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CHAPTER THREE Conditional Obligation - one whose effectivity is subordinated to the
DIFFERENT KINDS OF OBLIGATIONS fulfillment or non-fulfillment of a future and uncertain act or event.

Sec. 1. - Pure and Conditional Obligations Is a past event unknown to the parties be considered as a condition?
According to Sir Ulan, quoting Tolentino, a past event
Art. 1179. Every obligation whose performance does not depend
upon a future or uncertain event, or upon a past event unknown cannot be “future and uncertain”, which are the elements of a
to the parties, is demandable at once. condition, and thus cannot be one. What can be a condition is the
Every obligation which contains a resolutory condition shall future knowledge or proof of a past event unknown to the parties, but
also be demandable, without prejudice to the effects of the NOT the event itself. Thus the contract or obligation arises, not when
happening of the event. the event happened or the fact came into existence, which would be
in the past, but when the proof of such fact or event is presented,
Pure Obligation- one whose effectivity or extinguishment does not which would be in the future.
depend upon the fulfillment or non-fulfillment of a condition or upon
the expiration of a term or period. Example: I will give you P50,000 if you could prove that Rizal
returned to the Catholic Church before he died.
Elements:
a) Not subject to a condition Classification of Conditions:
b) Not subject to a term
1. Suspensive or Resolutory
 Characterized by the quality of immediate demandability,  Suspensive – when the fulfillment of the condition results in
but there must be a reasonable period of grace. the acquisition of rights arising out of the obligations.
 Resolutory – when the fulfillment of the condition results in
 *Immediate demandability: It does not mean outright but the extinguishment of rights arising out of the obligation.
speaks of a reasonable time; depends on the nature and
complexity of the obligation. 2. Potestative, Casual, or Mixed
 Potestative – when the fulfillment of the condition depends
 Simple Obligation does not equal to pure Obligation. upon the will of a party to the obligation.
Former speaks of an obligation with only one prestation,  Casual – when the fulfillment of the condition depends
while the latter speaks of an obligation that does not upon chance and/or upon the will of a third person
depend on a condition or period.  Mixed – when the fulfillment of the condition depends partly
upon the will of a party to the obligation and partly upon
Obligations that are immediately demandable: chance and/or will of a third person
1. Pure obligations (Art 1179)
2. Obligations with resolutory condition (Art. 1179, par.2) 3. Possible or Impossible
3. Obligations with resolutory period (Art. 1193, par.2)  Possible – when the condition is capable of realization
4. Obligations with a condition not to do an impossible thing according to nature, law, public policy or good customs
(Art. 1183, par.2)  Impossible – when the condition is not capable of
realization according to nature, law, public policy or good
2 Types of Events: customs

1. Condition – a future and uncertain event upon which the 4. Positive or Negative
acquisition and resolution of rights is made to depend by those who  Positive – when the condition involves the performance of
execute the juridical act an act
 Negative – when the condition involves the omission of an
Characteristics: act.
 Future
 Uncertain – may or may not happen 5. Divisible or Indivisible
 Possibility  Divisible – when the condition is susceptible of partial
realization
2. Term/Period – an interval of time, which, exerting an influence on  Indivisible – when the condition is not susceptible of partial
an influence on an obligation as a consequence of a juridical act, realization
either suspends its demandability or produces its extinguishment.
6. Conjunctive or Alternative
Characteristics:  Conjunctive – when there are several conditions, all of
 Future which must be realized
 Certain although not known when it will happen  Alternative – when there are several conditions, but only
one must be realized
**Suspensive Condition and Term – Happening of which will arise to
acquisition of rights 7. Express or Implied
**Resolutory Condition and Term – Happening of which will result to  Express – when the condition is stated expressly
the extinguishment of an obligation  Implied – when the condition is tacit

Art. 1180. When the debtor binds himself to pay when his means
permit him to do so, the obligation shall be deemed to be one
with a period, subject to the provisions of Article 1197.

 Should the debtor bind himself to pay when his means fulfillment of the condition depends upon the sole will of the
permit him to do so, the obligation is one with a period and debtor, the conditional obligation shall be void. If it depends
not subject to a condition upon chance or upon the will of a third person, the obligation
shall take effect in conformity with the provisions of this Code.
 Since the duration of the period is left to the discretion of
the debtor, it is subject to 1197 or where the courts shall fix 2 kinds of Potestative:
the duration of the period by which he shall pay the  simple potestative condition – presupposes not only a
obligation. Thus in cases falling under this article, creditor manifestation of will but also the realization of an external
should file an action to fix a period for the payment of the act
obligation.
e.g. “if you sell your house”; “If I go to Madrid, I promise to sell you
Indications of a term or period: my house”.
When the debtor binds himself to pay –
 purely potestative condition1 – depends solely and
 when his means permit him to do so exclusively upon the will
 little by little
 as soon as possible e.g. “if I like it” or “if I deem it proper”; “I promise to sell you my house
 from time to time on such date if I deem it convenient.”
 as soon as I have the money
 in partial payment Note:
 when in the position to pay Simple potestative condition approaches very well the nature of a
mixed condition. (Caguioa) Hence, it is valid.
Art. 1181. In conditional obligations, the acquisition of rights, as Purely or strict potestative condition on the other hand destroys the
well as the extinguishment or loss of those already acquired, efficacy of the legal tie. Note that it is only when the potestative
shall depend upon the happening of the event which constitutes condition depends exclusively upon the will of the debtor that the
the condition. conditional obligation is void. (Tolentino)

Suspensive Resolutory  Simple potestative – valid;
 purely potestative (creditor)– valid; purely potestative
Condition precedent Condition subsequent
(debtor) - void
Results in the acquisition of Results in the extinguishment of
Poroitgbehlisgtstaattioivanersising out Caosfualthe roigbhligtsationasrisMinixged out of the a) Potestative on the part of the Creditor
- if the fulfillment of the condition is dependent upon the sole will of
fuoubplfoliilgnlmatTgeitohihnvneeteshwabdoipilerflptpheeontnfotihdnteasgheufcouopfolnfobtihldnllimeigtiaeoctonniocnt hndda.eiotnpifocenent/hdeToesxrhfuoteuinpblfgolhiilgunalmaipsttpehhioeneenntsiwnoigblllioogoffafdtteaihopenpeanctrhdoteysndition the creditor the obligation is VALID
party not todemanthdeabulpeon uthnetil wiltlheofima tmoedtihaetelyobligaetfifoenctivaend and
obligatiohnasppening of theirdevpeenrst ownhich depmaartnlydableu,pownithocuhtanpcrejudice Example: I will give you a car on the condition that you go to Baguio
on or before Dec 10, 1965.
constitutes the condition to andth/oer whiallppoefninag thiordf the
respoelrustonry. condition b) Potestative on the part of the Debtor

If the condition is nEotfffuelfilcletds, If the condition is not fulfilled, i) Suspensive condition:
depenndoenjut ridoicnal ttiheeisTchreeated.obligatiojunrTidhicealorbelliagtaiotinonis aconndsothliedated. - If a suspensive condition is solely dependent upon the will of the
creditoWrh: at is acquainreddthebyconthdeitioWnhcaotndisitiaocnquirsehdablly thtaekoebligee debtor, the obligation is VOID.
- coobnldigiteioen in atnhde schoanllstittauktieoneoffef cint. efftehcet. co(nvsatiltiudtion anodf the
otbhleigaotibolnig,ation (visaliodnly mereanodbelignafotirocneaabrlee) rights that are Example: I’ll give you a diamond ring if I go to Tokyo this year.
VhAoLpIeD and enfoerxcpeacbtalnec) y, subject to threat or danger of
protected by law. extinction. ii) Resolutory condition:
-A condition which is both potestative and resolutory is VALID, even
dependent on the though the fulfillment of the condition is dependent upon the will of
the debtor
debtor:
Example: I’ll give you a car until I return from Baguio.
- condition and Art.
obligation, VOID 1182. Art. 1183. Impossible conditions, those contrary to good
When customs or public policy and those prohibited by law shall
(suspensive) the annul the obligation which depends upon them. If the obligation
Exception: is divisible, that part thereof which is not affected by the
- condition and impossible or unlawful condition shall be valid.

obligation, VOID The condition not to do an impossible thing shall be
considered as not having been agreed upon.

1 Referred to by Caguioa as strict potestative

(resolutory)

Possible conditions – those which are valid and allowed by law; Art. 1185. The condition that some event will not happen at a
proper conditions. determinate time shall render the obligation effective from the
moment the time indicated has elapsed, or if it has become
Impossible conditions – contrary to good customs or public policy evident that the event cannot occur.
or prohibited by law.
If no time has been fixed, the condition shall be
2 kinds: deemed fulfilled at such time as may have probably been
1. Physically impossible – when the realization of the event contemplated, bearing in mind the nature of the obligation.
constituting the condition is incompatible with or contrary to nature.
2. Juridically impossible – when contrary to law, morals, good Positive conditions – those that depend on the fulfillment of an
customs, and public policy. event.

* Illicit conditions – those which tend to restrain or fetter the exercise Negative conditions – those which depend on the non-happening of
of those rights or powers arising from the natural or civil liberties of an event.
man
* Immoral conditions – those which tend to compel a person to  If the condition is positive (that an event should occur
execute an act contrary to good customs. within a determinate period, the obligation is extinguished
from the moment the period lapses or it has become
Note: In the case of illicit and immoral conditions, the illicit act indubitable that the event will not take place.
provided for in the contract must refer to that of one of the parties but
not where the illicit act is the act of a third person. The illicit character Example: I’ll give you a car if you marry X on or before Dec
of the act is not determined by the act or fact in itself, but by its 10, 1992. My obligation to give the car is extinguished if on
effects upon one of the parties. Dec 11, 1992 X is still single or if before Dec 10, 1992 X
dies, because by then it is evident that you can no longer
Applicability: marry X.
The article applies only to contracts. It has no application to
gratuitous obligation (simple and remuneratory donations and  If the condition is negative (that some event would not
testamentary dispositions). happen within a determinate time), the obligation becomes
effective from the moment the period lapses, or if it has
Effects: become evident that the event cannot occur.
1. Impossible condition on obligation to give/to do
(positive & suspensive) Example: I’ll give you my car if you do not marry X on or
before Dec 10, 1992. If on Dec 11, 1992 you have not
 obligation is annulled married X, you can demand delivery of the car. If X dies
before Dec 11, 1992 you can, on the death of X demand
Example: I’ll give you P40,000 if you go to the moon this year. delivery of the car without waiting for Dec 11, 1992,
because it is evident that you can no longer marry X.
2. Impossible condition on obligation not to do
 obligation is void (deemed not having been agreed upon); Art. 1186. The condition shall be deemed fulfilled when the
hence obligation remains valid & subsequent => becomes obligor voluntarily prevents its fulfillment.
pure and simple
Constructive Fulfillment of Conditions
Example: D obliged himself to give C P40,000 if C does not go to the If the debtor prevents the creditor from fulfilling the condition of the
moon this year. obligation, the condition is deemed fulfilled and the obligation
demandable.
*Impossible condition imposed on gratuitous obligation:
 condition is deemed not imposed; hence obligation is valid It is essential that the obligor must have actually prevented the
and becomes pure and simple obligee from complying and that it must have been voluntary and
willful.
Requisites for the nullity of an obligation with impossible
conditions: Requisites:
1. Conditions are positive and suspensive 1. Condition is suspensive
2. Obligation is a contract 2. Debtor actually prevents the fulfillment of the condition
3. Impossibility exists at the time of the creation of the 3. He acts voluntary/intention
obligation
Example: Dean Ulan will give Anjo P50,000 if Dean Ulan and Dean
Art. 1184. The condition that some event happen at a Jara will run around the campus. If only Dean Jara only ran, Art 1186
determinate time shall extinguish the obligation as soon as the will apply UNLESS if it was not Dean Ulan’s intention and fault not to
time expires or if it has become indubitable that the event will run.
not take place.

*Underlying principle: A party to a contract may not be excused from Example: On Jan 10, 1992 D obliged himself to give C a certain
performing his promise by the non-occurrence of an event which he ricefield and C agreed to give D a certain fishpond provided X passes
himself prevented. the CPA examinations. If X passes the CPA exam on Aug 10, 1992, C
is obliged to deliver the fishpond to D and D is obliged to deliver the
Exception: ricefield to C. However D is not obliged to deliver the fruit of the
• If in preventing the fulfillment of the condition the debtor ricefield to C. Neither is C required to give the fruits of the fishpond to
acts pursuant to a right, the condition will NOT be deemed fulfilled. D.

