Obligations and Contracts Reviewer Art. 1208.

If from the law, or the nature of the wording of the obligations

to which the preceding article refers the contrary does not appear, the
Section 4. Joint and Solidary Obligation 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
Concept distinct from one another, subject to the Rules of Court governing the
multiplicity of suits.
Joint Obligation (obligación mancomunada)
 An obligation where there is a concurrence of several Joint Divisible Obligations
creditors, or of several debtors, or several creditors and
debtors, by virtue of which each creditors has a right to  The most fundamental Effect of Joint Divisible Obligations
demand, and each of the debtors is bound to render o CREDITOR: creditor can only demand for the
compliance with his proportionate part of the prestation payment of his proportionate share of the credit
 Each Creditor has a right to demand the payment of only o DEBTOR: debtor can be held liable only for the
a proportionate part of the credit payment of his proportionate share of the debt
 Each of debtors is liable for the payment of only a  The credit or debt in the absence of any law or stipulation to
proportionate part of the debt the contrary, shall be presumed to be divided into as many
shares as there are creditors and debtors
Solidary Obligation (obligación solidaria)  The credits or debts considered distinct from one another
- Each of creditors is entitled to demand the payment of the  Subject to the Rules of Court
entire credit, while each of the debtors is liable for the payment  General Rule: joint creditor cannot act in representation of the
of the entire debt. others; neither can a joint debtor be compelled to answer for
the liability of others.
Comparative Jurisprudence  In Case of Breach:
o Fault of one debtor: damages due to its breach must
Case in Point: Jaucian vs Querol be borne by him alone
 In case of Defense: debtor alone can avail himself of such
Art 1207. Concurrence of two or more creditors or of two or more defense
debtors in one and the same obligation does not imply that each one of  Payment or acknowledgement by one of the joint debtors will
the creditors has a right to demand and each one of the debtors is bound not stop the running of the period of prescription as to others
to render, entire compliance with the prestation.  “the interruption of prescription by the claim of a creditor
addressed to a single debtor or by an acknowledgement made
There is solidary liability only when the obligation expressly so states, or by one of the debtors in favor of one or more of the creditors is
when the law or the nature of the obligation requires solidarity. not to be understood as prejudicial to or in favor of the other
debtors or creditors.
Nature of Collective Obligation in General
Notes:
General Rule: If the obligation is silent presumption is the obligation is
joint and not solidary  If there is a joint divisible obligation and one of the debtors
becomes insolvent, the other debtors cannot be held liable to
Case: shoulder the debt of the insolvent debtor, since the obligation
of each is considered distinct from each other
A,B and C had executed a promissory note binding themselves to pay to
 If one of the creditor demand from one of the debtor from an
X,Y and Z to pay Php9,000.00. It is presumed that the obligation is joint
obligation about to prescribe, only that debtor who receives the
obligation since the obligation is silent.
demand will be affected by stopping the prescriptive period,
but for other debtors, the prescriptive period continues to run.
If X proceeds to collect against A, X can only collect 1,000.00 from A.
Art 1209. If the division is impossible, the right of creditors may be
Exceptions
prejudiced only by their collective acts, and only proceeding against all
the debtors can enforce the debt. If one of the debtors should be insolvent,
Three cases where collective obligations are solidary and not joint
the others shall bot be held liable for his share.
1. When the obligation expressly state that there is solidarity
Joint Indivisible Obligations
Words to express or that indicates “Solidary Obligation”
 Midway between joint and solidary obligation
1. Aggregate Value
Fundamental Characteristics
2. Jointly and Severally
3. Individually and collectively
1. No creditor can act in representation of others
2. No debtor can be compelled to answer for the liability of the
Note: Solidary Obligation- the choice is left to the solidary creditor to
others
determine against whom he will enforce collection
Other Characteristics
1. If there are 2 or more debtors, the fulfillment or compliance
Case in Point: Inciong Jr. v C.A
requires concurrence of all the debtors
a. Example: 3 debtors are obligated to deliver a horse
2. When the law requires solidarity
2. If there are 2 or more creditor, the concurrence or collective act
Examples: those provided for in Art 927, 1824, 1911, 1915,
of all the creditors
2146, 2157 and 2194 of the CCP

