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OBLIGATION AND CONTRACTS > EXTINGUISHMENT OF OBLIGATIONS > Flashcards

EXTINGUISHMENT OF OBLIGATIONS Flashcards

1
Q

Causes of extinguishment of obligations

A
  1. Payment or performance
  2. Loss of the thing due
  3. Condonation or remission of the debt
  4. Confusion or merger of rights of creditor and debtors
  5. Compensation
  6. Novation
  7. Annulment
  8. Rescission
  9. Fulfillment of resolutory condition
  10. Prescription
  11. Other causes
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2
Q

means not only the delivery
of money but also the performance, and any other matter, of an obligation. (Art. 1232

A

Payment

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3
Q

the money or currency which the debtor may compel his creditor to accept in payment of his debt (whether public or private)

A

Legal tender

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4
Q

Payment made by the debtor after court has ordered him to retain debt.

Payment made to the creditor by the debtor after the debtor has been judicially order to retain the debt shall _____ (Art. 1243) the court order is known as garnishment.

A

not be valid

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5
Q

Special forms of payment

A
  1. Dation in payment
  2. Application of payment
  3. Payment by cession
  4. Tender of payment and consignation
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6
Q

is transferred his creditor to pay a debt in money. (Art. 1245). It is governed by the law of sales since it partakes in a sense of the nature of a sale with the creditor in effect buying the property of the debtor.

A

Dation in payment (dation en pago, adjudication en pago, or datio in solutum)

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7
Q

It is the designation of the debt to which the payment shall be applied when the debtor owes several debts in favor of the same creditor. (Art. 1252)

A

Application of payment

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8
Q

is the abandonment or assignment
by the debtor of all his property in favor of his creditor so that the latter may sell them and recover their claims out
of proceeds. Art. 1255

A

Payment by cession

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9
Q

Kinds of payment by cession

A

a. Voluntary or conventional-agreed upon by the parties.
b. Legal- cession by operation of law.

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10
Q

Payment by cession or dation in payment?

  1. There must be two or more creditors.
  2. The debtor is insolvent.
  3. Affects all the debtors’ properties except those exempt from execution.
  4. The creditors are authorized to sell only the debtors properties.
  5. The debtor is not released as a rule.
A

Payment by cession

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11
Q

Payment by cession or dation in payment?

  1. Plurality of creditor is not required
  2. The debtor may not be insolvent
  3. Does not affect all the debtor’s properties.
  4. The creditor becomes the owner of the properties given
    as payment.
  5. The debtor is released as a rule
A

Dation in payment

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12
Q

the act of the debtor of offering to his creditor what is due him

A

Tender of payment

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13
Q

the act off depositing the sum or thing due with the judicial authorities whenever the creditor refuses without just cause to accept the same, or in the cases when the creditor cannot accept it.

A

Consignation

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14
Q

A thing is considered _____ when it perishes, or goes out
of commerce, or disappears in such a way that its
existence is unknown or cannot be recovered. Art. 1189,
par 2)

____ include a physical or legal impossibility of the
service in which the obligation consists.

A

lost ; LOSS

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15
Q

Loss of the thing while in the possession of the debtor shall be _____to be due to his fault, unless prove otherwise.

A

presumed

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16
Q
  1. Loss of a determinate thing

As a general rule, the loss of a determinate thing _______ the obligation. Art. 1262. The following are the exceptions:

A

extinguishes

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17
Q
  1. Loss of a generic thing

The loss or destruction of anything of the same kind does __________ the obligation (Art. 1263) Because a generic thing
does not really perish.

A

not extinguish

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18
Q

is gratuitous abandonment by
the creditor of his right. In plain language, this refers to the
forgiveness of an indebtedness. Extinguished obligation it
requires the debtor’s consent. Art. 1270.

A

Condonation or remission

19
Q

is the meeting in one person of the qualities or the characters of the debtor in the creditor. art. 1275

A

Confusion or merger

20
Q

shall take place when two persons, in their own right, are creditors and debtors of each other. Article 1278. It is a mode of extinguishing obligations where by two persons in their capacity as principals are mutual debtors and creditors of each other with respect to equally liquidated and demandable obligation to which no retention or controversy has been timely commenced and communicated by third parties.

A

Compensation

21
Q

the modification or extinguishment of an obligation by another, either by changing the object or principal condition or by substituting the person of the debtor.

A

Novation

22
Q

one is to extinguish an existing obligation, and the other is to substitute a new one in its place

A

Novation serves two functions

23
Q
  1. D owes C P10,000.00. If the parties later agree that D should give instead a ring to C, there is novation by _______ the object or prestation.
A

changing

24
Q
  1. If the parties agree that T shall take the place of D as the new debtor, there is novation by substituting the _____ of the debtor.
A

person

25
Q
  1. If the parties later agree that X shall take the place of C as the new creditor, there is novation by subrogating a third person in the rights of the ______.
A

creditor

26
Q
  1. There must be a previous valid obligation.
  2. There must be an agreement between the parties to modify or extinguish the obligation, except in specific circumstances.
  3. There must be the extinguishment of the old obligation.
  4. There must be validity of the new obligation.
A

Requisites of novation

27
Q

Kinds of Novation

  1. According to object or purpose:a. ________ - Novation by changing the object or principal condition.b. Personal or subjective - Novation by change of the parties (debtor or creditor).
A

Real or objective

28
Q

Kinds of Novation

  1. According to object or purpose:a. Real or objective - Novation by changing the object or principal condition.b. _________ - Novation by change of the parties (debtor or creditor).
A

Personal or subjective

29
Q

Change of creditor by the agreement of the parties (the original parties and the new creditor)

A

Conventional subrogation

30
Q

Subrogation by operation of law.

