CONTENTS

Volume V

Title XI. LOAN

........................................................................................

874

(1) Introductory Comment, 874; (2) Scope of Credit Transactions, 874.

.......................................................................
GENERAL PROVISIONS
ARTICLE 1933 .................................................................................

874
874

COMMENT: (1) The Two Kinds of Loans, 875; (2) Loans Under
the Old Law, 875; (3) Distinctions Between Mutuum and Commodatum, 876; (4) Consumable and Non- consumable Distinguished, 876; (5) Fungible and Non-Fungible Distinguished,
876; (6) Meaning of Bailment, 877; (7) Parties in a Bailment,
877; (8) Consideration or Cause in a Bailment of Loan, 877; (9)
Definition of Credit as Applied to LOANS, 877; (10) Loan
Distinguished from Rent or Lease (Tolentino v. Gonzales, 50
Phil. 558), 878; In Re Guardianship of Tamboco, et al., 36 Phil.
939, 878; Government v. Phil. Sugar Estate Dev. Co., 38 Phil.
15, 878; (11) Loan Distinguished from Discounting of a Paper,
879; Herrera v. Petrophil Corp., GR 48349, Dec. 29, 1986, 879;
(12) Loan Distinguished from Deposit, 879; (13) Loan Distinguished from Irregular Deposit, 880; (14) Loan Distinguished
from Sale, 881; (15) Form of Interest, 881; Herrera v. Petrophil
Corp., GR 48349, Dec. 29, 1986, 881; (16) Escalation Clause,
881; Insular Bank of Asia and America v. Salazar, GR 82082,
Mar. 25, 1988, 881; Almeda v. CA, 70 SCAD 248, 256 SCRA
292 (1996), 882.
ARTICLE 1934 ..................................................................................
COMMENT: (1) Nature of the Contract of Loan, 882; (2) Need
for Delivery, 882; (3) Consent of the Parties, 882; (4) Consensual
Contract of Future Loans, 883.

lxii

882

CHAPTER 1 COMMODATUM ..........................................................

884

Section 1 NATURE OF COMMODATUM ......................................

884

ARTICLE 1935 ..................................................................................

884

COMMENT: (1) Commodatum Defined, 884; (2) Features or

Characteristics of Commodatum as a Contract, 884; (3) What
Bailee (Borrower) in Commodatum Acquires, 885; (4) Spanish
Terms, 885.
ARTICLE 1936 ..................................................................................

885

COMMENT: (1) Subject Matter of Commodatum, 885; (2)

Counterpart in the Contract of Lease, 885.
ARTICLE 1937 ..................................................................................

885

COMMENT: (1) Properties That May Be the Object of Commodatum, 886; (2) Example of Commodatum Involving Land,
886.
ARTICLE 1938 ..................................................................................

886

COMMENT: Bailor (Lender) Need Not Be the Owner, 886;

Mercado and Ebora v. Aguilar, (C.A.) 45 O.G. 5th S. 118, Jun.
30, 1947, 887.
ARTICLE 1939 ..................................................................................
COMMENT: (1) Personal Nature of Commodatum, 887; (2)
Example of the First Paragraph, 888; (3) Example of the Second
Paragraph, 888.

lxiii

887

ARTICLE 1940 ..................................................................................

888

COMMENT: (1) Does Bailee Have Right to Use the Fruits?

888; (2) Example, 888.
Section 2 OBLIGATIONS OF THE BAILEE .................................

889

ARTICLE 1941 ..................................................................................

889

COMMENT: (1) Duty of Borrower to Pay Ordinary Expenses,

889; (2) Examples, 889.
ARTICLE 1942 ..................................................................................

889

COMMENT: (1) Liability for Loss Due to a Fortuitous Event,

890; (2) Reason for the Law, 890; (3) Misuse or Abuse, 891.
ARTICLE 1943 ..................................................................................

891

COMMENT: Non-liability for Deterioration Without Fault,

891.
ARTICLE 1944 ..................................................................................

891

COMMENT: (1) Generally, Borrower Cannot Retain, 891; (2)

Reason for the Law, 891.
ARTICLE 1945 ..................................................................................

891

COMMENT: Solidary Liability of Bailees, 892.

Section 3 OBLIGATIONS OF THE BAILOR ................................

892

ARTICLE 1946 ..................................................................................

