Buslaw 1

De La Salle University
Comlaw Department
Obligations and
Contracts
Book IV, New Civil Code
Title 1, Chapter 3[S3]
Alternative Obligations
SECTION 3. – Alternative Obligations
This section refers to multiple prestations in an obligation

ARTICLE 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.

Alternative obligation is one wherein various prestation or objects are due

but the performance of one of them is sufficient as determined by the choice
which, as a general rule belongs to the debtor.
In Alternative obligations, it is important to remember that on due date, if one
of the prestation/object is fulfilled, the entire obligation is extinguished.
SECTION 3. – Alternative Obligations
ARTICLE 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 chose those prestations which are
impossible, unlawful or which could not have been the object of the obligation.

ARTICLE 1201. The choice shall produce no effect except from the time it has
been communicated.

ARTICLE 1202. The debtor shall lose the right to choice when among the
prestation whereby he is alternatively bound, only one is practicable. (1134)

ARTICLE 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.
“The above articles all deal with choices of prestations”
SECTION 3. – Alternative Obligations
Example:

A promises to deliver to X

Car

Jeep

Motorbike
SECTION 3. – Alternative Obligations
ARTICLE 1204. The creditor shall have a right to indemnity for damages
when, through the fault of the debtor, all the things which 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 has become impossible.

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

This article deal with the instance where the prestations have been lost due to the fault
of the debtor before the obligation has been completed.
SECTION 3. – Alternative Obligations
ARTICLE 1205. When the choice has been expressly given to the creditor, the
obligation, shall cease to be alternative 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 chose from among the remainder, or that which
remains if only one subsist;
(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 if 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 the prestations should become impossible.
SECTION 3. – Alternative Obligations
ARTICLE 1206. When only one prestation has been agreed upon, but he
obligor may render another in substitution, the obligation is called
facultative.

The lost or deterioration of the thing intended as a substitute, through the

negligence of the obligor, does not render him liable. But once the
substitution has been made, the obligor is liable for the loss of the substitute
on account of his delay, negligence or fraud.

This Article deals with Facultative Obligations where there is one prestation but
the debtor can replace the object with another.

So long as the substitute has not yet been communicated, no matter what
happens to it, the creditor has no claim over the same.
SECTION 3. – Alternative Obligations
Example:

A promises to deliver to X

Car

Jeep

Motorbike
Obligations and
Contracts
Book IV, New Civil Code
Title 1, Chapter 3[S4]
Joint and Solidary Obligations
SECTION 4. – Joint and Solidary Obligations
Joint and Solidary Obligations refer to multiple subject
ARTICLE 1207. The concurrence of two or more creditors or two or more
debtors in one of the same obligation it does not imply that each one of the
former has the right to demand, or each one of the latter is bound to render,
entire compliance with the prestation. There is a solidarity liability only
when the obligation expressly so states, or when the law or the nature of the
obligation requires solidarity.

ART. 1208. If from the law, or the nature or the wording of the obligations to
which the preceding article 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 debt being considered distinct from one
another, subject to the Rules of Court governing the multiplicity of suits.
SECTION 4. – Joint and Solidary Obligations
While these Article refers to Joint Obligations, it makes reference to Solidary
Obligations as well. Thus it is necessary to start discussing the basic concepts
of Joint and Solidary Obligations and to determine the difference between the
two in order to avoid confusion in later provisions.

The best way to describe the concepts would be to have a practical example of
the situations.

Case:
Assuming that the obligation consists of a debt that is owed by Obligor(s) to the
Obligee(s) in the amount of Php9,000.

The distinctions would be as follows:

SECTION 4. – Joint and Solidary Obligations
In Joint Obligations, one of three instances will occur:
1 2 3
Debtor Creditor Debtor Creditor Debtor Creditor

A 1 A 1

B 2 B 2 B 2

C 3 C 3

A owes 2 Php3,000 B owes 1 Php3,000 A owes 1,2,3 Php1,000 each

B owes 2 Php3,000 B owes 2 Php3,000 B owes 1,2,3 Php1,000 each
C owes 2 Php3,000 B owes 3 Php3,000 C owes 1,2,3 Php1,000 each
SECTION 4. – Joint and Solidary Obligations
In Solidary Obligations, one of three instances will occur:
1 2 3
Debtor Creditor Debtor Creditor Debtor Creditor

A 1 A 1

B 2 B 2 B 2

C 3 C 3

A, B and C owes 2 Php9,000 B owes 1, 2 or 3 Php9,000. A, B and C owes 1, 2 and 3 the

Anyone of A, B and C can Payment can be made to sum of Php9,000.
be made liable for Php9,000 any one of them by B

Words in an obligation that indicate solidary obligations includes terms like jointly and
severally, solidarily, or jointly and solidarily.
SECTION 4. – Joint and Solidary Obligations
ARTICLE 1209. If the division is impossible, the right of the creditors may
be prejudiced only by their collective acts, and the debt can be enforced only
by proceeding against all the debtors. If one of the latter should be insolvent,
the others shall not be liable for his share.

