Chapter 4 (Extinguishment of Obligations) Section 1 (Payment or Perfmance)

Question 1

Art. 1232: Payment means not only the delivery of money but also the ___, in any other manner, of an obl.

Answer 1

performance

Question 2

Art. 1233: A debt shall not be understood to have been paid unless the thing/service in which the obligation consists has been ___ or __, as the case may be.

Answer 2

completely delivered, rendered

Question 3

As a general rule, ___ performance will not produce the extinguishment of an obligation.

Answer 3

partial or irregular

Question 4

When the existence of a debt is admitted by the debtor or established by the evidence of the creditor, the burden of proving extinguishment by payment devolves upon the ____

Answer 4

D who claims payment

Question 5

Art. 1234: If the obl has been ____ the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee.

Answer 5

substantially performed in good faith

Question 6

The requisites for the application of Art 1234 are:

Answer 6

1.) Substantial performance and 2.) The obligor must be in good faith

Question 7

There is substantial performance when:

Answer 7

1. the important/essential part of the contract has been performed (in this situation, the contract is subject to rescission) and/or 2. A small or minor part thereof has not been carried out. (in this situation Art 1234 allows only a proportionate reduction in the amount recoverable by the obligor)

Question 8

T/F: Good faith must never be presumed.

Answer 8

False. Good faith is always presumed in the absence of proof to the contrary. The burden of proof false on the obligor.

Question 9

Art. 1235: When the obligee accepts the performance, knowing its incompleteness or irregularity, and without _____, the obligation is deemed ____

Answer 9

expressing any protest or objection, fully complied with

Question 10

Art. 1236: The C is not bound to accept payment or performance by a ____ who has no interest in the fulfillment of the obligation, unless _____. Whoever pays for another may demand from the ____ what he has paid, except that if he ____ or ____, he can recover only insofar as the payment has been beneficial to the ___.

Answer 10

third person, there is a stipulation to the contrary, Debtor, paid without the knowledge, against the will of the debtor, Debtor

Question 11

The creditor is bound to accept payment/performance from the following:

Answer 11

1. The Debtor, 2. Any person who has an interest in the obligation (such as a guarantor), or 3. A third person who has no interest in the obligation when there is stipulation that he can make payment. In all 3 people, none of them must be incapacitated.

Question 12

Art. 1237: Whoever pays on behalf of the D without the knowledge or against the will of the latter cannot compel the C to ____ such as those arising from a mortgage, guaranty, or penalty.

Answer 12

subrogate him in his rights.

Question 13

If a third party pays on behalf of a Debtor with the Debtor’s consent, the third party shall be entitled to ____

Answer 13

subrogation.

Question 14

T/F: A third party can be subrogated if the Creditor willingly permits the third party to be subrogated in his rights.

Answer 14

False. Art. 1237 is for the benefit of the Debtor, and so the subrogation can only take place with his consent. The third party is amply protected by his right to reimbursement.

Question 15

T/F: In subrogation, there is an extinguishment of the obligation.

Answer 15

False. There is no real extincion of the obligation, but only a change of Creditor

Question 16

Art. 1238: Payment made by a third person who does not intend to be reimbursed by the Debtor is deemed to be a ___, which requires the ____. But the payment is in any case _____ as to the creditor who has accepted it.

Answer 16

donation, debtor’s consent, valid

Question 17

Art. 1239: In obligations to give, payment made by one who does not have _________ and _______ shall not be valid, without prejudice to the provisions of article 1427 under the Title on “Natural Obligations”.

Answer 17

the free disposal of the thing due, capacity to alienate it

Question 18

Free disposal of the thing due means that:

Answer 18

the thing to be delivered must not be subject to any claim or lien or encumbrance (e.g., mortgage, pledge) of a third person

Question 19

Capacity to alienate means that:

Answer 19

the person is not incapacitated to enter into contracts and for that matter, to make a disposition of the thing due.

Question 20

T/F: Regardless of the validity of payment, the thing paid can be recovered.

Answer 20

False. If the payment is not valid, the thing paid can be recovered.

Question 21

Art. 1240: Payment shall be made to the person in whose ____ the obligation has been constituted, or his _____, or _______________

Answer 21

favor, successor in interest (such as an heir or assignee), any person authorized to receive it (not only authorized by the Creditor but also a person authorized by law to receive payment such as a guardian, executor or administrator of the estate of a deceased, and assignee or liquidator of a partnership or corporation as well as any other person who may be authorized to do so by law)

Question 22

T/F: If the Debtor paid the wrong person (not an appropriate Creditor) but he acted in good faith, he can be excused from the obligation.

Answer 22

False. Paying to the wrong party is not an excuse. The Debtor still owes the Creditor. Wag bobo.

