CHAPTER 4, SEC. 1 (Arts. 1232-1261) OBLIGATIONS AND CONTRACTS

CHAPTER IV, SEC. 1 – Payment or Performance (Articles 123212!1"

CHAPTER 4 EXTINGUISHMENT OF OBLIGATIONS GENERAL PROVISIONS

ART. 1231. #$li%ations are e&tin%'ise) * 1. 2. 3. 4. 5. 6.

+y ayment or erformance+y te loss of te tin% )'e+y te con)onation or remission of te )e$t+y te conf'sion or mer%er of te ri%ts of cre)itor an) )e$tor+y comensation+y no/ation.

#ter #ter ca'ses ca'ses of e&tin%' e&tin%'is ismen mentt of o$li%ati o$li%ations ons,, s'c s'c as ann'lme ann'lment, nt, rescis rescissio sion, n, f'lfilment of a resol'tory con)ition, an) rescrition, are %o/erne) else0ere in tis Co)e.

SECTION 1 – PAYMENT OR PERFORMANCE

(Arts. 1232-1261) STUDY GUIDE :

1.

ART. 1232. – Concet of ayment as a mo)e of e&tin%'isin% an o$li%ation. – (a)

eli/ery of money- an)or

(b)

Performance of te restation. In la0, ayment an) erformance are synonymo's. It also em$races 0itin its terms te ayment of )ama%es or enalty in lie' of te f'lfilment of an o$li%ation. (See Arts. 114 5 122!"

2.

Ho0 m'st ayment $e ma)e6

Paymen Paymentt m'st m'st $e C#7P8E C#7P8ETE. TE. (Art. 1233) As a %eneral %eneral r'le r'le,, artia artiall or irre%'lar ayment or erformance 9I88 :#T ro)'ce te e&tin%'isment of an o$li%ation.


3.

9at are te e&cetions to te )irecti/e in Art. 12336 Te o$li%ation 0ill $e )eeme) ai) or f'lly comlie) 0it if *

Tere is (a.1.) s'$stantial comliance (a.2) in %oo) fait. In s'c case, te )e$tor may reco/er as to'% tere a) $een strict an) comlete f'lfillment, less )ama%es s'ffere) $y te cre)itor. (Art. 1234) (a)

Te cre)itor accets ayment (b.1.) ;no0in% its incomleteness or irre%'larity, an) (b.2) 0ito't e&ressin% any rotest or o$
4.

9o are te ersons from 0om te cre)itor is $o'n) to accet ayment or erformance6 (Art. 1236, par. 1) (a)

Te )e$tor.

(b)

Any erson 0o as an interest in te o$li%ation (li;e a %'arantor".

A tir) erson 0o as no interest in te o$li%ation, 0en tere is a sti'lation tat e can ma;e ayment. (c)

5.

S'ose a tir) erson ays for te )e$tor, o0 m'c can e reco/er from te )e$tor $y 0ay of reim$'rsement6 It )een)s.

If ma)e 0ito't te consent or a%ainst te 0ill of te )e$tor, te tir) erson can reco/er only insofar as te )e$tor as $een $enefite) $y te ayment. In oter 0or)s, te tir) ersonayor is entitle) only to REI7+=RSE7E:T. (Art. 1236, par. 2) (a)

If ma)e 0it te consent of te )e$tor, te tir) erson can reco/er 0ate/er amo'nt e as ai). In a))ition, te tir) erson 0ill $e S=+R#>ATE to te ri%ts of te cre)itor (e.g., ri%ts arisin% from a mort%a%e, %'aranty or enalty". Here, te tir) ersonayor is entitle) to REI7+=RSE7E:T ? S=+R#>ATI#:. (Art. 1237) (b)

(b.1.) S=+R#>ATI#: means te act of 'ttin% a erson into te soes of te cre)itor- ence, ermittin% tat same erson to e&ercise all te ri%ts an) actions tat co'l) a/e $een e&ercise) $y te cre)itor. .

9o are te ersons to 0om te )e$tor is $o'n) to ma;e ayment6 (Art. 1240)


".

(a)

Te cre)itor.

(b)

Te cre)itors s'ccessorininterest (li;e an eir or assi%nee".

(c)

Any erson a'tori@e) $y te cre)itor or $y la0 to recei/e it.

