Illustration:: Difference Between Donation and Condonation

CONDONATION/REMISSION
ART.1270 - 1274
ART.1270 – concept of condonation or remission

The most essential characteristic of condonation or remission:
1. It must be gratuitous
2. requires the acceptance on the part of the obligor
-partakes the form of donation

-When you condone or remit, it is similar to criminal law – condone/pardon
Illustration:
A is obliged to B to the amount of 10M. B waives his right to demand from A 10M. B condones
from A. The mode of extinguishing is condonation or remission. If the obligation is remitted/condoned,
A, therefore doesn't have anymore obligation to B.
Difference between Donation and Condonation

DONATION: purely gratuitous; out of liberality; upon giving, there is no expectation that you will
receive something in return; comes BEFORE
CONDONATION: presumes that there is an existing obligation; there is already a vinculum juris
between the parties; condonation or remission comes in after the obligation has been constituted, it's up
to the creditor to waive his right to demand, condone or remit the obligation; AFTER
Condonation partakes the form of implied donation.

Condonation = Donation FALSE
Donation is a mode of acquiring ownership. Condonation or remission although it partakes donation, it
is not similar to donation. Condonation or remission is a mode of extinguishing an obligation.
Requires the acceptance on the part of the obligor

In same case, B will not accept saying that he has extra. The obligation is not extinguished
because there must be an acceptance of the condonation or waiver on the part of obligor. From the
moment of acceptance, that will extinguish the obligation. That will release the debtor from the bounds
of his obligation to the creditor. The reckoning point is not when the creditor condones the obligation
nut when the obligor accepts it and when the creditor subsequently knows the obligor's acceptance.
The rules of inofficious donations will be followed. (Basic concept – you cannot give more than
what you have.) Example. A, a philanthropist, gives 3M to B, 5M to C and 2M to D. A is making a
donation of 10M. But A only has 1M. What is the concept of inofficious donation? The entirety of
10M. It is inofficious because it goes beyond what the donor is capable of giving.
Forms of condonation or remission:

1. As to the amount or extent of the obligation condoned
a.Total
b.Partial
2.
A.Express-actually, expressly, fully; you will say to the debtor, do not pay off your obligation to
me; manifest your intention as the creditor to condone the obligation; must follow the
formalities set forth under the law on property (donation)
Formalities:
Movable/personal property:
More than 5000 – the remission and the acceptance must be in writing (public or
private instrument)
5000 or less - the remission/condonation and the acceptance may be in any form,
if made orally, it requires the simultaneous delivery of the thing or the document
representing the right to remit
Ex: money is a movable property
Immovable/real property – the condonation or remission and the acceptance must be in a public
instrument; notarized document
*If the formalities are not followed, the condonation and the acceptance thereto is void.
b. Implied Condonation – the debtor does not out rightly say to the debtor that he is condoning
the debt
Art. 1271 - The delivery of a private document evidencing a credit made voluntarily by the
creditor to the debtor; from the acts of the parties and under the assumption of law, it is
presumed that the parties intended to extinguish the obligation
Ex: A borrowed from B 5M. In order to evidence his indebtedness to B, A executed a

promissory note. “I promise to pay B the amount of 5M one year from the date of
execution” (Date of execution: Jan.15, 2018). Of course, the document is in the custody of the
creditor. On December 31, 2018, B goes to A and gives him an envelope containing the
promissory note. Since the creditor voluntarily gave the document evidencing the debt back to
the debtor, naturally, it will imply that the creditor is condoning the debt.
In order to nullify this waiver:

1.the creditor must allege that the condonation is inofficious (meaning: dili niya kaya i-condone
and debt) -Ex … B also made donations to C - 5M, D - 3M, E- 2M. B only had 1M. - They
exceed the value of the donor B can make.
2. The debtor and his heirs may uphold it by proving that the delivery of the document was
made in virtue of the payment of a debt
-the delivery was made with the intention to extinguish the obligation; it could be that the
creditor delivered the document to make a demand
PRESUMPTIONS
Legal Presumption on the Delivery of these documents: Art. 1272

-When the document is in the possession of the debtor, it is presumed that it was made voluntarily by
the creditor. It will give rise to condonation, thus, will extinguish the obligation.
Art.1273
-if the obligation has an accessory obligation or an accessory undertaking, the extinguishment of the
principal obligation shall lead to the extinguishment of the accessory obligation, but, the reverse is not
true. The extinguishment of the accessory will leave the principal obligation in force.
Ex. A borrowed from B 10M. A executed a mortgage over his house and lot.
-B condoned the principal obligation of 10M – extinguished the principal obligation as well as
the accessory obligation. The accessory obligation cannot exist on its own without the principal
obligation.
-B condoned the mortgage – accessory obligation is extinguished but not the principal
Art. 1274 -Presumption: when the thing pledged after it has been delivered to the creditor is found in
the possession of the debtor, or on a third person who owns it, the accessory obligation (pledge) is
considered remitted.
Pledge- credit transaction which involves movable property which partakes the form of security of
payment; Ex: borrow money from a pawnshop – pawn your phone or any movable property; principal
obligation – loan and as security you pledged your movable property
CASES
Victor Yam Yet Lent vs CA
The SC discussed something to the effect of receivership.
The SC reminded that when there will be an express form of condonation or the condonation is
manifestly made on the part of the creditor, take note that you must follow the forms of
donation.
In this case, the form of donation that was not followed was Art. 748 (3) of the New Civil Code.
Art. 748, par. 3 provides that the donation and acceptance of a movable, the value of
which exceeds P5,000,00, must be made in writing, otherwise the same shall be void. In this
connection, under Art. 417, par. 1, obligations, actually referring to credits, l3 are considered
movable property. In the case at bar, it is undisputed than the alleged agreement to condone
P266, 196.88 of the second IGLF loan was not reduced in writing.
In this case, the agreement between Yam Lent and Manphil Investment, there was a
condonation in the amount of P 266,196.88. Even of all the requisites of a valid condonation
was made, the SC said the condonation in the amount of P 266,196.88 was void because it was
not reduced into writing.
There was a previous condonation as to the P 500,000 and there was a certification to
that effect that indeed Manphil Investment really wanted to condone the debt in favor of Yam.
But on the second IGLF loan, there was no certification to that effect. The certification was
absent.
Here, why is receivership important? If the corporation is getting insolvent (palugi na),
all its debtors and creditors, all of those transfers will go through a receiver. For example, X
Corporation is under receivership, X will take in Y, in relation to its debtors. If A is a debtor of
X Corp. A must make the payment to Y, in order that Y may manage the payment. Because for
example X has other debts. Y, the receiver will manage where the payment of Y will go. Either
to X's debt to Z Corp., W Corp. and so on and so forth.
In this case, since there was already receivership that was undergoing, payment wasn't
made properly to the receiver. The payment was still made in favour of Manphil Investment. So,
of course, follow the general rules on payment. Payment must be made to the creditor or his
successor in interest. In CORPO, the receiver is a successor in interest. Thus, payment should
be made to the receiver. Otherwise, the payment will not be valid.
Manila Fashions, Inc. vs. NLRC

