Obligations and Contracts

I. General Provisions (Art. 1156-1162)

II. Nature and Effect of Obligations (Art. 1163-1178)
III. Different Kinds of Obligation (Art. 1179-1230)
A. Pure and Conditional
B. Obligations with a Period
C. Alternative Obligation
D. Joint and Solidary
E. Divisible and Indivisible
F. Obligations with a Penal Clause
General Provisions
ART. 1156
An obligation is a juridical
necessity to give, to do or not to do.
General Provisions
ART. 1157
Obligations arise from:
(1) Law
(2)Contracts
(3) Quasi-Contracts
(4) Acts or omissions punished by law/Delicts; and
(5) Quasi-delicts
1.) Law
The law must expressly state the obligation or there must
be a specific provision of the law creating the obligation.
In other words, if there is no law, there is no obligation.

2.) Contracts
Obligations from contracts shall have the force of law
between the contracting parties and shall be complied
with in good faith. This means that neither party may
escape his obligations under the contract, unless the
other party assented thereto, or unless for causes
sufficient in law.
3.) Quasi-contracts
Is a juridical relation resulting from certain lawful, voluntary and
unilateral acts by virtue of which the parties become bound to each
other to the end that no one will be unjustly enriched or benefited
at the expense of another.

The 2 Principal Kinds

(a) negotiorum gestio(unauthorized management)
(b) solutio indebiti (undue payment)

4.) Acts or omissions punished by law,

Every person criminally liable for a felony is also civilly liable.
The commission of a crime causes not only moral evil but also
material damage.
5.) Quasi-delict
A quasi-delict is a fault or act of
negligence (or omission of care)
which causes damages to another,
there being no pre-existing
contractual relations between the
parties.
ex.
Driving recklessly causing damage
General Provisions
ART. 1158
Obligations derived from law are not
presumed. Only those expressly determined
in this Code or in special laws are
demandable, and shall be regulated by the
precepts of the law which establishes them;
and as to what has not been foreseen, by the
provisions of this Book.
General Provisions
ART. 1159
Obligations arising from contracts
have the force of law between the
contracting parties and should be
complied with in good faith.
General Provisions
ART. 1160
Obligations derived from quasi-
contracts shall be subject to the
provisions of Chapter 1, Title XVII of
this Book.
General Provisions
ART. 1161
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.
Scope of Civil Liability
Restitution
Reparation for the damage caused
Indemnification for consequential
damages
General Provisions
ART. 1162
Obligations derived from quasi-
delicts shall be governed by the
provisions of Chapter 2, Title XVII of
this Book and by special laws.
Quasi-delict (Tort or Culpa Aquiliana)
an act or omission which causes
damage to another in his person,
property, or rights giving rise to an
obligation to pay for the damage
done, there being fault or negligence
but there is no pre-existing
contractual relation between the
parties (ART. 2176)
Example:
X and his friends decided to play
softball in their neighborhood. When
he threw the ball, X broke the
window glass of Y. The accident
would not have happened had they
played a little farther from the
houses.
Ans: YES.
Quasi-delict is:
act or omission throwing of the ball
damage broken window of Y
cause and effect the ball he threw broke the
window
negligence for playing near the houses
pre-existing
relationship None
Nature and Effects of
Obligations
ART. 1163
Every person obliged to give
something is also obliged to take
care of it with the proper diligence of
a good father of a family, unless the
law or the stipulation of the parties
requires another standard of care.
The above provision refers to an
obligation to give a specific or
determinate thing
Duties of debtor in obligation to give a
determinate thing
They are:
(1) To preserve or take care of the thing due;
(2) To deliver the fruits of the thing
(3) To deliver its accessions and accessories
(4) To deliver the thing
(5) To answer for damages in case of non-
fulfillment or breach.
Obligation to take care of the thing due.
a. Diligence of a good father of a family. -
The ordinary care or that diligence which
an average (a reasonably prudent) person
exercises over his own property.

b. Another standard of care. if the law

provides or stipulated by parties (slight or
extraordinary diligence).
Nature and Effects of
Obligations
ART. 1164
The creditor has a right to the
fruits of the thing from the time the
obligation to deliver it arises.
However, he shall acquire no real
right over it until the same has been
delivered to him.
Right of creditor to the fruits
By law, the creditor is entitled to the fruits of
the thing to be delivered from the time the
obligation to make delivery of the thing
arises.

In case of rescission, the parties are under

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

1. Generally, the obligation to deliver the thing due and,

consequently, the fruits thereof, if any, arises from the time of
the perfection of the contract.
Perfection in this case refers to the birth of the contract or to
the meeting of the minds between the parties.
2. If the obligation is subject to a suspensive condition or period, it
arises upon fulfillment of the condition or arrival of the period.
However, the parties may make a stipulation to the contrary as
regards the right of the creditor to the fruits of the thing.
3. In a contract of sale, the obligation arises from the perfection of
the contract even if the obligation is subject to a suspensive
condition or a suspensive period where the price has been paid.
4. In obligations to give arising from law, quasi-contracts, delicts,
and quasi-delicts, the time of performance is determined by the
Example:

Donatello sold his dog to Leonardo for P 30,000.00. No date or condition was
stipulated for the delivery of the dog. While still in the possession of Donatello,
the dog gave birth to 5 puppies.

Who has the right to the puppies?

D sold to L = Buyers obligation to pay

L paid to D = Sellers obligation to deliver
L is already the owner of the dog at the point, L paid D.
L has the right to the puppies, given that L already paid D.
D will have the right if there is no payment and not yet delivered.
Even if not delivered as long as it is paid, L will have the right to the puppies.

Meaning of personal right and real right.

Personal right is the right or power of a person

(creditor) to demand from another (debtor), as a
definite passive subject, the fulfillment of the latters
obligation to give, to do, or not to do.

Real right is the right or interest of a person over a

specific thing (like ownership, possession, mortgage,
lease record) without a definite passive subject
against whom the right may be personally enforced.
 A personal right is, therefore, binding or
enforceable only against a particular person
while a real right is directed against the whole
world.

Bob owns a property with title and it is a real

right.
Sam is trying to claim the property as his.
Bob can use his personal right to claim the
property.
Nature and Effects of
Obligations
ART. 1165
When what is to be delivered is a determinate thing, the
creditor, in addition to the right granted him by Article
1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that
the obligation be complied with at the expense of debtor.
If the obligor delays, or has promised to deliver the same
thing to two or more persons who do not have the same
interest, he shall be responsible for fortuitous event until
he has effected the delivery.
Distinction between Determinate and
Indeterminate things:
1. Specific or Determinate thing:
A thing is said to be specific or determinate
when it is capable of particular designation.

Example:
the car with plate number ABC 123; or
a notebook owned by Mr. X

2. Generic or Indeterminate thing:

A thing is generic or indeterminate when it refers
only to a class, to a genus, and cannot be pointed
out with particularity.

Example:
a book;
the sum of P5,000.00; or
a kilo of sugar.