3. When the nature of the obligation requires solidarity

Examples: Obligations arising from criminal offences and
torts.
Effect of Breach in Joint Indivisible
Kinds of Solidarity
 Joint Indivisible obligation can only be enforced by proceeding
against all of the debtors 1. Active (among creditors)
 If one of the debtors failed to comply, the obligation can no a. Definition: a tie existing among several creditors of
longer be fulfilled or performed one and the same obligation by virtue of which each
o Remedy: obligation is converted into one of of them, possesses the character of creditor only
indemnity for damages with respect to his share in the obligation, but in
o Note: the debtors who are ready to fulfill shall not relation to the common debtor or debtors, represents
contribute to the indemnity beyond the all of the other creditors
corresponding portion of the price of the thing or of 2. Passive (among debtors)
the value of the service in which the obligation a. Definition: a tie existing among several debtors of
consists. one and the same obligation, in relation to his co-
debtors, possesses the character of debtor only with
Effect of Insolvency of a Debtor respect to his share to the obligation, but in relation
to the common creditor or creditors, represents all of
 If one of the joint debtors should be insolvent, the others shall the other debtors.
not be liable for his share. 3. Mixed (among creditors and debtors)
Illustration: A, B and C obligated themselves jointly to deliver a horse to
X. If A becomes insolvent, obligation of A will be converted to Effect of Active Solidarity in general
indemnity, liable for the amount of his share to the obligation plus
damages, B and C will only be liable for the amount of their share to the  Creation of a relationship of mutual agency among solidary
obligation. creditors
 Creditor is empowered to exercise against the debtor or debtors
Interruption of Period of Prescription not only for his rights but also the rights which correspond to
other creditors
2 THEORIES ON HOW TO LOOK THE EFFECT OF INTERRUPTION  Consequence: Obligation of the one creditor to render an
OF PERIOD OF PRESCRIPTION accounting of his acts to such creditors

ART 1209 merely provides that the The act of joint creditor which Effect of Passive Solidary in general
right of the creditors may be would ordinarily interrupt the
prejudiced only by their collective period of prescription would not be  Liability of debtor for the payment of the entire obligation,
acts valid with consequent right to demand reimbursement from the
The act of a joint creditor The indivisible character of the others for their corresponding shares once payment has been
beneficial to others as for instance obligation requires collective made.
the interruption of the period of action of the creditors to be  Reason: Debtor in respect to the creditor is the debtor of the
prescription, the act of one would effective entire amount of obligation, but in respect to co-debtors, the
be sufficient debtor is only liable to his share in the obligation

Art. 1210. The indivisibility of an obligation does not necessarily give Distinguished from suretyship
rise to solidarity. Nor does solidarity of itself imply indivisibility.
 Solidary Guarantor (fiador in solidum): is a person who binds
Indivisibility and Solidarity himself solidarily with the principal debtor

 Indivisibility and Solidarity are not identical Solidary Debtor Solidary Guaranty
Liable not only for the payment of
Differences the debt of another, but also for the
payment of a debt which is
Indivisibility Solidarity properly his own
As to Nature Refers to the Refers to the legal tie If solidary debtor pays the entire If a surety pays the entire amount
prestation which or vinculum, and amount of obligation, he has the of obligation he has a right to
constitutes the object consequently, to the right to reimburse the amount demand reimbursement from the
of the obligation subjects or parties of which corresponds to the share of principal debtor of the entire
the obligation his co-debtors amount that he has paid
As to requisites Plurality is not Plurality is Rights are more limited More Rights (an extension granted
required indispensable (extension of time granted to one to the principal debtor would
As to effect of breach When the obligation When there is liability of the debtors without the consent release the surety from the
of converted into one on the part of the of the others would not effect of obligation)
of indemnity for debtors because of releasing the other debtors from
damages because of breach, the solidarity their obligation)
breach, indivisibility among debtors Has no other rights than those Outside of the liability he assumes
of the obligation is remains bestowed upon him in Sec 4 to pay the debt before the property
terminated Chapter 3 of this code. of the principal debtor has been
exhausted, retains all rights,
actions and benefits which pertains
to him by reason of the fiansa