Applicable to: • In unilateral obligations- There is usually no retroactive
• Suspensive and potestative (creditor) effect because they are gratuitous. The debtor receives nothing from
• Suspensive and casual the creditor. Thus, fruits and interests belong to the debtor unless
• Suspensive and mixed from the nature and other circumstances of the obligation it should be
inferred that the intention of the person constituting the same was
ART.1187. The effects of a conditional obligation to give, once different.
the condition has been fulfilled, shall retroact to the day of the
constitution of the obligation. Nevertheless, when the obligation Example: On Jan 10, 1992 D obliged himself to give C a certain
imposes reciprocal prestations upon the parties, the fruits and ricefield provided C passes the CPA exams. If on Aug 10, 1992 C
interests during the pendency of the condition shall be deemed passes the CPA exams, D obliged to deliver the ricefield to C but not
to have been mutually recompensated. If the obligation is the fruits received from Jan 10, 1992
unilateral, the debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances of the Exceptions to the rule of retroactivity:
obligation it should be inferred that the intention of the person 1. Real contracts
constituting the same was different. 2. Successive contracts (those contracts whose fulfillment is
realized within a period of time; e.g. contract of lease, contract of
In obligations to do and not to do, the courts shall labor, life annuities)
determine , in each case, the retroactive effect of the condition
that has been complied with. Reason for retroactivity: The condition is only accidental, not
essential element of the obligation.
Retroactive effects of fulfillment of suspensive condition
(1) In obligations to give- An obligation to give subject to a Limitation of Retroactivity Effect:
suspensive condition becomes demandable only upon the fulfillment  If thing is lost through fortuitous event, debtor suffers the
of the condition. However, once the condition is fulfilled, its effects loss because he is still the rightful owner. (basis: Art. 1164
shall retroact to the day when the obligation was constituted. -- ownership or personal right is only vested upon delivery)

When is an obligation constituted? Art.1188. The creditor may, before the fulfillment of the
When the essential elements which give rise thereto concur. condition, bring the appropriate actions for the preservation of
Condition is not an essential element; it is only an accidental element his right.
of the obligation.
The debtor may recover what during the same time he
The reason is because the condition is only accidental element of a has paid by mistake in case of a suspensive condition.
contract. An obligation can exist without being subject to a condition.
Consequently, once the event which constitutes the condition is Rights pending fulfillment of suspensive condition
fulfilled thus resulting in the effectivity of the obligation, its effects (1) Rights of creditor- He may take or bring appropriate actions
must logically retroact to the moment when the essential elements for the preservation of his right, as the debtor may render
which gave birth to the obligation have taken place and not to the nugatory the obligation upon the happening of the condition.
moment when the accidental element was fulfilled.  Action for prohibition restraining the alienation of
*Note:applicable only to consensual contracts (perfected upon the thing pending the happening of the
meeting of the minds) and not to real contracts(perfected by delivery) suspensive condition;
 Action to demand security if the debtor has
(2) In obligations to do or not to do- No definite rule. The courts become insolvent;
are empowered by the use of sound discretion and bearing in mind  Action to set aside alienations made by the
the intent of the parties, to determine in each case, the retroactive debtor in fraud of creditors;
effect of the suspensive condition that has been complied with. It  Actions against adeverse possessors to interrupt
includes the power to decide that the fulfillment of the condition shall the running prescriptive period;
have no retroactive effect or from what date such retroactive effect  To have the rights annotated in the registry.
shall take effect.
(2) Rights of the debtor- He is entitled to recover what he has
Retroactive effects as to fruits and interests in obligations to paid by “mistake” prior to the happening of the suspensive
give condition.
• In reciprocal obligations-No retroactivity since the fruits and
interests are deemed to have been mutually compensated.

Art. 1188, par. 1- Protection for the creditor LOSSES
– file an injunction to stop the debtor
When is a thing lost?
– does not necessarily always involves court action in spite a) When it perishes
b) When it goes out of commerce
the wordings of the law. c) When it disappears in such a way that its existence is unknown or
i.e. registration it cannot be recovered.

Art. 1188, par. 2- protection for the debtor Loss without debtor’s fault
- The debtor’s obligation is extinguished if the thing is lost without
Obligation subject to Obligation subject to
suspensive condition period/term his fault
Loss due to debtor’s fault
There is no certainty if the It is certain that the - The debtor’s is obliged to pay damages if the thing is lost due
be fully
obligation will be fulfilled obligation will to his fault
and
demandable DETERIORATION

enforceable. What is deterioration?
A thing deteriorates when its value is reduced or impaired without the
Interests and fruits shall also Interests and fruits shall also fault of the debtor
be delivered when the debtor be delivered when the
paid/delivered by mistake. debtor paid/delivered by Without debtor’s fault
- Impairment to be borne by the creditor
mistake.
With debtor’s fault
Art. 1189. When the conditions have been imposed with the - Obligation is converted into one of indemnity for damages
intention of suspending the efficacy of an obligation - The creditor can choose between:
improvement, loss or deterioration of the thing during the
pendency of the condition: a) Rescission plus damages, or
b) Fulfillment of the obligation plus damages
(1) If the thing is lost without the fault of the debtor, the
obligation shall be extinguished; IMPROVEMENT

(2) If the thing is lost through the fault of the debtor, he What is improvement?
shall be obliged to pay damages; it is understood that - A thing is improved when its value is increased or enhanced by
the thing is lost when it perishes, or goes out of nature or by time
commerce, or disappears in such a way that its
existence is unknown or it cannot be recovered; a) By nature or by time
- shall inure to the benefit of the creditor
(3) When the thing deteriorates without fault of the debtor,
the impairment is to be borne by the creditor. b) At the debtor’s expense
- debtor shall have no other right than that granted to a usurfructory
(4) If it deteriorates through the fault of the debtor, the
creditor may choose between the rescission of the Art. 1190. When the conditions have for their purpose the
obligation and its fulfillment, with indemnity for extinguishment of an obligation to give, the parties, upon the
damages in either case; fulfillment of said conditions, shall return to each other what
they have received.
(5) If the thing is improved by its nature, or by time, the
improvement shall inure to the benefit of the creditor; In case of the loss, deterioration or improvement of the
thing, the provisions which, with respect to the debtor, are laid
(6) If the thing is improved at the expense of the debtor, he down in the preceding article shall be applied to the party who
shall have no right that that granted to the is bound to return.
usufructuary.
As for obligations to do and not to do, the provisions
Requisites: of the second paragraph of Article 1187 shall be observed as
(1) The obligation is a real obligation (to give); regards the effect of the extinguishment of the obligation.
(2) The object is a specific or determinate thing; Effect of Resolutory Obligation BEFORE fulfillment
(3) The obligation is subject to a suspensive condition
(resolutory is also applicable accdg to ULAN)  Obligor/debtor has hope or expectancy during the
(4) The condition is fulfilled; and pendency of the condition
(5) There is loss, deterioration, or improvement of the thing
during the pendency of the condition  If resolutory condition happens, debtor will reacquire
whatever he may have paid or delivered to the
Application: The loss, deterioration or improvement should take obligee/creditor
place after the obligation is perfected and before the condition is
fulfilled.

Example: I’ll give you a car until you should pass the CPA exams. incurred was not willful or could be excused in view of the
surrounding circumstances.
Effect of Resolutory Obligation AFTER fulfillment
 If resolutory condition is not fulfilled, such rights are (3) Right of third person (par 4)- If the thing subject matter of
consolidated – absolute the obligation is in the hands of a third person who acted in
good faith, rescission is not available as a remedy
Retroactivity of Effect
 Effect of signifying the non-existence of the obligation and (4) Substantial violation- The general rule is that rescission will
what is non-existent must not give rise to any effect not be granted for slight breaches of contract; the violation
whatsoever should be substantial as to defeat the object of the parties
 Return to each other what they have received in making the agreement.
 Right to demand reimbursement for all expenses which he
may have incurred in the production, gathering, and (5) Waiver of right- The right to rescind may be waived,
preservation of the said fruits. expressly or impliedly.

Art. 1191. The power to rescind obligations is implied in *Note: Where the contract itself contains stipulations regarding
reciprocal ones, in case one of the obligors should not comply automatic rescission without judicial interbention upon violation of the
with what is incumbent upon him. terms of the contract, the right to rescind is not implied but expressly
stated then judicial permission to cancel or rescind the contract is no
The injured party may choose between the fulfillment longer necessary. The injured party should give notice to the other
and the rescission of the obligation, with the payment of party of the rescission and his chosen remedy.
damages in either case. He may also seek rescission, even after
he has chosen fulfillment, if the latter should become Art. 1192. In case both the parties have committed a breach of
impossible. the obligation, the liability of the first infractor shall be equitably
tempered by the courts. If it cannot be determined which of the
The court shall decree the rescission claimed, unless parties first violated the contract, the same shall be deemed
there be just cause authorizing the fixing of a period. extinguished, and each shall bear his own damages.

This is understood to be without prejudice to the rights Rules:
of third persons who have acquired the thing, in accordance
with articles 1385 and 1388 and the Mortgage Law. 1. the liability of the first infractor shall be equitably tempered by the
courts.
Reciprocal Obligations
 are those which arise from the same cause and in which each  fair to both parties because the second infractor also
derived, or thought he would derive, some advantage for
party is a debtor and creditor of the other, such that the his own act or neglect
performance of one is designed to be the equivalent and the
condition for the performance of the other 2. If it cannot be determined which of the parties first violated the
 Effect: When an obligation has been rescinded or resolved, it is contract, the same shall be deemed extinguished, and each shall
the duty of the court to require the parties to surrender whatever bear his own damages
may have received from the other; in other words, the parties
must be placed as far as practicable in their original situation.  it is presumed that both at about the same time tried to
reap some benefit
Tacit Resolutory Condition (Par.1)
Principle: If one of the parties fails to comply with what is imcumbent
upon him, there is a right on the part of the other to rescind or
“resolve” the obligation.

Remedies:
(1) Action for specific performance (fulfillment) of the obligation
with damages; or
(2) Action for rescission of the obligation also with damages.
*Should be invoked judicially (par 3) except when
stipulated in the contract

Limitations on right to demand rescission:
(1) Resort to the courts- The injured party has to resort to the
courts to assert his rights judicially

(2) Power of court to fix period- The court has discretionary
power to allow a period within which a person in default
may be permitted to perform his obligation if there is a just
cause for giving time to the debtor, as where the default

Term/Period Condition 1. Future
2. Certain
Interval of time which requisites Refers to a fact or 3. Possible, legally and physically
is future and certain event which is future
and uncertain A day certain – understood to be that which must necessarily come,
although it may not be known when
Interval of time that fulfillment A future and uncertain
must necessarily fact or event that may Certainty of event may be either:
come, although it may or may not happen. a) absolutely known (e.g.: May 23, 2010)
not be known when b) relatively known (e.g.: fixing a period several days after
May 23, 2010)
Merely exerts an Influence on Exerts an influence c) totally unknown (day when a person dies)
obligation upon the very
influence upon the Classification of Term/Period
existence of the
time of the obligation itself. A. According to source
1. Voluntary/ conventional – fixed by the will of the parties
demandability or 2. Legal – fixed by law
3. Judicial – fixed by the courts
extinguishment of an
B. According to effect
obligation. 1. Suspensive (ex die or dies a quo) – when the obligation is
demandable only when the day comes
No retroactive effects Retroactive Has retroactive effects 2. Resolutory (in diem or dies ad quem) – when the obligation takes
unless there is an effects effect at once but terminates upon the arrival of the day certain
agreement to the
contrary. C. According to definiteness
1. Definite – when the period is fixed
When a term or a Effect of will of When a condition is 2. Indefinite – when the term or period is not fixed

period is left the debtor left on the exclusive D. According to expression
1. Express – when the period is stipulated in the obligation
exclusively to the will will of the debtor, the 2. Tacit – when from the nature or circumstances, it can be inferred
that a period was intended
of the debtor, the existence of the
E. According to nature
existence of the obligation is affected 1. Ordinary – that which would not prevent the obligation from being
fulfilled despite the lapse of the same in accordance with the rules
obligation is not (Void) governing delay or mora.
2. Essential – which requires that the obligation be performed
affected (potestative condition) precisely and exclusively at the time stipulated without there being a
possibility of its being fulfilled
(potestative term or
Effect of Term or Period
period)  Suspensive – demandable only upon the arrival of the day
certain or expiration of the term
Sec. 2 – Obligations with a Period  Resolutory – fulfillment is demandable at once but it is
extinguished or terminated upon the arrival of the day
Art. 1193. Obligations for whose fulfillment a day certain has certain or expiration of the term
been fixed, shall be demandable only when that day comes.
Effect of Fortuitous Event
Obligations with a resolutory period take effect once, The stipulation that in the event of force majeure, the contract shall
but terminate upon arrival of the day certain. be deemed suspended during the said period does not mean that the
happening of any of those events stops the running of the period the
A day certain is understood to be that which must contract agreed upon to run.
necessarily come, although it may not be known when.
Art. 1194. In case of loss, deterioration or improvement of the
If the uncertainty consists in whether the day will come thing before the arrival of the day certain, the rules in article
or not, the obligation is conditional, and it shall be regulated by 1189 shall be observed.
the rules of the preceding Section.
This is only applicable to obligations to give a determinate thing
Term or Period- interval of time, which exerting an influence on an
obligation as a consequence of a juridical act, either suspends its
demandability or produces its extinguishment.

