Section 4- Joint & Solidary Obligations Kinds of solidary obligation according to legal tie

Kinds of obligations according to the number of  Uniform- parties are bound by same
parties: stipulations.
 Individual Obligation- 1 where there is  Non-uniform- Not subject to same
only 1 debtor/creditor. stipulations.
 Collective Obligation- 1 where there are 2 Solidarity is not affected by diverse stipulations.
or more debtors/creditors. Rule: creditor may bring action against any
 Joint Obligation- obligation is solidarity debtor LESS shares of other debtors
proportionately fulfilled by debtors with unexpired terms.
and/or proportionately demanded
by creditors. THE SOLIDARY CREDITOR
Ex. Mancomanada,  He may do useful acts, but not prejudicial
mancomunadamente, pro rata, ones. “Theory of mutual agency”
proportionatelt, “We promise to pay”  He can’t assign his rights to a 3 rd person
 Solidary Obligation- 1 where each unless there is consent; he may assign to
debtor is bound to render, and co-creditor w/o consent.
each creditor has right to demand,  Payment may be made to any solidary
entire compliance of obligation. creditor unless there is judicial/
Ex. Joint and/ or severally, in solidium, extrajudicial demand of one creditor.
solidaria, juntos o separadamente, (He has right to proceed against any debtor.)
together and/or separately, “I promise  He is liable for corresponding shares of
to pay” other creditors in case of: novation,
compensation, confusion and remission.
Collective obligation is presumed joint since Novation, etc. doesn’t extinguish obligation in
solidary obligations are burdensome for they “joint” because only the proportionate
create unusual rights and liabilities. creditor is affected.
It becomes solidary if: Effects of payment by solidary creditors:
A. Obligation expressly states 1.) Between solidary debtors & creditors-
B. Law requires solidarity extinguishment of obligation.
C. Nature of obligation requires solidarity 2.) Among solidary debtors- payee can
Kinds of Solidarity: demand reimbursement from co-debtors.
1.) According to parties bound: 3.) Among solidary creditors- receiving
 Passive Solidarity (mutual guaranty) creditor is jointly liable for corresponding
 Active Solidarity (mutual shares.
representation) Effect of payment after obligation has (1)
 Mixed Solidarity- both sides prescribed/ become (2) illegal: Solidary debtor
2.) According to source: can’t get reimbursement since obligation is
 Conventional Solidarity- agreed by extinguished.
parties Effect of remission of share:
 Legal Solidarity- imposed by law i. Payment before remission: no effect
 Real Solidarity- imposed by nature of since obligation is already
obligation extinguished.
Joint Indivisible Obligation-Joint to liabilities/ ii. Payment after remission: solutio
right, indivisible to compliance. indebiti arises.
INDIVISIBILITY VS. SOLIDARITY
Refers to prestation Refers to legal tie Note: Remission of whole obligation obtained by
Only the guilty debtor All debtors are liable 1 debtor doesn’t entitle him to reimbursement
is liable for damage from co-debtors, since it is gratuitous, except in
Can exist with only At least 2/ more cases of novation, compensation, or confusion.
one debtor & creditor debtors/ creditors
Others aren’t liable for Liable for insolvency of
insolvency of 1 debtor 1 debtor
 Rules in case thing has been lost/ prestation Obligations deemed INDIVISIBLE:
became impossible: 1) Obligations to give definite things.
a. Loss is w/o fault and before delay- 2) Obligations, which are not susceptible
extinguishment of obligation. of partial performance.
b. Loss is w/o fault and after delay- 3) Obligations provided by law to be
Creditor can recover damages even if indivisible even if thing/service is
with fortuitous event. (All debtors are physically divisible.
liable) 4) Obligations intended by the parties to
c. Loss Is due to fault on the part of a be indivisible even if thing/service is
solidary debtor- Debtors are responsible physically divisible.
for price + damages (mutual agency). Obligations deemed DIVISIBLE:
1) Obligations, which have for their object
Defenses available to a solidary debtor: the execution of a certain number of
 Defenses derived from nature of days of work.
obligation. (Fraud, prescription, 2) Obligations, which have for their object
remission, illegality, res judicata, non- the accomplishment of work by
performance of suspensive condition) metrical units.
 Defenses personal to, or w/c pertain to 3) Obligations, which have for their
share of debtor sued. (insanity, nature, are susceptible of partial
incapacity, mistake, violence, minority) performance.
 Defenses personal to other solidary In Negative obligations: Character of prestation
debtors. determines divisibility/indivisibility.