This article speaks of joint indivisible obligation. The obligation is joint because
the parties are merely proportionately liable to the whole of the obligation.

Creditor(s) can only run after the debtors as a group even if only one of them
cannot comply with the obligation. Furthermore, even if a debtor is capable of
complying, he/she will also have to be sued for specific performance even if he
she can comply with his portion. But he/she cannot be made liable for the
defaulting share.
SECTION 4. – Joint and Solidary Obligations
ARTICLE 1210. The indivisibility of an obligation does not necessarily give
rise to solidarity. Nor does solidarity of itself imply indivisibility.

Sometimes because the object is indivisible there is a perception that the

arrangement is solidary. Actually, the obligation remains to be joint and the
indivisibility of the object will not determine the nature of the obligation.

ARTICLE 1211. Solidarity may exist although the creditors and the debtors
may not be bound on the same manner and by the same periods and
conditions.

Ex. A, B and C, will jointly and severally pay Y the sum of 9,000 broken down
into the following; A-3,000 on December 10, 2018; B-if B passes the BAR and C-
if the dollar does not reach P58:USD1
SECTION 4. – Joint and Solidary Obligations
ARTICLE 1212 Each one of the solidary creditors may do whatever may be
useful to the others, but not anything which may prejudicial to the latter.

Ex 1. X, promises to deliver to solidary Creditors A, B and C, 3 basketball

tickets to the UAAP. Later X told A that he will give not just 3 basketball tickets
but if A agrees he will upgrade the seats to VIP seats to the basketball game.

Can A accept the change in the obligation?

Ex. 2 X, promises to deliver to solidary Creditors A, B and C, 3 basketball

tickets to the UAAP. Later X told A that he will not give 3 basketball tickets but
if A agrees he give them an overnight stay in Philippine Plaza.

Can A accept the change in the obligation?

SECTION 4. – Joint and Solidary Obligations
ARTICLE 1213. A solidary creditor cannot assign his rights without the
consent of the others.
Remember that solidary obligations is “one for all and all for one”

ARTICLE 1214. The debtor may pay any one of the solidary creditors; but if
any demand, judicial or extrajudicial, has been made by one of them,
payment should be made to him.

Ex. A, a graduating LMgmt student is obliged to deliver a copy of his thesis to

the Chairman, the Vice Chairman or to the Secretary of the Department. A can
deliver the thesis to any of them, but if any one of them asks for the copy from
A, A must deliver the same to the person who asked for it.
SECTION 4. – Joint and Solidary Obligations
ARTICLE 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 provision of article

The creditor who may have executed any of these acts, as well as he who
collects the debt, should be liable to the others for the share in the obligation
corresponding to them.

Novation replaces the old obligation with a new obligation

Compensation off-sets the obligation against another obligation
Confusion – creates a situation where the debtor and creditor is the same
person
Remission – forgives the obligation.
All these are modes of extinguishing an obligation
SECTION 4. – Joint and Solidary Obligations
ARTICLE 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 no been fully collected.

B 2

Object is a 9,000
SECTION 4. – Joint and Solidary Obligations
ARTICLE 1217. Payment made by one of the solidary debtor extinguishes the
obligation. If two or more of the solidary debtor 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.

This Article deals with how a solidary debtor who pays the obligation in full can collect
from the other debtors.
SECTION 4. – Joint and Solidary Obligations

B 2

Object is a 9,000
SECTION 4. – Joint and Solidary Obligations
ARTICLE 1218. Payment by a solidary debtor shall not entitle him for the
reimbursement from his co-debtors if such payment is made after the
obligation has prescribed or become illegal

Prescription – the lapsing of a right due to passage of time.

