Alternative Obligations: Loss and Debtor's Choice

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

In an alternative obligation where the debtor has the right of choice and some prestations are lost through the debtor's fault, what recourse does the creditor have regarding the remaining prestations?

  • The creditor can demand the price of any of the lost prestations, plus damages.
  • The creditor is entitled to demand performance of any of the remaining prestations, or to claim damages for those prestations lost through the debtor's fault. (correct)
  • The creditor can only choose from the remaining prestations without any right to claim damages.
  • The creditor is entitled to damages based on the value of the last prestation lost if the debtor loses all of the choices.

If a creditor has the right of choice in an alternative obligation and some of the items are lost due to the debtor's actions, what options does the creditor have?

  • The creditor is only entitled to choose from the remaining items.
  • The creditor can choose the remaining items or the price of the items lost due to the debtor's fault, plus damages. (correct)
  • The obligation is extinguished.
  • The creditor can only choose from the remaining items, but the debtor must pay for the lost items.

In a solidary obligation, if one of the solidary debtors is granted an extension of time for payment by the creditor, what is the effect on the other solidary debtors?

  • The extension only benefits the debtor to whom it was granted; the other debtors remain bound by the original terms. (correct)
  • The extension constitutes a novation, requiring consent from all solidary debtors to be valid.
  • The extension releases all the solidary debtors from the obligation completely.
  • The extension benefits all solidary debtors, releasing them from the obligation to the extent of the extension.

In a solidary obligation, what is the extent of a solidary debtor's right to avail themselves of defenses when sued by the creditor?

<p>A solidary debtor can raise defenses from the nature of the obligation and those personal to themselves, but not those personal to other debtors. (D)</p> Signup and view all the answers

How does the insolvency of one solidary debtor affect the obligations of the remaining solidary debtors?

<p>The remaining solvent debtors must shoulder the insolvent debtor’s share, pro rata. (A)</p> Signup and view all the answers

If a solidary debtor pays more than their share of the obligation and obtains a remission after the payment, to what extent are the co-debtors still liable?

<p>The co-debtors remain liable for their shares of the original debt including the excess amount paid. (D)</p> Signup and view all the answers

What distinguishes an obligation with a penal clause from an alternative obligation?

<p>In an obligation with a penal clause, only one prestation is due, whereas, in an alternative obligation, several prestations are due. (A)</p> Signup and view all the answers

Under what circumstances can courts reduce a stipulated penalty in an obligation with a penal clause?

<p>When the principal obligation has been partly or irregularly complied with, or if the penalty is iniquitous or unconscionable. (D)</p> Signup and view all the answers

In the context of obligations, what constitutes 'extraordinary inflation or deflation' that would warrant adjustment of the debt amount?

<p>A sharp decrease in the purchasing power of currency that is unusual or beyond the ordinary fluctuations in the value of currency. (D)</p> Signup and view all the answers

In the absence of a stipulated interest rate for a loan or forbearance of money, what interest rate typically applies?

<p>The legal rate of interest, which is 6% per annum. (D)</p> Signup and view all the answers

What is the legal effect of a creditor receiving a check as payment, and when does the payment become effective?

<p>Payment is effective retroactively to the date of the check once the check clears and funds are transferred to the creditor's account. (C)</p> Signup and view all the answers

When does the application of payments by operation of law apply?

<p>When the debtor makes no application and a payment by the creditor has not been proposed or if the designation is not valid. (B)</p> Signup and view all the answers

How is the hierarchy to determine which payment shall be applied according to Article 1253 resolved?

<p>Payments shall first be applied the interest; payment shall then be applied to the principal only after the interest has been fully paid. (B)</p> Signup and view all the answers

What distinguishes dation in payment from cession in payment?

<p>Dation in payment involves only one creditor, while cession in payment involves two or more creditors. (D)</p> Signup and view all the answers

What are the requirements for a valid voluntary assignment or cession of property by a debtor to creditors?

<p>Complete or partial insolvency of the debtor, more than one creditor, and abandonment of all the debtor’s property not exempt from execution. (C)</p> Signup and view all the answers

What is required from the creditor for a tender of payment to be valid?

<p>The act of offering to the creditor what is due him together with a demand that the creditor accepts the same. (A)</p> Signup and view all the answers

What is the effect of the creditor refusing to accept payment in a tender of payment?

<p>The creditor becomes in mora accipiendi, and consignation is needed. (C)</p> Signup and view all the answers

What results from failure to comply with Requisites of Valid Consignation?

<p>If a valid consignation is not met, the obligation is not extinguished. (B)</p> Signup and view all the answers

Flashcards

Tacit Choice

When only one object or prestation is left, it becomes a tacit choice, and the obligation becomes a simple obligation.

Loss in Alternative Obligations

In alternative obligations, the effect of the loss of one or some prestations depends who has the right of choice.

Solidary Obligation

Solidary obligation requires expressed stipulation, law, or nature of the obligation to create solidary liability/right. Otherwise, it is presumed as joint.

