UNIT III – A
Kinds of Obligations
1A
When can an obligation be considered pure?
Pure obligation is one of basic classes of obligation.
According to Article 1179, a pure obligation is an
obligation that is independent of any factors relating to
any previous or upcoming circumstance or event
unknown to the parties. Simply speaking, it is a
responsibility of the creditor to the debtor that has no
additional stated condition or specific period given.
Hence, it is demandable at once. An example of pure
obligation is when B has the obligation to give A his book.
Since A did not state any other condition or term in
relation to the main requirement which is to give the book,
the obligation is considered pure. Another example is
when X has an obligation to pay Y an amount of P2,500.
The obligation from the example did not mention a
specific date or any condition, which is why it is
immediately demandable and considered to be a pure
obligation as well.
1B
What is the basic difference between a condition and a
period?
An obligation with a period is a type of obligation that only
pertains to a period in the future and the event is certain.
There are two types of obligation with a period namely:
Suspensive (ex die) and Resolutory Period (in diem).
Suspensive period refers to an obligation that will begin
from a certain day or an arrival of a period. Example:
Brown will pay the loan to Carla starting next Tuesday.
Resolutory period refers to an obligation’s life within a
certain day and will terminate upon an arrival of a period.
Example: Brown will support his parents until his death.
An obligation with a condition is a type of obligation that
may refer to the past and the event is uncertain. There
are two types of obligation with a condition namely:
Suspensive and Resolutory. Suspensive condition refers
to a future and uncertain event that will trigger an
obligation. Example: Brown promises to give Carla a car if
she gets a job. Resolutory conditions refers to an
uncertain event that will terminate an obligation. Example:
Brown promises to support the pension of his father until
he gets married.
2A
How is a suspensive condition distinguished from a
resolutory condition?
Suspensive condition gives rise to the obligation upon the
arrival of the certain day, the creditor does not receive
benefit while waiting for the condition to happen,
demandability is not available for the creditor until
condition is met. (Example: I will sell you my current car if
I am able to buy a new model.) in the example, debtor will
only sell his current car to the creditor upon buying a new
model car. If conditions are fulfilled, creditor has right to
demand but if conditions are not fulfilled then creditor has
no right to demand and debtor may choose not to
perform.
Resolutory condition extinguishes the obligation upon the
happening of the uncertain event, creditor enjoys the
benefits until the uncertain event happens, grants
immediate demandability to the creditor and is subject to
termination. (Examples: You may use my old car until I
come back from my business trip in Japan.) In the
example, once debtor comes back from his business trip
in japan, creditor looses his/her right to demand and
debtor may choose to stop performing, but as long as
debtor has not came back from his business trip in Japan
then creditor will continue to enjoy his/her benefit.
2B
How does a potestative condition differ from a casual or
mixed condition?
Potestative condition is dependent on either the debtor or
creditor's will. It is only valid if the condition is:
1. Suspensive and dependent on creditor's will - the
condition is based on the creditor's will and if the
event takes place, the creditor has the right
whether to enforce it or not.
2. Resolutory and dependent of debtor’s will - the
condition is dependent on the debtor's will and
the fulfillment of this will cause the creditor to lose
his rights or benefits. (Can also be applied to
creditor’s will)
Potestative condition is not valid if it is suspensive and
dependent on debtor's will. For instance, the debtor will
only pay his obligation any time and if he only wants.
In casual and mixed condition, it is valid if the suspensive
condition depends on the will of third parties, hence, it is
exclusive upon the debtor or creditor's will.
3A
What are the levels of impossibility of an impossible
condition?
According to Article 1183, impossible conditions refers to
suspensive conditions that is contradictory to good
tradition or practice, and policy. As well as for those
conditions that are prohibited by law shall revoke an
obligation that depends on that particular condition.
There are two kinds of impossible conditions, (1)
Physically impossible conditions and (2) Legally
impossible conditions. Physically impossible
conditions are conditions that are impossible and cannot
be done because of their nature. For example, X will give
Y a brand new cellphone if the moon will not be seen
within one year. On the other hand, legally impossible
conditions  are impossible conditions that are against the
law, morals, good customs, public order and public policy.
For example, A will give B Php 50,000 if B will kidnap and
murder C (against the law).
There are the four effects of impossible conditions. The
first effect is Conditional obligation void  which means that
both condition and obligation are void. The second effect
is Conditional obligation valid  which happens when the
condition is negative (not to do an impossible thing) then
it is disregarded while the obligation is considered pure
and valid. It would be the same as not having a condition
if the condition is not an impossible thing since it would
always be fulfilled. The third effect is Only the affected
obligation void. It is when the obligation is divisible, and
the other part of obligation that is not affected by the
impossible condition should be valid. Lastly, the fourth
effect of impossible condition is Only the condition
void which means that if the obligation is already pre-
existing and it does not depend on the fulfillment of an
impossible condition, then the condition will be the only
one that will be void.
3B
When can a condition be considered as negative instead
of positive?
A condition is considered negative if it deals with
refraining of doing something or refers to “not to do”. In
other words, it is a negative condition if it consists of non-
fulfillment or non-performance of an act. It is the opposite
of a positive condition which, in contrast, refers to the
fulfillment of an event or an act. For instance, in a positive
condition, Diana promises Carlo to treat him a movie if he
WILL study for his exams for two days. Meanwhile, in a
negative condition, Diana promises Carlo to treat him
dinner if he WILL NOT play computer games for two
days.
4A
What are the rules governing the retroactive effect of a
suspensive condition?
Retroactivity or retroactive effect refers to extending the
scope or effect to matters that have occurred in the past.
It is the application of a given rule to events that took
place before the law was in effect. An example of this is a
law that will take effect 10 days following its publication
which happened on January 1, 2020, and that it will have
a retroactive effect that takes effect on January 11, 2020.
This implies that the law will officially take effect on
January 11, 2020, but the law shall also be applied to
things and events that have happened in the past prior to
January 11, 2020. In addition, Retroactive effect of a
suspensive condition is a unique characteristic present in
a conditional obligation and absent in an obligation with a
period. Based on the general rule, the effects of a
conditional obligation to give retroacts when a condition is
fulfilled; the legal effects of the contract is deemed to
happen on the date when the contract ended. For
example, Mina and Lea had an agreement on March
2020 that if Lea passes the board exam dated on October
2020, Mina will buy her a car. When Lea passed the
board exams, she is now entitled to demand Mina to buy
her a car because her right retroacts to the date when the
obligation was constituted which was on March 2020. On
the other hand, in an obligation to do or not to do, the
court may determine when the retroactivity is allowed or
to even refuse retroactivity. However, an exception to this
rule happens when fruits and interests related to a
reciprocal obligation are deemed mutually compensated.
4B
What are the rules governing the loss or deterioration of
the thing during pendency?
According to Article 1189, there are rules which should be
observed in case there is a loss or deterioration of the
thing during pendency which constitutes a suspensive
condition. As for loss, the obligation is extinguished if it is
a loss without the fault of the debtor. An example of a loss
without the fault of the debtor is when person A (debtor)
had a deal with person B(creditor) that person A will buy a
laptop from person B on this given date and time. But
unfortunately, the day before the said date of the deal,
there has been a theft in person B’s house and one of the
items that’s been stolen is the laptop that person A will
buy from person B. This shows that when the thing is lost
without the fault of the debtor, this automatically puts an
end to the obligation of person A paying for the laptop
because the deal cannot be executed anymore because
the laptop of person B was stolen. Second, the debtor
shall be liable for the damages if it is a loss through the
fault of the debtor. An example of a loss through the fault
of the debtor is when person A (debtor) rented a car from
person B(creditor). person A went on vacation using the
rented car and when he had arrived at the place where he
will spend his vacation on, he accidentally left the car
door unlocked and this led to the rented car getting
stolen. We can see here that person A obviously is in the
wrong here for leaving the car unlocked and person A is
now obliged to pay back the stolen car and damages that
has been brought to person B.
 
