CONFUSION AND MERGER OF

RIGHTS

SECTION 4.

PS borrowed P 500k from Tricia.

PS issued Promissory Note

(PN) to TriciaTricia needs cashTricia discounts the note to denyelDenyel is indebted

to cheeDenyel PAYS CHEE

WITH THE PNCHEE BUYS CAR PARTS FROM PS

CHEE PAYS PS WITH

THE PN

Definition of Confusion or Merger

Confusion or merger is the meeting in one person of the qualities of creditor and debtor with respect to the same obligation

Reason/ Basis for confusion

1.A person cannot claim payment from himself.

2. The purposes for which the obligation is created are realized.

Requisites of confusion

1. Between the principal debtor and creditor

2. Complete and definite3. Involve one and the same obligation

TRICIA AND CHEE JOINTLY OWES PS

P 500k

TRICIA AND CHEE Needs to pay P250k each

TRICIA AND CHEE ISSUES

PROMISSORY NOTE (PN)

PS BUYS A DIAMOND RING

FROM CHEE

PS USES THE RING TO PROPOSE TO

HIS FIANCEÉ

I DO!PS PAYS WITH

TRICIA AND CHEE’s PN

TRICIA IS NOW LIABLE TO CHEE

Confusion in a Joint obligation

• Joint obligation-involve different debtors -demanded by different creditors -paid PROPORTIONATELY -SEPARATE and DISTINCT

• Confusion will extinguish only the share corresponding to the creditor or debtor in whom two characters concur.

TRICIA AND CHEE FORMS A

PARTNERSHIP: TRICHEE JEWELLERS

TRICHEE BORROWS P500K from PS for additional capital

TRICHEE ISSUES PROMISSORY NOTE

to PS

PS HAD AN ARGUMENT WITH

HIS WIFE

AHEYCHU!NO!!As a Sorry GIFT, PS

Buys a gold Necklace from Tricia

But he has no cash on hand, so he pays

with the PN

Confusion in a Solidary obligation

• Solidary Obl. -one obligation -every debtor is individually responsible for the whole obligation

Confusion will extinguish the entire obligation.Merger in 1 solidary debtor = merger in all

debtors*May claim reimbursement from co-debtors.

SUMMARY