Chapter 4, Sec.

1: Payment or Performance
I. DEFINITIONS
Define or give the meaning of the ff:

1. Payment – is the satisfaction or fulfilment of a prestation that is due, resulting in

the extinguishment of the obligation of the debtor.
2. Dation in payment – dation in payment, whereby property is alienated to the
creditor in satisfaction of a debt in money, shall be governed by the law of sales.
3. Application of payment – It is the 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.
4. Payment by cession – payment by cession is the same as payment by
assignment. It is a special form of payment whereby the 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.
5. Consignation – is the 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.

II. DISCUSSIONS
1. May an obligor recover although there has been no strict and complete
fulfilment by him of his obligation?
2. What must be delivered when the obligation consists of:
(a) The delivery of a specific thing?
(b) The delivery of a generic thing?
3. When is partial performance of an obligation allowed?
4. What must a debtor do to be released from his obligation if the creditor
refuses to accept payment without any justifiable reason?
5. Give the requisites of payment by cession. What rights are acquired by the
creditor in this form of payment as distinguished from dation on payment?
III. PROBLEMS

Explain or state briefly the rule or reason for your answer.

1. D (debtor) owes C (creditor) P10,000 with G as guarantor. On the due date of the
obligation, T, a third person, offered to pay the obligation of D. Can C legally refuse to
accept the payment? How about an offer of payment from G?

Answer: C can legally refuse the payment from T because T is not included in the said
agreement, G as guarantor, C can accept from G because G’s name is in the contractor
and he is the guarantor.
2. M (maker) issued a promissory note for P10,000 in favor of P (payee) who lost the note
which was found by T who demands payment from M. M did not know that the note was
lost by P. Is M justified in paying T?
Answer: The note belongs to P. In which T has no right or whatsoever. Who could be
accused, M can sue T for demanding payment in which he has no right .

3. D owes C P10,000, which was paid by T who demands reimbursement from D.

(a) When is D liable to T?
- When there is a written agreement or content that D will reimburse or pay T the
10,000.
(b) When is D not liable to T?
- When it is verbally spoken with no witnesses. There should be a written contract
or agreement.
(c) When is D liable for less than P10,000 to T?
- If there is a contract or agreement stating the amount in the contract.
(d) May D be liable to T for P12,000 if that was the amount paid by him to C?
- Yes, if there is a written agreement or contract between D and T that D will pay or
reimburse T for the amount he paid to C.
4. D owes C P10,000. Without the knowledge of C, D in good faith paid to T his obligation
to C. Is D required by law to prove that the payment has been received by C in order to
be released from liability?

Answer: If T is an employee of C but by law D should acquire a note or a receipt ton

prove that the payment has been received.

5. D owes C P10,000 in payment for which C accepts a check from D. On the ground that a
check is not legal tender, C later insists that D pay him in cash. Is D justified in rejecting
this demand of C?

Answer: Yes, as long the check is cleared that it good will not bounced. It is considered
as a payment.