Section 4 – Joint and Solidary Obligations

ART. 1207. The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation requires solidarity. (1137a)

ART. 1208. If from the law, or the nature or the wording of the obligations to which the preceding article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many equal shares as there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court governing the multiplicity of suits. (1138a)

Joint Obligation –

It is an obligation where there is a concurrence of two or more debtors or two or more creditors or of several debtors and creditors, by virtue of which each of the debtors is liable for a proportionate part of the credit.

Example of different instances

1) A, B, and C borrowed P9, 000 to D. The presumption is that A, B and C are jointly liable. D can demand only P3, 000 from each or a total of P9, 000.

2) A borrowed from B, C and D P9, 000. There is one debtor and three creditors. Each creditor can demand only P3, 000 from A.

3) A and B are liable to C and D for P9, 000. There are two debtors and two creditors. Each creditor can demand only P4, 500 from each debtor.

SOLIDARY OBLIGATION

There are solidary liability when

1) The obligation expressly so states, or

2) The law requires solidarity or

3) The nature of the obligation requires solidarity.

Kinds of Solidary Obligation

1. Passive – solidarity on the part of the debtors, where anyone of them can be made liable for the fulfillment of the entire obligation.

Example – A and B are solidary debtors of C in the amount of P 10, 000

2. Active – solidarity on the part of the creditors, where anyone of them can demand the fulfillment of the entire obligation.

Example – A is liable to B and C for the amount of P10, 000. B and C are solidary creditors.

3. Mixed Solidarity – solidarity on the part of the debtors and creditors where each one of the debtors is liable to render and each one of the creditors has a right to demand, entire compliance with the obligation.

Example – A and B are solidarity debtors to C and D, solidary creditors in the amount of P 10, 000.

Solidarity not presumed The presumption, where there are two or more persons in the

same obligation, is that it is joint. The reason is that solidary obligations are very burdensome for they create unusual rights and liabilities. Solidarity between debtors increases their responsibility while solidarity between creditors presuming that they are bound jointly and not solidarily.

ART. 1209. If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the others shall not be liable for his share.

Indivisible Joint Obligation – The object is indivisible and the T/E between the parties are

merely proportionately liable.

Example – A and B are jointly liable to give C a particular car. The obligation

is joint but since the object is indivisible, the creditor must proceed against al the joint debtor. If any of the joint debtors be insolvent, the others shall not be liable for others.

ART. 1210. The indivisibility of an obligation does not necessarily give rise t solidarity. Nor does solidarity of itself imply indivisibility. (n)

Indivisibility as Distinguished from Solidarity

Indivisibility refers to the subject matter while solidarity refers to the Tie between the parties. Examples:

1. Joint divisible obligation – A and B are jointly liable to C for P10, 000.

2. Joint indivisible obligation – A and B are jointly liable to give C their car.

3. Solidary divisible obligation – A and B are solidarily liable to give C P10, 000.

4. Solidary indivisible obligation – A and B are solidarily liable to give C their car.

ART. 1211. Solidarity may exist although the creditors

and the debtors may not be bound in the same manner and by the same periods and conditions.

The solidary character of the obligation is not

destroyed even if the creditors and debtors are bound

by different terms and conditions. The solidarity is still

preserved by recognizing in the creditor the power of

claiming from any or all debtors the payment of the

entire obligation.

Example:

A and B solidarily bound themselves to pay a total of P10,

000 to C, and D and E to the following conditions. C’s share

will be due at the end of the year; D will get his share only

after he passes the CPA exams and E will get his share only

after he painted the house of C.

ART. 1212. Each one of the solidary creditors may do whatever may be useful to the others, but not anything which may be prejudicial to the latter. (1141a)

ART. 1213. A solidary creditor cannot assign his rights without the consent of the others.

Solidary Creditors May Do Useful Act; Not Prejudicial Acts –

A solidary creditor may do any act beneficial or useful to the others but he cannot act prejudicial to them.

Example of Beneficial Acts – To interrupt the running of prescription, the act of one solidary

creditor in making a judicial demand upon any of the solidary debtors is sufficient. (Art. 1155, NCC)

Example of Prejudicial Acts – Should not be performed, otherwise, there will be liability for

damages. However, in the case of remission or condonation, the solidary creditor is allowed to so remit, and the obligation is extinguished.

Art. 1214. The debtor may pay any one of the solidary creditors but if any demand, judicial or extrajudicial, has been made by one of them, payment should be made to him.

Payment to Any of the Solidary Creditors

The rule is that the debtor may pay any one of the creditors. But when a demand is made by any of the creditors, payment should be made to him who made the demand, judicially or extra-judicially.

Example

A is liable to B and C P5, 000. A may pay either B or C But if B made a demand then payment should only be made to him. If A paid C, B is still entitled to his share from A in case C does not turn over to B his share.

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 prejudice to the provisions of article 1219.

