35 Questions
What is the effect of payment made by a third person to extinguish the obligation when that person has no interest in the fulfillment of the obligation?
The creditor is not bound to accept payment by a third person without interest unless specified otherwise.
In what scenario can a person who pays on behalf of the debtor demand reimbursement from the debtor?
If the payment was made without the debtor's knowledge or against their will.
When a third party pays on behalf of the debtor against the debtor's will, what rights can this third party compel the creditor to provide?
The right to be subrogated in the creditor's rights, such as those from a mortgage or guaranty.
What does 'Dation in Payment' refer to in relation to satisfying a debt?
Alienating property to the creditor as satisfaction for a debt.
Can payment be made through a promissory note or bills of exchange according to the text provided?
Yes, but only if explicitly agreed upon by both parties.
What is the effect of delivering promissory notes or bills of exchange in the Philippines?
It produces the effect of payment when cashed, or when impaired due to the fault of the creditor.
In the context of application of payment, what are the requisites that must be met?
Multiple debts, one debtor, and one creditor.
When does tender of payment typically occur?
As a preparatory act prior to complying with an obligation.
What happens if the amount paid by a debtor is insufficient to cover all the debts?
The available amount will be applied proportionally to each debt.
How does the concept of application of payment interact with debts due from solidary debtors?
The payment can be applied to any debt owed by any of the solidary debtors.
If an obligor is bound to render one of two or more items of performance, and the right of choice is granted to the creditor or a third person, what happens in case of loss or impossibility of all objects due to a fortuitous event?
The obligation is extinguished.
In a situation where only one object is due and the right of choice pertains only to the debtor, what happens if there is loss or impossibility of the object due to a fortuitous event?
The obligation is extinguished.
When an obligor is required to deliver one of two objects in an alternative obligation, what liability may arise if there is culpable loss before a choice is made?
The debtor may be held liable.
In a solidary debt arrangement, if one debtor fulfills the obligation alone, what rights may pertain to that debtor?
The right to demand reimbursement from others.
When an obligor is given the right to substitute the thing due with something else not originally due, which party does this right usually pertain to?
Only the debtor.
A contract entered into by the defendant without the knowledge and approval of the litigants or competent judicial authority may be subject to rescission.
True
Only contracts specified in Articles 1381 and 1382 of the law can be rescinded.
True
Voidable contracts can be annulled even if there is no damage suffered by either party.
True
Rescission may be requested if there are other legal means available to obtain reparation for damages caused.
False
Contracts where one party is incapable of giving consent are considered voidable.
True
A contract entered into by a guardian on behalf of a ward suffering a lesion by more than one-fourth of the value of the object is voidable.
False
If a contract is undertaken in fraud of creditors and they have no other way to collect their claims, it is considered void.
False
All contracts by virtue of which a debtor alienates property by gratuitous title are presumed to be fraudulent.
False
Alienations by onerous title are not presumed fraudulent when made by persons against whom judgments have been issued.
True
Contracts entered into in fraud of creditors are rescissible only if the creditors can collect their claims through other means.
True
The power to rescind obligations is not implied in reciprocal ones if one of the obligors fails to comply with what is incumbent upon him.
False
Once the injured party chooses fulfillment over rescission of the obligation, they can no longer seek rescission even if fulfillment becomes impossible.
False
In the case where an obligor becomes insolvent, making fulfillment of the obligation impossible, the other party can still choose rescission of the contract plus damages.
True
If a court finds just cause, it may not decree the rescission claimed by a party.
True
In a situation where the injured party has chosen fulfillment over rescission, they cannot later request for rescission even if fulfillment becomes impossible.
False
A contract that can be rescinded in case of breach does not require judicial permission to cancel the obligation.
True
Rescission always requires judicial permission to be valid.
False
A contract with a resolutory provision for rescission can be automatically rescinded by the parties involved without any formalities.
True
In cases where a contract can be cancelled in case of breach, the rights of third parties who have acquired the object are always protected.
True
A contract that has a provision for rescission due to breach cannot be assailed by any contracting party.
False
Study Notes
Payment and Extinguishment of Obligations
- Payment made by a third person who has no interest in the fulfilment of the obligation is not binding on the creditor, unless there is a stipulation to the contrary or the third person has an interest in the fulfilment of the obligation (Art. 1236 par. 1).
- Whoever pays for another may demand from the debtor what he has paid, except if he paid without the knowledge or against the will of the debtor (Art. 1236 par. 2).
- When a person pays on behalf of the debtor without the knowledge or against the will of the latter, he cannot compel the creditor to subrogate him in his rights (Art. 1237).
Dation in Payment/Dacion en Pago
- Dation in payment is where property is alienated to the creditor in satisfaction of a debt in money, governed by the law on sales (Art. 1245).
Form of Payment
- Payment must be made in legal tender in the Philippines, but the delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed or through the fault of the creditor they have been impaired.
Application of Payment
- Application of payment is 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.
- Requisites:
- One debtor and one creditor
- Two or more debts of the same kind
- All debts must be due
- Amount paid by the debtor is insufficient to cover the total amount of all the debts
Tender of Payment and Consignation
- Tender of payment is the manifestation of the debtor to the creditor of his decision to comply immediately with his obligation, preparatory act and extrajudicial in character.
Obligations with Alternative Objects
- An obligor is bound to render only one of two or more items of performance.
- Several objects are due, and it may be complied with by the delivery of one of the objects or by performance of one of the prestations which are alternatively due.
Rescissible Contracts
- The contract must be rescissible under Art. 1381 and 1382
- Party asking for rescission must have no other legal means to obtain reparation for the damages suffered by him (Art. 1382)
- Person demanding rescission must be able to return whatever he may be obliged to restore if rescission is granted (Art. 1385)
- Things which are the object of the contract must not have passed legally to the possession of a third person acting in good faith (Art. 1385)
- Action must be brought within four (4) years
Voidable Contracts
- Contracts are voidable or annullable, even though there may have been no damage to the contracting parties:
- Those where one of the parties is incapable of giving consent to a contract
- Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud
Explore the legal concept of payment made by a third party to fulfill an obligation under the law of obligations. Learn about when the creditor is bound to accept payment from a third person and the conditions that apply in such scenarios.
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