Section 4. Joint and Solidary Obligations

In case of concurrence of two or more creditors or two or more debtors in one obligation, the presumption is that the obligation is joint, and not solidary. 

• Single or Individual Obligation – One debtor and one creditor.

• Collective Obligation – two or more debtors and two or more creditors

• Joint – entire obligation is to be paid or performed proportionately by the debtors; 

• Solidary – each one of the debtors are obliged to pay the entire obligation, each one of the creditors has the right to demand from any of the debtors, the fulfillment of the entire obligation; 

• Passive Solidarity – solidarity on the part of the DEBTORS 

• Active Solidarity – solidarity on the part of the CREDITORS.  

• Solidarity should be expressed through law, stipulation, and the nature of obligation.  

• When the obligation is ambiguous, it must be considered as a joint obligation. 

Example: 

Julie and Krizia are joint debtors of Ejay, Set, and Axial, who are solidary creditors to an amount of Ph 5,000.

Ejay may have made Krizia and Julie pay him 2,500 each. Given that they are acknowledged to be joint creditors, any of them is eligible to receive the whole amount owed by each debtor.

Other words used to indicate Solidarity

• severally, jointly and/or severally

• solidaria

• in solidum

• solidarily

• together and/or separately

• individually and/or collectively

• juntos o suparadamente

• “I promise to pay” signed by two or more persons

• “individually and jointly”

• “joint and several’’,“several.’

• This provision speaks of Joint Divisible Obligation.

• There is a presumption that an obligation is joint when several creditors or multiple debtors concur in one and the same obligation.

• Each creditor will only be able to request payment of his fair share of the debt.

• Only each debtor's fair share of the debt may be demanded of him or her.

• The debts or credits must be treated separately from one another.

Example of a Joint Obligation:

• Ana and Beah are joint debtors of Carl to the amount of P1,000,000. Carl can demand only P500,000 from Ana and only P500,000 from Beah.

• Aldrin and Brix are joint debtors of Cyrus, Daniel, Epoy, and Frel who are joint creditors to the amount of P1,000,000. Cyrus may demand only P125,000 from Aldrin and P125,000 from Brix. Daniel, Epoy, and Frel have the same rights as Cyrus.

Other words for Joint Obligations

• mancum;

• mancomunada;

• mancomunadamente;

• pro rata;

• proportionately, jointly

• conjoint;

• “we promise to pay” signed by two or more persons.

Characteristics of Joint Indivisible Obligations

• The obligation is joint but since the object is indivisible, the creditor must proceed against all the joint debtors, for compliance is possible only if all the joint debtors would act together.

• Demand must therefore be made on all the joint debtors.

• If there are joint creditors, delivery must be made to all and not merely to one, unless that one be specifically authorized by the others.

• Joint creditor is allowed to renounce his proportionate credit.

Example: 

Benj and Kyle are jointly liable to give Blanca a House valued 5,000,000 pesos.

INDIVISIBILITY

• Refers to the prestation that is not capable of partial performance.

• Can exists even if there is only one debtor and one creditor.

• Both the debtor and the creditor are not bound to fulfill the obligation and demand fulfillment of the obligation more than their share.

• If there is a breach of the obligation, the indivisible obligation is changed into an indemnity for damages, terminating its indivisible nature.

• Only the debtors guilty of breaching of the obligation are liable for damages.

• The other debtors are not liable for the share of an insolvent debtor.

SOLIDARITY

• Refers to the Juridical tie or Legal tie.

• Can exists only if there are two or more debtors or two or more creditors.

• Both the debtor and the creditor are bound to fulfill and demand fulfillment of the entire obligation.

• If there is a breach of the obligation, the solidary character of the obligation remains.

• All the debtors are liable for damages, even if one of them breaches the obligation.

• The other debtors who are solvent are proportionately liable for the share of an insolvent debtor.

Even though they are subject to differing terms and conditions, the debtors' solidarity remains unaffected.

The terms and conditions may be enforced at various points in time. While those that are still excessive must be waited for, those that have matured obligations can be enforced. Even though a specific obligation chargeable to a specific debtor is not yet due, enforcement can be initiated against any of the solidary debtors. Despite being liable to the other co-debtors, he will be held responsible for all payments that are past due.

