S E C T I O N 6 : NOVATION

NOVATION- The substitution or change of an obligation by another, which extinguishes or

modifies the first, either changing its object or principal condition, or substituting another in
place of the debtor, or subrogating a third person in the right of the creditor. The total or partial
extinction of an obligation through the creation of a new one which substitutes it.

KINDS OF NOVATION

As to origin

1. Legal –that which takes place by operation of law (article 1300; article 1224)
2. Conventional – that which takes place by agreement of the parties (article 1300- 1301).
As to subject

1. Real or Objective – changing of object or the principal conditions of the obligation (Art. 1291,
par. 1);

2. Personal or Subjective – substitution of person of the debtor or to the subrogation of a third

person in the rights of the creditor; a. Passive or Substitution – when substitution of the person of
the debtor; b. Active or Subrogation – when there is a subrogation in the rights of the creditor.

3. Mixed – refers to a combination of objective and subjective novation.

As to extent or effect

1. Total or Extinctive – when the old obligation is completely extinguished;

2. Partial or modificatory – also called imperfect or improper novation/ the old obligation is
merely modified and still remain in force except insofar as it has been modified.

Requisities of novation

1. A precious valid obligation

2. Capacity and intention of the parties to modify or extinguish the obligation
3. The modification or extinguishment of the obligations
4. The creation of a new valid obligations

KINDS OF PASSIVE OR SUBSTITUTION

1. Expromision

2. Delegación

KINDS OF PERSONAL NOVATION

 1. SUBSTITUTIONAL
2. SUBROGATION

CONSENT OR CREDITOR NECESSARY

There are two (2) modes of substitution, the consent of the creditor is an indispensable
requirement and the other is the right of the new debtor who pays

Meaning of subrogation

- Is the substitute of the third person (subrogee) in the place of creditor (subroger) with
reference to a lawful claim of right, and giving the former all the rights of the latter
(including the right to employ all remedies to enforce payment.

Kinds of subrogation

1. Conventional
2. Legal