MODULE 5

Extinguishment of
Obligations
By: Atty. NOEL ALBERTO S. OMANDAP
LOSS OF THE
THING DUE
Module 5, Part 2. BY: Atty. NOEL ALBERTO S. OMANDAP
Concept
A thing is considered lost when it
perishes, or goes out of commerce, or
disappears in such a way that its
existence is unknown or it cannot be
recovered. (Physical and legal
impossibility are included)
 Effect of loss on the
obligation

Determinate Generic
Thing Thing
Art. 1262 Art. 1263

An obligation which consists in the delivery of a determinate

thing shall be extinguished if it should be lost or destroyed
without the fault of the debtor, and before he has incurred in
In an obligation to deliver a generic thing, the loss or
delay.When by law or stipulation, the obligor is liable even for
destruction of anything of the same kind does not extinguish
fortuitous events, the loss of the thing does not extinguish the
the obligation.
obligation, and he shall be responsible for damages. The same
rule applies when the nature of the obligation requires the
assumption of risk.
 NOTE:
Article 1268. When the debt of a thing certain
and determinate proceeds from a criminal
offense, the debtor shall not be exempted from
the payment of its price, whatever may be the
cause for the loss, unless the thing having been
offered by him to the person who should receive
it, the latter refused without justification to
accept it.
 The debtor in obligations to do
shall also be released when the
prestation becomes legally or
Loss in physically impossible without the

personal fault of the obligor.

obligations
When the service has become so
difficult as to be manifestly beyond
the contemplation of the parties,
the obligor may also be released
therefrom, in whole or in part.
EFFECT OF
PARTIAL LOSS
Article 1264. The courts shall determine
whether, under the circumstances, the
partial loss of the object of the obligation
is so important as to extinguish the
obligation.
Creditor's right if the
loss is caused by a
third person
Article 1269. The obligation having been
extinguished by the loss of the thing, the creditor
shall have all the rights of action which the debtor
may have against third persons by reason of the
loss.

Ex: D is obliged to give a specific carabao to C. X

steals the carabao and slaughters it. D's obligation is
extinguished. C has the right to proceed against X.
 01

Condonation/
Remission
Concept
This refers to the forgiveness of an indebtedness.
To extinguish the obligation, it requires the
debtor's consent

Ex: D owes C P3,000. The debt is evidenced by a

promissory note. C informs D that he will no
longer collect the debt and delivers the
promissory note to D. D accepts C's generosity.
D's obligation is extinguished by
condonation/remission
 Form of condonation/remission
1. EXPRESS: One made orally or in writing. To be valid, it must comply with
the formalities of donation as follows:

a. When the remission involves an immovable property, the remission

and the acceptance must be in a public instrument. The public
document must specify the property remitted and the value of the
charges that the debtor (donee) must satisfy

b. If its involves movable:

- If value exceeds P5,000: Remission and acceptance must be written

- If P 5,000 or less, remission and acceptance

may be in any form. An oral remission requires the simultaneous
delivery of the thing or of the document representing the right
remitted.
Form of condonation/remission

2. IMPLIED: One inferred from the conduct of

the parties, such as when the creditor
voluntarily delivers the private document
evidencing the credit to the debtor
Effect of remission/renunciation of principal 10
obligation on the accessory obligation vice
versa

01 The remission of the principal debt extinguishes

the accessory obligation.

02 The remission of the accessory obligation

does not carry with it that of the principal
debt.
Confusion or
Merger
 M makes a promissory
note payable to P or order.
Confusion or merger is the
P indorses the note to A, A
meeting in one person of
to B, B to C. On due date, C
the qualities or the
indorsed the note back to
characters of creditor and
M. The obligation here is
debtor
extinguished because M is
now the creditor of himself
 Merger which takes
place in the person of the
EFFECT OF principal debtor or
MERGER creditor benefits the
WHEN THERE guarantors. Confusion
IS which takes place in the
person of any of the
GUARANTOR guarantors does not
extinguish the obligation.
MERGER IN A JOINT
OBLIGATION
A, B and C are joint debtors of X for P 9,000. The promissory note
evidencing the debt is assigned by X to Y, Y to Z and Z to A. A's
share of P 3,000 is extinguished by the merger of the qualities of
debtor and creditor in his person. B and C are still liable on the note
with A now as the creditor for P 6,000

Note that merger extinguishes only the share of the joint debtor or
creditor in whom the characters of debtor and creditor concur
MERGER IN A
SOLIDARY
OBLIGATION
Merger in one of the solidary debtors or solidary
creditors extinguishes the whole obligation.

Ex: A, B and C are solidary debtors of X for

P9,000. The promissory note evidencing the debt
is assigned by X to Y, Y to Z and Z to A. The whole
obligation is extinguished by confusion with all the
debtors now being the creditors. A may demand
reimbursement from B and C at P 3,000 each