oblicon: notes/transcriptions 3

1231 (plcccno)

-obligations are extinguished through:

1. payment or performance

2. loss of thing due

3. condonation or remission

                -forget about the whole thing

4. confusion or merger

                -character of the debtor and creditor are merged

5. compensation

                -2 persons are creditors and debtors of each other, can be total or partial

6. novation (dacion is a part of this)

                -is the modification of an obligation by changing its object

or principal conditions

or by substituting the person of the debtor

-OLD CONTRAXT IS EXTINGUISHED BUT THERE IS A NEW CONTRACT

7. others (annulment, rescission, prescription, death= personal obligation, impossibility of performance, etc)

1232

-payment means delivery of money or

- performance in any other manner on an obligation (rendition of service)

Rules!!!!!!!!!!!!

-creditor has to accept the payment to extinguish obligation (express or implied)

Reason: creditor may refuse the payment validly under these conditions: (il3)

1. incomplete payment

2. not legal tender

3. paid by a 3^rd person who has no interest

-pre- existing obligation must exist so that there will be payment (option to buy is not a pre-existing obligation)

-burden of proof that the obligation has been paid is with the debtor

Factors to consider

1. What has been paid or delivered

1233- thing or service contemplated upon is delivered completely

1244- not a different object and debtor cannot substitute the act against the will of the obligee (specific)

1245- dacion en pago or novation (creditor consents to a different thing or service)

1246- generic thing (not demand superior (creditor) inferior (debtor)

1249- if money it must be in Phil. Peso or currency stipulated at the rate of exchange at the time of payment (case of new lumber and cf sharp: The repeal of R.A. No. 529 by R.A. No. 8183 has the effect of removing the prohibition on the stipulation of currency other than Philippine currency, such that obligations or transactions may now be paid in the currency agreed upon by the parties.)

                -clearing period

1.  bdo and china bank

X= depositor has an accnt in china bank (1M)

Y= creditor has an accnt in bdo

X issues a china bank check to Y (pay to d order of mr. Y/to cash or bearer if you use a fictitious name)

Y has 2 options:

a.        Go to china bank and have the check encashed

-can avail of clearing only if check is a crossed check

b.        Deposit the check in his bdo account

-Do will give/present it to china bank (drawee bank) for payment

                                -clearing period is usually 3 days

In case of a promissory note:

                It is, as a rule, not a legal tender: creditor cannot be compelled to accept it and will only extinguish the obligation after it has been encashed or if the value of the check has been diminished due to the fault of the creditor (stale checks).

                A cashiers/managers check is good as cash because it has certification that there are really enough funds in the account. Operates as an assignment of a part of the funds to the creditor, the moment it has been certified (the 1M in the account is automatically deducted with 1M). case of new pacific

                In contractual obligations to pay money, in case of extraordinary inflation the value of the currency at the time of establishment of obligation shall be the basis of payment (case of singson, serra and lantion)

a.        Inflation should be extra ordinary

b.        34% is not inflation

c.        There must be a declaration by competent authorities that there is such extraordinary inflation

Special forms of payment: Dacion en pago and cession

                1245

-Dation: property is alienated to the creditor in satisfaction of a debt in money

-governed by rules of sale

-form of novation

Elements:

a)       creditor must consent because it shall be governed by the laws on sale which is characterized by its consensuality- filinvest: it must be clear and categorical that the object was received in order to extinguish the obligation (not to sell the property)

b)       will not prejudice/defraud other creditors- accion pauliana (seek the annulment of the transactions entered into by the debtor) is the remedy for this

c)       debtor is not declared insolvent: if insolvent he is no longer allowed to dispose his assets

-Cession: debtor transfers all the property not subject to execution in favor of his creditors so that the latter may sell them and apply the proceeds to their credits.