892

COMMENT: (1) Generally, Bailor Cannot Demand Immediate

Return, 892; (2) Reason for Second Sentence, First Paragraph
(Urgent Necessity), 892; (3) Suspension of the Contract, 893.
ARTICLE 1947 ..................................................................................

893

COMMENT: Precarium, 893.

ARTICLE 1948 ..................................................................................

893

COMMENT: (1) Effect of Commission of Act of Ingratitude,

893; (2) Grounds of Ingratitude, 893.
ARTICLE 1949 ..................................................................................

894

COMMENT: (1) Extraordinary Expenses, 894; (2) Reason for

the Second Paragraph (Actual Use by Bailee), 894; (3) Example, 895.
ARTICLE 1950 ..................................................................................

895

COMMENT: Other Expenses, 895.

ARTICLE 1951 ..................................................................................
COMMENT: (1) When Bailor Knows Flaws, 895; (2) Reason
for the Law, 895; (3) Right of Retention, 896; (4) Nature of the
Flaws, 896.

lxiv

895

ARTICLE 1952 ..................................................................................

896

COMMENT: (1) Effect of Bailors Abandonment or Giving of

the Object, 896; (2) Reason for the Law, 896.
CHAPTER 2 SIMPLE LOAN OR MUTUUM .................................

897

ARTICLE 1953 ..................................................................................

897

COMMENT: (1) Ownership Passes in Mutuum, 897; Republic

v. Jose Grijaldo, L-20240, Dec. 31, 1965, 897; Carlos Gelano,
et al. v. Court of Appeals and Insular Sawmill, Inc., L-39060,
Feb. 24, 1981, 897; Bonnevie v. Court of Appeals, GR 49101,
Oct. 24, 1983, 898; (2) Similarity to Abnormal Usufruct, 898;
(3) Bank Accounts, 898; (4) Effect of Mutual Error, 898; Rural
Bank of Caloocan v. Court of Appeals, L- 32116, Apr. 21, 1981,
898; (5) Behest Loans, 899; Presidential Ad-Hoc Fact-Finding Committee on Behest Loans v. Hon. Aniano A. Desierto
(Recovery of Ill-Gotten Wealth), GR 130340, 114 SCRA 707,
Oct. 25, 1999, 899.
ARTICLE 1954 ..................................................................................

899

COMMENT: (1) Barter of Non-Consumable Things, 899; (2)

Example, 899.
ARTICLE 1955 ..................................................................................

900

COMMENT: (1) Liability of Borrower of Money, 900; (2)

Example of Second Paragraph (Loan of Things Other Than
Money), 900.
ARTICLE 1956 ..................................................................................

901

COMMENT: (1) Formality for Interest (for Use of the Money),

901; (2) Example, 901; (3) Kinds of Interest, 901; (4) How Interest Arises, 901; (5) When Interest Earns Interest, 901; (6)
Interest by Way of Damages, 902; (7) Consolidation, 903; (8)
Municipal Corporations Are Liable for Interest, 903; (9) Interest During the Moratorium Laws, 903; (10) Computations for
Compensatory Damages, 904; (11) Some Cases, 906; Nakpil
and Sons, et al. v. CA, GR 47861, Resolution on Motion for
Reconsideration, 906; Monzon, et al. v. IAC and Theo H. Davies
& Co., Far East Ltd., GR 72828, Jan. 31, 1989, 907; Anotnio
Tan v. CA & Cultural Center of the Phils., GR 116285, Oct.
19, 2001, 907.
ARTICLE 1957 ..................................................................................
COMMENT: (1) Usury Law Should Not Be Circumvented, 907;
(2) What Constitutes Usury, 908; Herrera v. Petrophil Corp.,
GR 48349, Dec. 29, 1986, 908; (3) Repeal of Usury Law, 908;
Liam Law v. Olympic Sawmill Co. and. Elino Lee Chi, L-30771,
May 28, 1984, 908.

lxv

907

ARTICLE 1958 ..................................................................................

908

COMMENT: Determination of Interest if in Kind, 909.

ARTICLE 1959 ..................................................................................

