Dear PAO,

My friend asked me if I could lend her some money because she needs it to apply to work abroad. I agreed to lend her a certain amount, and we formalized our agreement in writing. The amount of the loan is P200,000, which should be paid on Oct. 15, 2024. We also agreed that failure to pay the full amount on the due date would result in a 6 percent penalty interest. But on October 15, she offered to pay P100,000, stating that she could not pay the full amount due to financial problems. She insisted that I accept the partial payment to stop the penalty interest. I want to know if my friend can compel me to accept the P100,000 as a partial payment of her debt.

Martin

Dear Martin,

According to Article 1248 of the New Civil Code of the Philippines, as a general rule, a creditor may not be compelled to accept partial payment from the debtor, to quote:

“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.”

A prestation refers to the object of the obligation. Based on the above-quoted provision of the law, as a rule, the prestation should be performed in one act and not in parts. Thus, it is clear that a debtor cannot compel a creditor to accept a partial payment, just as a debtor cannot be compelled by a creditor to make a partial payment. Therefore, if the creditor refuses to accept partial payment, such a refusal cannot be considered unjustified, as it is supported by law. Furthermore, if the creditor refuses to accept partial payment, he or she does not incur any delay in accepting the payment.

We should understand, however, that although the creditor cannot be compelled to accept partial payment, there is no prohibition against the creditor accepting partial payment voluntarily. In other words, the debtor can compel the creditor to accept partial payment only if there is an express stipulation between the parties.

In your case, based on the facts presented, your friend is obliged to pay you the entire amount of P200,000, and failure to comply with this would result in the implementation of a penalty interest of 6 percent. As discussed above, your friend may not compel you to accept her partial payment of P100,000. The right to decide whether or not to accept partial payment belongs to you as the creditor and not to your friend who owes you money.

We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]