Different Kinds of Obligations and Their Legal Effects

8/11/2019 Different Kinds of Obligations and Their Legal Effects

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DIFFERENT KINDS OF OBLIGATIONS AND THEIR LEGALEFFECTS

A. AS TO WHETHER THEY DEPEND UPON THEHAPPENING OF AN EVENT1. PURE OBLIGATION

- an obligation without a condition nor a periodExamples: I undertake pay P100,000.

I undertake to deliver to you a car.- Immediately demandable; obligation can bedemanded anytime. (effect of pure obligation)Examples:Luigi obliges himself to pay Mario P1,000.00

Other Kinds of Obligation which are immediatelydemandable:1. Obligation subject to a resolutory condition2. Obligation subject to a resolutory period.3. Obligation not to do an impossible condition.

4. Obligation with a potestative condition whichreads - "I promise to pay anytime upon demand."(by agreement of the parties)5. When it is pure.

ART. 1179. Every obligation whose performancedoes not depend upon a future or uncertain event,or upon a past event unknown to the parties, isdemandable at once.

2. CONDITIONAL OBLIGATION- one whose consequences are subject to thefulfillment of a future and uncertain event, orcondition.Examples :

I will deliver to you a washing machine if you pay itsprice in advance.I will support you until you graduate horn UST.

I will lend you P10,000 but fix my computer first.

Manner of Performance1. Actual performance2. Constructive performance

ART. 1181. In conditional obligations, the acquisitionof rights, as well as the extinguishment or loss ofthose acquired, shall depend upon the happening ofthe event which constitutes the condition.

ART. 1182. When the fulfilment of the conditiondepends upon the sole will of the debtor, theconditional obligation is void. If it depends uponchance or upon chance or upon the will of a third

person, the obligation shall take effect in conformitywith the provisions of this Code. (1115)

ART 1186. The condition shall deemed FULFILLEDwhen the obligor VOLUNTARILY prevents itsfulfilment.

Meaning of Condition

Condition is a future and UNCERTAIN event, thehappening of which either CREATES orEXTINGUISHES an obligation subject to it.

Characteristics of a Condition1. Future and uncertain2. Past but Unknown - if it refers to a future event,both its very occurrence and the time of suchoccurrence and the time of such occurrence must beuncertain; otherwise, it is not a condition.

Kinds of Condition and their Legal Effects1. As to whether it makes the obligation immediatelydemandable

1.a Suspensive Condition- a future and uncertain event, the happening

of which CREATES the ob1igiton subject to it.- the demandability of the obligation is

suspended until the happening of theuncertain event, which constitutes thecondition.

- if this takes place, the tie of the law (juridicalor legal tie) does not appear.

Examples: I promie to give you P50,000, if youpass the CPA Board Exams this October, 2009.I wiIl pay their prices if the goods are alreadydelivered to me.I will support you once I'm already employedabroad.Legal Effect: As a rule, the obligation subject to itis VALID.EXCEPTIONS (The obligation is VOID):(a) With a suspensive condition, which is at thesame time, Potestative depending upon the

debtors will.Example: I will pay you if I so desire.(b) With a suspensive condition which isimpossible to performExample: I will pay P100,000 if vou kill my wife.

1.b. Resolutory Condition- An uncertain event which makes an obligation


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2. As to source of its performance2.a. Potestative Condition2.b. Casual Condition

- one which depends upon chance or upon thewill of third person.

Examples ....Legal Effect: VALID

Examples: I will support you so long as you are notyet gainfully employed. (The condition is alsoaresolutory one.)I will pay if you want me to. ('If you want me to' isalso a suspensive and a potestative)Legal Effect: VALID

3.b. Impossible Condition-one which is NOT capable of fulfillment,legally or physically.

Two Kinds of Impossible Conditions:1. Physically Impossible Conditions - when they,

in nature of things, cannot exist or cannot bedone.Examples: I will pay you P10,000 if it will notrain for 1 year in the Philippines.I will give you P1M if you can hold yourbreath underwater for 24 hours.

