CH4

• Obligations


  Extinguished by payment or performance, loss of thing due (by fortuitous event), and remission of debts
• Payment


  Includes money and performance (to do, and not to do)
• Integrity of Prestation


  • The obligation must be performed completely
  • Identity of Prestation - The requirement to fulfill the obligation
• Debts are not understood UNLESS it has been delivered completely
• Obligations that have been performed partially YET in good faith, the debtor may recover as if there has been a strict and complete fulfillment
• If the creditor accepts the performance knowing it is irregular and complete, the obligation shall be deemed to be complied with
• Creditor


  Not intended to accept payment by third person who has no interest in fulfilling the obligation, unless there is a stipulation
• Subrogation


  When the third person acquires all the rights of the creditor; "Third person steps into the shoes of the creditor"
• Reimbursement


  Refund to the extent provided
• Payment by third person to the obligation without knowledge of the debtor, the third person may recover the payment from the debtor only insofar as it has been beneficial to the latter, and there is no Subrogation
• Payment by third person to the obligation with the knowledge and consent of the debtor, there is a Subrogation and Reimbursement
• Any payer to the obligation without the consent of the debtor should not compel the creditor to subrogate
• Any payment made by third person who has no intention of being reimbursed is deemed to be a Donation, although in some cases, the third person may recover to the extent
• Payment shall be valid if the creditor accepts it
• Any payment made by one who does not have free disposal of thing due and capacity to alienate is not valid, and can be recovered
• Capacity to Alienate


  A person is incapacitated to enter in contracts; lack thereof
• Free Disposal of Thing

  Things to be delivered must not be subject to the burden or claims of the third person
• Who may receive payments

  • Assignee
  • Creditor
  • Any person authorized (by the creditor and law)
• Payments to incapacitated creditor is valid only if the creditor has kept the thing delivered (if not kept, the creditor may compel the debtor to pay again) and if it has been beneficial to the latter
• Payment to a third person shall be valid if it is contributed to the benefit of the creditor
• Payment in good faith and payment in possession of the creditor are valid and release the debtor from the obligation
• If the court has ordered to retain the debt, any payment made to the creditor is invalid
• Garnishment


  Debtor of the debtor has ordered the debtor to pay the creditor to extinguish the obligation of the other
• The debtor should not force or compel the creditor to receive a different prestation, it cannot be substituted by another unless it is agreed by the creditor, like a Novation
• Forms of Payment


  • Payment by Cession
  • Tender of Payment (& Consignation)
  • Dation in Payment
  • Application of Payment
• Dation in Payment (Dacion en Pago)


  When the debtor gives his property as a form of payment to the creditor and is valid
• When delivering a generic thing (the quality is not stated) the creditor shall not compel the debtor to delivery a superior quality, and neither can the debtor should delivery inferior quality; it depends on the parties
• The debtor should pay the extrajudicial expenses not unless stipulated that the creditor should
• Performances should always be complete and should not compel the creditor to receive partially, and debtors are neither be required to make partial payments, unless stipulated, liquidated, or unliquidated
• Liquidated


  Payments of Cash
• Unliquidated


  The Creditor may compel the debtor to make the payment first before additional damages to pay
• All payments of debts in terms of money should be made in currency stipulated or if not possible, then in legal tender currency of Philippines (peso)
• Legal Tender


  The currency which is offered by the debtor at the right amount, the debtor may compel the creditor to accept the payment
• Only in case of extraordinary Inflation & Deflation, the basis of payment should rely on the value of the currency on that circumstances
• Inflation


  The decrease value of money and increase of credit
• Deflation


  Opposite of Inflation; decline of prices in general
• If the debtor changes their domicile in bad faith or in delay too, expenses shall be conveyed by him to pay
• If specific thing to delivery (stipulated), delivery of payment must be made where the prestation was at the time of contract or perfection. If no stipulation - generic thing, delivery of the payment must be made where the debtor resides or his domicile
• Special Forms of Payment

  • Application of Payment
  • Cession or Assignment
  • Dation in Payment
  • Tender in Payment and Consignation
• Application of Payment


  Designation of the debt and when the debtor owes more debts in the same creditor