OBLICON PRELIMS = It is the act or conduct required from the

passive subject to fulfil the obligation.

Obligations and Contracts
Concept of Obligation
◈ Article 1156 (NCC) provides:
❑ An obligation is a juridical
necessity to give, to do or not to
do.
◈ Obligation as a whole is a juridical
relation between two or more parties
(creditor and debtor), wherein, creditor
may demand the debtor a certain
prestation or conduct.
Kinds of Object/Prestation:
⬩ To Give - Real Obligation
⬩ To Do - Positive Personal Obligation
Not to Do - Negative Personal Obligation
Requisites of a Valid Prestation
a. Physically and juridically possible
b. Determinate or at least determinable
according to pre-established elements or
criteria

Elements of an Obligation c. Possible equivalent in money

1. Active Subject - Creditor ❖ Pecuniary interest need not be for one

of the parties, it maybe for the benefit of
2. Passive Subject - Debtor 3rd person/s distinct from the parties to
3. Object - Subject Matter the contract

4. Juridical Tie - Efficient Cause ❖ Prestation need not be of economic

character to have pecuniary value, if it
Active Subject does not have value the law attributes
to it economic value e.g., moral and
= Also referred to as Creditor or Obligee
nominal damages
= In an obligatory relationship, is the party who
Juridical Tie
has the right to demand compliance of the
obligation. = Also referred to as “Legal tie or Vinculum
Juris”
RIGHT
= Is the reason that binds the parties of the
= Is a privilege granted to a party, guaranteed
obligation, which constitutes the concurrence
under the constitution and statutes,
of the essential elements of the obligation.
enforceable by law against another.
❑ Efficient Cause as provided by the
Passive Subject
source of obligation
= Also referred to as Debtor or Obligor
❑ Object or prestation of the obligatory
= In an obligatory relationship, is the party who relationship
has the obligation to perform a conduct (to
❑ Subject-persons, (Active and Passive
give, to do, or not to do), as demanded.
Subject)

= A relationship between the elements is

established:

Object ❑ By-law

= Also referred to as a prestation or the subject ❑ Bilateral Acts

matter of the obligation.
❑ Unilateral Acts
Civil Obligation v Natural Obligation
Unlike civil obligations, a Natural Obligation has
no binding force of law and hence does not
give a right of action to enforce its
performance. It is based however, on equity
and natural law, and should be voluntary
Source of Obligation
Article 1157 (NCC), provides:
- Obligations arise from:
❑ (1) Law;
❑ (2) Contracts;
❑ (3) Quasi-contracts;
❑ (4) Acts or omissions punished by law;
and
❑ (5) Quasi-delicts.
Law
= A rule promulgated by a legitimate authority
with the purpose of common observance and
benefit.
= Obligations derived from law are not
presumed, only those expressly determined in
the New Civil Code or other special laws, are
demandable.
Examples:
❑ National Internal Revenue Code
❑ Family Code
❑ Labor Code
❑ Traffic Laws
Contract
= Is a meeting of the minds, between two
persons whereby one binds himself, with
respect to the other, to give something or to
render some service.
= Contracts have the force of law between
the contracting parties and is expected to be
complied in good faith. Therefore, the parties
are bound to comply with their obligations as
per the contract, as it expresses their
agreement.
Quasi-contract
= Certain lawful, voluntary, and unilateral acts
give rise to the juridical relation of quasi-
contract to the end that no one shall be
unjustly enriched or benefited at the expense
of another.
Kinds of Quasi-contract:
❑ Negotiorum Gestio
❑ Solutio Indebiti
❑ Other Quasi-Contracts
Acts or omissions punished by law
= Also referred to as delict
= Civil obligations arising from criminal offenses
shall be governed by the penal laws, subject
to the provisions of article 2177, and of the
pertinent provisions of Chapter 2, Preliminary
Title, on Human Relations, and of Title XVIII of
this Book, regulating damages.
= Accordingly, the Revised Penal Code states
under Article 100 “Every person criminally liable
for a felony is also civilly liable”
Exceptions: (Felony without civil liability)
❑ Criminal contempt
❑ Gambling
❑ Traffic Violations
Quasi-delicts
Article 2176 (NCC), provides:
Whoever by act or omission causes damage to
another, there being fault or negligence, is
obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing
contractual relation between the parties, is
called a quasi-delict.
Requisites of Quasi-delict
⬩ Damage suffered by plaintiff
⬩ Fault or negligence of defendant
⬩ Connection of cause and effect
between fault/ negligence and the
damage suffered
Kinds of Obligation as to Prestation = Also referred to as the “obligation not to do”

