CHAPTER 3 DIFFERENT KINDS OF

OBLIGATION
Classification of obligation -> Period- future and certain event which the obligation
(1) Primary classification of obligations under the civil subject to it either arises or extinguish.
code: 1) Debtor promises to pay when his means permit him
(a) Pure and Conditional obligations (Arts. 1179- to do so.
1192) 2) Other cases- when the debtor binds himself to pay:
ART. 1179—Every obligation whose performance does • “little by little”
not depend upon a future or uncertain event, or upon • “as soon as possible”
a past event unknown to the parties, is demandable at ART. 1181 – In conditional obligations, the acquisition
once. of rights, as well as the extinguishment or loss of those
Every obligation which contains a resolutory condition already acquired, shall depend upon the happening of
shall also be demandable, without prejudice to the the event which constitute the condition.
effects of the happening of the event. Effect of happening of condition
➔ Pure Obligation- not subject to any condition 1) Acquisition of rights
and no specific date is mentioned for its 2) Loss of rights already acquired
fulfillment, therefore, immediate demandable. ART. 1182 – When the fulfillment of the condition
➔ Conditional Obligation- consequences are depends upon the sole will of the debtor, the
subject in one way or another to the fulfillment conditional obligation shall be void, if it depends upon
of a condition. chance or upon the will of a third person, the
➔ Condition- future and uncertain event, upon the obligation shall take effect in conformity with the
happening of which, the effectivity or provisions of this code.
extinguishment of an obligation Kinds of Condition
Characteristics of a condition Potestative Casual Mixed
1) future and Uncertain Condition Condition Condition
2) Past but unknown depends upon depends upon depends partly
3) Not impossible the will of one chance or upon upon the will of
2 Principal kinds of condition of the will of the third the parties and
Suspensive condition Resolutory condition contracting person. partly upon
fulfillment will give rise to fulfillment will extinguish an parties chance or upon
an obligation obligation already existing will of the third
Suspends the Obligation is demandable at person.
demandability of the once. Where suspensive condition depends upon the will of
obligation until condition is debtor
fulfilled. 1) Suspensive condition depends solely upon will
If the condition does not if the condition does not take of the debtor, conditional obligation is VOID
take place, the tie place, the tie 2) Only the condition void.
of law (juridical or legal tie) of law is consolidated; • “I will pay you if I want”
does not • “I will pay you after I receive a loan
appear from a bank”
Until the condition takes its effects flow, but over it, • “I will pay you after I recover what D
place, the hovers the owes me”
existence of the obligation possibility of termination 3) Suspensive condition depends partly upon will
is a mere hope. of the debtor, conditional obligation is VALID.
WHERE SUSPENSIVE
ART. 1180— When the debtor binds himself to pay Condition depends upon the will of creditor
when his means permit him to do so, the obligation 1) Conditional obligation is VALID.
shall deemed to be one with period, subject to the • “I will pay you when you want to.”
provisions of article 1197 • “I will pay you after you received a loan
Where duration of period depends upon the will of from a bank”
debtor Where resolutory condition depends upon the will of
debtor
1) Resolutory condition is VALID ART. 1186 – The condition shall be deemed fulfilled
• pacto de retro sale when the obligor voluntarily prevents its fulfillment.
ART. 1183—Impossible conditions, those contrary to Constructive fulfillment of suspensive condition
good customs or public policy and those prohibited by 1) The condition is suspensive
law shall annul the obligation which depends upon 2) The obligor actually prevents the fulfillment of the
them. If the obligation is divisible, that part thereof condition
which is not affected by the impossible or unlawful 3) He acts voluntarily
condition shall be valid. The condition not to do an Constructive fulfillment of resolutory condition
impossible thing shall be considered as not having been 1) The condition is resolutory
agreed upon. 2) The person is bound to return what
2 Kinds of impossible condition he has received upon fulfillment of the
Physically impossible Legally impossible condition
conditions conditions 3) The debtor prevents the happening
when they, in the nature when they are contrary of the condition
of things, cannot exist or to law, morals, good ART. 1187 – The effects of a conditional obligation to
cannot be done customs, public order, or give, once the condition has been fulfilled, shall retroact
public policy. to the day of the constitution of the obligation.