9en is ayment to a tir) erson /ali)6 In t0o cases*

Te ayment 0ill $e /ali) only in so far as it as re)o'n)e) to te $enefit of te cre)itor (e.g., te ayment, or a art tereof, is )eli/ere) $y te tir) erson to te cre)itor". (Art. 1241) (a)

Te ayment is ma)e in %oo) fait to a erson in ossession of te cre)it. (Art. 1242) (b)

8.

9at so'l) $e te o$
In a specific real obligation an personal obligation. – Te /ery tin% or ser/ice )'e. Te cre)itor cannot $e comelle) to recei/e a restation )ifferent from tat 0ic is )'e. (Art. 1244) (a)

In a generic real obligation. – Te tin% m'st $e of te 'antity an) 'ality secifie). If no 'ality is secifie), te cre)itor may not )eman) a tin% of s'erior 'ality, an) te )e$tor may not )eli/er a tin% of inferior 'ality. Tis is Bte r'le of te me)i'm 'ality. (Art. 1246) (b)

!.

9en is artial ayment allo0e)6

As a %eneral r'le, te cre)itor cannot $e comelle) to accet, an) te )e$tor cannot $e re'ire) to ma;e, artial ayment or erformance. (Art. 124!, par. 1) Te e&cetions to tis r'le are * 9en tere is an e&ress sti'lation or ro/ision of la0 to tat effect. (Art. 124!, par. 1) (a)


(b)

9en te )e$t is in art li'i)ate) an) in art 'nli'i)ate). (Art. 124!, par. 2)

9en te )ifferent restations in 0ic te o$li%ation consists are s'$
1#.

11.

In 0at c'rrency sall ayment of )e$t in money $e ma)e6 (Art. 124$, par. 1) (a)

In te c'rrency sti'late).

(b)

If tere is no sti'late) c'rrency, in Piliine c'rrency.

Commercial )oc'ments are :#T le%al ten)er. Te cre)itor, terefore, cannot $e comelle) to accet tem as ayment for a )e$t. S'osin%, o0e/er, te cre)itor )eci)es to accet a commercial )oc'ment (s'c as a cec;" in ayment of a )e$t, 0ill te )e$t $e e&tin%'ise)6 (Art. 124$, par. 2)

Accetance of te cec; 0ill $e e'i/alent to ayment only (i.e., te )e$t 0ill $e e&tin%'ise) only" 0en * (a)

Te cec; as $een encase).

:ote* It is only 0en te cec; is )isono're) tat te cre)itor can $rin% an action for nonayment of te )e$t (Art. 124$, par. 3). (b)

12.

Te cec; as lost its /al'e $eca'se of te fa'lt of te cre)itor.

>i/e te R=8ES re%ar)in% te lace 0ere ayment sall $e ma)e.

(a) If tere is a sti'lation, ayment sall $e ma)e in te lace )esi%nate). (Art. 1251, par. 1) (b) If tere is no sti'lation * (b.1) eli/ery of a secific or )eterminate tin% – ayment sall $e ma)e at te lace 0ere te tin% 0as at te time of te erfection of te contract. (Art. 1251, par. 2)


(b.2.) eli/ery of an in)eterminate tin% – )eli/ery or ayment m'st $e ma)e at te )omicile of te )e$tor. (Art. 1251, par. 3) 13.

14.

9at are te fo'r (D" secial mo)es or forms of ayment 'n)er te Ci/il Co)e6 (a)

ation in ayment, or adjudicacion en pago, or datio in solutum (Art. 1245)

(b)

Alication of ayment or im'tation of ayment (Art. 1252)

(c)

Payment $y cession or assi%nment in fa/or of cre)itors (Art. 1255)

(d)

Ten)er of ayment A: consi%nation (Arts. 1256%1261)

9at is )ation in ayment6

It is tat e&traor)inary mo)e of e&tin%'isin% an o$li%ation 0ere$y te )e$tor transmits is o0nersi o/er a roerty in fa/o'r of te cre)itor for te satisfaction of a monetary )e$t. In oter 0or)s, an e&istin% )e$t in money is satisfie), not $y te ayment of money (Art. 12DD", $'t $y te alienation of roerty. (Art. 1245) E&amle * " o0es # P244,444. #n mat'rity )ate, if " )oes not a/e eno'% money to ay off is o$li%ation to #, e may as; # to accet is ("&s) mo'ntain $i;e 0ort P224,444 as ayment for te o$li%ation. If # consents, "&s o$li%ation is e&tin%'ise) $y )ation in ayment. 15.

