CATEGORY: CHAPTER 3: DIFFERENT KINDS

OF OBLIGATIONS
PURE AND CONDITIONAL OBLIGATIONS
Article 1179
March 26, 2016Leave a comment
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. (1113)
Bawat obligasyon na ang pagganap ay hindi nakadepende sa hinaharap o sa hindi tiyak na kaganapan o kaya sa
nakalipas na pangyayari na hindi alam ng partido ay dapat maipatupad kaagad.
Bawat obligasyon na naglalaman ng napatigil na kondisyon ay dapat maipatupad din ng walang pagkiling sa
epekto ng mga pangyayari.
Discussion:
Condition – future and uncertain event upon which the existence or extinguishments of an obligation is made to
depend.
Pure Obligation – one which does not contain any condition or term upon which its fulfillment is made to depend.
Conditional Obligation – kind of obligation which is subject to condition.
1. Suspensive (condition precedent/antecedent) – its fulfillment gives rise to the obligation, if not fulfilled, no
obligation will arise.
2. Resolutory (condition subsequent) – extinguishes the obligation which is already existing.
Past Event Unknown to the Parties to the Contract
If it has happened – the obligation immediately exists purely and simply.
If it has not happened – there is no obligation at all.
Application of Past Events Unknown to the Parties: When Proper
The future knowledge or proof of the past event, but not the past event itself is the only possibility of applying a
past event as a condition in an obligation.
Traditional Classifications of Conditions Classified by Manresa
As to effect:
Suspensive – when the performance or fulfillment of the condition results in the birth or acquisition of the rights
contemplated in the obligation.
Resolutory – results in the extinguishment of the rights which have previously arisen out of the obligation.
As to Cause/Origin :
Potestative – depends upon the will of the debtor
Casual – depends upon chance and/or upon the will of the third person
Mixed – depends partly upon the will of a party to the obligation and partly upon chance and/or the will of a third
person.
As to Possibility:
Possible – when the condition is capable of fulfillment according to nature, law, public policy or good customs.
(Art. 1183)
Impossible – not capable of fulfillment according to nature, law, public or good customs. (Art. 1183)
As to mode:
Positive – when the condition involves the doing of an act. (Art. 1184)
Negative – when the condition involves the omission of an act. (Art. 1184)
As to Divisibility
Divisible – when the condition is susceptible of partial performance.
Indivisible – when the condition is not susceptible of partial performance.
As to numbers:
Conjunctive – when there are several conditions in an obligation and all of which must be performed.
Alternative – when there are several conditions in an obligation but only one must be performed.
As to form :
Express – when the condition is expressly stated.
Implied – when the condition is not expressly stated but merely inferred from the conduct of the parties.
Case Illustration: Tolomeo Ligutan and Leonidas dela Llana vs. CA and Security Bank and Trust Company
 Tolomeo Ligutan and Leonidas dela Llana vs. CA and Security Bank
and Trust Company
March 17, 2016
G.R No. 138677 February 12, 2002
Tolomeo Ligutan and Leonidas dela Llana
vs.
Hon. Court of Appeals and Security Bank and Trust Company
Vitug, J. :
Facts:
On November 3, 1982 the Security Bank and Trust Company filed a complaint in Regional Trial Court of
Makati against Tolomeo Ligutan and Leonidas dela Llana for obtaining a loan in the amount of
P120,000.00 which they executed a promissory note binding themselves, jointly and severally to pay the
sum borrowed with an interest of 15.189% per annum upon maturity and to pay a penalty of 5% every
month on the outstanding principal and interest in case of default but the petitioners defaulted on their
obligation. Two years later petitioners filed a motion for reconsideration but the court denied the motion.
Then the petitioners interposed an appeal with the Court of Appeals, questioning the rejection by the trial
court of their motion to present evidence and assailing the imposition of the 2% service charge, the 5%
per month penalty charge and 10% attorney’s fees. In its decision on March 7, 1996, the appellate court
affirmed the judgment of the trial court.
Issue: Whether or not the promissory note executed by the petitioners considered as pure obligation?
Ruling: Yes, it is stated in art. 1179 that a simple promissory note promising to pay a certain amount
within a certain period is a pure obligation which is immediately demandable by the creditors and the
debtor cannot be excused from complying with his prestation. If the debtor does not fulfill his prestation,
specially after a valid demand, he is placed in default.

Article 1180
March 25, 2016Leave a comment
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. (n)
Kapag ang may utang ay ibinigkis kanyang sarili upang bayaran ang kanyang pag kakautang kapag ang
kanyang pamamaraan/kakayahan ay pinahihintulutan siya upang gawin ito, ang obligasyon ay
itinuturing bilang isa na may takdang panahon, na napapailalim sa mga probisyon ng Article1197

 When the debtor binds himself to pay forms of promise or commitment, the obligation is deemed with a period or
term.
 The moment of payment is dependent upon the will of the debtor.
Note: As the time of payment is not fixed, the same must be first fixed first before any action for collection should
be allowed. This means, the creditor cannot immediately file an action for collection of the sum promised to be
paid.

Phrases Indicating A Term or Period

1. A commitment to pay “little by little”
2. “As soon as possible”
3. “As soon as I have money”
4. When the creditor agreed “to wait until such time the debtor could pay the full indebtedness.”
5. Obligation to be paid “in partial payments”

Case
1. R. no. L – 5515
Levy Hermanos Vs. Pedro Paterno

Facts:
1. Pedro Paterno (defendant) executed a document in favor of Levy Hermanos (plaintiff), indicating that a balance of
P6,177.35 will be payable in partial payments.
2. The defendant made several payments and later claimed to establish the installment of P30.00 per month payment.
3. The plaintiff disagreed and brought suit and asked that he should be paid the sum of P5,862.35 (unpaid balance) or
that a period be specified within which he should pay the same, in case the court should deem such manner of
payment more equitable.
4. During the trial it was agreed by the parties that the sum which the defendant owed the plaintiff was P5,317.35
5. In view of the evidence adduced during the trial, a monthly payment of P200 would be reasonable compliance with
the agreement to pay the debt in installment. The payment will be rendered on or before the 15th of each month.
6. The defendant appealed that:
1. The obligation is one of payment by installment, its fulfillment cannot be required immediately;
2. No fixed day was specified for its fulfillment;
3. Payment is undetermined or was not fixed by parties when they executed the contract.

ISSUE:
Whether or not the defendant should pay the plaintiff according to the period fixed by court.

HELD:
Yes. The trial court acted in accordance with the law in exercising said power by fixing the duration of the period
on the basis that the payment of the debt should be made at the rate of P200.00 a month.
There was no abuse of judicial discretion in fixing such a rate, considering the importance of the obligatin and the
absence of any stipulation of the interest in favor of the creditor.
Article 1181
March 25, 2016Leave a comment
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.
Sa mga obligasyon condisyonal, ang pagtatamo ng karapatan, pati na rin ang pagtapos o kawala ng mga natamong
karapatan ay nakasalalay sa mga pangyayari ng mga kaganapan na bumubuo ng kundisyon.
Case Illustration: Parks vs Province of Tarlac
Parks vs Province of Tarlac
March 25, 2016
FACTS
In 1910, Concepcion Cirer and James Hill donated parcels of land to the municipality of Tarlac on the
condition that it be used absolutely and exclusively for the erection of a central school and public parks,
the work to commence within six months. The president of the municipality of Tarlac accepted and
registered the donation. In 1921, Cirer and Hill sold the same property to George L. Parks.Later on the,
the municipality of Tarlac transferred their rights in the property to the Province of Tarlac.
Parks filed a complaint seeking the annulment of the donation and asking that he be declared the
absolute owner of the property. Parks allege that the conditions of the donation were not complied with.
ISSUE
Whether or not the donation was coupled with a condition precedent? W/N the action to revoke has
prescribed?
HELD
No. The condition to erect a school within six months is not a condition precedent. The characteristic of a
condition precedent is that the acquisiito of the right is not effected while said condition is mot complied
with or is not deemed complied with. Meanwhile nothing is acquired and there is only an expectancy of a
right. Consequently, when a condition is imposed, the compliance of which cannot be effected except
when the right is deemed acquired, such condition cannot be a condition precedent. In the present case
the condition that a public school be erected and a public park be made of the donated land could not be
complied with except after giving effect to the donation.
The action to revoke the donation has prescribed. The prescriptive periods are: 5 years for the revocation
by the subsequent birth of children, 1 year if by reason of ingratitude. If no special period is prescribed,
10 years, for an onerous donation following the law of contracts and general rules on prescriptions. The
donation was made in 1910, the cause of action accrued in 1911, while the action to revoke was filed
1924, twenty three years later.
Article 1182
March 25, 2016Leave a comment
 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. (1115)

Kung ang pagtupad ng kasunduan ay nakasasalay lamang sa umutang ito ay walang bisa. At kung ito
naman ay nakasalalay sa ikatlong tao, ang obligasyon ay magiging epektibo ayon sa pinaguutos ng
probisyon ng Batas.

Article 1183
March 25, 2016Leave a comment
Impossible conditions, those contrary to good customs or public policy and those prohibited by
law shall annul the obligation which depends upon them. If the obligation is divisible, that part
thereof which is not affected by the impossible or unlawful condition shall be valid.
Imposibleng kondisyon, na kasalungat ng magandang kinagisnang kaugalian o mga pampublikong
patakaran at mga pinagbabawal ng batas ay dapat ipawalang-bisa ang obligasyon o pananagutan na
naka salaysay sa kanila. Kung ang obligasyon ay nahahati, ang bahagi na hindi apektado ng imposible at
hindi makatarungang kondisyon ay may bisa.
Ang kundisyon na hindi gawin ang imposibleng bagay ay ipinagpapalagay na hindi napag kasunduan.
Discussion:
Possible Condition – capable of realization or actualization in accordance to
 –nature
 –law
 –public policy
 –good custom and morals
Impossible Condition – not in accordance to possible conditions
 Physically Impossible – contrary to the law of nature (nature of things or cannot be done)
 Juridically Impossible – contrary to law, morals, public policy and good custom
Effects of Impossible Conditions:
1. Conditional obligation void
2. Conditional obligation valid
3. Only affected obligation is void.
4. Only the condition void.
Impossible Conditions in Obligations distinguised from Impossible Conditions in Donations and
Wills
If there are impossible conditions impossed on the disposition on the donation or will, the same shall not
be considered written.
Art 727. Illegal or impossible conditions in simple remunaratory donations shall be considered as not
imposed.
Art 873. Impossible conditions and those contrary to law and good customs shall be considered as not
imposed and shall in no manner prejudice the heir, even if the testator should otherwise provide.
**no case cited
Case Illustration: Marcelino Galang, Guadalupe Galang vs. Court of Appeals, Ramon R. Buenaventura,
et.al.

Article 1184
March 25, 2016Leave a comment
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.
Ang kalagayan na ang ilang mga kaganapan mangyari sa isang takdang panahon ay maaaring mawala
na ang obligasyon hanggang sa dumating ang takdang panahon na ito ay wala ng bisa o kung ito ay
walang kadudaduda na ang pangyayari at hindi na mangyayari.
Martin v. Boyero
Facts: A sold B a parcel of land on condition that the price would be paid as soon as B had paid off the
mortgage and other debts of the estate. A waited for some time, but since B had not yet succeeded in
paying off the debts, A brought an action to cancel the sale.
Held: The sale will not be cancelled. There was no time stipulated here, and besides, B was trying his
best to comply with his agreement. So B must be given more time.
Article 1185
March 25, 2016Leave a comment
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. (1118)
Ang obligasyon para sa kondisyon na may mga pangyayari na hindi magaganap sa nakatakdang panahon ay
magkakaroon lamang ng bisa mula sa pagkalipas ng oras na nakasaad or kung naging malinaw na hindi na ito
maaaring mangyari.
Sakaling walang panahon ang naitakda, ang kondisyon ay dapat ituring na nangyari na sa panahong
napagnilayan, nang may pagsangalang-alang sa kalikasan ng obligasyon.
Discussion:
The condition that some even will not happen at a determinate time will make the obligation effective when:
a.) the determinate time has elapsed without the event having occured;
Illustration: Jun obligated himself to deliver a piece of land to Mario on the condition that Mario shall not run for
Vice-Mayor in their municipality within 9 years.
More than 9 years had elapsed without Mario running for Vice-Mayor. The obligation to deliver the piece of land
becomes effective.
b.) it has become evident that the event will not occur.
Illustration: Jun obligated himself to deliver a piece of land to Mario on the condition that Mario shall not run for
Vice-Mayor in their municipality within 9 years.
Before 9 years had elapsed, the Municipality became totally submerged by lahar and ceased to be a
municipality. The residents had to transfer to other municipalities. In this case, even before the lapse of 9 years it
is clear that the obligation has become effective because of the disappearance of the Municipality. It is not evident
that Mario can never run for Vice-Mayor anymore in that Municipality because it ceased to be one.
Article 1186
March 25, 2016Leave a comment
The condition shall be deemed fulfilled when obligor voluntarily prevents its fulfillment.
Ang kondisyon ay masasabing natupad na kung ang may obligasyon mismo ang boluntaryong pumigil sa pagtupad
nito.
Discussion:
This article refers to constructive fulfillment of the condition. For constructive fulfilment to operate, the following
requisites must be present:
(a) there is intent on the part of the obligor to prevent the happening of the condition
(b) the obligor actually prevents its fulfillment.
Hence, when the obligor committed an act voluntarily which is not intended to prevent the fulfillment of the
condition but nevertheless resulted to in the frustration of the condition, there is no constructive fulfillment.
Case Illustration: Labayen vs Talisay-Silay Milling Co. Inc. G.R. No. L-29298 (1928)