Requisites:

1.        More than one debt

2.        More than one creditor

3.        Complete or partial insolvency (obligations exceeds the assets)

4.        Abandonment of all debtors properties not exempt from exclusion

5.        Acceptance or consent on the part of the creditors (all must agree- if does not agree go to court and file for insolvency because consent would no longer be needed)

2. How was it paid, delivered, performed

-rule on completeness of payment

(1233, 1248)

-creditor cannot be compelled to partially receive the prestations in which the obligation consists neither can the debtor be complied to make partial payments UNLESS

1. there is a stipulation

2. diff prestations are subject to diff conditions

3. joint debtor

4. solidary debtor

5. Work done in parts

6. debt is part liquidated and in part unliquidated

Exceptions

                1234

-if substantially performed in good faith= strict and complete fulfillment less the damages suffered by creditor
(substantial breach)

1235

-if creditor accepts performance knowing is incompleteness and does not protest= obligation is deemed fully complied with

-mere acceptance of a partial payment is not equivalent to the required acceptance (qualified acceptance)

Partial payment ????????????????????????????

3. Who paid or delivered

Must be debtor or his agent (establish first that person is a third party: recitation of Arnold)

creditor is not bound to accept from a third party with no interest in the fulfillment of the obligation

Exception (1236)

1.        There is a stipulation

2.        The third person has an interest in the said obli (co-debtor, guarantor, joint debtor)

If with knowledge and consent= reimbursement and subrogation (placed in the shoes of the creditor, he is now the creditor)

If without= only beneficial reimbursement: to the extent where the debtor has been benefited (may still claim the lacking money from creditor under solution indebeti)

Payment by incapacitated

Exceptions: money or fungible (can be consumed and replaced) in good faith

4. Who accepted the payment or delivery

Payment to incapacitated is valid if he has kept the thing delivered or insofar as the payment benefited him

Payment to a 3^rd party is valid if it redounded to the benefit of the creditor

5. When was payment or delivery made
6. Where was payment or delivery made

Loss of the thing due

1.        Object perishes or physically destroyed

2.        Goes out of commerce= illegal or cannot be the subject of legal obligation- feati case

3.        It disappears/ lost

Performance

1.        Physical impossibility

2.        Legal impossibility- feati case

3.        Moral impossibility

1262

Loss of determinate- not in delay and has no fault= obligation is extinguished= IMPORTANT: ELEMENTS

Still liable if:

1.        Debtor is at fault

2.        Liable for fortuitous event

a.        Provision of law

·         1165- in default

·         1165- promises to 2 or more persons with diff interest

·         1268- arises from a crime

·         2159- payee in solution indebiti is in bad faith

b.        Contractual stipulation

c.        Nature/assumption of risk

1263

If generic obligation sill exists= genus never perishes

Exception:

1.        The generic thing is delimited

2.        Generic thing has been segregated which results to the thing to be come specific

1264

Court shall determine partial loss is so important as to extinguish the obligation

1265

Presumption that loss was due to debtors fault

Exception:
1. Earthquake, flood, storm, natural calamity, fire due to accident

1266

Personal obligation which becomes impossible to comply without debtors fault shall release him from the obligation.

Impossibility must exist after the constitution of the obligation

Legal- working on a non working day

Physical- install a motor on a boat that was lost after perfection of the obligation

1267 debtor may also be released

Difficulty beyond the parties’ contemplation (rebus sic stantibus= a principle in international law) same condition at the time of the contracting continue to exist

Not applicable to real obligation because the word used is service READ NAGA CASE!

Article 1267 speaks of "service" which has become so difficult. Taking into consideration the rationale behind this provision, ⁹ the term "service" should be understood as referring to the "performance" of the obligation. In the present case, the obligation of private respondent consists in allowing petitioners to use its posts in Naga City, which is the service contemplated in said article. Furthermore, a bare reading of this article reveals that it is not a requirement there under that the contract be for future service with future unusual change. According to Senator Arturo M. Tolentino, ¹⁰ Article 1267 states in our law the doctrine of unforeseen events. This is said to be based on the discredited theory of rebus sic stantibus in public international law; under this theory, the parties stipulate in the light of certain prevailing conditions, and once these conditions cease to exist the contract also ceases to exist. Considering practical needs and the demands of equity and good faith, the disappearance of the basis of a contract gives rise to a right to relief in favor of the party prejudiced.