Effect of varied conditions or periods

Art. 1211. Solidarity may exist although the creditors and the debtors
may not be bound in the same manner and by the same period and
conditions.
  The vinculum or bond in solidary obligations may be either  As far as the creditors are concerned, the creditor who
uniform or varied performed the act shall incur the obligation of indemnifying
 The relationship of solidarity is not destroyed by the fact that the others damages
the obligation of one debtor is conditional, the obligation of
another is with a term or period, and the obligation of a third Art. 1213. A solidary creditor cannot assign his rights without the consent
is pure of the others.
 The character of solidary is not destroyed if the debtors are
bound by different conditions or by different periods. Effect of Assignment of Rights

Illustration:  A solidary creditor cannot assign his rights without the consent
of the others.
A, B and C borrowed 60,000 from X binding themselves jointly and o Reason:
severally, and stipulated that in case A shall be demandable on June 15,  If the assignment is made to anyone of the other solidary
1972, in case of B June 15, 1974 and in case of C June 15 1976. X creditors, there is no violation of the precept in Art. 1213
proceeds against A despite repeated demands.  If the assignment is made to a third person there is a clear
violation
X can collect 20,000 from A his share from the obligation, and then wait
until the period is reach. Art. 1214. The debtor may pay any one of the solidary creditors; but if
any demand, judicial or extrajudicial, has been made by one of them,
Case in Point: Inchausti & Co. vs Yulo payment should be made to him.

Quick Facts: Effect of Demand by a Creditor

 Defendants 6 brothers and sisters executed an instrument  Any solidary creditor may demand the payment or
admitting their solidary indebtedness to the plaintiff for performance of the obligation from one, some or all of the
253,446.42 at 10% interest per annum payable in 5 annual debtors
installments the first payable on June 13, 1910  Demand may be judicial or extra-judicial
 The Defendants defaulted> plaintiff brought an action against  Payment shall only be made to the creditor who made the
Gregorio Yulo for the entire indebtedness plus interest in demand
accordance in the acceleration clause  In the absence of demand (judicial or extra judicial) payment
 3 debtors (Francisco, Manuel, Carmen) entered into agreement may be made by the debtor to anyone of the solidary creditors
reducing the obligation to 225,000 at 6% int per annum
payable in 8 yrs first installment on Jun 30 1912 Art 1215. Novation, compensation, confusion or remission of the debt,
made by any of the solidary creditors or with any of the solidary debtors,
Can the plaintiff sue Gregorio Yulo alone considering that there are shall extinguish the obligation, without prejudice to the provisions of Art
other debtors? 1219.

