Lecture 8

Extinguishments of Obligations

● When a person has an obligation he is in a manner of speaking bound kaya nga

sabi nga natin nung araw in the olden days when a person cannot pay his
indebtedness he is literally bound at iniilakad siya sa kalye to tell that “hey this
person has an obligation - marami siyang utang”. He is only free from that
bonding kapag nakabayad na siya sa utang/obligation.
● If there is anything that is important from a obligor is the obligor to be
free/makawala/makalaya sa kanyang obligation kase sabi natin ang obligation ay
isang uri ng bigat. Minsan naeexperience natin yung very conscious sa
indebtedness minsan sabihin mo sa kaklase mo na inutangan mo ng 20 pesos
yung iba makakalimutan na yon but those ppl who worth their salt/good they
will continue to be conscious of their indebtedness “uy classmate hindi ko
nakakalimutan yung utang ko sayo may utang ako sayo nung nagpunta tayo sa
canteen wala lang akong barya” “ano ka ba naman bente pesos lang di ka
makatulog”. Minsan pabiro lang yon pero yung iba are concerned of the
obligations.
● Our objective or passion is to be able to free ourselves from indebtedness or
obligation because it gives us the sense of freedom or relief.

Article 1231 - Obligations are extinguished:

(1) By payment or performance:
(2) By the loss of the thing due:
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor and debtor;
(5) By compensation;
(6) By novation.
Other causes of extinguishment of obligations, such as annulment, rescission,
fulfillment of a resolutory condition, and prescription, are governed elsewhere in
this Code.
➜ states the manner or extinguishment of obligation mentions 6 grounds for the
extinguishment of obligation so yung 6 na yon yun yung unang inenumerate ng
1231 pero meron pang ibang grounds for extinguishment of obligation.
➜ Other cause of extinguishment of obligation: death of the obligor - it’s not
because the obligor is indebted to you and then namatay siya it does not
automatically distinguish your obligation kase by virtue of succession whatever
properties that obligor had during his lifetime will be transferred to his/her
heirs and his/her heirs is answerable to his/her indebtedness made by their
father or mother from whom he/she inherited.
➜ There are instances that can actually end the obligation for example the
obligation to support so the father is obligated to support his son but when the
father dies then the obligation to support ends but then subject to certain
exceptions.
➜ PAYMENT - one of the most common grounds of extinguishing an obligation
but you see a payment as explained in the book in the negative sense kasi sabi
niya “payment is not only” - sabi niya hindi lang in the delivery of money kasi
tayo pag nagbayad tayo yun na yung payment pero mas malawak ang concept
ng payment in OBLIGATIONS AND CONTRACTS.
EXAMPLE: IF I OWE YOU A PIECE OF LAND AND I DELIVER IT TO YOU <-
legally this is considered as payment
➜ Payment and performance are synonymous.
➜ Payment is not only the delivery of money but also the performance in any
other manner in an obligation. So obligation ko sayo is to build a building
obligation to do but by not building a building I shall have paid my obligation to
you. By not doing anything that is my performance.
➜ Running concept is the desire/objective ng obligor ay yung obligation ay
maextinguish or matapos kasi kung hindi maeextinguish yung obligation niya
hindi siya mapuput to rest.
➜ Sometimes payment can result into certain consequences that are not quite
easy to comply with what do we mean? EXAMPLE: I AM INDEBTED WITH YOU
FOR 100,000 PESOS SO AKO ANG OBJECTIVE KO ANG TALAGANG LAYUNIN
KO MATAPOS NA YUNG PAGKAKAUTANG KO MAGBABAYAD NA KO NG UTANG
KO SO PUMUNTA AKO SA BAHAY MO EH WALA KA NGAYON MERON
NAGPAKILALA DON NA KAPATID NIYA TAPOS SABI NIYA IBINILIN DAW
SAKANYA YUNG 100K AT NAGBAYAD KA NAMAN NG 100K IN GOOD FAITH EH
 BIGLA PALA PRETENDER TAPOS D PALA KILALA NUNGCREDITOR SO MASKI
NAGBAYAD KA AT HINDI KA NAGBAYAD SA TAMANG TAO MAKIKITA NATIN
TO SA MGA DFF CONSEQUENCES/SITUATION HINDI KA PARIN BAYAD SA
IYONG OBLIGATION OF COURSE WITHOUT PREJUDICE HABULIN MO KUNG
SINO MAN SUMINGIL SAYO OR MALI YUNG MANNER OF PAYMENT MO IT
DOES NOT AUTOMATICALLY MEAN THAT YOUR PAYMENT IS VALID.

