Kinds of obligations b.

Disjunctive – several conditions where only

one or some must be fulfilled.
Pure and Conditional Obligations 7. As to divisibility
A pure obligation is one which is not subject to any a. Divisible – susceptible to partial performance.
condition and no specific date is mentioned for its b. Indivisible – not susceptible to partial
fulfillment and is, therefore, immediately demandable. performance.

A conditional obligation is one whose consequences are
subject in one way or another to the fulfillment of a
condition. A condition is either a future and uncertain
event, or a past but unknown event, meaning unknown
to the parties at the time that the agreement was made.
A condition must not be impossible (impossible also
refers to illegal things).
A potestative condition based solely on the will of the
debtor is void, but a postetative condition based solely
on the will of the creditor is valid.
However, if the condition is potestative (facultative)
and resolutory, it is a valid condition even if purely on
the will of the debtor.

Types of conditions A potestative condition based solely on the will of the

1. Suspensive condition – a condition that gives rise to debtor does not affect a pre-existing obligation.
the obligation.
2. Resolutory condition – a condition which Casual condition – one where the fulfilment is
extinguishes the obligation. dependent on chance and /or the will of a third person,
such a condition is valid.
Suspensive Condition Resolutory Condition
Mixed condition – a condition where the same partly
Gives rise to the obligation Obligation is extinguished depends upon the will of the parties and partly upon
chance or the will of third persons.
No juridical tie until Juridical tie is consolidated
happening of condition ART. 1183. Impossible conditions, those contrary to
Until happening of Does not affect the good customs or public policy and those prohibited by
condition the obligation is a fulfilment of obligation but law shall annul the obligation which depends upon
mere hope or expectancy will terminate it once them. If the obligation is divisible, that part thereof
condition happens which is not affected by the impossible or unlawful
condition shall be valid.
An obligation is deemed to be one with a period if it is The condition not to do an impossible thing shall be
dependent when the means of the debtor allows him to considered as not having been agreed upon.
do so.
A positive impossible condition will make the condition
Classification of conditions void. If the positive impossible condition only affects a
part of a divisible obligation then only that part is void.
1. As to effect
A negative impossible condition is disregarded, thus the
a. Suspensive – gives rise to the obligation.
whole obligation is valid.
b. Resolutory – extinguishes the obligation.
2. As to form
A positive suspensive condition will extinguish the
a. Express – clearly stated and stipulated.
obligation if:
b. Implied – can be inferred. 1. As soon as the time expires without the events
3. As to possibility taking place; or
a. Possible – can be performed. 2. When it becomes apparent that the event will no
b. Impossible – cannot be performed physically longer happen even if it had not expired yet.
or legally.
4. As to causes or origin A negative condition shall have the effect of giving rise
a. Potestative – the condition depends solely on to the obligation if:
one of the parties. 1. The time indicated has elapsed without the
b. Casual – the condition depends upon chance condition happening;
or the will of third persons. 2. When it becomes apparent that the event will not
c. Mixed – condition is based partly on chance occur or happen, even if the time indicated has not
yet elapsed;
and the will of a third person.
5. As to mode Constructive Fulfillment of condition – a condition is
a. Positive – condition is the performance of an deemed fulfilled when the obligor voluntarily prevents
act. its fulfillment. Applies to both suspensive and
b. Negative – condition is the non-performance resolutory conditions.
of an act or omission.
6. As to number Requisites of constructive fulfilment of suspensive
a. Conjuctive – several conditions that must all condition:
be fulfilled.
1
1. The condition is suspensive; with the intention of suspending the efficacy of an
2. The obligor actually prevents the fulfilment of the obligation to give, the following rules shall be observed
condition; and in case of the improvement, loss or deterioration of the
3. He acts voluntarily. thing during the pendency of the condition:

The fulfillment of a condition retroacts or goes back to (1) If the thing is lost without the fault of the
the moment that the obligation was created. debtor, the obligation shall be extinguished;

