This document provides an overview of condonation or remission of debt under Philippine law. It defines condonation as the gratuitous abandonment of a creditor's right to collect a debt. For condonation to be valid, the debt must have been demandable at the time of remission, the remission must be gratuitous in nature, and the debtor must accept the remission. Implied condonation can occur through the creditor's actions, such as voluntarily delivering a private document evidencing the debt to the debtor. The document also establishes legal presumptions around voluntary delivery of debt documents and remission of the principal obligation.
This document provides an overview of condonation or remission of debt under Philippine law. It defines condonation as the gratuitous abandonment of a creditor's right to collect a debt. For condonation to be valid, the debt must have been demandable at the time of remission, the remission must be gratuitous in nature, and the debtor must accept the remission. Implied condonation can occur through the creditor's actions, such as voluntarily delivering a private document evidencing the debt to the debtor. The document also establishes legal presumptions around voluntary delivery of debt documents and remission of the principal obligation.
This document provides an overview of condonation or remission of debt under Philippine law. It defines condonation as the gratuitous abandonment of a creditor's right to collect a debt. For condonation to be valid, the debt must have been demandable at the time of remission, the remission must be gratuitous in nature, and the debtor must accept the remission. Implied condonation can occur through the creditor's actions, such as voluntarily delivering a private document evidencing the debt to the debtor. The document also establishes legal presumptions around voluntary delivery of debt documents and remission of the principal obligation.
This document provides an overview of condonation or remission of debt under Philippine law. It defines condonation as the gratuitous abandonment of a creditor's right to collect a debt. For condonation to be valid, the debt must have been demandable at the time of remission, the remission must be gratuitous in nature, and the debtor must accept the remission. Implied condonation can occur through the creditor's actions, such as voluntarily delivering a private document evidencing the debt to the debtor. The document also establishes legal presumptions around voluntary delivery of debt documents and remission of the principal obligation.
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STUDY GUIDE: Arts.
1270-1274 (Condonation or Remission of the Debt)
Page 1 of 15
CHAPTER 4, SECTION 3 Condonation or Remission of the Debt (Arts. 1270-1274)
1. What is condonation or remission?
Remission is an act of liberality by virtue of
which the obligee, without receiving any price or equivalent, renounces the enforcement of the obligation, as a result of which it is extinguished in its entirety or in that part or aspect of the same to which the remission refers.
Condonation or remission is the gratuitous
abandonment by the creditor of his right. It is, in effect, a donation. (Art. 1270)
Example: Edna owes Remie P120,000.00. On maturity
date, Remie tells Edna that she does not need to pay the debt, since Remie is condoning or remitting the same. Edna agrees and expresses her appreciation to Remie. STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 2 of 15
Here, the debt of Edna is already extinguished by
condonation or remission.
2. Requisites of condonation or remission. – For
condonation or remission to be valid, the following requisites must concur:
(a) The obligation remitted must have been
demandable at the time of the remission; otherwise, the remission is useless.
(b) The cause or consideration for the remission must
be the liberality of the creditor.
Gratuitous character of remission. – The most
essential and inherent characteristic of condonation or remission is that it is gratuitous. (Art. 1270, par. 1) Consequently, before it can be said that an obligation has been condoned by the creditor, it is essential that it must be an act of pure liberality of the creditor for the benefit of the debtor; in other words, the creditor should not have received any price or equivalent from the debtor as a result of his act in renouncing the enforcement of the obligation.
(c) The remission must be accepted by the debtor.
STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 3 of 15
Necessity of acceptance by the debtor. –
Condonation or remission is an act of liberality. It is a donation of an existing credit – considered a property right – in favor of the debtor. As the liberality of a person cannot just be imposed upon another, it is required that the debtor gives his consent thereto by making an acceptance. (Art. 1270, par. 1)
Condonation is a bilateral act. – Condonation or
remission is not a unilateral act. It is a bilateral act. If there is no acceptance, there is no remission.
