1. Define compensation as a mode of extinguishing an obligation, and distinguish it from payment. [2%]
2. X, who has a savings deposit with Y Bank in the sum of P 1,000,000.00, incurs a loan obligation with the said Bank in the sum of P800, 000.00 which has become due. When X tries to withdraw his deposit. Y Bank allows only P200, 000.00 to be withdrawn, less service charges, claiming that compensation has extinguished its obligation under the savings account to the concurrent amount of X's debt. X contends that compensation is improper when one of the debts, as here, arises from a contract of deposit. Assuming that the promissory note signed by X to evidence the loan does not provide for compensation between said loan and his savings deposit, who is correct? [3%]
No comments:
Post a Comment