Remedies of the creditor

1. If the debtor fails to perform his obligation to
deliver a determinate thing
a. To compel the debtor to make the deliver
b. To demand damages from the debtor
ex.
D is obliged to give C a specific car. On due date, C
demands delivery but D does not deliver.
What is the remedy of C?
C can compel D to deliver the car and demand
damages.
2. If debtor fails to perform his obligation to deliver a
generic thing
a. To ask that the obligation be complied with at the
expense of the debtor
b. To demand damages from the debtor
ex.
D is obliged to deliver 10 sacks of rice to C. D does
not perform hic obligation as stipulated.
What is the remedy of C?
C can obtain 10 sacks of rice from other sources at
the expense of D and demand for damages.
Paragraph 3:
Effect of Fortuitous Events:
Generally, an obligation to deliver
a specific thing is extinguished by a
fortuitous event or act of God. On the
other hand, generic obligations are
never extinguished by fortuitous
events.
Examples:
(a) A is obliged to give B this particular car.
Before delivery, an earthquake destroys
completely the car. The obligation to deliver is
extinguished because the car is a specific thing.

(b) A is obliged to give B a book. Since this is a

generic thing, even if one particular book is lost,
other books may take its place. Hence, the
obligation is not extinguished.
However, the 3rd paragraph of Art. 1165 gives two
instances when a fortuitous event does not excuse
compliance:
(a) if the obligor delays by default:

Two kinds of delays:

1. Ordinary delay - merely non-performance at the
stipulated time

2. Legal delay (default) - is that delay which amounts to a

virtual non fulfillment of the obligation. As a rule, to put a
debtor in default, there must be a demand for fulfilment.
Example:
A is obliged to give B his Jaguar car on Dec. 7, 2005. If on
said day, A does not deliver, he is in ordinary delay (not
default).

If on Dec. 8, 2005, an earthquake destroys the Jaguar

car, A is not liable because the obligation is extinguished.

If, however, on Dec. 8, demand was made for delivery, A

would be in legal delay (default) and if later, the car is
destroyed by a fortuitous event, he would still be
liable.
Nature and Effects of
Obligations
ART. 1166
The obligation to give a
determinate thing includes that of
delivering all its accessions and
accessories, even though they may
not have been mentioned.
Accessories those joined to or included with the principal for
the latters better use, perfection, or enjoyment.

Accessions additions to or improvements upon a thing and

whatever is built, planted, or sown on a persons parcel of land.

Example:
If I am obliged to deliver a particular car, I must also give the
accessories, like the jack; or
If I am obliged to deliver a piece of land, I must give also the
accessions, like a building constructed thereon.

This should be complied with even if it was not mentioned in the

contract.
Nature and Effects of
Obligations
ART. 1167
If a person obliged to do something fails to
do it, the same shall be executed at his cost.
The same rule shall be observed if he does it
in contravention of the tenor of the
obligation. Furthermore, it may be decreed
that what had been poorly done be undone.
Refers to an obligation to do
a. The debtor fails to perform the
obligation
b. The debtor performs an obligation to
do but contrary to the terms thereof
c. The debtor performs an obligation
to do but in poor manner
Remedies of creditor
a. Fails to comply with obligation or does it in
contravention of the terms
1. have the obligation performed by himself, or by
another, unless personal considerations are involved,
at the debtors expense; and
2. recover damages
b. Does it poorly
1. may be ordered that it be undone if it is still possible
to undo what was done at the debtors expense; and
2. recover damages
Example:
X binds himself to construct the
house for B. It is stipulated that the
house shall have 3 rooms and the
kitchen shall be painted all white.
a. If X does not construct the house, what is the remedy of B?
B may ask a third person to construct the house at the
expense of X.
b. If X constructs the house but only had 2 rooms, what is the
remedy of B?
B can ask to have it done according to the specifications. If
X refuses, the obligation may be performed by a third
person at the expense of X
c. If X constructs the house with 3 rooms but the white paint in
the kitchen was poorly done, what is the remedy of B?
B may ask X that it be undone, or in case of refusal, ask a
third person to paint the kitchen at the expense of X.
Nature and Effects of
Obligations
ART. 1168
When the obligation consists in not
doing, and the obligor does what has
been forbidden him, it shall also be
undone at his expense.
If the debtor does what has been forbidden him
a. The creditor may demand that what has been
done be undone; and
b. Demand damages

Example
B bought a farm lot from S. It was stipulated
that S would not construct a fence on a certain
portion of his land adjoining that sold to B.
Nature and Effects of
Obligations
ART. 1169
Those obliged to deliver or to do something incur in delay from the time the obligee
judicially or extra-judicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may
exists:
(1) When the obligation or the law expressly so declares; or
(2) When from the nature and the circumstances of the obligation it appears that the
designation of the time when the thing is to be delivered or the service is to be
rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his
power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or
is not ready to comply in a proper manner with what is incumbent upon him. From the
moment one of the parties fulfills his obligation, delay by the other begins.
General Rule: No Demand, No Delay
Two kinds of delays:
1. Ordinary delay - merely non-
performance at the stipulated time

2. Legal delay (default) failure to perform

an obligation on time which failure
constitutes a breach of obligation.
Kinds of delay
a. Mora solvendi delay on the part of
the debtor
b. Mora accipiendi delay on the part
of the creditor
c. Compensatio Morae delay of the
obligors in reciprocal obligations
Requisites of delay
1. The debtor does not perform his
obligation on the date it is due.
2. The creditor demands the
performance of the obligation.
3. The debtor does not comply with
the creditors demand.
Example
D owes C P5,000. The obligation is due on
November 20, 2016.

a. If D does not pay on Nov. 20, 2016, does he

incur delay?
NO, because there is still no demand.
b. But if C makes a demand on that date or
thereafter and D does not comply, then there
will be delay.
General Rule; No Demand, NO Delay
Exceptions:
1. When the law so provides
Ex. Payment of taxes
2. When the obligation expressly so declares
Ex. The rental shall be paid by the lessee within the first five days
of the month in advance without need of demand
3. When time is of the essence of the contract
Ex. A rent-a-car company is obliged to provide for the bridal car
during the wedding at a particular date, time and place.
4. Demand would be useless
Ex. S is obliged to deliver a specific horse to B on Dec. 1. Through
Ss negligence, the horse died on Nov. 15.
5. Where there is performance by a party in
reciprocal obligations
Ex.
S agreed to sell his television set for
P10,000. The obligation of S is to deliver the
television set while that of B, to pay P10,000.
From the moment S delivers the television
set, B is in default if he does not pay S without
the need of any demand.
Nature and Effects of
Obligations
ART. 1170
Those who in the performance of
their obligations are guilty of fraud,
negligence, or delay and those who
in any manner contravene the tenor
thereof, are liable for damages.
Grounds for liability
Fraud or dolo
deliberate or intentional evasion of the normal
fulfillment of an obligation
refers to incidental fraud (dolo incidente) which is
fraud committed in the performance of an obligation
Ex.
S obliged himself to deliver to B 20 bottles of
Novelino wine. Subsequently, S delivered 20 bottles
knowing that they contain tuba.
2. Negligence or culpa
- is the omission of that 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)
ex.
If the obligation is to deliver a specific window
glass, the debtor must ensure that the glass,
considering its fragility, is well-protected when he
transports it as required by the nature of the
obligation. Otherwise, he will be negligent.
Kinds of Culpa
1. Culpa Contractual (Contractual Negligence)
- negligence in the performance of a
contract
ex.
X is a passenger of the bus driven by Y.
Because Y was texting while driving, he did not
notice the curve so the bus crashed. As a
result, X got hurt.
2. Culpa Aquiliana
- acts or omissions that cause damage to
another, there being no contractual relation
between the parties

