POST MT OBLIGATIONS

Question 1

Consignation

Answer 1

One of the modes of extinguishing an obligation.
A debtor resorts to consignation if the creditor rejects a valid payment or it’s not prudent or advisable for the debtor to pay the creditor – meaning tender of payment is excused.

Question 2

What must the debtor do in a consignation?

Answer 2

Debtor must file an action in court for the purpose of placing the payment at the court’s disposal

Question 3

If Creditor refused, does Debtor still have to pay interest + principal?

Answer 3

YES! Because D has not paid the obligation and continues to use the money. Tender of payment does not extinguish an obligation,

Question 4

Will the debtor be considered in default, therefore has to pay the penalty?

Answer 4

No

Question 5

Requirements for a valid consignation.

Answer 5

• There must be a valid debt due
• There must be an unjust refusal by the creditor after tender of payment or there must be a reason why the payment cannot be made
• There must be prior notice to the parties interested in the fulfillment of the obligation
• There must be actual consignation in court by having the thing deposited at the disposal of the judicial authority
• Subsequent notice to the creditors as well

Question 6

T or F: The debtor can consign when the creditor rejects the payment because the debtor paid early.

Answer 6

F. The creditor has the full benefit of the term so in consignation, the debt MUST be due.

Question 7

What is a valid tender of payment?

Answer 7

Debtor manifests to the creditor that the debtor is ready to fulfill the obligation with an offer of immediate compliance.

NOTE: Anything short of showing the cash payment or other form of payment agreed upon by the parties will not amount as payment

Question 8

When is tender of payment not a requisite to consignation?

Answer 8

• When the creditor is absent or unknown, or does not appear at the place of payment;
• When she is incapacitated to receive the payment at the time it is due;
• When, without just cause, she refuses to give a receipt;
• When two or more persons claim the same right to collect; or
• When the title to the obligation has been lost.

Question 9

When does the first situation happen?

Answer 9

In cases where there is no determinable creditor at that time, like in an instrument payable to bearer and you don’t know who the bearer is

Question 10

Can the debtor tender payment and give prior notice simultaneously?

Answer 10

Yes, example – Borrower told Bank that Borrower would consign should Bank refuse to accept the tender of payment

Question 11

What if the payment to be consigned is based on a contract of lease which is payable every month?

Answer 11

If it’s a lease contract and rent is due every month, the debtor has to repeat the steps every month.

Question 12

Can a debtor set up an account and place all accruing debt in that account?

Answer 12

No, payments must be placed at the Court’s disposal. The debtor can set up an account upon the order and under the control of the court.

Question 13

When is it best for the creditor to accept an incomplete payment consigned in the court?

Answer 13

Only accept when it’s deposited in court or after filing of the complaint.

Question 14

Who pays for a valid consginment?

Answer 14

Creditor

Question 15

BREAKDOWN OF STEPS:

Answer 15

Debt Due
Tender of payment → unjustly refused
First notice
Judicial Deposit
Second notice
Judicial approval/disapproval

Question 16

When will the debt be considered paid?

Answer 16

• Upon judicial approval of the consignation
• Upon acceptance of the
  payment by the creditor without any reservation or qualification.

Question 17

Can a creditor reserve the right to a full payment?

Answer 17

Yes

Question 18

What is the retroactive effect of a valid consignment?

Answer 18

Judicial approval retroacts to the day of the judicial deposit.

Question 19

Can debtor withdraw the deposit? When?

Answer 19

Yes, before the creditor has accepted the consignation
and before a judicial confirmation that the consignation has been properly made

Question 20

Can creditor prevent withdrawal? How?

Answer 20

Yes, accepting the amount but with express reservations of other claims.

Question 21

What is the doctrine of Legaspi?

Answer 21

Tender of payment enough to preserve the right of repurchase.

Question 22

Doctrine of Heirs of Bacus?

Answer 22

In an option to buy, no need to consign, just need to merely inform your intent.

Question 23

Hulganza Doctrine

Answer 23

Right to redeem is exercised through the filing of judicial action within the period of redemption prescribed by the law.

Question 24

Define loss of the thing due.

Answer 24

Refers to legal or physical impossibility AFTER constitution of the obligation

Question 25

Loss of a determinate thing

Answer 25

Extinguishes the obligation if the debtor is without fault or not in default

Question 26

Can a debtor be extinguised from liability if it was after default?

Answer 26

No, loss of the thing due w/o fault must be before default.

Question 27

Loss of a generic thing

Answer 27

Loss does not extinguish the obligation, unless the entire class becomes impossible.