9at is alication of ayment6 (Art. 1252, par. 1)

In tis secial mo)e of ayment, te )e$tor in)icates 0it artic'larity te secific )e$t to 0ic te )e$tors ayment so'l) $e alie), tere $ein% se/eral )e$ts o0in% to te cre)itor, an) te )e$tors ayment $ein% ins'fficient to co/er all te )e$ts. Alication of ayment can, terefore, $e ma)e 'se of only 0en te follo0in% re'isites conc'r * (a)

Tere m'st $e t0o or more )e$ts-

(b)

Te )e$ts m'st $e of te same ;in)-

(c)

Te )e$ts are o0e) $y te same )e$tor in fa/o'r of te same cre)itor-


1.

(d)

All te )e$ts m'st $e )'e- an)

(e)

Te ayment m'st not $e eno'% to e&tin%'is all te )e$ts.

Ass'min% all te re'isites a$o/e are resent, 0at are te r'les to $e o$ser/e) in alication of ayment6

=n)er te first ara%ra of Art. 122, it is te )e$tor 0o is %i/en te referential ri%t to coose 0ic amon% te )e$ts )'e e is ayin%. (a)

If te )e$tor )oes not coose, te cre)itor may ma;e te )esi%nation $y secifyin% in te receit 0ic )e$t is $ein% ai). (Art. 1252, par. 2) (b)

If neiter te )e$tor nor te cre)itor as ma)e te alication, or if te alication is not /ali), ten alication is ma)e as follo0s * (c)

(c.1.) Aly te ayment to te most onero's )e$t amon% tose )'e. (Art. 1254, par. 1) (c.2.) If te )e$ts are of te same nat're an) $'r)en, aly te ayment to all te )e$ts roortionately. (Art. 1254, par. 2) 1".

Art. 1253 man)ates tat, 0en interest is )'e on te )e$t, alication of ayment so'l) $e ma)e first to te interest $efore te rincial. Hence, te )e$tor cannot insist tat is ayment $e cre)ite) to te rincial first, instea) of te interest.

18.

Ill'strati/e e&amle on alication of ayment .

" o0es # te )eli/ery of te follo0in% o$

(a) " 0ill ay # te P144,444, an) inform er tat te sai) ayment 0ill secifically $e alie) to te P144,444 )e$t )'e on 7arc 1, 2413. " cannot insist tat # accet te ayment for te P244,444 )e$t )'e on F'ne 34 $eca'se it 0o'l) amo'nt only to a artial ayment. =n)er Art. 124!, # cannot $e comelle) to recei/e artial ayments. :eiter can " aly te P144,444 ayment to te motor$i;e, to'% of te same /al'e, $eca'se it is not of te same ;in) (Art. 1252). (b) If " )oes not in)icate to 0ic of te )e$ts e 0ill aly is ayment of P144,444, # (after recei/in% ayment" may in)icate in te receit %i/en to " tat* BI ere$y ac;no0le)%e receit from " of te amo'nt of P144,444, 0ic is ere$y alie) to te P144,444 )e$t of " 0ic $ecame )'e on Fan'ary 1, 2413. If " recei/es te receit 0ito't 'estion, e cannot later on comlain tat te P144,444 ayment so'l) a/e $een alie) first to te P144,444 )e$t )'e on 7arc 1, 2413, $eca'se te same $ears an interest. (c) If " or # )oes not ma;e any )esi%nation, ten te ayment 0ill $e ma)e to aly first to te most onero's )e$t. Amon% te )e$ts 0ic are of te same ;in), te most onero's is te P14,444 )'e on 7arc 1, 2413, $eca'se it is te one tat $ears interest at te rate of 3G er ann'm. In tis case, as of F'ly 1, 2413, 0en ayment 0as ten)ere), te P144,444 )e$t )'e on 7arc 1, 2413 0ill a/e alrea)y earne) interest for fo'r monts e'i/alent to P12,444. Hence, alyin% Art. 1253, te P144,444 ayment 0ill $e alie) first to te interest of P12,444. Te remainin% P,444 0ill $e alie) to te rincial o$li%ation lea/in% an o'tstan)in% $alance of P12,444 on te rincial o$li%ation )'e for ayment to #. (d) 8et 's ass'me tat in te e&amle %i/en in :o. 1, te only )e$ts o0in% from te )e$tor to te cre)itor are * a.

