SECTION 3.

— Alternative Obligations

ART. 1199. A person alternatively bound by different prestation’s shall completely perform one of
them. The creditor cannot be compelled to receive part of one and part of the other undertaking.
(1131)

Kinds of obligation according to object.

They are:

(1) Simple obligation. — one where there is only one (1) prestation.

EXAMPLES:

(a) D obliged himself to deliver a piano to C.

(b) D promised to repair the car of C.

(2) Compound obligation. — one where there are two (2) or more prestation. It may be:
(a) Conjunctive obligation. — one where there are several prestation’s and all of them are due; or
(b) Distributive obligation. — one where two (2) or more of the prestation’s is due. It may be:
1. Alternative obligation. — one where several prestation’s are due but the performance
of one is sufficient (Art. 1199.); or
2. Facultative obligation. — one where only one prestation is due but the debtor may
substitute another. (Art. 1206.)

Meaning of alternative obligation.

An alternative obligation is one wherein various prestation’s are due but the performance of one of
them is sufficient as determined by the choice which, as a general rule, belongs to the debtor.

EXAMPLE:

D borrowed from C P10,000. It was agreed that D could comply with his obligation by giving C P10,000,
or a color television set, or by painting the house of C. The delivery of the P10,000 or the color television
set, or the painting of the house of C, is sufficient to comply with the obligation. Performance must be
complete. C cannot be compelled to accept, for instance, P5,000 and half of the television, thereby
establishing a co-ownership between them or P5,000 and the painting of a part of his house.

ART. 1200. The right of choice belongs to the debtor unless it has been expressly granted to the
creditor.

The debtor shall have no right to choose those prestation’s which are impossible, unlawful or which
could not have been the object of the obligation. (1132)

Right of choice, as a rule, given to debtor.

As a general rule, the right to choose the prestation belongs to the debtor. By way of exception, it may
be exercised by the creditor but only when expressly granted to him (Art. 1205.), or by a third person
when the right is given to him by common agreement.
EXAMPLES:

(1) D insured his house with C, _an insurance company. It is agreed that if the house is
destroyed or damaged, D may either pay the damage or loss or "reinstate or rebuild
the house."

Since nothing is said in the contract as to who has the right of choice, it belongs to C.

(2) S binds himself to deliver item one or item two to B on December 10 and to
communicate his choice on or before December 5.

If S delays in making his choice, B cannot exercise the right because it is not expressly granted to him.

Right of choice of debtor not absolute.

The right of choice of the debtor is subject to limitations. Thus —

(1) The debtor cannot choose those prestation’s which are:(a) impossible, (b) unlawful, or (c) which
could not have been the object of the obligation. These presentations are void. Their presence
does not invalidate the obligation if it includes other undertakings otherwise free from such
defects. In other words, under Article 1200, the debtor's right of choice is not extinguished
altogether but limited to the remaining valid prestation’s.
(2) The debtor has no more right of choice when, among the prestation’s whereby he is
alternatively bound, only one is practicable. (Art. 1202.) In this case, there is not only a limitation
but a loss of the right of choice belonging to the debtor. The obligation becomes simple. The
right does. not pass to the creditor, nor may it be exercised by anyone.

EXAMPLES:

(1) Impossible. — S promised to deliver to B 10 sacks of rice, or a Bulova wristwatch, or soil

from Jupiter. S cannot choose to deliver soil from Jupiter as it is physically impossible.
(2) Unlawful. — S obliged himself to deliver to B a kilo of a dangerous drug, or a parcel of land,
or a two (2)-carat diamond ring, or to kill C. S can choose only the parcel of land or the two
(2)-carat diamond ring.
(3) Could not have been the object of the obligation. — D borrowed from C P30,000. It was
agreed that D would give C his horse, or P30,000, or his German piano. Now D has two (2)
horses — a racehorse worth P30,000 and a horse for calesa that cannot be sold for more
than P5,000. D cannot choose the horse for calesa as it could not have been the object of
the obligation.
(4) Only one prestation is practicable. — S will deliver to B his horse, or his carabao, or his
refrigerator. The horse and the carabao were lost without the fault of S. S has no more
choice. He must deliver the refrigerator which is the only one practicable.

ART. 1201. The choice shall produce no effect except from the time it has been communicated.

Communication of notice that choice has been made.

 (1) Effect of notice. — Until the choice is made and communicated, the obligation remains
alternative.
a. Once the notice of the election has been given to the creditor, the obligation ceases to
be alternative and becomes simple.
b. Such choice once properly made and communicated is irrevocable and cannot,
therefore, be changed by either party without the consent of the other. The
concurrence of the creditor to the choice made by the debtor is not required.

Where the choice has been expressly given to the creditor, such choice shall likewise produce legal
effects upon being communicated to the debtor. (par. 1, Art. 1205.)

(2) Proof and form of notice. — The burden of proving that such communication has been made
is upon him who made the choice. The law does not require any particular form regarding
giving of notice. It may, therefore, be made orally or in citing, expressly or impliedly.

