Chapter+4+ +Extinguishment+of+Obligations+ (Discussion)

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Chapter 4

Extinguishment of obligations: Please note that the Article mentioned in each number is the answer to
the problem. Explain your answers (maximum of 200 words).

1. X delivers to Y his one and only dog in accordance with their contract. Is there payment and
therefore, the obligation is extinguished? (Art. 1232)

2. A owes B P10,000 payable on Oct.30, 2021. If on due date A has P9,000.00 only, what are the
effects or consequences on his obligation? (See par. 1 Art. 1248)

3. X binds himself to pay W P5,000 and whatever commission she will receive from Avon Co. for the
month of November 2021. Suppose the commission is not yet liquidated, can X pay W the amount
of P5,000 ahead of the commission? (Art. 1248 par.2)

4. F agrees to give E a brand- new Panasonic electric stand fan in black. If F delivers to E a brand--
new Panasonic electric stand fan in navy blue, may the creditor refuse to accept the performance
by F? (See Art. 1244)

5. Referring to no. 4, if E knowing that the electric fan was not in the color agreed upon still accepts
it without any objection or protest, what is the effect? (Art. 1235)
Note: failure to object or protest amounts to waiver or estoppel
Waiver is the abandonment or relinquishment of a right.
Through estoppel an admission or representation is rendered conclusive upon the person making
it, and cannot be denied or disproved as against the person relying thereon.

6. A owes B P5,000 guaranteed by X payable on Oct. 30, 2021. If C, a third person offers to pay A’s
obligation, is B obliged to accept the payment? What are the effects? (Arts. 1236-1238)

7. Referring to no. 6, to whom should A pay his obligation? Give the effects. (Art. 1240)

8. If payment or performance is made or rendered to a third person, is it valid or not? (Art. 1241
par.2)

9. X , 18 years old, borrows P2,000 from Y, 16 years old. On due date X pays Y the amount of P2,000.
Is the payment valid? (Art. 1241 par. 1)

10. A owes B P10,000. On due date B goes to A’s residence to collect the payment and A is ready to
pay the full amount. However, they agreed that instead of cash B will accept A’s wristwatch worth
more or less P10,000 as full payment. What special form of payment is this? (Art.1245)

11. X owes several creditors in the amount of P1M all due and demandable. A has no enough money
to pay for all his obligations but he owns personal and real properties. May A use these properties
to pay off his obligations? (Art.1255)

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12. A owes B the following: P1,000 due and demandable and P500 due (not yet due). A has P500 only.
To which debt is the payment to be applied? Who shall apply the payment? What if both debts
are due and demandable? What if both debts are of the same amount, let’s say P500 and are
already due? (Arts. 1252-1254)

13. What if the debtor refuses to accept your payment without valid reason? What if he is willing to
accept the payment but he does not want to issue a receipt? What will you do? (Art. 1256)

14. What is legal tender?

15. A pays B the amount of P100,000 by way of a check. If B accepts the check, is A considered to
have paid the obligation? (Art. 1249 par. 2)

16. When may checks and other mercantile documents produce the effect of payment?

17. In case of an extraordinary inflation or deflation of the currency stipulated should supervene,
what shall be the basis of payment? (Art. 1250)

18. What are the rules regarding place of payment? (Article 1251)

19. X binds himself to deliver to B a specific object. While the object is in his possession it was lost.
What is the presumption under the law? Is there such a presumption when there’s fortuitous
event? (Art.1265)

20. A binds himself to deliver a specific truck to B. Before delivery, the truck engine was stolen without
fault on the part of A. Since there was only a partial loss, is the obligation of A extinguished or not
extinguished? (Art.1264)

21. What is condonation or remission of debt?

22. X is indebted to W in the sum of P2,000 evidenced by a promissory note executed in long hand by
X. If W returns the promissory note to X, what is the presumption? (Art. 1271 par. 1)

23. A and B are indebted to X in the sum of P2,000 evidenced by a promissory note executed by the
former (A and B). If the promissory note is found in the possession of A, what is the presumption?
Does it mean that the obligation of both A and B are condoned or only A’s share in the debt? What
if the obligation of A and B is solidary? (See Joint & Solidary obligations)

24. W is indebted to Y for P5,000 secured by a pledge of wristwatch. If Y condones the debt in the
sum of P5,000, what is the effect? (Art.1273)

25. What is confusion or merger of rights?

26. A borrows P5,000 from B and executed a negotiable promissory note payable to the latter on
January 15, 2022. B pays the promissory note to C for a certain celphone. C pays the promissory

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note to D for repairing the former’s car. D pays the promissory note to A for a specific puppy sold
to him by A. There is confusion or merger of rights in the person of A.

