1273. renunciation principal debt extinguish accessory obligations waiver latter leave former in force.

1274. presumed accessory obligation of pledge been remitted when thing pledged after delivery
creditor found possession debtor/ of third person owns thing.

SEC. 4- CONFUSION OR MERGER OF RIGHTS

1275. obligation extinguished from time characters creditor debtor merged same person.

1276. Merger takes place person principal debtor/ creditor benefits guarantors. Confusion takes place in
person any latter not extinguish obligation.

1277. Confusion not extinguish joint obligation except regards share corresponding creditor/ debtor
whom two characters in concur.

SEC. 5- COMPENSATION

1278. Compensation takes place 2 persons, own right, creditors & debtors each other

1279. In order compensation proper, necessary: (start with that)

1. each one obligors be bound principally,& he be same time principal creditor other

2. both debts sum money, / if things due consumable, they be same kind, same quality if if latter stated;

3. two debts be due

4. be liquidated & demandable

5. over neither them there rentention/controversy, commenced third persons & communicated due time
debtor.

1280. Notwithstanding provisions of preceding article, guarantor may set up compensation regards what
creditor may owe principal debtor.

1281. Compensation may be total/ partial. When 2 debts due same amount, there total compensation.

1282. The parties agree upon compensation debts not yet due.

1283. If one parties to suit over obligation has claim for damages against other, former set it off by
proving his right said damages & amount thereof.

1284. When one/both debts rescisible/ voidable, they be compensated against each other before they
judicially rescinded/ avoided.

1285. The debtor who consented to assignment rights made by creditor favor third person, cannot set up
against assignee compensation which pertain to him against assignor, unless assignor notified by debtor at
time he gave his consent, that reserved his right to compensation.

If creditor communicated cession to him but debtor did not consent thereto, the latter may set up
compensation of debts previous to cession, but not of subsequent ones.\
If assignment made without knowledge debtor, he set up compensation all credits prior to same & also
later ones until he had knowledge

1286. Compensation takes place by operation law, even though debts be payable at different places, but
there be indemnity for expenses exchange/ transportation to place payment.

1287. Compensation not proper when one debts arises from depositum/ from obligations depositary/
bailee in commodatum.

Neither compensation be set up against creditor who has claim for support due gratuitous title, without
prejudice to provisions par. 2 of Art. 301.

1288. Neither shall there be compensation if one debts civil liability arising from penal offense.

1289. If person should have against him several debts which susceptible compensation, rules application
payments apply to order compensation.

1290. When all requisites mentioned Art. 1279 present, compensation takes effect by operation of law,
and extinguishes both debts to concurrence amount, even though creditors & debtors are not aware
compensation.

SECTION 6. – NOVATION

Art. 1291. Obligations may be modified by:

(1) Changing their object/ principal conditions;

(2) Substituting person of the debtor;

(3) Subrogating a third person in the rights of the creditor,

1292. In order obligation be extinguished by another wc substitutes the same, imperative be declared
unequivocal terms, / old & new obligations be on every point incompatible w/ each other.

1293. Novation substituting new debtor place original one, be made even w/out knowledge/ against will
of latter, but not w/out consent of creditor. Payment by new debtor gives him rights mentioned inArt.
1236 & 1237.

1294. If substitution w/out knowledge or against will of debtor, new debtor’s insolvency/ non-fulfillment
obligation shall not give rise to any liability on part original debtor.

1295. The insolvency new debtor, who has been proposed by original debtor & accepted by creditor, shall
not revive action of latter against orig obligor, except when said insolvency already existing, & of public
knowledge,/ known to debtor, when he delegated his debt.

1296. When principal obligation extinguished consequence novation, accessory obligation subsist only
insofar they benefit third persons who did not give consent.
1297. If new obligation void, original one shall subsist, unless parties intended that former relation should
be extinguished any event.

1298. The novation void if original obligation void, except when annulment be claimed only by debtor, or
when ratification validates acts which voidable.

1299. If original obligation subject to suspensive/ resolutory condition, new obligation shall be under
same condition, unless otherwise stipulated.

1300. Subrogation of third person in rights of creditor either legal/ conventional. The former not
presumed, except in cases expressly mentioned Code; latter must be clearly established in order that it
may take effect.

1301. Conventional subrogation of third person requires consent of original parties & of third person.

1302. It is presumed that there is legal subrogation:

(1) When creditor pay another creditor who is preferred, even w/out debtor’s knowledge;

(2) When third person, not interested in obligation, pays w/ express/ tacit approval of debtor;

(3) When, even w/out knowledge of debtor, person interested in fulfillment of obligation pays, w/out
prejudice to effects of confusion as to latter’s share.

1303. Subrogation transfers to person subrogated credit with all rights thereto appertaining, either
against debtor/ against third persons, be they guarantors/ possessors of mortgages, subject to
stipulation in conventional subrogation.

1304. A creditor, to whom partial payment been made, may exercise his right for remainder, & he shall be
preferred to person who been subrogated in his place in virtue of partial payment of same credit.