Joint and Solidary Obligations

Basic Concept

Joint and solidary obligations deal with obligations involving two or more creditors, two or more debtors, or both, and they determine whether a party may demand or be compelled to perform the whole prestation or only a proportionate share.

The controlling distinction is the extent of the juridical tie: in a joint obligation, each creditor or debtor is connected only to a separate share; in a solidary obligation, each solidary creditor or debtor is connected to the whole obligation, subject to later accounting among themselves.

Plurality of parties does not by itself create solidarity. The Civil Code treats an obligation with several creditors or debtors as joint unless solidarity is expressly stated, imposed by law, or required by the nature of the obligation.

Solidarity may be created by words such as "solidarily," "jointly and severally," "in solidum," or other language clearly showing that each debtor answers for the whole or each creditor may demand the whole. Ambiguous language is construed in favor of joint liability because solidarity is burdensome and cannot rest on implication alone.

Indivisibility is different from solidarity. Indivisibility concerns the prestation, while solidarity concerns the legal tie among the parties; a prestation may be indivisible without making the debtors solidarily liable.

Joint Obligations

In a joint obligation, the credit or debt is divided into as many equal shares as there are creditors or debtors, unless the law, the agreement, or the circumstances show a different proportion.

Each joint creditor may demand only his own share of the credit. He cannot collect the share belonging to another creditor because he is not the representative of the others merely by being a co-creditor.

Each joint debtor is liable only for his own share of the debt. A creditor cannot compel one joint debtor to pay the share of another debtor, even if the other debtor is insolvent.

Payment by a joint debtor extinguishes only his own share, unless he was authorized to pay for the others or the payment is otherwise accepted as satisfying a larger portion of the obligation.

Default, delay, fraud, negligence, or breach by one joint debtor generally does not make the other joint debtors liable for the guilty debtor's share or damages, because their obligations are separate as to extent.

Insolvency of one joint debtor is borne by the creditor as to that debtor's share, unless a law or agreement shifts the risk to the other debtors.

A joint creditor who receives more than his share must account to the other creditors under ordinary principles on payment, agency, trust, or unjust enrichment, but his receipt does not by itself prove that he had authority to collect for all.

Joint Divisible Obligations

A joint divisible obligation is the ordinary form of joint obligation, because the prestation can be divided and each party's portion can be separately performed or collected.

For example, if several debtors jointly owe a sum of money and no shares are stated, each debtor is liable for an equal portion only, because money is divisible and solidarity is not presumed.

A creditor suing a joint debtor must prove the debtor's share. If the obligation is silent, the shares are presumed equal, but the presumption yields to proof of unequal interests or unequal undertaking.

Joint Indivisible Obligations

A joint indivisible obligation exists when the parties are bound jointly but the prestation cannot be physically, legally, or economically divided without altering its nature or value.

In a joint indivisible obligation with several debtors, the creditor must generally proceed against all debtors because complete performance requires the concurrence of all persons bound to render the indivisible prestation.

If one joint debtor refuses to cooperate in an indivisible obligation, the obligation may be converted into liability for damages. The debtor who refused or caused the breach bears the damages attributable to his fault, while willing debtors are liable only for their corresponding shares in the value of the prestation.

Indivisibility does not make a non-defaulting joint debtor answer for the whole value or for the damages caused by another debtor. The rule preserves the non-solidary character of the obligation while recognizing that the indivisible prestation can no longer be performed as promised.

Solidary Obligations

In a solidary obligation, each solidary creditor may demand the entire prestation, or each solidary debtor may be compelled to perform the entire prestation, depending on whether the solidarity is active, passive, or mixed.

Solidarity strengthens the creditor's right of collection but does not erase the internal shares of the parties. After the creditor is paid, contribution and reimbursement settle the burden among the persons bound or benefited.

Solidarity may exist even if the parties are not bound in the same manner, by the same terms, or under the same conditions. A debtor may be solidarily liable for the whole, although his obligation is subject to a different period or condition, if the source of the obligation clearly creates solidarity.

Solidarity may arise from contract, law, or the nature of the obligation. Conventional solidarity depends on clear stipulation; legal solidarity depends on the statute or rule imposing it; natural solidarity applies only when the obligation's character plainly requires a whole-liability relation.

