I. Read Chapter 3: Kinds of Obligations and complete the table below.

CHARACTERISTICS/
ELEMENTS/ EFFECT ON OTHER PERTINENT
KINDS OF OBLIGATIONS LEGAL BASIS/APPLICABLE LAWS DEFINITION EXAMPLE
REQUISITES/ OBLIGATION FACTS
FUNCTIONS

Art 1179 (1) – Every obligation whose
performance does not depend upon a
future or uncertain event, or upon a
PURE
past event unknown to the parties is
demandable at once.
Is one which is not subject
to any condition and no
specific date is mentioned
for its fulfillment and is,
therefore, immediately
demandable.
- Not subject to any The obligation will become I promise to give you It is an obligation that is
condition. demandable at once or P5,000. considered as a simple
- Not subject to any immediately demandable. obligation where a party
term/period. owed something to the
other.

Art. 1181 (1) - In conditional Is one whose 1. Futurity - The acquisition of rights, I will give you my car if you When the debtor binds
obligations, the acquisition of rights, as consequences are subject EXC: A past event as well as the pass the Bar himself to pay when his
well as the extinguishment or loss of in one way or another to unknown to the parties. extinguishment or loss of Examinations. means permit him to do so,
those already acquired, the fulfillment of a those already acquired, the obligation shall be
shall depend upon the happening of condition. 2. Uncertainty (may or shall depend upon the deemed to be one with a
CONDITIONAL
the event which constitutes the may not happen) happening of the condition period, subject to the
condition (1181) provisions of Art 1197. (Art
- The effect will depend on 1180)
what kind of condition is
attached to the obligation.

Art 1186 – The condition shall be - It is one that suspends - The condition is Suspensive condition will X insured his car with an Mere intention of the
deemed fulfilled when the obligor the effectivity of the suspensive take effect once the insurer against loss and debtor to prevent the
voluntarily prevents its fulfillment. obligation until the - The obligor fulfillment of the damage. It was stipulated happening of the
condition is fulfilled. It is actually prevents suspensive condition is in the policy that the driver condition, or to place
Art 1187 – The effects of a conditional the fulfillment of the the fulfillment of the extinguished unless the of the insured car must be ineffective obstacle to its
obligation to give, once the condition condition that produces condition; and parties agree. the owner of a valid and compliance without
has been fulfilled, shall retroact to the the efficacy of the - He acts voluntarily subsiding license. Later, actually preventing the
day of the constitution of the obligation. or intentionally. the car was involved in an fulfillment is insufficient.
obligation. Nevertheless, when the accident, and the driver (Tolentino; Civil Code of
obligation imposes reciprocal had an expired license. the Philippines, Vol IV).
prestations upon the parties, the fruits
Suspensive Condition
and interests during the pendency of
the condition shall be deemed to have
been mutually compensated.

Art. 1188 – The creditor may, before

the fulfillment of the condition, bring
the appropriate actions for the
preservation of his right.
The debtor may recover what during
the same time he has paid by mistake
in case of a suspensive condition.

Art. 1190 – When the conditions have - It is one which An obligation is Resolutory Condition will I will give you my specific The fulfillment of the
for their purpose the extinguishment of extinguishes the obligation extinguished once the take effect upon the car today but you should resolutory condition
Resolutory Condition an obligation to give, the parties upon upon the happening of the obligation has been fulfillment of the condition pass the October 2011 converts the creditor into
the fulfillment of said conditions, shall condition. The obligation delivered to the creditor. in its obligation to give and CPA Examination, my debtor, and the debtor into
return to each other what they have takes effect at once, but in obligation to do or not to obligation is terminated. creditor.

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 received. will terminate upon the do.
happening of the event.

Art.1182 – When the fulfillment of the - It is one which depends Potestative Condition is Since the Potestative D is to give C P50,000 if D A potestative condition is a
condition depends upon the sole will of upon the will of one of the upon the will of either the conditions do not create goes to Baguio. condition suspensive in
the debtor, the conditional obligation contracting parties. debtor or creditor. obligations at all and nature.
shall be void. If it depends upon impose no duty on the
Potestative Condition
chance or upon the will of a third parties, the obligation is
person, the obligation shall take effect void and has no effect.
in conformity with the provisions of this
Code.