Art. 1233. A debt shall not be understood to have been paid unless the thing or
service in which the obligation consists has been completely delivered or rendered,
as the case may be.
➜ May utang ka na 100K saakin then naibayad mo 80K lang, there is no total
extinguishment of the obligation because debt/payment should be understood
to be a payment of full therefore kung 80K edi hindi pa complete ang bayad mo.
Nagpagawa ako ng bahay sayo eh kulang pa hindi pa tapos 70% lang tapos there
is no complete payment or I agreed to sing in 3 consecutive events in which I
entered into obligation into a contract with you then I have to do all of those for
my payment to be completed.

Art. 1234. If the obligation has been substantially performed in good faith, the
obligor may recover as though there had been a strict and complete fulfillment, less
damages suffered by the obligee.
➜ Gives us a bit of exception to that rule which means: “pwede palang hindi 100%
complete ang payment but still it will stil be considered as payment. WHEN IS
THAT? WHEN THERE IS A SUBSTANTIAL COMPLIANCE.
➜ SUBSTANTIAL - performance/payment has been made to a significant extent /
halos sapat na / the majority of the obligation has been complied with and
konting konti na lang ang depirensya. EXAMPLE: NAGPAGAWA AKO NG
BAHAY 20M ANG WORTH THEN NAIDELIVER NIYA NA PERO PAG TINGIN
KO KULANG NG ISANG DOOR KNOB TECHNICALLY HINDI COMPLETE
YUNG PERFORMANCE/PAYMENT MO SAKIN BUT THEN THAT IS
CONSIDERED AS SUBSTANTIAL COMPLIANCE EH YUNG DOORKNOB ANG
HALAGA NUN AY SIGURO MGA 100K THEN I CAN STILL CLAIM FOR U
 DAMAGES THEN D MO MAILAGAY THEN AKO NALANG BIBILI KASE
MINSAN.
➜ MINSAN NAGCOMPLY KA NA SA OBLIGATION KAYA LANG AFTER A WHILE
YUNG PAG KUHA MO NG SUPPLY HALIMBAWA NAGSUSUPPLY KA
PARTICULAR CHEMICAL TAPOS EVENTUALLY NAGING VERY RARE PERO
90% NAKACOMPLY KA NA THEN THAT IS DEEMED TO BE ALREADY
COMPLIED WITH SUBJECT AS WHAT 1234 MENTIONED.

Art. 1235. When the obligee accepts the performance, knowing its incompleteness
or irregularity, and without expressing any protest or objection, the obligation is
deemed fully complied with.
➜ Nagpagawa ka ng bahay pagdeliver sayo walang bubong sabi mo “wow this is a great
work of art ngayon lang ako nakakita okay na to architect eto na bayad ko”. If there is
an obligation on the part of the obligor to you na alam mo namang incomplete tapos
knowing its incompleteness may utang sayo 100K tapos nagdagdag kase 1k naibayad
mo 99K tapos hindi na tinanggap. So knowing its incompleteness tapos inaccept mo
then deemed to be fully paid

Art. 1236. The creditor is not bound to accept payment or performance by a third
person who has no interest in the fulfillment of the obligation, unless there is a
stipulation to the contrary.

Whoever pays for another may demand from the debtor what he has paid, except
that if he paid without the knowledge or against the will of the debtor, he can
recover only insofar as the payment has been beneficial to the debtor.
➜ POINT OUT: kung ikaw ang creditor tapos may nangutang sayo there are
instances another person to whom you are not privy - remember our term
privity of contract you are not privy because you don’t have any agreement with
him. May utang sayo si Juan but bigla nalang etong si Pedro biglang binabayaran
yung pagkakautang. TANONG: pag ba tinanngap mo yung bayad ni pedro na wala
naman kinalaman sa pagkakautang thus that extinguish the obligation? THAT IS
THE SITUATION CONTEMPLATED UNDER ARTICLE 1236.

