Obligations - Finals Flashcards
Obligations are extinguished in?
- By payment or performance;
- By loss of the thing due;
- By the condonation or remission of the debt;
- By the confusion or merger of the rights of creditor and
debtor; - By compensation;
- By novation.
Other causes of extinguishment of obligations:
- annulment
- rescission
- fulfillment of resolutory condition 4. prescription
Other causes:
1. Death of a party for obligations requiring personal service
2. Mutual desistance or withdrawal
3. Arrival of resolutory period
4. Compromise
5. Impossibility of fulfillment
6. Happening of a fortuitous event
Payment or Performance
____ means not only the delivery of money but also the
______, in any other manner, of an obligation.
Payment
Used synonymously with performance
Payment does not only refer to the delivery of money, may also
include:
● Giving of a thing
● Doing of an act
● Not doing of act
DEBT - can mean any of the following obligation:
● Delivery of money
● Giving of a thing
● Doing of an act
● Not doing of ac
General rule: Payment or Performance
partial or irregular performance will not extinguish
an obligation
› Exception to Article 1233.
Rationale: creditor benefited
Requisites:
Substantial compliance - 50%
Obligor is in good faith - always presumed
oblige accepts the performance, knowing its
incompleteness or irregularity, and without expressing any protest
or objection, the obligation is?
deemed fully complied with.
prevents someone from
arguing about something previously agreed upon or by law
Founded on the principle of estoppel
- Requisites:
● Performance by the debtor is incomplete or irregular
● Creditor accepts without any protest or objection to the
incompleteness or irregularity
creditor is not bound to accept payment or performance by a
______ who has no interest in the fulfillment of the obligation,
unless?
third person, there is a stipulation to the contrary.
As a general rule, From whom can a creditor accept payment?
Debtor
Any person with interest in the fulfillment of the
obligation, i.e. guarantor
A 3rd person without interest in the obligation but there
was a stipulation that he can make the payment.
Effect of payment by a 3rd person:
- Without the knowledge or against the will of the debtor
- 3rd person can recover from the debtor only insofar as
the latter was benefitted
Effect of payment by a 3rd person:
- With knowledge of the debtor
3rd person shall have the right to be reimbursed and
subrogation (to recover the amount he has paid)
3rd person shall acquire all the rights of the creditor
mortgage, guaranty, penalt
Change of creditor, Payor can exercise the rights which the creditor had
subrogation
Payor merely acquires the bare right to be refunded
REIMBURSEMENT
Nobody should be compelled to accept the generosity of
another
debt of gratitude
not subject to any claim or
encumbrance or lien
free disposal of the thing due
not incapacitated to enter into contracts (minor, insane, etc.)
capacity to alienate
To whom should payment be made?
● Person in whose favor the obligation was made -
creditor/obligee
● His successor in interest - heir, assignee (pinagsalinan ng
karapatan)
● Any authorized person - authorized by the creditor or by law
(guardianship)
4 special forms of payment under the Civil Code:
● Dation in payment
● Application of payment
● Payment by cession
● Tender of payment of consignation
- conveyance of ownership of a thing as an accepted equivalent of performance
- It is a special form of payment because an existing monetary debt
is not paid in money but by alienation of property
DATION IN PAYMENT
Obligation to deliver a generic or indeterminate thing
principle of equity
not something of superior quality
in the same way si debtor hindi naman pwede magbigay ng inferior
quality.
Rule of medium quality
who shoulder extrajudicial expense?
Why the debtor? - when payment is made, his/her obligation is
extinguished, he/she is the one primarily benefited.
Also, Parties may stipulate on who will bear the costs.
cannot be compelled to accept partial fulfillment
Creditor
duty to comply wholly BUT cannot be required to make partial payment
Debtor
currency offered by the debtor in the right
amount, the creditor must accept in payment of the debt
Legal tender
all notes and coins issued by the
Central Bank of the Philippines
Legal tender in the Philippines
sharp sudden increase of money or credit or both without a
corresponding increase in business transaction; value of money drops
Inflation
reduction in volume and circulation of the available money
or credit - decline in price level
Deflation
Place of payment:
●Place agreed upon
● Place where the determinate thing was located at the time of
the contract (Geely, Fairview 2014)
● Debtor’s habitual residence - if there is no agreement
○ Creditor bears the expenses going to the place
BUT
○ If debtor is in delay or changed residence in bad
faith, he bears the expenses
designation of debt to which payment is being made
Application of payments
Requisites:
- 1 debtor and 1 creditor
- 2 or more debts (maraming utang si debtor)
- Debts are of the same kind
- Debts to which payment made by the debtor has been applied
must be due
- Payment made was not sufficient to cover all debts
assignment or abandonment of all properties
of the debtor to be sold by creditors and apply the proceeds to the
payment of debts
Payment by cession
- Requisites:
~ 2 or more creditors (1 debtor, maraming creditor)
~ Debtor must be partially insolvent
~ Assignment must involve all properties of the debtor
Cession must be accepted by the creditors
act of the debtor of offering to the creditor the thing or amount due:
Tender of payment
act of depositing the thing or amount due with the proper
court when the creditor does not desire or cannot receive it
Consignation
payment by the debtor and unjustifiable refusal of
creditor
Tender of Payments and Consignation
Bakit ninonotify pa yung interest parties sa Tender of Payments and Consignation?
Rationale: to give the creditor a chance to reflect on his
refusal because the expenses of consignation will be
charged against him
obligation which consists in the delivery of a determinate thing shall
be extinguished if it should be lost or destroyed without the fault of the
debtor, and before he has incurred in delay.
Loss of the things due
impossibility of fulfilment in determinate or specific thing
Loss of determinate thing
When is an obligation NOT extinguished even if the thing due is lost?
● When provided so by law
● Obligation requires the assumption of risks
● Obligation to deliver arises from a crime
loss to extinguish an obligation to give
● Obligation is to delivers specific or determinate thing
● Loss occurred without fault of the debtor
● Debtor is not guilty of delay
Kinds of impossibility:
purely personal obligations
Physical impossibility
Kinds of impossibility:
implied in every contract
Legal impossibility
gratuitous abandonment by
the creditor of his rights against the debtor
CONDONATION OR REMISSION
OF THE DEBT
As to date of effectivity
- during the lifetime of the donor
Inter vivos
As to date of effectivity
- upon the death of the donor
Mortis causa
- document is needed to enforce the
obligation, if the creditor surrenders or voluntarily delivers it to the
debtor, it can be inferred that he is renouncing his right
Implied/tacit remission
Extent of remission
- only the share of the debtor in possession of the document
Joint
Extent of remission
- total obligation
Solidary
meeting in 1 person of the qualities
of a debtor and creditor with respect to the same obligation
Confusion or merger
when two persons, in their own
right, are creditors and debtors of each other.
Compensation
total or partial extinction of an obligation through
the creation of a new one which substitutes it
Novation
KINDS OF PERSONAL NOVATION
o Substitution
- Expromision
- Delegacion
o Subrogation
KINDS OF PERSONAL NOVATION
- person of the debtor is substituted
Substitution
3rd person assumes the original debtor’s
liability on his own initiative and without the knowledge of the
debtor; requires the consent of the creditor
Expromision
debtor delegates a 3rd person to take his place
with the consent of the creditor and the 3rd person
Delegacion
- 3rd person is subrogated to the rights of the creditor
Subrogation