Obligations with a period- obligations whose
demandability or extinguishment is subject to the expiration of a term
or a period.

Requisites:

Art. 1195. Anything paid or delivered before the arrival of the 2. Interest income
period, the obligor being unaware of the period or believing 3. Safe investment (e.g. Protection against the sudden decline in
that the obligation has become due and demandable, may be the purchasing power of the currency loaned)
recovered, with the fruits and interests.
Art. 1197. If the obligation does not fix a period, but from its
Effect of Advance Payment or Delivery nature and the circumstances it can be inferred that a period was
-If obligor is unaware or believing that payment is due and intended, the courts may fix the duration thereof.
demandable, paid, or delivered something before the arrival of the The courts shall also fix the duration of the period when it
period, he may recover what he has paid or delivered with fruits and depends upon the will of the debtor.
interest. In every case, the courts shall determine such period as may
-apply on “to give” under the circumstances have been probably contemplated by
-If it is voluntary done or done with knowledge that it is not yet due, the parties. Once fixed by the courts, the period cannot be
there can be no right to recover. changed by them
-This is construed in relation to Solutio indebiti or payment of what
is not due. Judicial term or period - when fixed by a competent court, the period
- This pertains to the recovery of thing or money itself, plus the fruits can no longer be judicially changed (Art. 1197, par. 3). It becomes a
or interest accruing from the moment of payment to the date of law governing the contract between the party.
recovery
General Rule: Courts are without power to fix period
There is no recovery (Tolentino)
1. When the obligation is reciprocal, and there has been premature Exceptions: When the Court may fix a period
1. When the obligation does not fix a period, but from its nature and
performance on both sides the circumstances it can be inferred that a period was intended by
2. When the obligation is a loan on which the debtor bound to pay the parties
interest 2. If the duration of the period depends upon the will of the debtor
3. When the period is exclusively for the benefit of the creditor, 3. If the debtor binds himself to pay when his means permit him to
because the debtor by paying in advance loses nothing do so  period.

Art. 1196. Whenever in an obligation a period is designated, it is Cannot be applied to:
presumed to have been established for the benefit of both the - Contracts for services in which no period was fixed by the
creditor and the debtor, unless from the tenor of the same or
other circumstances it should appear that the period has been parties
established in favor of one of the other. - Pure obligations

Benefit of Term or Period Steps/Nature of the Action
1. Ask the court to fix the duration of the term or period
General Rule: When a period is designated for the performance or 2. If time elapsed, compel.
fulfillment of an obligation, it is presumed to have been established for
the benefit of both the creditor and the doctor.  Presumption Effect of Term
Once the period has been fixed by the court, it becomes part of the
Exception: If it be proved that either from the tenor of the obligation or contract, and it cannot be subsequently changed or extended by the
from other circumstances that term has been established in favor of court without the consent of both the parties.
the creditor of the debtor
Two Ultimate Facts:
Term is for the benefit of both parties (Presumption) 1. Facts showing that a contract was entered into imposing on one of
The creditor cannot demand payment and the debtor cannot make an the parties an obligation in favor of the other
effective tender and consignation of payment before the period 2. Facts showing that the performance of the obligation was left to
stipulated. the will of the obligor, or clearly showing or from which an inference
can be reasonably drawn that a period was intended.
Term is for benefit of creditor only (Exception)
- Creditor may demand payment anytime, but the debtor cannot Art. 1198. The debtor shall lose every right to make use of the
compel him to accept payment before the period expires (e.g.: period: [IGIVA]
contract of loan where interest is stipulated)
- Right to refuse any payment before the expiration of the term could (1) When after the obligation has been contracted, he
be waived by acceptance of full or partial payment becomes insolvent, unless he gives a guarantee or
security for the debt;
Term is for benefit of debtor only (Exception)
Debtor may oppose premature demand for payment, but may validly (2) When he does not furnish to the creditor the
pay at any time before the period expires (e.g. contract of loan where guaranties and securities which he has promised;
no interest is stipulated)
(3) When by his own acts he has impaired said guaranties
Why a creditor cannot be compelled to accept payment and securities after their establishment, and when
1. Tax avoidance

through a fortuitous event they disappear2, unless he compelled to receive part of one and part of the other
immediately gives new ones equally satisfactory; undertaking. (1131)
(4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the Classification (CDAF)
period; 1. Conjunctive – all prestations must be performed to extinguish
(5) When the debtor attempts to abscond. obligation
2. Disjunctive – one or some prestations must be performed to
Extinguishment of debtor’s Right to Period extinguish obligation
(1) When after the obligation has been contracted, he 3. Alternative – debtor must perform one of several alternatives,
becomes insolvent, unless he gives a guaranty or security for the choice belongs to debtor UNLESS expressly given to creditor
debt; 4. Facultative – one principal prestation but one or more
 insolvency needs no judicial declaration substitutes, choice belongs to DEBTOR ONLY
 includes any case in which it would be impossible financially for *Absent the indication that it is facultative, the presumption is
that it is ALTERNATIVE because creditor would be at a
the debtor to comply with his obligations disadvantage if the obligation is facultative. Facultative is never
 such insolvency must not be pre-existing; arose after the presumed.

constitution of the obligation Art. 1200. The right of choice belongs to the debtor, unless it
 if there is a guaranty or security for the debt, the debtor, in spite has been expressly granted to the creditor.
The debtor shall have no right to choose those prestations
of insolvency, does not lose his right to the period. which are impossible, unlawful or which could not have been
the object of the obligation. (1132)
(2) When he does not furnish to the creditor the guaranties or
securities which he has promised; Concept:
Alternative Obligation - obligation wherein various things are due,
 such failure renders the original obligation pure and without but the payment of one of them is sufficient, determined by the
any condition, and consequently, the loan become due and choice which as a general rule belongs to the debtor (Luna)
demandable.
Election by Debtor
(3) When by his own acts he has impaired said guaranties or  In alternative obligations, the debtor has the right to choose
securities after their establishment, and when through a fortuitous the method of meeting the obligation, unless the creditor has
event they disappear, unless he immediately gives new ones equally expressly reserved that right to himself.
satisfactory;
Election by Others
There is a difference between effects of impairment and effects of  The right to choose may be granted to the creditor.
disappearance  The choice may also be entrusted by the parties to a third
1. if the guaranty or security is impaired through the fault of person.
the debtor, he shall lose his right to the benefit of the period; - Although this has not been expressly recognized, there is
2. if it is impaired without his fault, he shall retain his right; no reason why it should not be allowed, since it is not contrary
3. if the guaranty or security disappears through any cause, to law, morals, good customs, public order or public policy.
even without the fault of the debtor, he shall lose his right to the  The grant must be expressed, it cannot be implied.
benefit of the period
4. in either case of impairment or disappearance, the debtor Exceptions/ Limitations on the Right to Choose by the Debtor (I-
will not lose his right to period if he gives a new guaranty or security Ex-IOU-OP-PFB)
which is equally satisfactory.
1. The debtor cannot choose part of one and part of the other
(4) When the debtor violates any undertaking, in consideration undertaking.
of which the creditor agreed to the period; a. The creditor cannot be compelled to receive part
of one and part of the other undertaking. [Article
(5) When the debtor attempts to abscond. 1199, paragraph 2 in relation to Article 1248]
 Mere attempt of the debtor disappear or run away from his b. There is a presumption of indivisibility
obligation.
2. He loses the right to choose when the right of choice is
Section 3 – Alternative and Facultative Obligations expressly granted to the creditor.
c. The right of choice belongs to the debtor, unless
Art. 1199. A person alternatively bound by different prestations it has been expressly granted to the creditor.
shall completely perform one of them. The creditor cannot be [Article 1200]

2 Not grammatical or ordinary meaning but sense of “loss” as 3. The debtor shall have no right to choose those prestations
defined by law (Tolentino) which are impossible, unlawful or which could not have
been the object of the obligation. [Article 1200, paragraph

2] N.B.
d. The presence of such undertaking does not 1. When the debtor, to whom the right of choice pertains,
annul the obligation, it as an alternative one if performs one of the prestations with the intent to discharge the
there are other lawful and possible subjects. obligation, he is released because the selection made may be
e. Prestations which could not have been the implied in the fact of performance.
objects of the obligation refers to: 2. Once the choice is made by the debtor (or by the creditor or
 prestations which turn out to be by a third person as the case may be), the obligation ceases to
different from what the parties supposed and be alternative from the moment the selection has been
which do not serve the purpose for which the communicated to the other party. From that moment, both
obligation was contracted; debtor and creditor are bound by the selection.
 prestations which are not yet due and 3. A selection once made is binding on the person who makes it,
demandable; and he will not therefore be permitted to renounce his choice
 prestations which, by reason of and take an alternative which was first opened to him.
accident or some other cause, have acquired
a new character distinct or different from that Creditor’s Consent
contemplated by the parties when the  The law does not require the other party to consent to the
obligation was constituted. choice made by the party entitled to choose.
 A mere declaration of the choice, communicated to the
4. The debtor shall lose the right of choice when among the other party, is sufficient; it is a unilateral declaration of will.
prestations whereby he is alternatively bound, only one is
practicable. [Article 1202] Plurality of Subjects
f. Applies to specific things only  When there are various debtors or creditors, and the
g. The obligation ceases to be alternative, and is obligation is joint, the consent of all is necessary to make the
converted into a simple obligation to perform the selection effective, because none of them can extinguish the
only practicable prestation. entre obligation.
h. The impossibility of the other prestations,  If the obligation is solidary, and there is no stipulation to the
however, must not be due to the creditor’s acts. contrary, the choice by one will be binding personally upon him,
For in such case article 1203 applies. but not as to the others.
i. This article applies only when debtor has the
right to choose. Condition or Term
j. In cases where creditor is granted the right to  The selection made by one party cannot be subjected by
choose, article 1205 will apply. him to a condition or term unless the other party consents
thereto.
5. The debtor loses the right to choose if the period is fixed
When Choice is Effective
solely for the benefit of the creditor and that period has not The choice made by the debtor shall produce legal effect only

arrived yet. (According to Sir Ulan  ) from the time it is communicated to the creditor. Once the choice is
communicated to the creditor, the debtor will no longer be permitted
k. Whenever in an obligation a period is to renounce his choice and take an alternative whcih was first open
to him (Reyes vs. Martinez, 55 Phil. 492).
designated, it is presumed to have been
N.B.
established for the benefit of both the creditor 1. choice is made by the:
a. debtor - debtor shall communicate the choice to the creditor
and the debtor, unless from the tenor of the (D ----> C)
b. creditor - creditor shall communicate the choice to the debtor
same or other circumstances it should appear (C ----> D)
c. third person - third person shall communicate the choice to
that the period has been established in favor of both the debtor and the creditor (T ---> D and C)
2. The making of a choice is NOT a right, but a DUTY. (Jurado)
one or of the other. [Article 1196]
Effect of Choice (LCI)
Art. 1201. The choice shall produce no effect except from the  The effect of notice of choice is to limit the obligation to the
time it has been communicated. (1133) object or prestation selected, with all the consequences which
the law provides.
Notice of Selection or Choice (OWUT) -  The obligation is converted to a simple obligation to
Maybe in any form provided it is sufficient to make the other perform the prestation chosen.
party know that the election has been made. It is not subject to  Once the selection has been communicated, it becomes
any form and may be made: irrevocable.
1. orally; Rationale: To allow a change in the selection after it has been
2. in writing; communicated to the other party, is to expose the latter to
3. tacitly; damages arising from preparations he may make on the
4. other unequivocal means

