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PAYMENT
PAYMENT
OBLIGATIONS
LLB1, GROUP 1
PAYMENT OR PERFORMANCE
• 1. INTEGRITY
• 2. IDENTITY
• 3. INDIVISIBILITY
KINDS OF PAYMENT
• NORMAL
WHEN THE DEBTOR VOLUNTARILY PERFORMS THE PRESTATION STIPULATED;
• ABNORMAL
WHEN HE IS FORCED BY MEANS OF A JUDICIAL PROCEEDING, EITHER TO COMPLY WITH THE
PRESTATION OR TO PAY THE INDEMNITY (TOLENTINO, 1991).
REQUISITES OF A VALID PAYMENT
• REAL OBLIGATION
• SPECIFIC REAL OBLIGATION
• GENERIC REAL OBLIGATION
• PERSONAL OBLIGATION
• OBLIGATION TO PAY MONEY
MOOT COURT
CITIBANK VS SABENIANO
WHAT IS?
• CURRENCY
• LEGAL TENDER
• DEMAND DEPOSITS
• INSTRUMENTS/EVIDENCES OF CREDIT
EFFECTS OF INFLATION
• EXTRAORDINARY INFLATION
• EXISTS WHEN THERE IS A DECREASE OR INCREASE IN THE PURCHASING POWER OF THE
PHILIPPINE CURRENCY WHICH IS UNUSUAL OR BEYOND THE COMMON FLUCTUATION IN THE
VALUE OF SAID CURRENCY AND SUCH DECREASE OR INCREASE COULD NOT HAVE BEEN
REASONABLY FORESEEN OR WAS MANIFESTLY BEYOND THE CONTEMPLATION OF THE PARTIES
AT THE TIME OF THE ESTABLISHMENT OF THE OBLIGATION (TOLENTINO, 2002).
INTEGRITY OF PRESTATION
VITARICH VS LOSIN
WHO MAY DEMAND PAYMENT?
PCIB VS CA
WHO MUST PAY?
• THE FOLLOWING PERSONS MAY EFFECT PAYMENT AND COMPEL THE CREDITOR TO ACCEPT
THE PAYMENT:
• 1. DEBTOR HIMSELF;
• 2. HIS HEIRS AND ASSIGNS;
• 3. HIS AGENTS AND REPRESENTATIVES;
• 4. PERSONS HAVING INTEREST IN THE OBLIGATION; OR
• 5. PAYMENT BY A THIRD PERSON.
WHO MUST PAY?
PAYMENT MADE BY THIRD PERSONS
• GR: THE CREDITOR IS NOT BOUND TO ACCEPT PAYMENT OR PERFORMANCE BY A THIRD
PERSON.
• XPNS:
• 1. CONTRARY STIPULATION (NCC, ART. 1236).
WHERE PAYMENT MUST BE MADE?
• GR: PAYMENT MUST BE MADE IN THE PLACE DESIGNATED IN THE OBLIGATION (NCC, ART.
1251).
• XPN: IF THERE IS NO EXPRESS DESIGNATION OR STIPULATION IN THE OBLIGATION:
• 1. DELIVER A SPECIFIC/DETERMINATE THING
• AT THE PLACE WHERE THE THING WAS AT THE PERFECTION OF THE CONTRACT.
• 2. GENERIC THING
• AT THE DOMICILE OF THE DEBTOR
WHEN PAYMENT MUST BE MADE?
SPECIAL FORMS OF PAYMENT
DATION IN PAYMENT
• DEBTOR CEDES HIS PROPERTY TO HIS CREDITORS SO THE LATTER MAY SELL THE SAME AND THE
PROCEEDS REALIZED APPLIED TO THE DEBTS OF THE DEBTOR.
SPECIAL FORMS OF PAYMENT
PAYMENT BY CESSION
• CIRCUMSTANCES EVIDENCING PAYMENT BY CESSION
• DEBTOR ABANDONS ALL OF HIS PROPERTY FOR THE BENEFIT OF HIS CREDITORS IN ORDER
THAT FROM THE PROCEEDS THEREOF, THE LATTER MAY OBTAIN PAYMENT OF CREDITS.
• REQUISITES:
• 1. PLURALITY OF DEBTS;
• 2. PARTIAL OR RELATIVE INSOLVENCY OF THE DEBTOR; AND
• 3. ACCEPTANCE OF THE CESSION BY THE CREDITORS
DATION IN PAYMENT V. PAYMENT IN CESSION
DATION IN PAYMENT PAYMENT IN CESSION
Number of creditors
Ownership
Ownership is transferred to CR
Ownership is not transferred.
upon delivery.
Novation
An act of novation. Not an act of novation.
Presumption of insolvency
Does not presuppose insolvency. Presupposes insolvency.
SPECIAL FORMS OF PAYMENT
APPLICATION OF PAYMENT
• DESIGNATION OF THE PARTICULAR DEBT BEING PAID BY THE DEBTOR WHO HAS TWO OR
MORE DEBTS OR OBLIGATIONS OF THE SAME KIND IN FAVOR OF THE SAME CREDITOR TO
WHOM THE PAYMENT IS MADE .
SPECIAL FORMS OF PAYMENT
APPLICATION OF PAYMENT
• REQUISITES:
• 1. THERE IS ONLY ONE DEBTOR AND CREDITOR;
• 2. THE DEBTOR OWES THE CREDITOR TWO OR MORE DEBTS;
• 3. DEBTS ARE OF THE SAME KIND OR IDENTICAL NATURE;
• E.G. BOTH DEBTS ARE MONEY OBLIGATIONS OBTAINED ON DIFFERENT DATES.
• 4. ALL DEBTS ARE DUE AND DEMANDABLE, EXCEPT:
• A. WHEN THERE IS MUTUAL AGREEMENT BETWEEN THE PARTIES (TOLENTINO, 2002);
• B. THE APPLICATION IS MADE BY THE PARTY FOR WHOSE BENEFIT THE TERM HAS BEEN CONSTITUTED [NCC, ART. 1252(1]).
• 5. THE PAYMENT MADE IS NOT SUFFICIENT TO COVER ALL OBLIGATIONS.
MOOT COURT
• ACT OF DEPOSITING THE OBJECT OF THE OBLIGATION WITH THE COURT OR COMPETENT
AUTHORITY AFTER THE CREDITOR HAS UNJUSTIFIABLY REFUSED TO ACCEPT THE SAME OR IS
NOT IN A POSITION TO ACCEPT IT DUE TO CERTAIN REASONS OR CIRCUMSTANCES.
TENDER OF PAYMENT V. CONSIGNATION
TENDER OF PAYMENT CONSIGNATION
Nature