Obligations of Debtor

What are the Obligations of a Debtor?

a.   to pay the creditor an equal amount of money or if it is a fungible thing, the same kind and quality even if it should change in value;  it is impossible to deliver the same kind, its value (monetary) at the perfection of the loans hall be paid

b.   to pay in the currency stipulated, if there is none, then in legal tender

Interest

      General Rule:  No interest shall be due unless it has been expressly stipulated in writing

    

       EXCEPTION:

                     1. indemnity for damages

                     2. interest accruing from unpaid interest if judicially demanded

Gen. Rule:  interest due and unpaid shall NOT earn interest

                  EXCEPTION:

1.       when judicially demanded

2.       when there is a stipulation as to compound interest, which must be in writing (interest due and unpaid shall be added to the principal obligation and the resulting total amount shall earn interest)

·     If the interest is payable in kind, its value shall be appraised at the current price of the products or goods at the time and place of payment.

·     Remember, that the Usury Law is now legally inexistent such that interest rates are no longer subject to any ceiling.  The rate will depend on the agreement of the parties.

·     If interest is paid by mistake, the debtor may recover as this would be solutio indebiti.  But if interest is paid voluntarily because the debtor feels morally obligated to do so, there can be no recovery in accordance with natural obligations.