P144,444 )'e on Fan'ary 1, 2413- an)

b. P244,444 )'e on F'ne 34, 2413P344,444 (total )e$t )'e" 0ic are $ot of te same ;in), nat're an) $'r)en. In tis case, if neiter te )e$tor nor te cre)itor ma;es a )esi%nation, te r'le in te 2n paragrap' of Art. 1254 0ill aly. Te ayment of P144,444 0ill $e alie) roortionately to te t0o (2" )e$ts. Hence, P33,333.33 (P144,444P344,444  P144,444" 0ill $e )e)'cte) from te P144,444 )e$t, an) P!!,!!!.! (P244,444P344,444  P144,444" 0ill $e )e)'cte) from te secon). Te first )e$t 0ill a/e a remainin% $alance of P!!,!!!.!. #n te oter an), te secon)


)e$t 0ill a/e a remainin% $alance of P133,333.33. Te ratio ere of te first )e$t to te secon) )e$t is t's reser/e), namely, 1 is to 2. 19. 9at is ayment $y cession6 (Art. 1255) In tis secial mo)e of ayment, te )e$tor transfers all is roerties, not s'$
20. 9at are te re'isites of ayment $y cession6 (a) Tere m'st $e more tan one )e$t(b) Tere m'st $e more tan one cre)itor(c) Te )e$tor m'st $e insol/ent(d) Te )e$tor m'st a$an)on all is roerties not e&emt from e&ec'tion in fa/o'r of te cre)itors- an) (e) Te cession m'st $e accete) $y te cre)itors. 21. 9at are te effects of ayment $y cession6 (Art. 1255) (a) =nli;e in )ation in ayment, te cre)itors )o not $ecome te o0ners of te roerties ce)e) $y te )e$tor as ayment for te )e$ts. Te cre)itors merely $ecome assi%nees of te )e$tor 0it a'tority to sell te roerties. (b) Te )e$tor is release) from is o$li%ations $'t only to te e&tent of te net rocee)s of te sale, 'nless tere is a sti'lation to te contrary. Te $alance, terefore, remains collecti$le from te )e$tor. 22. Ill'strati/e e&amle of ayment $y cession . – " is in)e$te) to #1, #2 an) #3 in te total amo'nt of P27. 8ater, " $ecame $an;r't an) 0as left 0it no oter assets $'t te follo0in% * (a) A farm lot 0ort P1.7- an) (b) A Toyota Altis car 0ort P1.17.

9it te consent of #1, #2 an) #3, " can assi%n te a$o/e roerties in fa/o'r of te sai) cre)itors, so tat tey may $e sol). Te rocee)s from te sale of te


roerties 0ill ten $e 'se) to satisfy te resecti/e claims of te cre)itors. If te net rocee)s from te sale of te roerties amo'nt only to, let 's say, P1.7, ten " is still lia$le for te $alance of P244,444 to te cre)itors.

23. 9at is ten)er of ayment6 It is te act, on te art of te )e$tor, of offerin% to te cre)itor te tin% or amo'nt )'e. Te )e$tor m'st, terefore, so0 tat e as in is ossession te tin% or money to $e )eli/ere) at te time of te offer. Ten)er of ayment is e&tra<')icial.

24. 9at is consi%nation6 Consi%nation is te act of )eositin% te tin% or amo'nt )'e 0it te roer co'rt 0en te cre)itor )oes not )esire or cannot recei/e it, after comlyin% 0it te formalities re'ire) $y la0 (Art. 1256, par. 1). Consi%nation is essentially <')icial an), terefore, res'oses te e&istence of a case file) in co'rt $y te )e$tor a%ainst te cre)itor to comel te latter to accet te ayment. 9ito't a co'rt case, tere can $e :# consi%nation an) te )e$tor 0ill not $e release) from is o$li%ation.

25. 9at are te re'isites of a /ali) consi%nation6 (a) E&istence of a /ali) )e$t 0ic is )'e. (Art. 1256, par. 1) (b) Ten)er of ayment $y te )e$tor an) ref'sal, 0ito't <'stifia$le reason, $y te cre)itor to accet it. (Art. 1256, par. 1) (c) Pre/io's notice of consi%nation to ersons intereste) in te f'lfillment of te o$li%ation (s'c as %'arantors, mort%a%ors, soli)ary )e$tors an)or soli)ary cre)itors". (Art. 1257, par. 1) (d) Consi%nation ()eosit in co'rt" of te tin% or s'm )'e. (Art. 125!, par. 1) (e) S'$se'ent notice of consi%nation (Art. 125!, par. 2)

ma)e

to te intereste) arties.

