Libro Quinto · Título II Capítulo VI. Cumplimiento de las obligaciones

Performance of the obligation may be rendered by a third party, whether or not he has an interest therein and whether the debtor consents thereto or is unaware thereof.

In obligations to do, the creditor cannot be compelled to receive the performance or service from a third party, when the quality and circumstances of the debtor's person were a determining reason in establishing the obligation.

Whoever pays on behalf of another may recover what he paid, unless he did so against the express will of the debtor.

To make payment validly in the obligations to give in which ownership of the thing is to be transferred, it is necessary to be the owner of what is given in payment and to have capacity to alienate it. However, if the payment consisted of a sum of money or another fungible thing, there shall be no recovery against the creditor who spent or consumed it in good faith.

Payment must be made to the creditor or to whoever has his mandate or legal representation.

Payment made to a person who had no authority to receive it is valid if the creditor ratifies it or takes advantage of it.

Payment made directly to the minor or incapacitated person is not valid. However, if what was paid was applied to their personal benefit or to the preservation of their estate, the obligation is extinguished to the extent applied to those purposes.

The creditor cannot be compelled to accept a thing different from that owed, even if the value of the thing offered is equal or greater, except by special provision of law.

Payment shall be made in the manner that was agreed, and it may not be made partially except by express agreement or by provision of law.

However, when the debt has a liquid part and an illiquid part, the creditor may demand payment of the first without waiting for the second to be liquidated.

The debtor who pays his creditor after having been judicially notified not to do so does not extinguish the obligation.

Payment made in good faith to the person in possession of the right to collect is valid, even if he is subsequently defeated in trial on the ownership of the credit.

The debtor who pays has the right to demand the document evidencing payment; and to withhold such payment while said document is not delivered to him.

The bearer of a receipt is deemed authorized to receive payment, unless the circumstances oppose admitting this presumption.

The delivery of the original document substantiating the credit, made by the creditor to the debtor, gives rise to a presumption of the latter's release, unless proved to the contrary.

Payment made to the holder of a bearer instrument extinguishes the debt.

Payment made by means of check is subject to the condition that it be honored upon its presentment.

Payment in national currency shall be made by the debtor by delivering the same numerical amount in accordance with the nominal value of the currency on the date on which payment is demanded from him, provided that the obligation is already enforceable.

If payment is to be made in kind and it is impossible to deliver the same quantity and quality, the debtor shall satisfy the value that the thing has at the time and place designated for payment, unless a price was fixed upon entering into the contract.

Payment shall be made at the place designated in the contract. If none was designated and it concerns a certain and determinate thing, payment shall be made at the place where the thing existed at the time the obligation was contracted. In any other case, payment must be made at the domicile of the debtor at the time the obligation is demanded.

Extrajudicial and judicial expenses occasioned by payment shall be covered by the debtor, the latter to be fixed by the judge in accordance with the law.

The creditor who, after the contract has been entered into, voluntarily changes domicile shall indemnify the debtor for the expenses that the debtor incurs for this reason in making payment, if the obligation must be performed at the domicile of the former.

The obligations must be performed without delay, unless circumstances relating to their nature, manner or place fixed for performance imply the need for a time limit, which the judge shall prudentially fix if it is not established by law. If the parties have established a time limit, payment must be made on the day of its expiry.

In periodic payments, the receipt of payment for the last period raises a presumption of payment of the previous ones, save evidence to the contrary.

Payment of the principal presupposes payment of the interest, unless the payment was accepted with the corresponding express reservation.

The debtor of various obligations in favor of the same creditor has the right to declare, when making payment, to which debt it must be applied.

If the debtor, notwithstanding the imputation made by him, accepts a receipt from the creditor imputing the payment to a specific debt, he may not request that it be applied to another, unless there is cause that invalidates the imputation made by the creditor.

If it is not expressed to which debt the imputation is to be made, the payment shall be deemed applied to the one with an expired time limit; if there are several with an expired time limit, to the one that is most burdensome for the debtor; if they are of equal nature, to the oldest; and if all are equal, the payment shall be imputed proportionally.

