Different Kinds of Obligations

Kinds of Obligations According to Demandability: (Articles 1179-1192)

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 contains a resolutory condition shall also be demandable, without
prejudice to the effects of the happening of the event.
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 [the period may be fixed by the court]
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.
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.
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
 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.
Art. 1186.The condition shall be deemed fulfilled when the obligor voluntarily prevents its
fulfillment.
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 to have been 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.
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.
 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:
(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 it 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 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.
 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 the 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 the 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.
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.
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.
 Kinds of Obligations According to Demandability:
(Articles 1179-1192)
A] Pure Obligation:
▪ A pure obligation is one which has neither a condition nor a term attached to it (or a day
fixed for its compliance).
▪ It is one which is subject to no contingency.
▪ A pure obligation is demandable at once (Article 1179).
B] ConditionalObligation:
▪A condition is a future and uncertain event.
▪ All conditions are future events.
▪ Article 1179 mentions the term ―past event unknown to the parties.
❖ The condition in a past event unknown to the parties is knowledge by the parties of
the past event.
▪ In conditional obligation, the happening of the condition determines its birth or death.
In term, the happening of the term determines its demandability.
 Conditional Obligation
Types of Conditions:
I] 1) Suspensive Condition VI] 1) Conjunctive
2) Resolutory 2) Alternative
II] 1) Potestative VII] 1) Express
2) Casual 2) Implied
3) Mixed
III] 1) Possible
2) Impossible
IV] 1) Positive
2) Negative
V] 1) Divisible
2) Indivisible
 Suspensive Condition
NOTES:
▪ The fulfillment of a suspensive condition results a demandable obligation
and consequently in the acquisition of rights arising out of the obligation.
▪ 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 (Article 1184)
▪ 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 (Article
1185)
▪ The moment the suspensive condition happens, the obligation becomes
effective and enforceable. However, the effects of the obligation retroact
to the moment when such obligation was constituted or created. By the
principle of retroactivity, therefore, a fiction is created whereby the binding
tie of the conditional obligation is produced from the time of its perfection,
 Suspensive Condition
▪ The law does not require the delivery or payment of the fruits or interests accruing before
the happening of the suspensive condition. The right to the fruits of the thing is not within
the principle of retroactivity of conditional obligations (Article 1187)
▪ If the obligation imposes reciprocal prestations, fruits and interest are deemed mutually
compensated.
Example: I promise to sell my mango plantation at P5000/hectare if you pass the bar
examination. I do not have to give you the fruits from the time of the agreement to the release
of the bar exams.
▪ If the obligation is unilateral, debtor appropriates the fruits.
▪ In obligations to do and not to do, the courts shall use sound discretion to determine the
retroactive effect of the fulfillment of the condition (Article 1187)
▪ The creditor may, before the fulfillment of the condition, bring the appropriate actions for
the preservation of his right (Article 1188, 1st ¶). JBL Reyes criticizes the use of the word
―bring‖. The 1st ¶ of Article 1188 does not limit itself to judicial actions. Thus, the word
―take‖ is better.
▪ The debtor who paid before the happening of the condition may recover only when he paid
 Resolutory Condition
NOTES:
▪ The fulfillment of the resolutory condition results in the extinguishments of rights
arising out of the obligation.
▪ If the resolutory condition is fulfilled, the obligation is treated as if it did not exist.
Thus, each party is bound to return to the other whatever he has received, so that
they may be returned to their original condition before the creation of the
obligation (Article 1190).
▪ Resolution (Article 1191) is found on the conditional obligations because if there is
a breach, the breach is a resolutory condition which extinguishes the obligation.
▪ Article 1191 uses the term ―rescission. The better term is ―resolution‖. The
term rescission is also found in Article 1381, rescissible contracts. Resolution is
different from rescission. Resolution is based on the non-fulfillment of the
obligation. Rescission is based on economic prejudice. Furthermore, the
character of resolution is principal and retaliatory while the character of rescission
is subsidiary. This means that in resolution there is no need to show that there is
no other remedy. In rescission, the plaintiff must show that there is no other
▪ The right of resolution applies to reciprocal obligations.
▪ A reciprocal obligation has 2 elements
1) 2 prestations arising from the same source
2) Each prestation is designed to be the counterpart of the other  An example of a reciprocal
obligation is a contract of sale.
Summary of Rulings on Resolution:
1) The right to resolve is in inherent in reciprocal obligations.
2) The breach of the obligation must be substantial. Proof of substantial breach is a prerequisite for
resolution.
3) The right of resolution can be exercised extrajudicially and will take effect upon communication to
the defaulting party. This notice of resolution is necessary.
4) The exercise of this right can be the subject of judicial review.
5) Upon resolution, there must be mutual restitution of the object and its fruits
▪ The parties are returned to their original situation – status quo ante.
6) If the aggrieved party has not performed the prestation and resolves extrajudicially, then all the
aggrieved party has to do is to refuse to perform his prestation.
7) If the aggrieved party has performed the prestation, the aggrieved party can demand recovery. If the
Art. 1381. The following contracts are rescissible:
(1)Those which are entered into by guardians whenever the wards
whom they represent suffer lesion by more than one-fourth of the value of
the things which are the object thereof;
(2) Those agreed upon in representation of absentees, if the latter suffer
the lesion stated in the preceding number;
(3) Those undertaken in fraud of creditors when the latter cannot in any
other manner collect the claims due them;
(4) Those which refer to things under litigation if they have been entered
into by the defendant without the knowledge and approval of the litigants or
of competent judicial authority;
(5) All other contracts specially declared by law to be subject to
rescission.
 RESCISSION (RESOLUTION IN RECIPROCAL OBLIGATIONS)
Right to rescind or cancel the contract.