2.Legally Impossible Conditions - when they arecontrary to law, morals, good customs, publicorder, or public policy.Examples: I will pay P10,000 if you burn my

neighbors house.I will sell to you my land in Manila if youbecome a foreigner.Legal Effect: VOID (Both the condition and theobligation subject to it)

- An obligation subject to a condition NOT TO DOan impossible act is VALID and immediatelydemandable. The said condition shall not heconsidered as agreed upon by the parties andthe obligation becomes a Pure Obligation.

Examples: I will give you P1,000 if you don'tfly to the moon like a bird.I will continue to support you if you don'tcommit adultery while I'm away.

- If the obligation is divisible, the part thereof notaffected by the impossible condition shall bevalid. (OnIy the affected obligation is void)

Example: - I will give yOU P10,000 if you sellmy land, and a car if you kill Pedro.

(Obligation to give P10,000 is valid; whileobligation to give a car is void)

- If the obligation is a pre-existing ob1igtiou, andtherefore does not depend upon the fulfillmentof the condition which is impossible, for itsexistence, only the condition is void.

Example: D borrowed P10.000 from C. If Clater agreed to kill X before D pays him, the

condition to kill X is void but not the pre -existing obligation of D 'to pay C'.

4. As to manner of performance4.a. Positive Condition

- one which consists in the performance of anact; the happening of an event at adetermining time,

Legal Effect: VALID -- ART. 1184The obligation is extinguished:

a) as soon as the time expires without theevent taking place; orb) as soon as it has become indubitable thatthe event will not take place although thetime specified has not expired.

Examples: I will pay if you deliver me thegoods.I will give you P30,000 if you kill him. (Void)

4.b. Negative Condition- one which consists in the omission of an act;an event will not happen at a determinatetime.

Legal Effect: VAILD- ART. 1185.

The obligation shall become effective andbinding:

a) from the moment the time indicated haselapsed without the event taking place; orb)from the moment it has become evidentthat the event cannot occur, although thetime indicated has not yet elapsed.

Example : I will give you P100,000 if you dontmarry before reaching 25 yrs. old.

5. As to Form

5.a. Express Condition - condition is clearly stated.5.b. Implied Condition - condition is merelyinferred.

6. As to Numbers6.a. Conjunctive Condition - there are severalconditions and all must be fulfilled.6.b. Disjunctive Condition - there are severalconditions and only one or some of them befulfilled.


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7. As to Divisibility7.a. Divisible Condition - the condition issusceptible of partial performance.7.b. Indivisible Condition - the condition is notsusceptible of partial performance.

Constructive fulfiIIment of Suspensive Condition: (1) The condition is suspenive;

(2) The obIigor actually prevents the fulfilment of thecondition; and

(3) He acts vo1untariIy.

Constructive fulfilment of Suspensive Condition:Art. 1186 applies also to an obligation subject to aresolutory condition with respect to the debtor whois bound to return what he has received upon thefulfillment of the condition. (Art. 11901

Retroactive effects of fulfillment of SuspensiveCondition

1. In obligations to give - an obligation to give subjecta suspensive condition becomes demandable onlyupon the fulfilment of the condition. However,once the condition is fulfilled, its effects shallretroact to the day when the obligation wasconstituted.

2. In obligations to do or not to do - no fixed rule isprovided.

Retroactive effects as to fruits and interests inobligations to give

1. In reciprocal obligations - there is no retroactivitybecause the fruits (natural, industrial, or civil) andinterests received during the pendency of thecondition are deemed to have been mutuallycompensated.

2. In unilateral obligations - there is usually noretroactive effect because they are gratuitous.

Rights pending fulfilment of Suspensive Condition1. Rights of creditor - he may take or bring

appropriate actions for the preservation of his

right, as the debtor may render nugatory theobligation upon the happening of the condition.2. Rights of debtor - he is entitled to recover what he

has paid by mistake prior to the happening of thesuspensive condition.

