Joint and Several Obligations in Civil Code

Posted on Nov 27, 2024 in Law & Jurisprudence

Joint and Several Obligations: Concept

Partnership

The term commonly used to refer to multi-member obligations is partnership. Among the distinguished joint obligations are:

  • Simple
  • Solidary

A joint obligation (Art. 1138 for divisible bonds and 1139 for indivisible) is a multi-member requirement in which the credit and/or debt is divided into equal parts, corresponding to the number of creditors or debtors. Credit and debts are reputed as distinct from each other.

If several debtors owe an amount to one creditor, the amount is divided equally (1138) unless otherwise stated. Each debtor is responsible only for their share.

Indivisible joint obligations (Art. 1139) are those in which both the creditor(s) and the debtor(s) have to act together.

Under section 1137, the joint obligation is one in which each creditor can claim, on their own, full delivery, and each debtor, if any, should be paid in full, without prejudice to the internal relationship.

In the case of debt, the general rule is multi-member commonwealth, unless stated otherwise in the obligation. Within these, there are two different regimes: divisible or indivisible (Art. 1138 or 1139).

The obligation is solidary, according to 1137, when the parties have so provided.

Regarding the common notes, both with multi-member and obligations in relation to the differences, there is fragmentation of the debt or credit in the commonwealth, while in joint obligations, the creditor may require any debtor to fulfill the entire obligation, but there is a commonwealth in which there is no fragmentation.

Joint Obligations in the Civil Code: Regulation and Effects

Regulation

The first thing to note is that the commonwealth is the rule, as provided in Article 1138 in relation to 1137.

We now have to distinguish the two forms:

  • Indivisible Joint Obligations: In this case, the credit is divided into as many parts as there are debtors. Its legal system is defined by Articles 1139 and 1150, and we must also consider 1169.
  • Divisible Joint Obligations: There is a division of the provision of credit (plurality of creditors) or debit (multiple debtors). Its regime is that of 1138. Each part into which the credit or debt is divided, then in practice, works independently.

Bonds of Solidarity: Solidarity with Creditors and Their Legal Status

We must take into account the external relationship (active and passive) and internal.

Requirements for Solidarity

  • Multiple subjects
  • Property Unit
  • Unique legal relationship to the subjects that have the same cause, and this causes the contents of the benefit to be the same for everyone.
  • What Article 1137 states: that the obligation is solidary.
  • It is possible that it may not constitute solidarity, or also called improper solidarity (Art. 1140).

Improper Solidarity

Improper solidarity provides that for a bond to be solidary, it is not enough that two or more persons are required to make the same provision for the same creditor, but an accidental cause must have been established.

There may be cases in which there is identity of object or benefit, but solidarity is not required. For example, if two debtors are required to pay identical benefits to the same creditor, the performance by one of them waives the other’s obligation to fulfill, and despite this, there is no solidarity.

These assumptions, although two people are required to meet the same service, and performance by one extinguishes the obligation for the other, are not instances of solidarity because there is no cause of action or supportive link between debtors, and are often grouped under the name of improper solidarity.

Solidarity Creditors or Active Solidarity

A pluripersonal requirement is one in which the active part involves two or more creditors, so that any of them can claim the full amount from the debtor and collect the entire debt.

Legal Status of Creditor Solidarity

  • Indistinct Claim, Individual Standing (Art. 1141.1): According to this article, any creditor can individually claim the right to credit and demand full payment of the debt. They can also carry out acts of preservation or defense of the claim.
  • Disposal of the Credit Claim (Art. 1141 in relation to 1143.1): According to Article 1141, one creditor cannot forgive the debt, but according to Art. 1143, debt may be forgiven through novation, compensation, confusion, or remission.

According to Professor Manresa, 1141 is the rule, and the assumptions referred to in 1143.1 would be the exception. This interpretation leads to the exception being so broad that the general rule does not exist or would not apply. Secondly, it leads to the absurd, as it could, for example, allow debt forgiveness but not a deferral, which is illogical.

Professor Diez Picazo argues that these precepts cannot be reconciled because 1141 reflects solidarity in Germanic law and 1143 reflects Roman solidarity. We must follow the Roman law, as our law is more influenced by it.

Professor Lacruz states that Art. 1141 concerns the internal relationship, and Art. 1143 refers to external relations.

