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obligations and contracts(final) (1)

obligations and contracts(final) (1)

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Published by Ellan Cipriano

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Published by: Ellan Cipriano on Mar 20, 2011
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Section 3 Condonation or remission of the debtArticle 1270Remission-an act of liberality whereby thecreditor waives the enforcement of theobligation contractedin his favor.*S.C def.-an agreement between the creditorand debtor,by virtue of which, theformer spontaneously remits an act of liberality, in whole or in part, theobligation of the debtor*Puig Peňa def.-bilateral nature of remission is notlost since the legatee must still acceptthe legacy in order to beeffective->legacy of remission of debts which is logically a unilateralact.Note: If there is noacceptance by the debtor,there is no remission butwaiver of rights if the creditoris simply renounces thecredit in favor of nobody,or of the same may bedistinguished by prescriptionthrough inaction by thecreditor.Essential characteristic of remission, it is gratuitous.Kinds:1.)As to effectivity into:a.)Inter vivos-when it takes effect during thelife time of the creditor.b.) Mortis causa-when it takes effect after thedeatyh of the creditor-must naturally be expressed andin the form of a will2.) As to extenta.) Total- if the whole obligation isremittedb.) Partial- may either be a remissionof b.1) a part of the amountb.2) a part of the obligation suchas the accessory obligation of pledgeb.3) an aspect of the obligationsuch as solidarity3.) As to forma.) Express-when made formally andin the form required of ordinary donationsb.) Implied- when it can be inferredfrom the actions of the partiesREQUISITES:1.)Capacity of the parties-creditor and debtor must have thecapacity to make and acceptfdonations2.)Consent of the parties-agreement and require acceptanceby the obligor3.)Acceptance of the remission of thedebt-all kinds of debts may be condonedwhether pure or conditional or with aterm4.)Remission must be gratuitous-otherwise it will be anotheragreement such as dation, novationor compromise5.)In case of express remission,-the formalities required by law forordinary donations must be compliedwith.Note: Governing rules-ordinary donations.Article 1271Implied remission-basis: when the creditor delivers aprivate document evidencing debt tohis debtor, he surrenders the weaponfor the enforcement of these rights.Second par.-remission is presumed from thevoluntary return of the title of credit and notpayment of thedebt unless the contrary is provedArticle 1272-Whenever the private document inwhich the debt appears is found in thepossession of the debtor, it shall bepresumed that the creditor deliveredit voluntarily, unless the contrary isproved.Article 1273-The renunciation of the principal debtshall extinguish the accessoryobligation;but the waiver of the lattershall leave the former in force.Article 1274-It is presumed that the accessoryobligation of pledge has beenremitted when the thing pledged,after its delivery to the creditor, isfound in the possession of thedebtor, or of a third person whoowns the thing.Section 4. Confusion or merger of rightsArticle 1275Confusion or Merger-meeting in one person of the qualitiesof creditor and debtor of the same obligation.-erases the plurality of objects of theobligation, and hence it will be absurd for theperson toEnforce an obligation against himself.Requisites:1.)Must take place between thecreditor and the principal debtor.2.)Must be complete and definite.Effect: Extinguishes the obligation either totallyor partially-Partial confusion- joint obligation-Debt is only extinguishedwith regard to the share of the person in whom thecharacters of the debtor andcreditor concur.-Solidary obligation-Extinguishes the wholeobligation.Revocation
-Whom the act which occasions themerger is susceptible to terminationor revocation, merger is alsoterminated or revoked and theobligation is re-created in the samecondition that it had when the mergertook place.Article 1276Merger which takes place in theperson of the principal debtor orcreditor benefits the guarantors.Confusion which takes place inthe person of any of the latter doesnot extinguish the obligation.Effects of accessory obligations:-extinguishment of accessoryobligations releases the guarantors,following the general rule that theaccessory follows the principal.-when confusion takes place in theperson of the guarantors, hisobligation as a guarantor, isextinguished, but the principalobligation subsists and can beenforced against him by the debtor.Article 1277Confusion does not extinguish a joint obligation except as regards theshare corresponding to the creditor ordebtor in whom the two charactersconcur.Section 5 CompensationArticle 1278Compensation shall take placewhen two persons, in their own right,are creditors and debtors of eachother.COMPENSATION-extinction in the concurrent amountsof the obligations of those personswho are reciprocally debtors andcreditors of each other.Advantage to the creditors-facility of payment-guarantee for the effectiveness of thecredit since if one of the partiesshould pay the obligation withoutwaiting for the payment of the other,he might be the victim of fraud orinsolvency of the other since the latermay dissipate the amount receivedwithout paying his correspondingobligation.DISTINGUISHED FROM MERGER1.)Compensation-two persons who are debtors andcreditors of each