(d) If the remission is expressly made, the formalities
required by the law on donation must be complied with. (Art. 1270, par. 2)
When real (or immovable) property is involved
in condonation. – If the debtor’s obligation to give, which is expressly condoned by the creditor, involves immovable property, the remission and the acceptance must be in a public instrument. The public instrument must specify the property remitted and the value of the charges that the debtor (donee) must satisfy. (Art. 749, NCC)
When personal (or movable) property is
involved in condonation. – STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 4 of 15
If the value of the personal property exceeds P5,000.00,
the remission and the acceptance must be in writing (public or private). (Art. 748, par. 3)
If the value of the property is P5,000.00 or less, the
remission and the acceptance may be in any form (i.e., oral or in writing). The remission, however, if made orally, requires the simultaneous delivery of the thing or the document representing the right remitted. (Art. 748, pars. 1 & 2)
(e) What has been condoned or remitted must not be
inofficious.
Effect of inofficious remission. – Under the law,
no person may give, by way of donation, more than he may give by will. Any donation that exceeds this limitation is inofficious, and shall be reduced by the court accordingly.
As a rule, a person may dispose of by will only
the “free portion” of his estate. The free portion is what remains of the estate after deducting therefrom the legitime of the compulsory heirs.
Legitime is that part of the testator’s
property which he cannot dispose of because the law has reserved it for certain heirs (like the children with respect STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 5 of 15
to their parents) who are, therefore, called compulsory
heirs. (Arts. 886 & 887, NCC)
Example: Maning, a widower, died survived by his only
heir – his daughter Millena. In his last will and testament, Maning renounced a debt owing to him from Delfin in the amount of P1 million. The said debt constituted his only estate. Since Maning could only dispose of one-half of his estate (free portion), as the other half (legitime) belongs to his legitimate child Millena, the renunciation was inofficious and should be reduced by the court accordingly to the extent of one-half upon petition of Millena.
3. Kinds of condonation or remission. –
(a) As to its amount or extent:
Total or complete – When the total obligation
(both principal and accessory obligation) is extinguished.
Example: Jessa owes Arnel P100,000.00. On due date
of the obligation, Jessa offers to pay her debt to Arnel, but he tells her that he is renouncing his right to collect the debt as he won in the lottery. This is a complete remission and requires the acceptance of Jessa, because an obligor cannot be compelled to accept the generosity of another and owe the creditor a favor. STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 6 of 15
Partial – When only a part of the obligation, or
only the accessory obligation is remitted.
Example: In the same example above, assume that
Jessa offers to pay the whole amount of P100,000.00 to Arnel but the latter accepts only P50,000.00 and renounces the balance. In such case, there is only partial remission, which also requires Jessa’s acceptance.
(b) As to its form:
Express – One made orally or in writing. To be
valid, it must comply with the formalities of a contract of donation.
Implied – There is implied condonation if,
through the act or conduct of the creditor, the intent on his part to condone the debt can be deduced. For instance, the delivery by the creditor to the debtor of the document evidencing a credit is one such act. (Article 1271, NCC) Thus, if the payee of a promissory note destroys it or delivers it to the maker, there is an implied renunciation of the credit.
(c) As to its date of effectivity:
STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 7 of 15
Inter vivos – One that takes effect during the
lifetime of the donor (creditor).
Mortis Cause – One that takes effect upon the
death of the donor (creditor) and partakes of the nature of a testamentary disposition. Hence, it must comply with the formalities of a will.
4. Some legal presumptions related to condonation or
remission:
(a) Presumption of voluntary delivery - When the
private document in which the debt appears is found in the possession of the debtor, it shall be presumed that the creditor voluntarily delivered the document to the debtor. (Art. 1272)
(b) Presumption of remission of the principal
obligation – When the private document in which the debt appears is voluntarily delivered by the creditor to the debtor, it shall be presumed that the creditor is condoning or remitting the debt in favor of the debtor. (Art. 1271, par. 1)
Rationale for this presumption. – The voluntary
return of the evidence of credit by the creditor to the STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 8 of 15
debtor is an implied renunciation or remission of the
debtor’s debt. The reason for this is that the creditor would not have returned the document evidencing the credit to the debtor had the creditor still wanted to collect the debtor’s debt.
