(3 Viso, 20.) In this kind of contracts, therefore, the delivery of the thing is a sine qua non requisite for their perfection. To these contracts belong the following: Loan, Comodatum, Depositum, and Pledge.

As to nature of loan, see Article 1740, Part 1, Civil Code; 11 Manresa, 580; IV Sanchez Román, 839 et seq.; 3 Viso, 434; as to mercantile loan, see 2 Blanco 555;

As to nature of comodatum, see Article 1740, Civil Code; 11 Manresa, 580; IV Sanchez Román, 859 et seq.; 3 Viso, 447; as to mercantile comodatum, see Blanco, Vol. 2, p. 556;

As to nature of depositum, see Article 1758, Civil Code; 11 Manresa, 643; IV Sanchez Román, 874; 3 Viso, 456; as to mercantile deposit, see Blanco, Vol. 2, p. 630; As to nature of pledge, see Article 1863, Civil Code; 12 Manresa 411; IV Sanchez Román, 971 et seq.; 3 Viso, 481; as to mercantile pledge, see Blanco Vol. 2, pp. 596-597. Sanchez Román, however, considers also as a real contract, the contract of life annuity. (See IV Sanches Román, 826.)

Formal contracts are those which, though not under penalty of nullity, require a special form. (8 Manresa, 693.) Formal contracts are those which, in order to produce the corresponding obligations, it is necessary to comply with certain formalities prescribed by law. (3 Viso, 21.) Formerly, said formalities were necessary for the perfection of the contract, but according to Civil Code they are no longer essential. The same is true with regard to commercial contracts. (See Article 51, Code of Commerce.) It is enough that all the conditions required for their validity are present. (Article 1278, Civil Code; see Aldecoa & Co. vs. Warner Barnes Co., 30 Phil. 153.) When the law exacts the execution of a deed or other special form for making effectual the obligations of a contract, the contracting parties may only compel each other to comply with such form, from the moment in which consent and the other requirements, necessary for their validity have taken place. (Article 1279, Civil Code; see Manalo vs. De Mesa, 29 Phil. 475.)

The contracts are binding whatever may be the form in which they have been entered into provided all the essential conditions required for their validity are present; the perfection of the contract, therefore, depends not upon their form, but upon their validity. (Decisions of the Supreme Court of Spain, 4th of July, 1899, and 19th of October, 1901.) The right to demand the execution of an instrument required by law does not impair the perfection of a contract entered into with all the essential conditions present. (Decision of the Supreme Court of Spain, 19th of February, 1898.)

The Supreme Court of these Islands in construing these articles (1278-1280) of the Civil Code, held: "An oral contract of the sale of real property, made prior to the enactment of the Code of Civil Procedure (Sec. 335, Act 190), is binding between the parties thereto, although it may still be necessary for the party seeking to enforce such contract to take some action to secure the execution of the proper document, but this requirement will not render the agreement invalid. (Thunga Chui vs. Que

Bentec, 2 Phil. 561; Serrano vs. Cortes, 8 Phil. 459.) As to commercial contracts there is no doubt because Article 51 of the Code of Commerce is clear in this point. (See Article 50, Code of Commerce; see also Thurga Chui vs. Que Bentec, supra, and 2 Blanco, 399.)

The above conclusion is true in spite of the Statute of Frauds. (Sec. 335, Act 190, Code of Civil Procedure). The Supreme Court in deciding what effect has the Statute of Frauds put in force in these Islands (Sec. 335, Act 190) upon Article 1278 of the Civil Code, held: "Section 335, of Act 190, makes no attempt to render such oral contracts invalid. It simply provides how such contracts be proved. It does not attempt to make contracts invalid which have not been executed in writing. This provision does not go to the existence of the contract except when made by an agent. (Sec. 335, Part 5, Act 190.) It simply requires a form of contract. The contract exists and is valid though it may not be clothed with the necessary form, and the effect of noncompliance with the provisions of the statute is simply that no action can be proved unless the requirement is complied with; but a failure to except to the evidence because it does not conform with the statute is a waiver of the provisions of the law. If the parties to the action, during the trial, make no objection to the admissibility of oral evidence to support the contract of sale of real property, thus permitting the contract to be proved, it will be just as binding upon the parties as if it had been reduced to writing." (Conlu vs. Araneta and Guangco, 15 Phil. 387, 390; the same decision was confirmed by our Supreme Court in the case of Gallemit vs. Tabiliran, 20 Phil. 241; and in a later decision the same was also confirmed in the case of Gomez vs. Salcedo, 26 Phil. 485.)

