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Module 4

The document discusses various concepts relating to the extinguishment of obligations under Philippine contract law, including partial performance, condonation or remission of debt, confusion or merger, compensation, novation, and related issues. It provides definitions and examples of these legal concepts, notes the relevant articles in the Civil Code, and poses problems testing the application of the rules regarding when an obligation is extinguished or a debtor is released from liability.

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72 views

Module 4

The document discusses various concepts relating to the extinguishment of obligations under Philippine contract law, including partial performance, condonation or remission of debt, confusion or merger, compensation, novation, and related issues. It provides definitions and examples of these legal concepts, notes the relevant articles in the Civil Code, and poses problems testing the application of the rules regarding when an obligation is extinguished or a debtor is released from liability.

Uploaded by

AEKO
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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DISCUSSION

1. When is partial performance of an obligation allowed?


only if, the creditor deliberately retains the benefit of the performance.

2. What must a debtor do to be released from his obligation if the creditor refuses to
accept payment without any justifiable reason?
The debtor will be relieved from liability by consigning the item or the outstanding
amount if the creditor to whom the payment has been made refuses to accept it
without good reason.

3. Will partial loss of the specific thing to be delivered extinguish the obligation?
Explain.
Partial loss is the same as having trouble fulfilling your duties. In the event of a partial
loss, the court will have the power to decide whether, in the event of a dispute
between the parties, it is ever so significant in respect to the whole as to terminate the
obligation.

4. When is the condonation or remission of debt considered in officious? What is the


remedy of the party adversely affected thereby?
If a creditor offers an excessive or inoffensively-worded condonation or remission, it
may be completely withdrawn or scaled back, depending on how completely or
partially inoffensively it was offered.

5. What is the rationale behind confusion or merger as a mode of extinguishing an


obligation?
Because it is impossible for someone to enforce a duty when they are also their own
creditor, the law views confusion or merger as a way of putting an end to obligations.

6. Give the effect of merger when it takes place:


a. In the person of the principal debtor or creditor.
The obligation is terminated by a merger in the person of the major debtor or
creditor. So, in conformity with the tenet that the accessory follows the principal,
the accessory responsibility of guaranty is also discharged.

b. In the person of the guarantor of the principal obligation.


The burden of the major commitment is not transferred to the accessory
obligation. Hence, merging, which occurs in the guarantor's person and
extinguishes the guaranty, does not affect the principal obligation.

7. In what way is compensation similar to payments?


the capacity of applications of payments to compensate.
8. May there be compensation although the things due are not consumable? Explain.
In this instance, compensation will be provided even though the items owing are of the
same kind and are not consumable. Their caliber is governed by Article 1246.

9. When may compensation take place when only on the debts is due? When two
people who can stand on their own two feet be each other's creditors and debtors,
compensation is required.
a method of eradicating those debts owed by individuals who are both creditors and
debtors of one another in the same amount.

10. In novation, are accessory obligations necessarily extinguished? Explain The


accessory obligations only continue to exist as much as they continue to benefit
third parties who have not given their assent after the principal obligation has been
terminated due to the novation.

PROBLEMS
Explain or state briefly the rule or reason for your answer.
1. D (debtor) owes C (creditor) P10,000.00 with G as guarantor. On the due date of the
obligation, T, a third person, offered to pay the obligation of D. Can C legally refuse
to accept the payment? How about an offer of payment from G?

Yes, C has the legal right to refuse the payment according to Article 1236. The creditor
is not obligated to accept payment or performance from a third party who has no
interest in the obligation's fulfillment. And G's payment can be accepted by C. As G
is the guarantor, he or she has an interest in the obligation.

2. M (maker) issued a promissory note for P 10,000.00 in favor of P (payee) who lost
the note which was found by T who demands payment from M. M did not know that
the note was lost by P. Is M justified in paying T?

Yes, M is justified. According to Article 1242, Payment made in good faith to any
person in possession of the credit shall release the debtor.

3. D owes C P10,000.00 which was paid by T who demand reimbursement from D


a. When is D liable to T?

D is obligated to T for reimbursement when T's payment is made. D's knowledge


and consent are required. Article 1237 states that in this case, T would be
entitled to not only full payment if D approved the payment. Not only does
reimbursement apply, but so does subrogation.

b. When is D not liable to T?


When T makes a payment out of generosity rather than reimbursement, D is not obligated
to T for reimbursement. Article 1238 defines a payment that is not intended to be
reimbursed by the debtor as a donation. In this case, D is not liable to T and his obligation
is extinguished.

c. When is D liable for less than P 10,000.00 to T?


According to Article 1236, D is liable to T for less than P10,000 if the payment was
made without the debtor's knowledge or against his will. In this case, T, as the payer,
can only recover the payment that has benefited D
d. May D be liable to T for P12,000.00 if that was the amount paid by him to C?

According to Article 1236, If the payment was made without the creditor's
knowledge, the third party can only reimburse the amount that was beneficial to him;
in this case, T can only reimburse P10,000 from D, while T can recover the P2,000
excess payment from C.

4. D owes C P 10,000.00 Without the knowledge of C, D in good faith paid to T his


obligation to C. Is D required by law to prove that the payment has been received by
C in order to released from liability?

According to Article 1241, D is no longer required to prove the payment from C


because he has already benefited from the payment. It is also not required when T
has already acquired C's rights against D, or when C has already ratified or later
consented to T's payment.

5. D owes C P 10,000.00 in payment for which C accepts a check from D. On the


ground that a check is not legal tender, C later insists that D pay him in cash, Is D
justified in rejecting this demand of C?

Yes, according to Article 1249, the creditor has the option of accepting the check
without it having the effect of payment. In the meantime, the original obligation's
demandability is suspended. It was further mentioned that even though C accepts
the check, there is still no payment considered, so D is still obligated. C, on the
other hand, cannot demand payment of the obligation until the check has been
honored by the bank.

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