Article 1303

Subrogation transfers to the persons subrogated the 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. (1212a)

Ang subrogasyon ang naglilipat sa mga taong subrogated ang inutang kasama ang lahat ng karapatan na ukol, alinman laban sa may utang o ikatlong tao, sila man ay mga guarantor o possessor ng sanla, batay sa sinasaad ng kasunduan ng conventional subrogation. (1212a)

The effect of legal subrogation is to transfer to the new creditor the credit and all the rights and actions that could have been exercised by the former creditor either against the debtor or against third persons, be they guarantors or mortgagor. Simply stated, except only for the change in the person of the creditor, the obligation subsists in all respects as before the novation.

If the credit transferred to the new creditor is subject to a suspensive condition, the credit cannot be collected until after the fulfillment of the said condition.

Rights which the new creditor may acquire by reason of subrogation:

1. Payment of the principal debt
2. Right to exercise accessory rights like: right to mortgage or pledge
3. Right to proceed against guarantors and sureties or against solidary debtors