Article 1187
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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. (1120)
Ang epekto ng kondisyonal na obligasyon na magbigay, kapag ang kondisyon ay naisakatuparan na, dapat bumalik
ito sa araw na binuo ang obligasyon. Maliban na lang kapag ang obligasyon ay nagpatupad ng kapalit na gawain
sa bawat partido, ang bunga at tubo habang nakatigil ang kondisyon ay dapat naipalagay na upang magkaroon ng
parehong kabayaran. Kapag ang obligasyon ay nasa iisang parte lang, ang nangutang ay nararapat na
makatangap ng bunga at tubo, maliban na lang sa likas na kalagayan ng obligasyon dapat din na ipagpalagay na
ang intension ng taong gumagawa ng katulad nun ay magkaiba.
Sa obligasyon na dapat gawin at hindi dapat gawin, ang korte ang magpapasya sa bawat kaso, ang may bisa sa
nakaraan na epekto ng kondisyon ay naipatupad na.
 Discussion:
*This article is applicable only to suspensive conditions where there was fulfillment.
*The effects of conditional obligation to give shall retroact to the date of the constitution of the obligation if the
suspensive condition had been fulfilled.
Case Illustration: Rodrigo Enriquez Et. Al. vs. Soccoro Ramos
Article 1188
March 25, 2016Leave a comment
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.
(1121a)
Ang nagpapautang ay maari, mbago matupad ang kundisyon, ay gumawa ng nauukol na hakbangin upang
mapanatili ang kanyang karapatan.
Ang nagpautang ay maaaring mabawi ang anuman na naibayad kung ito ay sa pagkakamali mula sa suspensive
condition.
Pending the happening of the suspensive condition, the creditor cannot compel the debtor to perform the prestation.
All that the creditor has in the meanwhile is a mere expectancy contingent to the happening of the condition.
Remedies that the creditor may avail for the preservation of the prestation.
1. Action for prohibition restraining the alienation of the thing pending the happening of the suspensive condition;
2. Petition (with the appropriate Registry of property like land is involved), for the annotation of the creditor’s right;
3. Action to demand security if the debtor has become insolvent;
4. Action to set aside alienation made by the debtor in fraud of creditors; or
5. Action against adverse possessors to interrupt the running of the prescriptive period.
Article 1189
March 25, 2016Leave a comment
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. (1122)
Kung ang kondisyon o kasunduan ay naipatupad na at ang layunin nito ay ipagpaliban ang mga pananagutan ng
pagbibigay ng mga ito , ang mga sumusunod ay dapat ipatupad kung may mga pagbabago, pagkawala, o pagkasira
sa mga panahong suspensido ang kondisyon.
1. Kung ang bagay ay mawala na walang kasalanan ang may utang ang pananagutan ay mawawala din.
2. Kung ang pagkawala ng bagay ay kasalanan ng may utang, mananagot siya magbayad ng danyos at
ipagpapalagay ang gayon bagay ay hindi na muling mababawi pa.
3. Kung ang bagay ay kumupas o sumama na, ang may utang ay walang kasalanan, ang pagpapagawa o pagbabalik
ng dating kaanyoan ay sa sagutin ng nagpapautang.
4. Kung ang pagkupas o pagbaba ng halaga ay kagagawan o kasalanan ng may pagkakautang ang nagpapautang ay
magpapasiya upang pawalan saysay/kansilahin ang obligasyon at pagsasakatuparan noon na may kabayaran sa
danyos alin man sa dalawa ang pipiliin nya.
5. Kung ang bagay ay umunlad ng natural o ng panahon, ang kaunlaran ay sa pakinabang ng nagpapautang.
6. Kung ang pagunlad ay kagagawan ng may utang wala siyang karapatan maliban sa karapatan ipinagkaloob ng
usufructuary o pag bibigay ng karapatan upang magamit ito.
Case Illustration: YHT Realty Corporation, Erlinda Lainez & Anicia Payam vs. The Court of Appeals & Maurice
McLoughlin
Article 1190
 March 25, 2016Leave a comment
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.
Kung sakalit ang mga kondisyon ay hindi naisakatuparan na siyang naging sanhi sa pagbabalewala ng kasunduan,
ang anumang naibayad o naibigay ng bawat partido ay kinakailangang magsaulian.

Discussion:
Paliwanag sa Pamamagitan ng Halimbawa: Si Pedro at Juan ay nagkasundo na bibilhin ni Juan ang palayan na mga
isang ektarya ni Pedro kung ito ay hindi dadaanan ng highway road. Nagbigay na ng paunang bayad si Juan kay
Pedro ngunit ng mga isang taon ay natuloy ang proyekto ng gobyerno kayat kinakailangang ibigay ni Pedro ang
pera ibinigay ni Juan.

Article 1191
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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. (1124)
May kapangyarihang bawiin o ipawalang bisa ang isang kasunduan na ipinapahayag sa palitan ng
obligasyon, kung ang isa sa may pananagutan ay hindi tumupad sa mga nrarapat niyang gawin.
Ang nasugatang partido ay maaring pumili sa pagsasakatuparan o ang pag-bawi ng obligasyon na may
parehas na katapat na kabayaran para sa danyos. Maaring piliin ang ikalawa kung an ang
pagsasakatuparan ng obligasyon ay imposible.
Ang hukuman ang mag uutos ng pagpapawalang bisa na hinihingi maliban kung may makatarungang
dahilan para payagan ang pagtatakda ng tiyak ng panahon.
Ito ay nauunawaan ng walang pinsala sa karapatan ng taong walang kinalaman na siyang nakakuha ng
pag mamay-ari ng bagay na naaayon sa Article 1385 at 1388 at ng Mortgage Law.
Rescission referred to in this Article is RESOLUTION or cancellation of the contract which is:

A principal action that is based on breach of a party, (while rescission under Art. 1383 is
a subsidiary action limited to cases of rescission for lesion under Art. 1381 of the New Civil Code).

Abrogate and undo a contract from the beginning

Annul the contract and Restore the parties to the relative positions which they would
have occupied if no such contract had ever been made.

Requires mutual restitution of the benefits received

Breach of Contract – Failure of a party without legal reason/excuse to comply with the terms of a
contract incumbent upon him.
Breach of Faith – the obligor’s failure to comply with an obligation already extant, not a failure of
a condition to render binding that obligation. There can be no rescission of an obligation that is
non-existent, considering that the suspensive condition therefore has not yet happened.
Application:
-Article on applies to Reciprocal Obligations where both parties are mutually Debtor & Creditor of each
other in the same transaction.
[ill. A Contract of Sale of a Brand New Laptop is entered into between Jericho (Buyer) and
Jayson (Seller) at the price of P50,000.00. In absence of stipulation, the delivery of the laptop by
Jayson is conditioned upon the payment of the purchase price by Jericho or vice versa. Jayson, being
the owner and seller of the laptop is the creditor as to the purchase price and debtor as to the laptop.
Whereas, Jordan being the buyer, is the creditor as to the laptop and debtor as to the purchase price.]
Non-Payment of the purchase price constitute a very good reason to rescind a contract of sale.
Article 1191 is not Applicable to the ff:
 Sales of Real Property by Installments (Maceda Law RA 6552 governs)
 Sales of Personal Property by Installments (Recto Law) ** If the sale is not by installment Art 1191
applies**
 Contracts of Partnership (Law on Partnership)
Remedies Available to the Aggrieved Party
1.Specific performance or fulfillment of the obligation with damages;
2.Rescission of the contract with damages
*The injured party cannot seek both, except:
If fulfillment had been chosen but the the same had become impossible, rescission may still be
sought.(Art 1191 par 2)
If there is a valid basis for the extension of the performance of reciprocal obligation, the court will not
decree rescission but will rather fix a period for the fulfillment of the obligation. (Art. 1191 par 3)
The Power to Rescind an Obligation
ü The party who has the right to cancel or resolve the reciprocal obligation in case of non-
fulfillment on the part of one contracting parties.
ü The party who is ready, willing and able to comply with his own obligations
ü The party who is in the position to return whatever he may be obliged to return to the other
party
In reciprocal obligations, the power to (rescind) resolve is given to the injured/aggrieved party because
the party who is at wrong cannot use his own wrong for his own benefit or protection.
**RTC has the jurisdiction over cases of rescission**
Restrictions:
1.Due Process must be observed; “the court shall decree the rescission , unless, there be a just cause
authorizing a period fixing it” (Art 1191 par 3)
2. Right to rescind is subordinated to the rights of third persons who acquired the thing in good faith (Art
1191 par4)
3. He must respect the power of the Court to fix period in lieu of decreeing decision
4. Slight breaches of the contract will not justify rescission
Case Illustrtation: Adelfa S. Rivera, Cynthia S. Rivera, and Jose S. Rivera vs. Fidela del Rosario
(deceased and substituted by her co-respondents), and her children, Oscar Rosita, et.al.
Article 1192
March 25, 2016Leave a comment
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.
Sa kasong parehong partido ay magkasala ng paglabag ng mga obligasyon, ang pananagutan ng unang
infractor ay magakaparehong sa pamamagitan ng mga korte. Kung hindi ito ay maaaring tinutukoy kung
alin sa mga partido unang lumabag sa kontrata, ang parehong ay dapat ituring mawala, at ang bawat ay
magpapasan ng kaniyang sariling mga pinsala.
Grace Park Engineering Co., Inc. vs. Dimaporo
Held: The findings of the fact of the trial court that the appellant Dimaporo and appellate corporation have
committed a breach of obligation are fully supported by the evidence on record. As we have stated, We
are not in a position to disturb the same. Therefore, it correctly applied Article 1192 of the New Civil Code
to the effect that in case both parties have committed a breach of obligation and it cannot be determined
who was the first infractor, the court shall be deemed extinguished and each shall bear his/its own
damages, Consequently, the trial court committed no reversible error when it ordered appellee
corporation to pay appellant the amount of P15,570.00 representing partial payment of the purchased
price of the machinery and equipment. This is but a consequence of the decree of rescission granted by
the trial court. Neither did it commit any error when it refused to grant any interest on the aforesaid
amount of P15,570.00. This is also but a consequence of the enunciated rule that each party should bear
his/its own damages.

OBLIGATIONS WITH A PERIOD

Article 1193
 March 25, 2016Leave a comment
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. (1125a)
Ang mga obligasyon na kung saan ang katuparan ay naitakda na sa tiyak na araw ay mahihingi lamang
sa pagdating ng araw na naitakda.
Ang mga obligasyon na may resolutory period ay magkakabisa agad, ngunit ito ay matatapos sa
pagdating ng tiyak na araw.
Ang tiyak na araw ay malinaw na kailangang dumating, bagaman maaaring hindi alam kung kailan.
Kung may pag-aalinlangan sa pagdating ng araw na ito o hindi, ang obligasyon ay kondisyonal, at ito ay
pinapatakbo ng patakaran ng susunod na seksyon.
Discussion:
Period and term have the same meaning and are used interchangeably. It consists in a space or length
of time upon the arrival of which, the demandability or extinguishment of an obligation is determined.
General classification of terms or period in Roman Law
1. Ex Die – a term or period with a suspensive effect, which means the obligation becomes effective only
from the arrival of a certain day.
Illustration: Joey promises to support Rachel from the death of Rachel’s father, which means the
obligation only begins from the death of Rachel’s father.
2. In Diem – a term or period with a resolutory effect, which means the obligation will subsist up to a
certain day and it terminates upon the arrival of that day.
Illustration: Joey promises to support Rachel until Rachel reaches her majority age, which means the
obligation is already effective but will terminate once Rachel turns 18.
Other classifications:
1. Legal – when period is fixed by law;
2. Voluntary – when the period is agreed upon by the parties;
3. Judicial – when the period is fixed by the court for the performance of the obligation or for its
extinguishment
“On or About Period”
“On or about” a given date means only a few days after the stated date, but not a remote date or one
fixed by the obligor.
Requisites for a valid term or period:
1. It must be future;
2. It must be certain, that is, sure to come but may be extended by mutual agreement;
3. It must be possible physically and legally.
Case Illustration: Compañia General De Tabacos De Filipina vs. Araza (7 Phil 455)
La Compañia General De Tabacos De Filipina vs. Vicente Araza (7
Phil. 455)
March 25, 2016
G.R. No. 3019 February 9, 1907
LA COMPAÑIA GENERAL DE TABACOS DE FILIPINA, plaintiff-appellee,
vs.
VICENTE ARAZA, defendant-appellant.
T. L. McGirr for appellant.
Domingo Franco for appellee.
WILLARD, J.:
FACTS
The plaintiff brought this action in the court below to foreclose a mortgage for 8,000 pesos upon certain
land in the Province of Leyte. The contract send upon was executed on the 11th day of June, 1901. By
terms thereof the defendant promised to pay the plaintiff 8,000 pesos as follows: 500 pesos on the 30th
of June, 1901, and the remainder at the rate of 100 pesos a month, payable on the 30th day of each
 month, until the entire 8,000 pesos was paid. The defendant paid 400 pesos and no more. The suit was
commenced on the 12th day of June, 1903.
ISSUE
Whether or not the creditor can recover the said installment and the entire indebtedness.
HELD
There was no provision in the contract by which, upon failure to pay one installment of the debt, the
whole debt should thereupon become at once payable. We are of the opinion that the obligation can be
enforced in this action for only the amount due and payable on the 12th day of June, 1903.
The court below gave no credit for the payment of 400 pesos admitted by the complaint to have been
received by the plaintiff. It is allowed interest upon the entire debt from the 1st day of July, 1901. The
contract does not provide for the payment of any interest. There is no provision in it declaring expressly
that the failure to pay when due should put the debtor in default. There was therefore no default which
would make him liable for interest until a demand was made. (Civil Code, art. 1100; Manresa, Com. on
Civil Code, vol 8, p. 56.) The transaction did not constitute a mercantile loan and article 316 of the Code
of Commerce is not applicable. There was no evidence any demand prior to the presentation of the
complaint. The plaintiff is therefore entitled to interest only from the commencement of the action.
The judgment is set aside and the case is remanded to the court below with directions to determine the
amount due in accordance with the views hereinbefore expressed and to enter judgment for such
amount. No costs will be allowed to either party in this court.
Article 1194
March 25, 2016
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.
Sa oras ng pagkawala, pagkasira o pagpapabuti ng gamit bago dumating an tinakdang araw, ang mga
patakaran na nasa Artikulo 1189 ang dapat sundin.
Discussion:
This article speaks of loss, deterioration or improvement of the thing before the arrival of the day certain.

Condition of the Thing Effect

Lost*

 Without fault of the debtor Obligation is extinguished

 Fault of the debtor Obligation to pay damages

Deteriorates

 Without fault of the debtor The impairment is borne by the creditor

The creditor may choose to rescind with indemnity for

 Fault of the debtor damages, or have it fulfilled, but still with indemnity
for damages

Improvement

 By its nature Inures to the benefit of the creditor

The debtor shall have no other right than that granted

 At the expense of the debtor
to the usufructuary.
*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.
Illustration:
Jay obliged himself to sell his yacht to Zola at half its purchasing price on Zola’s graduation, provided
Zola graduates on time. On April 25, 2016, Zola graduated, on time and with honors. However, the day
before his graduation, Typhoon Hayan destroyed the yacht. Since the loss happened before the day
certain, and the loss was due to a fortuitous event, the obligation of Jay to sell his yacht to Zola is
extinguished.
 Article 1195
March 25, 2016Leave a comment
Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or
believing that the obligation has become due and demandable, may be recovered, with the fruits and
interests. (1126a)
Anumang bagay na nabayaran o naipadala bago dumating ang takdang panahon, ang nangutang na hindi alam
ang takdang panahon o naniniwalang ang obligasyon ay tapos na at nagawa na, ay maaring maibalik pa kasama
ang bunga at interest.
Discussion:
*Situations when there can be no recovery even if conditions in the article are present;
1. When the obligation is reciprocal and there has been premature performance on both sides;
2. when the obligation is a loan on which the debtor is bound to pay interest: and.
3. When the period is exclusively for the benefit of the creditor because the debtor by paying in advance loses nothing.
Note: There is no case indicated on this article.
Illustration:
On December 10, 2015 Nitzel owed 150,000.00 to Digna then the debtor agreed to pay the sum of 150,000.00 with
1% monthly interest or 12% per annum. Then on January 5, 2016 Nitzel thought that her obligation is already due
and demandable therefore she paid her debt to Digna with the sum of 150,000.00 plus the 12% interest. On this
case, since Nitzel is unaware of the period, she can recover the interest that she paid to Digna because it state on this
article that “the obligor being unaware of the period or believing that the obligation has become due and
demandable, may be recovered, with the fruits and interests.”
Article 1196
March 25, 2016Leave a comment
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. (1127)
Kung kailan sa isang obligasyon may panahon na itinalaga iyon ay ipinagpapalagay na itinakda para sa
pakinabang ng magkapwa ang nagpapautang at ang nangungutan, maliban kung kula sa usapan na katulad at
ibang pangyayari iyon ay maipapakita na ang panahon ay itinalaga para sa pakinabang ng isa o sa kabila.
Presumption when a period is designated.
When a period is designated in the performance of an obligation, it is presumed that the period is intended for the
benefit of both the creditor and debtor such as a loan with interest.
Reasons why creditor cannot be compelled to accept before the arrival of the period.
1. Payment of interest. The interest expected to be realized will be lessen if premature payment is done;
2. Desire of the creditor to have his money invested safely instead of having it in his hands.
3. Under the usury law, there is a special prohibition of payment of interest in advance for more than a year.
Case
ABESAMIS VS. WOODCRAFT WORKS, INC.
FACTS:
This case was a contract in the delivery of logs before the end of July 1951 but not earlier than April of same year as
an option depending on availability of logs and vessels between Woodcraft Works and Abesamis Shipping. The
failure of the appellant to send vessels to Dolores, Samar was because of the storm that swept away all the log on
May 5, 1951. Under contract the delivery period of date was accomplished and that have been agreed to avoid the
storm. Woodcraftworks sued Abesamis to bear all loss as a result of typhoon
ISSUE:
Whether or not Abesamis is liable to pay of the loss?
HELD:
As a consequence of typhoon that struck on May 5 there was yet no delay on the part of the Abasamis. The
obligation between parties are the reciprocal one, appellant to furnish the vessel and appellee to furnish the logs. It
was also the obligation to benefit both parties. The period that agreed upon are decided to actually avoid
typhoons.The corresponding loss must be shouldered by the appellee.
Article 1197
March 25, 2016Leave a comment
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. (1128a)
Kapag ang obligasyon ay hindi nagtalaga ng tiyak na panahon, subalit mula sa kanyang natural at mga pangyayari
iyon ay maipagpapalagay na ang panahon ay binalak, ang hukuman ang siyang mag tatakda ng lawig noon.
Ang hukuman ang siya rin magtatakda nang haba ng panahon kung iyon ay sasang ayon sa kagustuhan ng may
utanag lamang.
Sa bawat pangyayari, ang mga hukuman ang siyan mag papasiya sa gayong panahon sa ilalim ng pangyayaring
mamari iyon ang balakin ng mga partido. Kapag naitalaga na ng hukuman, ang panahon itinakda ay hini na maari
pang baguhin nila.
Example:
No breach or violation is committed before period for fulfillment of obligation is fixed by the court.
Facts:
Under the lease contract executed between R (lessor) and E(lessee), upon the expiration of the lease for 20 years,
the factory building to be constructed by E shall belong to R. The building constructed by E was destroyed by fire.
E could not rebuild the building because the insurance proceeds were not yet paid. R filed a suit for ejectment.
Issue: Is the action of R proper?
Held: No. His remedy is to institute an action so that the court can fix the period for the reconstruction of the burned
building. Only after a competent court shall have fixed such period in a proper action pursuant to the provisions of
Article 1197 can there be a breach or violation of the lease contract entered into R’s complaint for ejectment is
dismissed.
Article 1198
March 25, 2016Leave a comment
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;

(5) When the debtor attempts to abscond. (1129a)

Mawawala ang lahat ng karapatan ng umutang upang magamit ang panahon na itinakda sa kanya kung:
1.) Hindi man lang siya nakapagbayad ng kanyang pagkakautang sa panahong ibinigay sa kanya maliban kung
nagbigay siya ng prenda para sa kanyang utang;
2) kung hindi man lang nagbigay ng anuman kasigurahan ng pagbabayad ang umutang;
3) kung dahil din sa kanyang kapabayaan ang nasabing prenda ay nawala dahilan sa mga pagkakataong hindi
sinasadyang pagkakataon maliban kung ito kanyang pinalitan kaagad;
4) kung ang umutang ay nagtangkang tumakas sa kanyang pagkakautang
 .

Article 1204
March 25, 2016Leave a comment
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. (1135a)
Ang nagpautang ay may karapatan para sa kabayaran sa danyos kung, sa sala ng nangutang,
lahat ng mga bagay na maaring maging kabayaran ay wala na, o kung ang pagsasagawa ng
obligasyon ay naging imposible.
Ang kabayaran ay malalaman sa halaga ng huling bagay na nawala, o mula sa huling puwedeng
maging serbisyo na naging imposible gawin.
Danyos maliban sa halaga ng huling bagay o huling serbisyo na puwedeng maibigay o
maisagawa ay maari din na maibigay.
 If the impossibility is caused by the fault of the debtor, the law is clear. The creditor is entitled to
indemnity for damages
When only one or some of the prestation had been lost or become impossible, the creditor cannot claim
indemnity for damages because the debtor, who has the right of choice, may still perform any of the
remaining alternative prestation.

ALTERNATIVE OBLIGATIONS

Article 1199
March 25, 2016Leave a comment
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)
Ang taong kahaliling mananagot sa ibat-ibang kabayaran o pananagutan ay kailangan kumpletong isagawa ang
isa sa kanila.
Ang Nagpapautang ay hindi maaring piliting tumanggap ng bahagi ng isa at ng iba pang pananagutan.
Discussion:
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.
Case Illustration: Felipe Agoncillo, and his wife, Marcela Mariño vs. Crisanto Javier, Florencio Alana, and Jose
Alano
Felipe Agoncillo, and his wife, Marcela Mariño vs. Crisanto Javier,
Florencio Alana, and Jose Alano
March 16, 2016
G.R. No. L-12611 August 7, 1918
FELIPE AGONCILLO, and his wife, MARCELA MARIÑO, plaintiff-appellees,
vs.
CRISANTO JAVIER, administrator of the estate of the late Anastasio Alano. FLORENCIO ALANO
and JOSE ALANO, defendants-appellants.
FACTS
On February 27, 1904, Anastasio Alano, Jose Alano, and Florencio Alano executed in favor of the
plaintiff, Da. Marcela Mariño, a document of the following tenor:
We, the undersigned, Jose Alano and Florencio Alano (on our own behalf), and Anastasio Alano (on
behalf of his children Leonila, Anastasio and Leocadio), the former and the latter testamentary heirs of
the Rev. Anastasio C. Cruz, deceased, hereby solemnly promise under oath:
1. We will pay to Da. Marcela Mariño within one year from this date together with interest thereon at the rate
of 12 per cent per annum, the sum of P2,730.50, Philippine currency, this being the present amount of
indebtedness incurred in favor of that lady on the 20th of April 1897, by our testator, the Rev. Anastasio
C. Cruz;
2. To secure the payment of this debt we mortgage to the said Da. Marcela Mariño the house and lot
bequeathed to us by the deceased, situated in this town, on calle Evangelista, formerly Asturias,
recorded in the register of deeds on the twenty-second of April, 1895, under number 730;
3. In case of insolvency on our part, we cede by virtue of these presents the said house and lot to Da.
Marcela Mariño, transferring to her all our rights to the ownership and possession of the lot; and if the
said property upon appraisal at the time of the maturity of this obligation should not be of sufficient value
to cover the total amount of this indebtedness, I, Anastasio Alano, also mortgage to the said lady my four
parcels of land situated in the barrio of San Isidro, to secure the balance, if any; the title deeds of said
property, as well as the title deeds of the said house and lot are this day delivered to Sr. Vicente Ilustre,
general attorney-in-fact of Da. Marcela Mariño.
In witness whereof we have signed these presents in Batangas, this twenty-seventh day of February,
1904. (Signed Jose Alano Jose Alano, and Florencio Alano) xxx.
No part of the interest or of the principal due indicated above has been paid, except P200 paid in the
year 1908 by the late Anastasio Alano.
In 1912, Anastasio Alano died intestate. At the instance of one of his creditors, proceedings upon the
administration of his estate were had in the Court of First Instance of Batangas. By order dated August 8,
1914, the court appointed an administrator and a committee to hear claims. Notices were published, as
required, in a newspaper of general circulation, to inform the creditors of the time and place at which they
might appear to present their claims against the estate of the deceased The time designated in the
notice for the presentation of claims expired on March 24, 1915. It appears that no claims whatever were
presented to the committee, and it having been shown to the court, by the statement of the administrator,
that the claim of the creditor at whose instance the administration proceeding was commenced, had been
settled by the heirs, the administrator was discharged and the proceeding terminated by order dated
November 8, 1915.
On April 27, 1916, Dra. Marcela Mariño, and upon the statement, made on her behalf, that she was a
creditor of the deceased and that her claim was secured by mortgage upon real estate belonging to the
said deceased, the court reopened the intestate proceeding, and appointed one Javier to be
administrator of the estate. No request was made for a renewal of the commission of the committee on
claims. The appellants Jose and Florencio Alano objected to the appointment of Javier, but their
objection was overruled by the court.
On March 17, 1916, the plaintiffs filed the complaint in this action against Javier, as administrator of the
estate of Anastasio Alano and against Florencio Alano and Jose Alano personally. The action is based
upon the execution of the document of February 27, 1904, which is transcribed literally in the complaint
that defendants have paid no part of the indebtedness therein acknowledged, with the exception of the
P200 paid on account in 1908.
On April 22, 1910, the debtors promised in writing that they would pay the debt in 1911, but that they had
failed to do so. The prayer of the complaint is that, unless defendants pay the debt for the recovery of
which the action was brought, they be required to convey to plaintiffs the house and lot described in
paragraph two of the said document; that this property be appraised; and that if its value is found to be
less than the amount of the debt, with the accrued interest at the stipulated rate, judgment be rendered in
favor of the plaintiffs for the balance. No relief is requested with respect to the undertaking of Anastasio
Alano expressed in the third paragraph of the document in suit, as guarantor for the payment of the
difference, if any, between the value of the said house and lot and the total amount of the indebtedness.
The defendants answered denying the facts alleged in the complaint, and setting up, as special defenses
that (1) any cause of action which plaintiff might have had against the estate of Anastasio Alano has
been barred by failure of the plaintiff to present her claim to the committee on claims for allowance; (2)
that the document upon which plaintiff relies does not constitute a valid mortgage; and (3) that as to all of
the defendants, the action is barred by the general statute of limitations.
The findings of the trial court upon the evidence were substantially as follows:
1. That the document set forth in paragraph two of plaintiffs’ complaint was executed by the deceased,
Anastasio Alano, and by the defendants Javier and Jose Alano, as alleged;
2. That one year after the execution of the document, plaintiffs made a demand upon Anastasio Alano,
deceased, and the other two defendants herein, to comply with the terms of the agreement by the
execution of the conveyance of the house and lot, but that they requested an extension of time for the
payment of the debt, which was granted them;
3. That on March 27, 1908, the defendants paid P200 on account of the debt.
Upon these findings the court gave judgment for plaintiffs, and from that judgment the defendants have
appealed to his court.
Appellants contend that the contract evidenced by that instrument is merely a loan coupled with an
ineffectual attempt to create a mortgage to effect the payment of debt. The court regarded it as a
conveyance of the house and lot described in the contract, which took effect upon the failure of the
debtors to pay the debt.
The principal undertaking evidenced by the document is the payment of money. The attempt to create a
mortgage upon the house and lot described in the second clause of the contract is invalid, as it is
admitted that the so-called mortgage was never recorded.
The agreement to convey the house and lot at an appraised valuation in the event of failure to pay the
debt in money a t 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. 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 at maturity, simply
provided that if the debt is not paid in money it shall be paid in another specific was by the transfer of
property at a valuation.
The contract now under consideration is not susceptible of the interpretation that the title to the house
and lot in question was to be transferred to the creditor ipso facto upon the mere failure of the debtors to
pay the debt at its maturity. The obligations assumed by the debtors were alternative, and they had the
right to elect which they would perform (Civil Code, art. 1132).
Under the terms of the contract, the liability of the defendants as to the conveyance of the house and lot
is subsidiary and conditional, being dependent upon their failure to pay the debt in money. It must follow,
therefore, that if the action to recover the debt has prescribed, the action to compel a conveyance of the
house and lot is likewise barred, as the agreement to make such conveyance was not an independent
principal undertaking, but merely a subsidiary alternative pact relating to the method by which the debt
might be paid.
ISSUE
Is the failure of the plaintiff to present her claim for allowance to the committee on claims barred her
action so far as this defendant is concerned.
HELD
The judgment of the lower court is reversed and the action is dismissed as to all the defendants. No costs
will be allowed.
This conclusion makes it unnecessary to consider the effect of the payment made by Anastasio Alano in
1908 as regards the interruption of the period of prescription with respect to him. In this connection,
however, we feel constrained to remark that a careful reading of the document makes it extremely
doubtful whether Anastasio Alano was ever personally bound by its terms. It will be noted that he
purports to have signed it only as the representative of his children, Leonina, Anastasio, and Leocadio,
who are not parties to this suit.
With respect to the defendants Florencio and Jose Alano, their original liability admits of no dispute and
the only question open for consideration is that presented by their plea of prescription. The debt matured
February 27, 1905, and as the complaint was not filed within ten years from that date (Code of Civil
Procedure, sec. 43), it is obvious that the plea of prescription is well-taken, unless the running of the
statute was interrupted.
While it appears that some verbal and written demands for payment were made upon these defendants,
it has been recently decided, upon mature consideration, that an extrajudicial demand is not sufficient,
under the law as it now stands, to stop the running of the statute. There must be either (1) a partial
payment, (2) a written acknowledgment or (3) a written promise to pay the debt. It is not contended that
there has been any written acknowledgment or promise on the part of the defendants Jose and Florencio
Alano, or either of them — plaintiff relies solely upon the payment made in 1908 by Anastasio Alano. But
there is not the slightest foundation in the evidence for the belief that the payment made by Anastasio
was for the benefit of Jose or Florencio or that it was authorized by either of them. Bearing in mind the
express declaration of article 1138 of the Civil Code that joint (mancomunada) obligations are, as regard
each of the debtors, to be reputed as separate debts with respect to each of the debtors, it follows of
necessity that a payment or acknowledgment by one of such joint debtors will not stop the running of the
period of prescription as to the others. That such is the law may be demonstrated by ample authority.
The statement that Florencio Alano was with Anastasio at the time is not in itself sufficient to constitute
proof that the payment was made for his benefit.
Plaintiff argues that the undertaking to convey the house and lot constitutes an indivisible obligation, and
that even where the promise is not in solidum, the concurrence of two or more debtors in an obligation
whose performance is indivisible creates such a relation between them that the interruption of
prescription as to one of necessity interrupts it as to all. The distinction is one which is well-established,
although the authorities cited do not fully support plaintiffs’ contentions, but in this particular case the
question is academic, for the undertaking is in the alternative to pay a sum of money — an essentially
divisible obligation — or to convey the house. As the alternative indivisible obligation is imposed only in
the event that the debtors fail to pay the money, it is subject to a suspensive condition, and the
prescription of the obligation whose non-performance constitutes the condition effectively prevents the
condition from taking place.
The evidence in this case shows that plaintiff has been extremely lenient with defendants and has
refrained from pressing her claim against them when it fell due, and for a long period of years thereafter,
purely out of consideration for them. The defense of prescription interposed, particularly as regards Jose
and Florencio Alano, is an indefensible from the standpoint of fair dealing and honesty as it is
unassailable from the standpoint of legal technicality.
Article 1200
March 25, 2016Leave a comment
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
March 25, 2016Leave a comment
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:
1. the court will make the choice;
2. the court may order the debtor, or
3. 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.
Case Illustration: Ong Guan Can vs. The Century Insurance Co. (40 Phil. 192)
Ong Guan Can vs. The Century Insurance Co. (40 Phil. 192)
March 25, 2016
G.R. No. L-21196 February 6, 1924
ONG GUAN CAN, plaintiff-appellee,
vs.
THE CENTURY INSURANCE COMPANY, LTD., defendant-appellant.
Eiguren and Razon for appellant.
Montinola, Montinola and Hontiveros for appellee.
JOHNSON, J.:
FACTS
The defendant failed to make the appearance within the time prescribed by law due to a fact over which
the defendant had no control. The defendant mailed its appearance at a time when in the ordinary
course of events it would have reached the hand of the clerk of the court on or before the expiration of
the time within which it was obliged to make its appearance.
ISSUE
Whether or not the lower court erred in holding that the purpose of notice to the other party is to give him
the opportunity to express his consent or to impugn the selection made.
HELD
It has been frequently decided that, if pleadings or other papers essential to a case are entrusted to the
mails in due season and under proper precaution and are lost or miscarried, it will be ground for vacating
a judgment by default. (Boyd vs. Williams and Overbaugh, 70 N.J. Law, 185; Corning vs. Tripp, 1
Howard’s Practice [N.Y.], 14; Williams vs. Richmond, etc. Railroad Co., 110 N. C., 466; Chicago, etc.
Railway Co. vs. Eastham, 30 L.R.A. [N.S.], 740; 23 Cyc., 943; 15 Ruling Case Law, 708.)
A delay of mail, such as occurred in the present case, in our opinion amounts to accident or surprise for
which judgments by default may be set aside, especially when the defendant shows by affidavit or
otherwise that he has a valid and meritorious defense. The time fixed for filing papers in a cause is
generally directory and the court always has it in its power, in the exercise of a proper discretion, to
extend the time fixed by law whenever the ends of justice would seem to demand such an extension.
(Wood vs. Fobes and Farnham, 5 Cal., 62.)
Considering the causes which prevented the defendant from making its appearance within the time
prescribed by subparagraph 2 of article 392 of Act No. 190 and considering its showing that, if permitted
to answer, it has a meritorious defense, we are of the opinion, and so decide, that the judgment by
default rendered by the lower court should be and is hereby set aside, and it is hereby ordered and
decreed that the defendant’s appearance be admitted and that it be given ten days in which to answer
from notice of this decision. And without any findings as to costs, it is so ordered.
Article 1202
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The debtor shall lose the right of choice when among the prestations whereby he is alternatively
bound, only one is practicable.
Mawawala ang karapatan ng nangutang na mamili kung sa mga alternatibong prestation, isa lamang ang
maaring maisakatuparan.
Discussion:
When all of the prestations, except one, have become impossible or unlawful, the debtor loses his right of
choice. This is because the obligation loses its alternative character. It becomes a simple obligation.
Case Illustration:
Legarda vs Miailhe 88 Phil. 637 (1951)
Ponente: J. Bautista
Facts:
Legarda filed a complaint against the original defendant Burke, alleging his refusal to accept the payment
in discharge of a mortgage indebtedness in his favor. On his part, Burke contends that there is no cause
of action since Burke and Legarda had agreed that the interest will be condoned so that the payment will
be done after the termination of the war.
The trial court decided in favor of Legarda. A few months before liberation came. Burke instituted a
motion to set aside the decision and have a new trial. Before the court could act on the motion, liberation
came. In his supplemental answer, Burke allege that payment in Japanese military notes is null and void
and that he was not able to raise such allegations in the court since doing so may cause him to be
tortured or probably killed. He also allege that the option of payment is only in Philippine peso or English
currency.
On appeal, the Court decided that the supplemental answer should have been allowed and that a new
trial must ensue.
The court to which the case was remanded decided in favor of Burke’s heir. Hence, this appeal by
Legarda.
Issue: Whether or not the right of election (right to choose the currency of payment) has ceased to exist.
Held:
Yes. The right of election of the prestations has ceased to exist because the obligation of the debtor had
ceased to be alternative. The payment in English currency had become legally impossible since it was
outlawed by the Japanese Imperial Commander. In alternative obligations, there is no right to choose
undertakings that are impossible or illegal.
Tender of payment in the Japanese Military Note was a valid tender because it was the only currency
permissible at the time, and the same was made in accordance with the agreement because payment in
Japanese military note during the occupation is tantamount to payment in Philippine currency.
Article 1203
March 25, 2016Leave a comment
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. (n)
Kung ang ginawa ng nagpautang na kung saan ang nangutang ay walang kakayahang pumili na naayon
sa termino ng obligasyon, ang nangutang ay maaring pawalan ng bisa ang kontrata na may
danyos/pinsala.
*On this article the debtor may rescind the contract with damages if he could not make any choice in
accordance with the terms of the obligation, due to the creditor’s fault.
Note: There is no case indicated on this article.
Illustration:
Thina is a business woman, she own 5 story commercial building in Sta. Cruz and a beach resort in
Batangas. Then she want to renovate her 5 story building or her beach resort within the month, so she
heard a story about Jeirome a famous renovator that can renovate the old one to a better one for a
shorter period of time. They came to an agreement and Jeirome agreed that he will renovate either the 5
story commercial building or the beach resort for the amount of P1,000,000.00. However Thina sold her
beach resort to Mau. The alternative of renovating the resort has become impossible for Jeirome
because of the change of the ownership. Jeirome has now the option to renovate the building or rescind
the contract with damages, if he suffered any.
Article 1205
March 25, 2016Leave a comment
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. (1136a)
 Kung ang pagpli ay laharang ibinigay sa nagpautang ang obligasyon ay hindi na magiging alternative
mula sa araw na nakapili na ang nagpautang at nailahad ito. Bago mangyari iyon, and responsibilidad ng
nangutang ay pamumunuan ng mga sumusunod na alituntunin:
(1) Kung ang isa sa mga bagay ay nawala dahil sa hindi inaasang pangyayari, maari syang magbigay ng
ibang bagay na pipiliin ng nagpautang mula sa mga natitirang bagay, o kung ano man ang natitira kung
nag-iisa nalang ito.
(2) Kung ang pagkawala ng isa sa mga bagay ay dahil sa sala ng nangutang, ang nagpautang ay
maaring kumuha mula sa mga natitirang bagay, o sa pamamagitang ng presyo ng nawalang bagay dahil
sa sala ng nangutang na may karapatan para sa bayad para sa danyos.
(3) Kung ang lahat ng bagay ay nawala dahil sa sala ng nangutang, and pagpili ng nagpautang ay
maibabase sa mga presyo ng bawat isang bagay, kasama na rdito ang pagbabayad ng nangutang para
sa danyos.
Ang mga alituntunin na ito ay masasakop din ang mga obligasyon ng pag-gawa o hindi pag-gawa kung
sakaling isa, iilan o lahat ng mga prestation ay magiging imposible.
Discussion
This article refers to a case, when the right of choice belongs to the creditor. In alternative obligations, the
right of choice as a rule belong to debtor, however, a debtor ay expressly give the right of choice to the
creditor. I such case, the provisions with respect to debtor are laid down in the preceding article. Before
the creditor makes the selction, the debtor cannot incur in delay. The creditor can make a choice in case
wherein; 1) when the thing is lost through a fortuitous event; 2) when a thing is lost through debtors’
fault;3) when all the things are lost though debtor’s fault. This article is also applicable to a personal
obligation

Article 1206
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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. (n)

Ang pagkasira o ang pagbaba ng kalidad ng isang isang bagay na siyang dapat ay kapalit sa isang
obligasyon na nagging kagagawan ng umutang ay hindi nya kailangan pananagutan ngunit kung ito’y
naibigay na nagpautang, ito’y kailangan na nyang panagutan kung hindi ay pwede siyang makasuhan
base pagiging sa kanya pagpapaliban, kapabayaan o panloloko.
Article 1207
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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. (1137a)
Ang pagpayag ng dalawa o mahigit pang nagpapautang o dalawa o mahigit pang mga umutang sa iisa at parehas
na pananagutan ay hindi nangangahulugan na ang bawat isa sa mga nagpautang ay may karapatan maningil o
ang bawat isa sa mga may utang ay gampanan ang buong pagsasakatuparan ng kabayaran. Mayroon lamang
magkakasamang pananagutan kung ang obligasyon ay nagsasaad nito o hinihiling ng batas o ng lagay ng
obligasyon ang pagkakabuklod.
Discussions:
Classification of Obligation (Accdg. To # of parties)
1. Individual Obligation – there is only one debtor and one creditor in a contract
2. Collective Obligation – there are two or more debtor and two or more creditors
Kinds of Collective Obligations
1. Joint Obligation– where the whole obligation is to be paid or fulfilled proportionately by the different debtors and
demanded proportionately by the different creditors. This is the presumption in all collective obligation unless
solidarity is expressly stated.
2. Solidary Obligation– where each one of the debtors is bound render, and/or each creditor has the right to demand
from any of the debtors, the entire compliance with the prestation.
*Passive/solidarity on the part of the debtor
 *Active/solidarity on the part of the creditor
Consequences of Joint Obligation
1.Each debtor is liable only for a proportionate part of the entire debt;
[ill. Tin,Tina,Mau owed Jun 900K. There are 3 debts and 1 credit, In the absence of any agreement, the liability of
Tin, Tina & Mau is only 300K]
2.Each creditor, if there several, is entitled to a proportionate part of the credit.
[ill. Tin, Tina, Mau lend Jun 900K. 3 debts and 1 credit. Each of the creditor can collect 300K each.]
3.The demand made by one creditor upon one debtor, produces the effects of default only as between them, but not
with respect to the others.
4.The interruption of precription caused by the demand by one creditor upon one debtor , will not benefit the the co-
creditors; neither, will that demand interrupt the prescription of the obligation as to the other debtor.
5.The insolvency of a debtor will not increase the liability of his co-debtors. Neither , will it allow a creditor to
demand anything from the co-creditors.
6.The vices of each obligation emanating from the personal defect of a particular debtor or creditor will not affect
the obligation or rights of the others.
Consequences of Solidary Obligation
1. Passive Solidarity- one of the several debtors can be made liable for the payment or the performance of the entire
obligation. (full payment by any of the debtor extinguishes the obligation)
2. Active Solidarity- one of the solidary creditors can demand the payment or performance of the entire obligation
from the debtor or any of the debtors. (There is mutual representation w/ power to exercise the rights of others in the
same manner as their own rights)
Solidary liability cannot be presumed, the law recognizes the existence (1) When the obligation itself expressly
provides for solidarity, for the burden s now assumed voluntarily by the debtor/s who are supposed to take care of
their own concerns and affairs (Conventional Solidarity); (2)When the law expressly provides for solidarity for
which the law has its own legal reason for the imposition of solidarity (Legal Solidarity); (3)When the nature of the
obligation requires solidarity (Real Solidarity)
Some Legal Solidarity found in Civil Code
Art 927. If two or more heirs take possession of the estate, they shall be solidaryliable of the loss or destruction of
a thing devised or bequeathed , even though only one of them should have been negligent.
Art 1824. All partners are liable solidarily with the partnership for everything chargeable to the partnership under
Art 1822 & 1823.
Art 1911. Even when the agent hs exceeded his authority, the principal is solidaryliable with the agent if the
former allowed the latter to act as though he full powers.
Art. 2146. If the officious manager delegates to another person all or some of his duties, he shall be liable for the
acts of the delegate, without prejudice to the direct obligation of the latter toward the owner of the business.
The responsibility of two or more officious managers shall be solidary, unless the management was assumed to
save the thing or business from emminent danger.
Other Names or Statements Equivalent to Solidarity
1. Mancomunada Solidaria
2. De mancomun e insolidum
3. In solidum
4. Juntos or Separadamente
5. Jointly or severally
6. Individually & Collectively
7. Each to pay the whole value
8. “I promise to pay” signed by two or more debtors.
Case Illustration: Salvador P. Escaño and Mario M. Silos vs. Rafael Ortigas Jr.

Article 1208
March 25, 2016Leave a comment
If from the law, or the nature or the wording of the obligations to which of the preceding article refers the
contrary does not appear, the credit or debt shall be presumed to be divided into as many equal shares as
there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the
Rules of Court governing the multiplicity of suits.
Kung galling sa batas, o ang katangian o the mga salita ng obligasyon kung saan ang sinusundan na artikulo ay
hindi sumasang-ayon ay hindi Makita, ang utang ay maaaring magpalagay na ito ay ibahagi sa mas maring pantay
 na distribusyon para doon sa nagpautang at nangutang, ang mga utang ay may pagkakakilanlan sa bawat isa, at
sumasailalim sa Saligang Batas na syang namamahala para sa katakut-takot na demanda.
Compainia General de Tabacos v. Obed
Facts: A mother and her son borrowed money. Nothing was said in the contract regarding solidary liability. But in
the brief presented by the lawyer for mother and son, the two debtors unwittingly said they were solidarily liable.
Issue: Does the statement in the brief of the lawyer convert the joint obligation into a solidary one?
Held: No. The statement in the brief is immaterial. What must prevail is the contact in questions, and since nothing
is mentioned therein relating to solidarity, the obligation is only joint.
Article 1209
March 25, 2016Leave a comment
If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the
debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the
others shall not be liable for his share. (1139)
Kung ang paghahati ay imposible, ang karapatan ng mga nagpautang ay maaaring mapasama sa pamamagitan
lamang ng kanilang kolektibong kagagawan, at ang utang ay makukuha sa pamamagitan lamang ng paglilitis laban
sa mga nangutang. Kung ang isa sa mga nangutang ay hindi makakapagbayad, ang kanyang mga kasama
ay walang pananagutan sa kanyang bahagi.
Discussion:
Article 1209 applies to joint indivisible obligation because the prestation or object is not susceptible of division, and
solidarity is not provided.
According to Manresa, for joint indivisible obligation:
Debtors – the fulfillment of obligation requires the concurrence of ALL the debtors (each for his part)
Creditors – there has to be a collective action for acts which are deemed prejudicial to the rights of the creditors.
In case of breach of a joint indivisible obligation:
When there is plurality of debtors – compliance can be enforced by proceeding against ALL of the debtors. If one
of the debtors fails to perform, the obligation can no longer be fulfilled because the prestation or object is
indivisible. In indivisible prestation, division is not possible.
If such is the case, the obligation is then converted to an indemnity for damages. In paying for the indemnity, those
debtors who are ready to fulfill their obligation should not contribute beyond his or her share in the prestation or
object. The debtor who refused ot failed to comply shall shoulder all the damages suffered by the creditor/s due to
his non-performance.
Suppose the other debtors also suffered damages when the prestation was converted into indemnity for damages,
they may also recover damages from the erring debtor.
If one of the debtors become insolvent, the rest of the debtors shall not be liable for his share.
When there is plurality of creditors (but only one debtor) – the obligation can be performed only by the delivery
of the thing to all the creditors jointly. The debtor must not deliver to just one unless that particular person has been
authorize by all the creditors to receive the delivery. Otherwise, the debtor may be liable for damages due to non-
performance of the obligation in consideratino of the other creditors.
On the other hand, if only one creditor or some, and not all, are making the demand, the debtor can refuse to make
the delivery. Also, if one or some creditors refuse to accept the delivery, the debtor may resort to tender of payment
which is to be followed by proper consignation of the thing, to avoid any default.

Article 1210
March 25, 2016Leave a comment
The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity
of itself imply indivisibility.
Ang pagiging hindi nahahati ng obligasyon ay hindi ibig sabihin na may solidaryong obligasyon. Hindi rin
nito ibig sabihin na kung may solidaryong obligasyon, ay mayroon ding hindi paghahati ng obligasyon.
Discussion:
An indivisible obligation is one where the prestation or object cannot be performed by parts without
altering the essence or substance.
Indivisibility refers to the character of a subject matter or object of a contract which does not permit its
division or segregation without destroying its essence or substance.
Kinds of Indivisibility:
1. Legal indivisibility- indivisibility by operation of law
2. Conventional indivisibility- indivisibility by the agreement of the parties; an obligation which is divisible by
nature is made divisible by the will of the parties
3. Solidary obligation- obligation where each debtor is liable for the entire obligation, and each creditor is
entitled to demand the fulfillment of the whole obligation.
This refers to the vinculum or tie or relationship existing between the parties.
An obligation can be indivisible and solidary at the same time. Hence, an obligation can be:
1. Solidary divisible obligation
2. Solidary indivisible obligation
3. Joint indivisible obligation
4. Joint divisible obligation

Case Illustration: Escaño and Silos vs Ortigas Jr.

Article 1211
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Solidarity may exist although the creditors and the debtors may not be bound in the same manner
and by the same periods and conditions. (1140)
Ang pagkakaisa ay umiiral bagamat ang pinagkakautangan at ang nagkakautang ay maaring hindi
nakatali sa parehong paraan at sa parehong panahon at kondisyon.
Discussion:
Forms of Solidarity According to Sanchez Roman
1. Uniform Solidarity – when the debtors are bound by the same terms and conditions or stipulations.
2. Varied Solidarity – when the debtors while bound under the same obligation (like a loan) are not subject
to the same terms and conditions of payment but to different secondary stipulation or clauses.
Note: There is no case indicated on this article.
Illustration:
Nitz, Daisy and June obtained a Php 900,000.00 loan to Digna which they executed a promissory note
solidarily binding themselves to pay Digna under the following terms:
 Nitz will pay Php 300,000.00 with 12% interest on January 13, 2016;
 Daisy will pay Php 300,000.00 with 12% interest on February 13, 2016;
 June will pay Php 300,000.00 with 12% interest on March 13, 2016.
When January 13, 2016 comes, Digna can collect Php 300,000.00 with 12% interest from either Nitz,
Daisy or June but she cannot collect the whole amount because it is not yet due. The creditor must wait
until the maturity of the other amounts. She can still collect the amount in either of them when the next
maturity comes because the tie of the solidarity among the debtors is preserved and not affected by the
differences of the secondary terms and stipulations assumed.
Article 1212
March 25, 2016Leave a comment
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. (1141a)
Bawat isa sa mga pinagbuklod na may mga pautang ay maaaring gumawa ng may pakinabang sa
iba, ngunit hindi lahat na maaaring makasama sa iba nilang kasama.
A relationship of mutual agency exists by and among solidary creditors. The act of one will affect the
others because of their relationship. Solidary creditors may perform acts which are useful or beneficial to
the others. Every solidary creditor is benefited by the useful acts of one.
If a solidary creditor performs an act which is prejudicial to his co – creditor, the act may have a valid
legal effects, but the performing creditor shall be liable to his co – creditors.

JOINT AND SOLIDARY OBLIGATIONS

Article 1207
March 25, 2016Leave a comment
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. (1137a)
Ang pagpayag ng dalawa o mahigit pang nagpapautang o dalawa o mahigit pang mga umutang sa iisa at parehas
na pananagutan ay hindi nangangahulugan na ang bawat isa sa mga nagpautang ay may karapatan maningil o
ang bawat isa sa mga may utang ay gampanan ang buong pagsasakatuparan ng kabayaran. Mayroon lamang
magkakasamang pananagutan kung ang obligasyon ay nagsasaad nito o hinihiling ng batas o ng lagay ng
obligasyon ang pagkakabuklod.
Discussions:
Classification of Obligation (Accdg. To # of parties)
1. Individual Obligation – there is only one debtor and one creditor in a contract
2. Collective Obligation – there are two or more debtor and two or more creditors
Kinds of Collective Obligations
1. Joint Obligation– where the whole obligation is to be paid or fulfilled proportionately by the different debtors and
demanded proportionately by the different creditors. This is the presumption in all collective obligation unless
solidarity is expressly stated.
2. Solidary Obligation– where each one of the debtors is bound render, and/or each creditor has the right to demand
from any of the debtors, the entire compliance with the prestation.
*Passive/solidarity on the part of the debtor
*Active/solidarity on the part of the creditor
Consequences of Joint Obligation
1.Each debtor is liable only for a proportionate part of the entire debt;
[ill. Tin,Tina,Mau owed Jun 900K. There are 3 debts and 1 credit, In the absence of any agreement, the liability of
Tin, Tina & Mau is only 300K]
2.Each creditor, if there several, is entitled to a proportionate part of the credit.
[ill. Tin, Tina, Mau lend Jun 900K. 3 debts and 1 credit. Each of the creditor can collect 300K each.]
3.The demand made by one creditor upon one debtor, produces the effects of default only as between them, but not
with respect to the others.
4.The interruption of precription caused by the demand by one creditor upon one debtor , will not benefit the the co-
creditors; neither, will that demand interrupt the prescription of the obligation as to the other debtor.
5.The insolvency of a debtor will not increase the liability of his co-debtors. Neither , will it allow a creditor to
demand anything from the co-creditors.
6.The vices of each obligation emanating from the personal defect of a particular debtor or creditor will not affect
the obligation or rights of the others.
Consequences of Solidary Obligation
1. Passive Solidarity- one of the several debtors can be made liable for the payment or the performance of the entire
obligation. (full payment by any of the debtor extinguishes the obligation)
2. Active Solidarity- one of the solidary creditors can demand the payment or performance of the entire obligation
from the debtor or any of the debtors. (There is mutual representation w/ power to exercise the rights of others in the
same manner as their own rights)
Solidary liability cannot be presumed, the law recognizes the existence (1) When the obligation itself expressly
provides for solidarity, for the burden s now assumed voluntarily by the debtor/s who are supposed to take care of
their own concerns and affairs (Conventional Solidarity); (2)When the law expressly provides for solidarity for
which the law has its own legal reason for the imposition of solidarity (Legal Solidarity); (3)When the nature of the
obligation requires solidarity (Real Solidarity)
Some Legal Solidarity found in Civil Code
Art 927. If two or more heirs take possession of the estate, they shall be solidaryliable of the loss or destruction of
a thing devised or bequeathed , even though only one of them should have been negligent.
Art 1824. All partners are liable solidarily with the partnership for everything chargeable to the partnership under
Art 1822 & 1823.
Art 1911. Even when the agent hs exceeded his authority, the principal is solidaryliable with the agent if the
former allowed the latter to act as though he full powers.
Art. 2146. If the officious manager delegates to another person all or some of his duties, he shall be liable for the
acts of the delegate, without prejudice to the direct obligation of the latter toward the owner of the business.
The responsibility of two or more officious managers shall be solidary, unless the management was assumed to
save the thing or business from emminent danger.
Other Names or Statements Equivalent to Solidarity
1. Mancomunada Solidaria
2. De mancomun e insolidum
3. In solidum
4. Juntos or Separadamente
5. Jointly or severally
6. Individually & Collectively
7. Each to pay the whole value
8. “I promise to pay” signed by two or more debtors.
Case Illustration: Salvador P. Escaño and Mario M. Silos vs. Rafael Ortigas Jr.
Salvador P. Escaño and Mario M. Silos vs. Rafael Ortigas Jr.
March 16, 2016
G.R. No. 151953 June 29, 2007
SALVADOR P. ESCAÑO and MARIO M. SILOS, petitioner,
vs.
RAFAEL ORTIGAS, JR., respondent.
FACTS
On 28 April 1980, Private Development Corporation of the Philippines (PDCP) entered into a loan
agreement with Falcon Minerals, Inc. (Falcon) whereby PDCP agreed to make available and lend to
Falcon the amount of US$320,000.00, for specific purposes and subject to certain terms and
conditions. On the same day, three stockholders-officers of Falcon, namely: respondent Rafael Ortigas,
Jr. (Ortigas), George A. Scholey and George T. Scholey executed an Assumption of Solidary Liability
whereby they agreed “to assume in their individual capacity, solidary liability with Falcon for the due and
punctual payment” of the loan contracted by Falcon with PDCP. Two separate guaranties were executed
to guarantee the payment of the same loan by other stockholders and officers of Falcon, acting in their
personal and individual capacities. One Guaranty was executed by petitioner Salvador Escaño (Escaño),
while the other by petitioner Mario M. Silos (Silos), Ricardo C. Silverio (Silverio), Carlos L. Inductivo
(Inductivo) and Joaquin J. Rodriguez (Rodriguez).
Two years later, an agreement developed to cede (give up) control of Falcon to Escaño, Silos and
Joseph M. Matti (Matti). Thus, contracts were executed whereby Ortigas, George A. Scholey, Inductivo
and the heirs of then already deceased George T. Scholey assigned their shares of stock in Falcon to
Escaño, Silos and Matti. Part of the consideration that induced the sale of stock was a desire by Ortigas,
et al., to relieve themselves of all liability arising from their previous joint and several undertakings with
Falcon, including those related to the loan with PDCP. Thus, an Undertaking dated 11 June 1982 was
executed Escaño, Silos and Matti identified in the document as “SURETIES,” on one hand, and Ortigas,
Inductivo and the Scholeys as “OBLIGORS,” on the other. The Undertaking reads in part:
3. That whether or not SURETIES are able to immediately cause PDCP and PAIC to release OBLIGORS
from their said guarantees , SURETIES hereby irrevocably agree and undertake to assume all of
OBLIGORs’ said guarantees to PDCP and PAIC under the following terms and conditions:
1. Upon receipt by any of the OBLIGORS of any demand from PDCP and/or PAIC for the payment of
FALCON’s obligations with it, any of [the] OBLIGORS shall immediately inform SURETIES thereof so
that the latter can timely take appropriate measures;
2. Should suit be impleaded by PDCP and/or PAIC against any and/or all of OBLIGORS for collection of
said loans and/or credit facilities, SURETIES agree to defend OBLIGORS at their own expense, without
prejudice to any and/or all of OBLIGORS impleading SURETIES therein for contribution, indemnity,
subrogation or other relief in respect to any of the claims of PDCP and/or PAIC; and
3. In the event that any of [the] OBLIGORS is for any reason made to pay any amount to PDCP and/or
PAIC, SURETIES shall reimburse OBLIGORS for said amount/s within seven (7) calendar days from
such payment;
4. OBLIGORS hereby waive in favor of SURETIES any and all fees which may be due from FALCON
arising out of, or in connection with, their said guarantees.
Falcon defaulted in its payments. After PDCP foreclosed on the chattel mortgage, there remained a
subsisting deficiency of P5,031,004.07, which Falcon did not satisfy despite demand.
On 28 April 1989, in order to recover the indebtedness, PDCP filed a complaint for sum of money with
the Regional Trial Court of Makati (RTC) against Falcon, Ortigas, Escaño, Silos, Silverio and Inductivo.
The case was docketed as Civil Case No. 89-5128. For his part, Ortigas filed together with his answer a
cross-claim against his co-defendants Falcon, Escaño and Silos, and also manifested his intent to file a
third-party complaint against the Scholeys and Matti. The cross-claim lodged against Escaño and Silos
was predicated on the 1982 Undertaking, wherein they agreed to assume the liabilities of Ortigas with
respect to the PDCP loan.
Escaño, Ortigas and Silos each sought to seek a settlement with PDCP. On December of 1993,
Escaño entered into a compromise agreement with PDCP whereby he agreed to pay the
bankP1,000,000.00. In exchange, PDCP waived or assigned in favor of Escaño one-third (1/3) of its
entire claim in the complaint against all of the other defendants in the case. The compromise agreement
was approved by the RTC in a Judgment dated 6 January 1994.
Then on 24 February 1994, Ortigas entered into his own compromise agreement with PDCP, allegedly
without the knowledge of Escaño, Matti and Silos. Thereby, Ortigas agreed to pay PDCP P1,300,000.00
as “full satisfaction of the PDCP’s claim against Ortigas,” in exchange for PDCP’s release of Ortigas from
any liability or claim arising from the Falcon loan agreement, and a renunciation of its claims against
Ortigas.
In 1995, Silos and PDCP entered into a Partial Compromise Agreement whereby he agreed to
pay P500,000.00 in exchange for PDCP’s waiver of its claims against him.
Ortigas then pursued his claims against Escaño, Silos and Matti, on the basis of the 1982 Undertaking.
He initiated a third-party complaint against Matti and Silos, while he maintained his cross-claim against
Escaño. In 1995, Ortigas filed a motion for Summary Judgment in his favor against Escaño, Silos and
Matti.
On 5 October 1995, the RTC issued the Summary Judgment, ordering Escaño, Silos and Matti to
pay Ortigas, jointly and severally, the amount of P1,300,000.00, as well as P20,000.00 in attorney’s
fees. The trial court ratiocinated that none of the third-party defendants disputed the 1982 Undertaking,
and that “the mere denials of defendants with respect to non-compliance of Ortigas of the terms and
conditions of the Undertaking, unaccompanied by any substantial fact which would be admissible in
evidence at a hearing, are not sufficient to raise genuine issues of fact necessary to defeat a motion for
summary judgment, even if such facts were raised in the pleadings.“
Escaño and Silos appealed jointly while Matti appealed by his lonesome. In a Decision dated 23 January
2002, the Court of Appeals dismissed the appeals and affirmed the Summary Judgment. The appellate
court found that the RTC did not err in rendering the summary judgment since the three appellants did
not effectively deny their execution of the 1982 Undertaking. The special defenses that were raised,
“payment and excussion,” were characterized by the Court of Appeals as “appearing to be merely sham
in the light of the pleadings and supporting documents and affidavits.”
ISSUES
First, petitioners dispute that they are liable to Ortigas on the basis of the 1982 Undertaking, a document
which they do not disavow and have in fact annexed to their petition. Second, on the assumption that
they are liable to Ortigas under the 1982 Undertaking, petitioners argue that they are jointly liable only,
and not solidarily.
HELD
The Petition is GRANTED in PART. The Order of the Regional Trial Court dated 5 October 1995 is
modified by declaring that petitioners and Joseph M. Matti are only jointly liable, not jointly and severally,
to respondent Rafael Ortigas, Jr. in the amount of P1,300,000.00. The Order of the Regional Trial Court
dated 7 March 1996 is MODIFIED in that the legal interest of 12% per annum on the amount
of P1,300,000.00 is to be computed from 14 March 1994, the date of judicial demand, and not from 28
February 1994 as directed in the Order of the lower court. The assailed rulings are affirmed in all other
respects. Costs against petitioners.
An examination of the document reveals several clauses that make it clear that the agreement was
brought forth by the desire of Ortigas, Inductivo and the Scholeys to be released from their liability under
the loan agreement which release was, in turn, part of the consideration for the assignment of their
shares in Falcon to petitioners and Matti. The whereas clauses manifest that Ortigas had bound himself
with Falcon for the payment of the loan with PDCP, and that “amongst the consideration for OBLIGORS
and/or their principals aforesaid selling is SURETIES’ relieving OBLIGORS of any and all liability arising
from their said joint and several undertakings with FALCON.” Most crucial is the clause in Paragraph 3 of
the Undertaking wherein petitioners “irrevocably agree and undertake to assume all of OBLIGORs’ said
guarantees to PDCP under the following terms and conditions.”
Petitioners further observe that Ortigas made the payment to PDCP after he had already assigned his
obligation to petitioners through the 1982 Undertaking. Yet the fact is PDCP did pursue a judicial claim
against Ortigas notwithstanding the Undertaking he executed with petitioners. Not being a party to such
Undertaking, PDCP was not precluded by a contract from pursuing its claim against Ortigas based on the
original Assumption of Solidary Liability.
At the same time, the Undertaking did not preclude Ortigas from relieving his distress through a
settlement with the creditor bank. Indeed, paragraph 1 of the Undertaking expressly states that “nothing
herein shall prevent OBLIGORS, or any one of them, from themselves negotiating with PDCP the
release of their said guarantees .”Simply put, the Undertaking did not bar Ortigas from pursuing his own
settlement with PDCP. Neither did the Undertaking bar Ortigas from recovering from petitioners whatever
amount he may have paid PDCP through his own settlement. The stipulation that if Ortigas was “for any
reason made to pay any amount to PDCP, SURETIES shall reimburse OBLIGORS for said amount/s
within seven (7) calendar days from such payment”makes it clear that petitioners remain liable to
reimburse Ortigas for the sums he paid PDCP.
Petitioners submit that they could only be held jointly, not solidarily, liable to Ortigas, claiming that the
Undertaking did not provide for express solidarity. They cite Article 1207 of the New Civil Code, which
states in part that “There is a solidary liability only when the obligation expressly so states, or when the
law or the nature of the obligation requires solidarity.“
In case, there is a concurrence of two or more creditors or of two or more debtors in one and the same
obligation, Article 1207 of the Civil Code states that among them, “There is a solidary liability only
when the obligation expressly so states, or when the law or the nature of the obligation requires
solidarity.” Article 1210 supplies further caution against the broad interpretation of solidarity by
providing: “The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity
of itself imply indivisibility.”
These Civil Code provisions establish that in case of concurrence of two or more creditors or of two or
more debtors in one and the same obligation, and in the absence of express and indubitable terms
characterizing the obligation as solidary, the presumption is that the obligation is only joint. It thus
becomes incumbent upon the party alleging that the obligation is indeed solidary in character to prove
such fact with a preponderance of evidence.
The Undertaking does not contain any express stipulation that the petitioners agreed “to bind themselves
jointly and severally” in their obligations to the Ortigas group, or any such terms to that effect. Hence,
such obligation established in the Undertaking is presumed only to be joint. Ortigas, as the party alleging
that the obligation is in fact solidary, bears the burden to overcome the presumption of jointness of
obligations. It was ruled and so hold that he failed to discharge such burden.
Article 1208
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If from the law, or the nature or the wording of the obligations to which of the preceding article refers the
contrary does not appear, the credit or debt shall be presumed to be divided into as many equal shares as
there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the
Rules of Court governing the multiplicity of suits.
Kung galling sa batas, o ang katangian o the mga salita ng obligasyon kung saan ang sinusundan na artikulo ay
hindi sumasang-ayon ay hindi Makita, ang utang ay maaaring magpalagay na ito ay ibahagi sa mas maring pantay
na distribusyon para doon sa nagpautang at nangutang, ang mga utang ay may pagkakakilanlan sa bawat isa, at
sumasailalim sa Saligang Batas na syang namamahala para sa katakut-takot na demanda.
Compainia General de Tabacos v. Obed
Facts: A mother and her son borrowed money. Nothing was said in the contract regarding solidary liability. But in
the brief presented by the lawyer for mother and son, the two debtors unwittingly said they were solidarily liable.
Issue: Does the statement in the brief of the lawyer convert the joint obligation into a solidary one?
Held: No. The statement in the brief is immaterial. What must prevail is the contact in questions, and since nothing
is mentioned therein relating to solidarity, the obligation is only joint.
Article 1209
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If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the
debt can be enforced only by proceeding against all the debtors. If one of the latter should be insolvent, the
others shall not be liable for his share. (1139)
Kung ang paghahati ay imposible, ang karapatan ng mga nagpautang ay maaaring mapasama sa pamamagitan
lamang ng kanilang kolektibong kagagawan, at ang utang ay makukuha sa pamamagitan lamang ng paglilitis laban
sa mga nangutang. Kung ang isa sa mga nangutang ay hindi makakapagbayad, ang kanyang mga kasama
ay walang pananagutan sa kanyang bahagi.
Discussion:
Article 1209 applies to joint indivisible obligation because the prestation or object is not susceptible of division, and
solidarity is not provided.
According to Manresa, for joint indivisible obligation:
Debtors – the fulfillment of obligation requires the concurrence of ALL the debtors (each for his part)
 Creditors – there has to be a collective action for acts which are deemed prejudicial to the rights of the creditors.
In case of breach of a joint indivisible obligation:
When there is plurality of debtors – compliance can be enforced by proceeding against ALL of the debtors. If one
of the debtors fails to perform, the obligation can no longer be fulfilled because the prestation or object is
indivisible. In indivisible prestation, division is not possible.
If such is the case, the obligation is then converted to an indemnity for damages. In paying for the indemnity, those
debtors who are ready to fulfill their obligation should not contribute beyond his or her share in the prestation or
object. The debtor who refused ot failed to comply shall shoulder all the damages suffered by the creditor/s due to
his non-performance.
Suppose the other debtors also suffered damages when the prestation was converted into indemnity for damages,
they may also recover damages from the erring debtor.
If one of the debtors become insolvent, the rest of the debtors shall not be liable for his share.
When there is plurality of creditors (but only one debtor) – the obligation can be performed only by the delivery
of the thing to all the creditors jointly. The debtor must not deliver to just one unless that particular person has been
authorize by all the creditors to receive the delivery. Otherwise, the debtor may be liable for damages due to non-
performance of the obligation in consideratino of the other creditors.
On the other hand, if only one creditor or some, and not all, are making the demand, the debtor can refuse to make
the delivery. Also, if one or some creditors refuse to accept the delivery, the debtor may resort to tender of payment
which is to be followed by proper consignation of the thing, to avoid any default.
Article 1210
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The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does solidarity
of itself imply indivisibility.
Ang pagiging hindi nahahati ng obligasyon ay hindi ibig sabihin na may solidaryong obligasyon. Hindi rin
nito ibig sabihin na kung may solidaryong obligasyon, ay mayroon ding hindi paghahati ng obligasyon.
Discussion:
An indivisible obligation is one where the prestation or object cannot be performed by parts without
altering the essence or substance.
Indivisibility refers to the character of a subject matter or object of a contract which does not permit its
division or segregation without destroying its essence or substance.
Kinds of Indivisibility:
1. Legal indivisibility- indivisibility by operation of law
2. Conventional indivisibility- indivisibility by the agreement of the parties; an obligation which is divisible by
nature is made divisible by the will of the parties
3. Solidary obligation- obligation where each debtor is liable for the entire obligation, and each creditor is
entitled to demand the fulfillment of the whole obligation.
This refers to the vinculum or tie or relationship existing between the parties.
An obligation can be indivisible and solidary at the same time. Hence, an obligation can be:
1. Solidary divisible obligation
2. Solidary indivisible obligation
3. Joint indivisible obligation
4. Joint divisible obligation

