165S 536]
- The di
r
ec
tl
i
abi
l
i
t
y oft
he i
nsur
erunder
i
ndemni
t
y c
ont
r
ac
t
s agai
nst 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
he ot
herpar
t
i
es f
ound atf
aul
t
.
Whi
l
ei
ti
st
r
uet
hatwher
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 per
sons,such 3r
d per
sons
can di
r
ect
l
y suet
hei
nsur
er
,however
,t
he
di
r
ect l
i
abi
l
i
t
y oft
he i
nsur
er under t
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
herpar
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
nsur
ed i
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
tcannot
,asi
ncor
r
ect
l
yhel
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
easor
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
oner
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
esul
ti
n a
vi
ol
at
i
on of t
he pr
i
nci
pl
es under
l
yi
ng
sol
i
dar
y obl
i
gat
i
ons and i
nsur
ance
cont
r
act
s.
RCBC V.CA [
178 S 739] - Wher
e an
obl
i
gat
i
on expr
essl
y st
at
es a sol
i
dar
y
l
i
abi
l
i
t
yt
he concur
r
ence of 2 or mor
e
cr
edi
t
or
sor2 ormor
edebt
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
each oneoft
hel
at
t
eri
sbound t
or
ender
,
ent
i
r
e compl
i
ance w/ t
he pr
est
at
i
on (
Ar
t
.
1207.
) The cr
edi
t
ormay pr
oceed agai
nst
anyoneoft
hesol
i
dar
ydebt
or
sorsomeor
al
loft
hem si
mul
t
aneousl
y
.
QUI
SI
MBI
NG V.CA [
189 S 325] - Joi
nt
obl
i
gat
i
on di
st
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
st
i
ngui
ng i
tf
r
om t
he j
oi
nt obl
i
gat
i
on,
Tol
ent
i
no makes t
he ff.obser
vat
i
on: A
j
oi
ntobl
i
gat
i
on i
sonei
n w/ceach 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 each 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
n w/c
each debt
or i
s l
i
abl
e f
or t
he ent
i
r
e
obl
i
gat
i
on,and each cr
edi
t
ori
sent
i
t
l
ed t
o
demand t
he whol
e obl
i
gat
i
on. Hence,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 each
debt
orcan bemadet
o pay onl
y hi
spar
t
;
wher
eas,i
nt
he l
at
t
er
,each cr
edi
t
ormay
enf
or
ce t
he ent
i
r
e obl
i
gat
i
on, and each
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
essenceofact
i
vesol
i
dar
i
t
yconsi
st
si
nt
he
aut
hor
i
t
y ofeach cr
edi
t
or t
o cl
ai
m and
enf
or
cet
her
i
ght
s ofal
l
,w/ t
her
esul
t
i
ng
obl
i
gat
i
on of payi
ng ever
y one what
bel
ongst
ohi
m;t
her
ei
sno mer
ger
,much
l
ess a r
enunci
at
i
on of r
i
ght
s, but onl
y
mut
ualr
est
i
t
ut
i
on.
REPUBLI
C PLANTERS BANK [
216 S 738]
- Ani
nst
r
umentw/cbegi
nsw/"
I
,
""
WE"or
"
Ei
t
herofus"pr
omi
set
opay,when si
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
cat
es t
hat t
he
pr
omi
se i
si
ndi
vi
dual as t
o each ot
her
;
meani
ng t
hat each of t
he cosi
gner
si
s
deemed t
o have made an i
ndependent
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
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lOMoARcPSD|22267210
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 sever
al
" as descr
i
bi
ng t
he
uncondi
t
i
onalpr
omi
set
opayt
ot
heor
der
ofRepubl
i
cPl
ant
er
sBank.xxx
CERNA V.CA [
220 SCRA 517] - Onl
y
Del
gadosi
ngedt
hep/n andaccor
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
st
r
e
t
ch oft
he i
magi
nat
i
on,pe
t
i
t
i
onerwas
hel
d sol
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
)
her
ei
s sol
i
dar
yl
i
abi
l
i
t
y
onl
y when t
he obl
i
gat
i
on expr
essl
y so
st
at
es,orwhent
hel
aw ort
henat
ur
eoft
he
obl
i
gat
i
onr
equi
r
essol
i
dar
i
t
y
.
Ar
t
.1212.Eachoneoft
hesol
i
dar
y
cr
edi
t
or
smaydowhat
evermaybeusef
ult
o
t
heot
her
s,butnotanyt
hi
ngwhi
ch 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
.1212st
at
est
hat
t
heagencyext
endsonl
yt
ot
hi
ngsw/cwi
l
l
benefital
lcocr
edi
t
or
s. Butnotanyt
hi
ng
w/c i
s pr
ej
udi
ci
calt
ot
he l
at
t
er
. I
n Ar
t
.
1215,hecan doan act
spr
ej
udi
ci
alt
ot
he
ot
hercr
edi
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
y cr
edi
t
or
s;buti
fany
demand,j
udi
ci
alorext
r
aj
udi
ci
al
,hasbeen
madebyoneoft
hem,paymentshoul
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
hedebt
or
,i
n w/ccase
t
hel
at
t
ermustpayt
hedemandi
ngcr
edi
t
or
onl
y
.
Cases:
1.Debt
oruponwhom demandwas
madepayst
oacr
edi
t
orot
hert
han t
heone
whomadet
hedemand i
n vi
ol
at
i
on ofAr
t
.
1214.
- Thi
si
s consi
der
ed paymentt
oa
t
hi
r
d per
son (
Ar
t
.1241,par
.2)and t
he
debt
orcan st
i
l
lbemadet
o pay t
hedebt
.
Theonl
yconcessi
on gi
ven t
ot
hedebt
ori
s
t
hathei
sal
l
owed t
o deductt
heshar
eof
t
he r
ecei
vi
ng cr
edi
t
or f
r
om t
he t
ot
al
amount due even i
fhe pai
dt
he ent
i
r
e
amountduet
ot
hatcr
edi
t
or
.
2. Cr
edi
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
o comment
at
or
s he can. But
t
hi
si
s danger
ous bec.t
her
e may al
r
eady
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
eedebt
or
s-X,Y &
Z. A makes 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
emi
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 have
execut
ed any oft
hese act
s,aswel
lashe
whocol
l
ect
st
hedebt
,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
hem.
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lOMoARcPSD|22267210
Ar
t
. 1219.
The
r
emi
ssi
on made by t
he
cr
edi
t
oroft
he shar
e whi
ch
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 bef
or
et
he r
emi
ssi
on
waseffect
ed.
Ar
t
.1915. I
ft
wo ormor
eper
sons
have appoi
nt
ed 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
er
a: Pr
i
nci
pal
s ar
e al
ways l
i
abl
e
sol
i
dar
i
l
y;Agent
s ar
e notl
i
abl
e sol
i
dar
i
l
y
unl
essexpr
essl
yst
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 agai
nst 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
nstone
oft
hem shal
lnotbean obst
acl
et
ot
hose
whi
ch may subsequent
l
y be di
r
ect
ed
agai
nstt
heot
her
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
et
ai
ns j
ur
i
sdi
c
t
i
on t
oc
ont
i
nue
hear
i
ngt
hec
har
geasagai
nstt
hesur
vi
vi
ng
def
endant
s.
- I
ti
s cr
yt
alcl
eart
hatAr
t
.
1216 i
st
he appl
i
cabl
e pr
ovi
si
on i
nt
hi
s
mat
t
er
. Sai
d pr
ovi
si
on gi
ves t
he cr
edi
t
or
t
her
i
ghtt
opr
oceed agai
nstanyoneoft
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 cr
edi
t
or
)may
,i
fhe so
chooses, pr
oceed agai
nst t
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
heest
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
annot pr
evai
l
oversubst
ant
i
vel
aw.
-I
fSec.6,Rul
e86,
ROC wer
e appl
i
ed l
i
t
er
al
l
y
, Ar
t
. 1216
woul
d,i
n effect
,be r
epeal
ed si
nce under
t
he ROC,pe
t
i
t
i
onerhas no choi
ce butt
o
pr
oceed agai
nst t
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
nstanyone,someor
al
l of t
he sol
i
dar
y debt
or
s. Such a
const
r
uct
i
on i
s not sanct
i
oned by t
he
pr
i
nci
pl
e xxx t
hat a subst
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
evai
lover Ar
t
. 1216, t
he
f
or
merbei
ngmer
el
ypr
ocedur
al
,whi
l
et
he
l
at
t
er
,subst
ant
i
ve.
OUANO V.ALEONAR [
202 SCRA 619] Thec
r
edi
t
ormay pr
oc
eed agai
nstany 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
onerhasonl
yi
t
sel
ft
obl
ame.
I
tal
l
owed t
he per
i
od f
orappealt
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
ydebororsomeoral
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
nstpe
t
i
t
i
oner
OASI
.
xxx
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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
woormor
esol
i
dar
ydebt
or
s
offert
opay
,t
hecr
edi
t
ormaychoosewhi
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
ch cor
r
esponds t
o each, wi
t
h t
he
i
nt
er
estf
ort
he paymental
r
eady made.I
f
t
he paymenti
s made bef
or
et
he debti
s
due,noi
nt
er
estf
ort
hei
nt
er
veni
ngper
i
od
maybedemanded.
When one oft
he sol
i
dar
y debt
or
s
cannot
, because of hi
s i
nsol
vency
,
r
ei
mbur
se hi
s shar
et
ot
he debt
orpayi
ng
t
heobl
i
gat
i
on,such shar
eshal
lbebor
ne
byal
lhi
scodebt
or
s,i
n pr
opor
t
i
on t
ot
he
debtofeach.
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
he obl
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
hesol
i
dar
ydebt
or
sdoesnotr
el
easet
he
l
at
t
erf
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
ed
t
oA f
orP12,
000. A r
emi
t
st
heshar
eofY
(
P3,
000.
)
Q:CanYbesued?
A: Yes,f
or t
he P9,
000 (
P12,
000
l
essP3,
000shar
eofY.
)
Q:Supposi
ngXi
si
nsol
vent
?
A: Y can st
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
ed.
Q: Can A demandt
heP9,
000f
r
om
Y.
A: Yes.But he can r
ecover t
he
samef
r
om W,X & Z.
Ar
t
.1220. The r
emi
ssi
on oft
he
whol
e obl
i
gat
i
on,obt
ai
ned by one oft
he
sol
i
dar
y debt
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
est
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
ext
i
ngui
shed.
I
ft
her
ewasf
aul
tont
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
nstt
hegui
l
t
yornegl
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 del
ayt
hr
ough t
he
j
udi
ci
alorext
r
aj
udi
ci
aldemandupon 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
eed 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,excepti
nt
hel
at
t
ercase
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
, avai
l
hi
msel
fofal
ldef
enses whi
ch ar
e der
i
ved
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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
o hi
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
hedebtf
orwhi
ch
t
hel
at
t
erar
er
esponsi
bl
e.
Bal
ane:
Thr
eeDef
ensesi
nPassi
veSol
i
dar
i
t
y:
1. Those der
i
ved 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
ensesper
sonalt
ot
hedebt
or
def
endant
, e.
g.
,i
nsani
t
y
. I
fi
ti
nvol
ves
vi
t
i
at
i
on ofconsent
,t
ot
aldef
ense. I
fi
t
i
nvol
ves a speci
alt
er
m ora condi
t
i
on,a
par
t
i
aldef
ense.
3. Those def
enses per
sonal t
o ot
her
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 ot
hersol
i
dar
y
debt
or
si
ssodependentont
hatoft
hei
rc
osol
i
dar
ydebt
or
,t
her
el
easeoft
heonewho
appeal
ed,pr
ovi
ded i
tbe noton gr
ounds
per
sonalt
o suc
h appeal
i
ng pr
i
vat
er
esp.
oper
at
esaswel
last
ot
heot
her
swhodi
d
notappeal
. I
ti
sf
ort
hi
sr
eason,t
hata
deci
si
onorj
udgmenti
nf
avoroft
hepr
i
vat
e
r
esp.whoappeal
ed can bei
nvoked asr
es
j
udi
c
at
abyt
heot
herpr
i
vat
er
espondent
s.
xxx I
ti
sobvi
ous t
hatt
her
esp.
cour
tcommi
t
t
ednoer
r
ori
nr
ul
i
ngt
hati
t
s
deci
si
on i
nur
es t
ot
he benefitofal
lt
he
pr
i
vat
er
esps.r
egar
dl
ess oft
he f
actt
hat
onl
yoneappeal
ed. I
ti
ser
r
oneoust
or
ul
e
t
hatt
hedeci
si
onoft
het
r
i
alcour
tcoul
dbe
r
ever
sed as t
ot
he appeal
i
ng pr
vat
er
esp.
and cont
i
nue i
nf
or
ce agai
nst t
he ot
her
pvt
.r
esps. The l
at
t
er coul
d notr
emai
n
bound af
t
ert
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
si
on r
ender
ed
byt
her
esp.cour
ti
nur
edt
ot
hei
rbenefit
.
Ar
t
.
1215.
Novat
i
on,
compensat
i
on,conf
usi
on or r
emi
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 have
execut
ed any oft
hese act
s,aswel
lashe
whocol
l
ect
st
hedebt
,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
hem.
Ar
t
. 1219.
The
r
emi
ssi
on made by t
he
cr
edi
t
oroft
he shar
e whi
ch
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 bef
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
vi
si
bl
e
Bal
ane: Thi
s ki
nd of obl
i
gat
i
ons has
some
t
hi
ngt
odow/ t
hepr
est
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
mance. An
i
ndi
vi
si
bl
e obl
i
gat
i
on i
s one t
hatmustbe
per
f
or
medi
noneact
.
Gener
al r
ul
e:
Obl
i
gat
i
on i
s
i
ndi
vi
si
bl
e w/c means t
hati
thas t
o be
per
f
or
med i
n one actsi
ngl
y
. Why? Bec.
t
he l
aw pr
ovi
des so: Unl
ess t
her
ei
s an
expr
ess st
i
pul
at
i
on t
o t
hat effect
,t
he
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cr
edi
t
or cannotbe compel
l
ed par
t
i
al
l
yt
o
r
ecei
ve t
he pr
es
t
at
i
ons i
n whi
ch t
he
obl
i
gat
i
on consi
st
s. Nei
t
her may t
he
debt
or be r
equi
r
ed 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. When t
he nat
ur
e of t
he obl
i
gat
i
on
necessar
i
l
yent
ai
l
sper
f
or
mancei
npar
t
s.
3.Wher
et
hel
aw pr
ovi
desot
her
wi
se.
Di
vi
si
bi
l
i
t
y of Obl
i
gat
i
on di
st
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
es
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 nott
he same as
di
vi
si
bi
l
i
t
yofobl
i
gat
i
on.Butt
her
ever
sei
s
not t
he same. I
ndi
vi
si
bi
l
i
t
y of obj
ect
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
ectofobl
i
gat
i
onsi
n whi
ch t
her
ei
sonl
y
onedebt
orand onl
yonecr
edi
t
ordoesnot
al
t
erormodi
f
yt
hepr
ovi
si
onsofChapt
er2
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
ndemni
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 have
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 oft
he val
ue oft
he ser
vi
ce i
n
whi
cht
heobl
i
gat
i
onconsi
st
s.
suscept
i
bl
eofpar
t
i
alper
f
or
manceshal
lbe
deemedt
obei
ndi
vi
si
bl
e.
When t
he obl
i
gat
i
on has f
or i
t
s
obj
ectt
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
ch by t
hei
r nat
ur
e ar
e suscept
i
bl
e of
par
t
i
alper
f
or
mance,i
tshal
lbedi
vi
si
bl
e.
However
,even 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
yshal
lbede
t
er
mi
nedbyt
he
char
act
er of t
he pr
est
at
i
on i
n each
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
nstal
lt
hedebt
or
s.I
foneof
t
he l
at
t
ershoul
d be i
nsol
vent
,t
heot
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
heser
vi
entest
at
ei
sdi
vi
ded
be
t
ween t
wo or mor
e per
sons, t
he
easement i
s not modi
fied, and each of
t
hem must bear i
t on t
he par
t whi
ch
cor
r
espondst
ohi
m.
I
fi
ti
st
hedomi
nantest
at
et
hati
s
di
vi
dedbe
t
weent
woormor
eper
sons,each
of t
hem may use t
he easement i
n i
t
s
ent
i
r
e
t
y
,wi
t
houtchangi
ngt
hepl
aceofi
t
s
use,ormaki
ngi
tmor
ebur
densomei
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
ve
defini
t
et
hi
ngs and t
hose whi
ch ar
e not
Ar
t
.2089. A pl
edgeormor
t
gagei
s
i
ndi
vi
si
bl
e,even t
hough t
he debtmay be
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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
hedebtcannotask f
ort
he
pr
opor
t
i
onat
e ext
i
ngui
shment of t
he
pl
edgeormor
t
gageasl
ongast
hedebti
s
notcompl
e
t
el
ysat
i
sfied.
Nei
t
hercan t
hecr
edi
t
or
'
shei
rwho
r
ecei
ved 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
ceoft
heot
herhei
r
swho havenot
beenpai
d.
Fr
om t
hese pr
ovi
si
ons, i
t i
s
expect
ed t
he case i
n whi
ch,t
her
e bei
ng
sever
alt
hi
ngsgi
ven i
n mor
t
gageorpl
edge,
each one of t
hem guar
ant
ees onl
y a
de
t
er
mi
nat
epor
t
i
onoft
hecr
edi
t
.
Thedebt
or
,i
nt
hi
scase,shal
lhave
ar
i
ghtt
ot
heext
i
ngui
shmentoft
hepl
edge
ormor
t
gageast
hepor
t
i
on oft
hedebtf
or
whi
cheacht
hi
ngi
sspeci
al
l
yanswer
abl
ei
s
sat
i
sfied.
Ar
t
.2090. The i
ndi
vi
si
bi
l
i
t
y ofa
pl
edge ormor
t
gage i
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 sever
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
chase,noneoft
hem mayexer
ci
se
t
hi
sr
i
ght f
or mor
et
han hi
sr
espect
i
ve
shar
e.
The same r
ul
e shal
lappl
yi
ft
he
per
son who sol
d an i
mmovabl
eal
onehas
l
ef
tsever
alhei
r
s,i
nwhi
chcaseeachoft
he
l
at
t
ermayonl
yr
edeem t
hepar
twhi
ch he
mayhaveacqui
r
ed.
shoul
d t
hey f
ai
lt
o do so, t
he vendee
cannotbecompel
l
edt
oconsentt
oapar
t
i
al
r
edempt
i
on.
Ar
t
. 1248. Unl
ess t
her
ei
s an
expr
ess st
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
ve t
he pr
es
t
at
i
ons i
n whi
ch t
he
obl
i
gat
i
on consi
st
s.Nei
t
hermayt
hedebt
or
ber
equi
r
edt
omakepar
t
i
alpayment
s.
However
,when t
he debti
si
n par
t
l
i
qui
dat
ed and i
n par
tunl
i
qui
dat
ed,t
he
cr
edi
t
ormaydemand and t
hedebt
ormay
effectt
he paymentoft
he f
or
merwi
t
hout
wai
t
i
ngf
ort
hel
i
qui
dat
i
onoft
hel
at
t
er
.
Ar
t
. 1583.
Unl
ess ot
her
wi
se
agr
eed,t
hebuyerofgoodsi
snotboundt
o
acceptdel
i
ver
yt
her
eofbyi
nst
al
l
ment
s.
Wher
et
her
ei
sacont
r
actofsal
eof
goods t
o be del
i
ver
ed by st
at
ed
i
nst
al
l
ment
s,whi
ch ar
et
o be separ
at
el
y
pai
df
or
,and t
he sel
l
er makes def
ect
i
ve
del
i
ver
i
es i
n r
espect of one or mor
e
i
nst
al
l
ment
s, or t
he buyer negl
ect
s or
r
ef
useswi
t
houtj
ustcauset
ot
akedel
i
ver
y
oforpay f
orone ormor
ei
nst
al
l
ment
s,i
t
dependsi
n each caseon t
het
er
msoft
he
cont
r
act and t
he ci
r
cumst
ances of t
he
case,whe
t
hert
hebr
each ofcont
r
acti
sso
mat
er
i
alast
oj
ust
i
f
yt
hei
nj
ur
ed par
t
yi
n
r
ef
usi
ng t
o pr
oceed f
ur
t
herand sui
ng f
or
damagesf
orbr
each oft
heent
i
r
econt
r
act
,
orwhe
t
hert
hebr
each i
ssever
abl
e,gi
vi
ng
r
i
set
oacl
ai
mf
orcompensat
i
on butnott
o
ar
i
ght t
ot
r
eat t
he whol
e cont
r
act as
br
oken.
