Law and Joint Obligations Modified

8/12/2019 Law and Joint Obligations Modified

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Terms to remember

Novation- is the total or partial extinction of an

obligation through the creation of a new one which

substitute it.

Compensation- is the extinguishment to the

concurrent amount of the debts of two persons who,

in their own right, are debtors and creditors of each

other (OFFSETTING)

ex.

X owes Bin amount of 100Bowes X in amount of 20

IF Both debts are due and payable today so

X only owes Bin amount of 80


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Confusion -takes place when the characters

of creditor and debtor are merged in thesame person.

Remission- gratuitous abandonment by the

creditor . The obligation itself has become a

donation of the creditor to the debtor.

orThe CANCELLATION of debt or penalty


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ART 1215. Novation, compensation, confusion or

remission of the debt, made by any of the

solidary creditors or with any of the solidary

debtors, SHALL EXTINGUISH THE OBLIGATION,

without prejudiceto the provisions of Article

1219.

The creditor who may have exercised any of

these acts, as well as he who collects the

debt, shall be liable to the others for theshare in the obligations corresponding to

them. (1143)


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Jessa, debtor and Carlo , John ,Don solidary

creditors In the amount of P30,000.If Carlo

validly condones the debt in the amount of

P18000, heshall be liable for P6,000 each to

John and Don . If Carlo collects P15000 from

Jessa, Carlo must account for the P5000 share

each of John and Don .


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Effect of novation, etc, where

obligation is joint

In a joint obligation, novation, compensation,

confusion, remission, prescription, and any other

causes of modification or extinction does not

distinguish or modify the obligation EXCEPT with

respect to the creditor or debtor affected, without

extending its operation to any part of the debt or of

the credit.


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EXAMPLE

If the obligation of Jessa in the above example is

joint, the condonation will affect only the share ofCarlo in the amount of P10000. So Jessais still

indebted to John and Don in the amount of

P20,000.

In the first example, only P12000 of the debtremains, the obligation of Jessa to pay the

P18, 000 condoned having being extinguished.


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ART 1216. The creditor may proceed against any

one of the solidary debtors or some or all of them

simultaneously. The demand made against one ofthem shall not be an obstacle to those which may

be subsequently be directed against the others,

so long as the debt has not been fully collected.

(1144)

The above provision is not applicable to a joint

obligation.


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Example:

Ave, Rosanne, Henna and Demi solidarity owe Richter the

amount of P3,000. Richter can collect from Ave or Rosanne or Henna

or Demi alone, or from any three of them, or all of them

simultaneously.


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(2)

If Demand is made also on Rosanne and Henna, or to

include them as party defendants, as Ricter has the right to proceed

against any one of them.

If Ave pays Richter P1,000, the latter can still go against all of them

for the balance as long as the debt has not been entirely satisfied.


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ART. 1217. Payment made by one of the solidary

debtors extinguishes the obligation. If two or more

solidary debtors offer to pay, the creditor maychoose which offer to accept.

He who made the payment may claim form

his co debtors only the share which corresponds toeach, with the interest for the payment already

made. If the payments is made before the debt is

due, no interest for the intervening period may be

demanded.


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Effects of payment by

a solidary debtor


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ART. 1217. Payment made by one of the solidary debtors extinguishes the

obligation. If two or more solidary debtors offer to pay, the creditor may

choose which offer to accept.

a. Between the solidary debtors and creditors.

Example :

Bea, April, and Jessa are jointly and severally liable to Flo and Trixia

in the amount of P3,000 due on January 5.

If both Bea and April offer to pay Flo , on January 5, the latter may choose

which offer to accept.If Bea pays the amount of P3,000 on January 5, the

obligation is extinguished.


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He who made the payment may claim form his co debtors only the

share which corresponds to each,with the interest for the payment already

made. IF THE PAYMENTS IS MADE BEFORE THE DEBT IS DUE, NO INTEREST

FOR THE INTERVENING PERIOD MAY BE DEMANDED.

b. Among the solidary debtorsExample:

The payment by Bea gives her the right to demand reimbursement

from April and Jessa P1,000 each with interest from the date of payment.

But Bea is not entitled to reimbursement nor to interest for any payment

made before January 5.The obligation of April and Jessa to reimbursed her

with interest will arise only from January 5.


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When one of the solidary debtors cannot because of his insolvency,

reimburse his share to the debtors paying the obligation, such share shall

be borne by all his co-debtors, in proportion to the debt of each

If Jessa is insolvent, both Bea and April shall bear herinsolvency in proportion to their shares. Hence, Bea can still ask

April to pay an additional sum of P500. Of course, Bea and April

can later on recover from Jessa should be the latters finances

improve.

If, In the same example, Bea paid only P2,400 and April

P600,Bea can recover reimbursement only to the extent that herpayment exceeds her share, so that Jessa is liable her for P1,000

and April , for 400.


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c. Among the solidary creditors

Example:

Floin above example, has the obligation to give to

Trixia his corresponding share in the credit.


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John and Richter are solidarily bound to deliver 10 bundles of

lumber that came from Talamban which are used for furniture

purposes. Later, the law-making body passed law which prohibits the

illegal cutting of tress in Talamban.

If John, nevertheless delivered the 10 bundles of lumber

knowing that the illegal cutting of trees is already prohibited by law, he

cannot get any reimbursement form Richter because the payment was

made after the obligation had become illegal.