To Give Real Obligation = In this type of obligation, the passive subject

To Do Positive Personal Obligation is expected to fulfil the obligation by refraining
Not To Do Negative Personal Obligation from performing an action or work as required
by the active subject.
Real Obligation = The fulfilment of a positive personal
obligation, requires the debtor not to do
= Also referred to as the “obligation to give”
something in favor of the creditor.
= In this type of obligation, the passive subject
is expected to fulfil the obligation by delivering
a thing, movable or immovable, to the active REAL OBLIGATION: Obligation to Give
subject.
Real Obligation: Specific and Generic Thing
= The fulfilment of a real obligation, creates a
real right or for the use of the recipient or for SPECIFIC THING GENERIC THING
custody or returning to the owner, of the thing. WHEN THE OBJECT IS when the object is
PARTICULARLY designated merely
Kinds of Real Obligation DESIGNATED OR by its class or genus
1. Generic (Indeterminate) PHYSICALLY without any
- To deliver a thing that is generic, if it is SEGREGATED FROM particular
ALL OTHERS OF THE designation or
simply stated as a class of thing with no
SAME CLASS. IN HERE, physical segregation
specific designation, thus, cannot be
THE OBJECT IS
identified and separated from other from all others of the
CONCRETE,
things of same class. same class. In here,
PARTICULARIZED
the object is one
Ex: To deliver a P100.00 bill. THING, INDICATED BY
ITS OWN whose determination
2. Specific (Determinate) INDIVIDUALITY. is confined to that of
- To deliver a thing that is specific, if it can its nature – to the
be physically identified and separated genus to which it
from other things of same class. pertains.

Ex: To deliver a P100.00 bill with serial number

MB106973

Note: The P100.00 bill became specific DUTIES OF DEBTOR IN AN OBLIGATION TO GIVE
because of a particular designation – in this A DETERMINATE THING
case through its serial number. 1. To preserve or take care of the thing due
Positive Personal Obligation with the diligence of a good father of a family

= Also referred to as the “obligation to do” Also referred to as “Diligence of a good

= In this type of obligation, the passive subject
is expected to fulfil the obligation by
performing a work or service for the active
subject.
= The fulfilment of a positive personal
obligation, requires the debtor to do something
for the creditor.
father of a family”. The obligor is
required by law to practice ordinary
diligence or the diligence of a good
father of a family to fulfil its specific real
obligation.
Exception to the standard diligence of a
good father of a family is the practice of
a higher degree of diligence.

Negative Personal Obligation

2. To deliver the fruits of the thing: Right to the
fruits of the thing from the time the obligation
to deliver it arises.
o GENERAL RULE: From the time of the
perfection of the contract (i.e., meeting
of the minds between the parties)
for its better use, embellishment
or completion.
4. To deliver the thing itself 5. To pay damages
in case of breach of the obligation by reason
of delay, fraud, negligence or contravention of
the tenor of the obligation.

EXCEPTIONS: RIGHTS OF CREDITOR IN DETERMINATE

OBLIGATIONS
a. when the parties made a stipulation as
regards the right of the creditor to the
fruits of the thing
b. when the obligation is subject to a
suspensive condition or period; arises
upon fulfillment of the condition or
arrival of the period
Kinds of Delivery
o Actual Delivery
= The obligor transfers the possession of the
thing immediately to the obligee.
1. To compel specific performance. This
right is expressly recognized in the first
paragraph of Art. 1165.
2. To recover damages for breach of the
obligation. Besides the right to compel
specific performance, the creditor has
also the right to recover damages from
the debtor in case of breach of the
obligation through delay, fraud,
negligence or contravention of the
tenor thereof.