909

COMMENT: (1) When Accrued Interest Earns Interest, 909;

(2) Compound Interest, 909; (3) Usury Law Not Violated, 909;
(4) When Compound Interest Cannot Be Demanded, 910; (5)
Reason Why Compound Interests Are Not Allowed Except in
the Cases Provided for by Law, 910; (6) Cases, 911; Antonio
Tan v. CA & Cultural Center of the Phils., GR 116285, Oct.
19, 2001, 911.
ARTICLE 1960 ..................................................................................

911

COMMENT. Payment of Interest Where There Is No Stipulation, 911.

ARTICLE 1961 ..................................................................................

912

COMMENT: (1) Usury Law, 912; (2) Rules on Construction,

912; (3) Criminal Liability, 912; (4) When Usury Law Does Not
Apply, 913; (5) Compound Interest, 913; (6) Advance Interest,
913; (7) How Much Interest Can Debtor Recover, 913; Sanchez
v. Buenviaje, GR 57314, Nov. 29, 1983, 914; (8) Lawful Interest
Rates, 915; (9) Central Bank Circular 416, 915; Pilipinas Bank
v. CA, 43 SCAD 990 (1993), 915; (10) Case, 915; Almeda v. CA,
70 SCAD 248 (1996), 915; Sps. Puerto v. Court of Appeals, GR
138210, Jun. 13, 2002, 916.
Title XII. DEPOSIT .................................................................................

917

CHAPTER 1 DEPOSIT IN GENERAL AND

ITS DIFFERENT KINDS .........................................

917

ARTICLE 1962 ..................................................................................

917

COMMENT: (1) Provisions in the Code of Commerce, 917; (2)

When Contract of Deposit is Perfected, 917; (3) Purposes of the
Contract, 917; (4) Kinds of Deposits, 918; (5) Characteristics
of the Contract of Deposit, 918; (6) Deposit Distinguished
from Sale and Barter, 919; (7) Deposit and Commodatum
Distinguished, 919; (8) Deposit Distinguished from Agency,
919; (9) Balance of a Commission Account, 920; (10) Advance
Partial Payment in Sales, 920.
ARTICLE 1963 ..................................................................................

920

COMMENT: (1) Consensual Contract to Constitute a Deposit,

920; (2) Necessity of an Agreement, 921.
ARTICLE 1964 ..................................................................................
COMMENT: Distinctions Between Judicial and Extrajudicial
Deposits, 921.

lxvi

921

ARTICLE 1965 ..................................................................................

922

COMMENT: (1) Compensation in a Deposit, 922; (2) Problem,

922; (3) When Contract Is Really One of Loan, 922.
ARTICLE 1966 ..................................................................................

922

COMMENT: (1) Why Only Movable Things May Be the Object

of a Deposit, 923; (2) Services of a Watchman, 923; (3) Sequestration or Attachment of Real Properties, 923.
ARTICLE 1967 ..................................................................................

923

COMMENT: Kinds of Extrajudicial Deposit, 923.

CHAPTER 2 VOLUNTARY DEPOSIT ............................................

924

Section 1 GENERAL PROVISIONS ................................................

924

ARTICLE 1968 ..................................................................................

924

COMMENT: (1) Voluntary Deposit Defined, 924; (2) Reasons

for the First Sentence, 924; (3) Depositor Need Not Be the
Owner, 924; (4) Interpleader Defined, 925; (5) Example of
Interpleader, 925.
ARTICLE 1969 ..................................................................................

925

COMMENT. Form of the Contract of Deposit, 925.

ARTICLE 1970 ..................................................................................

925

COMMENT. (1) Rule When Depositor Is Incapacitated, 925;

(2) Capacity of Depositary, 926; (3) Validity of the Contract
Entered Into, 926.
ARTICLE 1971 ..................................................................................

926

COMMENT: (1) Rule if Depositary Is Incapacitated, 926; (2)

Remedy of Depositor, 927; (3) Validity of the Contract Entered
Into, 927.
Section 2 OBLIGATIONS OF THE DEPOSITARY ......................

927

ARTICLE 1972 ..................................................................................

927

COMMENT: (1) Principal Obligations of the Depositary, 927; (2)

Duty of Safekeeping, 927; (3) Effect if Deposit Is Gratuitous or
Onerous, 928; (4) Owner Bears Loss, 928; (5) Duty of Owner of
Rice Mill, 928; (6) Guardian as Such, Is Not Depositary, 928.
ARTICLE 1973 ..................................................................................

929

COMMENT: (1) Deposit With a Third Person, 929; (2) Reason

of the First Sentence of the Article, 929.
ARTICLE 1974 ..................................................................................
COMMENT: (1) When Depositary May Change the Way of the
Deposit, 930; (2) Reason for the Law, 930.

lxvii

929

ARTICLE 1975 ..................................................................................

930

COMMENT: (1) Duty of Depositary to Collect Interest on Intangible Properties, 930; (2) Duty to Collect the Capital Also,
931; (3) Reason for the Second Paragraph, 931.
ARTICLE 1976 ..................................................................................

931

COMMENT: (1) Right of Depositary to Commingle, 931; (2)

Reason for the Proportional Co-ownership, 931.
ARTICLE 1977 ..................................................................................

932

COMMENT: Generally, Depositary Cannot Use, 932.

ARTICLE 1978 ..................................................................................

932

COMMENT (1) When Depositary Has Permission to Use,

932; (2) Irregular Deposit, 933; (3) Presumption, 933; Baron
v. David, 51 Phil. 1, 933; (4) Deposit of Palay, 934; Delgado v.
Bonnevie and Arandez, 23 Phil. 308, 934; (5) When Deposit of
Money Is Really a Loan, 934; (6) No Prescription of Demand
for Return, 934.
ARTICLE 1979 ..................................................................................

935

COMMENT: Liability for Fortuitous Event, 935.

ARTICLE 1980 ..................................................................................

935

COMMENT: (1) Bank Deposits, 935; PDIC v. CA, Abad, et al.,

GR 126911, Apr. 20, 2003, 936; Rural Bank of Caloocan v. Court
of Appeals, L-32116, Apr. 21, 1981, 937; Ong Sip v. Prudential
Bank and Trust Co., GR 27328, May 30, 1983, 937; Gonzales
v. Philippine National Bank, GR 33320, May 30, 1983, 938; (2)
Distressed Banks, 938; Serrano v. Central Bank, L-30511, Feb.
14, 1980, 938; (3) Exemption from Payment of Interest, 938; The
Overseas Bank of Manila v. Court of Appeals, L-49353, Jun. 11,
1981, 938; (4) The Bouncing Checks Law, 939; Batas Pambansa
Blg. 22, 939; A.M. 00-11-01-SC, 941; Elvira Yu Oh v. CA and
People of the Phils., GR 125197, Jun. 6, 2003, 942.
ARTICLE 1981 ..................................................................................

942

COMMENT: The Depositary Must Keep the Secret of the

Deposit, 942.
ARTICLE 1982 ..................................................................................

943

COMMENT: Necessity of Opening Locked Box, 944.

ARTICLE 1983 ..................................................................................

944

COMMENT: Return of the Thing Deposited, 944.

ARTICLE 1984 ..................................................................................
COMMENT: Depositary Cannot Demand Proof of Ownership,
945.

lxviii

944

ARTICLE 1985 ..................................................................................

945

COMMENT: Two or More Depositors, 945.

ARTICLE 1986 ..................................................................................

945

COMMENT: Rule if Depositor Becomes Insane, 946.

ARTICLE 1987 ..................................................................................

946

COMMENT: (1) Example of Paragraph 1, 946; (2) Example of

Paragraph 2, 946.
ARTICLE 1988 ..................................................................................

946

COMMENT: (1) When Deposit Must Be Returned, 947; (2)

Exceptions to the General Rule, 947; (3) Liability for Damages, 947.
ARTICLE 1989 ..................................................................................

948

COMMENT: (1) Justifiable Reason for Returning, 948; (2)

Problem, 948.
ARTICLE 1990 ..................................................................................

949

COMMENT: Loss Thru Force Majeure or Government Order,

949.
ARTICLE 1991 ..................................................................................

949

COMMENT: Sale by Heir, 949.

Section 3 OBLIGATIONS OF THE DEPOSITOR ........................

950

ARTICLE 1992 ..................................................................................

950

COMMENT: Duty of Depositor to Reimburse, 950.

ARTICLE 1993 ..................................................................................

950

COMMENT: (1) Reimbursement Because of Loss, 951; (2)

Exceptions, 951.
ARTICLE 1994 ..................................................................................

951

COMMENT: (1) Right of Retention by Depositary, 952; (2)

Pledge by Operation of Law, 952; (3) Query, 952.
ARTICLE 1995 ..................................................................................

952

COMMENT: (1) Extinguishment of Deposit, 953; (2) Effect of

Death, 953; (3) Query, 953; (4) Other Grounds, 953.
CHAPTER 3 NECESSARY DEPOSIT .............................................

954

ARTICLE 1996 ..................................................................................

954

COMMENT: (1) Example of Necessary Deposit Made in Compliance With a Legal Obligation, 954; (2) Example of a Necessary
Deposit Made on the Occasion of a Calamity, 954; (3) Two Other
Kinds of Necessary Deposits, 955.

lxix

ARTICLE 1997 ..................................................................................

955

COMMENT: (1) Governing Rules for Deposits Made in Compliance with a Legal Obligation, 955; (2) Rules Governing Deposits
Made Because of a Calamity, 955; (3) Art. 2168, 955.
ARTICLE 1998 ..................................................................................

956

COMMENT: (1) Example of Liability of Hotel or Inn-keepers,

956; (2) Innkeeper Defined, 956; (3) Occasional Entertainment
Defined, 956; (4) Travellers Defined, 956; (5) Reasons for the
Liability of the Hotels or Inns, 957; (6) When Liability Begins,
957; (7) Meaning of Effects, 957; (8) Nature of Precautions to
Be Given to the Guests, 957.
ARTICLE 1999 ..................................................................................

958

COMMENT: Liability Extends to Objects in Annexes, 958.

ARTICLE 2000 ..................................................................................

958

COMMENT: (1) Rules for Liability, 958; (2) Non-Liability for

Force Majeure, 958; (3) Problem, 958.
ARTICLE 2001 ..................................................................................

959

COMMENT: (1) Robbery Through Force Upon Things, 959; (2)

Query, 959; (3) Reason for Art. 2001, 959.
ARTICLE 2002 ..................................................................................

960

COMMENT: (1) Instances When Hotel Keeper Is Not Liable,

960; (2) Examples, 960.
ARTICLE 2003 ..................................................................................

960

COMMENT: Effect of Notices Negating Liability, 960.

ARTICLE 2004 ..................................................................................

961

COMMENT: (1) Right of Retention Given to Hotel-Keeper, 961;

(2) Right to Sell, 961; (3) Why the Right to Retain Is Given, 961;
(4) When Lien or Retention Does Not Exist, 961.
CHAPTER 4 SEQUESTRATION OR JUDICIAL
DEPOSIT .....................................................................

962

ARTICLE 2005 ..................................................................................

962

COMMENT: Nature of Garnishment or Judicial Deposit, 962.

ARTICLE 2006 ..................................................................................

962

COMMENT: Object of Judicial Sequestration, 962.

ARTICLE 2007 ..................................................................................
COMMENT: (1) When Depositary Can Be Relieved of Liability,
963; (2) When Properties Cease to Be in Custodia Legis, 963.

lxx

963

ARTICLE 2008 ..................................................................................

963

COMMENT: To Exercise Diligence of a Good Father, 963.

ARTICLE 2009 ..................................................................................

963

COMMENT: Suppletory Rules in Rules of Court, 963.

TITLE XIII ..................................................................................................

964

ALEATORY CONTRACTS .....................................................................

964

GENERAL PROVISIONS, 964.

ARTICLE 2010 ..................................................................................

964

COMMENT: (1) Element of Risk, 964; (2) Kinds of Aleatory

Contracts, 964; Malayan Insurance Co., Inc. v. Arnaldo, GR
67835, Oct. 12, 1987, 964; (3) Distinction Between an Aleatory
Contract and a Contract with a Suspensive Condition, 965.
CHAPTER 1 INSURANCE ................................................................

966

ARTICLE 2011 .................................................................................

966

COMMENT: (1) Principal Law on Insurance, 966; Acme Shoe

Rubber and Plastic Corporation v. Court of Appeals, L 56718,
Jan. 17, 1985, 966; Mayer Steel Pipe Corp. & Hong Kong Government Supplies Dept. v. CA, South Sea Surety & Insurance
Co., Inc. & Charter Insurance Corp., GR 124050, Jun. 19, 1997,
83 SCAD 881, 966; (2) Deficiency in the Insurance Law, 967;
Association of Baptist for World Evangelism, Inc. v. Fieldmans
Insurance, GR 28772, Sep. 21, 1983, 967; (3) Beneficiary Is
Not the Donee in a Donation, 967; (4) Rule if Beneficiary Is a
Compulsory Heir, 967; (5) Who Collects the Insurance Indemnity?, 968; (6) Problem, 968; (7) Effect of Predecease of the
Beneficiary, 968; (8) Accident Insurance, 969; (9) Measure of
the Vested Interest of Insurance Beneficiary, 969; (10) Act of
Surrendering an Insurance Policy is an Act of Disposition or
alienation, 969.
ARTICLE 2012 ..................................................................................

