Obligations and Contracts1204 To 1233

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1204.

The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the things
which are alternatively the object of the obligation have been lost, or the compliance of
the obligation has become impossible. The indemnity shall be fixed taking as a basis the value of
the last thing which disappeared, or that of the service which last became impossible. Damages other
than the value of the last thing or service may also be awarded.
 If the impossibility of all the objects of the alternative obligation is caused by the debtor, the creditor
is entitled to damages.
 If such impossibility is caused by a fortuitous event, the obligation is extinguished and the debtor is
released from responsibility, unless the contrary is stipulated by the parties.
 The creditor cannot claim for damages if the debtor can still perform the remaining prestations.
 The damages that may be recovered is based on the last thing which disappeared or the service
which became impossible. This last one is converted into a simple obligation.

1205. When the choice has been expressly given to the creditor, the obligation shall cease to be
alternative from the day when the selection has been communicated to the debtor. Until then the responsibility
of the debtor shall be governed by the following rules:
A. only one thing lost – fortuitous event – creditor chooses from the remainder – debtor delivers the choice
to creditor;
B. only one remains – debtor delivers the same to the creditor;
C. only one thing lost – fault of the debtor
1.creditor may choose any one of the remainders;
2.creditor may choose the price or value of the one which was lost;
3.may choose 1 or 2 plus damages
D. all things lost – fault of the debtor – creditor may choose the price of ANYONE of the
things, with damages if warranted.

The same rules shall be applied to obligations to do or not to do in case one, some or all of the
prestations should become impossible.
This article applies only when the right of choice has been expressly granted to the creditor.

1206. When only one prestation has been agreed upon, but the obligor may render another in substitution, the
obligation is called facultative. The loss or deterioration of the thing intended as a substitute, through the
negligence of the obligor, does not render him liable. But once the substitution has been made, the obligor is liable
for the loss of the substitute on account of his delay, negligence or fraud.
If loss or deterioration happened before substitution is made, obligor is not liable; after substitution is
communicated, heis liable for loss (through delay, negligence or fraud)

Section 4 – Joint and Solidary Obligations

1207. The concurrence of two or more creditors or of two or more debtors in one and the same
obligation does not imply that each one of the former has a right to demand, or that each one of the latter is
bound to render, entire compliance with the prestation. There is a solidary liability only when the
obligation expressly so states, or when the law or the nature of the obligation requires solidarity.
* In case of concurrence of two or more creditors or two or more debtors in one obligation, the presumption
is that the obligation is joint, and not solidary.
INDIVIDUAL OBLIGATION – one debtor and one creditor
COLLECTIVE OBLIGATION – two or more debtors and two or more creditors
1. JOINT – entire obligation is to be paid or performed proportionately by the debtors;
2. SOLIDARY –each one of the debtors are obliged to pay the entire obligation, each one of the creditors
has the right to demand from any of the debtors, the fulfillment of the entire obligation;
A. Passive Solidarity – solidarity on the part of the DEBTORS
B. Active Solidarity – solidarity on the part of the CREDITORS.
SOLIDARITY SHOULD BE EXPRESSED – law, stipulation, nature of obligation.
When the obligation is ambiguous, it must be considered as joint obligation.

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CONSEQUENCES OF SOLIDARITY:
1. Passive Solidarity – full payment made by anyone of the solidary debtors extinguishes the
obligation. The one who paid can claim reimbursement from his co-debtors as regards their
corresponding shares in the obligation.
A, B, & C are solidary debtors of D in the sum of P900.D can demand payment of the entire
obligation when it becomes due, from any one of the debtors or from all of them at the same time. If
C paid the whole P900 to D, he may claim reimbursement from A and B.
2. Active Solidarity – full payment to any of the creditors extinguishes the obligation. The creditor who
received the entire amount will be liable to pay the corresponding shares of his co-creditors in
accordance with their internal agreement. Garfield owes the sum of P40,000 to Mickey, Minnie,
Donald, and Pluto, who are solidary creditors. Garfield can pay anyone of them. If Mickey received
the P40,000, he is liable to pay the corresponding shares of his co-creditors.
3. MIXED SOLIDARITY
a . S o l i d a r y D e b t o r s , J o i n t C r e d i t o r s P9,000.00 – total debt
4. D e b t o r s ( S o l i d a r y ) C r e d i t o r s ( J o i n
t )
Aida pays P4,500.00 John = P 4,500.00Lorna pays P4,500.00 Marsha P 4,500.00Feb . J o i n t
D e b t o r s , S o l i d a r y C r e d i t o r s P 9,000.00 – total debt
5. D e b t o r s ( J o i n t ) C r e d i t o r s ( S o l i d a r
y ) Aida (P 3,000.00) John (can claim from debtors)Lorna (P 3,000.00) Marsha (-same-)Fe (P 3,0
00.00)

