Article 1247
Unless it is otherwise stipulated, the extrajudicial expenses required by the payment shall be for the
account of the debtor. With regard to judicial costs, the Rules of Court shall govern. (1168a)
Sinasabi po dito na ang debtor ang magbabayad ng extrajudicial expenses dahil sya yung magbebenefit
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Debtor pays for extrajudicial expenses.
Losing party generally pays judicial costs.
Judicial costs: the statutory amounts allowed to a party to an action for his expenses incurred in the
action.
Article 1248
Unless there is an express stipulation to that effect, the creditor cannot be compelled partially to
receive the prestations in which the obligation consists. Neither may the debtor be required to make partial
payments.
However, when the debt is in part liquidated and in part unliquidated, the creditor may demand and
the debtor may effect the payment of the former without waiting for the liquidation of the latter. (1169a)
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Performance of obligation should be complete.
When partial performance allowed.
1. When there is an express stipulation to that effect (par.1);
2. When the debt is in part liquidated (definitely and determined or computed) and in
unliquidated (par.2); and
3. When the different prestations in which the obligation consists are subject to different terms
or conditions which affect some of them. (8 Manresa 288.) In obligations which comprehend
several distinct prestations (e.g., obligation to pay debt in instalments), it is evident that the
prestations need not be executed simultaneously but each successive execution thereof must
be complete.
Article 1249
The payment of debts in money shall be made in the currency stipulated, and if it is not possible to
deliver such currency, then in the currency which is legal tender in the Philippines.
The delivery of promissory notes payable to order, or bills of exchange or other mercantile
documents shall produce the effect of payment only when they have been cashed, or when through the fault
of the creditor they have been impaired.
In the meantime, the action derived from the original obligation shall be held in abeyance. (1170)
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Meaning of Legal Tender
Currency which if offered by the debtor in the right amount, the creditor must accept in payment
of a debt in money.
Legal tender in the Philippines
Debts in money shall be paid in the currency stipulated. If it is not possible to deliver such currency
or in the absence of any stipulation to make payment in a foreign currency, then the payment shall
be made in the currency which is legal tender in the Philippines.
In the Philippines, all coins and notes issued by the Bangko Sentral ng Pilipinas (BSP)
constitute legal tender for all debts, both public or private.
Unless otherwise fixed by the Monetary Board of the BSP, coins are legal tender for amounts
not exceeding P50.00 for denominations of P 0.25 and above, and in those of amounts not exceeding
P20.00 for denominations of P 0.10 or less.
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All coins and bills above P 1.00 are, therefore, valid legal tenders for any amount.
Payments by means of instruments of credits
1. Right of creditor to refuse or accept.
Promissory notes, checks, bills of exchange and other commercial documents are not legal
tender and, therefore, the creditor cannot be compelled to accept them.
a) The creditor, however, if he chooses, may accept them, without the acceptance
producing the effect of payment. In the meantime, the demandability of the original
obligation is suspended.
b) The creditor must cash the instrument, and it is only when it is dishonoured that he
can bring an action for non-payment of the debt.
2. Effect on obligation
Payment by means of mercantile documents does not extinguish the obligation;
a) until they have been cashed;
b) unless they have been impaired through the fault of the creditor.
Article 1250
In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value
of the currency at the time of the establishment of the obligation shall be the basis of payment, unless there
is an agreement to the contrary. (n)
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Meaning of inflation and deflation
Inflation
A sharp sudden increase of money or credit or
both without corresponding increase in business
transaction.
Deflation
The reduction in volume and circulation of the
available money or credit, resulting in a decline
of the general price level.
It causes a drop in the value of money, resulting
in the rise of the general price level.
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Basis of payment in case of extraordinary inflation or deflation.
The purchasing value of the currency at the time of the establishment of the obligation shall be the
basis of payment, in case of any extraordinary increase or decrease in the purchasing power of the
currency which the parties could not have reasonably foreseen. This is, however, subject to the
agreement of the parties.
Note: Article 1250 envisages contractual obligations where a currency is selected by the parties as the
medium of payment. It does not apply where the obligation to pay arises from a source independent of
contract or agreement, such as law, quasi-contract, crime, or tort. (See Article 1157; Commissioner of Public
Highways vs. Burgos, 96 SCRA 831.)
Article 1251
Payment shall be made in the place designated in the obligation.
There being no express stipulation and if the undertaking is to deliver a determine thing, the
payment shall be made wherever the thing might be at the moment the obligation was constituted.
In any other case the place of payment shall be the domicile of the debtor.
If the debtor changes his domicile in bad faith or after he has incurred in delay, the additional
expenses shall be borne by him.
These provisions are without prejudice to venue under the Rules of Court. (1171a)
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Place where obligation shall be paid.
1. If there is a stipulation, the payment shall be made in the place designated. (par.1, see Art.
1306)
2. If there is stipulation and the thing be delivered is specific, the payment shall be made at the
place where the thing was, at the perfection of the contract.
3. If there is no stipulation and the thing be delivered is generic, the place of the payment shall
be domicile of the debtor. (par. 3.) In this case, the creditor bears the expenses in going to the
debtor’s place to accept payment (see Art. 1247.) subject to the rule in paragraph five.
Note:
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Venue: the place where a court suit or action must be filed or instituted. (Secs. 1-4, Rule 4, Rules of
Court.)
Domicile: place of a person’s habitual residence (Art. 50); the place where he has his true fixed
permanent home and to which place he, whenever he is absent, has the intention of returning.
Residence: Only an element of domicile.
Residence simply requires bodily presence as an inhabitant in a given place, while domicile (legal
residence) requires bodily presence in that place and also an intention to make it one’s domicile.