Case Analysis on Chapter 4

Extinguishment of Obligations
Dela Rea, Kimmi F.
Mapua Institute of Technology
School of Electrical, Electronics and Computer Engineering
Muralla St. Intramuros, Manila
kdelarea32@yahoo.com

This paper is a Case Analysis on Chapter 4 –
Extinguishment of Obligations. The problems assigned to
Group 8 are in the following:
Problem 1
D(debtor) owes C (creditor) P10,000 with G as
guarantor. On the due date of the obligation, T, a third
person, offered to pay the obligation of D. Can C legally
refuse to accept the payment? How about an offer of
payment from G?
Problem 2
M (maker) issued a promissory note for P10,000
in favor of P (payee) who lost the note which was found by
T who demands payment from M. M did not know that the
note was lost by P. Is M justified in paying T?
ARTICLES RELATED ON THE PROBLEMS
Article 1236
The creditor is not bound to accept payment or
performance by a third person who has no interest in the
fulfillment of the obligation, unless there is a stipulation to the
contrary.
Whoever pays for another may demand from the
debtor what he has paid, except that if he paid without the
knowledge or against the will of the debtor, he can recover
only insofar as the payment has been beneficial to the debtor.
Article 1242
Payment made in good faith to any person in
possession of the credit shall release the debtor.
person, offered to pay the obligation of D. Can C legally
refuse to accept the payment? How about an offer of
payment from G?
-Yes, C can refuse to accept the payment of T. The
third person may have the payment of P10,000 but the creditor
may insist on his right on the liability of debtor. In Article
1236 par. 1 , “The creditor is not bound to accept payment or
performance by a third person who has no interest in the
fulfillment of the obligation, unless there is a stipulation to the
contrary.” It was not stated in the problem any specified
requirement or stipulation for T, C can refuse to accept the
payment of T. Also, creditor should not be compelled to accept
payment from a third person due to personal reasons.
-Yes, C can accept the payment from G. As G being
the guarantor, which is a person who has an interest in the
obligation. Again stated in Article 1236 par. 1, the creditor
may refuse to accept payment third person who has no interest
in the fulfillment on the obligation. The guarantor has the
interest in the obligation which may lead to creditor’s
acceptance of payment from G.
Problem 2
M (maker) issued a promissory note for P10,000
in favor of P (payee) who lost the note which was found by
T who demands payment from M. M did not know that the
note was lost by P. Is M justified in paying T?
-Yes. In Article 1242, “Payment in good faith to any
person in possession of the credit shall release the debtor. “
With the possession of the promissory note of T, M should pay
the amount of P10,000 stated in the promissory note. If M did
not know that P lost the note, so it will be under the payment
in good faith. After paying the amount of P10,000 to T, M is
not liable anymore to any payments to P.

PROBLEMS WITH ANSWERS

Problem 1
D(debtor) owes C (creditor) P10,000 with G as
guarantor. On the due date of the obligation, T, a third
QUESTIONS TO THE PRESENTERS

Problem 1
If C accept the payment of T, is the obligation of D to
C can be replaced to T?

-No, if T paid to C and accepts it without the

knowledge of D, the obligation to T is not valid. It is stated in
Article 1237 that “ Whoever pays on behalf of the debtor
without the knowledge or against the will of the latter cannot
compel the creditor to subrogate him in his rights, such as
those arising from a mortgage, guaranty, or penalty.” The
subrogation will not take place to T because D didn’t know
that he paid his debt to C and C accepted it.

Problem 2
From the problem that P lost the promissory note,
then T who was not in legal age found the note and demands
payment from M.Is T has the authority to receive payment
from M?

-No, it is because T was not in legal age. Stated in

Article 1239, “In obligations to give, payment made by one
who does not have the free disposal of the thing due and
capacity to alienate it shall not be valid, without prejudice to
the provisions of article 1427 under the Title on Natural
Obligations.” With the provisions of Art. 1427, T has the
capacity to alienate. The person is not incapacitated to enter
into contracts and means that to make a disposition or
demands payment.