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    Article 1279 (4) - 1280

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    Jay Carlo Bagayas
    1) Legal compensation requires that two debts be liquidated and demandable, meaning the amounts owed are clearly established and currently due. 2) There can be no legal compensation if a third party has commenced a legal controversy or retention over one of the debts. 3) An exception is that a guarantor can claim compensation for any amount their principal debtor is owed by the creditor, as an offset against their own guarantor liability.

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    Article 1279 (4) - 1280

    Uploaded by

    Jay Carlo Bagayas
    341 views1 page
    1) Legal compensation requires that two debts be liquidated and demandable, meaning the amounts owed are clearly established and currently due. 2) There can be no legal compensation if a third party has commenced a legal controversy or retention over one of the debts. 3) An exception is that a guarantor can claim compensation for any amount their principal debtor is owed by the creditor, as an offset against their own guarantor liability.

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    Article 1279(4)-1280

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    1) Legal compensation requires that two debts be liquidated and demandable, meaning the amounts owed are clearly established and currently due. 2) There can be no legal compensation if a third party has commenced a legal controversy or retention over one of the debts. 3) An exception is that a guarantor can claim compensation for any amount their principal debtor is owed by the creditor, as an offset against their own guarantor liability.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    341 views1 page

    Article 1279 (4) - 1280

    Uploaded by

    Jay Carlo Bagayas
    1) Legal compensation requires that two debts be liquidated and demandable, meaning the amounts owed are clearly established and currently due. 2) There can be no legal compensation if a third party has commenced a legal controversy or retention over one of the debts. 3) An exception is that a guarantor can claim compensation for any amount their principal debtor is owed by the creditor, as an offset against their own guarantor liability.

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    Article 1279.

    In order that compensation may consequence of compensation carries with it


    be proper, it is necessary: the accessory obligations such as guaranty.
    (4) That they be liquidated and demandable; Examples:
    (5) That over neither of them there be any (1) A owes B P500,000. C is the guarantor of A.
    retention or controversy, commenced by third B owes A P100,000. When B sues A and A
    persons and communicated in due time to the cannot pay, for how much will C be liable?
    debtor. Ans: C will be liable for only P400,000, because
    Requisites of Legal Compensation he can set up the P100,000 credit of A as the
    4. The two debts are liquidated, basis for partial compensation.
    Example:
    A owes B P10,000. B owes A the share of the (2) A owes B P500,000. C is the guarantor of A.
    latter in a business the amount of which is still B owes C P500,000. When B sues A for the
    to be ascertained. P500,000, may A successfully put up the defense
    Compensation will not take place as the debt of of compensation in that, after all, his creditor
    B is not liquidated. If part of the debt of B has (B) owes C the same amount?
    been liquidated, compensation takes place with Ans: There can be no compensation here
    respect to that part without waiting for the because in the obligation which C guaranteed
    liquidation of the rest. for A, C is not bound in his own right. Neither is
    5. No retention or controversy has been A the creditor of B.
    commenced by a third person.
    Example:
    A owes B P100,000, and B owes A P100,000, but
    A’s credit of P100,000 has been garnished by C
    who claims to be an unpaid creditor of A. B has
    been duly notified of the controversy.
    There can be NO compensation here. Any
    possible compensation is in the meantime
    suspended. If C wins his claim, there can be no
    compensation; if he loses, the controversy is
    resolved, and compensation can take place.
    Article 1280. Notwithstanding the provisions
    of the preceding article, the guarantor may set
    up compensation as regards what the creditor
    may owe the principal debtor.
    Compensation benefits guarantor.
    This article is an exception to the general rule
    that only the principal debtor can set up against
    his creditor what the latter owes him.
    Although the guarantor is only subsidiarily, not
    principally bound, he is given the right to set up
    compensation. The reason is that the
    extinguishment of the principal obligation as a

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