The debtor must appropriate or deliver the fruits (2) If the thing is lost through the fault of the
derived from the time that the obligation was created debtor, he shall be obliged to pay damages;
and up to the time that the condition is fulfilled, unless
there is an agreement stating otherwise. (3) When the thing deteriorates without the
fault of the debtor, the impairment is to be borne by
If the obligation is a reciprocal obligation, the fruits the creditor;
derived from the time the obligation was created up to
the time that the condition is fulfilled is deemed to be (4) If it deteriorates through the fault of the
mutually compensated or off-set from each other. debtor, the creditor may choose between the rescission
of the obligation and its fulfillment, with indemnity for
When the obligation is to do or not to do the courts damages in either case;
shall determine as to how the obligation should
retroact. (5) If the thing is improved by its nature, or
by time, the improvement shall inure to the benefit of
If the condition is resolutory, upon its fulfillment the the creditor;
parties are required to return to each other that which
they have received prior. (6) If it is improved at the expense of the
debtor, he shall have no other right than that granted to
Before the fulfillment of a condition the creditor has the usufructuary.
the following rights:
Usufruct - gives a right to enjoy the property of another
For Suspensive Conditions - File an action for the with the obligation of preserving its form and
preservation of the thing; substance, unless the title constituting it or the law
otherwise provides. In situation no. 6, the debtor shall
1. The debtor cannot be required or forced to pay, he have the right of a usufructuary (the person whom the
may recover what is paid by mistake; usufruct is made). Thus, the debtor is entitled to
reimbursement for any necessary expense. A
For Resolutory Conditions - Compel compliance with usufructuary is entitled to be reimbursed for necessary
the obligation because the obligations is already repairs and expenses, but not useful expenses.
demandable to the happening of the condition.
Obligations with a Period
In case of failure to fulfill a condition, the creditor has
the following rights: An obligation is with a period if an interval of time is
1. If the condition is suspensive provided for, which either suspends the demandability
a. The creditor may: of an obligation or will terminate an existing obligation.
i. Refuse to proceed with the agreement; or So it is also a suspensive period or resolutory period.
ii. Waive the fulfillment of the condition
Period Condition
Loss - when the thing perishes, or goes out of Involves a future and Involves a future and
commerce, or disappears in such a way that its certain time or event. uncertain event.
existence is unknown or cannot be recovered. Suspensive period Suspensive condition
only affects the birth of the
Deterioration – when the thing’s value is reduced or it affects obligation and not merely
is partially impaired. the its demandability.
demandability of the
Improvement – something is added to the thing that obligation.
increases its value or when the utility of the thing is Generally no retroactive With retroactive effect.
increase. effect.
The obligation is still The obligation is void if the
Loss, deterioration, or improvement of a thing can be existing if the period condition depends
through the debtor’s fault or negligence in whole or in depends upon the will of upon the will of the obligor.
part or through no fault of the debtor at all. the obligor.

The following rules apply only to specific things.