1268

Debt of a thing certain and determinate proceeds from a criminal offense, the debtor shall not be exempted the payment of its price whatever maybe the cause of the loss

-unless when he delivered it the creditor refused to accept w/out justification

1269

-transfer of right from the debtor to the creditor in case of loss

A is obliged to deliver a car to B but C destroyed the car. B has the right to sue C and not A.

Condonation or remission

1270

Requisites:

1.        There must be an agreement

2.        Parties must be capacitated and must consent

3.        Must be for liberality/gratuitous

4.        Obligation must be demandable

5.        Formalities of a donation= donation and acceptance must be in a public instrument (real property): read art 749 and 748 of civil code, 728,746,750 (if 5,000 and up needs to be in writing)

Art. 748. The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated.

If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be made in writing, otherwise, the donation shall be void.

Art. 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments.

Art. 746. Acceptance must be made during the lifetime of the donor and of the donee.

Art. 750. The donations may comprehend all the present property of the donor, or part thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced in petition of any person affected.

Rules in testamentary procedures: example (take effect upon/after my death: donation mortis causa)

                -witness must be seen to sign the docs, at least 2 witnesses, etc

*acceptance should be communicated during the lifetime of donor/donee

*donor must reserve means for support

Must not be INOFFICIOUS = contrary to the natural duty (legitime: inofficious if value of donation will affect the legitime of compulsory heirs)

Asset: 0

Previously D donated 10M assets

X and Y- compulsory heir (lets say ½ of the estate)

Spouse- (1/4 of the estate)

Free portion- (1/4 of the estate)

Donations will be collated so assets will become 10M

So X and Y- 5M and Spouse 2.5M

*applicable also in condonation

6.        Accepted by the donee

Implied remission 1271,72,74

1271

Effect of delivery of private document (any doc not notarized such as promissory note) evidencing the credit

-must be a private document

-a remission is presumed

-promissory note is returned to debtor

Elements: delivery and voluntarily done

1272

Presumption of voluntary delivery

Private doc appears in the hands of the debtor

1273

Renunciation of principal extinguishes the accessory obli (not the other way around)

-accessory follows the principal

1274

Pledge- accessory obligation- presumed remitted when the thing pledged is already found in the hands of the debtor after it has been given/deposited to the creditor (PRINCIPAL OBLI IS STILL REMAINS ENFORCEABLE)

                Usually in pawnshops

                Mortgage: owner retains the thing

                Pledge: thing is in the hands of the creditor

Confusion or merger

                -when it involves various individuals

A issued a check to B as payment of obligation (payable to bearer). B gave the check to C as payment of his obligation. C paid the same check to A for his obligation to A.

A who issued the check is the debtor. A who received the check from C is also the creditor.

Practice of rediscounting:

                X has a post dated check (50k, 02/20/2011). Since he still can’t use he check he sold it to Y for 48k. When Y receives the check and enchases it he will receive 50k thereby gaining 2k.

Must be principal creditor and principal debtor!!!! Guarantor and ect are not principal cred/debtor

1275

Obli is extinguished from the time the characters of creditor and debtor are merged in the same person

Compensation

                -2 persons in their own right become debtors and creditors of each other

Legal compensation- takes effect by operation of law, no need of any document or act (1279)

Set- off - must be pleaded and proven in court (more appropriate in judicial compensation)

-a case is filed but the plaintiff against the defendant but defendant says yes I am liable but since you also owe me then we should just compensate each other

Voluntary or conventional- both parties agree on a compensation, usually done when legal compensation cannot be done (not yet due, object of obligation is not same)

-they must execute an agreement

Fungible- capable of replacement

Requisites:

1.        Must be between the principal debtors and creditors

Example:

X is indebted to Y (50k). The son of Y, S, is indebted to X (50k). – there can be no compensation between X and Y here because S is not a principal debtor/creditor.