1208. If from the law, or the nature or the wording of the obligations to which the preceding article
refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many shares as
there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules
of Court governing the multiplicity of suits.
This provision speaks of JOINT DIVISIBLE OBLIGATION.
When there is a concurrence of several creditors or of several debtors in one and in the same
obligation, there is a presumption that the obligation is joint
. Each of the creditors shall be entitled to demand only the payment of his proportionate share of the
credit.
Each of the debtors may be compelled to pay only his proportionate share of the debt.
 The credits or debts shall be considered distinct from one another.
CONSEQUENCES OF JOINT OBLIGATION:
1. Each debtor – liable for a proportionate part of the entire debt; Thales, Socrates, Plato, &
Aristotle owe P100 to Bruce Lee= 4 debtors and 1 creditor Each of them owes Bruce Lee P25Bruce Lee
cannot collect the entire P100 from any one of them.
2. Each creditor – entitled to a proportionate part of the credit; Piggy owes P100 to Froggy and
Fishy= 1 debtor and 2 creditors Froggy can only collect 50 from Piggy, Same with Fishy
3. Demand made by one creditor upon one debtor produces the effects of default only as
between them, but not with respect to the others; Bubbles demanded payment from Buttercup;
Buttercup was in default. This does not mean that the others are in default too because Bubbles did not
demand from them.
4. The interruption of prescription caused by the demand made by one creditor upon one
debtor will not benefit the co- creditors; Wittgenstein extended the period in which Tarski should have
paid his debt to him. This does not mean that the same extension applies to Tarski's debt to Davidson.
5. The insolvency of one debtor will not increase the liability of his co-debtors, nor will it
allow a creditor to demand anything from the co-creditors. If Husserl and Merleau-Ponty are debtors of
Sartre for P1,000,000.00 and Husserl becomes insolvent, the liability of Merleau-Ponty will only be
P500,000.00 representing his proportional share of ½ in the whole obligation.
1209. If the division is impossible, the right of the creditors may be prejudiced only by their
collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the latter
should be insolvent, the others shall not be liable for his share.
JOINT INDIVISIBLE OBLIGATION – an obligation where solidarity is not provided and the prestation or
object is not susceptible of division; its fulfillment requires the concurrence of all debtors, while doing each

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one’s parts. Batman and Robin jointly obliged themselves to deliver a brand new Toyota Fortuner worth
P1,500,000.00 to Superman. The object, a vehicle, is indivisible. They must deliver the thing jointly. In case
of breach, the obligation is converted into monetary obligation for indemnity for damages. Batman and
Robin will be liable only for P 750,000.00 each.
The act of one is not binding (others must concur)

1210. The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does
solidarity of itself imply indivisibility.
Solidarity is expressed in the stipulations of the party, law governing the obligation, or the nature of the
obligation.
INDIVISIBLE OBLIGATION – an obligation where the prestation or object to be delivered cannot be
performed by parts without altering its essence or substance.
BASIS
INDIVISIBILITY
SOLIDARITY
1 . N a t u r e R e f e r s t o t h e Prestation
o f t h e c o n t r a c t R e f e r s t o t h e tie existing between parties of the obligation
(who is liable)
2. Number of subjects / parties Does
not require plurality of partiesRequires plurality of parties
3. Effect of breach of obligation Obligation is converted into monetary obligation for indemnity for damages
–each debtor is liable only for his part in the indemnity. The liability, even if converted into indemnity for
damages, remains solidary.

