Article 1199

A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking. (1131)
Kinds of Obligation according to object:
1.Simple Obligation – there is only one object
2.Compound Obligation – two or more prestations, it may be:
Kinds of Distributive Obligation:
Alternative Obligation – debtor is alternatively bound with various prestations that are due but the performance of one of them is sufficient to
extinguish the obligation.
[ill. John borrowed P50,000 cash from Shiela. It was agreed that John has the alternative to pay Shiela either in P50,000 cash or an Iphone 6Splus,
or a 40” LED TV. ]
2.1 Conjuctive Obligation – w/ several prestations and all of them are due
2.2 Distributive Obligation – two or more of the prestations is due
Kinds of Distributive Obligation:
Facultative Obligation – debtor is bound to perform one prestation is due to deliver one thing with a reserved right to choose another prestation or
thing as substitute for the principal.
[ill. Gigi, upon failure to pay her debt to Carlo in 30 days, will mortgage her land to secure her debt which shall be payable in 90 days ]
Creditor cannot be compelled to receive parts of the different prestations (par2)
In the 1st example (Alternative Obligation) , Creditor cannot be compelled to receive part of each of the choices (Cash, TV, CP) for the satisfaction of
the obligation. However, if the creditor agrees to receive portion of each, there is no prohibition. There is novation in the prestation.
Article 1200
The right of choice belongs to the debtor, unless it has been expressly granted to the creditor.
The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not have been the object of
obligation.
Ang karapatang pumili ay napapabliang sa nagpautang, maliban na lamang kung ito ay ipinapahayag at pinapayagan ito ng nagpautang.
Ang nangutang ay walang karapatan na pumili sa mga prestasyon kung saan ay napaka imposible, labag sa batas o kung saan ay hindi naman
bagay ng obligasyon.
Agoncillo vs. Javier
Facts: Three debtors got a loan from Marino and bound themselves to pay P2,7000.00. The loan was secured by a mortgage of a house and lot. It
was agreed that if upon the maturity of the debt, the debtors are insolvent, they would cede the house and the lot to Marino. If the house and lot
would not be sufficient to cover the debt, the balance would be secured by the mortgage of 4 parcels of land belonging to one of the debtors. The
titles were delivered to Marino. As the debt was not paid, Marino sued the debtors.
Issue: Whether or not the stipulation of the parties is valid?
Held: This stipulation is valid. It is simply an alternative obligation, which is expressly allowed by the law. The agreement to convey the house and
lot at an appraised valuation in the event of failure to pay the debt in money at its maturity is, however, in our opinion perfectly valid. It is simply
an undertaking that if the debt is not paid in money, it will be paid in another way. As we read the contract, the agreement is not open to objection
that the stipulation is a pacio comisorio. It is not an attempt to permit the creditor to declare a forfeiture of the security upon the failure of the
debtor to pay the debt of maturity. It is simply provided that if the debt is not paid in money it shall be paid in another specific way by the transfer
of the property at a valuation. Of course such an agreement unrecorded, creates no rights in rem, but as between the parties, it is perfectly valid,
and specific performance by its terms may be enforced unless prevented by the creation of superior right in favor of the third person.
Article 1201
The choice shall produce no effect except from the time it has been communicated. (1133)
Ang piniling prestation ay hindi magkakabisa maliban sa oras na it ay ipinaalam.
Discussion:
The notice of selection or choice of prestation may be communicated in writing, verbally, impliedly or by any other unequivocal means.
Effects of choice or selection:
1. The obligation will be limited only to the chosen or selected prestation with all the natural consequences arising from it;
2. The choice is irrevocable, otherwise, the other pary might be exposed to damages which may arise from costly preparation in waiting for the
performance of the announced prestation.
The performance is not binding if the debtor simply performed his choice of prestation without announcing it to the creditor. The debtor can
recover what he had delivered, performed, or paid, under the law on quasi-contracts.
The law grants the debtor to make the choice unless the creditor is expressly granted the said right. When making the choice, the law does not
require that the choosing party first secure the conformity of the other party, because that will only frustrate the clear intention of the law and the
alternative nature of the obligation.
Effect of delay in making a selection
The delay in making a selection does not constitute to losing the selection. However, if before any choice is made, a case is filed in court, an issue
may arise regarding the prestation that will be enforce. The Code is silent on the point of who will make the selection, although there are three
possibilities:
the court will make the choice;
the court may order the debtor, or
the creditor will make the choice within a certain period.
Moreove, when there is a delay in the selection of the prestation, the fair resolution is to punish the one who is responsible to exercise the right of
choice and caused the delay. If the debtor caused the dealy, the courd should authorize the creditor to make the choice because this gives the
impression that the debtor has waived his right by causing the delay. The same rule applies if it is the creditor who incurred the delay in making
the choice or selection.
Article 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. (1149)
Joint Obligation vs. Solidary Obligation
The distinction between Joint and Solidary Obligations are very important in civil law. The following shows the basic differences between the two
obligations:

