Alternative Obligations,

Joint and Solidary Obligations,

Divisible and Indivisible Obliga
tions and Obligations with a Pe
nal Clause
 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.
 CONCEPT OF ALTERNATIVE
OBLIGATION:
In an Alternative Obligation, there are two
or more prestations due and the debtor
who, as a general rule has the right of
choice or selection, may choose or select
which prestation he will deliver to the
creditor. On the delivery of the chosen
prestation, his obligation is extinguished.
 Example:
Mendoza to deliver to Cruz a Hitachi Refrigerator or a
Sanyo Electric Fan or a Toshiba Stereo Set.

There are 3 prestations in the problem and Mendoza

may choose any of the 3. Suppose he chooses the
Hitachi Refrigerator and delivers it to Cruz, the obligation
is then extinguished.

However, Cruz, the creditor, cannot be compelled to

accept part of each prestation, even if the prestations are
divisible, unless there is an expressed stipulation to the
contrary.
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.
 Note:
As a general rule, the right of choice or selection
belongs to the debtor.

Exceptions:
1. When the obligation expressly stipulates that
the right of choice or selection is given to the
creditor.
2. When the contracting parties expressly give
to a third party the right of choice.
 Example:
A to deliver to B a Yamaha organ or an Mac PC, or a tin
of opium.

A cannot choose to deliver the tin of opium because it is

contrary to law. The inclusion of the unlawful prestation
in the Alternative Obligation does not render it null and
void as there are still two legal prestations to choose
from. Therefore, the unlawful prestation will be discarded
and Debtor A may choose either the Yamaha Organ or
the Mac PC to deliver to B, so as to fulfill his obligation.
ART. 1201 - The choice shall
produce no effect except from the
time it has been communicated.
 Note:

• Whether the right of choice or selection

belongs to the debtor or to the creditor,
it is necessary that the debtor or the
creditor, as the case maybe, must first
notify the other of the prestation chosen
or selected to be delivered.
• After the notification of the selection, the
Alternative Obligation ceases and
becomes a simple obligation.
 Example:
A to deliver to B a Mac PC or a Blackberry
Phone on December 25, 2013.
• Debtor has the right of selection and if he
chooses to give B the Mac PC, he must notify B
that he has chosen to deliver the same. After B
receives the notification, the obligation ceases to
be alternative and becomes a simple obligation
of “A to deliver to B a Mac PC on December 25,
2013”.
Art. 1202. The debtor shall lose
the right of choice when among
the prestations whereby he is
alternatively bound, only one is
practicable.
 Note:

The obligation loses its

alternative character and
becomes a simple
obligation.
Art. 1203. If through the creditor's
acts the debtor cannot make a
choice according to the terms of
the obligation, the latter may
rescind the contract with
damages.
 Note:
Rescission of contract: the cancellation of
a contract and the return of the parties to
the positions they would have had if the
contract had not been made; “rescission
may be brought about by decree or by
mutual consent”.
Art. 1204. The creditor shall have a right to
indemnity for damages when, through the fault of
the debtor, all the things which are alternatively the
object of the obligation have been lost, or the
compliance of the obligation has become
impossible.

The indemnity shall be fixed taking as a basis the

value of the last thing which disappeared, or that of
the service which last became impossible.

Damages other than the value of the last thing or

service may also be awarded.
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.
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 a 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 rules shall be applied to obligations to do or not
to do in case one, some or all of the prestations should
become impossible.
 Note:
Art. 1204 is applicable to a case when the
right of choice belongs to the debtor.

At. 1205 is applicable when the right of

choice belongs to the creditor
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.
 Example:
A debtor executed a promissory note
promising to pay his indebtedness to
the creditor at a specified date and in
case of failure to do so, he shall
execute a deed of mortgage over a
certain property belonging to him in
favor of the creditor.
Joint and Solidary Obligations
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 prestation. There is a solidary liability
only when the obligation expressly so
states, or when the law or the nature of the
obligation requires solidarity.
 Joint Obligation:
There is a concurrence of several
creditors, or several debtors, or several
creditors and several debtors, by virtue of
which, each of the creditors has the right
to demand, and each of the debtor is
bound to render, compliance with his
proportionate part of the prestation which
constitutes the object of the obligation.
 Solidary Obligation:
There is a concurrence of several
creditors, or several debtors, or several
creditors and several debtors, by virtue of
which, each of the creditors has the right
to demand, and each of the debtor is
bound to render, entire compliance with
the prestation which constitutes the object
of the obligation.
Note: There is a solidary liability only when -