Tacit declaration may be seen (PAS):
1. in the performance of the debtor who has the right to
choose;
2. in the acceptance of a prestation by a creditor when he has
the right of selection; or
3. when the creditor sues for the performance of the
prestation.

assumption that the prestation selected is the one to be choose. When the creditor is granted the right to choose, Article 1205
performed will apply when only one prestation remains practicable, either
through fortuitous event or due to the fault of the debtor.
Error as to the Obligation
 When the debtor performs one of the prestations, believing Art. 1203. If through the creditor's acts the debtor cannot make a
that he has a simple obligation (an ignorance of the choice according to the terms of the obligation, the latter may
alternatives and on his right to choose), there is no rescind the contract with damages.
declaration of the selection, nor a binding performance of
the obligation. There is payment of what is not due, and the Impossibility Due to the Creditor
debtor can recover the se, in accordance with the  This article is based on the principles of justice.
provisions of the law on Quasi-Contracts.  If through the creditor’s act the debtor cannot make a choice,
he may (RPR):
Delay in the Making of Choice  rescind the contract with damages
Who will make a selection when the entitled party to choose  elect to perform that which remains if there is only one
delays in making his selection? prestation possible (Tolentino)
 The German Doctrine stated that the right to choose  elect those still remaining if several are still possible
passes automatically to the other party when there is delay (Tolentino)
on the part of the party entitled to choose. (according to  Reason for 2nd and 3rd: The rescission does not take place
Tolentino, this is acceptable under our law) automatically but at his option.
Can the creditor enforce the obligation if the debtor has not yet
made his choice? Example
 It is the debtor’s duty to select at the time when the 1. A contractor, for the consideration of P50,000, agreed to either
performance should be effected. If he does not do so, the build a house for X on the latter's residential lot, or construct a road
creditor cannot enforce the obligation. However, the choice to his hacienda. X sells his residencial lot. Because of the
can be made by him (creditor) by applying the principle of impossibility of the prestation to build the house, the contractor may
Article 1167 on obligations to do. either construct the road to the hacienda, or rescind the contract; in
 When the obligation consists of not doing, and the latter case, he may recoveras damages whatever profits he could
the obligor does what has been forbidden him, it have realized if he had constructed the house and received the
shall be undone at his expense. [Article 1167] consideration of P50,000.

 The debtor in such case should be deemed to have 2. D obliged himself to paint the house of C or to paint C's car. If
waived his right to choose in favor of the creditor who may before the due date of the obligation, C sells his car, D can rescind
exercise such right. the obligation plus damages.

Article 1202. The debtor shall lose the right of choice when Art. 1204. The creditor shall have a right to indemnity for
among the prestations whereby he is alternatively bound, only damages when, through the fault of the debtor, all the things
one is practicable. which are alternatively the object of the obligation have been
lost, or the compliance of the obligation has become
Obligation Becomes Simple impossible.

Debtor cannot choose impossible or unlawful prestations. If The indemnity shall be fixed taking as a basis the value of the
all the prestations, except one, are impossible or unlawful, it follows last thing which disappeared, or that of the service which last
that the debtor can choose and perform only that one. The obligation became impossible.
ceases to be alternative, and is converted into a simple obligation to
perform the only feasible or practicable prestation. Impossibility of the Damages other than the value of the last thing or service may
prestations must not be due to the creditor's acts, for in such case, also be awarded. (1135a)
Article 1203 shall apply. (Tolentino)
Effect of Loss of Object
According to Luna, alternative obligation is converted into a This article applies to cases in which the debtor has the right to
simple obligation when (Cc-Cd-Op): choose (this is the General Rule). Article 1205 is applicable only
when the right of choice belongs to creditor (exception).
a. when the choice is made by the debtor is communicated to the
creditor (8 Manresa 181) Loss by Fault of the Debtor
He (debtor) will become liable for damages under the terms of this
b. when the choice has been given to the creditor and the latter's article only when all the prestations become impossible through
choice is communicated to the debtor (Article 1205) his fault.
a. Loss of all - The debtor shall pay the value of the thing lost, plus
c. when among the prestations whereby the debtor is alternatively damages. However, if all the things disappear at the same time,
bound, only one Is practicable (Article 1202) the debtor may choose the value of any of them, plus damages.

Where Creditor may Choose

The article applies only when the debtor has the right to

(Luna) (3) If all the things are lost through the fault of the debtor,
b. Loss of some - The debtor may, without incurring any liability to the choice by the creditor shall fall upon the price of
any one of them, also with indemnity for damages.
pay damages, deliver any of the remainder, or that which
remains if only one subsists. (Luna) The same rules shall be applied to obligations to do or not to do
in case one, some or all of the prestations should become
Effect of Fortuitous Event impossible.
a. If all the prestations become impossible - the obligation is
extinguished, the debtor is not liable for damages Selection by the Creditor
b. If one of the things is lost or one of the prestations cannot be  When the creditor has the right to choose, his selection
performed - the debtor must still comply with the obligation by takes effect from the moment it is communicated to the debtor.
delivering or performing that which he shall choose from  Selection can be express or tacit
among the remainder There is tacit selection when the creditor accepts a
c. If all the things are lost except one - the debtor must still prestation offered by the debtor, or brings an action for the
comply with delivering or performing that which remains enforcement of the prestations.
d. If one or more prestations due become impossible, leaving only
one prestation which becomes impossible by fault of the Effect of Creditor’s Delay
debtor - debtor will be liable for damages, with the value of  The debtor will not incur delay in the performance of the
the last prestation as the basis. obligation, even if there is a definite period fixed.
- Creditor is considered to have waived the period.
Loss of some due to debtor's fault and the last thing due to  There will be delay on the part of the debtor only
fortuitous event when the obligation has become a simple one by
exercise of the creditor of his right to choose.
a. If some of the prestations become impossible by fault of debtor,  Creditor does not make his selection before the period fixed
and then the remaining prestation become impossible by - debtor's duty to perform does not arise because the
fortuitous event - the debtor is liable under this article, but the particular prestation to be performed has not been
basis of the damages will be the value of the last prestation determined
which become impossible through the debtor’s fault. - creditor in such case must be considered in his own inaction
to have waived the period
N.B. From and after the loss except one of the various things,
whether due to fortuitous event or the debtor's fault, the debtor Art. 1206. When only one prestation has been agreed upon, but
shall lose the right of choice (Article 1202) and the obligation the obligor may render another in substitution, the obligation is
converted into a simple obligation. Hence, the loss of the last called facultative.
subsisting prestation due to a fortuitous event extinguishes the
obligation. (Luna)

Example: D obliged himslef to give C a specific ring or a specific The loss or deterioration of the thing intended as a substitute,
watch, or a specific radio. through the negligence of the obligor, does not render him
a. the ring, watch or radio are all lost due to fire and without the liable. But once the substitution has been made, the obligor is
fault of D = obligation is extinguish liable for the loss of the substitute on account of his delay,
b. the ring, watch and radio are lost in that order due to the fault of negligence or fraud. (n)
D = D is obliged to pay the value of the radio plus damages
Distinguished From Facultative

Art. 1205. When the choice has been expressly given to the AS TO ALTERNATIVE FACULTATIVE
creditor, the obligation shall cease to be alternative from the day Contents of
when the selection has been communicated to the debtor. the There are various Only the principal constitutes
Until then the responsibility of the debtor shall be governed by obligation prestations all of which the obligation , the accessory
the following rules: constitute parts of the being only a means to
As to obligation facilitate payment
(1) If one of the things is lost through a fortuitous event, he compliance
shall perform the obligation by delivering that which the May be complied with by May be complied with by the
creditor should choose from among the remainder, or Nullity of the delivery of one of the delivery of another object or
that which remains if only one subsists; prestation objects or by the by the performance of
performance of one of the another prestation in
(2) If the loss of one of the things occurs through the fault prestations which are substitution to that which is
of the debtor, the creditor may claim any of those alternatively due due.\
subsisting, or the price of that which, through the fault
of the former, has disappeared, with a right to damages; The nullity of one The nullity of the principal
prestation does not prestation (i.e. when the
invalidate the obligation object is unlawful or outside
which is still in force with the commerce of man)
respect to those which invalidates the obligation.
have no vice.

Choice Creditor can choose from Creditor cannot demand the Simple Obligation
the remainder substitute even when this is a. concept - A simple obligation is anobligation where only one
Effect of The right to choose may valid. prestation has been agreed upon (Luna)
Loss be given to the creditor Only the debtor can choose b. example - D obliged himslef to give C a specific car on
(fortuitous the substitute prestation October 4, 1976.
event) Only the IMPOSSIBILITY Impossibility of the principal
OF ALL the prestations prestation is sufficient to Compound or Conuctive Obligation
Effect of due without fault of the extinguish the obligation, a. concept - A compound or conuctive obligation is an obligation
Loss debtor extinguishes the even if the substitute is wherein various things are due and is extinguished only by the
(through obligation possible. performance of all of them (Luna)
fault) b. example - D obliged himself to give C on Oct. 4, 1976 a radio
The debtor is not liable if Loss of substitute does not and a piano. To be able to extinguish his obligation D is obliged
other prestations are still make debtor liable, unless to give C on Oct. 4, 1976 both the radio and the piano.
available. substitution has been made
When Substitution Takes Effect
If choice belongs to The debtor is liable  The rule with respect to alternative obligations can be applied
creditor, loss of one by analogy; that is, from the time the debtor communicates to
alternative gives rise to Loss of the substitute before the creditor that he elects to perform the substitute prestation.
liability. substation does not render - From this moment, the substitute prestation is the only
debtor liable one that is due.
 If the principal prestation thereafter becomes impossible,
Nature of Facultative Obligation even by fortuitous event, the debtor would not be relieved but
 Defined as an obligation wherein only one object or prestation would still be obliged to perform the substitute prestation that
has been agreed upon by the parties of the obligation, but he has chosen.
which may be complied with by delivery of another prestation - His obligation has become a simple one to perform the
in substitution. substitute prestation, and he will be liable for damages
 Characteristic feature- only one prestation is due, for his delay, neglect or bad faith in the performance.
- But if the obligor fails to deliver such object or to
perform such prestation, he can still comply with this Section 4 – Joint and Solidary Obligations
obligation by delivering another object or performing another
prestation in substitution. Art. 1207. The concurrence of two or more creditors or of two or
more debtors in one and the same obligation does not imply
 Example: D obliged himself to give C a specific Rolex watch that each one of the former has a right to demand, or that each
with the understanding that D could give his diamond ring as a one of the latter is bound to render, entire compliance with the
substitute. prestation. There is a solidary liability only when the obligation
expressly so states, or when the law or the nature of the
Loss of the Principal Thing obligation requires solidarity. (1137a)

 Due to fortuitous event - the obligation is extinguished and the Joint Obligation (mancomunada simple/ pro rata)
debtor is not obliged to give the substitute - one in which each of the debtors is liable only for a proportionate
part of the debt, and each debtor is entitled to only a
 Due to the debtor's fault - the debtor shall answer for the loss proportionate part of the credit
of the thing due to his fault *example: A, B, and C jointly executed a promissory note worded as
follows:
Loss of Substitute
"We promise to pay to the order of X P9,000.
 Before the substitution is effected, it is not the prestation that (Sgd.) A, B, and C."
is due; only the principal prestation is due and enforceable by
the creditor at that time. -A is liable for P3,000, B for P3,000 and C for P3,000.
- whether due to fortuitous event of fault of the debtor:
does not affect the debtor's liability to deliver the Solidary Obligation (mancomunada solidaria/ joint and several
principal thing (Luna) or in solidum)
-If the substitute prestation becomes impossible due - one in which each debtor is liable for the entire obligation, and each
to the fault or negligence of the debtor, the obligation creditor is entitled to demand the whole obligation.
is not affected and he cannot be held liable for
damages. (Tolentino) When Solidary Exists
- Whatever may be the cause of impossibility of the General Rule: The mere concurrence of two or more creditors or
substitute prestation is immaterial.
two or more debtors in one and the same obligation does NOT
 After the substitution imply solidarity.
a. due to fortuitous event - obligation is extinguished
b. due to the debtor's fault - debtor shall be liable for the Kinds of Solidarity (APM)
loss or deterioration of the substitute (on the account of his a. Active - solidarity among creditors
delay, negligence or fraud)
*example: A obliged himself to pay P30,000 to solidary
creditors B, C, anf D. Each of the creditors is entitled to demand

payment of the whole P30,000. Thus, B, or C, or D can demand c. when the nature of the obligation requires solidarity

payment of P30,000 from A. Effect of Joint Liability
a. the demand by one creditor upon one debtor, produces the
b. Passive - solidarity among debtors effects of default only with respect to the creditor who
demanded and the debtor on whom the demand was made, but
*example: A, B and C executed a promissory note worded not with respect to others.