A 100K ➡ X
 (debtor) (creditor)

B (3RD PERSON)

➜ Si A may utang kay X ngayon sabi ni X kay A “A papautangin kita kaya lang
kapag hindi ka nakabayad gusto ko may guarantor ka” “X sige kung
naghahanap ka ng guarantor meron naman akong guarantor si B” So kung d
nakabayad si A meron siyang guarantor si B sumakatuwid si B interested in
having that obligation to extinguish whether makabayad si A or not hindi pa
talaga alam kung magbabayad siya or hindi eh eto naamng si B nagvolunteer na
magbayad kay X well X cannot refuse the payment of B because the guarantor
has interest in the performance or extinguishment of the obligation meron
siyang connection/certain extent/privity.
➜ GUARANTOR = parang security because it makes u feel secured
➜ Even if B has no interest in the obligation hindi siya guarantor wala siyang
maski anong connection kay A pero ang usapan nila ni X at ni A, “A papautangin
kita” “kapag meron nagbayad maski walang connection sakin dapat tanggapin
mo” - so unless if there is a stipulation to the contrary eh walang choice si X
basta kundi tanggapin.
➜ Si B is a stranger wala siyang privity of contract with A or X so he is a stranger
to the agreement. However, for some reason nagbayad siya SO WHAT IS THE
CONSEQUENCE OF THAT? KUNG BA SI B BINAYARAN NIYA YUNG 100K KAY X
NA WALANG ALAM SI A YET SI X TINANGGAP NIYA KASE MAHIRAP
MAIWANAN SA PANCITAN EH KUNG D MAKABAYAD SI A ANDITO NA SI B
WILLING NA SIYA MASKI SINO KAHIT WALANG CONNECTION EDI
TANGGAPIN KO NA SO BINAYARAN NGAYON NI B SI X, ANSWER 2ND
PARAGRAPH OF ART 1236. KAPAG PALA NAGBAYAD SI B AS A RULE PWEDE
NIYANG KUNAN NG REIMBURSEMENT YUNG BINAYAD NIYA KAY A KAYA
LANG SABI WHOEVER PAYS WITHOUT THE KNOWLEDGE OF THE ORIGINAL
DEBTOR OR EVEN AGAINST HIS WILL CAN ASK FOR REIMBURSEMENT FROM
A EXCEPT THAT IF HE PAYS WITHOUT HIS KNOWLEDGE OR AGAINST HIS
WILL B CAN RECOVER ONLY TO THE EXTENT TO BENEFICIAL TO A. MEANS
THAT: KUNG AYAW NI A O HINDI NIYA ALAM NAGBAYAD SI B KAY X PWEDE
SIYA MAGREIMBURSE KAYA LANG ANG PWEDE NIYA LANG IREIMBURSE
YUNG AMOUNT WHICH IS BENEFICIAL TO A - EH SI A PALA BAYAD NA NG
KALAHATI DAHIL SA KAGANDAHANG LOOB NI B BINAYARAN PARIN SO ETO
 NAMAN SI X TINANGGAP PARIN. SO ANG PWEDE NIYANG I REIMBURSE FROM
A IS ONLY TO THE EXTENT WHICH HE WAS BENEFITTED KASI NUNG
BINAYARAN NIYA YUNG 100K EXTINGUISH NA YUNG OBLIGATION NI A PERO
NAEXTINGUISH NOT BECAUSE KULANG PA SI A NG 100K BUT THE BALANCE
IS 50K IT IS TO THE EXTENT THAT A IS BENEFITTED SO THAT IS THE ONLY
AMOUNT THAT B CAN REIMBURSE FROM A WHETHER OR NOT HE AGREED
TO THE PAYMENT BY B OF THE OBLIGATION. BAKIT? EH U ARE ENRICH TO
THE EXTENT 50K BAYARAN MO ANO REMEDY NI B HABULIN MO SI X KASE
NAKATANGGAP SIYA NG SOBRA.

