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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Article 1291 of the New Civil Code provides that obligations may be modified by: (1) Changing their object or principal conditions; (2) Substituting the person of the debtor; (3) Subrogating a third person in the rights of the creditor.
Novation is one of the means to extinguish an obligation where a subsequent obligation extinguishes or modifies the first. It is a relative extinguishment whereby a new obligation is created in lieu of the old. But in order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms, or that the old and new obligations be on every point incompatible with each other. (Benedicio and Mascariñas v. Bautista, G.R. No. 242087, December 7, 2021)
Article 1291 of the New Civil Code provides:
“Obligations may be modified by:
(1) Changing their object or principal conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the creditor.”
On the second type of novation, by substituting the person of the debtor, law and jurisprudence recognize two forms: (1) expromision and (2) delegacion. In expromision, the initiative for the change does not come from the debtor and may even be made without his knowledge, since it consists in a third person assuming the obligation. As such, it only requires the consent of the third person and the creditor.
In delegacion, the debtor offers and the creditor accepts a third person who consents to the substitution and assumes the obligation. Hence, the intervention and the consent of these three persons are necessary.
But in either mode of substitution, the consent of the creditor is indispensable. After all, substitution of one debtor for another may delay or prevent the fulfillment of the obligation by reason of the financial inability or insolvency of the new debtor. It is only just, therefore, that the creditor expressly accepts the novation that extinguishes the obligation of the original debtor. (Benedicio and Mascariñas v. Bautista, G.R. No. 242087, December 7, 2021)
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.
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