Once the obligation has prescribed or become illegal, then there is no longer any
obligation. So a solidary debtor who pays after that is doing something that the
debtors are no longer required to do. The solidary debtor cannot ask for
reimbursement from the other co-debtors.
SECTION 4. – Joint and Solidary Obligations
ARTICLE 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 any one of
them before the remission is effected.

B 2
Object is a 9,000

ARTICLE 1220. The remission of the whole obligation, obtained by one of the
solidary debtors, does not entitle him to reimbursement from his co-debtors.
SECTION 4. – Joint and Solidary Obligations
ARTICLE 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 extrajudicial demand upon him by the creditor the
provision of the preceding paragraph shall apply.

This Article deals with loss of the prestation in Solidary Obligations

SECTION 4. – Joint and Solidary Obligations
ARTICLE 1222. A solidary debtor may, in action 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.

Defenses: Circumstances that excuses a debtor from becoming liable for an

obligation. They can be:
Personal to the debtor – ex. Debtor is a minor or incapable of entering into an
agreement
Derived from the Nature of the obligation – ex. The portion pertaining to the
debtor is against morals or good customs.
Pertains to the share – ex. The prestation of the debtor is illegal/immoral.
Obligations and
Contracts
Book IV, New Civil Code
Title 1, Chapter 3[S5]
Divisible and Indivisible Obligations
SECTION 5. – Divisible and Indivisible Obligations
ARTICLE 1223. The divisibility or indivisibility of the things that are the
object of the obligation in which there is only one debtor and only one
creditor does not alter or modify the provision of Chapter 2 of this Title.

The divisibility or indivisibility of the object does not affect the nature and effect
of the obligation (Chapter 2).

This is because the nature of the object that is not prohibited by law cannot
affect the obligation as such object is within the scope of commerce.
Divisible means that the object is capable of partial performance.
Indivisible means that the object is not capable of partial performance
SECTION 5. – Divisible and Indivisible Obligations
ARTICLE 1224. A joint indivisible obligation give rise to indemnity for
damages from the time anyone of the debtors does not comply with his
undertaking. The debtor 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.
A

B 2

Object is a Car
SECTION 5. – Divisible and Indivisible Obligations
ARTICLE 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.
SECTION 5. – Divisible and Indivisible Obligations
Kinds of Indivisibility
Physical or Natural Indivisibility or the object by its nature cannot be
delivered in parts or partially performed
Conventional Indivisibility or the situation where even if the object is capable
of being delivered in parts or partially performed, but because of the
agreement of the parties, it is considered indivisible
Legal Indivisibility or the situation where even if the object is capable of
being delivered in parts or partially performed, but because of the law, it is
considered indivisible.
Obligations and
Contracts
Book IV, New Civil Code
Title 1, Chapter 3[S6]
Obligations with a Penal Clause
SECTION 6. – Obligations with a Penal Clause
ARTICLE 1226. In obligation with penal clause, the penalty shall substitute
the indemnity for damages and the payment of interest 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.

Obligations with a Penal Clause is an obligation with a penalty already agreed

upon in case of breach of the contract. (remember Liquidated Damages)
SECTION 6. – Obligations with a Penal Clause
ARTICLE 1227. The debtor cannot exempt himself from the performance of
his obligation by paying the penalty, save in the case when 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.

An obligation with a penal clause is not an alternative obligation so there is

only one object in the obligation. The parties have no option but to fulfill the
object of the obligation. The Penal Clause only comes in when the debtor has
failed to comply with the obligation.
SECTION 6. – Obligations with a Penal Clause
ARTICLE 1228. Proof of an actual damages suffered by the creditor is not
necessarily in order that the penalty may be demanded.

ARTICLE 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.