Rescission / Resolution [Art. Rescission [Art. 1380]

1191]

Based on non-performance or non- Based on lesion or fraud upon

fulfillment of obligation creditors.

Action is instituted only by the injured Action is instituted by either party or

party. by a third person.

In some cases, court may grant a Court cannot grant a period or term
term. within which one must comply.

Non-performance by the other party Nonperformance by the other party is

is important. immaterial.
 Obligation with a Period /Term
(Articles 1193-1198)
Legal Provision Obligation with a Term/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 terminate upon
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.
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.
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
 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 or of the
other.
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.
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 gives 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;
▪ A term is a length of time which, exerting an influence on an obligation as a consequence of
juridical acts, suspends its demandability or determines its extinguishment. A term is a future
and certain event (i.e. death)
▪ If prepayment is made without the debtor being aware that the period had not yet arrived, then
the thing and the fruits can be recovered (Article 1195). If prepayment is made and the debtor
was aware that the period had not yet arrived, then the debtor waives the benefit of the term.
Example:
An obligation was entered on May 1, 2002 between A and B. The obligation is to be
performed on October 1, 2002. A delivers on September 1, 2002 by mistake to B. A discovers
his mistake and tells B to return the object and the fruits delivered.
Article 1195 does not answer who is entitled to the fruits which have been produced in the
meantime (May 1, 2002 to October 1, 2002)
There are 2 views:
1) The debtor is entitled to the fruits produced in the meantime (Tolentino)
 This is because delivery is not required until October 1.
2) The creditor is entitled to the fruits since the obligation is demandable only when the period
arrives
 This is because the obligation is already existing although it is not yet demandable.
 Professor Balane believes that the fruits belong to the debtor. Why would Article 1195 allow
the debtor to recover the fruits if he should still give them back after the term comes.
 Term/Period and Condition Distinguished

Term/Period Condition

Interval of time which is future and Fact or event which is future and
certain uncertain
Must necessarily come, although it
may not be known when May or may not happen

Exerts an influence upon the time Exerts an influence upon the very
of demandability or extinguishment of existence of the obligation itself
an obligation
Exerts an influence upon the very
existence of the obligation itself Has retroactive effect