otherMERGER-only one person in whom is mergedthe character of both debtor and creditor2.)Compensation-two debtsMerger- one debtDISTINGUISHED FROM PAYMENT1.)Compensation-capacity of the parties is notnecessary since it takes place byoperation of lawPayment-debtor must have the capacity todispose of the thing paid and thecreditor must have the capacity torequire payment2.)Compensation-there can be partial extinguishment of the obligation as happens when thetwo debts compensated are of unequalamountsPayment-to be valid, it must be complete, thatis, invisibleCLASSIFICATION1.)As to its effect into:a.)Total- two obligations are of thesame amountb.)Partial-when the two amounts arenot equal2.)As to its origina.)Legal- when it takes place byoperation of law because all therequisites are presentb.)Conventional-when the partiesagree to the compensation of their mutual obligations eventhough all the requisites requiredby law for compensation are notpresentc.)Judicial-when the compensation isdecreed by the court when thereis a counterclaim or set ofinterposed by a party
Facultative- when thecompensation can be claimed bythe party who can be claimed bythe party who can oppose it andwho is the only party prejudicedby the compensation as happenswhen one of the obligations has aperiod for the benefit of one partyclone and the latter renounces theperiod with the effect of makingthe obligation due and thereforecompensate.Article 1279Requisites of legal compensation1.)That each of the obligors be boundprincipally and that he be at thesame time a principal creditor of theother.a.)Mutually debtors and creditors of each otherb.)In their own rightc.)Principals
2.)That both debts consist in a sum of money, or if the things due areconsumable, they be of the samekind, and also of the same quality if the latter has been stated3.)That the two debts are due4.)That they be liquidated anddemandable5.)That over neither of them there beany retention or controversy,commenced by third persons andcommunicated in due time to thedebtor.Reason: There is a sort of rightacquired by the third parties thatwould obstruct compensation byconverting the debtor into a judicialdepository of the thing due, therebypreventing him from delivering thething to the creditor.6.)That compensation if the debt be notprohibited by lawObligations that are prohibited by lawfrom being compensated:a.)When the obligations arises froma depositum or from anobligation of a depository or abailee in commodatumb.)Obligations that arises fromfuture support due by gratuitoustitle but support in appears maybe compensatedc.)If the obligations consist I civilliability arising from a penaloffense-satisfaction of suchobligations is imperatived.)If the obligations consist indamages caused to thepartnership they are notcompensable with the guiltypartner’s share in the profits.7.)That compensation is not waived.Article 1281Compensation may be total or partial,when the two debts are of the sameamount, there is a totalcompensation.Article 1282 The parties may agree upon thecompensation of debts which are not yet due.Voluntary Compensation-arises from the mere agreement of the parties-not only obligations which are notdue but all obligations which lack therequisites of legal compensation maybe compensated by agreement of theparties.Reason: to eliminate the obstacles tolegal compensation which prevent theextinguishment ipso jure of theobligationRequisites:1.)Each of the parties can dispose of the credit be seeks tocompensate2.)Parties agree to mutuallyextinguish the creditsArticle 1283If one of the parties to a suit over anobligation has a claim for damages against theother, theFormer may set it off by proving hisright to said damages and amount thereof. Judicial Compensation-there can be compensation of amounts not yet liquidated since the amount of damages may beProved and ascertained in the verycase where the set off is pleaded.-other requisites must be presentArticle 1284When one or both debts arerescissible or voidable,they may becompensated against each otherbefore they are judicially rescinded oravoided.Compensation of rescissible or voidable debts-valid unless the same is rescinded orannulled by the court-Reason: before judicial rescission orannulment, the debts can be compensated butthe same iscancelled the moment the courtdecrees the rescission or annulmentsince the effect of the court’s decreeis retroactive.Article 1285The debtor who has consentedto the assignment of rights made by acreditor in favor of a third person,cannot set up against the assignedthe compensation which would pertainto him against the assignor, unlessthe assignor was notified by thedebtor at the time he gave hisconsent, that he reserved his right tothe compensation.If the creditor communicatedthe cessions to him but the debtor didnot consent thereto, The latter may set up thecompensation of the debts previous tothe cession but not of subsequentdues.If the assignment is madewithout knowledge of the debtor, hemay set up the compensation of allthe credits prior to the same and alsolater ones until he had knowledge of the assignment.Effect of the assignment:1.)Where the assignment wasconsented to by the debtor2.)Where the debtor does notconsent to the assignment3.)Where assignment is madewithout the knowledge of thedebtorArticle 1286Compensation takes place byoperation of law, even though thedebts may be payable a differentplaces, but there shall be anindemnity for expenses of exchangeor transportation to the place of payment.

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