ex.
In the same example, A, a pedestrian, was
hit by the bus when it crashed.
3. Culpa Criminal (Criminal Negligence)
- negligence that results in the commission of a crime
ex.
In the same example, the passenger may bring a court
action not only for culpa contractual against the bus
owner, but also culpa criminal against the bus driver
for physical injuries through reckless imprudence.
The pedestrian may bring not only a suit for culpa
aquiliana against the bus driver and the owner but
also culpa criminal against the bus driver for physical
injuries through reckless imprudence.
 CULPA CULPA CULPA
CONTRACTUA AQUILIANA CRIMINAL
L
There is a pre-existing There is no pre- There is no pre-
contract existing contract existing contract
Preponderance of Preponderance of The crime must be
evidence is required evidence is needed proved beyond
reasonable doubt
Defense of a good Defense of a good This defense cannot
father of a family in father of a family in be interposed. If the
the selection and the selection of employee is insolvent
supervision of employees is a proper or incapable to pay
employees is not defense of the the civil aspect or
proper and complete employer liability, the employer
defense but can is subsidiarily liable.
3. Delay (Art. 1169)
4. Contravention of the terms of the obligation
- a violation to the stipulation in the obligation
ex.
E leased the apartment of R for P10,000 a
month to be paid in advance during the first
week of every month. E failed to pay his rent as
stipulated in the contract. R is entitled to eject
him from the premises.
Nature and Effects of
Obligations
ART. 1171
Responsibility arising from fraud is
demandable in all obligations. Any
waiver of an action for future fraud is
void.
This article refers to incidental fraud
which is employed in the fulfillment
of an obligation.

Responsibility arising from fraud can be

demanded with respect to all kinds of
obligation and unlike in the case of
responsibility arising from negligence
 Waiver of action for future fraud void -
waiver of an action for future fraud is void (no
effect, as if there is no waiver) as being
against the law and public policy.

Waiver of action for past fraud valid - A

past fraud can be the subject of a valid waiver
because the waiver can be considered as an
act of generosity and magnanimity on the part
of the party who is the victim of the fraud.
Example:
S promised to deliver 127 cavans of rice of a
particular brand and quality to B at the rate of 10
cavans a month.
S cannot make an agreement with B, whereby B
will not file an action in court against S, should S
commit fraud in the performance of his obligation.
This waiver is void. Hence, B still bring an action
against S for damages arising from fraud.
But once fraud is committed, B, with full
knowledge thereof, can waive his right to indemnity
as an act of forgiveness on his part.
Nature and Effects of
Obligations
ART. 1172
Responsibility arising from
negligence in the performance of
every kind of obligation is also
demandable, but such liability may
be regulated by the courts, according
to the circumstances.
 Validity of waiver of action arising from
negligence.
(1)An action for future negligence (not fraud)
may be renounced except where the nature
of the obligation requires the exercise of
extraordinary diligence as in the case of
common carriers.
(2) Where negligence is gross or shows bad
faith, it is considered equivalent to fraud. Any
waiver of an action for future negligence of
this kind is, therefore, void.
 Kinds of negligence according to
source of obligation.
(1)Contractual negligence (culpa contractual)
- This kind of negligence is not a source of
obligation. It merely makes the debtor liable
for damages in view of his negligence in the
fulfillment of a pre-existing obligation
resulting in its breach or non-fulfillment. It is
a kind of civil negligence if it does not
amount to a crime
EXAMPLE:
If S entered into a contract of sale
with B to deliver a specific horse on a
certain day and the horse died through
the negligence of S before delivery, S is
liable for damages to B for having failed
to fulfill a pre-existing obligation
(contract may be either express or
implied) because of his negligence. This
is culpa contractual.
(2) Civil negligence (culpa aquiliana)
- Negligence which by itself is the source of an
obligation between the parties not formally
bound before by any pre-existing contract. (Tort)

EXAMPLE:
Assume now, that the horse belongs to and is in
the possession of B. The negligence of S which
results in the death of the horse is culpa aquiliana.
In this case, there is no pre-existing contractual
relation between S and B. The negligence itself is
the source of liability.
(3) Criminal negligence (culpa
criminal)
- Negligence resulting in the
commission of a crime. The same
negligent act causing damages may
produce civil liability arising from a
crime or create an action for quasi-
delict
- In negligence cases, the aggrieved
party may choose between a criminal
EXAMPLE:
A crime can be committed by negligence. If
B wants, he can bring an action for culpa
criminal (damage to property through simple
or reckless imprudence). Here, the crime is the
source of the obligation of S to pay damages.
But B cannot recover damages twice for the
same act or omission of S. In other words,
responsibility for quasi-delict is not
demandable together with the civil liability
arising from a criminal offense.
 Effect of negligence on the part of the
injured party.
Article 2179 of the Civil Code provides:
When the plaintiffs own negligence was the
immediate and proximate cause of his injury,
he cannot recover damages. But if his
negligence was only contributory, the
immediate and proximate cause of the injury
being the defendants lack of due care, the
plaintiff may recover damages, but the courts
shall mitigate the damages to be awarded.
EXAMPLES:
P is a passenger in a carefully driven
bus. Without any warning, he jumped
off the bus, as a result of which, he
suffered injuries.
Can P recover damages?
Answer: NO
The bus company is not liable for damages
because the cause of Ps injuries is his own
negligence .
Now, suppose P was standing on the running
board of the bus and was repeatedly told by the
conductor to go inside but he did not pay any
attention. Suddenly, the bus swerved to the left to
avoid collision with another vehicle, as a result of
which, P was thrown off the bus. At the time of
mishap, the driver was intoxicated and was driving
recklessly at a very high rate of speed.
Can P recover damages?
 In this case, P did not observe the
diligence of a good father of a family
to avoid injury to himself. But his
contributory negligence does not bar
recovery for damages for his death or
injuries since the proximate or direct
cause thereof is the negligence of the
common carrier. However, the amount
of damages shall be equitably
reduced.
Nature and Effects of
Obligations
ART. 1173
The fault or negligence of the obligor consists in the
omission of that 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. When
negligence shows bad faith, the provisions of articles 1171
and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is
to be observed in the performance, that which is expected
of a good father of a family shall be required.
Factors to be considered:
Nature of obligation
Circumstances of the person
Circumstance of time
Circumstance of the place
Kinds of diligence required:
Agreed upon by parties, orally or in
writing
Absence of stipulation, that required
by law in the particular case (like the
extraordinary diligence required of
common carriers)
If both the contract and law are
silent, diligence expected is that of a
Nature and Effects of
Obligations
ART. 1174
Except in cases expressly specified by the law,
or when it is otherwise declared by stipulation,
or when the nature of the obligation requires
the assumption of risk, no person shall be
responsible for those events which could not
have been foreseen, or which though
foreseen, were inevitable.
Kinds of fortuitous events:
Ordinary fortuitous events
Extra-ordinary fortuitous events