ART. 1189 . When the conditions have been imposedwith the intention of suspending the efficacy of anobligation to give, the ff. rules shall be observed incase of the improvement, loss or deterioration onthe thing during the pendency of the condition:

(1) If the thing is lost without the fault of the debtor,the obligation shall be extinguished (As a generalrule, a person is not liable for a fortuitous event);

(2) If the thing is lost through the fault of the debtor,he shall be obliged to pay damages;

(3)When the thing deteriorates through the fault ofthe debtor, the impairment is to be borne by thecreditor (A thing deteriorates when its value is

reduced or impaired);(4)If it deteriorates through the fault of the debtor,

the creditor may choose between the rescission ofthe obligation and its fulfilment, with indemnity fordamages in either case;

(5) If the thing is improved by its nature, or by thetime, the improvement shall inure to the benefit ofthe creditor (A thing is improved when its value isincreased or enhanced by nature or by time or theexpense of the debtor or creditor);

(6) If it is improved at the expense of the debtor, heshall have no other right than that granted to theusufructuary with respect to improvements madeon the thing held in usufruct, which is the right toenjoy the use and fruits of a thing belonging toanother. (1122)

Article 1189 applies only if:a) The obligation is a real obligationb) The object is a specific or determinate thing;c) The obligation is subject to a suspensive

condition;d) The condition is fulfilled; and

e) There is loss, deterioration or improvement ofthe thing during the pendency of the condition.

Kinds of Loss1. Physical Loss - when a thing perishes as when a

house is burned and reduced to ashes.2. Legal Loss - when a thing goes out of commerce

(when it is appropriated) or when a thingheretofore legal becomes illegal.

3. Civil Loss - when a thing disappears in such a waythat its existence is unknown; or even it known it

cannot be recovered.

Effects of fulfilment of Resolutory Condition:(1) In obligations to give - when the resolutory

condition in an obligation to give is fulfilled, theobligation is extinguished and the parties areobliged to return to each other what they havereceived under the obligation.

(2) In obligations to do or not to do - The courts shalldetermine the retroactive effect of the fulfilment


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of the resolutory condition as in the case wherethe condition is suspensive.

Kinds of Obligation according to the person obliged:1. Unilateral - when only one party is obliged to

comply with a prestation.2. Bilateral - when both parties are mutually bound

to each other.

a. Reciprocal Obligations - those which arise fromthe same cause and in which each party is adebtor and creditor of the other.

b. Non- reciprocal - The performance of one partyis not dependent upon the simultaneousperformance by the other.

Remedies in Reciprocal Obligations(1) Choice of remedies

a. action for specific performance of the obligationwith damages; or

b. action for rescission of the obligation also withdamages

(2) Remedy for rescission for non-compliance The remedy is granted for breach by the other

contracting party that violates the reciprocitybetween them.

-Court may grant guilty party term for performance.-The remedies of the injured or aggrieved party arealternative and not cumulative, that is, he isprivileged to choose only one of the remedies, andnot both.

Limitations on right to demand rescission1. Resort to courts - the injured party has to resort

to the courts to assert his rights judicially.2. Power of the court to fix period - the court has

discretionary power to allow a period within wincha person may be permitted to perform hisobligation.

3. Right of third person - rescission is not available asa remedy.

4. Substantial violation - the general rule is that

rescission will not be granted for slight breaches ofcontract; the violation should be substantial as todefeat the object of the parties in making theagreement.

5. Waiver of right - the right to rescind may bewaived expressly or impliedly.

Where both parties are guilty of breach1. First infractor known - the liablity of the first

infractor should be equitably reduced.

2. First infractor cannot be determined - the contractshall be deemed extinguished and each shall bearhis own damages.

3. OBLIGATIONS WITH A PERIOD- an obligation, the creation or extinguishment ofwhich is subject to a future and certain event.