ARTICLE 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.
Buslaw 1
Study Guide
MODIFIED TRUE OR FALSE
1. In alternative obligations, one promises to deliver a thing to the other with
the option to choose another object instead of what was promised. - false
2. In alternative obligations, the right to choose what to deliver to the other
belongs to the one giving the object. - true
3. A creditor may demand delivery of an item in an alternative obligation only
if it is the last remaining items from the alternative items.
4. Loss of one of the things due to fortuitous events in an alternative obligation
shall extinguish the obligation. - false
5. In facultative obligations, loss of the thing due to fortuitous events before
substitution is made extinguishes the obligation - false
6. If a debtor is unable to make a choice in alternative obligations because of
the acts of the creditor, debtor may rescind the contract. - true
MODIFIED TRUE OR FALSE
7. If A and B promised to pay Y and Z P20,000, the obligation is considered to be
a joint obligation. - true
8. If a joint debtor cannot pay his share in the obligation, the other debtors can be
made liable for the share of the defaulting joint debtor. - false
9. Joint and solidary obligations presupposes multiple subjects. - true
10. If A and B promises to deliver the Z a specific car, the obligation is solidary. –
false (joint indivisible)
11. Solidary debtors may not be bound by separate conditions or periods. true
12. In solidary obligations, a solidary debtor cannot be held liable for the entire
obligation. false
13. If a solidary creditor forgives the debt to a joint creditor, the entire obligation is
considered extinguished. False
14. A solidary debtor who pays the entire amount can ask for reimbursement from
his co-debtors in the obligation. true
MODIFIED TRUE OR FALSE
15. In indivisible obligations with multiple debtors, the obligation is considered
to be solidary. - false
16. In case of default by joint debtors in an indivisible obligation, default of one
means everyone needs to be sued for the obligation. - true
17. If a student enrolls for one term in DLSU, the student’s obligation is
considered divisible. - true
18. A promise to pay P50,000 on Sunday is considered to be indivisible. – true
19. Obligations with a penal clause is nothing more than an alternative
obligation. - true
20. In cases of obligations with a penal clause, the creditor cannot normally ask
for damages in case of breach of the obligation. - true
21. Penal clauses are examples of liquidated damages. - true
MODIFIED TRUE OR FALSE
22. In case of obligations with a penal clause, creditor must prove he sustained
damages in the breach of the obligation to entitle him to the penalty. - false
23. An immoral penalty in an obligation to pay makes the obligation void. -
true
24. An immoral obligation with a penalty to pay P5,000 in case of default is not
allowed by law. - true
25. An alternative obligation may also be subject to a penal clause. - true
ENUMERATIONS/DEFINITIONS
1. What are alternative obligations?
2. What are facultative obligations?
3. What are joint obligations?
4. What are solidary obligations?
5. When is an obligation considered to be solidary?
6. What defenses are available to a solidary debtor with respect to share of his
defaulting co-debtors?
7. What are divisible obligations?
8. What are indivisible obligations?
9. What are the kinds of indivisibility?
10. What are obligations with a penal clause?
PROBLEM SOLVING
Problem 1. – Jan and Joe promised to deliver to David a case of vodka or a case
of scotch. Each case contains 24 bottles of each kind of liquor but David needs
the entire case to be delivered on the 10th of the month for a party he is hosting.
The parties also agreed that in the event Jan and Joe failed to deliver on time,
Jan and Joe will be liable to pay David P5,000 over and above the 1 case that
they are liable for.
What kinds of obligation was created above?

On the 9th, David went to Jan to ask for the case of liquor because he needed to
plan for the food and drinks he would serve for the 10th. But Jan said he would
not be able to deliver the entire box because he did not have it yet. David said
that this makes Jan and Joe in delay. Is David correct? Justify.
PROBLEM SOLVING
Problem 1.(continued) – On the 10th Joe arrived at the venue of David’s party bringing
½ a case of Vodka and ½ a case of Scotch. David was dismayed because he was
expecting either a case of vodka or a case of scotch and not half a case of each.
He thus refused to accept the delivery of Joe. Instead he said that Jan and Joe
are now in delay because of their failure to deliver. Joe protested because he
was there and ready to deliver but David just refused to accept delivery.
Besides David has not yet made any demand on Jan so they cannot be
considered in delay. If there is anyone who is in delay, it is actually David.
Is Joe liable for delay in the event Jan does not deliver his share? Justify.
Is David liable for delay in accepting delivery of the items from Joe? Justify.
Does David have to make a demand from Jan to make both Joe and Jan liable
for delay? Justify.
Is the obligation divisible and thus capable of partial performance? Justify
PROBLEM SOLVING
Problem 1.(continued) – Because of the failure of Jan to deliver his half of the
obligation, David had no choice but to buy a case of scotch from a passing
“Drinka Van” who offered the liquor for half the price. After the party, David
sued Jan and Joe for the penalty and the 1 case of liquor they were supposed to
deliver. Jan and Joe countered in court that David is not entitled to anything
because both Jan and Joe were in good faith and in fact, David saved money by
buying the liquor at half the price and so Jan and Joe cannot be said to have
prejudiced David.
Given that David actually saved money, can he still hold Jan and Joe liable?
Justify.
Can David ask for both the liquor and penalty from Jan and Joe? Justify.
Buslaw 1