Reason or Basis for Confusion

1. The law treats confusion or merger as a

mode of extinguishing obligations because if
debtor is his own creditor, enforcement of
the obligation becomes absurd since a person
cannot claim payment from himself.
2. Furthermore, when there is a confusion of
rights, the purposes for which the obligation
may have been created are deemed realized.

Requisites of Confusion
1. It must take place between the principal
debtor and creditor; and
2. It must be complete.
EXAMPLES:
1. D owes P1,000.00, for which D executed a
negotiable promissory note in favor of C. C
indorsed the note to E who, in turn, indorsed it
to F. Now F bought goods from the store of D.
Instead of paying cash, F indorsed the
promissory note to D.
Here, D owes himself. Consequently, his
obligation is extinguished by merger.
2. X and Y are the heirs of Z. In his will,
Z gave to X a parcel of land in usufruct
for ten years. The naked ownership to the
same parcel was given to Y. Later, Y sold
his interest in the land to X.
In this case, the usufruct is
naturally extinguished and X will now
have full ownership over the land.
3. D borrowed money from C. As
security, D mortgaged his land.
Subsequently, D sold the land to C.
In this case, the mortgage is
extinguished, but the obligation
subsists. The extinguishment of the
accessory obligation does not carry
with that of the principal obligation.

ART. 1276. Merger which takes
place in the person of the principal
debtor or creditor benefits the
guarantors.
Confusion which takes place
in the person of any of the latter
does not extinguish the obligation.
Effect of merger in the person of
principal debtor or creditor
Merger in the person of the
principal debtor or creditor extinguishes
the obligation. Hence, the accessory
obligation of guaranty is also
extinguished in accordance with the
principle that the accessory follows the
principal.
Effect of merger in the person of
principal debtor or creditor
Merger in the person of the
principal debtor or creditor
extinguishes the obligation. Hence,
the accessory obligation of guaranty
is also extinguished in accordance
with the principle that the accessory
follows the principal.
Example:
D is indebted to C with G as
guarantor. The merger of the characters
of debtor and creditor in D shall free G
from liability as guarantor.
Similarity, merger which takes place
in the person of C benefits G because the
extinction of the principal obligation
carries with it that of the accessory
obligation of guaranty.

Effect of merger in the person of
guarantor
The extinguishment of the
accessory obligation does not carry
with it that of the principal
obligation. Consequently, merger
which takes place in the person of the
guarantor, while it extinguishes the
guaranty, leaves the principal
obligation in force.

Example:
Suppose, in the example above, C
assigns his credit to E, who, in turn,
assigns the credit to G, the guarantor.
In this case, the contract of guaranty is
extinguished. However Ds obligation to
pay the principal obligation subsists. G
now, as the new creditor, can demand
payment from D.
ART. 1277. Confusion does
not extinguish a joint
obligation except as regards
the share corresponding to
the creditor or debtor in
whom the two characters
concur.
Confusion in a joint obligation.
In a joint obligation, there are as many
debts as there are debtors and as many credits
as there are creditors, the debts and/ or credits
being considered distinct and separate from
one another.
Each debtor has his own creditor to whom
he is liable and confusion taking place in the
person of any debtor or creditor does not affect
the others. In other words, the confusion will
extinguish only the share corresponding to the
creditor or debtor in whom the two characters
concur.
Example:
A, B and C are jointly liable to D in the
amount of P9,000 evidenced by a negotiable
promissory note. D indorsed the note to E,
who, in turn indorsed to A.
In this case, As share in the obligation is
extinguished because of confusion in his
person. However, the indebtedness of B and C
in the amount of P3,000 each remains, because
as to them there is no confusion.
Consequently, B and C would be liable to A,
the new creditor, P3,000 each.


Confusion in a solidary obligation.
Merger in the person of one of the solidary
debtors shall extinguish the entire obligation
because it is also a merger in the other soidary
debtors.
Remember that in a solidary obligation
there is only one obligation and every debtor is
individually responsible for the payment of the
whole obligation. He who makes payment may
claim reimbursement from his co- debtors for
the shares which correspond to them.
Example:
In the example given, if the obligation of A,
B, and C is solidary, the indorsement to A
extinguishes the entire obligation of P9,000. A
can demand reimbursement from B and C.
Here, the basis of the right of A is not the
original obligation which has been extinguished
by the confusion which takes place in his person
but the confusion itself. It is as if A paid the
entire debt. He can, therefore, collect the
proportionate shares belonging to B and C on an
implied contract of reimbursement.
GROUP 3
Romar Kevin Ruiz
Jayzon Lagadon
Beverly Joy Sebastian
Elhadel Tabernero
Clarissa Lacuesta
Fritz Anne Ruiz
Shaira Madamba