Ex: The seller of isopropyl alcohol to the buyer. 3. To compel the delivery of accessories
and accessions.
o Constructive Delivery
Personal Right v Real Right
= The obligor transfers the control or title of the
thing to the obligee by operation of law. PERSONAL FIGHT REAL FIGHT
= is “a right pertaining to = is a “right
Ex: The seller of a parcel of land will transfer a person to demand from pertaining to a
ownership of said land to the buyer by means another the fulfillment of person over a
of a notarized deed of sale. a Prestation to give, to specific thing,
do, or not to do.” without a passive
Kinds of Fruits
subject individually
Natural fruits are the spontaneous = It is a jus ad rem, a right determined against
products of the soil, and the young and enforceable only against whom such right may
other products of animals. a definite person or be personally
group of persons, such as enforced.
Industrial fruits are those produced by
the right of a creditor to
lands of any kind through cultivation or
demand from the debtor = It is a jus in re, a
labor.
the delivery of the object right enforceable
Civil fruits are the rents of buildings, the of the obligation after the against the whole
price of leases of lands and other perfection of the world, such as the
property and the amount of perpetual contract. right of ownership,
or life annuities or other similar income. possession, usufruct,
or easement.
3. To deliver its accessions and accessories

o Accessions – additions to or DUTIES OF DEBTOR IN AN OBLIGATION TO GIVE

improvements upon a thing. A GENERIC THING
o Accessories – things joined to, or 1. To deliver the thing which is neither of
included with the principal thing superior nor of inferior quality
 2. To pay damages in case of breach of ❖ Demand that it shall be undone
the obligation by reason of delay, at the expense of the debtor
fraud, negligence or contravention of
❖ Ask for damages under Article
the tenor of the obligation.
1170 (NCC)
RIGHTS OF CREDITOR IN GENERIC OBLIGATIONS
Damages
1. To ask for performance of the
= Refer to the harm done and the sum of
obligation.
money that may be recovered, whereas, injury
2. To ask that the obligation be complied refers to the wrongful, unlawful or tortuous act.
with at the expense of the debtor if the It is the legal wrong to be redressed.
debtor refuses or is unable to comply
Kinds of Damage
with his obligation.
Temperate or They are more than
3. To recover damages for the breach of
Moderate Damages nominal but less than
obligation.
compensatory
damages, but may
be recovered if the
court finds that some
pecuniary loss has
POSITIVE PERSONAL OBLIGATION: been suffered but its
Obligation To Do amount cannot, from
the nature of the
Remedies available to creditor case, be proved with
certainty. (Art 2224)
If debtor obliged to do something fails Liquidated Damages Those agreed upon
to do it or if he does it in contravention by the parties to a
of the tenor of the obligation contract, to be paid
in case of breach.
❖ If the debtor obliged to do
(Art 2226)
something fails to do it, the same Exemplary or These are imposed
shall be executed at his cost Corrective Damages by way of example
❖ Ask for damages under Article or correction for the
public good, in
1170 (NCC)
addition to the
If debtor has to do something but it was moral, temperate,
poorly done: liquidated or
compensatory
❖ May be decreed that what was damages. (Art 2229)
poorly done be undone Actual or These refer to the
Compensatory pecuniary loss, (such
❖ Ask for damages under Article Damages as loss in business or
1170 (NCC) profession) that may
be recovered. It
Includes the value of
NEGATIVE PERSONAL OBLOGATION: the loss suffered and
profits not realized,
Obligation Not To Do (Art 2199)
Moral Damages They include physical
Remedies available to creditor suffering, mental
If debtor is obliged in not to doing, and anguish, fright,
the debtor does what has been serious anxiety,
besmirched
forbidden:
reputation, wounded
 feelings, moral shock,
social humiliation,
and similar injury. (Art
2217)
Nominal Damages They refer to
damages to
vindicate a right.
(Art. 2221)
BREACH OF OBLIGATIONS
1. Fraud
= Fraud is the deliberate or intentional
evasion by the debtor of the normal
compliance of his obligation.
Types:
a. Causal Fraud (Dolo Causante)