Article 1189. When the conditions have been imposed

2
Kinds of period
1. Suspensive – suspends the demandability of the
obligation up to the period agreed upon.
2. Resolutory – obligation is immediately effective and
demandable but will be extinguished when the
period arrives.
3. Legal – fixed by law itself.
4. Conventional – agreed upon by the parties.
5. Judicial – fixed by the court.
6. Definite – exact date is specified.
7. Indefinite – the date is not fixed.
Liability on loss, deterioration or improvement in
obligations with a suspensive period.
1. Loss before arrival of period
a. If without the debtor’s fault the obligation is
extinguished.
b. If the debtor is at fault he is liable for damages.
2. Deterioration before arrival of period.
a. If without the fault of the debtor the creditor
shall bear the deterioration.
b. If with the fault of the debtor the creditor can
choose between rescission plus damages or
specific performance plus damages.
3. Improvement before the arrival of the period.
a. If through the natural course of nature and time
the creditor will get the improvement.
b. If due to the debtor’s expense the debtor is
entitled to reimbursement for the necessary
expenses only.
If the period is fixed by both parties it is presumed that
it is for the benefit of both parties. Thus, the creditor
cannot demand payment prior to the lapse of the
period and the debtor cannot pay before the period
without the consent of the creditor.
If the period is for the benefit of the creditor he can
wait for the period to lapse before he can demand
performance or even before the period lapses, but the
debtor cannot insist to fulfill his obligation before the
lapse of the period.
If the period is for the benefit of the debtor, he can
insist on complying before or until the period lapses.
Article 1195. Anything paid or delivered before the
arrival of the period, the obligor being unaware of the
period or believing that the obligation has become due
and demandable, may be recovered, with the fruits and
interests.
Article 1195 only applies to:
1. The obligation is an obligation to give;
2. The period is for the benefit of the debtor;
3. The obligor delivered before the period; and
4. The obligor is not aware of the period or he
believes that the obligation has become due and
demandable.
Article 1195 does not apply when:
1. Obligations to do and not to do;
2. Both parties in a reciprocal obligation perform the
respective obligations before the lapse of the period;
3. When the period is for the benefit of the creditor
alone.
4. When there is payment by the debtor before the
period is intentionally made.
When there is bad faith on the creditor who accepted
the thing prior to the period, he is liable for fruits and
interest to the debtor.
The courts will fix the period if:
1. The obligation does not fix a period; and
2. The period is intended as can be inferred from the
nature of the obligation.
The court can fix the period if the period depends
solely on the will of the debtor.
The creditor can demand payment from the debtor
before the period (the debtor loses the benefit of the
period) in the following instances:
1. When the debtor becomes insolvent after the
obligation has been contracted, unless he can give
guaranty or security;
2. When he does not furnish to the creditor the
guaranty or security as promised;
3. When the guaranty or security is impaired after the
obligation has been contracted due to the fault of
the debtor, even if the loss is through a fortuitous
event, unless he immediately a replacement of equal
value;
4. When the debtor violates any undertaking, in
consideration of which the debtor agreed to the
period;
5. When the debtor attempts to abscond or flee from
the obligation; and
6. When there is an acceleration clause.
Alternative Obligations
Kinds of obligation according to object.
1. Simple obligation. — one where there is only one
prestation
2. Compound obligation. — one where there are two
or more prestations.
o Conjunctive obligation. — one where there are
several prestations and all of them are due; or
o Distributive obligation. — one where one of two or
more of the prestations is due.
Alternative Facultative
There are two or more Only one prestation is
prestations due due
Debtor can choose from Debtor only has once
any choice, but with a right
to substitute
The option to substitute The option to substitute
can be with the debtor is always with the
or creditor debtor.
 Alternative - one where there are two or more
prestations but the debtor is only obligated to
completely perform only one.
 Facultative – one where there is only one
prestation but can be substituted by another.