26. 9at is te effect of a ten)er of ayment ma)e 0ito't consi%nation6


A ten)er of ayment ma)e, e/en if te cre)itor 'n<'stifia$ly ref'ses to accet ayment or erformance, if not follo0e) $y a s'$se'ent consi%nation in co'rt of te o$
(b)

9en te cre)itor is incaacitate) to recei/e te ayment at te time it is )'e-

(c)

9en 0ito't ca'se, te cre)itor ref'ses to %i/e a receit-

(d)

9en t0o or more ersons claim te same ri%t to collect te o$li%ation- an)

(e)

9en te title of te o$li%ation as $een lost.

28. 9at are te effects if te consi%nation is roerly ma)e6 (a)

Te )e$tor may as; te co'rt to or)er te cancellation of te o$li%ation. (Art. 1260, par. 2)

(b)

Te e&enses of consi%nation sall $e car%e) a%ainst te cre)itor. (Art. 125$)

29. After a/in% )esosite) te tin% or s'm )'e 0it te co'rt, may te )e$tor still

0it)ra0 te same6 (Art. 1260, par. 2) JES, $'t te 0it)ra0al m'st $e ma)e * (a)

$efore te cre)itor accets te consi%nation- or

$efore te co'rt )eclares tat te consi%nation as $een roerly ma)e $y te )e$tor, an) or)ers te cancellation of te )e$tors o$li%ation. (b)

In s'c a case, te o$li%ation sall contin'e in force, an) te e&enses for te consi%nation sall $e $orne $y te )e$tor.


30. 9at 0ill $e te effect if te cre)itor imself a'tori@es te )e$tor to 0it)ra0 te

)eosit (a) after te cre)itor as accete) te consi%nation, or (b) after te co'rt as iss'e) an or)er cancellin% te )e$tors o$li%ation6 (Art. 1261) (a) Te )e$tors o$li%ation to te cre)itor sall contin'e to s'$sist. (b)

Te cre)itor sall lose e/ery reference 0ic e may a/e o/er te tin%.

(c)

Te co)e$tors, %'arantors an) s'reties sall $e release).

31. Ill'strati/e e&amle on ten)er an) consi%nation . –

#n Fan'ary 1, 2412, " $orro0e) P44,444 from # aya$le on Fan'ary 1, 2413. It 0as a%ree) 'on $y te arties tat so'l) " )efa'lt in te ayment of te loan, " 0ill ay a enalty interest of 14G or P4,444. #n Fan'ary 1, 2413, " ten)ere) ayment to # in te amo'nt of P44,444. #, o0e/er, ref'se) to accet te ayment from " an) ne/er informe) " of te reason for is ref'sal. To ma;e s're tat e 0ill not $e car%e) for te enalty on acco'nt of )elay for fail're to ay on )'e )ate, " file) an action for consi%nation 0it te co'rt, an) )eosite) te amo'nt of P44,444 0it te co'rt. If te co'rt fin)s te consi%nation to a/e $een roerly ma)e 'rs'ant to te re'irements of la0, te co'rt may or)er te cancellation of te o$li%ation. At tis oint, te o$li%ation of te )e$tor 0ill $e consi)ere) e&tin%'ise). In oter 0or)s, 0ile te cre)itor may not a/e act'ally recei/e) ayment of te o$li%ation on te mat'rity )ate a%ree) 'on $y te arties, te )e$tor is )eeme) to a/e comlie) 0it is o$li%ation $y roerly ma;in% a ten)er of ayment, an) $y consi%nation of te tin% or s'm )'e 0it te co'rt.

APPLICATION$PROBLEMS :

#n Fan'ary 1, 2412, An)re0 $orro0e) money from Solo in te amo'nt of P17 )'e for ayment on Fan'ary 1, 2413 at 2G interest er ann'm. +y en) of #cto$er, 2412, An)re0 s'ffere) financial re/erses so e 0ent to /isit is colle%e $est frien) Fon. An)re0 as;e) Fon if e co'l) $orro0 from Fon 0ito't interest to ay is P17 )e$t 0it Solo 0ic 0as to $e )'e on Fan'ary 1, 2413. Fon romise) to el An)re0. Tree )ays after e sa0 Fon, An)re0 l'c;ily 0on in te +in%o %ames at S7, an) artially ai) Solo te amo'nt of P4,444. =n;no0n to An)re0, o0e/er, on te /ery )ay tat e sa0 Fon, Fon imme)iately 0ent to Solo an) ai) An)re0s )e$t in te amo'nt of P17 l's te 2G interest )'e in te amo'nt of P24,444. Can Fon later on reco/er from An)re0 te entire P1,24,444 tat e ai) to Solo6  Art. 123! 1.