On the other hand, deterioration can also be through the
fault of the debtor or without the debtor’s fault. If the
deterioration is through the fault of the debtor, the creditor
may choose either rescission with damages or specific
performance. But if it is without the debtor’s fault, the
creditor shall bear for the impairment. An example of
deterioration without the fault of the debtor is when A,
(debtor), promises to give his house and lot to B
(creditor). If the house was destroyed by a typhoon before
A will give his house and lot to B , the creditor is
responsible for the impairment of the house because it is
not the fault of the debtor and since the typhoon was
beyond the control of the debtor. On the other hand, an
example of deterioration through the fault of the debtor is
when the debtor accidentally burned down the house he
is about to sell. The creditor can choose a rescission with
damages or specific performance because the
deterioration came from the debtor's fault.
* Your examples for deterioration show complete
destruction, which equates to loss of the
thing. Deterioration refers to impairment only, not total
loss.
5A
What are the rules governing the improvement of the
thing during pendency?
There are two rules governing the improvement of
the  thing during pendency. One is the improvement of
thing by nature or by time (Art. 1187.). This could be
shown when the debtor asks a lease of real estate
property from the creditor within 10 years. If the market
value of the real estate property increases within ten
years, the one who would benefit is the creditor and not
the debtor. 
Another rule is the improvement of the thing at the
expense of the debtor which means that any
improvement done by the debtor to the thing held in
usufruct, the one who would benefit is the creditor.(Art.
1190)
The rules of usufruct could apply in the following
circumstance. If A who is the debtor had improved the
house of B who is the landlord of the house by painting
the walls with new colors at his/her expense, the
improvements of the house could be enjoyed by B after
the lease ends without having the liability to cover the
expenses that A had done to the house
Art. 579 was emphasized in the lecture to show what
legal option the debtor has, if ever the creditor is unwilling
to compensate him for the improvements he had made at
his own expense.
I apologize sir for not being clear in the answer that I
made. What i mean is that the improvements done by A
who is the tenant of the lease agreement would be
enjoyed by b who is the owner of the house. Although A
who is the tenant has an option to improve the property
which is held in usufruct, he/she is still required to
preserve the form and substance of the
property(Art.562). Although the tenant has the right to
remove the improvements he had made, but if the end
result would have created a damage on the house, the
tenant is obligated to give it for free to the landlord which
means that the landlord would be able to enjoy the
improvements done by the tenant(Art.579)
This is why the new colors that was painted in the walls
would be enjoyed by the landlord because the tenant
could not remove the improvements that he had made on
house of the landlord without incurring any damage.
(Art.579)
Your answer is basically correct, except that it
immediately attempts to illustrate the principles without
elaborating on those principles first. That's why I also got
confused about what you meant to explain. But reviewing
all your explanations now, I see they are correct in terms
of application of the rules.
Let us just make it clear that the debtor has no right to
require the creditor to compensate for any increase in the
value of the thing during pendency. If the improvement
happened by chance or by nature, the creditor will receive
its benefit. If the improvement happened on account of
the debtor's expenses, then he may remove such
improvement safely without damaging the property before
he delivers it to the creditor.
5B
How is a suspensive period distinguished from a
resolutory period?
According to Article 1193, an obligation whose fulfillment
a day certain has been fixed, shall be demandable only
when that day comes.  payday is due. The manager’s obligation to its employee
 
