Law11 Finals (Obligations)

Extinguishment of Obligations
1. How?
  1. by payment or performance
  2. by fortuitous event
  3. by condonation of the debt
  4. by confusion or merger of the rights of creditor and debtor
  5. by compensation
  6. by novation
2. Payment/ Performance
  1. COMPLETE performance or delivery is required unless:
    1. if the obligation was partially done, but in good faith
    2. when the creditor accepts the performance w/o protest, while knowing of its incompleteness
    3. if it was expressed in the obligation that partial payment is allowed
    4. if the debt is partially liquidated (known) and unliquidated (unknown)
  2. (1236) Creditor isn't bound to accept payment by 3rd party w/o interest in the fulfillment of the obligation
    1. 3rd party who paid may demand reimbursement from the debtor UNLESS he/she paid WITHOUT THE KNOWLEDGE OR CONSENT OF THE DEBTOR
  3. (1237) Whoever pays for the debtor (WITHOUT his KNOWLEDGE or CONSENT) cannot force the creditor to transfer the creditor's rights to him/her
  4. (1238) Payment by third person who has no intention of being reimbursed is a DONATION, which requires the CONSENT of the debtor. Payment is still valid.
    1. Payment by a 3rd person WITH INTEREST: payment must be accepted by creditor if the 3rd party is a GUARANTOR or a SURETY. Both of these are solitarily bound with the debtor
      1. Guarantor- person who assures the solvency of the debtor
        Surety- insurer of the debt
      2. Rights by subrogation can be obtained by 3rd person even if payment was made w/o debtor's knowledge or consent
    2. Payment by a 3rd person WITHOUT INTEREST:
      1. this person cannot be compelled to fulfill the obligation; creditor may not accept payment unless an agreement allows it
        BUT! If the creditor accepts the 3rd person's payment, the debtor's obligation is extinguished, but there is a NEW obligation between the debtor and 3rd person (amount to be recovered depends if payment was made without or against debtor's will)
        What the 3rd person can collect: based on solutio indebiti
  5. (1239) In obligations to give, payment isn't valid if the one who paid does NOT have the right to dispose it, or is incapacitated like a MINOR or INSANE person
  6. (1240) Payment should be made to the person the obligation has been constituted (or his successor in interest/ any person authorized to receive it)
  7. (1241) Payment to an incapacitated person is NOT valid, UNLESS: the incapacitated creditor kept the thing delivered OR the payment benefitted the incapacitated creditor
    1. Payment made to a third person instead of the creditor is NOT valid, UNLESS the payment benefits the creditor (debtor must prove said benefit, unless it need not be proven)
      1. When does it need NOT to be proven?
        3rd person acquires creditor's rights
        Payment to 3rd person is approved by creditor
        Estoppel- when because of the creditor, the debtor was led to believe that the 3rd person had authority to receive the payment
  8. (1242) Payment in good faith to anyone with the credit shall release the debtor
  9. (1243) Payment made to creditor by debtor (after being ordered judicially to not pay) will NOT be valid

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Law11 Finals (Obligations)

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