The document discusses the various ways an obligation can be extinguished under Philippine law. It lists 10 ways: 1) payment or performance, 2) loss of the thing due, 3) condonation or remission of debt, 4) confusion or merger of rights, 5) compensation, 6) novation, 7) annulment, 8) rescission, 9) fulfillment of resolutory condition, and 10) prescription. It then provides details on payment or performance, loss of the thing due, condonation or remission of debt, confusion or merger of rights, compensation, novation, tender of payment, and consignation.
The document discusses the various ways an obligation can be extinguished under Philippine law. It lists 10 ways: 1) payment or performance, 2) loss of the thing due, 3) condonation or remission of debt, 4) confusion or merger of rights, 5) compensation, 6) novation, 7) annulment, 8) rescission, 9) fulfillment of resolutory condition, and 10) prescription. It then provides details on payment or performance, loss of the thing due, condonation or remission of debt, confusion or merger of rights, compensation, novation, tender of payment, and consignation.
The document discusses the various ways an obligation can be extinguished under Philippine law. It lists 10 ways: 1) payment or performance, 2) loss of the thing due, 3) condonation or remission of debt, 4) confusion or merger of rights, 5) compensation, 6) novation, 7) annulment, 8) rescission, 9) fulfillment of resolutory condition, and 10) prescription. It then provides details on payment or performance, loss of the thing due, condonation or remission of debt, confusion or merger of rights, compensation, novation, tender of payment, and consignation.
The document discusses the various ways an obligation can be extinguished under Philippine law. It lists 10 ways: 1) payment or performance, 2) loss of the thing due, 3) condonation or remission of debt, 4) confusion or merger of rights, 5) compensation, 6) novation, 7) annulment, 8) rescission, 9) fulfillment of resolutory condition, and 10) prescription. It then provides details on payment or performance, loss of the thing due, condonation or remission of debt, confusion or merger of rights, compensation, novation, tender of payment, and consignation.
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EXTINGUISHMENT
OF OBLIGATION Article 1231. Obligations are extinguished: 1. By payment or performance 2. By the loss of the thing due 3. By the condonation or remission of debt 4. By confusion or merger of rights of the creditor and debtor 5. By compensation 6. By novation 7. Annulment 8. Rescission 9. Fulfillment of resolutory condition 10. Prescription I. Payment or Performance
Payment means not only the delivery of money but also the performance, in any other manner, of an obligation.
Persons who may pay obligation
1. debtor, himself or his legal representative 2. Any third person GR: Creditor not bound to accept payment or performance by a third person EXCEPTION: Stipulation to the contrary To whom payment must be made Payment shall be made, as a general rule, to: 1. The person in whose favor the obligation has been constituted 2. His successor in interest 3. Any person authorized to receive it.
Payment made to unauthorized person is invalid,
EXCEPT: 4. Payment made to a third person provided that it has redounded to the benefit of the creditor 5. Payment to the possessor of credit provided that it was made in good faith. Rule in Monetary Obligations (1249) 1. Payment shall be made in stipulated currency. 2. If it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines. 3. The delivery of promissory notes payable to order or bill of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired MEANING OF LEGAL TENDER
Legal Tender- refers to such currency which
may be used for the payment of all debts, whether public or private. Under our law, the legal tender of the Philippines would be all notes and coins issued by the Bangko Sentral. BSP Circular No. 537, series of 2006, the PHP1, PHP5, and PHP10 coins can be used as payments for amounts up to PHP1,000. coins with lower denominations can be used as payments for amounts not higher than PHP100. Extraordinary inflation or deflation • In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the time of the establishment of the obligation shall be the basis of payment, unless there is an agreement to the contrary. • Extraordinary inflation exists when there is an unusual decrease in the purchasing power of currency (that is, beyond the common fluctuation in the value of currency) and such decrease could not be reasonably foreseen or was manifestly beyond the contemplation of the parties at the time of the obligation. Extraordinary deflation, on the other hand, involves an inverse situation. 1. that there was an official declaration of extraordinary inflation or deflation from the Bangko Sentral ng Pilipinas Requisites for (BSP);
extraordinary inflation or 2. that the obligation was contractual in nature; deflation 3. that the parties expressly agreed to consider the effects of the extraordinary inflation or deflation. Place of Payment
If there is no express designation or stipulation in the
obligation with respect to the place where payment shall be made, the following rules are applicable: 1. If the obligation is to deliver a determinate thing, the payment shall be made at the place where the thing might be at the time the obligation was constituted. 2. In any other case, the payment shall be made at the domicile of the debtor. If the debtor changes his domicile in bad faith or after he has incurred in delay, the additional expenses shall be borne by him. Application of Payment Application of payment- designation of the debt to which the payment must be applied when the debtor has several obligations of the same kind in favor of the same creditor.