Answer: the debtors, having obliged themselves in solidum, the creditor The creditor who may have executed any of these acts, as well as he who
can bring its action in toto against any one of them. The new agreement collects the debt, shall be liable to the others for the share in the
with the 3 other debtors do not change the nature of the obligation, as obligation corresponding to them.
well settled, “solidarity may exist even though the debtors are not bound
in the same manner and for the same periods and under the same Effect of Novation
conditions.”
 Definition: is the change or substitution of an obligation by
What is the effect of the partial remission of the debt made by the creditor another, resulting in its extinguishment or modification,
in favor if the 3 debtors?  Methods:
o Either by changing its object or principal condition,
Answer: the effect of the partial remission made by the creditor in favor o Or by substituting another in place of the debtor,
of one or more of the solidary debtors necessarily benefit the others, o Or by subrogating a third person in the rights of the
therefore the defendant has the right to enjoy the benefits of the partial creditor.
remission of the debt granted by the creditor.  It may extinguish the obligation, but it creates a new one in
lieu of the old obligation.
What is the effect of the extension of time for payment granted by the Ways of Novation:
creditor to the three of the debtors? 1. If Novation is effected by changing its object or principal
condition
Answer: Gregorio cannot allege as a defense to the action that it is a. The new obligation may be prejudicial or
premature. When they have defaulted in their very first installment, the beneficial to the other solidary creditors
whole obligation have already been matured. i. Prejudicial: the solidary creditor who
affected the novation shall reimburse the
Art. 1212. Each on of the solidary creditors may do whatever may be others for damages incurred by them
useful to the others, but not anything which may be prejudicial to the ii. Beneficial and creditor who affected
latter. novation able to perform: such creditor
shall be liable to the others for the share
Effect of Beneficial and Prejudicial Act which corresponds to them
2. If Novation is effected by Substituting another person in place
 As consequence of mutual agency, each one of the creditors of the debtor
may do whatever may be useful or beneficial to the others but a. The solidary creditor who affected the novation is
not anything which may be prejudicial to the latter liable for the acts of the new debtor in case there is
 As far as debtor or debtors are concerned, a prejudicial act deficiency in performance.
performed by a solidary creditor shall be valid and binding 3. If the novation is effected by subrogating a third person in
because of the principle mutual representation the rights of the solidary creditor
a. The obligation of the debtor or creditors is not in
reality extinguished
 b. The relationship of the other creditors and the debtor benefit, he is not entitled to any reimbursement from his co-
or debtors is maintained debtor.
c. Note: If the novation is effected by subrogating a 2. If the remission is for the benefit of one of the debtors and it
third person in the rights of all solidary creditors, covers his entire share in the obligation, he is completely
the creditor responsible for such novation is liable to released from the creditor or creditors, but he is still bound to
the other creditors for the share which corresponds his co-debtors. IF ONE OF THE DEBTOR IS INSOLVENT:
to them in the obligation. the debtor whose obli is condoned is bound for the share of the
 General Rule: extension of time for the payment of the debtor who is insolvent
obligation is given by the creditor to a solidary debtor does not 3. If the remission is for the benefit of one of the debtors and it
constitute a novation covers only a part of his share: the character of the debtor is
o Reason: in order that an obligation may be not affected. IF CREDITOR PROCEED TO ANY ONE OF
extinguished by another, which substitutes it, it is THE DEBTOR FOR THE PAYMENT OF WHOLE
necessary that it should be so expressly declared or OBLIGATION: such debtor can avail a defense of partial
that the old and new obligation are incompatible remission.
with each other on every point.
 In Suretyship: an extension of time granted to the principal EXCEPTIONS: is case the debt had already been totally paid by anyone
debtor by the creditor without the consent of the surety of the solidary debtors before the remission was affected, ABOVE
extinguishes the latter’s liability RULES IS NOT APPLICABLE
o Exception: when a surety is liable for different
payments, an extension of time as to one or more Effect of Payment to a Creditor
will not affect the liability of the surety for the
others.  if one of creditor is able to collect the entire obligation from
Effect of Compensation and Confusion some of all of the debtors, the obligation is totally
extinguished. Gives rise to an obligation of the creditor to
render an account to his co-creditors.
COMPENSATION CONFUSION
DEFINITION Is a figurative Refers to the merger Art. 1216. The creditor may proceed against any one of the solidary
operation of weighing of the qualities of debtors or some or all of them simultaneously. The demand made against
two obligations creditor and debtor in one of them shall not be an obstacle to those which may subsequently be
simultaneously in one and the same directed against the others, so long as the debt has not been fully
order to extinguish person with respect to collected.
them to the extent that one and the same
the amount of one is obligation. Effect of Demand upon a Debtor
covered by the
amount of the other  Anyone of the debtor can be held liable for the payment of the
IF PARTIAL There may be some doubt as to the part of the entire obligation, the creditor may proceed against any one or
obligation to which the confusion or some or all of the debtor simultaneously.
compensation shall be applied.  The demand against one of them shall not be an obstacle to
Remedy: apply the rules regarding the payment those which may subsequently be directed against the others so
of this code long as the debt has not been fully collected
IF TOTAL The obligation is extinguished altogether and  The debtor cannot and should not complain that the creditor
what is left is the ensuing of liability for should thereafter proceed against him to collect his credit.
reimbursement within each group.  The fact that an action has been brought or that payment has
As to the Creditor: the creditor causing the been enforced against them not being a bar thereto so ling as
confusion or compensation is obliged to there remains a balance to collect.
reimburse to other creditors  The failure or creditor to include the solidary guarantor or
As to Debtor: the debtors benefited by the surety as a defendant in the first suit does not implies a waiver
extinguishment of the obligation being obliged of right of action against such surety
to reimburse the debtor who made the confusion o A creditor’s right to proceed against the surety exists
or compensation possible independently of his right to proceed against the
principal
Effect of Remission  The obligation of the surety is the same as the principal: as
soon as the principal is in default so as the surety
Definition: is an act of pure liberality, the creditor without receiving any
compensation or equivalent, renounces his right to enforce the obligation, Art 1217. Payment made by one of the solidary debtors extinguishes the
thereby extinguishing the obligation either in its entirety or in the part or obligation. If two or more solidary debtors offer to pay, the creditor my
aspect thereof. choose which offer to accept.