Requisites of a fortuitous event

Event must be independent of the human will or at least of
debtors will.
Event could not be foreseen, or if foreseen, is inevitable
Event must be of such a character as to render it impossible
for the debtor to comply with his obligation in a normal manner
Debtor must be free from any participation in, or aggravation
of, the injury to the creditor, that is there is no concurrent
negligence on his part
Rules as to liability in case of fortuitous
event
When expressly specified by law
When declared by stipulation
When the nature of obligation
requires the assumption of risk
Nature and Effects of
Obligations
ART. 1175
Usurious transactions shall be
governed by special laws.
Usury
- contracting for or receiving interest
in excess of the amount allowed by
law for the loan or use of money,
goods, chattels or credits.
Requisites for recovery of interest
1. The payment of interest must be expressly
stipulated (Art. 1956);
2. The agreement must be in writing; and
3. The interest must be lawful (Art. 1957)

A stipulation for payment of usurious

interest is void, that is, as if there is no
stipulation as to interest.
Nature and Effects of
Obligations
ART. 1176
The receipt of the principal by the creditor, without
reservation to the interest, shall give rise to the
presumption that said interest has been paid.
The receipt of a latter installment of a debt without
reservation as to prior installments, shall likewise
raise the presumption that such installments have
been paid.
Ex.
D owes C the amount of P10,000 with interest at
15% a year. C issued a receipt for the principal.
The interest was not referred to in the payment
whether or not it has been paid.

E is a lessee in the apartment of R, paying P5,000

rental a month. E failed to pay the rent for the
months of February and March. In April, E paid
P5,000 and R issued a receipt that they payment is
for the month or April.
When presumptions in Art. 1176 do not apply
1. With reservation as the interest
The presumption in Art. 1176 do not arise where
there is a reservation that no payment has been
made as to interest or prior installments. The
reservation may be made in writing or verbally.
2. Receipt without indication of particular installment
paid
3. Receipt for a part of the principal
4. Payment of taxes
5. Non-payment proven
Nature and Effects of
Obligations
ART. 1177
The creditors, after having pursued the
property in possession of the debtor to satisfy
their claims, may exercise all the rights and
bring all the actions of the latter for the same
purpose, save those which are inherent in his
person; they may also impugn the acts which
the debtor may have done to defraud them.
Nature and Effects of
Obligations
ART. 1178
Subject to the laws, all rights
acquired in virtue of an obligation are
transmissible, if there has been no
stipulation to the contrary.
Different Kinds of Obligation
A. Pure and Conditional
B. Obligations with a Period
C. Alternative Obligation
D. Joint and Solidary
E. Divisible and Indivisible
F. Obligations with a Penal Clause
Different Kinds of Obligation :
Pure and Conditional

ART. 1179
Every obligation whose performance does not
depend upon a future or uncertain event, or upon a
past event unknown to the parties, is demandable at
once.
Every obligation which contain a resolutory condition
shall also be demandable, without prejudice to the
effects of the happening of the event.
 A pure obligation is one which is not
subject to any condition and no
specific date is mentioned for its
fulfillment and is, therefore,
immediately demandable.

A conditional obligation is one whose

consequences are subject in one way
or another to the fulfillment of a
Condition is a future and uncertain event, upon the happening of which, the
effectivity or extinguishment of an obligation (or rights) subject to it depends.

Characteristics of a condition.
1. Future and uncertain. In order to constitute an event a condition, it is not
enough that it be future; it must also be uncertain.

The first paragraph of Article 1179 obviously uses the disjunctive or between
future and uncertain to distinguish pure obligation from both the conditional
obligation and one with a period. Be that as it may, the word or should be and.

2. Past but unknown. A condition may refer to a past event unknown to the
parties. (infra.) If it refers to a future event, both its very occurrence and the time
of such occurrence must be uncertain; otherwise, it is not a condition.

A condition must not be impossible.

Two principal kinds of conditions:

(1) Suspensive condition (condition precedent

or condition antecedent) or one the
fulfillment of which will give rise to an
obligation (or right). In other words, the
demandability of the obligation is suspended
until the happening of a future and uncertain
event which constitutes the condition.
Example:

Sale of vessel is conditioned upon proof that seller is, in fact, owner of
property.
Facts: S, owner, and B, purchaser, agreed upon the sale of a vessel provided
that the title papers to the same were in proper form. The title was in the
name of another and S promised to perfect his title to the vessel. Before
compliance by S with the condition exacted by B, and while the vessel was
in Ss possession, it sank due to a severe storm.

Issue: Is B under obligation to pay the price of the vessel?

Held: No. The sale of the vessel was not perfected, because of the non-
compliance by S of a condition precedent to its perfection, to wit: the
production of the proper papers showing that he was, in fact, the owner of
the vessel in question. Consequently, the loss of the vessel must be borne
by S, the owner, and not by B who only intended to purchase it and was
unable to do so because of failure of S to comply with the said condition.
(2) Resolutory condition (condition
subsequent) or one the fulfillment of
which will extinguish an obligation
(or right) already existing.
Past event unknown to the parties.

A condition really refers only to an uncertain and future event.

A past event cannot be said to be a condition since the
demandability of an obligation subject to a condition depends
upon whether the event will happen or will not happen.

EXAMPLE:
S is the owner of a parcel of land which is being claimed by X.
Last week, the Supreme Court has rendered a fi nal decision
upholding the right of S. However, S has not yet received the
notice that he had won the case. Now, S obliged himself to sell the
land to B for a definite price, should he win the case against X.

Under the facts, S would be bound to sell the land to B upon

receipt of the notice that he had won the case against X.
Different Kinds of Obligation :
Pure and Conditional

ART. 1180
When the debtor binds himself to
pay when his means permit him to
do so, the obligation shall be deemed
to be one with a period, subject to
the provisions of article 1197.
A period is a future and certain event upon the
arrival of which the obligation subject to it
either arises or is extinguished.
(1) The debtor promises to pay when his means
permit him to do so.
(2) Other cases. As when the debtor binds
himself to pay:
(a) little by little
(b) as soon as possible
(c) from time to time;
(d) as soon as I have the money
(e) at any time I have the money
(f) in partial payments
Different Kinds of Obligation :
Pure and Conditional

ART. 1181
In conditional obligations, the
acquisition of rights, as well as the
extinguishment or loss of those
already acquired, shall depend upon
the happening of the event which
constitutes the condition.
Effect of happening of condition.
This article reiterates the distinction between a suspensive (or
antecedent) condition and a resolutory (or subsequent)
condition.