When it is left exclusively to the will of When it is left exclusively to the will
the debtor, the existence of the of the debtor, the very existence of
▪ When the debtor binds himself to pay when his means permit him to do so, the
obligation is one with a term (Article 1180). Although Article 1180 looks like a
condition dependent on the sole will of the debtor, the law treats it as a term.
▪ Instances when the Fruits Cannot be Recovered
1) When the obligation is reciprocal and there has been prepayment of
both sides
2) When the obligation is a loan and the debtor is bound to pay interest
3) When the period is exclusively for the creditor‘s benefit
4) When the debtor is aware of the period and pays anyway – waiver 
▪ The presumption is that the period is for the benefit of both the debtor and
the creditor (Article 1196). The effect of this presumption is that the
creditor cannot demand payment before the period arrives nor can the
debtor demand the creditor to accept payment before the period arrives.
▪ Example: A issues a promissory note to B demandable on October 15. A
cannot insist on prepayment nor can B insist that he be paid on September.
▪ If the period is for the benefit of the creditor only, the creditor can demand
performance at any time, but the debtor cannot compel him to accept payment
before the period expires.
▪ If the period is for the benefit of the debtor only, the debtor can he may oppose
a premature demand for payment, but may validly pay at any time before the
period expires.
• When the obligation is worded such that payment it to be made ―within 6
months, the period is for the benefit of the debtor.
• When the obligation is worded such that payment is to be made ―on or
before, the period is for the benefit of the debtor.
▪ Effect of Suspensive Term or Period:
The obligation may only be demanded upon the arrival of the day certain fixed
for its performance (Art 1193 par 1)
▪ In case of loss, deterioration or improvement of the thing before the arrival of
the day certain (period), the rules in Article 1189 NCC shall be observed.
RULES IN CASE OF LOSS, DETERIORATION OR IMPROVEMENT
(BEFORE THE ARRIVAL OF THE TERM)
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:
(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 it 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
▪ The presumption is that the period is for the benefit of both the debtor and
the creditor (Article 1196). The effect of this presumption is that the creditor
cannot demand payment before the period arrives nor can the debtor
demand the creditor to accept payment before the period arrives.
Example: A issues a promissory note to B demandable on October
15. A cannot insist on prepayment nor can B insist that he be paid on
September.
▪ If the period is for the benefit of the creditor only, the creditor can demand
performance at any time, but the debtor cannot compel him to accept
payment before the period expires.
▪ If the period is for the benefit of the debtor only, the debtor can he may
oppose a premature demand for payment, but may validly pay at any time
before the period expires
• When the obligation is worded such that payment it to be made
―within 6 months, the period is for the benefit of the debtor.
• When the obligation is worded such that payment is to be made ―on
▪ The debtor shall lose every right to make use of the period:
1) When after the obligation has been contracted, the debtor becomes
insolvent unless he gives a guaranty or security for the debt (Article 1198(1)
 The insolvency here need not be judicial. It can be actual insolvency.
2) When he does not furnish to the creditor the guaranties or securities
which he has promised (Article 1198 (2))
3) When by his own acts he has impaired the said guaranties or
securities after their establishment, and when through a fortuitous event hey
disappear, unless he immediately gives new ones equally satisfactory (Article
1198 (3))
4) When the debtor violates any undertaking, in consideration of which
the creditor agreed (Article 1198 (4))
5) When the debtor attempts to abscond (Article 1198 (5))
6) When the creditor is deceived on the substance or quality of the thing
pledged, the creditor may either claim another thing in its stead or demand
immediate payment of the principal obligation (Article 2109)
TYPES OF PERIODS:
I - 1) Suspensive (ex die)
• The period is suspensive when the obligation becomes demandable only upon the arrival of
the period.
2) Resolutory (in diem)
• The period is resolutory when the performance must terminate upon the arrival of the
period.
II - 1). Legal
• A period is legal when it is granted by law.
2) Voluntary
• A period is voluntary when it is stipulated by the parties.
3) Judicial
• A period is judicial when it is fixed by the courts.
• 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 (Article 1197, 1st
¶).
III - 1). Express
• A period is express when the period is specifically stated.
2) Tacit
• A period is tacit when a person undertakes to do some work which can be done only during
TYPES OF PERIODS:
IV - 1) Original
2) Grace (Period)
• A grace period is an extension fixed by the parties or by the
court.
V – 1) Definite
• A period is definite when it refers to a fixed known date or time.
2) Indefinite
• A period is indefinite when it refers to an event which will
necessarily happen but the date of its happening is unknown
(i.e. death)
 Obligation According to Plurality of Object
(Articles 1199-1206)
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.
Art. 1201. The choice shall produce no effect except from the time it has been
communicated.
Art. 1202. The debtor shall lose the right of choice when among the prestations
whereby he is alternatively bound, only one is practicable.
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.
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
 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.
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.
 Obligation According to Plurality of Object