General Rule for Obligations

The presumption is that an obligation is always joint; solidary obligations must be explicitly stated or required by law.

Signup and view all the flashcards

Words Denoting Solidarity

Words denoting solidarity include 'jointly and severally', 'individually', 'collectively', 'separately'.

Signup and view all the flashcards

Active Solidarity

Active solidarity is solidarity on the part of creditor or obligee, where each creditor represents the other in recovering payment

Signup and view all the flashcards

Passive Solidarity

Passive solidarity is the solidarity on the part of debtors or obligors where any debtor can be made to pay the full amount with right to recover from co-debtors.

Signup and view all the flashcards

Obligations with Penal Clause

One to which an accessory undertaking is attached for the purpose of insuring its performance by virtue of which the obligor is bound to pay a stipulated indemnity or perform a stipulated prestation in case of breach.

Signup and view all the flashcards

General Rule on Penalties

The penalty fixed the parties takes the place of all compensation, which the creditor ought to receive, in case of breach.

Signup and view all the flashcards

Penalty exception (StiRf)

An agreement stipulating interest can provide a mechanism to collect stipulated ammount for failure to act.

Signup and view all the flashcards

Double functions for penalty

To strengthen the force of the obligation by the threat of greater responsibility in the even of breach.

Signup and view all the flashcards

Penalty Reduction

The penalty may be reduced by the courts if it is partiall/irregular or unreasonbale.

Signup and view all the flashcards

Payment/Performance

the delivery of money or thing, or performance, in any manner of the obligation.

Signup and view all the flashcards

Principle of Identity

The same thing or same prestation must be delivered or performed in order to extinguish the obligation.

Signup and view all the flashcards

Principle of Integrity

A debt shall not be deemed paid UNLESS the thing or service of which the obligation consists of has been completely delivered or rendered

Signup and view all the flashcards

Requisites of substantial performance

Attempt in Good faith to perform without willful or intentional departure, deviation is Slight, Omission/Defect is Technical or unimportant, and must Material the object.

Signup and view all the flashcards

Payments must be in...

legal tender (CIVIL CODE, art. 1249)

Signup and view all the flashcards

Extra Inflation/ Deflation

Value of currency is determined by the time obligation was incurred, unless there is stipulation to the contrary. - CIVIL CODE, art. 1250

Signup and view all the flashcards

Application of Payments

Designation of the debt which payment shall be made, out of 2 or more debts owing the same creditor. (CIVIL CODE, art. 1252)

Signup and view all the flashcards

Dacion en Pago

Whereby the debtor pays a monetary obligation with property. .

Signup and view all the flashcards

Study Notes

  • When only one prestation remains in an alternative obligation, it becomes a simple obligation
  • Effect of loss or impossibility of prestations in alternative obligations depends on who has the right of choice

Debtor's Right of Choice

  • If the debtor's act causes the loss of some prestations, they can choose from the remaining options
  • Creditor is entitled to damages based on the value of the last thing lost if all but one are lost through the debtor's fault
  • If the creditor's act causes the loss of some prestations, the debtor is entitled to cancellation or resolution plus damages.
  • If some prestations are lost due to a fortuitous event and one remains, the debtor must perform the remaining one.

Creditor's Right of Choice

  • If the debtor's act destroys some prestations, the creditor can choose from the remaining options or the price of the lost item plus damages
  • Creditor is entitled to damages if all are lost
  • Exercise the right to choose extinguishes the obligation
  • If Creditor's act destroys any remaining prestation, the obligation is extinguished
  • If the cause is a fortuitous event, only one prestataion remains.
  • If only one choice remains when the last object is lost due to a fortuitous event, the obligation is extinguished irrespective of who has the right of choice

Joint and Solidary Obligations

  • Involve multiple parties as debtors or creditors
  • Liability can be joint or solidary; joint liability is presumed unless otherwise stated
  • Solidary liability requires express stipulation, law, or nature of the obligation
  • Joint obligations divide the debt or credit into shares based on number of parties, unless a different sharing agreement exists

Joint Obligation Details

  • Each debtor is only responsible for their share, immune to the insolvency of other parties
  • Joint creditors can only collect their share, not the shares of others
  • In solidary obligations, any debtor can be made to pay the full debt, but they may present defenses
  • Any creditor can collect the whole debt, rights to available defenses remain
  • The one who pays or receives full amount can recover or deliver shares from others as needed

Joint Divisible Obligations

Obligacion Mancomunada- whole obligation paid or fulfilled proportionately

  • The presumption is that the obligation is always joint, unless otherwise stated
  • Exceptions to joint obligations includes cases when the law requires solidarity, the obligation expressly stipulates it, or the nature of the task demands it
  • Express stipulation requires solidarity, and a final judgement is required upon several defendants
  • Effects of joint liability include that demand on one debtor only causes delay for them
  • Each debtor is only liable for their portion, other debtors remain unaffected
  • Effects of joint credit include that each can demand only for their share; joint member cannot act as representation of the others.
  • Unless specified, creditors and debtors share equal proportions

