Oblicon Reviewer

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I. EXTINGUISHMENT OF OBLIGATIONS PAYMENT OR PERFORMANCE ART 1232 – “Payment means not only the delivery of money but also the performance, in any other manner of an obligation”

a.) identity of prestation - the very thing or service due must be delivered or released b.) integrity – prestation must be fulfilled completely

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It is the fulfillment of the prestation due that extinguishes the obligation by the realization of the purposes for which it was constituted It is a juridical act which is voluntary, licit and made with the intent to extinguish an obligation Requisites:

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a.) person who pays b.) the person to whom payment is made c.) the thing to be paid d.) the manner, time and place of payment etc

Time of payment – the payment or performance must be on the date stipulated (may be made even on Sundays or on any holiday, although some states like the Negotiable Instruments Law states that payment in such case may be made on the next succeeding business day) The burden of proving that the obligation has been extinguished by payment devolves upon the debtor who offers such a defense to the claim of the plaintiff creditor The issuance of a receipt is a consequence of usage and good faith which must be observed (although our Code has no provision on this) and the refusal of the creditor to issue a receipt without just cause is a ground for consignation under Art 1256 ( if a receipt has been issued by payee, the testimony alone of payer would be insufficient to prove alleged payments)

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The paying as well as the one receiving should have the requisite capacity Kinds:

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”

a.) normal –when the debtor voluntarily performs the prestation stipulated b.)abnormal – when he is forced by means of a judicial proceeding either to comply with prestation or to pay indemnity ART 1233 – “A debt shall not be understood to have been paid unless the thing or service in which the oligatoin consists has been completely delivered or rendered, as the case may be”

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States 2 requisites of payment:

In order that there may be substantial performance of an obligation, there must have been an attempt in good faith to perform, without any willful or intentional departure therefrom The non-performance of a material part of a contract will prevent the performance from amounting to a substantial compliance A party who knowingly and willfully fails to perform his contract in any respect, or omits to perform a material part of it cannot be permitted under the protection of this rule to compel the other party to perform; and the trend of the more recent decisions is to hold that the percentage of omitted or irregular performance may in and of itself be sufficient to show that there has not been a substantial performance The party who has substantially performed may enforce specific performance of the obligation of the other party or may recover damages for their breach upon an allegation of performance, without proof of complete fulfillment.

The other party, on the other hand, may by an independent action before he is sued, or by a counterclaim after commencement of a suit against him, recover from the first party the damages which he has sustained by the latter’s failure to completely fulfill his obligation

ART 1235 – “When the oblige accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with”

If the debt has been remitted, paid compensated or prescribed, a payment by a third person would constitute a payment of what is not due; his remedy would be against the person who received the payment under such conditions and not against the debtor who did not benefit from the...
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