Assessment No.

4 - Extinguishment of Obligations

I. Definition of terms:

Penal Clause
 is an accessory obligation attached to the principal obligation to assure greater
responsibility in case of breach Proof of actual damages suffered by the creditor
is not necessary in order that the penalty may be demanded. (Art. 1228, NCC)
 a clause (as in a contract) that calls for a penalty to be paid or suffered by a
party under specified terms (as in the event of a breach) and that is usually
unenforceable NOTE: A penalty clause differs from a liquidated damages clause
by not being tied to an estimate of possible actual damages.

Tender of Payment 
 A tender of payment may be defined as "an unconditional offer by a debtor or
obligor to pay another, in current coin of the realm, a sum not less in amount than
that due on a specified debt or obligation."' Tender of payment typically arises
within the law of commercial paper when a party obligated on a negotiable.
 The act on the part of the debtor of offering to the creditor the thing or amount
due
Legal Tender
 Legal tender is anything recognized by law as a means to settle a public or
private debt or meet a financial obligation, including tax payments, contracts, and
legal fines or damages.
Consignation       

Payment by Cession      
 Payment by cession is another special form of payment. It is the assignment or
abandonment of all the properties of the debtor for the benefit of his creditors in
order that the latter may sell the same and apply the proceeds thereof to the
satisfaction of their credits.
Dacion en pago   

Principal obligation   
 That obligation which arises from the principal object of the engagement which
has been contracted between the parties. It differs from an accessory obligation.
  Accessory Obligation
 defined by the lexicographer Arthur Leff in his legal dictionary is: An
obligation relevant but subordinate to another, not necessarily between
the same parties, e.g., the obligation of a surety hat obligation which arises
from the principal object of the engagement which has been contracted between
the parties. ... For example, in the sale of a horse, the principal obligation of
the seller is to deliver the horse; the obligation to take care of him till delivered is
an accessory engagement.

II. Discussion:
 1. What are the elements of a valid payment?
2. What are the requisites of payments?
3. What are the requisites of valid consignation?
4. Abe bought a residential lot from C4 Realty Co. via a Contract to Sell. Abe
suspended payment on account of delay in the construction of the amenities
within the period provided in said contract. C4 Realty Co. did not reply and
instead then sent a notice of account payable to Abe for the payment of the
balance, with interest and penalty. Abe refused to pay interest and penalty. Is
Abe liable to pay interest and penalties despite the facts that C4 Realty Co. was
delayed in the construction of the subdivision amenities? Explain your answer.

III. Read and make a digest of the following cases.

EDMERITO ANG GOBONSENG, and EDUARDO ANG GOBONSENG, SR., vs.

UNIBANCARD CORPORATION, G.R. No. 160026, December 10, 2007

ROYAL CARGO CORPORATION vs. DFS SPORTS UNLIMITED, INC., G.R. No.
158621, December 10, 2008

SPOUSES OSCAR and THELMA CACAYORIN, vs ARMED FORCES AND POLICE

MUTUAL BENEFIT ASSOCIATION, INC., G.R. No. 171298, April 15, 2013

SOCIAL SECURITY SYSTEM, vs. MOONWALK DEVELOPMENT & HOUSING

CORPORATION, ROSITA U. ALBERTO, ROSITA U. ALBERTO, JMA HOUSE, INC.,
MILAGROS SANCHEZ SANTIAGO, in her capacity as Register of Deeds for the
Province of Cavite, ARTURO SOLITO, in his capacity as Register of Deeds for Metro
Manila District IV, Makati, Metro Manila and the INTERMEDIATE APPELLATE COURT,
G.R. No. 73345. April 7, 1993.