Art. 1182 - When the fulfillment of the
condition depends upon the sole will of
the debtor, the conditional obligation
shall be void. If it depends upon
chance or upon the will of a third
person, the obligation shall take effect
in conformity with the provisions of this
Casual Condition Code.
The condition that If the condition is casual Where X, building When the fulfillment of the
depends upon chance or and its fulfillment depends contractor, obliges himself condition does not depend
upon the will of a third upon chance and/or upon in favor of Y owner, to on the will of the obligor,
person. the will of a third person, repair at X's expense any but that on a third person
the obligation is deemed damage that may be who can in no way be
as valid. caused to the building by compelled to carry it out,
any earthquake occurring and it is found by the court
within 10 years from the that the obligor has done
date of the completion of all in his power to comply
its construction. with his obligation, his part
of the contract is deemed
complied with and he has
a right to demand
performance of the
contract by the other party.

Art. 1182 - When the fulfillment of the
condition depends upon the sole will of
the debtor, the conditional obligation
shall be void. If it depends upon
chance or upon the will of a third
person, the obligation shall take effect
in conformity with the provisions of this
Mixed Condition
Code.
The condition that
depends partly upon the
will of one of the
contracting parties and
partly by chance, fortune
or will of a third person or
party.
It is a mixed condition It will be valid only once the
when the potestative and fulfillment of the condition
casual condition is depends partly on the will
combined together to be of one of the contracting
as one. parties and partly by
chance, fortune or will of a
third person/party.
Where X, building It should depend partly on
contractor, obliges himself the will of the debtor and
in favor of Y, owner, to partly on chance, hazard
repair at X's expense, any or the will of a third person
damage to the building which do not invalidate Art.
taking place after an 1182 of this Code.
earthquake if found by a
panel of arbitrators that
construction defects
contributed in any way to
the damage. Both
conditions must take place
in order that X’s obligation
will arise.

Art. 1182 - When the fulfillment of the The condition that is Possible condition must be When an obligation is a I will give you P5,000 if you The condition will depend
condition depends upon the sole will of capable of fulfillment, possible to fulfill or possible condition, it is pass the Quiz. upon the will of either the
the debtor, the conditional obligation legally and physically. extinguished. automatically considered debtor or the creditor
shall be void. If it depends upon as valid. depending on what they
Possible Condition
chance or upon the will of a third have agreed on.
person, the obligation shall take effect
in conformity with the provisions of this
Code

Impossible Condition Art. 1183 – Impossible conditions, - The condition that 1. Applies in suspensive - Impossible conditions I will give you P10,000 if There are two kinds of

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 those contrary to good customs or is not capable of conditions that depend upon the you will make a dead man impossible conditions:
public policy and those prohibited by fulfillment, legally 2. Applies where the obligor annul the alive. a. Physically impossible
law shall annul the obligation which or physically. impossibility already obligation. conditions which cannot
depends upon them. If the obligation is existed at the time the - If the condition is be done or cannot exist.
divisible, that part thereof which is not - Physically obligation was constituted. negative, that is not to do b. Legally impossible
affected by the impossible or unlawful impossible (If the impossibility arises an impossible thing, it is conditions which are
condition shall be valid. conditions – by its after the creation of the disregarded and the contrary to law, morals,
nature cannot exist obligation, Art 1266 obligation is rendered pure good customs, public
The condition not to do an impossible or cannot be done. applies) and valid. order or public policy.
thing shall be considered as not having 3. Applies in obligations to - If the obligation is
been agreed upon. give and to do. divisible, the part thereof
- Legally impossible not affected by the
conditions – by its impossible condition shall
nature is contrary be valid.
to law, morals, - If the obligation is pre-
good customs, existing obligation and
public order, or does not depend upon the
public policy fulfillment of the
impossible condition, the
condition is void.

Art. 1184 – The condition that some It is the happening of an The Positive Condition is When a positive condition I will give you a specific car Positive condition is
event happen at a determinate time event at a determinate extinguished once the has been extinguished, if you will marry X, this year extinguished:
shall extinguish the obligation as soon time obligation has been the term of the obligation 2023. - As soon as the time
as the time expires or if it has become fulfilled. will be expired and the said expires without the
indubitable that the event will not take condition cannot be event taking place;
place. materialized. or
Positive Condition - As soon as it has
become
indubitable that the
event will not take
place although the
time specified has
not yet expired.