as follows: b. the interruption of prescription by the judicial demand of one
creditor upon a debtor does not benefit the other creditors nor
"I promise to pay X or order the sum of P30,000. interrupt the prescription as to the other debtors. Similarly,
partial payment or acknowledgment made by one of several
(Sgd.) A, B, and C." joint debtors does not stop the running of the statute of
limitations as to the others.
- X is entitled to demand payment to demand the payment of
c. the vices of each obligation arising from personal defect of a
P30,000 from A, or from B, or from C. particular creditor or debtor does not affect the obligation or
rights of the others.
c. Mixed - solidarity on the part of the creditors and debtors
d. the insolvency of a debtor does not increase the responsibility
*example: A, B, and C executed a promissory note worded of his co-debtors, nor does it authorize a creditor to demand
anything from his co-creditors.
as follows:
e. in Joint Divisible Obligation (JDO)
"We do hereby slidarily promise to pay to the order of solidary - the defense of res judicata is not extended from one

creditors L, M, and N the sum of P30,000. debtor to another.
- nature of the obligation is susceptible to partial fulfillment
(Sgd.) A, B, and C
(Dean Ulan)
- L, or M, or N shall be entitled to demand payment of the whole - example: A and B jointly obliged themselves to give C the

P30,000 from A, or from B or from C. sum of P60.00.

Joint debtors - solidary creditors Art. 1209. If the division is impossible, the right of the creditors
may be prejudiced only by their collective acts, and the debt can
*example: A and B executed a promissory note worded as follows: be enforced only by proceeding against all the debtors. If one of
the latter should be insolvent, the others shall not be liable for
"We promise to pay to solidary creditors C and D P10,000. his share. (1139)

(Sgd.) A, B" Joint Indivisible Obligations (JIO)
- Several debtors and creditors, but the prestation is indivisible,
- C or D as solidary creditors shall be entitles to demand payment of the obligation is joint, unless solidarity has been stipulated.
- preserves the two characteristics of the joint obligation, in that
the whole P10,000 . But since t he debtors are bound jointly, no creditor can do an act prejudicial to others, and no debtor
can be made to answer for the others. However, its fulfillment
C or D shall be entitled to demand payment of no more than P5,000 requires the concurrence of all the debtors although each for his
part. On the side of the creditors, collective action is expressly
from A and another P5,000 from B. required for acts which may be prejudicial.
- example: A and B jointly obliged themselves to give C a
Solidary debtors - joint creditors specific cow.
*example: A and B executed a promisory note worded as follows:
"We do hereby solidarily promise to pay to the order of C and D Effects on Creditors (according to Luna)
P10,000. a. To be able to compel performance of th eobligation, all the
creditors should act collectively. A demand by one or some but
(Sgd.) A, B" less than all the creditors is not effective.
- As solidary debtors, A or B may be compelled to pay the whole
P10,000. But since the creditors are bound jointly, C is entitled to b. The right of the creditors may be prejudiced only by their
demand the payment of P5,000 from A, or B and D is entitled to collective acts.
demand payment of the other P5,000 from A or B.
- all creditors renounce the obligation: extinguished
Art. 1208. If from the law, or the nature or the wording of the - renunciation made by one creditor w/o consent of the
obligations to which the preceding article refers the contrary other: only the share of the former is extinguished; other
does not appear, the credit or debt shall be presumed to be creditors can no longer demand the delivery of the thing;
divided into as many shares as there are creditors or debtors, obligation is converted into an obligation to pay its value
the credits or debts being considered distinct from one another,
subject to the Rules of Court governing the multiplicity of suits.
(1138a)

Joint Obligation
a. The debt shall be divided into as many equal shares as there
are creditors or debtors, the credits on the debts being
considered disticnt from each other. (Luna)
b. In case of non-payment, only one action should be files in
court. (Luna)

Presumption of Joint Character
When two persons are liable under a contract or under

judgment, and no words appear in the contract or the judgment to
make each liable for the entire obligation, the presumption is that
their obligation is joint.
3 Exceptions to the presumption (ELN):
a. when the obligation expressly states that there is solidarity
b. when the law requires solidarity

Effects on Debtors (according to Luna) obliged themselves to give C a specific horse
a. The debt can be enforced only on proceedings against all the 2. according to Dean Ulan
creditors. A demand against one or some but less than all the
debtor/debtors against whom the demand has been made are a. if one of the debtors refuses to deliver the thing, the
not obliged to deliver the thing. other debtors cannot enforce the delivery (the obligation
becomes divisible)
b. extinguish the obligation - payment should be made to all the b. refusal of the debtor to deliver the thing without just
creditors cause - liable for damages

c. if any of the debtors is insolvent - the other shall not be liable Art. 1211. Solidarity may exist although the creditors and the
for his share debtors may not be bound in the same manner and by the same
periods and conditions. (1140)
d. any of the debtors refuses to deliver the thing - obligation is
converted into an obligation to pay the value of the thing Kinds of solidarity (APM):
a. Active solidarity - one that exists among creditors.
 the value of the thing shall be shared by all debtors Creation of a relationship of mutual agency among the solidary
creditors by virtue of which each debtor is empowered to exercise
 whole damages shall be borne by the debtor who against the debtor or debtors not only the rights which correspond to
does not comply with this undertaking him, but also all the rights which correspond to the other creditors,
with the consequent obligation to render an accounting of his acts to
Effect of breach - if one of the joint debtors fails to comply with his such creditor.
undertaking the obligation can no longer be fulfilled or performed.
The obligation now is converted into one of indemnity for damages. Juridical Effects:
1. Since it is a reciprocal agency, the death of a solidary creditor does
Effect of insolvency of a debtor - if one of the joint debtors shall be not transmit the solidary to each of his heirs but to all of them taken
insolvent, the others shall not be liable for his share. together.
2. Each creditor represents the others in the act of receiving
N.B. Absence of stipulation of how much is the actual share of the payment, and in all other acts which tend to secure the credit or
debtors, the presumption is equal. (Dean Ulan) make it more advantageous. Hence, if he receives only a partial
payment, he must divide it among the other creditors. He can
Art. 1210. The indivisibility of an obligation does not necessarily interrupt the period of prescription or render the debtor in default, for
give rise to solidarity. Nor does solidarity of itself imply the benefit of all other creditors.
indivisibility. (n) 3. One creditor, however, does not represent the others in such acts
as novation, compensation and remission. In these cases, even if the
As to nature Indivisibility Solidarity debtor is released, the other creditors can still enforce their rights
Prestation which against the creditor who made the novation, compensation or
As to requisites constitutes the object Legal tie or remission.
of the obligation vinculum to the 4. The credit and its benefits are divided equally among them to
As to effect of subjects of the divide differently. Hence, once the credit is collected, an accounting
breach Plurality of subjects is obligation and distribution of the amount collected should follow.
not required 5. The debtor may pay to any solidary creditor, but if a judicial
Plurality of demand is made on him, he must pay only to the plaintiff.
When the obligation subjects is 6. Each creditor may renounce his right even against the will of the
is converted into one indispensable debtor, and the latter need not thereafter pay the obligation to the
of indemnity for former.
damages because of When there is
the breach, liability on the part b. Passive solidarity - one that exists among debtors.
indivisibility of the of the debtors Each debtor can be made to answer for the others, with the right on
obligation is because of the part of the debtor-payor to recover from the others their
terminated breach, the respective shares. Similar to mutual guaranty.
solidarity among
the debtors Juridical Effects:
remains 1. Each debtor can be required to pay the entire obligation; but after
payment, he can recover from the co-debtors their respective shares.
N.B. 1. according to Luna: 2. The debtor who is required to pay may set up by way of
a. solidarity does NOT imply indivisibility (An obligation compensation his own claim against the creditor, in this case, the
may be divisible even if it is solidum) effect is the same as that of payment.
b. indivisibility does NOT imply solidarity (mere fact that 3. The total remission of debt in favor of a debtor releases all the
the object of the obligation is not susceptible of partial debtors; but when remission affects only the share of one debtor, the
performance does not mean that each of the debtor is other debtors are still liable for the balance of the obligation.
liable for the entire obligation.) 4. All the debtors are liable for the loss of the thing due even if such
c. example of: loss is caused by the fault of only one of them, or by fortuitous event
after one of the debtors has incurred delay.
 solidary divisible obligation: A and B solidarily
obliged themselves to give C P50,000 on March 15,
2011 and P50,000 on May 1, 2011.

 solidary indivisible obligation: A and B solidarily

5. The interruption of prescription as to one debtor affects all the however, be valid against the creditors who did not give their
others; but renunciation by one debtor of prescription already had consent.
does not prejudice the others, because the extinguishment of the *example: D is indebted to solidary creditors A dn B for P10,000. A
obligation by prescription extinguishes also the mutual representation may, even without the knowledge of B, demand the payment of
among the solidary debtors. P10,000 because each one of the solidary creditors may do whatever
6. The interests due by reason of the delay of one of the debtors are may be useful to the other creditors may do whatever may be useful
borne by all of them. to the other creditors even without the knowledge of the latter. If w/o
the knowledge of A, B remits the obligation, the obligation of D would
c. Mixed solidarity- on the part of both creditors and debtors be extinguished, but B is obliged to give to A his share of P5,000.

N.B. According to Luna: Art. 1213. A solidary creditor cannot assign his rights without
Solidarity does NOT require that the parties be bound in the same the consent of the others.
manner. An obligation is solidary if the parties agreed or the law - solidary creditor is an agent of the other creditors
intended it to be in solidum. - mutual agency implies mutual confidence which may take into
*example: account the personal qualifications of each creditor

X, Y and Z solidarily onliged themselves to give C P15,000 Effects of Unauthorized transfer:
according to the following terms: It is implied, that such cannot be made, and the co-creditors and
debtors are not bound to recognize the assignment, and the
X to pay on demand; assignee is not regarded as a solidary creditor.
Y, in 2012; - payment to that assignee is considered a payment to a third person
Z, if C passes the CPA exam. and will not extinguish the obligation
- Today, C can demand payment of P5,000, the share of X - a suit filed by such assignee will not interrupt the prescription
out of the P15,000, against X or Z. This is so because the - the creditor-assignor still has a liability to his co-creditors for
shares of Y and Z have not yet matured. In 2012, C can damages which may have been incurred by them as a result of the
demand P5,000, the share of Y against X and Z. The assignment
moment C passes the CPA exams, C may demand P5,000, If the assignment is made to a co-creditor, consent is not necessary
the share of Z against any of the three debtors. because the mutual confidence from the other creditors already exist.