EFFECT OF IMPOSSIBLE CONDITION Nevertheless, when the obligation imposes reciprocal
Conditional obligation Conditional obligation prestations upon the parties, the fruits and interests
VOID VALID during the pendency of the condition shall be deemed
Impossible conditions If the condition is to have been mutually compensated. If the obligation is
annul the obligation negative - not to do an unilateral, the debtor shall appropriate the fruits and
which depends upon impossible thing, the interests received, unless from the nature and
them obligation is rendered circumstances of the obligation it should be inferred
pure and valid. that the intention of the person constituting the same
was different. In obligations to do and not to do, the
Only the affected Only the condition void courts shall determine, in each case, the retroactive
obligation void effect of the condition that has been complied with.
obligation is divisible, If the obligation is pre- Retroactive effects of fulfillment of suspensive
the part thereof not existing, and does not condition
affected by the depend upon the fulfillment 1) Real Obligation
impossible condition of the impossible condition 2) Personal Obligation
shall be valid. for its existence, only the • its effects shall retroact to the day
condition is void. when the obligation was constituted
CONDITION • No fixed rule.
POSITIVE • The courts are empowered by the
• Condition that some event happen at a determinate use of sound discretion and bearing
time in mind the intent of the parties
ART. 1184 – The condition that some event happen at a Retroactive effects as to fruits and interests in
determinate time shall extinguish the obligation as obligations
soon as the time expires or if it has become indubitable 1) In Reciprocal Obligation
that the event will not take place 2) In Unilateral Obligation
NEGATIVE • no retroactivity
• Condition that some event will not happen at a • usually no retroactive effect
determinate time. ART. 1188 – The creditor may, before the fulfillment of
ART. 1185 – The condition that some event will not the condition, bring the appropriate actions for the
happen at a determinate time shall render the preservation of his right. The debtor may recover what
obligation effective from the moment the time indicated during the same time he has paid by mistake in case of a
has elapsed, or if it has become evident that the event suspensive condition
cannot occur. If no time has been fixed, the condition Rights pending fulfillment of suspensive condition
shall be deemed fulfilled at such time as may have 1) Rights of creditor
probably been contemplated, bearing in mind the 2) Rights of debtor
nature of the obligation • he may go to court to prevent the alienation or
concealment of the property of the debtor damages in either case. He may also seek rescission,
• to have his right annotated with the Register of Deeds. even after he has chosen fulfillment, if the latter should
• Entitled to recover what he has paid by become impossible. The court shall decree the
mistake prior to the happening of the rescission claimed, unless there be just cause
suspensive condition authorizing the fixing of a period.
ART. 1189 – When the conditions have been imposed This is understood to be without prejudice to the
with the intention of suspending the efficacy of an rights of third persons who have acquired the thing, in
obligation to give, the following rules shall be observed accordance with Articles 1385 and 1388 and the
in case of the improvement, loss or deterioration of the Mortgage Law.
thing during the pendency of the condition: Remedies in reciprocal obligations
Rules in case of loss/ deterioration/ improvement of 1)Choice of remedies
thing during pendency of suspensive condition. a)Action for specific performance with damages
Cases during the Effects b) Action for rescission of the obligation with damages
pendency of condition 2) Court may grant guilty party term of
Loss without debtor’s Obligation is performance
fault extinguished. Debtor will ART. 1192 – In case both parties have committed a
not be liable breach of the obligation, the liability of the first infractor
Loss through debtor’s Debtor shall pay for shall be equitably tempered by the courts.
fault damages. If it cannot be determined which of the parties
Deterioration without Creditor shall bear the first violated the contract, the same shall be deemed
debtor’s fault damages extinguished, and each shall bear his own damages.
Deterioration through a. Rescission of the Parties are guilty of breach
debtor’s fault obligation with damages; 1) First infractor known
b. Fulfillment of the • One party violated his obligation; subsequently, the
obligation with damages other also violated his part of the obligation.
Improvement by nature improvement shall inure • Effect: liability of first infractor equitably reduced
or by time to the benefit of the 2) First infractor cannot be determined
Creditor • Effect: contract shall be deemed extinguished and
Improvement at expense Debtor has the right to each shall bear his own damages
of debtor usufructuary with respect
to the improvement (b) Obligations with a Period (Arts. 1193-1198)
ART. 1190 – When the conditions have for their purpose ART. 1193 – Obligations for whose fulfillment a day
the extinguishment of an obligation to give, the parties certain has been fixed, shall be demandable only when
upon the fulfillment of said conditions, shall return to that day comes. Obligations with a resolutory period
each other what they have received. take effect at once but terminate upon arrival of the day
In case of the loss, deterioration or improvement of certain.
the thing, the provisions which, with respect to the A day certain is understood to be that which must
debtor, are laid down in the preceding article shall be necessarily come, although it may not be known when.
applied to the party who is bound to return. If the uncertainty consists in whether the day will come
Effects of fulfillment of resolutory condition or not, the obligation is conditional, and it shall be
1) Real Obligation regulated by the rules of the preceding Section
• the obligation is extinguished Conditional Obligations
• the parties are obliged to return to each other what obligations with a period
they have received under the obligation. Conditions or are subject consequences are
2) Personal Obligation in one way or another to subjected in one way or
• In some obligations, the courts shall determine the the fulfillment of a another to the expiration
retroactive effect of the fulfillment of the resolutory condition of said period or term
condition.