(
3)Expr
essagr
eeement
Ar
t
. 1613. I
n t
he case of t
he
pr
ecedi
ngar
t
i
cl
e,t
hevendeemaydemand
ofal
lt
he vendor
s or cohei
r
st
hat t
hey
come t
o an agr
eement upon t
he
r
epur
chaseoft
hewhol
et
hi
ng sol
d;anbd
Ar
t
.1714. I
ft
hecont
r
act
oragr
ees
t
o pr
oduce t
he wor
k f
r
om mat
er
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
oyer and
t
r
ansf
er domi
ni
on over t
he t
hi
ng. Thi
s
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cont
r
actshal
lbegover
nedbyt
hef
ol
l
owi
ng
ar
t
i
cl
es as wel
l as by t
he per
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
actofsal
e.
(
a) I
ft
her
ei
s a st
i
pul
at
i
on t
hat
bot
h penal
t
yand damagesar
er
ecover
abl
e
i
ncaseofbr
each
(
b) I
ft
heobl
i
gorr
ef
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
ed
damagesf
oundi
nAr
t
i
cl
es2226t
o2228by
aut
hor
i
t
yofLamber
tv
.Fox,26Phi
l
.588.
Penal Cl
ause.
- A penal cl
ause i
s an
accessor
y under
t
aki
ng t
o assume gr
eat
er
l
i
abi
l
i
t
yi
n caseofbr
each. Thepur
posei
s
t
o st
r
engt
hen t
he coer
ci
ve f
or
ce of t
he
obl
i
gat
i
on. When a penal cl
ause i
s
pr
esent
,damagesdonothavet
obepr
oved.
Char
act
er
i
st
i
csofPenalCl
ause:
1. Subsi
di
ar
y(
al
socal
l
ed al
t
er
nat
i
ve)w/c
means t
hatupon nonper
f
or
mance,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
nci
pal
under
t
aki
ng and penal
t
y may be
demanded - Ar
t
.1227,secondsent
ence:
"
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
expl
i
ci
t
l
y)w/cmeanst
hatt
her
i
ghtcanbe
cl
ear
l
ygr
ant
edbyi
mpl
i
cat
i
on.
2. Exc
l
usi
ve w/c means t
hat a penal
cl
ausei
sf
orr
epar
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
damagesmaybedemanded,namel
y-
Ar
t
.1226. I
n obl
i
gat
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
er
est
s i
n case of noncompl
i
ance,i
ft
her
ei
snost
i
pul
at
i
ont
ot
he
cont
r
ar
y
.Never
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
n accor
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
eementupon a penal
t
y apar
tf
r
om t
he
i
nt
er
est
. Shoul
d t
her
e be such an
agr
eement
,t
he penal
t
y xxx does not
i
ncl
udet
hei
nt
er
est
,and assuch t
het
wo
ar
edi
ffer
entand di
st
i
nctt
hi
ngsw/cmay
be demanded separ
at
el
y
. The penal
t
yi
s
not t
o be added t
ot
he i
nt
er
est f
or t
he
de
t
er
mi
nat
i
on of whe
t
her t
he i
nt
er
est
exceeds t
he r
at
e fixed by l
aw,si
nce sai
d
r
at
ewasfixedonl
yf
ort
hei
nt
er
est
.
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
ed be
t
.t
he par
t
i
es
st
i
pul
at
es t
hatshoul
dt
he vendor f
ai
lt
o
i
ssuet
het
r
ansf
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
er
est at t
he r
at
e of 4% p.
a.
,
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lOMoARcPSD|22267210
hence,t
hevendeei
sboundbyt
het
er
msof
t
he pr
ovi
si
on and cannot r
ecover 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 devoi
d ofmer
i
t
. We
woul
d agr
eew/ pe
t
i
t
i
oneri
ft
hecl
ausei
n
quest
i
on wer
et
obeconsi
der
ed asapenal
cl
ause. Never
t
hel
ess, f
or ver
y obvi
ous
r
easons,sai
d cl
ause doesnotconvey any
penal
t
y
,f
or even wi
t
houti
t
,pur
suantt
o
Ar
t
.2209oft
heNCC,t
hevendeewoul
dbe
ent
i
t
l
ed t
or
ecovert
heamountpai
dbyher
w/ l
egalr
at
eofi
nt
er
estw/ci
seven mor
e
t
hant
he4% pr
ovi
dedf
ori
nt
hecl
ause.
Bal
ane: The SC consi
der
ed t
he 4%
i
nt
er
estasnotapenalcl
ausebec.i
tdoes
not st
r
engt
hen t
he coer
ci
ve f
or
ce oft
he
obl
i
gat
i
on.
PAMI
NTUAN V.CA [
94 S 556] - Wehol
d
t
hat appel
l
ant
'
s cont
ent
i
on cannot be
sust
ai
ned bec.t
hesecond sent
enceofar
t
.
1226 i
t
sel
f pr
ovi
des t
hat "
never
t
hel
ess,
damagesshal
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
ast
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
ust
i
ficat
i
on f
or t
he NCC t
o
makean appar
entdi
st
i
nct
i
on be
t
.penal
t
y
and l
i
qui
dat
ed damages bec.t
he se
t
t
l
ed
r
ul
ei
st
hat t
her
ei
s no di
ffer
ence be
t
.
penal
t
yand l
i
qui
dat
ed damagesi
nsof
aras
l
egalr
esul
t
sar
econcer
nedandei
t
hermay
ber
ecover
ed w/o t
henecessi
t
y ofpr
ovi
ng
act
ualdamagesand bot
h mayber
educed
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
ecover
onl
yt
he act
ualdamages pr
oven,and not
t
o awar
dt
oi
tt
he st
i
pul
at
ed l
i
qui
dat
ed
damagesofP10,
000 f
oranybr
each oft
he
cont
r
act
. Thepr
oven damagessuper
sede
t
hest
i
pul
at
edl
i
qui
dat
eddamages.
Thi
s vi
ew finds suppor
ti
n t
he
opi
ni
on ofManr
esa t
hati
n casesoff
r
aud
t
hedi
ffer
encebe
t
.t
hepr
ovendamagesand
t
hest
i
pul
at
edpenal
t
ymayber
ecover
ed.
COUNTRYBANKERS V.CA [
201S 458] 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 st
i
l
l owi
ng, i
n t
he
eventoft
het
er
mi
nat
i
on orcancel
l
at
i
on of
t
he agr
eement 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
er
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
est
at
i
on (
gener
al
l
y
c
onsi
st
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.
Asagener
alr
ul
e,i
nobl
i
gat
i
onsw/apenal
cl
ause, t
he penal
t
y shal
lsubst
i
t
ut
et
he
i
ndemni
t
yf
ordamagesandt
hepaymentof
i
nt
er
est
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 such case, pr
oof of act
ual
damages suffer
ed by t
he cr
edi
t
or i
s not
necessar
yi
nor
dert
hatt
hepenal
t
ymaybe
demanded.xxx
Butt
her
ear
ecaseswhen bot
ht
he
penal
t
y and t
he act
ualdamages may be
r
ecover
ed, such as when t
her
e i
s a
st
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 Banker
s case i
s be
t
t
er
t
han Pami
nt
uan v
.CA. Bot
ht
hepenal
t
y
and damages ar
e r
ecover
abl
e i
n
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except
i
onal ci
r
cumst
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
er l
i
abi
l
i
t
y i
n case of
br
each. I
thasadoubl
ef
unct
i
on: (
1) t
o
pr
ovi
def
orl
i
qui
dat
eddamages;and (
2) t
o
st
r
engt
hen t
he coer
ci
ve f
or
ce of t
he
obl
i
gat
i
on by t
he t
hr
eat of gr
eat
er
r
esponsi
bi
l
i
t
yi
nt
heeventofbr
each.Fr
om
t
hef
or
egoi
ng,i
ti
scl
eart
hatapenalcl
ause
i
si
nt
ended t
o pr
event 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 shoul
d be
def
aul
t
,t
hepenal
t
ymaybeenf
or
ced.
Ar
t
. 1227. The debt
or cannot
exempt hi
msel
ff
r
om t
he per
f
or
mance of
t
heobl
i
gat
i
on bypayi
ng t
hepenal
t
y
,save
i
n t
he case wher
et
hi
sr
i
ght has been
expr
essl
yr
eser
vedf
orhi
m.Nei
t
hercant
he
cr
edi
t
or demand 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
hesamet
i
me,unl
esst
hi
sr
i
ght
has been cl
ear
l
y gr
ant
ed hi
m.However
,i
f
af
t
ert
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 penal
t
y
maybeenf
or
ced.
Ar
t
.1228. Pr
oofofact
ualdamages
suffer
ed by t
he cr
edi
t
ori
s notnecessar
y
i
nor
der t
hat t
he penal
t
y may be
demanded.
Bavi
er
a:
Cour
t
s enf
or
ce cont
r
act
s
accor
di
ngt
ot
hei
rt
er
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
.
Eveni
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
er
nat
i
ve
Ar
t
. 1227. The debt
or cannot
exempt hi
msel
ff
r
om t
he per
f
or
mance of
t
heobl
i
gat
i
on bypayi
ng t
hepenal
t
y
,save
i
n t
he case wher
e hi
sr
i
ght has been
expr
essl
yr
eser
vedf
orhi
m.Nei
t
hercant
he
cr
edi
t
or demand 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
hesamet
i
me,unl
esst
hi
sr
i
ght
has been cl
ear
l
y gr
ant
ed hi
m.However
,i
f
af
t
ert
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 penal
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
thasbeen
expr
essl
ygr
ant
edt
ot
hecr
edi
t
or
.
The debt
orshal
lhave no r
i
ghtt
o
choose t
hose pr
est
at
i
ons whi
ch ar
e
i
mpossi
bl
e,unl
awf
ulor whi
ch coul
d not
havebeent
heobj
ectoft
heobl
i
gat
i
on.
2. Di
st
i
ngui
shed
obl
i
gat
i
ons
f
r
om
f
acul
t
at
i
ve
Ar
t
. 1227. The debt
or cannot
exempt hi
msel
ff
r
om t
he per
f
or
mance of
t
heobl
i
gat
i
on bypayi
ng t
hepenal
t
y
,save
i
n t
he case wher
et
hi
sr
i
ght has been
expr
essl
yr
eser
vedf
orhi
m.Nei
t
hercant
he
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cr
edi
t
or demand 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
hesamet
i
me,unl
esst
hi
sr
i
ght
has been cl
ear
l
y gr
ant
ed hi
m.However
,i
f
af
t
ert
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 penal
t
y
maybeenf
or
ced.
Ar
t
. 1206.
When onl
y one
pr
est
at
i
on hasbeen agr
eed upon,butt
he
obl
i
gor may r
ender anot
her i
n subst
i
t
ut
i
on,t
heobl
i
gat
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 subst
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
subst
i
t
ut
i
on hasbeen made,t
heobl
i
gori
s
l
i
abl
ef
or t
he l
oss of t
he subst
i
t
ut
e on
accountofhi
sdel
ay
,negl
i
genceorf
r
aud.
t
hen we have el
even modes of
ext
i
ngui
shi
ng an obl
i
gat
i
on under Ar
t
.
1231.
Thi
s enumer
at
i
on i
snotexcl
usi
ve.
Ot
her modes of ext
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
el
y per
sonal
, e.
g.
, deat
h of one
par
t
nerdi
ssol
vest
hapar
t
ner
shi
p.
2.Renunci
at
i
onbyt
hecr
edi
t
or
3.Compr
omi
se
4.Ar
r
i
valofr
esol
ut
or
yt
er
m
5. Mut
ualdesi
st
ance 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
ner
shi
p, any par
t
ner can
wi
t
hdr
aw anyt
i
mef
r
om t
hepar
t
ner
shi
p.
7. I
n somecases,change ofci
vi
lst
at
us,
e.
g.
,i
fmar
r
i
agei
sannul
ed,i
text
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
seen event
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
ext
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
hercausesofext
i
ngui
shmentof
obl
i
gat
i
ons, such
as
annul
ment
,
r
esci
ssi
on, f
ul
fil
l
ment of a r
esol
ut
or
y
condi
t
i
on,and pr
escr
i
pt
i
on ar
e gover
ned
el
sewher
ei
nt
hi
sCode.
Bal
ane: Ar
t
.1231 gi
vesust
en modesof
ext
i
gui
shi
ng an obl
i
gat
i
on. One oft
he
modes ment
i
oned i
sr
esci
ssi
on. But i
t
doesnott
el
luswhe
t
hert
hi
si
sr
esci
ssi
on
underAr
t
.1191 (
r
esol
ut
i
on)orr
esci
ssi
on
underAr
t
.1380,e
t
.seq. I
fi
tmeansbot
h,
I
l
l
ust
r
at
i
on:
Car
al
e owns a
r
est
aur
ant
. Hehi
r
esMol
i
naasachef
.I
n
t
he cont
r
actofempl
oyment
,t
her
e was a
st
i
pul
at
i
on t
hat i
f Mol
i
na r
esi
gns f
r
om
Car
al
e'
s r
est
aur
ant
, he cannot seek
empl
oymentf
r
om anot
herr
est
aur
antf
ora
per
i
odoffiveyear
s. Subsequent
l
y
,Mol
i
na
r
esi
gnsf
r
om Car
al
e'
sr
est
aur
antandwant
s
t
o appl
yt
o Mi
l
do'
sHouseofChi
cken. I
n
t
hi
scase,Mol
i
na cannotwor
k w/ Mi
l
do'
s
bec.oft
he st
i
pul
at
i
on i
nt
he cont
r
acthe
si
gned w/ Car
al
e. Suppose, however
,
Car
al
e,cl
oses down hi
sr
est
aur
ant and
engages i
n at
ot
al
l
y di
ffer
entbusi
ness,a
const
r
uct
i
onbusi
ness,f
orexampl
e,Mol
i
na
can appl
yf
orwor
k atMi
l
do'
s even bef
or
e
t
hel
apseoft
hefiveyearpr
ohi
bi
t
i
veper
i
od.
I
nt
hi
scase,Mol
i
nacanmakeouta
caseofext
i
ngui
shmentofobl
i
gat
i
onont
he
gr
ound ofwantofi
nt
er
est
. The obvi
ous
pur
pose oft
he st
i
pul
at
i
on i
st
o pr
event
unf
ai
rcompe
t
i
t
i
on.
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of nei
t
her i
nf
er
i
or or super
i
or
qual
i
t
y(
Ar
t
. 1246)
. I
t must be
some
t
hi
ngi
nt
hemi
ddl
e.I
ncaseof
money
,t
her
ear
especi
alr
ul
es:
10.Judi
ci
ali
nsol
vency
BALANE CASE:
SAURA I
MPORT & EXPORT BANK VS.
DBP [
44S445]- Wher
eaf
t
erappr
ovalof
hi
sl
oan,t
hebor
r
ower
,i
nst
eadofi
nsi
st
i
ng
f
or i
t
sr
el
ease,asked t
hat t
he mor
t
gage
gi
ven as secur
i
t
y be cancel
l
ed and t
he
cr
edi
t
oracceded t
her
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
st
ance- whatManr
esat
er
ms
"
mut
uo di
senso" - w/c i
s a mode of
ext
i
ngui
shi
ng obl
i
gat
i
ons. I
ti
sa concept
t
hatder
i
ves f
r
om t
hepr
i
nci
pl
et
hatsi
nce
mut
ualagr
eementcan cr
eat
e a cont
r
act
,
mut
ualdi
sagr
eementby t
he par
t
i
es can
causei
t
sext
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
est
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.Payor
/obl
i
gor
/debt
or
2.Payee/obl
i
gee/cr
edi
t
or
I
I
I
.
Re:Ti
meandpl
ance
I
.Wi
t
hr
espectt
opr
est
at
i
on:
1.I
dent
i
t
y
a.I
fspeci
ficpr
est
at
i
on,t
hi
s
r
equi
si
t
emeanst
hatt
hever
yt
hi
ng
orser
vi
cemustbedel
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
(
i
) Gover
ni
ng r
ul
e:
RA 529 as amended by RA
4100- I
n case ofmoney
debt
s,you wi
l
lhavet
opay
i
n l
egal t
ender 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
st
i
pul
at
et
hatpaymentwi
l
l
bemadei
nf
or
ei
gncur
r
ency
,
t
heobl
i
gat
i
on t
opayi
sval
i
d
butt
heobl
i
gat
i
on t
opayi
n
f
or
ei
gn cur
r
ency i
s voi
d.
Payment wi
l
l be made i
n
Phi
l
.cur
r
ency
.
How doyou c
onver
t
?
I
n caseofan obl
i
gat
i
on w/c
i
s not a l
oan i
n f
or
ei
gn
cur
r
ency
,i
fi
ncur
r
edbef
.RA
529,conver
si
on mustbeas
of t
he t
i
me t
he obl
i
gat
i
on
was i
ncur
r
ed. I
fi
ncur
r
ed
af
t
er RA 529 became
effect
i
ve, t
he conver
si
on
mustbe asoft
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
epaper
- Thi
smay
be r
ef
used by t
he cr
edi
t
or
.
Paymenti
nmanager
'
scheck
or cer
t
i
fied check i
s not
payment i
n l
egal t
ender
.
The r
ul
i
ng i
n Sener
i
s has
been r
ever
sedi
nt
hecaseof
Bi
shop of Mal
ol
os. The
Mal
ol
os r
ul
i
ng i
sbe
t
t
er
. I
f
ound i
thar
dt
oacceptt
hat
manager
'
scheck orcer
t
i
fied
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check i
s good as l
egal
t
ender
. Ther
e ar
e al
ways
r
i
sks t
o w/c cashi
er
'
s
checksar
esubj
ect
. Whati
f
af
t
er havi
ng i
ssued a
cashi
er
'
scheck,t
hedr
aweebank cl
oses,whathappens
t
oyourcashi
er
'
scheck?
I
n
any
event
,
payment by check can be
r
ef
usedbyt
hecr
edi
t
or
.And
even i
fpaymentbycheck i
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
hechecki
s(
a)encashedor
(
b) when t
hr
ough t
hef
aul
t
of t
he cr
edi
t
or t
hey have
been i
mpai
r
ed. Thecaseof
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
have been i
mpai
r
ed" as t
o
appl
y onl
yt
o a check used
i
n payment i
fi
ssued by a
per
son ot
her t
han t
he
debt
or
. Why? Bec.i
ft
he
check was i
ssued by t
he
debt
orhi
msel
f
,al
lt
hatt
he
debt
orhavet
odoi
st
oi
ssue
anot
hercheck.
(
i
i
i
) Reval
uat
i
on i
n
case
of ext
r
aor
di
nar
y
i
nflat
i
on or deflat
i
on (
Ar
t
.
1250.
)
-Thi
sr
ul
ehasnever
been used. I
t was onl
y
dur
i
ng
t
he
Japanese
occupat
i
on t
hatt
her
ewasa
r
ecogni
t
i
on ofext
r
aor
di
nar
y
i
nflat
i
oni
nt
hi
scount
r
y
.
c.Except
i
onst
ot
her
equi
r
ementof
i
dent
i
t
y
(
i
) Dac
i
on en pago (
Ar
t
.
1245.
)
(
i
i
)Novat
i
on
I
n bot
h cases, t
her
ei
sa
vol
unt
ar
ychangei
nt
heobj
ect
.
2. I
nt
egr
i
t
y.
- Ther
e must be
del
i
ver
yoft
heent
i
r
epr
est
at
i
on due. (
Ar
t
.
1233.
) Theexcept
i
onst
ot
her
equi
r
ement
ofi
nt
egr
i
t
yar
e:
a. I
n case ofsubst
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
ver of
obl
i
gee/cr
edi
t
or(
Ar
t
.1235.
)
c. I
n caseofappl
i
cat
i
on of
payment
s i
f sever
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 sever
al except
i
ons t
o t
hi
s
r
equi
r
ement
:
a. I
n case or expr
ess
st
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.
)
e. I
n sol
i
dar
y obl
i
gat
i
ons
when t
hedebt
or
sar
ebound under
di
ffer
ent t
er
ms and condi
t
i
ons.
(
Ar
t
.1211.
)
f
.I
n compensat
i
on when a
bal
ancei
sl
ef
t
.(
Ar
t
.1290.
