Section 3. Condonation or Remission of the Debt

Meaning:

• Condonation in layman's term means release and forgiveness while remission is cancellation of debt.

• In law, It is an act of generosity in which the creditor gives up his right against the debtor, either entirely or partially.

• It is a form of Donation.

• Thus, it will result in the extinguishment of an obligation.

Requirements for  Condonation or Remission of Debt to be valid are:

• Gratuitous of Creditors.

Creditors must condone voluntarily. And, remission of debts will be only to the extent that the debtor is willing to.

• Acceptance of Debtor. 

No one is compelled to accept generosity. There is no Condonation without the acceptance of an obligor.

• Capacity of parties.

Both parties must be mentally and intellectually capable to make decisions.

• It must not be inofficious.

When a donation exceeds the legitime reserved for compulsory heirs, it is considered inofficious and will be reduced accordingly by the court.

• It must be made expressly.

Condonation must be expressed in a way that is clear, it must comply with the form of Donation.

Kinds of Remission/Condonation

• Complete Remission.

As to extent, it's a remission of the Entire obligation

• Partial Remission.

As to extent, it's remission of the partial obligation.

• Express.

 When it is in a form of writing or is made verbally.

• Implied or Tacit Remission. 

When it's not directly expressed but inferred from conduct.

• Inter vivos. 

When it takes effect during the donor's lifetime.

• Mortis causa.

It's when in a form of last will which will take effect upon the donor's death.

Situation discussed in the Article:

The debt is not yet paid but the creditor had voluntarily delivered the private document to the debtor. Private document is evidence of the credit.

Prima Facie Evidence and the Assumption (it is rebuttable by contrary evidence):

Private document in possession of the debtor is prima facie evidence that there is an implied remission. The logical assumption is that the creditor is voluntarily abandoning, renouncing or giving up his right, thus the obligation is extinguished.

Extent of Remission:

If it is a solidary obligation, the entire obligation will be extinguished. Furthermore, if it is a joint obligation, the remission is limited to the share of the debtor in possession of the private document.

Exception to the Assumption:

• Public Document (the same situation, differ in document).

The assumption of remission is not applicable to public documents. Whether the document is in possession of a creditor or of his debtor, the obligation still exists because public documents are readily accessible as public records.

Void remission:

The remission will be void if it is proven to be inofficious. It is inofficious when the delivery of the private document is made in virtue of payment of debt and not for remission 

The Situation:

Private document is found in possession of the debtor, and it is unknown how he obtained it. 

Presumptions:

• It is assumed that the private document is delivered by the creditor voluntarily.

• If a private document is delivered voluntarily, then the assumption is that the claim has already been paid.

• If it is known that there is no payment yet, then there is presumption of remission (go back article 1271)

Opposite Situation: If a private document is in possession of the creditor, it is assumed that debt is not yet paid unless there is conclusive evidence that proves the made payment.

Meaning:

Principal Obligation. It is the obligation arising from the primary objective of the agreement between the parties.

Accessory Obligation. It is the obligation that is dependent and arising from the principal obligation.

Situation:

Remission or renunciation of Principal Debt.

• If Principal Debt is abandoned, accessory obligation follows. Thus, both principal debt and accessory obligations are extinguished.

• If accessory obligation is abandoned, principal debt will not follow. And, remission and extinguishment of obligation is only to the extent of accessory obligation.

This is because principal obligation is independent while accessory obligation cannot exist without its principal obligation.

Example:

Poypoy takes out a loan from Basha and puts up their house as collateral. He is obliged to pay back the loan. If not repaid, he must give up the house.

• Remission of Principal obligation: 

If Basha remit the payment of the loan, the entire obligation will be extinguished.

• Remission of Accessory Obligation:

If Basha voluntarily remit or freed the collateral, the principal obligation will still remain. Accessory Obligation which is giving up of the house will be extinguished.

Meaning:

Pledge. A pledge is something that is pledged or promised as security for the performance of a contract or the payment of a debt and is subject to forfeiture if the contract or payment is not fulfilled.

Pledge. It's an accessory obligation.

Situation:

Pledge was found in the possession of the debtor, or of the third person who owns the thing.

Presumption:

• The pledge is presumed to have been remitted. However, the creditor may oppose this presumption by proving that the item was stolen, returned for repairs and other contrary cases in which there will be no remission.

• Remission is only of the accessory obligation, principal obligation still remains.

Example:

Collen and Angela were classmates. Collen borrowed money from Angela. Collen also delivered his laptop to Angela in pledge to guarantee the payment. After a week, the laptop was in Collen's possession. Thus, it is presumed that pledge is remitted, Angela allows the loan even without the pledge. But, Principal obligation to pay the loan still remains.