Question 28

Loss in an obligation to do

Answer 28

Loss extinguishes the obligation when the prestation becomes impossible

Question 29

Presumption of fault

Answer 29

There is always presumption of fault on the part of the debtor because he was the one in control of the thing at the time of the loss.

Question 30

Why?

Answer 30

The debtor in possession of the thing is in the best position to avoid any damage or loss by exercising the appropriate diligence.

Question 31

How can the debtor free himself from liability?

Answer 31

Show he exercised the necessary diligence/invoke FE

Question 32

Who will be liable for the loss if the debtor can prove he is not at fault?

Answer 32

Creditor

Question 33

Who has the burden of proof when the debtor invokes a FE?

Answer 33

Burden of proof falls on the creditor that there was fault or default on the part of the debtor.

Question 34

REQUISITES OF DOCTRINE OF UNFORESEEN EVENT

Answer 34

- The event or change in circumstance could not have been foreseen at the time of the execution of the contract. - It makes the performance of the contract extremely difficult but not impossible. - It must not be due to the act of any of the parties. - The contract is for a future prestation.

Question 35

What is condonation?

Answer 35

An act of liberality by virtue of which, without receiving any equivalent, the creditor renounces the enforcement of the obligation, which is extinguished in its entirety or in that part

Question 36

What is the nature of condonation?

Answer 36

Gratuitous

Question 37

Requirement

Answer 37

An express condonation must comply with the form of a valid donation

Question 38

What is the limitation of a condonation?

Answer 38

Subject to the rules governing inofficious donations i.e. impairing legitime of compulsory heirs

Question 39

Requirements of real/immovable property

Answer 39

1) Donation must be in a public instrument (notarized) 2) Donee must accept the donation in the same deed or in a separate public document made known to the donor

Question 40

Requirements of movable property

Answer 40

Value > 5,000 = donation and acceptance must be in writing Value < 5,000 = verbal but with simultaneous delivery and acceptance

Question 41

What is confusion?

Answer 41

Debtor and the creditor become the same person with respect to the same obligation

Question 42

Does a guaranty or security get extinguished if the principal is extinguished?

Answer 42

YES, but extinction of the accessory contract will not extinguish the principal loan obligation.

Question 43

What is novation?

Answer 43

Substitution or change of the obligation by a subsequent one which extinguishes or modifies the first

Question 44

How do you novate?

Answer 44

- Either by changing the object or principal conditions, or - By substituting another in place of the debtor, or - By subrogating a third person in the rights of the creditor

Question 45

What are the classifications of novation?

Answer 45

Extinctive or Total novation Modificatory or Partial novation

Question 46

What is extinctive novation?

Answer 46

The old obligation is terminated and superseded by the new obligation (Extinction)

Question 47

What is modificatory novation?

Answer 47

Only certain terms and conditions of the original obligation are altered. The old obligation subsists to the extent that it remains compatible with the amendatory agreement

Question 48

Requisites of novation

Answer 48

A previous valid obligation A new valid obligation The new obligation extinguished or modifies the old obligation in terms of object and/or subjects/s

Question 49

Two modes for extinctive novation

Answer 49

An express agreement of the parties to extinguish the old obligation (express) or utter incompatibility of the old and new obligations (implied)

Question 50

What is objective novation?

Answer 50

Change of obligation, ex: dacion en pago

Question 51

What is subjective novation?

Answer 51

Change of a party or parties

Question 52

What are the kinds of debtor substitution?

Answer 52

Delegacion: Substitution of a debtor at the instance of the original debtor Expromision: Substitution of the debtor without the knowledge or consent of the debtor

Question 53

KINDS OF CREDITOR SUBSTITUTION:

Answer 53

By agreement of the parties (conventional subrogation) By operation of law (legal subrogation)

Question 54

PRESUMPTION OF LEGAL SUBROGATION:

Answer 54

- A creditor pays a preferred creditor even without the debtor’s knowledge - Third party pays with the express or implied consent of the debtor - A person interested in the fulfillment of the principal obligation pays even without the debtor’s knowledge (

Question 55

Why may a guarantor be subograted to a creditor's rights?

Answer 55

Because a guarantor is an interest party in the contracted

Question 56

If there is no consent or knowledge from the debtor is it under legal subrogation?

Answer 56

No

Question 57

T or F: Novation need not be clearly stipulated.

Answer 57

False

Question 58

May novation prevent criminal liability?

Answer 58

Yes, if novation happens before the attachment of criminal liability.

Question 59

WHO SHOULD CONSENT TO NOVATION?

Answer 59

GR: All parties to the old and new obligation

Question 60

What are the XPNs?

Answer 60

Legal subrogation through the payment by a creditor of a preferred creditor or expromission