3
The choice on what prestation is to be performed
generally belongs to the debtor. The choice must not be Solidary Obligation – one in which each if the debtors
those that are unlawful, impossible, or things that could is liable for the entire obligation and each of the
not have been the object of the obligation. creditors is entitled to demand the satisfaction of the
whole obligation from any or all of the debtors.
The debtor does not have the right to choose when:  Plurality of subjects – two or more debtors or two
1. There is an agreement that the choice belongs to or more creditors
the creditor;  Unity of prestation – all debtors or creditors have
2. There is an agreement that a third person will make one whole interest in the prestation.
the choice; or
3. When among the alternative obligations, only one is Joint Obligation – one in which each debtor is liable
practicable. only for proportionate part of the debt and the creditor
is entitled to demand only a proportionate part of the
The choice is effective when it is communicated or credit from each debtor.
made known to the creditor, either through:
 Plurality of subjects - two or more debtors or two
1. Express communication;
or more creditors.
2. Implied communication; or
3. Constructive communication.  Each debtor or creditor has determinate specific
shares in the prestation.
 Constructive communication is applicable when the
In the absence of any agreement or provision of law,
choice belongs to the creditor and the debtor offers
the law presumes that the obligation is Joint. Kinds of
to perform one of the prestations chosen by the
Solidary Obligations
latter and the former accepts or agrees to the same.
As to source:
1. Conventional - There is an agreement that the
Once the choice has been communicated or made
obligation is solidary;
known to the creditor, the obligation now becomes a
2. Natural – when the nature of the obligation
simple obligation.
contemplates solidary obligation; and
3. Legal – when the law provides for the solidary
If the debtor cannot or does not make a choice:
liability.
1. If due to the creditors fault, the debtor may rescind
from the obligation plus damages;
As to the parties:
2. If through his own fault or refusal, he will be forced
to make a choice through a civil action. 1. Passive – solidary debtors
2. Active – solidary creditors
Effects of loss or deterioration or impossibility of the 3. Mixed – solidarity between creditors and debtors
objects/prestations if the choice is with the debtor:
1. When only one option remains the debtor can still As to applicability of stipulations:
comply by performing the only available option; 1. Uniform – all stipulations apply to all, each solidary
2. When two or more options remain the debtor shall debtor/creditor are bound by the stipulations in the
choose any of the remaining options; same manner
3. If all alternative options are lost he is liable if the 2. Non-uniform – the stipulations may vary depending
loss of all is due to his fault; on the debtor/creditor involved.
4. When the loss happens after the choice has been
made the remedies in simple obligations apply. Effects of a joint obligation:
1. The shares of the debtors/creditors are equal unless
Effects of loss or deterioration or impossibility of the the nature of the obligation and the stipulations
objects/prestations if the choice is with the creditor: provide otherwise;
1. If the loss of the other options are due to a 2. Default or delay of one debtor does not affect the
fortuitous event, the debtor shall perform the other;
choice of the creditor from the remaining options, 3. Other debtors may not be compelled to perform all
or the only option if only one remains; the obligations.
2. If the loss is through the fault of the debtor, the
creditor may choose any of the remaining options Solidary Indivisible
or the price of the option/s lost due to the fault of Two or more There can only be one
the debtor, with a right to damages; debtors/creditors debtor/creditor
3. If all are lost due to the fault of the debtor, the Prestation remains the The obligation is
creditor may choose among any of the price of same in case of non- converted into one for
those lost, with a right to damages. performance damages in case of non-
performance
Whenever there is loss of any of the options due to the Each debtor is liable for One debtor is not liable
fault of the debtor, the creditor has a right to be breach of the other for the breach of the
indemnified by the payment of damages. debtors others.
Collective performance is Performance may be done
Joint and Solidary Obligations required by one
4