From the foregoing decision, it may be said, therefore, that the Statute of Frauds, Section 335 of Act 190, is only effectual, when the same is invoked in court in opposition to the admissibility of oral evidence. Unless such opposition is made, the oral contract will be held good notwithstanding the Statute of Frauds. Hence, such contracts are only voidable and not void.

Notwithstanding the above decision, however, the Supreme Court in one case held: "that under the provisions of the Civil Code (Article 1280, Part 6) in an action to recover money under a contract of loan, if the amount loaned was for a sum exceeding P300 (1,500 pesetas) the plaintiff must show that the contract was reduced to writing." (Que Young Lueng vs. Tan Guico, 14 Phil. 173.)

V. Operation (American Law) as to Different Kinds of Contracts

a. In General. The only formal contracts under American Law are the contracts under seal and those which are required by the statutes to be in writing and to be stamped; all others being parol contracts, depending for their validity upon consideration, whether they be by word of mouth or in writing. (Quigly vs. Muse, 15 La. Ann. 197.) It may be stated, therefore, as a general rule, that, aside from the formal contracts and those which required delivery (bailments), the contracts take effect and are operative from the moment the parties come to an agreement. (9 Cyc., 299.)

b. Formal Contracts.

(1) Contracts under seal.-A contract under seal is a contract to which the seal of the party or parties executing it is affixed, and which derives its validity from its form alone, and not from the fact of agreement or from consideration. (Parker vs. Parmeler, 11 Am. Dec. 253.) A contract under seal is necessary at Common Law where the promise is without consideration, and in many jurisdictions conveyances of land and certain other contracts are required by statute to be under seal. (9 Cyc., p. 297.)

(2) Contracts in writing.-The only contracts which in the absence of the statutes are required to be in writing, outside of those requiring a seal, are bills of exchange and promissory notes. The necessity of writing, as evidence of agreement or as giving validity to the agreement, is, except in these cases, purely statutory. The most important of this class is the Statute of Frauds of 29, Chapter II, the provisions of which have been substantially reenacted in most of the States and Territories. Under these statutes many agreements which might otherwise be entered into by words of mouth have been rendered by positive statutory enactments either void or unenforceable unless embodied in a written document. (9 Cyc., 298.) The general effect of this Statute as to the contracts of sale of goods, wares, and merchandises, is to require either: (1) an actual receipt and acceptance of a part of the goods, or (2) the giving of something in earnest to bind the bargain or (3) a part payment, or (4) a note or memorandum in writing of the bargain, signed by the party to be charged thereby or by his agent thereunto duly authorized. (Mechem on Sales, Vol. I, p. 271, Sec. 291; Towers vs. Osborne, 1 Strange 506.) Failure to comply with the forms prescribed by the Statute of Frauds, does not render the contract void, but only voidable. Only no action can be maintained to charge one upon it, but for all other purposes it is good.

(Bishop on Contracts, Sec. 1238.)

(3) Contracts requiring stamps.-In the absence of statute, of course, no stamp is required in order to render a written contract complete and valid. But sometimes the revenue laws require written agreements of a particular kind to be stamped and the omission of the stamp in such a case may render an agreement invalid. (9 Cyc., p. 302.) Where the revenue stamps are required by the statute to be affixed to an instrument, are purposely omitted with an intent to evade the duty, the instrument is void and inadmissible in evidence. (Byington vs. Oaks, 32 Iowa, 488; Sawyer vs. Parker, 57 Me., 39.) But where the omission to affix stamps is without intent to evade the provisions of the statutes, the rule seems to be settled that it will not render the instrument void. (Bates vs. Bailey, 57 Ala. 73; Bumpass vs. Faggart, 26 Ark. 398; 9 Cyc., p. 305.)