A] ALTERNATIVE OBLIGATION:
▪ An obligation is alternative when several objects or prestations are due, but
the payment or performance of 1 of them would be sufficient.
▪ A promises to deliver either 500 kgs of rice or 1000 liters of gas. The
obligation is alternative. The debtor cannot perform the obligation by giving
250 kgs of rice and 500 liters of gas unless the creditor agrees. In which case
there is a novation.
▪ General Rule: The right of choice the right to belongs to the debtor.
▪ Exceptions:
1) When it is expressly granted to the creditor
2) When it is agreed upon by the parties that a 3rd person shall make the
choice
▪ The act of making the choice is called concentration. Once the choice has
▪ Whoever has the right of choice must communicate it to the other party
(Article 1201). The creditor has to communicate his choice to the debtor so
that the debtor will know. On the other hand, in Ong Guan vs. Century
Insurance, the Supreme Court said that the purpose for notice to the
creditor is to give the creditor the opportunity to express his consent or to
impugn the election made by the debtor. Professor Balane does not agree
with this statement since the creditor does not have the right to impugn,
otherwise, the obligation would not be an alternative obligation. A better
reason according to Professor Balane is to give the creditor time to
prepare.
▪ Example: The choice is either to give diamond ring or a Mercedes Benz.
The debtor should notify the creditor so the creditor can either rent a safety
deposit box or prepare a garage.
▪ However, according to Professor Balane, the best reason is because once
the choice is communicated, the obligation ceases to be alternative. The
risk of loss belongs to the creditor now.
▪ When the Choice Belongs to the Debtor:
1) When through fortuitous event or through the debtor‘s acts, there is only
1 prestation left, the obligation ceases to be alternative (Article 1202).
2) When the choice of the debtor is limited through the creditor‘s own acts,
then the debtor has the remedy of resolution (Article 1191) plus damages
(Article 1203)
3) When all the things are lost due to the debtor‘s fault, the creditor can sue
for damages (Article 1204)
4) When some things are lost due to the debtor‘s fault but there are still
some things remaining, then the debtor can choose from what‘s left
5) When all the things are lost due to a fortuitous event, the obligation is
extinguished
6) When all but 1 of the things are lost due to a fortuitous event and the last
object is lost through the debtor‘s fault, then the creditor can sue for damages
7) When all but 1 of the things are lost through the debtor‘s own acts and
the last object is lost through a fortuitous event, the obligation is extinguished.
Alt. Obligation where Choice Belongs to the Creditor (Article 1205)
1) When 1 or some of the objects are lost through fortuitous events, then the
creditor chooses from the remainder
2) When 1 or some of the objects are lost due to the debtor‘s fault, the creditor
may choose from the remainder or get the value of any of the objects lost plus
damages in either case
3) When all of the things are lost due to the debtor‘s fault, the creditor can get
the value of any of the objects lost plus damages
4) When some are lost through the debtor‘s fault, the creditor chooses from the
remainder
5) When all the objects are lost due to a fortuitous event, then the obligation is
extinguished
6) When all the objects are lost due to the creditor‘s fault, the obligation is
extinguished
 Obligation According to Plurality of Object
B] Facultative Obligation:
▪ An obligation is facultative when only 1 object or prestation has been agreed upon by
the parties to the obligation, but the debtor may deliver or render another in substitution.
▪ Facultative obligations bear a resemblance to alternative obligations particularly when
the choice in an alternative obligation is with the debtor.
▪ In a facultative obligation, the right of choice is always with the debtor.
▪ In an alternative obligation, if 1 of the prestations is impossible, then there are other
choices. In a facultative obligation, if the principal obligation is impossible, then
everything is annulled.
▪ In theory, it is easy to distinguish a facultative obligation from an alternative obligation.
In practice, it is difficult to do so since most of the time, the words are ambiguous. For
example, I promise to deliver my Honda Accord, but I reserve my right to substitute this
with my Gold Rolex. In this case, it is not very clear whether the obligation is alternative
or facultative. According to Professor Balane, the rule is that one must look at the
circumstances of the obligation. If it is impossible to determine which one, then the
doubt should be resolved in the favor of an alternative obligation since its effects are
less radical.
 According to Plurality of Subject
(Articles 1207-1222)
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.
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.
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.
Art. 1210.The indivisibility of an obligation does not necessarily give rise to solidarity.
Nor does solidarity of itself imply indivisibility.
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.
 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.
Art. 1213. A solidary creditor cannot assign his rights without the consent of the others.
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.
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.
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.
 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.
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.
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
 According to Plurality of Subject