Question 23

Art. 1241: Payment to a person who is incapacitated to administer his property shall be valid if he has _____, or insofar as _____. Payment made to a third person shall also be valid insofar as it has ____ to the ___ of the Creditor. Such ____ to the Creditor need not be proved in the following cases: _____, _____, and ____

Answer 23

kept the thing delivered, insofar a the payment has been beneficial to him, redounded, benefit, benefit, (1) if after the payment, the third person acquires the creditor’s rights, (2) if the Creditor ratifies the payment to the third person, (3) if by the Creditor’s conduct, the Debtor has been led to believe that the third person had authority to receive the payment

Question 24

The proof of an incapacitated person’s benefit from a payment made to him is incumbent upon _____

Answer 24

The Debtor who paid

Question 25

T/F: If a payment is made to an incapacitated person and the incapacitated person loses the/a entire/part of the thing due to ignorance or negligence, the payment is still considered valid.

Answer 25

False. The payment is not valid. If the incapacitated person lost part of the thing, only the remaining part is considered what has already been paid by the Debtor. Example under Art. 1241

Question 26

T/F: The instance that the Creditor was benefited by the payment made by the Debtor to a third person is presumed.

Answer 26

False. It must be proved.

Question 27

T/F: If there is absence of proof that the Creditor was benefited by the payment made by the Debtor to a third person, the right of the Creditor to demand payment depends whether the payment was made in error or in good faith.

Answer 27

False. It does not matter if the payment was made in error or in good faith. Both cases will not deprive the Creditor of his right to demand payment.

Question 28

Art 1242: Payment in good faith to ______ shall release the debtor

Answer 28

any person in possession of the credit. (The possession of credit is not merely the document/instrument evidencing the credit.

Question 29

Art. 1243: Payment made to the Creditor by the Debtor after the latter has been _____ shall not be valid.

Answer 29

judicially ordered to retain the debt

Question 30

Art. 1244: The Debtor of a thing cannot _________, although the latter may be of _________. In obligations to do or not to do, an act or forbearance cannot be ________

Answer 30

compel the creditor to receive a different one; the same value as, or more valuable than that which is due; substituted by another act or forbearance agaisnt the obligee’s will.

Question 31

Art. 1245: Dation in payment whereby property is ____ in satisfaction of a debt in money, shall be governed by the law of sales.

Answer 31

alienated to the Creditor

Question 32

4 special forms of payment under the Civil Code:

Answer 32

1. Dation in payment, 2. Application of payments, 3. Payment by cession, 4. Tender of payment and consignation

Question 33

Dation in payment (adjudication or dacion en pago) is the:

Answer 33

conveyance of ownership of a thing as an accepted equivalent of performance. It’s a special form of payment because it’s not the ordinary way of extinguishing an obligation. A conveyance is, in effect, a novation of the contract.

Question 34

Art. 1246: When the obligation consists in the delivery of an indeterminate or generic thing, whose quality and circumstances have not been stated, the creditor cannot _____. Neither can the Debtor ____. The purpose of the obligation and other cirumstances shall be taken into consideration

Answer 34

demand a thing of superior quality, deliver a thing of inferior quality

Question 35

Art. 1247: Unless it is otherwise stipulated, the extrajudicial expenses required by the payment shall be for the ____. With regard to judicial costs, the ___ shall govern.

Answer 35

account of the Debtor, Rules of Court

Question 36

The extrajudicial expenses are by default for the account of the Debtor since ____

Answer 36

once a payment is made and the obligation is extinguished, the Debtor is primarily benefited

Question 37

Judicial costs shall be paid by the ___. The court may, however, for special reasons, adjudge that _____ shall pay the costs or that the same be ___ as may be equitable. No costs are allowed against the Govt. unless ____

Answer 37

losing party, either party, divided, otherwise provided by law

Question 38

Art. 1248: Unless there is an express stipulation to that effect, the Creditor cannot be compelled ____ to receive the prestations in which the obligation consists. Neither may the Debtor be required to make ___ payments. However, when the debt is_____, the Creditor may demand and the debtor may effect the payment of the former without waiting for the liquidation of the latter.

Answer 38

partially, partial, in part liquidated and in part unliquidated. (This is only where only one creditor and one debtor)

Question 39

Art. 1249: The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the ______. The delivery of ______, or ______ or _____ shall produce the effect of payment only when _____, or when ______. In the meantime, the action derived from the original obligation shall be held in ____

Answer 39

currency which is the legal tender in the Philippines, promissory notes payable to order, bills of exchange, other mercantile documents, they have been cashed, when through the fault of the Creditor, they have been impaired, abbeyance

Question 40

Art. 1250: In case of an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the time of the _____ of the obligation shall be the basis of payment, unless _____

Answer 40

establishment, there is an agreement to the contrary

Question 41

Art. 1251: Payment shall be made in the place designated in the obligation. There being no express stipulation and if the undertaking is to deliver a determinate thing, the payment shall be made wherever the ____. In any other case the place of payment shall be the ____. If the Debtor changes his ____ in ____ or after he has ____, the additional expenses shall be borne by ___. These provisions are without prejudice to venue under the Rules of Court

Answer 41

thing might be at the moment the obligation was constituted, domicile of the Debtor, domicile, bad faith, incurred in delay, him