HANDOUT #15

LAW ON OBLIGATIONS AND CONTRACTS

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

What is an alternative obligation?

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

EXAMPLE:

D borrowed from C P10,000. It was agreed that D could comply with his obligation by
giving C P10,000, or a color television set, or by painting the house of C.

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

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

As a general rule, the right to choose the prestation belongs to the debtor.

By way of exception, it may be exercised by the creditor but only when expressly granted
to him (Art. 1205.), or by a third person when the right is given to him by common
agreement.

Note:

Remember that the right to choose the prestation shall belong to the debtor. The creditor
may only exercise the said right when such is EXPRESSLY given to him.

Right of choice of debtor not absolute.

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

-The debtor cannot choose those prestations which are: (a) impossible, (b) unlawful, or
(c) which could not have been the object of the obligation. These prestations are void.

Their presence do not invalidate the obligation if it includes other undertakings otherwise
free from such defects.

-The debtor has no more right of choice, when among the prestations whereby he is
alternatively bound, only one is practicable. (Art. 1202.) In this case, there is not only a
limitation but a loss of the right of choice belonging to the debtor.

Example:

S obliged himself to deliver to B a kilo of a dangerous drug, a parcel of land, or a 2-carat

diamond ring, or to kill C.
S can only choose only the parcel of land or the 2-carat diamond ring.

*Take note that the obligation is still valid (meaning S the debtor is still obliged to B),
however, the unlawful or void prestations are excluded as valid choices.

Example:

S will deliver to B his horse, or his carabao, or his refrigerator. The horse and the carabao
were lost without the fault of S. S has no more choice but to deliver the refrigerator which
is the only one capable of delivery.

*Here, the obligation is converted to a simple one as if there were no other prestations
available.

ART. 1201. The choice shall produce no effect except from the time it has been
communicated. (1133)

Communication of notice that choice has been made.

(1) Effect of notice. — Until the choice is made and communicated, the obligation remains
alternative.

(a) Once the notice of the election has been given to the creditor, the obligation ceases to
be alternative and becomes simple.

(b) Such choice once properly made and communicated is irrevocable and cannot be
therefore be changed by either party without the consent of the other. The concurrence
of the creditor to the choice made by the debtor is not required.

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

When debtor may rescind contract.

Rescission creates the obligation to return the things which were the object of the
contract together with their fruits, and the price with its interest.

EXAMPLE:

D borrowed from C P20,000.00. It was agreed that instead of P20,000.00, D could deliver
item one, or item two, or item three.

If through the fault of C, item one is destroyed, D can rescind the contract if he wants. In
case of rescission, the amount of P20,000.00 must be returned by D with interest. C, in
turn, must pay D the value of item one plus damages.

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

ART. 1204. The creditor shall have a right to indemnity for damages when, through
the fault of the debtor, all the things which are alternatively the object of the
obligation have been lost, or the compliance of the obligation has become
impossible.
The indemnity shall be fixed taking as a basis the value of the last thing which
disappeared, or that of the service which last became impossible.

Damages other than the value of the last thing or service may also be awarded.

Effect of loss or becoming impossible of objects of obligation.

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

(1) Some of the objects. — If some of the objects of the obligation have been lost or have
become impossible even through the fault of the debtor, the latter is not liable since he
has the right of choice and the obligation can still be performed. This is an exception to
the general rule established in Article 1170 regarding liability for damages arising from
negligence.

(2) All of the objects. — If all of them have been lost or have become impossible through
the debtor’s fault, the creditor shall have a right to indemnity for damages since the
obligation can no longer be complied with. Of course, if the cause of the loss is a
fortuitous event, the obligation is extinguished.

The phrase “or the compliance of the obligation has become impossible” refers to
obligations “to do.”

EXAMPLE:

S agreed to deliver item one, or item two, or item three.

If item one is lost through the fault of S, he can still select either item two or item three.
The loss of item one and two with or without the fault of S will reduce the obligation to
a simple one.

If all the items are lost through his fault, liability will attach; if through a fortuitous
event, the obligation will be extinguished.

Basis of indemnity.

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

Other damages may also be awarded.

EXAMPLE:

In the above example, if items one and two are lost, S will be bound to deliver item three.

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

If item three is lost without the fault of S, his obligation is extinguished and he shall not
be liable for damages although the loss of items one and two was due to his fault. The
reason is that after the loss of items one and two, the obligation is converted into a simple
one to deliver item three. (Art. 1202.)
S cannot be held responsible for the loss of items one and two through his fault because
having the right of choice, he was not bound to deliver either. The rule is just since he
could have been liable for damages if item three instead was lost through his fault and
items one and two, through a fortuitous event.

Source:

The Law on Obligations and Contracts, De Leon

-LGU