A

Legal subrogation

31
Q

Change of object and parties to the obligation.

A

Mixed

32
Q
  1. According to form:a. _______ - Novation declared in unequivocal terms.b. Implied - When the old and new obligations are incompatible with each other.
A

Express

33
Q
  1. According to form:a. Express - Novation declared in unequivocal terms.b. ________ - When the old and new obligations are incompatible with each other.
A

Implied

34
Q
  1. According to extent:a. __________ - Old obligation is totally extinguished.b. Partial or modificatory - Old obligation remains in force but modified.
A

Total or extinctive

35
Q
  1. According to extent:a. Total or extinctive - Old obligation is totally extinguished.b. _________ - Old obligation remains in force but modified.
A

Partial or modificatory

36
Q

EXAMPLE

D owes C P10,000.00. On the due date, D proposes to C to accept a ring in payment of D’s debt of P10,000.00. C agrees to D’s proposal and accepts the ring. D’s monetary obligation is extinguished by _______ .

A

dation in payment

37
Q

EXAMPLE

D owes C the following distinct debts: P1,000.00
due on May 1, P1,000.00 due on May 5, P1,000.00 due on May 10, P1,000.00 due on May 15, and P1,000.00 due on May 20.

A

Application of payment

a. If today is May 16, and D has only P1,000.00 but wants to pay C, D may apply the payment to any of the debts due on May. 1, May 5, May 10 or May 15. He cannot apply the payment to the debt due on May 20 because it is not yet due unless he is allowed by stipulation with C or the benefit of the period was given to him (D).

b. If D does not apply the payment, the right to apply it is shifted to C. C may apply the payment to any of the debts due on May 1, May 5, May 10 or May 15. He cannot apply the payment to the debt due on May 20 because it is not yet due unless he is allowed by stipulation with D or the benefit of the. period was given to him (C).

c. If neither D nor C applies the payment, payment shall be applied proportionately to the debts due on May 1, May 5, May 10 and May 15 at P250.00 each. In case the debt due on May 5 is secured by a pledge, then payment shall be applied to such debt because it is the most onerous to D.

38
Q

Illustration 2:
D owes C P7,000.00 due on May 1, 5 sacks of rice worth P5,000.00 on May 5; and P5,000.00 due on May 8. If none of the debts have been paid as of May 8 and D has P5,000.00, D cannot apply the payment to the debt consisting of 5 sacks of rice because it is not payable in money, i.e., it is of different kind. D may not apply the payment to the debt due on May 1 because the payment would not be complete unless C consents. D may, however, apply the payment to the debt due on May 8.

A

Application of payment

39
Q

Illustration: D owes X, P50,000.00; Y, P20,000.00; and Z, P30,000.00. All the obligations are due, but D has assets worth P80,000.00 only. D offers to assign his assets to X, Y, and Z so that they may sell them and apply the proceeds to their respective claims. X, Y, and Z accept the offer. If the assets are sold for 70,000.00, then D will be released from his obligations only up that amount, unless the creditors agreed to release him completely of his debts.

A

Payment by cession

40
Q

Illustration: D borrowed P50,000.00 from C. On the due date, D tendered payment in P20.00 bills totaling P50,000.00 to C. C refused to accept the payment demanding that he be paid in higher denominations. Since the payment tendered by D was legal tender, C was not justified in refusing to accept it. D may thus consign the payment.

A

Tender of Payment and Consignation

41
Q

Example: D owes C P3,000.00. The debt is evidenced by a promissory note. C informs D that he will no longer collect the debt and delivers the promissory note to D. D accepts C’s generosity. D’s obligation is extinguished by ______________.

A

condonation or remission

42
Q

Example: M makes a promissory note payable to P or order. P indorses the note to A, A to B, B to C. On the due date, C indorsed the note back to M. The obligation here is extinguished because M is now the creditor of himself.

A

Confusion or Merger

43
Q

Example: D owes C P5,000.00. C owes D P5,000.00. Both debts are due and demandable. The parties do not need to pay each other as their obligations are extinguished by ___________.

A

compensation

44
Q

Examples: D owes C P10,000.00.
(1) If the parties later agree that D should give instead a ring to C, there is ______ by changing the object or prestation.
(2) If the parties agree that T shall take the place of D as the new debtor, there is _______ by substituting the person of the debtor.
(3) If the parties later agree that X shall take the place of C as the new creditor, there is ______ by subrogating a third person in the rights of the creditor.

A

novation

OBLIGATION AND CONTRACTS (5 decks)

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