Quick answer

Condonation or remission is the gratuitous abandonment by the creditor of their right against the debtor; in plain terms, it is the creditor forgiving the debt, which extinguishes the obligation in whole or in part. Because condonation is essentially an act of liberality (a gift of the credit), it is governed by the rules on donations as to its acceptance and, for its validity, must comply with the forms of donation; so, for example, express condonation must follow the forms of donation (a large remission may need to be in the proper form), and, like a donation, it requires the debtor's acceptance. Condonation may be express or implied. Express condonation is when the creditor explicitly declares the remission of the debt. Implied condonation is inferred from acts of the creditor showing an intention to abandon the credit. The Civil Code provides a useful presumption: the delivery of a private document evidencing a credit, made voluntarily by the creditor to the debtor, implies the renunciation of the action which the creditor had against the debtor; in other words, if the creditor voluntarily hands back the promissory note or IOU to the debtor, it is presumed the debt has been condoned (remitted), unless the contrary is proved. Furthermore, whenever the private document in which the debt appears is found in the possession of the debtor, it is presumed that the creditor delivered it voluntarily, unless the contrary is proved. Condonation may be total (forgiving the whole debt) or partial. As with obligations generally, the condonation of the principal debt extinguishes the accessory obligations (like a pledge or guaranty), but the remission of an accessory obligation (like the pledge) does not extinguish the principal debt. So condonation or remission is the creditor's forgiveness of a debt that extinguishes the obligation, governed by the rules on donations, and it may be presumed when the creditor voluntarily returns the instrument of the debt to the debtor.

Forgiving the Debt

Condonation or remission is the creditor's gratuitous abandonment of their right — forgiving the debt, which extinguishes the obligation in whole or part.

Governed by the Rules on Donations

Because it is an act of liberality, condonation is governed by the rules on donations — express condonation must follow the forms of donation, and it requires the debtor's acceptance. It may be express or implied.

The Presumption From the Returned Instrument

If the creditor voluntarily delivers the private document (the promissory note) to the debtor, the debt is presumed condoned, unless proven otherwise. Possession by the debtor of the instrument is presumed a voluntary delivery. Condoning the principal extinguishes the accessory (pledge/guaranty), but not vice versa.

Practical Takeaways

Frequently Asked Questions

What is condonation or remission of a debt? The gratuitous abandonment by the creditor of their right against the debtor, that is, forgiving the debt, which extinguishes the obligation in whole or in part.

What rules govern condonation? Because it is essentially an act of liberality, condonation is governed by the rules on donations as to acceptance and form. Express condonation must comply with the forms of donation, and it requires the debtor's acceptance.

What is the effect of the creditor returning the promissory note to the debtor? The voluntary delivery of the private document evidencing the credit to the debtor implies the renunciation of the creditor's action, so the debt is presumed condoned, unless the contrary is proved.

Does forgiving the main debt affect a guaranty or pledge? Yes. The condonation of the principal debt extinguishes the accessory obligations such as a pledge or guaranty. However, the remission of an accessory obligation does not extinguish the principal debt.

This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.

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