LIABILITY FOR DAMAGES

Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor thereof, are liable for damages.

NOVATION

Art. 1292. In order that an obligation may be extinguished by another which substitute the same, it is
imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on
every point incompatible with each other.

PRESCRIPTION OF ACTIONS

Art. 1140. Actions to recover movables shall prescribe eight years from the time the possession thereof
is lost, unless the possessor has acquired the ownership by prescription for a less period, according to
Articles 1132, and without prejudice to the provisions of Articles 559, 1505, and 1133. (1962a)

Art. 1141. Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition of ownership and other real
rights by prescription. (1963)

Art. 1142. A mortgage action prescribes after ten years. (1964a)

Art. 1143. The following rights, among others specified elsewhere in this Code, are not extinguished by
prescription:

(1) To demand a right of way, regulated in Article 649;

(2) To bring an action to abate a public or private nuisance. (n)

Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:
(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (n)

Art. 1145. The following actions must be commenced within six years:
(1) Upon an oral contract;

(2) Upon a quasi-contract. (n)

Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity, or conduct of any public officer involving
the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial
of the plaintiff, the same must be brought within one (1) year. (As amended by PD No. 1755, Dec. 24,
1980.)
Art. 1147. The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation. (n)

Art. 1148. The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147 are without
prejudice to those specified in other parts of this Code, in the Code of Commerce, and in special laws. (n)
Art. 1149. All other actions whose periods are not fixed in this Code or in other laws must be brought
within five years from the time the right of action accrues.

MACEDA LAW AND RECTO LAW

The Maceda Law (R.A. 655) is applicable to sales of immovable property on installments. The most
important features are (Rillo vs. CA, 247 SCRA 461):

1. After having paid installments for at least two years, the buyer is entitled to a mandatory
grace period of one month for every year of installment payments made, to pay the unpaid
installments without interest.

If the contract is cancelled, the seller shall refund to the buyer the cash surrender value
equivalent to 50% of the total payments made, and after five years of installments, an additional
5% every year but not to exceed 90% of the total payments made.
2. In case the installments paid were less than 2 years, the seller shall give the buyer a grace
period of not less than 60 days. If the buyer fails to pay the installments due at the
expiration of the grace period, the seller may cancel the contract after 30 days from
receipt by the buyer of the notice of cancellation or demand for rescission by notarial act.
The Recto Law (Art, 1484) refers to sale of movables payable in installments and limiting
the right of seller, in case of default by the buyer, to one of three remedies:
(a) exact fulfillment;
(b) cancel the sale if two or more installments have not been paid;
(c) foreclose the chattel mortgage on the things sold also in case of default of two or
more installments, with no further action against the purchaser.

PAYMENT
Article 1592. In the sale of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the rescission of the contract shall of right take place,
the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the
contract has been made upon him either judicially or by a notarial act. After the demand, the court may
not grant him a new term. (1504a)
LEASE AND SUBLEASE
Article 1649. The lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary.
Article 1650. When in the contract of lease of things there is no express prohibition, the lessee may
sublet the thing leased, in whole or in part, without prejudice to his responsibility for the performance of
the contract toward the lessor.