What is confusion or merger?

Article 1275 of the Civil Code of the Philippines discusses the concept of compensation, to wit:
ART. 1275. The obligation is extinguished from the time the characters of creditor and debtor are merged in the same person. (1192a)
Confusion or merger is the meeting in one person of the qualities of creditor and debtor with respect to the same obligation.[1][2] It takes place between the principal debtor and creditor and the very same obligation must be involved. In Valmonte v. CA,[3] the Supreme Court held that the confusion must be total, i.e. as regards the whole obligation. When confusion takes place, the obligation is extinguished. The reason behind this is because it is absurd that a person should enforce an obligation against himself.[4] For example, A executed a promissory note payable to B. B payed his debt to C using the promissory note executed by A. Turns out C is has an obligation to pay A. C then payed A the promissory note executed by the latter to B. Here the obligation is extinguished because it is absurd that A will enforce the obligation against himself.

[1] 4 Sanchez Roman, 421.

[2] Rabuya. (2019). Obligations and Contracts. 

[3] Valmonte v. CA, G.R. No. L-41621, February 18, 1999.

[4] 8 Manresa, 388.