1) the obligation expressly so states, or

2) when the law of the obligation requires
solidarity (e.g., responsibilities of principal,
accomplices and accessories under the Revised
Penal Code);
3) when the nature of the obligation requires
solidarity (e.g., obligations arising from torts, or
responsibilities of two or more persons guilty of
criminal liability).
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
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.
 Problem:
A, B and C executed a promissory note binding
themselves to pay P9,000.00 to X, Y and Z. The note is
now due and demandable.
a) Can the creditors proceed against A alone for
payment of the entire obligation?
b) Can X alone proceed against A, B and C for payment
of the entire obligation? Why?
c) Suppose X proceeds against A alone for payment,
how much can he collect? Why?
d) Suppose that C is insolvent, can A and B be held
liable for his share in the obligations? Why?
e) Suppose that the obligation was about to prescribe,
but X wrote a letter to A demanding for payment of the
entire debt, will this have the effect of interrupting the
running of the period of prescription? Why?
 Another problem:
X, Y and Z owe A and B
P12,000.00 in a joint obligation.
How many obligations exist in this
case? Who are the parties in
each of the obligation and for how
much? Why?
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.
 Note:
Art. 1209 talks about a joint indivisible obligation.
It has the two fundamental characteristics of a
joint obligation (i.e., no creditor can act in
representation of the others, and that no debtor
can be compelled to answer for the liability of the
others). However, if there are two or more
debtors, the fulfillment of the compliance with the
obligation requires the concurrence of all the
debtors, although for their own share. If there
are two or more creditors, the concurrence or
collective act of all the creditors, although for
their own share, is also necessary for the
enforcement of the obligation.
 Note, further:
If one of the joint debtors fails to
comply with his undertaking, the
obligation can no longer be
fulfilled and consequently, it has
been converted into one of
indemnity for damages.
Art. 1210. The indivisibility of
an obligation does not
necessarily give rise to
solidarity. Nor does solidarity
of itself imply indivisibility.
 Indivisibility vs. Solidarity:
• As to nature, ind. refers to the prestation which
constitutes the object of the obligation, while sol.
refers to the legal tie or vinculum, and
consequently, to the subjects or parties of the
obligation;
• As to requisites: Plurality of subjects or parties
to the obligation is not required in ind., while it is
indispensable in solidarity;
• As to effect of breach: In ind., the obligation is
converted to one of indemnity for damages while
in sol., the solidarity among the debtors remains
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.
 Note:
• Active solidarity – among creditors (tie or
vinculum among creditors where a creditor
possesses a character of creditor only with
respect to his share as between his other
creditors, but in relation to the debtor/s,
represents all of the creditors)
• Passive solidarity – among debtors (tie or
vinculum among debtors where a debtor
possesses a character of debtor only with
respect to his share as between his other
debtors, but in relation to the creditor/s,
represents all of the debtors) (Note: with right to
demand reimbursement from others for their
corresponding shares once payment is made)
The essence of solidarity is not
lost though the debtors or the
creditors may be solidarity
bound by different periods or
conditions
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.
 Example:
Solidarity involves mutual agency.
(Akin to the right to act for a partner in
a partnership)
A creditor can do that which is
beneficial to all of them but not
anything prejudicial.
Therefore, a creditor cannot condone
or renounce the debt of a debtor to
the detriment of the other creditors.
Art. 1213. A solidary creditor
cannot assign his rights
without the consent of the
others.
What is the effect if an assignment is made
to another creditor? What is the effect if an
assignment is made to a third person?

If made to a third person, the other solidary

creditors are not bound to recognize the
validity or efficacy of the 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.
Art. 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.
 Novation:
Novation is the change or substitution of an
obligation by another, resulting in its
extinguishment or modification, either by
changing its object or principal condition, or by
substituting another in place of the debtor, or by
subrogating a third person in the rights of the
debtor. The peculiar feature of this mode of
extinguishing obligations is that while it
extinguishes the obligation, it creates a new one
on lieu of the old.
 Compensation:
Compensation is figurative
operation of weighing two
obligations simultaneously in
order to extinguish them to the
extent that the amount of one is
covered by the amount of the
other.
 Confusion:
Confusion refers to the merger of
the qualities of creditor and debtor
in one and the same person with
respect to one and the same
obligation.
 Remission:
Remission is an act of pure liberality by
which the creditor, without having received
any compensation or equivalent,
renounces his right to enforce the
obligation, thereby extinguishing the same
either in its entirety or in part or aspect
thereof to which the remission refers.
Art. 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.
Art. 1219 referred to in Art. 1215 states:
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 remission was
effected.
Art. 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.
 Example:
Since a creditor can proceed against any
of the debtors, a guarantor (one who
assumes responsibility when the principal
cannot) cannot complain that a creditor is
proceeding after him for payment of the
entire obligation. Not may a surety (one
who makes himself primarily liable for the
performance of an obligation/undertaking)
complain that the creditor is going after
him rather than after the principal obligor.
Art. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary
debtors offer to pay, the creditor may choose which offer
to accept.

He who made the payment may claim from his co-

debtors only the share which corresponds to each, with
the interest for the payment already made. If the
payment is made before the debt is due, no interest for
the intervening period may be demanded.