Suspensive Period (ex die) – the obligation begins only
from a day certain upon the arrival of period. In other
words, it becomes effective only from the arrival of a
certain day.  law, such as deadlines for tax payments. According to the
 
Example:  the computation for legal periods will be as follows:
a.) Nika promises Earl to lend her books when she
finishes college. (The means of obligations only begins
when Nikas graduates)
 
b.) PhilHealth will help Ace cover his family's hospital
expenses from the time one of his family members is
hospitalized. (The uncertainty of obligation consists only
in the exact date or time of its taking place, it is not in
whether the day will come or not.)
 
c.) Kath made a one year contract of LTE Smart Bro
Pocket Wifi Plan subscriptions which she will pay every
15th of the month. (By law, this is considered as an
obligation with a period.)
Resolutory period (in diem) – the obligation is valid up to
a day certain and terminates upon arrival of the period. In
other words, the obligation is already existing and will
terminate upon the arrival of the end of the period.  is for both parties’ benefits. An exception to this rule is
 
Example:  For instance, when A borrows money from C and it is to
a.) Earl promises Nika to support her studies until Nika
reaches her legal age. (The obligation is already effective
or ongoing but will terminate once Nika reaches her legal
age.)
 
b.) The Company CVBN is obligated to pay for Jacob’s
SSS as long as he remains an employee of the company.
(By law, the obligation of the company is already effective
and will only terminate once Jacob got fired or resigned.)
6A
What is the basic difference between a legal period and a
conventional period?
According to Article 1193, a period is an inevitable future
event which must necessarily come upon the arrival of
which the obligation (or right) subject to it either arises or
is terminated. For example, a company manager’s
obligation to pay its employees arises when the next
is terminated if an employee is laid-off or has retired from
the company.
 
Legal periods are fixed terms or periods provided by the
Administrative Code of 1987, it shall be understood that

Year = 12 calendar months

Month = 30 days, unless it is stipulated to a
specific calendar month, in which case it shall be
computed according to the number of days the
particular month contains (e.g., Month of
February  = 28 days or 29 days if it is a leap
year)

Day = A day of 24-hours

Night = From sunset to sunrise
Conventional Periods are agreed upon or stipulated dates
by both parties, such as deliveries or payment due dates.
Its general rule is that it is presumed that the agreed date
when only one party (creditor or debtor) benefits from the
period shown by other circumstances of the obligation.
be paid after one year without interest, the benefit of the
period stipulated is only for A. He can pay any time and
cannot be compelled to pay before one year because the
term is only beneficial for the debtor alone.  However,
when the period is beneficial only to the creditor, the
creditor may demand payment before the stipulated
period. Still, he cannot be required to accept payment
before the expiration of the said period. An example of
this is when C borrows money from E amounting to
30,000 to be paid on December 31 with a stipulation that
C cannot pay before the period’s lapse. E may demand
fulfillment of the obligation at any time before the said
date but C cannot shorten the one year period without the
consent of E.
6B
What are the rules governing judicial periods?
When an obligation is sure to happen, then it is an
obligation with a period. It may be fulfilled in a certain time
but may also possibly be in an uncertain time in cases
wherein no specific period of fulfillment has been fixed but
it is still bound to happen. This basic class of an
obligation considers a general rule but also has
exceptions. Including which are under Articles 1196,
1197, 1180, 1195, 1198, 1189, and 1194.
Article 1196 generally presumes that both parties are
intended to benefit from the designated payment period
they agreed on. However, if a specific agreement is
stated in the contract wherein only one of the party
benefits, then so be it –unless that party will not or
decided not to use such benefit. When the Benefit of
Term is for both parties, it denotes that the stipulated
payment period is to be followed. Wherein, the creditor
cannot demand an early payment nor the debtor to make
an early payment. If in the agreement, only the debtor
benefits, then it means that he can resist when he is
asked to pay earlier than the stipulated period if he is not
yet ready to pay. But if he is, then he may. Because by
doing so, he is saving himself money for not anymore
needing to pay the interest payment that is supposed to
be applied to the latter months if ever he did not pay yet.
On the other hand, if the creditor is in benefit, then it
somehow means that he gets to have the control over the
payment period because he (creditor) has the power to
demand the payment any time from the debtor but the
debtor is not allowed to pay in his own decision prior to
the period even if he already wants to. This gives the
creditor a benefit on the interest payment.
 
