Maquinto, Zymon Andrew M.

JD1 - Obligations and Contracts

Assignment on Solidary Obligation & Obligations with a Penal Clause

1. Examples of Solidary Obligations arising from the nature of obligation:

a. A Contract of Sale of a parcel of land was executed between X & Y as the “Seller” and Z as the
“Buyer”. X is the owner/developer of the land and Y only acted as a co-seller. The seller failed to
execute the deed of sale and Z filed a complaint for rescission of the contract and damages
against X and Y. It was noted that X and Y were indicated as the "Seller" in the subject contract,
without any delineation whatsoever as to the rights and obligations of the respective parties.
Indeed, the contract to sell did not state "SELLERS" but "SELLER." This could only mean that X
and Y were considered as one seller in the contract. X and Y came to the contracting table with
the intention to be bound jointly and severally. Therefore, it was concluded that the nature of the
obligation of X and Y under the subject contract was solidary pursuant to Article 1207 of the
Civil Code. (AFP Retirement and Separation Benefits System v Eduardo Sanvictores, G.R. No.
207586, August 17, 2016.)

b. Under “kabit system” which is a system contrary to law and public policy, when BB was granted
by CC a certificate of public convenience to operate habal-bahal service, award of exemplary
damages, among others should be made payable jointly and severally by BB and CC. The nature
of the obligation between BB and CC who acted as the driver and operator, respectively, gave rise
to solidary obligation. (Canares v Aras, CA-G.R. No. 2488-R, March 4, 1961.)

2. Draft of a Penal Clause:

In case of non-payment or late payment by the Buyer, the latter shall pay the Seller a
penalty fee equal to 100% (one hundred per cent) of the selling price of the Toyota Altis, without
prejudice to Seller’s right to claim compensation of any further damages suffered in connection
therewith.

oOo