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    Oblicon Chapter 4

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    jecille magalong

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    © All Rights Reserved
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    I chapte™ ae _xtinguishment of Obligations False Part1 ra case of extraordinary inflation af deflation, th at the time of the establishment of the obligation ace of the curren the payment when no agreement ta the contrary na O® the basis for application only to contractual obligations,» © S*Pwlated, has strict i A contractual agreement is not needed for th inflation to be taken into account to alter the aig. In dacion en pago, the debtor isin a state of In dacion en pago, what is delivered by the considered as the equivalent of the perfo uch ‘The general rule is that the burden re le effects of value of the canke Partial or relative insovy a debtor is merely a thingt to be Tmance of the obligation, sts on the defendant to Prove’ J ayment. ¢..@ The debtor's right to apply payment is mandat wh hy ‘ory. piek The epg ‘e apply payment cannot be waived. p RGC8. In case the debtor does not make the applicati creditor does not also state in which apollection sf nae the ss then application is made by operation of law, made, fase ecu ‘by cession, the debtor is not necessarily in a state offinancial! % UC 10, The law provides that the delivery of checks “shall produce the effect of payment only when they have been deposited.” F Wega. ‘The rule is that the creditor is bound to accept payment by a third person who has no interest in the fulfillment of the obligation. ‘ Fale fh In dacion en pago, the debtor offers cash to the creditor who accepts it as equivalent of payment of an outstanding debt. #>.¢ 13, Dacion en pago partakes of the nature of a contract of sale, where the thing offered by the debtor isthe abject ofthe contract, while the debs : the purchase price. for the Fis 14. The extrajudicial expenses requ hall ba. 7 account of the creditor. . 1 tender, Fa 9 As a general rule, a check constitutes aaa rdinary ired by the payment but a creditor may validly refuse it. ce of the fact of Tet 6 The ile is that a receipt of payment is the best eviden ; payment. ; n is valid. Tuy, Asarale, payment by an incapacitated aang Saiminister his propery : aP wcapacital “naofar as the Fi 18. Payment to a person who incapa delivered, oF insofar 3S id i kept shall be not valid if he has X° | payment has been beneficiary person in possessi Iuc Y8. Payment made in good fal «the pace ofbusi F, shall release ihe Set shall be made in False 90, As a general rule, Pa debtor. \ jon of the credit ss of the Chapter 4- extinguishment of Obligations of renunciati ‘True or False Part 2 allowing the presumption LION In the _ ¥ The rationale for ic instrument IS that, unlike that of q ibl f the evidence of credit, delivery of a pl tone copy ol strut there could ea debt shall not extinguish the Access, cise The renunciation of the P f the guaranto; obligations. in the person of any ol FS, th, If the confusion takes place al obligation. he princi tyestingsbnens if the confusion takes place in one of the Join tion is entirely extinguished. ‘ aaa is ceded by the debtor is the universality False In a joint oblige 7 - debtors, the principal J fois 5. Inpayment by cession, 5 ye ort og while in the possession of the debtor, it shal] his fault. resumed that the loss was due to 2 A iene a dishonest purpose and conscious doing of wrong” 4 Sal resumed. = pee and acceptance of a movable, the value of which exc P5,000,00, must be made in writing, otherwise the same\shall idable. Ftee 10. Wish the notice first announced to the persons interested in | fulfillment of the obligation, the consignation as a payment is voidable. Fase YA. The factthat in previous year’s payment in check was accepted will its creditor in estoppel from requiring the debtor to pay his obligationin, cash. \ vag 7%, Payment in check by the debtor may be acceptable as valid, if no prom objection to said payment is made. “i . If, the consignation having been made, the creditor should authorize th debtor to withdraw the same, he shall lose every preference which he| Bs may have over the thing. 