Art.1185 – The condition that some It is a condition that The Negative Condition Similar to the Positive I will give you a specific car It may be considered as
event will not happen at a determinate consists in refraining from shall be effective once the Condition, the effect of the if you will not marry X this negative condition either
time shall render the obligation doing an omission of an obligation has been negative condition is it will year 2023. when a time has been
effective from the moment the time act (not to do). fulfilled. likewise expire the term fixed or if no time has been
indicated has elapsed, or if it has . and the said condition fixed.
become evident that the event cannot cannot be materialized as
occur. well.
Negative Condition
If no time has been fixed, the condition
shall be deemed fulfilled at such time
as may have probably been
contemplated, bearing in mind the
nature of the obligation.

Art 1191 – The power to rescind Unilateral is when only one Unilateral applies to the In a contract of loan, A is Both of the party is obliged
obligations is implied in reciprocal party is obliged to comply collection of sums of obliged to give the sum of to give something to the
UNILATERAL
ones, in case one of the obligors with a prestation. money where the creditor money to B for his loan. other.
should not comply with what is gave to the debtor what he After A has given the
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 incumbent upon him. had asked or requested money, B has the
for. obligation to pay his loans.
The injured party may choose between
the fulfillment and the recission of the
obligation, with the payment of
damages in either case. He may also
seek recission, even after he has
chosen fulfillment, if the latter should
become impossible.

The court shall decree the recission

claimed, unless there be just cause
authorizing the fixing of a period.

This is understood to be without

prejudice to the rights of third person
who have acquired the thing, in
accordance with Articles 1385 and
1388 of the Mortgage Law.

Bilateral is when both Non-reciprocal applies RECIPROCAL: RECIPROCAL: RECIPROCAL:

Art 1191 – The power to rescind parties are mutually bound where the debtor delivered When one of the parties In a contract of sale, in theArt 1169 applies to
obligations is implied in reciprocal to each other; both parties the thing due to the fulfills his obligation, the absence of any stipulation, compensatio morae where
ones, in case one of the obligors are debtors and creditors creditor returning his favor delay for the other party the delivery of the thing those obliged to deliver or
should not comply with what is as to each other. to him. shall begin. sold by the seller is to do something incur in
incumbent upon him. conditioned upon thedelay from the time the
Reciprocal is a kind of simultaneous payment of obligee judicially or
The injured party may choose between bilateral obligation which the purchase price by the extrajudicially demands
the fulfillment and the recission of thearises from the same buyer, and vice versa. from them the fulfillment of
obligation, with the payment of cause and in which each their obligation.
damages in either case. He may also party is a debtor and NON-RECIPROCAL: On the other hand, Art
seek recission, even after he has creditor of the other, such Y borrowed from Z 1192 applies when both
BILATERAL/
chosen fulfillment, if the latter shouldthat the performance of P1million. → loan parties are guilty of breach.
RECIPROCAL
become impossible. one is designed to be the
NON-RECIPROCAL
equivalent and the Y, on the other hand,
The court shall decree the recission condition for the borrowed Z’s car →
claimed, unless there be just cause performance of the other. commodatum
authorizing the fixing of a period.
Non-Reciprocal is a kind of
This is understood to be without bilateral obligation which
prejudice to the rights of third person does not impose
who have acquired the thing, in simultaneous and
accordance with Articles 1385 and correlative performance on
1388 of the Mortgage Law. both parties; the
performance of one party
is not dependent upon the
simultaneous performance
by the other.

Art 1191 – The power to rescind It is one whose 1. Futurity The effect for term or D borrowed from C P10,0 When the obligation or
WITH A TERM OR PERIOD obligations is implied in reciprocal consequences are 2. Certainty period will depend on what 00.00 payable on Decemb condition has a term or
ones, in case one of the obligors subjected in one way or 3. Possible kind of term/period is er 31 with the stipulation period, it is deemed valid

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 should not comply with what is another to the expiration of attached to the obligation that D cannot make at its inception.
incumbent upon him. said period or term. and those obligations that payment before the lapse
are not yet due and of the period but C may
The injured party may choose between payable cannot be demand fulfillment even
the fulfillment and the recission of the complained. before said date.
obligation, with the payment of
damages in either case. He may also
seek recission, even after he has
chosen fulfillment, if the latter should
become impossible.