Another general rule on obligations is that, if there is
already an agreement within parties and/or as stated in
the contract, then it will be the one to be followed and so
the court cannot anymore force a new period. However,
in cases which is applicable under Article 1180 wherein if
the creditor promises to pay by saying phrases
committing himself to do so, e.g. “as soon as possible”,
“as soon as I have money”, “partially”, and such; it shows
that the obligation is a period, not a condition since it is
sure to happen but in an uncertain time. This uncertainty,
as it is declared by the debtor, wherein only he knows
when it will happen, therefore it is dependent upon his
will. But if a conflict arises later on due to the uncertainty
of the payment period, the creditor cannot file yet an
immediate action because there is no fixed time in the
agreement. So for the creditor to make an action, he has
to make the time of payment fixed first by going to the
court to have it fixed as it is subject to the provisions of
Article 1197.
Once the term has been fixed by the court and has also
been agreed upon by both parties, then it now becomes
part of the law that governs the contract and therefore
cannot anymore be changed without the consent of each
other’s party. So since it is only when fixed by law that a
clear period is stated, then no default is yet committed
prior to the new agreement. Only when it passes the new
period fixed that a default can be considered.
Under the Article 1195, with the debtor being unaware of
the period or believing that the obligations have become
due and demandable, anything that is by mistake
delivered and paid prior to the “day certain” or the
supposed arrival of the period, may be recovered along
with the fruits and interests, in order to prevent the unjust
enrichment of the creditor.
 
In exemption for the Article 1198, the general rule in
Article 1193 species that an obligation with a suspensive
period is demandable only when the day certain fixed
period for its fulfillment arrives, the Article 1198
enumerates the ground by which the debtors loses his
right to make use of the period. In such cases if the
period hasn’t yet arrived, the creditor can already demand
the performance of the obligation.
 
Under the Article 1198, the debtor shall lose his rights to
make use of a period: (1) When he became insolvent
after the obligation is contracted, unless he gives a
guaranty or security for the debt; (2) When he didn’t
furnish the creditor with the guaranties or securities he
promised; e.g. if he promised to mortgage the creditor’s
house but failed to do so; (3) When his own actions
impair the guaranties or securities he gave, unless he
gives new ones with equal satisfactory, this ground
doesn’t apply for those due to a fortuitous event; (4)
When his guaranties or securities disappear due to a
fortuitous event, unless he gives new ones with equal
satisfactory; (5) When he violates any undertaking of the
consideration for the period given by the creditor; (6)
When he tries and attempts to abscond or run away.
 
Article 1194 species that in cases of loss, deterioration, or
improvement of the thing prior to the arrival of the “day
certain”, rules on Article 1189 shall be applied. It should
be noted that in Article 1163, in an obligation to give a
specific thing, the debtor has the obligation to take care of
the specific thing with diligence.
 
The rules in cases of loss: (1) without the fault of the
debtor, the obligation is extinguished; (2) through the
debtor’s fault, the debtor is held liable for the damages.
 
The rules in cases of deterioration: (1) without the fault of
the debtor, the creditor will just bear for the impairment;
(2) through the debtor’s fault, the creditor shall choose
either a rescission with damages or a specific
performance with damages.
 
The rules in cases of improvement: (1) by nature or time,
the improvement will inure to the benefit of the creditor;
(2) through the debtor’s expense, the debtor has the right
to a usufructuary, meaning a legal right of using the fruits
and interests of something belonging to another.
 
