Chapter 4 Section 6 (Novation) Flashcards
Obligations may be modified by: (1) Changing their ______ or principal conditions; (2) Substituting the person of the _____; (3) _______ a third person in the rights of the creditor.
object, debtor, Subrogating
Novation is:
The total or partial extinction of an obligation through the creation of a new one which substitutes it
Novation is a contract containing two stipulations:
one to extinguish or modify an existing obligation, the other to substitute a new one in its place
T/F: Novation operates as an absolute extinction of an obligation.
False. It does not operate as an absolute but only as a relative extinction of an obligation which is only “modified”
Kinds of Novation:
1.) According to origin a.) Legal b.) Conventional 2.) According to how it is constituted a.) Express b.) Implied 3.) According to extent or effect a.) Total or extinctive b.) Partial or modificatory 4.) According to the subject a.) Real or objective b.) Personal or subjective c.) Mixed
Legal Novation:
takes place by operation of law
Conventional Novation:
takes plae by agreement of the parties
Express Novation:
When it is so declared in unequivocal terms
Implied Novation:
When the old and the new obligations are essentially incompatible with each other
Total or extinctive Novation:
When the old obligation is completely extinguished
Partial or modificatory Novation:
When the old obligation is merely modified, i.e., the change is merely incidental to the main obligation
Real or objective Novation:
When the object or principal conditions of the obligation are changed
Personal or subjective Novation:
When the person of the debtor is substituted and/or when a third person is subrogated in the rights of the creditor
Mixed Novation:
When the object and/or principal conditions of the obligation and the debtor or the creditor, or both the parties, are changed. It’s a combination of real and personal novations
Art. 1292: In order that an obligation may be extinguished by another which substitute the same, it is imperative that it be so declared in _____ terms, or that the old and the new obligations be on every point _____ with each other
unequivocal, incompatible
Requisites of Novation:
1.) Previous valid obligation 2.) Capacity and intention of the parties to modify or extinguish the obligation 3.) The modification or extinguishment of the obligation 4.) The creation of a new valid obligation
T/F: Novation may be presumed.
False. Novation is never presumed. It must be clearly and unmistakable established either by the express agreement of the parties or acts of equivalent import or by the incompatibility of the 2 obligaions with each other in every material respect.
The burden of showing novation is on the party who ____
claims its existence
Choose the correct answer: If two obligations cannot stand together, the (subsequent/first) obligation novates the (subsequent/first).
subsequent, first
Art. 1293: Novation which consists in substituting a new debtor in the place of the original one, may be made even without the ______ or ___________, but not without the ______. Payment by the new debtor gives him the rights mentioned in articles 1236 and 1237
knowledge, against the will of the latter, consent of the creditor
Kinds of Personal Novation:
1.) Substitution (the person of the debtor is substituted) 2.) Subrogation (a third person is subrogated in the rights of the creditor)
Kinds of Substitution (a kind of personal novation)
1.) Expromision (that which takes place when a third person of his own initiative and without the knowledge or against the will of the original debtor assumes the latter’s obligation with the consent of the creditor. It logically requires the consent of the third person and the creditor) 2.) Delegacion (that which takes place when the creditor accepts a third person to take place of the debtor at the instance of the latter. The creditor may withhold approval. In delegacion, all the parties, the old debtor, the new debtor, and the creditor must agree.)
T/F: Creditor’s consent is necessary in both modes of substitution. (State why True/False)
True because the substitution implies a waiver by the creditor of his credit and it may be prejudicial to him. Prejudice in the form of delay in the fulfillment of the obligation or contravention of its tenor, or non-performance thereof by the new debtor, by reason of his financial inability or insolvency.
In expromision, payment by the new debtor gives him the right to ____ under the second paragraph of Art. 1236.
beneficial reimbursement
In delegacion, the new debtor is entitled to ____ and ______ under Art. 1237.
reimbursement, subgrogation
T/F: D (the debtor) tells C (the creditor) that T will pay D’s debt. C agrees. There is delegacion.