Art. 1212. Each one of the solidary creditors may do whatever Art. 1214. The debtor may pay any one of the solidary creditors;
may be useful to others, but not anything which may be but if any demand, judicial or extrajudicial, has been made by
prejudicial to the latter. one of them, payment should be made to him.
- consequence of the relationship of mutual agency existing among
solidary creditors Judicial Demand:
Generally, each solidary creditor is a tacit mutual representative of
Beneficial acts of the creditor (DIDS): each other in demanding payment. But, if one creditor sues the
 may demand the obligation to one, some or all debtors; debtor/s, the tacit representation by the other creditors is considered
 may interrupt prescription; revoked.
 constitute the debtor in default; or
 bring suit so that the obligation may produce interest.  Creditors who did not sue will lose their representation of
the others
Effect of beneficial act: if obligation has been performed, the other
creditors will have the right to demand from the creditor who received  A payment to the creditor/s who did not sue will be
the payment the shares corresponding to them. considered as payment to a third person, in so far as the
shares of the others in the credit are concerned.
Prejudicial acts of the creditor:
Remission is an act that is literally prejudice to the creditors, but it is  If payee did not turn the shares of the other creditors who
authorized under Article 1215, along with novation, compensation, demanded, the debtor can still be required to pay the
and merger or confusion. creditor-plaintiff minus the share of the payee
To harmonize:
Art. 1212 = effect of the prejudicial acts among the creditors The action, however, does not definitely eliminate the other creditors,
themselves but only during the time the effect of the actions exist. If action is
Art 1215 = effect of the prejudicial acts among the creditors and the dismissed, the other creditors may in turn sue the debtor.
debtor/s. *which are valid*
*Creditors have rights that subsist and can be enforced against the Extrajudicial Demand:
creditor who performed the act alone. (Tolentino) Demand made extrajudicial has the same effect as judicial demand in
Effect of prejudicial act: indemnifying the other creditors for terminating the mutual representation of among the solidary creditors
damages. and making the creditor who demanded as the agency alone.
Tolentino: If one creditor should make an extrajudicial demand, and
Mutual Agency then takes no further step to enforce collection in court, all the other
Solidary obligation implies mutual agency. Hence, each one of the creditors are barred forever from filing an action to demand payment
creditors may, even without the knowledge of the other, do whatever judicially, and the debt may never be collected. In this case, such
may be useful to them. Although prejudicial acts will produce legal same effect is juridically erroneous and impractical.
effect and extinguish the obligation of the debtor, the same will not,

 If all or several creditors demand payment separately, the debtor Compensation – a mode of extinguishment to the concurrent
should pay the first one who notified him. amount, the obligation of those persons who in their own right are
reciprocally debtors and creditors of each other
 If they demand at the same time, or in a single action or written
demand, the debtor preserves his right to choose whomever Confusion – merger of qualities of creditor and debtor in one and the
payment will be made by him same person with respect to one and the same obligation
If the compensation or confusion is partial, and there is doubt as to
 If partial payment has been made before the demand arises, the what part of the debt it should be applied, the rules on application of
debtor can pay the creditor the full obligation minus the payments shall govern. If it is total, the obligation is extinguished,
obligation he already performed. To not do so will result in unjust leaving the liability for reimbursement within each group.
enrichment.
Remission – is an act of pure liberality by virtue of which, the
 In mixed solidarity, the debtors who were not demanded by the creditor, without having received any compensation or equivalent,
creditor to pay him can still pay the other creditors who did not renounces his right to enforce the obligation, thereby extinguishing
make the demand. the same either in its entirety or in the part or aspect thereof to which
the remission refers.
Payment of Solidary Obligation
General Rule: payment to any one of the solidary creditor  When one creditor makes the remission = extinguishes the
obligation to the extent which is made, but the creditor shall be
extinguishes the obligation. If any demand has been made by any of liable to his co-creditors for their shares
the creditors, the debtor against whom the demand was made should  When several of the creditors make the remission = all will
pay only to that creditor. If he pays to any other creditor, the payment be liable for the shares of the creditors who did not remit, and if
is not valid. one is insolvent, his share shall be made up by the others who
concurred in the remission.
Example  Remission covers the entire obligation = obligation is totally
A and B are solidary indebted to solidary creditors C and D in extinguished, the entire juridical relation among the debtors is
terminated altogether
the amount of P10,000. A may pay P10,000 to C or D. However, if a  Remission in favor of the debtor, if partial = character as
demand is made only to A solidary debtor still remains
 Remission in favor of the debtor, if full = ceases to have
Art. 1215. Novation, compensation, confusion or remission of any relation with the creditors, unless the continuation of his
the debt, made by any of the solidary creditors or with any of solidary relation has been expressly reserved. However he is
the solidary debtors, shall extinguish the obligation, without still bound with respect to his co-debtors, in case of insolvency
prejudice to the provisions of Article 1219. of one debtor, the released debtor still has to pay his share in
The creditor who may have executed the any of these acts, as the portion of the insolvent. He also cannot recover anything
well as he who collects the debt, shall be liable to the others for from his co-debtor, since remission is a gratuitous act.
the share in the obligation corresponding to them. * Rules with regards to the debtors shall not apply when the debt was
fully paid by anyone of the debtors before the remission was made.
Novation – extinguishment of an obligation by the substitution or
change of the obligation by a subsequent which extinguishes or Effects of the Acts:
modifies the first, either by changing the object or principal  Between creditors and debtors – any of the acts will extinguish
conditions, or by substituting the person of the debtor, or by
subrogating a third person in the third rights of the creditor. the obligation, therefore no creditor may sue the debtor after
such act
The solidary debtor may release the others by binding himself alone  Between co-creditors – any act of them in extinguishing the
in their place in favor of the creditor. The debtor who effects the obligation shall not prejudice the rights of the other creditors to
novation cannot, by himself, bind the other to a new debt without recover their shares in the obligation to the creditor who effected
their consent. any of the acts mentioned.
 Between co-debtors – the debtor whose obligation was
Mere extension of time for payment given by the creditor to a solidary extinguished cannot recover from his other co-debtors more
debtor does not release the others from the obligation. than their respective shares in whatever he may have given up
*In suretyship: as sureties are bound in solidum, material alteration or lost as the consideration for the extinguishment of the
made by the creditor and the principal debtor, without the knowledge obligation
and consent of the sureties, completely discharges the sureties from  In total compensation, he can recover from the others their
all liability in the contract of suretyship.
respective shares in the obligation, since he has given his
An extension of time granted to the debtor by the creditor own credit to extinguish the obligation
extinguishes the liability of the others, but where the sureties are  In merger, if one co-debtor acquires the whole credit, he
liable for different payments, an extension of time with one or more can still demand from the other debtors their respective
will not affect the liability of the sureties for the others. shares
 In remission, the debtor whose remission was made cannot
Dation in payment – the delivery of a specific object as a substitute recover anything from the other debtors since he gives or
for the performance of the obligation loses nothing.

 if in a form of a promise, it amounts to a novation
 it should be treated as a payment, as it is essentially so

Art. 1216. The creditor may proceed against any one of the He who made the payment may claim from his co-debtors only
solidary debtors or some or all of them simultaneously. The the share which corresponds to each, with the interest for the
demand made against one of them shall not be an obstacle to payment already made. If the payment is made before the debt
those which may subsequently be directed against the others, is due, no interest for the intervening period may be demanded.
so long as the debt has not been fully collected. When one of the solidary debtors cannot, because of his
- the solidary debtors may be sued simultaneously in one suit or insolvency, reimburse his share to the debtor paying the
successively in different actions. obligation, such share shall be borne by all his co-debtors, in
- this article is not of public interest, therefore the parties may validly proportion to the debt of each.
stipulate that the solidary debtors can only be sued simultaneously or
provide for the order in which the debtors may be sued individually. *Payment – consists in the delivery of the thing or the rendition
(rendering) of the service whish is the object of the obligation.
Passive Solidarity and Suretyship: *Interest – compensation for the use of borrowed money

Similarities: Payment by a Solidary Debtor:
- results in the release from liability of the other debtors to the
1. stands for some person creditor.
- Where one of several persons who are sued upon a joint and
2. after payment, may require that they be reimbursed several liability elects to pay the whole, such person may be properly
substituted in the same action as plaintiff for the purpose of enforcing
Distinctions: contribution from his forme associates.
- Gives birth to a right in favor of the paying debtor, and imposes on
Solidary Debtor Surety the other co-debtors the duty to pay him their shares in the
discharged obligation.
Liable not only for his co- Liable only for his debtor’s - The right of the paying co-debtor to be reimbursed is not based on
the original obligation but upon the payment made by him, hence he
debtor’s obligation, but also for obligation is only entitled to claim from his co-debtors the share pertaining to
each with interest on the amount advanced.
his own
 If partial payment has been made, the solidary debtor can only
Responsibility to co-debtor is Responsibility to co-debtor is recover reimbursement from the co-debtor only in so far as hi
payment exceeded his share of the obligation.
primary subsidiary
 In reimbursement, when the solidary debtor pays the total
Extension of time given by the Extension of time given by the obligation, the resulting obligation of the other co-debtors to
reimburse him becomes joint.
creditor would not release the creditor would release a surety
 If one, by insolvency, cannot pay his share in the
solidary debtor or solidary guarantor reimbursement, the others, including the one who paid, shall
bear such share proportionately.
Liability of Solidary Debtors:
Note: Kat and our other classmates said that since the article stated
 the creditors may bring an action against the debtors and “in proportion to the debt of each”, the share of the insolvent should
sureties, either alone or together with the principal debtor, not be divided equally among the remaining co-debtors, but should
even if the surety is not included in the first suit. be dependent in their share, in cases when each debtor is required
to pay different amounts of debt. To get this, according to Rayn, we
 If the principal debtor is held in default, the surety is also held should first add the shares of the remaining co-debtors, and after get
in default, since his obligation is as the same as the principal the proportion of each debtor based on the sum. For example, A, B,
and C are solidary debtors to pay a total of $900,000. A will pay
 Solidary co-debtor is not released from his liability even if the $400,000, B will pay $300,000, and C will pay $200,000. A paid the
creditor brought an action against a co-debtor first, caused whole amount already but B became insolvent. So add A and C’s
execution on the properties of such co-debtor, which was later share first = 400,000+200,000=600,000. Then divide the shares from
voluntarily relinquished due to a valid third-party claim the sum, A=4/6 or 2/3 and C=3/6 or 1/3. Then apply it to B’s share,
which is $300,000. A’s share=(2x300,000)/3=.200,000 and C’s
Judgment as Regards Creditors: share=(1x300,000)/3=100,000. I’m not sure if this is really right but I
hope it helps. =)Art. 1218. Payment by a solidary debtor shall not
 If it is favorable to the creditor, it inures to the benefit of co- entitle him to reimbursement from his co-debtors if such payment is
creditors. made after the obligation has prescribed or become illegal. (n)
 No reimbursement if:
 If it is adverse to the creditor-plaintiff, it can be set up against
the other co-creditors in subsequent actions, unless it is founded  Obligation PRESCRIBES
on a cause personal to the creditor-plaintiff in the first action.  Obligation becomes ILLEGAL (Law has been

Judgment as Regards Debtors: passed, making such prestation illegal)

 If it is favorable to the creditor-plaintiff, but the defendant-debtor  Prescriptive period of actions:
is insolvent, the other debtors can still be sued until the debt is  Within 10 years (upon a written contract, upon an
fully paid. Judgment against one debtor cannot be enforced
against the others; a new action is needed. A judgment rendered
against several defendants can be revived against only one of
them.

 If it is favorable to the defendant-debtor, it amounts to an
extinguishment of the obligation with respect to him, and it must
necessarily inure to the benefit of the other co-debtors, except
when the cause is personal to the defendant-debtor.