A] Single
▪ An obligation is single when there is only 1 debtor and 1 creditor.
B] Joint Obligation
▪ An obligation is joint when each of the debtor is liable only for a proportional
part of the debt, and each creditor is entitled only to a partial part of the credit.
▪ A joint obligation is also called mancomunada, pro rata, mancomunada simple
▪ General Rule: The obligation is joint since joint obligations are less onerous.
▪ Exceptions:
1) Agreement of the parties
2) Law (i.e. tort feasors are solidarily liable)
3) Nature of the obligation  According to many commentators, this is
superfluous since a solidary obligation arises because of law.
▪ESSENTIAL NATURE: There are as many obligations as there are creditors
multiplied by as many debtors.
▪ Types of Joint Obligations
1) Active joint
• In active joint, there are multiple creditors.
• A, B, and C are creditors, and X is the debtor. If the obligation is joint, there are 3 obligations
– X‘s obligation to A, X‘s obligation to B, and X‘s obligation to C.
• The demand of 1 creditor on 1 debtor will not constitute a demand on the others.
• The prescription of 1 of the debts will not affect the other debts.
2) Passive joint
• In passive joint, there are multiple debtors.
• X, Y, and Z are debtors, and A is the creditor. If the obligation is joint, there are 3 obligations –
X‘s obligation to A, Y‘s obligation to A, and Z‘s obligation to A.
• The demand of 1 creditor on 1 debtor will not constitute a demand on the others.
• The prescription of 1 of the debts will not affect the other debts.
• The insolvency of 1 of the debtors will not affect the burden of the other debtors.
3) Mixed joint
• In mixed joint, there are multiple creditors and debtors.
• X, Y, and Z are debtors, and A, B, and C are the creditors. If the obligation is joint, there are 9
obligations – X‘s obligation to A, X‘s obligation to B, X‘s obligation to C, Y‘s obligation A, Y‘s
obligation to B, Y‘s obligation to C, Z‘s obligation to A, Z‘s obligation to B, and Z‘s obligation to
 Solidary Obligation

C] Solidary Obligation
▪ An obligation is solidary when any of the debtors can be held liable for the
entire obligation, and any of the creditors is entitled to demand the entire
obligation.
▪ A solidary obligation is also called joint and several, joint and individual, and
in solidum.
▪ If a promissory says, ―I promise to pay,‖ and it is signed by K, B, and M,
then the obligation is solidary.
▪ An obligation is solidary when:
1)The parties so agree
2)When the law so provides (i.e. tort feasors are solidarily liable)
3) When nature of the obligation requires the obligation to be solidary
• According to many commentators, this is superfluous since a solidary obligation
Types of Solidary Obligations:
I- Active solidary
▪ In active solidary, there are multiple creditors.
▪ Characteristics of Active Solidary:
• A credit once paid is shared equally among the creditors unless a different
intention appears.
• The debtor may pay any of the creditors, but if any demand, judicial or
extrajudicial is made on him, he must pay only to the one demanding
payment (Article 1214).
⮚ Article 1214 can be open to abuse. For example, if A writes Y
demanding the performance of the obligation and A takes no further
action, B and C cannot demand from Y. This is open to collusion.
⮚ Suppose A, B, and C are creditors of X. A demands the payment of the
loan worth P9,000. X instead pays to B. The payment to B will be
treated as a payment to a 3rd person. Therefore, X must still pay A the
amount of the loan minus the share of B. So, X has to pay P6,000 to A.
II- Passive solidary
▪In passive solidary, there are multiple debtors.
▪ Characteristics of Passive Solidary
• Each debtor may be required to pay the entire obligation but after
payment, he can recover from his co-debtors their respective shares.
III - Mixed solidary
▪ In mixed solidary, there are multiple debtors and creditors.
▪ Characteristics of Mixed Solidary
• A credit once paid is shared equally among the creditors unless a
different intention appears.
• The debtor may pay any of the creditors, but if any demand, judicial or
extrajudicial, is made on him, he must pay only to the one demanding
payment (Article 1214).
 According to Performance
(Articles 1223-1225)