The court shall decree the recission

claimed, unless there be just cause
authorizing the fixing of a period.

This is understood to be without

prejudice to the rights of third person
who have acquired the thing, in
accordance with Articles 1385 and
1388 of the Mortgage Law.

Art. 1191 (2) - The injured party may
choose between the fulfillment and the
recission of the obligation, with the
Suspensive Term (Ex Die) payment of damages in either case.
He may also seek recission, even after
he has chosen fulfillment, if the latter
should become impossible.
It is where the obligation
begins only from a day
certain upon the arrival of
the period.
Day Certain - the day A suspensive term shall
which will necessarily take effect only when the
come, although it may not obligation is fulfilled.
be known when; whether
we like it or not.
Joey promises to support Suspensive term is a law
Rachel from the death of that has an obligation with
Rachel’s father, which a certain period.
means the obligation only
begins from the death of
Rachel’s father.

Art. 1191 (2) - The injured party may It is a period after which Day Certain - the day Obligations with a Joey promises to support When a contract is subject
choose between the fulfillment and the the obligation is which will necessarily resolutory period take Rachel until Rachel to a resolutory condition,
recission of the obligation, with the extinguished. come, although it may not effect once the obligation reaches her majority age, the non-compliance with
Resolutory Term (In Diem) payment of damages in either case. be known when; whether comes to an end. which means the the condition resolves the
He may also seek recission, even after we like it or not. obligation is already contract by force of law
he has chosen fulfillment, if the latter effective but will terminate without need of a judicial
should become impossible. once Rachel turns 18. declaration.

Art. 1191 (2) - The injured party may
choose between the fulfillment and the
recission of the obligation, with the
payment of damages in either case.
CONJUNCTIVE
He may also seek recission, even after
he has chosen fulfillment, if the latter
should become impossible.
It is one where there are Two or more objects or The conjunctive condition In order to satisfy B’s debt The right of choice belongs
several prestation and all prestations are needed to will take effect when its to the C, the former to the debtor unless it has
of them are due and be fulfilled. fulfillment gives rise to the undertook to deliver his been expressly granted to
demandable. obligation. Otherwise, no own phone to the latter. the creditor.
obligation will arise. Likewise, he undertook to
render free legal services
with the value up to
P15,000.00.

Art. 1191 (3) - The court shall decree It is one where one of two Similar to conjunctive, two Similar to the conjunctive Janelle borrowed P50,000 The right of choice belongs
the recission claimed, unless there be or more of the prestations or more objects or condition, the distributive cash from Shiela. It was to the debtor unless it has
just cause authorizing the fixing of a is due and demandable. prestations are needed to condition shall take effect agreed that Janella has the been expressly granted to
DISTRIBUTIVE period. be fulfilled. also when an obligation is alternative to pay Shiela the creditor
fulfilled. either in P50,000 cash or
an Iphone 14, or a 40” LED
TV.

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 Art. 1199 – A person alternatively It is one wherein various - An obligation Alternative obligation shall D borrowed from C A person alternatively
bound by different prestations shall prestations are due but the where several take effect once the debtor P10,000,00. It was agreed bound by different
completely perform one of them. performance of one of prestations are has fulfilled his obligation that D could comply with prestations shall
them is sufficiently due, BUT the towards the creditor. his obligation by giving C completely perform one of
The creditor cannot be compelled to determined by the choice performance of P10,000.00 or a color them.
receive part of one and part of the which, as a general rule, one is sufficient. television set, or by
other undertaking. belongs to the debtor. - Debtor/obligor has painting the house of C.
the right to choose;
Art. 1200 – The right of choice belongs - Choosing may also
to the debtor, unless it has been be granted to the
expressly granted to the creditor. creditor/obligee.
- The loss of one of
The debtor shall have no right to the things does
choose those prestations which are NOT extinguish the
impossible, unlawful or which could obligation.
not have been the object
of the obligation.