b. Incidental Fraud (Dolo Incidente)
c. Fraud in Performance of Obligation
2. Negligence
= It is the omission of the diligence which is
required by the nature of the obligation
and corresponds with the circumstances of
the person, of the time, and of the place.
(Art. 1173)
= It is the failure to observe for the
protection of the interest of another
person, that degree of care, precaution
and vigilance which the circumstances
justly demand, whereby such other person
suffers injury.
Kinds of Negligence:
⬩ Culpa Contractual (contractual
negligence)
⬩ Culpa Aquiliana (civil negligence or
tort or quasi-delict or culpa extra-
contractual)
⬩ Culpa criminal (criminal negligence)
EFFECTS OF CONTRIBUTORY NEGLIGENCE OF
THE CREDITOR
GENERAL RULE: Reduces or mitigates the
damages which he can recover
EXCEPTION: If the negligent act or omission
of the creditor is the proximate cause of
the event which led to the damage or
injury complained of, he cannot recover.
3. Delay
= Delay or default or mora is the non-
fulfillment of an obligation with respect to
time.
Kinds:
a. Mora solvendi
b. Mora accipiendi
c. Compensatio morae
DEBTOR IN DELAY: REQUISITES
◈ GENERAL RULE:
• Debtor does not perform his
obligation on date due
• The creditor demands
performance of obligation
• Debtor does not comply with
creditor’s demands
◈ EXCEPTION: (Delay exists even
without demand)
• When the law so provides
• When the obligation expressly
declares so
• When time is of the essence in
the contract
• When demand would be
useless
• In reciprocal obligations,
fulfilment of one obligation
requires the other obligation to
be fulfilled, notwithstanding
the absence of demand
 EFFECTS OF DELAY
◈ Debtor shall be liable for the
payment of damages
◈ If the obligation consists in the
delivery of a specific thing, he shall
be liable until delivery, despite
occurrence of a fortuitous event.
Fortuitous Event
= An event which could not be foreseen,
or which though foreseen, was inevitable.
ELEMENTS:
1. The cause of the breach of the
obligation must be independent of
the will of the debtor
2. The event must be either
unforeseeable or unavoidable
3. The event must be such as to render
it impossible for the debtor to fulfill his
obligation in a normal manner
4. The debtor must be free from any
participation in, or aggravation of
injury to the creditor
RULE ON FORTUITOUS EVENT
GENERAL RULE: No person shall be liable for
fortuitous event
EXCEPTIONS:
1. When the law expressly provides so (bad
faith, subject matter is generic, debtor is in
delay)
2. When stipulated in contract of such
liability in a fortuitous event
3. When nature of obligation requires
assumption of risk
4. When the obligor is in default or has
promised to deliver the same thing to two
or more persons who do not have the
same interest
USURY
Art. 1175 (NCC), provides:
= Usurious transactions shall be governed by
special laws
INTEREST – the income produced by money
in relation to its amount and to the time that
it cannot be utilized by its owner. It can
either be moratory or compensatory.
⬩ MORATORY – paid in
contractual obligations to pay
a sum of money, either as price
for the use of the
⬩ money OR as stipulated
advanced determination of
the damages due to the delay
in the fulfillment of the
obligation.
⬩ COMPENSATORY – interests on
obligations which have an
extra-contractual or delictual
origin
Presumptions in Usurious Transactions
Presumption No. 1:
The receipt of the principal by the creditor
without reservation with respect to the
interest, shall give rise to the presumption
that said interest has been paid
Presumption No. 2:
The receipt of a later installment of a debt
without reservation as to prior installments,
shall likewise raise the presumption that
such installments have been paid.
REMEDIES OF CREDITOR TO PROTECT CREDIT
1. to EXHAUST the property in
possession of the debtor;
2. to be SUBROGATED to all of the rights
and actions of the debtor save those
which are inherent in his person
 3. to IMPUGN all of the acts which the ◈ Suspensive v Resolutory
debtor may have done to defraud ◈ Potestative v Casual v Mixed
him.
◈ Possible v Impossible
TRANSMISSIBILITY OF RIGHTS
◈ Positive v Negative
GENERAL RULE: Rights of obligations or
◈ Divisible v Indivisble
rights acquired by virtue of obligation are
transmissible. Suspensive v Resolutory