Acquisition of rights. In obligations subject to a suspensive

condition, the acquisition of rights by the creditor depends upon
the happening of the event which constitutes the condition.

Loss of rights already acquired. In obligations subject to

aresolutory condition, the happening of the event which
constitutesthe condition produces the extinguishment or loss of
rights alreadyacquired.
Effect of non-compliance with resolutory
condition.

Where a contract is subject to a resolutory

condition, non-compliance with or non-
fulfillment of the condition resolves the contract
by force of law without need of judicial
intervention.
Different Kinds of Obligation :
Pure and Conditional

ART. 1182
When the fulfillment of the condition depends
upon the sole will of the debtor, the
conditional obligation shall be void. If it
depends upon chance or upon the will of a
third person, the obligation shall take effect in
conformity with the provisions of this Code.
Classifications of conditions.
(1) As to effect.
(a) Suspensive. the happening of which gives
rise to the obligation; and
(b) Resolutory. the happening of which
extinguishes theobligation.
(2) As to form.
(a) Express. the condition is clearly stated;
and
(b) Implied. the condition is merely inferred.
(3) As to possibility.
(a) Possible. the condition is capable of fulfillment, legally and
physically; and
(b) Impossible. the condition is not capable of fulfillment, legally
or physically.
(4) As to cause or origin.
(a) Potestative. the condition depends upon the will of one of
the contracting parties; is a condition suspensive in nature and
which depends upon the sole will of one of the contracting parties.
(b) Casual. the condition depends upon chance or upon the will
of a third person; and
(c) Mixed. the condition depends partly upon chance and partly
upon the will of a third person.
(5) As to mode.
(a) Positive. the condition consists in the performance of an act;
and
(b) Negative. the condition consists in the omission of an act.
(6) As to number.
(a) Conjunctive. there are several conditions and all must be
fulfilled; and
(b) Disjunctive. there are several conditions and only one or
some of them must be fulfilled.
(7) As to divisibility.
(a) Divisible. the condition is susceptible of partial performance;
and
(b) Indivisible. the condition is not susceptible of partial
performance.
Different Kinds of Obligation :
Pure and Conditional

ART. 1183
Impossible conditions, those contrary to good customs
or public policy and those prohibited by law shall annul
the obligation which depends upon them. If the
obligation is divisible, that part thereof which is not
affected by the impossible or unlawful condition shall
be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon.
When Article 1183 applies.
Article 1183 refers to suspensive
conditions. It applies only to cases
where the impossibility already
existed at the time the obligation
was constituted. If the impossibility
arises after the creation of the
obligation, Article 1266 governs.
Two kinds of impossible
conditions.
They are:
(1) Physically impossible conditions.
when they, in the nature of things,
cannot exist or cannot be done; and
(2) Legally impossible conditions.
when they are contrary to law,
morals, good customs, public order,
Effect of impossible conditions.
Conditional obligation void. C = Void makes
O = Void
Conditional obligation valid. C = Valid
makes O = Valid, given C is not to do an
impossible thing.
Only the affected obligation void. C+(-C)= O
is Valid for C, Void for (-C).
Only the condition void. C = void, O = valid.
Different Kinds of Obligation :
Pure and Conditional

ART. 1184
The condition that some event
happen at a determinate time shall
extinguish the obligation as soon as
the time expires or if it has become
indubitable that the event will not
take place.
The above article refers to a positive
(suspensive) condition the happening of an
event at a determinate time. The
obligation is extinguished:
a. as soon as the time expires without the
event taking place; or
b. as soon as it has become indubitable that
the event will not take place although the
time specified has not yet expired.
Different Kinds of Obligation :
Pure and Conditional

ART. 1185
The condition that some event will not happen at a
determinate time shall render the obligation effective
from the moment the time indicated has elapsed, or if
it has become evident that the event cannot occur.
If no time has been fixed, the condition shall be
deemed fulfilled at such time as may have probably
been contemplated, bearing in mind the nature of the
obligation.
The above provision speaks of a negative condition that an
event will not happen at a determinate time. (see Art.
879.) The obligation shall become effective and binding:

1. from the moment the time indicated has elapsed

without the event taking place; or
2. from the moment it has become evident that the event
cannot occur, although the time indicated has not yet
elapsed. If no time is fixed, the circumstances shall be
considered to determine the intention of the parties.
This rule may also be applied to a positive condition.
Different Kinds of Obligation :
Pure and Conditional

ART. 1186
The condition shall be deemed
fulfilled when the obligor voluntarily
prevents its fulfillment.
Constructive fulfillment of suspensive
condition.
There are three (3) requisites for the
application of this article:

1. The condition is suspensive;

2. The obligor actually prevents the fulfillment
of the condition; and
3. He acts voluntarily.
 The law does not require that the obligor acts with malice or
fraud as long as his purpose is to prevent the fulfillment of the
condition. He should not be allowed to profi t from his own fault
or bad faith to the prejudice of the obligee. In a reciprocal
obligation like a contract of sale, both parties are mutually
obligors and also obligees. (see Art. 1167.)

Constructive fulfillment of resolutory condition.

Article 1186 applies also to an obligation subject to a

resolutory condition with respect to the debtor who is
bound to return what he has received upon the
fulfillment of the condition.
Different Kinds of Obligation :
Pure and Conditional

ART. 1187
The effects of a conditional obligation to give, once the condition has
been fulfilled, shall retroact to the day of the constitution of the
obligation. Nevertheless, when the obligation imposes reciprocal
prestations upon the parties, the fruits and interests during the pendency
of the condition shall be deemed mutually compensated. If the obligation
is unilateral, the debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances of the obligation it
should be inferred that the intention of the person constituting the same
was different.
In obligations to do and not to do, the courts shall determine, in each
case, the retroactive effect of the condition that has been complied with.
First sentence:
The first sentence means that once the condition
has been fulfilled, the obligation becomes effective
to the day it was constituted.
Example:
J in 2004 promised to sell to M his land provided
that M passes the bar in 2006. M passed the bar in
2006. It is as if M was entitled to the land
beginning 2004. Therefore any donation or
mortgage made by M in 2004 (before passing) will
be considered valid.
No Retroactive Effects as to Fruits and
Interests
a.)In unilateral obligations, debtor gets the
fruits and interests.
Example:
In 2005, A promised to give his land to B,
if the latter passes the bar in 2006. If the
condition is fulfilled, A does not have to
give the fruits for the period of 1 year.
b.) In reciprocal obligations, the fruits and
interests during the pendency of the condition
shall be deemed to compensate each other.
Example:
In 2005, A agreed to sell B his land and B agreed
to pay if C passes the bar of 2006. C passed. A
must now give the land, and B must pay.
The fruits of the land for the one-year period will
remain with A, while B will keep the 6% legal
interest on his money.
Different Kinds of Obligation :
Pure and Conditional

ART. 1188
The creditor may, before the fulfillment of
the condition, bring the appropriate
actions for the preservation of his right.
The debtor may recover what during the
same time he has paid by mistake in case
of a suspensive condition.
 Bring appropriate actions" means to sue in
court. The reason is that if the creditor is not
allowed to take the appropriate actions, there is
a danger that he will receive nothing, as when
the object is deliberately destroyed, or hidden,
or alienated.
Example:
Phil. Long Distance Telephone Co. v. Jeturian

FACTS: The Phil. Long Distance Telephone Co. operated a pension plan prior
to the last Pacific War, whereby, subject to certain conditions (such as
age and length of service), employees who retire would be given pensions.
After the war, the plan was abolished because of losses sustained during
the Japanese occupation.