Art. 1201 – The choice shall produce

no effect except from the time it has
been communicated.

Art. 1202 – The debtor shall lose the

right of choice when among the
prestations whereby he is alternatively
bound, only one is practicable.
Alternative
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.

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.

Art. 1205 – When the choice has been

expressly given to the creditor, the
obligation shall cease to be alternative

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 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 prestations
should become impossible.

Art. 1206 – When only one prestation It is one where only one - one thing is due, Facultative condition shall I will give you my guitar but In facilitative obligation,
has been agreed upon, but the obligor prestation has been but another is paid take effect when the I may give my television even though one
may render another in substitution, the agreed upon but the in its place. obligation is extinguished set as a substitute. prestation is agreed upon,
obligation is obligor may render - There is no where the debtor is liable the obligor may render
called facultative. another in substitution. alternative for damages. another as its substitution
The loss or deterioration of the thing However, if only one is provided. in order to extinguish the
Facultative intended as a substitute, through the chosen, the other is - The debtor is given obligation.
negligence of the obligor, does not discarded. the right to
render him liable. But substitute the thing
once the substitution has been made, due with another
the obligor is liable for the loss of the that is not due.
substitute on account of his delay,
negligence or fraud.

Art 1207 – The concurrence of two or It is one where the whole - The whole The effect of a joint A, B, and C are liable to D There are two kinds of
more creditors or of two or more obligation is to be paid or obligation is to be obligation is the non- in the amount of P9,000.00 obligation according to the
debtors in one and the same obligation fulfilled proportionately by paid or fulfilled performance of one of the and it was stated that the number of parties:
does not imply that each one of the the different debtors proportionately by debtors in their debt and corresponding share of a. Individual obligation
formers has a right to demand, or that and/or is to be demanded the different the creditor can file an each of them is P3,000.00. where there is only one
JOINT
each one of the latter is bound to proportionately by the debtors. action for the non- obligor and obligee.
render, entire compliance with the different creditors. - The obligations are performance of the b. Collective obligation
prestations. There is a solidary liability demanded debtors. where there are two or
only when the obligation expressly so proportionately by more debtors and/or two or
states, or when the law or the nature of the different more creditors that will fall

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 the obligation requires solidarity. creditors under either joint or
solidary obligation.
Art 1208 – If from the law, or the
nature or the wording of the obligations
to which Art 1207 refers the contrary
does not appear, the credit or debt
shall be presumed to be divided into as
many equal shares as there are
creditors or debtors, the credits or
debts being considered distinct from
one another, subject to the Rules of
Court governing the multiplicity of
suits.

Art 1207 – The concurrence of two or It is one where each one of - Unity of object The creditor can claim the A and B are solidary There is solidary liability
more creditors or of two or more the debtors is liable for the - plurality of ties thing due from any one of debtors of C in the amount only when:
debtors in one and the same obligation entire obligation and/or them until full performance of P10,000.00. a. the obligation expressly
does not imply that each one of the each one of the creditors has been received. so states; or
formers has a right to demand, or that has a right to demand b. the law requires
each one of the latter is bound to entire compliance or solidarity; or
render, entire compliance with the satisfaction of the whole c. the nature of the
prestations. There is a solidary liability obligation from any or all of obligation requires
only when the obligation expressly so the debtors. solidarity.
states, or when the law or the nature of
the obligation requires solidarity. Solidary liability also exists
SOLIDARY when it is imposed in a
Art 1208 – If from the law, or the final judgment against
nature or the wording of the obligations several defendants.
to which Art 1207 refers the contrary
does not appear, the credit or debt
shall be presumed to be divided into as
many equal shares as there are
creditors or debtors, the credits or
debts being considered distinct from
one another, subject to the Rules of
Court governing the multiplicity of
suits.

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.
DIVISIBLE 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
It is one the object of - Each obligor is bound to The creditor will be The obligation of X to paint The kinds of divisions are:
which, in its delivery or perform their obligations; capable of partial the house of Y should be a. Qualitative division or
performance is capable of - Each obligee is entitled fulfillment once the thing finished in 10 days. one based on quality
partial fulfillment. to receive, only his portion. due has been delivered or where it is not based on
the performance was number or quantity of
extinguished. things that are the object of
the obligation.
b. Quantitative division
or one based on quantity
rather than on quality.
c. Ideal or intellectual
division or one which
exists only in the minds of
the parties.