)
g. I
ft
he wor
k i
st
o be
del
i
ver
ed par
t
i
al
l
y
,t
he pr
i
ce or
compensat
i
on f
oreach par
thavi
ng
beenfixed.(
Ar
t
.1720.
)
h.
I
n case of sever
al
guar
ant
or
s who demand t
he r
i
ght
ofdi
vi
si
on.(
Ar
t
.2065.
)
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lOMoARcPSD|22267210
i
.I
ncaseofi
mpossi
bi
l
i
t
yor
ext
r
eme di
fficul
t
y of si
ngl
e
per
f
or
mance.
I
I
.Wi
t
hr
espectt
ot
hepar
t
i
es
Ther
ear
et
wopar
t
i
esi
nvol
ved:
1.Payor
/obl
i
gor
/debt
or
2.Payee/obl
i
gee/cr
edi
t
or
Requi
r
ement
s:
1. Ar
t
.1226 -1238. Who shoul
dt
he
payorbe:
a. Wi
t
houtneed oft
he cr
edi
t
or
'
s
consent
(
1)Thedebt
orhi
msel
f
(
2)Hi
shei
r
sorassi
gns
(
3)Hi
sagent
(
4)Anyonei
nt
er
est
edi
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 cr
edi
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
hecr
edi
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.
) Except
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 consent
,t
he t
hi
r
d
per
son may demand r
epaymentt
o
t
heext
entt
hatt
hedebt
orhasbeen
benefit
ed.(
Ar
t
.1236,par
.2.
)
2.Whomaybet
hepayee?
a. The obl
i
gee pr
oper (
Ar
t
i
cl
es
1240,1626.
)
b.Hi
ssuccessorort
r
ansf
er
ee(
Ar
t
.
1240.
)
c.Hi
sagent(
i
bi
d.
)
d. Anyt
hi
r
d per
son subj
ectt
ot
he
f
ol
l
owi
ngqual
i
ficat
i
ons:
(
1)pr
ovi
dedi
tr
edoundedt
o
t
heobl
i
gee'
sbenefitandonl
yt
ot
he
ext
entofsuch 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 five (
5) cases, i
ti
s
r
equi
r
ed t
hat t
he debt shoul
d not have
beengar
ni
shed.(
Ar
t
.1243.
)
I
I
I
. Wi
t
hr
espectt
ot
het
i
meand pl
aceof
payment
1. When payment t
o be made:
Whendue
2.Pl
ace(
Ar
t
.1251.
)
a.
Pr
i
mar
y r
ul
e:
As
st
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 const
i
t
ut
ed 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
ci
l
e
Ar
t
. 1232. Payment means not
onl
yt
he del
i
ver
y ofmoney butal
so t
he
per
f
or
mance,i
n any ot
hermanner
,ofan
obl
i
gat
i
on.
Bal
ane: PaymentorPer
f
or
mancear
eused
i
nt
er
changeabl
y
. Butt
echni
cal
l
y
,payment
i
s used i
n obl
i
gat
i
ons t
o gi
ve wher
eas
per
f
or
mance i
s used i
n obl
i
gat
i
ons t
o do.
Payment
/per
f
or
mancei
st
hepar
adi
gmat
i
c
mode ofext
i
ngui
shmentofan obl
i
gat
i
on.
I
ti
st
heonl
ynor
malwayofext
i
ngui
shi
ng
anobl
i
gat
i
on.
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lOMoARcPSD|22267210
Ar
t
. 1233. A debt shal
l not be
under
st
ood t
o have been pai
d unl
ess t
he
t
hi
ng or ser
vi
ce i
n whi
ch t
he obl
i
gat
i
on
consi
st
s has been compl
e
t
el
y del
i
ver
ed or
r
ender
ed,ast
hecasemaybe.
Ar
t
.1234. I
ft
he obl
i
gat
i
on has
beensubst
ant
i
al
l
yper
f
or
medi
ngoodf
ai
t
h,
t
he obl
i
gor may r
ecover as t
hough t
her
e
hadbeen ast
r
i
ctandcompl
e
t
ef
ul
fil
l
ment
,
l
essdamagessuffer
edbyt
heobl
i
gee.
BALANE CASES:
55S
LEGARDA HERMANOS V.SALDANA [
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
est ofj
ust
i
ce and equi
t
y
,cour
t
maygr
antt
hevendeeanew t
er
m wher
ehe
subst
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
ecour
t
swer
ecor
r
ect
i
n sust
ai
ni
ng t
he cl
ai
m of pvt r
esps.
anchor
ed on est
oppel or wai
ver by
accept
anceofdel
ayedpayment
sunderAr
t
.
1235 consi
der
i
ng t
hatt
he hei
r
s ofJuan
Gal
i
ci
a,Sr
.accommodat
ed pvt
.r
esp.by
accept
i
ngt
hel
at
t
er
'
sdel
ayedpayment
snot
onl
y beyond t
he gr
ace per
i
ods but al
so
dur
i
ng t
he pendency 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 wher
e wher
e t
her
e has been
subst
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
const
r
uct
i
on-t
hatt
heyar
enow est
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
gee
accept
s t
he per
f
or
mance, knowi
ng i
t
s
i
ncompl
e
t
enessori
r
r
egul
ar
i
t
y
,andwi
t
hout
expr
essi
ng any pr
ot
est 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] - Under
Ar
t
. 1234, i
ft
he obl
i
gat
i
on has been
subst
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
ecoverast
hough t
her
ehad been a st
r
i
ct
and coml
e
t
e f
ul
fil
l
ment
,l
ess damages
suffer
ed by t
he obl
i
gee (
Pr
esbi
t
er
o.
)
Mor
eover
, 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
ncompl
e
t
eness or
i
r
r
egul
ar
i
t
y
, and w/o expr
essi
ng any
pr
ot
est or obj
ect
i
on, t
he obl
i
gat
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
nvokei
tnow,i
tst
andst
or
eason t
hathe
woul
d havef
ussed i
tt
ooi
nt
her
ecei
pthe
wi
l
l
i
ngl
y si
gned af
t
er accept
i
ng, w/o
r
eser
vat
i
on and appar
ent
l
y w/o pr
ot
est
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
ance 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
d not
havepr
event
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
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lOMoARcPSD|22267210
evi
dencei
nt
her
ecor
dt
hatwhen t
hedue
dat
ear
r
i
ved,hemadeanydemand,wr
i
t
t
en
orver
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
hever
yl
eastconst
i
t
ut
e
subst
ant
i
alper
f
or
mance. xxx Pe
t
i
t
i
oner
i
nt
hi
scasehast
her
i
ghtt
omovef
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
he f
actt
hatt
he
r
esp.bankwasest
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
onofsuchpaymentt
ot
hei
nt
er
est
and t
he pr
i
nci
paldur
i
ng t
he fir
st t
hr
ee
payment
s const
i
t
ut
es 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
.Wecannotsust
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
son i
nwhosef
avort
heobl
i
gat
i
on
hasbeen const
i
t
ut
ed,orhi
ssuccessori
n
i
nt
er
est
, or any per
son aut
hor
i
z
ed t
o
r
ecei
vei
t
.
BALANE CASES:
ARANAS V. TUTAAN [
127 S 828] Paymentby j
udgmentdebt
ort
ot
hewr
ong
par
t
ydoesnotext
i
ngui
sh j
udgmentdebt
.
The bur
den of r
ecover
i
ng t
he supposed
payment
s oft
he cash di
vi
dends made by
UTEX t
ot
hewr
ongpar
t
i
esCast
anedaand
Manuelsquar
el
yf
al
l
s upon i
t
sel
fby i
t
s
own act
i
on and cannotbepassed 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
y cannot
ext
i
ngui
sht
hej
udgmentobl
i
gat
i
onofsuch
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 must 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
ve t
o di
schar
ge an obl
i
gat
i
on,
mustbemadet
ot
hepr
operper
son.Thus,
payment must be made t
ot
he obl
i
gee
hi
msel
for t
o an agenthavi
ng aut
hor
i
t
y
,
expr
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
edast
hough act
ual
aut
hor
i
t
y had been gi
ven f
or i
t
sr
ecei
pt
.
Li
kewi
se,i
fpaymenti
smadet
oonewhoby
l
aw i
saut
hor
i
z
ed t
oactf
ort
hecr
edi
t
or
,i
t
wi
l
l wor
k a di
schar
ge. The r
ecei
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
esat
i
sf
yt
hedebt
.
xxx Thet
heor
yi
swher
eapayment
i
s made t
o a per
son aut
hor
i
z
ed and
r
ecogni
z
ed byt
hecr
edi
t
or
,t
hepaymentt
o
such a per
son so aut
hor
i
z
ed i
s deemed
paymentt
ot
hecr
edi
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
heabsence
ofanagr
eement
,ei
t
herexpr
essori
mpl
i
ed,
paymentmeanst
hedi
schar
geofadebtor
obl
i
gat
i
oni
nmoneyandunl
esst
hepar
t
i
es
soagr
ee,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
ed by
l
aw orbyconsentoft
heobl
i
gee,a publ
i
c
officerhasnoaut
hor
i
t
yt
oacceptanyt
hi
ng
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lOMoARcPSD|22267210
ot
her t
han money i
n payment of an
obl
i
gat
i
on under a j
udgment bei
ng
execut
ed.
St
r
i
ct
l
y speaki
ng, t
he
accept
ancebyt
hesher
i
ff oft
hepe
t
i
t
i
oner
'
s
checks,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
ncapaci
t
at
ed t
o admi
ni
st
er hi
s
pr
oper
t
y shal
lbeval
i
di
fhehaskeptt
he
t
hi
ngdel
i
ver
ed,ori
nsof
arast
hepayment
hasbeenbenefici
alt
ohi
m.
Payment made t
oat
hi
r
d per
son
shal
l al
so be val
i
d i
nsof
ar as i
t has
r
edounded t
ot
he benefitoft
he cr
edi
t
or
.
Such benefitt
ot
he cr
edi
t
orneed notbe
pr
ovedi
nt
hef
ol
l
owi
ngcases:
(
1)I
faf
t
ert
he payment
,t
he t
hi
r
d
per
sonsacqui
r
est
hecr
edi
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
dper
son;
(
3)I
fbyt
hecr
edi
t
or
'
sconduct
,t
he
debt
or has been l
ed t
o bel
i
eve t
hat t
he
t
hi
r
d per
son had aut
hor
i
t
yt
or
ecei
ve t
he
payment
.
Bavi
er
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
el
easet
hedebt
or
.
(
Assi
gnment of Cr
edi
t
s and Ot
her
I
ncor
por
ealRi
ght
s)
Ar
t
.1626. Thedebt
orwho,bef
or
e
havi
ngknowl
edgeoft
heassi
gnment
,pays
hi
s cr
edi
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
son who hasno i
nt
er
esti
n
t
he f
ul
fil
l
ment of t
he obl
i
gat
i
on, unl
ess
t
her
ei
sast
i
pul
at
i
ont
ot
hecont
r
ar
y
.
Whoever pays f
or anot
her may
demandf
r
om t
hedebt
orwhathehaspai
d,
except t
hat i
f he pai
d wi
t
hout t
he
knowl
edgeoragai
nstt
hewi
l
loft
hedebt
or
,
hecanr
ecoveronl
yi
nsof
arast
hepayment
hasbeenbenefici
alt
ot
hedebt
or
.
Ar
t
.1237. Whoeverpayson behal
f
oft
he debt
or wi
t
hout t
he knowl
edge or
agai
nstt
hewi
l
loft
hel
at
t
er
,cannotcompel
t
hecr
edi
t
ort
osubr
ogat
ehi
mi
n hi
sr
i
ght
s,
such 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
hedebt
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
val
i
d ast
ot
hecr
edi
t
orwho hasaccept
ed
i
t
.
(
Ot
herQuasi
Cont
r
act
s)
Ar
t
.2173. When a t
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
ve,
paymentmadebyonewho doesnothave
t
he f
r
ee di
sposal of t
he t
hi
ng due and
capaci
t
yt
o al
i
enat
ei
tshal
lnotbe val
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. When a
mi
norbe
t
ween ei
ght
een and
t
went
yone year
s of age,
who has ent
er
ed i
nt
o a
cont
r
act
wi
t
hout
t
he
consent of t
he par
ent or
guar
di
an,vol
unt
ar
i
l
ypaysa
sum ofmoney ordel
i
ver
sa
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lOMoARcPSD|22267210
f
ungi
bl
et
hi
ngi
nf
ul
fil
l
ment
oft
heobl
i
gat
i
on,t
her
eshal
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
orbyt
hedebt
oraf
t
ert
hel
at
t
erhas
been j
udi
ci
al
l
y or
der
ed t
or
e
t
ai
nt
he debt
shal
lnotbeval
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
hought
hel
at
t
ermaybeof
t
hesameval
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
byanot
heractorf
or
bear
anceagai
nstt
he
obl
i
gee'
swi
l
l
.
Ar
t
. 1245. Dat
i
on i
n payment
,
wher
eby pr
oper
t
y i
s al
i
enat
ed t
o t
he
cr
edi
t
ori
n sat
i
sf
act
i
on ofadebti
n money
,
shal
lbegover
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
devoi
d of per
suasi
ve f
or
ce. The mer
e
r
e
t
ur
n oft
he mor
t
gaged mot
orvehi
cl
e by
t
hemor
t
gagor
,t
heher
ei
n appel
l
ant
,t
ot
he
mor
t
gagee,t
he her
ei
n appel
l
ee,does not
const
i
t
ut
e dat
i
on i
n payment i
n t
he
absence,expr
ess 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 speci
almode ofpayment
,t
he
debt
oroffer
sanot
hert
hi
ngt
ot
hecr
edi
t
or
whoaccept
si
tasequi
val
entofpaymentof
anout
st
andi
ngdebt
.
Dac
i
on en pago i
nt
he nat
ur
e of
sal
e.
- Theunder
t
aki
ngr
eal
l
ypar
t
akesi
n
onesenseoft
henat
ur
eofsal
e,t
hati
s,t
he
cr
edi
t
or i
s r
eal
l
y buyi
ng t
he t
hi
ng or
pr
oper
t
yoft
hedebt
or
,paymentf
orw/ci
s
t
obechar
gedagai
nstt
hedebt
or
'
sdebt
.As
such,t
heessent
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 must 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
ve 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
ectof
t
he cont
r
act of sal
e, whi
l
et
he debt i
s
consi
der
ed ast
hepur
chasepr
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
yext
i
ngui
shi
ngt
hedebt
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
gnmentwasexecut
edon 12/4/59,t
he
obl
i
gat
i
on oft
he assi
gnor t
or
ef
und t
he
assi
gnee h ad not ye
tar
i
sen. I
n ot
her
wor
ds,t
her
ewasno obl
i
gat
i
on ye
ton t
he
par
t of t
he pe
t
i
t
i
oner
, Ci
t
i
z
ens' t
o pay
Si
nger Sewi
ng Machi
ne Co. Ther
e was
not
hi
ng t
o be ext
i
ngui
shed on t
hatdat
e,
hence,t
her
ecoul
d nothavebeen adat
i
on
i
npayment
.
Ar
t
. 1246. When t
he obl
i
gat
i
on
consi
st
s i
n t
he del
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
cumst
ances have notbeen
st
at
ed,t
hecr
edi
t
orcannotdemandat
hi
ng
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lOMoARcPSD|22267210
ofsuper
i
orqual
i
t
y
. Nei
t
hercan 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
cumst
ances shal
l be t
aken i
nt
o
consi
der
at
i
on.
Ar
t
.1247. Unl
ess i
ti
s ot
her
wi
se
st
i
pul
at
ed, t
he ext
r
aj
udi
ci
al expenses
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 cost
s,t
he Rul
es ofCour
t shal
l
gover
n.
Ar
t
. 1248. Unl
ess t
her
ei
s an
expr
ess st
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
ve t
he pr
es
t
at
i
ons i
n whi
ch t
he
obl
i
gat
i
on consi
st
s. Nei
t
her may t
he
debt
or be r
equi
r
ed t
o make par
t
i
al
payment
s.
However
,when t
he debti
si
n par
t
l
i
qui
dat
ed 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
merwi
t
hout
wai
t
i
ngf
ort
hel
i
qui
dat
i
onoft
hel
at
t
er
.
Canl
as'f
ees,t
he l
i
en on hi
s shar
eoft
he
est
at
ei
st
her
eby ext
i
ngui
shed- a qui
t
e
obvi
ous pr
oposi
t
i
on, t
o be sur
e. The
cl
ausecannotbeconst
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
nst
al
l
ment
s, or as
i
mpl
i
edl
ybi
ndi
ngon t
heobl
i
geet
oaccept
paymentbypar
t
s.xxx
Ar
t
.1249.Thepaymentofdebt
si
n
money shal
l be made i
n t
he cur
r
ency
st
i
pul
at
ed, and i
fi
ti
s not possi
bl
et
o
del
i
ver such cur
r
ency
, t
hen i
n t
he
cur
r
ency whi
ch i
sl
egal t
ender 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 ofexchange or
ot
hermer
cant
i
l
edocument
sshal
lpr
oduce
t
heeffectofpaymentonl
ywhen t
heyhave
been cashed,orwhen t
hr
ough t
hef
aul
tof
t
hecr
edi
t
ort
heyhavebeeni
mpai
r
ed.
I
nt
hemeant
i
me,t
heact
i
onder
i
ved
f
r
om t
he or
i
gi
nalobl
i
gat
i
on shal
lbe hel
d
i
nabeyance.
BALANE CASES:
BALANE CASE:
NASSER V.CUEVAS [
188S 812] - Ther
e
i
snot
hi
ngi
nt
heci
t
edpr
ovi
sot
oj
ust
i
f
yt
he
r
eadi
ngt
hatt
hepe
t
i
t
i
onerwoul
dgi
vet
oi
t
.
Thepar
.i
n w/ci
ti
sf
ound doesno mor
e
t
han est
abl
i
sh "
on al
lt
hepr
oper
t
i
esoft
he
Est
at
e, r
eal and per
sonal
, her
ei
n
adj
udi
cat
ed and ot
her pr
oper
t
i
es notye
t
adj
udi
cat
ed,achar
gi
ngl
i
en xxxt
osecur
e
t
he paymentof(
Canl
as'
)at
t
or
ney'
sf
ees;
"
t
hi
s,w/ t
he expr
ess agr
eementofal
lt
he
si
gnat
or
i
es. 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
ext
i
ngui
shed,
"evi
dent
l
y cont
empl
at
es t
he
pr
obabi
l
i
t
yt
hatt
he hei
r
s obl
i
ged t
o pay
Canl
as'f
eeswoul
d pay atdi
ffer
entt
i
mes,
anddenot
esnot
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
encyot
hert
han t
hePhi
l
.cur
r
ency
t
he same shal
l be di
schar
ged i
n Phi
l
.
cur
r
encymeasur
edatt
hepr
evai
l
i
ngr
at
eof
exchange 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 ofexchange f
or t
he paymentoft
he
obl
i
gat
i
on i
ncur
r
ed af
t
ert
heenact
mentot
sai
d Act
. The l
ogi
calconcl
usi
on i
st
hat
t
he r
at
e of exchange shoul
d be t
hat
pr
evai
l
i
ngatt
het
i
meofpaymentf
orsuch
cont
r
act
s.
PONCE V.CA [
90 S 533] - I
ti
st
o be
not
ed t
hatwhi
l
e an agr
eementt
o pay i
n
dol
l
ar
si
sdecl
ar
edasnul
landvoi
dandof
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no effect
, what t
he l
aw speci
fical
l
y
pr
ohi
bi
t
si
s payment i
n cur
r
ency ot
her
t
han l
egalt
ender
. 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 "
ever
y ot
her
domest
i
cobl
i
gat
i
onxxxwhe
t
herornotany
such pr
ovi
si
on ast
opaymenti
scont
ai
ned
t
her
ei
n ormadew/ r
espectt
her
e
t
o,shal
l
be di
schar
ged upon paymenti
n any coi
n
orcur
r
encyw/catt
het
i
meofpaymenti
s
l
egalt
enderf
orpubl
i
c and pvt
.use.
" 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
nequi
t
abl
y at
anot
her
'
sexpense.
NEW PACI
FI
C TI
MBER V.SENERI
S[
101S
686] - I
ti
st
o be emphasi
z
ed t
hatt
he
check deposi
t
ed by t
he pe
t
i
t
i
oner i
nt
he
amount of P50,
000 i
s not an or
di
nar
y
check but a Cashi
er
'
s check of t
he
Equi
t
abl
e Banki
ng Cor
p.
