How Payment must be made

1. Mayroon dapat nadelivery ng thing or rendition ng service and the

very prestation ay need maideliver.
2. There should be an integrity of prestation or the payment or
performance must be completed.

Note under number 1:

A. Hindi pwede icompel ni debtor si creditor na iaccept ang isang bagay
if it is determinate thing even if same sila ng value, ng kind or kahit mas
mataas pa ang value nito.
B. In personal obligation naman, a debtor can’t substitute an act to
another act against the creditor’s will.
C. In obligations to give a generic thing, ay bawal kang magsubstitute ng
isang bagay na mas mataas o mas mababa ang value nito. Because we
need to follow the Rule of Medium quality.
D. If it is monetary obligation then, the payment must be in legal tender.
And the legal tender here in the Philippines is all notes and coins issued
by the Bangko Sentral ng Pilipinas.

Note Under number 2:

Exceptions in number 2 are:
A. According to Article (1234) If yung obligation ay naperform in a
significant extent in good faith.Then the debtor can recover na para
bang nagkaroon ng complete fulfillment ng obligation less damages
suffered by the obligee.
B. According to Article 1235, If ever na inaccept ni creditor ang
obligation kahit na hindi pa ito nafulfill or kulang pa and hindi sya
nagcomplain or nagfile ng protest against the peroformance of the
obligation, then it is deemed fulfilled na kasi it means he is ok with that
already eh parang pineperessume na po yun.

When Partial Payments be Made:

We have the rule that the creditor can’t be compelled to accept or
receive partial payments as well as the debtor can’t be forced to make
partial payments.
Unless:
A. If nakastipulate yun sa kanilang agreement or mayroon silang
kasunduan na need na mag-made ng partial payments. But kailangan I
make sure ni debtor na makakapagbayad sya in full on or before
matapos ang due date.
B. If yung utang ay mayroong part na fixed or liquidated and mayroong
part na unliquidated then pwedeng magdemand si creditor kay debtor
and pwede na rin magbayad si debtor kay creditor without waiting for
the liquidation. And in terms of the unliquidated part naman, once na
nafixed na yung amount then need na din yung mabayran par
amaextinguish yung obligation.

WHO MUST MAKE THE PAYMENT?

Yung person na magbabayad nun ay dapat napopossess nya yung
following such as:
1. Dapat free disposal of the thing due which means kanya talaga or sya
yung may ari ng property or ng ipambabayad nya.
2. He should have the capcity to alienate the thing or it means that
mayroon syang capacity to transfer ownership.
EFFECTS ON PAYEMNT IN OBLIGATIONS IF HINDI CAPACITATED SI
DEBTOR TO ALIENATE THE THING:
Not valid ang payment pag incapacitated si debtor unless under
exceptions of law. Pwede rin magdemand ng annulment of payment ang
debtor if he is incapacitated as well as if yung mga kamag-anak lang nya
ang magaact or magbabayad ng payment to the creditor. Samantalang if
walang free disposal of the thing due itong si debtor, then yung naibayad
ni creditor kay debtor ay pwedeng marecover ang payment.

Payment made by the debtor after court has ordered him to retain
debt
Payments made by a debtor to a creditor after the debtor has been
ordered by a court to keep the debt are not legal. If for example may utang si
B kay A then dumating na ang due date at di ito mabayaran ni B, then
nalaman ni A na mayroon palang pautang si B kay C then pwede magfile ng
court action si A na ihold yung payment or wag bayaran ni C si B. Then if ever
na binayaran ni C which is the third person si B, then ang mangyayari dyan ay
maiivalid yung payment nyang yun dahil may garnishment order na si court.
So in that case, maaaring pagbayarin pa rin ni A si C.

Payment by a Third person

1. we have the rule na hindi pwedeng tumanggap ng payment si creditor from
the third person unless
A. If nakalagay sa kanilang agreement na pwedeng umaccept ng payment.
B. Or if mayroon na co guarantor si debtor na katylong nya sa pagbabyad. An
example for this is yung sa pagbebenta ngsasakyan kasi may mga tinatawag
po dun na co lessee na kung saan kalimitan ay yun ay mga asawa nung
kumuha ng unit ng sasakyan. So in case na magkaroon ng unfortunate
circumstance or pag namatay yung debtor then may sasalo ng pagbabayad
sa utang.
2. Rights of a third person who makes the payment
A. If mayroong consent at knowledge si debtor then:
- pwede syang makarecover for what he has paid.
- maeentitled din sya sa subrogation or an individual has the right to enforce
another's existing or revived rights like dun sa mga mortgage.
B. If walang consent naman ni creditor
-then he can only collect the payment na nakapagbenefit kay debtor but he
isn’t entitled for subrogation.