C. Contracts of sales.-These contracts are confined only to personal properties known as chattels. Contracts for the purchase and sales of chattels, if complete and unconditional, and not within the Statute of Frauds, are sufficient as between the parties to vest the property in the purchaser without delivery. The rule is that when

the chattels are clearly designated and appropriated to the contract, are ready for immediate delivery and the terms of sale including the price are explicitly given, there is an executed contract, and the title to the property as between the parties passes to the purchaser even without actual payment or delivery. (Rail vs. Little Falls Lumber Co., 47 Minn. 422; Natch vs. Oil Company, 100 U. S. 124; Penley vs. Bissey, 33 Ala. 524; Clinton National Bank vs. Studeman, 74 Iowa, 104.) From the decisions of these cases it can be stated as a rule that in sale of chattels not within the Statute of Frauds, if the same is complete and unconditional, the title passes right away to the purchaser by the mere agreement of the parties on the object and consideration, even though no payment or delivery has yet been made. The title may also pass at once if that appears to be the intention, even though the seller is yet to make a delivery. (McElwee vs. Metropolitan Lumber Co., 69 Fed. Rep., 302; Thayer vs. Davis, 75 Wis., 205); even though the seller is to do something to the goods after delivery (Lingham vs. Egleston, 27 Mich. 324; Whitcomb vs. Whitney, 24 Mich. 486); even though the goods are in the hands of the seller's bailee or agent (Erwin vs. Arthur, 61 Mo. 386); even though the goods remain in the hands of the seller as bailee for the buyer (Bertelson vs. Bower, 81 Ind. 512); even though the price is not yet paid (Rail vs. Little Falls Lumber Co., 47 Minn. 422). But when the sale is conditional the title does not pass until the condition is fulfilled, even though the terms of the contracts are complete. The following cases are of this class:

(1) Where by the agreement the vendor is to do anything to the goods for the purpose of putting them into that estate in which the purchaser is to be bound to accept them, or into a deliverable state, the performance of these things shall, in the absence of circumstances indicating a contrary intention, be taken to be a condition precedent to the vesting of the property. (Blackborn on Sales, p. 175; Rosted v. Eugermoer, (1896), 65 Minn. 148; Rourke vs. Bullens, (1857), 8 Gray (Mass.) 549.)

(2) Where anything remains to be done to the goods, for the purpose of ascertaining the price, as by weighing, measuring or testing the goods, where the price is to depend on the quantity or quality of the goods, the performance of these things also shall be a condition precedent to the transfer of the property, though the individual goods be ascertained, and they are in the state in which they ought to be accepted. But later this rule was modified, to the extent that this condition shall only be presumed precedent, unless the contrary intention is shown. (Blackborn on Sales, p. 185; Byles vs. Colier (1884), 54 Mich. 1.)

(3) Where the buyer is by the contract to do anything as a condition, either precedent or concurrent, on which the passing of the property depends, the property will not pass until the condition be fulfilled, even though the goods may have been actually delivered into the possession of the buyer. (Clark vs. Greely, (1882), 62 N. H. 394; Blackborn on Sales, p. 175.)

(4) Where by the terms of the contract, any other act or event is made a condition of the passing of the title, the property will not pass unless and until such act or event happens or the performance is waived. (Mechem on Sales, p. 422; Notier vs. Hunnel, 22 Ill. App. 194; Cormick vs. Williams, 92 Iowa 601.)

d. Bailments.-It is said that a bailment "is a delivery of goods in trust, for some special purpose and upon a contract, express or implied, to conform to the object or purpose of the trust." (Storey on Bailments, C. 1, par. 2.) From the foregoing it may be said that bailment is not the contract itself but the latter only forms or constitutes its basis, and that upon its validity depends that of the contract. Delivery is absolutely essential to a bailment, and the delivery marks the real inception of the bailment. (Schouler on Bailments, Secs. 21 and 32.) Therefore, unless delivery has been made either actual or constructive, the contract is not binding, whether this be a depositum, mandatum, comodatum, mutuum, pignus, or location. (Storey on Bailments, Sec. 55; Whitaker vs. Summer, 20 Pick. (Mass.) 399; Tuxworth vs. Moore, 9 Pick (Mass.) 346.)

(To be continued.)