ART. 1191 – The power to rescind obligations is implied Condition Period
in reciprocal ones, in case one of the obligors should Uncertain event Certain event
not comply with what is incumbent upon him. The Causes an obligation to Fixes the time for the
injured party may choose between the fulfillment and arise or cease efficaciousness of the
the rescission of the obligation, with the payment of obligation
 Future or past event Future only
unknown to the parties
Has retroactive effects Has no retroactive effects
Suspensive condition left Suspensive period left to
to the will of the debtor the will of the debtor is
makes obligation VOID VALID.
ART. 1194 – In case of loss, deterioration or
improvement of the thing before the arrival
of the day certain, the rules in Article 1189
shall be observed.
ART. 1195 – Anything paid or delivered before the
arrival of the period, the obligor being unaware of
the period or believing that the obligation
has become due and demandable, may be
recovered, with the fruits and interests
Rules on payment before arrival of the period
1) Debtors presumed aware of the period
2) The obligor may no longer recover the thing or
money once the period has arrived but he can
recover the fruits or interests thereof.
3) No recovery in personal obligation.
ART. 1196 – Whenever in an obligation a period is
designated, it is presumed to have been
established for the benefit of both the
creditor and the debtor, unless from the
tenor of the same or other circumstances it
should appear that the period has been
established in favor of one or of the other
Benefit of the period
GENERAL RULE:
A period fixed by the parties, the period is presumed
to have been established for the benefit of both the
creditor and the debtor
EXCEPTION:
1. Benefit of the debtor alone
Debtor cannot be compelled to pay prematurely,
but he can.
2. Benefit of the creditor alone
Creditor may demand fulfillment even before the
arrival of the term but the debtor cannot require
him to accept payment before the expiration of the
stipulated period.
ART. 1197 – If the obligation does not fix a period, but
from its nature and the circumstances it can
be inferred that a period was intended, the
courts may fix the duration thereof.
The courts shall also fix the duration of the
period when it depends upon the will of
the debtor. In every case, the courts shall determine
such period as may under the circumstances
have been probably contemplated by the
parties. Once fixed by the courts, the period
cannot be changed by them.
Benefit of the period
GENERAL RULE:
The court has no power to fix a period.
EXCEPTION:
1. No period is fixed but a period was intended
No period is fixed but it can be inferred from its
nature and the circumstances that a period was
intended by the parties
2. Duration of period depends upon the will of the
debtor.
ART. 1198 – The debtor shall lose every right to make
use of the period:
(1) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or
security for the debt;
(2) When he does not furnish to the creditor the
guaranties or securities which he has promised;
(3) When by his own acts he has impaired said
guaranties or securities after their establishment, and
when through a fortuitous event they disappear, unless
he immediately gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period;
(5) When the debtor attempts to abscond.
(c) Alternative (Arts. 1199-1205) and facultative
obligations (Art. 1206)
ART. 1199 – A person alternatively bound by different
prestations shall completely perform one of them. The
creditor cannot be compelled to receive part of one and
part of the other undertaking
Kinds of obligation according to object
1. SIMPLE OBLIGATION
one where there is only one prestation
2. COMPOUND OBLIGATION
one where there are two or more prestations
a. Conjunctive obligation
one where there are several prestations and all of them
are due
b. Distributive obligation
one where one of two or more of the prestations is due.
It may be alternative or facultative.
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
prestations which are impossible, unlawful or which
could not have been the object of the obligation
Right of choice prestations
GENERAL RULE:
The right to choose the prestation belongs to
the debtor.