Case Illustration: Escaño and Silos vs Ortigas Jr.

Article 1211
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Solidarity may exist although the creditors and the debtors may not be bound in the same manner
and by the same periods and conditions. (1140)
Ang pagkakaisa ay umiiral bagamat ang pinagkakautangan at ang nagkakautang ay maaring hindi
nakatali sa parehong paraan at sa parehong panahon at kondisyon.
Discussion:
Forms of Solidarity According to Sanchez Roman
1. Uniform Solidarity – when the debtors are bound by the same terms and conditions or stipulations.
2. Varied Solidarity – when the debtors while bound under the same obligation (like a loan) are not subject
to the same terms and conditions of payment but to different secondary stipulation or clauses.
 Note: There is no case indicated on this article.
Illustration:
Nitz, Daisy and June obtained a Php 900,000.00 loan to Digna which they executed a promissory note
solidarily binding themselves to pay Digna under the following terms:
 Nitz will pay Php 300,000.00 with 12% interest on January 13, 2016;
 Daisy will pay Php 300,000.00 with 12% interest on February 13, 2016;
 June will pay Php 300,000.00 with 12% interest on March 13, 2016.
When January 13, 2016 comes, Digna can collect Php 300,000.00 with 12% interest from either Nitz,
Daisy or June but she cannot collect the whole amount because it is not yet due. The creditor must wait
until the maturity of the other amounts. She can still collect the amount in either of them when the next
maturity comes because the tie of the solidarity among the debtors is preserved and not affected by the
differences of the secondary terms and stipulations assumed.
Article 1212
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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. (1141a)
Bawat isa sa mga pinagbuklod na may mga pautang ay maaaring gumawa ng may pakinabang sa
iba, ngunit hindi lahat na maaaring makasama sa iba nilang kasama.
A relationship of mutual agency exists by and among solidary creditors. The act of one will affect the
others because of their relationship. Solidary creditors may perform acts which are useful or beneficial to
the others. Every solidary creditor is benefited by the useful acts of one.
If a solidary creditor performs an act which is prejudicial to his co – creditor, the act may have a valid
legal effects, but the performing creditor shall be liable to his co – creditors.
Article 1213
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A solidary creditor cannot assign his rights without the consent of the others. (n)
Sa mga pinagsamasamang mga nagpapautang, hindi nila maaaring ibigay o ipasa sa iba ang kanyang
mga karapatan ng walang pahintulot ang iba pang nagpapautang o mamumuhonan. At kung walang
pahintulot ang isa sa may ari ng pinagsama samang puhunan ang pagbibigay sa iba ng kanyang mga
karapatan ay walang bisa.
Illustration
A is indebted to solidary creditors B and C, C, cannot assign his rights to D, without the consent of B. the
reason rest on the extra ordinary mutual trust and confidence among solidary creditors and it may
happen that the other creditor may not want dealings with the person to whom the debts will be assigned.
Article 1214
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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. (1142a)

Ang umutang ay pwedeng magbayad alinman sa mga taong kanyang pinagkautangan,pero kung sakalit
may kautusan mula sa hukuman o sa labas man na pinagusapan na kailangan isa sa pinagkakautangan
lamang ang pagbabayaran, ito ay kailangan niyang sundin.
Article 1215
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Novation, Compensation, confusion o remission ng utang na ginawa ng sino man sa mga sama-
samang nagpautang o sino man sa sama-samang nangutang ay tumatapos ng obligasyon, na
walang kinalaman sa probisyon ng Article 1219.
Ang nagpautang ay maaring gampanan ang alin man sa mga nasabing gawain, o kaya ay kung sino man
ang maningil ng pautang ay may pananagutan sa iba para sa kanilang parte sa obligasyon na para sa
kanilang lahat.
Discussions:
Four (4) Modes of extinguishment of obligations.
Novation – obligation is modified by (1) changing object or principal obligations; (2)substituting the
person of the debtor , and (3) subrogating a third person in the rights of the creditor
Compensation – when two (2) persons, in their own right become creditors and debtors of each other.
Confusion or Merger of Rights – when the characters of creditor and debtor are merged in the same
person (Art 1275)
Remission or Condonation – This is the gratuitous abandonment by the creditor of his right.
These are acts prejudicial to the other solidary co-creditors because of its effects to the extinguishment of
the obligation due to all of them.
**no case cited
Case Illustration: Great Asian Sales Center Corporation and Tan Chong Lin vs. The Court of Appeals
and Bancasia Finance and Investment Corporation