Joint Indivisible Obligations

  • Fulfillment requires all debtors to concur, each for their share

Enforcing Joint Indivisible Obligation

  • Can only be done by making a claim against all debtors
  • If there are multiple creditors, the action should be collective
  • Breach by one joint debtor converts the obligation into one for damages
  • An innocent debtor does not contribute beyond their share

Indivisibility vs Solidarity

  • Indivisibility refers to the prestation of the obligation; Solidarity refers to the legal tie or parties involved
  • Indivisibility does not require multiple subjects where as solidarity require one or more

Solidary Obligations

  • Must be expressed in stipulation, law, or obligation's nature; Else considered a joint obligation
  • Includes solidarily and collectively,individually, seperately, and distintively
  • The use of "I" in promissory notes with multiple debtors indicates solidarity
  • If a solidary debtor pays partially with a quitclaim, they can only seek reimbursement from others
  • Other debtors only get whatever portion exceeds their total.

Types of Solidarity

  • Active: solidarity among creditors
    • One creditor represents all
    • Credit divided equally
    • Debtor can pay any creditor
  • Passive: solidarity among debtors
    • Creditor can pursue any debtor for full payment
  • Mixed: between both debtors and creditors
  • Conventional: agreed upon by parties
  • Legal imposed by law
  • Creditor can transmit to heirs collectively
  • Accommodation party is solidarily liable under NIL

In Passive Solidarity

  • Demand on one debtor won't stop creditor from going after others
  • If one debtor dies, claims are not on their estate alone.
  • Creditor can pursue the living debtors, meaning estate claim is optional
  • If offers to pay, creditor can chose who but not more due.
  • Interrupting payments due with one creditor affect all
  • Delay interests in payments owed. borne by all debtors
  • Personal defenses against the debtor, and defenses for other debtors all stand.

Solidary Debtors

  • Can only use defenses derived from nature
  • Personal Defenses (minority, consent given), the debtor may still be accountable for the component which pertains shares if additional solidary debtors still remain
  • Entitled to reimbursement from others.
    • Those who couldn't initially pay due to insolvency must have their share proportionally borne amongst co-debtors Reimbursement includes interests accrued from date of payment.
  • Mixed solidarity occurs on both creditor and debtor sides
  • Legal Instances of solidarity comes in forms such as Torts, Quasi-contract
  • The payment is not returned if debt is paid or becomes illegal.

Terms and Conditions Collection

Refers to collect owed value, based on date and fulfillment period set

  • Interest is not accrued when payment is made beforehand
  • Collecting owed rate shifts to time of maturity instead
  • Debtor still entitles to reimbursement even after remission from payment

Penal Clause

It's an accessory ensuring performance/ bound party pays or fulfills upon breach

PENAL CLAUSE CONDITION
Accessory Obligation Separate Obligation
Subsidiary- penal, and can'te be forced above the rest Principal - cannot
Occurs Defaults No Suspense
Obligation w/ a Clause & Obligation comparisons; can be several, one can extingush while the other can't, etc.
Penal Clause is to liquidate amount of damages in compensatory and to punish an obligor in punitive strict circumstances

With Subsidiary penalties in general

  • The principal may not be compulsory
  • Where money is involved both penalty and owed values be obtained

Exclusive penalties in general

  • All inclusive, including any damaged payment, fees due.
  • Parties fix penalties, take places to pay and address interest or payment
  • Provide Liquidation and threat of action for damages.
  • Legal is constituted by law
  • Compesatory provides fees of damaged sustained by creditor or obligee
  • Penal, for penalizing debtors.
  • Both for full payment and additional fees if necessary

Reduced penalty for reasons such as

  • Parital Performance
  • Morally objectional levels
  • Parties may fix interest or penalty based on a valid amount regardless of rates.

Extinguish Obligation Pal-CoCoco-No

  • Payment
  • Condonation of reduction of debt
  • Confusion of Marital rights
  • compensation
  • No Novations
  • Desistance
  • Fortuitous Event

Extinguishing Payment - Delivery, Value, Manner

  • Money by obligation
  • Performance/ Principles applicable in valid/sound conditions
  • Object for service based performance
  • Obligor may not try to force others of acceptance in terms of value
  • Party's roles need to be fulfilled via
  • Debtor needs to be interested for creditors, for those needing obligations they can enforce it based on consent

Terms of payment, conditions

  • Third party needs creditor consent
  • Subrogation applies if debtor permits third party to offer payment, or if the value wasn't up to standard, person can make the payment to third party on the creditors behalf.
  • 124 cases need to be considered
  • Third payments and benefits needs full consideration
  • When there's misconduct and reason, estoppel applies
  • Requirements includes

Others

Parties needs to adhere to integrity standards, and need to be sound conditions for legal agreements to occur

Additional rules

Substaintial in good faith where obligation is recoverable

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser