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OBLICON 1D BERNARDO

Obligations and Contracts Chapter 3 Nature and Effect of Obligations Section 3 Alternati e Obligations Article 11!" A person alternati el# bound b# different prestations shall co$pletel# perfor$ one of the$% &he creditor cannot be co$pelled to recei e part of one and part of the other underta'ing% (inds of Obligation according to OB)EC& *de Leon+, 1% Si$ple obligation - there is onl# one prestation .% Co$pound obligation - there are t/o or $ore prestations% a% Con0uncti e - there are se eral prestation and ALL of the$ are D1E b% Distributi e - one2 t/o2 OR $ore of the prestations is due i% Alternati e - several prestations are due B1& perfor$ance of ONE IS S133ICIEN& ii% 3acultati e - only one prestation is due B1& the debtor $a# S1BS&I&1&E another Based on pluralit#2 obligations $a# be classified into *&olentino+, 1% Con0uncti e - debtor has to perfor$ se eral prestations2 e4tinguished onl# b# the perfor$ance of all .% Alternati e - there are se eral ob0ects due but fulfill$ent of one is sufficient5 choice to be deter$ined b# debtor /ho generally has the right of election 3% 3acultati e - onl# ONE thing is due but the debtor has RESER6ED the right to substitute it /ith another Con0uncti e Alternati e Loss of thing Affects obligation a% Loss of ONE - affects obligation but DOES NO& e4tinguish obli b% Loss of all due to debtor da$ages based on alue of thing last lost or last ser ice Choice 7A8 BE granted to creditor *but if debtor cannot choose bco9 of creditor:s acts2 debtor has right to rescind *1.;<+ 3acultati e a% Loss of S1BS&I&1&E - does NO& affect obligation b% Loss of &=IN> D1E *ob0ect of obli+ - e4tinguishes obli contract2 /ith da$ages *1.;3+ NE6ER granted to creditor

Agoncillo s% )a ier - liabilit# of the defendants in con e#ing the house and lot is S1BSIDIAR8 and CONDI&IONAL2 dependent upon their failure to pa# the debt in $one#% If the action to reco er the debt has prescribed2 then the action to co$pel con e#ance is also barred2 since the agree$ent to $a'e that con e#ance /as NO& AN INDE?ENDEN& principal underta'ing but $erel# a subsidiar# AL&ERNA&I6E pact relating to the $ethod b# /hich the debt $ight be paid% Ong >uan Can % Centur# Insurance - the polic# of the insurance co$pan# is @the co$pan# $a# at its otion reinstate or replace the propert# da$aged or destro#ed2 or an# part thereof2 instead of pa#ing the a$ount of the loss or da$ageAB alid clause2 $a'es the obligation of the co$pan# an alternati e one, either to pa# the a$ount insured or rebuild it% Article 1.;; &he right of choice belongs to the debtor2 unless it has been e4pressl# granted to the creditor% &he debtor shall ha e no right to choose fro$ prestations /hich are i$possible2 unla/ful or /hich could not ha e been the ob0ect of the obligation% Right of choice - debtor has right to choose $ethod of $eeting obligation2 1NLESS the creditor has e4pressl# reser ed that right C If right of choice is granted to the creditor2 it 71S& BE ED?RESSED2 cannot be $erel# i$plied C 7a# also be ED?RESSL8 entrusted b# the parties to a third person Li$its on Elections *li$itations on the right of choice+

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OBLICON 1D BERNARDO
1% Indi isible - cannot choose part of one prestation and part of another .% ?ossible and la/ful - debtor cannot choose i$possible or unla/ful underta'ings o ?resence of i$possible or unla/ful prestations DO NO& annul the obligation5 it subsists if there are other la/ful and possible ob0ects 3% Ob0ect of the prestation - cannot choose a prestation /hich could not ha e been the ob0ect of the obligation2 such as, a% prestations /hich turn out to be different fro$ /hat the parties supposed b% prestations /hich do not ser e the purpose of the obligation that /as contracted *li'e choosing future things or things that ha e gone through an accident /hich ga e it a ne/ aspect+EE <% Onl# one prestation is practicable *Art1.;.5 added b# de Leon2 not in &olentino enu$eration+ - in this case2 not onl# is there a li$itation2 the RIGHT IS LOST because obligation beco$es si$ple /herein onl# 1 prestation is left to be perfor$ed5 right of choice cannot be passed to creditor 3or$ of Action - $ust be alternati e */hen debtor has right to choose2 plaintiff:s action $ust also be to de$and @either 4 or #2 at the election of the debtorB )udg$ent $ust also be in this for$ o /hen the creditor de$ands onl# one of the ob0ects2 he as's $ore than /hat he is entitled to% Article 1.;1 &he choice shall produce no effect e4cept fro$ the ti$e it has been co$$unicated% Notice of selection C $a# be in AN8 for$ as long as it is S133ICIEN& to $a'e the other part# 'no/ that the election has been $ade C $a# be $ade o orall# o in /riting o o tacitl#2 or b# an# other uneFui ocal $eans *una$biguous+

&acit declaration of C=OICE /hen, 1% debtor /ho has the right to choose2 perfor$s one of the prestations /ith the intent to discharge the obligation .% creditor /ho has right to choose2 accepts a prestation or /hen he de$ands *sues for+ perfor$ance of one of the prestations Notice of selection $a# be gi en to or b# a dul# authori9ed representati e Consent of other part# C In Ong >uan s% centur# Insurance2 SC held that the purpose of the notice is to gi e the creditor an opportunit# to e4press his consent or to i$pugn the election $ade b# the debtor C &olentino sa#s this is /rong, the la/ does not reFuire other part# to consent to the choice $ade b# the one /ith the right of choice5 $ere declaration of choice2 co$$unicated to the other part# is sufficient5 selection and communication is a 1NILA&ERAL declaration of /ill C ReFuiring the other part# to consent destro#s the essence of the la/ on the right to choose and the alternati e character of the obligation C Consent /ill bring about a no ation *replace$ent of the old contract /ith a ne/ one+ of the contract C EXCEPTIO ! Plurality of su"#ects$ various de"tors or creditors o Obligation is 0oint5 CONSEN& of ALL is necessar# to $a'e the selection effecti e o Reason, none of the creditorsGdebtors can e4tinguish the entire obligation on his o/n o EXCEPTIO to the e%ce&tion, /hen the obligation is SOLI'(R) and there is no stipulation to the contrar# Choice of one /ill be binding personall# upon hi$ B1& NO& to the others

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OBLICON 1D BERNARDO
E4a$ple, A and B solidaril# bind the$sel es to deli er a horse or a carabao to C% A selects horse and co$$unicates this to C5 A is no/ bound to deli er horse and can no longer change to deli er carabao B is NO& BO1ND b# the selection of A of the horse5 B can choose to deli er the carabao and e4tinguish the obligation o Hhen B deli ers carabao2 A is no longer bound to deli er an#thingEEE C Debtor perfor$s one of the prestations /ithout 'no/ing the alternati es and his right to choose o &his is NO& considered a co$$unication of his selection o NO& a binding perfor$ance o Reason, there is pa#$ent of /hat is not due o Re$ed#, debtor can RECO6ER that has been perfor$ed erroneousl#5 in accordance /ith the la/ on FuasiCcontracts ?ro isions on Fuasi contracts in Ci il Code, Chapter 12 &itle 1I2 Articles .1<.C.1IJ Netotioru$ >estio - bet/een o/ner and officious $anager Solutio Indebiti - obligation to return /hat has been undul# paid or deli ered Other Fuasi contracts li'e .1K< *support gi en b# stranger /ithout 'no/ledge of person reFuired to gi e support+ or .1KJ *support gi en for a funeral /ithout the 'no/ledge of relati es reFuired to gi e support+ LuasiCcontract *de Leon definition+ - the 0uridical relation resulting fro$ la/ful2 oluntar# and unilateral acts b# irtue of /hich the parties beca$e bound to each other to the end that no one /ill be un0ustl# enriched or benefited at the e4pense of another *.1<.+ Not reall# a contract since in a contract2 there is a $eeting of the $inds or consent In FuasiCcontract2 there is no consent but the la/ considers the parties as ha ing entered into a contract to pre ent in0ustice

Condition or &er$ - part# /ho $a'es selection cannot sub0ect that selection to a condition or ter$2 1NLESS &=E O&=ER ?AR&8 CONSEN&S Effect of Choice C Li$its the obligation to the ob0ect or prestation selected2 /ith all the conseFuences that the la/ pro ides C Obligation is con erted to a SI7?LE obligation *onl# 1 prestation+ C Once choiceGselection is CO771NICA&ED2 beco$es IRRE6OCABLE5 part# /ho $a'es the choice is bound b# his choice o cannot be allo/ed to choose an alternati e2 e en if the alternati e /as pre iousl# a ailable to hi$ o CANNO& be changed b# either part# o Reason, to allo/ a change after it has been co$$unicated /ill e4pose the other part# to da$ages arising fro$ preparations he $a# ha e $ade on the assu$ption *e4pectanc#+ that /hat has been co$$unicated is the one that /ill be perfor$ed Error C Ignorance of the alternati es and the right to choose

Dela# in $a'ing the choice

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OBLICON 1D BERNARDO
C C Right to choose is not lost b# the $ere fact that part# /ho has the right to $a'e the choice dela#s in $a'ing it Code is silent on the situation /hen debtor /ho has the right to choose still has not $ade a choice /hen the creditor files an action in court de$anding perfor$ance o In this case2 there is no choice #et and it is unclear /ho /ill $a'e the selection and /hat the selection is . theories offered b# 3OREI>N 0urisprudence, 3rench theor# - court to gi e part# entitled to $a'e the choice a ?ERIOD to $a'e his choice and if he still does not choose2 court /ill either, o 7a'e the choice5 or o >i e the right to choose to other part# >er$an - right to choose A1&O7A&ICALL8 ?ASSES to other part#5 /hen a suit is filed2 the de$and for perfor$ance $ust be alternati e and the 0udg$ent $ust also be in alternati e for$% o As long as 0udg$ent is not #et e4ecutor#2 debtor $a# still e4ercise his right to choose o Once 0udg$ent has been satisfied b# e4ecution *EEE+ debtor can no longer choose5 the creditor $a# enforce e4ecution of the 0udg$ent for AN8 of the prestations% o Acceptable to the ?hils is the >er$an theor# debtor cannot paral#9e re$ed# of the creditor b# refusing to $a'e a selection5 if debtor does not select2 the choice can be $ade 3OR =I7 b# the creditor in accordance /ith Art11KI Art 11KI - person obliged to do so$ething and fails to do it2 the sa$e shall be e4ecuted at his cost5 sa$e rule if he does it in contra ention of the tenor of the obligation and /hat has been poorl# done $a# be decreed to be undone In such case2 debtor is dee$ed to ha e /ai ed his right to choose in fa or of creditor B1& 0ustice and eFuit# $a# still 0ustif# the granting of a period to the debtor to $a'e his choice before creditor is allo/ed to choose

Article 1.;. &he debtor shall lose the right of choice /hen a$ong the prestations /hereb# he is alternati el# bound2 onl# one is practicable Obligation beco$es si$ple C If all the prestations2 e4cept ONE2 are i$possible or unla/ful2 it follo/s that debtor can choose and perfor$ onl# that one that re$ains possible and la/ful C Obligations ceases to be alternati e C Si$ple obligation to perfor$ that onl# feasible or practicable prestation C NO&E, i$possibilit# of the other prestations $ust NO& be due to creditor:s acts5 if so2 then 1.;3 /ill appl# Art 1.;. onl# pertains to the debtor:s right to choose5 Creditor is granted right to choose in Art 1.;J2 /hen onl# one prestation re$ains practicable either due to fortuitous e ent or to the fault of the debtor Article 1.;3 If through the creditor:s acts2 the debtor cannot $a'e a choice in accordance /ith the ter$s of the obligation2 the latter $a# rescind the contract /ith da$ages Basis, principles of 0ustice2 debtor $a# ha e /anted to choose that prestation destro#ed or rendered i$possible b# the creditor

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OBLICON 1D BERNARDO
Rescission is not auto$atic5 e4ercised at the o&tion of the de"tor% Re$edies of the debtor in case prestation is lost or destro#ed or rendered i$possible to perfor$ b# the creditor, 1% Rescission of contract /ith da$ages .% Selection of the one re$aining2 if onl# one is possible 3% Selection of one a$ong those still re$aining2 if se eral are still possible Article 1.;< &he creditor shall ha e a right to inde$nit# for da$ages /hen2 through the fault of the debtor2 all the things /hich are alternati el# the ob0ect of the obligation ha e been lost2 or the co$pliance of the obligation has beco$e i$possible% &he inde$nit# shall be fi4ed2 ta'ing as a basis the alue of the last thing lost or that of the ser ice /hich last beca$e i$possible% Da$ages other than the alue of the last thing or ser ice $a# also be a/arded% Loss b# fault of debtor C Onl# so$e lost, debtor NO& liable for da$ages because he can still co$pl# b# choosing a$ong those left or the one that is left if onl# 1 is re$aining C 1.;< is applicable in $a'ing the debtor liable for da$ages ONL8 /hen ALL the prestations are lost or beco$e i$possible 3ortuitous E ent C If ALL is lost or beco$es i$possible bco9 of fortuitous e ent2 obligation ED&IN>1IS=ED5 debtor not liable for da$ages C If one or $ore beco$e i$possible b# fortuitous e ent2 onl# one re$ains and this last one is $ade i$possible b# the debtor2 debtor is liable to pa# da$ages under 1.;< C If one or $ore /ere lost or beca$e i$possible through fault of debtor and onl# one re$ains2 and that last one is lost b# fortuitous e ent2 is debtor liable for da$agesE o So$e belie e no because obligation /as turned into a si$ple obligation /hen the others /ere lost2 e en o if the# /ere lost b# the debtor2 he still had one prestation left /hich turned the obligation into a si$ple one% If that last one is lost b# fortuitous e ent2 obligation is e4tinguished &olentino belie es that debtor is still liable under 1.;< but the basis of the da$age $ust be $ade on the alue of the last thing that beca$e i$possible through his fault Reason, the negligence or fault of the debtor DI7INIS=ED the possibilit# of the obligation being perfor$ed% If he had e4ercised due diligence2 the obligation /ould ha e been perfor$ed /ith an# of the other prestations2 regardless if the last /as lost b# fortuitous e ent Debtor should not be relie ed fro$ liabilit# /hen his fault or negligence concurred /ith the fortuitous e ent in $a'ing perfor$ance i$possible

