Art.

1307 GENERAL PROVISIONS 463

vehicles to operate under such franchise for a fee. A certificate of public

convenience is a special privilege conferred by the government. Although
not outrightly penalized as a criminal offense, the “kabit system’’ is
invariably recognized as being contrary to public policy, and therefore,
void and inexistent under Article 1409. It is a fundamental principle that
the court will not aid either party to enforce an illegal contract but will
leave both where it find’s them. (Teja Marketing vs. Intermediate Appellate
Court, 148 SCRA 347 [1987].)

ART. 1307. Innominate contracts shall be regulated by the

stipulations of the parties, by the provisions of Titles I and II of
this Book, by the rules governing the most analogous nominate
contracts, and by the customs of the place. (n)

Classification of contracts according

to its name or designation.
They are:
(1) Nominate contract or that which has a specific name or
designation in law (e.g., commodatum, lease, agency, sale, etc.); and
(2) Innominate contract or that which has no specific name or
designation in law.

Kinds of innominate contract.

They are:
(1) do ut des (I give that you may give);
(2) do ut facias (I give that you may do);
(3) facio ut des (I do that you may give); and
(4) facio ut facias (I do that you may do).
Do ut des is, however, no longer an innominate contract. It has
already been given a name of its own, i.e., barter or exchange. (Art.
1638.)

Reasons and basis for innominate

contracts.
The impossibility of anticipating all forms of agreement on one
hand, and the progress of man’s sociological and economic relationships
on the other, justify this provision. (8 Manresa 623-625.) A contract will
not, therefore, be considered invalid for failure to conform strictly to
464 CONTRACTS Art. 1307

the standard contracts outlined in the Civil Code provided it has all
the elements of a valid contract. (Arts. 1318, 1356.)
Innominate contracts are based on the well-known principle that
“no one shall unjustly enrich himself at the expense of another.” (Cor-
pus vs. Court of Appeals, 98 SCRA 424 [1980].)

Rules governing innominate contracts.

Innominate contracts shall be governed by:
(1) the agreement of the parties;
(2) the provisions of the Civil Code on obligations and contracts;
(3) the rules governing the most analogous contracts; and
(4) the customs of the place.

ILLUSTRATIVE CASES:
1. Services were rendered and accepted without any contract.
Facts: On various occasions, X rendered services to Y as interpreter of
English. No written contract was entered into between the parties for the
employment of X as interpreter. There was no evidence as to whether X’s
services were solicited, by Y or whether they were offered to Y, but there
was no question X rendered and Y accepted the benefits of the services.
Issue: Is Y under obligation to pay X just compensation for
the services?
Held: Yes. It was with the express or tacit consent of Y that X rendered
him services as interpreter. As it did not appear that X rendered the same
gratuitously, Y has the duty to pay X just compensation therefor by
virtue of the innominate contract of facio ut des implicitly established. The
obligations arising from the contract are reciprocal and apart from the
general provisions with respect to contracts and obligations, the special
provisions concerning contracts for lease of services (Arts. 1689-1731.) are
applicable by analogy. (Perez vs. Pomar, 2 Phil. 682 [1903].)
Note: When a person does not expect to be paid for his services
there cannot be a contract implied in fact to make compensation for said
services. In the same manner, when the person rendering services has
renounced his fees, the services are not demandable obligations. (Aldaba
vs. Court of Appeals, 27 SCRA 263 [1969].) On the other hand, where
a person fails to render the services paid for, he is under obligation to
return the amount paid. (Sta. Ana Hardware & Co. vs. “Y’’ Shipping
Corp., 64 SCRA 654 [1975].)
Art. 1307 GENERAL PROVISIONS 465

An attorney-client relationship can be created by implied agreement,

as when the attorney actually rendered legal services for a person who
is a close friend. The absence of express contract for attorney’s fees is no
argument against their payment which may also be justified by virtue
of the nominate contract of facio ut des. (Corpus vs. Court of Appeals, 98
SCRA 424 [1980].)
—-— —-— —-—
2. Agreement whereby a person would pay the indebtedness of the
mortgagor in consideration of the use of the mortgaged property until
reimbursement of the amounts paid.
Facts: After the extrajudicial foreclosure by DBP (mortgagee) and
sale of the mortgaged lands to it, but within the one (1) year redemption
period, R (mortgagor) entered into a contract with B entitled “Deed of
Sale with Assumption of Mortgage’’ under which R sold the lands to B
and the latter assumed the mortgage indebtedness. In another document,
R was given the option to repurchase the property. B took possession of
the property, introduced improvements thereon, and appropriated the
produce to himself.
R demanded an accounting of the income of the property, alleging
that the true intent of the parties in executing the contracts in question
was to create an equitable mortgage. (see Arts. 1602-1605.)
Issue: What contract was entered into by the parties?
Held: In the light of the foreclosure proceedings and sale of the
properties x x x as well as other relevant facts and circumstances x x
x, the true intention of the parties is that B would assume and pay the
indebtedness of R to DBP, and in consideration therefor, B was given the
possession, the enjoyment, and use of the lands until R can reimburse
fully B the amounts paid by the latter to DBP.
The agreement is one of those innominate contracts under Article
1307 of the new Civil Code whereby R and B agreed ‘to give and to do’
certain rights and obligations respecting the lands and the mortgage debts
of R which would be acceptable to the bank, but partaking of the nature
of antichresis13 insofar as the principal parties (R and B) are concerned.’’
(Dizon vs. Gaborro, etc. and Development Bank of the Phils., 83 SCRA 688
[1978].)

13
Art. 2132. By the contract of antichresis the creditor acquires the right to receive the
fruits of an immovable of his debtor, with the obligation to apply them to the payment of the
interest, if owing, and thereafter to the principal of his credit. (1881)