The creditor who may have executed any of these acts, as well as he who collects the debt, shall be liable to the others for the share in the obligation corresponding to them.

Liability of Solidary Creditor in case of Novation, Compensation, Confusion or Remission –

When a creditor who executed any of these acts, it is logical that he is liable to the other solidary creditors for their corresponding shares considering that such acts are prejudicial to them. (Art. 1212, NCC)

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 of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected. (1144a)

Creditor May Proceed Against Any Solidary Debtor – In a solidary obligation, the creditor may proceed against

any, some or all of the solitary creditors simultaneously so long as it has not been fully collected.

Example

A, B and C solidarily owe D the amount of P9, 000. D can collect from A or B or C alone or from any two of them or all of them simultaneously. If demand is made on A, the latter cannot require D to make a demand also on B and C or to include them as party defendants as D has the right to proceed against any one of them.

ART. 1217. Payment made by one of the soldiery 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 to each. (1145a)

Effects of Payment by a Solidary Debtor –

Payment is one of the ways by which an obligation is

extinguished and consist in the delivery of the thing or

the rendition of the service which is the object of the

obligation.

Example –

A, B and C are solidarily liable to D and E in the

amount of P9, 000 due on Dec. 31. If both A and B

offer to pay D on Dec. 31, the latter may choose

which offer to accept. If A pays the entire amount of

P9, 000 on Dec. 31, the obligation is extinguished.

The payment of A gives him the right of reimbursement

from B and C P3, 000 each with interest from the date

of payment. However, if C is insolvent, both A and B

shall bear the insolvency in proportion to their shares.

ART. 1218. Payment by a solidary debtor shall not entitle in to reimbursement from his co-debtors if such payment is made after the obligation has prescribed or become illegal. (n)

Effect of Payment After Obligation Has Prescribed or Become Illegal –

1. Prescription – is one where one acquires ownership and other rights through the lapse of time in the manner and under the conditions laid down by law.

Example – A and B are solidarily indebted to C in the amount of P 10, 000. The debt prescribed. If A paid the debt, he cannot collect form B his share of the debt. Neither can A can recover from C.

2. Becomes Illegal – A and B are solidarily bound to deliver medical drugs to C. the transaction of such medical drugs were later prohibited by law. Notwithstanding the prohibition, B performed the obligation by delivering the prohibited drugs. B is not anymore entitled to reimbursement from A.

ART. 1219. The remission made by the creditor of the share which affects one of the solidary debtors does not release the latter from his responsibility towards the co-debtors, in case the debt had been totally paid by anyone of them before the remission was effected. (1146a)

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.

Remission by Creditor –

1) If payment if made first, the remission is of no effect. There is no more to remit.

2) If remission is made prior to the payment and payment is made, then there is payment by mistake.

3) If one of the solidary debtors obtained remission on the whole obligation, he is not entitled to reimbursement from his co-debtors because remission is essentially gratuitous.

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 the

payment of damages and interest, without prejudice to

their action against the guilty or negligent debtor.

If through a fortuitous event, the thing is lost or the

performance has become impossible after one of the

solidary debtors has incurred in delay through the judicial

or extrajudicial demand upon him by the creditor, the

provisions of the preceding paragraph shall apply.

(1147a)

Rules in Case thing has Been Lost or Prestation Has Become Impossible –

1. If the thing is lost or has become impossible to

perform through a fortuitous event without the

fault of the debtor, the obligation is extinguished.

Example:

A, B and C are solidarily bound to deliver a

determinate car to D. Without any fault on the part of

any one of the debtors, the car was lost through the

fortuitous event. The obligation is extinguished.

Rules in Case thing has Been Lost or Prestation Has Become Impossible –

2. If in the preceding paragraph, the car was lost through the fault of anyone of the solidary debtors, anyone of them may be held liable by D for the price of the car plus damages. The debtors who did not any fault on the lost of the car have the right to recover from the co-debtor who is at fault.

3. The solidary debtors are likewise liable even if the thing is lost through fortuitous event if the loss occurs after anyone of the solidary debtors has been in delay. The debtors, however who were not in delay have the right to recover from their co-debtors who was responsible due to his delay.

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

the creditor, avail himself of all defenses 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 the

others, he may avail himself thereof only as regards

that part of the debt for which the latter are

responsible.

Defenses available to a Solidary

Debtor – The defenses available to the solidary debtors if the

creditor proceeds against him alone for the payment of

the entire obligation

1. The defenses derived from the nature of the obligation,

such as fraud prescription, remission illegality or absence

of consideration, payment or performance.

Example

A and B are solidarily liable to C in the among to P6, 000. The

entire debt 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.

Defenses available to a Solidary Debtor –

2. Defenses personal to him or pertaining to his

own share, such as minority, insanity and

vitiated consent.

3. Defenses which are personal to others, such as

minority, insanity and vitiated consent.