Ciara Faith S.

Duran MTH 4:00-5:30

BSBA FM 2nd Year March 13, 2020

Answer in Assignment

1. What are the different kinds of damages?

The different kinds of damages as per Article 2197 might be classified as the follows:

(1) Actual or compensatory;

(2) Moral;

(3) Nominal;

(4) Temperate or moderate;

(5) Liquidated; or

(6) Exemplary or corrective.

2. If obligations with a penal clause are damages, what kind of damages are they? Why?

Art. 1226

-Is one which contain an accessory undertaking to pay a previously stipulated indemnity in case of breach of the
principal prestation, intended primarily to induce its fulfillment.

In obligations with a penal clause, the penalty shall substitute the indemnity for damages and payment of
interests in case of non-compliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the
obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in accordance with the provisions of this Code.

3.What are the different kinds of payment?

The definition of payments, in accordance with Article 1232, means not only the delivery of money but also the
performance, in any other manner, of an obligation. The different kinds of payment are the following:

(1) application of payments;

(2) payment by cession; and
(3) tender of payment and consignation.

4. Name atleast six rules on payment or performance which are essential and why are they essential?

The following articles are the articles which depicts the rules on payments or performance.

Article 1233. A debt shall not be understood to have been paid unless the thing or service in which the
obligation consists has been completely delivered or rendered, as the case may be. (1157)
Importance:
Substantial Compliance

Substantial compliance means that the debtor, when in good faith, has attempted to perform the contract or
prestation, but through oversight, or any excusable neglect, he failed to make a full and complete performance,
for which the other party may be indemnified, there is already a substantial compliance and the debtor shall
recover as though there had been a strict and complete fulfillment of the obligation.

The omission or defect must be slight, unimportant, or not so material in the obligation as to frustrate the
accomplishment of the intended work. The omission or defect must also be in good faith, that is, it was not
intended by the debtor.

Right to Rescind

The right to rescind if there is substantial compliance cannot be invoked. This is because the obligee has already
benefited from the obligation.

Article 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. (n)
Importance: Presentation of receipt is a good proof of payment. Therefore, a debtor can demand the issuance
of a receipt from the creditor once his debt is paid. Consignation may be requested by the debtor in case the
creditor refused to issue the receipt. The burden of proof of payment lies on the debtor, after the creditor has
shown that the debt exists.

Article 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. (n)
Importance: The creditor has waived his right to question the defect/s by accepting the incompleteness without
making any protest or objection.

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.
Importance: If the third person pays the obligation of the debtor with the knowledge and consent of the latter,
the payor is entitled to be reimbursed for the full amount he paid. Same rule applies if the debtor knows that
the third person is making a payment but he did not object thereto or he did not repudiate at the same at
anytime.
If the payment was made without the knowledge of or against the debtor’s will, the reimbursement shall be only
up to the amount or extent by which the debtor was benefited. Consequently, if the debt had already prescribed
or had already been compensated, the payment would no longer be beneficial to the debtor. Under situation,
the payor is definitely not entitled to reimbursement from the debtor.

Article 1237. 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. (1159a)
Importance: Consequences of Payment Made by A Third Person Without The Knowledge or Against The Will of
The Debtor

1. He can only recover the payment that is beneficial to the debtor.

2. He cannot place himself to have all the rights pertaining to the debtor.

Article 1238. Payment made by a third person who does not intend to be reimbursed by the debtor is deemed
to be a donation, which requires the debtor's consent. But the payment is in any case valid as to the creditor
who has accepted it. (n)
Importance: The idea that no one should be compelled to accept the generosity of another. If the paying third
person does not intend to be reimbursed, the payment is deemed a donation which requires the debtor’s
consent to be valid.

However, if the creditor accepts the payment, its shall be valid as to him and the payor although the debtor did
not give his consent to the donation.

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." (1160a)
Importance: Free disposal of the thing due means that the thing to be delivered must not be subject to any
claim or lien or encumbrance of a third person (e.g. mortgage, pledge)
Capacity to alienate means that the person is not incapacitated to enter into contracts and for that
matter, to make a disposition of the thing due.