Article 1209. If the division is impossible, the right of
the creditors may be prejudiced only by their collective
acts, and the debt can be enforced only by proceeding
against all the debtors. If one of the latter should be
insolvent, the others shall not be liable for his share.
This article speaks of a joint indivisible obligation. The
obligation is joint because the parties are merely
proportionately liable. It is indivisible because the
object or subject matter is not physically divisible into
different parts.
 The creditor must demand performance only
against all joint debtors. Demand is not effective for
all joint debtors.
 Insolvency of one debtor will not affect the others.
 Non-compliance by one debtor will convert the
obligation into one for damages or monetary
obligation.
Active Solidarity – solidarity lies with the creditors
Rules between creditors and debtors on Active
Solidarity
1. One solidary creditor may ask for full payment or
full compliance with the obligation.
2. The moment demand is made by one solidary
creditor, payment must be paid to him.
3. Any one of the solidary creditors may extinguish
the obligation.
Rules among the creditors.
1. If the solidary creditor was able to recover from the
debtor, he must thereafter give the share of the
other creditors.
2. Solidary creditors may do whatever that may be
useful to other creditors.
3. Solidary creditors may not do anything that is
prejudicial to the other creditors.
4. A solidary creditor must get the consent of the
other creditors before assigning or transferring his
right or share in the credit.
5. Novation, compensation, confusion or merger may
result in prejudice or benefit to the solidary
creditors.
a. If beneficial to the creditor, the creditor must
share with all other creditors
b. If prejudicial, the creditor is liable to all other
creditors.
6. Compensation takes place when two persons are
creditors and debtors of each other and the
respective obligations are extinguished up to the
extent that they coincide.
Passive Solidarity – solidarity among debtors.
Rule between the creditor and the solidary debtors:
1. One solidary debtor may be obligated to perform
the entire obligation.
2. Even if demand was already made on one solidary
debtor, demand can be made to the others if there
is no full compliance.
3. One solidary creditor may raise defenses against
the creditor.
a. Defenses derived from the nature of the
obligation.
b. Defenses that are personal to one debtor. It can
be raised by other debtors but will only benefit
the part of the debt to whom the defense
belongs.
c. Defenses that pertain to only the share of one
debtor.
d. Defenses that pertain to other debtors.
4. Payment by one solidary debtor extinguishes the
entire obligation.
5. When the object or prestation of the obligation
becomes impossible or when it disappears due to
the fault of one or all the solidary debtors, each of
the debtors shall be liable. If through no fault the
obligation is extinguished.
6. If two or more solidary debtors offer to pay, the
creditor may choose which offer to accept.
Rules among the debtors.
1. If one of the solidary debtors paid the creditor, he
can claim reimbursement from the other debtors.
2. A solidary debtor who has the right of
reimbursement is also entitled to interest if he
paid on due date.
3. If one of the solidary debtors is insolvent the
share of the insolvent debtor shall be borne by
the other debtors.
4. A solidary debtor is not entitled to reimbursement
if he paid the obligation after the obligation has
prescribed or after it has become illegal.
5. A solidary debtor who paid the entire debt may
claim reimbursement even against a debtor whose
share was remitted by the creditor.
6. A solidary debtor who was able to obtain a release
or remission of the entire obligation is not
entitled to reimbursement.
Surety – the surety binds himself solidarily to the
creditor to fulfil the obligation of the principal debtor.
Guaranty – a person, called the guarantor, binds
himself to the creditor to fulfil the obligation of the
principal debtor in case the latter should fail to do so.
Surety Guaranty
Insures the debt Insures the debtor’s
solvency
Surety is primarily and Guarantor is subsidiarily
solidarily liable liable
No benefit of excussion Benefit of excussion is
granted
Excussion – the guarantor can point to the properties
of the principal debtor before he can be made liable.
Divisible and Indivisible Obligations
Divisible Obligation – one where it is susceptible or
capable of being executed or performed in parts.
Indivisible Obligation – one where it is not susceptible
or capable of being executed and performed in parts by
5
 reason of their nature or as provided by law or
agreement of the parties.
Kinds of Indivisible Obligations
1. Natural indivisibility – the nature of the obligation is
that it cannot be performed in parts.
2. Legal indivisibility – the law declares that the obligation
is indivisible. The thing itself need not be indivisible.
3. Conventional indivisibility – the parties agreed that the
obligation is indivisible. The thing itself need not be
indivisible.
Kinds of Division
1. Quantitative – the thing can be materially divided
into parts and such parts are homogenous to each
other, such as when the parts are separated from
each other as in the case of movables, or when the
limits of the parts fixed by metes and bounds as in
the case of immovables.
2. Qualitative – when the thing can be materially
divided, but the parts are not homogenous to each
other.
3. Ideal or Intellectual – the thing can only be
separated into ideal or undivided parts, not material
parts. There is no actual physical division.
Rules to determine if an obligation is divisible or
indivisible
1. An obligation to deliver a specific thing is always
indivisible.
2. An obligation is divisible if it will be executed or
performed within a certain number of days work.
3. An obligation is divisible if the work is to be
accomplished by metrical units.
4. If it is susceptible of partial performance it is
divisible.
5. Even if the obligation is divisible, it may still be
indivisible if the parties agree to it.
6. If the obligation is indivisible by nature, it cannot
be made divisible by agreement of the parties.
Obligations with a Penal Clause
A penal clause is in the nature of an accessory
obligation which makes one party liable or makes him
perform another prestation if the principal obligation is
not fulfilled.
An accessory obligation is one that is attached to the
principal obligation in order to complete the same or
takes place in case of breach.
The purposes of a penal clause:
1. Inducement – to insure the performance of the
obligation
2. Punitive – as punishment for non-performance
3. Deterrence and retribution
4. To fix in advance the damage that may be awarded
without any proof to the same.
The penalty takes the place of indemnity for damages
and the payment of interests in case of non-compliance
with the obligation unless there is an agreement to the
contrary.
Kinds of penalty
1. as to origin
a. legal – expressly stated by the law
b. conventional – agreed upon by the parties
2. as to purpose
a. compensatory – it is set for the purpose of
indemnifying the damages suffered by one party
b. punitive – as punishment in case of breach
3. as to effect
a. subsidiary – if only the penalty will be enforced
in case of breach
b. joint/complementary – both the principal and
obligation should be performed in case of
breach
A penalty is not an alternative. The enforcement of the
penalty is made only if there was non-compliance with
the principal obligation. Thus, the debtor cannot
choose to perform just the penalty.
Generally it is not complementary. The creditor can
either demand fulfilment of the obligation or enforce
the penalty. The creditor cannot demand both unless:
1. there is an agreement that he can enforce the penalty
and at the same time demand performance if the
obligation; or
2. the performance of the obligation becomes impossible.
Proof of actual damages is not necessary. The purpose
of the clause itself is to deter any violation of the
obligation, thus the amount or value of the actual
damage need not be proven as long as the value of the
penalty is given.
Since a Penalty or a penal clause is an accessory
obligation, if the principal obligation is void then the
penalty is also void. However, if the only the penalty is
void and not the principal obligation, then the principal
obligation shall remain to be valid.
The penalty may be reduced by the court in the
following cases:
1. when there is partial compliance
2. when there was but it was irregularly done
3. when the penalty is iniquitous or unconscionable.