2 Kinds of Remission or Condonation He who made the payment may claim from hi co-debtors only the share
which corresponds to each, with the interest for the payment already
1. Total made. If the payment is made before the debt is due, no interest for the
2. Partial intervening period may be demanded.

Effect as to Creditor: gives rise to a liability on the part of the creditor or When one of the solidary debtors cannot, because of his insolvency,
creditors responsible for the remission to reimburse the other for the share reimburse his share to the debtor paying the obligation, such share shall
in the obligation corresponding them. be borne by all his co-debtors, in proportion to the debt of each

Art 1218. Payment by a solidary debtor shall not entitle him to

Effect as to the Debtor: reimbursement from his co-debtors if such payment is made after the
1. If remission covers entire Obli: obligation is totally obligation has prescribed or become illegal.
extinguished and entire juridical relation among debtors is also
terminated. No reimbursement. If the whole obligation is Effect of Payment by a Debtor
condoned through the efforts of a solidary debtor or for his
  The effect is either the total or partial extinguishment of the Art 1221. If the thing has been lost or if the prestation has become
obligation imposible without the fault of the solidary debtors, the obligation shall be
 When one of the solidary debtors paid the whole or entire extinguished.
obligation immediately gives rise to a right to claim from his
co-debtors the share which corresponds to them If there was fault on the part of any one of them, all shall be responsible
o NOT APPLICABLE: when the debtor makes the to the creditor, for the price and the payment of damages and interest,
payment after the obligation has prescribed or has without prejudice to their action against the guilty or negligent debtor.
become illegal
 General Rule on Computation of Interest: shall be computed If through a fortuitous event, the thing is lost or the performance has
from the time payment was made. become impossible after one of the solidary debtors has incurred in delay
 Exception: if the payment was made before the debt became through the judicial or extra-judicial demand upon him by the creditor,
due, no interest may be demanded the provisions of the preceding paragraph shall apply.

Nature of Right of Debtor Effect of the Loss or Impossibility of Performance

 The right of solidary debtor who made the payment to demand 1. If the loss or impossibility of the thing is not due to the fault of
reimbursement from his co-debtor is merely contingent and the solidary debtors, the obligation is extinguished.
conditional 2. If the loss or impissbility is due to the fault of one solidary
 Once payment is made, obligation from creditor is debtor, the obligation is converted to a indemnity, but the
extinguished, gives rise to a new obligation by the co-debtor in solidarity character of obligation remains.
favor of the debtor who made the payment a. Remedy: the creditor can still proceed against one,
or some or all of the debtors with damages, and the
 There is no real case of subrogation
debtor who paid shall have the right to reimburse
against the guilty or negligent debtor.
Case in Point:
3. If the loss or impossibility is due to a fortuitous event after one
Bank of the P.I vs. McCoy of the debtors had already incurred delay, the obligation is
52 Phil 831 converted into indemnity. (SAME RULE)