JOINT OBLIGATION - it is one wherein a debtor is obliged to pay a portion of the full amount of debt that corresponds only to his share. Likewise,
the joint creditor can only demand a portion of the full amount that corresponds to his share.

For an instance, A and B contracted a loan amounting to P10 million from X. A received a share amounting to P6 million while B received an amount
equal to P4 million. When the obligation came due, A is only obliged to pay an amount corresponding to his share of the loan, which is P6 million.

SOLIDARY OBLIGATION - refers to a kind of obligation wherein either one of the creditors has the right to demand full compliance of the obligation
from either one of the solidary debtors.

For an instance, in a loan contract, A and B borrowed an amount equal to P10 million and agreed to pay the said amount solidarilly to X and Y, who
are also solidary creditors. A received P6 million while B received P4 million. When the contract came due, either X or Y can compel any of A and B
to pay the whole amount of P10 million, regardless of their share. The one who paid the whole amount will just reimburse the share received by
the other debtor.

Any solidary debtor may be compelled to pay the whole amount, not only his share, whether or not he benefitted from the said debt. Solidary
obligation is never presumed. The main reason for this is that solidarity gives huge right to the creditor to demand full compliance of the obligatiom
from any of the debtors.

The use of the term "solidary" is not required by law to make a contract or agreement solidary. It is enough that the parties include other terms
which also mean the same thing, such as "jointly and severally".

The three sources of solidarity are: (1) by law; (2) by stipulation of the parties to the contract, and; (3) by the nature of the obligation.
Article 1227:
X promises to construct a house for Y. The contract carried a penalty that in case of breach. X would have to pay a penalty of P100,000
Article 1227
Divisibility or indivisibility in obligation not to do.
Principal obligation
- one which can stand by itself and does not depend for its validity and existence upon another obligation.
Accessory obligation
- one which is attached to a principal obligation and, therefore, cannot stand alone
(1) Obligations to give definite things.
(2) Obligations which are not susceptible of partial performance.
(3) Obligation provide by law to be invisible even if things or service is physically divisible.
(4) Obligations intended by the parties to be
indivisible even if things or service is physically
divisible.
Article 1228:
Purposes of penal clause:
Article 1226
Example:
Divisible and indivisible obligation - Penal CLause
Obligations deemed indivisible.
A obliged himself to b not to sell cigarettes in his store for one(1) year
In obligation with a penal clause, the penalty shall substitute the indemnity for damages and the payment on interests in case of non-compliance, if
there is no stipulation to the contrary. Nevertheless, the 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 enforce only when it is demandable in accordance with the provision of this Code.
Example:
The contract carried a penalty that in case of breach. X would have to pay a penalty of P100,000
2) Penalty in iniquitous or unconscionable
Example:
When penalty may be reduces by the courts.
S agreed to deliver B (2) grams of prohibited drugs. The contract carries a penal clause that incase of non-compliance S should pay penalty P10,000
1) To insure their performance of the obligation
2) To substitute a penalty for indemnity
for the damages
3) to punish the debtor for non-
fulfillment of the obligation
The general principle that the accessory follows the principal and not vice versa
A & his company engaged in retail business (Buying & Selling) of books, it suffered financial trouble, to save the company creditors agreed to
convert their credit into shares of stocks.
B&C is the major stockholder shares and they both agree that both of them sell or transfer their holding in the company until after 1 year.
they both agreed that P50,000 penalty incase of violation to their agreement.
Article 1229:
Penal Clause
As the general rule: “ the creditor cannot demand the fulfillment of the obligation and the satisfaction of the penalty at the same time”
Article 1225:
As s general rule, an obligation is not deemed performed unless the thing or service in which it consist has been COMPLETELY delivered or
rendered.
A joint indivisible obligation gives rise to the indemnity for the damages from the time anyone of the debtors does not comply with this
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.

