Joint and Solidary Obligation

Art 1207
Concurrence of 2 or more creditors or more
debtors in one and the same obligation does
not imply that each one of the former has a
right to demand or that each one of the latter is
bound to render, entire compliance with the
prestation.
Solidary liability when obli expressly so
states(conventional) or when the law (legal) or
the nature of obligation (real) requires it.
 Art 1208
If contrary does not appear, the credit or debts
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.
 Kinds of Obligations according to number of
parties
1. Individual Obligation – one where there is only one obligor
or one obligee
2. Collective Obligation – one where there are two or more
debtors and two or more creditors.
• Joint Obli – whole obli is to be paid or fulfilled
proportionately by the different debtors and/or is to be
demanded proportionately by the dif creditors.
• Solidary Obli – each one of the debtors is bound to
render and/or each one of the debtors has a right to
demand from any of the debtors, entire compliance with
the prestation.
Collective obligation presumed to be joint

• Where there is a plurality of parties and the

share of each in the obligation is specified, the
correlative rights and obligations of the parties
are known.
Ex. Cat and Kate owes 25000 to Cherry. Each
debtor will then be liable to pay 12500
equally, and Cherry will have to collect it to
both of them.
• Same obligation, the share of each debtor is not
specified.
Presumption would be is that the obligation is joint,
consequences:
a) There are as many debts as there are debtors
b) There are as many credits as there are creditors
c) The debts are considered distinct and separate from
one another
d) Each debtor is liable only for a proportionate part of
the debt
e) Each creditor is entitled only to a proportionate part of
credit.
Example
Janice, Aries and Zel owes Quennie 27,000.
Quennie the creditor would then collect only
9,000 each.
Janice owes Aries, Zel and Quen 18,000. Each
creditor would then have a right to ask for
their share to Janice not more than 6,000
 Words indicating Joint liability
mancomunada, mancomunadamante, pro rata,
proportionately, we promise to pay signed by
two persons
 Obligation is Solidary
Art 1207
There is solidary liability only when:
1. The obligation expressly so states
2. The law requires solidarity
3. The nature of the obligation requires
solidarity
- Also exists when imposed in a final judgment
against several defendants
 Words indicating Solidary liability
Jointly and/or severally, solidaria, in solidum,
together and/or separately, individually
and/or collectively, juntos o separadamente, I
promise to pay signed by two or more persons
 Kinds of Solidarity
• Parties bound
a) Passive solidarity (mutual guaranty)– part of debtors,
any one of them can be made liable for the fulfillment
of the entire obligation. Without right of choice on part
of creditor unless bestowed upon him.
Ex. Carrie and Jamie collectively owes Kam 5,000. Kam may ask for
Carrie to pay the whole which extinguishes the obligation.
Jamie then would have to pay 2,000 to Carrie for her share
according to there own agreement (Art 1217). If Kam was given
the right he may choose whom to collect the debt.
b) Active Solidarity (Mutual representation)– on part
of the creditors, any one of them can demand the
fulfillment of the entire obligation. The solidary
creditors with powers to exercise the rights of
others in the same manner as their rights. Without
the right to choose on part of debtor unless given
to him.
Ex. Aaron owes 78,000 to Blake, Carter and Wil,
Blake may ask for the whole value with the
corresponding duty of giving 26,000 each to the
other creditors. If Aaron was given to choose
whom to pay then if he may.
c) Mixed Solidarity – on the part of both debtors and
creditors, each one is liable to render, and each one of
the creditors has a right to demand, entire compliance
with the obligation. Agreement btwn the debtors as to
extent of share in debt has nothing to do with the
agreement btwn the creditors (share)
Ex. Myka, Mina and Perry in solidum owes Ben and Iken
owes a sounder of 25 pigs worth 2,000 each. Any of
the three may deliver the pigs and any of the two may
receive.
Debtors – Perry already owns 25 pigs which price ranges
on 2,000, the others would then contribute 17,000
each for their share.
• Source
a) Conventional Solidarity – agreed upon by the
parties.
b) Legal Solidarity – imposed by law
c) Real Solidarity – imposed by nature of obligation
Ex.
1. When agent has exceeded authority, the principal is
also liable if he allowed the latter to act as though he
had full powers. 1911
2. Partners are solidarily liable with the partnership for
any crime or quasi-delict committed by any partner
acting in the ordinary course of business.
3. If two or more persons have appointed an
agent for a common transaction, they shall be
solidarily liable to the agent for all the
consequences of the agency. 1915
4. When there are two or more bailees to whom
a thing is loaned in the same contract
(gipahuwam sila sa gamit) they are liable
solidarily. 1945
5. Responsibility of two or more payees when
there has been a payment of what is NOT due
is solidary. 2157
6. Reponsibility of two or more persons who are
liable for a quasi-delict is solidary. 2194
7. If engineer or architect supervises
conctruction, he shall be solidarily liable with
the contractor for damages for any defect in
construction. 1723
8. In a felony (crime) the principal, accomplices
and accessories shall be liable severally among
themselves for their quotas and subsidiarily
for those of other persons liable. 110
Ex of REAL solidarity
1. Vehicle which figured in an accident was
operated under the so called kabit system the
exemplary damages among others payable
jointly and severally by the operator and the
grantee of the certificate of public
convenience was held justified because it is a
violation of law.
 Solidary not PRESUMED
Presumption where there are 2 or more persons in
the same obligation is JOINT.
Solidarity is BURDENSOME they create unusual rights
and liabilities.
Solidarity btwn Debtors increases there responsibility
Solidarity btwn Creditors increases the right of each
creditor
LAW favors debtors in presuming that they are bound
jointly and not solidarity.
 Art 1209
JOINT INDIVISIBLE OBLIGATION
If division is impossible, 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.
- Joint as to liabilities/rights, indivisible to compliance
- Middle ground btwn joint and solidary obligation
Ex. Zenitsu and Nezuko are jointly liable to
deliver a sculpture worth 500,000 to Inosuke.
If Zenitsu refuses to deliver then they would be
liable to pay damages, Nezuko with 250,000,
and Zenitsu with 250,000 plus damages.
If Nezuko suffered from the consequences of
non fulfillment from Zenitsu, then she may
recover from him.
If Zenitsu was insolvent Inosuke would have to
wait until Zenitsu would be able to pay his
part.
Ex. Tanjiro according to his agreement with Shinobu
and Giyu has to deliver a sword worth 800,000.
Tanjiro would have them both accept it since the
sword is indivisible, if Giyu refuses or didn’t come
to accept the sword then he may refuse to deliver
the sword.
To release him from his obligation Tanjiro may
deposit the sword to the court (consignation).
If Tanjiro didn’t fulfill his side of the deal, then Giyu
and Shinobu would have to ask their own share
separately (joint) 400,000 each only.
 Art 1210
The indivisibility of an obligation does not
necessarily give rise to solidarity. Nor does
solidarity of itself imply indivisibility.