Examples: I will pay on January 5, 2005.

I will support you until you are 21.I will support you until you are dead.I will pay once I have the moneyI oblige myself to pay as soon as possible

Meaning of period or termPeriod is a future and CERTAIN event, the

happening of which either CREATES orEXTINGUISHES an obligation subject to it.

Period and Condition Distinguished (Kinds of Events):As to Fulfilment

Condition: Uncertain (may or may not happen)Period: Certain (will happen)

As to TimeCondition: Generally refers to future events but mayalso refer to past events unknown to the parties.Period: Refers only to future events

As to Influence on the ObligationCondition: Causes an obligation either to arise or toceasePeriod: Merely fixes the time for the efficaciousnessof the obligation

As to Effect it Left to the Debtor's Will

Condition: The obligation subject to such a conditionis VOIDPeriod: The obligation subject to such a periodempowers the court to fix its duration. (VALID)

As to Retroactive EffectsCondition: Has retroactive effects.Period: Has no retroactive effects.

Test of Certainty : A period is a certain event whichmust happen sooner or later at a date knownbeforehand, or at a time which cannot be

determined, while a condition is an uncertain event. Exception to the Test of Certainty (when acondition is treated by law as a period)RULE: When the debtor binds himself to pay whenhis means permit him to do so, the obligation shallbe deemed to be one with period.


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Kinds of Periods1 . As to whether it makes the obligation immediatelydemandable

1. a .Suspensive Period- a future and certain event, the happening of whichCREATES the obligation subject to it.Examples: - I will pay 30 days from October 20,1992.

I will pay the doctor's fees 7 days after the death ofmy father who is dying of cancer.I will support you beginning January 1

1.b. Resolutory Period- a future and certain event, the happening of whichEXTINGUISHES the obligation subject to it.Examples: - I will give you P500 a month until theend of the year.I will support you until December 31

2. According to Source2.a. Legal Period- when it is provided for by law

Example: Deadline for payment of taxes and forrenewal of licenses.

2.b. Conventional or Voluntary Period- when it is agreed upon by the parties

Examples: I will pay on November 5, 2009I will support you until you are 20.

2.c. Judicial Period

- when it is fixed by the courtExamples: - I will pay if I 'm already solventI will pay once I'm already financially able.

3. As to Definiteness 3.a. Definite Period- when it is fixed or it is known when it will come.

Example: I will pay on January 5, 20103.b. Indefinite Period - when it is not fixed or notknown when it will comeExamples: I promise to support you until you die

I will pay once I'm able to do so.

Where duration of Period depends upon the will ofthe Debtor

(1) The debtor promises to pay when his meanspermit him to do so - In this case, what dependsupon the debtors will is not whether he should payor not for indeed he binds himself to pay. What isleft only to his will is the duration of the period.(2) Other Cases - As when the debtor binds himselfto pay:

a. "little by littleb. as soon as possiblec. from time to timed. at any time I have the moneye. in partial paymentsf. when I am in a position to pay

ART. 1195 . Anything paid or delivered before the

arrival of the period the arrival of the period, theobligor being unaware of the period or believingthat the obligation has become due anddemandable, may be recovered, with the fruits, andinterests.> Debtor presumed aware, of period The obligor may no longer recover the thing ormoney once the period has arrived but he canrecover the fruits or interests thereof from the dateof premature performance to the date of maturityof the obligation.> Art. 1195 applies only to obligation to give, andhas no application to obligations to do or not to do.

Effects of Obligations with a Period1. Gen. Rule: Benefit of the Period - intended forBOTH the debtor and the creditor.> Exceptions: a) Term is for the benefit of the debtor alone - hecannot be compelled to pay prematurely, but hecan, if desires to do so.b) Term is for the benefit of the creditor - He maydemand fulfilment even before the arrival of the

term but the debtor cannot require him to acceptpayment before the expiration of the stipulatedperiod.