Articles 1196, 1197, 1180, 1195, 1198, 1189, and 1194,
all above, are the general rules and exemptions for
obligations governing judicial periods.
7A
What is the basic difference between a definite period
and an indefinite period?
If the obligation is subject to a definite period, it means
that it must be performed in fixed known date or time. For
instance, in a promissory note, Person A stated to pay
Person B an amount of five thousand pesos (5,000) on
December 9, 2020. Since a certain time is given, it means
that the obligation is demandable at once since it does
not depend upon a future or uncertain event like that of
an obligation that is subject to an indefinite period.
As for the indefinite period, it is an event that does not
indicate a specific time when the obligation must be
performed. For an obligation that would arise in an
indefinite period, there is uncertainty on the specific time,
but it would still occur in the future. For example, Person
A agreed to sell his car to Person B if Person A’s
grandfather would pass away in the future. Based on the
example given, the death of Person A’s grandfather is
uncertain. But his death is certain to occur in the future,
for it is an unavoidable event. 
7B
When may a debtor be deemed to have lost the benefit of
the stipulated period?
In an obligation with a period, a creditor cannot demand
the debtor to fulfill the obligation, not until the due of the
agreed period. However, according to article 1198, the
following instances can disregard the period and enables
the creditor to demand the fulfillment of the obligation
immediately:
(1) When the debtor becomes insolvent (e.g., X has a
liability to Y payable until June. When X becomes
insolvent before the maturity date, Y may immediately
demand X to pay his debt, unless X will give sufficient
guaranty or security to Y.)
(2) When the debtor failed to furnish guaranties or
securities promised (e.g., X agreed to mortgage his car to
Y to secure his debt. When X failed to furnish, it gives
right to Y to demand right away.)
(3) When the debtor impaired his own
guaranties/securities (e.g., the mortgage car by X to Y
has been damaged by X. Y may demand immediately,
unless X will immediately replace the mortgage.) or lost
his own guaranties/securities by a fortuitous event (e.g.,
An earthquake crashed the mortgage car, Y may demand
unless X will immediately replace the mortgage.)
(4) When the debtor violates an undertaking (e.g., X
borrowed money to Y on condition that X will repair Y's
car. When X failed to do so, Y can immediately demand X
to pay his debt.)
(5) When debtor attempts to abscond (e.g., X tried to
depart the country to run away from the obligation.)
 UNIT III – B
Kinds of Obligations
1A
What restrictions limit the debtor’s right of choice in an
alternative obligation?
According to Article 1200, it is automatically assumed that
the right of choice in an alternative obligation belongs to
the debtor, unless it is specifically stated that it is given to
the creditor. However, although it is the debtor that has
the right of choice, there are specified limitations that
restrict his right of choice under the second paragraph of
the same article. Prestations that are (1) impossible, (2)
unlawful, or (3) not the object of the obligation cannot be
chosen by the debtor. For example, X has an obligation to
give Y either a laptop, shabu, or a car. Y can only choose
between the laptop and the car because any transaction
involving shabu is unlawful. Hence, shabu is out of the
options because Y is not allowed to choose such
prestation. In addition, the debtor cannot also practice his
right when all but one prestation is practicable according
to Article 1202. This is because the options became one,
and having one prestation turns the alternative obligation
into a simple obligation.
1B
What are the rules governing loss of options in an
alternative obligation?
Article 1203 states that if through the creditor’s acts or
fault, the debtor cannot make a choice according to the
terms of the obligation, then the debtor may cancel the
contract with damages. For example, A is obligated to
deliver to B either a car, a house, or jewelry. If B
negligently broke the car, the debtor has the power to
cancel the contract and to ask indemnification for
damages against the creditor.
According to article 1204, if it is the debtor’s fault that
cause all of the choices have been lost or the compliance
of the obligation has become impossible, the creditor will
have the right to indemnity for damages. Further, the
indemnity shall be based on the value of the last thing to
disappear, or the last service to become impossible. For
instance, C obliged himself to deliver either a phone or
laptop. Through the fault of C the phone was lost, and
subsequently, the laptop also disappeared. In such a
case, C should be held liable for damages of the value of
the last thing lost.
As for the article 1205, when the right of choice has been
given to the creditor, in case of any or all thing is lost
through the fortuitous event, the creditor may choose
from among remainder or obligation shall be extinguished
if all items are lost through a fortuitous event. But if any or
all thing is lost through debtor’s fault, the creditor may
claim item remain, demand the payment of the price of
any one of them with a right to indemnity for damages.
2A
What are the rules governing a facultative obligation?
In facultative obligation (Art. 1206), there is only one
prestation that is agreed upon but the obligor or the
debtor may render another substitution. An example is
when X promise to give Y a car, but it was also stipulated
that X could give his house as a substitute. In this
example, there is only one thing that is principally due
which is the car.  The house isn’t due because it is just a
“substitute” at all.  As stated in Article 1206, if the
principal was lost due to his fault, then the debtor is held
liable. Meanwhile, if it was lost due to a fortuitous event,
the loss of the thing extinguishes the obligation. On the
other hand, if the substitute was loss or deteriorated
through his negligence, then the debtor is not liable for
the loss of the substitute because it was just a
“substitute”.  But take into account that once the
substitution had been made, the debtor now is held liable
for the loss of the substitute on the account of his delay,
negligence or fraud.  If one of the prestations is illegal, it
was said that the nullity of the prestation agreed upon
invalidates the obligation or the debtor is not bound to
choose the substitute. Another scenario is if the principal
is impossible to be given, then the substitute does not
have to be given.
If the principal item is destroyed due to the debtor's
fault before any substitution could be made, can the
creditor then compel the debtor to make a substitution?
No, because the creditor can not force the debtor to make
a substitution if he/she doesn't want to.
2B
When is an obligation considered divisible?
Divisible obligation is where the object or prestation is
capable of partial performance. There are three (3) kinds
of division: (1) Qualitative Division, (2) Quantitative
Division, and (3) Ideal or Intellectual Division.
1. Qualitative Division - Obligation is based on quality.
Example: A and B are obligated to deliver a bus and a
truck. They agreed that A will deliver the bus and B will
deliver the truck.
2. Quantitative Division - Obligation is based on quantity.
Example: A and B are obligated to deliver a 10,000 sacks
of dolomite sand in Manila Bay. A can deliver the 5,000
sacks of sands and B can deliver the other half. Another
example is A and B will inherit the land of C. The land can
be divided into two equal parts by its meter.
3. Ideal or Intellectual Division - The division only exists in
the minds of the parties.
- Example: A and B will inherit the car of C. The car is not
divisible, but only mentally. Similarly to the example of
inheriting a land. The land cannot be literally divided into
two but the division will only exist in their minds.
 
