Text of the provision

Art. 1286. Compensation takes place by operation of law, even though the debts may be payable at different places, but there shall be an indemnity for expenses of exchange or transportation to the place of payment.

(1199a)

Civil Code of the Philippines, Republic Act No. 386, approved June 18, 1949, effective August 30, 1950. Reproduced in full; verified verbatim against the LawPhil and ChanRobles official-text renderings.

What this article means

Compensation operates by operation of law even if the debts are payable at different places — with indemnity for the expenses of exchange or transport to the place of payment.

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Note. The text of the provision above is reproduced in full from the official enactment (Republic Act No. 386), verified against the LawPhil and ChanRobles renderings. The annotation and commentary around it are the work of Vivas & Nobles Law Office and are general legal information, not legal advice. How a provision applies to a particular situation depends on facts that only a lawyer reviewing your case can assess.