970

COMMENT: (1) Disqualified Donees Cannot Be Beneficiaries,

970; (2) No Retroactive Effect of the Article, 970.
CHAPTER 2 GAMBLING ..................................................................

971

ARTICLE 2013 ..................................................................................

971

COMMENT: (1) Game of Chance Defined, 971; (2) Rule in Case

of Doubt, 971; (3) Examples of Games of Chance, 971; (4) Some
Forms of Legal Gambling, 971.
ARTICLE 2014 ..................................................................................
COMMENT: (1) No Court Action by Winner, 972; (2) Promissory Note Issued Because of Gambling, 972; (3) Money Lent to

lxxi

972

a Gambler, 972; (4) Instance Where Article is Not Applicable,

972; Ban v. IAC, GR 66272, Oct. 17, 1986, 972.
ARTICLE 2015 ..................................................................................

973

COMMENT: Effect of Cheating, 973.

ARTICLE 2016 ..................................................................................

973

COMMENT: Rule if Loser Does Not Bring the Action to Recover, 973.
ARTICLE 2017 ..................................................................................

974

COMENT: Bets Made by Game Watchers, 974.

ARTICLE 2018 ..................................................................................

974

COMMENT: Where the Transactions Partake of Gambling and

Thus Void, 974.
ARTICLE 2019 ..................................................................................

975

COMMENT: (1) Prohibition on Betting, 975; (2) Beauty Contest,

Oratorical Contest, 975; (3) Revised Penal Code, 975.
ARTICLE 2020 ..................................................................................

975

COMMENT: Chess is definitely not a game of chance, 975.

CHAPTER 3 LIFE ANNUITY ...........................................................

976

ARTICLE 2021 ..................................................................................

976

COMMENT: (1) Example of Life Annuity, 976; (2) Life Annuity

Distinguished from Life Insurance, 976.
ARTICLE 2022 ..................................................................................

976

COMMENT: (1) Upon Whose Life the Annuity May Be Constituted, 977; (2) Who May Be the Beneficiary, 977.
ARTICLE 2023 ..................................................................................

977

COMMENT: When the Contract of Life Annuity Is Void, 977.

ARTICLE 2024 ..................................................................................

977

COMMENT: Effect if the Income Due Is Not Paid, 977.

ARTICLE 2025 ..................................................................................

978

COMMENT: Effect if Beneficiary Dies, 978.

ARTICLE 2026 ..................................................................................

978

COMMENT: Attachment of the Annuity, 978.

ARTICLE 2027 ..................................................................................
COMMENT: Proof of Existence of Person Upon Whose Life the
Annuity Has Been Constituted, 978.

lxxii

978

Title XIV. COMPROMISES OR ARBITRATIONS ............................

979

CHAPTER 1 COMPROMISES ..........................................................

979

ARTICLE 2028 ..................................................................................

979

COMMENT: (1) Essence of Compromise, 979; (2) Definition

of Compromise, 979; (3) Characteristics, 979; Kaisahan v.
Sarmiento, L-47853, Nov. 16, 1984, 980; (4) Kinds, 980; (5)
When Agreement Is Not Really a Compromise, 980; Merced v.
Roman Catholic Archbishop, L-24614, Aug. 17, 1967, 980; (6)
Cases, 981; Landoil Resources Corp., et al. v. Hon. Tensuan,
et al., GR 77733, Dec. 20, 1988, 981; Reformist Union of R.B.
Liner, Inc. v. NLRC, GR 120482, Jan. 27, 1997, 78 SCAD 377,
981.
ARTICLE 2029 ..................................................................................

982

COMMENT: (1) Duty of the Court to Persuade Litigants to

Compromise, 982; (2) Right of Attorney to Compromise for
His Client, 982; (3) The Case of Richard Gordon, 982; Richard
Gordon v. CA, GR 134900, Sep. 1, 1998, 982.
ARTICLE 2030 ..................................................................................