,a bank ofgood
st
andi
ng and r
eput
at
i
on. I
twas even a
cer
t
i
fied cr
ossed check. 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
eover
,si
ncet
hesai
d check has
been cer
t
i
fied byt
hedr
aweebank,byt
he
cer
t
i
ficat
i
on,t
hef
undsr
epr
esent
ed byt
he
checkar
et
r
ansf
er
r
edf
r
om t
hecr
edi
toft
he
makert
ot
hatoft
hepayeeorhol
der
,and
f
or al
li
nt
ent
s and pur
poses, t
he l
at
t
er
becomest
hedeposi
t
oroft
hedr
aweebank,
w/ r
i
ght
s and dut
i
es of one i
n such
si
t
uat
i
on. Wher
e a check i
s cer
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
val
ent t
o accept
ance.
Sai
dcer
t
i
ficat
i
on"
i
mpl
i
est
hatt
hechecki
s
dr
awn upon suffici
entf
undsi
nt
hehands
of t
he dr
awee, t
hat t
hey have been se
t
apar
tf
or
ti
t
s sat
i
sf
act
i
on,and t
hatt
hey
shal
lbesoappl
i
ed whenevert
hecheck i
s
pr
esent
ed f
or payment
.
I
t i
s an
under
st
andi
ng t
hat t
he check i
s good
t
hen,and shal
lcont
i
nue good,and t
hi
s
agr
eementi
sasbi
ndi
ngont
hebankasi
t
s
not
esi
n ci
r
cul
at
i
on,acer
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
ect of cer
t
i
f
yi
ng a check, 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 check t
o be cer
t
i
fied, "
t
he check
oper
at
esasan assi
gnmentofapar
toft
he
f
unds t
o t
he cr
edi
t
or
s.
" Hence, t
he
except
i
on t
ot
he r
ul
e enunci
at
ed under
Sec.63 oft
heCB Actt
ot
heeffectt
hat"
a
check w/c has been cl
ear
ed and cr
edi
t
ed
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
nst
r
umenti
sonl
ya
subst
i
t
ut
ef
ormoney and notmoney
,t
he
del
i
ver
y ofsuch an i
nst
r
umentdoes not
,
by i
t
sel
f
,oper
at
e as payment
. Ac
hec
k,
whet
her a manager
'
sc
hec
k or or
di
nar
y
c
hec
k,i
snotl
egalt
ender
,andan offerofa
check i
n paymentofa debti
snota val
i
d
t
ender of payment and may be r
ef
used
r
ecei
ptbyt
heobl
i
geeorcr
edi
t
or
.
DBP V. SI
MA WEI [
219 S 736] Not
wi
t
hst
andi
ng t
he above, i
t does not
necessar
i
l
yf
ol
l
ow t
hat t
he dr
awer 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
denced by t
he p/n
agr
eed t
o byher
. Heral
l
egat
i
on t
hatshe
haspai
dt
hebal
anceofherl
oan w/t
he2
checkspayabl
et
o pe
t
i
t
i
onerBank hasno
mer
i
tf
or xxx t
hese checks wer
e never
del
i
ver
ed t
o pe
t
i
t
i
oner Bank. And even
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
checks 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
rval
uei
si
mpai
r
ed t
hr
ough
t
he f
aul
toft
he cr
edi
t
or
. None oft
hese
except
i
onswer
eal
l
egedbyr
esp.Si
maWei
.
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lOMoARcPSD|22267210
TI
BAJA V.CA [
223S272]- I
nt
her
ecent
cases ofPAL v
.CA and Roman Cat
hol
i
c
Bi
shop ofMal
ol
os v
.I
AC,t
hi
sCour
thel
d
t
hat
- "
A check, whe
t
her a manager
'
s
check or or
di
nar
y check, i
s not l
egal
t
ender
,andan offerofachecki
n payment
ofadebti
snotaval
i
dt
enderofpayment
and mayber
ef
used r
ecei
ptbyt
heobl
i
gee
orcr
edi
t
or
.
" The r
ul
i
ng i
nt
hese 2 cases
mer
el
y appl
i
es t
he st
at
ut
or
y pr
ovi
si
ons
w/cl
aydown t
her
ul
et
hatacheck i
snot
l
egalt
enderandt
hatacr
edi
t
ormayval
i
dl
y
r
ef
usepaymentbycheck,whe
t
heri
tbea
manager
'
s check, cashi
er
'
s check or
per
sonalcheck.
PALANCAV.CA [
238S593]- I
nt
hecase
at bar
,t
he cl
ear under
st
andi
ng of t
he
par
t
i
esi
st
hatt
her
eshoul
d bean upwar
d
adj
ust
ment of t
he pur
chase pr
i
ce t
he
momentt
her
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" cont
empl
at
ed by
t
hem as woul
d j
ust
i
f
yt
he adj
ust
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 "
escal
at
or
cl
ause"pr
ovi
di
ngt
hati
nt
heoccur
enceof
cer
t
ai
n event
s,t
hecont
r
actpr
i
ceshal
lbe
i
ncr
easedt
oafixedper
cent
ageoft
hebase
pr
i
ce,st
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
ed 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
st
i
pul
at
i
on oft
hepar
t
i
esi
si
n vi
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
eduponbyt
het
r
i
al
cour
tand t
heCA t
hatt
her
eshoul
d bean
"
ext
r
aor
di
nar
y
i
nflat
i
on" bef
or
e
a
st
i
pul
at
i
on f
or an upwar
d adj
ust
ment of
t
hepur
chasepr
i
cecanbeenf
or
ced.
1. xxx The pe
t
i
t
i
on shoul
d be
di
smi
ssed on t
he gr
ound t
hat t
he
st
i
pul
at
i
on oft
hepar
t
i
esi
si
n vi
ol
at
i
on of
RA529,aka,CuencoLaw.
TheCour
tci
t
ed 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 domest
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
encyot
hert
han
Phi
l
.cur
r
ency;and (
2) gi
vi
ng t
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
.
"
When t
hepar
t
i
esst
i
pul
at
edt
hati
n
t
he event of mone
t
ar
y fluct
uat
i
on, t
he
unpai
d bal
ance account of t
he her
ei
n
vendee on t
he af
or
esai
d subdi
vi
si
on l
ot
shal
lbe i
ncr
eased pr
opor
t
i
onat
el
y on t
he
basi
s oft
he pr
esentval
ue ofpeso t
ot
he
USdol
l
a,t
heobl
i
geewasgi
vent
her
i
ghtt
o
demand payment of t
he bal
. of t
he
pur
chasepr
i
ce"
i
n an amountofmoneyof
t
he Phi
l
s.measur
ed"by a f
or
ei
gn coi
n or
cur
r
ency
.
xxx Congr
ess passed RA 529,
havi
ng i
n mi
nd t
he pr
eser
vat
i
on of t
he
val
ue oft
he Phi
l
.peso. A cur
r
ency has
val
uebec.peopl
ear
ewi
l
l
i
ngt
oaccepti
ti
n
exchange f
or goods and ser
vi
ces and i
n
paymentf
ordebt
s.xxx I
fi
nst
ead oft
he
Phi
l
. cur
r
ency
,t
he peopl
e woul
d use a
f
or
ei
gn cur
r
ency 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
,such
usage woul
d adver
sel
y affect t
he
confidence of t
he publ
i
c on t
he Phi
l
.
mone
t
ar
ysyst
em.
2. Thel
i
ber
al
i
z
at
i
on oft
hef
or
ei
gn
exchange r
egul
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
adeandt
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
ee sal
e and pur
chase of
f
or
ei
gn exchange out
si
de t
he banki
ng
syst
em and ot
her t
r
ansact
i
ons i
nvol
vi
ng
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lOMoARcPSD|22267210
f
or
ei
gn cur
r
ency pr
evi
ousl
y subj
ectt
o CB
cont
r
ol
.
Ar
t
.1250.I
ncaseanext
r
aor
di
nar
y
i
nflat
i
on or deflat
i
on of t
he cur
r
ency
st
i
pul
at
ed shoul
d super
vene,t
heval
ueof
t
he cur
r
ency at t
he t
i
me of t
he
est
abl
i
shment oft
he obl
i
gat
i
on shal
lbe
t
he basi
s ofpayment
,unl
ess t
her
ei
s an
agr
eementt
ot
hecont
r
ar
y
.
Bavi
er
a: Thi
s ar
t
i
cl
e appl
i
es t
o cont
r
act
s
onl
y
EXTRAORDI
NARY means unusual
or beyond 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
"
ext
r
aor
di
nar
yi
nflat
i
on ordeflat
i
on oft
he
cur
r
encyst
i
pul
at
ed"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
; hence 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
st
ence.
COMMI
SSI
ONER OF PUBLI
C HI
GHWAYS
V.BURGOS [
96S 831] - Ar
t
.1250does
appl
i
esonl
yt
o caseswher
ea cont
r
actor
agr
eementi
si
nvol
ved. I
tdoes notappl
y
wher
et
heobl
i
gat
i
ont
opayar
i
sesf
r
om l
aw,
i
ndependentofcont
r
act
s. The t
aki
ng of
pr
i
vat
epr
oper
t
ybyt
hegovti
nt
heexer
ci
se
ofi
t
spowerofemni
nentdomai
n doesnot
gi
ver
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
onDefined.
- Ext
r
aor
di
nar
yi
nflat
i
on
exi
st
s when "
t
her
e i
s a decr
ease or
i
ncr
ease i
nt
he pur
chasi
ng power oft
he
Phi
l
.cur
r
ency w/c i
s unusualorbeyond
t
he common fluct
uat
i
on i
nt
he val
ue of
sai
d cur
r
ency
, and such decr
ease or
i
ncr
ease coul
d nothave been r
easonabl
y
f
or
eseen or was mani
f
est
l
y beyond t
he
cont
empl
at
i
on oft
hepar
t
i
esatt
het
i
meof
t
heest
abl
i
shmentoft
heobl
i
gat
i
on.
The t
r
i
al cour
t poi
nt
ed out
,
however
, 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
s ext
r
aor
di
nar
y i
n t
he sense
cont
empl
at
ed 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
ed i
nt
o orpayment
s made
dur
i
ng t
he l
ast war
.
" Whi
l
e appel
l
ant
'
s
vol
umi
nous st
at
i
st
i
cs and r
ecor
ds pr
oved
t
hat t
her
e has been a decl
i
ne i
n t
he
pur
chasi
ng power oft
he Phi
l
.peso,t
hi
s
downwar
df
al
loft
he cur
r
ency cannotbe
consi
der
ed "
ext
r
aor
di
nar
y
.
"I
ti
ssi
mpl
ya
uni
ver
salt
r
end t
hathas notspar
ed our
count
r
y
.
DELROSARI
O V.SHELL [
164S556]- I
n
t
hecaseatbar
,whi
l
enoexpr
essr
ef
er
ence
has been made t
o me
t
al
l
i
c cont
ent
,t
her
e
none
t
hel
essi
sar
educt
i
on i
n parval
ueor
i
nt
hepur
chasi
ngpowerofPhi
l
.cur
r
ency
.
Even assumi
ng t
her
ehasbeen no offici
al
deval
uat
i
on as t
he t
er
m i
s t
echni
cal
l
y
under
st
ood,t
hef
acti
st
hatt
her
ehasbeen
a di
muni
t
i
on or l
esseni
ng i
n t
he
pur
chasi
ng poweroft
hepeso,t
hust
her
e
has been a "
depr
eci
at
i
on" (
opposi
t
e of
"
appr
eci
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 "
deval
uat
i
on" or
"
depr
eci
at
i
on"t
heycer
t
ai
nl
ymeant
hem i
n
t
hei
ror
di
nar
y si
gni
ficat
i
on- decr
ease i
n
val
ue. Hence, as cont
empl
at
ed by t
he
par
t
i
esher
ei
ni
nt
hei
rl
easeagr
eement
,t
he
t
er
m "
deval
uat
i
on" may be r
egar
ded as
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synonymous w/ "
depr
eci
at
i
on,
" f
or
cer
t
ai
nl
y bot
hr
ef
ert
o a dec
r
ease i
nt
he
val
ueoft
hecur
r
ency
. Ther
ent
al
sshoul
d
t
her
ef
or
e, by t
hei
r agr
eement
, be
pr
opor
t
i
onat
el
yi
ncr
eased.
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
oner
sf
ai
l
ed t
o pr
ove t
he
super
veni
ngofext
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
nst
ance,t
he
pr
i
ce i
ndex of goods and ser
vi
ces had
r
i
sen dur
i
ng t
he i
nt
er
veni
ng per
i
od-an
ext
r
aor
di
nar
y
i
nflat
i
on
cannot be
assumed;consequent
l
y
,t
her
ei
snor
eason
orbasi
s,l
egalorf
act
ual
,f
oradj
ust
i
ngt
he
val
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
eby pr
oper
t
y i
s al
i
enat
ed t
o t
he
cr
edi
t
ori
n sat
i
sf
act
i
on ofadebti
n money
,
shal
lbegover
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 expr
essst
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 paymentshal
lbe
madewher
evert
het
hi
ng mi
ghtbeatt
he
momentt
heobl
i
gat
i
onwasconst
i
t
ut
ed.
I
n any ot
her 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
orchanges hi
s domi
ci
l
e
i
n bad f
ai
t
h or af
t
erhe has i
ncur
r
ed i
n
del
ay
,t
he addi
t
i
onal expenses 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
eadof
money
,at
hi
ngi
sdel
i
ver
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
hecr
edi
t
or
i
snow t
hevendee,
andt
hedebt
orbecomes
now t
hevendor
.
Dat
i
on en pagoi
sexpl
ai
ned i
nt
he
caseofFi
l
i
nvestv
.Phi
lAce
t
yl
ene,supr
a.
Ther
e ar
et
wo ways atl
ooki
ng at
daci
onenpago:
1. Cl
assi
calway wher
e dac
i
on en
pagoi
st
r
eat
edasasal
e.
2. Moder
n concept w/c t
r
eat
s
dac
i
onenpagoasanovat
i
on.
Cast
an has anot
her vi
ew- Bot
h
ar
ewr
ong. A dac
i
on enpagoi
snotasal
e
bec.t
her
ei
s no i
nt
ent
i
on t
o ent
eri
nt
oa
cont
r
actofsal
e. I
ti
snotal
soanovat
i
on
bec. i
n novat
i
on, t
he ol
d obl
i
gat
i
on i
s
ext
i
ngui
shed and a new obl
i
gat
i
on t
akes
i
t
s pl
ace. Buther
e,t
he ol
d obl
i
gat
i
on i
s
ext
i
ngui
shed.
What t
akes i
t
s pl
ace?
Not
hi
ng.Sowhati
si
t
?I
ti
saspeci
alf
or
m
ofpaymentw/cr
esembl
esasal
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
.
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2. Towhatext
enti
st
heobl
i
gat
i
on
ext
i
ngui
shed? Upt
ot
heval
ueoft
het
hi
ng
gi
ven (
t
het
hi
ngmustbeappr
ai
sed)unl
ess
t
he par
t
i
es agr
ee on
a
t
ot
al
ext
i
ngui
shment
.(
Lopez
.v
.CA,supr
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
ch i
sbei
ngpai
dbyt
hedebt
or
who has sever
alobl
i
gat
i
ons oft
he same
ki
nd i
nf
avoroft
hecr
edi
t
ort
o whom t
he
paymenti
smade(
quot
i
ngTol
ent
i
no.
)
Rul
es wher
et
he amount sent by
t
hedebt
ort
ot
hecr
edi
t
ori
sl
esst
han al
l
t
hati
sdue.
Fi
r
str
ul
e: Appl
yi
n accor
dancew/
t
heagr
eement
.
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
egr
i
t
y)
wher
et
her
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 most
oner
ousdebt
.(
Ar
t
.1252,par
.1.
)
What ar
e t
he r
ul
es t
o
de
t
er
mi
new/ci
st
hemostoner
ous
debt
?
1. I
fonei
si
nt
er
estpayi
ng
and t
heot
heri
snot
,t
hedebtw/c
i
si
nt
er
estpayi
ngi
smor
eoner
ous.
2. I
fonei
sa secur
ed debt
and t
he ot
heri
s not
,t
he secur
ed
debti
smor
eoner
ous
3. I
fbot
h ar
ei
nt
er
estf
r
ee,
one i
s ol
der t
han t
he fir
st
,t
he
newer one i
s mor
e oneous bec.
pr
escr
i
pt
i
on wi
l
lt
ake l
onger w/
r
espectt
ot
henewerdebt
.
Fi
f
t
hr
ul
e: Pr
opor
t
i
onalappl
i
cat
i
on
i
ft
hedebt
sar
eequal
l
yoner
ous.
Ar
t
.1252. He who has var
i
ous
debt
soft
hesameki
ndi
nf
avorofoneand
t
hesamecr
edi
t
or
,maydecl
ar
eatt
het
i
me
ofmaki
ng t
hepayment
,t
owhi
ch oft
hem
t
he same must be appl
i
ed. Unl
ess t
he
par
t
i
es so st
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
const
i
t
ut
ed,appl
i
cat
i
on shal
lnotbemade
ast
odebt
swhi
char
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 same,unl
ess t
her
ei
sa
causef
ori
nval
i
dat
i
ngt
hecont
r
act
.
Ar
t
.1253. I
ft
he debt pr
oduces
i
nt
er
est
,paymentoft
hepr
i
nci
palshal
lnot
be deemed t
o have been made unt
i
lt
he
i
nt
er
est
shavebeencover
ed.
Ar
t
. 1254. When t
he payment
cannotbeappl
i
ed i
n accor
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
cumst
ances,t
he
debtwhi
ch i
smostoner
oust
ot
hedebt
or
,
amongt
hosedue,shal
lbedeemedt
ohave
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
hem pr
opor
t
i
onat
el
y
.
(
noti
nBavi
er
a'
sout
l
i
ne)
Subsect
i
on2.
- PaymentbyCessi
on
Bal
ane: Conceptofpaymentbyc
essi
on.
Pr
oper
t
yi
st
ur
nedoverbyt
hedebt
ort
ot
he
cr
edi
t
orwho acqui
r
es t
he r
i
ghtt
o sel
li
t
and di
vi
de t
he ne
t pr
oceeds among
t
hemsel
ves.
Whyi
spaymentby c
essi
on aspeci
alf
or
m
of payment
?Bec. t
her
e i
s no
compl
e
t
enessofper
f
or
mance(
r
e:i
nt
egr
i
t
y
.
)
I
nmostcases,t
her
ewi
l
lbeabal
ancedue.
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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
erofowner
shi
pf
r
om t
he
debt
or t
ot
he cr
edi
t
or
. I
n payment by
c
esi
on,t
her
ei
s no t
r
ansf
erofowner
shi
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
hedebt
orand appl
y
t
hepr
oceedsoft
hesal
et
ot
hesat
i
sf
act
i
on
oft
hei
rcr
edi
t
.
Does payment by c
essi
on t
er
mi
nat
e al
l
debt
sdue?- Gener
al
l
y
,no. Butonl
yt
o
t
he ext
ent of t
he ne
t pr
oceeds. The
ext
i
ngui
shment of t
he obl
i
gat
i
on i
s pr
o
t
ant
o. Thi
si
st
o be di
st
i
ngui
shed f
r
om
Legalcessi
on wher
et
heext
i
ngui
shmentof
t
he obl
i
gat
i
on i
st
ot
al
. Legalcessi
on i
s
gover
nedbyt
heI
nsol
vencyLaw.
Ar
t
.1255. Thedebt
ormaycedeor
assi
gn hi
s pr
oper
t
yt
o hi
s cr
edi
t
or
si
n
paymentofhi
sdebt
s. Thi
scesi
on,unl
ess
t
her
ei
s st
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
ch,on t
heeffectoft
he
cessi
on,ar
emadebe
t
ween t
hedebt
orand
hi
scr
edi
t
or
sshal
lbegover
ned byspeci
al
l
aws.
ac
c
i
pi
endi (
when t
he cr
edi
t
or w/o j
ust
cause,r
ef
usest
oacceptpayment
.
)
Consequence when t
he cr
edi
t
orw/o j
ust
cause,r
ef
uses t
o acceptpayment
- The
debt
or may j
ust del
ay payment
. But
some
t
hi
ngst
i
l
lhangsabovehi
shead. He
i
st
her
ef
or
e,gi
ven t
he opt
i
on t
o consi
gn.