ISSUE: Pending fulfillment of the conditions (such as the employees

service), do the employees have any right with respect to the pension
plan?

HELD: Pending fulfillment of the conditions, the employees have a right in

expectancy, which the law protects. Hence, under Art. 1188, appropriate
actions may be taken by them before fulfillment of said conditions.
Second paragraph:
What was paid by mistake may be recovered
because the condition may not materialize
yet. If the condition is not fulfilled, there
should be a recovery (for this would be unjust
enrichment).
The debtor is also entitled to fruits or legal
interest if the creditor knew that payment was
being made prior to the fulfillment of the
condition.
Different Kinds of Obligation :
Pure and Conditional

ART. 1189
When the conditions have been imposed with
the intention of suspending the efficacy of an
obligation to give, the following rules shall be
observed in case of the improvement, loss or
deterioration of the thing during the pendency
of the condition:
Lost:
(1) If the thing is lost without the fault of the debtor, the
obligation shall be extinguished;
Example:
A promised to give B his car if B passes the bar. Pending the
results of the bar exams, the car is destroyed by a fortuitous
event, without any fault at all on the part of the debtor. When B
passes the bar, does A have to give B anything?

ANS: No, A does not have to give B anything. If the thing is lost
without the fault of the debtor, the obligation shall be
extinguished. The reason is that as a general rule, no one should
be liable for a fortuitous event unless otherwise provided by law
or contract.
(2) Fault of the debtor:
Suppose the loss occurred through the
fault of the debtor, is the debtor
liable?
ANS: Yes. If the thing is lost through
the fault of the debtor, he shall be
obliged to pay damages.
Deteriorates:
(3) When the thing deteriorates without the fault of the
debtor:
Suppose pending the fulfillment of the suspensive condition,
the object, say a particular car, deteriorates without the fault
of the debtor, is the debtor bound to make up for the
depreciation, or should the creditor bear the deterioration
suffered?

ANS: In such a case, the creditor will have to suffer the

deterioration or impairment. The law says: When the thing
deteriorates without the fault of the debtor, the impairment
is to be borne by the creditor.
(4) Suppose the thing deteriorates
through the fault of debtor?
ANS: The creditor here may choose
between:
1) Rescission (or cancellation of the
agreement or obligation), plus
damages; or
2) Or fulfillment of the obligation
(even if there has been deterioration)
Improved:
(5) Suppose the thing is improved by nature or by
time, who gets the benefit of the improvement?

ANS: The creditor gets the benefit. If the thing is

improved by its nature or by time, the
improvement shall inure (go) to the benefit of the
creditor. The reason for this is to compensate
the creditor who would suffer in case, instead of
improvement, there would be deterioration without
the fault of the debtor.
(6) Suppose the thing has improved, not
through time or by its nature but through the
expense of the debtor, what will be the rights
of said debtor?

ANS: The debtor will have the rights granted to

a usufructuary for improvements on a thing
held in usufruct. (Usufruct is the right to the
enjoyment of the use and the fruits of a
thing.)
(1)If the thing is lost without the fault of the debtor,
the obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor,
he shall be obliged to pay damages; it is
understood that the thing is lost when in perishes,
or goes out of commerce, or disappears in such a
way that its existence is unknown or it cannot be
recovered.
(3) When the thing deteriorates without the fault of
the debtor, the impairment is to be borne by the
creditor.
(4) If it deteriorates through the fault of the
debtor, the creditor may choose between the
rescission of the obligation and its fulfillment,
with indemnity for damages in either case;
(5) If the thing is improved by its nature or by
the time, the improvement shall inure to the
benefit of the creditor:
(6) If it is improved at the expense of the
debtor, he shall have no other right than that
granted to the usufructuary.
Different Kinds of Obligation :
Pure and Conditional
ART. 1190
When the conditions have for their purpose the extinguishment of
an obligation to give, the parties, upon the fulfillment of said
conditions, shall return to each other what they have received.
In case of loss, deterioration or improvement of the thing, the
provisions which, with respect to the debtor, are laid down in the
preceding article shall be applied to the party who is bound to
return.
As for obligations to do and not to do, the provisions of the second
paragraph of Article 1187 shall be observed as regards the effect
of the extinguishment of the obligation.
 When Resolutory Condition Is Fulfilled, the obligation is
extinguished and because the obligation had been
extinguished and considered to have had no effect, the
parties should restore to each other what they have
received.
Example:
A gave B a parcel of land on the condition that B will never
go to the casino. A month later, B went to the casino. What
happens to As obligation?
ANS.: As obligation is extinguished, and therefore it is as if
there never was an obligation at all. B will therefore have to
return both the land and the fruits he had received thereform
from the moment A had given him the land.
Paragraph 2:
The rules given in Art. 1189 will
apply to whoever has the duty to
return in case of the loss,
deterioration, or improvement of the
thing.
Different Kinds of Obligation :
Pure and Conditional

ART. 1191
The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply
with what is incumbent upon him.
The injured party may choose between the fulfillment
and the rescission of the obligation, with the payment
of damages in either case. He may also seek rescission,
even after he has chosen fulfillment, if the latter should
become impossible.
 The court shall decree the
rescission claimed, unless there be
just cause authorizing the fixing of a
period.
This is understood to be without
prejudice to the rights of third
persons who have acquired the thing,
in accordance with Articles 1385 and
1388 and the Mortgage Law.
Reciprocal Obligations:
- Refers to obligations where two
parties are reciprocally obliged to do
or give something. The cause must
be IDENTICAL and the obligations
should arise simultaneously. (ex.
Contract of Sale)
Right to Rescind:
The power to rescind, as used in this Article,
means the right to cancel (or resolve) the
contract or reciprocal obligations in case of
non-fulfillment on the part of one.
Example:
In a contract of sale, the buyer can rescind if
the seller does not deliver, or the seller can
rescind if the buyer does not pay. (This is all
right for this is a reciprocal obligation.)
Choice by the Injured Party:
The injured party may choose between:
1) fulfillment (specific performance) (plus damages);
2) or rescission (plus damages).

The right is not conjunctive, that is, the plaintiff cannot ask for
BOTH remedies. Thus, if the plaintiff elects fulfillment of a
reciprocal obligation, rescission thereof may not be declared at
the same time.

The injured party who has elected fulfillment may, if fulfillment

be impossible, still ask for rescission (provided that rescission is
otherwise proper). The rule is vice-versa, provided the court has
not yet given a final judgment.
Different Kinds of Obligation :
Pure and Conditional

ART. 1192
In case both parties have committed a breach of
the obligation, the liability of the first infractor
shall be equitably tempered by the courts. If it
cannot be determined which of the parties first
violated the contract, the same shall be deemed
extinguished, and each shall bear his own
damages.
 The first one is fair to both parties because
the second infractor also derived or thought he
would derive some advantage by his own act or
neglect.