EXCEPTION: Suspensive Resolutory

– happening of – happening of
They are a personal right; condition gives rise to condition
There is a stipulation between obligation extinguishes
parties; obligation
Not transmissible by operation of
law.
Effects of Suspensive Condition
Primary Classification of Obligations
◈ Upon fulfillment:
1. Pure obligation
a. Effectivity retroacts to the day of the
2. Conditional obligation constitution of the obligation
3. Obligation with a period
4. Alternative obligation b. No retroactivity with reference to fruits or
5. Facultative obligation interest and prescription
6. Joint obligation ◈ Rights before fulfillment
7. Solidary obligation
a. Creditor may preserve rights through
8. Divisible obligation
appropriate actions
9. Indivisible obligation
10. Obligation with a penal cause b. Debtor – recovery of payment by mistake or
even w/o mistake
Pure Obligation v Conditional Obligation
DEBTOR VOLUNTARILY PREVENTS FULFILLMENT OF
PURE OBLIGATION CONDITIONAL THE CONDITION
OBLOGATION
obligation without a obligation whose Condition is deemed fulfilled, if debtor
term, in other words, demandability and voluntarily prevents its fulfilment, hence,
effectivity or extinguishment is obligation becomes demandable.
extinguishment does uncertain and is
not depend upon based on a Requires both intent on part of debtor and
the fulfillment or non- condition. actually preventing fulfilment of obligation
fulfillment of a
RULES ON LOSS, DETERIORATION, AND
condition or upon Condition
IMPROVEMENTS DURING PENDENCY OF A
the expiration of a - Future and
term or period uncertain SUSPENSIVE CONDITION
event or a ◈ Loss of thing – a thing is lost when it:
past event
unknown to • Perishes;
the parties
• Goes out of commerce;

• Disappears in a way that its existence is

Classification of Condition unknown or cannot be recovered
 Effect of loss of thing. ➢ If resolutory - valid
➢ If suspensive - void
Without debtor’s fault Extinguished
Causal
With debtor’s fault Debtor to pay for
damages = Obligation that depends upon chance/will
of a 3rd person

Mixed
◈ Deterioration of the thing – impairment of = Obligation that depends jointly with creditor
thing and debtor
Without debtor’s fault Possible v Impossible
➢ Impairment is borne by creditor
With debtor’s fault POSSIBLE IMPOSSIBLE
➢ May choose either, rescission or fulfilment = Capable of = Not capable of
with payment for damages fulfilment in its nature fulfilment in its nature
and by law or due to law.
Kinds of Impossible
◈ Improvement of the thing
condition:
o By nature, or time 1. Physical
Impossible
▪ Improvement shall inure to the benefit conditions
of the creditor 2. Legal
Impossible
o At expense of debtor conditions
▪ Debtor will have rights granted to a
usufruct Divisible v Indivisble

DIVISIBLE INDIVISIBLE
▪ Remove improvement,
without damaging principal = condition that is = condition that is
capable of partial not capable of
RULES IN CASE OF FULFILLMENT OF RESOLUTORY performance partial performance,
CONDITION by its nature or by
law or by
a. Upon fulfilment of resolutory condition, agreement.
obligation is extinguished

b. Parties shall return to each other what

they have received Positive v Negative
c. In case of loss, deterioration, or POSITIVE NEGATIVE
improvement of the thing, the provisions = Condition that = Condition that
in Art. 1189 (NCC), which pertains to the some event happen some event will not
debtor shall be applied to the party at a determinate happen at a
who is bound to return time. The obligation is determinate time.
extinguished. The obligation
Potestative, Causal, and Mixed becomes effective.
Potestative

= Obligation that depends upon the will of a

party to the obligations
⬩ If condition depends on creditor – valid
⬩ If condition depends on debtor:
Impossible and Illegal Condition
GENERAL RULE: They shall annul the obligation
which depends upon them
EXCEPTIONS:

a. pre-existing obligation

b. if obligation is divisible

c. in simple or remuneratory donations

d. testamentary dispositions

e. conditions not to do an impossible thing

Reciprocal Obligation

= A reciprocal obligation is one that arises from

the same cause and in which each party is a
debtor and a creditor of the other, such that
the obligation of one is dependent upon the
obligation of the other.

= This type of obligation is expected to be

performed simultaneously so that the
performance of one is condition upon
simultaneous fulfilment of the other.

