Notes on Article 1241: Incapacitated/Unauthorized Person Pays

Article 1241. Payment to a person who is incapacitated to administer his property shall be valid if he has kept the thing delivered, or insofar as the payment has been beneficial to him.

Payment made to a third person shall also be valid insofar as it has redounded to the benefit of the creditor. Such benefit to the creditor need not be proved in the following cases:

(1) If after the payment, the third person acquires the creditor's rights;
(2) If the creditor ratifies the payment to the third person;
(3) If by the creditor's conduct, the debtor has been led to believe that the third person had authority to receive the payment.

This Article provides a discussion on payments made to incapacitated persons and those made to unauthorized persons.

As a general rule, payment made to an incapacitated person is not valid. It is, nevertheless, valid if the incapacitated person to whom the payment was made kept the thing delivered and valid only to the extent where the delivery redounded to his benefit.

Thus, if A is indebted to B in the amount of $100 and pays to the latter the amount during his (B's) insanity, they payment is void. However, if B received the money but never spent it, the payment would be valid and A's obligation would be extinguished.

What if B, during his insanity and during his keeping and possession of the $100, was defrauded into buying a pair of shoes which was actually worth $75?

Then, the payment made by A would still be valid up to the extent beneficial to B (i.e. $75). Since B did not acquire a beneficial use of the $25 excess, it cannot be deemed valid.

In case B argued that it was not beneficial to him, should he bear the burden of proof?

No, the burden of proof is on the person who effected the payment. He has to prove that what he paid benefited the incapacitated payee.

What kinds of benefit can be asserted? Only financial?

No, benefit may be financial, moral or intellectual in nature. Each allegation to the effect that the incapacitated person who receive the payment benefited from the thing financially, morally or intellectually should be substantiated with proof.
A paid to B, an incapacitated person. The former would like to prove that B benefited from the payment. The latter, on the other hand, insisted that A should prove that he (B) invested the money to some profitable venture. Is B correct?

No, B is not correct. The law does not require such a thing. The law merely requires that the payor prove that the payee gained some advantage from the payment made.

A was indebted to B. At the time of payment, B was insane. B kept it but later on used it for hospital expenses. Valid?

Yes, the payment is valid. This is one of the way by which the payee may benefit from the payment made by the payor.

A was indebted to B, who was insane at the time of the payment, at the amount of $100. B bought something that was supposed to be free for $100. B's guardian, for you see, an incapacitated person is expected to have a guardian, tried to claim from A the debt due. A contended that his obligation was already extinguished by the payment he tendered and made to B. Decide.

The payment is not valid.

Under the laws on obligations, payment made to an incapacitated person is not valid unless the payor accepted and kept it or unless the payment proves beneficial to him. The validity of the payment in the second instance, of course, extends only insofar as it redounded to they payee's benefit.

Here in this case, B, an incapacitated person, did not benefit from the $100 because what he bought was supposed to be available for $0. His guardian is correct in claiming the payment since, in the eyes of the law, there was in fact no payment made. Consequently, B, during his lucid interval or after he regained sanity, may also ask for the payment instead of his guardian.

What about payments made by unauthorized persons?

Payments made by persons who were not given authority by the parties, by law or by the courts are not valid. The exception of course is that it is valid only up to the extent of benefit that redounded to the creditor.