When one of the solidary debtors cannot, because of his

insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co-
debtors, in proportion to the debt of each.
 Problem:
X, Y and Z solidarily owe A Php 3,000.00.
What is the effect is X pays A the whole amount?
What is the effect if X and Y each offer to pay the
whole amount? What will X or Y’s rights be with
respect to Z? Will there be any effect if
payment was made before the debt become
due? Will there be any effect if payment was
made after the debt has become due and has
earned interests?
What is the effect if Z becomes insolvent and
cannot pay?
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 or
become illegal.
Art. 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
remission was effected.
 Example:
X, Y and Z solidarily owe A Php 3,000.00 due on
February 10, 2014.
X paid the amount this morning. In the afternoon,
A condoned the share of Y in the amount of Php
1,000.00.
When X paid the amount, the obligation was
extinguished. A’s condonation of the sum of Php
1,000.00 has no more effect. X can recover
from Y his proportionate share in the obligation.
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.
Art. 1221. If the thing has been lost or if the prestation
has become impossible without the fault of the solidary
debtors, the obligation shall be extinguished.

If there was fault on the part of any one of them, all shall
be responsible to the creditor, for the price and the
payment of damages and interest, without prejudice to
their action against the guilty or negligent debtor.

If through a fortuitous event, the thing is lost or the

performance has become impossible after one of the
solidary debtors has incurred in delay through the judicial
or extrajudicial demand upon him by the creditor, the
provisions of the preceding paragraph shall apply.
 Rules:
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.
 Rules:
If the thing has been lost or if the
prestation has become impossible due
to fault on the part of any one of the
solidary debtors, 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.
 Rules:
If the thing has been lost or if the
prestation has become impossible
through a fortuitous event, after one of
the solidary debtors has incurred in
delay through the judicial or extrajudicial
demand upon him by the creditor, the
obligation is converted into one of
indemnity for damages, but the solidary
character of the obligation remains.
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
are personal to him, or pertain to his own
share. With respect to those which
personally belong to the others, he may
avail himself thereof only as regards that
part of the debt for which the latter are
responsible.
 Some defenses:
• Payment, performance, res
judicata (once a case has been
decided, the parties are barred
from raising the same issues in
court), prescription, mistake,
violence, intimidation, undue
influence or fraud
• Minority, insanity
 Problem:
A, B and C borrowed Php 12,000.00 from X on June 1,
2012. They executed a promissory note binding
themselves jointly and severally to pay the obligation on
June 1, 2013. For failure to pay, X bought an action
against A for payment of the entire obligation plus
interests. A interposed the following defenses: (1) that B
was only a minor at the time of the celebration of the
contract and that such fact was known to X, and (2) that
X had granted an extension of two years to C within
which to pay.
1. Can A avail himself of these defenses?
2. Granting that A can avail himself of these defenses,
what would be the effect upon his liability, assuming that
he can establish both defenses by competent evidence?
Reasons.
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 (Nature and Effect
of Obligations) of this Title.
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.
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 be
physically divisible, an obligation is indivisible if so
provided by law or intended by the parties.
In obligations not to do, divisibility or indivisibility shall be
determined by the character of the prestation in each
particular case.
 True test of divisibility:
Whether the obligation is
susceptible of partial performance
or not. If susceptible, then it is
divisible, if not, then it is
indivisible. Note that the purpose
of the obligation is the controlling
circumstance.
Obligations with a 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.
 Note:
A penalty clause is an accessory
undertaking –
1. To provide for damages in case of
breach, and
2. A sort of guaranty for the faithful
performance of the obligation.
 Kinds of Penal Clauses:
1. Subsidiary or Alternative – when only the
penalty can be demanded in case of
non-performance of the obligation;
2. Cumulative or Joint – when both the
principal obligation and the penalty can
be enforced simultaneously when there
is non-performance.
 Sources of Penal Clauses:

1. Law – when the law provides the penal

sanction for non-compliance with the law.
2. Contract – when the contract itself
provides the penalty to be imposed when
there is breach or non-fulfillment of the
contract.
Note that penalty is enforceable only when
the non-fulfillment of the obligation is due
to the debtor’s fault.
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.
 Note:
• The debtor has to fulfill his obligation. He cannot
exempt himself from the performance of the
obligation by paying the penalty, unless 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.
Art. 1228. Proof of actual damages
suffered by the creditor is not
necessary in order that the penalty
may be demanded.

Note: It is sufficient that there is a

breach of contract and the debtor has
the burden of proof to show that the
breach was not due to his fault or to
fraud, if he wants to escape payment
of penalty.
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.
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.
 Example:
A to deliver to B a kilo of shabu on December 25,
2013. It is mutually agreed that if there is failure to
deliver the shabu on maturity, A will pay a fine of
Php 1,000,000.00.

The principal obligation is null and void ab initio

because the prestation is against the law and,
therefore, contrary to law. Then the penalty clause
is also null and void because there is actually
nothing to be penalized as the principal obligation is
void. Note however, that if the penal clause is the
one that is null and void, the principal obligation
remains valid and enforceable.