Illustrative Example: Dana owes Carlito P500,000.00
which is evidenced by a promissory note signed by Dana in Carlito’s favor due for payment on 30 May 2022. On 1 January 2022, the promissory note is found in the possession of Dana. If the promissory note is voluntarily delivered to Dana, the presumption is that the debt must have been paid by Dana. If it is known that Dana had not yet paid Carlito, it must be presumed that the obligation has been remitted by Carlito (Art. 1271, par 1).
If it is not known or proven how Dana came into
possession of the promissory note, the presumption is that it was voluntarily delivered by Carlito, unless Carlito proves the contrary (Art. 1272). Hence, Carlito can introduce evidence to prove that he did not in fact voluntarily deliver the promissory note to Dana, but that the note was taken from him without his consent, such as when it was obtained from him by force, or that it was stolen from him, or that Dana just borrowed it from him for purposes of photocopying the document. STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 9 of 15
To recapitulate, where the promissory note
evidencing the credit is already in the possession of the debtor, there arises a disputable presumption to the effect that the creditor must have delivered it voluntarily to him (Art. 1272). Consequently, in the absence of proof to the contrary, an implied or tacit renunciation of the debt may likewise be presumed (Art. 1271, par 1).
When remission is claimed to be inofficious. – In
the example above, assume that Carlito, the payee of the promissory note made by Dana in the amount of P500,000.00, voluntarily delivers the note back to Dana on 1 January 2022. By this act, there arises the prima facie presumption that Carlito is renouncing his action to collect from Dana the amount of the promissory note. On 15 January 2022, Carlito dies of a heart attack. The compulsory heirs of Carlito now files an action to impugn or nullify the renunciation or condonation by establishing that it is inofficious (in conformity with the remedy which is available to them under Article 771 of the Civil Code) on the ground that by such act of remission they now receive less than what the law has reserved for them as their legitime. To rebut the presumption and to frustrate the action filed by the heirs of Carlito (in accordance with the second paragraph of Article 1271), Dana may allege in her answer to the complaint that the delivery of the STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 10 of 15
promissory note to her on 1 January 2022 by Carlito was
made because she had already paid the indebtedness.
(c) Presumption of remission of the accessory
obligation – When the thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or of a third person who owns the thing, it shall be presumed that the creditor has remitted the debtor’s accessory obligation under the accessory contract of pledge. (Art. 1274)
Pledge. - By the contract of pledge, a debtor (or
any third person), to secure the performance of a principal obligation, surrenders possession of a personal property he absolutely owns to the creditor (or to a third person as the debtor and the creditor may designate) for him to alienate, should the obligation be not paid when it becomes due, for the payment of the obligation. (Arts. 2085, 2087, and 2093, NCC.)
due for payment on 30 May 2022. To secure the loan, Dante delivers to Christel his Tag Heuer Carrerra Chronograph watch valued at P700,000.00. On 15 March 2022, the watch is found in the possession of Dante. There arises here a presumption that Christel had remitted the accessory contract of pledge, and has agreed to the STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 11 of 15
loan without the pledge. Dante’s obligation under the
principal contract of loan is not, however, affected. If Christel later on demands for payment and files suit to recover the indebtedness, she may disprove the presumption of remission by proving that she gave the watch temporarily to Dante to be repaired, or that Dante was able to take possession of the watch without her consent or authority.
5. Effects of the foregoing presumptions:
(a) These are merely disputable presumptions.
If there is no evidence to the contrary, the presumption stands. Conversely, these presumptions lose their legal efficacy if the creditor is able to present proof or evidence to rebut the presumptions.