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.
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
NOTES:
▪ Divisible and indivisible obligations have nothing to do with the object of the
prestation. A common misconception is if the object of the prestation is divisible,
then the obligation is also divisible.
A] Divisible Obligation:
▪ An obligation is divisible when it is susceptible to partial performance.
B] Indivisible Obligation
▪ An obligation is indivisible when it cannot be validly performed in parts.
▪ General Rule: Obligations are indivisible.
▪ Exceptions:
1) When the law provides otherwise
2)When the parties provide otherwise (Articles 1225, 3rd ¶, 1248)
3) i When the nature of the obligation necessarily entails the performance of the obligation in
parts
▪ Exception to the Exception: However, even though the object or service may be
physically divisible, an obligation is indivisible if
1) So provided by law; or 2). Intended by the parties.
 .

According to Sanction for Breach

(Articles 1226-1230)

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.
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.
 Art. 1228. Proof of actual damages suffered by the creditor is not
necessary in order that the penalty may be demanded.
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.
RELATED ARTICLES:
Art. 2226. Liquidated damages are those agreed upon by the parties to
a contract, to be paid in case of breach thereof.
Art. 2227. Liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or unconscionable.
 Obligation with a Penal Clause
OBLIGATIONS WITH PENAL CLAUSE:
▪ A penal clause is an accessory undertaking to assume greater liability in
case of breach.
▪ A penal clause is “an accessory obligation which the parties attach to a
principal obligation for the purpose of insuring the performance thereof by
imposing on the debtor a special prestation (generally consisting in the
payment of a sum of money) in case the obligation is not fulfilled or is
irregularly or inadequately fulfilled“(SSS vs. Moonwalk GR 73345, April 7,
1993)
▪ Penal clauses are governed by Articles 2226-2228, the provisions on
liquidated damages since a penal clause is the same as liquidated damages
▪ Penal clauses may be reduced by the courts if unconscionable.
Art. 2227. Liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or unconscionable.
▪ 2 Functions of a Penal Clause (SSS vs. Moonwalk)
1) To provide liquidated damages
• The creditor can demand liquidated damages without having to prove
actual damages.
• The only limitation that the courts will reduce the liquidated damages if the
same is scandalously unconscionable.
2) To strengthen the coercive force of the obligation by the threat of greater
responsibility in case of breach
▪ The penal clause is intended to prevent the obligor from defaulting in the
performance of his obligation. Thus if there should be default, the penalty may
be enforced (SSS vs. Moonwalk).
▪ The Penalty may not replace the principal obligation.
The penalty is not a substitute for the formance of the obligation. As a rule ,
the debtor cannot exempt himself from the performance of the obligation by
paying the penalty (Art 1227).
The exception to the above is when this right is expressly reserved for the
2 Characteristics of a Penal Clause
1) Subsidiary or alternative (Article 1227)
 General Rule: Upon breach of the obligation, the creditor has to choose
whether to demand the principal or the penalty. He can not demand both.
 Exception: The principal obligation and the penalty can be demanded when the
penal clause is joint or cumulative. This occurs when it is the creditor has been clearly
granted such right (Article 1227, 2nd sentence), either expressly or impliedly. The
implied right must be one ascertainable from the nature of the obligation. An example is
in the construction industry where the contractor must pay the penalty if the work is
completed after the stipulated time frame but must also finish the agreed construction.
2) Exclusive (Article 1226)
 General Rule: The penalty clause takes the place of other damages (that‘s why
in imposing a penalty clause, make sure that the penalty is stiff).
 Exception: Both the penalty and actual damages may be recovered in the
following:
1. Express stipulation
2. Refusal by the debtor to pay the penalty