2.        Merger must be clear and definite

3.        The debts must be due

4.        Obligation  involved must be the same or identical (sums of money or fungible goods)

5.        Must be liquidated and demandable

6.        Neither of them there by any retention or controversy, commenced by third persons and communicated in due time to the debtor

Garnishment- same to attachment but to be used in deposits in bank

Attachment- when you file a case in court for collection of sum of money, you also ask for attachment. Upon filing of the case the assets of the defendant will be freezed.

Case of Gullas:

Bank and depositor has a creditor- debtor relationship. The relationship/contract here is really that of a loan where the bank is the debtor and the depositor is the creditor.

But if Y already filed a case in court and applied for writ of preliminary attachment and the court granted such petition, there is already retention.

Controversy is when debtor claims that he owns the 10M and not X. (Y only asked X to deposit the money in his account but X deposited it in his own account)

1287

Compensation is not proper in:

1.        Depositum- simple deposit of the goods for safekeeping. This is based on trust and confidence.

2.        Commodatum- chattel given to you for use w/out reward and u should return it

3.        Claims for support due by gratuitous title- support to be given because it is mandated by law except if it is support in arrears= support that was supposed to be given in the past (compared to  future support which cannot be the subject of compensation)

4.        Obligations ex delicto- obligations arising from crimes under art 104 of RPC

5.        Certain obligations in favor of government (taxes due to the government are not based on contract, they are not even debts) tax is based on law. The obli of the govt to you maybe based on a contract.

1285 ASK MARGA

Compensation in assignment of credit

*with consent of debtor

                -debtor cannot set up compensation as against the assignee

                -if you consent to the assignment it means you have waived your right

-therefore it is important that you have to make a reservation that you may still set up compensation

*with knowledge but w/o consent

                -debtor can set up compensation regarding debts prior to assignment

*w/out the knowledge of the debtor

                -debtor can set up compensation for all debts maturing prior to his knowledge of assignment

READ PAGE 457

Case of yusingco

The mortgagee becomes the owner: mortgage is extinguished but the principal obligation remains

Case of Garcia

Stockholders are not creditors of the corporation therefore there can be no compensation.

1280

debtor merged with creditor- principal and accessory is extinguished

debtor creditor merged with guarantor- only accessory is extinguished

Novation - modifying obligations

Takes place when there is new

1. Object or principal obligation or (dacion)

2. Debtpr or

3. Creditor

4. or a combination of any of them.

Can be extinctive or modificatory.

In extinctive there must be a clear intention to create a new obli and extinguish the old.

1291

Real- change the object or conditions

Personal change of person

                Debtor (substituting) 1293

                                Expromision

                                                Initiative must come from a 3^rd person

                                                New debtor and creditor must consent

Old debtor must be released from his obligation

Rights of new debtor upon payment (refer to prev articles)

With knowledge and consent

Without consent

                                Delegacion

                                                Initiative comes from old debtor

                                                ALL parties must consent

                Creditor (subrogating)

Conventional- agreement by all the parties (distinguish from assignment of credit, case of south city homes) READ!

                                Legal- by operation of law

                                1302 tiwasa!!!!!!!!!!!!!!!!!!!!!!!

Presumption of legal subrogation

(1) When a creditor pays another creditor who is preferred, even without the debtor's knowledge;

(2) When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor;

(3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter's share.