2 . ART. 1197 . If the obligation does not fix a period,but from its nature and the circumstances it can beinferred that a period was intended, the courts mayfix the duration therefore. The courts shall also fixthe duration of the period when it depends uponthe will of the debtor. In every case, the courts shalldetermine such period as may under the

circumstances have been probably contemplated bythe parties. Once fixed by the courts, the periodcannot be changed by them.

3. Gen. Rule : The obligation is not demandablebefore the lapse of the period.Exception - when the debtor losses his right tomake use of the period (Instance when the creditorca legally demand ahead of time):

a. D-isappearance of the guarantees or securitiesafter their establishment due to fortuitous event.


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b) I-mpairment of the guaranty or security afterits establishment due to the debtors fault.c) V-iolation of any undertaking in considerationof which the creditor agreed to the period.d) l-nsolvency of the debtore) Non-furnishment of the guaranty or securitywhich the debtor promised to give to the creditor.f) A-ttempt of the debtor to abscond, which

means to hide, conceal, or absent oneself withintent to frustrate just demands of his creditors.

II. AS TO THE NUMBER OF PRESTATIONS DUE(DISTRIBUTIVE CHARACTER)

Kinds of Obligations according to object:1. Simple Obligation - one where there is only oneprestation2. Compound Obligation - one where there are twoor more prestations

a) Conjunctive Obligation - one where there areseveral prestations and all of them are due.b) Distributive Obligation - one where one of twoor more of the prestations is due.

(1) Alternative Obligation(2) Facultative Obligation

No. of Prestations DueAlternative: Several are due but performance of oneis sufficient.Facultative: Only one is due but the debtor maysubstitute another

Right of ChoiceAlternative: Belongs to the debtor but may be givento the creditor or to a third personFacultative: Belongs to the debtor

Loss of the Thing Due Thru Fortuitous EventAlternative: If one or more but not all of thealternative is/are lost, the obligation is NOTEXTINGUISHEDFacultative: Loss of the thing due EXTINGUISHES sheobligation.

Loss of the Thing Due Thru Debtor's FaultAlternative: If one or more but not all of thealternatives is/are lost, the debtor is NOT LIABLEFacultative: Debtor is LIABLE

ExamplesAlternative- I promise to deliver to you a horse or a cow- I promise to deliver a new TV set or to repair yourold TV set

Facultative- I promise to deliver to you a horse or insubstitution, a cow.- I promise to deliver a new TV set or in lieuthereof if I want to repair your old TV set.

Alternative Obligation>The right of choice of the debtor is subject to

limitations.1. The debtor cannot choose those prestations

which are (VOID):a. impossibleb. unlawfulc. which could not have been the object of the

obligationExample: I undertake to deliver to Mr. Minuraof Tokyo, Japan any of the following live landanimals:

(a) 100,000 lapu-lapu fingerlings; or(b) 500 blue nape green parrots from

Palawan; or(c) 500 Baguio Ponies as big as an adult

giraffee; or(d) 100,000 cans of lechons; or(e) 10,000 locally bred hogs; or(f) 1,000 monitor lizards (bayawalks)

The debtor cannot choose and alternativesbecause they are not the object of the obligation(live land animals). He cannot choose because it isprohibited by law to sell Palawan green parrotsand he cannot likewise choose alternative because

it is impossible to perform. Hence, he can onlyselect either alternatives e or f.

1. 2. The debtor has no more right of choicewhen, among the prestations whereby he isalternatively bound, only one is practicable.

2. The debtor cannot choose part of oneprestation and part of another prestation.

Example: I promise to deliver 1 sack of rice, ofcorn or beans, to Cruz. Sgd Sy.

Sy cannot compel Cruz to receive 1/2 sack ofrice and 1/2 sack of corn.