Indivisibility Solidarity
- Prestation -legal tie
-only one debtor is liable -all debtors are liable
for damages - Must have atleast 2
-may exist on individual debtors/creditors
obligation -insolvency of one, the
-insolvency of one not others are
liable proportionately liable
Ex.
1.Solidary Indivisible Obligation
Hanamichi and Rukawa are solidarily liable to
give a basketball ring (consequence for breaking
the original one) to the school.
2. Solidary Divisible Obligation
Hanamichi and Rukawa are solidarily liable to
clean the entire court, storage and locker rooms
as a consequence for fighting during the
practice game. Hanamichi to the court and
Rukawa to the storage and locker room.
3. Joint Indivisible Obligation
Tanya and her entire Battalion are jointly liable to protect
the borders of the empire.
Joint – each soldier is tasked to defend and attack
Indivisible – the battalion has the same mission which is to
protect the borders, impossible to be done by only one.
4. Joint Divisible Obligation
The Hashira’s are tasked to protect the people in every city.
Joint – each may act on their own volition for their own
share of the mission
Divisible – the number of people to protect is high, so each
place is protected by a hashira.
 Art 1211
Solidarity may exist although the creditors and the
debtors may not be bound in the same manner
and by the same periods and conditions.
Legal tie:
1. Uniform Solidarity – parties bound by same
stipulations
2. Non-Uniform/Varied Solidarity – not subject to
same stipulations
Ex. Uniform Solidarity
Shirogane, Hayasaka and Ishigami obtained a loan
worth 1,500,000 to Shinomiya solidarily binding
themselves to pay under the following terms:
Ishigami 500,000 with 10 interest on Nov 18
Hayasaka 500,000 with 10 interest on Dec 18
Shirogane 500,000 with 10 interest on Jan 18
-Shinomiya may collect the first 500 with interest on
nov 18 to any of them but only that part of the
share since the next shall be collected o the next
month of the same date.
Ex. Varied Solidarity
Shirogane, Hayasaka and Ishigami obtained a loan worth
1,500,000 to Shinomiya solidarily binding themselves to pay
under the following terms:
Ishigami 500,000 with 10 interest on Nov 18
Hayasaka 500,000 with 10 interest on Dec 18
Shirogane 500,000 with 10 interest from the time he has been
chosen to be the president, if not his loan shall only have 5
interest on Jan 18.
-Shinomiya may collect the first 500 with interest on nov 18 to
any of them for Ishigami’s part, but only that part of the share
since the next shall be collected to the next month of the same
date. Shirogane’s share as soon as he became the President
shall have 10/5 depending on the elections result
(announcement January 5).
 Art 1212
Each one of the solidary creditors may do whatever
may be useful to the others, but not anything
which may be prejudicial to the latter.
Ex. Sebastian owes Shalltear and Albedo 50,000.
-Albedo or Shalltear may demand for the payment.
-if Shalltear decided to cancel the debt, she would
be responsible to reiburse Albedo’s share.
 Art 1213
A solidary creditor cannot assign his rights without
the consent of the others.