Extinctive vs modificatory

Requisites:

1.        Valid old obligation (void= no novation, voidable= valid till annulled)

2.        Intent to extinguish or modify the old obligation

3.        Substantial difference (incompatibility test)

4.        Capacity and consent of parties except in expromision

5.        Valid new obligation

1292- novation is not presumed

Express- declared in unequivocal/clear term

Implied- complete or substantial incompatibility

If time extension- there is no novation because the new period covers the old period

If time is decreased- there is novation because the new period does not cover the first period

Accessory only and does not affect the principal obligation.

Pledge, mortgage, guarantor

1293

Changing of debtor can be made w/out the consent of the old debtor but not w/out the consent of the creditor

1294

Effect of insolvency or non fulfillment of new debtor

A.       Expromision= empromision

Old debtor will not be responsible for the new debtor’s insolvency or non fulfillment

Could also be applied if with knowledge contrary would put old debtor in a worse condition

1295

B.       Delegation

Gen rule: old debtor will not be liable for non fulfillment

Requisites to hold old debtor liable

1.        The insolvency was already existing and of public knowledge at the time of delegation

2.        The insolvency was already existing and known to the debtor at the time of delegation

Note:

Not apply when

1.        3^rd person was only an agent

2.        3^rd person was only a guarantor

3.        New debtor only wants to be jointly or partly liable

1296

Stipulation pour autrui

Gen rule: extinguishment of principal extinguishes accessory

Exception: accessory obli is made in favor of a third party= must give consent

1297

If new obli is void then the old shall subsist unless parties intended that the former relation should be extinguished in any event

1298

If old oli was void- no valid novation

If old obli was voidable:

                If already annulled= void

                If not yet= yes (maybe annulled by debtor/ can be ratified)

1299

If original obli was subject to a suspensive or resolutory condition the new one is subject to the same unless there is a contrary stipulation.

1300

Subrogation (change of creditor)

Legal or conventional

Legal is not presumed

1301

Conventional subrogation requires consent of the original parties and the 3^rd party

1303

Transfers all rights

Either against the debtor or against 3rd persons

1304 Partial Subrogation

Creditor gives partial payment

A owes B 500. C pays 250 to B.

B has right to recover 250 as well as C.

B should be preferred when it comes to payment.

Basic Principles and Characteristics of Contracts

Liberty/mutuality/relativity/consentuality/obligatory force

1306

Must not be contrary to laws, morals, good customs, public order or public policy

*doctrine of

*non impairment of contracts is guaranteed by the constitution

Law

examples: labor standards and social legislations, pactum commissorium clause- prohibition on automatic appropriation of a property that is made as collateral in an obligation usually loan.

example: B borrowed money from C in the amount of 1 M and D executed a real estate mortgage relating to a parcel of land. The agreement was that in case of default the land will automatically become theirs.- pactum commissorium

Foreclose the mortgage so that the debtor can still join in the auction and may be able to buy back the land.

Recto law-should the vendee in a contract of sale of personal property the price which is payable in installments default in the payment of two or more of the agreed installments, the vendor may:

1.         exact fulfillment of the obligation or

2.         cancel the sale or

3.         foreclosure the chattel mortgage= usually in sale of cars

These remedies are alternative and not cumulative such that the exercise of one would bar the exercise of the others. Thus foreclosure of the mortgage and the actual sale of the mortgaged chattel for example, would bar any action to recover the deficiency of the purchase price. (example Toyota: cannot recover the deficiency after auction/foreclosure from the debtor) car worth 1M but auctioned at 700k only

 Maceda law-in the sale or financing of real estate on installment payments, excluding those covered by sales to tenants under RA 3844, as amended by RA 6389, where the buyer has paid at least 2 years of installments but defaults in the succeeding installments, the buyer has the following rights:

1. To pay without additional interest the unpaid installments due within the total grace period earned by him, which is fixed at one month grace period for every one year of installment payments made,

2. If the contract is cancelled, to receive the cash surrender value on the payments on the property made and after five years of installments, an additional 5% every yr but not exceed 90%of the total payments made

jurisdiction of court- to be determined by Congress, constitutional prohibition included)

                jurisdiction of the court: the authority of a court to hear a particular controversy (example: contract of lease must be filed at RTC when the law provides that it can only be filed at the MTC or 1^st level courts)

                venue of the court: where the court seats, who files the case has the option where the venue will be (his residence or the residence of the plaintiff)

                must contain exclusivity:

In case of dispute arising from this contract can only be filed before the appropriate court of Cebu City, to the exclusion of all others.