The second rule is likewise just, because it is

presumed that both at about the same time
tried to reap some benefit.
Different Kinds of Obligation :
Obligations with a Period
ART. 1193
Obligations for whose fulfillment a day certain has been fixed,
shall be demandable only when that day comes.
Obligations with a resolutory period take effect at once, but
terminated upon the arrival of the day certain.
A day certain is understood to be that which must necessarily
come, although it may not be known when.
If the uncertainty consists in whether the day will come or not,
the obligation is conditional, and it shall be regulated by the
rules of the preceding section.
Different Kinds of Obligation :
Obligations with a Period

ART. 1194
In case of loss, deterioration or
improvement of the thing before the
arrival of the day certain, the rules in
Article 1189 shall be observed.
Different Kinds of Obligation :
Obligations with a Period

ART. 1195
Anything paid or delivered before the
arrival of the period, the obligor being
unaware of the period or believing that
the obligation has become due and
demandable, may be recovered, with
the fruits, and interests.
Different Kinds of Obligation :
Obligations with a Period

ART. 1196
Whenever in an obligation a period is
designated, it is presumed to have been
established for the benefit of both the creditor
and the debtor, unless from the tenor of the
same or other circumstances, it should appear
that the period has been established in favor
of one of the other.
Different Kinds of Obligation :
Obligations with a Period

ART. 1197
If the obligation does not fix a period, but from its nature and
the circumstances it can be inferred that a period was
intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it
depends upon the will of the debtor.
In every case, the courts shall determine such period as may
under the circumstances have been probably contemplated by
the parties. Once fixed by the courts, the period cannot be
changed by them.
Different Kinds of Obligation :
Obligations with a Period

ART. 1198
The debtor shall lose every right to make use of the period:
(1) When after the obligation has been contracted, he becomes insolvent,
unless he give 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.
 Different Kinds of Obligation :
Alternative Obligations

Kinds of obligations according to the number of prestations:

1. Simple only one prestation
2. Compound several prestations
a. Conjunctive several prestations are due but all must
be performed
EX.
D is to give C a specific ring, a specific watch and a
specific bracelet.
b. Distributive one or more prestations is due
Different Kinds of Obligation :
Alternative Obligations

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.
ART. 1200
The right of choice belongs to the
debtor, unless it has been expressly
granted to the creditor.
The debtor shall have no right to
choose those prestations which are
impossible, unlawful or which could not
have been the object of the obligation.
Alternative Obligations
various prestations are due but the
performance of one of them is sufficient
Ex.
D is obliged to give a specific ring, a specific
watch or a specific bracelet to C.

Creditor cannot be compelled to receive part of

one and part of the other
Alternative Obligations

General Rule:
The right of choice belongs to the debtor.
Limitations:
a. Right has been EXPRESSLY given to the creditor
b. He cannot choose prestations which are
impossible, unlawful or which could not have
been the object of the obligation.
Examples:
a. Impossible
S promised to deliver to B 10 sacks of rice, or a Rolex watch,
or soil from Jupiter.
b. Unlawful
S obliged himself to deliver to B a kilo of shabu, or a horse, or
a diamond ring, or to kill C.
c. Could not have been the object of the obligation
D borrowed from C P30,000. It was agreed that D would give C
his horse, or P30,000, or his German piano. Now D has 2
horses, a race horse worth P30,000 and a horse for calesa that
is worth P5,000.
Different Kinds of Obligation :
Alternative Obligations

ART. 1201
The choice shall produce no effect
except from the time it has been
communicated.
Effect of notice
a. No notice of choice alternative
b. Notice of choice given to creditor
simple
Is the concurrence of the creditor to
the choice made by the debtor
required?
No, because as a general rule, the
choice belongs to the debtor.
Different Kinds of Obligation :
Alternative Obligations

ART. 1202
The debtor shall lose the right of choice when
among the prestations whereby he is
alternatively bound, only one is practicable.
Ex.
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.
Different Kinds of Obligation :
Alternative Obligations

ART. 1203
If through the creditors acts, the
debtor cannot make a choice
according to the terms of the
obligation, the latter may rescind the
contract with damages.
Ex.
D borrowed from C P10,000. It was
agreed that instead of P10,000 D
could deliver item A, item B or item
C.
Through the fault of C, item A was
destroyed. What are the remedies
available for D?
a. Rescission
D must return the amount of P10,000 with
interest. C, in turn, must pay D the value
of item A plus damages.

b. Choose from remaining prestations

D may choose from the remaining items
with a right to recover the value of item A
with damages.
Different Kinds of Obligation :
Alternative Obligations

ART. 1204
The creditor shall have the 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 of object of obligation (Right of choice
belongs to debtor)
a. If only one or some are lost through a fortuitous
event or through the debtors fault, the debtor
may deliver any of the remainder, or that which
remains. NO LIABILITY
b. If all are lost through a fortuitous event, the
obligation is extinguished.
c. If all are lost through the debtors fault, the
debtor shall pay the value of the last thing that
was lost plus damages.
 D is to give C a specific ring, a specific
bracelet or a specific wristwatch.
a. The ring is lost through fortuitous event. What
is the obligation of D?
D may deliver the bracelet or wristwatch. D
have no liability for damages.
b. The ring is lost through the fault of D. What is
the obligation of D?
D may deliver the bracelet or wristwatch. D
have no liability for damages.
c. The ring and the bracelet are lost through fortuitous
event or through the fault or D. What is the obligation of
D?
The obligation of D is converted into a simple obligation
to deliver the wristwatch. D has no liability for damages.
d. All things are lost due to fortuitous event. What is the
obligation of D?
Ds obligation is extinguished.
e. The ring and bracelet are lost due to fortuitous event.
What is the obligation of D?
Ds obligation becomes simple, to deliver the wristwatch.
f. The ring, the bracelet and the wristwatch are
lost one after the other due to Ds fault. What is
the obligation of D?
D shall pay the value of the wristwatch, the
last item that was lost, plus damages.
g. The ring and the bracelet are lost due to Ds
fault. What is the obligation of D?
The obligation of D becomes simple, to
deliver the wristwatch.
Different Kinds of Obligation :
Alternative Obligations

ART. 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.
Different Kinds of Obligation :
Alternative Obligations
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 choose from among the
remainder, or that which remains if only one subsists;
(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 right to damages;
(3) 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.
The same rule shall be applied to obligations to do or not to do in case one,
some or all of the prestations should become impossible.
 D is to give C a specific ring, a specific bracelet
or a specific wristwatch. The parties agreed that C
shall have the right of choice.
a. The ring is lost through fortuitous event. What is
the obligation of D?
To deliver either the bracelet or the wristwatch
at the choice of C.
b. All are lost through fortuitous event. What is the
obligation of D?
Ds obligation is extinguished.
c. The ring and the bracelet are lost through fortuitous
event. What is the obligation of D?
D shall deliver the wristwatch which is the remaining
item. The obligation becomes simple.
d. The ring and the bracelet are lost due to the fault or D.
What is the obligation of D?
C can choose from the payment of the price of the ring or
the bracelet with damages, or the delivery of the
wristwatch.
e. All are lost due to the fault of D. What is the obligation of
D?
C may claim the price of any of them plus damages.
Different Kinds of Obligation :
Alternative Obligations