>Communication of notice that choice has beenmade.(1) Effect of notice - until the choice is made andcommunicated, the obligation remainsalternative.(2) Proof and form of notice - the burden ofproving that such communication has been madeis upon him who made the choice. The giving ofnotice may be made orally or in writing, expresslyor impliedly.


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ART. 1203 If through the creditors acts, the debtorcannot make a choice according to the terms of theobligation, the latter may rescind the contract withdamages.

>Rescission creates the obligation to return the thingswhich were the object of the contract together withtheir fruits, and the price with its interests.

Effects of Loss of Objects of Obligations1. Some of the objects - even through the fault of thedebtor, the latter is not liable since he has the right ofchoice and the obligation can still be performed.2. All of the objects- if lost through the fault of thedebtor, the creditor shall have the right to indemnityfor damages since the obligation can no longer becomplied with. If the cause of the loss is fortuitousevent, the obligation is extinguished.

When the right of choice belongs to CreditorThe provisions which with respect to the debtor

shall be applicable to the creditor when the right ofchoice is given to him.

Rules in case of loss before Creditor has made achoice:1. If one of the things is lost through a fortuitous event,

debtor shall perform the obligation by delivering thatwhich the creditor should choose from among theremainder, or that which remains if only onesubsists.

2. When a thing is lost through debtor's fault, thecreditor may claim any of those subsisting, or theprice of that which has disappeared, with a right todamages.

3. When all the things are lost through the debtor'sfault, the choice of the creditor shall fall upon theprice of any one of them, also with indemnity fordamages.

4. When all the things are lost through a fortuitousevent, the obligation of the debtor shall beextinguished.

Facultative ObligationEffect of Loss:1. Before substitution - If the principal thing is lostthrough a fortuitous event, the obligation isextinguished; otherwise, the debtor is liable fordamages. The loss of the thing intended as a substitutewith or without the fault of the debtor is liable fordamages. The loss of the thing intended as a substitutewith or without the fault of the debtor does not renderhim liable.

2. After substitution - If the principal thing is lost, thedebtor is not liable whatever may be the cause of theloss, because it is no longer due. If the substitute islost, the liability of the debtor depends upon whetheror not the loss is due to his fault.

C. AS TO EXISTENCE OF SEVERAL DEBTORS and/orCREDITORS (COLLECTIVE CHARACTER)

> one where there are 2 or more debtor or 2 or morecreditors, or both.Examples: - We promise to pay Cruz 100,000 Php.Sgd. Santos & Reyes.I promise to pay Cruz and Reyes 100,000. Sgd. Santos

and Reyes.

Collective Obligation Presumed to be Joint1. If Margie is liable to Lara for P9,000, there can beno problem regarding the determination of the ff:

a. the person liable to pay;b. the person entitled to demand payment;c. the extent of the liability of the debtor; andd. the extent of the right of the creditor.

2. Where there is plurality of parties and the share ofeach in the obligation is specified, the correlativerights and obligations of the parties are known.3. If the share of each debtor is not specified, thepresumption is that the obligation is joint, and as aconsequence:

a. There are as many debts as there are debtors;b. There are as many credits as there are creditors;c. The debts and/or credits are considered distinct

and separate from each other;d. Each debtor is liable only for a proportionatepart of the debt; ande. Each creditor is entitled only to a proportionatepart of the credit.

Kinds of Obligation according to the Number ofParties:1 . Individual Obligation - one where there is only oneobligor or one oblige.2. Collective Obligation - one where there are two or

more debtors and/or two or more creditors.Kinds of Collective obligation:a. JOINT OBLIGATION - one where the wholeobligation is to be paid or fulfilled proportionatelyby the different debtors and/or is to be demandedproportionately by the different creditors.-Principle to Apply: To each to his own.

Presumed joint in the absence of an agreementor law to the contrary.Example: We promise to pay Cruz P10,000. Sgd.Reyes & Santos.