Article 1143 mentions novation as an act that any creditor can perform, and it can be subjective (affecting subjects) or objective (related to performance).

Secondly, it mentions remission, which may be total or partial.

Third, compensation occurs when there are other legal relations between the creditor and the debtor.

Fourth, confusion arises when one subject holds the status of both creditor and debtor in the legal relationship.

  • Debtor’s Faculty to Choose Creditor (Art. 1142) (1143 in relation to delay): The debtor is entitled to pay any creditor, and the creditor is required to receive payment. If the debtor incurs in arrears with all creditors, any creditor can claim the full amount, unless there is just cause. Thus, the debtor can fulfill the obligation and be released.
  • Creditor’s Election and Payment Injunction (Art. 1142): If a creditor has filed a lawsuit, the debtor must pay the creditor who has claimed in court. If the debtor pays other creditors, such payments would not be valid.
  • Internal Relation (Art. 1143.2): Each of the solidary creditors may take action against those who received the payment, based on this article, which establishes the action for reimbursement, through which a creditor who claimed the benefit can demand their fair share.

Solidarity Debtors

This is an obligation where there are several debtors, and each debtor is liable to the creditor as if they were the only debtor, by paying in full, without prejudice to the internal relationship.

  • Essential Features:
    • Multiple subjects: a plurality of debtors, but each of them is liable as if they were the only debtor in the obligation.
      • These are very common as they represent a greater guarantee of payment to the creditor.
      • In external relations, each debtor owes the full amount, while in the internal relationship, each debtor is ultimately responsible only for their share.
  • Legal Status of External and Internal Relations
    • Legal Status of the External Relation
      • Indistinct Duty of Joint Debtors (Art. 1145.1): Payment made by one of the joint debtors extinguishes the obligation.
      • Creditor’s Choice (Art. 1144.1 and ius variandi in Art. 1144.2).
      • Notice of Liability (Art. 1147.1 and 1147.2 in relation to 1100).
      • Coverage of Insolvency: Insolvency of one solidary debtor will have no effect on the external relationship.
      • Exceptions Enforceable by Obligor (Art. 1148): Exceptions are defense mechanisms that can be used to stop a judicial claim. They may be personal (inherent to the subject) or real (arising from the nature of the obligation).
      • Amending and Extinguishing Acts (Art. 1143).
    • Legal Status of the Internal Relationship
      • Partial System (Art. 1145.2): Distribution of shares or fees, but there is no mention that the shares are equal.
        • Action for Reimbursement (Art. 1145.2):
          • Basis: Unjust enrichment of debtors who have not paid yet and are released due to payment by another debtor.
          • Nature: This is a subrogation action because it places the debtor who paid in the legal position of the creditor.
          • Requirements for Exercising this Action: Payment and regularity. Payment is the accurate fulfillment of the benefit at the indicated time, place, and amount. If the debtor pays correctly, they can request reimbursement.
          • Insolvency (Art. 1145.3): In this case, there is mutual coverage for insolvency. The lack of compliance with the obligation due to the insolvency of one obligor will be covered by the co-debtors, in proportion to the debt of each.
            • Amending or Extinguishing Acts (Art. 1143.1-1146):
              • Transfer or Removal (Art. 1146):
                • Remission of the total debt to all debtors extinguishes the internal relationship.
                • Remission to all debtors of only a part:
                  • The external relationship is partially terminated.
                  • The debt is redistributed internally.
                • Remission to one debtor of the entire debt:
                  • External relations: The link with that debtor is broken.
                  • Internal relations: Not affected by the remission.
                • Remission to one of the debtors of only their share of the debt:
                  • Internal relations: The creditor can still claim the forgiven share from the other debtors.
              • Novation
              • Confusion has the same effect as payment. The debtor to whom confusion has occurred can exercise the action for reimbursement as if they had paid the debt.
              • Compensation
              • Delay: In the internal relationship, only the debtor who has not paid within the time limit is in default. If another debtor pays, they must pay the entire debt and damages. This action will be exercised through reimbursement and will force the debtor in default to pay their share and damages.
    • Interruption of the Limitation of Action (Art. 1974.1): The interruption of the limitation of actions in joint and several liabilities equally benefits all creditors and debtors.