Extinguishment of Obligation Essay

SECTION 1. Payment or PerformanceArt. 1232. Payment federal agency non save the imparty of currency simply too the performance, in any a nonher(prenominal)wise manner, of an assure. (n)Art. 1233. A debt sh in all not be understood to get down been paid unless the social occasion or expediency in which the indebtedness consists has been exclusively delivered or rendered, as the drive whitethorn be. (1157)Art. 1234. If the province has been substantially performed in good combine,the obligor may recover as though at that charge had been a strict and complete fulfillment, less indemnity suffered by the obligee. (n)Art. 1235. When the obligee accepts the performance, knowing its tenderness or irregularity, and without press outing any protest or objection, the bargain is deemed fully complied with. (n)Art. 1236. The attributeor is not bound to accept remuneration or performance by a third soul who has no interest in the fulfillment of the contract, unles s there is a judicial admission to the contrary.Whoever pays for another may demand from the debitor what he has paid, except that if he paid without the noesis or against the entrust of the debtor, he can recover only insofar as the allowance has been up function to the debtor. (1158a)Art. 1237. Whoever pays on behalf of the debtor without the knowledge or against the will of the last menti integrityd, cannot compel the creditor to exchange him in his rights, such as those arising from a mortgage, guaranty, or penalty. (1159a)Art. 1238. Payment make by a third psyche who does not intend to be reimbursed by the debtor is deemed to be a donation, which requires the debtors hope. moreover the allowance is in any case valid as to the creditor who has veritable it. (n)Art. 1239. In obligations to give, recompense do by star who does not acquire the free disposal of the thing cod and capacity to alienate it shall not be valid, without diagonal to the nourishment of A rticle 1427 under the Title on Natural Obligations. (1160a)Art. 1240. Payment shall be make to the person in whose estimate the obligation has been constituted, or his successor in interest, or any person authorized to receive it. (1162a)Art. 1241. Payment to a person who is incapacitated to pass around his property shall be valid if he has kept the thing delivered, or insofar as the fee has been beneficial to him.Payment make to a third person shall also be valid insofar as it has redounded to the benefit of the creditor. Such benefit to the creditor need not be proven in the following cases(1) If after the requital, the third person acquires the creditors rights(2) If the creditor ratifies the payment to the third person(3) If by the creditors conduct, the debtor has been led to rely that the third person had authority to receive the payment. (1163a)Art. 1242. Payment do in good faith to any person in possession of the credit shall release the debtor. (1164)Art. 1243. Paymen t made to the creditor by the debtor after the last menti singled has been judicially methodicalnessed to retain the debt shall not be valid. (1165)Art. 1244. The debtor of a thing cannot compel the creditor to receive a different one, although the latter(prenominal)(prenominal) may be of the kindred value as, or more valuable than that which is due.In obligations to do or not to do, an act or forbearance cannot be relievod by another act or forbearance against the obligees will. (1166a)Art. 1245. Dation in payment, whereby property is alienated to the creditor in satisf follow through of a debt in money, shall be governed by the law of sales. (n)Art. 1246. When the obligation consists in the auction pitch of an indeterminate or generic thing, whose quality and circumstances piss not been stated, the creditor cannot demand a thing of superior quality. incomplete can the debtordeliver a thing of inferior quality. The purpose of the obligation and other circumstances shall be t aken into consideration. (1167a)Art. 1247. Unless it is otherwise stipulated, the extrajudicial expenses required by the payment shall be for the account of the debtor. With regard to judicial costs, the Rules of Court shall govern. (1168a)Art. 1248. Unless there is an express stipulation to that picture, the creditor cannot be compelled secernially to receive the prestations in which the obligation consists. Neither may the debtor be required to make partial payments.However, when the debt is in part liquidated and in part unliquidated, the creditor may demand and the debtor may set up the payment of the antecedent without waiting for the liquidation of the latter. (1169a)Art. 1249. The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines.The delivery of promissory notes payable to pitch, or bills of exchange or other mercantile documents shall prod uce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired.In the meantime, the action derived from the victor obligation shall be held in the abeyance. (1170)Art. 1250. 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. (n)Art. 1251. Payment shall be made in the place designated in the obligation.There being no express stipulation and if the undertaking is to deliver a determinate thing, the payment shall be made wherever the thing might be at the turn the obligation was constituted.In any other case the place of payment shall be 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.These provender argon without preconce ived idea to venue under the Rules of Court. (1171a) branch 1. exertion of PaymentsArt. 1252. He who has various debts of the alike(p) kind in favor of one and the akin creditor, may decl are at the time of making the payment, to which of them the same must be applied. Unless the parties so stipulate, or when the coat of payment is made by the party for whose benefit the term has been constituted, application shall not be made as to debts which are not yet due.If the debtor accepts from the creditor a receipt in which an application of the payment is made, the former cannot complain of the same, unless there is a cause for invalidating the contract. (1172a)Art. 1253. If the debt produces interest, payment of the principal shall not be deemed to have been made until the interests have been covered. (1173)Art. 1254. When the payment cannot be applied in accordance with the preceding die hards, or if application can not be inferred from other circumstances, the debt which 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. (1174a)SUBSECTION 2. Payment by CessionArt. 