1211. Solidarity may exist although the creditors and the debtors may not be bound in the same manner and by the
same periods and conditions.
The solidarity of the debtors is not affected even if different terms and conditions are made applicable to
them.
Enforcement of the terms and conditions may be made at different times. The obligations which have
matured can been forced while those still undue will have to be awaited. Enforcement can be made against
any one of the solidary debtors although it can happen that a particular obligation chargeable to a particular
debtor is not yet due. He will be answerable for all the prestations which fall due although chargeable to the
other co-debtors. Sad Face, Happy, and Fanny got a loan of P150 from Smiley. They signed a promissory
note solidarily binding themselves to pay Smiley under the following terms: Sad Face will pay P50 with 3%
on December 30, 2006Happy will pay P50 with 4% on December 30, 2007Fanny will pay P50 with 5% on
December 30, 2008On December 31, 2006, Smiley can collect his P50 with 3% from any one of the
debtors, but not the whole P150 because it is not yet entirely due. The maturity of the other amounts should
still be awaited. If maturity comes, Smiley can collect from any of the debtors, because they are expressly
solidary in liabilities, and not affected by the secondary stipulations.

1212. Each one of the solidary creditors may do whatever may be useful to the others, but not anything which
maybe prejudicial to the latter.
Every solidary creditor is benefited by the useful acts of any one of them.
If a solidary creditor performs an act which is not fair to his co-creditors, the act may have valid legal
effects or the obligation of the debtor due to them may be extinguished, but the performing creditor shall be
liable to his co-creditors.
Question
: May solidary creditors perform an act that is beneficial to others?

1213. A solidary creditor cannot assign his rights without the consent of the others.
Assign – transfer of right
The assignee does not become a solidary creditor, and any payment made upon him by the debtor does
not extinguish the obligation. He is considered a STRANGER, and his acts are not binding to the solidarity.
DOCTRINE OF MUTUAL AGENCY - In solidary obligations, the act of one is act of the others.
Exceptions to the doctrine:

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1. Art. 1212 – a creditor may not perform an act prejudicial to other creditors
2. Art. 1213 – a creditor cannot transfer his right without consent

1214. The debtor may pay any one of the solidary creditors; but if any demand, judicial or
extrajudicial, has been made by one of them, payment should be made to him.
The debtor can pay any one of the solidary creditors. Such payment when accepted by any of the solidary
creditors will extinguish the obligation.
To avoid confusion on the payment of the obligation, the debtor is required to ay only to the demanding
creditor and that payment is sufficient to effect the extinguishment of the obligation.
In case two or more demands made by the other creditors, the first demand must be given priority.

1215. Novation, compensation, confusion or remission of the debt, made by any of the solidary
creditors or with any of the solidary debtors, shall extinguish the obligation, without prejudice to
the provisions of Article 1219.The creditor who may have executed any of these acts, as well as he
who collects the debt, shall be liable to the others for the share in the obligation corresponding to them.
NOVATION – obligations are modified by:
1. Changing their object or principal conditions;
2. Substituting the person of the debtor; and
3 .Subrogating (placing) a third person in the rights of the creditor. [Art.
1291]COMPENSATION – takes place when two persons, in their own right, become creditors and debtors
of each other − the amount of one is covered by the amount of the other Erap borrowed P100 from
Fernando. Fernando borrowed P75 from Erap. Erap’s obligation to Fernando is now P25 only, because the
original obligation was offset by Fernando’s supposed-to-be obligation to Erap.
CONFUSION – takes place when the characters of creditor and debtor are merged in the same person.
Tito pays his debt to Vic with a check payable to “cash”. Vic paid his debt to Joey with the same check.
Joey paid his debt to Tito, with the same check Tito issued to Vic. Tito becomes paid by his own check. He
becomes the debtor and the creditor of himself at the same time.
REMISSION – the gratuitous abandonment by the creditor of his right; acceptance of the obligor is
necessary.

These 4 modes of extinguishing obligations are acts prejudicial to the other solidary co-creditors because
these have the effect of extinguishing the debt or obligation which is due to all of them.

The only recourse of the co-creditors is to let the one who executed any of those acts be liable for the
shares corresponding to all his co-creditors (in their internal agreement).

1216. The creditor may proceed against any one of the solidary debtors or some or all of them
simultaneously. The demand made against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has not been fully collected.
When there is passive solidarity, the creditor can proceed against:
Any of the solidary debtors;
Some of the solidary debtors;
All of the solidary debtors, simultaneously. Extrajudicial demands - first demand shall not prevent
subsequent demands on the other co-debtors, if co-debtor first to have been required to fulfill obligation did
not act on it.

1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more
solidary debtors offer to pay, the creditor may choose which offer to accept. He who made the payment may
claim from his co-debtors only the share which corresponds to each, with the interest for the payment already
made. If the payment is made before the debt is due, no interest for the intervening period may be demanded. When
one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each.
Payment – consists in the delivery of the thing or the rendition (rendering) of the service which is the object
of the obligation.
Interest – compensation for the use of borrowed money
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Partial payment – the solidary debtor who made the partial payment is entitles to be reimbursed only for
such amount of money which he had paid and which exceeds his own share in the obligation. If one of the
debtors is insolvent and could not pay his share in the obligation, all solidary debtors including the paying
debtor shall share proportionately in the settlement of the corresponding share of the insolvent debtor. [In
short, his co-debtors will save his ass.]

1218. Payment by a solidary debtor shall not entitle him to reimbursement from his co-debtors
if such payment is made after the obligation has prescribed or become illegal.
No reimbursement if:
1.Obligation PRESCRIBES
The creditor did not make any demand for more than 10 years.
2.Obligation becomes ILLEGAL
Law has been passed, making such prestation illegal.

1219. The remission made by the creditor of the share which affects one of the solidary debtors
does not release the latter from his responsibility towards the co-debtors, in case the debt had been
totally paid by anyone of them before the remission was effected.
Atty De Chavez: Ito ay provision sa tanga... (siyempre, 'pag nagbayad na, wala nang obligation, wala na
ding ire-remit...)
Any belated (delayed) remission by the creditor of the share of any of the debtor has no effect on the
internal relationship of the co-debtors.
Payment before remission
: A, B, and C solidarily owe D P1,500.00. B paid the entire obligation. After which, D remitted the shareof C.
B can collect P500.00 each from A and C even if the share of C in the obligation had been remitted.
Remission before payment
: A, B, and C solidarily owe D P1,500.00. D remitted the share of C. Thereafter, B paid the entireobligation.
B can collect P500.00 from A but not from C. However, B may ask D to give back P500, which is the
supposed-to-beshare of C.
After the prior payment of the entire obligation, there is nothing to remit because the obligation had been
extinguished.

1220. The remission of the whole obligation, obtained by one of the solidary debtors, does not
entitle him to reimbursement from his co-debtors.
There is nothing to be reimbursed because he did not spend any money, the remission being a gratuitous
act.

1221. If the thing has been lost or if the prestation has become impossible without the fault of the
solidary debtors, the obligation shall be extinguished. If there was fault on the part of any one of
them, all shall be responsible to the creditor, for the price and the payment of damages and interest,
without prejudice to their action against the guilty or negligent debtor. If through a fortuitous event, the thing
is lost or the performance has become impossible after one of the solidary debtors has incurred in
delay through the judicial or extrajudicial demand upon him by the creditor, the provisions of the preceding
paragraph shall apply.
Loss of the thing or impossibility of prestation –
1.NO FAULT – solidary debtors – obligation is extinguished
2.FAULT of any one of them – all are liable because of their mutual agency
3.FORTUITOUS EVENT – delay on the part of the debtors – all will be liable
If the thing due was not lost, but there is merely a delay, fraud or negligence on the part of one of the
solidary debtors, all (including the innocent) debtors will share in the payment of the PRINCIPAL prestation.
The damages and interest imposed will be borne by the guilty debtor.
Obligation to deliver is converted into an obligation to pay indemnity when there us loss or impossibility of
performance.

1222. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of those which are personal to him, or pertain to his

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own share. With respect to those which personally belong to the others, he may avail himself thereof only as
regards that part of the debt for which the latter are responsible.
DEFENSES OF A SOLIDARY DEBTOR:
1. Defense arising from the nature of the obligation – such as payment, prescription,
remission, statute of frauds, presence of vices of consent, etc.
2. Defenses which are personal to him or which pertains to his own share alone – such as
minority, insanity and others purely personal to him.
3. Defenses personal to the other solidary creditors but only as regards that part of the debt
for which the other creditors are liable.

