law

• Obligations are extinguished by

  • Payment or performance
  • Loss of the thing due
  • Condonation or remission of the debt
  • Confusion or merger of the rights of creditor and debtor
  • Compensation
  • Novation
• Causes of extinguishment of obligation

  • Death
  • Mutual desistance or withdrawal
  • Arrival of resolutory period
  • Compromise
  • Impossibility of fulfillment
  • Happening of a fortuitous event
• Modes of extinguishment of obligation

  • Voluntary: Performance, Substitution, Dacion en pago, Novation, By release agreement, Mutual waiver, Unilateral waiver, Remission, Resolutary condition, Extinctive period
  • Involuntary: Confusion, Death of the contracting parties, Loss of the thing due, Impossibility of performance, Failure to exercise (right of action)
• Payment


  Not only the delivery of money but also the performance, in any other manner, of an obligation
• Elements of payment


  • Persons who may pay and to whom payment may be made
  • Thing or object in which payment must consist
  • The cause thereof
  • The mode or form thereof
  • The place and the time in which it must be made
  • The imputation of expenses occasioned by it
  • The special parts which may modify the same and the effects they generally produce
• A debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered or rendered
• Requisites for a valid payment

  • Integrity of prestation - the prestation must be fulfilled completely
  • Identity of prestation - the very prestation due must be delivered
• Burden of proving payment

  When the existence of a debt is admitted by the debtor or established by the evidence of the creditor, the burden of proving extinguishment by payment dissolves upon the debtor who claims payment
• Substantial performance in good faith

  The obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee
• Requisites for the application of Article 1234

  • There must be substantial performance
  • The obligor must be in good faith
• Requisites for Article 1235 to apply

  • The obligee knows that the performance is incomplete or irregular
  • He accepts that the performance without expressing any protest or objection
• Persons from whom the creditor must accept payment

  • The debtor
  • Any person who has an interest in the obligation
  • A third person who has no interest in the obligation when there is stipulation that he can make payment
• Effect of payment by a third person

  • If made without the knowledge or against the will of the debtor, the recovery is only up to the extent or amount of the debt at the time of payment
  • If made with knowledge of the debtor, the payer shall have the rights of reimbursement and subrogations
• Subrogation and reimbursement distinguished

  • In subrogation, the person who pays for the debtor is put into the shoes of the creditor
  • In reimbursement, the third person has merely the bare right to be refunded to the extent provided in the second paragraph of Article 1236 without the right to the guarantees and securities of the original obligation
• Payment by a third person without intention to be reimbursed


  • It may be considered as a donation with the consent of the debtor
  • Even if the debtor does not agree after the creditor accepts the payment, the obligation will still be extinguished