Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

CHAPTER 3, SECTION 3 – ALTERNATIVE OBLIGATIONS

(Articles 1193-1198)

1. There are two (2) kinds of obligations according to object or prestation :

(A) SIMPLE obligation – There is only one (1) prestation.

D promised to deliver to C a 2010 model BMW car .

only 1 prestation

(B) COMPOUND obligation – There are two (2) or more prestations. Compound
obligations are of two (2) kinds :

(B.1) CONJUNCTIVE obligation – There are several prestations, and all of

them are due.

D promised to deliver to C a 2010 model BMW car and a dump truck .

2 prestations

(B.2) DISTRIBUTIVE obligation – There are several prestations, but only one
or some of the prestations are due. The two (2) kinds of distributive obligations are :

 ALTERNATIVE – There are several prestations due to the creditor, but the
performance by the debtor of any one of the prestations is sufficient compliance with
the obligation. (Article 1199)

D promised to deliver to C either a BMW car, a Jaguar or a Mercedez Benz.

3 alternative prestations to choose from

 FACULTATIVE – There is only one prestation due to the creditor, but the
debtor may perform another prestation to substitute the original prestation.
(Article 1206, par. 1)

D promised to deliver to C a BMW, but D may deliver a Jaguar as a substitute .

original prestation substitute prestation

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

2. To whom is the right of choice given in an alternative obligation? In other

words, since there are several prestations due, who will choose which prestation is to
be performed by the debtor?

 As a general rule, the right to choose the alternative belongs to the DEBTOR.
(Article 1200, par. 1)

EXAMPLE A: On March 15, 2010, Gerald promised Kim that he will

deliver to her on December 15, 2010 either a Siamese
cat, a bulldog, or a tarsier.

 Since the obligation does not say to whom the right of choice is given, the
debtor Gerald has the right of choice. Gerald can decide which among the alternative
prestations he will deliver to Kim on December 15, 2010. If Gerald chooses and
delivers to Kim a bulldog, the obligation will now be extinguished. Kim cannot insist
that Gerald deliver the Siamese cat because the right of choice has not been given to
the creditor.

 What are the limitations on this preferential right of the debtor to choose the
alternative prestation in an alternative obligation?

(A) The creditor may exercise the right to choose the alternative prestation if the
right is given to the creditor by express agreement of the parties. (Articles 1200, par.
1 & 1205)
 In EXAMPLE A above, Gerald and Kim may agree that Kim will be the one to
choose the alternative prestation. If Kim informs Gerald that she wants the Siamese
cat, Gerald must deliver the Siamese cat on December 15, 2010. If Gerald delivers
the bulldog, the obligation will not be extinguished and Kim can still demand for the
delivery of the Siamese cat.

(B) The debtor must choose, and completely perform, only ONE alternative
prestation. He cannot choose part of one prestation and part of another prestation.
(Article 1199, par. 2)

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

EXAMPLE B: On March 15, 2010, David promised Sarah that he

will deliver to her on December 15, 2010 either 1000
sacks of dinorado rice worth P250,000, P250,000.00
in cash, 20 kilos of shabu, a mermaid from the pacific
ocean, or an owner-type assembled jeepney.

 David cannot deliver to Sarah 500 kilos of dinorado rice and P125,000.00 in
cash. Sarah can refuse to accept the delivery even if the total value of the delivery
amounts to P250,000 – one of the alternative prestations. David has to choose only
one of the alternative prestations, and he must compeletely perform the chosen
prestation.

(C) The debtor cannot choose those prestations which are impossible, unlawful,
or which could not have been the object of the obligation. (Article 1200, par. 2)
 In EXAMPLE B above, David can choose from among any of the alternative
prestations. However, David cannot choose to deliver 20 kilos of shabu because it is
an unlawful prestation. Neither can he choose to deliver to Sarah a mermaid from the
pacific ocean because it is a physically impossible prestation.

(D) The choice of the alternative prestation to be performed will produce legal
effect only from the time it is communicated to the other party. (Article 1201)
 The debtor must choose, and communicate his choice to the creditor. After
the debtor has chosen the alternative prestation he wishes to perform, he must inform
the creditor which among the alternative prestations he will perform.
 After the debtor communicates to the creditor his choice of the alternative
prestation to be performed, the alternative obligation will now be converted into a
simple obligation with only one prestation which is due for performance on the
maturity date of the obligation.
 In EXAMPLE A above, Gerald informs Kim on May 30, 2010 that what he
will deliver to her on December 15, 2010 is the tarsier. As of May 30, 2010, the
alternative obligation becomes a simple obligation with only one prestation which the
debtor is obliged to deliver on December 15, 2010 – the delivery of the tarsier.

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

 Remember that it is not required that the creditor give his consent to the
choice made by the debtor. The debtor’s right of choice would be rendered useless if
he was to get the creditor’s approval of what alternative prestation to choose.