27. D owes C P1,000 the same being evidenced by a promissory note with G as guarantor.
Subsequently, C indorses back the promissory note to D. D, therefore became the debtor and
creditor with respect to the same obligation resulting in the extinguishment of the obligation. As
such, the accessory obligation of guaranty of G is also extinguished. (Art, 1276)

28. Suppose in number 24, C indorses the promissory note to F and the latter indorses the same
promissory note to G, then the characters of creditor and guarantor are merged in the same
person. In such a case, the accessory obligation of guaranty is extinguished but the principal
obligation of D still subsists. Because G is now the creditor, he can demand from D the amount of
P1,000. (Art. 1276)

29. What is COMPENSATION?

30. What is Legal compensation?

31. What is Voluntary compensation?

32. X owes Y P500 which is now due and demandable. Y also owes X P500 also due and demandable.
There is compensation. (Arts. 1278; 1279)

33. D owes C P1,000. In another obligation, X owes D P1,000 with C as guarantor. Compensation will
not take place because D and C are not bound principally to each other, C being merely a
guarantor in another obligation. (Art. 1279 par. no. 1)

34. X owes Y P1,000 with G as guarantor due and demandable. Y owes X P1,000 due and demandable.
Suppose X becomes insolvent and Y demands payment from G (as guarantor), G may set up
compensation as regards the debt of Y to X. (Art. 1280)

35. Can there be partial compensation ? illustrate. (Art.1281)

36. What is Facultative compensation? (Art. 1287 par. 1; Art. 1288)

37. May the parties agree upon the compensation of debts which are not yet due? (Art. 1282)

38. X will deliver to Y ten (10) sacks of first- class white rice due and demandable. Y is also obliged to
deliver to X ten (10) sacks of first- class white rice due and demandable. What is the effect?

39. A will deliver to B a narra dining table. B binds himself to deliver to A a bed made of dao wood.
Both obligations are due and demandable. Is there compensation?

40. What are instances when compensation shall not take place? (Arts. 1287; 1288)

41. What is NOVATION? What are the three kinds of novation?


42. Is novation presumed? (See Art. 1292) How may an obligation be extinguished by another
obligation?

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43. X binds himself to give Y a male German shepherd puppy. Later on, X agrees to give Y a male
Labrador puppy. Is there novation? (Art. 1292)

44. A agrees to deliver to W 50 bottles of multivitamins. But later they agreed to change the object
to ecstasy party drug. Is there novation? Is X still obliged to sell to W 50 bottles of multivitamins?
(Art. 1297)

45. A owes B P5,000 due on December 31, 2021. X, a third person, went to B and obliged himself to
pay the debt of A. If B accepts X in place of A, what is the effect? What kind of substitution of
debtor is this? (Art. 1294)

46. X obliged himself to deliver to Y 20 sacks of first class white rice. Later on, X brought to Y his friend
W and proposed to Y that W will take his place as debtor with respect to the obligation to deliver
20 sacks of first class white rice. If Y agrees to the proposal of X, what is the effect? What kind of
substitution of debtor is this? (Art. 1295)

47. What is Subrogation?

48. Kinds of subrogation:


a. A owes B P5,000. With the consent of A, B entered into a contract assigning (transfer) his
credit to X. What kind of subrogation is this? Define.

b. X owes St. Peter funeral parlor the sum of P10,000. X also owes W P3,000. Knowing the debt
of X to St. Peter, W pays the obligation without the consent of X. In this case, W is subrogated
in the rights of St. Peter as preferred creditor and he (W) is entitled to be paid ahead of other
obligations.

A owes B P5,000 guaranteed by X. A becomes insolvent. X paid the obligation of A to B. X is


subrogated in the rights of B.

W owes Z P10,000. With the consent of W, X paid W’s indebtedness to Z. X is subrogated in


the rights of Z.

In the above examples (letter b), what kind of subrogation that took place? Define.

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