Article II: On Causes Exempting in Perpetuity

340. The causes definitively exempting from the obligation of restoring are:

1. The destruction of the thing owed in species without fault of the debtor of good faith, or, for a debtor of bad faith, if the thing would have perished at the same time from a natural cause with the owner: it exempts, namely, from restitution of the thing.

2. Condonation (total or partial) or remission of the debt made by the creditor, whether express, or implicit or tacit (for example, by deleting the chirograph), or legitimately presumed on account of a positive and solid foundation, as can exist for thefts of sons and sometimes for little thefts of servants, which can be conjectured from the love and liberality of the father or owner, the quantity and quality of the thing, and other circumstances (a. 1282-84).

Moreover, for legitimate condonation three conditions are required: a) that it be perfectly free, immune from error, fraud, fear, or force; whence it does not hold if it has been extorted by threat, or if the creditor errs, or is deceived concerning the quantity of the debt which he thinks much smaller, or the debtor feigns poverty; b) that it be made by him who has power, namely, who has actual dominion of the things and free administration, whence invalid is a condonation made by a wife concerning the goods of the husband or of the community; c) that the law not obstruct.

3. Compensation (a. 1289 sq.), by which a certain debt of justice is extinguished equally on each side, whether it has been made to the debtor himself if the creditor owes him as much, or made to the creditor through an equivalent donation, or made to the creditor's creditor, as if Paul owes 100 fr. to Peter, and John 100 to Paul, but Peter asks payment from John.

Yet this cannot be done except from a reasonable cause, if the creditor cannot obtain payment otherwise, or only with difficulty; because a personal right is injured and the order of law which the law orders to be observed is interrupted (a. 1239), which will not be licit except on account of a proportionate cause.

4. The legitimate authority of a superior, whether a) through prescription; or b) through the sentence of a judge, provided it has been obtained in good faith and without unjust means, in the case of juridical fault or doubtful matter: thus it happens that someone can retain what perhaps he owed, or another on account of juridical fault is bound to pay him; or c) through composition of the Supreme Pontiff, by which, with a just reason, the restitution to be made for ecclesiastical goods taken away, or for debts toward unknown persons, is partially or totally remitted: for the Supreme Pontiff is the natural administrator of ecclesiastical goods, indeed also of pious causes; but the part which is remitted can be supplied to the creditor in spiritual utility from the treasury of the Church.

But if afterward the owner appears, probably the debtor can judge himself liberated from every obligation.

341. Does not a cession of goods exempt from the obligation of paying debts integrally? - Resp.:

1. Cession of goods per se does not take away such an obligation but only excuses for a time, on account of the debtor's inability to pay all debts.

2. Whence, if someone culpably or fraudulently has become unable to pay, or makes a cession from bad faith, he is not exempted from the obligation of restoring the whole, because since he is an unjust damager, the creditors are not judged to condone, nor would the law establish this equally.

3. In the case in which someone from mere misfortune has become unequal to paying debts, a) if in the very contract of cession the creditors explicitly declare that the debtor either will be free or will remain obligated, that contract is to be observed. b) Likewise the law is to be observed, if it itself declares the obligation to remain, as happens in Belgian law (29 June 1887, a. 25; C. C., a. 1270; C. Com., a. 586) for compositions which merchants unequal to paying enter upon with creditors for preventing bankruptcy. c) But with the express disposition of creditors or of law excluded, the obligation of paying the remaining things is not extinguished but only suspended.

Nevertheless if somewhere a contrary persuasion commonly prevails, this can be admitted or tolerated: it is reported to be so in England, where businessmen are accustomed to receive a greater price on account of danger to capital from the foresight of such a loss, and therefore they more easily consent to it. But in many regions it is not so.

342. Observation. - He who enters religion is not on that account exempted from the obligation of restoring, nor yet does the religion contract that obligation, but he himself must restore as far as he can from goods if he has any, and afterward, with the consent of the superior, work and do other things fitting to his state, so that he can complete payment.

But by positive ecclesiastical law such a one is prohibited under grave obligation to enter (can. 542). But considering natural law alone:

a) if within a short time, for example, two years, he can satisfy the obligation of restoring at least for a great part, he is bound to defer entrance until restitution has been made;

b) but if there is no founded hope that he can restore within a short time, with a cession of goods having been made to the creditors, he can enter, especially if from a long delay a special danger of salvation threatens him: for because of money the person of a free man cannot be obligated, but only his thing (q. 189, a. 6, ad 3).