Effects of nullity of the principal obligation.

Obligation with a penal clause
Divisible obligation
Example:
A, B and C (Debtor)
D (Creditor)
Car (Object)
P 240,000 (Value)
Section 6. – Obligation with a Penal Clause
Subsidiary or Alternative Penal Clause
- when only the penalty can be
enforced.
Joint or Cumulative Penal Clause
- when both the principal obligation
and the penal clause can be
enforced.
(1) Obligation which have for their object the execution of a certain number of days of work.
(2) Obligation which have for their object the accomplishment of work by metrical units.
(3) Obligation which by their nature are
susceptible of partial performance.
PERFORMANCE
Effects of nullity of the penal clause.
Kinds of Penal Clause
The creditor may ask for the penalty or require specific performance. The remedies are alternative and not cumulative nor successive, subject to
the exception that the penalty may be enforced if after creditor has decided to require fulfillment, the same should become impossible without his
fault. If there was a fraud on the part of the debtor. the creditor may recover the penalty as well as the damages for non-compliance
Principal and Accessory Obligation
- An accessory obligation attached to the principal obligation to assure greater liability in case of breach, the obligation is not fulfilled, or is partly or
irregularly complied with.
Here, the penalty may be reduce even of there is NO PERFOMANCE AT ALL.
As to Effect:
Where there is no performance
Article 1230:
The primary purpose of the penalty is to urge the debtor to the PERFORMANCE of the main obligation.
A) If B selected fulfillment of the obligation
B) If B choose to received the penalty
C) If non-fulfillment of the obligation is
attributable to fraud
When creditor may recover damages?
Article 1224
The character of the prestation in each particular case shall determine their divisibility or indivisibility
If S did not comply with his obligation, B can choose between requiring fulfillment of the principal obligation
Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded.
Example:
Principal Obligation
Composetory Penal Clause
-When the penalty takes place for
damages.
Punitive Penal Clause
- when the penalty is imposed merely as
punishment of breach.
X promises to construct a house for Y.
Example
Accessory Obligation
Once the obligation is fulfilled, this purpose is attained and therefore, there is no need for demanding the penalty.
The exception arises when "this right has been cleared granted" by the creditor. Under Article 1227, the general rule is that a penal clause is
subsidiary not joint
Note: Proof of actual damage suffered by the creditor is not necessary in order that the penalty may be enforced (Art 1128)
S delivered the product although its already delay then B still accepted the product
As to Origin:
1) When their is partial or irregular performance
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.
> When so stipulated by the parties
> When the debtor refuses to pay the penalty; in which case creditor may recover legal interest on
>When the obligor is guilty of fraud in fulfillment of the obligation
S is requires to deliver to B certain products; otherwise, he shall pay a penalty in the amount of P10,000
Iniquitous - meaning unfair behaviour;
Unconscionable - meaning unreasonably excessive;
not right
Previous example, let's think that the house is only P100,000 and the agreement that every delay, X must pay a penalty P5,000.
Penal Clause Presumed
Subsidiary
If the principal obligation is void, the penal clause is likewise void.
Example:
Where there is performance
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.
The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even of there
has been no performance, the penalty may also be reduce by the courts if it is iniquitous or unconscionable.
Legal Penal Clause
- when it is provided by the law
Conventional Penal Clause
- when it is provided for by the parties
X agreed to construct A house for Y with in 4 months for P1,000,000 according to the specification, in case of non-compliance X will pay 100k
X practically completed the construction of house after 4months
As to its Purpose:
Obligations deemed divisible
Example:
S agreed to sell merchandise to B. It is provided in their agreement that in case of default, S will deliver a prohibited drug a penalty.