There was a wage order that supposed to be implemented by Manila Fashions Inc.
What is a wage order? It is the issuance or department order made by the Regional
Tripartite Wage and Productivity Board increasing the minimum wage of all the employees in a
particular area. That is a matter under the law. So, under the law, it is the Regional Tripartite
Wage and Productivity Board that has the power to issue wage regulations or wage orders. The
wage orders that they issue involves how much is the minimum wage in a certain region.
For example, in the Davao Region, the minimum wage is P 340.00.
In the wage order, every employee in the minimum wage, there was an increase of P 12.00.
So example P 340 + 12 = 352.
What did Manila Fashions Inc. do? They know that there is already a pending wage order. So,
they should increase the wages of these employees. Manila Fashions executed a Collective Bargaining
Agreement (CBA). CBA, under the law on labour, it is an agreement between employers and
employees regarding terms and conditions of work, etc. Its CBA provides: Manila Fashions will keep
the minimum wage of its employees, the P12 per day will not be given but it will give other bonuses,
gifts, incentives etc.
Argument of Manila Fashions: The CBA which is a contract between the employers and the
employees. That it partook the form of condonation, such that, the employees where waiving their right
to the P12/day increase in their minimum wage.
It was not correct. The SC said a valid condonation or remission cannot be made because both
debts are not due and identical to one another.
What is the debt under the law which is required as matter of public policy to protect labor?
That is under the wage order. That debt under the wage order cannot be condoned or remitted by the
civil obligation because they are different. The obligation under the wage order is for the protection of
labor, but the CBA is for the protection of other rights and interest. That CBA cannot condone the
obligation of Manila Fashions to increase the minimum wage by P12/day. Otherwise, that condonation
is against public policy because you are not favoring/protecting labor.
Reyna and Soria vs COA

There was an issue when Reyna and Soria wrote off certain transactions.
Write off in accounting – when you write off certain accounts, you remove the account from the
books of records or the accounting books. It would seem in accounting parlance, write-off as an
accounting procedure is the same as that of a condonation or remission of a debt. In accounting, when
you write-off accounts, you will cancel out accounts which means that the obligation will no longer
appear in the books. It would seem as if there was condonation.
ISSUE: Is write-off the same as that of condonation or remission?
HELD:
No.
Write-off is not one of the legal grounds for extinguishing an obligation under the Civil
Code.53 It is not a compromise of liability. Neither is it a condonation, since in condonation gratuity on
the part of the obligee and acceptance by the obligor are required.54 In making the write-off, only the
creditor takes action by removing the uncollectible account from its books even without the approval or
participation of the debtor.
Furthermore, write-off cannot be likened to a novation, since the obligations of both parties
have not been modified.55 When a write-off occurs, the actual worth of the asset is reflected in the
books of accounts of the creditor, but the legal relationship between the creditor and the debtor still
remains the same – the debtor continues to be liable to the creditor for the full extent of the unpaid
debt.
Based on the foregoing, as creditor, Land Bank may write-off in its books of account the
advance payment released to REMAD in the interest of accounting accuracy given that the loans were
already uncollectible. Such write-off, however, as previously discussed, does not equate to a release
from liability of petitioners.
*Therefore, in this case, even if Land Bank writes off whatever Reyna and Soria had under its records,
it does not mean that Land Bank is condoning the debt. Write-off and condonation or remission is NOT
the same.

Illustration:: Difference Between Donation and Condonation

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Illustration:: Difference Between Donation and Condonation

Uploaded by

Copyright:

Available Formats

CONDONATION/REMISSION

ART.1270 – concept of condonation or remission

-partakes the form of donation

Difference between Donation and Condonation

Condonation partakes the form of implied donation.

Requires the acceptance on the part of the obligor

Forms of condonation or remission:

Ex: A borrowed from B 5M. In order to evidence his indebtedness to B, A executed a

In order to nullify this waiver:

Legal Presumption on the Delivery of these documents: Art. 1272

Manila Fashions, Inc. vs. NLRC

Reyna and Soria vs COA

ISSUE: Is write-off the same as that of condonation or remission?

You might also like