Active Solidarity

Active solidarity exists when there are several creditors and each may demand the whole prestation from the debtor.

The debtor may pay any solidary creditor, but once a judicial or extrajudicial demand has been made by one solidary creditor, payment should be made to the demanding creditor to avoid prejudice to the creditor who has asserted the claim.

A solidary creditor may do acts useful to the others, such as demanding payment or interrupting prescription, because those acts preserve or enforce the common credit.

A solidary creditor cannot do acts prejudicial to the others beyond his own share. If he condones, compromises, novates, compensates, or otherwise extinguishes the whole obligation, the debtor may be released as to the external obligation, but the acting creditor must account to the other creditors for their corresponding shares.

A solidary creditor cannot assign his rights to a third person without the consent of the other solidary creditors, because substitution of a creditor affects the confidence and internal relations among persons entitled to the whole credit.

Passive Solidarity

Passive solidarity exists when several debtors are liable in such a way that the creditor may demand the whole prestation from any one of them, from some of them, or from all of them simultaneously or successively.

The creditor's action against one solidary debtor does not bar later action against the others until the obligation has been fully satisfied. Collection, not the filing of the first action, is what extinguishes the creditor's right to pursue the remaining solidary debtors.

A solidary debtor sued for the whole is not a mere guarantor of the others. He is directly bound to the creditor for the entire prestation, although he may later seek reimbursement from his co-debtors for their respective shares.

If two or more solidary debtors offer to pay, the creditor may choose which payment to accept, subject to rules on proper tender, consignation, and preservation of the creditor's rights.

Judgment against one solidary debtor is enforceable against that debtor, but persons who were not parties are not deprived of their own defenses without due process. The creditor may still sue the other solidary debtors for any unpaid balance.

Mixed Solidarity

Mixed solidarity exists when there are several solidary creditors and several solidary debtors in the same obligation. Any solidary creditor may demand the whole from any solidary debtor, subject to the rules on demand, payment, accounting, and reimbursement.

The external relation is between the creditor side and the debtor side, while the internal relation governs how the creditors divide what is collected and how the debtors allocate what was paid.

External and Internal Effects

Solidarity has an external effect and an internal effect. Externally, the creditor may enforce the whole obligation against a solidary debtor or the debtor may discharge the whole by paying a proper solidary creditor. Internally, the parties who received more or paid more than their shares must account to the others.

Payment by one solidary debtor extinguishes the obligation as to the creditor. The paying debtor may demand from each co-debtor only the share corresponding to that co-debtor, with interest from the time of payment when reimbursement is due.

If a solidary debtor pays after the obligation has prescribed, or pays an obligation that is illegal or void, he generally has no right of reimbursement because he did not extinguish an enforceable common debt for the benefit of the co-debtors.

If a solidary debtor becomes insolvent, his share is borne by the other solidary debtors in proportion to their respective shares. This rule follows from the internal solidarity among debtors after the creditor has been or must be paid.

A solidary debtor who pays the whole may recover only contribution, not the entire amount again, because payment extinguishes the creditor's claim and converts the matter into an internal settlement among co-debtors.

A co-debtor who benefited from remission of his share before payment is generally released from contribution for that share. However, if the whole debt had already been paid by another solidary debtor before the remission, the remission cannot prejudice the paying debtor's vested right of reimbursement.

Acts That Extinguish or Modify the Obligation

Novation, compensation, confusion, and remission may extinguish or modify a solidary obligation when they occur between the creditor and one solidary debtor, or through the act of one solidary creditor, because each solidary party is connected to the whole obligation in the external relation.

If one solidary creditor validly remits the entire debt, the debtor may invoke the remission against the creditor group, but the remitting creditor must answer to the other creditors for the shares that he impaired.

If confusion occurs because one solidary debtor becomes also the creditor, the obligation is extinguished externally to the extent required by law, but the internal shares must still be settled according to who actually benefited from the merger of personalities.

If compensation takes place between a solidary debtor and the creditor, the debtor may invoke it to extinguish the debt to the extent of the compensation, while any excess burden or benefit is adjusted among co-debtors.