Obligations deemed divisible
1. Obligations which have for their object the execution of
a certain number of days of work.
- Example: A is obligated to build three cabinets for B to
be finished in 10 days. The obligation of A is not to be
fulfilled in one time.
2. Obligations which have for their object the
accomplishment of work by metrical units.
- Example: The obligation of A and B to deliver 3,500 wet
metric tonne of dolomite sand for Manila Bay.
3. Obligations which by their nature are susceptible of
partial performance.
- Example: A is obligated to teach “Obligations and
Contracts” for one year in the University of Santo Tomas.
3A
What would make an obligation indivisible?
According to Article 1223 of Civil Code of the Philippines,
an obligation would be indivisible when it can't be partially
fulfilled/performed either in delivery or performance. If the
object is not physically divisible or the service is not
capable of partial performance. An obligation is
considered as an indivisible if there's only one creditor
and only one debtor. For example, P needs to deliver the
car of Q on January 12. This is an indivisible obligation
since the car cannot be delivered partially. It needs to be
delivered as a whole and at one time.
There are three (3) kinds of indivisibility. The first one is
Legal Indivisibility. It is when law declares a specific
provision as indivisible obligation, which the nature is
divisible. It is followed by Conventional Indivisibility—
where the will of the parties makes the obligation as
indivisible,by which its nature is divisible. Lastly, the
Natural Indivisiblity, when the nature of an obligation's
prestation does not admit of division, e.g., to sing a song.
3B
How are the relationships among the parties
characterized in a joint obligation?
An obligation is considered as joint when two or more
debtors are expected to perform the obligation together
and the creditor may require performance only from all of
them together. It is characterized by the unitary nature of
the obligation binding the several debtors.
Example:
Student A and Student B both study in University of Santo
Tomas. The two have agreed to share one dorm in order
to cut down expenses. Their landlord, Mr. C, has
presented a lease agreement stating that the two of them
are responsible for paying the rent. Mr. C does not care
whether how they are going to divide it or who is going to
pay, as long as the entire rent will be paid at month's end.
Following your example, would the obligation be joint if
only one of the tenants would be required to pay Mr. C?
No, sir. In a joint obligation, all the debtors must
participate in performing the obligation. If only one is
required, then it would now be considered as a
solidary obligation. 
4A
How are the relationships among the parties
characterized in a solidary obligation?
A solidary obligation or an obligation in solidum is a type
of obligation that requires at least two creditors and/or two
debtors. This obligation allows either obligors to be bound
together, each liable for the whole performance, or
obligees to be bound together, all owed just a single
performance, and each entitled to the entirety of the
obligation. For example, J and Q borrowed P10,000 from
M and T; this shows that the two debtors (J and Q) are
liable jointly and severally to M and T, the creditors. In
this scenario, either one of the creditors has the right to
demand either one of the debtors to comply. Any solidary
debtor may be compelled to pay the whole amount, not
only his share, whether he benefitted from the said debt
or not. However, according to Article 1207, the
concurrence of two or more creditors or of two or more
debtors in one and the same obligation does not imply
that each one of the former has a right to demand, or that
each one of the latter is bound to render entire
compliance with the prestation. Aside from that, the
debtor/s may pay any of the solidary creditors if no
creditor demanded that he/she shall be paid. After the full
payment is made, the creditor who received the payment
will be liable to other creditors for their shares. There is a
solidary liability only when the obligation expressly states,
or when the law or the nature of the obligation requires
solidarity
4B
When there is a plurality of parties but no clear indicator
of their relationship, will the obligation be treated as joint
or as solidary? Cite the legal basis.
When there is a plurality of parties but no clear indicator
of their relationship, the obligation is treated as solidary.
Solidary obligation is an obligation in which the debtors
are responsible for the entire obligation while the creditor
can demand for the whole obligation with any of the
debtors involved in the solidary obligation. On the other
hand, joint obligations are shared and portioned to each
debtor, to which the creditor cannot demand the full
obligation on one debtor because the debtor is not liable
for the full obligation. The obligation is solidary because
the debtors bind themselves to pay for the entire
obligation in its due date. Solidary is known to have
multiple debtors in a divisive obligation which arises from
a commercial contract. A non payment from one debtor
does not give any effect to other debtors. According to
Article 54, plurality of persons on the side of the creditor
is known to be solidary since it is stipulated by the law or
contracted. For example a solidary obligation is when
persons A, B, and C as a solidary got a loan from a bank
that is due on or before November 4, 2020. The due date
has come and unfortunately person B and C didn’t show
up to pay the loan, only person A showed up. The bank
can demand the full obligation from person A, without
persons B and C, since this is a solidary obligation.
5A
How will solidarity be given effect if the co-debtors are
subject to different conditions or periods?
Under Art. 1211, solidarity may exist although the
creditors and the debtors may not be bound in the same
manner, and by the same periods and conditions. For
instance, A, B, and C bound themselves jointly and
severally to give D the amount of 75,000 subject to the
following conditions:
a. A will pay if D will pass the board exams
b. B will pay on D’s birthday, November 1,
2020
c. C will pay on October 1, 2020
If D demands payment on October 1, 2020, he can
demand not only to C  but also to either A or B with the
payment amounting to 15,000. However, D cannot collect
further the shares of A and B which are not yet due and
demandable. In case of unpaid installment, D is entitled to
recover all amounts upon the fulfillment of the condition.
Solidarity, when co-debtors are subject to conditions and
period, would be that the creditor may demand against
any of the solidary debtors 
1. less the shares of the others with unfulfilled
conditions or;
2. less the amount, if any, already paid by the
co-debtors
How did you get P15,000?
Looking back at the given, I get it now Sir. There's typo
with the total amount of debt, it should've been equal to
45,000 instead
5B
How do the effects of insolvency of a co-debtor differ in
joint and in solidary obligations?
Insolvency of a co-debtor is the inability of one debtor to
fulfill his obligation to pay for his debt or their debt.
For Joint Obligation: If one of the joint debtors cannot pay
his share because of his insolvency, then the rest of the
debtors shall not be liable for his share. Given the
example under the joint obligation, if one of them failed to
pay his/her part then his/her co-debtors are not liable to
pay for it.  another, without the consent of his co-creditors, since
Example:  each joint creditor has rights on only a specific portion of
(1) Jas, Gab and Rio are indebted of Php 26,000
to Cleo. Jas is liable only for Php 8,000, Gab is only for
Php 11,500 and Rio is only for Php 6,500. Therefore,
Cleo can only collect Php 8,000 from Jas, Php 11,500
only from Gab and Php 6,500 only from Rio. However,
Gab is insolvent of his debt and since he was in joint
obligation, his debt is distinct and separate from his co-
debtors, therefore, his insolvency shall not make others
liable. (Each debtor is only liable for a proportionate part
of the debt and the insolvency of one of the debtors shall
not make others liable.)
 