EXAMPLE:

S obliged himself to deliver to B his car, or his racehorse. S chose the car and properly informed B of his
choice. The obligation becomes a simple obligation to deliver the car. As such, neither party can change
the prestation without the consent of the other. Of course, S or B may waive his right after a choice has
been made. As a general rule, all rights may be waived.

ART. 1202. The debtor shall lose the right of choice when among the prestation’s whereby he is
alternatively bound, only one is practicable.

Effect when only one prestation is practicable.

If more than one is practicable, it is Article 1200 that will apply. The obligation is still alternative because
the debtor has gilled the right of choice. If only one is practicable (e.g., the others ye become
impossible), the obligation is converted into a simple one.

ART. 1203. If through the creditor's acts, the debtor cannot make a choice according to the terms of
the obligation, the latter may rescind the contract with damages. (n)

When debtor may rescind contract.

Rescission (see Art. 1191.) creates the obligation to return e things which were the object of the
contract together with their fruits, and the price with its interest.

It is the very nature of an alternative obligation that the debtor can make his choice without the consent
of the creditor. hence, the right given to the debtor to rescind the contract and recover damages if,
through the creditor's fault, he cannot make a choice according to the terms of the obligation.

The debtor, however, is not bound to rescind.

EXAMPLE:

D borrowed from C P10,000. It was agreed that instead of P10,000, D could deliver item one, or item
two, or item three. If through the fault of C item, one is destroyed, D can rescind the contract if he
wants. In case of rescission, the amount of P10,000 must be returned by D with interest. C, in turn, must
pay D the value of item one plus damages.

D, instead of rescinding the contract, may choose item two or item three with a right to recover the
value of item one with damages. If D chooses item one, his obligation is extinguished. C is not liable for
damages.

ART. 1204. The creditor shall have a right to indemnity for damages when, through the fault of the
debtor, all the things which are alternatively the object of the obligation have been lost, or the
compliance of the obligation has become impossible.

The indemnity shall be fixed taking as a basis the value of the last thing which disappeared, or that of
the service which last became impossible.

Damages other than the value of the last thing or service may also be awarded. (1135a)

Effect of loss of objects of obligation.

Articles 1203 and 1204 apply when the right of choice belongs to the debtor. Under Article 1205, the
creditor has the right to choose.

1) Some of the objects. — If some of the objects of the obligation have been lost or have become
impossible even through the fault of the debtor, the latter is not liable since he has of choice
and the obligation can still be performed.
This is an exception to the general rule established in Article 1170 regarding liability for damages
arising from negligence.
2) All of the objects. — If all of them have been lost or have become impossible through his fault,
the creditor shall have the right to indemnity for damages since the obligation can no longer be
complied with. Of course, if the cause of the loss is fortuitous event, the obligation is
extinguished.

The phrase "or the compliance of the obligation has become Impossible" refers to obligations "to do."

EXAMPLE:

S agreed to deliver item one, or item two, or item three. If item one is lost through the fault of S, he can
still select either item two or item three. The loss of item one and two with or without the fault. of S will
reduce the obligation to a simple one. If all items are lost through his fault, liability will attach; if through
a fortuitous event, the obligation will be extinguished.
Basis of indemnity.

The indemnity shall be fixed taking as a basis the value of the last thing which disappeared (referring to
obligations to give) or that of the service which last became impossible (referring to obligations to do).
In case of disagreement, it is incumbent upon the creditor to prove such value or which thing last
disappeared or which service last became impossible. Other damages may also be awarded.

EXAMPLE:

In the above example, if items one and two are lost, S will be bound to deliver item three. If,
subsequently, item three is also lost through the fault of S, the basis for indemnity is the value of item
three since S would have been bound to deliver it had it not also been lost. The liability of S is not
affected although the loss of items one and two was through a fortuitous event.

If item three is lost without the fault of S; his obligation is extinguished, and he shall not be liable for
damages although the loss of items one and two was due to his fault. The reason is that after the loss of
items one and two, the obligation is converted into a simple one to deliver item three. (Art. 1202.)

S cannot be held responsible for the loss of items one and two through his fault because, having the
right of choice, he was not bound to deliver either. The rule is just since he would have been liable for
damages if item three instead was lost through his fault, and items one and two, through a fortuitous
event_

ART. 1205. When the choice has been expressly given to the creditor, the obligation shall cease to be
alternative from the day when the selection has been communicated to the debtor.

Until then the responsibility of the debtor shall be governed by the following rules:

1) If one of the things is lost through a fortuitous event, he shall perform the obligation by
delivering that which the creditor should choose from among the remainder, or that which
remains if only one subsists.
2) If the loss of one of the things occurs through the fault of the debtor, the creditor may claim any
of those subsisting, or the price of that which, through the fault of the former, has disappeared,
with a right to damages.
3) If all the things are lost through the fault of the debtor, the choice by the creditor shall fall upon
the price of any one of them, also with indemnity for damages.

