LAW Week 1 Finals

Extinguishment of Obligations
1. Part 1 - Payment or performance (Art. 1232-1251)
2. Part 2 - Special modes of payment, loss of the thing, condonation, and confusion (Art. 1252-1277)
3. Part 3 - Compensation and Novation (Art. 1278-1304)

Article 1231
Obligation are extinguished:
 By payment of performance;
 By the loss of the thing due;
 By the condonation or remission of the debt;
 By the confusion or merger of the rights of creditors and debtor;
 By compensation
 By novation

Article 1231
Other causes of extinguishment of obligations, such as annulment rescission, fulfillment of a resolutory condition, and
prescription, are governed elsewhere in this Code.

Article 1232
Payment means not only the delivery of money but also the performance in any other manner of an obligation.
Payment or Performance
1. Who can pay? 4. How to pay?
2. Who to pay? 5. Where to pay?
3. What to pay? 6. When to pay?

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 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.
WHO ARE INTERESTED PERSONS?
 Guarantors

 Sureties

 Preferred Creditors

 Owners of Securities

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.
Article 1240
Payment shall be made to the person in whose favor the obligation has been constituted or his successor in interest, or
any person authorized to receive it.

Article 1241
Payment to a person who is incapacitated to administer his property shall be valid if he has kept the thing delivered, or
insofar as the payment has been beneficial to him.
Payment made to a third person shall also be valid insofar as it has redounded to the benefit of the creditor. Such
benefit to the creditor need not be proved in the following cases.

1. If after the payment, the third person acquires the creditor’s rights;
2. If the creditor ratifies the payment tot the third person;
3. If by the creditor’s conduct, the debtor has been led to believe that the third person had authority to receive the
payment.
Article 1244
The debtor of a thing cannot compel the creditor to receive a different one, although the latter may be the same value
as, or more valuable than that which is due.
In obligations to do or not to do, an act or forbearance cannot be substituted by another act or forbearance against the
obligee’s will.