14. An obligation to pay money is Seneric; therefore it is excused by] 2 fortuitous lass of any specific property of the debtor. | Pole . The delivery. of a public document evidencing a credit, made.voluntarily by the creditor to the debtor, implies the renunciation of the action which the former had. Against the latter, Fake, 4 Tender of payment may be' fu \. a settlement before Proceeding t False 4 There should be notice i tod : " # me by the Civil} Code. neeralier la wot Y% The rationale for Consignation is nce of at obligation becomin, ioe aan tae d oe ' More onerous to the debtor by reason of causes 00 Tender of payment is not the antecedent of Consignation. . Where the obligation consists in the payment of money, the failure of th debtor to make the Payment not relieve him of his liability. Pr eeenat ot — t ei SHC OF True or False Part 3 Obligati fase 2. Compensation sh, 1% Lb depositum or from’ e® Proper ‘01 wh commodatum, — "® °bligations hei the debts arises from a fue 2 ion i leposi ue 2 Novation is never Presumed Positary or of a bailee in express agreement o and the anim unmistakable. f the Parties, or by ‘ree novandi, i i, must appear 'F acts that are tao clear es ute Ina solidary obligation, if i if the confusi debtors, the entire obligation is extinguished. ue 6 Asa general rule, no form of * ‘wor toa novation, "ds or writing is necessary to give effect vy, Novation diaby prosmet cg concept, what actuall i abjective novation ofthe obligation: ce acon en Pago isan % The relationship of the depositors and the Bank or similar institution is that of creditor-debtor. Such deposit may be setoff against the obligation / of the depositor with the bank or similar institution. . Compensation can take place where one claim is still the subject of litigation. . Aclaim is liquidated when the amount and time of payment are fixed. 2. A debt is an amount actually ascertained. . Aclaim is a debt in embryo. It is mere evidence ofa debt and ne thru the process prescribed by law before it develops into what erly called a debt. f Conipencarton may be total or partial. When the two debts are of the same amount, there is a paf . In compensation, there must be two persons, . In confusion, _ creditor and debtor. be at least two obligation. compensation. ; : who, in their own right, are sons in WI 1 it i the mutual inde In compensation, there mus the parties agree to U Wwe Yi Ci y onal compensation ocenrs wn capensil their mutual Cee hment of their credits OF ith ¢ legal requisites. alleetions even intheabsence SOE L 8 eator who has a claim Jue ee sean compensation be set up gal ‘#9. Neither can co! itous title. in civil liability for support due bY oar one of the debts consists in cH as compe! * 20. Debts can be T effense. arising from a pen® inapter se eee Multiple Choice Questions 4 1 hall also be vai, | a third person s| cl insu Payment ets benefit of the creditor, Such benefit to thet t ty redoundet cated in the following cases, excep; “hat need not a. Subrogation b Waiver cc, Ratification dd. Bstoppel ing is nota special form of Payment? Which of Bees & Consignation ‘ scoxcnion of payment 4. Dacion in payment ‘it iswhen a property is alienated to the creditor in Satisfaction ofa, ty | in money. a Cession in payment b Barter © Option contract d. Dation in payment When the amount is known or is determinable by ins Pection of the terns and conditions of the relevant Promissory notes and related & Debtis due b Debt is unliquidated © Debt is liquidated @. Debtis demandable The sharp increase of, a } © Extraordinary inflation Extraordinary d. Inflation deflation money or credit, or both, without a corresponding increase in business transaction, Deflation when there iS a decrease 9 i he purchasing power of the Philippine curren T increase in the pu: a lctuation in the value yy vec? ‘5 unusual or beyond the macd Said currency, and such increase of dec a hy contenu OF the pa otably foreseen or was manifestly beyond obligation. * Partles at the time of the establishment 2 Deflation Extraordinary © Extraordinary inflation deflation 4. Inflation 0 F tor extraord te following require ation (or deflation) to affect an obligato "UISt be proven, except; 370 qurte 4- Extinguishment ‘of Obligations a ‘That there was an official declaratio deflation from the Bangko Sentral jn, bh. That the obligation was contractual That the parties expressly agreed to co © gtraordinary inflation or deflation, MF the effects af the ¢. That the obligation was nat contractual in nature. Mm Of extraordina, 8 Pilipinas (BSP) in nature, NY Inflation of are the rules on the place of payment of Themen shall be made in the place stiles yee ED pH there fs no stipulation and the obligation is. to delive detcrminae thing, payment shall be made wherever thee be at the moment the obligation was constituted, might « Inany other case the place of payment shall be the domicile of the debtor. d Inany other case the place of payment shall be at the municipal trial = court where the obligation was perfected. ‘The designation of the debt to which the payment must be applied when the debtor has several obligations of the same kind in favor of the same creditor. a. Dacion en pago b, Cession in payment «Tender of payment and consignation a. Application of payment In tender and consignation, if after consignation is made, the creditor allows the debtor to withdraw the thing deposited in court, which