Art. 1237. Whoever pays on behalf of the debtor without the knowledge or against
the will of the latter of the debtor, cannot compel the creditor to subrogate him in
his rights, such as those arising from a mortgage, guarantee, or penalty.
➜ Talks about this particular situation / further consequences of this particular
situation.
➜ SUBROGATION - is being place on the shoes of another ; is the right to take over the
right of another person kung meron si creditor na karapatan na kumolekta ng 100k sayo if
I am subrogated to his right then ako ngayon ang may karapatan na kumolekta sayo.
➜ SAME EXAMPLE SA 1236: Kahit nagbayad na siya, so si B without the consent of
A nagbayad siya kay X, TANONG: KUNG WALA SI B SINO ANG PWEDENG
KUMOLEKTA KAY A OBVIOUSLY SI X NGAYON DAHIL NABAYARAN NA NI B SI
X NAWALA NA YUNG KARAPATAN NI X NA KUMOLEKTA KAY A BAKIT?
NABAYARAN NA SIYA EH KANINO NA NGAYON MAY UTANG SI A?? KAY B
THEN SI B ANG BAGONG CREDITOR.
➜ Ang sinasabi lang ng 1237 whoever pays on behalf of the debtor cannot be placed
in the shoes of the original creditor. You cannot compel the creditor to
subrogate it with his rights such as those arising from a mortgage guarantee or
penalty. This means example si A borrowed money from X,, originally si X yung
creditor ngayon bago pumasok sa picture si B sabi niya, “A kung hindi ka
makabayad gusto ko maging guarantor mo si G kase kung hindi ka
makakabayad ibig sabihin si G magbabayad in this particular instance dahil
nagbayad si B kay X without his knowledge he cannot be completely subrogated
to his rights because if he has guarantee kung may guarantor ka, yung unang
example natin pag hindi nakabayad si A pwedeng habulin ni X si G kase siya
 yung guarantor pero dito dahil binayaran na ni B at siya na yung naniningil
ngayon kay A pag hindi nakabayad si A hindi niya pwedeng habulin si G. So it
means it cannot be completely subrogated in the right of the creditor in the
sense na pwede niyang habulin si G (guarantor).

Art. 1238. Payment made by a third person who does not intend to be
reimbursed by the debtor is deemed to be a donation, which requires the
debtor's consent. But the payment is in any case valid as to the creditor
who has accepted it.

A 100K ➡ X
(debtor) (creditor)

B (3RD PERSON)

➜ Bago magbayad si A nakapagbayad na si B ng 100K the difference is si B does

not want to be reimburse nagmagandang loob, “wag mo na ko bayaran”.
➜ States that kapag ikaw gusto mo magmagandang loob (B) then may utang si A
nagmagandang loob ka ngayon kay X pero ikaw ayaw mo na mareimburse thank
u nalang sabi ng batas “that act of B is an act of donation”
➜ DONATION - is the gratuitous act or transfer of a particular thing kaya nga
may gratuitious it is the act of gratitude you do not expect any payment except
nalang yung papasalamat.
➜ However, under the law of donation for that donation to be valid it has to be
accepted by the donee. In this particular case for it to be considered as donation
by B, A has to accept that donation kaya nga makikita niyo sa deed of donation
baka merong ibang makakita sainyo nakalagay dun yung acceptance or
comformity kase hindi pwede ipaglandakan ang kabaitan or ipagpilitan ang
genorosity kase kung ayaw niya edi wag and minsan for a purpose.
➜ This means that kung si B nagbayad out of kagandahang loob ayaw niyang
magpareimburse then donation yon. Dahil mataas pride ni A, he didnt accept
the donation the payment to X is already valid dahil tinanggap ni X so anong
consequence non? So magbabayad/reimburse si A kay B kase later on pag
nagbago ng isip si, halimbawa sabi ni B, “ah ayaw mo pala ikaw na nga
 binayaran ko ng utang ayaw mo nagmamataas ka pa” nagisip ka biglang sabi mo
“edi ba donation mo na yon” ay hindi pwede there is no valid donation.

Art. 1239. In obligations to give, payment made by one who does not have the free
disposal of the thing due and capacity to alienate it shall not be valid, without
prejudice to the provisions of Article 1427 under the Title on "Natural
Obligations."
➜ Halimbawa: may utang ako sayo 1k wala ako maibayad pero may nakita akong tv
ibinayad ko sayo eh hindi valid yon kase hindi naman sakin yung tv.