Di
st
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
ext
i
ngui
shest
heobl
i
gat
i
on.
Ar
t
.1256. I
ft
hecr
edi
t
ort
owhom
t
enderofpaymenthasbeen mader
ef
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
hesameeffecti
nt
hef
ol
l
owi
ngcases:
(
1)When t
he cr
edi
t
ori
s absentor
unknown,ordoesnotappearatt
hepl
ace
ofpayment
;
(
2) When he i
si
ncapaci
t
at
ed t
o
r
ecei
vet
hepaymentatt
het
i
mei
ti
sdue;
(
3)When,wi
t
hout j
ustcause,he
r
ef
usest
ogi
vear
ecei
pt
;
(
4) When t
wo or mor
e per
sons
cl
ai
mt
hesamer
i
ghtt
ocol
l
ect
;
(
5)When t
het
i
t
l
eoft
heobl
i
gat
i
on
hasbeenl
ost
.
B.TenderofPaymentandConsi
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
edi
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
edi
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
eswhenevert
he
cr
edi
t
orcannotacceptorr
ef
usest
oaccept
paymentand i
tgener
al
l
yr
equi
r
es a pr
i
or
t
enderofpayment
.
Requi
si
t
esofaVal
i
dConsi
gnat
i
on.
Thedebt
ormustshow (
1)t
hatt
her
ewasa
debtdue;(
2) t
hatt
heconsi
gnat
i
on oft
he
obl
i
gat
i
on hadbeen madebec.t
hecr
edi
t
or
t
o whom t
ender of payment was made
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r
ef
usedt
oaccepti
t
,orbec.hewasabsent
or i
ncapaci
t
at
ed,or bec.sever
alper
sons
cl
ai
med t
o be ent
i
t
l
ed t
o r
ecei
ve t
he
amountdue;(
3) t
hatpr
evi
ous not
i
ce of
t
he consi
gnat
i
on had been gi
ven t
ot
he
per
soni
nt
er
est
edi
nt
heper
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
er t
he
consi
gnat
i
on had been made t
he per
son
i
nt
er
est
ed was not
i
f
ed t
her
eof (
second
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
ve.
ALFONSO V.CA [
168 S 545] - Such
r
ej
ect
i
on r
ender
ed t
he pr
oposal of f
r
ee
r
ent
alw/of
or
ceand effect
. Def
.t
her
ef
or
e
wasdut
yboundt
opayt
her
ent
al
sast
hey
f
al
ldue i
n or
der t
o abor
tany ej
ect
ment
pr
oceedi
ngs agai
nst hi
m.
.I
ft
he l
essor
r
ef
uses t
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 notavai
lofsuch
r
emedy so t
hatwhen pl
ai
nt
i
ffs fil
ed t
he
ej
ect
ment pr
oceedi
ngs agai
nst hi
m, t
he
r
ent
al
scor
r
espondi
ngt
het
hemo.ofApr
i
l
t
oJul
y1984hadnotye
tbeen pai
dbydef
.
Tender of payment i
s not enoughconsi
gnat
i
on must f
ol
l
ow i
n or
der t
o
ext
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
ayed 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
ewasnoval
i
d
t
enderofpaymentnorconsi
gnat
i
on oft
he
sum ofP18,
520 w/ct
hey acknowl
edge t
o
havebeen deposi
t
ed i
n cour
ton 1/22/81
fiveyear
saf
t
ert
heamountofP27,
000had
t
o be pai
d.xxx Agai
nstt
hi
s suggest
i
on
i
gnor
es t
he f
actt
hat consi
gnat
i
on al
one
pr
oducedt
heeffectofpaymenti
nt
hecase
atbar bec.i
twas est
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 REMANANT V.CA [
231S 272] xxx[
U]
ponconsi
gnat
i
on byt
heVent
ani
l
l
as
oft
hesum due,t
het
r
i
alcour
tmayent
er
j
udgment cancel
l
i
ng t
he t
i
t
l
e of t
he
pe
t
i
t
i
oner over t
he pr
oper
t
y and
t
r
ansf
er
r
i
ngt
hesamet
ot
her
espondent
s.
Thi
sj
udgment
sshal
lhavet
hesamef
or
ce
and effectasa conveyance dul
y execut
ed
i
n accor
dancew/ t
her
equi
r
ement
soft
he
l
aw.
Ar
t
. 1257. I
n or
der t
hat t
he
consi
gnat
i
on oft
het
hi
ngduemayr
el
ease
t
heobl
i
gor
,i
tmustfir
stbeannounced t
o
t
heper
sonsi
nt
er
est
edi
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 st
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
enderofpaymentshal
lbepr
oved,i
na
pr
opercase,andt
heannouncementoft
he
consi
gnat
i
oni
not
hercases.
The consi
gnat
i
on havi
ng been
made,t
hei
nt
er
est
ed par
t
i
esshal
lal
so be
not
i
fiedt
her
eof
.
Ar
t
. 1259.
The expenses of
consi
gnat
i
on,when pr
oper
l
y made,shal
l
bechar
gedagai
nstt
hecr
edi
t
or
.
Ar
t
.1260. Once t
heconsi
gnat
i
on
has been dul
y made,t
hedebt
ormayask
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lOMoARcPSD|22267210
t
hej
udge t
o or
dert
hecancel
l
at
i
on oft
he
obl
i
gat
i
on.
Bef
or
et
hecr
edi
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 deposi
t
ed,al
l
owi
ng
t
heobl
i
gat
i
ont
or
emai
ni
nf
or
ce.
Ar
t
. 1261. I
f
,t
he consi
gnat
i
on
havi
ng been made, t
he cr
edi
t
or shoul
d
aut
hor
i
z
et
hedebt
ort
owi
t
hdr
aw t
hesame,
he shal
ll
ose ever
y pr
ef
er
ence whi
ch he
may have overt
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
yofPer
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
er
mi
nat
et
hi
ng(
Ar
t
.
1262)
;i
n an obl
i
gat
i
on t
o gi
ve a gener
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
veni
ng
i
mpossi
bi
l
i
t
y
. The ki
nd of i
mpossi
bl
i
t
y
t
al
ked about her
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 voi
d. I
twi
l
lbecase
of an obl
i
gat
i
on w/o a cause (
see Ar
t
.
1409,no.2 "
t
hose wher
et
he cause or
obj
ect di
d not exi
st at t
he t
i
me oft
he
t
r
ansact
i
on"
-t
hephr
ase"
di
dnotexi
stat
t
het
i
meoft
het
r
ansact
i
on"i
si
naccur
at
e;
i
ti
spossi
bl
et
oent
eri
nt
ocont
r
act
swher
e
t
heobj
ectdi
d notexi
statt
het
i
meoft
he
t
r
ansact
i
on, e.
g.
,cont
r
act over a f
ut
ur
e
t
hi
ng;t
hephr
aseshoul
dhavebeen "
coul
d
notexi
st
"
) A cont
r
actwhosepr
est
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.
t
hi
ngshal
lbeext
i
ngui
shed i
fi
tshoul
d be
l
ostordest
r
oyed wi
t
houtt
he f
aul
toft
he
debt
or
, and bef
or
e he has i
ncur
r
ed i
n
del
ay
.
When by l
aw or st
i
pul
at
i
on, t
he
obl
i
gori
sl
i
abl
eeven f
orf
or
t
ui
t
ousevent
s,
t
he l
oss oft
he t
hi
ng does notext
i
ngui
sh
t
heobl
i
gat
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
ouseventi
nAr
t
.1174.Theeffecti
s
t
hesame:Theobl
i
gat
i
oni
sext
i
ngui
shedi
f
t
he obl
i
gat
i
on i
st
o del
i
vera de
t
er
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
ext
i
ngui
shed.
Genus nunquam per
i
t
(
"
Genus never per
i
shes.
" Thi
s i
s t
he
gener
alr
ul
e. Butwhati
snotcover
ed by
t
hi
sr
ul
ei
s an obl
i
gat
i
on t
o del
i
ver a
l
i
mi
t
ed gener
i
c(
some
t
hi
ng i
n be
t
.speci
fic
and gener
i
ct
hi
ng)
, e.
g.
,"
For P3,
000, I
pr
omi
se t
o del
i
ver t
o you one of my
wat
ches.
" Thi
s obl
i
gat
i
on does notr
eal
l
y
f
al
lunderei
t
herAr
t
.1262 orAr
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
ext
i
ngui
shed byt
hel
oss ofal
lt
het
hi
ngs
t
hr
oughf
or
t
ui
t
ousevent
.
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
dest
r
uct
i
on ofanyt
hi
ng oft
he sameki
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
cumst
ances, t
he par
t
i
al l
oss of t
he
obj
ectoft
heobl
i
gat
i
on i
ssoi
mpor
t
antas
t
oext
i
ngui
sht
heobl
i
gat
i
on.
Ar
t
. 1262. An obl
i
gat
i
on whi
ch
consi
st
si
nt
he del
i
ver
y ofa de
t
er
mi
nat
e
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lOMoARcPSD|22267210
Ar
t
.1265. Whenevert
he t
hi
ng i
s
l
osti
nt
hepossessi
onoft
hedebt
or
,i
tshal
l
bepr
esumed t
hatt
hel
osswasduet
ohi
s
f
aul
t
,unl
esst
her
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,st
or
m,
orot
hernat
ur
alcal
ami
t
y
.
Ar
t
. 1165. When
whati
st
o bedel
i
ver
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
ver
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
gat
i
on
be compl
i
ed wi
t
h at t
he
expenseoft
hedebt
or
.
I
ft
heobl
i
gordel
ays,or
haspr
omi
sed t
o del
i
vert
he
same t
hi
ng t
ot
wo ormor
e
per
sons who do not have
t
he same i
nt
er
est
,he shal
l
be r
esponsi
bl
e f
or any
f
or
t
ui
t
ouseventunt
i
lhehas
effect
edt
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 del
ay
,
and t
hose who i
n any
manner cont
r
avene t
he
t
enort
her
eof ar
el
i
abl
ef
or
damages.
Ar
t
. 1266.
The debt
or i
n
obl
i
gat
i
ons t
o do shal
lal
so be r
el
eased
when t
he pr
est
at
i
on becomes l
egal
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
ve and Subj
ect
i
ve
I
mpossi
bi
l
i
t
y
.
- I
n obj
ect
i
ve i
mpossi
bi
l
i
t
y
,
t
he actcannot be done by anyone.The
effect of obj
ect
i
ve i
mpossi
bi
l
i
t
y i
s t
o
ext
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
ews as t
ot
he effect ofa
subj
ect
i
ve i
mpossi
bi
l
i
t
y: (
1) One vi
ew
hol
ds t
hat t
he obl
i
gat
i
on i
s not
ext
i
ngui
shed. The obl
i
gor shoul
d ask
anot
hert
odot
heobl
i
gat
i
on. (
2) Anot
her
vi
ew hol
ds t
hat t
he obl
i
gat
i
on i
s
ext
i
ngui
shed.
(
3) A t
hi
r
d vi
ew
di
st
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
such t
hat subj
ect
i
ve i
mpossi
bi
l
i
t
yi
sa
cause f
or ext
i
ngui
shes a ver
y per
sonal
obl
i
gat
i
on butnotanobl
i
gat
i
on w/ci
snot
ver
yper
sonal
.
BALANE CASES:
PEOPLE V. FRANKLI
N [
39 S 363] Appel
ant now cont
ends t
hat t
he l
ower
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 post
ed by i
t
bec.i
t
sf
ai
l
ur
et
o pr
oduce and sur
r
ender
t
heaccused 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 hert
o
l
eave t
he count
r
y
. I
n suppor
t of t
hi
s
cont
ent
i
on,t
hepr
ovi
si
onsofAr
t
.1266ar
e
i
nvoked.
HELD: Ar
t
.1266,NCC doesnotappl
yt
oa
sur
et
yupon abai
lbond.
- Ar
t
.1266 does
notappl
yt
oasur
e
t
yupon abai
lbond,as
sai
dAr
t
.speaksofar
el
at
i
on be
t
.adebt
or
andcr
edi
t
or
,w/cdoesnotexi
sti
nt
hecase
ofasur
e
t
yuponabai
lbond,ononehand,
and t
he St
at
e,on t
he ot
her
. For whi
l
e
sur
e
t
i
esuponabai
lbond(
orr
ecogni
z
ance)
can di
schar
get
hemsel
vesf
r
om l
i
abi
l
i
t
yby
sur
r
ender
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,
asagener
alr
ul
e,can onl
yber
el
eased by
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paymentoft
hedebtorper
f
or
manceoft
he
actst
i
pul
at
ed.
I
MMACULATA V.NAVARRO [
160S 211] Weher
eby gr
antsai
d al
t
er
nat
i
ve causeof
act
i
on or pr
ayer
. 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 Feb. 3,1974 when, as
pr
ayed f
orbypr
vt
.r
es,and asor
der
ed by
t
hecour
taquo,adeedofconveyancewas
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
egal
r
edempt
i
onal
l
owedbyt
hePubl
i
cLandAct
.
PNCC V.NLRC [
193 S 401] - An obl
i
gor
shal
lber
el
eased f
r
om hi
sobl
i
gat
i
on when
t
he pr
est
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
each ofcont
r
actf
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
onhasbecome
l
egal
l
y orphysi
cal
l
yi
mpossi
bl
e w/o f
aul
t
onhi
spar
t
.Thesuper
veni
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
er r
est
i
t
ut
i
on of what he may have
r
ecei
ved,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 damages f
or hi
si
nabi
l
i
t
yt
o
per
f
or
m.
Ar
t
.1267. When t
he ser
vi
ce has
become so di
fficul
t as t
o be mani
f
est
l
y
beyond 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
c st
ant
i
bus.
- Li
t
er
al
l
y
means"
t
hi
ngsast
heyst
and.
"I
ti
sshor
t
f
orc
l
ausul
ar
ebussi
cs
t
ant
i
bus(
"
agr
eement
of t
hi
ngs as t
hey st
and.
"
) Thi
si
sa
pr
i
nci
pl
e ofi
nt
er
nat
i
onall
aw w/c hol
ds
t
hatwhen 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
cumst
ances att
he t
i
me i
twas ent
er
ed
i
nt
oandshoul
dt
heci
r
cumst
anceschange
ast
omaket
hef
ul
fil
l
mentoft
het
r
eat
yver
y
di
fficul
t
,onemayask f
orat
er
mi
nat
i
on of
t
het
r
eat
y
. Thi
spr
i
nci
pl
eofi
nt
er
nat
i
onal
l
aw hasspi
l
l
edoveri
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 ext
r
eme di
fficul
t
y and
f
r
ust
r
at
i
onofcommer
ci
alobj
ect
.
I
thasf
our(
4)r
equi
si
t
es:
1. Theeventorchangecoul
d not
have been f
or
eseen at t
he t
i
me of t
he
execut
i
onoft
hecont
r
act
.
2. Theeventorchangemakest
he
per
f
or
mance ext
r
emel
y di
fficul
t but not
i
mpossi
bl
e.
3.Theeventmustnotbeduet
oan
actofei
t
herpar
t
y
.
4. The cont
r
act i
sf
or a f
ut
ur
e
pr
est
at
i
on. I
ft
hecont
r
acti
sofi
mmedi
at
e
f
ul
fil
l
ment
,t
he gr
oss i
nequal
i
t
y of t
he
r
eci
pr
ocalpr
est
at
i
on mayi
nvol
vel
esi
on or
wantofcause.
I
nt
hecase ofNaga,t
hecour
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
sver
yst
r
i
ct
. Thi
spr
i
nci
pl
ehas
al
waysbeen st
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. Ever
y
obl
i
gat
i
on i
s di
fficul
t
. The per
f
or
mance
must be ext
r
emel
y di
fficul
ti
n or
der f
or
r
ebussi
cst
ant
i
bust
oappl
y
.
BALANE CASES:
LAGUNA V.MANABAT [
59 S 650] - Ar
t
.
1680, i
t wi
l
l be obser
ved i
s a speci
al
pr
ovi
si
on f
or l
eases ofr
ur
all
ands. No
ot
herl
egalpr
ovi
si
on makesi
tappl
i
cabl
et
o
or
di
nar
yl
eases.xxx
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Even i
ft
he ci
t
ed ar
t
i
ecl
e wer
ea
gener
al r
ul
e on l
ease, i
t
s pr
ovi
si
ons
never
t
hel
ess do notext
end t
o pe
t
i
t
i
oner
s.
Oneoft
her
equi
si
t
esi
st
hatt
hecauseof
t
he l
oss oft
he f
r
ui
t
s oft
he l
eased pr
op.
mustbean "
ext
r
aor
di
nar
y and unf
or
seen
f
or
t
ui
t
ous event
.
" The ci
r
cumst
ances of
t
hecasef
ai
lt
osat
i
sf
ysuch r
equi
si
t
e. xxx
[
T]
heal
l
eged causesf
ort
hesuspensi
on of
oper
at
i
onsont
hel
i
nesl
eased,namel
y
,t
he
hi
gh pr
i
ces ofspar
e par
t
s and gasol
i
ne
andt
her
educt
i
on oft
hedol
l
aral
l
ocat
i
ons,
"
al
r
eadyexi
st
edwhen t
hecont
r
actofl
ease
was execut
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
nes cannot
,
t
her
ef
or
e,beascr
i
bed t
of
or
t
ui
t
ousevent
s
orci
r
cumst
ancesbeyondt
hei
rcont
r
ol
,but
t
ot
hei
rownvol
unt
ar
ydesi
st
ance.
xxx Per
f
or
mancei
snotexcusedby
subsequent i
nabi
l
i
t
y t
o per
f
or
m, by
unf
or
seen di
fficul
t
i
es, by unusual or
unexpec
t
ed expenses, by danger
, by
i
nevi
t
abl
e acci
dent
, by t
he br
eaki
ng of
machi
ner
y
, by st
r
i
kes, by si
ckness, 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
alst
r
i
ngenc
y,
orby st
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
ovi
dent
,unpr
ofit
abl
e or i
npr
ac
t
i
c
abl
e,
i
l
l
advi
sed or even 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 cont
r
actbutt
hatt
he
cour
t"
r
ender j
udgement modi
f
yi
ng t
he
t
er
msand condi
t
i
onsoft
hecont
r
act
.
.
.by
fixi
ng t
he pr
oper shar
es t
hat shoul
d
per
t
ai
nt
ot
he her
ei
n par
t
i
es out oft
he
gr
oss pr
oceeds f
r
om t
he sal
es 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
evi
set
he
cont
r
actort
ofixt
hedi
vi
si
onofshar
esbe
t
.
t
hepar
t
i
esascont
r
act
ual
l
yst
i
pul
at
ed w/
t
he f
or
ceofl
aw be
t
.t
he par
t
i
es,so as t
o
subst
i
t
ut
e i
t
s own t
er
ms f
or t
hose
covenant
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
er
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
sper
mi
t
t
ed.
NAGA TELEPHONE V.CA [
230 S 351] Thet
er
m"
ser
vi
c
e"shoul
dbeunder
st
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
ce"
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
st
ood
as r
ef
er
r
i
ng
t
o
t
he
"
per
f
or
mance" 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
empl
at
edi
nsai
dar
t
i
cl
e.Fur
t
her
mor
e,
abar
er
eadi
ngoft
hi
sar
t
i
cl
er
eveal
st
hati
t
i
s nota r
equi
r
ementt
her
eundert
hatt
he
cont
r
actbe f
or f
ut
ur
e ser
vi
ce w/ f
ut
ur
e
unusualchange. Accdg.t
oTol
ent
i
no,Ar
t
.
1267 st
at
es i
n our l
aw t
he doct
r
i
ne of
unf
or
seen event
s. Thi
si
ssai
dt
obebased
on t
he di
scr
edi
t
ed t
heor
y of r
ebus si
c
st
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
esst
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
o exi
st
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
vesr
i
set
oar
i
ghtt
or
el
i
efi
nf
avoroft
he
par
t
ypr
ej
udi
ced.
Bal
ane: The Cour
twentt
oo f
ari
nt
hi
s
case. I
t even went t
o t
he ext
ent of
st
i
pul
at
i
ng f
ort
hepar
t
i
es i
nt
henameof
equi
t
y
.
