Art. 1250.

In case an extraordinary inflation or deflation of the currency stipulated

should supervene, the value of the currency at the time of the establishment of the
obligation shall be the basis of the payment, unless there is an agreement to the
contrary.

Inflation - It is a sharp and sudden increase of the money or credit or both without a
corresponding increase in business transaction (Webster’s Dictionary). Since the value of the
money here tends to decrease, the natural result is an increase in the price of goods and
services.

Deflation – Is the opposite to Inflation.

Non-Applicability of the Article Today - the article is speaking of the inflation or deflation
of the “Currency Stipulated” in this aspect the article is relating to Art. 1249, which would mean
the currency other than the Philippine Peso. If the article is to be construed in a literal since it
cannot be made use of in the present, for R.A. 529 provides that no foreign currency can be
stipulated. However, if by extension a different interpretation could rise to an adage of “In case
of extraordinary inflation or deflation of Philippine Currency”.

All in all the article is talking about safeguards against the inflation or deflation of the currency
to be used under the contract. However, there is a caveat, that Art. 1250 will only apply in cases
where there is a contract or agreement involved. It cannot be applied in cases where the
obligation arises from law, independent of contracts.

Art. 1251. Payment shall be made in the place designated in the obligation.

There being no express stipulation and if the undertaking is to deliver a

determinate thing, the payment shall be made wherever the thing might be at the
moment the obligation was constituted.

In any other case the place of payment shall be the domicile of the debtor.

If the debtor changes his domicile in bad faith or after he has incurred in
delay, the additional expenses shall be borne by him.

These provisions are without prejudice to venue under the Rules of Court

Where Payment must be made:

1. If there is a stipulation – then the payment is to be at the place DESIGNATED

2. If there is NO stipulation:

a. If it is to deliver a determinate specific thing, then at the place the thing might be,
either habitually or usually, at the time the Obligation was CONSTITUTED. If
temporary e.g., when the thing is being shipped, then the payment should be made at
the domicile of the debtor.

b. If the obligation is to deliver any other thing (generic, or to give money, or obligation
is personal) then the payment should be made at the domicile of the debtor.
Art. 1252. He who has various debts of the same kind in favor of one and the same
creditor, may declare at the time of making the payment, to which of them the
same must be applied. Unless the parties so stipulate, or when the application of
payment is made by the party for whose benefit the term has been constituted,
application shall not be made as to debts which are not yet due.

If the debtor accepts from the creditor a receipt in which an application of

the payment is made, the former cannot complain of the same, unless there is a
cause for invalidating the contract.

Special Forms of Payment

There are four special forms of payment:

1. Application (or “imputation”) of payments ( Article. 1252 Civil Code)

2. Dation in payment (“adjudication en pago” or “datio in solutum”) Art. 1245, Civil Code.
3. Assignment in favor of creditors (“cessions”) Art. 1255, Civil Code.
4. Tender of payment and consignation. Art. 1256-1261 Civil Code.