982

COMMENT: (1) Suspension of Civil Action or Proceeding, 983;

(2) Motion to Dismiss, 983; (3) Postponements, 983; (4) Offers
to Arbitrate Not Included, 983.
ARTICLE 2031 ..................................................................................

984

COMMENT: Mitigation of Damages, 984.

ARTICLE 2032 ..................................................................................

984

COMMENT: (1) When Court Approval is Essential, 984; (2)

Other Rules, 984.
ARTICLE 2033 ..................................................................................

985

COMMENT: Rules for Compromise Entered Into by Juridical

Persons, 985.
ARTICLE 2034 ..................................................................................

985

COMMENT: (1) Generally, No Compromise on Criminal Aspect, 985; (2) When Compromise Is Allowed, 985; Republic v.
Marcela B. Garay, L-21416, Dec. 31, 1965, 986; Dasalla, Sr. v.
CFI, GR 51461, Apr. 26, 1991, 986; (3) Compromise in Criminal
Tax Cases, 988.
ARTICLE 2035 ..................................................................................
COMMENT: (1) Questions on Which There Can Be No Valid
Compromise, 988; (2) Status, 988; Tan, et al. v. Republic, L27713, Feb. 10, 1981, 988; (3) Recognition of Illegitimate Child,
989; (4) Support, 989; (5) Jurisdiction of Courts, 989; One Heart
Sporting Club, Inc. v. The Court of Appeals, GR 53790, Oct. 23,

lxxiii

988

1981, 989; Solidum v. Sta. Maria, Administrative Case 1858,

Dec. 26, 1984, 989.
ARTICLE 2036 .................................................................................

990

COMMENT: (1) What a Compromise Can Deal With, 990;

(2) Effect of General Renunciation of Rights, 990; (3) Strict
Construction of a Compromise Agreement, 990; International
Hotel Corp., et al. v. Hon. Elias Asuncion, L-39669, Mar. 10,
1975, 990.
ARTICLE 2037 ..................................................................................

991

COMMENT: (1) Res Judicata Effect of a Compromise, 991;

Cruz, et al. v. IAC, et al., GR 72806, Jan. 9, 1989, 991; (2) Judicial Compromise, 991; Republic v. Court of Appeals, L-47381
and L-47420, Jan. 31, 1985, 992; Federis v. Sunga, L-34893,
Jan. 17, 1985, 992; (3) Judgment Generally Not Appealable,
992; (4) Judgment by Wage Administration Service, 993; (5)
When Judgment on Compromise Is Void, 993; (6) Effect of a
Judicial Compromise on Persons Not Original Parties, 994;
Rodriguez v. Alikpala, L-38314, Jun. 25, 1974, 994; Bobis v.
Provincial Sheriff of Camarines Norte, GR 29838, Mar. 18,
1983, 994.
ARTICLE 2038 ..................................................................................

994

COMMENT: (1) Effect of Compromise Where There is Vitiated

Consent, 995; (2) Modification of a Judgment on Compromise,
995.
ARTICLE 2039 ..................................................................................

995

COMMENT: Effect of Discovery of Documents Referring to

Matters Compromised Upon, 996.
ARTICLE 2040 ..................................................................................

996

COMMENT: (1) Compromise Entered Into in Ignorance of a

Final Judgment, 996; (2) Reason for Allowing a Rescission, 996;
(3) Effect of Appeal, 996.
ARTICLE 2041 ..................................................................................

996

COMMENT: (1) Effect if Compromise Agreement Is Not Fulfilled, 997; City of Zamboanga v. Mandi, GR 86760, Apr. 30,
1991, 997; Barreras, et al. v. Hon. Garcia, et al., L-44715 16,
Jan. 26, 1989, 1000; (2) No Necessity for Judicial Rescission,
1000; (3) No Rescission After Benefits are Enjoyed, 1000; Republic v. Sandiganbayan, 49 SCAD 45 (1993), 1000.
CHAPTER 2 ARBITRATIONS .........................................................

1001

ARTICLE 2042 ..................................................................................

1001

COMMENT: (1) Arbitration Defined, 1001; Mindanao Portland

Cement Corp. v. McDonough, L-23390, Apr. 24, 1967, 1001;

lxxiv