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Ar
t
. 1268. When t
he debt ofa
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
evermay be t
he cause f
ort
he
l
oss,unl
esst
het
hi
nghavi
ngbeen offer
ed
byhi
mt
ot
heper
sonwhoshoul
dr
ecei
vei
t
,
t
he l
at
t
err
ef
used wi
t
houtj
ust
i
ficat
i
on t
o
accepti
t
.
r
equi
r
es t
he accept
ance by t
he obl
i
gor
.I
t
maybemadeexpr
essl
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
ch gover
n
i
noffici
ous donat
i
ons. Expr
ess condonat
i
on shal
l
,f
ur
t
her
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 havi
ng
been ext
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
nst
t
hi
r
dper
sonsbyr
easonoft
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
vi
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
tadebtevenbef
or
ei
ti
sdue.
2.
Renunci
at
i
on must be
gr
at
ui
t
ous. I
fr
enunci
at
i
on i
s f
or a
consi
der
at
i
on,t
hemodeofext
i
ngui
shment
may be some
t
hi
ng el
se. I
t may be
novat
i
on,compr
omi
seofdac
i
onenpago.
3.Accept
ancebyt
hedebt
or
4.Capaci
t
yoft
hepar
t
i
es.
The f
or
m of donat
i
on must be
obser
ved. I
ft
he condonat
i
on i
nvol
ves
movabl
es,appl
y Ar
t
.748. I
fi
ti
nvol
ves
i
mmovabl
es,appl
yAr
t
.749.Butnot
et
hat
t
hecr
edi
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 ext
i
ngui
shed not by
vi
r
t
ueofcondonat
i
on butbywai
verunder
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 per
son oroft
her
emi
ssi
on
orr
el
easeofadebtoft
hel
egat
eeshal
lbe
effect
i
ve onl
y as r
egar
ds t
hatpar
toft
he
cr
edi
tordebtexi
st
i
ng att
he t
i
me oft
he
deat
hoft
het
est
at
or
.
I
nt
he fir
stcase,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
ee an acqui
t
t
ance,shoul
d
her
equestone.
I
n bot
h cases, t
he l
egacy shal
l
compr
i
seal
li
nt
er
est
son t
hecr
edi
tordebt
whi
ch maybeduet
het
est
at
oratt
het
i
me
ofhi
sdeat
h.
Ar
t
.936. Thel
egacyr
ef
er
r
ed t
oi
n
t
he pr
ecedi
ng ar
t
i
cl
e shal
ll
apse i
ft
he
t
est
at
or
,af
t
erhavi
ngmadei
t
,shoul
dbr
i
ng
anact
i
onagai
nstt
hedebt
orf
orpaymentof
hi
sdebt
,even i
fsuch paymentshoul
d not
havebeeneffect
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
st
ood t
o
di
schar
geonl
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
maybemadeexpr
essl
yori
mpl
i
edl
y
.
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One and t
he ot
her ki
nd shal
lbe
subj
ect t
o t
he r
ul
es whi
ch gover
n
i
noffici
ous donat
i
ons. Expr
ess condonat
i
on shal
l
,f
ur
t
her
mor
e,compl
y wi
t
ht
he
f
or
msofdonat
i
on.
Ar
t
. 746.
Accept
ance must 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
ecei
ve,bywayofdonat
i
on,mor
et
han
hemaygi
veorr
ecei
vebywi
l
l
.
Thedonat
i
onshal
lbei
noffici
ousi
n
al
lt
hati
tmayexceedt
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
her
eof
,
pr
ovi
ded her
eser
ves,i
nf
ul
l
owner
shi
p or i
n usuf
r
uct
,
suffici
ent means f
or t
he
suppor
t ofhi
msel
f
,and of
al
lr
el
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
ed by t
he
donor
.
Wi
t
hout
such
r
eser
vat
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
es t
he
si
mul
t
aneous del
i
ver
y oft
he t
hi
ng or of
t
he document r
epr
esent
i
ng t
he r
i
ght
donat
ed.
I
ft
heval
ueoft
heper
sonalpr
oper
t
y
donat
edexceedsfivet
hr
ousand pesos,t
he
donat
i
on and t
he accept
ance shal
l be
madei
n wr
i
t
i
ng.Ot
her
wi
se,t
hedonat
i
on
shal
lbevoi
d.
Ar
t
. 749. I
n or
der t
hat t
he
donat
i
on ofan i
mmovabl
emaybeval
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 char
ges whi
ch t
he
doneemustsat
i
sf
y
.
Theaccept
ancemaybemadei
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
ance i
s made i
n a
separ
at
ei
nst
r
ument
,t
he donor shal
lbe
not
i
f
ed t
her
eofi
n an aut
hent
i
cf
or
m,and
t
hi
s st
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
es1271 and1272r
ef
ert
oa
ki
nd of i
mpl
i
ed r
enunci
at
i
on when t
he
cr
edi
t
ordi
vest
shi
msel
foft
hepr
oofcr
edi
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
shei
r
st
opr
ovet
hatt
hey
pai
dt
he debt
,when t
he pr
ovi
si
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
ver
yofapr
i
vat
e
document
, evi
denci
ng a cr
edi
t
, made
vol
unt
ar
i
l
y by t
he cr
edi
t
ort
ot
he debt
or
,
i
mpl
i
es t
he r
enunci
at
i
on of t
he act
i
on
whi
cht
hef
or
merhadagai
nstt
hel
at
t
er
.
I
fi
n or
dert
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
n vi
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
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bec.t
her
ei
sal
waysacopyi
nt
hear
chi
ves
w/ccanbeusedt
opr
ovet
hecr
edi
t
.
Pr
i
vat
e document r
ef
er
s t
o t
he
or
i
gi
nalor
i
gi
nali
n or
derf
orAr
t
.1271 t
o
appl
y
.(
Tr
ansPaci
fic.v
.CA,supr
a.
)
BALANE CASES:
TRANSPACI
FI
C V.CA [
234 S 494] - I
t
may notbe ami
ss t
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
edi
t wher
e
mor
econvi
ci
ngevi
dencewoul
dber
equi
r
ed
t
han whatnor
mal
l
ywoul
d becal
l
ed f
ort
o
pr
ovepayment
. Ther
at
i
onal
ef
oral
l
owi
ng
t
he pr
esumpt
i
on of r
enunci
at
i
on i
n t
he
del
i
ver
y of a pr
i
vat
ei
nst
r
ument i
st
hat
,
unl
i
ke t
hatofa publ
i
ci
nst
r
ument
,t
her
e
coul
d bej
ustonecopy oft
heevi
denceof
cr
edi
t
. Wher
e sever
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 wer
et
o
beappl
i
eddi
ffer
ent
l
y
.
Ar
t
.1272. Whenever t
he pr
i
vat
e
document i
n whi
ch t
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
tvol
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
easecheckagai
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
sat
i
sf
act
or
y
i
f
uncont
r
adi
ct
ed,butmay be cont
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
eact
;ot
her
wi
se,t
hatt
hi
ngswhi
ch a
per
son possesses, or exer
ci
ses act
s of
owner
shi
pover
,ar
eownedbyhi
m;
(
k)Thata per
son i
n possessi
on of
an or
der 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
sat
i
sf
act
or
y
i
f
uncont
r
adi
ct
ed,butmay be cont
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 money pai
d by one t
o
anot
herwasduet
ot
hel
at
t
er
;
(
g)Thatat
hi
ngdel
i
ver
ed byonet
o
anot
herbel
ongedt
ot
hel
at
t
er
;
(
h)Thatan obl
i
gat
i
on del
i
ver
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
er
onesi
spr
oduced;
(
k)Thata per
son i
n possessi
on of
anor
deronhi
msel
ff
ort
hepaymentoft
hey
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
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lOMoARcPSD|22267210
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
ershal
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
hesamet
i
me
as t
hatoft
he debt
or
,and f
or t
he same
causesasal
lot
herobl
i
gat
i
ons.
Ar
t
.2105. Thedebt
orcannotask
f
ort
her
e
t
ur
n oft
het
hi
ngpl
edged agai
nst
t
hewi
l
loft
hecr
edi
t
or
,unl
essandunt
i
lhe
has pai
dt
he debtand i
t
si
nt
er
est
,wi
t
h
expensesi
napr
opercase.
Ar
t
.2080. The guar
ant
or
s,even
t
hough t
heybesol
i
dar
y
,ar
er
el
eased f
r
om
t
hei
robl
i
gat
i
on wheneverby some actof
t
hecr
edi
t
ort
heycannotbesubr
ogat
ed t
o
t
he r
i
ght
s,mor
t
gages,and pr
ef
er
ences of
t
hel
at
t
er
.
(
Pr
ovi
si
ons Common t
o Pl
edge and
Mor
t
gage)
Ar
t
.2085. Thef
ol
l
owi
ngr
equi
si
t
es
ar
eessent
i
alt
ot
hecont
r
act
sofpl
edgeand
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
esumed t
hatt
he
accessor
y obl
i
gat
i
on ofpl
edge has been
r
emi
t
t
ed when t
het
hi
ng pl
edged,af
t
eri
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:Theaccesor
yobl
i
gat
i
onofpl
edged
i
sext
i
ngui
shedbec.pl
edgei
sapossessor
y
l
i
en. Thepr
esumpt
i
on i
nt
hi
scasei
st
hat
t
he pl
edgee has sur
r
ender
ed 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
espr
escr
i
bed i
n ar
t
i
cl
e2085,i
ti
s
necessar
y
,i
n or
der 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
ext
i
ngui
shed f
r
om t
het
i
met
hechar
act
er
s
ofcr
edi
t
orand debt
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
hecr
edi
t
orand
debt
orwi
t
hr
espectt
ot
hesameobl
i
gat
i
on.
Ther
ear
et
wo(
2)r
equi
si
t
es:
1. I
tmustt
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 must
bei
nvol
ved.
ddd
Rat
i
onal
e.
- Youbecomeyourowncr
edi
t
or
oryou becomeyourown debt
or
. So how
canyousueyour
sel
f
.
Whatmaycauseamer
gerorconf
usi
on?(
1) Successi
on, whe
t
her compul
sor
y
,
t
est
ament
ar
y or i
nt
est
at
e;(
2) Donat
i
on;
(
3)Negot
i
at
i
onofanegot
i
abl
ei
nst
r
ument
.
Because ofi
t
s nat
ur
e,conf
usi
on/
mer
ger may over
l
ap w/ ot
her causes of
ext
i
ngui
shment
. Forexampl
e,Iowe Ms.
Ol
or
esP100,
000.Shebequeat
ht
omet
hat
cr
edi
t
. And t
hen shedi
ed. I
nt
hi
scase,
t
her
ei
s ext
i
ngui
shemnt bot
h by mer
ger
.
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Buti
nt
hi
scase,mer
gercoul
d over
l
ap w/
payment
.
(
nori
nBavi
er
a'
sout
l
i
ne)
Ar
t
. 1276. Mer
ger whi
ch t
akes
pl
acei
nt
heper
son oft
hepr
i
nci
paldebt
or
or cr
edi
t
or benefit
s t
he guar
ant
or
s.
Conf
usi
on whi
ch t
akespl
acei
nt
heper
son
ofanyoft
hel
at
t
erdoesnotext
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
ger whi
ch t
akes
pl
acei
nt
heper
son oft
hepr
i
nci
paldebt
or
or cr
edi
t
or benefit
s t
he guar
ant
or
s.
Conf
usi
on whi
ch t
akespl
acei
nt
heper
son
ofanyoft
hel
at
t
erdoesnotext
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. When t
her
ear
et
wo or
mor
e guar
ant
or
s oft
he same debt
orand
f
ort
he same debt
,t
he one among t
hem
who haspai
d maydemand ofeach oft
he
ot
her
st
he shar
e whi
ch i
s pr
opor
t
i
onal
l
y
owi
ngf
r
om hi
m.
I
fanyoft
heguar
ant
or
sshoul
d be
i
nsol
vent
,hi
sshar
eshal
lbebor
nedbyt
he
ot
her
s,i
ncl
udi
ng t
he payer
,i
nt
he same
pr
opor
t
i
on.
Thepr
ovi
si
ons oft
hi
s ar
t
i
cl
e shal
l
notbeappl
i
cabl
e,unl
esst
hepaymenthas
been madei
n vi
r
t
ueofa j
udi
ci
aldemand
orunl
esst
hepr
i
nci
paldebt
ori
si
nsol
vent
.
3.Joi
ntObl
i
gat
i
ons
Ar
t
. 1277. Conf
usi
on does not
ext
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
char
act
er
sconcur
.
4.Sol
i
dar
yObl
i
gat
i
ons
Ar
t
.
1215.
Novat
i
on,
compensat
i
on,conf
usi
on or r
emi
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 have
execut
ed any oft
hese act
s,aswel
lashe
whocol
l
ect
st
hedebt
,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
hem.
Ar
t
i
cl
e 1219. The
r
emi
ssi
on made by t
he
cr
edi
t
oroft
he shar
e whi
ch
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 bef
or
et
he r
emi
ssi
on
waseffect
ed.
Ar
t
. 1216. The cr
edi
t
or may
pr
oceed agai
nstanyofoneoft
hesol
i
dar
y
debt
or
s or some or al
l of t
hem
si
mul
t
aneousl
y
.Thedemandmadeagai
nst
one oft
hem shal
lnotbe an obst
acl
et
o
t
hosewhi
ch maysubsequent
l
ybedi
r
ect
ed
agai
nstt
heot
her
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
woormor
esol
i
dar
ydebt
or
s
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lOMoARcPSD|22267210
offert
opay
,t
hecr
edi
t
ormaychoosewhi
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
ch cor
r
esponds t
o each, wi
t
h t
he
i
nt
er
estf
ort
he paymental
r
eady made.I
f
t
he paymenti
s made bef
or
et
he debti
s
due,noi
nt
er
estf
ort
hei
nt
er
veni
ngper
i
od
maybedemanded.
When one oft
he sol
i
dar
y debt
or
s
cannot
, because of hi
s i
nsol
vency
,
r
ei
mbur
se hi
s shar
et
ot
he debt
orpayi
ng
t
heobl
i
gat
i
on,such shar
eshal
lbebor
ne
byal
lhi
scodebt
or
s,i
n pr
opor
t
i
on t
ot
he
debtofeach.
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
nstal
lt
hedebt
or
s.I
foneof
t
he l
at
t
ershoul
d be i
nsol
vent
,t
heot
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
meanyoneoft
hedebt
or
sdoesnocompl
y
wi
t
h hi
s under
t
aki
ng. The debt
or
s who
may have been r
eady t
o f
ul
fil
lt
hei
r
pr
omi
ses shal
l not cont
r
i
but
e t
o t
he
i
ndemni
t
y beyond t
he cor
r
espondi
ng
por
t
i
on oft
hepr
i
ceoft
het
hi
ngoroft
he
val
ueoft
heser
vi
cei
nwhi
cht
heobl
i
gat
i
on
consi
st
s.
F.Compensat
i
on
Bal
ane: Defini
t
i
on of Compensat
i
on.
Compensat
i
on i
samodeofext
i
ngui
shi
ng,
t
ot
heconcur
r
entamount
,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.
)
Per
haps, next t
o payment
,
compensat
i
on i
st
he mostcommon mode
ofext
i
ngui
shi
nganobl
i
gat
i
on.
Di
st
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,wher
eas i
n conf
usi
on,t
her
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
e cr
edi
t
or
s and debt
or
s ofeach
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
ust
i
fied by way of i
ndemni
t
y f
or
damagesr
ecover
abl
ebyt
hef
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
orand who may enf
or
ce
t
he j
udgmentby execut
i
on. Such cr
edi
t
,
t
her
ef
or
e,may pr
oper
l
y be t
he subj
ectof
l
egalcompensat
i
on. Qui
t
e obvi
ousl
y
,i
t
woul
d be unj
ust t
o compelpe
t
i
t
i
oner t
o
payhi
sdebtf
orP500when admi
t
t
edl
yhi
s
cr
edi
t
ori
si
ndebt
ed t
o hi
m f
ormor
et
han
P4,
000.
148S 166] - Ther
e
PNB V.ONG ACERO [
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
h ot
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
ent
evi
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 consi
st
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
oveanyi
ndebt
ednessofI
SABELA t
o
PNB. Al
lt
heydo pr
ovei
st
hata l
e
t
t
erof
cr
edi
t mi
ght have been opened f
or
I
SABELA byPNB,butnott
hatt
hecr
edi
t
waseveravai
l
ed of[
by I
SABELA"
sf
or
ei
gn
cor
r
espondent(
MAN)
]
,or t
hatt
he goods
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lOMoARcPSD|22267210
t
her
ebycover
ed wer
ei
nf
actshi
pped,and
r
ecei
vedbyI
SABELA.
FRANCI
AV.I
AC [
162S753]-[
T]
her
ecan
be no offse
t
t
i
ng of t
axes agai
nst t
he
cl
ai
mst
hatt
het
axpayermayhaveagai
nst
t
hegovt
. A per
son cannotr
ef
uset
opaya
t
axon t
hegr
ound t
hatt
hegovtoweshi
m
anamountequalt
oorgr
eat
ert
hant
het
ax
bei
ng col
l
ect
ed. The col
l
ect
i
on ofa t
ax
cannot awai
tt
he r
esul
t
s of a l
awsui
t
agai
nstt
hegovt
.
Acl
ai
mf
ort
axesi
snotsuchadebt
,
demand, cont
r
act or j
udgment as i
s
al
l
owed t
obese
t
off xxx Thegener
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
evi
ed f
or gener
alor
l
ocalgover
nment
alpur
poses. Ther
eason
onw/ct
hegen.r
ul
ei
sbased,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
er
nalr
evenuet
axescan notbet
he
subj
ect of compensat
i
on: Reason: govt
and t
axpayer '
ar
e notmut
ual
l
y cr
edi
t
or
s
anddebt
or
sofeach ot
herunderAr
t
.1278
and a"
cl
ai
mf
ort
axesi
snotsuch adebt
,
demand, cont
r
act or j
udgment as i
s
al
l
owedt
obese
t
off.
Ar
t
. 1286. Compensat
i
on t
akes
pl
acebyoper
at
i
on ofl
aw,even t
hough t
he
debt
s may be payabl
e atdi
ffer
entpl
aces,
but t
her
e shal
l be an i
ndemni
t
y f
or
expensesofexchangeort
r
anspor
t
at
i
on t
o
t
hepl
aceofpayment
.
1.Di
ffer
entKi
ndsofCompensat
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
es
ar
epr
esent
.
Ar
t
. 1279.
I
n or
der 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
her
;
(
2)That bot
h debt
s consi
st i
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
erhas
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
heroft
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
edi
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
esmustbemut
ual
l
ydebt
or
sand
cr
edi
t
or
s(
1)i
nt
hei
rownr
i
ght
,and(
2)as
pr
i
nci
pal
s. Ther
ecanbenocompensat
i
on
i
f1 par
t
y occupi
es onl
yar
epr
esent
at
i
ve
capaci
t
y
. Li
kewi
se, t
her
e can be no
compensat
i
on i
fi
n oneobl
i
gat
i
on,apar
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
swr
ong. UnderAr
t
.
418,consummabl
et
hi
ngs ar
et
hose w/c
cannotbeusedi
namannerappr
opr
i
at
et
o
t
hei
rnat
ur
ew/ot
hei
rbei
ngconsumed.I
n
ar
eci
pr
ocalobl
i
gat
i
on t
o del
i
ver hor
ses,
t
het
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
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lOMoARcPSD|22267210
r
ef
er
st
ot
hi
ngs oft
he same ki
nd w/c i
n
paymentcanbesubst
i
t
ut
edf
oranot
her
.
3. Mat
ur
i
t
yofDebt
s.
- Bot
h debt
s
mustbeduet
oper
mi
tcompensat
i
on.
4. Demandabl
e and Li
qui
dat
ed
Debt
s.
- Tol
ent
i
no: Demandabl
e means
t
hat t
he debt
s ar
e enf
or
ceabl
ei
n cour
t
,
t
her
ebei
ngnoappar
entdef
ensesi
nher
ent
i
nt
hem. The obl
i
gat
i
ons must be ci
vi
l
obl
i
gat
i
ons, excl
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
esci
ssi
on or annul
ment
,a
r
esci
ssi
bl
e or voi
dabl
e debti
s val
i
d and
demandabl
e; hence, i
t can
be
compensat
ed.
A debt i
s l
i
qui
dat
ed when i
t
s
exi
st
enceandamountar
ede
t
er
mi
ned.xxx
And a debti
s consi
der
ed l
i
qui
dat
ed,not
onl
y when i
ti
s expr
essed al
r
eady i
n
defini
t
e figur
es w/c do not r
equi
r
e
ver
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
her
shal
lt
her
ebecompensat
i
on
i
fone oft
hedebt
sconsi
st
s
i
n ci
vi
ll
i
abi
l
i
t
yar
i
si
ngf
r
om
apenaloffense.