Divisibility – is the susceptibility of an obligation to be performed partially [ill. Obligation to deliver 100 pcs watches of a particular brand and
quality]
Indivisibility – is the non-susceptibility of an obligation for partial performance realizing the purpose of which the obligation seeks to obtain. [ill.
Obligation to deliver a particular car]
Classification of Divisibility
1.Qualitative Division – divisibility depends on the quality of the thing; not homogenous (e.g. Inheritance – real & personal property)
2.Quantitative Division – divisibility depends on the numbers of the things; homogeneous (e.g. 1000 hectares of land can divided into how many
parts)
3.Ideal Division – non-material divisibility; only mental & intellectual (e.g. Corporation).
Kinds of Indivisibility
1.Legal Indivisibility – indivisibility provided by law
2.Conventional Indivisibility – indivisibility agreed upon by both parties
3.Natural Indivisibility– indivisibility by reason of the nature of the object or subject matter of the obligation
Indivisibility (1) vs Solidarity (2)
1.(1) Indivisibility is the Nature of the obligation ; (2) Solidarity is the “vinculum” or juridical tie existing between the parties
2.(1)one debtor & creditor involved in the obligations (2)there must be at least be two debtors or creditor
3.In indivisibility, does not consider the fault of one party as the fault of others; in solidarity the fault of one is considered the fault of the other
4.(1)The death of the debtor does not extinguish the prestation bec. the heirs are bound to perform by the unfulfilled prestation. (2) the debt of
the debtor is not tranferred to heirs, therefore, terminates the solidarity.
**no case cited
Illustration:
Divisible:
Mr. Nocom died intestate, leaving 1000 hectare parcel of land to his heirs. The property can be divided to his heirs proportionately.
Indivisible:
Jun obtained a contract to deliver a 4×4 Toyota Pick up, fully automatic, 2016 model to Mau that she will use for Off-Road trip not later than
January 31. However, the only available model is a 2016 model 4×2 Toyota pick up, full automatic. Jun cannot deliver the pick up available because
the contract is non- susceptible for partial performance realizing the purpose of which the obligation seeks to obtain.Jun has to deliver the exact
car model required.
A joint indivisible obligation gives the 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.
Ang pinagsamang hindi mapaghihiwalay na obligasyon ay maaaring magbigay ng kaukulang bayad pinsala simula noong ang nangutang ay hindi
makatupad sa kanyang pangako. Ang nangutang na maaaring nang handa upang kanyang tuparin ang kanyang pangako ay hindi na magbibigay
ng kontribusyon para sa bayad doon sa kung ano ang halaga ng isang bagay o halaga ng serbisyo kung saan ay napapabilang ang obligasyon.
Example: Mila and Ligaya promised jointly to give a specific car worth P2,400,000 to Jose. In the meantime, the car is with Honda Motors Co. Mila’s
share is, therefore, P1,200,000. If Mila, because of gambling, does not have the money, but Ligaya has P1,200,000 it is clear that they cannot get
the car from Honda Motors Co. So they also cannot comply with their obligation of delivering the car to Jose. Here, the obligation to give the car is
converted to a monetary obligation to give P2,400,000 to Jose. Ligaya is not responsible for Mila’s insolvency, so she is duty bound to give only P1,
200,000. Mila will be indebted to Jose for her share of P1,200,000.
Article 1225
For the purpose of the preceding articles, obligation 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. (1151a)
Para sa mga susunod na artikulo, ang obligasyon na magbigay ng natatanging mga bagay at para sa mga gawaing hindi maaaring magawa nang
pahapyaw ay inaakalang hindi na mahahati.
Kung ang pagtupad ng obligasyon ay sumasaklaw sa arawan o ang pagganap nito ay masusukat, o di kaya ito mga bagay na analogo na maaaring
magawa nang pahapyaw, ito ay mahahati.
Ngunit kahit ang isang bagay o serbisyo ay pwedeng mahati nang pisikal, ang obligasyon ay mananatiling buo kung ito ay nakasaad sa batas o di
kaya ay intensyong maging buo ng baway partido.
Para sa mga obligasyong hindi paggawa, and pagigin buo o di buo nito ay itatakda ng karakter ng prestation ng bawat kaso.
Discussion:
Effect of illegality of a part of a contract
Divisible Contract – if the contract is divisible and a part of it is illegal, the illegal part of the contract is considered void and not enforceable.
Indivisible Contract – if the contract is indivisible and a part of it is illegal, the entire contract is considered void and not enforceable.
Effect of partial performance of an indivisible contract
When an obligation is indivisible, it is not susceptible to partial performance, therefore, a debtors who only does a part of the obligation cannot
revocer payment for the partial work that he has done because for an indivisible contract, partial performance is equivalent to non-performance.