EXCEPTION: been lost, or the compliance of the obligation has
It may be exercised by the creditor or by a become impossible. The indemnity shall be fixed taking
third person when expressly agreed upon by as a basis the value of the last thing which
the parties. disappeared, or that of the service which last became
Right of choice of the debtor not absolute impossible. Damages other than the value of the last
1. The debtor cannot choose those prestations thing or service may also be awarded
which are: (a) impossible, (b) unlawful, or (c) Effect or loss or impossibility through the fault of the
which could not have been the object of the debtor
obligation. 1. Some of the objects
2. The debtor has no more right of choice, when - the debtor is not liable
among the prestations whereby he is alternatively 2. All of the objects
bound, only one is practicable. - the creditor shall have a right to indemnity
3. The debtor must completely perform the for damages
prestation selected. Basis of Indemnity
ART. 1201 – The choice shall produce no effect except The indemnity shall be fixed taking as basis:
from the time it has been 1. the value of the last thing which disappeared
communicated. 2. the value of the service which last became impossible
Proof and Form of notice ART. 1205 – When the choice has been expressly given
PROOF: to the creditor, the obligation shall cease to be
The burden of proving that such alternative from the day when the selection has been
communication has been made is upon him communicated to the debtor.
who made the choice Until then the responsibility of the debtor shall be
FORM: governed by the following rules:
1. Expressly – oral or written Rules in case of loss or impossibility
2. Impliedly – when the debtor already Thing lost/ Cause of Effect
performs one of the prestations. became loss/
EFFECTS OF NOTICE impossible impossibilty
1. Once the notice of the election has been One or Some Fortuitous Creditor shall choose
given to the creditor, the obligation ceases to events among the remainder
be alternative and becomes simple All Fortuitous Obligation is
2. Choice once properly made and events extinguished
communicated is irrevocable and cannot One or Some Through 1. choose among the
be renounced debtor’s fault remainder + damages
ART. 1202 – The debtor shall lose the right of choice 2. Choose the price of
when among the prestations the thing lost + damages
whereby he is alternatively bound, only one is All Through Creditor may claim the
practicable. debtor’s fault price of one of the
ART. 1203 – If through the creditor’s acts the debtor things + damages
cannot make a choice according to the terms of the ART. 1206 – When only one prestation has been agreed
obligation, the latter may rescind the upon, but the obligor may render another in
contract with damages substitution, the obligation is called facultative.
Effect when debtor cannot make a choice due to The loss or deterioration of the thing intended as a
creditor’s act substitute, through the negligence of the obligor, does
1. Debtor may rescind the contract with a not render him liable. But once the substitution has
right to ask for damages been made, the obligor is liable for the loss of the
2. Debtor may choose not to rescind the substitute on account of his delay, negligence or fraud.
contract, but to perform any of the
remaining prestations.
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
 Substitution Thing Reason Effect 6. Each creditor is entitled only to a proportionate
Lost part of the credit.
Principal Fortuitous obligation Solidary Obligation
thing event extinguished 1. There is unity of object and plurality of ties
Debtor’s debtor liable 2. Each and every one of the solidary creditors can
Before Fault for damages demand and each of the debtors must satisfy the same
Substitution Substitute Fortuitous debtor not prestation.
event/ liable 3. there is solidary liability only when:
Debtor’s a. The obligation expressly so states; or
Fault b. the law requires solidarity; or
Principal Fortuitous debtor not c. the nature of the obligation requires solidarity.
thing event/ liable Kinds of Solidarity
Debtor’s 1. According to the parties bound:
After Fault a. Passive solidarity
Substitution Substitute Fortuitous obligation any of the debtors can be made liable for
event extinguished the fulfillment of the entire obligation
Debtor’s debtor liable b. Active solidarity
Fault for damages any of the creditors can demand the
fulfillment of the entire obligation
(d) Joint and solidary Obligations (Arts. 1207-1222) c. Mixed solidarity
ART. 1207 – The concurrence of two or more creditors where each one of the debtors is liable to
or of two or more debtors in one and the same render, and each one of the creditors has a
obligation does not imply that each one of the former right to demand, entire compliance with the
has a right to demand, or that each one of the latter is obligation
bound to render, entire compliance with the 2. According to source:
prestations. There is a solidary liability only when the a. Conventional solidarity
obligation expressly so states, or when the law or the solidarity is agreed upon by the parties
nature of the obligation requires solidarity. b. Legal solidarity
ART. 1208— If from the law, or the nature or the solidarity is imposed by the law
wording of the obligations to which the preceding c. Real solidarity
article refers the contrary does not appear, the credit or solidarity is imposed by the nature of the
debt shall be presumed to be divided into as many equal obligation
shares as there are creditors or debtors, the credits or ART. 1209 – If the division is impossible, the right of the
debts being considered distinct from one another, creditors may be prejudiced only by their collective acts,
subject to the Rules of Court governing the multiplicity and the debt can be enforced only by proceeding
of suits. against all the debtors. If one of the latter should be
Joint Obligation Solidary Obligation insolvent, the others shall not be liable for his share.
the whole obligation is to each one of the debtors is ART. 1210 – The indivisibility of an obligation does not
be paid or fulfilled bound to render, and/or necessarily give rise to solidarity. Nor does solidarity of
proportionately by the each one of the creditors itself imply indivisibility.
different debtors and/or has a right to demand Solidarity may exist although the creditors and the
is to be demanded entire compliance with the debtors may not be bound in the same manner and by
proportionately by the prestation. the same periods and conditions.
different creditors ART. 1212 – Each one of the solidary creditors may do
whatever may be useful to the others, but not anything
Joint Obligation
which may be prejudicial to the latter.