#n 7arc 1, 2412, F'n $orro0e) from Cris te amo'nt of P34,444 aya$le on 7arc 1, 2413. As sec'rity for te loan, F'n mort%a%e) is K4s'are meter lot in asmarinas, Ca/ite, 0ic 0as /al'e) at P44,444, to Cris. #n Le$r'ary 2, 2413, F'ns co'sin, 8'cille, ai) Cris P34,444 0ito't cons'ltin% F'n a$o't it. 9en te o$li%ation, o0e/er, fell )'e on 7arc 1, 2413, F'n 0as alrea)y insol/ent. Ar/in, te 's$an) of 8'cille, no0 see;s to foreclose F'ns K4s'are meter mort%a%e) roerty, so e an) is 0ife can reco/er te P34,444 ayment a)/ance) $y 8'cille to Cris. Can Ar/in foreclose te mort%a%e) roerty6  Art. 123 2.

+al)o o$li%e) imself to )eli/er to Rao'l a Jaguar car. :ot a/in% $een a$le to o$tain a Jaguar, +al)o con/ince) Rao'l to accet instea) a Rolls Royce car 0ic 0as a more e&ensi/e car. Rao'l, o0e/er, ref'se) to accet a Rolls Royce, an) insiste) tat +al)o )eli/er to im a Jaguar. Is Rao'l le%ally <'stifie) in ref'sin% to accet te Rolls Royce car consi)erin% tat te same is e/en more e&ensi/e tan te Jaguar car6 3.

R'$en o0es E) P4,444. #n mat'rity )ate, R'$en offere) to ay E) te amo'nt of PD,444, 0ic 0as te only money e ten a). E), o0e/er ref'se) to accet te ayment. Tereafter, R'$en $'me) into te 34year ol) son of E), Fos'a, to 0om R'$en %a/e te PD,444 0it a re'est tat Fos'a t'rn o/er te money to is fater. Instea) of )eli/erin% te money to is fater, o0e/er, Fos'a imme)iately 0ent to te casino, an) s'an)ere) te entire amo'nt in te slot macines. 4.

(a) 9as E) <'stifie) in ref'sin% to accet te ayment offere) $y R'$en6 (b) 7ay E) still reco/er te f'll amo'nt of PD,444 from R'$en after te sai) amo'nt 0as s'an)ere) in its entirety $y is son Fos'a6  Arts. 12D 5 12D4 7arissa o0es Retcel P144,444 )'e on ecem$er 1, 2413. #n mat'rity )ate, 7arissa resente) to Retcel a )ate) 7+TC cec; in te amo'nt of P144,444 0it a certification from te $an; mana%er tat 7arissa 0as a client in %oo) cre)it stan)in% 0o as $een $an;in% 0it 7+TC for almost 34 years. esite te ten)er of ayment an) te certification iss'e) $y te $an; mana%er, Retcel, o0e/er, ref'se) to accet te ayment an) insiste) tat 7arissa ay er in cas. Is Retcel <'stifie) in re
Ric;y is a tenant of an aartment o0ne) $y >eor%e. #n F'ne 34, 2413, >eor%e %a/e Ric;y fifteen )ays, or 'ntil F'ly 1, 2413, 0itin 0ic to lea/e te lease) aartment on te %ro'n) tat Ric;y a) not $een ayin% is rental for t0o monts alrea)y. In is 6.


)efense, Ric;y state) tat e/ery mont, >eor%es collector 0ent to te o'se of Ric;y an) collecte) te rents, an) iss'e) a receit terefor. Lor te ast t0o monts, o0e/er, Ric;y 0as rea)y an) 0illin% to ay te rents an) 0aite) for te collector as 's'al. +'t te collector ne/er so0e) '. Hence, Ric;ys rental arrears amo'nte) to t0o monts. oes Ric;ys ar%'ment a/e le%al $asis6  Art. 121 (3r) ar." +en o0es F')e P4,444 0it 2G interest. #n te )'e )ate, +en ten)ers ayment to F')e $'t only for P4,444 0en it so'l) $e P!2,44. Ho0 0ill yo' aly te ayment6  Art. 123 7.

%%% END %%%

CHAPTER 4, SEC. 1 (Arts. 1232-1261) OBLIGATIONS AND CONTRACTS

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