Article 1.;J Hhen the choice has been e4pressl# gi en to the creditor2 the obligation shall cease to be alternati e fro$ the da# /hen the selection is co$$unicated to the debtor% 1ntil then the responsibilit# of the debtor shall be go erned b# the follo/ing rules, 1% If one of the things is lost through a fortuitous e ent2 he shall perfor$ the obligation b# deli ering that /hich the creditor should choose fro$ a$ong the re$ainder2 or that /hich re$ains if onl# one subsists5 .% If the loss of one of the things occurs through the fault of the debtor2 the creditor $a# clai$ an# of those subsisting2 or the price of that /hich2 through the fault of the for$er2 has disappeared2 /ith a right to da$ages% 3% If all the things are lost through the fault of the debtor2 the choice b# the creditor shall fall upon the price of an# one of the$2 also /ith inde$nit# for da$ages% &he sa$e rules shall be applied to obligations to do or not to do in case one2 so$e or all of the prestations should beco$e i$possible%

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OBLICON 1D BERNARDO
Selection b# creditor - /hen creditor has right to choose2 his selection ta'es effect fro$ the $o$ent that selection is co$$unicated to the debtor% C 7a# be $ade tacitly *accepting a prestation offered b# a debtor2 or brings an action for the enforce$ent of one of the prestations+ or e%&ressly Dela# of Creditor in $a'ing a choice C Hhen the right is gi en to creditor and he dela#s in $a'ing that choice2 de"tor *ill not incur in delay in the perfor$ance of the obligation2 e en if there is a fi4ed period for perfor$ance C If creditor does not choose before the end of the fi4ed period2 debtor:s dut# to perfor$ does not arise because the particular prestation has not #et been deter$ined C Creditor is considered to ha e /ai ed the benefit of the period Article 1.;K Hhen onl# one prestation has been agreed upon2 but the obligor $a# render another in substitution2 the obligation is facultati e% &he loss or deterioration of the thing intended as a substitute2 through the negligence of the obligor2 does not render hi$ liable% But once the substitution has been $ade2 the obligor is liable for the loss of the substitute on account of his dela#2 negligence or fraud% Alternati e 6arious prestations2 all of /hich constitute the parts of the obligation All Nullit# of one prestation does not affect obligation5 obli 3acultati e Onl# the principal prestation constitutes obligation5 the accessor# is onl# a $eans to facilitate pa#$ent Onl# the principal Nullit# of the principal prestation in alidates obligation5 creditor still in force /ith those prestations /hich ha e no ice 7a# be gi en to creditor Onl# the i$possibilit# of all prestations /ithout fault of debtor e4tinguishes obligation cannot de$and substitution e en if the substitute is alid Onl# debtor can choose the substitute I$possibilit# of the principal is sufficient to e4tinguish the obligation2 e en if substitute is possible

Choice Effect of loss

Loss of substitute C through the fault or negligence of debtor, substitute is not the principal prestation /hich is due and enforceable b# the creditor C through $alice or bad faith, code is silent5 left to the courts to decide o But tolentino belie es that the CA1SE for the i$possibilit# of the substitute is I77A&ERIAL o Reason, since the option to perfor$ the substitute is dependent solel# on the /ill of debtor o Debtor cannot e en be co$pelled to perfor$ the substitute if the principal beco$es i$possible *he is liable for da$ages E1.;<E2 not the perfor$ance of the substitute+ Substitution - $atter of ABSOL1&E choice on the part of the debtor5 e en if he acts in bad faith in rendering substitute i$possible2 he cannot be held liable for da$ages2 because he cannot be co$pelled to perfor$ it e en if it re$ained possible% Hhen substitution effecti e C La/ is silent C Rule on alternati e $a# be applicable, fro$ the ti$e the debtor co$$unicates to the creditor that he chooses to perfor$ the substitute2 perfor$ance of the substitute beco$es the onl# prestation that is due o If principal thereafter beco$es i$possible2 e en b# fortuitous e ent2 debtor /ill still be liable to perfor$ the substitute5 he is not released fro$ his obligation

Contents of obligation

Hhat can be de$anded b# creditor Nullit#

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OBLICON 1D BERNARDO
o Debtor /ill then be liable for da$ages for dela#2 neglect or bad faith in the perfor$ance of the substitute

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