of the following is incorrect? a Co-debtors, guarantors and securities are released from the obligation unless they consented. b. The obligation remains to subsist. & The obligation is extinguished. & None of the above, / » The following are spectal forms of payment, except: © Application of payment Check encashment © Dation in payment / © Payment by cession a ; x following are requisites of application of payment, except: b ptt Must be only one debtor and only one creditor. Are Bust be one of more debts of the same kind. a qyitthe debts must be due, ;mOUnt paid by the debtor must not be sufficient to cover the ‘Mount of all the debts, _ at of obligations an obligation has a claim fo, +e epatis 103 set it off by proving his rig ty oft the 5 B bee the aie anu re an 2 aces a Bee compensat on josicia nal compens e, except sation cannot take pa obligations of a depositay o} Comm one deDt ATES he obligations of a bailee in via when one aebt arises b commodat arises because of a claim for support due to ¢ Whenone’ ad rouse detarises from a bak deposit 15, The transfer of Fights, especially contractual rights, from one nay another. : a Contractof sale # ee ee b. Contract of barter t cosstonin payment ‘The following debts cannot be campensated, except: a Contract arising from contract of depositum. b Contract arising from contract of commodatum. Contract arising from contract of support. d Contract arising from contract mutuum, A Yt ls constituted from the moment a person receives a thing belonging —e the obligation of safely keeping it and of returning the Contract of deposit e Contract of guaranty D 18. One of the 0 that the: b. Contract of surety d. Contract of loan plaid ‘another, either something nat consumable) u deposit Same for a certain time and return it. © Contractor & Contract of commodatum Peay Contract of loan % 29 compres Behan dispensable | {aaretal cg a educatio for sustenance, dwelling, clothing i i spt the faniy. and transportation, in keeping with PPO 4 a Cetin, d. Suresy a May be OHea tie gy, } © Guaranty | T Principal canis... | Ae extinguishment of Obligations fe . owt substituting the person of the debtor, ubrogating a third person in the rights of None ‘of the above. the creditor, (i hment of an obli; |, of isthe extinguisl in obligation by the bh? the obligation by a subsequent one which angie oF change of ist, either by changing the object or principal ene the supstituting another in place of the debtor, or by subs tions, or by son in the rights of the creditor. rogating a third condonation Merger of rights Novation a. Conpenestee Php 1M. A proposed to B that C will ¢ aged from all liabilities to na ie Lpdtalines an Btried to collect from C, he found out that he was at liable to B because of the substitution of C in his se ledge of the insolvency despite it being of public 5 aowes B 1F will be rele Later, when. a Aisno longer if he had no knowl knowledge. bp. Aisno longer liable to B even if he had knowledge of C's insolvency rovided it is not of public knowledge. Ais still liable to B even ifhe was the one shall substitute him as debtor. d Ais no longer liable to B despite the insolvency of C unless said insolvency was of public knowledge or known to him when he delegated the debt. $ Zé Is the transfer of all the right substitutes him in all his rights. Annulment a Substitution b. Subrogation d. Ratification 4 24, ttispresumed that there is legal subrogation: (xcept a When a creditor pays another creditor who Is preferred, ever without the debtor's knowledge: 4. When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor. © When, even without the knowledge of the interested in the fulfillmentof the obligation Pa?* without P to the effects of confusion as to the latter's share. 4 When, even without the knowledat of the debtor, a person not interested in the fulfillment of the obligation pays: ¢ undertake reciprocal iding litigation. OF putal who proposed to B that C ts of the creditor to a third person, who debtor, a person rejudice & Are contracts, obligations t© , whereby the partie: "soe their iferences thus a¥0H en é ‘ady commenced. Mutual desistance chapte hi < notonly ition. A ¥ Sher manner, ofan obliga c. Merger of rights h 2. Pa D x pment 1 eh- etn bh. Waiver a men! é conan of Agreement . delivery of money but also the Performance + d, Compensation b. Condonation following shall produce the effect of payment of debts. The follo' ‘i ivery af C4 te rere ‘central bank notes 6 Delivery of promissory note a Answer not give execut romissory note in favor Y and the promisso X executed 2 Pid subsequently is indorsed in favor of X.the gi fi tiated by Y ingui voniy the promissory note is thereby extinguished because there a Confusion or merger b. Novation c. Remission d. Answer not given Acertain C requested X to sell a specific car for 580,000. Y borrawedsay car from X for two days but instead of returning the car as promised, told X to buy the car from C for 500,000 and that Y would pay X aftery returns from Davao. Subsequently, C executed a deed of sale coveringthe car in.X’s favor for 500,000 for which X issued three checks in favoroiC X thereafter executed a deed of sale in favor of Y. When Y returned fron Davao, he refused to pay X the amount of 500,000 saying that suid amount would just be deducted from 566,000 obligation X had withY. 