Example:

Yuji, Megumi, and Nobara  got a loan of P150,000 from Gojo. They signed a promissory note solidarily binding themselves to pay Gojo under the following terms:

• Yuji will pay P50,000 by installment at the rate of 10,000 a month, to start in March

• Megumi will pay P50,000 in April

• Nobara will pay P50,000 if Gojo wins the fight against Sukuna. 

(a) In March, Gojo can demand only P 10,000 from Yuji. Gojo can also make a demand from Megumi and Nobara for the P 10,000 share corresponding to Yuji. But Gojo cannot make a demand for the shares of Megumi and Nobara which are not yet due and demandable.

(b) In April, Gojo is entitled to collect from any of Solidary debtors the share corresponding to Megumi which is P 50,000 and Yuji, P 10,000 or 20,000, if not yet paid any installment. The share of Nobara is not yet recoverable.

(c) If Gojo won the fight against Sukuna, the obligation of Nobara to P 50,000 arises. P 50,000 can be demanded from any solidary debtors. Gojo is also entitled to recover all amounts which are already due and demandable and unpaid pertaining to the shares of Yuji and Megumi.

• Each one of the Solidary creditors is benefited by the useful acts of any one of them.

• If a solidary creditor performs an act which is not fair to his co-creditors, the act may have valid legal effects or the obligation of the debtor due to them may be extinguished, but the performing creditor shall be liable to his co-creditors.

Assign – transfer of right  

Any payment made to the assignee by the debtor does not discharge the obligation, and the assignee does not acquire the status of a solidary creditor. He is regarded as an outsider, and his actions do not bond the solidarity.

DOCTRINE OF MUTUAL AGENCY - In solidary obligations, the act of one is the act of the others.  Exceptions to the doctrine: 

• Article 1212 – a creditor may not perform an act prejudicial to other creditors 

• Article 1213 – a creditor cannot transfer his right without consent

•  Any one of the solidary creditors may be paid by the debtor. When one of the solidary creditors accepts such payment, the debt becomes extinguished. 

• In order to clear up any misunderstandings regarding the payment of the obligation, the debtor is simply necessary to make payment to the demanding creditor, and such payment is sufficient to bring the obligation to an end.

• The first demand must be given priority if there are two or more claims from the other creditors.

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.

NOVATION – obligations are modified by: 

• Changing their object or principal conditions; 

• Substituting the person of the debtor; and

• Subrogating (placing) a third person in the rights of the creditor. [Art. 1291, CC]

Example:

Gon and Killua are solidarily liable to Hisoka and Illumi, solidary creditors, for the payment of P500,000. Gon and Hisoka agreed that instead of paying P500,000, Gon will just need to clean and paint Hisoka House ( including costs of the points to be used). Here the solidary obligation of paying P500,000 is extinguished but a new one, that of painting Hisoka’s house, has arisen. If Killua did not consent to the novation, Killua will not be bound to Hisoka and Illumi in any way, and moreover, will not be obliged to give Gon anything except insofar as Killua has been benefited. On the other hand, Only Hisoka will be allowed to prejudice his co-creditor Illumi, so Hisoka must reimburse Illumi for P250,000 (which is really Illumi share of the credit).

 COMPENSATION – takes place when two persons, in their own right, become creditors and debtors of each other. [Art. 1278, CC] 

• Compensation may be total or partial, depending upon the amount involved. 

• Total Compensation will automatically extinguish the obligation.

Example:

Rico and Ejay are solidary debtors of Gigi and maricel to the amount of P600,000. But Gigi owes Ejay P600,000 on account of a different obligation. Here we have a case of total compensation. But Rico should not benefit completely since it was Ejay’s credit that was used to compensate. So Rico owes Ejay P300,000(his share of the debt). On the other hand, Maricel should not prejudice, so Maricel can recover P300,000 from Gigi.

• Axziel and Alexa are solidary debtors of Allen to the amount of P100,000. But Allen is indebted to Axziel  for P25,000. This is a partial compensation, and therefore the solidary obligation amounting to P75,000 still subsists. 

CONFUSION – takes place when the characters of creditor and debtor are merged in the same person. 

• Set pays his debt to Julie with a check payable to “cash”. Julie paid his debt to Abby with the same check. Abby paid his debt to Set, with the same check Set issued to Julie. Set becomes paid by his own check. He becomes the debtor and the creditor of himself at the same time.

REMISSION – or waiver is that act of liberty whereby a creditor condones the obligation of the debtor, that where the creditor tells the debtor to “forget about the whole thing”.