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Joint Indivisible Obligation - it is joint as to liabilitiesof the debtors or rights of the creditors but indivisibleas to compliance.-it constitutes the middle ground between a jointobligation and a solidary obligaton.

Indivisibility and Solidarity DistinguishedIndivisibility

-Refers to the prestation-Only the debtor guilty of breach of obligation isliable for damages.-can exist although there is only one dsebtor andcreditor.-the others are not liable in case of insolvency of onedebtor.

Solidarity-Refers to the juridical or legal tie that bind ties.-All of the debtors are liable for the breach of theobligation committed by a debtor.-There must be at least two debtors or two creditors.-The other debtors are proportionately liable.

Kinds of Solidary Obligation according to the LegalTie:1. Uniform - when the parties are bound by the samestipulations.2. Non-uniform or varied - when the parties are notsubject to the same stipulations.

PRINCIPLES:1. Solidarity may exist altough the creditors and the

debtors may not be bound in the same manner andby the same periods and conditions.2. A solidary creditor may do any act beneficial oruseful to the others but he cannot perform any actprejudicial to them.3. A solidary creditor cannot assign his rights withoutthe consent of the others.4. When a solidary debtor pays the obligation; he isentitled to reimbursement from his co-debtors.

Exceptions: He cannot get any reimbursementwhen the obligation:

a) has already expired ; orb) becomes illegal.5. The remission of the whole obligation obtained byone of the solidary debtors, does not entitle him toreimbursement from his co-debtors.

Rules in case thing has been lost or prestation hasbecome impossible:1. Loss is without the fault and before delay the

obligation shall be extinguished.2. Loss is due to fault on the part a solidary debtor -

all shall be responsible to the creditor, for theprice + damages + interest.

3. Loss through a fortuitous event (without fault but

after delay) - all shall be responsible to thecreditor, for the price + damages + interest.

D. AS TO WHETHER CAPABLE OR NOT OF PARTIALPERFORMANCE

1. DIVISBLE OBLIGATION - is one the object of which,in its delivery or performance, is capable of partialfulfillment.Examples: I will pay you in 3 equal monthlyinstallments beginning this September, 2009.I will construct Lee's building within 1 year fromOctober, 2008.2 . INDIVISIBLE OBLIGATION - is one the object ofwhich, in its delivery or performance, is not capablepartial fulfillment.Examples : I will pay you tomorrow.I will do a concert tomorrow for the Pinatubo victims.Sgd. Gary.

Test used to determine whether Divisible orIndivisible:>The purpose of the obligation or intention of theparties.

Kinds of Division:a. Qualitative Division - based on quality, not on

number or quantity of the things which are theobject of the obligation.

b. Quantitative Division - based on quantity ratherthan on quality.

c. Ideal or Intellectual Division - one which existsonly in the minds of the parties.

Kinds of Indivisibility :

a.

Legal Indivisibility - when a specific provision oflaw declares as indivisible, obligations which, bytheir nature, are divisible.Example: Payment of licenses must be in full andnot partially because the law requires it to beindivisibly performed.

b. Conventional Indivisibility - when the will of theparties makes as indivisible, obligations which, bytheir nature, are divisible.

c. Natural Indivisibility - when the nature of theobject or prestation does not admit of division.


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Example: To give a particuIar car, to sing a song.Etc.

Effect of non-compliance by a debtor in a jointindivisible obligation

If any one of the debtors does not comply withhis undertaking in a joint indivisible obligation, theobligation is converted into one for damages. The

creditor cannot ask for specific performance orrescission because there is no cause of action againstthe other debtors who are willing to fulfil theirpromises.

Obligations deemed Indivisible:1. Obligations to give definite things.

Ex. To give a particular cloth; to deliver a specificcar.

2. 2.Obligations which are not susceptible of partialperformance.Ex. To sing a song; to dance Tikling.

3. Obligations provided by law to be indivisible evenif thing or service is physically divisible.Ex. Payment of Taxes

4. Obligations intended by the parties to beindivisible even if the thing is physically divisible.Ex. Payment of a loan in full at a given period.