1 . her cross-examination categorically admitted that she is indebted In his Answer ¥ contended that; ber 28 Pr ‘at; 1) as early as Septembe ected i ateady sold the car to X for 500,000; 2) at the te! wn deed of sale in his favor on March 4, 2016, X was already!* ofthe deed of sale from C; 3) the amount of $00,000 was Paid by way of datio rr nin «ich X’s abligaue® with Y: 4) the contract rion lent to partially extinguish X's abligi the mode of red into was a true sale of a motor vehicle? time ofthese was that of dation in payment agreed upon # a. There js : deleryofs eat nor Pensation as one of the obligations consis 4 ot a sum ie ‘pal compensation fas of money, yareot TSonally both cred hot taken place because X and Hor and debtor of each other. rert- extinguishment of Obligations char" There is no legal compensation as both monetay become due and demandable. metary obligations had not 1 , the 500,000 which Y d. By operation of law, the 500 owed X is off-set 566,000 owed by X (o ¥, leaving a balance of 866,000, which’ akong pay with 12% interest per annum. oul gp. A debt shall not be understood to have been paid unless the thing or 5 service in which the obligation consists has been completely delivered orrendered, as the case may be, Principle of integrity ¢. Principle of loyalty © principle of honesty d. Principle of delivery # Aexecutes a promissory note in favor of B who subsequently indorsed it ° 7 ig favor of A. The obligation to pay the promissory note is thereby extinguished because there is? confusion or merger c remission a compensation b, novation d. 3 payment shall be made to the following, except: a. Creditor c. Any person authorized to b. Creditor’s successor in receive it interest d. Any person 4 ls the definitive act of offering the creditor what is due him or her, together with the demand that the creditor accept the same. a. Consignation c. Dation in payment b, Payment by cession d. Tender of payment hte thing due is deposited and placed at the disposal of the judicial authorities for the creditor to collect. a Consignation c. Dation in payment b. Payment by cession d. Tender of payment - pte act of depositing the thing due with the court or judicial authorities it lenever the creditor cannot accept or refuses to accept payment, and generally requires a prior tender of payment. a Payment by cession c. Consignation Dation in payment d. Tender of payment FQca aga that X and Y violated their amended lease contract over a insufy rez "ben they did not pay the monthly rentals thereon. X and ¥ accor, Heit Ronpayment of rentals on the ground that Q Co. refused to ept their payments, Can X and Y justify their nonpayment of rentals on the ground thar QCo. refused to accept their payments? tinguishment ‘of Obligations ne control of X and ve «. becaunse tx beyond the control of X and ¥ QC yy a Ye ont gecept thelr Day eho have insisted on giving the), tb, No, because tes , : my force of contract and com, i ene le of obligatory Pliang, ‘on the principle 7 ang good oi -annot justify their honpayment of rentals beeay ¢ Xand Ye Hetivered the sum of money to.Q Co, by maiy Y* they should have not justify thelr nonpayment of rentals gn ¢ © gn a Nand Y Sahio accept their payments because if {he redding Pty QCo. refused athas been made refuses without just Cause ty Won san oT aan be released from responsibility by the Consiga,” . the 4 the sum. i h, without receivin lity, by virtue of which, iB any ¢ Oe ements the enforcement of the obligation "ae, seq % + Which ol ky extinguished ae ere or in that part or aspect of the Samer Mm : Condonati c. Compensation b Confusion d. Novation o The following are requisites of condonation, except: . * a. Itmust be gratuitous. b. It must be accepted by the creditor. © The obligation must be demandable, a The parties must have capacity, 4 BP ‘The following are requisites of condonation, except: a Itmust be onerous. The parties must have capacity. The condonation must nat be inofficious. The condonation must comply with the forms ‘of donation, if itisan express condonation. ares & re Is the meeting in the same Person of the qualities of creditor and debtor with respect to one an id the same obligation, @. Condonation ¢, Compensation 6. Confusion d. Novation 0 tion for annulment of contracts against % fats By ouined that X Bank