- each creditor represents the others, assignee

may not have the confidence of original solidary
creditor, after receiving payment he may not give
the shares of the others (trust issues)
- if assignment made to a co-creditor, consent
not necessary
 Art 1214
The debtor may pay any one of the solidary creditors,
but if any demand (judicial/extra) has been made by
one of them, payment should be made to him.

-demand is made to avoid confusion, as well as

prejudice to the more diligent creditor
If the co-creditors share was not given the obligation
shan’t be extinguished, the only concern here is the
share of the other creditor (debtor will have to pay the
creditor his share)
Ex. Megumin is liable to pay Aqua and Kazuma
50,000.
- Megumin may pay either of the two
- If Kazuma made an extra judicial demand,
Megumin will have to give the 50 to him.
- If Megumin despite the demand paid Aqua
(didn’t turn over Kazuma’s share), she shall still
be liable for Kazuma’s share.
- If there are more debtors, to whom the demand
was given shall be responsible to pay the whole
amount to the creditor who made the demand.
 Art 1215
Novation, Compensation, Confusion or
remission of the debt made by any of the sol
creditors, shall extinguish the obli, wtht
prejudice to the prov. of art.
Creditor who may have executed any of these,
as well as he who collects the debt, shall be
liable to the others for the share in the obli
corresponding to them.
Novation - substitution of a new, mangita kag lain/employ
nga mufulfill sa imung obli to discharge u fromm the obli.
Compensation – mode of extinguishing in their concurrent
amount those obli of persons who in their own right are
creditors and debtors of each other. D owes C 5000, C
owes D 5000.
Confusion/merger of rights – is a method of
extinguishment of obli wherein the characters/qualities
of creditor and debtor are merged in the same person.
- One of the solidary debtors also becomes the sole
creditor, he may then claim reimbursements from his co-
creditors
Remission – creditor gartuitously renounced his
right against the debtor with the latters
acceptance, simply a form of donation.
Ex.
Leorio owes Kurapika and Killua an amount of
50,000 to be used for purchasing his medical
equipments.
-if Killua condones 30,000, Kil shall be responsible
for giving 15,000 to Kurapika.
-only the remaining 20,000 shall be paid to both
the creditors.
 Joint Obligation 1215
those acts does not extinguish/modify the
obligation except with respect to the cr/dr
affected

