The provisions of the Law on Obligations govern the requirements for fulfilling debts with several debtors or creditors. When fulfilling duties with many debtors or creditors, dividing obligations into divisible and indivisible is important because it determines mutual relations and obligations between debtors or creditors based on the execution of
Dividing an Obligation and a Claim
An obligation shall be divisible if what is owed can be divided and fulfilled into parts having the same features as the entire subject, and should what is divided lose nothing in value; otherwise, the obligation shall be indivisible.
Should several debtors exist in a divisible obligation, such obligation shall be divided between them in equal shares unless a different kind of division is determined, and each shall be liable for his share of the obligation.
Should several creditors exist in a divisible obligation, the claim shall be divided between them in equal shares unless something else is determined, and every creditor may request only his share of the claim.
Presumption of Joint and Several Liabilities
Should several debtors exist in a divisible obligation ensuing from an economic contract, they shall be jointly and severally liable to the creditor unless the contracting parties have explicitly eliminated joint and several liabilities.
Regulations concerning joint obligations shall apply accordingly to indivisible obligations with several debtors.
Should there be several creditors in an indivisible obligation, while no stipulated or statutory joint and several liabilities exist between them, one of the creditors may demand that the debtor fulfils the obligation to him only after being empowered by the rest of the creditors to accept the fulfilment; otherwise, each creditor may request that the debtor fulfils the obligation to all creditors taken together, or to make a corresponding deposit at the court.
Joint and Several Obligations
Joint and Several Debtors
Substance of the Joint and Several Liabilities
Each debtor of joint and several obligations shall be liable to the creditor for the entire obligation, and the creditor may claim its fulfilment from any of them until its complete fulfilment, but should one of the debtors fulfil the obligation, it shall cease to exist, and all debtors shall be exempted.
Out of several jointly and severally liable debtors, each may owe under a different time limit for fulfilment or under different terms or general exceptions.
Each joint and several debtors may invoke a debt setoff effected by his joint debtor.
A joint and several debtor may effect debt setoff relating to a claim of his joint debtor against the creditor’s claim, but only of an amount equal to the share of debt of such joint debtor within the joint and several obligations.
Dismissing a Debt
Dismissing a debt made in agreement with one of the debtors shall also exempt the other debtors from liability.
However, should the dismissal be intended to exempt from liability only the debtor participating in the matter, the joint and several obligations shall be reduced for the shared amount according to mutual relations between debtors to such debtor, while the remaining debtors shall be jointly and severally liable for the rest of the obligation.
Substitution effected with one of the joint and several debtors shall also exempt the remaining debtors.
However, should the creditor and the debtor restrict the substitution to the share of the obligation of such debtor; the obligation of the others shall not be terminated. It shall only be reduced by the value of such share.
The settlement agreed upon by one of the joint and several debtors with the creditor shall not affect the remaining debtors. Still, they shall be entitled to accept such settlement, provided that it is not limited to the debtor with whom it has been agreed.
Should the capacity of a creditor and that of a debtor of the same joint and several obligations merge into one person, the obligation of the remaining debtors shall be reduced by the amount of his share.
Should a creditor be late regarding one of the joint and several debtors, he shall also be late as to the remaining solidary debtors.
Delay of One Debtor and Acknowledging a Debt
Delay by one joint and several debtors shall not affect the remaining debtors.
The same shall apply to acknowledging a debt declared by one of the joint and several debtors.
Ceasing and Interruption of Unenforceability due to Statute of Limitations and Renouncing
Should a limitation period stop running or should it be interrupted regarding one debtor, it shall continue to run as to the remaining joint and several debtors, and it may be completed; however, a debtor for whom the obligation has not expired and who has to fulfil it, shall be entitled to claim from the rest of the debtors to whom the obligation became time-barred, the recovery of value of their respective shares in the obligation.
Renouncing a completed limitation period shall not affect the rest of the debtors.
Right to Recovery of a Person Fulfilling the Obligation
A debtor fulfilling his obligation shall be entitled to claim recovery of the part of the obligation being at his charge against each joint debtor.
The fact that the creditor has exempted one of the debtors or that he has reduced his debt shall have no effect on the matter.
A share, being at the charge of a debtor unable to provide recovery, shall be distributed commensurately to all the debtors.
Division in Equal Shares and Exception
Unless something else is stipulated or otherwise results from legal relations between participants in a transaction, the shares of all debtors shall be equal.
However, should a joint and several obligations be stipulated solely in the interest of one debtor, he shall be bound to recover the entire obligation amount for a joint debtor who has satisfied the creditor.
Joint and Several Creditors
No Presumption of Joint and Several Liabilities
Should there be several persons on the creditor’s side, they shall be jointly and severally liable only if this has been stipulated by contract or specified by law.
Substance of Joint and Several Liabilities
Each joint and several creditors shall be entitled to claim from a debtor fulfilment of the entire obligation. If one of them is satisfied, the obligation shall also be terminated regarding the rest of the creditors.
A debtor may fulfil an obligation to a creditor of his own choice, but only when a creditor has requested fulfilment.
A debtor may set off his obligation debt against his claim against a creditor who demands him to fulfil the obligation.
Debt setoff of his claim against another creditor may be effected by the debtor only up to the amount of his share of the joint and several claims belonging to that creditor.
Dismissing a Debt and Substitution (Innovation)
By dismissing a debt and substituting a debtor and one of the creditors, the joint and several obligations shall be reduced by the amount of that share of the creditor’s claim.
Settlement stipulated by one of the joint and several creditors with a debtor shall not affect the rest of the creditors. Still, they shall be entitled to accept such settlement unless it relates only to a share of the creditor with which it has been agreed.
Should the capacity of joint and several creditors merge in one person with the capacity of the debtor, each of the remaining joint creditors shall be entitled to demand from him only his part of the claim.
Should a debtor be late to one joint and several creditors, he shall also be late to the rest of the creditors.
The delay of one joint and several creditors shall also affect the other creditors.
Acknowledgment of Debt
Acknowledgement of a debt affected to one of the creditors shall be of use to all creditors.
Unenforceability due to Statute of Limitations
Should one of the creditors interrupt the limitation period, or if such period fails to run against him, this fact shall not be of use to the rest of the creditors, so the limitation period shall continue to run against them.
Renouncing unenforceability due to limitation to one creditor shall also be useful to the rest of the creditors.
Relations between Creditors after Fulfilment
Each joint and several creditors shall be entitled to demand the delivery of his share from a creditor accepting fulfilment from the debtor.
Unless something else results from the creditors’ relations, each joint creditor’s share shall be equal.