induced them to aval! of fe Proposal and sigeegty OM terest tates” go they accepted X dates. They, chev bank's pre-printed promissory notes on vl Identical ete ‘maware that the documents conta interest rates Without their goons X Bank authority to in 4-Extinguishment of Obligations X Bank, asserted that M,N, and 0 knowingly accepted all the terms and conditions contained in the promissory notes. In fact, they continuously availed of and benefited from X, Bank's credit facilities for five years. After trial, the Regional Trial Court (RTC) upheld the validity of the promissory notes. The trial court, took judicial notice of the steep depreciation of the peso during the intervening period and declared the existence of extraordinary deflation, a. There is no extraordinary deflation contractual in nature. b. There is extraordinary deflation because the increase in the purchasing power of currency is manifestly beyond the contemplation of the parties, c. There is extraordinary deflation becau: in the purchasing power of currency, @. There is no extraordinary deflation becau: of the peso, the BSP never declared a situatio) Moreover, the parties did not agree to because the obligation is not se there is an unusual increase ise despite the devaluation n of extraordinary inflation. recognize the effects of extraordinary deflation h p. Isaclaim which has been formally passed upon by the highest authority. ‘a Debt ce. Liability b. Payable ad Claim : I , & et either by chan, # tis mere evidence of a debt and must > Occurs when the parties aj * Inorder that a n Pass thru the process prescribed properly called a debt. ©. Liability d. Claim by law before it develops into what is a Debt b. Payable gree to the mutual extinguishment of their credits or to compensate their mutual obligations even in the absence of Some of the legal requisites, & Conventional compensation b. Involuntary compensation ce Legal compensation d Megal compensation ‘ ‘ovation can take place, Tequisites are indispensable, except: ere Must be a previous void obligation. ' There must be an agreement of the parties concerne contract. & There must be the e: ere must be the vy: the concurrence of the following d toa new ‘xtinguishment of the old contract. alidity of the new contract. ging the object or the principal conditions? *rsonal novation Chapter 4 - Extinguishment of Obligations b. Real novation Subjective novation d, Mixed novation Novation by substituting the person of the debto, person to the rights of the creditor. " a, Objective novation Ta b, Subjective novation «Real novation d. Mixed novation OF sub; C ao P inc. appointed B Corp. as one of its dealers of elect, cables. During the period covering December 2015 ty ar * B Corp, purchased, on credit, from P, Inc. various ef ctr 1, ane cables in the total amount of P4,102,438,30. On Septemma Corp. paid P, Inc. the amount of P300,000, thereby lewien 2k account on the aforesaid deliveries of P3,80247870, y0° occasions, P. Inc. wrote B Corp, demanding payment of its om obligations, In response, B Corp. wrote P, Inc. on October 2 requesting the latter if t could pay its outstanding account noe installments of PS00,000 plus 1% interest per month commence. October 15, 2016 until full payment. P, Inc, hawever, rejected Be, offer and accordingly relterated its demand for the full paymuse 4 Corp's account. s a. B Corp. can compel P, Inc. to accept payment in installments, Bop is mot bound to fulfill what has been expressly stipulated therein b. B Corp. can be allowed to perform its obligation under such contrac in parts because their contract has the force of law between them. c. P Inc's right to reject B Corp.'s offer to pay in installments is core: because the creditor cannot be compelled partially to receive te prestations in which the obligation consists. d. Pnc'sright to reject B Corp.'s offer to pay in installmentsis incor because the object of the obligation can be performed in parts. the princi ‘ J 7 Novation is made either by changing the object or the Pi, conditions and by substituting the person of the debtor oF sub third person to the rights of the creditor. a. Objective novation c. Real novation 'b, Subjective novation d, Mixed novation od , 597“When an old obligation is terminated by the ereation of ane takes the place of the former. a. Total novation c. Modificatory novatio® ». Partial novation d. None of the above 378 ‘ extinguishment of Obligations cert when the old obligation subsists to th futh the amendatory agreement, that remains compatible Total novation is Modificatory navation inctive novati ni Ex on 4. None-af the above The initiative for the change does not come fro I ? without the Knowledge of the debtor, since it Saleen aiird pers assumption of the obligation, sofa Sic were a, Delegacion . Subroy D Subrogation b. Expromision 4d. None of the above { the debtor offers, and the creditor accepts, a third pe f to the substitution and assumes the abligation a a Delegacion Subrogation b, Expromision d, None of the above 5 ‘Means the new debtor, a Delegado ©. Delegatario b. Delegante d. None of the above 5 Means the original debtor a Delegado c. Delegatario b, Delegante d. None of the above Means the creditor a Delegado c. Delegatario b. Delegante d. None ofthe above | 57. Cis the creditor of D in the amount of P50,000. G is the guarantor of D. D paid C partially with P20,000. A, not knowing the partial payment of D and against the will of D, paid C the amount of P50,000. What isthe effect of this payment in the obligation? 