False. It does not necessarily mean that there is delegacion. But if D tells C that T will pay his debt and asks C to release him from his obligation, to which C agrees, delegacion results.
T/F: D is the debtor and C is the creditor. T approaches C and tells him that T will pay the debt of D. C agrees. There is expromision.
False. Expromision will exist when there is an agreement that D shall be released from his obligation to C.
Art. 1294: If the substitution is without the knowledge or against the will of the debtor, the new debtor’s insolvency or nonfulfillment of the obligations shall not give rise to __________-
any liability on the part of the original debtor
T/F: D (the debtor) tells C (the creditor) that T will pay D’s debt. C agrees and there is an agreement that D shall be released from his obligation to C. In case of insolvency of T or non-fulfillment by T of his obliation, D will be liable to C.
False. Since this is a case of expromision, D will no longer be liable to C in case of T’s insolvency or non-fulfillment.
Art. 1295: The insolvency of the new debtor, who has been proposed by the original debtor and accepted by the creditor, shall not revive the action of the latter against the original obligor, except when said insolvency was ____________, or ______, when _____.
already existing and of public knowledge, known to the debtor, he delegated his debt
T/F: In delegacion, if the new debtor does not fulfill the obligation because of causes other than insolvency, the old debtor is not liable.
True.
The general rule is that the old debtor is not liable to the creditor in case of the insolvency of the new debtor, with 2 exceptions:
1.) The said insolvency was already existing and of public knowledge (although it was not know to the old debtor) at the time of the delegacion 2.) The insolvency was already existing and known to the debtor (although it was not of public knowledge) at the time of the delegacion
The general rule is that the old debtor is not liable to the creditor in case of the insolvency of the new debtor, with 2 exceptions in order to prevent ____
fraud on the part of the old debtor
Art. 1296: When the principal obligation is extinguished in consequence of a novation, accessory obligations may subsist only insofar as __________
they may benefit third persons who did not give their consent.
Art. 1297: If the new obligation is void, the original one shall ____, unless ___________________________.
subsist, the parties intended that the former relation should be extinguished in any event
T/F: If the new obligation is voidable, novation will take place.
False. If the new obligation is only voidable, novation can take place. If it is not yet annulled, the novation shall take effect. But the moment it is annulled, the novation must be considered as not having taken place, and the origianl one can be enforced, unless the intention of the parties is otherwise.
Art. 1298: The novation is void if the original obligation was void, except when _______________ or when ___________.
annulment may be claimed only by the debtor, ratification validates acts which are voidable
T/F: A novation is void if the original obligation was voidable.
False. If the original obligation was voidable, it is valid until annulled in court.
T/F: A novation is not void if the original obligation was voidable and subsequently validated by ratification.
TRUE
Art. 1299: If the original obligation was subject to a suspensive or resolutory condition, the new obligation shall be _____, unless ______.
under the same condition, it is otherwise stipulated
Art. 1300: Subrogation of a third person in the rights of the creditor is either legal or conventional. The former is _____, except______; the latter must be _____ in order that it may take effect.
not presumed, in cases expressly mentioned in this Code, clearly established
Art. 1301: Conventional subrogation of a third person requires the consent of ____________________
the original parties and of the third person
Art. 1302: It is presumed that there is legal subrogation:
(1)
When a creditor pays __________, even without the debtor’s knowledge;
(2)
When a third person, not interested in the obligation, __________________;
(3)
When, even without the knowledge of the debtor, _______________________, without prejudice to the effects of confusion as to the latter’s share.
another creditor who is preferred, pays with the express or tacit approval of the debtor, a person interested in the fulfillment of the obligation pays
Art. 1303: Subrogation transfers to the person subrogated the credit with all the rights thereto appertaining, either against the debtor or against third person, be they guarantors or possessors of mortgages, subject to _________.
stipulation in a conventional subrogation
Art. 1304: A creditor, ____________-, may exercise his right for the remainder, and he shall be preferred to the person who has been subrogated in his place in virtue of the partial payment of the same credit.
to whom partial payment has been made