Art. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary debtors offer
to pay, the creditor may choose which offer to accept.

obligation created by law) construed as to permit the least transmission of rights.
 Within 6 years (upon an oral contract, upon a
 The remission of the share of the one of the debtors does not
quasi-contract) affect his obligation to contribute to the share of an insolvent co-
 Within 4 years (upon an injury to the rights of the debtor. In other words, in the given example the debtor whose share
was remitted must pay P500 to the debtor who paid the entire
plaintiff, upon a quasi-delict) balance of P8,000.
 The statute of limitations, however, may be
 Tolentino: This view is justified by: In every solidarity, there is a
superseded or modified by a contract between dual relationship—(1) the relation between the creditor and the
parties. debtors; (2) the relation among the debtors themselves. When a
creditor remits the share of any debtor, he can affect only the first
 Neither can a solidary debtor who pays the obligation which has relation, because he is totally a stranger to the second relation. This
already prescribed recover from the creditor has been paid by him relationship among the debtors is expressly governed by law in the
last paragraph of Art. 1217, which imposes on every co-debtor the
 In other cases, where the obligation no longer exists, he can duty of contributing to the share of the insolvent debtor. This is a
recover from the creditor the amount paid, under the rules on quasi- provision that does not affect the creditor, and no act of the creditor
contract. should affect the relation to the debtors under it. the credit cannot
therefore, by his act exempt any debtor from the obligation imposed
Art. 1219. The remission made by the creditor of the share by it.
which affects one of the solidary debtors does not release the
latter from his responsibility towards the co-debtors, in case the  The share of the insolvent must be divided only among the other
debt had been totally paid by anyone of them before the co-debtors, excluding the one whose share has been remitted. In
remission was effected. (1146a) other words, the debtor who paid the whole obligation of P8,000, in
the example given, can recover only from the other two solvent
 To exempt the co-debtor whose part is thus subsequently remitted debtors who shall reimburse one-third each of the amount paid to the
will give way to fraud. creditor

 Any belated (delayed) remission by the creditor of the share of any  Tolentino: Like the first, this is also unacceptable
of the debtor has no effect on the internal relationships of the co- because it makes the remission of the share of
debtors. one debtor increase the burden of the other
debtors without their consent.
 A, B, C solidarily owe D P1,500.00. B paid the entire
obligation. After which, D remitted the share of C. B can Art. 1220. The remission of the whole obligation, obtained by
collect P500.00 each from A and C even if the share of C in one of the solidary debtors, does not entitle him to
the obligation had been remitted. reimbursement from his co-debtors. (n)
 There is nothing to be reimbursed because he did not not spend
 After the prior payment of the entire obligation, there is nothing to any money, the remission being a gratuitous act.
remit because the obligation has been extinguished.
Art. 1221. If the thing has been lost or if the prestation has
 A, B, C solidarily owe D P1,500.00. D remitted the become impossible without the fault of the solidary debtors, the
share of C. Thereafter, B paid the entire obligation. B can obligation shall be extinguished.
collect P500.00 from A but not from C. However, B may ask If there was fault on the part of any one of them, all shall be
D to give back P500 which is the supposed-to-be share of responsible to the creditor, for the price and the payment of
C. damages and interest, without prejudice to their action against
the guilty or negligent debtor.
 What is the effect of the insolvency of anyone of the remaining If through a fortuitous event, the thing is lost or the performance
debtors? has become impossible after one of the solidary debtors has
incurred in delay through the judicial or extrajudicial demand
In the above case, there are three views: upon him by the creditor, the provisions of the preceding
 The creditor should bear the loss due to insolvency. Thus, in the paragraph shall apply. (1147a)
example given the share of the insolvent debtor is P2,000, and each
of the other four debtors should contribute P500 to cover it. The P500  Application is limited to the case of non-performance because of
due from the debtor whose share was remitted, is considered as the loss of the thing or impossibility of the prestation that is due—
included in the remission; hence, the debtor who paid the full balance
of P8,000 can recover the P500 from the creditor as a payment of  Fortuitous event (debtor has no fault or delay)—
what is not true. obligation is extinguished

 Tolentino: This view presumes that the creditor has  Fault of any of the debtor—all are liable because
remitted more than the share of the debtor he has of their mutual agency
favoured; it is juridically unsound to consider a gratuitous
act as extending beyond the intent of the grantor-creditor.
The rule is that gratuitous acts should be restrictively

 Fortuitous event (after a debtor has incurred in delay)  A thing is considered indivisible when if divided into
—obligation is converted into obligation to pay indemnity,
consisting of the price, damages and interest. The creditor parts, its value is diminished disproportionately. A thing is
can recover such to any of the debtors, guilty or not. In the
event that the innocent debtor pays the indemnity, the guilty divisible is when each one of the parts into which it is
should reimburse him. The guilty debtor shoulders all the
consequences of the loss because of his fault and delay; divided forms a homogenous and analogous object to
hence, he cannot reimburse from the innocent ones the
indemnity. the other parts as well as to the thing itself

 If the thing due was not lost, but there is merely a delay, fraud or  Kinds of division—
negligence on the part of one of the solidary debtors, all (including
the innocent) debtors will share in the payment of the PRINCIPAL 1. Qualitative - thing is not entirely
prestation. The damages and interest imposed will be borne by the
guilty debtor. homogenous ex. A and B are heirs of C.

Art. 1222. A solidary debtor may, in actions filed by the creditor, They agreed to divide their inheritance
avail himself of all defenses which are derived from the nature
of the obligation and of those which are personal to him, or as follows: to A – a house and lot home
pertain to his own share. With respect to those which personally
belong to the others, he may avail himself thereof only as appliances and to B – a rice field, a car
regards that part of the debt for which the latter are responsible.
(1148a) and P10,000 cash.
 Defenses available to a solidary debtor when sued by the creditor:
2. Quantitative-thing divided is
 Defenses derived from the nature of the
obligation—those which may contribute to homogenous; the parts themselves may
weaken or destroy the vinculum juris existing
between the debtor and creditor such as be separated ex. If the inheritance is a
payment, prescription, remission, statute of
frauds, presence of vices of consent, etc. rice field, the partition is by metes and

 Defenses personal to the debtor-defendant—may bounds into equal parts.
be either total or partial; such as minority, insanity
and others purely personal to him; if the personal 3. Ideal—when the parts are not separated
takes the form of special terms or conditions
affecting his part of the obligation, he may utilize in a material way, but there are assigned
them only with respect to his part, but he can still
be sued for the portions not subject to the terms to several persons the undivided
or conditions because he is solidary liable.
portions pertaining to them, as in co-
 Defenses personal to the other solidary debtors
—the debtor being sued may also set up ownership ex. suppose the car and the
defenses which are personal to the other solidary
debtors, whether such defenses affect the rice field, in the first example, were
capacity or consent of such debtors or only refer
to terms or conditions affecting their shares. inherited by both A and B. As co-owners,

SECTION 5. - Divisible and Indivisible Obligations their one-half shares in the car are not

Art. 1223. The divisibility or indivisibility of the things that separable in a material way but only
are the object of obligations in which there is only one
debtor and only one creditor does not alter or modify the mentally. Similarly, before the land is
provisions of Chapter 2 of this Title. (1149)
actually divided between A and B, they

are merely co-owners, and neither one

of them can say that he is the absolute

owner of a specific portion thereof.

 Divisible obligation—one which is susceptible of
performance; the debtor can legally perform the
obligation by parts and the creditor cannot demand a
single performance of the entire obligation

 Indivisible obligation—when it cannot be performed in
parts

 Divisibility or indivisibility of the obligation—refers to
the performance of the prestation and not to the thing
which is object thereof; it should not be confused with
the divisibility of the thing. The thing may be divisible, yet
the obligation may be indivisible.

Example: D obliged himself to deliver to B a specific
car on November 15. This obligation is indivisible
because it is not capable of partial performance. The car
must be delivered at one time as a whole.

Kinds of Indivisibility:

(1) Legal indivisibility – where a specific
provision of law declares as indivisible, obligations
which, by their nature, are divisible (Art. 1225, par.3)

(2) Conventional indivisibility – where the will of
the parties makes as indivisible, obligations which,
by their nature, are divisible (Art. 1225, par.3)

(3) Natural indivisibility – where the nature of Art. 1225. For the purposes of the preceding articles,
the object or prestation does not admit of division, obligations to give definite things and those which
e.g., to give a particular car, to sing a song etc. are not susceptible of partial performance shall be
deemed to be indivisible.
Where there is only one creditor and one debtor, When the obligation has for its object the execution of a
the latter has to perform the obligation in its totality,
whether or not the prestation is divisible. Unless certain number of days of work, the accomplishment of
there is an express stipulation to that effect, says
Article 1248, the creditor cannot be compelled work by metrical units, or analogous things which by
partially to receive the prestations in which the
obligation consists; and in accordance with Article their nature are susceptible of partial performance, it
1232, an obligation is not deemed paid unless the
thing or service in which the obligation consists has shall be divisible.
been completely delivered or rendered, as the case
may be. However, even though the object or service may be

Art. 1224. A joint indivisible obligation gives rise to physically divisible, an obligation is indivisible if so
indemnity for damages from the time anyone of the
debtors does not comply with his undertaking. The provided by law or intended by the parties.
debtors who may have been ready to fulfill their
promises shall not contribute to the indemnity beyond In obligations not to do, divisibility or indivisibility shall be
the corresponding portion of the price of the thing or of
the value of the service in which the obligation consists. determined by the character of the prestation in each
(1150)
particular case. (1151a)
 Indivisible joint obligation—the object is indivisible but
the liabilities of the parties is joint  True test of divisibility: whether the obligation is
susceptible of partial compliance or not.
4. To enforce it, Article 1209 has  Factors which determine whether an obligation is
established the necessity of collective divisible or not:
fulfilment and the action must be against
all the debtors 5. Will or intention of the parties
(expressed or implied)
 Solidarity and indivisibility in obligations are NOT
identical; neither does one imply the other. 6. Objective or purpose of the stipulated
prestation
Solidarity Indivisibility
Refers to the vinculum and Refers to the prestation of 7. Nature of the thing
therefore principally to the the object of the obligation 8. Provisions of law affecting the prestation
subjects of the obligation  In indivisible obligations, partial performance is
Requires plurality of Not required equivalent to non-performance as confirmed by Article
subjects 12333, which requires complete performance of the
Such solidarity remains When the indivisible obligation, and Art. 12484, which forbids partial fulfilment,
even when there has been obligation is converted into except—
non-performance and the one to pay damages, the 9. Where the obligation has been
debtors become liable for reason for the indivisibility
damages ceases to exist, and each substantially performed in good faith,
debtor becomes liable for the debtor may recover as is there had
The death of the debtor his part of the indemnity been complete performance, minus the
terminates the solidarity, Affects the heirs of the damages suffered by the creditor (Art.
which is not transmitted to debtor in that they remain 1234)
the heirs bound to perform the same 10. When the creditor accepts performance,
prestation knowing its completeness, and without
protest, the obligation is deemed fully
 If the obligation is solidary and indivisible, every debtor performed (Art. 1235)
is liable for losses and damages, although those ready to  Severable and Entire Obligations
perform can later recover from the guilty one. 11.Divisible and indivisible obligations are
not necessarily identical to severable
and entire contracts, respectively.
Whether the contract is severable and
entire depends in general upon the

3 Art. 1233. A debt shall not be understood to have been paid
unless the thing or service in which the obligation consists has
been completely delivered or rendered, as the case may be.
(1157)
4 Art. 1248. Unless there is an express stipulation to that
effect, the creditor cannot be compelled partially to receive
the prestations in which the obligation consists. Neither may
the debtor be required to make partial payments.

However, when the debt is in part liquidated and in
part unliquidated, the creditor may demand and the debtor
may effect the payment of the former without waiting for the
liquidation of the latter. (1169a)

consideration to be paid, not upon its indivisible because of the nature of the subject
matter.
object 2. Obligations which are not susceptible to partial
performance
Severable Entire Examples: To sing a song; to dance the tinikling.
Here, the obligation is indivisible by reason of its
Features the consideration consideration is purpose which requires the performance of all
the parts. Is the obligation still indivisible if there
Effect of is expressly or by single; when the are more than one participant? The obligation
Illegality becomes divisible as far as the participants are
implication consideration is concerned, because it is capable of partial
Effect of performance.
nullity apportioned; the entire and single, the 3. Obligations provided by law to be indivisible
even if thing or service is physically divisible.
Statute of part to be contract must be Examples: Under the law, taxes should be paid
frauds5 within a definite period. Although money is
performed by one held to be entire, physically divisible, the amount of tax payable
- contract must be delivered in toto, not partially.
of sale of party consists in although the subject 4. Obligations intended by the parties to be
chattels indivisible even if thing or service is physically
Statute of several distinct matter may be divisible.
Examples: The obligation of D to give P1,000.00
frauds and separate distinct and to C on a certain date. Money is physically
-partial divisible but the clear intention here is for D to
delivery or items, and the independent items deliver P1,000.00 at one time and as a whole.
partial
payment price is Obligations deemed divisible:
1. Obligations which have for their object the
apportioned to execution of a certain number of days of work
Example: The obligation of D to paint the house
each of them of C, the painting to be finished in 10 days.
Here, the obligation need not be fulfilled at one
If one part is If a part is illegal, the time.
2. Obligations which have for their object the
illegal, the part whole contract is accomplishment of work by metrical units.
Example: The obligation of D to make a table, 3
which is illegal is unenforceable. If, feet wide and 5 feet long; the obligation of D and
B to deliver 20 cubic meters of sand. But the
void and cannot however, the parties obligation of D alone to deliver 20 cubic meters
of sand is indivisible.
be enforced, but have apportioned the 3. Obligations which by their nature are susceptible
of partial performance
that part which is different Example: The obligation of D to teach
“Obligations and Contracts” for one year in a
legal is considerations university; the obligation of E to render 3 song
numbers in a program; the obligation of F to pay
enforceable. among the a debt of P1,200.00 in 12 monthly installments
of P100.00 but each prestation to pay P100.00
respective is indivisible as it is to be delivered at one time
and in its totality.
covenants, and such
Divisibility or indivisibility in obligations not to do
legal reciprocal In negative obligations not to do, the character

considerations and of the prestation in each particular case shall determine
their divisibility or invisibility.
covenants can be

separated from the

illegal, the legal ones

can be enforced.