When they have the effect of canceling the debt or obligation that is owed to each of them, these four methods of extinguishing obligations are acts detrimental to the other solidary co-creditors. 

The co-creditors' only option is to hold the person who committed any of those acts accountable for the shares that correspond to each of his co-creditors (according to their internal agreement).

• When there is passive solidarity, the creditor can proceed against: 

• Any of the solidary debtors;

• Some of the solidary debtors; 

•  All of the solidary debtors, simultaneously. 

Extrajudicial demands - If the co-debtor who was initially compelled to meet the obligation did not do so, subsequent demands on the other co-debtors will not be prevented by the first demand

• This is not applicable to a joint obligation.

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

In this article, there are 3 situation that rises after one of the solidary debtor pays the whole obligation to the creditor.

• Obligations between debtor and creditor
  a. Obligation are extinguished
  b. Creditor has the power to choose, If 2 debtor offers to pay
  
  

• Among the solidary debtor
  a. Paying debtor can ask or is entitled for reimbursement from other solidary debtor
  b. Other solidary debtors shall proportionately borne the share of the co-debtor that is insolvent.
  
  

• Among the solidary creditor
  a. Receiving creditor is liable to the others for giving the share if co-creditor.

“Payment” - delivery of the thing or rendering the performance or service which is the prestation of the obligation

“Interest” - compensation for using one’s money through borrowing.

There will be no reimbursement if: 

• Obligation prescribed - no demand from creditor among the said period

• Obligation becomes illegal - a law states that the prestation of the obligation is illegal
  
  

“Prescribed” or “Prescription” means rights and actions are lost by prescription.

• If one of the solidary debtors are remitted, the remitted debtor are still liable towards his responsibility on his co-debtors before the remission.

• payment before remission = there is still an obligation

• remission then payment = apply solutio indebiti 

• no payment = still liable for insolvency of co-debtor

“Remission” - forgiveness or condonation of an offense or injury.

Example:

• Payment before remission:
  
  

Hanni, Danielle, and Minji has solidary debt to Hybe P 1,500.00. Hanni paid the entire obligation then Hybe remitted the share of Danielle. Hanni could collect 500.00 each from Danielle and Minji even if Hybe have remitted the share of Danielle.

• Remission before Payment:
  
  

Hanni, Danielle, and Minji has solidary debt to Hybe P 1,500.00. Hybe remitted the share of Danielle.Thereafter, Hanni paid the entire obligation. Hanni could collect P500.00 from Hyein only but not on Danielle. However, Hanni may ask Hybe to reimburse the P 500.00 which is the supposed-to-be share of C. 

• No payment:
  
  

Hanni, Danielle, and Minji has solidary debt to Hybe P 1,500.00. Hybe remitted the share of Danielle. Hanni and Minji became insolvent to pay the obligation. Danielle even her share is remitted she should pay for for Hanni and Minji. 

This article simply states that a solidary debtor who obtained a remission of the whole obligation doesn’t entitled to a reimbursement from his co-debtor because the debtor didn’t pay anything out of the obligation.

• No payment of obligation = No reimbursement

• The remission of the obligation being a gratuitous act. 

There are 3 conditions when the prestation is lost or it is impossible to provide: 

• Without the fault of the debtor - obligation extinguished

• With fault of the debtor - all are liable without prejudice

• fortuitous event/lost/impossible due to delay through judicial demand - all are liable
  
  

•  The obligation to deliver the prestation became an obligation to pay the indemnity in such cases that there is loss or impossibility of the performance

“Prejudice” - harm or injury that results or may result from some action or judgment.

The Solidary debtor has the following defenses:

• Defense arising from the nature of the obligation 

• If the obligation is settled through any legal means, nullified, or rendered ineffective, the debtor can raise the defense of settling, nullifying or rendering the ineffectiveness of  the obligation, therefore a complete defense.

• Defenses which are personal to him or which pertains to his own share alone 

• This includes the minority, insanity, mistaken or any reasons personal to himself alone at the time the obligation was effective, therefore a complete defense; 

• Also when the debtor in subject is tied to a suspensive condition which he can raise as a partial defense in fulfilling his obligations.

• Defenses personal to other solidary debtors

• Pertaining to the former defense before this, the debtor with a personal problem doesn’t free him from his liabilities, and the other solidary debtors are not liable to his liabilities.