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When monthly statements were made by the bank

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Unformatted text preview: ontract c. If neither the debtor nor creditor has made the application or if the application is not valid, then application, is made by operation of law WHO MAKES APPLICATION OF DEBTS Page 115 of 297 Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 • • GENERAL RULE: Debtor EXCEPTION: Creditor a. Debtor without protest accepts receipt in which creditor specified expressly and unmistakably the obligation to which such payment was to be applied – debtor in this case renounced the right of choice b. When monthly statements were made by the bank specifying the application and the debtor signed said statements approving the status of her account as thus sent to her monthly by the bank d. In case no application is made: • Apply payment to the most onerous • If debts are of the same nature and burden, application shall be made to all proportionately 2. DACION EN PAGO DACION EN PAGO – mode of extinguishing an obligation whereby the debtor alienates in favor of the creditor property for the satisfaction of monetary debt; extinguish up to amount of property unless w/ contrary stipulation; A special form of payment because 1 element of payment is missing: IDENTITY CONDITIONS FOR A VALID DACION: a. If creditor consents, for a sale presupposes the consent of both partie b. If dacion will not prejudice the other creditors c. If debtor is not judicially declared insolvent • NOTE: DACION is governed by the law on sales 4. CESSION or ASSIGNMENT CESSION/ASSIGNMENT IN FAVOR OF CREDITORS – the process by which debtor transfer all the properties not subject to execution in favor of creditors is that the latter may sell them and thus, apply the proceeds to their credits; extinguish up to amount of net proceeds ( unless w/ contrary stipulation ) QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. KINDS OF ASSIGNMENT: a. Legal – governed by the insolvency law b. Voluntary – agreement of creditors REQUISITES OF VOLUNTARY ASSIGNMENT: a. More than one debt b. More than one creditor c. Complete or partial insolvency of debtor d. Abandonment of all debtor’s property not exempt from execution e. Acceptance or consent on the part of the creditors EFFECTS OF ASSIGNMENT: a. Creditors do not become the owner; they are merely assignees with authority to sell b. Debtor is released up to the amount of the net proceeds of the sale, unless there is a stipulation to the contrary c. Creditors will collect credits in the order of...
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