1. Collective obligation is presumed to be joint
ART. 1213 – A solidary creditor cannot assign his rights
2. There are as many debts as there are debtors;
3. There are as many credits as there are creditors; without the consent of the others.
4. The debts and/or credits are considered distinct ART. 1214— The debtor may pay any one of the solidary
creditors; but if any demand, judicial or extrajudicial,
and separate from one another;
has been made by one of them, payment should be
5. Each debtor is liable only for a proportionate part
made to him.
of the debt; and
ART. 1215 – Novation, compensation, confusion or
remission of the debt, made by any of the solidary
creditors or with any of the solidary debtors, shall
extinguish the obligation, without prejudice to the
provisions of Article 1219.
The creditor who may have executed any of these
acts, as well as he who collects the debt, shall be liable
to the others for the share in the obligation
corresponding to them.
ART. 1216 – The creditor may proceed against any one
of the solidary debtors or some or all of them
simultaneously.
The demand made against one of them shall not be
an obstacle to those which may subsequently be
directed against the others, so long as the debt has not
been fully collected.
ART. 1217 – Payment made by one of the solidary
debtors extinguishes the obligation. If two or more
solidary debtors offer to pay, the creditor may choose
which offer to accept.
He who made the payment may claim from his co-
debtors only the share which corresponds to each, with
the interest for the payment already made.
If the payment is made before the debt is due, no
interest for the intervening period may be demanded.
When one of the solidary debtors cannot, because of
his insolvency, reimburse his share to the debtor paying
the obligation, such share shall be borne by all his co-
debtors, in proportion to the debt of each.
Effects of payment by solidary debtors
1. Payment made by one of the solidary debtors
extinguishes the obligation.
2. Payment made by the co-debtor creates a joint
obligation of reimbursement on the part of the others.
3. insolvency of any of the solidary debtors, the others
assume the share of the insolvent one pro rata.
4. receiving creditor is jointly liable to the others for
their corresponding shares.
ART. 1218 – Payment by a solidary debtor shall not
entitle him to reimbursement from his co-debtors if
such payment is made after the obligation has
prescribed or become illegal.
ART. 1219 – The remission made by the creditor of the
share which affects one of the solidary debtors does not
release the latter from his responsibility towards the
co-debtors, in case the debt had been totally paid by
anyone of them before the remission was effected
ART. 1220 – The remission of the whole obligation,
obtained by one of the solidary debtors, does not
entitle him to reimbursement from his co- debtors.
ART. 1221 – If the thing has been lost or if the prestation
has become impossible without the fault of the
solidary debtors, the obligation shall be extinguished.
If there was fault on the part of any one of them, all
shall be responsible to the creditor, for the price and the
payment of damages and interest, without prejudice to
their action against the guilty or negligent debtor.
If through a fortuitous event, the thing is lost or the
performance has become impossible after one of the
solidary debtors has incurred in delay through the
judicial or extra-judicial demand upon him by the
creditor, the provisions of the preceding paragraph shall
apply.
Effect of loss or impossibility of prestation
Cause or Loss Effect
1. fortuitous event and before obligation
delay extinguished
2. fortuitous event but after value of the object
delay by anyone of the debtors plus damages
3. fault of anyone of the debtors value of the object
plus damages
ART. 1222 – A solidary debtor may, in actions filed by
the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of those
which are personal to him, or pertain to his own share.
With respect to those which personally belong to the
others, he may avail himself thereof only as regards that
part of the debt for which the latter are responsible
(e) Divisible and Indivisible obligation (Arts. 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.
Divisible obligation Indivisible obligation
the whole obligation is to one the object of which,
one the object of which, in its delivery or
in its delivery or performance, is not
performance, is capable capable of partial
of partial fulfillment. fulfillment.
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.
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.

(f) Obligations with a penal cause (Arts. 1226-1230)

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. The penalty may be
enforced only when it is demandable in accordance with
the provisions of this Code.
• 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.
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 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 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.