1255. The debtor may cede or assign his property to his creditors in payment of his debts. This cession, unless there is stipulation to the contrary, shall only release the debtor from responsibility for the net proceeds of the thing assigned. The agreements which, on the effect of the cession, are made between the debtor and his creditors shall be governed by special laws. (1175a)SUBSECTION 3. Tender of Payment and ConsignationArt. 1256. If the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor shall be released from responsibility by the consignation of the thing or addition due.Consignation alone shall produce the same effect in the following cases(1) When the creditor is absent or unknown, or d oes not turn out at the place of payment(2) When he is incapacitated to receive the payment at the time it is due(3) When, without just cause, he refuses to give a receipt(4) When two or more persons claim the same right to collect(5) When the title of the obligation has been deep in thought(p). (1176a)Art. 1257. In aim that the consignation of the thing due may release the obligor, it must first be announced to the persons elicit in the fulfillment of the obligation.The consignation shall be ineffectual if it is not made purely in consonance with the provisions which regulate payment. (1177)Art. 1258. Consignation shall be made by depositing the things due at the disposal of judicial authority, before whom the tender of payment shall be proved, in a proper case, and the announcement of the consignation in other cases.The consignation having been made, the interested parties shall also be notified thereof. (1178)Art. 1259. The expenses of consignation, when the right way made, shall be charged against the creditor. (1178)Art. 1260. at one time the consignation has been duly made, the debtor may ask the judge to order the cancellation of the obligation. in advance the creditor has accepted the consignation, or before a judicial declaration that the consignation has been properly made, the debtor may withdraw the thing or the sum deposited, allowing the obligation to remain in force. (1180)Art. 1261. If, the consignation having been made, the creditor should authorize the debtor to withdraw the same, he shall flake out every preference which he may have over the thing. The co-debtors, guarantors and sureties shall be released. (1181a)SECTION 2. Loss of the Thing DueArt. 1262. An obligation which consists in the delivery of a determinate thing shall be do away with if it should be lost or destroyed without the fault of the debtor, and before he has incurred in delay.When by law or stipulation, the obligor is liable even for fortuitous events, the loss o f the thing does not extinguish the obligation, and he shall be responsible for damages. The same rule applies when the nature of the obligation requires the assumption of risk. (1182a)Art. 1263. In an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does not extinguish the obligation. (n)Art. 1264. The courts shall determine whether, under the circumstances, the partial loss of the object of the obligation is so important as to extinguish the obligation. (n)Art. 1265. Whenever the thing is lost in the possession of the debtor, it shall be presumed that the loss was due to his fault, unless there is proof to the contrary, and without prejudice to the provisions of article 1165. This presumption does not apply in case of earthquake, flood, storm, or other natural calamity. (1183a)Art. 1266. The debtor in obligations to do shall also be released when the prestation becomes legally or physically impossible without the fault of the obligor. (11 84a)Art. 1267. When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part. (n)Art. 1268. When the debt of a thing certain and determinate proceeds from a criminal offense, the debtor shall not be exempted from the payment of its price, whatever may be the cause for the loss, unless the thing having been offered by him to the person who should receive it, the latter refused without justification to accept it. (1185)Art. 1269. The obligation having been extinguished by the loss of the thing, the creditor shall have all the rights of action which the debtor may have against third persons by reason of the loss. (1186)SECTION 3. Condonation or Remission of the DebtArt. 1270. Condonation or remission is basically gratuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly.One and the other kind shall be subject to the rules which govern inofficious donations. stockpile condonation shall, furthermore, comply with the forms of donation. (1187)Art. 1271. The delivery of a private document evidencing a credit, made voluntarily by the creditor to the debtor, implies the renunciation of the action which the former had against the latter.If in order to nullify this vent it should be claimed to be inofficious, the debtor and his heirs may keep it by proving that the delivery of the document was made in virtue of payment of the debt. (1188)Art. 1272. Whenever the private document in which the debt appears is found in the possession of the debtor, it shall be presumed that the creditor delivered it voluntarily, unless the contrary is proved. (1189)Art. 1273. The renunciation of the principal debt shall extinguish the accessory obligations but the waiver of the latter shall leave the former in force. (1190)Art. 1274. It is presumed that the accessory obligation of pledge has been remitted when the thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or of a third person who owns the thing. (1191a)SECTION 4. Confusion or coalition of RightsArt. 1275. The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person. (1192a)Art. 1276. Merger which takes place in the person of the principal debtor or creditor benefits the guarantors. Confusion which takes place in the personof any of the latter does not extinguish the obligation. (1193)Art. 1277. Confusion does not extinguish a joint obligation except as regards the share corresponding to the creditor or debtor in whom the two characters concur. (1194)SECTION 5. CompensationArt. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other. (1195)Art. 1279. In order that recompense may be proper, it is necessary(1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of th e other(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated(3) That the two debts be due(4) That they be liquidated and demandable(5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. (1196)Art. 1280. Notwithstanding the provisions of the preceding article, the guarantor may set up recompense as regards what the creditor may owe the principal debtor. (1197)Art. 1281. Compensation may be conglomeration or partial. When the two debts are of the same amount, there is a intact remuneration. (n)Art. 1282. The parties may agree upon the compensation of debts which are notyet due. (n)Art. 1283. If one of the parties to a suit over an obligation has a claim for damages against the other, the former may set it off by proving his right to say damages and the amount thereof. (n)Art. 1284. Wh en one or both debts are rescissible or voidable, they may be compensated against each other before they are judicially rescinded or avoided. (n)Art. 1285. The debtor who has consented to the assignment of rights made by a creditor in favor of a third person, cannot set up against the assignee the compensation which would pertain to him against the assignor, unless the assignor was notified by the debtor at the time he gave his consent, that he reserved his right to the compensation.If the creditor communicated the cession to him but the debtor did not consent thereto, the latter may set up the compensation of debts previous to the cession, but not of subsequent ones.If the assignment is made without the knowledge of the debtor, he may set up the compensation of all credits prior to the same and also later ones until he had knowledge of the assignment. (1198a)Art. 1286. Compensation takes place by operation of law, even though the debts may be payable at different places, but there shall be an indemnity for expenses of exchange or transportation to the place of payment. (1199a)Art. 1287. Compensation shall not be proper when one of the debts a muster ups from a depositum or from the obligations of a depositary or of a bailee in commodatum.Neither can compensation be set up against a creditor who has a claim for support due by gratuitous title, without prejudice to the provisions of paragraph 2 of Article 301. (1200a)Art. 1288. Neither shall there be compensation if one of the debts consists in civil liability arising from a penal offense. (n)Art. 1289. If a person should have against him several debts which are susceptible of compensation, the rules on the application of payments shall apply to the order of the compensation. (1201)Art. 1290. When all the requisites mentioned in Article 1279 are present, compensation takes effect by operation of law, and extinguishes both debts to the concurrent amount, even though the creditors and debtors are not aware of the compensation. (1202a)SECTION 6. NovationArt. 1291. Obligations may be modified by(1) Changing their object or principal conditions(2) Substituting the person of the debtor(3) Subrogating a third person in the rights of the creditor. (1203)Art. 1292. In order that an obligation may be extinguished by another which substitute the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point antagonistic with each other. (1204)Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him the rights mentioned in Articles 1236 and 1237. (1205a)Art. 1294. If the substitution is without the knowledge or against the willof the debtor, the new debtors insolvency or non-fulfillment of the obligations shall not give rise to any liability o n the part of the original debtor. (n)Art. 1295. The insolvency of the new debtor, who has been proposed by the original debtor and accepted by the creditor, shall not revive the action of the latter against the original obligor, except when said insolvency was already existing and of macrocosm knowledge, or known to the debtor, when the delegated his debt. (1206a)Art. 1296. When the principal obligation is extinguished in instant of a novation, accessory obligations may subsist only insofar as they may benefit third persons who did not give their consent. (1207)Art. 1297. If the new obligation is void, the original one shall subsist, unless the parties intended that the former relation should be extinguished in any event. (n)Art. 1298. The novation is void if the original obligation was void, except when abrogation may be claimed only by the debtor or when ratification validates acts which are voidable. (1208a)Art. 1299. If the original obligation was subject to a suspensive or resolutory condition, the new obligation shall be under the same condition, unless it is otherwise stipulated. (n)Art. 1300. Subrogation of a third person in the rights of the creditor is either legal or conventional. The former is not presumed, except in cases expressly mentioned in this Code the latter must be clearly established in order that it may take effect. (1209a)Art. 1301. Conventional subrogation of a third person requires the consent of the original parties and of the third person. (n)Art. 1302. It is presumed that there is legal subrogation(1) When a creditor pays another creditor who is prefer, even without the debtors knowledge(2) When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor(3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latters share. (1210a)Art. 1303. Subrogation transfers to the persons subrogated the credit with all the rights thereto appertaining, either against the debtor or against third person, be they guarantors or possessors of mortgages, subject to stipulation in a conventional subrogation. (1212a)Art. 1304. A creditor, to whom partial payment has been made, may exercise his right for the remainder, and he shall be preferred to the person who has been subrogated in his place in virtue of the partial payment of the same credit. (1213)