Obligations deemed Divisible:1. Obligations which have for their object the

execution of a certain number of days of work.Ex. I promise to repair your TV within 3 days.

I undertake to construct the building within 2years.

2. Obligations which have for their object theaccomplishment of work by metrical units.Ex. I promise to deliver to you 30 cubic meters of

sand.3. Obligations which by their nature are susceptible

of partial performance.Ex. Atty. Lopez oblige himself to teach Law 1 in

Ateneo within 1 school term.I promise to pay 100,000 in 10 equal

monthly installments beginning January,2010.

Divisibility or indivisibility in obligations Not to Do> In negative obligations not to do, the character of

the prestation in each particular case shalldetermine their divisibility or indivisibility.

> Obligations 'to do' and 'not to do' are generallyindivisible.

E. AS TO EXISTENCE OF AN UNDERTAKING TO ASSUMEGREATER LIABILITY

1 . Obligation With a Penal Clause - contains anaccessory undertaking to pay a previously stipulatedindemnity in case of breach of the principalprestation, intended primarily to induce itsfulfillment.- Contains an undertaking to assume greater liability

in case of breach.2. Obligation Without a Penal Clause - contains no

undertaking to assume greater liability in case ofbreach.

Principal obligation - can stand by itself and doesnot depend for its validity and existence uponanother obligation.Accessory obligation - attached to a principalobligation and, therefore, cannot stand alone.

Penal Clause - an accessory undertaking attachedto an obligation to assume greater liability in caseof breach.Ex. I promise to construct your house within 1month and if I'm unable to finish, I will pay youdamages of P10,000.

Purposes of Penal Clause:1. To ensure the performance of the obligation.2.To sustitutre a penalty for damges to be paid.

Differences of Penalty Clause and Condition

Penalty Clause-Constitutes an obligation by itself although anaccessory obligation.-Becomes demandable if the principal obligation isnot performed.

Condition-Does not constitute an obligation by itself.-Never demandable.

Kinds of Penal ClauseA. As to its Origin

1. Legal Penal Clause - when it is provided by law.2. Conventional Penal Clause - when it is providedfor by the stipulation of the parties.

B. As to its Purpose1. Compensatory Penal Clause - when the penaltytakes the place of damages.2. Punitive Penal Clause - when the penalty isimposed merely as punishment for breach.

C. As to its Demandability or Effect


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1. Subsidiary or Alternative Penal Clause - whenonly the penalty can be enforced.2. Joint or Cumulative Penal Clause - when boththe principal obligation and the penal clause.

ART. 1228. Proof of actual damages suffered by thecreditor is not necessary in order that the penaltymay be demanded.

Governing Principles1. Proof of actual damages suffered by the creditor is

not necessary in order to enforce the penalty.2. Unless otherwise agreed upon the debtor cannot

exempt himself from the performance of theobligation by paying the penalty.

3. In obligation with a penal clause, the penalty takesthe place of the indemnity for damages and thepayment of interests in case of non-compliance.

4. The creditor cannot demand the fulfilment of theobligation and the satisfaction of the penalty at thesame time.

5. Accessory follows the principal, and not vice versa.6. Nullity of the penal clause does not affect the

validity of the principal obligation but not theopposite.

7. If the principal obligation is void, the penal clause islikewise void. But if the nullity of the principalobligation is due to the fault of the debtor, thepenalty may be enforced.

Damages in addition to the penalty may be recovered

by the creditor: (ART. 1226)a. If stipulated by the parties;b. If the obligor refuse to pay the penalty; andc. If the obligor is guilty of fraud.

The court may equitably reduce or lessen the penalty:(ART. 1229)a. When there is partial/irregular performance; andb. When the penalty agreed upon is iniquitous or

unconscionable.

Different Kinds of Obligations and Their Legal Effects

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