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ART 1219. The remission made by the creditor of the share

which affects one of the solidary debtors does not release

the latter form his responsibility towards the co-debtors,in case the debt had been totally paid by anyone of them

before the remission was effected. (1146a)

The purpose of the article is to forestall fraud whereby the debt having

been paid

This article secures equality and justice to the paying debtor in as much

as the payment benefits his co-debtors.

If the payment is made first, the remission or waiver is of no

effect. There is no more obligation to remit.

If remission is made previous to the payment and payment is

made, solution indebiti arises.


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Example :

Maria and Carmille are liable in solidium to Jess in the amount of 1,000. Jess

remitted Marias share. Subsequent payment by Carmilleof 1,000 to Jess will

not entitle him to reimbursement from Maria since the remission extinguished

the obligation with respect to Marias share. However, Carmillecan demand

the return of 500 from Jess under the principle of solutio indebiti.


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If payment by Carmillewas made before remission, Mariais still liable to

Carmille because the remission is without effect, the obligation having

been extinguished already by the payment.


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Paulo , Demi and Jaeboy are liable in solidum to Rosane in the amount of 3,000.

Rosane remitted the share of Paulo. After paying Rosane 2,000, the balance of the

credit, Demi demands reimbursement from Jaeboy who become insolvent after the

remission.

Is Paulo liable to contribute to the share of

Jaeboy?


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YES !

Article 1217 , STATES that the share of the insolvent co-debtor shall be

borne by all of his co-debtors, in proportion to the debt of each


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ART 1220 , The remission of the whole

obligation obtained by one of the solidary

debtors, does not entitle him to

reimbursement from his co-debtors.

The reason for the above article is that the debtor

WHO obtains remission pays nothing to the creditor.

It really is a DONATION.


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Example:

A and B executed jointly and severally a promissory

note for P2,000 in favour of C. C remitted the whole obligation

out of regard for A.

A here is not entitled to reimbursed from B since A did

not pay anything to C. If only P1,300 is remitted, B is still liableto C for P700. B has no obligations to reimburse A for P300 of

Bs share affected by the remission for the same reason that

no payment was made by A.


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ART. 1221. If the thing has been lost or if the

prestation has become impossible without the

fault of the solidary debtors, the obligation

shall be extinguished.

If there was fault on the part of any one of them, all shall

be responsible to the creditor for the price and payment of

damages and interest, without prejudice to their action

against the guilty or negligent debtor.


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Rules in case thing has been lost or prestation has

become impossible

If the thing is lost or the prestation becomes

impossible, the liability of the solidary debtors depends

upon whether or not there is fault or delay.

1. Loss is without fault and before dalay

Ex: A, B, and C promised solidarily to deliver to D a

particular truck valued at P15,000.

The obligation shall be extinguished if the truck is lost or destroyed through a

fortuitous event without the fault if A,B and C and before they have incurred in

delay.


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Loss is due to fault on the part of a solidary debtor

Ex: If in the preceding example, the truck was lost through the

fault of C, A and B shall be responsible to D for the price of the

trucks as well as damages although A and B were not at fault at

all. A solidary obligation is, in essence a mutual agency. As far asthe creditor is concerned, the fault or delay of one solidary

debtor shall be the fault or delay of all the solidary debtors.

A and B however, can recover from C, the guilty or negligent debtor, the

full amount of such price and damages if A and B have alreadycontributed to the price of the truck.

If D recovers the price and damages from C, the latter cannot claim

reimbursement from A and B because he alone was at fault.


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Loss is without fault but after delay

Ex:

if the truck was lost through a fortuitous event but after

a demand was made upon C, D can still recover damages from A

or B or both of them without prejudice to the right of action of

action against C following the same rule in No. 2. The default by

C makes all of the solidary debtors responsible even for a

fortuitous event.


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ART. 1222 A solidary debtor may, in actions filed by the

creditor, avail himself of all defences which are derived from

the nature of the obligation and of those which are personal

to him, or pertain to his own share. With respect to those

which personally belong to others, he may avail himself

thereof only as regards that part of the debt for which the

latter are responsible.

Defences available to a solidary debtor.

(1) Defences derived from the nature of the obligations

Ex: A and B are solidarily liable to C in the amount of P4,000.

The entire debt of A and B was paid by D. In an action by C

against A, the latter can raise the defense of payment by virtue

of which the obligation was extinguished.


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(2) Defensespersonalat, or which pertain to share of, debtor

sued

Ex:

(a) If the action by C is against B, and B was insane at the

time the obligation was contracted, B can put up the defense of

insanity with respect to the entire obligation. This defense is

personal to B alone. It is complete defense

Other examples are : incapacity , mistake , violence, minority, etc


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(b)

Assume now that the portion of the obligation affecting B is

subject to a suspensive condition which has not yet happened

In this case, the non-fulfilment of the condition is a partial

defense as it can be set up by B only with respect to his share. C can

demand from B the portion of the obligation pertaining to A because

B is solidarily liable.


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(3) Defenses personal to other solidary debtors.

Ex:

In the 2 preceeding examples, the defense of

insanity or non-fulfilment of the susupensive condition is

not available to A as to release him from his liability for

his share in the obligation.

In the other words, A may be avail himself thereof only as regards that

part of the debt for which B is liable. Hence, having only a partial defense, A is

still liable for P2,000, his share in the obligation.


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Law and Joint Obligations Modified

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