Whoever owes principal and interest may not, without the consent of the creditor, apply payment to principal before interest, nor to the latter before expenses.

Payment is made by consignment, by depositing the sum or thing owed before a competent judge.

Consignment is proper:

1.When the creditor refuses to receive the amount or thing owed to him;

2.When the creditor is incapable of receiving payment and lacks legal representation;

3.When the creditor is not at the place where payment is to be made and has no known agent at such place;

4.When the creditor's right is doubtful and other persons concur to demand payment, or when the creditor is unknown;

5.When the debt is attached or withheld in the debtor's hands, and the latter wishes to be released from the deposit;

6.When the instrument of the debt has been lost;

7.When the successful bidder or awardee of encumbered property wishes to redeem it from the encumbrances upon it; and

8.In any other case in which the debtor cannot directly make a valid payment.

For the consignment to produce effect, it is necessary:

1°.That it be made before a competent judge;

2°.That it be made by a person capable or qualified to effect payment;

3°.That it include the totality of the liquid and enforceable debt, with its interest and costs if there are any; and

4°.That the condition has been fulfilled, if the debt is conditional, or the time limit has expired if it was stipulated in favor of the creditor.

Once the consignment is declared valid, the obligation shall be extinguished from the date on which the deposit was made and, consequently, the risks of the thing pass from that same day to the creditor.

The debtor may withdraw the consignment while the creditor has not accepted it or it has not been declared valid. In such cases, the obligation shall subsist with all its conditions, modalities and guarantees.

Once the consignment is declared valid, the debtor may withdraw it only with the express consent of the creditor and, in such case, the liabilities of the co-debtors, sureties and other guarantors of the obligation cease.

If what is owed is a certain and determined thing that must be delivered at the place where it is located, the debtor, in offering payment, shall require the creditor to receive it, and if the latter does not receive it, the debtor may ask the judge to place it in deposit.

If it concerns an immovable or a thing intended to remain in place, the debtor may, after requiring the creditor to receive it and enter into possession, obtain from the judge the appointment of an administrator-in-charge, if the creditor opposes receiving it.

In the cases of this article and of the preceding one, once the deposit or the intervention in charge of a third party has been formalized, the debtor shall be free from liability.

The debtor may make an assignment of property to his creditors when he is unable to continue his business or to pay his debts.

The assignment of property may be extrajudicial or judicial. The former is contractual, and the latter is a benefit granted to the debtor in good faith who, due to unavoidable accidents or causes not attributable to him, suspends payment of his debts or is at imminent risk of suspending them.

The judicial assignment of property duly approved produces the following effects:

1°.The separation of the debtor from the administration of his property, who may not validly receive payments;

2°.The liquidation of the debtor's businesses, the realization of the assigned property and the payment and collection of the debts;

3°.The definitive suspension of the enforcement proceedings brought against the debtor and of the respective interest, for claims not secured by mortgage, submortgage or pledge; and

4°.The extinguishment of the debts by virtue of the payments made, even if what each creditor receives is insufficient for full payment, provided that the person making the assignment is a natural person.

If it were a partnership and its property were insufficient for full payment, the liability of the partners shall subsist in accordance with the contract and nature of the partnership.

The creditors, once the judicial assignment has been accepted, may enter into agreements with the debtor for the administration and sale of the assigned property. Such arrangements shall proceed in accordance with the provisions of the Code of Civil and Commercial Procedure.

Within one year after approval of the agreement or of the judicial assignment, any of the creditors may challenge the assignment for intent or fault of the assignor; and if it is proved that there was intent or fault, the obligations of the debtor shall remain subsisting, without prejudice to other liabilities.

The debtor may recover the property or part thereof before its sale or adjudication, by paying the debts to the creditors.

The judicial assignment of property is subject to the procedure set forth in the Code of Civil and Commercial Procedure; and the payment of the claims shall be made in accordance with what the law provides for the ranking of creditors.