3. Payment by a third person who does not want to be reimbursed.

A. Magiging donation na lang yung payement if may roong consent ni debtor
but;
B. If walang consent ni debtor, ay ganoon pa din, may bisa parin kahit
papaano ang payment na ito and the third person has the right to reimburse
his payment na nakapagbenefit kay debtor and he isn’t entitled to
subrogation.

To whom shall payment be made

1. To the creditor, first (the person in whose favor the obligation has been
constituted)
However payment sa inacapcitated person ay hindi valid except sa mga ff
cases:
A. If kinkeep pa rin ni debtor ang thing na nadelivered and
B. If hindi maikakaila na nakapag benefit ang payement na ito sa kanya.

2. Maari din na magmade ng payment sa mga successor sa mag heirs ni

creditor like for example namatay si creditor eh may utang ka pa sa kanya na
10 million pesos then ibibigay mo yun sa kanyang succesor.

3. And sa kahit sinong tao na binigyan ng permisio na magaccept ng

payemnt.
We have the general rule here na ang payment sa mga hindi wtorisadong
tao ay hindi valid except in some cases such as: When
 A. If hindi maikakaila na nakapagbenefit si creditor mula dito like when;
 If natapos na makapagbayad ng payment na kung saan ay
nagkaroon na ng karapatan si thrid person sa mga rights or for
example ay nasa kanyang possesion ang isang bagay.
 If binigyan na sya ni creditor ng consent to accept the payment
and
 And if nagkaroon ng isang pangyayari thru creditors action na
kung saan ay inaasume na ni debtor na duon na nga sya
magbabayad ng payment.
B. Another thing is when the debtor acted in good faith dun sa third
person na mayroong possession na sa credit then pwede na sya dun
magbayad.

Where payment must be made

1. If kung saang place ang nakastiuplate or nakalagay sa agreement ng
parties.
2. If wala namang napagusapan then mag vavary pa yan if it is determinate or
generic.
A. If it is determinate then ang mangayayri dyan ay duon pipickupin sa
lugar na kung saan nakalagay ang determinate thing.
B. If generic thing then need itong maideliver sa domicile ni creditor.

SPECIAL FORMS OF PAYMENT

There are four (4) special forms of payment under the Civil Code, namely:
(1) Dation in payment or dacion en pago, adjudicacion en pago or datio in
solutum (Art. 1245)
(2) Application of payment (Art. 1253)
(3) Payment by cession (Art. 1255)
(4) Tender of payment and consignation (Arts. 1256-1261)

 Dation in Payment
- it is the type of special form of payment na kung saan ay magkakaroon lang
ng transfer of ownership like for example may utang ako kay B na 7,500
pesos then in due date ay wala pa akong pera na pambayad then pwede ko
ibigay sayo yung cellphone ko as payment and if inaccept mo yun, it will fall
under dation in payment.

 Application of Payment
- dito papasok ang kung saang utang mo ba mag aapply yung payment mo
because ang requisites nito ay:
1. mayroong isang debtor at creditor lamang
2. Mayroon kang maraming utang kay creditor
3. And the debts should of the same kind
4. Tapos yung ibabayad mo ay dpaat hindi sasapat to cover yung
pagkakautang mo
5. At dapat lahat ng debts ay due:
We have here some exceptions which are:
- if nakastipulate sa agreemnt nila na kahit hindi due ang isang utang
ay pwede rin ditong iapply ang payment and ;
-When the application is submitted by the party for whose benefit the
term was created.

Rules in application of payment:

1. As a rule, si debtor lagi ang may right to choose the application for
payment and he must communicate during the time of payment kung saan
ba ito ibabawas na utang dahil hindi pwede na after pa nya magbayad.
Kasi hindi pwede dito ang pabago bago ang isip kasi baka magkaroon ng
confusion kung saan nga bang utang iyon ibabawas.
2. If na-exercise na ni debtor yung right nya to make the application of
payment then hindi na ito pwede pang baguhin. Unless bibigyan sya ni
creditor ng consent to change.
3. If si debtor ay ay hindi nag communicate na kung saang utang nya
to ibabawas then si creditor ay maggagawa ng isang receipt of payment
na kung saan ay duon nya iindicate at isspecify kung anong utag ang
bayaran and if naibigay nyo ito ay kay debtor and wala namang protest or
hindi sya nafile ng complain then it is presumed na inaccept nya na dun
sa specific debt na yun nailagay ang bayad nya.
4. If both creditor and debtor naman ang hindi nag indicate kung saan
 iappply ang payment then dun yun papasok sa utang na pinakamabigat
bayaran. However if same sila ng burden, then hahati hatiin lahat iyon sa
utang nya proportionately.
 Payment by Cession
- Here kumbaga in cases of insolvency na kung saan ay dito na hinahabol ng
creditors si debtor gamit ang mga ari arian nya. Here we have 4 requisites
such as:
1. Dapat two or more creditors
2. Insolvent na si debtor
3. Dapat inabandon na ni debtor lahat ng kanyang ari arian except sa mga
right and properties nya na natural na sa kanya and;
4. Dapat inaccept ng mga creditors ang kanyang abandonment over his
properties.

Tender of Payment and Consignation

The act of a debtor offering the thing or amount owed to his creditor is known
as a tender of payment. Consignation is when the debtor will deposit the sum
or thing due to the court because the creditor refuses to accept the payment
without a valid reason.
The following are the requirements for a legitimate payment and
consignment tender that will discharge the obligation:
A. There must be an existing debt which is valid and due.
B. Kailangan ng valid tender of payment or legitimate payment and it must
be completed before due date
C. Before magfile si debtor ng consignation, need nya muna inotice si
creditor na magfifile sya sa court ng consignation because without this,
consignation is void.
D. The sum or thing due ay dapat ideposit sa judicial authorities.
E. Then after consignation, ay need ulit inotify ni debtor yung mga taong
intersted sa fulfillment of obligation because if walang notification then
mavovoid pa rin ang consignation.

EFFECT OF VALID CONSIGNATION:

 If the consignment was properly made, the debtor may ask the judge to
order the obligation to be cancelled. After the creditor has accepted the
consignment or the judge has stated that the consignment was lawfully made,
the obligation will be discharged.

Debtor’s right to withdraw the sum or thing consigned

We have different scenario here which is before and after the creditor accept
the consignation.
A. Before the creditor accept it then
Then mayroon pang chance si debtor to withdraw the consignation even
without the creditor’s consent: it produces some effets such as:
1. The obligation between the parties ay mananatiling enforceable and;
2. And hindi marerelease sa obligation yung mga co guarators and
debtors.
B. After the creditor accept it then:
Then the debtor may only cancel or withdraw the consignation with the
creditor’s consent. Then it will arise to the following affects which are:
1. Yung obligation ay marerestore.
2. The creditor will lose any claim to the item that he may have.
3. Guarantors and sureties are freed unless they have given their consent.
If there are multiple debtors and their obligation is solidary, then it becomes a
joint obligation na lang po.

Tender of payment:
Any payment tender made by a party other than the primary liable party will
discharge only that party's and succeeding parties' obligations. As a result,
such a payment tender would essentially safeguard the payer without
releasing the payer from all obligations relating to the written agreement.

When consignation is valid, even when there’s no previous tender of

payment
A. If si creditor ay unknown or hindi sumipot sa place na napagkasunduan
nilang babayaran ang payment.
B. If incapacitated si creditor to accept payemnt during the time na due ang
obligation
C. If hindi sya nagbigay or tumanggi na magbigay ng resibo at
D. If mayroong 2 or more na tao na nagcaclaim na sila ang dapat na bigyan
ng payment or they have right to collect.

Article 1251:
Par 1: says that in what place the payment shall be made.
Par. 2: says that if hindi nakastipulate sa obligation and if it is determinate
thing, then kung saan nakalagak or naroroon ang thing na idedeliver from the
time it was constituted.
Par. 3 says that in other case like if it is a generic thing then delivery must
be made in the debtor’s domicile..
Par 4 says that if biglang nagbago ng domicile si debtor and acted in bad
faith, then the thing must still be delivered and the debtor must bear the
additional expenses.
Par 5 says that ……….

Venue
-means that ito yung lugar na kung saan dito ka pwede magfile ng action or
court suit.

Domicile
- on the other hand, ito ung residence kung saan palaging namamalagi ang
isang tao.

Residence
- ito ay kung baga parang simply an element of a domicile.

Article 1252: about application of payments

Article 1253: kailangan munang mabayaran ang mga interests if ang payment
ay nagpoproduce ng interests before yung principal obligation.

Article 1254: The debt which is onerous to the debtor duon ilalagay ang
application of payment

Article 1255: Payment by Cession