Law on Obligations and Contracts Chapter 3, Section 4. Joint and Solidary Obligations Arts.

1207 1222

Kinds of Obligations according to the numbers of parties: 1.) Individual obligations there is only one obligor or one obligee. 2.) Collective obligations there are two or more debtors and / or creditors. a. Joint obligation the payment of the obligations is fulfilled proportionately by the different debtors and /or to be demanded proportionately by the different creditors. e.g. - A, B and C are jointly liable to pay D Php 15,000. D may only collect Php 5, 000 each from A, B, and C. - A is liable to pay B, C and D Php 15, 000. B, C and D may only collect Php 5, 000 each from A. - A, B and C are jointly liable to pay D, E and F Php 30, 000. A, B Php 10, 000 each. b. Solidary obligation each of the debtors is bound to render and /or each of the creditors has a right to demand, entire compliance of the obligation. e.g. A, B and C are solidarily liable to pay D Php 15, 000. D can demand from B the entire payment and C is only liable for Php 10, pay D, E and F 1/3 of 000 each. They should only

of the obligation. B has the right to collect from A and C their respective shares. - A, B and C are solidarily liable to pay D, E and F Php 30, 000. E may claim the fulfillment of the obligation from A , B or C and must give to D and F their respective shares. General rule (Art. 1208): An obligation is always presumed to be joint. Exemption to the General rule (Art. 1207): An obligation will only be solidary: a. When it is stipulated by the contracting parties. b. When it is expressly stated by the law. c. When the nature of the obligation requires it. Kinds of Solidarity: 1. According to the parties bound: a. Passive solidarity solidarity on the part of the debtors, anyone of them may be made liable for the fulfillment of the entire obligation. b. Active solidarity solidarity on the part of the creditors, anyone of them can demand the fulfillment of the entire obligation. c. Mixed solidarity solidarity on the part of both the debtors and creditors, each of the former is liable to render, and each of the latter has a right to demand, entire fulfillment of the obligation. 2. According to source: a. Conventional solidarity when it is agreed upon by

the parties. b. Legal solidarity when it is imposed by the law. c. Real solidarity when it is imposed by the nature of the obligation.

Nature of a Joint Indivisible Obligation 1. The creditors have to enforce the entire compliance of the obligation to all the debtors because the debtors are only liable for their proportionate share. It will be prejudicial to one of the debtors if the creditors will demand from him the entire compliance of the obligation. Therefore, the debt can only be enforced by, proceeding against all the debtors for the compliance is not possible unless they act together. (Art. 1209) 2. The insolvency of one of the debtors will not make his codebtors liable for his share. (Art. 1209)

Difference between indivisibility and solidarity 1. Indivisibility refers to the prestation, while the solidarity refers to the juridical tie which binds the parties to the obligation. 2. In indivisible obligation, only the debtor guilty of breach of obligation is liable for damages. In solidary obligation, all of the debtors are liable for the breach of the obligation committed by a debtor. 3. Indivisibility can exist even though there is only one creditor and one debtor, while in solidarity obligation, there must be at least two debtors or two creditors.

4. In indivisible obligation, co-debtors are not liable in case of insolvency of one the debtors, while in solidarity, the other debtors are proportionately liable. 5. Liability in an indivisible obligation may be joint or solidary, while in solidary obligations, the object may be divisible or indivisible. (Art. 1210)

Kinds of Solidarity obligation according to the legal tie 1. Uniform parties are bound by the same stipulations 2. Non-uniform or varied parties are not subject to same stipulations. Here, the creditor may bring his action as a whole against any of the solidary debtors minus the shares of the debtors with unexpired terms or unfulfilled conditions. After the expiration of the term or fulfillment of the condition, the creditor may now demand the payment of the remainder. (Art. 1211)

Rights and acts that may or may not be performed by a Creditor 1. A solidary creditor may perform any act beneficial or useful to the other creditors, but not anything that may prejudice the latter. (Art. 1212) 2. A solidary creditor cannot assign his rights to a third person without the consent of his co-creditors. (Art. 1213) 3. If a creditor executed an act that extinguishes the obligation, e.g. novation, compensation, confusion and remission, he shall be liable to the other creditors for their respective share in the obligation. (Art. 1215)

4. In a solidary obligation, any one or some or all of the solidary debtors simultaneously, may be made to pay, by the creditor, the debt so long as it has not been fully collected. The creditor has the right to choose to whom he will enforce collection. (Art. 1216) 5. If two or more solidary debtors offer to pay, the creditor has the right to choose which offer to accept. (Art. 1217) Rights and acts that may or may not be performed by a Debtor 1. The debtor may pay any of the creditors. However, if a demand was made, judicially or extrajudicially, by one of the creditors, then the debtor must pay to that creditor who made the demand. If there are two or more debtors, the one upon whom a demand has been made, should pay the creditor who made the demand. (Art. 1214) 2. The debtor who made the payment may claim the share of his co-debtors with interest. However, if the payment was made before the debt is due; no interest for the intervening period may be demanded. (Art. 1217) 3. If a solidary debtor cannot, because he is insolvent at the moment, reimburse his share to the debtor who made the payment, such share shall be borne by all the co-debtors, proportionate to the debt of each. (Art. 1217) 4. A solidary debtor, who made the payment, shall not give him the right to be reimbursed by his co-debtors if the payment was made after the obligation has prescribed or becomes illegal. (Art. 1218) 5. If the creditor remits the share of one of the solidary debtors, the other debtor, who paid the creditor the whole amount of the obligation, shall have the right to seek

reimbursement from the creditor the amount that he should have only paid due to the remission of the share of his codebtor. (Art. 1219) 6. When one of the solidary debtors obtained a remission of the whole obligation, he shall not have a right to seek reimbursement from his co-debtors. (Art. 1220)

Rules when the thing is lost or the obligation has become impossible (Art. 1221) 1. If the thing is lost without fault and before delay, the obligation is extinguished. 2. If the loss is due to the fault of one of the solidary debtors, all of the debtors shall be responsible to the creditor and they may file actions against the guilty or negligent debtor. 3. If the loss is through a fortuitous event and after delay, the same rule in number 2 shall apply. Defenses available to a Solidary debtor (Art. 1222) 1. Defenses that are derived from the nature of the obligation. A defense derived from it is a complete defense because it can nullify or render ineffective the obligation. 2. Defenses personal to, or which pertain to share of, the debtor sued. 3. Defenses personal to other of the debtors.