Ar
t
. 1794. Ever
y
par
t
neri
sr
esponsi
bl
et
ot
he
par
t
ner
shi
p f
or damages
suffer
ed 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
shi
pbyhi
si
ndust
r
y
.
However
,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
heract
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
equi
r
ement
)
6. Compensat
i
on i
s notpr
ohi
bi
t
ed
byanypr
ovi
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
ee i
n
commodat
um.
Nei
t
her
can
compensat
i
on be se
t up
agai
nstacr
edi
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
fsuchcl
ai
mi
sdi
sput
ed.But
,i
ft
hecl
ai
m
i
s undi
sput
ed,as i
nt
he case atbar
,t
he
st
at
ementi
ssuffici
entand noot
herpr
oof
mayber
equi
r
ed.xxx
SOLI
NAPV.DELROSARI
O [
123S 640] Pe
t
i
t
i
onercont
endst
hatr
espondentj
udge
gr
avel
y abused her 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
esext
i
ngui
hsed t
ot
heext
entoft
hei
r
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lOMoARcPSD|22267210
r
espect
i
ve amount
s. He r
el
i
es on Ar
t
.
1278t
ot
heeffectt
hatcompensat
i
on shal
l
t
ake pl
ace when 2 per
sons,i
nt
hei
rown
r
i
ght
,ar
e cr
edi
t
or
s and debt
or
s ofeach
ot
her
. Thear
gumentf
ai
l
st
oconsi
derAr
t
.
1279 w/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
ed. I
n t
he case at bar
,t
he
pe
t
i
t
i
oner
'
scl
ai
m agai
nstt
her
esp.Lut
er
os
i
sst
i
l
lpendi
ngde
t
er
mi
nat
i
onbyt
hecour
t
.
Whi
l
ei
ti
s notf
orUs t
o pass upon t
he
mer
i
t
soft
hepl
t
ff'
scauseofact
i
on i
nt
hat
case,i
tappear
st
hatt
he cl
ai
m asser
t
ed
t
her
ei
ni
sdi
sput
edbyt
heLut
er
oson bot
h
f
act
ual and l
egal gr
ounds. Mor
e, t
he
count
er
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
egor
i
z
ed as l
i
qui
dat
ed cr
edi
tw/c may
pr
oper
l
y be se
t
off agai
nsthi
s obl
i
gat
i
on.
Compensat
i
on c
annot t
ake pl
ac
e wher
e
one'
sc
l
ai
m agi
nst t
he ot
her i
s st
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 musti
nt
hei
r own r
i
ghtbe
c
r
edi
t
or and debt
or of eac
h ot
her
.
Pe
t
i
t
i
onercont
endst
hatr
esp.CA er
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 evi
dence
showi
ngt
hatJoseLapuzst
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
vedpar
t
y
. Thi
s
cont
ent
i
on i
s unt
enabl
e. Compensat
i
on
cannott
ake pl
ace i
nt
hi
s case si
nce t
he
evi
denceshowst
hatJoseLapuzi
sonl
yan
agen ofAl
ber
tSmi
t
h and/ orDr
.Dwi
ght
Di
l
l
. Compensat
i
on t
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 ofeach ot
her
,and
t
hat each 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
her
. Mor
eover
,
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 st
i
l
lt
o be pai
d
t
her
eon.
- Mor
e,t
hel
egali
nt
er
estpayabl
e
f
r
om 2/3/51 on t
he sum ofP40,
797.
54,
r
epr
esent
i
ng usef
ulexpenses i
ncur
r
ed by
PANORI
ENTAL,i
s al
so st
i
l
lunl
i
qui
dat
ed
si
ncei
nt
er
estdoesnots
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
ext
i
ngui
shed
by
compensat
i
on si
ncet
her
ent
al
spayabl
eby
PANORI
ENTAL amountt
o P59,
500 whi
l
e
t
he expenses r
each onl
y P40,
797.
54.
Deduct
i
ng t
he l
at
t
er amount f
r
om t
he
f
or
mer
,REPUBLI
C cl
ai
mst
hatP18,
702.
46
woul
d st
i
l
lbeowi
ngbyPANORI
ENTAL t
o
REPUBLI
C. Thatar
gumentl
osessi
ghtof
t
hef
actt
hatt
ot
hesum ofP40,
797.
54wi
l
l
st
i
l
lhave t
o be added t
he l
egalr
at
e of
i
nt
er
est "
f
r
om Feb. 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
oner
cont
ends t
hat af
t
er f
or
ecl
osi
ng t
he
mor
t
gage,t
her
ei
sst
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
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lOMoARcPSD|22267210
when t
wo per
sons,i
nt
hei
rown r
i
ghtar
e
cr
edi
t
or
sanddebt
or
sofeach ot
her
. 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,even w/ot
heconsentor
knowl
edgeoft
hedebt
or
s.(
Ar
t
.1290.
)Ar
t
.
1279 r
equi
r
esamongot
her
s,t
hati
n or
der
t
hatl
egalcompensat
i
on shal
lt
ake pl
ace,
'
t
he t
wo debt
s be due' and '
t
hey be
l
i
qui
dat
ed
and
demandabl
e.
'
Compensat
i
on i
s not pr
oper wher
et
he
cl
ai
m oft
he per
son asser
t
i
ng t
he se
t
off
agai
nst t
he ot
her i
s not cl
ear nor
l
i
qui
dat
ed;compensat
i
on cannotext
endt
o
unl
i
qui
dat
ed,di
sput
ed cl
ai
m ar
i
si
ng f
r
om
br
eachofcont
r
act
.Ther
ecanbenodoubt
t
hatpe
t
i
t
i
oneri
si
ndebt
edt
opr
vtr
esp. i
n
t
heamountofP1,
062,
063.
83 r
epr
esent
i
ng
t
he pr
oceeds of her money mar
ke
t
i
nvest
ment
. Thi
s i
s admi
t
t
ed. But
whe
t
herpr
vt
.r
espi
si
ndebt
edt
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
er
t
hef
or
ecl
osur
eoft
hemor
t
gageexecut
edt
o
secur
e t
he l
oan ext
ended t
o her
,i
s
vi
gor
ousl
y di
sput
ed. Thi
s ci
r
cumst
ance
pr
event
sl
egalcompensat
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
ect
l
y obser
ved i
n hol
di
ng t
hat
t
he above pr
ovi
si
on was not appl
i
cabl
e:
Thei
nst
antcasedoesnotcer
t
ai
nl
ysat
i
sf
y
t
heabovebecause (
1) appel
l
anti
snota
debt
orofappel
l
e,i
ti
sonl
yt
hel
at
t
erwho
i
si
ndebt
ed t
o appel
l
ant
;(
2) t
he debt
s,
even 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 ofmoneynorar
et
heyof
t
hesamequal
i
t
yandki
nd.xxx
PI
ONEER I
NSURANCE V.CA [
180 S 126]
- Compensat
i
on shal
lt
akepl
acewhen 2
per
sons,i
nt
hei
rown r
i
ght
,ar
e cr
edi
t
or
s
and debt
or
s ofeach ot
her
. When 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,even w/ot
heconsentor
knowl
edgeoft
hedebt
or
s.(
Ar
t
.1290.
)Ar
t
.
1279 r
equi
r
es mong ot
her
s,t
hati
n or
der
t
hatl
egalcompensat
i
on shal
lt
ake pl
ace,
t
he2debt
sbedueand t
heybel
i
qui
dat
ed
and demandabl
e. Compensat
i
on i
s not
pr
oper wher
et
he cl
ai
m of t
he per
son
asser
t
i
ng t
he se
t
off agai
nstt
he ot
heri
s
not cl
ear nor l
i
qui
dat
ed; compensat
i
on
cannot ext
end t
o unl
i
qui
dat
ed,di
sput
ed
cl
ai
m ar
i
si
ngf
r
om br
eachofcont
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 per
son asser
t
i
ng t
he se
t
off
agai
nst t
he ot
her i
s not cl
ear nor
l
i
qui
dat
ed;compensat
i
on cannotext
endt
o
unl
i
qui
dat
ed,di
sput
ed cl
ai
m exi
st
i
ngf
r
om
br
eachofcont
r
act
.xxx
Undoubt
edl
y
,pe
t
i
t
i
oneradmi
t
st
he
val
i
di
t
y of i
t
s out
st
andi
ng account
s w/
pr
vt
.r
esp.i
nt
heamountofP22,
213.
75as
cont
ai
nedi
ni
t
sanswer
.Butwhe
t
herpr
vt
.
r
esp.i
sl
i
abl
et
opayt
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
cumst
ance pr
event
s
l
egalcompensat
i
onf
r
om t
aki
ngpl
ace.
Ar
t
. 1280. Not
wi
t
hst
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 over an obl
i
gat
i
on has a cl
ai
m f
or
damagesagai
nstt
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
eof
.
EffectofLegalCompensat
i
on
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lOMoARcPSD|22267210
Ar
t
.1289. I
faper
son shoul
d have
agai
nst hi
m sever
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
es
ment
i
oned i
n ar
t
i
cl
e 1279 ar
e pr
esent
,
compensat
i
on t
akeseffectbyoper
at
i
on of
l
aw,and ext
i
ngui
shes bot
h debt
st
ot
he
concur
r
ent amount
, even t
hough t
he
cr
edi
t
or
sand debt
or
sar
enotawar
eoft
he
compensat
i
on.
Ar
t
.1279. I
n or
der
t
hat compensat
i
on may be
pr
oper
,i
ti
snecessar
y:
(
1)Thateach 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
her
;
(
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
hey beoft
he
same ki
nd,and al
so oft
he
same qual
i
t
yi
ft
he l
at
t
er
hasbeenst
at
ed;
(
3) That t
he t
wo
debt
sbedue;
(
4) That t
hey be
l
i
qui
dat
edanddemandabl
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
ed
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
esp.Pacwel
d St
eelCor
p.
(
appel
l
ee)
,wer
e cr
edi
t
or
s and debt
or
s of
each 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
n 2separ
at
ecases,
or
der
i
ngt
hepaymentt
oeach ot
heroft
he
sum ofP10Tbywayofat
t
or
ney'
sf
ees.The
2 obl
i
gat
i
ons,t
her
ef
or
e,r
espect
i
vel
y offse
t
each ot
her
, compensat
i
on havi
ng t
aken
effectbyoper
at
i
onofl
aw andext
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 "
even 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
akes pl
ace when compensat
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 deposi
t
ar
y or of a bai
l
ee i
n
commodat
um.
Nei
t
hercancompensat
i
onbese
tup
agai
nst a cr
edi
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
vesuppor
tcannotbe
r
enounced; nor can i
t be
t
r
ansmi
t
t
ed t
o a t
hi
r
d
per
son. Nei
t
her can i
t be
compensat
ed wi
t
h whatt
he
r
eci
pi
entowest
heobl
i
gor
.
However
,suppor
ti
n
ar
r
ear
smaybecompensat
ed
and r
enounced, and t
he
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r
i
ght t
o demand t
he same
may be t
r
ansmi
t
t
ed by
oner
ousorgr
at
ui
t
oust
i
t
l
e.
Bavi
er
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
espect t
ot
he t
hi
ngs
deposi
t
ed t
o hi
m. Butt
he deposi
t
orcan
se
tupt
hecompensat
i
on.
Ar
t
.1288. Nei
t
hershal
lt
her
e be
compensat
i
on i
foneoft
hedebt
sconsi
st
s
i
n ci
vi
ll
i
abi
l
i
t
y ar
i
si
ng f
r
om a penal
offense.
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 even 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
hecompensat
i
on ofdebt
swhi
ch ar
e
notye
tdue.
Tol
ent
i
no: Vol
unt
ar
yCompensat
i
on i
snot
l
i
mi
t
ed t
oobl
i
gat
i
onsw/car
enotye
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
esent
.xx
d. Judi
c
i
al Compensat
i
on when
decr
eedbyt
hecour
ti
n acasewher
et
her
e
i
sacount
er
cl
ai
m,suchast
hatpr
ovi
dedi
n
Ar
t
.1283.
Ar
t
.1283.I
foneoft
hepar
t
i
est
oa
sui
t over an obl
i
gat
i
on has a cl
ai
m f
or
damagesagai
nstt
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
eof
.
EffectofAssi
gnmentofCr
edi
t
Ar
t
.1285. The debt
or who has
consent
ed t
o t
he assi
gnment of r
i
ght
s
made by a cr
edi
t
or i
n f
avor of a t
hi
r
d
per
son,cannotse
tupagai
nstt
heassi
gnee
t
hecompensat
i
on whi
ch woul
d per
t
ai
nt
o
hi
m agai
nst t
he assi
gnor
, unl
ess t
he
assi
gnorwasnot
i
fied byt
hedebt
oratt
he
t
i
mehegavehi
sconsent
,t
hather
eser
ved
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
ermayse
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
hedebt
or
,hemayse
tup
t
hecompensat
i
on ofal
lcr
edi
t
spr
i
ort
ot
he
same and al
so l
at
er ones unt
i
lhe had
knowl
edgeoft
heassi
gnment
.
Bal
ane: Ther
ear
e3 si
t
uat
i
onscover
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
eser
ved.
2. Assi
gnmentw/t
hedebt
or
'
sknowl
edge
butw/ohi
sc
onsent
.
- Thedebt
orcan se
t
up compensat
i
on w/ a cr
edi
t al
r
eady
exi
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
t exi
st
i
ng at t
he
t
i
meheacqui
r
edknowl
edgeeveni
fi
tar
ose
af
t
ert
heact
ualassi
gnment
.
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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
ven t
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
er compensat
i
on had t
aken pl
ace by
oper
at
i
on of l
aw bec. t
he offse
t
t
i
ng
i
nst
r
ument
shadbot
hr
eachedmat
ur
i
t
y
.I
t
i
safir
ml
yse
t
t
l
ed doct
r
i
net
hatt
her
i
ght
s
ofanassi
gneear
enotanygr
eat
ert
hant
he
r
i
ght
soft
heassi
gnor
,si
ncet
heassi
gneei
s
mer
el
y subst
i
t
ut
ed i
n t
he pl
ace of t
he
assi
ngor and t
hat t
he assi
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
nst t
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
stput
t
onot
i
ceoft
heassi
ngmenti
n pe
t
i
t
i
oner
'
s
f
avoron 7/14/81,DMC PN NO.2731 had
al
r
eadybeen di
schar
ged bycompensat
i
on.
Si
nce t
he assi
gnor Phi
l
finance coul
d not
have t
hen compel
l
ed payment anew by
Del
t
a ofDMC PN No.2731,pe
t
i
t
i
oner
,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
esci
ssi
bl
e or voi
dabl
e,t
hey may be
compensat
ed agai
nst each ot
her bef
or
e
t
heyar
ej
udi
ci
al
l
yr
ecsi
ndedoravoi
ded.
subst
i
t
ut
i
ngt
heper
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.
)
Novat
i
oni
st
hemostunusualmode
ofext
i
ngui
shi
ng an obl
i
gat
i
on. I
ti
st
he
onl
y mode wher
eby an obl
i
gat
i
on i
s
ext
i
ngui
shed and a new obl
i
gat
i
on i
s
cr
eat
edt
ot
akei
t
spl
ace. Theot
hermodes
ofext
i
ngui
shi
nganobl
i
gat
i
on ar
eabsol
ut
e
i
nt
he sense t
hatt
he ext
i
ngui
shmentof
t
heobl
i
gat
i
on i
st
ot
al(
w/ t
heexcept
i
on of
compr
omi
se.
) Novat
i
on, on t
he ot
her
hand,i
sa r
el
at
i
ve mode ofext
i
ngui
shi
ng
anobl
i
gat
i
on.
Cl
assi
ficat
i
onofNovat
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
change of cr
edi
t
or
; al
so known as
subr
ogat
i
on.
b. Passi
ve subj
ec
t
i
ve or a
changeofdebt
or
2. Obj
ec
t
i
ve (
Real
)ornovat
i
on by
change i
nt
he obj
ector i
nt
he pr
i
nci
pal
condi
t
i
ons. Novat
i
on by a change i
nt
he
pr
i
nci
pal condi
t
i
ons i
s t
he most
pr
obl
emat
i
cki
ndofnovat
i
on bec.you have
t
ode
t
er
mi
newhe
t
herornott
hechangei
n
t
he condi
t
i
ons i
s pr
i
nci
pal or mer
el
y
i
nci
dent
al
. For exampl
e,a change f
r
om
st
r
ai
ghtt
er
mst
oi
nst
al
l
mentt
er
msand a
change f
r
om
noni
nt
er
est bear
i
ng
obl
i
gat
i
on t
o an i
nt
er
estbear
i
ng one ar
e
changesi
nt
hepr
i
nci
palcondi
t
i
ons.
G.Novat
i
on
Concept ofNovat
i
on.
- Novat
i
on i
st
he
ext
i
ngui
shment of an obl
i
gat
i
on by t
he
subst
i
t
ut
i
on orchangeoft
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
ect 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
ect
i
venovat
i
on.
Requi
si
t
esofNovat
i
on:
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1. Ther
e must be a pr
evi
ous val
i
d
obl
i
gat
i
on;
2.Agr
eementoft
he par
t
i
es t
o cr
eat
et
he
new obl
i
gat
i
on;
3.Ext
i
ngui
shmentoft
heol
dobl
i
gat
i
on.(
I
woul
d consi
dert
hi
san effect
,r
at
hert
han
ar
equi
si
t
eofnovat
i
on-Bal
ane)
;
4.Val
i
di
t
yoft
henew obl
i
gat
i
on.
(
Ti
uSi
ucov
.Habana,45P707.
)
Ar
t
. 1292. I
n or
der t
hat an
obl
i
gat
i
on maybeext
i
ngui
shedbyanot
her
whi
ch subst
i
t
ut
et
hesame,i
ti
si
mper
at
i
ve
t
hat i
t be so decl
ar
ed i
n unequi
vocal
t
er
ms, or t
hat t
he ol
d and t
he new
obl
i
gat
i
onsbeon ever
ypoi
nti
ncompat
i
bl
e
wi
t
heachot
her
.
BALANE CASES:
FUAV.YAP [
74P287]- Appel
l
eobt
ai
ned
i
nt
he CFI
Ml
a.a j
udgement sent
enci
ng
appel
ant
s t
o pay P1,
538.
04 w/ l
egal
i
nt
er
est and cost
s.
Subsequent
l
y
,
appel
l
ant
sexecut
ed amor
t
gagei
nf
avorof
appel
l
e, wher
ei
n i
t was st
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 inst
al
l
ment
sofP300;t
hatt
osecur
e
t
he paymentt
he sai
d P1,
200,a camar
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
ees,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
heramountofP338,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 ext
i
ngui
shed by t
he
st
at
ement evi
denced by t
he mor
t
gage
execut
ed by t
hem i
nf
avoroft
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
edl
y novat
ged by r
eason of
i
ncompat
i
bi
l
i
t
yr
esul
t
i
ngf
r
om t
hef
actt
hat
,
wher
east
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,st
i
pul
at
es f
orat
t
or
ney'
sf
ees
and i
s secur
ed by a mor
t
gage. The l
at
er
agr
eementdi
d notmer
el
yext
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 asa se
t
t
l
ementoft
he
sai
dj
udgment
. Sai
dj
udgmentcannotbe
sai
dt
o have been se
t
t
l
ed,unl
ess i
twas
ext
i
ngui
shed.
MI
LLAR V.CA [
38 S 642] - Wher
et
he
new obl
i
gat
i
on mer
el
yr
ei
t
er
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 sl
i
ght
modi
ficat
i
ons w/ r
espectt
ot
he cause or
obj
ect or condi
t
i
ons of t
he l
at
t
er
, such
changesdonoteffect
uat
eanysubst
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
changesi
nt
r
oduced byt
henew obl
i
gat
i
on
pr
oduci
ngan al
t
er
at
i
on ormodi
ficat
i
on of
t
heessenceoft
heol
d obl
i
gat
i
on r
esul
ti
n
i
mpl
i
ed novat
i
on. I
nt
hecaseatbar
,t
he
mer
er
educt
i
on oft
he amountdue i
n no
sense const
i
t
ut
es 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
ednesswast
her
esul
toft
he
par
t
i
alpayment
smadebyt
her
esp.bef
or
e
t
he execut
i
on of t
he chat
t
el mor
t
gage
agr
eement
,and(
b) t
hel
at
t
er
'
sadmi
ssi
ons
bear
i
ngt
her
eon.