Section 5 – Divisible and Indivisible Obligations

1223. The divisibility or indivisibility of the things that are the object of obligations in which there is
only one debtor and only one creditor does not alter or modify the provisions of Chapter 2 of this
Title.
DIVISIBILITY – refers to the susceptibility of an obligation to be performed partially.
Obligation to deliver 100 sacks of rice or a particular type
INDIVISIBILITY – refers to the non-susceptibility of an obligation to partial performance.
Obligation to deliver a particular computer shelf a thing could be divided into parts and as divided, its
value is impaired disproportionately, that thing is INDIVISIBLE.

1224. A joint indivisible obligation gives rise to indemnity for damages from the time anyone of
the debtors does not comply with his undertaking. The debtors who may have been ready to
fulfill their promises shall not contribute to the indemnity beyond the corresponding portion of the price of
the thing or of the value of the service in which the obligation consists.
* Relate this provision to Articles 1165, 1208 and 1209.
JOINT INDIVISIBLE OBLIGATION – the object is indivisible but the liability of the parties is joint.
The unfulfilled undertaking (duty) is converted into a monetary obligation which is not divisible.
The guilty debtor is liable for damages.

1225. For the purposes of the preceding articles, obligations to give definite things and those which
are not susceptible of partial performance shall be deemed to be indivisible. When the obligation has for
its object the execution of a certain number of days of work, the accomplishment of work by
metrical units, or analogous things which by their nature are susceptible of partial performance, it
shall bedivisible. However, even though the object or service may be physically divisible, an
obligation is indivisible if so provided bylaw or intended by the parties. In obligations not to
do, divisibility or indivisibility shall be determined by the character of the prestation in each
particular case.
The following are considered INDIVISIBLE obligations:
1.Obligation to give definite things
2.Obligations which are not susceptible of partial performance
3.Even though the object or service may be physically divisible, it is indivisible if:
a. the law so provides
b. when the parties intended it to be indivisible.
The following obligations are deemed DIVISIBLE:
1.When the object of the obligation is the execution of a certain number of days of work
2.When the object of the obligation is the accomplishment of work measured in units
3.When the object of the obligation is susceptible of partial compliance
4.When the object of the obligation is such that the debtor is required to pay in installments
If the contract is divisible, and a part of it is illegal, the illegal part is void, and the rest shall be valid and
enforceable.
If the contract is indivisible, and a part of it is illegal, the entire contract is void.
Partial performance of an indivisible obligation is tantamount to non-performance.

Section 6 – Obligations with a Penal Clause

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1226. In obligations with a penal clause, the penalty shall substitute the indemnity for damages and
the payment of interests in case of noncompliance, if there is no stipulation to the contrary.
Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in
the fulfillment of the obligation. The penalty may be enforced only when it is demandable in accordance with
the provisions of this Code.
* An obligation with a penal clause may be defined as one to which an accessory undertaking is attached
for the purpose of insuring its performance by virtue of which the obligor is bound to pay a stipulated
indemnity or perform a stipulated prestation incase of breach.
Purposes:
1. Funcion coercitiva o de garantia – to insure the performance of the obligation
2. Funcion liquidatoria – to liquidate the amount of damages to be awarded to the injured party in case of
breach of the principal obligation; and
3. Funcion estrictamente penal – in certain exceptional cases, to punish the obligor in case of breach of the
principal obligation.
This is an accessory obligation attached to the principal obligation, which imposes an additional liability in
case of breach of the principal obligation.
It pushes the debtor to perform his obligation faithfully and without delay – within the period agreed upon,
or else, he suffers a fixed civil penalty without need of proving the damages of the other party.The penalty
imposable is a substitute for the indemnity for:
a . d a m a g e s
b . p a y m e n t o f i n t e r e s t i n c a s e o f b r e a c h o f o b l i g a t i o n -unless the contrary is stipulated!
EXCEPTIONS – additional damages may be recovered from the following acts:
If the debtor refuses to pay the penalty
If the debtor is guilty of fraud in the fulfillment of the obligation
If there is express stipulation that the other damages or interests are demandable to the penalty in the
penal clause