Art 1222. A solidary debtor may, in actions filed by the creditor, avail
Quick Facts:
himself of all defenses, which are derived from the nature of the
 Bank instituted an action against McCoy and 6 other solidary
obligation and of those, which are personal to him, or pertain to his own
debtors of the payment of indebtedness of P16,000.
share. With respect to those, which personally belong to the others, he
 McCoy entered into a compromise with Bank and paid 12,000
may avail himself thereof only as regards that part of the debt for which
before the hearing the latter are responsible.
Issue: WON McCoy be substituted as Plaintiff to compel other debtors to
Defenses Available to a Solidary Debtor
reimburse to her their proportionate share
 A solidary debtor may interpose against the claim of the
Held: McCoy necessarily acquired the right to prosecute the action for
creditor or creditors any of the following defenses:
contribution against her co-defendants. It was a proper case of
1. Defenses derived from the very nature of the
substitution of parties resulting from the subrogation of one of the
obligation
defendants to the right of the plaintiff.
a. Example: re judicata, prescription, those
which will invalidate the contract
Wilson vs. Berkenkotter
2. Defenses personal to him or pertaining to his own
share
Quick Facts:
a. Example: minority, insanity and other
 Berkenkotter, Wilson and Gulick executed promissory note defenses purely personal to the debtor
solidarily to pay their indebtedness of 90,000 to the Chratered 3. Defenses personal to others, but only as regards that
Bank of India, Australia and China with interest. part of the debt for which the latter are responsible
 Berkenkotter paid on Nov 1944 a. Merely a partial defense
 Berkenkotter demanded reimbursement
 Wilson tendered 625.51 in accordance with the Ballantyne Section 5- Divisible and Indivisible Obligations
Schedule, Berkenkotter refuse to accept
 Wilson deposited the amount to CFI of Manila Concept
Issue: WON Ballantyne Schedule is applicable
Held: Ballantyne Schedule is applicable to obligations contracted during Divisible Obligations: those, which have as their object a prestation,
the Japanese occupation. If the obligation is created during the Japanese which is susceptible of partial performance without changing the essence
occupation then its applicable, but if it was created before the war, then of the obligation.
its not applicable. When appellant paid the entire loan plus interest the If separated into parts, its essence is not changed or its value is not
whole obligation was extinguished, the debtors were no longer liable with decreased disproportionately because each of the parts into which it is
the bank instead a new obligation was created in favor of the appellant divided are homogenous and analogous to each other.

Art 1219. The remission made by the creditor of the share, which affects 3 Kinds of Division
one of the solidary debtors, does not release the latter from his 1. Quantitative- when the thing can be materially divided into
responsibility towards the co-debtors, in case the debt had been totally parts and such parts are homogenous to each other
paid by anyone of them before the remission was affected. 2. Qualitative- can be materially divided, but the parts are bit
exactly homogenous, such in the partition of an inheritance
Art 1220. The remission of the whole obligation, obtained by one of the 1. Ideal or Intellectual- the thing can only be separated into
solidary debtors, does not entitle him to reimbursement from hi co- ideal or undivided parts, not material parts, as in the case
debtors. of co-ownership
Indivisible Obligations: are those, which have as their object a prestation  If the obligation to perform some prestation or service which
which is not susceptible of partial performance, otherwise, the essence of by its very nature is susceptible of partial performance, general
the obligation will be changed. rule is it is divisible.
If separated into parts, its essence is changed or its value is decreased Test of Divisibility
disproportionately
1. Purpose
a. The execution of a certain number of days or work
Art. 1223. The divisibility or indivisibility of the things that are the object b. Accomplishment of work by metrical units
of the obligations in which there is only one debtor and only one creditor c. Accomplishment of analogous things which by their
does not alter or modify the provisions of Chapter 2 of this Title. very nature are susceptible of partial performance
2. Is it expressly stipulated otherwise
Art 1224. A Joint indivisible obligation gives rise to indemnity for
damages from the time anyone of the debtors does not comply with his Obligations not to do
undertaking. The debtors who may have been ready to fulfill their
promises shall not contribute to the indemnity beyond the corresponding  Determination shall depend upon the discretion of the court
portion of the price of the thing or of the value of the service in which
the obligation consists. Section 6- Obligations with a Penal Clause