                Contract of adhesion: aka fine print rule

Contracts prepared solely by one party and the other party merely affixes his signature (any doubts shall be resolved against the one drafting the contract)

Constitutional prohibition: selling of lands to foreigners

Morals: (examples: scholarship grants for school propaganda purpose better if you just ask for damages (Cui case), excessive interest rates (Medel case)

Good customs (only when it does not render applicable statutes inoperative)

Public order (usually, public order considerations are already found in laws and local ordinances enacted pursuant to police power of the state and of local governments like zoning ordinance)

Public Policy

examples:

undue restraint of trade (case of Ferrazini case)- contract should state the time and place of restriction, to the extent necessary to protect the business/reasonableness,

an agreement that stifles the right of the state to prosecute, agreements allowing middleman 10% quota allocation in foreign exchange (Tee case) or of the amount that will be approved by the Import Control Office (Sy Suan Case) READ these cases!

                Affidavit of desistance in criminal cases: by themselves cannot be considered as basis for the dismissal of the case because the party is already the state and not the private individual (can be dismissed because lack of witness or evidence)

 Mutuality

1308: the contract must bind both contracting parties, it’s validity or compliance cannot be left to the will of one of them

*effects: a party cannot revoke or renounce a contract without the consent of the other party, nor can the contract be set aside on the ground that he had made a bad bargain

*if facultative resolutory, however, it is valid.- resolutory on the part of the debtor

Applications: case of allied bank

-unilateral increase if interest rate

Relativity

1311: contracts take effect only between parties, their assigns and heirs

Effects: a person cannot revoke, renounce, annul, set aside or nullify a contract to which he is not a party, nor can he ask for the performance or enforcement of said contract, nor be prejudiced by the said contract (res inter alius acta)

Exceptions:

1.        Nature, stipulation, law- contract of partnership/ contract of agency/ money debts: go to the estate of the person 1st

2.        Stipulation pour autrui- stipulation in favor of a 3^rd party

3.        Interference with contractual relations-

4.        Third person adversely affected by contract and accion pauliana- collective contracts like CBA

5.        Accion directa- creditor sue on a contract entered into by his debtor

6.        Contracts creating real right

Consensuality- the elements of a contract

If consensual- COC

If real- COCD

If formal- COCF

Stages:

-negotiation: on terms and conditions

Important in dealing with issues in interpretation of the terms and conditions (to determine the intent)

There are rules that govern the parties during the negotiation stage. There are even rules and duties while still negotiating.

-perfection

                Because obligations start from this phase, you can compel the other party to perform already

                When there is meeting of the minds there is already perfection: if there are some issues then lawyers will have something to do J

-consummation

                To know whether or not an obligation has already been complied with

Perfection- with reference to the way acceptance is made

Option Contract

A offered a parcel of land to B in the amount of 10M. B asked for 30 days to decide. A agreed gave him March 1 to 30 to decide. On March 25 B informed A that he will buy the land but A said that the land is already promised to C at 11M.

Is there a perfected contract? Can B sue A?

There can be withdrawal of the offer before the acceptance and made to the knowledge of the buyer or communicated to the buyer.

Except:

1.        When it has already been accepted

2.        When there is a valid option contract where the seller has to respect the period agreed upon

There is perfection if there is an option money involved because there is already a consideration. Consideration is either money or a promise.