1227. The debtor cannot exempt himself from the performance of the obligation by paying the
penalty, save in the case where this right has been expressly reserved for him. Neither can the creditor demand
the fulfillment of the obligation and the satisfaction of the penalty at the same time, unless this right
has been clearly granted him. However, if after the creditor has decided to require the fulfillment of the
obligation, the performance thereof should become impossible without his fault, the penalty may
be enforced.
A debtor cannot evade from payment of his principal obligation by choosing to pay the penalty stipulated,
except when the debtor is EXPRESSLY granted with the right to substitute the penalty for the principal
obligation. – an obligation with penalty clause cannot be turned to facultative obligation unless expressly
stipulated in the contract.
The creditor cannot demand the stipulated fulfillment of the principal obligation and the penalty at the
same time, except
a. when the creditor was clearly given the right to enforce both the principal obligation and
penalty;
b. when the creditor has demanded fulfillment of the obligation but cannot be fulfilled due to
the
1.debtor’s fault – creditor may demand for penalty
2.creditor’s fault – he cannot claim the penalty
3.fortuitous event – principal obligation and penalty are extinguished

1228. Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded.
•As long as the agreement or contract is breached.
•The mere non-fulfillment of the principal obligation entitles the creditor to the penalty stipulated.
•The purpose of the penalty clause is precisely to avoid proving damages.

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1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly
complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts
if it is iniquitous or unconscionable.
JUDICIAL REDUCTION OF PENALTY
Principal obligation – partly complied with by the debtor (but not in indivisible obligation, because it is
tantamount to non-compliance)
Principal obligation – complied not in accordance with the tenor of the agreement (refers to irregular
performance)
Penalty – iniquitous or unconscionable
Judge’s power to reduce penalties are limited to private contracts.
INIQUITOUS OR UNCONSCIONABLE – when it is revolting to the conscience or common sense; grossly
disproportionate to the damages suffered.
PENALTY NOT ENFORCEABLE:
1.Impossible performance of principal obligation due to fortuitous events

2.Creditor prevented the debtor from fulfilling the obligation

3.Penalty is contrary to good morals or good customs

4.Both parties are guilty of breach of contract

5.Breach of contract by the creditor

6.None of the parties committed any willful or culpable violation of the agreement

1230. The nullity of the penal clause does not carry with it that of the principal obligation. The nullity
of the principal obligation carries with it that of the penal clause.
Because the penal clause is only an accessory to the principal obligation, it cannot exist alone. If the penal
clause is void, the principal obligation remains enforceable.
The nullity of penal clause does not mean the nullity of the principal.
For example: In case of non-payment of P10,000, P1,000 per day as penalty shall be imposed. It is a void
contract but it is not an excuse that you don't have to pay the principal which is P10,000.

CHAPTER 4
EXTINHGUISHMENT OF OBLIGATIONSGENERAL PROVISIONS

1231. Obligations are extinguished:


5.by payment or performance
6.by loss of the thing due
7.by condonation or remission
8.by confusion or merger of the rights of creditor and debtor
9.by compensation
10.by novation
Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a
resolutory condition, and prescription, are governed elsewhere in this Code.

1232. Payment means not only the delivery of money but also the performance, in any other manner of an
obligation.
Payment means not only delivery of money but also the performance.
•It is the fulfillment of the prestation due that extinguishes the obligation by the realization of
the purposes for which It was constituted
•It is a juridical act which is voluntary, licit and made with the intent to extinguish an obligation
•Requisites:
1.person who pays
2.the person to whom payment is made
3.the thing to be paid
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4.the manner, time and place of payment etc
•The paying as well as the one receiving should have the requisite capacity
•Kinds:
1. normal –when the debtor voluntarily performs the prestation stipulated
2. abnormal – when he is forced by means of a judicial proceeding either to comply with prestation or to
pay
indemnity

1233. A debt shall not be understood to have been paid unless the thing or service in which the
oligatoin consists has been completely delivered or rendered, as the case may be.
•States 2 requisites of payment
:a.) identity of prestation - the very thing or service due must be delivered or released
b.) integrity – prestation must be fulfilled completely
•Time of payment – the payment or performance must be on the date stipulated (may be
made even on Sundays or on any holiday, although some, like the Negotiable Instruments Law, states
that payment in such case may be made on the next succeeding business day)

•The burden of proving that the obligation has been extinguished by payment devolves upon the debtor
who offers such a defense to the claim of the plaintiff creditor
•The issuance of a receipt is a consequence of usage and good faith which must be observed (although our
Code has no provision on this) and the refusal of the creditor to issue a receipt without just cause is a
ground for consignation under Art 1256 ( if a receipt has been issued by payee, the testimony
alone of payer would be insufficient to prove alleged payments)

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