Ex. Indivisible- forbearance is continuous
Section 5- Divisible and Indivisible Obligations Divisible- forbearance not continuous
o Divisible obligation- 1 the object of w/c, Note: Personal obligations are generally
in its delivery/performance, is capable indivisible, except the ones stated on Art. 1225.
to partial fulfillment.
o Indivisible obligation- 1 the object of Section 6- Obligation with a penal clause
w/c, in its delivery/performance, is NOT -Is an obligation w/ an
capable to partial fulfillment. accessory undertaking to pay a previously
Determining if obligation is divisible/ indivisible stipulated indemnity in case of breach.
depends on intention of parties; but if, object is o Principal obligation- one w/c can stand
physically indivisible, then it is deemed an alone, doesn’t depend its validity on
indivisible obligation despite the intention. another obligation.
Kinds of division: o Accessory obligation- one w/c is
 Qualitative division-based on quantity attached in a principal obligation.
 Quantitative division-based on quality Penal clause: An accessory undertaking attached
 Ideal/ Intellectual division-exists only in to an obligation to assumer greater liability in
the minds of the parties case of breach.
Kinds of indivisibility: Purposes of penal clause:
 Legal indivisibility- declared by law 1. To insure performance by creating an
 Conventional indivisibility- declared by will effective deterrent against breach.
of parties 2. To substitute penalty for the indemnity for
 Natural indivisibility- nature of object damages (reparation).
doesn’t admit division 3. To punish debtor for non-fulfillment of
obligation (punishment).
Effect of non-compliance by a debtor in a joint Penal clause vs. Condition
indivisible obligation: Constitutes an xxx
Obligation is converted into one for obligation
damages, not rescission/ specific performance Demandable Never Demandable
since there is no cause of action against other
willing debtors.
Kinds of Penal clause: Extinguishment of obligations
1.) As to origin: Causes of extinguishment of obligation:
 Legal – provided by law. (1.) Payment/ performance
 Conventional- provided by parties. (2.) Loss of thing due
2.) As to purpose: (3.) Condonation/ remission of debt
 Compensatory- when penalty (4.) Confusion/ merger of rights
substitutes damage. (5.) Novation
 Punitive- when penalty is imposed for (6.) Death in obligation for service
punishment. (7.) Mutual Desistance/ withdrawal
3.) As to effect: (8.) Arrival of resolutory period.
 Subsidiary- when only penalty can be (9.) Compromise
enforced. (10.) Impossibility of fulfillment
 Joint- when penalty and principal (11.) Happening of a fortuitous event
obligation can be enforced.
General rule: Penalty substitutes damage and Section 1- Payment/ Performance
interest. Proof of actual damage suffered is not -Is the delivery of money, to give, to do
necessary. or not to do.
Debt is considered paid when:
Creditor may recover damages, w/ penalty: o There is complete performance.
A. When stipulated by parties o The very prestation due must be
B. When obligor refuses to pay penalty, in delivered/ performed.
w/c case creditor may recover legal EXCEPTIONS:
interest thereon. 1.) Recovery of obligor allowed when
C. When obligor is guilty of fraud in the there is substantial performance and
fulfillment of the obligation. obligor is in good faith. (Doctrine of
PENALTY substantial performance)
 It is enforced only when demandable; if 2.) If payment is incomplete, creditor may
there is breach or is contrary to a valid reject it, in case of acceptance,
contract. Proof of actual damage not obligation is extinguished (Principle of
needed. Estoppel)
 May be reduced by court if it is (1)  Obligee is aware of incompleteness
iniquitous/ unconscionable, or in case  He accepts performance w/o
there is (2) partial/ irregular performance. objection.
 It doesn’t substitute for performance Creditor is bound to accept payment from the ff:
unless right has been expressly given to  Debtor
debtor.  Anyone having interest in the obligation
 It is presumed subsidiary. Creditor can’t  3rd person w/ no interest, but there is
demand performance and penalty at the stipulation that he can make payment
same time; remedies are alternative, Note: creditor may refuse payment of 3 rd person
unless stated as joint penal clause giving for personal reasons.
right to the creditor. Effect of payment by 3rd person:
 On Joint penal clause, it is enough that 1. Made w/o knowledge/ against will of
right has been clearly granted to creditor, debtor- recovery from debtor only
implied grant is sufficient. insofar as payment benefitted the
latter.
Effect Of Nullity Of Nullity Of 2. Made w/ knowledge of debtor- payer
Principal Penal Clause: has right of reimbursement &
obligation: subrogation to the accessory obligation
Obligation VOID VALID such as mortgage, guaranty or penalty.
Penal Clause VALID VOID
If nullity is due to debtor: penalty may be
enforced.
 Subrogation vs. Reimbursement
3rd person Has only right to
acquires creditor’s be refunded
right, plus
reimbursement
No extinction of Extinguishment of
obligation obligation
If 3rd person doesn’t intend to be reimbursed:
It is deemed as donation, w/c requires
debtor’s consent to be valid, but if creditor
accepts payment, it is as valid as to him and
payer.

General rule: In obligation to give, payment by