Discuss the following topic : Loss of the Thing Due, Condonation or Remission of the Debt, Confusion or Merger of Rights, Compensation and Novation

Loss of the Thing Due Art. 1262. An obligation which consists in the delivery of a determinate thing shall be extinguished if it should be lost or destroyed without the fault of the debtor , and before he has incurred in delay. When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the thing does not extinguish the obligation, and he shall be responsible for damages. The same rule applies when the nature of the obligation requires the assumption of risk. Art. 1263. In an obligation to deliver a generic thing, the loss of destruction of anything of the same kind does not extinguish the obligation. Art. 1264.The courts shall determine whether, under circumstances, the partial loss of the object of the obligation is so important as to extinguish the obligation. Art. 1265. Whenever the thing is lost in the possession of the debtor, it shall be presumed that the loss was due to his fault, unless there is proof to the contrary, and without prejudice to the provisions of Art. 1165. This presumption does not apply in case of earthquake, flood, storm or other natural calamity. Art. 1266. The debtor in obligations to do shall also be released when the prestation becomes legally or physically impossible without the fault of the obligor. Art. 1267. When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part. Art. 1268. When the debt of a thing certain and determinate proceeds from a criminal offense, the debtor shall not be exempted from the payment of its price, whatever may be the cause for the loss, unless the thing having been offered by him to the person who should receive it, the latter refused without justification to accept it. Art. 1269. The obligation having been extinguished by the loss of the thing, the creditor shall have all the rights of action which the debtor ma have against third persons by reason of the loss.Condonation or Remission of the Debt Art. 1270. Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be made expressly or impliedly. One and the other kinds shall be subject to the rules which govern inofficious donations. Express condonation shall, furthermore, comply with the forms of donation. Art. 1271. The delivery of a private document evidenceng a credit, made voluntarily by the creditor to the debtor , implies the renunciation of the action which the former had against the latter. If in order to nullify this waiver it should be claimed to be inofficious , the debtor and his heirs may uphold it by proving that the delivery of the document was made in virtue of payment of the debt. Art. 1272. Whenever the private document in which the debt appears is found in the possession of the debtor , it shall be presumed that the creditor delivered it voluntarily, unless the contrary is proved. Art. 1273. The renunciation of the principal debt shall extinguish the accessory obligations; but the waiver of the latter shall leave the former in force. Art. 1274. It is presumed that the accessory obligation of pledge has been remitted when the thing pledged, after its delivery to the creditor , is found in the possession of the debtor, or of a third person who owns the thing. Confusion or Merger of Rights Art. 1275. The obligation is extinguished from the time the characters of creditor and other debtor are merged in the same person. Art. 1276. Merger which takes place in the person of the principal debtor or creditor benefits the guarantors. Confusion which takes place in the person of any of the latter does not extinguish the obligation. Art. 1277. Confusion does not extinguish a joint obligation except as regards the share corresponding to the creditor or debtor in whom the two characters concur.Compensation Art. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other. Art. 1279. In order that compensation may be proper, it is necessary: (1) That each one of the obligors be bound principally , and that he be at the same time a principal creditor of the other; (2) That both debts consists in a sum of money , or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; (3) That the two debts be due; (4) That they be liquidated and demandable; (5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. Art. 1280. Notwithstanding the provisions of the preceding article, the guarantor may set up compensation as regards what the creditor may owe the principal debtor, Art. 1281. Compensation may be total or partial. When the two debts are of the same amount, there is a total compensation. Art. 1282. The parties may agree upon the compensation of debts which are not yet due. Art. 1283. If one of the parties to a suit over an obligation has a claim for damages against the other ; the former may set it off by proving his right to said damages and the amount thereof. Art. 1284. When one or both debts are rescission voidable, they may be compensated against each other before they are judicially rescinded or avoided. Art. 1285. The debtor who has consented to the assignment of rights made by the creditor in favor of a third person, cannot set up against the assignee the compensation which would pertain to him against the assignor, unless the assignor was notified by the debtor at the time he gave his consent, that he reserved his right to the compensation. If the creditor communicated the cession to him but the debtor did not consent thereto, the latter may set up the compensation of debts previous to the cession, but not of subsequent ones. If the assignment is made without the knowledge of the debtor, he may set up the compensation of all credits prior to the same and also later ones until he had knowledge of the assignment. Art. 1286. Compensation takes place by operation of law, even though the debts may be payable at different places, but there shall be an indemnity for expenses of exchange or transportation to the place of payment.Art. 1287. Compensation shall not be proper when one of the debts arises from a depositum or from the obligations of a depositary or of a bailee in commodatum. Neither can compensation be set up against a creditor who has a claim for support due by gratuitous title, without prejudice to the provisions of paragraph 2 of Article 201. Arty. 1288. Neither shall there be compensation if one of the debts consists in civil liability arising from a penal offense. Art. 1289. If a person should have against several debts which ae susceptible of compensation, the rules on the application of payments shall apply to the order of the compensation. Art. 1290. When all the requisite mentioned in Article 1279 are present, compensation takes effect by operation of law, and extinguishes both debts to the concurrent amount, even though the creditors and debtors are not aware of the compensation. Novation Art. 1291. Obligations may be modified by: (1) Changing their object or principal conditions. (2) Substituting the person of the debtor; (3) Subrogating a third person in the right s of the creditor. Art. 1292. In order that an obligation ay be extinguished by another which substitute the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other. Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter , but not without the consent of the creditor. Payment by the new debtor gives him the rights mentioned in Articles 1236 and 1237. Art. 1294. If the substitution is without the knowledge or against the will of the debtor, the new debtor's insolvency or non-fulfillment of the obligation shall not give rise to any liability on the part of the original debtor. Art. 1295. The insolvency of the new debtor, who has been proposed by the original debtor and accepted by the creditor, shall not revive the action of the latter against the original obligor, except when said insolvency was already existing and of public knowledge, or known to the debtor, when he delegated his debt.Art. 1296. When the principal obligation is extinguished in consequence of a novation, accessory obligations may subsist only insofar as they may benefit third persons who did not give their consent. Art. 1297. If the new obligation is void, the original one shall subsist, unless the parties intended that the former relation should be extinguished in any event. Art. 1298. The novation is void if the original obligation was void, except when annulment may be claimed only by the debtor, or when ratification validates acts which are voidable. Art. 1299. If the original obligation was subject to a suspension resolutory condition, the new obligation shall be under the same condition, unless it is otherwise stipulated. Art. 1300. Subrogation of a third person in the rights of the creditor is either legal or conventional. The former is not presumed , except in cases expressly mentioned in this Code; the latter must be clearly established in order that it may take effect. Art. 1301. Conventional subrogation of a third person requires the consent of the original parties and of the third person. Art. 1302. It is presumed that there is legal subrogation: 1) When a creditor pays another creditor who is preferred , even without the debtor's knowledge; 2) When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor; 3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter's share. Art. 1303. Subrogation transfers to the person subrogatione credit with all the rights thereto appertaining, either against the debtor or against third person, be they guarantors or possessors of mortgages, subject to stipulation in a conventional subrogation. Art. 1304. A creditor, to whom partial payment has been made, may exercise his right for the remainder, and he shall be preferred to the person who has been subrogatin his place in virtue of the partial payment of the same credit