(b) In Art. 1274, only the accessory obligation
of pledge, and not the principal obligation, is remitted. Hence, the debtor is still indebted to the creditor but there is no more security. This provision adheres to the rule that “accessory follows the principal”. This is further reiterated in Art. 1273 which states that the remission of the accessory obligation does not remit the principal obligation, but the remission of the principal obligation also remits the accessory obligation. STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 12 of 15
APPLICATION/PROBLEMS:
1. In a promissory note signed on 15 May 2011,
Larissa bound herself to pay Brian her P600,000.00 indebtedness not later than 15 May 2012. On due date, Brian decided that he was already condoning Larissa’s obligation; hence, he did not make any demand under this obligation. On 1 June 2022, Brian died of lung cancer. During the wake, Brian’s daughter found the promissory note signed by Larissa in her father’s favor. On 2 June 2022, she then immediately sought for Larissa and demanded from her payment under this obligation. Larissa, however, refused to pay alleging that the obligation had already been extinguished. Do you agree with Larissa’s contention? Assuming that the obligation may already have been extinguished, what was the mode of its extinguishment? Explain. STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 13 of 15
2. On 15 May 2021, Ryan signed a promissory note
with the following tenor: “I promise to pay the amount of P100,000.00 to Judy on 15 May 2022.” Judy took hold of the promissory note so that she has evidence of the unpaid debt of Ryan. On 25 October 2021, a burglar entered the house of Judy, and stole some valuables. On that occasion, Judy lost the promissory note signed by Ryan. On 15 May 2022, Judy went to Ryan to collect his P100,000.00 debt. To Judy’s surprise, Ryan was already in possession of the promissory note, and refused to pay his obligation. Ryan told Judy that since he was already in possession of the promissory note, it is presumed that he had already paid his debt of P100,000.00, and there was nothing Judy could do about it. Is Ryan’s position tenable? (Arts. 1271 & 1272)
3. On 15 May 2021, Amanda and Imari signed a
promissory note with the following tenor: “I promise to pay Edison the amount of P300,000.00 on or before 15 May 2022.” On 10 December 2021, Edison visited Amanda in her home. After she led him to the living room, Edison just smiled and handed Amanda the promissory note, then said goodbye. Under the facts, will Amanda and Imari be completely released from their obligation under this note? (Art. 1271) STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 14 of 15
4. Melissa owes Anselmo P500,000.00 due for
payment on 31 May 2022. As guarantor of the obligation, Beverly obliged herself in writing to Anselmo that she will pay him the obligation of Melissa if the latter fails to pay the indebtedness on maturity date. On 25 December 2021, Anselmo executed a written document stating that, “I hereby release Beverly from her obligation under the Contract of Guaranty because I have fallen madly in love with Melissa.” Will Melissa still be obliged to pay Anselmo the P500,000.00 on maturity date of the obligation? obligation? (Arts. 1273)
5. On 15 May 2021, Nick borrowed P100,000.00 from
Paul payable on 15 May 2022. As security for the loan, Nick pledged his antique coffee table worth P150,000.00 to Paul, and immediately delivered the table to Paul. On 15 October 2021, Paul received, as a birthday gift, a European coffee table with chairs from his son in Europe. As a consequence, Paul requested his nephew to deliver back to Nick the pledged antique coffee table to give space to the new one. On 15 May 2022, Paul went to the house of Nick, and demanded payment of the P100,000.00 debt as agreed upon. Nick, however, refused to pay the P100,000.00 on the ground that when Paul returned the antique coffee table which Nick had delivered to him as a pledge, Paul had in effect condoned Nick’s indebtedness. Is Nick’s argument correct? correct? (Art. 1274) STUDY GUIDE: Arts. 1270-1274 (Condonation or Remission of the Debt) Page 15 of 15
END OF LECTURE
HAPPY READING & LEARNING!
Prepared by:
Atty. Harriet B. Reyes-Linsangan
4 June 2022 (Saturday)
FOOD FOR THOUGHT
Self-discipline is an act of cultivation.
It requires you to connect today’s actions to tomorrow’s results. There’s a season for sowing, a season for reaping. Self-discipline helps you know which is which.
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