LOSING PARTY GENERAALLY PAYS JUDICIAL

COST
PREFINALS LAW
Judicial costs – are statutory amounts
ART. 1245
allowed to a party to an action for his
DATION IN PAYMENT where by property is expenses incurred in the action.
alienated to the creditor in satisfaction of debt
in money, shall be governed by the law of sales. LEGAL TENDER – is that currency which a
debtor can legally compel a creditor to
SPECIAL FORMS OF PAYMENT
accept in payment of a debt in money when
-There are four special forms of payment under tendered by the debtor in the right amount.
civil code, namely: LEGAL TENDER IN THE PHILIPPINES
Debts in money shall be paid in the
1. Dation of payment
currency stipulated. It is not possible to
2. Application of payment
deliver such currency or in the absence of
3. Payment by cession
any stipulation to make payment in foreign
4. Tender of payment and
currency, then payment shall be made in
consignation
the currency which is legal tender in the
Meaning of dation in payment
Philippines.
Dation of payment (dacion en pago)
In the Philippines, all coins and notes
Is the conveyance of ownership of a thing
issued by the BSP constitute legal tender for
as an accepted equivalent of performance?
all debts, either public or private.
– it is a special form of payment because it
Unless otherwise fixed by the monetary
is not the ordinary way of extinguished an
board of the BSP coins are legal for
obligation. An existing debt is money is
amounts not exceeding 50 pesos for
satisfied, not by payment of money but by
denominations of .25 and above and in
alienation of property.
those of amounts not exceeding 20 for
Ex. D owes C 30k. to fulfil his obligation, D
denomination of .10 or less.
with the consent of C, delivers a piano.
It should not exceed 50 pesos
If the piano, however is worth less than 30K
, the conveyance must be deemed to
extinguish the obligation to the extent only
of the value agreed upon unless the parties
by their agreement have considered the
piano as full payment, in which case the
obligation is totally extinguished.
The conveyance is, in effect; a novation of
the contract.
 2.
3. 2. The right to make the application
APPLICATION OF PAYMENTS
once exercised is irrevocable the creditor
Is the designation of the debt to consents to the change
which should be applied the payment 4. 3. If the debtor does not apply
made by a debtor who has various debts payment, the creditor may make the
of the same kind in favour of one and designation by specifying in the receipt
the same creditor. which debt is being paid
5. 4. If the creditor has not also made the
REQUISITES OF APPLICATION OF PAYMENTS
application or if the application is not valid
1. There must be one debtor and one 6. 5. If the debts due are not the same
creditor nature and burden, the payment shall be
2. There must be two or more debts applied to all of them proportionately
3. The debts must be of the same kind 7. Examples;
(cash lahat) D owes C as follows:
4. The debts to which payment made 1500 payable on September 5
by the debtor has been applied must 1200 payable on September 20
be due A specific transistor radio worth 2000 to
5. The payment made must not be be delivered on September 20
sufficient to cover. 1000 payable on October 15
(hindi sapat ang pera mo para If D PAID ONLY 1000, he cannot choose to
mabayaran yung lahat ng utang mo apply his payment to the 1500 debt
because C cannot be compelled to
APPLICATION AS TO DEBTS NOT YET DUE
receive partial payment. D CANNOT
The application of payments as to debts PROPERLY SPPLY HIS PAYMENT TO DEBT
not yet due cannot be made unless: © BECAUSE IT IS NOT OF THE SAME
1. There is stipulation that the debtor may KIND.
so apply. (if di pa nag due pero napag IF D does not make s choice, C can make the
usapan na pwede yon sa contract) designation in the receipt with the consent
2. It is made by the debtor or creditor, as of D. D may change the application made by
the case may be, for whose benefit the C. Note that the laws says “ if the debtor
period has been constituted. accepts “ which implies that he has the
liberty to reject also.
RULES IN APPLICATION OF PAYMENT ART. 1254. WHEN THE PAYMENT CANNOT
1. The debtor has the first choice, he must BE APPLIED IN ACCORDANCE WITH THE
indicate at the time of making payment, PRECEDING RULES, OR IF APPLICSTION
and not afterwards, which particular debt CANNOT BE INFERRED FROM OTHER
is being paid.
CIRCUMSTANCES, THE DEBT WHICH IS the same and apply the proceeds thereof to
MOST ONEROUS TO THE DEBTOR, AMONG the satisfaction of their credits.
THOSE DUE, SHALL BE DEEMED TO HAVE
REQUISITES OF PAYMENT BY CESSION
BEEN SATISFIED.
IF THE DEBTS DUE IS OF THE SAME NATURE 1. THERE MUST BE TWO OR MORE
AND BURDEN, THE PAYMENT SHALL BE CREDITORS
APPLIED TO ALL OF THEM 2. THE DEBTOR MUST BE PARTIALLY
PROPORTIONATELY. INSOLVENT (BANCKRUPT)
3. THE CESSION MUS BE ACCEPTED BY THE
When a debt more onerous than another CREDITORS
- Interest
EFFECT OF PAYMENT BY CESSION *NO
- Extinguishment of obligation through
payment Unless there is a stipulation to the
contracts, the assignment does not make
a debt is more onerous than another when
the creditors the owners of the property of
it is more burdensome to the debtor. No
the debtor and the debtor is released from
fixed rule can be laid down in determining
this obligation only up to the net proceeds
which debt is more onerous to the debtor
of the sale of the property assigned. In
since the condition or being more
other words is still liable if there is a
burdensome is a matter dependent upon
balance.
the circumstances.
Example
1. An interest bearing debt is more
onerous than a non interest debt even if D is indebted to several creditors on the
the latter is an older one. total amount of 2million. His assets are not
2. A debt as a sole debtor is more onerous sufficient to pay all his debts.
than as a solidary debtor.
DATION IN PAYMENT AND CESSION
3. Debts secured by a mortgage or by
DISTINGUISHED
pledge are more onerous than
unsecured debts DATION (OWNED PROPERTY)
PAYMENT BY CESSION CESSION (TO SELL PROPERTY)
-ART 1255 THE DEBTOR MAY CEDE OR 1. In dation there is usually one creditor in
ASSIGN HIS PROPERTY TO HIS CREDITOR IN cession there are several creditors
PAYMENT OF HIS DEBTS. 2. Dation does not presuppose the
insolvency of the debtor, while cession
- IS ANOTHER SPECIAL FORM OF AYMENT it
the debtor is insolvent at the time of
is the assignment or abandonment of all the
assignment
properties of the debtor for the benefit of
his creditors in order that the latter may sell
3. In dation the creditor becomes the
owner of the thing given by the debtor
while in cession the creditors only
acquire the right to sell the thing and
apply the proceeds to their credit
proportionately
TENDER OF PAYMENT AND CONSIGNATION
ART.1256 of the creditor to whom tender of
payment has been refused without just
cause to accept it the debtor shall be
released from responsibility by the
consignation of the thing or sum due.
TENDER OF PAYMENT is the act, on art the
part of the debtor, of offering to the
creditor the thing or amount due.
CONSIGNATION is the act of depositing the
thing or amount due with the proper
court when the creditor does not dire or
cannot receive it, after complying with
the formalities required by law.
Consignation is applicable when there is
debt or an obligation to pay. It is always
judicial and it generally require a prior
tender of payment which is, by its very
nature, extrajudicial.
REQUISITES OF VALID CONSIGNATION
1. EXISTENCE OF A VALID DEBT WHICH IS
DUE
2. TENDER PF PAYMENT BY THE DEBTOR
AND REFUSAL WITHOU