Art. 1240. Payment shall be made to the person in whose favor the obligation has been
constituted, or his successor in interest, or any person authorized to receive it.
➜ Akala mo napasimpleng tanong nung to whom shall payment be made
sometimes it can create complications.
➜ Another important aspect in obligation and contracts kasi madalas ito mangyari
in real life
1. Kailangan magbayad ka lang to the creditor or to the person to whom the
obligation is due or constituted.
2. To the successor in interest, so sino yung successor in interest so halimbawa si
creditor ay si X dapat eh may utang ka kay X so kay X ka magbayad. Kanino ka
pa pwede magbayad? To his successor in interest halimbawa yung inissue mong
promisory note sakanya I promise to pay creditor or order or I promise to pay
Juan Dela Cruz the amount of 100K ninegotiate niya yon tapos binigay niya
ngayon kay X tapos siya ngayon yung nagsucceed or nasubrogate sa right ni
creditor siya bayaran mo. Other example: si X ay namatay and the death of a
person pero wag mo kalimutan na baak may utang ka tapos ngayon
nananalangin ka na mamatay nalang yung pinagkakautangan mo eh namatay
nga ay hindi ibig sabihin patay na yung obligation mo but the heirs or successor
in interest can still collect from you.
3. Authorized person can also accept payments so dito na pumapasok yung word
na or term na SPA - Special Power of Attorney. If I authorized u to do something
on my behalf to sell my property or buy something from me. Usually ginagawa
yan ng SPA. If the person has given an authority to receive a payment but u r
 convinced that he is the authority then sakanya ka magbayad kase pag sakanya
ka nagbayad tapos d pala siya then bayad ka ulit kase you did not extinguish the
obligation.
*SPA - Special Power of Attorney - it is a document or special power authorizing

Art. 1241. Payment to a person who is incapacitated to administer his property

shall be valid if he has kept the thing delivered, or insofar as the payment has been
beneficial to him.
Payment made to a third person shall also be valid insofar as it has redounded to the benefit of
the creditor. Such benefit to the creditor need not be proved in the following cases:
(1) If after the payment, the third person acquires the creditor's rights;
(2) If the creditor ratifies the payment to the third person;
(3) If by the creditor's conduct, the debtor has been led to believe that the third
person had authority to receive the payment.
➜ There are times when the person is on his/her legal age he loses his legal
standing as a person or as a person who can be a subject matter of legal
relations. If you are 18 yrs old you are entitled as an adult or person of maturity
age to do the basic right of a person/legal person like you can vote or buy. If
you're a minor you cannot enter into a contract on your own wala ka yung
tinatawag na legal capacity to transact.
➜ There are instances when a person does not have a legal personality to transact
eto yung pinag uusapan ng 1241 hindi lang minority insanity for example a
person is stressed then he becomes out of his mind or insane. When a person is
insane he is not on his legal self therefore now he is legally incapacitated to deal
with you.
➜ Eh may utang ka sakanya tapos dineclare na siya sa court na incapacity may
utang ka 100K then naginsist ka parin magbayad saknaya valid ba yung
payment? Kung tinago niya 100K at nasa kanya pa valid yon or kaya binili niya
pagkain or nagpadoctor siya or bili gamot or to the extent that was beneficial to
him so valid yon. Pero pagkabayad mong 100K lumabas siya isinabog niya yung
100K pulutan mga tao then bayad ka ulet. Pay to someone who is authorized to
receive the payment.
➜ A pay to ➡ X
Y
➜ Eh ngayon nagbayad ka kay Y unang una bat mo gagawin yon but for some
reason nagbayad ka kay Y but meron siyang SPA or successor of interest or
sakanya ninegotiate yung promissory note its like u r paying to X. But this
person Y is not authorized to receive the payment it is valid but if X benefitted
from the payment then it is valid.
➜ You dont have to prove na nagbenefit si A because the 3rd person acquired the
registration of the creditor so sabi niya “sige kung binayaran ka ni A the eto na
yung promissory note ibibigay ko na sayo” so the 3rd person acquired the right.
➜ RATIFICATION - means his consent approving something that was done halimbawa: si
X wala ka naamn binigay na authority sakanya ay bumili ng kotse A oh binibigay ko
kotse sayo kase pinapabigay ni Mejia eh wala naman siyang authority ah I am not obliged
to pay pero later on sige na nga maski wala siyang authority babayran ko na ok na rin
sakne that means I have gratify or given my consent to that particular transaction.
➜ Kahit hindi authorized si A I made some certain acts “A kung sino maningil sayo
bayaran mo” parang I let you believing parang kahti sino maningil sayo bayaran
mo then I should still be then that payment still valid.