CHAPTER 4, SEC. 4 (Arts. 1275-1277)

CHAPTER 4, SEC. 4 – Confusion or Merger (Articles 12751277!

SECTI ON 4 -CONFUSI ON OR MERGER ( Ar t s .12751277)

STUDYGUI DE : 1.

"efine confusion or #erger.

$t is t%e #eeting #eeting in one &erson &erson of t%e 'ulities 'ulities of cre)it cre)itor or n) )e*tor )e*tor +it% res&ect to t%e s#e o*ligtion. (Art. 1275) 

2.

%t re t%e re'uisites of confusion(a) $t #ust te &lce *et+een t%e &rinci&l )e*tor n) cre)itor/ n) (b) $t #ust *e co#&lete.

Example0 Example0 D o+es C P1, ei)ence) *3  negoti*le &ro#issor3 note in four of C. C in)orse) t%e note to E +%o, in turn, in)orse) it to F. o+ F *oug%t goo)s fro# t%e store of D. $nste) $nste) of &3ing cs%, F ust in)orse) t%e note to D. T%e result is t%t D, +%o D, +%o is t%e &rinci&l )e*tor un)er t%e &ro#issor3 note, lso *eco#es t%e cre)itor un)er t%e si) note/ in ot%er +or)s, D o+es %i#self. Conse'uentl3, %is o*ligtion is e6tinguis%e). 3.

%t is t%e effect of #erger in t%e &erson of t%e &rinci&l )e*tor or cre)itor(Art. 1276, par. 1) 

$t e6tinguis%es e6tinguis%es t%e &rinci&l o*ligtion.

$t *enefits t%e gurntors *ecuse t%e ccessor3 ccessor3 o*ligtion of gurnt3 is lso e6tinguis%e). “Accessory follows the principal.” 

Example 0 Example 0 D o+es C P1, +it% G s gurntor. C ssigns %is cre)it to E. E ssigns t%e cre)it to F. F ssigns t%e cre)it to D. D’s o*ligtion is e6tinguis%e), n) G is t%en relese) fro# %is o*ligtion s gurntor. 4.

%t is t%e effect of #erger in t%e &erson of t%e gurntor- (Art. 1276, par. 2) 

$t e6tinguis%es t%e gurnt3 *ut lees t%e &rinci&l o*ligtion in force. 66


Example 0 Example 0 D o+es C P1, +it% G s gurntor. C ssigns %is cre)it to E. E ssigns t%e cre)it to F. F ssigns t%e cre)it to G. Here, G *eco#es t%e ne+ cre)itor of D. $n t%is cse, cse, t%e contr contrct ct of gurn gurnt3 t3 is e6ting e6tinguis uis%e). %e). Ho+ee Ho+eerr, D’s o*ligtion to &3 t%e &rinci&l o*ligtion su*sists. G no+, s t%e ne+ cre)itor, cn )e#n) &3#ent of t%e P1, fro# D. 5.

%t is t%e effect of confusion in  oint o*ligtion- (Art. 1277)

Confusion +ill e6tinguis%  oint o*ligtion onl3 +it% res&ect to t%e s%re of t%e cre)itor or )e*tor in +%o# t%e #erger tes &lce. Example 0 Example 0 D1 n) D2 ointl3 D2 ointl3 o+e C P1,. $f C ssigns t%e entire cre)it to D1, D1’s s%re is e6tinguis%e), *ut D2’s s%re re#ins. $n ot%er +or)s, D2 +ill D2 +ill still o+e C t%e su# of P5,. $n  oint o*ligtion, t%e )e*ts re )istinct n) se&rte fro# ec% ot%er. ot%er. 6.

%t is t%e effect of confusion in  soli)r3 o*ligtion-

Merger in t%e &erson of one of t%e soli)r3 )e*tors s%ll e6tinguis% e6tinguis% t%e entire o*ligtion, *ecuse it is lso  #erger in t%e ot%er soli)r3 )e*tors. (Art. 1215) Ho+eer, t%e soli)r3 )e*tor (in +%ose &erson t%e #erger too &lce! #3 cli# cli# rei#*ur rei#*urse# se#ent ent fro# %is co)e*t co)e*tors ors for t%e s%res s%res +%ic% +%ic% corres corres&on) &on) to t%e#. t%e#. (Art. 1217, par. 2) Example Example 0 Purs Pursun untt to  &ro &ro#i #iss ssor or33 note note,, D1 n) D2 re re soli soli)r )rilil33 li*le li*le to C for P1,. C en)orse) t%e note to E. E en)orse) t%e note to F. F en)orse) t%e note *c *c to D1. T%e o*ligtion o*ligtion %ere %ere is totll3 totll3 e6tinguis e6tinguis%e). %e). Ho+eer Ho+eer, D1 %s t%e rig%t to &rocee) &rocee) ginst ginst D2, n) D2, n) collect collect P5, *3 +3 of rei#*urse#ent rei#*urse#ent *ecuse it is s if D1 &i) t%e entire )e*t.

APPLI CATI ON/PROBLEMS: n 8nu 8nur3 r3 9, 212, 212, Prnc Prncer er *orr *orro+ o+e) e) P2 P2, ,  fro# fro# :i6e :i6en. n. Ru)o Ru)olflf gurntee) t%t if Prncer is not *le to &3 %is o*ligtion on 8nur3 9, 219, Ru)olf +ill ns+er for t%e entire o*ligtion of P2, to :i6en. n 8une 12, 212, :i6en 1.

67


ssigne) ssigne) %is cre)it to "onl). n August August 15, 212, "onl) ssigne) ssigne) t%e cre)it to ;lori. ;lori. n oe#* oe#*er er 12, 212, 212, ;lori ;lori ssigne ssigne)) t%e cre)it cre)it to Ru)olf. Ru)olf. n 8nur 8nur33 9, 219, 219, Ru)olf +nts to collect t%e P2, fro# Prncer. Prncer. Prncer Prncer, %o+eer, %o+eer, refuses to &3. Prncer lleges t%t +%en t%e cre)it +s en)orse) to t%e gurntor of t%e o*ligtion, Ru)olf, Ru)olf, t%is co#&lete co#&letel3 l3 e6tinguis e6tinguis%e) %e) t%e o*ligt o*ligtion ion of Prnce Prncerr. "o 3ou gree gree +it% Prncer
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CHAPTER 4, SEC. 4 (Arts. 1275-1277)

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