The same rules shall be applied to obligations to do or not to do in case one, some or all of the
prestation’s should become impossible.

When right of choice belongs to creditor.

In alternative obligations, the right of choice, as a rule, I belong to the debtor. Nevertheless, the debtor
may expressly give the right of choice to the creditor. (Art. 1200.) In such a case, the provisions with
respect to the debtor as laid down in the preceding articles shall be applicable to the creditor when the
right of choice is given to him. Before the creditor makes the selection, the debtor cannot ilicur in delay.

Rules in case of loss before creditor has made choice.

 1) When a thing is lost through a fortuitous event. —

EXAMPLE:

S obliged himself to deliver to I3 item one, or item two, or item three, or item four. If item one is lost
through a fortuitous event, B can choose from among the remainder or that which remains if three (3)
of the items are lost.

2) When a thing is lost through debtor's fault. —

EXAMPLE:

If the loss of item one occurs through the fault of S, B may claim item two or item three or item four
with a right to damages or the price of item one also with a right to damages.

(3) When all the things are lost through debtor's fault. —

EXAMPLE:

If all the items are lost through the fault of S, then B can demand the payment of the price of any one of
them with a right to indemnity for damages.

(4) When all the things are lost through a fortuitous event. —

EXAMPLE:

The obligation of S shall be extinguished if all the items which are alternatively the object of the
obligation are lost through a fortuitous event. In this case, Article 1174 shall apply.

Rules applicable to personal obligations.

The above rules are also applicable to personal obligations. The responsibility of the debtor for damages
depends upon whether the cause which has rendered the obligation impossible was due to his fault or
not.

ART. 1206. When only one prestation has been agreed upon, but the obligor may render another in
substitution, the obligation is called facultative.

The loss or deterioration of the thing intended as a substitute, through the negligence of the obligor,
does not render him liable. But once the substitution has been made, the obligor is liable for the loss of
the substitute on account of his delay, negligence or fraud. (n)

Meaning of facultative obligation.

A facultative obligation is one where only one prestation has been agreed upon but the obligor may
render another in (see Art. 1156.) substitution.

EXAMPLES:

1. "I will give you my piano but I may give my LCD television set as a substitute. "In this obligation,
only the piano is due. Hence, its loss through my fault will make me liable.
 2. "I will mortgage my land to secure my debt which shall be payable within 90 days upon my
failure to pay my debt within 30 days."

Here, I may mortgage my land in substitution of the obligation to make payment within 30 days.

Effect of loss.

(1) Before substitution. — If the principal thing is lost through a fortuitous, event, the obligation is
extinguished; otherwise, the debtor is liable for damages. The loss of the thing intended as a
substitute with or without the fault of the debtor does not render him liable.
The reason is that the thing intended as a substitute is not due. The effect of the loss is merely
to extinguish the facultative character of the obligation.

EXAMPLES:

S will give B item one or if S wants, item two. If:

(a) item one is lost through a fortuitous event — the obligation of S is extinguished. (Arts. 1174,
1262.)
(b) item one is lost through the fault of S S is liable for damages. (Art. 1170.)
(c) item two is lost with or without the fault of S — S is still liable to deliver item one (see Art.
1165.); he is not liable for damage for the loss of item two as it is not due.
(2) After substitution. — If the principal thing is lost, the debtor is not liable whatever may be the
cause of the loss, because it is no longer due. If the substitute is lost, the liability of the debtor
depends upon whether or not the loss is due to his fault.

Once the substitution is made, the obligation is converted into a simple one to deliver or perform
the substituted thing or prestation. The substitution becomes effective from the time it has been
communicated. (Art. 1201.)

EXAMPLES:

Based on the preceding example, if:

(a) item one is lost with or without the fault of S — S is not liable for its loss since his obligation is to
deliver item two.
(b) item two is lost through a fortuitous event — obligation of S is extinguished.
(c) item two is lost through the fault of S — S is liable for damages.

Alternative and facultative obligations distinguished.

The differences are as follows:

(1) Number of presentations. — In the first, several prestation’s are due but compliance with
one is sufficient, while in the second, only one (1) prestation is due although the debtor is
allowed to substitute it;
(2) Right of choice. — In the first, the right of choice may be given to the creditor or third
person, while in the second, the right to make the substitution is given only to the debtor.
(3) Loss through a fortuitous event. — In the first, the loss of one or more of the alternatives
through a fortuitous event does not extinguish the obligation, while in the second, the loss
of the thing due extinguishes the obligation; and
(4) Loss through fault of debtor. —
(a) In the first, the loss of one of the alternatives through the fault of the debtor does not render
him liable, while in the second, the loss of the thing due through his fault makes him liable.
(b) In the first, where the choice belongs to the creditor, the loss of one alternative through the
fault of the debtor gives rise to liability, while in the second, the loss of the substitute before the
substitution through the fault of the debtor does not render him liable.