For Solidary Obligation: If one of the solidary debtors
cannot pay his share because of his insolvency then the
share of the insolvent debtor shall be transported to his
co-debtors, in proportion to their respective debts. Given
the example under solidary obligation, if one of them
failed to pay their proportionate share because of
insolvency then the other one is liable to pay for that
share. Thus, the debtor who paid for the fulfillment of the
entire obligation can demand reimbursement from his co-
debtor.
 
Example:
(1) Haventh and Aro are indebted of Php 130,000 to
Jhansen. However if Haventh is insolvent of paying the
debt, Jhansen can collect from Aro. Thus, Jhansen has
the right to collect payment from both of them or either of
them since they agreed that both of them are liable to pay
for the entire obligation. There in, Aro, who paid for the
entire obligation, has the right to demand for
reimbursement from Haventh for his part of the obligation
depending on their agreement. (Passive Solidarity.) ( Both
debtors are liable for the entire obligation and the
insolvency of one of the debtors shall make others liable. )
6A
How do the rules on assignment by a co-creditor vary in
joint and in solidary obligations?
According to Article 1213, a solidary creditor cannot give
his rights without the consent of others.
For example, G owes solidary creditors H and J, the sum
of 2,000. H cannot assign his rights to K without the
consent of J. However, no consent is needed if he
assigns his right to his co-creditor J.
On the other hand, joint creditors can give his rights to
the whole obligation.  Co-creditors in a joint obligation do
not have rights to the portion owned by other creditors of
the obligation.
Following the first example, if H and J are joint creditors,
then H can give his right of claiming 50% of the obligation
to a third party, without the consent of J. 
6B
What are the different classifications of penal clauses?
The Section 6 of the Chapter 3 (Kinds of Obligations)
introduces and highlights the obligations with a penal
clause. Thus, such penal clause/penalty is discussed
under this topic. In relation to this, is the principal and
accessory obligations. Principal Obligation is an
obligation which stands by itself and is not dependent on
any other obligation. Whilst, Accessory Obligation can be
part of a commitment, but it is only the secondary
requirement or duty, thus, it cannot stand alone. It is
fulfilled with the primary obligation and also expires as the
primary obligation ends.
 
Accessory Penalties are secondary penalties that comes
with the Principal Penalty, when applicable. Under the
Revised Penal Code, Accessory Penalties
include perpetual or temporary absolute disqualification,
perpetual or temporary special disqualification,
suspension from public office, the right to vote and be
voted for, the profession or calling, civil interdiction,
indemnification, forfeiture or confiscation of instruments
and proceeds of the offense, and payment of costs.
Example of a Principal Penalty that comes with accessory
penalties is Reclusion Perpetua.
 