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 the thing or of the value of the service
in which the obligation consists.

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.

Art 1223 – The divisibility or It is one the object of - Each obligor has an To give 10 pcs of Pilot There are kinds of
indivisibility of the things that are the which, in its delivery or obligation to give black ballpen with 0.7 indivisibility:
object of obligations in which there is performance is not definite/specific things; ballpoint that should be a. Legal indivisibility
only one debtor and only one creditor capable of partial - Obligations which are not used in the upcoming where a specific provision
does not alter or modify the provisions fulfilment. susceptible of partial midterm examinations. of law declares it and the
of Chapter 2 of this Title. performance; obligations which, by their
- Obligations provided by nature are divisible.
Art 1224 – A joint indivisible obligation law to be indivisible, even b. Conventional
gives rise to indemnity for damages if thing or service is indivisibility where the
from the time anyone of the debtors physically divisible; will of the parties makes as
does not comply with his undertaking. - Obligations intended by indivisible and obligations
The debtors who may have been the parties to be indivisible which, by their nature, are
ready to fulfill their promises shall not even if thing or service is divisible.
contribute to the indemnity beyond the physically divisible. c. Natural indivisibility
INDIVISIBLE
corresponding portion of the price of where the nature of the
the thing or of the value of the service object or prestation does
in which the obligation consists. not admit of division.

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

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 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.

Art 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.
It is one which contains an
accessory undertaking to
pay a previously stipulated
indemnity in case of
breach of the principal
prestation intended
primarily to induce its
fulfillment.
- To fulfill the performance
of the obligation;
- in case of non-
compliance, its purpose is
to extinguish an obligation
by substituting a penalty
for the indemnity for
damages and payment of
interest.
In case of non-compliance
or if no stipulation has
been made to the contrary,
the penalty shall substitute
the indemnity for damages
including the payment of
interest.
S made a promise that he Penal clause constitutes
will convey D the house an obligation and may
and if he fails, he should become demandable in
pay him P500,000.00 default of an unperformed
obligation and sometimes
jointly in it.

The penalty may be enforced only

when it is demandable in accordance
with the provisions of this Code.

Art. 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
WITH A PENAL CLAUSE 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.

Art. 1228 – Proof of actual damages

suffered by the creditor is not
necessary in order that the penalty
may be demanded.

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

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BANGASAN, Roxanne Angela Claire L

 penalty may also be reduced by the
courts if it is iniquitous or
unconscionable.
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.

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BANGASAN, Roxanne Angela Claire L

II. Read Art. 1189 and 1194, and create an outline or draw a diagram showing the Loss, Deterioration, Improvement (LDI) Rules. Place your outline or diagram below.

LOSS DETERIORATION IMPROVEMENT

Deterioration Improvement of Improvement of

Deterioration of
Loss of thing Loss of thing of thing thing by nature thing at expense
thing through
without debtor’s through debtor’s without or by time of debtor
debtor’s fault
fault fault debtor’s fault

EXAMPLES EXAMPLES EXAMPLES

If the car figured in an In the same case, C

D obliged himself to In the same example, if accident, as a result of
give C his car worth the loss occurred which its windshield
P100,000 if C sells because of the was broken and some
D’s property. The negligence of D, C will of its paints were
car was lost without be entitled to demand scratched away
the fault of D. damages, if any. without the fault of D,
thereby reducing its
value to P8,000, C will
have to suffer the
deterioration of
impairment in the
amount of P20,000.
may choose between In the same example
In the same example, the
Rescission (or where D had the car
improvement shall
cancellation) of the painted and its seat
insure to the benefit of C.
obligation with cover changed at his
C should be
damages where D is expense, he will have the
compensated in case of
liable to pay P100,000 right granted to a
improvement of the car.
or fulfillment of the usufructuary with
obligation also with respect to improvements
damages where D is made on the thing held
bound to C to give the in usufruct.
car and pay P20,000
plus incidental
damages.

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BANGASAN, Roxanne Angela Claire L