(E) The debtor loses his right of choice when only one alternative prestation is
practicable of performance. (Article 1202)
 Assume in EXAMPLE A above that the Siamese cat and the tarsier both
died on the occasion of a tsunami on November 2, 2010. This is a case when only
one alternative prestation is left to be performed by the debtor. The effect is the
alternative obligation is converted into a simply obligation with only one prestation.
The debtor Gerald will have no other choice but to deliver to Kim the only remaining
prestation (the bulldog) on December 30, 2010.

3. ARTS. 1204 & 1205. – What are the effects of the loss or impossibility of
the alternative prestations BEFORE the right of choice is exercised?

 Once the debtor has communicated his choice of the alternative prestation
to be performed to the creditor, the obligation becomes simple. If the chosen
alternative is lost without the fault of the debtor, the obligation will be extinguished
(Article 1174). If the chosen alternative is lost due to the fault of the debtor, the
obligation will be converted into monetary consideration in the form of damages
(Article 1170).

 What will be the effect then if one or some of the alternative prestations in
the alternative obligation are lost before the debtor has communicated his choice to
the creditor? The consequences will really depend upon whether the right of choice
was given to the debtor or to the creditor.

(A) When the right of choice belongs to the DEBTOR

(1) If the loss is due to a FORTUITOUS EVENT

(a) If all the alternative prestations are lost, the alternative obligation is
extinguished. (Article 1174)

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

(b) If two or more of the alternative prestations remain, the debtor can
still exercise his right of choice and choose from any of the remaining
alternatives. (Article 1200)
(c) If only one of the alternatives remain, there is no more alternative
obligation but only a simple obligation. The debtor has no choice but
to perform the remaining prestation. (Article 1202)
(2) If the loss is due to the DEBTOR’S FAULT

(a) If all the alternative prestations are lost, the alternative obligation is
converted into monetary consideration as indemnity for damages.
The basis for the computation of the amount to be paid by the debtor
will be the value of the last thing or service lost plus damages.
(Article 1204, pars. 1 & 2)
(b) If two or more of the alternative prestations remain, the debtor can
still exercise his right of choice and choose from any of the remaining
alternatives. (Article 1200, par. 1)
NOTE: Even if the loss of the other alternatives were due to the
debtor’s fault, the debtor will not be liable for damages since he has
the right of choice and the obligation can still be performed. This is
an exception to the general rule established in Article 1170 regarding
liability for damages arising from negligence.
(c) If only one of the alternatives remain, there is no more alternative
obligation but only a simple obligation. The debtor has no choice but
to perform the remaining prestation with NO liability for damages.
(Article 1202)

 Illustrative example and application of the rules in Articles 1204 & 1205.

(B) When the right of choice belongs to the CREDITOR

(1) If the loss is due to a FORTUITOUS EVENT – The effects are the same
as where the right of choice belongs to the debtor.
(2) If the loss is due to the DEBTOR’S FAULT
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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

(a) If all the alternative prestations are lost, the alternative obligation is
converted into monetary consideration as indemnity for damages.
The basis for the computation of the amount to be paid by the debtor
will be the value of any of the objects chosen by the creditor
(because he is given the right of choice) plus damages.
(Article 1205, par. 2[3])
(b) If two or more of the alternative prestations remain, the obligation is
still alternative. The creditor has the option to either:
(b.1.) choose from among the remaining alternatives; OR
(b.2.) choose the lost object. The debtor will then be liable for the
value of the lost object chosen by the creditor plus damages.
(Article 1205, par. 2[2])
NOTE 1: When the right of choice belongs to the creditor, and the
loss is due to the debtor’s fault, the debtor is liable for damages
because the creditor was deprived of his right to choose.
NOTE 2: In all cases, there is NO communication of the choice
made. If there was already a communication, there is no more
alternative obligation. The above rules will no longer be applicable.

4. ART. 1206.

 In facultative obligations, there is only one prestation due to the creditor, but
the debtor may perform another prestation to substitute the original prestation.
(Article 1206, par. 1)
 In facultative obligations, the right of choice belongs ONLY to the DEBTOR
(Article 1206, par. 1). Once the substitution is made, the obligation is converted into
a simple one to deliver or perform the substituted prestation.
 The substitution also becomes effective only from the time the debtor
communicates to the creditor his choice to perform the substitute prestation.
(Article 1201)
 BEFORE substitution, the debtor is not liable if the substitute prestation is
lost whether due to his fault or to a fortituitous event. This is because what is due

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Chapter 3, Section 3 – Alternative Obligations (Articles 1199-1206)

before substitution is the original prestation. If the original prestation is lost by virtue
of a fortuitous event, the obligation is extinguished. If the original prestation is lost
due to the debtor’s fault, he will be liable for damages to the creditor.
 AFTER substitution, the debtor is not liable if the original prestation is lost
whether due to his fault or to a fortituitous event. This is because what is due after
substitution is already the substitute prestation. If the substitute prestation is lost by
virtue of a fortuitous event, the obligation is extinguished. If the substitute prestation
is lost due to the debtor’s fault, he will be liable for damages to the creditor.

NOTE: For lack of material time, I will be sending the groupings for the special
project tomorrow. Please keep posted. Thank you.