Article 1219
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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. (1146a)
Ang pagremit na ginawa ng nagpautang sa kanyang mga ibinahagi na kung saan nakakaapekto sa isa
sa mga nagkaisang nangutang ay hindi pinapalaya ang nangutang sa kanyang responsibilidad sa
kanyang kapwa nangutang, kung sakali ang utang ay nabayaran na ng buo ng isa sa kanila bago
maipatupad ang pagreremit.
*Applicable only if one of the solidary debtors paid the entire obligation to the creditor.
Note: There is no case indicated on this article.
Illustration:
Jeirome, Tina and Nitz owed Php 3,000,000.00 from Digna which they are going to use for the payment
of the brand new car. Then one day Nitz came to Digna and paid the whole amount then after a day Tina
not knowing that Nitz have already paid the whole obligation went to Digna, she paid Php 1,000,000.00
thereafter Digna remitted the share of Tina. On this case Nitz can reimburse Php 1,000,000.00 each from
Jeirome and Tina even if the share of Tina in the obligation had been belatedly remitted. It is because
after the payment of the entire obligation, there is nothing more to remit. The obligation had already been
extinguished.
Article 1220
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The remission of the whole obligation, obtained by one of the solidary debtors, does not entitle him to
reimbursement from his co-debtors. (n)
Ang pagpapatawad sa buong pagkakautang ay nakuha sa pamamagitan ng isa sa magkakasamang
mangungutang wala siyang karapatan na manghingi mula sa kapwa niyang mangungutang.
The article applies only when the remission covers the whole or entire obligation and the remission is obtained by
one of the solidary debtors without spending anything for its grant.
In case the remission is only partial, the solidary debtor who paid the unremitted part o the obligation is entitled to
reimbursement with respect only to the amount he actually paid.
Illustration:
“Kardo”, “Pedro”, and “Toro” are solidarily liable to “Dodong” in the sum of P200,000.00. When Kardo offered to
pay the entire obligation, Dodong by an impluse of sudden kindness, remitted the entire obligation resulting in the
extinguishment thereof. Kardo is not entitled to reimbursement from Pedro and Toro because Kardo did not spend
anything for the remission granted by Dodonf, the remission being gratuitous one.
Article 1221
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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. (1147a)
Kung ang bagay ay nawala na o kung ang pagbabayad ay imposible na walang pagkakamali ang magkakasamang
mangungutang, ang pagbabayad ay mawawala na.
Kung mayroon kasalanan ang sino man sa kanila ang lahat ay mananagot sa mga nagpapautang para doon sa
prisyo at kabayaran ng damyos at tubo, na walang sagabal na maghabol laban sa napatunayan o nagpabayang
kasamang mangungutang.
 Kung sa pamamagitan ng kalikasan / hindi inanasahan pangyayari, ang bagay ay nawala o ang pagbabayad
naging imposible na pagkatapos ng isa sa magkakasasamang pangungutang ay na antala sa pamamagitan ng
panghukuman o labas sa hukuman paniningil , ang mga susug ng artikulong 1147 ang masusunod.
Case Illustration:
Facts:
 Maurice Peaches McLoughlin is an Australian businessman-philanthropist who used to stay at the Sheraton Hotel
during his trips to the Philippines prior to 1984. He met Brunhilda Mata-Tan who befriended him and showed him
around. Tan convinced Mcloughlin to transfer to the Tropicana from the Sheraton where afterwards he stayed
during his trips from Dec 1984 to Sept 1987.
 On 30 Oct 1987, McLoughlin arrived from Australia and registered with Tropicana. He rented a safety deposit box
as his usual practice. The box required two keys, the guest had one and one from the management. He placed US
$10,000 in one envelope and US$5,000 in another , AU$10,000 in another envelope and other envelopes with his
passport and credit cards. On 12 Dec 1987, he took from the box the envelope with US$5,000 and the one with
AU$10,000 to go to Hong Kong for a short visit, because he was not checking out. When he arrived in HK, the
envelope with US$5,000 only contained US$3,000, but because he had no idea if the safety deposit box has been
tampered, he thought it was just bad accounting.
 After returning to Manila, he checked out of the Tropicana on 18 Dec 1987 and left for Australia. When he arrived
he discovered that the envelope with US$10,000 was short of US$5,000. He also noticed that the jewelry he bought
in Hong Kong which he stored in the safety deposit box upon his return to Tropicana was likewise missing, except
for a diamond bracelet.
 He went back to the PH on 4 Apr 1988 and asked Lainez (who had custody of the management key) if some money
was missing or returned to her, to which the latter answered there was not. He again registered at the Tropicana and
rented a safety deposit box. He placed an envelope containing US$15,000, another of AU$10,000. On 16 Apr, he
opened his safety deposit box and noticed that US$2,000 and AU$4,500 was missing from the envelopes.
 He immediately confronted Lainez and Payam who admitted that Tan opened the safety deposit box with the key
assigned to McLoughlin. McLoughlin went up to his room where Tan was staying and confronted her. Tan admitted
that she had stolen McLoughlin’s key and was able to open the safety deposit box with the assistance of Lopez,
Payam and Lainez. Lopez also told McLoughlin that Tan stole the key assigned to McLoughlin while the latter was
asleep.
 McLoughlin requested the management for an investigation of the incident. Lopez got in touch with Tan and
arranged for a meeting with the police and McLoughlin. When the police did not arrive, Lopez and Tan went to the
room of McLoughlin at Tropicana and thereat, Lopez wrote on a piece of paper a promissory note.
 He made Lopez and Tan sign a promissory note for him for the loss. However, Lopez refused liability on behalf of
the hotel, reasoning that McLoughlin signed an “Undertaking for the Use of Safety Deposit Box” which disclaims
any liability of the hotel for things put inside the box.
 On 17 May 1988 McLoughlin went back to AU and consulted his lawyers. They wrote a letter addressed to Pres.
Cory Aquino which was pushed back to the DOJ and the Western Police District. He went back from the PH to AU
several times more to attend business and follow up but the matter was only filed on 3 Dec 1990 since he was not
there to personally follow up.McLoughlin filed an action against YHT Realty Corporation, Lopez, Lainez, Payam
and Tan.
Issue: whether the loss of money and jewelry is supported by the evidence. YES. whether there was gross
negligence on the part of the innkeepers, WON the “Undertaking for the Use of the Safety Deposit Box” is null and
void.
Ruling: RTC rendered judgment in favor of McLoughlin. The CA modified only the amount of damages awarded.
Payam and Lainez, who were employees of Tropicana, had custody of the master key of the management when the
loss took place. They even admitted that they assisted Tan on three separate occasions in opening McLoughlin’s
safety deposit box. Art 2180, par (4) of the same Code provides that the owners and managers of an establishment
or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which
the latter are employed or on the occasion of their functions. Given the fact that the loss of McLoughlin’s money
was consummated through the negligence of Tropicana’s employees both
Yes, it is null and void. Art. 2003[1] is controlling. This is an expression of public policy that the hotel business like
common carriers are imbued with public interest. This responsibility cannot be waived away by any contrary
stipulation in so-called “undertakings” that ordinarily appear in prepared forms imposed by hotel keepers on guests
for their signature.The CA (former case) even ruled before that hotelkeepers are liable even though the effects are
not delivered to them or their employees, but it is enough that the effects are within the hotel or inn.Pars. 2 and 4 of
the undertaking manifestly contravene Art. 2003 of the NCC. Meanwhile, the defense that Art. 2002 exempts the
hotel-keeper from liability if the loss is due to the acts of the guest, family or visitors falls because the hotel is guilty
of negligence as well. This provision presupposes that the hotel-keeper is not guilty of concurrent negligence or has
not contributed in any degree to the occurrence of the loss

Article 1222
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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. (1148a)
Ang magkatuwang sa pag-utang ay maaring idepensa ang bawat sarili sa pagkakautang kung sakalit ang
kanilang pinagkakautangan ay kumilos laban sa sinuman sa kanilang pinagkautangan ukol sa bahagi ng
pagkakautang ng bawat isa.
Case Illustration: Braganza vs. Villa Abrille

DIVISIBLE AND INDIVISIBLE OBLIGATIONS

Article 1223
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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)
Ang pagkakahati o ‘di pagkakahati ng bagay na nilalaman ng mga obligasyon kung saan may isa lamang na
nangutang at isa lamang na nagpautang ay hindi binabago ang probisyon ng Chapter 2 ng titulong ito.
Discussion:
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.
Article 1224
March 25, 2016Leave a comment
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
March 25, 2016Leave a comment
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
1. 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.
2. 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.
Case Illustration: Angel Jose Warehousing Co. Inc. vs. Chelda Enterprises (23 SCRA 119)

OBLIGATIONS WITH A PENAL CLAUSE

Article 1226
March 25, 2016Leave a comment
 In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of
interest 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 fulfilment of the obligation.
The penalty may be enforced only when it is demandable in accordance with the provisions of this Code.
Sa obligasyon na may penal clasue, ang parusa ay papalit sa pagbayad ng danyos at sa interes kung hindi man ito
magagawa, kung walang stipulasyon na iba. Datapwa’t, ang danyos ay babayaran kung ang pinag-utangan ay
tatanggi na magbayad ng parusa o kung siya ay nagkasala ng pandaraya sa paggawa ng obligasyon.
Ang parusa ay maaring maipatupad lamang kung ito ay naipapatupad ayon sa probisyon ng Coda na ito.
Discussion:
Penalty clause is an accessory obligation or undertaking attached to a principal obligation, which imposes an
additional liability in case of breach of the principal obligation, in order to secure the performance of the principal
obligation.
The penalty imposable is a substitute for the indemnity for damages and payment of interest in case of breach of the
obligation, unless there is contrary stipulation, in which case, the additional damages may further be recovered.

Case Illustration:
Ibarra vs Aveyro and Emiliano Pre 37 Phil 274 (1917)
Ponente: J. Torres
Facts:
On April 10, 1915, counsel for Alejandro Ibarra filed a complaint with the Court of First Instance of Tarlac against
Leopoldo Aveyro and Emiliano Pre, for the purpose of recovering from them jointly and severally the sum of P465
as principal, besides such additional sum as might be found owing in accordance with the penal clause of the
contract, at the rate of P5 a day from the date of the maturity of the obligation.
The defendants denied the allegation. Aveyro purported that he sold a land to Ibarra in the amount of P450 with the
right to repurchase and that Ibarra borrowed the land title and deed for the purpose of reselling it on a higher price,
and upon failing, returned the same. Ibarra again borrowed the title and deed and in addition executed a promissory
note in favor of Ibarra, with the security of a solvent surety, for the amount of P450, and with a penal clause, to be
effective in case of delinquency in the payment, and that if the sale should not be made, the borrowed deed should
be returned. the sale did not push through, and when Ibarra tried to return the deed, Averyo refused.
Trial ensued and the court decided in favor of Averyo and Pre. However, the penal clause was held to be null and
void for being immoral, pursuant to Article 1255 of the Civil Code

Article 1227
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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. (1153a)
Ang nangutang ay hindi mapapalaya ang kanyang sarili sa tungkulin nya sa kanyang obligasyon sa pamamagitan
ng pagbabayad ng multa, na kung saan ang karapatan na ito ay malinaw na nakasaad para sa kanya. Kahit ang
nagpautang ang nag demand ng pagpuno sa obligasyon at ang satisfaction para sa multa sa parehong panahon,
maliban na lang kung ang karapatan na ito ay malinaw na pinagkakaloob sa kanya. Ngunit kung pagkatapos ng
obligasyon, ang pagganap dito ay maging imposible na hindi nagmula sa kanyang kapabayaan, ang multa ay
maaring maipatupad.
Discussion:
Exception to the Rule
1. When the creditor was clearly given the right to enforce both the principal obligation and the penalty.
1. When the creditor has demanded fulfillment of the obligation, but the same could no longer be fulfilled due to the
debtor’s fault, he may demand the penalty agreed upon.
*If fault due to the creditors act – he cannot claim the penalty.
*If impossibility of fulfillment is due to fortuitous events – both principal obligation and the penalty shall be
extinguished.
Case Illustration: Santiago Navarro, Et. Al., vs. Felix Mallari, Et. Al.
Article 1228
 March 25, 2016Leave a comment
Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded.
(n)

Ang patunay ng tunay na mga damyos na sinapit ng maypautang ay hindi kailangan upang ang tubo ay singilin.
If the contracting parties had fixed the penalty for the purpose of compensating or substituting the indemnity for
damages as well as the payment of interests, proof of actual damages suffered by the creditor is not necessary to
enforce the penalty whether or not damages had been suffered as long as the agreement or contract had been
breached. Thusly, in this sense, penalty and liquidated damages are the same.

Case

Lambert Vs. Fox

FACTS:
 Early in 1911: John R. Edgar & Co., engaged in the retail book and stationery business was taken over by its
creditors including Lambert and Fox
 Lambert and Fox became the 2 largest stockholders in the new corporation called John R. Edgar & Co.,
Incorporated
 Lambert and Fox entered into an agreement wherein they mutually and reciprocally agree not to sell, transfer, or
otherwise dispose of an part of the stock until after 1 year from the agreement date unless consented in writing
 violation: P1,000 pesos as liquidated damages
 October 19, 1911: Fox sold his stock E. C. McCullough & Co. of Manila, a strong competitor
 sale was made by the defendant against the protest
 Foz offered to sell his shares of stock to the Lambert for the same sum that McCullough was paying them less
P1,000, the penalty specified in the contract
 Trial Court: dismissed

ISSUE: W/N Fox should be penalized

Article 1229
March 25, 2016Leave a comment
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. (1154a)
Ang hukom ay makatuwiran babaan ang tubo kapag ang kabuuhan ng obigasyon ay bahagya o hindi natupad ng
may pagkakautang. Ganun din kung hindi pa nakapagbayad, ang tubo ay maaring babaan ng hukuman kung ito at
hindi makatarungan at patas.
Case Illustration: The Bacharach Motor Co. Inc. vs. Faustino Espiritu, Rosario Espiritu

Article 1230
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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. (1155)

Walang kinalaman ang principal na obligasyon sa pagpapawalang bisa ng isang obligasyon na may katumbas na
kaparusahan. Ang principal na obligasyon na pinawalang bisa ay taglay ang obligasyong may kaparusahang
penal.