-if Kil condones 25,000, Leorio shall pay the

same equal amount to Kurapika. His debt to
Killua is extinguished but not to Leorio.
 Art 1216
Creditor may proceed against any one of the
solidary debtors or some or all of them
simultaneously
-as long as the debt has not been fully collected
Ex. Naruto, Shikamaru and Ino owes Jiraiya 30,000.
-Jiraiya may collect 20 to Naruto and 10 to
Shikamaru.
-or 10 to each debtors
 Art 1217
Payment made by one of the solidary debtors
1. Extinguishes obligation (full payment)
- If two or more debtors offers to pay, creditor may choose
which to accept.
2. The paying solidary debtor can demand reimbursement
from co-debtors for their proportionate shares with
interest only from TIME of payment
- Insolvency occurs, others shall assume the share of the
insolvent one pro rata
3. Receiving creditor is jointly liable to others for
corresponding shares.
Ex. Shikadai, Boruto and Inojin owes Sarada and Chocho
18,000.
- Inojin paid the whole amount, Boruto and Shikadai will
have to pay 6,000 plus interest starting the due date, if
the due was Nov. 23 the interest would then arise
thereon.
- If Shikadai is insolvent, Boruto and Inojin will have to
bear in proportion to his share, 3,000 each for Boruto
(9,000) and Inojin.
- If Inojin paid only 5,000 he is not entitled to
reimbursement
Sarada/Chocho has the obligation to give Chocho/Sarada
her share in the credit.
 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/become illegal
Art 1231 Obligation already prescribed
Ex. Dave and Betty are solidarily indebted to
Ricardo worth 10,000. The debt has prescribed.
- If Dave paid, he cannot collect from Betty the
share corresponding to the latter, neither from
Ricardo.
Art 1266 Obli becomes illegal, obligation is
extinguished

Ex CC, Lelouch and Suzako are bound to deliver

Charles 20 potted plants of marijuana. Later
the usage of marijuana for medicinal use was
announced illagal.
- Suzako still delivered the plants, no one shall
be bound to reimburse Suzako.
 Prescriptive Periods of Actions (1106)

By prescription one acquires ownership and

other rights through lapse of time in the
manner and under the conditions laid down
by law.
• Action must be brought within 10 years
1 upon a written contract
2 upon an obligation created by law
3 upon a judgement
• Actions must be commenced within 6 years
1 upon an oral contract
2 upon a quasi contract

• Actions must be instituted within 4 years

1 Upon an injury to the rights of the plaintiff
2 Upon a quasi-delict

-statute of limitations, may be superseded/modified

by a contract btwn parties (period)
 Art 1219
The remission made by the creditor of the share
which affects one of the sol debtors does not
release the latter from his responsibility
towards to co-debtors, in case the debt had
been totally paid by anyone of them before
the remission was effected.