2. The obligation is extinguished. A cannot recover any amount from D, but A can demand reimbursement from G in the amount of P50,000. 4. The obligation is extinguished. A can demand P30,000 from D because this amount benefited D, or, A having been subrogated into the rights of C, can proceed against G. The obligation is not extinguished. A’s paymen! will of D does not extinguish the obligation. . | The obligation is extinguished. A can demand P30,000 from D, but if D cannot pay, A cannot ordinarily proceed against the guarantor G because A is not entitled to subrogation. ftv (231,121 t being against the 4 over a. commercial space Vy *.Xinc entered into a Contract of Lease with Y ded to operate a branch. for the year 1999-2002 on which X Inc. inten Chapter 4 - Extinguishment of Obligations While X ine. weas able 10 S€CUFF the necessary jy the year 1999, (t failed! to commenice business gue ™*® ang 3000, X tne’s application for renewal per en trarance was “held M-ADEYANI UNIT fares tang tacilitien” nay ence, X tne: a8 UNAbIE 10 aperate Fag, i ocoes. X Inc. cormmunicated its Intent to termingn Y who, however, did not accede. In August 2¢ time, purportedty informed ¥ OF 8 Intent 06 termyig ste in fact stopped paying rent By letter of Marcy te demanded payment of rentals from X Inc. X tie den) 4 Xn is tot fable to pay rentals as the Service has by as to be manifestly beyond the contemplation of the may also be released therefrom, in whole or in parg, Parties, the bX Ing. is not liable because the doctrine: of unfoes, applicable in the present case. PSe¢n X Ine. is able. Its failure to renew these perm ‘authority for the succeeding year, is notto be construed event. A. Xine is lable being a lessee. MCS, Tce ana D rs X Inc. entered into a Contract of Lease over a build from April 16, 2010 to April 15, 2015. Upan pleats arnt refused to vacate the property despite repeated demands. “e2%t January 28, 2026, ¥ filed a Complaint against X. This, og On July 3, 2016, court rendered a Decision, in favor of y court orders X Inc. to pay reasonable compensation in the 4.00% 'P5@5,640 a month as of April 15, 2015 until possession af then premises i surrendered te ¥ Co. Then, X Inc. filed with the cour to Consignate P1,171,280 in favor of ¥ Co. and to submit the (8 fap decision. The amount of F1,171,280 represented the reasonaiy compensation for the months of July and August 2016. X, Inc. had bee in possession of the property since July 3, 2016, when the Decision was promulgated, |s the consignation proper? a. Yes, because there was unjust refusal to accept, b. Yes, because there was a notice of consignation given to all persoay interested in the performance of the obligation. ¢. Yes, because the amount due was placed at the disposal of the cour, d, No, because X, Inc. failed to prove that any of the requirements for proper consignation was present. D Co. got a loan from the former P Bank Corp. in the amourt 720,000. The loan was secured by a real estate mortgage. In 1981.48 Corp. rented an office space in the building constructed on the prope covered by the mortgage contract, with the conformity af morte 360 poste? 4- Extinguishment of Obligations. gank, whereby the parties agreed that the monthly rentals sh directly to the mortgagee for D Co.'s account. On ie 5, 2014 rose ac ciosed P Bank. Sometime in December 2015, F Bank purchased the credit af D Co. in favor of P Bank. ‘ : subsequently, on December 14, 2016, D Co, amount of 21,450,000 through an poieoi nsreetanghigecr notation that it was for full payment of its P Bank account that had been urchased by F Bank. F Bank accepted it as payment. Is the tender of ent effective? a. Yes, because a check is equivalent of money. p. No. A check does not constitute legal tender, and that a creditor may validly refuse it. ‘Yes, because F accepted D Co.'s check. No, because a check prevents a creditor from accepting it as payment. 