Chapter 4 Extinguishment of obligation General provisions Art. 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 resolutory condition, and prescription, are governed elsewhere in this code. Causes of extinguishment of obligation 1. Death of a party in case of an obligation requiring personal services. 2. Mutual desistance or withdrawal. 3. Arrival of resolutory period 4. Compromise 5. Impossibility of fulfillment 6. Happening of a fortuitous event Section 1 – Payment or performance Art. 1232 – Payment means not only the delivery of money but also the performance in any manner, of an obligation. Meaning of payment 1. In ordinary parlance, payment refers only to a delivery of money 2. As a legal mode of extinguishing an obligation, payment may consist of not only in the delivery of money but also the giving of a thing, the doing of an act, or not doing of an act. Debtor pays damages or penalty in lieu of the fulfillment of an obligation. 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. When debt considered paid 1. Integrity of prestation – partial or irregular performance will not produce the extinguishment of an obligation as a rule. 2. Identity of the prestation – the very prestation due must be delivered or perform. 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. Requisites for the application 1. There must be substantial performance. When the important or essential part of the contract has been performed and only a small or minor part has been thereof has not been carried out. 2. The obligor must be in good faith. Good faith is always presumed in the absence of proof to the contrary. Art. 1235. When the oblige accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation id deemed fully complied with. Recovery allowed when incomplete or irregular performance is waived 1. If payment is incomplete or irregular, the creditor may properly reject it. 2. In case of acceptance, the law considers that he waived his right. The whole obligation is extinguished Requisites for application of article 1235 1. Obligee knows that the performance is incomplete or irregular; and 2. He accepts the performance without expressing any protest or objection.
- Fall '19
- Debt, remission, Consignation