Obligations and Contracts (Philippines)

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NOVATION (Article 1291)
* The extinction of an obligation through the creation of a new one which substitutes it * The substi or change of an oblig by another, which extinguishes or modifies the first, either: * by changing its object or principal conditions

* by substi another in place of the debtor
* by subrogating a third person in the rights of the creditor (Subrogate - Take over a legal claim or right against a third party from another party who previously owned that right or claim) Art. 1291 Obligations may be modified by:

(1) Changing their object or principal conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the creditor. (1203)

COMPENSATION (Article 1278)
* the extinguishment to the concurrent amount of the debts of the two persons who, in their own right, are debtors and creditors of each other (Arts 1278, 1290) * involved the simultaneous balancing of 2 oblig in order to exting them to the extent in which the amt of one is covered by that of the other Art. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other. (1195) CONFUSION (or merger) (Article 1275)

* the meeting in one person of the qualities of creditor and debtor with respect to the same obligation Art. 1275. The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person. (1192a) REMISSION (Article 1270)

* the gratuitous abandonment by the creditor of his right against the debtor * form of donation
Art. 1270. Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly. One and the other kind shall be subject to the rules which govern inofficious donations. Express condonation shall, furthermore, comply with the forms of donation. (1187)

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.

He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded.

When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each. (1145a)

EFFECTS OF PAYMENT BY A SOLIDARY DEBTOR
1. BETWEEN THE SOLIDARY DEBTORS & CREDITOR(S)
* Payment made by one of the solidary debtors extinguishes the oblig payment that extinguishes the obligation = law refers to Payment in full) * The creditor, for his protection, is given the right to choose which offer to accept, if two or more solidary debtors offer to pay 2. AMONG THE SOLIDARY DEBTORS

* After payment of the debt, the paying solidary debtor can demand REIMBURSEMENT from his co-debtors for their proportionate shares with (legal) interest only from the time of the payment * the other debtors do not become (by virtue of such payment) solidary debtors of the debtor-payer * Their liability – not based on original oblig which has been extinguished; but upon the payment made by the co-debtor, which creates a joint obligation of reimbursement on the part of the others (Art 1208) * In case of insolvency of the solidary debtors – others assume the share of the insolvent pro rata (pars 2 & 3) 3. AMOUNG THE SOLIDARY CREDITORS

* The receiving creditor is liable to the others for their corresponding shares (Art 1208) Notes:
* If two debtors offer to pay, the creditor can choose which offer to accept. Payment by one of the solidary debtors extinguishes the oblig * Payment by one of the creditors – gives him the right to DEMAND REIMBURSEMENT...
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