- Payment first, Remission no effect

- Remission made previous to the payment and payment is
made, solutio indebiti arises
Ex. Jeric, Zel and Quennie jointly and severally owes Anes
7500.
- Anes remitted Quennie’s debt, but payment has already
been done, remission no effect.
- Anes condoned Quennie’s debt, but Jeric paid 7500. Jeric
is not entitled for reimbursement from Quennie, but he
may demand for a return under the principle of solutio
indebiti to Anes (2500) and collect Zel’s share (if not yet
collected).
- If Zel was insolvent, Quennie still has to share 1,250 pro
rata to debt of each.
 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.
- Remission is whole co-debtors shall not pay the
debtor.
- If only a part was remitted, co-debtor still has
to pay the remaining debt but shall not pay for
the part that was included upon remission.
Ex. Dave, Jimwell and Cat together and
separately owes 15000 to Lena.
-Lena in favor of Cat condones 10,000.
-Jim and Dave will have to pay the remaining
5000 only with no reimbursement to Cat, for
she did not spend any hot dime ;P
 Art 1221
If the prestation is lost/ becomes impossible, the
liability of solidary debtors depends upon
whether or not there is fault or delay.
1. LOSS WTHT fault and BEFORE delay
- Extinguished
Ex. Armin, Mikasa and Eren promised to deliver
the bread for 100 soldiers to Captain Levi.
- The bread has rot, before any demand was
made, obligation is extinguished
2. LOSS due to FAULT of any debtor.
a. Armin, Mikasa and Eren promised to deliver the
bread worth 30,000 for the soldiers to Captain Levi.
-Armin was the reason why the bread has rot, all three
shall be liable to pay for the price of the bread +
damages
- If Mikasa and Eren have already contributed before
the bread was lost (share) they may recover the full
amount of price and damages.
- If Levi asked for Armin to pay the price and damages,
the others don’t have to pay a single penny
(reimburse)
b. If the bread came from Armin’s bakery, and
Mikasa and Eren would contribute 10,000 as
their share.
- If Eren paid for the price and damages to
Captain Levi, Mikasa will have to pay again
10000 while Armin will have to pay 10,000
plus damages, with no reimbursement from
the money used to make the bread worth
30,000.
3. LOSS is WITHOUT fault but AFTER delay
Ex. If bread was rotten through Armin’s fault and
an extrajudicial demand has been made by
Captain Levi.
-default of Armin makes all the debtors
responsible even for a fortuitous event.
 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 personally belong to the
others, he may avail himself thereof only as
regards that part of the debt for which the
latter is responsible.
1. Defense derived from the Nature of the
Obligation
Ex. Kuroko and Akashi are liable to Momo in the
amount of 6,000. The entire amount was
paid by Aomine.
- In an action of Momo against Kuroko, the latter
can raise can raise the defense of payment,
by virtue that the obligation has
extinguished.
2. Defense personal to, or which pertain to share
of debtor sued.
Ex. If the action by Momo is against Akashi, and
was insane at the time the obligation was
contracted.
- Obligation to pay is extinguished.
If it was subjected to a suspensive condition
- Only Akashi’s obli is extinguished. But Momo
may ask for Kuroko’s share to him.
3. Defenses personal to other solidary debtors
Ex. Kuroko would still have to pay his share of
3,000.
Divisible and Indivisible Obligations
 Art. 1223
The divisibility and 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. (1149)
Divisible Obligations- is an obligation where the
object of which, in its delivery or
performance, is capable of partial fulfillment.
Ex. Jassie, an engineer, entered into a contract
with Jane in which she is obliged to construct
the latter's house.
- The obligation here is divisible since it can be
done partially.
Indivisibile Obligations- is an obligation where
the object of which, in its delivery or
performance, is not capable of partial
fulfillment.
Ex. Hommy agreed to deliver a particular grand
piano to Gee on December 25. This obligation
indivisible since the object must be delivered
at one time and as a whole.
 Kinds of Division
1. Qualitative Division- based on quality, not on
number or quantity of the things which are
the object of the obligation.
Example: A balikbayan box has arrived from
Italy, its contents were chocolates, laptop,
Iphone and shoes. Barns was given both the
Iphone and shoes, while Maris has accepted
the laptop and chocolates
2. Quantitative Division- based on quantity
rather than on quality.
Example: Markian’s Uncle gave them a drum full
of imported wine from his Distillery.
The wine was then divided equally and each
members of the clan brought 1500 litters of
wine each.
3. Ideal or intellectual division- exist only in the
minds of the parties.
Example: A hotel and resort were inherited by
the 3 sisters, a material way of dividing it is
not possible, they are then considered as co-
owners and the decision for the business
shall be up to all three of them.
 Kinds of Indivisibility
1. Legal Indivisibility- where a specific provision of law
declares as indivisibile, obligations which, by their
nature, are divisible.
Ex: to pay taxes within a certain period, bail
2. Conventional Indivisibility- where the will of the
parties makes as indivisible, obligations which, by
their nature, are divisible.
3. Natural Indivisibility- where the nature of the
object or prestation does not admit of division. ex.
to give a specific thing, to perform a dance, to
sing a song.
 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.
Ex. Phil and Carrie are jointly liable to give a
diamond ring worth 50,000 to Emma and Ray.
-if Carrie does not comply she shall pay for her
share plus damages, and Phil shall pay for his
corresponding share only
 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 physically
divisible, an obligation is indivisible if so provided by law
or intended by the parties.
 Indivisible obligations
1. Obligations to give definite things- the
obligation here is indivisible because of the
nature of the subject matter.
Ex: Karen agreed to deliver a badminton racket
with the signature of his idol to Jake on
January 2.
2. Obligations which are not susceptible of
partial performance - the obligation here is
indivisible because of its purpose which
requires performance of all parts.

