ART.

1275 - 1277 Confusion

What is confusion/merger?

ART. 1275 The obligation is extinguished from the time the characters of
creditor and debtor are merged in the same person. (1192a)

Confusion or merger is the meeting in one (1) person of the characters of creditor
and debtor with respect to the same obligation.

Why is confusion treated as a mode of extinguishing obligations?

The enforcement of the obligation becomes absurd if a debtor is his own creditor,
since a person cannot claim payment from himself.

Requisites for valid confusion or merger:

1. Must take place between the principal debt and creditor.

2. Must be complete.

Examples:

1. Marites owes Axel ₱300,000, Axel dies and in his will, he makes Marites his
only heir.

Effects of Merger when it takes place:

ART. 1276. Merger which takes place in the person of the principal debtor or
creditor benefits the guarantors.

Confusion which takes place in the person of any of the latter does not
extinguish the obligation. (1193)

a. In the person of principal debtor and creditor – It extinguishes the principal

obligation. It benefits the guarantors because the accessory obligation of
guaranty is also extinguished. This is in accordance with the principle,
“Accessory follows the principal.” (ART, 1276, par. 1)

b. In the person guarantor – It extinguishes the guaranty but leaves the principal
obligation in force. (ART. 1276, par. 2)
Effects of Confusion:

a. In a Joint Obligation – the confusion will only extinguish the share that
corresponds to the creditor or debtor in whom the two characters concur.

b. In a Solidary Obligation – Merger in the person of one of the solidary

debtors shall extinguish the entire obligation because it is also a merger in
the other solidary debtors. (ART. 1215).

Remember!
In a solidary obligation there is only one obligation and every
debtor is individually responsible for the payment of the whole
obligation.

ART. 1337, 24 Undue Influence

What is Undue Influence?

Article 1337. There is undue influence when a person takes improper advantage of
his power over the will of another, depriving the latter of a reasonable freedom of choice.
The following circumstances shall be considered: the confidential, family, spiritual and
other relations between the parties, or the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or was ignorant or in financial distress.

Influence of a type that so dominates a party's mind that it prevents him from acting
rationally and willfully to do what he would have accomplished if he had been free to use his own
judgment and discretion.

Circumstances to be considered:

(1) Mental weakness

(2) Confidential, family, spiritual and other relations between the parties
(3) Financial distress of the person alleged to have been unduly influenced

Example:

1. Akira, an occupant, needs ₱20,000 to pay her landlord, who is attempting to evict her
due to nonpayment of rent. Akira tries to borrow from Sky, instead the latter advises
her to sell her TV for ₱20,000. Akira has no one to turn to for assistance.

Effect of an Undue Influence:

When an agreement is reached through undue influence, the agreement becomes a contract that
can be canceled at the parties' discretion.

Any such contract may be set aside either completely or on the terms and conditions that the court
deems just if the party who was entitled to avoid it received any benefit from it.

REMEMBER!

● The influence must be undue or improper to avoid a contract.

● Persuading someone to write their will in a certain way isn't the only form of undue
influence. The power must be intimidating or coercive.

ART. 1232 - 1251 Payment

What is Payment?
 Article 1232. Payment means not only the delivery of money but also the
performance, in any other manner of an obligation.

Payment is the fulfillment of a financial obligation. A debtor is someone who owes

money to someone else, and a creditor is someone who owes money to someone else.
The obligation can arise in a variety of ways, but it is most often the result of a business
transaction or contract between the parties. The delivery of money is considered payment.

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)

When debt is considered paid:

(1) Integrity of prestation - A debt to deliver a thing or render a service is not

considered paid until the thing or service has been delivered or rendered in its
entirety, as the case may be.
(2) Identity of the prestation - The prestation due must be delivered or performed.

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.

Requisites:

(1) There must be substantial performance

(2) The obligor must be in good faith

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.

Requisites:

(1) The obligee knows that the performance is incomplete or irregular

(2) He accepts the performance without expressing any protest or objection

2 PLACES OF PAYMENT

1) At place agreed upon

2) If w/o agreement
a. Object is INDETERMINATE - paid at domicile of debtor
 b. Object is DETERMINATE - Place of thing at the time of constitution of
obligation

4 SPECIAL MODES OF PAYMENT

a. Dation in payment (Art. 1245) - The debtor alienates property in favor of the
creditor to satisfy monetary obligation.
b. Application of payment (Art. 1252) - The destination of the debt to which payment
shall be applied when the debtor owes several debts in favor of the same creditor.
c. Payment by Cession (Art. 1255) - Abandonment or Assignment by the debtor of all
his properties in favor of his creditors so that the latter may sell them and recover
their claims from all the proceeds.
d. Tender of Payment and Consignation (Art. 1256) -

(Tender of Payment). The act of the debtor offering to the creditor what is due him.

(Consignation). The act of disposing the sum or thing due with the judicial
authorities whenever the creditor refuses without just cause to accept the same, or
in cases where the creditor cannot accept it.

a. Application of payment
- Designation of debt to which payment must be applied when debtor has
several obligations of same kind in favor of same creditor.

4 REQUISITES OF APPLICATION OF PAYMENT

(1) Only one debtor & creditor

(2) 2 or more debts, same kind
(3) All debts are due
(4) Insufficient payment to extinguish all debts

3 RIGHTS TO MAKE APPLICATION OF PAYMENT

1) Right belongs to the CREDITOR

2) If debtor does not avail, creditor can give him receipt designating the debt from
which payment will be applied .
3) If debtor accepts the receipt, He cannot complain UNLESS There is just cause to
invalidate the contract.

EXAMPLE:

1. Gio promised to pay Jeziel ₱150,000 on March 10. Gio is only giving ₱120,000.
Jeziel has the right to refuse because the fulfillment is incomplete.
REMEMBER!

Payment also include not only the delivery of money, but also the giving of a
thing, the performing of an act, or the failure to perform an act.