Penal clause, in definition, is an accessory undertaking
that comes with an obligation to assume a greater liability
and responsibility on the debtor in cases of breach,
unfulfillment, or partly/irregular compliance of obligation.
This is for the purpose to prevent a default in the
performance of his obligation of the debtor; and function
to provide for the liquidated damages and to be able to
strengthen the obligation’s coercive force. There are 6
different kinds and classifications of penal clauses. Under
which are listed below:
 
As to its origins, there is (1) Legal penal clause;
and (2) Conventional penal clause.
 
Legal Penal Clause is when the penalty is provided by the
law. This simply means that the penal clause given to the
debtor is based on the law.
 
Conventional Penal Clause is when the penalty is agreed
by the contracting parties as their way of ensuring the
performance of the obligation and also by serving as a
reminder to the debtor for his fulfilment to be in good faith.
 
As to its purpose, there is (3) Compensatory
penal clause; and (4) Punitive penal clause.
 
The Compensatory Penal Clause is for liquidation
purpose. It is applied whenever the purpose of penalty is
with regards to the payment for possible damages or
breach made by the debtor to the creditor.
 
It is a Punitive Penal Clause when the penalty written in
the contract involves a punishment to the violator.
 
As to its effect  or dependability, there is (5)
Subsidiary penal clause; and (6) Joint penal clause.
Subsidiary or alternative penal clause is when only the
penalty is to be enforced. Meaning, such principal
obligation will not be enforced by the judge to be fulfilled
by the debtor, only the penalty will be carried out as
compensation for damages.
 
Joint or cumulative penal clause is when both of the
principal obligation and the penalty is to be enforced.
Meaning, both principal and accessory obligations shall
be observed. The debtor is enforced to fulfill and perform
the principal obligation, at the same time a penalty shall
also be carried out in part of the debtor.
 
When entering an agreement, the fulfilment of obligation
is expected by both parties. But presuming cases of
failure and breach, a Penal Clause is included in the
contract for the assurance of good faith. The Penal
Clause has different classification, as already mentioned,
and these are classified accordingly with its origin or how
it is formed, on its purpose or what the penalty is for, and
on its dependability or effect as to when the penalty can
be enforced.
7A
What are the rules governing an obligation with a penal
clause?
According to Article 1226, a penalty would arise if there is
a breach of the obligation in exchange for the payment of
damages and interest. A penal clause must be included in
the contract for the creditor to enforce the legal recourse.
But if there is no inclusion of a penal clause, then the
creditor could only claim damages from the breach of
obligation. There are instances that payment for both
penalty and damages could occur due to the following
exceptions:
• If parties had stipulated on the agreement.
• If the debtor refuses to pay the penalty. and;
• If the debtor is guilty of fraud during the performance of
the obligation.
According to Article 1227, the debtor cannot decide to
pay for the penalty rather than to fulfill his obligation,
unless his right is clearly expressed in the agreement.
Also, the creditor cannot demand the debtor to perform
the obligation and payment for the penalty at the same
time. Enforcing the penalty to the debtor is only applicable
if there is a failure to accomplish the obligation; unless the
right of the creditor to demand the duty and the penalty
simultaneously has been granted to him through
stipulation. But if there is no stipulation, the creditor may
only demand penalty if the debtor is unable to fulfill the
obligation.
One of the rules governing an obligation with a penal
clause is Art. 1228, which states that "proof of actual
damages suffered by the creditor is not necessary in
order that the penalty may be demanded." Penalty
demandable without proof of actual damages The creditor
may enforce the penalty whether he suffered damages or
not. But he cannot recover more than the stipulated
penalty even if he proves that the amount of his damages
exceeds the penalty. In an obligation with a penal clause
all that the creditor has to prove, to enforce the penalty, is
the violation of the obligation by the debtor. It is not
necessary to adduce evidence to prove losses and
damages suffered by the creditor or the extent of the
same. Indeed, one of the reasons for fixing the penalty is
to avoid such necessity and other difficulties involved in
litigation. However, Article 1228 applies only where the
penalty is fixed by the parties to substitute the indemnity
for damages. In any of the three exceptions when
damages may be recovered in addition to the penalty
(Art. 1227), the creditor must prove the number of such
damages which he actually suffered resulting from the
breach of the principal obligation.
Furthermore, according to 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. The debtor cannot exempt
himself from the performance of the obligation by paying
the penalty, save in the case where this right has been
expressly reserved for him. Neither can the creditor
demand the fulfillment of the obligation and the
satisfaction of the penalty at the time unless the right has
been clearly grated him. However, if the creditor has
decided to require the fulfillment of the obligation, the
performance thereof should become impossible without
his fault, the penalty may be enforced. The general
principle that the accessory follows the principal and not
vice versa is illustrated in the above article. If only the
penal clause is void, the principal obligation remains 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.

7B
When can the stipulated penalty be reduced by the court?
Based on Article 1229, There are two situations when a
court can reduce the penalty. These situations are (1)
when the debtor incompletely or irregularly complies with
the principal obligation that is in the agreement for certain
reasons and (2) when the court finds out that the penalty
discussed between the two parties is benefitting one party
and the other party is suffering because of having
unjustifiable high amount to pay.