Ex: Jana entered into a contract with ABX

RestoBar stating that she will be performing a
tinikling dance on Friday night.
3. Obligations provided by law to be indivisible
even if thing or service is physically divisible

Ex: Jean, a taxpayer, is obliged to pay her tax

starting from January 1 to April 15 according
to the law. Although money is divisible, the
payment must be delivered in whole within a
specific period.
4. Obligations intended by the parties to be
indivisible even if thing or service is physically
divisible
Ex: Jera ordered a dress for here debut with
Shawn, a dressmaker. Since the dress cannot
be delivered partially, the obligation is
indivisible. Therefore, Shawn cannot demand
payment from Geri until the dress is done.
 Divisible obligations
1. Obligations which have for their object the
execution of a certain number of days- the
obligation here is divisible since it need not be
fulfilled at one time.
Ex: Carla, an architect, is obliged to design
Inna's cafe within 20 days.
2. Obligations which have for their object the
accomplishment of work by metrical units

Ex: Sandra agreed to make a cabinet with a

width of 18 inches, length of 12 inches and
height of 16 inches, to be delivered to Clyde.
3. Obligations which by their nature are
susceptible of partial performance

Ex: Garry has the obligation to pay his debt of

30,000 from Cheena in 6 monthly installments
of 5,000.
 Divisibility or indivisibility in obligations not
to do
Indivisible obligation- fulfilled continously
Ex: Hera had an agreement with Hades to not
enter their barangay for 5 years.

Divisible obligation- fulfillment is not continuous

Ex: Gil and Marie entered into a contract with
Rey to not come in the office during Saturdays.
Obligations with Penal Clause
 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.
(1152a)
(1)Principal obligation is one which can
stand by itself and does not depend for
its validity and existence upon another
obligation.
(2) Accessory obligation is one which is
attached to a principal obligation and,
therefore, cannot stand alone.
 Penal Clause
A penal clause is an accessory undertaking
attached to an obligation to assume
greater liability on the part of the obligor
in case of breach of the obligation, i.e.,
the obligation is not fulfilled, or is partly
or irregularly complied with.
 Purposes of penal clause.
(1) to insure their performance by creating an effective
deterrent against breach, making the consequences
of such breach as onerous as it may be possible. This
is the general purpose of a penal clause; and
(2) to substitute a penalty for the indemnity for
damages and the payment of interests in case of
non-compliance (Art. 1226.); or
(3) to punish the debtor for the non-fulfillment or
violation of his obligation.
Penal clause and condition distinguished

Penal clause
- Constitutes an obligation Condition
- Demandable in default - Does not
of unperformed obli, - Not demandable
sometimes joint
 Kinds of penal clause
1. Origin
(a) Legal penal clause. — when it is provided for by law;
and
(b) Conventional penal clause. — when it is provided for
by stipulation of the parties.
2. Purpose
(b) Compensatory penal clause. — when the penalty
takes the place of damages; and
(b) Punitive penal clause. — when the penalty is
imposed merely as punishment for breach.
3. Dependability or effect
(a) Subsidiary or alternative penal clause. —
when only the penalty can be enforced; and
(b) Joint or cumulative penal clause. — when
both the principal obligation and the penal
clause can be enforced.
Penalty substitutes for damages and interests

In an obligation with a penal clause, the penalty

takes the place of the indemnity for damages
and the payment of interests in case of non-
compliance. (Art. 1226.)
Proof of actual damages suffered by the
creditor is not necessary in order that the
penalty may be enforced. (Art. 1228.)
 When creditor may recover damages

(a) When so stipulated by the parties;