If one of the undertakings is void because

of its subject matter, but it is not illegal,

then the valid covenants may be

enforced, whether the contract is

severable or not.

Each sale for a The contract is

price below the affected by the

statutory limit is not statute and must

affected by the be in writing

statute

A part payment or A part payment or

part delivery of part delivery will be

each item removes sufficient to remove

that item from the the whole contract

statute, but the from the operation

rest, if above the of the law.

statutory limit of

price, are still

within the statute.

Obligations deemed indivisible:
1. Obligations to give definite things
Example: To give a particular electric fan; to

deliver a specific house. Here, the obligation is

5

Obligations to do and not to do are generally
invisible. Obligations to do stated in paragraph 2 of
Article 1225 of are divisible.

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Section 6- Obligations with a Penal Clause PURPOSE OF PENALTY

Principal Obligations- one which can stand by 1. Funcion coercitivao de grantia- insure
itself and does not depend for its validity and performance of obligation by creating an
existence upon another Obligation. effective deterrent against breach, making
the consequences of such breach onerous
Accessory Obligation- one which is attached to a as it may be possible. (Yulo vs. Chan Pe,
principal obligation and, therefore, cannot stand 101 Phil. 134) This is the general purpose
alone. of a penal clause.

Example: X promises to deliver to Y a specific 2. Funcion liquidatoria- to liquidate the
horse. (Principal Obligation) In case of non- amount of damages to be awarded to the
fulfillment, X shall pay a penalty of 100,000.00php. injured party in case of breach of the
 (Accessory Obligation) principal obligation. (compensatory)

***The accessory obligation to give the payment of the 3. Funcion estrictamente penal- in certain
penalty of 10,000 php cannot stand alone. X cannot just exceptional cases, to punish the obligor in
pay the penalty. This obligation is attached to the case of breach of principal obligation or
fulfillment principal obligation which is to give the specific violation of his obligation (punitive)
horse.****
KINDS OF PENALTY (penal clause)
Penal Clause- is an accessory undertaking
attached to an obligation to assume greater liability 1. As to its origin:
in case of breach (non-fulfillment, partly fulfilled or a. Legal- penalty provided by law
irregularly complied with) b. Conventional- provided for by
stipulation of the parties
PENAL CLAUSE VS CONDITION
2. As to its purpose:
Penal Clause Condition a. Compensatory- penalty takes the
Not an obligation place of damages in case of
Still constitutes an breach
obligation (to give or to Never Demandable b. Punitive- penalty imposed merely
do) as punishment for breach

Demandable in default 3. As to effect or demandability:
of the unperformed a. Subsidiary or alternative- when
obligation and only the penalty can be enforced or
sometimes jointly with demanded
it b. Joint or Cumulative- when both the
principal obligation and the penal
Obligation with a Penal clause is one which clause can be enforced or
contains an accessory obligation attached to demanded
the principal obligation, which imposes an
additional liability or an accessory undertaking Art. 1226. In obligations with a penal clause, the
to pay a previously stipulated indemnity in case penalty shall substitute the indemnity for damages
of breach of the principal obligation. and the payment of interests in case of
noncompliance, if there is no stipulation to the
***It pushes the debtor to perform his obligation contrary. Nevertheless, damages shall be paid if the
faithfully and without delay – within the period obligor refuses to pay the penalty or is guilty of
agreed upon, or else, he suffers a fixed civil penalty fraud in the fulfillment of the obligation.
without need of proving the damages of the other
party*** The penalty may be enforced only when it is
demandable in accordance with the provisions of
this Code. (1152a)

***Measure beforehand the damages which would result
from non-compliance

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GR: PENALTY: as compensation or substitute for Penalty substitutes for damages and interests
damages. As a general rule, in an obligation with a penal

XPN: PENALTY: as punitive a form clause, the penalty takes the place of the indemnity
for damages and the payment of interests in case
GR: The penalty imposable is a substitute for the of non-compliance (Art. 1226). Proof of actual
indemnity for: damages suffered by the creditor is not necessary
in order that the penalty may be enforced.
1. Damages (reparation)
 damages not needed; in case of When creditor may recover damages
breach, the stipulated indemnity or The creditor, in addition to the penalty, may
prestation represents a legitimate
estimate made by the contracting recover damages and interests:
parties. (1) When so stipulated by the parties;
(2) When the obligor refuses to pay the
2. payment of interest in case of breach of penalty, in which case the creditor may
obligation (compensation) recover legal interest thereon; or
(3) When the obligor is guilty of fraud in the
*** unless the contrary is stipulated fulfilment of the obligation, in which case
the creditor may recover damages caused
XPN: Damages or interests and penalty in case by such fraud.
of breach may be recovered from the following Example: D promised to construct a house for
acts: C. The contract carried a penal clause that in
case of non-compliance, X would have to pay a
1. If the debtor refuses to pay the penalty penalty of P50,000.00. X did not construct the
2. If the debtor is guilty of fraud in the house and, as a consequence, Y suffered
damage in the amount of P40,000.00.
fulfillment of the obligation In this case, the penalty of P50,000.00 shall
3. If there is express stipulation that the be paid. Y cannot recover more than
P50,000.00, the penalty stipulated, even if he
other damages or interests are proves that the damages suffered by him is
demandable to the penalty in the penal P60,000.00.
clause The penalty substitutes the indemnity for
 (purpose: to punish the obligor) the damage P40,000.00, unless there is a
stipulation to the contrary, in which case Y may
ENFORCEABILITY OF PENALTY also recover the damages proved by him.
If X refuses to pay the penalty, Y may recover
1. Penalty becomes demandable upon
breach. legal interest thereon, the interest representing new
damages brought about by the non-payment of the
penalty.

If X is guilty of fraud (not mere fault) in the
fulfilment of his obligation, he is also liable for the
damages caused thereby in conformity with Article
1171. Proof of the fraud and the existence and
amount of damages is incumbent upon Y. But Y
need not prove fraud to recover the penalty.

2. Penalty must not be contrary to laws, When penalty may be enforced
morals, good customs, public order or The penalty may be enforced only when it is
public policy
demandable in accordance with the provisions

of the Civil Code. This means that the penalty,

as a stipulation in a contract, is demandable

3. ***In Reciprocal Obligation- non only if there is a breach of the obligation and it

compliance of parties although breach is not contrary to law, morals, good customs,

is not willful like due to fortuitous event: public order, or public policy. (Art. 1306)
penal clause cannot be invoked***

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Thus, if the obligation cannot be fulfilled GR: Debtor can’t exempt himself from the
due to a fortuitous event, the penalty is not performance of the principal obligation by
demandable. Under Article 1229, the penalty paying the stipulated penalty
may be reduced if it is iniquitous or
unconscionable or in case there is partial or XPN: Right EXPRESSLY RESERVED for him to
irregular fulfillment. substitute penalty for the principal obligation

PENALTY NOT ENFORCEABLE: ***An obligation with penalty clause cannot
be turned to facultative obligation unless expressly
1. Impossible performance of principal stipulated in the contract.***
obligation due to fortuitous events
LIMITATION UPON RIGHT OF CREDITOR
2. Creditor prevented the debtor from
fulfilling the obligation GR: Creditor can’t demand fulfillment of
principal obligation and satisfaction of the
3. Penalty is contrary to good morals or stipulated penalty at the same time.
good customs

4. Both parties are guilty of breach of XPN:
contract
1. when the creditor was CLEARLY given/
5. Breach of contract by the creditor GRANTED the right to enforce both the
principal obligation and penalty

6. None of the parties committed any 2. When the creditor has demanded
willful or culpable violation of the fulfillment of the obligation but cannot
agreement be fulfilled due to:
 debtor’s fault – creditor may
Art. 1227. The debtor cannot exempt himself from demand for penalty and damages
the performance of the obligation by paying the
penalty, save in the case where this right has been  without creditor’s fault – he can
expressly reserved for him. Neither can the creditor demand the penalty
demand the fulfillment of the obligation and the
satisfaction of the penalty at the same time, unless ***if creditor chooses penalty he cannot
this right has been clearly granted him. However, if afterwards demand fulfillment of principal
after the creditor has decided to require the obligation.
fulfillment of the obligation, the performance thereof
should become impossible without his fault, the
penalty may be enforced. (1153a)

LIMITATION UPON RIGHT OF CREDITOR Example: S is required to deliver to B certain
products; otherwise, he shall pay a penalty in
the amount of P10,000.00. Under the above
article, S cannot just pay the penalty as a

substitute for non-compliance of the principal Obligations and Contracts Reviewer 27
obligation except when he is expressly given F-r-1-e-n-d-s (1-E, 2010-2011)
the right by B to do so.
Art. 1228. Proof of actual damages suffered by the
creditor is not necessary in order that the penalty
may be demanded. (n)

Penal Clause presumed subsidiary PROOF OF ACTUAL DAMAGE as
or
General Rue: The creditor cannot demand Applicable on to Penal Clause which are
the fulfillment of the obligation and the compensation or substitute for damages
satisfaction of the penalty at the same time. The payment of interest.
primary purpose of penalty is to urge the debtor
to the performance of the main obligation.

(1) Where there is performance – no need GR: Proof of Actual damages not needed in
for demanding the penalty. The order for penalty to be demanded.
exception arises when “this right has
been clearly granted” the creditor. XPN: Stipulated penal clause as a punitive form-
Under Articles 1227, therefore, the damages besides penalty still subsist. Actual
general rule is that a penal clause is proof for damages needed in case of:
subsidiary and not joint.
1. If the debtor refuses to pay the penalty
(2) Where there is no performance – the 2. If the debtor is guilty of fraud in the
creditor may ask for the penalty or
require specific performance. The fulfillment of the obligation
remedies are alternative and not 3. If there is express stipulation that the
cumulative nor successive, subject to
the exception that the penalty may be other damages or interests are
enforced if after the creditor has demandable to the penalty in the penal
decided to require fulfillment, the same clause
should become impossible without his
fault. If there was fraud on the part of Art. 1229. The judge shall equitably reduce the
the debtor, the creditor may recover the penalty when the principal obligation has been
penalty as well as damages for non- partly or irregularly complied with by the debtor.
fulfillment. Even if there has been no performance, the penalty
may also be reduced by the courts if it is iniquitous
When Penal Clause is Joint or unconscionable. (1154a)

The debtor has the right to pay penalty in JUDICIAL REDUCTION OF PENALTY
lieu of performance only when this right has
been expressly reserved for him. With respect 1. When there is partial or irregular
to the creditor, he has the right to demand performance-
performance and payment of penalty jointly
when this right has been clearly granted him. It
is, therefore, not required that this right be
expressly reserved for him; an implied grant
clearly deducible from the evidence or the
nature of the obligation is sufficient.

 partial- refers to the extent of the
fulfillment which not all prestations
are complied.

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 irregular- refers to the manner by
which all prestations but not in
accordance to the tenor.

2. When the penalty agreed upon is
iniquitous or unconscionable - even if
there was no performance at all. In the
court’s sound discretion to determine if
amount should be reduced because of
excessiveness.

 INIQUITOUS OR UNCONSCIONABLE –
when it is revolting to the conscience or
common sense; grossly
disproportionate to the damages
suffered.

 Judge’s power to reduce penalties are
limited to private contracts.

Art. 1230. The nullity of the penal clause does not
carry with it that of the principal obligation.

The nullity of the principal obligation carries with it
that of the penal clause. (1155)

PRINCIPAL OBLIGATION VOID = PENAL
CLAUSE ALSO VOID

 If the principal obligation is void it
necessarily follows that the penal clause
is also void- as the penal clause is only
an accessory obligation.

PENAL CLAUSE VOID = PRINCIPAL
OBLIGATION NOT NECESSARILY VOID.

 GR: The accessory follows the principal
and not vice versa. If only penal clause
is void, the principal obligation is still
valid and demandable. The penal clause
is just disregarded. The injured party
may recover indemnity for damages in
case of non-performance of the
obligation as if no penalty had been
stipulated (art. 170)