Chapter 4 - Section 1 – Payment or Performance Flashcards
Not only the delivery of money but also the giving of a thing (other than money), the doing of an act, or not doing of an act.
Payment
Thing or service has been completely delivered or rendered.
Integrity of prestation
The very prestation must be delivered or performed.
Identity of the prestation
Recovery is allowed in case of ___________ ___________ __ ____ _____.
substantial performance in good faith.
When the important part of the contract has been performed and only a small or minor part has not been carried out.
Substantial performance
Persons from whom the creditor must accept payment.
The debtor;
Any person who has an interest in the obligation (like a guarantor); or
A third person who has no interest in the obligation
Effect of payment by a third person - If made without the knowledge or against the will of the debtor
Recover from the debtor only insofar as the payment has been beneficial to the latter. The recovery is only up to the extent of the debt at the time of payment.
Effect of payment by a third person - If made with the knowledge of the debtor
The payer have the rights of reimbursement and subrogation to recover what he has paid and to acquire all the rights of the creditor.
The person who pays for the debtor is put into the shoes of the creditor.
Subrogation
The third person entitled by reason of payment has merely the bare right to be refunded to the extent without the right to guarantees and securities of the original obligation.
Reimbursement
The thing to be delivered must not be subject to any claim or lien or encumbrance of a third person.
Free disposal of thing due
The person is not incapacitated to enter into contracts and for that matter to make a disposition of the thing due.
Capacity to alienate
Person to whom payment shall be made.
The creditor or obligee (person in whose favor obligation has been constituted);
His successor in interest (like an heir or assignee); or
Any person authorized to receive it.
Does not extinguished the obligations as to the creditor.
Payment to a Wrong Party
Effect of payment to an incapacitated person.
Not valid unless such incapacitated person kept the thing paid or delivered, or was benefited by the payment.
Effect of payment to a third person.
Not valid except insofar as it has redounded to the benefit of the creditor.
The debtor is relieved from proving benefit to the creditor in case of:
Subrogation of the payer in the creditor’s rights;
Ratification by the creditor; or
Estoppel on the part of the creditor.
Preliminary remedy
Attachment
It is a judicial process by virtue of which a person is generally ordered to refrain from doing something.
Injunction
The proceeding by which a debtor’s creditor is subjected to the payment of his own debt to another.
Garnishment
Is the conveyance of ownership of a thing as an accepted equivalent of performance.
Dation in payment (adjudication or dacion en pago)
Rule of the medium quality
Creditor cannot demand a thing of Superior Quality
Debtor deliver a thing of Inferior Quality
When partial performance allowed
Express stipulation to that effect
Debt is in part liquidated and in part unliquidated
When the different prestations are subject to different terms or conditions
Currency which if offered by the debtor in the right amount, the creditor must accept in payment of a debt in money.
Legal tender
Payment by means of instruments of credits - Right of creditor to refuse or accept
Promissory notes, checks, bills of exchange and other commercial documents are not legal tender and the creditor cannot be compelled to accept them.
Payment by means of instruments of credits - Effect of an obligation
Payment by means of mercantile documents does not extinguish the obligation:
until they have been cashed;
unless they have been impaired through the fault of the creditor.
A sharp sudden increase of money or credit or both ; causes a drop in the value of money, resulting in the rise of the general price level.
Inflation
Reduction in volume and circulation of the available money or credit, resulting in a decline of the general price level
Deflation
Place where obligation shall be paid
Stipulation - designated place
Stipulation - specific thing - where the thing was
No stipulation - generic thing - domicile
The place where a court suit or action must be filed or instituted.
Venue
The place of a person’s habitual residence; the place where he has his true fixed permanent home and to which place he, whenever he is absent, has the intention of returning.
Domicile
Only an element of domicile. It simply requires bodily presence as an inhabitant in a given place.
Residence
The designation of the debt to which should be applied the payment made by debtor who has various debts of the same kind in favor of one and the same creditor
Application of Payments
More Onerous / Burdensome
Interest-bearing debt
Debt as a sole debtor
Debts secured by a mortgage
One with a higher interest rate
Obligation with a penalty clause
The assignment of all the properties of the debtor for the benefit of his creditors in order that the latter may sell the same and apply the proceeds thereof to the satisfaction of their credits.
Payment by Cession
The act on the part of the debtor offering to the creditor the thing or amount due.
Tender of Payment
The act of depositing the thing or amount owed with the appropriate court.
Consignation
(Tender of Payment and Consignation) Requisites:
Absent
Incapacitated
Refuses to give a receipt
Two or more person claims
Title of the Obligation is lost
