Información Comisión de

No compromise upon the following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a legal separation;

(3) Any ground for legal separation;

(4) Future support;

(5) The jurisdiction of courts;

(6) Future legitime ⁹¹⁵ III. Effect

The effect and authority of res judicata; but there shall be no execution except in compliance with a judicial compromise.⁹¹⁶

If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand.⁹¹⁷

913 Agent may withdraw by giving notice to the principal, but must indemnify the principal for damages that he may suffer by reason of such withdrawal.

914Art. 2028

915 Art. 2035

916 Art. 2037

917 Art. 2041

168 CREDIT TRANSACTIONS

I. Loan

By the contract of loan, one of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time and return it, in which case the contract is called a commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid, in which case the contract is simply called a loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay interest.

In commodatum the bailor retains the ownership of the thing loaned, while in simple loan, ownership passes to the borrower.⁹¹⁸

An accepted promise to deliver something by way ofcommodatum or simple loan is binding upon parties, but the commodatumor simple loan itself shall not be perfected until the

delivery of the object of the contract.⁹¹⁹

II. Deposit

A contract constituted from the moment a person receives a thing belonging to another, with the obligation of safely keeping it and of returning the same.

Voluntary deposit Necessary deposit Judicial deposit⁹²⁰ with a legal obligation, or on the occasion of any calamity, or by travellers in hotels and inns,⁹²² or by travellers with common

169 III. Guaranty and Suretyship

By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so.

If a person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be observed. In such case the contract is called a suretyship.⁹²⁴

A guaranty is gratuitous, unless there is a stipulation to the contrary.⁹²⁵

A married woman may guarantee an obligation without the husband's consent, but shall not thereby bind the conjugal partnership, except in cases provided by law.⁹²⁶

If a guaranty is entered into without the knowledge or consent, or against the will of the principal debtor, the provisions of Articles 1236 and 1237 shall apply.⁹²⁷

A guaranty may be conventional, legal or judicial, gratuitous, or by onerous title.

It may also be constituted, not only in favor of the principal debtor, but also in favor of the other guarantor, with the latter's consent, or without his knowledge, or even over his objection.⁹²⁸

A guaranty cannot exist without a valid obligation.

Nevertheless, a guaranty may be constituted to guarantee the performance of a voidable or an unenforceable contract. It may also guarantee a natural obligation.⁹²⁹

A guaranty may also be given as security for future debts, the amount of which is not yet known; there can be no claim against the guarantor until the debt is liquidated. A conditional obligation may also be secured.⁹³⁰

A guarantor may bind himself for less, but not for more than the principal debtor, both as regards the amount and the onerous nature of the conditions.

Should he have bound himself for more, his obligations shall be reduced to the limits of that of the debtor.⁹³¹

924 Art. 2047

925 Art. 2048

926 Art. 2049

927 Art. 2050

928 Art. 2051

929 Art. 2052

930 Art. 2053

931 Art. 2054

170

A guaranty is not presumed; it must be express and cannot extend to more than what is stipulated therein.

If it be simple or indefinite, it shall compromise not only the principal obligation, but also all its accessories, including the judicial costs, provided with respect to the latter, that the guarantor shall only be liable for those costs incurred after he has been judicially required to pay.⁹³²

One who is obliged to furnish a guarantor shall present a person who possesses integrity, capacity to bind himself, and sufficient property to answer for the obligation which he guarantees. The guarantor shall be subject to the jurisdiction of the court of the place where this obligation is to be complied with.⁹³³

If the guarantor should be convicted in first instance of a crime involving dishonesty or should become insolvent, the creditor may demand another who has all the qualifications required in the preceding article. The case is excepted where the creditor has required and stipulated that a specified person should be the guarantor.⁹³⁴

When there are two or more guarantors of the same debtor and for the same debt, the one among them who has paid may demand of each of the others the share which is proportionally owing from him.

If any of the guarantors should be insolvent, his share shall be borne by the others, including the payer, in the same proportion. The provisions shall not be applicable, unless the payment has been made by virtue of a judicial demand or unless the principal debtor is insolvent.⁹³⁵

The co-guarantors may set up against the one who paid, the same defenses which would have pertained to the principal debtor against the creditor, and which are not purely personal to the debtor.⁹³⁶

A sub-guarantor, in case of the insolvency of the guarantor for whom he bound himself, is responsible to the co-guarantors in the same terms as the guarantor.⁹³⁷

Extinguishment of guaranty:

1. Release in favor of one of the guarantors, without the consent of the others, benefits all to the extent of the share of the guarantor to whom it has been granted;⁹³⁸

932 Art. 2055

933 Art. 2056

934 Art. 2057

935 Art. 2073

936 Art. 2074

937 Art. 2075

938 Art. 2078

171

2. If the creditor voluntarily accepts immovable or other properties in payment of the debt, even if he should afterwards lose the same through eviction or conveyance of property;⁹³⁹

3. Whenever by some act of the creditor, the guarantors even though they are solidarily liable cannot be subrogated to the rights, mortgages and preferences of the former;⁹⁴⁰

4. For the same causes as all other obligations;⁹⁴¹ 5. When the principal obligation is extinguished;

6. Extension granted to the debtor by the creditor without the consent of the guarantor.⁹⁴²

IV. Pledge

A contract wherein the debtor delivers to the creditor or to a third person a movable or document evidencing incorporeal rights for the purpose of securing fulfillment of a principal obligation with the understanding that when the obligation is fulfilled, the thing delivered shall be returned with all its fruits and accessions.