If novation releases one solidary debtor or substitutes a new obligation, the scope of release depends on the clear terms of the novation. A novation that extinguishes the common obligation affects the creditor's external claim, but it does not automatically erase internal claims already vested among the debtors or creditors.

Loss, Impossibility, Delay, and Damages

If the thing due is lost or the prestation becomes impossible without fault of the solidary debtors and before any debtor is in delay, the solidary obligation is extinguished because no debtor can be charged for a fortuitous impossibility not attributable to him.

If the loss or impossibility is due to the fault of any solidary debtor, all solidary debtors are liable to the creditor for the price, damages, and interest, because each is externally bound for the whole. The non-faulting debtors may recover from the guilty debtor what they paid beyond their own shares.

If the loss occurs after delay, the debtors remain liable even if the immediate cause is fortuitous, because delay transfers the risk under the rules on obligations.

Demand upon one solidary debtor may place that debtor in delay as to the creditor's claim against him, and the effects of delay must be understood with the creditor's right to enforce the whole against any solidary debtor. Internal recourse remains available to protect debtors who were not responsible for the breach.

Fraud, negligence, or breach committed by one solidary debtor may expose all solidary debtors externally, but the ultimate burden of damages falls on the debtor whose wrongful act caused the liability.

Defenses of a Solidary Debtor

A solidary debtor sued for the whole may raise defenses derived from the nature of the obligation, defenses personal to him, and defenses personal to the other co-debtors within the limits recognized by law.

Defenses derived from the nature of the obligation defeat or reduce the creditor's claim against all debtors because they attack the common obligation itself. Examples include nullity of the obligation, total payment, loss without fault before delay, prescription of the common action, or absence of an enforceable prestation.

Personal defenses of the sued debtor benefit him according to their scope. Incapacity, vitiated consent, minority, a personal condition, or a personal remission may release or reduce his liability without necessarily releasing the other solidary debtors.

Defenses personal to another co-debtor may be invoked only as to that co-debtor's share. If one debtor has a personal defense that would release his share, another debtor sued for the whole may use that defense only to reduce the claim by the protected debtor's share, not to defeat the whole obligation.

A solidary debtor may also invoke partial payment, partial remission, or partial compensation to the extent that these acts have legally reduced the creditor's claim. The effect depends on whether the act extinguished the common debt or only a personal share.

Comparison of Joint and Solidary Obligations

Divisibility, Indivisibility, and Solidarity

Divisibility determines whether the prestation can be performed in parts; solidarity determines whether the legal responsibility for the whole may be enforced against one party.

A divisible prestation, such as payment of money, is usually apportioned in a joint obligation, but it may still be collected in full from one debtor if the parties are solidarily bound.

An indivisible prestation, such as delivery of a specific thing or performance of a single act that cannot be partly rendered, does not automatically create solidarity among several debtors. If the obligation is merely joint, all must participate in performance, but no one debtor becomes liable for the whole merely because the object is indivisible.

A solidary indivisible obligation gives the creditor the strongest external remedy because the prestation is whole in nature and each solidary debtor is answerable for the whole in law. If performance becomes impossible through the fault of one debtor, all may be pursued externally, with internal recourse against the party at fault.

Practical Legal Consequences

The wording of the obligation controls the creditor's remedy. A stipulation that several persons "promise to pay" or "bind themselves" is not enough to create solidarity unless the language clearly makes each liable for the entire debt.

The creditor who wants full recourse against any debtor must rely on clear solidarity. Without it, the creditor must respect each debtor's separate share and cannot shift the risk of another debtor's insolvency to the solvent co-debtors.

The debtor who signs a solidary undertaking assumes the risk of paying more than his internal share. His protection is not refusal to pay the creditor, but reimbursement, contribution, subrogation where proper, and recovery from the debtor whose fault caused additional liability.

The creditor's release of one solidary debtor must be read carefully. A release of only that debtor's share reduces the internal burden, while a release of the whole obligation may extinguish the creditor's claim against all, subject to the releasing creditor's liability to co-creditors or the creditor's reservation of rights where legally effective.

When the obligation involves several parties, the analysis should identify the source of plurality, the presence or absence of solidarity, the divisibility of the prestation, the party against whom demand was made, the effect of payment or extinction, and the internal allocation after the external claim is satisfied.