Option money- not part of the purchase price, cannot be deducted of the purchase price, cannot get it back

Earnest money- reservation, part of purchase price UNLESS there is a stipulation to the contrary (you may get this back unless there is a contrary stipulation)

1324 vs 1479

PUT THE PROVISION HERE

A offered a parcel of land to B in the amount of 10M. B asked for 30 days to decide. A agreed gave him March 1 to 30 to decide. On March 25 B informed A that he will buy the land but A said that the land is already promised to C at 11M.

Sanchez vs Rigor

The term accepted unilateral promise to sell in 1479 is interpreted as accepting the option.

A made a unilateral promise to sell his land to B worth 10M. A gave him 30 days and B does not give a comment or answer on this. After some time B said that he is already willing to accept the unilateral promise. This acceptance should be construed as accepting the offer of 30 days to think (option contract).

Theories: MERC

Manifestation: the moment acceptance is MADE

Expedition: the moment acceptance is TRANSMITTED

Reception: the moment the acceptance is RECEIVED BY THE OFFERER

Cognition: the moment acceptance comes to the KNOWLEDGE OF THE OFFERER

Consent

Meeting of the minds- the concurrence of an offer that is certain and acceptance that is absolute upon the thing and the cause

Cognition theory is not followed in withdrawal of offer (school of thought B)

In withdrawal of acceptance such withdrawal must reach the offeror 1^st before the letter of acceptance

Requisites for the MEETING of the MINDS

1.        An offer that is CERTAIN

2.        Acceptance must be UNQUALIFIED and ABSOLUTE

What about in ads?

                Mere invitations only and not certain offers!

Except: if the ad is very specific as to its particulars (if you still have some things to ask it is still not certain!)

Must be definite in the object and the cause/consideration!

If the acceptance asks for something/char then it becomes a counter offer thus it needs the acceptance of the original offeror to make the ncontract perfect. - w/out any variance of any sort form the offer

An offer becomes ineffective upon the death, civil interdiction, insanity or insolvency of either party before acceptance is conveyed

Marlbarosa vs CA

Under 1319 an offer can be breached at any time until it is accepted

Application of Payments

1252

                -which among the two or more debts of the debtor is being paid

                -debts must be of the same kind and by the same debtor to the same creditor

                -all debts must be due

Step 1:

Debtor makes the designation. If not the creditor makes it in the receipt he issues. If none of them makes it, follow Art. 1253 and 1254.

1253

-interest must be paid first (debtor cannot insist, but if creditor agrees then its all right)

1254

-if payment cannot be applied using the preceding rules:

1. apply it to the most onerous (if debts are if diff nature)

2. application shall be made to them proportionately (if he same nature)

Tender of Payment and Consignation

        Tender of payment- act of offering the creditor what is due to him together with a demand that he accept it

        Consignation- the act of depositing the thing due with the court or judicial authorities whenever the creditor refuses to accept such

1255

Consignation- the act of depositing the thing due with the court or judicial authorities whenever the creditor refuses to accept such

1256

-consignation releases debtor from responsibility

General Rule: tender payment first before consignation

Exceptions:

1.        Creditor is absent or unknown or does not appear at the place of payment

2.        Creditor is incapacitated

3.        Refuses w/out just cause (weird)

4.        2 or more persons claim the same right

5.        The title of the obligation is lost

6.        Creditor previously notified debtor that he refuses to accept payment

Consignation is only for debts. Right of redemption is not a debt.

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-requisites for consignation:

1.        Valid debt

2.        Valid prior tender

3.        Prior notice of consignation

4.        Actual consignation

5.        Subsequent notice of consignation

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-consignation shall be made by depositing the things due at the disposal of the judiciary

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-once consignation has been duly made, the debtor may ask for the cancelation of the obligation

-before a judicial declaration the debtor may withdraw the thing or the sum deposited (before the creditor accepts the consignation, when creditor authorizes debtor to withdraw)

If consignation is improper= no consignation

If case is dismissed= no consignation