7f X and ¥ alleged that they are the registered owners of a parcel of land. Thereafter, X and Y discovered that a portion on the left side of the said parcel of land was occupied by M and N for more than a year, without their prior knowledge or consent. A demand letter was sent to M and N requiring them to vacate the property but they refused to comply; hence, the filing of the Complaint. During the pendency of the case, the parties agreed to enter into a Compromise Agreement which the court approved. The Compromise Agreement provides thatM and N, showed several checks payable to X, issued bya certain C. However, alleging that they failed to pay the amounts due on the Compromise Agreement, Xand Y sent a letter demanding that M and N vacate the premises. a. The obligation of M and N is ‘extinguished because check is equivalent to money; thus, it is extinguished by payment. b. The obligation M and N is not extinguished because delivery of mercantile documents including checks “shall produce the effect of payment only when they have been cashed.” In this case, it was not shown that the checks were encashed by Xand Y. © Mand N discharge their burden of proving payment several checks issued by a certain C. 4. Receipt of a checks by X is the best evidence of the fact of payment; hence, the obligation is extinguished. t because of the © The effets of assignment of rights are the following, except: If the debtor consented to the assignment of rights made by a creditor in favor of a third person, he cannot set UP against the assignee the compensation which pertains to him against the assignor. Chapter 4 - Extingulst ¥ Inc, as assistant sales manager i AG and H worked for X aNd Saleem, L m \ ment of Obligations consented to the assignment of ri b, It the debtor vrata third person and he reer Made oA then, he can set UP against the agg, tu A : nn which pertain to him against the assigng, ies te ent is made without the knowledge Of the mpensat jon of all credits: Prior to the same a tater anes until he had knowledge of the assignment," Magy re assignment IS made without the knowledge of the 4, 4 if not ‘set up the compensation of all credits prior to the berg a later ones until he had knowledge of the assignment, mg vetime in August 2013, X, Inc. “sponsored” Soreng course in Austria conducted by Z Corp. x When H returned nine months thereafter, we directed him to sign @ memorandum providing that % Corp, re, trainees to continue working with X, Inc, for a period of 3 years tow training, Otherwise, each trainee shall refund to Z Corp. $6,000 by “ ‘of compensation. On January 16, 2016 or 2 years and 4 months after attending the training, H resigned from X, Inc. Immediately, X, Inc. ordered G and H to render an accounting of its various holiday giveaways they received. In protest, G and 4 demanded from X, Inc. payment of their separation benetis, commissions, vacation and sick leave benefits, and proportionate 13% month pay. But X, Inc. refused and instead, withheld their 13% month pay and other benefits. On April 16, 2016, G and H filed a complaint. Can there be legal compensation between X, Inc. and H. a. Legal compensation can take place between X, Inc. and H because they are mutual creditor and debtor of each other. b. Legal compensation cannot take place between X, Inc. and H because they are not mutually creditor and debtor of each other. c. Legal compensation can take place because in essence the two) obligation can be compensated. d. Legal compensation cannot take place because it involves benefits respectively. H to attend a0 principal company’ FA. The rules on application of payment are the following except 4, ent shall a. The right to designate the debt to which the pay™ applied belongs primarily to the debtor. ign att b. I the debtor does not apply payment, the creditor may oa which debt is paid by specifying in the receipt. which © Ifthe creditor did not apply or if application is void, ee ad is most onerous to the creditor, among those due, sh# to have been satisfied, yar d. If the debts due are of the same nature and burdens =e shall be applied to all of them proportionately. Extinguishment of Obligations owes special form of payment whereby the debtor abandons all ( 6 property for the benefit of his creditors in order that from the proeeat pereof the latter may obtain payment of their credits, 3. Application of payment b, Dation in payment ¢ Payment by cession q. Tender of payment and consignation é qhe following are requisites of payment by cession, except: . There must be two or more creditors, b. The debtor must be partially or relatively insolvent. ¢ Thesolvency of the debtor is immaterial. 4. There must be an acceptance of the cession by the creditors. ifthe buyer failed to pay the downpayment on time. But then, the seller accepted, without any objections, the delayed payments of the buyer. The legal effect is: a. The obligation of that buyer is that he is liable for his delay. b. The obligation of that buyer is not extinguished.

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