SANDI
CO V. PI
GUI
NG [
42 S 322] Novat
i
on r
esul
t
si
n 2st
i
pul
at
i
ons- onet
o
ext
i
ngui
shanexi
st
i
ngobl
i
gat
i
on,t
heot
her
t
o subst
i
t
ut
e a new one i
n i
t
s pl
ace.
Fundament
ali
ti
st
hatnovat
i
on effect
sa
subst
i
t
ut
i
on or modi
ficat
i
on of an
obl
i
gat
i
on
by
anot
her
or
an
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lOMoARcPSD|22267210
ext
i
ngui
shment ofone obl
i
gat
i
on by t
he
cr
eat
i
on ofanot
her
.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
educedamountofP4,
000and
subst
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 sust
ai
n novat
i
on necessi
t
at
es t
hatt
he
same be so decl
ar
ed i
n unequi
vocal
t
er
ms- cl
ear
l
y and unmi
st
akabl
y shown
byt
heexpr
essagr
eementoft
hepar
t
i
esor
byact
sofequi
val
enti
mpor
t
- ort
hatt
her
e
i
scompl
e
t
eandsubst
ant
i
ali
ncompat
i
bi
l
i
t
y
be
t
.t
he2obl
i
gat
i
ons.
NPC V.DAYRI
T[
125S849]- Novat
i
oni
s
never pr
esumed but must be expl
i
c
i
t
l
y
st
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
eement w/c suppor
t
st
he pe
t
i
t
i
oner
'
s
cont
ent
i
on. Ther
e i
s nei
t
her expl
i
ci
t
novat
i
onnori
ncompat
i
bi
l
i
t
yonever
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
ext
i
ngui
shment of an obl
i
gat
i
on by t
he
subst
i
t
ut
i
on orchangeoft
heobl
i
gat
i
on by
asubsequentonew/ct
er
mi
nat
esi
t
,ei
t
her
by changi
ng i
t
s obj
ect or pr
i
nci
pal
condi
t
i
ons,orbysubst
i
t
ut
i
nganew debt
or
i
npl
aceoft
heol
done,orbysubr
ogat
i
nga
t
hi
r
d per
son t
ot
he r
i
ght
s oft
he cr
edi
t
or
.
Novat
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
ed t
o as obj
ec
t
i
ve (
or
r
eal
)novat
i
on. Novat
i
on byt
hechangeof
ei
t
hert
he per
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
ve (
mi
xed)at
t
he same t
i
me. I
n bot
h obj
ect
i
ve and
subj
ect
i
ve novat
i
on, a dual pur
pose i
s
achi
eved- an obl
i
gat
i
on i
s ext
i
ngui
shed
andanew onei
scr
eat
edi
nl
i
eut
her
eof
.
Novat
i
on i
s never pr
esumed.
- I
f
obj
ect
i
ve novat
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
expr
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 new
obl
i
gat
i
on beon ever
y poi
nti
ncompat
i
bl
e
w/ t
he ol
d one. Novat
i
on i
s never
pr
esumed;i
tmustbeest
abl
i
shedei
t
herby
t
he di
schar
ge of t
he ol
d debt by t
he
expr
esst
er
msoft
henew 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
heemer
genceoft
henew
onemustbecl
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
he t
hi
r
d per
son who
assumed t
he obl
i
gat
i
on bec
omes a c
odebt
ororsur
et
yorac
osur
et
y.
- Agai
n,i
f
subj
ect
i
ve novat
i
on by a change 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
nalcont
r
acti
sext
ended
t
oat
hi
r
d per
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 per
son ornew debt
ort
ake
t
hepl
acei
nt
henew r
el
at
i
on. I
Ft
heol
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
el
ya
codebt
ororsur
e
t
yoracosur
e
t
y
.
Novat
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
ngoft
heol
d obl
i
gat
i
on.
Nei
t
her can t
he pe
t
i
t
i
oner
s anchor t
hei
r
def
ense on i
mpl
i
ed novat
i
on. Absentan
unequi
vocaldecl
ar
at
i
on ofext
i
ngui
shment
ofa pr
eexi
st
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
cat
i
on. Butwher
e,as i
nt
hi
s case,
t
hepar
t
i
est
ot
henew obl
i
gat
i
on expr
essl
y
r
ecogni
z
et
he cont
i
nui
ng exi
st
ence and
val
i
di
t
y oft
he ol
d one,wher
e,i
n ot
her
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lOMoARcPSD|22267210
wor
ds,t
he par
t
i
es expr
essl
y negat
ed t
he
l
apsi
ngoft
heol
d obl
i
gat
i
on,t
her
ecan be
no novat
i
on. The i
ssue of i
mpl
i
ed n
ovat
i
oni
snotr
eachedatal
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
nst
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
ed and amended
byt
hesubsequentmut
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
edamounton
an i
nst
al
l
mentbasi
s and t
hey wer
egi
ven
bypr
vt
.r
espsnol
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
ace 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
ed 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
hepe
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
esentevi
dences orpr
oof
s
ofpayment 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
akes pl
ace
when t
he obj
ectorpr
i
nci
palcondi
t
i
on of
an obl
i
gat
i
on i
schanged oral
t
er
ed. I
ti
s
el
ement
ar
y t
hat novat
i
on i
s never
pr
esumed;i
tmustbe expl
i
ci
t
l
ys
t
at
ed or
t
her
emustbemani
f
esti
ncompat
i
bi
l
i
t
ybe
t
.
t
he ol
d and t
he new obl
i
gat
i
ons i
n ever
y
aspect
.
Absenc
e ofexi
st
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
d and 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
exi
st
ence of an expl
i
ci
t novat
i
on nor
i
ncompat
i
bi
l
i
t
yon ever
ypoi
ntbe
t
.t
heol
d
and t
he new agr
eement
s as t
he second
cont
r
actevi
dent
l
yi
ndi
cat
est
hatt
hesame
wasexecut
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.
Novat
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
ext
i
ngui
shment of an obl
i
gat
i
on by t
he
subst
i
t
ut
i
on of t
hat obl
i
gat
i
on w/ a
subsequentone,w/ct
er
mi
nat
esi
t
,ei
t
her
by changi
ng i
t
s obj
ect or pr
i
nci
pal
condi
t
i
onsorbysubst
i
t
ut
i
nganew debt
or
i
npl
aceoft
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
y dec
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
hei
r obj
ect or
pr
i
nci
palcondi
t
i
ons;
(
2)Subst
i
t
ut
i
ng t
he per
son 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:
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lOMoARcPSD|22267210
LAND BANK V.CA [
181S610]- Noneof
t
he r
equi
r
ement
s ofnovat
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
nst
antc
ase.
- Fi
nal
l
y
,i
ti
s
not easy t
o under
st
and t
he t
hr
ust of
r
espondent
'
s ar
gumentt
hatnovat
i
on had
t
akenpl
acei
nr
espectoft
hei
rbondswhen
t
heyhad t
hei
rr
egi
st
er
ed bondsconver
t
ed
i
nt
obear
erbonds. I
fr
espondent
smeant
o
suggestt
hatt
hepr
i
nt
ed t
er
ms oft
henew
bear
er bonds wer
e somehow novat
ed by
t
henot
at
i
on t
heyhad i
nser
t
ed i
nt
heLBP
For
ms64soast
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
erofsuch bonds (
as r
equi
r
ed by t
he
t
er
ms t
her
eof
) but r
at
her t
o t
he
r
espondent
s, such suggest
i
on must be
fir
ml
yr
ej
ect
ed. Noneoft
her
equi
r
ement
s
ofnovat
i
on ei
t
heroft
hesubj
ectmat
t
erof
t
he bond agr
eement 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
hei
nst
antcase.
Ofequali
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
ed i
n t
he new bear
er bond
cer
t
i
ficat
es. The mi
schi
efi
mpl
i
ci
ti
nt
he
(
assumed)suggest
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
edi
t
or i
s
ei
t
herl
egalorconvent
i
onal
.Thef
or
meri
s
notpr
esumed,excepti
n cases expr
essl
y
ment
i
onedi
nt
hi
sCode;t
hel
at
t
ermustbe
cl
ear
l
yest
abl
i
shed i
n oror
dert
hati
tmay
t
akeeffect
.
(
i
) Legal(
Ar
t
.1302)
-I
nal
l
cases of Ar
t
. 1302, subr
ogat
i
on
t
akespl
acebyoper
at
i
onofl
aw.
Ar
t
. 1302. I
ti
s pr
esumed t
hat
t
her
ei
sl
egalsubr
ogat
i
on:
(
1)When a cr
edi
t
or pays anot
her
cr
edi
t
orwhoi
spr
ef
er
r
ed,even wi
t
houtt
he
debt
or
'
sknowl
edge;
(
2) When a t
hi
r
d per
son, not
i
nt
er
est
ed i
nt
heobl
i
gat
i
on,payswi
t
ht
he
expr
essort
aci
tappr
ovaloft
hedebt
or
;
(
3) When, even wi
t
hout t
he
knowl
edge of t
he debt
or
, a per
son
i
nt
er
est
ed i
nt
hef
ul
fil
l
mentoft
heobl
i
gat
i
on pays,wi
t
houtpr
ej
udi
cet
ot
heeffect
s
ofconf
usi
onast
ot
hel
at
t
er
'
sshar
e;
(
i
i
)
Convent
i
onal
/
Cont
r
act
ual(
Ar
t
.1301)
- Consent
oft
he3par
t
i
es(
ol
dcr
edi
t
or
,debt
or
andnew cr
edi
t
or
)ar
er
equi
r
ed.
Ar
t
. 1301.
Convent
i
onal
subr
ogat
i
on ofat
hi
r
d per
son r
equi
r
est
he
consentoft
heor
i
gi
nalpar
t
i
esand oft
he
t
hi
r
dper
son.
Q: I
si
tpossi
bl
ef
ora cr
edi
t
ort
o
t
r
ansf
er hi
s cr
edi
t w/o consent of t
he
debt
or
?
A:Yes.Butt
hi
si
snotnovat
i
onbu
anassi
gnmentofr
i
ght
sunderAr
t
.1624.
Assi
gnmenti
sal
so a novat
i
on but
muchsi
mpl
er
.Buti
snotsubr
ogat
i
on.
(
1)Ki
nds
(
a)Legal
Ar
t
. 1302. I
ti
s pr
esumed t
hat
t
her
ei
sl
egalsubr
ogat
i
on:
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(
1)When a cr
edi
t
or pays anot
her
cr
edi
t
orwhoi
spr
ef
er
r
ed,even wi
t
houtt
he
debt
or
'
sknowl
edge;
(
2) When a t
hi
r
d per
son, not
i
nt
er
est
ed i
nt
heobl
i
gat
i
on,payswi
t
ht
he
expr
essort
aci
tappr
ovaloft
hedebt
or
;
(
3) When, even wi
t
hout t
he
knowl
edge of t
he debt
or
, a per
son
i
nt
er
est
ed i
nt
hef
ul
fil
l
mentoft
heobl
i
gat
i
on pays,wi
t
houtpr
ej
udi
cet
ot
heeffect
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
suedt
hepr
oper
t
yi
npossessi
on
oft
he debt
ort
o sat
i
sf
yt
hei
rcl
ai
ms,may
exer
ci
se al
lt
he r
i
ght
s and br
i
ng al
lt
he
act
i
onsoft
hel
at
t
erf
ort
hesamepur
pose,
save t
hose whi
ch ar
ei
nher
ent i
n hi
s
per
son;t
hey may al
so i
mpugn t
he act
s
whi
cht
hedebt
ormayhavedonet
odef
r
aud
t
hem.
(
Convent
i
onalRedempt
i
on)
Ar
t
. 1610. The cr
edi
t
or
s of t
he
vendor cannot make use oft
he r
i
ghtof
r
edempt
i
on agai
nstt
hevendee,unt
i
laf
t
er
t
hey have exhaust
ed t
he pr
oper
t
y oft
he
vendor
.
Ar
t
.1629. I
n caset
heassi
gnori
n
good f
ai
t
h shoul
d have made hi
msel
f
r
esponsi
bl
ef
ort
hesol
vencyoft
hedebt
or
,
and t
he cont
r
act
i
ng par
t
i
es shoul
d not
have agr
eed upon t
he dur
at
i
on of t
he
l
i
abi
l
i
t
y
,i
tshal
ll
astf
oroneyearonl
y
,f
r
om
t
he t
i
me oft
he assi
gnmenti
ft
he per
i
od
hadal
r
eadyexpi
r
ed.
I
ft
he cr
edi
t shoul
d be payabl
e
wi
t
hi
n at
er
m orper
i
od whi
ch hasnotye
t
expi
r
ed,t
he l
i
abi
l
i
t
y shal
lcease one year
af
t
ert
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
each ofcont
r
actcompl
ai
ned of
,t
he
i
nsur
ancecompanyshal
lbesubr
ogat
edt
o
t
he r
i
ght
s of t
he i
nsur
ed agai
nst t
he
wr
ongdoerort
heper
son whohasvi
ol
at
ed
t
he cont
r
act
.I
ft
he amountpai
d by t
he
i
nsur
ance company does not f
ul
l
y cover
t
he i
nj
ur
y or l
oss, t
he aggr
i
eved par
t
y
shal
lbe ent
i
t
l
ed t
or
ecovert
he defici
ency
f
r
om t
heper
soncausi
ngt
hel
ossori
nj
ur
y
.
(
2)Effect
Ar
t
.1729. Those who put t
hei
r
l
aborupon orf
ur
ni
sh mat
er
i
al
sf
orapi
ece
ofwor
kunder
t
aken 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.
However
,t
hef
ol
l
owi
ng shal
lnotpr
ej
udi
ce
t
hel
abor
er
s,empl
oyeesand f
ur
ni
sher
sof
mat
er
i
al
s:
(
1)Payment
smadebyt
heownert
o
t
hecont
r
act
orbef
or
et
heyar
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.
Ar
t
. 1304. A cr
edi
t
or
,t
o whom
par
t
i
al payment has been made, may
exer
ci
sehi
sr
i
ghtf
ort
her
emai
nder
,andhe
shal
lbe pr
ef
er
r
ed t
ot
he per
son who has
been subr
ogat
ed i
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
ont
r
ansf
er
st
o
t
he per
son subr
ogat
ed t
he cr
edi
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 debt
or or agai
nst t
hi
r
d
per
sons,bet
heyguar
ant
or
sorpossessor
s
ofmor
t
gages,subj
ectt
o st
i
pul
at
i
on i
na
convent
i
onalsubr
ogat
i
on.
(
Assi
gnmentofCr
edi
t
sandOt
her
I
ncor
por
ealRi
ght
s)
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b. Passi
ve Subj
ect
i
ve Novat
i
on
(
Subst
i
t
ut
i
onoft
hedebt
or
)
Ar
t
.1293.Novat
i
onwhi
ch consi
st
s
i
nsubst
i
t
ut
i
nganew debt
ori
nt
hepl
aceof
t
he or
i
gi
nal one, may be made even
wi
t
houtt
heknowl
edgeoragai
nstt
hewi
l
l
oft
hel
at
t
er
,butnotwi
t
houtt
heconsent
oft
hecr
edi
t
or
.Paymentbyt
henew debt
or
gi
veshi
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
her
ei
sa
st
i
pul
at
i
ont
ot
hecont
r
ar
y
.
Whoever pays f
or
anot
her may demand f
r
om
t
he debt
or what he has
pai
d,exceptt
hati
fhe pai
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
hepaymenthas
been benefici
al t
o t
he
debt
or
.
Ar
t
.1237. Whoever
payson behal
foft
hedebt
or
wi
t
hout t
he knowl
edge or
agai
nstt
hewi
l
loft
hel
at
t
er
,
cannotcompelt
he cr
edi
t
or
t
o subr
ogat
e hi
m i
n hi
s
r
i
ght
s, such 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
hepr
i
nci
paldebt
or
when t
he debt mat
ur
ed. Not
hi
ng el
se.
Cer
t
ai
nl
y
,t
he buyer di
d not obl
i
gat
ed
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
gat
i
on t
o di
schar
ge t
he
mor
t
gagei
ndebt
ednesst
her
ef
or
e,r
emai
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 her
ei
n,si
nce
t
he r
ecor
di
s devoi
d ofany evi
dence of
cont
r
ar
yi
nt
ent
.xxx
Ar
t
.1835.xxx
A par
t
ner
shi
pi
s di
schar
ged f
r
om
any exi
st
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
son or par
t
ner
shi
p
cont
i
nui
ng t
he busi
ness; and such
agr
eementmaybei
nf
er
r
edf
r
om t
hecour
se
of deal
i
ng be
t
ween t
he cr
edi
t
or havi
ng
knowl
edge of t
he di
ssol
ut
i
on and t
he
per
son or par
t
ner
shi
p cont
i
nui
ng t
he
busi
ness.
Effectofi
nsol
vencyofnew debt
or
Ar
t
.1294. I
ft
he subst
i
t
ut
i
on i
s
wi
t
houtt
heknowl
edgeoragai
nstt
hewi
l
l
oft
hedebt
or
,t
henew debt
or
'
si
nsol
vency
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 cover
ed by TCT No.
48979 w/ not
i
ce t
hati
twas mor
t
gaged,
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
evi
vet
heact
i
on oft
he
l
at
t
er agai
nstt
he or
i
gi
nalobl
i
gor
,except
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when sai
di
nsol
vencywasal
r
eadyexi
st
i
ng
and ofpubl
i
cknowl
edge,orknown t
ot
he
debt
or
,whenhedel
egat
edhi
sdebt
.
Bal
ane: Passi
ve 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
ve. I
tcoul
d
beupon t
hei
ni
t
i
at
i
veoft
hecr
edi
t
ororof
t
henew debt
or
.
)
Ar
t
. 1295 t
al
ks of del
egac
i
on
(
changeatt
heol
ddebt
or
'
si
ni
t
i
at
i
ve.
)
I
n expr
omi
ssi
on,t
hechangei
nt
he
per
son of t
he debt
or i
s not upon t
he
i
ni
t
i
at
i
veoft
heol
d debt
or
,whe
t
herornot
he gave hi
s consent
. As soon as a new
debt
orand cr
edi
t
oragr
ee,novat
i
on t
akes
pl
ace.
I
n bot
h cases, t
he i
nt
ent of t
he
par
t
i
esmustbet
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
her
el
easeoft
he
ol
d debt
ori
sabsol
ut
e(
even i
fi
tt
ur
nsout
t
hatt
henew debt
ori
si
nsol
vent
.
)
I
n del
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 new debt
orwas al
r
eady
i
nsol
ventatt
het
i
meoft
hedel
egac
i
on;and
(
2) such i
nsol
vency wasei
t
herknown t
o
t
heol
ddebt
ororofpubl
i
cknowl
edge.
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
hey may benefit
t
hi
r
d per
sons who di
d not gi
ve t
hei
r
consent
,e.
g.
,st
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
vesubj
ect
i
ve
novat
i
on, t
he guar
ant
or
s, pl
edgor
s,
mor
t
gagor
sar
enotr
el
eased.
Look at Ar
t
. 1303, accessor
y
obl
i
gat
i
onsar
enotext
i
ngui
shed. Sot
her
e
i
s a confli
ct
. How do you r
esol
ve?
Accor
di
ng t
o comment
at
or
s,Ar
t
.1303 i
s
anexcept
i
ont
oAr
t
.1296.
Ar
t
.1297. I
ft
henew obl
i
gat
i
on i
s
voi
d,t
heor
i
gi
naloneshal
lsubsi
st
,unl
ess
t
he par
t
i
es i
nt
ended t
hat t
he f
or
mer
r
el
at
i
on shoul
d be ext
i
ngui
shed i
n any
event
.
Ar
t
.1298. Thenovat
i
on i
svoi
di
f
t
he or
i
gi
nal obl
i
gat
i
on was voi
d, except
when annul
mentmaybecl
ai
med onl
y by
t
he debt
or
,or when r
at
i
ficat
i
on val
i
dat
es
act
swhi
char
evoi
dabl
e.
Ar
t
.1299.I
ft
heor
i
gi
nalobl
i
gat
i
on
wassubj
ectt
oasuspensi
veorr
esol
ut
or
y
condi
t
i
on, t
he new obl
i
gat
i
on shal
l be
under t
he same condi
t
i
on, unl
ess i
ti
s
ot
her
wi
sest
i
pul
at
ed.
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
nci
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
hey may benefit
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