Additional

Notes
Extinguishment of Obligations

On payment or performance
Subrogation right available to the 3rd person/
payor, not only to demand reimbursement from
the debtor but also to exercise all the rights
which the creditor could have exercised (like
mortgage, guaranty,penalty)
Reimbursement- personal action available to the
3rd person/payor against the debtor to recover
from the latter what he has paid insofar as the
payment has been beneficial to the debtor

On payment or performance

rd
Gratuitous payments- if made by a 3 person

without the intention to be reimbursed by the

debtor, presumption : donation
- consent of the debtor is required

On payment or performance
Payment to Incapacitated persons
- Valid if* (a) the incapacitated kept the amount
or the things paid/delivered
- (b) Insofar as the payment is beneficial to him
Payment to 3rd persons
- Valid* insofar as it redounded to benefit of the
creditor
*only in obligations to give

On payment or performance
Effect of extraordinary inflation or deflation
(unusual fluctuation in the value of the
currency)
- Rule: the value of the currency at the time of
the establishment of the obligation shall be
the basis of payment
- Exception: agreement to the contrary

On application of payment
Time when right is exercised:
- Must be exercised by the debtor at the time
payment is made.
- If the debtor failed, creditor may exercise the
right

On consignation
Movables and immovables are included
Effects:
(a)If creditor accepts the thing deposited, the
obligation is cancelled
(b)If creditor contests the validity of the
consignation, litigation will follow.

On loss of thing due

Analyze:
Alex is bound to deliver 50 heads of cattle which
will come from the Ausie & Brothers Ranch in
Mindoro to Brian. However, because of
epidemic, all of the cattle from the ranch was
wiped out. Is the obligation of Alex
extinguished by the loss of the thing due?

On condonation/remission of the debt

Rules regarding inofficious donations:
(1)All present property of the donor (reserves
sufficient means of support of himself and
family)
(2)Donations cannot comprehend future
property

Forms of donations
Movables below P5,000- oral or in writing
Movables P5,000 and above- writing
Immovables- public instrument with
acceptance during the lifetime of the donor
Statute of Frauds