(b) When the obligor refuses to pay the penalty;
or
(c) When the obligor is guilty of fraud in the fulfi
llment of the obligation.
Ex. Howl is to deliver materials for hat making
worth 100,000 to Sophie the agreement
carried a penal clause in case of non-
fulfillment Howl would have to pay 30,000.
-even if more ang damage only 30 shall be paid,
-if the stipulation allows, Sophie may also
recover damages
-if Howl refuses to pay, Sophie may recover legal
interest representing new damages (non
payment of penalty)
-if Howl is guilty of fraud, also liable for damages
(proof), penalty (no need for proof)
 When penalty may be enforced
- Penalty is a stipulation in a contract is
demandable only if there is breach of
obligation
- Not contrary to law, morals, good customs,
public order/public policy
- if the obligation cannot be fulfilled due to a
fortuitous event, the penalty is not
demandable.
 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. (1153a)
Debtor cannot just pay the penalty instead of
performing the obligation. Precisely, the
object of the penalty is to secure compliance
with the obligation.
EXC: “this right has been expressly reserved for
him.”
EX. Krisha promised to deliver a set of PC and all
its accessories to Yana, she shall be made
liable to pay 2000 for failure thereof.
 Penal clause presumed subsidiary
Creditor cannot demand the fulfillment of the
obligation and the satisfaction of the penalty
at the same time.
(1) Where there is performance
obligation is fulfilled, this purpose is attained
and, therefore, there is no need for
demanding the penalty.
(2) Where there is no performance
non-compliance, the creditor may ask for the
penalty or require specific performance.
remedies are alternative
there was fraud on the part of the debtor, the
creditor may recover the penalty as well as
damages for non-fulfillment.
Ex. Sirach has to deliver soap products worth
6,000 to Eden. Failure to do so, Sirach would
have to pay 3,000.
1. if Sirach incurred in delay, and Eden accepted
if right was given to her then she may also ask
for a penalty (penal clause is joint)
2. If Sirach did not comply with his obligation,
Eden may ask for a fulfillment or the penalty
-if fulfillment was chosen, penalty will only be
possible if fulfillment was impossible without
fault
-if penalty was chosen, fulfillment will only be
possible if she refuses to pay penalty
- If non-fulfillment was caused by fraud of
Sirach, penalty and damages may be collected.
 When penal clause joint
debtor has the right to pay the penalty in lieu of
performance only when this right has been
expressly reserved for him
creditor, he has right to demand performance and
payment of penalty jointly when this right has
been clearly granted him.
not required that this right be expressly reserved for
him; an implied grant clearly deducible from the
evidence or the nature of the obligation is
sufficient
penalty is stipulated for default in an obligation
to pay a sum of money
clear that the creditor can demand both the
principal obligation and the penalty with legal
interest on the amount of the penalty from
the date of demand where the debtor refuses
to pay the penalty.
 ART. 1228
Proof of actual damages suffered by the creditor is
not necessary in order that the penalty may be
demanded.
-all that the creditor has to prove, to enforce the
penalty, is the violation of the obligation by the
debtor.
- The creditor may enforce the penalty whether he
suffered damages or not. (delay)
- But he cannot recover more than the stipulated
penalty even if he proves that the amount of his
damages exceeds the penalty.
 Damages recoverable in addition to penalty
must be proved.

In any of the three exceptions when damages

may be recovered in addition to the penalty
(Art. 1227.), the creditor must prove the
amount of such damages which he actually
suffered resulting from the breach of the
principal obligation.
 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. (1154a)
When penalty may be reduced by the courts

(1) When there is partial or irregular

performance
Ex. Pablo agreed to construct the pool of his
neighbor Totoro within six months for 700
per day (126,000) snacks and lunch provided.
In case of non-compliance he shall pay
26,000.
- Except for the finishing touches the pool was
completed, the court may equitably mitigate
the penalty proportionate to the damages
suffered.
- Irregular performance, say instead of working
from 9 am, he would start at 3pm.
(2) When the penalty agreed upon is iniquitous
or unconscionable.
penalty may be reduced even if there is no
performance at all.
The question of whether a penalty is reasonable
or iniquitous is addressed to the sound
discretion of the court and on several factors
Ex. Pablo agreed to construct the pool of his
neighbor Totoro within six months for 700 per
day (126,000) snacks and lunch provided. In
case of delay he shall pay 30,000 monthly.

-the court may reduce penalty if it is clearly

excessive and 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. (1155)
Effect of nullity of the penal clause
If only the penal clause is void, the principal
obligation remains valid and demandable. The
penal clause is just disregarded. The injured
party may recover indemnity for damages in
case of non-performance.
Ex. Nepherpitou according to their agreement is
to deliver antiquities worth 500,000 to
Meruem, in case of default she shall deliver
1000 humans to him.
Effect of nullity of the principal obligation

Principal obligation is void, the penal clause is

likewise void. The reason is that the clause
cannot stand alone without the principal
obligation to which it is subordinated.
if the nullity of the principal obligation is due to
the fault, creditor suffered damages on
equitable grounds, the penalty may be
enforced.
Ex. Feitan, Hisoka, and Illuka agreed to deliver
1,000 children to Lucilfer to used as his
experiment, in case of non compliance each
shall pay 500,000 each.