Requisites 1. There must be only one debtor and only one creditor 2. There must be two or more debts of the same kind; 3. All of the debts must be due; 4. The amount paid by the debtor must not be sufficient to cover the total amount of all debts. Legal Application of Payment (Art. 1254) When payment cannot be applied in accordance with 1252 or the application cannot be inferred from other circumstances, the debt whis is most onerous to the debtor, among those due, shall be deemed to have been satisfied.
If the debts due are of the same nature and
burden, the payment shall be applied to all of them proportionately. Payment by Cession vs. Dation in Payment
Cession or assignment – special form of payment Dation in payment- as the whereby the debtor abandons transmission of ownership of a all of his property for the thing by the creditor as benefit of his creditors in order accepted equivalent of the that from the proceeds thereof performance of obligation. the latter may obtain payment of their credits. Distinguishment of Payment by Cession and Dation in Payment
Category Payment by Cession Dation in Payment
As to number of parties Plurality of creditors May be only one creditor
As to financial condition of Debtor is in a state of partial Debtor is not necessarily in
parties or relative insolvency a state of financial difficulty
As to object The payment extinguishes Release the debtor for the
the obligation to the extent net proceed of the things of the value of the thing ceded or assigned. delivered . Tender of Payment and Consignation
Consignation- refers to the
Tender of payment- deposit of the object of the manifestation made by the obligation in a competent court debtor to the creditor of his in accordance with the rules decision to comply prescribed by law after refusal immediately with his or inability of the creditor to obligation. accept the tender of payment. Requisites of Consignation 1. That there is a debt due 2. That the consignation has been made either because the creditor to whom tender of payment was made refused to accept the payment without just cause, or because any of the causes stated by law for effective consignation without previous tender of payment exists. 3. The previous notice of the consignation had been given to the persons interested in the fulfillment of the obligation; 4. That the thing or amount due had been placed at the disposal of judicial authority. II. Loss of the Thing Due
Loss of the thing due – means that the thing which constitutes the object of the obligation perishes or goes out of commerce of man or disappears in such a way that its existence is unknown, or it cannot be recovered. III. Condonation or Remission of the Debt Remission is act of liberality by virtue of which the oblige, without receiving any price or equivalent, renounces the enforcement of the obligation, as a result of which it is extinguished in its entirety or in that part or aspect of the same to which the remission refers. Requisites of Condonation or Remission of the Debt 1. It must be gratuitous ; 2. It must be accepted by the obligor; 3. The obligation must be demandable. IV. Confusion or Merger of Rights Confusion – merger of the characters of creditor and debtor in one and the same person by virtues of which the obligation is extinguished. Requisites of Confusion or Merger of Rights 1. The merger of the characters of the creditor and debtor must be in the same person; 2. That it must take place in the person of wither the principal creditor or principal debtor; 3. That it must be complete and definite. V. Compensation Compensation as mode of extinguishing in their concurrent amount those obligations of persons who in their own right are creditors and debtors of each other. Requisite of Compensation 1. That each one of the obligors be bound principally, and the he be at the same time a principal creditor of the other; 2. That both debts consists in a sum of money, or if the things dues are consumable, they be of the same kind, and also of the same quality if the latter has been stated; 3. The two debts be dues; 4. That they be liquidated and demandable. 5. That over neither of them there be any retention or controversy, commenced by the third person and communicated in due time to the creditor. VI. Novation Novation is the substitution or change of an obligation by another, resulting in its extinguishment or modification, either by : 1. changing its object 2. principal conditions 3. by substituting another in place of the debtor 4. subrogating a third person in the rights of the creditor. Requisites of Novation 1. A previous valid obligation . 2. Agreement of the parties to the new obligation . 3. Extinguishment of the old obligation. 4. Validity of the new obligation.