Effect of Divisible or Indivisible Obligations Concept

 When there is only one creditor and one debtor the divisibility Definition: one to which an accessory undertaking is attached for the
or indivisibility is of little significance purpose of insuring its performance by virtue of which the obligor is
 General Rule: The creditor cannot be compelled partially to bound to pay a stipulated indemnity or perform a stipulated prestation in
receive the prestation neither the debtor be required to make case of breach
partial payments.
 Exceptions It is an accessory obligation attached to principal obligation.
1. When the obligation expressly stipulates the contrary
2. When the different prestations constituting the objects of Purpose of Penalty
the obligation are subject to different terms and
conditions 1. Función coercitiva o de garantia- to insure the performance of
3. When the obligation is in part liquidated and in part the obligation
unliquidated 2. Función liquidatoria- to liquidate the amount of damages to be
awarded to the injured party in case of breach of the principal
Art. 1225. For the purposes of the preceding articles, obligations to give obligation
definite things and those, which are not susceptible of partial 3. Función estrictamente penal- in certain exceptional cases, to
performance, shall be deemed to be indivisible. punish the obligor in case of breach of the principal obligation

When the obligation has for its object the execution of a certain number Kinds of Penalty
of days of work, the accomplishment of work by metrical units, or
analogous things which by their nature are susceptible of partial 1. As to origin
performance, it shall be divisible. a. Legal- when it is constituted by law
b. Conventional- when it is constituted by agreement
However, even though the object or service may be physically divisible, of the parties
an obligation is indivisible if so provided by law or intended by the 2. As to purpose
parties. a. Compensatory- when it is established for the
purpose of indemnifying the damages suffered by
In obligations not to do, divisibility or indivisibility shall be determined the oblige or creditor in case of breach
by the character of the prestation in each particular case. b. Punitive- established for the purpose of punishing
the obligor in case of breach
Determination of Divisibility or Indivisibility 3. As to effect
a. Solidary
 If the object is susceptible of partial performance, the b. Joint
obligation is divisible Art. 1226. In obligations with a penal clause, the penalty shall substitute
 If the object is not, the obligation is indivisible the indemnity for damages and the payment of interest in case of
 The purpose of the obligation is the controlling circumstance 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
In obligations to give of fraud in the fulfillment of the obligation.

 If the obligation is to give which is definite or by its very The penalty may be enforced only when it is demandable in accordance
nature is indivisible, and is not susceptible of partial with the provisions of this code.
compliance it shall be deemed to be indivisible
 If the obligation to give something which by its nature is Effect of Penalty, General Rule
divisible, and susceptible for partial performance, it shall be
deemed as divisible.  Penalty may be considered as reparation or substitute for
damages
 If the injured party desires to recover the damages actually
suffered by him in addition to the penalty, he must prove such
In Obligations to do damages
 The penalty is fixed by the contracting parties as a
 If the obligation is to perform some prestation or service which compensation or substitute for damages
by its very nature is not susceptible of partial performance, it
shall be deemed as indivisible (absolute rule) Exceptions
3 Exceptions to the rule that the penalty shall substitute the indemnity for
damages and the payment of interest in case of noncompliance

1. When there is a stipulation to the contrary

2. When the obligor is sued for refusal to pay the agreed penalty
3. When the obligor is guilty of fraud

Enforceability of Penalty

 May be enforced only when it is demandable

o Demandable: upon breach or nonfulfillment of the
principal obligation by the obligor or debtor