Animal Kingdom

Topics: Debt, Bankruptcy, Debtor Pages: 11 (2772 words) Published: April 7, 2013
Modes of Extinguishment of Obligations
Payment or performance Loss of the thing due Condonation or remission of debt Confusion or merger of rights Compensation Novation Annulment Rescission Fulfillment of resolutory condition

Payment / Performance
delivery of money and performance, in any other manner of the obligation

Requisites for Valid Payment / Performance With respect to the prestation Identity Integrity or completeness Indivisibility

Requisites for Valid Payment
With respect to parties - must be made by proper party to proper party PAYOR Payor - the one performing, he can be the debtor himself or his heirs or assigns or his agent, or anyone interested in the fulfillment of the obligation; can be anyone as long as it is with the creditor's consent 3rd person pays/performs - only the creditor's consent; If performance is done also with debtor's consent - he takes the place of the debtor. There is subrogation except if the 3rd person intended it to be a donation 3rd person pays/performs with consent of creditor but not with debtor's consent, the repayment is only to the extent that the payment has been beneficial to debtor

Requisites for Valid Payment
PAYEE Payee - creditor or obligee or successor in interest of transferee, or agent 3rd person - if any of the ff. concur: It must have redounded to the obligee's benefit and only to the extent of such benefit It falls under art 1241, par 1,2,3 - the benefit is total so, performance is total

Anyone in possession of the credit - but will apply only if debt has not been previously garnished

Payment made to an Incapacitated Person, VALID if: Incapacitated person kept the thing delivered, or Insofar as the payment has been beneficial to him

PAYMENT TO 3RD PARTY NOT AUTHORIZED, VALID IF PROVED AND ONLY TO THE EXTENT OF BENEFIT; PRESUMED IF After payment, 3rd person acquires the creditor’s rights Creditor ratifies payment to 3rd person By creditor’s conduct, debtor has been led to make the payment (estoppel)

PAYMENT MADE IN GOOD FAITH TO A PERSON IN POSSESSION OF CREDIT SHALL RELEASE DEBTOR; REQUISITES: Payment by debtor must be made in good faith Creditor must be in possession of the credit and not merely the evidence of indebtedness

Where Payment Made
In the place designated in the obligation If there is no express stipulation and the undertaking is to deliver a specific thing – at the place where the thing might be at the moment the obligation was constituted In other case – in the place of the domicile of the debtor Time of payment - time stipulated Effect of payment – extinguish obligation Except: order to retain debt

Substantial Performance
Art. 1234. If the obligation has been substantially performed in good faith, the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee. Art. 1235. When the obligee accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with. Attempt in Good Faith to perform without willful or intentional departure Deviation is slight Omission/Defect is technical or unimportant Must not be so material that intention of parties is not attained

Substantial Performance
Effect of Substantial Performance in Good Faith Obligor may recover as though there has been strict and complete fulfillment, less damages suffered by the oblige Right to rescind cannot be used for slight breach

Application of Payment
the designation of the debt which payment shall be made, out of 2 or more debts owing the same creditor stipulation or application of party given benefit of period – OK to be valid: must be debtor’s choice or with the consent of debtor

Application of Payments
Requisites: Various debts of the same kind Same debtor Same creditor All debts must be due Exceptions: there may be application of payment even if all debts...
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