REMEDIES OF INJURED PARTY IN RECIPROCAL

OBLIGATION

◈ Rescission with damages

Requisites:

1. One of the creditors failed to comply OBLIGATIONS WITH A PERIOD

with what is incumbent upon him

2. -Obligor who performed chose ◈ WITH A PERIOD – An obligation which

rescission over fulfilment or depends on a future and certain event
performance is impossible
◈ KINDS:
3. -The breach is substantial so as to
defeat the object of the parties in ⬩ 1. Resolutory – demandable at
making the agreement. once but terminates upon arrival
of the day certain
Effects:
⬩ Day certain – that which
1. Extinguishes obligatory relation as if it
must necessarily come,
has never been created
although it may not be
2. Mutual restitution
known when

⬩ 2. Suspensive – obligation
◈ Fulfilment of obligation with damages becomes demandable on the
day stipulated

“PAYABLE WHEN ABLE” as a period

◈ When stipulation says “Payable when

able” – it is with a period,
 AVAILABLE REMEDIES:
◈ 1. Agreement among parties
◈ 2. Court shall fix period of payment
when parties unable to agree
⬩ 1. If the obligation does not fix a
period, but from its nature and
circumstances it can be inferred
that a period was intended by
the parties
⬩ 2. If the duration of the period
depends upon the will of the
debtor
⬩ 3. In case of reciprocal
obligations, when there is a just
cause for fixing a period
⬩ 4. If the debtor binds
himself when his means
permit him to do so
PERIOD FOR WHOSE BENEFIT
◈ GENERAL RULE: When a period is
designated for the performance or
fulfillment of an obligation, it is
presumed to benefit both creditor and
debtor. UNLESS, there is stipulation that it
is only for benefit of one of the parties.
⬩ If for the Creditor
⬩ Creditor may
demand fulfilment
at any time but
debtor cannot
compel him for
acceptance prior
to expiration of the
period
If for the Debtor
Debtor may oppose any premature demand
of the creditor but may perform his obligation
in advance, effectively renouncing benefit of
the fixed period.
WHEN DEBTOR LOSES RIGHT TO 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.
Obligation as to number of prestations
Simple - Obligation that has only one prestation
Compound - Obligation that has several
prestations
Kinds of compound obligation:
Conjunctive- all objects are demandable at
the same time
Distributive- only one object of the obligation is
demandable, may either be:
• Alternative obligation -
Several objects are due but performance of
one extinguishes the obligation
• Facultative obligation -
Only one object is due but the debtor may
substitute another object
RIGHT TO CHOOSE PRESTATION
◈ The right of choice belongs to the
debtor, unless expressly, stipulated that
the choice belongs to the creditor.
◈ Limitations on debtor’s right to choose:
⬩ Debtor must completely perform
prestation chosen. Debtor
cannot compel creditor to
receive part of one and part of
another.
 ⬩ Cannot choose prestation that is • If lost due to debtor’s fault, debtor shall
impossible, illegal, or could not pay for damages
have been an object of the
Substitute thing
obligation
• No additional obligation, regardless if
ALTERNATIVE OBLIGATION TRANSFORMS TO
fortuitous or debtor’s fault
SIMPLE OBLIGATION
FACULTATIVE OBLIGATION: RULES IN CASE OF
When debtor communicates his choice to
LOSS OF PRINCIPAL AND SUBSTITUTE
creditor
◈ AFTER SUBSTITUTION
When among the prestations whereby, the
debtor is alternatively bound, only one is Principal thing
practicable
No additional obligation, regardless if fortuitous
When the choice has been expressly given to or debtor’s fault
the creditor, the obligation shall cease to be
alternative from the day when the selection Substitute thing
has been communicated to the debtor. If lost due to fortuitous event, obligation is
extinguished

RULES IN CASE OF LOSS OF THINGS OR If lost due to debtor’s fault, debtor shall pay for
IMPOSSIBILITY WHICH ARE ALTERNATIVELY damages
OBJECT OF THE OBLIGATION

(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 all are lost due to fortuitous event, the

obligation is extinguished

(3) 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;

(4) 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

FACULTATIVE OBLIGATION: RULES IN CASE OF

LOSS OF PRINCIPAL AND SUBSTITUTE

BEFORE SUBSTITUTION

Principal thing

• If lost due to fortuitous event, obligation

is extinguished