Law11 Finals (Obligations)

Law11 Finals (Obligations)

1. Extinguishment of Obligations

   • How?
     • by payment or performance
     • by fortuitous event
     • by condonation of the debt
     • by confusion or merger of the rights of creditor and debtor
     • by compensation
     • by novation
   • Payment/ Performance
     • COMPLETE performance or delivery is required unless:
       • if the obligation was partially done, but in good faith
       • when the creditor accepts the performance w/o protest, while knowing of its incompleteness
       • if it was expressed in the obligation that partial payment is allowed
       • if the debt is partially liquidated (known) and unliquidated (unknown)
     • (1236) Creditor isn't bound to accept payment by 3rd party w/o interest in the fulfillment of the obligation
       • 3rd party who paid may demand reimbursement from the debtor UNLESS he/she paid WITHOUT THE KNOWLEDGE OR CONSENT OF THE DEBTOR
     • (1237) Whoever pays for the debtor (WITHOUT his KNOWLEDGE or CONSENT) cannot force the creditor to transfer the creditor's rights to him/her
     • (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.
       • 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
         • Guarantor- person who assures the solvency of the debtor
           • Surety- insurer of the debt
         • Rights by subrogation can be obtained by 3rd person even if payment was made w/o debtor's knowledge or consent
       • Payment by a 3rd person WITHOUT INTEREST:
         • 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
     • (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
     • (1240) Payment should be made to the person the obligation has been constituted (or his successor in interest/ any person authorized to receive it)
     • (1241) Payment to an incapacitated person is NOT valid, UNLESS: the incapacitated creditor kept the thing delivered OR the payment benefitted the incapacitated creditor
       • 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)
         • 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
     • (1242) Payment in good faith to anyone with the credit shall release the debtor
     • (1243) Payment made to creditor by debtor (after being ordered judicially to not pay) will NOT be valid