CHAPTER 5 – DIVISIBLE AND INDIVISIBLE OBLIGATIONS

Coverage: Art. 1223 - 1225

Art. 1223. The divisibility or indivisibility of the things that are the object of
obligations in which there is only one debtor and only one creditor does not
alter or modify the provisions of Chapter 2 of this Title.

(1) A thing is indivisible when its value diminishes if it is divided into parts (e.g., car,
monkey) [must be delivered as a whole or at one time]
(2) A thing is divisible when its value does not diminish even if it is divided into parts
(e.g., money) [may be delivered at different times or by parts]
Divisibility or indivisibility of the obligation — relates to the execution of the prestation,
not the thing that is the object of it. The object of an indivisible obligation may be
divisible or indivisible but what determines the divisibility or indivisibility of an obligation
is the intention of the parties.
DIVISIBLE OBLIGATION INDIVISIBLE OBLIGATION
Object may be divisible or indivisible Object may be divisible or indivisible

Capable of partial fulfillment Not capable of partial fulfillment

Creditor cannot demand a single Creditor can demand a single
performance of the entire obligation performance of the entire obligation

Kinds of division:
1. Qualitative – division based on quality, such as when the division is set up as a car,
P500,000, or a condo unit.
2. Quantitative – division based on quantity; take for example there is 20 hectares of
land, a quantitative division of the land would be to divide the 20 hectares of land to
parts of smaller hectares.
3. Ideal or Intellectual – parts are not separated in a material way.
**NOTE THAT DIVISIBILITY LIES IN THE INTENTION OF THE PARTIES**
Example (1): Ryan, Lopez, Hulio are obliged to pay P30,000 to Rica on November 12,
2022.
Is this an indivisible or a divisible obligation? It is an indivisible obligation.
Reason (1): Even though money is a divisible object the obligation expressly states that
the payment is fixed on November 12, 2022 therefore making the obligation indivisible.
Art. 1224. A joint indivisible obligation gives rise to indemnity for damages
from the time anyone of the debtors does not comply with his undertaking.
The debtors who may have been ready to fulfill their promises shall not
contribute to the indemnity beyond the corresponding portion of the price of
the thing or of the value of the service in which the obligation consists.

Rule:
(1) If a debtor is unwilling to comply in a joint indivisible obligation, his obligation is
converted into a monetary obligation, which composes of his share on the price of the
thing and indemnity for damages.
(2) Those others who complied with the obligation are not liable for damages.

Art. 1225. For the purposes of the preceding articles, obligations to give
definite things and those which are not susceptible of partial performance
shall be deemed to be indivisible.

When the obligation has for its object the execution of a certain number of
days of work, the accomplishment of work by metrical units, or analogous
things which by their nature are susceptible of partial performance, it shall
be divisible.

However, even though the object or service may be physically divisible, an

obligation is indivisible if so provided by law or intended by the parties.

In obligations not to do, divisibility or indivisibility shall be determined by the

character of the prestation in each particular case.

1st Para. Obligations deemed cannot be divided (indivisible):

(1) Obligations to give definite things
(2) Obligations which are not capable of partial performance

2nd Para. Obligations deemed can be divided (divisible):

(1) Obligations whose completion requires several days of work
(2) Obligations that use metrical units (e.g., feet, meter) for accomplishment
(3) Obligations which are capable of partial performance

3rd Para. Exceptions:

(1) If divisibility or indivisibility is expressly stated by law or by intention of the parties.

4th Para. Divisibility or indivisibility in obligations not to do:

(1) Depends on nature of prestation
Example for indivisible negative personal obligations:
Not to buy from Walmart for a year, by nature of the obligation he shall continuously not
buy from Walmart for a year.
Example for divisible negative personal obligations:
Not to buy from Walmart during Holidays, the obligation is not continuous making it
divisible.

CHAPTER 6 – OBLIGATIONS WITH PENAL CLAUSE

Coverage: Art. 1226 - 1230

ARTICLE 1226. IN OBLIGATIONS WITH A PENAL CLAUSE, THE PENALTY
SHALL SUBSTITUTE THE INDEMNITY FOR DAMAGES AND THE PAYMENT OF
INTERESTS IN CASE OF NONCOMPLIANCE, IF THERE IS NO STIPULATION TO
THE CONTRARY. NEVERTHELESS, DAMAGES SHALL BE PAID IF THE
OBLIGOR REFUSES TO PAY THE PENALTY OR IS GUILTY OF FRAUD IN THE
FULFILLMENT OF THE OBLIGATION.

THE PENALTY MAY BE ENFORCED ONLY WHEN IT IS DEMANDABLE IN

ACCORDANCE WITH THE PROVISIONS OF THIS CODE.

General Rule: Penalty is substitute to interest and damages.

Exceptions (Situations where creditor can demand interest and damages after penalty)
(1) When expressly stipulated
(2) Debtor refuses to pay penalty
(3) Debtor is guilty of fraud

ARTICLE 1227. 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 SAME TIME,
UNLESS THIS RIGHT HAS BEEN CLEARLY GRANTED HIM. HOWEVER, IF
AFTER 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.

General Rules: Debtor cannot extinguish his obligation by paying penalty

Creditor cannot demand penalty and fulfillment at the same time
Exceptions
(1) Fulfilment of the obligation is impossible
ARTICLE 1228. PROOF OF ACTUAL DAMAGES SUFFERED BY THE CREDITOR
IS NOT NECESSARY IN ORDER THAT THE PENALTY MAY BE DEMANDABLE

Penalty is a type of damage that does not need proof of pecuniary loss to be granted.
(1) Creditor may enforce penalty regardless whether he suffered damages or not. But
not more than the stipulated penalty.
Article 1228 only applies when General rule of Art. 1226 applies as well.

Art. 1229. The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if
there has been no performance, the penalty may also be reduced by the
courts if it is iniquitous or unconscionable.

Penalty can be reduced if:

(1) If obligor has partly complied with the obligation
(2) If penalty is unreasonable (even if no performance done yet)

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.

Rule: If penalty is not valid but main obligation is valid, the obligation is valid.
If main obligation is not valid but penalty is valid, the obligation is invalid.
Example:
(1) Angelo obliged to deliver 5kg of Shabu to Bob on Sunday, if ever he does not, he will
pay a penalty of P500 – invalid obligation since principal obligation is contrary to law.
(2) Angelo agreed in a contract to pay his debt of P10 to Bob within 2 months, if he fails
to do so he will become Bob’s slave forever. – obligation is valid since only the penalty
is invalid.