ART. 1206
When only one prestation has been agreed upon, but
the obligor may render another in substitution, the
obligation is called facultative.
The loss 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.
Facultative Obligation
one prestation has been agreed upon but may
be substituted
Ex.
I will give you my piano but I may give my
LCD television set as a substitute.
Rules in case of loss of principal thing and
substitute
Before substitution
a. Principal thing
1. If lost due to fortuitous event, the obligation is
extinguished.
2. If lost due to the debtors fault, debtor shall pay for
damages.
b. Substitute
The loss of the substitute, whether through fortuitous
event or debtors fault imposes no additional obligation
on the debtor because it is not yet due.
Example:
I will give you my only car but I may give my house as a
substitute.
a. The car was lost due to fortuitous event. What is my
obligation?
My obligation is extinguished.
b. The car was lost due to my fault. What is my obligation?
I am liable for damages.
c. The house was lost due to fortuitous event or my fault.
I am not liable since the house is not due.
 After substitution
a. Principal thing
The loss of the principal thing whether through
fortuitous event or debtors fault imposes no
additional obligation on the debtor because the thing
due is already the substitute.
b. Substitute
1. If lost through a fortuitous event, the obligation is
extinguished.
2. If lost due to debtors fault, the debtor shall pay
damages.
Example:
I will give you my only car but I may give my house as a
substitute. After the substitution:
a. The car was lost due to fortuitous event or through my
fault. What is my obligation?
I am not liable since my obligation is to give the house.
b. The house was lost due fortuitous event. What is my
obligation?
My obligation is extinguished.
c. The house was lost due to my fault. What is my
obligation?
I am liable for damages.
Difference
Alternative
Several prestations are due, but
performance of one is sufficient to
extinguish the debt.
If there are void prestations, the
others may still be valid, hence the
obligation remains.
The right of choice is with the debtor,
unless expressly given to creditor.
If all prestations are impossible
except one, that which is possible
must still be given.
Facultative
Only one prestation, the
principal obligation, is due.
if the principal obligation is
void, the debtor is not required
to give the substitute.
The right of choice belongs to
the debtor only.
If the principal obligation is
impossible, the debtor is not
required to give the substitute.
Different Kinds of Obligation :
Joint and Solidary

ART. 1207.
The concurrence of two or more creditors or of two 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 prestations. There is a solidary liability only when the
obligation expressly so states, or when the law or the nature of the
obligation requires solidarity. (1137a)

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 debts being considered distinct from one another,
subject to the Rules of Court governing the multiplicity of suits. (1138a)
Different Kinds of Obligation :
Joint and Solidary

Kinds of obligation according to

the number of parties.

Individual obligation
Collective obligation
 A joint obligation is one where the whole
obligation is to be paid or fulfilled
proportionately by the different debtors
and/or is to be demanded proportionately
by the different creditors. (Art. 1208.)
A solidary obligation is one where each
one of the debtors is bound to render,
and/or each one of the creditors has a right
to demand entire compliance with the
prestation. (Art. 1207.)
Kinds of solidarity.

(1) According to the parties bound

(a) Passive solidarity
(b) Active solidarity
(c) Mixed solidarity
(2) According to source
(a) Conventional solidarity
(b) Legal solidarity
(c) Real solidarity
ART. 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. (1139)

Joint indivisible obligation.

The obligation is joint because the parties are merely
proportionately liable. It is indivisible because the object or
subject matter is not physically divisible into different parts.
ART. 1210.
The indivisibility of an obligation does not
necessarily give rise to solidarity. Nor does
solidarity of itself imply indivisibility.

Indivisibility distinguished from solidarity.

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.
Kinds of solidary obligation according to the legal tie.

(1) Uniform. when the parties are bound by the same

stipulations or clauses; or

(2) Non-uniform or varied. when the parties are not

subject to the same stipulations or clauses.

Solidarity not affected by diverse stipulations.

Joint obligation on one side, solidary on the other.

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.

Act of solidary creditor

useful/prejudicial to others.
ART. 1213.
A solidary creditor cannot
assign his rights without the
consent of the others.

Assignment by solidary creditor of

his rights.
Effect of unauthorized
assignment.
 ART. 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.

Payment to any of the solidary

creditors
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
provisions of Article 1219.
The creditor who may have executed any of
these acts, as well as he who collects the
debt, shall be liable to the others for the
share in the obligation corresponding to
them. (1143)
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 not been
fully collected. (1144a)
Article 1217 Payment made by one of the solidary debtors
extinguishes the obligation, If two or more solidary debtos
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 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. (1145a)
Effects of payment by a solidary
debtor
1. Between the solidary debtors and
creditors
2. Among the solidary debtors
3. Among the solidary creditors
Article 1218 Payment by a
solidary debtor shall not entitle
him to reimbursement from his
co-debtors if such payment is
made after the obligation has
prescribed or become illegal.
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
anyone of them before the
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.
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 incurred in delay through the judicial or
extra-judicial demand upon him by the creditor, the
provisions of the preceding paragraph shall apply.
(1147a)
Rules in case thing has been lost or
prestation has become impossible
1. Loss is without fault and before
delay
2. Loss is due to fault on the part of
the solidary debtor
3. Loss is without fault but after delay
Article 1222 A solidary debtor may, in
actions filed by the creditor, avail himself
of all defenses which are derived from the
nature of the obligation and of those
which are personal to him, or pertain to
his own share. With respect to those
which personally belongs to others, he
may avail himself thereof only as regards
that part of the debt for which the latter
are responsible. (1148a)
Defenses available to a solidary debtor
1. Defenses derived from the nature of
the obligation
2. Defenses personal to, or which
pertain to share of, debtor sued
3. Defenses personal to other solidary
debtors
Different Kinds of Obligation :
Divisible and Indivisible Obligations

ART. 1223
The divisibility or indivisibility of
the things that are the object of
obligations in which there is only one
debtor and only one creditor does
not alter or modify the provisions of
Chapter 2 of this Title.
Definition
1. Divisible obligation - one whose object, in its
delivery or performance, is capable of partial
fulfillment

2. Indivisible obligation one whose object, in its

delivery or performance, is not capable of
partial fulfillment
Ex.
D agreed to pay C P10,000 in four equal monthly installments.
D agreed to pay C P10,000 on December 1, 2016.

1st Divisible, 2nd Indivisible

S obliged himself to deliver to B a specific car on Dec. 1.

S obliged himself to deliver one-half of the car on Dec. 1 and
the other half on Dec. 5.

1st Indivisible, 2nd - Indivisible